We have teamed up with 500 Startups’ CVC Insider to bring you an interview with our very own James Mawson, founder and CEO of Mawsonia. James is interviewed by Nicolas Sauvage who we interviewed in an earlier episode of our Leadership Series.
The Big Ones
EQRx formally launched a year ago with $200m from investors including GV and Nextech, and all its series A investors have now returned for a $500m series B round. The startup is collaborating with stakeholders including pharmaceutical companies to develop more affordable medicines, with late-stage cancer drugs a particular focus. It is also part of an increasingly diverse portfolio of early-stage life sciences companies in GV’s portfolio.
Mobile network operator Orange is the latest corporate to spin off its venture capital unit with a healthy addition to its funding allocation. Orange Ventures will henceforth operate as an independent entity, and has received $426m in capital from its former parent company in addition to the portfolio of its predecessor, Orange Digital Ventures. That portfolio includes Monzo, Raisin and Actility.
Qualcomm Technologies has agreed to buy silicon chip technology developer Nuvia for $1.4bn less than two years after it was founded. Nuvia had raised $293m across two rounds pre-acquisition, both of which included Dell’s corporate venturing subsidiary, Dell Technologies Capital. It could well be an early marker of some of the M&A activity that will spring up as 5G technology begins to get a real foothold in the mainstream.
Dice Molecules, a US-based biopharmaceutical spinout of Stanford University, has closed an $80m series C round featuring spinout-focused investment firm Osage University Partners. RA Capital Management led the round, which also attracted Sanofi Ventures and Alexandria Venture Investments on behalf of pharmaceutical firm Sanofi and real estate investment trust Alexandria Real Estate Equities. Founded in 2014, Dice Molecules has developed a drug discovery platform leveraging technology dubbed DNA-encoded library, which it hopes will make it possible to target a range of conditions with oral treatments rather than requiring injections. Its lead asset is aimed at psoriasis, and the company has been collaborating with Sanofi since 2016.
WeWork aside, Vision Fund’s biggest failure was perceived as OneWeb, the satellite internet operator that declared bankruptcy early last year after SoftBank had pumped some $2bn into the company. However, Bharti Enterprises joined the UK government to buy it for $1bn in the resulting auction, and now SoftBank is back, putting in $350m of a $400m investment expected to help OneWeb complete its initial satellite constellation. It will come out with a 30% stake, and the other $50m was put up by another pre-bankruptcy investor.
Online fitness was earmarked as one of the big growth sectors in our 2021 preview, and the first company in the space to raise big money this year is Keep, which has bagged $360m in series F funding at a valuation of about $2bn. SoftBank Vision Fund led the livestreamed fitness class provider’s latest round, which also featured existing backers Tencent and Bertelsmann Asia Investments.
Autonomous driving software developer WeRide raised $200m in series B funding from bus manufacturer Yutong Group last month and it has now added $110m to close the round at $310m. The round comes after earlier funding provided by investors including Nvidia GPU Ventures, SenseTime, Johnson Electric and Alliance Ventures.
Digital lending software provider Blend has closed a $300m series G round that doubled its valuation to $3.3bn in just five months, which is very impressive. The round was co-led by Tiger Global and Coatue, though no mention of existing corporate backer Salesforce.
Blend isn’t the only fintech developer to have experienced a huge jump in valuation last week. Cross-border payment platform developer Rapyd has also received $300m, in a series D round also led by Coatue. The series D boosted the valuation of Rapyd, which counts Stripe as an earlier investor, to $2.5bn post-money, more than double that of a year ago.
Tessera Therapeutics is the latest in a series of life sciences startups that have raised nine-figure amounts for their first external rounds, having pulled in $230m for its gene writing technology, which aims to prevent disease by rewriting the genome. The series B round was co-led by SoftBank Vision Fund 2, which may itself be looking to get more involved in the sector.
Elsewhere in China, employee management software provider WorkTrans has announced over $190m in funding, $140m coming in a Tencent-backed series D round. The round was disclosed together with a $50.5m series C round and it increased WorkTrans’ overall funding to approximately $236m. It will support further development of the company’s HR management product, which makes use of deep learning and cloud computing technology.
SoftBank’s $5bn Latin America fund has given it a sizeable foothold on the continent, and it has co-led a $190m round for one of its portfolio companies, furnishing and home decor marketplace MadeiraMadeira. The corporate also led MadeiraMadeira’s last round, in which it secured $110m, and the funding is set to fund the expansion of the company’s brick-and-mortar footprint and a prospective range of own-brand products.
GV was among the participants in a $160m funding round for distributed database technology provider Cockroach Labs that valued it at $2bn. The Alphabet subsidiary has been a Cockroach investor since its $6.3m series A round in 2015 and has been along for every round since, as the company has hiked its total funding to $355m.
It seems amazing now that just a year ago it looked like the losses suffered by SoftBank’s Vision Fund could have severely impacted its corporate parent as a whole. There have been few bigger winners from the boom in the public markets and VC spaces, and its next exit could be from Auto1. The online car dealership has announced it plans to launch an initial public offering in Frankfurt that could raise some $1.2bn alongside a private placement. Vision Fund invested $565m in Auto1 at a $3.56bn valuation in 2018 and it’s going to be interesting to see how that valuation compares to the company’s market cap when it does float.
Dynamic window producer View announced plans for a reverse merger in November that would be boosted by $300m in PIPE financing. That amount is set to be boosted to $500m after Singaporean sovereign wealth fund GIC committed a further $200m, adding to some $1.8bn in earlier debt and equity financing. That capital was provided by investors including SoftBank Vision Fund 1, Corning and Seagate.
Cryptocurrency services provider Bakkt was launched by financial exchange operator Intercontinental Exchange (ICE) in 2018 and less than three years on, it has agreed to a reverse merger set to value it at $2.1bn once the deal closes. It will also take an NYSE listing and $325m in PIPE financing from investors including ICE. It had raised more than $480m in venture funding from backers also including Microsoft unit M12, PayU and Boston Consulting Group.
Germany-listed food delivery service Delivery Hero has committed €50m ($61m) to set up an independently-managed, early-stage corporate venture capital firm called DX Ventures. DX Ventures will invest in sectors including on-demand services, food technology, sustainable innovation, artificial intelligence, financial technology and logistics. It will be led by managing director Duncan McIntyre.
We have teamed up with 500 Startups’ CVC Insider to bring you and interview with Aaron Brandt of Hypertherm Ventures. Aaron is interviewed by Nicolas Sauvage who we interviewed in an earlier episode of our Leadership Series.
The Big Ones
One of the big shifts in 2020 was the surge in educational technology providers, with China leading the way. That was before a flurry of large rounds in the space right before the end of the year, the biggest being a $1.6bn series E round for online tutoring platform developer Zuoyebang that included Alibaba and SoftBank Vision Fund 1. Zuoyebang’s overall funding now stands at roughly $2.9bn, some 80% of which has come in the past seven months.
Andre Maciel, former managing partner at Japan-headquartered telecommunications and internet group SoftBank’s $5bn Latin America-focused fund, has raised $50m for the first close of an independent venture capital firm. Maciel set up Volpe Capital in 2019 with SoftBank’s backing, and its first fund also has investment bank BTG Pactual as a cornerstone limited partner. Marcelo Claure, head of SoftBank LatAm, and the $5bn fund’s managing partners, Paulo Passoni and Shu Nyattta, have also invested in the fund. Volpe Capital plans to invest in up to 20 early stage companies at series A stage, with a primary focus on the Brazilian market, according to regional trade body Lavca.
SoFi has come a long way since it started as a student loan refinancing specialist, having expanded into a multi-pronged financial services platform that offers lending, investment and insurance products. The company, which has raised some $2.4bn from investors including SoftBank and Renren, has also agreed a reverse merger with a SPAC called Social Capital Hedosophia Holdings Corp V and will be listed on the New York Stock Exchange. The deal will be boosted by $1.2bn in PIPE financing and the merged company will be valued at $8.65bn once the deal closes, double the valuation at which SoFi last raised money.
On GUV, the biggest deal was Hinge Health, a US-based digital therapeutics company backed by commercialisation firm IP Group, which closed a $300m series D round co-led by Coatue Management and Tiger Global. The round valued Hinge at $3bn. Founded in 2014, Hinge Health has built a digital healthcare platform for people living with chronic musculoskeletal conditions, such as back and joint pain. The offering consists of an app, wearable sensors and access to remote health coaching to deliver physical and behavioural health therapy. Hinge Health was co-founded by chief executive Daniel Perez, who gained a PhD in medical sciences from University of Oxford in 2013, and president Gabriel Mecklenburg, who obtained an MPhil in bioengineering from Imperial College London in 2014. But the company was only founded after both had graduated and worked together at Oxbridge Biotech Roundtable, an organisation looking to connect academia with industry since 2011.
B2B e-commerce marketplace Udaan has pulled in $280m from investors including Tencent for the second tranche of a series D round now standing at $865m. Tencent also took part in the round’s 2019 first close, as did Citi Ventures, and the extra funding came at a $3.1bn post-money valuation. Its overall funding has been increased to $1.15bn.
Online food delivery and restaurant listings platform developer Zomato has pulled in $660m through a series J round valuing it at $3.9bn post-money. Info Edge and Ant Financial, the two corporates that have historically been its two key investors, do not however appear to have participated in the round, the funding coming from Fidelity, Tiger Global Management, Luxor Capital, Kora Management, D1 Capital Partners, Baillie Gifford, Mirae Asset and Steadview Capital.
Cloud cybersecurity platform developer Lacework has closed $525m in funding from investors including Snowflake Ventures, which provided $20m, and existing backer Liberty Global Ventures. The company had previously raised less than $75m but said it increased revenue 300% in 2020, and that big jump in funding is indicative of how the ongoing public markets tech boom is having an impact further down the pyramid.
As 2020 drew to a close, game creation platform developer Roblox had put its initial public offering on hold, citing erratic post-IPO share movement of other tech companies. Now we can see what the results are. Roblox has secured $520m in a series H round featuring Warner Music Group valuing it at $29.5bn – a more than sevenfold increase on the $4bn valuation in its series G round under a year ago. The company has also revealed it’s eschewing an IPO in favour of a direct listing, which suggests it really wasn’t happy with its underwriters for the offering.
DXY, the Chinese operator of an online medical community, has completed a $500m round featuring Tencent Investment, at the end of a year when it established a real-time information service covering covid-19 that aimed to combat harmful rumours. Tencent had originally invested $70m in DXTY through a 2014 round that preceded a $100m series D round four years later.
Chinese AI chipmaker Horizon Robotics secured $150m in series C funding just last month but has already added $400m in a series C2 round co-led by lithium-ion battery maker Contemporary Amperex Technology. Recent reports suggested the company was targeting a total of $700m across multiple tranches, its earlier backers including Intel Capital and SK Global subsidiaries SK China and SK Hynix.
Grab is one of two big players in Southeast Asia’s on-demand ride market, and it has also been arguably the quickest in the sector worldwide to expand into other areas. It has reportedly raised $300m for Grab Financial Group, a spinoff that encompasses a range of financial services including digital payment technology, lending, insurance and investment management. Conglomerate Hanwha is leading the round through its Hanwha Asset Management subsidiary.
Chinese AI chipmaker Enflame Technology has raised $279m in the biggest round announced so far this year. Enflame produces artificial intelligence chips for data centres and has now secured a total of over $470m since it was founded in 2018. Tencent, which participated in the $279m series C round, has backed it in all four rounds it has disclosed.
Aeva develops lidar sensor technology for use in autonomous driving systems, and two months ago it agreed a reverse merger with a SPAC called InterPrivate Acquisition Corp set to value it at about $2.1bn once the deal closed. Now the company, which is backed by Porsche and Lockheed Martin, has agreed a $200m investment by one of InterPrivate’s shareholders, technology investment firm Sylebra Capital, that will close when the other deal does. It’s an interesting symptom of the ongoing public markets boom.
Divvy is the developer of an offering that combines business expense management software with smart credit cards, helping companies track and manage their expenses and spending. It has secured $165m in a series D round featuring Hanaco and PayPal Ventures at a $1.6bn valuation. The round increased Divvy’s overall funding to $410m, $200m of which came in a 2019 series C round.
Dremio, developer of a data management platform for data lake storage, has received $135m in series D funding from backers including Cisco Investments at a $1bn valuation. The corporate also took part in Dremio’s $70m series C round 10 months ago, and the latest round boosted its total funding to $250m. We’ve had a host of big enterprise software IPOs over the past year or two, but it looks as if the next wave of unicorns in the space is emerging.
Antibody therapy developer Boan Biotech has raised $106m from investors including Bank of China’s BOCG investment vehicle at a pre-money valuation a touch over $750m. The company was founded in 2013 and acquired by Luye Pharma Group six years later, the latest round representing the first it has closed since then.
US-based sports franchises the Green Bay Packers, Milwaukee Bucks and Milwaukee Brewers have backed an impact investment fund for minority-run startups. The franchises committed to Equity League as “a new impact investment division of venture capital fund TitletownTech,” alongside software producer Microsoft.
Arvelle Therapeutics was spun off in 2019 by drug developer Axovant to commercialise an epilepsy drug licensed from pharmaceutical company SK Biopharmaceuticals. The company bagged $208m in series A and project funding last year but its investors will exit after Angelini Pharma agreed to acquire it in a deal that could hit $960m. SK Bio will also get a nice return from its 12% stake in Arvelle.
The Big Ones
Ant Group may not have been able to successfully go public but China’s other hugely valuable VC-backed private company, ByteDance, is reportedly in the process of raising $2bn at a $180bn valuation. KKR and Sequoia Capital are co-leading the round, but no word yet on whether it’s set to include SoftBank, a participant in its last round, in 2018, which valued it at $78bn.
Luxembourg-headquartered venture capital fund European Circular Bioeconomy Fund (ECBF) reached a €175m ($213m) second close on Tuesday with €93m from limited partners including corporates Volkswohl Bund Versicherungen, Nestlé and Neste. Insurance provider Volkswohl Bund Versicherungen, packaged food and beverage producer Nestlé and oil processor Neste were joined in the second close by promotional bank NRW Bank and an unnamed family office. ECBF was launched by the European Commission and European Investment Bank in November 2019. The European Investment Bank has provided a total of €100m for the vehicle as a cornerstone investor. The fund is focused on late-stage investments in bioeconomy technology developers located in Europe. It is two thirds of the way towards a targeted close of €250m.
Roblox and Affirm may be putting their initial public offerings back to 2021, but that hasn’t stopped mobile commerce platform developer Wish pricing an IPO that will net it just over $1.1bn. The JD.com-backed company is floating at the top of its range after pumping its revenue up 32% in the first nine months of 2020, at a valuation about 50% higher than in its last round, in August 2019, so the outcome of this one is going to be very interesting. Were the others priced badly or is the market just supercharged right now?
University of British Columbia-linked AbCellera was one of the recent IPO candidates that saw a huge first-day pop, pricing an upsized $483m IPO at $20 per share early in the week only for its shares to open at more than three times that price. The Eli Lilly-backed antibody therapy developer eventually closed that offering at $556m after the underwriters unsurprisingly took up the over-allotment option. It won’t be the last time that happens this year.
Google X may not have been the goldmine some at its parent company hoped for, but an unqualified success at this point has to be Verily, the company applying big data technology to healthcare and life sciences. Verily has just raised $700m from existing investors including Google owner Alphabet, representing its third mega round in total. Alphabet was joined by Temasek, which invested $800m in Verily in 2017, as well as Silver Lake and Ontario Teachers’ Pension Plan, which had added $1bn two years later.
Xingsheng Preference Electronic Business, the group buying platform mainly known as Xingsheng Youxuan, has agreed to raise $700m from e-commerce group JD.com through a strategic collaboration agreement. The news was revealed in a regulatory filing without a valuation attached, but Xingsheng Youxuan was reportedly in the process of securing $800m in a Tencent-backed round in July at a $4bn post-money valuation.
Apex Microelectronics, a chipmaker spinoff of printing and imaging technology producer Ninestar, has raised $489m from investors including Gree Electric Appliance’s Zhuhai Gree Financial Investment Management vehicle. The round was led by the $31bn China Integrated Circuit Industry Investment Fund II, and Gree Financial Investment Managementsupplied $53.5m in return for a 1.8% stake.
StockX runs an e-commerce marketplace that specialises in collectible and high-grade goods such as sneakers, handbags and electronics, and has raised $275m in series E funding at a $2.8bn post-money valuation. Tiger Global Management led the round, and StockX’s earlier investors include GV, the Alphabet subsidiary formerly known as Google Ventures, which has had some year it’s fair to say.
With vaccines beginning to be rolled out, it feels like the tech space is finally looking forward to a 2021 where some dormant sectors will be making big returns (potentially in both senses of the word). That could be part of the impetus behind the $182m in funding just raised by ride hailing service Bolt. Daimler and Didi Chuxing-backed Bolt has diversified its business model by leaning more heavily on logistics in recent months, and the round looks to have more than doubled its valuation to roughly $4.3bn.
Tencent has co-led a $153m funding round for Yonghui Fresh Food, a business-to-business fresh produce distribution subsidiary of supermarket chain Yonghui Superstore, with China International Capital Corporation’s CICC Qizhi fund. The round also featured Yonghui Superstore itself, which retains a 32% stake in the company having also backed its $145m series A round two years ago.
China-based venture capital firm BeFor Capital has amassed RMB700m ($107m) of capital across two funds, one backed by solar cell manufacturer Canadian Solar. The firm pulled in approximately $76.4m for the first close of its Fund III and $30.5m for the close of Fund IV. It now has over $306m of capital under management across four funds and a number of special purpose vehicles. Canadian Solar contributed to Befor Capital’s Fund III alongside funds backed by the government of China’s Inner Mongolia and Hohhot regions.
Boehringer Ingelheim has agreed to acquire one of its portfolio companies, oncology therapy developer NBE-Therapeutics, in a transaction that could reach $1.43bn once milestone payments are factored in. NBE is working on antibody-drug conjugates to treat cancer, and has raised approximately $68m from investors including Boehringer Ingelheim Venture Fund and pharmaceutical firm Novo.
Lidar sensor and software provider Innoviz has chosen the reverse merger route, one boosted by $200m in PIPE financing from investors including corporate backers Magna International and Phoenix Insurance. The combined company will be valued at about $1.4bn once the deal closes, and Innoviz’s existing investors also include Samsung Catalyst, SoftBank Ventures Asia, Naver, Delek Motors, Delphi Automotive and Harel Insurance Investments and Financial Services.
Upstart, the owner of an online lending platform that utilises artificial intelligence in its activities, is also valued above $2bn, following a $240m initial public offering. Its shares rocketed up 47% in their first day of trading yesterday and its pre-IPO backers include Rakuten, Progressive and GV, which sold $1.6m of shares having backed Upstart’s $1.75m seed round eight years ago. Its remaining stake is worth about $28m at the current share price.
The second half of 2020 has been a bonanza period for IPOs, and things don’t show any sign of slowing down either, not with the sky-high valuations companies are seeing as soon as they hit the market. UiPath, a provider of robotic process automation software, has filed confidentially to go public, five months after a Tencent-backed series E round valuing it at $10.2bn. It has so far raised some $1.3bn in funding, with Alphabet’s CapitalG also among its investors.
Coinbase is the other unicorn to have confidentially filed to go public in the last day or so, the crypto trading platform having been valued at $8bn in its last round two years ago. Now that figure looks sure to rise, given the increasing activity in blockchain technology and the recent shooting up of Bitcoin prices. It has raised approximately $517m from investors that include New York Stock Exchange, NTT Docomo, BBVA and USAA.
In this week’s episode of the Leadership Series podcast, we talk to Larry Loev, chief executive of Ariel Scientific Innovations, about leading a tech transfer office for a young but ambitious university, the opportunities of tech transfer in a country famed for its startup ecosystem and how to bring innovation to oenology.
The Big Ones
2020 has been a year when, for obvious reasons, innovative drug development has taken a leap forward. Tempus combines artificial intelligence and molecular data to come up with precision therapeutics, and has secured $200m in series G2 funding from investors including Novo and Google at an $8.1bn post-money valuation. That’s a 62% leap from its $100m Novo-backed series G round nine months ago.
University of Bristol is supporting a £15m ($20m) incubator and venture fund intended to anchor a deep tech epicentre in the west of England. Science Creates includes the Science Creates Ventures EIS Fund 1 that will focus on Bristol-based pre-seed and seed-stage deep tech startups in areas such as therapeutics, advanced materials, hardware and software. The incubator is an evolution of the existing University of Bristol-linked science innovation hubs Unit DX and Unit DY. It will connect resident companies to mentoring and strategic partnerships aligned with science and engineering-oriented objectives. Science Creates’ founding team includes Harry Destecroix, who previously co-founded University of Bristol-founded diabetes treatment developer Ziylo, acquired by pharmaceutical firm Novo Nordisk in 2018.
Food delivery app developer DoorDash has floated in one of the year’s largest tech IPOs, one that will net it almost $3.37bn at a valuation more than double that of the $16bn achieved in its June 2020 series H round. That jump has been described by some onlookers as insane, though it’s worth noting that few companies DoorDash’s size can boast of trebling revenue year on year while slashing their net loss by over 70%. It’s also a victory for DoorDash’s largest backer, SoftBank Vision Fund, which first invested at an $865m pre-money valuation.
Isar Aerospace, a Germany-based satellite technology launch services spinout of TU Munich, has raised €75m ($90.8m) of series B funding from investors including Unternehmertum Venture Capital (UVC) Partners, an affiliate of the university’s tech transfer arm UnternehmerTUM. The round also featured Airbus Ventures, among others. Founded in 2018, Isar is working on a two-stage launch vehicle designed to deploy satellites into low-earth orbit. Its rockets use light hydrocarbon and liquid oxygen-based fuel that has a lower environmental impact than common propellants. The company will use the funding for research, development and production activities ahead of its first commercial launches, which are planned for early 2022. UVC Partners and Airbus Ventures previously backed a $17m series A round for Isar in December 2019
Nuance Pharma has secured $181m in series D funding from investors including Konruns Pharma to advance its lead candidate, a small molecule anti-tumour drug, through early clinical trials. Nuance is also working on treatments for respiratory diseases, iron-deficiency anaemia and post-operative pain.
Brazil-based Conductor has bumped its latest round to $170m by raising a further $20m from Singaporean government-owned Temasek. It raised the first $150m last month in a first close led by Viking Global Investors, and Visa is also a backer, having invested in the banking and card issuing software provider two years ago.
Cityblock Health was spun off by Alphabet’s urban innovation subsidiary, Sidewalk Labs, three years ago and has already raised some $300m in funding, $160m coming in a series C round valuing it above $1bn. The round was led by venture firm General Catalyst and the company’s investors also include EmblemHealth and Echo Health Ventures.
In a year full of unpredictability and uncertainty, detailed information can make all the difference, so it’s no surprise risk intelligence provider FiscalNote has pulled in new funding, raising $160m in a debt and equity round featuring Renren and SoftBank in addition to The Economist Group, Jipyong and S&P Global Ventures. FiscalNote, which has more than 4,000 customers, is putting the money into strengthening its technology and growing its services.
Intel Capital helped Pico, a provider of IT systems and technology for financial market operators, complete a $135m series C round today that also featured CreditEase’s Fintech Investment Fund. Pico’s investors and clients include Wells Fargo, UBS, Goldman Sachs, JP Morgan, Nomura, DRW Venture Capital, Chicago Trading Company, Capital Markets Trading and Simplex Investments.
Beijing Snowball Finance Information Technology provides cross-border data on financial markets as well as the means to invest in funds, bonds, trusts and cryptocurrency. It has just secured $120m in series E financing from private equity firm Orchid Asia, adding to over $170m in earlier funding from the likes of Ant Group and Renren.
The cybersecurity sector is increasingly moving towards the industrial space, as the internet of things makes large infrastructure more vulnerable to cyber attacks. Dragos is one of the companies offering an industry-focused cybersecurity product, and it has raised $110m in a series C round co-led by National Grid Partners and Koch Disruptive Technologies. The round also featured fellow corporate investors Schweitzer Engineering Labs, Hewlett Packard Enterprise and Saudi Aramco Energy Ventures.
Airbnb has timed its flotation perfectly, raising $3.49bn at a price comfortably above its range. Alphabet-backed Airbnb has had a miserable year earnings wise due to worldwide social distancing measures, but investors will be betting on a big rebound in 2021 as covid-19 vaccinations begin to be distributed and governments start easing travel restrictions.
Uber has sunk some big money into its autonomous driving technology unit, Advanced Technologies Group, over the years, which was what led the corporate to spin it off last year with $1bn from Denso, Toyota and SoftBank Vision Fund. It has now agreed to merge Uber ATG with another self-driving technology developer, Aurora, through a deal that will involve it investing $400m in the company and taking a 26% stake in the merged business at a $10bn valuation. It’s a similar model to the one Uber has used to divest regional businesses in China, Southeast Asia and Russia.
Silverback Therapeutics has had a very successful IPO too. It floated a week ago, pricing an upsized offering above the range, and has since seen its share price shoot up over 50%. The underwriters have accordingly boosted the size of the IPO to almost $278m, adding to $211m in venture funding from investors including Celgene, Bristol-Myers Squibb and Alexandria Venture Investments.
China-based 17 Education & Technology Group has floated in the United States, in an initial public offering that raised nearly $288m. The company, which secured $250m nearly three years ago from investors including ByteDance, provides in-class learning software and after-class tutoring services. It priced the IPO at the mid-point of its range, and the offering came after 17EdTech nearly quadrupled its revenue year on year in the first nine months of 2020.
Fintech as a whole is having a moment right now, Affirm having agreed to pay $264m to acquire instalment payment service PayBright in a deal that will allow GoEasy to exit. Consumer finance provider GoEasy invested $25.5m in PayBright in September last year, which makes the transaction a relatively early exit.
In this week’s podcast episode of the Leadership Series, we talk to Mike Zimmerman, partner at Main Sequence Ventures, about improving commercialisation activities in Australia, the importance of deep tech over the next few decades and developing a plant-based burger in partnership with Hungry Jack’s at breakneck speed.
The Big Ones
Electronics and appliance retailer Suning has spun off its online retail platform and e-commerce services activities into a newly formed business called Yunwang Wandian with approximately $913m in funding. The capital was provided by Shenzhen Capital Group, SenseRobot Management, Ningbo Xianshi Enterprise Management and Central China Asset Management at a reported $3.8bn valuation.
Carmaker Dongfeng Motor has pumped $91m into a $243m investment fund that will target developers of automotive technology in addition to products in adjacent sectors such as big data, cloud computing and artificial intelligence. Dongfeng Bocom Yuanjing Motor Investment Fund has received the same amount from Bank of Communications’ Bocom International Holdings unit, and the two will each own 37.3% stakes in the vehicle.
We don’t generally cover acquisitions of publicly-listed companies, but Salesforce’s forthcoming and just announced $27.7bn cash and stock purchase of enterprise messaging tool developer Slack is notable enough to make an exception. Slack hit the public markets in a direct listing 18 months ago with a guidance price valuing it at $13.1bn – and many had labelled its growth in the past few months as underwhelming, indicating the fever for enterprise software right now. Its backers include SoftBank Vision Fund, owner of a 7.3% stake pre-listing; GV, which first invested at a $1.12bn valuation; and Comcast Ventures, which initially invested at a $3.8bn valuation. The acquisition is a somewhat unceremonious – if lucrative ending – for Slack as a standalone business, which in 2016 welcomed Microsoft’s entrance into the market with a ballsy full-page ad in the NY Times. Now, of course, Microsoft Teams has several times the amount of daily active users that Slack has – but with Salesforce’s considerable clout behind it, this could turn into the moment where Slack really becomes big business and justify that hefty price tag despite a very volatile share price.
Monzo, a UK-based digital bank, secured £60m to increase a series G round featuring Vanderbilt University to £125m ($167m). The new funding came from conference operator Ted Global, Novator, Kaiser and Goodwater Capital, according to TechCrunch. Monzo confirmed it as an extension to its existing series G funding. Payment services provider Stripe, telecoms firm Orange, Y Combinator, General Catalyst, Accel, Goodwater Capital, Thrive Capital, Passion Capital and Reference Capital and provided the first £60m in June this year, and the company had since quietly raised another £5m. Monzo runs a digital bank with more than 4.8 million customers, offering current accounts as well as business accounts, which are used by some 60,000 of its customers. It has now raised in excess of $550m since it was founded in 2015. The series G funding was secured at a $1.57bn valuation, a notable downturn to the $2.5bn valuation achieved when Monzo raised $144m in June 2019 from investors including Orange subsidiary Orange Digital Ventures and Stripe.
Lastly, Indian e-commerce marketplace Flipkart is spinning off PhonePe, a digital financial services business with more than 250 million users. Flipkart’s parent company, Walmart, is leading a $700m round that will provide the basis of PhonePe’s emergence as a partially separate company, and the remainder of the funds will be sourced from as yet undisclosed Flipkart backers, valuing PhonePe at $5.5bn post-money.
Space and satellite technology isn’t one of the busiest parts of the startup space but its companies are among the better founded inhabitants. China-based Chang Guang is developing a satellite constellation that will provide high-definition images and video, and has raised $375m from investors including iFlytek, reportedly as it prepares to go public. Other companies in China’s space tech space that have raised notable amounts include iSpace and LandSpace.
The United States’ VC space may have had its annual Thanksgiving lull, but China looks to have picked up the funding baton. Virtual classroom software provider Empower Education Online (EEO) leads the pack, having picked up $265m in a series C round featuring Tencent and Susquehanna International Group. Its earlier strategic investors include New Oriental Education and Technology, TAL Education Group and ATA, none of which were named as participants in the latest round.
Healthcare organisation software provider Olive has had a busy 2020, closing its third round this year by welcoming GV to a $225m round valuing it at $1.5bn. The Tiger Global Management-led round also served to double the company’s overall funding to about $450m, its earlier backers including multi-corporate backed venture firm Ascension Ventures.
Community buying platform developer Nice Tuan has meanwhile closed its fourth round of 2020, raising $196m in a C3 round co-led by existing investor Alibaba. Nice Tuan’s previous three rounds totalled about $250m and while there’s no official word on its valuation, the considerable growth of many of its peers in China’s online education sector this year indicates it’s likely in the multiples of what it was valued at in January.
Everlywell is one of the companies that has experienced major growth this year, adding a covid-19 product to its range of home testing kits and now raising $175m in a series D round featuring over-the-top media company The Chernin Group. The round valued Everlywell at $1.3bn according to Forbes, and it has now secured over $250m in funding since being founded.
UK-headquartered venture capital firm Firstminute Capital has launched a $111m second fund with backing from limited partners including internet group Tencent and consumer goods and chemicals producer Henkel. The vehicle is anchored by investment trust RIT Capital Partners and its LP list also features VC fund Atomico, four undisclosed California-based investment firms and some 70 founders of businesses valued at $1bn or higher.
It’s been a heady week for spinoffs, those companies flipped out of established businesses with external funding and their parents retaining a stake. First up is JD Health, the healthcare and medical retailer and services provider spun off by e-commerce group JD.com. JD Health has floated in Hong Kong’s largest initial public offering this year, raising $3.48bn after pricing the IPO at the top of its range, at a valuation nearing $29bn. JD.com isn’t finished either: its JD Logistics spinoff is recruiting bankers for an offering expected to raise up to $3bn.
Dynamic glass developer View is one of the most prominent holdouts from the golden age of cleantech funding, having raised a total of $1.8bn in debt and equity financing, $1.1bn coming from SoftBank Vision Fund two years ago. It has now become the latest company to take the reverse IPO route, joining forces with special purpose acquisition company CF Finance Acquisition Corp II to form a publicly-listed business with a valuation of about $1.6bn. View’s earlier backers include Corning and GE Ventures, though the latter may well have divested its stake by now.
Cloudwalk Technology has filed for a $574m initial public offering on Shanghai’s Star Exchange that would allow corporate investors Haier Financial Holdings, Bohai Capital and PCI-Suntek to exit. The company is one of China’s four largest image recognition software providers, along with Megvii, SenseTime and Yitu, none of which have managed to yet complete an IPO.
Cancer and viral infection treatment developer Silverback Therapeutics has just executed a successful IPO of its own, raising almost $242m in an upsized offering priced above its range. Celgene and Bristol-Myers Squibb are among the investors that had provided some $211m in funding for Silverback over three rounds. The IPO price valued the company at approximately $695m.
Cisco Investments seems to be having a good week so far. It’s exiting Kustomer in a reported $1bn acquisition – take a look on GCV for more –, and another portfolio company, customer data software provider GainSight, has agreed to let investment firm Vista Equity Partners buy a controlling stake at a $1.1bn valuation. The transaction will come after $157m in funding for GainSight, from a pool of investors also including Salesforce Ventures.
Thierry Heles talks to Kelly Sexton, Associate Vice President for Research – Technology Transfer and Innovation Partnerships at University of Michigan. In this role, she supports and encourages university-wide programs for intellectual property development, innovation, and engagement with business and venture communities in the region, across the nation, and around the globe.