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Who are Israel’s most active VCs?

Israel’s startup ecosystem is booming, with a record amount of venture capital funding coming through the country’s gates. Companies hailing from the region have seen a steady increase in capital invested in recent years, culminating in an eye-watering €2.4 billion across 310 deals in 2018, per the PitchBook Platform.

This year got off to a similar start through 1H, as businesses have been making headlines with mammoth rounds. In May, one of Israel’s most valuable startups, Gett, raised a whopping $200 million worth of debt and equity, valuing the provider of a ridehailing app at $1.5 billion. Just a month later, LiDAR developer Innoviz Technologies closed its Series C on a total of $170 million.

The fact that so much capital is going toward Israeli businesses may not surprise. While the country is relatively small in size, it is fast becoming one of the most technologically influential hubs in the world, driven by a young, well-educated workforce and a favorable entrepreneurial environment.

What might raise a few eyebrows is the amount coming from non-Israeli VCs. Some 71% of the country’s rounds include foreign investors, compared with 44% for London-based deals and 24% for those in Silicon Valley, per data from High-Tech Connect Suisse. Israel’s proportion of foreign VC activity is in keeping with a growing global trend of cross-border investment. In fact, around 92% of venture deals last year had participation from foreign investors, according to data from PitchBook, an increase from 89.5% in 2017. The US is responsible for the majority of the deal count, with a total of 1,329 since 2014.

 

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9 big things: Unicorn stocks are spiking after IPOs

Like so many of the VC-backed unicorns going public these days, vegan protein specialist Beyond Meat has never made a profit.

But the past two days were highly, insanely, ludicrously profitable for the company’s backers, as stock in Beyond Meat shot up nearly 200% from its IPO price and investors swarmed in pursuit of a piece of that sweet, sweet meatless meat. That sort of spike is rare. But it also aligns with the post-IPO performance of the rest of 2019’s unicorn herd.

So far this year, when unicorns go public, they tend to get more valuable—and that’s one of nine things you need to know from the past week:

1. To infinity for Beyond

The first hints that something might be brewing emerged earlier in the week, when Beyond Meat elevated its original IPO price range. The company priced at $25 per share, at the top of its revised range. And then everything went crazy: Stock in Beyond Meat (NASDAQ: BYND) opened Thursday trading at $46 per share, closed at $65.75, and then inched up even higher on Friday, finishing the week at $66.79. That equates to a market cap of $3.8 billion, compared to a $1.5 billion IPO valuation and a $1.35 billion figure with its last round of VC.
There’s probably nobody happier about it all than the folks at Kleiner Perkins: The firm owned a 15.9% pre-IPO stake in Beyond Meat, holding shares now worth well over $500 million.

Recent weeks, of course, have been peppered with unicorn IPOs. For the most part, once these companies have gone public, they’ve been out of mind; the main exception might be Lyft, whose slipping stock price has caused cries of concern about Uber’s eventual fate. But for the rest of the cohort, the move to the public markets has been accompanied with steadily rising stock prices.

IT software provider PagerDuty went public on April 11 with an IPO price of $24 per share, valuing the company at $1.8 billion. Its stock shot up nearly 60% on its first day of trading, closing at $38.25 per share, and has continued to tick up in the weeks since. Shares in the company closed Friday at $46.52 per piece, for a market cap of $3.4 billion, compared to $1.3 billion with its last VC round.

Social media unicorn Pinterest debuted a week later, pricing its IPO at $19 per share—above its expected range—to establish a $10 billion valuation, notably less than its prior $12.3 billion VC-backed valuation. But Pinterest stock closed its first day trading up at $24.40 per share, and it closed Friday at $28.36, for a market cap of about $15 billion.

The prime example of the trend might be Zoom, which joined Pinterest in going public on April 18. After pricing above its anticipated range at $36 per share, the company’s stock zoomed (sorry) to $62 by the end of its first day, representing a valuation increase from $9.2 billion to nearly $16 billion in mere hours. Zoom’s stock closed Friday at $79.18, valuing the workplace video company at almost $20 billion.

The performance of these stocks and the rest of the unicorns on their way to the public markets will of course be worth monitoring in the weeks, months and years to come. The early results, though, must have some of the longtime investors in those unicorns asking: What took you so long?

2. A new Vision

There could be an unusual new entrant in the sprint to the public markets: SoftBank’s Vision Fund. The Japanese investor might conduct an IPO for the $100 billion vehicle sometime this year, per The Wall Street Journal, among additional plans to raise an equally enormous follow-up fund; the hope of chief executive Masayoshi Son is reportedly to turn the vehicle into a tech-focused (and unprofitable) analog to Berkshire Hathaway. One of SoftBank’s major portfolio companies could also soon go public, as WeWork announced this week that it confidentially filed for an IPO back in December.

3. Making it easy

That’s the goal of UiPath, a startup focused on automating workplace functions that raised $568 million this week at a $7.1 billion valuation, a huge step-up from a $3 billion valuation just six months ago. Making cross-border payments easy is what helped London’s Checkout.com bring in an enormous Series A this week, collecting $230 million at a reported $2 billion valuation. Other kinds of payments are the domain of Divvy, which banked $200 million at an $800 million valuation this week: The company makes software designed to replace expense reports.

4. Fight club

The Professional Fighters League pinned down a $30 million Series C this week to fund its unique mixed martial arts competition, with Elysian Park Ventures and Swan Ventures among the backers. And while Sumo Logic doesn’t have anything to do with actual sumo wrestling, PitchBook learned that the data analytics company is raising new cash at what would be a unicorn valuation.

 

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Snoop Dogg aims for another VC hit with Klarna deal

Snoop Dogg has always been someone with his mind on the money and the money on his mind. However, in his latest VC move, he’s swapping cold hard cash for online payments by becoming a shareholder in Swedish unicorn Klarna. Snoop, aka Calvin Broadus, will also front the company’s “Smoooth Dogg” advertising campaign.

Klarna, which offers payments services for around 100,000 merchants in 14 countries, is backed by investors including Sequoia Capital and Atomico. The fintech company raised $250 million from Permira in 2017 at a $2.5 billion valuation.

Young, wild and VC

The deal adds another unicorn to the stable of the American rapper (pictured with Klarna CEO Sebastian Siemiatkowski), one that already boasts some impressive names.

Indeed, Snoop managed to score a couple of hits five years ago with investments into online aggregator Reddit and personal investment startup Robinhood. According to PitchBook data, Reddit boasted a valuation of some $1.8 billion after its 2017 Series C, while Robinhood chalked up a $5.6 billion valuation after its $363 million Series D last year.

Elsewhere, Snoop’s own venture firm, Casa Verde Capital, closed its debut fund on $45 million last year, targeting seed and Series A deals in the cannabis industry. The VC co-led a $50 million round with Tiger Global Management into cannabis regulatory startup Metrc in October.

Rappers venture into investing

Rap musicians and venture capital have been an increasingly common combination this past decade, with Snoop being one of many artists to have put their money where their mouth is—and for some, this has led to gargantuan exits. Take Amazon’s acquisitions of Ring and PillPack last year, for example, with both deals said to be in the region of $1 billion each. An early investor in both these startups was QueensBridge Venture Partners, the venture firm of Nasir Jones, aka rapper Nas. QueensBridge backed Ring during its 2014 $4.5 million Series A, with last year’s exit reportedly earning him a cool $40 million.

 

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VC’s Embrace Next-Gen Advertising

@lilmiquela has 1.3 million followers on Instagram. Her bio reads that she’s 19 years old, lives in Los Angeles, and supports causes including Black Lives Matter and the Innocence Project. Oh, and she’s a robot.

Her Instagram feed, which at the time of writing has 245 posts, is her entire existence. She likes memes and posting selfies. One photo in particular shows her relaxing on a lawn chair, while another has her posing on a washer/dryer set. There’s even a snap of her being tattooed by similarly Insta-famous tattoo artist Dr. Woo.

But. She’s. Not. Real. @lilmiquela is a “virtual influencer” and the brainchild of a venture capital-backed company called Brud, which describes itself as a group of “problem solvers specializing in robotics, artificial intelligence and their applications to media businesses.”
In April, @lilmiquela and Brud brought in approximately $6 million in VC funding from Sequoia, BoxGroup, SV Angel and Ludlow Ventures. It’s unclear how that money will be spent; perhaps it will go toward building out more virtual influencer accounts, some “friends” for @lilmiquela.

But the real question is why is a surreal—literally—freckly teenage girl worth millions to Silicon Valley?

After all, Brud isn’t the first company to capitalize off the platform Instagram provides, nor is it the first to illustrate how much money one can make as an “influencer.” Former “Bachelor” and “Bachelorette” contestants, each member of the Kardashian family and pretty much every C-list actor has proven that. Brud, rather, has shown that you can manufacture that influence using technology. You don’t have to pay an actual person to post an Instagram story about how he or she just “looooooves” your products.

The team at Brud decides what @lilmiquela “likes,” what she will promote on her Instagram and how she will behave online. Earlier this year, @lilmiquela posted an Instagram story advertising her partnership with Prada, undoubtedly a lucrative deal that had her advertising for the brand just in time for fashion week in February. It appeared to be one of the first official brand partnerships advertised on her feed.

Brud is hacking influencer marketing, which has already disrupted traditional advertising streams in recent years. Influencer marketing is a new opportunity stemming from that Instagram usage; it has allowed skillful bloggers, who have themselves become valuable media properties and brand assets, to make a living off social media posts. This is mostly a result of the successes of social media platforms like Twitter and Facebook, though Instagram is at the center of the influencer movement specifically.

Venture capital investors, of course, were backers of all three of those platforms in their nascent days. Now, VCs are investing in a new generation of startups vying to capitalize on the innovative form of narrative advertising that is influencer marketing.

 

Read Full Article – www.pitchbooks.com