Lightspeed announces new $560 million fund for China

Global investor Lightspeed is starting 2019 with its largest-ever fund for China, where it has backed a number of new internet challengers. The firm announced this week that its fourth China fund has closed with a total capital commitment of $560 million. The firm had a massive 2018, with no fewer than five of its portfolio holding IPOs […]

Global investor Lightspeed is starting 2019 with its largest-ever fund for China, where it has backed a number of new internet challengers. The firm announced this week that its fourth China fund has closed with a total capital commitment of $560 million.

The firm had a massive 2018, with no fewer than five of its portfolio holding IPOs including two of China’s up-and-coming startups that are challenging the country’s internet establishment — they are Meituan, the super app firm that specializes in deliveries, and Pinduoduo, a group e-commerce company that is threatening Alibaba’s dominance.

Based on those successes, it is perhaps not a surprise that Lightspeed has pulled in a record new fund. TechCrunch previously reported that the new fund was aimed at $360 million based on filings, but it added more capital to give more options.

Lightspeed said it has $360 million for early-stage deals aimed at Series A and Series B stages, with an additional $200 million set aside for “growth investments.” The new fund dwarfs Lightspeed’s previous vehicles in China — the firm’s previous two China funds each closed at $260 million while it raised $168 million for its debut fund in the country in 2013.

Lightspeed Venture Partners is a well-known investor that is anchored in Silicon Valley with global funds in India, Israeli and — of course — China. Together, those funds manage around $6 billion in capital, according to the firm.

Led by partners Chris Schaepe, Herry Han and James Mi, the China operation has backed a range of unicorns, including the aforementioned Meituan, which raised over $4 billion via a Hong Kong IPO last year, and Pinduoduo, which raised $1.6 billion via a U.S. listing in 2018. Other Lightspeed China IPOs from last year were PPDai, Rong360 and InnoLight while the firm also counts $9 billion-valued Full Truck Alliance, real estate platform Fangdd and Airbnb-like Tujia, both of which are valued in the billions, among the more mature bets in its portfolio.

“We believe there are plenty of new opportunities in China consumer Internet given the depth of China’s mobile payment and social networks. Innovation and entrepreneurship in the next decade will bring more China-based startups to the world stage. This will be China’s first decade of truly global innovation. Chinese entrepreneurs are now developing business plans with global expansion in mind from day one,” said Han, one of the firm’s founding partners, in a statement.

Last year, Lightspeed Venture Partners — the U.S. entity — filed to raise a record $1.8 billion in new capital commitments. In December, it added five new partners to its consumer and enterprise investment teams, including Slack’s former head of growth and Twitter’s former vice president of global business development.

Grab raises fundraising target to $5B as Southeast Asia’s ride-hailing war heats up

Southeast Asian ride-hailing firm Grab is aiming to start the new year with a bang and an awful load of bucks. The company, which acquired Uber’s local business earlier this year, is planning to raise as much as $5 billion from its ongoing Series H round, up from an original target of $3 billion, a source with […]

Southeast Asian ride-hailing firm Grab is aiming to start the new year with a bang and an awful load of bucks. The company, which acquired Uber’s local business earlier this year, is planning to raise as much as $5 billion from its ongoing Series H round, up from an original target of $3 billion, a source with knowledge of the plan told TechCrunch.

Grab declined to comment for this story.

That Series H round has been open since June. Already, it has seen participation from the likes of Toyota, Microsoft, Booking Holdings and Yamaha Motors who have pushed it close to the original $3 billion target. Prior to raising $150 million from Yamaha, Grab said the round stood at $2.7 billion. While it is true that the company first announced that it was “on track to raise over $3 billion by the end of 2018,” it is not public knowledge that it has set its sights as high as $5 billion.

A big part of that expansion is a planned investment from SoftBank’s Vision Fund which, as TechCrunch reported last week, is aiming to pump up to $1.5 billion into the business. Adding that to the $3 billion total appears to leave a further $500 million allocation for other investors to take up.

Grab is already the most capitalized startup in Southeast Asia’s history having raised around $6.8 billion to date from investors, according to data from Crunchbase. The company was last valued at $11 billion — when Toyota invested the initial $1 billion in this Series H six months ago — and it is unclear how much that valuation will increase when the round is completed.

The company is also one of the widest reaching consumer internet companies in Southeast Asia, a region of 650 million consumers. Grab claims over 130 million downloads and more than 2.5 billion completed rides to date, while it has expanded into fintech and it is going beyond ride-hailing app to offer Southeast Asia a ‘super app’ in the mold of Meituan in China. On the financial side, Grab is assumed to not yet be profitable. But it has said that it made $1 billion in revenue and that it projects that the figure will double in 2019.

Buying Uber’s business made it the dominant ride-sharing operator in the region — a position that saw it pay fines in Singapore and the Philippines — but Uber’s exit also saw Go-Jek, a rival in Indonesia, step up and expand its business into new markets. Go-Jek — which is backed by the likes of Tencent, Meituan and Google — entered Vietnam in August and it has recently launched in Thailand and Singapore as it bids to step into Uber’s shadow.

With Go-Jek aiming to raise $2 billion of its own, it certainly looks like Grab’s extension of its already-enormous Series H round is aimed at increasing its war chest as the competition intensifies in post-Uber Southeast Asia.