ISSUE 15



Instacart raises major funding round—again


Instacart has raised $150 million in fresh financing at a $4.35 billion valuation. The new funding, which was first reported by Axios and confirmed to PitchBook by an Instacart spokesperson, is an addition to capital raised earlier this year in the company's Series E and brings the round total to $350 million.


When Instacart closed on the first part of the funding in February, its valuation clocked in at $4.2 billion. That was already a significant jump for the San Francisco-based business, and now that the round is complete, the company has raised more than $1 billion total. We've taken a look at Instacart's funding & valuation history, along with select investors in each round:


2013: $10.8 million Series A | $25 million valuation | Sequoia, SV Angel
2014: $44 million Series B | $380 million valuation | Andreessen Horowitz, Sequoia
2015: $220 million Series C | $1.96 billion valuation | Kleiner Perkins Caufield & Byers, Comcast Ventures
2016: $36 million corporate round | $2 billion valuation | Whole Foods
2017: $413 million Series D | $3.41 billion valuation | Sequoia, Thrive Capital
2018: $350 million Series E | $4.35 billion valuation | Coatue Management


Although relatively small, the corporate round from March 2016 is particularly significant because it marks the partnership between Whole Foods and Instacart. At that time, the two companies teamed up in a deal that reportedly made Instacart the exclusive delivery partner for perishable items from Whole Foods. The deal was set to last for five years, which would mean it's expiring in 2021.


But when Amazon bought Whole Foods last year, the acquisition called that agreement—and Instacart's high valuation—into question. In early February, Amazon announced it would start delivery of Whole Foods products through Prime Now, something that seems to violate the Whole Foods-Instacart agreement, though there hasn't been an official comment on the status of that deal.


Some commentators predicted that Instacart would meet its demise with the Amazon-Whole Foods partnership, but in fact, its valuation has risen by more than $1 billion since the acquisition was announced. And in December, news emerged that revenue at the same-day delivery service was up 150% YoY.


Another win for Instacart is the recent agreement it penned with Sam's Club, a division of Walmart: Under the deal, Instacart has partnered with the membership-only warehouse chain to deliver groceries in several markets across the US. The relationship between the two companies could be major, as Instacart is reportedly in talks with Walmart for a bigger agreement. If Instacart becomes the deliverer of choice for Walmart, it would have a lock on nearly every major US grocer, adding to a roster that already includes Kroger, Publix and Albertsons.


By –PitchBook



China Now Has the Most Valuable AI Startup in the World


SenseTime Group Ltd. has raised $600 million from Alibaba Group Holding Ltd. and other investors at a valuation of more than $3 billion, becoming the world’s most valuable artificial intelligence startup.


The company, which specializes in systems that analyze faces and images on an enormous scale, said it closed a Series C round in recent months in which Singaporean state investment firm Temasek Holdings Pte and retailer Suning.com Co. also participated. SenseTime didn’t outline individual investments, but Alibaba was said to have sought the biggest stake in the three-year-old startup.


With the deal, SenseTime has doubled its valuation in a few months. Backed by Qualcomm Inc., it underscores its status as one of a crop of homegrown firms spearheading Beijing’s ambition to become the leader in AI by 2030. And it’s a contributor to the world’s biggest system of surveillance: if you’ve ever been photographed with a Chinese-made phone or walked the streets of a Chinese city, chances are your face has been digitally crunched by SenseTime software built into more than 100 million mobile devices.


The latest financing will bankroll investments in parallel fields such as autonomous driving and augmented reality, cover the growing cost of AI talent and shore up its computing power. It’s developing a service code-named “Viper” to parse data from thousands of live camera feeds -- a platform it hopes will prove invaluable in mass surveillance. And it’s already in talks to raise another round of funds and targeting a valuation of more than $4.5 billion, according to people familiar with the matter.


“We’re going to explore several new strategic directions and that’s why we shall spend more money on building infrastructure,” SenseTime co-founder Xu Li said in an interview. The company turned profitable in 2017 and wants to grow its workforce by a third to 2,000 by the end of this year. “For the past three years the average revenue growth has been 400 percent.”


Alibaba, the e-commerce giant that’s also the country’s biggest cloud service provider, could help with its enormous infrastructure needs. SenseTime plans to build at least five supercomputers in top-tier cities over the coming year to drive Viper and other services. As envisioned, it streams thousands of live feeds into a single system that’re automatically processed and tagged, via devices from office face-scanners to ATMs and traffic cameras (so long as the resolution is high enough). The ultimate goal is to juggle 100,000 feeds simultaneously.


Police can use Viper to track everything from vice and accidents to suspects on blacklists. While civil libertarians say such systems have been used to track activists and oppress minorities in places like the Western region of Xinjiang, Xu believes the technology is essential and deployed in various ways by authorities around the world. China’s police forces and surveillance footage are also important sources of training data for SenseTime’s image recognition systems -- it claims to work with 40 city authorities in the country.


“It will not affect privacy because only authorized persons can access it,” he said.


SenseTime claims some 400 clients and partners including Qualcomm, chipmaker Nvidia Corp. and smartphone maker Xiaomi Corp. For 2018, it’s projecting several billion yuan in revenues, Xu said. The startup’s expanding its reach across augmented reality, popularized by services like Snapchat that impose digital stickers and images on the real world. And it’s working with Honda Motor Co. to develop autonomous driving systems and is in talks to work with health institutions.


“In China there is an advantage in areas like facial recognition because of the privacy that exists in the U.S. and elsewhere in the EU, and some of the very best facial recognition technology in the world that I’ve seen is in China,” said Breyer Capital founder Jim Breyer, an indirect investor in SenseTime through IDG.


SenseTime is the largest, according to CB Insights, of a plethora of private AI outfits. Fellow facial-recognition startupMegvii Inc. raised $460 million last year, while smaller niche players from Yitu to Malong Technologies have also won funding. A key partner, Hangzhou Hikvision Digital Technology, is one of the world’s biggest suppliers of security cameras and developing its own competing AI technology.


Xu says its ability to work across wide datasets and diverse products sets it apart from rivals. “What is difficult is if you’re dealing with different video streams in different formats,” he said. While the company has long considered an initial public offering, Xu said those plans are on hold pending rules that facilitate tech listings in mainland China.


“We are still waiting for a fixed rule to come up with a new strategy,” he said. “Probably not this year.”


By–Bloomberg


Boeing Nabs $12.3 Billion Deal for 47 Dreamliners


American Airlines Group Inc. ordered 47 Boeing Co. 787 Dreamliners for long-range flying, expanding its fleet of the advanced carbon-composite jetliners and dealing a blow to Airbus SE’s ambitions to expand its wide-body aircraft sales in the U.S.


In a related move, American canceled an order for 22 of Airbus’s twin-aisle A350 jets, a purchase placed by predecessor carrier US Airways, according to a statement Friday. The Boeing deal is worth a total of $12.3 billion before customary discounts.


The move underscores the difficulty that Airbus has faced in the U.S. -- the largest aviation market and a Boeing stronghold. The Dreamliner deal marks the second time this year that Boeing has convinced an Airbus wide-body customer in the U.S. to switch to the 787. Hawaiian Airlines, the sole customer for Airbus’s A330-800, decided last month to order 10 Dreamliners instead.


Adding more of the fuel-efficient Boeing aircraft will allow American to simplify its fleet and shed some of its oldest long-range jets. Bloomberg had first reported March 23 that American had ruled out a competing Airbus bid for the A330neo.


Streamlining Goal


“This was a difficult decision between the Boeing 787 and the Airbus A350 and A330neo,” Robert Isom, American’s president, said in the statement. “In the end, our goal to simplify our fleet made the 787 a compelling choice.”


With the plan, American will reduce the number of wide-body aircraft types it flies to three from five, reducing maintenance and training costs. American previously said the number of A350s it had ordered was too small for it to operate profitably. It already plans to shed another small fleet of 20 Embraer SA E190 jets. American had delayed taking the A350s in both 2016 and 2017.


The deal includes 22 787-8s, the smallest member of the jet family, and 25 of the 787-9 variant -- more than doubling American’s fleet of Dreamliners, Boeing’s most-advanced aircraft. All of the new 787s will be powered with General Electric Co.’s GEnx-1B engines.


The 787-8s will begin arriving in 2022, followed a year later by the first of the 787-9s, the carrier said. American will use the planes to replace aging Boeing 767-300s and, later, its Airbus A330-300s and the oldest of its Boeing 777-200s.


Order Deferral


American also deferred delivery of 40 Boeing 737 Max narrow-body planes to between 2025 and 2026. The aircraft originally were to arrive in 2020-2022. The deferral will better match future planned retirements, the carrier said.


Airbus has said it has a series of ongoing sales campaigns for the A330neo with more than 100 airlines that currently operate the older version of the plane. The 250-seat A330-800 is on track for its first flight in the middle of this year, with the bigger -900 variant set to enter into service around the same time with launch operator TAP -- Air Portugal.


From – Bloomberg


Swiss Aviation Consulting may bid for Air India assets: Economic Times


Aviation advisory firm Swiss Aviation Consulting (SAC) has shown interest in bidding for India’s debt burdened state-run carrier Air India, the Economic Times newspaper quoted a senior aviation ministry official as saying.


The move, however, did not look serious and the Swiss company may only be scouting for clients, the newspaper said, citing industry experts.


Swiss Aviation Consulting offers services including aircraft asset management and sales and consultancy services on acquisitions, according to its website.


Air India and Swiss Aviation Consulting did not respond to emails seeking comment outside business hours.

Last week, top Indian carrier Interglobe Aviation Ltd, owner of the IndiGo brand, said was opting out of buying Air India because the terms set by the government were unfavorable. Tata Group and Turkey’s Celebi Aviation Holdings, have expressed interest in buying some of Air India’s operations.


The Indian government, which fully owns money-losing flag carrier Air India, put the company on the block late last month, seeking to sell a 76 percent stake.


Indian Prime Minister Narendra Modi’s cabinet gave the go-ahead last year to sell Air India after successive governments spent billions of dollars to keep it solvent, but its debt load of about $8 billion and a bloated cost structure have made a sale difficult.



From – Reuters


Here's how much Dropbox really raised with its IPO


Just about two weeks after Dropbox raised $756 million on the day of its public market debut, the file-sharing company has tacked an additional $113 million on to the total amount brought in through the public offering.


Underwriters have exercised their option to purchase another 5.4 million shares at the original IPO price of $21 per share—a smart decision, given that shares of Dropbox (NASDAQ: DBX) closed at $30.85 on Wednesday.


For the San Francisco-based company, parting with the additional shares means it has raised a total of $869 million in the IPO. That number rises to a little over $969 million when taking into account the roughly 4.8 million shares Dropbox sold to Salesforce Ventures in a concurrent private placement. Altogether, Dropbox received $776.7 million in gross proceeds via the IPO and Salesforce sale, while stockholders who sold their shares brought in $192.7 million.


With the additional purchase, Dropbox, which was one of the most valuable private companies in the US before it went public, is valued at about $12.3 billion, per a PitchBook estimate. That's a big jump up from the $9.2 billion the company was worth on a fully diluted basis in its IPO on March 23.


Taking advantage of the so-called greenshoe option, which allows underwriters to procure and sell more shares to investors than originally planned if demand is high, is fairly common in public offerings. We've taken a quick look at other big-name tech companies that have granted underwriters the option to purchase additional shares in the weeks following their public offerings.


Three companies that have exercised the greenshoe option—and one that won't

In what was arguably the most high-profile IPO of 2017, Snap raised $3.4 billion by selling 200 million shares. The Snapchat parent then sold an additional 30 million shares at its IPO price of $17 per share to its underwriters, pushing the total amount raised to just about $3.9 billion.


When it went public in 2013, Twitter raised $1.8 billion by selling 70 million shares at $26 each. But the micro-blogging company also sold 10.5 million shares to its underwriters after the fact, raising $273 million more and pushing the total amount raised to more than $2 billion.


Facebook conducted one of the biggest IPOs ever back in 2012, but it was also a good example of a major greenshoe event. The social media giant went public by selling 421 million shares at $38 each, raising an incredible $16 billion. Then underwriters purchased 63 million additional shares at the same price, raising another $2.4 billion.


Spotify, the other high-profile VC-backed company that's gone public this year, won't see a greenshoe option at work. Because the music streaming company went public via a direct listing, it doesn't have underwriters, thus eliminating any chance that additional shares will be sold.


From – Bloomberg



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