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Startups Weekly: Will the real unicorns please stand up?

Posted by on Jun 1, 2019 in Aileen Lee, alex wilhelm, bluevoyant, Co-founder, CRM, crowdstrike, cybersecurity startup, dashlane, economy, editor-in-chief, entrepreneurship, eric lefkofsky, Finance, garry tan, Indonesia, initialized capital, money, neologisms, Pegasus, Private Equity, records, SoFi, Softbank, Southeast Asia, starbucks, Startup company, Startups, startups weekly, stewart butterfield, tiny speck, unicorn, valuation, Venture Capital, virtual reality | 0 comments

Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s noteworthy venture capital deals, funds and trends. Before I dive into this week’s topic, let’s catch up a bit. Last week, I wrote about the sudden uptick in beverage startup rounds. Before that, I noted an alternative to venture capital fundraising called revenue-based financing. Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets.

Here’s what I’ve been thinking about this week: Unicorn scarcity, or lack thereof. I’ve written about this concept before, as has my Equity co-host, Crunchbase News editor-in-chief Alex Wilhelm. I apologize if the two of us are broken records, but I think we’re equally perplexed by the pace at which companies are garnering $1 billion valuations.

Here’s the latest data, according to Crunchbase: “2018 outstripped all previous years in terms of the number of unicorns created and venture dollars invested. Indeed, 151 new unicorns joined the list in 2018 (compared to 96 in 2017), and investors poured more than $135 billion into those companies, a 52% increase year-over-year and the biggest sum invested in unicorns in any one year since unicorns became a thing.”

2019 has already coined 42 new unicorns, like Glossier, Calm and Hims, a number that grows each and every week. For context, a total of 19 companies joined the unicorn club in 2013 when Aileen Lee, an established investor, coined the term. Today, there are some 450 companies around the globe that qualify as unicorns, representing a cumulative valuation of $1.6 trillion. 😲

We’ve clung to this fantastical terminology for so many years because it helps us classify startups, singling out those that boast valuations so high, they’ve gained entry to a special, elite club. In 2019, however, $100 million-plus rounds are the norm and billion-dollar-plus funds are standard. Unicorns aren’t rare anymore; it’s time to rethink the unicorn framework.

Last week, I suggested we only refer to profitable companies with a valuation larger than $1 billion as unicorns. Understandably, not everyone was too keen on that idea. Why? Because startups in different sectors face barriers of varying proportions. A SaaS company, for example, is likely to achieve profitability a lot quicker than a moonshot bet on autonomous vehicles or virtual reality. Refusing startups that aren’t yet profitable access to the unicorn club would unfairly favor certain industries.

So what can we do? Perhaps we increase the valuation minimum necessary to be called a unicorn to $10 billion? Initialized Capital’s Garry Tan’s idea was to require a startup have 50% annual growth to be considered a unicorn, though that would be near-impossible to get them to disclose…

While I’m here, let me share a few of the other eclectic responses I received following the above tweet. Joseph Flaherty said we should call profitable billion-dollar companies Pegasus “since [they’ve] taken flight.” Reagan Pollack thinks profitable startups oughta be referred to as leprechauns. Hmmmm.

The suggestions didn’t stop there. Though I’m not so sure adopting monikers like Pegasus and leprechaun will really solve the unicorn overpopulation problem. Let me know what you think. Onto other news.

Image by Rafael Henrique/SOPA Images/LightRocket via Getty Images

IPO corner

CrowdStrike has set its IPO terms. The company has inked plans to sell 18 million shares at between $19 and $23 apiece. At a midpoint price, CrowdStrike will raise $378 million at a valuation north of $4 billion.

Slack inches closer to direct listing. The company released updated first-quarter financials on Friday, posting revenues of $134.8 million on losses of $31.8 million. That represents a 67% increase in revenues from the same period last year when the company lost $24.8 million on $80.9 million in revenue.

Startup Capital

Online lender SoFi has quietly raised $500M led by Qatar
Groupon co-founder Eric Lefkofsky just-raised another $200M for his new company Tempus
Less than 1 year after launching, Brex eyes $2B valuation
Password manager Dashlane raises $110M Series D
Enterprise cybersecurity startup BlueVoyant raises $82.5M at a $430M valuation
Talkspace picks up $50M Series D
TaniGroup raises $10M to help Indonesia’s farmers grow
Stripe and Precursor lead $4.5M seed into media CRM startup Pico

Funds

Maveron, a venture capital fund co-founded by Starbucks mastermind Howard Schultz, has closed on another $180 million to invest in early-stage consumer startups. The capital represents the firm’s seventh fundraise and largest since 2000. To keep the fund from reaching mammoth proportions, the firm’s general partners said they turned away more than $70 million amid high demand for the effort. There’s more where that came from, here’s a quick look at the other VCs to announce funds this week:

~Extra Crunch~

This week, I penned a deep dive on Slack, formerly known as Tiny Speck, for our premium subscription service Extra Crunch. The story kicks off in 2009 when Stewart Butterfield began building a startup called Tiny Speck that would later come out with Glitch, an online game that was neither fun nor successful. The story ends in 2019, weeks before Slack is set to begin trading on the NYSE. Come for the history lesson, stay for the investor drama. Here are the other standout EC pieces of the week.

Equity

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I debate whether the tech press is too negative or too positive in its coverage of tech startups. Plus, we dive into Brex’s upcoming round, SoFi’s massive raise and CrowdStrike’s imminent IPO.


Source: The Tech Crunch

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Aptiv takes its self-driving car ambitions (and tech) to China

Posted by on Apr 17, 2019 in Aptiv, Automation, Automotive, automotive industry, boston, China, Co-founder, Delphi, Emerging-Technologies, Karl Iagnemma, Las Vegas, Lyft, manufacturing, NuTonomy, pittsburgh, president, Robotics, self driving cars, shanghai, Singapore, transport, Transportation, United States | 0 comments

Aptiv, the U.S. auto supplier and self-driving software company, is opening an autonomous mobility center in Shanghai to focus on the development and eventual deployment of its technology on public roads.

The expansion marks the fifth market where Aptiv has set up R&D, testing or operational facilities. Aptiv has autonomous driving operations in Boston, Las Vegas, Pittsburgh and Singapore. But China is perhaps its most ambitious endeavor yet.

Aptiv has never had any AV operations in China, but it does have a long history in the country including manufacturing and engineering facilities. The company, in its earlier forms as Delphi and Delco has been in China since 1993 — experience that will be invaluable as it tries to bring its autonomous vehicle efforts into a new market, Aptiv Autonomous Mobility President Karl Iagnemma told TechCrunch in a recent interview.

“The long-term opportunity in China is off the charts,” Iagnemma said, noting a recent McKinsey study that claims the country will host two-thirds of the world’s autonomous driven miles by 2040 and be trillion-dollar mobility service opportunity.

“For Aptiv, it’s always been a question of not ‘if’, but when we’re going to enter the Chinese market,” he added.

Aptiv will have self-driving cars testing on public roads by the second half of 2019.

“Our experience in other markets has shown that in this industry, you learn by doing,” Iagnemma explained.

And it’s remark that Iagnemma can stand by. Iagnemma is the co-founder of self-driving car startup nuTonomy, one of the first to launch a robotaxi service in 2016 in Singapore that the public—along with human safety drivers — could use.

NuTonomy was acquired by Delphi in 2017 for $450 million. NuTonomy became part of Aptiv after its spinoff from Delphi was complete.

Aptiv is also in discussions with potential partners for mapping and commercial deployment of Aptiv’s vehicles in China.

Some of those partnerships will likely mimic the types of relationships Aptiv has created here in the U.S., notably with Lyft . Aptiv’s self-driving vehicles operate on Lyft’s ride-hailing platform in Las Vegas and have provided more than 40,000 paid autonomous rides in Las Vegas via the Lyft app.

Aptiv will also have to create new kinds of partnerships unlike those it has in the U.S. due to restrictions and rules in China around data collection, intellectual property and creating high resolution map data.


Source: The Tech Crunch

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CXA, a health-focused digital insurance startup, raises $25M

Posted by on Mar 13, 2019 in Asia, asia pacific, b capital, Banking, ceo, China, Co-founder, cxa group, economy, Eduardo Saverin, Europe, Facebook, Finance, funding, Fundings & Exits, healthcare, Indonesia, insurance, Louisiana, money, North America, openspace ventures, singtel, SingTel Innov8, Southeast Asia, Venture Capital | 0 comments

CXA Group, a Singapore-based startup that helps make insurance more accessible and affordable, has raised $25 million for expansion in Asia and later into Europe and North America.

The startup takes a unique route to insurance. Rather than going to consumers directly, it taps corporations to offer their employees health flexible options. That’s to say that instead of rigid plans that force employees to use a certain gym or particular healthcare, a collection over 1,000 programs and options can be tailored to let employees pick what’s relevant or appealing to them. The ultimate goal is to bring value to employees to keep them healthier and lower the overall premiums for their employers.

“Our purpose is to empower personalized choices for better living for employees,” CXA founder and CEO Rosaline Koo told TechCrunch in an interview. “We use data and tech to recommend better choices.”

The company is primarily focused on China, Hong Kong and Southeast Asia where it claims to works with 600 enterprises including Fortune 500 firms. The company has over 200 staff, and it has acquired two traditional insurance brokerages in China to help grow its footprint, gain requisite licenses and its logistics in areas such as health checkups.

We last wrote about CXA in 2017 when it raised a $25 million Series B, and this new Series C round takes it to $58 million from investors to date. Existing backers include B Capital, the BCG-backed fund from Facebook co-founder Eduardo Saverin, EDBI — the investment arm of the Singapore Economic Development Board — and early Go-Jek backer Openspace Ventures, and they are joined by a glut of big-name backers in this round.

Those new investors include a lot of corporates. There’s HSBC, Singtel Innov8 (of Singaporean telco Singtel), Telkom Indonesia MDI Ventures (of Indonesia telco Telkom), Sumitomo Corporation Equity Asia (Japanese trading firm) Muang Thai Fuchsia Ventures (Thailand-based insurance firm), Humanica (Thailand-based HR firm) and PE firm Heritas Venture Fund.

“There are additional insurance companies and strategic partners that we aren’t listing,” said Koo.

Rosaline Koo is founder and CEO of CXA Group

That’s a very deliberate selection of large corporates which is part of a new strategy to widen CXA audience.

The company had initially gone after massive firms — it claims to reach a collective 400,000 employees — but now the goal is to reach SMEs and non-Fortune 500 enterprises. To do that, it is using the reach and connections of larger service companies to reach their customers.

“We believe that banks and telcos can cross-sell insurance and banking services,” said Koo, who grew up in LA and counts benefits broker Mercer on her resume. “With demographic and work life event data, plus health data, we’re able to target the right banking and insurance services.

“We can help move them away from spamming,” she added. “Because we will have the right data to really target the right offering to the right person at the right time. No firm wants an agent sitting in their canteen bothering their staff, now it’s all digital and we’re moving insurance and banking into a new paradigm.”

The ultimate goal is to combat a health problem that Koo believes is only getting worse in the Asia Pacific region.

“Chronic disease comes here 10 years before anywhere else,” she said, citing an Emory research paper which concluded that chronic diseases in Asia are “rising at a rate that exceeds global increases.”

“There’s such a crying need for solutions, but companies can’t force the brokers to lower costs as employees are getting sick… double-digit increases are normal, but we think this approach can help drop them. We want to start changing the cost of healthcare in Asia, where it is an epidemic, using data and personalization at scale in a way to help the community,” Koo added.

Talking to Koo makes it very clear that she is focused on growing CXA’s reach in Asia this year, but further down the line, there are ambitions to expand to other parts of the world. Europe and North America, she said, may come in 2020.


Source: The Tech Crunch

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Y Combinator president Sam Altman is stepping down amid a series of changes at the accelerator

Posted by on Mar 8, 2019 in Accelerator, advisor, articles, Artificial Intelligence, chairman, chief executive officer, Co-founder, Michael Seibel, OpenAI, partner, paul graham, president, sam altman, San Francisco, Startups, Venture Capital, Y Combinator, yc | 0 comments

Sam Altman, the well-known president of the prolific Silicon Valley accelerator Y Combinator, is stepping down, the firm shared in a blog post on Friday.

Altman is transitioning into a chairman role with other YC partners stepping up to take on his day-to-day responsibilities, as first reported by Axios. Sources tell TechCrunch YC has no succession plans. YC’s core program is currently led by chief executive officer Michael Seibel, who joined the firm as a part-time partner in 2013 and assumed the top role in 2016.

The news comes amid a series of shake-ups at the accelerator, which is expected to demo its latest batch of 200-plus companies in San Francisco March 18 and 19. In Friday’s blog post, YC expands on some of those changes, including the firm’s decision to move it’s HQ to San Francisco, which TechCrunch reported earlier this week.

“We are considering moving YC to the city and are currently looking for space,” YC writes. “The center of gravity for new startups has clearly shifted over the past five years, and although we love our space in Mountain View, we are rethinking whether the logistical tradeoff is worth it, especially given how difficult the commute has become. We also want to be closer to our Bay Area alumni, who disproportionately live and work in San Francisco.”

In addition to moving it’s HQ up north, YC has greatly expanded the size of its cohorts — so much so that it’s next demo day will have two stages — and it’s writing larger checks to portfolio companies.

Altman, who joined YC as a partner in 2011 and was named president in 2014, will focus on other efforts, including OpenAI, a research organization in which he co-chairs. Altman was the second-ever YC president, succeeding YC co-founder Paul Graham in 2014. Graham is currently an advisor to YC.


Source: The Tech Crunch

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India’s Ola spins out a dedicated EV business — and it just raised $56M from investors

Posted by on Mar 1, 2019 in Ankit Jain, Asia, Automotive, Bhavish Aggarwal, carsharing, Co-founder, Collaborative Consumption, Companies, didi, Didi Chuxing, DST Global, electric vehicle, Flipkart, funding, Fundings & Exits, head, India, ola cabs, Sachin Bansal, Sequoia, Softbank, SoftBank Group, Steadview Capital, temasek, Tencent, tiger global, transport, Uber, United States | 0 comments

Ola, Uber’s key rival in India, is doubling down on electric vehicles after it span out a dedicated business, which has pulled in $56 million in early funding.

The unit is named Ola Electric Mobility and it is described as being an independent business that’s backed by Ola. TechCrunch understands Ola provided founding capital, and it has now been joined by a series of investors who have pumped Rs. 400 crore ($56 million) into Ola Electric. Notably, those backers include Tiger Global and Matrix India — two firms that were early investors in Ola itself.

While automotive companies and ride-hailing services in the U.S. are focused on bringing autonomous vehicles to the streets, India — like other parts of Asia — is more challenging thanks to diverse geographies, more sparse mapping and other factors. In India, companies have instead flocked to electric. The government had previously voiced its intention to make 30 percent of vehicles electric by 2030, but it has not formally introduced a policy to guide that initiative.

Ola has taken steps to electrify its fleet — it pledged last year to add 10,000 electric rickshaws to its fleet and has conducted other pilots with the goal of offering one million EVs by 2022 — but the challenge is such that it has spun out Ola Electric to go deeper into EVs.

That means that Ola Electric won’t just be concerned with vehicles, it has a far wider remit.

The new company has pledged to focus on areas that include charging solutions, EV batteries, and developing viable infrastructure that allows commercial EVs to operate at scale, according to an announcement. In other words, the challenge of developing electric vehicles goes beyond being a ‘ride-hailing problem’ and that is why Ola Electric has been formed and is being capitalized independently of Ola.

An electric rickshaw from Ola

Its leadership is also wholly separate.

Ola Electric is led by Ola executives Anand Shah and Ankit Jain — who led Ola’s connected car platform strategy — and the team includes former executives from carmakers such as BMW.

Already, it said it has partnered with “several” OEMs and battery makers and it “intends to work closely with the automotive industry to create seamless solutions for electric vehicle operations.” Indeed, that connected car play — Ola Play — likely already gives it warm leads to chase.

“At Ola Electric, our mission is to enable sustainable mobility for everyone. India can leapfrog problems of pollution and energy security by moving to electric mobility, create millions of new jobs and economic opportunity, and lead the world,” Ola CEO and co-founder Bhavish Aggarwal said in a statement.

“The first problem to solve in electric mobility is charging: users need a dependable, convenient, and affordable replacement for the petrol pump. By making electric easy for commercial vehicles that deliver a disproportionate share of kilometers traveled, we can jumpstart the electric vehicle revolution,” added Anand Shah, whose job title is listed as head of Ola Electric Mobility.

The new business spinout comes as Ola continues to raise new capital from investors.

Last month, Flipkart co-founder Sachin Bansal invested $92 million into the ongoing Series J round that is likely to exceed $1 billion and would value Ola at around $6 billion. Existing backer Steadview Capital earlier committed $75 million but there’s plenty more in development.

A filing — first noted by paper.vc — shows that India’s Competition Commission approved a request for a Temasek-affiliated investment vehicle’s proposed acquisition of seven percent of Ola. In addition, SoftBank offered a term sheet for a prospective $1 billion investment last month, TechCrunch understands from an industry source.

Ola is backed by the likes of SoftBank, Tencent, Sequoia India, Matrix, DST Global and Didi Chuxing. It has raised some $3.5 billion to date, according to data from Crunchbase.


Source: The Tech Crunch

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With $90 million in funding, the Ginkgo spinoff Motif joins the fight for the future of food

Posted by on Feb 26, 2019 in Amazon Web Services, bEYOND meat, Bill Gates, biotechnology, Breakthrough Energy Ventures, Chief Operating Officer, Co-founder, Food, food and drink, Ginkgo Bioworks, head, Impossible foods, jack ma, Jason Kelly, jeff bezos, John Doerr, manufacturing, Marc Benioff, Masayoshi Son, meat, meat substitutes, meg whitman, michael bloomberg, monsanto, partner, protein, Reid Hoffman, richard branson, TC, Tyson Foods, Vinod Khosla, web services | 0 comments

Continuing its quest to become the Amazon Web Services for biomanufacturing, <a href=”http://ginkgobioworks.com/”>Ginkgo Bioworks has launched a new spinoff called Motif Ingredients with $90 million in funding to develop proteins that can serve as meat and dairy replacements.

It’s the second spinout for Ginkgo since late 2017 when the company partnered with Bayer to launch Joyn Bio, a startup researching and developing bacteria that could improve crop yields.

Now, with Motif, Ginkgo is tackling the wild world of protein replacements for the food and beverage industry through the spinoff of Motif Ingredients.

It’s a move that’s likely going to send shockwaves through several of the alternative meat and dairy companies that were using Ginkgo as their manufacturing partner in their quest to reduce the demand for animal husbandry — a leading contributor to global warming — through the development of protein replacements.

“To help feed the world and meet consumers’ evolving food preferences, traditional and complementary nutritional sources need to co-exist. As a global dairy nutrition company, we see plant- and fermentation-produced nutrition as complementary to animal protein, and in particular cows’ milk,” said Judith Swales, the Chief Operating Officer, for the Global Consumer and Foodservice Business, of Fonterra, an investor in Ginkgo’s new spinout.

To ensure the success of its new endeavor Ginkgo has raised $90 million in financing from industry insiders like Fonterra and the global food processing and trading firm Louis Dreyfus Co., while also tapping the pool of deep-pocketed investors behind Breakthrough Energy Ventures, the climate focused investment fund financed by a global gaggle of billionaires including Marc Benioff, Jeff Bezos, Michael Bloomberg, Richard Branson, Bill Gates, Reid Hoffman, John Doerr, Vinod Khosla, Jack Ma, Neil Shen, Masayoshi Son, and Meg Whitman.

Leading Ginkgo’s latest spinout is a longtime veteran of the food and beverage industry, Jonathan McIntyre, the former head of research and development at another biotechnology startup focused on agriculture — Indigo Ag.

McIntyre, who left Indigo just two years after being named the company’s head of research and development, previously had stints at Monsanto, Nutrasweet, and PepsiCo (in both its beverage and snack divisions).

“There’s an opportunity to produce proteins,” says McIntyre. “Right now as population grows the protein supply is going to be challenged. Motif gives the ability to create proteins and make products from low cost available genetic material.”

Photo: paylessimages/iStock

Ginkgo, which will have a minority stake in the new company, will provide engineering and design work to Motif and provide some initial research and development work on roughly six to nine product lines.

That push, with the financing, and Ginkgo’s backing as the manufacturer of new proteins for Motif Ingredients should put the company in a comfortable position to achieve McIntyre’s goals of bringing his company’s first products into the market within the next two years. All Motif has to pay is cost plus slight overhead for the Ginkgo ingredients.

“We started putting Motif together around February or March of 2018,” says Ginkgo co-founder Jason Kelly of the company’s plans. “The germination of the business had its inception earlier though, from interacting with companies in the food and beverage scene. When we talked to these companies the strong sense we got was if there had been a trusted provider of outsourced protein development they would have loved to work with us.”

The demand from consumers for alternative sources of protein and dairy — that have the same flavor profiles as traditional dairy and meats — has reached an inflection point over the past few years. Certainly venture capital interest into the industry has soared along with the appetite from traditional protein purveyors like Danone, Tyson Foods, and others to take a bite out of the market.

Some industry insiders think it was Danone’s 2016 acquisition of WhiteWave in a $12.5 billion deal that was the signal which brought venture investors and food giants alike flocking to startups that were developing meat and dairy substitutes. The success of companies like Beyond Meat and Impossible Foods has only served to prove that a growing market exists for these substitutes.

At the same time, solving the problem of protein for a growing global population is critical if the world is going to reverse course on climate change. Agriculture and animal husbandry are huge contributors to the climate crisis and ones for which no solution has made it to market.

Investors think cultured proteins — fermented in tanks like brewing beer — could be an answer.

Photograph: David Parry/EPA

“Innovative or disruptive solutions are key to responding to changing consumer demand and to addressing the challenge of feeding a growing world population sustainably,” said Kristen Eshak Weldon, Head of Food Innovation & Downstream Strategy at Louis Dreyfus Company (LDC), a leading merchant and processor of agricultural goods. “In this sense, we are excited to partner with Motif, convinced that its next-generation ingredients will play a vital role.”

Breakthrough Energy Ventures certainly thinks so.

The investment firm has been busy placing bets across a number of different biologically based solutions to reduce the emissions associated with agriculture and cultivation. Pivot Bio is a startup competing with Ginkgo’s own Joyn Bio to create nitrogen fixing techniques for agriculture. And earlier this month, the firm invested as part of a $33 million round for Sustainable Bioproducts, which is using a proprietary bacteria found in a remote corner of Yellowstone National Park to make its own protein substitute.

For all of these companies, the goal is nothing less than providing a commercially viable technology to combat some of the causes of climate change in a way that’s appealing to the average consumer.

“Sustainability and accessible nutrition are among the biggest challenges facing the food industry today. Consumers are demanding mindful food options, but there’s a reigning myth that healthy and plant-based foods must come at a higher price, or cannot taste or function like the animal-based foods they aim to replicate,” said McIntyre, in a statement. “Biotechnology and fermentation is our answer, and Motif will be key to propelling the next food revolution with affordable, sustainable and accessible ingredients that meet the standards of chefs, food developers, and visionary brands.”


Source: The Tech Crunch

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Ousted Flipkart founder Binny Bansal aims to help 10,000 Indian founders with new venture

Posted by on Feb 5, 2019 in Amazon Web Services, Asia, binny Bansal, ceo, Co-founder, Companies, computing, E-Commerce, executive, Flipkart, India, online payments, Sachin Bansal, Startup company, United States, Walmart, web services | 0 comments

Flipkart co-founder Binny Bansal’s next act is aimed at helping the next generation of startup founders in India.

Bansal has already etched his name into India’s startup history after U.S. retail giant Walmart paid $16 billion to take a majority stake in its e-commerce business to expand its rivalry with Amazon. Things turned sour, however, when he resigned months after the deal’s completion due to an investigation into “serious personal misconduct.”

In 2019, 37-year-old Bansal is focused on his newest endeavor, xto10x Technologies, a startup consultancy that he founded with former colleague Saikiran Krishnamurthy. The goal is to help startup founders on a larger scale than the executive could ever do on his own.

“Person to person, I can help 10 startups but the ambition is to help 10,000 early and mid-stage entrepreneurs, not 10,” Bansal told Bloomberg in an interview.

Bansal, who started Flipkart in 2007 with Sachin Bansal (no relation) and still retains a four percent share, told Bloomberg that India-based founders are bereft of quality consultancy and software services to handle growth and company building.

“Today, software is built for large enterprises and not small startups,” he told the publication. “Think of it as solving for startups what Amazon Web Services has done for computing, helping enterprises go from zero to a thousand servers overnight with no hassle.”

“Instead of making a thousand mistakes, if we can help other startups make a hundred or even few hundred, that would be worth it,” Bansal added.

Bansal served as Flipkart’s CEO from 2007 to 2016 before becoming CEO of the Flipkart Group. He declined to go into specifics of the complaint against him at Flipkart — which reports suggest came about from a consensual relationship with a female employee — and, of the breakdown of his relationship with Sachin Bansal, he said he’s moved on to new things.

It isn’t just xto10x Technologies that is keeping him busy. Bansal is involved in investment firm 021 Capital where he is the lead backer following a $50 million injection. Neither role at the two companies involves day-to-day operations, Bloomberg reported, but, still, Bansal is seeding his money and experience to shape the Indian startup ecosystem.


Source: The Tech Crunch

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Entrepreneur First eyes further Asia growth to build its global network of founders

Posted by on Jan 29, 2019 in Accelerator, Artificial Intelligence, Asia, bangalore, berlin, Business, business incubators, Co-founder, economy, Entrepreneur, entrepreneur first, Europe, India, London, paris, Reid Hoffman, Singapore, Startup company, women in technology | 0 comments

British startup venture builder Entrepreneur First is eying additional expansion in Asia, where its operation is now as large as it is in Europe, as it expands its reach in 2019. But, despite serving a varied mixture of markets, the company said its founders are a fairly unified breed.

The Entrepreneur First program is billed as a “talent investor.” It matches prospective founders and, through an accelerator program, it encourages them to start and build companies which it backs with financing. The organization started out in London in 2011, and today it is also present in Paris and Berlin in Europe and, in Asia, Singapore, Hong Kong and (soon) Bangalore. To date, it says it has graduated over 1,200 founders who have created more than 200 companies, estimated at a cumulative $1.5 billion on paper.

Those six cities cover a spread of unique cultures — both in general life and startup ecosystems — but, despite that, co-founder Matthew Clifford believes there’s actually many commonalities between among its global founder base.

“It’s really striking to me how little adjustment of the model has been necessary to make it work in each location,” Clifford — who started EF with Alice Bentinck — told TechCrunch in an interview. “The outliers in each country have more in common with each other and their fellow compatriots… we’re uncovering this global community of outliers.”

Despite the common traits, EF’s Asia expansion has added a new dimension to the program after it announced a tie-in with HAX, one of the world’s best-known hardware-focused accelerator programs, that will see the duo co-invest in hardware startups via a new joint program.

“We saw early that hardware was a much more viable part of the market in Asia than it is traditionally seen in Europe [and] needed a partner to accelerate the talent,” Clifford said.

Already, the first four beneficiaries of that partnership have been announced — AIMS, BOPSIN, Neptune Robotics and SEPPURE — each of which graduated the first EF cohort in Hong Kong, its fourth in Asia so far. Going forward, Clifford expects that around three to five startups from each batch will move from EF into the joint initiative with HAX. The program covers Asia first but it is slated to expand to EF’s European sites “soon.”

Entrepreneur First held its first investor day in Hong Kong this month

Another impending expansion is EF’s first foray into India via Bangalore which starts this month, and there could be other new launches in 2019.

“We’ll continue to grow by adding sites but we are not in a rush,” Clifford said. “The most important thing is retraining quality of talent. It may be six months until we add another site in Asia but there’s no shortage of places we think it will work.

“We operate a single global fund,” he added. “We’re a talent investor and we believe there are strong network effects in that. The people who back us are really betting on the model… [that it’s] an asset class with great returns.

While it appears that its global expansion drive is a little more gradual than what was previously envisaged — backer and board member Reid Hoffman told TechCrunch in 2016 that he could imagine it in 50 cities — Clifford said EF isn’t raising more capital presently. That previous investment coupled with management fees is enough fuel in the tank, he said. The organization also operates a follow-on fund but it has one major exit to date, Pony Technology, the AI startup bought by Twitter for a reported $150 million.

Still, with hundreds of companies in the world with EF on the cap table, Clifford said he is bullish that his organization can target an international-minded breed of entrepreneur worldwide. The impact he sees is one that will work regardless of any local constraints placed on them.

“With our global network of capital, we always want capital, not talent, to be the limiting factor. Our goal is to make being ‘an EF company’ more relevant to your identity as a startup regardless of your location,” he told TechCrunch


Source: The Tech Crunch

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Go-Jek makes first close of $2 billion round at $9.5 billion valuation

Posted by on Jan 25, 2019 in alibaba group, alipay, Asia, China, Co-founder, Collaborative Consumption, Companies, funding, Fundings & Exits, go-jek, Google, grab, Indonesia, JD.com, Philippines, Singapore, Softbank, Southeast Asia, TC, Tencent, Thailand, Uber, vietnam | 0 comments

Southeast Asia-based ride-sharing firm Go-Jek is making progress with its plan to raise up to $2 billion in fresh capital to fund its battle with close rival Grab .

Indonesia-headquartered Go-Jek has closed an initial chunk of that round after a collection of existing investors, including Google, Tencent and JD.com, agreed to invest around $920 million towards it, three sources with knowledge of the investment told TechCrunch.

The deal, which we understand could be announced as soon as next week, will value Go-Jek’s business at around $9.5 billion, one source told TechCrunch. With existing investors on board, the company is now actively soliciting checks from other backers to take it to its target. The capital is likely to go towards deepening its presence in new markets and furthering its fintech push.

A Go-Jek representative declined to respond when contacted by TechCrunch for comment on its fundraising efforts.

This incoming round excluded, Go-Jek has raised more than $2 billion from investors to date, including a $1.4 billion round that closed last year and valued its business at $5 billion.

Founded in 2015, Go-Jek began in motorbike taxis before expanding to four-wheels, service on demand and fintech. It decided to go after a $2 billion raise last year — having seen Grab gobble up Uber’s local business in Southeast Asia — but it has taken some time to make progress. That’s partially down to an effort to ‘clean the cap table’ by buying out some early investors and longer-serving or former staff with equity, two sources told TechCrunch.

Likewise, there has also been discussion around including the acquisition of JD.com’s local JD.id business, valued at over $1 billion, in the deal. As far as we know, a resolution hasn’t been found despite lengthy talks.

An acquisition of JD.id would not only see JD.com’s influence deepen with Go-Jek, but it would give the ride-hailing startup a strong position in Indonesia’s e-commerce space, which includes three other unicorns: Alibaba-owned Lazada, Tokopedia — which is backed by Alibaba and SoftBank’s Vision Fund — and Bukalapak, which also recently raised money for growth.

There is some doubt, however. Speaking to Reuters this week, co-founder Kevin Aluwi denied Go-Jek has plans to enter e-commerce.

Fundraising for Southeast Asia’s ride-sharing companies went up a few notches last year after Uber decided to exit the region through a deal with Grab, which saw the U.S. firm pick up a potentially-lucrative 27.5 percent stake in Singapore-based Grab.

Grab raised a $3 billion Series H round, anchored by a $1 billion injection from Toyota, but the company plans to increase that fundraising effort to as much as $5 billion, as we reported at the tail end of last year.

Why all the huge checks? At stake is a dominant position within a fast-growing online market.

Ride-hailing in Southeast Asia is poised to grow from an $8 billion annual business in 2018 to $31 billion by 2025, according to a report from Google and Temasek. Indonesia alone is tipped to account for nearly half of that figure.

The report from Google and Temasek forecasts major growth for ride-hailing in Southeast Asia

With a cumulative population of more than 620 million people and increasing internet access, Southeast Asia has emerged from the shadows of China and India to become an attractive market for startups and tech companies. Chinese giants like Tencent and Alibaba have stepped up investment areas in recent years, with e-commerce, fintech and other ‘ground zero’ infrastructure services among their targets as the region begins to turn digital in the same way China has.

That’s where Grab and Go-Jek get interesting because, beyond simply catering to transportation, both companies have expanded to offer services on-demand, like e-groceries, as well as payments and financial services such as loans, remittance and insurance. The goal is to become the region’s one-stop ‘super app’ like WeChat, Alipay and Meituan in China.

So far, Go-Jek has fanned out beyond ride-hailing to offer fintech and other services in Indonesia, but it is still getting to grips with the regional play. It expanded to Vietnam, Thailand and Singapore last year while the Philippines is a work in progress following a setback after it was denied an operating permit earlier this month.

Already, though, it is making plans for the Philippines after it acquired Coins.ph, a fintech startup that is likely to be the base for a local push into payments and financial services. The deal was officially undisclosed, but sources told TechCrunch that Go-Jek has paid around $72 million — that potentially makes it the company’s largest acquisition to date. That shows how serious Go-Jek is both about its expansion efforts and its fintech business.

Go-Jek CEO Nadiem Makarim worked at McKinsey for three years before starting the companyn[Photographer: Wei Leng Tay/Bloomberg]

In the here and now, Go-Jek claims more than 125 million downloads in Indonesia, over a million drivers and some 300,000 food merchants. It claims to process 100 million transactions per month, while Aluwi told Reuters that total transactions on its platforms crossed $12.5 billion last year. That doesn’t mean net income, however, since the company takes only a slice of customer’s ride-sharing fares and payment volumes.

Grab, meanwhile, operates in eight markets in Southeast Asia. It claims over 130 million downloads and more than 2.5 billion completed rides to date. Grab is assumed to not yet be profitable but it has said that it made $1 billion in revenue in 2018. It projects that the figure will double this year.

The company has raised around $6.8 billion from investors, according to data from Crunchbase, and Grab was last valued at $11 billion.


Source: The Tech Crunch

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ICOs are increasingly just for venture capitalists

Posted by on Sep 12, 2018 in Bitcoin, blockchain, brian armstrong, ceo, China, civil, Co-founder, coinbase, cryptocurrencies, cryptocurrency, economy, Finance, Huobi, ICOs, initial coin offering, investor, mco, money, TC, U.S. Securities and Exchange Commission, United States, Venture Capital | 0 comments

The rollercoaster-get-rich ICOs of 2017 are over — crypto companies are waking up to the idea that VC investors aren’t so bad after all.

Companies used initial coin offerings (ICOs) to raise some $5.5 billion in cryptocurrency-based funding last year. As an emerging investment system with no regulation, nearly anyone was allowed in. The knock-on effect was that many who rode the wave made huge profits, often into the millions of U.S. dollars, as a 10X return seemed to become the minimum standard among those getting crypto-rich.

The trend went into overdrive in 2018, when the price of Bitcoin hit a peak of nearly $20,000 and Ethereum notched $1,200. ICO funding hit $6.3 billion in only the first three months of the year, as noted by Coindesk, but, fast forward six months and a new trend has emerged. Public ICOs, which allow anyone to invest, are increasingly replaced by a new approach of limited, private sales that consist only of accredited investors and close connections. Many ICOs today include no public sale component, with retail investors forced to wait until a token is listed on an exchange.

Private sale only

Telegram’s huge $1.7 billion ICO best exemplifies the change.

ICOs in 2017 began to include a private pre-sale before the ‘open’ public sale stage, the idea being to attract big bucks and in some cases give incentives like discounts. But Telegram opted to keep its entire sale public. It also stuck to accepting money from accredited investors in the U.S. — those who are legally certified to make investments — rather than opening its doors to anyone wanting to own a piece of its token sale.

That’s a trend that has been repeated in other ICOs, including the recent $32 million “seed” round for Terra and its stable coin project. Terra co-founder Daniel Shin explained to TechCrunch that it will hold a second round of private sale investment, but that’ll be reserved for investment professionals and others in the network.

Legally, of course, this makes absolute sense.

The SEC is steadily increasing its crackdown on ICOs, and it has long been standard for companies planning ICOs to overlook citizens of the U.S, China and often other countries where the legalities are unclear from taking part in the sales. But, actually, the rationale of private sales goes beyond legalities.

Professional investor benefits

The crypto industry has woken up to the reality that getting your capital from a handful of professional investors can be more advantageous than a bunch of regular people.

For one thing, dealing with a dozen investors is far easier than a Telegram group that numbers tens of thousands. Professional investors are more accustomed to giving a company money and letting it use it independently, but retail investors in the crypto space tend to be more demanding and unrealistic as they seek a quick return on their money. While liquidity is a major appeal for all in an ICO, VCs tend to hold a longer-term approach than retail investors who look to flip and move to the next money-making opportunity. Or, in times of downturn such as right now, investors have deeper pockets to ride out recessions.

There’s a popular refrain that ICOs mean not having to deal with “Evil Venture Capitalists”, but a community of retail investors is demanding in its own way. Plenty of ICO projects waste time and precious resources putting out mundane press releases that are devoid of news just to produce something that they hope will placate their thirsty community of retail investors, and miraculously give their token a price jump. For example, inking a “strategic partnership” with the American Chamber of Commerce Korea isn’t news — getting actual sales is.

This kind of distraction and allocation of resources makes no sense when you are setting out building a company or a product, which ultimately the founders of these projects are doing. As any experienced founder or investor will say, retaining focus is key in those early times.

Added to that, professional investors can actually help with the building by leveraging their network. Whether that is assisting on hiring in the competitive blockchain industry, introducing potential customers — American Chamber of Commerce Korea eat your heart out — bringing on other investors, etc.

That’s why in the aforementioned case, Terra opted to bring four crypto exchanges into its private sale — no doubt their influence will be key in building what remains a hugely ambitious project. Other companies that raised large ICOs, including TenX and MCO, have publicly expressed interest in holding new investment rounds to bring in professional VCs. That’s because money alone won’t open doors, but often connections can.

To recap: professional VCs can be more trusting, less of a distraction and more useful, but there are some instances in which a more open public approach should be a part of an ICO. That’s when it comes to building a community.

The exception: Community

The term “community” has been thoroughly bastardized by ICOs, but there are some projects that — at least on paper — can benefit by allowing specific types of people, people that will use the product, to get involved early.

Huobi, the exchange, developed a token for its users earlier this year, while chat app Line is also minting a token that it hopes will be used as part of its messaging platform. In both cases, neither company held an ICO, but they did use a crypto token to build a community.

Civil, the startup hoping to ‘fix’ media using the blockchain, is holding an ICO that’s open to members of the public. That’s also a community play, as the CVL token will be required to create newsrooms on its platform, and also to interact with them, such as challenging stories written by reporters.

Other technical projects out there are doing the same — focusing squarely on the community they are building for and adopting lower target figures for their ICO fundraising.

The technology space is so vast that there are exceptions, but it is certainly notable that there are relatively few credible projects planning ICOs that include retail investor participation. A report co-authored by PwC shows that the general pace of ICO investing settled in Q2 2018. If you ignore outliers such as Huobi, Telegram and EOS — the $6 billion project that fundraised for a year — then activity has certainly settled down after an explosive 12-months of growth.

Increased stability is likely to mean that the trend of private sales continues. Traditional VCs are launching dedicated crypto funds and those in the crypto space are formalizing investment vehicles of their own, all while the SEC and other regulators across the world intensify their gaze on ICOs. VC capital is likely to play a more pronounced role in funding ICOs than ever before.

That’s not to say that the retail investment phase is over. Speaking at TechCrunch Disrupt last week, Coinbase CEO Brian Armstrong sketched out his vision of the future in which all company cap tables are “tokenized.”

He foresees retail investors across the world being free to invest in security tokens that operate as a more accessible offshoot to traditional investment systems like the New York Stock Exchange, the NASDAQ etc. Whether that extends to participation in ICOs themselves remains to be seen.

Coinbase CEO Brian Armstrong believes retail investors have a big future in the crypto market

Disclosure: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.


Source: The Tech Crunch

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