London Brief #47: 2017 summary: Top 10 investments in London Tech
Entering 2018, we take a look back at the top ten biggest investments in the London Tech scene.
1. Improbable
Improbable? Well, not for those guys. This VR firm has received a whopping $502m Series B in May 2017, which was the biggest investment received by a London startup last year.
Improbable was co-founded by CEO Herman Narula, CTO Rob Whitehead — both Cambridge University Computer Science alumni — and COO Peter Lipka, educated at Imperial College and previously working at Goldman Sachs.
Improbable is working on solutions that would enable multi-user virtual reality experience. Their main product is SpatialOS platform, which may become the technology that runs VR gaming ecosystems, so it really can be the next big thing.
The investors who believed in Improbable’s vision were Softbank, Andreessen Horowitz, and Horizons Ventures.
2. Farfetch
In June 2017, Farfetch scored a $397m investment from the Chinese e-commerce giant, JD.com.
The deal has included a strategic partnership between two companies as well as JD.com’s CEO Richard Liu, named by the Financial Times “the Jeff Bezos of China”, joining Farfetch board.
For José Neves, founder, co-chairman and CEO of Farfetch, the deal opened an opportunity to grow into China, which is the world’s second-largest luxury market.
For JD.com, Farfetch partnership means expanding the luxury category with top boutiques that are using London’s company platform.
3. Deliveroo
Deliveroo is not only feeding us but also scored two top 10 deals in 2017. In September, it hammered out a £285m Series F and officially achieved the Unicorn status. Then, in November an additional $98m was added to the Series F, which gave the company a $2bn valuation.
Will Shu, CEO and founder of Deliveroo, is using the money to further grow the business and to provide flexible and well-paid work for its riders. Deliveroo is now a global enterprise, available in 200 cities. In London, the company was blamed (or praised, maybe) for a two-percent drop in the number of Tube passengers in 2017.
The investor list of Deliveroo includes Fidelity, T Rowe Price, DST Global, General Catalyst, Bridgepoint, Greenoaks Capital, Index Ventures, and Accel Partners.
4. Truphone
Truphone, a mobile operator, raised £255m in October from existing shareholders Minden and Vollin Holdings. Both investing companies are linked to Russian billionaire Roman Arkadyevich Abramovich, the owner of Chelsea Football Club.
Truphone has a partnership with Apple in 40 countries, where it offers connectivity for iPad users via Apple SIM. Ralph Steffens, CEO of Truphone, plans to use the new funding to continue the global scaling of the company.
5. TransferWise
In November, TransferWise raised $280m in a round led by Old Mutual Global Investors (OMGI), and IVP. The round was supported by Richard Branson, Andreessen Horowitz, and Baillie Gifford as existing investors.
According to Taavet Hinrikus, co-founder and chairman of TransferWise, the company is now operating £1bn worth international money transfers monthly, which is but a slice of the market. The funding will be used to expand the consumer base.
TransferWise’s valuation is now $1.6 billion, and it has grown 57 times over the past three years. Kristo Kaarman, another co-founder and CEO, attributes this growth to word-of-mouth marketing.
6. OakNorth
A challenger bank, OakNorth, raised £154m in equity, reaching a valuation of $1.3bn in October.
OakNorth is betting on fast financing for UK SMEs, using the AI-powered risk assessment platform ACORN. Rishi Khosla, CEO and co-founder of OakNorth, will use the new funding to boost the bank’s lending by additional £1.5bn.
The new Unicorn got its funding from The Clermont Group, Toscafund, and Coltrane.
7. Neyber
Neyber is a FinTech startup that helps companies offer cheap loans to its employees. In September, Neyber received £115m from Goldman Sachs and existing investors, including former Deutsche Bank’s COO Henry Richotte, and Gaël de Boissard of Credit Suisse investment bank.
Neyber’s co-founder and CEO, Martin Ijaha, plans to use the funding to further grow their client base.
8. Funding Circle
Funding Circle had a very good beginning of 2017. In January, it announced a $100m investment led by Accel and backed by existing investors, including Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek, and Union Square Ventures.
Funding Circle is a peer-to-peer lending marketplace. So far it has facilitated over £5bn worth of loans. Its CEO, Samir Desai, did not waste the funding. After one year, Funding Circle is looking for advisers to help stage its IPO in London. The flotation is supposed to bring over £1bn, making Funding Circle the next Unicorn born in London.
9. Monzo
In November, Monzo, a digital challenger bank, raised £71m from investors, including Goodwater Capital, Stripe, and Michael Moritz. The existing backers — Passion Capital, Thrive Capital, and Orange Digital Ventures — also participated in the round. Earlier, in February, Monzo received £2.5m in crowdfunding, as well as a Series C investment of £19.5m. The company’s valuation is now at £280m.
Tom Blomfield, CEO of Monzo, has been using the funding to continue Monzo’s quick growth. In December, all Monzo users could upgrade from a prepaid card to a Monzo account. On the negative side, the company has just introduced a 3-percent fee on ATM withdrawals abroad.
10. Revolut
£66m raised by Revolut in Series B in July is closing the list, being the 10th highest investment in London Tech Scene in 2017.
The investors who believed in Revolut’s “Beyond Banking” mission of disrupting the banking industry by reducing hidden fees are Index Ventures, Balderton Capital, and Ribbit Capital.
Nikolay Storonsky, founder and CEO of Revolut, is using the cash to expand the business in Asia and North America. Revolut hit the headlines in December 2017 as the company added cryptocurrency trading to its mobile banking offer. What is interesting is the very cheap transaction fee — only 1.5% — which is unusual in the cryptocurrency world.
Idea
London Brief is a weekly selection of essential information about startups, technology and the business scene in London. Got news? Give us a shout at londonbrief@netguru.co.
Piotr Wrzosinski
On behalf of the London Brief Team
