News > Venture Capital

Zenefits tops list of 2015's fastest growing unicorns
Venture Capital
  Cloud-based HR software developer Zenefits was the fastest growing unicorn this year -- in percentage terms -- growing by a staggering 800%. The startup, which tops a list compiled by CB Insights, was last valued at $4.5 billion in May when it raised $500 million. The round was equal to the company’s entire valuation a year ago when it raised
The top 10 cities to launch a startup
Venture Capital
<p>The cost of living, competition for talent, and access to capital are just a few hurdles facing startups. Forbes broke down the top 10 cities entrepreneurs should look to launch a startup:</p> <p> Kuala Lumpar- This Malaysian city is cheaper than Singapore, and has a good test market of Chinese, Indonesian, and Indian users.<br /> Beijing- China may not equate with freedom of ideas, but entrepreneurship is becoming more desired in the country. China has set up a venture capital fund for startups, and is giving tax deductions.<br /> Warsaw- With a bigger internal market and strong entrepreneurial history, Poland has more opportunity than nearby Slovakia or Czech Republic. Google is opening a campus in Warsaw this year.<br /> Moscow- The Soviets encouraged a large number of quality engineers, who are now available to the business world.<br /> Bangalore- The startup scene in this Indian city has been heavy on the engineering and tech development. The city hosts a number of startup-related events each week for engineers and entrepreneurs.<br /> Sydney- Startups in Sydney are starting to think more globally, and several collaborative co-working events are encouraging the dialogue.<br /> Tunis- The Arab spring changed the city, spurring the use of tech products to engage and mobilize the communities.<br /> London- There is a record number of venture capital funds pouring into the digital sector of London. The government is eager to offer startup loans and tax breaks to encourage innovation.<br /> Cairo- The Egyptian city has a large number of young, educated graduates ready to work in the startup world. Accelerators and crowdfunding is taking off in the country.<br /> Sofia- The capital of Bulgaria has one of the lowest income tax rates and one of the fastest internet speeds, making it a regional hub.</p> <p>Photo: Aeropixels Photography</p>
SE Asia VC Ardent blurs lines with recruitment arm
Venture Capital
<p>Gone are the days when venture capitalists would just chuck their cash at the most likely winner and hope for the best. VCs today are much more hands-on, and none more so than Southeast Asia-focused Ardent Capital which is now taking on the biggest startup bottleneck with Ardent Hired.</p> <p>The newly launched recruitment service, which claims to be the first of its kind, is a new way for Ardent to bag the best talent for its startups. The service is not entirely new, Ardent has had internal team working on recruitment for some time. Led by John Thornton, the team has made hires for Ardent portfolio companies such as aCommerce, Moxy and HappyFresh.</p> <p>Thornton will now head up Ardent Recruit to build up a network through which Ardent’s startups – and other third party clients -- can source their people. Noting the challenge startups have finding talent, Thornron recently told e27:<br /> The traditional forms of hiring and [the] way we attract candidates are changing. Companies must have a winning brand and different methods to woo the candidate … One of the things we aim to address is the ability to get in touch with the candidate.<br /> Ardent -- which describes itself as “venture capital and builder” – is as much about building an ecosystem as it is about building startups, blurring the lines between VC, accelerator, and portfolio company.</p> <p>Its flagship startup aCommerce is a case in point. The logistics firm, which provides services to Southeast Asian ecommerce startups, including Ardent’s portfolio companies, is led by Paul  Srivoakaul, who is also partner and co-founder of Ardent Capital.</p> <p>Photo: Flazingo Photos</p> <p>&nbsp;</p>
Video: Founders can make or break a startup
Venture Capital
<p>"Founders are paramount," says Hendrick Lee, managing partner at Palm Drive Ventures, explains to NexChange at "Going Global: Startups' paths to funding and expansion in Asia." Founders create the culture of the company. Startup founders will grow and learn with their companies, but they need to be obsessive, dedicated entrepreneurs, he says.</p> <p>&nbsp;</p>
Fenox backs Jibo, is this the future of robotics startups?
Venture Capital
This week Indiegogo-funded robotics startup Jibo Inc revealed its latest undisclosed round of funding led by Fenox Venture Capital. Its product – Jibo – is a family robot that represents the latest in a series of VC deals involving robotics. But not all these investments have been quite so adorable. For its part, Jibo – which has raised more than
Australia struggles to grow tech space as investment sags
Venture Capital
<p>The mining boom is long over and Australia is still nursing its hangover. The country’s economy needs a new bag of tricks and the government is turning to the tech, but with a 9.2% drop in business investment in last quarter, it’s a massive struggle.</p> <p>The disappointing figures, released on Thursday, come despite efforts to drive up investment in the sector, including a new visa scheme to attract Chinese angels.</p> <p>The Wall Street Journal reports that Australia’s new prime minister, Malcolm Turnbull -- who made his own fortune through tech investments – is now getting his government to release an innovation paper which could propose tax breaks to angel investors.</p> <p>It could also allow new businesses to crowdsource funding of up to $3.6 million a year—more than the U.S. government’s $1 million cap. But with Australian VC investments accounting for just $7.50 per capita -- compared with $75 in the U.S, and $150 in Israel – it has long way to go before it can attract sufficient investment</p> <p>Photo: paul bica</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p>
London calling: Silicon Valley’s Draper seeks “royalty rounds” across the pond
Venture Capital
<p>Top stateside venture capitalist Tim Draper, founder of Draper Fisher Jurvetson, is heading to the U.K. with a new fund, and a compelling new investment strategy.</p> <p>Business Insider reports that the fund – Draper Oakwood – is not after equity, or even debt. Instead, it's looking to back European start-ups with “royalty rounds” that essentially give Draper a cut in the firm’s future revenues. CEO Amer Sarfraz is running the fund, while Draper is putting his name to it. Sarfaz explains:<br /> “Our principles are straightforward — provide capital which is entrepreneur-friendly, don’t interfere in running other people’s business, and don’t dilute existing shareholders and management teams. The UK needs more innovative sources of capital, beyond just old-fashioned equity and debt.”<br /> According the firm's website, the fund will invest based  on a company's revenue generating potential. Royalty payments will continue until an agreed royalty cap – expressed as a multiple of the initial equity investment -- is reached.</p> <p>It is not clear how the fund will operate in terms of capital raising and distributions. But it's an interesting proposition in an industry where early stage investors are focused only on exits.</p> <p>&nbsp;</p> <p>Photo: Peace6x</p>
Didi confirms Ele.me deal as it moves from taxis to food
Venture Capital
<p>After weeks of rumors, China's taxi app giant Didi Kuaidi has confirmed its investment in the country's largest food delivery startup, and fellow unicorn, Ele.me.</p> <p>Tech In Asia reports that Didi is looking to tap the synergies between the two firms by creating a unified system through which users can order both food and transport. The mutually beneficial strategy also chimes well with the two startups’ mutual backer: local tech major Tencent.</p> <p>Didi is not the first to tap this online-to-offline (o2o) synergy. Rival cab firm Uber rolled out UberEats, which uses the firm’s existing fleet to offer customer a new food delivery service.</p> <p>Also, Softbank, which holds an indirect stake in Didi via Alibaba, will also be aware of more tie up opportunities in its portfolio, having backed a slew of firms in both the taxi space (Ola, GrabTaxi), and the o2o delivery space (Red Mart Gorpers), across Asia. Can we expect more o2o tie-ups on the horizon ?<br /> Photo: photographybanzai<br /> &nbsp;</p>
PepsiCo turns to crowdfunding for “swag” China smartphone
Venture Capital
<p>PepsiCo, the U.S. food and soda giant that last year made $17.2 billion in revenue, has turned to JD+, a crowdfunding platform run by Chinese ecommerce giant JD.com, to raise 3 million yuan ($470,000) for its new smartphone.</p> <p>The not-exactly-cash-strapped company is relying on contributions from the public so it can build two handsets, the P1 and P1s, Quartz reports. Both are exactly the same except for an extra sim card slot in the P1s.</p> <p>There will be 4000 units available for pledgers. The first 1000 will get the P1 for $78, the next 1000 will get the P1s for $156, from then on the price for each handset raises to $110 and $203, respectively. Both models are being produced by a third party manufacturer. The move might seem strange but it is also worth noting that the Pepsi brand has a lot of cache in China.</p> <p>The fact that Pepsi has turned to JD+ demonstrates that crowdfunding platforms are now as much about marketing as they are about raising capital. It also shows that nobody has too much money to go panhandling to the public, not even a multi-million-dollar food and beverage conglomerate.</p> <p>Smartphones are now so cheap to make in China it seems they have gone from being high-end tech to high-end swag. There is also a lot of competition in the space as more and more smartphone makers jostle for a slice of the market. This should not be a problem for soda-maker PepsiCo though, after all, it’s an expert in bubbles.<br /> Photo: Mike Mozart</p>
Is VC choking India's startups?
Venture Capital
<p>When a venture capital fund builds a portfolio of early stage investments, it is done with the expectation that at least a handful will fail. There are several reasons why: problems with product timing, the promoters, and governance issues. But what if the VCs are to blame?</p> <p>Seedfund founder Mahesh Murthy writes in Tech In Asia that VCs bear at least some of the responsibility when it comes to driving startups to an early grave. At least in India. The problem, he says, is the U.S. VC model. Most VCs  have 10-year fund lifecycle, with the 3-4 years to deploy capital and the rest to grow and exit the business. Murthy says:<br /> "You can see the problem right away, can’t you? No Indian firm of any stature has had any real IPO (initial public offering) exit within 5 to 8 years of starting up. Even our new economy giants MakeMyTrip and Naukri took more than 10 years, while JustDial took more than 16 years to exit on the market. Look at the big stocks on the BSE (Bombay Stock Exchange) – and make a list of those that had a meaningful IPO within 8 years of starting up. Your list will be an empty one."<br /> To cope with the mismatch, funds are pushing startups to do things against their long-term interests. This includes costly marketing campaigns, a needless pivot, or an ill-advised merger, all in order to drive up the valuation and secure an early exit. If it fails, the VCs will simply "choke the windpipes of startups at year 5 or 6."</p> <p>The solution? In short: we need a new model, says Murthy. He suggests fewer 10-year funds and more evergreens and 20-year fund structures. Investors, he adds, need a mentatility thats more “Berkshire Hathaway” and less “Gordon Gecko.”  <br /> Photo: Gulan Bollsay</p> <p>&nbsp;</p>