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April 21, 2019
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BeliMobilGue raises $10M for its used-car sales platform in Indonesia

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BeliMobilGue, a used car sales platform in Indonesia, has fueled up with a $10 million Series round for the race to dominate the automotive market in Southeast Asia’s largest economy.

The company was started in 2017 as a joint venture between Europe’s Frontier Car Group (FCG) and Intudo Ventures, a VC firm focused on Indonesia. BeliMobilGue said today that the capital came from FCG and new investors, which include Tunas Toyota — the authorized dealership for Toyota cars in Indonesia.

It’s worth noting that FCG itself is a venture which, as the name sounds, develops on automotive ventures in emerging (frontier) markets in Latin America, Asia and Africa. Its investors include Naspers/OLX, Balderton Capital, TPG Growth and Partech Ventures.

This Series A round follows a $3.7 million round last year for BeliMobilGue — which means ‘buy my car’ in Indonesia’s Bahasa language.

BeliMobilGue is aimed at making it easy for car owners to sell their vehicle.

The first step is an online price estimation for vehicle. If the owner is happy with the valuation, BeliMobilGue takes the vehicles in and, after a one hour check attended in person by its testers, it arranges a sale to its network of over 1,000 dealers and private buyers. The entire process is targeted at one hour and is free for consumers, BeliMobilGue CEO Rolf Monteiro told TechCrunch.

The company has 30 physical testing points across Jakarta, Indonesia’s capital city, and with this money in the bank it is targeting expansion to Java. By the end of this year, Monteiro forecasts that the number of physical stations will have passed 100.

Another target for this year is ancillary services. BeliMobilGue is focused on enabling dealers, many of whom are often small businesses rather than nationwide chains, to growth with its service so it is offering financial packages financed by a third-party bank.

“The difference between small and large dealerships is their access to capital,” Monteiro explained in an interview. “We are a little bit more comfortable [than a bank] to extend their finance because we’re not just using data, we’re sitting on that dealer relationship.

“Plus we are sitting on cars, so we are financing cars that come from our platform and [if necessary] we can help offload the car for the dealer,” he added.

BeliMobilGue aims to sell vehicles within an hour, that includes a comprehensive inspection that’s carried out by its staff and covers 300 points.

BeliMobilGue is far from alone in going after Indonesia, which is the world’s fourth most populous country and the cornerstone of most digital strategies for the region. An annual report from Google and Temasek forecasts that Indonesia’s online economy will grow to $100 billion by 2025 from $8 billion in 2015. Southeast Asia as a whole is predicted to reach $240 billion, which is telling of the significance of Indonesia.

With that in mind, regional rivals have doubled down on Indonesia.

Carro has raised $78 million to date — including a $60 million Series B last year — while Carsome has $27 million and iCar Asia, from venture builder Catcha, has pulled in $39 million to date.

Each of that trio serves multiple markets across the region, not Indonesia exclusively, which is where Monteiro believes he can find an advantage. While he admitted that BeliMobilGue could have raised more money — it stuck to finding ‘smart money’ over amassing pools of cash, he said — he sees the existance of competition as win-win for the industry.

“Indonesia is a massive market,” he said. “Whether it is us, Carro or Carsome, the competition helps educate the market and it will get us new business. But, as much as I welcome them, I want that dominant position.”

Adding strategic investors like Tunas Toyota is, Monteiro believes another key differentiator.

“An investor like Tunas has 25-30 years of experience, so, for us, this partnership is golden. We’re quite content with the round and how it played out,” he said.

News Source = techcrunch.com

Sophia Genetics bags $77M Series E, with 850+ hospitals signed up to its “data-driven medicine”

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Another sizeable cash injection for big data biotech: Sophia Genetics has announced a $77M Series E funding round, bringing its total raised to $140M since the business was founded back in 2011.

The company, which applies AI to DNA sequencing to enable what it dubs “data-driven medicine”, last closed a $30M Series D in fall 2017.

The Series E was led by Generation Investment Management . Also investing: European private equity firm, Idinvest Partners. Existing investors, including Balderton Capital and Alychlo, also participated in the round.

When we last spoke to Sophia Genetics it had around 350 hospitals linked via its SaaS platform, and was then adding around 10 new hospitals per month.

Now it says its Sophia AI platform is being used by more than 850 hospitals across 77 countries, and it claims to have supported the diagnosis of more than 300,000 patients.

The basic idea is to improve diagnoses by enabling closer collaboration and knowledge sharing between hospitals via the Sophia AI platform, with an initial focus on oncology, hereditary cancer, metabolic disorders, pediatrics and cardiology. 

Expert (human) insights across the network of hospital users are used to collectively enhance genomic diagnostics, and push towards predictive analysis, by feeding and training AI algorithms intended to enhance the reading and analysis of DNA sequencing data.

Sophia Genetics describes its approach as the “democratization” of DNA sequencing expertise.

Commenting on the Series E in a statement, Lilly Wollman, co-head of Generation’s growth equity team said: “We believe that leveraging genetic sequencing and advanced digital analysis will enable a more sustainable healthcare system. Sophia Genetics is a leader in the preventive and personalized medicine revolution, enabling the development of targeted therapeutics, thereby vastly improving health outcomes. We admire Sophia Genetics not just for its differentiated analytics capability across genomic and radiomic data, but also for its exceptional team and culture”.

The new funding will be put towards further expanding the number of hospitals using Sophia Genetics’ technology, and also on growing its headcount with a plan to ramp up hiring in the US especially.

The Swiss-founded firm is now co-based in Lausanne and Boston, US.

In another recent development the company added radiomics capabilities to its platform last year, allowing for what it describes as “a prediction of the evolution of a tumour”, which it suggests can help inform a physician’s choice of treatment for the patient.

News Source = techcrunch.com

Contentful raises $33.5M for its headless CMS platform

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Contentful, a Berlin- and San Francisco-based startup that provides content management infrastructure for companies like Spotify, Nike, Lyft and others, today announced that it has raised a $33.5 million Series D funding round led by Sapphire Ventures, with participation from OMERS Ventures and Salesforce Ventures, as well as existing investors General Catalyst, Benchmark, Balderton Capital and Hercules. In total, the company has now raised $78.3 million.

It’s only been less than a year since the company raised its Series C round and as Contentful co-founder and CEO Sascha Konietzke told me, the company didn’t really need to raise right now. “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now,” said Konietzke. “But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge. And at the same time, we already had some interesting conversations ongoing with Sapphire [formeraly SAP Ventures] and Salesforce. So we saw the opportunity to add more funding and also start getting into a tight relationship with both of these players.”

The original plan for Contentful was to focus almost explicitly on mobile. As it turns out, though, the company’s customers also wanted to use the service to handle its web-based applications and these days, Contentful happily supports both. “What we’re seeing is that everything is becoming an application,” he told me. “We started with native mobile application, but even the websites nowadays are often an application.”

In its early days, Contentful also focuses only on developers. Now, however, that’s changing and having these connections to large enterprise players like SAP and Salesforce surely isn’t going to hurt the company as it looks to bring on larger enterprise accounts.

Currently, the company’s focus is very much on Europe and North America, which account for about 80% of its customers. For now, Contentful plans to continue to focus on these regions, though it obviously supports customers anywhere in the world.

Contentful only exists as a hosted platform. As of now, the company doesn’t have any plans for offering a self-hosted version, though Konietzke noted that he does occasionally get requests for this.

What the company is planning to do in the near future, though, is to enable more integrations with existing enterprise tools. “Customers are asking for deeper integrations into their enterprise stack,” Konietzke said. “And that’s what we’re beginning to focus on and where we’re building a lot of capabilities around that.” In addition, support for GraphQL and an expanded rich text editing experience is coming up. The company also recently launched a new editing experience.

News Source = techcrunch.com

The war over music copyrights

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VC firms haven’t been the only ones raising hundreds of millions of dollars to invest in a booming market. After 15+ years of being the last industry anyone wanted to invest in, the music industry is coming back, and money is flooding in to buy up the rights to popular songs.

As paid streaming subscriptions get mainstream adoption, the big music streaming services – namely Spotify, Apple Music, and Tencent Music, but also Pandora, Amazon Music, YouTube Music, Deezer, and others – have entered their prime. There are now over 51 million paid subscription accounts among music streaming services in the US. The music industry grew 8% last year globally to $17.3 billion, driven by a 41% increase in streaming revenue and 45% increase in paid streaming revenue.

The surge in music streaming means a surge in income for those who own the copyrights to songs, and the growth of entertainment in emerging markets, growing use in digital videos, and potential use of music in new content formats like VR only expand this further. Unsurprisingly, private equity firms, family offices, corporates, and pension funds want a piece of the action.

There are two general types of copyrights for a song: the publishing rights and the master rights. The musical composition of a song – the lyrics, melodies, etc. – comes from songwriters who own the publishing right (though generally they sign a publishing deal and their publisher gets ownership of it in addition to half the royalties). Meanwhile, the version of a song being performed comes from the recording artist who owns the master right (though usually they sign a record deal and the record label gets ownership of the masters and most of the royalties).

Popular songs are valuable to own because of all the royalties they collect: whenever the song is played on a streaming service, downloaded from iTunes, or covered on YouTube (a mechanical license), played over radio or in a grocery store (a performance license), played as soundtrack over a movie or TV show (a sync license), and for other uses. More royalty income from a song goes to the master owner since they took on more financial risk marketing it, but publishers collect royalties from some channels that master owners don’t (like radio play, for instance).

For a songwriter behind popular songs, these royalties form a predictable revenue stream that can amount to tens of thousands, hundreds of thousands, or even millions of dollars per year. Of course, most songs that are written or recorded don’t make any money: creating a track that breaks out in a crowded industry is hard. This scarcity – there are only so many thousands of popular musicians and a limited number of legendary artists whose music stays relevant for decades – means copyrights for successful musicians command a premium when they or their publisher decide to sell them.

Investing in streaming economics

In 2017, revenue from streaming services accounted for 38% of worldwide music industry revenue, finally overtaking revenue from traditional album sales and song downloads. Subscription streaming services hit a pivot point in gaining mainstream adoption, but they still have far to go. Goldman Sachs media sector analyst Lisa Yang predicted that by 2030, the global music industry will reach $41 billion in market size as the global streaming market multiplies in size to $34 billion (nearly all of it from paid subscriptions).

Merck Mercuriadis is seen on the left. (Photo by KMazur/WireImage for Conde Nast media group)

Earlier this week, I spoke with Merck Mercuriadis who has managed icons like Elton John, Guns N’ Roses, and Beyoncé and raised £200 million ($260 million) on the London Stock Exchange in June for an investment vehicle (Hipgnosis Songs) to acquire the catalogues of top songwriters. His plan is to raise and invest £1 billion over the next three to five years, arguing that the shift to passive consumers paying for music will take the industry to heights it has never seen before.

Indeed, streaming music is a paradigm shift from the past. With all the world’s music available in one interface for free (with ads) or for an affordable subscription (without ads), consumers no longer have to actively choose which specific songs to buy (or even which to download illegally).

With it all in front of them and all included in the price, people are listening to a broader range of music: they’re exploring more genres, discovering more musicians who aren’t stars on traditional radio, and going back to music from past decades. Consumers who weren’t previously buying a lot of music are now subscribing for $120 per year and spreading it across more artists.

Retail businesses are doing the same: through streaming offerings like Soundtrack Your Brand (which spun out of Spotify), they’re using commercial licenses – which are more expensive – to stream a broader array of music in stores rather than putting on the radio or playing the same few CDs.

Much of the music industry’s market growth is happening in China, India, Latin America, and emerging markets like Nigeria where subscription apps are replacing widespread music piracy or non-consumption. Tencent Music Entertainment, whose three streaming services have roughly 75% market share in China (a music market that expanded by 34% last year), is preparing for an IPO that could give it roughly the same $29 billion valuation Spotify received in its IPO in April. Meanwhile, music industry revenue from Latin America grew 18% last year.

Western music is infused in pop culture worldwide, so as these countries enter the streaming era they are monetizing hundreds of millions of additional listeners, through ad revenue at a minimum but increasingly through paid subscriptions as well.

At the talent management, publishing, and production firm Primary Wave, founder Larry Mestel is seeing emerging markets drive more revenue to his clients (like Smokey Robinson, Alice Cooper, Melissa Etheridge, and the estate of Bob Marley) as new fan bases engage with their music online. He raised a new $300 million fund (backed by Blackrock and other institutions) in 2016 to acquire rights in music catalogues amid a market he says has improved substantially due to growth opportunities stemming from the streaming model.

It’s not just streaming music platforms that are driving growth either. Streaming video has exploded, whether it’s from short YouTube videos or the growing number of shows on platforms like Hulu and Amazon Prime Video, and with that comes growing sync licensing of songs for their soundtracks; global sync licensing revenue was up 10% year-over-year in 2017 alone. Over the last year, Facebook signed licenses with every large publisher to cover use of song clips by its users in Instagram Stories and Facebook videos as well.

The inflating valuations of songs catalogues

Catalogues are commonly valued based on the “net publisher’s share,” which is the average amount of annual royalty money left over after paying out any percentages owed to others (like a partial stake in the royalties still held by the artist).

When Round Hill Music acquired Carlin for $245 million in January to gain ownership in the catalogues of Elvis Presley, James Brown, AC/DC, and others, it paid a 16x multiple on net publisher share, which is high but not uncommon in the current market when trading catalogues of legendary artists. Just three years ago, multiples anchored in the 10-12 range (or less for newer or smaller artists whose music has not yet shown the same longevity).

Avid Larizadeh Duggan left her role as a general partner at GV to become Chief Strategy & Business Officer of Kobalt

Kobalt, which raised $205 million from VC firms like GV and Balderton Capital to become a technology-centric publisher and label services powerhouse, has also become an active player in the space. Aside from its core operating business (where it stands out from traditional publishers and labels for not taking control of clients’ copyrights), it has raised two funds ($600M for the most recent one) to help institutional investors like the Railpen pension fund in the UK gain exposure to music copyrights as an asset class. In December, their fund acquired the catalogue of publisher SONGS Music Publishing for a reported $160M in a sale process against 13 other bidders looking to buy ownership in songs by Lorde, The Weeknd, and other young pop and hip-hop artists.

Too high a price?

The natural question to ask when there’s a rapid surge of money (and a corresponding surge in prices) in an asset class is whether there’s a bubble. After all, last year’s industry revenues were still only 68% of those in 1999 and the rate of growth will inevitably slow once streaming has captured the early majority of consumers.

But the fundamentals driving this capital are in line with a secular shift – it’s evident that music streaming still has a lot of room to grow in a few short years, especially as a large portion of the human population is just coming online (and doing so over mobile first). Plus as new content formats like augmented and virtual reality come to fruition, new categories of music sync licensing will inevitably accompany them for their soundtracks.

Each catalogue is its own case, of course. As Shamrock Capital managing director Jason Sklar emphasized to me, the rising tide isn’t lifting all boats equally. The streaming revolution appears to be disproportionately benefiting hip-hop, rap, and pop given the youth skew of streaming service users and the digital-native social media engagement of the artists in those genres.

Beyond the purchase price, the critical variable for evaluating a deal in this market is also the operational value a potential buyer can provide to the catalogue: their ability to actively promote songs from the past by pitching them to new TV shows, ad campaigns, and any number of other projects that will keep them culturally relevant. This is where strategic investors have an advantage over purely financial investors in publishing rights, especially when it comes to the longer tail of middle-tier artist’s whose music doesn’t naturally get the inbound demand that the Beatles or Prince catalogues do.

With strong long-term market growth and a wide range of possible niches and strategies, music copyrights are an asset class where we’ll see a number of major new players develop.

News Source = techcrunch.com

Luno raises $9M to bring its bitcoin wallet, exchange and services to Europe

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Luno, a bitcoin wallet and exchange based out of Singapore, is riding the crypto wave into Europe after it closed a $9 million Series B round for market expansion.

The funding was led by new investor Balderton Capital, with participation from existing backer Digital Currency Group. South Africa’s AlphaCode — also a new arrival on the cap table — joined the deal which takes Luno, which was formerly called BitX, to $13.8 million raised to date.

Major league investor Naspers, another that hails from South Africa, led a $4 million investment in June 2015.

The products these backers are throwing their weight behind include a bitcoin wallet for storing crypto currencies, an exchange for buying them and merchant services that enable banks and retailers to work with bitcoin. In South Africa, in particular, Luno has worked with the likes of Pick N Pay while it was among the first batch let into the FCA’s Regulatory Sandbox in London last year.

Luno said the money will go towards bringing those services to 35 new countries in Europe. The company — which has offices in Singapore, Cape Town and London — plans to double its current headcount of 70 staff to support this new sprint, which takes its services to a total of 40 countries worldwide.

“[The expansion] might sound quite trivial but as you probably know there are not a lot of companies that offer these kind of services in Europe — certainly not in a very mass-market, user-friendly way, and particularly with a really good mobile product coupled with good customer service,” Luno CEO Marcus Swanepoel told TechCrunch.

“As we expand the team and grow in these countries we will be rolling out more deposit methods and country localization that we are already working on,” he added.

Bitcoin has been a tear this year, with the crypto currency’s value against the U.S. dollar reaching new highs in 2017. It reached $2,000 for the first time in May before surging to $3,000 and then $4,000 in August. Bitcoin touched $5,000 on some exchanges earlier this month before a ban on trading in China, and other market uncertainties saw the price decline to around $4,000 as of today.

Despite that volatility, companies and investors see the potential for the digital currency particularly around cross border transfers and — with the bitcoin blockchain — infrastructure and operational opportunities for the banking industry. Ethereum, the world’s second most popular crypto coin, is also emerging as a platform for developers, beyond helping companies raise money via ICOs.

Featured Image: BTC Keychain/Flickr UNDER A CC BY 2.0 LICENSE

News Source = techcrunch.com

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