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Singapore’s Neuron Mobility raises $18.5M to bring its electric scooters to more international markets
Neuron Mobility, a Singapore-based startup, has closed an $18.5 million financing round as it looks to scale its e-scooter startup in international markets — a month after the nation introduced difficult regulatory changes.
The new financing round, dubbed Series A, was funded by GSR Ventures, a venture capital firm that was the first institutional investor in Chinese ride-hailing giant DiDi Chuxing, and Square Peg, Australia’s largest venture capital firm.
Existing investors SeedPlus and SEEDS Capital also participated in the round. The three-year-old startup has raised about $23.5 million to date.
Neuron Mobility, which began its journey in Singapore, operates an eponymous e-scooter rental platform. In recent years and quarters, Neuron has expanded to cities in Malaysia, Thailand, Australia and New Zealand.
Neuron’s e-scooters are affordable in every market where they are available. In Brisbane, Australia, for instance, anyone can begin a trip with a Neuron bike by paying one Australian Dollar (68 U.S. cents) and then 38 Australian cents for each minute of the ride, Zachary Wang, co-founder and chief executive of Neuron, told TechCrunch in an interview.
These electric scooters can go as fast as 25 kilometre per hour (15.5 miles per hour), and automatically slow down at certain places, such as near a school. Wang said the startup closely works with city councils to understand how these e-scooters should operate.
In a statement, Square Peg’s Tushar Roy said, “the culture of collaboration with cities permeates through Neuron. Its entire DNA is built around working very closely with local leadership to bring new mobility solutions to citizens in a safe and sustainable way.”
On a single charge, a Neuron scooter can travel up to 60 kilometres (37.2 miles). These e-scooters are equipped with a swappable battery. Once the ride is finished, a customer can drop the bike at any nearby parking station or any suitable location. Neuron works with a large number of people who actively swap the batteries on these scooters.
Like India’s electric scooter and bike startups Bounce and Yulu, Neuron Mobility also designs its electric scooters, but relies on a Chinese equipment manufacturer for producing them. (Yulu recently inked a strategic deal with Bajaj Auto to task the Indian auto manufacturing giant with the production job.)
Singapore turns its back on electric scooters
As Neuron expands to international markets, it has had to halt its e-scooter rental service in the home market of Singapore. Last month, Singapore said e-scooters could no longer operate on footpaths, creating major challenges for all the players. Wang and executives from other startups have expressed concerns over the decision.
Telepod, which uses e-scooters to deliver food; GrabFood, another food delivery startup; and shared e-scooter service startup Beam, said they could no longer offer the same level of customer service to their users, and had little choice but to focus on other markets.
Wang said that Neuron still has teams that work from Singapore, but they have always focused on the larger Asia Pacific region and other markets. Besides, Neuron stopped its service in Singapore months before the nation passed any new law. (Prior to the recent order, Singapore had other issues with electric scooters.)
Neuron will use the fresh capital to further its footprint in the markets where it operates and explore building new categories, Wang said. “We feel we are in the midst of a wave where a number of technologies are falling into place that could help us improve our electric scooter and build more mobility solutions.” The startup is also exploring new markets, though Wang declined to name them.
Like in the United States, electric scooters and bikes have imploded in Southeast Asian markets, where a growing number of familiar brands such as Lime, Bird, Ofo, oBike and local players are increasingly expanding their presence.
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SoftBank-backed Getaround is raising $200M at a $1.5B+ valuation
Getaround, a used car marketplace and winner of TechCrunch Disrupt New York Battlefield 2011, will enter the unicorn club with a roughly $200 million equity financing.
The deal values Getaround, founded in 2009, at $1.7 billion, according to an estimate provided by PitchBook. Getaround declined to comment, citing internal policy on “funding speculation.”
“Getaround and our investors work closely together on our growth strategy, and we’ll definitely plan to share more when we’re ready,” a spokesperson said in response to TechCrunch’s inquiry Thursday morning.
The news follows the company’s $300 million acquisition of Drivy, a Paris-headquartered car-sharing startup that operates in 170 European cities.
Getaround closed a Series D funding of $300 million last year, a round led by SoftBank with participation from Toyota Motor Corporation. Existing investors in the business, which allows its some 200,000 members to rent and unlock vehicles from their mobile phones at $5 per hour, include Menlo Ventures and SOSV.
Assuming an upcoming $200 million infusion, Getaround has raised more than $600 million in equity funding to date.
Whether SoftBank has participated in Getaround’s latest financing is unknown. The business is an active investor in the carsharing market, with investments in Chinese ride-hailing business Didi Chuxing, Uber and autonomous driving company Cruise. We’ve reached out to SoftBank for comment.
In conversation with TechCrunch last year, Getaround co-founder Sam Zaid emphasized SoftBank’s capabilities as a mobility investor: “What we really liked about [SoftBank] was they take a really long view on things,” he said. “So they were very good about thinking about the future of mobility, and we have a common kind of vision of every car becoming a shared car.”
Getaround was expected to expand into international markets with its previous fundraise. Indeed, the company has moved into France, Germany, Spain, Austria, Belgium and the U.K. where it operates under the brand “Drivy by Getaround,” and in Norway under the “Nabobil” brand.
The business initially launched its car-sharing service in 2011, relying on gig workers who can list their cars on the Getaround marketplace for $500 to $1,000 a month in payments, depending on how often their cars are rented.
Since Getaround entered the market, however, a number of competitors have entered the space with similar business models. Turo and Maven, for example, have both emerged to facilitate car rental with backing from top venture capital funds.
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Didi Chuxing and oil giant BP team up to build electric vehicle charging infrastructure in China
Ridesharing and transportation platform Didi Chuxing announced today that it has formed a joint venture with BP, the British gas, oil and energy company, to build electric-vehicle charging infrastructure in China. The charging stations will be available to Didi and non-Didi drivers.
The news of Didi and BP’s joint venture comes one week after Didi announced that it had received funding totaling $600 million from Toyota Motor Corporation. As part of that deal, Didi and Toyota Motor set up a joint venture with GAC Toyota Motor to provide vehicle-related services to Didi drivers.
BP’s first charging site in Guangzhou has already been connected to XAS (Xiaoju Automobile Solutions), which Didi spun out in April 2018 to put all its vehicle-related services into one platform.
XAS is part of Didi Chuxing’s evolution from a ridesharing company to a mobility services platform, with its services available to other car, transportation and logistics companies. In June, Didi also opened its ridesharing platform to other companies, enabling its users to request rides from third-party providers in a bid to better compete with apps like Meituan Dianping and AutoNavi, which aggregate several ride-hailing services on their platforms.
Didi says it now offers ridesharing, vehicle rental and delivery services to 550 million users and covers 1,000 cities through partnerships with Grab, Lyft, Ola, 99 and Bolt (Taxify). The company also claims to be the world’s largest electric vehicle operator with more than 600,000 EVs on its platform.
It also has partnerships with automakers and other car-related companies, like Toyota, FAW, Dongfeng, GAC, Volkswagen and Renault-Nissan-Mitsubishi, to collaborate on a platform that uses new energy and AI-based and mobility technologies.
In a press statement, Tufan Erginbilgic, the CEO of BP’s Downstream business, said “As the world’s largest EV market, China offers extraordinary opportunities to develop innovative new businesses at scale and we see this as the perfect partnership for such a fast-evolving environment. The lessons we learn here will help us further expand BP’s advanced mobility business worldwide, helping drive the energy transition and develop solutions for a low carbon world.”
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The savage genius of SoftBank funding competitors
Venture capitalists aren’t supposed to make their portfolio companies battle to the death. There’s a long-standing but unofficial rule that investors shouldn’t fund multiple competitors in the same space. Conflicts of interest could arise, information about one startup’s strategy could be improperly shared with the other, and the companies could become suspicious of advice provided by their investors. That leads to problems down the line for VCs, as founders may avoid them if they fear the firm might fund their rival down the line.
SoftBank shatters that norm with its juggernaut $100 billion Vision Fund plus its Innovation Fund. The investor hasn’t been shy about funding multiple sides of the same fight.
The problem is that SoftBank’s power distorts the market dynamics. Startups might take exploitative deals from the firm under the threat that they’ll be outspent whoever is willing to take the term sheet. That can hurt employees, especially ones joining later, who might have a reduced chance for a meaningful exit. SoftBank could advocate for mergers, acquisitions, or product differentiation that boost its odds of reaping a fortune at the expense of the startups’ potential.
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SoftBank’s Vision Fund invests $1.5B in Chinese second-hand car startup Chehaoduo
SoftBank’s Vision Fund is taking a bet on China’s auto market after it agreed to pour $1.5 billion into online car trading group Chehaoduo, which literally means “many cars” in Chinese.
The Beijing-based company operates two main sites — peer-to-peer online marketplace Guazi for used vehicles, and Maodou, which retails new sedans through direct sales and financial leasing. (These sub-brands are more subtly named; they translate to “sunflower seeds” and “edamame,” respectively.)
Chehaoduo said it will deploy the proceeds on technology investments as well as the development of new products and services. It also plans to ramp up its marketing efforts and continue to open brick-and-mortar stores, an omnichannel move it believes can enhance trust in consumers used to meeting dealers in person and differentiate it from peers with an exclusively online focus. Chehaoduo currently runs 600 offline stores nationwide supporting new and used car dealing along with after-sales services.
The sizable funding round arrived at a time when China’s softening economy is sapping consumer confidence, but the company’s two-pronged strategy makes sure it covers a broad range of consumer demands. New passenger car sales in China — the world’s largest auto market — fell for the first time since the 1990s to 23.7 million units last year, according to a report by China’s Association of Automobile Manufacturers, the country’s top auto association.
On the other hand, used cars became a more economical choice in a consumer culture that, unlike many countries in the west, has been slow to embrace second-hand goods. But that mindset is shifting as people feel the heat of the Chinese economic downturn: Secondhand car sales were up 13 percent during the first 11 months of 2018, data from China’s Automobile Dealers Association show.
“China’s used car market is growing rapidly but online penetration remains low and auto financing is underutilized compared to developed markets. In just three years, Chehaoduo Group, through the Guazi brand, has leveraged the latest innovations in data-driven technology to establish China’s leading car trading platform,” says Eric Chen, partner at SoftBank’s Investment Advisers, in a statement.
The Japanese investment group has been a prolific backer in the mobility industry through a variety of affiliated companies with Vision Fund being one. SoftBank’s massive portfolio includes the likes of Uber, Didi Chuxing and Grab .
Chehaoduo counts Uxin and Renrenche as its most serious rivals. Uxin raised $225 million from a U.S. initial public offering last June while Renrenche lured Goldman Sachs in a $300 million funding round last year that also saw participation from Didi and Tencent.
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NetEase is the latest Chinese tech giant to lay off a big chunk of its staff
NetEase, China’s second-biggest online games publisher with a growing ecommerce segment, is laying off a significant number of its employees, adding to a list of Chinese tech giants that have shed staff following the Lunar New Year.
A NetEase employee who was recently let go confirmed with TechCrunch that the company had fired a large number of people spanning multiple departments, including ecommerce, education, agriculture (yes, founder and executive officer Ding Lei has a thing for organic farming) and public relations, although downsizing at Yanxuan, its ecommerce brand that sells private-label goods online and offline, had started before the Lunar New Year holiday.
Multiple Chinese media outlets covered the layoff on Wednesday. According to a report from Caijing Magazine, Yanxuan fired 30-40 percent of its staff; the agricultural brand Weiyang got a 50 percent cut; the education unit downsized from 300 to 200 employees; and 40 percent of NetEase’s public relations staff was gone.
A spokesperson from NetEase evaded TechCrunch’s questions about the layoff but said the company is “indeed undergoing a structural optimization to narrow its focus.” The goal, according to the person, is to “boost innovation and organizational efficiency so NetEase can fully play to its own strengths and adapt to market competition in the longer term.”
NetEase CEO Ding Lei pictured picking Longjing tea leaves in Hangzhou. Photo: NetEase Yanxuan via Weibo
Oddly, ecommerce and education appear to be some of NetEase’s brighter spots. The company singled them out alongside music streaming during its latest earnings call as the three sectors that saw “strong profit growth potential” and “will be the focus of [the company’s] next phase of strategic growth.” The staff cuts, then, may represent an urgency to tighten the purse strings for even NetEase’s rosiest businesses.
The shakeup fits into market speculation about company staff cuts to save costs as China copes with a weakening domestic economy. JD.com, a rival to Alibaba, is firing 10 percent of its senior management to cut costs, Caixin reported last week. Ride-hailing giant Didi Chuxing plans to let go 15 percent of its staff this year as part of a reorganization to boost internal efficiency, though it’s adding new members to focus on more promising segments.
Alibaba took an unexpected turn, announcing last week that it will continue to hire new talent in 2019. “We are poised to provide more resources to our platforms to help businesses navigate current environment and create more job opportunities overall,” the firm said in a statement.
2018 was a tough year for China’s games companies of all sorts. The industry took a hit after regulators froze all licensing approvals to go through a reshuffle, dragging down stock prices of big players like Tencent and NetEase. These companies continue to feel the chill even after approvals resumed, as the newly minted regulatory body imposes stricter checks on games, slowing down the application process altogether and delaying companies’ plans to monetize lucrative new titles.
That bleak domestic outlook compelled NetEase to take what Ding dubs a “two-legged” approach to game publishing, with one foot set in China and the other extending abroad. Tencent, too, has been finding new channels for its games through regional partners like Sea’s Garena in Southeast Asia.
NetEase started in 1997 and earned its name by making PC games and providing email services in the early years of the Chinese internet. More recently the company has intended to diversify its business by incubating projects across the board. It has so far enjoyed growth in segments like music streaming and ecommerce (which is reportedly swallowing up Amazon China’s import-led service) while stepping back from others such as comics publishing, an asset it is selling to youth-focused video streaming site Bilibili.
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The 10 largest US venture rounds of 2018
Three U.S. companies raised more than $1 billion in just one funding round in 2018, a year in which total deal value for U.S. startups is expected to surpass $100 billion for the first time.
For the most part, it was the usual suspects, and yes, SoftBank was an accessory in many of these rounds. Here’s a look at the 10 largest venture rounds of 2018.
Epic Games: $1.25 billion
The video game Fortnite Battle Royale was the star of the year 2018; more than 200 million players worldwide are registered online. (Photo Illustration by Chesnot/Getty Images)
Given the absolute phenomenon Fortnite became in just one year from its original release, it was no surprise private investors wanted to put money into Epic Games, the company behind it. In October, Epic Games announced a whopping $1.25 billion round at $15 billion valuation from KKR, Iconiq Capital, Smash Ventures, Vulcan Capital, Kleiner Perkins and Lightspeed Venture Partners to continue growing its Fortnite empire. That game alone is expected to bring in $2 billion in revenue in 2018 and reports 200 million registered players — not too shabby.
Cary, N.C.-based Epic Games’ monstrous fundraise was a standout in a year when funding for gaming and esports startups really took off. According to Crunchbase, global venture investment in the industry increased nearly 75 percent, to $701 million in the first half of 2018. Given Epic’s round, Discord’s $150 million infusion of capital this week and several others since June, the second half of 2018 undoubtedly set major records in the space.
Uber: $1.2 billion
Travis Kalanick, co-founder and former chief executive officer of Uber Technologies Inc., speaks during the TiE Global Entrepreneurs Summit in New Delhi, India, on Friday, December 16, 2016. Kalanick said the company will introduce Uber Moto across India. Photographer: Udit Kulshrestha/Bloomberg via Getty Images
One of the largest rounds of 2018 was also one of the first big financings of the year. To be fair, the negotiations behind Uber’s $1.2 billion SoftBank investment and much of the press coverage surrounding it came in 2017, but the deal officially closed in January. This deal was monumental for many reasons. First of all, it made Uber founder and former chief executive officer Travis Kalanick a billionaire — not just on paper — and it cemented SoftBank’s position as the ride-hailing giant’s largest shareholder.
The financing brought San Francisco-based Uber’s total raised to date to just over $20 billion at a valuation said to be around $72 billion. Of course, Uber has since privately filed for an initial public offering slated for the first quarter of 2019.
Juul Labs: $1.2 billion
Juul Labs, the maker of the popular e-cigarette brand that has recently come under fire from health officials over its popularity with young adults, plans to introduce a line of lower-nicotine pods. Photographer: Gabby Jones/Bloomberg via Getty Images
Juul, one of the buzziest companies of 2018, raised $1.2 billion from private investors Tiger Global, Fidelity and more in mid-2018. Then, this month, the developer of e-cigarettes popular among teenagers accepted a $12.8 billion investment from the makers of Marlboro that valued it at $38 billion. Not only has Juul created significant controversy surrounding the ethics, or lack thereof, of its core product and its marketing to the younger generation in a short time, but it has also accumulated value at a clip rarely seen before. Juul, for context, surpassed a $10 billion valuation just seven months after its first round of VC backing — that’s four times faster than Facebook.
2019 is poised to be an interesting year for San Francisco-based Juul as it navigates public scrutiny, regulations and the completion of its partnership with Altria Group, which, according to Juul’s CEO Kevin Burns, will “help accelerate [Juul’s] success switching adult smokers.”
Magic Leap: $963M
Magic Leap’s flagship product, the Magic Leap One AR headset, began shipping to consumers this year.
It wouldn’t be an end of the year round-up of the largest VC deals without any mention of Magic Leap, the extremely well-funded virtual reality company. Tucked away in Plantation, Fla., 8-year-old Magic Leap has closed round after round, raising more than $2 billion to develop its hardware and software. The key investors in this year’s big round, which valued the company at $6.3 billion, were Temasek and AT&T, which announced it would become the exclusive “wireless distributor” of Magic Leap products in the U.S. starting this summer. Magic Leap is also backed by Google, Alibaba and Axel Springer.
Not only did Magic Leap land one of the largest VC deals this year, but it also finally began shipping to consumers its flagship product, the Magic Leap One AR headset. That was a long time coming — years, in fact. So long, many doubted whether the buzzy headsets would ever see the light of day. Now, the headsets are available to buyers in 48 states, though it’s worth mentioning they cost more than two grand.
Instacart: $600M
Founder and CEO of Instacart Apoorva Mehta and moderator Megan Rose Dickey speak onstage during TechCrunch Disrupt SF 2016 at Pier 48 on September 14, 2016 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)
Instacart has a lofty goal of delivering groceries to every household in the U.S., and it needs a lot of cash to get there. The company has raised VC every year since it completed the Y Combinator startup accelerator in 2012, and 2018 was no different. In October, the service brought in $600 million at a $7.6 billion valuation in a round led by D1 Capital Partners. Headquartered in San Francisco, the company has raised $1.6 billion to date from Coatue Management, Thrive Capital, Canaan Partners, Andreessen Horowitz and several others.
Instacart CEO Apoorva Mehta told TechCrunch at the time that the startup didn’t really need the capital and that this was more of an “opportunistic” battle. The market is hot, after all, and Instacart has ambitious plans to scale and it has a fierce competitor in Amazon to take on. As for an IPO, Mehta said “it will be on the horizon.”
Katerra: $865M
SoftBank-backed Katerra says it’s brought in more than $1.3 billion in bookings for new construction ranging from residential to hospitality and student housing.
One of SoftBank’s first major bets of 2018 was on construction technology, with an $865 million investment in Katerra at a $3 billion valuation out of its Vision Fund. Katerra, a tech startup based out of Menlo Park, develops, designs and constructs buildings. At the time of its January fundraise, Katerra told TechCrunch it had brought in more than $1.3 billion in bookings for new construction ranging from residential to hospitality and student housing. Founded in 2015 by three former private equity barons, the company has raised a total of $1.1 billion to date from SoftBank, Foxconn, Greenoaks Capital and others.
In June, Katerra announced it would merge with KEF Infra, an offsite manufacturing technology specialist, and would begin operating in India and the Middle East markets.
Opendoor: $725M
Yet another SoftBank investment, San Francisco-based Opendoor is also backed by Fifth Wall Ventures, GV, Andreessen Horowitz and more.
Opendoor’s two big SoftBank-backed investments this year totaled $725 million, valuing the company at $2.5 billion. The deal gave SoftBank a minority stake in Opendoor, an online real estate marketplace, and put one of its five managing directors, Jeff Housenbold, on the company’s board of directors. The round brought Opendoor’s total funding to slightly more than $1 billion — most of which it acquired in 2018, a major year for the company. Founded in 2014, the San Francisco-based startup is also backed by Fifth Wall Ventures, GV, Andreessen Horowitz and more.
According to TechCrunch’s Connie Loizos, Housenbold had hoped to work with Opendoor co-founder and CEO Eric Wu for some time. “The minute he joined [SoftBank] he reached out to me and let me know … saying if there was an opportunity to work together, to reach out to him,” Wu said.
Lyft: $600M
Uber competitor Lyft expanded aggressively in 2018, raised hundreds of millions in additional venture capital funding, and filed confidentially to go public.
Lyft managed to stay quite busy this year. Not only did the ridesharing company raise a $600 million round at a $15.1 billion valuation, it also acquired bike-share operator Motivate and filed confidentially to go public. Founded in 2012 by Logan Green and John Zimmer, the company has long competed with Uber, and will continue to do so as the pair race to the public markets in early-2019. Lyft, much smaller than Uber and only active in the U.S. and Canada, has raised nearly $5 billion in venture backing from KKR, Mayfield, Didi Chuxing, Floodgate and others.
San Francisco-based Lyft has spent much of the last two years expanding rapidly across the U.S. market, as well as pursuing its autonomous vehicle ambitions.
Automation Anywhere: $550M
Automation Anywhere raised a monstrous $550 million Series A in 2018, with support from the SoftBank Vision Fund.
The only surprise to make this list is Automation Anywhere, a 15-year-old provider of robotic process automation. The company raised a total of $550 million in Series A funding, a large chunk of which came from the SoftBank Vision Fund, as well as NEA, General Atlantic and Goldman Sachs. The round valued Automation Anywhere at $2.6 billion. According to PitchBook, this was the first round of institutional backing for the San Jose, Calif.-based company.
In a conversation with TechCrunch, Automation Anywhere CEO Mihir Shukla said they were attracted to SoftBank because of Masayoshi So — the CEO and founder of SoftBank: “[He} has a vision and he is investing in foundational platforms that will change how we work and travel. We share that vision.”
Peloton: $500M
SAN FRANCISCO, CA – SEPTEMBER 06: Peloton Co-Founder/CEO John Foley speaks onstage during Day 2 of TechCrunch Disrupt SF 2018 at Moscone Center on September 6, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch)
Peloton’s growth exploded in 2018 as it launched its $4,000 treadmill, doubled down on original fitness streaming content and raised an additional $500 million in equity funding at a $5 billion valuation. The New York-based startup, often referred to as the “Netflix of fitness,” has raised nearly $1 billion in venture capital funding in the six years since it was founded by John Foley. It’s backed by L Catterton, True Ventures, Tiger Global and others.
It’s likely Peloton will take the public markets plunge in 2019 much like Uber and Lyft. Foley earlier this year told The Wall Street Journal that though he doesn’t have any concrete plans, 2019 “makes a lot of sense” for its stock market debut.
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Careem launches delivery service as it nears closing a massive round
The ride-hailing giant Careem is now in the delivery business as the company seeks new verticals in its ever-increasing fight against other services in the Middle East, including Uber. Starting with food delivery in Dhabi and Jeddah, the company sees the delivery service, called Careem Now, expanding to pharmaceuticals. according to a report by Reuters. Careem is investing more than $150 million into the service.
“We believe the opportunity for deliveries in the region is even bigger than ride-hailing,” chief executive and co-founder Mudassir Sheikha told Reuters. “It is going to become a very significant part of Careem over time.”
Careem Now will operate independently from its ride-hailing business. It will have its own app and Careem is building the service as a dedicated call center.
This comes as the company is trying to close a $500 million funding round. Back in October, it announced it had already raised $200 million from existing investors. Prior to this announcement, rumors were swirling that several companies, including Didi Chuxing, could acquire Careem.
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Rappi raises $200M as Latin American tech investment reaches new highs
Rappi, the Colombian on-demand delivery startup, has brought in a new round of funding at a valuation north of $1 billion, as first reported by Axios and confirmed to TechCrunch by a source close to the company. DST Global has led the more than $200 million financing, with participation from Andreessen Horowitz and Sequoia — all of which were existing investors in the company.
Rappi kicked off its business delivering beverages and has since expanded into meals, groceries and even tech and medicine. You can, for example, have a pair of AirPods delivered to you using Rappi’s app. The company also has a popular cash withdrawal feature that allows users to pay with credit cards and then receive cash from one of Rappi’s delivery agents.
Rappi charges $1 per delivery. To help keep costs efficient, the company’s fleet of couriers use only motorcycles and bikes.
Simón Borrero, Sebastian Mejia and Felipe Villamarin launched the company in 2015, graduating from Y Combinator the following year. From there, Rappi quickly captured the attention of American venture capitalists. A16z’s initial investment in July 2016 was the Silicon Valley firm’s first investment in Latin America.
The new capital will likely be used to help Rappi compete with Uber Eats, which is active across Latin America.
The round for Rappi is notable for a Latin American company, as is its new unicorn status. Only one other Latin American startup, Nubank, has surpassed a billion-dollar valuation with new venture capital funding so far in 2018. São Paulo-based Nubank makes a no-fee credit card and is also backed by DST.
Investment in Latin American tech continues to reach new highs. In the first quarter of 2018, more than $600 million was invested. That followed a record 2017, which was the first time VCs funneled more than $1 billion into the continent’s tech ecosystem during a 12-month period.
The rise in investment is mostly due to sizable fundings for companies like Rappi and Nubank, as well as Brazil-based 99, which sold to fellow ride-hailing business Didi Chuxing in a deal worth $1 billion earlier this year.
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The well-funded startups driven to own the autonomous vehicle stack
At some point in the future, while riding along in a car, a kid may ask their parent about a distant time in the past when people used steering wheels and pedals to control an automobile. Of course, the full realization of the “auto” part of the word — in the form of fully autonomous automobiles — is a long way off, but there are nonetheless companies trying to build that future today.
However, changing the face of transportation is a costly business, one that typically requires corporate backing or a lot of venture funding to realize such an ambitious goal. A recent funding round, some $128 million raised in a Series A round by Shenzhen-based Roadstar.ai, got us at Crunchbase News asking a question: Just how many independent, well-funded autonomous vehicles startups are out there?
In short, not as many as you’d think. To investigate further, we took a look at the set of independent companies in Crunchbase’s “autonomous vehicle” category that have raised $50 million or more in venture funding. After a little bit of hand filtering, we found that the companies mostly shook out into two broad categories: those working on sensor technologies, which are integral to any self-driving system, and more “full-stack” hardware and software companies, which incorporate sensors, machine-learned software models and control mechanics into more integrated autonomous systems.
Full-stack self-driving vehicle companies
Let’s start with full-stack companies first. The table below shows the set of independent full-stack autonomous vehicle companies operating in the market today, as well as their focus areas, headquarter’s location and the total amount of venture funding raised:
Note the breakdown in focus area between the companies listed above. In general, these companies are focused on building more generalized technology platforms — perhaps to sell or license to major automakers in the future — whereas others intend to own not just the autonomous car technology, but deploy it in a fleet of on-demand taxi and other transportation services.
Making the eyes and ears of autonomous vehicles
On the sensor side, there is also a trend, one that’s decidedly more concentrated on one area of focus, as you’ll be able to discern from the table below:
Some of the most well-funded startups in the sensing field are developing light detection and ranging (LiDAR) technologies, which basically serve as the depth-perceiving “eyes” of autonomous vehicle systems. CYNGN integrates a number of different sensors, LiDAR included, into its hardware arrays and software tools, which is one heck of a pivot for the mobile phone OS-maker formerly known as Cyanogen.
But there are other problem spaces for these sensor companies, including Nauto’s smart dashcam, which gathers location data and detects distracted driving, or Autotalks’s DSRC technology for vehicle-to-vehicle communication. (Back in April, Crunchbase News covered the $5 million Series A round closed by Comma, which released an open-source dashcam app.)
And unlike some of the full-stack providers mentioned earlier, many of these sensor companies have established vendor relationships with the automotive industry. Quanergy Systems, for example, counts components giant Delphi, luxury carmakers Jaguar and Mercedes-Benz and automakers like Hyundai and Renault-Nissan as partners and investors. Innoviz supplies its solid-state LiDAR technology to the BMW Group, according to its website.
Although radar and even LiDAR are old hat by now, there continues to be innovation in sensors. According to a profile of Oryx Vision’s technology in IEEE Spectrum, its “coherent optical radar” system is kind of like a hybrid of radar and LiDAR technology in that “it uses a laser to illuminate the road ahead [with infrared light], but like a radar it treats the reflected signal as a wave rather than a particle.” Its technology is able to deliver higher-resolution sensing over a longer distance than traditional radar or newer LiDAR technologies.
Can startups stack up against big corporate competitors?
There are plenty of autonomous vehicle initiatives backed by deep corporate pockets. There’s Waymo, a subsidiary of Alphabet, which is subsidized by the huge amount of search profit flung off by Google . Uber has an autonomous vehicles initiative too, although it has encountered a whole host of legal and safety issues, including holding the unfortunate distinction of being the first to kill a pedestrian earlier this year.
Tesla, too, has invested considerable resources into developing assistive technologies for its vehicles, but it too has encountered some roadblocks as its head of Autopilot (its in-house autonomy solution) left in April. The company also deals with a rash of safety concerns of its own. And although Apple’s self-driving car program has been less publicized than others, it continues to roll on in the background. Chinese companies like Baidu and Didi Chuxing have also launched fill-stack R&D facilities in Silicon Valley.
Traditional automakers have also jumped into the fray. Back in 2016, for the price of a cool $1 billion, General Motors folded Cruise Automation into its R&D efforts in a widely publicized buyout. And, not to be left behind, Ford acquired a majority stake in Argo AI, also for $1 billion.
That leaves us with a question: Do even the well-funded startups mentioned earlier stand a chance of either usurping market dominance from corporate incumbents or at least joining their ranks? Perhaps.
The reason why so much investor cash is going to these companies is because the market opportunity presented by autonomous vehicle technology is almost comically enormous. It’s not just a matter of the car market itself — projected to be over 80 million car sales globally in 2018 alone — but how we’ll spend all the time and mental bandwidth freed up by letting computers take the wheel. It’s no wonder that so many companies, and their backers, want even a tiny piece of that pie.
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