Warburg Pincus announces new $4.25 billion fund for China and Southeast Asia

Warburg Pincus, the private equity fund with over $60 billion under management, is doubling down on Asia after it announced a $4.25 billion fund dedicated to China and Southeast Asia.

The firm has been present in China for 25 years, and it has invested over $11 billion in a portfolio of over 120 startups that includes the likes of Alibaba’s Ant Financial and listed companies NIO (a Tesla rival), ZTO Express (a courier firm)among others. The new fund will work in tandem with the firm’s $14.8 billion global growth fund which was finalized at the end of last year.

What’s particularly interesting about the new fund is that it has expanded to include Southeast Asia, where internet adoption is rapidly expanding among 600 million consumers, for the first time. It is the successor to Warburg Pincus’ previous $2.2 billion ‘China’ fund and, with the addition of Southeast Asia, it’ll aim to build on initial investments in the region that have included Go-Jek in Indonesia (although it is going regional) and Vietnamese digital payment startup Momo from its Singapore office.

Indeed, the firm’s head of Southeast Asia — Jeff Perlman — said in a statement that Southeast Asia is “exhibiting many of the strong investment themes and trends which have driven our China business over the last 25 years.”

While there is plenty of uncertainty around China, and more widely Asia, due to the ongoing trade battle with the U.S. — which has ensnared Huawei and other tech firms — Warburg Pincus said it had received strong demand for LPs whilst out raising this new fund.

Though it declined to provide details of its backers — and you’d wager that few, if any, are U.S-based — it said it surpassed its initial target of $3.5 billion for the China-Southeast Asia fund. That’s despite evidence suggesting that China’s investment space is experiencing a slowdown in total funding raised despite more deals.

In terms of target investments, the firm said it intends to focus on areas including consumer and services, healthcare, real estate, financial services and TMT — technology, media and telecommunications.

Warburg Pincus is already one of the largest investors in Southeast Asia in terms of potential check size, although it has been fairly selective on deals at this point. The fund’s move to include the region alongside will be a boon for companies looking for growth-stage deals that are hard to find in the current venture capital ecosystem.

More broadly, it is also a major endorsement for Southeast Asia as a startup destination. The region has long been seen as having immense growth potential, but it often sits in the shadows of more mature regions like India and China.

Warburg isn’t alone in grouping Southeast Asia with another region. Sequoia’s India fund reaches into Southeast Asia — alongside its recently-launched accelerate program — as does the most recent fund from Vertex Ventures.

On the other side, a number of Chinese funds are increasingly doing deals in the region and setting up shop in Singapore. Those include GGV which has backed startups like fintech company Thunes, Ant Financial-backed fund BAce Capital and ATM Capital, which helps Chinese companies expand into and localize in Southeast Asia.

Meanwhile, other funds are also stepping up to address the gap in later stage capital. B Capital, a firm led by former Facebook co-founder Eduardo Saverin, recently made a first close of over $400 million for a fund that’s targeted at Southeast Asia and other regions. Asia Partners is a maiden venture spearheaded by Nick Nash, the former president of Sea, that aims to tap into the post-Series B gap using a PE style approach that may be much like that of Warburg Pincus.

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Google Maps can warn you if your ride goes off-route

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Many ride-hailing passengers are understandably anxious about their vehicles going off-route due to the potential for sexual assault. However, Google hopes it can set minds at ease until there really is cause for worry. It just introduced optional off-route alerts that let Google Maps users on Android know if their ride veers more than 0.5km (about 0.3 miles) from the suggested route. Enable the feature and you’ll get a “prominent notification” as well as a view of where you are relative to the suggested path. From there, you can share your live trip details if you want others to be aware or take action.

The feature is available now in India. We’ve asked Google if and when it will expand to other countries. It’s easy to imagine Google making the alerts widely available, though. Safety is a concern everywhere, and this could help you relax during the journey home instead of worrying about every single detour or missed turn.

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India’s Unacademy raises $50 million to grow its online learning platform

Big money continues to flow in India’s growing education market. Bangalore-based Unacademy, which operates an online learning platform to help millions prepare for competitive exams in India, has raised $50 million to further scale its reach.

The Series D financing round was led by Steadview Capital, Sequoia India, Nexus Venture Partners and Blume Ventures, with Unacademy’s own co-founders Gaurav Munjal and Roman Saini also participating in it. The new round means the startup has raised close to $90 million to date.

The four-year-old startup is aimed at students who are preparing for competitive exams to get into a college and those who are pursuing graduation level courses. Unacademy allows students to watch live classes from educators and later engage in sessions engage to go over topics in more detail. It has 10,000 registered educators and 13 million learners — up from 3 million a year ago.

The startup said it will use the new fund to expand the number of educators it has on the platform, and also add more exam courses, Unacademy CEO Munjal told TechCrunch. It will also improve its product and expand the team.

Unacademy began its journey as a YouTube channel, but has since expanded to its own app where it offers some courses for free and others through a recently launched subscription business. The subscription service — called Unacademy Plus Subscription — has 50,000 users.

Unacademy also maintains an archive of all the classes, giving students the option to reference to older lectures at any time through the app. The startup says YouTube is still its largest distribution channel. Overall, the platform sees more than 100 million monthly views across the platforms.

“We are seeing unprecedented growth and engagement from learners in smaller towns and cities, and are also very humbled to see that top-quality educators are choosing Unacademy as their primary platform to reach out to students. In the last few months, we have taken bigger strides toward achieving this mission. We have more than 400 top educators from across the country taking live classes every day on Unacademy Plus. This is available to every student, irrespective of their location,” said Munjal.

Unacademy competes with unicorn Byju’s, which is widely believed to be the largest edtech startup in the world with its valuation nearing $4 billion. Byju’s, which has more than 2.4 million paid subscribers (and over 30 million users), offers courses for students in kindergarten to year 12, in addition to those preparing for competitive under graduation level courses.

India has the largest population in the world in the age bracket of 5 to 24 years. The education space in the nation is estimated to grow to $35 billion in next six years.

In recent months, Unacademy has grown more aggressive with marketing. Last year it tied up with web producing house The Viral Fever to fund a show called “Kota Factory”, which revolves around the lives of students who are preparing to go to an engineering college. In the midst of it, Unacademy also offered low-cost, discounted subscription plans to attract users to its subscription platform.

Unacademy has presence in Indonesia as well, where as of last year, it had about 30 educators. The startup did not offer an update on how its international ambitions are holding up. A representative of Unacademy told TechCrunch recently that the platform does not rely on ads for monetization.

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India’s Open ‘neo-bank’ raises $30 million to help businesses automate their finances

Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.

The Series B financing round for the two-year-old startup was led by Tiger Global with Tanglin Venture Partners Advisors and existing investors 3one4 Capital, Speedinvest, BetterCapital AngelList Syndicate also participating in it. The new round valued Open at $150 million, a person familiar with the matter said. The startup has raised about $37 million to date.

Open operates as a neo-bank that offers nearly all the features of the bank with additional tools to serve the needs of a business. Millions of small and medium sized businesses in India struggle with maintaining multiple bank accounts, bookkeeping of their daily spending, and bandying out payments to employees.

Open offers them a platform that automates much of this task. It lets them keep track of each transaction — who it came from, where it is going, and what sales it made across accounts.

“We have a small business owner from Ahmedabad on our platform. They see 59 transactions from their customers in its bank account every few hours. Prior to using our service, they were juggling all day to figure out where these transactions originated from or went to,” he explained. “Because on their bank statement, they only see one-line description of a transaction’s detail.”

Traditional banks have either not addressed these small needs, or charge huge amount for their own solutions that is not feasible for a small business, he added.

The startup says it already has over 100,000 customers, with as many as 20,000 coming onboard each month of late. It processes about $5 billion in transactions each year.

In an interview with TechCrunch, Anish Achuthan, founder and CEO of Open, said the startup saw an opportunity to serve the businesses and wanted to open a better bank. “But building a bank in India comes with its own set of regulatory challenges, so we looked at what fintech startups were doing in other parts of the world for inspiration,” he said.

And it found that inspiration quickly enough. One of its early investors is Speedinvest, which has funded Tide and N26 ‘neo-banks’ in European markets. In India, Open has partnered with ICICI Bank, one of the biggest banks in the nation, for creation of accounts. On ICICI Bank’s internet banking website, Open has integrated its tools including a payment gateway, Achuthan explained.

Achuthan said the startup, which employs 85 people currently, will use the fresh capital to significantly expand its business — build more products, hire more people, and sign up more customers. Open will soon also launch Open+ card, a business credit card with a 30-day interest-free credit line for venture backed startups, and Layer, a programmable bank account for developers. In the next one year, the startup aims to grow its customer base to 1 million.

Open raised its Series A of $5 million earlier this year. When asked if it’s a very capital intensive business, Achuthan said they needed the money to get a first-mover advantage. The startup was in talks with another investor to raise an additional $20 million, but Achuthan said they did not need that much money at this stage.

Open today competes with a handful of startups including InstantPay, but Achuthan said much of the market remains untapped.

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Byju’s-owned Osmo education startup enters pre-schoolers market

Osmo, a Palo Alto-based education startup acquired by Indian unicorn Byju’s for $120 million this year, is expanding its product lineup to serve a new and largely untapped market: pre-schoolers.

Osmo today announced Osmo Little Genius Starter Kit, a set of tools that aims to help children that have yet to enter schools to understand letters, expand their vocabulary, and build motor and social skills. The kit is priced at $79 and is available through Amazon, Target, and Apple stores in the U.S.

The kit provides children with sticks and rings of varying shapes, tasking them to assemble them to mimic objects and words that they see through video instructions on an accompanying tablet. Osmo claims its kit for pre-schoolers is based on Friedrich Froebel’s and Maria Montessori’s manipulative with advanced computer vision for a personalized experience.

Pramod Sharma, CEO of Osmo, told TechCrunch in an interview that he believes that the market for pre-schoolers remains untapped with little innovation hitting the space over the last 100 years. This new product launch represents a large and new opportunity for Osmo, which has so far catered to kids aged between five and 12.

In the U.S. alone, there are about 10 million kids who are in the pre-school stage. Additionally, “half of all the toys sale are aimed at kids who have not entered schools,” Sharma said.

The announcement today comes weeks after Byju’s, which acquired Osmo for $120 million earlier this year, expanded its own product catalog. Earlier this month, it partnered with Disney to roll out a new app that aims to educate children aged between six and eight.

Until recently, Byju’s focused entirely on high school students and those preparing for university entrance exams. It has since broadened its courses to cover all school grades. Byju’s, which competes with Unacademy in India, is heavily-funded by investors and valued at nearly $4 billion — it is widely acknowledged to be the leader in India’s e-learning market.

To tackle the pre-schoolers’ market, Osmo is leveraging on the interactive content produced by Byju’s, Sharma said. The nature of the product and market it serves will allow Osmo and Byju’s to expand the kit to many global markets, he explained.

The distribution of the new kit could prove challenging, however, Sharma acknowledged. Osmo has tie-ups with more than 30,000 U.S. elementary classrooms that help it deploy its product to a large number of students. It lacks that for earlier-stage education, but Osmo does plan to replicate that model in some capacity by partnering with pre-schools.

Sharma said also that a number of parents have asked Osmo whether it will have any products for their younger children which gives him confidence that there is raw demand. That said, he acknowledged that Osmo will initially need to be more aggressive than usual with its marketing and other outreach programs to parents.

In terms of subject matter, Osmo has largely focused on science and math to date. Moving forward, though, it plans to broaden its existing product lineup with more content and explore subjects including English language, history and social studies to “cover every aspect of learning,” Sharma said.

Byju’s claims 35 million registered users and some 2.4 million paid customers. It generated around $205 million in revenue in the fiscal year that ended in March this year. The company said it aims to increase that figure to over $430 million this year.

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