Author: vivian

Warburg-backed Singapore unicorn Trax targets US$3 billion valuation in next three years

Trax, a computer vision solutions and analytics firm based in Singapore is targeting to reach US$3 billion in valuation over the next three years. It currently stands at nearly US$1 billion.

Its Co-founder and Chief Executive Officer Joel Bar-El spoke at DealStreetAsia’s Asia PE-VC Summit 2018, explaining that the valuation target is not far-fetched as the company has already reached the unicorn mark of US$1 billion last month.

So far, Trax has raised an accumulative capital of US$286.7 million across 8 rounds since June 2011, with a notable US$64 million funding round led by American private equity firm Warburg Pincus.

Other backers in the startup also include Chinese private equity firm Boyu Capital and Broad Peak Investment, a hedge fund backed by Singapore’s state investment fund Temasek Holdings.

In fact, Trax reached a valuation of US$1 billion a year after it raised US$64 million in a funding round led by private equity firm Warburg Pincus.

“Warburg Pincus told us to get US$3 billion valuations in three years and we are already one-third of the way out of the three years. That is something we could not have thought of or envisioned to achieve without them pointing the way,” Bar-El said.

Besides, the co-founder also added that the continuous growth of the business is expected to push the company into a billion-dollar revenue firm in the next few years.

“Essentially, growth margins are there,” said Bar-El. “Our growth has been about three digits year-on-year for the past years so we are growing very fast. We are investing back all our profit into the growth of the business and as long as that formula works, profitability will not be an issue.”

The Proprietary Image Recognition Technology

The retail database and analytics platform that Trax produces is one-of-a-kind. It is the only company in the world that has managed to create a working computer vision platform that works in real time at the speed and scale that they are providing, and that is analyzing over a quarter of a billion of images every month.

This helps consumer companies enhance brand awareness and optimize store management by applying image recognition technology, which disrupts the traditional way of measuring and managing inventory.

The startup provides in-store execution, market intelligence, and data science solutions for consumer packaged goods (CPG) companies and retailers through its computer vision-to-platform, in order to process photos taken in store and deliver granular store-level insights within minutes.

Today, the startup has offices in Asia Pacific, Europe, Middle East, North America, and South America, and counts brands such as Coca-cola, Heineken, Nestle and Henkel among its clients.

Today, the startup has offices in Asia Pacific, Europe, Middle East, North America, and South America, and counts brands such as Coca-cola, Heineken, Nestle and Henkel among its clients.

Moving forward, the company looks to first accelerate its growth in China, where it expects backer Boyu Capital that invested in the company last month to make it a unicorn to help open some doors.

“We plan to grow in China so that it generates 25 percent of our revenue in the next three to five years,” said Dror Feldheim. ”I think the Chinese market has huge potential and can be as big as the North American market for Trax.”

On the same note, Bar-El also considers Initial Public Offering (IPO) in the future. It is another milestone but not a goal yet as of present.

Previously, before the company reached unicorn status, Trax had already been looking at exchanges in Australia and Tel Aviv, however the growth of the company over the years could also see itself listing on the United States Exchange Board where most of its customers are based.

“We will do an IPO at some stage but we are currently considering when is the right timing, so there is no specific date or time,” he said.

Interestingly, Trax has not had a single customer in home base Singapore. “We’ve never had a client in Singapore, and we still don’t today. We just happened to be living in Singapore, and it turned out to be the natural place for us to start the business,” said Bar-El.

B2B Online Marketplace Udaan Becomes India’s Fastest Unicron after US$225 Million Series C Funding

The Flipkart Mafia has done it again. While Flipkart had made headlines earlier this year when acquired by Walmart at a US$16 billion deal, Bengaluru-based B2B online marketplace Udaan – founded by former Flipkart employees – has also become India’s latest unicorn.

The startup has recently raised a US$225 million Series C funding round co-led by Russian internet billionaire Yuri Milner’s DST Global and existing investor Lightspeed Venture Partners, which previously led its Series A and Series B funding.

This brings the total aggregated funding to US$285 million, with the startup jumping up to a US$1 billion valuation within just 26 months of its launch. This makes it one of the fastest company in India to reach the unicorn status.

Remarkably, the latest valuation has also seen a surge of almost five times since its last US$50 million Series B funding in February 2018 with its valuation worth only US$200 million.

Unicorns Pick Pace in India

In fact, the year 2018 can rightly be said as the year of unicorns, with as many as six new startups joining the unicorn club in India.

That is apart from Udaan, the remaining startups who reached a US$1 billion valuation in 2018 are BYJU’s, Paytm Mall, Swiggy, PolicyBazaar, and SaaS startup Freshworks.

However it is not just an increasing number of unicorns, Indian startup unicorns are also achieving the status quicker compared to past unicorns.

India’s most valued tech company Flipkart took five years to reach the unicorn status, while delivery app Zomato also garnered its US$1.4 billion valuation in 2017 after nearly 10 years in business.

In comparison, 3D printing company Desktop Metal crossed the threshold at 21 months old while Craiglist competitor Letgo also became a unicorn in just 2 years. Though Udaan also made a record of reaching unicorn status in 26 months, the reason lies in its development.

Udaan’s Growth in the Past 26 Months

Launched in 2016, Udaan is an end-to-end marketplace that connects small- and medium- businesses directly with manufacturers. It runs an online platform for businesses in consumer goods, fashion and electronics, and offer logistic services and loan services.

The startup was founded by three former Flipkart employees – Sujeet Kumar, Amod Malviya, and Vaibhav Gupta – who were previously Flipkart’s President of Operations, Chief Technology Officer and Senior Vice President of business finance and analytics.

In ecommerce space, the market opportunity has been huge and Udaan focuses on the wholesale business to retail market sector.

As of February 2018, the startup has accumulated 150,000 in their seller base across 80 cities and delivers to more than 500 cities, with an average order value between INR 6,000 to INR 7,000 (about US$83 to US$97).

As a whole to date, Udaan is hitting revenues of Rs 300 to Rs 400 crore (about US$47.8 to US$55.7 million) every month, which is said to contribute to the five-fold increase on their business valuation in less than a year.

Bejul Somaima, a managing director at Lightspeed India that’s been on the company board since Series A told TechCrunch.

“We have been fortunate to see the company scale very rapidly from close quarters. We’re drawn to the company’s first-principles approach to solving significant problems that are unique in the Indian context.”

That is Udaan helps businesses discover customers, suppliers and products across categories and connect directly with each other for the best deal, in addition to facilitating buying and selling with secure payments and logistics.

Udaan’s Next Phase for Growth

While right now electronics and consumer goods are for sale on the app, Udaan plans to expand into more verticals including industrial goods, home and kitchen, office supplies, and fresh fruits and vegetables.

The newly raised funds are also expected to be utilized for establishing its logistic pieces as it aims to offer first mile and last mile services to its customers, as well as launching their own supply-chain solution, which will involve creating massive warehouses to store inventory.

Where are bike-sharing companies pedaling to?

Following Uber and Didi Chuxing, the sharing economy has moved on to micro-mobility in the shape of bicycle or startups. From Ofo to Mobikes, bicycles have been appearing in massive numbers across cities.

They are trying to serve as an important addition in transiting between infrastructure – a mode of transportation that could be used to cover the so-called first or last mile of any trip, such as the distance from home to the nearest subway station.

Two unicorns have also rapidly emerged from this micro-mobility space: Ofo and HelloBike both having achieved more than a billion-dollar valuation.

But it’s no surprise. After all, there can be no hype without a unicorn. The bike-sharing hype has caught the attention of investors who have poured millions of dollars in capital into the major startups.

Earlier this year, Alibaba put its weight behind Ofo – leading a US$866 million fundraising while its competitor HelloBike also managed to raise US$321 million in June from Alibaba’s affiliate Ant Financial.

Mobike, on the other hand, was acquired by China’s largest provider of on-demand online services Meituan Dianping for reportedly US$2.7 billion.

Using these funds, bike-sharing services have been ostensibly aiming to democratize access to rental bikes by using technology.

Bikes now become dockless, tagged with GPS chips which enable them to be rented via a mobile app and removing the need for them to be stored in a central location. This makes them hugely convenient and more economical.

At the same time, expansion projects were on the move.

In China alone, Ofo and Mobike were expanding rapidly in a relatively unregulated environment, racing to secure dominance by flooding the streets with their bicycles.

Beyond China, Ofo has also expanded aggressively in 2017, first moving into Singapore, then the United Kingdom, United States, Australia, France and other countries.

As of June 2018, Ofo claimed to have some 15 million bikes in operations in more than 300 cities across 22 countries, as well as 250 million global users.

Putting on the Brakes

However, now Ofo has hit the brakes and in certain cases backpedaling fast.

The Chinese bike-sharing startup has ceased operations in Malaysia last week, about a year since the bike-sharing service expanded into Melaka. Just today, it has ceased operations in Thailand.

They have also laid off employees across the board in North America and is dramatically pulling back its US operations. According to Quartz, Ofo told North American team members that they are going into sleep mode.

“As part of our focus, we have been working towards profitability and this has meant that some markets have had a change in staff priorities and positions,” said Ofo’s spokesperson.

This is a phase to reorganize Ofo’s international market strategy to center their focus on priority countries, which in Asia includes Singapore, Hong Kong, South Korea, and Japan.

At the same time, another bike sharing company oBike also ceased its operations in Singapore last June, leaving users in a lurch with millions of dollars in deposit yet to be returned while the service’s 14,000 bicycles remain strewn across the city.

Sharing Troubles

In cities around the world, bike sharing companies were struggling with theft and vandalism. The influx of undocked bikes from Ofo, as well as funded rivals like Mobike and HelloBike, led to huge graveyards of broken, abandoned bike.

Dockless bikes have also been found on streets, tossed into lakes or even thrown from buildings. Such vandalism has forced Hong Kong-based bike-sharing startup Gobee to retreat from Europe, before shutting down entirely in July.

But more than just vandalism, theft and poorly maintained bikes, the trouble for the bike-sharing company is more than just innovation. It’s about painting the utopian vision of reshaping society to be more caring, cooperative, and trusting.

Unicorns Dominates Exits in 2018 Creating Multi-Year High Record

Amid the startup landscape, unicorns are few and far between.

Just last year, CB Insights worked out the odds of becoming a unicorn – a company with a valuation exceeding $1 billion or more – to be less than 1 percent.

But according to new data from CrunchBase, the odds were beaten when in these last eight months of 2018, a total of 260 unicorns have taken flight with a total cumulative valuation close to US$840 billion.

The year 2018 is quickly diminishing the statistical rarity which spurred Cowboy Ventures Partner Aileen Lee to nickname these successful startups.

If the trend continues, 2018 will be a record-making year for billion-dollar companies.

Then again, with average round sizes closing higher and growth investors being optimistic and keeping the cash flowing into startups, this result is already in the making.

Crunchbase reporter Joanna Glaser said, ”In the first seven months of 2018, investors had put $73 billion into rounds for private venture-backed companies valued at US$1 billion or more.”

That by comparison, is already at three-quarters of the total for the whole of 2017, which was last counted at $98 billion.

This all adds up to enormous numbers, whereby startups like Uber or Didi Chuxing reaches an impressive valuation of over US$55 billion.

Freshworks becomes next unicorn with US$100 million funding led by Sequoia, Accel

If you haven’t been following the venture capital network in India, Freshworks is one of the larger SaaS providers you have probably never heard of… well, until now.

California and Chennai-based customer engagement software maker Freshworks has officially joined the country’s unicorn club, after raising US$100 million in a fresh round of funding co-led by Sequoia Capital and Accel Partners.

This new funding values the company at around $1.5 billion, doubling up from the valuation of $700 million it reached in late 2016.

Question, Who is Freshworks?

Founded in Chennai, India in 2010 as Freshdesk, the startup began as a helpdesk software providing a single cloud-based customer support solution for businesses.

In less than a decade, the firm grew exponentially, moving beyond customer service to offer a host of innovative product suites in ITSM and CRM domains.

From Freshdesk to Freshmarketer, the startup owns products ranging from sales CRM software to recruitment tools and IT streamlining software, and this ultimately drove the name change to Freshworks.

So, now if you ask what Freshworks does?

Freshworks

Image Source: Freshworks.com

It provides organizations of all sizes with a series of SaaS solutions that make it easier for customer support, sales and marketing professionals to communicate efficiently with customers for better service and to collaborate with team members and resolve customer issues.

The startup has a workforce of more than 1,000 employees globally across five offices in India, United Kingdom, Germany, Australia and the United States.

To date, their software is being used by over 150,000 organizations around the world, counting established names like Bridgestone, Toshiba. Cisco, NHS, Rightmove, Hugo Boss, Honda, and Citizens Advice

Looking at the success of the startup today, Ramesh Ravishankar, the marketing Director of Freshworks said that the metrics and insights from Google have played a big part in understanding and continuing their growth.

“Google tools are the most sophisticated for measuring a channel’s effectiveness. We are well-armored when having to talk about the return on investment of Google products.”

Freshworks Google Marketing

Image Source: Freshworks.com

From launch, Freshworks has been using Google Search advertising to build a customer base in mature markets across the United States and Europe.

The startup also adopted a unique global inside sales model that lowered the company’s cost of selling. This enabled Freshworks to put more into their digital marketing budget, and improve the customer on-boarding experience.

At the same time, as software products move from on-premise to a cloud-based model, the SaaS market in India has seen a rapid evolution. Instant decision making, cost-effectiveness, low risk, greater flexibility combined with an increasing mobile workforce and customers has been the driving force behind SaaS adoption.

“Freshworks has built the only customer engagement platform on the market that elegantly meets the needs of a business of any size with software that is modern, intuitive and affordable,” said Sameer Gandhi, a partner at Accel.

Today, Freshworks is a global powerhouse in cloud-based business software with a majority of revenue coming from North America, followed by Europe. They now have a customer base of over 130,000 with 60% of their business coming through Google products.

What’s next? Talks about IPO

With Freshworks riding on an incredible wave of growth and reaching the unicorn stage, many have started to ask when are the plans for IPO?

In fact, expectations for IPO in the near future has already sparked when the startup announced the appointment of Suresh Seshadri, former AppDynamics’ Vice President of Finance & Treasury as the Chief Financial Officer. Seshadri has previously helped prepare AppDyanmics for its IPO before it was acquired by Cisco in 2017,

“Coming on board to work with Girish and the rest of the executive team is an incredible opportunity and I am confident that we are well-positioned to reach the next phase of Freshworks’ expansion,” Seshadri said.

Freshworks CEO: Girish Marhrubootham

Image Source: VentureBeats.com

However, Freshworks CEO Girish Mathrubootham told TechCrunch we shouldn’t be holding our breath waiting for his company to IPO.

“Freshworks hasn’t started the IPO process but we do feel that we will eventually go public in the U.S.,” he said. “With that said, our primary focus right now is on growing the business and investing in our platform. When the timing is right, we’ll make that decision.”

At present, the startup will focus on expanding Freshworks’ worldwide expansion and continue investing in its integrated SaaS platform, especially at how it can use AI to bring innovations to its new tools.

“When we started Freshworks in 2010, we were a single-product company with a goal of offering better, easier-to-use customer service software than what was in the market,” said Girish.

“It’s been a long way but we’ve since scaled our company to US$100 million in annual recurring revenue and built a full SaaS platform where all of our products – such as Freshsales, Freshdesk, and Freshservice – work together seamlessly without requiring additional integration resources or consultants to make the software simply work,” he added.

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