Tag: Monzo

07 December 2020 – Salesforce Announces $27.7bn Purchase of Slack

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The Big Ones

Electronics and appliance retailer Suning has spun off its online retail platform and e-commerce services activities into a newly formed business called Yunwang Wandian with approximately $913m in funding. The capital was provided by Shenzhen Capital Group, SenseRobot Management, Ningbo Xianshi Enterprise Management and Central China Asset Management at a reported $3.8bn valuation.

Carmaker Dongfeng Motor has pumped $91m into a $243m investment fund that will target developers of automotive technology in addition to products in adjacent sectors such as big data, cloud computing and artificial intelligence. Dongfeng Bocom Yuanjing Motor Investment Fund has received the same amount from Bank of Communications’ Bocom International Holdings unit, and the two will each own 37.3% stakes in the vehicle.

We don’t generally cover acquisitions of publicly-listed companies, but Salesforce’s forthcoming and just announced $27.7bn cash and stock purchase of enterprise messaging tool developer Slack is notable enough to make an exception. Slack hit the public markets in a direct listing 18 months ago with a guidance price valuing it at $13.1bn – and many had labelled its growth in the past few months as underwhelming, indicating the fever for enterprise software right now. Its backers include SoftBank Vision Fund, owner of a 7.3% stake pre-listing; GV, which first invested at a $1.12bn valuation; and Comcast Ventures, which initially invested at a $3.8bn valuation. The acquisition is a somewhat unceremonious – if lucrative ending – for Slack as a standalone business, which in 2016 welcomed Microsoft’s entrance into the market with a ballsy full-page ad in the NY Times. Now, of course, Microsoft Teams has several times the amount of daily active users that Slack has – but with Salesforce’s considerable clout behind it, this could turn into the moment where Slack really becomes big business and justify that hefty price tag despite a very volatile share price.

Monzo, a UK-based digital bank, secured £60m to increase a series G round featuring Vanderbilt University to £125m ($167m). The new funding came from conference operator Ted Global, Novator, Kaiser and Goodwater Capital, according to TechCrunch. Monzo confirmed it as an extension to its existing series G funding. Payment services provider Stripe, telecoms firm Orange, Y Combinator, General Catalyst, Accel, Goodwater Capital, Thrive Capital, Passion Capital and Reference Capital and provided the first £60m in June this year, and the company had since quietly raised another £5m. Monzo runs a digital bank with more than 4.8 million customers, offering current accounts as well as business accounts, which are used by some 60,000 of its customers. It has now raised in excess of $550m since it was founded in 2015. The series G funding was secured at a $1.57bn valuation, a notable downturn to the $2.5bn valuation achieved when Monzo raised $144m in June 2019 from investors including Orange subsidiary Orange Digital Ventures and Stripe.

Deals

Lastly, Indian e-commerce marketplace Flipkart is spinning off PhonePe, a digital financial services business with more than 250 million users. Flipkart’s parent company, Walmart, is leading a $700m round that will provide the basis of PhonePe’s emergence as a partially separate company, and the remainder of the funds will be sourced from as yet undisclosed Flipkart backers, valuing PhonePe at $5.5bn post-money.

Space and satellite technology isn’t one of the busiest parts of the startup space but its companies are among the better founded inhabitants. China-based Chang Guang is developing a satellite constellation that will provide high-definition images and video, and has raised $375m from investors including iFlytek, reportedly as it prepares to go public. Other companies in China’s space tech space that have raised notable amounts include iSpace and LandSpace.

The United States’ VC space may have had its annual Thanksgiving lull, but China looks to have picked up the funding baton. Virtual classroom software provider Empower Education Online (EEO) leads the pack, having picked up $265m in a series C round featuring Tencent and Susquehanna International Group. Its earlier strategic investors include New Oriental Education and Technology, TAL Education Group and ATA, none of which were named as participants in the latest round.

Healthcare organisation software provider Olive has had a busy 2020, closing its third round this year by welcoming GV to a $225m round valuing it at $1.5bn. The Tiger Global Management-led round also served to double the company’s overall funding to about $450m, its earlier backers including multi-corporate backed venture firm Ascension Ventures.

Community buying platform developer Nice Tuan has meanwhile closed its fourth round of 2020, raising $196m in a C3 round co-led by existing investor Alibaba. Nice Tuan’s previous three rounds totalled about $250m and while there’s no official word on its valuation, the considerable growth of many of its peers in China’s online education sector this year indicates it’s likely in the multiples of what it was valued at in January.

Everlywell is one of the companies that has experienced major growth this year, adding a covid-19 product to its range of home testing kits and now raising $175m in a series D round featuring over-the-top media company The Chernin Group. The round valued Everlywell at $1.3bn according to Forbes, and it has now secured over $250m in funding since being founded.

Funds

UK-headquartered venture capital firm Firstminute Capital has launched a $111m second fund with backing from limited partners including internet group Tencent and consumer goods and chemicals producer Henkel. The vehicle is anchored by investment trust RIT Capital Partners and its LP list also features VC fund Atomico, four undisclosed California-based investment firms and some 70 founders of businesses valued at $1bn or higher.

Exits

It’s been a heady week for spinoffs, those companies flipped out of established businesses with external funding and their parents retaining a stake. First up is JD Health, the healthcare and medical retailer and services provider spun off by e-commerce group JD.com. JD Health has floated in Hong Kong’s largest initial public offering this year, raising $3.48bn after pricing the IPO at the top of its range, at a valuation nearing $29bn. JD.com isn’t finished either: its JD Logistics spinoff is recruiting bankers for an offering expected to raise up to $3bn.

Dynamic glass developer View is one of the most prominent holdouts from the golden age of cleantech funding, having raised a total of $1.8bn in debt and equity financing, $1.1bn coming from SoftBank Vision Fund two years ago. It has now become the latest company to take the reverse IPO route, joining forces with special purpose acquisition company CF Finance Acquisition Corp II to form a publicly-listed business with a valuation of about $1.6bn. View’s earlier backers include Corning and GE Ventures, though the latter may well have divested its stake by now.

Cloudwalk Technology has filed for a $574m initial public offering on Shanghai’s Star Exchange that would allow corporate investors Haier Financial Holdings, Bohai Capital and PCI-Suntek to exit. The company is one of China’s four largest image recognition software providers, along with Megvii, SenseTime and Yitu, none of which have managed to yet complete an IPO.

Cancer and viral infection treatment developer Silverback Therapeutics has just executed a successful IPO of its own, raising almost $242m in an upsized offering priced above its range. Celgene and Bristol-Myers Squibb are among the investors that had provided some $211m in funding for Silverback over three rounds. The IPO price valued the company at approximately $695m.

Cisco Investments seems to be having a good week so far. It’s exiting Kustomer in a reported $1bn acquisition – take a look on GCV for more –, and another portfolio company, customer data software provider GainSight, has agreed to let investment firm Vista Equity Partners buy a controlling stake at a $1.1bn valuation. The transaction will come after $157m in funding for GainSight, from a pool of investors also including Salesforce Ventures.

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

25 May 2020 – SenseTime Expands to Help Track Coronavirus

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The Big Ones

Chinese AI software provider SenseTime has expanded its visual surveillance technology to assess the internal temperature of individuals in order to more efficiently track coronavirus patients, and is considering seeking $1bn in funding. Reports in March suggested it was chasing $500m to $1bn in lieu of an IPO, but sources have told the Wall Street Journal it is now considering a $1bn fundraise at a post-money valuation of $9.5bn. No word on possible participants yet, but its existing backers include Qualcomm Ventures, Alibaba, Suning and Dalian Wanda.

ADC Therapeutics is the latest pharmaceutical company to buck the market downturn to successfully go public, and it certainly has proven to be a successful IPO. The cancer therapy developer – a spinoff from AstraZeneca – floated above its range in an upscaled offering and has now closed that IPO at almost $268m after its shares rose significantly on their first day of trading. Passage Bio, Zentalis, Keros Therapeutics and Oric Pharmaceuticals have had similarly profitable IPOs in the past two months.

Mauritius-based venture capital firm Novastar Ventures has raised $108m from limited partners including insurance firm Axa for its second Africa-focused fund. Axa’s Impact Fund joined the European Investment Bank (EIB), the state-owned Dutch Good Growth Fund and Proparco, Norfund, Sifem and CDC Group: development banks representing France, Norway, Switzerland and the UK respectively. Multiple unnamed family offices also participated alongside unspecified investors from Novastar’s first fund, which closed at $80m in 2015 with backing from Axa Investment Management, financial services firms Triodos Bank and JP Morgan, CDC, Proparco, Norfund, EIB, Fisea and FMO. Novastar targets startups located in East and West Africa and has built a 15-strong portfolio, investing from $250,000 for an early round, up to a total of $8m in each company. Its investments include off-grid solar system provider SolarNow and organic food supplier GreenPath.

In crossover news, SQZ Biotechnologies, a US-based cellular vaccine developer spun out of MIT, has closed a $65m series D round that included GV and Illumina Ventures, respective investment subsidiaries of internet technology conglomerate Alphabet and genomics technology producer Illumina. The round was led by Singaporean government-owned investment firm Temasek and also featured NanoDimension, Polaris Partners, an unnamed US-based fund and JDRF T1D Fund, which is managed by diabetes-focused charity JRDF. SQZ is working on cell therapies that exploit the body’s immune system to fight diseases. The series D proceeds will enable the company, which has so far focused on cancer and autoimmune diseases, to expand its cellular vaccine development platform into infectious diseases. It will also begin work on a point-of-care system that could allow treatments to be generated in clinics.

Deals

Messaging and social communication apps have seen user numbers and business boom in the wake of the Covid-19 pandemic, and Discord is no different. Although some companies (see Giphy and NextVR below) are facing acquisitions at reduced valuations, Discord is reportedly in talks with potential investors over a funding round set to value it between $3bn and $4bn. That’s a sizeable increase from the $2.05bn valuation at which it raised $150m from investors including Tencent in late 2018.

Augmented reality technology developer Magic Leap has had question marks over its business for years as it struggled to build a customer base despite raising over $2.6bn in funding and hitting a $6.3bn valuation. The company was reportedly set to cut around 1,000 staff members, but has managed to pull in $350m from undisclosed new and existing backers. It’s still going ahead with cuts, alongside a slight pivot to enterprise customers, but hopefully they won’t be as bad. Its earlier investors include Google, Alibaba, Qualcomm Ventures, Legendary Entertainment, Warner Bros, Grupo Globo and Axel Springer, but it’s unclear how many of them – if any – chipped in this time.

E-commerce group JD.com’s maintenance, research and operations subsidiary, JD MRO, has received $230m in series A financing from GGV Capital, Sequoia Capital China and Citic Group subsidiary CPE. JD MRO follows in the footsteps of other JD.com spinoffs such as JD Health, JD Logistics and JD Digits which have also achieved unicorn status.

SoftBank revealed that its first Vision Fund has closed for new investments, but it still has powder left over for portfolio companies, one of which is construction services provider Katerra. Vision Fund has invested $200m in Katerra having previously led a round that closed at $999m in late 2018. Reports early last year suggested it could lead a $700m round for Katerra at a valuation potentially topping $4bn, but the reduced size is probably a sign that valuation has also dropped.

Throughout the disruption over recent weeks, telehealth has been one of the standout areas of the tech space that has done very well. Amwell (formerly known as American Well) claims the sector has made two years of progress in two months, and it has closed $194m in series C funding from investors including Takeda and Allianz X. The latter took part as an existing backer, Amwell’s earlier investors also including Philips and Teva.

RallyBio is developing treatments for rare and serious diseases, and has secured $145m in a series B round led by Nan Fung’s Pivotal BioVenture Partners fund. Mitsui & Co Global Investment and Fidelity’s F-Prime Capital were also among the participants in the round, which will fund a phase 1/2 trial for RallyBio’s lead candidate that is expected to kick off later this year.

Digital banking has done well so far in 2020, and the latest neobank to close a nine-figure round is Aspiration, which has secured $135m in series C funding from investors including IUBS hedge fund manager UBS O’Connor. Aspiration targets a more ethical model of investment and cash management and its earlier investors include Renren, the social media platform that caused a stir when it began investing heavily in fintech earlier this decade. Apart from Aspiration and SoFi, those bets are yet to really pay off, but the strategy itself looks sounder than ever.

States Title operates in another part of the fintech space, having developed AI software that automates part of the title and escrow element of real estate transactions, but it’s raised $123m in a series C round featuring Assurant and corporate venture capital units Lennar Ventures and Scor Global P&C Ventures. The real estate industry has been affected by Covid-19 restrictions but investors clearly believe in the underlying potential of State Title’s technology, which could help fulfil tech’s promise of simplifying complex financial transactions.

Rapid Micro, a provider of automated microbial contamination detection systems, said this week it has also seen business pick up lately, and it has completed a $120m financing round featuring Asahi Kasei Medical. The round expanded the company’s overall funding to more than $255m and shows that while the greatest rewards may be reaped by whoever comes up with the first viable Covid-19 vaccine, it’s providing a boost to practically the entire healthcare sector.

Masterclass may not be a healthtech company but its remote learning service, which provides video tutorials hosted by well-known experts and celebrities such David Axelrod, Neil Gaiman and Gordon Ramsay, lies in an online services space that has benefitted from the coronavirus lockdown. It has raised $100m in a series E round led by Fidelity at a reported valuation of more than $800m, boosting its total funding to more than $263m. Bloomberg Beta, WME Ventures, Novel TMT and Evolution Media are all earlier investors.

Digital bank Monzo is also looking for new funding and is reportedly after approximately $85m to $98m, though it looks likely to be at a reduced valuation. The company raised $144m last June from investors including Orange Digital Ventures and Stripe at $2.55bn valuation but sources informed the Financial Times that the new round will probably cut that to about $1.5bn. Some fintech developers have been relatively unaffected by the Covid-19 downturn but online banking does not seem to be among them.

Chinese online fitness community and technology provider Keep has raised $80m in a series E round featuring Tencent and Bertelsmann Asia Investments that increased its valuation to more than $1bn. Both corporate backers were existing investors in Keep – which has now received more than $260m altogether – going back to at least 2016.

Exits

Healthcare companies have been doing well, not least the ones brave enough to opt for an initial public offering. ADC Therapeutics, a cancer therapy developer spun off by AstraZeneca’s Spirogen subsidiary, withdrew its initial attempt to go public last year, but refiled late last month and has now raised nearly $233m in its IPO. That’s an upsized offering that involved ADC floating at $19 per share, above the IPO’s $16 to $18 range. Its shares closed at almost $30 after its first day of trading.

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

01 July 2019 – Grab Boosts Series H Round to $4.8bn

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Big Ones

Southeast Asian ride hailing service Grab has boosted an already swelling series H round to $4.8bn, taking in $300m from investment management firm Invesco.

Deutsche Telekom Capital Partners was launched by its parent company nearly five years ago, and has now formed a $350m second venture and growth capital fund.

Who says the IPO market is on the dip? Adaptive Biotechnologies – backed by Microsoft, Celgene, Illumina, LabCorp and BD Biosciences – saw its share price double on its first day of trading – from $20 to $40.30 – while BridgeBio Pharma, which is developing drugs to treat diseases driven by genetic defects, floated above its range despite increasing the number of shares in its offering by a third.

On GUV, Commonwealth Fusion Systems (CFS), a US-based fusion power technology spinout of Massachusetts Institute of Technology (MIT), has closed a $115m series A round backed by MIT’s The Engine.

Deals

SpaceX is reportedly looking to raise more than $314m in its forthcoming round, with most or potentially all of it set to come from Ontario Teachers’ Pension Plan, which has confirmed it has invested in the GV-backed space services provider.

Ouyeel, an online trading platform spun off by China Baowu Steel, has raised $294m in a round featuring corporates Sinotrans, Benxi Group and Beijing Jianlong Heavy Industry as well as Baowu itself together with its Baoshan Iron and Steel subsidiary.

Digital manufacturing technology producer Carbon has received more than $260m in a round that pushed its overall funding past $680m.

Digital bank operator Monzo is going from strength to strength, helping to indicate that the UK’s Brexit woes have not affected its status as a centre of fintech.

StockX, the operator of an online marketplace for authenticated rare fashion items, has shown once again that the upmarket fashion space is an attractive one for investors. It has notched up $110m in a series C round featuring GV, which participated as an existing backer, at a valuation of more than $1bn.

Cardiac imaging technology provider Acutus Medical has secured $100m in series D funding from investors including GE Ventures as part of a larger round that included a $70m credit facility. Acutus has now raised roughly $230m in equity financing altogether, with GE Ventures having been an investor since at least 2013, and the funding will go to strengthening its atrial access product range.

Funds

That model of corporate venturing looks like it’s gaining some traction. Logistics services provider JD Logistics was spun off by e-commerce company JD.com two years ago but it is now getting into the corporate venturing game itself and has accumulated $218m for a strategic fund.

Exits

Fast fashion retail brand Miniso raised its first outside funding just eight months ago, having launched in 2013, but it is reportedly now gearing up for an initial public offering that could raise $1bn.

Upmarket fashion marketplace TheRealReal, proving it isn’t just the biotech sector that’s doing well, also completed a $300m initial public offering and went public on Friday.

Slack’s direct offering has pulled in the headlines but Stoke Therapeutics held its own successful listing last week, which it has now closed at just over $163m.

Atreca is working on immunotherapeutics to treat cancer, and raised $125m when it floated today, having priced the IPO at the midpoint of its range.

Velodyne Lidar is meanwhile pushing to become the first lidar technology developer to go public, having hired banks to underwrite an IPO expected to value it at about $1.8bn.

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