19 April 2021 – Coinbase Lists on Nasdaq

The Big Ones

1

Spend enough time in venture and you can see the transformation in startups and the economy almost as if time has speeded up.

GCV’s first article on Coinbase, eight years ago to the day, described it as “a digital wallet for Bitcoin transactions”, which “had raised $600,000 from accelerator Y Combinator and publisher International Data Group’s corporate venturing unit IDG Ventures.

“Bitcoin was set up without central bank backing but with a predetermined limit of 21 million available to be issued from its software and has seen fluctuations in its value from $9 in January to $200 on 9 April 2013 and back down to $150 a day later.”

Now, Bitcoin’s price is $63,063.90 and investors have valued Coinbase at $75.9bn after its debut on Nasdaq stock exchange on Wednesday.

The Financial Times described it as “the first listing of a major cryptocurrency exchange and a moment of validation for the digital asset class some 12 years after the creation of bitcoin”. After a direct listing of Coinbase shares – rather than the more traditional initial public offering which raises new capital – the price fell to $328 from an opening price of $381 to give a market capitalisation of $85.8bn, including options and other kinds of stock-based awards.

However, after early support from CVCs, such as IDG and USAA’s Victor Pascucci and Jon Cholak, Coinbase cashed in with a $75m series C round in 2015 including from BBVA, NYSE and NTT and not looked back. Coinbase’s big investors include venture capital firms Andreessen Horowitz, Ribbit Capital and Union Square Ventures.

Coinbase’s financial fortunes have surged with the cryptocurrency markets, producing a nine-fold jump in revenues to an estimated $1.8bn in the first quarter, translating to about $1.1bn in adjusted earnings before interest, tax, depreciation and amortisation, the FT said.

But while still primarily a business-to-consumer exchange for people to buy and sell bitcoin and ethereum based on the blockchain, financial services firms are more interested in the underlying technology than its value as a monetary store or gold equivalent.

Jay Powell, chair of the Federal Reserve, said: “No one is using them for payments, for example, like the dollar. It’s a little bit like gold . . . Human beings have given gold this special value that it doesn’t have from an industrial standpoint, but nonetheless for thousands of years they’ve done that. Bitcoin is much more like that.”

Behind the scenes, however, and the big asset managers and financial groups are working on pragmatic implementations of blockchain and crypto as platform or infrastructure to trade, price, settle and be the custodians. From there, products to deploy and engage on alternative assets and how even venture capital is affected can flow.

Similar riches are now being reaped from early investments in other emerging fields created in the past two decades.

2

Tuesday’s daily leader looked at the $25bn of cash returned from Naspers/Prosus selling four percentage points of its holding in Tencent over the past few years.

Netherlands-listed technology investor Prosus, formed out of the corporate venturing assets collected by South Africa-listed media group Naspers, has sold 2% of China-based gaming and social media group Tencent for $14.7bn.

This is the world’s largest-ever block trade – 191.89 million shares for HK$114.1bn – but leaves Prosus still holding 28.9% of Tencent, according to newswire Reuters.

The block trade – or the usually private, single trade of a large amount of securities – surpassed the previous record set in 2018 when Naspers also sold 2% of Tencent for $9.8bn, Refinitiv data showed. Its remaining stake is worth about $200bn, from an original $31m corporate venturing deal struck 20 years ago.

Bob van Dijk, CEO at Prosus, said: “The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock.”

Prosus, which also invests in online food delivery platforms, classified marketplaces and digital payments businesses, has built up its warchest for new and existing investments given the rapid scaling up of the innovation capital ecosystem at the later stage.

Global venture capital investments hit $125bn in the first quarter, the first time the figure has surpassed $100bn in a quarter, according to data published by Crunchbase, even though deal volumes held relatively stable.

The opportunity for social network or “platform economy” companies to dominate across sectors or verticals remains, especially as Tencent peer Alibaba’s share price rose on Monday after it was able to have the term written into law.

This is particularly the case as finance becomes embedded into media. As James Thorne, a venture capital reporter at PitchBook, noted at the weekend, Angela Strange, general partner at VC firm Andreessen Horowitz (A16Z), made the case in 2019 that most people would be working in financial services soon, even if we don’t change jobs, as finance becomes embedded into software.

At that point, media and content becomes the differentiator, which is why A16Z calls itself a media company that monetizes through venture capital.

In his annual letter last week, Jamie Dimon, CEO at bank JPMorgan Chase, said: “Fintech’s ability to merge social media, use data smartly and integrate with other platforms rapidly (often without the disadvantages of being an actual bank) will help these companies win significant market share.”
And this helps explain why even in a world where media advertising is dominated by Facebook and Google that there remains so much attention and focus on social media and networks.

3

Things are heating up in Italy’s media landscape as a microcosm of wider changes in the sports and gaming ecosystem. The country’s main phone operator, TIM, has returned as a “long-term investor in venture capital” through the anchor commitment to a €100m UV T-Growth fund managed independently by United Ventures, while Nerio Alessandri, founder and executive chairman of Italy-listed fitness equipment supplier Technogym, has launched Wellness Ventures.

UV T-Growth, managed by Fabio Pirovano and Damiano Coletti, targets a wide swathe of digital innovation, including gaming. Similarly, Wellness is targeting digital projects in general but in particular in sports and fitness.
There are plenty of opportunities in sports and gaming in the digital age. Online gambling and advertising, electronic as well as physical sports and gaming and unbundling of viewers from cable or television packages are coalescing to create plenty of disruption.

The latest being Amazon, which acquired Twitch for in-game streaming and chats, paying $11bn for exclusive rights to stream Thursday night National Football League games on its Prime service.
There are now dozens of VC funds targeting games, which is a far bigger market than films. Most recently, the Games Fund has raised $50m for a game-focused venture capital fund to invest in early-stage games in both Europe and the US, according to VentureBeat.

Maria Kochmola and Ilya Eremeev started the fund having both previously worked at Russia-listed internet group Mail.ru’s My.Games division, which started a game fund called MGVC, VentureBeat said. Kochmola was the investment director at MGVC since its inception in 2017, and she led more than 35 investments (with six exits).

Deals

Cruise increases latest round to $2.75bn

Epic picks out investors for $1bn round

SambaNova rams through $676m series D

Polestar attracts $550m

SoftBank finds Better option for $500m investment

Groq locks up $300m series C

Fiture fits in $300m series B

Astranis ascends with $250m series C

Bukalapak escalates funding with $234m

Tempo works out $220m series C

Signifyd secures $205m in series E round

Clearcover coasts to $200m series D

Repertoire Immune Medicines gets $189m result

Degreed delivers $153m series D

ZJS Express zooms to $153m series B

Jaguar Gene Therapy roars to $139m

Tend drills into $125m series C

Arcellx amasses $115m in series C round

CeQur secures $115m in series C5

StoneWise stocks up with $100m

Gaussian Robotics sweeps up $100m

Hack the Box cracks $10.6m round

Funds

Axa accelerates to $295m close for second growth vehicle

Amazon shows Indian ambitions with $250m fund

TDK to deploy $150m through second fund

Exits

Grab takes reverse merger option

Tango Therapeutics arranges reverse merger

TuSimple delivers $1.35bn initial public offering

Alkami appears on public markets

MissFresh looks to deliver $1bn IPO

Brii brightens up with IPO plans

Darktrace discloses IPO plans

Vaccitech shoots for US IPO

Artiva activates $100m IPO plans

Anjuke advances to IPO stage

Hologic hoists in Mobidiag

Keyfactor turns to PrimeKey for merger

University

Schroders shifts Carrick stake at discount


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

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

23 November 2020 – PingCap Stores £270m in Series D Funding

The Big Ones

Distributed database software provider PingCap has secured $270m in series D funding from backers including Bertelsmann Asia Investments that will support research and development as well as international expansion. Another corporate investor, Fosun, led PingCap’s last round, a $50m series C round two years ago. PingCap is the creator of an open-source distributed database platform called TiDB as well as a version called TiDB that has been tailored for use on cloud platforms such as Amazon Web Services and Google Cloud. The platform’s apparently been adopted by some 1,500 clients internationally, including well-known ones such as Square and Dailymotion.

Airbnb has filed for an initial public offering with an initial target of $1bn and will be relying on the markets to ignore its 30% drop in revenue and considerable losses in 2020 in favour of a projected recovery in the tourism industry next year when coronavirus vaccines hopefully begin to be distributed. Its investors include CapitalG, the growth equity subsidiary of Alphabet formerly known as Google Capital, and its valuation stood at $26bn prior to a $1bn debt and equity round in April. But there are a few notable things about Airbnb’s filing and the fact it acknowledges that it’s been unable “to grow new offerings and tiers, such as Airbnb Experiences” could yet prove to be the canary in the coal mine – particularly as Google steps up its own travel ads and hinders Airbnb’s organic growth. There’s also a question as to whether hosts will be able to stick out ongoing and returning lockdowns: they still have to pay mortgages on the properties and without guests to cover bills, that’s somewhat of a ticking time bomb. But the biggest threat to Airbnb is the fact that its growth was slowing long before covid-related shutdowns and travel restrictions: in fact, 2019 was the third consecutive year of slowing growth. The filing warns this slowing down is expected to continue, making it a difficult sell to potential investors on the public markets.

Form Energy, a US-based grid battery spinout of Massachusetts Institute of Technology (MIT), has obtained more than $70m of series C funding from undisclosed investors, Reuters said citing CEO Mateo Jaramillio. Details are expected over the coming weeks. Founded in 2017, Form Energy is developing sulfur-based battery storage for renewable electricity sources such as wind and solar which fluctuate more than conventional power plants owing to changes in wind strength and solar radiation. Form Energy’s batteries are rumoured to discharge at slow speeds relative to their capacity but offer 150 hours of storage compared to four hours for lithium-ion grid storage products. The idea is to help replace oil and gas-based power plants that run during times of sparse customer demand to provide a minimum level of electricity, known in industry parlance as the baseload. The spinout last closed a $40m series B round in August 2019 led by Eni Next, the corporate venturing arm of energy supplier Eni, and backed by The Engine, the MIT-affiliated incubator and venture fund, in addition to Breakthrough Energy Ventures, Capricorn Investment Group, Prelude Ventures and Macquarie Capital.

Deals

DataRobot, a provider of enterprise artificial intelligence software, has more than doubled its valuation to $2.7bn in a $270m pre-IPO round featuring new and existing investors. The company has now raised a total of about $500m from an investor base that includes Intel Capital, New York Life, Recruit Strategic Partners, Cisco and Citi Ventures, though none were specifically named in the company’s latest round.

Precision medicine developer D3 Bio has emerged from stealth with $200m from a series A round featuring WuXi AppTec’s Corporate Venture Fund. The corporate was joined by Boyu Capital, Temasek, Matrix Partners China and Sequoia Capital China, and the cash will support development of the startup’s oncology and immunology product pipeline.

Online restaurant directory and food ordering service Zomato has raised $195m at a $3.6bn post-money valuation. Much of the company’s earlier funding came from online classifieds operator Info Edge, which still owns a stake above 20%. Its larger shareholders include Ant Group and Uber, while Delivery Hero is also an investor.

XAG, an agriculture-focused drone developer that is expanding into wider reaching farm management technology, has completed a $182m funding round co-led by Baidu Capital and SoftBank Vision Fund. The cash will support the bolstering of the company’s research and development, manufacturing and supply chain capabilities as its home country of China moves closer to an unmanned farm model of agriculture.

Cato Networks has entered the unicorn sphere, raising $130m from investors including Singtel Innov8 at a $1bn pre-money valuation. The networking security technology provider has now received more than $330m since 2015 and its last round – which also featured the Singtel subsidiary – was only seven months ago.

Forter, a developer of e-commerce fraud prevention software, has joined the ranks of the unicorns, having bagged $125m at a valuation topping $1.3bn. The series E round didn’t include corporate backer Salesforce Ventures but it took the company’s total funding to $225m and was co-led by venture capital firms Bessemer Venture Partners and Felix Capital.

CreditEase-backed wealth management platform developer Addepar has raised almost as much, having closed its series E round at $117m. The public markets boom for tech companies in recent months, coupled with the ongoing issues for other businesses, has meant increased demand for wealth management services. It also highlights Addepar’s selling point: enhanced data capabilities that give investors greater insights into portfolio performance.

SoftBank Vision Fund 2 has also led a $100m round for MindTickle, a US-based provider of sales readiness technology that helps sales staff upgrade their skills and benefit from updated information. Qualcomm Ventures was among the other participants in the round, having backed MindTickle since its 2015 series A round. The latest funding was closed at a reported $500m valuation.

Funds

SR One is the latest corporate venturing unit to be spun off into an independent venture firm by its parent, in this case pharmaceutical firm GlaxoSmithKline. With some 35 years on the clock it’s one of the oldest corporate VC arms, but GSK isn’t cutting the cord fully – it’s the largest contributor to an oversubscribed $500m fund for the rebranded SR One Capital Management, which will continue to be run by CEO Simeon George.

Exits

Roblox, the creator of a social 3D game development platform, has filed for a $1bn IPO on the New York Stock Exchange that will notch up an exit for Tencent. The corporate was among the investors in a $150m series G round in February that valued Roblox at $4bn. Press reports have suggested the company would seek a valuation of $8bn in the offering, meaning Tencent could be looking at a rapid profit on paper.

Arrival is the latest highly valued company to take the reverse merger option, agreeing a deal with Nasdaq-listed CIIG Merger Corp that will value the combined business at $5.4bn. The electric commercial vehicle developer’s existing investors, which include Hyundai, Kia and UPS, will keep their stakes while the deal will be boosted by $400m in PIPE financing.

Supcon is part of the fast-growing field of robotic process automation technology and has priced an initial public offering in its home country of China that will net it $268m in proceeds. Corporate investors Chint, Sinopec Capital, Intel, China National Nuclear’s CNNC Industry Fund Management Corporation and Lenovo are all among its investors and will jointly own about 20% of its shares post-IPO.


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

16 November 2020 – SentinelOne Bags $267m in Series F

The Big Ones

“The door is always open for a second and third [Vision] fund, but we’re not very popular,” according to Masayoshi Son, founder of SoftBank, who was quoted in the Financial Times. SoftBank raised almost $100bn for its first Vision Fund back in 2016 and invested three-quarters of it, showing a slight paper profit in its latest results to the end of September. SoftBank’s Vision Funds are very much back in the game, and Vision Fund I has participated in a $500m series C round for autonomous delivery vehicle producer Nuro. This round valued Nuro at $5bn, nearly double the $2.7bn valuation at which Vision Fund provided $940m in series B funding for the company early last year, and it was led by funds and accounts advised by T. Rowe Price.

As we head to the end of a turbulent year, the IPO option continues to be taken up by some of the more highly valued venture-backed companies. DoorDash has filed to go public on the New York Stock Exchange, six months after it raised $400m at a $16bn valuation. The food delivery service is one of the tech companies that has thrived as the coronavirus has caused more people to stay home, and it more than tripled revenue in the first nine months of 2020 while more than halving losses. SoftBank Vision Fund is its biggest shareholder, with a 24.9% stake.

Let’s take a quick look at another interesting story from the past week – a crossover between the corporate VC and university spinout worlds. Menlo Security, a spinout of UC Berkeley, has raised a nine-figure amount, the cybersecurity software provider having received $100m in a series E round valuing it at $800m. American Express Ventures, HSBC and Ericsson Ventures are among the company’s earlier investors, and it has now raised a total of about $260m. The cash will go to upgrading its engineering and go-to-market activities.

Deals

Cybersecurity software provider SentinelOne has bagged $267m in a series F round led by Tiger Global Management that roughly tripled its valuation to $3.3bn in the space of nine months. Qualcomm Ventures was among the investors in the February series E round, while another corporate VC unit, Samsung Ventures, backed SentinelOne’s series D in June last year.

Autonomous driving technology producer Pony.ai has completed a $267m series C round that included automotive manufacturer FAW Group, increasing its valuation from $4bn to $5.3bn in the process. Toyota previously led a $462m series B round in February.

Everyone welcomed news this past week that a coronavirus vaccine might be on the horizon – based, notably, on the technology of a spinout as BioNTech emerged out of Johannes Gutenberg University of Mainz. Electric scooter rental service Tier is one company to benefit, and it secured $250m in a series C round led by SoftBank Vision Fund 2. The cash will support expansion into additional European markets and comes after Tier raised more than $100m in an Axa Germany-backed round in February.

Rec-Biotechnology is another startup working on a covid vaccine. The China-based company has raised $227m in series B funding from investors including Legend Capital and the proceeds will fund work on the prospective covid-19 vaccine as well as those for HPV, shingles and tuberculosis.

Online mortgage lending platform Better.com has secured $200m in a series D round backed by Ping An, Ally Financial and American Express Ventures while pushing its valuation up to $4bn. Better’s overall funding has now gone past the $450m mark and its earlier backers include Citi.

Aixuexi Education Group is the latest member of China’s online education community to pull in significant funding, securing $200m in a series D2 round led by GIC. Tencent invested an undisclosed amount just under a year ago following some $290m in earlier funding.

Funds

Bentley Systems, a provider of infrastructure engineering software, has joined the likes of Kellogg, Scotts Miracle-Gro and T-Mobile by harnessing Touchdown Ventures to launch a corporate venturing fund. Bentley iTwin Ventures is equipped with $100m and will make strategic investments on behalf of its parent, supplying up to $5m per deal. Its first portfolio company is subsea installation software developer FutureOn.

Exits

Instacart has hired Goldman Sachs to oversee an offering early next year it expects will value it at about $30bn. That’s a huge increase from the $17.7bn valuation the grocery delivery service registered when it last raised money, a few weeks ago. Instacart counts Comcast Ventures, Amazon and American Express Ventures as backers, with the last of those having invested at a $400m valuation.

Adobe has agreed a $1.5bn acquisition of marketing collaboration platform developer Workfront, 18 months after investors including Susquehanna International Group made a $280m secondary investment in the company. Workfront had previously raised about $95m in equity financing and will operate as a subsidiary of Adobe’s Experience Cloud division.

Vista Equity Partners has agreed to purchase a majority stake in customer management software provider PipeDrive at a $1.5bn valuation, with DTCP among the existing investors that will retain shares. DTCP, spun off and backed by Deutsche Telekom, invested $10m in PipeDrive through a 2018 series C round that valued it at about $300m, which means it’s looking at a very nice paper profit on that deal.


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

05 October 2020 – Sophia Genetics Raises $110m Series F

The Big Ones

It was a privilege to hear the insights at the GCV Digital Forum 2.0 yesterday. Combining our regional and sector events, GCV Asia Congress, Synergize and Energy, was always a recipe for some of the world’s leaders to gather and share as well as network. The insights started with Gen Tsuchikawa, CEO of Sony Innovation Fund, as chairman of the Asia stream explain how it had made 10 deals since April through the covid-19 crisis and launched a new fund with an impact focus on the environment. Impact and sustainability was a running theme through the whole agenda, with Sir Ronald Cohen, chairman of the Global Steering Group working on impact investing, giving a keynote and answering questions from attendees about his new book, Impact: Reshaping capitalism to drive real change.

Sir Ronald Cohen’s insights from his second book, Impact: Reshaping Capitalism to Drive Real Change, lay out a methodology for adding impact to the usual risk and return decision-making for investing. Here’s a case study example from his keynote to be delivered at the www.GCVDigitalForum.com tomorrow, with a live Q&A with Sir Ronald starting at 12.30pm UK time.

Change is coming. The only question remains how to maximise the impact at a corporation through sophisticated use of open innovation tools, such as corporate venturing, and align them to traditional research and development and mergers and acquisitions. Switzerland-based healthcare insurer CSS Insurance has set up the CHF50m SwissHealth Ventures fund managed by Redstone’s venture capital-as-a-service. Jonathan Fraser, head of venturing at CSS, said it would on focus digital health startups contributing to a high quality and cost-efficient health system.

Sophia Genetics, a Switzerland-based clinical insights platform, has raised $110m in its series F round from a consortium including Hitachi Ventures. It is an interesting deal for Stefan Gabriel, CEO of Hitachi Ventures and GCV Powerlist 100 winner last month. Typically, the $150m Hitachi Ventures programme has targeted early-stage deals in Europe and the US.

Exits

Palantir is arguably Peter Thiel’s most infamous endeavour: the company has been shrouded in secrecy ever since it was founded in 2003 and was often thought to have almost peerless capabilities when it came to big data analytics (capabilities that have landed it some big US government contracts). But its direct listing on the NYSE (which came after six – yes, six – revisions to its SEC filing) was, as Reuters called it, “choppy”. Shares dropped from the $10 opening price to $9.50 and the company ended up with a valuation of $20.6bn – which might seem a good amount, but it was worth $20.3bn five years ago and has raised hundreds of millions of dollars since then. Adding insult to injury was the fact that Morgan Stanley couldn’t get its software to work for Palantir employees to sell shares.

McAfee has had a more eventful history than most. Once upon a time (the olden days of 2011), the company was listed on NYSE before Intel decided to snap up the cybersecurity giant for $7.7bn. To say the shoe didn’t fit might be an understatement: officially rebranding the company to Intel Security in 2014, the operation actually retained its McAfee name and by 2016 had been spun off again through a private equity deal that saw Intel selling a majority stake to TPG Capital, with Thoma Bravo also taking a small shareholding. And now it seems McAfee is ready to yet again trade publicly and has filed for an IPO on Nasdaq – putting that infamous $100m placeholder figure in its draft prospectus and not yet giving away any details on terms. Fun fact: the IPO has gathered a baker’s dozen worth of underwriters – this might be one to watch closely as it unfolds.

JD.com’s healthcare spinoff has filed for an initial public offering after raising more than $1.9bn in equity funding from investors including Hillhouse Capital and Citic Capital.

Tencent is also in line for an exit as Beijing Logicreation Information & Technology, an education services provider, has filed for a RMB1.04bn ($152m) initial public offering on Shenzhen Stock Exchange’s ChiNext board. The company plans on issuing 10 million shares and is targeting a valuation of $586m. Details about Logicreation’s funding are hazy, but DealStreetAsia surfaced a series D round of undisclosed size backed by Tencent Investment in 2017 and a $14m funding round in 2015 backed by Heyi Group. Neither corporate owns more than 5% pre-IPO, however.

Deals

Electric vehicles and grid-scale energy storage are going to be fundamentally necessary parts of a clean energy future, but despite the fact that they generate no emissions once they reach the user they come with a big catch: mining lithium is incredibly destructive to the environment and its effects have been known to pollute rivers and kill wildlife. So, recycling lithium-ion batteries is key if we want to avoid solving one problem (climate change) by creating another (pollution). The recycling process is a relatively new development, but Northvolt is one of the most important players in the space and the company has added $600m to its coffers from Volkswagen, Scania and others to not only reach 150GWh of manufacturing output in Europe by 2030, but also to build a recycling facility that will mean at least 50% of raw materials in its batteries will be from recycled products. VW had already backed a $1bn round last year.

Cazoo, a UK-based online marketplace for used vehicles, has been raising equity at an incredible pace: founded two years ago, it’s amassed $558m in capital and a valuation of $2.5bn thanks to commitments from, among others, repeat investor DMG Ventures, the corporate venturing arm of media group Daily Mail and General Trust. The corporate also participated in Cazoo’s latest deal, a $308m funding round that was co-led by General Catalyst and D1 Capital Partners (which you will have noticed investing a lot of money over the past few weeks – cf. Robinhood, Alkami and Goat).

SoftBank Vision Fund 2 and PICC Group’s PICC Capital joined forces with Morningside to co-lead a $319m series C round for XtalPi that also featured existing backers SIG China, Tencent and China Life. XtalPi, which has built a platform to predict the physicochemical and pharmaceutical properties of small-molecule drug candidates, will use the money to further develop its technology. Its shareholders also include Google and Renren.

Rappi has grown from a delivery service initially focused on drinks to a courier service that delivers pretty much any consumer product you can think of. It even allows users to get cashback. The company has also expanded across nine countries in South America and has raised more than $300m from T. Rowe Price and undisclosed investors. That both is and isn’t a lot of money: SoftBank injected $1bn in May last year, and Rappi’s earlier backers also include Delivery Hero.

SoftBank has contributed to a $225m series D round for VTex, a Brazil-based provider of end-to-end e-commerce services, after the corporate had already led a $140m round last November. VTex is now valued at $1.7bn and its platform is used by international giants such as Coca-Cola, Nestlé and Walmart to power their online stores – not a bad list of clients for a Brazilian company that hardly any consumer will have ever heard of.

Airwallex has added $40m in a series D extension that brought the round to a $200m close. No word on who the “new and existing” backers of the second tranche are, but ANZi Ventures, Salesforce Ventures and Tencent were all among the investors for the $160m initial tranche five months ago. The money will allow Airwallex to chase big plans: add another 100 staff (for a 240-strong headcount) and an expansion into the US, all while doubling down on its existing markets. Airwallex has now obtained some $400m altogether.

Taimei’s software helps life sciences companies manage their clinical trials, including assessing and monitoring adverse effects. It’s added $176m to its coffers in a round co-led by Tencent, GL Ventures and YF Capital, while SoftBank China Venture Capital also got a slice of the pie. Tencent previously led a $132m series E-plus round just under a year ago, while SBCVC had contributed to an $80m series E round in early 2019.

BioCatch has added four big banks – Barclays, Citi, HSBC and National Australia Bank – to a series C round that now stands at $168m. American Express Ventures and CreditEase had backed a $145m first tranche six months ago and the Israel-based behavioural biometrics technology provider has now raised $215m in funding altogether. It’s also launched a so-called client innovation board, where Barclays, Citi, HSBC, NAB and AmEx will be able to exchange ideas on how best to prevent online fraud.

Caloga-backed Sendinblue has added $160m to its coffers thanks to investors including Bpifrance and BlackRock.

Lilly Asia Ventures has returned for a $147m series D round that will allow InventisBio to advance its treatments for breast cancer and gout into phase 2 clinical trials.

Cloud-based banking platform developer Alkami Technology’s total financing meanwhile stands at $365m after attracting $140m in a funding round featuring Fidelity. D1 Capital Partners led the round, while Franklin Templeton and Stockbridge Investors also took part. Details about Alkami’s earlier funding rounds are sparse, though it did announce its series E and D rounds, and its shareholders also include General Atlantic, MissionOG, S3 Ventures and Argonaut Private Equity.

Joyson Electronics has farmed out a stake in its smart driving subsidiary Joy Next to investors including Baofeng Energy and Ningbo Gaofa Automotive Control System.

Tencent has led a round worth “hundreds of millions of dollars” for veterinary care services provider New Ruipeng Pet Healthcare Group. Boehringer Ingelheim and Country Garden Venture Capital, the investment arm for Country Garden, also took part in the round which will allow Ruipeng, which operates more than 1,400 animal clinics and hospitals, to bolster its offering.

University

Monte Rosa climbs $96m series B: University of London-linked Monte Rosa Therapeutics is working on biotechnology to degrade disease-driving proteins.

XY spells out $59m series B: Zhejiang University-backed optical chip maker XY Technology will put the series B cash to strengthening its capacity and product.

Wise conceives $17.6m: University of Milan spinout Wise is a developer of low-invasive neuromodulation implants for treating pain and neurological disorders.

Funds

China’s courier service operator SF Holdings has joined forces with Citic Capital to launch a $308m fund that will focus on the domestic logistics sector. Singapore’s sovereign wealth fund GIC provided the largest chunk of cash – a total of $216m – though the size is (at least so far) below an original target of $400m envisaged earlier this year. Fundraising was put on hold at the time and, although the report doesn’t explicitly say this, it’s likely the pandemic was a big factor here.

Long-time readers will be aware of Kickstart Ventures, the investment arm of Philippines-based Globe Telecom, but there has never been a lot of corporate venture capital available in the archipelagic state. This is changing – and in dramatic fashion, too: local conglomerate Ayala has closed a $180m fund (managed by Kickstart Ventures and also backed by Globe Telecom), seemingly making it the country’s biggest venture fund to date. Because that is a lot of money, the Active Fund will actually invest internationally and target series A through D rounds.

BA Capital lures corporates to $147m fund: BA Capital has raised a total of $247m this month across its yuan and dollar-denominated vehicles targeting the consumer and media sectors.

Nippon Life makes an impact with $100m: The insurance provider has committed $100m to the Life Science Impact Program, which is managed by Grove Street Advisors and will focus on healthcare businesses.

Inspiration Capital sparks $73m fund: Hexing Electrical, CSD Environment, Hailang Group and SIG are among the limited partners in a $73m fund raised by Qiming spinoff Inspiration Capital.


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

08 June 2020 – GCV Digital Forum Roundup

GCV Digital Forum Roundup

Thank you to the team and all who have worked their socks off for the first GCV Digital Forum, and also the sponsors, speakers and attendees who have made it such a success. The platform will stay open for 30 days.

It was exciting to hear the industry on the GCV Leadership Society Advisory Board chaired by Young Sohn from Samsung this week share their perspectives on how communities can come closer together through these trials and create more diverse and inclusive investing environments – Samsung NEXT will share its playbook for this at the Forum and beyond.

The GCV Digital Forum has had 600 attendees from across the time zones, creating a unique network and sharing of insights yesterday and today.

Exits

Covid-19 does not seem to have done much to dampen investors’ spirits outside a few key areas and if anything, it’s accelerated what was beginning to become a comparatively stagnant M&A market. One of the biggest beneficiaries has been Intel Capital, which has already recorded exits from portfolio companies including Nysansa, CloudGenix and Moovit this year, and which is now set to exit Spot, a developer of cloud workload management software. The reported price tag is $450m, following $52m in VC funding, which looks to me like a decent return.

Thoma Bravo to execute $100m Exostar acquisition

Fibrosis drug developer Pliant Therapeutics has become the latest life sciences company to launch a successful IPO, floating at the top of its range to raise $144m after increasing the number of shares in the offering by 50%. It also represents an immediate return for Novartis Institutes for BioMedical Research, which bought $10m of shares in the flotation only to see Pliant’s share price shoot up some 50% post-IPO.

Branding Engineer gets IPO plans on track

Canada-based Repare Therapeutics is the latest drug developer to file for an initial public offering, and the precision oncology-focused company is targeting $100m in a Nasdaq IPO. The filing came just days after it raised $15m in equity funding from Bristol Myers Squibb as part of a research collaboration deal, and Repare’s existing investors also include Celgene Switzerland, a participant in its 2017 series A round.

Vroom sets $319m target for IPO

China’s stock markets look set to benefit from increasingly stringent rules in the US, and one of the country’s latest companies to file for an initial public offering is Shenzhen Yanmade Technology. It provides industrial testing equipment for flexible printed circuits and its investors include Legend Capital, which was spun off by Legend Holdings. Yanmade is looking to raise up to $98.8m and it plans to float on the Shanghai Stock Exchange’s Star Market.

Deals

On-demand ride provider Didi Chuxing has raised more than $500m for an autonomous driving subsidiary, in a round led by SoftBank’s second Vision Fund. The spinoff is the outcome of four years of driverless vehicle research from Didi and it has approval to test the technology on roads across three Chinese cities as well as California. Vision Fund was already one of Didi’s key investors, and it took part in a $150m round for the company’s bicycle rental spinoff in April.

Varo Money is one of several digital banks to spring up in the past few years, but it intends to be the first to secure a national bank charter in the United States. It has also closed a $241m series D round featuring automotive insurance specialist Progressive that hiked its overall funding to nearly $420m. Fintech has been one of the notable growth sectors in recent years, but if digital operators can start competing head to head with traditional banks we could see that growth accelerate quite quickly.

E-commerce marketplaces have been one of the more exciting investment areas in Southeast Asia in recent years, and Vietnam’s Tiki has so far been among the market’s winners. It has reportedly raised $130m in a round led by private equity firm Northstar Group, following earlier funding from the likes of CyberAgent, JD.com, Sumitomo and VNG. The company is also said to be in line for a merger with domestic competitor Sendo that would really set it up for the future.

Xiaolinggou plugs into series A round

Microbe processor Ginkgo Bioworks has increased its overall funding to nearly $790m in a $70m funding round that included strategic partner Illumina. The round also featured General Atlantic and Viking Global Investors – both of which backed a $350m vehicle called Ferment Consortium that was formed last October to invest in companies formed and spun off by Ginkgo.

University

Athira accepts $85m series B

Oxford encodes Base Genomics

Funds

Pfizer to augment VC investments with $500m

MassMutual amasses third $100m fund

No need to tell anyone that inclusion and support for black lives is on everyone’s lips right now, not least due to the recent reams of public dedications by different companies’ social media accounts. However, SoftBank is putting actual skin in the game by forming a $100m investment vehicle called the Opportunity Growth Fund specifically to back entrepreneurs and founders of colour. Not that it’s the first corporate to launch such an initiative: Comcast Ventures’ Catalyst Fund was formed in 2011 and Intel Capital put $125m into a Diversity Fund in 2015.

India-based classified listings operator Info Edge has had some success investing off its own balance sheet, particularly with Zomato and PolicyBazaar owner ETechAces, but not it’s looking to establish a dedicated corporate venturing vehicle. Info Edge Venture Fund has a $100m target, and the corporate is putting up almost half. The rest is set to come from external LPs, in what looks to be an increasingly popular model.

Real Tech goes local with latest fund


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

25 May 2020 – SenseTime Expands to Help Track Coronavirus

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

11 May 2020 – Intel picks up Moovit for $900m

Big Stories

Korys, the family office behind the France and Belgium-based retailer Colruyt Group, and Mérieux Equity Partners, the asset management arm of the Institut Mérieux holding company, have set up joint funds targeting companies in the healthcare and nutrition sectors in Europe and North America.

OMX Europe Venture Fund has raised more than €60m from Korys and Mérieux and third party subscribers and is targeting a final close at €90m. OMX Europe will be managed by Mérieux Equity Partners in Europe, with the operational support of Korys’ Life Science team as a key advisor to the fund.

The value of Intel’s acquisition of Israel-based urban mobility app developer Moovit for a $900m enterprise value lies almost as much as what it says about the ecosystem developed there over the past 30 years since Russian immigration after the fall of the Soviet Union.

Israel had always battled its neighbours and developed a strong military but the influx of people needing jobs helped catalyse a startup ecosystem and funding of venture capitalists to enable it.

The integration of corporate research and development and venturing units has catalysed this trend even further over the past decade, as identified in the latest GCV Israelconference in February.

We have seen some big deals so far this year in the financial services sector, with Visa acquiring Plaid and Mastercard joining AvidXchange, but while payments remains localised in many cases the opportunities to join up the global commerce world beckons.

Hence the after-market performance of Australia-listed Afterpay, which surged following China-based Tencent’s acquisition of a 5% stake. Alibaba had its purchase of Western Union’s spinout MoneyGram turned down by US authorities but is also trying to become the global payments provider of choice given Chinese blocks on Visa and Mastercard’s expansion in the world’s second-largest economy.

We live in a world of seemingly the very large and the very small.
An exabyte of data is the equivalent of a stack of DVDs about 255.3 kilometres high. Each transistor in a state-of-the-art chip measures only 5 nanometres (nm) — the length a human fingernail grows in five seconds.
The world increasingly turns around data and processing power and if data is the new oil the 21st century wars could see as many wars fought over control of the ones and zeros as were fought over black gold in the last century. In which case Taiwan becomes an important centre to watch.
In last month’s Global China, Saif Khan and Carrick Flynn argued for maintaining China’s dependence on democracies for advanced computer chips through export controls. These democracies, particularly Taiwan, the US and South Korea, lead the development of the most advanced chips – those with transistors of between 5nm and 16nm.

Japan has struggled to keep up and so it was little surprise in the past week to seeDealStreetAsia report Japanese venture capital firm Jafco has made the final close of its debut Taiwan venture fund at NT$2bn ($67.1m) with limited partners including the National Development Fund of Taiwan.

Funds

Kurma sets the stage for $175m fund

Some areas may not be an obvious choice for investment in the time of lockdown but it seems the automotive sector is well and truly alive with Autotech Ventures announcing that it has closed its second fund at more than $150mthanks to a long list of corporate LPs – though only Lear, Stoneridge, Bridgestone and Volvo were identified. The firm now has more than $270m under management and will, apart from the obvious areas of connectivity, automation and electrification, also explore more niche investments, such as junkyard inventory management technologies.

University

Shift hits play on $70m fund

Fitz Gate seals second Princeton-focused fund

Edinburgh sparks food science incubator

Deals

It is easy enough to forget, with the world’s focus on coronavirus, that other diseases are costing countless more human lives. Chief among these is cancer, some forms of which have become easier to treat but prognoses are still significantly better the earlier the disease is caught. Illumina spun out Grail four years ago to make that early detection a reality through a blood test that can not only detect the presence of more than 50 different cancer indications but can also tell the oncologist where in the body the cancerous tissue is – all while boasting an almost negligible false positive rate of less than 1%. But developing such a test costs a lot of money, so it is heartening to see that Illumina and others have doubled down on the company and backed a $390m series D round that brought Grail’s total funding to some $2bn.

Another company that has done well out of people asked to stay at home is Byju’s, the online education provider backed by Prosus and Tencent, which is looking to add $400m to an ongoing funding round that reportedly already stands at $300m to $350m. Better news for the company still: it is set to push its valuation from $8bn just three months ago to more than $10bn. That seems fast, and it is, but consider that Byju’s added six million users in March alone and India’s lockdown was only implemented in the last week of that month.

Octopus Energy, a British renewable energy supplier that has steadily grown to more than 1.3 million customers since it was launched five years ago, has attracted its first external funding thanks to a $327m commitment from Origin Energy in return for a 20% stake. Origin made the investment specifically to secure a licence for Kraken, Octopus’ cloud-based software platform to interact with customers and enable functionality such as wholesale market trading and consumption forecasting. With Australia increasingly feeling the impact of global warming (even if the catastrophic fires earlier this year already seem like a distant memory), partnering with a green energy supplier is a welcome move.

Another sector that is doing well out of reduced human contact are financial services providers and N26 has wasted no time in adding $100m to a series D round that now stands at $570m. Notably, the additional capital was raised at a flat valuation of $3.5bn. That may not be too unusual for a third tranche, but the company had managed to increase its valuation by $800m between the first and second tranche, backed by Tencent and Allianz X. Consider, however, that N26 actually pulled out of market between the first and second extension, as the UK’s exit from the European Union just caused too much of a headache for the digital bank that relies on an EU-wide banking licence for its business.

Robinhood captures $280m series F

SoftBank and its Vision Fund may have been in the news for all the wrong reasons lately, but that doesn’t mean there is no support left for portfolio companies. Indeed, new and used car trading platform operator Chehaoduo has secured an additional $200m from the Vision Fund and Sequoia Capital to add to a $1.5bn initial series D tranche – supplied in full by the corporate – in February last year. It may not be an obvious candidate to raise money in the current climate, but with trouble brewing elsewhere in the fund’s portfolio, an automotive marketplace and after-sales services provider seems like a decent bet.

SoftBank also hasn’t had the best experience dealing with Mexico’s regulator the Federal Economic Competition Commission (Cofece), having been sanctioned recently because it failed to notify Cofece that it had acquired a larger stake in WeWork. You can understand then that the corporate treaded a bit more carefully with its lead investment in US-based digital lending platform AlphaCredit’s $125m series B round through the Vision Fund. AlphaCredit, which targets customers in Mexico and Colombia, had initially announced the deal in January, but it took until last week for Cofece to give the all-clear. That timing is good news not just for SoftBank and AlphaCredit, but also for the consumers and SMEs that are in desperate need of loans right now to weather the crisis.

Ninja Van picks up $279m in funding

Asapp accesses $185m series B

Flint Hills Resources, the chemicals and biofuel subsidiary of conglomerate Koch Industries, is not a corporate backer we come across often on GCV – in fact, it has seemingly only taken part in half a dozen deals since 2010 – but as the world battles an ever-increasing mountain of plastic polluting the environment, the need for a commercial-scale biodegradable alternative is becoming imperative. Enter RWDC Industries, which is working on just such a material and has secured $133m in a series B round backed by Flint Hills Resources to scale up its US operations by repurposing an idle factory in Athens, Georgia.

Back Market certifies $120m round

ASR processes $119m round

Praxis Precision was co-founded four years ago by faculty from Columbia University and University of Melbourne, but the gene therapy developer – targeting neurological and psychiatric disorders – remained quiet about its business until now, emerging from stealth with more than $100m in funding raised to date from investors including Novo Holdings. All of that money has clearly been put to good use: Praxis already has two assets in phase 2 clinical development, one for major depressive disorder and one for essential tremor.

Enflame lights up $98.7m series B

Exits

Kingsoft Cloud to claim IPO throne

University

Abiomed absorbs Breethe


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

04 May 2020 – FIS Commits $150m to its Corporate Venturing Unit

The Big Three

As highlighted in last week’s podcast, some sectors are flying high and, certainly relative to the global financial crisis a dozen years ago, banking and financial services is one of them.

New York-listed financial technology (fintech) provider FIS has committed $150m to its corporate venturing unit as part of a joined-up approach to open innovation including its FIS FinTech Accelerator and FIS Innovatein48 research and development competition in addition to innovation labs.

Under Joon Cho, FIS Ventures will invest up to $150m in fintech startups over the next three years targeting artificial intelligence and machine learning, digital enablement and automation, data and analytics, security and privacy, distributed ledger technology and financial inclusion.

The blurring of lines between corporate and independent venture capital is continuing apace as all parties consider how best they can support entrepreneurs while fulfilling their five needs: capital, customers, product development, hiring and an exit.

This naturally brings the best investors together with the corporations best able to scale startups and then potentially acquire them, so it is little surprise in many ways to see US-based coffee retailer Starbucks form a co-investment partnership with venture capital firm Sequoia Capital China.

Starbucks said it would also look to form “commercial partnerships with next-generation food and retail technology companies” in China through a statement announcing the agreement.

The average worldwide population increase is currently estimated at 81 million people per year – a figure at this stage fortunately unlikely to be dented much by the Covid-19 pandemic – and all those people require feeding.

As GCV’s agtech supplement in March noted, modern farming practices, such as the use of soil-based and aerial sensors as well as drones, data analytics, and pest and pathogen detection systems, are taking hold. When combined with advanced fertiliser formulations, digital farming technologies developed by startups can substantially reduce nitrogen and nutrient loss and mitigate water pollution.

Enter Pivot Bio, a US-based agriculture technology developer that is trying to harness the power of naturally occurring microbes to provide more nutrients to crops. It has raised $100m in its series C round from a consortium including Bunge Ventures and Continental Grain but is apparently missing one of its earlier corporate backers.

Deals

Fintech on the other hand does not seem to have been affected by the coronavirus to the same extent. Investment and financial advice app developer Stash has raised $112m in a series F round led by $80m from lending marketplace LendingTree. The funding was bagged at an $800m valuation and lifted Stash’s overall funding to more than $290m. CEO Brandon Krieg told Bloomberg it intends to grow its customer base along with brand awareness as finances constrict in the US.

Consumer and business lender DMI Finance likely won’t lack customers in the downturn, and it has just pulled in $123m from video game publisher Nexon at a reported valuation that topped $1bn. India-headquartered DMI secured $200m in non-convertible debenture financing just last month and its commercial partners include Samsung, which is based – like Nexon – in Korea.

And another is business-focused neobank Cross River Bank, which has raised $100m of its own. The series C round comes less than 18 months since Cross River received $100m from backers including corporate CreditEase. The latest round is being co-led by investment adviser V Capital, which will help Cross River expand in its home country of Malaysia.

Inceptio loads up $100m

Paytm is among India’s most valuable startups having been valued at $16bn in a November series G round featuring Ant Financial and SoftBank Vision Fund. The mobile financial services provider is reportedly in talks to raise $100m or more from Microsoft to add to the series G. The round was sized at $1bn but Paytm has only received $720m of the cash so far, and Ant Financial will reportedly need government clearance to supply its share due to new foreign investment regulations.

Although corporates have not been keen on joining in the rush to back cannabis-focused startups, an interesting test case for tech based on traditionally illicit drugs may be Compass Pathways, which is working on a treatment for depression that utilises psilocybin from mushrooms (magic mushrooms, to be precise). The company just pulled in $80mthrough a series B round featuring Otsuka Pharmaceutical’s McQuade Center for Strategic Research and Development, and has received breakthrough therapy designation for its lead product from the FDA. That should be as good a go-ahead sign as any, you’d think.

University

Taysha stakes out $30m seed round

LifeSprout bolts on series A funding

Exits/Losses

SoftBank’s woes continue, the corporate announcing this morning that it expects to booka mammoth loss of nearly $6.6bn on its investment in WeWork over the last financial year – a period when it pledged a $9.5bn financing package to make sure the workspace provider could continue operations. The value of that deal has been hit hard by the shutdowns of WeWork locations across the world in the face of the coronavirus, and it’s worth noting the $6.6bn figure is separate to SoftBank Vision Fund, which has announced a projected loss of more than $16bn over the same period.

D2iQ has raised a touch over $250m from investors including Microsoft, Hewlett Packard Enterprise and Koch Disruptive Technologies since being founded as Mesosphere in 2013, but the cloud software and services provider is reportedly in talks with Google to be acquired. In a sign of the effect the Covid-19 shutdown is having, D2iQ reportedly laid off 34 team members recently, and the prospective purchase would likely value it at more than that $250m, but less than the $775m valuation in its last round two years ago.

To IPO or not to IPO? Right now it seems less of a question than a foregone conclusion for many companies but interestingly, the ones that are opting to go public in this economic downturn seem to be benefitting from the lack of competition. Oncology therapy developer Oric Pharmaceuticals has done so in a $120m initial public offering, floating at the top of its range having increased the number of shares by 50% and then seeing them open more than 60% higher. It had previously raised more than $175m in funding from investors including Taiho, Hartford HealthCare and Memorial Sloan Kettering Cancer Center.

Acacia circles over Woodford assets

Funds

Michigan State to administer $3m pre-seed fund


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

20 April 2020 – Stripe Raises $600m in Series G Plus Audio from our Industrial Sector Webinar

The Big Ones

Digital payment processor Stripe is one of the companies that has seen demand for its product skyrocket in recent weeks as more and more commerce moves online. It has also raised another $600m from investors including GV to meet that demand, taking a series G round valuing it at $35bn pre-money to $850m. The company’s earlier backers include Visa and American Express- both of which invested at a $5bn valuation – and Sumitomo Mitsui Card Company.

There’s been no respite for SoftBank over Easter, as the telecoms giant revealed in its annual report that it expected to book a $16.8bn loss on investments from its Vision Fund in the fiscal year that just closed. That figure, which encompasses a huge loss in value for WeWork along with the disintegration of investments in the likes of OneWeb and Brandless, is staggering, and SoftBank has reportedly frozen its second Vision Fund, which was in the fundraising stage. But with most of its consumer-facing portfolio facing trouble right now, what will happen to that portfolio if those companies find their largest investor has suddenly closed their wallet?

Zomato acquired Uber Eats in a $350m all-share deal in January and now the restaurant listings and food delivery platform is reportedly in talks to buy online grocery delivery service Grofers in a similar deal that will value the latter at $750m. The transaction could hypothetically be sweetened by an investment of $100m to $200m from Grofers’ largest shareholder, SoftBank Vision Fund, though it’s unclear whether that will still stand in light of news SoftBank is freezing its second Vision Fund.

Identity verification seems to be a hot sector all of a sudden (we’ll have more in a minute for you). Onfido, which emerged out of the software incubator of University of Oxford’s tech transfer office Oxford University Innovation eight years ago, has raised $100m. The round featured M12 and Salesforce Ventures, as well as unnamed backers, and was led by TPG Growth. Onfido allows companies to biometrically verify a user’s identity by algorithmically comparing a picture of an ID document, such as a passport, with a selfie. It’s used by more than 1,500 organisations, such as digital bank Revolut. Its early backers include the Seed Fund of Oxford’s Saïd Business School Entrepreneurship Centre.

Deals

Despite suffering several outages in early March, share trading app developer Robinhood has emerged as one of the tech-based companies that have seen demand for their product intensify during the Covid-19 pandemic. Now, the company, whose backers include Alphabet units CapitalG and GV as well as Roc Nation’s Arrive vehicle, is reportedly closing in on $250m in funding. The round looks set to be led by existing backer Sequoia Capital, and to lift Robinhood’s valuation from $7.6bn to $8bn pre-money.

Elsewhere in the fintech world, cross-border remittance service Airwallex has closed a $160m series D round that included Tencent and corporate venturing units Salesforce Ventures and Anzi Ventures at a reported $1.8bn valuation. Airwallex is one of that rare breed of successful Australian startups that have elected to remain in their home country instead of moving to Silicon Valley, and it’s a useful example that you don’t necessarily have to move where the most action is in order to reach those high valuations.

China-based drug developer MabWorks has collected $160m in a two-tranche series C round featuring an investment vehicle for industrial park operator Beijing E-Town Biomedical Park. MabWorks has some 15 assets in clinical trials in China or the US, many of which are targeted at cancer, and is focusing on a monoclonal antibody approach.

As promised, more identity verification for you with BioBatch, which has netted $145m in a series C featuring CreditEase and American Express Ventures. Both corporates took part in BioBatch’s last round – a $30m series B two years ago – and that jump suggests demand for its behavioral biometrics technology has grown sharply during that time.

Consumer finance platform Paidy has raised another $48m from trading group and existing backer Itochu that it added on to the $143m in series D funding it closed in November, bringing the round to $191m. Itochu had contributed to that close, as did fellow corporate investors Visa and PayPal Ventures, and it has now committed a total of $91m to Paidy, which has received $281m in debt and equity financing to date.

Ninja Van has racked up $124m in series D funding over the past year, according to data sourced from DealStreetAsia. Corporates GeoPost, Grab, Carmenta and Intouch Holdings provided a total of $50m while GeoPost has supplied a further $79m in convertible note financing since September 2018. The series D reportedly valued the Southeast Asian last-mile delivery service at about $590m.

Cloud kitchen operator Rebel Foods also operates in India’s food delivery sector and has raised $50m from hedge fund manager Coatue Management. Rebel counts Gojek, Sistema and Northwest Industrial Logistics as early investors but while the Coatue deal may seem an endorsement, it’s worth noting that reports in February suggested it was going to come as part of a round sized at up to $150m, at a $1bn valuation. This is a space that could definitely see some more consolidation in the coming months.

Cerevance, a spinout of Rockefeller University, has created technology that helps it assess post-mortem brain tissue in order to develop treatments for brain diseases like Alzheimer’s. It has also secured $45m in a series B round that included corporate VC units GV and Takeda Ventures. The latter had already taken part in Cerevance’s 2016 series A round but its contribution to this one came in the wake of a December 2019 research agreement between Cerevance and its parent company, pharmaceutical firm Takeda.

Funds

China-based, Southeast Asia-focused venture capital firm ATM Capital has closed a fund backed by corporates Alibaba and 58.com at about $100m, DealStreetAsia reported citing sources privy to the development. Founded in 2017, ATM Capital aims to bring Chinese expertise to bare helping Southeast Asia-based startups grow. The fund is its first and it had set a $200m target for its final close, but sources told DealStreetAsia the Covid-19 crisis had impacted fundraising activities.

Corigin Ventures, the venture capital firm sponsored by US-based real estate developer Corigin, has closed its second fund at approximately $36m. The firm targets consumer and property technology developers in the US and Canada. It invests $100,000 at pre-seed stage and provides between $500,000 and $1.25m for seed-stage deals, with additional capital reserved for follow-on investments. Corigin Ventures began raising the capital in mid-2018 and the fund had a $50m target according to securities filings. It is the first to include contributions from external limited partners, according to TechCrunch.

China-based early-stage venture firm Qiming Venture Partners has closed its seventh fund at $1.1bn with investors including Princeton University Investment Company, the manager of the institution’s $26bn endowment. The fund’s other limited partners include unnamed endowments, foundations, family offices and private pensions. Princeton’s been an investor in Qiming funds since its very first US dollar-denominated vehicle.

Exits

Verizon has agreed to acquire video conferencing software provider BlueJeans for a price reported to be below (but reportedly not that far below) $500m, in a deal that will allow Deutsche Telekom’s DTCP subsidiary to exit. BlueJeans had raised about $175m, its most recent funding coming in a 2015 series E round.


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