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

31 August 2020 – Ant Group Files for Dual Listing to Potentially Raise $30bn

The Big Ones

Cancer test developer Freenome has closed a $270m series C round that included Novartis and existing backers GV, Kaiser Permanente Ventures and Roche Venture Fund to hike its overall funding to $507m. The capital will be allocated to a clinical study for a blood test Freenome is developing for colorectal cancer screening, in addition to advancing additional oncology blood tests.

American Family Ventures was formed by insurer American Family in 2013 to invest in areas like insurance, financial services, big data and cybersecurity technology, and it’s following a recent trend by recruiting external limited partners for its latest fund. AFV Fund III has closed at $213m and its LPs will also be able to gain value through a scheme called AFV Platform that will be able to link them to portfolio companies and fellow investors.

Ant Group has officially filed for a dual listing in Hong Kong and Shanghai that could potentially raise $30bn – a figure that would equate to the largest initial public offering for a VC-backed company in history. It will reportedly now speak to underwriters and other stakeholders to determine the details of the flotations, which are expected to value it between $200bn and $300bn. Apart from Alibaba, corporates including China Post and China Life are also among its investors, both having backed it at a $60bn valuation in 2016.

Crossover: Kymeta, a US-based satellite broadband provider exploiting foundational research from Duke University, secured $85m in a funding round led by entrepreneur Bill Gates, with the backing of some of Kymeta’s leadership team. Kymeta has raised more than $282m in funding altogether, satellite operator Intelsat having contributed to a $73.5m round in 2017 together with undisclosed additional investors. Media group Liberty Global had joined Osage University Partners, Bill Gates, Lux Capital and Kresge Foundation in Kymeta’s $50m series C round in 2013. And Kymeta had already secured $12m in funding from Liberty Global, Lux Capital and Gates the year before.

Deals

Consumer companies have had a mixed at best time of it during the coronavirus pandemic but eyewear e-commerce platform Warby Parker has done quite well, raising $245m across series F and G rounds while hiking its valuation from $1.75bn in late 2018 to $3bn today. The company’s earlier investors include American Express Ventures and the latest round increased its overall funding to $535m.

Viva Republica, the creator of money management app Toss, has raised its own nine-figure round, pulling in $173m in a round that reportedly took its valuation from $2.2bn to $2.6bn. The company’s total funding now stands at $530m, its earlier investors including Novel Group, PayPal and Qualcomm Ventures. The funding will help it grow Toss into a more diversified finance-focused app that includes financial product recommendations.

Mural, developer of an online visual collaboration platform, has closed an $118m series B round that included Slack Fund and returning backer Gradient Ventures. The round came just seven months after Mural’s series A funding, but its initial investment came all the way back in 2012 in a tiny round featuring another corporate venturing unit, Intel Capital.

Data collaboration software provider Daitaku has raised $100m in series D funding from investors including Alphabet’s CapitalG unit. The round followed a secondary investment from CapitalG in December that valued Daitaku at $1.4bn, and the company said it has maintained a unicorn valuation in the latest round. It has also now secured $246m in primary funding altogether.

Funds

This is going to be a quick one today: other than the American Family Ventures fundraiser we’ve already covered, it’s been a slow week for funds.

Exits

Things are really beginning to heat up as we pass through the summer lull to the traditional autumn rush and a good deal of activity is focused on the public markets. Chinese smart electric carmaker Xpeng has floated in the US in an upsized $1.5bn initial public offering valuing it above $21bn. Alibaba and Xiaomi were among the Xpeng investors considering buying $400m of shares in the IPO, and its backers also include Foxconn, UCar and Douwan Entertainment.

The sheer scale of Ant’s forthcoming listing casts a large shadow, enough to almost make you forget what a big story it is that data analysis provider Palantir has also filed to go public. The Relx, Fujitsu and Sompo Holdings-backed company is eschewing an IPO in favour of a direct listing, following the likes of Spotify and Slack. It was valued above $20bn in 2016 but regardless of whether it’s maintained that valuation (and there are doubts about that), it will be one of the year’s biggest listings in a year set to be full of them.

Cloud data software provider Snowflake is another hugely valued tech company to file for an initial public offering, six months after closing a $479m series G round at a valuation exceeding $12bn. Salesforce Ventures was among the participants in that round but Capital One Growth Ventures got in earlier, backing its 2017 series D at a reported $500m valuation. It isn’t among Snowflake’s largest shareholders but it should be in for a bumper exit nonetheless.

Although a lot of companies are filing for IPOs, lidar technology developer Luminar has taken a different route, agreeing to a reverse merger with special purpose acquisition company (SPAC) Gores Metropoulos that will give it a Nasdaq listing and an expected valuation of $3.4bn. The deal is being boosted by $170m of financing from a syndicate including Van Tuyl Companies and Volvo Cars Tech Fund, the latter – like fellow corporates Corning and Cornes- an existing Luminar investor. Expect more of these kinds of deals, judging by the volume of SPACs entering the public markets of late.

In fact, another company to follow the SPAC route is 3D metal printer producer Desktop Metal, which will list on the New York Stock Exchange through a reverse merger with a SPAC called Trine Acquisition Corp. The combined business is set to be valued at $2.5bn, Desktop Metal having previously raised $438m from investors including Koch Industries, Alphabet, Panasonic, Techtronic Industries, Ford, Saudi Aramco, Lowe’s, BMW and Stratasys.

All these IPO and reverse merger deals have perhaps obscured the fact the M&A market seems to be doing quite well too. Fastly has agreed to buy web security application provider Signal Sciences for $200m in cash and $575m in stock, and the transaction will come after about $62m in funding. That money came from investors including O’Reilly Media’s OATV unit, which is in for a tasty exit having backed it in every round since its $2m seed funding.

Kymera Therapeutics raised almost $174m in its initial public offering on Friday, pricing its shares above their range before seeing them soar by 66% after their first day of trading. The small-molecule drug developer had previously received nearly $220m in funding from investors including corporate venturing units Amgen Ventures, Lilly Ventures, Pfizer Ventures, MRL Ventures Fund and Sanofi Ventures.

Israeli digital X-ray device developer Nano-X Imaging has also floated in the US, in a $165m IPO that scored exits for corporate investors SK Telecom, iA Financial, Foxconn and Fujifilm. The company priced its shares at the top of the range and their subsequent rise almost doubled its valuation from its last pre-IPO funding round, which closed in June this year.


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

15 June 2020 – Zuoyebang in Talks to Raise up to $800m in Coronavirus Boost

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)
Licensed under Creative Commons: By Attribution 3.0