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

The Big Ones

Klarna, operator of an app that lets consumers pay for items from some 200 retailers through instalment payments, has raised $650m in a round that almost doubled its valuation to $10.65bn in the space of just over a year. Klarna’s earlier investors include Bestseller Group, Visa, Ant Group and Commonwealth Bank of Australia, and media group Bonnier is one of several investors that acquired shares in the company through a concurrent secondary investment deal.

It’s a year for big tech IPOs (and there’s actually several more multi-billion-dollar news coming up in this episode), but one of the biggest upcoming offerings could reportedly take place in January next year, when short-form video app developer Kuaishou is reportedly planning to float in a $5bn offering at a $50bn valuation. Tencent owns about 20% of the company’s shares having invested $2bn to lead a December 2019 round valuing it at $28.6bn. It’s going to be interesting to see whether its growth outside of China is affected positively or negatively by the ongoing US acquisition saga surrounding its biggest competitor, TikTok (known as Douyin in China).

Panasonic provided $100m for the first fund to be launched by growth equity firm Conductive Ventures in April 2018, and it has ploughed $150m into a second vehicle that will carry on investing in sectors like artificial intelligence, digital health and advanced manufacturing technology. The corporate is the only limited partner for Conductive, the owner of a portfolio that includes Proterra, Sprinklr and Desktop Metal.

It’s been a big week for crossover deals as well. The most notable perhaps was Lava Therapeutics, a Netherlands-based immuno-oncology therapy spinout of Amsterdam University Medical Centers (Amsterdam UMC), which secured $83m in a series C round on Thursday. The round was co-led by Novo Ventures and Sanofi Ventures, and also featured MRL Ventures Fund, a subsidiary of Merck & Co’s Merck Research Laboratories division. Lava is working on treatments for haematological and solid cancers and has allocated the capital to advancing its portfolio into proof-of-concept trials in 2021. The company advances research by Hans van der Vliet at Amsterdam UMC, the university hospital group affiliated with Vrije Universiteit Amsterdam and University of Amsterdam.

Deals

One of the biggest tech success stories during the pandemic has been Peloton’s communal home fitness equipment and services, but Zwift operates in a similar sphere, providing a social exercise platform that allows users to race each other on bikes or treadmills in front of a simulated CGI-based environment. It has just pulled in $450m from investors including Amazon Alexa Fund and Zone 5 Ventures, a CVC vehicle for bicycle maker Specialized Bicycle Components. Its earlier backers include Samchuly and Colopl.

Daily fantasy sports were a big magnet for VC cash five years or so ago but the sector went quiet as companies found themselves having to deal with more and more regulatory hurdles. India’s Dream11 has however raised $225m in primary and secondary financing at a valuation reported by TechCrunch to be over $2.5bn. Tencent had invested in the company in 2018, leading a $100m series D round that valued it at $700m.

Indoor farming may not have been the big growth area some people though it might be this year, but there are still some sizeable players in the market and Infarm is one of them. It’s raised $170m in debt and equity financing from investors including Bonnier as part of a series C round in which it is targeting $200m. The first close pushed its overall funding past the $300m mark and will support the growth of its vertical farm network.

Home fitness has of course also been a big winner. Social exercise app developer Zwift secured $450m earlier this week, and now Tonal, developer of a wall-mounted digital weight machine for home use, has pulled in $110m from investors including Amazon Alexa Fund and the CAA-backed Evolution Media. Its overall funding now stands at $200m and it is testing the potential of its technology in physical therapy through a partnership with Mayo Clinic.

Funds

Japan-based real estate developer Mitsui Fudosan has partnered venture capital firm Global Brain to form an ¥8.5bn ($81m) corporate venturing vehicle dubbed 31Ventures Global Innovation Fund II. The second fund, abbreviated as CVC II, will invest in startups developing real estate services or digitisation and smart city technologies. The initiative will also seek out companies with innovative business models that can complement Mitsui Fudosan’s core business.

Tencent Trusted Doctors, the digital healthcare subsidiary of internet group Tencent, has formed a RMB1bn ($148m) healthcare industry fund with state-owned holding company China Resources. China Resources subsidiary CR Capital will manage the CR Tengkang fund, which counts municipal funds Chengdu Hi-tech Investment Group, Chengdu Xincheng Investment Group and Chengdu Industry Investment’s Chengdu Advanced Manufacturing Investment subsidiary as partners.

Australia-based software development technology provider Atlassian has launched a corporate venture capital fund, Atlassian Ventures, with $50m in capital. Areas of interest for Atlassian Ventures include early-stage developers of enterprise collaboration applications that could be added to Atlassian’s app marketplace, innovative cloud software providers and established companies with products that could interact with its existing offering.

Exits

Online real estate transaction portal OpenDoor has opted for a reverse merger instead and is merging with a special purpose acquisition company in a deal that will value it at $4.8bn and net it $1bn in financing from backers including existing corporate investors Lennar and Access Industries. It had previously raised a total of almost $1.35bn from investors also including GV and SoftBank Vision Fund, and its last round valued it at $3.8bn in March 2019.

Snowflake has floated in one of the year’s biggest initial public offerings and raised $3.36bn after pricing its shares at $120 each, above a range that had already been increased from $75 to $85 per share. The data management software provider will also receive $500m in a private placement, with half of that coming from existing investor Salesforce Ventures. Its exiting backers also include Capital One Growth Ventures, which first invested at a valuation less than 5% of what the company’s market cap will be.

Mobile insurance platform Singapore Life has agreed to merge with Aviva’s Singapore business to form a $2.3bn company that will be called Aviva-Singlife. Sumitomo paid $90m for a 25% stake in Singlife in July 2019 and will retain a 20% stake in the merged business, suggesting it may have contributed to the $1.46bn cash and marketable securities Singlife is paying Aviva as part of the deal. Insurance firm Aflac will also keep a stake, having supplied $20m for Singlife six months earlier.

Amwell has floated in an upsized initial public offering that netted it $742m in addition to $100m supplied by Google through a private placement. Telehealth software has been a big growth area over the past six months but the success of Amwell, which counts Allianz, Philips, Teva and Takeda as investors, could perhaps be more closely related to a week where Snowflake, JFrog, Unity Software and Sumo Logic all floated above their range to raise big money in their IPOs. It’s a heady time for exits right now.

The growth of Snowflake, which floated at a market cap more than 15 times its valuation just two years ago, has been immense. The progress of another enterprise software provider JFrog, which went public the same day in a $509m IPO, has perhaps been understated as a result, but it has almost quadrupled its valuation in less than a year, boasting a $5.75bn market cap after its first day of trading. JFrog, developer of a software-release platform, had raised $227m from investors including Dell Technologies Capital.

Speaking of successful offerings, Outset Medical’s shares have shot off like a rocket and sat at more than double their IPO price within two days. The kidney dialysis system provider has unsurprisingly closed the offering already, at $278m, up from an initial $242m. Baxter Ventures, the corporate venturing arm of medical device maker Baxter International, is among the lucky investors.

C4 Therapeutics is developing small molecule drugs to treat cancer and neurodegenerative diseases, and has filed for a $100m initial public offering under three months after it received $170m in debt and series B equity financing. Its earlier backers include Novartis, Roche and Kraft Group, all of which contributed to a $73m series A round in 2016.


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

25 February 2019 – LPs Express Concern in SoftBank Vision Fund

Big stories

Reports earlier in the week claimed some of the LPs in SoftBank Vision Fund have concerns about its centralised decision making and the high prices it has paid in its investments, but that doesn’t mean it’s slowing down. Vision Fund has led a $1bn round for shipping marketplace Flexport at a $3.2bn valuation, investing alongside backers including SF Express, the round taking its total funding to more than $1.3bn.

Allianz’s digital investment arm, Allianz X, has made roughly 15 investments but that portfolio, which includes unicorns Go-Jek and N26, has been enough to help convince it to boost the unit’s capital reserves from €430m to €1bn (which equates to more than $1.1bn). Other factors would be the way in which Allianz X informs its parent’s ongoing move toward a digital business model, and the side deals and joint ventures it has sealed with portfolio companies.

On the IPO front, Pinterest has reportedly filed confidentially for an initial public offering it expects will take place at a valuation in excess of $12bn. The Rakuten-backed social media platform has beefed up revenue significantly in recent years, boosting advertising while also ramping up its commerce options. It will form part of a coterie of decacorns (that’s a valuation of $10bn+) set to float in 2019.

Deals

Reports the week before last stating that Amazon and GM were set to invest in electric truck developer Rivian Automotive at a 10-figure valuation, and those reports have turned out to be half right. Amazon has led a $700m round for Rivian that also featured existing backers likely to include corporates Abdul Latif Jameel and Sumitomo, but GM is yet to make its move, though the carmaker reportedly remains in talks over either an investment or a collaboration agreement.

Vision Fund has also invested in last-mile consumer goods delivery service DoorDash, as part of a $400m series F round that valued it at $7.1bn.

On-demand logistics service provider Lalamove has meanwhile secured $300m in a series D round that valued it at more than $1bn.

In another part of the logistics sector, SoftBank Vision Fund has led a $200m series D round for on-demand personal storage service Clutter at a $600m valuation and is taking a board set in the process.

Online property transaction platform OpenDoor is seeking its own nine-figure round, and is reportedly after $200m that will be raised at a $3.7bn valuation.

Arvelle Therapeutics initially revealed it had spun off from Axovant with more than $100m in funding, but the lead investor in the series A round, LSP, has revealed it was $180m in size.

Retailer Clas Ohlson paid $26m for a 10% stake in Sweden-based online grocer MatHem in 2017 and may have already scored an exit. Investment firm Kinnevik has invested $42.5m in the company while also acquiring $53.5m of shares from existing shareholders through a secondary deal.

Funds

Abu Dhabi’s investment vehicle, Mubadala, provided $15bn for SoftBank’s Vision Fund in 2017 and now it looks like the corporate has exchanged the favour, so to speak.

It’s not quite a fund, but universities in Maryland have supported a potential $16m state government program intended to spur local innovation in the cybersecurity and the life sciences sectors.

Another one that isn’t quite a fund but worth mentioning: Mars Innovation, the commercialisation firm focused on the Toronto cluster, has hired three lobbyists with StrategyCorp to lobby the federal government about “tens of millions of funding”.

Exits

Ucommune has emerged as WeWork’s key competitor, particularly in Asia, and has reportedly hired banks to prepare an initial public offering slated to take place in New York that is expected to value it at about $3bn.

Slack launched its Slack Fund in 2015 and it looks like it’s set to potentially make its first exit, after Palo Alto Networks agreed to acquire cybersecurity orchestration platform developer Demisto for $560m in a cash-and-stock deal that will also enable fellow CVC Wipro Ventures to exit.

SoYoung investors are set for a different kind of exit, after the Chinese cosmetic surgery booking and reviews platform filed confidentially to raise up to $300m in an initial public offering in the US.


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

01 October 2018 – ByteDance in Funding Talks with SoftBank

Deals

Reports that China-based digital media company ByteDance was seeking funding at a $75bn valuation emerged a few weeks back, but now they’ve been fleshed out with news that it is in talks with SoftBank, which could provide $1.5bn of a $3bn round that also looks set to include KKR and General Atlantic.

Another Indian unicorn, ride hailing platform Ola, is reportedly in talks with Naspers and Temasek over a $1bn round that could value it at between $7bn and $8bn.

Short-term accommodation platform Oyo has raised $800m from investors including SoftBank Vision Fund and has reportedly secured commitments for a further $200m.

Swiggy is looking to establish itself as the market leader in India’s on-demand food delivery segment and has reportedly opened talks with investors including Tencent over a funding round that could reach $700m and value it at up to $2.5bn.

SoftBank Vision Fund continues to make its presence felt in the venture capital space, its latest deal being a $400m investment in real estate transaction marketplace Opendoor.

SoftBank’s Vision Fund has also invested in the latest round for online real estate brokerage Compass, which secured $400m in a series F round that valued it at $4.4bn post-money.

Butterfly Network, the developer of a handheld ultrasound device, has meanwhile received $250m in series D funding from investors including Fosun Pharma at a $1.25bn valuation.

Payment technology provider Stripe has taken a big step forward, securing $245m in a round that more than doubled its valuation to $20bn in less than two years.

Trucking services platform Manbang Group has been one of the recent success stories in China’s VC space, and now Convoy is aiming to become the sector’s market leader in the US.

UBiome, a US-based microbial genomics technology developer backed by the Stanford-StartX Fund, has raised $83m in series C funding from investors including Dentsu Ventures, the corporate venturing vehicle formed by marketing firm Dentsu.

Funds

Despite its name, SoftBank Ventures Korea hasn’t limited itself to Korean deals, and the unit is looking to establish itself more thoroughly in China with a $300m fund it has formed in partnership with TPG Growth.

The Engine Fund, a tough tech-focused VC vehicle associated with Massachusetts Institute of Technology’s Engine incubator, has reached a final oversubscribed close of $205m.

Exits

2018’s really turning into a banner year for IPOs, with fashion e-commerce marketplace Farfetch the latest tech company to launch a successful offering, floating above its range to raise $885m.

Baxalta Ventures has scored one of the year’s big M&A exits, after Alexion agreed to acquire autoimmune disease drug developer Syntimmune for $400m upfront and up to $800m in milestone-related payments.

Asarina Pharma, a Sweden-based biotechnology spinout of University of Umeå, floated on the Nasdaq First North stock exchange last week after raising more than Skr142m ($16.3m) in an initial public offering.


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