Fundings & Exits

Auto Added by WPeMatico

Taiwan-based MLOps startup InfuseAI raises $4.3M Series A led by Wistron Corporation

AI models not only take time to build and train, but also to deploy in an organization’s workflow. That’s where MLOps (machine learning operations) companies come in, helping clients scale their AI technology. InfuseAI, a MLOps startup based in Taiwan, announced today it has raised a $4.3 million Series A, led by original design manufacturer Wistron Corporation, with participation from Hive Ventures, Top Taiwan Venture Capital Group and Silicon Valley Taiwan Investments.

Founded in 2018, InfuseAI says the market for MLOps solutions is worth $30 million a year in Taiwan, with the global market expected to reach about $4 billion by 2025, according to research firm Cognilytica. Its clients include E.SUN, one of Taiwan’s largest banks, SinoPac Holdings and Chimei.

InfuseAI helps companies deploy and manage machine learning models with turnkey solutions like PrimeHub, a platform that includes a model training environment, cloud or on-premise cluster computing (including container orchestration with Kubernetes) and collaboration tools for teams. Another product, called PrimeHub Deploy, lets clients train, deploy, update and monitor AI models.

In a press statement, Hive Ventures founder and managing partner Yan Lee said, “As enterprises from manufacturing, healthcare, finance and other sectors seek to scale their AI operations and model deployments, they will require a platform like InfuseAI to allow seamless collaboration between developers and data scientists. InfuseAI fits perfectly into our investment thesis which is focused on platforms and software in the enterprise adoption cycle.”

You might have just missed the best time to sell your startup

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here

Happy Saturday, everyone. I do hope that you are in good spirits and in good health. I am learning to nap, something that has become a requirement in my life after I realized that the news cycle is never going to slow down. And because my partner and I adopted a third dog who likes to get up early, please join me in making napping cool for adults, so that we can all rest up for Vaccine Summer. It’s nearly here.

On work topics, I have a few things for you today, all concerning data points that matter: Q1 2021 M&A data, March VC results from Africa, and some surprising (to me, at least) podcast numbers.

On the first, Dan Primack shared a few early first-quarter data points via Refinitiv that I wanted to pass along. Per the financial data firm, global M&A activity hit $1.3 trillion in Q1 2021, up 93% from Q1 2020. U.S. M&A activity reached an all-time high in the first quarter, as well. Why do we care? Because the data helps underscore just how hot the last three months have been.

I’m expecting venture capital data itself for the quarter to be similarly impressive. But as everyone is noting this week, there are some cracks appearing in the IPO market, as the second quarter begins that could make Q2 2021 a very different beast. Not that the venture capital world will slow, especially given that Tiger just reloaded to the tune of $6.7 billion.

On the venture capital topic, African-focused data firm Briter Bridges reports that “March alone saw over $280 million being deployed into tech companies operating across Africa,” driven in part by “Flutterwave’s whopping $170 million round at a $1 billion valuation.”

The data point matters as it marks the most active March that the African continent has seen in venture capital terms since at least 2017 — and I would guess ever. African startups tend to raise more capital in the second half of the year, so the March result is not an all-time record for a single month. But it’s bullish all the same, and helps feed our general sentiment that the first quarter’s venture capital results could be big.

And finally, Index Ventures’ Rex Woodbury tweeted some Edison data, namely that “80 million Americans (28% of the U.S. 12+ population) are weekly podcast listeners, +17% year-over-year.” The venture capitalist went on to add that “62% of the U.S. 12+ population (around 176 million people) are weekly online audio listeners.”

As we discussed on Equity this week, the non-music, streaming audio market is being bet on by a host of players in light of Clubhouse’s success as a breakout consumer social company in recent months. Undergirding the bets by Discord and Spotify and others are those data points. People love to listen to other humans talk. Far more than I would have imagined, as a music-first person.

How nice it is to be back in a time when consumer investing is neat. B2B is great but not everything can be enterprise SaaS. (Notably, however, it does appear that Clubhouse is struggling to hold onto its own hype.)

Look I can’t keep up with all the damn venture capital rounds

TechCrunch Early Stage was this week, which went rather well. But having an event to help put on did mean that I covered fewer rounds this week than I would have liked. So, here are two that I would have typed up if I had had the spare hours:

  • Striim’s $50 million Series C. Goldman led the transaction. Striim, pronounced stream I believe, is a software startup that helps other companies move data around their cloud and on-prem setups in real time. Given how active the data market is today, I presume that the TAM for Striim is deep? Quickly flowing? You can supply a better stream-centered word at your leisure.
  • Kudo’s $21 million Series A. I covered Kudo last July when it raised $6 million. The company provides video-chat and conferencing services with support for  real-time translation. It had a good COVID-era, as you can imagine. Felicis led the A after taking part in the seed round. I’ll see if I can extract some fresh growth metrics from the company next week. One to watch.

And two more rounds that you also might have missed that you should not. Holler raised $36 million in a Series B. Per our own Anthony Ha, “[y]ou may not know what conversational media is, but there’s a decent chance you’ve used Holler’s technology. For example, if you’ve added a sticker or a GIF to your Venmo payments, Holler actually manages the app’s search and suggestion experience around that media.”

I feel old.

And in case you are not paying enough attention to Latin American tech, this $150 million Uruguayan round should help set you straight.

Various and sundry

Finally this week, some good news. If you’ve read The Exchange for any length of time, you’ve been forced to read me prattling on about the Bessemer cloud index, a basket of public software companies that I treat with oracular respect. Now there’s a new index on the market.

Meet the Lux Health + Tech Index. Per Lux Capital, it’s an “index of 57 publicly traded companies that together best represent the rapidly emerging Health + Tech investment theme.” Sure, this is branded to the extent that, akin to the Bessemer collection, it is tied to a particular focus of the backing venture capital firm. But what the new Lux index will do, as with the Bessemer collection, is track how a particular venture firm is itself tracking the public comps for their portfolio.

That’s a useful thing to have. More of this, please.

Alex

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

Everli, the European marketplace for online grocery shopping, bags $100M Series C

Everli, the European marketplace for online grocery shopping that started in Italy but now also operates in Poland, Czech Republic and France, has raised a $100 million in Series C funding.

The round is led by Verlinvest, with participation from new investors Luxor, DN Capital, C4 Ventures, and Convivialité Ventures. FITEC (part of Fondo Italiano d’Investimento), 360 Capital, Innogest, and DIP also followed on.

Everli, formerly called Supermercato24, says it will use the injection of capital to accelerate growth and further expand its international footprint.

Founded in 2014, Everli lets customers order from local supermarkets for delivery. The company uses gig economy-styled personal shoppers who go into the store and ‘pick’ the products ordered and then deliver them same-day, or for an added cost within an hour. The company charges a delivery fee to consumers, but also generates revenue from fees charged to partnering merchants, and, notably, through advertising.

It has become the delivery partner of some of Europe’s largest grocery brands, offering access to over 300,000 products across the 70 cities it operates in. And, like other online grocery offerings, Everli has benefited from a boost in e-commerce and a reliance on delivery services prompted by the pandemic and country lockdowns.

“Everli is focused specifically on the grocery space,” says Federico Sargenti, CEO at Everli. “Rather than small baskets, or picking up just the basic essentials, Everli is focused on delivering whatever you need right up to your full weekly shop, with same-day delivery and a one-hour delivery window of your choice.”

He says that what further differentiates Everli is its strong relationships with retailers, and the use of their existing infrastructure. “Instead of being tethered and restricted to a radius around our own expensive central warehouses, we are able to operate across a much wider geographical footprint, entering small-to-medium density areas and offering many customers their first opportunity to receive same day groceries, [all] while retaining sustainable unit economics”.

Sargenti describes Everli as more similar to Instacart than many other European delivery firms, including the new crop of dark stores or those that offer groceries as a secondary service to takeouts. “[This is] why we’re leading the grocery space in Europe and securing brands like Lidl, Kaufland, and Carrefour,” adds Sargenti.

In 2020, Everli sales almost quadrupled to $130 million. That growth is happening more and more outside Italy, with its international expansion now responsible for over 20% of orders.

“We are proud to have played a role in helping many people during these difficult times, but we are only getting started, as this industry will never be the same again,” says Sargenti in a statement. “The shift to online delivery is not reversing, and expectations on all sides are only increasing. We have built a model which we believe offers unparalleled value to consumers, through wide access to the retailers and products they love, even in less urban areas, and to retailers, who are now able to affordably compete online and reach a whole new consumer base”.

Adds Simone Sallustio, Executive Director at Verlinvest: “Everli combines its tech & data excellence with the grocery retail experience of its partners and this combination provides it with the perfect position to cement itself as the European e-grocery market leader, delivering the best experience to consumers, value to retail partners, and digital activation to brands”.

Hong Kong-based viAct raises $2M for its automated construction monitoring platform

Hong Kong-based viAct helps construction sites perform around-the-clock monitoring with an AI-based cloud platform that combines computer vision, edge devices and a mobile app. The startup announced today it has raised a $2 million seed round, co-led by SOSV and Vectr Ventures. The funding included participation from Alibaba Hong Kong Entrepreneurs Fund, Artesian Ventures and ParticleX.

Founded in 2016, viAct currently serves more than 30 construction industry clients in Asia and Europe. Its new funding will be used on research and development, product development and expanding into Southeast Asian countries.

The platform uses computer vision to detect potential safety hazards, construction progress and the location of machinery and materials. Real-time alerts are sent to a mobile app with a simple interface, designed for engineers who are often “working in a noisy and dynamic environment that makes it hard to look at detailed dashboards,” co-founder and chief operating officer Hugo Cheuk told TechCrunch.

As companies signed up for viAct to monitor sites while complying with COVID-19 social distancing measures, the company provided training over Zoom to help teams onboard more quickly.

Cheuk said the company’s initial markets in Southeast Asia will include Indonesia and Vietnam because government planning for smart cities and new infrastructure means new construction projects there will increase over the next five to 10 years. It will also enter Singapore because developers are willing to adopt AI-based technology.

In a press statement, SOSV partner and Chinaccelerator managing director Oscar Ramos said, “COVID has accelerated digital transformation and traditional industries like construction are going through an even faster process of transformation that is critical for survival. The viAct team has not only created a product that drives value for the industry but has also been able to earn the trust of their customers and accelerate adoption.”

Indonesian savings and investment app Pluang gets $20M in pre-Series B funding

Indonesia-based fintech Pluang announced today it has raised $20 million in a pre-Series B round led by Openspace Ventures, with participation from Go Ventures and other returning investors. The company offers proprietary savings and investment products that allow users to make contributions starting from 50 cents USD.

Go Ventures, the investment arm of Gojek, also participated in Pluang’s $3 million Series A, which closed in March 2019. Pluang is available through partnerships with “super apps” like Gojek, Dana and Bukalapak, and currently claims more than one million users.

The company says it is able to maintain a low customer acquisition cost of $2 per transacting customer because it creates its own products, including investment accounts for gold, U.S equity indices and cryptocurrencies, instead of working with third-party financial service providers.

Pluang’s latest round will be used to develop proprietary financial products to cover more asset classes, including government bonds.

“Previously, these assets classes were only available to the wealthy in Indonesia,” said Pluang founder Claudia Kolonas in a statement. “However, we believe that everyone should have the opportunity to grow their savings, and our new products will reflect that.”

Pluang is among several Indonesian financial apps, including Ajaib and Bibit, that have recently raised funding. All focus on making investing accessible to more people by giving them an alternative to traditional brokerage firms that typically charge high fees.

In Indonesia, less than percent of the country’s population are retail investors, but that number is growing, especially among people aged 18 to 30. This is due to a combination of factors, including increased interest in financial planning during the pandemic and the rise of stock influencers.

In a statement, Openspace Ventures founding partner Shane Chesson said, “Pluang has demonstrated tremendous growth over the last 12 months with industry leading unit economics. We’re excited to continue supporting the team, as they sustainably accelerate their ambitions to help every Indonesian grow their savings.”

Tech companies predict the (economic) future

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Earnings season is coming to a close, with public tech companies wrapping up their Q4 and 2020 disclosures. We don’t care too much about the bigger players’ results here at TechCrunch, but smaller tech companies we knew when they were wee startups can provide startup-related data points worth digesting. So, each quarter The Exchange spends time chatting with a host of CEOs and CFOs, trying to figure what’s going on so that we can relay the information to private companies.

Sometimes it’s useful, as our chat with recent fintech IPO Upstart proved after we got to noodle with the company about rising acceptance of AI in the conservative banking industry.

This week we caught up with Yext CEO Howard Lerman and Smartsheet CEO Mark Mader. Yext builds data products for small businesses, and is betting its future on search products. Smartsheet is a software company that works in the collaboration, no-code and future-of-work spaces.

They are pretty different companies, really. But what they did share this time ’round the earnings cycle were macro notes, or details regarding their forward financial guidance and what economic conditions they anticipate. As a macro-nerd, it piqued my interest.

Yext cited a number of macroeconomic headwinds when it reported its Q4 results. And tying its future results somewhat to an uncertain macro picture, the company said that it is “basing [its] guidance on the business conditions [it sees for itself] and [its] customers currently, with the macro economy, which remains sluggish, and customers who remain cautious,” per a transcript.

Lerman told The Exchange that it was not clear when the world would open — something that matters for Yext’s location-focused products — so the company was guiding for the year as if nothing would change. Wall Street didn’t love it, but if the economy improves Yext won’t have high hurdles to jump over. This is one tack that a company can take when it talks guidance.

Smartsheet took a slightly different approach, saying in its earnings call that its “fiscal year ’22 guidance contemplates a gradual improvement in the macro environment in the second half of the year.” Mader said in an interview that his company wasn’t hiring economists, but was instead simply listening to what others were saying.

He also said that the macro climate matters more in saturated markets, which he doesn’t think that Smartsheet is in; so, its results should be more impacted by things more like “the secular shift to the cloud and digital transformation,” to quote its earnings call.

What the economy will do this year matters quite a lot for startups. An improving economy could boost interest rates, making money a bit more expensive and bonds more attractive. Valuations could see modest downward pressure in that case. And venture capital could slow fractionally. But with Yext forecasting as if it was facing a flat road and Smartsheet only expecting things to pick up pace from Q3 on, it’s likely that what we have now is mostly what we’ll get.

And things are pretty damn good for startups and late-stage liquidity at the moment. So, smooth sailing ahead for startup-land? At least as far as our current perspective can discern.

We still have a grip of notes from Splunk CEO Douglas Merritt on how to take an old-school software company and turn it into a cloud-first company, and Jamf CEO Dean Hager about packaging discrete software products. More to come from them in fits.

Various and sundry

There were rounds big and small this week. Companies like Squarespace raised $300 million, while Airtable raised $277 million. On the smaller-end of the spectrum, my favorite round of the week was a modest $2.9 million raise from Copy.ai.

But there were other rounds that TechCrunch didn’t get to that are still worth our time. So, here are a few more for you to dig into this weekend:

  • A so-called pre-Series A round for Lilli, a U.K.-based startup that uses sensors and other tech to track the well-being of folks who might need help to live on their own. Using tech to take care of folks is always good by me. The deal was worth £4.5 million, per UKTN.
  • An IPO for Tuya, a Chinese software company that raised $915 million in its American debut. Chinese IPOs on American indices were once a big deal. They are less frequent now. Surprised that I missed this one, but, hey, there’s been a lot going on.
  • And the Republic round, worth $36 million, that is banking on the recently-expanded American crowdfunding regulations. Some startups have seen success with the approach, including Juked.gg.

Upcoming attractions

Next week is Y Combinator Demo Day week, so expect a lot of early-stage coverage on the blog. Here’s a preview. From The Exchange we’re looking back into insurtech (with data from WeFox and Insurify), and talking about Austin-based software startup AlertMedia’s decision to sell itself to private-equity instead of raising more traditional capital.

And to leave you with some reading material, make sure you’ve picked through our look at the valuations of free-trading apps, the issues with dual-class shares, the recent IPO win for the New York scene and how unequal the global venture capital market really is.

Closing, this BigTechnology piece was good, as was this Not Boring essay. Hugs, and have a lovely respite,

Alex

Should there be some law against raising three times in one year?

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Every quarter we dig into the venture capital market’s global, national, and sector-based results to get a feel for what the temperature of the private market is at that point in time. These imperfect snapshots are useful. But sometimes, it’s better to focus on a single story to show what’s really going on.

Enter AgentSync. I covered AgentSync for the first time last August, when the API-focused insurtech player raised a $4.4 million seed round. It’s a neat company, helping others track the eligibility of individual brokers in the market. It’s a big space, and the startup was showing rapid initial traction in the form of $1.9 million in annual recurring revenue (ARR).

But then AgentSync raised again in December, sharing at the time of its $6.4 million round that the valuation cap had grown by 4x since its last round. And that it had seen 4x revenue growth since the start of the pandemic.

All that must sound pretty pedestrian; a quickly-growing software company raising two rounds? Quelle surprise.

But then AgentSync raised again this week, with another grip of datapoints. Becca Szkutak and Alex Konrad’s Midas Touch newsletter reported the sheaf of data, and The Exchange confirmed the numbers with AgentSync CEO Niji Sabharwal. They are as follows:

  • Present-day revenues of less than $10 million, but with ARR growing by 6x in 2020 after 10x expansion in 2019.
  • No customer churn to date.
  • Its $25 million Series A valued the company at $220 million, which Konrad and Szkutak describe as “exactly 10x AgentSync’s valuation from eight months ago.”

That means AgentSync was worth $22 million when it raised $4.4 million, and the December round was raised at a cap of around $80 million. Fun.

Back to our original point, the big datasets can provide useful you-are-here guidance for the sector, but it’s stories like AgentSync that I think better show what the market is really like today for hot startups. It’s bonkers fast and, even more, often backed up by material growth.

Sabharwal also told The Exchange that his company has closed another $1 million in ARR since the term sheet. So its multiples are contracting even before it shared its news. 

2021, there you have it.

Meet Conscience.vc

Also this week I got to meet Ariana Thacker, who is building a venture capital fund. Her route to her own venture shop included stops at Rhapsody Venture Partners, and some time at Predictive VC. Now she’s working on Conscience.vc, or perhaps just Conscience.

Her new fund will invest in companies worth less than $15 million, have some form of consumer-facing business model (B2B and B2B2C are both fine, she said), and something to do with science, be it a patentable technology or other sort of IP. Why the science focus? It’s Thacker’s background, thanks to her background in chemical engineering and time as a facilities engineer for a joint Exxon-Shell project. 

All that’s neat and interesting, but as we cover zero new-fund announcements on The Exchange and almost never mini-profile VCs, why break out of the pattern? Because unlike nearly everyone in her profession, Thacker was super upfront with data and metrics.

Heck, in her first email she included a list of her investments across different capital vehicles with actual information about the deals. And then she shared more material on different investments and the like. Imagine if more VCs shared more of their stuff? That would rock.

Conscience had its first close in mid-January, though more capital might land before she wraps up the fundraising process. She’s reached $4 million to $5 million in commits, with a cap of $10 million on the fund. And, she told The Exchange, she didn’t know a single LP before last summer and only secured an anchor investor last October.

Let’s see what Thacker gets done. But at a minimum I think she’ll be willing to be somewhat transparent as she invests from her first fund. That alone will command more attention from these pages than most micro-funds could ever manage.

A whole bunch of other important shit

The week was super busy, so I missed a host of things that I would have otherwise liked to have written about. Here they are in no particular order:

  • FalconX, a startup that powers crypto-trading on other platforms, raised $50 million this week. The round comes after the company raised $17 million last May. I wrote about that here. Tiger Global led the round, natch, as it has led nearly every round in the last month. 
  • The FalconX round matters as the company grew from what we presume was a modest trading and revenue base into something much larger. Per the company, in “less than a year” the company’s “trading volume” grew by 12x and its “net revenue” grew 46x. That’s a lot. 
  • Privacera also raised $50 million this week. Insight Partners led the round. The deal caught my eye as it promised a “cloud-based data governance and security solution.” That reminded me of Skyflow, a quickly-growing startup that I thought might have a similar product. Privacera CEO Balaji Ganesan politely corrected my confusion in an email saying that “Skyflow is like a vault for customer data. They replace customer data with tokens. Our focus is on data governance, so it is broader. We don’t store customer data within our solution.” Fair enough. It’s still an interesting space.
  • And then there’s Woflow, which VentureBeat actually got to before I could. I chatted with the company this week, but sadly have more notes than open word count today. So let it suffice to say that the company’s model of selling structured merchant data is super cool. And the fact that it has linked up with customers in its first vertical (restaurants) like DoorDash is impressive.
  • Its round was led by Craft Ventures, a firm that has been pretty damn active in the API-powered startup landscape in recent months. More to come on Woflow.

Various and Sundry

Closing, I learned a lot about software valuations here, got to noodle on the epic Roblox direct listing here, dug into fintech’s venture successes and weaknesses, and checked out the Global-e IPO filing. Oh, and M1 Finance raised again, while Clara and Arist raised small, but fun rounds.

Alex

Taipei-based Influenxio gets $2M from DCM Ventures for its “microinfluencer” marketing platform

Influencer marketing startup Influenxio's team, with founder and CEO Allan Ko in the center

Influenxio’s team, with founder and chief executive officer Allan Ko in the center

“Microinfluencers” are gaining clout among marketers. Though they may have as little as a thousand followers, microinfluencers tend to focus on specific content and be seen as more engaging and trustworthy by their audience, said Allan Ko, founder and chief executive officer of Influenxio. The Taipei-based startup, which connects brands with Instagram microinfluencers through its online platform, announced today that it has closed $2 million in pre-Series A funding led by DCM Ventures, and is launching a new subscription plan.

Founded in 2018, Influenxio has now raised over $3 million in total, including from seed investor SparkLabs Taipei. It currently operates in Taiwan and Japan, where it has databases of 100,000 and 250,000 Instagram creators, respectively. So far, over 6,000 brands have registered on Influenxio’s platform, and it has been used to run over 1,000 campaigns.

Influenxio plans to use its new funding for hiring and product development. Influenxio’s new subscription plan is a relatively novel model for the field, so one of the startup’s goals is to prove that it works, Ko told TechCrunch. The company also plans to build out its Japanese platform and expand into more countries.

A screenshot of Influenxio's platform

A screenshot of Influenxio’s platform

Influenxio analyzes past campaigns, performance data and client reviews to improve its algorithms. Since the entire campaign creation process–from finding influencers to paying them–is performed through Influenxio, this allows it to gather a wide range of data to refine its technology, Ko told TechCrunch.

Influencers typically make about $35 to $40 USD for each campaign they participate in, and most of the brands the company works with focus on food (like restaurants), fashion, beauty or lifestyle services.

Before launching Influenxio, Ko spent 15 years working in the digital marketing field, serving as an account manager at Yahoo! and Microsoft, and then head of Hong Kong and Taiwan for Google’s online partnerships group. He wanted to create a startup that would combine what he had learned about digital marketing and make accessible to more businesses.

Large brands have used Influenxio to quickly generate marketing campaigns for special occasions like Mother’s Day or Christmas. For example, one advertiser in Taiwan used Influenxio to hire almost 200 influencers in one week, who were asked to test and post about their products, and some of Influenxio’s highest profile clients include Shiseido, Shopee, iHerb and KKBox.

But the majority of Influenxio’s clients (about 80% to 90%) are small- to medium-sized businesses, and Ko said they usually create multiple campaigns to build brand awareness over time, working with a few influencers a month.

Influenxio’s new subscription plan, which costs less than $100 USD a month and is launching first in Taiwan before rolling out to other markets, was created for them. “The first year we launched the platform, we found small businesses want experts and advice,” said Ko. Many don’t have marketing managers, so Influenxio’s subscription plan automatically matches them with new influencers each month and provides them with analytics so they can see how well campaigns are performing.

Influenxio is among a growing number of startups that are tapping into the “microinfluencer economy,” with others including AspireIQ, Upfluence and Grin.

Ko said Influenxio’s biggest difference is its focus on small businesses, and serving as a one-stop marketplace for influencer campaigns. “The important thing for our platform is that it needs to be very easy and simple,” he added. “We spent a lot of time on the execution and details to make it smoother on the advertiser side. For the influencer side, we try to make it more convenient. For example, the way they receive money, our goal is to also make it easy.”

A first look at Coursera’s S-1 filing

After TechCrunch broke the news yesterday that Coursera was planning to file its S-1 today, the edtech company officially dropped the document Friday evening.

Coursera was last valued at $2.4 billion by the private markets, when it most recently raised a Series F round in October 2020 that was worth $130 million.

Coursera’s S-1 filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year. It paints a picture of growth, albeit one that came at steep expense.

Revenue

In 2020, Coursera saw $293.5 million in revenue. That’s a roughly 59% increase from the year prior when the company recorded $184.4 million in top line. During that same period, Coursera posted a net loss of nearly $67 million, up 46% from the previous year’s $46.7 million net deficit.

Notably the company had roughly the same noncash, share-based compensation expenses in both years. Even if we allow the company to judge its profitability on an adjusted EBITDA basis, Coursera’s losses still rose from 2019 to 2020, expanding from $26.9 million to $39.8 million.

To understand the difference between net losses and adjusted losses it’s worth unpacking the EBITDA acronym. Standing for “earnings before interest, taxes, depreciation and amortization,” EBITDA strips out some nonoperating costs to give investors a possible better picture of the continuing health of a business, without getting caught up in accounting nuance. Adjusted EBITDA takes the concept one step further, also removing the noncash cost of share-based compensation, and in an even more cheeky move, in this case also deducts “payroll tax expense related to stock-based activities” as well.

For our purposes, even when we grade Coursera’s profitability on a very polite curve it still winds up generating stiff losses. Indeed, the company’s adjusted EBITDA as a percentage of revenue — a way of determining profitability in contrast to revenue — barely improved from a 2019 result of -15% to -14% in 2020.

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.

Humaans raises $5M seed to make it easier for companies to on-board and manage staff

Humaans, a London-based HR startup, has raised $5 million in seed funding to accelerate the development of its employee on-boarding and management platform. Backing the round is Y Combinator, Mattias Ljungman’s Moonfire, Frontline Ventures and former head of Stripe Issuing, Lachy Groom.

A number of other investors, made up of seasoned entrepreneurs and startup operators, also participated. They include LinkedIn CEO Jeff Weiner (via Next Play Ventures), Stripe COO Claire Johnson, Figma CEO Dylan Field, Intercom co-founder Des Traynor, former Workday CTO David Clarke, former Benchmark GP Scott Belsky, Notion COO Akshay Kothari, Qubit co-founder Emre Baran, Evervault CEO Shane Curren and Stripe head of security Gerardo Di Giacomo.

Founded by former Qubit employees Giovanni Luperti and Karolis Narkevicius, Humaans came into existence formerly in April 2020 after the pair quit the product agency they had founded together. With a soft launch the previous year while bootstrapping, and with validation from early users, Luperti and Narkevicius decided they had found enough product-market fit to focus on the startup full-time.

“We bootstrapped Humaans by reinvesting capital from the previous businesses we co-founded,” explains CEO Luperti. “After gaining initial commercial traction, we decided to raise capital and brought a number of investors and operators onboard, and joined Y Combinator”.

Pitching itself as a central hub for employee on-boarding and management — or a single source of truth for staffing — Humaans aims to play nicely by integrating with other existing SaaS used across the “HR stack”. This is because scaling companies are increasingly rejecting all-encompassing HR software and using the best modern SaaS offerings for various different functions.

“Companies are frustrated with poorly integrated HR stacks, making processes slow while exposing them to compliance risks,” says Luperti. “This is why the adoption of point solutions is increasing dramatically. Companies are adopting what’s best based on their needs and stage of growth to address their people needs”.

For example, a company may choose an applicant tracking system, a performance management system, contract management software and an employee engagement platform, and so on. “This makes the ‘all-in-one’ model antiquated, creating the opportunity for a solution like Humaans to emerge. We’re building a layer of infrastructure for all employee data”.

This is seeing Humaans attempt to bring together the full HR stack and automate processes like on-boarding, off-boarding and compensation management with fast workflows that can be set up not dissimilar to an IFTTT or Zapier-style type of interaction model.

Image Credits: Humaans

“If you ask around, most employees dislike their HR software,” says Luperti. “HR tools have historically been clunky, slow and not good at providing a good user experience. Existing players focused more on sales and acquisition than retention through product. But HR buyers today are more sophisticated than ever and have an appetite for best in class. We’re building the Slack of HR… an employee management platform that’s both delightful and very powerful”.

To that end, Humaans says it grew 3x in the past few months and is popular amongst distributed companies, such as Pleo, ChartMogul, Bombinate, HeySummit and Pento.

Adds the Humaans CEO: “There are two segments of existing players: those targeting SMEs, and those working with corporations. Serving the companies in the middle is the opportunity we’re going after”.

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.

How investors are valuing the pandemic

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Kicking off with a tiny bit of housekeeping: Equity is now doing more stuff. And TechCrunch has its Justice and Early-Stage events coming up. I am interviewing the CRO of Zoom for the latter. And The Exchange itself has some long-overdue stuff coming next week, including $50M and $100M ARR updates (Druva, etc.), a peek at consumption based pricing vs. traditional SaaS models (featuring Fastly, Appian, BigCommerce CEOs, etc.), and more. Woo! 

This week both DoorDash and Airbnb reported earnings for the first time as public companies, marking their real graduation into the ranks of the exited unicorns. We’re keeping our usual eye on the earnings cycle, quietly, but today we have some learnings for the startup world.

Some basics will help us get started. DoorDash beat growth expectations in Q4, reporting revenue of $970 million versus an expected $938 million. The gap between the two likely comes partially from how new the DoorDash stock is, and the pandemic making it difficult to forecast. Despite the outsized growth, DoorDash shares initially fell sharply after the report, though they largely recovered on Friday.

Why the initial dip? I reckon the company’s net loss was larger than investors hoped — though a large GAAP deficit is standard for first quarters post-debut. That concern might have been tempered by the company’s earnings call, which included a note from the company’s CFO that it is “seeing acceleration in January relative to our order growth in December as well as in Q4.” That’s encouraging. On the flip side, the company’s CFO did say “starting from Q2 onwards, we’re going to see a reversion toward pre-COVID behavior within the customer base.”

Takeaway: Big companies are anticipating a return to pre-COVID behavior, just not quite yet. Firms that benefited from COVID-19 are being heavily scrutinized. And they expect tailwinds to fade as the year progresses.

And then there’s Airbnb, which is up around 16% today. Why? It beat revenue expectations, while also losing lots of money. Airbnb’s net loss in Q4 2020 was more than 10x DoorDash’s own. So why did Airbnb get a bump while DoorDash got dinged? Its large revenue beat ($859 million, instead of an expected $748 million), and potential for future growth; investors are expecting that Airbnb’s current besting of expectations will lead to even more growth down the road.

Takeaway: Provided that you have a good story to tell regarding future growth, investors are still willing to accept sharp losses; the growth trade is alive, then, even as companies that may have already received a boost endure increased scrutiny.

For startups, valuation pressure or lift could come down to which side of the pandemic they are on; are they on the tail end of their tailwind (remote-work focused SaaS, perhaps?), or on the ascent (restaurant tech, maybe?). Something to chew on before you raise.

Market Notes

It was one blistering week for funding rounds. Crunchbase News, my former journalistic home, has a great piece out on just how many massive rounds we’re seeing so far this year. But even one or two steps down in scale, funding activity was super busy.

A few rounds that I could not get to this week that caught my eye included a $90 million round for Terminus (ABM-focused GTM juicer, I suppose), Anchorage’s $80 million Series C (cryptostorage for big money), and Foxtrot Market’s $42 million Series B (rapid delivery of yuppie and zoomer essentials).

Sitting here now, finally writing a tidbit about each, I am reminded at the sheer breadth of the tech market. Termius helps other companies sell, Anchorage wants to keep your ETH safe, while Foxtrot wants to help you replenish your breakfast rosé stock before you have to endure a dry morning. What a mix. And each must be generating venture-acceptable growth, as they have not merely raised more capital but raised rather large rounds for their purported maturity (measured by their listed Series stage, though the moniker can be more canard than guide.)

I jokingly call this little section of the newsletter Market Notes, a jest as how can you possibly note the whole market that we care about? These companies and their recent capital infusions underscore the point.

Various and Sundry

Finally, two notes from earnings calls. The first from Root, which is a head scratcher, and the second from Booking Holdings’ results.

I chatted with Alex Timm, Root Insurance’s CEO this week moments after it dropped numbers. As such I didn’t have much context in the way of investor response to its results. My read was that Root was super capitalized, and has pretty big expansion plans. Timm was upbeat about his company’s improving economics (on a loss ratio and loss-adjusted expenses basis, for the insurtech fans out there), and growth during the pandemic.

But then today its shares are off 16%. Parsing the analyst call, there’s movement in Root’s economic profile (regarding premium-ceding variance over the coming quarters) that make it hard to fully grok its full-year growth from where I sit. But it appears that Root’s business is still molting to a degree that is almost refreshing; the company could have gone public in 2022 with some of its current evolution behind it, but instead it raised a zillion dollars last year and is public now.

Sticking our neck out a bit, despite fellow neo-insurnace player Lemonade’s continued, and impressive valuation run, MetroMile’s stock is also softening, while Root’s has lost more than half its value from its IPO date. If the current repricing of some neo-insurance players continues, we could see some private investment into the space slow. (Fewer things like this?) It’s a possible trend we’ll have eyes on this year.

Next, Booking Holdings, the company that owns Priceline and other travel properties. Given that Booking might have notes regarding the future of business travel — which we care about for clues regarding what could come for remote work and office culture, things that impact everything from startup hub locations to software sales — The Exchange snagged a call slot and dialed the company up.

Booking Holdings’ CEO Glenn Fogel didn’t have a comment as to how his company is trading at all-time highs despite suffering from sharp year-over-year revenue declines. He did note that the pandemic has shaken up expectations for conversations, which could limit short-term business travel in the future for meetings that may now be conducted on video calls. He was bullish on future conference travel (good news for TechCrunch, I suppose), and future travel more generally.

So concerning the jetting perspective, we don’t know anything yet. Booking Holdings is not saying much, perhaps because it just doesn’t know when things will turn around. Fair enough. Perhaps after another three months of vaccine rollout will give us a better window into what a partial return to an old normal could look like.

And to cap off, you can read Apex Holdings’ SPAC presentation here, and Markforged’s here. Also I wrote about the buy-now-pay-later space here, riffed on the Digital Ocean IPO with Ron Miller here, and doodled on Toast’s valuation and the Olo debut here.

Hugs, and have a lovely weekend!

Alex

 

Rainmaking launches Motion Ventures to boost innovation in the maritime industry

A new fund has launched, with backing from the Singaporean government, to support tech innovation for the maritime industry. Called Motion Ventures, it is targeting $30 million SGD (about $22.8 million USD) and has completed its first close, with Wilhelmsen, one of the world’s largest maritime networks, and logistics company HHLA as anchor investors.

Motion Ventures was launched by Rainmaking, the venture building and investment firm that runs accelerator program Startupbootcamp, and will jointly invest in startups with SEEDS Capital, the investment arm of government agency Enterprise Singapore.

SEEDS Capital announced in June 2020 that it plans to invest $50 million SGD in maritime startups, with the goal of creating more resilient supply chains and fixing issues underscored by the COVID-19 pandemic.

Shaun Hon, general partner at Motion Ventures and director at Rainmaking, told TechCrunch that the fund plans to invest in around 20 early-stage startups focused on AI, machine learning and automation, with check sizes ranging between $500,000 SGD to $2 million SGD.

“We’ve got our eyes on some of the maritime value chain’s biggest challenges including decarbonization, supply chain resilience and improving safety. In most cases, the technology to address the industry’s issues already exists, but the missing link is figuring out how to apply these solutions in the corporate context,” Hon said.

“That’s what Motion Ventures aims to address,” he added. “If we can bring a consortium of industry adopters together to connect with entrepreneurs early in the process, we’re setting everyone up with the best chance to succeed.”

In addition to capital, Motion Ventures plans to partner startups with well-established maritime firms like Wilhelmsen to help them commercialize and integrate their technology into supply chains. For mentorship, Motion Ventures’ startups will also have access to Ocean Ventures Alliance, which was launched by Rainmaking in November 2020, and now includes more than 40 maritime value chain industry leaders.

Katana raises $11M Series A to be the SaaS powering ‘manufacturing entrepreneurs’

Katana, an Estonian startup that has built manufacturing-specific enterprise resource planning (ERP) software for SMBs, has raised $11 million in Series A funding.

Leading the round is European venture capital firm Atomico, with participation from angel investors Ott Kaukver (Checkout.com CTO), Sten Tamkivi (CPO Topia, formerly Skype), Sergei Anikin (CTO, Pipedrive) and Kairi Pauskar (former TransferWise HR Architect). Previous backer 42Cap also followed on, bringing the total investment raised by the company to date to $16 million.

Founded in 2017 by Kristjan Vilosius (CEO), Priit Kaasik (engineering lead) and Hannes Kert (CCO), Katana positions itself as the “entrepreneur manufacturer’s secret weapon” with a plug-and-play ERP for small to medium-sized manufacturers. The idea is to wean companies off existing antiquated tools such as spreadsheets and legacy software to manage inventory and production. The startup is also playing into macro trends, such as the advent of online marketplaces and D2C e-commerce, that are resulting in an explosion of independent makers, spanning cosmetics to home décor, electronics to apparel, and food and beverages.

“We are seeing a global renaissance of small manufacturing driven by the rise of e-commerce tools and consumer demand for bespoke products produced locally,” says Vilosius. “Just walk around any big city from London to San Francisco, and you’ll see workshops all around you. Someone’s making organic cosmetics here; over there, someone is making electric bikes. These companies are run by passionate entrepreneurs selling through traditional channels, but also selling through direct-to-consumer channels, e-commerce stores and marketplaces, etc. This is a massive boom of makers wanting to create products and sell them globally, and it is not a trend that will disappear tomorrow”.

The problem, however, is that small and medium-sized manufacturers don’t have the right software to support workflows necessary to sell through multiple channels — and this is where Katana comes in. The plug-and-play software claims a superior UX designed specifically to power boutique manufacturing, including functionality supporting the workflows of modern manufacturers, i.e. inventory control and optimization, and purchasing materials, managing bill-of-materials, tracking costs and more. It also offers an API and integrations with popular e-commerce sales channels and accounting tools such as Shopify, Amazon, WooCommerce, QuickBooks, Xero and others.

“We have built the world’s most self on-board-able manufacturing ERP, and that’s a very important differentiation between us and competitors,” explains Vilosius. “Implementation is so simple that more than half of Katana’s users self-onboard. It takes less than a week on average to get Katana up and running, compared to months for competitors”.

As an example of how a company might use Katana, imagine a boutique manufacturer using Shopify as their main sales channel. Once configured, Katana pulls in orders from Shopify and knows whether or not the product is available so it can be shipped immediately. If it’s unavailable, Katana displays if the necessary raw materials needed to manufacture are in stock and by when the product could be finished. “We handle the entire process from getting the raw materials in the warehouse to planning manufacturing activities, executing and shipping when the product is done,” says Vilosius.

Katana software screen shot

Image Credits: Katana

Cue statement from Atomico partner Ben Blume, who joins the Katana board: “Atomico has always believed in the strength of Estonian-built engineering and product, and as we got to know the team at Katana, we saw a familiar pattern: a relentlessly product-focussed team with the incredible ability to build and think from their customer’s point of view, and an unwavering belief that a new generation of manufacturers with big ideas shouldn’t have to settle for less than world-class technology to support them.”

There is infinite money for stock-trading startups

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here

Ready? Let’s talk money, startups and spicy IPO rumors.

Earlier this week TechCrunch broke the news that Public, a consumer stock trading service, was in the process of raising more money. Business Insider quickly filled in details surrounding the round, that it could be around $200 million at a valuation of $1.2 billion. Tiger could lead.

Public wants to be the anti-Robinhood. With a focus on social, and a recent move away from generating payment for order flow (PFOF) revenues that have driven Robinhood’s business model, and attracted criticism, Public has laid its bets. And investors, in the wake of its rival’s troubles, are ready to make it a unicorn.

Of course, the Public round comes on the heels of Robinhood’s epic $3.4 billion raise, a deal that was shocking for both its scale and speed. The trading service’s investors came in force to ensure it had the capital it needed to continue supporting consumer trades. Thanks to Robinhood’s strong Q4 2020 results, and implied growth in Q1 2021, the boosted investment made sense.

As does the Public money, provided that 1) The company is seeing lots of user growth, and 2) That it figures out its forever business model in time. We cannot comment on the second, but we can say a bit about the first point.

Thanks not to Public, really, but M1 Finance, a Midwest-based consumer fintech that has a stock-buying function amongst its other services (more on it here). It told TechCrunch that it saw a quadrupling of signups in January as compared to December. And in the last two weeks, it saw six times as many signups as the preceding two weeks.

Given that M1 doesn’t allow for trading — something that its team repeatedly stressed in notes to TechCrunch — we can’t draw a perfect line between M1 and Public and Robinhood, but we can infer that there is huge consumer interest in investing of late. Which helps explain why Public, which is hunting up a way to generate long-term incomes, can raise another round just months after it closed a different investment.

Our notes last year on how savings and investing were the new thing last year are accidentally becoming even more true than we expected.

Market Notes

As the week came to a close, Coupang filed to go public. You can read our first look here, but it’s going to be big news. Also on the IPO beat, Matterport is going out via a SPAC, I chatted with Metromile CEO Dan Preston about his insurtech public offering this week that also came via a SPAC, and so on.

Oscar Health filed, and it doesn’t look super strong. So its impending valuation is going to test public traders. That’s not a problem that Bumble had when it priced above-range this week and then skyrocketed after it started to trade. Natasha and I (she’s on Equity, as well) have some notes from Bumble CEO Whitney Wolfe Herd that we’ll get to you early next week. (Also I chatted about the IPO with the BBC a few times, which was neat, the first of which you can check out here if you’d like.)

Roblox’s impending public debut was also back in the news this week. The company was a bit bigger than it thought last year (cool), but may delay its direct listing to March (not cool).

Near to the IPO beat, Carta started to allow its own shares to trade recently, on the back of news that its revenues have scaled to around $150 million. Not bad Carta, but how about a real IPO instead of staying private? The company’s valuation more than doubled during the secondary transitions.

And then there were so very many cool venture capital rounds that I couldn’t get to this week. This Koa Health round, for example. And whatever this Slync.io news is. (If you want some earlier-stage stuff, check out recent rounds from Treinta, Level, Ramp and Monte Carlo.

And to close, a small callout to Ontic, which provides “protective intelligence software” and said that its revenue grew 177% last year. I appreciate the sharing of the numbers, so wanted to highlight the figure.

Various and Sundry

Wrapping this week, I have a final bit for you to chew on from Mark Mader, the CEO of Smartsheet, a public company — former startup, it’s worth noting — that plays in the no-code, automation and collaboration markets. That’s a rough summary. Anyhoo, I asked Mader about no-code trends in 2021, as I have my eyes on the space. Here’s what he wrote for us:

If you thought the sudden shift to remote work sped up corporate America’s shift to digital, you haven’t seen anything yet. Digital transformation is going to accelerate even more rapidly in 2021. Last year, the workforce was exposed to many different types of technology all at once. For example, a company may have deployed Zoom or DocuSign for the first time. But much of this shift involved taking analog processes like meetings or document signing and approval and bringing them online. Things like this are merely a first step. 2021 is the year the companies will begin to connect large-scale digital events to infrastructure that can make them automated and repeatable. It’s the difference between one person signing a document and hundreds of people signing hundreds of documents, with different rules for each one. And that’s just one example. Another use case could involve linking HR software to project management software for automated, real-time resource allocation that allows a company to get more out of both platforms, as well as its people. The businesses that can automate and simplify complex workflows like these will see dramatically improved efficiency and return on their technology investments, putting them on the path to true transformation and improved profitability.

We shall see!

Alex

 

Does SoftBank have 20 more DoorDashes?

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Natasha and Danny and Alex and Grace were all here to chat through the week’s biggest tech happenings. This week felt oddly comforting from a tech news perspective: Facebook is copying something, early-stage startup data is flawed enough to talk about and sweet DoorDash is buying robots for undisclosed sums.

So, here’s a rundown of the tech news we got into (as always, jokes aren’t previewed so you’ll have to listen to the actual show to get our critique and Award Winning Analysis*):

In good news, long-time Equity producer Chris Gates is back starting next week, which means we’ll have our biggest crew ever helping get the show put together. And, in other good news, there’s going to be more Equity than ever for you to hear. Coming soon.

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

*OK, so not award-winning yet. But soon enough, because manifestation works.

English learning app ELSA lands $15 million Series B for international growth and its B2B platform

Speaking is one of the hardest parts of learning a new language, especially if you don’t have someone to practice with regularly. ELSA is an app that helps by using speech recognition technology to correct pronunciation. Based in San Francisco and Ho Chi Minh City, ELSA announced today it has raised a $15 million Series B, led by VI (Vietnam Investments) Group and SIG. Other participants included returning investors Google’s AI-focused fund Gradient Ventures, SOSV and Monk’s Hill Ventures, along with Endeavor Catalyst and Globant Ventures.

The capital will be used to expand ELSA’s operations in Latin America and build a scalable B2B platform, allowing companies and educational organizations to offers the app’s coaching services to employees or students. Founded in 2015, ELSA, which stands for English Language Speech Assistant, now claims more than 13 million users. Its last round of funding was a $7 million Series A announced in 2019.

In addition to Latin America, ELSA will also focus on expanding in Vietnam, India and Japan, where it saw high demand last year. The company recently formed a partnership with IDP and British Council, which owns the widely-used IELTS English language test and now recommends ELSA to for test preparation. ELSA is also working with language schools in Vietnam like IMAP and Speak Up, online learning platform YOLA and corporate clients including Kimberly Clark, Intel and ATAD.

ELSA co-founder and chief executive officer Vu Van told TechCrunch that many users want to improve their English speaking proficiency for job opportunities and to increase their earning potential. In Vietnam, India and Brazil, people with higher English speaking proficiency can earn about two to three times more than their colleagues, she said.

“This motivation drives a lot of demand for our English learner community in Vietnam, India and Brazil, especially during COVID-19 when we’ve seen enormous interest from the LatAm region as well,” Van added.

Smartphone with English pronunciation app ELSA open on it

ELSA’s English pronunciation feedback

In Vietnam, where Van is from, English learners spend a lot of their disposable income on online or offline English training. “However, the majority of English learners still struggle to improve their speaking skill because other people don’t understand them or they’re afraid to speak it,” she said. ELSA was designed to give them an accessible resource to help improve their pronunciation and confidence when speaking English.

Other apps focused on English pronunciation include FluentU and Say It. Van said one of ELSA’s main advantages is its proprietary voice recognition AI tech.

“What’s unique about our AI is that we’ve collected the largest amount of accented English voice data from millions of users that we have used to train our AI model over the last few years, which gives us a higher accuracy in recognizing and understanding non-native English speakers around the world,” she said. “The other existing voice recognition technologies available, by comparison, might understand native speakers well but have a hard time understanding non-native accented English learner communities.”

Instead of providing feedback about individual words, ELSA’s app also corrects individual sounds and gives users detailed information on how to improve their pronunciation, including “very advanced prosodic speaking features like intonation, rhythm and fluency to help them speak English more naturally, something that our competitors don’t offer,” Van added.

On-demand logistics company Lalamove gets $515 million Series E

Lalamove will extend its network to cover more small Chinese cities after raising $515 million in Series E funding, the on-demand logistics company announced on its site. The round was led by Sequoia Capital China, with participation from Hillhouse Capital and Shunwei Capital. All three are returning investors.

According to Crunchbase data, this brings Lalamove’s total raised so far to about $976.5 million. The company’s last funding announcement was in February 2019, when it hit unicorn status with a Series D of $300 million.

Bloomberg reported last week that Lalamove was seeking at least $500 million in new funding at $8 billion valuation, or four times what it raised at least year.

Founded in 2013 for on-demand deliveries within the same city, Lalamove has since grown its business to include freight services, enterprise logistics, moving and vehicle rental. In addition to 352 cities in mainland China, Lalamove also operates in Hong Kong (where it launched), Taiwan, Vietnam, Indonesia, Malaysia, Singapore, the Philippines and Thailand. The company entered the United States for the first time in October, and currently claims about 480,000 monthly active drivers and 7.2 million monthly active users.

Part of its Series D had been earmarked to expand into India, but Lalamove was among 43 apps that were banned by the government, citing cybersecurity concerns.

In its announcement, Lalamove CEO Shing Chow said its Series E will be used to enter more fourth- and fifth-tier Chinese cities, adding “we believe the mobile internet’s transformation of China’s logistics industry is far from over.”

Other companies that have recently raised significant funding rounds for their logistics operations in China include Manbang and YTO.

Lalamove’s (known in Chinese as Huolala) Series E announcement said the company experienced a 93% drop in shipment volume at the beginning of the year, due to the COVID-19 pandemic, but has experienced a strong rebound, with order volume up 82% year-over-year even before Double 11.

Reddit acquires Dubsmash

Reddit announced that it has acquired short video platform Dubsmash. The deal’s terms were undisclosed. Dubsmash will retain its own platform and brand, and Reddit will integrate its video creation tools. Its co-founders, Suchit Dash, Jonas Drüppel and Tim Specht, will join Reddit.

According to Crunchbase data, the app has raised $20.2 million from investors including Lowercase Capital, Index Ventures, Eniac Ventures, Heartcore Capital and Sunstone Life.

Dubsmash is now one of TikTok’s biggest rivals, but struggled for several years after a brief stint of popularity in 2015 during its first incarnation as a lip-sync video app. In 2017 it began transforming itself into a social platform and moved its headquarters from Berlin to Brooklyn. By the beginning of this year, Dubsmash’s share of the United States’ short-form video market was second only to TikTok when counted by app installs, and it reportedly held acquisition talks with Facebook and Snap.

Credit for much of Dubsmash’s success goes to Black and Latinx users. While many of TikTok’s highest-profile stars are white, Dubsmash is known for its large communities of Black and Latinx content creators. The polarization between the two apps began to gain more attention earlier this year, when the New York Times published a piece about how dance moves by Black Dubsmash stars are frequently appropriated without credit by TikTok influencers, which means their creators miss out on opportunities like larger followings, brand deals and industry connections.

Reddit has its own issues with racism, and has been criticized for not doing enough to stop hate speech or giving moderators of subreddits targeted by racist trolls enough support.

Last year, founder and former chief executive officer Alexis Ohanian called for his position on Reddit’s board to be filled with a Black candidate when he stepped down, which current CEO Steve Huffman said the company would honor as part of a larger effort to address hate speech on the platform announced during anti-racism demonstrations after the killing of George Floyd by a police officer. Ohanian’s position was filled by Y Combinator CEO Michael Seibel.

In its announcement today, Reddit linked its acquisition of Dubsmash to its inclusion efforts, acknowledging that the app’s “communities are driven by young, diverse creators—about 25 percent of all Black teens in the U.S. are on Dubsmash, and females represent 70 percent of users.”

It also said the integration of Dubsmash’s video creation tools will enable Reddit’s users to “express themselves in original and authentic ways that are endemic to our communities.”

Since launching native videos in 2017, Reddit said usage has increased sharply, growing 2X in 2020 alone. Much of Reddit’s content is still text-based, however, with video, gifs and images often shared from other sources, so Dubsmash’s integration can help Reddit build out its own video platform.

Seoul-based payment tech startup CHAI gets $60 million from Hanhwa, SoftBank Ventures Asia

Demand for contactless payments and e-commerce has grown in South Korea during the COVID-19 pandemic. This is good news for payment service operators, but the market is very fragmented, so adding payment options is a time-consuming process for many merchants. CHAI wants to fix this with an API that enables companies to accept over 20 payment systems. The Seoul-based startup announced today it has raised a $60 million Series B.

The round was led by Hanhwa Investment & Securities, with participation from SoftBank Ventures Asia (the early-stage venture capital arm of SoftBank Group), SK Networks, Aarden Partners and other strategic partners. It brings CHAI’s total funding to $75 million, including a $15 million Series A in February.

Last month, the Bank of Korea, South Korea’s central bank, released a report showing that contactless payments increased 17% year-over-year since the start of COVID-19.

CHAI serves e-commerce companies with an API called I’mport, that allows them to accept payments from over 20 options, including debit and credit cards through local payment gateways, digital wallets, wire transfers, carrier billings and PayPal. It is now used by 2,200 merchants, including Nike Korea and Philip Morris Korea.

CHAI chief executive officer Daniel Shin told TechCrunch that businesses would usually have to integrate each kind of online payment type separately, so I’mport saves its clients a lot of time.

The company also offers its own digital wallet and debit card called the CHAI Card, which launched in June 2019 and now has 2.5 million users, a small number compared with South Korea’s leading digital wallets, which include Samsung Pay, Naver Pay, Kakao Pay and Toss.

“CHAI is a late comer to Korea’s digital payments market, but we saw a unique opportunity to offer value,” said Shin. The CHAI Card offers merchants a lower transaction fee than other cards and users typically check its app about 20 times to see new cashback offers and other rewards based on how often they pay with their cards or digital wallet.

“We’ve digitized the plastic card experience, and this is the first step towards creating a robust online rewards platform,” Shin added.

In press statement, Hanhwa Investment & Securities director SeungYoung Oh director said, “I’mport has reduced what once took e-commerce businesses weeks to complete into a simple copy-and-paste task, radically reducing costs. It is a first-of-its-kind business model in Korea, and I have no doubt that CHAI will continue to grow this service into an essential infrastructure of the global fintech landscape.”

Singapore-based mental health app Intellect reaches one million users, closes seed funding

Theodoric Chew, co-founder and chief executive officer of mental health app Intellect

Theodoric Chew, co-founder and chief executive officer of mental health app Intellect

Intellect, a Singapore-based startup that wants to lower barriers to mental health care in Asia, says it has reached more than one million users just six months after launching. Google also announced today that the startup’s consumer app, also called Intellect, is one of its picks for best personal growth apps of 2020.

The company recently closed an undisclosed seed round led by Insignia Ventures Partners. Angel investors including e-commerce platform Carousell co-founder and chief executive officer Quek Siu Rui; former Sequoia partner Tim Lee; and startup consultancy xto10x’s Southeast Asia CEO J.J. Chai also participated.

In a statement, Insignia Ventures Partners principal Samir Chaibi said, “In Intellect, we see a fast-scaling platform addressing a pain that has become very obvious amidst the COVID-19 pandemic. We believe that pairing clinically-backed protocols with an efficient mobile-first delivery is the key to break down the barriers to access for millions of patients globally.”

Co-founder and chief executive officer Theodoric Chew launched Intellect earlier this year because while there is a growing pool of mental wellness apps in the United States and Europe that have attracted more funding during the COVID-19 pandemic, the space is still very young in Asia. Intellect’s goal is encourage more people to incorporate mental health care into their daily routines by lowering barriers like high costs and social stigma.

Intellect offers two products. One is a consumer app with self-guided programs based on cognitive behavioral therapy techniques that center on issues like anxiety, self-esteem or relationship issues.

The other is a mental health platform for employers to offer as a benefit and includes a recently launched telehealth service called Behavioural Health Coaching that connects users with mental health professionals. The service, which includes one-on-one video sessions and unlimited text messaging, is now a core part of Intellect’s services, Chew told TechCrunch.

Intellect’s enterprise product now reaches 10,000 employees, and its clients include tech companies, regional operations for multinational corporations and hospitals. Most are located in Singapore, Hong Kong, Indonesia and India, and range in size from 100 to more than 3,000 employees.

For many small- to mid-sized employers, Intellect is often the first mental health benefit they have offered. Larger clients may already have EAP (employee assistance programs), but Chew said those are often underutilized, with an average adoption rate of 1% to 2%. On the other hand, he said Intellect’s employee benefit program sees an average adoption rate of 30% in the first month after it is rolled out at a company.

Chew added that the COVID-19 pandemic has prompted more companies to address burnout and other mental health issues.

“In terms of larger trends, we’ve seen a huge spike in companies across the region having mental health and wellbeing of their employees being prioritized on their agenda,” said Chew. “In terms of user trends, we see a significantly higher utilization in work stress and burnout, anxiety and relationship-related programs.”

Intellect’s seed round will be used to expand in Asian markets and to help fund clinical research studies it is currently conducting with universities and organizations in Singapore, Australia and the United Kingdom.

What to make of Stripe’s possible $100B valuation

This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

Welcome to a special Thanksgiving edition of The Exchange. Today we will be brief. But not silent, as there is much to talk about.

Up top, The Exchange noodled on the Slack-Salesforce deal here, so please catch up if you missed that while eating pie for breakfast yesterday. And, sadly, I have no idea why Palantir is seeing its value skyrocket. Normally we’d discuss it, asking ourselves what its gains could mean for the lower tiers of private SaaS companies. But as its public market movement appears to be an artificial bump in value, we’ll just wait.

Here’s what I want to talk about this fine Saturday: Bloomberg reporting that Stripe is in the market for more money, at a price that could value the company at “more than $70 billion or significantly higher, at as much as $100 billion.”

Hot damn. Stripe would become the first or second most valuable startup in the world at those prices, depending on how you count. Startup is a weird word to use for a company worth that much, but as Stripe is still clinging to the private markets like some sort of liferaft, keeps raising external funds, and is presumably more focused on growth than profitability, it retains the hallmark qualities of a tech startup, so, sure, we can call it one.

Which is odd, because Stripe is a huge concern that could be worth twelve-figures, provided that gets that $100 billion price tag. It’s hard to come up with a good reason for why it’s still private, other than the fact that it can get away with it.

Anyhoo, are those reported, possible prices bonkers? Maybe. But there is some logic to them. Recall that Square and PayPal earnings pointed to strong payments volume in recent quarters, which bodes well for Stripe’s own recent growth. Also note that 14 months ago or so, Stripe was already processing “hundreds of billions of dollars of transactions a year.”

You can do fun math at this juncture. Let’s say Stripe’s processing volume was $200 billion last September, and $400 billion today, thinking of the number as an annualized metric. Stripe charges 2.9% plus $0.30 for a transaction, so let’s call it 3% for the sake of simplicity and being conservative. That math shakes out to a run rate of $12 billion.

Now, the company’s actual numbers could be closer to $100 billion, $150 billion and $4.5 billion, right? And Stripe won’t have the same gross margins as Slack .

But you can start to see why Stripe’s new rumored prices aren’t 100% wild. You can make the multiples work if you are a believer in the company’s growth story. And helping the argument are its public comps. Square’s stock has more than tripled this year. PayPal’s value has more than doubled. Adyen’s shares have almost doubled. That’s the sort of public market pull that can really help a super-late-stage startup looking to raise new capital and secure an aggressive price.

To wrap, Stripe’s possible new valuation could make some sense. The fact that it is still a private company does not.

Market Notes

Various and Sundry

And speaking of edtech, Equity’s Natasha Mascarenhas and our intrepid producer Chris Gates put together a special ep on the education technology market. You can listen to it here. It’s good.

Hugs and let’s both go do some cardio,

Alex

PingCAP, the open-source developer behind TiDB, closes $270 million Series D

PingCAP, the open-source software developer best known for NewSQL database TiDB, has raised a $270 million Series D. TiDB handles hybrid transactional and analytical processing (HTAP), and is aimed at high-growth companies, including payment and e-commerce services, that need to handle increasingly large amounts of data.

The round’s lead investors were GGV Capital, Access Technology Ventures, Anatole Investment, Jeneration Capital and 5Y Capital (formerly known as Morningside Venture Capital). It also included participation from Coatue, Bertelsmann Asia Investment Fund, FutureX Capital, Kunlun Capital, Trustbridge Partners, and returning investors Matrix Partners China and Yunqi Partners.

The funding brings PingCAP’s total raised so far to $341.6 million. Its last round, a Series C of $50 million, was announced back in September 2018.

PingCAP says TiDB has been adopted by about 1,500 companies across the world. Some examples include Square; Japanese mobile payments company PayPay; e-commerce app Shopee; video-sharing platform Dailymotion; and ticketing platfrom BookMyShow. TiDB handles online transactional processing (OLTP) and online analytical processing (OLAP) in the same database, which PingCAP says results in faster real-time analytics than other distributed databases.

In June, PingCAP launched TiDB Cloud, which it describes as fully-managed “TiDB as a Service,” on Amazon Web Services and Google Cloud. The company plans to add more platforms, and part of the funding will be used to increase TiDB Cloud’s global user base.

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.

Warren gets $1.4 million to help local cloud infrastructure providers compete against Amazon and other giants

Started as a side project by its founders, Warren is now helping regional cloud infrastructure service providers compete against Amazon, Microsoft, IBM, Google and other tech giants. Based in Tallinn, Estonia, Warren’s self-service distributed cloud platform is gaining traction in Southeast Asia, one of the world’s fastest-growing cloud service markets, and Europe. It recently closed a $1.4 million seed round led by Passion Capital, with plans to expand in South America, where it recently launched in Brazil.

Warren’s seed funding also included participation from Lemonade Stand and angel investors like former Nokia vice president Paul Melin and Marek Kiisa, co-founder of funds Superangel and NordicNinja.

The leading global cloud providers are aggressively expanding their international businesses by growing their marketing teams and data centers around the world (for example, over the past few months, Microsoft has launched a new data center region in Austria, expanded in Brazil and announced it will build a new region in Taiwan as it competes against Amazon Web Services).

But demand for customized service and control over data still prompt many companies, especially smaller ones, to pick local cloud infrastructure providers instead, Warren co-founder and chief executive officer Tarmo Tael told TechCrunch.

“Local providers pay more attention to personal sales and support, in local language, to all clients in general, and more importantly, take the time to focus on SME clients to provide flexibility and address their custom needs,” he said. “Whereas global providers give a personal touch maybe only to a few big clients in the enterprise sectors.” Many local providers also offer lower prices and give a large amount of bandwidth for free, attracting SMEs.

He added that “the data sovereignty aspect that plays an important role in choosing their cloud platform for many of the clients.”

In 2015, Tael and co-founder Henry Vaaderpass began working on the project that eventually became Warren while running a development agency for e-commerce sites. From the beginning, the two wanted to develop a product of their own and tested several ideas out, but weren’t really excited by any of them, he said. At the same time, the agency’s e-commerce clients were running into challenges as their businesses grew.

Tael and Vaaderpass’s clients tended to pick local cloud infrastructure providers because of lower costs and more personalized support. But setting up new e-commerce projects with scalable infrastructure was costly because many local cloud infrastructure providers use different platforms.

“So we started looking for tools to use for managing our e-commerce projects better and more efficiently,” Tael said. “As we didn’t find what we were looking for, we saw this as an opportunity to build our own.”

After creating their first prototype, Tael and Vaaderpass realized that it could be used by other development teams, and decided to seek angel funding from investors, like Kiisa, who have experience working with cloud data centers or infrastructure providers.

Southeast Asia, one of the world’s fastest-growing cloud markets, is an important part of Warren’s business. Warren will continue to expand in Southeast Asia, while focusing on other developing regions with large domestic markets, like South America (starting with Brazil). Tael said the startup is also in discussion with potential partners in other markets, including Russia, Turkey and China.

Warren’s current clients include Estonian cloud provider Pilw.io and Indonesian cloud provider IdCloudHost. Tael said working with Warren means its customers spend less time dealing with technical issues related to infrastructure software, so their teams, including developers, can instead focus on supporting clients and managing other services they sell.

The company’s goal is to give local cloud infrastructure providers the ability to meet increasing demand, and eventually expand internationally, with tools to handle more installations and end users. These include features like automated maintenance and DevOps processes that streamline feature testing and handling different platforms.

Ultimately, Warren wants to connect providers in a network that end users can access through a single API and user interface. It also envisions the network as a community where Warren’s clients can share resources and, eventually, have a marketplace for their apps and services.

In terms of competition, Tael said local cloud infrastructure providers often turn to OpenStack, Virtuozzo, Stratoscale or Mirantis. The advantage these companies currently have over Warren is a wider network, but Warren is busy building out its own. The company will be able to connect several locations to one provider by the first quarter of 2021. After that, Tael said, it will “gradually connect providers to each other, upgrading our user management and billing services to handle all that complexity.”

Intel agrees to sell its NAND business to SK Hynix for $9 billion

SK Hynix, one of the world’s largest chip makers, announced today it will pay $9 billion for Intel’s flash memory business. Intel said it will use proceeds from the deal to focus on artificial intelligence, 5G and edge computing.

“For Intel, this transaction will allow us to to further prioritize our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders,” said Intel chief executive officer Bob Swan in the announcement.

The Wall Street Journal first reported earlier this week that the two companies were nearing an agreement, which will turn SK Hynix into one of the world’s largest NAND memory makers, second only to Samsung Electronics.

The deal with SK Hynix is the latest one Intel has made so it can double down on developing technology for 5G network infrastructure. Last year, Intel sold the majority of its modem business to Apple for about $1 billion, with Swan saying that the time that the deal would allow Intel to “[put] our full effort into 5G where it most closely aligns with the needs of our global customer base.”

Once the deal is approved and closes, Seoul-based SK Hynix will take over Intel’s NAND SSD and NAND component and wafer businesses, and its NAND foundry in Dalian, China. Intel will hold onto its Optane business, which makes SSD memory modules. The companies said regulatory approval is expected by late 2021, and a final closing of all assets, including Intel’s NAND-related intellectual property, will take place in March 2025.

Until the final closing takes places, Intel will continue to manufacture NAND wafers at the Dalian foundry and retain all IP related to the manufacturing and design of its NAND flash wafers.

As the Wall Street Journal noted, the Dalian facility is Intel’s only major foundry in China, which means selling it to SK Hynix will dramatically reduce its presence there as the United States government puts trade restrictions on Chinese technology.

In the announcement, Intel said it plans to use proceeds from the sale to “advance its long-term growth priorities, including artificial intelligence, 5G networking and the intelligent, autonomous edge.”

During the six-month period ending on June 27, 2020, NAND business represented about $2.8 billion of revenue for its Non-volatile Memory Solutions Group (NSG), and contributed about $600 million to the division’s operating income. According to the Wall Street Journal, this made up the majority of Intel’s total memory sales during that period, which was about $3 billion.

SK Hynix CEO Seok-Hee Lee said the deal will allow the South Korean company to “optimize our business structure, expanding our innovative portfolio in the NAND flash market segment, which will be comparable with what we achieved in DRAM.”

VCs reload ahead of the election as unicorns power ahead

This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

It was an active week in the technology world broadly, with big news from Facebook and Twitter and Apple. But past the headline-grabbing noise, there was a steady drumbeat of bullish news for unicorns, or private companies worth $1 billion or more.

A bullish week for unicorns

The Exchange spent a good chunk of the week looking into different stories from unicorns, or companies that will soon fit the bill, and it’s surprising to see how much positive financial news there was on tap even past what we got to write about.

Databricks, for example, disclosed a grip of financial data to TechCrunch ahead of regular publication, including the fact that it grew its annual run rate (not ARR) to $350 million by the end of Q3 2020, up from $200 million in Q2 2019. It’s essentially IPO ready, but is not hurrying to the public markets.

Sticking to our theme, Calm wants more money for a huge new valuation, perhaps as high as $2.2 billion which is not a surprise. That’s more good unicorn news. As was the report that “India’s Razorpay [became a] unicorn after its new $100 million funding round” that came out this week.

Razorpay is only one of a number of Indian startups that have become unicorns during COVID-19. (And here’s another digest out this week concerning a half-dozen startups that became unicorns “amidst the pandemic.”)

There was enough good unicorn news lately that we’ve lost track of it all. Things like Seismic raising $92 million, pushing its valuation up to $1.6 billion from a few weeks ago. How did that get lost in the mix?

All this matters because while the IPO market has captured much attention in the last quarter or so, the unicorn world has not sat still. Indeed, it feels that unicorn VC activity is the highest we’ve seen since 2019.

And, as we’ll see in just a moment, the grist for the unicorn mill is getting refilled as we speak. So, expect more of the same until something material breaks our current investing and exit pattern.

Market Notes

What do unicorns eat? Cash. And many, many VCs raised cash in the last seven days.

A partial list follows. It could be that investors are looking to lock in new funds before the election and whatever chaos may ensue. So, in no particular order, here’s who is newly flush:

All that capital needs to go to work, which means lots more rounds for many, many startups. The Exchange also caught up with a somewhat new firm this week: Race Capital. Helmed by Alfred Chuang, formerly or BEA who is an angel investor now in charge of his own fund, the firm has $50 million to invest.

Sticking to private investments into startups for the moment, quite a lot happened this week that we need to know more about. Like API-powered Argyle raising $20 million from Bain Capital Ventures for what FinLedger calls “unlocking and democratizing access to employment records.” TechCrunch is currently tracking the progress of API-led startups.

On the fintech side of things, M1 Finance raised $45 million for its consumer fintech platform in a Series C, while another roboadvisor, Wealthsimple, raised $87 million, becoming a unicorn at the same time. And while we’re in the fintech bucket, Stripe dropped $200 million this week for Nigerian startup Paystack. We need to pay more attention to the African startup scene. On the smaller end of fintech, Alpaca raised $10 million more to help other companies become Robinhood.

A few other notes before we change tack. Kahoot raised $215 million due to a boom in remote education, another trend that is inescapable in 2020 as part of the larger edtech boom (our own Natasha Mascarenhas has more).

Turning from the private market to the public, we have to touch on SPACs for just a moment. The Exchange got on the phone this week with Toby Russell from Shift, which is now a public company, trading after it merged with a SPAC, namely Insurance Acquisition Corp. Early trading is only going so well, but the CEO outlined for us precisely why he pursued a SPAC, which was actually interesting:

  • Shift could have gone public via an IPO, Russell said, but prioritized a SPAC-led debut because his firm wanted to optimize for a capital raise to keep the company growing.
  • How so? The private investment in public equity (PIPE) that the SPAC option came with ensured that Shift would have hundreds of millions in cash.
  • Shift also wanted to minimize what the CEO described as market risk. A SPAC deal could happen regardless of what the broader markets were up to. And as the company made the choice to debut via a SPAC in April, some caution, we reckon, may have made some sense.

So now Shift is public and newly capitalized. Let’s see what happens to its shares as it gets into the groove of reporting quarterly. (Obviously, if it flounders, it’s a bad mark for SPACs, but, conversely, successful trading could lead to a bit more momentum to SPAC-mageddon.)

A few more things and we’re done. Unicorn exits had a good week. First, Datto’s IPO continues to move forward. It set an initial price this week, which could value it above $4 billion. Also this week, Roblox announced that it has filed to go public, albeit privately. It’s worth billions as well. And finally, DoubleVerify is looking to go public for as much as $5 billion early next year.

Not all liquidity comes via the public markets, as we saw this week’s Twilio purchase of Segment, a deal that The Exchange dug into to find out if it was well-priced or not.

Various and Sundry

We’re running long naturally, so here are just a few quick things to add to your weekend mental tea-and-coffee reading!

Next week we are digging more deeply into Q3 venture capital data, a foretaste of which you can find here, regarding female founders, a topic that we returned to Friday in more depth.

Alex

Gogoro’s Eeyo 1s e-bike goes on sale in France, its first European market

Gogoro announced today that its Eeyo 1s is now available for sale in France, the smart electric bike’s first European market. Another model, the Eeyo 1, will launch over the next few months in France, Belgium, Monaco, Germany, Switzerland, Austria and the Czech Republic.

In France, the Eeyo 1s can be purchased through Fnac, Darty or, in Paris, Les Cyclistes Branchés. The Eeyo 1s is priced at €4699 including VAT, while the the Eeyo 1 will be priced at €4599, also including VAT.

The weight of Eeyo bikes is one of their key selling points and Gogoro says they are about half the weight of most other e-bikes. The Eeyo 1s weighs 11.9 kg and the Eeyo 1 clocks in at 12.4 kg.  Both have carbon fiber frames and forks, but the Eeyo 1s’ seat post, handlebars and rims are also carbon fiber, while on the Eeyo 1 they are made with an alloy.

Based in Taiwan, Gogoro first introduced its Eeyo lineup in May, making them available for sale in the U.S. first. The e-bikes are the company’s second type of vehicle after its SmartScooters, electric scooters that are powered by swappable batteries. The Eeyo bike’s key technology is the SmartWheel, a self-contained hub that integrates its motor, battery, sensor and smart connectivity technology so it can be paired with a smartphone app.

In an interview for the Eeyo’s launch, Gogoro co-founder and chief executive Horace Luke said the company began planning for Eeyo’s launch in 2019, before the COVID-19 pandemic. While sale of e-bikes were already growing steadily before COVID-19, the pandemic has accelerated sales of e-bikes as people avoid public transportation and stay closer to home. Several cities have also closed some streets to car traffic, making riders more willing to use bikes for short commutes and exercise.

Founded in 2011 and backed by investors including Temasek, Sumitomo Corporation, Panasonic, the National Development Fund of Taiwan and Generation (the sustainable tech fund led by former vice president Al Gore), Gogoro is best known for its electric scooters, but it is also working on a turnkey solution for energy-efficient vehicles to license to other companies, with the goal of reducing carbon emissions in cities around the world.

Venture capital gets less diverse in 2020

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. You can subscribe here.


First, a big congrats on making it through the week. If you live in the United States, you just endured one of the wildest news weeks ever. Rapid-fire headlines and nigh-panic have been our lot since last Friday when the president announced he was COVID-19 positive. We’re all very tired. You get points for just surviving.

Second, I wanted to bring you something uplifting this weekend, as you deserve it. Sadly, that’s not what we’re going to talk about.

On Friday, The Exchange covered new data concerning the venture capital results of female founders during the third quarter. The data set was U.S.-focused, but we can presume that it is illustrative of global trends. Regardless of that nuance, the data was depressing.

In the third quarter, U.S.-based female founders and co-founders raised 136 rounds worth $434 million, per PitchBook data. That was a handful more rounds than Q2 2020, but far fewer dollars. And it was down across the board compared to Q3 2019. Even more, as we noted in the piece, the aggregate venture capital world did very well.

Here’s some PwC data making that point, and a bit more from my old employer Crunchbase. What matters is that female founders are doing worse when VCs are super active. This will only perpetuate inequalities and inequities in the startup market.

Speaking of which, here’s some more bad news. Vern Howard Jr., the co-founder and CEO of Hallo, a startup that has raised nearly $2 million, according to Crunchbase, compiled some data on Black founders’ VC performance in Q3. Here’s what he set out to do:

[W]e wanted to put hard numbers behind the promises of so many venture capitalists and create a benchmark for how we can track the investment into black founders over time. So our team pulled a list from Crunchbase of all the startups globally with a total funding amount of $500,000 — $20,000,000 and who raised a round between July 1 and October 1. There were over 1383 companies here and our team went through one by one, to see how many Black founders there were.

There were 31.

Now, you could open up the funding bands to include both smaller and larger funding events, but regardless of the data boundaries, the resulting number — just 2.2% of the total — is a disgrace.

Market Notes

Various and Sundry

  • Continuing our coverage of the savings and investing boom that fintech startups around the world have been riding this year, Freetrade, a British Robinhood if you will, told The Exchange that it crossed £1 billion in September order volume. That’s not bad!
  • Freetrade also recently launched a paid version of its service, as the payment-for-order-flow method of generating revenue that Robinhood is growing on the back of is not allowed across the pond.
  • Sticking to the fintech world, Yotta Savings is a startup that provides a savings option to its users, with the added chance of winning a big monetary prize for having stored their money with the startup. Folks have been whispering in my ear about the company for a bit, but I’ve held off writing about it until now as it was not clear to me if the model was merely a gimmick, or something that would actually attract customers.
  • Well, Yotta grew from 8,000 accounts to more than 30,000 in the past few weeks and has reached the $100 million deposit mark. So, I guess we now care.
  • Coinbase lost one in 20 employees to its new strategy of standing neutral during political times on anything that its CEO deems as unrelated to its core mission, which, as a for-profit company with tectonic financial backing, is making money.
  • On the same topic, Can from The Margins made a salient point that “no politics is a political stance.” Correct, and it is a very conservative one at that.
  • Even more, Coinbase’s CEO made noise about how his company will “work to create an environment where everyone is welcome and can do their best work, regardless of background, sexual orientation, race, gender, age, etc.” Whether he likes it or not, this is a political stance, and one that has nothing to do with the company’s stated core mission. And a political fight earned it — namely, equal access to the workplace.
  • I’ll toss in a plug for this piece on the matter from a VC that TechCrunch published, and these thoughts from a tech denizen on how to guarantee that your company lands on the wrong side of history on essentially everything.
  • Wrapping our grab-bag this week, Ping Identity bought ShoCard. Ping is now a public company, so normally its deals would land outside our wheelhouse. But we care in this case because TechCrunch has covered ShoCard (2015: “ShoCard Is A Digital Identity Card On The Blockchain”), and because the startup does crypto-related work.
  • Seeing a public company snap up a blockchain startup for real money, on purpose and out loud, doesn’t happen every day. More here if you want to read about the deal.

Wrapping, this newsletter is a lot of fun and I appreciate your reading it. It is, also, a work in progress. So feel free to hit respond to it and let me know what you want to see more of. Or hit respond and send me a cute pic of your pet. Either is fine by me.

Chat soon,

Alex

Faraday Future plans to go public through a SPAC deal

Faraday Future, the electric vehicle startup with a messy and complicated past, is planning to go public through a special-purchase acquisition company (SPAC) deal.

The company’s chief executive Carsten Breitfeld told Reuters that the company is working on a reverse merger with a SPAC and “will be able to announce something hopefully quite soon.”

Breitfeld, formerly the co-founder of Chinese EV startup Byton, declined to give more information about who Faraday is talking to or when the deal will closed. A Faraday Future spokesperson contacted by TechCrunch also said the company had no further details to share at this time.

SPACs are blank-check companies that are formed to raise money through an initial public offering in order to merge or acquire other companies. As TechCrunch’s Connie Loizos wrote in an explainer, they’ve become more popular among tech companies recently because many had their initial public offering plans delayed by the pandemic. SPACs also present an alternative to the regulatory issues surrounding traditional IPOs.

Shortly after being appointed CEO in September 2019, Breitfeld told Automotive News that Faraday Future wanted to raise about $850 million by the first quarter of 2020. By that time, company had already received $225 million in bridge financing led by Birch Lake Associates. The funding’s purpose is to finally bring Faraday’s flagship vehicle, the FF91 luxury electric SUV, to market.

Though the SPAC deal’s timeline is still undisclosed, Breitfeld told Reuters that Faraday Future plans to start volume production of the FF91, its first electric luxury SUV, 12 months after securing funding. This would represent a major milestone for the company, which was founded in 2015 but hasn’t produced a production vehicle yet. Faraday Future has made several prototypes, including one that went up for auction in August.

If the deal is successful, Breitfeld told Reuters that Faraday Future will first build the FF91 at its Hanford, California plant, but then work with a contract manufacturer in Asia that it has already entered into an agreement with.

Faraday Future’s financial issues date back to 2017, when LeEco, the Chinese tech company it was closely linked to, began dealing with multiple financial headaches of its own. They worsened when Faraday Future fell out with its main backer, Evergrande Health, in 2018.

Many of those issues were tied to Jia Yueting, founder and former CEO of LeEco and Faraday Future, who filed for personal bankruptcy earlier this year. Filings in the case revealed that Jia’s bankruptcy was funded by one of Faraday Future’s main holding companies, Pacific Technology. The documents also revealed that Faraday Future had just $6.8 million in cash at the end of July 2019.

Breitfeld told Reuters that Jia no longer owns stock in Faraday Future. The approval of Jia’s bankruptcy enabled Faraday Future to once again pursue investments to produce its electric vehicles, though now that may hinge on the success of its SPAC deal. Breitfeld acknowledged that Faraday Future’s past raises questions. “Because of the history and sometimes the bad news of the company, not everyone is really trusting us,” he told Reuters. “They want to see that we’ve become a stable company.”

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

E-scooter startup Neuron Mobility adds $12M to its Series A for expansion in Australia and New Zealand

Neuron Mobility, a Singapore-based e-scooter rental startup, announced today that it has added $12 million to its Series A. Led by Square Peg, an Australian venture capital firm and GSR Ventures, this increases the round’s new total to $30.5 million. The company, which operates in Australia and New Zealand in addition to Southeast Asian markets, first announced its Series A in December 2019.

Part of Neuron Mobility’s growth plans hinges on the increased adoption of electric scooters and bikes during the COVID-19 pandemic. Many people are using their cars less frequently because they are working remotely or there are movement restrictions where they live. When they do go out, electric bikes and scooters offer an alternative to public transportation and ride-hailing services for short trips.

Neuron Mobility’s chief executive Zachary Wang said the company raised a Series A+ instead of moving onto a Series B because more cities are “opening up to the possibility of micromobility, particularly rental e-scooters as they present an individual transport option that takes pressure off public transport and allows people to continue social distancing.”

“We’ve been experiencing tremendous growth in ANZ and the pandemic has made us fast track our plans,” he added.

Though Neuron Mobility currently does not operate in other Southeast Asian countries besides Singapore, Wang said it is “constantly evaluating opportunities across APAC.”

The new funding will be used to speed up Neuron Mobility’s expansion plans in Australia and New Zealand, where it claims to be the leading electric scooter rental operator. The company is currently present in nine locations, including Auckland, New Zealand, and Australian cities Adelaide, Brisbane, Darwin, Canberra and Townsville. Neuron Mobility plans to expand into five new cities over the next two months and part of that involves hiring 400 more people in Australia, New Zealand and Singapore. In addition to the Asia-Pacific, Neuron Mobility will also launch in Slough, it’s first location in the United Kingdom, by the end of this year.

Neuron Mobility’s research found that before the COVID-19 lockdowns in Australia, one in five of its users had never used an e-scooter before. But now Australian and New Zealand users have increased their average e-scooter trip distances by 23% to 2.6 kilometers, with the average duration of rides rising by 10% to more than 14 minutes. Neuron Mobility’s pricing is meant to be affordable depending on different markets. For example, in Brisbane, users pay one Australian dollar (about 68 U.S. cents) to begin a trip and then 38 Australian cents for each minute of the ride. Its e-scooters can go up to speeds of about 25 kilometers (15.5 miles) per hour.

Other “micromobility” companies, including Ofo, Reddy Go, Obike and Lime, have also offered rental services in Australia and New Zealand, but ran into trouble. Bike-sharing startups Ofo, Reddy Go and Obike withdrew from Australia in part because city councils were frustrated by bikes were being abandoned on sidewalks and in parks. Lime still operates in Australian cities, but in June, the Australian Competition and Consumer Commission found that the company failed to disclose safety issues with its Generation 2 scooters (in response, Lime said it would implement new compliance procedures and upgrade to its new Generation 3 scooter).

Wang said Neuron Mobility avoids those issues by strategically planning which cities it will launch in, instead of focusing on rapid expansion, partnering with city councils and “continually shifting and adapting to meet their needs.” Several of Neuron Mobility’s features, including geofencing to control where and how fast e-scooters can be ridden, and a “Helmet Lock” to make helmets available for all scooters, were developed after discussions with city councils. Neuron Mobility’s scooters, designed by the company specifically for renting, also use swappable batteries to decrease pollution.

After launching in Singapore, Neuron Mobility decided to focus on Australia and New Zealand because “both countries have cities that are highly suitable for micromobility in terms of infrastructure and regulations,” Wang said. City councils have also “been keen to push the boundaries of what can be done with technology to make programs better and safer and that really suits our way of thinking.”

 

Philippines payment processing startup PayMongo lands $12 million Series A led by Stripe

Stripe has led a $12 million Series A round in Manila-based online payment platform PayMongo, the startup announced today.

PayMongo, which offers an online payments API for businesses in the Philippines, was the first Filipino-owned financial tech startup to take part in Y Combinator’s accelerator program. Y Combinator and Global Founders Capital, another previous investor, both returned for the Series A, which also included participation from new backer BedRock Capital.

PayMongo partners with financial institutions, and its products include a payments API that can be integrated into websites and apps, allowing them to accept payments from bank cards and digital wallets like GrabPay and GCash. For social commerce sellers and other people who sell mostly through messaging apps, the startup offers PayMongo Links, which buyers can click on to send money. PayMongo’s platform also includes features like a fraud and risk detection system.

In a statement, Stripe’s APAC business lead Noah Pepper said it invested in PayMongo because “we’ve been impressed with the PayMongo team and the speed at which they’ve made digital payments more accessible to so many businesses across the Philippines.”

The startup launched in June 2019 with $2.7 million in seed funding, which the founders said was one of the largest seed rounds ever raised by a Philippines-based fintech startup. PayMongo has now raised a total of almost $15 million in funding.

Co-founder and chief executive Francis Plaza said PayMongo has processed a total of almost $20 million in payments since launching, and grown at an average of 60% since the start of the year, with a surge after lockdowns began in March.

He added that the company originally planned to start raising its Series A in in the first half of next year, but the growth in demand for its services during COVID-19 prompted it to start the round earlier so it could hire for its product, design and engineering teams and speed up the release of new features. These will include more online payment options; features for invoicing and marketplaces; support for business models like subscriptions; and faster payout cycles.

PayMongo also plans to add more partnerships with financial service providers, improve its fraud and risk detection systems and secure more licenses from the central bank so it can start working on other types of financial products.

The startup is among fintech companies in Southeast Asia that have seen accelerated growth as the COVID-19 pandemic prompted many businesses to digitize more of their operations. Plaza said that overall digital transactions in the Philippines grew 42% between January and April because of the country’s lockdowns.

PayMongo is currently the only payments company in the Philippines with an onboarding process that was developed to be completely online, he added, which makes it attractive to merchants who are accepting online payments for the first time. “We have a more efficient review of compliance requirements for the expeditious approval of applications so that our merchants can use our platform right away and we make sure we have a fast payout to our merchants,” said Plaza.

If the momentum continues even as lockdowns are lifted in different cities, that means the Philippine’s central bank is on track to reach its goal of increasing the volume of e-payment transactions to 20% of total transactions in the country this year. The government began setting policies in 2015 to encourage more online payments, in a bid to bolster economic growth and financial inclusion, since smartphone penetration in the Philippines is high, but many people don’t have a traditional bank account, which often charge high fees.

Though lockdown restrictions in the Philippines have eased, Plaza said PayMongo is still seeing strong traction. “We believe the digital shift by Filipino businesses will continue, largely because both merchants and customers continue to practice safety measures such as staying at home and choosing online shopping despite the more lenient quarantine levels. Online will be the new normal for commerce.”

WeWork sells majority stake in Chinese entity, seeks localization

Four years after its foray into the Chinese market followed by rapid and cash-hemorrhaging expansion, WeWork decided to wind down its involvement in the country.

WeWork’s Chinese unit has secured a $200 million investment led by Shanghai-based equity firm Trustbridge Partners, which first backed WeWork China in its Series B round in 2018, the American co-working giant announced. What the release didn’t emphasize is that the latest financing effectively makes Trustbridge Partners the controlling shareholder, leaving WeWork with a minority stake in its Chinese entity.

The investment marks WeWork China’s transition from a subsidiary of a multinational into a Chinese-owned company — with a globally recognized brand, sort of like franchising.

WeWork China will continue its close cooperation with WeWork’s global headquarters to “ensure the consistency of the WeWork brand and satisfication of global members and employees,” a spokesperson said in a statement to TechCrunch.

Other changes are already underway, though. There have been layoffs as part of the sale and “many things remain uncertain,” said the person with knowledge of the matter. WeWork China declined to comment on the matter.

WeWork arrived in China at the height of the country’s co-working boom. Its brand, service and chic design have long attracted well-financed startups and open-minded big corps. Since 2016, more than 100 WeWork spaces have sprung up across 12 cities in China, including dozens it acquired from local rival Naked Hub. It now claims 65,000 members in the country.

It’s also launched a range of initiatives in China, including an on-demand service for customers who don’t want to commit to long-term leases, which could help drive in more revenue.

Globally, WeWork serves 612,000 members in 843 offices across 38 countries. China accounts for roughly one-eight of its locations, down from a share of one-sixth in 2018.

WeWork China is not only competing with cheaper, home-grown alternatives — both private and government-subsidized — but also dealing with a weakening economy in COVID-19 times and uncertain U.S.-China relations. Relinquishing operational control in a cash-burning market seems logical, given all the troubles it already faces back home.

Ahead of its planned initial public offering, which was later postponed, WeWork said trade policy uncertainty could have an adverse impact on its business. It also highlighted China, a lower-priced market, as a drag on its profit margin.

Following the investment, Trustbridge Partners will launch an extensive localization makeover for WeWork China, from “decision-making and management, product and business, through to operations and productivity,” said the WeWork China representative. The new owner will also seek partnerships with local communities, real estate firms and Chinese enterprises during the process.

WeWork China gets a new boss as a result of the sale. Michael Jiang, ann operating partner at Trustbridge Partners, will serve as the acting chief executive. Jiang was previously a senior vice presidnet at Meituan, China’s food delivery and on-demand services giant.

China’s electric carmaker WM Motor pulls in $1.47 billion Series D

Chinese electric vehicle startup WM Motor just pocketed an outsize investment to fuel growth in a competitive landscape increasingly coveted by foreign rival Tesla. The five-year-old company raised 10 billion yuan ($1.47 billion) in a Series D round, it announced on Tuesday, which will pay for research and development, branding, marketing and expansion of sales channel.

WM Motor, backed by Baidu and Tencent, is one of the highest funded EV startups in China alongside NIO, Xpeng and Li Auto, all of which have gone public in New York. With its latest capital boost, WM Motor could be gearing up for an initial public offering. As Bloomberg’s sources in July said, the company was weighing a listing on China’s Nasdaq-style STAR board as soon as this year.

Days before its funding news, WM Motor unveiled its key partners and suppliers: Qualcomm Snapdragon’s cockpit chips will power the startup’s in-cabin experience; Baidu’s Apollo autonomous driving system will give WM vehicles self-parking capability; Unisplendour, rooted in China’s Tsinghua University, will take care of the hardware side of autonomous driving; and lastly, integrated circuit company Sino IC Leasing will work on “car connectivity” for WM Motor, whatever that term entails.

It’s not uncommon to see the new generation of EV makers seeking external partnerships given their limited experience in manufacturing. WM Motor’s rival Xpeng similarly works with Blackberry, Desay EV and Nvidia to deliver its smart EVs.

WM Motor was founded by automotive veteran Freeman Shen, who previously held executive positions at Volvo, Fiat and Geely in China.

The startup recently announced an ambitious plan for the next 3-5 years to allocate 20 billion yuan ($2.95 billion) and 3,000 engineers to work on 5G-powered smart cockpits, Level-4 driving and other futuristic auto technologies. That’s a big chunk of the startup’s total raise, which is estimated to be north of $3 billion, based on Crunchbase data and its latest funding figure.

Regional governments are often seen rooting for companies partaking in China’s strategic industries such as semiconductors and electric cars. WM Motor’s latest round, for instance, is led by a state-owned investment platform and state-owned carmaker SAIC Motor, both based in Shanghai where the startup’s headquarters resides. The city is also home to Tesla’s Gigafactory where the American giant churns out made-in-China vehicles.

In July, the Chinese EV upstart delivered its 30,000th EX5 SUV vehicle, which comes at about $22,000 with state subsidy and features the likes of in-car video streaming and air purification. The company claimed that parents of young children account for nearly 70% of its customers.

Unity Software has strong opening, gaining 31% after pricing above its raised range

Whoever said you can’t make money playing video games clearly hasn’t taken a look at Unity Software’s stock price.

On its first official day of trading, the company rose more than 31%, opening at $75 per share before closing the day at $68.35. Unity’s share price gains came after last night’s pricing of the company’s stock at $52 per share, well above the range of $44 to $48 which was itself an upward revision of the company’s initial target.

Games like “Pokémon GO” and “Iron Man VR” rely on the company’s software, as do untold numbers of other mobile gaming applications that use the company’s toolkit for support. The company’s customers range from small gaming publishers to large gaming giants like Electronic Arts, Niantic, Ubisoft and Tencent.

Unity’s IPO comes on the heels of other well-received debuts, including Sumo Logic, Snowflake and JFrog .

TechCrunch caught up with Unity’s CFO, Kim Jabal, after-hours today to dig in a bit on the transaction.

According to Jabal, hosting her company’s roadshow over Zoom had some advantages, as her team didn’t have to focus on tackling a single geography per day, allowing Unity to “optimize” its time based on who the company wanted to meet, instead, of say, whomever was free in Boston or Chicago on a particular Tuesday morning.

Jabal’s comments aren’t the first that TechCrunch has heard regarding roadshows going well in a digital format instead of as an in-person presentation. If the old-school roadshow survives, we’ll be surprised, though private jet companies will miss the business.

Talking about the transaction itself, Jabal stressed the connection between her company’s employees, value  and their access to that same value. Unity’s IPO was unique in that existing and former employees were able to trade 15% of their vested holdings in the company on day one, excluding “current executive officers and directors,” per SEC filings.

That act does not seemed to have dampened enthusiasm for the company’s shares, and could have helped boost early float, allowing for the two sides of the supply and demand curves to more quickly meet close to the company’s real value, instead of a scarcity-driven, more artificial figure.

Regarding Unity’s IPO pricing, Jabal discussed what she called a “very data-driven process.” The result of that process was an IPO price that came in above its raised range, and still rose during its first day’s trading, but less than 50%. That’s about as good an outcome as you can hope for in an IPO.

One final thing for the SaaS nerds out there. Unity’s “dollar-based net expansion rate” went from very good to outstanding in 2020, or in the words of the S-1/A:

Our dollar-based net expansion rate, which measures expansion in existing customers’ revenue over a trailing 12-month period, grew from 124% as of December 31, 2018 to 133% as of December 31, 2019, and from 129% as of June 30, 2019 to 142% as of June 30, 2020, demonstrating the power of this strategy.

We had to ask. And the answer, per Jabal, was a combination of the company’s platform strength and how customers tend to use more of Unity’s services over time, which she described as growing with their customers. And the second key element was 2020’s unique dynamics that gave Unity a “tailwind” thanks to “increased usage, particularly in gaming.”

Looking at our own gaming levels in 2020 compared to 2019, that checks out.

This post closes the book on this week’s IPO class. Tired yet? Don’t be. Palantir is up next, and then Asana .

Homage announces strategic partnership with Infocom, one of Japan’s largest healthcare IT providers

Homage, a Singapore-based caregiving and telehealth company, has taken a major step in its global expansion plan. The startup announced today that it has received strategic investment from Infocom, the Japanese information and communications technology company that runs one of the largest healthcare IT businesses in the country. Infocom’s solutions are used by more than 13,000 healthcare facilities in Japan.

During an interview with TechCrunch that will air as part of Disrupt tomorrow, Homage co-founder and chief executive Gillian Tee said “Japan has one of the most ageing populations in the world, and the problem is that we need to start building infrastructure to enable people to be able to access the kind of care services that they need.” She added that Homage and Infocom’s missions align because the latter is also building a platform for caregivers in Japan, in a bid to help solve the shortage of carers in the country.

Homage raised a Series B earlier this year with the goal of entering new Asian markets. The company, which currently operates in Singapore and Malaysia, focuses on patients who need long-term rehabilitation or care services, especially elderly people. This makes it a good match for Japan, where more than one in five of its population is currently aged 65 or over. In the next decade, that number is expected to increase to about one in three, making the need for caregiving services especially acute.

The deal includes a regional partnership that will enable Homage to launch its services into Japan, and Infocom to expand its reach in Southeast Asia. Homage’s services include a caregiver-client matching platform and a home medical service that includes online consultations and house calls, while Infocom’s technology covers a wide range of verticals, including digital healthcare, radiology, pharmaceuticals, medical imaging and hospital information management.

In a statement about the strategic investment, Mototaka Kuboi, Infocom’s managing executive officer and head of its healthcare business division, said, “We see Homage as an ideal partner given the company’s unique cutting-edge technology and market leadership in the long-term care segment, and we aim to drive business growth not only in Homage’s core and rapidly growing market in Southeast Asia, but also regionally.”

Do Ventures launches $50 million fund for Vietnamese startups, backed by Naver, Vertex and other notable LPs

Vy Le and Dzung Nguyen, the founders and general partners of Do Ventures, an investment firm focused on early-stage Vietnamese startups

Vy Le and Dzung Nguyen, the founders and general partners of Do Ventures, an investment firm focused on early-stage Vietnamese startups

New investment firm Do Ventures announced today the first closing of its fund for Vietnamese startups, which is backed by several of Asia’s most notable institutional investors. Called Do Ventures Fund I, the investment vehicle has hit more than half of its $50 million target, with limited partners including Korean internet giant Naver; Sea, whose businesses include Garena and Shopee; Singapore-based venture capital firm Vertex Holdings; and Korean app developer Woowa Brothers.

Do Ventures was founded by general partners Nguyen Manh Dung, former CEO of CyberAgent Ventures Vietnam and Thailand, and Vy Hoang Uyen Le, previously a general partner at ESP Capital. Its first fund will focus on early-stage companies and invest in seed to Series B rounds.

Both of its founders have a long track record of working with Vietnamese startups. Nguyen was an early investor in companies including Tiki.vn, one of Vietnam’s largest online marketplaces; food delivery platform Foody.vn; and digital marketing company CleverAds. Before she became an investor, Le was a serial entrepreneur and served as chief executive officer at fashion e-commerce company Chon.vn and VinEcom, the e-commerce project launched by Vietnamese real estate conglomerate Vingroup.

In an email, Le told TechCrunch that Do Ventures Fund I is industry agnostic, but will structure its investments into two tiers. The first will consist of B2C platforms, including education, healthcare and social commerce, that serve younger users, and are addressing changes in consumer behavior caused by the COVID-19 pandemic. The second tier will include B2B platforms that can provide services for companies in the first tier, and allow them to expand regionally with SaaS solutions for data and e-commerce services.

Do Ventures’ founders say that between 2016 and 2019, the amount of startup funding in Vietnam grew eight-fold to $861 million last year. But there are still only a few funds that focus specifically on the country, which means early-stage Vietnamese startups often run into funding gaps.

One of the firm’s goals is to help founders weather the impact of COVID-19, so their companies can continue growing in spite of the pandemic.

“We hope tech startups can enable traditional businesses to digitize faster and better adapt to the new normal,” Le said. “For consumers, we hope tech startups can transform customer experience in all aspects of daily life, and bring more accessibility to consumers in remote areas.”

The firm will take a hands-on approach to its investments, helping companies develop new business models. Do Ventures plans to set up an automatic reporting system that collects data about how its portfolio companies are performing, which its general partners say will enable them support startups’ operations, including product development, business organization, supply chain development, and overseas expansion.

How one VC firm wound up with no-code startups as part of its investing thesis

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. 

Ready? Let’s talk money, startups and spicy IPO rumors.

How one VC firm wound up with no-code startups as part of its investing thesis

Throughout all the chaos of 2020’s economic upheaval in the startup world, I’ve worked to pay more attention to low-code and no-code services. The short gist of chats I’ve had with investors and founders and public company execs in the past few weeks is that market awareness of no-code/low-code terminology is starting to spread more broadly.

Why? Again, summarizing aggressively, it seems that the gap between what different business units need (marketing, say) and what in-house or external engineering teams are capable of providing is widening. This means there is more total pain in the market, hunting for a solution, often with a tooling budget in hand.

Enter no-code and low-code startups, and even big-company services alike that can help non-developers do more without having to beg for engineering inputs.

I spoke with Arun Mathew this week. He’s a partner at Accel, a venture firm that has invested in all sorts of companies that you’ve heard of — including Webflow, which raised a $72 million Series A last August that Mathew led for his firm. (More on the round here, and notes from TechCrunch on Webflow’s early days here, and here, if you are curious.)

More interesting than that single round is how Accel wound up building a thesis around no-code startups. According to Mathew, Accel had made large investments into companies like Qualtrics, for example, when they were already pretty big and had found product-market fit. That same general approach led to the Webflow deal last year.

At the time, Webflow “wasn’t really defining what they were doing as n- code, they just said ‘we have a very simple drag and drop UI, to build websites, and soon full web applications, very simply,’ ” he told TechCrunch. But, according to Mathew, what Webflow was doing “lined up really well” with the “rising movement of no-code.”

From there, Accel “made a couple [more no-code] investments in Europe where [it has] an early-stage team and a growth team,” along with a few more in India. In the investor’s view, some of the investing activity was “thesis driven because we think [no-code is] a really interesting theme,” but some of the deals “happened opportunistically” where Accel had found “really talented founders in the space that we thought was interesting, executing on a vision that we found appealing.”

In the “span of a year, year-and-a-half,” Accel totted up “seven or eight companies in this no-code space,” which over the last five or six quarters became “a real thesis” for the firm, Mathew said. Accel now has “a global team” of around a dozen people “spending a lot of our time in and around no-code” he added.

Apologies for the length there, but what Mathew said makes me feel a bit less behind. After dipping a toe into learning more about no-code services and tooling (and, yes, low-code as well) it felt somewhat like I was playing catch-up. But as I covered that Webflow round and have since started paying more attention to no-code as well, perhaps you and I are right on time.

(We also recently ran an investor survey on the no-code topic, so hit it up if you want more VC scribbles on the topic.)

Market Notes

For Market Notes this week, we have four things. First, riffs from chats with two public company execs about the software market, some public market stuff and then some neat Airbnb spend data by which I am confounded:

  • I spoke with Apple MDM company Jamf’s CFO Jill Putman this week, after her company reported its first set of earnings as a public company. I wanted to know a bit more about the education market — a hot topic here at TechCrunch, given outsized rounds and huge market demand — and the medical world.
  • Regarding the software market for education, Putman noted that schools are buying lots of hardware, and that software sales should follow. Our read from that is that the boom in education software is not going to slow for some time as schools work on reopening.
  • Ditto the medical market, where Jamf has found uptake as hospitals roll out hardware to patients and families thereof to facilitate all sorts of demand that COVID has engendered. (Hardware needs software, enter Jamf!)
  • Chatting with the CFO our key takeaway was that there are still sectors that could generate a continued COVID tailwind, even if not all Jamf customers fit that bill. For startups that did catch a wave, this is probably good news.
  • And then there was Yext, a company that helps other companies’ customers find accurate information about them around the Web, and has recently gotten into the search game. Yext launched at a TechCrunch conference back in 2009, which is a neat bit of history. Anyway, Yext is public company now and we wanted to chat about which industries are driving growth for the former startup, and how the general climate for software is for the company, so we got on Zoom with its CEO, Howard Lerman.
  • So, which sectors are accelerating from Yext’s perspective? Government, education (again), insurance and financial services. Let that guide your take on the health of various startups.
  • Turning to the business climate, Lerman had some notes: “I will tell you in Q2,” he said, “things came back a bit from Q1.” In what sense? Retention rates, for one, according to the CEO. A return to form is welcome, but Lerman did caution that some companies were slower to “pull the trigger on big deals.”
  • Lerman also said that his perspective on the macro-climate has bounced back as well from a local-minima set around 30 days ago.

Public company execs are pretty guarded in how they talk because they have to be. But what Putman and Lerman seemed to intimate is that economic damage — provided you are selling to business, and not individuals — seems more contained on a per-sector basis than I would have anticipated. And that there are some good things ahead, at least in a handful of hot sectors.

Opening our aperture a bit, some SaaS companies struggled this week to meet investor expectations, even as more companies added themselves to the IPO queue. It’s going to be very busy for a few quarters. (Speaking of which, you can find the good and bad from the new Sumo IPO filing here.)

The economy is still garbage for many, but at least for companies it’s improving. And on that note, some data regarding Airbnb. According to the folks over at Edison Trends, things are going better for the home-booking site than I would have guessed. Per the group:

  • Airbnb’s bookings recovery outstripped its traditional rivals, growing “32% week-over-week” from late April into early June.
  • And, most critically: “Airbnb spending in July was up 22% over the previous July, and spending the week of August 17 was 75% higher than the equivalent week in 2019.”

Wild, right? Perhaps that’s why Airbnb has filed to go public.

Various and Sundry

We’re a tiny bit short on space, so I’ll keep our V&S dose short this week to respect your time. Here’s what I couldn’t not share:

And with that, we are out of room. Hugs, fist bumps and good vibes, and thank you so much for reading this little newsletter on the weekends. It’s a treat to write, and I hope you like it.

Hit me up with notes at alex.wilhelm@techcrunch.com. (I don’t know if you reply to this email if I will get the response. But try it so that we can find out?)

Alex

The week’s biggest IPO news had nothing to do with Monday’s S-1 deluge

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. (You can sign up for the newsletter here!)

Ready? Let’s talk money, startups and spicy IPO rumors.

The week’s biggest IPO news had nothing to do with Monday’s S-1 deluge

During Monday’s IPO wave I was surprised to see Asana join the mix. 

After news had broken in June that the company had raised hundreds of millions in convertible debt, I hadn’t guessed that the productivity unicorn wouldn’t give us an S-1 in the very next quarter. I was contentedly wrong. But the reason why Asana’s IPO is notable isn’t really much to do with the company itself, though do take the time to dig into its results and history

What matters about Asana’s debut is that it appears set to test out a model that, until very recently, could have become the new, preferred way of going public amongst tech companies. 

Here’s what I mean: Instead of filing to go public, and raising money in a traditional IPO, or simply listing directly, Asana executed two, large, convertible debt offerings pre-debut, thus allowing it to direct list with lots of cash without having raised endless equity capital while private.

The method looked like a super-cool way to get around the IPO pricing issue that we’ve seen, and also provide a ramp to direct listing for companies that didn’t get showered with billions while private. (That Asana co-founder Dustin Moskovitz’s trust led the debt deal is simply icing on this particular Pop-Tart).

This brief column was going to be all about how we may see unicorns follow the Asana route in time, provided that its debt-powered direct listing goes well. But then the NYSE got permission from the SEC to allow companies to raise capital when they direct-list.

In short, some companies that direct-list in the future will be able to sell a bloc of shares at a market-set value that would have previously set their “open” price. So instead of flogging the stock and setting a price and selling shares to rich folks and then finding out what public investors would really pay, all that IPO faff is gone and bold companies can simply offer shares at whatever price the market will bear. 

All that is great and cool, but as companies will be able to direct-list and raise capital, the NYSE’s nice news means that Asana is blazing a neat trail, but perhaps not one that will be as popular as we had expected.

The NASDAQ is working to get in on the action. As Danny said yesterday on the show, this new NYSE method is going to crush traditional IPOs, provided that we’re understanding it during this, its nascent period.

Market Notes

Look, this week was bananas, and my brain is scrambled toast. You, like myself, are probably a bit confused about how it is only finally Saturday and not the middle of next week. But worry not, I have a quick roundup of the big stuff from our world. And, notes from calls with the COO of Okta and the CEO of Splunk, from after their respective earnings report: 

Over to our chats, starting with Okta COO and co-founder Frederic Kerrest:

  • Okta had a good quarter. But instead of noodling on just the numbers, we wanted to chat with its team about the accelerating digital transformation and what they are seeing in the market. 
  • On the SMB side, Kerrest reported little to no change. This is a bit more bullish than we anticipated, given that it seemed likely that SMB customers would have taken the largest hit from COVID.
  • Kerrest also told us some interesting stuff about how the wave of COVID-related spend has changed: “We actually have seen the COVID ‘go home and remote work very quickly’ [thing], we’ve actually seen that rush subside a little bit, because you know now we’re five months into [the pandemic], so they had to figure it out.”
  • This is a fascinating comment for the startup world
  • Okta is big and public and is going to grow fine for a while. Whatever. For smaller companies aka startups that were seeing COVID-related tailwinds, I wonder how common seeing “that rush subside a little bit” is. If it is very common, many startups that had taken off like a rocket could be seeing their growth come back to Earth.
  • And if they raised a bunch of money off the back of that growth at a killer valuation, they may have just ordered shoes that they’ll struggle to grow into.

And then there was new McLaren F-1 sponsor Splunk, data folks who are in the midst of a transition to SaaS that is seeing the firm double-down on building ARR and letting go of legacy incomes:

  • I spoke with CEO Doug Merritt, kicking off with a question about his use of the word “tectonic” regarding the shift to data-driven decisions from Splunk’s earnings report. (“As organizations continue to adapt to tectonic societal shifts brought on by COVID-19, one thing is constant: the power of data to radically transform business.”)
  • I wanted to know how far down the American corporate stack that idea went; are mid-size businesses getting more data-savvy? What about SMBs? Merritt was pretty bullish: “We’re getting to tectonic,” he said during our call, adding that before “it really was the Facebooks, the Googles, the Apples, the DoorDashes, [and] the LinkedIns that were using [Splunk].” But now, he said, even small restaurant chains are using data to better track their performance. 
  • Relating this back to the startup world, I’ve been curious if lots of stuff that you and I think is cool, like low-code business app development, will actually find as wide a footing in the market as some expect. Why? Because most small and medium-sized businesses are not tech companies at all. But if Merritt is right, then the CEO of Appian might be right as well about how many business apps the average company is going to have in a few years’ time.

And finally for Market Notes, my work BFF and IRL friend Ron Miller wrote about Box’s earnings this week, and how the changing world is bolstering the company. It’s worth a read. (Most public software companies are doing well, mind.)

Various and Sundry

We’re already over length, so I’ll have to keep our bits-and-bobs section brief. Thus, only the brightest of baubles for you, my friend:

And with that, we are out of room. Hugs, fist bumps and good vibes, 

Alex

Palantir and the great revenue mystery

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. You can subscribe to the newsletter here if you haven’t yet.

Ready? Let’s talk money, startups and spicy IPO rumors.

Palantir and the great revenue mystery

As I write to you on Friday afternoon, the Palantir S-1 has yet to drop, but TechCrunch did break some news regarding the impending filing and just how big the company actually is. Please forgive the block quote, but here’s our reporting:

In screenshots of a draft S-1 statement dated yesterday (August 20), Palantir is listed as generating revenues of roughly $742 million in 2019 (Palantir’s fiscal year is a calendar year). That revenue was up from $595 million in 2018, a gain of roughly 25%. […] Palantir lists a net loss of roughly $580 million for 2019, which is almost identical to its loss in 2018. The company listed a net loss percentage of 97% for 2018, improving to a loss of 78% for last year.

A few notes from this. First, those losses are flat icky. Palantir was founded in 2003 or 2004 depending on who you read, which means that it’s an old company. And it was running an effective -100% net margin in 2018? Yowza.

Second, what the flocking frack is that revenue number? Did you expect to see Palantir come in with revenues of less than $1 billion? If you did, well done. After a deluge of articles over the years discussing just how big Palantir had become, I was anticipating a bit more (more here for context). Here are two examples:

  • Reporting from TechCrunch that Palantir expected “more than $1 billion in contracts” in 2014
  • Reporting from Bloomberg that Palantir had “booked deals totaling $1.7 billion in 2015”

Notably, Palantir’s real revenue result, or one very close to it, made it into Business Insider this April. The reporting makes the company’s S-1 less of a climax and more of a denouement. But, hey, we’re still glad to have the filing.

The Exchange will have a full breakdown of Palantir’s numbers Monday morning, but I think what Palantir coverage over the years shows is that when companies decline to share specific revenue figures that are clear, just presume that what they do share is misleading. (ARR is fine, trailing revenue is fine, “contract” metrics are useless.)

Market Notes

The Exchange spent a lot of time digging into e-commerce venture capital results this week, including notes from some VCs about why e-commerce-focused startups aren’t raising as much as we might have guessed.

Overstock!

We got a chance to fire a question over to the CEO of Overstock.com on the matter, adding to what we learned from private investors on the same topic. So here’s the online retailer’s CEO Jonathan Johnson, answering our question on how many smaller vendors are signing up to sell on its platform during today’s e-comm boom:

We have had increased demand to sell on Overstock and we are adding new partners daily. To protect the customer experience, we have become more selective and have increased the requirements to become a selling partner on our site. Our customers’ experience is critical to our long-term success and if partners cannot perform to our operational standards, we do not allow them to sell on our site.

We care because Shopify and BigCommerce are stacking up new rev, and we were curious how widely the e-commerce step-change from major platforms extended. Seems like all of them are eating.

How today’s evolving economic landscape isn’t working out better for e-commerce-focused startups is still a surprise. Normally when the world changes rapidly, startups do well. This time it seems that Amazon and a few now-public unicorns are snagging most of the gains.

Airbnb!

Anyhoo, onto the Airbnb world; we have a few data points to share this week. According to Edison Trends data that was shared with us, here’s how Airbnb is doing lately:

  • Per Edison Trends, “Airbnb July spend was 22% higher than it had been in 2019” in the United States.
  • From the same source, Airbnb has seen U.S. spend rise around 10% week-over-week “increase in customer spending” since April 27th.

This explains why the company is prepping to go public sooner rather than later: The second-half of Q2 was a ramp back to normal for the company, and July was pretty good by the looks of it. If Airbnb is worth what it once was is not clear, but the company is certainly doing better than we might have expected it to. (More on the comeback here.)

For more on the big unicorn IPOs, I wrote a digest on Friday that should help ground you. I can say that with some confidence, as I wrote it to ground myself!

Various and Sundry

Finally some loose ends and other notes like an after-dinner amuse-bouche:

  • A PE deal caught our eye, namely that the Williams Formula 1 team has been sold to Dorilton Capital. We had two thoughts: First, who is that. And second, it’s all good so long as they make the car faster but still slower than Haas F1, the official team of this newsletter, I’ve just decided. (Note to F1 lawyers: I am kidding, please don’t sue.)
  • The folks at Sensor Tower sent over some fintech data this week that we tucked into our pocket for this newsletter. According to the data and analytics firm, “the five largest mobile payment apps saw their average monthly active users grow 41.5% year-over-year in 1H20 when compared to 1H19” for “Cash App, Venmo, PayPal, Zelle, and Google Pay.”
  • Now, we’ve covered fintech often on The Exchange because it matters. But we’ve mostly been covering the startup/unicorn side of things. The above growth rates for some of the incumbent-led apps was a surprise, with faster growth than we would have guessed.
  • If momentum from the majors is good or bad for startups, we leave to you to decide.
  • Robinhood raised more money on the back of its huge revenue gains.
  • Until the Palantir brouhaha, the lead story of our missive today was going to be about BlockFi, which we’re still working to understand. The crypto outfit just raised more money, so we got curious. I wound up chatting with the CEO on Twitter about, you know, what BlockFi is. Turns out it’s like a credit union, but in the crypto space. That seems fair enough. Credit unions work! Maybe this will, too! We have some questions into the company, the answers to which we might post if they are interesting. (The company has detractors, as well.)
  • made a bad bet.
  • The Exchange chatted with a number of VC firms this week, including Tribeca Venture Partners for the first time. We caught up with Brian Hirsch from the firm, who told us a bit about the SaaS market (doing better than anticipated pre-COVID thanks to “rocket fuel” from the accelerating digital transformation) and the future of New York and cities in general (going to be fine long-term). We’ll cut out the best bits from the chat for next week if we have time.

And we’ll wrap with a tiny note from Greg Warnock, managing director at Mercato via email about the late-stage venture capital market. We asked for “notes on current valuation trends, in particular re: ARR/run rate multiples.” Here’s what we heard back:

I think valuations are correlated with economic activity and certainly something like COVID would qualify, but it’s very much a lagging indicator. It takes a while for entrepreneurs’ expectations to shift. Once they feel like the economy has moved in a permanent way, they begin to rethink. The first thing that they experience a little bit more urgency. They start from a belief that they can raise money any time they want, from anyone they want. Soon they realize there are fewer investors in market, that those opportunities appear less frequently, and each one should be managed more carefully. From there they go to thinking about terms. They might have to be flexible around some terms or some construct. Finally, they go to just fundamentally thinking about valuation in terms of multiples.

Going back to my first comment about economic factors being a lagging indicator, COVID related shocks haven’t moved through the system yet. It will take something more like a year for all the expectations to shift. My experience is that a shift in the economy from an investor standpoint creates a flight to quality. Companies with lackluster performance are first to feel lack of options in fundraising and exits. High performing businesses are the last ones to experience a change in valuation multiples. It disproportionately affects average businesses more quickly and more dramatically than high quality businesses which may feel no significant effects.

Hugs, fist bumps and good vibes,

Alex

Almost everything you need to know about SPACs

Feeling as if you should better understand special purpose acquisition vehicles – or SPACS — than you do? You aren’t alone.

Like most casual observers, you’re probably already aware that Paul Ryan now has a SPAC, as does baseball executive Billy Beane and Silicon Valley stalwart Kevin Hartz. You probably know, too, that entrepreneur Chamath Palihapitiya seemed to kick off the craze around SPACS — blank-check companies that are formed for the purpose of merging or acquiring other companies — in 2017 when he raised $600 million for a SPAC. Called Social Capital Hedosophia Holdings, it was ultimately used to take a 49% stake in the British spaceflight company Virgin Galactic.

But how do SPACS come together in the first place, how they work exactly, and should you be thinking of launching one? We talked this week with a number of people who are right now focused on almost nothing but SPACs to get our questions — and maybe yours, too — answered.

First, why are these things suddenly spreading like weeds?

Kevin Hartz — who we spoke with after his $200 million blank-check company made its stock market debut on Tuesday — said their popularity ties in part to “Sarbanes Oxley and the difficulty in taking a company public the traditional route.”

Troy Steckenrider, an operator who has partnered with Hartz on his newly public company, said the growing popularity of SPACs also ties to a “shift in the quality of the sponsor teams,” meaning that more people like Hartz are shepherding these vehicles versus “people who might not be able to raise a traditional fund historically.”

Indeed, according to the investment bank Jefferies, 76% of last year’s SPACs were sponsored by industry executives who “typically have public company experience or have sold their prior business and are seeking new opportunities,” up from 65% in 2018 and 32% in 2017.

Don’t forget, too, that there are whole lot of companies that have raised tens and hundreds of millions of dollars in venture capital and whose IPO plans may have been derailed or slowed by the COVID-19 pandemic. Some need a relatively frictionless way to get out the door, and there are plenty of investors who would like to give them that push.

How does one start the process of creating a SPAC?

The process is really no different than a traditional IPO, explains Chris Weekes, a managing director in the capital markets group at the investment bank Cowen. “There’s a roadshow that will incorporate one-on-one meetings between institutional investors and the SPAC’s management team” to drum up interest in the offering.

At the end of it, institutional investors like mutual funds, private equity funds, and family offices buy into the offering, along with a smaller percentage of retail investors.

Who can form a SPAC?

Basically anyone who wants to create one and who can persuade shareholders to buy its shares.

These SPACs all seem to sell their shares at $10 apiece. Why?

Easier accounting? Tradition? It’s not entirely clear, though Weekes says $10 has “always been the unit price” for SPACs and continues to be, with the very occasional exception, such as with Bill Ackman’s Pershing Square Capital Management.

Last month it launched a $4 billion SPAC that sold units for $20 each.

Have SPACS changed structurally over the years?

Funny you should ask! This gets a little more technical, but when buying a unit of a SPAC, institutional investors typically get a share of common stock and a warrant or a fraction of a warrant. A warrant is security that entitles the holder to buy the underlying stock of the issuing company at a fixed price at a later date; warrants are used as deal sweeteners to keep investors involved with a company.)

Earlier in time, when a SPAC announced the company it planned to buy, institutional investors in the SPAC — who had to sign NDA-type agreements — would vote yes to the deal if they wanted to keep their money in, and no to the deal if they wanted to redeem their shares and get out. But sometimes investors would team up and threaten to torpedo the deal if they weren’t given founder shares or other preferential treatment. (“There was a bit of bullying in the marketplace,” says Weekes.)

Regulators have since separated the right to vote and the right to redeem one’s shares, meaning investors today can vote ‘yes’ or ‘no’ and still redeem their capital, making the voting process more perfunctory and enabling most deals to go through as planned.

Does that mean SPACs are more safe? They haven’t had the best reputation historically.

They’ve “already gone through their junk phase,” suspects Albert Vanderlaan, an attorney in the tech companies group of Orrick, the global law firm. “In the ’90s, these were considered a pretty junky situation,” he says. “They were abused by foreign investors. In the early 2000s, they were still pretty disfavored.” Things could turn on a dime again, he suggests, but over the last couple of years, the players have changed for the better, which is making a big difference.

How much of the money raised does a management team like Hartz and Steckenrider keep?

The rough rule of thumb is 2% of the SPAC value, plus $2 million, says Steckenrider. The 2% roughly covers the initial underwriting fee; the $2 million then covers the operating expenses of the SPAC, from the initial cost to launch it to legal preparation, accounting, and NYSE or NASDAQ filing fees. It’s also “provides the reserves for the ongoing due diligence process,” he says.

Is this money like the carry that VCs receive, and do a SPAC’s managers receive it no matter how the SPAC performs?

Yes and yes.

Here’s how Hartz explains it: “On a $200 million SPAC, there’s a $50 million ‘promote’ that is earned at $10 a share if the transaction consummates at $10 a share,” which, again, is always the traditional size of a SPAC. “But if that company doesn’t perform and, say, drops in half over a year or 18-month period, then the shares are still worth $25 million.”

Hartz calls “egregious,” though he and Steckenrider formed their SPAC in exactly the same way, rather than structure it differently.  

Says Steckrider, “We ultimately decided to go with a plain-vanilla structure [because] as a first-time spec sponsor, we wanted to make sure that the investment community had as as easy as a time as possible understanding our SPAC. We do expect to renegotiate these economics when we go and do the [merger] transaction with the partner company,” he adds.

From a mechanics standpoint, what happens right after SPAC has raised its capital?

The money is moved into a blind trust until the management team decides which company or companies it wants to acquire. Share prices don’t really move much during this period as no investors know (or should know, at least) what the target company will be yet.

Does a $200 million SPAC look to acquire a company that’s valued at around the same amount?

No. According to law firm Vinson & Elkins, there’s no maximum size of a target company — only a minimum size (roughly 80% of the funds in the SPAC trust).

In fact, it’s typical for a SPAC to combine with a company that’s two to four times its IPO proceeds in order to reduce the dilutive impact of the founder shares and warrants.

In the case of Hartz’s and Steckenrider’s SPAC (it’s called “one”), they are looking to find a company “that’s approximately four to six times the size of our vehicle of $200 million,” says Harzt, “so that puts us around in the billion dollar range.”

Where does the rest of the money come from if the partner company is many times larger than the SPAC itself?

It comes from PIPE deals, which, like SPACs, have been around forever and come into and out of fashion. These are literally “private investments in public equities” and they get tacked onto SPACs once management has decided on the company with which it wants to merge.

It’s here that institutional investors get different treatment than retail investors, which is why some industry observers are wary of SPACs.

Specifically, a SPAC’s institutional investors — along with maybe new institutional investors that aren’t part of the SPAC — are told before the rest of the world what the acquisition target is under confidentiality agreements so that they can decide if they want to provide further financing for the deal via a PIPE transaction.

The information asymmetry seems unfair. Then again, they’re restricted not only from sharing information but also from trading the shares for a minimum of four months from the time that the initial business combination is made public. Retail investors, who’ve been left in the dark, can trade their shares any time.

How long does a SPAC have to get all of this done?

It varies, but the standard seems to be around two years.

What do you call that phase of the deal after the partner company has been identified and agrees to merge, but before the actual combination?

That’s called De-SPACing and during this stage of things, the SPAC has to obtain shareholder approval through that vote we talked about, followed by a review and commenting by the SEC.

Toward the end of this stretch — which can take 12 to 18 weeks — bankers aretaking out the new operating team and, in the style of a traditional roadshow, getting the story out to analysts who cover the segment so when the combined new company is revealed, it receives the kind of support that keeps public shareholders interested in a company.

Will we see more people from the venture world like Palihapitiya and Hartz start SPACs?

So far, says Weekes, he’s seeing less interest from VCs in sponsoring SPACs and more interest from them in selling their portfolio companies to a SPAC. As he notes, “Most venture firms are typically a little earlier stage investors and are private market investors, but there’s an uptick of interest across the board, from PE firms, hedge funds, long-only mutual funds.”

That might change if Hartz has anything to do with it. “We’re actually out in the Valley, speaking with all the funds and just looking to educate the venture funds,” he says. “We’ve had a lot of requests in. We think we’re going to convert [famed VC] Bill Gurley from being a direct listings champion to the SPAC champion very soon.”

In the meantime, Hartz says his SPAC doesn’t have a specific target in mind yet. But he does takes issue with the word “target,” preferring instead “partner” company.

“A target sounds like we’re trying to assassinate somebody.”

InfraDigital helps Indonesian schools digitize tuition and enrollment

In Indonesia, about half of adults are “underbanked,” meaning they don’t have access to bank accounts, credit cards and other traditional financial services. A growing list of tech companies are working on solutions, from Payfazz, which operates a network of financial agents in small towns, to digital payment services from GoJek and Grab. As a result, financial inclusion is increasing for consumers and small businesses in Southeast Asia’s largest country, but one group remains underserved: schools.

InfraDigital was founded in 2018 by chief executive officer Ian McKenna and chief operating officer Indah Maryani. Both have backgrounds in financial tech, and their platform enables parents to pay school tuition with the same digital services they use for electricity bills or online shopping. The startup currently serves about 400 schools and recently raised a Series A led by AppWorks.

Many Indonesian schools still rely on cash payments, which are often delivered by kids to their teachers.

“My kid had just started school, and one day I spotted my wife giving him an envelope full of cash for tuition. He was only three years old,” McKenna said. “That triggered my curiosity about how these financial systems work.”

To give parents an easier alternative, InfraDigital, which is registered with Indonesia’s central bank, partners with banks, convenience store chains like Indomaret, online wallets and digital payment services like GoPay to allow them to send tuition money online.

“The way you pay your electricity bill, it’s likely that your school is already there, regardless of whether you have a bank account or live in a really remote place” where many people make cash payments for services at convenience stores, McKenna said. The startup is now working on a system for schools in areas that don’t have access to convenience store chains and banks.

Before building InfraDigital’s network, McKenna and Maryani had to understand why many schools still rely on cash payments and paper ledgers to manage tuition.

“Banks have been trying to tap into the education market for a long time, 12 to 15 years probably, but no one has become the biggest bank for schools,” said Maryani. “The reason behind that is because they come in with their own products and they don’t try to resolve the issues schools are facing. Since they are focused on the consumer side, they don’t really see schools or other offline businesses as their customers, and there is a lot of customization that they need to do.”

For example, a school might have 2,000 students and charge each of them about USD $10 a month in school fees. But they also collect separate payments for books, uniforms, and building fees. InfraDigital’s founders say schools typically send out an average of about 2.5 invoices a month.

Digitizing payments also makes it easier for schools to track their finances. InfraDigital provides its clients with a backend application for accounting and enrollment management. It automatically tracks tuition payments as they come in.

“People don’t get paid that much and they are ridiculously busy taking care of thousands of kids. It’s really, really tough,” McKenna said. “When you’re giving them a solution, it’s not about features, it’s not about tools, it’s about the practicalities of their day-to-day life and how we are going to assist them with it. So you remove that burden from them.”

During the COVID-19 pandemic, which resulted in movement restriction orders in different areas of Indonesia, InfraDigital’s founders say the platform was able to forecast trends even before schools officially closed. They started surveying schools in their client base, and sent back data to help them forecast how school closures would affect their income.

“From the school’s perspective, it’s a really damaging situation, with 30% to 60% income drops. Teachers don’t get paid. If the economy goes down, parents at lower-income schools, which are a big part of our client base, won’t be able to pay,” McKenna said. “It’s built into the model, and we’ll continue seeing that however long the economic impact of COVID-19 lasts.”

YC-backed Statiq wants to bootstrap India’s EV charging network

Electric vehicles (EVs) are spreading throughout the world. While Tesla has drawn the most attention in the United States with its luxurious and cutting-edge cars, EVs are becoming a mainstay in markets far away from the environs of California.

Take India for instance. In the local mobility market, two- and three-wheel vehicles are starting to emerge as a popular option for a rapidly expanding middle class looking for more affordable options. EV versions are popular thanks to their reduced maintenance costs and higher reliability compared to gasoline alternatives.

Two-wheeled electric scooters are a fast-growing segment of India’s mobility market.

There’s just one problem, and it’s the same one faced by every country which has attempted to convert from gasoline to electric: how do you build out the charging station network to make these vehicles usable outside a small range from their garage?

It’s the classic chicken-and-egg problem. You need EVs in order to make money on charging stations, but you can’t afford to build charging stations until EVs are popular. Some startups have attempted to build out these networks themselves first. Perhaps the most famous example was Better Place, an Israeli startup that raised $800 million in venture capital before dying from negative cash flow back in 2013. Tesla has attempted to solve the problem by being both the chicken and egg by creating a network of Superchargers.

That’s what makes Statiq so interesting. The company, based in the New Delhi suburb of Gurugram, is bootstrapping an EV charging network using a multi-revenue model that it hopes will allow it to avoid the financial challenges that other charging networks have faced. It’s in the current Y Combinator batch and will be presenting at Demo Day later this month.

Akshit Bansal and Raghav Arora, the company’s co-founders, worked together previously as consultants and built a company for buying photos online, eventually reaching 50,000 monthly actives. They decided to make a pivot — a hard pivot really — into EVs and specifically charging equipment.

Statiq founders Raghav Arora and Akshit Bansal. Photos via Statiq

“We felt the need to do something about the climate because we were living in Delhi and Delhi is one of the most polluted cities in the world, and India is home to a lot of the polluted cities in the world. So we wanted to do something about it,” Bansal said. As they researched the causes of pollution, they learned that automobile exhaust represented a large part of the problem locally. They looked at alternatives, but EV charging stations remain basically non-existent across the country.

Thus, they founded Statiq in October 2019 and officially launched this past May. They have installed more than 150 charging stations in Delhi, Bangalore, and Mumbai and the surrounding environs.

Let’s get to the economics though, since that to me is the most fascinating part of their story. Statiq as I noted has a multi-revenue model. First, end users buy a subscription from Statiq to use the network, and then users pay a fee per charging session. That session fee is split between Statiq and the property owner, giving landlords who install the stations an incremental revenue boost.

A Statiq charging station. Photo via Statiq

When it comes to installation, Statiq has a couple of tricks up its sleeves. First, the company’s charging equipment — according to Bansal — costs roughly a third of the equivalent cost of U.S. equipment. That makes the base technology cheaper to acquire. From there, the company negotiates installations with landlords where the landlords will pay the fixed costs of installation in exchange for that continuing session charge fee.

On top of all that, the charging stations have advertising on them, offering another income stream particularly in high-visibility locations like shopping malls which are critical for a successful EV charging network.

In short, Statiq hasn’t had to outlay capital in order to put in place their charging equipment — and they were able to bootstrap before applying to YC earlier this year. Bansal said the company had dozens of charging stations and thousands of paid sessions on its platform before joining their YC batch, and “we are now growing 20% week-over-week.”

What’s next? It’s all about deliberate scaling. The EV market is turning on in India, and Statiq wants to be where those cars are. Bansal and his co-founder are hoping to ride the wave, continuing to build out critical infrastructure along the way. India’s government will likely continue to help: its approved billions of dollars in incentives for EVs and for charging stations, tipping the economics even further in the direction of a clean car future.

Singaporean startup Partipost gets $3.5 million to let anyone become an influencer

Partipost, a Singapore-based marketing startup that lets anyone with a social media profile sign up for influencer campaigns, has raised $3.5 million in new funding. The round was led by SPH Ventures, the investment arm of publisher Singapore Press Holdings, with participation from Quest Ventures and other investors.

The funding will be used to grow Partipost’s current operations in Singapore, Indonesia and Taiwan, and expand into Vietnam, the Philippines and Malaysia, other Southeast Asian markets with heavy social media usage. Since launching its mobile app in 2018, Partipost says it has added about 200,000 influencers to its platform, and that over the past 12 months, it has helped conduct 2,500 social media marketing campaigns for more than 850 brands, including Adidas, Arnott’s, Red Bull, Chope and Gojek.

According to benchmark report released in March by Influencer Marketing Hub, the influencer marketing industry is expected to be worth about $9.7 billion in 2020, with companies spending increasing amounts on social media campaigns and working with more “micro-influencers.” To serve them, the report said that more than 380 new influencer marketing agencies and platforms were launched last year, joining a roster of companies that already include AspireIQ, Upfluence, BuzzSumo, SparkToro and Inzpsire.me, to name just a few examples.

While most of these companies focus on helping brands identify the influencers with the widest social media reach, Partipost lets anyone sign up to take part in a campaign.

“Partipost’s main difference is that we believe that everyone can be an influencer,” founder and chief executive officer Jonathan Eg told TechCrunch. “Even if you have 200 followers, you can be one. We want to create a new market that we believe will be the future. Everyone can post on social media, write a review or give some feedback and be paid for it.”

“We want to empower everyone to monetize off their own data and influence and not just allow the big tech companies to do so,” he added.

Aspiring influencers browse brand campaigns on Partipost’s app and apply to take part by submitting a post draft. If the brand approves it, the user can then go ahead and post it on their social media profiles.

The amount of cash they earn is based on how much engagement each post receives. According to the company’s website, most campaigns require a minimum of 200 followers or more, and successful users can earn an average of $5 to $150 per campaign, depending on the brand’s payout structure.

One of Partipost’s selling points for brands is that it enables them to sign up thousands of influencers for a campaign in a single day, help them react quickly to online trends. Part of the funding will also be used to build data tools to help brands match campaigns with Partipost users more efficiently. The company says it expects to increase its base of aspiring influencers to one million within the next 18 months.

As part of the funding, SPH Ventures chief executive officer Chua Boon Ping will join Partipost’s board, while Quest Ventures partner Jeffrey Seah will become an observer.

In a media statement, Chua said, “Social influencer marketing is one of the fastest growing segments within Digital marketing. Hence, we are very excited to lead Partipost’s Series A round to further accelerate its growth. We are impressed by Partipost’s strong traction in Singapore, Indonesia and Taiwan as a young startup and look forward to partnering it to scale to new markets.”

Vietnamese online pharmaceutical marketplace BuyMed raises $2.5 million

BuyMed, a Vietnamese startup that wants to fix Southeast Asia’s complex pharmaceutical distribution networks, announced today it has raised $2.5 million in pre-Series A funding. Investors include Sequoia Capital India’s Surge early-stage accelerator program, and Genesia Ventures. Returning investor Cocoon Capital also participated.

Founded in 2018, BuyMed operates Thuocsi.vn, a pharmaceutical distribution platform in Vietnam. Over the past 12 months, the company says it has tripled its annual revenue, and now plans to add new product lines, including cosmetics, medical devices, supplements and medical services, with the goal of becoming a “one-stop marketplace” for supplies needed by healthcare providers in Southeast Asia.

BuyMed verifies suppliers on its platform, improving safety and reducing the risk of medications making its way into the grey market (or unofficial distribution channels). The startup currently has 700 verified suppliers, distributors and manufacturers on its platform, who serve over 7,000 healthcare providers.

In a press statement, Genesia Ventures general partner Takahiro Suzuki, said, “There is still a tremendous opportunity for growth and improvement in Vietnam’s pharmaceutical supply chain and we believe that BuyMed’s founders have the experience, execution and operational management necessary to tackle this problem.”

BuyMed Co-founder and CEO Peter Nguyen formerly served as a consultant for companies like Eli Lilly, Roche and Siemens, helping them create more efficient operations and supply chains.

Nguyen told TechCrunch that there are no major multi-brand distributors in Vietnam, so most pharmaceutical manufacturers and brands need to set up their own networks. This means the process of getting medications and other pharmaceutical supplies to healthcare providers is highly-fragmented.

There are roughly 200 domestic manufacturers in Vietnam, in addition to imported brands, and their products are handled by over 3,000 distributors. While about 2% of pharmacies in Vietnam are part of a franchise or chain, the vast majority are independent. This means distributors need to serve over 40,000 independent pharmacies and about 5,000 independent clinics.

Nguyen added that fragmentation is similar in many other Southeast Asian markets, giving BuyMed an opportunity to expand across the region.

Thuocsi.vn’s usage has grown over the last 60 days, as more Vietnamese pharmacies source from online channels. In response to the COVID-19 pandemic, BuyMed has expanded its platform so more of its partners can sell online, and added safety measures like frequent warehouse and office sanitization and a no-contact drop-off and cash collection system.

Sprout.ai raises $2.5M to speed up insurance claims

Sprout.ai, an insurtech incubated at London’s Imperial College that is applying AI to insurance claims,, has raised $2.5 million in additional seed funding. Leading the round is Amadeus Capital Partners, with participation from Playfair Capital, and Techstars.

Founded in 2018, Sprout.ai has developed AI-based software that it says enables insurance claims to be settled within “just 24 hours”. Specifically, it uses natural language processing and optical character recognition to understand unstructured insurance claim data, and then combines this with real-time external data such as weather, geolocation, business and medication information, to automate claims or escalate them for further human analysis.

“Our mission is to enable insurers to pay out successful claims inside 24 hours,” Sprout.ai co-founder and CEO Niels Thone tells me. “Currently the average claims settlement time in the U.K. is 25 days. This is mainly caused by a lack of information at the start of the claims journey and a lot of manual touch points throughout the journey. This causes two problems: bad customer experiences and high operational costs for claims teams”.

To remedy this, insurance companies can plug their existing systems into Sprout.ai’s “Contextual AI” solution, which provides what Thone says is a much more complete data capture at the start of the claims process, and then is able to automatically validate incoming claims and predict the next necessary steps in the process.

This sees the big bulk of claims sent straight through for processing, resulting in them being settled in record time. “This way claim handlers only have to focus on the really complex claims, where their specialised skill set is actually needed,” says the Sprout.ai CEO.

“The secret lies in accessing the underlying unstructured data, such as pdfs, images, documents, etc.,” he adds. “This is where all the actual ‘data gold’ or, as we call it, ‘data sprouts’ lie, so it’s pertinent that you have the means to extract and structure this data as well as leverage it for further claims verification. Sprout.ai has developed proprietary algorithms in both the OCR and NLP fields to enable very accurate and fast extraction of this underlying data”.

Asked about Sprout.ai’s revenue model, Thone says the insurtech operates via a transactional model, whereby it charges a fee per claim processed. “The fee is volume dependent, which means that the more claims we process for a client, the cheaper the price per claim becomes,” he explains.

Meanwhile, Sprout.ai, which was previously called BlockClaim, says it will use the investment to further build out its data science and engineering team, and expand its sales operations. The U.K. startup is also making plans for U.S. expansion.