Tag: Klarna

14 June 2021 – Cambridge Launches Deeptech Labs

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The Big Ones

1

There is a lot happening in Cambridge, England. The university might have passed its 800th anniversary earlier in this century but the basics of its operating model to bring the smartest people in the world together to solve its hardest challenges remains intact.

The latest advances include the launch and first cohort for Deeptech Labs (DTL), a new post-seed accelerator aimed at deep technology startups, Honeywell’s quantum computing division’s merger and up to $300m investment in Cambridge Quantum Computing and the potential acquisition of local tech champion Arm by US-based artificial intelligence (AI) chip maker Nvidia following the blow-out flotation of cybersecurity champion Darktrace.

DTL is backed by Arm and the University of Cambridge as well as venture capital firm Cambridge Innovation Capital (CIC, the “unicorn factory” at the heart of the city), its chairman Ewan Kirk (founder of hedge fund Cantab Capital Partners), and local industrial conglomerate Marshall’s corporate angel fund, Martlet Capital.

Its inaugural cohort that runs to a demo day on 18 June it has made investments in five machine learning and data science companies: AutoFill, BKwai, Circuit Mind, Contilio and Mindtech.

Zara Riahi, CEO and co-founder of Contilio, said “We are building the world’s first 3D AI analytics platform used by global construction companies and asset owners. To accelerate the next phase of our growth, we were looking for a scaling partner that understood deeptech and had access to the best advisers, deeptech investors, and global operators. The people who have been in the trenches. We are delighted to have found an amazing one in Deeptech Labs.”

These startups receive £350,000 (about $500,000) and a structured three-month development programme, including mentors from Arm, CSR, Imagination Technologies, Analysis, Active Hotels, Arieso, Blinkx, Cloudamize, Focal Point, Riverlane and Ubisense. Its second cohort will start in September and include a delegation of investors from the GCV Symposium being held on 3-4 November.

Miles Kirby, CEO of DTL, who has also been inventor and holder of more than 30 patents and former founder of Allianz-backed AV8 Ventures as well as European managing director of Qualcomm Ventures, said: “This ambitious, new 13-week seed to series A programme is designed to enable deeptech startups to leverage the best minds in this space.”

Andrew Williamson, the managing partner at CIC, added: “Cambridge is one of the best places in the world to build a deeptech business, with access to best-in-class talents, exceptional intellectual property, and experienced entrepreneurs and investors. Deeptech Labs enables a new generation of entrepreneurs to access this ecosystem. As a cofounder, CIC has been delighted to support Miles and his team in shaping the vision. This is a very high quality first cohort and we look forward to working with them in the future and supporting their growth.”

Adam Bastin, vice-president of corporate development at Arm, said: “From Arm’s earliest days in a barn just outside the city, to its position as a global technology leader headquartered here today, Cambridge has remained a critical hub of talent, creativity and innovation. In co-founding Deeptech Labs, we are pleased to support the next generation of game-changing technology companies by helping them to access the world-class Cambridge technology ecosystem.”

2

Tim Haines, managing partner of Abingworth, a biotech venture-capital firm, in the latest Economist said we were in “the golden age of diagnostics”.

What that really seems to mean it is faster and easier than ever before for groups such as Roche and Merck to test and design treatments using genetics and epigenetics. This is leading to more personalised care rather than blockbuster drugs applicable to the masses.

The model works if the insights derived and results delivered can be more profitable, which likely means targeting rich people’s problems and delivering their longevity escape velocity where their life expectancy increases by more than a year for each year they live.

Severin Schwan, Roche’s seventh CEO in 125 years, in an interview with the Economist talked about the “insights” business as a third pillar for Roche—as big, if not bigger, than diagnostics and pharma.

Beyond the social inequality and impact on social services, it also opens up healthcare to consumer-facing technology companies.

As the Economist noted, Roche’s insights business was effectively formed through its acquisitions of Foundation Medicine, a gene-sequencing company that can identify cancers from DNA in blood samples, and Flatiron Health, a specialist in cancer-related health records that generates data on patients from the real world, supplementing clinical trials. Roche valued Flatiron at $2.15bn in its 2018 purchase and closed out the purchaseof the remaining minority shares in Foundation the same year at a $5.3bn valuation.

Both Foundation and Flatiron were backed by GV, formerly known as Google Ventures and a corporate venturing unit for US-listed Alphabet.

GV has made much of its name and returns over the past decade from a string of life sciences and healthcare deals and exits but Carole Nuechterlein, head of Roche Venture Fund at the drugs group’s headquarters in Switzerland, takes much of the credit for the handling of these deals.

Roche had been shareholder in both Flatiron and Foundation before taking control but leaving much autonomy with both groups.

This is the model Roche followed with its $47bn purchase of Genentech back in 2009. As probably the founding biotech – a then-young VC firm in Kleiner Perkins had its partner Bob Swanson close a seed deal over a beer with lead scientist Herb Boyer – Genentech listed in 1980 before eventually falling to Roche and bringing its blockbuster drugs to the Swiss group for greater distribution and up to $21bn in annual sales a decade later.

Now celebrating 20 years running Roche Ventures, Nuechterlein – a prior GCV Powerlist award winner – has seen it all before.

But never at such scale. It is actually a golden age for healthcare not just diagnostics as the century for biology is now firmly underway.

The next GCV Powerlist will be announced on 21 July thanks to partner Dentons as part of the GCV Digital Forum and my thanks to the Global Healthcare Council for its work on the latest quarterly report out next week.

Fund

Alibaba Cloud floats $1bn investment scheme

Fortune VC smiles on $858m first close

Asset manager Alantra has reached the first close at more than €80m ($97m) for its Klima Energy Transition Fund including commitments from Enagás, a Spain-based gas grid operator.

Uncle Nearest drinks to $50m investment vehicle

Coupa creates $50m corporate venturing fund

Recorded Future, a US-based threat intelligence company previously backed by corporate venturing unit REV Venture Partners over the past six years, has set up a $20m fund for early-stage startups.

Recorded Future’s Intelligence Fund will back seed and series A rounds, with its first deals including SecurityTrails and Gemini Advisory.

United Airlines, a US-based flight operator, has started its corporate venturing unit.
United Airlines Ventures will focus on sustainability concepts that support the company’s goal of net-zero emissions by 2050, as well as other travel-related startups.

Michael Leskinen, United’s vice-president of corporate development and investor relations, will oversee the venture unit as president and incorporate its initial investments in Archer Aviation, Clear and Fulcrum BioEnergy.

Rapyd, a UK-based payments company that earlier in the year closed a $300m round, has set up a corporate venturing unit to invest in early-stage fintech startups.

Rapyd Ventures said its first investment would be in the seed round for Gotrade, a fractional stock trading platform that enables users in over 150 countries to invest in US shares.

Exit

Didi begins IPO proceedings in the US

MissFresh to pay visit to public markets

Monday.com meets Salesforce and Zoom amid $574m IPO

Wallbox opens to $1.5bn reverse merger

1stdibs dives into $115m IPO

Ciox and Datavant converge in $7bn deal

Sinch sets out $1.3bn MessageMedia acquisition

Dave banks on $4bn reverse merger

One Medical eyes $2.1bn Iora acquisition

Marqeta gets to market in $1.2bn IPO

Dingdong Maicai bids for public markets spot

Clear makes space for initial public offering

Babylon agrees $4.2bn reverse merger

Xometry looks to assemble IPO
CVRx looks to pump $75m out of IPO

University

Metacon makes Helbio its own

Deals

Northvolt plugs into $2.75bn

Nubank cashes $750m in series G extension

Klarna claws in $639m

Chubby Bear gets its paws on $400m

Investors entrust Trulioo with $394m

Ledger leaps to $380m series C

Hesai gets handed $300m

ApplyBoard recruits investors for $230m round

Dingdang gets $220m funding delivery

Eightfold AI employs SoftBank for $220m series E

Scalable Capital secures $183m

Monogram Health identifies Humana for $160m round

Verbit eyes public listing amid $157m series D

LetsGetChecked executes $150m series D

Lilly helps inject $108m into Synthekine

MatchMove meets $100m funding

Embroker embraces $100m series C

EcoFlow stores $100m in series B round

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

15 March 2021 – $1.9bn for Cold Chain Services Provider Lineage Logistics

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The Big Ones

One element of retail that has emerged unscathed from the covid-19 pandemic is food, and Lineage Logistics is among the biggest cold chain services providers in the world, offering temperature-controlled delivery and storage. It has also raised $1.9bn from investors including property developer Oxford Properties and several real estate investment firms. The equity funding was secured together with a $2.8bn revolving credit facility and term loan.

As the Dow hits record highs the IPO market shows no sign of slowing, and increasing numbers of international tech companies are flowing to US markets. South Korea-headquartered online marketplace Coupang is the latest to take that option and is floating on the New York Stock Exchange in a $4.55bn offering, the year’s biggest so far. SoftBank Vision Fund owned more than 39% of its class A shares pre-IPO, having committed a total of $3bn in funding.

AstraZeneca formed the $1bn Healthcare Industrial Fund in partnership with China International Capital Corporation in late 2019, and now the pharmaceutical firm is teaming up with the investment bank’s CICC Capital unit to establish a $338m vehicle called Wuxi AstraZeneca CICC Investment. AstraZeneca already runs a life science incubator in the Chinese city of Wuxi, and the fund will invest in areas such as innovative therapeutics, medical devices, diagnostics technology and AI healthcare technology.

Crossover

IonQ, a US-based quantum computing technology developer exploiting University of Maryland and Duke University research, has agreed to list through a reverse takeover. The company is merging with a SPAC called dMY Technology Group, which had floated on the New York Stock Exchange in a $275m IPO in November 2020. The combined business will have a pro forma implied valuation of $2bn and the transaction will be supported by $350m in PIPE financing from investors including Hyundai Motor Company, its Kia subsidiary and GV, among others. IonQ has created a 32-qubit quantum computer it claims is the world’s most powerful quantum system. It had disclosed a total of $77m in funding as of a $55m round co-led by consumer electronics producer Samsung’s Catalyst Fund in late 2019, when Osage University Partners also invested (do check out our sister podcast Talking Tech Transfer, which you can find on GlobalUniversityVenturing.com, for an interview with Osage’s Kirsten Leute about more on their investment strategy).

Deals

China-based e-commerce group JD.com has spun off several subsidiaries in recent years covering areas such as finance, healthcare and logistics. Now its infrastructure investment arm, JD Property, has agreed to raise $700m in a series A round co-led by Warburg Pincus and Hillhouse Capital, according to its 2020 end-of-year results. The other investors were not disclosed but it has partnered sovereign wealth funds GIC and Mubadala on infrastructure funds.

Starling Bank is the latest digital bank to pull in a nine-figure amount of funding, taking $377m in a series D round valuing it above $1.5bn pre-money. Starling, which counts JTC Group among its investors, is one of several well-funded neobanks to spring up in the UK in recent years, including Revolut and Monzo, though the sector is still a long way away from proving profitable, and despite the current fintech boom, it’s going to be interesting to see if they can maintain their growth.

Crypto asset manager BlockFi has completed a $350m series D round valuing it at $3bn, with Hudson River Trading and Susquehanna Government Products among the participants. Its existing investors include Akuna Capital, SoFi and corporate venturing vehicles Consensys Ventures, CMT Digital, Recruit Strategic Partners and SCB 10X.

Valo Health is less than two years old but has just closed an upsized series B round at $300m following a $110m investment by Koch Disruptive Technologies. Valo is one of a new wave of startups allocating machine learning to the drug development process, a wave increasingly looking like it could become the dominant force in the early-stage pharmaceutical sector. It is initially targeting cancer and neurodegenerative and cardiovascular diseases.

Snyk has secured $300m in a series E round consisting of primary and secondary investments, with GV, Atlassian Ventures and Salesforce Ventures all contributing. The app cybersecurity technology provider said it has now raised $470m in primary funding altogether, and the round valued it at $4.7bn post-money. That’s a 47-times increase from the valuation at which GV first invested.

Salesforce Ventures also took part in a $170m series C round for Flutterwave, the developer of a cross-border payment platform, valuing it above $1bn. It’s the latest sign of an ongoing surge in fintech, and the company’s earlier backers include Mastercard, Visa and FIS. It will allocate the funding to product development and customer acquisition.

Funds

Ascension Ventures was set up by health system Ascension two decades ago and now the venture capital firm has closed its fifth fund with $285m in capital supplied by 13 healthcare providers: Ascension itself, as well as AdventHealth, Carle Foundation, CentraCare, Children’s Medical Center of Dallas, Intermountain Healthcare, Novant Health, OhioHealth, OSF HealthCare, Luminis Health, Sentara Healthcare and Texas Health Resources. There is also an unnamed health system among the LPs. Ascension Ventures has invested in nearly 80 companies to date and now has more than $1bn in assets under management.

Exits

Game development platform operator Roblox has executed a direct listing on the New York Stock Exchange that gave Tencent and Warner Music Group (WMG) the chance to sell shares. The direct listing model means there wasn’t an official price for the shares, but the NYSE has issued a guidance price of $45 each, the same price at which Roblox secured $520m in a WMG-backed round in January valuing it at $29.5bn, a sevenfold increase in under a year. As we’re recording this on Friday afternoon UK time, shares are trading at $69.51, which is a slight drop on the $73.90 peak they’d briefly reached on Thursday.

Hippo Enterprises, the online home insurance provider backed by Comcast, Lennar, MS&AD, Munich Re and Standard Industries, is the latest company to seek the Spac route, agreeing to a reverse merger with Reinvent Technology Partners Z. Lennar is among the investors to put $550m of PIPE financing into Hippo, which will come out with $1.2bn in capital once the deal closes. It will list on NYSE and is expected to have a valuation of $5bn, and the money should help Hippo reach its goal of being available for 95% of the US population by the end of the year.

Olo has developed software that helps restaurants manage online orders, and has moved into profit in the past year as a string of US chains have used its platform to deal with increased online orders during the Covid-19 pandemic. The PayPal-backed company seems to have chosen the right time to go public, and has set terms for an initial public offering that will net $324m if it floats at the top of its range. It’s worth mentioning too that Olo has disclosed less than $65m of primary funding pre-IPO.

Coursera, the online education provider spun out of Stanford University and backed by Caltech, University of Pennsylvania, Seek Group, Laureate Education and Times Internet, is going for the traditional IPO exit instead. The spinout is yet to set any terms, having put the customary $100m placeholder figure into its draft prospectus, but it has collected some $443m in funding to date. None of the corporates or universities own more than 5% ahead of the offering and instead Coursera’s largest shareholder is NEA with an 18.3% stake.

Axonius, developer of a cybersecurity asset management platform, has only just achieved unicorn status, raising $100m last week at a $1.2bn valuation. That has proven the ticket for YL Ventures, a venture firm that has been an investor since seed stage, to divest a $270m stake to buyers including the Deutsche Telekom-backed DTCP. Axonius had raised nearly $200m in primary funding without taking any corporate investment.

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

08 March 2021 – Klarna Raises $1bn

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The Big Ones

E-commerce instalment finance provider Klarna is riding the fintech wave, having raised $1bn in financing from undisclosed new and existing investors in a round that almost tripled its valuation from $10.7bn to $31bn. Visa, Ant Group, Bonnier, Commonwealth Bank of Australia and Bestseller Group are among the company’s existing backers, and the funding came just six months after Klarna’s previous round.

Singapore-headquartered mobile game, e-commerce and financial services group Sea went public in an $884m initial public offering four years ago, and has decided to allocate $1bn to a corporate venturing vehicle called Sea Capital to boost its ecosystem. The formation of Sea Capital was fuelled by the company’s acquisition of investment manager Composite Capital Management, whose founder David Ma will run the unit on Sea’s behalf.

Oscar Health has gone public in an upsized $1.44bn initial public offering, with the shares priced comfortably above the range it had set for the IPO. The digital health insurer had raised nearly $1.7bn from investors including Alphabet and Ping An pre-IPO, and if the underwriters take up the chance to buy more shares through the over-allotment option the offering could reach roughly the same size.

Crossover

Century Therapeutics, a US-based immuno-oncology therapy developer based on research at Harvard and Stanford universities, has completed a $160m series C round led by Casdin Capital. Leaps by Bayer, the corporate venturing arm of pharmaceutical and chemical group Bayer, also contributed to the round, as did financial services and investment group Fidelity Management and Research and sovereign wealth fund Qatar Investment Authority. Venture capital firm Versant Ventures, which incubated the startup based on Harvard and Stanford work, also took part in the round, as did a host of others. Century is working on drugs using induced pluripotent stem cell (iPSC) technology, which is derived from adult human cells, to develop haematologic and solid tumour cancer treatments.

Deals

Virtual events platform Hopin may have had the fastest immediate growth of any startup in recent times, having just closed its fourth round in 13 months, securing $400m from investors including Salesforce Ventures at a $5.65bn valuation. That figure is near triple the $2.15bn valuation at which it last raised money, in a November series B round that also featured Salesforce Ventures. Its earlier backers include fellow corporate venturing units Slack Fund and Amaranthine Fun.

Instacart has had one of the biggest years in memory for a private VC-backed company, and has now received $265m from existing investors at a $39bn post-money valuation. That’s more than double the $17.7bn at which the Comcast, American Express and Amazon-backed grocery delivery service last raised money, five months ago, and nearly three times that at which it closed the previous round, last July.

A lot of retail has moved online in recent months, and fashion resale platform developer Vestiaire Collective is among the beneficiaries. The company has just received $215m from investors including the Advance Publications-owned Condé Nast and luxury goods producer Kering, which acquired a 5% stake through the transaction. The capital will go to enhancing the company’s technology and data activities.

Humana and Echo Health Ventures have contributed to a $200m series D round for home healthcare provider DispatchHealth that valued it at $1.7bn. DispatchHealth operates in a sector that has seen increased growth in recent months as the coronavirus pandemic has led to home care becoming a more urgent option. The round pushed the company’s overall funding to $417m, its earlier investors including Optum Ventures as well as Echo Health Ventures and Humana.

Last-mile delivery service SiCepat Ekspres has bagged $170m in a series B round that included Telkom Indonesia’s MDI Ventures subsidiary. The round’s December first close valued SiCepat at approximately $736m and its existing backers include Barito Pacific’s Barito Teknologi vehicle in addition to Tokopedia.

Funds

Legend Capital was spun off by Legend Holdings as an independent venture firm but is still backed by its ex-parent. It is also one of the largest VC investors in China, and has launched its sixth renminbi-denominated fund with a target exceeding $1.5bn. It had raised $500m for the close of its most recent dollar fund, LC Fund VIII, late last year.

Crypto.com is joining the likes of fellow digital currency-focused companies Coinbase, Binance and Ripple by forming a corporate venturing unit, Crypto.com Capital, with $200m for it to spend. The unit will invest up to $3m to lead seed rounds and up to $10m for series As, and is targeting crypto technology developers. It is helmed by Crypto.com co-founder and head of corporate development Bobby Bao.

US-based insurance firm Massachusetts Mutual Life Insurance Company has established a $50m investment vehicle called MM Catalyst Fund that will fund companies with diverse founders in its home state of Massachusetts. The capital allocation partly consists of a $25m fund dubbed MMCF Growth which will provide equity and debt financing for Massachusetts-based businesses with black founders, owners or managers. The other half of the funding will go to MMCF Tech, a fund which will provide equity funding for technology developers based in Massachusetts but outside of state capital Boston.

Exits

Okta has agreed to acquire Auth0, a developer of application identity management technology, in an all-share deal that will value it at $6.5bn. That’s more than triple the valuation at which Auth0 last raised funding, in a July 2020 series F round led by Salesforce Ventures and backed by fellow corporate venturing vehicles DTCP and Telstra Ventures. Auth0 has secured a total of $333m since it was founded, from an investor base that also includes NTT Docomo Ventures.

Digital real estate brokerage Compass has meanwhile filed for a $500m initial public offering that could allow SoftBank and Advance Publications to exit. SoftBank Vision Fund is the company’s largest investor, with a 34.8% stake, having put up $250m for a $344m round Compass closed early last year at a reported $6.4bn valuation. Its earlier backers include media group Advance Publications and it has secured about $1.5bn in funding in total.

Manbang Group, the trucking services provider also known as Full Truck Alliance, was valued at almost $12bn in November when it raised $1.7bn in a round co-led by SoftBank Vision Fund. Now, the China-based company has confidentially filed to go public in the United States, with Tencent, Alphabet unit CapitalG and Baidu Capital also in line to exit. It’s going to be interesting to see if the election of Joe Biden, a less China-hostile president, will see a rebound from Chinese companies to US markets.

Doma, the real estate transaction software provider formerly known as States Title, has agreed to list through a reverse merger with special purpose acquisition company Capitol Investment Corp V at a $3bn enterprise value. The deal is supported by a $300m PIPE financing featuring SoftBank and property developer Lennar, the latter an existing investor in Doma. Its other backers include Assurant, Scor and HSCM Bermuda, all of which took part in its $120m series C round in May 2020.

Harvard University spinout Moderna has been one of the biggest success stories not just for spinouts but for corporate venture capital too in the last year, its share price rising sixfold on the strength of it being one of the first pharmaceutical companies to get a covid-19 vaccine approved. One of its pre-IPO investors was AstraZeneca, which provided $140m in equity funding and which has sold its stake for a price likely to have topped $1bn. That’s quite a return, and one that will support plans announced by the corporate in late 2019 to launch a $1bn fund.

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

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

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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

03 February 2020 – Corporate Venturing and Innovation Summit Roundup

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The Big News

The US government’s effort to change the regulatory landscape for venture capital is coming to a head with this week’s sold-out Global Corporate Venturing and Innovation Summit in California.

Investment banks could face more relaxed restrictions concerning investments in venture capital funds from the Federal Reserve and other watchdogs under proposals expected to be announced by the end of the month.

But as the US tightens its inward investment rules, its largest companies are expanding their venturing units internationally with Microsoft – the second largest by market capitalisation – setting up a new UK office in London under Matthew Goldstein, a GCV Rising Stars 2018 winner. For this year’s winners check outwww.globalcorporateventuring.com at 8pm PST today.

The top 100 Global Corporate Venturing Rising Stars and Emerging Leaders celebrated their awards at a gala ceremony at the Monterey Aquarium in California the night before the GCVI Summit started.

The winners were selected from almost 20,000 industry professionals tracked by Global Corporate Venturing and nominated by the heads of units and their peers.

In a keynote at the Summit, delivered as he became the new chairman of the GCV Leadership Society and in front of a sold-out audience of 800, Young Sohn, chief strategy officer at conglomerate Samsung, laid out the challenges he had faced changing the 50-year strategy that had helped the company become market leader in multiple industries as a fast follower, but which was having to evolve to maintain that position, while allowing it to remain agile enough to capture mega trends and new opportunities through multiple venturing and innovation strategies.

The second day of the Summit began with Kaloyan Andonov from GCV Analytics sharing insights gleaned from the World of Corporate Venturing annual data review and survey covering how the blurring of public and private capital markets is creating the investment trends for the new decade.

For the first time in 60 years the start of a western decade is coinciding with the start of the Chinese lunar cycle and the Year of the Rat: Happy new year to all the venture and innovation leaders in greater China and their work to support the entrepreneurs, and in making the world a better place.

Crossover Deals

Downturn? What downturn? – GUV’s annual review shows the ecosystem is in outstanding shape despite all the doom and gloom in many financial papers.

EPFL spinouts raise $292m – The university formed 23 new spinouts in 2019, while a total of 33 companies secured a combined $292m: an amount only beaten by 2016’s record $408m.

Deals

Although ride hailing and bicycle rental services are a long way from profit, that hasn’t dissuaded investors from backing the electric scooter and bike rental sector. Bird has boosted its series D round to $350m, adding $75m in a second tranche co-led by Sequoia Capital and CDPQ.

SoftBank Vision Fund is putting up $250m to lead a series D round for online pharmacy Alto that will reportedly value it at more than $1bn. The funding is set to be formally disclosed next week, and although no precise size has been revealed for the round, it will include existing backers Greenoaks Capital and Jackson Square Ventures, sources told Reuters. Alto had previously raised at least $107m in funding.

AlphaCredit is another of SoftBank’s investments last week, having agreed to raise $125m in a series B round led by the corporate’s $5bn Latin America fund. The company runs an online lending platform that has issued $1bn in loans to customers in Mexico and Colombia, and it joins a stable that includes LatAm unicorns QuintoAndar and Rappi.

Commonwealth Bank comes back to Klarna with $200m – The payment and shopping app developer has launched in Australia with the help of Commonwealth Bank of Australia, which raised its stake to 5.5%.

Policygenius pops with $100m series D – Corporate units Axa Venture Partners, MassMutual Ventures and Transamerica Ventures all returned for a round that nearly trebled the insurance marketplace’s overall funding.

ActiveCampaign has raised $100m in a series B round led by Susquehanna Growth Equity that is only the second to be announced by the company in 17 years. By coincidence, the deal was announced on the same day as another customer experience automation platform, Directly, but in this case it seems ActiveCampaign’s own greater experience was likely a deciding point in that size differential.

Funds

Innovation Growth Ventures, the joint investment venture between Sony and brokerage Daiwa Securities, has raised $145m for its second close, on the way to a targeted final close of $185m. The vehicle was launched six months ago and has so far disclosed two deals.

Conglomerate JSW Group is targeting $49m for the final close of the second fund to be raised by its corporate venture capital arm, JSW Ventures. The unit is sponsored by JSW but is taking in capital from family offices and individual investors, and is preparing to reach a second close next month that is expected to be around the $21m mark.

OCBC NISP gets authorisation for $29m fund – The bank has received regulatory approval for a venture capital fund that can be sized at more than $29m but which will reportedly begin with $15m.

Info Edge ventures into $14m fund – The classified listings operator, whose earlier investments include Zomato and ETechAces, has formed its first dedicated corporate venture capital fund.

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

12 August 2019 – Didi Chuxing Spins Off Autonomous Driving Division

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Big Ones

SoftBank Vision Fund recently announced that it has secured memoranda of understanding for $108bn in capital for its second investment vehicle, and SoftBank CEO Masayoshi Son has now said it will begin investing as soon as next month.

Didi Chuxing is spinning off its autonomous driving division and will likely seek funding at a multi-billion-dollar valuation. The ride hailing service has raised more than $18bn in debt and equity financing but is keen to gain external investors for a part of the company that may prove invaluable in future, but which is a cash drain right now.

Pharmaceutical and chemical producer Bayer acquired US-based stem cell treatment developer and portfolio company BlueRock Therapeutics in a deal that could value it at up to $1bn. The terms of the transaction involve Bayer paying a total of up to $600m to acquire the shares in BlueRock it did not already own, investing $240m upfront that will be followed by preclinical and clinical milestone payments that could reach $360m.

In this week’s GCV and GUV crossover news, the biggest deal was a $70m series B round for HawkEye 360, a US-based radio-frequency data satellite developer based on Virginia Tech research. The round included commercialisation firm Allied Minds (Hawkeye’s parent company) as well as aerospace manufacturer Airbus and mapping software developer Esri.

Deals

FlixMobility, a Germany-based travel services provider backed by carmaker Daimler, has added a “substantial” amount of funding to its series F round, which attracted $561m last month. The additional funding, seemingly worth hundreds of millions of dollars, was supplied by Baillie Gifford, Luxor Capital, Odyssey 44 and certain funds managed by BlackRock.

Tencent invested $350m in Kuaishou in early 2017 at a reported $2.5bn valuation, and as the short-form video sector has grown as a whole, the company has expanded its presence to the point it now has some 200 million daily active users.

E-commerce payment services provider Klarna has raised $460m from investors including new strategic partner Commonwealth Bank of Australia at a $5.5bn post-money valuation.

Existing backer SoftBank has invested a further $200m in endpoint cybersecurity software provider Cybereason together with several undisclosed affiliates, at a reported $900m valuation.

Online business finance marketplace C2FO has pulled in $200m in a round led by SoftBank Vision Fund that, according to Bloomberg, also featured existing backer Allianz X. The round roughly doubled the company’s overall funding to about $400m and it will put the money toward boosting international growth.

Wickedride Adventure Services, the owner of India-based electric vehicle rental service Bounce backed by mobile chipmaker Qualcomm, is raising $200m in fresh funding. Bounce has already received an initial $120m, people familiar with the matter told TechCircle.

Automotive e-commerce marketplace CarDekho has added $19m from investors including Emtek subsidiary Kreatif Media Karya to a series C round that has reached $129m. CapitalG, Dentsu, Bennett, Coleman & Co and Axis Bank contributed to the round’s earlier tranches, and the funding was reportedly secured at a $500m valuation.

Keyless lock technology provider Latch has also beefed up its latest round, closing a series B at $126m. RxR Realty, Tishman Speyer and the Berman Enterprises-backed Camber Creek all participated in the round, which was pumped up with a $56m second tranche.

Rakuten has increased its stake in cancer therapy developer Rakuten Medical to more than 22% with a $100m investment made in the shape of a series C-1 round. The e-commerce firm had joined SBI Group for the $284m series C the company closed in December, back when it was still known as Rakuten Aspyrian (and a while after it was founded as Aspyrian Therapeutics).

Rakuten Ventures has contributed to a $93.9m round for Japanese digital marketing software provider From Scratch that also featured Link and Motivation and Japan Post Investment. The unit has been an investor in From Scratch since its 2017 series C round, and the company’s other backers include Dentsu Digital Holdings and Itochu Technology Ventures.

Ibotta, the creator of a rewards app that gives consumers money back on selected purchases, has secured an undisclosed amount in a series D round that hiked its valuation to $1bn. Koch Disruptive Technologies led the round, which followed about $95m of earlier funding, and which will support an expansion of Ibotta’s Denver headquarters as it prepares to increase recruitment.

Funds

American Family Ventures, the corporate venture capital arm of US-based insurance firm American Family, has raised more than $162m for a venture capital fund, according to a securities filing. The fund, dubbed AmFam VC Fund III LP, has taken in $162.5m from four investors and has set a $200m target for its close.

Exits

Delivery services provider Glovo has raised at least $340m in funding from investors including AmRest, Drake, Delivery Hero and Rakuten, and was reportedly valued at $950m in its last round. It has also begun discussions to raise money from – guess who – SoftBank, and is in talks with Uber and Deliveroo who have approached the company over a possible acquisition.

And here’s an exit… from an exit. Rapt Therapeutics, a US-based small molecule drug developer backed by internet and technology conglomerate Alphabet and pharmaceutical firm Celgene, has postponed its initial public offering without offering a new timeline. The company set its price range at $14 to $16 two weeks ago and hoped to issue 5 million shares on the Nasdaq Global Market to raise between $70m and $80m. Rapt is working on small molecule drugs that it hopes will boost a patient’s immune response to cancer and inflammatory conditions.

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