Global Venturing Review 6 August 2016
The week's review of venturing activity across our three titles, Global Corporate Venturing, Global University Venturing and Global Government Venturing, is taken from our weekly podcast - see below for details.
PEOPLE
Patwardhan takes venture partner role at CreditEase
Anju Patwardhan, formerly chief innovation officer at Standard Chartered Bank, will make strategic fintech and VC fund investments on behalf of lending platform CreditEase.
Chang leaves SoftBank for Eight Roads
Joe Chang, a partner at SoftBank China Venture Capital, has left for a similar role in the China office of Fidelity subsidiary Eight Roads Ventures.
University Corner:
Williams publishes move to University Ventures
Troy Williams had spent five years as president of Macmillan New Ventures before becoming CEO of its enterprise solutions division, and has now left to join Bertelsmann-backed University Ventures.
Government Department:
Alquraini crosses Skybridge to London
Hesham Alquraini, formerly a vice-president of Kuwait Investment Authority, will lead investment firm Skybridge Capital's London office.
Hu, the current CEO of South China Morning Post, is set to join Singaporean investment firm Temasek in December.
FUNDS
Ex-Disney Steamboat partner Dan Beldy’s new VC firm, Powerplant Ventures, has raised $42m for a new fund that aims to invest in emerging plant-centric companies. Dan pinged GCV to say there were “no corporates in this first fund but have a few we are close with”.
Aviation group HNA has become a more active participant in the corporate venturing space of late and has cemented that drive with $336m of funding for tech accelerator RocketSpace. RocketSpace provides services for high-growth startups (alumni include Uber and Spotify) at its San Francisco campus, and will use the HNA cash to take the model worldwide. The UK and HNA's home country of China are the priorities.
UniCredit pays entrance fee to $100m Anthemis fund
Financial services firm UniCredit is an anchor investor in the digital fintech venture capital and advisory firm's first dedicated fund, which has reached a $60m first close.
Hearst and Fitch team up for fintech fund
Financial data provider Fitch Group is collaborating with Hearst Media's business division on Financial Venture Fund, which will invest in financial information, services and technology startups.
Sun Life joins Plug and Play backers
The insurance group will provide mentorship and business development support to startups in Plug and Play Tech Center's insurance vertical.
Government Department:
Infocomm insures start of the future
NTUC Income has partnered Infocomm Investments for a third edition of insurance technology accelerator program Future Starter.
The organisation has launched an accelerator through its World Food Programme that will focus on ending hunger by 2030.
University Corner
Tata and UC hires team for fund
The US-based University of California is setting up a $100m to $150m venture capital fund in partnership with Ratan Tata, chairman emeritus of India-based conglomerate Tata Sons Ltd.
In February, RNT Associates, the privately held investment firm of Ratan Tata, and the chief investment officer’s office of the University of California, announced a partnership to jointly fund startups and early-stage enterprises in India over the next 10 years.
The core team involves Mathias Imbach, who has been associated with RNT Associates, Mayank Singhal, who previously worked as an associate director at Singapore investment firm Temasek and, from the University of California side, Tim Recker, a source told Deal Street Asia.
EXITS
Salesforce.com paid $360m to acquire Steelbrick in December, after its corporate venturing unit Salesforce Ventures had funded the company at series B and C stage. Salesforce Ventures must be making more strategically shrewd investments because its parent has now acquired another portfolio company, Quip, for a reported $750m in cash and stock. Quip, the developer of a collaborative document processing platform, had disclosed $45m in funding.
Cheetah Mobile curates News Republic acquisition
Intel Capital-backed News Republic has been acquired by Cheetah Mobile for $57m, after raising about $9m from backers also including Xange Private Equity and Creathor Venture.
Konga Nigeria is one of three notable players in Nigeria's e-commerce sector, but the Naspers-backed platform is said to have approached the other two - Jumia and Yudala - over a prospective acquisition. Konga has reportedly raised up to $89m in VC funding but the latest earnings call from investment firm Kinnevik, which owns 34% of the company, valued it at only $35m.
E-commerce platform Jet.com emerged two years ago on a tidal wave of hype proclaiming it as a potential Amazon killer. It hasn't quite worked out that way so far, despite some $570m of funding, but an early exit could be on the horizon for investors including Alphabet and Alibaba as reports suggest Wal-Mart is in talks to buy the company. A source told the Wall Street Journal the price could potentially be as high as $3bn, which would enable the corporate investors to more than double their money in under a year. If reports regarding Jet's ongoing losses are accurate however, that might be a longshot.
Is it an exit, is it an investment? Either way, it is big. VC activity seems to have slowed somewhat of late as M&A deals - notably Oracle's $9bn acquisition of Netsuite and SolarCity's forthcoming merger with Tesla - steal the headlines, so it's somewhat appropriate that today's Big Deal is Chinese ride sharing platform Didi Chuxing's forthcoming $7bn acquisition of rival Uber China, with the end result being a company worth a combined $35bn.
Expect that figure to rise substantially in the near future. China recently passed a law mandating a minimum charge for rides, and without the need for intense subsidising, the combined entity could likely move into profit relatively quickly. The deal also included a $1bn investment in Uber by Didi Chuxing itself, and regional operators like Ola, Grab and Lyft must surely feel a chill at the consolidation of the industry's two biggest global players.
INVESTMENTS
The dust still hasn't cleared on Didi Chuxing's $7bn acquisition of Uber China but the deal is already painting events in the ride hailing sector in a new light. Southeast Asia-based Grab is set to close a funding round that could exceed $600m, and which will reportedly be co-led by Didi Chuxing and SoftBank, just as news breaks that Uber, now Didi Chuxing's largest shareholder, is redeploying 150 engineers from China to Southeast Asia to boost its growth there. Seems like a pretty big conflict of interest on Didi's side, but it appears it'll have a sizeable stake in the region either way.
Go-Jek began life as an Indonesian ride hailing platform that utilised ojeks - small motorcycles - but it's grown quickly and now functions as a one-stop destination for a range of on-demand services covering transportation, logistics, food delivery, mobile payment and lifestyle services. That growth is now going to be boosted by $550m in funding from backers including Rakuten, and may well include expansion to neighbouring Southeast Asian countries where it will face competition from the likes of Grab.
Yixin Capital, a China-based online automotive financing platform, has raised $550m from a consortium including local corporations Bitauto, Tencent, Baidu and JD.com.
Bitauto will hold an approximately 47% equity stake in Yixin Capital on a fully diluted basis and will have control over Yixin Capital with majority of voting power at the board upon closings, according to Deal Street Asia.
In June, Chinese auto information website operator Bitauto raised $300m from internet companies Tencent, Baidu and JD.com and an additional, undisclosed investor. Tencent, Baidu and JD bought 2.5 million newly issued ordinary shares of Bitauto for $20.23 per American depositary share, Bitauto said.
Time Warner has paid $583m for a 10% share of online TV and movie streaming subscription service Hulu as part of a deal that will also see it providing content for a live TV streaming service expected to start early next year. The valuation is about three times that at which Providence Equity Partners exited Hulu in 2012, but it gives Warner a stake in the platform, the other owners of which are Comcast, Disney and 21st Century Fox. It's a sign that maybe video streaming services will be structured similarly to music platforms like Spotify and Deezer, which made record companies shareholders as part of content licensing deals.
Intel Capital has made strategic investments in three Israel-situated companies - Velostrata, Sedona Systems and Panoply.io - leading an early-stage round for each one and committing a total of $25m. Marcin Hejka, Intel Capital MD for Greater Europe and India, told GCV they are "innovative products or technologies that in one way or another are driving development of the technology ecosystem in their market segments....[and] are synergistic to Intel’s strategy in those specific areas.”
AND Intel Capital tips CognitiveScale toward $21.8m round
The corporate venturing unit co-led artificial intelligence software provider CognitiveScale's first publicly disclosed round with VC firm Norwest Venture Partners. First deal from Intel Capital’s Diversity Fund since appointing Trina Van Pelt and Christine Herron as co-heads the week before.
Protein therapeutics developer Ambrx has received $45m in funding from a consortium of China-situated investors that includes Fosun Pharma, Sinopharm and Humanwell Healthcare. US-based Ambrx had raised substantial funding from backers like Roche and Merck Serono before agreeing an acquisition las year by a Chinese group that included Fosun Pharma and pharmaceutical company WuXi PharmaTech.
Ad analytics technology provider Yieldbot has taken its overall funding to more than $60m with a $35m series C round led by investment firm Staley Capital. Yieldbot, backed by ad agency KBS at series A stage, will put the cash toward boosting its sales and marketing and is now also mulling growth through strategic acquisitions.
Carousell, the Southeast Asian creator of a mobile listings marketplace for second hand goods, has completed a $35m series B round led by e-commerce and fintech company Rakuten, through its Rakuten Ventures unit. Rakuten has backed Carousell, which will use the funding to expand from the five countries in which it presently operates, since its $800,000 seed round.
Biochemical technology producer Renmatix has raised $31m in new capital, according to a securities filing, taking its overall funding to about $140m since 2007. No word on who has invested the money, but Renmatix's previous backers include strategic partners Total, BASF and Waste Management.
Accenture takes DynamicAction stake in $15m round
Accenture, which invested through its Accenture Ventures unit, will also be a reseller for the company's retail analytics software as part of a strategic collaboration agreement. McKinsey and other consultancies are also increasingly active CVCs.
Birchbox closes $15m in convertible note round
The Comcast-backed beauty product e-commerce company has received the convertible note financing to hold it over until it becomes cash flow positive.
Given the really large venture debt rounds earlier this year for Uber but slowing exit markets for IPOs and M&A (see our GCV June piece on corp exits) means we could see potential more of these bridge-style debt/convertible notes, judging by CVC Thomas Grota’s Medium piece.
Government Department:
Diablo rises to new series C heights
BDC Capital has supported both tranches of an oversubscribed $37m series C round.
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The text was first published on www.GlobalCorporateVenturing.com NOTE GUV and GGV on hols for the next two weeks but GCV will continue to publish.