Month: November 2018

Crunchbase News recently profiled a selection of U.S. companies’ largest VC raised in 2018, and no surprise here: the 10 largest rounds all topped out well north of $100 million.

A major driver of global venture dollar growth is the relatively recent phenomenon of companies raising $100 million or more in a single venture round. We’ve called these nine and 10-figure deals, which shine brightly in the media and are hefty enough to bend the curve of VC fund sizes upwards, “supergiants” after their stellar counterparts.

And like stars, venture-backed companies tend to originate and co-exist in clusters, while the physical space between these groups is largely empty.

We noticed that many of the companies behind these supergiant rounds are headquartered in just a few metro areas around the United States. In this case, it’s mostly just the SF Bay Area, plus others scattered between Boston, Los Angeles, San Diego and one (Magic Leap) in the unfortunately named Plantation, Florida.

The San Francisco Bay Area is perhaps one of the best-known tech and startup hubs in the world. Places like Boston, NYC and Los Angeles, among others, are perhaps just as well-known. But how do these cities stack up as clusters for companies raising supergiant rounds?

Superclusters

That question got us wondering how these locales rank against other major metropolitan areas throughout the world. In the chart below, we’ve plotted the count of supergiant venture rounds¹ topping out at $100 million or more through November 5. These numbers are based off of reported data in Crunchbase, exclude private equity rounds and do not account for deals that may have already been closed but haven’t been publicly announced yet.

Although U.S.-based companies have raised more supergiant rounds (168 year to date) than their Chinese counterparts (160 year to date), Chinese companies raise much bigger rounds, even at this supergiant size class.

How much more? U.S. companies have raised $38.4 billion, year to date, in nine and 10-figure venture rounds alone. Chinese companies have raised $69 billion across their 160 supergiant deals, which includes the largest-ever VC deal: a $14 billion Series C round raised by Ant Financial.

2018 in perspective

2018 is already a record year for venture funding worldwide. With more than $275 billion in projected total venture dollar volume so far, 2018’s year-to-date numbers have already eclipsed 2017’s full-year figures (a projected $220 billion, roughly) by more than $55 billion.²

And there’s still about eight weeks left to go before it’s New Year’s Eve.

1. We use the same classification rules for what is and is not a “venture” round as we’ve used in our quarterly reports. Check out the methodology section of our most recent global VC report, from Q3 2018, to learn more about how Crunchbase News categorizes rounds.
2. We’re referring to the same type of projected data we use in the quarterly reports. Check out the methodology section of our most recent global VC report, from Q3 2018, to learn more about how Crunchbase News uses projected and reported data.

Source: Tech Crunch

Virtual reality hasn’t proven itself to be the lucrative escape of the every-man, but the medium has done a fairly good job enticing the gaming community and keeping that niche (mostly) happy. While a couple of big titles have gotten some halfway-decent ports to VR, for the most part VR users are confined to whatever indies can build or whatever Oculus can fund.

BigBox VR has been trying to capture attention in the space by not building solo adventures that lead users to find themselves, but instead by trying to match VR’s physicality and immersion with social gameplay that leads users to gain greater appreciation for the medium’s scale.

The company just closed a $5 million funding round led by Shasta Ventures with participation from GSR Ventures and Pioneer Square Labs Ventures. As part of the round, Shasta partner Jacob Mullins will be getting a seat on the board.

Venture cash for VR content hasn’t exactly been free-flowing in 2018, more so for startups that aren’t caught up in building out a “platform play.” Co-founders Chia Chin Lee and Gabe Brown are more interested in just building out titles and hopefully creating one so successful that they don’t have to stop evolving it. The team at BigBox VR got its start with a cartoonish shooter title called Smashbox Arena; the small team has been really interested in finding what VR enables when it comes to competitive online play.

The BigBox VR team

Funding rounds aren’t often about the achievements of the past; however, the company is currently going full-steam ahead with its next ambitious title, a battle royale title called “POPULATION: ONE.”

I had a chance to suit up in VR and dive-in with Jacob and the founding team. I got my ass kicked a couple times, but then they let me win at some point, which I admit I was pretty okay with.

To say the game shares some similarities with Fortnite is an understatement. Not only is it a battle royale title with a shrinking environment, but certain mechanics like gliding in at the beginning to scrounge for weapons and even Fortnite’s building feature are central to the gameplay. That being said, battle royale titles have exploded in the wake of PUBG and they seem to all share a lot among each other. For BigBox, VR is the distinguishing feature, with motion controls and the general feeling that everything is life-sized and in your control.

To be honest, a lot of it really does work. Every surface in the game is climbable (by physically grabbing surfaces with the controllers and then doing the arm-work to scale) but more central movements like turning and moving are left to buttons, a technique that ultimately isn’t for the faint of stomach but is a lot more fluid than teleporting around. There are certainly mechanics which could have felt smoother, but this is a private beta game with a lot of room to finesse.

One of the really powerful things about the game was what happened after I was repeatedly sniped and killed off early on in the first couple rounds. The spectator mode is great and it’s interesting how much the precise controls of VR lend to allowing you to get more actively enveloped in matches that you aren’t even competing in. There are companies in the VR space working exclusively on this, but for a gaming audience obsessed with streamers, adapting traditional games with a VR spectating workflow or doing so natively seems like a huge opportunity.

Battle royale games remain white-hot, and VR game studios have been trying to find the right way to get a slice of the pie. Perhaps the key is knowing where to innovate while also realizing that the multi-platform grandiose of Fortnite has yet to find its way to VR, so maybe finding a title that scratches that itch is the best place to start.

Source: Tech Crunch

Mary Meeker, who revealed in September plans to leave Kleiner Perkins after an eight-year run with the venture firm, is reportedly looking to raise up to $1.25 billion for her debut fund. So says Business Insider, citing multiple sources.

We’ve reached out to Meeker for more information.

As Meeker told Recode a couple of months ago, she is forming her own late-stage investing firm with three of her KP colleagues, including Mood Rowghani, who joined the firm as a general partner in 2014; Noah Knauf, who joined the firm as a general partner in 2016; and Juliet de Baubigny, a senior partner who joined Kleiner Perkins nearly 18 years ago.

Their departures come as Kleiner Perkins was weighing whether or not to raise another growth fund, according to Recode’s report. It suggested that over time, a cultural misfit between Kleiner’s early and later-stage groups became more pronounced — though the final decision to split off happened abruptly.

In the short term at least, the move seems a blow for Kleiner, which has brought on star investors to help lead its early-stage practice — Mamoon Hamid, formerly of Social Capital, and Ilya Fushman, formerly of Index Ventures — but which suddenly has no women in its senior ranks.

Months before Meeker disclosed that she was leaving with de Baubigny, another longtime general partner, Beth Seidenberg, was learned to be co-founding her own venture outfit. Seidenberg has since closed her debut fund.

More newly, as we reported a couple of weeks ago, Lynne Chou-O’Keefe, who has spent the last five-plus years investing in healthcare on behalf of the firm, is raising her own debut fund. According to an SEC filing, the firm is called Define Ventures, and it has already locked down $50 million in capital commitments from a handful of investors.

Not every venture firm has senior women at the top of the org chart, but for Kleiner, the male-heavy line-up is a bit more glaring, given that it was sued in 2012 for gender discrimination by former partner Ellen Pao.

Pao famously lost her case against the firm in 2015, but the drawn-out episode kept a harsh spotlight on Kleiner Perkins for several years, during which questions about succession and equality were frequently raised by outsiders, and numerous of its partners left. Among these is Aileen Lee, who formed Cowboy Ventures; Matt Murphy, who joined Menlo Ventures; Trae Vassallo, who formed Defy Partners; Chi-Hua Chien, who formed Goodwater Capital; and Ben Kortlang, Brook Porter, Daniel Oros and David Mount, who formed the venture firm G2VP.

Meeker — who before joining Kleiner had risen through the ranks of Morgan Stanley over 19 years, becoming the head of its global technology research practice — supported the firm throughout Pao’s trial, testifying that she had not experienced discrimination at Kleiner.

At the time, she called the firm the “best place to be a woman in the business.”

Meeker appeared to have an especially close relationship with Kleiner Perkins’s most famous investor, John Doerr, who recruited her personally and who stepped down from his day-to-day management of the firm in 2016.

If Meeker and company succeed in reaching, or surpassing, a target of $1.25 billion for their new effort — and in the current environment, it’s easy to imagine they will — their firm will immediately be among the biggest women-led investment firms in terms of assets under management.

The amount wouldn’t be materially different for Meeker’s team, however. Kleiner raised its last growth fund in 2016, closing on $1 billion. Meeker, Rowghani, Knauf and Ted Schlein, who has been a managing partner at Kleiner for decades, had been overseeing that vehicle together.

Kleiner had also raised its seventh and most recent early-stage fund in 2016, closing it with $400 million in capital commitments.

Source: Tech Crunch

Upstart launch provider Rocket Lab aims to finally launch its first fully commercial payload to orbit this weekend after months of delays. The small Electron rocket will take six satellites from four companies to orbit as early as tomorrow evening Pacific time — Sunday afternoon at the company’s launch site in New Zealand.

“It’s Business Time,” as this launch is called, in honor of being the first to carry a full load of paying customers, was originally scheduled for this last spring, but small technical glitches have repeatedly delayed operations. Things are looking good for the 11th, though, and the window lasts until the 19th in case there’s inclement weather.

The rocket will be carrying two satellites for Spire’s earth-monitoring constellation, two for Fleet’s space-based smart devices grid, one for GeoOptics, and one for the city of Irvine’s CubeSat STEM program.

This last item is of particular interest; the satellite was built by high school students from the Irvine area. Can’t say I ever had a school project quite that cool. The smallsat will be sending various measurements and observations back to the students from low earth orbit.

Not only that, but IRVINE01 is also the first satellite that will have Accion Systems’ electrospray thrust modules, tiny modular things that are highly efficient and perfect for small craft. I’ve had the pleasure of talking to Accion founder (and designer of the thruster) Natalya Bailey and I’m sure she’s excited to see her creation taking flight.

It’s a big first for lots of people and a successful launch would help propel Rocket Lab towards its goal of super-frequent small payload deliveries like this one.

Keep an eye on Rocket Lab’s Twitter account for updates such as an adjusted launch time. I’ll update this post when the live stream is up!

Source: Tech Crunch

Hackers siphoned off thousands of Healthcare.gov applications by breaking into the accounts of brokers and agents tasked with helping customers sign up for healthcare plans.

The Centers for Medicare and Medicaid Services (CMS) said in a post buried on its website that found that the hackers obtained “inappropriate access” to a number of broker and agent accounts, which “engaged in excessive searching” of the government’s healthcare marketplace systems.

CMS didn’t say how the attackers gained access to the accounts, but said it shut off the affected accounts “immediately.”

In a letter sent to affected customers this week (and buried on the Healthcare.gov website), CMS disclosed that sensitive personal data — including partial Social Security numbers, immigration status and some tax information — may have been taken.

According to the letter, the data included:

• Name, date of birth, address, sex, and the last four digits of the Social Security number (SSN), if SSN was provided on the application;
• Other information provided on the application, including expected income, tax filing status, family relationships, whether the applicant is a citizen or an immigrant, immigration document types and numbers, employer name, whether the applicant was pregnant, and whether the applicant already had health insurance;
• Information provided by other federal agencies and data sources to confirm the information provided on the application, and whether the Marketplace asked the applicant for documents or explanations;
• The results of the application, including whether the applicant was eligible to enroll in a qualified health plan (QHP), and if eligible, the tax credit amount; and
• If the applicant enrolled, the name of the insurance plan, the premium, and dates of coverage.

But the government said that no bank account information — including credit card numbers, or diagnostic and treatment information was taken.

“Breaches that include personally identifiable information are always dangerous because they can lead to identity theft,” Andrew Blaich, Head of Device Intelligence at Lookout. “Not only can the attacker steal the identity of anyone in the breach, but they can also use this information to appear credible when crafting mobile spear-phishing messages against their targets.”

“This is especially true if the data that was leaked is accurate, as health information, family relationships and insurance information can make it extremely easy for an attacker to steal the identity of anyone affected by the breach,” he said.

President Obama’s healthcare law, the Affordable Care Act — known as “Obamacare” — allows Americans to obtain health insurance if they are not already covered. In order to sign up for healthcare plans, customers have to submit sensitive data. Some 11.8 million people signed up for coverage for 2018.

CMS previously said that the breach affected 75,000 individuals, but a person familiar with the investigation said that the number is expected to change. The stolen files also included data on children.

A spokesperson said CMS is expected to give an update early next week at the latest.

Healthcare.gov’s enrollment period is set to close on December 15.

Source: Tech Crunch

Amazon has signed a new deal with Apple that will allow the retailer to increase the selection of Apple products on its site, according to a report from CNET, which Amazon also confirmed. The deal will give Apple-authorized resellers the ability to sell a wide range of devices on Amazon — including Apple’s recently launched iPad Pro, iPhone XS and XR, and Apple Watch Series 4, in addition to Beats headphones.

Previously, these products were only available through Amazon’s third-party marketplace sellers at various price points, or not available at all, CNET noted.

Amazon confirmed the deal to TechCrunch in a statement.

“Amazon is constantly working to enhance the customer experience, and one of the ways we do this is by increasing selection of the products we know customers want,” an Amazon spokesperson said. “We look forward to expanding our assortment of Apple and Beats products globally.”

Apple, so far, has not responded to a request for comment.

CNET said the deal will impact the U.S., U.K., France, Germany, Italy, Spain, Japan and India.

The deal will also see Amazon removing the listings of Apple products from independent sellers, the report said.

The expansion is not surprising. Apple already allows Amazon to sell some of its devices, including MacBook laptops and Beats headphones.

The companies had been fierce rivals for years, but have been working together more amicably in recent months.

Before, the two had a number of issues between them. Notably, Amazon had stopped allowing the sale of Apple TV on its site, in order to promote its competing product, Fire TV. But Apple CEO Tim Cook announced at WWDC 2017 that Apple and Amazon had come to an agreement, which would also allow Amazon’s Prime Video app to arrive on Apple TV.

The Apple TV also later returned to Amazon. This year, Amazon launched a version of its FreeTime Unlimited service for Apple’s iOS devices, as well.

However, there is one notable exception to the new agreement: Amazon won’t sell Apple’s HomePod.

The HomePod competes with Amazon’s Echo smart speakers, which is a growing opportunity in terms of Amazon’s entry into voice computing and virtual assistants. The retailer also doesn’t sell Google Home speakers at this time.

Source: Tech Crunch

The worm has turned, it seems. Emulators, which let people run old console games on their computers, were once the scourge of the gaming industry. Now Sony is using one of the very pieces of software the industry decried as the basis for its PlayStation Classic retro console.

In the licenses list for the console can be found PCSX ReArmed, as Kotaku noticed in its review yesterday. That’s the ARM port of PCSX Reloaded, itself an offshoot of the original PCSX emulator, which ceased development in 2003.

Don’t worry, it’s not a crime or anything: Sony is well within its rights to do this. It’s just ironic, and indicative of the hard work emulator developers have done for over two decades, that a tool most famously (though by no means exclusively) used for piracy is being deployed officially like this. PCSX and its derivatives are open source under GPL.

It’s a huge vindication of these rogue developers, as you might call them, whose software based on reverse-engineering the proprietary systems of major companies has grown to be not just useful but the best option for running these old games — as chosen by Sony itself! Gaming historian Frank Cifaldi has an interesting thread about why this is so mind-blowing for some of us.

It also makes sense to a certain extent: Sony would have had to dedicate a non-trivial amount of resources to building an emulator from scratch, or (even more complex) rebuilding the PlayStation hardware in some fashion. Why not use a high-quality, open-source emulator with years of active development and testing?

Not every company has made that same choice, though: Nintendo, for its NES and SNES Classic mini-consoles, developed its own emulators, as it did before for Virtual Console (and indeed inside Animal Crossing on GameCube). But even then, those devices run on a custom Linux build, which of course uses a similar open-source license. So one way or the other the gaming world is finding itself in bed with the open-source community.

It’s true that the emulators themselves were never really illegal — unless they used some proprietary code or something. It was always the ROMs themselves, copies of games, that companies fought hardest against. But emulators have always lived in a sort of grey area, even if few actions were taken against them. The last few years have seen a resurgence in interest for retro games and a willingness to pay for them, but if emulators hadn’t been letting us do that for free for decades, there’s a good chance that many of these games would have been forgotten.

Source: Tech Crunch

The tech scene in São Paulo is an absolute delight, and we’re honored to have seen such an amazing turnout at the Startup Battlefield Latin America.

In case you missed it, we’ve put together a little recap of the event below.

Editor’s Note: We will embed videos from the event as soon as they’re available.

A China Twist to Brazil’s Mobility Revolution

Featuring Ariel Lambrecht (Yellow), Eduardo Musa (Yellow), Tony Qiu (Didi Chuxing), Hans Tung (GGV)

Mobility is a massive challenge for megacities around the world, including Sao Paulo. The first panel of the event featured notable founders and investors attempting to solve this problem in Brazil and throughout Latin America.

Eduardo Musa is the cofounder and CEO of Yellow and was joined on stage by his cofounder Ariel Lambrecht. Lambrecht also founded the mobility company 99, which is the only startup worth more than 1 billion USD in Brazil. Didi Chuxing recently invested and purchased 99, and current CEO and former investor Tony Qiu sat on the panel as well. Lastly, Hans Tung, managing partner at the Silicon Valley firm GGV and lead investor on 99’s latest round, joined the group. The panel was moderated by TechCrunch’s Managing Editor, Matt Burns.

Both Musa and Qiu acknowledged the crisis facing the Brazilian market and noted parallels with the Chinese market. Both markets have megacities with a diverse population, and there are countless opportunities for startups to address.

Throughout the panel, it was noted that Brazilian startups face several obstacles including finding enough talent and investment. The panelists agreed that often companies in Brazil are looking to Silicon Valley for both. For hiring, they said, there are not enough engineers locally, and to obtain funding, it’s best to show growth to local investors and the look tow Silicon Valley for additional investors.

Fireside Chat

Featuring Cristina Junquiera (Nubank) and David Velez (Nubank)

Any kind of partnership with a global internet giant is a big win for a startup. Nubank co-founders David Velez and Cristina Junquiera took the stage at Startup Battlefield Latin America to discuss Tencent’s $180M investment into their Sao Paulo-based digital banking company. Nubank is has raised over $700M from hard hitting investors like DST and Sequoia, valuing the company at over $4B, so it’s not about the money. While the invest to buy strategy is common for Chinese internet giants, Velez says that isn’t the goal for Nubank.

The founders are focused on the 20 million customers who have already applied for their credit card, and building culture from the ground up. There’s a lot wrong with Brazilian banks, and Nubank is taking a customer-focused approach to provide its digital banking service for Brazil’s huge population. When you’re one of the most successful companies in a region, you feel a responsibility to give back to the ecosystem. The best way to do that, say Velez and Junquiera, is to set an example of success.

Venture Investing In Latin America Today

Featuring Eric Acher (Monashees), Veronica Allende Serra (Innova Capital Consultoria Ltda), Hernan Kazah (Kaszek), Fernando Lelo de Larrea (ALLVP)

Latin American startup companies have hit an inflection point. No longer an afterthought for global investment firms the region is on pace to surpass $1 billion in committed capital for the second year in a row.

Driving that growth, according to investors Eric Acher, the co-founder of Monashees; Veronica Allende Serra, the founder of Innova Capital; Hernan Kazah of Kaszek Ventures and Fernando Lelo de Larrea of ALL VP; is a rash of exits like the public offering for the payment technology provider Stone and the sale of ride-hailing company, 99, to the Chinese global giant mobility company, DiDi.

Yet, as the market grows, entrepreneurs need to consider the partners they’re bringing on board as the aim for international growth. And while Brazil leads the pack in terms of committed capital — grabbing 73% of the total money invested in the region in the first half of the year — Argentina, Colombia, Mexico, Peru and Chile are all emerging as important capital markets in their own right.

20 Years Ahead of the Curve

Featuring Fabricio Bloisi (Movile)

For Fabricio Bloisi, the journey to building a multi-billion dollar company in Movile wasn’t always easy. Building a business requires making tough decisions along the way and a commitment to constantly churning through ideas.

Over the first ten years of its existence, Movile struggled as a smaller content provider. It was once the company agreed to consolidate and control more of the market that it began to grow, Bloisi said.

Now, businesses like iFood, which brought in over $100 million in revenue in the month of October alone, and new payment businesses like Zoop and its delivery and logistics companies, are contributing to a powerhouse that Bloisi thinks could be a $10 billion company in a few years.

Bloisi believes in the region, and the promise it holds for local and international investors to build more multi-billion dollar businesses. The future belongs to the entrepreneurs in the audience, Bloisi said. And if they can make the tough decisions (and get the right investment partners) they could find themselves on the TechCrunch stage.

New Wave Latin Founders

Ana Lu McLaren (Enjoie), David Arana (Konfio), Sebastian Mejia (Rappi), Juan Pablo Bruzzo

A vast majority of startup and investment activity across Latin America is coming out of Brazil. But that doesn’t mean entrepreneurship doesn’t thrive in other parts of the region. Rappi co-founder Sebastian Mejia, Konfio’s David Arana, Moni’s Juan Pablo Bruzzo and Ana McLaren from Enjoie discussed the challenges of launching and scaling an early stage tech company in this new wave founder discussion. Volatile economies, scarce technical talent, and undercapitalized markets aren’t so much challenges, but opportunities for these founders.

Logistics, fintech and ecommerce sectors are getting shaken up by these founders, and the foreign investment dollars are following. Rappi just raised a $200M round to grow its last-mile delivery service, but threats from foreign powerhouses like Uber threaten to eclipse market share. The landscape is more competitive than ever for founders, so expect to see big moves happening from startups launching out of the region.

Source: Tech Crunch