India’s answer to WhatsApp has completely moved on from messaging.
Hike Messenger, backed by Tencent, Tiger Global and SoftBank and valued at $1.4 billion in 2016, earlier this month announced that it was shutting down Sticker Chat, its messaging app.
The startup, founded by Kavin Bharti Mittal, this month pivoted to two virtual social apps called Vibe and Rush, said Mittal, who is the son of telecom giant Airtel’s chairman Sunil Bharti Mittal.
In a series of tweets earlier this month, Kavin said that India will never have a homegrown messenger that makes inroads in the world’s second largest market unless it chooses to ban Western companies from operating in the nation. “Global network effects are too strong,” he said. WhatsApp has amassed over 450 million users in India, its biggest market by users.
Mittal described opportunities in building virtual worlds as a “much better approach for today’s world that is unconstrained by cheap, fast data and powerful smartphones.”
In recent years, Hike made bets on stickers and emojis to cater to the younger population in India. In a meeting with TechCrunch in late 2019, Mittal said that the startup was overwhelmed with the engagement stickers on its platform and was working to automate development of personalized stickers.
In a different meeting last year, Mittal showcased emojis that replicated human expressions and a virtual hangout place called HikeLand. Vibe is the rebranded version of HikeLand and the emojis Hike developed will continue to be available to users on both the newer apps, Mittal said earlier this month.
Hike, which has raised more than $260 million to date, had enough runway last year, Mittal said, who hinted that the startup may raise more capital a year later.
Hike also attempted to build its own operating system through acquisition of a startup called Creo. In 2018, Hike launched Total OS that aimed to cater to users with low-cost Android smartphones and slow internet data.
The startup later shut down the project. Mittal told TechCrunch that the arrival of Reliance Jio, which prompted Airtel and Vodafone to lower mobile data tariff on their networks, solved the data issues in the country and Total OS was no longer needed in the market.
Fresh off the announcement of more than $500 million in new capital across two new funds, Seattle-based Madrona Venture Group has announced that they’re adding Anu Sharma and Daniel Li to the team’s list of Partners.
The firm, which in recent years has paid particularly close attention to enterprise software bets, invests heavily in the early-stage Pacific Northwest startup scene.
Both Li and Sharma are stepping into the Partner role after some time at the firm. Li has been with Madrona for five years while Sharma joined the team in 2020. Prior to joining Madrona, Sharma led product management teams at Amazon Web Services, worked as a software developer at Oracle and had a stint in VC as an associate at SoftBank China & India. Li previously worked at the Boston Consulting Group.
I got the chance to catch up with Li who notes that the promotion won’t necessarily mean a big shift in his day-to-day responsibilities — “At Madrona, you’re not promoted until you’re working in the next role anyway,” he says — but that he appreciates “how much trust the firm places in junior investors.”
Asked about leveling up his venture career during a time when public and private markets seem particularly flush with cash, Li acknowledges some looming challenges.
“On one hand, it’s just been an amazing five years to join venture capital because things have just been up and to the right with lots of things that work; it’s just a super exciting time,” Li says. “On the other hand, from a macro perspective, you know that there’s more capital flowing into VC as an asset class than ever before. And just from that pure macro perspective, you know that that means returns are going to be lower in the next 10 years as valuations are higher.”
Nevertheless, Li is plenty bullish on internet companies claiming larger swaths of the global GDP and hopes to invest specifically in “low code platforms, next-gen productivity, and online communities,” Madrona notes in their announcement, while Sharma plans to continue looking at to “distributed systems, data infrastructure, machine learning, and security.”
TechCrunch recently talked to Li and his Madrona colleague Hope Cochran about some of the top trends in social gaming and how investors were approaching new opportunities across the gaming industry.
As Chinese fitness class provider Keep continues to diversify its offerings to include Peloton-like bikes, health-conscious snacks among other things, it’s bringing in new investors to fund its ambitions.
On Monday, Keep said it has recently closed a Series F financing round of $360 million led by SoftBank Vision Fund. Hillhouse Capital and Coatue Management participated in the round, as well as existing investors GGV Capital, Tencent, 5Y Capital, Jeneration Capital and Bertelsmann Asia Investments.
The latest fundraise values the six-year-old startup at about $2 billion post-money, people with knowledge told TechCrunch. Keep said it currently has no plans to go public, a company spokesperson told TechCrunch.
Keep started out in 2014 by providing at-home workout videos and signed up 100 million users within three years. As of late, it has served over 300 million users, the company claims. It has over time fostered an ecosystem of fitness influencers who give live classes to students via videos, and now runs a team of course designers, streaming coaches and operational staff dedicated to its video streaming business.
The company said its main revenue driver is membership fees from the 10 million users who receive personalized services. It’s also expanding its consumer product line. Last year, for instance, the firm introduced an internet-connected stationary bike that comes with video instructions like Peloton . It’s also rolled out apparel, treadmills and smart wristbands.
The company launched foreign versions of its Keep app in 2018 as it took aim at the overseas home fitness market. It was posting diligently on Western social networks including Instagram, Facebook and Twitter up until the spring of 2019.
According to Keep, the purpose of the latest funding is to let it continue doing what it has focused on in recent years: improving services and products for users and serving fitness professionals against a backdrop of the Chinese government’s campaign for “national fitness.”
“We believe fitness has become an indispensable part of Chinese people’s everyday life as their income rises and health awareness grows,” said Eric Chen, managing partner at SoftBank Vision Fund .
MadeiraMadeira, the Brazilian answer to Wayfair or Ikea, is now worth $1 billion after raising $190 million in late stage financing from investors led by SoftBank’s Latin American investment fund and the Brazilian public and private investment firm, Dynamo.
An online marketplace specializing in home products, MadeiraMadeira offers roughly 300,000 products so customers can build furnish, renovate and decorate their homes.
Founded in 2009 by Daniel Scandian, Marcelo Scandian and Robson Privado, the company has seen huge tailwinds come from the shift to online shopping in Brazil as a result of the global COVID-19 pandemic.
With stores closed, online shopping in Brazil surged. As Daniel Scandian noted, before the pandemic ecommerce penetration in Brazil was at roughly 7%, that number ballooned to 17% at the height of the pandemic in Brazil and has now stabilized at around 10%.
Combining third party sales with private labeled goods and its own shipping and logistics facilities has meant that MadeiraMadeira can take the best practices from several online retailers and home furnishing stores, Scandian said.
There are more than 10,000 sellers on the MadeiraMadeira platform and roughly 2.5 million stock keeping units. In recent years the company has added showrooms to its mix of retail facilities, where customers can check out merchandise, but complete their orders online.
“That’s the way we can tackle the offline market with a digital mindset,” Scandian said.
Money from the most recent financing will be used to invest in expanding its logistics capabilities with the addition of new warehouse facilities to expand on its existing ten locations. The company also intends to add same day delivery and the expansion of its private label services.
The new capital, likely the last round before a potential public offering, included previous investors like Flybridge and Monashees along with public-focused investment firms Velt, Brasil Capital and Lakewood.
Early investors like Monashees, Kaszek, Fundo Avila, Endeavour Catalyst and angel backers like Niraj Shah, the founder of Wayfair, and Build.com founder Christian Friedland were instrumental to MadeiraMadeira’s early success, Scandian said.
Based in Curitiba, MadeiraMadeira has over 1300 employees, with the majority of them focused on technology, logistics and product development.
“With this new investment, we are raising our commitment to MadeiraMadeira’s long-term value creation vision as the company consolidates its position as the leader in Latin America’s home goods market. Since our initial investment, MadeiraMadeira’s management team has delivered everything they’ve promised, and our faith in them continues to grow,” said Paulo Passoni, Managing Investment Partner to SoftBank Latin America fund.
Everyday thousands of trucks carry freight along U.S. highways, propelling the economy forward as consumer goods, electronics, cars and agriculture make their way to distribution centers, stores and eventually households. It’s inside these trucks — many of which sit half empty — where Flock Freight, a five-year-old startup out of San Diego, believes it can transform the industry.
Now, it has the funds to try and do it.
Flock Freight said Tuesday it has raised $113.5 million in a Series C round led by SoftBank Vision Fund 2. Existing investors SignalFire, GLP Capital Partners and Google Ventures also participated in the round, in addition to a new minority investment by strategic partner Volvo Group Venture Capital. Ervin Tu, managing partner at SoftBank Investment Advisers, will join Flock Freight’s board. The company, which has raised $184 million to date, has post-funding valuation of $500 million, according to a source familiar with the deal who confirmed an earlier report by Bloomberg.
A slew of startups have popped up in the past several years all aiming to use technology to transform trucking — the backbone of the U.S. economy that moves more than 70% of all U.S. freight — into a more efficient machine. Most have focused on building digital freight networks that connect truckers with shippers.
Flock Freight has focused instead on the shipments themselves. The company created a software platform that helps pool shipments into a single shared truckload to make carrying freight more efficient. Flock Freight says its software avoids the traditional hub-and-spoke system, which is dominated by trucks with less than a full load, known in the industry as LTL. Flock Freight says that by pooling shipments that are going the same direction onto one truck, freight-related carbon emissions can be reduced by 40%.
The funds will be used to hire more employees; it has 129 employees to date.
“Unlike the digital freight-matching category that uses technology to simply improve efficiency as workflow automation, Flock Freight uses technology to power a new shipping mode (shared truckload) that makes freight transportation more efficient. The impact of Flock Freight’s algorithms is that shippers no longer need to adhere to LTL constraints for freight that measures up to 44 linear feet; instead, they can classify it as ‘shared truckload,'” Oren Zaslansky, founder and CEO of Flock Freight said in a statement. “Shippers can use Flock Freight’s efficient shared truckload solution to accommodate high demand and increased urgency.”
Their pitch has been compelling enough to attract a diverse mix of venture firms and corporate investors such as Volvo and Softbank.
“Flock Freight is improving supply chain efficiency for hundreds of thousands of shippers. Our investment is intended to accelerate the company’s ability to scale its business and capture a greater share of the market,” said Tu, Managing Partner at SoftBank Investment Advisers.
Ride-hailing firms such as Ola and Uber can only draw a fee of up to 20% on ride fares in India, New Delhi said in guidelines on Friday, a new setback for the SoftBank-backed firms already struggling to improve their finances in the key overseas market.
The guidelines, which for the first time bring modern-age app-based ride-hailing firms under a regulatory framework in the country, also put a cap on the so-called surge pricing, the fare Uber and Ola charge during hours when their services see peak demands.
According to the guidelines, Ola and Uber — and any other app-operated, ride-hailing firm — can charge a maximum of 1.5 times of the base fare. They can, however, choose to offer their services at 50% of the base fare as well. The rules also state that drivers will not be permitted to work for more than 12 hours in a day, and that the companies need to provide them insurance cover.
Uber and Ola have not previously publicly shared precisely how much they charge their drivers for each ride, but industry estimates show that a driver partner with either of these firms makes up to 74% of the ride fare, after paying taxes. The new guidelines say drivers should get to keep at least 80% of fares.
The cap on the ride fare and implied insurance costs will raise operating costs in India for Uber and Ola, both of which have eliminated jobs in recent months amid the pandemic to trim costs. The South Asian nation, which has attracted many giant international firms in recent years as they look for their next growth market, in the meantime has entered an unprecedented recession.
But not everything about the guidelines will hurt Uber and Ola, both of which had no comment to share on Friday. The rules will enable the companies to offer pooling (shared car) services on private cars, though there is a daily limit of four intra-city rides on such cars, and two weekly inter-city rides.
Ujjwal Chaudhry, an associate partner at Bangalore-based marketing research consulting firm Redseer, said the guidelines by the government will have a mixed impact.
“While it is positive in terms of formalizing the sector as well as increasing the consumer trust on aggregators through improved safety regulations. But, overall the impact of these guidelines on the ecosystem growth are negative as capping surge and platform fee will ultimately lead to reduced earnings for 5 Lac (500,000) drivers (currently on these platforms) and will also lead to increased prices and higher wait times for the 6-8 crore (60 to 80 million) consumers who use it for their mobility and commute needs,” he said in a statement.
The rules also address a range of other factors surrounding a ride. For instance, under no circumstance can the cancellation fee imposed on a rider or driver be more than 10% of the total fare, and the fee cannot exceed 100 Indian rupees, or $1.35. Also, female passengers looking for a pooled service will have the option to share the cab with only female passengers, the rules say. Cab aggregators are also required to establish a control room with round-the-clock operations.
Ola and Uber dominate the app-based ride-hailing market in India. Both the companies claim to lead the market, though SoftBank, a common investor, said recently that Ola had a slight lead over Uber in India.
The Chinese Uber for trucks Manbang announced Tuesday that it has raised $1.7 billion in its latest funding round, two years after it hauled in $1.9 billion from investors including SoftBank Group and Alphabet Inc’s venture capital fund CapitalG.
The news came fresh off a Wall Street Journal report two weeks ago that Manbang was seeking $1 billion ahead of an initial public offering next year. The company declined to comment on the matter, though its CEO Zhang Hui said in May 2019 that the firm was “not in a rush” to go public.
Manbang said it achieved profitability this year. Its valuation was reportedly on course to reach $10 billion in 2018.
The company, which runs an app matching truck drivers and merchants transporting cargo and provides financial services to truckers, was formed from a merger between rivals Yunmanman and Huochebang in 2017. It was a time when China’s “sharing economy” craze began to see consolidation and shakeup.
The latest financing again attracted high-profile backers, including returning investors SoftBank Vision Fund and Sequoia Capital China, Permira and Fidelity, a consortium that co-led the round. Other participants were Hillhouse Capital, GGV Capital, Lightspeed China Partners, Tencent, Jack Ma’s YF Capital and more.
The company has other Alibaba ties. Its CEO Zhang, who founded Yunmanman, hailed from Alibaba’s famed B2B department where Manbang chairman Wang Gang also worked before he went on to fund ride-hailing giant Didi’s angel round.
Manbang claims its platform has over 10 million verified drivers and 5 million cargo owners. The latest funding will allow it to further invest in research and development, upgrade its matching system, and expand its service capacity to functions like door-to-door transportation.
Sequoia is quite bullish about truck-hailing as it made its sixth investment in Manbang. For Permira, a European private equity fund, the Manbang investment marked the China debut of its Growth Opportunities Fund.
The only thing more rare than a unicorn is an exited unicorn.
At TechCrunch, we cover a lot of startup financings, but we rarely get the opportunity to cover exits. This week was an exception though, as it was exitpalooza as Affirm, Roblox, Airbnb, and Wish all filed to go public. With DoorDash’s IPO filing last week, this is upwards of $100 billion in potential float heading to the public markets as we make our way to the end of a tumultuous 2020.
All those exits raise a simple question – who made the money? Which VCs got in early on some of the biggest startups of the decade? Who is going to be buying a new yacht for the family for the holidays (or, like, a fancy yurt for when Burning Man restarts)? The good news is that the wealth is being spread around at least a couple of VC firms, although there are definitely a handful of partners who are looking at a very, very nice check in the mail compared to others.
So let’s dive in.
I’ve covered DoorDash’s and Airbnb’s investor returns in-depth, so if you want to know more about those individual returns, feel free to check those analyses out. But let’s take a more panoramic perspective of the returns of these five companies as a whole.
First, let’s take a look at the founders. These are among the very best startups ever built, and therefore, unsurprisingly, the founders all did pretty well for themselves. But there are pretty wide variations that are interesting to note.
First, Airbnb — by far — has the best return profile for its founders. Brian Chesky, Nathan Blecharczyk, and Joe Gebbia together own nearly 42% of their company at IPO, and that’s after raising billions in venture capital. The reason for their success is simple: Airbnb may have had some tough early innings when it was just getting started, but once it did, its valuation just skyrocketed. That helped to limit dilution in its earlier growth rounds, and ultimately protected their ownership in the company.
David Baszucki of Roblox and Peter Szulczewski of Wish both did well: they own 12% and about 19% of their companies, respectively. Szulczewski’s co-founder Sheng “Danny” Zhang, who is Wish’s CTO, owns 4.9%. Eric Cassel, the co-founder of Roblox, did not disclose ownership in the company’s S-1 filing, indicating that he doesn’t own greater than 5% (the SEC’s reporting threshold).
DoorDash’s founders own a bit less of their company, mostly owing to the money-gobbling nature of that business and the sheer number of co-founders of the company. CEO Tony Xu owns 5.2% while his two co-founders Andy Fang and Stanley Tang each have 4.7%. A fourth co-founder Evan Moore didn’t disclose his share totals in the company’s filing.
Finally, we have Affirm . Affirm didn’t provide total share counts for the company, so it’s hard right now to get a full ownership picture. It’s also particularly hard because Max Levchin, who founded Affirm, was a well-known, multi-time entrepreneur who had a unique shareholder structure from the beginning (many of the venture firms on the cap table actually have equal proportions of common and preferred shares). Levchin has more shares all together than any of his individual VC investors — 27.5 million shares, compared to the second largest investor, Jasmine Ventures (a unit of Singapore’s GIC) at 22 million shares.
True Balance, a South Korean startup which runs an eponymous financial services app aimed at tens of millions of users in small cities and towns in India, said on Wednesday it has raised $28 million in a new financing round and expects to turn a profit by next year.
SoftBank Ventures Asia, Naver, BonAngels, Daesung Private Equity, and Shinhan Capital financed the five-year-old startup’s Series D financing round. The startup, which has headquarters in Seoul and Gurugram, has raised about $90 million to date.
True Balance began its life as an app to help users easily find their mobile balance, or top up pre-pay mobile credit. But in its five-year journey, the startup has added a range of financial services including online lending and ability to pay utility bills. Online lending is its core business today.
In an interview with TechCrunch, Charlie Lee, founder and chief executive of True Balance, said the startup has disbursed over $13.5 million in small loans to consumers. The size of these loans vary from $6.75 to $675, he said.
Its customers don’t have a credit score, which makes it complicated for them to get a loan from financial institutions such as banks. Lee explained that True Balance, which formerly operated as Balancehero India, looks at alternative data to determine a user’s credit worthiness.
Hundreds of millions of Indian today don’t have a credit score, and without this, they can’t avail a range of services from banks. Scores of startups in India and Southeast Asia are experimenting with alternative data such as a phone a consumer has and the transactions she makes and hundreds of other data points to determine these people’s credit worthiness.
Lee did not reveal how many of the consumers it has lent money to have returned the amount, but said the figure was so high that the startup is open to engaging with other firms who are looking to make use of alternative data but don’t have the tech stack.
The startup told TechCrunch last year that it was nearing profitability — a milestone it now hopes to reach in the second quarter of next year. Lee said the coronavirus, which has severely impacted the financial services sector, also hurt True Balance’s business.
Payments business in India remains a category that has yet to fully recover from the coronavirus pandemic and the sector at large won’t be profitable for at least another three years, analysts at Goldman Sachs wrote in a report they sent to clients earlier this month.
“Before the coronavirus, our business was growing very fast,” said Lee. “The coronavirus and moratorium (enforced by the nation’s central bank) hit us. We utilized this time to improve our collection process and other aspects of the business.”
In the last three months, True Balance has started to grow again, Lee said, claiming a 300% surge. The startup continues to run a range of other services including the ability to book train tickets and e-commerce and is also working on insurance.
“We will continue focusing on non-online payment users, non-credit score users, people who deserve our help, but need a way to get to it,” he said.
More to follow…
Such was the overarching message delivered at a virtual Dealbook conference earlier today, with Son joining from Tokyo and sounding sanguine about a wide range of issues, from TikTok’s future (SoftBank is an investor in its parent company, Bytedance); to the future of ousted WeWork cofounder Adam Neumann, a company on which SoftBank has lost billions of dollars (“I’m a big believer that someday he will be very successful”); to SoftBank’s ability to shop opportunistically, thanks to a massive asset sell-off that Son says has provided SoftBank with “$80 billion in cash on hand.”
In case you missed the chat, we’re bringing you some highlights, starting with the one thing that is causing the “optimistic” Son to feel “pessimistic in the short-term.”
Son says that in March, he was accused by local medical professionals of trying to cause a panic after tweeting about his concern over the coronavirus.
SoftBank has since begun operating the largest private testing facility in Japan, a country of 126.5 million that is currently seeing roughly 1,300 new cases each day (compared to the U.S., home to 328 million people and currently seeing more than 166,000 new cases each day).
Son credits Japanese citizens with the country’s success to date in battling back the pandemic, saying they “all wear a mask by themselves . . .they are very conscious about this.” But he said that “any disaster” could happen “in the next two to three months” before the mass production and distribution of a vaccine. A “major company could collapse” causing a domino effect, not unlike what happened when Lehman Brothers was abruptly forced to file bankruptcy in 2008, shaking up the entire banking industry.
“Anything can happen in this kind of situation,” said Son, adding, “I think it’s getting better with this news of the vaccines’ success. But I still want to be prepared for the worst-case scenario, so that’s why today we have almost $80 billion cash in hand ourselves.” Son went on to say that SoftBank has “enough funding,” but that “I thought cash is very important in this kind of crisis.”
On that massive cash pile:
Interviewer Andrew Ross Sorkin did not ask, and Son did not remark, about Elliott Management, the hedge-fund firm believed to be the second biggest shareholder of SoftBank and which reportedly pressured Son to sell off assets and buy back some of the company’s own shares, whose price had fallen precipitously earlier this year.
In the meantime, Son suggested that it was his own decision to snatch up depressed SoftBank shares, saying that when in March, its stock had sunk almost 70% in value, “I said, ‘Oh my god, this is the best time for me to buy back shares, when our discount to the our underlying asset went over 70%, like 75%.’ So I could buy our own company for one-fourth the price of underlying assets. I said, ‘Oh my god, I should buy, I should buy it.'”
Son did answer whether part of that asset sale was also driven by an interest in plugging more money into SoftBank’s existing portfolio companies — some of which have suffered during the pandemic — or whether he anticipates being able to swoop in and buy up other, new assets.
Unsurprisingly, Son said that “If we can invest in these front end companies, if we can invest more into those opportunities, I will be aggressive,” noting that pricing for so-called unicorns that need funding has improved.
On the WeWork debacle and lessons learned:
Speaking of unicorns, Sorkin brought up WeWork, the coworking company into which SoftBank somewhat famously jammed at least $18.5 billion — “billions” of which it subsequently lost, acknowledged Son.
Sorkin asked what lessons were learned from SoftBank’s involvement with the company, but Son, who later said in the interview that he is someone who accepts his bad decisions so he can learn from them, didn’t exactly acknowledge a failing on SoftBank’s part, pointing the finger instead at cofounder and former CEO Adam Neumann, who was elbowed out the door of the company roughly a year ago.
Said Son: “I think this is a lesson that Adam Neumann himself is telling himself he made a mistake. He’s a smart guy. I think he admits he made a few mistakes. I think that he’s a smart guy, he’s an aggressive guy, he has lots of capability, he can convince people, he’s a great leader. But he made some mistakes. Any human makes some mistakes.”
The furthest Son went was to say that, “I’m part of the responsibility of his mistake,” before continuing on regarding Neumann, saying: “So, I still love him. I still respect him. I’m sure he would come back and do some great stuff in his rest of the world and his life. So I’m a big believer that someday he will be very successful. And he would he would say he has learned a lot from his prior life.”
On the Trump administration’s efforts to ban TikTok in the U.S.:
Son also has a vested interest in TikTok’s success. It was roughly two years ago that it led a $3 billion round in TikTok’s parent company, Bytedance, which was valued at $78 billion at the time and which is currently raising a new round from investors that would value the still-private company at a whopping $180 billion, according to recent reports. (It’s very much a SoftBank-style deal in this regard, and it will be interesting to see if SoftBank is leading this next round at more than twice the company’s previous valuation.)
As for the pressure that Bytedance came under this fall to sell its TikTok’s U.S. operations, with Oracle and Walmart both involved in the bid, Son called it a “sad thing” if a service that “people enjoy a lot gets discontinued because of some political concerns [over] something that is actually not happening.”
Indeed, Son insisted that, based on his discussions with the company’s top brass, Bytedance has no interest in compromising the privacy of its users or the national security of the countries in which TikTok operates, be it the U.S., India, Japan, or European countries.
He added that for those regions with lingering concerns, there is “always a solution, like putting servers in each country where the politicians may feel much more comfortable about protecting security national security . . .there is always a technical solution.”
MindTickle, a startup that is helping hundreds of small and large firms improve their sales through its eponymous sales readiness platform, said on Monday it has raised $100 million in a new financing round.
The Pune and San Francisco-headquartered startup’s new financing round was led by SoftBank Vision Fund 2. The round is a combination of debt and equity, the startup said. Existing investors Norwest Venture Partners, Accel Partners, Canaan, NEA, NewView Capital, and Qualcomm Ventures also participated in the round, which according to a person familiar with the matter, valued the eight-year-old startup at roughly $500 million, up from about $250 million last year.
The vast majority of this $100 million fund is equity investment, said Krishna Depura, co-founder and chief executive of MindTickle, in an interview with TechCrunch. He declined to disclose the specific amount, however, or comment on the valuation.
We used to live in a seller’s world, where buyers had a small selection of choices from which they could pick their products. “You wanted to buy a car, there would be only one new car model every four years. Things have changed,” said Depura, noting that customers today have no shortage of companies trying to sell them similar lines of products.
While that’s great for customers, it means that companies have to put more effort to make a sale. A decade ago, as Depura watched Facebook and gaming firms like Zynga develop addictive products and services, he wondered if some of these learnings could be baked directly into modern age sales efforts.
That was the inception of MindTickle, which now helps companies guide their customer-facing teams. Regardless of what these firms are attempting to sell, they are competing with dozens of firms, if not more, and customers have ever-so-declining patience to hear them.
MindTickle, whose name is inspired from the idea of gamifying mindsets, allows companies to train and upskill their salespeople at scale, and uses role playing methods to help them practice their pitch, and how to handle a customer’s queries.
Depura said the platform helps salespeople measure their improvement in revenue metrics and offers feedback on the calls they made. The platform utilizes machine learning engines to serve personalized remediations and reinforcements to salespeople, he said.
More than 200 enterprises, including more than 40 of the Fortune 500 and Forbes Global 2000 firms, are among MindTickle’s clients today — though, citing confidential agreements, the firm said it can’t disclose several names. Some of the names it did share include MongoDB, Nutanix, Qualtrics, Procore, Square, Janssen, Cloudera, Dexcom, Merck & Co., and Benetton Group.
As of this writing, MindTickle was ranked the fifth best product for sales on G2, a popular marketplace for software and services.
“MindTickle’s track record of growth, quality of product and marquee customer base highlights their strengths,” said Sumer Juneja, Partner at SoftBank Investment Advisers, in a statement. “By delivering engaging and personalized training to users, MindTickle is uniquely placed to support businesses to increase revenue generation and extend critical capabilities within their existing workforce.” The Japanese investment group, which began conversations with MindTickle about three months ago, is exploring more investments in SaaS categories.
The new funding capital will allow MindTickle, which employs about 400 people in the U.S., Europe, and India, to further establish this new category, said Depura. The startup is developing new product features and will deploy the new funds to further grow in Europe, and the U.S., which is already one of its key markets.
More to follow…
It’s hard to think back to the Vision Fund era today, given the oddities that 2020 has brought. But SoftBank’s gravity-bending investment vehicle only stopped investing last September, ending its disbursement of huge blocks of cash from a total committed capital pool worth nearly $99 billion.
The Vision Fund was a wrecking ball, smashing into any company it chose with a big check and demands for rapid growth. By the time it was done investing, the first Vision Fund had deployed around $100 million every day of its existence, according to TechCrunch calculations.
But even before SoftBank and eccentric leader Masayoshi Son were done cutting checks, things were going awry. TechCrunch compiled a list of issues that cropped up inside the portfolio in 2019, including layoffs at the overstuffed Wag, Uber’s lackluster IPO, turmoil at Brandless, the enormous WeWork IPO fiasco and its ensuing chaos, executive changes at Compass, layoffs at Fair and Katerra and OneConnect’s IPO fizzle.
By this April, SoftBank admitted that it was on track to take stiff losses from its Vision Fund portfolio, which, when combined with other investing losses, pushed the company into a rare loss for the year.
And then things got better: SoftBank’s Vision Fund had a much better last six months than you probably guessed, and we need to understand why.
Before we get to the turnaround, we need to understand how much damage the Vision Fund caused its parent company earlier this year.
To grok the impact that the Vision Fund’s rough patch caused SoftBank Group during the 12-month period ending March 31, 2020, we can glean all that we need from a single chart. Here’s SoftBank Group’s net income through its fiscal 2019:
The period’s loss stands out like a sore thumb.
What drove the deficit? A ¥1.9 trillion segment loss from the Vision Fund, produced by declines in the “fair values of Uber and WeWork and its three affiliates,” along with the fair value of “other portfolio companies decreas[ing] significantly in the fourth quarter primarily due to the impact of the COVID-19 outbreak.”
It was brutal and humiliating to have raised so much money and invested it with such confidence only to have so many deals go sideways.
At the end of its fiscal 2019, SoftBank Group reported that the Vision Fund held 88 investments that had cost it $75.0 billion. The whole group was worth $69.6 billion, “excluding exited investments.”
Fast forward to the company’s most recent report, covering the following six months — a period ending as September came to a close — and it’s hard to compare the two sets of results: SoftBank Group was back in the black, posting solid year-over-year gains from the same period of its preceding fiscal year.
Of course, SoftBank Group is far more than the Vision Fund — the company is a Japanese conglomerate with a huge telecom business that makes lots of money. But we care about its startup investing performance, so how did the Vision Fund itself impact its numbers in the six months concluding in September 2020?
Boston Dynamics could be set to change hands once again, according to a new report from Bloomberg that cited “people familiar with the matter.”
The deal would make Korean automaker Hyundai the third company in seven years to own the robotics firm, following sales to Google and SoftBank Group. Boston Dynamics is well known inside and out the industry for making some of the most advanced robotics systems on the planet, including BigDog and the humanoid Atlas.
We’ve reached out to Hyundai, Softbank and Boston Dynamics for comment and will update if any respond.
Since becoming a part of SoftBank in 2017, however, Boston Dynamics has aggressively pushed to commercialize its products after a quarter century of being focused on military and research robotics. Its Spot robot went up for sale last year and has appeared in a wide range of different applications. Recent notable appearances include Ukraine’s Chernobyl, the NYPD and telemedicine.
The company has also been working to offer its wheeled Handle robot for warehouse fulfillment applications, which will no doubt hold some interest for potential purchasers amid the COVID-19 pandemic. Still, attempting to scale these kinds of advanced — and pricey — technologies is a difficult proposition and requires owners with patience and deep pockets. Softbank, notable, has had some struggles this year, including bad bets like WeWork.
While the Softbank has had its hand in robotics — including, most notably Pepper-maker Aldebaran Robotics — Hyundai’s vision has been much more inline with Boston Dynamics’ work. Take the recent example of its sci-fi-style Ultimate Mobility Vehicles, which combine traditional transport with transforming robotic technologies.
Hyundai has shown increasing interest in automated vehicle technology and robotics over the past year. Hyundai formed a joint venture with autonomous driving technology company Aptiv, with both parties taking a 50% ownership stake in the new company now known as Motional. The goal of the new venture will be to develop Level 4 and Level 5 production-ready self-driving systems intended for commercialization, with the goal of making those available to robotaxi and fleet operators, as well as other auto makers, by 2022.
The combined investment in the joint venture from both companies totaled $4 billion in aggregate value (including the value of combined engineering services, R&D and IP) initially, according to Aptiv and Hyundai, and testing for their fully autonomous systems will begin in 2020 in pursuit of that 2022 commercialization target.
Hyundai isn’t done spending money on autonomous vehicle technology. In October 2019, the automaker committed to investing 41 trillion South Korean won ($35 billion) into “future mobility technologies” by the year 2025. While a bulk of those funds will go towards the electrifying its portfolio, Hyundai is expressly interested in autonomous vehicles and other future mobility technologies.
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Welcome back to The Station, a newsletter dedicated to all the present and future ways people and packages move from Point A to Point B.
What.A.Week. Shall we dig in?
Election Day turned into Election Week as the presidential race tightened and the world waited to see if President Trump would remain in office or if Joe Biden would become the 46th leader of the country.
On Saturday morning, AP, Fox News and every other major news outlets called the race, naming Joe Biden president-elect. The ballot counts will still continue and eventually lead to each state’s Electoral College electors formally casting their votes for president and vice president on December 14, as dictated by our election process.
Assuming Biden is sworn in as the next president of the United States, transportation will likely not be his first area of focus. However, it will be interesting to see how his personal experience of losing his first wife and daughter in a car crash, views on climate change and love for Corvettes as well as Amtrak might shape federal transportation policy. The country has deep infrastructure needs, a rail service in crisis and an emerging tech sector focused on commercializing automated vehicle technology.
Election Day was, of course, about more than Trump and Biden. Ballots throughout the U.S. contained dozens of transportation-related measures, including public transit funding, a car owner’s right to repair and whether gig economy workers should be classified as employees or independent contractors.
Prop 22, the California ballot measure, might have been the most visible campaign thanks to the tens of millions of dollars that Uber, Lyft and other gig worker-reliant companies contributed to help garner support and get it passed. Voters approved Prop 22, which means that gig workers will continue to be classified as independent workers. Companies that use gig workers will be required to provide an earnings guarantee of at least 120% of minimum wage, 30 cents per engaged miles for expenses, a healthcare stipend, occupational accident insurance for on-the-job injuries, protection against discrimination and sexual harassment and automobile accident and liability insurance.
Fresh off of its success on Election Day, Uber signaled that it will continue to push laws similar to the Prop 22. The ride-hailing company’s ambitions for laws that preserve its business model are global. Uber CEO Dara Khosrowshahi said Thursday during an earnings call with analysts that the company will “more loudly advocate for laws like Prop 22.” He later added that it will be a priority of the company “to work with governments across the U.S. and the world to make this a reality.”
There were at other transportation-related measures that were decided by voters in California, Georgia, Massachusetts, Michigan Oregon and Washington. Of the 19 measures related to public transit, 15 passed, two failed and one in Gwinnett County, Georgia is still “too close to call.” The Center for Transportation Excellence created a handy spreadsheet tracking Election 2020 ballot measures related to public transit.
Finally, another ballot measure, which received a lot of attention and lobbying dollars, was Question 1 in Massachusetts. The ballot measure, which was approved by 75% of voters, amends and broadens a law that gives consumers in Massachusetts the right to repair the vehicles they own.
Automakers that sell vehicles with telematics systems in Massachusetts will now have to equip them with a standardized open data platform beginning with model year 2022. This standardized open data platform has to give vehicle owners and independent repair facilities direct access and the ability to retrieve mechanical data and run diagnostics through a mobile-based application.
Importantly, this measure covers the data that telematics systems collect and wirelessly transmit. And it not only gives access to the mechanical data, it allows owners and independent mechanics to send commands to the vehicle for repair, maintenance and diagnostic testing.
The upshot? While this ballot measure is restricted to Massachusetts, there is precedent that it will expand to the rest of the country. The initial Right to Repair law went into effect in Massachusetts in 2013. By 2014, the industry agreed in a memorandum of understanding to expand that bill and cover the rest of the country.
Transportation isn’t just about the movement between places; it’s also about the less active moments like parking. Which brings us to one eye-popping deal this week.
REEF Technology, the Miami-based company that started its life as ParkJockey, raked in $700 million from a group of investors that included Softbank and Mubadala Corp.
REEF provides hardware, software and management services for parking lots. But it more recently added other services such as providing infrastructure for cloud kitchens, healthcare clinics, logistics and last-mile delivery and even brick-and-mortar retail and experiential consumer spaces.
The company said that the money will be used to scale from 4,800 locations to 10,000 new locations around the country and to transform the parking lots into “neighborhood hubs,” according to Ari Ojalvo, the company’s co-founder and chief executive. Private equity and financial investment giants Oaktree, UBS Asset Management and the European venture capital firm Target Global also participated in the round.
As TechCrunch’s Jonathan Shieber noted in his coverage of the REEF round, like WeWork, REEF leases most of the real estate it operates and upgrades it before leasing it to other occupants (or using the spaces itself). Unlike WeWork, the business actually has a fair shot at working out — especially given business trends that have accelerated in response to the health and safety measures implemented to stop the spread of the COVID-19 pandemic.
Other deals that got my attention …
ANOTHER LIDAR SPAC! Aeva is the latest company to eschew the traditional IPO path and go public via a merger with a special purpose acquisition company. It’s also the third lidar company, following Velodyne and Luminar, to take this route to the public markets.
Aeva is a Mountain View, California-based lidar company started by two former Apple engineers and backed by Porsche SE. The company announced it was merging with special purpose acquisition company InterPrivate Acquisition Corp., with a post-deal market valuation of $2.1 billion. The deal with InterPrivate is expected to close by early 2021.
Logisly, a Jakarta-based startup that describes itself as a “B2B tech-enabled logistics platform,” announced today it has raised $6 million in Series A funding to help streamline logistics in Indonesia. The round was led by Monk’s Hill Ventures.
Marshmallow, a UK startup aiming to take on legacy insurance giants with a new approach to determining risk, raised $30 million in a Series A round. The company has a post-fundraising valuation of $310 million.
Pony.ai, the autonomous vehicle company that operates in California and China, is now valued at $5.3 billion following a fresh injection of $267 million in funding. The round was led by TIP, an innovation fund within the Ontario Teachers’ Pension Plan Board that focuses on late-stage venture and growth equity investments in companies that deliver disruptive technology. Existing partners Fidelity China Special Situations PLC, 5Y Capital (formerly Morningside Venture Capital), ClearVue Partners and Eight Roads also participated in the round.
Provizio, which developed a sensory platform it says can perceive, predict and prevent car accidents in real time and beyond the line-of-sight, closed a seed investment round of $6.2 million. Bobby Hambrick, the founder of Autonomous Stuff, the founders of Movidius, the European Innovation Council (EIC) and ACT Venture Capital participated in the round.
Scale AI, a startup that uses software and people to process and label image, lidar and map data for companies building machine learning algorithms such as Toyota and Zoox, is on the brink of becoming a company valued $3 billion, The Information reported. The company founded and led by 230year-old Alexandr Wang reportedly received an offer of investment from Tiger Global Management valuing Scale at $3.2 billion pre-money, or triple its prior valuation.
All the other stuff you should know about …
Amazon has started operations at its first European Amazon Air hub, based out of the Leipzig/Halle Airport in Germany. The new facility spans 20,000 square meters and will host two Amazon-branded Boeing 737-800 aircraft, bringing the company’s total operational air fleet to more than 70 aircraft.
Bentley Motors has begun its long farewell to the 12-cylinder combustion engines that have been the cornerstone of the 100-year-old company. The ultra luxury automaker under VW Group said it will only produce plug-in hybrid and all-electric cars starting in 2026 with an aim to drop all combustion engines in the next decade. Its entire lineup will be all-electric by 2030. The British manufacturer said two plug-in hybrid models will come out next year and its first all-electric vehicle will come to market in 2025.
CarGurus’ 2020 Pickup Truck Sentiment Study revealed that COVID-19 pandemic might have helped spur sales, thanks to young buyers. More than 26% of pickup truckers owners surveyed for the study said they had not planned to buy this category of vehicle. Other results, include 34% said they will probably/definitely own an electric pickup truck in the next 10 years and 23% in the next five years.
Gen Z/millennial truck owners are over two times more likely to expect to own an electric truck in the next five years when compared to older truck owners (30% vs. 12%). The same age cohort of younger consumers are also two times more likely to consider a truck from category-newcomers like Tesla (32% vs. 14%), Rivian (11% vs. 4%) or Hummer (13% vs 6%) when compared to older truck owners, the study found.
GM is starting to hire people for more than 1,100 new jobs for its nearly 3 million-square-foot Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio. Ultium Cells LLC is a joint venture with LG Chem that will mass-produce Ultium battery cells for electric vehicles. The plant is still under construction, but GM said it will begin actively hiring for “key positions.”
Tesla officially launched Teslaquila, a company-branded liquor that originally co-starred in CEO Elon Musk’s controversial April Fool’s Day joke about the automaker filing for bankruptcy. The Tesla Tequila costs $250 and is already sold out.
Uber reported earnings this week. As Alex Wilhelm and I wrote, the company’s two core segments were a tale of two cities: Uber’s ride-hailing (Mobility) business shrank, but made money, while Uber’s food delivery (Delivery) business grew, but continued to lose money.