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Cryptocurrency wallet startup Cobo raises $13M Series A to enter the U.S. and Southeast Asia

Cobo, a cryptocurrency wallet startup headquartered in Beijing, has raised a $13 million Series A to enter new international markets. The round was led by DHVC and Wu Capital, a family office based in China. Cobo plans to expand in the United States and Southeast Asia, in particular Vietnam and Indonesia. Cobo is also now taking pre-orders for Cobo Vault, a hardware wallet (pictured above) that it claims is military grade. Cobo’s Series A brings its total funding to $20 million so far. Cobo Wallet allows users to store both proof-of-stake and proof-of-work coins. One incentive for people to pick the app over its competitors is the ability to pool proof-of-stake assets with other users so they can increase their chances of mining and validating new blocks on the blockchain. Since launching earlier this year, Cobo says its digital wallet has gained more than 500,000 users. The startup was founded last year by CEO Shixing Mao, who is known as Discus Fish in the crypto community, and CTO Changhao Jiang, a former platform engineer at Facebook and Google who co-founded Bihang, a cryptocurrency wallet acquired by OKCoin in 2013. Discus Fish, meanwhile, is known for launching F2Pool, China’s first mining pool. Cobo Vault, which will retail for $479, meets the MIL-STD-810G U.S. military standard for equipment, Cobo’s head of hardware Lixin Liu said in an email, adding that it was built with proprietary firmware created especially for the device, a bank-grade encryption chip and military-grade aluminum. Cobo Vault’s creation was prompted by an August 2017 incident in which F2Pool was hacked and more than 8,000 ETH was stolen from Discus Fish’s account. Fish also refunded customers’ lost ETH from his own assets. “As a result, Discus Fish was resolute on the fact that for crypto to gain mass market adoption, products had to be made to be hacker-resistant and truly safe,” said Liu.

The real-life Emery and Evan from “Fresh off the Boat” launch Batu Capital for cannabis, crypto and big data startups

Brothers Evan and Emery Huang, founders of Batu Capital Restaurateur and raconteur Eddie Huang is the best known of the three “Fresh off the Boat” brothers (it was his memoir that inspired the ABC sitcom), but his younger brothers Emery and Evan remain relatively mysterious even to its most loyal viewers. Though the two’s namesake characters are also prominently featured on the show, their real-life counterparts have kept a much lower public profile, making sporadic appearances on Eddie’s social media. Emery and Evan, however, have been busy investing in real estate and recently branched into tech startups. Though their multi-family investment office Batu Capital just launched this year, it reached a big milestone this week when one of their first investments, MJ Freeway, an enterprise software developer for the cannabis industry, entered into a merger agreement with MTech that will make it part of a Nasdaq-listed holding company. The fictionalized versions of Evan and Emery Huang, portrayed on “Fresh off the Boat” by Ian Chen and Forrest Wheeler. (Photo by Vivian Zink/ABC via Getty Images) In an interview, the two brothers told TechCrunch about moving into the tech sector and the startups they want to fund in the United States, China and Southeast Asia. Batu Capital is focused on finding companies in the cannabis, blockchain and crypto sectors, as well as big data. In addition to MJ Freeway, which provides enterprise resource planning and compliance tracking software for the cannabis businesses, its portfolio also includes Vidy, a startup building a new approach to video ads on Ethereum, and Sora Ventures, a crypto-backed blockchain and digital currency venture fund. Batu Capital invests in seed or Series A stage companies or Series C and pre-IPO and its typical check size will be about $500,000 to $2 million. Though Batu isn’t a single family office, instead raising capital from a network of limited partners for each investment, its creation was motivated by Emery and Evan’s desire to protect their family’s assets after several generations of political and social upheaval. “Long story short, our family has made and lost fortunes more than five times…

Study says the US is quickly losing its entrepreneurial edge

Photographer: Daro Sulakauri/Bloomberg According to a new study conducted by the Center for American Entrepreneurship and NYU’s Shack Institute of Real Estate, the US may be losing its competitive advantage as the dominant nucleus of the startup and venture capital universe.  The analysis, led by senior Brookings Institution fellow Ian Hathaway and “Rise of the Creative Class” author Richard Florida, examines the flow of venture capital over 100,000 deals from 2005 to 2017 and details how the historically US-centric practice of venture capital has become a global phenomenon. While the US still appears to produce the largest amount of venture activity in the world, America’s share of the global pie is falling dramatically and doing so quickly. In the mid-90s, the US accounted for more than 95% of global venture capital investment.  By 2012, this number had fallen to 70%. At the end of 2017, the US share of total venture investment had fallen to just 50%.    Over the last decade, non-US countries have propelled growth in the global startup and venture economy, which has swelled from $50 billion to over $170 billion in size.  In particular, China, India and the UK now account for a third of global venture deal count and dollars – 2-3x the share held ten years ago.  And with VC dollars increasingly circulating into modernizing Asia-Pac and European cities, the researchers found that the erosion in the US share of venture capital is trending in the wrong direction. Growth of global startup cities and the myth of the American “rise of the rest” We’ve spent the summer discussing the notion of Silicon Valley reaching its parabolic peak – Observing the “rise of the rest” across smaller American tech hubs.  In reality, the data reveals a “rise in the rest of the world”, with startup ecosystems outside the US growing at a faster pace than most US hubs. The Bay Area remains the world’s preeminent beneficiary of VC investment, and New York, Los Angeles, and Boston all find themselves in the top ten cities contributing to global venture growth.  However, only six of the top 20 cities are located in the US, while 14 are in Asia or Europe.  At the…

China’s secret startup advantage: liquidity

This year’s rush of IPOs from Chinese tech companies has dominated headlines, but what’s more interesting is how quickly they got there. Traditionally, “going public” represented the gratifying culmination of sleepless nights and missed birthdays that went into building a company. The peak of a lengthy climb, where founders and VCs would finally see the fruits of their labor.  However, Chinese companies appear to be reaching that peak much quicker than their American peers, heading to the public markets only a few years after initial venture investments, and often with little operating history.  Analyzing twenty of the most high profile Chinese tech IPOs this year, the average time from first venture investment to IPO was only around three to five years. Take e-commerce platform Pinduoduo, which pulled in $1.6 billion less than three years after its Series A.  Or the recent IPO of EV-manufacturer NIO, which raised a billion dollars just three-and-a-half years after its Series A and having just delivered its first car in June. China IPO data for 2018 compiled from NASDAQ, Pitchbook, and Crunchbase That’s less than half the average 10-year timeline for venture-backed US tech companies that went public in 2018, including Dropbox, Eventbrite, and DocuSign, which all IPO’d more than a decade after their initial investments. Differences in market maturity, government involvement, and support from large tech incumbents all undoubtedly play a factor, but the speed to liquidity for the Chinese companies is still astounding. Faster liquidity can push cycle of returns, fundraising, reinvestment Speed to liquidity is a critical metric for the health of a startup ecosystem. It creates a positive cycle where faster liquidity can drive faster fundraising, faster reinvestment, faster startup building, and faster public liquidity again.  An accelerated cycle could be especially appealing for funds with LPs that require faster returns due to cash commitments or otherwise. It’s important to note that venture returns are a function of capital and time, so quicker exits will also drive higher returns for the same amount invested.  For example, a $1 million investment with a $5 million exit after ten years would generate an Internal Rate of…

VCs say Silicon Valley isn’t the gold mine it used to be

In the days leading up to TechCrunch Disrupt SF 2018, The Economist published the cover story, ‘Why Startups Are Leaving Silicon Valley.’ The author outlined reasons why the Valley has “peaked.” Venture capital investors are deploying capital outside the Bay Area more than ever before. High-profile entrepreneurs and investors, Peter Thiel, for example, have left. Rising rents are making it impossible for new blood to make a living, let alone build businesses. And according to a recent survey, 46 percent of Bay Area residents want to get the hell out, an increase from 34 percent two years ago. Needless to say, the future of Silicon Valley was top of mind on stage at Disrupt. “It’s hard to make a difference in San Francisco as a single entrepreneur,” said J.D. Vance, the author of ‘Hillbilly Elegy’ and a managing partner at Revolution’s Rise of the Rest Fund, which backs seed-stage companies based outside Silicon Valley. “It’s not as a hard to make a difference as a successful entrepreneur in Columbus, Ohio.” In conversation with Vance, Revolution CEO Steve Case said he’s noticed a “mega-trend” emerging. Founders from cities like Pittsburgh, Detroit or Portland are opting to stay in their hometowns instead of moving to U.S. innovation hubs like San Francisco. “The sense that you have to be here or you can’t play is going to start diminishing.” “We are seeing the beginnings of a slowing of what has been a brain drain the last 20 years,” Case said. “It’s not just watching where the capital flows, it’s watching where the talent flows. And the sense that you have to be here or you can’t play is going to start diminishing.” J.D. Vance says that most entrepreneurs don’t need to move to Silicon Valley. Here’s why. #TCDisrupt pic.twitter.com/0mFPeTuHLe — TechCrunch (@TechCrunch) September 6, 2018 Farewell, San Francisco “It’s too expensive to live here,” said Aileen Lee, the founder of seed-stage VC firm Cowboy Ventures, amid a conversation with leading venture capitalists Spark Capital general partner Megan Quinn and Benchmark general partner Sarah Tavel . “I know that there are a lot of people in the Bay…

Brazilian startup Yellow raises $63M — the largest Series A ever for a Latin American startup

After selling their ridesharing startup, 99, to Didi Chuxing for $1 billion last year, Ariel Lambrecht and Renato Freitas didn’t waste any time throwing their hats back in the ring. Months after their big exit, the pair joined forces with Eduardo Musa, who spent two decades in the bicycle industry, to start another São Paulo-based mobility startup. Yellow, a bike- and scooter-sharing service, quickly captured the attention of venture capitalists, raising a $12.3 million seed round in April and now, the company is announcing the close of a $63 million Series A. The round is the largest Series A financing ever for a startup in Latin America, where tech investment, especially from U.S.-based firms, has historically remained low. 2017, however, was a banner year for Latin American startups; 2018, it seems, is following suit. More than $600 million was invested in the first quarter of 2018, partly as a result of increased activity from international investors. And just last month, on-demand delivery startup Rappi brought in $200 million to become the second Latin American company to garner a billion-dollar valuation. GGV Capital has led the round for Yellow . The Silicon Valley firm is a backer of several other mobility companies, including Grab, Lime, Hellobike and Didi Chuxing. Yellow represents the firm’s first foray into the Latin American tech ecosystem. Brazilian VC firm Monashees, Grishin Robotics, Base10 Partners and Class 5 also participated. “We think there’s a new economy emerging in Latin America,” GGV managing partner Hans Tung told TechCrunch. “A lot of people are more cautious but what we’ve seen with our experience in China, when internet penetration started to happen, a new economy started to emerge that’s more efficient.” The tech investment wave has reached Latin America Yellow’s bikes and e-scooters are only available in São Paulo. With the investment, the startup plans to expand to Mexico City, Colombia, Chile and Argentina, as well as add e-bikes to its portfolio of micro-mobility options. The company also plans to tap into local resources by building a scooter manufacturing facility in the region. Yellow CEO Eduardo Musa told me the company doesn’t want to be reliant…

For Labor Day, work harder

Labor Day is a holiday that just doesn’t fit Silicon Valley. Its purported purpose is to celebrate working men and women and their — our — progress toward better working conditions and fairer workplaces. Yet, few regions in recent times have supposedly done more to “destroy” quality working conditions than the Valley, from the entire creation of the precarious 1099 economy to automation of labor itself. My colleague John Chen offered the received wisdom on this discrepancy this weekend, arguing that Valley entrepreneurs should take the traditional message of Labor Day to heart, encouraging them to create more equitable, fair, and secure workplaces not just for their own employees, but also for all the workers that power the platforms we create and operate every day. It’s a nice sentiment that I agree with, but I think he misses the mark. What Silicon Valley needs — now more than ever before — is to double down on the kind of ambitious, hard-charging, change-the-world labor that created our modern knowledge economy in the first place. We can’t and shouldn’t slow down. We need more technological progress, not less. We need more automation of labor, not less. And we need as much of this innovation to happen in the United States as possible. The tech industry may have become a dominant force by some metrics, but we are only just getting started. Entire industries like freight have little to no automation. Several billion people lack access to the internet, to say nothing of critical, basic infrastructure. Our drug pipeline is anemic, and costs for education, health care, construction, and government are continuing to skyrocket. In short, we have barely scratched the surface of what we can achieve with software, with hardware, with better business models and better automation. These aren’t table scraps, but trillions dollar opportunities lying in wait for entrepreneurs to seize them. And yet, we keep hearing persistent claims that overwork is a problem in the Valley. Discussions of work-life balance are practically de rigueur for startups these days, as are free meals and massages and unlimited vacation time. These demands…

Tencent-backed news aggregation app Qutoutiao files for U.S. public offering

Qutoutiao, a news aggregator app backed by Tencent, has filed for an initial public offering of up to $300 million in the United States. In its F-1 form, the company, whose name means “fun headlines,” said it is the number two mobile content aggregator in China. Its main rivals are Jinri Toutiao, China’s top news aggregator, Tencent’s Kuaibao and Yidianzixun. Based in Shanghai, Qutoutiao reportedly reached unicorn status in March, when it raised a Series B of about $200 million led by Tencent. For Tencent, Qutoutiao and Kuaibao represent opportunities to take market share away from Jinri Toutiao, which is owned by ByteDance. ByteDance is reportedly planning a Hong Kong IPO that could value it at over $45 billion. In its SEC filing, Qutoutiao said that since launching in July 2016, it has achieved monthly average users of about 48.8 million and daily average users of about 17.1 million, with the average time users spend on the app each day totaling about 55.6 minutes in July 2018. To compete with Jinri Toutiao and other rivals, Qutoutiao targets users from China’s smaller Tier 3 cities. Despite increasing levels of disposable income, Qutoutiao says Tier 3 cities, many of which are located in the west of China, are still underserved markets. Qutoutiao also said in its filing that its net revenues increased from RMB 58.0 million (about $8.8 million) in 2016 to RMB 517.1 million (about $78.1 million) in 2017, and from RMB 107.3 million (about $16.2 million) in the six months ended June 30, 2017 to RMB 717.8 million (about $108.5 million) in the same period in 2018. The app uses an AI-based content recommendation engine to display articles and videos based on user profiles and plans to use money raised from its IPO to add more content offerings, increase monetization opportunities and look for acquisition and investment opportunities. Qutoutiao plans to list on Nasdaq under the ticker symbol QTT. The IPO will be underwritten by Citigroup Global Markets, Deutsche Bank Securities, China Merchants Securities and UBS Securities and KeyBanc Capital Markets.

A new foreign investment bill will impact venture capital and the US startup ecosystem

Bobby Franklin Contributor Bobby Franklin is the president and chief executive of the National Venture Capital Association and previously served as an executive vice president for the CTIA – The Wireless Association. More posts by this contributor The startup community must defend merit-based immigration Ensuring foreign-born founders can grow their startups in the U.S. President Trump’s time in office has been punctuated by rising tension with China on a host of economic issues. He’s received bipartisan criticism for the impact of tariffs on Chinese goods and the resulting retaliation against American exports. Democrats and Republicans have also unified over concerns about how Chinese state-associated actors are using minority investments in critical technology companies to gain sensitive information — like IP and know-how — about startups, many of them VC-backed. Policymakers are worried this technology is being used to propel Chinese advancement in emerging technology like artificial intelligence and robotics. These concerns led to passage of the Foreign Investment Risk Review Modernization Act (FIRRMA), which was signed into law by the president on August 13. NVCA has been at the table during FIRRMA’s consideration because it stands to have a significant impact on the venture and startup ecosystem. Who in our industry needs to understand FIRRMA going forward? Many more than you might think. VCs with foreign LPs, VCs with foreign co-investors or startups contemplating taking foreign capital are the prime examples, but given the shifting startup landscape in recent years, FIRRMA will leave a broad mark. FIRRMA expands the power of the Committee on Foreign Investment in the U.S. (CFIUS) to scrutinize foreign investments into “critical technology” companies for national security implications. Few in the startup world have dealt with CFIUS, but those who have understand its power and implications. It’s the opaque government entity that blew up the Broadcom-Qualcomm transaction for national security reasons and has been called the “ultimate regulatory bazooka.” Before FIRRMA, CFIUS reviewed foreign investments for national security considerations when the investment resulted in foreign control of a U.S. entity. But minority investments used to obtain sensitive information about a company have been outside the scope of CFIUS because those investments…

Edith Yeung’s 2018 China Internet Report

500 Partner Edith Yeung just released her 2018 China Internet Report in partnership with SCMP and Abacus. This 97-page report includes everything you need to know about China’s internet landscape including major trends such as e-Commerce, Content and Media, Social and Messaging, the Sharing Economy, Artificial Intelligence, Smart Devices, Autonomous Cars, Blockchain, FinTech, Education, Gaming and eSports. China Internet Report 2018 [Short Version] from Edith Yeung The full report can be downloaded here. Here are some of our takeaways: The Chinese internet giants want and need to do everything. Whether it’s building, investing, or acquiring, Baidu, Alibaba, and Tencent are present across the internet ecosystem. China’s internet empowers the population of smaller cities and rural areas. The number of rural … Read More The post Edith Yeung’s 2018 China Internet Report appeared first on 500 Startups.

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