This $3.5 million new Pagani hypercar got its world debut in a Zynga mobile game

High-priced, handmade boutique sports cars typically make their debut where the well-heeled and the media gather. Pagani took a different approach this time around.

The Italian supercar manufacturer unveiled its new nearly $3.5 million Huayra Roadster BC in CSR2, the mobile game produced by Zynga .

The physical car will eventually get its moment. Pagani will show off the hypercar to the public next month at the Monterey Car Show. In the meantime, Zynga rebuilt the Pagani Huayra Roadster BC in CSR2, giving users a chance to “drive” the supercar.

Pagani HuayraBCRoadsterPB 2019 RaceScreenshot 2

“When Horacio Pagani first began designing cars 44 years ago, it would have been impossible to imagine that a car like the Roadster BC would ever be unveiled to the world in a mobile game,” said Michael Staskin, managing director of Pagani Automobili America, said in a statement. “We chose to partner with CSR2 on the reveal of the Roadster BC because we are both leaders in our respective industries, we both show incredible attention to design and detail and we both continue to disrupt what is considered normal in the automotive industry.”

CSR2 players can enter the 80 race ladder by using a Pagani Huayra Coupé. During the game, players get the chance to add the Pagani Huayra Roadster BC to their collection. Using augmented reality, players can also park their Pagani cars in their real-world driveways and open every panel to study the details close up.

In the real world, the Pagani Huayra Roadster BC gets its power from a 6.0-liter, twin-turbocharged V12 engine built for Pagani by Mercedes-AMG. The result is an engine that produces 800 horsepower at 5900 rpm and 774 pound feet of torque. It boasts a seven-speed, single-clutch automated manual transmission and weighs 2,756 pounds, just a skosh lighter than the regular Huayra Roadster.

As one might expect, the Roadster BC is a fast can-you-handle-how-it-corners beast that accelerates from zero to 60 mph in 2.5 seconds and generate 1.9 of lateral grips through corners.

Sadly, few will get to drive this real-world version. Pagani will make only 40 of Roadster BCs.

WeWork CEO Adam Neumann has reportedly cashed out of over $700 million ahead of its IPO

Adam Neumann, the co-founder and chief executive of the international real estate co-working startup, WeWork, has reportedly cashed out of more than $700 million from his company ahead of its initial public offering.

The size and timing of the payouts, made through a mix of stock sales and loans secured by his equity in the company, is unusual considering that founders typically wait until after a company holds its public offering to liquidate their holdings.

Despite the loans and sales of stock, first reported by The Wall Street Journal, Neumann remains the single largest shareholder in the company.

According to the Journal’s reporting, Neumann has already set up a family office to invest the proceeds and begun to hire financial professionals to run it.

He’s also made significant investments in real estate in New York and San Francisco, including four homes in the greater New York metropolitan area, and a $21 million 13,000 square-foot house in the Bay Area complete with a guitar shaped room (I guess a fiddle would be too on the nose). In all, Neumann reportedly spent $80 million on real estate.

Neumann has also invested in commercial real estate (the kind that WeWork leases to provide workspace with more flexible leases for companies and entrepreneurs), including properties in San Joes, Calif. and New York. Indeed four of Neumann’s properties are leased to WeWork — to the tune of several million dollars in rent. According to the Journal, Neumann will transfer those property holdings to a WeWork-controlled fund.

The WeWork chief executive has also invested in startups in recent years. He’s got an equity stake in seven companies including: Hometalk, Intercure, EquityBee, Selina, Tunity, Feature.fm, and Pins, according to CrunchBase.

The rewards that Neumann is reaping from the loans and stock sales are among the highest recorded by a private company executive. In recent years, Evan Spiegel sold $8 million in stock and borrowed $20 million from Snap before its 2017 public offering and Slack Technologies chief executive Stewart Butterfieldsold $3.2 million of stock before Slack’s public offering in June.

The only liquidation of stock and other payouts that have been disclosed which come close to Neumann’s payouts are the $300 million that GroupOn co-founder Eric Lefkofksy’s sold before his company’s IPO and the over $100 million that Mark Pincus took off the table ahead of Zynga’s offering.

WeWork declined to comment for this article.

 

Meet TezLab, the Fitbit for Tesla vehicles

Some of the best real-time insights into Tesla and its global fleet of electric vehicles — outside the confines of its Silicon Valley headquarters — might be through the lens of TezLab, a tiny upstart in Brooklyn.

Now, a little more than two years after its founding, TezLab is on the verge of hitting what its founders believe is a tipping point of users, a milestone that could finally trigger a path to monetization. And it’s adding lots of new features to help accelerate that plan.

For the non-Tesla owner, the name TezLab is likely a foreign one. In certain circles though, namely Tesla owners obsessed with understanding how their electric vehicle performs, TezLab is a familiar friend.

Tezlab is a free app that’s like a Fitbit for a Tesla vehicle. Tesla owners who download the app can track their efficiency, total trip miles and use it to control certain functions of the vehicle, such as locking and unlocking the doors and heating and air conditioning. There’s even a gamification piece that lets users earn badges for hitting milestones or completing tasks.

The company has started to add new features as part of a longer term plan aimed at monetization.

One of these features, which crowdsources data like Waze to give insights and ratings on Tesla Supercharger stations, is rolling out now. The video below shows how this supercharger feature will function.

The Waze for supercharger feature is considered “phase one” of the company’s plans to broaden its crowdsourcing and social community.

Origin story

The six-person team behind TezLab was born out of HappyFunCorp, a software engineering shop that builds apps for mobile, web, wearables and Internet of Things devices for clients that include Amazon, Facebook and Twitter, as well as an array of startups.

HFC’s engineers, including co-founders Ben Schippers and William Schenk, were attracted to Tesla largely because of its techcentric approach and one important detail: the Tesla API endpoints are accessible to outsiders.

The Tesla API is technically private. But it exists, allowing Tesla’s own first-party app to communicate with the cars to do things like read battery charge status and lock doors. When reverse-engineered, it’s possible for a third-party app to communicate directly with the API. (Tesla CEO Elon Musk has talked recently about opening up the API to third-party developers)

“Essentially, the plumbing is already built to connect to the server,” Schippers told TechCrunch recently. “This was the catalyst for us.”

A Tesla vehicle buying trend was triggered at HFC. Schippers, Schenk and a number of other software engineers and staffers at HFC bought, and still own, Tesla vehicles like the Model 3. The company’s HFC fund provided the initial $350,000 to build the first version of TezLab.

Repository of data

TezLab hasn’t captured anywhere near every Tesla owner. But Schippers believes they’re getting close to reaching a critical mass of users. More than 200 owners are downloading the app each week, and that rate is accelerating, he said.

TezLab has 16,000 total installs on the Apple App Store and Google Play, according to Sensor Tower . The figures are all unique, new installs. The firm doesn’t count re-installs or downloads to multiple devices belonging to the same user. However, that total install number is likely closer to 18,000 because many are listed under TestFlight, an online service used to test apps.

In comparison, Tesla delivered 245,506 vehicles globally in 2018. TezLab doesn’t expect every Tesla owner to download the app. Instead, Schippers is initially aiming for 10% of owners — a target he believes is within reach — and eventually higher.

Even at its current numbers, TezLab has become a massive repository of Tesla data. The company is storing between 850,000 to 1 million events a day, and that volume is growing. That translates to more than 1 GB of data a day, according to Schippers.

“We now have enough data in our system to start making large assumptions of what the fleet is doing and why,” said Schippers, who is CEO of HappyFunCorp and head of product at TezLab.

tezlab

The data is aggregated and anonymous and isn’t shared publicly. And there are no plans to sell that data.

“I think we can create something really meaningful, without getting into the business of selling data,” Schippers told TechCrunch.

Of course, what Schippers and others at TezLab have built could, theoretically, end overnight if Tesla were to change access.

Tesla could do to us what Facebook did to Zynga, and we don’t want that,” Schippers said.

Tesla declined to comment on this topic.

What TezLab does provide publicly on its website are insights based on that crunched data. For instance, anyone visiting the site can get a breakdown of model ownership, the average trip length and average time between plugging in.

As the company adds more features to the app, an understanding of how people use their Tesla vehicles should deepen.

In the background, of course, TezLab knows more than what it shows on its website. It can quickly spot phantom drain issues, if the Tesla API goes offline or chart spikes in charging use. For instance, Tezlab was able to determine that visits to Tesla Supercharger stations were 84% higher on Memorial Day than on an average day in 2019.

The Strava model

Capturing and storing that data is at the core of TezLab’s plan to make money. The app will remain free even as more features are added.

The company plans to follow the business model of the social fitness network Strava,  which is charge for storage, not features. That data could become a lot more valuable to owners as new features are added. TezLab is looking at tracking Autopilot miles and is looking into doing “interesting stuff with Sentry mode,” the security feature now live in Tesla vehicles.

This summer, the app will introduce clubs that Schippers hopes will build up the community. The feature will let Tesla owners join a specific club, say in Norway, Brooklyn or San Francisco. It will be designed so owners can easily find and converse with other owners. And Schippers added, only people who own Tesla are allowed in.

TezLab’s staff puts itself squarely in the “protector of the realm” category when it comes to Tesla. In the end, all of this is to help Tesla succeed, said Schippers.

“We look at what Fitbit did for walking and exercise and motivation,” he said. “And we’ll bring that to the space of electric vehicles.”

India’s FreshToHome raises $11 million to expand its fish, meat, and vegetable e-commerce platform

Shan Kadavil, who spent early days of his career managing tech support firm Support and then heading India operations of gaming firm Zynga, says he had a calling of sorts when his son was born. Kadavil realized that much of the meat that sells in India is not exactly healthy. The perishables are loaded with chemicals to superficially extend their life by six months, if not more. He wanted to do something better.

Fast forward four years, Kadavil said today that FreshToHome, his new e-commerce startup that delivers “100 percent” pure and fresh fish, chicken, and other kinds of meat, has raised $11 million in Series A funding. The startup has raised $13 million to date.

The round was led by CE Ventures, with participation from Das Capital, Kortschak Investments, TTCER Partners, Al-Nasser Holdings, M&S Partners and other Asia and Valley based Investors. Some of the backers of FreshToHome include Rajan Anandan, the former head of Google Southeast Asia, David Krane, CEO of GV, and Mark Pincus, chairman of Zynga.

FreshToHome has already courted 400,000 customers across four cities — Bengaluru, NCR (Delhi, Gurgaon, Noida, Faridabad, Ghaziabad & Greater Noida), Chennai and Kerala (Kochi, Trivandrum, Calicut & Trichur) — in India. On the backend, the startup does business with 4,500 fishermen across 125 coasts.

In an interview with TechCrunch, Kadavil said the startup is trying to “Uber-ize farmers and fishmen in India. We are giving them an app — around which we have a US patent — for commodity exchange. What farmers and fishermen do is they bid with us (as mandated by local laws) electronically using the app.” By dealing directly with the source, the startup is eliminating as many as half a dozen middlemen to cut costs.

The startup has built its own supply chain network. “We have got a 1,000 people, 100 trucks, and 40 collection points.” Kadavil claimed that FreshToHome has already become the largest e-commerce platform for meat with $1.73 million in GMV sales each month.

If this all sounds well strategized, it is because of the people who are running the show. Kadavil founded the FreshToHome with Matthew Joseph, a veteran in the industry who has dealt with fish export for more than 30 years. Joseph started India’s first e-commerce venture in fish and meat called SeaToHome in 2012.

FreshToHome has also emerged as a micro-VC to farmers where it is doing corporate farming. In such model, FreshToHome guides farmers to use the latest technologies to produce certain kind of fish. As of today, the startup is seeing 60,000 kg (132,227 pound) of production each month.

FreshToHome will use the fresh capital to expand its supply chain network, connect with as many as 5,500 new farmers, and start delivering vegetables. It already delivers vegetables in Bengaluru. Kadavil said the startup will also expand to two more cities — Mumbai and Pune.

FreshToHome will compete with a handful of startups, including Licious, which has raised more than $35 million to date, ZappFresh, and BigBasket, which just earlier this month raised $150 million. The cold-chain market of India is estimated to grow to $37 billion in next five years.

In a prepared statement, Tushar Singhvi, Director of CE Ventures said, “The Meat and Seafood segment in India is pegged to be a 50 billion dollar market, but we have to keep in mind that it’s a highly fragmented industry. FreshToHome.com is not only trying to streamline the industry, they’re also using technology to revolutionize the way the industry functions by disintermediating the supply chain, eliminating the middleman and working directly with the fishermen and farmers in a market place model, to make fresh and chemical free food accessible to the masses at large.”

Canopy’s upscale co-working business adds a new location in SF on the heels of strategic funding

Canopy, an upscale, profitable developer of co-working spaces, has expanded its footprint in San Francisco to a third location on the heels of a strategic financing round.

Co-founded by the product designer Yves Behar; the second generation design-build developer Amir Mortazavi; and serial entrepreneur and medical office space developer Steve Mohebi, Canopy bills itself as a better-designed WeWork for high-powered adults (or aspiring high-powered adults).

Canopy co-founders Amir Mortazavi, Yves Behar and Steve Mohebi

The company opened its latest office space in the financial district of San Francisco and has plans to double its . Jackson Square location with a new penthouse space.

Investors in the round were culled from Canopy members and a few institutional investment funds including: Structure Capital, Montage Ventures, Graph Ventures and individuals like Erik  Blachford, the former chief executive of Expedia, Mark PIncus, the former chief executive of Zynga, and Spencer Raskoff the co-founder of Zillow.

Canopy’s latest office will be at 353 Kearny Street and Pine. The ground floor will house a retail store in partnership with Monocle Magazine ad contain 32 offices suitable for everyone from one person shops to larger teams of ten.

Like all of its offices, Canopy’s new building will be kitted out with Herman Miller sit-to-stand desks and Sayl chairs, and sound masking for privacy.

“Designing our spaces along with my friend and co-founder, Yves Behar, to serve the unmet demands of the premium segment has been a true labor of passion,” said co-founder and CEO, Amir Mortazavi, in a statement. “We build everything around our members’ needs — a generosity of space, abundant natural light, easy flow between private and shared spaces — to ensure the overall Canopy experience is at once inspiring and calm.”

The company boasts 300 members already and its founders say the business is already profitable. Canopy’s workspaces are not for everyone. Prices start at $100 per month to take advantage of the company’s addresses for people who want a virtual office. For folks who want ten days worth of access to the co-working space’s common areas and an actual seat at a table, the price tag is $365 per month ($275 gets you 60 days of access out of a year).

Meanwhile, anyone who wants to be able to sit at an actual desk and work at a Canopy space better be willing to shell out $925 per month. That’s… not cheap.

In-car commerce startup Cargo extends Uber partnership to Brazil

Cargo, the startup that brings the convenience store into ride-hailing vehicles, is making its first international expansion through an exclusive partnership with Uber in Brazil.

Uber drivers in São Paulo and Rio de Janeiro will now be able to sign up for Cargo and potentially earn additional income by selling products to passengers during their ride.

Cargo, which launched in 2017, provides qualified ridesharing drivers with free boxes filled with the kinds of goods you might find in a convenience store, including snacks and phone chargers. Riders can use Cargo’s mobile web menu on their smartphones (without downloading an app) to buy what they need.

The expansion into Brazil includes a relationship with am/pm convenience stores. In Brazil, about 2,500 am/pm stores are operated and located in Ipiranga gas stations. Uber drivers that sign up with Cargo will collect their boxes of products at these stores.

The announcement is an extension of a partnership with Uber that began last July in San Francisco and Los Angeles. Cargo and Uber have added more U.S. cities to the partnership, including Boston, Miami, New York and Washington, D.C.

The move will give Cargo access to the more than 600,000 Uber drivers in Brazil. It also signals the beginning of what will be a broader global expansion for the company. Some 20,000 U.S. drivers have used the Cargo service. 

In October, Cargo announced it had raised $22 million in a Series A round led by Founders Fund. The Series A round included additional investment from Aquiline Technology Growth, Coatue Management and a number of high-profile entertainment, gaming and technology executives such as Zynga founder Mark Pincus, Twitch’s former CSO Colin Carrier, media investor Vivi Nevo, former NBA commissioner David Stern, Def Jam Records CEO Paul Rosenberg, Steve Aoki, Maria Shriver and Patrick and Christina Schwarzenegger.

To date, Cargo has raised $30 million in venture funding.

Startups Weekly: Is Munchery the Fyre Festival of startups?

It was a tough week. Journalists around the U.S. were hit hard by layoffs, from HuffPost to BuzzFeed News to Verizon Media Group, which owns this very site. The government entered day 35 of the shutdown before President Donald Trump agreed to a short-term deal to reopen it for three weeks. And in the startup world, a once high-flying, venture-subsidized food delivery startup crashed and burned, leaving a cluster of small businesses in its wreckage.

Some good things happened too — we’ll get to those.

  1. Munchery fails to pay its debts

In an email to customers on Monday, Munchery announced it would cease operations, effective immediately. It, however, failed to notify any of its vendors, small businesses in San Francisco that had supplied baked goods to the startup for years. I talked to several of those business owners about what they’re owed and what the sudden disappearance of Munchery means for them.

  1. #Theranos #Content

If you haven’t read John Carreyrou’s “Bad Blood,” stop reading this newsletter right now and go get yourself a copy. If you love to read, watch and listen to the Theranos saga as much as I do, you’ll be glad to hear there’s some fresh Theranos content released to the world this week. Called “The Dropout,” a new ABC documentary and an accompanying podcast about Theranos features never-before-aired depositions. Plus, TechCrunch’s Josh Constine reviews the Theranos documentary, “The Inventor,” which premiered at the Sundance Film Festival this week.

  1. Deal of the week

Confluent, the developer of a streaming data technology that processes massive amounts of information in real time, announced a $125 million Series D round on an enormous $2.5 billion valuation (up 5x from its Series C valuation). The round was led by existing investor Sequoia Capital, with participation from other top-tier VCs Index Ventures and Benchmark.

  1. Wag founders ditch dogs for bikes

Jonathan and Joshua Viner, the founders of the SoftBank-backed dog walking startup Wag, launched Wheels this week, an electric bike-share startup with a $37 million funding from Tenaya Capital, Bullpen Capital, Naval Ravikant and others.

  1. Go-Jek makes progress on a $2B round

Indonesia-headquartered Go-Jek has closed an initial chunk of what it hopes will be a $2 billion round after a collection of existing investors, including Google, Tencent and JD.com, agreed to put around $920 million toward it, according to TechCrunch’s Southeast Asia reporter Jon Russell. The deal, which we understand could be announced as soon as next week, will value Go-Jek’s business at around $9.5 billion.

  1. Knowledge center

There’s been a lot of chatter around direct listings since Spotify opted to go public via the untraditional route in 2018, but what exactly is a direct listing… We asked a panel of six experts: “What are the implications of direct listing tech IPOs for financial services, regulation, venture capital and capital markets activity?” 

Here’s your weekly reminder to send me tips, suggestions and more to [email protected] or @KateClarkTweets

  1. Contraceptive deserts

Through telemedicine and direct-to-consumer sales platforms, startups are streamlining the historically arduous process of accessing contraception. The latest effort to secure a significant financing round is The Pill Club, an online birth control prescription and delivery service. This week, the consumer-focused investor VMG Partners led its $51 million Series B. 

  1. More startup cash
  1. Fundraising activity

Sunil Nagaraj spent years investing in startups at Bessemer Venture Partners, but he was itching to meet with younger companies and strike out on his own. So in the summer of 2017, he did, and now, Nagaraj said he’s closed Ubiquity Ventures’ debut fund with $30 million. March Capital Partners, the Los Angeles-based venture capital firm, raised $300 million for its latest fund. Plus, Zynga founder Mark Pincus is reportedly raising up to $700 million for a new investment fund, called Reinvent Capital, that will focus on publicly traded tech companies in need of strategic restructuring.

  1. Finally, meet the startups in Alchemist’s 20th cohort

A mental health startup, a construction tech business and a fintech company, among others. Take a quick look at the startups that just completed Alchemist’s six-month accelerator program.

  1. Listen to me talk

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase editor-in-chief Alex Wilhelm, TechCrunch’s Silicon Valley editor Connie Loizos and I chatted about Munchery’s downfall, The Pill Club’s mission to make birth control more accessible and the VC slowdown in China.

 

Zynga to acquire Small Giant Games, the maker of Empires & Puzzles, for $700M

Social game developer Zynga has entered into an agreement to acquire Small Giant Games, the startup behind the popular mobile game Empires & Puzzles, in a deal expected to total $700 million.

Zynga, which has tumbled since its 2011 Nasdaq initial public offering, will initially acquire 80 percent of Small Giant Games for $560 million, composed of $330 million in cash and $230 million of unregistered Zynga common stock. Zynga will fund part of the transaction with a $200 million credit facility.

“We’ve been impressed by the quality and momentum of Empires & Puzzles as we add another Forever Franchise into Zynga’s portfolio,” Zynga chief executive officer Frank Gibeau said in a statement. “Small Giant has created an innovative game that delivers a unique player experience that engages over the long term.”

The deal is expected to close on January 1. Zynga will purchase the remaining 20 percent of Small Giant over the next three years “at valuations based on specified profitability goals.”

Helsinki-based Small Giant Games had raised $52 million in equity funding from EQT Ventures, Creandum, Spintop Ventures, Profounders and others since it was founded in 2013. The company reported $33 million of revenue for Empires & Puzzles, its most popular game, 10 months after its launch in 2017. Small Giant, which is also behind Alliance Wars and Season 2: Atlantis, says they exceeded 2017’s revenue just four months into 2018.

“Our studio was founded on the idea that small, skillful teams can accomplish giant things, and I am confident that partnering with Zynga is the right next step in our evolution,” Small Giant CEO Timo Soininen said in a statement. “We will now operate as a separate studio within Zynga, maintaining our identity, culture and creative independence. By leveraging the expertise and support from the wider Zynga team, we will amplify the reach of Empires & Puzzles and the new games in our development pipeline.”

Zynga, founded in 2007, is the developer of FarmVille, Zynga Poker, Words with Friends and several other mobile games. The company reported revenues of $248.88 million for the quarter ended September 2018, failing to meet analyst estimates.

Zynga expects to bring in $243 million in revenue in the fourth quarter of 2018.

India’s Hansel raises $4M to bring its app development platform to the US

Hansel, an India-based startup that enables more agile product development inside companies, has pulled in $4 million as it seeks to expand its business to the U.S..

The startup was founded in 2015 and it operates a real-time mobile app development platform that simplifies the process of product iteration inside companies. That’s to say that once a product is launched there’s a lot of work that is done to develop it, test new ideas and optimize but many companies overlook the process or lump it with the general engineering, which includes initial product development.

Hansel argues that product development and iteration are different, and its wider aim is to enable dedicated ‘product ops’ inside companies that until now never considered the process to be distinct from app development, or perhaps don’t have the budget.

“Product iteration is often neglected as people want to move to the next thing, but that means product building is only half done,” Varun Ramamurthy, CEO of Hansel, told TechCrunch in an interview. “We want to significantly accelerate product iteration and provide a platform for ‘product ops.'”

“Big firms like Facebook and Uber champion product ops teams inside their business but they have already built the infrastructure and have dedicated specialists. That allows them to move at breakneck on launched product and features, their competitive advantage is speed to market,” he added.

The Hansel ‘Lake’ platform is a single repository that decouples product development from the code itself, allowing teams to create a range of different experiences — iterations — that can be pushed out to different user segments. The company charges users based on end-user numbers, such as monthly active user bases,  but it also includes customized pricing for some premium features, too.

Ramamurthy is formerly of Zynga in the U.S. among other places, and he met his Hansel co-founders Mudit Krishna Mathur and Parminder Singh while the trio were at Flipkart, the Indian e-commerce giant.

“We got together at Flipkart and saw a huge difference in speed between Facebook, other top firms and the rest of the world,” Ramamurthy recalled. “When it comes to speed of personalization and iterations of product, the rest of the industry had a lot of catch up. We want to help separate iterations and personalization from general engineering… today it is all confused.”

Hansel founders Varun Ramamurthy, Parminder Singh and Mudit Krishna Mathur

The startup has focused on India to date where Ramamurthy said it has large mid-market companies and enterprises as clients, including Uber rival Ola, Paytm and Magicpin. That work has given the team of 23 people a good grounding on what to expect for clients, how to work with them and how to package its service, and now the next phase is to do more business in North America.

Hansel is using the new funding to open an office in the Bay Area, where it has recruited its first two hires to drive business development and sales. Ramamurthy himself plans to spend more time in the U.S. as part of the effort, which will also see a product marketing team hired Stateside. R&D and product development will remain anchored out of Hansel’s India office.

This new round takes Hansel to $5.4 million raised to date. Vertex led this Series A with participation from existing backers IDG Ventures India and Endiya Partners.

Mercari, Japan’s first unicorn, files to raise $1.1B in Tokyo IPO

Mercari, the eBay-like service that is Japanese first tech startup unicorn, has filed to go public in an IPO that could raise as much as $1.1 billion.

The company is scheduled to list on the Toyko Stock Exchange’s Mothers Market — a board for high-growth companies — on June 19.

The company reached the symbolic $1 billion valuation mark in 2016 when it raised a $75 million Series D. In doing so it became the first Japanese tech startup to become a pre-IPO unicorn. Earlier this year, that valuation jumped to $2 billion following a $47 million investment.

The five-year-old company operates an online ‘flea market’ that lets consumers sell unwanted goods with a focus on mobile.

Japan is its core market, but the company expanded into the U.S. in 2014 and last year it entered Europe, initially via the UK. It boosted its overseas strategy in June 2017 when it hired former Facebook executive John Lagerling as its first chief business officer to guide its global strategy.

The business passed 100 million downloads worldwide at the end of 2017. Mercari said that over 30 million downloads are in the U.S., with more than 60 million in Japan. Speaking earlier this year, CEO Shintaro Yamada — who sold his previous startup Unoh to gaming firm Zynga in 2010 — said success in the U.S. is essential if Mercari is to become an international player.

Reuters reports that Mercari’s forecasted share price of 2,200-2,700 JPY per share would see the company raise up to 117.6 billion JPY ($1.1 billion) at a total market cap of 365.4 billion JPY, $3.3 billion.

It’s common for Japanese startups to go public, but it traditionally tends to happen much earlier than in the U.S or other parts of the world. That’s often times down to investors — who seek to reduce the risk of their money not returning — and a relative lack of capital for startups, but Mercari has held out longer than most and that might set an example for future companies.

For another thing, the return on investment is impressive for many of Mercari’s backers, according to data from 500 Startups partner Yohei Sawayama — who tweeted out USD estimates for potential returns.