India tax officials search edtech UpGrad offices

Officials from India’s GST tax department are searching the offices of UpGrad, an edtech unicorn that counts Temasek, James Murdoch’s Lupa Systems and World Bank’s International Finance Corporation among its backers, the startup said Wednesday.

“It’s a routine survey and we are fully compliant and cooperating with the GST department,” said Koell Hemdev, Head of Legal at UpGrad, in a statement.

The startup, founded by Ronnie Screwvala (pictured above), has raised $600 million altogether and was valued at $2.25 billion last year.

Reuters first reported about the searches.

Eight-year-old UpGrad specializes in higher education and upskilling courses. It offers students over 100 courses in data science, machine learning, artificial intelligence, blockchain, finance, programming and law in collaboration with universities such as Michigan State University, the IIT Madras and IIT Delhi, and Swiss School of Business Management, Geneva.

The searches follow India’s crime-fighting agency searching three premises of edtech giant Byju’s and its founder Byju Raveendran earlier this year.

Pasqal raises $100M to build a neutral atom-based quantum computer

Pasqal, a Paris-based quantum computing startup, today announced that it has raised a $100 million Series B funding round let by Singapore’s Temasek. In addition to Temasek, existing investors Quantonation, the Defense Innovation Fund, Daphni and Eni Next, as well as new investors European Innovation Council (EIC) Fund, Wa’ed Ventures and Bpifrance (through its Large Venture Fund) also participated in this round.

What makes Pasqal, which was founded in early 2019, stand out in an increasingly crowded field of quantum computing startups is that the company is betting on neutral atoms quantum computing. This is a relatively new and potentially game-changing approach to building quantum processors. Instead of trapped ions (like IonQ) or superconducting quantum computers (like IBM), neutral atom quantum processors use lasers to hold atoms in place with what is essentially an optical tweezer.

As you can imagine, building the technology to hold a single atom — and only a single atom — in this trap created its own challenges, but that’s mostly a solved problem now. The advantage here is that once you can do this with hundreds of atoms at the same time, you can create both a very dense matrix of qubits and one that, using holographic methods, you can reshuffle in 3D space as needed for a given algorithm. And all of this happens at room temperature. That almost makes these machines more akin to Field-Programmable Gate Arrays (FPGAs) than more traditional quantum processors. You can find a Pasqal’s paper about this process with more details here and it’s also worth noting that Alain Aspect, who won a Nobel Prize for his work on quantum entanglement in 2022, is one of Pasqal’s co-founders.

Image Credits: Pasqal

As Pasqal co-founder and CEO Georges-Olivier Reymond told me, the company has already demonstrated that it can control more than 300 atoms at a time. “It’s very hard to have only one atom in a laser beam and to monitor it and to control it,” he explained. “But once you achieve that, you can almost easily scale that and you can create arrays in any shape you want.” He noted that the qubits are similar to ion-based qubits in terms of their coherence time and fidelity, yet this flexibility and ability to pack these atoms in a very dense array, with only a couple of microns between the qubits, could give this technology an advantage.

Reymond noted that with some of these basic capabilities now in place, the team is working on building the quantum control system so it can start implementing quantum algorithms. And while there are startups that focus on building quantum control hardware, none of them are optimized for neutral atoms, he noted, so the company decided to build its own system.

Clearly, the Pasqal team is quite optimistic about its system and Reymond believes that the team will be able to show its potential customers “quantum business advantage” in 2024. He believes that this will take a system with 200 to 300 qubits.

At this point, most researchers believe that we won’t see the industry trend toward a single technology for solving every algorithm. Instead, different quantum technologies will find their sweet spots for solving different problems. For Pasqal, the team believes that its system will work especially well for graph-centric problems. “There are a lot of computational challenges that you can reframe in the shape of a graph,” he explained. “What we can do with atoms, is we can represent the shape of this graph and embed the complexity of the algorithm in this geometry. In the end, instead of using thousands of quantum gates, just by implementing a couple of them, you can run your algorithm and then you are resilient to errors.”

The company is currently working with the likes of Crédit Agricole CIB, BASF, BMW, Siemens, Airbus, Johnson & Johnson and Thales to help them understand where its technology can solve their business needs.

“We are very proud of this new milestone in PASQAL’s development that will make the company a world leader,” said Christophe Jurczak, managing partner at Quantonation. “Quantonation has supported the company since its spin-off from Institut d’Optique. It is the first scale-up within Quantonation’s portfolio, and it truly illustrates the excellence of French research and the competitiveness of the French quantum ecosystem.”

Pasqal raises $100M to build a neutral atom-based quantum computer by Frederic Lardinois originally published on TechCrunch

Temasek backs India’s HealthKart in $135 million funding

Indian consumer nutrition platform HealthKart has raised $135 million in a new financing round as it looks to expand in international markets and shore up cash to buy firms, it said Monday.

Temasek led the Gurgaon-headquartered firm’s Series H funding, valuing the 11-year-old startup at about $350 million. The startup, which also counts Sequoia India, Sofina and IIFL among its backers, has raised about $225 million to date, according to market research firm Tracxn.

HealthKart, which sells protein supplements and health accessories, said it is currently on track to generate over $122 million in annual revenue.

“Driving fitness and preventive health by addressing the nutritional gaps is a systemic trend which is taking off in a big way in India. With HealthKart’s R&D capabilities and omni-channel distribution infrastructure, we are excited to lead the way,” said Sameer Maheshwari, founder and chief executive of HealthKart, in a statement.

The startup said it will deploy the fresh funds to expand its offline presence and also scale its operations in international markets. The omni-channel nutrition retailer currently operates over 140 stores across 50 Indian cities.

In 2015, 1MG spun off from HealthKart and became a separate company. Tata Digital acquired majority stakes in 1MG at a valuation of over $400 million last year.

Temasek backs India’s HealthKart in $135 million funding by Manish Singh originally published on TechCrunch

GenZero’s Frederick Teo on “limitless” opportunities in climate tech

2050 is an important year for climate tech, with the Paris Agreement calling for emissions to reach net zero by then. In a conversation with GenZero’s Frederick Teo for SOSV’s Climate Tech Summit, we talked about realistic paths to hitting that goal and how startups can tackle what Teo called one of the most existentialist challenges of our generation.

GenZero is a $3.6 billion investment company that is backed by Temasek, already known for its climate investing. Teo talked about how it gauges companies before investing, supporting nascent technologies and solutions in the space and what startups can tackle in the next two decades. This Q&A was edited for length, and you can watch the full conversation here or at the bottom of the article.

TC: GenZero’s initial commit is from Temasek, which was already a leader in global investing when it announced GenZero in June. It’s a wholly-owned company of Temasek, so why did Temasek decide to start GenZero and what is GenZero doing that Temasek isn’t already?

FT: Temasek, as you know, has already taken a lot of steps in the past few years into making investments into sustainability, as well as clean energy and climate-related spaces. It is important for us to think about how to deploy capital in this space because obviously all of us are aware of the climate emergency, the fact that this is actually likely to be one of the most existentialist challenges of our generation. It is important for us to be able to find solutions that can actually address many of these things like global warming, sea level rises, the challenges of food production in a sustainable way. So we wanted to be able to have a dedicated capability to access some of these decarbonization opportunities, and Temasek decided to park aside a sizable amount of capital to be able to develop a team that would be able to focus on issues like carbon markets, decarbonization technologies as well as nature solutions. So that is the reason why we established GenZero as a separate investment platform company.

In our work we have been looking at technology solutions such as low carbon materials and carbon capture capabilities, nature solutions that seek to protect and restore natural ecosystems, often with a view to generate carbon credits on top of that, as well as to invest into ecosystem enablers in the carbon market space. The reason for that is because we think that in the near term, energy transition would require some form of participation from carbon markets to allow people to gradually execute this transition. But we do need carbon markets to be credible, effective, transparent, high quality, and therefore there is still investments needed in order to be able to improve capabilities and technologies and solutions in that space.

TC: For companies that are curious about trying to pitch themselves to you, what are some examples of your current portfolio companies?

FT: In the technology space, we have invested into both funds as well as companies, so a major fund investment is Decarbonization Partners, and that is basically a climate-focused fund that is a joint venture between Temasek and BlackRock. We are an LP invested in that, and they are very focused on late-venture, early growth opportunities across different areas in the decarbonization space.

We have also invested into a technology company called Newlight, which seeks to be able to produce bio plastics from captured methane. On the nature side, we have been investing into a few forestry projects that generate carbon credits, and then on the carbon market side, we count among our portfolio companies things like South Pole, which is a global leader in providing project advisory, technical advisory solutions and project development for companies seeking to embark on a net zero decarbonization journey, as well as a carbon exchange called Climate Impact X, which is headquartered here in Singapore.

TC: For companies that are curious about potentially getting investment from you, what investment stage does GenZero typically look at?

FT: We are kind of flexible. For very early-stage companies, say around the Series A or just before, we will work with different partners to be able to evaluate and deploy capital to support early-stage companies, but I think it’s important to understand why we need to do this. If we think about the broader net zero decarbonization challenge, everybody talks about this 2050 timeline to get to net zero. But the reality is that if we want to create significant climate impact by 2050, we are looking at new solutions that must already somewhat exist today or are starting to come into being today, because we will need another 10 to 15 years for the technologies and solutions to mature and get to a stage where they could be commercializes, and then probably another 10 to 15 years for it to actually be able to be deployed and create some kind of impact. That basically means that this current cohort of young companies are going to make a difference to the 2050 agenda. That is the reason why we are very excited to participate in this space right now, because the action must take place now in order to have any meaningful difference by 2050.

TC: Considering that, with technology not coming to fruition by them until then, or making actionable results by then, in light of that, what kind of metrics or milestones do you like to see companies bring to the table before you consider them for your portfolio?

FT: I think it goes back to the way we evaluate our performance at GenZero. We have a double bottom line, so our shareholder expects us to be able to obviously achieve some level of financial returns. That’s a given. But we also take the idea around measuring climate impact rather seriously. We try and understand, for example, the kind of climate impact that a solution would be able to achieve if successful deployed. We also look at the kind of carbon yield that the company or solution would be able to deliver. For example, for every dollar invested in capital, how much carbon bang for the buck can we actually get, because obviously many solutions could be practical, cost effective and great.

But for every dollar of invested capital, how much carbon impact can we actually achieve on a per annum or cumulative basis. So that is actually one metric that we think about because capital is going to be finite. We also have a very limited time to be able to achieve a significant amount of climate impact to be able to address the climate change challenge. So it is vitally important for us to understand how to deploy capital into the areas that will make the most meaningful difference.

TC: One of the questions I want to ask in terms of working with startups, especially for the long-term, because I think it’s fair to describe GenZero as an active investor that works closely with startups. Some of their work might take a while to come into fruition, so what kind of value add are you able to bring to startups?

FT: We work with a range of different companies, whether they are very, very early-stage startups or they are slightly further along on the journey. But I think there are a few things where we hope to be able to bring value to our partners, but the first one is a more considered view around how the carbon markets and developments around carbon are taking place around the world. Because at the end of the day, we are solving for a decarbonization challenge or climate change challenge, that understanding how we are underwriting investments, how we are thinking about the movement of carbon price, and how people are thinking about decarbonization strategies, policies, are being introduced will be important, and I think GenZero hopefully will be able to provide a useful perspective on that front.

The second aspect is that GenZero is not alone. We do not profess to be the only game in town. There are many others who are doing great work in this space and we often want to think about how we are able to foster a sense of partnership, a kind of open architecture type of ecosystem in a way that we are able to partner each other dynamically in order to find new and interesting solutions and, more importantly, ways of actually applying them. It is not good enough for us to come up with great ideas. It is much more important to think about how we can actually get those ideas deployed, used and scaled.

Being part of a broader Temasek ecosystem here in Singapore, and globally, we have a network of relationships and contacts that might be quite useful for startups, to either try out solutions, bounce ideas, get some of the solutions implemented and also be able to find other sources of financing and support on their own journey of growth. We have a Temasek portfolio in a range of different industries that could certainly use innovative decarbonization solutions, whether it’s, for example, airlines making sustainable aviation fuel, or some of our utility companies looking at carbon capture capabilities, so there is that opportunity to be able to deploy some of these solution across the network or to make those introductions and get actual practitioners and operating companies to provide feedback on what would be needed for some of these solutions to scale and be effective. Oftentimes, I think we are also talking to a broader network of fund managers and fellow investors, and therefore through that collective understanding of issues, we hope to be able to value add to some of our partners.

TC: For founders that are listening into this, what kind of opportunities do you think there are for startups in climate tech, or what in particular are you excited about?

FT: I think its limitless. The ones we are really watching for in the technology space includes some of the carbon capture and carbon removal technologies, low carbon fuels, low carbon materials and, in particular in the near term, probably things to do with a hydrogen transition that I think would be quite meaningful in terms of being able to push the envelope by around 2030 or so. I think there are also a lot of opportunities in supporting nature solutions. It is a class of investments and opportunities that many investors and corporates might be less familiar with, but nature is as important as technology in trying to solve for near-term decarbonization.

Then finally into the carbon market space, I think we do need a lot more capabilities in the MRV space. These are the ones that are doing monitoring, reporting and verification of carbon project rating capabilities, to be able to improve the transparency, credibility and quality assurance in the carbon market space. But let me end off by just saying one thing. There is always a tendency for us to think about digital solutions and software solutions to be able to solve this and they are vitally important because they seek to optimize, and if you do not digitalize, you cannot optimize energy efficiency and many of those are critical to this decarbonization space. But I will certainly have a shout out and encourage many of our founders in the room to also think about the core engineering, the tougher kinds of solution sets that we need, because at the end of the day, even as we optimize, somebody has to fundamentally do something about taking the carbon out, improving the core underlying engineering efficiency of some of our solution. So that’s tougher to do, I think sometimes maybe depending on your point of view, as sexy or not as sexy. But it is vitally important, and I think therefore, there is space for many of us with varied interests to be able to tackled this climate crisis.

GenZero’s Frederick Teo on “limitless” opportunities in climate tech by Catherine Shu originally published on TechCrunch

China’s Jaka Robotics fueled by Saudi Arabia’s Prosperity7 in global push

Jaka Robotics, a Chinese startup that makes collaborative robots, has just pulled in a hefty Series D funding round of over $150 million from a lineup of heavyweight investors to help it expand globally.

The round is led by Singapore’s sovereign wealth fund Temasek, TrueLight Capital, Softbank Vision Fund II, and Prosperity7 Ventures, a growth fund under Aramco Ventures, which is an investment subsidiary of Saudi Arabia’s state oil firm Aramco.

Collaborative robots, known as “cobots”, are meant to work alongside humans rather than in isolation. Based out of Shanghai and Beijing, Jaka’s robotic arms can augment humans in a range of tasks, from assembling electronic parts, pouring from a coffee machine to packaging smartphones.

Jaka plans to spend its fresh funding on R&D and global expansion, which makes Prosperity7’s investment all the more significant.

“We have the unique background to help [companies] to go global by leveraging the worldwide outlets of the Aramco ecosystem and our strong connection with Saudi with the Middle East,” Scott Cai, managing director at Prosperity7 who had stints at SoftBank and Baidu, told TechCrunch.

“Nowadays, Middle East is one of the major developed markets which also hold a very good relationship with China and many Chinese entrepreneurs trying to set their first foothold in the Middle East,” the investor continued. “We can help bring those tech companies into those markets.”

Jaka already counts Toyota and Schneider as its close partners, who are co-developing large-scale applications with the startup using its robotic solutions.

While Cai couldn’t disclose Jaka’s financial performance, he said the robot maker’s growth has been “very impressive” over the past few years. Overseas businesses currently account for “a material portion” of Jaka’s revenues and are expected to reach a 50% share in the long term.

Aramco in China

Founded in 2014, Jaka is exactly the type of tech startup that Prosperity7 looks for in China. Saudi Aramco has been in China’s oil and gas as well as chemicals market since the 1990s, and last year, it began deploying capital through Prosperity7 to bet on Chinese tech that can “solve big problems on a global level and generate huge returns.”

Jaka’s robots can do heavy lifting work that comes in handy for energy firms in the Middle East. In oil drilling, for example, rock cores are still being manually carried around for testing. “It’s not efficient at all,” suggested Cai, adding that robots can perform better in this type of work.

Companies like Jaka, which fits into China’s national goal of improving efficiency in its traditional industries, are coveted by many investors. Prosperity7 believes its ability to invest in the long game gives it a unique appeal to startups.

“Prosperity7 is backed by Saudi Aramco. We take a long-horizon view and establish long-term relationships,” said Cai.

Being relatively new to China isn’t a disadvantage for Prosperity7, Cai reckoned, as his investment outfit looks for opportunities in “disruptive tech,” such as industrial internet (China’s term for using advanced tech like smart sensors to improve productivity in industrial production), robots and medtech.

Large USD funds operating in China have focused on the lucrative consumer internet space for the past two decades, during which the likes of Tencent and Alibaba gave rise to an internet boom. Many of them have also started looking at semiconductors, autonomous driving, and other cutting-edge technologies, but they, too, are new to the field.

Cai also seems unconcerned by the current economic slowdown in China, saying “it’s normal to see the ups and downs in the market.”

“We still believe in the long-term trend of technology progress in China and more and more world-class companies will become winners from the China market.”

Luminar to invest in Geely-affiliated Ecarx, eyes China market

Luminar, the Florida-based lidar company that went public via SPAC in 2020, has formed a close alliance with an auto behemoth in China. It’s making a strategic investment of an undisclosed amount in Ecarx, an auto tech startup co-founded by Eric Li, founder of China’s largest private automaker Geely, Ecarx said on Thursday.

The funding will be part of the pair’s wider collaboration on automotive-grade technologies, which aims to “enable advanced safety and automated driving capabilities in the production of consumer vehicles and commercial trucks,” a plan that Luminar unveiled in May.

Luminar’s sensing technology can potentially reach millions of vehicles through the Geely/Ecarx auto empire. Ecarx is building a comprehensive platform for the future of cars, focusing on the likes of auto chips and smart vehicles. Its customers include, unsurprisingly, Geely-owned brands like Lotus and Volvo.

Shen Ziyu, Ecarx’s other co-founder and a former General Motors executive, told Reuters in March 2021 that the company had already supplied 2.5 million vehicles.

The lidar industry in China is enjoying a boom as the country’s electric car makers — which themselves have benefited from government support for renewable energy — woo picky consumers with advanced driving technology, in-car entertainment, other novel auto features.

Luminar’s tie-up with Ecarx will be critical in helping it confront domestic lidar players, from BYD-backed Robosense and Bosch-backed Hesai to Temasek-funded Innovusion and Livox, which sprang out of DJI.

“The collaboration will help Luminar to accelerate deployment of its industry-leading long-range lidar and software in the [Chinese] market and beyond through Ecar’s deep connection with Geely and the Geely ecosystem, comprising some of the world’s most reputable automotive brands,” Luminar said in May.

The same month, the American lidar maker said it had brought on Jackie Chen, a Harman veteran, to head its China business.

Ecarx’s empire is ever expanding. On Thursday, the company announced another funding boost along with the Luminar partnership. Siengine, an automotive system on chip maker it co-founded with Arm China, has completed a Series A funding round of nearly 1 billion yuan or $15 million. Sequoia Capital China led the round, with Bosch’s China venture capital arm Boyuan Capital and others participating.

Earlier this month, Li and Shen bought Chinese smartphone maker Meizu, once a Xiaomi archrival, to work towards a future of “multi-device, scenario-agnostic, and immersive” digital experience, which will no doubt include system integration between vehicles and handsets.

In May, Ecarx announced plans to go public through a merger with a blank-check firm in a $3.8 billion deal.

Indian fintech OneCard tops $1.4 billion valuation in fresh funding

FPL Technologies, an Indian startup that offers credit cards to customers under the brand name OneCard, is the latest in the South Asian market to join the unicorn club following a new round of funding.

Singapore’s Temasek, one of the world’s largest investors, led the Pune-headquartered startup’s Series D round, OneCard disclosed in a filing to the local regulator. The new round values OneCard at over $1.4 billion (post-money), up from about $750 million in January this year, a source familiar with the matter told TechCrunch.

Existing backers QED, Sequoia Capital India, and Hummingbird Ventures were among those who participated in the new round, which brings OneCard’s to-date raise to over $225 million.

OneCard declined to comment Wednesday evening. TechCrunch reported in February that Temasek was in talks to lead a round of over $100 million in OneCard at a valuation of about $1.5 billion. Indian news outlet Entrackr first reported about the filing.

Founded by banking veterans in 2019, OneCard operates a mobile-first credit card. Its cards come without any joining or annual fee and give customers more control and flexibility over how and where they transact. It also offers a range of personalised rewards and loans to customers.

The startup also operates an app called OneScore, which helps users understand and find their credit score. The app is one of the largest customer acquisition drivers for OneCard, it has said previously.

OneCard said earlier this year that it had amassed over 250,000 customers who were spending about $60 million with its cards each month.

Anurag Sinha, the startup’s co-founder and chief executive, said in January that he estimated that about 80 million to 90 million Indians were eligible to have a credit card.

This is a developing story. More to follow…

Fabric lays off 40% of staff as it shifts strategy from service to platform

Fabric, a New York–based micro-fulfillment company focused on robotics technology for last-mile operations, has cut staff and named a new chief executive. The startup confirmed the changes to TechCrunch, essentially saying that it has seen the writing on the customer wall and is making some strategic changes.

Today, the company officially announced its intentions to move in the direction of being a platform rather than a service. As a result, not everything with the new plan is positive: founding CEO Elram Goren was replaced by COO Avi (Jack) Jacoby 2 weeks ago, and the outfit told its 300-person staff Wednesday that 40% of them would be laid off.

Fabric builds hardware and software for customer warehouses to automate the processes of selecting, moving around and packing items. We last covered the company in 2021 when it raised $200 million in Series C funding with some top investors behind it, including Temasek, which led both the C and Series B rounds. The company raised over $330 million in total and its valuation was over $1 billion.

In the past year, however, the company’s customers began asking for different offerings than Fabric was currently providing, namely they wanted more of a platform offering than a service offering. Fabric’s current service is providing the real estate, deployment, commission, label and all of the services to maintain it.

Shifting to a platform offering puts more in the hands of the customer, Jacoby told TechCrunch. He joined the company in 2018 as chief of staff and rose to the ranks of CEO of the Israel market. In 2020, he became Fabric’s chief operating officer.

“Most of our customers told us they prefer to operate our system on their premises and with their own teams,” he said. “They would like to retain direct relations with the end customers and do not want anyone between the retailer and customer.”

Over the past 6 months, the company’s board of directors and leadership began looking at what that platform offering could look like. Jacoby explained that since starting the company 7 years ago, Goren had a “vision about building a network and providing a service to retailers.”

“Once the board decided it didn’t see a demand for that in the market, that led to Elram’s decision to step down,” he added. “I think after seven years, he was pushing in that one direction.”

Though Fabric’s customers were asking for something else, the company’s original network vision might not entirely be losing steam, according to Chris Domby, chief supply chain officer of Ware2Go, a UPS spinoff fulfillment startup for small businesses.

“While large retailers are creating their own micro-fulfillment networks based on their specific needs, as an emerging technology, this method is costly,” Domby said via email. “We’re seeing the emergence of micro-fulfillment-as-a-service offerings, which are allowing small businesses to access micro-fulfillment networks they otherwise wouldn’t be able to afford.”

Regarding the layoffs, Jacoby explained that as a service company, Fabric was providing the real estate, deployment, commissioning and once operational, the label and services.

Now that it won’t be doing all of that, the employees who were let go fall into those categories, which include its R&D teams and are mainly based in Israel, but the layoffs were across the organization, he added.

The commercial teams were not impacted by the workforce reduction because the U.S. is still Fabric’s main market. Site operations, sales and marketing, product and finance were also not impacted.

“We are going to expand in the U.S., but it doesn’t make sense to shift R&D to the U.S.,” he added.

Impacted employees will be provided with a cash severance, extended benefits and job outplacement services, Jacoby said.

Though Jacoby says he is seeing the trend of a slowdown in e-commerce, it did not have an impact on the decision regarding the shift to a platform business. It was instead listening to customers and their need to shift to automation, owning their micro-fulfillment system and operating it themselves.

However, e-commerce has indeed been slowing down since the start of 2022. Forbes reported that Americans spent some $5.28 billion less online in April with part of the blame being placed on higher travel and gas prices that are cutting into people’s budgets for spending on goods.

Jacoby reiterated that Fabric has “years of runway, is in a very good situation” and was not under pressure to make the decision.

“We are just doing what we believe will position us better in the market,” he added. “What is happening to the market has nothing to do with it, and the company’s financial situation is very good. This decision needed to be taken now because we need the runway to position ourselves better as a platform player.”

Omio raises $80M as travel demand rebounds after years of COVID-19 crisis

It’s been a tough few years for Omio, the Berlin-based travel search and booking platform that saw 98% of its revenues evaporate overnight when COVID-19 hit Europe back in Spring 2020. But the company kept on trucking and has found some light at the end of the tunnel: Today it’s reporting revenues which have rebounded to more than double pre-pandemic levels. It’s also announcing close of an $80M Series E.

The E round includes backing from some new investors including Lazard Asset Management and Stack Capital Group. Existing investors reupping their support for the almost decade-old business include NEA, Temasek, and funds managed by Goldman Sachs Asset Management, amongst others.

It’s Omio’s first funding since a $100M convertible note it took in just under two years ago to see it through the first waves of the coronavirus crisis. In all, it’s raised around $480M since being founded back in 2013.

The new funding will be put towards reviving global expansion activities that have necessarily had to take a bit of a backseat during the pandemic — including through M&A; and by doing more with its transportation data and inventory by scaling its partnerships (existing collaborations include tie-ups with Kayak, Huawei and LNER (London North Eastern Railway), among others. Investment for hiring and product dev is also planned.

“When COVID-19 hit we paused this global expansion strategy so that’s now back on track,” founder and CEO, Naren Shaam tells TechCrunch. “But with a slightly different twist — and the twist is basically we’re very much focused on our learnings and our scars we gained during COVID-19. So we’re going about it in a much more disciplined fashion.”

That means the preference will typically be ‘build vs buy’, he says — but with the possibility of strategic acquisitions for selective technology and/or inventory to support further global scaling.

As it stands, Europe remains Omio’s biggest market — but Shaam says demand in the US, where Omio had launched just prior to the pandemic, has “bounced back” so he sounds bullish again on growth prospects over the pond.

The travel startup is not disclosing a valuation for its business at the latest raise but that’s essentially a point of principle for Shaam, who bats away the question with a laugh. “We don’t comment on valuation ever,” he says, adding: “Let’s just say I’m building a business for the long term so I’ve never really focused on that.” (Albeit it sounds like it’s fair to say the August 2020 raise was a down valuation, and the E round is back up.)

Having a long term mindset amid such a shock crisis for the primary industry your business is built to serve has probably been essential to getting Omio through the worst moments of the past two years — as well as setting it up for whatever problems might lie or lurk ahead. More pandemic-shaped tunnels remain possible, of course, given the COVID-19 virus continues to evolve.

One knock-on effect of the crisis has been to force startups in affected industries to tightly focus on managing and shrinking their costs. Omio is no exception — which is why a slightly more modestly sized raise now is all it needs to stay on track now, per Shaam. (We’re also told the Series E raise should last it two to three years.)

“COVID-19 impacted us heavily. We had to focus on costs. And we really kept a very lean business coming out of COVID-19,” he says, describing himself as “very happy and humble” that business “survived” — before immediately qualifying the remark with: “And not just survived; but we’ve managed to come back so strong that we’re doing now 2x the revenues of 2019.”

“The travel industry as a whole has not yet bounced back to 2x of 2019,” he also emphasizes. “We’re significantly more efficient — the path to profitability is a lot closer so that just tells us we don’t need to continue to raise large amounts of capital and I’d rather be independent of that as fast as possible. So it’s very much a decision around where the business is today, rather than the need to just keep larger rounds going.”

How close is profitability for Omio? Shaam characterizes the key milestone as now looming on the horizon — saying: “We very clearly see [it] in the near term.”

“Overall it’s also a function of how efficient the business is,” he adds. “We’re getting more efficient with scale and as we grow we’re getting even more efficient — which is almost a little counter intuitive because when you grow very fast you lose some efficiency and you have to catch up.”

Asked what’s further down the tracks — and whether Omio is planning for an IPO — Shaam dubs it “a little premature” for such plans, while signalling that it’s where he hopes to end up in the not too distant future. (“The company is more ready to be — hopefully — a public company some day soon,” is how he frames it.)

That said, he also points to the current state of public markets, with tech stocks continuing to take a battering, as obviously putting the brakes on moving anything forward on that front at present.

“We’ve created the discipline internally from an operational perspective — our operating leverage has grown tremendously,” he also tells us. “We’re significantly more profitable on a contribution margin basis. Our Opex is low. Both businesses, Omio and Rome2Rio which we acquired, are out-performing any internal projections we had by significant levels. So, for now, we’ll just keep — as we anyway do — financial closing on a quarterly basis with IFRS [international financial reporting standards] etc. So we’ve got — let’s say — many of the tools that’s necessary, if not all, of a public company and we’ll just keep an eye on the markets.”

Omio operates in a space with no shortage of competitors for travellers’ attention but its platform stands out by merit of being multimodal — which is to say it can span multiple transport types, from buses and trains to flights and ferries (with price comparison baked in) — making it a more comprehensive option for travel planning vs (just) consulting train or flight booking sites.

That said, journeys don’t have to be complex, multi-legged affairs; Omio can sell you a ticket just to get from destination town A to B (or for an airport transfer), using just the one mode of transport too. But there’s no doubt the core platform excels off the road less travelled — as it’s focused on building out its inventory broadly, rather than concentrating effort around major hubs. Which means that as the pandemic has shaken out into a longer tail of behavioral impacts — changing how, where and even when and how people are travelling — its business looks well placed to adapt to and serve that changing demand.

This includes being able to respond to growing concern around climate goals — and the need to shrink the travel sector’s emissions — given Omio’s early focus (when it was called GoEuro) on train travel which remains a far more sustainable choice than flying, for example; as well as the years of work it put in getting state rail companies on board with its booking platform. (A recent addition is Portugal’s state-owned railway company, Comboios de Portugal — with Omio becoming the first third-party booking platform to sell its tickets.)

“There’s some fundamental underlying shifts in travel consumer behavior that has played to our advantage,” argues Shaam. “When COVID-19 hit we focused on those as a bet — and invested in those — which was more ground transport, more app-driven bookings (vs kiosks)… more focused on our core strength, which is non-hub travel; smaller towns — so that became, during COVID-19, ‘work from anywhere’, go to less crowded places — and now it’s more like where people travel; I won’t say ‘long tail’ but definitely not to crowded hubs only.

“And all of those destinations need access to ground transport — and those customers are booking on mobile — so these kind of underlying shifts are very, very strong and we’ve managed to capture a lot of that… So hopefully we’ve taken a good amount of market share given where revenue is relative to the industry as a whole.”

Asked about the hardest moment he’s faced as a founder since the pandemic hit, Shaam points back to the revenue-crushing impact of the first wave of COVID-19 hitting Europe in late March/early April 2020 when Omio saw 98% of its revenues dry up. “And I wasn’t sure how to make head nor tail out of it, whether we were going to survive or not at the time — so that was a hard moment, followed immediately by furloughs, restructuring… so it was just one [hard moment] after another.”

But he also describes a second hard moment that’s been sustained over these years, as a result of the uneven impact of COVID-19 — and which he says he found even harder to navigate. Even if, ultimately, the company that’s emerged from the pandemic, with all its COVID-19-related scars, is necessarily a stronger, leaner and more mission-committed business.

“There were specific industries that were totally grounded… and other industries that were seeing their best days ever. And that was much harder, as a CEO of one of those companies, to navigate through,” he says. “Labor markets are fluid and the [people] who believed in the business have stayed — and it’s very good for me because it shows that they believe in the business and I’m very grateful for that.”

In Southeast Asia, a booming crypto scene

Southeast Asia, a diverse region with an expanding population and rising income, is emerging as a popular destination for crypto entrepreneurs and investors hunting down high-growth startups in the space.

More than 600 crypto or blockchain companies are now headquartered in Southeast Asia, according to a new report by venture investment firm White Star Capital. Much of the recent growth in venture capital funding across the region has stemmed from crypto, blockchain, and web3 startups, which drew in almost $1 billion in funding just in 2022 to date and are on track to surpass the $1.45 billion total in 2021, says the report.

Investors from all over the world are drawn to the region’s vibrant web3 scene, with those from the US, China, and Singapore being some of the most active ones, the report shows.

While much of the deep, fundamental research and infrastructure development in the blockchain space still takes place in the US, Southeast Asia is ideal for web3 startups offering consumer-facing services, Amy Zhao, lead at crypto investment firm Ocular, told TechCrunch.

“The demographics of Southeast Asia are very favorable for web3,” said the investor. “[It has] young populations who inherently understand the technology and are more willing to try new things. It’s [mostly] developing economies, so the financial aspect of crypto provides a lot of incentives for people to participate.”

Southeast Asia, with nearly 700 million residents, has one of the world’s fastest-growing populations. 480 million of them are active internet users and more are coming online. By 2040, Asia is estimated to make up half of global GDP and 40% of global consumption, with much of it coming from the ten-member Association of Southeast Asian Nations (ASEAN), a report by Pinebridge Investments found.

Much like other developing countries, large swathes of the population in Southeast Asia still have limited access to banking services despite the region’s great strides in financial inclusivity over the decade. More than 70% of the adult population remained “underbanked” or “unbanked”, according to a 2019 report from Bain & Company.

The lack of access to formal banking, in turn, gives room for alternative crypto-related finance to grow. Decentralized finance, or DeFi, has flourished in the region as it uses distributed ledger technologies to process transactions and promises to let users earn yield and gain access to capital without the cumbersome of traditional financial intermediaries. Blockchain games that let users earn money by playing (GameFi) are also popular, such as Vietnam-based Sky Mavis’s Axie Infinity, which has large followings in the Philippines and Indonesia.

Crypto adoption rates in Southeast Asia averaged 3.56% in 2021, but Singapore stood out with nearly 10% of its population owning crypto, ahead of the US at 8.3%, according to White Star Capital. In terms of DeFi adoption, Vietnam and Thailand were only after the US in 2021, Chainalysis found.

Each country in the region has its slight edge in crypto innovation, observed Zhao. Vietnam is a source of “hardcore engineers” whereas the Philippines loves entertainment. Thailand, on the other hand, has a vibrant financial market. Singapore is likely to produce more SaaS products given its pool of international talent.

Indonesia is “catching up” on web3 probably because the huge talent pool still rests in their web2 industry,” the investor said. But the country is also home to one of the most well-funded blockchain firms in the region — crypto trading platform Pintu, which brought in over $110 million from its Series B round recently.

It’s not just homegrown entrepreneurs courting Southeast Asia’s web3 adopters. Having spotted the region’s appetite for blockchain services, New York-based crypto exchange Gemini announced a roadmap to enter the region last year. San Francisco’s Coinbase had plans to hire in Southeast Asia as part of its global expansion before freezing recruiting amid the current market downturn.

Asides from consumer demand, Southeast Asian countries like Singapore also attract entrepreneurs with their relatively open-minded attitude toward crypto, which is largely banned in China and has come under growing regulatory scrutiny in the US.

“Singapore has always been very pragmatic. The regulations might not seem to be as lenient as say Dubai, which has attracted a lot of large exchanges to move there from Singapore. But Singapore’s approach has been to build up more trust in the long run to protect consumers here,” Zhao reckoned.

In January, the Monetary Authority of Singapore (MAS), the city’s state’s financial regulator, said that the trading of digital payment tokens or cryptocurrencies is highly risky and thus should not be promoted to the public.

“And in terms of innovation, it’s very supportive, such as setting out regulatory sandboxes,” the investor added.

For instance, MAS has worked with the industry to build a blockchain-based payments network. Temasek, the sovereign wealth fund of Singapore, has been an active investor in crypto startups, backing companies like crypto asset management unicorn Amber.

“We expect regulators in [Southeast Asia] to continue developing their regulatory frameworks that govern digital assets in the coming years. ‘Sudden-stop’ regulations look less likely as digital asset adoption rises, as it would put brakes on a vibrant sector with future prospects,” White Star Capital writes in its report.