Avant doubles down on digital banking with Zero Financial acquisition

Avant, an online lender that has raised over $600 million in equity, announced today that it has acquired Zero Financial and its neobank brand, Level, to further its mission of becoming a digital bank for the masses.

Founded in 2012, Chicago-based Avant started out primarily as an online lender targeting “underserved consumers,” but is evolving into digital banking with this acquisition. The company notched gross revenue of $265 million in 2020 and has raised capital over the years from backers such as General Atlantic and Tiger Global Management.

“Our path has always been to become the premier digital bank for the everyday American,” Avant CEO James Paris told TechCrunch. “The massive transition to digital over the last 12 months made the timing right to expand our offerings.” 

The acquisition of Zero Financial and its neobank, Level (plus its banking app assets), will give Avant the ability to offer “a full ecosystem of banking and credit product offerings” through one fully digital platform, according to Paris. Those offerings include deposits, personal loans, credit cards and auto loans.

Financial terms of the deal weren’t disclosed other than the fact that the acquisition was completed with a combination of cash and stock.

Founded in 2016, San Francisco-based Zero Financial has raised $147 million in debt and equity, according to Crunchbase. New Enterprise Associates (NEA) led its $20 million Series A in May of 2019.

Level was unveiled to the public in February of 2020, created by the same California-based team that founded the “debit-style” credit card offering Zero, according to this FintechFutures piece. The challenger bank was created to target millennials dissatisfied with the incumbent banking options.

Zero Financial co-founder and CEO Bryce Galen said that Avant shared his company’s mission “to challenge the status quo by bringing innovative financial services products to consumers who might otherwise be unable to access them.”

Avant, notes Paris, uses thousands of AI-driven data points to determine credit risk. With this acquisition, that lens will be expanded with data, such as a deposit customer’s cash flow, how they manage their finances and whether they pay their bills on time. 

“This will allow us to make credit decisions faster and deliver personalized options to help underbanked consumers gain financial freedom, at any and every stage of their financial journey,” Paris told TechCrunch. “It will also build long-term engagement and loyalty and help grow our reach beyond the 1.5 million customers we’ve served to date.”  

Like a growing number of fintechs, Avant operates under the premise that a person’s ability to get credit shouldn’t be dictated by a credit score alone.

“A significant amount of Americans have poor, bad or no credit at all. For these people, accessing credit isn’t exactly easy and often comes with extra fees,” Paris said. That’s why, he added, Avant has focused on providing options for such consumers with “transparent, rewards-driven products.”

Level’s branchless, all-digital platform offers things such as cashback rewards on debit card purchases, a “competitive APY” on deposits, early access to paychecks and no hidden fees, all of which are especially beneficial for consumers on the path to financial freedom, according to Paris.

Since its inception in 2012, Avant has connected more than 1.5 million consumers to $7.5 billion in loans and 400,000 credit cards. The company launched its credit card in 2017 and over the past two years alone, it has grown its number of credit card users by 170%.

#apps, #artificial-intelligence, #avant, #bank, #banking, #california, #challenger-bank, #chicago, #credit-card, #debit-card, #digital-banking, #economy, #exit, #finance, #funding, #general-atlantic, #level, #ma, #money, #premier, #san-francisco, #startups, #tc, #tiger-global-management, #zero-financial

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Ex-General Catalyst and General Atlantic VC announces $68M debut fund

As of 2019, the majority of venture firms — 65% — still did not have a single female partner or GP at their firm, according to All Raise.

So naturally, anytime we hear of a new female-led fund, our ears perk up.

Today, New York-based Avid Ventures announced the launch of its $68 million debut venture capital fund. Addie Lerner — who was previously an investor with General Catalyst, General Atlantic and Goldman Sachs — founded Avid in 2020 with the goal of taking a hands-on approach to working with founders of early-stage startups in the United States, Europe and Israel.

“We believe investing in a founder’s company is a privilege to be earned,” she said.

Tali Vogelstein — a former investor at Bessemer Venture Partners — joined the firm as a founding investor soon after its launch and the pair were able to raise the capital in 10 months’ time during the 2020 pandemic.

The newly formed firm has an impressive list of LPs backing its debut effort. Schusterman Family Investments and the George Kaiser Family Foundation are its anchor LPs. Institutional investors include Foundry Group, General Catalyst, 14W, Slow Ventures and LocalGlobe/Latitude through its Basecamp initiative that backs emerging managers. 

Avid also has the support of 50 founders, entrepreneurs and investors as LPs — 40% of whom are female — including Mirror founder Brynn Putnam; Getty Images co-founder Jonathan Klein; founding partner of Acrew Capital Theresia Gouw and others.

Avid invests at the Series A and B stages, and so far has invested in Alloy, Nova Credit, Rapyd, Staircase, Nava and The Wing. Three of those companies have female founders — something Lerner said happened “quite naturally.”

“Diversity can happen and should happen more organically as opposed to quotas or mandates,” she added.

In making those deals, Avid partnered with top-tier firms such as Kleiner Perkins, Canapi Ventures, Zigg Capital and Thrive Capital. In general, Avid intentionally does not lead its first investments in startups, with its first checks typically being in the $500,000 to $1 million range. It preserves most of its capital for follow-on investments.

“We like to position ourselves to earn the right to write a bigger check in a future round,” Lerner told TechCrunch. 

In the case of Rapyd, Avid organized an SPV (special-purpose vehicle) to invest in the unicorn’s recent Series D. Lerner had previously backed the company’s Series B round while at General Catalyst and remains a board observer.

Prior to founding Avid, Lerner had helped deploy more than $450 million across 18 investments in software, fintech (Rapyd & Monzo) and consumer internet companies spanning North America, Europe and Israel. 

When it comes to sectors, Avid is particularly focused on backing early-stage fintech, consumer internet and software companies. The firm intends to invest in about 20 startups over a three-to-four year period.

“We want to take our time, so we can be as hands-on as we want to be,” Lerner said. “We’re not looking to back 80 companies. Our goal is to drive outstanding returns for our LPs.”

The firm views itself as an extension of its portfolio companies’ teams, serving as their “Outsourced Strategic CFO.” Lerner and Vogelstein also aim to provide the companies they work with strategic growth modeling, unit economics analysis, talent recruiting, customer introductions and business development support.

“We strive to build deep relationships early on and to prove our value well ahead of a prospective investment,” Lerner said. Avid takes its team’s prior data-driven experience to employ “a metrics-driven approach” so that a startup can “deeply understand” their unit economics. It also “gets in the trenches” alongside founders to help grow a company.

Ed Zimmerman, chair of Lowenstein Sandler LLP’s tech group in New York and adjunct professor of VC at Columbia Business School, is an Avid investor.

He told TechCrunch that because of his role in the venture community, he is often counsel to a company or fund and will run into former students in deals. Feedback from numerous people in his network point to Lerner being “extraordinarily thoughtful about deals,” with one entrepreneur describing her as “one of the smartest people she has met in a decade-plus in venture.”

“I’ve seen it myself in deals and then I’ve seen founders turn down very well branded funds to work with Addie,” Zimmerman added, noting they are impressed both by her intellect and integrity. “…Addie will find and win and be invited into great deals because she makes an indelible impression on the people who’ve worked with her and the data is remarkably consistent.”

#acrew-capital, #addie-lerner, #basecamp, #bessemer-venture-partners, #brynn-putnam, #canapi-ventures, #catalyst, #consumer-internet, #corporate-finance, #diversity, #finance, #foundry-group, #funding, #general-atlantic, #general-catalyst, #george-kaiser-family-foundation, #goldman-sachs, #israel, #jonathan-klein, #kleiner-perkins, #new-york, #north-america, #slow-ventures, #software, #tali-vogelstein, #tc, #tech, #techcrunch-include, #theresia-gouw, #thrive-capital, #united-states, #venture-capital

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Mexican online grocer Jüsto raises $65M in General Atlantic-led Series A

Jüsto, an online supermarket based in Mexico City, announced Tuesday it has raised $65 million in Series A round led by General Atlantic.

The amount is sizable for a Series A in general, but supersized for a LatAm startup. In fact, according to Pitchbook data cited by General Atlantic, the round represents the largest Series A raised in Latin America in the past decade.

Existing backers also participated in the round including Foundation Capital and Mountain Nazca.

Ricardo Weder, former president of Cabify (a large ride-sharing company operating in Latin America, Spain, and Portugal) founded Jüsto in 2019 with a mission to “disrupt the Latin American grocery industry.” It claims to be the first supermarket in Mexico with no physical store. Customers can buy their groceries directly from the website or via the app and Jüsto delivers the order to the customer’s location of choice.

The concept is clearly resonating with consumers as Jüsto saw impressive growth in 2020 with a 16-fold increase in revenue. 

Jüsto prides itself on working directly with fresh produce suppliers so that it can offer “the freshest” fruits, vegetables, meats and fish in the market. It also offers a variety of products such as pantry staples, personal hygiene and beauty, home and cleaning, drinks and pet-related items.

The startup only sells items from local suppliers, with whom it prides itself on developing fair trade agreements. (“Jüsto” means fair in Spanish) It also uses artificial intelligence to forecast demand and to try and reduce food waste at its micro-fulfillment centers. The company’s approach results in “competitive prices, lower transaction costs, and improved convenience to consumers by eliminating intermediaries in the supply chain,” according to the company.

Looking ahead, Jüsto plans to use its new capital on expanding across Mexico and Latin America as a whole, enhancing its last-mile logistics infrastructure and marketing initiatives.

Luis Cervantes, managing director and head of Mexico City for General Atlantic, believes Mexico is at an inflection point in its transition to a digital economy.

“We see Jüsto as leading the way in the high-growth online grocery space with its technology-centric, mission-driven approach,” he said in a written statement. “Under Ricardo’s leadership, we believe Jüsto is positioned for significant expansion as it disrupts and transforms the legacy grocery value chain.”

 Jüsto marks General Atlantic’s fifth investment in Mexico since 2014. Since then, General Atlantic has invested nearly USD $1 billion in what it describes as “high-growth” Mexican companies. 

The financing brings Jüsto’s total raised to over $100 million. Other investors include FEMSA Ventures, S7V, Elevar Equity, Bimbo Ventures, Quiet Capital, Sweet Capital, H2O Capital  and SV LatAm Capital, among others.

#artificial-intelligence, #ecommerce, #foundation-capital, #funding, #general-atlantic, #grocery-store, #justo, #latin-america, #mexico, #mexico-city, #recent-funding, #startups, #tc

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#DealMonitor – René Benko blitzt bei Komoot ab – Insight kauft weitere AnyDesk-Anteile – Warburg Pincus investiert in McMakler


Im aktuellen #DealMonitor für den 20. November werfen wir wieder einen Blick auf die wichtigsten, spannendsten und interessantesten Investments und Exits des Tages. Alle Deals der Vortage gibt es im großen und übersichtlichen #DealMonitor-Archiv.

INVESTMENTS

Komoot
+++ Der Berliner Geldgeber June, hinter dem unter anderem Google-Vorstand Philipp Schindler steckt, nutzt seine Vorkaufsrechte beim Startup Komoot, einem Routenplaner samt Navigations-App. Der BFB Frühphasenfonds Brandenburg wollte beim Unternehmen aus Potsdam, das von Markus Hallermann gegründet wurde, aussteigen und seinen Anteil (15 %) verkaufen. Interesse an der Übernahme der Anteile hatte auch der bekannte österreichische Investor René Benko (unter anderem Galeria Karstadt Kaufhof). Hintergründe gibt es nur im aktuellen Insider-Podcast. #EXKLUSIV

AnyDesk
+++ Der amerikanische Wagniskapitalgeber Insight Partners nutzt seine Vorkaufsrechte bei AnyDesk. Das junge Unternehmen will quasi TeamViewer als erste Adresse für den Fernzugriff auf Rechner ablösen. EQT Ventures sowie Business Angels wie Chris Hitchen und Andreas Burike sowie Insight investierten in den vergangenen Jahren bereits rund 20 Millionen Dollar in AnyDesk. General Atlantic hatte sich zuletzt für einen Einstieg bei AnyDesk interessiert. Hintergründe gibt es nur im aktuellen Insider-Podcast. #EXKLUSIV

Simplesurance
+++ Die Altinvestoren investierten erneut in Simplesurance. Das Berliner Startup in Deutschland als Schutzklick bekannt, gehört zu den ganz großen InsurTech-Pionieren. Mindestens 60 Millionen Dollar flossen bisher in das Unternehmen, das 2012 an den Start ging. Zuletzt investierten unter anderem die Tokio Marine Holdings (TMHD) und die deutsch-französische Finanzgruppe ODDO BHF Kapital in das Unternehmen. Hintergründe gibt es nur im aktuellen Insider-Podcast. #EXKLUSIV

Urban Sports Club
+++ Die Altinvestoren investierten erneut in Urban Sports Club, einen millonenschweren Anbieter für Sportflatrates. Urban Sports Club wurde Ende 2012 von Benjamin Roth und Moritz Kreppel gegründet. Das Startup expandierte zuletzt vor allem durch Übernahmen (99Gyms, Fitengo, Somuchmore, FITrate). Investoren des Startups sind unter anderem HV Capital, Rocket Internet und Partech. Hintergründe gibt es nur im aktuellen Insider-Podcast. #EXKLUSIV

McMakler
+++ Der amerikanische Finanzinvestor Warburg Pincus investiert gemeinsam mit einigen Bestandsinvestoren in das Berliner Unternehmen McMakler. Das Handelsblatt berichtet von einem Investment in Höhe von 50 Millionen US-Dollar. “Die nächste Wachstumsphase von McMakler wird sich auf die Erweiterung der proprietären Technologie und der digitalen Tools konzentrieren, um einen transparenteren und schnelleren Marketingprozess für die Kunden zu gewährleisten”, teilt das Unternehmen mit . Target Global, Israel Growth Partners und einige Bestandsinvestoren investierten zuletzt 50 Millionen Euro in McMakler, ein Berliner Makler-Startup. Das Unternehmen, das in Deutschland, Österreich und Frankreich aktiv ist, wurde 2015 von Hanno Heintzenberg, Felix Jahn und Lukas Pieczonka gegründet. Das Grownup beschäftigt über 600 Mitarbeiter.

Sastrix
+++ TS Ventures, also Tim Schumacher, Discovery Ventures und Christian Gaiser investieren 1,3 Millionen US-Dollar in das Kölner Startup Sastrix. Die Jungfirma, die von Maximilian Messing und Sven Lackinger, beide früher evopark, gegründet wurde, unterstützt Unternehmen beim Kauf und der Verwaltung von Softwarelösungen. Die Rheinländer versprechen: “Wir bringen Transparenz in Ihr bestehendes Setup, befreien Sie von nicht ausgelasteten Lizenzen und verhandeln mit Ihren Anbietern, um die besten Angebote für Sie zu erhalten”.

deineStudienfinanzierung
+++ Der Berliner FinTech-Investor finleap investiert in das Berliner Startup deineStudienfinanzierung. “Der Eintritt ins Portfolio von finleap ist für das junge Unternehmen ein weiterer Schritt, ein verlässlicher Partner der Generation Z zu sein”, teilt der Investor vollmundig mit. deineStudienfinanzierung, das von Alexander Barge, David Meyer und Bastian Krautwald gegründet wurde, aggregiert die “größten Finanzierungsprodukte für das Studium in Deutschland”. Im vergangenen Jahr suchte die Jungfirma im Fernsehen, bei “Die Höhle der Löwen” Geldgeber. Der TV-Deal mit Frank Thelen platzte damals aber.

NXRT
+++ Das Bahntechnik-Unternehmen Rhomberg Sersa Rail Group (RSRG) investiert in den Simulationsanbieter NXRT. Das Unternehmen  mit Sitz in Wien “fokussiert sich auf schlüsselfertige Anwendungen für innovative Simulationen für Demonstrations-, Trainings- und Testzwecke”. Die Software vermittelt den Anwendern dabei “sämtliche sensorischen Reize, die sowohl im Bereich Showcasing als auch im Bereich Schulung zu einer bleibenden Erinnerung der Inhalte beitragen”.

easierLife
+++ Der Energiedienstleister ESWE Versorgung investiert einen “bedeutenden finanziellen Betrag” in das Karlsruher Startup easierLife, das einen intelligentem Hausnotruf anbietet. easierLife wurde 2014 von vier wissenschaftlichen Mitarbeitern des FZI Forschungszentrum Informatik gegründet. Im Rahmen von Studien wurden zunächst über 100 Seniorenhaushalte mit Sensoren ausgestattet.

Achtung! Wir freuen uns über Tipps, Infos und Hinweise, was wir in unserem #DealMonitor alles so aufgreifen sollten. Schreibt uns eure Vorschläge entweder ganz klassisch per E-Mail oder nutzt unsere “Stille Post“, unseren Briefkasten für Insider-Infos.

Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): azrael74

#aktuell, #anydesk, #berlin, #deinestudienfinanzierung, #discovery-ventures, #easierlife, #finleap, #general-atlantic, #insight-partners, #june, #karlsruhe, #koln, #komoot, #mcmakler, #nxrt, #potsdam, #sastrix, #simplesurance, #ts-ventures, #urban-sports-club, #venture-capital, #warburg-pincus

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What will a Wish IPO look like? Seems we’ll find out sooner than later

Wish, the San Francisco-based, 750-person e-commerce app that sells deeply discounted goods that you definitely don’t need but might buy anyway when priced so low — think pool floaties, guinea pig harnesses, Apple Watch knockoffs — said yesterday that it has submitted a draft registration to the SEC for an IPO.

Because it filed confidentially, we can’t get a look at its financials just yet; we only know that its investors, who’ve provided the company with $1.6 billion across the years, think the company was worth $11.2 billion as of last summer, when it closed its most recent financing (a $300 million Series H round). Meanwhile, Wish itself says it has more than 70 million active users across more than 100 countries and 40 languages.

The big question, of course, is whether the now 10-year-old company can maintain or even accelerate its momentum. It’s not a no-brainer. On the one hand, it’s a victim of the increasingly chilly relations between the U.S. and China, from where the bulk of Wish’s goods come. Then again, Wish has been beefing up its business elsewhere in the world partly as a result of the countries’ shifting stance toward one another. For example, it told Recode last year that it’s increasingly looking to Latin American markets — Mexico, Argentina, Chile — for growth, and that it’s planning a bigger push into Africa, where it’s already available in South Africa, Ghana, and Nigeria, among other countries.

But let’s back up a minute first. If you don’t know, Wish was cofounded by CEO Peter Szulscewski, a computer scientist by training, who previously spent 6.5 years at Google before cofounding a company call ContextLogic, from which Wish evolved. The idea was to build a next-generation, mobile ad network to compete with Google’s AdSense network, but Szulscewski and his cofounder, Danny Zhang, realized they were “pretty bad at business development,” as he once said at an event hosted by this editor, so eventually they pivoted to Wish.

Wish began as an app that asked people to create wish lists, then the company approached merchants, letting them know a certain number of customers wanted, say, a certain type of table. It was smart to recognize that showing the right recommendations to shoppers would become critical to its users, though it didn’t necessarily foresee the types of merchants it would ultimately work with, most of them in China, Indonesia and elsewhere in East Asia and Southeast Asia who are focused on value-conscious customers and who, at the time, didn’t have other ways to sell to or communicate with customers elsewhere in the world (so didn’t mind paying Wish a 15% take to handle this for them).

Wish also quickly focused around lightweight items that it could ship cheaply from China, if slowly, using something called ePacket. It’s a shipping option agreement that established nine years ago with the cooperation of the US Postal Service and Hong Kong Post (and later made available to 40 countries altogether) that enables products coming from China and Hong Kong to be sent cheaply as long as they meet certain criteria — they don’t weigh too much, they aren’t worth too much, they adhere to certain minimum and maximums regarding their size, and so forth.

The mix has proved powerful for Wish, despite growing competition from China-based outfits like AliExpress that offer many of the same goods to the same customers around the world. (Wish has also competed, always, with Walmart and Amazon.)

The company has also soldiered on despite apparent struggles to keep customers coming over time, too. Because it doesn’t sell essential items but rather a grab bag of different items, people tend to cycle out of the app after a few months of their first visit, as The Information once reported.

A bigger issue now is that, as of two months ago, a new USPS pricing structure went into effect that raises rates on international shipments. It also requires foreign recipient countries to ratify new rates under ePacket (whose recipient countries, by the way, have been downsized from 40 to 12). That means that companies like Wish either pay more to ship their goods — forcing its vendors to charge more — or they move to commercial networks.

Of course, a third option — and one that may position Wish well for the future — would be for Wish to invest in more local warehousing in the U.S, Europe and others of its growing markets, which it told Recode that it is doing, along with seeking out more local vendors near its biggest markets.

Given shifts in the way that commercial real estate is being used — with retail-to-industrial property conversions accelerating, driven by the growth of e-commerce  — it’s probably as good a time as any for Wish to be making these moves. Whether they are enough to sustain and grow the company is something that only time will tell.

Again, we’ll collectively know much more when we can get a look at that filing. It should make for interesting reading.

Wish’s private investors include General Atlantic, GGV Capital, Founders Fund, Formation 8, Temasek Holdings and DST Global, among others.

#dst-global, #ecommerce, #formation-8, #founders-fund, #general-atlantic, #ggv, #ipo, #startups, #tc, #temasek, #venture-capital, #wish

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Reliance Jio Platforms says $15.2 billion fundraise is good for now

If your venture fund was not one of the ten investors that backed Reliance Jio Platforms in recent weeks, you won’t be able to plough cash into the fast-growing top Indian telecom network for at least a few quarters now as it is no longer scouting for fresh deals.

Reliance Jio Platforms, which has raised $15.2 billion in the past nine weeks, said today that Saudi Arabia’s PIF $1.5 billion investment on Thursday marked the “end of Jio Platforms’ current phase of induction of financial partners.”

Mukesh Ambani, who controls Reliance Industries (the parent firm of Jio Platforms and a range of other businesses), said that Jio Platforms and Reliance Retail, the largest retail chain in the country, “have received strong interest from strategic and financial investors,” but he will now “induct leading global partners in these businesses in the next few quarters.”

India’s richest man added that he plans to publicly list both Jio Platforms and Reliance Retail within the next five years. “With these initiatives, I have no doubt that your company will have one of the strongest balance sheets in the world.”

Mukesh Ambani, chairman and managing director of the Reliance Industries Ltd., arrives for the company’s annual general meeting in Mumbai, India, on Monday, Aug. 12, 2019. Photographer: Dhiraj Singh/Bloomberg via Getty Images

The announcement today caps perhaps the buzziest fundraising news cycle that lasted for nearly three months. Reliance Jio Platforms, which has amassed over 388 million subscribers in less than four years, announced in April that it had secured $5.7 billion from Facebook.

In the weeks since, the telecom operator has raised an additional $9.5 billion from a roster of nine high-profile investors including Silver Lake, KKR, and General Atlantic .

The huge capital infusion at the height of a global pandemic accounted for more than half of the investment into telecom companies globally this year, according to Bloomberg. By raising $15.2 billion, Jio Platforms, which Ambani describes as a “startup,” alone mopped up more capital than India’s entire tech startup ecosystem last year.

On Friday, Ambani also confirmed a market speculation about why Reliance Jio Platforms was raising money at all. Ambani said that the capital has helped him repay Reliance Industries’ net debt of $21 billion well ahead of schedule. The oil-to-retail giant, which was debt free in 2012, is now “net debt free,” he said.

Last August, Ambani promised shareholders that Reliance Industries, which is India’s most valued firm, would repay its debt by early 2021.

“Today I am both delighted and humbled to announce that we have fulfilled our promise to the shareholders by making Reliance net debt-free much before our original schedule of 31st March 2021,” he said.

#asia, #facebook, #funding, #general-atlantic, #india, #mukesh-ambani, #reliance, #reliance-jio, #silver-lake

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India’s Reliance Jio Platforms to sell $750 million stake to Abu Dhabi Investment Authority

Mukesh Ambani has courted the seventh major investor for his telecommunications business in just as many weeks.

On Sunday, Reliance Jio Platforms said it will sell a stake of 1.16% for $750 million to Abu Dhabi Investment Authority (ADIA), continuing its eye-catching run of investments at the height of a global pandemic.

The three-and-a-half-year-old digital unit of oil-to-retail giant Reliance Industries, the most valuable firm in India, has now secured nearly $13 billion from seven investors including Facebook, and U.S. private equity firms Silver Lake, General Atlantic by selling close to 20% stake.

Abu Dhabi Investment Authority’s announcement is the third deal Reliance Jio Platforms, which is India’s largest telecom operator with over 388 million subscribers, has secured just this week. Jio Platforms is selling $1.2 billion stake to Abu Dhabi-based sovereign firm Mubadala, it said earlier this week. The company also announced that U.S private equity firm Silver Lake was pumping an additional $600 million to increase its stake in Jio to 2.1%.

The deal further captures the appeal of Jio Platforms to foreign investors looking for a slice of the world’s second-largest internet market. Jio, which launched its commercial operations in the second half of 2016, upended the market by offering mobile data and voice calls at cut-rate prices.

“The incumbent players (Airtel, Vodafone, Idea, BSNL) in India did the opposite of what companies in their position do elsewhere in the world when a new player emerges in the market. The existing players expect the newcomer to compete aggressively on price. They often lower their prices – some times steeply — to reduce the latter’s attractiveness. Newcomers often complain to the regulators about anti-competitive practices of incumbents,” said Mahesh Uppal, director of communications consultancy firm Com First.

“In India, the opposite happened. It was the existing players who ran to regulators with complaints. So we saw a major miscalculation from incumbent players that had already missed out on taking any major step before the launch of Jio,” he said.

India has emerged as one of the biggest global battlegrounds for Silicon Valley and Chinese firms that are looking to win the nation’s 1.3 billion people, most of whom remain without a smartphone and internet connection.

Media reports have claimed in recent weeks that Amazon is considering buying stakes worth at least $2 billion in Bharti Airtel, India’s third largest telecom operator, while Google has held talks for a similar deal in Vodafone Idea, the second largest telecom operator.

Hamad Shahwan Aldhaheri, who oversees private equity deals at ADIA, said Jio Platforms is poised to benefit from major socio-economic developments and “transformative effects of technology on the way people live and work. The rapid growth of the business, which has established itself as a market leader in just four years, has been built on a strong track record of strategic execution. Our investment in Jio is a further demonstration of ADIA’s ability to draw on deep regional and sector expertise to invest globally in market leading companies and alongside proven partners.”

The new capital should help Ambani, India’s richest man, further solidify his commitment to investors when he pledged to cut Reliance’s net debt of about $21 billion to zero by early 2021 — in part because of the investments it has made to build Jio Platforms, said Uppal.

Its core business — oil refining and petrochemicals — has been hard hit by the coronavirus outbreak. Its net profit in the quarter that ended on March 31 fell by 37%.

“I am delighted that ADIA, with its track record of more than four decades of successful long-term value investing across the world, is partnering with Jio Platforms in its mission to take India to digital leadership and generate inclusive growth opportunities. This investment is a strong endorsement of our strategy and India’s potential,” said Ambani.

#abu-dhabi, #asia, #facebook, #funding, #general-atlantic, #mubadala, #mubadala-investment-company, #mukesh-ambani, #reliance, #reliance-industries, #reliance-jio, #silver-lake, #telecommunications, #united-states

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KKR to invest $1.5 billion in India’s Reliance Jio Platforms

Mukesh Ambani’s Reliance Jio Platforms has agreed to sell 2.32% stake to U.S. equity firm KKR in what is the fifth major investment in the top Indian telecom firm in just as many weeks.

On Friday, KKR announced it will invest $1.5 billion in the Indian top telecom operator, a subsidiary of India’s most valued firm (Reliance Industries), joining fellow American investors Facebook, Silver Lake, Vista Equity Partners, and General Atlantic that have made similar bets on the Indian firm that has amassed over 388 million subscribers.

The investment from KKR, which has wrote checks to about 20 tech companies to date including ByteDance and GoJek, values the nearly four-year-old Reliance Jio Platforms at $65 billion. The announcement today further shows the growing appeal of Jio Platforms, which has raised $10.35 billion in the past month by selling about 17% of its stake to foreign investors that are looking for a slice of the world’s second-largest internet market.

Ambani, the chairman and managing director of Reliance Industries and who has poured more than $30 billion to build Jio Platforms, said the company was looking forward to leverage “KKR’s global platform, industry knowledge and operational expertise to further grow Jio.”

“Few companies have the potential to transform a country’s digital ecosystem in the way that Jio Platforms is doing in India, and potentially worldwide. Jio Platforms is a true homegrown next generation technology leader in India that is unmatched in its ability to deliver technology solutions and services to a country that is experiencing a digital revolution,” Henry Kravis, co-founder and co-chief executive of KKR, said in a statement.

“We are investing behind Jio Platforms’ impressive momentum, world-class innovation and strong leadership team, and we view this landmark investment as a strong indicator of KKR’s commitment to supporting leading technology companies in India and Asia Pacific,” he added.

More to follow…

#apps, #asia, #companies, #facebook, #funding, #general-atlantic, #india, #kkr, #mukesh-ambani, #reliance, #reliance-industries, #reliance-jio, #silver-lake, #united-states, #vista-equity-partners

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General Atlantic to invest $870M in India’s Reliance Jio Platforms

Mukesh Ambani’s Jio Platforms has agreed to sell 1.34% stake to General Atlantic, the latest deal in a series of deals the top Indian telecom operator has secured in recent weeks.

On Sunday, General Atlantic said it would invest $869.8 million in the Indian firm, joining Facebook, Silver Lake, and Vista Equity Partners that have made sizeable bets on the three-and-a-half-year old Indian firm.

General Atlantic’s investment values Jio Platforms at $65 billion (equity valuation) — the same valuation implied by the Silver Lake and Vista deals and a 12.5% premium over Facebook’s deal, the Indian firm said.

Sunday’s announcement further illustrates the growing appeal of Jio Platforms, which has raised $8.85 billion in the last one month, to foreign investors looking for a slice in the fast-growing world’s second largest internet market.

General Atlantic, a high profile investor in consumer tech space, has invested in dozens of firms such as Airbnb, Alibaba, Ant Financial, Box, ByteDance, Facebook, India’s NoBroker, Slack, Snapchat, and Uber.

“General Atlantic shares our vision of a Digital Society for India and strongly believes in the transformative power of digitization in enriching the lives of 1.3 billion Indians. We are excited to leverage General Atlantic’sproven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio,” said Mukesh Ambani, chairman of Jio Platforms-parent firm Reliance Industries, in a statement.

More to follow…

#asia, #facebook, #funding, #general-atlantic, #india, #mukesh-ambani, #silver-lake, #tc, #vista-equity-partners

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Quizlet valued at $1 billion as it raises millions during a global pandemic

As millions of students and teachers shift to learn from home in response to the novel coronavirus disease, modern-day flashcard business Quizlet has raised $30 million in a Series C round led by General Atlantic.

Quizlet’s chief executive officer Matthew Glotzbach said that the new funding values the business at $1 billion, up five times from its last funding round in 2018. Quizlet’s total known financing is more than $60 million.

The fresh funding comes off the heels of unprecedented usage for Quizlet, which connects students to virtual flashcards and study guides. Once a user makes a guide, they can share a unique link with friends and collaborate ahead of a test. School shutdowns due to COVID-19 have caused students to flock to the platform as they look for new ways to study, retain information and collaborate.

Students ask over 1 billion questions on Quizlet each week and more than 400 million virtual study guides have been created. The San Francisco-based startup is also seeing “massive international growth,” with 200% to 400% new user growth across its top international markets.

The company declined to share daily numbers, but said it sees over 50 million users every month, which is similar to a statistic it shared two years ago.

Glotzbach noted that more than two-thirds of high schoolers in the United States use Quizlet. At least half of U.S. college students have used the platform. That kind of market hold only comes from two aspects: volume and variety. The site’s curriculum spans from acid and bases in chemistry to the science of roller coasters to the art of sensation and perception.

As for why a flash card business could be worth a billion dollars, it isn’t. But an AI-powered tutoring platform could be, and that’s exactly what Quizlet is focusing on as a core product move in the foreseeable future. Quizlet Learn, Glotzbach says, is the most popular feature on the site and uses AI to help users study topics and learn mastery by a certain time.

Quizlet’s newest investor, General Atlantic, has invested in a number of edtech companies around the world, like OpenClassrooms, Ruangguru, Unacademy and, recently, Duolingo. Glotzbach said that Quizlet will continue to expand to new international markets, but does not have any “specific targets or names.” It is currently used in 130 countries across 19 localized languages, so it has a lot of room to grow.

Quizlet did not comment on profitability, but said its revenue is growing 100% year over year.

Quizlet views its closest competitor as Chegg, an online textbook company that went public in November 2013. Glotzbach says it has a larger audience and bigger footprint on education in the United States. He noted that other learning apps like Duolingo are vertical and subject focused, while Quizlet has a more broad curriculum.

While the new funding officially makes Quizlet a unicorn, Glotzbach said that when he announced the funding to his staff he compared the company more closely to a camel.

“We’ve built a very large-scale business with products that are easy to use, easy to get up and running and easy to share,” he said. “We use a low-cost subscription model that is very inexpensive so we get a lot of people upgrading to our premium product, and it drives economic business.”

Slow and steady is part of its founding story: Quizlet was founded in 2005 by a 15-year-old, Andrew Sutherland. It was fully bootstrapped until 2015. Glotzbach, who was previously an executive at YouTube, then joined in 2016.

But while it has humble roots, this new round was closed in the heat of a global pandemic.

“We saw record drops in the stock market multiple days in a row while trying to both manage [the round] and move an entire company to remote work,” he detailed. “It was closed during such a volatile time.”

Glotzbach said that the round was more opportunistic, and that it didn’t “need an injection of capital to make ends meet.”

Therefore, Quizlet’s new shiny valuation is yet another example of how edtech has found both revitalization and green shoots during this catastrophic time, and how remote learning is going from a tool to a necessity for many learners.

#edtech, #education, #general-atlantic, #quizlet, #recent-funding, #startups, #tc

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Indian education startup Byju’s is fundraising at a $10B valuation

Byju’s, an education learning startup in India that has seen a surge in its popularity in recent weeks amid the coronavirus outbreak, is in talks to raise as much as $400 million in fresh capital at a $10 billion valuation, said three people familiar with the matter.

The additional capital would be part of the Bangalore-based startup’s ongoing financing round that has already seen Tiger Global and General Atlantic invest between $300 million to $350 million into the nine-year-old startup.

That investment by the two firms, though, was at an $8 billion valuation, said people familiar with the matter. Byju’s was valued at $5.75 billion in July last year, when it raised $150 million from Qatar Investment Authority and Owl Ventures.

If the deal goes through at this new term, Byju’s would become the second most valuable startup in India, joining budget lodging startup Oyo, which is also valued at $10 billion, and follow financial services firm Paytm that raised $1 billion at $16 billion valuation late last year.

The talks haven’t finalized yet and terms could change, said one of the aforementioned people. This person, along with the other two, requested anonymity as the matter is private.

A spokesperson of Byju’s and Prosus Ventures, the largest investor in the startup, declined to comment. A spokesperson for Tiger Global did not respond to a request for comment.

Byju’s has seen a sharp surge in both its free users and paying customers in recent weeks as it looks to court students who are stuck at home because of the nationwide lockdown New Delhi ordered in late March.

The startup told TechCrunch last month that traffic on its app and website was up 150% in March and it added six million students to the platform during the month.

Other edtech startups, including Unacademy, which was recently backed by Facebook, and early-stage startups such as Sequoia Capital India-backed Classplus, and Chennai-based SKILL-LYNC, have also seen growth in recent weeks, they told TechCrunch last month.

Through its app, tutors on Byju’s help all school-going children understand complex subjects using real-life objects such as pizza and cake. The app also prepares students who are pursuing undergraduate and graduate-level courses.

Over the years, Byju’s has invested in tweaking the English accents in its app and adapted to different education systems. It had amassed more than 35 million registered users, about 2.4 million of which are paid customers as of late last year.

#asia, #byjus, #education, #facebook, #funding, #general-atlantic, #india, #owl-ventures, #prosus-ventures, #qatar-investment-authority, #recent-funding, #sequoia-capital, #startups, #tiger-global, #unacademy

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Understanding Duolingo’s quiet $10M raise

Earlier this month, edtech unicorn Duolingo raised $10 million in new venture capital from General Atlantic, per an SEC filing. With the raise, the online language learning platform accepted its first outside investor in almost three years. General Atlantic will take a board seat at the company, per Duolingo.

The company, which was last valued at $1.5 billion, says the round has increased its valuation, but it declined to share by how much.

General Atlantic has invested in a number of edtech companies around the world, like OpenClassrooms, Ruangguru and Unacademy. Duolingo said that General Atlantic’s global platform and experience with online education in Asia would help guide its own growth, specifically pointing to its plans to scale up the Duolingo English test.

The e-learning company last raised $30 million in December at that $1.5 billion valuation. To raise a smaller sum a few months later is uncommon. Historically, that type of raise could happen for a number of reasons: a company is accepting a later investment as part of the same funding round, it needs more cash and this is an easy way to raise it or the company tried to raise a new large round and failed to secure past $10 million.

So where does the language learning unicorn fit?

In Duolingo’s case, it said the $10 million was raised because it wanted to bring a new investor on, but didn’t need a massive amount of primary capital. Duolingo says it is cash-flow positive.

In the past few weeks, Duolingo launched a new app to help children read and write, passed one million paying subscribers for Duolingo Plus and disclosed that its annual bookings run rate is $140 million. The company also recently hired its first CFO and general counsel.

“Because our business has been growing very fast and we have more than enough capital, there was limited need for us to raise more primary capital. However, over the last year, we developed a relationship with General Atlantic,” the company said in a statement to TechCrunch.

Tanzeen Syed, a managing director for General Atlantic, said that Duolingo is a “market leader in the language learning space. Syed also said Duolingo has a “profitable, efficient business model while maintaining hyper-growth characteristics.”

Another key factoid here is that along with the $10 million, there was a larger secondary transaction, which occurs when an existing stockholder sells their stock for cash or to a third party, or to the company itself while the company is still private.

In this case, an existing investor in Duolingo sold a small portion of their existing stake to allow General Atlantic to have a bigger stake in the company.

The company declined to share the size of the secondary market transaction.

In light of this new information, Duolingo’s expansion to Asia, which has a robust market of English learners, welcomed one investor and lessened the stake of another.

Based on what we know, the transaction signals that a preexisting investor in Duolingo was looking for liquidity at a time where the public markets are tightening and private markets are pausing. And at a time when companies are staying private longer than ever before, secondary transactions are hardly rare.

Sometimes, however, secondary transactions signal a lack of faith from a preexisting investor in the company’s current trajectory.

Duolingo is full steam ahead on its goal to expand across the world — and now has new cash in the bank, and a new seat on the board, to prove it.

#duolingo, #edtech, #education, #general-atlantic, #recent-funding, #startups, #tc, #unicorn

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India’s NoBroker raises an additional $30M from General Atlantic

NoBroker, a Bangalore-based startup that helps those looking to rent or buy an apartment connect directly with property owners, has extended its previous financing round to add $30 million to it.

General Atlantic has invested $30 million in NoBroker’s Series D round, which the startup unveiled in October last year. The round, now closed at $80 million, pushes five-year-old NoBroker’s to-date raise to $151 million, the startup’s founders told TechCrunch.

NoBroker helps people looking to buy or lease an apartment avoid brokers, who charge a significant fee. The startup has expanded to six new cities in the last three months (now serving a dozen cities in total), and has expanded to new categories including gate keeping, moving and packing, helping tenants secure home loans, formulating agreements between tenants and the property owner, and fulfilling furniture and other decor needs.

The most remarkable thing about this fundraising is, of course, its timing. In a joint interview with TechCrunch, NoBroker’s founders Amit Kumar Agarwal, Akhil Gupta, and Saurabh Garg said the investment is an “endorsement” to the faith General Atlantic, its biggest investor, sees in the startup. The new capital will also give enough runway to NoBroker, they said.

Several prominent investors in India have cautioned startups that they might face additional challenges in raising fresh capital as they enter the “worst” times.

NoBroker founders acknowledged that the demand has weakened in the market, but said they were hopeful that it would bounce back as soon as schools reopen, which sees tens of thousands of families move to different cities each year.

New Delhi ordered a 21-day nationwide lockdown last month — which it has since extended to May 3 — that has restricted people’s movements and shut schools, malls, theatres and other public places.

“Our plan is to keep adding more properties to the platform, and serve more customers,” said Kumar, who serves as the chief executive of NoBroker. “We also want to grow our other services to become a one-stop solution for all of a tenant’s needs and maintain the market leading position,” he said.

These new categories also allow NoBroker to levy a cut of 10 to 20% on leads it generates. One of the areas that the startup has expanded to is society management, which helps people keep a log on visitors and their approval to enter the premises and stay connected with one another.

This service has been adopted by over 2,000 societies that house more than 500,000 residents. NoBroker recently also partnered with BigBasket to help in grocery delivery.

“NoBroker Pay, NoBroker Hood, NoBroker Home Services and several such innovations are deepening the engagement of owners, tenants, buyers and community residents with its platform making it a go-to-destination beyond its core offering of rental and sale transactions,” said Shantanu Rastogi, Managing Director at General Atlantic, in a statement.

NoBroker has more than 3.5 million properties registered on its platform and has served more than 8.5 million individuals.

#asia, #bigbasket, #coronavirus, #covid-19, #covid19, #funding, #general-atlantic, #nobroker, #payments, #real-estate

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SoftBank-backed Opendoor has announced a massive layoff, cutting 35% of its employees

Opendoor, the seven-year-old, San Francisco-based company that has from the outset aimed to help people buy and sell homes with the “push of a button” (or nearly), has just laid off more than a third of its staff.

According to a statement sent to us by co-founder and CEO Eric Wu, the company has laid off 600 of its employees, which constitutes 35% of its overall team, says Wu.

Like so many sectors of the economy, the residential real estate market has taken a hit as U.S. residents are asked to stay indoors and all but essential services are shut down in most of the country. (Florida continues to operate by its own rules and yesterday decided that World Wrestling Entertainment is an essential service.)

Home sales haven’t fallen as far or as fast as one might imagine, though that picture is changing as the weeks wear on. According to Realtor.com, the number of U.S. homes for sale declined 15.7% year-over-year in the month of March, with the number of newly listed properties falling by 13.1% the week ending March 21 and by 34.0% for the week ending March 28.

In his statement, Wu didn’t include details regarding the degree to which Opendoor has been impacted by the COVID-19 shutdown, saying only that because the pandemic has “had an unforeseen impact on public health, the U.S. economy, and housing,” the company has “seen declines in the number of people buying, selling, and moving during this time of uncertainty.”

He added that the reduction in force is “necessary to ensure that we can continue to deliver on our mission and build the experience consumers deserve.”

Every company’s management team is handling layoffs differently, of course. In the case of Opendoor, its separation package seems fairly generous as these things go, with laid-off employees receiving eight weeks of full pay and 16 weeks of reimbursement for health insurance coverage. Wu says he will also be donating his 2020 salary to a relief fund for Opendoor employees who may be in “more challenging financial or health circumstances” owing to the virus and that an unspecified number of other executives are also contributing to the fund.

It’s a better deal than some earlier employees received. Even before the coronavirus took hold in the U.S., Opendoor was paring back its employee base. Last summer, as Bloomberg reported at the time, the company fired 50 people and asked up to 300 others in offices around the country to relocate to its Phoenix location or else part ways with the outfit.

Opendoor specializes in “instant buying,” which remains a small but growing part of the residential real estate market, partly owing to the risk it entails. Zillow last fall told The New York Times that it bought fewer than 700 homes in 2018 but expected to be buying up to 5,000 homes per month within five years.

Opendoor meanwhile said it acquired 11,000 homes in 2018. It hasn’t disclosed how many homes it bought in 2019, saying in a December post that it “bought and sold thousands of homes” over the course of the year.

Typically, the company aims to hold homes for less than three months before selling them to a home buyer. To help fuel all those purchases, Opendoor has raised $4.3 billion in equity and debt funding over the years, including $1.3 billion in equity.

Backed early on by Khosla Ventures, then GGV Capital, the company had in more recent funding rounds strengthened its ties to the traditional real estate market by adding to is backers one of the country’s largest home construction companies, Lennar Corporation. The idea behind the relationship is for Opendoor to help get customers into Lennar-built homes faster, as well as to encourage them to “trade up” where possible.

Opendoor was also the recipient of one of the SoftBank Vision Fund’s enormous checks, trading a minority stake in the company in September 2018 for a $400 million check from the Japanese conglomerate, which also installed managing director Jeff Housenbold on the company’s board.

Opendoor announced its most recent round — a $300 million financing, including from General Atlantic and others — almost a year ago, at a reported post-money valuation of $3.8 billion.

It’s unclear to what extent the current market will impact that number going forward. Given the scale of its cutbacks, it’s also unclear whether, when the economy begins to re-open, Opendoor will continue to operate in the 21 cities where its services are currently available.

For now, the company has stopped making cash offers on homes. It says on its site that in the meantime, it is continuing to work with third-party buyers who may be able to provide home sellers with cash offers, as well as connecting customers with listing agents in cases where they are needed.

#coronavirus, #covid-19, #general-atlantic, #khosla-ventures, #layoffs, #opendoor, #personnel, #real-estate, #softbank, #tc

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