Deal of the week
COVID-19 might be the thread that runs through every business trend in 2020. Half way through the year, one theme is the belief that delivery is worth betting on in the near and long term.
Take DoorDash, the popular American food delivery company and my deal of the week. The company raised about $400 million in a Series H round at a valuation slightly under the $16 billion mark. The round had been expected, although it’s worth noting that the final valuation of the deal came in $1 billion higher than earlier reports had indicated.
DoorDash has aggressively raised capital throughout its life, including a huge Series G in late 2019 that valued it near $13 billion. Lest you forget, the company privately filed to go public earlier this year. Those plans were pushed back likely due to the COVID-19 pandemic and the economic uncertainty that it continues to spread.
The question is then, where does DoorDash go from here? The company is at war with the Uber Eats service, the Postmates delivery service and the Grubhub-Just Eat Takeaway hybrid. It’s also facing a legal battle with San Francisco. The SF district attorney initiated a lawsuit against DoorDash on June 16 over allegations that it illegally misclassified employees as independent contractors. Comments from SF DA Chesa Boudin suggests the city is ready for a protracted fight.
“I assure you this is just the first step among many to fight for worker safety and equal enforcement of the law,” Boudin tweeted this week.
That means capital requirements are not fading away anytime soon. Nor is the ever looming threat — or opportunity, depending on where you sit — of consolidation.
We know that Uber, still smarting from its failed deal to buy Grubhub, is itching to expand the market share of its Eats food delivery business. Uber has stated that consolidation, in its view, is a path to profitability. It also said it “that doesn’t mean we are interested in doing any deal, at any price, with any player.”
DoorDash, loaded with a fresh injection of capital, could bypass private investors and a merger play and opt for door No. 3: public markets. Companies like Nikola Motor and Vroom recently made the leap despite weak economics in their core businesses.
Other deals that got our attention …
Mapillary, the startup that has developed a street-level imagery platform that uses computer vision to automate and scale mapping, has been acquired by Facebook. Mapillary team and project will become part of Facebook’s broader open mapping efforts, TechCrunch’s Steve O’Hear reported. I’ve been following Mapillary because of how its platform could be used in the transportation sector, specifically in the development of autonomous vehicles. Jan Erik Solem, the founder of Mapillary is on a bit of a roll. Solem launched Mapillary in 2014 after selling his first computer vision company to Apple. You can read more about the company in this blog post from Solem.
SuperAnnotate is an interesting little startup that launched in February. The company, which just raised $3 million in seed funding, developed an image annotation platform for labeling teams and data scientists. Basically, it has created a toolkit for manual labeling, a simple communication system, recognition improvement, image status tracking, templates, dashboards and other essential tools. SuperAnnotate is one of those “picks and shovels” companies, a term I use to describe businesses that are poised to make big bucks providing tools for the autonomous vehicle industry. But this platform has applications beyond AVs and can also be used in robotics, retail, satellite imagery, security, and medical imaging.
Splyt, a UK-based company that developed software to simplify ride hailing, raised $19.5 million in a round led by SoftBank. Splyt has raised a total of $35 million.
Volkswagen invested another $200 million into QuantumScape, a Stanford University spinout developing solid-state batteries as the automaker bets on a next-generation technology that will unlock longer ranges and faster charging times in electric vehicles.
Israeli startup CENS, which developed nanotechnology to improve the
performance of batteries used in electric vehicles, drones and solar energy storage plants, raised $1.5 million in a round led by the UK based investor Vincent Tchenguiz at Consensus Group.
The City of Fort Worth approved a $68.9 million economic incentive package for Linear Labs, a startup developing an electric motor for cars, scooters, robots, wind turbines and even HVAC systems. The company is planning to secure a 500,000-square-foot facility for its research and production center that will manufacture electric motors. The four-year-old company was founded by Brad and Fred Hunstable, who say they have invented a lighter, more flexible electric motor. The pair came up with the motor they’ve dubbed the Hunstable Electric Turbine (HET) while working to design a device that could pump clean water and provide power for small communities in underdeveloped regions of the world.
BYD Co., the Chinese auto giant backed by Warren Buffett, secured 800 million yuan ($113 million) in a Series A+ round for its chipmaking arm, BYD Semiconductor.
GoFor Industries, a Canadian startup that developed an on-demand last-mile delivery service for the construction industry, has raised C$9.8 million in seed funding.
Dumpling, a startup based in Seattle and Berkeley, Calif., raised $6.5 million in Series A funding round led by Forerunner Ventures. The startup helps users launch and run independent grocery shopping and delivery businesses.
Bitauto Holdings Ltd., the Chinese car comparison website, agreed to be taken private by an investor group backed by gaming and social media firm Tencent Holdings for $1.1 billion in cash, per Reuters.
TriEye, an Israeli startup that’s working on a sensor technology to help vehicle driver-assistance and self-driving systems see better in poor weather conditions, announced a collaboration with DENSO to evaluate its CMOS-based Short-Wave Infrared camera called Sparrow. Porsche, which took a minority stake in TriEye last year, is also evaluating the Sparrow camera.
This is more of an infrastructure play, but interesting nonetheless. ECOncrete, an Israeli startup that has developed eco-friendly concrete technology used in the construction of breakwaters, seawalls and piers, raised $5 million in a round led by Bridges Israel. Technology investment house Goldacre also participated in the round. ECOncrete part of the company’s RElab 2020 PropTech cohort — its accelerator program.
And under the “lol” category …
Hertz, which filed for bankruptcy last month, halted its $500 million stock offering after the U.S. Securities and Exchange Commission told the rental company it would review its controversial plan to sell shares that could soon be wiped out completely. I am shocked I tell you. Shocked.
Hertz had planned to issue a $500 million stock offering following approval from the U.S. Bankruptcy Court for the District of Delaware . Last week, the court gave Hertz permission to sell up to 246.8 million unissued shares (about $1 billion) to Jefferies LLC.
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