06 July 2020 – Zuoyebang Pulls In $750m in Series E Funding

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The Big Ones

China’s online education sector is one of the areas where growth is currently moving fastest. Yuanfudao raised $1bn in a series G round in March, and now Zuoyebang, which was spun off by Baidu five years ago, has pulled in $750m in series E funding from investors including SoftBank Vision Fund. The round, co-led by FountainVest Partners and Tiger Global Management, follows reports earlier this month that Zuoyebang was in talks for a round set to value it at $6.5bn pre-money.

We’ll get to IPOs in a few minutes (and wow, have there been a lot of IPOs again) but the biggest exit by value was fitness apparel brand Lululemon agreeing to buy home fitness equipment producer Mirror in a $500m transaction as it looks to build a fitness product ecosystem with itself at the centre. Lululemon had already invested in Mirror as part of its $34m series B-1 round in November, but a bigger influence may be another home fitness brand, Peloton, whose share price has tripled since the early days of the coronavirus lockdowns.

B Capital Group, the US-based venture capital firm affiliated with consulting firm Boston Consulting Group (BCG), has closed its second fund at $820m. Founded in 2014, B Capital targets growth-stage deals and pursues a portfolio management strategy that involves connecting its companies to corporates which can help them scale, through a network provided by BCG. The firm invests between $10m and $60m per round, at series B to D stage, and its areas of interest include enterprise software as well as financial, healthcare, consumer, transportation and logistics technology. B Capital now has $1.44bn of assets under management. It had closed an oversubscribed first fund at $360m in early 2018.

In crossover news (one of many crossover news, including IPOs, because that is the world we live in now…), McMaster University spinout Fusion Pharma raised $213m in its upsized IPO, which allowed Johnson & Johnson, Varian Medical and Nan Fung to exit the cancer radiotherapy developer after helping to contribute $158m in funding. The listing also offered an exit to FACIT, a commercialisation unit backed by Ontario Institute for Cancer Research and the province of Ontario.

Deals

Online grocery delivery platform Xingsheng Youxuan has reportedly secured existing investor Tencent for a $300m series C round that looks likely to close this month. The round is set to triple Xingsheng Youxuan’s valuation to $3bn but it operates in a crowded sector dominated by some very big players, and once the smoke clears it’s going to be no surprise at all to see some serious consolidation take place.

Oscar has been one of the main players in online insurance for quite a while, and its latest round has involved it securing $225m from investors including Alphabet. The corporate has been an Oscar backer since 2015 and injected $375m at a reported valuation of $3.75bn in late 2018. There’s room for growth too, given the company’s offering still only spans 15 of the 50 US states. Its overall funding now stands at $1.53bn.

Coty already owns a string of famous beauty and fashion brands but it made some major waves late last year when it announced it was paying some $600m for a 51% stake in Kylie Jenner’s beauty brand. It must have regarded that as a good deal because it’s paying $200m for a 20% stake in KKW Beauty, the brand formed by another member of the Kardashian family, Kim Kardashian West. The deal will involve Coty helping KKW expand an offering that already includes make-up, skincare, shapewear and fragrance products.

Freeline, a UK-based gene therapy spinout from University College London (UCL) formed by commercialisation firm Syncona, has closed a $120m series C round featuring the latter investor as well as Novo, which co-led the round with Eventide Asset Management and Wellington Management Company. Syncona had supplied $40m in a first tranche in December 2019 and retains a majority stake of 60%, down from 80%.

Caffeine is the operator of a livestreaming entertainment service that has built part of its reputation by hosting live rap battles. The company is however looking to widen its offering to additional content having already broadcast sporting content from partner Fox Sports. The latter’s parent company, Fox Corporation, has just co-led Caffeine’s $113m series D round with fellow corporate Cox Enterprises and Saudi Arabia’s Sanabil Investments. The round values Caffeine at $600m and follows a $100m investment by 21st Century Fox two years ago.

There’s an intriguing deal coming from Poseida Therapeutics as well. You may remember last week we talked about the company filing to go public through a $115m IPO, but it’s now slotted in almost that same amount in a series D round, raising $110m from investors led by funds advised by investment and financial services group Fidelity. Novartis wasn’t part of the consortium this time, however.

Stanford University spinout Annexon is developing treatments for autoimmune and neurodegenerative disorders and has raised $100m in a round that increased its overall funding to more than $250m. Redmile Group led a round that included another dozen named investors, though Novartis Venture Fund – an investor since its 2014 series A-1 round – was not among them.

Goldfinch Bio, a US-based kidney disease medication developer co-founded by faculty from Harvard and Yale, has closed an oversubscribed $100m series B round featuring Gilead Sciences to pay for three clinical trials of its two lead candidates aimed at kidney diseases.

Another sector that’s been boosted by potential customers staying home is online education, and one of the biggest names in the sector is India-based Byju’s. Its latest funding intake may not be as big as Xingsheng Youxuan’s – it’s raised less than $100m from VC firm Bond – but the deal reportedly values it at $10.5bn. Its existing investors include Tencent, Times Internet and Naspers, and recent reports suggested it was after $400m for its next round.

Exits

Although there’s no doubt the economy as a whole will suffer considerably from Covid-19 and the attendant lockdowns, several parts of the VC and tech space have prospered. There’s a neat snapshot of the kinds of businesses that have done well of late today, starting with drug developer Genor Biopharma, which has filed for a $320m initial public offering in Hong Kong. Pharmaceutical companies have been rushing to float in the US, and the target set by Genor, an autoimmune disease and cancer therapy developer backed by Charoen Pokphand, indicates the trend is moving into East Asia.

Lemonade has also achieved a successful initial public offering, the digital property and casualty insurance provider floating above an already increased range to raise $319m. That’s relative in this case however, as the $1.9bn valuation achieved in the IPO is still below that of its last round, a $300m series D led by SoftBank and backed by GV and Allianz last year. The company’s investors also include XL Catlin’s corporate venturing arm, XL Catlin.

Accolade, the developer of a digital concierge for the healthcare benefits system, has gone public in yet another upsized IPO, the company floating above its range in a $220m initial public offering having also increased the number of shares. It priced them at $22 each and the shares closed their first day of trading yesterday within touching distance of $30. Its investors include Comcast Venture, McKesson Ventures, Humana and Independence Health Group.

Akouos was one of two life sciences companies (the other being Fusion Pharma we talked about earlier) to raise $213m in an initial public offering, both having increased the number of shares by 50% before floating above their ranges. Investors in Akouos, a developer of gene therapy treatments for hearing loss, include Novartis Venture Fund and Partners Innovation Fund, and it had raised more than $160m pre-IPO.

Online automotive retailer Shift Technologies has so far raised some $300m in financing from investors including BMW i Ventures, Lithia Motors and Alliance Ventures, but is eschewing a straightforward IPO in favour of a reverse merger deal. It will merge with special purpose acquisition company Insurance Acquisition in a transaction that will be buoyed by $185m from investors including Fidelity and ArrowMark Partners.

Lidar technology developer Velodyne Lidar has also eschewed an IPO in favour of a reverse merger, one that will involve it merging with NYSE-listed special purpose acquisition company Graf Industrial in a deal that will value the merged entity at $1.8bn. Velodyne raised $150m from Ford and Baidu in 2016, $25m from Nikon two years later and another $50m from Hyundai Mobis late last year.

It now seems ages since augmented reality was being touted as the next big thing. Magic Leap seems to have stalled after raising some $3bn in funding, and now North Wearables, the AR glasses developer formerly known as Thalmic Labs, has been bought by Google for a reported $180m. North had received about $170m from investors including Intel Capital and Amazon Alexa Fund, but the deal is perhaps more interesting because it indicates Google’s interest in the space is still alive some five years after it withdrew the consumer version of its Google Glass from sale.

QuantumCTek, a China-based quantum technology spinout of University of Science and Technology of China, is seeking $102m in an initial public offering on the Star Market. The company plans to issue 20 million shares at $5.12 each. It had originally anticipated to raise $42.8m when it first revealed plans to go public in November 2019. The IPO will also offer an exit to Legend Capital, which had supplied an undisclosed amount in 2016. The university’s USTC Holdings owns an 18% stake in the spinout, which will be diluted to 13.5%.

Berkeley Lights, a US-based digital cell biology developer based on research at University of California, Berkeley, has filed to raise up to $100m in an initial public offering that would enable corporates Nikon and Varian Medical Systems to exit. Berkeley Lights has created technology that captures single-cell specific information to support the development of cell-based products including antibody therapeutics or cell therapies.

Funds

Seeds Capital, a venture capital arm of government agency Enterprise Singapore, has agreed to partner with institutions including three corporate venturing units to co-invest S$50m ($36m). The initiative is backed by the Maritime and Port Authority of Singapore and will involve Seeds Capital and the consortium investing the money in some 50 maritime technology startups in order to improve efficiency and safety in the industry. Innoport, the investment vehicle for ship operator Schulte Group, is one of the six partners, as are KSL Maritime Ventures, a subsidiary of conglomerate Kuok Group, and PSA Unboxed, which represents port manager PSA International. The partners also include incubator operator Rainmaking, marine technology venture builder TecPier and ShipsFocus-Quest Ventures, which was formed by shipping intelligence provider ShipsFocus and VC firm Quest Ventures.

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

Leadership Series: Amy Banse (Comcast Ventures)

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Our Leadership Series interview where we talk to Amy Banse also from Comcast Ventures.

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

29 June 2020 – Sana Biotechnology Raises $700m in First Round

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The Big Ones

There is a true IPO bonanza going on at the moment and we’ll get to that in a moment, but there’s still a good deal of money sloshing around the sector for early-stage deals too. Sana Biotechnology is working on a string of drug candidates utilising stem cell technology and has raised a huge $700m for its first funding round. The participants include GV, whose diversification into life sciences has so far been very successful, the unit’s exits including Ipierian, Editas Medicine and Flatiron Health. Sana’s technology was developed by researchers at Harvard Medical School, University of Washington’s School of Medicine and UC San Francisco, in partnership with a team at incubator Flagship Pioneering.

Amazon formed its Alexa Fund five years ago but in recent times has made some hefty investments off its own balance sheet, not least in the transport sector where it has backed huge rounds for the likes of Rivian and Aurora Innovation. The corporate has now followed that by committing $2bn to a vehicle called the Climate Pledge Fund, which will invest in developers of products or services that can accelerate carbon reduction. Sectors in its eyeline include renewable energy, transport, logistics, manufacturing and materials, food and agriculture.

The IPO market – particularly in the life sciences sector – may explain why Invitae has splashed out to purchase precision oncology technology provider ArcherDX. Founded by Qiagen in 2015, ArcherDX had actually filed to go public earlier this month but Invitae has stepped in to agree a cash-and-shares acquisition valued at $1.4bn. That’s past tense, as the 30 million Inivtae shares included in the deal subsequently shot up by more than 40% in price on the public markets.

Deals

Sonder should in theory be one of the companies most affected by the coronavirus and indeed, the short-term apartment rental service reportedly fired or furloughed a third of its staff while selling off some 2,000 properties. But it claims it is back at 80% capacity right now and has secured $170m in series E funding from investors including property developer Lennar. The cash was raised at a $1.3bn valuation and Sonder aims to add another $30m before it’s closed.

Agricultural product and services provider Indigo has reportedly added $100m to a series F round featuring FedEx that now stands at $300m. FedEx backed the first tranche in January and Indigo, which is valued at $3.5bn, is said to be targeting $500m for a final close. The round’s other participants include Riverstone Holdings and existing backers Flagship Pioneering and Alaska Permanent Fund.

Pionyr Immunotherapies, a US-based immuno-oncology developer commercialising research from University of Toronto (UofT) and University of California, San Francisco (UCSF) has secured a $275m commitment from biopharmaceutical firm Gilead Sciences, which will acquire a 49.9% in Pionyr through the deal. The transaction forms part of a larger agreement worth up to $1.47bn that gives the corporate an exclusive option to purchase the remaining shares for another $315m and make potential milestone payments totalling up to $1.15bn.

Synchrony Financial and corporate venturing units MassMutual Ventures and Blue Venture Fund all contributed to a $100m round for Payfone, a provider of user authentication technology for phone-based customer services. The round nearly doubled Payfone’s overall funding, which makes sense considering its technology would feasibly be in greater demand in the wake of increased remote buying during coronavirus-related lockdowns.

Synqa, the Southeast Asian fintech provider formerly known as Omise, has bagged $80m in a series C round co-led by Siam Commercial Bank’s SCB 10X subsidiary. The round included insurer Aioi Nissay Dowa, Toyota Financial Services Corporation, Sumitomo Mitsui Banking Corporation and its SMBC Venture Capital unit. Synqa, whose earlier backers also include Sinar Mas, has built a mobile wallet and a crypto token trading network, and will use the series C cash to widen the range of products it offers.

Optum’s corporate venturing unit, Optum Ventures, has led or co-led four rounds in the past week, the latest being a $64m series C for Somatus. Kidney care provider Somatus has now secured $105m in total and will put the cash into geographical expansion and product development.

Ojo Labs, the developer of an AI chatbot for use in real estate deals, has completed a $62.5m round featuring Royal Bank of Canada and Northwestern Mutual Future Ventures. The company’s overall funding now stands at approximately $134m and it used part of the latest cash influx to buy online real estate portal Movoto in a deal that allowed another corporate, property developer Mitsui Fudosa, to exit.

Funds

Netherlands-based, healthcare-focused venture capital firm BioGeneration Ventures closed its fourth fund having raised €105m ($119m) from limited partners including pharmaceutical firm Bristol Myers Squibb (BMS). BMS and fellow existing backers Schroder Adveq and the European Investment Fund (EIF) joined newly minted LPs including Industriens Pension and KfW Capital in contributing to the oversubscribed BGV IV.

US-based talent agency Creative Artists Agency (CAA) formed an investment vehicle with venture capital firm New Enterprise Associates (NEA) that was launched with $100m in capital according to the Hollywood Reporter (not a publication we get to cite often on here!) Connect Ventures will leverage the existing relationships CAA has in the sports and entertainment industries, and the Hollywood Reporter stated that the companies plan to invest up to $400m through the venture.

Material Impact, a US-based venture capital firm with a keen interest in spinouts, has closed its second fund at $200m with limited partners including the endowments of Harvard and Princeton universities. Material Impact was founded in 2015 to invest in material science technologies and has backed more than half a dozen university spinouts to date through its first, $110m fund.

UK-based venture capital firm Epidarex Capital has closed a fund of more than £102m ($127m) to invest in life sciences companies, including spinouts, across the UK. The capital was supplied by the universities of Aberdeen, Edinburgh, Glasgow and Manchester, as well as government-owned British Business Bank, which made a $62m cornerstone investment through its Enterprise Capital Funds program, and pension scheme Strathclyde Pension Fund. A range of undisclosed, international backers have also invested in the fund.

Exits

One of the largest IPOs is set to be Agora, a Chinese provider of video engagement technology for app developers. The SIG-backed company will float later today in a $350m IPO that values it at $2bn, while three existing investors are pumping in a further $130m in the form of a private placement. The most interesting thing is that while Agora’s sales have jumped this year its Q1 revenue is still below $40m, which implies that while losses may not be a huge factor in a successful flotation, revenue may not be either.

Forma Therapeutics went public on the same day as Celgene Switzerland and BMS-backed precision cancer drug developer Repare Therapeutics in its $253m listing, and like Repare, Forma has closed an upsized IPO, having raised a total of $319m. The price of the Novartis and Eli Lilly-backed company’s shares have more than doubled since, indicating the current IPO gold rush is very far from over.

China-based Genetron Holdings, which is working on its own precision cancer treatments, has certainly shown the potential in that space. It has floated in the US in a $256m initial public offering that involved it adding on 3 million shares and then pricing them 19% above the IPO range. Vcanbio Cell & Gene Engineering has achieved an exit through the flotation, having invested in Genetron in 2016.

Relay Therapeutics – based on research from MIT, UC San Francisco and Brandeis University – has filed for its own IPO and has set an initial target of $200m. The precision cancer drug developer raised $400m in a 2018 series C round led by $300m from SoftBank Vision Fund and backed by GV and Alexandria Venture Investments. The trend of late has been for IPO candidates to price their offerings above the range, so this may turn out to be one of Vision Fund’s success stories. Right now it may be regretting not putting more money into life sciences deals.

Gene therapy developer Poseida Therapeutics has become the next biotech company to get in line to go public and has filed to raise up to $115m. Novartis provided half the capital in Poseida’s last round, a series C that closed at $150m nearly a year ago, and has a 14.9% stake. Its other backers include Transposagen Biopharmaceuticals, and the IPO proceeds will fund clinical development of prostate and bone marrow cancer treatments.

That isn’t – and I can’t believe I’m saying this – actually all the IPO stories from the past week so do head to GCV and GUV to read about the others, too.

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

Leadership Series: David Gilmour (BP Ventures)

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Our Leadership Series interview where we talk to David Gilmour also from BP Ventures.

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

22 June 2020 – DoorDash Raises $400m in Late Stage Round

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Big Stories

Slowly, then suddenly change happens

This past week’s online roundtable for the Reinhard Mohn Prize 2020*, Fostering Innovation, Unlocking Potential, hosted by the Bertelsmann Stiftung (Foundation), saw luminaries from politics, business, civil society and science under Chatham House rule discuss which innovation policies and frameworks are now needed to facilitate economic prosperity and societal progress in the future and strengthen our crisis resilience.

Underpinning the discussion was new research published by the Bertelsmann Foundation in a report titled “World class patents in cutting-edge technologies: The innovation power of East Asia, North America and Europe”. Out of the 58 technology areas covered, with the top 10% classed as world class in each field, the US and China in particular are setting a much faster pace in key digital technologies, such as artificial intelligence, blockchain, quantum computing and big data, the report said.

Governments need to cure old habits of control

The traditional way to think of supporting entrepreneurs has been to look at their five primary needs: access to capital, finding customers, product and service development, hiring people and, eventually, an exit.

Increasingly, however, a sixth factor is coming into play: navigating big government.

From a reflexive position across much of the Anglo-Saxon world of privatisation and letting markets decide, since the days of Ronald Reagan and Margaret Thatcher, has come a counterblast from the East suggesting that industrial strategies, state bailouts and national champions are important.

This week, German government-owned development bank KfW agreed to invest €300m ($339m) in CureVac, the local developer of messenger RNA (mRNA)-based drugs whose technology could also influence development of a vaccine for Covid-19.

The transaction will give KfW a stake sized at about 23% and it comes after CureVacagreed a $90m loan from the European Investment Bank in March this year, when it announced it would concentrate efforts on developing a coronavirus vaccine, following press reports that the American government had tried to invest with a view to relocating the company and its products to the US.

Deals

DoorDash has raised $400m in a late-stage round that increased its valuation from $13bn last November to $16bn post-money. The online food delivery service has now secured a total of some $2.5bn in equity funding from investors including SoftBank and is still in line to go public having confidentially filed for an IPO in February. Durable Capital Partners led the round, which included Fidelity and T. Rowe Price.

Volkswagen invested $100m in solid-state battery developer QuantumScape two years ago and is increasing that commitment by up to $200m as the companies seek to strengthen their existing partnership. They are planning to set up a pilot facility to test out the industrial-scale manufacturing of QuantumScape batteries for use in Volkswagen’s electric vehicles, as the carmaker looks forward to upgrading from lithium-ion battery power.

Orca Bio organises $192m series D

C4 Therapeutics has closed a $150m series B round alongside $20m in venture debt, with the cash coming from new investors and largely undisclosed existing backers that could include Novartis, Roche and Kraft Group. The small molecule therapy developer launched in 2016 with $73m in a series A round that included all three corporates, and it plans to have four candidates in clinical trials by the end of 2022.

Corporates chip in as BYD Semiconductor gets $113m

GreenLight filters through $102m

Pagaya has built an AI software platform that utilises machine learning and data analysis to manage assets for institutional investors. It has also received $102m in a series D round featuring Clal Insurance and subsidiaries of Aflac, Bank Hapoalim and Siam Commercial Bank. The company, which has about $1.6bn under management, plans to now move into additional asset classes, particularly those related to fixed income.

University

4DMT materialises $75m series C round

Bit Bio whips up series A funding

Proprio picks up $23m

Exits

There have been a few significantly upsized IPOs of late, especially in the healthcare sector, but Avidity Biosciences has perhaps pulled off the biggest jump of all. Avidity, which is developing drugs for muscle diseases, raised $259m when it went public on Friday, floating above its range after increasing the number of shares by a whopping 44%. The company, whose investors include Eli Lilly, Brace Pharma Capital, ST Pharm and Takeda Ventures, then saw its shares rise 58% on their first day of trading. Despite ongoing uncertainty in the markets, it seems like tech companies are still in a prime position to IPO.

Kangua canters to $149m IPO

One of the larger tech companies still to make that leap is data miner Palantir, which has raised $1.9bn in funding from investors including Relx and which is reportedly readying a confidential IPO filing with a view to floating in September. Big data analysis provider Palantir has followed a $50m investment by Fujitsu with $500m from its partner in a Japanese joint venture.

Forma Therapeutics looks to be the next life sciences company to step up to the public markets, having set the range for an IPO that would net $212m if it floats at the top of that range. And some of its investors have been waiting longer than most for an exit. Novartis first invested in the cancer and haematologic disease therapy developer in 2009, with Eli Lilly following soon after. Both received a dividend early last year, and if Forma replicates the recent success of other drug developers they could be in for a bumper return.

Repare reaches public markets with $220m

Blued bids for $50m in US IPO

Proteus Digital produces bankruptcy filing

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

Leadership Series: Raj Singh & Amy Burr (JetBlue Technology Ventures)

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Our Leadership Series interview where Ashley Lowes, Head of Communications & Marketing at JetBlue Technology Ventures, talks to Raj Singh & Amy Burr also from JetBlue Technology Ventures.

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

15 June 2020 – Zuoyebang in Talks to Raise up to $800m in Coronavirus Boost

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Big Ones

Online student answer and livestreamed education provider Zuoyebang was spun off by Baidu and has since received $585m in venture funding. Like many online education platforms however, it has seen a big uptick in business during China’s coronavirus lockdown, and is in talks to raise between $600m and $800m. The round would reportedly value Zuoyebangat $6.5bn pre-money, more than doubling the valuation at which it last raised money two years ago.

Novo has agreed to acquire Corvidia, developer of a phase 2b-stage treatment for chronic kidney disease, for an initial $725m that could potentially rise to $2.1bn if every milestone is reached post-purchase. That’s a hefty chunk of change, not least since Corvidia had disclosed just $86m in funding (not including a seed investment by VC firm Sofinnova Partners). Investors set to exit it include AstraZeneca and Fresenius Medical Care.

US-based social media company Facebook has begun setting up a corporate venture capital unit, Axios reported yesterday, citing a job listing posted by the firm. The prospective employee will be head of investments at Facebook’s New Product Experimentation (NPE) subsidiary, which it formed to launch consumer-focused apps. The post has since been deleted but it stated: “In this role, you will manage a multimillion-dollar fund that invests in leading private companies alongside top venture capital firms and angel investors. You will develop investment and impact theses, lead the execution of new investments and support existing portfolio companies as needed.” The fund will be partially managed by Shabih Rizvi, who spent two years as founding partner at internet technology provider Google’s artificial intelligence fund, Gradient Ventures, before moving to a business development role at Google in April 2019. A source familiar with the plans told Axios that Facebook is pursuing investments as a method of keeping track with emerging technologies, rather than operating what they termed as a general purpose fund. It will make small investments in early-stage companies.

In crossover news, it’s an exit this time. Fusion Pharmaceuticals, a Canada-based cancer radiopharmaceuticals developer spun out of McMaster University, has filed for a $100m initial public offering on the Nasdaq Global Market. The spinout’s lead asset is undergoing phase 1 studies in an injected form for advanced, refractory solid tumours. Fusion said in its prospectus it had been forced to pause further recruitment as the pandemic led to clinical trial sites to be closed. It has administered the drug to 12 patients to date, out of a planned 30. Fusion most recently secured nearly $112m in a series B round closed this month featuring Fight Against Cancer Innovation Trust, a commercialisation unit backed by Ontario Institute for Cancer Research and the province of Ontario, oncology technology provider Varian Medical Systems, Johnson & Johnson Innovation, and others. Varian and Johnson & Johnson Innovation – JJDC had already backed a $46m series A in 2017.

Deals

Many over the years have questioned the business model of grocery delivery app Instacart but the coronavirus stay-in-place restrictions have vindicated it somewhat and it has been hiring like crazy in recent months to meet demand. It has also now raised more money, taking in $225m through a round co-led by DST Global and General Catalyst that hiked its valuation from about $7.9bn to $13.7bn. Its earlier investors include Comcast, American Express and Whole Foods, the latter since consumed by Amazon.

Although it also delivers groceries, DoorDash’s focus is on on-demand food delivery from restaurants, and it is reportedly seeking hundreds of millions of dollars in a forthcoming round set to value it at more than $15bn pre-money. Like Instacart, which faced strike action over safety precautions a few months back, Verizon-backed DoorDash has also encountered scrutiny over business practices that allegedly include taking tip money intended for staff and fees some restaurants see as exorbitant. But it doesn’t seem to have had an effect yet.

The coronavirus lockdowns have given a big shot in the arm to companies operating in the online grocery industry, be it Instacart or Tongcheng Life, a China-based spinoff of travel services provider LY.com that operates a group buying service focused on fresh produce. The company has just raised $200m in a series C round led by social video platform Joyy that included Bertelsmann Asia Investments and Legend Capital, both of which took part in its $100m series B nine months ago.

Unacademy is among the online learning platforms to have seen activity shoot up as students have to stay home, and it is reportedly seeking up to $150m in funding to cover expansion. It raised $110m from investors including Facebook as recently as February but is said to be looking to double its $510m post-money valuation for the next round. The possible investors include Tencent, which has built a stable of edtech portfolio companies in its home country of China.

The uptick in e-commerce activity also has a knock-on effect for surrounding technologies. Anti-fraud software provider NS8 has completed a $123m series A round co-led by Axa Venture Partners and will allocate the funding to international expansion and product development. That’s a big haul for a series A and it comes after a year when NS8 quadrupled the size of its team from 50 to 200.

DNAnexus, the Stanford University spinout that has built a healthcare data software platform, has meanwhile raised $100m from investors including GV and Regeneron Pharmaceuticals. The round boosted the total raised by DNAnexus to more than $270m, its earlier investors including Microsoft and WuXi NextCode.

Cue Health specialises in molecular testing devices for both home and professional use, and has pulled in $100m through a series C round featuring Johnson & Johnson Innovation – JJDC. The company has now raised at least $169m altogether, and JJDC participated in the latest round having contributed to its 2018 round alongside another corporate VC unit, Dentsu Ventures.

Contract biopharmaceutical development and manufacturing services provider MabPlex has raised approximately $70.7m in series B funding from investors including Sunshine Insurance Group. The round, co-led by DT Capital Partners and Huajin Capital, comes in the wake of $59.1m in a series A round closed early last year.

Nano-X Imaging, developer of an advanced body scanner that is smaller and cheaper than established alternatives, has added $20m from SK Telecom to a series B round that now stands at $51m. The telecommunications firm had already put up $5m for the round before joining investors including Foxconn and Fujifilm in a $26m tranche in January.

Funds

Theodorus, the university venture arm of Université libre de Bruxelles (ULB), has increased the size of its fourth fund to €42m ($47.3m) following commitments from pension fund manager Caisse de dépôt et placement du Québec (CDPQ) and Belgian government-owned investment firm SFPI-FPIM. CDPQ supplied $3.9m through investment fund TFAQ2019, managed by Teralys Capital, while SFPI-FPIM injected $560,000, adding to a $5m it had already provided previously. Theordous IV will invest $18m in Canada-based and another $29.3m in Belgium-based spinouts over the next five years, aiming to bridge the two countries’ ecosystems. It will provide between $563,000 and $3.4m per spinout, targeting a 20-strong portfolio.

Exits

Cancer treatment developer Legend Biotech floated just over a week ago and has already closed the offering having raised about $487m. It was spun off by Genscript Biotech, which bought a further $23m of shares in the offering which have increased in value by more than 70% since the flotation. Legend’s other investors include Lilly Asia Ventures and Johnson & Johnson Innovation – JJDC.

Conventional wisdom said just a couple of months back that pursuing an initial public offering in the wake of the massive market drops in the spring would be futile, but several life sciences companies have proven otherwise, in many cases floating at the top or above their range, and now online car retail platform Vroom has followed suit. The AutoNation-backed company has gone public in a $468m IPO, having increased the number of shares and floating above an upscaled range. The offering may well reach $538m before it formally closes.

The Vroom offering, together with that of business data provider ZoomInfo, is set to open the floodgates in the IPO markets. Even Airbnb – which has been hit harder than almost anyone in recent months – is reportedly considering moving forward with its flotation, but Lemonade is significantly ahead. The digital insurance provider, valued at $2bn+ as of April, has filed for an offering with a $100m placeholder target that will almost certainly rise. It has received about $480m in funding from investors including SoftBank, Allianz, XL Innovate and GV since being founded.

One of the larger upcoming IPOs will be Snowflake, a cloud data software provider backed by Salesforce Ventures and Capital One Ventures that has reportedly filed confidentially to go public. Snowflake has pulled in some $1.3bn in funding and was valued at $12.4bn when it last raised money, in February. To put things in perspective, the FT reports that bankers have told the company it could float at valuation between $15bn and $20bn.

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

08 June 2020 – GCV Digital Forum Roundup

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GCV Digital Forum Roundup

Thank you to the team and all who have worked their socks off for the first GCV Digital Forum, and also the sponsors, speakers and attendees who have made it such a success. The platform will stay open for 30 days.

It was exciting to hear the industry on the GCV Leadership Society Advisory Board chaired by Young Sohn from Samsung this week share their perspectives on how communities can come closer together through these trials and create more diverse and inclusive investing environments – Samsung NEXT will share its playbook for this at the Forum and beyond.

The GCV Digital Forum has had 600 attendees from across the time zones, creating a unique network and sharing of insights yesterday and today.

Exits

Covid-19 does not seem to have done much to dampen investors’ spirits outside a few key areas and if anything, it’s accelerated what was beginning to become a comparatively stagnant M&A market. One of the biggest beneficiaries has been Intel Capital, which has already recorded exits from portfolio companies including Nysansa, CloudGenix and Moovit this year, and which is now set to exit Spot, a developer of cloud workload management software. The reported price tag is $450m, following $52m in VC funding, which looks to me like a decent return.

Thoma Bravo to execute $100m Exostar acquisition

Fibrosis drug developer Pliant Therapeutics has become the latest life sciences company to launch a successful IPO, floating at the top of its range to raise $144m after increasing the number of shares in the offering by 50%. It also represents an immediate return for Novartis Institutes for BioMedical Research, which bought $10m of shares in the flotation only to see Pliant’s share price shoot up some 50% post-IPO.

Branding Engineer gets IPO plans on track

Canada-based Repare Therapeutics is the latest drug developer to file for an initial public offering, and the precision oncology-focused company is targeting $100m in a Nasdaq IPO. The filing came just days after it raised $15m in equity funding from Bristol Myers Squibb as part of a research collaboration deal, and Repare’s existing investors also include Celgene Switzerland, a participant in its 2017 series A round.

Vroom sets $319m target for IPO

China’s stock markets look set to benefit from increasingly stringent rules in the US, and one of the country’s latest companies to file for an initial public offering is Shenzhen Yanmade Technology. It provides industrial testing equipment for flexible printed circuits and its investors include Legend Capital, which was spun off by Legend Holdings. Yanmade is looking to raise up to $98.8m and it plans to float on the Shanghai Stock Exchange’s Star Market.

Deals

On-demand ride provider Didi Chuxing has raised more than $500m for an autonomous driving subsidiary, in a round led by SoftBank’s second Vision Fund. The spinoff is the outcome of four years of driverless vehicle research from Didi and it has approval to test the technology on roads across three Chinese cities as well as California. Vision Fund was already one of Didi’s key investors, and it took part in a $150m round for the company’s bicycle rental spinoff in April.

Varo Money is one of several digital banks to spring up in the past few years, but it intends to be the first to secure a national bank charter in the United States. It has also closed a $241m series D round featuring automotive insurance specialist Progressive that hiked its overall funding to nearly $420m. Fintech has been one of the notable growth sectors in recent years, but if digital operators can start competing head to head with traditional banks we could see that growth accelerate quite quickly.

E-commerce marketplaces have been one of the more exciting investment areas in Southeast Asia in recent years, and Vietnam’s Tiki has so far been among the market’s winners. It has reportedly raised $130m in a round led by private equity firm Northstar Group, following earlier funding from the likes of CyberAgent, JD.com, Sumitomo and VNG. The company is also said to be in line for a merger with domestic competitor Sendo that would really set it up for the future.

Xiaolinggou plugs into series A round

Microbe processor Ginkgo Bioworks has increased its overall funding to nearly $790m in a $70m funding round that included strategic partner Illumina. The round also featured General Atlantic and Viking Global Investors – both of which backed a $350m vehicle called Ferment Consortium that was formed last October to invest in companies formed and spun off by Ginkgo.

University

Athira accepts $85m series B

Oxford encodes Base Genomics

Funds

Pfizer to augment VC investments with $500m

MassMutual amasses third $100m fund

No need to tell anyone that inclusion and support for black lives is on everyone’s lips right now, not least due to the recent reams of public dedications by different companies’ social media accounts. However, SoftBank is putting actual skin in the game by forming a $100m investment vehicle called the Opportunity Growth Fund specifically to back entrepreneurs and founders of colour. Not that it’s the first corporate to launch such an initiative: Comcast Ventures’ Catalyst Fund was formed in 2011 and Intel Capital put $125m into a Diversity Fund in 2015.

India-based classified listings operator Info Edge has had some success investing off its own balance sheet, particularly with Zomato and PolicyBazaar owner ETechAces, but not it’s looking to establish a dedicated corporate venturing vehicle. Info Edge Venture Fund has a $100m target, and the corporate is putting up almost half. The rest is set to come from external LPs, in what looks to be an increasingly popular model.

Real Tech goes local with latest fund

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

01 June 2020 – UBS Groups Prepares for Fintech Investments

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The Big Ones

1

Switzerland-based bank UBS Group is setting aside hundreds of millions of dollars of its money to invest in financial technology companies, according to Bloomberg.

UBS hired Erasmus Elsner for its venture capital and growth equity unit last month but is reportedly still recruiting staff for a dedicated corporate venture capital (CVC) team. It is planning a corporate VC fund to make investments between $10m and $20m in dozens of companies targeting bank/client engagement, investing and financing platforms and the improvement of the bank’s underlying operations, a source told Bloomberg.

Mike Dargan, UBS’s Global Head Group Technology, said: “UBS wants to further engage with and support fintech firms. The new venture investment portfolio is a next step to accelerate our innovation and digitisation efforts.”

2

It’s a scary-enough headline, ‘Huawei Banned, So Let’s Invade Taiwan to Take TSMC?’, in reaction to the strict set of rules announced by the US government on May 15 in a bid to cut the China-based 5G and telecoms equipment maker off from the global semiconductor ecosystem.

In its subsequent report, “US strategic approach to the People’s Republic of China,” published on the 20th, the US said: “The administration is implementing the Foreign Investment Risk Review Modernization Act to update and strengthen the capacity of the Committee on Foreign Investment in the United States (CFIUS) to address growing national security concerns over foreign exploitation of investment structures, which previously fell outside CFIUS jurisdiction.

“This includes preventing Chinese companies from exploiting access to US innovation through minority investments in order to modernise the Chinese military. The US has updated its export control regulations, particularly in light of Beijing’s whole-of-society strategy and its efforts to acquire advanced technologies related to hypersonics, quantum computing, artificial intelligence, biotechnology and other emerging and foundational technologies. We are also engaging allies and partners to develop their own foreign investment screening mechanisms, and to update and implement export controls collaboratively through multilateral regimes and other forums….

“Domestically, the Administration is taking steps to strengthen the US economy and promote economic sectors of the future, such as 5G technology, through tax reforms and a robust deregulatory agenda. The President’s ‘Executive Order on Maintaining American Leadership in Artificial Intelligence’ is an example of a US government initiative to promote investment and collaboration to ensure the US continues to lead in innovation and setting standards for a growing industry.”

But the horse might have bolted. The ChinaTalk article at the top suggests Huawei has done enough over the past few years to survive, stating: “The main issue is supporting Huawei in maintaining its dominant position in 5G and helping it continue to be able to supply the needs of 5G bases.

3

The US healthcare system has many virtues, but it is simply too expensive and hard for consumers to access care, according to insiders. Coastal Americans’ faith in their system has been shaken by the coronavirus and this has created opportunities for some. Jeff Bennett, CEO of startup Higi, is trying to tackle the issue and has received a fillip with a new round of funding.

UK-based personal healthcare provider Babylon has joined the ranks of new corporate venturers by leading the latest round for US-based health engagement technology developer Higi.

The round was reportedly $30m in size and Higi’s previous investors, 7Wire Ventures, Flare Capital Partners, Jumpstart Capital, Rush University Medical Center for Health and William Wrigley Jr, also took part. Higi raised $25.8m in 2018, according to a regulatory filing, from investors including Blue Cross Blue Shield-affiliated venture firm Sandbox Industries, though Sandbox has said it is now no longer an investor.

4

Similarly, money is flowing in other parts of healthcare and life sciences. The power of science fiction films retains its hold in inspiring inventors but the secret to corporate venturing and open innovation lies in retaining optionality.

Drawing on inspiration from Star Trek, Vaxxas, a Queensland University, Australia, spin-out, has developed technology which could mean vaccine delivery via needles and syringes could soon be a thing of the past.

The World Economic Forum named the company a Technology Pioneer in late 2014 and over the past decade the company has been working on a nanopatch, based on research at the university’s Australian Institute for Bioengineering and Nanotechnology, that delivers vaccines painlessly and more efficiently than syringes.

5

Cisco intends to purchase the network analytics software producer, which had raised more than $110m from investors including GV and Salesforce Ventures, for a reported $1bn.

Networking equipment manufacturer Cisco agreed yesterday to acquire ThousandEyes, a US-based network management software provider backed by internet and technology conglomerate Alphabet and enterprise software producer Salesforce.

The price was reported by Bloomberg as being approximately $1bn, a figure confirmed to CNBC by a person familiar with the matter. Cisco expects the transaction to close by the end of next month.

Founded in 2010, ThousandEyes provides cloud analytics software that collects data from a range of access points, such as data centres and consumer devices, to identify potential sources of disruption and ensure websites, applications and services are delivered optimally.

Deals

Genome sequencing technology developer MGI Tech has closed a $1bn series B round, four years after being formed as a subsidiary of genome research organisation BGI. The round, which follows a $200m series A a year ago, shows the potential value in spinning off valuable subsidiaries, and it follows a $265m round for another China-based spinoff, smart sensor and power semiconductor provider BYD Semiconductor (see yesterday).

Chinese online grocer MissFresh has seen business pick up sharply during the coronavirus lockdown and has accordingly raised funding at a reported $3bn pre-money valuation. The company’s existing backers include Tencent and Lenovo but the only new investor revealed in media reports is CICC Fund. Bloomberg reported in the last few days that it was set to raise roughly $500m.

SpaceX meanwhile goes from strength to strength, the spacecraft producer and launch services provider expanding its latest funding round to $346m and surpassing its original target of a $250m close. Elon Musk has got a lot of flack over the past few years, but it’s worth noting that Tesla’s shares are continuing to rise while Alphabet-backed SpaceX is still growing – to a $36bn+ valuation, if reports from earlier this year are accurate.

Electric carmaker BYD is preparing for a Hong Kong Stock Exchange listing and as part of a restructuring effort it is spinning off semiconductor and sensor subsidiary BYD Semiconductor with $265m in external funding. Sequoia Capital China, CICC Capital and SDIC Venture Capital are co-leading the round, which will value the subsidiary at more than $1.3bn. Originally known as BYD Microelectronic, it was formed in 2004.

Marqeta makes off with $150m

Insitro has created a machine learning-equipped drug discovery platform and has secured $143m in a series B round featuring WuXi AppTec’s Corporate Venture Fund, GV and Alexandria Venture Investments. GV had already contributed to the $100m in series A funding with which Insitro emerged from stealth in mid-2018, at a $1.05bn valuation.

Arvelle arcs to series A close

Pie Insurance picks out $127m

Bolt flashes on fresh funding

AbCellera has built an antibody drug discovery system and has secured $105m in a series B round featuring Eli Lilly, having signed a collaboration agreement with the pharmaceutical firm last week. In fact it’s been a great few weeks for Canada-based AbCellera, which got a commitment for up to $125m in financing from government agency Innovation, Science and Economic Development Canada at the start of this month.

Elsewhere in China, Xiaomi has invested almost $103m in power bank producer Zimi through a cash-and-stock deal that increased its stake in the company from 22.5% to 49.9%. Zimi was already part of the Xiaomi ecosystem, a strategic investment initiative intended to construct a network of companies producing Xiaomi-compatible products. That network reportedly now encompasses some 300 portfolio companies.

Mindstrong mines Optum for $100m series C

Oxford Nanopore expands latest round

CFS sees out $84m series A2 round

Exits

Sendo and Tiki test the waters for merger

Roche reaches for portfolio company Stratos

UA’s FreeFall Aerospace completes merger

Kintor Pharmaceutical has however successfully floated in Hong Kong, pricing its initial public offering at the top of the range to raise $240m. The IPO featured a $115m cornerstone investment by appliance maker Gree, which provided $89m, Highlight Capital and Foresight Fund. It was 500-times oversubscribed according to Kintor, which is developing prostate and breast cancer drugs, and which plans to now expand into hair loss treatment.

VeriSilicon vies for $111m in IPO

Avidity to invade public markets

Burning Rock files for $100m IPO

Pliant places IPO terms

Nanoform to shape $76.7m IPO

Funds

U-M taps Deerfield for Great Lakes Discoveries

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

Leadership Series: Heriberto Diarte (Schneider Electric Ventures)

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Our Leadership Series interview where Edison Fu talks to Heriberto Diarte from Schneider Electric Ventures.

“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0