News > Venture Capital

Asia challenges North America as most active continent for venture capital deals in Q3
<p>Venture capital deals in Asia comprised 38% of the global number, and 45% of global deal value in the quarter, while North America represented 44% of both global number and value</p> <p>The venture capital industry in Asia has seen strong growth over the past year, and in Q3 the aggregate value of deals was comparable to the total value of deals in North America. India and China, the largest part of the Asian industry, marked 709 financings in the quarter, worth a combined $16.9bn. There were 932 venture capital deals in North America in the same period, worth an aggregate $17.5bn. Asia’s share of global deal flow has increased by seven percentage points from Q2 to Q3 2015, and its share of deal value has increased by nine percentage points. At the same time, the North American market share of the number of deals dropped by six percentage points from Q2, while the aggregate value that the region contributed to the global total fell by nine percentage points from 53% in Q2 to 44% in Q3.</p> <p>Other key venture capital deal market facts:</p> <p> Worldwide Figures: Globally, there were 2,121 venture capital financings in Q3 2015, worth a combined $39.8bn. Although this marks a 9% drop in deal numbers from Q3 2014, the aggregate value is 88% higher than the same period last year.<br /> European Decline: Europe witnessed 297 deals in Q3, a 7% drop from last quarter. In 2015 YTD, 980 deals have been seen in the region, a 25% decrease from the 1,307 deals in the first three quarters of 2014.<br /> Chinese Growth: In Q3 2015, the aggregate value of deals in Greater China increased 88% from Q1. In that quarter, there were 252 deals worth a combined $6.9bn, while in Q3 there were 437 deals, worth $13bn.<br /> Financing Rounds: Angel and seed investments comprised 22% of venture capital deals in Q3, unchanged from Q2. Series A deals comprised 20% of the number of deals, and series B comprised 10%. Add-on deals decreased from 8% of the number of deals in Q2 to 5% in Q3.<br /> Average Deal Size: The mean value of venture capital deals has increased across all financing stages from 2014 to 2015 YTD. Average series A deal value has increased 35%, from $7.9mn in 2014 to $10.7mn for 2015 YTD. Average venture debt deal size was stable in 2013 and 2014, at $9.7mn and $9.6mn respectively, but has now increased to $40.9mn in 2015 YTD.<br /> Biggest Deals: The two largest investments in Q3 2015 were both in Chinese transport technology firm Didi Kuaidi. The company received $2bn in July, and a further $1bn in September, from a consortium of investors including Alibaba and CIC. The next largest financing was $1bn to Uber Technologies Inc., from Microsoft Corporation (NASDAQ:MSFT) and Times Internet. Nine of the ten biggest venture capital deals in Q3 were based in Asia.<br /> Dry Powder: The unspent capital available to venture capital firms currently stands at $143bn globally, up slightly from the $141bn in dry powder recorded at the end of last quarter.</p>
As the US IPO market tanks, VC M&A deals hit $5.1b
<p>The rate of VC-backed start-ups going public in the US may have dwindled rapidly in recent months but a new report by the National Venture Capital Association (NVCA) suggests M&amp;A deal flow has had its strongest quarter this year.</p> <p>There were 90 venture-backed M&amp;A deals in the third quarter, 20 of which had a total value of  $5.1 billion - a 39% jump from the previous quarter. Deal volume meanwhile saw a 42% uptick.</p> <p>The tech sector led the charge, accounting for 69 of 90 deals, with a disclosed aggregate deal value of $3.4 billion.</p> <p>Headline deals included EMC Corp's $1.2 billion purchase of Virtustream,  an enterprise cloud solution provider back by the likes of Blue Lagoon Capital, Columbia Capital, and SAP Ventures. The other big deal was the $675 million acquisition of Warburg Pincus-backed cloud supply chain platform  Gt Nexus by Infor Inc.</p> <p>Its a stark contrast to the amount of IPO activity in the space. VC-backed public offerings raised a total of $1.7 billion for period - a 55% drop from the previous quarter - thanks to global markets being sent into a tailspin by China economic turmoil.</p> <p>In total there were 13 venture-backed IPOs, 11 of which listed in NASDAQ, the rest on the NYSE. Interestingly it was the life sciences industry that accounted for the lion's share of offerings. The most recent to go public on NASDAQ was Austria-based Nabriva Therapeutics which raised $92.3 million on September 17th.</p> <p>Bobby Franklin, president and CEO of NVCA, thinks there is still cause for optimism regarding IPO exits. He noted the two-thirds of those who did IPO are trading above their offering price, indicating the of quality of VC-backed IPOs.. Franklin added: <br /> “In addition to market volatility weighing down IPOs, another recent and important trend that has impacted the venture-backed IPO market is the increased activity of both VCs and non-traditional investors making late-stage investments into private companies that might otherwise file for an IPO.  While these so-called ‘private IPOs’ are weighing down the current IPO market, it also means the venture-backed IPO pipeline is deep and we are hopeful exit activity picks up steam in future quarters.”<br /> Photo: 드림포유</p>
Are "honey badgers" the new unicorns?
<p>Unicorns - startups valued at over $1 billion - are so common now that their cachet has waned. In an age of frothy private market valuations a new, even more elite breed of startup is on the rise: the honey badger. </p> <p>Fortune's Dan Primack has coined the term to describe startups that have raised over $1 billion or more in equity funding. They are not to be confused with Decacorns - startups valued over $10 billion - but there is some overlap.</p> <p>Fintech start-up SoFi is the newest member of the honey badger sett. raising $1 billion in round led by SoftBank this week - the startup has now raised $1.42 billion plus $400 million in debt financing.</p> <p>Of all the firms to raise $1 billion or more in private funding, research firm Mattermark puts SoFi at number 26 - 21 of these companies are still privately held. The five that have since gone public are Facebook, Alibaba, Groupon, Clearwire, and Fisker Automotive.</p> <p>Unsurprisingly, Uber tops the list of private honey badgers. Other members of this exclusive group include Chinese Uber rival Didi Kuaidi, AirBnb, and India's Flipkart.</p> <p>This may be the group to watch in the coming months. Looking at the middling public performance of those who have already listed - and the prospect of VC-backed IPO drought - there is as big question mark over where these honey badgers are headed.</p> <p>They may turn just around and give their late stage investors a nasty bite.<br /> Photo: Laurens</p>
Softbank brings more VC muscle to fintech, with record $1b deal
<p>Japanese telecoms titan and early stage heavyweight SoftBank has just led a $1 billion Series E round for SoFi, the San Francisco-based online service that offers a way for debt-ridden students in the US to refinance their federal or private student loans.</p> <p>Softbank is calling it "the largest single financing round in the fintech space to date". The round included Third Point Ventures, Wellington Management Company LLP, Institutional Venture Partners (IVP), RenRen, Baseline Ventures, DCM Ventures and others.</p> <p>The investment is set to aid SoFi - short for social finance - in its expansion into other areas of consumer finance including mortgages and personal loans. Nikesh Arora, president and COO of SoftBank Group Corp. said this:<br /> “SoftBank seeks to invest in large industries or geographies that are ripe for change. This investment gives SoftBank exposure to the financial services sector, which is one of the largest and most important industries in the world. SoFi is clearly a game changer in the fintech space.”<br /> SoftBank is an active early stage investor and has backed a plethora of tech start-ups via a variety of subsidiaries, affliates, and related funds. It tendrils have reached many of the largest e-commerce players around today and now there are early signs it is grasping for influence in the fintech.</p> <p>This deal comes just four months after SoftBank injected $1 billion into South Korean group buying platform Coupang and also invested $500 million in Snapdeal. It is also worth noting that this deal comes within days of Alibaba - in whom SoftBank owns a one-third stake - investing $680 million in India payments and e-commerce firm Patym.</p> <p>&nbsp;</p>
Sold for $442m, how does Business Insider rank in the content boom?
<p>VC-backed media outlet Business Insider has just been sold to German publisher Axel Springer (fresh from its failed bid for the Financial Times) in a deal valuing the business at $442 million.</p> <p>Springer - which held a 9% stake in the business via Axel Springer Digital Ventures - was one of 24 investors to back the content startup, according to CrunchBase.</p> <p>The others included the likes of RRE Ventures, Marc Andressen, Kohlberg Ventures , International Venture Partners , and notably Amazon CEO Jeff Bezos, who is reportedly retaining his stake.</p> <p>Business Insider managed to secure a healthly valuation but its not the largest in the recent content boom. A recent report by CB Insights ranked it ninth in a list of the largest valuations in the news and media space today.</p> <p>Many of these companies can be classed a startups, with venture capital firms and strategic investors funneling a reported $800 million into digital new and media start-ups over the past year.</p> <p>Vox Media and BuzzFeed are among those to reach unicorn status, putting them ahead of such old guard media giants as Forbes and the Washington Post. Here is CB Insights' media valuation ranking in full:</p> <p> Vice (2.5b)<br /> SNL ($2.23b)<br /> BuzzFeed ($1.5b)<br /> The Economist ($1.46b)<br /> Financial Times ($1.31b)<br /> Vox ($1b)<br /> Merger Market ($624m)<br /> Forbes ($475m)<br /> Business Insider ($442m)<br /> Refinery29 ($290m)<br /> Washington Post ($250m)<br /> ZY ($120m)<br /> .Mic ($100m)<br /> The Boston Globe ($70m)</p> <p>Photo: NexChange</p>
Alibaba ups its stake and pumps $680m into India's Paytm
<p>Alibaba has made yet another incursion into Indian e-commerce, chucking $680 million at Indian payments firm Paytm - alongside its financial affiliate Ant Financial - bringing their stake to 40%.</p> <p>Alibaba and Ant Financial are now the largest shareholders of One97 Communications, the firm behind Paytm, which is now valued at $3.4 billion, the Economic Times reports.</p> <p>Paytm offers a mobile wallet app, online phone credit recharge, and a shopping service. Its been working on synergies with Alibaba since the Chinese e-commerce giant first invested in February.</p> <p>The Indian payments firm has seen its services used by a number of big players in India's burgeoning e-commerce space including Uber and Snapdeal, another Alibaba investment.</p> <p>The firm was also part of a consortium - which also included SoftBank - that pumped $500 million into Snapdeal last month. It looks like Alibaba now has a formidable potion in the sector.</p> <p>&nbsp;</p>
Silicon Valley's week of schmoozing with Asian leaders
<p>Last week we saw a who's who of Silicon Valley rub shoulders with two of Asia's biggest leaders: Indian Prime Minister Narendra Modi and Chinese President Xi Jinping. Here we summarize the two visits and how they reflect on Silicon Valley's evolving ties with Asia.</p> <p>China </p> <p>Xi decided to  kick off his trip to the US last week by meeting with 28 top tech executives. Among them was Apple's Tim Cook, Facebook's Mark Zuckerburg, Microsoft's Satya Nadella, and Amazon.com's Jeff Bezos.</p> <p>The meeting - which actually took place in Seattle - was awkward at best. CEOs hoping to talk with the Chinese leader on such pressing issues as cyber attacks and the theft of intellectual property by Chinese companies instead got a brief address and a photo op.</p> <p>There were some brief moments of light relief: Zuckerberg's exchange with Xi in Mandarin, and the Xi's frequent - if somewhat cheesy- references to US popular culture.</p> <p>The most significant development were a series of proposed tech alliances. Among them was an agreement by search engine  Baidu to promote Window 10 to its users if Microsoft made Baidu the default search engine for operating system's China release.</p> <p>Also ride-hailing app Didi Kuaidi -  which recently backed US counterpart Lyft - agreed to a tie-up with social network LinkedIn to develop artificial intelligence solutions.</p> <p>India</p> <p>Unlike his Chinese counterpart, the Indian prime minister went to meet with US tech leaders in their home turf for a two-day tour where he had a much warmer reception.</p> <p>The highlight was Modi's teary one-on-one chat with Zuckerberg at Facebook's campus. Modi, who is one of the world's most popular political leaders on social media, spoke of his commitment to his "Digital India" agenda, which Zuckerberg also pledged to support.</p> <p>He then went on to Google's headquarters where he met with the firm's India-born CEO Sundar Pichai. The visit coincided with Google's announcement that it would bring wireless to 500 Indian railway stations.</p> <p>But perhaps the biggest score following Modi's trip was Qualcomm Ventures - the investment arm of the US chipmaker - revealing its $150 million India-focused venture capital fund for startups in the mobile and internet-of-everything (IoE) ecosystem.</p>
Didi Kuaidi snaps up stake in Ola
<p>This week in unicorns, Chinese decacorn Didi Kuaidi and its backers have turned their fight against Uber all the way up to 11.</p> <p>According to TechCrunch, China’s largest ride sharing firm taken part in funding round worth about $500 million for India’s dominant ride-hailing app, Ola.</p> <p>How much the Beijing-based company invested in Ola is still unknown, what we’re sure of though is that the round valued the Bangalore-based firm at $5 billion, making it one the largest ride-app companies currently going.</p> <p>This is the latest salvo in a war being waged against Uber being waged by a global consortium that also includes the likes SoftBank, Alibaba and Singapore fund Temasek. As the raging quinquagintacorn continues to scale up, the coalition has been backing Uber's competitors in all its key markets – including Uber’s home turf.</p> <p>Didi inked a deal with US-based Lyft this month that will allow the two companies to shares riders across the world, and just to be sure, it invested $100 million in the firm as well. It also injected an unspecified amount of cash in Southeast Asia’s GrabTaxi, an investment that will surely cement Didi’s place in the region’s burgeoning car service arena.</p> <p>How Uber will respond to this is anyone’s guess, but given Didi’s great choice of investments, CEO Travis Kalanick is no doubt having some sleepless nights.<br /> Photo: Abhijit Patil</p>
Cava Grill reports second multimillion dollar funding round
<p>Cava Grill is serving up funding rounds and venture capitalists can't eat it fast enough.</p> <p>The fast-casual Mediterranean restaurant chain just raised $45 million in venture funding, reports the Washington Business Journal. This is the second multimillion dollar funding round Cava has had in just a few months. The group announced a $16 million raise in April.</p> <p>Previous investors The Invus Group and Swan &amp; Legend Ventures led the Series B funding. AOL founder Steve Case's Revolution Growth also participated.</p> <p>Cava Grill is primarily located in the D.C. area, but is expanding to Los Angeles and possibly other locations. The company says it isn't committing to specific numbers for restaurant openings to give themselves more flexibility.<br /> Photo: Steven Depolo</p>
2015 VC unicorn report
<p>PitchBook has published its inaugural VC Unicorn Report, which dives into the terms, conditions and trends affecting VC-backed companies worth $1 billion or more. For highlights from the report, which covers protection terms, liquidation preferences and much more.</p> <p>See charts and full report below:</p> <p>PitchBook_2015_VC_Unicorn_Report (1)<br /> Photo: Adam Selwood</p>