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Big Ones
Online student answer and livestreamed education provider Zuoyebang was spun off by Baidu and has since received $585m in venture funding. Like many online education platforms however, it has seen a big uptick in business during China’s coronavirus lockdown, and is in talks to raise between $600m and $800m. The round would reportedly value Zuoyebangat $6.5bn pre-money, more than doubling the valuation at which it last raised money two years ago.
Novo has agreed to acquire Corvidia, developer of a phase 2b-stage treatment for chronic kidney disease, for an initial $725m that could potentially rise to $2.1bn if every milestone is reached post-purchase. That’s a hefty chunk of change, not least since Corvidia had disclosed just $86m in funding (not including a seed investment by VC firm Sofinnova Partners). Investors set to exit it include AstraZeneca and Fresenius Medical Care.
US-based social media company Facebook has begun setting up a corporate venture capital unit, Axios reported yesterday, citing a job listing posted by the firm. The prospective employee will be head of investments at Facebook’s New Product Experimentation (NPE) subsidiary, which it formed to launch consumer-focused apps. The post has since been deleted but it stated: “In this role, you will manage a multimillion-dollar fund that invests in leading private companies alongside top venture capital firms and angel investors. You will develop investment and impact theses, lead the execution of new investments and support existing portfolio companies as needed.” The fund will be partially managed by Shabih Rizvi, who spent two years as founding partner at internet technology provider Google’s artificial intelligence fund, Gradient Ventures, before moving to a business development role at Google in April 2019. A source familiar with the plans told Axios that Facebook is pursuing investments as a method of keeping track with emerging technologies, rather than operating what they termed as a general purpose fund. It will make small investments in early-stage companies.
In crossover news, it’s an exit this time. Fusion Pharmaceuticals, a Canada-based cancer radiopharmaceuticals developer spun out of McMaster University, has filed for a $100m initial public offering on the Nasdaq Global Market. The spinout’s lead asset is undergoing phase 1 studies in an injected form for advanced, refractory solid tumours. Fusion said in its prospectus it had been forced to pause further recruitment as the pandemic led to clinical trial sites to be closed. It has administered the drug to 12 patients to date, out of a planned 30. Fusion most recently secured nearly $112m in a series B round closed this month featuring Fight Against Cancer Innovation Trust, a commercialisation unit backed by Ontario Institute for Cancer Research and the province of Ontario, oncology technology provider Varian Medical Systems, Johnson & Johnson Innovation, and others. Varian and Johnson & Johnson Innovation – JJDC had already backed a $46m series A in 2017.
Deals
Many over the years have questioned the business model of grocery delivery app Instacart but the coronavirus stay-in-place restrictions have vindicated it somewhat and it has been hiring like crazy in recent months to meet demand. It has also now raised more money, taking in $225m through a round co-led by DST Global and General Catalyst that hiked its valuation from about $7.9bn to $13.7bn. Its earlier investors include Comcast, American Express and Whole Foods, the latter since consumed by Amazon.
Although it also delivers groceries, DoorDash’s focus is on on-demand food delivery from restaurants, and it is reportedly seeking hundreds of millions of dollars in a forthcoming round set to value it at more than $15bn pre-money. Like Instacart, which faced strike action over safety precautions a few months back, Verizon-backed DoorDash has also encountered scrutiny over business practices that allegedly include taking tip money intended for staff and fees some restaurants see as exorbitant. But it doesn’t seem to have had an effect yet.
The coronavirus lockdowns have given a big shot in the arm to companies operating in the online grocery industry, be it Instacart or Tongcheng Life, a China-based spinoff of travel services provider LY.com that operates a group buying service focused on fresh produce. The company has just raised $200m in a series C round led by social video platform Joyy that included Bertelsmann Asia Investments and Legend Capital, both of which took part in its $100m series B nine months ago.
Unacademy is among the online learning platforms to have seen activity shoot up as students have to stay home, and it is reportedly seeking up to $150m in funding to cover expansion. It raised $110m from investors including Facebook as recently as February but is said to be looking to double its $510m post-money valuation for the next round. The possible investors include Tencent, which has built a stable of edtech portfolio companies in its home country of China.
The uptick in e-commerce activity also has a knock-on effect for surrounding technologies. Anti-fraud software provider NS8 has completed a $123m series A round co-led by Axa Venture Partners and will allocate the funding to international expansion and product development. That’s a big haul for a series A and it comes after a year when NS8 quadrupled the size of its team from 50 to 200.
DNAnexus, the Stanford University spinout that has built a healthcare data software platform, has meanwhile raised $100m from investors including GV and Regeneron Pharmaceuticals. The round boosted the total raised by DNAnexus to more than $270m, its earlier investors including Microsoft and WuXi NextCode.
Cue Health specialises in molecular testing devices for both home and professional use, and has pulled in $100m through a series C round featuring Johnson & Johnson Innovation – JJDC. The company has now raised at least $169m altogether, and JJDC participated in the latest round having contributed to its 2018 round alongside another corporate VC unit, Dentsu Ventures.
Contract biopharmaceutical development and manufacturing services provider MabPlex has raised approximately $70.7m in series B funding from investors including Sunshine Insurance Group. The round, co-led by DT Capital Partners and Huajin Capital, comes in the wake of $59.1m in a series A round closed early last year.
Nano-X Imaging, developer of an advanced body scanner that is smaller and cheaper than established alternatives, has added $20m from SK Telecom to a series B round that now stands at $51m. The telecommunications firm had already put up $5m for the round before joining investors including Foxconn and Fujifilm in a $26m tranche in January.
Funds
Theodorus, the university venture arm of Université libre de Bruxelles (ULB), has increased the size of its fourth fund to €42m ($47.3m) following commitments from pension fund manager Caisse de dépôt et placement du Québec (CDPQ) and Belgian government-owned investment firm SFPI-FPIM. CDPQ supplied $3.9m through investment fund TFAQ2019, managed by Teralys Capital, while SFPI-FPIM injected $560,000, adding to a $5m it had already provided previously. Theordous IV will invest $18m in Canada-based and another $29.3m in Belgium-based spinouts over the next five years, aiming to bridge the two countries’ ecosystems. It will provide between $563,000 and $3.4m per spinout, targeting a 20-strong portfolio.
Exits
Cancer treatment developer Legend Biotech floated just over a week ago and has already closed the offering having raised about $487m. It was spun off by Genscript Biotech, which bought a further $23m of shares in the offering which have increased in value by more than 70% since the flotation. Legend’s other investors include Lilly Asia Ventures and Johnson & Johnson Innovation – JJDC.
Conventional wisdom said just a couple of months back that pursuing an initial public offering in the wake of the massive market drops in the spring would be futile, but several life sciences companies have proven otherwise, in many cases floating at the top or above their range, and now online car retail platform Vroom has followed suit. The AutoNation-backed company has gone public in a $468m IPO, having increased the number of shares and floating above an upscaled range. The offering may well reach $538m before it formally closes.
The Vroom offering, together with that of business data provider ZoomInfo, is set to open the floodgates in the IPO markets. Even Airbnb – which has been hit harder than almost anyone in recent months – is reportedly considering moving forward with its flotation, but Lemonade is significantly ahead. The digital insurance provider, valued at $2bn+ as of April, has filed for an offering with a $100m placeholder target that will almost certainly rise. It has received about $480m in funding from investors including SoftBank, Allianz, XL Innovate and GV since being founded.
One of the larger upcoming IPOs will be Snowflake, a cloud data software provider backed by Salesforce Ventures and Capital One Ventures that has reportedly filed confidentially to go public. Snowflake has pulled in some $1.3bn in funding and was valued at $12.4bn when it last raised money, in February. To put things in perspective, the FT reports that bankers have told the company it could float at valuation between $15bn and $20bn.
“Funky Chunk” Kevin MacLeod (incompetech.com)
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