In this week’s episode of the Global Venturing Review Leadership Series, James Mawson talks to Mark Sherman of Telstra Ventures.
The Big Ones
Klarna, operator of an app that lets consumers pay for items from some 200 retailers through instalment payments, has raised $650m in a round that almost doubled its valuation to $10.65bn in the space of just over a year. Klarna’s earlier investors include Bestseller Group, Visa, Ant Group and Commonwealth Bank of Australia, and media group Bonnier is one of several investors that acquired shares in the company through a concurrent secondary investment deal.
It’s a year for big tech IPOs (and there’s actually several more multi-billion-dollar news coming up in this episode), but one of the biggest upcoming offerings could reportedly take place in January next year, when short-form video app developer Kuaishou is reportedly planning to float in a $5bn offering at a $50bn valuation. Tencent owns about 20% of the company’s shares having invested $2bn to lead a December 2019 round valuing it at $28.6bn. It’s going to be interesting to see whether its growth outside of China is affected positively or negatively by the ongoing US acquisition saga surrounding its biggest competitor, TikTok (known as Douyin in China).
Panasonic provided $100m for the first fund to be launched by growth equity firm Conductive Ventures in April 2018, and it has ploughed $150m into a second vehicle that will carry on investing in sectors like artificial intelligence, digital health and advanced manufacturing technology. The corporate is the only limited partner for Conductive, the owner of a portfolio that includes Proterra, Sprinklr and Desktop Metal.
It’s been a big week for crossover deals as well. The most notable perhaps was Lava Therapeutics, a Netherlands-based immuno-oncology therapy spinout of Amsterdam University Medical Centers (Amsterdam UMC), which secured $83m in a series C round on Thursday. The round was co-led by Novo Ventures and Sanofi Ventures, and also featured MRL Ventures Fund, a subsidiary of Merck & Co’s Merck Research Laboratories division. Lava is working on treatments for haematological and solid cancers and has allocated the capital to advancing its portfolio into proof-of-concept trials in 2021. The company advances research by Hans van der Vliet at Amsterdam UMC, the university hospital group affiliated with Vrije Universiteit Amsterdam and University of Amsterdam.
One of the biggest tech success stories during the pandemic has been Peloton’s communal home fitness equipment and services, but Zwift operates in a similar sphere, providing a social exercise platform that allows users to race each other on bikes or treadmills in front of a simulated CGI-based environment. It has just pulled in $450m from investors including Amazon Alexa Fund and Zone 5 Ventures, a CVC vehicle for bicycle maker Specialized Bicycle Components. Its earlier backers include Samchuly and Colopl.
Daily fantasy sports were a big magnet for VC cash five years or so ago but the sector went quiet as companies found themselves having to deal with more and more regulatory hurdles. India’s Dream11 has however raised $225m in primary and secondary financing at a valuation reported by TechCrunch to be over $2.5bn. Tencent had invested in the company in 2018, leading a $100m series D round that valued it at $700m.
Indoor farming may not have been the big growth area some people though it might be this year, but there are still some sizeable players in the market and Infarm is one of them. It’s raised $170m in debt and equity financing from investors including Bonnier as part of a series C round in which it is targeting $200m. The first close pushed its overall funding past the $300m mark and will support the growth of its vertical farm network.
Home fitness has of course also been a big winner. Social exercise app developer Zwift secured $450m earlier this week, and now Tonal, developer of a wall-mounted digital weight machine for home use, has pulled in $110m from investors including Amazon Alexa Fund and the CAA-backed Evolution Media. Its overall funding now stands at $200m and it is testing the potential of its technology in physical therapy through a partnership with Mayo Clinic.
Japan-based real estate developer Mitsui Fudosan has partnered venture capital firm Global Brain to form an ¥8.5bn ($81m) corporate venturing vehicle dubbed 31Ventures Global Innovation Fund II. The second fund, abbreviated as CVC II, will invest in startups developing real estate services or digitisation and smart city technologies. The initiative will also seek out companies with innovative business models that can complement Mitsui Fudosan’s core business.
Tencent Trusted Doctors, the digital healthcare subsidiary of internet group Tencent, has formed a RMB1bn ($148m) healthcare industry fund with state-owned holding company China Resources. China Resources subsidiary CR Capital will manage the CR Tengkang fund, which counts municipal funds Chengdu Hi-tech Investment Group, Chengdu Xincheng Investment Group and Chengdu Industry Investment’s Chengdu Advanced Manufacturing Investment subsidiary as partners.
Australia-based software development technology provider Atlassian has launched a corporate venture capital fund, Atlassian Ventures, with $50m in capital. Areas of interest for Atlassian Ventures include early-stage developers of enterprise collaboration applications that could be added to Atlassian’s app marketplace, innovative cloud software providers and established companies with products that could interact with its existing offering.
Online real estate transaction portal OpenDoor has opted for a reverse merger instead and is merging with a special purpose acquisition company in a deal that will value it at $4.8bn and net it $1bn in financing from backers including existing corporate investors Lennar and Access Industries. It had previously raised a total of almost $1.35bn from investors also including GV and SoftBank Vision Fund, and its last round valued it at $3.8bn in March 2019.
Snowflake has floated in one of the year’s biggest initial public offerings and raised $3.36bn after pricing its shares at $120 each, above a range that had already been increased from $75 to $85 per share. The data management software provider will also receive $500m in a private placement, with half of that coming from existing investor Salesforce Ventures. Its exiting backers also include Capital One Growth Ventures, which first invested at a valuation less than 5% of what the company’s market cap will be.
Mobile insurance platform Singapore Life has agreed to merge with Aviva’s Singapore business to form a $2.3bn company that will be called Aviva-Singlife. Sumitomo paid $90m for a 25% stake in Singlife in July 2019 and will retain a 20% stake in the merged business, suggesting it may have contributed to the $1.46bn cash and marketable securities Singlife is paying Aviva as part of the deal. Insurance firm Aflac will also keep a stake, having supplied $20m for Singlife six months earlier.
Amwell has floated in an upsized initial public offering that netted it $742m in addition to $100m supplied by Google through a private placement. Telehealth software has been a big growth area over the past six months but the success of Amwell, which counts Allianz, Philips, Teva and Takeda as investors, could perhaps be more closely related to a week where Snowflake, JFrog, Unity Software and Sumo Logic all floated above their range to raise big money in their IPOs. It’s a heady time for exits right now.
The growth of Snowflake, which floated at a market cap more than 15 times its valuation just two years ago, has been immense. The progress of another enterprise software provider JFrog, which went public the same day in a $509m IPO, has perhaps been understated as a result, but it has almost quadrupled its valuation in less than a year, boasting a $5.75bn market cap after its first day of trading. JFrog, developer of a software-release platform, had raised $227m from investors including Dell Technologies Capital.
Speaking of successful offerings, Outset Medical’s shares have shot off like a rocket and sat at more than double their IPO price within two days. The kidney dialysis system provider has unsurprisingly closed the offering already, at $278m, up from an initial $242m. Baxter Ventures, the corporate venturing arm of medical device maker Baxter International, is among the lucky investors.
C4 Therapeutics is developing small molecule drugs to treat cancer and neurodegenerative diseases, and has filed for a $100m initial public offering under three months after it received $170m in debt and series B equity financing. Its earlier backers include Novartis, Roche and Kraft Group, all of which contributed to a $73m series A round in 2016.
In this week’s episode of the Global Venturing Review Leadership Series, we talk to Tony Armstrong, president and chief executive of IU Ventures, about how the organisation supports Indiana University spinouts and startups.
The Big Ones
Online education has firmly established itself as the key sector in India’s startup space, and Byju’s has effectively confirmed that, raising an amount reported by TechCrunch to be $500m. Byju’s, which is backed by Tencent, Naspers and Times Internet, was valued at $10.8bn post-money in the round, which came in the wake of it adding an extraordinary 20 million users since the start of the Covid-19 lockdown. That means the company has almost trebled its valuation inside two years.
Saudi Aramco has a market cap of some $1.8 trillion but is looking to explore diversification into other areas besides oil and gas (perhaps not surprisingly given the direction of oil prices this year). To that end, it has formed a $1bn fund called Prosperity 7 Ventures that is tasked with investing in innovative technologies like AI, 5G, robotics, blockchain and the internet of things. It will join the company’s Saudi Aramco Energy Ventures unit as well as its Wa’ed Ventures vehicle.
Illumina spinoff Grail has filed for what may be one of this year’s biggest healthtech IPOs. The cancer diagnostics technology developer has set a $100m placeholder target for the offering but has raised $1.9bn in venture funding from investors including Johnson & Johnson, WuXi AppTec, Tencent, Amazon, Varian, Memorial Sloan Kettering Cancer Center, Bristol-Myers Squibb, McKesson, Celgene, Alphabet and Merck & Co. It was valued at a reported $3.2bn back in 2018, prior to its last round.
X-over: Recursion, a University of Utah spinout, is using digital technologies such as automation and machine learning to develop drugs for various diseases and has built up a 30-strong drug pipeline, four of which have reached the clinical trials stage. It has also secured $239m in a series D round led by a $50m investment from Leaps by Bayer. The unit’s parent company, Bayer, has also formed a strategic partnership with Recursion, which was valued at about $1.2bn post-money.
Industrial technology has not been among the winners during the coronavirus lockdown, but advanced materials producer Zymergen has nevertheless snagged $300m in a series D round led by investment manager Bailie Gifford. The company, which has developed a bio-based polyimide film called Hyaline, has now raised a total of $874m in funding, its earlier backers including SoftBank Vision Fund and Hanwha Asset Management.
A sector that hasn’t done brilliantly – for understandable reasons – is ride hailing, but that impact has been somewhat mitigated by the fact several companies in that space have seen their food delivery businesses pick up. Southeast Asia’s Grab will hypothetically see an uptick in its digital financial services arm, Grab Financial Group, and the subsidiary is reportedly in advanced talks with investors including insurers AIA and Prudential to raise $300m to $500m at a valuation of roughly $2bn. That funding would support an expansion into wealth management and the possible securing of an online banking licence.
Melio, developer of an online payment management platform for businesses, revealed today it has collected a total of $144m in funding since 2018, most recently netting $80m in a series C round last month. It hasn’t provided precise details but did say its backers include American Express Ventures. Amex’s corporate venturing unit has quietly been racking up some big exits over the last two or three years, most notably from Plaid, iZettle and Bill.com, showing that CVC investing can bag some nice returns alongside strategic interests.
AnyVision, an image and facial recognition software provider that counts Qualcomm Ventures and Robert Bosch among its backers, has pulled in $43m in funding from unnamed investors. The deal comes just over a year after its $74m series A round and roughly four months after Microsoft subsidiary M12, a participant in that round, announced it was divesting its stake due to doubts about the ethics of the use of facial recognition technology by governments.
Thursday/Friday were a heady 24 hours for corporate fund announcements (which included the Saudi Aramco vehicle we talked about earlier). And Toyota Research Institute – Advanced Development has launched an $800m growth-stage fund called Woven Capital that will back Toyota AI Ventures portfolio companies as they grow, in addition to backing external venture funds. Companies backed by the early-stage vehicle that have raised big rounds of late include personal aircraft developer Joby Aviation, driver safety technology provider Nauto and electric bus producer Proterra.
Santander has had a good degree of success since launching its Santander Innoventures unit with $100m in 2014, snagging big exits from iZettle and Kabbage while accessing technology from several portfolio companies. It has now spun off the unit into an autonomously managed fund dubbed Mouro Capital and doubled its capital allocation again from $200m to $400m. It will make initial investments of about $15m at early and growth stage.
KAR Auction Services has agreed to acquire BacklotCars, the owner of an online dealer-to-dealer automotive marketplace, for $425m, enabling Renren to exit. BacklotCars had raised roughly $50m pre-acquisition. Renren has pulled back from corporate venturing almost completely since 2017, but it’s going to be interesting to see if it can pull some more big exits out of its existing portfolio.
Fabless semiconductor maker 3Peak is set to bag $339m in its IPO, on the red-hot Shanghai Star Exchange. The Huawei-backed company is simply the latest to choose the Star Exchange to go public, the market having benefited from regulations introduced by US exchanges to combat what was perceived as unsatisfactory accounting practices by Chinese companies. It will also jointly host what may be the biggest IPO ever, when Ant Financial floats later this year.
Progress has bought software deployment automation platform Chef in another nine-figure acquisition deal, paying $220m in cash for the company. Chef had received a total of $105m in funding, most recently securing $40m in a 2015 series E round that included Citi Ventures and Hewlett Packard Ventures, which passed its stake in the company on to Hewlett Packard Pathfinder.
Emphysema treatment device developer Pulmonx has filed for an $86.3m offering that would provide exits to Boston Scientific and Posco Bioventures. The former is Pulmonx’s largest investor, the owner of a stake that tops 30%.
Episerver has signed an agreement to purchase Optimizely, a web optimisation software producer that has raised roughly $200m from backers including Accenture Ventures, GV, Citi Ventures and Salesforce Ventures. The size of the deal has not been disclosed but it will consist of a mixture of cash and shares. It comes less than two months after Optimizely revealed it had cut staff numbers by about 15% in the wake of impact from Covid-19.
On this week’s Leadership Series we talk to Lesley Millar-Nicholson, director of MIT’s Technology Licensing Office and Catalysts, about a bumper year despite the pandemic.
The Big Ones
Online education has been one of the big growth sectors during the coronavirus pandemic. That’s particularly true in China, and as one of the biggest players Yuanfudao has likely seen a decent chunk of that growth. The company raised $1bn at a $7.8bn valuation less than six months ago but is now reportedly lining up $1.2bn in additional funding from investors including Tencent at a whopping $13bn valuation. Tencent first invested in Yuanfudao in 2016 and it’s one of several online education-focused companies in the corporate’s portfolio.
US-based venture capital firm Bitkraft Ventures has closed its second fund at $165m with backers including apparel producer Adidas, media group Advance Publications, computer peripherals manufacturer Logitech and advertising group WPP. Family office Carolwood and investment firms Declaration Partners and JS Capital are also among the limited partners for the fund, which had an initial target size of $125m for its close. Bitkraft Ventures Fund I will target early-stage deals in the gaming, esports and interactive media sectors. It has already begun investing and, together with Bitkraft’s Pre-Seed Fund, has built a portfolio of more than 50 companies across North America, Europe and Asia.
Exits is also a crossover: The reverse merger trend is really beginning to pick up steam. The latest company to take the plunge is solid-state battery developer QuantumScape, a Stanford spinout, which has agreed to merge with publicly-listed special purpose acquisition company Kensington Capital Acquisition Corp in a deal that will value the combined business at $3.3bn. QuantumScape’s largest investor is Volkswagen, which has provided some $300m since 2018 and which plans to use the batteries in its vehicles. Other shareholders include Continental, SAIC Motor and Bill Gates.
Neon Pagamentos has agreed $300m in funding through a two-tranche series C round featuring PayPal Ventures and the BBVA-backed Propel Venture Partners. The digital bank, one of a new wave of Latin American tech companies raising big rounds, has earmarked the funding for hiring, technology development and the expansion of a user base that currently takes in some 9 million consumer and business accounts.
Zomato remains locked in an online food delivery war with Indian peer Swiggy but has raised new funding to help it expand, taking $262m in late-stage funding from Temasek, Tiger Global Management and Kora Capital at a reported $3bn valuation. Its existing backers include Ant Financial, Delivery Hero and Info Edge as well as Uber, which acquired a 10% stake in January by merging the Indian operations of its Uber Eats subsidiary into the company.
Online real estate marketplace PropertyGuru Group is another company that has extended a popular e-commerce model into an emerging market, in this case Southeast Asia, and it has raised $220m from existing investors TPG and KKR to take its overall funding to more than $550m. PropertyGuru’s existing backers include Emtek, which has been forced to wait for an exit after the company postponed an initial public offering supposed to take place late last year.
Peer-to-peer lending platform Auxmoney has secured $178m in a round led by private equity firm Centerbridge that will also involve Centerbridge buying secondary shares in order to become its majority investor. Auxmoney’s existing backers will each retain shares in the company, though the selling shareholders will likely include Aegon and its corporate venturing unit Transamerica Ventures. Another corporate backer, broadcasting group ProSiebenSat.1, had already exited in 2017.
India-based edtech player Unacademy has raised a $150m series F round backed by SoftBank Vision Fund 2 and Facebook. The round valued Uncademy at $1.45bn, a huge jump from the $510m valuation at which it last raised money, just over six months ago. Facebook also took part in that round, the company’s $110m series E.
One of India’s biggest players in the edtech sector is Byju’s, which has raised $122m from DST Global to take its series F funding to $145m. The round values Tencent-backed Byju’s at $10.5bn – up from $8bn when it raised money at the start of this year – and the company is targeting $400m for the close of the round.
Rounding off the education funding frenzy is Eruditus, which partners universities to create adult learning courses and which has just secured $113m in a series D round co-led by Naspers-backed vehicle Prosus Ventures. The funding was raised at a post-money valuation in excess of $700m, and the company’s earlier backers include Bertelsmann India Investments.
Patreon on the other hand operates a financial subscription service that supports creatives – it’s a business model replicated by another corporate-backed company, Steady.fm, that is popular in German-speaking countries. Patreon, whose earlier investors include talent management agencies CAA and UTA, has now hit a $1.2bn valuation in a $90m series E round co-led by venture firms New Enterprise Associates and Wellington Management. It said this week it expects to oversee $1bn of payments a year to members going forward. It will also double-down on its international expansion, by adding more currencies, so it will interesting to see how Steady.fm will fare when the much bigger Patreon moves in.
Xfund, a US-based venture capital firm aligned to Harvard University, debuted a third investment fund with $120m in contributions from undisclosed limited partners. Xfund aims to leverage innovation from top-tier universities globally in a partnership helmed by Harvard together with New Enterprise Associates, Breyer Capital, Accel Partners and Polaris Partners. The fund was set up to combine investment rigour with business models based on free-thinking and intellectual awareness from academic founders with unconventional backgrounds such as liberal arts graduates.
The latest promising tech company to agree a reverse merger is esports competition platform developer Skillz, which will go public through a merger with Flying Eagle Acquisition Corp, a special purpose acquisition company that floated in a $600m initial public offering in March. The transaction values Skillz at $3.5bn and it comes less than a year after 32 Equity, which represents all 32 NFL teams, invested in the company. It had raised a total of $53m from backers including Telstra, Liberty Global and Kraft Group as of 2017.
Shenzhen Hymson Laser Intelligent Equipments produces equipment such as laser cutters and welders for use in manufacturing, and has raised $107m in an initial public offering on Shanghai’s Star Exchange. Its shareholders include Legend Capital, the venture firm spun off by conglomerate Legend Holdings, which took part in a 2018 seed round and which owns a 2.7% stake post-IPO.
On this week’s Leadership Podcast we turn back the clock to our summer digital form held in June for a talk by DLA Piper’s Mark Radcliffe who is joined by Eric Goldberg to talk about the duties of board directors in the context of a financially distressed company.
The Big Ones
Cancer test developer Freenome has closed a $270m series C round that included Novartis and existing backers GV, Kaiser Permanente Ventures and Roche Venture Fund to hike its overall funding to $507m. The capital will be allocated to a clinical study for a blood test Freenome is developing for colorectal cancer screening, in addition to advancing additional oncology blood tests.
American Family Ventures was formed by insurer American Family in 2013 to invest in areas like insurance, financial services, big data and cybersecurity technology, and it’s following a recent trend by recruiting external limited partners for its latest fund. AFV Fund III has closed at $213m and its LPs will also be able to gain value through a scheme called AFV Platform that will be able to link them to portfolio companies and fellow investors.
Ant Group has officially filed for a dual listing in Hong Kong and Shanghai that could potentially raise $30bn – a figure that would equate to the largest initial public offering for a VC-backed company in history. It will reportedly now speak to underwriters and other stakeholders to determine the details of the flotations, which are expected to value it between $200bn and $300bn. Apart from Alibaba, corporates including China Post and China Life are also among its investors, both having backed it at a $60bn valuation in 2016.
Crossover: Kymeta, a US-based satellite broadband provider exploiting foundational research from Duke University, secured $85m in a funding round led by entrepreneur Bill Gates, with the backing of some of Kymeta’s leadership team. Kymeta has raised more than $282m in funding altogether, satellite operator Intelsat having contributed to a $73.5m round in 2017 together with undisclosed additional investors. Media group Liberty Global had joined Osage University Partners, Bill Gates, Lux Capital and Kresge Foundation in Kymeta’s $50m series C round in 2013. And Kymeta had already secured $12m in funding from Liberty Global, Lux Capital and Gates the year before.
Consumer companies have had a mixed at best time of it during the coronavirus pandemic but eyewear e-commerce platform Warby Parker has done quite well, raising $245m across series F and G rounds while hiking its valuation from $1.75bn in late 2018 to $3bn today. The company’s earlier investors include American Express Ventures and the latest round increased its overall funding to $535m.
Viva Republica, the creator of money management app Toss, has raised its own nine-figure round, pulling in $173m in a round that reportedly took its valuation from $2.2bn to $2.6bn. The company’s total funding now stands at $530m, its earlier investors including Novel Group, PayPal and Qualcomm Ventures. The funding will help it grow Toss into a more diversified finance-focused app that includes financial product recommendations.
Mural, developer of an online visual collaboration platform, has closed an $118m series B round that included Slack Fund and returning backer Gradient Ventures. The round came just seven months after Mural’s series A funding, but its initial investment came all the way back in 2012 in a tiny round featuring another corporate venturing unit, Intel Capital.
Data collaboration software provider Daitaku has raised $100m in series D funding from investors including Alphabet’s CapitalG unit. The round followed a secondary investment from CapitalG in December that valued Daitaku at $1.4bn, and the company said it has maintained a unicorn valuation in the latest round. It has also now secured $246m in primary funding altogether.
This is going to be a quick one today: other than the American Family Ventures fundraiser we’ve already covered, it’s been a slow week for funds.
Things are really beginning to heat up as we pass through the summer lull to the traditional autumn rush and a good deal of activity is focused on the public markets. Chinese smart electric carmaker Xpeng has floated in the US in an upsized $1.5bn initial public offering valuing it above $21bn. Alibaba and Xiaomi were among the Xpeng investors considering buying $400m of shares in the IPO, and its backers also include Foxconn, UCar and Douwan Entertainment.
The sheer scale of Ant’s forthcoming listing casts a large shadow, enough to almost make you forget what a big story it is that data analysis provider Palantir has also filed to go public. The Relx, Fujitsu and Sompo Holdings-backed company is eschewing an IPO in favour of a direct listing, following the likes of Spotify and Slack. It was valued above $20bn in 2016 but regardless of whether it’s maintained that valuation (and there are doubts about that), it will be one of the year’s biggest listings in a year set to be full of them.
Cloud data software provider Snowflake is another hugely valued tech company to file for an initial public offering, six months after closing a $479m series G round at a valuation exceeding $12bn. Salesforce Ventures was among the participants in that round but Capital One Growth Ventures got in earlier, backing its 2017 series D at a reported $500m valuation. It isn’t among Snowflake’s largest shareholders but it should be in for a bumper exit nonetheless.
Although a lot of companies are filing for IPOs, lidar technology developer Luminar has taken a different route, agreeing to a reverse merger with special purpose acquisition company (SPAC) Gores Metropoulos that will give it a Nasdaq listing and an expected valuation of $3.4bn. The deal is being boosted by $170m of financing from a syndicate including Van Tuyl Companies and Volvo Cars Tech Fund, the latter – like fellow corporates Corning and Cornes- an existing Luminar investor. Expect more of these kinds of deals, judging by the volume of SPACs entering the public markets of late.
In fact, another company to follow the SPAC route is 3D metal printer producer Desktop Metal, which will list on the New York Stock Exchange through a reverse merger with a SPAC called Trine Acquisition Corp. The combined business is set to be valued at $2.5bn, Desktop Metal having previously raised $438m from investors including Koch Industries, Alphabet, Panasonic, Techtronic Industries, Ford, Saudi Aramco, Lowe’s, BMW and Stratasys.
All these IPO and reverse merger deals have perhaps obscured the fact the M&A market seems to be doing quite well too. Fastly has agreed to buy web security application provider Signal Sciences for $200m in cash and $575m in stock, and the transaction will come after about $62m in funding. That money came from investors including O’Reilly Media’s OATV unit, which is in for a tasty exit having backed it in every round since its $2m seed funding.
Kymera Therapeutics raised almost $174m in its initial public offering on Friday, pricing its shares above their range before seeing them soar by 66% after their first day of trading. The small-molecule drug developer had previously received nearly $220m in funding from investors including corporate venturing units Amgen Ventures, Lilly Ventures, Pfizer Ventures, MRL Ventures Fund and Sanofi Ventures.
Israeli digital X-ray device developer Nano-X Imaging has also floated in the US, in a $165m IPO that scored exits for corporate investors SK Telecom, iA Financial, Foxconn and Fujifilm. The company priced its shares at the top of the range and their subsequent rise almost doubled its valuation from its last pre-IPO funding round, which closed in June this year.
Our Leadership Series interview where we talk to Peter Devine about Uniseed, Australia’s longest running venture fund that operates at the Universities of Melbourne, Queensland, Sydney & New South Wales, and the CSIRO.
The Big Ones
SpaceX has been one of the most fervent fundraisers among private companies in recent years and it shows no signs of stopping. A securities filing indicates the spacecraft manufacturer and launch services provider has secured $1.9bn from undisclosed investors, with recent media reports putting the valuation of the round at $46bn. Its earlier backers include Google, which invested $900m at a $12bn valuation five years ago, and that valuation looks set to keep on rising for now.
Consumer electronics manufacturer Konka Group has teamed up with the Chinese city of Yancheng to put together an industry fund that will begin investing from a base of about $435m. The fund will be sized at up to $1.45bn and Konka is providing 40% of the capital. Its areas of interest include AI, semiconductors, the internet-of-things, new machinery and advanced materials.
Airbnb has announced it has confidentially filed for its long-awaited initial public offering. People were talking about an Airbnb flotation before the last downturn in the IPO markets in 2018. The rebound last year wasn’t enough to tempt it, but now, while they’re rallying for tech stocks, seems to be the right time despite a coronavirus-related hit to Airbnb’s business that saw it lay off 25% of its staff in May. The CapitalG-backed company had been valued at $26bn, down from $31bn, when it raised $1bn in debt and equity the previous month.
We have finally hit that summer lull on GUV, but there were still a few big stories. Most notably, Mission Bio, a US-based DNA analysis technology spinout of University of California, San Francisco (UCSF), has raised $70m in a series C round led by pharmaceutical firm Novo’s Novo Growth unit. Agilent Ventures, the corporate venturing arm of laboratory equipment and diagnostics services provider Agilent Technologies, also took part in the round, as did Cota Capital, Mayfield Fund and Soleus Capital. The round took the company’s total funding to more than $120m, it said, and Robert Ghenchev, head of Novo Growth, has joined its board of directors. Founded in 2014, Mission Bio has created a system called Tapestri which enables researchers and medical professionals to analyse single-cell RNA sequencing data to help develop precision medicines. The spinout leverages genomics technology from UCSF’s Abate Lab.
E-commerce group JD.com”s pharmaceutical product and medical services spinoff JD Health raised $1bn at a $6.9bn valuation last year, and now it’s agreed to add series B funding from investment manager Hillhouse Capital. The deal is set to be finalised next month and JD Health expects to get upwards of $830m from Hillhouse, an investor in its parent company since its 2012 series C round.
Last week we talked about reports that Chinese online medical insurance and crowdfunding service Waterdrop had raised $200m at a $2bn valuation, but a subsequent announcement places the size of the round at $230m. Tencent and Swiss Re co-led the round, which sources told Reuters valued Waterdrop just short of $2bn. Swiss Re has been relatively quiet in the corporate venturing space in recent years but reportedly put up $100m of the capital in this round.
Online share trading has made a big jump as the stock markets rally, and RobinHood is getting a lot of business in the US market. It has accordingly increased its valuation from $8.3bn to $11.2bn in the space of just four weeks, its latest move being to raise $200m in series G financing from investment firm D1 Capital Partners. It has now secured a total of $1.7bn and its earlier investors include Roc Nation’s Arrive subsidiary as well as Alphabet units GV and CapitalG.
Palfish is one of several Chinese online education providers to have experienced growth during Covid-19 lockdowns, and it has raised $120m in a series C round that included quantitative trading firm Susquehanna International Group. The company specialises in English tutoring and claims to have some 40 million users. It will put the funding towards improving its big data technology.
BlockFi has been one of the more frequent fundraisers in the startup space having closed five rounds in just over two years as it expands its range of digital currency services. The latest is a $50m series C round that included subsidiaries of CM Group and Siam Commercial Bank. The company has now secured more than $160m and its earlier backers include Consensys, SIG, Recruit and SoFi.
There are several VC-backed companies operating under the moniker of Element but the latest to raise money is the Germany-based bespoke insurance software provider, which has added funding from investors including Sony Financial Ventures and SBI Investment to a series A round that now stands at $46.5m. The earlier tranches featured Signal Iduna and Mitsui Sumitomo Insurance.
MDI Ventures, the corporate venturing arm of Indonesian state-owned telecommunications firm Telkom, has closed a $500m fund entirely financed by the company. It will invest between $5m and $30m in domestic digital technology developers that will get access to a range of government-owned corporations, which in turn will be able to leverage the technology required to form a digital ecosystem in the country.
Russian conglomerate Sistema may not be the most active participant in the corporate venturing space but it does have one of the largest ranges of investment, having closed a series of funds focusing on different regions and sectors. Its Sistema Asia Capital subsidiary closed a $120m India fund in 2015 and is in the midst of raising the same amount for a vehicle concentrating on Southeast Asia. Areas of interest include cybersecurity, computer vision, smart cities, urban mobility and the internet-of-things.
Pharmaceutical companies Juno Therapeutics (itself a spinout of Fred Hutchinson Cancer Research Centre, Seattle Children’s Research Institute and Memorial Sloan-Kettering Cancer Centre) and WuXi AppTec founded cancer immunotherapy developer JW Therapeutics in 2016 and now it has filed for an initial public offering in Hong Kong. Recent reports suggested JW would target $250m to $300m in the IPO having already raised more than $200m in venture funding. Juno retains a 26% stake in the company while WuXi AppTec owns about 14% of its shares.
Biologic drug developer Inhibrx has gone public, raising $119m having floated at the midpoint of its range. Inhibrx had received some $135m in equity and debt financing from investors including Eli Lilly and WuXi Biologics, and its share price followed recent trends by rising post-IPO. It’s been a bumper time for newly public companies of late, the question is how much of a bubble this represents and whether latecomers to the party could end up missing out.
Nano-X Imaging is working on a medical imaging system intended to function as a more affordable alternative to X-ray machines, and the Israeli company has set terms for an initial public offering in the US that will raise almost $106m if it floats at the top of its range. A big impetus is that existing investors including corporates Foxconn, SK Telecom and iA Financial have expressed interest in buying up to $80m of shares in the offering, which is a more than decent vote of confidence.