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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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Startups Weekly: Flexport, Clutter and SoftBank’s blood money

Posted by on Feb 23, 2019 in alex wilhelm, allianz, Bessemer Venture Partners, Coatue Management, connie loizos, DoorDash, dragoneer investment group, DST Global, Flexport, founders fund, GIC, Ingrid Lunden, Keith Rabois, Lyft, mindworks ventures, Naspers, Panda Selected, Pinterest, sequoia capital, Shunwei Capital, Startups, susa ventures, TC, the wall street journal, Uber, Venture Capital, WaitWhat, Y Combinator | 0 comments

The Wall Street Journal published a thought-provoking story this week, highlighting limited partners’ concerns with the SoftBank Vision Fund’s investment strategy. The fund’s “decision-making process is chaotic,” it’s over-paying for equity in top tech startups and it’s encouraging inflated valuations, sources told the WSJ.

The report emerged during a particularly busy time for the Vision Fund, which this week led two notable VC deals in Clutter and Flexport, as well as participated in DoorDash’s $400 million round; more on all those below. So given all this SoftBank news, let us remind you that given its $45 billion commitment, Saudi Arabia’s Public Investment Fund (PIF) is the Vision Fund’s largest investor. Saudi Arabia is responsible for the planned killing of dissident journalist Jamal Khashoggi.

Here’s what I’m wondering this week: Do CEOs of companies like Flexport and Clutter have a responsibility to address the source of their capital? Should they be more transparent to their customers about whose money they are spending to achieve rapid scale? Send me your thoughts. And thanks to those who wrote me last week re: At what point is a Y Combinator cohort too big? The general consensus was this: the size of the cohort is irrelevant, all that matters is the quality. We’ll have more to say on quality soon enough, as YC demo days begin on March 18.

Anyways…

Surprise! Sort of. Not really. Pinterest has joined a growing list of tech unicorns planning to go public in 2019. The visual search engine filed confidentially to go public on Thursday. Reports indicate the business will float at a $12 billion valuation by June. Pinterest’s key backers — which will make lots of money when it goes public — include Bessemer Venture Partners, Andreessen Horowitz, FirstMark Capital, Fidelity and SV Angel.

Ride-hailing company Lyft plans to go public on the Nasdaq in March, likely beating rival Uber to the milestone. Lyft’s S-1 will be made public as soon as next week; its roadshow will begin the week of March 18. The nuts and bolts: JPMorgan Chase has been hired to lead the offering; Lyft was last valued at more than $15 billion, while competitor Uber is valued north of $100 billion.

Despite scrutiny for subsidizing its drivers’ wages with customer tips, venture capitalists plowed another $400 million into food delivery platform DoorDash at a whopping $7.1 billion valuation, up considerably from a previous valuation of $3.75 billion. The round, led by Temasek and Dragoneer Investment Group, with participation from previous investors SoftBank Vision Fund, DST Global, Coatue Management, GIC, Sequoia Capital and Y Combinator, will help DoorDash compete with Uber Eats. The company is currently seeing 325 percent growth, year-over-year.

Here are some more details on those big Vision Fund Deals: Clutter, an LA-based on-demand storage startup, closed a $200 million SoftBank-led round this week at a valuation between $400 million and $500 million, according to TechCrunch’s Ingrid Lunden’s reporting. Meanwhile, Flexport, a five-year-old, San Francisco-based full-service air and ocean freight forwarder, raised $1 billion in fresh funding led by the SoftBank Vision Fund at a $3.2 billion valuation. Earlier backers of the company, including Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express all participated in the round.

Here’s your weekly reminder to send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets

Menlo Ventures has a new $500 million late-stage fund. Dubbed its “inflection” fund, it will be investing between $20 million and $40 million in companies that are seeing at least $5 million in annual recurring revenue, growth of 100 percent year-over-year, early signs of retention and are operating in areas like cloud infrastructure, fintech, marketplaces, mobility and SaaS. Plus, Allianz X, the venture capital arm attached to German insurance giant Allianz, has increased the size of its fund to $1.1 billion and London’s Entrepreneur First brought in $115 million for what is one of the largest “pre-seed” funds ever raised.

Flipkart co-founder invests $92M in Ola
Redis Labs raises a $60M Series E round
Chinese startup Panda Selected nabs $50M from Tiger Global
Image recognition startup ViSenze raises $20M Series C
Circle raises $20M Series B to help even more parents limit screen time
Showfields announces $9M seed funding for a flexible approach to brick-and-mortar retail
Podcasting startup WaitWhat raises $4.3M
Zoba raises $3M to help mobility companies predict demand

Indian delivery men working with the food delivery apps Uber Eats and Swiggy wait to pick up an order outside a restaurant in Mumbai. ( INDRANIL MUKHERJEE/AFP/Getty Images)

According to Indian media reports, Uber is in the final stages of selling its Indian food delivery business to local player Swiggy, a food delivery service that recently raised $1 billion in venture capital funding. Uber Eats plans to sell its Indian food delivery unit in exchange for a 10 percent share of Swiggy’s business. Swiggy was most recently said to be valued at $3.3 billion following that billion-dollar round, which was led by Naspers and included new backers Tencent and Uber investor Coatue.

Lalamove, a Hong Kong-based on-demand logistics startup, is the latest venture-backed business to enter the unicorn club with the close of a $300 million Series D round this week. The latest round is split into two, with Hillhouse Capital leading the “D1” tranche and Sequoia China heading up the “D2” portion. New backers Eastern Bell Venture Capital and PV Capital and returning investors ShunWei Capital, Xiang He Capital and MindWorks Ventures also participated.

Longtime investor Keith Rabois is joining Founders Fund as a general partner. Here’s more from TechCrunch’s Connie Loizos: “The move is wholly unsurprising in ways, though the timing seems to suggest that another big fund from Founders Fund is around the corner, as the firm is also bringing aboard a new principal at the same time — Delian Asparouhov — and firms tend to bulk up as they’re meeting with investors. It’s also kind of time, as these things go. Founders Fund closed its last flagship fund with $1.3 billion in 2016.”

If you enjoy this newsletter, be sure to check out TechCrunch’s venture capital-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss Pinterest’s IPO, DoorDash’s big round and SoftBank’s upset LPs.

Want more TechCrunch newsletters? Sign up here.


Source: The Tech Crunch

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Rappi raises $200M as Latin American tech investment reaches new highs

Posted by on Aug 31, 2018 in Andreessen Horowitz, Didi Chuxing, DST Global, Food, Latin America, nubank, on-demand delivery, Rappi, Recent Funding, Startups, TC, Uber, unicorn, Venture Capital, Y Combinator | 0 comments

Rappi, the Colombian on-demand delivery startup, has brought in a new round of funding at a valuation north of $1 billion, as first reported by Axios and confirmed to TechCrunch by a source close to the company. DST Global has led the more than $200 million financing, with participation from Andreessen Horowitz and Sequoia — all of which were existing investors in the company.

Rappi kicked off its business delivering beverages and has since expanded into meals, groceries and even tech and medicine. You can, for example, have a pair of AirPods delivered to you using Rappi’s app. The company also has a popular cash withdrawal feature that allows users to pay with credit cards and then receive cash from one of Rappi’s delivery agents.

Rappi charges $1 per delivery. To help keep costs efficient, the company’s fleet of couriers use only motorcycles and bikes.

Simón Borrero, Sebastian Mejia and Felipe Villamarin launched the company in 2015, graduating from Y Combinator the following year. From there, Rappi quickly captured the attention of American venture capitalists. A16z’s initial investment in July 2016 was the Silicon Valley firm’s first investment in Latin America.

The new capital will likely be used to help Rappi compete with Uber Eats, which is active across Latin America.

The round for Rappi is notable for a Latin American company, as is its new unicorn status. Only one other Latin American startup, Nubank, has surpassed a billion-dollar valuation with new venture capital funding so far in 2018. São Paulo-based Nubank makes a no-fee credit card and is also backed by DST.

Investment in Latin American tech continues to reach new highs. In the first quarter of 2018, more than $600 million was invested. That followed a record 2017, which was the first time VCs funneled more than $1 billion into the continent’s tech ecosystem during a 12-month period.

The rise in investment is mostly due to sizable fundings for companies like Rappi and Nubank, as well as Brazil-based 99, which sold to fellow ride-hailing business Didi Chuxing in a deal worth $1 billion earlier this year.


Source: The Tech Crunch

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How Airbnb went from renting air beds for $10 to a $30 billion hospitality behemoth

Posted by on Aug 12, 2018 in affordable housing, Airbnb, brian chesky, Co-founder, Culture, Denver, DST Global, economy, General Catalyst, joe gebbia, Lyft, New York, New York City, paul graham, San Francisco, sharing economy, TC, Uber, vacation rental, Y Combinator, Yuri Milner | 0 comments

Happy 10th anniversary Airbnb.

When we first wrote about the company a decade ago, it was a spare website cobbled together by its founders for the low low price of $20,000.

In the years since, the marketplace Airbnb created has radically transformed the rental landscape in cities, created an entirely new hospitality market and surged to a valuation of roughly $31 billion.

As it prepares for an initial public offering in 2019, it’s worth a look back on how far the company has come, and how its founders’ vision for a new type of way to monetize unused apartment space for budget travelers has become the engine driving a new kind of travel and new experiments in modern living (for better or worse).

When we wrote about the company in 2008, the pitch for Airbnb’s services had already been set.

AirBed and Breakfast will definitely appeal to younger travelers, and conventioneers who can’t find a regular hotel room. In overbooked Denver, where 20,000 people will be descending for the Democratic National Convention, hotels are already sold out. More than 600 people have found alternative accommodations through AirBed and Breakfast, and 50 to 100 new listings appear every day. Prices range from $20 a night for an airbed to $3,000 for an entire house.

Indeed, it’s likely that there would have been no Airbnb without the 2008 presidential campaign. The election created a serendipitous confluence of an incredibly unique historical moment where a groundswell of demand could be met by a new type of supply and Airbnb’s co-founders Brian Chesky and Joe Gebbia were there to capitalize on the opportunity.

It’s good to remember that in 2008, the co-founders were claiming that they could barely make rent. And they were certainly strapped for cash for the fledgling business. There, again, the 2008 election presented them with an opportunity.

“The world thought we were crazy,” Gebbia recalled in an interview.

But the RISD grads had that $20,000 in seed funding and politically themed cereal boxes to tide the business over. It was the cereal gimmick — selling Obama O’s and Captain McCains – for $40 a box that got them the hearing from Y Combinator co-founder Paul Graham and acceptance into the accelerator.

Three years later, the business was a rocket ship. It had pulled in a (whopping for the time) $112 million investment from Andreessen Horowitz, DST Global, and General Catalyst and was already on the path to bulldozing the old models of hospitality with a shared vision for visiting any city anywhere in the world.

“Airbnb, with its strong management team and engaged worldwide community is on a path to become a transformational company,” said Yuri Milner founder of DST Global, in a truly understated statement at the time.

So transformational, in fact, that the company would go on to raise billions more atop that hundred-million-plus Series B round.

But that success has not come without a certain cost.

For all of the ways in which Airbnb claims to be unlocking the local economy, it can’t avoid the accusations that it has locked out local renters in favor of financial speculators who are buying up apartments to lease to a traveling class rather than sustain a viable and vibrant neighborhood for the actual citizens that live there.

One study, published earlier this year (and funded by the AFL-CIO and the Hotel Trades Council), indicated that the company significantly impacted rental prices in New York.

… the study estimates that Airbnb has driven up long-term rental prices by 1.4 percent, or $384 per year, for the median New York City renter. The research suggests that both restricted availability in the long-term rental market and increased financial incentives in the short-term rental market account for this increase.

It’s those kinds of figures that have led to the sometimes aggressive pushback from local real estate advocates. Indeed, it was just about three years ago that San Francisco protestors from the Coalition on Homelessness took over Airbnbs headquarters to protest what they viewed as the company’s complicity in the surge in evictions and homelessness in the city.

In a 2015 letter to New York legislators, Airbnb’s public policy chief at the time, David Hantman, wrote, “The majority of hosts use the money they earn to pay their bills and stay in their homes.”

And in a separate blog post (now apparently lost in a site redesign) around the same time, Hantman took Airbnb’s argument further. “In fact, Airbnb makes cities more affordable,” Hantman was quoted as writing in Vice. “Sixty two percent of Airbnb hosts in New York said Airbnb helped them stay in their homes and the typical Airbnb host in New York earns $7,530 per year — a modest, but significant amount that can make a huge difference for families.”

The company’s kerfuffles with regulators (a sort of mirror image of the woes faced by fellow marketplace service Uber and its American competitor Lyft) have not effected the way investors are valuing the virtual room-for-rent-filled house that Chesky and Gebbia have built.

As we reported earlier this year, Airbnb raised nearly $4.4 billion in funding as a private company, to date, and reports say it is on track to make between $3.5 billion and $4 billion in revenues this year from its business connecting travelers with private homes and an array of other related services.

That’s a long, long way from matching would-be attendees to the 2008 Democratic National Convention with air mattresses or sofas in Denver.


Source: The Tech Crunch

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