27 April 2020 – AvidXchange Raises $128m Bringing Total Round to $388m Plus Audio from our Second COVID19 Webinar

The Big ones

AvidXchange, a developer of accounts payable automation software, has raised $128m to hike its latest round to $388m. Mastercard was among the investors, having contributed to the company’s last round, when it secured $300m in 2017 at a $1.4bn valuation. Reports in December stated AvidXchange was chasing a $2bn valuation for this round but the company is yet to confirm those details.

As the Covid-19 pandemic continues to affect startups, the UK government has pledged up to $1.25bn in financing, a quarter of which will be channelled into the Future Fund, a vehicle that will provide convertible debt financing to match private investment. The rest will support loans and grants made through the state-owned Innovate UK vehicle. Everyone seems to have an opinion on how useful the measures will be, but the way things are going it feels impossible to make any kind of definitive judgement on that, especially seeing as the Future Fund isn’t set to launch for another month or so.

Several corporate-backed companies in China’s travel and consumer startup space have shut down due to the lockdown related to the coronavirus. Founded in 2019, Wujiang Hotels operated five hotel brands that spanned eight Chinese cities. It had $30m in registered capital after raising money from online travel agency Trip.com, but chairman Ma Xiaodong said in an internal announcement that it is unable to continue operating. Online travel booking platform Baicheng had been founded in 2000 and had received $20m in a 2014 series B round featuring e-commerce group Alibaba according to KrAsia, which cited information from deals database Tianyancha. The company floated two years later but declared bankruptcy in late February this year after its income completely dried up. Meili Jinrong, the automotive-focused spinoff of consumer loans provider Meiliche also shut down operations last month and has laid off all its employees. The Covid-19 restrictions all but eliminated sales which, combined with an immediate cash shortage, meant it had no choice but to close. The move came after the company had raised more than $200m as of 2018, from investors including conglomerate New Hope Group, personal finance app developer Wacai, e-commerce firm JD.com’s JD Finance affiliate and Bertelsmann Asia Investments, representing media group Bertelsmann.

SwanBio Therapeutics, a US-based neurological gene therapy developer based on Harvard University research, is set to increase its series A funding to $77m with a $52m extension led by founding investor and life sciences investment trust Syncona. Syncona has provided an initial $19.6m tranche, a spokesperson revealed to GUV, while Partners Innovation Fund – a vehicle for health system Partners Healthcare that includes Brigham and Women’s Hospital and Massachusetts General Hospital (MGH) – also contributed to bring the extension to $20m so far. The remainder of Syncona’s commitment – amounting to a total of $51m – is dependent on milestones. Syncona had invested $23m to lead SwanBio’s initial $25m series A tranche in June 2018 with participation from Partners Innovation Fund. SwanBio Therapeutics is working on drugs for treating serious neurological diseases. Its lead candidate targets adrenomyeloneuropathy, a rare inheritable neurological disorder that can cause impaired mobility, eyesight and hearing. No approved treatments currently exist for the disease.

Deals

Epic Games is best known for massively successful online shooting game Fortnite but its acquisition of social gaming and video platform Houseparty last year now looks like a stroke of genius, with some 50 million new users signing up in a month amidst the Covid-19 lockdown. And Epic is striking while the iron is hot, reportedly holding talks with potential investors to raise $500m to $1bn at a valuation ‘significantly’ higher than the $15bn valuation at which it last received funding, in 2018. That round included Axiomatic, and the company’s other corporate investors include Tencent, Endeavor Group and Walt Disney.

Network event streaming platform Confluent has also had a good year, and the company has capped it with $250m in series E funding. The round was led by Coatue Management and valued Confluent, whose early backers include LinkedIn, at $4.5bn. LinkedIn was not much of a corporate venturer prior to its 2016 acquisition by Microsoft, but its 2014 investment in Confluent’s series A round now looks inspired.

China-based Didi Chuxing may have had difficulties with its core ride hailing business in the face of Covid-19, but it has an ambitious growth plan to increase its customer base to 800 million monthly active users by 2022. That will involve beefing up adjacent services such as that of its bicycle rental service Qingju, which just received $150m from SoftBank and Legend Capital. The round is the first external funding to be raised by Qingju and will be added to an $850m cash injection by parent company Didi.

Medical device manufacturer MicroPort Scientific formed subsidiary MicroPort CardioFlow Medtech in 2015 to focus on valvular heart disease, and the offshoot has disclosed $130m in funding secured at a $1.1bn pre-money valuation. The round did not include any additional corporates but the capital will be used for research and development, marketing and market expansion.

STX Entertainment has been responsible for 34 feature films since being founded in 2014 in addition to TV shows and burgeoning digital content, but the US-based studio has bigger plans and has agreed to merge with Bollywood counterpart Eros International in a deal that will be sweetened by $125m from investors including STX backer Liberty Global. Other investors in STX include Tencent, PCCW and Madison Wells, and they’re going to get an exit of sorts when the merged company, Eros STX Global Corporation, inherits Eros’s NYSE spot.

Healthcare services platform developer Aledade has closed a $64m series C round featuring both GV and Echo Health Ventures to take its overall funding to about $175m. Both corporate VC units participated in the round as existing investors, and the funding will support the growth of both Aledade and its care provider members. Aledade’s earlier investors reportedly also include Utimco, the investment management arm of University of Texas.

Accent Therapeutics has completed a $63m series B round that saw it welcome aboard corporate venturing units GV and AbbVie Ventures as new investors. The company launched two years ago with $40m in series A cash and will put the series B proceeds toward advance development of drug candidates that target RNA-modifying proteins to treat cancer.

Immunomic Therapeutics has created a vaccine development platform focused on diseases including – surprise, surprise – Covid-19, and has closed $61.3m in financing led by oncology-focused pharmaceutical company and partner HLB. The company is also partnering HLB on the launch of a research hub called the Asian Brain Cancer Research Center in the latter’s home country of South Korea.

Paige, a US-based cancer pathology software provider based on Memorial Sloan Kettering Cancer Center research, increased its series B round to $50m today following a $5m extension supplied by investment bank Goldman Sachs’s merchant banking division. Paige did not reveal the size of the extension in its release, but a spokesperson confirmed the amount to GUV. The company raised an initial $45m in December 2019 from a consortium led by Healthcare Venture Partners that included Brey Capital, private investor Kenan Turnacioglu and undisclosed funds.

Guru is the developer of a software product that helps employees share knowledge with each other, and which utilises AI technology to bring crucial insights to the surface. It just completed a $30m series C round that included Slack Fund, to increase its overall funding to $68m. Slack Fund had already participated in Guru’s late 2018 series B round, and its early backers include Salesforce Ventures, which invested at seed stage.

Adverity is located in a similar spot, having created a software platform enabling marketing staff to generate usable information from siloed data, and it has raised $30m in its own series C round. SAP subsidiary SAP.io was among the investors in the transaction, which was led by Sapphire Ventures nine years after it was spun off by the enterprise software provider under the moniker of SAP Ventures. It’s good to see the two working together.

Exits

Enterprise software producer Kingsoft formed cloud services provider Kingsoft Cloud in 2012 and has since grown it into China’s third largest player in the sector. Kingsoft Cloud has raised about $700m from investors including its parent company and electronics provider Xiaomi, and has now filed to go public in the US. It’s curious timing considering the ongoing coronavirus disruption, but perhaps Kingsoft sees the sector as relatively immune.


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

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