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New investors , , and put money in the round in addition to existing backers , , and .

As part of the financing, BlackRock has taken a 鈥漵ignificant minority stake鈥� in iCapital Network, which will operate as an independent company, the company said. I was curious as to what it meant by that the company said it “has a broad based of strategic investors, rather than being backed by any one large investor.”

New York-based iCapital Network 鈥� which has developed a distribution, administration and workflow platform for high net-worth access to alternative assets 鈥� had previously only raised a total of $36.9 million in known funding since its 2013 inception, bringing its total raised to $183 million, according to 附近上门 . Previous backers include , , and , among others.

Major growth

The company has seen impressive growth, particularly in the last year. In 2019, iCapital said it upped the assets it services from $8 billion to $46.6 billion across more than 470 funds, 100,000 underlying accounts and 55 white label partnerships. Specifically, iCapital said it saw听$12.1 billion in organic platform growth as well as growth as a result of its strategic partnership acquisitions. In the first half of 2019, iCapital acquired the alternative investment feeder fund platforms of both and .听The company also expanded its senior leadership during the year, and added nearly 100 employees to bring its total headcount to 218.

In a statement, iCapital Network CEO said the raise is indicative of the fact that asset and wealth management industries 鈥渉ave embraced the need for an independent, automated, transparent approach to alternatives.鈥�

iCapital says it was founded with the goal of making high-quality alternative investments accessible to wealth advisors and their high-net-worth investors, and enabling fund managers to reach new sources of capital.听The firm鈥檚 flagship platform offers advisors and their high net worth clients access to a curated menu of private equity, hedge funds, and private credit investing opportunities “at lower minimums with a full suite of due diligence in a secure digital environment.”

Additionally, asset managers and banks leverage iCapital鈥檚 tech-enabled services to streamline and scale their private investments operational infrastructure by using white labels versions of its technology.

In other words, the platform is designed to streamline access, ease operational burdens and improve the user experience. Its target users range from advisors seeking to incorporate alternative investments in their clients鈥� portfolios to asset managers looking to scale their fundraising efforts to wealth management firms seeking a technology platform to enhance or replace existing systems.

The company says it currently has nearly 4,000 registered network members that include financial advisors, family offices and individual investors. iCapital also has 57 white label partnerships.

Expansion ahead

iCapital says it plans to use the new capital to enhance its platform technology and expand functionality. It also plans to diversify its investment offerings and global investors base. Additionally, the company intends to continue expanding globally across North America, Asia, Europe and the Middle East by increasing its partnerships with wealth management players.

In addition to the investment, Ping An and other investors have said they either plan to partner with or have already partnered with iCapital to leverage its proprietary technology. The goal is to use the technology to help manage the end-to-end operations of their private market activities.

, chairman and CEO of Ping An, said his firm is excited to partner with the iCapital team on its next stage of growth, as it sees 鈥渆normous opportunities to open up access to alternatives in Asia and beyond.鈥�

BlackRock COO said that as financial advisers explore the role alternatives can play in diversified portfolios, 鈥渋Capital鈥檚 leading open-architecture platform provides technology to streamline, automate and facilitate investments in private markets.鈥�

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(which has been ramping up its startup investment as of late) led the round, which also included participation from and along with existing backer , which used its pro rata, according to Flywire.

The new financing takes Flywire鈥檚 since its 2011 inception to $263.2 million, according to 附近上门 data.

Flywire also announced it has acquired , a developer of payments software for the health care industry that had raised $36.4 million in venture capital funding.

In a phone conversation with Flywire CEO , I learned more about what the company does and how much it鈥檚 grown. He was refreshingly transparent.

So, let鈥檚 get into the details.

More than software

Fundamentally, Flywire is a payments company but it has also built software to help process payments. (Which makes it both a SaaS operator and a transactions platform.) Its focus is on the education, health care and travel industry verticals.

鈥淎ll three are fraught with a lack of digitization, and are inherently complex with legacy systems involved,鈥� Massaro told 附近上门 News. 鈥淲e think these areas have been underserved.鈥�

To date Flywire says it has processed over $12 billion in total payments volume for over 2,000 clients around the world. Seven of the eight Ivy League schools use it to collect cross-border payments, for example. As do hundreds of hospitals, including the top four hospital systems in the United States. People going on exotic trips such as African safaris can use it during their travel.

鈥淲e don鈥檛 just deliver the software that helps around payments,鈥� Massaro said. 鈥淲e actually move the money.鈥� In fact, it claims to 鈥渕ove billions of dollars across 200+ countries and 150 currencies.鈥�

Flywire has two revenue streams. It makes SaaS revenue off the software it鈥檚 using to help clients such as , or . But the majority of its revenue is transaction-based.

Speaking of which, Flywire is a unicorn with 鈥渨ell over $100 million in revenue,鈥� according to Massaro. Despite being around for nine years, it鈥檚 still seeing nearly 40 percent revenue growth year over year, he said.

It also has 530 employees, which is 10 times the 50 it had just five years ago.

Massaro expects Flywire to return to profitability this year, and said the company has been 鈥渧ery capital efficient.鈥�

鈥淧rior to this round, we had $45 miillion in cash on the balance sheet, and now we have about $75 million to $80 million,鈥� he told me. 鈥淎nd we don鈥檛 expect to burn a lot this year.鈥�

Acquisition

In acquiring Simplee, Flywire picked up a competitor, sort of. Flywire has historically focused on the provider side, helping digitize their back offices. Simplee is focused more on the patient experience.

鈥淲e both help providers engage their patients digitally,鈥� Massaro said. 鈥淭hey can help explain the cost of patients鈥� medical care, and how much they owe insurance, in addition to helping them digitize payments.鈥�

With the buy, Flywire also expanded its geographical footprint, as Simplee has offices in Palo Alto and Tel Aviv. In addition to its Boston headquarters, Flywire has 10 offices, including locations in Europe and Asia.

Last year, the company expanded into Latin America and plans to continue that expansion geographically. It also plans to double down on all its verticals.

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The comes as the company closes a $1.75 billion credit line from and soon after WeWork appointed a new CEO, real estate executive Sandeep Mathrani.

As part of the 5-year plan, the company said it expects to post its first-ever quarter with $1 billion in revenue this year. In 2021, it鈥檚 aiming to be adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) positive, and in 2022 WeWork鈥檚 goal is to be free cash flow positive.

Put simply, free cash flow means a company is 鈥済enerating more cash than is used to run the business and reinvest to grow the business,鈥� according to .

When WeWork filed its S-1 document with the , it was clear the company was burning cash. You can read more about the state of WeWork鈥檚 finances when it filed to go public here. But the summary of its cash situation is that its operations were consuming a lot of cash ($198.7 million in H1 2019), and the company鈥檚 investing cash was even more negative ($2.36 billion in H1 2019).

Looking ahead, WeWork is also aiming for 1 million memberships in 2023, and having $1 billion of free cash flow in 2024. The company had more than 662,000 total memberships by the end of last year.

WeWork attempted to go public last fall but had to scrap its IPO after concerns came up about the company鈥檚 finances and corporate governance. Since then, its valuation plummeted, former CEO Adam Neumann stepped down (and was reportedly being paid well to do so, though the company鈥檚 chairman told Monday that the billion-dollar figure wasn鈥檛 true), and took control of the company.

It laid out a turnaround strategy, which included divesting acquired companies that weren鈥檛 part of WeWork鈥檚 鈥渃ore business.鈥�

WeWork had 739 locations as of the end of last year, in 140 cities and 37 countries, according to the company.

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The Nairobi, Kenya-based marketplace company has raised . Along with the equity financing, Twiga raised $6.2 million in debt financing.

So here鈥檚 why we care: We rarely dig into the VC space in Africa, let alone Kenya. Secondly, , Twiga鈥檚 Series B is history making on a couple counts.

What It Does

Founded in 2014, Twiga helps distribute Kenyan produce鈥攐nions, mangoes, avocados, and tons of other produce鈥攖o retailers. The produce goes to a collection center, then goes to a packhouse for distribution to various vendor shops. The company partners with over 8,000 vendors and claims that farmers receive payment in 24 hours.

Before a vendor can sell, a Twiga sales representative visits the farm to check it out. About 400 people work for the company, .

Kenya鈥檚 VC Space

, Twiga鈥檚 Series B is the biggest financing round raised by a Nairobi-based company in 2019, and the third largest round of all time for the city.

Beyond Goldman Sachs and TLcom, investors in Twiga include , , , , and more. A non-investing partner includes (USAID).

From here, we see that there鈥檚 a healthy show of United States investors interested in Nairobi-based companies. For example, is a global micro-seed fund based in Washington D.C., and , a Redwood City-based startup that has invested in companies like Digg, Meetup, and Anchor.

There鈥檚 also some local love, like , which describes itself as an impact-focused firm in Africa. Beyond Twiga, AHL has invested , such as , a food manufacturer in South Africa, and , a startup tackling the sustainably honey market.

And that鈥檚 not all. There were also checks from Switzerland and London, showing somewhat of a global interest.

I鈥檒l leave you with this. TLcom said that 鈥渋f Africa continues to generate companies of this caliber, more private capital will flow into the Continent and more entrepreneurs will be able to start and scale game-changing enterprises such as Twiga.鈥�

So while Twiga鈥檚 round is big for the country and the continent, investor attitude tells me that Twiga鈥檚 record might soon be (happily) beat.

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The Series B funding round was led by , Alphabet鈥檚 growth equity investment fund, and included participation from previous investors like and . The new round of funding brings Unqork鈥檚 total funding to more than , according to 附近上门 data.

Unqork helps businesses develop applications without using lines of code. It has a drag-and-drop interface to make building applications a faster, more efficient process. For example, one of the first solutions Unqork created for a financial services client was a robo-adviser for product selection for asset management.

Unqork counts companies like , , and among its customers. The company also recently won its first government contract and plans to expand into the real estate industry.

Unqork started with what CEO Gary Hoberman called some of the toughest, most regulated industries–financial services and insurance–as opposed to building its way up to the challenge. Financial services and insurance are also industries the Unqork executive team has experience in–Hoberman started his career in financial services and spent nearly 20 years in the industry before moving into the world of insurance, for example.

鈥淭he industries that we started with are those that not only we came from and we understand the pain points…it鈥檚 those that are still of highest manual operation. Thousands and thousands of people who do nothing but manual operation,鈥� Hoberman said.

Unqork can take over the mundane tasks and free up those technologists鈥� time so they can create value doing other things.

The company raised its $22 million in April. This year has been one of fast growth for the company, with Unqork growing its workforce from 30 employees at the beginning of the year to now more than 150. Turning to financial metrics, the company鈥檚 annual recurring revenue grew at 鈥渁 significant triple-digit rate鈥� over the past year.

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It鈥檚 a big round for sure. But what was even more noteworthy was who led the round. Acronis is just one of 58 known companies so far this year that have received venture funding from the global investment banking firm.

The Process

Before we get into specifics, allow me to tell how the idea for the story came about. We get a lot of pitches and press releases. In recent months, I noticed there was a large number of fundings that were either led by, or included participation from, Goldman Sachs. It felt like literally every time I opened my inbox there was mention of another deal funded by Goldman Sachs.

So I asked our data guru Jason Rowley to do some digging in the 附近上门 database. (I also reached out directly to Goldman Sachs but the firm declined to comment). And what he found was exactly what I expected: Goldman Sach鈥檚 pace of investing in startups has increased dramatically over the last couple of years.

You can see for yourself in this lovely chart he made below:

To further break it down, 附近上门 data shows that Goldman Sachs has invested in 20 companies so far in the third quarter. It backed 21 companies in Q2, and 17 in Q1. That鈥檚 a total of 58 venture investments this year so far.

That鈥檚 in line with how many companies the firm invested in during the first three quarters of 2018 (60). Overall, in 2018, Goldman Sachs backed 83 companies, according to 附近上门 data. That鈥檚 up significantly (53.7 percent to be exact) from the 54 it invested in in 2017. For context, it鈥檚 also sharply higher than the 37 companies Goldman put money in five years ago (in 2014), and the 10 it invested in a decade ago (2009).

Goldman is on track to match its record-setting 2018 in 2019, reaching what could be a new normal for a financial institution more associated with banking than venture investing.

Market Impact

Where is Goldman putting money to work? Some of its recent deals include Canadian cybersecurity startup (which we covered here);听 ; insurtech startup (which we reported on here), and (which we covered here).

It also put money in online mortgage lender this year.

I was curious as to what kind of value that having Goldman Sachs as an investor could bring. So I asked a few of these companies. Not surprisingly, they were quite positive in what they had to say.

, CEO and founder of Better.com, said Goldman Sachs actually invested in his company鈥檚 first round of financing in 2015.

The firm has helped Better.com create a profitable revenue stream that also allows it to deliver 鈥渢he most affordable rates to our customers,鈥� Garg said.

Goldman Sachs has also helped in 鈥渁ll aspects鈥� of Better.com鈥檚 growth and business strategy, he added, from building out its B2B platform and helping build trust and credibility with its customers.

, CEO of new portfolio company , considers Goldman Sachs to be a 鈥渉ighly sought-after investor鈥� that has 鈥渁 long history of exceptional institutional experience combined with sophisticated technological abilities.鈥�

, CEO and co-founder of (which Goldman Sachs invested in last year), said having the firm as an investor has given his company a 鈥渧ote of confidence鈥� in its strategy and what it鈥檚 accomplished to date. Further, he sees its involvement as an investor opening the door 鈥渢o several opportunities going forward.鈥�

鈥淭hey are a company with a proven track record of investing in growth-stage companies and providing the support needed to get them to a billion-dollar valuation and we truly believe we’re well on our way,鈥� he wrote via email. 鈥淕oldman Sachs has helped us increase our global presence, expand our global footprint and provided us with the resources needed to disrupt a crowded marketplace by improving and expanding on our product.鈥�

A recent Bloomberg editorial written by (who used to work for Goldman Sachs) surmised that the investment banking firm wants 鈥渢o be cool again.鈥� I鈥檓 not sure I can speak to that necessarily, but the firm clearly wants to be a big player in the venture world. Whether it makes the mark will be determined by its returns.

More in five years, then.

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The Series C round, which was led by , brings Trulioo鈥檚 total funding to, according to 附近上门.

Trulioo, which was founded in 2011, allows companies and organizations to run global identity checks. The company, which currently has about 130 employees, plans to hire an additional 70 people by the end of the year and 鈥渙rganically scale,鈥� Trulioo CEO said in an interview.

Digital identity verification is a way to bring opportunity in modern economies to people who aren鈥檛 able to migrate to other countries, Ufford said.

鈥淲ith trust comes opportunity and with opportunity comes economic gain, and economic gain is what鈥檚 lining those people up at the borders,鈥� Ufford said.

About half of the new cash will be invested in product and technology, and the other half will go toward growing the sales teams. With global identity verification, the two major areas of investment are in raw data and the software stack, Ufford said. Trulioo needs to acquire more data faster and in more countries and then have the flexible software to process it.

The company raised its first seed round in 2011 and raised its $6 million Series A in March 2014, with as the lead investor. Trulioo has been profitable for several years, Ufford said.

The Series C round also includes investment from , and , according to a statement from the company.

鈥淎s we transition to a digital economy, Trulioo stands to support all the types of identity verification that global businesses need today,鈥� Matt Carbonara, Citi Ventures鈥� managing director of venture investing, said in a statement. 鈥淎t Citi Ventures, we鈥檙e excited to invest in Trulioo鈥檚 Series C because its platform is well-positioned to scale with the changes in global identity verification with trust, privacy and inclusion.鈥�

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The round is notable in that it marks both Goldman Sachs PSI (the investment firm鈥檚 tech-focused group) and Point72鈥檚 鈥渇irst foray into the Mexican market,鈥� according to by Credijusto.

Founded in 2015, the company provides asset-backed loans and equipment leases to small and medium-sized enterprises (SMEs). Credijusto has 200 employees. Since its inception, the startup said it has launched several financial products 鈥渁nd originated over $90 million in term loans and leases.鈥�

With this round, Credijusto has raised a total of $153 million in venture and debt equity. Credijusto brought in $11 million in a May 2018 that was led by (which we reported yesterday just raised two funds totaling $600 million). It also closed on of up to $100 million from Goldman Sachs in March.

, , and , as well as existing investors Kaszek Ventures, , , John J. Mackand and also participated in the latest round.

For Credijusto, its offering is in demand in Mexico in particular because it said (citing 鈥渙fficial data鈥�) that SMEs make up 99 percent of businesses and account for 74 percent of total employment in the country.

Despite being so dominant, 鈥渢hese companies receive only 15% of total outstanding credit, as banks reject over 80% of all loan applications from SMEs,鈥� the company said.

, a partner at Point72 Ventures, said Credijusto’s 鈥渢ech-enabled approach to meeting the financial needs of Mexico’s underserved SME segment has huge potential.鈥�

鈥淭his is a very large market opportunity in which, after four years of rapid growth, the company has significant competitive advantages,” he added.

Kaszek Managing Partner , who sits on Credijusto鈥檚 board, told me via email this morning that his firm participated “with more than” its pro rata in this new round after leading the company’s Series A.

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and the out of China led the round, which also included participation from existing backers , and . As part of the financing, , vice president of Goldman Sachs鈥� principal strategic investments group, will be joining H2O.ai鈥檚 board.

The round brings H2O.ai鈥檚 since it was founded in 2012 to nearly $147 million. Wells Fargo and led its in November 2017.

I hopped on the phone this morning with , CEO and founder of H2O.ai, and he told me that by democratization, his company aims to make it 鈥渇aster, cheaper and easier鈥� for businesses to use AI.

鈥淩ight now it鈥檚 too expensive and difficult because of the talent, time and resources one needs to try AI and to make it work,鈥� he said. 鈥淚mplementation costs are so expensive for SMBs and large businesses alike. Our goal is to make it really easy to power businesses with AI by essentially making it automatic to the extent that is possible.鈥�

It鈥檚 doing that with its automatic machine learning platform, H2O Driverless AI, which Ambati said has tripled H2O.ai鈥檚 customer base 鈥渨ith expansion across every industry on every continent鈥� since that last round. By using H2O.ai, hundreds of customers such as Aetna, Booking.com, Walgreens, and Capital One 鈥渁re becoming AI companies..and leading AI transformations in their respective verticals,鈥� the startup claims.

For Ambati, the fact that its own customers have led its last two funding rounds is a testament to open source company鈥檚 value.

鈥淲e are making them the true AI superpowers,鈥� he added. 鈥淲e want to empower businesses and organizations to monetize their data and build their own AI to take on the tech giants such as Amazon, Google and Microsoft that are coming into their spaces.鈥�

H2O.ai is seeing a huge following in the retail sector, for example, because so many retailers are trying to compete with 鈥渢he onslaught of the online giants,鈥� Ambati said.

The Mountain View-based company鈥檚 ARR (annual recurring revenue) is growing in line with its customer base. ARR has tripled over the last two years, according to Ambati. Meanwhile, employee headcount is 175, about double what it was 18 months ago. H2O.ai recently opened a Center for AI Excellence and Research in Prague, Czech Republic as well as offices in India and Canada.

H2O.ai said it plans to use the new capital 鈥渢o accelerate innovation and expand sales and marketing globally.鈥�

The company also notes that it supports an organization called AI4Good, which focuses on wildlife and water conservation. It also has made its technology free to academics, so currently, hundreds of students, researchers and universities are using it.

Investors

The company鈥檚 investors are naturally bullish on H2O.ai鈥檚 offering. Goldman Sach鈥檚 Mandel said the company’s 鈥渄eep technical bench and customer centricity make them well positioned to bring transparency and efficiency to the world of prediction.鈥�

Meanwhile, , managing director of strategic investments at Well Fargo, said the bank is impressed with H2O.ai鈥檚 ability to apply AI to help provide 鈥渋nsightful and personalized client experiences.鈥�

, managing director and COO of the Ping An Global Voyager Fund, said that his firm likes the 鈥渃ombination of technical sophistication and ease of use present in all of H2O.ai鈥檚 offerings.鈥� The firm plans to help the company expand its footprint in China and across Asia.

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After indicating that the could be only the first of similar capital vehicles, it seems that dream of having more than one enormous investment fund is inching closer to reality. News had swirled that SoftBank was struggling to raise the money it needed to fill the coffers of a new Vision Fund, a tall challenge after the first installment raised around $100 billion over time.

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According , the investor list for what we’ve decided to call the Vision Fund II, include SoftBank itself (), (an active investor in its own right), and , which is a slightly odd cookie in the mix.

Microsoft has a somewhat atypical history as an investor, or, as an LP if it invests in Vision Fund II. Recall that Microsoft’s early venture efforts included , which later molted into a . Now Microsoft’s cuts checks, though it did take a while to get to the decision of taking equity stakes in smaller companies.

(Back in my Microsoft-covering days, Microsoft’s lack of venture activity was explained by Redmond staffers as an acknowledgment of the fact that VC deals wouldn’t impact its balance sheet in a material way.)

To see Microsoft written down as a potential LP for the new Vision Fund is notable. After all, Microsoft . Since then it’s been at war with the smaller company through its competing Teams product. In the meantime, the first Vision Fund invested in Slack, which is now a public company.

It feels gently odd to see Microsoft commit some billions of dollars to a vehicle so that it can get micro-stakes in certain businesses that it wouldn’t buy outright; I understand Microsoft investing on its own to purchase minority stakes as it can learn from those companies, and could secure board seats. An LP relationship is different, more remote.

There’s one final wrinkle to the possible deal that we should raise that could help us understand Microsoft’s interest. Here’s :

SoftBank executives told Microsoft they would encourage the fund鈥檚 roughly 75 companies to shift from听听Inc.鈥檚 cloud platform to Microsoft鈥檚, some of the people said. A Microsoft spokesman declined to comment.

Perhaps SoftBank could convince a minority of its investees to spend a minority of their marginal cloud spend on Azure, but I can’t imagine any company of scale switching clouds so that one of their investors could possibly raise funds from a particular LP. ( recently , showing that Microsoft’s Azure isn’t doing well among the user cohort, as a data point.)

So we’ll see. But Microsoft has its own venture arm, global operations, and checkbook for buys. What it gets out of being a Vision Fund II LP isn’t as clear as, say, what gets out of the deal; for the latter, petroleum incomes can be recycled through the Vision Fund, allowing the monarchy to reap returns on the liquid capital that supports .

Regardless, the Vision Fund II is being actively compiled. And if it does find enough capital to launch, we won’t have to wonder anymore what the world will be like without the Vision Fund’s epic checks.

PS. What I can’t get away from when considering a second Vision Fund is that it will push more capital into private companies, allowing them to hold off public offerings even longer. This, as even WeWork is racing to get public before the good times on the public markets end. Either SoftBank is right, to some degree, or WeWork is. That SoftBank owns bunches of WeWork makes for a slightly ironic moment. Surely it would be better to get some more unicorns public instead of doubling-down on crowning more startups with billion-dollar checks?

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