The Big Ones
Digital payment processor PayPal agreed to acquire Japanese consumer finance service Paidy for about $2.7bn. Paidy provides a buy-now-pay-later service that allows customers to make instant credit purchases that can be paid back on a monthly basis. PayPal will use the acquisition to strengthen its capabilities and presence in the domestic payments market in Japan. Following the close of the deal in the fourth quarter of 2021, Paidy will continue to operate under the leadership of founder and executive chairman Russell Cummer and president and CEO Riku Sugie. The company had raised $585m of overall financing prior to the acquisition announcement, including $337m of equity funding.
Varo Bank, a US-based digital bank that counts automotive insurance provider Progressive as a backer, raised $510m in a round led by investment manager Lone Pine Capital.
Declaration Partners, Eldridge, Marshall Wace, Berkshire Partners’ Stockbridge unit and funds and accounts managed by BlackRock took part in the round, as did Gallatin Point Capital, HarbourVest Partners, TPG’s The Rise Fund and Warburg Pincus. It valued the company at $2.5bn, according to Reuters. Founded in 2015, Varo provides digital banking services without a minimum balance requirement or the overdraft fees associated with traditional banks. It also offers additional banking products including automatic saving schemes and short-term loans of up to $100m.
British cybersecurity technology developer Snyk collected $530m in a series F round at a valuation of $8.5bn. The injection consisted of $300m in new money and $230m in secondary funding. The round featured project management technology provider Atlassian, chemical and energy group Koch Industries and enterprise software provider Salesforce. Asset manager Sands Capital and investment firm Tiger Global Management co-led the round, which included Accel, Addition, Alkeon, Baillie Gifford, funds managed by BlackRock, Boldstart Ventures, Canaan Partners, Coatue, Franklin Templeton, Geodesic Capital, Lone Pine Capital, T Rowe Price, Temasek and Whale Rock Capital Management. Snyk has built a cloud-based IT security software tool, Developer Security Platform, which helps app developers create safer products. Some 1,200 organisations including Asurion, Google, Intuit, Revolut and Salesforce use the company’s platform and its total funding stands at $775m.
China-based semiconductor wafer manufacturer FerroTec received $511m in a series B round featuring communications equipment producer Yangtze Optical FC (YOFC). The round was co-led by State-owned investor Capital Operation and Sunic Capital. It also included Bocom International Holdings and CCB International, on behalf of financial services firms Bank of Communications and China Construction Bank. SDIC Chuangyi, a subsidiary of State Development & Investment Corp (SDIC), also took part in the round, as did FTZ Fund, China SME Development Fund, Orient Securities Capital Investment and China International Capital Corporation’s CICC Capital unit. FerroTec produces semiconductors, automotive electronics, medical devices and other industrial equipment and components. It plans to use the funding to reach a monthly production capacity of 200,000 12-inch silicon wafers by the end of 2022.
Spiber, a Japanese synthetic biomaterial developer synthetic spun out of Keio University and backed by corporates Archer Daniels Midland (ADM), Toyoshima, Ebara, Toyota Boshuko and Dai-Chi Life, raked in ¥34.4bn ($312m) in funding. Private equity firm Carlyle led the round through its Carlyle Japan Partners fund and was joined by investment and financial services group Fidelity, Cool Japan Fund and Baillie Gifford. The round valued the company at over $1.2bn post-money. Founded in 2007, Spiber produces synthetic silk and other materials using synthetic proteins with no need for the spiders and silkworms usually required. The company is looking to capitalise on a growing market for sustainable textiles and will put the proceeds of the round into accelerating its expansion and commercialisation plans.
Germany-headquartered automotive manufacturer Volkswagen intends to set up a €300m ($356m) corporate venture capital fund to invest in startups and decarbonisation initiatives. Another Germany-based automotive manufacturer, BMW, launched a $300m second fund for its BMW i Ventures subsidiary last Summer. A third, Daimler, spun off its 1886Ventures research hub into a separate entity in December 2020.
Baidu Ventures, the corporate venturing arm of China-based internet company Baidu, raised $400m for its third fund. The fundraising has increased the unit’s assets under management to over $700m. The fund will primarily be used to invest in early-stage technology startups in artificial intelligence (AI) technology-focused business sectors. Baidu Ventures has already tapped the fund to complete several investments including in Tsing Standard, a developer of electric vehicle testing technology, and cancer drug and diagnostics technology developer Gene+.