Remember back in March when the VC game was done for the year, checkbooks were snapping shut and startup layoffs led the headlines? So much for all that. Q3’s venture capital numbers are in and they are anything but weak.
In retrospect, the Q2 VC slowdown looks more like a short-lived recharge ahead of a big push in Q3 than anything existential. We can see this today through the lens of data concerning what happened after June concluded and we moved into Q3.
According to data from PitchBook (data source) and CBInsights (data source), there was a lot to like about the third quarter if you were a U.S.-based startup.
I want to dig into the data and pull out most important data points for you. We’ll get you informed and out the door in around 900 words.
If you want a more global look at the venture capital world in Q3, don’t worry. We’re doing that tomorrow right here at The Exchange. Ready? This should be both fun and informative. Let’s go!
A massive third quarter
To get a clear look at the U.S. venture capital market, we’ll start from the top down. So, the biggest numbers first, followed by increasingly narrow slices of data so we can drill down into smaller startups.
First, the top-line numbers:
How much money was raised by U.S.-based startups in Q3 2020? $ 36.5 billion, according to CBInsights, $ 37.8 billion according to PitchBook. Those numbers are effectively the same for purposes. CBInsights calls the number a seven-quarter high, up 22% from the Q3 2019 number and 30% from the Q2 2020 result. PitchBook agrees that Q3 2020 was strong, but has its count just under Q2 2020’s own.
How many deals was that money spread between? CBInsights counts 1,461 VC deals in Q3 2020 for U.S.-based startups. Per its numbers, that figure is up 1% from Q2 2020 and down 11% from Q3 2019. PitchBook, in contrast, counts 2,990 total deals, inclusive of rounds that it expects to be added as information about the quarter fills in. That tally “held steady” compared to Q3 2019, per the company.
What to make of all this information? Simple: Q3 2020 U.S.-based startup venture capital dollar volume was very strong, with deal counts coming in slightly weaker.
This means that we saw fewer, larger deals in the quarter on average, right? Let’s see:
The Q2 2020 has witnessed unprecedented growth despite the effects of the COVID-19 pandemic and the subsequent lockdown. Though there has been a major economic downturn all over the world, the venture industry appears to be resilient. The deal activity in the second quarter of this year shows that the VC investors are focused on a variety of industries such as healthtech, fintech, software startups and much more.
Top deals in Stockholm in Q2 2020
It’s no secret that Stockholm, the Swedish capital is home to some of the leading tech startups in the world. There has been a boost in the tech startup ecosystem in Stockholm of late, thanks to the support from the government, aspirational entrepreneurs, and a flourishing environment. Having said that, here are the top VC deals in Stockholm in Q2 2020 as reported by Pitchbook.
Founder/s: Martin Lindman Founded year: 2016 Total funding: €45M
Swedish e-health startup Doktor.se secured €45M in a Series C funding round led by Carnegie and Handelsbanken. The others that participated in the funding round include existing and new investors. The new fund will be used to expand its digi-physical offering by developing its digital healthcare services and opening new medical centres.
Doktor.se provides digital consultations to patients via its smartphone app. The startup works with the ambition to make the healthcare system more efficient and offer better e-health services. Currently, Doktor.se operates as a standalone service in its home country Sweden and focuses on going global.
Founder/s: Alexis Priftis, Johan Lundin, Staffan Gabrielsson Founded year: 2015 Total funding: €23M
Swedish logistics disruptor Instabox raised €36M funding – pushing its valuation to €100M. The investment round was led by Creades, a Swedish investor and London-based credit specialist CORDET. The new fund will be used to fuel further expansion of its smart parcel lockers in both the existing and new European markets. Also, it will focus on growing the team.
Instabox handles logistics for e-commerce retailers and provides same-day delivery via its network of last-mile smart delivery lockers. The service reaches about six million Swedes and delivers products from the likes of H&M, Ikea, and Lloyds.
Founder/s: Filip Polhem, Mikael Hussain, Sven Perkmann Founded year: 2017 Total funding: NA
Stockholm-based fintech startup Anyfin bagged €27.6M Series B funding led by EQT Ventures along with existing investors Northzone, Accel and Global Founders Capital. Anyfin intends to use the investment to launch additional offerings, drive product innovation and scale into new European markets.
Anyfin helps consumers increase their financial health, lowering the effective interest rate. The company’s platform enables consumers to refinance their existing loans quickly depending on their actual risk profiles.
Founder/s: Rickard Lagerqvist, Rickard Färdig, Johannes Hatem Founded year: 2018. Total funding: NA
Mindler, which is one of the largest digital services for mental health has secured €8M funding led by Ventech and Schibsted Growth. The investment will be used to meet the surge in the demand of psychological services and boost its international growth. With this round, existing investors Luminar Venture, Kichi Invest and BackInBack reaffirmed their commitment to the growth of the company.
Mindler debuted with the intention to ensure that everyone has the chance to visit a psychologist. The model combines digital technology with psychological expertise so that it can increase access to effective treatment for mental health issues when people actually need medical assistance.
Founder/s: Marcus Janback Founded year: 2016 Total funding: NA
Stockholm-based insurtech startup Insurello has bagged €7.1M funding in a round led by Inventure,a Nordic VC firm and Schibsted, alongside participation from Luminar Ventures. This investment will be used by Insurello to expand into the international markets.
Insurello helps consumers get fair compensation for their personal accident claims. It handles the complete claims process and identifies compensation that users aren’t aware of. Recently, Insurello acquired Ifdelayed.com to let people claim against flight delays as well.
Founder/s: Karim Engelmark Cassimjee Founded year: 2014 Total funding: NA
The cell-free synthetic biology company EnginZyme raised €6.4M Series A funding led by Sofinnova Partners, a leading European life sciences VC firm. With this investment, the overall funding raised by EnginZyme totals €10M. The fresh funds will be deployed to boost the development of the company’s technology platform. Also, it will take its first internal production process to pilot. In addition to this, Micheal Krel, the Partner of Sofinnova Industrial Biotech Fund has joined the EnginZyme’s board.
The biotech startup intends to resolve one of the fundamental issues – how to produce sustainable alternatives to nylons, plastics, rubbers and numerous other synthetics we use on a daily basis with compromising on cost-effectiveness.
Founder/s: Roger Bjärevall Founded year: 2003 Total funding: NA
Database management and analysis startup DbVis Software bagged €5.3M funding in a round led by Industrifonden and Fairpoint Capital. Besides the investment, the company announced that it appointed Martin Engdahl, the director at Salesforce Sweden as its CEO. It plans to use the investment to expand its product development, accelerate growth and strengthen the team.
DbVis’s key software product, DbVisualizer is a multi-platform database management tool. This tool has been downloaded over 4.5 million times. It is a partly open-source software that is available in both paid and free versions.
Six years ago, SmartNews took on a major challenge. After launching in Japan in 2012, the news discovery app decided that its first international market would be the United States. During Disrupt, co-founder Kaisei Hamamoto talked about how SmartNews adapts its app for two very different markets. Hamamoto, who is also chief operating officer and chief engineer of the startup, which hit unicorn status last year, also dove into how the company deals with media polarization, especially in the United States.
At Disrupt, SmartNews announced a roster of major new features for the U.S. version of the app, including sections dedicated to voting information and articles related to local and national elections. Hamamoto said the SmartNews’ goal is to make the app a “one-stop solution for users’ participation in the election process.”
The media landscape has changed a lot since SmartNews was founded in 2012. In the U.S., SmartNews is tackling the same issues as many journalists are: increasing polarization, especially along political lines, and monetization (SmartNews currently has more than 3,000 publishing partners around the world and splits ad revenue with them). And, of course, it’s up against a host of new competitors, including Apple News and Google News.
While many Japanese startups focus on other Asian markets when expanding internationally, SmartNews decided to enter the United States because it is home to some of the most influential media companies in the world. On the engineering side, Hamamoto said the company also wanted to tap into the country’s AI and machine learning talent pool.
“The U.S. is not only an attractive market, but also an important development center” for SmartNews,” he said.
The Japanese and American versions of SmartNews share the same code base and its offices in both countries work closely together. While the company’s machine learning-based algorithms drive the bulk of news discovery and personalized recommendations, publishers are first screened by SmartNews’ content team before being added to its platform. The company’s vice president of content is Rich Jaroslovsky, a veteran journalist who wrote for publications like Bloomberg News and the Wall Street Journal.
While AI-based algorithms can perform tasks like filtering out obscene images, “it does not have the ability to evaluate how each publisher meets certain standards,” Hamamoto said. “We are doing everything we can to ensure that our users can read the news with trust every day thanks to efforts led by our team of journalism experts.”
Breaking readers out of information bubbles
In addition to their code base, the two versions of the app share some of the same features. For example, each has SmartNews’ COVID-19 channel, with continuous updates about the pandemic. In the States, this includes visualizations of confirmed cases by county or state, and information about local closing or reopening orders.
In terms of adapting the apps’ user experience, Hamamoto said Japanese readers prefer to have a lot of news displayed on one screen, so it uses a layout algorithm that deliberately increases the density of information presented in its Japanese app. But testing showed Americans prefer a simpler, cleaner layout with more white space.
But the differences go beyond the apps’ user interface. In 2016, members of the U.S. and Japanese team spent three weeks traveling across 13 states, including Georgia, Tennessee, Mississippi, Oklahoma and Texas, to talk to people they met through Craiglist postings or in diners and cafes. SmartNews’ leaders decided to do this after the Japan team realized that most of their U.S. trips were to their offices in New York and the Bay Area.
“We knew we couldn’t get a get a true sense of America by only visiting the East Coast and West Coast,” he said.
Hamamato said one of his biggest takeaways from the 2016 trip was that “we tend to categorize people into just two segments, our side or the other side, and we tend to think of the other side as the enemy, but in reality the world is not that simple.”
In a bid to tackle political polarization in American media, the company launched a “News from All Sides” feature last year, that displays articles about one topic from publications displayed on a slider from “most conservative” to “most liberal.” The U.S. app also has a stronger emphasis on local news. Based on users’ locations, this can be as specific as information from county or even city news outlets.
Hamamoto added that one of SmartNews’ guiding principles is a belief that “having a willingness to listen to other people and not easily label them will help solve the division of our society.”
CashKaro, one of the leading cashback and coupon sites in India, will expand its range of services for e-commerce after raising $ 10 million in Series B funding, the New Delhi-based startup announced today. The round was led by Korea Investment Partners, with participation from returning investor Kalaari Capital.
Over the past five years, the company has introduced new products, including a price comparison service, and EarnKaro, a social commerce cashback app that launched about 18 months ago. Part of the Series B will be used to expand EarnKaro, which has about one million registered users. It allows social commerce sellers, or people who use social media platform and messaging apps like WhatsApp to sell items, make extra cash by creating affiliate links to major e-commerce sites like Amazon and Flipkart. The launch of EarnKaro also allowed CashKaro to reach into smaller cities and rural areas, where shoppers often prefer to order from people whose recommendations they trust (i.e. “micro-influencers”) instead of e-commerce sites.
Founded in 2013 by husband-and-wife team Swati and Rohan Bhargava, CashKaro currently claims about five million users and has partnerships with more than 1,500 e-commerce sites, including some of the biggest players in India, like Amazon, Flipkart, Myntra and Ajio. The company monetizes by charging brands a commission for transactions made through CashKaro links. The commissions are also how CashKaro is able to give cash back to shoppers, which can be deposited into their bank accounts or redeemed as gift vouchers for Flipkart and Amazon. CashKaro’s founders says it currently processes more than one million monthly transactions.
CashKaro competes for the attention of online shoppers with a bevy of other coupon and cashback services in India. Some of its rivals include CouponDunia, GrabOn and GoPaisa.
“We are the only VC-funded cashback site in India. While capital itself is not the differentiator, it is what we have been able to do with that capital which sets us apart,” Bhargava told TechCrunch, adding that CashKaro’s cashback rates are among the highest in the market.
“Given that we now drive close to a half a billion dollars in GMV through CashKaro and EarnKaro to our partner sites, we are able to get higher commission rates from partner sites, which in turn helps us pass the most benefit to our members.”
“COVID-19 caught us by surprise and Indian e-commerce was neither prepared to handle the surge in demand, nor did we expect so many supply side and delivery issues,” said Bhargava. “Given CashKaro works with all e-commerce sites, we saw these trends as well.”
Since June, however, sales have started to recover and is seeing growth as people continue to stay home and shop online.
“Our business is growing month on month and, in fact, the pandemic spurred our expansion into new digital categories, like education, gaming and online video streaming, which have seen exponential growth,” Bhargava added. Sales of electronics, home and kitchen items, personal care and beauty have also increased over the past few months.
At the same time, the economic impact of the pandemic has prompted more people to seek cashback offers and other money-saving deals.
“We are seeing that saving consciousness has gone up amongst online shoppers and people are finding services like CashKaro and EarnKaro more useful than ever before,” Bhargava said. “On the client side, our partners, such as Amazon, Myntra and Ajio, are also working with us more closely because they are seeing that our performance marketing model is the perfect way to scale while keeping profitability in mind amidst these tough times.”
The new round of capital will be used for CashKaro’s goal of doubling its registered member base over the next 12 months from the current 5 million. Bhargava told TechCrunch that it will expand cashback offers into categories like credit cards and education, and launch new marketing campaigns focused around events like upcoming festivals and the Indian Premier League season, which starts this weekend.
The company is also “chasing aggressive growth for EarnKaro and reaching out to more influencers, resellers, housewives and students who are our primary target market for this product,” she added. Finally, part of the Series B will be used for hiring, including leadership positions.
For Korea Investment Partners, one of the largest South Korean venture capital firms, CashKaro represents a chance to tap into India’s fast-growing e-commerce market. In a statement, managing partner Hudson Kyung-sik Ho said, “We believe this is a highly scalable opportunity and both Swati and Rohan have set it on a truly exciting growth trajectory. CashKaro and EarnKaro together have shown exceptional unit metrics and we are really excited to be a part of India’s affiliate story.”
Rob Gurzeev is CEO and co-founder of CyCognito, a company focused on giving CISOs the advantage over attackers.
Over the past decade, a number of high-profile cybersecurity issues have arisen during mega-M&A deals, heightening concerns among corporate executives.
In 2017, Yahoo disclosed three data breaches during its negotiation to sell its internet business to Verizon [Disclosure: Verizon Media is TechCrunch’s parent company]. As a result of the disclosures, Verizon subsequently reduced its purchase price by $ 350 million, approximately 7% of the purchase price, with the sellers assuming 50% of any future liability arising from the data breaches.
While the consequences of cyber threats were soundly felt by Yahoo’s shareholders and widely covered in the news, it was an extraordinary event that raised eyebrows among M&A practitioners but did not fundamentally transform standard M&A practices. However, given the high potential cost from cyber threats and the high frequency of incidents, acquirers need to find more comprehensive and expedient methods to address these risks.
Today, as conversations accelerate around cybersecurity matters during an M&A process, corporate executives and M&A professionals will point to improved processes and outsourced services for identifying and preventing security issues. Despite the heightened awareness among financial executives and a greater range of outsourced solutions for addressing cybersecurity threats, acquirers continue to report increasing numbers of cybersecurity incidents at acquired targets, often after the target has already been acquired. Despite this, acquirers continue to focus due diligence activities on finance, legal, sales and operations and typically see cybersecurity as an ancillary area.
While past or potential cyber threats are no longer ignored in the due diligence process, the fact that data breaches are still increasing and can cause negative financial impact that will be felt long after the deal has closed highlights a greater need for acquirers to continue to improve their approach and address cyber threats.
The current lack of focus on cybersecurity issues can be partially attributed to the dynamics of the M&A market. Most middle-market companies (which constitute the nominal majority of M&A transactions) will typically be sold in an auction process where an investment bank is engaged by the seller to maximize value by fostering competitive dynamics between interested bidders. In order to increase competitiveness, bankers will typically drive a deal process forward as quickly as possible. Under tight time constraints, buyers are forced to prioritize their due diligence activities or risk falling behind in a deal process.
A typical deal process for a private company will move as follows:
Selling company’s investment bankers contact potential buyers, providing a confidential information memorandum (CIM), which contains summary information on a company’s history, operations and historical and projected financial performance. Potential buyers are typically given three to six weeks to review materials before deciding to move forward. Unless there is a previously known cybersecurity issue, a CIM will typically not address potential or current cybersecurity issues.
After the initial review period, indications of interest (IOI) are due from all interested bidders, who will be asked to indicate valuation and deal structure (cash, stock, etc.).
After IOIs have been submitted, the investment banker will work with the sellers to select top bidders. Key criteria that are evaluated include valuation, as well as other considerations such as timing, certainty of closing and credibility of buyer to complete the transaction.
Bidders selected to move forward are typically given four to six weeks after the IOI date to drill deeper into key diligence issues, review information in the seller’s data room, conduct a management presentation or Q&A with the target’s management and perform site visits. This is the first stage when cybersecurity issues could be most efficiently addressed.
Letter of Intent is due, when bidders reaffirm valuation and propose exclusivity periods wherein one bidder is selected on an exclusive basis to complete their due diligence and close the deal.
Once an LOI is signed, bidders typically have 30-60 days to complete the negotiation of definitive agreements that will outline in detail all terms of an acquisition. At this stage, acquirers have another opportunity to address cybersecurity issues, often using third-party resources, with the benefit of investing significant expenses with the greater certainty provided by the exclusivity period. The degree to which third party resources are directed toward cybersecurity relative to other priorities varies greatly, but generally speaking, cybersecurity is not a high-priority item.
Closing occurs concurrent with signing definitive agreements, or in other cases, closing occurs after signing often due to regulatory approvals. In either case, once a deal is signed and all key terms are determined buyers can no longer unilaterally back out of a deal.
In such a process, acquirers must balance internal resources to thoroughly evaluate a target with moving quickly enough to remain competitive. At the same time, the primary decision makers in an M&A transaction will tend to come from finance, legal, strategy or operating backgrounds and rarely will have meaningful IT or cybersecurity experience. With limited time and little background in cybersecurity, M&A teams tend to focus on more urgent transactional areas of the deal process, including negotiating key business terms, business and market trend analysis, accounting, debt financing and internal approvals. With only 2-3 months to evaluate a transaction before signing, cybersecurity typically only receives a limited amount of focus.
When cybersecurity issues are evaluated, they are heavily reliant on disclosures from the seller regarding past issues and internal controls that are in place. Of course, sellers cannot disclose what they do not know, and most organizations are ignorant of attackers who may already be in their networks or significant vulnerabilities that are unknown to them. Unfortunately, this assessment is a one-way conversation that is reliant on truthful and comprehensive disclosures from sellers, lending new meaning to the phrase caveat emptor. For this reason, it’s no coincidence that a recent poll of IT professionals by Forescout showed that 65% of respondents expressed buyer’s remorse due to cybersecurity issues. Only 36% of those polled felt that they had adequate time to evaluate cybersecurity threats.
While most M&A processes do not typically prioritize cybersecurity, M&A processes will often focus squarely on cybersecurity issues when known issues occur during or prior to an M&A process. In the case of Verizon’s acquisition of Yahoo, the disclosure of three major data breaches led to a significant reduction of purchase price, as well as changes in key terms, including stipulations that the seller would bear half the costs of any future liabilities arising from these data breaches. In April 2019, Verizon and the portion of Yahoo that was not acquired would end up splitting a $ 117 million settlement for the data breach. In a more recent example, Spirit AeroSystems’ acquisition of Asco has been pending since 2018 with a delayed closing largely due to a ransomware attack on Asco. In June 2019, Asco experienced a ransomware attack that forced temporary factory closures, ultimately causing a 25% purchase price reduction of $ 150 million from the original $ 604 million.
In both the case of Spirit and Verizon’s acquisitions, cybersecurity issues were largely addressed through valuation and deal structure, which limits financial losses, but does little to prevent future issues for a buyer, including loss of confidence among customers and investors. Similar to Spirit and Verizon’s acquisitions, acquirers will typically utilize structural elements of a deal to limit the economic losses. Various mechanisms and structures — including representations, warranties, indemnifications and asset purchases — can be utilized to effectively transfer the direct economic liabilities of an identifiable cybersecurity issue. However, they cannot compensate for the greater loss that would occur from reputational risk or loss of important trade secrets.
What the Spirit and Verizon examples demonstrate is that there is quantifiable value associated with cybersecurity risk. Acquirers who do not actively assess their M&A targets are potentially introducing a risk into their transaction without a mitigation. Given a limited timeline and the inherently opaque nature of a target’s cybersecurity issues, acquirers would benefit greatly from outsourced solutions that would require no reliance upon, or input from a target.
The scope of such an assessment ideally uncovers previously unknown deficiencies in the target’s security and exposure of business systems and key assets, including data and company secrets or intellectual property. Without such knowledge, acquirers go into deals partially blinded. Of course, industry best practice is to reduce risk. Adding this measure of cybersecurity assessment is an excellent practice today and likely a mandatory requirement in the future.
The Norwegian capital Oslo is a thriving tech startup ecosystem that has a buzzing startup scene. Adding to this, the government of Norway also supports the budding companies with initiatives including Startup Norway. And, there are events such as Startup Weekend Oslo that makes it interesting and motivating for budding entrepreneurs and young startups.
Top deals in Oslo in Q2 2020
It is no secret that Oslo is home to some aspirational tech startups in Europe across industries. And, here we have listed the top US VC deals in Oslo in Q2 2020 as reported by Pitchbook.
Founder/s: Namir Hassan Founded year: 2016 Total funding: €7.5 million
Zelluna Immunotherapy is a T Cell Receptor (TCR) cell therapy company secured €7.5 million equity funding and public grants. The company will focus on the development of TCR-NK cell therapy products based on its proprietary tech platform where TCRs are expressed functionally in NK cells. Recently, the company also announced the formation of partnerships with leading NK organisations providing access to NK cells, additional competency and expertise, and manufacturing facilities.
The company is pioneering the development of T cell receptor (TCR) guided natural killer cell immunotherapies for solid cancers’ treatment. It will secure new TCR targets via internal development programs as well as partnerships with other groups and companies.
Founder/s: Israr Khan, Kjetil Barli, Per Christian Goller, Heiki Strengelsrud Founded year: 2016 Total funding: €18.7 million
Aprila Bank announced that it secured $ 7.5 million Series A funding (nearly €6.67 million). This comes after the $ 21 million funding that it secured from Alliance Venture, Aksel Lund Svindal and others. However, the company hasn’t disclosed the investors that took part in the recent funding round.
Aprila Bank is an invoice finance provider based out of Norway. It enables users to sell the invoices directly from the accounting software. Users need to register on the platform and click on the sell button in the accounting software to receive funding. The company’s API-based tech platform connects around 130,000 SMEs via partnership agreements with leading accounting and cloud-based ERP system providers.
Founder/s: Marianne Bratt Ricketts, Stine Norum Founded year: 2016 Total funding: €1.7 million
Vibbio, a Norwegian tech startup works on solutions that provide the most efficient forms of business communications. Currently, it is surpassing all other online formats and can be used to engage with audiences within and outside organisations. Vibbio believes in empowering teams with an easy to use tool to create branded in-house videos and solve various communication tasks efficiently. The company disrupts the traditional agency model for video production, by leveraging technology and offering a full-service cloud-based video solution.
Vibbio’s vision is to make smart video accessible, affordable and automatic. Early in June, this startup secured €1.19 million funding from Nettuno Capital, Orkla Venture, TRK Group, 2M2D, and Investinor.
Founder/s: Amin Fard, Reza Shamshirgaran Founded year: 2017 Total funding: NA
Preppio is an onboarding experience software based out of Oslo. During the critical pre- and onboarding stage employees often lose their engagement and even quit. The company empowers HR and hiring managers to save time while increasing employee engagement and help reduce turnover. Preppio is a new breed of software that works without employees needing to download new apps or log into separate platforms. Preppio raised €0.28 million from Skyfall Ventures, Jon Stene, TRK Group, and Fredrik Gulowsen early in June this year.
Founder/s: Jan Johannessen, Kristian Wulfsberg Majer, Elin Parr Ohme, Michael Lybek Founded year: 2017 Total funding: €220k
Based out of Oslo, Tipio operates a consumer-driven marketplace for group purchases. It bagged €0.20 million in a fresh round via an equity crowdfunding campaign on Folkeinvest. With this investment, it will develop its digital marketplace that will let customers get better purchasing prices by grouping certain items. Tipio works with the vision to enable consumers take back power and decide for themselves, which product they want an offer on. Finally, a group buying platform will let them secure unique deals.
Founder/s: Morten Isaksen Founded year: 2016 Total funding: NA
In April this year, Bio-Me secured €2 million funding in terms of public support and grants from The Research Council of Norway to develop a companion diagnostic test for immune checkpoint inhibitor cancer treatments. It is known that the gut microbiome influences the efficiency of the ICI cancer treatments.
Bio-Me will us its breakthrough Precision Microbiome Profiling (PMP) technology to develop a microbiome-based test that can identify responders to ICI treatments. It has been developed by a close collaboration between leading academic researchers and clinical experts in the field. It is believed that the project will run until the end of 2023 and the diagnostic test is anticipated to improve patient outcomes significantly.
Berlin is a hotbed of notable tech startups across industries such as fintech, blockchain, mobility and more. The city is a breeding ground for entrepreneurial skills and capital that makes it a thriving ecosystem for next-generation tech companies. Even during the COVID-19 pandemic crisis, these German businesses were thriving quite well and have opted for Kurzarbeit (short-time work) instead of job loss.
Top deals in Berlin in Q2 2020
Some of these fast-growing startups have also raised further investment to help them grow and further develop their business and products. Having said that, here is a list of Berlin-based tech startups that have bagged maximum funding from VC investors in Q2 2020 as reported by PitchBook.
Founder/s: Valentin Stalf, Maximilian Tayenthal Founded year: 2013 Total funding: €711 million
Germany-based digital banking startup N26 works with the intention to change the future of banking and make it fast, digital, and easy to use for people all over the world. With its widespread success in Europe having over 5 million customers in 25 markets, N26 is focused on overseas expansion with the US being its priority.
The banking app secured nearly €92 million as an extension to the Series D funding back in July last year in May 2020 from its existing investors. With this investment, its valuation goes to €3.2 billion and it becomes one of the highest valued fintech companies across the world. Also, the investment during COVID-19 pandemic crisis marks the shift in digital banking adoption.
Founder/s: Lawrence Leuschner, Julian Blessin, Matthias Laug Founded year: 2018 Total funding: €138 million
The Berlin-based micro-mobility startup Tier Mobility is a hot startup from Germany that specialises in e-scooter rentals and operates in 55 cities across 11 countries. Recently, the startup unveiled the most advanced e-scooter with user swappable batteries, indicator lights, and an inbuilt helmet. This best-in-class e-scooter lets users can earn free rides by swapping the batteries at the various charging stations set up across the UK.
Back in June this year, TIER Mobility secured €20 million from Northzone, White Star Capital, Goodwater Capital and RTP Global as an extension to its Series B funding round. The ride-sharing and e-mobility startup prepares for its UK expansion with this investment.
Founder/s: Sascha Konietzke, Paolo Negri Founded year: 2013 Total funding: €143 million
Berlin-based Contentful works with the mission to help leading global brands manage content across digital channels and products. It offers a content platform for enterprises and lets them unify the same on a single hub. This lets large enterprises distribute content to their customers and provides JAMstack website template for all global companies.
The leading headless CMS startup completed its Series E funding round by securing nearly €71 million in a round led by Sapphire Ventures along with participation from Salesforce Ventures, General Catalyst, and other new and existing investors. This investment will be used to accelerate the expansion process and meet the requirements and momentum for the omnichannel platform.
Founder/s: Christian Hecker, Thomas Pischke, Marco Cancellieri Founded year: 2015 Total funding: €79 million
Trade Republic is a mobile-only, commission-free broker, which lets everyone to invest easily in stocks, derivatives, and ETFs. The company works as a broker to enable a more intuitive, more mobile, and permanently commission-free process. As of 2019, over 150,000 customers have opened a Trade Republic account, which makes it a leading Neo Broker in Europe.
In April this year, Trade Republic raised €62 million Series B funding round led by Founders Fund and Accel. This is one of the largest Series B funding round in the fintech industry in Europe. And, the company announced that the same will be used for the development of an European platform for mobile investing and trading.
Founder/s: Andreas Bittner, Marko Wenthin Founded year: 2016 Total funding: €155 million
solarisBank, which possesses a German banking licence has built an API-accessible banking platform to meet the requirements of the digital economy. This platform lets digital businesses create custom solutions as per their unique financial requirements. Its vision is to boost the growth of the digital economy with its banking services, payment services and add-on services.
In June 2020, solarisBank bagged €60 million Series C funding taking its valuation to €320 million. This investment round was led by HV Holtzbrinck Ventures, existing investor yabeo, BBVA, ABN AMRO Ventures, SBI Group, Hegus, Global Brain and Lakestar, and new investors Storm Ventures, Samsung Catalyst Fund, and Vulcan Capital.
Founder/s: Lino Teuteberg, Mathis Büchi Founded year: 2016 Total funding: €100 million
Berlin-based Taxfix is a mobile tax app, which automates the tax filing process. It asks users a set of 70 simple questions from around 3,000 questions customised to the users’ circumstances to maximise their tax refunds. It lets users submit the filing to the respective tax office and get up to €1000 tax return on an average.
Recently, Taxfix secured around €60 million Series C funding from Index Ventures along with existing investors. This funding round was led by Index Ventures, Creandum, Valar Ventures, and Redalpine. The German mobile tax app will use the investment to grow its teams in Madrid and Berlin and expand into new countries.
Founder/s: Dmitri Uvarovski, Steffen Wicker Founded year: 2015 Total funding: €60 million
Homeday is one of the largest platforms in Germany to find the best local agents and sell properties. The proptech startup operates with the mission to revolutionise the real estate market all over the world by building the global destination for property owners who want to sell their properties. It provides real estate sellers a full brokerage service sans any commission.
In June this year, Homeday secured €40 million funding from Axel Springer SE and Purplebricks. Besides this investment, the Berlin-based startup is backed by Project A, a leading VC firm in Europe with offices in London, Munich and Berlin. Homeday will use the investment for the development of its hybrid brokerage solutions.
Founder/s: Jan Deepen, Kobi Eldar, Stefan Jeschonnek Founded year: 2015 Total funding: €51.2 million
The Zeitgold app lets users scan receipts and invoices and its software matches these documents automatically with bank account transactions. All the data and documents will be transferred to the tax advisor automatically. Even the tax advisors can use the customised version of the software that was launched last year.
The intelligent software platform for small business accounting automation secured €27 million Series B funding in a round led by Vintage Investment Partners in May. The round involves funding from existing investors such as Battery Ventures, HV Holtzbrinck Ventures, Saban Ventures, and btov Partners, as well as insurance company AXA Germany and Deutsche Bank. The investment will be used to develop its proprietary AI-powered software and continue focusing on the growth of the business to become the leading accounting automation platform in Europe.
Founder/s: Daniel Heer, Projjol Banerjea, Stephan Schwebe Founded year: 2014 Total funding: €57.2 million
Zeotap provides SaaS-based customer intelligence platform (CIP), which lets companies to connect and transform the first-party data into actionable intelligence. Also, these companies will be able to predict and understand their customers’ behaviours and invest in more meaningful experiences. Its newly launched ID+ project empowers the marketing ecosystem of publishers, brands, and vendors alike with a privacy-compliant mechanism so that they can overcome identity resolution challenges.
In July this year, Zeotap bagged nearly €35 million in a Series C funding round from Neue Capital, coparion, Caroline Rupert’s family office, Kathaka, MathCapital and TTCER Partners and existing investors including New Science Ventures, Iris Capital, Capnamic Ventures, HERE, Innov8 (Singtel), and IONIQ and business angels. It intends to use the investment for the development of its customer intelligence platform.
Founder/s: Lukas Brosseder, Peter Baumgart Founded year: 2017 Total funding: €32 million
PlusDental, a Berlin-based digital dentistry platform specialises in digital dentistry and aesthetic orthodontic treatments with clear aligners. Initially, it was selling sets of transparent splints for teeth straightening and offered customers to make their teeth imprint at the comfort of their home and receive a customised set of splints. Last year, it partnered with dental practices to scan the oral cavity.
This dentistry platform has secured €32 million Series C funding from international investors in May. The investment was led by Hong Kong-based Ping An Global Voyager Fund, Christian Wegner, the founder of the Re-commerce platform Momox, Lakestar, and HV Holtzbrinck. PlusDental will use this fresh Investment to develop its proprietary digital dentistry platform and continue the expansion of business in Germany and Europe.