#16/2020

“I have a theory that things work out in the end, and that if things aren’t working out, it’s not the end.”

Deals

Swedish startup Bokio bags €7.4 million and merges with Stockholm-based competitor Red Flag (tech.eu)
  • AI-based accounting tool for small businesses and freelancers, has raised €7.4 million in funding from existing investors and merged with Stockholm-based competitor Red Flag.
  • Two companies will merge all assets, people and customer contracts, creating a team of 80 and a combined user base of 80,000 across Sweden and the UK.
  • Opinion: This is quite a small investment round if we take into account €3.1M raised in seed in 2017 from Creandum and then €4M in Series A in 2019.

Opera Event closes $5M Series A for its esports-focused influencer platform (techcrunch.com)
  • Opera Event sits between the team, its community and capital sources (brands), helping make everything click.
  • Opera Event wants to add more niches to its stable. Its founder mentioned yoga as an example. Where there are influencers big and small, the startup wants to show up and help facilitate influencer commerce and collaboration.
  • Opinion: This is a great company as I believe it combines two industries which currently have a great potential.

News

Venture Capitalist Bill Gurley Isn’t Joining Benchmark’s Next Fund (wsj.com)
  • Benchmark  — which has always run a fairly small operation — has routinely groomed new investors as veterans of the firm have moved on. When Benchmark raised its last fund — another $425 million vehicle in 2018 — it parted ways with Mitch Lasky and Matt Cohler, who’d joined the firm in 2007 and 2008, respectively.
  • Except investing Gurley is famous for ouster of Uber CEO Travis Kalanick in 2017.

Inovo Venture Partners, a Polish venture capital firm focused on Central and Eastern Europe investments, raised €40m for its second fund (finsmes.com)
  • Specializes in identifying disruptive tech startups and bootstrapping their development through participation in late seed and Series A rounds. In total, 15 companies were beneficiaries of its maiden fund, of whom five have since been sold profitably, two have IPO’d, and three remain active. 
  • The new fund has €15m from EIF and will see six deals tied up in 2020, with a total of 20 companies.
  • Presto: Inovo might join us in one of our portfolio companies.

DForce hacked: DeFi protocol loses $25 M in Bitcoin and Ethereum (cryptopolitan.com) + dForce Hacker Returns Almost All of Stolen $25M in Crypto (coindesk.com)+ An interview with dForce founder Mindao Yang (decrypt.co)
  • dForce is aiming to hyper-localize DeFi (decentralized finance) products in China by “building the first ‘super-network’ of DeFi protocols.” Through its platform token DF, users can lend, borrow, trade and earn various assets across its DeFi protocols without leaving the dForce ecosystem.
  • dForce gained international fame when a new round of strategic investment, led by Multicoin Capital, was announced. On April 19th, dForce saw 99% of its assets vanishing as a result of an attack. The site was attacked by hackers who collateralized fake imBTC in exchange for real ETH due to their partners imBTC’s security bug.
  • The attack has also stirred debate whether dForce’s forking Compound (their biggest competitor) V1 code is the root cause of the attack. Because the team simply took the code away without understanding it, they were not able to patch up the loophole or even sufficiently understand it.

Shopify Capital launches in Canada to help businesses with quick and easy access to funds (shopify.com)
  • Shopify will provide cash advances from $200 CAD to $500,000 CAD per eligible merchant to keep their businesses going. They are repaid through future sales. Approval takes only a few days after a simple online application process.
  • Shopify will use the data from businesses it has to decide about the loans.
  • Opinion: Great idea and acceleration of profitable business model for Shopify in this environment as it was the next logical step for the company to grow with their data.

Reading

In Race for Small-Business Loans, Winning Hinged on Where Firms Bank (Wall Street Journal) compare & contrast China’s credit push struggles as banks weigh risks of lending to cash-strapped small businesses (South China Morning Post)
  • US: The small businesses that received aid under the federal government’s $350 billion rescue program weren’t always the ones with the greatest needs or the best chances to survive the coronavirus pandemic. Whether a firm made the cut often came down to how and where it banked.
  • Some recipients were also public companies with over $100 million market capitalization and other industries such as private equity firms and hedge funds applied.
  • China: [Small banks] have very weak balance sheets and a high default risk at the best of times. Even if banks can access cheap PBOC funding they would rather not lend to SMEs and have to deal with non-performing loans in six months’ time.

In case you are interested in helping us with evaluating some companies and industries or you just want to discus any of these articles, feel free to reach out to Roman from Presto Ventures at roman@prestoventures.com or Linkedin.

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