Uber, Ant Financial And The Breakouts That Helped Investors Make The Cut

Every year, TrueBridge analyzes the companies creating significant value for the investors on the annual Forbes Midas List. This year’s list of top ten performance drivers shows that while Chinese companies continue to generate industry-leading returns in VC, a banner year of marquee U.S. technology IPOs proved instrumental in propelling several investors onto the list.

As we predicted in our 2019 Midas List story, the highly anticipated IPOs of Uber and Lyft created some significant changes to 2020’s list of drivers, with Uber coming out on top as the company most influencing investor performance. However, IPOs did not dictate rankings, as only two newcomers to the list – Slack and Lyft – earned their spots due to their debuts on the public markets.

Similar to what we saw in 2019, six of this year’s top ten companies originated in China, including Ant Financial, Meituan-Dianping, Xiaomi, ByteDance, Didi Chuxing and Pinduoduo. Several familiar names, including Alibaba and JD.com, fell off the list to make room for fresh faces (as they exceeded our five-year lookback threshold and were not included in any analysis for this year’s list).

Here are the top ten companies to help investors make it onto Midas in 2020:

1. Uber

While Uber is no newcomer to this list, the company has made the jump to the top spot following an eventful year. Uber’s ascension comes following its much sought after public listing in May 2019, valued at $75.5 billion. Following in the footsteps of fellow ridesharing company Lyft, Uber has seen a steep drop in share price in the wake of its May IPO.

Looking ahead, Uber recently stated that it expects to achieve profitability by the end of fiscal 2020 through cutting spending and improving profit margins in its rideshare and food delivery business, despite estimated losses of $1 billion this year. Maintaining its impressive market share over the past year, the ridesharing giant has further plans to improve algorithms for driver and rider incentives, as well as to sharpen its ability to match drivers and passengers for more efficient routing. Meanwhile, the company set the aggressive target for its UberEats business to become the number one or two player in all the markets in which it operates. This could happen quickly, as UberEats is one of the few businesses that has seen a surge in growth from the onset of COVID-19 as diners rely on delivery services to help them shelter in place at home.

Where it counted the most on the 2020 Midas List*:

·      Bill Gurley | Benchmark | #7

·      Mary Meeker | Bond Capital | #8

·      Eric Paley | Founder Collective | #9

·      Rob Hayes | First Round Capital | #11

·      Bill Trenchard | First Round Capital | #17

·      John Doerr | Kleiner Perkins | #44

·      Shawn Carolan | Menlo Ventures | #57

2. Ant Financial Services Group

Ant Financial, formerly known as Alipay, made its debut on 2020’s list of top drivers following a year of continued growth and success. The private company, established to create a more transparent financial system for China, most recently raised $14 billion in a Series C funding round in 2018, valuing the company at $150 billion post-money.

The Alibaba-affiliated company is best known for its services in mobile payments processing, customer loans, wealth management, and credit ratings, in addition to its financial services cloud platform. As of late, the company has been focused on expanding its payment product internationally through investments in similar businesses in Europe and Southeast Asia. Reflecting its global ambitions, Ant Financial recently applied for a Singapore digital banking license to launch operations in the region. To date, the company has not announced any plans for a near-term IPO.

Where it counted the most on the 2020 Midas List*:

·      Neil Shen | Sequoia Capital | #1

3. Meituan-Dianping

Rounding out the top three is Meituan-Dianping, down one spot from last year’s list.

Founded in 2015 through the merger of two multi-billion-dollar companies, Meituan-Dianping originally focused on providing group discounts (similar to Groupon), and has since evolved into a marketplace providing access to services from local vendors, including hotels, restaurants, and entertainment venues in what it calls its ‘Food + Platform’ strategy. The company was also one of China’s earliest group buying sites.

Meituan-Dianping went public in September 2018 at a $52.8 billion valuation, and, in its first year of trading, saw its share price increase slightly. In 2019, the company announced that it would invest $1.65 billion over the course of the year to support merchants to upgrade their operations and drive growth in China’s delivery economy. Clearly, these investments seem to be reaping benefits – Meituan-Dianping reported an impressive increase of 38.1% year-over-year on its average number of daily food delivery transactions in the third quarter of 2019.

Where it counted the most on the 2020 Midas List*:

·      Neil Shen | Sequoia Capital | #1

·      Hans Tung | GGV Capital | #10

·      JP Gan | INCE | #13

·      Kathy (Xin) Xu | Capital Today | #14

·      James Mi | Lightspeed Venture Partners | #21

·      Steven Ji | Sequoia Capital | #30

·      John Lindfors | DST Global | #48

·      Saurabh Gupta | DST Global | #58

·      Anton Levy | General Atlantic | #74

·      Young Guo | IDG Capital Partners | #85

4. Xiaomi

Making its debut in the top ten is the Chinese hardware, software, and internet services company Xiaomi.

Despite losing half of its market value since debuting on the Hong Kong Stock Exchange in mid-2018, Chinese smartphone maker Xiaomi continues to find new ways to claw back against rivals in China’s intensely competitive smartphone market. Xiaomi is well-known for its low-cost smartphones as well as a wide variety of other internet-connected devices, ranging from watches, speakers, and TVs to rice cookers and air purifiers. Successfully maintaining its market share, the company is currently ranked fourth in China’s smartphone market, after Huawei, Vivo, and Oppo, and one spot ahead of Apple.

Xiaomi has recently rolled out an impressive lineup of new products in a bid to attract additional users to its higher margin internet services, like advertising, games, and flexible screen smartphones. What’s more, Xiaomi is diving headfirst into China’s large and growing virtual banking market, setting up a financial arm that offers loans, insurance policies, and investment products to individuals who use its financial app.

Where it counted the most on the 2020 Midas List*:

·      Richard Liu | Morningside | #6

·      Xiaojun Li | IDG Capital Partners | #19

·      Rahul Mehta | DST Global | #38

·      Scott Shleifer | Tiger Global | #41

·      John Lindfors | DST Global | #48

·      Duane Kuang | Qiming Venture Partners | #69

5. ByteDance

ByteDance fell two spots from #3 on last year’s list, largely due to Ant Financial and Xiaomi’s arrival.

ByteDance is the parent company behind Toutiao, a news-aggregation app that leverages AI technology and unique algorithms to quickly learn what its users like to read and create personalized news feeds based on their preferences, and TikTok, a short-form mobile video platform that gained spotlight late last year following inquiries from CFIUS. ByteDance’s last funding round was in 2018, when it closed on $3 billion in a Series D at a valuation of $75 billion.

Nonetheless, ByteDance has still amassed more than one billion monthly active users across its more than a dozen apps, and TikTok was the fourth most downloaded app globally in 2019. TikTok continues to gain popularity with the younger age demographic in the U.S. and strengthen its position in a crowded marketplace with the likes of Instagram and Snap. Despite clear investor interest in the company, ByteDance has denied any rumors that it plans to go public in 2020.

Where it counted the most on the 2020 Midas List*:

·      Hans Tung | GGV Capital | #10

·      JP Gan | INCE Capital | #13

·      Scott Sandell | New Enterprise Associates | #26

·      Tuck Lye Koh | Shunwei | #42

·      Yi Cao | Source Code Capital | #51

·      Anton Levy | General Atlantic | #74

6. Spotify

Music-streaming giant Spotify made waves after a successful direct listing on the NYSE last year – a decision that surprised many investors and triggered others such as Slack to pursue this path. One year following its IPO, Spotify continues to outperform major competitors, like Apple Music, in terms of subscribers – in February of this year, Spotify’s premium subscriptions level rose to a record 124 million, beating Wall Street expectations and reaching nearly double the number of Apple Music subscriptions.

In its second year as a public company, Spotify made a major push in podcasts and original content to bolster its expansive library of third-party shows. As a result, the company saw 200% growth year-over-year in podcast consumption hours and now boasts nearly 700,000 additional podcast titles. Spotify also recently announced notable partnerships with Google Home, Hulu, and Samsung, among others, in an effort to improve the customer experience and place emphasis on convenience across platforms.

Where it counted the most on the 2020 Midas List*:

·      Mary Meeker | Bond Capital | #8

·      Sameer Gandhi | Accel Partners | #15

·      Lee Fixel | Addition | #16

·      Brian Singerman | Founders Fund | #22

·      Rahul Mehta | DST Global | #38

·      John Lindfors | DST Global | #48

·      Par Jorgen Parson | Northzone Ventures AS | #61

·      Klaus Hommels | Lakestar | #63

·      Sonali De Rycker | Accel Partners | #81

·      Fredrik Cassel | Creandum | #83

7. Didi Chuxing

Didi Chuxing, a veteran member of the top ten, has moved down one spot since last year’s list. Didi Chuxing is one of the leading global mobile transportation platforms and controls over 90% of the ride-hailing market in China. In 2019, the company placed heavy emphasis on global expansion, including introducing food delivery services in Mexico City, preparing infrastructure to launch in Costa Rica, announcing plans to expand into 20 Japanese cities by the end of the year, and launching self-driving rides in select Chinese cities.

Often referred to as China’s version of Uber, Didi Chuxing has recently been in the spotlight as the next operator in this sector to potentially pursue an IPO. However, following Lyft and Uber’s respective public offerings in early 2019 and lackluster post-IPO performance, investors have become increasingly concerned about the value in bringing Didi Chuxing to the public market. The company most recently reached a $57.6 billion valuation after its 2018 funding round.

Where it counted the most on the 2020 Midas List*:

·      Jenny Lee | GGV Capital | #35

·      Allen Zhu | GSR Ventures | #40

·      Scott Shleifer | Tiger Global | #41

·      John Lindfors | DST Global | #48

·      Jixun Foo | GGV Capital | #76

8. Slack

Slack’s 2019  public markets debut brought the company into this year’s top ten drivers. Following in the steps of Spotify, Slack went public through a direct listing in June 2019 and was valued at $23.3 billion. Coming on the heels of Uber and Lyft’s disappointing post-IPO performance, Slack’s choice of a direct listing attracted significant attention from market and industry leaders. Over the first six months of trading, Slack’s share price has fallen significantly despite a 57% yearly increase in revenue.

Slack consistently improved its paid customers metrics in 2019, signifying a diversification in the company’s revenue base. Over 2019, Slack amassed over 110,000 paid customers, a 25% increase year over year. Last year, Slack also announced collaborations with SiriusXM and its subsidiary Pandora Media, and in October 2019, the company announced that it had exceeded 12 million daily active users.

Where it counted the most on the 2020 Midas List*:

·      Andrew Braccia | Accel Partners | #2

·      Hans Tung | GGV Capital | #10

·      Rahul Mehta | DST Global | #38

·      Mike Volpi | Index Ventures | #53

·      Anton Levy | General Atlantic | #74

·      Jules Maltz | Institutional Venture Partners | #75

·      John O’Farrell | Andreessen Horowitz | #78

·      Mamoon Hamid | Kleiner Perkins | #93

9. Lyft

Making its debut in the top ten, Lyft made a splash this year with its initial public offering in March of 2019, which valued the company at $24 billion. While Lyft received early praise for beating Uber in the IPO race, the ride hailing giant’s share price soon fell from $72 to $40.84 over the first six months of trading, and the company reported a $1.1 billion loss in its first quarter earnings as a public company.

Last year, Lyft expanded its alternative ride options – which already included bikes, scooters, and public transit routes – and introduced Lyft Rentals, allowing users to rent cars from the existing Lyft app. Providing additional assurance in the company’s future success, Lyft CEO and co-founder Logan Green recently told audiences at the WSJ Tech Live conference that he expects the company to become profitable by the end of 2021 – one year ahead or original projections.

Where it counted the most on the 2020 Midas List*:

·      Benjamin Horowitz | Andreessen Horowitz | #4

·      Navin Chaddha | Mayfield Fund | #5

·      Ann Miura-Ko | Floodgate | #96

10. Pinduoduo

Pinduoduo has been one of the most successful e-commerce companies in recent years to ride the consumer growth wave as online retail surges in China. The asset-lite e-commerce app is particularly appealing to price-conscious shoppers who receive discounts for enlisting friends to buy the same products, and has gained popularity in China’s smaller cities and rural areas. Following a successful IPO in mid-2018, Pinduoduo saw its share price jump nearly 65% before the outbreak of COVID-19.

Having found its niche in a highly competitive space, the company is now the third-largest e-commerce company in China amongst heavyweights like Alibaba and JD.com – quite a feat for a company to achieve before its fifth year of operations.

Where it counted the most on the 2020 Midas List*:

·      Neil Shen | Sequoia Capital | #1

·      Zhen Zhang | Gaorong Capital (Banyan) | #18

·      Xiaojun Li | IDG Capital Partners | #19

·      James Mi | Lightspeed Venture Partners | #21

*Does not include all investors in the company.


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