Startups Weekly: There’s an alternative to raising VC and it’s called revenue-based financing

Revenue-based financing is on the rise, at least according to Lighter Capital, a firm that doles out entrepreneur-friendly debt capital.

What exactly is RBF you ask? It’s a relatively new form of funding for tech companies that are posting monthly recurring revenue. Here’s how Lighter Capital, which completed 500 RBF deals in 2018, explains it: “It’s an alternative funding model that mixes some aspects of debt and equity. Most RBF is technically structured as a loan. However, RBF investors’ returns are tied directly to the startup’s performance, which is more like equity.”

Source: Lighter Capital

What’s the appeal? As I said, RBFs are essentially dressed up debt rounds. Founders who opt for RBFs as opposed to venture capital deals hold on to all their equity and they don’t get stuck on the VC hamster wheel, the process in which you are forced to continually accept VC while losing more and more equity as a means of pleasing your investors.

RBFs, however, are better than traditional debt rounds because the investors are more incentivized to help the companies they invest in because they are receiving a certain portion of that business’s monthly revenues, typically 1% to 9%. Eventually, as is explained thoroughly in Lighter Capital’s newest RBF report, monthly payments come to an end, usually 1.3 to 2.5X the amount of the original financing, a multiple referred to as the “cap.” Three to five years down the line, any unpaid amount of said cap is due back to the investor. When all is said in done, ideally, the startup has grown with the support of the capital and hasn’t lost any equity.

At this point, they could opt to raise additional revenue-based capital, they could turn to venture capital or they could tap a tech bank to help them get to the next step. The idea is RBF is easier on the founder and it allows them optionality, something that is often lost when companies turn to VCs.

IPO corner, rapid-fire edition

Slack’s direct listing will be on June 20th. Get excited.

China’s Luckin Coffee raised $650 million in upsized U.S. IPO

Crowdstrike, a cybersecurity unicorn, dropped its S-1.

Freelance marketplace Fiverr has filed to go public on the NYSE.

Plus, I had a long and comprehensive conversation with Zoom CEO Eric Yuan this week about the company’s closely watched IPO. You can read the full transcript here.

Second Chances

Silicon Valley entrepreneur Hosain Rahman, the man behind Jawbone, has managed to raise $65.4 million for his new company, according to an SEC filing. The paperwork, coincidentally or otherwise, was processed while most of the world’s attention was focused on Uber’s IPO. Jawbone, if you remember, produced wireless speakers and Bluetooth earpieces, and went kaput in 2017 after burning up $1 billion in venture funding over the course of 10 years. Ouch.

More startup capital

Funds!

On the heels of enterprise startup UiPath raising at a $7 billion valuation, the startup’s biggest investor is announcing a new fund to double down on making more investments in Europe. VC firm Accel has closed a $575 million fund — money that it plans to use to back startups in Europe and Israel, investing primarily at the Series A stage in a range of between $5 million and $15 million, reports TechCrunch’s Ingrid Lunden. Plus, take a closer look at Contrary Capital. Part accelerator, part VC fund, Contrary writes small checks to student entrepreneurs and recent college dropouts.

Extra Crunch

Our paying subscribers are in for a treat this week. Our in-house venture capital expert Danny Crichton wrote down some thoughts on Uber and Lyft’s investment bankers. Here’s a snippet: “Startup CEOs heading to the public markets have a love/hate relationship with their investment bankers. On one hand, they are helpful in introducing a company to a wide range of asset managers who will hopefully hold their company’s stock for the long term, reducing price volatility and by extension, employee churn. On the other hand, they are flagrantly expensive, costing millions of dollars in underwriting fees and related expenses…”

Read the full story here and sign up for Extra Crunch here.

#Equitypod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about the notable venture rounds of the week, CrowdStrike’s IPO and more of this week’s headlines.

Want more TechCrunch newsletters? Sign up here.

Part fund, part accelerator, Contrary Capital invests in student entrepreneurs

First Round Capital has both the Dorm Room Fund and the Graduate Fund. General Catalyst has Rough Draft Ventures. And Prototype Capital and a few other micro-funds focus on investing in student founders, but overall, there’s a shortage of capital set aside for entrepreneurs still making their way through school.

Contrary Capital, a soon-to-be San Francisco-based operation led by Eric Tarczynski, is raising $35 million to invest between $50,000 and $200,000 in students and recent college dropouts. The firm, which operates a summer accelerator program for its portfolio companies, closed on $2.2 million for its debut, proof-of-concept fund in 2018.

“We really care about the founders building a great company who don’t have the proverbial rich uncle,” Tarczynski, a former founder and startup employee, told TechCrunch. “We thought, ‘What if there was a fund that could democratize access to both world-class capital and mentorship, and really increase the probability of success for bright university-based founders wherever they are?’ “

Contrary launched in 2016 with backing from Tesla co-founder Martin Eberhard, Reddit co-founder Steve Huffman, SoFi co-founder Dan Macklin, Twitch co-founder Emmett Shear, founding Facebook engineer Jeff Rothschild and MuleSoft founder Ross Mason. The firm has more than 100 “venture partners,” or entrepreneurial students at dozens of college campuses that help fill Contrary’s pipeline of deals.

Contrary Capital celebrating its Demo Day event last year

Last year, Contrary kicked off its summer accelerator, tapping 10 university-started companies to complete a Y Combinator -style program that culminates with a small, GP-only demo day. Admittedly, the roughly $100,000 investment Contrary deploys to its companies wouldn’t get your average Silicon Valley startup very far, but for students based in college towns across the U.S., it’s a game-changing deal.

“It gives you a tremendous amount of time to figure things out,” Tarczynski said, noting his own experience building a company while still in school. “We are trying to push them. This is the first time in many cases that these people are working on their companies full-time. This is the first time they are going all in.”

Contrary invests a good amount of its capital in Berkeley, Stanford, Harvard and MIT students, but has made a concerted effort to provide capital to students at underrepresented universities, too. To date, the team has completed three investments in teams out of Stanford, two out of MIT, two out of University of California San Diego and one each at Berekely, BYU, University of Texas-Austin, University of Pennsylvania, Columbia University and University of California Santa Cruz.

“We wanted to have more come from the 40 to 50 schools across the U.S. that have comparable if not better tech curriculums but are underserviced,” Tarczynski explained. “The only difference between Stanford and these others universities is just the volume. The caliber is just as high.”

Contrary’s portfolio includes Memora Health, the provider of productivity software for clinics; Arc, which is building metal 3D-printing technologies to deliver rocket engines; and Deal Engine, a platform for facilitating corporate travel.

“We are one giant talent scout with all these different nodes across the country,” Tarczynski added. “I’ve spent every waking moment of my life the last eight years living and breathing university entrepreneurship … it’s pretty clear to me who is an exceptional university-based founder and who is just caught up in the hype.”

GetYourGuide picks up $484M, passes 25M tickets sold through its tourism activity app

As we swing into the summer tourist season, a company poised to capitalise on that has raised a huge round of funding. GetYourGuide — a Berlin startup that has built a popular marketplace for people to discover and book sightseeing tours, tickets for attractions and other experiences around the world — is today announcing that it has picked up $484 million, a Series E round of funding that will catapult its valuation above the $1 billion mark.

The funding is a milestone for a couple of reasons. GetYourGuide says it is the highest-ever round of funding for a company in the area of “travel experiences” (tours and other activities) — a market estimated to be worth $150 billion this year and rising to $183 billion in 2020. And this Series E is also one of the biggest-ever growth rounds for any European startup, period.

The company has now sold 25 million tickets for tours, attractions and other experiences with a current catalog of some 50,000 experiences on offer. That’s a sign of strong growth: in 2017 it sold 10 million tickets, and its last reported catalog number was 35,000. It will be using the funding to build more of its own “Originals” tour experiences — which have now passed the 40,000 tickets sold mark — as well as to build up more activities in Asia and the US, two fast-growing markets for the startup.

The funding is being led by Softbank, via its Vision Fund, with Temasek, Lakestar, Heartcore Capital (formerly Sunstone Capital), and Swisscanto Invest among others also participating. (Swisscanto is part of Zürcher Kantonalbank: GetYourGuide was originally founded in Zurich, where the founders had studied, and it still runs some R&D operations there.) The company has now raised well over $600 million.

It’s notable how Softbank — which is on the hunt for interesting opportunities to invest its $100 billion superfund — has been stepping up a gear in Germany to tap into some of bigger tech players that have emerged out of that market, which today is the biggest in Europe. Other big plays have included €460 million into Auto1 and €900 million into payments provider Wirecard. Other companies it has backed, such as hotel company Oyo out of India, is using its funding to break into Europe (and buy German companies in the process).

There had been reports over the last several months that GetYouGuide was in the process of raising anywhere between $300 million and more than $500 million. In late April, we were told by sources that the round hadn’t yet closed, and that numbers published in the media up to then had been inaccurate, even as we nailed down that Softbank was indeed involved in the round.

The valuation in this round is not being disclosed, but CEO Johannes Reck (who co-founded the app with Martin Sieber, Pascal Mathis, Tobias Rein and Tao Tao) said in an interview with TechCrunch that it was definitely “now a unicorn” — meaning that its valuation had passed the $1 billion mark. For additional context, the rumor last month was that GetYourGuide’s valuation is now up to €1.6 billion ($1.78 billion) but I have not been able to get firm confirmation of that number.

From hip replacements to hipsters

GetYourGuide’s growth — and investor interesting in it — has closely followed the rise of new platforms like Airbnb that have changed the face of how we travel, and what we do when we get somewhere. We have moved far beyond the days of visiting a travel agent that books everything, from flight to hotel to all your activities, as you sit on the other side of a desk from her or him. Now with the tap of a finger or the click of a mouse, we have thousands of choices.

Within that, GetYourGuide thinks that it has jumped on an interesting opportunity to rethink the activity aspect of tourism. Tour packages and other highly organized travel experiences are often associated with older people, or those with families — essentially people who need more predictability when they are not at home.

Reck noted that the earliest users of GetYourGuide in 2010 were precisely those people — or at least those who were more inclined to use digital platforms to begin with: the demographic, he said, was 40-50 year olds, most likely travelling with family.

That is one thing that has really started to change, in no small part because of GetYourGuide itself. Making the experience of booking experiences mobile-friendly, GetYourGuide has played into the culture of doing and showing that has propelled the rise of social media.

“They want to do things, to have something to post on Instagram,” he said. The average age of a GetYourGuide user now, he said, is 25-40.

This has even evolved into what GetYourGuide provides to users. “At some point, staff in Asia had the idea of crafting a ‘GetYourGuide Instagram Tour of Bali.’ That really took off, and now this is the number-one tour booked in the region.” It has since expanded the concept to 50 destinations.

That has also led GetYourGuide to conclude it has a ways to go to continue developing its model and scope further, expanding into longer sightseeing excursions, beyond one or two-hour tours into day trips and even overnight exeperiences.

As it continues to play around with some of these offerings, it’s also increasingly taking a more direct role in the branding and the provision of the content. Initially, all tickets and tours were posted on GetYourGuide by third parties. Now, GetYourGuide is building more of what Reck calls “Originals” — which it might develop in partnership with others but ultimately handles as its own first-party content. (That Instagram tour was one of those Originals.)

It’s notable that others are closing in on the same “experiences” model that forms the core of GetYourGuide’s business: Airbnb, to diversify how it makes revenues and to extend its touchpoints with guests beyond basic accommodation bookings, has also started to sell experiences. Meanwhile, daily deals pioneer Groupon has also positioned itself as a destination for purchasing “experiences” as a way of offset declines in other areas of its business. Similarly, travel portals that sell plane tickets regularly default to pushing more activities on you.

Reck pointed out that the area of business where GetYourGuide is active is becoming increasingly attractive to these players as other aspects of the travel industry become increasingly commoditised. Indeed, you can visit dozens of sites to compare pricing on plane tickets, and if you are flexible, pick up even more of a bargain at the last minute. And the rise of multiple Airbnb-style platforms offering private accommodation has made competition among those supplying those platforms — as well as hotels — increasingly fierce.

InnoVen Capital, one of Asia’s most prominent venture debt firms, adds $200M more to its kitty

Founders might not believe it, but managing a venture capital firm isn’t all that dissimilar to a startup. Case in point today: InnoVen Capital, one of Asia’s most prominent venture debt firms, has pulled in $200 million in new money to continue its expansion in the region.

The money comes from InnoVen’s two shareholders — Singapore sovereign fund Temasek and Singapore’s UOB — each of which has added $100 million in additional firepower for the fund, which is popularising debt-based financing within Asia’s startup ecosystems.

The organization came to be in 2015 when Temasek acquired the Indian ‘branch’ of Silicon Valley Bank expressly to offer differentiated financing to startups. The spinout was named InnoVen and it quickly expanded beyond India with the opening of an office in Singapore in 2016 and then an outpost in Beijing in early 2018.

The firm operates without a specific fund size unlike many other investors, but already there are some numbers to indicate its growing role in Asia.

That regional play is still in its early days, but already the business has deployed over $500 million in financing to more than 200 companies, according to Ashish Sharma, the former head of GE Capital India who leads InnoVen’s India business.

The fund operates at Series A and beyond and Sharma told TechCrunch that its investment levels have sped up over the past two to three years, thanks in particular to the addition of offices in Southeast Asia and China.

Recent deals from the fund have included investments in Moglix, Carsome, RedDoorz, Awfis and even a stealthy startup, Indonesia-based logistics venture Kargo which included debt within its first round of funding. Already, the Chinese arm has accrued 30 deals in a little over a year, and some of the biggest names backed across the region include Vision Fund company OYO and Naspers investments Swiggy, which recently raised $1 billion, and Byju’s.

Yet despite InnoVen’s increased profile, there remains confusion on the role of venture debt in Asia. Anecdotally, I’ve heard many misguided opinions from so-called venture capital-focused reporters — and not just in Asia — who see debt-based investment as a ‘last resort’ for companies. Its addition in a round is a tell-tell sign of a struggling business, they claim.

That’s completely wrong, according to InnoVen’s Sharma.

“It doesn’t come in from a position of weakness, that’s a big misconception,” he explained to TechCrunch in an interview. “In fact, venture debt is not available to companies which are in trouble. Most companies that raise venture debt do so from a position of strength.”

“They’ll say ‘We’re raising $100 million, let’s lay in $20 million of venture debt to optimize the dilution,'” Sharma added. “We’ve helped some very large companies use venture debt to get to the next level.”

Ashish Sharma leads InnoVen Capital’s business in India [Image via InnoVen Capital]

Ambitious growth story? Check.

A business that’s misunderstood by many? Check.

Who said running a VC firm isn’t like running a startup?

Seed investor Gree Ventures makes first close of new $130M fund — and rebrands to Strive

There’s big news for one of India and Southeast Asia’s longest-running early-stage investors after Gree Ventures, the fund attached to Japanese gaming firm Gree, announced the first close of its third fund, which is targeted at $130 million.

Gree has been a fixture in Southeast Asia since 2012, but now the firm is rebranding to Strive (or “STRIVE” to quote the press release) for the new fund. Rebrandings often seem token, but, in this case, it makes a lot of sense to stop being called Gree (“GREE”) because the company is just one LP of many.

“People often confuse us as a single LP fund,” Nikhil Kapur — who has been promoted to partner — told TechCrunch in an interview. “But we’re quite independent from Gree, plus we’re not a corporate fund and we’re not investing in gaming.”

Indeed, in this case, the fund is talking to non-Japan-based LPs for the first time over potential participation. Confirmed LPs include past backers SME Support JAPAN — which is part of the Ministry of Economy, Trade and Industry of Japan — Gree itself and members of the Mizuho Financial Group. Opening the doors to prospective LPs in Southeast Asia is about adding “more local networks in these markets,” Kapur explained.

Those details, it is very much business as usual for Strive, which is putting the focus on B2B. Kapur said that 60-70 percent of past investments have tended to be on B2B deals, but now fund three is — for the first time — almost entirely dedicated to that segment.

Southeast Asia has seen some seed investors move further down the chain — Jungle Ventures’ new fund is targeting a $230 million final close, while Golden Gate Ventures’ third fund is $150 million while it also has a ‘growth fund’ aimed at $200 million — but Strive is sticking to early stage.

As seed funds go, $130 million is a lot but there’s plenty of nuance to that figure — it won’t all go to early-stage checks.

The fund is split across India, Southeast Asia and Japan — with around half of that allocation estimated for deals outside of Japan. That leaves around $25 million for ‘first checks.’ Kapur said that the outlined goal is to find 20 startups to back, and then double down on them with that follow-on capital. Interestingly, he said that there’s no hard allocation between the three focus regions and follow-on capital is allocated freely to those companies which are performing well and ready to grow, irrespective of geography.

The Strive team

Looking more closely at India and Southeast Asia, Kapur and investment manager Ajith Isaac pointed to increased synergies between the two regions. Indeed, large Southeast Asian players like Grab and Go-Jek have tapped India’s talent pool and located their R&D centers and engineering teams in the country, while Indian startups area increasingly foraying into Southeast Asia for market expansion.

“We see these regions not remaining separate in the near future… [and] becoming very intertwined,” Kapur said, pointing out that in venture capital firms like Accel and Lightspeed and following Sequoia India and investing directly in startups in Southeast Asia.

“The region will become very much interlocked and there’s a gap in people who can bridge it… that’s where we see a differentiated value-add on our side,” he added.

Southeast Asia itself has matured immensely since the Gree fund’s early days, but Kapur and Isaac — investment manager Samir Chaibi is the third member on the non-Japan side of the fund — maintain that there’s still “a gap in terms of institutional capital on seed stage” in some verticals where angel investors are helping new ventures get off the ground with first checks and early backing. That’s where the new Strive fund is keen to make its mark.

The fund, which has traditionally been very lean in terms of personnel, will also bulk up its own numbers. Kapur said he is hiring local teams in India and Indonesia with a viewing to growing the non-Japanese headcount to six people by the end of the year.

Market map: the 200+ innovative startups transforming affordable housing

In this section of my exploration into innovation in inclusive housing, I am digging into the 200+ companies impacting the key phases of developing and managing housing.

Innovations have reduced costs in the most expensive phases of the housing development and management process. I explore innovations in each of these phases, including construction, land, regulatory, financing, and operational costs.

Reducing Construction Costs

This is one of the top three challenges developers face, exacerbated by rising building material costs and labor shortages.

India’s Locus raises $22 million to expand its logistics management business

Locus, an Indian startup that uses AI to help businesses map out their logistics, has raised $22 million in Series B funding to expand its operations in international markets.

The financing round for the four-year-old startup was led by Falcon Edge Capital and Tiger Global Management . Existing investors Exfinity Venture Partners and Blume Ventures also participated in the round. The startup has raised $29 million to date, Nishith Rastogi, co-founder and CEO of Locus, told TechCrunch in an interview.

Locus works with companies that operate in FMCG, logistics, and e-commerce spaces. Some of its clients include Tata Group companies, Myntra, BigBasket, Lenskart, and Bluedart. It helps these clients automate their logistics workload — tasks such as planning, organizing, transporting and tracking of inventories, and finding the best path to reach a destination — that have traditionally required intensive human labor.

“Say a Lenskart representative is visiting a house or an office to offer an eye checkup, and suddenly two more people there are interested in getting their eyes checked. The representative could attend these two new potential clients, or wrap things up with the first client and take care of his or her next appointment,” said Rastogi.

Locus looks at a client’s past data, identifies patterns, and automates these kind of decisions on a large scale. In an example shared earlier with TechCrunch, Rastogi talked about how Locus had built a scanner for ecommerce companies for measuring products.

Rastogi said he will use the fresh capital to develop products and expand Locus in Southeast Asian and North American markets. The startup says half of its 110 people workforce outside of India. Half of the IP it has built and the revenue it generates comes from its team outside of India.

He said the startup has spent the recent quarters studying these international markets, and has secured some anchor clients to expand the business. Locus is operationally profitable already and any additional capital goes into expanding its business, he added.

The logistics market in India has long been riddled with challenges. A growing number of startups, including BlackBuck — which raised $150 million last week — have emerged in recent years to tackle these problems.

The new funding also illustrates Tiger Global Management’s new strategy for the Indian market. The VC fund, which has invested in B2C businesses Flipkart and Ola in India, has made a number of investments in B2B startups in recent months. Last month, it invested $90 million in agri-tech supply chain startup Ninjacart, and weeks later, it gave cloud-based solutions provider Zenoti $50 million.

Chipper Cash convinces Joe Montana to invest in African fintech

The African no-fee, cross-border payment startup Chipper Cash has raised a $2.4 million seed round led by Deciens Capital.

The payments company also persuaded 500 Startups and Liquid 2 Ventures—co-founded by Joe Montana—to join the round.

Chipper Cash’s Ugandan chief executive, Ham Serunjogi, pitched the U.S. football legend directly. “He was quite excited about what we’re doing and his belief that the next wave of [tech] growth will come from…Africa,” Serunjogi told TechCrunch.

Chipper Cash went live in October 2018, joining a growing field of fintech startups aiming to scale digital finance applications across Africa’s billion plus population.

The venture Serunjogi co-founded with Ghanaian Maijid Moujaled offers no-fee, P2P, cross-border mobile-money payments in Africa.

Based in San Francisco based startup—with offices in Ghana and Nairobi—Chipper Cash has processed 250,000 transactions for over 70,000 active users, according to Serunjogi.

In conjunction with the seed round, Chipper Cash is launching Chipper Checkout: a merchant focused, C2B, mobile payments product.

This side of the startup’s offerings isn’t free, and Chipper Cash will use revenues from Chipper Checkout—in addition to income generated from payment volume float—to support its no-fee mobile money business.

Sheel Mohnot, who led 500 Startups’ investment in Chipper Cash, likened company’s model to PayPal.

“When PayPal started it was just a consumer to consumer free app. It still is free for consumer to consumer, they but they monetized the merchant side. That model is tried and tested. It just doesn’t exist in Africa, so Chipper has the opportunity to do that,” he told TechCrunch.

In addition to Kenya’s M-Pesa—the global success story for digital payments—there are a number of mobile money products in Africa, from MTN’s Mobile Money in Ghana to Tigo Pesa in Tanzania.

The limiting factor, though, according to Chipper Cash’s CEO is interoperability, or that mobile-money transfers across product platforms, currencies, and borders generally don’t work.

“Our tech settles cross-border currency transactions in real-time, and that’s part of the value proposition of the platform,” he said.

The startup will expand beyond its current four country operations in Ghana, Kenya, Rwanda, Tanzania, and Uganda within the next 12 months. Chipper Cash also plans to tap the global remittance market for Sub-Saharan Africa, a large pool of roughly $38 billion, in the near future.

Remittances won’t be the firms’ top focus, however. Serunjogi believes there’s more volume to be found within Africa. “Demographics, migration, and regional economic-integration within the continent means there’ll be an infinitely growing amount of cross-border commercial activity within Africa,” he said. “When it comes to payments, the pie is growing and…the percentage of that pie that is digital payments will also grow.”

The journey for Chipper Cash’s founders from Africa to founding a startup and pitching to Joe Montana passes through Iowa. Serunjogi and Moujaled met when doing their undergraduate degrees at Grinnell College.  Stints at Silicon Valley companies followed: Facebook for Serunjogi and Flickr, Yahoo!, and Imgur for Moujaled.

Chipper Cash was accepted in 500 Startups’ Batch 24 in 2018 and their demo day for the accelerator program gained the attention of Liquid 2 Ventures.

The VC fund’s Rocio Wu invited them to pitch to Joe Montana and the team in March 2019.

“Africa is extremely fragmented with different languages, cultures and currencies, Chipper Cash is uniquely positioned to tackle cross-border mobile payments with interoperability,” Wu told TechCrunch on the investment.

Wu will join Chipper Cash as a board observer. The startup is the second Africa investment for the fund. Liquid 2 Ventures is also an investor in logistics startup Lori Systems, the 2017 Startup Battlefield Africa winner.

Startups building financial technologies for Africa’s 1.2 billion population are gaining greater attention of investors. As a sector, fintech (or financial inclusion) attracted 50 percent of the estimated $1.1 billion funding to African startups in 2018, according to Partech.

By a number of estimates, the continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population. An improving smartphone and mobile-connectivity profile for Africa (see GSMA) turns this scenario into an opportunity for mobile based financial products.

As more startups enter African fintech, Chipper Cash believes it can compete on its cross-currency and no-fee offerings and the growing size of the market. “It’s so large that it is unlikely to be a zero-sum game in terms of who wins. There will be multiple successful players,” said Serunjogi

Chipper Cash also joins a list of African founded, Africa focused fintech firms that have chosen to set up HQs in San Francisco with offices and operations on the continent. Payments gateway company Flutterwave and lending venture Mines.io (both with Nigerian founders) maintain SF headquarters with operations in Lagos. Serunjogi touts the benefits of this two continent organizational structure for access to both VC and developer markets in the U.S. and Africa.

As for Chipper Cash’s continuing relationship with investor Joe Montana, “Having access to a someone with the leadership qualities of Joe to provide advice and guidance…that’s something that’s priceless,” said Serunjogi.

A16z ushers in new fund strategy with $2.75B

Axios reported this morning that Andreessen Horowitz, the storied venture capital firm with investments in Airbnb, BuzzFeed and Coinbase, has closed on $2.75 billion for two new funds.

The firm has raised $2 billion for a growth fund led by their most recent hire and 15th general partner David George. Additionally, a16z has lassoed $750 million for early stage deals. We’ve reached out to the firm to confirm.

This comes about a month after Forbes explained a16z’s new status as a financial advisor rather than a traditional venture capital fund.

The a16z model, one that couples capital with agency-like services, has for years been replicated by other big venture firms. Now, a16z expects to lead the charge again by turning itself into a registered investment advisor.

The move will allow a16z to experiment in new areas, including the public markets, other VC funds and cryptocurrencies.

George is investing across industries, offering up his knowledge of late-stage economics, valuations and underwriting to a16z’s large and growing team of deal-makers. George is the at least the fourth high-level addition to the team in the last year, including Katie Haun, who joined in June to lead a16z’s cryptocurrency investment effort. Angela Strange and Connie Chan, additionally, were promoted to GP last summer.

“This is a market where entrepreneurs have lots of choices and they are making choices on the expertise of the individual partner,” a16z managing director Scott Kupor told TechCrunch earlier this year. “The purpose of having more GPs is about having the appropriate domain expertise and coverage so we can be in front of the most opportunities out there.”

A16z’s fifth flagship venture fund closed on $1.5 billion in 2016. The firm also deploys capital out of a $300 million crypto fund, a bio fund and a cultural fund, which boasts limited partners including Sean “Diddy” Combs, Shonda Rhimes and Jada Pinkett Smith.

BlackBuck raises $150 million to digitize freight and logistics across India

India’s trucking system has a big inefficiency problem that continues to drag the economy. BlackBuck, one of the handful logistics startups that is trying to overhaul this system, just raised $150 million in Series D round to further pursue its mission.

The new round was led by Goldman Sachs Investment Partners and Accel at a valuation just shy of $1 billion, according to a person familiar with the matter. Wellington, Sequoia Capital, B Capital, LightStreet, and existing investors Sands Capital and World Bank’s investment arm International Finance Corporation also participated in the round.

The four-year-old B2B startup, which connects businesses with truck owners and freight operators, has raised about $230 million in equity financing and another $100 million in debt financing to date, CEO Rajesh Yabaji told TechCrunch in an interview.

Yabaji said the startup will use the fresh capital to expand and improve its technology stack that enables truck drivers to find more work, and grow its fleet of driver partners. As of today, BlackBuck has 300,000 trucks on its platform and about 10,000 clients including big names such as soft drinks manufacturer Coca Cola, consumer goods giant Unilever, and automotive conglomerate Tata .

BlackBuck has developed a simplified app for truck drivers in India, who are typically not very literate, to help them easily navigate to the destination using Google Maps and accept work. On the client side, businesses can fire up a similar app to place orders. Recently it also tied up with insurance company Acko to cover all the trucks on its network.

So as things work at the moment, truck drivers in India often struggle to find any work on their way back from a drop. Yabaji says BlackBuck enables them to find 25% to 30% more work opportunities. The startup takes between 15% to 20% cut of that and this is how it makes money.

India’s logistics market, valued at $160 billion, has attracted major VC funds in recent years. Delhivery, a supply chain startup, has raised north of $670 million from SoftBank, and Tiger Global among others. Rivigo, a startup that rotates drivers to improve efficiency, has raised north of $215 million from SAIF Partners and Warburg Pincus.

It’s a capital-heavy business. BlackBuck, which employs about 2,000 people, generated $135.5 million in revenue at a loss of $17 million in fiscal year 2018, according to regulatory filings. Yabaji says the startup aims to aggressively grow its business, so profitability is not something it is hoping to go after in the immediate future.

“Given the market we are in today, in terms of private capital being available, we do not have to do IPO for a really long time. It is all about optimizing for the objective,” he said.

BlackBuck said it will also give about 200 of its employees an option to liquidate up to 25% of their vested shareholding in the company at the current price.