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.
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.
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.
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.
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.