A compilation of important news from the startup world:
Mega rounds into Chinese startups propel Asia fintech funding to record highs of $4.9b in Q1
China is expected to dominate the fintech scene yet again in the second quarter with Alibaba Group‘s Ant Financial having closed $4.5 billion funding in April. In Southeast Asia, marketplace lending platforms have proved attractive to investors mainly due to their ability to provide financing for small businesses and the the under-banked strata. Regional governments are therefore looking to support fintech innovators and investors. Over the next few quarters, fintech will likely become a more dominant player in the Venture Capital market globally. While the trend might be a decline in total global VC investment due to ongoing market pressures, fintech will most likely remain resilient – taking a bigger share of total VC investment over tim
Temasek sees no sharp rebound in global startup valuations
Lured by a potential market for app-based, on-demand and logistics-heavy businesses, venture capitalists and others have thrown billions of dollars to startups that often need only cash and a working app to enter the fray. Temasek, which manages a portfolio worth S$266 billion ($193 billion), has invested in several startups including India’s restaurant search and food delivery service Zomato and online marketplace Snapdeal, as well as Chinese ride-hailing firm Didi Chuxing. Global funding to venture capital-backed firms dropped 8 percent to $25.5 billion in the first three months of this year, after slumping nearly 30 percent in the fourth quarter from the previous quarter, according to a KPMG and CB Insights report.
A Kenyan startup is showing global businesses how to talk to their customers
A florist chain in Argentina, a food delivery service in Hong Kong, and a Singaporean travel agency—these are a few of the companies relying on a Kenyan startup to help them talk to their customers on WhatsApp, WeChat, and other messaging apps. Ongair, a Nairobi-based startup, says instant messaging could and should replace the traditional channels of customer service—frustrating phone calls, inefficient e-mail exchanges, online chats that don’t work well on a smartphone, or SMS messages that costs businesses per text. Ongair helps companies use those apps for customer service by aggregating messages from the various platforms into one dashboard. Ongair is targeting businesses, and mainly those outside of Kenya in Asia and South America. The company is challenging the idea that African startups should focus on solving problems at home first.
IPO Hurdles Hurt Tech Startup Valuations
The Chinese government was signaling new openness to startups going public domestically—something it had long made difficult—while those tech stocks that were already listed in China had been among the best performers in a stock-market boom in the first half of 2015. A year later, many entrepreneurs and investors say they fear that the welcome mat has been rolled back up. Stock-market tumult in the second half of last year, along with the replacement of China’s top securities official, appear to have derailed expected changes that could make it easier for tech companies to list at home, leaving many startups fumbling for other options to cash out investments.
Here’s How Much Less VCs Dole Out to Startups Founded by Women
Venture capital is the lifeblood of any startup, and female tech entrepreneurs raise significantly less of it than men. U.S. companies founded by women pulled in an average of $77 million compared with $100 million raised by men, according to a Bloomberg analysis. The discrepancy is slightly worse than the national pay gap between the genders: an average of 79 cents earned by women for every dollar made by men, according to a 2015 U.S. Census Bureau report. The lack of women in technology and venture capital has become a flash point in recent years and prompted soul-searching and incremental change.
Uber Gains A Major Ally With Toyota Partnership
Toyota just made a major investment in Uber, joining the group of big-name automakers entering into the ride-sharing market. Toyota announced the partnership Tuesday. The automaker will allow Uber drivers to lease Toyota vehicles with a “flexible” leasing period, and drivers can use their earnings from Uber to cover payments. The partnership gives Toyota a foothold in the growing ride-sharing industry, and Uber gets a major ally against competitors. The startup is already the largest ride-sharing company out there right now. And Didi, a Chinese ride-sharing service, gained a powerful ally with a $1 billion investment from Apple
Meet the latest cohort of Acceleprise startups, and the apps they built to make work easier
Acceleprise, a San Francisco-based accelerator for enterprise tech and software-as-a-service startups, held a Demo Day for its third cohort of companies today. The accelerator invests $50,000 into each startup admitted to its program via convertible note financing, taking approximately a 5 percent stake under a $1 million cap. Venture investors with institutional firms that do early-stage deals now want to see software-as-a-service startups making $1.5 million in annual recurring revenue with significant traction in their respective markets before they will sign a term sheet.
Chinese tech firms get more funding in Q1
Funding in Chinese financial technology companies accounted for nearly half of the overall fintech funding across the globe in the first quarter, primarily as a result of funding rounds to JD Finance and Lu.com which both succeeded US$1 billion, a latest report says. Investors are putting money into fintech companies all over the world, ranging from traditional strongholds of China, the US and the UK to up and coming fintech hubs like Singapore, Australia and Ireland. Funding figures in the second quarter this year is also expected to stay at a high following the announcement of the US$4.5 billion funding round of Alibaba’s financial affiliate Ant Financial, which closed in April.
Singapore’s vision for supporting tech innovation encourages team diversity
The small nation is trying to serve all age groups. The government, through a new education program, starts by teaching pre-schoolers sequencing skills, through simple, fun games, so that they can be ready to learn software coding as they grow older. At the other end of the age spectrum, it is testing the use of robots to help elderly folks at a neighborhood drop-in center do simple exercises. In between, the government has encouraged the use of robots at Changi General Hospital, a major facility with 1,000 beds, to deliver medicines and supplies to patient rooms. Telepresence is being introduced to coach physical therapy patients so a caregiver isn’t needed to take the patients somewhere for treatment. People from families originally from Malaysia, China and India, among others, work together at all kinds of jobs and can be seen walking to work and riding the subways together
Owing to funding crunch, many startups are going to get swallowed by big fishes this year
Many startups, especially tech-based firms, are going to merge with the sharks in the industry and the number is going to break all past records. As per data tracker Venture Intelligence, the mergers and acquisitions in tech startups more than doubled to 146 transactions in the fiscal year ended March 31from 69 in 2014-15. The primary reason behind this is funding crunch. Many startups that started on vision are now aiming to be profit making firms.
Battery Startup Stem Just Raised Money from Peter Thiel’s Mithril
On Wednesday, battery startup Stem announced that it has raised a new round of $15 million, led by Mithril Capital Management, a fund co-founded by Thiel and Ajay Royan to invest in tech startups that are growing quickly. Mithril is reportedly out raising a second fund of $600 million. With this battery tech, Stem’s customers like Wells Fargo WFC 0.14% , Safeway SFY 0.00% , Whole Foods WFM 1.50% , and Reliance Steel RS 0.74% can lower their monthly energy costs significantly. Energy geeks call this type of battery application “behind the meter,” and it’s seeing growing interest from businesses with a lot of facilities and high energy costs. Stem will use the funds to grow its customer list. The company says its battery tech has been installed at 440 facilities in California and Hawaii.