19 April 2021 – Coinbase Lists on Nasdaq

The Big Ones

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Spend enough time in venture and you can see the transformation in startups and the economy almost as if time has speeded up.

GCV’s first article on Coinbase, eight years ago to the day, described it as “a digital wallet for Bitcoin transactions”, which “had raised $600,000 from accelerator Y Combinator and publisher International Data Group’s corporate venturing unit IDG Ventures.

“Bitcoin was set up without central bank backing but with a predetermined limit of 21 million available to be issued from its software and has seen fluctuations in its value from $9 in January to $200 on 9 April 2013 and back down to $150 a day later.”

Now, Bitcoin’s price is $63,063.90 and investors have valued Coinbase at $75.9bn after its debut on Nasdaq stock exchange on Wednesday.

The Financial Times described it as “the first listing of a major cryptocurrency exchange and a moment of validation for the digital asset class some 12 years after the creation of bitcoin”. After a direct listing of Coinbase shares – rather than the more traditional initial public offering which raises new capital – the price fell to $328 from an opening price of $381 to give a market capitalisation of $85.8bn, including options and other kinds of stock-based awards.

However, after early support from CVCs, such as IDG and USAA’s Victor Pascucci and Jon Cholak, Coinbase cashed in with a $75m series C round in 2015 including from BBVA, NYSE and NTT and not looked back. Coinbase’s big investors include venture capital firms Andreessen Horowitz, Ribbit Capital and Union Square Ventures.

Coinbase’s financial fortunes have surged with the cryptocurrency markets, producing a nine-fold jump in revenues to an estimated $1.8bn in the first quarter, translating to about $1.1bn in adjusted earnings before interest, tax, depreciation and amortisation, the FT said.

But while still primarily a business-to-consumer exchange for people to buy and sell bitcoin and ethereum based on the blockchain, financial services firms are more interested in the underlying technology than its value as a monetary store or gold equivalent.

Jay Powell, chair of the Federal Reserve, said: “No one is using them for payments, for example, like the dollar. It’s a little bit like gold . . . Human beings have given gold this special value that it doesn’t have from an industrial standpoint, but nonetheless for thousands of years they’ve done that. Bitcoin is much more like that.”

Behind the scenes, however, and the big asset managers and financial groups are working on pragmatic implementations of blockchain and crypto as platform or infrastructure to trade, price, settle and be the custodians. From there, products to deploy and engage on alternative assets and how even venture capital is affected can flow.

Similar riches are now being reaped from early investments in other emerging fields created in the past two decades.

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Tuesday’s daily leader looked at the $25bn of cash returned from Naspers/Prosus selling four percentage points of its holding in Tencent over the past few years.

Netherlands-listed technology investor Prosus, formed out of the corporate venturing assets collected by South Africa-listed media group Naspers, has sold 2% of China-based gaming and social media group Tencent for $14.7bn.

This is the world’s largest-ever block trade – 191.89 million shares for HK$114.1bn – but leaves Prosus still holding 28.9% of Tencent, according to newswire Reuters.

The block trade – or the usually private, single trade of a large amount of securities – surpassed the previous record set in 2018 when Naspers also sold 2% of Tencent for $9.8bn, Refinitiv data showed. Its remaining stake is worth about $200bn, from an original $31m corporate venturing deal struck 20 years ago.

Bob van Dijk, CEO at Prosus, said: “The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock.”

Prosus, which also invests in online food delivery platforms, classified marketplaces and digital payments businesses, has built up its warchest for new and existing investments given the rapid scaling up of the innovation capital ecosystem at the later stage.

Global venture capital investments hit $125bn in the first quarter, the first time the figure has surpassed $100bn in a quarter, according to data published by Crunchbase, even though deal volumes held relatively stable.

The opportunity for social network or “platform economy” companies to dominate across sectors or verticals remains, especially as Tencent peer Alibaba’s share price rose on Monday after it was able to have the term written into law.

This is particularly the case as finance becomes embedded into media. As James Thorne, a venture capital reporter at PitchBook, noted at the weekend, Angela Strange, general partner at VC firm Andreessen Horowitz (A16Z), made the case in 2019 that most people would be working in financial services soon, even if we don’t change jobs, as finance becomes embedded into software.

At that point, media and content becomes the differentiator, which is why A16Z calls itself a media company that monetizes through venture capital.

In his annual letter last week, Jamie Dimon, CEO at bank JPMorgan Chase, said: “Fintech’s ability to merge social media, use data smartly and integrate with other platforms rapidly (often without the disadvantages of being an actual bank) will help these companies win significant market share.”
And this helps explain why even in a world where media advertising is dominated by Facebook and Google that there remains so much attention and focus on social media and networks.

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Things are heating up in Italy’s media landscape as a microcosm of wider changes in the sports and gaming ecosystem. The country’s main phone operator, TIM, has returned as a “long-term investor in venture capital” through the anchor commitment to a €100m UV T-Growth fund managed independently by United Ventures, while Nerio Alessandri, founder and executive chairman of Italy-listed fitness equipment supplier Technogym, has launched Wellness Ventures.

UV T-Growth, managed by Fabio Pirovano and Damiano Coletti, targets a wide swathe of digital innovation, including gaming. Similarly, Wellness is targeting digital projects in general but in particular in sports and fitness.
There are plenty of opportunities in sports and gaming in the digital age. Online gambling and advertising, electronic as well as physical sports and gaming and unbundling of viewers from cable or television packages are coalescing to create plenty of disruption.

The latest being Amazon, which acquired Twitch for in-game streaming and chats, paying $11bn for exclusive rights to stream Thursday night National Football League games on its Prime service.
There are now dozens of VC funds targeting games, which is a far bigger market than films. Most recently, the Games Fund has raised $50m for a game-focused venture capital fund to invest in early-stage games in both Europe and the US, according to VentureBeat.

Maria Kochmola and Ilya Eremeev started the fund having both previously worked at Russia-listed internet group Mail.ru’s My.Games division, which started a game fund called MGVC, VentureBeat said. Kochmola was the investment director at MGVC since its inception in 2017, and she led more than 35 investments (with six exits).

Deals

Cruise increases latest round to $2.75bn

Epic picks out investors for $1bn round

SambaNova rams through $676m series D

Polestar attracts $550m

SoftBank finds Better option for $500m investment

Groq locks up $300m series C

Fiture fits in $300m series B

Astranis ascends with $250m series C

Bukalapak escalates funding with $234m

Tempo works out $220m series C

Signifyd secures $205m in series E round

Clearcover coasts to $200m series D

Repertoire Immune Medicines gets $189m result

Degreed delivers $153m series D

ZJS Express zooms to $153m series B

Jaguar Gene Therapy roars to $139m

Tend drills into $125m series C

Arcellx amasses $115m in series C round

CeQur secures $115m in series C5

StoneWise stocks up with $100m

Gaussian Robotics sweeps up $100m

Hack the Box cracks $10.6m round

Funds

Axa accelerates to $295m close for second growth vehicle

Amazon shows Indian ambitions with $250m fund

TDK to deploy $150m through second fund

Exits

Grab takes reverse merger option

Tango Therapeutics arranges reverse merger

TuSimple delivers $1.35bn initial public offering

Alkami appears on public markets

MissFresh looks to deliver $1bn IPO

Brii brightens up with IPO plans

Darktrace discloses IPO plans

Vaccitech shoots for US IPO

Artiva activates $100m IPO plans

Anjuke advances to IPO stage

Hologic hoists in Mobidiag

Keyfactor turns to PrimeKey for merger

University

Schroders shifts Carrick stake at discount


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

22 March 2021 – Stripe Raises $600m with a $95bn Valuation

The Big Ones

Payment processing software provider Stripe has raised $600m from investors including Axa and Allianz X, but the key element to the story is its valuation, which has rocketed from an already huge $36bn less than a year ago to $95bn in the latest round. It’s another symptom of the surging fintech sector, even though Stripe has not mentioned IPO plans. Its earlier corporate investors are Alphabet unit CapitalG, Sumitomo Mitsui Card Company, Visa and American Express.

The drama surrounding Ant Group’s failed IPO late last year combined with Donald Trump’s exit as US president may well have served to pull more China-based tech companies to the latter country for their IPOs. Tencent-backed internet-of-things technology provider Tuya has reportedly priced its IPO above the range and will bag $915m when it floats on the New York Stock Exchange. Tencent itself has expressed interest in buying some $100m of shares in the offering.

South Korea-based conglomerate SK Group has teamed up with Chinese automotive manufacturer Zhejiang Geely Holding Group to establish a mobility technology fund with a $300m target for its final close. The corporates are each putting in $30m and will look to harness European banks and Asian pension funds among other external backers in order to raise the rest of the capital.

Crossover

Vaccitech, the UK-based developer of vaccines for infectious diseases and cancer spun out of University of Oxford famous for co-inventing the covid-19 vaccine with AstraZeneca, closed a $168m series B round backed by Oxford Sciences Innovation, Future Planet Capital, Tencent, Gilead Sciences and Monaco Constitutional Reserve Fund. The round was led by M&G Investment Management. Vaccitech actually started out with the aim of developing a universal flu vaccine, and its clinical pipeline now includes assets aimed at chronic hepatitis B infection, persistent, high-risk human papillomavirus infection and prostate cancer. It will use the series B capital to advance each of these three assets through phase 1/2 trials. Vaccitech’s earlier backers include GV, which did not return for the series B round, however.

Deals

Gene, cell and regenerative therapy developer ElevateBio has raised $525m in a series C round that found space for SoftBank’s Vision Fund 2, Itochu and an unnamed insurance provider. The round was led by investment management firm Matrix Capital Management and it pumped ElevateBio’s overall funding up to $845m since it publicly launched less than two years ago.

Robert Bosch, SAIC Motor and Toyota have co-led a $500m series C round for another Chinese tech company, autonomous driving software developer Momenta. The transaction also featured Tencent and Mercedes-Benz and it’s one of several huge rounds for mobility and transport technology developers so far in 2021, a sign that investors expect the sector to continue to progress in the coming years.

GV and SoftBank Investment Advisers, which manages over $100bn in capital for SoftBank’s Vision Funds, have contributed to a $400m series C round for drug discovery technology provider Insitro. The round boosted Insitro’s funding to more than $640m and it is emblematic of the new breed of tech-enhanced drug developers getting investment right now, with GV among the most fervent backers.

PatSnap, the operator of a cloud platform that collates investment and innovation data, is a company with a business model which has benefitted from the general rise in the market, and has pulled in $300m through a series E round co-led by SoftBank Vision Fund 2 and Tencent. Both are of course among the most active corporate venture capital investors, which implies a strategic element to their participation in the round, which reportedly valued PatSnap at over $1bn.

Airtable has more than doubled its valuation to $5.77bn, raising $270m in series E funding from investors including media holding company WndrCo. The database software producer plans to channel the proceeds into improving its platform and strengthening its sales and marketing activities. Its overall funding is now around the $620m mark.

SecurityScorecard completed its $180m series E round, snatching up funding from investors including Intel Capital, Axa Venture Partners and GV – all existing backers – at a valuation reportedly just short of $1bn. The round boosted the cybersecurity ratings provider’s total funding to $290m, and at a time when data management software providers are raising big money, it shows the importance of securing that high-grade data in the first place.

Unite Us on the other hand has reached the unicorn stage, raising $150m in series C funding from investors including Optum Ventures and Salesforce Ventures at a valuation topping $1.6bn. The company provides a cloud platform that enables healthcare providers to coordinate treatment more effectively, and it has now received more than $195m altogether.

Identity verification software provider Socure has also breached that unicorn barrier, in a $100m series D round backed by Synchrony Financial, Citi Ventures and Wells Fargo Strategic Capital that valued it at $1.3bn. Socure has so far been mainly focused on customers in the financial services sector but will use the proceeds from the round to expand into other fields.

Funds

Andre Maciel, former managing partner at telecommunications and internet group SoftBank’s $5bn Latin America-focused fund, has extended the first close of his independent venture capital firm’s first fund to $80m. Maciel, along with Gregory Reider and Milena Oliveira, set up Brazil-headquartered Volpe Capital in 2019 with SoftBank’s backing. Its first fund also has investment bank BTG Pactual and digital bank Banco Inter as limited partners, according to TechCrunch. Maciel led an investment by SoftBank in Banco Inter he said delivered about $1bn in profits for the corporate.

Canada-based biotechnology product maker Natural Products Canada (NPC) plans to raise C$50m ($39.5m) for a cleantech corporate venturing fund called NPC Ventures. The company has secured a non-binding term sheet with an undisclosed anchor investor for the vehicle, which will invest in producers of natural alternatives to synthetic products such as plastics and preservatives. NPC Ventures aims to complete its first close in autumn 2021.

Exits

Robinhood may have had much of the publicity in recent months but it’s far from the only big player in the online share trading world. Competitor eToro has more than 20 million registered users and has agreed to list on the Nasdaq Capital Market through a reverse takeover with special purpose acquisition company FinTech Acquisition Corp V in a deal that will value it at about $9.5bn pre-transaction, and the combined company at approximately $10.4bn. It last disclosed primary funding three years ago when it raised $100m at an $800m valuation, following a $39m round featuring corporate VC units CommerzVentures, Ping An Ventures and SBT Venture Capital in 2015. That’s some exit.

Megvii has filed to go public, and the computer vision and deep learning software producer could reportedly raise up to $923m in the offering, slated to take place on Shanghai Stock Exchange’s Star Market, after fees. Its investors include Alibaba, Foxconn, Legend Star and SK Group, and its largest rival, SenseTime, closed a round described as pre-IPO funding two months ago.

Olo, the developer of a software platform that helps restaurants accept online orders, is going public in a $450m initial public offering that follows roughly $65m in equity funding. Some of that cash came from PayPal, a participant in a $5m round in 2013, and the now profitable company was boosted by a big 2020 that saw it almost double revenue. The offering was priced above a range that had been increased earlier this week.

Digital banking software provider Alkami has also filed for an initial public offering, setting a placeholder figure of $100m. The move comes six months after the company raised $140m from backers including investment and financial services group Fidelity, and a Reuters report earlier this year suggested it would seek a $3bn valuation when it looked to go public.


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