08 February 2021 – Robinhood Raises $3.4bn

The Big Ones

Few VC-backed companies have had as busy a week in the mainstream media as Robinhood. The share trading platform developer has been ground zero for the GameStop rush as well as increased activity for other “meme” stocks like AMC, Nokia and BlackBerry. But those increased trading levels means more cash required to meet SEC requirements, and the Alphabet and Roc Nation-backed company first raised $1bn from existing investors along with some $500m to $600m in debt financing a week ago Friday and then another $2.4bn over the weekend to come out with $3.4bn last Monday.

Kuaishou went public in Hong Kong this Friday morning in a hugely oversubscribed initial public offering in which it raised $5.4bn, only to see its shares open at a price nearly three times that of its IPO. The short-form video app developer had secured $4.35bn in funding from investors including Tencent and Baidu prior to the offering and now has a market cap that stands around the $160bn mark.

US-based printing technology producer Xerox plans to launch innovation and corporate development divisions through a reorganisation involving the formation of a $250m corporate venturing arm. Xerox’s Corporate Development group will engage in investments and merger and acquisition deals as well as deploying the recently announced $250m fund. The unit is yet to be launched but will invest in mid-sized, growth-stage companies aligned with Xerox’s strategic interests. It will be led by executive vice-president Louie Pastor, who has also been appointed chief corporate development officer and chief legal officer.

Crossover is an exit this week. Stem cell immunotherapy developer Sana Biotechnology –based on research at Harvard, UCSF and University of Washington, and co-founded by former executives of Juno that was acquired by Celgene for $9bn a couple of years ago – has floated in an offering that netted it nearly $588m (more than four times as much as its $150m original target), reputedly representing the largest IPO yet for a preclinical biotech company. Shares surged 40% on the first day (from $25 to $35.10) so that greenshoe option seems likely, which could push proceeds to nearly $676m. It comes about eight months after Sana Bio disclosed $700m in early-stage funding from investors including GV, the Alphabet subsidiary formerly known as Google Ventures. Its current share price gives it a market cap of about $7bn.

Deals

It’s interesting that after the Ubers and Airbnbs of the world have gone public, a wave of new companies in more coronavirus-resistant sectors have stepped up to fill that void at the top of the VC-backed valuation heap, and quickly too. Data engineering software producer DataBricks has received $1bn from investors including Microsoft, AWS, CapitalG and Salesforce Ventures in a series G round valuing it at $28bn. That’s a more than fourfold increase from its series F, just over a year ago.

UiPath’s valuation is even higher, the automation software provider having pulled in $750m in series F funding at a $35bn post-money valuation. Corporate investors Tencent and CapitalG weren’t identified as participants in the round, which more than tripled UiPath’s valuation from its July series E, and it’s going to be interesting to see how much higher that valuation can go when it executes the IPO for which it confidentially filed in December.

Online food delivery has been heavily boosted in the past year and Good Eggs combines several different areas – prepared food and meal kits, farm-to-table produce, alcohol and flower delivery – in a single offering. It’s also managed to raise $100m from investors including GV and Rich’s despite operating mainly in the San Francisco Bay Area. The capital will support its expansion into Southern California, with wider movement surely on the horizon.

Tealium, developer of a management software tool for customer data, has secured $96m in series G financing at a $1.2bn valuation, increasing its overall funding to $160m. Its earlier funding came from investors including Sumitomo’s Presidio Ventures unit, ABN Amro Digital Impact Fund, Citi Ventures and Parkwood, though none were named in the latest round, which was co-led by Georgian and Silver Lake Waterman.

Mobile Premier League, the developer of an online gaming platform focused on the South and Southeast Asian markets, was founded about three years ago and has already notched up its fourth funding round, raising $95m from investors including Susquehanna International Group, Go-Ventures and Telstra Ventures. The series D round valued it at $945m post-money and the proceeds will go to bolstering its esports offering.

Funds

Telecoms and internet group SoftBank is launching a $100m fund to invest in companies based around the Miami, Florida area of the United States. The vehicle has already chosen its first portfolio companies, including cybersecurity software developer Lumu Technologies. It will invest in locally-founded startups as well as those willing to move to the area.

Exits

Genetic testing service 23andme has chosen to go the reverse merger route for a public listing, joining with VG Acquisition Corp, a special purpose acquisition company sponsored by conglomerate Virgin Group in a deal that will value the merged business at about $3.5bn. It had received more than $870m in funding pre-IPO from an investor base that includes GV (which is scoring some huge exits right now), WuXi AppTec, Johnson & Johnson, GlaxoSmithKline, Roche and Illumina.

Astra is set to become the first private space launch services provider to hit the public markets, having agreed a reverse merger with special purpose acquisition company Holicity at an implied valuation of $2.1bn. The deal was agreed a year after Astra emerged from stealth having secured over $100m from investors including Airbus Ventures, which is slowly growing a significant presence in the spacetech sector, and two months after it launched its first rocket into space.

Drizly’s investors, which include Vayner/RSE, are heading for an exit of a different kind after the alcohol delivery service agreed to be acquired by Uber for $1.1bn. The company had disclosed approximately $85m in funding and will join an expanding range of Uber delivery services spearheaded by its Uber Eats subsidiary. It also stands as a sign of growth in the on-demand service sector, and perhaps forthcoming consolidation.

Roblox has had an extremely busy couple of months, filing for and then postponing its initial public offering, changing over to a direct listing, raising $520m from investors including Warner Music Group at a hugely increased $29.5bn valuation and now reportedly putting its plans to go public on hold. The game creation platform developer, which also counts Tencent among its investors, is postponing the listing due to regulatory scrutiny on how it classifies revenue from sales of its Robux currency on the platform.

Shared workspace provider Knotel was valued above $1bn just 18 months ago but has now filed for bankruptcy, a reminder that while some business models have thrived during the coronavirus pandemic, others have been far unluckier. Knotel had raised roughly $560m from investors including Mori Trust, Rocket Internet, Itochu, Bloomberg Beta, The Sapir Organization, Raiffeisen, Wolfson Group, Moinian Group and Wainbridge Capital.


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

29 June 2020 – Sana Biotechnology Raises $700m in First Round

The Big Ones

There is a true IPO bonanza going on at the moment and we’ll get to that in a moment, but there’s still a good deal of money sloshing around the sector for early-stage deals too. Sana Biotechnology is working on a string of drug candidates utilising stem cell technology and has raised a huge $700m for its first funding round. The participants include GV, whose diversification into life sciences has so far been very successful, the unit’s exits including Ipierian, Editas Medicine and Flatiron Health. Sana’s technology was developed by researchers at Harvard Medical School, University of Washington’s School of Medicine and UC San Francisco, in partnership with a team at incubator Flagship Pioneering.

Amazon formed its Alexa Fund five years ago but in recent times has made some hefty investments off its own balance sheet, not least in the transport sector where it has backed huge rounds for the likes of Rivian and Aurora Innovation. The corporate has now followed that by committing $2bn to a vehicle called the Climate Pledge Fund, which will invest in developers of products or services that can accelerate carbon reduction. Sectors in its eyeline include renewable energy, transport, logistics, manufacturing and materials, food and agriculture.

The IPO market – particularly in the life sciences sector – may explain why Invitae has splashed out to purchase precision oncology technology provider ArcherDX. Founded by Qiagen in 2015, ArcherDX had actually filed to go public earlier this month but Invitae has stepped in to agree a cash-and-shares acquisition valued at $1.4bn. That’s past tense, as the 30 million Inivtae shares included in the deal subsequently shot up by more than 40% in price on the public markets.

Deals

Sonder should in theory be one of the companies most affected by the coronavirus and indeed, the short-term apartment rental service reportedly fired or furloughed a third of its staff while selling off some 2,000 properties. But it claims it is back at 80% capacity right now and has secured $170m in series E funding from investors including property developer Lennar. The cash was raised at a $1.3bn valuation and Sonder aims to add another $30m before it’s closed.

Agricultural product and services provider Indigo has reportedly added $100m to a series F round featuring FedEx that now stands at $300m. FedEx backed the first tranche in January and Indigo, which is valued at $3.5bn, is said to be targeting $500m for a final close. The round’s other participants include Riverstone Holdings and existing backers Flagship Pioneering and Alaska Permanent Fund.

Pionyr Immunotherapies, a US-based immuno-oncology developer commercialising research from University of Toronto (UofT) and University of California, San Francisco (UCSF) has secured a $275m commitment from biopharmaceutical firm Gilead Sciences, which will acquire a 49.9% in Pionyr through the deal. The transaction forms part of a larger agreement worth up to $1.47bn that gives the corporate an exclusive option to purchase the remaining shares for another $315m and make potential milestone payments totalling up to $1.15bn.

Synchrony Financial and corporate venturing units MassMutual Ventures and Blue Venture Fund all contributed to a $100m round for Payfone, a provider of user authentication technology for phone-based customer services. The round nearly doubled Payfone’s overall funding, which makes sense considering its technology would feasibly be in greater demand in the wake of increased remote buying during coronavirus-related lockdowns.

Synqa, the Southeast Asian fintech provider formerly known as Omise, has bagged $80m in a series C round co-led by Siam Commercial Bank’s SCB 10X subsidiary. The round included insurer Aioi Nissay Dowa, Toyota Financial Services Corporation, Sumitomo Mitsui Banking Corporation and its SMBC Venture Capital unit. Synqa, whose earlier backers also include Sinar Mas, has built a mobile wallet and a crypto token trading network, and will use the series C cash to widen the range of products it offers.

Optum’s corporate venturing unit, Optum Ventures, has led or co-led four rounds in the past week, the latest being a $64m series C for Somatus. Kidney care provider Somatus has now secured $105m in total and will put the cash into geographical expansion and product development.

Ojo Labs, the developer of an AI chatbot for use in real estate deals, has completed a $62.5m round featuring Royal Bank of Canada and Northwestern Mutual Future Ventures. The company’s overall funding now stands at approximately $134m and it used part of the latest cash influx to buy online real estate portal Movoto in a deal that allowed another corporate, property developer Mitsui Fudosa, to exit.

Funds

Netherlands-based, healthcare-focused venture capital firm BioGeneration Ventures closed its fourth fund having raised €105m ($119m) from limited partners including pharmaceutical firm Bristol Myers Squibb (BMS). BMS and fellow existing backers Schroder Adveq and the European Investment Fund (EIF) joined newly minted LPs including Industriens Pension and KfW Capital in contributing to the oversubscribed BGV IV.

US-based talent agency Creative Artists Agency (CAA) formed an investment vehicle with venture capital firm New Enterprise Associates (NEA) that was launched with $100m in capital according to the Hollywood Reporter (not a publication we get to cite often on here!) Connect Ventures will leverage the existing relationships CAA has in the sports and entertainment industries, and the Hollywood Reporter stated that the companies plan to invest up to $400m through the venture.

Material Impact, a US-based venture capital firm with a keen interest in spinouts, has closed its second fund at $200m with limited partners including the endowments of Harvard and Princeton universities. Material Impact was founded in 2015 to invest in material science technologies and has backed more than half a dozen university spinouts to date through its first, $110m fund.

UK-based venture capital firm Epidarex Capital has closed a fund of more than £102m ($127m) to invest in life sciences companies, including spinouts, across the UK. The capital was supplied by the universities of Aberdeen, Edinburgh, Glasgow and Manchester, as well as government-owned British Business Bank, which made a $62m cornerstone investment through its Enterprise Capital Funds program, and pension scheme Strathclyde Pension Fund. A range of undisclosed, international backers have also invested in the fund.

Exits

One of the largest IPOs is set to be Agora, a Chinese provider of video engagement technology for app developers. The SIG-backed company will float later today in a $350m IPO that values it at $2bn, while three existing investors are pumping in a further $130m in the form of a private placement. The most interesting thing is that while Agora’s sales have jumped this year its Q1 revenue is still below $40m, which implies that while losses may not be a huge factor in a successful flotation, revenue may not be either.

Forma Therapeutics went public on the same day as Celgene Switzerland and BMS-backed precision cancer drug developer Repare Therapeutics in its $253m listing, and like Repare, Forma has closed an upsized IPO, having raised a total of $319m. The price of the Novartis and Eli Lilly-backed company’s shares have more than doubled since, indicating the current IPO gold rush is very far from over.

China-based Genetron Holdings, which is working on its own precision cancer treatments, has certainly shown the potential in that space. It has floated in the US in a $256m initial public offering that involved it adding on 3 million shares and then pricing them 19% above the IPO range. Vcanbio Cell & Gene Engineering has achieved an exit through the flotation, having invested in Genetron in 2016.

Relay Therapeutics – based on research from MIT, UC San Francisco and Brandeis University – has filed for its own IPO and has set an initial target of $200m. The precision cancer drug developer raised $400m in a 2018 series C round led by $300m from SoftBank Vision Fund and backed by GV and Alexandria Venture Investments. The trend of late has been for IPO candidates to price their offerings above the range, so this may turn out to be one of Vision Fund’s success stories. Right now it may be regretting not putting more money into life sciences deals.

Gene therapy developer Poseida Therapeutics has become the next biotech company to get in line to go public and has filed to raise up to $115m. Novartis provided half the capital in Poseida’s last round, a series C that closed at $150m nearly a year ago, and has a 14.9% stake. Its other backers include Transposagen Biopharmaceuticals, and the IPO proceeds will fund clinical development of prostate and bone marrow cancer treatments.

That isn’t – and I can’t believe I’m saying this – actually all the IPO stories from the past week so do head to GCV and GUV to read about the others, too.


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