What’s Up: Week of February 1st

Rocket startup Astra to go public

Astra, a startup that makes small rockets to send satellites into orbit, is going public at a valuation of $2.1 billion through a deal with blank-check company Holicity, reports Reuters.

The deal with Holicity is expected to provide up to $500 million in cash proceeds. This includes a $200 million private investment led by funds and accounts managed by BlackRock.

Astra’s existing shareholders will own about 78% of common stock of the combined company.

The combined company will remain listed on Nasdaq under the symbol “ASTR”. Founded in 2016, Astra is based in Almeda. PJT Partners acted as financial adviser to Astra, while Deutsche Bank Securities and BofA Securities advised Holicity.

Robinhood raises $2.4 billion

Robinhood has tapped $2.4 billion in funding on top of the $1 billion it raised last week after the online brokerage’s finances were strained due to a retail trading frenzy in heavily shorted shares of companies such as GameStop Corp, reports Reuters.

The latest round of fund injection means that Robinhood has raised more capital in a week than at any point since its inception in 2013, giving it enough financial muscle to meet any funding needs stemming from the trading boom.

The fund raising comes at a time when Robinhood, which has become hugely popular with young investors for its easy-to use interface, is planning a high-profile initial public offering, although it is unclear whether it will push ahead with the plan due to recent developments.

The online brokerage was at the heart of a mania that gripped retail investors last week following calls by Reddit thread WallStreetBets to trade certain stocks that were being heavily shorted by hedge funds.

Clearinghouses ensure the completion of a stock trade even if one side of the deal goes bust.

Robinhood said that it would used the funds to invest in “record customer growth”.

Invite-only chat app Clubhouse booms in Japan

Private social audio app Clubhouse is growing rapidly in Japan and now ranks first among free apps on Apple’s App Store, reports Reuters. This will be a test of its international viability following its latest funding round.

The San Francisco-based app, which users must be invited to join, reached a valuation of $1 billion in the round announced January 24, a source familiar with the matter said confirming media reports. Clubhouse built a following among venture capitalists and startup founders gossiping in its audio-only chatrooms following its launch last March as the COVID-19 pandemic spread around the world.

In Japan, it hit a tipping point over the last week with a swelling user base of investors, tech industry workers and media. Opportunities for spontaneous social interaction have been limited due to the COVID-19 pandemic, with Clubhouse providing an alternative forum to Twitter, one of the most successful social networks in Japan.

Japan has been slow to ride a global boom in audio content, with players like Asahi newspaper belatedly launching their own podcasts.

Grab upsizes debut term loan to $2 billion  

Southeast Asian ride-hailing and food delivery giant Grab has raised $2 billion from its first term loan, reports Ruters. The company is going to expand its regional services.

The five-year senior secured loan was upsized from the initial $750 million after the company secured commitments from international institutional investors.

Backed by investors including Softbank, Grab has evolved from a ride-hailing app operator to a one-stop shop for services such as food delivery, payments and insurance in Southeast Asia, home to about 650 million people. Ranked as Southeast Asia’s most valuable start-up with a valuation of more than $16 billion, Grab recently won a digital bank licence in Singapore.

The loan will be used for general corporate purposes and will allow Grab to diversify its finances.

Grab’s food business, which has benefited from a sector-wide boom in food delivery as countries imposed lockdowns, accounts for more than 50% of its revenue. Grab expects its food delivery business to breakeven by the end of 2021.

JPMorgan was the lead bookrunner on the loan facility, while Barclays, Deutsche Bank, HSBC, Mizuho, MUFG and Standard Chartered were the joint bookrunners.