Stripe has acquired Lagos, Nigeria-based integrated payments API provider Paystack. The deal reportedly valued Paystack at over $200M, which would make it Stripe's largest acquisition to date. The Nigerian company, which some refer to as the “the Stripe of Africa," claims around 60 thousand enterprise customers and will continue to operate independently.

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• If the reported details are correct, the deal is the largest acquisition to come out of Nigeria to date.
• Stripe raised $600M earlier this year with the express intent of expanding into other continents. The deal marks a departure from Stripe’s previous strategy of acquiring smaller companies to boost its tech stack.
• Paystack is, like Stripe, a YC alumnus, and has raised $11.7M to date. Of that, $8M comes from a 2018 round led by Strip itself.
• From Twitter: Investor and The Hustle CEO Sam Parr thinks this is just the beginning: 
  

Menlo Ventures closed its 15th early-stage fund at $500M. The 44-year-old firm will continue to focus on series A and B checks, with the occasional seed round. 

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• For series A rounds, checks will be written for sums between $8M and $15M and aim for 20% stakes. Series B rounds target $12M-$14M.
• The amount is equivalent to the firm’s second growth-stage fund, which was announced last year. It marks a $50M increase on its 14th early-stage vehicle, which was closed in 2017.
• The fund’s long-time anchor LP is Washington State, which committed $125M. The State of New Mexico Investment Council joined on as one of the other two investors.
• Recent wins for Menlo came from Uber (in which Menlo invested $10.5M back in 2011), Roku, Poshmark, and Chime.

Analyses Made Easy

Crunchbase’s Q3’20 North American Funding Report*

*All figures and graphics are taken directly from the report itself.

VC investors bet $35.7B on North American companies at the seed- through growth-stage in the third quarter of 2020. This marked a 9% increase QoQ, and 2% growth YoY. The robust investment landscape put paid to fears of a slowdown, which would have required at least one of the following to occur: liquidity and fundraising for startup investors drying up; private investors backing down from massive valuations; or public investors and buyers refusing to uphold those lofty private valuations. Instead, dry powder is abundant, private rounds have continued boosting valuations, and the public market is outbidding the private market.

If one includes technology growth in the total funding metric, then Q3’20’s QoQ and YoY increase growth to 16% and 9% respectively (see graph above). The majority of the total investment went into late-stage rounds, which were driven by 56 (up from 42 QoQ and 45 YoY) mega-rounds of $100M or more. Late-stage funding brought in a total of $23.3B over 231 deals. The latter figure grew QoQ but is still down by 34 rounds YoY. The former figure jumped almost $6B QoQ, and just under $3B YoY (see graph below).

Even greater gains were seen at the technology growth stage, which brought in $4.1B over 28 deals (see graph). Dollar volume increased $2.1B QoQ and $2.2B YoY. Granted, over half of the Q3’20 sum came from a single, $2.5B round for EV manufacturer Rivian led by T. Rowe Price.

Early-stage funding brought in $9.4B based on Crunchbase data, down QoQ from $11.9B and YoY from $10.8B. Furthermore, the round count continued to contract, falling to 547 in Q3’20 from 671 in Q2’20, and 789 in Q3’19 (see graph). Life sciences pulled in 40% of the funding total, while several massive rounds buoyed the numbers. The analysts note that a substantial portion of such rounds are reported after the quarter is over, which means that Q3’20’s numbers should go up somewhat.

Finally, seed and angel funding rounds dipped to 1,048, down 200 QoQ, and about 950 YoY. The total funding volume at this stage was $1.4B in Q3’20, on par with the previous quarter but about $500M below its level a year ago. The median seed round was $760K. Of course, the caveat about reporting applies even more at this stage.

In terms of exits, IPOs dominated, as I noted in this week’s Deep Dive feature, and more than 10 North American companies joined public markets last quarter with billions of dollars in combined market cap. M&A was active as well, with at least five companies being acquired for over $1B, and two deals valuing companies at over $7B.

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Quick Hits

• Vista Equity chairman, founder, and CEO Robert Smith reached a $140M settlement with the DoJ over failing to report offshore bank accounts, through which he avoided paying taxes on $200M in assets. The settlement includes an $85M penalty, $30M in back taxes, and $25M in interest.
• OpenView Venture Partners closed Fund VI, enterprise software: $450M.
• China Creation Ventures closed USD Fund II, expansion-stage China: $300M.
• Brazil’s equivalent of Silicon Valley could become the epicenter of Latin America’s startup scene. The so-called ‘Black Silicon Valley’ has been forming in Salvador da Bahia, a city of 3 million.
• As Apple device adoption grows in the enterprise, organizations are looking for ways to seamlessly manage and secure devices while extending the world-class Apple experience users expect.*

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Today's Funding 💸

Adtech/Martech

• Mediatool (Malmö, Sweden), omnichannel marketing software: $2.9M (€2.5M) led by Newion, participation from J12 Ventures, Almi Invest, Twig Ventures.

AI/ML

• Cochlear.ai (Seoul, South Korea), sound identification platform: $2M A led by Smilegate Investment, participation from Shinhan Capital, NAU IB Capital.

AR/VR

• Avataar.me (Bengaluru, India), VR-based immersive shopping experiences: $7M A led by Sequoia Capital India.

Biotech/Health

• 98point6 (Seattle, WA), on-demand digital primary care services: $118M E led by L Catterton, Activant Capital, participation from Goldman Sachs Merchant Banking Division.
• Vineti (San Francisco, CA), digital platform of record for personalized therapeutics: $33M C led by Cardinal Health, participation from Marc Benioff, Canaan Partners, Threshold Ventures, Section 32, Casdin Capital, Novartis Pharma AG, McKesson Ventures, LifeForce Capital, et al.
• Instylla (Bedford, MA), minimally invasive liquid embolic products designed for peripheral vascular embolotherapy: $25.4M B from Excelestar Ventures, Catalyst Health Ventures, Amed Ventures.
• Savana Medica (Spain), structured patient information for physicians and pharmacists: $15M led by Cathay Innovation, participation from Seaya Ventures, MACSF.
• Savana (New York, NY), big data-based biotech platform: $11M B led by Cathay Innovation, participation from Seaya Ventures, MACSF, et al.

Consumer

• Whisper (San Francisco, CA), AI-based hearing aids: $35M B led by Quiet Capital, participation from Sequoia Capital, First Round Capital.
• River (New York, NY), mobile content discovery platform: $10.4M Seed/A from Founders Fund, .406 Ventures, Box Group, Scooter Braun, Josh Kushner, Raised in Space.
• QCODE (Los Angeles, CA), content studio and podcast network: $6.4M A led by Sonos, participation from C Ventures.

Cybersecurity

• Sonrai Security (New York, NY), public cloud security: $20M B led by Menlo Ventures, participation from Polaris Partners, Ten Eleven Ventures.
• NeuraLegion (Tel Aviv, Israel), secure web applications and APIs: $4.7M Seed led by DNX Ventures, participation from Fusion Fund, J-Ventures, Incubate Fund.

DevOps

• Fossa (San Francisco, CA), open-source code analysis/management platform: $23M B from Bain Capital Ventures, Canvas Management, Costanoa Venture Capital Partners.
• Temporal (Seattle, WA), open-source, stateful, microservices orchestration platform: $18.75M A led by Sequoia Capital, participation from Madrona Venture Group, Addition Ventures, Amplify Partners.

Edtech

• Knowledgehook (Toronto, Canada), mathematics learning platform: $20M A from Mesoamerica’s Alexandria, Nelson Education, Ideal Ventures, Nicoya Ventures, et al.
• Podium Education (Austin, TX), online tech skill education platform: $12M A led by Sid Krommenhoek, Spring Tide Capital, participation from Firework Ventures, Degreed co-founder David Blake, Learn Capital, Goldcrest Capital, 137 Ventures, et al.
• Arist (Boston, MA), SMS/WhatsApp-based courses: $1.9M Seed from Acadian Ventures, Global Founders Capital, Craft Ventures, participation from Y Combinator, Soma Capital, Emles Venture Partners, Hack VC, Rebel Fund, Liquid 2 Ventures, et al.

Enterprise

• Fivestars (San Francisco, CA), payments and marketing support platform for SMEs: $52.5M D led by Salt Partners, participation from Lightspeed Venture Partners, DCM Ventures, Menlo Ventures, HarbourVest Partners.
• Popmenu (Atlanta, GA), website building platform for restaurants: $17M B led by Base10 Partners, Felicis Ventures, participation from Bedrock Capital.
• Balto (St. Louis, MO), contact center guidance platform using AI: $10M A led by Sierra Ventures, participation from Jump Capital, OCA Ventures, Cultivation Capital.
• Acceldata (Palo Alto, CA), enterprise data visibility platform: $8.5M A led by Sorenson Ventures, participation from Lightspeed, Emergent Ventures.
• BlackBoiler (Arlington, VA), automated contract markup platform: $3.2M from DocuSign, et al.
• Koyeb (France), data-processing workflow platform: $1.6M (€1.4M) Pre-Seed from Plug and Play Ventures, Kima Ventures, AceCap, Zachary Smith, Justin Ziegler, Alexis Lê-Quôc, Sébastien Lucas, et al.

Femtech

• Elenas (Colombia), platform to assist women in launching businesses: $2M Seed from Alpha4 Ventures, Amador Holdings, Polymath Ventures, Meesho.

Fintech

• Finexio (Orland, FL), AP payments as a service platform: $23M led by Medalist Partners, participation from Florida Funders, Post Road Partners, Peter Wirth, Keith Meyers, Paul Friday & Lou DeRose, Alpine Meridian Ventures, Stormbreaker Ventures, Joe Proto, et al.
• Alpaca (San Mateo, CA), commission-free equities trading product integration platform: $10M A led by Portag3, participation from Social Leverage, Spark Capital, Fathom Capital, Abstract Ventures.
• Wirex (London, UK), crypto-integrated payment platform: $4.8M via crowdfunding.
• Paymynt Financial (Boston, MA), mobile commerce application: $1.1M Seed from undisclosed sources.

Insurtech

• Extend (San Francisco, CA), extended warranty marketplace: $40M B led by Meritech Capital, participation from PayPal Ventures, GreatPoint Ventures, Shah Capital Partners.

Legaltech

• Disco (Austin, TX), AI-based legal assistance platform: $60M led by Georgian Partners, participation from Bessemer Venture Partners, LiveOak Venture Partners, The Stephens Group, Breyer Capital.

Proptech

• Alfred (New York, NY), resident experience and building management platform: $42M C led by Spark Capital, participation from New Enterprise Associates, Greystar, 166 2nd.

Robotics

• Agility Robotics (Albany, OR), maker of legged robots for repetitive tasks: $20M led by DCVC, Playground Global, participation from TDK Ventures, MFV Partners, Industrial Technology Investment Corporation, Sony Innovation Fund, Safar Partners.

Transportation

• Drover (UK), car rental platform: $2.9M (£2.25M) from Shell Ventures.

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