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The world's best guide to the ride share funding wars: The money behind Uber, Lyft, and Didi Kuaidi
Venture Capital
<p>In recent days it has come to light that Uber is looking to raise another $1 billion, just three months after its last mega round. It's no surprise that Uber is burning through cash. With local competition in almost every market it operates, the ride-hailing app has made a lot of enemies and needs a big war chest.</p> <p>In the U.S. it competes with Lyft; in China it grapples with Didi Kuaidi; in India it's up against Ola, and in Southeast Asia it has GrabTaxi to deal with. Now it seems these competitors are forming a global alliance to take Uber down. A recent example:  In September Didi and Lyft decided to link their apps. The Chinese firm also invested $100 million in Lyft to seal the deal. The pair are now expanding this tie-up to include GrabTaxi and Ola, squeezing Uber into a global four-way clustercuss.</p> <p>But who are Uber and its backers really up against? A look at the roster of investors on both sides offers a revealing insight on the corporate alliances behind the the battle for dominance in the ride-hailing app space:</p> <p>Main backers of Uber</p> <p> Baidu: This Chinese internet giant is a major rival of Alibaba and Tencent . It has led two rounds for Uber totalling $1.8 billion, including its most recent fundraise for Uber China.<br /> Goldman Sachs: A early investor in Uber's $37 million Series B, this venture capital tourist led a $1.6 billion debt financing for Uber at the start of the year.<br /> Tata: The Indian conglomerate made the decision to bet against local player Ola and invest $100 million in Uber in August.<br /> Microsoft: The Silicon Valley giant got behind Uber in July taking part in its $1 billion Series F.<br /> BlackRock: The asset manager was relatively early to the game, backing Uber's $1.2 billion Series D round.<br /> Google: The search engine behemoth backed Uber via its venture capital unit, taking part in the $37 million Series B round and leading the $258 million Series C in 2013.</p> <p>Main backers of the alliance (Lyft, Ola, Didi Kuaidi, GrabTaxi) </p> <p> Softbank: The mastermind behind the alliance. The Japanese telecoms company backed Didi Dache/Kuaidi Dache prior to their merger earlier this year. It also led a $210 million and $250 million Series D round for Ola and GrabTaxi, respectively, and re-upped with both this year. Softabank also owns an indirect share in Lyft via its stakes in Didi Kuaidi and Alibaba.<br /> Alibaba: The Chinese internet giant and Baidu rival was an early backer of Kuaidi Dache prior to its merger, and led the most recent $2 billion round for the newly formed Didi Kuaidi. It also took part in two rounds for Lyft, including the most recent.<br /> Didi Kuaidi: A taxi app with several VC-backers, its also in invested in GrabTaxi and Lyft.<br /> Temasek Holdings: The Singapore investment fund took part in Didi Kuaidi's most recent $2 billion round. It also led a Series A round for GrabTaxi via its subsidiary Vertex Ventures. It came back for the Series B round in May last year<br /> Tencent Holdings: This Chinese internet firm was an early backer in Didi Dache, prior to its merger. Also took part in Lyft'sSeries E round.<br /> Tiger Global Management: Backed the Didi Kuaidi merger.  Led the Series A round for Ola, and every round thereafter. Took part in two investment rounds for GrabTaxi.</p> <p>&nbsp;<br /> Photo: bfishadow</p>
Are late stage VCs really getting crowded out?
Venture Capital
<p>The creeping feeling that hedge funds and other traditional public market investors are pushing late-stage venture capitalists out of later funding rounds has been around for some time. But is this really the case?</p> <p>A recent report by CB insights takes a closer look at this phenomenon. Anecdotally at least it appears that the larger VC deals are becoming more competitive with players like Tiger Global Management, a hedge fund, and Wellington Management, a mutual fund manager, among those becoming increasingly active in VC.</p> <p>But the actual data offers a mixed picture. A look at first time deals involving four of the largest late-stage VC firms — DAG Ventures, Institutional Venture Partners (IVP), Meritech Capital, and Technology Crossover Ventures (TCV) — over the last two years shows that while DAG and Meritech have indeed participated in fewer late-stage deals, the reverse is true of IVP and TCV.</p> <p>The data also shows that late stage VCs are not fleeing to mid-stage rounds, as one might expect, but are instead remaining disciplined in spite of increasing competition from new entrants. That said, the rush to late-stage VC deals by outsiders, from both ends of the spectrum, shows no sign of slowing down. Y Combinator, a seed-stage accelerator, and KKR, which is historically a buyout shop, both now have growth funds, for example.</p> <p>Late stage VCs have on the whole have stuck to their the investment mandates, but if this trend continues they could be tempted to make some earlier bets</p>
Startups are in a bubble: Just look who's investing now -- mutual funds, hedge funds, and the hoi polloi
Venture Capital
<p>Mark Suster over at Upfront Ventures has recently released his 2016 view on the startup market. He answers the question on everyone's lips these days: Are we in a bubble? YES! But venture capitalists can't take full credit for this trend, he says:<br /> If “the market” is driving up prices beyond intrinsic value the main new entrants to the market that have taken a less rational view of historical prices are a series of “non VCs” including corporate investors, hedge funds, mutual funds and crowdsourcing. Note that I’m not absolving my industry, venture capital, from bad behavior. I’m merely pointing out that price drivers are more strongly correlated with outsiders. On the chart below, 78% of the rounds of 80 $1bn+ companies were led by non VCs.</p> <p>&nbsp;</p> <p>The numbers are astonishing: Suster says in the past 18 months, the number of companies worth more than $1 billion zoomed from 30 to 80.  "Either we’ve discovered magical beans and elixir or perhaps we’ve gotten ahead of ourselves on valuation."<br /> Chart: CB Insights</p>
Infographic: The Narwhal Club is home to Canada’s $1 Billion tech startups
Venture Capital
<p>The Narwhal Club is going strong with plenty of recent news concerning prominent Canadian startups. Working with Brent Holliday from Garibaldi Capital Advisors, we got the latest scoop on the sector and have updated the narwhal list accordingly.</p> <p>The most recent notable event occurred in the summer of 2015, when Markus Frind sold his 100% owned Plentyoffish.com to Match Group for US$575 million. As a result, we have removed POF from the Narwhal list, and instead have inducted Markus to a new category called the Nar-Wall of Fame. Plentyoffish.com allowed Markus to amass a personal fortune from profits and sale of his business that makes his personal valuation Narwhal-esque.</p> <p>&nbsp;</p> <p>Courtesy of: Visual Capitalist<br /> This was originally published by ValueWalk.<br /> Photo: Matt Biddulph</p>
Hujiang.com raises $157 million from CMI, other firms
Venture Capital
<p>Investment firms are still hot for online education platforms, and Hujiang.com seems to be no exemption.</p> <p>Based in Shanghai, backed by Baidu, and filled with over 90 million registered users, the online school raised $157 million in its recent series D round according to China Money Network, and attracted investors as diverse as China's largest private investment fund, China Minsheng Investment (CMI), and the Hefei-based publisher, Waixin Media.</p> <p>How much CMI invested in the company was disclosed however, and how much the round valued it was not divulged as well. We do know though that Hujian.com is in the process of reorganization as it prepares to go public:<br /> “The company is in the process of corporate structure reorganization, and is planning an initial public offering inside China, according to announcements made at a press conference reported by Chinese media.”<br /> The Hina Group, in a press release entitled – and only containing the words – Hujiang.com Raised over RMB 1 Billion with Hina as Exclusive Financial Advisor, said that Hujiang.com raised over RMB 1 billion ($157 million) with Hina as its exclusive financial advisor.<br /> Photo: uberof202 ff</p>
Golden Gate Ventures bets big on Thailand payments startup
Venture Capital
<p>Singapore-based early stage investor Golden Gate Ventures has just made its biggest bet in Southeast Asia yet, an online payments gateway in Thailand called Omise.co.</p> <p>Set up in 2013 by Japanese CEO Jun Hasegawa, Omise is still a relatively new kid on the block, but this is now its second round of institutional funding.  It raised a $2.3 million Series A round investment earlier this year. Golden Gate will not disclose how much it has invested, but the firm's average ticket size is  normally around seven-figures.</p> <p>Ecommerce has been experiencing a renaissance in Southeast Asia for the past couple of years now with major international players like German incubator Rocket Internet, and Japanese internet giants Softbank and Rakuten, backing a slew of  startups. Ecommerce-related payments and logistics solutions are still is lacking however.</p> <p>Omise is trying to lighten the load by offering a simple plug-and-play interface for software developers that make it easier to accept credit card payments.</p> <p>Golden Gate says that Omise grew 56% in Q2, and 269% in Q3. The firm estimates that at this rate the firm will be processing hundreds-of-thousands of monthly transactions in 2016.</p> <p>A big part of this strategy will be Omise's overseas ambitions. Part of the funding will be used for expansion into Indonesia and Singapore, the startup also has it eyes set on Hasegawa's native Japan.</p> <p>We can expect a lot more big deals coming from Golden Gates. The firms raised $50 million for its second fund in the summer and it has a lot more dry powder to burn through. </p> <p>Photo: Tiago Almeida</p>
Infographic: Grading 15 tech companies that declined big takeover offers
Venture Capital
<p>If you were to ask legendary investor Peter Thiel about the most important moment in Facebook history, he would point to an exchange in July 2006.</p> <p>Yahoo had made the lucrative offer of $1 billion for Facebook, and Peter Thiel as well as board member Jim Breyer got called into a meeting about the deal with Mark Zuckerberg.</p> <p>Courtesy of: Visual Capitalist<br /> This article was published by ValueWalk. <br /> Photo: Jason McELweenie </p>
Corruption kills entrepreneurship
Venture Capital
<p>On Tuesday night, Nobel Laureate Professor Dan Shechtman spoke at the Hong Kong University of Science and Technology about “How Technological Entrepreneurship Can Be Nurtured”. </p> <p>The distinguished chemist sees five important factors that are keys to promoting get-up-and-go risk-taking:</p> <p>“We need good basic education for everyone. And then we need a good engineering and science education, government policy and support for entrepreneurship, a free market economy, and, most important of all, no corruption, for corruption kills entrepreneurship.”</p> <p>Schechtman’s delivered his lecture at the UC RUSAL President’s Forum and HKUST 25th Anniversary Distinguished Speakers Series. UC Rusal is the world’s second biggest aluminium producer and is controlled by Oleg Deripaska, one of Russia's richest and best-connected oligarchs.<br /> Photo: Fred S.<br /> &nbsp;</p>
Recently spotted: A unicorn startup that is both profitable and from the Midwest
Venture Capital
<p>&nbsp;</p> <p>Now here's something really different:</p> <p>A unicorn startup that is both profitable and based in the Midwest. Should we call it a uni-unicorn?</p> <p>The rare beast is Chicago-based Uptake, which has raised $45 million from GreatPoint Ventures and other investors, giving it a $1.1 billion valuation, reports The New York Times.</p> <p>Uptake partners with well known companies to create software for gathering and interpreting data. CB Insights reports a total of 139 unicorns.<br /> Photo: yosuke muroya </p>
Cash hungry Uber raising another $1 billion for its war chest
Venture Capital
<p>You would be forgiven for thinking that you have stumbled upon a post from August, you haven't. Uber has a thirst for cash that cannot be quenched and is now allegedly scrapping together another billion a mere three months after pumping the same amount into its China business.</p> <p>The New York Times reports that the investment will value Uber at $60-70 billion making it the most valuable private startup by a country mile.</p> <p>In short, this is war money and Uber is now fighting a battle on many fronts. In China, Uber is struggling to snatch market share from giant incumbent Didi Kuaidi, while in India its up against an equally entrenched Ola.</p> <p>The same heavyweight backers behind Didi and Ola – which include Softbank, Alibaba, and Temasek Holdings – have also thrown their weight behind GrabTaxi in Malaysia, and Lyft in the U.S. Uber is also fighting legal battles in its three biggest markets: the U.S.,China and India. </p> <p>Despite the odds being stacked against them, the company is now on the cusp of reaching a valuation that soars well above Facebook's $50 billion market value when it listed in 2012. According to Business Insider, Facebook's Mark Zuckerburg has even had a word in Uber CEO Travis  Kalanick's ear, advising him to take his firm public. But Kalanick recently said:<br /> "We're maturing as a company, but we're still like eighth graders. [...] We're in junior high. And someone's telling us we need to go to the prom. But it's a little early. Give us a few years. Give us a little time."<br /> At this rate one wonders whether public market investors will ever have an appetite for Uber's insane valuations. When prom night comes, Uber may struggle to get a date.  <br /> Photo: Moyan Brenn </p> <p>&nbsp;</p>