VENTURE CAPITAL MARKET OVERVIEW, ISSUE 55 (SEPTEMBER, 14 – 20)

Investment market – at least – became active: we permanently see mergers and acquisition deals. Unicorn startups are opening and closing rounds, investment capital market is filled with Intel-leveled players.

M&A. Spanish Restaurant Booking Startup Restalo Acquires Local Rival Restaurantes.com

Spanish restaurant booking startup Restalo has acquired local competitor Restaurantes.com to consolidate its leading position in Spain. Terms of the deal aren’t being disclosed, though sources told that the acquisition price sits in the “mid single million euro” range, so up to €5 million.

If that it the case that could represent quite a chunk of the $10 million Series B Restalo raised from Seaya Ventures, and existing investor Active Venture Partners, back in late 2013. That said, this is likely largely if not an all-stock deal, with Restaurantes.com’s two founders and majority shareholders now having a significant stake in the newly merged entity.

Post-acquisition, the two merged entities will operate under the Restaurantes.com brand with offices in Madrid and Barcelona. Antonio Fernández Ruiz and Jesús Alonso Gallo, the two founders of Restaurantes.com will join the new management team led by Pablo Pastega, current CEO of Restalo.

Meanwhile, the merger of the two platforms makes Restaurantes.com the clear leader in Spain. It claims 6,000 partner restaurants across the country, and 1.2 million users who have reserved a table. Along with its consumer-facing restaurant booking app, the startup offers restaurants cloud-based inventory management software for €29 per month.

M&A. Soothe, An On-Demand Massage Service, Acquires Unwind Me

Soothe, which lets customers book in-home massages, has acquired competitor Unwind.me.

Unwind.me took part in Y Combinator’s summer 2014 batch and its other backers include 500 Startups and Slow Ventures. Financial details were undisclosed, but Soothe founder Merlin Kauffman says Unwind.me “has always been on our radar as an acquisition target.”

The deal will allow Soothe, which has raised $12.3 million in funding and is currently available in 13 cities, to deepen its presence in the San Francisco Bay Area. Kauffman says Soothe is now the largest massage company in the area.

Unwind.me’s current clients will be migrated to Soothe, where they can continue to use their existing Unwind.me credits. Soothe now works with 1,700 massage therapists and claims that its revenue is growing 20 percent month-over-month.

Soothe plans to integrate Unwind.me’s supply side scheduling technology into its platform, which Kauffman says will make booking appointments faster and easier. Soothe promises massage bookings within an hour and strengthening its logistics network can potentially give it a leg-up over its remaining competitors.

STARTUP. Indian Cab-Hailing Firm Ola Is Raising Over $500M

It looks like yet more fuel is about to get poured on the already-hot transportation app market in Asia. India’s Ola is raising $500 million+, at a valuation is around the $5 billion mark, with $225 million committed so far.

The news comes as the company — which competes in its home market against the likes of Uber and Indian startup Meru — continues to expand into more cities, and more products. Ola launched a new car leasing service for drivers on its network; last week it expanded to shuttle services for commuters.

This funding, a Series F, has been rumored for some time now, with the first reports surfacing just after Ola announced its last raise of $400 million in April of this year. That round, a Series E, valued the company at $2.5 billion. The lead investor of the round is Falcon Edge Capital, with Tiger Global Management, Softbank Corp., Hong Kong’s Steadview Capital, Pittsburgh’s ABG Capital and the FII LTR Focus Fund — all previous investors — also involved in this round. New investors include JS Capital (M) Ltd, Parkwood Bespin, and Daniel E. Neary.

Ola’s growth comes in the midst of a very competitive market for transportation startups in Asia and globally. Uber, the upstart from San Francisco valued at more than $50 billion, has been putting a lot of effort into growing its presence in Asia. It’s put a particular focus on India and China, recently raising $1.2 billion for Uber China at the same time that its rival in the country, Didi Kuaidi, raised $3 billion.

Ola, however, remains the bigger company. It is live in over 100 cities to Uber’s 20+, and 250,000 cars in the market today to Uber’s 165,000.

STARTUP. Clover Health, A Data-Driven Health Insurance Startup, Raises $100M

Clover Health, an insurance startup based out of San Francisco, is hoping that with its data-driven approach it can rebuild healthcare for senior citizens from the ground up.

It wants that by tracking all the inputs of a person’s medical history from insurance claims and determining who the highest-risk patients are. Clover Health then works with those patients to help them become healthier and improve overall clinical outcomes. To pull that off, the company has raised $100 million in an equity round led by First Round Capital and debt.

Clover Health’s goal is to essentially go after the bigger, traditional Medicare health insurance companies that Gale argues don’t use data to aim for better patient outcomes. To do that, it collects information like lab test results, radiology results and such to get an overall profile of a person’s health — something only an insurance provider can do because it’s taking in all the claims, Clover Health CEO Vivek Garipalli said. It then uses software models to automatically identify issues — like patients not regularly taking a prescription — and intervening with its staff of nurse practitioners and social workers.

STARTUP. Makeup Subscription Delivery Service ipsy Raises $100M

ipsy, an online makeup subscription delivery service, had raised $100 million.

Users subscribe to ipsy, paying the company $10 per month, which then sends them a monthly package of makeup called a Glam Bag filled with various samples of products. It isn’t the only subscription service that targets the beauty industry, but it appears to at least have struck a chord and built a large user base of 1.5 million subscribers, giving the company an annual revenue of more than $150 million. ipsy says it has been profitable for more than three years.

The round was led by TPG Growth and Sherpa Capital. A round this large after taking very little or no venture financing isn’t entirely unheard of. GoFundMe, for example, was a previously bootstrapped startup that earlier this year raised a venture financing round that valued the company at $600 million. Basically, it’s an attractive business that’s taken little to no outside capital that’s making money — something that is going to very quickly attract the attention of investors.

Perhaps part of the company’s large presence can be traced to its popularity on YouTube and other social channels — where the company is very active. It posts its makeup tutorial videos on YouTube, for example. And as is the case with many startups, having that focus baked into the company’s DNA is important to driving success. In this case at least, Founder Michelle Phan has seen a lot of success on YouTube — her videos have been viewed more than 1 billion times, and she also a 2015 People’s Choice Webby Award for the best how-to DIY channel.

STARTUP. China’s Didi Kuaidi Put $100M Into Lyft To Rival Uber

Didi Kuaidi, Uber’s dominant Chinese rival, announced a deal with ridesharing startup Lyft that will allow the two services to share riders across continents.

Didi confirmed an earlier investment of $100 million in Lyft’s latest round of $530 million. Carl Icahn added an additional $150 million round shortly after. The Tencent and Alibaba-backed Didi quietly invested in Lyft’s latest round of funding in May, placing the rideshare startup at a $2.5 billion valuation.

Didi confirmed the investment number at a press conference held in New York announcing the international ridesharing collaboration. Both companies are also in talks with India’s Ola and Singapore’s GrabTaxi, though neither were willing to comment on the specifics at this time.

Lyft and Didi apps will now hail rides for visitors in each other’s country. Each service will take payments from its own users, but Lyft will hail a Didi car for U.S. visitors in China and Didi will pull up a Lyft ride for Chinese visitors in the U.S.

China is perhaps the toughest market for Uber’s expansion plans. A number of homegrown taxi hailing services already exist and Didi Kuadi, the largest competitor, formed earlier this year as the strongest contender. It should be noted that the Beijing company covers about 360 cities and shuttles about three million rides per day, or three times as many riders as Uber in China.

INVESTMENT. Intel Invests $67M Into 8 Chinese Companies

Fresh off a $60 million deal with Shanghai-based drone maker Yuneec, Intel is continuing to ramp up its investment in Chinese tech startups after the U.S. firm revealed it has pumped $67 million into eight companies in the country.

Each deal isn’t broken out into specific investment size, but Intel said the companies it has backed span a range of verticals, including internet-of-things, smart devices, transportation and big data. There are very obvious synergies with the Intel mothership with each one, as you’d expect.

Intel, which has now reached 30 years of business in China, revealed that it has put nearly $2 billion in over 140 China-based companies to date. That figure is distorted by its $1 billion investment in chip maker Beijing UniSpreadtrum last year, but the U.S. firm said that an impressive 35 of its China portfolio have exited via a public offering or acquisition.

The deal for Yuneec showed that Intel is upping the ante with its China-based funds, but today’s news shows it is still going after its bread and butter areas and not just sexy stuff like drones.

INVESTMENT. Phil Libin Joins General Catalyst As General Partner

Phil Libin, the longtime CEO of the popular digital note-taking service Evernote, has joined General Catalyst Partners as its fourth general partner in Palo Alto, Ca.

Libin stepped down from his role at Evernote in July, after telling The Information that the company had been searching for a “professional CEO” for some time. He said then that he considered himself more of a “product person.”

Libin joined Evernote soon after the Redwood City, California, company’s founding in 2007. It has raised $290 million in venture capital since and was valued at $1 billion in 2012 when it raised a $70 million Series D round.

Evernote’s valuation has reportedly stagnated since. The company has also declined to disclose how many of its roughly 150 million registered members are active users, though it launched a campaign to convert more of them into paying customers in April.