Some investors turn to cutting fully remote checks while sheltering in place

By March 16, founder Janine Yancey was tired of playing the waiting game. After watching the stock market take yet another unprecedented nosedive due to coronavirus, she called up a potential investor.

“If this isn’t going to happen, let’s call it now,” Yancey said, referring to the close of her Series A round, the first capital her culture tech company, Emtrain, would have accepted in 14 years. “At that point, I put my nose to the grindstone; I didn’t have a lot of bandwidth in engaging in conversation that wasn’t going anywhere.”

She had the conversation on Monday, and the deal closed on Friday. “I remember thinking, ‘this is the only deal that is happening this month,’ ” she recalled.

As lockdowns extend to prevent the spread of the coronavirus, investors and startups are searching for new ways to connect with each other. At this moment, deals are happening between screens instead of over drinks at The Battery or coffee at The Creamery. A number of investors have already cut fully remote checks, saying it impacts everything from the due diligence process, to appetite, to who gets to access capital in the first place.

Slice, an online ordering and marketing platform for pizzerias, raises $43M

Global investment firm KKR is betting on the pizza business — it just led a $43 million Series C investment in Slice.

Formerly known as MyPizza, Slice has created a mobile app and website where diners can order a custom pizza delivery from their local, independent pizzeria.

And for those pizzerias, CEO Ilir Sela said Slice helps to digitize their whole business by also creating a website, improving their SEO and even allowing them to benefit from the “economies of scale” of the larger network, through bulk orders of supplies like pizza boxes.

Sela contrasted his company’s approach with other popular food delivery apps that he characterized as aggregators. For one thing, Slice “anchors” your favorite pizzerias in the app, giving them the top spots and making it easy to place your regular order with just a few taps. And it will be adding more loyalty features soon.

“Our job is to make loyal customers even more loyal,” he said.

In addition, while there’s been increased criticism of the high fees charged by services like Grubhub, Sela said Slice’s fee is capped at $2.25 per order, allowing pizzerias to get all the upside from large orders.

Of course, the environment for restaurants has changed dramatically in the last few months, thanks to COVID-19. But most pizzerias are already set up for takeout and delivery, and Sela said that more than 90% of the 12,000-plus pizzerias that work with Slice have stayed open.

He also pointed to the company’s Pizza vs Pandemic initiative, which raises funds for pizzerias to feed healthcare workers. The program has raised more than $470,000 and fed an estimated 140,000 workers.

“Local independent pizzerias have been feeding Americans across communities for decades and we are excited to put our resources behind Slice as they help to move these businesses online,” said KKR Principal Allan Jean-Baptiste in a statement. “Slice charges small business owners a fraction of the fees charged by food delivery apps and offers a suite of vertical specific solutions to solve the challenges faced by independent pizza makers.”

Slice had previously raised $30 million, according to Crunchbase. Sela said he’ll be using the new funding to bring on more pizzerias and continue building a “vertically integrated solution for the small businesses, in order to solve more and more of their challenges.”

Trillions are at stake in the retirement wars, and Vise nets $14.5M from Sequoia to manage it

The retirement wars are heating up.

As millions of baby boomers leave their jobs in the coming years and transition into retirement, there is a huge competition for who will manage their savings. On one hand are traditional wealth managers, firms like Edward Jones, who either employ full-time human financial advisors or empower independent contractors to help clients plan through their finances. On the other side has been the rise of “roboadvisors” like Wealthfront that use algorithms and simple financial products like ETFs to advise people at lower cost.

VCs have been bullish on roboadvisors — startups like Wealthfront and Personal Capital have each raised more than $200 million according to Crunchbase — but there has been less investment activity trying to help the financial advisors themselves. After all, aren’t all these folks supposed to be automated away by algorithms?

Vise (from “advise”) is taking a bit of a contrarian bet: its founders Samir Vasavada and Runik Mehrotra believe that humans — augmented with the right AI tools — can prove even more adept at handling the financial affairs of their clients than an app.

The company debuted at TechCrunch Disrupt SF last year, and we wrote up an in-depth profile of its journey from self-funded startup to our stage. Well, according to the founders, it just so happens they met Sequoia at the firm’s Disrupt happy hour, and one thing led to another and Vise is now announcing a $14.5 million Series A term sheet led by Sequoia partner Shaun Maguire.

Previous investors including Keith Rabois through Founders Fund and Ben Ling at Bling Capital filled out the round, and the startup’s total fundraise haul is now at $16 million.

For the founders, the main goal for Vise has been to build a new product using the best practices from the AI and machine learning worlds and converge on a platform that helps independent financial advisors come up with their own ideas to communicate to clients. “Our big thesis was, we want to think about things that are different in this industry — we don’t want to build a product that’s the same as how every other product has been built in the space,” Vasavada said. “We want to build a radically different product, and the way in which we do that is bringing in a diverse team.” That’s included everyone from product folks at notable Silicon Valley companies, AI researchers, and financial services experts.

Vise’s platform. Photo courtesy of Vise.

Financial advisors already rely on a suite of software from CRMs to investment analysis platforms to perform their jobs, but those tools have rarely been integrated into one place. That’s made the existing market for software here quite fragmented. “Number one is it’s too bloated. There’s just too many tools and they don’t do enough and don’t provide much value add. It’s expensive. It’s hard to manage. And the most important thing is it is not at all personalized to the advisor or personalized to the client,” Vasavada said.

Instead, Vise aims to be a one-stop shop for all the needs in the daily workflow of an investment advisor. That includes determining different investment options in a clean interface, personalizing those options for individual clients, and even helping guide investment advisors through the talking points on why certain investment decisions make sense compared to others given a client’s context.

Vise founders Runik Mehrotra (L) and Samir Vasavada (R). Photo via Vise.

In their views, Vasavada and Mehrotra see the wealth advisory market dividing into several buckets, with independent wealth advisors who target $500,000 to $2 million in assets per client as the sweet spot for Vise. Those customers have more specific needs and require more personalization than clients with less assets and so are ill-served by roboadvisors, while at the same time, major institutional players find them too small to handle given the fee structures they have at their scale.

Ultimately, Vise is a pure B2B play, and the founders want to maintain that focus into the future. They believe that wealth advisors have special knowledge of their clients needs and the relationships to match, which Vise can’t compete with.

In addition to Sequoia, Founders Fund, and Bling, Human Capital, Lachy Groom, Steve Chen, and Jon Xu joined the round according to the company.

Tim Hortons eyes China coffee drinkers with Tencent investment

Canadian coffee-and-doughnut chain Tim Hortons has secured a heavyweight partner to further its China expansion. The company announced on its social media account (in Chinese) on Tuesday that it has landed funding from Tencent, the Chinese social networking and gaming giant, without disclosing the size of the proceeds.

Tim Hortons did not immediately respond to TechCrunch’s request for comment. A spokesperson for Tencent declined to comment on the investment.

The 55-year-old Canadian coffee chain entered China in February 2019. With Alibaba already tapped by Starbucks, its archrival Tencent became an obvious ally for Tim Hortons. The coffee firm said the fresh capital will go towards setting up digital infrastructure, such as a WeChat-based mini app, and opening more storefronts. It currently counts about 50 locations in China, most of which are in Shanghai, and aims to reach 1,500 stores without specifying a deadline for the plan.

Investors and businesses have in recent years been jostling to convert a nation of tea drinkers into coffee consumers by merging online and offline retail. Starbucks palled up with Alibaba on a series of “new retail” efforts, which include shared membership perks between the two, delivery carried out by Alibaba’s Ele.me, voice ordering, and a distribution partnership with Alibaba’s omnichannel supermarket Hema. Coffee upstart Luckin, which is recently ensnarled in an accounting scandal, was digital from day one and focuses on app orders and 30-minute delivery.

India’s logistics aggregator Shiprocket raises $13M to expand overseas

Shiprocket, a New Delhi-based logistics aggregator that works with direct-to-consumer sellers including several social media influencers, has raised $13 million in a new financing round as it looks to expand its platform overseas.

Silicon Valley-based investment firm Tribe Capital led Shiprocket’s Series C financing round. Innoven Capital and existing investor Bertelsmann India Investments also participated in the round, which brings the three year-old startup’s to-date funding to $26 million.

Shiprocket works with more than a dozen courier companies in India and negotiates terms such as the fee and shipment tracking with them on behalf of its sellers, Saahil Goel, co-founder and chief executive of the startup, told TechCrunch in an interview last year.

The startup today works with more than 35,000 sellers in India and processes about 2 million shipments each month. It also helps sellers with tackling items that get lost during the shipment and enabling cash on delivery, the most popular payment option among customers in India. Gillettte, beauty product chain Mamaearth, beer franchise The Beer Cafe, coaching institute Aakaash Institute, and craft beer maker Bira are among some brands that use Shiprocket’s service.

Shiprocket has also become one of the top selling partners for social media influencers in India who have to take care of the items they sell to their fans themselves. In recent years, a wave of social commerce startups such as Meesho, backed by Prosus Ventures and Facebook, and Simsim have emerged in India as they attempt to reshape how people think about buying online.

“One of the reasons why the United States and emerging economies have thrived over the last 50 years has been a healthy dynamic of small to medium entrepreneurial businesses alongside consolidation and scaling corporations,” said Arjun Sethi, co-founder of Tribe Capital, in a statement.

“We invested in Shiprocket because they empower the small to medium businesses that truly represent the heart and soul of any emerging economy. Today, the SME segment lacks capital finance and credit, infrastructure, technology, and marketing strategies. Shiprocket has enabled these businesses to grow at a time of emerging competition enabled by mobile internet and corporations,” he added.

Shiprocket says it will use the fresh capital to expand its data science and engineering teams and focus on new initiatives including its international expansions. The startup already ships shipment overseas, it claims it delivers in more than 26,000 zip codes in India and 220 additional countries and markets.

The startup said it was profitable in the financial year that ended on March 31, 2019 and has an annualized revenue run rate between $25 million to $30 million. It did not comment on the impact coronavirus pandemic has had on its business.

Vista Equity Partners to invest $1.5B in Indian telecom giant Reliance Jio Platforms

Private equity firm Vista Equity Partners said on Friday it would invest $1.5 billion in Reliance Jio Platforms joining social conglomerate Facebook and private equity firm Silver Lake that have also made similar bets on the Indian telecom giant in recent weeks.

The planned announcement, which would give U.S.-headquartered software-focused buyout firm Vista Equity Partners a 2.32% stake in Reliance Jio Platforms, values it at an equity valuation of $65 billion and enterprise valuation of $68 billion — the same valuation implied by the Silver Lake investment, the Indian firm said.

Reliance Jio Platforms, which began its commercial operation in the second half of 2016, upended the local telecom market by offering bulk of 4G data and voice calls for six months to users at no charge. A subsidiary of Reliance Industries (India’s most valuable firm by market value), Jio Platforms has amassed 388 million subscribers since its launch to become the nation’s top telecom operator.

“We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest growing digital economies,” said Robert F. Smith, Founder, Chairman and CEO of Vista, which has more than $57 billion in cumulative capital commitments, in a statement.

More to follow…

Longtime VC Todd Chaffee of IVP says late-stage scene is now ‘M&A world’

Todd Chaffee has long been one of the most senior members of the late-stage venture firm Institutional Venture Partners. Chaffee joined IVP in 2000 after logging six years at Visa, and went on to lead rounds in numerous prominent later-stage companies, many (but not all) of which have gone public, including Coinbase, Compass, Klarna, Kayak, Omniture, Pandora and Twitter.

It’s a good business to be in, particularly when companies are going public at that clip. Given that the IPO window is now shut indefinitely, we wondered what that might mean for the firm’s model.

Chaffee — who, like contemporary Bill Gurley, won’t be making new investments out of his firm’s next fund — talked with us about that question and what else the pandemic means to the venture industry and to him personally. Our chat has been edited for length and clarity.

TechCrunch: IVP last announced a fund in 2017. I assume one is coming soon that you cannot talk about — unless you can talk about it?

Todd Chaffee: Yeah, we’re currently investing Fund 16. That’s all I can tell you right now.

Do you think it’s time to bulk up even more, or size down? There’s maybe more opportunity but also check sizes are going to get smaller, seemingly.

Hydrant raises $5.7 million Series A to help consumers hydrate faster

Eight glasses of water a day. That’s the old recommendation you and I have heard growing up. And while we all know the importance of hydration to our health, some methods of hydration are more efficient than others. At least, that’s the premise that Hydrant was built on.

The company, a wellness brand that launched out of New York in 2018, has today announced the close of a $5.7 million Series A financing to grow wellness business. The round was led by Coefficient Capital, with participation from Rx3 Ventures. This brings total funding to $8.8 million for the company, who was previously backed by Soma Capital, Sixers Innovation Lab, as well as several angels and other funds.

Hydrant offers two products: Rapid Hydration and Rapid Hydration + Caffeine. They come in powder form, in packets, and are to be added to water.

The idea is that water obviously hydrates the human body on its own, but can take some time to do so, slowing getting absorbed as it travels most of the way through the digestive system before feeding the most significant portion of that water into the blood stream to nourish other organs, muscles, etc.

Other hydration products on the market, according to founders John Sherwin and Jai Jung Kim, were either too sugary, tasted bad from artificial flavoring or coloring, or didn’t offer the right mix of electrolytes to rapidly hydrate the body.

That’s where Hydrant comes in. The product was designed with a specific ratio of electrolytes and a small bit of sugar to speed up the absorption of water in the digestive system. Sherwin, cofounder at Hydrant, studied at Oxford and graduated with a BA in biological sciences before Hydrant. With the right mix of electrolytes and sugar molecules — in Hydrant’s case, those come from a bit of powdered fruit juice — the body shortcuts water’s usual absorption rate in the body.

A mechanism in the small intestine, called the sodium glucose co-transport mechanism, detects the presence of glucose molecules alongside sodium molecules. When the body detects that combination in a certain ration, it creates a ‘pump’, said Sherwin (describing his air quotes) that pushes those molecules into the bloodstream. The water follows those sodium molecules into the bloodstream as well, hydrating the body faster than with your average glass of water.

Alongside selling the product on its own website, Hydrant also has retail partnerships with Whole Foods and sells via Amazon, with more retail partnerships in the works.

The company says that the pandemic has slowed its conversations with retail partners, but that the company is reallocating its resources to focus on its own ecommerce channel. Retail is a profitable channel for Hydrant. The founders said that the company works hard to focus on retail partners that fit with the brand and maximize profitability.

All Hydrant manufacturing is done in the U.S.

Hydrant offers both a subscription and an a la carte option. Folks can buy a 30-pack of the Rapid Hydration mix for $37.50, and the caffeinated hydration mix for $43.75. People who buy as a subscription get a 20 percent discount from that. Subscription accounts for 50 percent of the company’s business, according to the founders.

Like many startups, Hydrant says its biggest challenge is competing on talent.

“We believe one of the most important drivers of success for our business is finding the right people,” said Kim. “We actually care less about direct industry experience. As a matter of fact, from our entire team, only one person comes from a directly relevant industry. The rest of the team members don’t have direct CPG or food and beverage experience. We care about people who are smart, hard workers, really curious, and who enjoy solving problems. There’s intense competition for good talent, and we’re doing everything we can to recruit that talent and pitch that we’re the right business for them to join.”

Hydrant plans on using this latest funding round to invest in talent, foster new product innovation, and invest in analytics to “double down on the data-driven DNA” of the company.

Latin America Roundup: Big rounds, big mergers and a $3.8M pandemic fund from Nubank

Despite the global panic caused by the current pandemic, startups in Latin America have continued to attract international capital. In April, Mexico’s Alphacredit, Colombia’s Frubana and Brazil’s CargoX were among those that raised particularly large rounds to support their growth during this challenging time. All three companies target markets that may have grown since the start of the pandemic, namely lending, food delivery and cargo delivery, respectively.

Alphacredit, a Mexican lending startup, raised a $100 million equity round from SoftBank and previous investors to continue to expand its digital banking services across Mexico. This round comes just months after the startup received a $125 million Series B round from SoftBank in January of this year. Alphacredit’s CEO explained that the round would enable the company to help clients during the current liquidity crisis, increasing financial inclusion in Mexico.

Meanwhile, fresh produce delivery platform Frubana raised a $25 million Series A led by GGV and Monashees, with support from SoftBank, Tiger Global and several other private investors. The startup delivers fresh produce to restaurants and small retailers directly from farmers across Colombia, and participated in Y Combinator in 2019.

Frubana has seen a boom in demand for its products since the start of the COVID-19 pandemic. People have shied away from visiting large grocery stores, preferring to visit local mom-and-pop shops that receive the startup’s deliveries. Frubana raised $12 million in mid-2019 to help scale into Mexico and Brazil after it hit a monthly growth rate of 50% in the Colombian market. The startup’s founder, Fabián Gomez, started Frubana after serving as head of Expansion at Rappi, one of Latin America’s fastest-growing startups and Colombia’s first unicorn.

Finally, Brazil’s “Uber for Trucks,” CargoX raised an $80 million Series E round led by LGT Lightstone Latin America, with contributions from Valor Capital, Goldman Sachs and Farallon Capital. The startup has quietly grown to become one of the largest players in Brazil’s inefficient trucking industry, managing a fleet of nearly 400,000 truck drivers, without owning a single truck.

This investment brings CargoX’s total capital raised to $176 million and has enabled the company to launch a $5.6 million fund for the delivery of essential goods in Brazil during COVID-19. This fund will help CargoX keep drivers employed and ensure the proper delivery of essential goods like medication, food and cleaning products.

Nubank launches $3.8 million COVID-19 fund to support clients

Brazil’s largest neobank, Nubank, announced a $3.8 million (R$20 million) fund to help its clients survive the current pandemic. The fund also relies on partnerships with iFood, Rappi, Hospital Sírio-Libanês and Zenklub to help struggling clients access food, supplies, medical care and online psychological treatment throughout the pandemic.

Nubank will use the fund to grant credits to people who cannot leave their home, providing them with discounted groceries and free delivery service. Through the partnership with Hospital Sírio-Libanês, the neobank will pay for more than 1,000 free online consultations with doctors for its home-bound clients.

Nubank has more than 20 million clients across Brazil and Mexico, where it launched in 2019. CEO David Velez stated that he believed the fund could serve tens of thousands of people in need by the end of April. Customers who wished to receive these benefits were directed to reach out to Nubank via phone, email or chat to be connected with a representative who could grant the appropriate credits.

iFood merges with Domicilios to fight Rappi in its home territory

Brazil’s largest food deliverer, iFood, recently announced a partnership with Delivery Hero to merge with their Colombian subsidiary, Domicilios. The parties did not disclose the price of the deal but have shared that iFood is now the majority shareholder in Domicilios, holding 51% of the company.

IFood operates in Mexico and Colombia, as well as Brazil, but has struggled to gain traction in Spanish-speaking Latin America. This merger makes iFood geographically the largest food delivery company in the country, with more than 12,000 restaurants in its network. However, local last-mile delivery startup Rappi continues to dominate the market, using SoftBank backing to blitzscale across the region.

By comparison, iFood has focused on developing its technology, using artificial intelligence to improve the user experience across its platforms in Mexico, Colombia and Brazil. Using these systems, iFood processes more than 26 million deliveries each month, helping restaurants across the region adapt to the new protocols caused by the virus and social-distancing policies. IFood hopes the merger will help provide a more competitive delivery service for Colombians, as well as helping boost growth for local restaurants.

News and Notes: Nuvocargo, Kueski, Magma Partners, SouSmile

Freight-forwarding startup Nuvocargo raised $5.3 million in seed funding to support the growth of its trade routes across the U.S.-Mexico border. Founded by Ecuadorian-born Deepak Chhugani in 2018, Nuvocargo has grown quickly since participating in Y Combinator, although this funding was their first institutional round. The round drew investors from both sides of the border, including Mexico’s ALLVP. Nuvocargo also marks the first investment by new partner Antonia Rojas Eing. Nuvocargo is working hard to ensure its truck drivers are safe as they continue to deliver essential supplies across the border through the pandemic.

Mexican online credit platform Kueski announced that it would lay off employees due to the economic crunch caused by COVID-19. Kueski provides microloans to more than 500,000 Mexicans and has been struggling financially as business slows during the pandemic. While Kueski did not disclose an official number, it is estimated that they laid off around 90 employees.

Latin American venture capital firm Magma Partners acquired Guadalajara-based accelerator Rampa Ventures to intensify its investments in Mexico. Rampa’s headquarters will serve as a Mexican base for Magma Partners as it continues to invest in the country, where it already has 12 startups in its portfolio. As a part of the deal, Rampa’s founder Mak Gutierrez will take over as CEO of Magma Partners’ internal agency, Magma Infrastructure, which helps startups grow and market themselves in the region.

The Brazilian direct to consumer dental tech startup SouSmile raised a $10 million Series A this month, closing the deal before investors began to show concerns about COVID-19. SouSmile uses 3D scanners to rapidly create invisible alignment devices for customers to provide them with affordable orthodontics for 60% cheaper than current models. This model has proved highly successful in Latin America, where access to orthodontics is quite low and cost-prohibitive.

Despite an impending global economic crisis, startup investment in Latin America showed signs of resilience in April. Startups in industries like delivery, healthcare and essential services have seen growth this month, and many are providing support to their customers and suppliers in this challenging time.

It is hard to predict what the world will look like for startups, let alone for anyone, by the end of next month. The resilience of Latin America’s startups provides hope that some businesses will bounce back and continue to support their customers throughout the global recovery from this pandemic.

Autotech Ventures raises more than $150 million with an eye on ground transportation startups

Autotech Ventures popped on the scene three years ago with a $120 million debut fund and a plan to invest in early-stage ground transportation startups. Now, with investments in 26 startups and a handful of exits, including Xnor.ai, DeepScale and Frontier Car Group, the venture firm is back with a new, bigger fund and the same strategy.

Autotech Ventures has raised more than $150 million in its second fund with capital commitments from both financial and corporate investors, including Volvo Group Venture Capital AB, Lear, Bridgestone and Stoneridge, as well as other vehicle manufacturers, parts suppliers, repair shop chains, leasing corporations, dealership groups and trucking firms.

The new fund brings the firm to more than $270 million under management to date.

While Autotech’s funds include institutional financial investors, it has largely focused on corporation.

“The corporate LP base is a key part of our strategy as a firm and a key differentiator for us,” Daniel Hoffer, managing director at Autotech, said in a recent interview with TechCrunch. “At a high level we provide capital, transportation market intelligence and access to large corporations in the industry, including our LPs. Startups really value those connections because we can accelerate their go-to market and their distribution channels in addition to providing greater access to other forms of business development and even M&A opportunities.”

The firm typically aims for the seed and Series A sweet spot. But it occasionally will participate in Series B and later-stage funding rounds, Hoffer said. Its new $150 million-plus fund will target early-stage startups in several sectors that fall under the “ground transportation and mobility” umbrella, including connectivity, autonomy, shared-use mobility, electrification and digital enterprise applications.

Autotech Ventures does invest globally, although the majority of its investments are in the U.S. Outside of North America, the firm has a proportionate interest in Europe and Israel, according to Hoffer.

Some of its notable investments include computer vision startup DeepScale (which was snapped up by Tesla last year), Lyft, used vehicle marketplace operator Frontier Car Group, Outdoorsy, Swvl, parking app SpotHero, Volta Charging and Xnor.ai, which Apple acquired in January.

Hoffer said the firm is sensitive to the well-hyped trends, such as autonomous vehicle technology, that everybody is chasing, but it also is interested in the more niche opportunities that people might be less aware of.

The COVID-19 pandemic, which has upended the shared mobility sector, ride-hailing and public transportation, has Hoffer and his fellow Autotech venture capitalists focused on logistics and supply chain visibility — two areas that have promise in this “COVID-oriented world.”

Autotech is also interested in overlooked opportunities, such as software that enables the industry to execute recalls, and even visibility into junkyard inventory, Hoffer added. The company also sees investment opportunities in “off highway” autonomous vehicle technology ventures, such as in mining and construction.