Venture Capital Deals Of The Week: Ant Financial Gets $14B Ahead Of IPO

by: VCDeals

Welcome to Seeking Alpha’s Venture Capital Deals of the Week. Follow this account and turn on the e-mail alert to receive VCDeals in your inbox on Saturday mornings.

Largest single fundraiser ever: Alibaba’s (NYSE:BABA) Ant Financial raised $14B, the largest single fundraiser for a private company. Investors included T. Rowe Price (NASDAQ:TROW), Warburg Pincus, GIC, Silver Lake, Temasek, and The Carlyle Group, to name a few. The round included an RMB tranche for Chinese investors and a US dollar tranche for others. Ant’s valuation now reportedly stands at $150B.

In February, Alibaba announced its plan to purchase a 33% stake in Ant, which it spun out in 2011. Ant posted a 65% increase in pretax profit in FY18. Ant Financial is expected to head for an IPO in Hong Kong and mainland China, though the company hasn’t set a timetable or chosen a stock exchange.

Competition: Tencent (OTCPK:TCEHY, OTCPK:TCTZF) operates WeChat Pay and (NASDAQ:JD) is also an Alibaba competitor. The WSJ reported that Ant Financial investors have to promise not to invest in or increase their stakes in its competitors.

Low-code development platform: Goldman Sachs (NYSE:GS) participated in a $360M round for low-code rapid app development company OutSystems. KKR also participated through its Next Generation Technology Growth Fund. The round brought total funding up to $422.1M and the valuation reportedly into unicorn territory.

OutSystems makes it faster and easier to develop an app once and deploys it across iOS, Android, and the web. The company boasts over 400 enterprise customers in 25 countries with the client list including Toyota, Logitech, and GM Financial. OutSystems has offices in Atlanta, London, and Lisbon.

Competition: Mendix ($38M in funding, Prime Ventures and Battery Ventures among backers), Appian (NASDAQ:APPN), Microsoft’s (NASDAQ:MSFT) PowerApps, and Salesforce (NYSE:CRM) App Cloud, to name a few.

Scooter-share: Axios reported that GV (GOOG, GOOGL) led a $250M round in bike- and scooter-sharing startup Lime. The deal isn’t closed yet so size could still change. Other participants include Coatue Management and Andreessen Horowitz. Total funding now adds up to $382M.

Lime says users have take 4.2M rides, 1M of those occurring between May 5 and May 27. An Axios source said Lime scooters are used between 8 and 12 times a day. Lime was previously seeking up to $500M in funding, but that’s likely on hold with the new infusion.

Competition: Bird is raising $150M led by Sequoia Capital with a filing showing that Bird has authorized up to $200M in Series C shares.

Clinical trial matching: Recode reported that SoftBank’s (OTCPK:SFTBF, OTCPK:SFTBY) Vision Fund was in talks to lead a $150M round in Science 37, a company that matches clinical trials to potential participants. A source put Science 37’s valuation at about $300M before the investment. The company last raised $200M in April 2017. Previous backers have included Lux Capital and GV.

Science 37 says its advantage lays in allowing participants to participate from home. The company says geographic inaccessibility, “lack of patient awareness and trust,” and site visit inconvenience are “the reasons why 80 percent of all clinical trials are delayed and fewer than 3 percent of eligible patients are able to volunteer to participate.”

Competition: Legacy contract research organizations (CROs) like Iqvia (NYSE:IQV) and Charles River Laboratories (NYSE:CRL).

Chinese used cars: Autohome (NYSE:ATHM) invested $100M in Chinese used car auction company Tiantianpaiche. Autohome also gained the right to invest as much as $65M in convertible notes in Tiantianpaiche in the next three years after the completion of the original investment. Total fundraising now stands at $353M.

Tiantianpaiche facilitates customer-to-business used car sales and has over 40 offline shops located in Beijing, Guangzhou, and Shanghai. Tiantianpaiche expects transaction volume to reach 1M vehicles annually in 2020. The company plans to use the new funds for business expansion to more Chinese cities and to develop new businesses including financing services and used car retail.

Competition: C2B used car auction platform Chezhibao raised a $125M Series D round the day before Tiantianpaiche’s announcement.

Hybrid cloud storage: Goldman Sachs and Western Digital (NYSE:WDC) participated in a $93M round for hybrid cloud file storage company Qumulo. The round brought total funding up to $230M. BlackRock Private Equity led the round with follow-on participation from existing investors Highland Capital Partners, KPCB, Madrona Venture Group, and Valhalla Partners.

Qumulo makes hardware and software for enterprise customers like DreamWorks Studios and Sinclair Oil that need file-storage products. The Qumulo File Fabric product makes it cost-efficient to scale billions of files. The startup partners with Hewlett Packard Enterprise (NYSE:HPE) to sell its software on HPE hardware and offers a version of File Fabric on Amazon Web Services. Qumulo plans to launch File Fabric for Google Cloud and Microsoft Azure in the future.

Competition: Other distributed file systems and object storage companies include NetApp (NASDAQ:NTAP), Dell (NYSE:DVMT), and IBM (NYSE:IBM).

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.