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March 19, 2019
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African e-commerce startup Jumia files for IPO on NYSE

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Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange today, per SEC documents and confirmation from CEO Sacha Poignonnec to TechCrunch.

The valuation, share price and timeline for public stock sales will be determined over the coming weeks for the Nigeria-headquartered company.

With a smooth filing process, Jumia will become the first African tech startup to list on a major global exchange.

Poignonnec would not pinpoint a date for the actual IPO, but noted the minimum SEC timeline for beginning sales activities (such as road shows) is 15 days after submitting first documents. Lead adviser on the listing is Morgan Stanley .

There have been numerous press reports on an anticipated Jumia IPO, but none of them confirmed by Jumia execs or an actual SEC, S-1 filing until today.

Jumia’s move to go public comes as several notable consumer digital sales startups have faltered in Nigeria — Africa’s most populous nation, largest economy and unofficial bellwether for e-commerce startup development on the continent. Konga.com, an early Jumia competitor in the race to wire African online retail, was sold in a distressed acquisition in 2018.

With the imminent IPO capital, Jumia will double down on its current strategy and regional focus.

“You’ll see in the prospectus that last year Jumia had 4 million consumers in countries that cover the vast majority of Africa. We’re really focused on growing our existing business, leadership position, number of sellers and consumer adoption in those markets,” Poignonnec said.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a $326 funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries, spanning Ghana, Kenya, Ivory Coast, Morocco and Egypt. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape.

Jumia has also opened itself up to traders and SMEs by allowing local merchants to harness Jumia to sell online. “There are over 81,000 active sellers on our platform. There’s a dedicated sellers page where they can sign-up and have access to our payment and delivery network, data, and analytic services,” Jumia Nigeria CEO Juliet Anammah told TechCrunch.

The most popular goods on Jumia’s shopping mall site include smartphones (priced in the $80 to $100 range), washing machines, fashion items, women’s hair care products and 32-inch TVs, according to Anammah.

E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.

Jumia has not yet turned a profit, but a snapshot of the company’s performance from shareholder Rocket Internet’s latest annual report shows an improving revenue profile. The company generated €93.8 million in revenues in 2017, up 11 percent from 2016, though its losses widened (with a negative EBITDA of €120 million). Rocket Internet is set to release full 2018 results (with updated Jumia figures) April 4, 2019.

Jumia’s move to list on the NYSE comes during an up and down period for B2C digital commerce in Nigeria. The distressed acquisition of Konga.com, backed by roughly $100 million in VC, created losses for investors, such as South African media, internet and investment company Naspers .

In late 2018, Nigerian online sales platform DealDey shut down. And TechCrunch reported this week that consumer-focused venture Gloo.ng has dropped B2C e-commerce altogether to pivot to e-procurement. The CEO cited better unit economics from B2B sales.

As demonstrated in other global startup markets, consumer-focused online retail can be a game of capital attrition to outpace competitors and reach critical mass before turning a profit. With its unicorn status and pending windfall from an NYSE listing, Jumia could be better positioned than any venture to win on e-commerce at scale in Africa.

News Source = techcrunch.com

Indonesia-focused Intudo Ventures raises new $50M fund

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Intudo Ventures, a VC firm focused on Indonesia, has closed a new $50 million fund. This is Intudo’s second fund to date following its $20 million debut last year.

The firm is a relative newcomer to Southeast Asia but a key differentiator is that it is solely focused on Indonesia, which is the world’s fourth most populated country with over 260 million people and the region’s largest economy.

It is also the dominant market for tech and the internet in the region. According to a much-cited report from Google and Singapore sovereign fund Temasek, Indonesia’s online economy will grow to $100 billion by 2025 from $8 billion in 2015. That’s a dominant chunk of the Southeast Asia market, which is predicted to reach $240 billion as a whole.

A Google-Temasek report forecasts significant growth across Southeast Asia, with Indonesia taking the lead

Another factor that separates Intudo from other firms is its approach to working with local partners. Most VC firms in Southeast Asia tend to source their LPs from Singapore, West Asia and China with a smattering of local families or conglomerates who wield influence on the ground in markets. In Indonesia, Intudo claims to have over 20 families among its LP base, as opposed to the conventional approach of two or three.

However, founding partners Eddy Chan and Patrick Yip told TechCrunch that the majority of its capital comes from U.S-based LPs, with no investor providing more than 10 percent of the fund’s capital. Some of its overseas backers include Founders Fund, the family office of former Walgreens CEO Greg Wasson, Japan’s World Innovation Lab and Taiwan’s CTBC Group, according to the partners.

“Indonesia is a market we feel is dominated by about 100 core families, we are back by 20-some of the most influential groups in the market,” Chan said in an interview.

The goal is to help Intudo’s portfolio companies tap into opportunities from those LPs and their business holdings.

“When we sign up LPs, first and foremost we want to be able to engage the network and resources for the startup we invest into. We find a fit and hopefully provide some kind of unfair advantage… a leg up when they want to compete,” Chan explained.

“We’re not biased to any one family, we invest in a purely financially-driven manner,” added Yip.

Intudo Ventures’ founding partners Eddy Chan and Patrick Yip

Yip provides the on-the-ground presence having returned to Indonesia from the U.S. 15 years ago. Chan is in the U.S. for eight months a year, he said, where he spends much of his time seeking out Indonesia talent studying in the U.S. for prospective hiring or incubating new projects.

“We have a long-term view that we either place them in our portfolio, found companies with them or put them in with a Bain, or McKinsey type company,” Chan explained.

Yip formerly operated an investment firm associated with Goldman Sachs and spent time at retail giant CP, Chan, meanwhile has spent time as an investor and co-founded smart light company Leeo before leaving in 2015 following a restructuring.

The fund itself is focused on Series A and pre-A with some Series B with an initial investment of $500,000-$5 million with more for follow-on rounds, the partners explained. But the focus is on doubling down on a few prospects, with the fund slated to do around 12-15 deals through its lifecycle.

Chan said that when it comes to going beyond the fund’s deal range the thesis is to involve its LPs who, he claimed, are keen to invest in Indonesia further down the line. With just a year since Intudo’s debut fund closed that theory has not been tested yet although one early bet, BeliMobilGue just raised a $10 million Series A. Others in the portfolio include co-working venture CoHive, payment gateway company Xendit and fitness startup Ride Jakarta.

For now, at least, Intudo intends to remain laser-focused on Indonesia.

“Down the road will we add other countries? Time will tell,” Chan said. “This is our bread and butter and where we’re strong and what we have committed to for our LPs.”

News Source = techcrunch.com

Startups Weekly: Even Gwyneth Paltrow had a hard time raising VC

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I spent the week in Malibu attending Upfront Ventures’ annual Upfront Summit, which brings together the likes of Hollywood, Silicon Valley and Washington, DC’s elite for a two-day networking session of sorts. Cameron Diaz was there for some reason, and Natalie Portman made an appearance. Stacey Abrams had a powerful Q&A session with Lisa Borders, the president and CEO of Time’s Up. Of course, Gwyneth Paltrow was there to talk up Goop, her venture-funded commerce and content engine.

“I had no idea what I was getting into but I am so fulfilled and on fire from this job,” Paltrow said onstage at the summit… “It’s a very different life than I used to have but I feel very lucky that I made this leap.” Speaking with Frederic Court, the founder of Felix Capital, Paltrow shed light on her fundraising process.

“When I set out to raise my Series A, it was very difficult,” she said. “It’s great to be Gwyneth Paltrow when you’re raising money because people take the meeting, but then you get a lot more rejections than you would if they didn’t want to take a selfie … People, understandably, were dubious about [this business]. It becomes easier when you have a thriving business and your unit economics looks good.”

In other news…

1. Joseph Gordon-Levitt is an entrepreneur, too

The actor stopped by the summit to promote his startup, HitRecord . I talked to him about his $6.4 million round and grand plans for the artist-collaboration platform.

  1. Deals of the week

Backed by GV, Sequoia, Floodgate and more, Clover Health confirmed to TechCrunch this week that it’s brought in another round of capital led by Greenoaks. The $500 million round is a vote of confidence for the business, which has experienced its fair share of well-publicized hiccups. More on that here. Plus, Clutter, the startup that provides on-demand moving and storage services, is raising at least $200 million from SoftBank, sources tell TechCrunch. The round is a big deal for the LA tech ecosystem, which, aside from Snap and Bird, has birthed few venture-backed unicorns.

  1. The Pinterest IPO is really, actually happening

Pinterest, the nine-year-old visual search engine, has hired Goldman Sachs and JPMorgan Chase as lead underwriters for an IPO that’s planned for later this year. With $700 million in 2018 revenue, the company has raised some $1.5 billion at a $12 billion valuation from Goldman Sachs Investment Partners, Valiant Capital Partners, Wellington Management, Andreessen Horowitz, Bessemer Venture Partners and more.

  1. Fundraising efforts

Kleiner Perkins went “back to the future” this week with the announcement of a $600 million fund. The firm’s 18th fund, it will invest at the seed, Series A and Series B stages. TCV, a backer of Peloton and Airbnb, closed a whopping $3 billion vehicle to invest in consumer internet, IT infrastructure and services startups. Partech has doubled its Africa VC fund to $143 million and opened a Nairobi office to complement its Dakar practice. And Sapphire Ventures has set aside $115 million for sports and entertainment bets.

  1. Sam Altman has a new idea

The co-founder of Y Combinator will throw a sort of annual weekend getaway for nerds in picturesque Boulder, Colo. Called the YC 120, it will bring toget her 120 people for a couple of days in April to create connections. Read TechCrunch’s Connie Loizos’ interview with Altman here.

  1. Hims gets unicorn status

Consumer wellness business Hims has raised $100 million in an ongoing round at a $1 billion pre-money valuation. A growth-stage investor has led the round, with participation from existing investors (which include Forerunner Ventures, Founders Fund, Redpoint Ventures, SV Angel, 8VC and Maverick Capital) . Our sources declined to name the lead investor but said it was a “super big fund” that isn’t SoftBank and that hasn’t previously invested in Hims.

  1. a16z bets on VR — again

Five years after Andreessen Horowitz backed Oculus, it’s leading a $68 million Series A funding in Sandbox VR. TechCrunch’s Lucas Matney talked to a16z’s Andrew Chen and Floodgate’s Mike Maples about what sets Sandbox apart.

Here’s your weekly reminder to send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets

  1. More startup cash:

  1. An update on the Munchery fiasco

In a new class-action lawsuit, a former Munchery facilities worker is claiming the startup owes him and 250 other employees 60 days’ wages. On top of that, another former employee says the CEO, James Beriker, was largely absent and is to blame for Munchery’s downfall. If you haven’t been keeping up on Munchery’s abrupt shutdown, here’s some good background.

  1. Scooter consolidation

Consolidation in the micromobility space has arrived — in Brazil, at least. Not long after Y Combinator-backed Grin merged its electric scooter business with Brazil-based Ride, it’s completing another merger, this time with Yellow, the bike-share startup based in Brazil that has also expressed its ambitions to get into electric scooters.

  1. Listen to me talk

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase editor-in-chief Alex Wilhelm, TechCrunch’s Silicon Valley editor Connie Loizos and Jeff Clavier of Uncork Capital chat about $100 million rounds, Stripe’s mega valuation and Pinterest’s highly anticipated IPO.

News Source = techcrunch.com

Report: Morgan Stanley lands coveted Uber IPO role

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Uber has reportedly picked Morgan Stanley to lead its upcoming initial public offering, news of which became public last week when the ride-hailing giant filed confidentially with the U.S. Securities and Exchange Commission for an IPO expected in the first quarter of 2019.

Uber’s choice, first reported by Bloomberg, comes after a months-long bidding war, of sorts, between Morgan Stanley and Goldman Sachs. The pair of investment banks presented IPO plans to Uber this fall, in hopes of landing the top underwriting spot in what will be one of the largest stock market debuts to date. Morgan Stanley, having won the battle, can expect to receive a large portion of the fees that come with an IPO.

We’ve reached out to Uber and Morgan Stanley for comment.

Michael Grimes, managing director of global technology for Morgan Stanley, speaks at the TechCrunch Disrupt conference on Tuesday, Sept. 28, 2010.

Uber’s pick isn’t too surprising; rumors pointing to Morgan Stanley have floated the tech ecosystem for months. Morgan Stanley’s head of technology investment banking Michael Grimes, the lead underwriter on Facebook’s initial public offering, resorted to gimmicks to ensure his spot in Uber’s IPO. According to The Wall Street Journal, Grimes moonlighted as an Uber driver for years to demonstrate his loyalty.

Both Morgan Stanley and Goldman Sachs are investors in Uber. Morgan Stanley participated in Uber’s Series G funding in 2016 and Goldman Sachs has been a backer for years, investing in the company as early as 2011.

Uber was most recently valued at $72 billion and is expected to garner a valuation as high as $120 billion upon its stock market debut. Lyft, its key competitor in the U.S., also recently filed to go public. It has picked JPMorgan Chase & Co. as the lead underwriter of its offering, per reports, which is also expected as early as Q1 2019. People familiar with the company’s IPO plans said its valuation will exceed the $15.1 billion it was valued at earlier this year.

News Source = techcrunch.com

Fintech startup Plaid raises $250M at a $2.65B valuation

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In the five years since its product was showcased onstage at TechCrunch Disrupt New York’s hackathon, Plaid has emerged as one of the most critical contributors to financial technology’s evolution — and one of the most under the radar.

That is, until now. The company is today announcing a $250 million Series C investment led by famed venture capitalist and the author of the Internet Trends report Mary Meeker, who will join its board of directors as part of the deal. The funds were raised at a valuation of $2.65 billion, according to sources close to the company. Capital from Meeker’s investment came from Kleiner Perkins’ growth fund — where Meeker has been a partner since 2010 — not from the reported billion-dollar-plus solo fund she’s in the process of raising.

New investors Andreessen Horowitz and Index Ventures also participated, as did existing investors Goldman Sachs, NEA and Spark Capital. The financing brings Plaid’s total raised to $310 million and provides a major boost to its valuation, which was just over $200 million with its 2016 Series B.

Making money easier for everyone

Plaid builds infrastructure that allows a consumer to interact with their bank account on the web through a number of third-party applications, like Venmo, Robinhood, Coinbase, Acorns and LendingClub. The San Francisco-based startup has integrated with 10,000 banks in the U.S. and Canada and says 25 percent of people living in those countries with bank accounts have linked with Plaid through at least one of the hundreds of apps that leverage Plaid’s application program interfaces (APIs) — an increase from 13 percent last year.

The platform allows companies to create financial services applications without having to hire their own team of engineers to build out a tool that connects apps to its users’ bank accounts, something Plaid’s founders themselves lacked when they set out to build a fintech startup years ago. Plaid was founded by a pair of former Bain consultants, William Hockey and Zach Perret, the chief technology officer and chief executive officer, respectively, in 2012.

“We were always really infatuated with the concept of financial services,” Hockey told TechCrunch. “We thought it had so much power to impact and improve people’s lives but at the time it really wasn’t … We quickly realized building financial services was almost impossible to do because there wasn’t the tooling or the infrastructure, so we turned around and started building that infrastructure.”

Plaid closed a $44 million Series B in mid-2016 and has since seen its valuation increase more than tenfold. On top of that, it doubled its customer base this year, launched in Canada — its first market outside the U.S. — opened its third office, expanded its overall headcount to 175 employees and debuted a digital mortgage product called Assets.

Hockey and Perret say the new funding will be used to continue expanding the team in San Francisco, Salt Lake City and New York. Plaid, given how essential its tools are to any technology companies that deals with payments in any fashion, which these days is the vast majority of businesses, is a company to watch going into 2019.

“When we think about our long-term goals, we want to make money easier for everyone,” Perret told TechCrunch. “We want everyone to lives these simple, straightforward digitally enabled financial lives and for us, that means supporting these tech innovators in the space and these large incumbents. We want to be able to help them create great consumer financial experiences so consumers can live simpler financial lives.”

News Source = techcrunch.com

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