Category Archives: Softbank

Postmates lines up another $100M ahead of IPO

Postmates, one of the earlier entrants to the billion-dollar food delivery wars, has raised an additional $100 million in equity funding at a $1.85 billion valuation, as first reported by Recode and confirmed to TechCrunch by Postmates. The round comes four months after the eight-year-old startup drove home a $300 million investment that finally knocked it into “unicorn” territory.

New investor BlackRock has joined the funding round alongside Tiger Global, which served as the lead investor of Postmates’ September financing. Led by co-founder and chief executive officer Bastian Lehmann, the company has garnered a total of $681 million in venture capital funding from investors, including Spark Capital, Founders Fund, Uncork Capital and Slow Ventures.

In line with several other tech unicorns, Postmates has begun prep for an initial public offering that could come this year, including tapping JPMorgan to advise the float. As Recode pointed out, the $100 million capital infusion was probably less of a necessary funding event but rather an opportunity for existing investors to liquidate stock ahead of an exit.

Postmates, which completes 3.5 million deliveries per month, reportedly expected to record $400 million in revenue in 2018 on food sales of $1.2 billion. The company has not confirmed that figure nor disclosed any other 2018 revenue numbers. The company currently operates in more than 500 cities, recently tacking on another 100 markets to reach an additional 50 million customers.

It will be interesting to see how Wall Street responds to a Postmates public listing. Though it was an early player in what has become an extremely crowded market, Postmates never emerged as the leader in food delivery. Now, with supergiants like Uber dominating via Uber Eats and SoftBank funneling loads of capital into Postmates competitor DoorDash, it shouldn’t count on an oversubscribed IPO.

Why SoftBank invested $2.25 billion in Cruise

Earlier today, General Motors’ Cruise received a $2.25 billion investment from SoftBank’s Vision Fund. Once that deal closes, GM will invest another $1.1 billion.

SoftBank landed on Cruise because it’s one of “a handful that in our view have a meaningful opportunity in front of them,” SoftBank Vision Fund Managing Partner Michael Ronen told TechCrunch. Cruise’s integrated play of hardware and software attracted SoftBank, Ronen said, as well as the fact that Cruise’s spirit, creativity and energy “has not been diminished at all.”

These investments are expected to enable Cruise to deploy commercially starting next year. But what’s most important about this investment to Cruise CEO Kyle Vogt, he told TechCrunch, is the fact that Cruise — which sold to GM for more than $1 billion in 2016 — now has stock and equity in the company again.

That’s because “we’re in a war right now to attract the greatest minds in the world to work on this,” Vogt told me. And in order to keep those great minds on board and continue attracting new ones, Vogt said he wants to give them a chance to “participate in the value we create.”

“From my standpoint, it’s like we’re a startup all over again,” he told me.

Based on Cruise’s rate of improvement in self-driving testing, the company is still on track to commercialization next year, GM President Dan Ammann told TechCrunch. Regarding what that commercialization looks like has yet to be determined.

While Cruise’s service will be a consumer-facing experience and network, “we remain open to other opportunities to partner with folks if and when that makes sense,” Ammann said. He added that partnering with SoftBank, which has invested in ride-hailing companies like Didi, Uber and Grab, brings an ecosystem and relationships along with it.

TOKYO, JAPAN – MAY 10: SoftBank Group Corp. Chairman and Chief Executive Officer Masayoshi Son speaks during a press conference on May 10, 2017 in Tokyo, Japan. SoftBank announced net profit for its fiscal year ending 31 March today reporting a record profit of 1.43 trillion yen ($12.5 billion). (Photo by Tomohiro Ohsumi/Getty Images)

But before Cruise gets to commercialization, the company needs to be confident in its safety abilities — especially in light of the fatal crash in March involving one of Uber’s self-driving cars.

“Our ultimate decision to go fully driverless will be gated by safety and whether we’re operating at a certain level of safety,” Ammann said.

Ammann declined to comment on the specifics of its safety metrics and assessments, but said Cruise is engaged with regulators to make those types of assessment.

“You should assume we have a very deep understanding of what that looks like and how we measure it, but we don’t want to share detail on that at this time,” Ammann said.

SoftBank’s Ronen echoed GM’s Ammann comments about safety and commercial deployment, noting these are early days and it’s important to get the technology and safety right.

Cruise and GM’s fourth generation steering wheel-free car

“This is the first time we’ll all be putting our lives in the hands of robots, literally, daily and if the safety is not there, nothing is going to work, no matter what form you put it in on the road,” Ronen said.

Once Cruise gets to that point, the next step is to determine the best option for deployment. And, as Ronen pointed out, it’s not like the U.S. will suddenly be filled with Cruise’s autonomous cars in 2019. Instead, he said, “it’s going to be a gradual process.”

Earlier this year, Cruise CTO AG Gangadhar, formerly of Uber, left his role at the company. Vogt is currently operating as CEO and CTO of Cruise, and he told me he loves it.

“I’m really enjoying this,” Vogt said about being acting CTO. “So this is the way it’s going to be for the foreseeable future.”

After buying Flipkart, Walmart seeks allies to join its fight against Amazon in India

The rumors are true: Walmart has bought a controlling stake in India’s Flipkart. This isn’t a straight-up acquisition, however, because, rather than going it alone, the U.S. retailer is enlisting strategic allies as it takes its fight to Amazon in a new region.

Walmart has an existing offline retail business in India, but enter the online space puts it up against Amazon, which has made massive strides since entering India in 2012.

That perhaps calls for something special, which is one reason why Walmart is buying just 77 percent of Flipkart and leaving space for others with expertise to come join.

Walmart confirmed that “some” existing investors will retain their stakes, including Tencent the $500 billion Chinese giant — and Tiger Global, both of which have board sets, and Microsoft, which was part of a $1.4 billion investment last year. Added to that, Flipkart co-founder Binny Bansal has committed to stay retain his shares, although there’s no word on fellow co-founder Sachin Bansal who had been tipped to move on.

Beyond those three strategic Flipkart backers, Walmart said it is in ongoing discussions with “with additional potential investors who may join the round.”

Google is one who has been linked with a deal but you can imagine that Walmart — very much a physical retail specialist — will be looking to tap the world of tech and Asian partners to help gain an advantage over Amazon, which is broadly thought to have closed the gap on Flipkart in recent years.

Walmart is indicating that the new backers will buy a part of its equity if they invest, but it said it will “retain clear majority ownership” regardless of who joins.

“One of the things that was important to us here was having partners alongside us as well. So having Tencent, Microsoft and Tiger Global who are already investors in this business is really powerful in terms of the model that we’re creating,” Judith McKenna, Walmart COO, said on a call with investors following today’s announcement.

“[Flipkart] will be run through an independent board who will have some Walmart representation. We think that structure will best keep the entrepreneurial side of this business and guide it strategically, too,” McKenna added.

Walmart declined to give a timeline on when it might have news about the prospective investors.

Despite that, a number of investors have exited entirely with impressive returns, including SoftBank — which sunk a then-Indian record investment into Flipkart via its Vision Fund last year — Naspers and eBay.

In the more immediate future, Walmart is putting $2 billion of fresh capital into the business which Flipkart will be able to spend on growth and existing strategies.

Interestingly, too, Walmart is open to allowing Flipkart to IPO as a listed subsidiary in the future. That would help maintain incentives for employees and fulfill the ambition of management, McKenna said.

Watch these robotic soccer players play a nail-biter of a match

As a hater of all sports I am particularly excited about the imminent replacement of humans with robots in soccer. If this exciting match, the Standard Platform League (SPL) final of the German Open featuring the Nao-Team HTWK vs. Nao Devils, is any indication the future is going to be great.

The robots are all NAO robots by SoftBank and they are all designed according to the requirements of the Standard Platform League. The robots can run (sort of), kick (sort of), and lift themselves up if they fall. The 21 minute video is a bit of a slog and the spectators are definitely not drunk hooligans but darn if it isn’t great to see little robots hitting the turf to grab a ball before it hits the goal.

I, for one, welcome our soccer-playing robot overlords.

Alibaba is preparing to invest in Grab

Fresh from announcing a deal to buy out Uber in Southeast Asia, Grab looks set to gain further firepower with Chinese e-commerce giant Alibaba preparing to invest in the ride-hailing firm.

Alibaba is in the early stages of making an investment in Grab, two sources with knowledge of discussions told TechCrunch. Isn’t yet clear what size that might be or at what valuation for Grab, which was last valued by investors at $6 billion.

In addition, the timing is unclear due to current anti-trust investigations into the Grab-Uber deal. The Competition Commission of Singapore has said there are grounds to believe the merger may violate the law, while other countries are looking into its implications. But still, there is intent from both sides and key investor SoftBank to make the deal.

Grab declined to comment for this story. An Alibaba spokesperson said the company “doesn’t confirm on market rumors.”

Alibaba and Grab first held talks over an investment last summer but a deal never materialized after the Chinese firm became pre-occupied chasing an investment in Tokopedia, the Indonesia-based e-commerce unicorn. That deal was prioritized because Alibaba’s arch-rival Tencent was in advanced talks over an investment that could give it a foothold in Indonesia, Southeast Asia’s largest economy and the world’s fourth most populous country.

Alibaba leaned heavily on its long-time ally SoftBank — an early backer of Tokopedia and Grab — to get the Tokopedia deal ahead of Tencent. That’s despite Tokopedia’s own founders’ preference for Tencent due to Alibaba’s ownership of Lazada, an e-commerce rival to Tokopedia. SoftBank, however, forced the deal through.

“It was literally SoftBank against every other investor,” a separate source with knowledge of negotiations told TechCrunch.

Ultimately, Alibaba was successful and it led a $1.1 billion investment in Tokopedia in August which did not include Tencent.

TechCrunch understands that one condition SoftBank attached to the Tokopedia deal was that Alibaba would invest in Grab when the time was right. SoftBank is widely seen to have been the deal-maker in the recent Grab-Uber consolidation and now, with that transaction agreed, Alibaba’s investment will follow.

The timing may be ideal for Grab. While it has plenty of money in the bank from past investments, Indonesian rival Go-Jek is preparing to expand into regional markets so the firm will need to brace itself for a new wave of competition.

Despite the background, this is far from Alibaba being strong-armed into an investment, a deal with Grab makes plenty of sense for the firm.

It has been actively seeking investment deals in Southeast Asia’s top internet companies for some time, and Grab clearly fits the bill. In particular, Grab’s focus on payments and its recently-announced financial services play is aligned with Alibaba and its fintech arm Ant Financial’s goals, too.

Last year, Ant Financial went on an investment spree which included multiple investments deals across Southeast Asia and the failed acquisition of MoneyGram. Involvement in Grab Pay, which is shaping up to be a major payment player across the region, would massively boost Alibaba and Ant’s objective.

Finally, there’s the good old competition factor. With Tencent an investor in Grab rival Go-Jek, Alibaba has motivation enough to back a horse in Southeast Asia’s ride-hailing space.

As I wrote last year, the two Chinese internet giants have been carving up Southeast Asia’s most promising startups in search of investments that give them a good position as the region’s internet economy grows.

A report co-authored by Google last year forecast that Southeast Asia’s internet economy will grow to $200 billion in 2025 from $50 billion in 2017. Right now, it is Chinese companies, not those from the U.S., that are seizing the opportunity.


Got a news tip? You can contact TechCrunch reporter Jon Russell via his jr@techcrunch.com email, Twitter DM, or @jonrussell on Telegram. Message privately for phone number or Signal account.

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