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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.

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Source: The Tech Crunch

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Starbucks challenger Luckin snags $200M investment on $2.2B valuation

Posted by on Dec 12, 2018 in alibaba, alibaba group, Apps, Asia, Beijing, China, Coffee, E-Commerce, Ele.me, Food, food and drink, food delivery, funding, GIC, idreamsky, luckin, managing partner, Seattle, starbucks | 0 comments

Luckin, a startup that vows to topple Starbucks’ dominance in China, announced on Wednesday that it’s lifted its valuation to $2.2 billion after raising $200 million in a series B funding round.

That came only five months after the coffee upstart, which soft-launched in January, picked up $200 million in investment. Luckin has been on a spending spree to open shop and burnt through $150 million within the first six months in operation, its founder said in July when the company had a cash reserve of 2 billion yuan, or roughly $290 million.

Luckin currently operates across 21 major Chinese cities, totaling more than 1,700 shops. For comparison, Starbucks’s footprint spanned 3,300 stores in China as of May, though one has to take into account that the Seattle coffee chain entered China nearly 20 years ago.

Different from Starbucks, Luckin’s brick-and-mortar facilities are a mix of sit-down cafes and pickup booths, which double as delivery hubs, and take-out kitchens that are solely for delivery staff to pick up caffeine-infused orders and put them in customers’ hands within 30 minutes.

As a result, Luckin managed to build a dense network targeting office workers who may be drawn to the idea of coffee delivery because they can’t leave their desk. There’s at least one Luckin location within a 500-meter radius anywhere in downtown Shanghai and Beijing, the company claimed.

The light speed at which Luckin has expanded in less than a year probably got on the nerves of Starbucks, which went on to team up with Alibaba-owned food delivery giant Ele.me in August to bring coffee to people’s doorstep. The American company aims to expand its delivery services to 30 cities in China by the end of 2018.

Luckin’s co-founder and chief executive officer Qian Zhiya, who is the former chief operating officer at one of China’s largest auto rental firms CAR Inc, said her startup will continue to invest in products, technology and business development to improve user experience following the new round.

Luckin raised the fresh capital from existing investors Singapore sovereign wealth fund GIC, Chinese government-controlled China International Capital Corporation, Joy Capital and Dazheng Capital. Liu Erhai, founding and managing partner of Joy Capital, joined Luckin’s board of directors following the close of the round. Liu’s investment portfolio includes Car Inc, Facebook’s old Chinese rival Renren and Hong Kong-listed game publisher iDreamsky.


Source: The Tech Crunch

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