Startup Asia: Latest Deals, Funds
Matrix Partners has raised a fourth China-focused fund, at $500 million. The close comes less than two years after the Boston-headquartered firm’s third China fund brought in $350 million for investments in TMT startups. The firm’s Form D filing with the SEC reveals 42 total investors. Matrix has backed a number of well-known Chinese firms, including search giant Baidu, software developer Cheetah Mobile, ad agency Focus Media, and parenting website BabyTree.
Chinese Internet titan Tencent has co-led a $10 million Series A round of AI startup Diffbot alongside Silicon Valley VC firm Felicis Ventures. Other investors included Amplify Ventures and Valor Capital Group plus Sun Microsystems founder Andy Bechtolsheim and Bill Lee, an early investor in SpaceX and Tesla. The deal is Tencent’s third publicly reported deal outside of China this February. Diffbot offers a data product with proprietary AI capabilities that data mines on the web, with clients such as eBay, Adobe and Microsoft.
Xiaomi leader Hugo Barra is among the investors in a $60 million combined Series B and C in Student.com, a London-based marketplace for student housing near universities. Barra invested alongside global investment firm VY Capital (lead investor), Horizon Ventures, San Francisco “startup studio” Expa, and founders Daniel Ek and Martin Lorentzon of Sweden-based music streaming service Spotify. Founded in 2011, Student.com takes commissions from bookings, some $110 million in bookings from 400 destinations. New funds are earmarked for expansion in the U.S., Latin America and the Middle East.
Led by Qihoo 360, a group of Chinese firms has made a bid to purchase Oslo-headquartered internet browser developer Opera for $1.2 billion in cash. The syndicate includes China-listed mobile Internet company Kunlun, and is backed by investment funds Golden Brick Silk Road and Yonglian. Opera’s board and shareholders have recommended the deal, which represents a 53% premium on the firm’s February 4 market closing price. Opera’s software products are used by 350 million consumers as well as by 120 operators to boost their networks. The proposed deal would give Opera access to Qihoo and Kunlun’s huge base Internet users in China.
In one of the first IPOs of 2016, Beijing biotech company BeiGene has raised $158 million in a NASDAQ listing. The market debut follows the cancer drug developer’s $97 million financing in May 2015, which was co-led by Hillhouse Capital with participation from CITIC Private Equity.
Indian mobile payment and e-commerce firm Paytm is raising another $400 million, months after closing a $680 million round led by Alibaba‘s affiliate, Ant Financial. The funds are intended to enable a June launch of Paytm Payment Bank, a move that follows Alibaba’s own business extensions. Launched in 2011, Paytm boasts 100 million mobile wallets. Notably, the startup received a payment bank license last August for the Indian market, which boosts one of the world’s fastest-growing e-commerce markets, projecting to reach $55 billion in 2018, up from $14 billion last year.
Leading Indian VC firm Kalaari Capital has launched Kstart, an accelerator program for startups. The Bangalore-based firm plans to have a new batch of up to five early-stage startups each quarter, investing $500,000 in convertible equity in each. Participating companies will gain access to a network of tech giants including Google and IBM, as well as mentors such as former Tata chairman Ratan Tata, Google executive Rajan Anadan, and legal consultant Zia Mody. Kalaari Capital has backed e-commerce platform Snapdeal, digital media site YourStory, and it recently funded used car marketplace Truebil.
In a move that consolidates once-rivals, Softbank-backed budget hotel booking app Oyo Rooms has acquired Zo Rooms, which counts New-York based Tiger Global Management as an investor. Oyo Rooms investors span to Sequoia, Lightspeed and Greenoaks Capital as well. Zo Rooms had previously secured $32 million from backers including Tiger Global and Oris Venture Partners.
SBI Investment, the VC arm of Japan’s SBI Holdings, has led a multi-million dollar Series B round for U.S.-based bitcoin exchange site Kraken, which is focused on scaling up. Kraken, which claims to be the world’s biggest bitcoin exchange by transaction volume and liquidity in the euro market, was the first bitcoin exchange to have trading price and volume displayed on the Bloomberg Terminal. Its platform enables users to trade digital assets for euros, U.S. dollars, yen, pounds and Canadian dollars. SBI’s investment comes weeks after Kraken bought two U.S. and Canada-based exchanges, Coinsetter and Cavirtex.
Chinese tutoring service TAL Education Group and Singapore’s EBDI have joined a $52 million round for Knewton, a New York-based adaptive learning system developer. The financing was led by two European investors ─ Sofina of Belgium and Atomico Venture in London – and included existing investors Accel Partners, Bessemer Venture Partners, FirstMark Capital and Founders Fund. Knewton, which has offices in New York, London, São Paulo and Tokyo, powers adaptive learning products for many of the world’s largest education companies. Knewton plans to use the fresh funds to build up its sales, support and tech teams, with a focus on Asia.
Vertex has raised $150 million for its fourth fund, exceeding an earlier goal of $120 million and pinpointing Israel. In a reference to its home base Singapore, the new fund named Red Dot, is to invest $10-15 million in mature and growing Israeli tech companies. In late 2015, Vertex, linked to Singaporean sovereign wealth fund Temasek Holdings, had closed a $200 million fund focused on Southeast Asia and India.
— Silicon Dragon contributor Ying-Ying Lu