Tag: Fundings & Exits

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Spark Networks SE closes its $258M acquisition of dating brand Zoosk

Berlin-based Spark Networks, the owner of niche dating app brands like Christian Mingle, Jdate, LDSsingles, Silver Singles, Jswipe, and others, today announced it has acquired Match.com competitor Zoosk for a combination of cash and stock. The deal values Zoosk at approximately $258 million.

Spark says it will issue 12,980,000 American Depositary Shares (ADS) to former Zoosk shareholders valued at $153 million based on the closing price of Spark ADSs of $11.78 on June 28, 2019. The deal also provides for cash consideration of $105 million, subject to adjustment, which will be funded by a new $125 million senior secured credit facility, the company says in a release.

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Jeronimo Folgueira (right), CEO of Spark Networks, confirms the acquisition with Steven McArthur (left), outgoing CEO of Zoosk, Inc.

Plans for the deal were previously announced.

Following the closing of the merger, Spark has 2,601,037 ordinary shares issued and outstanding underlying 26,010,365 ADSs, with former Zoosk shareholders collectively owning 49.9% of the combined company.

The Zoosk app, available in over 80 countries, is a free download but charges users who want to send messages and chat with other subscribers, similar to Match.

Zoosk has for a long time struggled to compete against Match Group and its top-ranking dating apps in the U.S., led by Tinder. A few years ago, the company laid off a third of its staff and even had to call off its IPO, as Tinder decimated its business.

Today, it lists itself in the App Store’s “Social Networking” category instead of “Lifestyle,” where Tinder, Bumble, Hinge, and others rank, in an effort to gain more visibility.

According to data from Sensor Tower, Zoosk has generated worldwide in-app revenue of $250 million and has seen 38 million downloads since January 2014. Half of those downloads (19M) are from the U.S., which also accounts for $165 million (66%) of the revenue.

In Q1 2019, Zoosk revenue was flat at $13 million, the firm also says. Tinder revenue, by comparison, grew 43%. And in Match Group’s latest earnings, it said its total quarterly revenue grew 14% year-over-year to $465 million.

Similarly, Spark Networks has also fought to gain footing as Match Group became an ever-larger force in the online dating market over the years. However, in the last year, the company saw its revenue grow 22%. But it still operates at a loss.

As a result of the deal, Spark says its global monthly paying subscribers will increase to over 1 million. It also says it expects to achieve over $50 million of Adjusted EBITDA in 2020.

“Today’s closing represents a remarkable milestone in Spark’s continued evolution. Four years ago, we were a small German startup with no presence in North America. Our efforts over the last few years have created an NYSE-listed business with over $300 million in total revenue that is also the second largest player in North America. We are extremely proud of the company we have built, and are also excited by the future potential of our new portfolio,” said Jeronimo Folgueira, CEO of Spark, in a statement.

Zoosk’s current CEO Steven McArthur is departing Zoosk following the deal, but will join Spark’s Board of Directors.

“I have been very impressed by Jeronimo and his team during this process and I am very confident in their ability to execute the integration plan we prepared together, and make the new combined company even more successful, driving substantial value creation for all shareholders over the next 12 to 18 months,” said McArthur.

Spark Networks SE was formed by the merger of Affinitas GmbH and Spark Networks Inc. in 2017. It’s listed on the NYSE under “LOV,” and is headquartered in Berlin, with offices in New York, Utah, and San Francisco.

Its full list of dating app brands tends to be more faith-focused or targets particular niches. These apps include EliteSingles, Jdate, Christian Mingle, eDarling, JSwipe, SilverSingles, Attractive World, eDarling, LDSsingles, Adventist Singles, Crosspaths, and Weekly Dating Insider, in addition to now Zoosk.

In terms of other exec changes, Spark CFO Rob O’Hare is relocating to Zoosk’s HQ in San Francisco to smooth the transition. Herbert Sablotny, Spark’s former Chief Strategy Officer, will also rejoin the company to assist in the Zoosk integration efforts, having previously done the same with the integrations of Attractive World and Spark Networks, Inc. Other key members of the Zoosk team are staying on as well, for the time being.

Piper Jaffray & Co. acted as the financial advisor to Zoosk on the proposed transaction and Fenwick & West LLP served as legal counsel to Zoosk. Piper Jaffray & Co. also arranged for staple financing for Zoosk. And Morrison & Foerster LLP served as legal counsel to Spark.

Match Group and Spark Networks SE aren’t the only dating app businesses that have taken a portfolio approach. Bumble’s owner in June said it was revamping its structure with the creation of Magic Lab, a holding company that includes its dating apps Bumble, Badoo, Chappy, and Lumen. It also plans to boost spending to $100 million to better compete with Match Group and soon, Facebook Dating.

 

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Hear about how to exit from Jess Lee, Justin Kan, and Michael Marquez at Disrupt SF

All startup founders want to steer the business they started to a success outcome. Sometimes, the goal is an initial public offering. Sometimes, it’s an acquisition.

Though acquisitions often represent a kind of finish line for entrepreneurs, they aren’t easy to line up, and even when an offer is on the table, it often comes with difficult decisions. To better understand how to field interest, what’s involved once an acquirer comes knocking, and who can be impacted when a company decides to sell, we’ll hear from Sequoia Capital’s Jess Lee, serial founder Justin Kan, and CodeAdvisor’s Michael Marquez at Disrupt SF 2019.

Each has something to contribute to this fascinating topic of conversation.

Justin Kan is today the founder and CEO of the legal tech startup Atrium, but it’s hardly his first project. The godfather of “lifecasting,” Kan first came known in the startup world for founding Justin.tv, which spun out Socialcam, an app that Autodesk later acquired for a tidy $60 million, and itself later evolved into the game-streaming powerhouse Twitch, which was eventually acquired by an even bigger giant, Amazon, for $970 million. Kan, who went on to spend three years as a partner with Y Combinator, hasn’t succeeded at every venture. (Few remember his brief stint as founder and CEO of Exec.) But his perspective as a serial founder and investor has made him a trusted source of wisdom in startup-land, and when it comes to exiting, he knows the drill.

Jess Lee currently serves as a partner at one of the most successful and well-respected VC firms in Silicon Valley, Sequoia Capital. Her portfolio includes companies like The Wing, Dia & Co. and Maven Clinic. But Lee has been through the acquisition process from the other side of the fence, too. A Google product manager for several years, she joined the fashion site Polyvore in March 2008 (she’d fallen in love with the product and was quickly asked to become its first product manager). Once there, she quickly graduated to VP of Product before ultimately taking over as CEO and eventually selling the company to Yahoo, where her former Google colleague, Marissa Mayer had herself taken on the reins as CEO. It may have looked seamless to outsiders, but Lee learned plenty of lessons in the process, and we’re thankful she’ll be sharing some of them during this discussion.

Michael Marquez has spent the last decade at Code Advisors brokering deals across the startup ecosystem. While he works mostly behind the scenes, he has become a go-to person for founders seeking help when they’re considering an offer (or trying to snag one). Having spent the previous decade in corporate development roles at CBS and Yahoo, he knows first-hand how buyers think and how to position your company for the best outcome.

We’re amped for this conversation, and we can’t wait to see you there! Buy tickets to Disrupt SF here at an early bird rate!

Did you know Extra Crunch annual members get 20% off all TechCrunch event tickets? Head over here to get your annual pass, and then email extracrunch@techcrunch.com to get your 20 percent off discount. Please note that it can take up to 24 hours to issue the discount code.

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Cozycozy is an accommodation search service that works with hotels and Airbnb

French startup Cozycozy.com wants to make it easier to search for accommodation across a wide range of services. This isn’t the first aggregator in the space and probably not the last one. But this time, it isn’t just about hotels.

When you plan a trip with multiple stops, chances are you end up with a dozen tabs of different services — on Airbnb to look at listings, on a hotel review platform and on a hotel booking platform. Each service displays different prices and has a different inventory.

While there are a ton of services out there, most of them belong to just three companies: Booking Holdings (Booking.com, Priceline, Kayak, Agoda…), Expedia Group (Expedia, Hotels.com, HomeAway, Trivago…) and TripAdvisor (TripAdvisor, HouseTrip, Oyster…). They all operate many different services in order to address as many markets and as many segments as possible.

Cozycozy.com wants to simplify that process by aggregating a ton of services in a single interface — you can find hotels, Airbnb listings, campsites, hostels, boats, home-exchanging apartments… You can filter your results by price or you can exclude some accommodation styles.

The company doesn’t work with hotels and doesn’t handle bookings directly. Instead, the service searches across all the usual suspects. When you want to book, you get redirected to the original listing on Airbnb, Booking.com, Hostelworld, etc.

The startup recently raised a $4.5 million funding round (€4 million) from Daphni, CapDecisif, Raise and many different business angels, such as Xavier Niel, Thibaud Elzière and Eduardo Ronzano.

Cozycozy.com co-founder and chairman Pierre Bonelli also previously founded Liligo.com. It is one of the most popular flight comparison website in France. It was acquired by SNCF in 2010 and then eDreams ODIGEO in 2013.

cozycozy com page de resultats

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UK fintech Jaja pays $671M in cash to acquire the Bank of Ireland’s UK credit card business

Fintech has been one of the bigger stories of the UK startup world — due in no small part to the fact that its capital, London, is also one of the world’s major financial centers. Today, one of those startups made a big splash by buying an incumbent business, and taking on an equity investment alongside that, to scale up its position in the market.

Jaja, a mobile-first business that provides digital and physical credit cards and other financing services, today announced that it will be acquiring the UK credit card accounts for an initial cash consideration of £530 million (or $671 million at current rates). It will also become the consumer credit card issuer for the Bank’s UK business and the AA. At the same time it’s also getting an equity investment of £20 million in its own business.

“This announcement with Bank of Ireland UK is an exciting and important development in Jaja’s journey and is part of our strategy to create partnerships that will help more people embrace a simpler way of managing credit,” said Neil Radley, CEO of Jaja Finance, in a statement. “Our vision is to enable a new generation of mobile-first credit card products with unrivalled functionality, service and security. We’re excited to be welcoming Bank of Ireland UK customers as cardholders.”

The Bank of Ireland’s UK credit business includes a number of key accounts covering the AA (UK’s Automobile Association), the Post Office, as well as a card branded Bank of Ireland itself. (It excludes the bank’s commercial card business in the Republic of Ireland.)

The Bank had put the business up for sale some time ago as part of a bigger strategy to divest of its capital-intensive, competitive operations in a push to grow profitability by improving its loans and mortgages business: amid that, the Bank’s wider UK business has been a challenge for it, with investors going so far as to value the UK business at zero earlier this month.

“Jaja is an innovative company which shares our commitment to delivering outstanding customer service. We are proud to partner with them and bring their next generation credit card to customers across the UK,” said Bank of Ireland UK CEO Des Crowley in a statement. “Today’s announcement demonstrates the Bank’s continued progress in delivering against its strategic targets for growth and transformation to 2021, as set out at its Investor Day in June 2018.”

Jaja’s deal is being done in partnership with KKR, Centerbridge Partners and other unnamed investors, who are helping finance the acquisition and are also putting £20 million ($25 million) of equity investment into Jaja (pronounced “yah-yah”) alongside it. Prior to this, Jaja had raised about about $16 million, including about £3 million by way of the Seedrs crowdfunding platform.

The company is not disclosing its valuation amid this $671 million purchase.

A spokesperson for Jaja said the startup is not releasing any numbers today that point to how much the company’s current services are being used. The company, which is today active only in the UK, has taken the route of keeping a waitlist to onboard new users, and it was reported to have some 6,000 people on it back in February just ahead of the Jaja launching its cards.

The company also has a deal with Asda, the UK business of Walmart, to provide financing at the point of sale for its online storefront George.com (an Amazon-type everything store akin to Walmart.com). Given that Jaja has up to now not operated on a massive scale — even if it took on its whole waitlist, that would only number 6,000 customers, for example — it’s likely that this latest acquisition will be adding a sizeable number of users, and key brands, into its stable in one fell swoop.

Jaja was founded by Jostein Svendsen, Kyrre Riksen and Per Elvebakk — London-based Norwegian entrepreneurs who have previously found and sold other financial and tech startups (Svenden, for example, sold a previous company to American Express) — and is currently led by CEO Neil Radley, who had previously been the MD for Barclaycard in Western Europe.

Its key mission has been to bring a more modern approach to the world of credit and credit cards. That in itself is not hugely unique — it is essentially the purpose of all consumer-facing credit startups today — but given that the vast majority of credit services, and transactions, are still handled through traditional channels, it’s disruptive nonetheless.

The company describes itself as digital, mobile-first business, which in its case means that you apply for and initiate services through the company’s app — using your phone’s camera to snap your ID and an AI-based algorithm that takes in other data about you to provide what Jaja describes as “near instant” credit decisions within minutes. Jaja provides physical cards (Visa is its credit card partner), but it also allows people to use the cards through their digital wallets immediately. The company does not change for foreign currency exchanges and offers free cash withdrawal fees, with an annual percentage rate (APR) of 18.9%. And in keeping with what is now par for the course for challenger fintech services, you can use the app to get real-time updates on your account, modify repayments and more.

On that note, in addition to the challenge of onboarding a number of established brands and a large number of users on to a new platform that up to now has been adding users intentionally slowly, it will be interesting to see how and if Jaja can inject more modern infrastructure into those established operations, and a customer base that’s used to the traditional way of doing things. For now, it says that customers of those services will continue to use them as they have done.

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The rise of the new crypto “mafias”

Ash Egan Contributor
Ash Egan leads crypto investing at Accomplice. He formerly was a VC at ConsenSys Ventures and Converge.

In the early 2000s, journalists popularized the term “PayPal mafia” to describe the PayPal founders and employees who left to start their own wildly successful tech companies, including Peter Thiel, Reid Hoffman, and Elon Musk. Drawing from that idea, this article seeks to cover the formation and flow of talent within the crypto landscape today.

The crypto world is in a constant state of flux, with new startups entrants joining the industry every single day. These new startups have the potential either to be superstars within a portfolio company or to start the next Coinbase. Additionally, there are already impressive spin-outs from some of the more established crypto companies.

For ease of framing, I’ve separated these early-forming mafias into four categories: Crypto, Tech, Wall Street, and Academia. Since 2009, there have been 186 spinout companies originating from those four categories (33% from Academia, 28% from Crypto, 24% from Tech, and 15% from Wall Street).

crypto mafias

Obvious but important disclaimer: this article does not intend to promote organized crime within crypto.

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Ornikar raises $40 million for its driving school marketplace

French startup Ornikar is raising a $40 million Series B round (€35 million) from Idinvest and Bpifrance. The company competes with traditional driving schools in Europe with an online marketplace of students and teachers.

And Ornikar has been a massive success in France. Overall, 35 percent of driving school registrations in 2019 are handled by Ornikar.

There are many advantages in choosing Ornikar. For driver students, Ornikar is much more flexible than a traditional driving school. Driving schools in France are usually pretty small with only a handful of employees. It’s sometimes hard to book lessons, especially if you have a full-time work.

When you sign up to Ornikar, you can connect to your Ornikar account and book an hour or two from there. Ornikar works with a pool of 650 instructors so that you get to study at your own pace.

Ornikar is also cheaper than a traditional driving school. By automating the administration work as much as possible, the startup says that it is 35 percent cheaper than a traditional driving school. It currently costs €750 for 20 hours of lessons.

“We’ve been profitable in 2018 and very profitable in 2019 for the French market,” Ornikar co-founder and CEO Benjamin Gaignault told me.

Here are some numbers. Every month, 30,000 people sign up to Ornikar in France. The startup manages 70,000 hours of lessons per month on its marketplace.

Ornikar works with qualified instructors who got a license to work in a driving school. They get paid €15 per hour, which is theoretically more than in a normal driving school.

With today’s funding round, the startup wants to expand to more countries. Ornikar is already live in Germany and Spain, but the company wants to grow the product there. Eventually, the company will also expand to Italy and the U.K.

In addition to new countries, Ornikar wants to sell other car-related products. The company is partnering with third-party companies for car insurance products, and there will be more products down the road.

Ornikar had previously raised an $11.3 million Series A (€10 million) and a $1.3 million seed round (€1 million). Existing investors include Brighteye, Partech, Elaia, Xavier Niel, Jacques-Antoine Granjon and Marc Simoncini.

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Fungible raises $200 million led by SoftBank Vision Fund to help companies handle increasingly massive amounts of data

Fungible, a startup that wants to help data centers cope with the increasingly massive amounts of data produced by new technologies, has raised a $200 million Series C led by SoftBank Vision Fund, with participation from Norwest Venture Partners and its existing investors. As part of the round, SoftBank Investment Advisers senior managing partner Deep Nishar will join Fungible’s board of directors.

Founded in 2015, Fungible now counts about 200 employees and has raised more than $300 million in total funding. Its other investors include Battery Ventures, Mayfield Fund, Redline Capital and Walden Riverwood Ventures. Its new capital will be used to speed up product development. The company’s founders, CEO Pradeep Sindhu and Bertrand Serlet, say Fungible will release more information later this year about when its data processing units will be available and their on-boarding process, which they say will not require clients to change their existing applications, networking or server design.

Sindu previously founded Juniper Networks, where he held roles as chief scientist and CEO. Serlet was senior vice president of software engineering at Apple before leaving in 2011 and founding Upthere, a storage startup that was acquired by Western Digital in 2017. Sindu and Serlet describe Fungible’s objective as pivoting data centers from a “compute-centric” model to a data-centric one. While the company is often asked if they consider Intel and Nvidia competitors, they say Fungible Data Processing Units (DPU) complement tech, including central and graphics processing units, from other chip makers.

Sindhu describes Fungible’s DPUs as a new building block in data center infrastructure, allowing them to handle larger amounts of data more efficiently and also potentially enabling new kinds of applications. Its DPUs are fully programmable and connect with standard IPs over Ethernet local area networks and local buses, like the PCI Express, that in turn connect to CPUs, GPUs and storage. Placed between the two, the DPUs act like a “super-charged data traffic controller,” performing computations offloaded by the CPUs and GPUs, as well as converting the IP connection into high-speed data center fabric.

This better prepares data centers for the enormous amounts of data generated by new technology, including self-driving cars, and industries such as personalized healthcare, financial services, cloud gaming, agriculture, call centers and manufacturing, says Sindu.

In a press statement, Nishar said “As the global data explosion and AI revolution unfold, global computing, storage and networking infrastructure are undergoing a fundamental transformation. Fungible’s products enable data centers to leverage their existing hardware infrastructure and benefit from these new technology paradigms. We look forward to partnering with the company’s visionary and accomplished management team as they power the next generation of data centers.”

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Grab raises more money — again

Southeast Asia’s highest-capitalized startup is sitting on even more money from investors today after ride-hailing Grab announced it has raised $300 million from Invesco.

The deal is part of Singapore-based Grab’s ongoing — feels-like-ever-lasting — Series H round which was started last June via a $1 billion capital injection from Toyota.

The round swelled to $4.5 billion thanks to contributions from a range of partners throughout 2018 and early 2019, then Grab said in April that it would add a further $2 billion to reach a $6.5 billion close before this year is out. This investment from Invesco is the first piece of that newest tranche to be announced, but there’s plenty happening under the surface, including a potential investment from PayPal, Ant Financial and others in a spinout of Grab’s financial services.

Grab declined to comment on the status of its Series H, and how much it has raised for the round so far.

Getting back to today’s news and, despite a relatively dry-looking announcement, there is an interesting takeaway to be found here.

Yes, this isn’t a SoftBank Vision Fund sized round — that $1.5 billion deal closed earlier this year — and it lacks the strategic significance of investments from backers like Toyota, Booking.com or Microsoft, but it does represent a doubling down on Grab from Invesco.

The firm merged with emerging market-focused fund Oppenheimer back in May. Oppenheimer — which has close to $40 billion in assets under management for its developing market fund alone — was among the participants in an initial $2 billion raise for that Series H, and now the merged entity is coming back to increase its position.

That first deal (from Oppenheimer) was $403 million, Grab said, so this new addition takes its spend on Grab to over $700 million. It also comes at an interesting time for the firm, which is reported to have reorganized its management team following the completion of the merger.

Based on that clearing of the decks/realignment, the decision to double down on Grab is a positive validation for the ride-hailing company. While it might not be a household name to those outside financial markets, Grab president Ming Maa played up Invesco as “one of the smartest investors in developing markets” in a statement released alongside news of the investment.

Grab acquired Uber’s regional business last year to become Southeast Asia’s undisputed ride-hailing leader, but it perhaps didn’t reckon on its local rival Go-Jek mounting a bid to finally expand its service regionally.

Having built a strong presence in Indonesia — where it pioneered ‘super app’ concepts like services on-demand and payments in the context of ride-hailing — Go-Jek has since expanded into Vietnam, Thailand and Singapore, with the Philippines also in its sights. Those moves were fuelled by investment from the likes of Tencent, Google and Warburg Pincus . As it seeks to go further and deeper in those markets, Go-Jek is currently raising a round for growth that is expected to reach $2 billion, half of which it said it had secured in January.

That accumulation of cash seemed to spark a call to arms for Grab, which turned its Series H into a gargantuan rolling round after increasing the overall round target first to $5 billion and then to $6.5 billion.

Uber may have decided to leave Southeast Asia, but the ride-hailing industry in the region is still as fascinating as ever.

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WeGift, the digital rewards platform, raises £4M Series A

WeGift, the U.K. startup that has developed a platform to let businesses easily issue e-gift cards and other digital rewards, has closed £4 million in Series A funding.

Leading the round is Stride.VC — the relatively new early-stage venture capital firm founded by Fred Destin and Harry Stebbings — alongside a number of other investors including including SAP.iO fund, Unilever Ventures, James Hind (founder of Carwow,) and Eamon Jubbawy (co-founder of Onfido).

The startup’s previous backers include Alex Chesterman, Charlie Songhurst, Simon Franks, Ascension Ventures, and Fuel Ventures.

“Currently payments are a one way street,” WeGift founder and CEO Aron Alexander tells TechCrunch. “Payments technology is built to enable businesses to take money from consumers but it doesn’t let businesses send money to consumers.

“We’ve created a new category of digital non-cash rewards to power customer acquisition, retention and loyalty globally: the ‘Twilio for e-gift cards'”.

Alexander says that historically businesses would offer a physical reward to power these use cases. For example, “open a bank account and get a free toaster (for my generation it was a free Filofax). In comparison, he says that e-gift cards are more appealing to consumers because they’re “easier to deliver than merchandise, they don’t get lost in the mail and they can spend it on what they want”.

There are upsides for the businesses handing out digital rewards, too. They include bulk percentage discounts when purchasing e-gift cards from retailers, and negating the need to ask for a customer’s bank account details. Most importantly, says Alexander, “you can track how they affect the customer journey”.

However, the problem with using e-gift cards at scale is that the technology infrastructure to automate orders and delivery is missing, meaning that it remains quite a manual process that often falls back on emails, CSV files and PDFs “This is what we are changing… [by automating] the issuing process of non-cash rewards,” explains the WeGift founder.

The resulting WeGift cloud-based platform offers an open API to enable businesses to automate sending digital rewards, on-demand and in real-time. “We give them instant access to a huge choice of rewards and payouts, an ever-growing network of more than 500 brand partners, across 26 markets and 20 currencies, in real-time,” adds Alexander.

Stride.VC’s Destin says digital rewards is a “messy, fragmented industry with broken processes, prone to errors and leakage, aged technology stacks and plenty of misalignment and distrust between the players”. It is also an industry dominated in the U.S. by two incumbents with a legacy in the physical gift card space and therefore ripe for disruption.

“The business model is well understood,” writes Destin, in a Medium post. “Think Stripe, applied to non-cash payouts. Robust APIs, real-time capabilities, disruptive pricing, transparency”.

Meanwhile, WeGift says the Series A will enable the company to deliver on its vision of create “the world’s first” real-time infrastructure for digital rewards and incentives. Specifically, the funding will be used to further scale WeGift’s operations, support expansion to the U.S, and to continue investing in its technology platform.

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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.

Google report: Southeast Asia’s digital economy to triple to $240 billion by 2025