01 June 2020 – UBS Groups Prepares for Fintech Investments

The Big Ones

1

Switzerland-based bank UBS Group is setting aside hundreds of millions of dollars of its money to invest in financial technology companies, according to Bloomberg.

UBS hired Erasmus Elsner for its venture capital and growth equity unit last month but is reportedly still recruiting staff for a dedicated corporate venture capital (CVC) team. It is planning a corporate VC fund to make investments between $10m and $20m in dozens of companies targeting bank/client engagement, investing and financing platforms and the improvement of the bank’s underlying operations, a source told Bloomberg.

Mike Dargan, UBS’s Global Head Group Technology, said: “UBS wants to further engage with and support fintech firms. The new venture investment portfolio is a next step to accelerate our innovation and digitisation efforts.”

2

It’s a scary-enough headline, ‘Huawei Banned, So Let’s Invade Taiwan to Take TSMC?’, in reaction to the strict set of rules announced by the US government on May 15 in a bid to cut the China-based 5G and telecoms equipment maker off from the global semiconductor ecosystem.

In its subsequent report, “US strategic approach to the People’s Republic of China,” published on the 20th, the US said: “The administration is implementing the Foreign Investment Risk Review Modernization Act to update and strengthen the capacity of the Committee on Foreign Investment in the United States (CFIUS) to address growing national security concerns over foreign exploitation of investment structures, which previously fell outside CFIUS jurisdiction.

“This includes preventing Chinese companies from exploiting access to US innovation through minority investments in order to modernise the Chinese military. The US has updated its export control regulations, particularly in light of Beijing’s whole-of-society strategy and its efforts to acquire advanced technologies related to hypersonics, quantum computing, artificial intelligence, biotechnology and other emerging and foundational technologies. We are also engaging allies and partners to develop their own foreign investment screening mechanisms, and to update and implement export controls collaboratively through multilateral regimes and other forums….

“Domestically, the Administration is taking steps to strengthen the US economy and promote economic sectors of the future, such as 5G technology, through tax reforms and a robust deregulatory agenda. The President’s ‘Executive Order on Maintaining American Leadership in Artificial Intelligence’ is an example of a US government initiative to promote investment and collaboration to ensure the US continues to lead in innovation and setting standards for a growing industry.”

But the horse might have bolted. The ChinaTalk article at the top suggests Huawei has done enough over the past few years to survive, stating: “The main issue is supporting Huawei in maintaining its dominant position in 5G and helping it continue to be able to supply the needs of 5G bases.

3

The US healthcare system has many virtues, but it is simply too expensive and hard for consumers to access care, according to insiders. Coastal Americans’ faith in their system has been shaken by the coronavirus and this has created opportunities for some. Jeff Bennett, CEO of startup Higi, is trying to tackle the issue and has received a fillip with a new round of funding.

UK-based personal healthcare provider Babylon has joined the ranks of new corporate venturers by leading the latest round for US-based health engagement technology developer Higi.

The round was reportedly $30m in size and Higi’s previous investors, 7Wire Ventures, Flare Capital Partners, Jumpstart Capital, Rush University Medical Center for Health and William Wrigley Jr, also took part. Higi raised $25.8m in 2018, according to a regulatory filing, from investors including Blue Cross Blue Shield-affiliated venture firm Sandbox Industries, though Sandbox has said it is now no longer an investor.

4

Similarly, money is flowing in other parts of healthcare and life sciences. The power of science fiction films retains its hold in inspiring inventors but the secret to corporate venturing and open innovation lies in retaining optionality.

Drawing on inspiration from Star Trek, Vaxxas, a Queensland University, Australia, spin-out, has developed technology which could mean vaccine delivery via needles and syringes could soon be a thing of the past.

The World Economic Forum named the company a Technology Pioneer in late 2014 and over the past decade the company has been working on a nanopatch, based on research at the university’s Australian Institute for Bioengineering and Nanotechnology, that delivers vaccines painlessly and more efficiently than syringes.

5

Cisco intends to purchase the network analytics software producer, which had raised more than $110m from investors including GV and Salesforce Ventures, for a reported $1bn.

Networking equipment manufacturer Cisco agreed yesterday to acquire ThousandEyes, a US-based network management software provider backed by internet and technology conglomerate Alphabet and enterprise software producer Salesforce.

The price was reported by Bloomberg as being approximately $1bn, a figure confirmed to CNBC by a person familiar with the matter. Cisco expects the transaction to close by the end of next month.

Founded in 2010, ThousandEyes provides cloud analytics software that collects data from a range of access points, such as data centres and consumer devices, to identify potential sources of disruption and ensure websites, applications and services are delivered optimally.

Deals

Genome sequencing technology developer MGI Tech has closed a $1bn series B round, four years after being formed as a subsidiary of genome research organisation BGI. The round, which follows a $200m series A a year ago, shows the potential value in spinning off valuable subsidiaries, and it follows a $265m round for another China-based spinoff, smart sensor and power semiconductor provider BYD Semiconductor (see yesterday).

Chinese online grocer MissFresh has seen business pick up sharply during the coronavirus lockdown and has accordingly raised funding at a reported $3bn pre-money valuation. The company’s existing backers include Tencent and Lenovo but the only new investor revealed in media reports is CICC Fund. Bloomberg reported in the last few days that it was set to raise roughly $500m.

SpaceX meanwhile goes from strength to strength, the spacecraft producer and launch services provider expanding its latest funding round to $346m and surpassing its original target of a $250m close. Elon Musk has got a lot of flack over the past few years, but it’s worth noting that Tesla’s shares are continuing to rise while Alphabet-backed SpaceX is still growing – to a $36bn+ valuation, if reports from earlier this year are accurate.

Electric carmaker BYD is preparing for a Hong Kong Stock Exchange listing and as part of a restructuring effort it is spinning off semiconductor and sensor subsidiary BYD Semiconductor with $265m in external funding. Sequoia Capital China, CICC Capital and SDIC Venture Capital are co-leading the round, which will value the subsidiary at more than $1.3bn. Originally known as BYD Microelectronic, it was formed in 2004.

Marqeta makes off with $150m

Insitro has created a machine learning-equipped drug discovery platform and has secured $143m in a series B round featuring WuXi AppTec’s Corporate Venture Fund, GV and Alexandria Venture Investments. GV had already contributed to the $100m in series A funding with which Insitro emerged from stealth in mid-2018, at a $1.05bn valuation.

Arvelle arcs to series A close

Pie Insurance picks out $127m

Bolt flashes on fresh funding

AbCellera has built an antibody drug discovery system and has secured $105m in a series B round featuring Eli Lilly, having signed a collaboration agreement with the pharmaceutical firm last week. In fact it’s been a great few weeks for Canada-based AbCellera, which got a commitment for up to $125m in financing from government agency Innovation, Science and Economic Development Canada at the start of this month.

Elsewhere in China, Xiaomi has invested almost $103m in power bank producer Zimi through a cash-and-stock deal that increased its stake in the company from 22.5% to 49.9%. Zimi was already part of the Xiaomi ecosystem, a strategic investment initiative intended to construct a network of companies producing Xiaomi-compatible products. That network reportedly now encompasses some 300 portfolio companies.

Mindstrong mines Optum for $100m series C

Oxford Nanopore expands latest round

CFS sees out $84m series A2 round

Exits

Sendo and Tiki test the waters for merger

Roche reaches for portfolio company Stratos

UA’s FreeFall Aerospace completes merger

Kintor Pharmaceutical has however successfully floated in Hong Kong, pricing its initial public offering at the top of the range to raise $240m. The IPO featured a $115m cornerstone investment by appliance maker Gree, which provided $89m, Highlight Capital and Foresight Fund. It was 500-times oversubscribed according to Kintor, which is developing prostate and breast cancer drugs, and which plans to now expand into hair loss treatment.

VeriSilicon vies for $111m in IPO

Avidity to invade public markets

Burning Rock files for $100m IPO

Pliant places IPO terms

Nanoform to shape $76.7m IPO

Funds

U-M taps Deerfield for Great Lakes Discoveries


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

17 December 2018 – Grab Reaches $2.85bn in Latest Round

Deals

Grab has boosted its latest round to $2.85bn, taking in $150m from Yamaha Motor through a strategic partnership agreement.

Indonesian online marketplace Tokopedia has confirmed it has secured $1.1bn in a round led by Alibaba and SoftBank Vision Fund, with contributions from SoftBank Ventures Korea and unnamed existing backers.

Facial recognition technology provider Megvii is set to raise $500m in a round that could be led by $200m from Bank of China Group Investment with a possible investment by existing backer Alibaba.

Zymergen raised $130m in a SoftBank-led round two years ago, and now SoftBank’s Vision Fund has returned to lead a $400m series C round for the molecular manufacturing technology provider that included Goldman Sachs, Hanwha Asset Management and several existing investors.

Naspers Ventures is leading a funding round for online education provider Byju’s that has reached $322m on its way to a $400m close.

Financial software provider Plaid has secured $250m in a series C round led by Kleiner Perkins and backed by Goldman Sachs, Andreessen Horowitz, NEA, Spark Capital and Index Ventures that valued it at $2.65bn.

Niantic, the augmented reality game developer best known for Pokémon Go, is close to raising $200m in funding from investors including Samsung and Axiomatic, the eSports company that’s becoming increasingly involved in corporate venturing.

Parking services and technology platform ParkJockey was reported the week before last to be closing in on a SoftBank-led round that could be sized between $800m and $1bn.

Automotive e-commerce platform Vroom has raised $146m in a series G round that was led by a $50m investment from brick-and-mortar car retail chain AutoNation.

Meiri Yitao was incubated as a social commerce-focused fresh produce offshoot of online grocer MissFresh, but has sped out of the blocks, following a $30m series A round in July with $100m in series B funding from investors including SIG Asia Investments.

Things have started to quieten down a bit on Global University Venturing ahead of the Christmas holidays but Genomics, a UK-based drug discovery engine developer spun out of University of Oxford, still managed to extend its series B round to $42m with the close of an oversubscribed second $10.2m tranche.

Funds

Bytedance closed its last round at a valuation of $75bn – enough to make it the world’s most valuable VC-backed private company – and it’s now looking to get into the corporate venturing game itself.

Alcoholic beverage provider Constellation Brands formed its corporate venturing unit three years ago and has now launched a $100m initiative called Focus on Female Founders that will invest in female-led portfolio companies.

On Global University Venturing, we had news that the UCL Technology Fund – co-managed by tech transfer office UCL Business and Albion Capital, is in the process of raising between $95m and $126m for a second vehicle (in the original currency of British pounds, the upper number is actually double that of the first fund – £100m compared with £50m).

Exits

Moderna has raised $604m in what’s reportedly the largest biotech IPO ever, increasing the number of shares in the offering by more than 4.5 million, and it has earmarked the proceeds for the further development of a pipeline that now has more than 20 mRNA therapy and vaccine candidates.

2018’s been quite a year for IPOs but it increasingly looks like next year could dwarf it as unicorn after unicorn moves their chips in place. The latest two to have made a step forward are Uber, which has confidentially filed for an offering some onlookers have suggested could value it at a staggering $120bn, and Slack, which has hired Goldman Sachs as lead underwriter for an IPO that could value it at $10bn.

Basis had big plans to create a stablecoin tied to the US dollar that would potentially be usable as a steady alternative in volatile countries, and raised $133m from investors including GV in April. But those plans have screeched to a halt and Basis announced yesterday it will instead wind down due to regulatory difficulties.


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

10 September 2018 – Used Vehicle Marketplace Souche Raises $578m

Deals

Used vehicle marketplace Souche has attracted $578m in series F capital from investors including Alibaba, Sunshine Insurance Group and CreditEase. The round has brought Souche’s total funding to more than $1.2bn, with Alibaba having also backed a $335m series E in November 2017 and Ant Financial having led a $100m series C in 2016.

Tencent has been an investor in MissFresh since its $10m series A round, and it has just co-led a $450m round for the online grocer that will fund the enhancement of the latter’s cold and supply chain resources and its smart retail technology.

Despite recent difficulties that have seen it significantly cut back on its international ambitions, bicycle rental platform Ofo is reportedly lining up hundreds of millions of dollars from investors including corporates Ant Financial and Didi Chuxing, both existing backers.

Fresh from setting up short-form video platform NewTV, media holding company WndrCo has led a $295m round for mobile VPN provider AnchorFree, its first for six years.

Colombia-based on-demand delivery services provider Rappi, backed by its peer Delivery Hero, has secured $200m from investors including DST Global, achieving unicorn status in the process.

IQiyi Sports, formed by iQiyi and Super Sports Media last month to control their respective sporting rights for streaming, has closed a $124m series A round that will be used to expand its offering.

Caffeine is developing what will be a smart broadcasting platform designed to be a more sociable version of livestreaming services like Twitch. 21st Century Fox is certainly interested and has pumped in $100m that will be divided between equity funding and support for a joint venture that will source high-grade content.

GreyOrange produces robotics systems for use in logistics, helping e-commerce orders to be picked out more quickly and efficiently. Mitsubishi and Flipkart have certainly taken notice, contributing to a $140m series C round that will help the Singapore-based company expand internationally. GreyOrange has now raised almost $180m altogether.

4D Molecular Therapeutics (4DMT), a US-based gene therapy spinout of UC Berkeley, has closed a $90m series B round featuring university venture fund Berkeley Catalyst Fund.

Funds

Saudi Aramco has run its own corporate venturing unit, Saudi Aramco Energy Ventures, since 2012 but sources have told the Wall Street Journal it is considering plans to put up to $1bn into a new fund that will make large-scale investments in technologies that complement its operations.

Insurance provider Aviva has put its weight behind the $129m Ahren Innovation Capital vehicle, a patient capital fund co-founded by eight scientists from the Cambridge, UK ecosystem.

Politecnico di Milano has unveiled a $70m university venture fund this week in partnership with venture capital firm 360 Capital Partners that will invest in the institution’s spinouts. Poli360 has attracted capital from Itatech, a $208m investment platform backed by the EU-owned European Investment Fund and Italian state-owned national promotional institution Cassa depositi e prestiti.

UC San Diego has unveiled the $65m Poseidon Innovation fund with the money coming from healthcare-focused investment firm Deerfield Management. Poseidon Innovation will push early-stage university drug research and follows similar initiatives that Deerfield launched with Vanderbilt, Johns Hopkins and Northwestern universities.

Exits

Reports of Meituan Dianping’s IPO plans surfaced last weekend, and now the local services platform has confirmed it plans to raise as much as $4.4bn at a valuation of up to $55bn – almost twice that at which it last raised funding in October.

Maoyan Weiying, the mobile ticketing platform backed by Tencent, Meituan Dianping and Enlight Media, is reportedly seeking up to $1bn in proceeds and has officially filed documents in Hong Kong.

Funding Circle, a UK-based peer-to-peer lender backed by Rocket Internet, unveiled plans to raise £300m ($385m) in an initial public offering.

Munich Re has acquired industrial internet-of-things technology provider Relayr, one of its existing portfolio companies, for $300m. The corporate bought the startup through its subsidiary Hartford Steam Boiler and Relayr will continue to operate as an independent business but with the added benefit of gaining access to Munich Re’s clientbase and expertise.

Thoma Bravo has agreed to buy a majority stake in CRM automation software provider Apttus for an undisclosed sum, in one of those uncommon cases of a private equity firm acquiring a VC-backed company.

Softgarden, a Germany-based human resources software spinout of Saarland University has been acquired by investment management company Investcorp Technology Partners for an undisclosed sum.


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