Challenger bank Bunq is adding a new feature that lets you donate to charities directly from the app. In addition to that, Bunq is also in the process of redesigning its app. The company is launching a public beta test to get feedback from its users.
Bunq has chosen a different approach, as you can create your own donation campaigns in the app. As long your local charity has an IBAN number, you can add it to Bunq’s donation feature. You can even add a local business in case you want to help them stay in business.
You can then invite other people to donate to your charities. You can also track the total amount of your donations, as well as the total donations from the entire Bunq user base.
The company has also been working on the third major version of the app. In order to test it before the public release, Bunq is launching a public beta program. The first build will roll out in the coming weeks.
In order to simplify navigation, Bunq has tried to remove clutter by focusing on one main button on each page. The app will be divided in four main tabs.
The first tab, called “Me,” will feature all your personal information — personal bank accounts, savings goals, etc. On the second tab, called “Us,” you can see information about Bunq, such as total investments and total donations. The third tab features your profile information.
Finally, the fourth tab is a dedicated camera button. It lets you scan invoices and receipts, which could be particularly useful for business customers. I’m not sure a lot of people use that feature, but things could still change before the final release.
The race to automate vehicles on China’s roads is heating up. Didi, the Uber of China, announced this week an outsized investment of over $500 million in its freshly minted autonomous driving subsidiary. Leading the round — the single largest fundraising round in China’s autonomous driving sector — is its existing investor Softbank, the Japanese telecom giant and startup benefactor that has also backed Uber.
As China’s largest ride-hailing provider with mountains of traffic data, Didi clearly has an upper hand in developing robotaxis, which could help address driver shortage in the long term. But it was relatively late to the field. In 2018, Didi ranked eighth in kilometers of autonomous driving tests carried out in Beijing, far behind search giant Baidu which accounted for over 90% of the total mileage that year.
It’s since played aggressive catchup. Last August, it spun off its then three-year-old autonomous driving unit into an independent company to focus on R&D, building partnerships along the value chain, and promoting the futuristic technology to the government. The team now has a staff of 200 across its China and U.S. offices.
As an industry observer told me, “robotaxis will become a reality only when you have the necessary operational skills, technology and government support all in place.”
Didi is most famous for its operational efficiency, as facilitating safe and pleasant rides between drivers and passengers is no small feat. The company’s leadership hails from Alibaba’s legendary business-to-business sales team, also known as the “Alibaba Iron Army” for its ability in on-the-ground operation.
The autonomous segment can also benefit from Didi’s all-encompassing reach in the mobility industry. For instance, it’s working to leverage the parent company’s smart charging networks, fleet maintenance service and insurance programs for autonomous fleets.
The fresh capital will enable Didi’s autonomous business to improve safety — an area that became a focal point of the company after two deadly accidents — and efficiency through conducting R&D and road tests. The financing will also allow it to deepen industry cooperation and accelerate the deployment of robotaxi services in China and abroad.
Over the years, Didi has turned to traditional carmakers for synergies in what it dubs the “D-Alliance,” which counts more than 31 partners. It has applied autonomous driving technology to vehicles from Lincoln, Nissan, Volvo, BYD, to name a few.
Didi has secured open-road testing licenses in three major cities in China as well as California. It said last August that it aimed to begin picking up ride-hailing passengers with autonomous cars in Shanghai in a few months’ time. It’s accumulated 300,000 kilometers of road tests in China and the U.S. as of last August.
Belvo, a Latin American fintech startup which launched just 12 months ago, has already snagged funding from two of the biggest names in North and South American venture capital.
The company is aiming to expand the reach of its service that connects mobile applications in Mexico and Colombia to a customer’s banking information and now has some deep-pocketed investors to support its efforts.
If the business model sounds familiar, that’s because it is. Belvo is borrowing a page from the Plaid playbook. It’s a strategy that ultimately netted the U.S. startup and its investors $5.3 billion when it was acquired by Visa in January of this year.
Belvo and its backers, who funneled $10 million into the year-old company, want to replicate Plaid’s success and open up an entire new range of financial services companies in Latin America.
The round was co-led by Silicon Valley’s Founders Fund and Argentina’s Kaszek. With the new arsenal of capital complimented by the Founders Fund’s network and Kaszek’s deep knowledge of the Latin American market, Belvo hopes to triple its current team of 25 that is spread across operations in Mexico City and Barcelona.
Since its initial establishment in May 2019, the company has raised a total of $13 million from Y Combinator (W20) along with some of the biggest players in Latin America’s startup scene. Those investors include David Velez, the co-founder of Brazil’s multi-billion dollar lending startup, Nubank; MAYA Capital and Venture Friends.
The company’s co-founders, Pablo Viguera and Oriol Tintoré are no stranger to startups themselves. Viguera served as COO at European payments app Verse, and is a former general manager of one of the big European neo-banks, Revolut. Tintoré is a former NASA aerospace engineer, and while working for his Stanford MBA, founded Capella Space, an information collection startup that went on to raise over $50 million.
The company said it aims to work with leading fintechs in Latin America, spanning across verticals like the neobanks, credit providers and personal finance products Latin Americans use every day.
Belvo has built a developer-first API platform that can be used to access and interpret end-user financial data to build better, more efficient and more inclusive financial products in Latin America. Developers of popular neobank apps, credit providers and personal finance tools use Belvo’s API to connect bank accounts to their apps to unlock the power of open banking.
Viguera says the capital will be used to open a new office in Sao Paulo, and invest in new product and business development hires. Notably, Belvo is only one year old, having launched in January 2020 and operative in Mexico and Colombia.
Co-founders Pablo Viguera and Oriol Tintoré are a former Revolut GM and former NASA aerospace engineer.
Belvo’s latest funding also marks another instance of a U.S.-Latin America investment teamup for a Latin American company.
Nuvocargo, a logistics startup that wants to bolster the Mexico – U.S. trade lane with its freight transportation technology, also recently raised a round co-led by Mexico’s ALLVP and Silicon Valley-based NFX. American investors may be starting to take note of the co-investment opportunity of putting capital into startups serving the Latin American market in partnership with successful new wave domestic funds like Mexico’s ALLVP and Argentina’s Kaszek.
Starling Bank, the U.K.-based challenger bank founded by banking veteran Anne Boden, has raised an additional £40 million in funding, TechCrunch has learned.
The round is led by existing backers Harry McPike’s JTC and Merian Chrysalis Investment Company Limited, and adds to the £60 million raised in February this year.
Now boasting 1.4 million accounts, including 155,000 business accounts, Starling Bank has raised a total of £363 million since its launch in 2014. Noteworthy, I’m told that its deposit base has doubled in the last six months and it now holds more than £2.4 billion in deposits.
“This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever,” said Starling’s Anne Boden in a statement confirming the fundraise.
I understand the new funding will enable the bank to continue investing in growth, and, more specifically, to provide “much-needed support to small business customers who have been hit by the coronavirus emergency.”
This has seen it collaborate with the U.K. government to increase lending to SMEs as part of the country’s various coronavirus crisis business support packages, including £300 million under the government-backed Coronavirus Business Interruption Loan Scheme (CBILS) and direct to its customers under its own CBIL and Bounce Back Loan Schemes.
To that end, since launching SME accounts in March 2018 and securing £100 million in state aid via the Capability and Innovation Fund (CIF), business banking has become a big bet for Starling. It appears to be starting to pay off, too, with the bank now claiming to hold a 2.6% share of the U.K.’s SME banking market, with almost £500 million of SME lending currently on its balance sheet.
Nuro, the autonomous robotics startup that has raised more than $1 billion from Softbank Vision Fund, Greylock and other investors, said Thursday it will test prescription delivery in Houston through a partnership with CVS Pharmacy. The pilot, which will use a fleet of the startup’s autonomous Toyota Prius vehicles and transition to using its custom-built R2 delivery bots, is slated to begin in June.
The partnership marks Nuro’s expansion beyond groceries and into healthcare. Last month, the startup dipped its autonomous toe in the healthcare field through a program to delivery food and medical supplies at temporary field hospitals in California set up in response to the COVID-19 pandemic.
The pilot program centers on one CVS Pharmacy in Bellaire, Texas and will serve customers across three zip codes. Customers who place prescription orders via CVS’ website or pharmacy app will be given the option to choose an autonomous delivery option. These pharmacy customers will also be able add other non-prescription items to their order.
Once the autonomous vehicle arrives, customers will need to confirm their identification to unlock their delivery. Deliveries will be free of charge for CVS Pharmacy customers.
“We are seeing an increased demand for prescription delivery,” Ryan Rumbarger, senior vice
president of store operations at CVS Health, said in a prepared statement. “We want to give our customers more choice in how they can quickly access the medications they need when it’s not convenient for them to visit one of our pharmacy locations.”
Nuro is already operating in the Houston area. Walmart announced in December a pilot program to test autonomous grocery delivery in the Houston market using Nuro’s autonomous vehicles. Under the pilot, Nuro’s vehicles deliver Walmart online grocery orders to a select group of customers who opt into the service in Houston. The autonomous delivery service involves R2, Nuro’s custom-built delivery vehicle that carries products only, with no on-board drivers or passengers, as well as autonomous Toyota Priuses that deliver groceries.
Nuro also partnered with Kroger (Fry’s) in 2018 to test autonomous Prius vehicles and its first-generation custom-built robot known as R1. The R1 autonomous vehicle was operating as a driverless service without a safety driver on board in the Phoenix suburb of Scottsdale. In March 2019, Nuro moved the service with Kroger to Houston, beginning with autonomous Priuses.
The company’s contactless delivery program shuttling medical supplies and food is also continuing. Under that program, which began in late April, Nuro’s R2 bots are used at two events centers — in San Mateo and the Sleep Train Arena in Sacramento — that have been turned into temporary healthcare facilities for COVID-19 patients. Nuro is delivering meals and equipment to more than 50 medical staff at both sites every week.
It’s unclear how long the field hospital program will continue. Last week, there were 25 patients across the two sites. The Sleep Train Arena is accepting patients through June 30 via California Office of Emergency Services. The hospital may be converted to a shelter for those affected by fires through the end of this year.
That brings the company’s total VC to $4 million, which Carry1st will deploy to support and invest in game publishing across Africa.
The startup — with offices in New York, Lagos, and South Africa — was co-founded in 2018 by Sierra Leonean Cordel Robbin-Coker, American Lucy Parry, and Zimbabwean software engineer Tinotenda Mundangepfupfu.
Robbin-Coker and Parry met while working in investment banking in New York, before forming Carry1st.
“I convinced her to avoid going to business school and instead come to South Africa to Cape Town,” Robbin-Coker told TechCrunch on a call.
“We launched with the idea that we wanted to bring the gaming industry…to the African continent.”
The startup has already launched two games as direct downloads from its site, Carry1st Trivia and Hyper!.
“In April, [Carry1st Trivia] did pretty well. It was the number one game in Nigeria, and Kenya for most of the year and did about one and a half million downloads.” Robbin-Coker said.
Image Credit: Carry1st
The startup will use a portion of its latest round and overall capital to bring more unique content onto its platform. “In order to do that, you need cash…to help a developer finish a game or entice a strong game to work with you,” said Robbin-Coker.
The company will also expand its distribution channels, such as partnerships with mobile operators and the Carry1st Brand Ambassador program — a network of sales agents who promote and sell games across the continent.
The company will also invest in the gaming market and itself.
“We want to dedicate at least a million dollars to actually going out and acquiring users and scaling our user base. And then, the final piece is really around the tech platform that we’re looking to build,” said Robbin-Coker.
That entails creating multiple channels and revenue points to develop, distribute, and invest in games on the continent, he explained.
Image Credits: Carry1st
Robbin-Coker compared the Carry1st’s strategy in Africa as something similar to Sea: an Asia regional mobile entertainment distribution platform — publicly traded and partially owned by Tencent — that incubated the popular Fornite game.
“We’re looking to be the number one regional publisher of [gaming] content in the region…the publisher of record and the app store,” said Robbin-Coker.
That entails developing and distributing not only games originating from the continent, but also serving as channel for gaming content from other continents coming into Africa.
That generates a consistent revenue stream for the startup, Robbin-Coker explained, but also creates opportunities for big creative wins.
“It’s a hits driven business. A single studio will work and toil in obscurity for a decade and then they’ll make Candy Crush. And then that would be worth $6 billion, very quickly,” Carry1st’s CEO said.
He and his team will use a portion of their $4 million in VC to invest in that potential gaming success story in Africa.
The company’s co-founder Lucy Parry directs aspirants to the company’s homepage. “There’s a big blue button that says ‘Pitch Your Game’ at the bottom of our website.”
More evidence that Gen Z is switching to chat platforms for just about everything, including banking, emerges today in the news that Zelf, a fittech startup offering neobank-style services, is generating buzz amongst Gen-Zers in Spain and France. Its ability for users to interact solely via messaging has seen the startup hit over 260,000 card pre-orders since its launch in early April, according to the company which is specifically targeting Gen Z.
They are not alone. Other players in the ‘banking services via a messaging’ space include Kotak Mahindra Bank in India (on WhatsApp) and ICICI in WhatsApp (India). However, neither of these can do actual provisioning of the card and addition to Apple Pay and Google Pay in the messengers, which is what Zelf can do.
With Zelf, users get an account and a virtual card via their Facebook Messenger, WhatsApp, Viber and Telegram accounts. For offline and online purchases Zelf supports Apple Pay and Google Pay. This lightweight onboarding means card issuance takes less than 30 seconds via a Passport or national ID. Users then get a virtual Mastercard debit card available in their favorite messenger app. Operating inside the EU’s “Single Euro Payments Area” means it’s pretty easy for the startup to scale its offering to other countries.
Part of the reason Zelf is confident it can scale is that it has signed a deal with Treezor, a Banking-as-a-Service platform based in France. Treezor is a fintech, registered with the ACPR, and was acquired in 2019 by the Société Générale group.
Elliot Goykhman, founder and CEO of Zelf tells me: “With 84% of screen time taken by 5 apps, mostly messengers, we make sending and receiving money as easy as sending a message. Instant notifications, voice commands instead of buttons, simple invoicing and QR codes are some of the messenger banking features that will simplify the financial routine and bring money matters to the default apps of today – the messengers.” It will also soon work in Discord and Telegram, he says.
The business model for Zelf will come from interchange fees, premium account fees and – towards the end of this year – from loans, credit cards, and voice memo-activated invoices.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
First, a big thanks to everyone who took part in the Equity survey, we really appreciated your notes and thoughts. The crew is chewing over what you said now, and we’ll roll up the best feedback into show tweaks in the future.
Today, though, we’ve gone Danny and Natasha and Chris and Alex back again for our regular news dive. This week we had to leave the Vroom IPO filing, Danny’s group project on The Future of Work, and a handwashing startup (?) from Natasha to get to the very biggest stories:
And at the end, we got Danny to explain what the flying frack is going on over at Luckin. It’s somewhere between tragedy and farce, we reckon. That’s it for today, more Tuesday after the holiday!
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
There’s a famous old post going around Twitter this week by entrepreneur and developer David Heinemeier Hansson (@DHH). DHH is a critic of certain elements of the startup world, especially wild valuations. This entry from him is, in my view, a classic of the genre.
The post in question is titled “Facebook is not worth $33,000,000,000,” and was written back in 2010.
You can already imagine who might find the post irksome — namely folks who are in the business of putting capital into high-growth companies. This sort of snark, though not precisely recent, is a good example of how posts like the Facebook entry are read on Twitter.
If you take a moment to actually read DHH’s blog, however, you’ll find that the first part of his argument is that selling a minute slice of a company at a high price, thus “revaluing” the company at a new, stratospheric valuation, is a little silly. DHH didn’t like that by selling a few percentage points of itself, Facebook’s worth was pegged at $33 billion. We’ve seen some similarly-small-dollar, high-valuation rounds recently that could be scooted into the same bucket.
It’s a somewhat fair point.
But what struck me this morning while re-reading the DHH piece was that his second two points are useful rubrics for framing the modern, post-unicorn era. DHH wrote that profits matter, companies are ultimately valued on them, and that companies that don’t scale financial results as they add customers (or users) aren’t great.
When former Bill Clinton speechwriter and political wunderkind Andrei Cherny launched Aspiration four years ago, the upstart fintech startup was one of Los Angeles’ early entrants into a financial services market dominated by players from Europe and the financial capital of the U.S. in New York City.
Fast forward four years and the big New York fintechs are still around, but Cherny’s Aspiration remains undimmed and has today disclosed a $153 million funding round to get even bigger.
Unlike other financial services startups that compete around a suite of product offerings designed to offer no-fee checking and deposits or upfront cash payments and short-term no-interest loans, Aspiration differentiates itself with a focus on sustainability and conscious consumerism.
The company first pitched the market with an investment management service like those from Betterment and Wealthfront, but one where customers could choose their own fees. It also guaranteed investments in sustainable companies and a portfolio that would not include fossil fuel companies or other businesses deemed to be less-than-friendly to Mother Nature.
The conscious consumerism is a through-line that knits together the other products in the Aspiration portfolio including its Impact Measurement Score product that gives customers a window into how their shopping habits measure up with their desires to be more earth-friendly.
The company’s just-announced $135 million cash infusion brings the total capital raised to $200 million and was led by local investor Alpha Edison. Additional new and existing investors including UBS O’Connor Capital Solutions, DNS Capital, Radicle Impact, Sutter Rock, Jeff Skoll, Joseph Sanberg, Social Impact Finance, the Pohlad Companies, and AGO Partners, also participated in the financing.
So far, 1.5 million Americans have signed up to use Aspiration’s financial management and banking services and the company has seen $4 billion in transactions pass through its accounts.
There’s a whole suite of new services designed to help customers go green too. The company launched a matching feature where the company plants a tree for every debit card purchase that its customers make, when they round up to the nearest dollar. And it’s offering a premium subscription tier that includes debit cards made from recycled ocean plastic. The card offers higher cash back and interest rates and a feature that offsets the carbon emissions of every mile a customer drives.
Finally, Aspiration has inked partnerships with other socially conscious companies like Toms and Warby Parker giving its customers extra cash back rewards when they shop at those businesses.
“Aspiration has built deep, trusting customer relationships that are beginning to unlock latent demand for financial services among the tens of millions of conscious consumers,” said Nate Redmond of Alpha Edison, in a statement. “We are excited to lead a great group of investors to fuel Aspiration’s durable growth and lasting impact.”
“I’ve got a really high attention to detail, which might sound great, but it’s possibly a curse because I can’t help but spot problems with everything around me,” says Peter Ramsey .
He’s the founder of Built for Mars, a U.K.-based UX advisory, and he has spent the last three months documenting and analyzing the user experience of a dozen leading British banks — both incumbents and challengers — including Barclays, HSBC, Santander, Monzo, Starling and Revolut.
“Quite literally, I opened 12 real bank accounts,” he explains. “You remember the stress of opening one account? I did that 12 times, [and] it was probably a terrible idea. But I really needed to control as many variables as possible, and this was the only way of doing that.”
Next, Ramsey says he “logged everything,” recording every click, screen and action. “I saved every letter, and made a note of when they arrived. I recorded pretty much everything I could,” he recalls. “At one point I even weighed all the debit cards to see if some were heavier. That was a total waste of time though, because they all weighed the same amount. But you see what I mean, I just thought about making it as scientific as possible. Also, UX is really quite subjective, so I wanted to back up my opinions with some more quantifiable metrics.”
The resulting analysis — covering opening an account, making a first payment and freezing your card — supported by individual bank case studies, is being published on the Built for Mars website over the month with a new interactive chapter released weekly.
After being given early access to the first three chapters and an initial series of case studies, I put several questions to Ramsey to understand his motivation, methodology and what he learned. And if you’re wondering which bank came out on top, keep reading.
TechCrunch: Why did you choose to do this on banks?
Peter Ramsey: My background is in fintech, and I think the banks are just in this weird place right now. When they first came out I think consumers were surprised at how much better the apps were. Banking was renowned for having old software, it was almost acceptable for an old bank to be buggy. But now that these challenger banks have been out for five years, I think that perception has changed. So I chose the banks because they represent this industry of “challenger” versus “legacy.” Plus, for billion-dollar companies, you’d expect them all to really care about experience.
The JV will provide Mapbox’s mapping platform, including APIs and data services, to developers in Japan. Between June 1 and September 30, Mapbox Japan will also provide up to three months of free support for organizations building COVID-19 related mapping services, including infection cases and statistical data, for developers in the country, which has relied on tracking virus clusters to limit the spread of infections.
Mapbox collects data from sources including government and commercial databases, and uses them in customizable AI-based APIs, SDKs and other products. Its clients have included Facebook, Snap, the New York Times, the Federal Communications Commission and automotive companies like Land Rover and Rimac.
Founded in 2010 by Eric Gunderson, Mapbox says its tech now reaches more than 600 million monthly users. SoftBank Vision Fund led Mapbox’s $164 million Series C in 2017. At the time, Gunderson told TechCrunch that part of the funding would be used to expand in Asia through SoftBank’s presence in regions including Southeast Asia and China.
Mapbox has operated in Japan since July 2019, though that was through partnerships with Yahoo! Japan and Zenrin, one of the country’s biggest mapping software companies. Zenrin also has a partnership with Google Maps, but early last year Google began reducing the amount of mapping data it uses from Zenrin, possibly to focus on building its own trove of mapping data in Japan.
Working closely with Zenrin opens potential new opportunities for Mapbox in Japan. Last year, Gunderson told Nikkei Asian Review that “we are going to be the number one mapping provider in all of Japan and we’ll be able to do this because we have the best data in all of Japan through our partnership with Zenrin.” The company plans to develop products for the Japanese market that include mapping services for industrial automation.
In SoftBank’s announcement, Eric Gan, SoftBank Corp. head of business development, said, “I am very excited to bring Mapbox’s technology to Japan to help enterprises enhance their existing mapping services while also creating new customizable location-based services and management tools. We are seeing a significant rise in demand for Mapbox’s products from retail, ride-share, hotel, office-sharing, payment, mobility and manufacturing industries.”
More than five years after starting the company, Monzo co-founder Tom Blomfield is stepping down as CEO of the U.K. challenger bank to take up the newly created role of President.
Current U.S. CEO, TS Anil, will become the new “Monzo UK Bank CEO”, subject to regulatory approval, and for now will hold both U.K. and U.S. roles.
Anil previously held exec roles at Visa, Standard Chartered Bank, and Citi, and therefore brings a ton of banking and financial services experience. This includes things like dealing with regulators and overseeing a large corporate structure, two things a scale-up challenger bank like Monzo, with more than 4 million customers and over 1,500 staff, requires.
The thinking behind Blomfield’s move to President is a startup cliche but also likely holds water; he’ll be able to spend more time doing the things he enjoys most (and is arguably best at), such as focusing on the longer term vision, product and how Monzo can stay close to and best serve customers. Meanwhile, Anil — and, in the future, other country-specific CEOs — can do the day to day, more regulated aspects of running a bank.
In a brief call with Blomfield just moments ago, he told me he had been thinking about a transition into a different role for about 18 months, but it wasn’t until much more recently that a formal decision was taken.
“I went through all the stuff I love about my job, and it was all the stuff I did in the first two or three years,” he said. “And I went through all the stuff that drains me, and it’s all the stuff I’ve done in the last two years, honestly. Things I think TS is awesome at”.
Although it is unlikely that a huge amount will change immediately, Blomfield says he hopes that he’ll be able to spend a “bunch more time doing the stuff I really really love, which is community, talking to customers, helping develop the product proposition, long term vision, and talking to journalists, like you Steve, obviously, and try to unwind my involvement a little bit in more formal regulated banking activities”.
Meanwhile, it has been somewhat of a turbulent time for Monzo in recent months, as it, along with many other fintech companies, has attempted to insulate itself from the coronavirus crisis and resulting economic downturn.
Last month, I reported that Monzo was shuttering its customer support office in Las Vegas, seeing 165 customer support staff in the U.S. lose their jobs. And just a few weeks earlier, we reported that the bank was furloughing up to 295 staff under the U.K.’s Coronavirus Job Retention Scheme. In addition, the senior management team and the board has volunteered to take a 25% cut in salary, and co-founder and CEO Tom Blomfield has decided not to take a salary for the next twelve months.
Like other banks and fintechs, the coronavirus crisis has resulted in Monzo seeing customer card spend reduce at home and (of course) abroad, meaning it is generating significantly less revenue from interchange fees. The bank has also postponed the launch of premium paid-for consumer accounts, one of only a handful of known planned revenue streams, alongside lending, of course.
And just last week, it was reported that Monzo is closing in on £70-80 million in top up funding, to help extend its coronavirus crisis runaway. However, as new and some existing investors play hardball, the company has reportedly had to accept a 40% reduction in its previously £2 billion valuation as part of its last funding round last June, with a new valuation of £1.25 billion.
With that said, it’s not all been bad news. Monzo recently launched business accounts, many of which are revenue generating, with both free and paid tiers. It also recruited Sujata Bhatia, a former American Express executive in Europe, as its new COO.
And, hopefully, in his new role as President, Blomfield will sound a little more energised next time I call him.
More than two-thirds of startups in India need to secure additional capital in the coming weeks to steer through the coronavirus pandemic, according to an industry report.
70% of startups in India, home to one of the world’s largest startup ecosystems, have less than three months of cash runway in the bank, and another 22% have enough to barely make it to the end of the year, according to a survey conducted by industry body Nasscom.
Only 8% of startups that participated in Nasscom’s survey said they had enough money to survive for more than nine months, the report published on Tuesday said.
As startups confront unprecedented times, many are thinking of taking dramatic steps to stay afloat. About 54% of some 250 respondents said they were looking to pivot to new business opportunities, and 40% said they wanted to diversify into growth verticals such as healthcare.
The cash crunch comes as investors become cautious about writing new checks to young firms in the country. In an open letter several prominent VC funds warned startups that they may find it especially challenging to raise new capital in the next few months.
For some startups, there are other factors at play, too. More than 69% of business-to-business startups, especially those operating in retail and fintech categories, say in the report that they are facing delays in payments from their clients.
This has left more than 50% of such startups to enforce pay cuts, reduction in marketing spends, and a quarter of them to switch to a lower-cost vendor to save money.
Startups operating in transport and travel sectors are also severely impacted, with 78% of respondents saying they were rethinking their business models and tweaking their products in accordance with the current scenario.
In a call with reporters on Tuesday, executives at Oyo unveiled new steps the budget lodging startup had taken at its hotels to ensure safety for operators and customers. They also said they were hoping that the government would allow more people to travel and stay at hotels again.
More than two-thirds of startups said they were looking for policies that eased regulations and spur government purchases. Many also requested relief in taxations for a few years.
More than two-thirds of Indian startups believe the impact of coronavirus will linger for up to 12 months. (Nasscom)
Earlier this month, India announced a $266 billion stimulus package to help revive the stalled economy. On Saturday, Indian Finance Minister Nirmala Sitharaman said that startups too will be able to access some of this relief — though details remain sparse on how they should go about it.
Since 2017, India’s startup ecosystem has grown consistently. Last year, startups in the country raised a record $14.5 billion.
“Out of the blue, this flourishing growth saga has suddenly been hit by a roadblock… the COVID roadblock. There is no country, business or living being that has not been affected by the COVID pandemic. While governments have been working diligently to protect and save human lives, businesses have been hit and small businesses and start-ups have been the most affected,” said Debjani Ghosh, President of NASSCOM, in the report.
As the fallout from COVID-19 continues to grip Africa’s major economies, the tech ventures in those countries need state support.
National legislation that creates clear frameworks and operational support for startups are one of the best ways to help Africa’s digital companies survive and thrive through the coronavirus crisis — and improve their environment over the long term.
Africa has dozens of thriving startup ecosystems that are persevering through this crisis, but now more than ever, they need a boost. The gains made by founders thus far are in danger due to the ongoing economic slowdown. The World Bank estimates that economic growth in sub-Saharan Africa alone will decline from 2.4% last year to -2.1 to -5.1% this year. If correct, the region will experience its first recession in a quarter of a century.
Now is the time for something that was already long-overdue in many African countries: political leaders should support startups through national startup acts.
Village Capital’s Adedana Ashebir, Image Credits: Village Capital
Last December, Senegal became the second African nation to enact a national Startup Act, following Tunisia’s landmark bill that passed in April 2018. Other countries may follow soon: startup legislation was being discussed in Ghana and Mali before the novel coronavirus monopolized headlines.
The rest of the continent can learn a lot from Tunisia, which passed its Startup Act in 2018 after receiving input from entrepreneurs and economists. In addition to clarifying rules surrounding angel, seed and venture capital funding, the act bestows benefits on companies designated as startups. This includes alleviating their tax and social security contribution burdens, providing access to forex bank accounts and offering subsidized salaries for founders. More than 50 startups have taken advantage of the “startup” label. A number of Tunisian entrepreneurs have told me that thanks to the new legislation, they are able reinvest savings from these incentives back into their businesses.
SoftBank Group Corp. is currently seeking buyers for about $20 billion of its shares in T-Mobile US, according to reports in the Wall Street Journal and Bloomberg. If the proposed sale goes through, its proceeds could help offset SoftBank’s heavy investment losses over the past year.
According to its first-quarter earnings report yesterday, SoftBank’s Vision Fund lost $17.4 billion in value for the year ended March 31, obliterating the $12.8 billion gain the fund recorded a year ago. Earlier this year, the company announced plans to sell up to $41 billion of its assets to increase its share buyback program.
Bloomberg reports that under the proposed deal, which could be announced this week, SoftBank would sell part of its stake to Deutsche Telekom AG, T-Mobile’s parent company. Deutsche Telekom currently owns about 44% of T-Mobile’s shares, but would achieve majority ownership if the deal with SoftBank goes through. Softbank would then sell some of its remaining stake to other investors in a secondary offering.
T-Mobile is the United States’ third-largest wireless carrier, after AT&T and Verizon Wireless*, and it has a current market capitalization of about $126 billion, which means SoftBank’s stake is worth about $31 billion, while Deutsche Telekom’s is about $55 billion.
According to the Wall Street Journal, banks including Morgan Stanley and Goldman Sach Group are currently seeking investors for the proposed sale.
*Disclosure: Verizon is TechCrunch’s parent company.
Amidst the blitz of SoftBank earnings news today comes the financials for all of SoftBank’s subsidiaries, which includes Arm Holdings, the most important chip design and research company in the world that SoftBank bought for $32 billion back in 2016. Arm produces almost all of the key designs for the chips that run today’s smartphones, including Apple’s A13 Bionic chip that powers its flagship iPhone. In all, 22.8 billion chips were shipped globally last year using Arm licenses according to SoftBank’s financials.
It’s a massively important company, and its finances show a complicated picture for itself — and the semiconductor industry at large.
We sat down with Arm Holding’s CEO Simon Segars last year to discuss the company’s growing appetite for ambitious research, fueled by SoftBank dollars and the bullish vision of the conglomerate’s chairman Masayoshi Son:
It would be one of the greatest startup investments of all time. Masayoshi Son, riding high in the klieg lights of the 1990s dot-com bubble, invested $20 million dollars into a fledgling Hong Kong-based startup called Alibaba. That $20 million investment into the Chinese e-commerce business would go on to be worth about $120 billion for SoftBank, which still retains more than a quarter ownership stake today.
That early check and the rise, fall, and rise of Son and Alibaba’s Jack Ma helped to cement an intricately connected partnership that has endured decades of ferocious change in the tech industry. Ma joined SoftBank’s board in 2007, and the two have been tech titans together ever since.
So it is notable and worth a minute of reflection that SoftBank announced overnight that Jack Ma would be leaving SoftBank’s board after almost 14 years.
Yet, one can’t help connect the various dots of news that hovers between the two companies and not realize that the partnership that has endured so much is now increasingly fraying, and due to forces far beyond the ken of the two dynamos.
On one hand, there is a pecuniary point: SoftBank has been rapidly selling Alibaba shares the past few years after decades of going long as it attempts to shore up its balance sheet amidst intense financial challenges. According to Bloomberg in March, SoftBank intended to sell $14 billion of its Alibaba shares, and that was after $11 billion in realized returns on Alibaba stock in 2019 from a deal consummated in 2016. It’s just a bit awkward for Ma to be sitting on a board that is actively selling his own legacy.
Yet, there is more here. Jack Ma has become a figure in the fight against COVID-19, and has burnished China’s image (and his own) of responding globally to the crisis. In the process, though, there has been blowback, as concerns about the quality of face masks and other goods have been raised by health authorities.
And of course, there is the deepening trade war, not just between the United States and China, but also between Japan and China. Japan’s government is increasingly looking for a way to find a “China exit” and become more self-sufficient in its own supply chains and less financially dependent on Chinese capitalism.
Meanwhile, the Trump administration has been seeking out avenues of decoupling the U.S. from China. Overnight, the largest chip fab in the world, TSMC, announced that it would no longer accept orders from China’s Huawei following new export controls put in place by the U.S. last week and its announcement of a new, $12 billion chip fab plant in Arizona.
SoftBank itself has gotten caught up in these challenges. As an international conglomerate, and with the Vision Fund itself officially incorporated in Jersey, it has confronted the tightening screws of U.S. regulation of foreign ownership of critical technology companies through mechanisms like CFIUS. Its acquisition of ARM Holdings a few years ago may not have been completed if it had tried today, given the environment in the United Kingdom or the U.S.
So it’s not just about an investor and his entrepreneur breaking some ties after two decades in business together. It’s about the fraying of the very globalization that powered the first wave of tech companies — that a Japanese conglomerate with major interests in the U.S. and Europe could invest in a Hong Kong / China startup and reap huge rewards. That tech world and the divide of the internet and the world’s markets continues unabated.
Apple outlines new safety measures as it reopens stores, Huawei responds to new U.S. chip curbs and Jack Ma departs SoftBank’s board of directors.
Here’s your Daily Crunch for May 18, 2020.
In mid-March, Apple closed all of its stores outside of China “until further notice.” In a statement issued today under the title, “To our Customers,” Retail SVP Deirdre O’Brien offered insight into the company’s plans to reopen locations.
Nearly 100 stores have already resumed services, according to O’Brien. Face covers will be required for both employees and customers alike. In addition, temperature checks are now conducted at the store’s entrance, coupled with posted health questions. Apple has also instituted deeper cleaning on all surfaces, including display products.
Following the U.S. government’s announcement that it would further thwart Huawei’s chip-making capability, the Chinese telecoms equipment giant condemned the new ruling for being “arbitrary and pernicious.” Adding to its woes, the Nikkei Asian Review reported that Taiwanese Semiconductor Manufacturing Co. has stopped taking new orders from the company. (Huawei declined to comment, while TSMC said the report was “purely market rumor.”)
The company did not give a reason for the resignation, but over the past year, Ma has been pulling back from business roles to focus on philanthropy. Last September, he resigned as Alibaba’s chairman, and is also expected to step down from its board at its annual general shareholder’s meeting this year.
Facebook-owned Oculus released a new sales figure as the company reaches the one-year anniversary of the release of the Quest headset. We didn’t get unit sales, but the company did share that it has sold $100 million worth of Quest content in the device’s first year — a number that indicates that although the platform is still nascent, a handful of developers are definitely making it work for them.
Devin Coldewey talks about what’s going to change with coffee shops and co-working spaces, Alex Wilhelm discusses the future of the home office setup and Danny Crichton talks about the revitalization of urban and semi-urban neighborhoods. (Extra Crunch membership required.)
In an internal email, which the Bangalore-headquartered food delivery startup published on its blog, Swiggy co-founder and chief executive Sriharsha Majety said the company’s core food business had been “severely impacted.”
The latest full episode of Equity looks at a funding round for pizza delivery company Slice and the possibility of Uber acquiring Grubhub, while the Monday news roundup takes a deeper look at the financials of the food delivery business. Meanwhile, Original Content is back on a weekly schedule, and we review the new Netflix series “Never Have I Ever.”
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re digging into SoftBank’s latest earnings slides. Not only do they contain a wealth of updates and other useful information, but some of them are gosh-darn-freaking hilarious. We all deserve a bit of levity after the last few months.
The visual elements we quote below come from SoftBank’s reporting of its own results from its fiscal year ending March 31, 2020. Much of the deck is made up of financial reporting tables and other bits of stuff you don’t want to read. We’ve cut all that out and left the fun parts.
Before we dive in, please note that we are largely giggling at some slide design choices and only somewhat at the results themselves. We are certainly not making fun of people who’ve been impacted by layoffs and other such things that these slides’ results encompass.
But we are going to have some fun with how SoftBank describes how it views the world, because how can we not? Let’s begin.
TechCrunch has a number of folks parsing SoftBank’s deck this morning, looking to do serious work. That’s not our goal. Sure, this post will tell you things like the fact that there are 88 companies in the Vision Fund portfolio, and that when it comes to unrealized gains and losses, the portfolio has seen $13.4 billion in gains and $14.2 billion in losses. $4.9 billion of gains have been realized, mind you, while just $200 million of losses have had the same honor.
And this post will tell you that the “net blended [internal rate of return] for SoftBank Vision Fund investors is -1%.”
Hell, you probably also want to know that Uber was detailed as Vision Fund’s worst-performing public company, generating a $1.46 billion loss for the group. In contrast, Guardant Health is good for a $1.67 billion gain, while 2019 IPO Slack has been good for $605 million in profits. Those were the two best companies in the Vision Fund’s public portfolio.
But what you really want is the good stuff. So, shared by slide number, here you go: