INDUSTRY NEWS

China, Social Media & Foreign Capital; 2024 Better Tech Awards

Global Tech Brief

Talking Shop

Yuri Milner’s DST Global just invested in Xiaohongshu (aka Little Red Book or LRB), the fastest-growing social media startup in China, at a USD17b valuation – a 21% markup from its USD14b valuation a year ago.  

While the startup has been well supported by local capital – from HongShan to Boyu and CITIC – this check represents LRB’s most recent foreign financing. This comes at a time when VCs continue to reassess their approach towards backing companies based in mainland China. 

Why it matters: 

  • Pricing matters (more than ever). The deal reflects a 21% increase in valuation compared to what HongShan and Gaorong paid last year when they bought out stakes from Genesis Capital and Granite Asia (fka GGV). However, it still represents a 15% discount to the USD20b valuation during its USD500m Series E in which Temasek – another prominent foreign backer now being cautious in China – participated in 2021. The startup turning a profit for the first time last year doesn’t hurt either. 

  • As the venture winter begins to thaw in certain markets, global investors remain opportunistic about investing in China tech amidst the ongoing East/West capital decoupling. Meanwhile, local managers are doubling down on raising RMB-denominated funds (see HongShan and Qiming’s latest vintages). 

  • While AI, biotech and semiconductor startups have dominated venture funding in China, the investment in LRB represents a contrarian approach towards social media business models while some investors question whether software investing, in its current form, will soon be dead.

Yes, but: A data point does not make a trend. With US elections in full swing, global investor interest in China-based companies will likely remain heavily influenced by geopolitics for now.

Let’s Talk Better Tech

GPCA Member investors are invited to nominate a portfolio company for GPCA’s 2024 Better Tech Award. 

The 2024 GPCA Better Tech Award seeks to identify a high-growth startup leveraging technology to provide breakthrough solutions and a measurable positive impact in Asia, Africa, Latin America, CEE and/or the Middle East. 

India-based LEAD School, nominated by Elevar Equity, won the 2023 GPCA Better Tech Award. LEAD School operates as an edtech software platform that targets affordable and low-fee K-12 private schools, offering an integrated digital solution for teacher training, student performance tracking and core curriculum delivery. 

Interested GPCA Member investors are welcome to submit a nomination before 4 September or contact Carlos Ramos de la Vega and Alex Fichter with any questions.

Submit Nomination

The Big Tickets

  • FINTECH | MNT-Halan, an Egypt-based lending and payments platform, raised USD157.5m from IFC, DPI, Lunate, Lorax Capital Partners, Apis Partners and GB Corp.
    • UAE-based Chimera Capital invested USD200m in 2023. 
    • READ GPCA’s full case study on DPI’s support for the company since its USD45m investment in 2018.  

  • AEROSPACE | MinoSpace, a China-based commercial satellite manufacturer, raised a ~USD138m Series C from Broad Vision Funds, Oriza Holdings and others.

  • HEALTHTECH | METiS Pharmaceuticals, a China-based AI platform to optimize pharmaceutical formulation processes, raised a USD100m Series C led by CICC, with participation from China Taiping Insurance Group. Previous backers include 5Y Capital, Lightspeed Venture Partners, Source Code Capital, HongShan and others.

  • FINTECH | Warburg Pincus invested USD100m in Matera, a Brazil-based banking software solutions provider.

  • AI | GalaxyBot, a China-based embodied AI startup, raised a ~USD96.4m round from IDG Capital, Source Code Capital, Matrix Partners China, Lanchi Ventures and Qiming Venture Partners.

  • FINTECH | Mexico-based OCN (fka OneCarNow), a car rental financing platform for gig economy workers, raised a USD86m Series A round. Caravela Capital, Collide Capital and Great North Ventures led the equity portion of the round, while i80 Group provided debt financing.

  • DEBT | Merama, a Mexico-based e-commerce aggregator, received a USD80m credit facility from Gramercy Funds Management.

  • FINTECH | Peak XV Partners led a USD60m+ Series B for Partior, a Singapore-based blockchain cross-border payments network, with participation from Valor Capital Group and Jump Trading Group, as well as follow-on from J.P. Morgan, Standard Chartered and Temasek.
    • This is Valor Capital Group’s first known investment in a Singapore-based startup.

  • ENTERPRISE SOFTWARE | Amity, a Thailand-based software and AI business, raised a USD60m Series C from Insight Capital, SMDV, Gobi Partners and other investors.
    • DEBT | The financing includes debt which was led by AlteriQ Global.

  • CLEANTECH | Norfund led a USD55m round for Xurya, an Indonesia-based rooftop solar installer, with participation from AC Ventures, Swedfund, BII and Clime Capital.

  • DIGITAL SECURITY | k-ID, a Singapore-based youth compliance platform for game developers, raised a USD45m Series A from Andreessen Horowitz, Lightspeed Venture Partners, Okta, Konvoy, Z Venture Capital and TIRTA Ventures. 

  • FINTECH | Acrew Capital led a USD40m Series A for Nala, a Tanzania-based remittance payments platform serving US- and European-based consumers, with participation from DST Global, Norrsken22 and HOF Capital, as well as follow-on from Amplo and NYCA Partners.

  • CLEANTECH | Shorooq Partners and Equinor Ventures led a USD37m Series A for 44.01, an Oman-based carbon mineralization startup, with participation from Air Liquide Ventures Capital, Alumni Ventures, Innovation Development Oman Amazon’s Climate Pledge Fund and others, as well as follow-on from Breakthrough Energy Ventures.
    • 40.01 raised a USD5m round in 2021 led by Sam Altman’s Apollo Projects. 

Deals

  • FINTECH | Premji Invest led a ~USD32m round for Dezerv, an India-based wealth management platform, with follow-on from Blume Ventures, Elevation Capital, Accel Partners, Z47 (fka Matrix Partners India), Whiteboard Capital and others.

  • AGTECH | Arya.ag, an India-based grain commerce platform connecting agri producers and buyers, raised ~USD29.2m from Asia Impact, Quona Capital and Lightrock at a reported valuation of ~USD325m.

  • ENTERPRISE SOFTWARE | 8VC, Z47 (fka Matrix Partners India) and Nexus Venture Partners led a USD24m Series B for Rocketlane, an India-based B2B SaaS platform for client project delivery. 

  • LEGALTECH | Riverwood Capital led a USD24m growth round for netLex, a Brazil-based contract lifecycle management platform.

  • FINTECH | KASZEK led a USD22m Series A for Tapi, an Argentina-based payments platform, with follow-on from Andreessen Horowitz.

  • PROPTECH | IFC and Wavemaker Partners led a USD20m equity round for Lhoopa, a Philippines-based proptech offering affordable housing solutions, with participation from Pavilion Capital, 10x Group, Concentric Equity Partners, Mirath Investments, Black Kite Capital, Ron Hose (Coins.ph), NataRock Partners, Steve Melhuish (PropertyGuru), as well as follow-on from Patamar Capital and Tekton Ventures.

  • ERP | RTP Global led a USD18m Series A for Zyod, an India-based global B2B platform for apparel sourcing and manufacturing, with participation from Lightspeed Venture Partners, Alteria Capital, Stride Ventures, StrideOne and Trifecta Capital.

  • FINTECH | Anfa led a USD15m Series A for Sipay, a Turkey-based O2O payments platform, with participation from Jitendra Gupta (Citrus Pay), Amrish Rau (Pine Labs), Kunal Shah (CRED) and other angels.

  • FINTECH | Third Prime led a USD14m Series A for Paywatch, a Malaysia-based earned-wage access provider, with participation from Vanderbilt University, University of Illinois Foundation, Octagon Venture Partners and Wooshin Venture Investment Corp.
    • DEBT | Paywatch raised USD16m in credit facilities from Citi and other banks.

  • MOBILITY | Blume Ventures and Antler led a USD11m pre-Series A for Moving Tech, the India-based parent company of open-source ridesharing Namma Yatri, with participation from Google.

  • HEALTHTECH | Sierra Ventures led a USD10m round for Eden, a Mexico-based early breast cancer risk assessment technology, with participation from KASZEK, Alt Capital, Y Combinator and Khosla Ventures.

  • FINTECH | DisrupTech Ventures, Algebra Ventures and Lorax Capital Partners led a USD8m seed round for Connect Money, an Egypt-based digital payments platform, with participation from OneStop and Marisa Digital Payments.

  • CROSSBORDER | Wa’ed Ventures, the early-stage venture arm of Saudi Aramco, invested in a USD6.5m pre-Series A for AiXplain, a US-based AI app and agent developer.
    • This is Wa’ed Ventures’ first known investment in a US-based AI startup.

  • FINTECH | FinTech Collective led a ~USD6m seed round for Tivita, a Brazil-based financial management platform for healthcare professionals, with participation from K50 Ventures, MAYA Capital and SSV.

  • WOMEN-LED | Integra Partners led a USD5.5m pre-Series A for Kindred Health, a Phillipines-based O2O women’s health clinic network, with participation from Kaya Founders, KSR Ventures, Tenco Capital and others.

  • HEALTHTECH | Practica Capital and TheVentureCity led a USD3.5m seed round for Spike, a Lithuania-based provider of non-diagnostic retrieval augmented generation AI products, with participation from CEAS Investments, Plug and Play Ventures, Geek Ventures and Axel Springer Porsche.

  • E-COMMERCE | Shorooq Partners and Sturgeon Capital led a USD3m seed round for DealCart, a Pakistan-based group-buying social commerce app, with participation from Evolution VC, Rayn Capital, Khyber Venture Partners and 500 Global.
    • DealCart raised USD3.5m from 500 Global, Fatima Gobi Ventures, i2i Ventures, Rally Cap Ventures, Shorooq Partners and Vibe Capital in 2022.

  • WOMEN-LED | DSG Consumer Partners led a USD2m round for Niv Della, a Philippine-based D2C beauty and skincare brand, with follow-on from Foxmont Capital Partners.

  • SAFETY | HAVAÍC led a USD1.1m Series B for AURA, a South Africa-based emergency services platform, with follow-on from AfricInvest. 

  • AI | Change Ventures led an undisclosed round for RivalSense, a Latvia-based AI startup to monitor competitors’ activities, with participation from Fiedler Capital and local angels.

/ For more Latin American deal activity, subscribe to LAVCA’s LatAm Venture Bulletin.

Funds

  • HongShan reached a ~USD2.5b final close of its seventh RMB-denominated VC fund.
    • This is HongShan’s first fund since spinning out from Sequoia last year.

  • LongRiver Investments reached a USD385m final close of its inaugural fund to invest in early-stage healthcare and technology sectors globally, with a focus on China.
    • LongRiver’s investments include Ronovo Surgical, Tuge Medical and Allorion Therapeutics.

  • Jordan’s Innovative Startups and SMEs Fund made commitments of USD5m to Global Ventures Fund III and USD2m to VentureSouq Fund II.

  • LEAD Ventures launched a ~USD108m early-stage fund to invest in late seed and Series A startups in Central & Eastern Europe.
    • LEAD Ventures’ portfolio includes AIMotive (Hungary) and CloudTalk (Slovakia).

  • Natura launched a CVC fund, managed by VOX Capital, with a target of ~USD9m. The fund aims to back up to 15 startups in Brazil.

  • Canastra Ventures launched a fund targeting ~USD4m to invest in Brazilian startups leveraging AI within healthcare, retail, fintech and B2B software sectors.

  • Union Square Ventures launched its 2024 vintage fund with a target of USD275m.
    • USV’s portfolio includes ADDI (Colombia), Bolt.Earth (India) and Mobak (Brazil).

M&As

  • Brazil-based Nubank acquired Hyperplane, a US-based AI platform that helps banks deploy deep-learning models trained in proprietary data.
    • Nubank went public on the NYSE in 2021. Its pre-IPO investors include KASZEK, QED Investors, Tiger Global, Advent, Base10 Partners and others.

  • Grab, a Singapore-based ride-hailing and delivery startup, acquired Chope, a Singapore-based dining reservation platform.
    • Grab went public on the NASDAQ in 2021.
    • Chope’s investors include Openspace, DSG Consumer Partners, Square Peg Capital and Susquehanna.

  • India-based crypto exchange CoinDCX acquired BitOasis, a UAE-based virtual assets trading platform, to expand into the MENA region.
    • CoinDCX’s investors include B Capital Group, Bain Capital, Coinbase Ventures and others.

  • Saudi Arabia-based WakeCap acquired Crews by Core, a US-based construction project delivery platform, to expand its global reach.
    • WakeCap’s investors include SOSV and Wa’ed Ventures.

News

Timely POVs:

  • Mary Meeker of BOND released her first report in over four years, focusing on the impact of AI in higher education.
    • Meeker published her Internet Trends report annually for 22 consecutive years, starting in 1995 during her days at Morgan Stanley. 
    • TLDR per Axios: Meeker agrees with Alan Patricof of Greycroft that AI represents a “bigger and more profound revolution” than transistors, PCs, biotech, the internet or cloud computing. 

  • Philippe and Thomas Laffont of Coatue hosted EMW 2024, an annual meeting in Santa Barbara that brings together global tech investors and operators in public and private markets.
    • In a nutshell: AI was at the forefront of the conversation, along with discussions on the attractiveness of software investing in its current form (“Is software dead?” as Phillippe put it). 

  • Arkady Voloz, the co-founder of Russian multinational search engine Yandex, has launched Nebius, an Israel-based AI infrastructure company.
    • The move follows Yandex’s sale of its Russian assets in a USD5.2b cash-and-stock deal to an undisclosed consortium of Russian investors. 
    • The founding team of Nebius comes directly from Yandex’s management team.

  • NYT reviews the implications of the current AI craze for copper mines in Zambia (AI infrastructure requires substantial amounts of the mineral to operate).
    • Connie Chan of Andreessen Horowitz: “The more you realize how dependent we are on these technologies, the more you ask: How the hell were we so slow to the fact that we needed vast amounts of raw material to make it all possible?”