Today, we’re looking at venture capital trends and the outlook for 2016 in a variety of global e-commerce and cashback markets. Redpoint Ventures’ MaheshVellanki says Silicon Valley can look for opportunities in US technology as a result of global economic turmoil. Fortune magazine reports more than $5 billion raised for 46 US-based funds in the final quarter of 2015. In the UK, more than $3.6 billion raised in venture capital in 2015, according to figures from London & Partners, a 70% increase over 2014.
Pymnts.com said India had a busy year for B2B VC funding, highlighting several year-end deals. It also reported impressive growth in VC funding in Italy. TechCrunch identified 10 trends that will influence investment in SE Asia in 2016. TechinAsia reported impressive growth in financing in Indonesia. DealStreetAsia also reported substantial startup funding growth in the Philippines in 2015. Silvertree Internet Holdings announced a US$10-million investment for South African and African startups in 2016.
Global Economic Turmoil Is an Opportunity for Silicon Valley Tech
2016 is off to a rocky start. A bevy of startups such as Mixpanel, Gumroad, HotelTonight and GoodEggs have announced major layoffs. The damage is not limited to just early stage startups, but also to $1B+ unicorns and public companies such as Instacart, Tango, Evernote, Yahoo and Twitter. The list of layoff announcements is long, but the underlying basis for employee reductions is similar across the board – companies are becoming more rational and gearing up for tougher times. A recent TechCrunch article sums it up well, burn slower or vaporize.
Looking beyond technology, there are a lot of things happening on the global economic stage. With worries about China, oil prices, rising US interest rates, and the Euro zone, the world is becoming a volatile place. So is it all doom and gloom? How will Silicon Valley tech fare? Let’s start at the macro level and work out way backwards to see what is really going on: Via mahesh-vc.com
Term Sheet Tuesday, January 12
A bunch of notes to kick off your Tuesday:
• VC fundraising: U.S.-based venture capital firms raised $5 billion for 46 funds in the fourth quarter of 2015, according to Thomson Reuters and the National Venture Capital Association.
That brings the 2015 dollar total to $28.2, which was off 9% from 2014, but well above the $20.32 billion annual average since 2006 (and also higher than 2012 or 2013). Around 33.6% of the 235 U.S.-based VC funds that raised capital in 2015 were first-time efforts, which is down from 39.1% in 2014. Via fortune.com
UK tech firms smash venture capital funding record
The UK’s technology sector raised more than $3.6 billion in 2015, according to figures from by London & Partners, the Mayor of London’s ‘promotional’ company.
The investment represents an increase of more than 70% on the record amount raised in 2014 ($2.1 billion). London-based tech companies raised a record $2.28 billion during the period, a 69% increase on the $1.3 billion raised in 2014. Analysis of VC investment by London & Partners shows that since 2010 UK tech companies have collectively raised almost $10 billion with London-based companies accounting for more than half of the total ($5.2 billion). Via mob76outlook.com
B2B Venture Capital Roundup
India had a busy year when it came to B2B venture capitalists, so it’s appropriate the nation would lead some of the final VC roundups of 2015. This week, B2B eCommerce led India’s VCs interests, but there was another nation that made a rare appearance this week, too.
Industrybuying.com, a B2B eCommerce platform, nabbed fresh funding this week when Monday (Dec. 21) reports revealed that Murugappa and TVS Families backed the company, though the parties didn’t disclose how much Industrybuying raised. The funding follows only a few months after Industrybuying secured $9 million in Series B investments last September. Reports said Industrybuying will use the support to further develop the site and expand across India, eventually exploring how to provide a full suite of digital services to the B2B brands using the portal. Via pymnts.com
10 Trends That Will Shape SE Asian E-Commerce in 2016
With a population of 600 million — twice that of the US — Southeast Asia is poised to eventually become the third-largest e-commerce market in the world, second only to China and India (and ultimately surpassing the US). But enough of the macro overview. How did 2015 turn out? And what will 2016 bring to e-commerce?
Local, regional and global players stepped up their games. In particular, we saw Indonesia rise this year: MatahariMall launched with big fanfare as the nationalist answer to Rocket Internet’s Lazada; Lazada, in turn, doubled-down on Indonesia with the return of previous CEO Magnus Ekbom; for the first time, aCommerce Indonesia surpassed Thailand in order volume; and, recently, China’s Alibaba competitor JD snuck into Indonesia and surprised everyone with the launch of JD.id. This has served to add to an immense amount of pressure and competitiveness in the pure B2C space. Via techcrunch.com
5 years in review: Indonesia’s growth in startup funding since 2011
Startup funding in Indonesia experienced a serious surge in 2014. Tokopedia’s US$100 million round was the primary driver of this spike. It completely changed the scales. Startup investments prior to 2014 were below or in single-digit millions.
In 2015, it’s the US$500 million funding announcement by ecommerce newcomer MatahariMall that contributed to the apparent continued exponential growth. MatahariMall is backed entirely by Lippo Group, an Indonesian conglomerate. The size of that round has come into question, and it’s more likely MatahariMall is operating on less than that for now.
Lastly, one startup that had a massive breakthrough in 2015 is not represented in this graph – Go-Jek. The bike-hailing startup confirmed a major round of funding in October but did not specify how much it got from Sequoia Capital. Forbes pegged it at a rumored US$200 million. Via techinasia.com
Philippine startup community gains more ground in 2015
All interviewees were one in sharing that year 2015 has been a great year for the Philippine Startup ecosystem. They are DOST-ICTO deputy executive director Monchito Ibrahim, Kickstart president Minette Navarette, IdeaSpace executive director Diane Eustaquio, Spring.ph secretary director Arup Maity, and Impact Hub co-founder LizAn Kuster.
“Other than the growth in numbers and activity and interest around startups in the country, 2015 would be known for seeing some of the sizeable investments, listing perhaps if we can count Xurpas, buyouts and a good number starting to become ‘real’ business beyond startups,” Maity said. Ibrahim said one of the significant achievements in the community was the launching last August of the country’s first ever Philippine Roadmap for Digital Startups, an outcome of the collaboration between the government and startup players intended to boost the startup ecosystem.
“We intend to have at least 50 Philippine startups each with minimum annual revenue of P10 million. DOST-ICTO provided funding for the development of the Philippine Roadmap for Digital Startups. The roadmap defines the role of the startup community players, academe, government, and funders,” Ibrahim said. “Foreign funders are beginning to support local startups. The Philippines has just been named by the The Entrepreneur magazine as one of the Top 3 emerging startup hubs in the world. The other three countries are Vietnam and Morocco.” Via dealstreetasia.com
Breaking: VC to pump $10m into South African, African startups Ventureburn
Cape Town-based venture capital firm Silvertree Internet Holdings has announced a US$10-million investment destined for South African and African startups in 2016. The pan-African tech investment firm and incubator seemed to have had good year in 2015, claiming that it recorded 330% growth per annum revenue for its startups. The firm has invested in startups like Faithful to Nature, Click n Compare, WineCo and more recently We Are Monsters and PriceCheck.
Silvertree together with entrepreneur Kevin Tucker acquired the popular price-comparison website, PriceCheck, from global media giant Naspers for an undisclosed sum last year. The VC has previously claimed that its portfolio enjoyed month-on-month revenue growth of over 10%, and even as much as 40% monthly for some ventures. Breaking: VC to pump $10m into South African, African startups Ventureburn
VC funding looks positive for 2016
Consensus is that VC funding will remain active in many markets and industry segments in 2016 but probably not at 2015 high levels. The US, India, UK and pockets of SE Asia look most promising while China and South America appear less attractive.