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VC Daily: Indian Startups Could Benefit as Momentum Shifts Away From China

Good day. India is among the countries standing to benefit the most from China's recent crackdown on its technology companies, venture-capital executives say, as investors spooked by Beijing's actions might look to redirect investments to its neighbor.

Historically, investing in India has been compared unfavorably to doing so in China, venture firm March Capital co-founder and managing partner Sumant Mandal said. That sentiment might be shifting in favor of India, particularly after the country recently introduced new rules that have made it more attractive to foreign investments, such as a measure easing requirements for companies aiming to go public.

Two recent Indian deals involving venture-capital-backed startups show what the country can offer investors. Payment platform IndiaIdeas.com Ltd., which does business as BillDesk, agreed to be sold to Netherlands-based technology company Prosus NV for $4.7 billion, while used-car dealer CarTrade Tech Ltd. was valued at around $1 billion in its initial public offering last month.

March Capital, a venture firm based in Santa Monica, Calif., was an early backer of both businesses and stands to make close to $1 billion in returns across various funds from the two investments, Mr. Mandal said. March has about $1 billion in assets under management.

One potential challenge facing investors in India is rising valuations, as local investment firms compete with large U.S. venture-capital firms for the best deals. "Two years ago I would have said that there was an India discount. Not anymore," Mr. Mandal said.

And now on to the news...

Top News

Deals spree. Companies world-wide embarked on an unprecedented deal spree this year, emerging from the depths of the pandemic looking to bulk up and address the vulnerabilities it exposed, The Wall Street Journal reports. Simultaneously, buyout firms and blank-check companies have been deploying hundreds of billions of dollars at a feverish pace. In the first eight months of 2021, companies have announced mergers and acquisitions worth more than $1.8 trillion in the U.S. and more than $3.6 trillion globally, according to data provider Dealogic. Both figures are the highest at this point in a year since at least 1995, when Dealogic started keeping records. Deals are on track to surpass their record set in 2015.

$95 Billion

Rough value of new chip-making facilities that Intel Corp. plans to build in Europe. (WSJ)

Bain Capital Backs Outdoor Gear Brand Cotopaxi

Cotopaxi, an outdoor gear and apparel brand that donates 1% of its revenue to fighting poverty, has raised fresh capital that it hopes will help it expand its business and its charitable impact, WSJ Pro's Laura Kreutzer reports. Bain Capital Double Impact, a unit of Boston-based Bain Capital that seeks to generate social and environmental benefits along with financial returns, led a roughly $45 million investment in the company, according to people with knowledge of the deal. Bain invested in the Salt Lake City-based company, whose legal name is Global Uprising PBC, from its second impact fund, which closed with $800 million last year.

Tech Industry Seeks Bigger Role in Defense

Tech-industry leaders are pushing the Pentagon to adopt commercially developed technologies on a grand scale to counter the rise of China, an initiative that could transform the military and the multibillion-dollar defense-contracting business, WSJ reports. The Pentagon has long led the way in developing advanced technology that found its way into civilian applications, such as GPS and the internet. That balance has shifted, according to tech leaders and others. They contend that the private sector has more talent and greater research budgets than the government -- and more advanced capabilities in artificial intelligence and cloud computing -- all while the military grows more reliant on technology.

Industry News

Funds

Climate tech organization Elemental Excelerator is spinning out Earthshot Ventures, a venture fund tackling climate change, with a first close of $60 million. Limited partners include Emerson Collective, McKinley Alaska, Microsoft, Employees' Retirement System of Hawaii, Stafford Capital Partners, John Doerr and Tom Steyer.

Exits

Small businesses software provider Ageras Group acquired invoicing software developer Zervant for an undisclosed amount. Philadelphia-based Ageras is backed by Investcorp Technology Partners, Rabo Frontier Ventures and Lugard Road Capital. Zervant, based in Helsinki, was backed by investors including Northzone, NFT Ventures and Conor Venture Partners.

Capillary Technologies, a customer loyalty and customer engagement services provider, acquired customer experience company Persuade for an undisclosed sum. Based in Singapore, Capillary is backed by Warburg Pincus, Sequoia Capital, Avataar Ventures and Filter Capital.

New Money

Factorial, a Barcelona-based HR software startup, closed an $80 million Series B round. Tiger Global Management led the funding, which included participation from CRV, Creandum and others.

ShopUp, a Bangladesh-based B2B commerce platform for small businesses, picked up a $75 million Series B investment. Valar Ventures led the round, which included support from VEON Ventures, Prosus Ventures, Flourish Ventures and Sequoia Capital India.

Point Card, a San Francisco-based provider of a debit card for millennials and Generation Z, completed a $46.5 million Series B round. Valar Ventures led the investment, which included contributions from Breyer Capital, Y Combinator Continuity and Human Capital.

Cohere, a Toronto-based provider of natural language processing models, secured $40 million in Series A financing. Index Ventures led the round, which included participation from Section 32, Radical Ventures and others. Mike Volpi, partner at Index Ventures, will join the company's board.

aPriori Technologies, a Concord, Mass.-based digital manufacturing software developer, snagged $30 million in Series D funding. Co-led by Bruce Clarke of PBJ Capital and Gaurav Tewari of Omega Venture Partners, the investment brings the company's valuation up to $280 million.

Tritium Holdings, an Australian developer of direct current fast charging technology for electric vehicles, landed a 40 million Australian dollar ($29.6 million) investment from Cigna Investments Inc.

DataChat Inc., a Madison, Wis.-based business data analytics provider, nabbed a $25 million Series A round. Redline Capital and Anthos Capital led the investment, which saw participation from Celesta Capital and Nepenthe Capital.

Vowel Inc., a video conferencing tool, raised $13.5 million in Series A funding led by Lobby Capital.

Ryd, a German startup offering a single digital payment service for drivers, collected a EUR10 million ($11.8 million) investment from bp ventures. Managing Partner Daniela Proske will join Ryd's board.

Zebedee Inc., a Hoboken, N.J.-based payment service provider for virtual worlds, grabbed an $11.5 million Series A round led by Lakestar. New investors including Initial Capital, New Form Capital and TVP also participated in the funding, along with existing backers Collab+Currency, Cadenza Capital and Fulgur Ventures.

Novi Connect, a San Francisco-based B2B marketplace focused on personal care, beauty and home goods, scored $10.3 million in new funding from investors including Greylock and Defy Partners.

GoKwik, an India-based ecommerce enablement startup, fetched $5.5 million in pre-Series A funding. Lead investor Matrix Partners was joined by RTP Global in the round.

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Around the Web

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(END) Dow Jones Newswires

September 08, 2021 09:51 ET (13:51 GMT)

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