Join Accel’s Andrew Braccia and Sonali De Rycker for a live Q&A today at 2 pm EDT/11 am PDT

Disrupt was just days ago, but the TechCrunch crew is continuing our regular series of public chats with leading founders and venture capitalists under the Extra Crunch Live banner.

Today, we’re excited to host Andrew Braccia and Sonali De Rycker from Accel. The pair of investors will join us for a live Q&A at 2 p.m. Eastern time today (11 a.m. Pacific, 8 p.m. CET). Links and details are down below.

As discussed last week when we announced the session, there’s a lot to get to. Braccia led Slack’s Series A, which means we’ll need to discuss remote work, the direct listing debate and modern SaaS stuff. And with De Rycker we’ll dig into what she’s seeing in Europe and how the two startup markets compare in today’s evolving markets.

(If you are just catching up to Extra Crunch Live, we’ve been hosting live discussions since the early COVID-19 days here in the United States with folks like Mark CubanPlaid founder Zach Perret and Sequoia’s Roelof Botha taking part.)

I’ve also been thinking about India (Accel raised a fifth India fund in 2019), which will be worth talking about a little bit even if neither of our guests primarily focuses on the country. And if we have time, it would even be good to get their feelings and reactions to the TikTok mess.

But, before we get into the more exotic areas of conversation we’ll power through the nuts-and-bolts stuff that founders want to know: How active Accel is today, what size checks it is currently writing, its sector focuses and the like. Given that we have a full hour if we want it, we’ll be able to cover a lot of ground.

Be sure to bring your own questions, and I’ll do my best to get to them as we chat.

It should prove to be a good, and, I hope, useful conversation that I am looking forward to hosting. Login details follow for Extra Crunch folks, and you can snag a cheap trial here if you need access.

(If you want to pre-submit a question, you can tweet it at me, but after the actual livestream kicks off I will no longer be checking Twitter. Get them in now, in other words.)

Details

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#DealMonitor – Point Nine legt fünften Fonds auf (99,9 Millionen) – Forto bekommt 25 Millionen


Im aktuellen #DealMonitor für den 22. September 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

Authada 
++ 
InfoCert, eine Tochtergesellschaft der Tinexta-Gruppe, steigt bei Authada ein und sichert sich dabei 16,7 % der Anteile. “Unter bestimmten Bedingungen” kann  InfoCert in den kommenden Jahren die weiteren Anteile erwerben. InfoCert investiert zunächst einmal einen “mittleren siebenstelligen Betrag” in Authada. main incubator, eine Tochtergesellschaft der Commerzbank, investierte 2018 einen siebenstelligen Betrag in das Cybersecurity-Startup. Das 2015 gegründete Darmstädter Technologie-Startup bietet seinen Kunden BSI zertifizierte Produkte zur sicheren und nutzerfreundlichen Identitätsprüfung an.

Forto
+++ Der tschechische Investor Inven Capital, Cherry Ventures, Northzone, Cavalry Ventures und Maersk Growth, der Investmentarm des dänischen Logistikkonzerns, investieren in das Logistik-Startup Forto, früher als FreightHub bekannt. “Laut Insidern, die an dem Deal beteiligt waren, liegt die Höhe des Investments bei mindestens 25 Millionen Euro” – schreibt Gründerszene. Forto wurde 2016 von Ferry Heilemann, Erik Muttersbach, Michael Wax und Fabian Heilemann gegründet. Die Jungfirma vermittelt Aufträge zur Container-Beförderung an Transportunternehmen. Derzeit beschäftigt die Firma rund 300 Mitarbeiter. Knapp 50 Millionen dürften schon in Forto geflossen sein.

LawStar
+++ Der 1925 gegründete Linde Verlag investiert in das Wiener LegalTech-Startup LawStar – siehe Der Brutkasten. Die Lernplattform für Jusstudierende und Juristen in Österreich wurde von Georg Steiner und Christoph Angel gegründet.

EXITS

ioxp
+++ Das amerikanische Technologieunternehmen PTC übernimmt ioxp, ein Spin-off des Deutschen Forschungszentrums für Künstliche Intelligenz (DFKI). ioxp gilt als Pionier auf dem Gebiet der videobasierten Augmented Reality, Das Unternehmen bietet kognitive AR- und KI-Lösungen für Wissenstransfer, Schulung und Qualitätssicherung an. “In einem ersten Schritt plant PTC die Integration der ioxp-Technologie zur Validierung und Verifizierung von Verfahrensanweisungen in seine Enterprise AR-Lösungssuite”, teilt das Unternehmen mit.

BioCBD
+++ Die Münchner Unternehmensgruppe SynBiotic übernimmt die europäische Marke BioCBD. “Die Marke ist bereits etabliert: Stand heute erwirtschaftet BioCBD über zwei Millionen Euro profitablen Nettoumsatz pro Jahr und ist aktuell in Deutschland, Italien, Spanien, Polen und Ungarn aktiv”, heißt es in der Presseaussendung. Nach Hempamed ist BioCBD bereits die zweite Akquisition von SynBiotic in diesem Jahr.  Kaufpreis ist ein niedriger einstelliger Millionenbetrag.

Much-Net
+++ Der Treasury-Management-System-Anbieter Bellin, der zum amerikanische Softwareunternehmen Coupa gehört, übernimmt Much-Net, einen Anbieter von Software und Services für die Bewertung von Finanzinstrumenten. “Die Software von Much-Net wird entsprechend in das bestehende Treasury-Angebot integriert. Zu den Instrumenten, die analysiert und bewertet werden können, zählen u.a. sämtliche Plain-Vanilla-Instrumente, strukturierte Anleihen, Rohstoffderivate, Sicherheiten und strukturierte Derivate, Hedge Accounting (IAS39 und IFRS9)”, teilt das Unternehmen mit.

DIE HÖHLE DER LÖWEN

FlowKiss
+++ In der vierten Folge der achten Staffel investierten Regal-Löwe Ralf Dümmel und Sales-Löwe Carsten Maschmeyer 90.000 Euro in FlowKiss (25 %), früher als FH2OCUS bekannt. Das Startup, das von Sonja Wüpping und Jan Oostendorp gegründet wurde, bietet ein koffeinhaltiges Sprudelwasser an.

Klang2
In der vierten Folge der achten Staffel investierte Pharma-Löwe Nils Glagau 150.000 Euro in Klang2 (33,3 %). Das Startup von Sebastian Oberlin und Adrian Rennertz bietet lleine Holzquadrate an, die über das Smartphone Sounds abspielen, wie Klassische Musik oder Tiergeräusche. Das Gedächtnisspiel für die Ohren soll musikalische sowie Allgemeinbildung mit Spaß verbinden. Die wollten ursprünglich 150.000 Euro für 10 % einsammeln.

VENTURE CAPITAL

Point Nine Capital
+++ Der Berliner Frühphasen Geldgeber Point Nine Capital legt seinen fünften Fonds auf. Im Topf sind diesmal symbolträchtige 99.999.999 Euro. “The new fund will invest between €0.5 to €2.5 million per company initially and commits to participating in the Series As of all companies”, teilen die Hauptstädter mit. Zuletzt legte Point Nine 2019 einen Fonds auf (75 Millionen). In den vergangenen Jahren investierte der der Geldgeber, der seit 2008 unterwegs ist, in Startups wie Algolia, Brainly, Chainalysis, Contentful, Delivery Hero, DocPlanner, Loom, Mambu, Revolut und Typeform. Point Nine interessiert sich insbesondere für Themen wie B2B-SaaS and B2B-Marketplace. Im Zuge des neuen Fonds steigen Louis Coppey und Ricardo Sequerra Amram bei Point Nine zu Partnern auf.

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, #authada, #bellin, #berlin, #cannabis, #cavalry-ventures, #cherry-ventures, #cyber-security, #flowkiss, #forto, #hempamed, #infocert, #inven-capital, #ioxp, #kapital, #klang2, #legaltech, #logistik, #maersk-growth, #much-net, #northzone, #point-nine-capital, #ptc, #synbiotic, #venture-capital, #wien

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Morgan Beller, co-creator of the Libra digital currency, just joined the venture firm NFX

Morgan Beller, who is a co-creator of the proposed Libra digital currency, along with Facebook vice presidents David Marcus and Kevin Weil, has left the company to become a general partner with the venture firm NFX .

In a call yesterday, she said she first became acquainted with the San Francisco-based outfit five years ago when on a “tech trek” to Israel, she met its local partner, Gigi Levy-Weiss, and formed a friendship with him.

At the time, she was a young partner at Andreessen Horowitz, working on its deal team after graduating from Cornell as a statistics major.

A role working on corporate development and strategy at Medium would follow, then it was on to Facebook in 2017, where Beller began in corporate development and — intrigued by cryptocurrency tech — where she quickly began evangelizing to her bosses the importance of better understanding it.

As she half-jokingly explains it, “Crypto is a mental virus for which there is no cure. I was at a16z when they got infected with the crypto virus.” She eventually caught it herself, and by the time she joined Facebook, she says she “realized no one was thinking about that space full time, so I took it upon myself to [help the company] figure out its point of view.”

Indeed, a CNBC story about Beller last year reports that at one point, she was the sole person on a Facebook blockchain initiative —  meeting with those in the know, attending relevant events, and otherwise researching the technology. Bill Barhydt, the CEO of the digital wallet startup Abra, told the outlet of Beller:  “I give her a lot of credit for taking what seems like a very methodical, long-term approach to figuring this out.”

All that said, Beller notes that as a full-time investor with NFX, she will not be focused exclusively or even mainly on crypto. Her focus instead will be finding and helping to cultivate seed-stage startups that aim to grow so-called network effects businesses.

It’s the broad theme of NFX, a now 25-person outfit cofounded five years ago by serial entrepreneurs who have all seen their companies acquired, including Levy-Weiss (who cofounded the online travel site Lastminute.com, and the social casino game publisher Playtika); Pete Flint (cofounder of the home buyers’ site Trulia); and James Currier (of the social network Tickle).

Certainly, she will keep busy at the firm, she suggests. As part of getting to know the partners and their thinking better, she introduced them to one company that they have since funded.

The pace has generally picked up, Flint tells us, saying that during the second quarter of this year and the third, NFX has twice broken its own investing records both because of “incredible founders who are reacting to this opportunity” and growing awareness about NFX, which last year closed its second fund with $275 million.

Last month, for example, NFX led a seed round for Warmly, a nine-month-old, San Francisco-based startup whose product tracks individuals in a customer’s CRM system, then sends out a notification when one of his or her contacts changes jobs. It also led a round recently for Jupiter, a year-old, San Francisco-based grocery delivery startup.

Naturally, Beller’s new partners are full of praise for her. Flint says the firm began looking for a fourth partner two years ago and that it has “spoken with dozens of exceptional people” since then, but it “always came back to Morgan.”

As for why the 27-year-old is ready to leap back into VC, Beller says that her work across Facebook and Medium and a16z “made me realize my favorite parts of projects is that zero-to-one phase and that with investing, it’s zero-to-one all day” with a team she wanted to be part of.

Further, she adds, while at Facebook, she was helping scout out deals for the venture firm Spark Capital, so she’s already well-acquainted with the types of founders to which she gravitates. “They’re are all weird in the right ways, and they’re all maniacally obsessed with winning.”

As for how she launches her career as a general partner in a pandemic, she notes that she loves walking and that she’ll happy cover 20 miles a day if given the opportunity.

“If anyone wants to safely walk with me,” she suggests that she’d love it.  Says Beller, “I’m not worried about San Francisco longer term. I don’t think there’s a replacement for in-person meetings.”

#andreessen-horowitz, #cryptocurrencies, #facbook, #fundings-exits, #libra, #medium, #nfx, #novi, #recent-funding, #spark-capital, #startups, #tc, #venture-capital

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The Peloton effect

During the most recent quarter, only a few earnings reports stood out from the rest. Zoom’s set of results were one of them, with the video-communications company showing enormous acceleration as the world replaced in-person contact with remote chat.

Another was Peloton’s earnings from the fourth quarter of its fiscal 2020, which it reported September 10th. The company’s revenue and profitability spiked as folks stuck at home turned to the connected fitness company’s wares.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Shares of Peloton have rallied around 4x since March, roughly the start of when the COVID-19 pandemic began to impact life in the United States, driving demand for the company’s at-home workout equipment. And in late June, athleisure company Lululemon bought Mirror, another connected fitness company aimed at the home market for around $500 million.

With Peloton’s 2019 IPO and its growth along with Mirror’s exit in 2020, connected fitness is demonstrably hot, and private-market investors are taking notice. A recent Tweet from fitness tech watcher Joe Vennare detailing a host of recent funding rounds raised by “digital fitness” companies made the point last week, piquing our curiosity at the same time.

Is there really some sort of Peloton effect driving private investment into lots of connected fitness startups? How hot is the more nascent side of connected fitness?

This morning let’s take a look through some recent funding rounds in the space to get a feel for what’s going on. (If you’re a VC who cares about the sector, feel free to email in your own notes, subject line “connected fitness” please.) We’ll then execute the same search for Q3 2019 and see how the data compares.

Hot Wheels

To start with the current market I pulled a Crunchbase query for all Q3 funding rounds for companies tagged as “fitness” and then filtered out the cruft to get a look at the most pertinent funding events.

Here’s what I came up for for Q3 2020, to date:

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A meeting room of one’s own: three VCs discuss breaking out of big firms to start their own gigs

One of the more salient trends in the tech world — arguably the engine that propels it — has been the recurring theme of people who hone talents at bigger companies and then strike out on their own to found their own startups.

(Some, like Max Levchin, even hire entrepreneurial types intentionally to help perpetuate this cycle and get more proactive teams in place.)

It turns out that trend doesn’t just apply to companies, but also to the investors who back them. At Disrupt we talked with three venture capitalists who have followed that path: making their names and cutting their teeth at major firms, and now building their own “startup” funds on their own steam.

On the macro level, the whole world has been living through a challenging time this year. But as we’ve seen time and again the wheels have continued to turn in the tech world.

IPOs are returning, products are being rolled out, people are buying a lot online and using the internet to stay connected, there has been a lot of M&A, and promising startups are getting funded.

Indeed, if entrepreneurs and their innovations are the engine of the tech world, money is the fuel, and that is the opportunity that Dayna Grayson (formerly of NEA, now founder at Construct Capital), Renata Quintini (formerly at Lux Capital, now founder at Renegade Partners) and Lo Toney (formerly GV, now founder at Plexo Capital) have zeroed in to address.

Grayson said that part of the reason for striking out to start Construct Capital with co-founder Rachel Holt was what they saw as an opportunity to create a firm that specifically funded startups tackling the industrial sector:

“Half the US economy’s GDP, half the GDP of this country, hasn’t really been digitized,” she said. “[Firms] haven’t been tech enabled. They’ve been way under invested… The time is now to build with early stage entrepreneurs.”

While Construct is focusing on a sector, Renegade was founded to focus on something else: the stage of development for a startup, and specific the Series B, which the firm refers to as “supercritical”, essential in terms of getting team and strategy right after a startup is no longer just starting out, but before and leading to scaled growth.

“We saw through our boards over and over again companies that figured out how to scale their organizations, put in the processes,” said Quintini, who co-founded Renegade with Roseanne Wincek. “On the people side, they actually went further and captured a lot more market cap and market share faster. Once we saw this opportunity, we could not let it go.”

She compares the current imperative to really focus on how to build and scale companies at the “supercritical” stage to the focus on early stage funding that typified an earlier period in the development of the startup ecosystem 15 years ago. “You could get a million dollars and be in business, a lot more people could, and you had less time to figure out what really resonated with customers,” she said. “That really gave rise to today.”

Toney has taken yet another approach, focusing not on sector, nor stage, but using capital to help germinate a whole new demographic of founders, the premise being that funding a more diverse and inclusive mix of founders is not just good for creating a more level playing field, but also for the good of more well-rounded products that speak to a wider population of users.

“I was having a great time at GV, but I just saw this opportunity as being one that was too hard to resist,” said Toney of founding Plexo, which invests not just in startups but in funds that are following a similar investment principle to his. Investing in both funds and founders is something GV did as well, but the added ability to turn that into investing with a social imperative was important. “To have this byproduct of increasing diversity and inclusion in the ecosystem [is something] I’m super passionate about,” he said. 

We are living through a time when the tech world seems to be awash in capital. One of the byproducts of having so many successful tech companies has been limited partners rushing in to back more VCs in hopes of also getting some of the spoils: many firms are closing funds in record times, oversubscribed, and that’s having a knock-on effect not just terms of startups getting funded, but VCs themselves also multiplying with increasing frequency. All three said that the fact that the all identify as more than just “another new VC”, with specific purposes, also makes it easier for them to get themselves noticed to get involved in good deals.

Grayson said that the challenge of starting a firm in the midst of a global pandemic turned out to be a piece of good fortune in disguise in an industry that thrives on the concept of “disruption” (as we at TechCrunch know all too well…).

“We were really lucky that we started investing in a COVID world,” she said. “So many things have been up ended. And I think, you know, software adoption and technology adoption have been moved up 10-20 years in industry. [And] the way that we work together really has changed.” She also said that they’ve found themselves almost looking for companies “created in a COVID environment”, which indeed would qualify as a battle-tested business model.

In terms of raising funds themselves, Toney also recalled the period when we saw a real surge of VCs emerging to fund companies at the seed stage, and the growth of “solo capitalists” around that.

“I think what’s really interesting about solo capitalists is [how] they take their understanding of operations, and a deep network of other technologists, both from big companies as well as entrepreneurs, and … leverage access to all that deal flow by going out and actually raising capital from other sources, whether that be high net worth individuals or family offices or even institutions,” he said.

#disrupt, #funding, #startups, #tc, #tc-disrupt, #tc-disrupt-sf-2020, #venture-capital

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#DealMonitor – Fly und Point Nine investieren in TradeLink – seed + speed investiert in presize.ai


Im aktuellen #DealMonitor für den 21. September 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

TradeLink
+++ Die Berliner Geldgeber Fly Ventures und Point Nine Capital investieren in TradeLink. Das Münchner Startup, das Anfang 2020 von Frederic Krahforst, Tobias Nendel (Outfittery-Mitgründer) und Michael Bücker gegründet wurde, positioniert sich als “digitale Lösung für Liefer- und Transportabstimmung rund um das Lager”. Zielgruppe sind insbesondere Logistikleiter, Kontraktlogistiker und Lagerleiter. Fly und Point Nine halten nun jeweils rund 12 % an TradeLink. Hintergründe gibt es im neuen ds-Insider-Podcast. #EXKLUSIV

zerolens
+++ Point Nine Capital investiert in Zerolens aus Wien, ein virtuelles Fotostudio. Über das Startup, das 2018 von Nik Redl, Mirko Vodegel und Lukas Fechtig gegründet wurde, ist es möglich ansehnliche Produktfotos ohne Fotograf zu erstellen. Konkret geht es dabei um Fotos in künstlich erzeugten dreidimensionalen Umgebungen. Zuvor investierte bereits Speedinvest in das junge Unternehmen. Hintergründe gibt es im neuen ds-Insider-Podcast. #EXKLUSIV

presize.ai
+++ Der Berliner Kapitalgeber seed + speed Ventures investiert gemeinsam mit Plug & Play, UnternehmerTUM und mehreren Angel-Investoren in presize.ai. Das Münchner Startup, das 2019 von Awais Shafique, Tomislav Tomov und Leon Szeli gegründet wurde, bietet seinen Nutzern mit einer mobilen Body-Scanning-Technologie die Möglichkeit, basierend auf einem Smartphone-Video ihres Körpers, die passende Größe bei Online-Bestellungen zu finden. Damit wollen sie unter anderem die hohe Retourenrate aufgrund von Bestellungen der falschen Größen durch Computer Vision und Deep Learning reduzieren. seed + speed hält nun rund 14 % an presize.ai. Hintergründe gibt es im neuen ds-Insider-Podcast. #EXKLUSIV

PeopleFlow
+++ Picus Capital investiert in PeopleFlow. Das junge Berliner Startup unterstützt Unternehmen beim HR-Management von Auslandsmitarbeitern. PeopleFlow managt dabei Dinge wie Gehaltsabrechnung, Sozialleistungen und Steuern. “Mit PeopleFlow sind Sie immer zu 100 % rechtskonform”, verspricht die Jungfirma, die von Carsten Lebtig, früher Uber Eats, TestCloud.de sowie McKinsey & Company, geführt wird. Picus hält rund 28 % an PeopleFlow. Hintergründe gibt es im neuen ds-Insider-Podcast. #EXKLUSIV

Kianava
+++ Der österreichische Geldgeber Speedinvest investiert in Kianava. Das junge Berliner Health-Startup, das von Saman Hashemian (früher 8fit) gegründet wurde, entwickelt eine Telemedizin-Plattform über die Patienten aller Art über einen längeren Zeitraum – mehrere Monate – von Ärzten und Therapeuten betreut werden können. Speedinvest hält rund 29 % an Kianava. Hintergründe gibt es im neuen ds-Insider-Podcast. #EXKLUSIV

EXITS

Dr.Smile
+++ Anfang Juli übernahm der Schweizer Zahnimplantate-Hersteller Straumann das Aligner-Startup Dr.Smile. Laut Presseaussendung aus dem Sommer übernahm das Unternehmen “eine bedeutende Mehrheitsbeteiligung an Dr.Smile” und verpflichtete sich zu zusätzlichen Investitionen, um das Wachstum bis zu einer vollständigen Übernahme zu finanzieren. Jetzt ist klar: Straumann sicherte sich im ersten Schritt 74,9 % an Dr.Smile. Und zwar gegen eine Barzahlung von 35 Millionen Schweizer Franken. Die Gruppe sicherte sich zudem “das Recht, die restlichen Anteile nach dem 31. August 2021 jederzeit zu erwerben”. Zu guter Letzt gibt es noch eine Earn-Out-Klausel: “Die Vereinbarung über die bedingte Kaufpreiszahlung basiert auf der Erreichung von Umsatzzielen und verpflichtet die Gruppe, bis zum 30. Juni 2023 in drei Tranchen einen geschätzten Betrag von 75 Millionen Franken zu zahlen. Abhängig von der künftigen Umsatzentwicklung kann der Betrag höher oder niedriger sein”. Dr.Smile wurde 2017 von Jens Urbaniak und Christopher von Wedemeyer gegründet. Das Berliner Zahnschienen-Unternehmen beschäftigte zuletzt rund 200 Mitarbeiter. Hintergründe gibt es im neuen ds-Insider-Podcast. #EXKLUSIV

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): Shutterstock

#aktuell, #e-health, #fly-ventures, #hr, #kianava, #logistik, #munchen, #peopleflow, #picus-capital, #point-nine-capital, #presize-ai, #seed-speed-ventures, #speedinvest, #telemedizin, #tradelink, #venture-capital, #wien, #zerolens

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SaaS Ventures takes the investment road less traveled

Most venture capital firms are based in hubs like Silicon Valley, New York City and Boston. These firms nurture those ecosystems and they’ve done well, but SaaS Ventures decided to go a different route: it went to cities like Chicago, Green Bay, Wisconsin and Lincoln, Nebraska.

The firm looks for enterprise-focused entrepreneurs who are trying to solve a different set of problems than you might find in these other centers of capital, issues that require digital solutions but might fall outside a typical computer science graduate’s experience.

Saas Ventures looks at four main investment areas: trucking and logistics, manufacturing, e-commerce enablement for industries that have not typically gone online and cybersecurity, the latter being the most mainstream of the areas SaaS Ventures covers.

The company’s first fund, which launched in 2017, was worth $20 million, but SaaS Ventures launched a second fund of equal amount earlier this month. It tends to stick to small-dollar-amount investments, while partnering with larger firms when it contributes funds to a deal.

We talked to Collin Gutman, founder and managing partner at SaaS Ventures, to learn about his investment philosophy, and why he decided to take the road less traveled for his investment thesis.

A different investment approach

Gutman’s journey to find enterprise startups in out of the way places began in 2012 when he worked at an early enterprise startup accelerator called Acceleprise. “We were really the first ones who said enterprise tech companies are wired differently, and need a different set of early-stage resources,” Gutman told TechCrunch.

Through that experience, he decided to launch SaaS Ventures in 2017, with several key ideas underpinning the firm’s investment thesis: after his experience at Acceleprise, he decided to concentrate on the enterprise from a slightly different angle than most early-stage VC establishments.

Collin Gutman from SaaS Ventures

Collin Gutman, founder and managing partner at SaaS Ventures (Image Credits: SaaS Ventures)

The second part of his thesis was to concentrate on secondary markets, which meant looking beyond the popular startup ecosystem centers and investing in areas that didn’t typically get much attention. To date, SaaS Ventures has made investments in 23 states and Toronto, seeking startups that others might have overlooked.

“We have really phenomenal coverage in terms of not just geography, but in terms of what’s happening with the underlying businesses, as well as their customers,” Gutman said. He believes that broad second-tier market data gives his firm an upper hand when selecting startups to invest in. More on that later.

#boston, #chicago, #collin-gutman, #enterprise, #entrepreneurship, #healthcare-tech, #saas, #saas-ventures, #seed-investing, #startups, #tc, #venture-capital

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The stages of traditional fundraising

Funding comes in stages.

Understanding these will help you know when and where to go for funding at each stage of your business. Further, it will help you communicate with funders more precisely. What you think when you hear “seed funding” and “A rounds” might be different from what investors think. You both need to be on the same page as you move forward.

Early money stage

The first stage is early money, when cash is invested in exchange for large amounts of equity. This cash, which ranges between $1,000 and $500,000, typically, comes from the three Fs: friends, family and (we don’t like this nomenclature) fools. The last-named folks are essentially “giving” you cash, and these investors are well-aware that you will most likely fail — hence, “fools.”

Your earliest investors should reap the biggest rewards because they are taking the most risk. The assumption is that, ultimately, you’ll make good or improve their investment. The reality, they understand, is that you probably won’t.

Your first money may come from bootstrapping or F&F, and your first big checks may come from an accelerator that pays you about $50,000 for a fairly large stake in your company. Accelerators are essentially greenhouses — or incubators — for startups. You apply to them. If accepted, you get assistance and a small amount of funding.

Why do investors give early money? Because they trust you, they understand your industry and they believe you can succeed. Some are curious about what you are doing and want to be close to the action. Others want to lock you up in case you are successful. In fact, many accelerators have this in mind when they connect with new startups. At its core, the funding landscape is surprisingly narrow. When you begin fundraising, you’ll hear a lot of terminology including descriptions of various funding categories and investors. Let’s talk about them one by one.

Bootstrapping

As the old saying goes, if you need a helping hand, you’ll find it at the end of your arm. With that adage in mind, let’s begin with bootstrapping.

Bootstrapping comes from the concept of “pulling yourself up by your own bootstraps,” a comical image that computer scientists adapted to describe how a computer starts from a powered-down state. In the case of an entrepreneur, bootstrapping is synonymous with sweat equity — your own work and money that you put into your business without outside help.

Bootstrapping is often the only way to begin a business as an entrepreneur. By bootstrapping, you will find out very quickly how invested you are, personally, in your idea.

Bootstrapping requires you to spend money or resources on yourself. This means you either spend your own cash to build an early version of your product, or you build the product yourself, using your own skills and experience. In the case of service businesses — IT shops, design houses and so on — it requires you to quit your day job and invest, full time, in your own business.

Bootstrapping should be a finite action. For example, you should plan to bootstrap for a year or less and plan to spend a certain amount of money bootstrapping. If you blow past your time or money budget with little to show for your efforts, you should probably scrap the idea.

Some ideas take very little cash to bootstrap. These businesses require sweat equity — that is, your own work on a project that leads to at least a minimum viable product (MVP).

Consider an entrepreneur who wants to build a new app-based business in which users pay (or will pay) for access to a service. Very basic Apple iOS and Google Android applications cost about $25,000 to build, and they can take up to six months to design and implement. You could also create a simpler, web-based version of the application as a bootstrapping effort, which often takes far less cash — about $5,000 at $50 an hour.

You can also teach yourself to code and build your MVP yourself. This is often how tech businesses begin, and it says plenty about the need for founders to code or at least be proficient in the technical aspects of their business.

You can’t bootstrap forever. One entrepreneur we encountered was building a dating app. She had dedicated her life to this dating app, spending all of her money, quitting her job to continue to build it. She slept on couches and told everyone she knew about the app, networking to within an inch of her life. Years later it is a dead app in an app store containing millions of dead apps. While this behavior might get results one in a thousand times, few entrepreneurs can survive for a year of app-induced penury, let alone multiple years.

Another entrepreneur we knew was focused on nanotubes. He spent years rushing here and there, wasting cash on flights and taking meetings with people who wanted to sell him services. Many smart investors told him that he should go and work internally at a nanotube business and then branch out when he was ready. Instead, he attacked all angles for years, eventually leading to exhaustion. He’s still at it, however, which is a testament to his intensity.

#column, #crowdfunding, #entrepreneurship, #startups, #tc, #venture-capital

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#DealMonitor – Optiopay bekommt 5 Millionen – Holidu sammelt weitere Millionen ein


Im aktuellen #DealMonitor für den 18. September 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

Optiopay
+++ LeadX Capital Partners, der Investmentableger des Handelskonzerns Metro investiert, und Avaloq, ein Software- und Finanzdienstleistungsunternehmen, investieren 5,25 Millionen Euro in das Berliner FinTech Optiopay – siehe FinanceFWD. Die Bewertung soll bei rund 26 Millionen Euro liegen. Zum Start von Optiopay konnten Kunden von Unternehmen, die ihre Auszahlungen über OptioPay abgewickelt haben, ihre Zahlung in höherwertige Einkaufsgutscheine umwandeln. Inzwischen ist das FinTech breiter aufgestellt und positioniert sich als “Open Banking spezialisierter Finanztechnologiedienstleister für kundenzentrierte Mehrwertlösungen und Bankdaten basierte Werbung”. Zahlreiche Firmen nutzen die White Label-Lösung von Optiopay bereits. Optiopay wurde 2014 von Marcus Börner und Oliver Oster gegründet.

Holidu
+++ Der ehemalige Booking.com-Chef Kees Koolen investiert “mehr als 4 Millionen Euro” in Holidu. “Die Finanzierung ist Teil einer 5 Millionen Euro umfassenden Erweiterung der Series-C Finanzierungsrunde, die Holidu im letzten Jahr über 40 Millionen abgeschlossen hat”, teilt das Unternehmen mit. Das Startup, das 2014 von den Brüdern Johannes und Michael Siebers gegründet wurde, sammelte bereits mehr als 60 Millionen ein – unter anderem von Prime Ventures, coparion, MairDuMont Ventures, EQT Ventures, Venture Stars und Senovo.

Stabl
+++ Energie360, der Smart Energy Innovation Fund, die Initiative for Industrial Innovators und weitere Business Angels investieren 1 Million Euro in Stabl. Das junge Unternehmen aus München, das von Arthur Singer, Christoph Dietrich, Martin Sprehe und Nam Truong gegründet wurde, entwickelt eine “neue Generation Wechselrichter, die die Leistung und Effizienz der Batteriespeicher auf eine höhere Stufe heben”. Die Wurzeln der Idee stammen aus Forschungsprojekten an der Technischen Universität München und der Universität der Bundeswehr München.

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): Shutterstock

#aktuell, #avaloq, #berlin, #engergie, #fintech, #leadx-capital-partners, #munchen, #optiopay, #stabl, #venture-capital

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Benchmark’s Peter Fenton: ’10 to 20 years of innovation just got pulled forward’

Earlier today at TechCrunch Disrupt, venture capitalist Peter Fenton joined us to talk about a variety of issues. Among them, we discussed how he’s putting his stamp on Benchmark now that, 15 years after joining the storied firm, he’s its most senior member.

Fenton said that he’s mostly focused on ensuring that the firm doesn’t change. It wants to remain small, with no more than six general partners at a time. It wants to keep investing funds that are half a billion dollars or less because its small team can only work closely with so many founders. He also made a point of noting that Benchmark’s partners still divide their investment profits equally, unlike at other, more hierarchical venture firms, where senior investors reap the biggest financial benefits.

We also talked about diversity because (hint hint) Benchmark — which is currently run by Fenton, Sarah Tavel, Eric Vishria and Chetan Puttagunta — is hiring one to two more general partners.

We talked about why Benchmark, a Series A investor in both Uber and WeWork, seemingly took so long to address cultural issues within both companies.

And we talked about the opportunities that has Benchmark, and Fenton specifically, most excited right now. Read on for more, or check out our full conversation below.

On whether Benchmark, which historically had all white male partners and now counts Fenton as its only white male partner, might hire a Black partner on his watch, given the dearth of Black investors in the industry (along with the changing demographics of the U.S.):

“That’s a personal issue for me, which is going to be measured in the outcomes, just like we have companies that take on initiatives that matter and then measure them and hold themselves accountable. I won’t feel good about our failure if we don’t continue to tilt towards diversity. It’s not enough that I’m the only white male partner. The industry is so systematically skewed in the wrong direction, and we’ve gotten so good at rationalizing how it ended up here, that I don’t think we can tolerate it anymore.”

Benchmark is looking to reinvent itself through “three interfaces,” he continued. “It’s who are we talking with and spending time with in terms of [who we might invest in] — that has to change; who are the people making investment decisions, [meaning] the partnership; and then what’s the composition of the companies we’ve invested in, meaning the executives and the boards.

“Before I’m done with the venture business, I want to be able to point to empirical outcomes . . .”

As for why Benchmark waited for the public to rally against its portfolio companies Uber and WeWork before taking action to address cultural issues (in Uber’s case, in reaction to former engineer Susan Fowler’s famous blog post and, in the case if WeWork, in reaction to its S-1 filing):

“I can’t give you a crisp answer because ultimately, what happens in the public eye isn’t the whole story of what was going on between Benchmark and those CEOs.” It’s “far more complicated, far more nuanced, far more engaged.”

Said Fenton: “What you start with in any partnership is this idea that we’re all flawed and providing what feels like unconditional support to a founder to nurture them and help them to understand in ways they might be able to from their direct reports where they are going to get in trouble, where they’re going to fall short, and then buttress them.

“I can say, having watched both [Benchmark investors] Bruce [Dunlevie] and Bill [Gurley] in those roles that they give their heart and soul to enable the full potential of those entrepreneurs, and in each case, it wasn’t enough.

“I don’t know what to say other than, I don’t envision another individual in that [board] role being able to do a better job because what they gave was everything, and those companies built enormous organizations, great success, delight and joy for customers, and they had, in each of their cases, pathologies in their culture. A number of companies that I’m involved with have pathologies in their culture. Every organization can build them. What motivated both Bill and Bruce was the constituencies that go beyond the CEO, the employees, the customers, and in the case of Uber, the drivers . . .

“You could say Susan Fowler was the reason it all happened; I can assure you that the work that was being done far preceded [the publication of her blog post]. Could we have done more, more quickly? You always look back and say, ‘Yeah.’ I think you learn as an organization. We’re not perfect.”

As for the trends that Fenton is watching most closely right now, he suggested a world of opportunities have opened up in the last six months, and he thinks they’ll only gain momentum from here:

“What I’m most excited about is, we’re not going back to normal. What’s so amazing is this shock to the system is really a big opportunity for entrepreneurs to come and say, ‘What do we need to build to recreate and unlock all these things we lost when we stopped going into workplaces?’

“So I think this opportunity to build the tools for a world that’s ‘post place’ has just opened up and is as exciting as anything I’ve seen in my venture career. You walk around right now and you see these ghosts towns, with gyms, classes you might take [and so forth] and now maybe you go online and do Peloton, or that class you maybe do online. So I think a whole field of opportunities will move into this post-place delivery mechanism that are really exciting. [It] could be 10 to 20 years of innovation that just got pulled forward into today.”

#airtable, #benchmark, #cockroach-labs, #diversity, #peter-fenton, #startups, #tc, #techcrunch-disrupt, #techcrunch-include, #uber, #venture-capital, #wework

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Startup founders must overcome information overload

Many of the founders I spoke to said one of their biggest early challenges was figuring out how to sift through all the advice they receive.

Advice overload plagues everyone and founders have it especially bad, given that most startups have a board of advisors. Founders described needing conviction in their decisions and preserving carved out time for their own information processing. They viewed the ability to sift through all this advice as a crucial skill to learn. 

There is so much information out there, you end up driving yourself crazy,” said Devin Lennon, founder of end-of-life advice service Death Doula Devin. “Figuring out who is more helpful than others was difficult. Typically people with more experience tended to be more helpful, but not always,” said Hardbound founder Nathan Bashaw. “We wasted a lot of time talking to the wrong people.”

According to Ryan Williams, CEO and co-founder of proptech platform Cadre, “The real challenge is who you listen to for which points. You get information overload. The real skill is pattern recognition over time of who is actually useful for good information — knowing who to listen to and for what. You get a lot of conflicting advice. That’s where I’ve grown the most.”

#advice, #analysis, #artificial-intelligence, #column, #decision-making, #entrepreneurship, #information-overload, #nextgenvest, #startups, #tc, #venture-capital

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Does early-stage health tech need more ‘patient’ capital?

Crista Galli Ventures, a new early-stage health tech fund in Europe, officially launched last week. The firm offers “patient capital” — with only a single LP (the Danish family office IPQ Capital) — and promises to provide portfolio companies with deep healthcare expertise and the extra runway needed to get over regulatory and efficacy hurdles and to the next stage.

The firm has an initial $65 million to deploy and is led by consultant radiologist Dr. Fiona Pathiraja. With offices in London and Copenhagen, it operates as an “evergreen” fund, meaning it doesn’t follow traditional five-year VC fundraising cycles.

In fact, Crista Galli Ventures’ pitch is that traditional venture isn’t well-suited to early-stage health tech where it can take significantly longer to find product-market fit with healthcare practitioners and systems and then become licensed by local regulators.

To dig deeper into this and CGV’s investment remit more generally, I interviewed Pathiraja about what she looks for in health tech founders and startups. We also discussed Crista Galli LABS, which operates alongside the main fund and backs founders from underrepresented backgrounds at the pre-seed stage.

TechCrunch: You describe Crista Galli Ventures (CGV) as an early-stage health tech fund that offers patient capital and backs companies in Europe. In particular, you cite deep tech, digital health and personalised healthcare. Can you elaborate a bit more on the fund’s remit and what you look for in founders and startups at such an early stage?

Dr. Fiona Pathiraja: We like founders with bold ideas and international ambitions. We look for mission-driven founders who believe their companies can make a real and positive impact on the lives of people and patients the world over.

We will look for founders who deeply understand the problem they are trying to tackle from all angles — especially the patient’s perspective, but also that of the clinician and relevant regulators — and we want to see that they are building their solutions to solve this. This means they will make an effort to understand the complex and nuanced healthcare landscape and all the stakeholders in it.

In terms of founder characteristics, in my opinion, the best founders will be mission driven, able to tell a compelling story, and motivate others to join them. Grit and resilience are important and several of our portfolio companies were founded around 6-8 years ago and they are doggedly continuing to build.

#biotechnology, #crista-galli-ventures, #entrepreneurship, #europe, #health, #healthcare, #healthtech, #skin-cancer, #startups, #tc, #venture-capital

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Superhuman’s Rahul Vohra asks 6 VCs how to raise funding when the sky is falling

When I wrote about how to run your startup in a downturn, the world was on the brink of recession. The economy contracted sharply — and the effects of the 2020 recession will persist.

If you are a founder, you can help. You can build companies that connect people, create employment and spark lasting change.

“Building is how we reboot the American dream,” declared Marc Andreessen, venture capitalist and co-founder of Andreessen Horowitz. In his rallying cry “It’s Time to Build” he writes: “We need to break the rapidly escalating price curves for housing, education and healthcare, to make sure that every American can realize the dream, and the only way to do that is to build.”

Yet building requires capital. How do you raise funding when the economy is on its knees? I spoke with six top venture capitalists to find out:

  • Bill Trenchard, general partner, First Round Capital
  • Dan Rose, chairman, Coatue Ventures
  • Brianne Kimmel, founder, Work Life
  • Sarah Guo, general partner, Greylock
  • Merci Grace, partner, Lightspeed
  • Charles Hudson, managing partner, Precursor Ventures

How has investment behavior changed during the pandemic?

  • Deal velocity has gone up.
  • The bar for investments is rising.
  • VCs are nurturing existing investments and “proto-founders.”

The recession did not cause activity to stall. In fact, deal velocity has gone up.

“It’s almost like a superheated environment right now,” says Bill Trenchard, general partner at First Round. “The speed with which partnerships can quickly meet with a company that’s of interest is so much higher in the Zoom world. It’s changing our thinking around velocity in the market, which was already very high.”

“We’ve been as active as we were before,” agrees Dan Rose, chairman at Coatue Ventures. “Maybe even slightly more active because I think more good companies are raising as kind of an insurance policy. When it became clear that we weren’t going to be able to meet with founders in person anymore, we snapped to Zoom.”

Velocity may be rising, but investors now require more data to reach conviction.

“The pricing is still the same but we see risk going up,” says Bill Trenchard. “You need to be very rigorous on your investment theses and how you’re looking at companies. We’ve been looking for more grapple hooks and more data for things that we do invest in, so that we have more conviction when we do.”

“There’s been almost an immediate shift in terms of expectations from VCs,” says Brianne Kimmel, founder of early stage venture firm Work Life. “Companies have been forced to come in with more richness and customer development, a clear path to revenue, a lot more of a strategic approach around the core mechanics of the business and more specifically the business model.”

Sarah Guo, general partner at Greylock, also has high expectations for founders.

#column, #coronavirus, #corporate-finance, #covid-19, #entrepreneur, #entrepreneurship, #founder, #rahul-vohra, #startups, #superhuman, #tc, #venture-capital

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#DealMonitor – Infarm sammelt 170 Millionen ein – Bayes bekommt 6 Millionen


Im aktuellen #DealMonitor für den 17. September 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

Infarm
+++ Jetzt offiziell: LGT Lighthouse, der Beteiligungsarm des Prinzenhauses Liechtenstein, Hanaco, Bonnier, Haniel und Latitude sowie die bestehenden Investoren Atomico, TriplePoint Capital, Mons Capital und Astanor Ventures investieren 170 Millionen US-Dollar in das Berliner Unternehmen Infarm, einen Vertical Farming-Anbieter. “Das finale Closing der Runde soll sich auf 200 Millionen US-Dollar belaufen”, teilt das Unternehmen mit. Die Financial Times hatte bereits Ende Juni über das Investment berichtet. “Das frische Kapital – eine Mischung aus Eigen- und Fremdkapital – erhöht die Gesamtfinanzierung von Infarm auf mehr als 300 Millionen US-Dollar”, teilt Infarm weiter mit. Infarm wurde 2013 in Berlin von Osnat Michaeli und den Brüdern Erez und Guy Galonska gegründet. Die Jungfirma entwickelt ein “intelligentes modulares Farming-System”. Edeka, Aldi Süd und Kaufland nutzen Infarm bereits.

Bayes
+++ Die Familie Pohlad, Fertitta Capital und der Sony Innovation Fund investieren 6 Millionen UD-Dollar in Bayes, früher als Dojo Madness bekannt. Das Berliner Startup ist auf die Entwicklung von Software für den E-Sports-Bereich spezialisiert. “Den Kern der Unternehmensaktivitäten bilden Shadow.GG, Marktführer im Professional Esports Analytics Bereich, und Bayes Esports, 2019 gemeinsam mit Sportradar gegründet”, heißt es in der Presseaussendung. Gegründet wurde Dojo Madness von Christian Gruber, Mathias Kutzner, Markus Fuhrmann und Jens Hilgers.

corefihub
+++ Mehrere Business Angels und ein “Institutioneller Investor”, die allerdings alle namentlich nicht genannt werden, investieren eine sechsstellige Summe in corefihub. Das Unternehmen aus Bruchsal kümmert sich um die “Digitalisierung der gewerblichen Immobilienfinanzierung”. corefihub möchte Banken, Vermittler, Immobilienunternehmen, Investoren und Projektentwickler unterstützen, ihre Finanzierungen schneller, einfacher und günstiger zu bearbeiten”. corefihub wurde von Daniel Rodriguez, Oliver Klemm und Sebastian Schefzcyk gegründet.

MiFIDRecorder
+++ Der Münchner B2B-Company Builder Finconomy steigt bei MiFIDRecorder ein und sichert sich dabei 25,1 % am Unternehmen. Die Jungfirma bietet “Taping-Lösungen für Banken, Haftungsdächer, Maklerpools, Vermögensverwalter und Finanzvermittler” an. Zudem stellt MiFIDRecorder seit einigen Monaten auch eine Aufzeichnungssoftware für Video-Konferenzen bereit.

EXITS

So1
+++ Die So1-Gründer Raimund Bau und Sebastian Gabel kaufen die Überreste ihres insolventen Unternehmens – siehe FinanceFWD. Der tief gefallene Zahlungsdienstleister Wirecard übernahm den Berliner Big-Data-Dienst im Juni dieses Jahres. Der Kaufpreis soll im hohen einstelligen oder niedrigen zweistelligen Millionenbereich gelegen haben. Im Zuge der Wirecard-Insolvent schlitterte auch So1 in die Insolvenz. “Der Kaufpreis liegt im fünfstelligen Euro-Bereich und damit deutlich unter der Summe, die Wirecard im Frühjahr für die Firma überwiesen hat”, heißt es im Artikel.

VENTURE CAPITAL

Archimedes New Ventures
+++ Die familiengeführte Böllhoff Gruppe aus Bielefeld, ein Hersteller und Händler für Verbindungselemente und Montagesysteme, gründet mit Archimedes New Ventures einen Corporate-
Venture-Ableger. “Verantwortlich für eine neue digitale Innovationskultur liegt der Schwerpunkt der Gesellschaft auf der Entwicklung und Förderung neuer digitaler Geschäftsmodelle für die Böllhoff-Gruppe”, teilt das Unternehmen mit. Mit Joinect, einer KI-basierten Cloud-Software, die Ingenieuren die Suche nach Verbindungslösungen erleichtert, schob Archimedes bereits das erste Startup an.

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): Shutterstock

#aktuell, #archimedes-new-ventures, #astanor-ventures, #atomico, #bayes, #berlin, #bielefeld, #bollhoff-gruppe, #bonnier, #corefihub, #e-sports, #fertitta-capital, #finconomy, #food, #hanaco, #haniel, #infarm, #latitude, #lgt-lighthouse, #mifidrecorder, #mons-capital, #proptech, #so1, #sony-innovation-fund, #triplepoint-capital, #venture-capital, #wirecard

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#DealMonitor – 6 millionenschwere Startups, die jeder auf dem Schirm haben sollte


Auch mitten in der weltweiten Corona-Krise konnten einige Startups und Grownups zuletzt üppige Millionenbeträge einsammeln. Einige dieser Jungunternehmen kennt in der Szene quasi jeder, andere wiederum fliegen auch trotz bekannter Investoren und millionenschwerer Investmentbeträge noch immer weiter unter dem üblichen Szene-Radar. Die wichtigsten, interessantesten und größten Finanzierungsrunden (bei denen die Summe tatsächlich bzw. annähernd bekannt ist) listen wir an dieser Stelle deswegen noch einmal gebündelt auf.

Ankerkraut
Die Beteiligungsgesellschaft EMZ Partners stieg kürzlich beim jungen Hamburger Gewürz-Startup Ankerkraut ein. Bundesweit bekannt wurde das junge Unternehmen, das 2013 von Stefan und Anne Lemcke gegründet wurde, durch die Teilnahme an der Vox-Show “Die Höhle der Löwen”. Der Umsatz soll zuletzt im “mittleren zweistelligen Millionenbereich” gelegen haben. EMZ Partners tätig in der Regel Investments ab 10 Millionen Euro.

DyeMansion 
Der dänische Geldgeber Nordic Alpha Partners und die Altinvestoren UVC Partners, btov Partners, KGAL und AM Ventures investierten kürzlich 12 Millionen Euro in DyeMansion- Das Münchner Startup kümmert sich um 3D-Druck – und zwar im industriellen Sektor.” Von der perfekt sitzenden Brille bis hin zum personalisierten Automobil-Interieur macht unsere Technologie 3D-gedruckte Produkte zu einem Teil unseres Alltags”, teilt das IndustrialTech mit.  DyeMansion wurde 2015 von Felix Ewald und Philipp Kramer gegründet.

Element 
Sony Financial Ventures und der japanische Geldgeber Global Brain sowie Finleap, das Versorgungswerk der Zahnärztekammer Berlin und SBI Investment investierten kürzlich 10 Millionen Euro in Element. Signal Iduna, Finleap, Engel & Völkers Capital, SBI Investment und Alma Mundi Ventures investierten zuletzt 23 Millionen in Element, einen Zulieferer von digitalen Versicherungsprodukten. Zielgruppe der Jungfirma, die 2017 von Finleap angeschoben wurde, sind andere Startups, etablierte Unternehmen, Händler und auch bestehende Versicherer.

Insta Immo
Talis Capital, Holtzbrinck Ventures, Tom Stafford und Rahul Mehta von DST Global sowie Mato Peric investierten kürzlich 14 Millionen Euro in Insta Immo. Das Göttinger Proptech und FinTEch, das von Hans-Christian Zappel, Samantha Kempe und Avinav Nigam gegründet wurde, kauft im Auftrag institutioneller Investoren “zentral gelegene Wohnobjekte im Auftrag institutioneller Investoren” auf und wandelte diese in “voll möblierte ‘Living as a Service’-Wohnungen um

Klara
Gradient Ventures, der Investmentableger von Google, investierte kürzlich gemeinsam mit Frist Cressey, FirstMark Capital, Lerer Hippeau und Stage 2 Capital 15 Millionen US-Dollar in Klara. Das 2013 von Simon Bolz und Simon Lorenz In Berlin gegründete Startup entwickelt einen Kommunikationsdienst für das Gesundheitswesen, das Arztpraxen mit Patienten und anderen medizinischen Anbietern verknüpft. Seit einigen Jahren bearbeitet die Jungfirma von Newy York aus den amerikanischen Markt.

Omio
Temasek, Kinnevik, Goldman Sachs, NEA und Kleiner Perkins investierten kürzlich 100 Millionen US-Dollar in das Berliner Travel-Startup Omio. In den vergangenen Jahren pumpten Investoren schon fast 300 Millionen Dollar in das Unternehmen, das früher als GoEuro bekannt war. Derzeit wirken 350 Mitarbeiter für die Reiseplattform über die Nutzer Bahn-, Bus- sowie Flugtickets vergleichen und auch buchen können.

TippDie (bisher) wichtigsten Startup-Investitionen des Jahres
Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): Shutterstock

#aktuell, #ankerkraut, #dyemansion, #element, #insta-immo, #investitionen, #klara, #omio, #venture-capital

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Blume Ventures’ Karthik Reddy on Indian startup ecosystem, geo-political tension with China and coronavirus

Despite the coronavirus outbreak, which has slowed down deal-making across the world, dozens of startups in India have raised considerable amounts in recent months. Unacademy, which raised $110 million in February, closed a new round of $150 million this month.

These large check sizes, and the frequency at which they are being bandied out, were almost unheard of in India just 10 years ago. The list of problems these local startups were solving then was also quite smaller back in the day.

Karthik Reddy has seen this change very closely.

He co-founded venture capital firm Blume Ventures, where he also serves as a partner, 10 years ago. Blume Ventures is the largest Indian venture capital firm. In a wide-ranging interview at Disrupt 2020, Reddy talked about the state of the startup ecosystem in India, some of the challenges it is confronting today and what lies ahead for the market.

“Fifteen years is what you should consider the active VC build-out in India. For the first five to seven years, we were kind of faking it till we make it. We sold the idea that we can replicate what the U.S. and China have done,” he said.

The breakout moment in India happened when low-cost Android smartphones flooded the market. A handful of startups with consumer-facing services such as Flipkart, Paytm and Zomato emerged to serve the first tens of millions of smartphone users in the country.

“The Hail Mary moment there was Reliance Jio’s arrival in the market,” he said. India’s richest man, Mukesh Ambani, entered the telecommunications market in the second half of 2016 with the world’s cheapest mobile tariff.

Moreover, for several months, Ambani simply did not charge Jio subscribers anything for access to 4G data. So India at large, once conscious about each megabyte it spent on the internet, suddenly started consuming gigabytes of content everyday. “It democratized data and smartphones at a scale that we have not seen in countries other than China,” said Reddy.

Karthik Reddy is the co-founder of Blume Ventures, the largest Indian venture capital firm

As hundreds of millions of users in India arrived on the internet, scores of startups in the country started to solve more complex problems: Bangalore-based startup Meesho today is helping millions of women sell products digitally; Classplus, a Blume Ventures-backed startup, has built a Shopify-like platform for teachers and coaching centres to serve students directly.

As India grew into the world’s second largest internet consumer, it has also attracted American and Chinese technology groups, all of which are looking for their next billion users. Several major investment firms, including Silver Lake, Alibaba Group, Tencent, GGV Capital, Tiger Global, General Atlantic, KKR, Vista, and Owl Ventures have also arrived and become aggressive in their investments in recent years.

But the geo-political tension between India and China have slightly complicated matters. In April this year, India amended its foreign direct investment policy to China to seek approval from New Delhi for their future deals in the country. Chinese investors have ploughed billions of dollars into the Indian startup ecosystem in recent years.

It’s a sensitive topic, given the involvement of the government, that most VCs in India are not comfortable addressing it even off the record. But Reddy weighed in.

“If not an arm or limb, it cuts off a finger or two for your choices. You are a little handicapped,” he said. “But there’s a caveat to that. It’s limited to certain segments of the market. I don’t think China and Hong Kong investors, even though they were very familiar with Chinese VC success story, were really interested in India’s deep tech and cross-border tech,” he said.

Today those areas account for more than a third of the robust ecosystem in India, Reddy argued. “If you look at the entire ecosystem collectively, there’s a single-digit influence of Chinese capital. […] If you ask me personally, 40% of my portfolio is not even remotely affected by it,” he said.

But several large consumer-facing Indian startups, such as Paytm, Zomato and Udaan, do have Chinese investors on their cap tables. Reddy said they would be impacted as uncertainty looms over when — and if — India would offer any relaxation to its current stand.

He said he is hopeful that the government would provide some distinction to VC-managed fund money that is not necessarily Chinese just because it’s run by someone who originated there.

Reddy also spoke about why he thinks early-stage startups, despite the proliferation of VC firms in India focusing on young firms, continue to receive less attention. We also spoke about how the coronavirus is impacting his portfolio startups and the industry at large and what advice he has for startup founders to navigate the turbulence times. You can watch this and much more in the interview below.

#alibaba-group, #asia, #blume-ventures, #china, #disrupt, #disrupt-2020, #india, #karthik-reddy, #startups, #techcrunch-disrupt, #unacademy, #venture-capital, #zomato

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Interswitch to revive its Africa venture fund, CEO confirms

Pan-African fintech company Interswitch plans to fire up its corporate venture arm again—according to CEO Mitchell Elegbe—who spoke at TechCrunch Disrupt on Wednesday.

The Nigerian founder didn’t offer much new on the Lagos-based firm’s expected IPO, but he did reveal Interswitch will revive investments in African startups.

Founded by Elegbe in 2002, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly cash-based economy. The company now provides much of the rails for Nigeria’s online banking system that serves Africa’s largest economy and population of 200 million people. Interswitch has expanded to offer personal and business payment products in 23 Africa countries.

The fintech firm achieved unicorn status in 2019 after a $200 million equity investment by Visa gave it a $1 billion valuation.

Reviving venture investing

Interswitch, which is well beyond startup phase, launched a $10 million venture arm in 2015 that has been dormant since 2016, after it acquired Vanso—a Nigerian fintech security company.

But Interswitch will soon be back in the business of making startup bets and acquisitions, according to Elegbe. “We’ve just certified a team and the plan is to begin to make those kinds of investments again.”

He offered a glimpse into the new fund’s focus. “This time around we want to make financial investments and also leverage the network that Interswitch has and put that at the disposal of these companies,” Elegbe told TechCrunch.

“We’ll be very selective in the companies we invest in. They should be companies that Interswitch clearly as an entity can add value to. They should be companies that help accelerate growth by the virtue of what we do and the customers that we have,” he said.

Recent venture events in African tech have likely pressed Interswitch to get back in the investing arena. As an ecosystem, VC on the continent has increased (roughly) by a factor of four over last five years, to around $2 billion in 2019. But most of that has come from single-entity investment funds, while corporate venture funding (and tech M&A activity) has remained light. That’s shifted over the last several months and the entire uptick has occurred in African fintech around entities that could be viewed as Interswitch competitors.

In July, Dubai’s Network International acquired Kenya -based payment mobile payment processing company DPO for $288 million. Shortly after the acquisition, DPO’s CEO Eran Feinstein said the company would pursue more African acquisitions on its own. In June, another mobile-money payment processor, MFS Africa, acquired digital finance company Beyonic. And in August, South Africa’s Standard Bank—Africa’s largest by assets and lending—acquired a stake in fintech security firm TradeSafe.

Since the rise of Safaricom’s dominant M-Pesa mobile money product in Kenya, fintech in Africa has become infinitely larger and more competitive. The sector has hundreds of startups and now receives nearly 50% of all VC investment on the continent.

The opportunity investors and founders are chasing is bringing Africa’s large unbanked population and underbanked consumers and SMEs online. Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data, and mobile-based finance platforms have presented the best use-cases to shift that across the region.

Interswitch has established itself as a leader in the Africa’s digital finance race. But it’s hard to envision how it can maintain or extend that role without an active venture arm that invests in and acquires innovative, young fintech startups.

No news on IPO

Elegbe had less to offer on Interswitch’s long-anticipated IPO. Asked if the company still planned to list publicly, he offered up a non-answer answer. “At this point in time we’re focused on growing the business and creating value for our customers and that is the our primary focus.”

When pressed “yes or no” on whether an IPO was still a possibility Elegbe confirmed it was. “We have private equity investors and at some point in the life of the business they want exits.” he said. “When it is time for them to exit there are various options on the table and an IPO is an option.”

There’s been talk of an Interswitch IPO for years. In 2016, Elegbe told TechCrunch a dual-listing on the Lagos and London Stock Exchanges was possible. Then word came through other Interswitch channels that it was delayed due to recession and currency volatility in Nigeria in 2017. In November 2019, a source with knowledge of the situation told TechCrunch on background, “an IPO is still very much in the cards; likely sometime in the first half of 2020.” Then came the Covid-19 crisis and the accompanying global economic slump, which may have delayed Interswitch’s IPO plans yet again.

If and when the company goes public, it would be a major event for Nigerian and African fintech. No VC backed fintech firm on the continent has listed globally. Exits for Interswitch’s investors would likely attract to Nigeria and broader Africa more VC from major funds—many of whom remain on the fence about startup opportunities on the continent.

Focus on Africa

On global product expansion, Interswitch plans to maintain an African focus for now, Elegbe explained. “There are enough opportunities for Interswitch on the continent. We’d like to be in as many African countries as possible…and position Interswitch as the (financial) gateway to the continent,” he said.

Elegbe explained the company would continue to work through alliances with major financial services firms to open up global financial access for its African client base. In August 2019, Interswitch launched a partnership that allows its Verve cardholders to make payments on Discover’s global network.

CEO Mitchell Elegbe concluded his Disrupt session with some perspective on balancing the stigmas and possibilities of doing business in Nigeria. Over recent years the country has shifted to become an unofficial hub for big tech expansion, VC investment, and startup formation in Africa. But Nigeria continues to have a difficult operating environment with regard to infrastructure and is often associated with political corruption and instability in its Northeast region due to the Boko Haram insurgency.

“Nigeria has a very large population and a very large market. We have lots of challenges that need to be solved, but it makes sense to me that lots of money is finding its way to Nigeria because the opportunity is there,” he said.

Elegbe’s advice to tech investors considering the country, “Don’t take a short-termist view. There are good people on the ground doing fantastic work—honest people who want to make impact. You need to  seek those people out.”

#africa, #african-tech, #ceo, #corporate-finance, #dubai, #economy, #finance, #financial-technology, #interswitch, #kenya, #lagos, #m-pesa, #mitchell-elegbe, #money, #nigeria, #safaricom, #south-africa, #tc, #tech-in-africa, #venture-capital, #visa, #world-bank

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Lightspeed announces the launch of its Southeast Asia operations

A group photo of Lightspeed Venture Capital's Southeast Asia team

Lightspeed’s Southeast Asia team: Akshay Bhushan, Marsha Sugana, Pinn Lawjindakul and Bejul Somaia

Lightspeed Venture Partners announced the launch of its Southeast Asia operations today. Based out of the firm’s new regional headquarters in Singapore, Lightspeed’s team there will invest in startups throughout Southeast Asia from the three global funds it closed earlier this year, which total about $4 billion.

The Southeast Asia team consists of partner Akshay Bhushan, who was a founding member of Flipkart’s corporate development team before joining Lightspeed five years ago; partner Bejul Somaia, who helped set up Lightspeed India; vice president Pinn Lawjindakul, a veteran of Grab and Tiger Global Management; and senior investment associate Marsha Sugana, who previously worked at L Catterton and Goldman Sachs.

Bhushan told TechCrunch that Lightspeed opened its Singapore office in January to serve as a base for its team as they met with entrepreneurs throughout the region. Obviously, the onset of COVID-19 curtailed travel, but they continued talking to startups through video calls and emails.

Lightspeed focuses on early-stage investments and has already invested in some of the most prolific startups in Southeast Asia, including Grab. Its other portfolio companies in the region are Indonesian startups Chilibeli, a social commerce platform, B2B wholesale marketplace Ula and e-commerce logistics platform Shipper, as well as Singaporean software developer NextBillion.AI.

Some of Lightspeed’s investments in other countries have also taken a keen interest in Southeast Asia as a key market for global expansion, including Indian startups OYO Rooms, Darwinbox and Yellow Messenger.

Having regional operations will allow Lightspeed to work more closely with its portfolio companies and make deeper connections with entrepreneurs, Bhushan said.

He added that the pandemic has prompted the rapid adoption of technologies, including platforms that help small businesses digitize their operations or sell online, supply chain solutions and remote working or online education-related services.

In sectors like fintech or logistics, there is also a lot of opportunity in several Southeast Asian countries to build transformative platforms and services. For example, Bhushan said, Shipper is focused on solving some of the biggest supply chain and logistics challenges facing e-commerce sellers in Indonesia, while Grab has made digital payments and other financial services like insurance easier to access.

“The big opportunity in most emerging markets, and this applies to most of the markets in Southeast Asia, is that we generally find that a lot of the fundamental infrastructure is broken, and founders can leverage technology to fill those gaps,” he said. “What excites us are founders who are solving those infrastructural problems, and a lot of our investments are to that effect.”

#asia, #lightspeed, #lightspeed-venture-partners, #singapore, #southeast-asia, #tc, #venture-capital

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Making sense of 3 edtech extension rounds

While venture capitalists are pouring funding into edtech startups, the surge of interest isn’t coming without pressure.

Edtech companies are searching for new ways to tap into a booming market. As Course Hero co-founder Andrew Graeur put it, the goal for his Q&A platform went from reaching a million subscribers to “many millions” as a result of the COVID-19 pandemic.

One way edtech companies are approaching these unprecedented times is by raising extension rounds that are earmarked specifically to bring on strategic partners from around the world. The approach of trading equity for a chance at globalization is neither rare nor cheap, but comes with new weight given the sector’s boom.

Today, ApplyBoard closed a $55 million extension round for its Series C, which now totals $130 million. ApplyBoard helps international students search and apply to universities and colleges across the world. It wants users to think of it as a Common App for international students, serving as a college undergrad application.

A spokesperson for the startup — which became a unicorn valued at over $1.4 billion in May — says the round did not change its valuation. Instead, the financing was “less about funding, and more about the partners that we were able to bring on board as a result.”

#andrew-grauer, #applyboard, #asia, #course-hero, #covid-19, #duolingo, #edtech, #education, #ggv, #jenny-lee, #labster, #tc, #venture-capital

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Join Accel’s Andrew Braccia and Sonali De Rycker for a live Q&A on September 22 at 2 pm EDT/11 am PDT

In the midst of Disrupt 2020, we’re busy keeping tabs on all the panels, chats, demos and battling startups, but we’re also prepping for what comes next. Next Tuesday, the Extra Crunch Live series of Q&As with founders and investors resumes, this time with guests Andrew Braccia and Sonali De Rycker from Accel.

If you are just catching up to Extra Crunch Live, we’ve been hosting live discussions since the early COVID-19 days here in the United States with folks like Mark Cuban, Plaid founder Zach Perret and Sequoia’s Roelof Botha taking part.

The Accel chat is going to be interesting for a few reasons, one of which is that Braccia is the opposite of loud — TechCrunch has noted his general reticence to public comment in prior reporting. But Braccia was early money into Slack, which means he’ll have good perspective into the direct listing market, the IPO market writ large, SaaS and the remote-work boom. We’ll make sure to get the latest.

De Rycker is a bit more active in the public sphere and has lead deals into companies like Sennder (which recently did a deal with Uber), Shift Technology and Avito, which sold to Naspers for north of $1 billion last year. As you can tell from that string of deals, De Rycker will be able to give us a working dig into what’s up in the European startup scene.

And as De Rycker worked as an investment banker before VC, we’ll see what she has to say regarding today’s M&A and IPO climes.

All in all, it’s going to be a good time that I am looking forward to hosting. Login details follow for Extra Crunch folks, and you can snag a cheap trial here if you need access.

Until then, enjoy Disrupt and we’ll see you on Tuesday. Don’t forget to bring your best questions, and we might get to one of them!

Details

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Snowflake More Than Doubles in Debut as Wall Street Embraces Tech IPOs

The data storage company is among several prominent start-ups going public this year as the tech industry thrives in the pandemic.

#company-reports, #data-storage, #initial-public-offerings, #snowflake, #software, #start-ups, #stocks-and-bonds, #venture-capital

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Atlassian launches a $50M venture fund to invest in its ecosystem

Atlassian today announced the launch of Atlassian Ventures, a new $50 million fund that will invest into startups — and even more established companies — that are building products in the overall Atlassian ecosystem.

“As more and more customers transition to our cloud products, we are committed to supporting their journey by fostering a robust ecosystem of cloud-based apps that enhance their experience and satisfy all use cases,” Chris Hecht, Atlassian’s Head of Corportate Development, writes in today’s announcement. “We are incredibly proud of the 4,200+ apps already available in our Marketplace and the integrations we already offer with popular tools like Slack, Zendesk, and GitHub . But this is no time to rest on our laurels. Atlassian Ventures will facilitate our continued investment in the best-of-breed tools and integrations our customers need to fuel the next wave of innovation and manage their work, both now and into the future.”

The fund is taking a three-pronged approach. It will invest in early-stage startups that build products for the company’s cloud products. These include Jira, Confluence, Bitbucket and Trello .

But it will also invest in established companies that are working to scale their businesses. Given the size of the fund, it’s maybe no surprise that the firm will partner with other VCs to make these investments. Hecht cites Atlassian’s existing investments in Zoom, Slack, InVision, process.st and Split.io as examples for this.

In addition to these two groups, the fund will also invest into members of the Atlassian Partner Program that are “looking to augment their cloud services and/or create new products that support the future of work.”

In this context, it’s worth noting that Atlassian has recently acquired a few companies in its ecosystem, too, including Code Barrel (the company behind Automation for Jira), Mindville and Halp.

#atlassian, #atlassian-ventures, #bitbucket, #cloud-services, #github, #jira, #mindville, #software, #tc, #trello, #venture-capital

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#DealMonitor – sennder übernimmt Uber Freight – HTGF investiert in Betterfront


Im aktuellen #DealMonitor für den 16. September 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

Headstart Studios
+++ Der Hamburger Investor Caldec Holding investiert eine einstellige Millionensumme in Headstart Studios, früher als Avado Learning bekannt. Das Unternehmen aus Hamburg ist unter anderem Partner von Google und verantwortet Squared Online, ein Weiterbildungsprogramm für Online-Marketing-Experten. Die deutsche Gesellschaft des Bildungsdienstleisters Avado Learning wurde im vergangenen Jahr im Rahmen eines MBO von Marc Johannsen übernommen. Seit April 2020 agiert das junge Unternehmen unter der Marke Headstart Studios.

Betterfront
+++ Der High-Tech Gründerfonds (HTGF) und mehrere Business Angels investieren in Betterfront. Das Münchner Fintech bietet Private-Equity-Fondsmanager eine datengesteuerte Fundraisingplattform, die durch Analysen Investitionsentscheidungen unterstützen soll. Zudem sollen Fondsmanager mit dem Fintech “institutionelle Anleger gewinnen, binden und halten können”. Betterfront wurde 2019 von Michel Geolier, Worathti Manosroi und Sergi Case gegründet.

Easy2Parts
+++ Bayern Kapital, mehrere niederbayerische Business Angels und ein Family Office aus Nürnberg investieren in Easy2Parts. Das Team von Easy2Parts tritt an, um die “Beschaffung von Fertigungsbauteilen und Baugruppen zu erleichtern”. Die Plattform aus Deggendorf vernetzt “einkaufende Unternehmen mit ihren Lieferanten und ermöglicht, automatisiert neue Lieferanten zu finden”. Das frische Kapital wollen die Gründer “vor allem für den Aufbau des Vertriebs und die Weiterentwicklung ihrer Plattform verwenden”.

EXITS

Uber Freight
+++ Das Berliner Logistik-Startup sennder, das 2015 von Julius Köhler, Nicolaus Schefenacker und David Nothacker gegründet wurde, übernimmt im einer Aktientransaktion das europäische Frachtgeschäft von Uber Freight. “Die Übernahme unterstreicht sennders kontinuierliche und erfolgreiche Konsolidierung des Lkw-Marktes und bedeutet die weitere geografische Expansion in die Niederlande mit lokaler Präsenz in Amsterdam”, teilt die Jungfirma mit. Uber Freight erhält im Zuge der Transaktion eine Minderheitsbeteiligung an sennder. Im Juni fusionierte sennder bereits mit dem französischen Wettbewerber Everoad.

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): Shutterstock

#aktuell, #bayern-kapital, #betterfront, #caldec-holding, #deggendorf, #easy2parts, #fintech, #hamburg, #headstart-studios, #high-tech-grunderfonds, #logistik, #munchen, #sennder, #uber-freight, #venture-capital

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Facebook addresses political controversy in India, monetization opportunities, startup investments

At the beginning of the previous decade, Facebook had a tiny presence in India. It had just started to slowly expand its team in the country and was inking deals with telecom operators to make access to its service free to users and even offer incentives such as free voice credit.

India’s internet population, now the second largest with more than 500 million connected users, itself was very small. In early 2011, the country had fewer than 100 million internet users.

But Facebook ended up playing a crucial role in the last decade. So much so that by the end of it, the social juggernaut was reaching nearly every internet user in the country. WhatsApp alone reaches more than 400 million internet users in India, more than any other app in the country, according to mobile insight firm App Annie.

This reach of Facebook in India didn’t go unnoticed. Politicians in the country today heavily rely on Facebook services, including WhatsApp, to get their message out. But it has also complicated things.

Rumors have spread on WhatsApp that cost lives, and politicians from both the large political parties in India in recent weeks have accused the company of showing favoritism to the other side.

To address these issues, and the role Facebook wishes to play in India, Ajit Mohan, the head of the company’s business in the country, joined us at Disrupt 2020. Following are some of the highlights.

On controversy

A recent report in WSJ claimed that Ankhi Das, one of Facebook’s top executives in India, decided against taking down a post from a politician from the ruling party. She did so, the report claimed, because she feared it could hurt the company’s business prospects in India.

In Mohan’s first interview since the controversy broke, he refuted the claims that any executive in the country holds power to influence how Facebook enforces its content policy.

“We believe that it’s important for us to be open and neutral and non-partisan,” he said. “We have deep belief and conviction that our enabling role is as a neutral party that allows speech of all kinds, that allows expression of all kinds, including political expression, and a lot of the guidelines that we have developed are to make sure that we really enable our diversity of expression and opinion so long as we’re able to make sure that the safety and security of people are protected.”

Mohan said the internal processes and systems inside Facebook are designed to ensure that any opinion and preference of an employee or a group of employees is “quite separate from the company and the company’s objective enforcement of its own policies.”

He said individuals can offer input on decisions, but nobody — including Ankhi Das — can unilaterally influence the decision Facebook takes on content enforcement.

“We do allow free expression inside the company as well. We don’t have any constraints on people expressing their point of view, but we see that separate from the enforcement of our content policy. […] The content policy itself, in the context of India, is a team that stands separate from the public policy team that is led by Ankhi,” he added.

This photo illustration shows an Indian newspaper vendor reading a newspaper with a full back page advertisement from WhatsApp intended to counter fake information, in New Delhi on July 10, 2018. (Photo by Prakash SINGH / AFP)

On India and monetization

Even as Facebook has amassed hundreds of millions of users in India, the world’s second largest market contributes little to its bottom line. So why does Facebook care so much about the country?

“India is in the middle of a very exciting economic and social transformation where digital has a massive role to play. In just the last four years, more than 500 million users have come online. The pace of this transformation probably has no parallel in either human history or even in the digital transformation happening in countries around the world,” he said.

“For a company like ours, if you look at the family of apps across WhatsApp and Instagram, we believe we have a useful role to play in fueling this transformation,” he said.

Even as Facebook does not generate a lot of revenue from India, Mohan said the company has established itself as one of the most trusted platforms for marketers. “They look to us as a material partner in their marketing agenda,” he said.

He said the company is hopeful that advertising as a GDP will go up in India. “Therefore ad-revenue will become substantial over time,” he said.

For Facebook, India is also crucial because it allows the company to build some unique products that solve issues for India but could be replicated in other markets. The company is currently testing an integration of WhatsApp, which currently does not have a business model despite having over 2 billion users, with new Indian e-commerce JioMart, to allow users to easily track their orders.

“We think there is opportunity to build India-first models, experiment at scale, and in a world where we succeed, we see huge opportunity in taking some of these models global,” he said.

Facebook as a VC

Facebook does not usually invest in startups. But in India, the company has invested in social-commerce firm Meesho, online learning platform Unacademy — it even participated in its follow-up round — and it wrote a $5.7 billion check to Jio Platforms earlier this year. So why is Facebook taking this investment route in India?

“We wanted to create a program for taking minority investments in early-stage startups to figure out how we could be helpful to startup founders and the ecosystem as a whole. The starting point was backing teams that were building models that in some ways were unique to India and could go global. Since we made an investment in Meesho, they have made a strong thrust in Indonesia. These are the kind of companies where we feel we can add value as well as we can learn from these startups,” he said.

The partnership with Jio Platforms follows a different rationale. “The transformation we talked about in India in the last few years, Jio triggered it,” he said. Other than that, Facebook is exploring ways to work with Jio, such as with its partnership with Jio’s venture JioMart. “It can really fuel the small and medium business that is good for the Indian economy,” he said.

Mohan said the company continues to explore more opportunities in Indian startups, especially with those where the teams think Facebook can add value, but he said there is no mandate of any kind that Facebook has to invest in, say dozens of startups in three to four years. “It’s not a volume play,” he said.

But would these firms, including Reliance Industries, which operates Jio Platforms and Reliance Retail, will receive any special access on Facebook’s services. What if Amazon, BigBasket, Grofers, or Flipkart want to integrate with WhatsApp, too? Mohan said Facebook platform is open for every firm and everyone will receive the same level of access and opportunities.

In the interview, Mohan, who ran the Disney-run Hotstar on-demand streaming service in India, also talked about the growing usage of video in India, the state of WhatsApp Pay’s rollout in the country, what Facebook thinks of India’s ban on Chinese apps, and much more. You can watch the full interview below.

#ajit-mohan, #apps, #asia, #disrupt, #disrupt-2020, #facebook, #facebook-india, #hotstar, #meesho, #social, #techcrunch-disrupt, #unacademy, #venture-capital, #whatsapp, #whatsapp-pay

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Zwift, maker of a popular indoor training app, just landed a whopping $450 million in funding led by KKR

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.”

#3d, #causeway-media, #cycling, #gaming, #hardware, #health, #highland-europe, #kkr, #mobile, #online-fitness, #permira, #recent-funding, #startups, #tc, #venture-capital, #zone-5-ventures, #zwift

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Crista Galli Ventures outs ‘evergreen’ fund to back European health tech startups at seed and Series A

Crista Galli Ventures, an early-stage health tech fund in Europe, is officially launching today. The firm offers “patient capital” — with only a single LP (the Danish family office IPQ Capital) — and promises to provide portfolio companies with deep healthcare expertise and the extra runway needed to get over regulatory and efficacy hurdles and to the next stage.

Companies already backed by Crista Galli Ventures (CGV) include Skin Analytics, which is using AI to improve diagnosis of skin cancer; Quibim, which is applying AI to the field of radiomics; and Ampersand Health, which is developing digital therapies for patients with inflammatory conditions such as Crohn’s disease, to name just three out of 15.

Led by consultant radiologist Dr. Fiona Pathiraja, and with offices in London and Copenhagen, CGV operates as an “evergreen” fund, meaning it doesn’t follow traditional five-year VC fundraising cycles. Initially, the VC firm has $65 million in deployable — so called — patient capital.

“We like to invest across the broad areas of deep tech, digital health and personalised healthcare,” Pathiraja tells TechCrunch. “We prefer technology solutions that make the lives of patients easier and better and, in some cases, that help support people’s health before they become patients. Part of our remit is also for tech solutions within the healthcare industry that improve efficiency and productivity of providers.”

Alongside the main fund, CGV is also unveiling Crista Galli LABS, which, in part, aims for greater diversity in health tech by backing founders from underrepresented backgrounds at the pre-seed stage. In addition to pre-seed investment, startups accepted into the program have access to mentoring and coaching from the CGV team.

“When I was in hospital, there were people from all backgrounds there and this was the norm… [but] this really wasn’t my experience when I started investing,” explains Pathiraja. “I am struck by how homogeneous both founder teams and investment teams can be. Whilst our core investment focus is seed and Series A, Crista Galli LABS invests smaller ticket sizes in outstanding pre-seed founders and ensures that at least 50% of these are from under-represented backgrounds. This means those who are female, BAME, LGBT to start with.”

#crista-galli-ventures, #tc, #venture-capital

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The Chainsmokers just closed their debut venture fund, Mantis, with $35 million

Alex Pall and Drew Taggart are best known as The Chainsmokers, an electronic DJ and production duo whose first three albums have given rise to numerous Billboard chart-topping songs, four Grammy nominations, and one Grammy award, for the song “Don’t Let Me Down.”

Soon, they hope they’ll be known as savvy venture investors, too.

They already have some major-league believers, including investors Mark Cuban, Keith Rabois, Jim Coulter and Ron Conway, who are among the other individuals who provided the Chainsmokers’s new early-stage venture firm, Mantis, with $35 million in capital commitments for its debut fund.

It’s a surprisingly traditional vehicle in many ways. For starters, Mantis is being managed day-to-day by two general partners who respectively offer venture and operational experience: Milan Koch graduated in 2012 from UCLA and has been an investor ever since, including as a venture partner with the seed-stage fund Base Ventures; Jeffrey Evans is a record label founder who has long known the Chainsmokers’s business manager, Josh Klein.

With fundraising begun earlier this year, the firm has already made a handful of investments, too, including the fitness app Fiton (Pall says they “squeezed into the A round after its close”), and Loansnap, a mortgage-lending startup that was founded by serial entrepreneur Karl Jacob.

Pall and Taggart take their health seriously, so the fitness app is easy to understand. As for why the world’s highest-paid DJs would be interested in such a seemingly staid business as mortgage lending, Taggart says the firm’s mission is ultimately to find and fund a wide range of startups that could potentially benefit its young audience, and that he and Pall are happy to use their star power to help related founders when a particular technology catches their eye.

In the case of Loansnap, he says that he and Pall were impressed by Loansnap’s promise to process loans more efficiently than other lenders. By getting involved in the company, all sides also recognized a “massive press opportunity for Loansnap at a time when COVID was hitting and there was going to be billions of dollars in refinancing going on that [the company] wanted to participate in,” he says.

Indeed, despite investing a relatively small in what was ultimately a $10 million round for Loansnap in May, Mantis was credited in numerous reports as being the deal lead.)

Taggart and Pall say they also take inspiration from singer Jimmy Buffett, who has co-created numerous businesses to both benefit, and capitalize off, his own fan base. Though Buffett started with Margaritaville — a hospitality company with a casual dining American restaurant chain, a chain of stores selling Jimmy Buffett-themed merchandise, and casinos with lodging facilities — he has more recently begun building retirement communities in Florida for aging Buffett acolytes, and Pall and Taggart says the strategy resonates,

“When we started eight years ago, our fans were primarily all in college,” says Taggart. “Now they are dealing with paying back their college loans, and they’re probably applying to buy their first house, so a company like Loansnap feels like one of those startups whose services our fans have grown into needing.”

Pall and Taggart aren’t entirely brand new investing. Pall says they’ve been making seed-stage bets as angel investors for several years, including in Ember, an eight-year-old, L.A.-based company that makes temperature-controlled mugs and travel mugs and has raised roughly $25 million altogether, shows Crunchbase.

“I’d like to say that we were like thinking In this incredible way about the business at the time, but we were just like, ‘This is a really great product and we love the founder,” Pall says.

In fact, the two got into a number of “diverse deals,” he continues, but “all of it was inbound” until two years ago, when they “decided to kind of change our strategy and go seek out the opportunities that we thought were out there…  We thought that maybe if we institutionalize this process, [we’ll discover] a lot more opportunity out there for us to work with dynamic founders and interesting founders who are going to change the landscape of tomorrow.”

Soon after, Pall and Taggart were introduced to Koch; Koch meanwhile knew Evans through a mutual friend in the music industry. Things began coming together from there.

Pall and Taggart — who say that all four members of the team have to want to do a deal for it to move forward — are certainly entrepreneurial themselves. Aside for performing roughly 100 shows last year before beginning work this year on a fourth album, the two also run a production studio. They are stakeholders in a small batch spirit brand called JaJa Tequila.

Last year, they also co-founded YellowHeart, a ticketing platform that aims to put more power in the hands of performers, rather than scalpers.

Mantis was originally targeting $50 million in capital commitments, as reported by Bloomberg. Asked if that target proved too ambitious, Koch says the original idea was to raise $30 million, and that though the fund’s limited partner agreement stated that it could raise up to $50 million, the team “just decided that for a first time fund, in order for us to produce a great IRR, we’d just rather stick to the target.”

Pictured above, left to right: Jeffrey Evans, Alex Pall, Drew Taggart, Milan Koch.

#disrupt-2020, #ecommerce, #ember-technologies, #finance, #loansnap, #mantis, #seed-funding, #startups, #tc, #venture-capital

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Kleiner prints gold with Desktop Metal, netting a roughly 10x return

Desktop Metal is one of the most interesting startups to come out of Boston in some time, with a technology designed to “print metal.” That’s a potentially huge expansion for the 3D printing market, where flexible polymers are the norm, a material that limits the kinds of products that these machines can produce. Little surprise then that the company caught the eye of a SPAC a few weeks ago and if all goes well, will begin publicly trading later this year.

This morning, the SPAC (called Trine) and startup have filed their latest financial and shareholders report with the SEC, giving us some sense of who the big VC winners are here.

First, let’s take a look at Desktop Metal’s preferred share price since its Series A back in 2015. The company has seen its price soar over the past five years, from $0.53 for its Series A to just slightly more than $10 for its Series E shares it sold last year.

According to its filing, Desktop Metal’s largest VC investors are NEA with 17.66% ownership, Lux with 11.59%, Kleiner with 11.10%, GV (formerly Google Ventures) at 8.89%, Northern Trust with 6.96% and KDT, a Koch Industries subsidiary, with 5.89%.

Desktop Metal is valued at $1.83 billion of the total $2.5 billion SPAC price. The difference in those two figures comes from the $305 million of capital held by the SPAC and $275 million in a private investment into the company that will be conducted as part of the acquisition, along with fees and some other ancillary financials.

What does that look like from a returns perspective? Desktop Metal raised six rounds of capital (Series A through Series E & E-1), raising a total of $438 million according to the company’s filings. Using the numbers from these filings, we can do some back-of-the-envelope math to make some rough guesses at how the individual funds returned on their investment.

The biggest overall winner in terms of multiples on investment is Kleiner Perkins, which sits at a roughly 10x return on its full investment into the company. Kleiner took a fifth of the Series A, putting in roughly $3 million. It then proceeded to double down in the Series B, where it invested approximately $13 million, before tapering off its pro rata in later rounds. Given that its $20.4 million in invested capital is skewed toward the earliest rounds, that drove up its return multiple.

NEA, perhaps owing to its larger fund scale, constantly invested in the company across all of its rounds, ultimately investing about $57 million. It invested in Desktop Metal through its seed program, and also did about 43% of the Series A. It continued to invest heavily across all the company’s growth rounds as well. Ultimately, NEA had a computed multiple on investment of roughly 5.67x.

Finally among early-stage investors, Lux managed to secure a 5.31x return, and it similarly plowed money into the company across all of its rounds, albeit slightly less aggressively than NEA, ultimately investing about $40 million into Desktop Metal.

Heading over to the growth investors, GV started investing in the Series C round and invested a total of about $65 million across the later stage, securing a return of 2.5x. Northern Trust came in on the Series D and netted 1.6x, and KDT of Koch Industries ended up with about 1.44x through its mezzanine capital infusion.

This includes all investors with more than 5% ownership in the company, per SEC regulations. Approximately $100 million of the company’s $438 million in fundraising is not disclosed on its cap table, so there might be other VCs with swell returns that weren’t obligated to disclose their shares. In addition, I am not including some minor common share stakes held by these venture firms, which are small enough to not radically change their return profile.

Desktop Metal’s quick appreciation in value over just five years will also give these firms very strong IRRs for their investments.

Given that Desktop Metal is heading to the public markets through a SPAC, all of these investors have an option to sell their stakes or hold on to them going forward. If they hold and Desktop Metal performs well, their stakes could increase dramatically in value, driving much higher returns. The reverse is naturally also true. Once public, the firms have flexibility on if and when to exit, and that decision will ultimately determine their final realized returns to LPs.

For now though, this is a great checkpoint to see just how successful some of these venture firms were on this deal. Maybe firms can print gold with those 3D printers after all.

#desktop-metal, #finance, #fundings-exits, #google-ventures, #kleiner-perkins, #lux-capital, #nea, #tc, #venture-capital

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#DealMonitor – Roboyo sammelt 21 Millionen ein – Oyster Bay investiert in True Gum


Im aktuellen #DealMonitor für den 15. September 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

Roboyo
+++ Der Kapitalgeber MML Capital Partners (MML) investiert 21 Millionen Euro in Roboyo, ein Startup für Robotic Process Automation. Das Nürnberger Unternehmen, das 2016 von Christian Voigt, Nicolas Hess und Sven Manutiu gegründet wurde, sieht sich als “Deutschlands Marktführer für RPA-gestützte Automatisierung”. 120 Kunden aus unterschiedlichen Branchen – von Versicherungen und Banken bis zu Pharmaunternehmen setzen auf Roboyo. 120 Mitarbeiter wirken bereits für die Jungfirma.

True Gum
+++ Der Food-Investor Oyster Bay investiert 1 Million Euro in das dänische Kaugummi-Startup True Gum. “Mit dem Zugang zu neuem Kapital kann True Gum in seine Produktentwicklung, das Marketing und den Vertrieb in seinen größten Märkten investieren”, teilt das Unternehmen mit. True Gum, seit April 2018 auf dem Markt, ist inzwischen in 10.000
europäischen Einzelhandelsgeschäften in 14 europäischen Ländern erhältlich.

INVESTMENTS

e7Studio
+++ Das Münchner Startup Timify übernimmt das bulgarische Digitalunternehmen e7Studio. “Die seit sieben Jahren bestehende Agentur betreut Kunden aus dem gesamten europäischen Raum. Mit TIMIFY arbeiten die Bulgaren schon seit einigen Jahren zusammen”, teilt das Unternehmen mit. Timify, das von Andreas Knürr geführt wird, positioniert sich als “Online-Lösung für Terminplanung und Arbeits-Ressourcenverwaltung für kleine, mittlere und große Unternehmen”. An den Start ging das Unternehmen 2012.

DIE HÖHLE DER LÖWEN

richtiggutbewerben.de
+++ In der dritten Folge der achten Staffel investierte Sales-Löwe Carsten Maschmeyer 100.000 Euro in richtiggutbewerben.de (15 %). Die Plattform für die Vermittlung von Bewerbungsghostwritern wurde 2014 von den Brüdern Adil und Bilal Zafar gegründet. Die richtiggutbewerben.de-Macher traten an, um 100.000 Euro einzusammeln und wollten 10 % der Firmenanteile abgeben. Bisher wurde der Deal noch nicht umgesetzt.

Gomago
+++ In der dritten Folge der achten Staffel investierte Regal-Löwe Ralf Dümmel 80.000 Euro in Gomago (20 %), eine Art Duftspender für Haus und Auto, der Marder durch ein künstliches Pheromon fernhält, ohne dem Tier zu schaden. Das Unternehmen wurde von Klaus Skottki, Kfz-Meister im Ruhestand, ins Leben gerufen.

GreenMNKY
+++ In der dritten Folge der achten Staffel investierten Sales-Löwe Carsten Maschmeyer und Pharma-Löwe Nils Glagau 400.000 Euro in GreenMNKY (24 %). Das Unternehmen, das von Ziya Orhan und Oliver Klingenbrunn gegründet wurde, bietet Schutzfolien für Handys und elektrische Kleingeräte an. GreenMNKY kann in wenigen Sekunden und dank der in der App hinterlegten Datencloud für jedes beliebige Modell die passende Handy-Schutzfolie ausschneiden. Die Gründer kamen in die Vox-Show, um 400.000 Euro für 15 % einzusammeln.

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, #die-hohle-der-lowen, #e7studio, #gomago, #greenmnky, #mml-capital-partners, #nurnberg, #oyster-bay, #richtiggutbewerben-de, #roboyo, #timify, #true-gum, #venture-capital

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Facebook investor Jim Breyer picks Austin as Breyer Capital’s second home

For Jim Breyer, the mantra, “Silicon Valley is a state of mind” has always been behind Breyer Capital, his personal investment fund.

While many of his investments and board seats (which have included Facebook, Blackstone, 21st Century Fox, Dell, Etsy, Marvel Entertainment and Walmart) backed that thesis, Breyer had never established an office for his personal fund outside of the Valley. Until now. 

Earlier this year, in the middle of a pandemic, he set up a second home for his personal fund in Austin, Texas. The move is a sign of Austin’s growing clout as a technology hub and another indication that Silicon Valley, New York and Boston may have more competition from a growing collection of cities for tech talent and national attention.

Breyer has always had an eye on markets outside the Valley, but typically those endeavors meant international expansion through IDG Breyer (a vehicle for investment into China) or planned forays to deploy capital in the Middle East or other international tech hotspots.  

“The new Austin effort comes after several years of thinking through where would be the most interesting place to expand Breyer Capital outside of Silicon Valley,” he said in an interview.

Breyer has several investments in Los Angeles, New York and other cities beyond the Bay Area, but a close relationship with Michael Dell and a seat on the Dell board left him with a hankering for more than just barbecue and personal computers.

#austin, #breyer-capital, #jim-breyer, #startups, #tc, #texas, #venture-capital

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ByteDance’s Need for a TikTok-Oracle Deal: China is Slowing

ByteDance’s founder has long urged his employees to think beyond the world’s No. 2 economy, where growth is easing and competition is rising.

#artificial-intelligence, #beijing-china, #china, #computers-and-the-internet, #mobile-applications, #social-media, #tiktok-bytedance, #toutiao-chinese-news-platform, #united-states-international-relations, #venture-capital, #video-recordings-downloads-and-streaming, #zhang-yiming-1983

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DCM has already made nearly $1 billion off its $26 million bet on Bill.com

David Chao, the cofounder of the cross-border venture firm DCM, speaks English, Japanese, and Mandarin. But he also knows how to talk to founders.

It’s worth a lot. Consider that DCM should see more than $1 billion from the $26.4 million it invested across 14 years in the cloud-based business-to-business payments company Bill.com, starting with its A round. Indeed, by the time Bill.com went public last December, when its shares priced at $22 apiece, DCM’s stake — which was 16% sailing into the IPO — was worth a not-so-small fortune.

Since then Wall Street’s lust for both digital payments and subscription-based revenue models has driven Bill.com’s shares to roughly $90 each. Little wonder that in recent weeks, DCM has sold roughly 70 percent of its stake for nearly $900 million. (It still owns 30 percent of its position.)

We talked with Chao earlier today about Bill.com, on whose board he sits and whose founder, René Lacerte, is someone Chao backed previously. We also talked about another very lucrative stake DCM holds right now, about DCM’s newest fund, and about how Chao navigates between the U.S. and China as relations between the two countries worsen. Our conversation has been edited lightly for length and clarity.

TC: I’m seeing you owned about 33% of Bill.com after the first round. How did that initial check come to pass? Had you invested before in Lacerte?

DC: That’s right. Renee started [an online payroll] company called PayCycle and we’d backed him and it sold to Intuit [in 2009] and Renee made good money and we made money. And when he wanted to start this next thing, he said, ‘Look, I want to do something that’s a bigger outcome. I don’t want to sell the company along the way. I just want this time to do a big public company.’

TC: Why did he sell PayCycle if that was his ambition?

DC: It was largely because when you’re a first-time CEO and entrepreneur and a large company offers you the chance to make millions and millions of dollars, you’re a bit more tempted to sell the company. And it was a good price. For where the company was, it was a decent price.

Bill.com was a little bit different. We had good offers before going public. We even had an offer right before we went public.  But Renee said, ‘No, this time, I want to go all the way.’ And he fulfilled that promise he’d made to himself. It’s a 14-year success story.

TC: You’ve sold most of your stake in recent weeks for $900 million; how does that outcome compare with other recent exits for DCM? 

DC: We actually have another recent one that’s phenomenal. We invested in a company called Kuaishou in China. It’s the largest competitor to Bytedance’s TikTok in China. We’ve invested $49.3 million altogether and now that stake is worth $3.8 billion. The company is still private held, but we actually cashed out around 15% of our holdings. and with just that sale alone we’ve already [seen 10 times] that $30 million.

TC: How do you think about selling off your holdings, particularly once a company has gone public?

DC: It’s really case by case. In general, once a company goes public, we probably spend somewhere between 18 months to three years [unwinding our position]. We had two big IPOs in Japan last year. One company [had] a $1 billion market cap; the other was a $2 billion company. There are some [cases] that are 12 months and there are some [where we own some shares] for four or five years.

TC: What types of businesses are these newly public companies in Japan?

DC: They’re both B2B. One is pretty much the Bill.com of Japan. The other makes contact management software

TC: Isn’t DCM also an investor in Blued, the LGBTQ dating app that went public in the U.S. in July?

DC: Yes, our stake wasn’t  very big,  but we were probably the first major VC to jump in because it was controversial.

TC: I also saw that you closed a new $880 million early stage fund this summer.

DC: Yes, that’s right. It was largely driven by the fact that many of our funds have done well. We’re now on fund nine, but our fund seven is on paper today 9x, and even the fund that Bill.com is in, fund four, is now more than 3x. So is fund five. So we’re in a good spot.

TC: As a cross-border fund, what does the growing tension between the U.S and China mean for your team and how it operates?

DC: It’s not a huge impact. If we were currently investing in semiconductor companies, for example, I think it would be a pretty rough period, because [the U.S.] restricts all the money coming from any foreign sources. At least, you’d be under strong scrutiny. And if we invested in a semiconductor company in China, you might not be able to go public in the U.S.

But the kinds of deals that we do, which are largely B2B and B2C — more on the software and services side — they aren’t as impacted. I’d say 90% of our deals in China focus on the domestic market. And so it doesn’t really impact us as much.

I think some of the Western institutions putting money into the Chinese market — that might be decreasing, or at least they’re a little bit more on the sidelines, trying to figure out whether they should be continuing to invest in China. And maybe for Chinese companies, less companies will go public in the U.S., etcetera. But some of these companies can go public in Hong Kong.

TC: How you feel about U.S. administration’s policies?  Do you understand them? Are you frustrated by them?

DC: I think it requires patience, because what [is announced and] goes on the news, versus what is really implemented and how it truly affects the industry, there’s a huge gap.

#bill-com, #china, #cross-border, #david-chao, #dcm, #exit, #ipo, #kuaishou, #recent-funding, #startups, #tc, #venture-capital

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