Grab invests $100M into India’s OYO to expand its budget hotel service in Southeast Asia

Southeast Asian ride-hailing firm Grab has made its most ambitious investment to date after it backed India-headquartered budget hotel network OYO to the tune of $100 million. The investment was part of a $1 billion Series E round led by SoftBank’s Vision Fund that closed back in September.

The deal was first made public via a regulatory filing in India, as Economic Times reported.

“We can confirm the investment into OYO,” a Grab spokesperson told TechCrunch.

Grab has done a handful of strategic deals thus far, including investments in bike-sharing startup oBike and grocery delivery service HappyFresh, but those have been far smaller and local to Southeast Asia. Its highest acquisition to date is around $100 million for Indonesia-based offline payment network Kudo some 18 months ago.

The deal with OYO is not only far higher but also outside of its immediate home turf, which spans eight countries in Southeast Asia. OYO’s business is heavily focused on India and China, but the company is also active in Nepal, Malaysia and, most recently, the UK. That Series E deal was aimed at funding international growth and it looks like Grab will work closely with the company to help expand its presence in Southeast Asia, a region with over 650 million consumers and a fast growing digital economy.

A source with knowledge of discussions told TechCrunch that Grab was primarily motivated to partner with OYO for its potential to boost its GrabPay service. The core idea here is that GrabPay could become the preferred payment method for OYO in Southeast Asia, thereby boosting Grab’s ambition of dominating the region’s mobile payment space.

OYO claims to have over 10,000 franchised or leased hotels in its network which it says spans 350 cities across five countries, although most of that is concentrated on India and China. In the latter country, OYO says it offers 87,000 rooms in 171 cities after launching in the country in June 2018.

Southeast Asia, where OYO is already present via Malaysia, is an obvious next step and Grab could also give it a helpful boost to reaching customers by including its service on its in-app platform. Months after a deal to buy Uber’s local business in exchange for a 27.5 percent equity stake, Grab unveiled a ‘platform’ designed to aggregate services in the region to give its audience of over 110 million registered users visibility of services that they may like. That, in turn, can help companies tap into the Grab userbase, although some users have complained that Grab’s app is increasingly ‘cluttered’ with additional services and information beyond basic transportation.

Grab has already partnered with travel giant Booking — which recently invested $200 million in its business — to offer deals to its users, and it is quite conceivable that it could do the same with OYO to help the Indian firm’s efforts in Southeast Asia.

The $11 billion-valued ride-hailing firm isn’t short of cash — having raised over $3 billion this year — so it can afford to make the occasional splashy investment. However, it might need a budget reallocation. That’s because Indonesian rival Go-Jek’s continued Southeast Asia expansion is threatening to reignite a subsidiary war that Grab probably thought it had won for good after Uber’s exit. It’ll be interesting to watch how that competition weighs in Grab’s overall effort to go from ride-hailing into the ‘super app’ space, covering payments, local services and more.

Contentful raises $33.5M for its headless CMS platform

Contentful, a Berlin- and San Francisco-based startup that provides content management infrastructure for companies like Spotify, Nike, Lyft and others, today announced that it has raised a $33.5 million Series D funding round led by Sapphire Ventures, with participation from OMERS Ventures and Salesforce Ventures, as well as existing investors General Catalyst, Benchmark, Balderton Capital and Hercules. In total, the company has now raised $78.3 million.

It’s been less than a year since the company raised its Series C round and, as Contentful co-founder and CEO Sascha Konietzke told me, the company didn’t really need to raise right now. “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now,” said Konietzke. “But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge. And at the same time, we already had some interesting conversations ongoing with Sapphire [formerly SAP Ventures] and Salesforce. So we saw the opportunity to add more funding and also start getting into a tight relationship with both of these players.”

The original plan for Contentful was to focus almost explicitly on mobile. As it turns out, though, the company’s customers also wanted to use the service to handle its web-based applications and these days, Contentful happily supports both. “What we’re seeing is that everything is becoming an application,” he told me. “We started with native mobile application, but even the websites nowadays are often an application.”

In its early days, Contentful focused only on developers. Now, however, that’s changing, and having these connections to large enterprise players like SAP and Salesforce surely isn’t going to hurt the company as it looks to bring on larger enterprise accounts.

Currently, the company’s focus is very much on Europe and North America, which account for about 80 percent of its customers. For now, Contentful plans to continue to focus on these regions, though it obviously supports customers anywhere in the world.

Contentful only exists as a hosted platform. As of now, the company doesn’t have any plans for offering a self-hosted version, though Konietzke noted that he does occasionally get requests for this.

What the company is planning to do in the near future, though, is to enable more integrations with existing enterprise tools. “Customers are asking for deeper integrations into their enterprise stack,” Konietzke said. “And that’s what we’re beginning to focus on and where we’re building a lot of capabilities around that.” In addition, support for GraphQL and an expanded rich text editing experience is coming up. The company also recently launched a new editing experience.

Contentful, a Stripe for content management, raises $28M led by General Catalyst

Tencent Music moving ahead with its $1.2B U.S. stock market debut

Tencent Music Entertainment’s initial public offering is back in motion, two months after the company reportedly postponed it amid a global selloff. In a regulatory filing today, the company, China’s largest streaming music service, said it plans to offer 82 million American depositary shares (ADS), representing 164 million Class A ordinary shares, for between $13 to $15 each. That means the IPO will potentially raise up to $1.23 billion.

The company is offering 41.03 million ADS, while selling shareholders will offer the remaining 40.97 million ADS. It will list on the New York Stock Exchange under the ticker symbol TME. According to the filing, Tencent Music’s controlling shareholder, Tencent Holdings, has agreed to buy Class A ordinary shares valued at up to $32 million.

With about 800 million monthly active users, Tencent Music is not only China’s largest online music entertainment platform, but one of the biggest in the world. To put that number in context, Spotify, one of Tencent Music’s shareholders and strategic partners, currently has 170 million monthly active users.

Tencent Music first filed for its stock market debut at the beginning of October, but then the WSJ reported that it had halted its IPO plans because of a selloff in global markets that hit Chinese markets particularly hard. The stock market is currently rallying, however, thanks to a truce in the U.S.-China trade war.

The offering’s lead underwriters are Morgan Stanley, Goldman Sachs, J.P. Morgan, Deutsche Bank Securities, and Bank of America Merrill Lynch.

Bunch scores $3.8M to turn mobile games into video chat LAN parties

The best parts of gaming are the jokes and trash talk with friends. Whether it was four-player Goldeneye or linking up PCs for Quake battles in the basement, the social element keeps video games exciting. Yet on mobile we’ve lost a lot of that, playing silently by ourselves even if we’re in a squad with friends somewhere else. Bunch wants to bring the laughter back to mobile gaming by letting you sync up with friends and video chat while you play. It already works with hits like Fortnite and Roblox, and developers of titles like Spaceteam are integrating Bunch’s SDK to inspire longer game sessions.

Bunch is like Discord for mobile, and the chance to challenge that gaming social network unicorn has attracted a $3.8 million seed round led by London Venture Partners and joined by Founders Fund, Betaworks, North Zone, Streamlined Ventures, 500 Startups and more. With Bunch already cracking the top 100 social iOS app chart, it’s planning a launch on Android. The cash will go to adding features like meeting new people to game with or sharing replays, plus ramping up user acquisition and developer partnerships.

“I and my co-founders grew up with LAN parties, playing games like Starcraft and Counter Strike – where a lot of the fun is the live banter you have with friends” Bunch co-founder and CEO Selcuk Atli tells me. “We wanted to bring this kind of experience to mobile; where players could play with friends anytime anywhere.” 

Bunch Team

Atli was a venture partner at 500 Startups after co-founding and selling two adtech companies: Manifest Commerce to Rakuten, and Boostable to Metric Collective. But before he got into startups, he co-founded a gaming magazine called Aftercala in Turkey at age 12, editing writers twice his age because “on the internet, nobody knows you’re a dog” he tells me. Atli teamed up with Google senior mobile developer Jason Liang and a senior developer from startups like MUSE and Mox named Jordan Howlett to create Bunch.

Over a year ago, we built our first prototype. The moment we tried it ourselves, we saw it was nothing like what we’ve experienced on our phones before” Atli tells me. The team raised a $500,000 pre-seed round and launched its app in March. “Popular mobile games are becoming live, and live games are coming to mobile devices” says David Lau-Kee, general partner at London Venture Partners. “With this massive shift happening, players need better experiences to connect with friends and play together.”

When you log on to Bunch’s iOS app you’ll see which friends are online and what they’re playing, plus a selection of games you can fire up. Bunch overlays group voice or video chat on the screen so you can strategize or satirize with up to eight pals. And if developers build in Bunch’s SDK, they can do more advanced things with video chat like pinning friends’ faces to their in-game characters. It’s a bit like OpenFeint or iOS Game Center mixed with HouseParty.

For now Bunch isn’t monetizing as it hopes to reach massive scale first, but Atli thinks they could sell expression tools like emotes, voice and video filters, and more. Growing large will require beating Discord at its own game. The social giant now has over 130 million users across PCs, consoles, and mobile. But it’s also a bit too hardcore for some of today’s casual mobile gamers, requiring you to configure your own servers. “I find that execution speed will be most critical for our success or failure” Atli says. Bunch’s sole focus on making mobile game chat as easy as possible could win it a mainstream audience seduced by Fortnite, HQ Trivia and other phenomena.

Research increasingly shows that online experiences can be isolating, and gaming is a big culprit. Hours spent playing alone can leave you feeling more exhausted than fulfilled. But through video chat, gaming can transcend the digital and become a new way to make memories with friends no matter where they are.

Another crypto exchange goes old school as KuCoin raises $20M from VCs

I’ve said it before but I’ll say it again: one of the biggest trends in crypto this year is companies raising money the old fashioned way through venture capitalists.

Hot on the heels of Binance raising money from Singapore’s Vertex Ventures, so KuCoin, a relatively new crypto exchange, has pulled in $20 million. The money comes from two big name investors — IDG Capital and Matrix Partners — and the venture capital arm of Chinese crypto organization Neo, and it’ll be used to expand KuCoin’s global reach, develop technology and launch an investment arm of its own.

We’ve confirmed that the deal is based on equity not a sale of tokens as is often the case with crypto investments.

Binance took its investment as part of its plan to introduce a fiat currency exchange in Singapore, and likewise KuCoin — which relocated from Hong Kong to Singapore this year — is turning to investors to help advance its business by tapping into networks and connections.

The deal will “open new doors” for the company, KuCoin CEO Michael Gan told TechCrunch in an interview.

KuCoin started trading in September 2017 following an ICO that raised 5,500 Bitcoin, then worth around $27.5 million. Still, the company is unlikely to be short of money. The exchange business is the most lucrative perch in the crypto space and while it hasn’t reached the size of Binance, KuCoin is ranked as the 49th largest exchange according to Coinmarketcap.com, which puts its daily trading at around $25 million.

Gan — who previously spent time with Alibaba’s Ant Financial affiliate — said that the capital will go towards hiring, both on new developers and doubling its 50-person support team. In particular, KuCoin is developing features for serious traders, including faster transactions, stop-loss features and more.

Decentralized exchanges — which remove the middleman to connect buyer and seller directly — are the big buzzword right now in the exchange world with figures like Binance making progress on offerings. Gan said that KuCoin will need “a little more time” to develop its ‘Dex.’ He declined to provide a timeframe. KuCoin, he explained, is focused on ensuring that it will offer a quality user experience and on a stable platform.

Elsewhere, the firm said it plans to offer its service in more languages. It claims that it is working closely with regulators in Europe to gain a license to offer its services in the region, although the company did not comment on whether it plans to adhere to regulations in New York where authorities are investigating a number of other exchanges for doing business unlawfully.

First up, KuCoin aims to launch ‘communities’ in Vietnam, Turkey, Italy, Russia and Spanish-speaking countries before the end of this year using online marketing and ads. It aims to grow its reach to 10 markets within the next six months while it is doubling down on in-house research to identify promising projects.

Linked to that last point, KuCoin is also getting into the investment game.

As I wrote earlier this year, cash-rich crypto companies are turning provider with investments in smaller organizations to build out platforms, establish relationships and more. Binance is perhaps the most notable mover — with a fund that it claims is worth $1 billion and an ambitious early-stage accelerator program. Gan confirmed the plan to launch a “VC arm” but he declined to detail its size or investment strategy at this point.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life

WeWork picks up ANOTHER $3B from SoftBank

WeWork has picked up another $3 billion in financing from SoftBank Corp, not to be confused with SoftBank Vision Fund. The deal comes in the form of a warrant, allowing SoftBank to pay $3 billion for the opportunity to buy shares before September 2019 at a price of $110 or higher, ultimately valuing WeWork at $42 billion minimum.

In August, SoftBank Corp invested $1 billion in WeWork in the form of a convertible note.

According to the Financial Times, SoftBank will pay WeWork $1.5 billion on January 15, 2019 and another $1.5 billion on April 15.

SoftBank is far and away WeWork’s biggest investor, with SoftBank Vision Fund having poured $4.4 billion into the company just last year.

The real estate play out of WeWork is just one facet of the company’s strategy.

More than physical land, WeWork wants to be the central connective tissue for work in general. The company often strikes deals with major service providers at “whole sale” prices by negotiating on behalf of its 300,000 members. Plus, WeWork has developed enterprise products for large corporations, such as Microsoft, who tend to sign longer, more lucrative leases. In fact, these types of deals make up 29 percent of WeWork’s revenue.

The biggest issue is whether or not WeWork can sustain its outrageous growth, which seems to have been the key to its soaring valuation. After all, WeWork hasn’t yet achieved profitability.

Can the vision become a reality? SoftBank seems willing to bet on it.

Vista snaps up Apptio for $1.94B, as enterprise companies remain hot

It seems that Sunday has become a popular day to announce large deals involving enterprise companies. IBM announced the $34 billion Red Hat deal two weeks ago. SAP announced its intent to buy Qualtrics for $8 billion last night, and Vista Equity Partners got into the act too, announcing a deal to buy Apptio for $1.94 billion, representing a 53 percent premium for stockholders.

Vista paid $38 per share for Apptio, a Seattle company that helps companies manage and understand their cloud spending inside a hybrid IT environment that has assets on-prem and in the cloud. The company was founded in 2007 right as the cloud was beginning to take off, and grew as the cloud did. It recognized that companies would have trouble understanding their cloud assets along side on-prem ones. It turned out to be a company in the right place at the right time with the right idea.

Investors like Andreessen Horowitz, Greylock and Madrona certainly liked the concept, showering the company with $261 million before it went public in 2016. The stock price has been up and down since, peaking in August at $41.23 a share before dropping down to $24.85 on Friday. The $38 a share Vista paid comes close to the high water mark for the stock.

Stock Chart: Google

Sunny Gupta, co-founder and CEO at Apptio liked the idea of giving his shareholders a good return while providing a good landing spot to take his company private. Vista has a reputation for continuing to invest in the companies it acquires and that prospect clearly excited him. “Vista’s investment and deep expertise in growing world-class SaaS businesses and the flexibility we will have as a private company will help us accelerate our growth…,” Gupta said in a statement.

The deal was approved by Apptio’s board of directors, which will recommend shareholders accept it. With such a high premium, it’s hard to imagine them turning it down. If it passes all of the regulatory hurdles, the acquisition is expected to close in Q1 2019.

It’s worth noting that the company has a 30-day “go shop” provision, which would allow it to look for a better price. Given how hot the enterprise market is right now and how popular hybrid cloud tools are, it is possible it could find another buyer, but it could be hard to find one willing to pay such a high premium.

Vista clearly likes to buy enterprise tech companies having snagged Ping Identity for $600 million and Marketo for $1.8 billion in 2016. It grabbed Jamf, an Apple enterprise device management company and Datto, a disaster recovery company last year. It turned Marketo around for $4.75 billion in a deal with Adobe just two months ago.

Nested, the online estate agent that makes home sellers ‘chain-free’, raises further £120M

Nested, the London-based “data-driven” estate agency that provides a cash advance to help you buy a new home before you’ve sold your old one, has raised a further £120 million in funding. The new round is a mixture of equity and debt: £20 million and £100 million, respectively. Leading the equity round is Northzone, and Balderton Capital, while the debt finance comes from an unnamed institutional investor.

It is noteworthy that Balderton has only just invested in Nested several rounds into the company’s existence, considering that the London-based venture capital firm typically invests earlier at Series A. Balderton is also a backer of GoCardless, the payments company previously co-founded by Nested founder Matt Robinson. That said, Balderton General Partner Tim Bunting did invest in Nested in a personal capacity very early on.

Launched in late 2016, Nested competes with high-end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will loan you up to 95 per cent of the market value of your property as a cash advance, that way you’re able to purchase a new home prior to your old one selling. Before Brexit and the uncertainty it has caused with regards to London house prices, that figure was up to 97 percent of the market value of the property, and I understand Nested hopes to return to that percentage once things settle down.

More broadly, the idea behind Nested is to eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, and also ensure that you’re never caught up in the dreaded property ‘chain’ and miss out on your desired home, or are kept in limbo indefinitely waiting for your property to sell. By becoming a cash buyer, it also puts you in the strongest possible position to negotiate on your onward purchase. Robinson says this typically sees savings of 2-4 percent.

In return, Nested charges a fee from 2-4 per cent (plus VAT) depending on how soon you want to receive the advance, and takes a loss if it fails to sell the property for an amount above its initial advance. The idea is to incentivise the startup to always try to get you the genuine market price or more.

TechCrunch’s Steve O’Hear giving Nested’s Matt Robinson (pictured right) a hard time at Startup Grind London earlier this year.

Asked how well that is working out so far, Robinson tells me historical valuation accuracy is on average within 1.5 percent of what the company predicted. Better still, Nested is running at 100 percent accuracy for 2018 and is confident enough to make this data public.

“The traditional agents don’t even track it and the online players do their best to obscure the fact that they sell only roughly 4/10th of properties they take on i.e. most customers pay them £1,000 up-front to not sell their house and are left out-of-pocket!” says the Nested founder.

To date, Nested has helped over 400 home-owners, and, aside from increasing volume, including helping property owners outside of London, the company says it plans to further expand its product offering. The bulk of these new products will continue to target sellers to “radically improve the selling experience”. However, I understand that since sellers are buyers, too, future services could also include using Nested’s data, tech and expertise to help with the buying process as well.

Adds Robinson in a statement: “We’re excited to receive the backing from some of Europe’s top VCs who share our vision for fixing the age-old problem of buying and selling homes. We are building an incredible team to offer an unassailable service with the most progressive technology in the property industry. This investment will allow us to continue solving the problems that prevent people from moving home with ease”.

SoftBank’s debt, Ford buys Spin, and Chinese coffee is huge money

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week was a blast. Connie and I were in the studio with our guest, True Ventures’s Tony Conrad, while Danny repped the other side of the country, dialing in from New York.

It was another week shaped by news from Asia. Once we had sorted the sartorially expedient, we first turned to the world of SoftBank, this time taking a close look at its debt load. While SoftBank is currently famous for its investments through its Vision Fund, the company is picking up some notable, debt-powered investments into its vehicle that could add to its risk profile.

After all, who doesn’t want more risk as 2018 comes to a close?

Moving on, Ford is doubling-down on its wager that mobility means more than cars, this time picking up Spin for some sum of money between $40 and $100 million, with most figures coming in a bit light from the nine-figure range.

We care as it’s a fresh turn in the scooter skirmish, not to mention the greater micromobility wars. Bird and Lime have a new competitor that has, possibly, super-deep pockets.

Next, we took a peek at Luckin Coffe’s meteoric rise. This is where our guest selection really showed off; Conrad is a former investor in Blue Bottle, making him a functional caffeine expert. We dug through margins, growth, and why venture players are interested in Luckin at all.

And finally, a look at how recently-public companies are selling more shares after their initial debut. So, when it comes to money on the table, don’t fret it too much.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Pocket Casts, Downcast and all the casts.

Bonobo AI raises $4.5M seed round to help companies turn interactions with customers into valuable data

Bonobo AI, an AI-based platform that helps companies get insights from customer support calls, texts, and other interactions, announced today that it has raised $4.5 million in seed funding led by G20 Ventures and Capri Ventures. Founded in 2016 and led by co-founder and CEO Efrat Rapoport, the Tel Aviv-based startup claims that its technology has been used to analyze more than a billion interactions so far and that it has signed up a “few dozen” clients including DreamCloud and Honeybook.

The idea behind Bonobo is that even though customer service texts and voice calls can provide companies with a trove of valuable information, these data points are difficult to aggregate and analyze at scale. Bonobo’s technology integrates into the platforms that its clients use to communicate with customers, like Gmail, Zendesk, or Twilio) and CRM platforms like Salesforce or Hubspot. Then it analyzes interactions for “events of interest in calls,” Rapoport told TechCrunch, like “when customers ask for a discount, complain, ask for a missing feature, become dissatisfied, etc.”

There are two main types of issues that Bonobo helps its clients with. One is opportunity detection, or identifying things that can either help the closing of a sale, like features that have proven popular among past buyers, or hinder it, such as customer questions that aren’t satisfactorily answered. By doing so, Bonobo is also able to help clients create very targeted marketing campaigns. For example, instead of sending marketing material all customers who need to renew their subscriptions, Rapoport says Bonobo’s clients can create campaigns to help retain customers who need to renew their subscriptions but have complained about the price being too high or missing a feature.

Another example of how Bonobo can increase conversion rates is predicting customer cancellations and other potentially costly issues. For example, one vehicle repair company was losing millions of dollars due to cancelled jobs. Bonobo helped it identify factors associated with a higher likelihood of cancellations during customer interactions with the company’s representatives, which helped it retain thousands of customers.

The second is risk detection. For example, Bonobo detects if a customer starts mentioning a competitor, threatens to post their complaint on social media, or brings up problems that are a legal or compliance risk. Rapoport says that Bonobo’s technology can identify specific segments in conversations, so companies can review it directly from Bonobo’s dashboard without having to perform a time-consuming search.

Rapoport says that she and her co-founders (CTO Idan Tsitiat, COO Barak Goldstein, and VP of research and development Ohad Hen) began working on Bonobo after they realized that while there are many tools from companies like Tableau, Oracle, Microsoft, SAP, and Salesforce for gathering insights from structured data (like customer behavior on websites), very few exist for analyzing unstructured data, including conversational data, at scale. “It’s easy to measure how many people go to their cart but then change their mind and exit, but how do you do the same on thousands of customers calls? How do you know what’s the reason customers change their minds?” says Rapoport. “That’s the gap we are filling.”