AI heat map. WeWork hits $20B. Reddit gets its horn.
Hola,
In all the chatter around AI, bots and virtual assistants get much of the attention, but it’s healthcare where AI is on fire.
Our AI deals tracker shows that healthcare is, by a significant margin, the most active industry for AI-focused investments. And there have already been 14 equity deals this quarter in healthcare AI, which means the category is on track to beat the record 30 equity deals in the last quarter.
Among the deals in July were several to AI-powered drug discovery platforms, including an $11M Series A to Berkeley, California-based BioAge Labs, led by Andreessen Horowitz. Another was a sign of big pharma’s interest: GlaxoSmithKline’s contract worth up to $43M with Scotland-based Exscientia.
One signal that it’s early days for AI in healthcare is that many of these deals are the first time these companies are selling equity, rather than follow-on deals. Last quarter saw an all-time high of first-time deals to AI in healthcare startups. And 5 of the last 7 quarters have seen 10+ such deals.
The chart above is from an upcoming client-only Expert Research brief on early-stage AI in healthcare trends. We’ve now published more than 100 client-only Expert Research briefs. Clients can log in to see them all here.
20X: The price-to-sales multiple of WeWork based on its $20B “double decacorn” valuation. We compared the multiples of WeWork against those of its publicly-traded competitors: Boston Properties, Vornado, and Regus. With a $20B valuation based on its Q3’17 Series G financing round of $760M and its projected annual revenue of $1B for 2017, WeWork’s multiple would be well over twice the size of Boston Properties, which has a price-to-sales ratio of 7.37, and nearly 18X the size of co-working incumbent Regus, WeWork’s most similar competitor. Visit our Research Portal for a deeper look at WeWork’s valuation data.
35:Reddit, an online community for content creation and distribution, raised a $200M Series C round this quarter, backed by investors including a16z, Sequoia Capital, and VY Capital. The company was previously valued around $500M, but the new financing brings Reddit’s valuation to $1.8B, making it the newest company to enter the unicorn club. As per our real-time unicorn tracker, 2017 has thus far seen 35 new companies emerge with a $1B+ valuation.
$1.1B: The amount The Canada Pension Plan Investment Board and Singapore’s sovereign wealth fund GIC invested into WME/IMG in a private equity deal. The funding sets up WME/IMG, the global sports and media firm that purchased Ultimate Fighting Championship (UFC) for $4B last year, for more M&A. Some are speculating that World Wrestling Entertainment (WWE), which is already represented by the talent agency side of WME/IMG, could be its next target. GIC has already invested this year alongside another Canadian pension fund investor, CDPQ (aka Caisse de depot et placement du Quebec), in an $807M financing of Heathrow Airport in Q1’17.
6: This week, Facebook acquired AI startup Ozlo to help enhance its Messenger service. The company, founded 4 years ago by former head of Facebook for Android Charles Jolley, has since raised $14M in total disclosed funding from AME Cloud Ventures, Amino Capital, and smart money investor Greylock Partners. The move marks Facebook’s 6th AI startup acquisition since 2012, two of which took place last year (Zurich Eye and Masquerade Technologies). Our Expert Research clients recently got a look at Facebook’s next likely M&A targets in our research brief predicting Facebook’s M&A moves. We also previously put together a timeline of AI M&A activity by Facebook, Google, Apple, Microsoft, and other corporations.
$75M: The amount raised by Impossible Foods — a company designing burgers from plant-based ingredients — in Series E financing from Bill Gates, Horizon Ventures, Khosla Ventures, Open Philanthropy Project, and Temasek Holdings. The round brings the company’s total disclosed funding to $258M, making it the most well-funded startup in our Feeding the Future collection, which highlights startups transforming the way our food is grown, stored, shipped, and sold. Impossible Foods has ten patent applications published to date, which we detail on our food & beverage patent tracker.
271%: The year-over-year net revenue growth rate reported by mattress company Purple in an investor presentation filed July 27 as part of a reverse merger deal with New York-based publicly-traded Global Partner Acquisition Corp, which is backed by several financial firms. The deal, which would make Purple the first publicly-traded mattress startup, values Purple at $1.1B. According to our database, the company scaled to $187M in annualized net revenue on just $1.7M in crowdfunded capital.
41M: Apple reported the sale of 41 million iPhones in Q2, bringing its total iPhones sales to over 1.2 billion since the device’s debut in 2007. Apple’s strong revenue forecast for the third quarter (from $49 billion to $52 billion) also suggests the iPhone 8 is on target for release before the end of September. For insights into the patent activity that might have influenced the iPhone 8, check out our Big 5 Tech Companies Patents Report, which includes Apple.
1065: The approximate number of defective Honda Vezel SUVs purchased by Uber managers in Singapore from May 2016 to December 2016. The Vezels were rented to drivers without needed repairs, even though Uber allegedly had knowledge of an April 2016 recall for the car’s faulty electrical parts. A WSJ report this week unearthed this latest Uber scandal, reporting that after a January vehicle fire led to an internal legal investigation, Uber still opted to leave the cars on the road. Uber is already facing valuation pressure after its series of scandals, as well as stiff competition in Southeast Asia from Grab, a Singapore-based competitor that just raised a $2B round in July. For context on Uber’s M&A activity and car-leasing partnerships in Asia, check out our expert-only research on Uber As Dealmaker.
82.4 degrees: Earlier this week, Quartz reported on a type of popsicle that doesn’t melt — an “accidental discovery” made at the Kanazawa, Japan-based Biotherapy Development Research Center. The “non melting popsicles” are being sold across the country and contain polyphenol liquid extracted from strawberries. The ingredient makes it difficult for water and oil to separate, thus allowing for the ice cream to maintain its shape and melt at a slower rate. The popsicle was tested in 82.4-degree weather, and was able to “retain its original shape” after five minutes in the heat.
12: The number of US states preparing for the massive influx of visitors arriving to watch the total solar eclipse later this month. Research from CityLab earlier this week said that visitors to some cities will equal half of certain states’ populations, potentially creating massive gridlock before and after the eclipse. (South Carolina, with a population of 4.9 million residents, will likely see 1-2 million visitors.) At the close of July, Google search interest in the eclipse was skyrocketing in the states on the “path of totality,” per this visualization created by NASA researcher Joshua Stevens:
