21 December 2020 – ByteDance Raising $2bn at $180bn Valuation

The Big Ones

Ant Group may not have been able to successfully go public but China’s other hugely valuable VC-backed private company, ByteDance, is reportedly in the process of raising $2bn at a $180bn valuation. KKR and Sequoia Capital are co-leading the round, but no word yet on whether it’s set to include SoftBank, a participant in its last round, in 2018, which valued it at $78bn.

Luxembourg-headquartered venture capital fund European Circular Bioeconomy Fund (ECBF) reached a €175m ($213m) second close on Tuesday with €93m from limited partners including corporates Volkswohl Bund Versicherungen, Nestlé and Neste. Insurance provider Volkswohl Bund Versicherungen, packaged food and beverage producer Nestlé and oil processor Neste were joined in the second close by promotional bank NRW Bank and an unnamed family office. ECBF was launched by the European Commission and European Investment Bank in November 2019. The European Investment Bank has provided a total of €100m for the vehicle as a cornerstone investor. The fund is focused on late-stage investments in bioeconomy technology developers located in Europe. It is two thirds of the way towards a targeted close of €250m.

Roblox and Affirm may be putting their initial public offerings back to 2021, but that hasn’t stopped mobile commerce platform developer Wish pricing an IPO that will net it just over $1.1bn. The JD.com-backed company is floating at the top of its range after pumping its revenue up 32% in the first nine months of 2020, at a valuation about 50% higher than in its last round, in August 2019, so the outcome of this one is going to be very interesting. Were the others priced badly or is the market just supercharged right now?

University of British Columbia-linked AbCellera was one of the recent IPO candidates that saw a huge first-day pop, pricing an upsized $483m IPO at $20 per share early in the week only for its shares to open at more than three times that price. The Eli Lilly-backed antibody therapy developer eventually closed that offering at $556m after the underwriters unsurprisingly took up the over-allotment option. It won’t be the last time that happens this year.

Deals

Google X may not have been the goldmine some at its parent company hoped for, but an unqualified success at this point has to be Verily, the company applying big data technology to healthcare and life sciences. Verily has just raised $700m from existing investors including Google owner Alphabet, representing its third mega round in total. Alphabet was joined by Temasek, which invested $800m in Verily in 2017, as well as Silver Lake and Ontario Teachers’ Pension Plan, which had added $1bn two years later.

Xingsheng Preference Electronic Business, the group buying platform mainly known as Xingsheng Youxuan, has agreed to raise $700m from e-commerce group JD.com through a strategic collaboration agreement. The news was revealed in a regulatory filing without a valuation attached, but Xingsheng Youxuan was reportedly in the process of securing $800m in a Tencent-backed round in July at a $4bn post-money valuation.

Apex Microelectronics, a chipmaker spinoff of printing and imaging technology producer Ninestar, has raised $489m from investors including Gree Electric Appliance’s Zhuhai Gree Financial Investment Management vehicle. The round was led by the $31bn China Integrated Circuit Industry Investment Fund II, and Gree Financial Investment Managementsupplied $53.5m in return for a 1.8% stake.

StockX runs an e-commerce marketplace that specialises in collectible and high-grade goods such as sneakers, handbags and electronics, and has raised $275m in series E funding at a $2.8bn post-money valuation. Tiger Global Management led the round, and StockX’s earlier investors include GV, the Alphabet subsidiary formerly known as Google Ventures, which has had some year it’s fair to say.

With vaccines beginning to be rolled out, it feels like the tech space is finally looking forward to a 2021 where some dormant sectors will be making big returns (potentially in both senses of the word). That could be part of the impetus behind the $182m in funding just raised by ride hailing service Bolt. Daimler and Didi Chuxing-backed Bolt has diversified its business model by leaning more heavily on logistics in recent months, and the round looks to have more than doubled its valuation to roughly $4.3bn.

Tencent has co-led a $153m funding round for Yonghui Fresh Food, a business-to-business fresh produce distribution subsidiary of supermarket chain Yonghui Superstore, with China International Capital Corporation’s CICC Qizhi fund. The round also featured Yonghui Superstore itself, which retains a 32% stake in the company having also backed its $145m series A round two years ago.

Funds

China-based venture capital firm BeFor Capital has amassed RMB700m ($107m) of capital across two funds, one backed by solar cell manufacturer Canadian Solar. The firm pulled in approximately $76.4m for the first close of its Fund III and $30.5m for the close of Fund IV. It now has over $306m of capital under management across four funds and a number of special purpose vehicles. Canadian Solar contributed to Befor Capital’s Fund III alongside funds backed by the government of China’s Inner Mongolia and Hohhot regions.

Exits

Boehringer Ingelheim has agreed to acquire one of its portfolio companies, oncology therapy developer NBE-Therapeutics, in a transaction that could reach $1.43bn once milestone payments are factored in. NBE is working on antibody-drug conjugates to treat cancer, and has raised approximately $68m from investors including Boehringer Ingelheim Venture Fund and pharmaceutical firm Novo.

Lidar sensor and software provider Innoviz has chosen the reverse merger route, one boosted by $200m in PIPE financing from investors including corporate backers Magna International and Phoenix Insurance. The combined company will be valued at about $1.4bn once the deal closes, and Innoviz’s existing investors also include Samsung Catalyst, SoftBank Ventures Asia, Naver, Delek Motors, Delphi Automotive and Harel Insurance Investments and Financial Services.

Upstart, the owner of an online lending platform that utilises artificial intelligence in its activities, is also valued above $2bn, following a $240m initial public offering. Its shares rocketed up 47% in their first day of trading yesterday and its pre-IPO backers include Rakuten, Progressive and GV, which sold $1.6m of shares having backed Upstart’s $1.75m seed round eight years ago. Its remaining stake is worth about $28m at the current share price.

The second half of 2020 has been a bonanza period for IPOs, and things don’t show any sign of slowing down either, not with the sky-high valuations companies are seeing as soon as they hit the market. UiPath, a provider of robotic process automation software, has filed confidentially to go public, five months after a Tencent-backed series E round valuing it at $10.2bn. It has so far raised some $1.3bn in funding, with Alphabet’s CapitalG also among its investors.

Coinbase is the other unicorn to have confidentially filed to go public in the last day or so, the crypto trading platform having been valued at $8bn in its last round two years ago. Now that figure looks sure to rise, given the increasing activity in blockchain technology and the recent shooting up of Bitcoin prices. It has raised approximately $517m from investors that include New York Stock Exchange, NTT Docomo, BBVA and USAA.


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

01 June 2020 – UBS Groups Prepares for Fintech Investments

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