Grab confirms $1.46B investment from SoftBank’s Vision Fund

Grab has become the newest addition to the SoftBank Vision Fund after it announced today that it has pulled in a $1.46 billion investment from the super fund. Grab said the new money will be used to further its super app strategy, which is aimed at making its service a daily app for Southeast Asian consumers, but it is also likely to be used to battle rival Go-Jek.

The deal — which was first reported by TechCrunch in December — takes Grab’s ongoing Series H round to $4.5 billion. Other investors in that round include Toyota, Booking Holdings, Microsoft and Hyundai. The new deal means Grab has now raised over $7.5 billion to date. Grab was last valued at $11 billion when it secured a $1 billion investment from Toyota to kick off this Series H in June, but that valuation is likely to have increased significantly since then.

Despite this huge injection, Grab confirmed that the round — a record for a Southeast Asian startup — is not closed yet. TechCrunch reported in December that the Series H funding goal, which was originally $2 billion, had been raised to $5 billion.

The Vision Fund deal has been months in the making. SoftBank is an existing investor in Grab and, as had already happened with Coupang and Tokopedia, it is transitioning its stake into the Vision Fund while dropping in additional investment capital as well.

“We have been working alongside Grab for a number of years and are privileged to support the evolution of its user-driven technologies. This investment will help the company explore exciting new opportunities across on-demand mobility, delivery and financial services as it continues to grow its offline-to-online platform across Southeast Asia,” said SoftBank’s David Thevenon in a statement.

Beyond ride-hailing, Grab also operates payments and food delivery businesses. Last year, it began working with third-party partners to bring additional services into the Grab, some of those partners include streaming service Hooq, Ping An Good Doctor and grocery delivery company HappyFresh.

Grab’s news today comes just a day after Go-Jek announced a $100 million injection into its ongoing Series H fund, which sources have told TechCrunch is aimed at raising $2 billion. The company, which is expanding in Southeast Asia, said it closed $1 billion from existing investors in January.

Go-Jek originated in Indonesia but, over the past six months, it has expanded into Vietnam, Thailand and Singapore with the Philippines also in its plans.

500 Startups Japan becomes Coral Capital with a new $45M fund

The 500 Startups Japan crew is going independent. The VC firm announced a $30 million fund in 2015, and now the follow up is a new $45 million fund called Coral Capital.

Helmed by James Riney and Yohei Sawayama, just like 500 Startups Japan, Coral will essentially continue the work the U.S. firm made in Japan, where it made more than 40 investments including Kakehashi, satellite startup Infostellar, SmartHR and Pocket Concierge, which was acquired by American Express.

“Coral provides a foundational role within the marine ecosystem, it’s symbolic about how we want to be in the Japanese startup ecosystem,” Riney told TechCrunch in an interview.

LPs in the fund include 500 Startups backers Mizuho Bank, Mitsubishi Estate, and Taizo Son — the brother of SoftBank CEO Masayoshi Son and founder of Mistletoe — and Shinsei Bank as well as other undisclosed institutional investors, who Riney said account for nearly half of the LPs. Riney said the fund was closed within two and a half months of fundraising and Coral had to turn some prospective investors away due to the overall interest shown.

Riney said that the scandals around 500 Startups — founding partner Dave McClure resigned in 2017 after admitting he’d been a “creep” around women — “wasn’t really a strong consideration” for starting Coral.

“It’s something we’d been wanting to do for a while,” he explained.

Coral Capital founding partners James Riney and Yohei Sawayama previously led 500 Startups Japan

Riney explained that Coral won’t mix in with 500 Startups Japan investments, and the team will continue to manage that portfolio whilst also running the fund.

Thesis-wise, the plan is to continue on from 500 Startups Japan, that means going after early stage deals across the board. Riney said that over the last four years, he’s seen more founders leave stable jobs and start companies which bodes well for Japan’s startup ecosystem.

“Now you’re seeing people more into their careers who see entrepreneurism as a way to fundamentally change their industry,” he said in an interview. “That bucks the trend of risk aversion in Japan which is commonly the perception.”

He sees the arrival of Coral as an opportunity to continue to push startup culture in Japan, a country well known for massive corporations and company jobs with an absence of early stage capital options for founders.

“There’s a lot of work we can do and the impact we can make in Japan is much higher than in somewhere like Silicon Valley,” Riney said.

“Pretty much every corporate has a startup program, but few of them are strong leads within seed or early stage deals, they tend to feel more comfortable in later stage investments. There have been investors investing on behalf of corporations who got the courage to spin out and go alone… but it is still much much fewer than other countries,” he added.

AirAsia launches a $60M fund to help startups get into Southeast Asia

Budget airline AirAsia is getting into the VC game after it unveiled a venture capital fund that aims to invest in startups across the world.

The airline today announced Redbeat Capital, a $60 million fund that it says will operate independently and seek deals with startups worldwide in areas such as travel, lifestyle, fintech and logistics startups worldwide. The big selling point to prospective companies is the opportunity to tap into AirAsia’s business in Southeast Asia, which claims to cater to 90 million flyers each year.

The fund is targeting a $60 million close, although AirAsia didn’t reveal how much it has secured so far. It will be run out San Francisco and Southeast Asia, and it is working with 500 Startups to source deal flow and exchange ideas.

AirAsia has suffered a stock tumble on financial concerns but is still valued at over $2 billion. Redbeat Capital is part of an ambitious strategy to widen AirAsia’s focus and take it beyond simply being an airline, according to group CEO Tony Fernandes.

“I’m determined to change AirAsia from just moving people into something different in five years time. This is a serious step in the whole transformation piece [that’s] no different to when I set up the airline,” Fernandes told TechCrunch in an interview. ”

“Our first transformation was being a low-cost carrier that uses the web, so our culture has always been in tech,” he added.” We’re now going for our second sage with our platforms” — those include its BigPay payment service, BigLife app and logistics business.

But a corporate fund this isn’t, at least according to Fernandes.

Redbeat Capital has raised its money from LPs — though it declined to provide details on them — and Fernandes said it will balance both making investments for financial return and boosting AirAsia, too. The company already has a corporate vehicle — Redbeat Ventures — but that will switch to being an incubator and company-aligned investment vehicle, while its portfolio will transition to Redbeat Capital, Fernandes said.

“We wanted to give it a bit more independence, as opposed to just being an arm of AirAsia… it’s to be seen whether we can execute,” he added.

In terms of deals, Fernandes was fairly coy about precise details other than that it is “post-seed.” He said the fund could write checks as high as $5 million or around $1 million as needed.

Tony Fernandes has set a goal of five years for broadening AirAsia’s business beyond air travel (Photo: Paul Miller/Bloomberg)

Silicon Valley is a tough market to break into for any first-time investor, and AirAsia doesn’t oeprate in the U.S. and is relatively unknown in California. But the AirAsia chief believes Redbeat Capital can offer a unique gateway into Southeast Asia, which he believes is frequently overlooked in favor of India or China.

“Competing in India and China is expensive but Southeast Asia is just starting,” he said. “We are looking for companies that want to be strategic with us and use our database and platforms for mutual benefit.”

By that, he explained that AirAsia can use its platform and customer base to help companies acquire users and do marketing, typically two of the largest expenses, in the region.

There’s plenty of optimism around Southeast Asia — a recent report co-authored by Google forecast that the region’s digital economy will triple to reach $240 billion by 2025.

That’s echoed by 500, which operates funds in Southeast Asia and is currently raising a new global fund.

“[Southeast Asia] has more internet users than the U.S, which presents a huge opportunity for entrepreneurs. To have an industry titan like AirAsia building a bridge with Silicon Valley through its partnership with 500 is exciting for our startups, many of which have ambitions for global scale,” added Christine Tsai, CEO of 500 Startups, in a statement.

Still, it remains to be seen if Redbeat Capital can balance the very different demands of corporate investing with financial-driven deals. Large company funds tend to have less focus on financial, with ROI typically focused on encouraging ‘innovation’ within the parent company or enabling deals to help the bottom line. Profession funds, of course, exist to return the fund and more to their LPs.

Still, Fernandes — whose diverse business interests have included music, British soccer and formula — is characteristically up for the challenge. He won’t directly be involved, though. The venture will be led by Aireen Omar — deputy group CEO who leads AirAsia’s digital strategy — but her boss is looking on eagerly.

“This is unconventional but the early fruits are encouraging,” Fernandes said.

Go-Jek pulls in $100M more for its massive Series F round

U.S. ride-hailing giants Lyft and Uber are going public in the U.S. imminently, but over in Southeast Asia, the two largest on-demand companies are still madly fueling up on investment capital.

The latest update to that story today saw Go-Jek, the Indonesian ride-hailing firm aiming to go regional in Southeast Asia, announced that it has pulled in $100 million from conglomerate Astra, an existing investor, as part of the Series F round it is raising right now. We know Go-Jek is aiming to bring in at least $2 billion from that round — and that it has closed around half of that capital — so the addition from Astra is likely one of many that will take it towards that target.

There’s also a strategic component to this deal.

Astra, for those who are not aware of it, is a $20 billion conglomerate that specializes in manufacturing, automotive and infrastructure industries. It plans to start a joint venture with Go-Jek to equip its cars with Astra’s fleet management system to help improve the way Go-Jek manages its fleet and on-demand services. The rollout will start with “thousands” of Go-Car drivers.

The capital is being raised to expand Go-Jek’s services in Southeast Asia.

The company recently went official with the launch of its Thailand-based Get business. It has also expanded to Vietnam and Singapore over the last year and it is primed to offer its services in the Philippines soon.

Grab, meanwhile, Go-Jek’s key adversary, recently raised $2 billion for its recent Series H round. The company is working to extend that figure to $5 billion with a planned investment of up to $1.5 billion from SoftBank’s Vision Fund in the offing.

Revolut CFO resigns following money laundering controversy

This hasn’t been a good week for challenger bank Revolut . The company, which offers digital banking services and is valued at $1.7 billion, confirmed today that embattled CFO Peter O’Higgins has resigned and left the business.

The startup and O’Higgins have been under pressure after a Daily Telegraph report that revealed that Revolt switched off an anti-money laundering system that flags suspect transactions because it was prone to throwing out false positives.

According to the Telegraph, the system was inactive between July-September 2018, which potentially allowed illegal transactions to pass across the banking platform. Revolut did not contact the Financial Conduct Authority to inform the regulator of the lapse, Telegraph reporter James Cook said.

O’Higgins, who joined the company from JP Morgan three years ago, made no mention of the saga in his resignation statement:

Having been at Revolut for almost three years, I am immensely proud to have taken the company from £1m revenue to £50m revenue during this time. However, as Revolut begins to scale globally and applies to become a bank in multiple jurisdictions, the time has come to pass the reigns over to someone who has global retail banking experience at this level. My time at Revolut has been invaluable and I’m so proud of what myself and the team have achieved. There is no doubt in my mind that Revolut will go on to build one of the largest and most trusted financial institutions in the world.

In a separate statement received by TechCrunch, Revolut CEO Nik Storonsky said that O’Higgins had been “absolutely pivotal to our success.”

The resignation caps a terrible few days for Revolut, which was the subject of a report from Wired earlier this week that delved into allegations around its challenging workplace culture and high employee churn rate.

“Former Revolut employees say this high-speed growth has come at a high human cost – with unpaid work, unachievable targets, and high-staff turnover,” wrote guest reporter Emiliano Mellino, citing the experiences of numerous former employees.

Those incidents included prospective staff being told to canvass for new customers as part of the interview process. The candidates were not compensated for their efforts, according to Wired. Revolut later removed the demands from its hiring processes.

Revolut is headquartered in the UK, where it launched its service in the summer of 2015. Today, it claims over four million registered users across Europe — it is available in EEA countries — although it plans to extend its presence to other parts of the world are taking longer than expected.

The company said last year it aims to launch in Singapore and Japan in Q1 of this year — so far neither has happened — while it also harbors North American market plans. Entries to the U.S. and Canada were supposed to happen by the end of 2018, according to an interview with Storonsky at TechCrunch Disrupt in September, but they also appear to have been delayed.

Revolut is generally considered to be the largest challenger bank in Europe, in terms of valuation and registered users, but other rivals include N26, Monzo and Starling. Even Transferwise, the global remittance service, now includes border-less banking features and an accompanying debit card.

India’s Ola spins out a dedicated EV business — and it just raised $56M from investors

Ola, Uber’s key rival in India, is doubling down on electric vehicles after it span out a dedicated business, which has pulled in $56 million in early funding.

The unit is named Ola Electric Mobility and it is described as being an independent business that’s backed by Ola. TechCrunch understands Ola provided founding capital, and it has now been joined by a series of investors who have pumped Rs. 400 crore ($56 million) into Ola Electric. Notably, those backers include Tiger Global and Matrix India — two firms that were early investors in Ola itself.

While automotive companies and ride-hailing services in the U.S. are focused on bringing autonomous vehicles to the streets, India — like other parts of Asia — is more challenging thanks to diverse geographies, more sparse mapping and other factors. In India, companies have instead flocked to electric. The government had previously voiced its intention to make 30 percent of vehicles electric by 2030, but it has not formally introduced a policy to guide that initiative.

Ola has taken steps to electrify its fleet — it pledged last year to add 10,000 electric rickshaws to its fleet and has conducted other pilots with the goal of offering one million EVs by 2022 — but the challenge is such that it has spun out Ola Electric to go deeper into EVs.

That means that Ola Electric won’t just be concerned with vehicles, it has a far wider remit.

The new company has pledged to focus on areas that include charging solutions, EV batteries, and developing viable infrastructure that allows commercial EVs to operate at scale, according to an announcement. In other words, the challenge of developing electric vehicles goes beyond being a ‘ride-hailing problem’ and that is why Ola Electric has been formed and is being capitalized independently of Ola.

An electric rickshaw from Ola

Its leadership is also wholly separate.

Ola Electric is led by Ola executives Anand Shah and Ankit Jain — who led Ola’s connected car platform strategy — and the team includes former executives from carmakers such as BMW.

Already, it said it has partnered with “several” OEMs and battery makers and it “intends to work closely with the automotive industry to create seamless solutions for electric vehicle operations.” Indeed, that connected car play — Ola Play — likely already gives it warm leads to chase.

“At Ola Electric, our mission is to enable sustainable mobility for everyone. India can leapfrog problems of pollution and energy security by moving to electric mobility, create millions of new jobs and economic opportunity, and lead the world,” Ola CEO and co-founder Bhavish Aggarwal said in a statement.

“The first problem to solve in electric mobility is charging: users need a dependable, convenient, and affordable replacement for the petrol pump. By making electric easy for commercial vehicles that deliver a disproportionate share of kilometers traveled, we can jumpstart the electric vehicle revolution,” added Anand Shah, whose job title is listed as head of Ola Electric Mobility.

The new business spinout comes as Ola continues to raise new capital from investors.

Last month, Flipkart co-founder Sachin Bansal invested $92 million into the ongoing Series J round that is likely to exceed $1 billion and would value Ola at around $6 billion. Existing backer Steadview Capital earlier committed $75 million but there’s plenty more in development.

A filing — first noted by paper.vc — shows that India’s Competition Commission approved a request for a Temasek-affiliated investment vehicle’s proposed acquisition of seven percent of Ola. In addition, SoftBank offered a term sheet for a prospective $1 billion investment last month, TechCrunch understands from an industry source.

Ola is backed by the likes of SoftBank, Tencent, Sequoia India, Matrix, DST Global and Didi Chuxing. It has raised some $3.5 billion to date, according to data from Crunchbase.

JD.com shares take off despite slowing revenue growth

Shares of JD.com, the Chinese e-commerce service that rivals Alibaba, are on the rise today after the online retailer announced better than expected results for Q4 2018, bucking uncertainty around tech companies in China.

The company reported net revenue of RMB 134.8 billion ($219.6 billion) for the final quarter of last year. Despite representing the slowest growth rate year-on-year since JD went public five years ago (22.3 percent), the figure beat analyst predictions of $19.149 billion. JD.com also beat on earnings per share.

That combination saw its Nasdaq share price rise by as much as 14 percent in pre-market trading, Reuters reports. The stock is up around five percent at the time of writing, according to Yahoo Finance data.

JD.com went public on the Nasdaq in 2014

Chinese startups are weathering challenging economics in the country. Apple recently cut its quarterly revenue forecast on account of China’s slowdown, while domestic Chinese tech companies have gone further and cut costs.

Some of those include Didi laying off 15 percent of its staff and NetEase making reductions across multiple units, while JD.com itself is reportedly parting with 10 percent of its management team as part of downsizing.

JD.com’s revenue growth reached an all-time low as a public company in Q4 2018

Against that backdrop, beating expectations was enough to trigger investor interest despite the slowing growth of JD.com’s business. The final quarter of the year is typically its most lucrative in terms of revenue, thanks to the Singles’ Day shopping festival. That said, the company carded an overall quarterly net loss of RMB 4.8 billion, or $700 million, in Q4.

JD.com’s annual performance saw revenue rise 27.5 percent in 2018 to reach RMB 462.0 billion ($67.2 billion) with a loss of RMB 2.5 billion, $400 million. In 2017, the business eeked out a net income of RMB 116.8 million, which converted to $18 million at the time.

On the technology side, JD.com has invested heavily in drones, unmanned delivery and automated warehouses with a preference to play the ‘long-game’ on cutting-edge tech over making short-term investment spurts.

However, it has been plagued by scandal after CEO Richard Liu was arrested in the U.S. on suspicion of alleged sexual misconduct. Ultimately, Liu was not charged after authorities admitted that it was not possible to prove beyond a reasonable doubt the charges brought against him.

Vision Fund startups Fanatics and Coupang unite to sell US sports merch in Korea

SoftBank chairman Masayoshi Son has repeatedly described the Vision Fund as a club for the world’s most exciting startups and, while even the fund’s own LP seem to disagree with some of its investment thesis, its portfolio companies do frequently come together.

The latest Vision Fund partnership pairs two e-commerce firms in opposite corners of the world: U.S-based sports specialist Fanatics and Coupang, Korea’s largest e-commerce firm.

Fanatics got its Vision Fund spurs through a $1 billion deal led by SoftBank in 2017, while Coupang, was a more recent joiner via a $2 billion deal in November although SoftBank itself has been an investor for some time.

The two companies are teaming up to sell U.S. sportswear and merchandise to consumers in Korea via a 10-year deal that will kick off this summer. The Fanatics range covers NFL jerseys, NBA T-shirts, items from Nike and others. The agreement will see Fanatics become the exclusive provider of sports merchandise for Coupang in Korea, which is the world’s fifth largest e-commerce market and project to grow further still.

Coupang claims that one in every two adults in Korea has its app on their phone. The nine-year-old company’s CEO, Bom Kim, told TechCrunch last year that the business is “approaching” $5 billion in revenue for 2018 with 70 percent annual growth.

That’s an ideal partner for Fanatics, which is going after a strategy of working with vertical e-commerce companies in a bid to expand its reach and distribution beyond its own network.

The company’s first deal was with Walmart in the U.S. last month, a move that pits it against Amazon, and now it is getting started on Asia, as Fanatics executive chairman Michael Rubin — pictured in the top image — told TechCrunch in a statement:

Marketplaces represent an important channel for e-commerce, especially internationally, and leagues and clubs want their official licensed products available to fans everywhere in the world. Our global marketplace strategy is a way to do just that by offering access to our industry-leading and exclusive inventory, but in a disciplined way that eliminates counterfeits and offers an improved brand presentation that benefits all parties. This is our second marketplace deal and we expect many more in the future.

Beyond this partnership, Fanatics global operations span a distribution center in Hong Kong, a tech team in India and a European HQ in Manchester with additional offices in Spain and Germany. The Vision Fund aside, its investors include Silver Lake, Alibaba, Temasek, A16z and Insight Venture Partners.

Note: The original version of this story was edited to reflect that Fanatics is the exclusive provider of all licensed sports merchandise on Coupang, and to correct Fanatics’ European offices.

Thailand passes controversial cybersecurity law that could enable government surveillance

Thailand’s government passed a controversial cybersecurity bill today that has been criticized for vagueness and the potential to enable sweeping access internet user data.

The bill (available in Thai) was amended late last year following criticism over potential data access, but it passed the country’s parliament with 133 positives votes and no rejections although there were 16 absentees.

There are concerns around a number of clauses, chiefly the potential for the government — which came to power via a military coup in 2014 — to search and seize data and equipment in cases that are deemed issues of national emergency. That could enable internet traffic monitoring and access to private data, including communications, without a court order.

The balance of power beyond enforcement has also been questioned. Critics have highlighted the role of the National Cybersecurity Committee, which is headed by the Prime Minister and holds considerable weight in carrying out the law. The Committee has been called upon to include representation from the industry and civic groups to give it greater oversight and balance.

Added together, there’s a fear that the law could be weaponized by the government to silence critics. Thailand already has powerful lese majeste laws, which make it illegal to criticize the monarchy and have been used to jail citizens for comments left on social media and websites. The country has also censored websites in the past, including the Daily Mail and, for a nearly six-month period in 2007, YouTube.

“The Asia Internet Coalition is deeply disappointed that Thailand’s National Assembly has voted in favor of a Cybersecurity Law that overemphasizes a loosely-defined national security agenda, instead of its intended objective of guarding against cyber risks,” read a statement from Jeff Paine, managing director of Asia Internet Coalition — an alliance of international tech firms that include Facebook, Google and Apple.

“Protecting online security is a top priority, however the Law’s ambiguously defined scope, vague language and lack of safeguards raises serious privacy concerns for both individuals and businesses, especially provisions that allow overreaching authority to search and seize data and electronic equipment without proper legal oversight. This would give the regime sweeping powers to monitor online traffic in the name of an emergency or as a preventive measure, potentially compromising private and corporate data,” Paine added.

Reaction to the law has seen a hashtag (#พรบไซเบอร์) trend on Twitter in Thailand, while other groups have spoken out on the potential implications.

Thailand isn’t alone in introducing controversial internet laws. New regulations, passed last summer, came into force in near-neighbor Vietnam on January 1 and sparked similar concerns around free speech online.

That Vietnamese law broadly forbids internet users from organizing with, or training, others for anti-state purposes, spreading false information, and undermining the nation state’s achievements or solidarity. It also requires foreign internet companies to operate a local office and store user information on Vietnamese soil. That’s something neither Google nor Facebook has complied with, despite the Vietnamese government’s recent claim that the former is investigating a local office launch.

Fortnite Season 8 is now available, and it includes pirates, cannons and volcano lava

Fortnite, the world’s most popular game right now with some 200 million players, has just announced that its much anticipated Season 8 is available.

For those of you who don’t play Fortnite, the title takes on an episodic approach with new features, tools and maps released every few months. That keeps things fresh, gamers engaged and the money flowing since each new season offers a Battle Pass which costs around $10 and unlocks a load of goodies, including skins and emote dance moves.

Season 8 is pretty much what the leaks this week suggested. The theme is pirates with new skins that include a gigantic banana suit, pirates and snakes, and pirate cannon is a new weapon that’s been added. Cannons can dish out 100 damage when there’s a direct hit, or administer 50 damage of those in the impact area — it can also be used to fire players to new locations.

The map is also a major Fortnite focus, and Season 8 has added lava to the existing volcano. Stepping on lava gives layers 1 damage point per touch while there are volcanic vents that can be used to send a player or vehicle into the air using a gust of hot air.

On the gaming playing side, the major addition is ‘Party Assist’ mode which lets players bring their friends into Fortnite’s daily or weekly challenges. Those challenges are important to players since they unlock treasures, including skins, and, in fact, those who played Season 7 could earn a free Battle Pass for Season 8 by completing the right challenges. That might have saved a few million parents $10.

Those are the main additions, though game-maker Epic Games has chucked in a few little touches — including extending the somewhat comical ‘infinite dab’ feature from 11 hours to 12, meaning that your character will keep dancing a little longer when left in the lobby.

I can’t help but think Season 7 was a greater leap — since the addition of planes and ziplines really changed how players get around — but we’ll have to see how the gaming public reacts. This time around, a lot of the focus is on skins and emotes, rather than features.

A recent report suggested Fortnite’s revenue had dipped in January, but that was pretty unfair because its the month that followed a surge in spending around the December Battle Pass and also, more generally, a surge around the Christmas holidays.

Sources told us recently Epic Games banked $3 billion in profit across its entire business in 2018, thanks in particular to Fortnite, and it needs to keep its season releases compelling if that streak is to continue. There’s a lot riding on Season 8.