Morning Report: Another day, another billion or whatever for the ridesharing industry.
Seemingly days after our own Jason Rowley did yeoman’s work graphing the incestuous ties between the various ridesharing companies of the world, and about a month after these pages wondered if the world had lost its mind after totting up the huge sums deployed into the market niche, more dollars are raining from the sky onto the yet-nascent and still-quite-unprofitable industry.
How many billions does it take to make ridesharing work? The answer, as always, is more.
Today is no exception to that answer. To wit, here’s TechCrunch’s Jon Russell describing the $1.2 billion round that Go-Jek is close to closing. I’ve quoted at length here for a reason, so excuse the wall of text:
JD.com, the China-based e-commerce firm that rivals Alibaba, has agreed to join Go-Jek’s upcoming $1.2 billion round, a source with knowledge of discussions told TechCrunch. The news was first reported by The Information.
We reported on the upcoming round, which would value Go-Jek at $3 billion post-money, in May when sources told us that Tencent had formally agreed to lead the deal. It looks like it has taken slightly longer to pull things together than was anticipated at the time, but the addition of JD.com — a long-term Tencent partner, which is reportedly putting $100 million in — it is close to being finalized.
There’s a lot in that TechCrunch passage. Let’s go in order:
- JD.com, the noted Alibaba rival, are both investors in the odd government-forced China Unicom deal that brings private money into stumbling state-owned goliaths.
- Go-Jek needs $1.2 billion more. According to Crunchbase, the firm has already raised $1.75 billion. That makes this round a big deal when stacked next to the firm’s prior capital injections.
- Tencent is in the deal, because why not! Bear in mind that the biggest Asian tech players have been hyperactive in the investing space in the current cycle. Not that that is bad or odd — after all Alphabet has three venture arms, Microsoft finally decided to use its checkbook, and even smaller giants like Salesforce are active.
The sum, if closed, will bring Go-Jek to about $3 billion in invested capital. That number should blow your damn mind. It doesn’t because Softbank is out there partying like 22 year old me in Vegas, but that doesn’t meant that any of this is normal.
As we wrote in July:
[S]o much money is flowing into the ridesharing niche that we’ve become inured to it. We have stopped asking enough questions about the industry itself.
Bring on the correction.
From The Crunchbase Daily:
WeWork raises $4.4 billion
- Co-working space juggernaut WeWork just raised $4.4 billion in new investment from the SoftBank Vision Fund, which has been on an unprecedented funding spree in recent months. Out of the total investment, $3 billion will go to buying new and existing shares in the company, while $1.4 billion will go to three newly created companies managed by local WeWork teams in China, Japan, Korea and Southeast Asia.
Amazon finalizes Whole Foods purchase
- If you’re looking for a deal on an avocado, just wait till Monday. That’s when Amazon says it will close its purchase of Whole Foods, accompanied by price cuts on a number of best-selling items. Over time, Amazon says it plans to integrate its Prime program with Whole Foods, extending savings and in-store benefits to members.
VC doors open for real estate deals
- Home is where the funding is. Seed and early-stage investment in U.S. real estate startups rose sharply in recent quarters, even as overall activity at those stages declined, a Crunchbase News analysis finds. Investors say it’s a signal that the massive industry, long a tech laggard, is starting to catch up.
- For more stories, follow @crunchbasenews on Twitter and check us out on Facebook.
iStockPhoto / Leonardo Patrizi