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Hola,
VCs (and the startups they back) often talk about “changing the world,” but they tend to concentrate their resources in just a few areas of the planet. That means the future definitely isn’t evenly distributed when we look at where VC-backed tech entrepreneurship has taken root.
It shows nearly 80% of VC deals go to just 6 countries: the US, UK, China, India, Germany, and Canada. Another 16% go to more established hotspots such as Brazil, France, Australia, etc.
Meanwhile, 50+ countries in the global long tail, which we call the “global rest,” combine for a mere 5% of VC deals. But this distribution may be changing, since VC deals to the global long tail have been increasing steadily.
In the report, we comb through the data on the Global Rest countries (see This Week in Data below for more) to identify frontier markets where early startup ecosystems are clearly beginning to take shape: places like Indonesia, the United Arab Emirates, Colombia, Poland, Nigeria, and Kenya. Despite the relative dearth of VC, there are 9 startup unicorns in these places, including LifeMiles in Bogotá, Africa Internet Group in Lagos, and Careem in Dubai.
The report has 100+ slides on these startup frontier markets and the promising companies in each. Take a tour.
P.S. For a close look at Asia Tech or the Middle East, check out our briefings on those topics.
This week in data:
47: The number of VC-backed deals to companies headquartered in Jakarta, Indonesia in 2016. Jakarta is by a significant margin the most active city for VC investing within the 50+ “frontier” countries that together secure 5% of global VC deals, as detailed in our Rise of the (Global) Rest report. For more data on VC deal activity in markets such as Indonesia, Malaysia, Turkey, Poland, Mexico, Argentina, and more download the full report.
14.5%: The amount of its net revenue meal-delivery company Blue Apron said it spent on marketing in the last quarter, lower than the 18% of $795M in net revenue it spent on marketing in 2016. The company said it would continue to pump the brakes on marketing spend this year. The cost-saving announcement came with Blue Apron’s disappointing second quarter earnings report, its first since going public on the NASDAQ exchange in June. Fellow NASDAQ company Snap reported worse-than-expected earnings yesterday as well, reporting it only added 7 million daily users during Q2’17 for only a 4% jump over last quarter’s numbers. Snap shares fell 12% after it issued its quarterly results.
11: The number of voting directors on Uber’s board, which then-CEO Travis Kalanick upped from eight in June 2016. The decision to create the seats and give Kalanick the power to designate new directors was approved at the time by Uber investor Benchmark Capital, but has now become the focal point of a fraud suit. In the suit, Benchmark (which owns ~13% of Uber) alleges Kalanick fraudulently obtained control of the seats through concealment of information on mismanagement and misconduct. The complaint also nods to the still-pending lawsuit against Uber, filed by Google subsidiary Waymo, alleging patent infringement. The patent dispute grew out of Uber’s acquisition of Otto, a self-driving truck company. We analyze the patents and Lidar tech in question here.
2.5 million: The number of people that stayed in an Airbnb on August 5, 2017, the company’s biggest night in its nearly 10-year history. (For reference, 2.5 million is greater than the entire population of Houston, Texas.) According to a tweet from Airbnb co-founder/CEO Brian Chesky, the startup now sees around 2 million guests on a given night — representing more than twice the volume seen in summer 2015, when it saw ~800,000 people per night.
1,488: The number of VC deals to private companies located in startup frontier markets — defined as countries that each take between .01% and .5% of the world’s VC deals — in 2016. VC deals and dollars to startup frontier markets have gone up every year since 2012, according to our Rise of the (Global) Rest report. Smart money VCs have participated in 8 deals to startup frontier markets so far in 2017, which is already more than the total number of companies backed in these markets in 2014, 2015, or 2016. (We define smart money VCs as the 24 top firms with the best combination of portfolio quality and investment outcomes.)
$1.6B: The post-money valuation for digital currency startup Coinbase, following the close yesterday of a $100M Series D led by Institutional Venture Partners with participation from investors including Battery Ventures, Draper Associates, Greylock Partners, Section 32, and Spark Capital. Coinbase — which has served 9.1M customers as a digital platform for buying and selling bitcoin, ethereum, and other cryptocurrencies – has raised a total of $217.4M in equity funding to date. Coinbase is also the first cryptocurrency company to enter the Global Unicorn Club, CB Insights’ list of the 211 private companies currently valued at $1B or more.
$2.5B: The size of a Series J round closed Thursday by Indian online retailer Flipkart, the entire sum of which reportedly came from the nearly $100B SoftBank Vision Fund. The deal, which brings Flipkart’s valuation to $11.6B, was one of three huge Vision Fund deals to emerge this week; the others were Softbank taking minority stakes in Roivant, a Swiss biopharmaceutical company ($1.1B stake), and Fanatics, a sport-focused e-commerce retailer ($1B). As SoftBank continues making $1B+ startup investments, many investors are concerned that the activity could overinflate private market valuations (and delay exits) while crowding competing investors out of late-stage opportunities. For a look at what tech leaders are saying, click here.
$299: The cost of the single-serve Wim yogurt maker — aka the “Keurig for Froyo“— which is now available for purchase. The makers of Wim, inspired by the success of Sodastream and Nespresso, created their 15-pound countertop device to become a leader in the reported $28B market for frozen desserts in the US. The $299 purchase comes with a variety 5-pack of flavors, with more available for purchase. The company’s business model has been likened to that of Juicero, the highly-criticized maker of a $400 cold-press juicing system, which recently laid off a reported 25% of its employees.
100: The number of self-driving vehicles that Intel plans to put on the road for testing before year-end 2017, following its just-completed $15B acquisition of sensor company Mobileye. The deal will make Intel a stronger player in the autonomous vehicle space, where companies including Google, Uber, and Tesla have been investing resources for years. Prior to the Mobileye deal, Intel invested in mobile mapping startup HERE Maps in Q1’17 and (through its Intel Capital arm) invested in AEYE, which develops advanced computer vision that acts as the ‘eyes’ of autonomous vehicles, in Q2’17. According to CB Insights data, 2017 deals and dollars to the auto tech space will handily outpace last year’s totals if the current pace of investment continues.
18: In Q2’17, VC-backed fintech companies globally saw 18 rounds worth $50M+, reaching a five-quarter high. According to new data we released this week, US-based fintech companies raised 12 of the 18 rounds, with deals going to a range of stages and sectors (including blockchain startup R3, which raised a $107M Series A, and real estate tech company Cadre, which raised a $65M Series C). Asia came in second with five $50M+ investments, included one to new unicorn Tuandaiwang, which raised a $292M Series D that valued the company at $1.5B. (For more on recent $50M+ fintech financings, click here).
200%: The increase in sales that Gary Lynch, general manager of US-based bunker manufacturer Rising S Company, claims his company has seen in 2017 compared to last year— telling Canada’s Global News that rising concern about North Korea using ballistic missiles could be a reason for the increase. In comments earlier this year, investor and LinkedIn co-founder Reid Hoffman estimated that more than 50% of Silicon Valley billionaires have some level of “apocalypse insurance,” such as an underground bunker.
