Ant could top $200B valuation in dual IPO

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The Daily Pitch: VC

July 21, 2020

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Today's Top Stories

Construction tech and a V-shaped VC recovery

In many ways, the pandemic is turning into a test of how well investors and companies can adapt. That's true across venture capital as a whole. And a microcosm of the trend can be found in construction tech.

Venture capital reporter Priyamvada Mathur joins the latest episode of PitchBook's "In Visible Capital" podcast to discuss a pair of recent stories examining how these uncertain times are shifting attitudes among VCs in general and construction startups in particular. Questions covered include:

How has COVID-19 accelerated digital transformation in the construction industry?
Why have VC firms and startups struggled to adapt to a new economic reality?
Do investors think we're headed for a V-shaped recovery?

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More coronavirus news: Continuing coverage from PitchBook

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Alibaba-backed Ant targets dual IPO in Shanghai, Hong Kong

Shares of Ant Group may soon be traded in Shanghai.
(Yifan Ding/Getty Images)

Chinese fintech giant Ant Group has announced plans for a dual IPO listing on the Hong Kong Stock Exchange and Shanghai's STAR market. The VC-backed company is reportedly seeking a valuation above $200 billion and would be among this year's largest IPOs. It was last valued at a reported $150 billion in mid-2018.

Ant is the parent company of payment platform provider Alipay. Alibaba owns a third of Ant; other investors include Warburg Pincus, Singapore's sovereign wealth fund GIC, CCB Trust and funds operated by the Chinese government.

"This is going to be a big win for STAR Market—hosting one of the most valuable VC-backed companies in the world," said Ted Chan, a PitchBook analyst who covers China. Launched last year, the Shanghai Stock Exchange's STAR board aims to be the home of China's tech industry and a rival to the Nasdaq.

The listing could also be a sign of hesitancy among Chinese companies to list on US exchanges, as trade tensions between the two countries worsen, Chan said. The US Senate passed a bill in May that could bar Chinese firms from US exchanges if they don't meet new audit requirements.

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Chinese electric carmaker Xpeng charges up with $500M

Xpeng, the Chinese electric vehicle maker that rivals Tesla, has secured a Series C+ of roughly $500 million from investors including Aspex, Coatue, Sequoia China and Hillhouse Capital. With the funding, Xpeng has raised $900 million in less than a year.

The company received a $400 million capital injection last November from backers that included smartphone developer Xiaomi.

Last month, Xpeng began the delivery of its P7 sports sedan. A version of the vehicle can travel up to 706 kilometers on a single charge, which the company said is the longest range among electric vehicles in China.

Xpeng's latest financing comes after Beijing-based competitor Li Auto filed for an IPO earlier this month and rival Nio reportedly secured credit lines worth 10.4 billion yuan (around $1.5 billion).

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Venture activity adapts in a landscape of lockdowns

Venture capital is a people business. But the board meetings, industry conferences, coffee meet-ups and elevator pitches that typically grease Silicon Valley's dealmaking skids were absent during the second quarter of the year, as the pandemic continued to change the ways the industry operates—both in terms of relationships and the kinds of deals still getting done.

There were certainly shifts in the venture scene during the first full quarter dominated by the coronavirus crisis. But none were seismic, according to the Q2 2020 PitchBook-NVCA Venture Monitor, sponsored by Silicon Valley Bank and Certent, which now includes new league tables ranking the industry's most active players. The report examines why VC investment has already begun to pick up again and offers several other key takeaways, including:

VC-backed exits are on pace for their lowest annual total in nearly a decade
Firms' desire to protect existing investments helped late-stage deal counts rise above early-stage transactions in Q2
A series of mega-funds have boosted overall fundraising totals

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Recommended Reads

ScaleFactor raised $100 million in venture capital on the promise of replacing accountants and bookkeepers with AI. As it turned out, though, it was a difficult promise to keep. [Forbes]

Airlines in the US are preparing for a potentially crushing possibility: Much of the high-priced business travel that has long been the lifeblood of the industry could vanish for good. [Bloomberg]

More than a decade after the global financial crisis nearly tore Wall Street apart, investment banks are having a moment amid the pandemic. [Vanity Fair]

Since yesterday, the PitchBook Platform added:

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VC valuations

388

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Funds

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Quick Takes


	The Daily Benchmark
	2007 Vintage Global PE Funds between $500M-$1B
	People
	SolarEdge co-founder joins Grove Ventures
	VC Deals
	Sibros drives off with $12M Series A
	Afresh brings in $12M
	Ready, Set, Food! secures $3M
	Portfolio Companies
	YouPlus founder charged with fraud
	Exits
	Indian insurance platform PolicyBazaar eyes 2021 IPO
	Tax software company Vertex sets IPO terms

The Daily Benchmark

2007 Vintage Global PE Funds between $500M-$1B

Median IRR

8.40%

Top Quartile IRR Hurdle Rate

15.11%

1.53x

Median TVPI

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Veritas Capital Fund III

Nautic Partners VI

Harvest Partners V

*IRR: net of fees

18 Funds in Benchmark »

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People

SolarEdge co-founder joins Grove Ventures

Tel Aviv-based Grove Ventures has hired Lior Handelsman as a partner. Handelsman is a co-founder of SolarEdge, an solar energy tech startup that went public in 2015. Grove, which invests in deep tech sectors such as AI and semiconductors, closed its second fund on $123 million in February.

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VC Deals

Sibros drives off with $12M Series A

Sibros has raised $12 million in a round led by Nexus Venture Partners, with participation from Moneta Ventures and Twin Ventures. The San Jose-based company is the developer of a connected vehicle platform designed for automakers to collect data, predict failure detection and customize software.

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Afresh brings in $12M

Food supply chain startup Afresh has raised $12 million in a round led by Innovation Endeavors, with Maersk Growth, Food Retail Ventures, Baseline Ventures and Impact Engine also participating. The San Francisco-based company plans to use the funding in part to add grocery partners to its platform.

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Ready, Set, Food! secures $3M

Ready, Set, Food! has raised $3 million in a round co-led by Danone Manifesto Ventures, AF Ventures, and angel investor Mark Cuban. Founded in 2017, the company is the creator of food products designed to reduce the risk of severe food allergies among babies.

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Portfolio Companies

YouPlus founder charged with fraud

Federal authorities have filed criminal fraud charges against the CEO and founder of software startup YouPlus, an online video-search platform, saying he misled investors about the company's finances and revenue sources. The SEC alleged that from 2018 to 2019, Shaukat Shamim falsely told investors that YouPlus had millions of dollars of revenue and more than 100 different business customers, when in fact it had earned less than $500,000 and had only four paying customers. YouPlus had raised less than $1 million in venture capital, according to PitchBook data. Shamim couldn't immediately be reached for comment.

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Exits

Indian insurance platform PolicyBazaar eyes 2021 IPO

Indian online insurance platform PolicyBazaar plans to seek a public listing in 2021 at a valuation of more than $3.5 billion, according to Bloomberg. The company also reportedly plans to raise $250 million before the listing that would value it at more than $2 billion. PolicyBazaar is now choosing two to three lead IPO underwriters and is looking to raise $500 million in the offering, also according to Bloomberg. The company counts SoftBank's Vision Fund, Tencent and Tiger Global as backers.

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Tax software company Vertex sets IPO terms

Vertex, a provider of tax software, is set to offer around 21.2 million shares priced at $14 to $16 apiece in its initial public offering. At the midpoint of that range, the company would raise $317.3 million and hit a market value of $2.1 billion. King of Prussia, Pa.-based Vertex plans to use a portion of its net proceeds to pay off debt, according to an SEC filing.

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