11 January 2021 – Online Tutoring Platform Zuoyebang Raises $1.6bn Series E

The Big Ones

One of the big shifts in 2020 was the surge in educational technology providers, with China leading the way. That was before a flurry of large rounds in the space right before the end of the year, the biggest being a $1.6bn series E round for online tutoring platform developer Zuoyebang that included Alibaba and SoftBank Vision Fund 1. Zuoyebang’s overall funding now stands at roughly $2.9bn, some 80% of which has come in the past seven months.

Andre Maciel, former managing partner at Japan-headquartered telecommunications and internet group SoftBank’s $5bn Latin America-focused fund, has raised $50m for the first close of an independent venture capital firm. Maciel set up Volpe Capital in 2019 with SoftBank’s backing, and its first fund also has investment bank BTG Pactual as a cornerstone limited partner. Marcelo Claure, head of SoftBank LatAm, and the $5bn fund’s managing partners, Paulo Passoni and Shu Nyattta, have also invested in the fund. Volpe Capital plans to invest in up to 20 early stage companies at series A stage, with a primary focus on the Brazilian market, according to regional trade body Lavca.

SoFi has come a long way since it started as a student loan refinancing specialist, having expanded into a multi-pronged financial services platform that offers lending, investment and insurance products. The company, which has raised some $2.4bn from investors including SoftBank and Renren, has also agreed a reverse merger with a SPAC called Social Capital Hedosophia Holdings Corp V and will be listed on the New York Stock Exchange. The deal will be boosted by $1.2bn in PIPE financing and the merged company will be valued at $8.65bn once the deal closes, double the valuation at which SoFi last raised money.

On GUV, the biggest deal was Hinge Health, a US-based digital therapeutics company backed by commercialisation firm IP Group, which closed a $300m series D round co-led by Coatue Management and Tiger Global. The round valued Hinge at $3bn. Founded in 2014, Hinge Health has built a digital healthcare platform for people living with chronic musculoskeletal conditions, such as back and joint pain. The offering consists of an app, wearable sensors and access to remote health coaching to deliver physical and behavioural health therapy. Hinge Health was co-founded by chief executive Daniel Perez, who gained a PhD in medical sciences from University of Oxford in 2013, and president Gabriel Mecklenburg, who obtained an MPhil in bioengineering from Imperial College London in 2014. But the company was only founded after both had graduated and worked together at Oxbridge Biotech Roundtable, an organisation looking to connect academia with industry since 2011.

Deals

B2B e-commerce marketplace Udaan has pulled in $280m from investors including Tencent for the second tranche of a series D round now standing at $865m. Tencent also took part in the round’s 2019 first close, as did Citi Ventures, and the extra funding came at a $3.1bn post-money valuation. Its overall funding has been increased to $1.15bn.

Online food delivery and restaurant listings platform developer Zomato has pulled in $660m through a series J round valuing it at $3.9bn post-money. Info Edge and Ant Financial, the two corporates that have historically been its two key investors, do not however appear to have participated in the round, the funding coming from Fidelity, Tiger Global Management, Luxor Capital, Kora Management, D1 Capital Partners, Baillie Gifford, Mirae Asset and Steadview Capital.

Cloud cybersecurity platform developer Lacework has closed $525m in funding from investors including Snowflake Ventures, which provided $20m, and existing backer Liberty Global Ventures. The company had previously raised less than $75m but said it increased revenue 300% in 2020, and that big jump in funding is indicative of how the ongoing public markets tech boom is having an impact further down the pyramid.

As 2020 drew to a close, game creation platform developer Roblox had put its initial public offering on hold, citing erratic post-IPO share movement of other tech companies. Now we can see what the results are. Roblox has secured $520m in a series H round featuring Warner Music Group valuing it at $29.5bn – a more than sevenfold increase on the $4bn valuation in its series G round under a year ago. The company has also revealed it’s eschewing an IPO in favour of a direct listing, which suggests it really wasn’t happy with its underwriters for the offering.

DXY, the Chinese operator of an online medical community, has completed a $500m round featuring Tencent Investment, at the end of a year when it established a real-time information service covering covid-19 that aimed to combat harmful rumours. Tencent had originally invested $70m in DXTY through a 2014 round that preceded a $100m series D round four years later.

Chinese AI chipmaker Horizon Robotics secured $150m in series C funding just last month but has already added $400m in a series C2 round co-led by lithium-ion battery maker Contemporary Amperex Technology. Recent reports suggested the company was targeting a total of $700m across multiple tranches, its earlier backers including Intel Capital and SK Global subsidiaries SK China and SK Hynix.

Grab is one of two big players in Southeast Asia’s on-demand ride market, and it has also been arguably the quickest in the sector worldwide to expand into other areas. It has reportedly raised $300m for Grab Financial Group, a spinoff that encompasses a range of financial services including digital payment technology, lending, insurance and investment management. Conglomerate Hanwha is leading the round through its Hanwha Asset Management subsidiary.

Chinese AI chipmaker Enflame Technology has raised $279m in the biggest round announced so far this year. Enflame produces artificial intelligence chips for data centres and has now secured a total of over $470m since it was founded in 2018. Tencent, which participated in the $279m series C round, has backed it in all four rounds it has disclosed.

Aeva develops lidar sensor technology for use in autonomous driving systems, and two months ago it agreed a reverse merger with a SPAC called InterPrivate Acquisition Corp set to value it at about $2.1bn once the deal closed. Now the company, which is backed by Porsche and Lockheed Martin, has agreed a $200m investment by one of InterPrivate’s shareholders, technology investment firm Sylebra Capital, that will close when the other deal does. It’s an interesting symptom of the ongoing public markets boom.

Divvy is the developer of an offering that combines business expense management software with smart credit cards, helping companies track and manage their expenses and spending. It has secured $165m in a series D round featuring Hanaco and PayPal Ventures at a $1.6bn valuation. The round increased Divvy’s overall funding to $410m, $200m of which came in a 2019 series C round.

Dremio, developer of a data management platform for data lake storage, has received $135m in series D funding from backers including Cisco Investments at a $1bn valuation. The corporate also took part in Dremio’s $70m series C round 10 months ago, and the latest round boosted its total funding to $250m. We’ve had a host of big enterprise software IPOs over the past year or two, but it looks as if the next wave of unicorns in the space is emerging.

Antibody therapy developer Boan Biotech has raised $106m from investors including Bank of China’s BOCG investment vehicle at a pre-money valuation a touch over $750m. The company was founded in 2013 and acquired by Luye Pharma Group six years later, the latest round representing the first it has closed since then.

Funds

US-based sports franchises the Green Bay Packers, Milwaukee Bucks and Milwaukee Brewers have backed an impact investment fund for minority-run startups. The franchises committed to Equity League as “a new impact investment division of venture capital fund TitletownTech,” alongside software producer Microsoft.

Exits

Arvelle Therapeutics was spun off in 2019 by drug developer Axovant to commercialise an epilepsy drug licensed from pharmaceutical company SK Biopharmaceuticals. The company bagged $208m in series A and project funding last year but its investors will exit after Angelini Pharma agreed to acquire it in a deal that could hit $960m. SK Bio will also get a nice return from its 12% stake in Arvelle.


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

09 November 2020 – Ant Group’s IPO Suspended by Regulators

The Big Ones

Law firm Orrick Herrington and Sutcliffe’s recent investments in Priori Legal and term sheet data analysis provider Aumni, coinciding with Latham & Watkins and Clifford Chance’s joint investment in legal tech platform Reynen Court’s recent $4.5m round, reflect the strategic interest in so-called legaltech startups.

The $30m Hypertherm Ventures fund is targeting early-stage deals in advanced manufacturing, which is a difficult place to back with limited capital and an awareness of the lengthy time horizons required.

As Car and Driver magazine noted, the electric vehicle market is challenged as few consumers are interested, they are expensive compared to petrol or diesel cars, and traditional car companies have struggled to develop appealing brands, leaving the way for Tesla and other startups out of China such as Nio to try and take advantage. But the future seems to lie in that direction given a predicted 21.1% compound annual growth rate over the next decade. As a result, Polestar, a Sino-Swedish electric car brand jointly owned by Volvo Car Group and its parent company Geely, is in talks to raise $500m from investors at a $6bn valuation, according to Bloomberg.

It is always fun as the end of year creeps up to think about the technologies that will disrupt or transform the world over the next few decades, and Adrien Book’s selectionbelow covers a number of general and specific purpose technologies. The meatless meat one is definitely catching people’s attention currently, given the post-flotation performance of Beyond Meat among others, as identified in March’s special report on agtech. The wider focus, however, is “how to replace the grocery store,” according to venture capitalists such as Andrew Ive, founder at Big Idea Ventures with Tom Mastrobuoni, former partner at meat supplier Tyson’s corporate venturing unit.

The European Union has more than halved its planned investment in the continent’s best entrepreneurs after budget cuts wiped at least €6bn ($6.8bn) off its European Innovation Council (EIC).Stéphane Ouaki, head of unit for the directorate general of research and innovation at the European Commission, in a panel at the Not Optional – Making Europe the Most Entrepreneurial Continent event on Friday, said the funding for the EIC would come in at €3.5-4bn for the seven-year Horizon Europe budgetary period from 2021 to 2027.

Funds

Fleury and Sabin combine to set up venture firm

CCCU establishes Emerging Ventures

Kuzmenkov sets up Perspective Ventures

Holtzbrinck helps HV Capital to $625m fund

Fountain Healthcare Partners finishes third fund

E14 Fund sparks bid for $80m successor

Exits

Ant Group, the Alibaba financial services spinoff that was set to go public on Thursday in a dual offering that would have been the largest flotation ever. I say was, because regulators have sensationally stepped in to suspend the offering due to concerns about Ant’s listing qualifications or disclosure requirements. For that to take place two days before an IPO is almost unheard of but for it to do so with a $34.3bn dual offering at a projected $313bn valuation seems momentous. It could be related to recent critical comments by chairman Jack Ma, but it’s also a big red flag to Chinese tech companies looking at Hong Kong or Shanghai’s Star Exchange as viable alternatives to the US markets.

China-based wealth management and peer-to-peer lending platform Lufax has floated on the New York Stock Exchange in one of the year’s largest initial public offerings, raising $2.36bn at a valuation just short of $33bn. Insurance group Ping An spun off Lufax and still owns a 39% stake, and the company’s other investors include Bank of China, Cofco, SBI, JP Morgan, UBS, Goldman Sachs, Macquarie Group and UOB. It had previously secured about $3bn across three rounds pre-IPO.

Speaking of on-demand services that have blossomed in recent months during the coronavirus pandemic, beverage delivery service Flaschenpost has seen its monthly sales zoom past $30m, across just 23 German cities, and has thus warranted a $1.16bn acquisition by packaged food producer Dr Oetker. The transaction will allow Vorwerk’s corporate venture capital arm, Vorwerk Ventures, to exit the company less than three years after taking part in a $24m round.

Freshly, the healthy meal kit service, has been acquired by Nestlé in a $950m deal that could stretch to $1.5bn once earnout payments have been taken into account. Nestlé led the company’s last round three years ago, when it raised $77m to take its total funding to $107m. Meal subscription services have come good during the coronavirus pandemic, and Freshly said it is now shipping a million meals a week in the US.

Ocado to pick up Kindred in $262m deal – Robotic picker provider Kindred Systems is set to be bought in a $262m cash transaction that will hand exits to Tencent and GV.

Intel integrates Stanford-backed SigOpt – Intel is set to buy Stanford University-backed machine learning optimisation business SigOpt, which had raised at least $8.6m in funding.

Merck & Co has agreed to pay $2.75bn in cash to acquire cancer drug developer VelosBio, handing exits to corporate venturing units Takeda Ventures and Chiesi Ventures. VelosBio had raised a touch over $200m prior to the acquisition, the brunt of which came in a Takeda-backed series B round in July. It also took part in Johnson & Johnson’s JLabs accelerator in early 2018.

Elsewhere in oncology, JW Therapeutics has scored a big exit for WuXi AppTec and Juno Therapeutics, the pharmaceutical companies that co-founded it four years ago, by floating in a $300m initial public offering in Hong Kong. They owned a combined stake sized at over 40% in JW pre-IPO having also participated in its $90m series A round in early 2018 and a $100m series B just three months ago.

TikTok owner ByteDance is among the most valuable VC-backed private companies in the world but its biggest rival in China, Kuaishou, isn’t far behind, and it looks like it’s going to be first to go public. Kuaishou has filed for an initial public offering on the Hong Kong Stock Exchange and recent reports suggested it would look to net up to $5bn at a valuation of about $50bn. The company’s backers include Tencent, which invested $2bn to lead its last round in late 2019, and Baidu.

Russian e-commerce platform Ozon has confirmed it has filed for an initial public offering on the Nasdaq Global Select Market that financial market sources told Reuters could generate up to $500m in proceeds. Sources told the Wall Street Journal last month the company would seek a $3bn to $5bn valuation in the IPO, and conglomerate Sistema, its largest shareholder, owns a stake sized above 45% once unconverted debt is taken into account.

Russian online streaming service Ivi has reportedly hired banks to organise an initial public offering slated to take place in the United States next year. The company’s investors include media company Prof-Media, which participated in a $40m round in 2012, as well as Baring Vostok, Tiger Global Management, Frontier Venture, RTP Global, Russian-Direct Investment Fund, Mubadala Investment Company, Flashpoint VC and Winter Capital.

Aeva is only three years old but the lidar-on-chip technology developer is set to list on the New York Stock Exchange through a reverse merger with special purpose acquisition company InterPrivate Acquisition Corp. The transaction will value the merged business at $2.1bn and it will benefit from $120m in PIPE financing from investors including carmaker Porsche, which had already invested a ‘significant’ amount in Aeva last December.

Upstart undertakes $100m filing – Rakuten, Alphabet and Progressive are in line for exits after the automated lending service filed to go public yesterday.

SQZ Bio squeezes on to NYSE – The AIG, Illumina, Alphabet and Orient Life-backed cell therapy developer priced its shares at the bottom of their range to raise $70.6m.

Deals

Reef Technology, 18 months ago it was ParkJockey, the owner of an app that allowed drivers to book parking spaces, but now, having rebranded to Reef Technology, it is focusing on converting underused space to hubs for on-demand services. It has also raised $700m from investors including SoftBank Vision Fund along with a $300m real estate fund. Given its target areas of cloud kitchens, on-demand healthcare, vertical farming and e-commerce logistics have all seen huge growth this year, you can see why.

CAR T-cell therapies are one of the fastest growing segments of the pharmaceutical space, and the latest cancer immunotherapy developer to close a sizeable round is Carsgen Therapeutics, which has bagged $186m in series C funding from investors including Lilly Asia Ventures. The round was led by private equity firm Loyal Valley Capital and the proceeds will support clinical trials for its oncology drug candidates in Asia, the US and Europe.

VIPThink pipes in $180m – New Oriental returned for the educational product developer’s series C round, which was led by SoftBank Vision Fund 2.

Digital signature technology provider eSign can perhaps be seen as China’s DocuSign, but it’s in an area where social distancing has necessarily led to increased use, and the company has raised $150m in series D funding. Its last round had been led by Ant Group, though the corporate (which let’s face it, has other things to deal with right now) was not listed as a participant in the latest round.

Conductor orchestrates $150m in funding – Viking Global led a $150m round for the Visa-backed banking software provider that will go to product development and international growth.

GetYourGuide discovers $133m – SoftBank Vision Fund returned in a convertible note round that pushed the total raised by the tourism experience booking service to some $788m.

Ronglian rings up $125m – New Oriental Industrial Fund helped Ronglian (aka Yuntongxun) close a series F round it claimed was the largest yet for a Chinese cloud communication technology producer.

Indonesian online marketplace Bukalapak has pulled in $100m from investors including Microsoft and Emtek at a valuation between $2.5bn and $3bn, according to Bloomberg. The company is reportedly targeting a total of $200m in the round, which comes after it closed an Emtek-backed series F round at a $2.5bn valuation in October.

University

ColdQuanta unpacks $32m series A – CU Boulder-founded quantum technology developer ColdQuanta has attracted series A funding to follow a $16.8m seed round closed two years ago.

Shoulder Innovations hoists up $21.6m – The series C funding will help Western Michigan portfolio company Shoulder Innovations build on the launch of its flagship shoulder replacement product.

Sense Bio pinpoints CIC for $50m round – Cambridge Innovation Capital has backed a round sized at up to $50m for disease testing kit producer Sense Biodetection, which has now raised more than $64m altogether.


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