Zwift, a 350-person, Long Beach, Calif.-based online fitness platform that immerses cyclists and runners in 3D generated worlds, just raised a hefty $450 million in funding led by the investment firm KKR in exchange for a minority stake in its business.
Permira and Specialized Bicycle’s venture capital fund, Zone 5 Ventures, also joined the round alongside earlier backers True, Highland Europe, Novator and Causeway Media.
Zwift has now raised $620 million altogether and is valued at north of $1 billion.
Why such a big round? Right now, the company just makes an app, albeit a popular one.
Since its 2015 founding, 2.5 million people have signed up to enter a world that, as Outside magazine once described it, is “part social-media platform, part personal trainer, part computer game.” That particular combination makes Zwift’s app appealing to both recreational riders and pros looking to train no matter the conditions outside.
The company declined to share its active subscriber numbers with us — Zwift charges $15 per month for its service — but it seemingly has a loyal base of users. For example, 117,000 of them competed in a virtual version of the Tour de France that Zwift hosted in July after it was chosen by the official race organizer of the real tour as its partner on the event.
Which leads us back to this giant round and what it will be used for. Today, in order to use the app, Zwift’s biking adherents need to buy their own smart trainers, which can cost anywhere from $300 to $700 and are made by brands like Elite and Wahoo. Meanwhile, runners use Zwift’s app with their own treadmills.
Now, Zwift is jumping headfirst into the hardware business itself. Though a spokesman for the company said it can’t discuss any particulars — “It takes time to develop hardware properly, and COVID has placed increased pressure on production” — it is hoping to bring its first product to market “as soon as possible.”
He added that the hardware will make Zwift a “more immersive and seamless experience for users.”
Either way, the direction isn’t a surprising one for the company, and we don’t say that merely because Specialized participated in this round as a strategic backer. Cofounder and CEO Eric Min has told us in the past that the company hoped to produce its own trainers some day.
Given the runaway success of the in-home fitness company Peloton, it wouldn’t be surprising to see a treadmill follow, or even a different product entirely. Said the Zwift spokesman, “In the future, it’s possible that we could bring in other disciplines or a more gamified experience.” (It will have expert advice in this area if it does, given that Swift just brought aboard Ilkka Paananen, the co-founder and CEO of Finnish gaming company Supercell, as an investor and board member.)
In the meantime, the company tells us not to expect the kind of classes that have proven so successful for Peloton, tempting as it may be to draw parallels.
While Zwift prides itself on users’ ability to organize group rides and runs and workouts, classes, says its spokesman, are “not in the offing.”
Southeast Asia’s leading property listing company PropertyGuru is making great strides across the region as it secures a fresh investment of SG$300 million ($220 million), it announced this week.
The proceeds, financed by existing investors KKR and TPG, both buyout titans, will fuel PropertyGuru’s already ambitious push across its main market Singapore, Thailand, Indonesia, Vietnam and Malaysia, where it operates country-specific real estate portals.
The private funding arrived almost a year after the online realtor pulled its plan to list on the Australian Stock Exchange. The company, launched in 2007, was reportedly aiming to raise up to $275 million at the time. And it has been nearly two years since the firm raised $144 million from KKR.
Growth has been encouraging for PropertyGuru in 2019, with a 24% year-over-year revenue growth that beat its own forecasts. The company calls itself Southeast Asia’s largest player, but it’s up against some formidable opponents, including a joint venture set up by close rivals 99.co and iProperty last year. 99.co is itself backed by prominent investors like Facebook co-founder Eduardo Saverin, Sequoia Capital and East Ventures.
Online realtors have been making aggressive expansion in Southeast Asia as the region becomes an attractive destination for real estate investors who want to tap the region’s relatively low investment threshold and high rental yield. Many come from neighboring China, which has reined in property speculation in recent years.
PropertyGuru has kept itself busy in 2020 so far, launching a mortgage marketplace in Singapore and a virtual walkthrough feature for property developers as well as seekers at a time when traveling is unsafe or unattainable. Every month, 24.5 million property seekers use the company’s various products to find homes, which number 2.7 million across the region at the time of its latest funding news.
“Our strong financial performance over the last few years has enabled us to invest aggressively and smartly, to build what is today an integrated and differentiated technology platform that caters to the unique opportunities in Southeast Asian markets,” chief executive Hari V. Krishnan said in a statement.
Like it or loathe it, video has proven to be the most engaging of all mediums across the web, and today a company out of Israel called Artlist — which provides royalty-free libraries of music, sound effects and even video itself to enhance video content — is announcing a significant growth round of $48 million, both to continue its expansion, and to build better technology to help navigate users to the perfect clip.
The funding is being led by KKR, with participation also from Elephant Partners, a VC out of Boston that has also backed Allbirds, Scopely and Keelvar among others. This is the first funding that Artlist has ever announced, although Elephant had backed it with a previously undisclosed amount previously. Ira Belsky, Artlist’s co-CEO who co-founded the company with Itzik Elbaz, and Eyal Raz and started as a filmmaker himself, said the company has mostly been bootstrapped since being founded in 2016. It’s not disclosing the total amount raised to date, nor its valuation except to say that it’s on the rise.
“We have been 100% cash flow positive since the day we started,” he said. “We just want to accelerate growth because there is an opportunity to cater to a wider audience.”
The market gap that Artlist is tackling is a byproduct of how the internet is used and evolving. According to a recent report from Sandvine, video accounts for just under 58% of online traffic globally, with video, social and gaming (with the latter two also being very video-heavy) together accounting for some 80% of traffic. That speaks to a huge amount of content being made available not just from premium media provides like Netflix or Disney, but popular a vast array of user-generated content on channels like YouTube, TikTok, Facebook and Twitter.
While some of these may be building their own sound and video content, a large part of those, to speed up production and focus on whatever aspect of their work that they can better individualise and control, many creators turn to stock audio and video footage in their work.
Indeed, there are a number of others in this same space, including the likes of Getty, Epidemic Sound, Shutterstock, Artgrid, the platforms themselves and many others, but Belsky said that in his time as a filmmaker, he found that many of these were not quite what he was looking for himself in terms of connecting him with just the right music that he was looking for, which was part of the impetus behind building Artlist.
What’s interesting is that Covid-19 has had a double impact on that market. Not only has there been a huge boost in online video usage as more people are spending time at home and staying away from public places, but in terms of creators, Belsky notes that many of them have found it harder either to shoot certain kinds of footage, or collaborate with people create music and other sound effects, all of which has led to a surge of usage for platforms like Artlist.
Artlist’s royalty-free model means that people pay subscription fees to Artlist to use its platform — prices range between $149 and $599 per year, depending on usage and whether you are taking the music, video, sound effects or combined plans — but then nothing more for individual clips. On the other side of the marketplace, the company does not disclose how much its artists are making from the service, but the basic model is that it varies depending on how much a track is used, and generally they are very competitive. “Our artists make more from us than they do from other platforms,” Belsky said. There are no plans to switch that business model include non-royalty-free, nor outright sales of exclusive rights, he added.
On royalty-free alone, the funding comes on the back of significant growth for the company in the last couple of years, with both users and amount of content both on exponential growth curves, respectively now standing at 1.1 million subscribers and 25.8 million pieces of content (mostly music at the moment, Belsky said).
While many users will incorporate one kind of media, either video or music, into a bigger video project — such as this Mercedes Benz commercial that uses Artlist audio — others looking to see how creative they can be when leaning on both, which speaks to how we might see video continue to evolve as the market matures and yet more video content gets produced:
That brings us to the company’s next steps. Belsky said that while today there are already various taxonomies for searching for just the right piece of content, the plan is to try to make that process more intuitive. Being based in Israel, the company has been tapping some interesting data science talent, and the country is well-known for producing some of the more interesting startups using AI and all of that is feeding into Artlist’s development, too.
“We want to invest in AI for personalisation,” he said. “We see ourselves in the creative tech space, a combination of content and technology. The aim is to find the best piece of music, but also the best user experience when finding it, to make it fast and intuitive.”
One experiment has involved people uploading examples of what they’d like, and Artlist searching for “matches” in its own catalogue, and there are others to come, he said. (Indeed, given what we’ve seen with the advances in semantic search, there is a potentially very interesting opportunity to start to explore how to, for example, ingest a video clip to try to match the mood of a piece of audio to it, which is not something that the company is exploring today, but could be an avenue down the line.)
Meanwhile, given Artlist’s traction and revenue growth, the opportunities and the needs of creators today are interesting enough to make this an interesting bet, despite the stiff competition.
“The growth of digital content creation – and the evolving way in which it is consumed – has generated a tremendous amount of opportunities for creators, but the process of licensing digital assets remains a significant challenge for small and large creators alike,” said Patrick Devine, a member of KKR’s Next Generation Technology Growth investment team, in a statement. “What impresses us most about Artlist is the management team’s dedication to helping creators focus on what they do best and removing friction from the process of discovering and accessing content.”
Over the past few months, COVID-19 has brought much of the fundraising community to a standstill. However, amidst it all India’s hyper0growth telco Reliance Jio Platforms has put its fundraising efforts into full gear.
The recent deals have cemented Mukesh Ambani’s ambition to make his oil-to-retails giant Reliance Industries (India’s most valuable firm) a top homegrown internet giant.
On Friday, he said he plans to publicly list Reliance Jio Platforms and Reliance Retail, the largest retail chain in the country — also controlled by him — in the next five years.
As Reliance Jio Platforms, which has become the India’s top telecom operator with over 388 million subscribers in less than four years, continues its funding spree, at Extra Crunch we are doubling down on our focus on covering everything Jio from here and out.
As we’ve attempted to get up to speed on the company, we’ve compiled a supplemental list of resources and readings that we believe are particularly helpful for learning the story of Jio, which remains a mysterious firm to many.
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.
Global investment firm KKR is betting on the pizza business — it just led a $43 million Series C investment in Slice.
Formerly known as MyPizza, Slice has created a mobile app and website where diners can order a custom pizza delivery from their local, independent pizzeria.
And for those pizzerias, CEO Ilir Sela said Slice helps to digitize their whole business by also creating a website, improving their SEO and even allowing them to benefit from the “economies of scale” of the larger network, through bulk orders of supplies like pizza boxes.
Sela contrasted his company’s approach with other popular food delivery apps that he characterized as aggregators. For one thing, Slice “anchors” your favorite pizzerias in the app, giving them the top spots and making it easy to place your regular order with just a few taps. And it will be adding more loyalty features soon.
“Our job is to make loyal customers even more loyal,” he said.
Of course, the environment for restaurants has changed dramatically in the last few months, thanks to COVID-19. But most pizzerias are already set up for takeout and delivery, and Sela said that more than 90% of the 12,000-plus pizzerias that work with Slice have stayed open.
He also pointed to the company’s Pizza vs Pandemic initiative, which raises funds for pizzerias to feed healthcare workers. The program has raised more than $470,000 and fed an estimated 140,000 workers.
“Local independent pizzerias have been feeding Americans across communities for decades and we are excited to put our resources behind Slice as they help to move these businesses online,” said KKR Principal Allan Jean-Baptiste in a statement. “Slice charges small business owners a fraction of the fees charged by food delivery apps and offers a suite of vertical specific solutions to solve the challenges faced by independent pizza makers.”
Slice had previously raised $30 million, according to Crunchbase. Sela said he’ll be using the new funding to bring on more pizzerias and continue building a “vertically integrated solution for the small businesses, in order to solve more and more of their challenges.”