Chinese bike-sharing startup Ofo raises $866M in new financing led by Alibaba Group


Beijing-based bike-sharing startup Ofo has raised $866 million in new financing led by Alibaba Group to fuel its expensive competition with Mobike, which is backed by Tencent, one of Alibaba’s biggest rivals. Ofo and Mobike are the two largest bike-sharing companies in China.

Other participants in the round, which consists of equity and debt financing, included Ant Financial (Alibaba Group’s financial affiliate), Haofeng Group, Tianhe Capital and Junli Capital. Alibaba Group also led Ofo’s $700 million Series E round last year, which was announced one month after Mobike disclosed that it had received a $600 million Series E led by Tencent.

Both companies have reached valuations of more than a billion dollars and, combined, hold over 90{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} of China’s bike-sharing market (and are also expanding into other countries). Each are reportedly suffering from cash issues, however, due largely to the high cost of sustaining their fierce rivalry with one another, as well as dozens of other bike-sharing startups that emerged over the past few years. But the market could not sustain so many competitors and China’s “bike-sharing bubble,” which at one point numbered about 60 startups, began collapsing last year.

Casulties included Bluegogo, whose operations were partly taken over by Didi, China’s largest ride-sharing company, after the startup ran out of cash at the end of last year. Didi’s presence in the bike-sharing market is another headache for Ofo and Mobike. Didi offers various bike-sharing services through its app from partners including Ofo, but that doesn’t necessarily help them. As TechCrunch’s Jon Russell pointed out, that just means commuters use Didi’s app even more and don’t have to open or even bother installing any bike-sharing apps.

One solution would be for the two companies to merge, but Alibaba and Tencent are reportedly against the deal because each wants to gain control of China’s bike-sharing market.

Featured Image: mrfiza/Getty Images

Banking platform solarisBank closes €56.6M Series B from BBVA, Visa, Lakestar, and others


SolarisBank, the Berlin-based “banking platform” co-founded by fintech company builder Finleap, appears to be on quite a roll.

The company, which now claims nearly 60 corporate clients who offer various financial services powered by solarisBank, has closed €56.6 million in Series B funding in a round that includes a number of new strategic and financial investors.

Notably, they include Spanish banking giant BBVA — which only yesterday upped its investment in the U.K. challenger bank Atom — Visa, Lakestar, and ABN AMRO’s Digital Impact Fund (DIF). In addition, previous investors Arvato Financial Solutions, and SBI Group have increased their commitment, while I understand the Series B includes a small amount of secondary funding as a number of existing shareholders exit.

I’ve also learned that solarisBank’s Series B keeps Finleap as the leading shareholder, holding about 30 per cent. BBVA is now the second largest investor with all other investors below 10 per cent (incidentally, the co-founders of solarisBank, Finleap not included, are minority shareholders).

Founded in March 2016, solarisBank offers a Banking-as-a-Platform and holds a full banking license, meaning it provides both the technology and the banking rails needed to offer various banking and financial products, including the required regulatory mandate. In this sense, it’s a B2B2C play, letting other fintech startups and companies, or any corporate wanting to get into financial services, access the tools to do so, and, arguably, at a much lower cost and risk profile than going it alone and building from scratch.

Others in the BaaS space include the U.K.’s Railsbank directly, and to a lesser extent something liker challenger bank Starling which, aside from its own consumer current account, is building quite a compelling payment product, including serving other fintech startups.

To that end, solarisBank says it is active in seven countries, and expects to increase its customer base to over 100 corporate clients by the end of the year. The range of products the solarisBank platform can power is quite far reaching, having been designed as a series of modules. They broadly fall into three categories.

“Digital banking & cards,” which clients can use as a backbone to build retail or SME banking offerings (Penta is one such as example). “We have also gained interest from traditional banks to build a new digital subsidiary with us or retail or online companies, which would like to offer their customers an own bank account or payment card,” solarisBank CEO Dr. Roland Folz tells me. That has echoes of Amazon’s reported plans to offer a branded bank account.

Another is “Payments and E-Money,” which enables companies to offer gift cards, vouchers, P2P payments or cross-border payments via solarisBank’s fully digital Payment APIs. As an example, fashioncheque is offering a gift card that can be used to purchase fashion at various retailers.

Lastly, “Lending & Deposits” lets companies integrate consumer loans or SME loans directly into their own offerings. This is being used by online platforms, such as marketplaces for used cars as well as comparison portals, to introduce a credit product under their own brand (e.g. solarisBank’s recent partnership with smava).

Unicorns gorge as investors dish up bigger rounds, more capital


Is there a point when investors will turn off the spigots for giant unicorn funding rounds? If so, we haven’t reached that threshold yet.

Last year, investors put a record amount of capital into members of the Crunchbase Unicorn Leaderboard, a list of private venture-backed companies valued at more than $1 billion.

Globally, a staggering $66 billion went into unicorn companies in 2017, up 39 percent year-over-year, according to an analysis of Crunchbase data. The ride-hailing space was the single largest recipient of investor dollars, with several rivals in the space raising billions. Investors also poured copious sums into co-working, consumer internet and augmented reality.

Newcomers also joined the unicorn club for the first time in 2017, albeit at a slightly slower pace than the preceding two years. For all of 2017, 60 new startups were added to the unicorn list. This compares to 66 newly minted unicorns in 2016 and the record-setting 2015 with 99 newcomers.

Below, we break down the leading locations for new and existing unicorns, top sectors for investment capital, exits and a few other trends affecting the space.

Geographic breakdown

The vast majority of unicorns are headquartered in either the U.S. or China, and that’s also the case for newcomers to the Unicorn Leaderboard.

In 2017, both the U.S. and China continued to mint new unicorns at a steady clip. A total of 29 U.S. companies inked their first funding round at a valuation of a billion dollars or more, up from 22 the prior year. In China, 24 new unicorns joined the leaderboard, down from 32 in 2016. Europe and Southeast Asia, meanwhile, also contributed a few unicorns.

In the chart below, we look at new entrants, categorized by country:

The newcomers were a pretty diverse bunch, spanning industries from agtech to enterprise software, including no-cost stock buying platform Robinhood, online education provider VIPKID and cryptocurrency buying and selling platform Coinbase.

Sectors

Unicorn investors showed a particularly strong appetite, however, for companies in a handful of sectors.

Ridesharing, in particular, had a strong funding year, with companies in the space taking more than 10 percent of all unicorn investment. That was largely attributable to billion and multi-billion dollar rounds for Lyft, Grab, Ola and Didi Chuxing.

Bike-sharing was also big. Two new entrants onto the unicorn list came from that space: Ofo and Mobike. However, concerns arose later in the year over whether consumer demand could support the ballooning bike supply.

Other recipients of really substantial funding rounds, even by unicorn standards, include U.S. co-working giant WeWork and China-based consumer internet players Toutiao and Koubei.

Exiting the board

So a lot of unicorns are raising big rounds. But is there any sign members of the group will eventually produce returns for investors?

Overall, 2017 provided some modestly positive news for unicorn exit watchers. Fifteen venture-funded companies with private valuations of a billion dollars or more went public last year, more than double 2016 levels and the highest total since Crunchbase began tracking the asset class.

Acquisition activity, meanwhile, was weaker. There were just seven recorded M&A exits involving unicorns in 2017, down from 10 in 2016. AppDynamics was the highest-performing exit at 95 percent over its last private valuation. For the remaining companies that exited, all appear to have been below or at their last private valuation.

In the chart below, we look at IPO and M&A counts for unicorns over the past seven years:

Unicorn IPOs weren’t just more common in 2017. Performance was often quite good, too. Many of last year’s newly public companies sustained market caps far higher than their last private valuations. Top performers by this metric include several China-based unicorns, led by investment manager Qudian and search engine Sogou. Other standouts include gaming hardware provider Razer  and app developer software provider MuleSoft.

In the chart below, we look at some of the top performers based on the post-IPO percentage gains over their last private valuations:

Lately, going public seems to be a better option for investor returns. If the company goes out below its last private valuation, that multiple can improve if it grows its market and public shareholders boost the stock. For an M&A transaction, the price is set and either late-stage investors have built in protections or are losing money at those exit prices.

Averages point to more exits ahead

For the 45 unicorn companies that have gone public, the average time to go public has been 26 months after first being valued at $1 billion. For the 25 companies that have been acquired, the average time to get acquired is 24 months after first being valued at $1 billion.

So what does that say about the current crop of still-private companies? Because more than 150 companies out of 263 have been on the Unicorn Leaderboard for more than two years, we expect exits to increase, given the backlog.

Special thanks to Steven Rossi who manages the Crunchbase Unicorn Leaderboard.

Featured Image: Li-Anne Dias

Oxford University spin-out Bodle scores £6M Series A for its low-powered ‘reflective’ display tech


The battery life of wearables, IoT devices, and smartphones remains one of the tech industry’s biggest challenges and often a significant barrier to mainstream adoption. (I, for one, can’t think of anything more tedious than having to charge a watch every night). There are various ways to tackle this problem, from better power management software and more efficient chips, to incremental advances in battery life. But actually, considering that the biggest drain on battery life is usually a power hungry screen, why not tackle the problem at source?

Enter Bodle Technologies, a startup spun out of Oxford University, that is developing a new type of ‘reflective’ display technology that promises to use a lot less power. In fact, in some states the screen tech may require almost no power at all.

To help scale the nascent company and get to the prototype stage, Bodle has raised £6 million in Series A funding. Leading the round is Parkwalk Advisors, with participation from Woodford Patient Capital Trust, and returning backers Oxford Sciences Innovation and the Oxford Technology and Innovations EIS Fund (OTIF).

The company has previously received investment from the University of Oxford Innovation Fund, which is also managed by Parkwalk Advisors and was set up with the explicit aim to help commercialise viable IP developed by students and faculty at Oxford.

To that end, Bodle says its reflective display technology could have applications that include wearables, Internet-of-Things (IoT) displays and eReaders. In addition, should its development continue on the current trajectory, the technology could turn static printed materials, such as posters and packaging, into low-cost dynamic displays.

Here’s how the startup explains the “solid-state reflective display” (SRD) tech, which was invented by Professor Harish Bhaskaran and postdoctoral researcher Dr Peiman Hosseini at Oxford University’s Department of Materials:

Capable of use in both flexible and on-glass displays, the technology’s pixels simply reflect light, drastically reducing the power required to project an image and eliminating power requirements for a static image altogether. Colour in the image comes from a structural interference effect, whilst switching the refractive index of an ultrathin layer of phase change material generates the dynamic colour display. The materials are capable of a high enough refresh rate to deliver video. The technology has the additional benefits of being paper-thin, cost- effective, with strong performance in outdoor conditions and easier on the eyes compared to LCD and OLED-style screens.

The key aspect of a solid-state reflective display is that it isn’t back-lit. Instead, it’s a solid state screen that uses other sources of light (be it sun, electric room lighting, etc) to illuminate the screen. As it stands, the Bodle team are confident of a high enough resolution to display a HD video, while the main advantage is power usage: if you don’t need to backlight the screen, your battery lasts longer, meanwhile the drain from mains is minimal.

The bigger sell — and Bodle is still some way off to a commercial product — is that by drastically reducing the cost and power required, you can have screens of all shapes and sizes just about anywhere.

So, for example, it might be possible to put an SRD film over a mirror or a window to create a smart window/mirror. Applications for real-world display advertising are even more obvious. Or perhaps SRD could be used to add a second screen to a smartphone or its case that lets you use certain functions of your phone, such as reading (an idea that has been tried before with eInk technology).

AI voice assistant developer Rokid raises $100M Series B extension to build its US presence

Rokid founder and CEO Mingming Zhu

Rokid, a Chinese startup that makes an AI voice assistant and smart devices, just raised a Series B extension round led by Temasek Holdings, with participation from Credit Suisse, IDG Capital and CDIB Capital. The size of the round was not released, but a source familiar with the deal told TechCrunch that it is $100 million.

The company’s previous funding was its Series B round, which was announced in November 2016. Founder and chief executive officer Mingming Zhu says Rokid raised a Series B+ instead of a C round because the company, which is based in Hangzhou, China with research centers in Beijing and San Francisco that develop its proprietary natural language processing, image processing, face recognition and robotics technology, is still in its early stages. Rokid wants to focus on gathering more resources and bringing in strategic investors like Temasek Holdings before moving on to a Series C. An investment holding company owned by the Singaporean government, Temasek Holdings counts artificial intelligence and robotics among its main investment areas and its other portfolio companies include Magic Leap.

Rokid Glass

The company’s product lineup already includes smart speakers called Rokid Pebble and Alien, which are currently sold in China. During CES, Rokid debuted its newest offering, Rokid Glass, augmented glasses created specifically for consumer use, as well as an open-source platform, called the Rokid Full Stack Open Platform. Created in partnership with Alibaba, the platform gives third-party hardware developers who use Rokid’s voice assistant access to free resources, including software blueprints and content for IoT devices. Rokid hopes that both will help build its name recognition and presence in the United States.

Reynold Wu, Rokid’s director of product management, describes the Full Stack Open Platform as a turnkey solution that not only gives developers access to Rokid’s AI technology, but also hardware solutions and services. Released with Aliyun, Alibaba’s cloud computing business, the cloud platform opened to third-party developers in China earlier this year, and will launch in the U.S. soon.

Rokid wants the platform to serve as a bridge between the two countries by giving U.S. developers an easy way to enter the Chinese market and also encouraging the development of more content for devices running Rokid’s technology, which founder and chief executive officer Mingming Zhu says is vital to attracting consumers.

“AI products are born to be global, not just for local market,” explains Zhu. “The only issue for Rokid is that we’re not ready for the U.S. market because the most important thing is content and we are not ready if there is only local content or services.”

The Pebble and Alien will be up against Google Home and Amazon Echo, which have become almost synonymous with “smart speaker” in the minds of many consumers, while Rokid Glass will inevitably be compared to Google Glass. The success of the Pebble and Alien hinge not only on how well users think Rokid’s voice assistant compares to Google Assistant and Amazon Alexa, but also the library of content and apps that the startup is able to build for its smart speakers.

While Google Glass flopped among consumers, but saw more success as an enterprise device. Rokid hopes its smart glasses, which run on its proprietary AI voice and imaging algorithms, will be able to succeed where Google Glass wasn’t because it was designed specifically for consumer applications. Early reviews from CES say the Rokid Glass is promising and praised features like face recognition, but said it still needs work to become more responsive. Once it goes on sale, the Rokid Glass will compete with smart glasses from Vuxiz, Sony and Epson. Its price hasn’t been revealed yet, but Zhu says it will be sold at a consumer-friendlier price point than its competitors (many augmented reality smart glasses from Rokid’s rivals are currently priced in the range of $600 to $1,500).

“I think we are the only product that is really consumer-centric in not only design and weight, but also energy use,” says Wu. “A lot of players design for the enterprise market first and then try consumer opportunities, but we have developed consumer products over the past three years. All of them have entered the market successfully and we have users because of that, so we have confidence in our consumer products.”

Featured Image: Rokid