21 September 2020 – Klarna Raises $650m to Almost Double its Valuation

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.

Deals

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.

Funds

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.

Exits

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.


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

22 June 2020 – DoorDash Raises $400m in Late Stage Round

Big Stories

Slowly, then suddenly change happens

This past week’s online roundtable for the Reinhard Mohn Prize 2020*, Fostering Innovation, Unlocking Potential, hosted by the Bertelsmann Stiftung (Foundation), saw luminaries from politics, business, civil society and science under Chatham House rule discuss which innovation policies and frameworks are now needed to facilitate economic prosperity and societal progress in the future and strengthen our crisis resilience.

Underpinning the discussion was new research published by the Bertelsmann Foundation in a report titled “World class patents in cutting-edge technologies: The innovation power of East Asia, North America and Europe”. Out of the 58 technology areas covered, with the top 10% classed as world class in each field, the US and China in particular are setting a much faster pace in key digital technologies, such as artificial intelligence, blockchain, quantum computing and big data, the report said.

Governments need to cure old habits of control

The traditional way to think of supporting entrepreneurs has been to look at their five primary needs: access to capital, finding customers, product and service development, hiring people and, eventually, an exit.

Increasingly, however, a sixth factor is coming into play: navigating big government.

From a reflexive position across much of the Anglo-Saxon world of privatisation and letting markets decide, since the days of Ronald Reagan and Margaret Thatcher, has come a counterblast from the East suggesting that industrial strategies, state bailouts and national champions are important.

This week, German government-owned development bank KfW agreed to invest €300m ($339m) in CureVac, the local developer of messenger RNA (mRNA)-based drugs whose technology could also influence development of a vaccine for Covid-19.

The transaction will give KfW a stake sized at about 23% and it comes after CureVacagreed a $90m loan from the European Investment Bank in March this year, when it announced it would concentrate efforts on developing a coronavirus vaccine, following press reports that the American government had tried to invest with a view to relocating the company and its products to the US.

Deals

DoorDash has raised $400m in a late-stage round that increased its valuation from $13bn last November to $16bn post-money. The online food delivery service has now secured a total of some $2.5bn in equity funding from investors including SoftBank and is still in line to go public having confidentially filed for an IPO in February. Durable Capital Partners led the round, which included Fidelity and T. Rowe Price.

Volkswagen invested $100m in solid-state battery developer QuantumScape two years ago and is increasing that commitment by up to $200m as the companies seek to strengthen their existing partnership. They are planning to set up a pilot facility to test out the industrial-scale manufacturing of QuantumScape batteries for use in Volkswagen’s electric vehicles, as the carmaker looks forward to upgrading from lithium-ion battery power.

Orca Bio organises $192m series D

C4 Therapeutics has closed a $150m series B round alongside $20m in venture debt, with the cash coming from new investors and largely undisclosed existing backers that could include Novartis, Roche and Kraft Group. The small molecule therapy developer launched in 2016 with $73m in a series A round that included all three corporates, and it plans to have four candidates in clinical trials by the end of 2022.

Corporates chip in as BYD Semiconductor gets $113m

GreenLight filters through $102m

Pagaya has built an AI software platform that utilises machine learning and data analysis to manage assets for institutional investors. It has also received $102m in a series D round featuring Clal Insurance and subsidiaries of Aflac, Bank Hapoalim and Siam Commercial Bank. The company, which has about $1.6bn under management, plans to now move into additional asset classes, particularly those related to fixed income.

University

4DMT materialises $75m series C round

Bit Bio whips up series A funding

Proprio picks up $23m

Exits

There have been a few significantly upsized IPOs of late, especially in the healthcare sector, but Avidity Biosciences has perhaps pulled off the biggest jump of all. Avidity, which is developing drugs for muscle diseases, raised $259m when it went public on Friday, floating above its range after increasing the number of shares by a whopping 44%. The company, whose investors include Eli Lilly, Brace Pharma Capital, ST Pharm and Takeda Ventures, then saw its shares rise 58% on their first day of trading. Despite ongoing uncertainty in the markets, it seems like tech companies are still in a prime position to IPO.

Kangua canters to $149m IPO

One of the larger tech companies still to make that leap is data miner Palantir, which has raised $1.9bn in funding from investors including Relx and which is reportedly readying a confidential IPO filing with a view to floating in September. Big data analysis provider Palantir has followed a $50m investment by Fujitsu with $500m from its partner in a Japanese joint venture.

Forma Therapeutics looks to be the next life sciences company to step up to the public markets, having set the range for an IPO that would net $212m if it floats at the top of that range. And some of its investors have been waiting longer than most for an exit. Novartis first invested in the cancer and haematologic disease therapy developer in 2009, with Eli Lilly following soon after. Both received a dividend early last year, and if Forma replicates the recent success of other drug developers they could be in for a bumper return.

Repare reaches public markets with $220m

Blued bids for $50m in US IPO

Proteus Digital produces bankruptcy filing


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