VENTURE CAPITAL MARKET OVERVIEW, ISSUE 36 (MAY 4 – 10)
Last week was full of really great Mergers and acquisitions: Google came out to market, Delivery Hero continues setting the price records, among the startups that managed to get investments, “smart” companies prevail – educational and hi-tech startups.
M&A. Google Acquires Timeful To Bring Smart Scheduling To Google Apps
Google has acquired Timeful, a startup designed to make scheduling easier by helping you solve larger goals without requiring you to sweat the details. Timeful’s app analyzes your schedule, and uses it to help you achieve specific goals you have in mind. The features Timeful created will be integrated into Google Apps going forward, and the app will remain available, but the Timeful team is turning its attention to projects at Google so continued support isn’t all that likely.
Timeful got a stealthy start thanks to funding from KPCB, Data Collective, Khosla Ventures and Ashton Kutcher’s A-Grade Ventures, and broke cover last March with a public app launch in July. The app works by prioritizing your various activities and time demands, and works with existing calendar software for all major platforms like iCal, Microsoft Exchange or Google Calendar. It takes your existing schedule, adds the things you need to get done, weigh how important those things are and finds time for you to get them done.
The core tech of Timeful involves machine learning aimed at taking the hassle out of combining scheduling and GTD task management. In many ways, it’s doing for calendars and schedules what Inbox is trying to accomplish for email. So it makes sense as an acquisition target for Google, because it seeks to advance the capabilities of Apps to deal with the shift of communication and time-management overwhelmingly online.
M&A. Delivery Hero Eats Up Turkey’s Yemeksepeti For A Record $589M
Delivery Hero, the billion-dollar takeout food service based in Berlin, is making another big acquisition as it continues to scale up its business worldwide. It’s buying Turkey’s Yemeksepeti for $589 million in a cash and shares deal that will also see investor General Atlantic becoming shareholders in Delivery Hero.
Yemeksepeti — Turkish for “food cart” — is Delivery Hero’s first move into Turkey, and the deal is groundbreaking in another respect: the company claims it is the largest-ever acquisition in the food-ordering sector.
Other significant M&A and funding moves in the takeout food space have included Seamless and GrubHub merging in 2013, a deal in which the price and respective company valuations were never disclosed.
M&A. Recruit Acquires Majority Stake In European Wahanda
Wahanda, the European hair and beauty marketplace, has seen an exit of sorts. Japan’s Recruit Holdings, which already owned 10 percent of the London-based startup, has acquired a further 70 percent share for £112.5 million (~$171m), in a deal that sees Wahanda’s other backers cash out.
These include Fidelity Growth Partners, Ambient Sound Investments, 14W and Lepe Partners, along with private investors, including Brent Hoberman (founder of Lastminute.com) and Stefan Glaenzer (Partner at Passion Capital).
The acquisition means that Wahanda was valued at approximately $222 million.
Wahanda is thought to have previously raised a total of $37.6 million, so we can safely consider this a decent European exit, albeit not quite a home run for investors.
The hair and beauty booking site is currently available in five countries — U.K., Germany, Lithuania, Switzerland and Austria — reaching 12,000 salons and spas, and expects to expand to a further three countries by June.
M&A. RockYou Buys Mobile Ad Network PlayHaven
Gaming and advertising company RockYou has acquired mobile ad network PlayHaven from startup studio Science Inc.
PlayHaven actually changed hands last fall, when Science bought it from Upsight, the company created from the merger of PlayHaven and Kontagent. By acquiring a mobile ad network, CEO Lisa Marino said RockYou can do a better job of making money from mobile games like Kitchen Scramble and Words of Wonder, and it’s also laying the “foundation” for further expansion into mobile.
“We need a way to augment our mobile ad monetization — the solutions we have today didn’t get us where we needed to be,” Marino said.
She also said PlayHaven’s “brand-centric” approach is a good fit with the work that RockYou has already been doing with video advertising. The PlayHaven network already serves ads to 18,000 games and 250 million users each month.
STARTUP. Uber Is Looking For Another $1.5 Billion In Funding
On-demand transportation and logistics company Uber could raise another $1.5 billion to $2 billion in funding, adding to an already massive war chest as the company expands into new markets and new verticals around the world.
As reported by the Wall Street Journal and the New York Times, the latest fundraising effort could value the company above $50 billion, which would put it in the same league as Facebook in its last private funding round before going public. The new valuation would also once again make it the most highly valued private company in the world by topping consumer electronics manufacturer Xiaomi, which was valued at $45 billion in its most recent round of funding.
STARTUP. Altschool Raises $100M To Scale A Personalized Learning
In one of the biggest funding rounds of the year in education and technology, Altschool is raising $100 million from Founders Fund, Mark Zuckerberg and Priscilla Chan’s foundation along with other venture backers and philanthropic organizations.
The move will mark the company’s shift from proving out its ideas around personalized education through building its own schools to sharing or licensing its individualized learning model with other educators that want to adopt its approach. It’s an ambitious and major test as to whether Altschool’s model can be done affordably and accessibly at scale in other parts of the country.
“We have created an operating system that not only our own schools can use, but an expanding universe of schools that start to look more like Altschools,” said CEO Max Ventilla, who said he expects the company to triple or quadruple its number of locations over the next few years to roughly 20 schools. “Our platform can remove a lot of the kinds of costs and headaches that are associated with running a one-off school.”
This round is split 50-50 between conventional venture firms like existing investor Andreessen Horowitz and other philanthropic organizations like Laurene Powell Jobs’ Emerson Collective.
STARTUP. Kano Gets $15M To Build A Creative Computing Brand
London-based startup Kano, which makes a software platform and DIY computer kit built atop the Raspberry Pi to encourage kids to learn coding, has a new building block of its own to announce today: $15 million in Series A funding, led by Jim Breyer of Silicon Valley VC firm Breyer Capital. Other investors in the round include Collaborative Fund and Jim O’Neill, former chairman of Goldman Sachs Asset Management. The news was announced by Kano co-founder Alex Klein on stage, here at TechCrunch Disrupt NY.
Kano is also offering its users and the wider tech community the chance to invest in the round, via the Quire equity crowdfunding platform — with up to $500,000 available for community backers. “The round is basically over-subscribed so whatever the community will take they’re going to have a certain amount that we’re allocating for the community,” adds co-founder and CEO Yonatan Raz-Fridman.
The Quire community outreach follows Kano’s use of the Kickstarter crowdfunding platform, back in 2013, to get its first product to market. It raised around $1.5 million via that platform, shipping its first batch of 18,000 Kano kits to Kickstarter backers last fall. It’s now shipped more than 40,000 kits to more than 30,000 customers in all.
STARTUP. Indian Online Tutoring Platform Vedantu Nabs $5M
Vedantu, an online tutoring platform, disclosed today that it has raised a $5 million series A from Accel Partners and Tiger Global Management.
Test preparation is a big market in India as more students gear up for the exams they need to ace in order to score a place at a prestigious university. Traditionally, test takers rely on brick-and-mortar coaching centers, but more ed-tech companies are springing up and more students are supplementing offline courses with online study materials and tutoring. In fact, enough entrance exam startups have been founded to trigger a wave of consolidation.
There is still room for different companies, however, since the test prep market is expected to grow at a steady compound annual growth rate of 3.85 percent until 2019, according to Indalytics Advisors.
Vedantu was launched six months ago by the same team that founded Lakshya Forum for Competitions, an engineering school entrance exam preparation startup that was acquired by MT Educare in 2012.
In a prepared statement, co-founder and chief executive officer Vamsi Krishna says the company’s series A will be to scale up its platform so students can connect with a tutor in real-time and also make Vedantu available on mobile devices.
INVESTMENT. 500 Startups Accelerator Announces Its Thirteenth Batch Of Companies
With their twelfth batch of companies set to demo to investors and the press, 500 Startups is announcing the thirteenth batch of companies to go through its accelerator.
The firm is adding 30 more startups to its 1,000-company portfolio, and there are a few clear trends among the batch: lots of on-demand services, marketplaces, and physical goods like hardware or cleaning products.
As with its recent cohorts, the accelerator is bringing in companies from San Francisco, Silicon Valley, New York, and outside the U.S. for its newest batch. 500 Startups founding partner Dave McClure explained the philosophy behind that diversity, noting, “we think they’re under-priced assets that the rest of the world is missing.”
INVESTMENT. Storm Ventures Locks Down $180M For Its New Fund
Storm Ventures has joined nearly every other startup capital entity in raising a new, larger fund. Storm’s fifth fund is a $180 million vehicle that the firm has stapled a new venture partner to.
As a group, Storm is known for its work with SaaS-focused companies. Its own Jason Lemkin, the other guest in the above segment, is something of a Bay Area uncle for SaaS, in that he has a habit of dishing tidbits about selling software on a subscription basis on Quora and other social services.
Storm joins NEA, IVP, Freestyle and others in locking down an expanded fresh fund.