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India’s CRED valued at $2.2 billion in new $215 million fundraise

By Manish Singh

Two-year-old CRED has become the youngest Indian startup to be valued at $2 billion or higher.

Bangalore-based CRED said on Tuesday it has raised $215 million in a new funding round — a Series D — that valued the Indian startup at $2.2 billion (post-money), up from about $800 million valuation in the $81 million Series C round in January this year.

New investor Falcon Edge Capital and existing investor Coatue Management led the new round. Insight Partners and existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina also participated in Series D, which brings CRED’s total to-date raise to about $443 million.

TechCrunch reported last month that CRED was in advanced stages of talks to raise about $200 million at a valuation of around $2 billion.

CRED operates an app that rewards customers for paying their credit card bills on time and gives them access to a range of additional services such as credit and a premium catalog of products from high-end brands.

An individual needs to have a credit score of at least 750 to be able to sign up for CRED. By keeping such a high bar, the startup says it is ensuring that people are incentivized to improve their financial behavior. (More on this later.)

CRED today serves more than 6 million customers, or about 22% of all credit card holders — and 35% of all premium credit card holders — in the world’s second largest internet market.

Kunal Shah, founder and chief executive of CRED, told TechCrunch in an interview that the startup intends to become the platform for affluent customers in India and also not limit its offerings to financial services.

He said the startup’s aforementioned e-commerce service, for instance, has been growing fast. He attributed the early success to customers enjoying the curation of items on CRED and merchants finding the platform appealing as the ticket size of each transaction on CRED tends to be higher.

Our focus on helping CRED members progress financially and have access to a high-trust environment has given us a massive opportunity to shape responsible behaviour, imagine new use cases, and create a rewarding platform for members.

— Kunal Shah (@kunalb11) April 6, 2021

The startup plans to deploy the fresh funds to scale several of its revenue channels and engage in more experimentations, he said.

When asked whether CRED would like to serve all credit card users in India some day, Shah said the selection criteria limits the startup from doing so, but he was optimistic that more users will improve their scores in the future.

The startup, unlike most others in India, doesn’t focus on the usual TAM (addressable market) — hundreds of millions of users of the world’s second-most populated nation — and instead caters to some of the most premium audiences.

Consumer segmentation and addressable market for fintech firms in India (BofA Research)

“India has 57 million credit cards (vs 830 million debit cards) [that] largely serves the high-end market. The credit card industry is largely concentrated with the top 4 banks (HDFC, SBI, ICICI and Axis) controlling about 70% of the total market. This space is extremely profitable for these banks – as evident from the SBI Cards IPO,” analysts at Bank of America wrote in a recent report to clients.

“Very few startups like CRED are focusing on this high-end base and [have] taken a platform-based approach (acquire customers now and look for monetization later). Credit card in India remains an aspirational product. The under penetration would likely ensure continued strong growth in coming years. Overtime, the form-factor may evolve (i.e. move from plastic card to virtual card), but the inherent demand for credit is expected to grow,” they added.

CRED has become one of the most talked about startups in India, in part because of the pace at which it has raised money of late, its growing valuation, and the fact that it only caters to select customers.

Some users have also said that CRED doesn’t offer as appealing perks as it used to a year ago.

Shah, who is one of the most prolific angel investors in India and delivered one of the rare successful exits in the country with his previous venture, said CRED is already addressing these concerns. A recent feature, which allows customers to use CRED points at over a thousand merchants, for instance, has made the reward more appealing, he said, adding that the startup is slowly incorporating that into its own e-commerce store as well.

“What will soon happen is that customers will realize that these points are asset and not a liability. They will start to see benefits of the points in more places,” he said, adding that the pandemic derailed some of the things CRED had planned.

The startup, which bought back shares worth $1.2 million from employees in January this year, told them in an email today that it will soon be buying back stocks worth $5 million. “As the funding helps CRED invest in its future, hopefully the buyback will help some of you do that too,” the email said.

NBA Top Shot maker Dapper Labs is now worth $2.6 billion thanks to half of Hollywood, the NBA, and Michael Jordan

By Jonathan Shieber

From the early success of Crypto Kitties to the explosive growth of NBA Top Shot, Dapper Labs has been at the forefront of the cryptocurrency collectible craze known as NFTs.

Now the company is reaping the benefits of its trailblazing status with a new $305 million financing led by some of the biggest names in Hollywood, sports, and investing.

The new round values the company at a whopping $2.6 billion, according to multiple media reports, and comes at a time when NFTs have captured the popular imagination.

Leading the company’s financing was Coatue, the financial services firm that’s behind many of the biggest later stage tech deals. But heavy hitters from the entertainment world also took their cut — these are folks like NBA legend Michael Jordan as well as current players and funds including Kevin Durant, Andre Iguodala, Kyle Lowry, Spencer Dinwiddie, Andre Drummond, Alex Caruso, Michael Carter-Williams, Josh Hart, Udonis Haslem, JaVale McGee, Khris Middleton, Domantas Sabonis, Klay Thompson, Nikola Vucevic, Thad Young, and Richard Seymour’s 93 Ventures.

Entertainment and music heavyweights including Ashton Kutcher and Guy Oseary’s Sound Ventures, Will Smith and Keisuke Honda’s Dreamers VC, Shawn Mendes and Andrew Gertler’s AG Ventures, Shay Mitchell, and 2 Chainz also bought in on the action.

And from the venture world comes other strategic investors like Andreessen Horowitz, The Chernin Group, USV, Version One, and Venrock.

The company said it would use the funds to continue building out NBA Top Shot and expanding the updated digital trading card platform to other sports and a broader creator community.

Top Shot has already notched over $500 million in sales for its animated trading cards featuring things like LeBron James dunking and the sky (at least for now) is seemingly the limit for the collectible applications of blockchain.

It’s like the one thing that cryptocurrency can do really well and it’s been embraced far beyond the world of sports collectibles. The recent $69 million sale of a digital piece of art at Christies also marks a watershed moment for art world.

“NBA Top Shot is successful because it taps into basketball fandom – it’s a new and more exciting way for people to connect with their favorite teams and players,” said Roham Gharegozlou, CEO of Dapper Labs. “We want to bring the same magic to other sports leagues as well as help other entertainment studios and independent creators find their own approaches in exploring open platforms. NFTs unlock a new model for monetization that benefits the fans much more than advertising or sponsorships.”

Powering the Top Shot system and Dapper Labs’ other offerings is a new blockchain protocol called Flow, which purports to handle mainstream consumer applications at scale, and can support mass adoption.

Flow also allows for transactions using fiat currency and credit cards in addition to provide a much needed ease of cryptocurrency, and can keep customers safe from the fraud or theft common in cryptocurrency systems, according to a statement from Dapper Labs.

Flow enables NFT marketplaces and other decentralized applications that need to scale to handle mainstream demand without extremely high transaction costs (“gas fees”) or environmental concerns, the company said.

“NBA Top Shot is one of the best demonstrations we’ve seen of how quickly new technology can change the landscape for media and sports fans,” said Kevin Durant, Co-Founder of Thirty Five Ventures. “We’re excited to follow the progress with everything happening on Flow blockchain and use our platform with the Boardroom to connect with fans in a new way.”

Already companies like Warner Music Group, Ubisoft, Warner Media, and the UFC, as well as thousands of third party developers, artists, and other creators are using the Flow mainnet to sell collectible cards, and develop custodial wallets.

Additional investors in the round include: MLB players like Tim Beckham and Nolan Arenado; NFL players: Ken Crawley, Thomas Davis, Stefon Diggs, Dee Ford, Malcom Jenkins, Rodney McLeod, Jordan Matthew, Devin McCourty, Jason McCourty, DK Metcalf, Tyrod Taylor, and Trent Williams; team ownership including Vivek Ranadive (Kings), and notable sports investors Bolt Ventures.

Gorillas, the on-demand grocery delivery startup, raises $290M and ‘surpasses’ $1B valuation

By Steve O'Hear

Gorillas, the Berlin-HQ’d startup that promises to let you order groceries and other “every day” items for delivery in as little as 10 minutes, has raised $290 million in Series B funding, at a valuation that surpasses $1 billion.

The round — which was first reported by BI — is led by Coatue Management, DST Global and Tencent, with participation from Green Oaks, Fifth Wall and Dragoneer. Previous backer Atlantic Food Labs also followed on.

Noteworthy, Gorillas CEO and co-founder Kağan Sümer tells TechCrunch the round is “100% equity” (i.e. without a debt component). Asked if it includes any secondary funding — seeing existing shareholders liquidate a portion of their shares — Gorillas declined to comment.

Having become one of the fastest European startups to have achieved so-called “unicorn” status — a valuation of $1 billion or more — Gorillas says it will reward its rider crew and warehouse staff with $1 million in bonuses. However, the company isn’t disclosing how this one-off bonus breaks down per worker, and it isn’t clear if the bonus is cash or stock or a mixture of both. The move comes at a time when Gorillas riders in Germany are reportedly organising to unionise.

“In contrast to established gig economy models, we employ more than a thousand riders directly,” says Sümer. “Therefore, we invest in a strong career development program, rider security and a healthy working environment. Beyond that, all riders will receive a once-off payment”.

Founded last May by Kağan Sümer and Jörg Kattner in Berlin, Gorillas has already expanded to more than 12 cities, including Amsterdam, London and Munich. The company lets you order groceries and other household items on-demand with an average delivery time of 10 minutes.

To do this, it operates a vertical or “dark store” model, seeing it set up its own micro fulfillment centers, which currently total 40, spread across Germany, the U.K. and the Netherlands. Customers are charged just over $2 per delivery and can order from “more than 2,000 essential items at retail prices”.

“We believe that the weekly grocery run is outdated because people’s lives are increasingly spontaneous and shopping habits change accordingly,” says Sümer, noting that while access to supermarkets has increased, the space we have to store goods has decreased as people in cities are living in smaller spaces.

“Additionally, this pandemic has accelerated the need for grocery deliveries. If we can order clothes and trinkets and have them delivered to our door, the same should be said for our essential needs. Gorillas helps customers get what they need when they need it, whether this is their weekly grocery list or the tomatoes they forgot for tonight’s pasta recipe”.

Sümer says the service initially attracted typical early adopters because it was a radically new experience and the app was only available in English. He claims that Gorillas has since gained a “very broad” base of users that are “extremely loyal”. “With geographical expansion and the rapid increase of word-of-mouth, we now cater to pretty much anyone you’d meet in a supermarket,” he says.

Asked to share what a typical basket looks like, and therefore what kind of existing grocery habits Gorillas is displacing, Sümer says that users increase their basket size over time as they gain trust in the service and its products. “Simultaneously, customers are integrating an increasing share of their typical supermarket purchases within their Gorillas orders. This includes fresh goods like fruit and vegetables, as well as products of local suppliers”.

Meanwhile, dark store competition in cities like London — where Gorillas recently expanded and counts as a key market — continues to ramp up. This is seeing operators issue vouchers and offer sizeable discounts in a bid to acquire customers fast, while VCs are pumping huge amounts of early-stage cash into a space where unit economics aren’t yet definitively proven.

Earlier this month, Berlin-based Flink announced that it had raised $52 million in seed financing in a mixture of equity and debt. The company didn’t break out the equity-debt split, though one source told me the equity component was roughly half and half.

Others in the space include London’s Jiffy, Dija and Weezy, and France’s Cajoo. There’s also London-based Zapp, which remains in stealth, and heavily backed Getir, which started in Turkey but recently also came to London.

Meanwhile, U.S.-founded goPuff — which this week raised another $1.15 billion in funding at a whopping $8.9 billion valuation (compared to $3.9 billion in October) — is also looking to expand into Europe and has held talks to acquire or invest in the U.K.’s Fancy.

Side raises $150M at $1B valuation to help real estate agents go it alone

By Mary Ann Azevedo

Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, announced Monday that it has raised $150 million in Series D funding.

Coatue Management led the round, which brings San Francisco-based Side’s valuation to $1 billion and total funding raised to over $200 million since its 2017 inception. Existing backers Matrix Partners, Trinity Ventures and Sapphire Ventures also participated in the new financing.

The round is notable in that the amount raised is significantly higher than the $35 million Side raised in a Series C round in November 2019. Valuation too increased nearly 7x compared to the $150 million valuation at the time of its Series C. Sapphire Ventures led that investment and managing director Paul Levine, who was previously president and COO of Trulia (through its IPO and multibillion-dollar acquisition by Zillow), joined the company’s board of directors at that time.

The startup pulled in between $30 million and $50 million in revenue in 2020, and expects to double revenue this year. In 2019, Side represented over $5 billion in annual home sales across all of its partners. Today, the company’s community of agent partners represents over $15 billion in annual production volume.

Side was founded by Guy Gal, Edward Wu and Hilary Saunders on the premise that most real estate agents are “underserved and underappreciated” by traditional brokerage models.

CEO Gal said existing brokerages are designed to support “average” agents and as such, the top-producing agents end up having to do “all of the heavy lifting.”

Side’s white label model works with agents and teams by exclusively marketing their boutique brand, while also providing the required technology and support needed on the back end. The goal is to help partner agents “predictably grow” their businesses and improve their productivity.

“The way to think about Side is the way you think about what Shopify does for e-commerce…When partnering with Side, top-producing agents, teams and independent brokerages, for the first time in history, gain full ownership of their own brand and business without having to operate a brokerage,” Gal said. “When you spend years solving the problems of this very specific community of agents, you are able to use software to drive enormous efficiency for them in a way that has never been done before.”

Existing brokerages, he argues, actively discourage agents from becoming top producers and teams, because agents who serve fewer clients can be forced into paying much higher commission fees on every transaction, which means the incentives between brokerages and top agents and teams are misaligned.

“Top producers want to grow and differentiate, and brokerages want them to do less business at higher fees and be one more of the same under the same brand,” Gal said. “Side, rather than discouraging and competing with top producing agents and teams, enables them to grow and scale their own business and brand.”

Today, Side supports more than 1,500 partner agents across California, Texas and Florida.

The startup plans to spend its new capital on “significant hiring” and toward an expansion outside of California, Texas and Florida — the three markets in which it currently operates. It also plans to boost its 300-plus headcount by another 200 employees. 

9 investors discuss hurdles, opportunities and the impact of cloud vendors in enterprise data lakes

By Ron Miller

About a decade ago, I remember having a conversation with a friend about big data. At the time, we both agreed that it was the purview of large companies like Facebook, Yahoo and Google, and not something most companies would have to worry about.

As it turned out, we were both wrong. Within a short time, everyone would be dealing with big data. In fact, it turns out that huge amounts of data are the fuel of machine learning applications, something my friend and I didn’t foresee.

Frameworks were already emerging like Hadoop and Spark and concepts like the data warehouses were evolving. This was fine when it involved structured data like credit card info, but data warehouses weren’t designed for unstructured data you needed to build machine learning algorithms, and the concept of the data lake developed as a way to take unprocessed data and store until needed. It wasn’t sitting neatly in shelves in warehouses all labeled and organized, it was more amorphous and raw.

Over time, this idea caught the attention of the cloud vendors like Amazon, Microsoft and Google. What’s more, it caught the attention of investors as companies like Snowflake and Databricks built substantial companies on the data lake concept.

Even as that was happening startup founders began to identify other adjacent problems to attack like moving data into the data lake, cleaning it, processing it and funneling to applications and algorithms that could actually make use of that data. As this was happening, data science advanced outside of academia and became more mainstream inside businesses.

At that point there was a whole new modern ecosystem and when something like that happens, ideas develop, companies are built and investors come. We spoke to nine investors about the data lake idea and why they are so intrigued by it, the role of the cloud companies in this space, how an investor finds new companies in a maturing market and where the opportunities and challenges are in this lucrative area.

To learn about all of this, we queried the following investors:


Where are the opportunities for startups in the data lakes space with players like Snowflake and the cloud infrastructure vendors so firmly established?

Caryn Marooney: The data market is very large, driven by the opportunity to unlock value through digital transformation. Both the data lake and data warehouse architectures will be important over the long term because they solve different needs.

For established companies (think big banks, large brands) with significant existing data infrastructure, moving all their data to a data warehouse can be expensive and time consuming. For these companies, the data lake can be a good solution because it enables optionality and federated queries across data sources.

Dharmesh Thakker: Databricks (which Battery has invested in) and Snowflake have certainly become household names in the data lake and warehouse markets, respectively. But technical requirements and business needs are constantly shifting in these markets — and it’s important for both companies to continue to invest aggressively to maintain a competitive edge. They will have to keep innovating to continue to succeed.

Regardless of how this plays out, we feel excited about the ecosystem that’s emerging around these players (and others) given the massive data sprawl that’s occurring across cloud and on-premise workloads, and around a variety of data-storage vendors. We think there is a significant opportunity for vendors to continue to emerge as “unification layers” between data sources and different types of end users (including data scientists, data engineers, business analysts and others) in the form of integration middleware (cloud ELT vendors); real-time streaming and analytics; data governance and management; data security; and data monitoring. These markets shouldn’t be underestimated.

Casey Aylward: There are a handful of big opportunities in the data lake space even with many established cloud infrastructure players in the space:

  • Business intelligence/analytics/SQL may end up converging with machine learning/code like Scala or Python in certain products, but these domains have different end users and communities, programming language preferences and technical skills. Generally, architectural lock-ins are a big point of fear within core infrastructure. This is true for end users with their cloud providers, storage solutions, compute engines, etc. Solutions will be heterogeneous because of that and technology that enables this flexibility will be important.
  • As data moves around today, it is being reprocessed in each platform, which at scale is inefficient and expensive. There is an opportunity to build technology that allows users to move data around without rewriting transformations, data pipelines and stored procedures.
  • Finally, we’re seeing more traction around general data processing frameworks that are not MapReduce under the hood, especially in the Python data science ecosystem. This is a transition from Hadoop or even Spark, since they aren’t always best suited for unstructured, more modern algorithms.
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