China is funding the future of American biotech

Silicon Valley is in the midst of a health craze, and it is being driven by “Eastern” medicine. It’s been a record year for US medical investing, but investors in Beijing and Shanghai are now increasingly leading the largest deals for US life science and biotech companies. In fact, Chinese venture firms have invested more this […]

Silicon Valley is in the midst of a health craze, and it is being driven by “Eastern” medicine.

It’s been a record year for US medical investing, but investors in Beijing and Shanghai are now increasingly leading the largest deals for US life science and biotech companies. In fact, Chinese venture firms have invested more this year into life science and biotech in the US than they have back home, providing financing for over 300 US-based companies, per Pitchbook. That’s the story at Viela Bio, a Maryland-based company exploring treatments for inflammation and autoimmune diseases, which raised a $250 million Series A led by three Chinese firms.

Chinese capital’s newfound appetite also flows into the mainland. Business is booming for Chinese medical startups, who are also seeing the strongest year of venture investment ever, with over one hundred companies receiving $4 billion in investment.

As Chinese investors continue to shift their strategies towards life science and biotech, China is emphatically positioning itself to be a leader in medical investing with a growing influence on the world’s future major health institutions.

Chinese VCs seek healthy returns

We like to talk about things we can interact with or be entertained by. And so as nine-figure checks flow in and out of China with stunning regularity, we fixate on the internet giants, the gaming leaders or the latest media platform backed by Tencent or Alibaba.

However, if we follow the money, it’s clear that the top venture firms in China have actually been turning their focus towards the country’s deficient health system.

A clear leader in China’s strategy shift has been Sequoia Capital China, one of the country’s most heralded venture firms tied to multiple billion-dollar IPOs just this year.

Historically, Sequoia didn’t have much interest in the medical sector.  Health was one of the firm’s smallest investment categories, and it participated in only three health-related deals from 2015-16, making up just 4% of its total investing activity. 

Recently, however, life sciences have piqued Sequoia’s fascination, confirms a spokesperson with the firm.  Sequoia dove into six health-related deals in 2017 and has already participated in 14 in 2018 so far.  The firm now sits among the most active health investors in China and the medical sector has become its second biggest investment area, with life science and biotech companies accounting for nearly 30% of its investing activity in recent years.

Health-related investment data for 2015-18 compiled from Pitchbook, Crunchbase, and SEC Edgar

There’s no shortage of areas in need of transformation within Chinese medical care, and a wide range of strategies are being employed by China’s VCs. While some investors hope to address influenza, others are focused on innovative treatments for hypertension, diabetes and other chronic diseases.

For instance, according to the Chinese Journal of Cancer, in 2015, 36% of world’s lung cancer diagnoses came from China, yet the country’s cancer survival rate was 17% below the global average. Sequoia has set its sights on tackling China’s high rate of cancer and its low survival rate, with roughly 70% of its deals in the past two years focusing on cancer detection and treatment.

That is driven in part by investments like the firm’s $90 million Series A investment into Shanghai-based JW Therapeutics, a company developing innovative immunotherapy cancer treatments. The company is a quintessential example of how Chinese VCs are building the country’s next set of health startups using their international footprints and learnings from across the globe.

Founded as a joint-venture offshoot between US-based Juno Therapeutics and China’s WuXi AppTec, JW benefits from Juno’s experience as a top developer of cancer immunotherapy drugs, as well as WuXi’s expertise as one of the world’s leading contract research organizations, focusing on all aspects of the drug R&D and development cycle.

Specifically, JW is focused on the next-generation of cell-based immunotherapy cancer treatments using chimeric antigen receptor T-cell (CAR-T) technologies. (Yeah…I know…) For the WebMD warriors and the rest of us with a medical background that stopped at tenth-grade chemistry, CAR-T essentially looks to attack cancer cells by utilizing the body’s own immune system.

Past waves of biotech startups often focused on other immunologic treatments that used genetically-modified antibodies created in animals.  The antibodies would effectively act as “police,” identifying and attaching to “bad guy” targets in order to turn off or quiet down malignant cells.  CAR-T looks instead to modify the body’s native immune cells to attack and kill the bad guys directly.

Chinese VCs are investing in a wide range of innovative life science and biotech startups. (Photo by Eugeneonline via Getty Images)

The international and interdisciplinary pedigree of China’s new medical leaders not only applies to the organizations themselves but also to those running the show.

At the helm of JW sits James Li.  In a past life, the co-founder and CEO held stints as an executive heading up operations in China for the world’s biggest biopharmaceutical companies including Amgen and Merck.  Li was also once a partner at the Silicon Valley brand-name investor, Kleiner Perkins.

JW embodies the benefits that can come from importing insights and expertise, a practice that will come to define the companies leading the medical future as the country’s smartest capital increasingly finds its way overseas.

GV and Founders Fund look to keep the Valley competitive

Despite heavy investment by China’s leading VCs, Silicon Valley is doubling down in the US health sector.  (AFP PHOTO / POOL / JASON LEE)

Innovation in medicine transcends borders. Sickness and death are unfortunately universal, and groundbreaking discoveries in one country can save lives in the rest.

The boom in China’s life science industry has left valuations lofty and cross-border investment and import regulations in China have improved.

As such, Chinese venture firms are now increasingly searching for innovation abroad, looking to capitalize on expanding opportunities in the more mature US medical industry that can offer innovative technologies and advanced processes that can be brought back to the East.

In April, Qiming Venture Partners, another Chinese venture titan, closed a $120 million fund focused on early-stage US healthcare. Qiming has been ramping up its participation in the medical space, investing in 24 companies over the 2017-18 period.

New firms diving into the space hasn’t frightened the Bay Area’s notable investors, who have doubled down in the US medical space alongside their Chinese counterparts.

Partner directories for America’s most influential firms are increasingly populated with former doctors and medically-versed VCs who can find the best medical startups and have a growing influence on the flow of venture dollars in the US.

At the top of the list is Krishna Yeshwant, the GV (formerly Google Ventures) general partner leading the firm’s aggressive push into the medical industry.

Krishna Yeshwant (GV) at TechCrunch Disrupt NY 2017

A doctor by trade, Yeshwant’s interest runs the gamut of the medical spectrum, leading investments focusing on anything from real-time patient care insights to antibody and therapeutic technologies for cancer and neurodegenerative disorders.

Per data from Pitchbook and Crunchbase, Krishna has been GV’s most active partner over the past two years, participating in deals that total over a billion dollars in aggregate funding.

Backed by the efforts of Yeshwant and select others, the medical industry has become one of the most prominent investment areas for Google’s venture capital arm, driving roughly 30% of its investments in 2017 compared to just under 15% in 2015.

GV’s affinity for medical-investing has found renewed life, but life science is also part of the firm’s DNA.  Like many brand-name Valley investors, GV founder Bill Maris has long held a passion for the health startups.  After leaving GV in 2016, Maris launched his own fund, Section 32, focused specifically on biotech, healthcare and life sciences. 

In the same vein, life science and health investing has been part of the lifeblood for some major US funds including Founders Fund, which has consistently dedicated over 25% of its deployed capital to the space since at least 2015.

The tides may be changing, however, as the recent expansion of oversight for the Committee on Foreign Investment in the United States (CFIUS) may severely impact the flow of Chinese capital into areas of the US health sector. 

Under its extended purview, CFIUS will review – and possibly block – any investment or transaction involving a foreign entity related to the production, design or testing of technology that falls under a list of 27 critical industries, including biotech research and development.

The true implications of the expanded rules will depend on how aggressively and how often CFIUS exercises its power.  But a lengthy review process and the threat of regulatory blocks may significantly increase the burden on Chinese investors, effectively shutting off the Chinese money spigot.

Regardless of CFIUS, while China’s active presence in the US health markets hasn’t deterred Valley mainstays, with a severely broken health system and an improved investment environment backed by government support, China’s commitment to medical innovation is only getting stronger.

VCs target a disastrous health system

Deficiencies in China’s health sector has historically led to troublesome outcomes.  Now the government is jump-starting investment through supportive policy. (Photo by Alexander Tessmer / EyeEm via Getty Images)

They say successful startups identify real problems that need solving. Marred with inefficiencies, poor results, and compounding consumer frustration, China’s health industry has many

Outside of a wealthy few, citizens are forced to make often lengthy treks to overcrowded and understaffed hospitals in urban centers.  Reception areas exist only in concept, as any open space is quickly filled by hordes of the concerned, sick, and fearful settling in for wait times that can last multiple days. 

If and when patients are finally seen, they are frequently met by overworked or inexperienced medical staff, rushing to get people in and out in hopes of servicing the endless line behind them. 

Historically, when patients were diagnosed, treatment options were limited and ineffective, as import laws and affordability issues made many globally approved drugs unavailable.

As one would assume, poor detection and treatment have led to problematic outcomes. Heart disease, stroke, diabetes and chronic lung disease accounts for 80% of deaths in China, according to a recent report from the World Bank

Recurring issues of misconduct, deception and dishonesty have amplified the population’s mounting frustration.

After past cases of widespread sickness caused by improperly handled vaccinations, China’s vaccine crisis reached a breaking point earlier this year.  It was revealed that 250,000 children had been given defective and fallacious rabies vaccinations, a fact that inspectors had discovered months prior and swept under the rug.

Fracturing public trust around medical treatment has serious, potentially destabilizing effects. And with deficiencies permeating nearly all aspects of China’s health and medical infrastructure, there is a gaping set of opportunities for disruptive change.

In response to these issues, China’s government placed more emphasis on the search for medical innovation by rolling out policies that improve the chances of success for health startups, while reducing costs and risk for investors.

Billions of public investment flooded into the life science sector, and easier approval processes for patents, research grants, and generic drugs, suddenly made the prospect of building a life science or biotech company in China less daunting. 

For Chinese venture capitalists, on top of financial incentives and a higher-growth local medical sector, loosening of drug import laws opened up opportunities to improve China’s medical system through innovation abroad.

Liquidity has also improved due to swelling global interest in healthcare. Plus, the Hong Kong Stock Exchange recently announced changes to allow the listing of pre-revenue biotech companies.

The changes implemented across China’s major institutions have effectively provided Chinese health investors with a much broader opportunity set, faster growth companies, faster liquidity, and increased certainty, all at lower cost.

However, while the structural and regulatory changes in China’s healthcare system has led to more medical startups with more growth, it hasn’t necessarily driven quality.

US and Western investors haven’t taken the same cross-border approach as their peers in Beijing. From talking with those in the industry, the laxity of the Chinese system, and others, have made many US investors weary of investing in life science companies overseas.

And with the Valley similarly stepping up its focus on startups that sprout from the strong American university system, bubbling valuations have started to raise concern.

But with China dedicating more and more billions across the globe, the country is determined to patch the massive holes in its medical system and establish itself as the next leader in international health innovation.

Hiver lets you manage shared email addresses from Gmail

Meet Hiver, a service that lets you collaborate on generic email addresses, such as jobs@yourcompany.com, support@, sales@, etc. Hiver isn’t the only company working on shared inboxes. But compared to Front, everything happens in Gmail directly. To be fair, Front has been doing a fantastic job when it comes to multiplayer email — and the company […]

Meet Hiver, a service that lets you collaborate on generic email addresses, such as jobs@yourcompany.com, support@, sales@, etc. Hiver isn’t the only company working on shared inboxes. But compared to Front, everything happens in Gmail directly.

To be fair, Front has been doing a fantastic job when it comes to multiplayer email — and the company has been doing great. Front is a new email client that lets you work together on your inbound emails.

But many teams don’t necessarily want to use a brand new email client. Some people love the Gmail interface so much that they don’t even think about switching to something else.

Hiver is a Google Chrome extension that adds a bunch of feature to your Gmail inbox. In addition to your personal inbox, you can now access shared inboxes with other people in your team. You can then assign an email to one of your coworkers and see what everybody is working on.

If you need help in order to reply to a tedious email, you can write a note in the right column and notify your teammates using @-mentions. All your comments live in this separate column so that you don’t clutter your email thread with forwards and CCs.

Whenever someone starts replying, Hiver shows a collision alert so that customers don’t get two replies. You can also use templates for faster replies, send emails later and share drafts to get another pair of eyes.

More recently, Hiver added automation with simple if/then rules to assign conversations to the right person and categorize your emails automatically.

If you’ve used Front in the past, those features will sound familiar as you can do all of this in Front, and much more. But it turns out that some companies really wanted a “Front for Gmail”.

Hiver just raised a $4 million funding round from Kalaari Capital and Kae Capital. The company is based in India and has 50 employees already. A thousand companies are currently using Hiver, such as Hubspot, Vacasa, Pinterest and Lyft. Most of Hiver’s clients are based in the U.S.

Building a product on top of Gmail creates some limitations. For instance, you’ll have to remain a G Suite customer in order to keep using Hiver. Hiver also works better on desktop. The company has mobile apps, but they are still a bit basic so far.

Hiver uses a software-as-a-service approach. Plans start at $14 per user per month, and you need to pay more for automations, Salesforce integration and more.

Hiver lets you manage shared email addresses from Gmail

Meet Hiver, a service that lets you collaborate on generic email addresses, such as jobs@yourcompany.com, support@, sales@, etc. Hiver isn’t the only company working on shared inboxes. But compared to Front, everything happens in Gmail directly. To be fair, Front has been doing a fantastic job when it comes to multiplayer email — and the company […]

Meet Hiver, a service that lets you collaborate on generic email addresses, such as jobs@yourcompany.com, support@, sales@, etc. Hiver isn’t the only company working on shared inboxes. But compared to Front, everything happens in Gmail directly.

To be fair, Front has been doing a fantastic job when it comes to multiplayer email — and the company has been doing great. Front is a new email client that lets you work together on your inbound emails.

But many teams don’t necessarily want to use a brand new email client. Some people love the Gmail interface so much that they don’t even think about switching to something else.

Hiver is a Google Chrome extension that adds a bunch of feature to your Gmail inbox. In addition to your personal inbox, you can now access shared inboxes with other people in your team. You can then assign an email to one of your coworkers and see what everybody is working on.

If you need help in order to reply to a tedious email, you can write a note in the right column and notify your teammates using @-mentions. All your comments live in this separate column so that you don’t clutter your email thread with forwards and CCs.

Whenever someone starts replying, Hiver shows a collision alert so that customers don’t get two replies. You can also use templates for faster replies, send emails later and share drafts to get another pair of eyes.

More recently, Hiver added automation with simple if/then rules to assign conversations to the right person and categorize your emails automatically.

If you’ve used Front in the past, those features will sound familiar as you can do all of this in Front, and much more. But it turns out that some companies really wanted a “Front for Gmail”.

Hiver just raised a $4 million funding round from Kalaari Capital and Kae Capital. The company is based in India and has 50 employees already. A thousand companies are currently using Hiver, such as Hubspot, Vacasa, Pinterest and Lyft. Most of Hiver’s clients are based in the U.S.

Building a product on top of Gmail creates some limitations. For instance, you’ll have to remain a G Suite customer in order to keep using Hiver. Hiver also works better on desktop. The company has mobile apps, but they are still a bit basic so far.

Hiver uses a software-as-a-service approach. Plans start at $14 per user per month, and you need to pay more for automations, Salesforce integration and more.

Tesla inks deal for Gigafactory 3 in China

Tesla has secured the rights to about 210 acres of land in Lingang, Shanghai, the site of the electric automaker’s planned factory and its first outside of the U.S.

Tesla has secured the rights to about 210 acres of land in Lingang, Shanghai, the site of the electric automaker’s planned factory and its first outside of the U.S.

Tesla executives and leaders of the Shanghai Economics and Information Committee, Shanghai Lingang Area Development Administration and Shanghai Lingang Group witnessed the agreement-signing ceremony in China on Wednesday.

“Tesla’s mission is to accelerate the world’s transition to sustainable energy not only through all-electric vehicles, but also scalable clean energy generation and storage products,” Robin Ren, Tesla’s vice president of Worldwide Sales said in a statement. “Securing this site in Shanghai, Tesla’s first Gigafactory outside of the United States, is an important milestone for what will be our next advanced, sustainably developed manufacturing site.”

The land transfer marks an important step for Tesla, which recently said rising costs had prompted the company to accelerate construction of its so-called Gigafactory 3. Tesla warned in its production and delivery report in early October that tariffs, combined with the cost of shipping its vehicles via ocean carrier and the lack of access to cash incentives available to locally produced electric vehicles, has put the company at a disadvantage in China.

Tesla reasserted those statements Wednesday, noting that it expects the project to be a “capital efficient and rapid buildout, using many lessons learned from the Model 3 ramp in North America.”

Tesla reached a deal in July with the Shanghai government to build a factory that it says will be capable of producing 500,000 electric vehicles a year. Once construction begins, it will take about two years until Tesla can produce vehicles. It will be another “two to three years before the factory is fully ramped up to produce around 500,000 vehicles per year for Chinese customers,” a Tesla spokesman said at the time.

The Shanghai factory deal marks a shift within the Chinese government to allow foreign companies to build and operate wholly owned facilities there. Foreign companies have historically had to form a 50-50 joint venture with a local partner to build a factory in China.

Chinese President Xi Jinping has said the country will phase out joint-venture rules for foreign automakers by 2022. Tesla is one of the first beneficiaries of this rule change.

The agreement allows Tesla to construct and operate a wholly owned factory in Lingang. The new factory will carry out research and development, manufacturing and sales operations.

The Chinese government will still be involved, however. Under a cooperation agreement, the Shanghai government and Tesla will jointly promote electric vehicle technology and industry development. The city of Shanghai said it will provide support for Gigafactory 3, although details are thin as to what that might mean.

International growth, primarily in China, fuels the VC market today

The venture capital business model has gone global. VC is still an exclusive club of financiers, but now with worldwide scope and scale.

The venture capital business model has gone global. VC is still an exclusive club of financiers, but now with worldwide scope and scale.

According to Crunchbase projections Crunchbase News reported in Q3 2018, worldwide VC deal and dollar volume each set new all-time records. In the U.S. and Canada, deal volume declined slightly from Q2 highs but growing deal sizes pushed total dollar volume to new heights.

Much of this global growth comes from markets outside the U.S. and Canada. A recent collaborative study between Startup Revolution and the Center for American Entrepreneurship indicates that Beijing, China was the city that contributed most to global growth in venture capital investment growth.

Here’s the geographic breakdown of projected deal volume over time. Note a somewhat choppy growth pattern in U.S. and Canadian deal volume, and compare that to a more consistent growth pattern in international deal volume. (For more about how and why Crunchbase makes these projections, check out the Methodology section at the end of the global report.)

In rapidly growing startup markets like China, venture deal volume is also at all-time highs, though venture dollar volume is down slightly.1 For the Asia-Pacific region as a whole, venture deal volume is up roughly 85 percent from the same time last year. Reported deal volume in China is up more than fourfold during the same period of time.

The rise of China’s venture market may be best seen from a city-level perspective. Below is a chart displaying the 10 most active startup cities in Q3, ranked by count of venture deals for each city as reported at the end of Q3. (The Methodology section of the global report also explains what “reported” data is and how it’s used.)

Of the top 10 cities displayed above, only three countries are represented. If it weren’t for the rest of Silicon Valley bolstering the Bay Area’s numbers, Beijing would beat out San Francisco in raw deal counts. (But, then again, Beijing is home to three times as many people as the entire Bay Area.)

Using deal and dollar volume as rough metrics for vivacity (if not necessarily health), this spread in VC activity could be seen as a good thing for the market as a whole. A rising tide of global VC activity lifts all startup markets, worldwide. However, much of that growth is still concentrated in just a few big markets.

The worldwide expansion and local reinterpretation of the Silicon Valley venture capital investment model is a phenomenon with which market participants (founders and funders alike) must reckon. Founders are responding by raising lots of money in ever-larger rounds, hoping that big investor checks are enough to buy large chunks of growing markets. Investors, in turn, are raising ever-larger funds to satiate these companies’ seemingly bottomless appetites for capital.

As in most mega-trends, participants who fail to adapt to changing market conditions will end up on the losing end of the market cycle.

  1. It should be noted that dollar volume declined mostly because Q2 numbers were skewed north by a $14 billion Series C round raised by Ant Financial. To this date, it’s the largest VC round ever closed.

With $50M in fresh funding, Allbirds will open new stores in the US, UK and Asia

Allbirds’ wool runners have been a VC favorite since the beginning. Now, the company is worth $1.4 billion.

The quintessential venture capitalist’s uniform consists of a pair of designer jeans, a Patagonia fleece vest and $95 wool sneakers.

The company behind the shoes, Allbirds, entered the unicorn club this morning with the announcement of a $50 million Series C from late-stage players T. Rowe Price, which led the round, Tiger Global and Fidelity Investments. The 3-year-old startup founded by Joey Zwillinger and Tim Brown has raised $75 million to date, including a $17.5 million Series B last year. Its backed by Leonardo DiCaprio, Scooter Braun, Maveron, Lerer Hippeau and Elephant, the venture capital firm led by Warby Parker founder Andrew Hunt.

The Wall Street Journal is reporting the round values Allbirds at $1.4 billion. The company would not confirm that figure to TechCrunch.

Like Warby Parker, San Francisco-based Allbirds began as a direct-to-consumer online retailer but has since expanded to brick-and-mortar, opening stores in San Francisco and New York. It currently ships to locations across the U.S., New Zealand, Australia and Canada. Next week, the company plans to open its first storefront in the U.K. in London’s Covent Garden neighborhood. It will begin shipping throughout the U.K. In 2019.

Using its latest investment, Allbirds will double down on its brick-and-mortar business. In addition to the U.K., the company says it will open even more locations in the U.S., as well as open doors in Asia in the coming months. Tiger Global, which has backed Allbirds since its Series B, may be of help. The firm has offices in Hong Kong and Singapore, as well as partners across Asia.

Allbirds makes eco-friendly wool shoes for men, women and kids via its kid’s line, aptly named Smallbirds. The shoes are made out of sustainable materials, including merino wool, a fabric made from eucalyptus fiber that the company has dubbed “Tree” and “SweetFoam,” a shoe sole made from sugarcane-based, carbon-negative foam rubber.

“Climate change is the problem of our generation and the private sector has a responsibility to combat it,” Zwillinger, Allbirds’ chief executive officer, said in a statement. “This injection of capital will help us bring our sustainable products to more people around the globe, demonstrating that comfort, design and sustainability don’t have to live exclusive of each other.”

It’s been quite the year for venture investment in … shoes. Rothy’s, which makes sustainable ballet flats for women, has raised $7 million and launched a sneaker. Atoms, a maker of minimalist shoes, brought in $560,000 in seed funding from LinkedIn’s ex-head of growth Aatif Awan and Shrug Capital. And GOAT, the operator of an online sneaker marketplace, nabbed a $60 million Series C in February.

Gogoprint raises $7.7M to expand its online printing business in Asia Pacific

Gogoprint, a startup that is aiming to disrupt the traditional printing industry in Southeast Asia, has pulled in a $7.7 million investment as prepares to expand its business in Asia Pacific. We first profiled Gogoprint in 2016 soon after its launch the previous year, and since then the Bangkok-based company has expanded beyond Thailand and […]

Gogoprint, a startup that is aiming to disrupt the traditional printing industry in Southeast Asia, has pulled in a $7.7 million investment as prepares to expand its business in Asia Pacific.

We first profiled Gogoprint in 2016 soon after its launch the previous year, and since then the Bangkok-based company has expanded beyond Thailand and into Singapore, Malaysia and Indonesia. Now, the company is looking to go beyond Southeast Asia and enter Australia, New Zealand, South Korea and other markets over the coming 12 months.

Those moves will be funded by this Series A round, which is led by existing Gogoprint backer OPG (Online Printing Group), an investment firm from Kai Hagenbuch who was an early backer of Brazil-based Printi. Printi previously sold a chunk of its business to printing giant VistaPrint through a 2014 investment and it is generally heralded as a startup success within its space.

Gogoprint claims to have worked with 45,000 companies to date. Its core services include printed business cards, flyers, booklets, posters and more, in addition to marketing collateral such as promotional pens, other stationary and flash drives.

Printing isn’t a particularly sexy space from the outside, but Gogoprint is aiming to upend the industry in Southeast Asia using something known as ‘batching.’ That involves bundling a range of customer orders together for each print run to ensure that each sheet that’s sent to the printer is filled to capacity, or near capacity.

That sounds obvious, but traditional printing batches were almost always below capacity because each customer ordered individually with little option for batching. Gogoprint uses the internet to reach a wider number of customers which, using technology to batch jobs, means that it can handle more orders with fewer printer runs. That translates to cost savings for its business and lower prices for its customers. There are also benefits for the printers themselves since they are guaranteed volume, which is no sure thing in today’s increasingly digital world.

Gogoprint joint managing director David Berghaeuser — who founded the company with fellow co-founder Alexander Suess — told TechCrunch that the company main pivot has been away from the idea it needed to own its printing facility in-house.

“When we started, we had this impression that as an online printer eventually we needed to own and operate our own machinery. But over one or two years we had a mindset shift when we realized there’s this option to operate this model as a pure marketplace — we’re definitely a marketplace and do not plan to own any printing machinery” he explained.

A large part of that is because in Southeast Asia it simply isn’t practical to ship products overseas, both in terms of time and also the cost and hassle of importing. So Gogoprint has local partners in each market that it works with. Rather than “disrupting” the system, Berghaeuser argued that his company is making the process more efficient.

Gogoprint staff at the company’s office in Bangkok, Thailand

Gogoprint currently has around 125 staff and there are plans to grow that number by an additional 30. In particular, Berghaeuser said the company is building out an internal structure that will enable it to scale — that includes the recent hiring of a CTO.

Berghaeuser explained that the company focuses on larger clients — such as Honda, Lazada and Lion Air — because of their higher average basket size and a higher chance of repeat custom, which he revealed is 60 percent on average. That’s achieved with a few tricks, which includes no design software on the website. Instead, Gogoprint customers upload their completed designs in any format. While he conceded the formats can be a pain, Berghaeuser clarified that the approach minimizes more hobbyist-type business, although he did say that the company is happy to work with customers of all sizes.

Gogoprint claims it grew its customer numbers by 200 percent over the past year but it declined to provide revenue details. Berghaeuser did say that the company has a path to profitability that’s helped by “healthy” profit margins of 30-80 percent depending on the product.

Hagenbuch, the early backer of Printi in Brazil, is convinced that Gogoprint is on to a good thing in Asia.

“There are a handful of big-name online printers operating in the region. However, each of them has localized operations as they have been unable to truly expand regionally into Southeast Asia due to operational and market form factors,” he said in a statement

“Gogoprint has found the right formula to win more and more customers by creating true value: providing something that’s better at a cheaper price point, and with enhanced speed to market,” Hagenbuch added.

Indonesian co-working startup GoWork lands $10 million

Co-working today is a global game that’s played by many more than just WeWork, despite the company’s valuation surging to $20 billion. But, as WeWork increasingly globalizes its focus, the U.S. firm is coming into contact with smaller players who are highly localized in markets with the potential to grow significantly. One such market is […]

Co-working today is a global game that’s played by many more than just WeWork, despite the company’s valuation surging to $20 billion. But, as WeWork increasingly globalizes its focus, the U.S. firm is coming into contact with smaller players who are highly localized in markets with the potential to grow significantly.

One such market is Indonesia, the largest economy in the growing region of Southeast Asia. Indonesia’s capital alone has a population of 10 million and it is tipped to overtake Tokyo as the world’s most populous city by 2020. WeWork is prioritizing Indonesia as one of the keys markets in Asia but already there are strong local competitors. EV Hive, now known as Cocowork, raised $20 million earlier this year, and now Gowork, a startup formed from a merger between Rework and GoWork, has pulled in $10 million for expansion.

The new capital is led by VC firm Gobi Partners and The Paradise Group, a firm that operates shopping malls, residential developments and more. 

GoWork currently operates 16 ‘hubs’ which are its main locations for 8,000 members and operate at over 90 percent occupancy. In addition, that reach is extended by a series of over 30 ‘spokes.’ Those are essentially smaller spaces that are designed to be accessible while members are traveling or wanting to work outside of normal business hours. They are developed in conjunction with F&B group Ismaya, so are located within their coffee shops or restaurants.

That might concept might sound cute but trivial in the West, but in Asia’s megacities, the option can help with productivity. In particular, Jakarta’s roads are so traffic logged that a day of meetings could require spendings hours queuing in traffic.

“We want to bring productivity to all people, we think that [issues like traffic jams] are costing us all money,” GoWork CEO Vanessa Hendriadi told TechCrunch in an interview.

Adding The Paradise Group to the team could help expand that spoke reach, as well as finding new real estate for GoWork spaces.

“Co-working is not a category anymore, it’s just how people work,” Hendriadi added. “WeWork has 57 spaces in Manhattan alone, it’s just a matter of time for when every office building or mall in Jakarta will need to have a space as this is a permanent shift in how people work.”

She added that, as in the West, Indonesia is beginning to see a shift in working for larger companies not just small startups or independent workers.

That’s why, Hendriadi explained, that GoWork is doubling down on its focus on Jakarta and look to second-tier cities, but there’s no immediate plan to venture overseas. The goal is to grow to reach over 100,000 sqm by 2020.

The GoWork CEO said that her company isn’t phased by WeWork and others like Cocowork — the latter which she said is aimed more at the mass market. Instead, Hendriadi believes that there is plenty of space in the market for a few major players.

“Obviously we watch what [WeWork] are doing and we speak to building owners to know where they are going, the fact we have a two-year head start — we’re talking to major property developers with great location — means we are not too worried. The pie is big and local players get a huge benefit that is not easily replicable by non-local players in this business as it is relationship based,” she said.

“We’re all here to educate the market and fulfill their needs,” she added. “Indonesia is the market we are familiar with, the opportunity is still massive so we’ll focus here, but we talk to big players in the region so when the opportunity comes with the right partner we won’t close any doors.”

China’s fast-rising Bullet Messenger hit with copyright complaint

Bullet Messenger, a fast-rising Chinese messaging upstart that’s gunning to take on local behemoth, WeChat, has been pulled from the iOS App Store owing to what its owners couch as a copyright complaint. Reuters reported the development earlier, saying Bullet’s owner, Beijing-based Kuairu Technology, claimed in a social media posting that the app had been taken down […]

Bullet Messenger, a fast-rising Chinese messaging upstart that’s gunning to take on local behemoth, WeChat, has been pulled from the iOS App Store owing to what its owners couch as a copyright complaint.

Reuters reported the development earlier, saying Bullet’s owner, Beijing-based Kuairu Technology, claimed in a social media posting that the app had been taken down from Apple’s app store because of a complaint related to image content provided by a partner.

“We are verifying the situation with the partner and will inform you as soon as possible when download capabilities are resumed,” it said in a statement on its official Weibo account.

The company did not specify which part of the app has been subject to a complaint.

We’ve reached out to Apple to ask if it can provide any more details.

According to checks by Reuters earlier today, the Bullet Messenger app was still available on China’s top Android app stores — including stores owned by WeChat owner Tencent, as well as Baidu and Xiaomi stores — which the news agency suggests makes it less likely the app has been pulled from iOS as a result of censorship by the state, saying apps targeted by regulators generally disappear from local app stores too.

Bullet Messenger only launched in August but quickly racked up four million users in just over a week, and also snagged $22M in funding.

By September it had claimed seven million users, and Chinese smartphone maker Smartisan — an investor in Bullet — said it planned to spend 1 billion yuan (~$146M) over the next six months in a bid to reach 100M users. Though in a battle with a competitive Goliath like WeChat (1BN+ active users) that would still be a relative minnow.

The upstart messenger has grabbed attention with its fast growth, apparently attracting users via its relatively minimal messaging interface and a feature that enables speech-to-text transcription text in real time.

Albeit the app has also raised eyebrows for allowing pornographic content to be passed around.

It’s possible that element of the app caught the attention of Chinese authorities which have been cracking down on Internet porn in recent years — even including non-visual content (such as ASMR) which local regulators have also judged to be obscene.

Although it’s equally possible Apple itself is responding to a porn complaint about Bullet’s iOS app.

Earlier this year the Telegram messaging app fell foul of the App Store rules and was temporarily pulled, as a result of what its founder described as “inappropriate content”.

Apple’s developer guidelines for iOS apps include a section on safety that proscribes “upsetting or offensive content” — including frowning on: “Apps with user-generated content or services that end up being used primarily for pornographic content.”

In Telegram’s case, the App Store banishment was soon resolved.

There’s nothing currently to suggest that Bullet’s app won’t also soon be restored.

Freight trucking startup Shipwell gets a $10 million boost

Shipwell, a startup pitching a marketplace for domestic ground shipping and fleet and cargo management services for freight trucking companies, has raised $10 million in a new round of funding. A booming American economy coupled with failing infrastructure and a low-margin business reluctant to adopt new technologies have put stress on domestic logistics companies in the […]

Shipwell, a startup pitching a marketplace for domestic ground shipping and fleet and cargo management services for freight trucking companies, has raised $10 million in a new round of funding.

A booming American economy coupled with failing infrastructure and a low-margin business reluctant to adopt new technologies have put stress on domestic logistics companies in the $900 billion market for U.S. trucking services.

Shipwell combines a marketplace for shippers to connect with freight companies and online tools to manage those shipments. In effect, the company is pitching a version of the proprietary logistics management toolkit that has made Amazon so successful, to any retailer or outlet. 

We coordinate the freight, we pay the truckers, we help optimize the fleets,” says Shipwell president and co-founder, Jason Traff. 

Those services — and the company’s growing business among small and medium-sized suppliers to the construction industry — brought the Austin-based company to the attention of Fifth Wall Ventures, the Los Angeles based investment firm whose limited partners are among the biggest construction companies in the world.

For Fifth Wall the opportunity was clear. “Shipwell’s full-service, digitized brokerage platform can streamline the way many of our Anchor LPs and portfolio companies approach large-scale freight shipping,” the firm’s principal — and newest Shipwell board member — Vik Chawla wrote in a blog post announcing its most recent deal.

Fifth Wall led the company’s Series A round, which also included the new investor Global Founders Capital and previous investors First Round Capital, Base 10 Ventures, Capital Theory and Village Global .

The company’s business isn’t for big shippers that deal with thousands of shipments per-day, but rather the small and medium sized businesses that spend $100 million or less per-year on freight. And the small-fleet shipping companies that make up the bulk of the industry.

“In addition to the obvious use case for Shipwell customers who own warehousing, landlords can use Shipwell to become effective facilitators for their tenants,” according to Chawla. “Some Anchor LPs [the limited partners that provide capital for Fifth Wall to invest] are already engaged in this shipping ecosystem on behalf of their tenants, while others act as transport hubs. Beyond these, however, there are easy tie-ins within a number of key categories of Fifth Wall Anchors [sic] that regularly ship or receive freight—developers, of course, but also retail, office, homebuilding anchors.”

“We focus on the longer tail. If you are doing $50 million in freight per-year then you’re doing dozens of shipments per week,” said Traff. “Most of our freight is less than a truckload or a full truckload freight and it’s more long-haul.”

It hasn’t been a straight road for Traff and his co-founder Gregory Price. Traff originally got the startup bug in Asia, where he launched a company that would sell low-cost copies of old masters paintings. When he sold that business he moved back to the U.S. and pitched an idea to Y Combinator that eventually became Leaky, a car insurance company.

When Leaky shut down and its business was acquired by Navion in 2013, Traff moved to Austin to figure out his next move.I t was there that he ran into a fellow Massachusetts Institute of Technology alumnus named Greg Price and the two began hatching schemes for the company that would become Shipwell.

The two men began planning the business in 2016 and only launched the service in the beginning of this year. “Supply chains were very complex and there was a lot of building to do,” Traff said. 

Shipwell makes money by charging a commission on freight services and fees for its freight management software platform.

Ultimately this could create a new model to unify a fragmented industry. “This connective approach makes all of the difference in an industry with so many small companies at play,” Chawla wrote. “A surprising 89% of freight trucks in the U.S. are owned by carriers with fewer than five total trucks, and 99% of freight carriers possess fewer than 10 total trucks in their fleet. Despite the big business of freight shipping in the U.S., it’s actually a fragmented market of small businesses.”