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Egyptian ride-sharing company Swvl plans to go public in a $1.5B SPAC merger

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Cairo and Dubai-based ride-sharing company Swvl plans to go public in a merger with special purpose acquisition company Queen’s Gambit Growth Capital, Swvl said Tuesday. The deal will see Swvl valued at roughly $1.5 billion.

Swvl was founded by Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah in 2017. The trio started the company as a bus-hailing service in Egypt and other ride-sharing services in emerging markets with fragmented public transportation.

Its services, mainly bus-hailing, enables users to make intra-state journeys by booking seats on buses running a fixed route. This is pocket-friendly for residents in these markets compared to single-rider options and helps reduce emissions (Swvl claims it has prevented over 240 million pounds of carbon emission since inception).

After its Egypt launch, Swvl expanded to Kenya, Pakistan, Jordan and Saudi Arabia. The company also moved its headquarters to Dubai as part of its strategy to become a global company.

Swvl offerings have expanded beyond bus-hailing services. Now, the company offers inter-city rides, car ride-sharing, and corporate services across the 10 cities it operates in across Africa and the Middle East.

Queen’s Gambit, the women-led SPAC in charge of the deal, raised $300 million in January and added $45 million via an underwriters’ overallotment option focusing on startups in clean energy, healthcare and mobility sectors.

The statement also mentions a group of investors — Agility, Luxor Capital and Zain Group — which will contribute $100 million through a private investment in public equity, or PIPE.

Per Crunchbase, Swvl has raised over $170 million. From an African perspective, Swvl features as one of the most venture-backed startups on the continent. The company has been touted to reach unicorn status in the past and will when this SPAC merger is completed.

The company will aptly trade under the ticker SWVL. The listing will make it the first Egyptian startup to go public outside Egypt and the second to go public after Fawry. It will also make the mobility company the largest African unicorn debut on any U.S.-listed exchange, beating Jumia’s debut of $1.1 billion on the NYSE. Swvl joins music-streaming platform Anghami as the second startup in the region to go public via a SPAC merger in the Middle East.

Swvl had annual gross revenue of $26 million in 2020, according to the statement, and the company expects its annual gross revenue to increase to $79 million this year and $1 billion by 2025 after expanding to 20 countries across five continents.

On why Queen’s Gambit picked Swvl for this deal, Victoria Grace, founder and CEO, said in a statement that the company fit the profile of what she was looking for: “a disruptive platform that solves complex challenges and empowers underserved populations.”

“Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity,” she added.

In May, TechCrunch wrote that SPACs didn’t target African startups for several reasons, including a lack of global appeal and private capital and market satisfaction. Judging by Grace’s comments, Swvl has that global appeal and is ready to venture into the public market despite being in operation for just four years.

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Source: https://techcrunch.com/2021/07/28/egyptian-ride-sharing-company-swvl-plans-to-go-public-in-a-1-5b-spac-merger/

Crowdfunding

How Early Investors Can Profit From the Unicorn Explosion

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Unicorns used to be a rare breed. Not anymore. 

When Aileen Lee of Cowboy Ventures first coined the term “unicorn” — referring to startups worth $1 billion or more — in 2013, she identified 39 unicorns. The vast majority were valued below $5 billion. Apart from Facebook, the average was $3.6 billion. And 27 of them were based in the San Francisco Bay Area.

What a difference eight years makes!

2021 has seen a huge explosion in the number of unicorns. According to Crunchbase, the number of new unicorns has dipped below 39 in only one month of this year. In February, a mere 26 unicorns were born. The next lowest month, January, had 42. The highest so far was March with 58.

By comparison, the best-performing month for unicorns in 2020 only reached 24 companies — most months were much lower.  

As of the end of July, there were 942 unicorns in Crunchbase’s Private Company Unicorn Board. At their current rate of growth, unicorns will exceed the 1,000 mark sometime this month. They’re collectively worth more than $3 trillion. China-based ByteDance alone was valued at $180 billion in December 2020 and is now valued at $425 billion. Stripe boasts a valuation of $95 billion. SpaceX is valued at $74 billion. And when Robinhood went public in July, its valuation hit $32 billion.

The U.S. still dominates the unicorn club, but its membership is very much global. More than 150 unicorns come from China. Other major contributors include India, the U.K., Israel, Germany and South Korea.

Deal Flow Is Better Than Ever

So how does this explosion of unicorns from all over the world affect early stage investors? 

The chances of investors landing a unicorn are much higher than they were a few years ago. If you invest in a future unicorn at the seed stage, you’re going to make loads of money. But even 1,000 unicorns is a small fraction of the total universe of startups. Snagging a unicorn is still an extraordinarily difficult and rare feat. 

But since the number of startups valued at $1 billion and up has exploded, we can assume that the number of startups valued at $500 million or more has increased just as much, if not more. After all, it’s easier to reach a level of progress deserving of a $500 million valuation than a $1 billion valuation. Similarly, if $500 million startups are surging, we can assume that $300 million startups are too. And $300 million sounds pretty good when you’re investing in early-stage startups at valuations of $15 million to $20 million. 

What’s driving these bigger valuations? More capital is chasing a finite number of deserving startups — to the point where the amount of capital is overwhelming the growing number of excelling startups.  

Deal flow across the board has never been better.

Nowadays, everybody seems to want a piece of the startup investing space. Institutional investors from hedge funds, sovereign wealth funds, corporate startup funds, private equity funds and even mutual funds and pension funds are investing more in the startup space. And they’re driving up prices. 

Institutional investors are even getting into seed-stage startups. In a way, that’s surprising. Most institutional investors have historically avoided investing that early. But founders of these early-stage companies have done the math. If they’re going to be worth 30% more than anticipated down the road for meeting their milestones, the investment opportunity has more upside than previously thought. Later stage valuations are increasing to reflect this new calculus. 

Not every unicorn is accessible for U.S. investors — crowdfunders usually can’t invest in overseas pre-IPO startups. But nonetheless, U.S. investors should consider themselves lucky. They enjoy access to the biggest universe of startups because the vast majority of unicorns are based in the U.S. Every year the percentage of non-American-founded startups that find success gets bigger, which will become a problem for retail investors down the road. But it’s not a huge problem now.

In the meantime, the bar to build a successful early-stage startup portfolio has been lowered significantly. Unicorn hunting is fun — but remains a high-stakes game. And early-stage investors don’t need them to be successful. 

As an early investor, I only go after companies with unicorn-like upsides if the investing opportunity is derisked in some manner. Otherwise, I prefer investing in startups with estimated upsides of $300 million to $800 million. Even at the lower end of that range, profits are enormous. Getting a couple of $300 million startups in your portfolio isn’t easy. But the good news is that it’s not nearly as hard as it was just a year ago.


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Source: https://earlyinvesting.com/how-early-investors-can-profit-from-unicorn-explosion/

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TechCrunch, CrunchBase founder’s Arrington Capital launches $100m Algorand blockchain fund

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Digital asset management-focused Arrington Capital has launched a new $100m fund targeting development built on the Algo

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.altassets.net/private-equity-news/by-pe-sector/venturegrowth/techcrunch-crunchbase-founders-arrington-capital-launches-100m-algorand-blockchain-fund.html

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European VC soars in Q1

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A stunning first quarter in venture capital funding was not restricted to the United States; Europe also had one hell of a start to the year.

According to data from Dealroom and Crunchbase News, an investor, and an analyst from PitchBook, European startups put together an impressive fundraising haul. The venture capital world kicked off its 2021 European investing cycle with enough activity to set the continent on the path that would crush yearly records.


The Exchange explores startups, markets and money. 

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


Inside the data, there’s lots to unpack, including which sectors of European startups stood out in terms of capital raised, rising seed and late-stage deals, and dollar volume. We’ll also need to discuss exits — the Deliveroo IPO and its various woes was not the only transaction from the period worth understanding.

As with our prior looks at AI startup fundraising and the United States’ own blistering start to the year, we’ll lean on multiple sources to ensure that we have a wide lens. And we’ll keep in mind that all venture capital data lags reality somewhat, as many deals from a particular period are not disclosed or discovered until long after they actually occurred.

In this case, it makes the numbers all the more impressive. Let’s get into the data.

The big numbers

Dealroom was first out of the gate, reporting that European startups had a record quarter in Q1 2021 back when April just got started. Its preliminary results for the first quarter indicated that startups on the continent raised €16.6 billion, or $19.9 billion at today’s exchange rates.

That total was not only a record, but what Dealroom described as double the results of Q1 2020. While we’ve become slightly inured in recent months to the venture capital market’s rapid pace and capital-rich environment, it’s worth considering for a moment, as the first quarter of last year ended, how few of us would have guessed that just a year later — as COVID-19 still harms public health and disrupts life and business — we’d see numbers like this.

The Dealroom data, however, was not all records. Round volume by the group’s estimates was down from the year-ago period, if slightly better than the last few quarters. The general move toward the later-stage and larger-round venture capital market is alive and well in Europe.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://techcrunch.com/2021/04/19/european-vc-soars-in-q1/

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The Briefing: RVShare raises over $100M, Google disputes charges, and more

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

Subscribe to the Crunchbase Daily

RVShare raises over $100M for RV rentals

RVShare, an online marketplace for RV rentals, reportedly raised over $100 million in a financing led by private equity firms KKR and Tritium Partners.

Akron, Ohio-based RVShare has seen sharp growth in demand amid the pandemic, as more would-be travelers seek socially distanced options for hitting the road. Founded in 2013, the company matches RV owners with prospective renters, filtering by location, price and vehicle types.

Previously, RVShare had raised $50 million in known funding, per Crunchbase data, from Tritium Partners. The company is one of several players in the RV rental space, and competes alongside Outdoorsy, a peer-to-peer RV marketplace that has raised $75 million in venture funding.

Funding news

  • BrightFarms closes on $100M: Indoor farming company BrightFarms said it secured more than $100 million in debt and new equity capital to support expansion plans. The Series E round of funding was led by Cox Enterprises, which now owns a majority stake in the company, and includes a follow-on investment from growth equity firm Catalyst Investors.
  • Anyscale inks $40MAnyscale, the Berkeley-based company behind the Ray open source project for building applications, announced $40 million in an oversubscribed Series B funding round. Existing investor NEA led the round and was joined by Andreessen Horowitz, Intel Capital and Foundation Capital. The new funding brings Anyscale’s total funding to more than $60 million.
  • Klar deposits $15M: Mexican fintech Klar closed on $15 million in Series A funding, led by Prosus Ventures, with participation from new investor International Finance Corporation and existing investors Quona Capital, Mouro Capital and Acrew. The round brings total funding raised to approximately $72 million since the company was founded in 2019. The funds are intended to grow Klar’s engineering capabilities in both its Berlin and Mexico hubs.
  • O(1) Labs rakes in $10.9M: O(1) Labs, the team behind the cryptocurrency Mina, announced $10.9 million in a strategic investment round. Co-leading the round are Bixin Ventures and Three Arrows Capital with participation from SNZ, HashKey Capital, Signum Capital, NGC Ventures, Fenbushi Capital and IOSG Ventures.
  • Blustream bags $3M: After-sale customer engagement company Blustream said it raised $3 million in seed funding for product usage data and digital transformation efforts for physical goods companies via the Blustream Product Experience Platform. York IE led the round of funding for the Worcester, Massachusetts-based company with additional support from existing investors.Pillar secures another $1.5M: Pillar, a startup that helps families protect and care for their loved ones, raised $1.5 million in a seed extension to close at $7 million, The round was led by Kleiner Perkins.

Other news

  • Google rejects DOJ antitrust arguments: In the wake of a widely anticipated U.S. Justice Department antitrust suit against Google, the search giant disputed the charges in a statement, maintaining that: “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.”
  • Facebook said to test Nextdoor rival: Facebook is reportedly testing a service similar to popular neighborhood-focused social Nextdoor. Called Neighborhoods, the feature reportedly suggests local neighborhood groups to join on Facebook.

Illustration: Dom Guzman

Venture investors and leaders in the fintech space can visualize a future where such startups will move toward again rebundling services.

Root Inc., the parent company of Root Insurance, launched its initial public offering and is looking at a valuation of as much as $6.34 billion.

Clover Health posted rising revenues and a narrower loss in its most recent financial results, published in advance of a planned public market debut.

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

Source: https://news.crunchbase.com/news/briefing-10-21-20/

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