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

15 October 2018 – Saudi Arabia’s Public Investment Fund Invests $45bn in SoftBank’s Second Vision Fund

Funds

SoftBank has for a few months discussed its intentions to launch a second $100bn Vision Fund, and it will have received a hefty incentive with news that Saudi Arabia’s Public Investment Fund intends to put up $45bn for the new fund.

Foxconn has formed a $545m investment fund that will invest in semiconductor ventures including the launch of five integrated-circuit design companies and one high-performance chip developer.

Tencent Investments, internet group Tencent’s corporate venturing unit, is meanwhile in talks with family offices and other potential limited partners for a $650m fund that will focus on follow-on investments in its portfolio companies.

Chrysalix takes corporates to RoboValley for new fund

Another interesting development in the past two or three years has been the increased entry of packaged food producers into corporate venturing. The likes of Kellogg, General Mills and Tyson Foods have been joined by Kraft Heinz, which is committing $100m to an investment initiative called Evolv Ventures.

University

Theodorus unveils $23m fund

Université libre de Bruxelles has added a fourth Theodorus fund to its arsenal with an initial close of $23m and a target of up to $33.5m.

Yissum fabricates $6m nanotech fund

HUJ’s tech transfer arm still hopes to raise a further $3m for the fund for a $9m close, and it has already invested in three technologies.

Deals

SoftBank has pumped billions of dollars into workspace provider WeWork to build up a stake of almost 20%, and the WSJ has reported that its Vision Fund is now considering an investment between $15bn and $20bn that will give it a majority stake in the company.

Xiaozhu, the short-term accommodation platform seen by many as China’s Airbnb, hasraised almost $300m in a round led by Yunfeng Capital.

Snowflake Computing has to be one of the fastest growing companies in the startup space right now. The data warehousing software provider raised $263m at a post-money valuation of $1.76bn in January and now, nine months later, has secured $450m in a round that valued it at $3.95bn post-money.

There’s been a lot about digital banking in recent months but much of the dealflow has been going on in Europe. Nubank however is showing that the model can be expanded to other markets, and the Brazilian company has raised $180m from Tencent at a reported $4bn valuation.

JFrog jumps to $165m series D

University

Glympse Bio engineers $22m series A

Exits

Redlock heads to Palo Alto in $173m acquisition

GV exits as Anju inhales Zephyr

Orchard Therapeutics has filed to raise almost $173m in an initial public offering, having secured more than $290m in equity funding in under three years. GlaxoSmithKline is the gene therapy developer’s second largest shareholder, with a 17.9% stake, while Medison and Sphera Global Health Care are also investors, having participated in its $150m series C round in August.

Synthetic DNA producer Twist Bioscience has filed to raise up to $86.3m in an initial public offering on the Nasdaq Global Market.


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