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China gets serious about antitrust, fines Alibaba $2.75B

Chinese regulators have hit Alibaba with a record fine of 18 billion yuan (about $2.75 billion) for violating anti-monopoly rules as the country seeks to rein in the power of its largest internet conglomerates.

In November, China proposed sweeping antitrust regulations targeting its interent economy. In late December, the State Administration for Market Regulation said it had launched an antitrust probe into Alibaba, weeks after the authorities called off the initial public offering of Ant Group, the financial affiliate of Alibaba.

SAMR, the country’s top market regulator, said on Saturday it had determined that Alibaba had been “abusing market dominance” since 2015 by forcing its Chinese merchants to sell exclusively on one e-commerce platform instead of letting them choose freely among different services, such as Pinduoduo and JD.com. Vendors are often pressured to side with Alibaba to take advantage of its enormous user base.

Since late 2020, a clutch of internet giants including Tencent and Alibaba have been hit with various fines for violating anti-competition practices, for instance, failing to clear past acquisitions with regulators. The meager sums of these penalties were symbolic at best compared to the benefits the tech firms reap from their market concentration. No companies have been told to break up their empires and users still have to hop between different super-apps that block each other off.

In recent weeks, however, there are signs that China’s antitrust authorities are getting more serious. The latest fine on Alibaba is equivalent to 4% of the company’s revenue generated in the calendar year of 2019 in China.

“Today, we received the Administrative Penalty Decision issued by the State Administration for Market Regulation of the People’s Republic of China,” Alibaba said in a statement. “We accept the penalty with sincerity and will ensure our compliance with determination. To serve our responsibility to society, we will operate in accordance with the law with utmost diligence, continue to strengthen our compliance systems and build on growth through innovation.”

The thick walls that tech companies build against each other are starting to break down, too. Alibaba has submitted an application to have its shopping deals app run on WeChat’s mini program platform, Wang Hai, an Alibaba executive, recently confirmed.

For years, Alibaba services have been absent from Tencent’s sprawling lite app ecosystem, which now features millions of third-party services. Vice versa, WeChat is notably missing from Alibaba’s online marketplaces as a payment method. If approved, the WeChat-powered Alibaba mini app would break with precedent of the pair’s long stand-off.

Indian social commerce Meesho valued at $2.1 billion in new $300 million fundraise

Meesho said on Monday it has raised $300 million in a new financing round led by SoftBank Vision Fund 2 as the Indian social commerce startup works to become the “single ecosystem that will enable all small businesses to succeed online.”

The new round — a Series E — gives the five-year-old startup a valuation of $2.1 billion, up from about $600 million – $700 million in the 2019 Series D investment. The Indian startup, which has raised about $490 million to date, said existing investors Facebook, Prosus Ventures, Shunwei Capital, Venture Highway, and Knollwood Investment also participated in the new round.

This appears to be Shunwei Capital’s first investment in an Indian startup in nearly a year. New Delhi last year introduced a rule to require its approval before a Chinese investor could write a check to an Indian firm.

Bangalore-based Meesho operates an eponymous online marketplace that connects sellers with customers on social media platforms such as WhatsApp, Facebook and Instagram. Its offerings include order management, taking care of logistics, online payments, real-time shop updates, and allowing businesses to get their customers to subscribe.

The startup claims to have a network of more than 13 million entrepreneurs, a majority of whom are women, from hundreds of Indians towns who largely deal with apparel, home appliances and electronics items.

If Meesho’s mission has to be put in a short phrase, it’d be: “financial independence of women”.

So, it’s only apt that @meeshoapp has first been featured in Play Store on Women’s Day by Google India, and now in Independence Day spotlight.

Recognition of real impact at scale! pic.twitter.com/jcFz2ZOrDA

— Sudhanshu Shekhar (@sdhskr) August 10, 2019

Meesho said it will deploy the fresh capital to help 100 million individuals and small businesses in the country to sell online. “In the last one year, we have seen tremendous growth across small businesses and entrepreneurs seeking to move their businesses online,” said Vidit Aatrey, co-founder and chief executive of Meesho, in a statement.

“We have been closely tracking Meesho for the last 18 months and have been impressed by their growth, daily engagement metrics, focus on unit economics and ability to create a strong team. We believe Meesho provides an efficient platform for SME suppliers and social resellers to onboard the e-commerce revolution in India and help them provide personalized experience to consumers,” said Sumer Juneja, partner at SoftBank Investment Advisers, in a statement.

In a recent report, UBS analysts identified social commerce and business-to-business marketplaces as potential sources of competition to e-commerce firms such as Amazon and Flipkart in India.

Social commerce is one prominent bets to take on modern e-commerce that has struggled to make inroads in India, despite billions of dollars ploughed by Amazon and Flipkart. Another bet is digitizing neighborhood stores in the country — without so much of the social element — that dot tens of thousands of towns, cities and villages in India. Global giants Facebook and Google are backing both the horses.

“Globally, SoftBank has always been excited to back founders that provide unique solutions for the local market. By using the power of artificial intelligence and machine learning, Meesho has created a platform for many small business owners to sell to the next cohort of internet users. We look forward to being a part of this journey,” said Munish Varma, Managing Partner at SoftBank Investment Advisers, in a statement.

Otrium raises $120 million for its end-of-season fashion marketplace

Otrium has raised a $120 million round just a year after raising its $26 million Series B round. BOND and returning investor Index Ventures are leading the round. Existing investor Eight Roads Ventures is also participating.

The concept behind Otrium is quite simple. When items reach the end-of-season status, brands can list those items on Otrium and keep selling them. Otrium is currently available in Europe. Right now, many brands have their own end-of-season sales. But there are some limits to this model.

Those companies often can’t sell their entire back inventory this way. Moreover, the most luxurious fashion brands don’t necessarily want to put a cheaper price tag on their items in their own stores. That’s why a lot of clothing produced stays unsold — and by unsold, it means that those items often get destroyed.

With Otrium, brands can add another sales channel for those specific items. And selling those items online makes a ton of sense as you don’t want to manage small end-of-season inventories across multiple stores. One big online inventory is all you need.

And because some brands are reluctant about selling outdated items, Otrium tries to be as friendly as possible with fashion companies. They retain control over pricing, merchandising and visibility of their excess inventory.

The startup also recently launched advanced analytics. The idea here is that Otrium can help brands identify evergreen products that should remain available year after year.

“We believe that the fashion world will see a rebalancing in the next few years, with more sales being driven by iconic items that brands sell year after year, and will be less reliant on new seasonal launches,” co-founder and CEO Milan Daniels said in a statement.

And it would be a win-win for everyone involved. Otrium would end up selling items that remain relevant for a longer time. And fashion brands could slowly build an evergreen collection of items that would nicely complement their fast fashion collections.

With today’s funding round, Otrium plans to expand to the U.S. The company currently works with several well-known fashion houses, such as Karl Lagerfeld, Joseph, Anine Bing, Belstaff, Reiss and ASICS.

Image Credits: Otrium

Indonesian logistics startup SiCepat raises $170 million Series B

SiCepat, an end-to-end logistics startup in Indonesia, announced today it has raised a $170 million Series B funding round. Founded in 2014 to provide last-mile deliveries for small merchants, the company has since expanded to serve large e-commerce platforms, too. Its services now also cover warehousing and fulfillment, middle-mile logistics and online distribution.

Investors in SiCepat’s Series B include Falcon House Partners; Kejora Capital; DEG (the German Development Finance Institution); Telkom Indonesia’s investment arm MDI Ventures; Indies Capital; Temasek Holdings subsidiary Pavilion Capital; Tri Hill; and Daiwa Securities. The company’s last funding announcement was a $50 million Series A in April 2019.

In a press statement, The Kim Hai, founder and chief executive officer of SiCepat’s parent company Onstar Express, said the funding will be used to “further fortify SiCepat’s position as the leading end-to-end logistics service provider in the Indonesian market and potentially to explore expansion to other markets in Southeast Asia.” SiCepat claims to be profitable already and that it was able to fulfill more than 1.4 million packages per day in 2020.

The logistics industry in Indonesia is highly fragmented, which means higher costs for businesses. At the same time, demand for deliveries is increasing thanks to the growth of e-commerce, especially during the COVID-19 pandemic.

SiCepat is one of several Indonesian startups that have raised funding recently to make the supply chain and logistics infrastructure more efficient. For example, earlier this week, supply chain SaaS provider Advotics announced a $2.75 million round. Other notable startups in the space include Kargo, founded by a former Uber Asia executive, and Waresix.

SiCepat focuses in particular on e-commerce and social commerce, or people who sell goods through their social media networks. In statement, Kejora Capital managing partner Sebastian Togelang, said the Indonesian e-commerce market is expected to grow at five-year compounded annual growth rate of 21%, reaching $82 billion by 2025.

“We believe SiCepat is ideally positioned to serve customers from e-commerce giants to uprising social commerce players which contribute an estimated 25% to the total digital commerce economy,” he added.

Indonesian supply chain startup Advotics raises $2.75M led by East Ventures

The rapid growth of e-commerce in Indonesia, especially during the pandemic, is placing increasing demands on its supply chain infrastructure. But the country’s logistics industry is highly fragmented, with companies usually relying on multiple providers for one shipment, and many warehouses are still concentrated around major cities. Advotics wants to help with software to make the whole supply chain easier to track, and recently closed a $2.75 million funding round led by East Ventures.

Founded in 2016 by Boris Sanjaya, Hendi Chandi and Jeffry Tani, Advotics currently counts more than 70 clients, ranging from individual resellers to large corporations like Exxonmobil, Danone, Reckitt Benckiser, Sampoerna, Kalbe and Mulia Group.

According to research institution Statistics Indonesia, there are about 5 million small and medium-sized manufacturers in Indonesia. They use a supply chain with 15 million small to mid-sized distributors and about 288,000 large distribution companies. This fragmentation means higher expenses, with Report Linker estimating that logistics costs range between 25% to 30% of Indonesia’s gross domestic product.

To help make logistics more efficient for its clients, Advotics offers SaaS solutions to monitor almost their entire supply and logistics chain, from warehouse inventory to generating delivery routes for drivers. It includes a product digitalization feature that uses QR codes to track products and prevent counterfeiting. The company’s new funding will be used to launch a online-to-offline system for SMEs and grow its sales team.

Advotics is among several tech startups that are taking different approaches to tackle Indonesia’s logistics infrastructure. For example, Shipper wants to give sellers access to “Amazon-level logistics,” while Logisly is focused on digitizing truck shipments. Waresix recently acquired Trukita to connect businesses to shippers and truck shipment platform Kargo’s backers include Uber co-founder Travis Kalanick.

Coupang may raise up to $3.6 billion in its IPO, at a potential valuation of $51 billion

According to an amended S-1 filing, South Korean e-commerce leader Coupang expects to price its initial public offering between $27 to $30 per share, potentially raising up to $3.6 billion. After the IPO, Coupang will have a total of 1.7 billion shares outstanding, including Class A and Class B. This means the means the pricing would give Coupang a potential market capitalization between $46 billion to $51 billion, a huge increase over the $9 billion valuation it reached after its last funding round in 2018, led by SoftBank Vision Fund.

Coupang and some of its existing shareholders will offer a total of 120 million shares during the IPO.

If Coupang’s IPO is successful, it would be a huge win for SoftBank Vision Fund, which will own 36.8% of its Class A shares after the listing.

Founded in 2010 by Bom Kim, Coupang is known for its ultra-speedy deliveries and is now the largest e-commerce company in South Korea, according to Euromonitor. According to the filing, Kim will hold 76.7% of voting power after the listing, while SoftBank Vision Fund will hold about 8.6%. Other investors that currently own 5% or more of Coupang’s shares include Greenoaks Capital Partners, Maverick Holdings, Rose Park Advisors, BlackRock and Ridd Investments.

Coupang filed to go public on the New York Stock Exchange last month, under the symbol CPNG. Based on Bloomberg data, Coupang’s listing will be the fourth-biggest by an Asian company on a U.S. exchange, and the largest since Alibaba’s $25 billion IPO in 2014.

Extra Crunch roundup: Antitrust jitters, SPAC odyssey, white-hot IPOs, more

Some time ago, I gave up on the idea of finding a thread that connects each story in the weekly Extra Crunch roundup; there are no unified theories of technology news.

The stories that left the deepest impression were related to two news pegs that dominated the week — Visa and Plaid calling off their $5.3 billion acquisition agreement, and sizzling-hot IPOs for Affirm and Poshmark.

Watching Plaid and Visa sing “Let’s Call The Whole Thing Off” in harmony after the U.S. Department of Justice filed a lawsuit to block their deal wasn’t shocking. But I was surprised to find myself editing an interview Alex Wilhelm conducted with Plaid CEO Zach Perret the next day in which the executive said growing the company on its own is “once again” the correct strategy.


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In an analysis for Extra Crunch, Managing Editor Danny Crichton suggested that federal regulators’ new interest in antitrust enforcement will affect valuations going forward. For example, Procter & Gamble and women’s beauty D2C brand Billie also called off their planned merger last week after the Federal Trade Commission raised objections in December.

Given the FTC’s moves last year to prevent Billie and Harry’s from being acquired, “it seems clear that U.S. antitrust authorities want broad competition for consumers in household goods,” Danny concluded, and I suspect that applies to Plaid as well.

In December, C3.ai, Doordash and Airbnb burst into the public markets to much acclaim. This week, used clothing marketplace Poshmark saw a 140% pop in its first day of trading and consumer-financing company Affirm “priced its IPO above its raised range at $49 per share,” reported Alex.

In a post titled “A theory about the current IPO market”, he identified eight key ingredients for brewing a debut with a big first-day pop, which includes “exist in a climate of near-zero interest rates” and “keep companies private longer.” Truly, words to live by!

Come back next week for more coverage of the public markets in The Exchange, an interview with Bustle CEO Bryan Goldberg where he shares his plans for taking the company public, a comprehensive post that will unpack the regulatory hurdles facing D2C consumer brands, and much more.

If you live in the U.S., enjoy your MLK Day holiday weekend, and wherever you are: Thanks very much for reading Extra Crunch.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

I’m taking the credit/blame for this headline https://t.co/2KYLsTxeHq

— Walter Thompson (@YourProtagonist) January 12, 2021

 

Rapid growth in 2020 reveals OKR software market’s untapped potential

After spending much of the week covering 2021’s frothy IPO market, Alex Wilhelm devoted this morning’s column to studying the OKR-focused software sector.

Measuring objectives and key results are core to every enterprise, perhaps more so these days since knowledge workers began working remotely in greater numbers last year.

A sign of the times: This week, enterprise orchestration SaaS platform Gtmhub announced that it raised a $30 million Series B.

To get a sense of how large the TAM is for OKR, Alex reached out to several companies and asked them to share new and historical growth metrics:

  • Gthmhub
  • Perdoo
  • WorkBoard
  • Ally.io
  • Koan
  • WeekDone

“Some OKR-focused startups didn’t get back to us, and some leaders wanted to share the best stuff off the record, which we grant at times for candor amongst startup executives,” he wrote.

5 consumer hardware VCs share their 2021 investment strategies

For our latest investor survey, Matt Burns interviewed five VCs who actively fund consumer electronics startups:

  • Hans Tung, managing partner, GGV Capital
  • Dayna Grayson, co-founder and general partner, Construct Capital
  • Cyril Ebersweiler, general partner, SOSV
  • Bilal Zuberi, partner, Lux Capital
  • Rob Coneybeer, managing director, Shasta Ventures

“Consumer hardware has always been a tough market to crack, but the COVID-19 crisis made it even harder,” says Matt, noting that the pandemic fueled wide interest in fitness startups like Mirror, Peloton and Tonal.

Bonus: Many VCs listed the founders, investors and companies that are taking the lead in consumer hardware innovation.

A theory about the current IPO market

Digital generated image of abstract multi colored curve chart on white background.

Image Credits: Getty Images/Andriy Onufriyenko

If you’re looking for insight into “why everything feels so damn silly this year” in the public markets, a post Alex wrote Thursday afternoon might offer some perspective.

As someone who pays close attention to late-stage venture markets, he’s identified eight factors that are pushing debuts for unicorns like Affirm and Poshmark into the stratosphere.

TL;DR? “Lots of demand, little supply, boom goes the price.”

Poshmark prices IPO above range as public markets continue to YOLO startups

Clothing resale marketplace Poshmark closed up more than 140% on its first trading day yesterday.

In Thursday’s edition of The Exchange, Alex noted that Poshmark boosted its valuation by selling 6.6 million shares at its IPO price, scooping up $277.2 million in the process.

Poshmark’s surge in trading is good news for its employees and stockholders, but it reflects poorly on “the venture-focused money people who we suppose know what they are talking about when it comes to equity in private companies,” he says.

Will startup valuations change given rising antitrust concerns?

GettyImages 926051128

Image Credits: monsitj/Getty Images

This week, Visa announced it would drop its planned acquisition of Plaid after the U.S. Department of Justice filed suit to block it last fall.

Last week, Procter & Gamble called off its purchase of Billie, a women’s beauty products startup — in December, the U.S. Federal Trade Commission sued to block that deal, too.

Once upon a time, the U.S. government took an arm’s-length approach to enforcing antitrust laws, but the tide has turned, says Managing Editor Danny Crichton.

Going forward, “antitrust won’t kill acquisitions in general, but it could prevent the buyers with the highest reserve prices from entering the fray.”

Dear Sophie: What’s the new minimum salary required for H-1B visa applicants?

Image Credits: Sophie Alcorn

Dear Sophie:

I’m a grad student currently working on F-1 STEM OPT. The company I work for has indicated it will sponsor me for an H-1B visa this year.

I hear the random H-1B lottery will be replaced with a new system that selects H-1B candidates based on their salaries.

How will this new process work?

— Positive in Palo Alto

Venture capitalists react to Visa-Plaid deal meltdown

A homemade chocolate cookie with a bite and crumbs on a white background

Image Credits: Ana Maria Serrano/Getty Images

After news broke that Visa’s $5.3 billion purchase of API startup Plaid fell apart, Alex Wilhelm and Ron Miller interviewed several investors to get their reactions:

  • Anshu Sharma, co-founder and CEO, SkyflowAPI
  • Amy Cheetham, principal, Costanoa Ventures
  • Sheel Mohnot, co-founder, Better Tomorrow Ventures
  • Lucas Timberlake, partner, Fintech Ventures
  • Nico Berardi, founder and general partner, ANIMO Ventures
  • Allen Miller, VC, Oak HC/FT
  • Sri Muppidi, VC, Sierra Ventures
  • Christian Lassonde, VC, Impression Ventures

Plaid CEO touts new ‘clarity’ after failed Visa acquisition

Zach Perret, chief executive officer and co-founder of Plaid Technologies Inc., speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Friday, Jan. 31, 2020. The summit brings together the leading minds in the tech industry for two-days of keynote speakers, breakout sessions, and networking opportunities. Photographer: George Frey/Bloomberg via Getty Images

Image Credits: George Frey/Bloomberg/Getty Images

Alex Wilhelm interviewed Plaid CEO Zach Perret after the Visa acquisition was called off to learn more about his mindset and the company’s short-term plans.

Perret, who noted that the last few years have been a “roller coaster,” said the Visa deal was the right decision at the time, but going it alone is “once again” Plaid’s best way forward.

2021: A SPAC odyssey

In Tuesday’s edition of The Exchange, Alex Wilhelm took a closer look at blank-check offerings for digital asset marketplace Bakkt and personal finance platform SoFi.

To create a detailed analysis of the investor presentations for both offerings, he tried to answer two questions:

  1. Are special purpose acquisition companies a path to public markets for “potentially promising companies that lacked obvious, near-term growth stories?”
  2. Given the number of unicorns and the limited number of companies that can IPO at any given time, “maybe SPACS would help close the liquidity gap?”

Flexible VC: A new model for startups targeting profitability

12 ‘flexible VCs’ who operate where equity meets revenue share

Spotlit Multi Colored Coil Toy in the Dark.

Image Credits: MirageC/Getty Images

Growth-stage startups in search of funding have a new option: “flexible VC” investors.

An amalgam of revenue-based investment and traditional VC, investors who fall into this category let entrepreneurs “access immediate risk capital while preserving exit, growth trajectory and ownership optionality.”

In a comprehensive explainer, fund managers David Teten and Jamie Finney present different investment structures so founders can get a clear sense of how flexible VC compares to other venture capital models. In a follow-up post, they share a list of a dozen active investors who offer funding via these nontraditional routes.

These 5 VCs have high hopes for cannabis in 2021

Marijuana leaf on a yellow background.

Image Credits: Anton Petrus (opens in a new window)/Getty Images

For some consumers, “cannabis has always been essential,” writes Matt Burns, but once local governments allowed dispensaries to remain open during the pandemic, it signaled a shift in the regulatory environment and investors took notice.

Matt asked five VCs about where they think the industry is heading in 2021 and what advice they’re offering their portfolio companies:

Germany’s Xentral nabs $20M led by Sequoia to help online-facing SMBs run back offices better

Small enterprises remain one of the most underserved segments of the business market, but the growth of cloud-based services — easier to buy, easier to provision — has helped that change in recent years. Today, one of the more promising startups out of Europe building software to help SMEs run online businesses is announcing some funding to better tap into both the opportunity to build these services, and to meet a growing demand from the SME segment.

Xentral, a German startup that develops enterprise resource planning software covering a variety of back-office functions for the average online small business, has picked up a Series A of $20 million.

The company’s platform today covers services like order and warehouse management, packaging, fulfillment, accounting and sales management, and the majority of its 1,000 customers are in Germany — they include the likes of direct-to-consumer brands like YFood, KoRo, the Nu Company and Flyeralarm.

But Benedikt Sauter, the co-founder and CEO of Xentral, said the ambition is to expand into the rest of Europe, and eventually other geographies, and to fold in more services to its ERP platform, such as a more powerful API to allow customers to integrate more services — for example in cases where a business might be selling on their own site, but also Amazon, eBay, social platforms and more — to bring their businesses to a wider market.

Mainly, he said, the startup wants “to build a better ecosystem to help our customers run their own businesses better.”

The funding is being led by Sequoia Capital, with Visionaires Club (a B2B-focused VC out of Berlin) also participating.

The deal is notable for being the prolific, high-profile VC’s first investment in Europe since officially opening for business in the region. (Sequoia has backed a number of startups in Europe before this, including Graphcore, Klarna, Tessian, Unity, UiPath, n8n and Evervault — but all of those deals were done from afar.)

Augsburg-based Xentral has been around as a startup since 2018, and “as a startup” is the operative phrase here.

Sauter and his co-founder Claudia Sauter (who is also his co-founder in life: she is his wife) built the early prototype for the service originally for themselves.

The pair were running a business of their own — a hardware company they founded in 2008, selling not nails, hammers and wood, but circuit boards they they designed, along with other hardware to build computers and other connected objects. Around 2013, as the business was starting to pick up steam, they decided that they really needed better tools to manage everything at the backend so that they would have more time to build their actual products.

But Bene Sauter quickly discovered a problem in the process: smaller businesses may have Shopify and its various competitors to help manage e-commerce at the front end, but when it came to the many parts of the process at the backend, there really wasn’t a single, easy solution (remember this was eight years ago, at a time before the Shopifys of the world were yet to expand into these kinds of tools). Being of a DIY and technical persuasion — Sauter had studied hardware engineering at university — he decided that he’d try to build the tools that he wanted to use himself.

The Sauters used those tools for for years, until without much outbound effort, they started to get a some inbound interest from other online businesses to use the software, too. That led to the Sauters balancing both their own hardware business and selling the software on the side, until around 2017/2018 when they decided to wind down the hardware operation and focus on the software full-time. And from then, Xentral was born. It now has, in addition to 1,000 customers, some 65 employees working on developing the platform.

The focus with Xentral is to have a platform that is easy to implement and use, regardless of what kind of SME you might be as long as you are selling online. But even so, Sauter pointed out that the other common thread is that you need at least one person at the business who champions and understands the value of ERP. “It’s really a mindset,” he said.

The challenge with Xentral in that regard will be to see how and if they can bring more businesses to the table and tap into the kinds of tools that it provides, at the same time that a number of other players also eye up the same market. (Others in the same general category of building ERP for small businesses include online payments provider Sage, Netsuite and Acumatica.) ERP overall is forecast to become a $49.5 billion market by 2025.

Sequoia and its new partner in Europe Luciana Lixandru — who is joining Xentral’s board along with Luciana Lixandru and Visionaries’ Robert Lacher — believe however that there remains a golden opportunity to build a new kind of provider from the ground up and out of Europe specifically to target the opportunity in that region.

“I see Xentral becoming the de facto platform for any SMEs to run their businesses online,” she said in an interview. “ERP sounds a bit scary especially because it makes one think of companies like SAP, long implementation cycles, and so on. But here it’s the opposite.” She describes Xentral as “very lean and easy to use because you an start with one module and then add more. For SMEs it has to be super simple. I see this becoming like the Shopify for ERP.”

Despite PR storm, Pinduoduo stock and downloads stay robust

Pinduoduo, a rapidly growing Chinese e-commerce company, is weathering its PR storm after the death of an employee sparked criticism against the firm’s grueling working hours.

The employee, 21 years old, collapsed on her way home from work on a late night before New Year. The cause of her death has not been disclosed but internet users speculated that she had died from exhaustion.

Posts with the hashtag #PinduoduoEmployeeSuddenDeath have accumulated 300 million views on the Chinese microblogging platform Weibo. Separately, another Pinduoduo employee committed suicide on January 9 by jumping from his 27th-floor apartment. The local labor authorities are reported to be reviewing working conditions at Shanghai-based Pinduoduo.

On Sunday, a former Pinduoduo employee spoke out against the firm’s stressful work culture in a video that went viral, adding to the public outcry against Alibaba’s biggest rival. He alleged that employees at Pinduoduo’s headquarters are required to work at least 300 hours a month (about 75 hours a week), whereas staff in the newly established grocery delivery department have a 380-hour minimum. The employee who fell on her way home worked on Pinduoduo’s grocery business in the Western province of Xinjiang.

People with knowledge told TechCrunch that employees working on certain projects at Pinduoduo might work over 300 hours a month, though the hours aren’t mandatory. Companywide, staff are required to work from 11 AM to 8 PM.

Pinduoduo cannot be immediately be reached for comment.

Long working hours aren’t unique to Pinduoduo in China. The string of incidents is reviving the debate around “996”, a term that denotes employees working from 9 AM to 9 PM, six days a week, though it can refer to any other form of demanding work regime in China’s cutthroat internet industry.

Despite the public backlash and calls to boycott Pinduoduo, the company’s market position appears to remain firm. Its app downloads have remained stable since the first employee incident two weeks ago, with some days even seeing slight growth in installs, according to data analytics provider Jiguang. As of January 8, Pinduoduo had nearly 650 million installs.

Its shares, traded in New York, climbed from $144 on December 28 to $187 on January 5 and dropped slightly to $174 on January 11. A few venture capital investors of Pinduoduo contacted by TechCrunch declined to comment for this story.

The figures could be telling. Despite its efforts to attract more users in China’s wealthier cities, a substantial number of Pinduoduo users live in China’s low-tier cities and rural towns. The “996” culture of the megacity-based tech giants may be remote for them, while the deals on Pinduoduo, the e-commerce app famous for its “dirt cheap” goods, are tangible.

Daily Crunch: Alibaba faces antitrust probe

Chinese authorities investigate an e-commerce giant, Google may be tightening its grip on research and VCs weigh in on the year’s biggest surprises. This is your (briefer than usual) Daily Crunch for December 24, 2020.

The big story: Alibaba faces antitrust probe

China’s State Administration for Market Regulation said that it’s investigating the e-commerce giant over a policy that forces merchants to sell exclusively with Alibaba and skip rival platforms JD.com and Pinduoduo.

“Alibaba will actively cooperate with the regulators on the investigation,” the company said in a statement. “Company business operations remain normal.”

Meanwhile, Chinese authorities have already called off the initial public offering of Alibaba affiliate Ant Group, and the company has now received another “meeting notice” from regulators.

Holiday grab bag

Google reportedly tightens grip on research into ‘sensitive topics’ — Reuters, citing researchers at the company and internal documents, reports that Google has implemented new controls in the last year, including an extra round of inspection for papers on certain topics.

Five VCs discuss what surprised them the most in 2020 — The latest episode of Equity reflects on a year that no one could have predicted.

Gift Guide: Last-minute subscriptions to keep the gifts going all year — They’re easy to order at the very last minute, easy to give from afar and they’ll spread the gifting fun out over weeks and months.

Advice and analysis from Extra Crunch

The built environment will be one of tech’s next big platforms — An in-depth look at Sidewalk Labs’ abandoned Toronto waterfront project.

US seed-stage investing flourished during pandemic — According to a TechCrunch analysis of PitchBook data and a survey of venture capitalists, a few trends became clear.

Use Git data to optimize your developers’ annual reviews — Three metrics can help you understand true performance quality.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

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China’s e-commerce titan Alibaba hit with antitrust probe

China’s top market watchdog has begun a probe into Alibaba over alleged anti-competition practices at the e-commerce firm, the latest of Beijing’s efforts to curb the country’s ever-expanding internet titans.

The State Administration for Market Regulation said Thursday in a brief statement that it is investigating Alibaba over its “choosing one from two” policy, in which merchants are forced to sell exclusively on Alibaba and skip rivaling platforms JD.com and Pinduoduo.

“Today, Alibaba Group has received notification from the State Administration for Market Regulation that an investigation has been initiated into the Company pursuant to the Anti-Monopoly Law. Alibaba will actively cooperate with the regulators on the investigation,” Alibaba said in a statement.

“Company business operations remain normal.”

On the same day, state-backed Xinhua reported that Ant Group, Alibaba’s affiliate, has been summoned by a group of finance authorities to discuss its “compliance” work. Ant, which works as an intermediary for financial services and customers, has pledged to take measures to curb debt risks after Chinese authorities abruptly called off its colossal initial public offering last month.

“Today, Ant Group received a meeting notice from regulators. We will seriously study and strictly comply with all regulatory requirements and commit full efforts to fulfill all related work,” the firm said in a statement.

Indian court rejects retail giant Future Group’s plea against Amazon

An Indian court rejected Future Group’s plea that sought to prevent its partner Amazon from interfering in — and blocking — the Indian retail giant’s $3.4 billion asset sale deal to Mukesh Ambani’s Reliance Industries, delivering a glimmer of hope to the American e-commerce firm that has invested more than $6.5 billion in the world’s second largest internet market.

Future Group was seeking an ad-interim injunction to restrain its partner Amazon from writing to regulators and other authorities to raise concerns over — and halt — the deal between the two Indian giants. The Delhi High Court ruled on Monday that Amazon cannot be barred from writing to regulators and authorities on account of “potentially irreparable damage.” The regulators will decide whether the deal should be approved in accordance with the law, the court said.

The court, however, also observed that the lawsuit filed by Future Retail, a unit of Future Group, was maintainable and its attempt to seek approval of the transaction with Reliance Industries was also valid.

The ruling is the latest episode in the high-stake battle between estranged partners Amazon and Future Group. Amazon bought 49% in one of Future’s unlisted firms last year in a deal that was valued at over $100 million. As part of that deal, Future could not have sold assets to rivals, Amazon said in court filings.

Things changed this year after the coronavirus pandemic starved the Indian firm of cash, Future Group chief executive and founder Kishore Biyani said at a recent virtual conference. In August, Future Group said that it had reached an agreement with Ambani’s Reliance Industries, which runs India’s largest retail chain, to sell its retail, wholesale, logistics, and warehousing businesses for $3.4 billion.

Months later, Amazon protested the deal by reaching an arbitrator in Singapore and asked the court to block the deal between the Indian retail giants. Amazon secured emergency relief from the arbitration court in Singapore in late October that temporarily halted Future Group from going ahead with the sale.

Until Monday, it remained unclear whether that ruling would hold any water in front of Indian courts. So much so that hours after the Singapore arbitration court announced its verdict, Future Group and Reliance said in a statement that will be going ahead with the deal “without any delay.”

Amazon had also reached out to the Competition Commission of India, the Indian watchdog, to block the deal. Competition Commission of India, however, approved the deal between the Indian firms. In earlier hearings, lawyers for Future Group likened Amazon’s effort to block Future Group’s deal to the East India Company, the British trading house whose arrival in India kicked off nearly 200 years of colonial rule.

At stake is India’s retail market that is estimated to balloon to $1.3 trillion by 2025, up from $700 billion last year, according to consultancy firm BCG and local trade group Retailers’ Association India. Online shopping accounts for about 3% of all retail in India.

Future Group and Amazon did not immediately respond to a request for comment.

YC-backed LemonBox raises $2.5M bringing vitamins to Chinese millennials

Like many overseas Chinese, Derek Weng gets shopping requests from his family and friends whenever he returns to China. Some of the most wanted imported products are maternity items, cosmetics, and vitamin supplements. Many in China still uphold the belief that “imported products are better.”

The demand gave Weng a business idea. In 2018, he founded LemonBox to sell American health supplements to Chinese millennials like himself via online channels. The company soon attracted seed funding from Y Combinator and just this week, it announced the completion of a pre-A round of $2.5 million led by Panda Capital and followed by Y Combinator .

LemonBox tries to differentiate itself from other import businesses on two levels — affordability and personalization. Weng, who previously worked at Walmart where he was involved in the retail giant’s China import business, told TechCrunch that he’s acquainted with a lot of American supplement manufacturers and is thus able to cut middleman costs.

“In China, most supplements are sold at a big markup through pharmacies or multi-level marketing companies like Amway,” Weng said. “But vitamins aren’t that expensive to produce. Amway and the likes spend a lot on marketing and sales.”

Inside LemonBox’s fulfillment center

LemonBox designed a WeChat-based lite app, where users receive product recommendations after taking a questionnaire about their health conditions. Instead of selling by the bottle, the company customizes user needs by offering daily packs of various supplements.

“If you are a vegetarian and travel a lot, and the other person smokes a lot, [your demands] are going to be very different. I wanted to customize user prescriptions using big data,” explained Weng, who studied artificial intelligence in business school.

A monthly basket of 30 B-complex tablets, for instance, costs 35 yuan ($5) on LemonBox. Amway’s counterpart product, a bottle of 120 tablets, asks for 229 yuan on JD.com. That’s about 57 yuan ($9) for 30 tablets.

Selling cheaper vitamins is just a means for LemonBox to attract consumers and gather health insights into Chinese millennials, with which the company hopes to widen its product range. Weng declined to disclose the company’s customer size, but claimed that its user conversion rate is “higher than most e-commerce sites.”

With the new proceeds, LemonBox is opening a second fulfillment center in the Shenzhen free trade zone after its Silicon Valley-based one. That’s to provide more stability to its supply chain as the COVID-19 pandemic disrupts international flights and cross-border trade. Moreover, the startup will spend the money on securing health-related certificates and adding Japan to its sourcing regions.

Returnees adapt

Screenshot of Lemonbox’s WeChat-based store

In the decade or so when Weng was living in the U.S., the Chinese internet saw drastic changes and gave rise to an industry largely in the grip of Alibaba and Tencent. Weng realized he couldn’t simply replicate America’s direct-to-customer playbook in China.

“In the U.S., you might build a website and maybe an app. You will embed your service into Google, Facebook, or Instagram to market your products. Every continent is connected with one other,” said Weng.

“In China, it’s pretty significantly different. First off, not a lot of people use web browsers, but everyone is on mobile phones. Baidu is not as popular as Google, but everybody is using WeChat, and WeChat is isolated from other major traffic platforms.”

As such, LemonBox is looking to diversify beyond its WeChat store by launching a web version as well as a store through Alibaba’s Tmall marketplace.

“There’s a lot of learning to be done. It’s a very humbling experience,” said Weng.

Reliance Retail buys Urban Ladder for $24.4 million

Reliance Retail has acquired a majority stake in furniture and decor platform Urban Ladder, making a broader push into e-commerce as the largest retail chain in India gears up to fight Amazon and Flipkart.

In a filing to the local stock exchange, Reliance Retail said it had acquired a 96% stake in Urban Ladder for about $24.43 million. The Indian retail giant, which retains the option to acquire the remainder stake in the seven-and-a-half-years-old startup, said it has proposed to invest up to $10.06 million more in Urban Ladder by December 2023.

Founded in early 2012, Urban Ladder sells home furniture and decor products online. It also operates a chain of physical retail stores in several Indian cities. The deal size suggests that it was a fire sale.

The startup had raised about $115 million from Sequoia Capital, SAIF Partners, Steadview Capital, and MIT and other investors, according to Crunchbase and Tracxn. In the financial year that ended in March, the Indian startup reported a loss of $6.63 million on a turnover of $58.2 million.

Reliance Retail said (PDF) the investment “will further enable the group’s digital and new commerce initiatives and widen the bouquet of consumer products provided by the group, while enhancing user engagement and experience across its retail offerings.”

Urban Ladder is the latest acquisition for Reliance Retail, which earlier this year said it had entered into a $3.4 billion deal with Future Group to buy several of India’s second largest retail chain’s businesses. In August, Reliance acquired a 60% stake in pharma marketplace Netmeds’ parent firm Vitalic for about $83.2 million.

Reliance Retail, which is part of Reliance Industries (India’s most valued firm), has raised about $6.4 billion in recent months after its sister subsidiary, Jio Platforms, secured over $20 billion this year from Facebook and Google among other high-profile investors.

Reliance Retail, which serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country, entered the e-commerce space with JioMart through a joint venture with Jio Platforms. JioMart now has a presence in over 200 Indian cities and towns, and it also maintains a partnership with Facebook for WhatsApp integration.

China to ship 3 billion parcels during post-COVID Singles’ Day

China’s e-commerce behemoths Alibaba and JD.com again claimed to have set records during the world’s largest shopping event, Singles’ Day. The figures can often be gamed to paint a rosy picture of perpetual growth, journalists and analysts have long observed, so they are limited metrics for measuring the firms’ performance or Chinese consumers’ purchasing power in times of COVID-19.

Nonetheless, the heavy workload for express couriers is indisputably real and visible.

Starting the second week of November, I noticed parcels beginning to pile up outside my apartment compound in downtown Shenzhen, awaiting their final doorstep delivery. Courier workers dashed in and out of elevators, hurling boxes of items that shoppers bought at discounts or after being tricked by elaborate sales formula into thinking they got good deals.

Singles’ Day will see 2.97 billion packages delivered across China between November 11-16, the period when merchants begin shipping after a pre-sale period, according to a notice from the State Post Bureau. That marks a 28% increase from the year before and doubles the normal daily volume.

It also means that, on average, every person in China is set to get more than two parcels during the shopping spree. They will also receive plenty of e-commerce waste, from cardboard, tape, to wrapping bubble. Both JD.com and Alibaba’s Cainiao logistics arm have rolled out programs aiming to make online shopping more sustainable.

While coronavirus infections continue to climb in many countries, China has had few local transmissions for months. As such the pandemic has had a limited impact on delivery speed during Singles’ Day this year, both JD.com and Alibaba told TechCrunch.

Still, the companies have deployed new rules to ensure safety and speed. JD.com, for instance, claimed that it sanitizes its delivery stations and trucks and requires workers to wear masks and take the temperature on a daily basis, practices that are now standard in the country’s logistics sector. Pre-sale also allowed it to allocate inventory closer to consumers in advance. It said that 93% of the shipment orders fulfilled by its own logistics system was completed under 24 hours.

Allbirds CEO Joey Zwillinger on the startup’s $100 million round, profitability, and SPAC mania

As people spend less time out in the world and more time daydreaming about when a vaccine will arrive, lifestyle shoes are only gaining traction.

One obvious beneficiary is Allbirds, the San Francisco-based maker of comfortable, sustainable kicks that launched in 2016 and quickly became a favorite in Silicon Valley circles before taking off elsewhere.

Though the company saw its business slow this year because of the pandemic, its products are now available to purchase in 35 countries and its 20 brick-and-mortar stores are sprinkled throughout the U.S. and Europe, with another outpost in Tokyo and several shops in China.

Investors clearly see room for more growth. Allbirds just closed on $100 million in Series E funding at roughly the same $1.6 billion valuation it was assigned after closing on $27 million in Series D funding earlier this year, and blank-check companies have been calling, says cofounder and CEO Joey Zwillinger. He talked with us earlier this week in a chat that has been edited for length and clarity.

TC: Your shoes are sold worldwide. What are your biggest markets?

JZ: The biggest market by far is the U.S., and the same day that we started here in 2016, we also launched in New Zealand, so that’s been very good to us over the last four years, too. But we’ve seen growth in Japan and Korea and China and Canada and Australia. We have a network of warehouses globally that lets us reach 2.5 billion people [who], if they were so inclined, could get their product in three days. We’re proud of the infrastructure we’ve set up.

TC: We’ve all worn shoes a lot less than we might have expected in 2020. How has that impacted your business?

JZ: We’re growing but definitely not at the same pace we would be had the pandemic not occurred. We’re predominantly digital in terms of how we reach people, but stores are important for us. And we had to switch [those] off completely and lost a portion of our sales for a long time.

TC: Did you have to lay off your retail employees?

JZ: A large portion of our retail force was unable to work, but we were luckily able to keep them fully paid for four months, plus [some received] government benefits if they got that. And now all of our 20 stores are up and running again in a way that’s totally safe and everyone feels really comfortable.

We also donated shoes to frontline workers — 10,000 pairs or around a million dollars’ worth.

TC: What does Allbirds have up its sleeve, in terms of new offerings?

JZ: We just launched our native mobile app, and through it we’re able to give our more loyal fans exclusives. It’s a really cool experience that blends technology with fashion. You can try on shoes in a virtual mirror; you’re given information [about different looks] that you wouldn’t have otherwise.

We also launched wool-based weather-proofed running shoes in April that have blown away our expectations but [were fast discovered by] people who haven’t really been running for 10 to 15 years and are running again [because of gym closures]. It’s a super high-stakes category and one that’s hard to break into because people buy on repeat. But we spent two years making it. It’s not like we launched it because of the pandemic. It’s a shoe for 5K to 10K distances — it’s not a marathon shoe or a trail shoe — and that we’ve been able to clearly articulate that speaks to its success, I think.

TC: What about clothing?

We launched underwear and socks last year in a small launch. We developed a textile that hasn’t been used before — it’s a blend of tree fiber and merino wool because our view is that nature can unlock magic. Underwear is typically synthetic — it’s made from plastics — or cotton, which isn’t a great material for a whole bunch of reasons. [Meanwhile] ours is phenomenal for temperature control; it also feels like cashmere.

TC: Patagonia really advertises its social and environmental values. Do you see Allbirds evolving in a similar way, with a growing spate of offerings?

JZ: I’m incredibly humbled by [the comparison]. Given their environmental stewardship of the retail sector, we hope we’re compared to them. But they are much more of an outdoor brand — not a competitor so to speak. And we’d love to share more of the retail world with them so we can do our environmental thing together.

TC: You just raised funding. Are you profitable and, if not, is profitability in sight?

JZ: We’ve been profitable for most of our existence. Having some discipline as we grow is good. We’re not close to the profitability that we’ll eventually have, but we’re still a small company in investment mode. After we emerge from the pandemic, we’ll enter a ramping-up phase.

TC: Everyone and their brother is raising money for a blank-check company, or SPAC, which can make it a lot faster for a private company to go public. Have you been approached, and might this option interest you?

JZ: Yes and no. Yes we’ve been approached, and no, we’re [not interested]. We want to build a great company and being public might be something that helps enable that for a whole bunch of reasons. But we want to do it at the right time, in a way that helps the business grow in the most durable and sustainable fashion. Just jumping at the opportunity of a SPAC without doing the rigorous prep the way we want to, we’re not super focused on that

That Whole Foods is an Amazon warehouse; get used to it

Earlier this week, in Brooklyn, near the waterfront, Amazon opened what looks from the outside like a typical Whole Foods store. It isn’t open to the public, however; it’s a new fulfillment center.

“Grocery delivery continues to be one of the fastest-growing businesses at Amazon,” the company said in a statement about the location, noting that it has hired hundreds of new employees to aid in its operations. “We’re thrilled to increase access to grocery delivery.”

Americans sort of knew this was coming. Still, the pace at which buildings of all sizes are being either built or converted into e-commerce fulfillment centers — and closer to city centers — has become a bit breathtaking. According to the commercial real estate services firm CBRE, since 2017 at least 59 projects in the U.S. have centered on converting 14 million square feet of retail space into 15.5 million square feet of industrial space, and that trend is “absolutely going to continue,” says Matthew Walaszek, an associate director of industrial and logistics research at CBRE.

It has played out fairly quietly to date, save for the occasional headline about, well, Amazon, typically. Last month, for example, the Wall Street Journal reported that the ever-expanding conglomerate is in talks with the largest mall owner in the U.S., Simon Property Group, about converting both former and current JCPenney and Sears stores into distribution hubs from which it can deliver its products more quickly.

Amazon needs the space. Meanwhile, Simon needs a tenant that can pay its bills. That’s a tall order right now for many brick-and-mortar retailers that were already under pressure and watched foot traffic disappear entirely with as the country largely shut down in March in response to the pandemic threat.

In fact, despite that Simon recently partnered with another outfit to buy retailers Brooks Brothers and Lucky Brand out of bankruptcy (Simon and fellow mall operator Brookfield are also reportedly in advanced talks to buy J.C. Penney), some view the moves as a means to buy time as it reconfigures its properties to accommodate one anchor tenant.

That exact scenario has already played out at Randall Park Mall in a Northeast Ohio suburb (a mall, incidentally, that this editor occasionally frequented as a teenager growing up in Cleveland). Once filled with gaudy stores like Piercing Pagoda and Spencer’s Gifts, the mall — among the world’s largest enclosed shopping centers when it opened in 1976 —  is now the site of an 855,000-square-foot facility filled with mobile robotic fulfillment systems.

A local outlet reported its conveyor belts would stretch farther than 10 miles if laid in a straight line.

It isn’t always Amazon that’s snapping up these properties, of course. There are a number of other large e-commerce players that are rapidly expanding their physical footprint right now, along with opportunistic developers betting the U.S. will also focus more on domestic manufacturing facilities in a post-COVID world.

There are other big grocery chains that, like Amazon’s Whole Foods, are increasingly focused on developing fulfillment centers — sometimes right inside a store that sees foot traffic. At an Albertson’s in South San Francisco, for example, customers blithely shop around an automated rack-and-tote system at the store’s center that preps orders for pickup and delivery.

To a certain extent, this ongoing shift in use was inevitable. The U.S. has the strange distinction of featuring 24 square feet of retail space per capita. By comparison, Canada and Australia have 16.8 square feet and 11.2 square feet per capita, respectively. “We just have a lot of retail — we are over-retailed — so it’s not surprising that properties are struggling,” Walaszek says.

The pandemic has only poured figurative fuel on fire. Forbes estimates that upwards of 14,000 real-world retail stores will close in the U.S. this year. Meanwhile, during the first six months of the year, consumers spent $347.26 billion online with U.S. retailers, up 30.1% from $266.84 billion for the same period in 2019, according to U.S. Department of Commerce data parsed by the news and research outfit Digital Commerce.

It’s still a niche trend — retail properties being converted to industrial use. While 14 million square feet has been converted in recent years, it’s a drop in the bucket compared with the 14.5 billion square feet of industrial real estate in the U.S.

That won’t change overnight, either. For one thing, retail-to-industrial conversions involve buy-in from local zoning officials whose constituents are often concerned about congestion, noise and pollution, among other things. Retail rents are also significantly higher than industrial rents — more than double in some markets — so it’s “a hard sell to a retail landlord to convert to industrial where revenues aren’t going to be as high,” notes Walaszek.

Still, thanks to a confluence of events — from a battering of the broader retail industry to the runaway growth of Amazon specifically –  both big and small fulfillment centers are beginning to spring up and fast.

As Amazon’s first “permanent online-only” Whole Foods in Brooklyn underscores, they may wind up in what seem like the unlikeliest of places, too.

Indian startups diversify their businesses to offset COVID-19 induced losses

E-commerce giant Flipkart is planning to launch a hyperlocal service that would enable customers to buy items from local stores and have those delivered to them in an hour and a half or less. Yatra, an online travel and hotel ticketing service, is exploring a new business line altogether: Supplying office accessories.

Flipkart and Yatra are not the only firms eyeing new business categories. Dozens of firms in the country have branched out by launching new services in recent weeks, in part to offset the disruption the COVID-19 epidemic has caused to their core offerings.

Swiggy and Zomato, the nation’s largest food delivery startups, began delivering alcohol in select parts of the country last month. The move came weeks after the two firms, both of which are seeing fewer orders and had to let go hundreds of employees, started accepting orders for grocery items in a move that challenged existing online market leaders BigBasket and Grofers.

Udaan, a business-to-business marketplace, recently started to accept bulk orders from some housing societies and is exploring more opportunities in the business-to-commerce space, the startup told TechCrunch.

These shifts came shortly after New Delhi announced a nationwide lockdown to contain the spread of the coronavirus. The lockdown meant that all public places including movie theaters, shopping malls, schools, and public transport were suspended.

Instead of temporarily halting their businesses altogether, as many have done in other markets, scores of startups in India have explored ways to make the most out of the current unfortunate spell.

“This pandemic has given an opportunity to the Indian tech startup ecosystem to have a harder look at the unit-economics of their businesses and become more capital efficient in the shorter and longer-term,” Puneet Kumar, a growth investor in Indian startup ecosystem, told TechCrunch in an interview.

Of the few things most Indian state governments have agreed should remain open include grocery shops, and online delivery services for grocery and food.

People buy groceries at a supermarket during the first day of the 21-day government-imposed nationwide lockdown as a preventive measure against the spread of the COVID-19 coronavirus, in Bangalore on March 25, 2020. (Photo by MANJUNATH KIRAN/AFP via Getty Images)

E-commerce firms Snapdeal and DealShare began grocery delivery service in late March. The move was soon followed by social-commerce startup Meesho, fitness startup Curefit, and BharatPe, which is best known for facilitating mobile payments between merchants and users.

Meesho’s attempt is still in the pilot stage, said Vidit Aatrey, the Facebook-backed startup’s co-founder and chief executive. “We started grocery during the lockdown to give some income opportunities to our sellers and so far it has shown good response. So we are continuing the pilot even after lockdown has lifted,” he said.

ClubFactory, best known for selling low-cost beauty items, has also started to deliver grocery products, and so has NoBroker, a Bangalore-based startup that connects apartment seekers with property owners. And MakeMyTrip, a giant that provides solutions to book flight and hotel tickets, has entered the food delivery market.

Another such giant, BookMyShow, which sells movie tickets, has in recent weeks rushed to support online events, helping comedians and other artists sell tickets online. The Mumbai-headquartered firm plans to make further inroads around this business idea in the coming days.

For some startups, the pandemic has resulted in accelerating the launch of their product cycles. CRED, a Bangalore-based startup that is attempting to help Indians improve their financial behavior by paying their credit card bill on time, launched an instant credit line and apartment rental services.

Kunal Shah, the founder and chief executive of CRED, said the startup “fast-tracked the launch” of these two products as they could prove immensely useful in the current environment.

For a handful of startups, the pandemic has meant accelerated growth. Unacademy, a Facebook-backed online learning startup, has seen its user base and subscribers count surge in recent months and told TechCrunch that it is in the process of more than doubling the number of exam preparation courses it offers on its platform in the next two months.

Since March, the number of users who access the online learning service each day has surged to 700,000. “We have also seen a 200% increase in viewers per week for the free live classes offered on the platform. Additionally there has been a 50% increase in paid subscribers and over 50% increase in average watchtime per day among our subscribers,” a spokesperson said.

As with online learning firms, firms operating on-demand video streaming services have also seen a significant rise in the number of users they serve. Zee5, which has amassed over 80 million users, told TechCrunch last week that in a month it will introduce a new category in its app that would curate short-form videos produced and submitted by users. The firm said the feature would look very similar to TikTok.

The pandemic “has also accelerated the adoption of online services in India across all demographics. Many who would not have considered buying goods and services online are starting to adopt the online platforms for basic necessities at a faster pace,” said venture capitalist Kumar.

“As far as expansion into adjacent categories is concerned, some of this was a natural progression and startups were slowly moving in that direction anyway. The pandemic has forced people to get there faster.”

Roosh, a Mumbai-based game developing firm founded by several industry veterans, launched a new app ahead of schedule that allows social influencers to promote games on platforms such as Instagram and TikTok, Deepak Ail, co-founder and chief executive of Roosh, told TechCrunch.

ShareChat, a Twitter-backed social network, recently acquired a startup called Elanic to explore opportunities in social-commerce. OkCredit, a bookkeeping service for merchants, has been exploring ways to allow users to purchase items from neighborhood stores.

And NowFloats, a Mumbai-based SaaS startup that helps businesses and individuals build an online presence without any web developing skills, is on-boarding doctors to help people consult with medical professionals.

Startups are not the only businesses that have scrambled to eye new categories. Established firms such as Carnival Group, which is India’s third-largest multiplex theatre chain, said it is foraying into cloud kitchen business.

Amazon, which competes with Walmart’s Flipkart in India, has also secured approval from West Bengal to deliver alcohol in the nation’s fourth most populated state. The e-commerce giant is also exploring ways to work with mom and pop stores that dot tens of thousands of cities and towns of India.

Last week, the American giant launched “Smart Stores” that allows shoppers to walk to a participating physical store, scan a QR code, and pick and purchase items through the Amazon app. The firm, which is supplying these mom and pop stores with software and QR code, said more than 10,000 shops are participating in the Smart Stores program.

India rejects Walmart-owned Flipkart’s proposed foray into food retail business

The Indian government has rejected Flipkart’s proposal to enter the food retail business in a setback for Walmart, which owns majority of the Indian e-commerce firm and which recently counted its business in Asia’s third-largest economy as one of the worst impacted by the global coronavirus pandemic.

The Department for Promotion of Industry and Internal Trade (DPIIT), a wing of the nation’s Ministry of Commerce and Industry, told Flipkart, which competes with Amazon India, that its proposed plan to enter the food retail business violates regulatory guidelines.

Flipkart’s proposed food retail business, called Flipkart FarmerMart, cannot be structured on a 100% foreign direct investment, the Indian agency said. Rajneesh Kumar, chief corporate affairs officer at Flipkart, told TechCrunch that the company was evaluating the agency’s response and intended to re-apply.

“At Flipkart, we believe that technology and innovation driven marketplace can add significant value to our country’s farmers and food processing sector by bringing value chain efficiency and transparency. This will further aid boosting farmers’ income & transform Indian agriculture,” he added.

While announcing the plan to enter the nation’s growing food retail market, Kalyan Krishnamurthy, Flipkart Group CEO, said in October last year that the company planned to invest $258 million in the new venture.

Flipkart planned to invest deeply in the local agriculture-ecosystem, supply chain, and work with tens of thousands of small farmers, their associations, and the nation’s food processing industry, Krishnamurthy said. The food retail unit would help “multiply farmers’ income and bring affordable, quality food for millions of customers across the country.”

Several e-commerce and grocery firms in India, including Amazon, Zomato, and Grofers, have previously secured approval from New Delhi, which earlier permitted 100% foreign direct investment in food and a handful of other sectors, for entering the food retail business.

The Indian government has since revisited the guidelines to clarify that food retail, like any other e-commerce sector, can only operate as a marketplace that allows third-party sellers to engage with buyers — and not offer their own inventories, nor have equity in any of the players who sell on the platform.

Food and grocery are compelling categories for e-commerce businesses in India as it enables them to engage with their customers more frequently. According to research firm Forrester, India’s online food and grocery market remain significantly tiny, accounting for just 1% of the overall sales.

In the most recent quarterly earnings call, Walmart said limited operations at Flipkart had negatively affected the group’s overall growth. New Delhi announced one of the world’s stringent lockdowns across the nation in late March that restricted Amazon and Flipkart from delivering in many states and only sell “essential items” such as grocery and hygienic products.

India maintains the stay-at-home orders for its 1.3 billion citizens, though it has eased some restrictions in recent weeks to resuscitate the economy.

Instamojo acquires Times Internet’s GetMeAShop to serve more small businesses in India

Instamojo, a Bangalore-based startup that helps merchants and small businesses accept digital payments, establish presence and sell on the web, has acquired Times Internet-owned Gurgaon-based startup GetMeAShop.

The deal is worth $5 million and includes conglomerate Times Internet making an investment in Instamojo, Sampad Swain, co-founder and chief executive of the Bangalore-based startup, told TechCrunch in an interview.

Hundreds of millions of people have come online in India in the last decade thanks to proliferation of low-cost Android smartphones and availability to some of the world’s cheapest mobile data plans. But most small businesses, especially neighbourhood stores and merchants, remain offline.

A wave of startups in the country today are trying to make it easier for these merchants and businesses to come online. GetMeAShop is one such startup. It runs a platform that allows businesses to set up their website, build an online store, and make it easier for merchants or individuals to engage with — and sell to — their customers through social apps such as WhatsApp and Facebook.

For Instamojo, this acquisition is not surprising. The seven-year-old startup began its journey as a payments provider for small businesses. Over the years, it has launched an online store, an app store, and a lending service to serve more needs of a business. “This acquisition will allow us to become a full-fledged operating system for businesses,” said Swain.

Instamojo has amassed 1.2 million merchants on its platform. “It took us seven years to get a million merchants on the platform. Now we are adding more than 2,000 a day. We are on track to hit 2 million merchants by the end of this year,” he said.

More to follow shortly…

Amazon partners with India’s second largest retailer to sell its goods online

Amazon is deepening its relationship with India’s second largest retail chain, Future Retail, as the e-commerce giant widens its footprint in one of its key overseas markets.

The two said on Monday that they have entered into a long-term business agreement to expand the reach of Future Retail’s stores through Amazon India marketplace. Future Retail operates more than 1,500 stores across India, but until now, it has not aggressively explored sales online.

As part of the agreement, Amazon India will become the authorized online sales channel for Future Retail stores including department and grocery stores chain Big Bazaar and lifestyle food superstore Foodhall, the two said. Additionally, India’s second largest retail chain, which attracts over 350 million footfalls a year across its network, will list its items on Amazon’s two-hour delivery platform Prime Now, which is currently operational in Delhi, Mumbai, Bengaluru, and Hyderabad.

The two giants said that they have agreed to focus on grocery — a category that Amazon has been working in India for awhile — general merchandize, fashion and apparel, and beauty products.

Future Retail will “augment its existing store-infrastructure” at its retail outlets for facilitating seamless packaging and pickup of products ordered online. The two have already launched this service across 22 stores and the early results have been “encouraging,” they said.

Future Consumer, which is also a part of Future Retail, has also formed a long-term partnership with Amazon to secure an online distribution through the Amazon India marketplace.

Future Consumer offers a wide-range of food, home care, personal care, and beauty products and has built a number of in-house brands such as Tasty Treat for snacks, Voom for fabric care, Dreamery for dairy, Karmiq for dry fruits, Mother Earth for organic staples, Kara for personal care, and CleanMate for household cleaning.

Kishore Biyani, Chairman and Managing Director of Future Retail, said the partnership will “allow us to build upon each other’s strengths in the physical and digital space so that customers benefit from the best services, products, assortment and price.”

The announcement today comes months after Amazon bought stakes in Future Retail’s Future Coupons — that effectively gave it a 3.58% stake in the retail chain group’s India business — and days after India’s largest retail chain, Reliance Retail, began its e-commerce venture.

“Future Retail’s national footprint of stores offering thousands of products across fashion, appliances, home, kitchen and grocery will now be available to millions of customers shopping on Amazon.in, in hours across 25+ cities,” said Amit Agarwal, SVP and Country Head of Amazon India, in a statement.

According to research firm Technopak Advisors, retail in India is estimated to be a $188 billion business in next three years, up from about $79 billion in 2018. Online sales still account for less than 5% of overall retail.

India’s richest man is ready to take on Amazon and Walmart’s Flipkart

As Amazon and Walmart-owned Flipkart spend billions to make a dent in India’s retail market and reel from recent regulatory hurdles, the two companies have stumbled upon a new challenge: Mukesh Ambani, Asia’s richest man.

Reliance Retail and Reliance Jio, two subsidiaries of Ambani’s Reliance Industries, said they have soft launched JioMart, their e-commerce venture, in parts of the state of Maharashtra — Mumbai, Kalyan and Thane.

The e-commerce venture, which is being marketed as “Desh Ki Nayi Dukaan” (Hindi for new store for the country), currently offers a catalog of 50,000 grocery items and promises “free and express delivery.”

In an email to employees, accessed by TechCrunch, the two aforementioned subsidiaries that are working together on the e-commerce venture, said they plan to expand the service to many parts of India in coming months. A Reliance spokesperson declined to comment.

The soft launch this week comes months after Ambani, who runs Reliance Industries — India’s largest industrial house — said that he wants to service tens of millions of retailers and store owners across the country.

If there is anyone in India who is positioned to compete with heavily-backed Amazon and Walmart, it’s him. Reliance Retail, which was founded in 2006, is the largest retailer in the country by revenue. It serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 Indian cities and towns.

Reliance Jio is the largest telecom operator in India with more than 350 million subscribers. The 4G-only carrier, which launched commercial operations in the second half of 2016, disrupted the incumbent telecom operation in the country by offering bulk of data and voice calls at little to no charge for an extended period of time.

In a speech in January, Ambani, an ally of India’s Prime Minister Narendra Modi, invoked Mahatama Gandhi and said like Gandhi, who led a movement against political colonization of India, “we have to collectively launch a new movement against data colonization. For India to succeed in this data-driven revolution, we will have to migrate the control and ownership of Indian data back to India – in other words, Indian wealth back to every Indian.” Modi was among the attendees.

E-commerce still accounts for just a fraction of total retail sales in India. India’s retail market is estimated to grow to $188 billion in next four years, up from about $79 billion last year, according to research firm Technopak Advisors.

In an interview earlier this year, Amit Agarwal, manager of Amazon India, said, “one thing to keep in mind is that e-commerce is a very, very small portion of total retail consumption in India, probably less than 3%.”

To make their businesses more appealing to Indians, both Amazon and Flipkart have expanded their offerings and entered new businesses. Both of the platforms are working on food retail, for instance. Amazon has bought stakes in a number of retailers in India, including in India’s second largest retail chain Future Retail’s Future Coupons, Indian supermarket chain More, and department store chain Shopper’s Stop.

Flipkart has invested in a number of logistic startups including ShadowFax and Ninjacart. Amazon India was also in talks with Ninjacart to acquire some stake in the Bangalore-based startup, people familiar with the matter said.

More to follow…

How to get people to open your emails

Julian Shapiro
Contributor

Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.

We’ve aggregated the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.

This is how you’re going stay up-to-date on growth marketing tactics — with advice you can’t get elsewhere.

Our community consists of 600 startup founders paired with VP’s of growth from later-stage companies. We have 300 YC founders plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo, and Ritual .

You can participate in our community by joining Demand Curve’s marketing webinars, Slack group, or marketing training program. See past growth reports here and here.

Without further ado, onto the advice.


How can you send email campaigns that get opened by 100% of your mailing list?

Based on insights from Nick Selman, Fletcher Richman of Halp, and Wes Wagner.

  • First, a few obvious pieces of advice for avoiding low open rates:
    • Avoid spam filters by avoiding keywords commonly used in spam emails.
    • Consider using email subjects (1) that are clearly descriptive and (2) look like they were written by a friend. Then A/B your top choices.
    • Include the recipient’s name in your email body. This signals to spam filters that you do in fact know the recipient.
  • Now, for the real advice: Let’s say 60% of your audience opens your mailing, how can you get the remaining 40% to open and read it too?
    • First, wait 2 weeks to give everyone a chance to open the initial email.
    • Next, export a list of those who haven’t opened. Mailchimp lets you do this.
    • Important note: The reason many recipients don’t open your email is because it was sent to Spam, it was buried in Promotions, or it was insta-deleted because it looked like spam (but wasn’t). The goal here is to resuscitate these people. You have two options for doing so:
    • (1) Duplicate the initial email then selectively re-send it to non-openers. This time, use a new subject (try a new hook) and downgrade the email to plain text: remove images and link tracking. De-enriching the email in this way can help bypass spam filters and the Promotions tab.
    • (2) Alternatively, export your list of non-openers to a third-party email tool like Mailshake (or Mixmax).
      • First, connect Mailshake to a new Gmail account on your company domain.
      • Next, configure Mailshake to automatically dole out small batches of emails on a daily schedule. Let it churn through non-openers slowly so that Gmail doesn’t flag your account as a spammer.
      • Emails sent through Mailshake are more likely to get opened than emails sent through Mailchimp. Why? Mailshake sends emails through your Gmail account, and Gmail-to-Gmail emails have a greater chance of bypassing Spam and Promotions folders, particularly if the sender doesn’t have a history of its emails being marked as spam.

ThredUp, whose second-hand goods will start appearing at Macy’s and JCPenney, just raised a bundle

ThredUp, the 10-year-old fashion resale marketplace, has a lot of big news to boast about lately. For starters, the company just closed on $100 million in fresh funding from an investor syndicate that includes Park West Asset Management, Irving Investors and earlier backers Goldman Sachs Investment Partners, Upfront Ventures, Highland Capital Partners and Redpoint Ventures.

The round brings ThredUP’s total capital raised to more than $300 million, including a previously undisclosed $75 million investment that it sewed up last year.

A potentially even bigger deal for the company is a new resale platform that both Macy’s and JCPenney are beginning to test out, wherein ThedUp will be sending the stores clothing that they will process through their own point-of-sale systems, while trying to up-sell customers on jewelry, shoes, and other accessories.

It says a lot that traditional retailers are coming to see gently used items as a potential revenue stream for themselves, and little wonder given the size of the resale market, estimated to be a $24 billion market currently and projected to become a $51 billion market by 2023.

We talked yesterday with ThredUp founder and CEO James Reinhart to learn more about its tie-up with the two brands and to find out what else the startup is stitching together.

TC: You’ve partnered with Macy’s and JCPenney. Did they approach you or is ThredUp out there pitching traditional retailers?

JR: I think [the two companies] have been thinking about resale for some time. They’re trying to figure out how to best serve their customers. Meanwhile, we’ve been thinking about how we power resale for a broader set of partners, and there was a meeting of the minds six months ago

We’re positioned now where we can do this really effectively in-store, so we’re starting with a pilot program in 30 to 40 stores, but we could scale to 300 or 400 stores if we wanted.

TC: How is this going to work, exactly, with these partners?

JR: We have the [software and logistics] architecture and the selection to put together carefully curated selections of clothing for particular stores, including the right assortment of brands and sizes, depending on where a Macy’s is located, for example. Macy’s then wraps a high-quality experience around [those goods]. Maybe it’s a dress, but they wrap a handbag and scarves and jewelry around the dress purchase. We feel [certain] that future consumers will buy new and used at the same time.

TC: Who is your demographic, and please don’t say everyone.

JR: It is everyone. It’s not a satisfying answer, but we sell 30,000 brands. We serve lots of luxury customers with brands like Louis Vuitton, but we also sell Old Navy. What unites customers across all brands is they want to find brands that they couldn’t have afforded new; they’re trading up to brands that, full price, would have been too much, so Old Navy shoppers are [buying] Gap [whose shopper are buying] J. Crew and Theory and all the way up. Consistently, what we hear is [our marketplace] allows customers to swap out their wardrobes at higher rates than would be possible otherwise, and it feels to them like they’re doing it in a more [environmentally] responsible way.

TC: What percentage of your shoppers are also consigning goods?

JR: We don’t track that closely, but it’s typically about a third.

TC: Do you think your customers are buying higher-end goods with a mind toward selling them, to defray their overall cost? I know that’s the thinking of CEO Julie Wainwright at [rival] The RealReal. It’s all supposed to be a kind of virtuous circle of shopping.

JR:  We like to talk about buying the handbag, then selling it, but plenty of people will also buy a second-hand Banana Republic sweater because it’s a value [and because] fashion is the second-most polluting industry on the planet.

TC: How far are you going to combat that pollution? I’m just curious if you’re in any way try to bolster the sale of hemp, versus maybe nylon, clothes for example.

JR: We aren’t driving material selection. Our thesis is: we want to stay out of the fashion business and instead ensure there’s a responsible way for people to buy second hand.

TC: For people who haven’t used ThredUp, walk through the economics. How much of each sale does someone keep?

JR: On ThredUp, it isn’t a uniform payment; it depends instead on the brand. On the luxury end, we pay [sellers] more than anyone else — we pay up to 80 percent when we resell it. If it’s Gap or Banana Republic, you get maybe 10 or 15 or 20 percent based on the original price of the item.

TC: How would you describe your standards? What goes into the reject pile?

JR: We have high standards. Items have to be in like-new or gently used condition, and we reject more than half of what people send us. But I think there’s probably more leeway for the Theory’s and J.Crew’s of the world than if you’re buying a Chanel dress.

TC: Unlike some of your rivals, you don’t sell to men. Why not?

JR: Men’s is a small market in secondhand. Men wear the same four colors — blue, black, gray and brown — so it’s not a big resale market. We do sell kids’ clothing, and that’s a big part of our market.

TC: When Macy’s now sells a dress from ThredUp, how much will you see from that transaction?

JR: We can’t share the details of the economics.

TC: How many people are now working for ThredUp?

JR: We have less than 200 in our corporate office in San Francisco, and 50 in Kiev, and then across four distribution centers — in Phoenix; Mechanicsburg [Pa.]; Atlanta; and Chicago — we have another 1,200 employees.

TC: You’ve now raised a lot of money in the last year. How will it be used?

JR: On our resale platform [used by retailers like Macy’s] and on building our tech and operations and building new distribution centers to process more clothing. We can’t get people to stop sending us stuff. [Laughs.]

TC: Before you go, what’s the most under-appreciated aspect of your business?

JR: The logistics behind the scenes. I think for every great e-commerce business, there are incredible logistics [challenges to overcome] behind the scenes. People don’t appreciate how hard that piece is, alongside the data. We’re going to process our 100 millionth item by the end of this year. That’s a lot of data.

U.S. slams Alibaba and its challenger Pinduoduo for selling fakes

China’s biggest ecommerce company Alibaba was again on the U.S. Trade Representative’s blacklist over suspected counterfeits sold on its popular Taobao marketplace that connects small merchants to consumers.

Nestling with Alibaba on the U.S.’s annual “notorious” list that reviews trading partners’ intellectual property practice is its fast-rising competitor Pinduoduo . Just this week, Pinduoduo founder Colin Huang, a former Google engineer, wrote in his first shareholder letter since listing the company that his startup is now China’s second-biggest ecommerce player by the number of “e-way bills”, or electronic records tracking the movement of goods. That officially unseats JD.com as the runner-up to Alibaba.

This is the third year in a row that Taobao has been called out by the U.S. government over IP theft, despite measures the company claims it has taken to root out fakes, including the arrest of 1,752 suspects and closure of 1,282 manufacturing and distribution centers.

“Although Alibaba has taken some steps to curb the offer and sale of infringing products, right holders, particularly SMEs, continue to report high volumes of infringing products and problems with using takedown procedures,” noted the USTR in its report.

In a statement provided to TechCrunch, Alibaba said it does “not agree with” the USTR’s decision. “Our results and practices have been acknowledged as best-in-class by leading industry associations, brands and SMEs in the United States and around the world. In fact, zero industry associations called for our inclusion in the report this year.”

Pinduoduo is a new addition to the annual blacklist. The Shanghai-based startup has over the course of three years rose to fame among China’s emerging online shoppers in smaller cities and rural regions, thanks to the flurry of super-cheap goods on its platform. While affluent consumers may disdain Pinduodou products’ low quality, price-sensitive users are hooked to bargains even when items are subpar.

“Many of these price-conscious shoppers are reportedly aware of the proliferation of counterfeit products on pinduoduo.com but are nevertheless attracted to the low-priced goods on the platform,” the USTR pointed out, adding that Pinduoduo’s measures to up the ante in anti-piracy technologies failed to fully address the issue.

Pinduoduo, too, rebutted the USTR’s decision. “We do not fully understand why we are listed on the USTR report, and we disagree with the report,” a Pinduoduo spokesperson told TechCrunch. “We will focus our energy to upgrade the e-shopping experience for our users. We have introduced strict penalties for counterfeit merchants, collaborated closely with law enforcement and employed technologies to proactively take down suspicious products.”

The attacks on two of China’s most promising ecommerce businesses came as China and the U.S. are embroiled in on-going trade negotiations, which have seen the Trump administration repeatedly accused China of IP theft. Tmall, which is Alibaba’s online retailer that brings branded goods to shoppers, was immune from the blacklist, and so was Tmall’s direct rival JD.com.

Taobao has spent over a decade trying to revive its old image of an online bazaar teeming with fakes and “shanzhai” items, which are not outright pirated goods but whose names or designs intimate those of legitimate brands. Pinduoduo is now asked to do the same after a few years of growth frenzy. On the one hand, listing publicly in the U.S. subjects the Chinese startup to more scrutiny. On the other, small-town users may soon demand higher quality as their purchasing power improves. And when the countryside market becomes saturated, Pinduoduo will need to more aggressively upgrade its product selection to court the more sophisticated consumers from Chinese megacities.

Toast, the restaurant management platform, has raised $250M at a $2.7B valuation

Restaurant sales hit $825 billion last year in the U.S., but with margins averaging at only three to five percent per business, they’re always looking for an edge on efficiency and just generally running things in a smarter way. A startup called Toast, which has built a popular platform for restaurant management, has closed a hefty round of funding to double down on that opportunity to do that.

The company has raised $250 million on a valuation of $2.7 billion, money that it will use to invest in building technology to help restaurants with marketing, recruitment and operational efficiency, as well as start to think about expanding to more territories outside the U.S.

The basics of the funding were flagged earlier today by Prime Unicorn Index and we reached out to the company to confirm. It is being led by TCV and Tiger Global Management, with participation from Bessemer Venture Partners and T. Rowe Price Associates funds and other existing investors.

This Series E is a big bump up for the company: in its previous round in July 2018, the company was valued at $1.4 billion — partly the result of strong growth at the company. While it’s not disclosing revenue numbers or whether it is yet profitable, Toast currently serves tens of thousands of businesses — covering a range of sizes from independent venues to smaller chains — and in the last year tallied up transactions in the tens of billions of dollars, seeing growth of some 148 percent in its revenues, according to CFO Tim Barash.

The restaurant business represents a big opportunity for e-commerce companies, but there have been some notable stumbles where ambitions have not been met with success. Groupon, which spent several years acquiring and organically building a point of sale and restaurant management business, first drastically cut down and then finally called it quits and sold off its efforts, called Breadcrumb, in 2016. Amazon also pulled out of point of sale services (aimed at more than restaurants) and has in certain regions also pulled back on other restaurant efforts like its order management and delivery platform.

Barash said in an interview that he thinks the key to why Toast has steadily grown its business through all that is because a large proportion of its own employees — some 70 percent — have worked in the food service industry themselves.

“I was first a busboy, and then I worked in pizza delivery for years,” he said. “Seventy percent of our employees have worked at restaurants, including those in our product leadership, and that helps us understand the problem.”

Restaurants, as Barash points out, are complicated. “They are essentially manufacturers and retailers at the same time, all in one small physical footprint,” and so the key to building products for them is to understand that and the challenges they face in building and running those businesses.

And that’s before you consider the many other factors that can make restaurants a dicey game, from changing cuisine tastes, to changing eating habits — many get food delivered today — to the precariousness of the commercial real estate market and so much more.

The aim of Toast is to build tools to apply data science and orderly IT processes to address whichever of those variables that can be controlled by the restaurant.

Today, Toast’s products include point of sale services as well as reporting and analytics; display systems for kitchens; online ordering and delivery interfaces; and loyalty programs. It also builds its own hardware, which includes handheld order pads, payment and ordering terminals, self-service kiosks and displays for guests. It also offers links through to a network of some 100 partners, such as Grubhub for takeout food, when a restaurant does not cover those services or functions directly, to help stitch together services to work on its platform.

Tomorrow, the plan is to use the funding to enhance all of those with more advanced features that speak to some of the bigger issues and concerns Barash said its customers are voicing today.

That will include better and more services aimed at guest engagement and retention; better ways to recruit and keep people in an industry that has a high turnover of employees; and of course more tools to address how efficiently a business is operating to make it more profitable. The company has committed some $1 billion in the next five years to R&D to build more hardware and software.

Having access to this kind of tech and platform is a big deal, especially for independently owned places that hope to compete against bigger chains without having to compromise on their core competency: making unique and delicious food.

In the meantime, Barash said that while Toast itself is no stranger to approaches from larger players itself — he declined to say who but said many who have ambitions to do more business with the restaurant industry had approached it over the years — the company’s long-term vision is to grow bigger and remain its own boss.

It’s an ambition that has hit the spot with investors that have an appetite for high-growth businesses.

“At TCV, we invest in companies that have the potential to reshape entire industries. By providing restaurants of all sizes with access to innovative technology, Toast is leveling the playing field and leading the industry’s transition to the cloud,” said David Yuan, general partner at TCV, in a statement, who is joining the board with this round. “Our investment will enable Toast to extend their platform beyond point-of-sale and guest-facing technology, and in doing so, create a powerful SaaS platform with a superlative business model. We’re excited to partner with Toast as they accelerate the growth of the community they serve.”

Alibaba acquires Israeli VR startup Infinity Augmented Reality

Infinity Augmented Reality, an Israeli virtual reality startup, has been acquired by Alibaba, the companies announced this weekend. The deal’s terms were not disclosed. Alibaba and InfinityAR have had a strategic partnership since 2016, when Alibaba Group led InfinityAR’s Series C. Since then, the two have collaborated on augmented reality, computer vision and artificial intelligence projects.

Founded in 2013, the startup’s augmented glasses platform enables developers in a wide range of industries (retail, gaming, medical, etc.) to integrate AR into their apps. InfinityAR’s products include software for ODMs and OEMs and a SDK plug-in for 3D engines.

Alibaba’s foray into virtual reality started three years ago, when it invested in Magic Leap and then announced a new research lab in China to develop ways of incorporating virtual reality into its e-commerce platform.

InfinityAR’s research and development team will begin working out of Alibaba’s Israel Machine Laboratory, part of Alibaba DAMO Academy, the R&D initiative it is pouring $15 billion into with the goal of eventually serving two billion customers and creating 100 million jobs by 2036. DAMO Academy collaborates with universities around the world and Alibaba’s Israel Machine Laboratory has a partnership with Tel Aviv University focused on video analysis and machine learning.

In a press statement, the laboratory’s head, Lihi Zelnik-Manor, said “Alibaba is delighted to be working with InfinityAR as one team after three years of partnership. The talented team brings unique knowhow in sensor fusion, computer vision and navigation technologies. We look forward to exploring these leading technologies and offering additional benefits to customers, partners and developers.”

Amazon reportedly nixes its price parity requirement for third-party sellers in the U.S.

Amazon will stop forbidding third-party merchants who list on its e-commerce platform in the United States from selling the same products on other sites for lower prices, reports Axios.

The company’s decision to end its price parity provision comes three months after Sen. Richard Blumenthal urged the Department of Justice to open an antitrust investigation into Amazon’s policies and a few days after Democratic presidential candidate Sen. Elizabeth Warren announced she would make breaking up Amazon, Google and Facebook a big part of her campaign platform.

Also called “most favored nation” (MFN) requirements, Amazon’s price parity provisions gave it a competitive edge, but because of its size, also led to concerns about its impact on competition and fair pricing for consumers. Amazon stopped requiring price parity of its European Union sellers in 2013 after it was the subject of investigations by the United Kingdom’s Office of Fair Trading and Germany’s Federal Cartel Office.

In a statement, Blumenthal said Amazon’s “wise and welcome decision comes only after aggressive advocacy and attention that compelled Amazon to abandon its abusive contract clause.” He added that “I remain deeply troubled that federal regulators responsible for cracking down on anti-competitive practices seem asleep at the wheel, at great cost to American innovation and consumers.”

TechCrunch has contacted Amazon for comment.

Sea is raising up to $1.5B for its Shopee e-commerce business in Southeast Asia

Alibaba is about to get a jolt from its largest rival in Southeast Asia. Sea, the Nasdaq-listed business, is raising as much as $1.5 billion from a new share offering that’s sure to be funneled into its Shopee e-commerce business.

Singapore-based Sea said in a filing that it plans to offer 60 million American Depositary Shares (ADS) at a price of $22.50 each. That could raise $1.35 billion, but that number could increase by a further $202 million if underwriters take up the full allotment of 9 million additional shares that are open to them. If that were to happen, the grand total raised would pass $1.5 billion. (Shopee raised $500 million in a sale last year.)

Sea said it would use the capital for “business expansion and other general corporate purposes.” That’s a pretty general statement and its business span gaming (Garena) and payments (AirPay), but you would imagine that Shopee, its primary focus these days, would be the main benefactor.

The $22.50 price represents a discount on Sea’s current share price — $24.06 at the time of writing — and the timing sees Sea take advantage of a recent share price rally. The company announced its end of year financials for 2018 last month, but which included positive progress for Shopee and Garena.

Whilst it remains unprofitable, Shopee saw annual GMV — total e-commerce transactions, an indicator of business health — cross $10 billion for the first time, growing 117 percent in the fourth quarter alone.

Those green shoots were met with enthusiasm by investors, as trading drove the stock price to a record high since its October 2017 IPO. That, in turn, made founder Forrest Li a billionaire on paper and gave Sea a market cap of over $8 billion.

Shopee shares have rallied after its 2018 financial report showed signs of promising growth for its Shopee e-commerce business

The capital is very much needed, however, as Shopee is some way from profitability and that is dragging down Sea’s overall business.

While adjusted revenue for Shopee increased by over 1,500 percent last year, it represented just over one-quarter of Sea’s overall $1 billion income in 2018 and contributed heavily to the parent company’s net loss of $961 million. Shopee alone posted a $893 million net loss in 2018.

Shopee is up against some tough competitors in Southeast Asia, most of which have strong links to Alibaba. Those include Alibaba’s own AliExpress service, Lazada — the e-commerce service it acquired — and Tokopedia, the $7 billion-valued Indonesian company that counts Alibaba and SoftBank’s Vision Fund among its backers.

Sea claims to be the largest e-commerce firm in “Greater Southeast Asia” — a classification that includes Taiwan alongside Southeast Asia — although direct comparisons are not possible since Alibaba doesn’t provide detailed information on its e-commerce businesses outside of China.

Alibaba said its international e-commerce businesses — which include many other services beyond Lazada — made $849 million in revenue during its most recent quarter, an annual increase of 23 percent. Lazada is in the midst of a transition — it appointed a new CEO in December — that has included a move away from direct sales. Alibaba said that impacted growth, with GMV rates slowing, but it pledged to continue its focus, having invested a fresh $2 billion into the business last year.

“We continue to invest resources to integrate Lazada’s business and technology operations into Alibaba with the aim of building a strong foundation for us to extend our offerings in Southeast Asia,” it said.

Stitch Fix tumbles 20% in after-hours trading following lukewarm earnings report

Shares of Stitch Fix plunged more than 20 percent in after-hours trading on Monday following the release of a tepid fourth-quarter earnings report.

The online retailer and personal styling service’s adjusted earnings exceeded analyst expectations, but its revenue and active users fell short of estimates. In the quarter ending July 28, Stitch Fix reported a net income of $18.3 million, or 18 cents per share, up from analyst’s 4 cents per share estimate. Its reported net revenue of $318.3 million, a 23 percent year-over-year increase, failed to meet analyst expectations of $318.6 million.

The San Francisco-based company’s user base grew 25 percent YoY, to 2.7 million, another disappointment to Wall Street, which was looking for more than 2.8 million.

Stitch Fix, which has a market cap of nearly $4.4 billion, also reported fiscal year 2018 earnings. In its first year as a public company, Stitch Fix had $1.2 billion in net revenue, $44.9 million in net income and an adjusted EBITDA of $53.6 million.

Founder Katrina Lake took the company public on the Nasdaq in November 2017 in a highly anticipated consumer IPO. The company raised $120 million in the process, selling 8 million shares after making a last-minute decision to downsize its offering ahead of its first day of trading.

Following the release of its first-ever earnings report in December, shares of Stitch Fix similarly took a huge hit, plunging down 10 percent on the news.

The company usually finds its footing and, overall, its stock has continued to climb since its IPO. Stitch Fix had its best day yet on September 18 when its stock was valued at $52.44 apiece, up from the initial price of $15 apiece.

Alongside its earnings report, Stitch Fix announced the upcoming launch of Stitch Fix U.K., its first-ever international market expected to be available to consumers by the end of FY 2019. Following the release of its Q3 earnings report, the company announced the hire of Deirdre Findlay as its new chief marketing officer, as well as the launch of Stitch Fix Kids.

On the earnings call Monday, Lake emphasized how both services, Stitch Fix Kids and Stitch Fix U.K., will augment Stitch Fix’s total addressable market.

“We believe our ability to create a uniquely personalized shopping experience is something that will resonate with consumers and brands outside of the U.S.,” Lake said in a statement.

Bernie Sanders’ problem with Amazon

Vermont Senator Bernie Sanders is seeking additional information about the working conditions in Amazon warehouses in advance of legislation he’s preparing to introduce on September 5. 

Income inequality was, after all, the centerpiece of Sanders’ 2016 presidential campaign. It was a populist message that resonated strongly with voters, giving the dark horse candidate a boost among concerned progressives and independents during a tooth and nail primary battle.

But while the message, perhaps, wasn’t enough to put him over the top, it’s a mission that’s remained central to Sanders’ work on Capitol Hill, finding him taking aim at some of the world’s largest corporations. In recent months, Amazon has been in the senator’s sights.

Earlier today, Sanders tweeted out a link asking employees of the online retail giant to share their experiences working for the company. The form allows current and former Amazon employees to share their stories either on the record or anonymously. It asks whether workers “struggle[d] with the demanding working conditions,” and whether they required public assistance.

Are you a current or former Amazon employee? Please share your experiences with Sen. Bernie Sanders . https://t.co/fQzm3SuyXA

— Bernie Sanders (@SenSanders) August 28, 2018

In a phone call today, Sanders told TechCrunch that his office already knows enough about the working conditions in Amazon warehouses, but is seeking additional information as it prepares to introduce legislation on September 5.

“We know that the median salary for Amazon employees is about $28,000,” the Senator told TechCrunch. “And about half the workers who work for Amazon make less than $28,000 a year.”

It’s easy to see why the company has become a prime target for Sanders. A recent SEC filing put the median salary at $28,446 — less than owner Jeff Bezos makes every 10 seconds.

“We have every reason to believe that many, many thousands of Amazon workers in their warehouses throughout the country are earning very low wages,” Sanders explained. “It’s hard to get this information. Amazon has not been very forthcoming. From what information we’ve gathered, one out of three Amazon workers in Arizona, as we understand it, are on public assistance. They are receiving either Medicaid, food stamps or public housing.”

The Senator acknowledges that nothing about what Amazon is doing, on the face of it, is breaking any laws. But the discrepancy between its highest and lowest wage earners is enough for him to call into question why government subsidies are required to buoy those on the bottom rung. This is precisely what the proposed legislation aims to address.

Put simply, Sanders says we have every reason to believe that the richest man in the world can afford to pay employees more.

“The taxpayers in this country should not be subsidizing a guy who’s worth $150 billion, whose wealth is increasing by $260 million every single day,” said Sanders. “That is insane. He has enough money to pay his workers a living wage. He does not need corporate welfare. And our goal is to see that Bezos pays his workers a living wage.”

While Amazon is notoriously tight-lipped about matters these matters, the company has been on the defensive since the senator made it a kind of pet project. Amazon won’t comment directly on the forthcoming legislation until it’s made official, but the company did provide TechCrunch with comment regarding the blowback.

“We encourage anyone to compare our pay and benefits to other retailers,” an Amazon spokesperson told TechCrunch. “Amazon is proud to have created over 130,000 new jobs last year alone. These are good jobs with highly competitive pay and full benefits. In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime. That’s in addition to our full benefits package that includes health, vision and dental insurance, retirement, generous parental leave, and skills training for in-demand jobs through our Career Choice program, which has over 16,000 participants.”

Amazon further suggests that those interested in learning more about warehouse conditions book a tour of one of its fulfillment centers to “see for themselves.” 

A representative from Sanders’ office tells TechCrunch that Amazon invited the senator on a tour of a fulfillment center, and he plans to take the company up on the offer.

SAN FERNANDO DE HENARES, SPAIN – 2018/07/16: General view of the Amazon warehouse in San Fernando de Henares.

Of course, the concerns over Amazon’s treatment of workers aren’t new. Mother Jones ran an exposé of what it was like working as an Amazon warehouse slave in 2012. In 2013, Gawker published a series of emails from employees discussing life in fulfillment centers citing things like “unrealistic goals,” “very short breaks” and “below zero temps” in warehouses. A protestor cited by The Guardian in 2014 said it was better to be homeless than work for the retailer. And, most recently, Business Insider documented the “horror stories” faced by the Amazon warehouse workers, including nonstop surveillance and so little ability to take breaks, they couldn’t even use the facilities, when needed.  

Amazon has since been on something of a charm offensive in response to those PR headaches.

Last week, there was the odd phenomenon of an army of Twitter accounts claiming to be warehouse workers who were serving up similar talking points.

“Hello!” one wrote, cheerfully. “I work in an Amazon FC in WA and our wages and benefits are very good. Amazon pays FC employess [sic] ~30% more than traditional retail stores and offers full medical benefits from day 1. Working conditions are very good- clean/well lit- Safety is a top priority at my facility!”

That Amazon positions its own offerings as “highly competitive” can, perhaps, be seen as something of an indictment of larger issues with warehouse fulfillment. While the company is an easy target, it’s certainly not alone. And Sanders notes that his office is casting the net wider than just Amazon. Disney and Walmart have also been targeted by the senator.

In June, Sanders told a crowd at an Anaheim church, “I want to hear the moral defense of a company that makes $9 billion in profits, $400 million for their CEOs and have a 30-year worker going hungry. Tell me how that is right.” 

A month later, he took to Twitter to call out CEO Bob Iger directly, writing, “Does Disney CEO Bob Iger have a good explanation for why he is being compensated more than $400 million while workers at Disneyland are homeless and relying on food stamps to feed their families?”

Does Disney CEO Bob Iger have a good explanation for why he is being compensated more than $400 million while workers at Disneyland are homeless and relying on food stamps to feed their families?

— Bernie Sanders (@SenSanders) July 13, 2018

Earlier this week, however, Disney reached an agreement with the Walt Disney World union to pay workers a $15 minimum wage.

“We’ve seen real progress at the Disney corporation,” Sanders told TechCrunch, “and I believe that Jeff Bezos can play a profound role in American society today if he were to say, ‘yes, I’m the richest guy in the world. I will pay my workers a living wage at least $15 and make sure all of my workers have the security and dignity they need. I will improve conditions.’”

Amazon and Walmart, meanwhile, remain the two key targets for the impending legislation. With Democrats in the minority in the U.S. Senate, it seems unlikely that a hearing will be called where Bezos would be asked to testify à la Mark Zuckerberg, but the senator plans to go ahead with the legislation next week, regardless.  

“That legislation is pretty simple,” explained Sanders. “It says: if you are a large company of 500 or more employees and you’re paying your workers wages that are so low that they have to go on food stamps, Medicaid, public housing, etc., then you have to pay taxes commensurate to how much the government is now spending for that assistance. It’s going to be the employer – the Jeff Bezos, the Walton family – who will pick up the tab for these public assistance programs, rather than the middle class of the country.”

Walmart co-leads $500M investment in Chinese online grocery service Dada-JD Daojia

Walmart sold its China-based e-commerce business in 2016, but the U.S. retail giant is very much involved in the Chinese internet market through a partnership with e-commerce firm JD.com. Alibaba’s most serious rival, JD scooped up Walmart’s Yihaodian business and offered its own online retail platform to help enable Walmart to products in China, both on and offline.

Now that relationship is developing further after Walmart and JD jointly invested $500 million into Dada-JD Daojia, an online-to-offline grocery business which is part owned by JD, according to a CNBC report.

Unlike most grocery delivery services, though, Dada-JD Daojia stands apart because it includes a crowdsourced element.

The business was formed following a merger between JD Daojia, JD’s platform for order from supermarkets online which has 20 million monthly users, and Daojia, which uses crowdsourcing to fulfill deliveries and counts 10 million daily deliveries. JD Daojia claims over 100,000 retail stores and its signature is one-hour deliveries for a range of products, which include fruit, vegetables and groceries.

Walmart is already part of the service — it has 200 stores across 30 Chinese cities on the Dada-JD Daojia service; as well as five online stores on the core JD.com platform — and now it is getting into the business itself via this investment.

JD.com said the deal is part of its ‘Borderless Retail’ strategy, which includes staff-less stores and retail outlets that mix e-commerce with physical sales.

“The future of global retail is boundaryless. There will be no separation between online and offline shopping, only greater convenience, quality and selection to consumers. JD was an early investor in Dada-JD Daojia, and continues its support, because we believe that its innovations will be an important part of realizing that vision,” said Jianwen Liao, Chief Strategy Officer of JD.com, in a statement.

Alibaba, of course, has a similar hybrid strategy with its Hema stores and food delivery service Ele.me, all of which links up with its Taobao and T-Mall online shopping platforms. The company recently scored a major coup when it landed a tie-in with Starbucks, which is looking to rediscover growth in China through an alliance that will see Ele.me deliver coffee to customers and make use of Hema stores.

Away from the new retail experience, JD.com has been doing more to expand its overseas presence lately.

The company landed a $550 million investment from Google this summer which will see the duo team up to offer JD.com products for sale on the Google Shopping platform across the world. Separately, JD.com has voiced intention to expand into Europe, starting in Germany, and that’s where the Google deal and a relationship with Walmart could be hugely helpful.

Another strategic JD investor is Tencent, and that relationship has helped the e-commerce firm sell direct to customers through Tencent’s WeChat app, which is China’s most popular messaging service. Tencent and JD have co-invested in a range of companies in China, such as discount marketplace Vipshop and retail group Better Life. Their collaboration has also extended to Southeast Asia, where they are both investors in ride-hailing unicorn Go-Jek, which is aiming to rival Grab, the startup that bought out Uber’s local business.

Amazon launches grocery pickup at select Whole Foods

Amazon today is continuing to make good on its Whole Foods acquisition by introducing a new grocery pickup service at select Whole Foods locations in the U.S. The service, which is available only to Prime members, will initially be available at stores in Sacramento and Virginia Beach, but will expand to more cities through the year. Customers will be able to place their orders using Amazon’s Prime Now app or on the web via PrimeNow.com, then pick up in as little as 30 minutes, Amazon says.

Customers will be able to shop Whole Foods’ fresh and organic produce, bakery, dairy, meat and seafood, floral, and other staples, then pick up their order in an hour from their local Whole Foods Market.

This is the same selection of the thousands of items that customers can order for delivery. The majority of in-store items are available across both pickup and delivery services, we understand.

For orders over $35, the grocery pickup service is free. Under $35, the pickup fee is $1.99.

If customers want to get their order more quickly, they have the option of pay an additional $4.99 for a 30-minute pickup instead.

Once they arrive at the store, customers will park in a designated spot and a Prime Now shopper will then bring the groceries out to their car – the customer can stay in their vehicle. The Prime Now app also has a feature that lets the customer alert the store they’re on the way, so the order will be sure to be ready when they arrive.

The pickup service, like Whole Foods delivery, will be offered from 8 AM to 10 PM.

“Pickup from Whole Foods Market is a perfect option for customers who want to grab healthy and organic groceries at their convenience, all without leaving their car,” said Stephenie Landry, Worldwide Vice President of Prime Now, AmazonFresh and Amazon Restaurants, in a statement about the launch.

Amazon already offers grocery delivery from Whole Foods Market across dozens of cities, but this is the first time it has offered grocery pickup.

The move is a direct challenge to rival Walmart, which has been steadily rolling out a grocery pickup service of its own for years. Today, that service is available at 1,800 Walmart locations in the U.S., with plans to reach 2,200 by year-end, Walmart confirmed to us.

Walmart’s grocery pickup service offers shoppers the same general value proposition as Amazon’s. That is, you can shop online for your groceries, drive to the store, then have someone bring them out to you.  Walmart’s service has been especially well-received by parents with small children, who don’t like the hassle of bringing them into the store for grocery shopping, as well as by others who just don’t have a lot of time to grocery shop.

The service has made sense for Walmart’s more value-minded customers, too. With grocery pickup, shopping can be more affordable because there’s not the overhead of running a delivery service – as with Instacart and Target-owned Shipt, where it’s costlier to use the app than to shop yourself. (Plus, you have to tip).

In addition to not marking up the grocery prices, Amazon notes that Prime members can also receive the same 10 percent off sale items they would otherwise get if shopping in the store, and they’ll enjoy the deeper discounts on select items. These savings are available in-store, or when using grocery pickup or delivery.

Alongside this launch, Amazon is also adding a new way to use Alexa for voice shopping from Whole Foods.

Prime members in supported regions can add Whole Foods Market groceries to their Prime Now cart with simple voice commands. For example: “Alexa, add eggs to my Whole Foods cart.”

Alexa will pick the best available match for your request, considering users’ order history and purchasing behavior of other customers when it adds an item to the cart.

But customers will review these cart additions when they go online later to complete their order and checkout. It’s easy to swap the item in the cart for another one at that time.

A report released this week by The Information claimed that few Alexa owners were actively voice shopping using their Alexa devices, but this data seemed to overlook Alexa’s list-making capabilities. That is, people are more likely using Alexa to add items to an in-app shopping list, which they later revisit when they’re back on their phone or computer to complete the purchase. This behavior feels more natural, as shopping often requires a visual confirmation of the product being ordered and its current pricing.

It’s not surprising that people aren’t using Alexa to transact directly through the voice platform, but it is a bit far-fetched to claim that Alexa isn’t providing a lift to Amazon’s bottom line. In addition to list-making, Alexa also helps to upsell customers on Prime memberships, and its other subscription services, including Prime Music Unlimited, the number 3 music service behind Spotify and Apple Music, as well as Audible subscriptions.

Plus, Alexa controls the smart home, and Amazon has acquired smart home device makers and sells its own smart home hardware. It also offers installation services. Those sales, like music or audiobooks, also aren’t directly flowing through Alexa, but Alexa’s existence helps to boost them.

Amazon’s new Whole Foods/Alexa integration will also capitalize on the more common behavior of list-making, rather than direct check out and purchase.

Amazon declined to say which other markets would receive Whole Foods grocery pickup next, how many it expects to support by year-end, or what factors it’s considering as to where to roll out next. It would only say that it will reach more customers this year.

However, as the grocery pickup and delivery services expand, customers can find out if it’s arrived in their area by saying, “Alexa, shop Whole Foods Market.”

SessionM customer loyalty data aggregator snags $23.8 M investment

SessionM announced a $23.8 million Series E investment led by Salesforce Ventures. A bushel of existing investors including Causeway Media Partners, CRV, General Atlantic, Highland Capital and Kleiner Perkins Caufield & Byers also contributed to the round. The company has now raised over $97 million.

At its core, SessionM aggregates loyalty data for brands to help them understand their customer better, says company co-founder and CEO Lars Albright. “We are a customer data and engagement platform that helps companies build more loyal and profitable relationships with their consumers,” he explained.

Essentially that means, they are pulling data from a variety of sources and helping brands offer customers more targeted incentives, offers and product recommendations “We give [our users] a holistic view of that customer and what motivates them,” he said.

Screenshot: SessionM (cropped)

To achieve this, SessionM takes advantage of machine learning to analyze the data stream and integrates with partner platforms like Salesforce, Adobe and others. This certainly fits in with Adobe’s goal to build a customer service experience system of record and Salesforce’s acquisition of Mulesoft in March to integrate data from across an organization, all in the interest of better understanding the customer.

When it comes to using data like this, especially with the advent of GDPR in the EU in May, Albright recognizes that companies need to be more careful with data, and that it has really enhanced the sensitivity around stewardship for all data-driven businesses like his.

“We’ve been at the forefront of adopting the right product requirements and features that allow our clients and businesses to give their consumers the necessary control to be sure we’re complying with all the GDPR regulations,” he explained.

The company was not discussing valuation or revenue. Their most recent round prior to today’s announcement, was a Series D in 2016 for $35 million also led by Salesforce Ventures.

SessionM, which was founded in 2011, has around 200 employees with headquarters in downtown Boston. Customers include Coca-Cola, L’Oreal and Barney’s.

PayU acquires Zooz to take on international payment services

A week after PayPal led a $50 million round in the cross-border payment specialist PPRO, one of its big competitors in the developing world has announced an acquisition of its own in the same space. PayU — the payments division of Naspers that is sometimes described as the PayPal of the developing world — has acquired Zooz, a startup based out of Israel that provides an API to merchants that lets them accept a variety of payments depending on the market.

The two had already been working together — specifically to provide PayU payment options to merchants in markets where PayU is active — and the plan will be to integrate the services further to enable PayU to step deeper into the cross-border payment services space, potentially even by enabling the integration of the payment methods of competitors as part of the mix of payment options.

“In the choice between building a closed walled garden and open platform, we decided to go with the second model,” PayU’s CEO Laurent le Moal said in an interview. “The reality is that you need to be neutral and work with everyone.”

PayU will also invest in adding further features to the Zooz platform, such as fraud management (which you could argue is table stakes these days in payments), real-time reporting and smart routing.

Zooz’s whole team of 70 will be joining, including co-founders Oren Levy (CEO) and Ronen Morecki (CTO), who will respectively take senior roles at PayU as business development with larger merchants, and CTO of innovation.

Terms of the deal have not been disclosed, but that PayU has said that this deal brings its total spend on acquisitions and investments to about $350 million to date. That includes acquiring CitrusPay for $130 million, investing €100 million (between $120 million and $130 million) in Kreditech and several other investments. Doing the math, this potentially puts this deal at a range of between $50 million and $100 million.

Zooz was founded in 2010 and had raised around $33 million, from investors that include Target Global Ventures, Fang Fund, iAngels, Kreos Capital and existing investors Blumberg Capital, lool ventures, Rhodium, Claltech (Access Industries’ Israeli tech vehicle), XSeed Capital, CampOne Ventures and angel investor Eilon Tirosh.

Similar to PPRO, the company in which PayPal invested earlier this month, Zooz’s service addresses the widespread fragmentation that exists in payments globally. While credit cards are very much the norm in the US, globally they account for just under 20 percent of all e-commerce transactions, with consumers and businesses in different geographies developing their own localised payment methods and preferences. For example, cash on delivery or deposited with convenience stores, or bank transfers also play big roles.

This can be a problem for a merchant that is based in one country but interested in selling to people in another — an opportunity estimated to be worth $994 billion globally — if it doesn’t accept whatever the local payment method happens to be. Zooz addresses this by providing an API to merchants that gives them the option of a number of payment providing companies and methods so that they can enable the most popular variety of payment options to buyers depending on the market.

It will be worth watching whether payment companies will continue to be happy integrating with Zooz after its sale to PayU is complete. The fact that Zooz already integrates with different payment options, and itself is not a payment services provider, was one reason why PayU was interested in it.

At a time when there are multiple options for payment methods, including PayU itself, there is potentially an opportunity to be able to make revenues by trying to play in as many of those transactions as possible. Notably, PayU already lets people integrate some 250 methods into its own wallet, and it says it’s the leading online payment service provider in 16 markets out of the 17 in which it is active..

Zooz potentially will be boosting that footprint with more than just a platform that enables multiple payment options, but the transaction data and analytics that come with those transactions, which can become useful for other services in other parts of the business.

“The unique contribution we bring to PayU is an advanced technological layer which not only helps merchants worldwide to upscale their operations and provide a better customer experience, but also offers analytics and optimization capabilities that equip them with unprecedented insights,” noted Levy, Zooz’s CEO.

Google makes $550M strategic investment in Chinese e-commerce firm JD.com

Google has been increasing its presence in China in recent times, and today it has continued that push by agreeing to a strategic partnership with e-commerce firm JD.com which will see Google purchase $550 million of shares in the Chinese firm.

Google has made investments in China, released products there and opened up offices that include an AI hub, but now it is working with JD.com largely outside of China. In a joint release, the companies said they would “collaborate on a range of strategic initiatives, including joint development of retail solutions” in Europe, the U.S. and Southeast Asia.

The goal here is to merge JD.com’s experience and technology in supply chain and logistics — in China, it has opened warehouses that use robots rather than workers — with Google’s customer reach, data and marketing to produce new kinds of online retail.

Initially, that will see the duo team up to offer JD.com products for sale on the Google Shopping platform across the word, but it seems clear that the companies have other collaborations in mind for the future.

JD.com is valued at around $60 billion, based on its NASDAQ share price, and the company has partnerships with the likes of Walmart and it has invested heavily in automated warehouse technology, drones and other ‘next-generation’ retail and logisitics.

The move for a distribution platform like Google to back a service provider like JD.com is interesting since the company, through search and advertising, has relationships with a range of e-commerce firms including JD.com’s arch rival Alibaba.

But it is a sign of the times for Google, which has already developed relationships with JD.com and its biggest backer Tencent, the $500 billion Chinese internet giant. All three companies have backed Go-Jek, the ride-hailing challenger in Southeast Asia, while Tencent and Google previously inked a patent sharing partnership and have co-invested in startups such as Chinese AI startup XtalPi.

Southeast Asia’s Carro raises $60M for its automotive classifieds and car financing service

Carro, an automotive classifieds service and car financing startup based in Singapore, has closed a $60 million Series B round to scale its business in Southeast Asia.

The deal was co-led by SoftBank Ventures Korea, Insignia Ventures — the firm from ex-Sequoia Asia partner Yinglan Tan — and Facebook co-founder Eduardo Saverin’s B Capital Group. Other participants include IDG Ventures India founder Manika Arora (via his family fund) and existing Carro backers Venturra,
Singtel Innov8, Golden Gate Ventures and Alpha JWC.

Carro raised a $12 million Series A round in March 2017. This latest capital takes it to $78 million from investors to date, according to Crunchbase.

The 2.5-year-old company said in an announcement that $250 million of vehicles were sold last year across its three markets: Indonesia, Thailand and Singapore. That’s more than double the $120 million it claimed in 2016. Last March, Carro introduced its Genie Finance underwriting business, and over its first year, it claims to have originated over $100 million in loans while amassing a loan book of nearly $40 million.

Carro CEO Aaron Tan previously spent time at Singtel Innov8 and is one of a trio of co-founders. Tan told TechCrunch that the capital will initially be spent growing Carro’s business in Indonesia, Thailand and Singapore, but further down the line, there’s a plan for expansion.

“The exact markets are still to be determined but it may be a small setup in Japan and other sources of cars,” he added.

Carro has already expanded in terms of services. Initially a vehicle marketplace, it launched Genie Finance and has also forayed into insurance brokerage and road-side assistance. It recently introduced a service that completes vehicle sales in 60 minutes — Carro Express — which it said is now available in 30 locations across Southeast Asia.

“We will double down on our online marketplaces and financing in emerging markets this year. Ultimately, we want to improve the experience of selling and buying a car, as well as provide access to capital to the next billion people, which will improve the quality of lives,” Tan said in a statement.

Carro is rivaled by a number of startups, including BeliMobilGue in Indonesia, Carsome, iCar Asia and Rocket Internet’s Carmudi, although with its new raise in the bank Carro is the best-funded by some margin.

iCar Asia, which is managed by Malaysian venture builder Catcha, raised $19 million last November. This year has seen Carsome — which covers Malaysia, Singapore, Indonesia and Thailand — raise a $19 million Series B, BeliMobilGue — Indonesia-only — raise $3.7 million and Carmudi land $10 million.

In the case of Carmudi, the business has retrenched itself. At its peak it covered over 20 markets worldwide across Asia, the Middle East, Africa and Latin America, but today its focus is on Indonesia, the Philippines and Sri Lanka.

Carro’s monster raise follows another notable deal in Southeast Asia today which saw Carousell close a Series C round worth $85 million. The firm added backing from new investors DBS, Southeast Asia’s largest bank, and EDBI, the corporate investment arm of Singapore’s Economic Development Board.

Southeast Asia’s ShopBack moves into personal finance with its first acquisition

Singapore-based e-commerce startup ShopBack came on the radar when it raised $25 million last November, and now the company is making its first acquisition.

ShopBack said today it has picked up Seedly, a fellow Singaporean startup that offers a personal finance service, in an undisclosed deal. The entire team will move over and Seedly will continue as a business under ShopBack’s management.

The ShopBack service is an e-commerce aggregator that helps online sellers reach customers and incentivizes consumers with cash-back rewards. Seedly, meanwhile, is designed to simplify finance for millennials and young people across Southeast Asia. It was founded two years ago and raised seed funding from East Ventures (also a ShopBack investor) and NUS Enterprise in 2016, it also graduated Singapore bank DBS’s “hotspot” pre-accelerator program.

The deal is a fairly rare example of a smaller startup in Southeast Asia being acquired by a larger one for more than just talent, and there seems to be plenty of potential synergies between the two services.

ShopBack aspires to have close touchpoints with how young consumers in Southeast Asia spend their money online, so helping them to manage it plays into that focus. Meanwhile, Southeast Asia isn’t blessed with many local consumer finance services — despite more than 330 million internet users — so the Seedly business can benefit from ShopBack’s regional presence for expansion.

The announcement of the deal comes 24 hours after ShopBack rival iPrice, which aggregates e-commerce in Southeast Asia, picked up a $4 million investment led by chat app company Line’s VC arm.

ShopBack has raised over $40 million to date from investors that include Credit Saison, AppWorks, Intouch, SoftBank Ventures Korea and Singtel Innov8.

Southeast Asia e-commerce startup iPrice raises $4M led by chat app Line’s VC arm

iPrice, a service that aggregates Southeast Asia’s e-commerce websites in a single destination, has pulled in new funding led by messaging app Line’s VC arm, Line Ventures.

The round is officially undisclosed, but TechCrunch understands from a source close to negotiations that it is worth around $4 million. Existing iPrice backers Cento Ventures (formerly known as Digital Media Partners) and Venturra Capital also took part in this round.

iPrice, which has its HQ in Malaysia, Kuala Lumpur, previously raised a $4 million Series A in late 2016. Today’s investment takes the startup to $9.7 million raised overall.

The company was started in 2015 in response to the growing number of e-commerce companies in Southeast Asia, and in particular the increasing number of vertical-specific options. Even though there are some giants, such as Alibaba’s Lazada, the region has a number of smaller players that can struggle for visibility. iPrice was initially a coupon site, before pivoting into an aggregation model which essentially acts as a destination for shoppers to then go on and purchase items from e-commerce retailers.

In a way, it is much like flight booking sites — such as Skyscanner — which ask a customer where they want to go before scouring the web for the best travel deals. iPrice does this for e-commerce in Southeast Asia. It hopes that simplifying things through a single destination portal can make it the go-to online buying site for the region, which now has over 330 million internet users — more than the population of the U.S. — according to a recent report co-authored by Google.

iPrice on the web, although its mobile app and mobile browser version are more used

Today, iPrice claims to offer over 500 million SKUs across Malaysia, Singapore, Indonesia, Philippines, Thailand, Vietnam, and Hong Kong. The company said that over 50 million people visited its site since December 2016, and this year alone it is aiming to grow to 150 million visitors.

The company said electronics has been a particular driver while, outside of working with e-commerce firms to drive business, it has developed a B2B business with media groups and brands, including Mediacorp in Singapore and Samsung in Indonesia, who pay to tailor its service. Last year, it developed an insightful report on the state of e-commerce in Southeast Asia.

The deal makes sense for Line Ventures because of the unique vantage point that iPrice occupies, while it also ties into parent company Line’s desire to go beyond being a messaging app and build out a mobile ecosystem. That’s seen it develop services such as food delivery, ride-hailing, payments and e-commerce, although it has struggled in the latter category. A relationship with iPrice might give it greater insight for future e-commerce ventures in Southeast Asia.

Alibaba doubles down on Lazada with fresh $2B investment and new CEO

Alibaba is increasing its control of Lazada, its e-commerce marketplace in Southeast Asia it acquired control of in 2016, after it injected another $2 billion into the business and replaced its CEO with a long-standing Alibaba executive.

Alibaba’s first investment came in April 2016 when it bought 51 percent of Lazada for $1 billion, and it added another $1 billion last summer to increase its equity to around 83 percent. With today’s news, Alibaba has invested $4 billion to date which it said will “accelerate the growth plans” and help further tie the Lazada business into Alibaba’s core e-commerce service.

There’s already been plenty of evidence of increased ties between Alibaba and Lazada. The latter began offering products from Alibaba’s Taobao marketplace across Southeast Asia last year, and Alibaba has replaced Lazada’s tech team leadership with executives of its own. The latest shakeup is the appointment of Lucy Peng as Lazada’s new CEO to replace Max Bittner, who was installed by former owner Rocket Internet back in 2012.

Peng, who is one of Alibaba’s original 12 founders, has been Chairwoman of Lazada and is executive chairman of Ant Financial, Alibaba’s fintech affiliate company. Bittner will remain involved as “senior advisor to Alibaba Group” and apparently involved in future strategy, including further international expansion opportunities.

Lazada has progressed significantly since Alibaba’s first investment — which came at a time when the business had been close to running out of money — but the reality in Southeast Asia is that e-commerce in the region is a loss-making industry with plenty of competition.

Amazon entered the foray last year, but it remains only in Singapore, while Shopee is a two-year-old entrant bankrolled by Sea, formerly Garena, which raised over $1 billion in a U.S. IPO last year.

Alibaba hasn’t just limited its Southeast Asia approach to backing Lazada. The firm also invested $1.1 billion in Tokopedia which competes with Lazada in Indonesia, Southeast Asia’s largest economy and the world’s fourth most populous country.

Tina Sharkey has something to sell you (300 things, actually)

 Brandless is an usual company. A direct-to-consumer purveyor of food, beauty, and personal care products, it says that every item it makes is non-genetically modified, kosher, fair-trade, gluten-free, often organic and, in the case of cleaning supplies, EPA “Safer Choice” certified. They are also priced at $3 across the board. The idea, says cofounder and CEO Tina Sharkey, is… Read More

Amazon’s Prime Rewards Visa cardholders now get 5% back at Whole Foods if they pay for Prime

 Amazon has already rolled out price cuts for Whole Foods shoppers as a result of its acquisition of the grocery chain. It has also rolled up its Treasure Truck deals service to Whole Foods locations, and began delivering Whole Foods groceries through Prime. Now, it’s offering Prime members 5 percent back at Whole Foods when they shop using the Amazon Prime Rewards Visa card, too. The… Read More

Alibaba invests another $1.3 billion into its offline retail strategy

 Alibaba has furthered its physical retail footprint after it invested another billion dollars into projects to develop its so-called “new retail” strategy which combines online and offline. The Chinese firm, the dominant e-commerce player in its country, gobbled up a 15 percent stake in Beijing Easyhome Furnishing for RMB 5.45 billion, or around $867 million, and pumped $486… Read More

Cardlytics up 3% following IPO, raised $70 million

 Atlanta-based Cardlytics made its public debut on Friday, closing the day at $13.37, just a little above the IPO price of $13. The company sold 5.4 million shares, raising $70 million. Cardlytics works with financial institutions like Bank of America and 2,000 others to run cash back programs. It partners with brands across restaurant, retail, travel, grocery and home subscription categories… Read More

India’s Vahdam Teas raises $1.4M to bring fresher tea to your door faster

 Vahdam Teas, an e-commerce that’s focused on selling the freshest brews on the planet, has closed a Series A funding round worth $1.4 million to grow its business.
The funding was led by new backers Fireside Venture, Mumbai Angels, Singapore Angel Network and undisclosed existing investors. The two-year-old company previously raised a $500,000 seed round from angels in January of this… Read More

Flowspace is AWS for warehouses

 Got too much Internet traffic? Get servers on-demand from Amazon Web Services. Got too many pallets of physical goods? Well now you can get on-demand warehousing from Flowspace. The startup aims to become the next critical logistics service by making atoms as easy to store and ship as bits. “We want to introduce flexibility and fluidity into a warehousing market defined by long-term… Read More

Alibaba smashes its Single’s Day record once again as sales cross $25 billion

 Alibaba has set another Single’s Day record after the e-commerce giant sold over $25 billion of product on the Chinese biggest online shopping date. The full number comes in at 163.8 billion RMB, that’s roughly $25.4 billion, in GMV — that’s “gross merchandise volume” which is used to measure a dollar value for all sales on a platform. In Alibaba’s… Read More

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Amazon says Whole Foods deal will close Monday

 It’s official…Amazon says its purchase of Whole Foods will close on Monday. According to the release, “the two companies will together pursue the vision of making Whole Foods Market’s high-quality, natural and organic food affordable for everyone. As a down payment on that vision, Whole Foods Market will offer lower prices starting Monday on a selection of… Read More

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Amazon completes its acquisition of Middle Eastern e-commerce firm Souq

 Amazon has completed its acquisition of e-commerce firm Souq.com, which was first announced at the end of March and sees the U.S. retail giant enter the Middle Eastern market. The deal is officially undisclosed, but sources previously told TechCrunch that Amazon is paying around $650 million. Bloomberg previously reported that Amazon was in discussions over an investment at a valuation in… Read More

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In wake of Amazon/Whole Foods deal, Instacart has a challenging opportunity

 Yesterday, Amazon and Whole Foods ruined a perfectly slow news day on a Friday in June with the announcement that Amazon intends to buy Whole Foods for almost $14 billion.
The most obvious victim of the deal was Instacart, in which Whole Foods invested and with whom Whole Foods has a five-year contract.
But after talking to a few Instacart investors and other sources close to the company… Read More

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