SoftBank feasts on flurry of IPOs
WeWork’s botched IPO left SoftBank with egg on its face — and red on its balance sheet.
But a flurry of IPO-bound portfolio companies could rewrite the Japanese conglomerate’s recent track record. In May, Masayoshi Son told Forbes that as many as 15 of the Vision Fund’s 88 portfolio companies could go bankrupt but another 15 are likely to succeed.
Here are recent IPO updates from its proptech bets:
View, a smart-glass company, said it plans to go public in a blank-check deal with a Cantor Fitzgerald-sponsored SPAC. Since 2007, the San Francisco startup has raised $1.8 billion, including $1.1 billion from the Vision Fund in 2018. The IPO would generate $800 million in proceeds, and values View at $1.6 billion.
After layoffs and cutbacks, Compass is reveling in a hot housing market. It recently hired bookrunners for a potential IPO next year, and has bulked up its independent board. With $1.5 billion in backing, the brokerage claimed record revenue in June, July and August. Last year, it sold $91.2 billion worth of real estate, but it’s not yet profitable.
Insurance startup Lemonade saw its valuation soar to $3.8 billion when it went public in July — up from a target of $1.6 billion. The insurance startup aims to disrupt firms like Allstate and State Farm, and it offers policies via an AI-powered mobile app. Despite losing $108 million in 2019, the stock is trading at $83.71 per share, up 188 percent from its stock market debut. SoftBank holds a 21.8 percent stake, according to regulatory filings.
Beike Zhaofang, a Beijing online real estate platform, had a massive stock pop when its parent company KE Holdings went public in August. Shares jumped 87 percent on Day 1 — topping Twitter’s performance in its 2013 debut. The company’s market cap is currently $71.2 billion.
Opendoor plans to go public with Chamath Palihapitiya’s blank-check company. The iBuyer generated $4.7 billion in revenue in 2019, but lost $339 million. The IPO will give it $1 billion in cash. SoftBank, which invested $400 million in Opendoor in 2018, will hold a 13.8 percent stake, according to Opendoor’s IPO filing.
Even WeWork is looking for a “redo” of its botched IPO last fall. The co-working startup will revisit plans for a public offering next year, reported Bloomberg. “I’m a big believer in one step at a time so let’s hit profitable growth first, and we’ll then revisit the IPO plan,” CEO Sandeep Mathrani told reporters in October.
“I thought up the Zillow business model years before Zillow did, but thought about it for a couple of days and realized it was unethical.”
FTC sues CoStar to block rental monopoly
Federal regulators are suing to block CoStar’s $588 million purchase of troubled rental listing platform RentPath.
In an administrative complaint, the U.S. Federal Trade Commission said the deal would unfairly consolidate CoStar’s footprint in the rental listings arena — specifically, for large apartment complexes in 49 metro areas.
CoStar and RentPath have been fierce rivals, but that competition has kept advertising rates low.
Since 2014, CoStar has spent more than $1 billion on residential acquisitions, including Apartments.com, ApartmentFinder, ForRent, Cozy Services and Homesnap. It’s been named as a bidder for CoreLogic. RentPath operates Rent.com and ForRent.com.
In a statement, CoStar said it believes the FTC is “wrong in its assessment.”
Airbnb is targeting a valuation of $30 billion to $33 billion for its upcoming IPO.
The higher-than-expected number reflects the home-rental company’s rebound in recent months. After losing $1 billion in bookings overnight, Airbnb’s valuation plunged to $18 billion in the early months of the pandemic.
Executives kicked off a virtual roadshow on Tuesday, ahead of the planned public offering, according to the Wall Street Journal. During the third quarter, Airbnb reported $219 million in profits and revenues of $1.3 billion.
Starcity scoops up co-living startup Ollie’s assets, tech
Co-living startup Ollie has been scooped up by a well-funded rival after the pandemic took a toll on the industry as a whole.
Terms were not disclosed, but the deal gives Starcity a total of 1,500 units, plus access to Ollie’s roommate matching program and amenities program. “They have tech that matched our roadmap,” Starcity CEO Jon Dishotsky said.
Ollie was founded in 2013 by brothers Andrew and Chris Bledsoe, who left the company earlier this year. Starcity, launched in 2016, has raised $50 million from investors.
STAT OF THE WEEK
How much Salesforce will pay to buy Slack
Flex-office startups Knotel and Convene are being squeezed by NYC’s struggling office market.
Convene closed three NYC locations, or a fifth of its portfolio. A spokesperson said they were among the company’s older locations. Founded in 2009 and backed by RXR, the Durst Organization and Brookfield Asset Management, Convene has built out three broadcast centers for its virtual meeting platform. It plans to build out another two by early 2021.
Knotel, which is looking to shrink its global portfolio by 60 percent, is facing an escalating barrage of evictions and lawsuits seeking millions of dollars in back rent. In recent weeks, Knotel’s landlords have filed more than a dozen claims against it, court records show.
Startup offers on-demand warehouses
You’ve heard of flex-office space? Here comes flex-warehouse space.
Flexe, a startup that lets big box retailers purchase on-demand warehouse space, just raised $70 million to accelerate growth amid an e-commerce boom. The Series C was led by T. Rowe Price with participation from Activate Capital, Tiger Global, Madrona Venture Group, Redpoint Ventures, Prologis Ventures and others, according to GeekWire.
Based in Seattle, Flexe has raised a total of $134 million since 2013. The firm bills itself as a warehousing-as-a-service company for retail clients, whose brick-and-mortar stores are struggling. “There is a very strong increase in demand for these flexible, dynamic logistics networks — and that’s precisely what Flexe provides,” CEO Karl Siebrecht told GeekWire.
🧰 Versatile, an AI-powered construction startup, raised $20 million from Insight Partners, Entree Capital and others.
💰 Trinfico Investment Group and PropTech Russia have launched Proton Capital, a $40 million proptech fund.
🏡 Knock expanded Home Swap, which lets sellers buy new homes before selling their old ones by pre-funding new mortgages, to South Florida.
💻Juwai, an online marketplace for homes based in Shanghai, said it turned profitable as of July. Transactions are up 55% this year, compared to 2019.
🏡iBuyer Offerpad announced a partnership with New Home Star, a major seller of new homes.
👨 HomeX, a home-repair startup, named former eBay CTO Steve Fisher to its board.
👨 JLL’s chief product officer, Sharad Rastogi, was tapped to head JLL Technologies.
👨 Opendoor named Kushal Chakrabarti, an Amazon and UC Berkeley alum, as vice president of research and data science.
✄ CBRE lowered the size of its upcoming SPAC IPO to $350 million from $400 million.