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SoftBank-backed Getaround is raising $200M at a $1.5B+ valuation

Getaround, a car-sharing platform 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. SoftBank declined to 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.

Africa Roundup: Jumia files for IPO, OneFi acquires Amplify, FlexClub expands in Mexico

Less than a decade ago IPOs, acquisitions and global expansion by African startups were more possibility than reality. March saw all three from the continent’s tech scene.

Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange, per SEC documents and confirmation from chief executive Sacha Poignonnec.

In an updated filing, (since the March 12 original) Jumia indicated it will offer 13,500,000 ADR shares, for an offering price of $13 to $16 per share to trade under the ticker symbol “JMIA.” The IPO could raise up to $216 million for Jumia.

Since our first story (and reflected in the latest SEC docs), Mastercard Europe agreed upfront to buy $50 million in Jumia ordinary shares.

With a smooth filing process, Jumia will become the first African startup to list on a major global exchange. The company is incorporated in Germany, but maintains its headquarters in Nigeria, and operates exclusively in Africa, with 4,000 employees on the continent.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data. The company has started to generate annual revenues over $100 million, but like many burn-rate startups, has done so while racking up big losses.

There’ll be a lot more to cover, analyze and debate pre and post Jumia’s NYSE bell toll — which could happen in coming weeks or months. For example, can Jumia generate a profit; is it really an African startup; will Jumia become an acquisition target for a big outside name or an acquirer of smaller startups in African e-commerce? Stay tuned for continuing TechCrunch coverage.

On the acquisition front, Lagos-based online lending startup OneFi bought Nigerian payment solutions company Amplify for an undisclosed amount.

OneFi is taking over Amplify’s IP, team and client network of more than 1,000 merchants to which Amplify provides payment processing services, OneFi CEO Chijioke Dozie told TechCrunch.

The purchase of Amplify caps off a busy period for OneFi. Over the last seven months the Nigerian venture secured a $5 million lending facility from Lendable, announced a payment partnership with Visa and became one of the first (known) African startups to receive a global credit rating. OneFi is also dropping the name of its signature product, Paylater, and will simply go by OneFi (for now).

Collectively, these moves represent a pivot for OneFi away from operating primarily as a digital lender, toward becoming an online consumer finance platform.

“We’re not a bank but we’re offering more banking services…Customers are now coming to us not just for loans but for cheaper funds transfer, more convenient bill payment, and to know their credit scores,” said Dozie.

OneFi will add payment options for clients on social media apps, including WhatsApp, this quarter — something in which Amplify already holds a specialization and client base. Through its Visa partnership, OneFi will also offer clients virtual Visa wallets on mobile phones and start providing QR code payment options at supermarkets, on public transit and across other POS points in Nigeria.

On the back of the acquisition, OneFi is in the process of raising a round and will look to expand internationally, considering Senegal, Côte d’Ivoire, DRC, Ghana and Egypt and Europe for Diaspora markets.

On African startups expanding globally, FlexClub — a South African venture that matches investors and drivers to cars for ride-hailing services — announced it will expand in Mexico in a partnership with Uber after closing a $1.2 million seed round led by CRE Venture Capital.

The move comes as Africa’s tech-transit space continues to produce unique mobility solutions shaped around local needs.

FlexClub touts itself as a “gig economy investment platform” that is creating new asset classes in emerging markets, according to chief executive and co-founder Tinashe Ruzane.

That asset class, for now, is ride-hail vehicles. FlexClub allows investors to go on the site and purchase a car (ultimately managed and serviced by FlexClub). The startup then connects that car to an Uber driver who uses earnings to pay a weekly rental charge.

Those fees generate monthly fixed-rate interest income for the investor. The driver has the option of buying the car after 12 months, with a descending purchase price over time.

FlexClub’s platform manages the investment, rental income and disbursement of funds across all parties. The startup also handles insurance, maintenance and upkeep of the cars.

Ruzane envisions this as a model to finance multiple asset classes in emerging markets — where lending options are fewer for individuals who may not have credit histories.

“Our goal is to make this completely passive… where investors can invest in different kinds of assets on our platform, login to a dash, and see this is how my five cars in South Africa are doing, my vans in Mexico, my motorbikes in Indonesia — with a diversified portfolio around the world,” he explained.

FlexClub will begin work matching investors to cars and Uber drivers in Mexico in April. The startup sees opportunities to move into other mobility classes, such as Africa’s ride-hail motorcycle taxi and three-wheel tuk-tuk market, CEO Tinashe Ruzane told TechCrunch in this feature.

And finally, francophone Africa will see a boost in funds and support for startups. The Dakar Network Angels group launched last month, making its first investment to cleantech venture Coliba — an Ivorian startup that uses a mobile app to coordinate waste recycling

The deal is part of Dakar Network Angels’ mission of convening experts and capital to bridge the resource gap for startups in French-speaking Africa — or 24 of the continent’s 54 countries.

The organization — which goes by DNA for short — will offer seed fund investments of between $25,000 to $100,000 to early-stage ventures with high growth potential. These rounds will come with the entrepreneurial guidance of DNA’s angel network.

Launched in Senegal, the organization’s founder Marieme Diop — a VC investor at Orange Digital Ventures — named the goal of bridging VC disparities between francophone and non-francophone Africa as the primary driver for DNA. She pointed to funding data by Partech, indicating that 76 percent of investment to African startups goes to three English-speaking countries — Nigeria, Kenya and South Africa.

To gain consideration for DNA investment, startups must gain referral by a member. DNA will take a minority stake (less than 10 percent) in ventures that receive seed funds and provide program mentorship until exits, Diop told TechCrunch.

To become an angel, members must commit to investing a minimum of $10,000 a year (for those coming on as individuals), $20,000 (for corporates) and be on hand to support the portfolio startups, according to DNA’s Corporate Membership Charter.

More Africa Related Stories @TechCrunch

African Tech Around The Net

African e-commerce startup Jumias shares open at $14.50 in NYSE IPO

Pan-African e-commerce company Jumia listed on the New York Stock Exchange today, with shares beginning trading at $14.50 under ticker symbol JMIA. This comes four weeks after CEO Sacha Poignonnec confirmed the IPO to TechCrunch and Jumia filed SEC documents.

With the public offering, Jumia becomes the first startup from Africa to list on a major global exchange.

In an updated SEC filing, Jumia indicated it is offering 13,500,000 ADR shares for an opening price spread of $13 to $16 per share, representing 17.6 percent of all company shares. The IPO could raise up to $216 million for the internet venture.

Since the original announcement (and reflected in the latest SEC docs), Mastercard Europe pre-purchased $50 million in Jumia ordinary shares.

The IPO creates another milestone for Jumia. The company in 2016 became the first African startup unicorn, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

There’s a lot to break down on Jumia’s going public. The company is often dubbed the “Amazon of Africa,” and like Amazon, Jumia comes with its own mixed buzz. Jumia’s SEC F-1 prospectus offers us more insight into the venture, and perhaps any startup from Africa, thus far.

About Jumia

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Jumia’s original co-founders included Nigerian tech entrepreneurs Tunde Kehinde and Raphael Afaedor, but both departed in 2015 to form other startups in fintech and logistics.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape. Jumia has extended this infrastructure as an e-commerce fulfillment product called Jumia Services.

Jumia has also opened itself up to Africa’s traders by allowing local merchants to harness Jumia to sell online. The company has more than 80,000 active sellers on the platform using the company’s payment, delivery and data-analytics services, Jumia Nigeria CEO Juliet Anammah told TechCrunch previously.

The most popular goods on Jumia’s shopping site include smartphones, washing machines, fashion items, women’s hair care products and 32-inch TVs, according to Anammah.

Jumia an African startup?

Like Amazon, Jumia brings its own mix of supporters and critics. On the critical side, there are questions of whether it’s actually an African startup. The parent for Jumia Group is incorporated in Germany and current CEOs Jeremy Hodara and Sacha Poignonnec are French.

On the flipside, original Jumia co-founders (Kehinde and Afaedor) are African. The company is headquartered (and also incorporated) in Africa (Lagos), operates exclusively in Africa, pays taxes on the continent, employs 5,128 people in Africa (page 125 of K-1) and the CEO of its largest country operation (Nigeria) Juliet Anammah is Nigerian.

The Africa authenticity debate often shifts into questions of a Jumia diversity deficit, which is of course important from Silicon Valley to Nairobi. The company’s senior management and board is a mix of Africans and expats. Golden State Warriors basketball player and tech investor Andre Iguodala joined Jumia’s board this spring with a priority on “diversity and making sure the African culture is in the company,” he told TechCrunch.

Can Jumia turn a profit?

The Jumia authenticity and diversity debates will no doubt roll on. But the biggest question — the driver behind the VC, the IPO, the founders and the people buying Jumia’s shares — is whether the startup can generate profits and ROI.

Obviously some of the world’s top venture investors, such as Jumia backers Goldman, AXA and Mastercard, think so. But for Jumia skeptics, there are the big losses. The company has generated years and years of losses, including negative EBITDA of €172 million in 2018 compared to revenues of €139 that same year.

To be fair to Jumia, most startups (e-commerce startups in particular) rack up losses for years before getting into the black. And operating in a greenfield sector in Africa — where it had to create much of the surrounding infrastructure to do B2C online sales — has presented higher costs for Jumia than e-commerce startups elsewhere.

On the prospects for Jumia’s profitability, two things to watch will be Jumia’s fulfillment expenses and a shift to more revenue from its non-goods-delivery services, which offer lower unit costs and higher-margins. Per Jumia’s SEC F-1 index (see above), freight and shipping make up more than half of its fulfillment expenses.

So Jumia has not turned a profit, but its revenues have increased steadily, up 11 percent to €93.8 million (roughly $106.2 million) in 2017 and up again to €130 million (or $147 million) in 2018. If the company boosts customer acquisition and lowers fulfillment costs — which could come from more internet services revenue and platform investment with IPO capital — it could close the gap between revenues and losses. This reflects the equation for most e-commerce startups. With the IPO, Jumia will have to publish its first full public financials in 2019, which will provide a better picture of profitability prospects.

Jumia’s IPO and African e-commerce?

There is, of course, a bigger play in Jumia’s IPO. One connected to global e-commerce and the future of online retail in Africa.

Jumia going public comes as Africa’s e-commerce landscape has seen its share of ups and downs, notably several failures in DealDey shutting down and the distressed acquisition of Nigerian e-commerce hopeful Konga.com.

As for the big global names, Alibaba has talked about Africa expansion, but for the moment has not entered in full.

Amazon offers limited e-commerce sales on the continent, but more notably, has started offering AWS services in Africa.

And this week, DHL came on the scene, launching its Africa eShop platform with 200 global retailers on board, in partnership with MallforAfrica’s Link Commerce fulfillment service.

Competition to capture Africa’s digitizing consumer markets — expected to spend $2 billion online by 2025, according to McKinsey — could get fierce, with more global entries, acquisitions and competition on fulfillment services all part of the mix.

And finally, the outcome of Jumia’s IPO carries weight even for its competitors. “Many things, like business decisions and VC investments across Africa’s e-commerce sector are on hold,” an African e-commerce exec told TechCrunch on background.

“Everyone’s waiting to see what happens with Jumia’s IPO and how they perform,” the exec said.

So the share price connected to NYSE ticker sign JMIA could reflect not just investor confidence in Jumia, but investor confidence in African e-commerce overall.

The Worlds Finance Chiefs Are Fretting About Cryptocurrencies
  • Assets could impact financial stability, ministers conclude
  • Bitcoin rallies after G-20 communique stops short of new rules

This time last year, finance chiefs from the world’s biggest economies were barely thinking about the niche industry of Bitcoin when they met in Germany. Now, they’re loudly warning cryptos could destabilize financial markets.

U.S. Treasury Secretary Steven Mnuchin and his counterparts gathered in Buenos Aires were fretting about the rapid rise of crypto assets at their first Group of 20 meeting of the year.

“We dedicated a lot of time to crypto currencies,” Argentine central bank President Federico Sturzenegger told reporters after the meeting. “We were asked to have concrete recommendations regarding crypto currencies by July.”

Cryptos rocketed up the G-20 agenda, after one of the wildest investment manias in history that’s led policy makers to worry about tax evasion, money laundering, terrorism, consumer protection and more. The industry could have financial stability implications at some point, they said in their final communique.

Japan’s Vice Finance Minister Minoru Kihara said discussions centered on the functionality of cryptos. “For example, can people make settlements using them, or do people use them in terms of the value of their assets?”

Bitcoin investors were expecting ministers to call for new rules on Tuesday even though it was the first time the group talked about the issue. Financial regulations usually take months, if not years, to be agreed. The digital currency jumped as much as 5.5 percent to $8,889 on the back of the news, after trading between $8,400 and $8,600 for the past day.

“The market is very emotional since Bitcoin will either be a complete success or a complete failure, so it’s very quick to react to news like this," said Miguel Schweizer, chief risk officer of crypto currency hedge fund Quantia Capital in Buenos Aires.

Not a Currency

Discussions on the emerging industry kept delegation chiefs working down to the wire on Tuesday, one of the last issues to be put to bed in the group’s final communique. They ultimately confirmed their view that cryptos “lack the key attributes of sovereign currencies.” That decision has implications for tax evasion and collection, because it means trades potentially could be subject to capital gains tax.

“I’d call them crypto assets as opposed to crypto currencies,” Canadian Finance Minister Bill Morneau said in an interview hours before the meeting concluded Tuesday. “The view of the people around the table” is “that we shouldn’t confuse what’s going on as being a currency.”

Read More: When Is Bitcoin Not a Coin? When It’s an Asset

The rapid rise of initial coin offerings in the past year, a hacked exchange in Japan and extreme volatility in the market forced central bank chiefs and governments to put them on the agenda even though they stopped short of recommending regulation. The group called on standard-setting bodies to monitor and recommend policies, if needed.

“A year ago initial coin offerings were too small for anyone to care too much about and now they’re too big to ignore,” said Greg Medcraft, director of financial and enterprise affairs at the Organisation for Economic Co-operation and Development.

Monthly Investments Into ICOs

In Billions

Source: CoinDesk

The digital nature of crypto assets places it squarely on the agenda for international co-operation. Meanwhile, nations like the European Union and U.S. are already starting to develop their own national policies on cryptos. They’re also keen to develop a framework while the industry is still new, hoping to avoid a repeat over how to tax tech giants like Alphabet Inc. Ministers failed to reach consensus on the issue of digital taxation in Buenos Aires.

Why Tech Giants May Have to Pay More Taxes in Europe: QuickTake

“The stability argument is something that requires monitoring. The usage of these assets, backing other assets in futures, options, is something that we have to monitor,” Italian Central Bank Governor Ignazio Visco said on the sidelines of the meeting Tuesday.

Utilities Plot a Digital FutureAnd Look Like Tech Stocks

In December, 20 months into the top job at Germany’s Innogy AG, Peter Terium unveiled a 3 billion-euro plan to transform the utility into a provider of electric car technology, digital networks, and offshore wind farms. His goal, he said, was to become “a trailblazer of change. We do not wait to see what happens. We set trends.” Terium didn’t need to wait long to see what happened. A week later, he was out of a job. 

Terium’s fate highlights the dilemma faced by European utilities. The likes of the U.K.’s Centrica Plc, Eon SE of Germany, and Italy’s Enel SpA are shifting away from their traditional business of simply selling electricity and starting to offer higher-tech—and potentially more profitable, but also riskier—services such as smart meters, rooftop solar panels, and installing batteries in customers’ garages.

Utilities, grid operators and other companies in the sector will plow $590 billion into digital initiatives from 2017 to 2025, or about a fifth what they’ll spend on of their total capital spending, according to Bloomberg New Energy Finance. The industry must make such investments if it’s going to survive, but “you need to credibly show that you can deliver,” said Leonard Birnbaum, an executive board member at Eon. “You can’t say, ‘Hey there’s the growth out there, let’s go spend money. Trust me and lets see what happens.”

Futureproofing Utilities

Spending by the energy sector on digitalization projects is set to soar

Source: Bloomberg New Energy Finance

The shift is changing the market’s view of what was long deemed a safe, stable sector that delivered consistent, if uninspiring, revenue growth. With the perceived risk of the industry on the rise, dividend yields of utility stocks have jumped. And the shares have been more volatile than the wider market since 2014 as prices for electricity, and the gas and coal needed to produce it, have whipsawed.

Smart Meters

“Energy prices are going up and down much more than they used to,” said Elchin Mammadov, an analyst at Bloomberg Intelligence. Rising competition has squeezed margins, and as companies move away from carbon-based fuels, “they need to invest more even as their earnings are not growing as fast.”

Innogy, Fortum Oyj of Finland, and Sweden’s Vattenfall AB have installed thousands of electric vehicle charging stations across the Continent. Iberdrola SA in Spain and France’s Engie SA are developing software to let them better manage power lines and networks. And almost all of Europe’s largest utilities now connect thermostats and appliances to smartphones. Though such programs are pricey—the companies must buy and install millions of smart meters—they see it as a necessary expenditure to help customers more efficiently use electricity.

Vattenfall E-car charging station in Berlin. 
Photographer: Krisztian Bocsi/Bloomberg

While the utilities feel they must adapt to the changing market with the shift, it’s difficult to predict the long-term payoff of initiatives such as e-car charging points given that there are few battery powered vehicles on the road, said Andreas Regnell, head of strategic development at Vattenfall. “We don’t know when it will be profitable,” Regnell said. “So we are spending money a bit on a leap of faith.”

“Google of Energy”

Enel is seeking to beef up its digital offerings via a unit dubbed Enel X. The division, which its chief hyperbolically calls “the Google of energy,” has some 1,000 employees working on projects ranging from Enel-branded credit cards to systems that let electric vehicle owners to sell power stored in their batteries back to the grid when demand peaks.

Francesco Venturini
Photographer: Aaron M. Sprecher/Bloomberg

“Technology has meant disruption for the energy industry,” says Enel X boss Francesco Venturini. “We’re trying to turn that technology into an opportunity.”

In January, hedge fund Marshall Wace said in a letter to investors that it had sold short shares of German power producer Uniper. The letter said the fund expects coal prices to fall, which would cut the price of power. Marshall Wace also predicts that some of the utility’s generating plants will be taken out of service and others will be displaced by renewables. Both those factors would shrink Uniper’s earnings as its electricity revenue declines, the fund said.

Companies have seen their stock prices drop as “a lot of market share has been lost to renewables,” said Ahmed Farman, an analyst at Jefferies International Ltd. in London.

Longer-term investors are also taking note. Ronald Wuijster, chief investment officer at Dutch pension fund APG Asset Management, says many utilities must change their strategies to survive. While there’s no one-size-fits-all solution, he suggests companies pay greater attention to the potential effects of climate change as they plan their investments.

“For so many utilities, if you look at the long term horizon you will see clear risks,” Wuijster said. “That could mean you’re gradually going to need to change your strategy.”

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