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Coursera is planning to file to go public tomorrow

2021, March 5 - 4:51am

Coursera, an online education platform that has seen its business grow amid the coronavirus pandemic, is planning to file paperwork tomorrow for its initial public offering, sources familiar with the matter say. The company has been talking to underwriters since last year, but tomorrow could mark its first legal step in the process to IPO.

The Mountain View-based business, founded in 2012, was last valued at $2.4 billion in the private markets, during a Series F fundraising event in July 2020. Bloomberg pegs Coursera’s latest valuation at $5 billion.

The latest financing event brought its cash balance to $300 million, right around the money that Chegg had before it went public. Coursera CEO Jeff Maggioncalda did confirm then that the company is eyeing an eventual IPO.

Coursera has had a busy pandemic. Similar to Udemy, another massive open online course provider planning to go public, Coursera added an enterprise arm to its business. It launched Coursera for Campus to help colleges bring on online courses (credit optional) with built-in exams; more than 3,700 schools across the world are using the software. It is unclear how much money this operation has brought in, but we know that Udemy for Business is nearing $200 million in annual recurring revenue. In February, the company announced that it has received B Corp. certification, which means that it hits high standards for social and environmental performance. It also converted to a public benefit corporation.

GSV, a venture capital firm that exclusively backs edtech companies, had its largest position of its first fund in Coursera. GSV announced a $180 million Fund II yesterday. 

It makes sense that edtech companies want to go public while the markets remain hot and remote education continues to be a central way that instruction is delivered. Other companies from the sector that have gone public in recent weeks include Nerdy and Skillsoft, two companies that used a SPAC to make their public debuts. Once – and if – Coursera does go public, it will join these newbies as well as the long-time edtech public companies including 2U, Chegg, and K12 Inc, and Zovio Solutions.

Coursera declined to comment.

Update: The previous version of this story stated that Skillshare has gone public. This is incorrect. Skillsoft has gone public. An update to reflect this change has been made.

Categories: Business News

Stream raises $38M as its chat and activity feed APIs power communications for 1B users

2021, March 5 - 4:17am

A lot of our communication these days with each other is digital, and today one of the companies enabling that — with APIs to build chat experiences into apps — is announcing a round of funding on the back of some very strong growth.

Stream, which lets developers build chat and activity streams into apps and other services by way of a few lines of code, has raised $38 million, funding that it will be using to continue building out its existing business as well as to work on new features.

Stream started out with APIs for activity feeds, and then it expanded to chat, which today can be integrated into apps built on a variety of platforms. Currently, its customers integrate third-party chatbots and use Dolby for video and audio within Stream, but over time, these are all areas where Stream itself would like to do more.

“End-to-end encryption, chatbots: We want to take as many components as we can,” said Thierry Schellenbach, the CEO who co-founded the startup with the startup’s CTO Tommaso Barbugli in Amsterdam in 2015 (the startup still has a substantial team in Amsterdam headed by Barbugli, but its headquarters is now in Boulder, Colorado, where Schellenbach eventually moved).

Image Credits: Stream (opens in a new window)

The company already has amassed a list of notable customers, including Ikea-owned TaskRabbit, NBC Sports, Unilever, Delivery Hero, Gojek, eToro and Stanford University, as well as a number of others that it’s not disclosing across healthcare, education, finance, virtual events, dating, gaming and social. Together, the apps Stream powers cover more than 1 billion users.

This Series B round is being led by Felicis Ventures’ Aydin Senkut, with previous backers GGV Capital and 01 Advisors (the fund co-founded by Twitter’s former CEO and COO, Dick Costolo and Adam Bain) also participating.

Alongside them, a mix of previous and new individual and smaller investors also participated: Olivier Pomel, CEO of Datadog; Tom Preston-Werner, co-founder of GitHub; Amsterdam-based Knight Capital; Johnny Boufarhat, founder and CEO of Hopin; and Selcuk Atli, co-founder and CEO of social gaming app Bunch (itself having raised a notable round of $20 million led by General Catalyst not long ago).

That list is a notable indicator of what kinds of startups are also quietly working with Stream.

The company is not disclosing its valuation but said chat revenue grew by 500% in 2020.

Indeed, the Series B speaks of a moment of opportunity: It is coming only about six months after the startup raised a Series A of $15 million, and in fact Stream wasn’t looking to raise right now.

“We were not planning to raise funding until later this year but then Aydin reached out to us and made it hard to say no,” Schellenbach said.

“More than anything else, they are building on the platforms in the tech that matters,” Senkut added in an interview, noting that its users were attesting to a strong return on investment. “It’s rare to see a product so critical to customers and scaling well. It’s just uncapped capability… and we want to be a part of the story.”

That moment of opportunity is not one that Stream is pursuing on its own.

Some of the more significant of the many players in the world of API-based communications services like messaging, activity streams — those consolidated updates you get in apps that tell you when people have responded to a post of yours or new content has landed that is relevant to you, or that you have a message, and so on — and chat include SendBird, Agora, PubNub, Twilio and Sinch, all of which have variously raised substantial funding, found a lot of traction with customers, or are positioning themselves as consolidators.

That may speak of competition, but it also points to the vast market there for the tapping.

Indeed, one of the reasons companies like Stream are doing so well right now is because of what they have built and the market demand for it.

Communications services like Stream’s might be best compared to what companies like Adyen (another major tech force out of Amsterdam), Stripe, Rapyd, Mambu and others are doing in the world of fintech.

As with something like payments, the mechanics of building, for example, chat functionality can be complex, usually requiring the knitting together of an array of services and platforms that do not naturally speak to each other.

At the same time, something like an activity feed or a messaging feature is central to how a lot of apps work, even if they are not the core feature of the product itself. One good example of how that works are food ordering and delivery apps: they are not by their nature “chat apps” but they need to have a chat option in them for when you do need to communicate with a driver or a restaurant.

Putting those forces together, it’s pretty logical that we’d see the emergence of a range of tech companies that both have done the hard work of building the mechanics of, say, a chat service, and making that accessible by way of an API to those who want to use it, with APIs being one of the more central and standard building blocks in apps today; and a surge of developers keen to get their hands on those APIs to build that functionality into their apps.

What Stream is working on is not to be confused with the customer-service focused services that companies like Zendesk or Intercom are building when they talk about chat for apps. Those can be specialized features in themselves that link in with CRM systems and customer services teams and other products for marketing analytics and so on. Instead, Stream’s focus are services for consumers to talk to other consumers.

What is a trend worth watching is whether easy-to-integrate services like Stream’s might signal the proliferation of more social apps over time.

Stream, whose APIs help product teams build chat and activity feeds fast, just raised a $15 million Series A round

There is already at least one key customer — which I am now allowed to name — that is a steadily growing, still young social app, which has built the core of its service on Stream’s API.

With just a handful of companies — led by Facebook, but also including ByteDance/TikTok, Tencent, Twitter, Snap, Google (via YouTube) and some others depending on the region — holding an outsized grip on social interactions, easier, platform-agnostic access to core communications tools like chat could potentially help more of these, with different takes on “social” business models, find their way into the world.

“Stream’s technology addresses a common problem in product development by offering an easy-to-integrate and scalable messaging solution,” said Dick Costolo of 01 Advisors, and the former Twitter CEO, in a statement. “Beyond that, their team and clear vision set them apart, and we ardently back their mission.”

Updated to correct that the revenue growth is not related to the valuation figure.

Categories: Business News

German insurtech platform Hepster raises $10M Series A led by Element Ventures

2021, March 5 - 3:40am

Hepster, an insurtech platform from Germany, has raised $10 million in a Series A funding round led by Element Ventures. Also participating was Seventure Partners, MBMV and GPS Ventures, as well as previous investors. The funds will be used to broaden the Hepster insurance ecosystem and scale up its network, with an emphasis on automation.

The German insurance market is famously slow at adopting new practices, and Hepster is part of a new wave of insurtech startups in the country taking advantage of this. It allows businesses to build insurance policies from scratch, matched specifically to the needs of their individual service or industry. E-commerce players, for instance, can then embed these insurance products into the e-commerce journey.

Its products are therefore better suited to the new sector of, for example, shared e-bike schemes and peer-to-peer rental platforms, which are rarely covered by traditional brokers in Germany. However, it also caters to traditional, established industries as well.

It now has more than 700 partners, including European bike retailers and rental companies Greenstorm Mobility and Baron Mobility, as well as Berlin-based cargo bike provider Citkar and Munich e-bike startup SUSHI.

Christian Range, Hepster co-founder and CEO, said in a statement: “Hepster is now a key player within the European insurance market. Our state-of-the-art technology with our API-driven ecosystem, as well as our highly service-oriented approach, sets us apart.”

In an interview he told me: “Germany is the toughest market with the most regulations, the most laws. We have a saying in Germany, if you can make it in Germany, you can make it everywhere. Also, it’s a big market in terms of selling insurance products because Germans really like insurance in every regard. So there is huge market potential in Germany I think.”

Michael McFadgen, partner at Element Ventures, said: “As new industries and business models emerge, companies need much more flexible insurance propositions than what is currently being offered by traditional brokers. Hepster is the breakout company in the space, and their focus on embedded insurance will pay dividends in years to come.”

 

Categories: Business News

With $19M A round, Halo Dx combines data streams to better diagnose cancers, dementia and more

2021, March 5 - 3:05am

Healthcare is one of the most complex industries out there, creating frustration on the consumer side but also the opportunity for huge improvements from, in a way, rather simple methods. Halo Diagnostics (or Dx for short) has raised a $19M series A to improve diagnosis of several serious illnesses by crossing the streams from multiple tests and making the improved process easily available to providers. They’ve also taken the unusual step of taking out an eight-figure line of credit to buy outright the medical facilities they’ll need to do it.

As anyone who’s had to deal with major health concerns can attest, the care you get differs widely from one provider to another depending on many factors, not least of which are what your insurance covers and what methods are already in use by the provider.

For men going in to get a prostate cancer screening, for instance, the common bloodwork and rectal exam haven’t changed in years, and really aren’t that great at predicting problems, leading to uncertainty and unnecessary procedures like biopsies.

Of course, if you’re lucky, your provider might offer multiparametric MRIs, which are much better at finding problems —and if you combine that MRI with a urine test that checks for genetic markers, the detection accuracy rises to practically foolproof levels.

But these tests are more expensive, take special facilities and personnel, and may otherwise not fit into the provider’s existing infrastructure. Halo aims to provide that infrastructure by revamping the medical data stream to allow for this kind of multi-factor diagnosis.

Combining machine learning tools for medical imaging with genetic sequencing nets Sophia Genetics $110M

“Basically doctors and imaging centers aren’t offering latest level of care. If you’re lucky you might get it, but in community medicine you’re not going to,” said Brian Axe, co-founder and chief product officer at Halo Dx. “As perverse as it sounds, what the healthcare industry needs is financial alignment, not just outcomes. The challenge is the integrated diagnostic solution — how do you get these orders, go to market and talk with primary care providers?”

An added obstacle is that multi-modal testing isn’t really the kind of thing medical imaging or testing providers just decide to get into. An imaging center isn’t going to hear that a urine test improves reliability and think “well let’s buy the building next door and start doing that too!” It’s costly and complex to build out testing facilities, and getting the expertise to run them and combine the results is another hurdle.

So Halo Dx is parachuting in with tens of millions of dollars and purchasing the imaging and testing centers themselves (four so far), taking over their operations and combining them with other tests.

Assuming that much liability as a young company may seem like folly, but it helps that these imaging centers are strong businesses already — not derelict, half-paid-off MRI machines being operated at a loss.

“The imaging orders are coming in already; the centers are profitable. They’re coming on board because they see how technology is coming to disrupt them, and they want to help,” said Axe.

Prostate and breast cancers are the first target, but more and better data produce similarly improved diagnosis and treatment planning for more conditions, potentially (these are still being proven out) Multiple Sclerosis, Parkinson’s, and other neurodegenerative diseases.

Unicorn fever as One Medical’s IPO pops 40% after conservative pricing

With one company running multiple intake, imaging, and testing facilities and integrating the results, it’s much more likely that providers will sign up. And Halo Dx is trying to bring some of the enterprise-grade software expertise to bear on the historically neglected field of medical data storage and communication.

Axe deferred to the company’s chief medical officer, Dr John Feller, on the perils of that aspect of the field.

“Dr Feller describes this so well: ‘I have this state of the art MRI machine that can see inside your body, but because of the fragmented solutions that are out there, from intake to the storage centers, I feel like I’m living with pre-dot-com era tech and it’s crippling,’ ” Axe recalled. “If you want to look at records or recommend additional tests, software vendors don’t talk to each other or integrate. You have three providers that need to talk to each other and there’s a dozen systems between them.”

Axe compared the company’s approach here to One Medical’s — increasing efficiency and using that to make the relationship with the consumer lighter and easier, leading to more interactions.

In some ways it seems like a risky move, taking on nearly a hundred million in obligations and jumping into a hugely complex and highly regulated space. But the team is accomplished, the backers are notable, the potential for growth is there, and the success of the likes of One Medical have likely emboldened all involved.

Zola Global Investors led the round, and a who’s-who in medical and tech participated: Anne Wojcicki, Fred Moll, Stephen Pomeranz, Bob Reed, Robert Ciardi, Jim Pallotta, and believe it or not Ronnie Lott of 49ers fame.

These and others involved make for a strong statement of confidence in both the model and the specific approach Halo Dx is taking to expanding and advancing care. Here’s hoping, however, that you won’t have to make use of their services.

R&D Roundup: Ultrasound/AI medical imaging, assistive exoskeletons and neural weather modeling

Categories: Business News

Bain’s Sarah Smith, former head of HR at Quora, will share the recruiting playbook at Early Stage

2021, March 5 - 2:45am

If you’re a startup that’s worried about building your team today for tomorrow’s successes you’re not going to want to miss our session with Bain Capital Ventures’ Sarah Smith at TechCrunch Early Stage on April 1 & 2.

The current Bain Capital Ventures partner who invests in early to mid-stage companies saw what it was like to grow a startup business firsthand as the vice president of human resources at Quora, a position she held from 2012 to 2016.

While at Quora, Sarah built the HR and operations teams responsible for company culture, compensation, benefits, equity refreshers, performance reviews, HRIS/ATS implementation, people development, policy enforcement and content moderation.

She scaled the company from 40 to 200 employees across all hiring from university to executive search.

After that, she became the vice president of advertising sales and operations, where she led the launch of monetization and onboarding of more than 500 advertisers to the self-service ads platform.

Smith joins an all-star cast of speakers at Early Stage. They range from Zoom CRO Ryan Azus (“How to build a sales team”) to Calendly founder Tope Awotona (“How to bootstrap”) to Kleiner Perkins’ Bucky Moore (“How to prep for Series A fundraising”), are making themselves available to answer your burning questions on just about any topic. And that’s just the tip of the iceberg.

Unlike other TechCrunch events, there is no “main stage” at our TC Early Stage events. Each session is designed to tackle one of the many core competencies any startup needs to be successful. But this isn’t just about listening — every session includes plenty of time built in for audience Q&A. Essentially, it’s all breakout sessions, all day.

What’s more — everyone who buys a ticket to TC Early Stage gets free access to Extra Crunch! Folks who buy a ticket to one of the two events get three months free, and folks who purchase a combination ticket (to both events) get six months free! An Extra Crunch membership includes:

Of course, TC Early Stage dual event ticket holders will get access to both events (April 1-2 and July 8-9) and have access to all the content that comes out of the event on demand. Plus you can take advantage of additional savings with Early Bird pricing for another couple of weeks!

Mercenary CEOs know all too well that this is about the most bang you can get for your buck. Period.

Check out the full list of speakers here and you can get your ticket now!

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Categories: Business News

Fintech startup ClearGlass Analytics closes $3.6M for pension funds transparency platform

2021, March 5 - 2:29am

Fintech startup ClearGlass Analytics has closed a £2.6 million ($3.6 million) funding round for its platform, which aims to create greater transparency on fees in the long-term savings market, such as pensions and the wider asset management market.

The £2.6 million seed round includes European VC Lakestar and Outward VC, the venture arm of Investec, as well as several angels from both the asset management and pension fund worlds. These include Ruston Smith, a pension trustee; Richard Butcher, chair of the PLSA (U.K. pension trade body); Chris Wilcox, former Global Head of JP Morgan Asset Management; and Rob O’Rahilly, Sikander Ilyas and Alex Large, also former JP Morgan employees.

ClearGlass is targeting the £1.5 trillion mature “Defined Benefit” pension schemes market and claims to now work with more than 500 DB pension funds. It will use the funding to expand into the U.K. Defined Contribution pension market, and consolidate its early footprint in Europe and Africa.

How ClearGlass works is that it acts as a data interface between asset managers and their clients. Pension funds then use the platform to see all of their investment costs in one place, thus getting more data than usual from more asset managers and other suppliers. This helps the funds see the “true cost” of what they are paying for the management of their investments. ClearGlass claims to be able to uncover the kinds of costs of asset management that, in some instances, can be more than double those expected.

The startup recently did an analysis of the cost and performance of more than 400 asset managers. It found that while most U.K. asset managers were meeting minimum standards for data delivery, quality and accuracy, 30 (including some powerful players) did not pass their tests.

The company was founded by Dr. Christopher Sier, a World Bank and FCA expert who previously developed the cost transparency standard at the request of the FCA, and co-founders Ritesh Singhania and Kunal Varma.

Sier, founder and CEO, said: “Finding your costs are so much larger is shocking, but also something to be celebrated. These incremental costs were always there, they just weren’t exposed, and now you can identify those and bring about change. You can’t manage what you don’t measure.”

In an interview with TechCrunch, Ritesh Singhania, COO, said getting the data about pension funds is normally “super challenging and complicated. And second of all, even when you got the data, you couldn’t make head nor tail of it because you can’t compare it across funds. What we have done is that we have been the line of communication between the manager and the pension fund. So we have built a piece of technology that helps with the communication between the asset managers, and the pension funds to be able to collect that data, check that data. And finally, give them something that doesn’t require them to spend 20 hours to understand it.”

ClearGlass was incubated by the Founders Factory accelerator.

Categories: Business News

Social commerce startup Elenas raises $6M and plans for international expansion

2021, March 5 - 2:15am

Colombian startup Elenas says it’s helping tens of thousands of women make money by selling products online. And today, it announced that it has raised $6 million in Series A funding.

That’s on top of the $2 million seed round that Elenas announced last fall. Founder and CEO Zach Oschin said that demand continues to grow, particularly with high unemployment levels (particularly among women), while consumers remain nervous about in-person shopping during the pandemic.

“We’ve been able to provide opportunities for tens of thousands of women to earn extra income,” Oschin said.

He suggested that Elenas is essentially a reinvention of the direct sales/catalog sales model that 11 million women participate in across the Latin America. The idea is that independent seller/entrepreneurs (often but not always women) can browse a catalog of products in categories like beauty, personal care and electronics, from more than 250 distributors and brands, all available at a discounted wholesale price. They decide what they want to sell, how much they want to mark the price up and then promote the products on social channels like WhatsApp and Facebook.

Singapore-based Raena gets $9M Series A for its pivot to skincare and beauty-focused social commerce

Besides its digital focus, Oschin said said Elenas is better for the resellers because there’s less risk: “We don’t hold inventory for the company, which is very different than traditional direct sales, and our entrepreneurs don’t ever hold inventory.” Nor do those entrepreneurs need to get involved in things like payment collection or delivery, because Elenas and its distributor partners handle all of that.

“For us, the goal is to provide this backend operating system that gives women everything they need to run their store,” he added.

Elenas offers an automated on-boarding process for the sellers, but Oschin said that within the app, “we do a lot of work to train our sellers how to sell.”

Elenas CEO Zach Oschin

The company (which participated in our Latin American Startup Battlefield in 2018) says it’s now paid out more than $7 million to its sellers. It doesn’t limit participation by gender, but Oschin estimated that more than 95% of sellers are women, with 80% of them under the age of 30 and about a third of them without any previous direct sales experience.

The new funding comes from Leo Capital, FJ Labs, Alpha4 Ventures and Meesho. Oschin said the company’s investors have a presence across six different continents, reflecting its international vision. Indeed, one of its next steps is expanding across Latin America, starting with Mexico and then Peru.

“Having seen the meteoric growth of social commerce in India and China we are excited to partner with Elenas as they have demonstrated the right product and operating model for the region.”  said Leo Capital co-founder Shwetank Verma in a statement. “The Elenas team has built a solution that’s inclusive, impactful and is well positioned for exponential growth.”

Coupang files for mega US IPO

Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion.

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Categories: Business News

This pan-African freelance platform is the first Zimbabwean startup backed by Techstars

2021, March 5 - 2:05am

On the 25th of January, Techstars Seattle announced its 12th class featuring 10 startups from different parts of the world. The accelerator, which has accepted only a handful of African startups, included one from Zimbabwe in this class.

AfriBlocks is a global pan-African marketplace of vetted African freelance professionals. The startup was founded by Tongayi Choto and Roger Roman in July 2020 and has offices in Harare and Los Angeles.

The company is trying to address the high unemployment rate that plagues many African countries by making it easier for people to find work. Quite a number of international and local freelance websites exist to meet these needs. Still, according to CEO, Choto, most of them offer too many options with no adequate vetting process.

“It can be very hard to find African freelancers. If a customer is lucky enough to get past those hurdles and find a freelancer to work with, they often don’t have the proper collaboration tools to complete the project in a precise and timely manner,” he told TechCrunch.

In a global freelance market worth more than $800 billion, AfriBlocks says it is doing this different by equipping African freelancers with intuitive collaboration tools and a secure payment system that makes it easy to get remote contract projects completed. 

When a job is posted on its platform, the company claims that they save the customer the trouble of perusing thousands of freelancers profiles and portfolios. Instead, they use automation tools to match three freelancers who fit the user’s qualifications.

Also, AfriBlocks assigns a project manager to the selected freelancer who manages the project through completion. Once the job is complete, AfriBlocks collect a transaction fee, and the payment is released from escrow. This ensures that expectations are clear and deadlines are met for freelancers and customers. 

In addition, Choto says the company offers community and development resources that help them upskill and remain competitive in the global marketplace. This has been done in partnership with edtech company Coursera and African non-profit Ingressive for Good. It is also in talks with online learning platform, Datacamp, to do the same for data scientists.

Roger Roman (co-founder). Image Cedits: AfriBlocks

As peculiar to most African startups, funding has been hard to come by for the team. Bootstrapping seemed like the only course of action to take, and it seems to have taken them far. In less than a year, the company has onboarded over 2,000 freelancers and more than 400 buyers. It has also completed up to 250 jobs generating over $60,000 in revenue. This progress has attracted the likes of Techstars and Google to provide them with funding and network.

“We’ve encountered the problems that many Black founders face, such as scarce fundraising sources. However, organizations like Techstars Seattle, Transparent Collective, and Google for Startups have helped us by providing mentorship, networking opportunities, and investor demo days showcases,” Roman said.

AfriBlocks joins African startups like Farmcrowdy, OnePipe, Risevest, Eversend, OjaExpress, who have participated in different Techstars accelerators worldwide.

Before AfriBlocks, Choto, who grew up in Zimbabwe, served as a product manager at BillMari, a pan-African remittance service leveraging bitcoin technology. For Roger, whose upbringing was on the westside of Chicago, he doubles as an active angel investor and a VC scout.

It is predicted that freelancers will account for as much as 80% of the entire workforce worldwide by 2030. Freelance work has become a viable source of employment and has shifted from being a vocation people engage in to supplement their income to being a full-time source of jobs for Africans.

The long term goal for AfriBlocks is to build the tech infrastructure for the future of work in Africa. According to the company, participating in Techstars is the right path to that destination.

“In anticipation of the impending global human talent shortage that could result in 85 million jobs being unfilled and the loss of $85 trillion annually, our long-term goal is to make Africa the global hub for technical and creative freelancers by providing the rails for companies to work in Africa and with remote African talent,” Choto said. 

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion.

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Categories: Business News

Bitfinex launches cryptocurrency payment gateway for merchants

2021, March 5 - 1:48am

Cryptocurrency exchange company Bitfinex is launching Bitfinex Pay, a cryptocurrency payment gateway. With this new product, online merchants can accept payments in various cryptocurrencies. It should make cross-border transactions easier in particular.

While there are a few crypto payment gateways already, Bitfinex Pay has the advantage of working seamlessly with the company’s exchange. Merchants can create a widget and start accepting payments in Ethereum and bitcoin. Payments are deposited on your exchange wallet.

Bitfinex’s widget works a bit like the “Buy Now with PayPal” button. When you click on the Bitfinex Pay button, you’re redirected to the cryptocurrency company’s website. Once your payment is approved, you’re redirected back to the original merchant website. Payments are capped at the equivalent of $1,000 in cryptocurrencies.

You don’t pay any fee with Bitfinex Pay transactions. Of course, there are some network fees involved with sending crypto tokens. Merchants will also end up paying fees if they want to convert their cryptocurrency holdings on the exchange and transfer fiat money out of their account.

Bitfinex Pay also lets you accept Tether payments. Tether is a stablecoin, which means that one unit of Tether is supposed to be worth one USD — it doesn’t fluctuate over time.

That statement has been challenged, as the attorney general in New York has concluded that Tethers weren’t fully backed by USD sitting in bank accounts at all times. At some point, Bitfinex couldn’t access $850 million held in a Panamanian bank.

As a result, Tether and Bitfinex are currently banned in the state of New York. So you’ll have to determine whether you trust Bitfinex enough to use it as part of your checkout process on your website.

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion.

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Categories: Business News

Luxury air travel startup Aero raises $20M

2021, March 5 - 12:45am

Aero, a startup backed by Garrett Camp’s startup studio Expa, has raised $20 million in Series A funding — right as CEO Uma Subramanian said demand for air travel is returning “with a vengeance.”

I last wrote about Aero in 2019, when it announced Subramanian’s appointment as CEO, along with the fact that it had raised a total of $16 million in funding. Subramanian told me that after the announcement, the startup (which had already run test flights between Mykonos and Ibiza) spent the next few months buying and retrofitting planes, with plans for a summer 2020 launch.

Obviously, the pandemic threw a wrench into those plans, but a smaller wrench than you might think. Subramanian said that as borders re-opened and travel resumed in a limited capacity, Aero began to offer flights.

“We had a great summer,” she said. “We sold a lot of seats, and we were gross margin positive in July and August.”

Backed by Expa, Aero is a premium air travel startup with $16M in funding

The startup describes its offering as “semi-private” air travel — you fly out of private terminals, on small and spacious planes (Subramanian said the company has taken vehicles with 37 seats and retrofitted them to hold only 16), with a personalized, first-class experience delivered by its concierge team. Aero currently offers a single route between Los Angeles and Aspen, with one-way tickets costing $1,250.

Subramanian was previously CEO of Airbus’ helicopter service Voom, and she said she approached the company “very skeptically,” since the conventional wisdom in the aviation industry is that the business is all about “putting as many people into a finite amount of square footage” as possible. But she claimed that early demand showed her that “the thesis is real.”

“There is a set of people who want this,” she said. “Air travel used to be aspirational, something people got dressed up for. We want to bring back the magical part of the travel experience.”

After all, if you’re the kind of “premium traveler” who might already spend “thousands of dollars a night” on a vacation in Amangiri, Utah, it seems a little silly to be “spending hours trying to find a low-cost flight out of Salt Lake City.”

Image Credits: Aero

Subramanian suggested that while demand for business travel may be slow to return (it sounds like she enjoyed the ability to fundraise without getting on a plane), the demand for leisure travel is already back, and will only grow as the pandemic ends. Plus, the steps that Aero took to create a luxury experience also meant that it’s well-suited for social distancing.

Speaking of fundraising, the Series A was led by Keyframe Capital, with Keyframe’s chief investment officer John Rapaport joining the Aero board. Cyrus Capital Partners and Expa also participated.

The new funding will allow Aero to grow its team and to add more flights, Subramanian said. Next up is a route between Los Angeles and Cabo San Lucas scheduled to launch in April, and she added that the company will be returning to Europe this year.

“It’s a horrendous time to be Lufthansa, but counterintuitively, it’s the best time to start something from scratch,” she said — in large part because it’s been incredibly affordable to buy planes and other assets.

5 questions from Airbnb’s IPO filing

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion.

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Categories: Business News

Unraveling ThredUp’s IPO filing: Slow growth, but a shifting business model

2021, March 5 - 12:42am

Another day, another venture-backed IPO filing. Today it’s ThredUp, a used-goods marketplace that is approaching the public markets in the wake of Poshmark’s own strong debut.

Both companies have a related market focus, albeit different approaches to selling used goods. Poshmark allows users to sell clothing items through its app. ThredUp, in contrast, acquires goods from users and sells them itself.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

But while Poshmark had profits to brag about in its own IPO filing, ThredUp does not and is also growing more slowly, expanding revenues just 13.6% in 2020. Reading its S-1 filing, it’s clear ThredUp did not have the best 2020, thanks in part to COVID-19.

This morning, let’s get into the numbers posted by the company backed by Trinity Ventures, Redpoint, Highland Capital Partners and Goldman Sachs to decide if it’s just merely to catch Poshmark’s wave, or if its business is a fine machine in its own right.

ThredUp’s model

To understand ThredUp’s business, we have to get into the mechanics of how it sells things. The company has two methods: direct sales and consignment. In the former, ThredUp buys goods and sells them. It then “recognize[s] revenue on a gross basis” and generates gross profit after deducting “inventory cost, inbound shipping and inventory write-downs, as well as outbound shipping, outbound labor and packaging costs.”

That is the model that ThredUp is leaving behind. After shifting to “primarily consignment sales” in 2019, the company’s business has skewed sharply in that direction. Consignment works by having consumers send ThredUp their goods, which it holds, and perhaps sells, remitting to the user a portion of the sale price. The method reduces write-downs and boosts gross margins.

Consignment sales at ThredUp “recognize revenue net of seller payouts,” deducting “outbound shipping, outbound labor and packaging costs” to reach gross profit results.

The revenue-mix focus change can be seen in how ThredUp generated gross profit in 2018, 2019 and 2020. In those years, consignment gross profit came to 38%, 67% and 81% of total gross profit. ThredUp’s business today is effectively a large, digital consignment effort.

What impact has that shift had on the company’s financial health? Let’s find out.

ThredUp’s growth

ThredUp posted $129.6 million in 2018 revenue, a figure that grew to $163.8 million in 2019 and $186 million in 2020. The company’s growth slowed from 26.4% in 2019 to 13.6% in 2020, a sharp deceleration. But at the same time, the portion of ThredUp revenues that came from consignment sales grew to 74% from 60%. Did that change have a material impact on the company’s gross margins, thus rendering its slow growth more palatable?

Not really. The company’s gross margins came to 68.7% in 2019 and 68.9% in 2020. That’s about as flat as Texas. And notably the number stayed flat despite the company noting that consignment revenues had stronger gross margins in 2019 and 2020 (77% and 75%, respectively) than its other model (57% and 51%, respectively).

Categories: Business News

Snapcommerce raises $85M to make over your mobile shopping experience

2021, March 4 - 11:30pm

People are not only shopping digitally more than ever, they’re also shopping using their mobile phones more than ever.

And for mobile-first companies like Snapcommerce, this is good news.

Snapcommerce, formerly known as SnapTravel, has raised $85 million in what the company is describing as a “Pre-IPO” growth round to help further its mission of “changing the way people shop on their phones.”

The Toronto, Ontario-based startup has built out an AI-driven, vertical-agnostic platform that uses messaging in an effort to personalize the mobile shopping experience and “deliver the best promotional prices.” While it was initially focused on the travel industry, the company is now branching out into other consumer verticals — hence its name change.

Inovia Capital and Lion Capital co-led the new growth round, which included participation from Acrew DCF, Thayer Ventures and Full In Partners, as well as existing backers Telstra Ventures and Bee Partners. The financing brings Snapcommerce’s total raised since its 2016 inception to over $100 million. Its last raise — a $7.2 million round from Telstra and NBA star Steph Curry — took place in 2019.

The startup was founded by tech entrepreneurs Hussein Fazal, whose prior company AdParlor grew to $100+ million in revenue, then sold to AdKnowledge back in 2011; and Henry Shi, who previously built uMentioned and worked at Google, where he helped launch YouTube Music Insights, according to previous TechCrunch reporting.

Snapcommerce co-founders Henry Shi and Hussein Fazal. Image courtesy of Snapcommerce

Snapcommerce launched its first, travel-focused product in 2017. It works by using chatbots to interact with customers via messaging apps such as SMS, Facebook and WhatsApp. But the company also has human agents ready to help if people need more assistance, in the past essentially serving as on-demand travel agents.

Its service is not just for hotels and flights, but also to help people book restaurants and activities too.

“Our focus has been on building that personal relationship,” Fazal said. “Many people end up coming back to us when they travel again.” In fact, over 40% of its sales in 2020 came from repeat customers.

Over the years, the company claims to have helped more than 10 million users globally save over $75 million. It expects to cross over $1 billion in total mobile sales this year.

And now it’s ready to branch out into helping consumers save money on goods.

“When shopping, it’s hard to find the right product and even if you do, it’s hard to find a good deal,” he said. “On a desktop, there’s ways around it. But on mobile, it’s virtually impossible.”

The company turned the corner to profitability three months into the pandemic in 2020, seeing a 60% spike in sales in the second half of the year compared to H2 2019, according to CEO Fazal.

It then decided to re-invest its profits to continue growing the business.

“The profitability during the pandemic gave us confidence that we could turn to profitability whenever we needed to and gave us control of our own destiny, which enabled this fundraise,” Fazal told TechCrunch. “The third quarter of 2020 ended up being our greatest quarter ever.”

The COVID-19 pandemic, naturally, only accelerated its growth as more consumers turned to mobile.

“We believe the next wave of power purchasers will be via mobile,” Fazal said. “Some of the new generation don’t even have desktops or laptops, and they spend all their time on their mobile phone and messaging. So we’re able to be at the forefront.” 

Snapcommerce has an IPO in its sights, although no specific timeline. The company did not reveal its current valuation or hard revenue figures. The company makes money by either marking up prices provided by a merchant or charging the merchant a commission.

Chris Arsenault, partner at Inovia and Snapcommerce lead investor, said his firm “tripled up” on its investment in the startup after witnessing its success in the travel space.

“Other companies out there only care about the transaction, and force consumers to look through several services to see if they got the best price, all the while telling them ‘there’s only two seats left,’ ” he told TechCrunch. “We believe that consumers aren’t going to accept that type of pressure-selling in the future. And Snapcommerce’s ability to build trust with its customers and service providers has attracted us to them as they are defining what the future of commerce is going to be like.”

Ultimately, the company plans to use its fresh capital to continue to scale with the goal of streamlining the entire mobile search, purchase and fulfillment process and make finding “the right item at the right price as easy as sending a message to a trusted friend.”

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion.

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Categories: Business News

Papaya Global raises $100M more at a $1B+ valuation for tools to hire, pay and manage distributed workforces

2021, March 4 - 11:22pm

Remote working — hiring people further afield and letting people work outside of a central physical office — is looking like it will be here to stay, and today one of the startups building tools for that environment is announcing a big fundraise in response to the opportunity.

Papaya Global, an Israeli startup that provides cloud-based payroll and hiring, onboarding and compliance services across 140 countries for organizations that employ full-time, part-time and contract workers outside of their home country, has picked up $100 million in funding and has confirmed that its valuation is now over $1 billion.

The company targets organizations that not only have global workforces, but are expanding their employee bases quickly. They include fast-growing startups like OneTrust, nCino and Hopin (which today announced a monster $400 million round), as well as major corporates like Toyota, Microsoft, Wix and General Dynamics.

Papaya is not disclosing revenue numbers but said that sales have grown 300% year-over-year for each of the last three years.

Hopin confirms $400M raise at $5.65B valuation

Led by Greenoaks Capital Partners, this Series C also includes significant participation from IVP Ventures and Alkeon Capital. Previous backers Insight Venture Partners, Scale Venture Partners, Bessemer Venture Partners, Dynamic Loop, New Era and Workday Ventures, Access Ventures and Group 11 also chipped in. The new investment brings Papaya’s total funding to $190 million.

Papaya has been on a fundraising tear in the last 18 months. Today’s news comes less than six months after it raised a $40 million Series B. And that round came less than a year after a $45 million Series A.

Why so much, so quickly? Partly because of the demands on the business, but possibly also to capitalize on an opportunity at a time when so many others are also going after it as well.

The opportunity is that companies and other organizations are finding themselves needing tools to address the current state of play: Workforce growth today doesn’t look like it did in 2019, and so incumbent solutions like ADP, or cobbled together solutions covering multiple geographies, either don’t cut it, or are too costly to maintain.

Papaya Global, in contrast, says it has built an AI-based platform that automates a lot of work and removes much of the manual activity that comes out of trying to right-size a lot of legacy payroll products to work in new paradigms.

“The major impact of COVID-19 for us has been changing attitudes,” CEO Eynat Guez, who co-founded the company with Ruben Drong and Ofer Herman, told me in an interview last September. “People usually think that payroll works by itself, but it’s one of the more complex parts of the organization, covering major areas like labor, accounting, tax. Eight months ago, a lot of clients thought, it just happens. But now they realize they didn’t have control of the data, some don’t even have a handle on who is being paid.”

One challenge, however, is that many others are also chasing these customers in hopes of becoming the ADP of distributed and global work.

Papaya Global raises $40M for a payroll and HR platform aimed at global workforces

Last month, a startup called Oyster, also aimed at distributed workforces, raised $20 million. Others in the same area that have raised lots of capital include Turing,  DeelRemoteHibob, Personio, Factorial, Lattice, Turing and Rippling.

And as we have pointed out before, these are just some of the HR startups that have raised money in the last year. There are many, many more.

Investors here are hoping that as we see some consolidation emerge out of this mix, there will be a few leaders and that Papaya will be one of them.

“Papaya Global has built a best in class solution to onboard new employees, automate payroll, and manage a global workforce through a single pane of glass. Both growing and established companies have dramatically changed their working practices in recent years, and Papaya has seen impressive growth as a result. We’re excited to continue supporting them as they seek to simplify an increasingly complex challenge for some of the world’s biggest companies,” said Patrick Backhouse, partner at Greenoaks Capital, in a statement.

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion.

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Categories: Business News

Hopin confirms $400M raise at $5.65B valuation

2021, March 4 - 9:30pm

This morning Hopin, a virtual events platform and video-focused software service, announced that it has closed a $400 million Series C. The new capital values Hopin at $5.65 billion. Both numbers match prior TechCrunch reporting that the company was targeting a $400 million raise at a valuation of between $5 billion and $6 billion.

Andreessen Horowitz (a16z) and General Catalyst (GC) co-led the round, as TechCrunch reported was likely. Prior investor IVP also took part in the round.

For Hopin, the round is another rapid-fire funding event in a string of such transactions. The company has seen scorching revenue growth in recent quarters, reaching $70 million ARR today, its CEO and founder Johnny Boufarhat told TechCrunch in an interview.

As part of the transaction, recent a16z hire Sriram Krishnan will join Hopin’s board. According to Boufarhat, Hopin had hoped to hire Krishnan before he took his job at the venture firm.

Hopin has scaled rapidly from its now-dated $20 million ARR milestone that it announced in Q4 2020. But not all of that growth has been organic. Hopin recently bought StreamYard, a company that brought $27 million worth of ARR to the combined entity. Hopin spent $250 million on that deal, a transaction that was announced in January of this year.

The company has raised $565 million since February of 2020, it said in an email.

According to Boufarhat, Hopin intends to invest heavily in its product and engineering functions. The CEO stressed during a call that he intends to keep his company’s product spend high as a percentage of revenue; TechCrunch’s read of the sentiment is that Hopin has no intention of letting other companies carve into its core market while it solidifies its virtual event service and adds other capabilities.

VCs are chasing Hopin upwards of $5-6B valuation

The StreamYard deal may provide some guidance as to where Hopin is headed. The acquisition brought to Hopin a company that was already in use by some of its own users, but also added a business line to its collection not wholly component to the event work for which Hopin is best-known. Boufarhat told TechCrunch that his company is open to making more acquisitions.

Perhaps we’ll see Hopin extend its reach to other products that fit into its video-first perspective. It certainly has the capital and equity value to buy a plethora of smaller companies.

At $70 million ARR, Hopin is worth around 81x its current annual recurring revenue. When the company last raised, a $125 million round in November of 2020, the company had $20 million in ARR and a valuation of $2.125 billion valuation. At the time the company was worth a little over 106x its ARR. In light of the company’s recent growth, investors in that round now paid a far-smaller 30.4x ARR multiple, contrasting the company’s new revenue mark and its now-dated valuation.

Provided that Hopin can continue its rapid growth, its current ARR multiple could appear closer to norms in a few quarters.

Closing, Hopin does not appear ready to answer the siren-song of the SPAC. Boufarhat told TechCrunch that he receives regular outreach from SPACs, something we’ve heard from a number of late-stage technology CEOs. Hopin’s founder, however, noted that great companies can go public regardless of the market, and that his company intends on being operationally IPO-ready next year. It appears that a more traditional IPO for Hopin could be in the cards for 2022 or 2023.

Hopin buys livestreaming startup StreamYard for $250M as it looks to expand its product lineup

Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion.

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Categories: Business News

Jungle Scout raises $110M, acquires Downstream Impact to help 3rd parties sell on marketplaces like Amazon

2021, March 4 - 9:15pm

There has been a rapid proliferation of roll-up companies armed with wallets full of money to consolidate promising smaller merchants that sell on Amazon and other marketplaces, the idea being to create economies of scale to help them sell more effectively and grow. Today, a company that is somewhat doing the opposite — building tools to help Amazon sellers work better on their own — is announcing significant funding to keep growing its business.

Jungle Scout, an Austin-based company that builds tools covering services like search and market analytics, inventory management and sales intelligence for companies selling on Amazon, has raised $110 million in equity that it is using in part to make an acquisition — Downstream Impact, a specialist in Amazon advertising founded by two ex-Amazon execs who did early work on Amazon’s in-house advertising efforts — and in part to continue growing its business.

You may not know the name, but Jungle Scout is quietly huge. It says that its tools impact some $8 billion in Amazon revenue with around 500,000 brands and entrepreneurs already using it. Its data engine ingests search, purchasing and other information for some 500 million Amazon products, which it then turns into data to help customers sell on Amazon better.

Jungle Scout began life in 2015 focusing primarily on providing optimizing search tools for sellers solely on Amazon — if you didn’t guess that already by the “Jungle” and “Scout” in its name. Tools for improving business on Amazon still make up the bulk of its business, with its functionality covering not just Amazon.com but nine other regional Amazons. But now, the startup is slowly starting to expand its services beyond that. That could include Google Shopping, Facebook’s many social platforms and more — whichever marketplace platforms consumers happen to be using.

“We are starting with Walmart.com, which will be live in the near future,” CEO Greg Mercer said in an interview, “and the vision is to expand beyond that. We’re bullish on the future of Amazon, but if we think beyond that, my prediction would be that besides those platforms where people primarily go to purchase things, there are places where consumers spend their time — such as Google or social channels like Instagram — that could be other areas where we could provide tools to sell through.”

The startup is also building out its business on the ground in China, he said. The country represents one of the fastest growing source countries not just for goods, but merchants, too.

Summit Partners, the venture capital and private equity firm, is the primary investor in this funding round, with Mercer himself also contributing. It’s not clear how much Jungle Scout has raised to date: PitchBook notes that Summit had backed it previously, in 2017, at an undisclosed sum and valuation. I’ve confirmed that the $110 million being disclosed today is the first time that Jungle Scout has revealed how much money it has raised over the years, although it’s still not disclosing its valuation.

You might notice that in the first paragraph of this story I mentioned that Jungle Scout is “somewhat” taking a different approach to the roll-up companies, companies like Thrasio, SellerX, Branded, Heyday, Heroes, Perch, Berlin Brands Group, and doubtless others that are raising giant sums of money to source, and then partner with or buy up, third-party sellers.

Thrasio raises $750M more in equity for its Amazon roll-up play

Jungle Scout does indeed provide a valuable service to Amazon retailers who are leveraging the giant’s FBA platform to manage a range of services like inventory, shipping and marketing (in the form of appearing on Amazon to sell things), and who want to remain independent and not be “rolled up.”

However, that’s not actually the full story. Mercer tells me that his company also provides its technology as a white label service to most of the big roll-up players — which of these, he did not note — and so you might also say that even if third-party merchants are not working directly with Jungle Scout, they might well end up doing so indirectly.

The opportunity for building out more tools to address the Amazon economy is a massive one. As we’ve pointed out before, it is estimated that the number of third-party sellers on Amazon currently stands around 5 million, a number that appears to be growing exponentially at the moment, with more than 1 million sellers joining the platform last year. That includes not just smaller retailers who are looking to extend their consumer touch-points, but also increasingly a number of big brands that are now looking at how they can leverage Amazon better to sell directly to consumers on the platform, rather than via third-party merchants.

Within that, advertising remains a huge and growing part of the equation.

If you are an Amazon user, you’ll notice that ads search pages have been growing in number over the years (these are the sponsored results that come up at the top of searches you might make for a product), and so you will be unsurprised to know that advertising, as a result, is really growing fast for Amazon itself.

Ads alone accounted for $21.5 billion in annual revenue for Amazon in 2020, up 66% year-over-year.

Connor Folley, Downstream’s CEO who co-founded the company with another ex-Amazonian, Salim Hamed (who is Downstream’s CTO), told me that ads “within the walls of Amazon itself” still make up the majority of that figure, although it will continue to invest in areas like its DSP to expand beyond its own ecosystem. That makes it somewhat of a dark horse in the world of advertising, which up to now has been more concerned with the rise of Facebook among “new” players.

“The explosive growth of Amazon advertising over the last five years has surpassed many people’s expectations,” he said. “It might be a $50 billion platform by 2023 — and much bigger than Facebook.”

While there are a lot of companies out there building tools and alternatives for sellers to get a better grip to sell on Amazon, the attraction here has been in part the size of Jungle Scout and its prescience in building this market in the first place.

Target Global leads $150M round for Amazon Marketplace consolidator Branded

“Jungle Scout was one of the first companies to identify the opportunity to provide SaaS-based tools to help businesses and brands expand their ecommerce footprints on Amazon and beyond, and the company has built on this leadership position over the last several years,” said Neil Roseman, Technologist-in-Residence at Summit Partners and Jungle Scout board director, in a statement.

It’s a strong vote of confidence when you consider that Roseman himself is also an ex-Amazonian, having been its VP of technology between 1998 and 2007 working on marketplace technology, among other things. “We believe Jungle Scout’s technology is robust and highly scalable, designed to help a company to grow as the Amazon third-party selling ecosystem has expanded. We believe the addition of Downstream Impact will add to this product and engineering strength, and we are thrilled to be a part of the company’s growth journey.”

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion.

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Categories: Business News

Deliveroo confirms anticipated floatation in London, will be among first to use ‘dual shares’ structure

2021, March 4 - 7:22pm

Food delivery startup Deliveroo has today confirmed its stock market floatation in London, something which was on the cards previously. The latest valuation in June last year was over $7 billion.

The eight-year-old company is hoping to use “dual-class” shares, which although currently precluded from the premium segment of the exchange, could transfer over if the latest regulatory recommendations are approved. Dual-class shares are being pushed by the U.K. government in a bid to keep U.K. companies from being lured over to the Nasdaq, as well as attract continental European listings. They are popular in the U.S. — where the class is used by companies such as Facebook and Alphabet — because it allows founders to take a longer view of strategy and retain more control of their companies during decisions such as mergers and acquisitions.

Will Shu, CEO of Deliveroo, said in a statement: “Deliveroo was born in London. This is where I founded the company and delivered our first order. London is a great place to live, work, do business and eat. That’s why I’m so proud and excited about a potential listing here.”

Deliveroo’s business has boomed during pandemic-related lockdowns — it posted six-months of consecutive profits throughout this period — and now plans to expand.

Although Deliveroo’s listing came comes just a day after the British government gave the green light to recommendations for the dual-class shares, Deliveroo’s listing was always expected to be in London, given it’s U.K. base, so this news looks to have a political tinge attached to it. Indeed, the press release was handily issued with a supportive statement from the Chancellor of the Exchequer.

Claudia Arney, chair of Deliveroo, said: “The time-limited dual-class structure would provide Will and his team with the certainty needed to execute against their ambitious growth plan to become the definitive online food company.”

Deliveroo’s plans include expanding its “ghost” kitchens; on-demand grocery; extending its Plus subscription service; and offering its Signature service to restaurants, which allows customers to order delivery via a restaurants’ own website.

The multibillion-pound IPO will be a shot in the arm for The City after Amsterdam overtook London as Europe’s largest share-trading center in January, post-Brexit.

Deliveroo pegged a $7 billion valuation in January after raising $180 million from investors.

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included in each for audience questions and discussion.

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Categories: Business News

IFC backs Bolt with $24M to expand its transportation network in emerging markets

2021, March 4 - 7:09pm

Bolt, an Uber competitor that is building an international on-demand network of services to transport people, food and other items in cars, scooters and bikes across Europe and Africa, has picked up some strategic funding today to continue expanding its business in emerging markets.

The International Finance Corporation, a division of the World Bank, is investing €20 million ($24 million) in the Tallinn, Estonia-based startup to open more services across Eastern Europe and Africa, with a specific mention of more services in Ukraine and Nigeria, two of those regions’ biggest economies, and more innovative services to target demographic groups that might be under-represented or under-served, such as women. 

Funding from the IFC is a significant endorsement of a company, if at the same time a relatively small amount compared to Bolt’s wider fundraising efforts.

Most recently, it raised $182 million in December at a significant hike to its previous valuation (which had been $1.9 billion). A Bolt spokesperson tells us that, once again, “our valuation has grown with the latest funding round, but we’re not disclosing the updated number.” (For the record, in December we calculated that the valuation was probably around $4.3 billion, based on a 1.5x multiple on GMV of €3.5 billion, figures provided to us by CEO and co-founder Markus Villig. That figure wasn’t disputed, nor confirmed, though.)

Bolt raises $182M to expand its on-demand transportation network in Europe and Africa

People may not consider the IFC in the same breath as more typical VCs like SoftBank, Sequoia, Index Ventures or Andreessen Horowitz, but it’s a significant player when it comes to backing startups around the world. Last year alone it invested $22 billion in companies, it said.

Backing a transportation startup is a notable move for it, considering that a lot of the IFC’s interest in tech has typically been around financial services. For example, it has also invested money into CurrencyCloud, Remitly, CompareAsiaGroup and Kreditech, among others.

But improving transportation is another development target — in particular when you consider that companies like Bolt are built like marketplaces that provide income to people and infrastructure to businesses (in the form of delivery), on top of its most obvious service helping consumers get around.

“We are looking forward to partnering with IFC to further support entrepreneurship, empower women and increase access to affordable mobility services in Africa and Eastern Europe,” said Villig, in a statement. “Together with the investment from the European Investment Bank last year, we are proud to have sizable and strategically important institutions backing us and recognizing the strategic value Bolt is providing to emerging economies”.

Bolt’s efforts in emerging markets have long been one of the key ways that the company differentiates itself from Uber — perhaps logical, considering that the company itself was founded in an emerging economy. Since launching in 2013, it has picked up more than 50 million customers and more than 1.5 million drivers in 40 countries, including 400,000 drivers in 70 cities on the African continent.

Bolt, the European on-demand transport company, raises $109M on a $1.9B valuation

That strategy has also grown over time to include services for under-represented groups in these under-represented markets. Bolt is piloting a “Women Only” ride-hailing service in South Africa, with female drivers and passengers to improve job opportunities and general safety, one of the programs that the IFC funding will support, it said.

“Technology can and should unlock new pathways for sustainable development and women’s empowerment,” said Stephanie von Friedeburg, IFC senior vice president of Operations, in a statement. “Our investment in Bolt aims to help tap into technology to disrupt the transport sector in a way that is good for the environment, creates more flexible work opportunities for women, and provides safer and more affordable transportation access in emerging markets.”

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included in each for audience questions and discussion.

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Categories: Business News

Countingup closes £9.1M for its business current account with built-in accounting features

2021, March 4 - 5:00pm

Countingup, the U.K. fintech offering a business current account with built-in accounting features, has closed £9.1 million in Series A investment. Leading the round is Framework Venture Partners, with participation from Gresham House Ventures, Sage and existing investors.

It’s noteworthy that Countingup has previously taken investment from ING, and the addition of Sage as a backer is interesting since both could help the startup reach more business customers. It also potentially sets up one future road to exit. However, let’s not get ahead of ourselves.

Founded in 2017 by Tim Fouracre, who previously founded cloud accounting software Clear Books, Countingup now boasts over 34,000 business customers. The company’s long-term vision is to be the one “financial hub” for micro businesses in the U.K. and beyond. Its initial “attack vector” was to combine a business bank account with bookkeeping features to help automate the filing of accounts — a major time sink and pain-point for sole traders and small businesses.

Countingup scores £4M bridge round for its small business banking and accounting app

Today that includes a business bank account with its own sort code and account number, a Mastercard for making payments and support for faster payments and direct debits. On the accounting software side, Countingup currently supports automated bookkeeping, invoicing, receipts, payment of bills, tax estimates and profit and loss reporting.

In addition, accountants can be given limited access via the web to better support clients banking with Countingup. This includes the option for business owners to share real-time bookkeeping data with their accountant, “eliminating the pains of re-authorisation requests, data lags, duplicates, and inaccuracies,” says the fintech.

To that end, Fouracre tells me the new funding will be used to quickly scale up the team from 30 to 80 people. “This will accelerate our roadmap enabling more swim lanes of product work to be on the go concurrently,” he says.

That roadmap includes tax filing, new financial services (e.g. loans, card payment services) and multi-currency invoicing and payments to support the 33% of SMEs in the U.K. that trade internationally. A web version of the app for small business customers is planned too.

“We will also be building out our sales and marketing teams for more aggressive growth,” adds Fouracre.

Countingup’s business model combines both SaaS and fintech. On the SaaS side, the company earns monthly subscription fees. On the fintech side, it generates revenue from banking activity (e.g. interchange fees) on Mastercard spend. In the future, that will likely include other sources of income via offering credit, payments and FX.

Comments Neal Watkins, EVP, Small Business Segment at Sage: “Investing in high-growth SaaS businesses is core to our strategy to enable small businesses and accountants to survive and thrive. This is an exciting opportunity to be part of the startup journey in a new way as businesses explore the benefits of bringing accounting and financial services together”.

UK’s ANNA raises $21M for its SMB-focused business account and tax app

Categories: Business News

Payfazz invests $30M in Xfers as the two Southeast Asian fintechs form Fazz Financial Group

2021, March 4 - 4:43pm

Payfazz and Xfers, two startups that want to increase financial inclusion in Southeast Asia, announced today they have joined forces to create a new holding entity called Fazz Financial Group. As part of the deal, Payfazz, an agent-based financial services network in Indonesia, invested $30 million into payments infrastructure provider Xfers.

Based in Singapore, Xfers will serve as the B2B and Southeast Asia arm of Fazz Financial Group, while Payfazz, which already uses Xfers’ payments infrastructure, will continue expanding in Indonesia. The two companies will retain their names while working together under the new holding entity.

Both Payfazz and Xfers are Y Combinator alums, and want to make financial services accessible to more Southeast Asians, even if they don’t have a bank account. Xfers co-founder Tianwei Liu told TechCrunch in an email he and Payfazz co-founder Hendra Kwik began talking about joining forces in early 2020 because of their startups’ shared goals.

“This is also coupled with the fact that last year, the COVID-19 pandemic has driven a significant increase in demand for digital payments and financial services across Indonesian rural areas, creating a huge growth opportunity for us,” Liu added.

Kwik will serve as Fazz Financial Group’s group CEO, while Liu will be the financial entity’s deputy CEO. Both will continue serving as CEOs of their respective companies. Fazz Financial Group also appointed as its chief financial officer Robert Polana, who previously held the same role at booking platform Tiket.com.

In Indonesia, Payfazz has built a network of 250,000 financial agents to reach people in rural areas where many banks don’t operate branches. Customers deposit cash with agents, and that balance can used to pay phone, electricity and other bills.

Payfazz, which announced a $53 million Series B in July from investors including Tiger Global and Y Combinator, also offers loans and payment services for offline retailers. As part of Fazz Financial Group, it will continue to build its agent banking network.

Payfazz gets $53 million to give more Indonesians access to financial services

Payfazz uses payment infrastructure developed by Xfers to accept digital payments. Originally launched six years ago with an API for bank transfers, Xfers has since expanded its portfolio of software to include payment acceptance for businesses, tools for disbursing and transferring funds and a cryptocurrency wallet. In 2020, Xfers obtained a Major Payment Institution license for e-money issuance from the Monetary Authority of Singapore.

Xfers will continue to serve clients in Indonesia and Singapore with its payments infrastructure, which enables them to accept bank transfers, e-wallet funds and payments through convenience stores and agent banking networks (like Payfazz). Xfers says it has access to more than 10 million underbanked consumers in Indonesia through its work with agent banking services, and also plans to expand into Thailand, the Philippines, Malaysia and Vietnam.

Fazz Financial Group plans to launch two new products later this year: a zero-integration payment solution for Singapore-based merchants and a single-integration solution that will connect local payment methods across Southeast Asia.

Liu said that, unlike the United States, Southeast Asia “has a fragmented local payments landscape, even within each country,” meaning that consumers often use several payment methods. Creating a single-integration for payment methods in Southeast Asia gives brands a growth channel when entering new countries, allowing them to scale up more quickly, he added.

“The COVID-19 pandemic lockdown has also driven a big surge in online sales and transactions across Southeast Asia, so there is a huge need for online payments by businesses and merchants across the region,” Liu said. “The zero-integration and single-integration solution will help businesses and merchants start accepting online payments quickly and easily with a simple integration within minutes, without any need to deal with complex regulation/license handling and technology development.”

Singapore-based Xfers Lands $2.5M To Simplify Bank Transfers For Online Sellers

Categories: Business News

Revolut lets customers switch to Revolut Bank in 10 additional countries

2021, March 4 - 9:01am

Fintech startup Revolut has its own banking license in the European Union since late 2018. It lets the company offer some additional financial services without partnering with third-party companies. And the company is going to let customers switch to Revolut Bank in 10 additional countries.

The Bank of Lithuania has granted a specialized license — it isn’t a full-fledged license per se, as it focuses on some activities. The company is taking advantage of European passporting rules to operate in other European countries. Right now, Revolut takes advantage of its banking license in two countries — Poland and Lithuania.

In Lithuania for instance, you can apply for a credit card with a credit limit that’s twice the value of your monthly salary (up to €6,000). The company also offers personal loans between €1,000 and €15,000. You can pay back over one to 60 months.

Now, customers in Bulgaria, Croatia, Cyprus, Estonia, Greece, Latvia, Malta, Romania, Slovakia and Slovenia will be able to become Revolut Bank customers. It’s not a transparent process, as you need to get through a few steps to carry your account over.

But once this process is done, your deposits are protected under the deposit guarantee scheme. If Revolut Bank shutters at some point down the road, customers can claim up to €100,000 thanks to the scheme — both euros and foreign currencies are protected.

You can expect new credit products in the 10 new markets. Overall, Revolut has attracted 15 million customers. The company recently announced that it was also applying for a banking license in the U.K., its home country and its biggest market.

Revolut gets European banking license in Lithuania

Categories: Business News

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