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Gtmhub raises $9M from CRV after posting 400% ARR growth in the last year

2019, December 12 - 5:15am

This week Gtmhub announced a $9 million Series A led by CRV. The investment was not a large round, even for an A. But the capital found its way into one of the fastest-growing SaaS companies that we’ve spoken with recently, which made it interesting all the same.

And, the firm was willing to talk about its financial performance in some detail. The combination made its Series A impossible to ignore.

TechCrunch caught up with Gtmhub’s CMO Seth Elliott this morning to learn more. 

What it does

Let’s start with OKRs. Objectives and key results, better known as OKRs, are a method for organizational planning. They are famous thanks to their roots in Google’s success, but have since broken free of the technology world and become a well-known planning method for corporations of all sizes and types.

Gtmhub deals with them, providing software and services around OKR implementation, training and tracking. (If you an OKR neophyte, head here for a quick overview of what they are.)

Making OKR software isn’t a differentiator in today’s market. Ally does it (it also raised capital recently), along with WorkBoard, Koan and Lattice, among others.

Given the crowded market, Gtmhub stressed during our call how it thinks of itself as differentiated. The company has three things that it hopes will give it an edge in the market. The first is a focus on enterprise customers. According to Elliott, enterprise-sized clients are his company’s “bread and butter,” from a revenue perspective. Instead of starting with a small or mid-sized business target market and later targeting enterprise-scale customers, Gtmhub is going after the top-end of the market first.

Second, the company’s software is designed to interface with external tooling, allowing for real-time OKR tracking as it ingests information to help teams vet how they are progressing against their goals. And, the firm is working on a marketplace where, over time, customers will be able to learn from existing OKR setups and leverage analytics setups that help with data importation and visibility.

In its own words, Gtmhub is an OKR-centric software company, while “provid[ing] a long-term vision and the execution process necessary to bridge the strategy/execution gap,” according to Elliot.

Notably, Gtmhub, despite its enterprise focus, is not abandoning smaller companies. According to Elliot, the startup is announcing a new, stripped-down, $1 per user per month plan next week called START, aimed at smaller firms.

If START is an attempt to onboard companies when they are small so they can be upsold later, or if it is more a contra-competitor move, isn’t clear. But the new, cheap plan (priced at about 10% of other Gtmhub tiers) could shake up the OKR software space by making table-stakes features worth less than they were before.

Gtmhub’s round

Gtmhub is a distributed company, with offices in Denver, Sofia, Berlin and London for its roughly 60 workers. You might think, given its global footprint and number of employees, that the company had raised lots of capital to fund its operations. The opposite, as it turns out.

The startup’s $9 million Series A dwarfs its preceding rounds, including about $1.3 million in seed capital raised (here) in February of 2018. Aside from those checks and the new capital, all we know about Gtmhub’s fundraising history is that it picked up $100,000 in angel money in early 2017.

All told, Gtmhub has raised just over $10 million to date, making its Series A about 87% of its known raised capital. That’s not the mark of a company built on burn.

Of course, if Gtmhub kept a lid on its expenses by growing slowly, its parsimony might be more sin than virtue; after all, private companies backed with venture dollars are built for expansion.

The opposite, as it turns out.

Growth

Elliot shared a number of notable metrics with TechCrunch that we’ve prepared for you below, in an ingestible format:

  • ARR growth: Over 400% year-over-year (YoY)
  • Gross margin: Above 90%, up from over 80% YoY
  • ACV trends: +650% YoY

Take a moment and square those results with how much capital Gtmhub raised and ask yourself if the performance matches the raise. It doesn’t. I suspect that Gtmhub could have raised a lot more money than it chose to, given its growth rate and other marks of financial health.

But, after expanding to 60 people on less than $3.5 million in known venture, the company probably isn’t too unprofitable, and can do a lot with just $9 million. (Gtmhub could also raise more if it needed to, given its metrics.)

With Gtmhub and Ally each flush with new cash, it’s going to be enjoyable to watch the OKR and OKR-empowered software space grow over the next few years. There will be eventual consolidation, right?

Correction: This post misstated the amount of capital raised by Gtmhub before its Series A and has been corrected.

Photo by Startaê Team on Unsplash

Categories: Business News

Apply to the pitch-off at TC Sessions: Robotics+AI 2020

2019, December 12 - 2:03am

Mark your calendars and dust off your public-speaking skills. This year, there’s an exciting new opportunity at TC Sessions: Robotics + AI, which returns to UC Berkeley on March 3, 2020. We’ve added a pitch-off specifically for early-stage startups focused on AI or robotics.

You heard right. In addition to a full day packed with speakers, breakout sessions and Q&As featuring the top names, leading minds and creative makers in robotics and AI, we’re upping the ante. We’ll choose 10 startups to pitch at a private event the night before the show opens. Here’s how it works.

The first step: Apply to the pitch-off by February 1. TechCrunch editors will review all applications and select 10 startups to participate. We’ll notify the founders by February 15 — you’ll have plenty of time to hone your pitch.

You’ll deliver your pitch at a private event, and your audience will consist of TechCrunch editors, main-stage speakers and industry experts. Our panel of VC judges will choose five teams as finalists, and they will pitch the next day on the main stage at TC Sessions: Robotics + AI.

Talk about an unprecedented opportunity. Place your startup in front of the influential movers and shakers of these two world-changing industries — and get video coverage on TechCrunch, too. We expect attendance to meet or exceed last year’s, when 1,500 people attended the show and tens of thousands followed along online.

Oh, and here’s one more pitch-off perk. Each of the 10 startup team finalists will receive two free tickets to attend TC Sessions: Robotics + AI 2020 the next day.

TC Sessions: Robotics + AI 2020 takes place on March 3. Apply to the pitch-off here by February 1. Don’t want to pitch? That’s fine — but don’t miss this epic day-long event dedicated to exploring the latest technology, trends and investment strategies in robotics and AI. Get your early-bird ticket here and save $100. We’ll see you in Berkeley!

Is your company interested in sponsoring or exhibiting at TC Sessions: Robotics & AI 2020? Contact our sponsorship sales team by filling out this form.

Categories: Business News

Childcare benefits startup Kinside launches with $4 million from investors including Initialized Capital

2019, December 12 - 1:00am

Childcare is one of the biggest expenses for American parents — and it’s not just families that are taking a hit. Childcare issues cost the United States’ economy an estimated $4.4 billion in lost productivity each year and also impacts employee retention rates. Kinside wants to help with a platform that not only enables families to get the most out of their family care benefits, but also find the right providers for their kids. The startup announced the public launch of its platform today, along with $3 million in a new funding round led by Initialized Capital.

This brings Kinside’s total raised since it was founded 18 months ago to $4 million. Its other investors include Precursor Ventures, Kairos, Jane VC and Escondido Ventures.

Founded by Shadiah Sigala, Brittney Barrett and Abe Han, Kinside began its private beta with 10 clients while participating in Y Combinator last summer. Over the past year, it has signed up more than 1,000 employers, underscoring the demand for childcare benefits.

“Getting meetings with employers has not been the hard part,” Sigala, Kinside’s CEO, tells TechCrunch. “Any subject line that says ‘do you want childcare for your employees?’ immediately gets a response. We hit a nerve there and when we talked with them, we found that the biggest pain they expressed was that their employees were having a hard time finding childcare.”

Kinside co-founders Shadiah Sigala, Brittney Barrett and Abe Han

The U.S. is the only industrialized country without a national law that guarantees paid parental leave. Companies like Microsoft, Netflix and Deloitte offer strong family benefits in order to recruit and retain talent, but offering similar packages remains a challenge, especially for small to medium-sized businesses. As a result, many employees, especially women, leave their jobs to care for their children, even if they had planned to continue working.

“The worst case for bigger, more mature companies is a delayed return to work, which has a real impact on the bottom line because of lost productivity, but the deeper pain is when we lose the women,” Sigala says. “It’s documented that 43% of women in the professional sector will leave the workforce within one to two years of having a baby.”

Other startups focused on early childhood care that have recently raised funding include Winnie, for finding providers; Wonderschool, which helps people start in-home daycares and preschools;and London-based childcare platform Koru Kids.

Before Kinside, Sigala co-founded Honeybook, a business management platform for small businesses and freelancers. When she got pregnant, Sigala began developing the company’s family benefit policies and became familiar with the hurdles small companies face.

While in Y Combinator, Kinside focused on streamlining the process of using dependent care flexible spending accounts (FSA), or pre-tax benefits, for caregiving costs, after its founders saw that the complicated claims process meant only a fraction of eligible parents get full use of the program. Kinside still helps parents with their accounts by partnering with FSA administrators. Now their app also includes a network of pre-screened early childcare providers, ranging from home-based daycares to large preschools across the country.

The startup pre-negotiates reserved spots and discounted rates for its users and gives them access to a “concierge” made up of childcare professionals to answer questions. Parents can search for providers based on location, cost and childcare philosophy. Sigala says the startup’s team found that many childcare providers have a 20% to 30% vacancy rate, which Kinside addresses by helping them manage openings and find families who are willing to commit to a spot. In addition to its app, Kinside also plans to integrate into human resources systems.

Initialized was co-founded by Alexis Ohanian, also a founder of Reddit, and a vocal advocate of paid parental leave. One of the areas the firm focuses on is “family tech,” and its portfolio also includes startups like the Mom Project, a job search platform for mothers returning to work.

In an email, Initialized partner Alda Leu Dennis said the firm invested in Kinside because “we have this fundamental problem of gender inequality which can be partially attributed to imbalances in the workplace and at home. We have a gender wage gap and domestic responsibilities, still, largely falling on the mother. By solving a problem that men and women have—access to affordable and high-quality childcare—we can improve this situation.”

Dennis added, “the business model innovation that Kinside brings to the table is to involve employers in the process of bringing peace of mind and stability to their employees’ home lives and in turn making their employees more productive.”

Sigala says Kinside sees itself as part of the benefits equity movement, including paid parental leave and, eventually, universal childcare for all working parents. The platform’s users are split equally between men and women, highlighting that the need for caregiving benefits cross gender lines and impact an entire household.

“It’s a complex issue. Our infrastructure and society is still designed for single breadwinner households and yet the economy means that for most households, being able to pay the bills depends on having two parents working,” she adds. “I see this as a movement. It’s the right time.”

Categories: Business News

Wotch is building a creator-friendly video platform

2019, December 12 - 12:51am

The team at Wotch has created a new social video platform — but wait, don’t roll your eyes quite yet.

“Obviously, we’re very used to someone creating a new internet video-sharing platform,” said co-CEO Scott Willson. “It must be very irritating for everyone to hear that.”

And yet Willson and his co-founder/co-CEO James Sadler have attempted it anyway, and they’re competing today as part of the Startup Battlefield at Disrupt Berlin. They’re only 22 years old, but Sadler said they’ve been working together for the past few years, with past projects including the development of e-learning platforms.

They were inspired to create Wotch because of YouTube’s recent problems around issues like demonetization, where many YouTubers lost the ability to monetize their videos through advertising, and other controversies like an attempted overhaul of its verification system.

Willson said YouTube has been “leaving out creators in terms of communications,” and as the controversies grew, the pair thought, “there has to be a better way of doing this.”

The key, Sadler added, is giving video creators a bigger say in the process: “We’re very hands-on with these creators. We’re not just sending them an automated email.”

In fact, they’re giving creators an opportunity to buy equity in Wotch to get a stake in the company’s success. They’re also appointing a creator board that will be consulted on company policy.

Wotch creators will be able to make money by selling subscriptions, merchandise and ads — not the standard pre-roll or mid-roll ads (which Willson described as “irritants”), but instead partnerships where they incorporate brand products and messages in their videos.

Asked whether this might create the same tension between advertisers and creators that YouTube has been struggling with, Willson argued, “What it comes down to is correctly matching advertisers with creators.” Some advertisers don’t mind working with video-makers who are “pushing the boundaries” — they just need to know what they’re getting into.

Sadler also said that Wotch will be providing creators with more data about their viewers, like identifying their most loyal fans, their most engaged fans and their first “wotchers.”

And the site will take a different approach to content moderation, using technologies like video frame analysis to identify “risky” content, as well as relying more on community moderation. Sadler said it will be a “consensus” approach, rather than the “dictatorship” of other platforms.

“We’re rewarding users for helping to cleanse these platforms,” he added.

Wotch isn’t identifying any of the big creators who he says have signed on, but Sadler told me that the company is largely focused on emerging markets and has already recruited 25 of the top creators in Brazil (where YouTube has an enormous audience, to sometimes detrimental effect) and throughout South America. Those creators won’t be posting on Wotch alone, but they will be creating exclusive videos for the service.

Sadler said it’s those creators who will draw the viewers: “Consumers are loyal to the creators and not the platforms.” And once they’re drawn in, they’ll also experience “a more social platform — see the things your friends are ‘wotching,’ see the things that your favorite creators are ‘wotching.'”

The startup has raised funding from Dominic Smales, the CEO of influencer marketing company Gleam Futures; Bidstack co-founder Simon Mitchell; and Melody VR founder and COO Steve Hancock. Smales is also leading the creator board.

While a beta version of Wotch is already live, Sadler and Willson plan to launch a revamped version of the service early next year. You can get an early preview of the changes by using the promotional code “TECHCRUNCH.”

Categories: Business News

Arthur announces $3.3M seed to monitor machine learning model performance

2019, December 12 - 12:11am

Machine learning is a complex process. You build a model, test it in laboratory conditions, then put it out in the world. After that, how do you monitor how well it’s tracking what you designed it do? Arthur wants to help, and today it emerged from stealth with a new platform to help you monitor machine learning models in production.

The company also announced it had closed a $3.3 million seed round, which closed in August.

Arthur CEO and co-founder Adam Wenchel says that Arthur is analogous to a performance monitoring platform like New Relic or DataDog, but instead of monitoring your systems, it’s tracking the performance of your machine learning models.

“We are an AI monitoring and explainability company, which means when you put your models in production, we let you monitor them to know that they’re not going off the rails, that you can explain what they’re doing, that they’re not performing badly and are not being totally biassed — all of the ways models can go wrong,” Wenchel explained.

Data scientists build machine learning models and test them in the lab, but as Wenchel says, when that model leaves the controlled environment of the lab, lots can go wrong, and it’s hard to keep track of that. “Models always perform well in the lab, but then you put them out in the real world and there is often a drop-off in performance — in fact, almost always. So being able to measure and monitor that is a capability people really need,” he said.

Interestingly enough, AWS announced a new model monitoring tool last week as part of SageMaker Studio. IBM also announced a similar tool for models built on the Watson platform earlier this year, but Wenchel says the involvement of the big guys could work to his company’s advantage since his product is platform-agnostic. “Having a neutral third party for your monitoring that works equally well across stacks is going to be pretty valuable,” he said.

As for the funding, it was co-led by Work-Bench and Index Ventures with participation from Hunter Walk at Homebrew, Jerry Yang at AME Ventures and others.

Jonathan Lehr, a general partner at Work-Bench sees a company with a lot of potential. “We regularly speak with ML executives from Fortune 1000 companies and one of their biggest concerns as they become more data-driven is model behavior in production. The Arthur platform is by far the best solution we’ve seen for AI monitoring and transparency…” he said.

The company, which is based in New York City, currently has 10 people. It launched 2018, and has been heads down working on the product since. Today, marks the release of the product publicly.

Categories: Business News

How to build a diverse board

2019, December 11 - 11:01pm
Ann Shepherd Contributor Ann Shepherd is co-founder of social impact venture Him For Her. She serves on the board of fintech startup HoneyBook.

Over a recent dinner with twenty C-suite executives, one founder-CEO recounted how he was preparing a slide for a company all-hands with headshots of his board of directors when he was struck by the contrast between his gender-balanced employee base and his all-male board.

“It wasn’t something I was proud to share with the team,” he told us, as heads around the table nodded.

The other CEOs in the room got it. A board populated exclusively by men is at odds with efforts to promote diversity and inclusion throughout the organization. For too many CEOs, the composition of their boards can feel more like a liability than a strategic asset.

Board diversity offers an array of benefits, including new perspectives that can improve decision-making and reduce “groupthink,” access to a broader talent pool, and of course the symbolic power of women and minorities at the top rung of the corporate ladder. Yet, according to a collaborative study published today by Crunchbase, Kellogg School of Management and Him For Her, the boards of 60 percent of the most heavily funded venture-backed startups don’t include a single woman

As the study shows, some of the gender imbalance can be explained by the dearth of women founders and funders. With investors composing the majority of private-company board seats, the paucity of female check-writers in the venture community carries through to the boardroom. But the problem goes beyond that. Only 19 percent of independent directors — those appointed without a prior operating or investing relationship with the company — are women.

Why should CEOs care about building boards that bring more women and minorities to the table? To answer this question, we sought input from three chief executives who’ve developed standout boards with an eye toward diversity.

What follows is a synthesis of the advice they shared.

View your board as a strategic asset

Well-functioning boards help CEOs see the bigger picture by providing an external perspective. For Stephane Kasriel, CEO of Upwork, “our board has been the most useful in discovering blind spots, by asking questions that force us to think outside of our day-to-day way of looking at things.” Ripple CEO Brad Garlinghouse says his board brings “a satellite view of the world so that we can analyze global macro trends that may converge or diverge, affecting Ripple’s future.”

For early-stage startups, board members can help address tactical needs, providing introductions to candidates or lending functional expertise to shape strategy. “Over time, you’ll rely on the board for flexing its fiduciary muscle,” according to Zander Lurie, CEO of SurveyMonkey. But “don’t be afraid of governance,” he advises. “A strong board is not your enemy — it’s there to help you thrive.” The bigger risk, he warns, “is in surrounding yourself with a bunch of ‘yes’ directors who heed your commands; that has proven to be a flawed strategy for all stakeholders.”

Build a board that makes you proud

If the most valuable contributions a board can make are to provoke thinking and see around corners, then having a range of voices in the boardroom is critical. For Kasriel, more diversity “means more viewpoints on the same problems. The whole point of having an eight-person board is to have eight very different and complementary — though sometimes conflicting, and that’s OK — perspectives.” 

“It’s important to have diversity of thought to protect the company from groupthink,” adds Garlinghouse. “Also, diverse boards bring different personal networks to bear… as companies scale, especially for startups, the most effective, impactful boards are diverse ones.”

A broader set of skills, life experiences and ways of thinking give CEOs more resources to draw from for assistance. Says Lurie, “a diverse set of perspectives and experiences will help you anticipate and respond to all kinds of challenges in your organization.

Make sure your board has the skill sets and diversity attributes that make you proud to show your employees and customers. You wouldn’t make a TV commercial starring only seven white guys; make sure you exercise the same duty of care when creating your board.”

This isn’t about optics. Lurie points to “one study [that] found that companies with one or more women on their board have 26 percent better share performance than companies with all-male boards. That’s part of why I’m so proud the SurveyMonkey board is comprised of 50% women and 50% men. More voices lead to better leadership.”

Reach outside your network

You’ve heard the argument that board diversity reflects a pipeline problem. Actually, it’s a marketplace problem. There is no shortage of exceptionally-qualified female and minority candidates. The real issue is that within the personal networks responsible for appointing most directors, these candidates are often simply invisible. So how can CEOs tap into this wealth of talent?

“Plenty of us suffer from affinity bias,” Lurie acknowledges. “We unconsciously gravitate toward people who look like us, share the same work background, or maybe went to our alma mater. This homogenous network isn’t going to serve you in building a diverse board, a diverse leadership team, or a diverse organization. Start going out of your way to connect with people who are dissimilar to you.

Find events to attend that wouldn’t normally be on your radar. Ask people you know to connect you with folks they know who might add a unique perspective. Investing in diversity takes effort in the beginning, but it’s well worth it for the gains you’ll see in performance, employee engagement, and more.”

“It’s not really different from any other executive search,” observes Kasriel. “If you’re just leveraging your personal network, then it’s likely to have the same level of diversity as everything else in your personal life which, for many entrepreneurs, isn’t a lot. I’ve also found that simple InMail via LinkedIn works quite well: find someone you really admire, approach them directly, explain to them why you think they could be an amazing addition to your board and why being on your board could be interesting to them.”

Garlinghouse cautions CEOs that, “building diverse boards and leadership teams take time and intention, so make it part of your mission from the beginning — it should not be an afterthought… otherwise, those with the ‘right’ experience who get the big jobs will continue to look the same.”

Always be recruiting

According to Garlinghouse, “CEOs should always be recruiting…it’s always the right time to take that coffee meeting.” 

Kasriel concurs. “Recruiting is the number-two priority for a CEO — number one is, don’t run out of money — and this includes recruiting your board. A great board can have an outsized impact in your ability to succeed, helping you navigate difficult decisions, making sure you have the right strategy and helping you attract great executives, investors, partners and customers.”

Focus on competencies, not titles

When it comes to defining the ideal new board member, traditional wisdom says to look for a current or former CEO. But increasingly today’s chief executives reject that advice which inherently favors male candidates. Instead they focus on adding key competencies to fill out the expertise in their boardrooms.

The first step is to assess your current board. “Take stock of where your board stands today and where you have gaps to fill,” counsels Lurie, “and draw a distinction between the titles listed on someone’s resume and the competencies they bring to the table.”

Kasiel explains that, in building out the Upwork board, “We were very thoughtful in finding people who brought a specific expertise.” Recently added directors were selected for their deep knowledge of finance and operations, enterprise sales and M&A and tech marketing.

“But equally importantly,” he adds, “we wanted board members who were passionate about the mission of Upwork — to create economic opportunities so people have better lives — and were aligned with our value of maximizing value for all stakeholders, not just our stockholders.”

Garlinghouse suggests that CEOs “pay attention to what’s happening in adjacent verticals, especially if you’re in a space that’s constantly evolving; the perfect director might not — and likely won’t — have a career dedicated to what your company does, but skills always transfer.”

“One potentially controversial tip,” offers Kasriel, “consider hiring ‘more junior’ board members. In tech, things move really fast and someone who has been a CMO for 20+ years may not know as much about recent marketing technology tools or marketing practices such as ABM and Inbound Marketing. The first 15 years of that 20-year experience may not be all that useful.”

Add independent directors early

When should a startup add its first independent director? According to these CEOs, it’s never too early.

The first independent director at Upwork joined the board about six years before the company’s IPO. “I don’t think it was too early,” recalls Kasriel. “In fact, I often advise early stage companies to add an independent board member as early as they can.”

“It’s never too early to have an independent director on the board,” agrees Garlinghouse at Ripple, where the first independent was appointed only a year after the company’s founding. “The advantage of having independent directors,” he points out, “is that CEOs can prioritize diversity of thought because they are not constrained by board seats controlled by shareholders… With independent directors, CEOs have more flexibility in choosing an expertise in a specific area or a unique experience that’s currently lacking to bring companies to the next stage of scale.”

To CEOs worried about upsetting board dynamics, Kasriel responds, “the whole point of adding a new director is to change board dynamics! Obviously, you can make a bad hire on the board, just like you can make a bad hire on your management team, so it’s very important to make sure that the new board member is not only chosen well but also onboarded professionally so they can contribute fully to the functioning of the board. The onboarding may require existing board members to also evolve how they themselves operate. It goes both ways.”

Categories: Business News

Albo raises $19M Series A to scale Mexico’s largest neobank

2019, December 11 - 11:00pm

Another startup hoping to capitalize on the fintech opportunity in Mexico has closed on a new sum of funding. Mexican challenger bank Albo has secured a $19 million extension to its Series A financing, led by U.S.-based Valar Ventures. The neobank previously raised $7.4 million at the beginning of 2019, bringing the company’s total Series A funding amount to $26.4 million.

This marks one of the larger early rounds for a Mexican startup. Albo joins the ranks of other Mexican startups that have raised larger-than-average Series A rounds, like Y-Combinator backed scooter company Grin that scored a $45.7 million Series A and Klar, the Chime clone that raised $57.5 million in debt and equity seed funding.

Albo is Valar Ventures’ first foray into Mexico, though it has a penchant for neobanks broadly. The fund, which was founded by Peter Thiel, notably invested in N26 and TransferWise.

Mountain Nazca and Flourish Ventures also joined Albo’s Series A. 

In its current form, Albo is a Mastercard debit card and a personal finance app that allows customers to open a bank account in five minutes through a branchless experience. 

The challenger bank tech startup concept is one of the most lucrative opportunities in Mexico — which is the second largest economy in Latin America behind Brazil. Out of the 130 million population of Mexico, 45% are underbanked. While underbanked users have access to bank accounts, deep financial products designed to help them compound wealth through lending and savings features do not exist in the Mexican market through traditional banks. This leaves what founder 31-year-old Angel Sahagun describes as a total addressable market of 59 million people in Mexico alone.

Traditional banks don’t serve the Mexican population. Existing incumbents shy away from lending, lack transparency, have high fees and are known for bad customer service. 

Albo says it owns the market share in Mexico with 200,000 monthly active customers who are spending and making transactions in its platform. But it is far from the only consumer neobank option in the country. Brazil’s Nubank, one of the most high-funded startups in all of Latin America, expanded into Mexico in May of this year. Nubank says it has 8.5 million clients in Brazil, and the startup is reportedly fundraising at its $10 billion valuation. Not to mention the threat posed by European startups like N26 and Revolut that have reportedly had their eye on the Mexican market. 

The Albo team has raised $26.4 million to scale its leading neobank.

Sahagun says that while there may be some overlap in Nubank and Albo customers, the offerings are different. Nubank issues credit cards for people with existing credit history — not the same target customer as Albo. 

Either way, with a new Mexican fintech product launching or getting funded seemingly every day, the market is growing saturated. That’s great for the ecosystem and for customers to have so much competition. But this will raise challenges around acquiring customers and hiring, and fundraising will undoubtedly get harder for those who want a piece of the Mexico fintech pie. 

In the meantime, founders are taking more of a collaborative rather than competitive stance. “This isn’t a winner takes all market,” says Sahagun, arguing that the financial market in Mexico is diverse enough to thrive with numerous financial products. 

Sahagun says the capital will be used to expand leadership roles and speed up customer acquisition. Albo will use the capital to build out new features: a savings product that lets users improve spending and saving habits, and what it says will be a transparent and easy-to-use lending option for customers who want access to loans. 

Categories: Business News

Hyperproof wants to make it easier to comply with GDPR and other regulations

2019, December 11 - 11:00pm

As companies try to figure out how to comply with regulations like GDPR, ISO or Sarbanes Oxley, they face a huge challenge just getting started. Hyperproof, a Bellevue, Washington startup, is launching a new product to help companies build a workflow to get them in compliance in a more organized way.

Company co-founder and CEO Craig Unger says most companies struggle with the complexity of compliance. It involves a lot of different activities and often requires the cooperation of employees, who typically aren’t involved in compliance.

Hyperproof wants to provide a single place where companies can undertake their compliance activities. “In reality, there’s no single place where if you’re a compliance officer, you can say, ‘here is where I do my work’. Here is the equivalent of my SAP system for a CFO or my CRM system for a head of sales or head of marketing — and Hyperproof is just that,” Unger explained.

He says most companies do compliance today in a fairly ad hoc way, relying on technology like spreadsheets to track tasks, and email to make requests for needed information. What Hyperproof does is package all of that into a single program. You indicate what compliance regimen you want to work with, and Hyperproof builds a workspace for you with all of the requirements you need for that compliance framework.

Unger says at this point, the company is simply putting all of the tasks in a single workflow to simplify and organize your activities around this compliance framework.You can also import a spreadsheet to get that information inside Hyperproof, or outline the requirements in your own language in the program.

“Once you have a defined program in place, you can start working with the rest of the organization in a collaborative way by sending emails. The evidence that comes back gets put inside Hyperproof as an immutable record with an audit trail around this data collection,” Unger explained. Should you get audited, you have a central place to show the auditor your work.

The company has concentrated on building the workflow part of this, but in the future wants to add automation and APIs to connect directly to other systems to automate many of the activities. The goal with the initial release was to get companies a compliance framework workflow, and then build on that in the future.

The company was founded last year and has raised $3 million from 23 angel investors in the Seattle area where they are based. In fact, Unger is a former Microsoft employee and also helped found Azuqua, a workflow startup he sold to Okta this year for $52.5 million.

Okta to acquire workflow automation startup Azuqua for $52.5M

Categories: Business News

Refocusing on relocation, Jobbatical launches new offices in Spain and Germany

2019, December 11 - 10:55pm

I’ve been following Estonia-headquartered Jobbatical and its founder, Karoli Hindriks, for years. Part of the vanguard of startups working on infrastructure for digital nomads, the startup has been building the base platform to help global job seekers hire and fire their governments.

Digital nomads are hiring and firing their governments

As Jobbatical has worked with more and more companies and governments though, it has learned that the friction here is not just finding employment globally for talented individuals, but rather the actual process of applying for immigration and work permits, ranging from forms that must be filed in person to the hours of labor it can take to fill out an application.

“What started to happen was that the relocation part… became something that the clients came back to us and said, ‘Can you do relocation for everyone and not just those coming through Jobbatical?’” Hindriks explained.

Last year, Jobbatical began to refocus its platform on powering relocation for workers at companies, and now its new strategy is coming into focus with the launch of the company’s new offices in Spain and Germany, announced on stage earlier today at TechCrunch Disrupt Berlin.

In the process, the company hopes to not just make the immigration process easier — but also much faster.

“How much time are government officials doing dummy work?” Hindriks asked. “30-40% of the consulate’s time is spent on answering the question of ‘what is the status of my visa?’”

The problem is that feedback in the immigration system is not available to all the players involved. Immigration process agents at companies who handle their workers’ visas have to constantly search around to make sure they are moving each of their cases forward. Managers have no idea when their workers may move, while employees are kept in the dark about their current status, inducing anxiety.

Hindriks’ vision is to help each of these three sides use a “TurboTax for immigration” to streamline the process. Jobbatical now can handle immigration applications in Estonia, Germany, and Spain and hopes to add Finland early next year.

But the more ambitious vision is ultimately to help governments drive their processes faster. Similar to how, say, the U.S. tax agency the Internal Revenue Service offers eFiling, Hindriks sees a future where Jobbatical can help facilitate immigration filings and massively speed up the efficiency of governments around these processes by allowing workers to directly submit applications to the government. She is working with two countries today to create exactly these sorts of digital submission systems.

It’s a space that has heated up in recent years as immigration continues to flow across the world. Boundless, for instance, helps individuals apply for U.S. green cards. Jobbatical is focused on the B2B market, focused on companies with global workforces.

Despite the deep debate in many countries over immigration, the reality is that every country has skills deficits that can be helped with smart and efficient immigration. Jobbatical is one company that may make the system more fair and relaxing for stressed workers looking to build their international careers.

Learn how to scale your startup globally at Disrupt Berlin

Categories: Business News

Price insurance platform Stable protects farmers from price volatility

2019, December 11 - 9:56pm

From a Southwest England farmer’s son comes a risk-management platform, Stable, a solution as simple as car insurance designed to protect farmers around the world from pricing volatility.

Using Stable, food buyers ranging from owners of a small smoothie shop to Coca-Cola employees can insure thousands of agricultural commodities, packaging and energy products. Led by founder and CEO Richard Counsell, London-based Stable has raised a $6 million seed round from Anthemis Group, agricultural company Sygenta and the Canada Pension Plan Investment Board.

“I knew instinctively what a huge problem and how much damage volatile pricing does,” Counsell, who comes from a long line of farmers in Somerset, England, tells TechCrunch. “You could say it was in my blood. It’s not often you get the chance to bring two sides of your world together.”

After four years of research and development, Stable is launching on stage today at TechCrunch Disrupt Berlin. For the former currency trader and farmer-turned-CEO, building the data-rich risk management platform was no easy task. To adequately protect farmers, Stable’s team of data scientists, analysts and developers collected 3,000 niche and un-traded indexes from 40 countries, allowing customers to match their risk to a local index.

“We make it simple and precise for businesses of every size and every sector to protect their business from volatile prices,” Counsell said. “Everything from fish to timber to food and then the packaging as well energy, whether that be fuel or electricity.”

Counsell said the business plans to set up shop in Chicago, the global epicenter for commodities risk management, and Sydney, a massive commodity producer, as soon as next year. For the foreseeable future, Stable will focus solely on the agri-food industry, worth more than $4 trillion, according to Stable’s statistics. Eventually, Counsell says Stable will expand to include other sectors like metals or construction.

“Almost every business on the planet is exposed to one commodity,” Counsell said, alluding to the company’s grand ambitions.

Categories: Business News

Clideo promises an easy way to make shoppable videos

2019, December 11 - 9:38pm

Clideo says it can help marketers reach consumers in a smarter way, by making videos shoppable via an “interactive overlay.”

CEO Michele Mazzaro (who previously worked as an executive at Ki Group and in mergers and acquisitions at KPMG Italy) said these videos are meant to address a larger issue: “Businesses are failing in communicating on digital media. I don’t remember the last time I clicked on a banner, pre-roll or mid-roll ad. I hate it as a consumer.”

To address this, Mazzaro and his co-founders Nitzan Mayer-Wolf and Andrea Iriondo have created what Mazzaro described as a way to “turn any video into a discovery experience.” They’re presenting the product today at Disrupt Berlin as part of our Startup Battlefield.

Although the videos are described as interactive, the Clideo team isn’t trying to power the kind of branching narratives popularized by startups like Eko (not to mention Netflix’s “Black Mirror” special “Bandersnatch”), but rather taking a standard video and adding new capabilities around the products featured — the ability to buy something, save it to a wishlist or share it on social media.

Mazzaro argued that these features give marketers crucial data about which audiences are engaging with which products.

“Stop throwing your video budgets into the garbage and undersatnad why your consumers are engaging with you,” he said.

Clideo videos require their own video player, so they can’t be played directly on YouTube or social media. However, Mazzaro noted that they can be promoted on Facebook, Twitter and elsewhere via links.

And despite this limitation, Madrid-based Clideo has already been tested by e-commerce websites, including Spain’s Modalia.com, with conversion rates as high as 33%.

Interactive and/or shoppable video isn’t a new idea, but Mazzaro said most existing solutions either come from creative agencies working with a limited number of luxury brands, or video marketing platforms that include very limited interactive capabilities.

Mazzaro contrasted this with Clideo, which he said is creating “the do-it-yourself solution without compromising creativity.” In fact, he said an interactive video can be created in as little as five minutes.

He also argued that Clideo is differentiated by its business model — where, in addition to a monthly subscription, customers pay an additional fee tied directly to Clideo’s results driving viewers to checkout pages.

“We’re the only ones to align our goals to our customers,” Mazzaro said.

Clideo has been bootstrapped thus far. Mazzaro said that the product is available globally, though early customers are likely to be based in Spain, Italy and Israel.

Categories: Business News

Nodle crowdsources IoT connectivity

2019, December 11 - 9:32pm

Nodle, which is competing in the TechCrunch Disrupt Berlin Startup Battlefield this week, is based on a simple premise: What if you could crowdsource the connectivity of smart sensors by offloading it to smartphones? For most sensors, built-in cell connectivity is simply not a realistic option, given how much power it would take. A few years of battery life is quite realistic for a sensor that uses Bluetooth Low Energy.

Overall, that’s a pretty straightforward idea, but the trick is to convince smartphone users to install Nodle’s app. To solve this, the company, which was co-founded by Micha Benoliel (CEO) and Garrett Kinsman, is looking to cryptocurrency. With Nodle Cash, users automatically earn currency whenever their phones transmit a package to the network. That connection, it’s worth noting, is always encrypted, using Nodle’s Rendezvous protocol.

The company has already raised $3.5 million in seed funding, mostly from investors in the blockchain space: Blockchange, Work Play Ventures (Marc Pincus), Blockchain Ventures (Blockchain.com), Olymp Capital, Bootstraplabs and Blockhead.

It’s worth noting that this isn’t Benoliel’s first rodeo in this space. He also co-founded the mesh networking startup Open Garden, which used a somewhat similar approach a few years ago to crowdsource connectivity (and which made a bit of a splash with its FireChat offline chat app back in 2014). Open Garden, too, competed in our Startup Battlefield in 2012 and won our award for most innovative startup. Benoliel left his CEO position there in early 2016, but Nodle definitely feels like an iteration on the original idea of Open Garden.

“We define the category as crowd connectivity,” Benoliel told me. “We leverage crowdsourced connectivity for connecting things to the internet. We believe there are a lot of benefits to doing that.” He argues that there are a number of innovations converging right now that will allow the company to succeed: Chipsets are getting smaller, and an increasing number of sensors now uses Bluetooth Low Energy, all while batteries are getting smaller and more efficient and blockchain technology is maturing.

Given the fact that these sensors depend on somebody with a phone coming by, this is obviously not a solution for companies that need to get real-time data. There’s simply no way for Nodle to guarantee that, after all. But the company argues it is a great solution for smart cities that want to get regular readouts of road usage or companies that want to do asset tracking.

“We do not address real-time connectivity, which is what you can do with more traditional solutions,” Benoliel said. “But we believe IoT is so broad and there is so much utility in being able to collect data from time to time, that with out solution, we can connect almost anything to the internet.”

While some users may want to simply install the Nodle Cash app to, well, make some Nodle cash, the team is also betting on working with app developers who may want to use the platform to make some extra money from their apps by adding it to the Nodle network. For users, that obviously means they’ll burn some extra data, so developers have to clearly state that they are opting their users into this service.

[gallery ids="1922759,1922749,1922756"]

The team expects a normal user to see an extra 20 to 30 MB of traffic with Nodle installed, which isn’t really all that much (users of the standalone Nodle app also have the option to cache the data and postpone the transfer when they connect to Wi-Fi). Some app developers may use Nodle as an alternative to in-app payments, the team hopes.

The company is also already working with HTC and Cisco Meraki, and has a number of pilot projects in the works.

If you want to give it a try, you can install the Nodle Cash app for Android now.

Categories: Business News

Larry Page’s secret war on the flu

2019, December 11 - 9:05pm

Now that Larry Page has stepped down as CEO of Google’s parent company Alphabet, he could be following in Bill Gates’s footsteps and tackling global health challenges.

Google CEO Sundar Pichai is taking over as CEO of Alphabet

According to charity and business documents obtained by TechCrunch, the billionaire co-founder of Google has been quietly waging a war on the flu.

Thousands of children and teachers in San Francisco’s Bay Area will receive free flu shots at their schools this year from Shoo The Flu, which describes itself as a “community-based initiative.” In fact, it is wholly funded by a for-profit company controlled by Page. Another of his companies, Flu Lab, is supporting multi-million dollar efforts to develop a universal flu vaccine. Neither effort makes public Page’s role in them.

Categories: Business News

Inovat modernizes tax reimbursement for streamlined international shopping

2019, December 11 - 8:20pm

If you’ve ever traveled to Europe and purchased something, you’re either likely aware that you can get the Value-Added Tax (VAT) reimbursed once you depart since it’s actually only intended for taxpaying residents of the country wherein its charged. Whether or not you actually bother to get your VAT reimbursement might depend on how convenient it is to do so, and generally speaking, the process is paper-based and pretty annoying. Inovat is a startup that aims to simplify and digitize the process so that it’s not such a pain, opening the door for people to get more of the money they’re rightly owed.

Inovat accomplishes this with an app, available on mobile or on desktop, which employs optical character recognition (OCR) and machine learning to interpret receipts you upload or photograph, determine how much VAT you should be owed for your purchase, and prepare the requisite forms for submission to a customs officer or via an online customs filing form like those found at some airports.

Inovat co-founders Ilya Melkumov and Sonya Baranova came up with the idea because they themselves had encountered the problem of VAT remittance many times, as Russian and Ukranian nationals respectively, traveling within Europe and making purchases on their trips. Melkumov, a former professional e-sports player, met Inovat’s CTO Igor Titov while playing games online, after the two struck up a conversation about getting VAT returns.

Melkumov and Baranova both believed the outdated process, which included high fees and often required paper forms or a lot of manual work to track receipts, could benefit from technologies that are helping improve and modernize other areas related to economics, like the finance industry. They mapped out the currently available solutions, figured out what the industry didn’t yet have and where they could offer solutions. They then quickly got to work building the actual product.

“In July we got together, and by September we had the first version of the product and we started testing it ourselves,” Melkumov told me in an interview. “From there, we started automating parts of it – we had to solve the scalability, we had to understand how we could scan and extract the information from the recipes in a scalable manner.”

That’s where Titov came in, bringing experience from work done for banks and other clients to help make it technically feasible. The resulting app is easy to use, and takes what was a painful and complicated process and makes it as easy as remembering to snap a photo when you make a purchase. They also say they can return up to 50 percent greater refunds to customers versus traditional methods.

“You go to a store, you get the receipt, you take a picture of the receipt,” Melkumov explained. “Then we analyze the receipt and create a unique digital form, which has all your receipts compiled in one digital form linked to a QR code and then you scan that with the customs officer (or automated scanning) and get that processed right away.”

Inovat is focused entirely on the U.K. right now, and its product is designed specifically for that reimbursement flow. That market alone represents $4.3 billion, Melkumov estimates, so it’s large enough for them to focus on it narrowly for now. But, he adds that they definitely have their eye on potential expansion down the road.

“The European market is around $20 billion, and we’ve been contacted by multiple European governments towards creating a more digital tax refund solution,” he said. “Next steps for us is definitely expansion into other European countries.”

Categories: Business News

Hawa Dawa monitors air quality block-by-block to help cities make decisions

2019, December 11 - 7:45pm

 

If city governments had a block-by-block understanding of their city’s own ever changing air quality, how might it impact the decisions they make?

Thats the concept behind Hawa Dawa, the first company pitching today in the TechCrunch Disrupt Berlin Startup Battlefield. Hawa Dawa combines data sources like satellites and dedicated air monitoring stations to build a granular heat map of air pollutants, selling this map to cities and companies as a subscription API.

While the company notes it’s hardware agnostic, it does build its own IoT sensors for companies and cities that might not have existing air quality sensors in place.

(Curious about the name? Co-founder Karim Tarraf tells me it’s roughly based on the words for “air purity” or “air medicine” in a number of languages, including Swahili, Turkish, and Persian.)

With this data, a city could, for example, opt to change how it routes traffic to minimize vehicle exhausts in particularly polluted streets and monitor how changes are actually impacting the air. A real estate company might help customers with pulmonary issues like asthma find potential homes in neighborhoods that tend to have the cleanest air. Shipping companies could potentially use the data to better plan their sea routes to minimize the impact of emissions.

Hawa Dawa’s data currently covers over 20 cities across Germany, Switzerland, and the UK.

They’ve raised over €1.2m to date, with plans to close another “pre-series A” round shortly.

Categories: Business News

Accel and Index back Tines, as the cybersecurity startup adds another $11M to its Series A

2019, December 11 - 6:00pm

It was just a couple of months ago that Tines, the cybersecurity automation startup, raised $4.1 million in Series A funding led by Blossom Capital, and now the Dublin-based company is disclosing an $11 million extension to the round.

This additional Series A funding is led by venture capital firm Accel, with participation from Index Ventures and previous backer Blossom Capital. The extra cash will be used to continue developing its cybersecurity automation platform and for further expansion into the U.S. and Europe.

Founded in February 2018 by ex-eBay, PayPal and DocuSign security engineer Eoin Hinchy, and subsequently joined by former eBay and DocuSign colleague Thomas Kinsella, Tines automates many of the repetitive manual tasks faced by security analysts so they can focus on other high-priority work. The pair had bootstrapped the company as recently as October.

“It was while I was at DocuSign that I felt there was a need for a platform like Tines,” explained Hinchy at the time of the initial Series A. “We had a team of really talented engineers in charge of incident response and forensics but they weren’t developers. I found they were doing the same tasks over and over again so I began looking for a platform to automate these repetitive tasks and didn’t find anything. Certainly nothing that did what we needed it to, so I came up with the idea to plug this gap in the market.”

To remedy this, Tines lets companies automate parts of their manual security processes with the help of six software “agents,” with each acting as a multipurpose building block. The idea is that, regardless of the process being automated, it only requires combinations of these six agent types configured in different ways to replicate a particular workflow.

In addition, the platform doesn’t rely on pre-built integrations to interact with external systems. Instead, Tines is able to plug in to any system that has an API. “This means integration with commercial, off-the-shelf products, or existing in-house tools is quick and simple, with most security teams automating stories (workflows) within the first 24 hours,” says the startup. Its software is also starting to find utility beyond cybersecurity processes, with several Tines customers using it in IT, DevOps, and HR.

“We heard that Eoin, a senior member of the security team at DocuSign (another Accel portfolio company), had recently left to start Tines, so we got in touch,” Accel’s Seth Pierrepont tells TechCrunch. “They were in the final stages of closing their Series A. However, we were so convinced by the founders, their product approach, and the market timing, that we asked them to extend the round”.

Pierrepont also points out that a unique aspect of the Dublin ecosystem is that many of the world’s largest tech companies have their European headquarters in the country (often attracted by relatively low corporation tax), “so it’s an incredibly rich talent pool despite being a relatively small city”.

Asked whether Accel views Tines as a cybersecurity automation company or a more general automation play that puts automation in the hands of non-technical employees for a multitude of possible use cases, Pierrepont says, given Hinchy and Kinsella’s backgrounds, the cybersecurity automation sector should be the primary focus for the company in the short term. However, longer term it is likely that Tines will be adopted across other functions as well.

“From our investment in Demisto (which was acquired by Palo Alto Networks earlier this year), we know the security automation or SOAR category (as Gartner defines it) very well,” he says. “Demisto pioneered the category and was definitively the market leader when it was acquired. However, we think the category is just getting started and that there is still a ton of whitespace for Tines to go after”.

Meanwhile, in less than a year, Tines says it has on-boarded 10 enterprise customers across a variety of industries, including Box, Auth0 and McKesson, with companies automating on average 100 thousand actions per day.

Categories: Business News

Wefox, the Berlin-based insurtech, raises $110M Series B extension at a $1.65B pre-money valuation

2019, December 11 - 4:00pm

Wefox Group, the Berlin-based insurtech startup behind the consumer-facing insurance app and carrier One and the insurance platform Wefox, is disclosing $110 million in a second tranche of Series B funding. Sources tell TechCrunch that this gives the company a pre-money valuation of $1.65 billion. WeFox Group declined to comment on the financials.

The Series B extension is led by Omers Ventures, the venture capital arm of Canadian pension fund Omers. Merian Chrysalis and Samsung Catalyst Fund, also participated, along with existing investors.

It follows an earlier Series B of $125 million in March, led by Abu Dhabi government-owned Mubadala Ventures, with participation from Chinese investor Creditease. Wefox’s other existing investors include Target Global, Salesforce Ventures, Seedcamp, Idinvest and Hollywood actor Ashton Kutcher’s investment vehicle Sound Ventures.

In a call, Wefox co-founder and CEO Julian Teicke told me the Wefox Group has grown revenues to over $100 million, and now services more than 500,000 customers, claiming that this makes it Europe’s “leading insurtech”.

He also revealed that the company has grown to 400 employees, which, he says means he can no longer remember every employee’s name. “That sucks,” he tells me, revealing that it was only this summer when the company was smaller that he won a company-wide bet for being able to do just that.

Breaking WeFox Group’s revenue down further, the company’s direct to consumer insurance brand, One Insurance, has increased annual revenues by nearly tenfold this year to $30 million. It also claims to be Germany’s fastest growing provider for household and private liability insurance.

Perhaps more significantly, Teicke says One’s loss ratio (what percentage of premiums earned is subsequently paid out in claims) is below 40%, which is much better than the industry as a whole. He pinned that on WeFox’s use of data, which, he says, enables One to understand risk in a much more technology-driven and granular way.

Meanwhile, Teicke says the new funding will be used to continue ramping up international expansion in 2020. Wefox is active in Germany, Austria, Switzerland and Spain, and I understand has quietly launched in Italy.

Adds Henry Gladwyn, principal at OMERS Ventures, in a statement: “We are thrilled to continue our support of Julian and the incredibly ambitious Wefox Group team as they continue to disrupt and re-invent the insurance industry. We believe wefox Group’s approach to revolutionizing insurance – empowering the consumer and prioritizing solutions for secured data-driven experiences – will deliver significant value for the entire trade”.

Categories: Business News

Electric vehicle startup Nio lays off 141 employees at its North American headquarters

2019, December 11 - 12:12pm

Electric vehicle startup Nio is laying off 141 people at its North American headquarters. According to a filing from Employment Development Department of California, the employees at its San Jose office received notice on December 6.

Nio, whose global headquarters are in Shanghai, announced last month that it is partnering with Intel’s Mobileye to develop autonomous vehicles for consumers. Under the agreement, Nio will engineer and produce a self-driving system designed by Mobileye.

The Intel partnership was a spot of bright news after a difficult year for Nio. Nio’s third quarter saw an uptick in sales, thanks in part to competitive pricing, but its share prices have fallen about 78% since the end of February.

The company reported losses in the first and second quarters of the year and in June, voluntarily recalled 5,000 of its ES8 electric SUVs after battery fires in China, impacting its production and delivery. CEO William Li said during the company’s earnings report in September that it would implement cost-cutting measures, including reducing its workforce from 9,900 people down to 7,800 by the end of the third quarter. Nio has offices in 11 cities, including Beijing, London and Munich.

Categories: Business News

Carsome raises $50M for its used-car sales platform in Southeast Asia

2019, December 11 - 10:07am

Carsome, a Malaysia-based marketplace for trading used cars, has closed a new $50 million financing round to fend off its rivals and grow its business in Southeast Asian markets.

The new financing round, dubbed Series C, was funded by MUFG Innovation Partners (MUIP), the corporate venture capital arm and a wholly owned subsidiary of Mitsubishi UFJ Financial Group (MUFG); Daiwa PI Partners, the private equity arm of Japan’s securities group Daiwa Securities; Endeavor Catalyst; and Ondine Capital.

Existing investors, including Gobi Partners and Convergence Ventures, also participated in the round, which pushes the four-year-old startup’s total raise to date to $85 million.

Carsome operates one of the largest car-trading platforms in Southeast Asia, connecting with dealers individuals who wish to sell cars. The startup is today operational in Malaysia, Indonesia and Thailand and claims its platform sees more than 40,000 cars worth more than $300 million trade on the platform.

The startup, which employs about 700 people and has been used by more than 6,000 dealers, also offers dealers and sellers with financing options.

Carsome uses an online auction model to conduct sales, with prospective cars typically listed the day after they are submitted by consumers (following a check-up conducted by the startup’s staff).

This approach allows dealers to check in at a set time each day to look over the cars on offer, while the focus on vetting autos quickly — Carsome can dispatch vehicle checkers directly to a prospective seller’s home — means that consumers can quickly get a sale.

The auction model adds competition and the potential for a seller to make more money than they originally anticipated. That’s a dynamic, as my former colleague explained, that is tricky to replicate in other static sale models.

Eric Cheng, co-founder and chief executive of Carsome, told TechCrunch that the startup is attempting to challenge “opaque and inefficient” middle parties that “exploit the misinformation in the market.”

He added, “we want to establish a brand and a standard that advocates trust, transparency, consistency of service and quality assurance across the region that people and businesses can rely on to make their purchasing decisions.”

The startup, which competes with a number of players, including Carro in Singapore, BeliMobilGue in Indonesia and Carmudi, plans to use the fresh capital to expand to more markets in Southeast Asia, such as the Philippines.

Cheng said Carsome aspires to become “the Visa/Master network of auto transactions, and build a collaborative ecosystem of partners to provide the best experience to consumers in Southeast Asia.”

Categories: Business News

Zetwerk, an 18-month-old Indian B2B marketplace for manufacturing items, raises $32M

2019, December 11 - 4:09am

Zetwerk, an Indian business-to-business marketplace for manufacturing items, has closed a significantly large financing round as it scales its operations in the nation and also helps local businesses find customers overseas.

The 18-month-old startup said on Wednesday it has raised $32 million in a Series B financing round led by Lightspeed and Greenoaks Capital. Zetwerk co-founder and chief executive Amrit Acharya told TechCrunch in an interview that the startup has also raised about $14.2 million in debt from a consortium of banks, and others.

Existing investors Accel, Sequoia India and Kae Capital also participated in the round, which pushes the Bangalore-based startup’s total raise to date to about $41 million. Vaibhav Gupta, co-founder of business-to-business marketplace Udaan, and Maninder Gulati, one of the top executives at budget lodging startup Oyo also participated.

Zetwerk was founded by Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary last year. The startup connects OEMs (original equipment manufacturers) and EPC (engineering procurement construction) customers with manufacturing small-businesses and enterprises.

Unlike the more common e-commerce firms we come across every day, Zetwerk sells goods such as parts of a crane, doors, chassis of different machines and ladders. The startup operates to serve customers in fabrication, machining, casting and forging businesses. Currently, Zetwerk works with more than 100 enterprises and 1,500 small and medium-sized businesses. It delivers more than 15,000 parts each month.

“These are all custom-made products,” explained Acharya. “Nobody has a stock of such inventories. You get the order, you find manufacturers and workshops that make them. Our customers are companies that are in the business of building infrastructure.”

“We index these small workshops and understand the kinds of products they have built before. These indexes help bigger companies discover and work with them,” he added.

Once a firm has placed an order, Zetwerk allows them to keep a tab on the progress of manufacturing and then the shipping. This “hand-holding” is crucial, as in this line of business, manufacturing and shipping typically take more than two to three months.

Zetwerk has also enabled manufacturers in India to discover and find clients overseas. Today, manufacturers on the platform export their goods to North America and Southeast Asia, Acharya said. “India has a lot of depth in manufacturing, but much of it has not been tapped well,” he said.

Helping these manufacturing workshops find clients online is still a new phenomenon in the nation. Acharya said Zetwerk largely competes with domain project consultants in the offline work. “They specialize in certain products and geographies. So let’s say someone wanted to buy a machine XYZ in Orissa, they reach out to consultants who help them find workshops and estimate how much time it would take to get the project done.”

According to industry reports, manufacturing today accounts for 14% of India’s GDP. But the nation lacks a supporting ecosystem to execute projects in an efficient manner.

Vaibhav Agarwal, a partner at Lightspeed, said it was unusual to come across a market that is as large as $40 billion to $60 billion in India and global trade-tailwinds that creates opportunity to serve international demand.

The startup plans to infuse portions of the fresh capital into expanding its international operations. Acharya did not share exactly how many clients it has outside of India but said exports currently account for less than 5% of the startup’s GMV, or gross merchandize value.

He said the startup will continue to focus on helping Indian manufacturers find clients outside, as it is better suited to address this, as opposed to helping Indian companies find manufacturers overseas.

The startup will also explore helping its manufacturing workshops access working capital, though Acharya cautioned that it is not something that would happen anytime soon.

In a statement, Prayank Swaroop, a partner at Accel, said, “the use of technology in project planning, procurement, audits, and supply chain transparency is the core offering of Zetwerk which is completely original. Accel is very fortunate to be part of Zetwerk journey since the startup’s inception.”

Categories: Business News

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