Over the past two decades, the venture capital industry has exploded beyond anyone’s wildest imaginations.
What began as a sleepy industry in Boston and Menlo Park has now expanded to dozens of cities the world over. The National Venture Capital Association estimates that VCs deployed more than $130 billion in 2018 and 2019, and thousands of new investors have joined the ranks in recent years to find the next great startups.
All that activity, though, poses a dilemma for founders: Who actively writes checks? Who is a leader in a specific market or vertical? Who has the conviction to underwrite pathbreaking investments? Who, ultimately, do you want to have by your side for the next decade as your startup grows?
There are lists that rank VCs by their exit returns. There are lists that rank young VCs by their potential. There are lists of VCs who claim investment interest in various sectors. There are lists that try to ferret out deal volume, impact and other quantitative metrics. There are internal lists at accelerators that share collective wisdom between founders.
Who actively writes checks? Who is a leader in a specific market or vertical? Who has the conviction to underwrite pathbreaking investments? Who, ultimately, do you want to have by your side for the next decade as your startup grows?
All those lists and rankings have an important function to serve, but for all the compilations of investors out there, we couldn’t find a single one that publicly answered a simple yet vital question: Who are the VC investors who are leaders in specific verticals who should be a founder’s first stop during a fundraise?
Today’s venture industry is made up of thousands of investors with varying specialties, and far too many passive investors that are willing to participate in rounds but don’t actively participate in deals unless other investors have committed. Many don’t actively push to get deals done or don’t actively lead the charge to build a syndicate of investors.
With all that in mind, we’re excited to launch a new initiative that we hope will help answer those questions and help founders find that first check — The TechCrunch List.
Over the next few weeks, we’re going to be collecting data around which individual investors are actually willing to write the proverbial “first check” into a startup’s fundraising round and help catalyze deals for founders — whether it be seed, Series A or otherwise (i.e. out of your Series A investors, the first person who was willing to write the check and get the ball rolling with other investors). Once we’ve collected, cleaned and analyzed the data, we’ll publish lists of the most recommended “first check” investors across different verticals, investment stages and geographies, so founders can see which investors are potentially the best fit for their company.
Founders are used to being specialized; after all, they have to live and breathe their startups every single day. So it can be jarring to start talking to generalist investors who know little about a category and ask shallow questions only to render a judgment with irrelevant advice. One of the greatest impetuses for us to put together The TechCrunch List is that like founders, we also struggle to cut through the noise around the interests of individual VCs.
We’d argue that’s close to impossible. There is more spend on technology than ever before in history. Verticals are getting more competitive — market maps that used to have 10 to 50 companies have expanded to hundreds. The only way to compete today is to specialize, and that has never been more true for VCs.
In all, The TechCrunch List will publish the most recommended “first check” writers across 22 different categories, ranging from D2C & e-commerce brands to space, and everything in between. Through some data analysis around total investments in each space, we believe our 22 categories should cover the entirety or majority of the venture activity today.
To make this project a success and create a useful resource for founders, we need your help. We want to hear from company builders and we want to hear from them directly.
To make this project a success and create a useful resource for founders, we need your help. We want to hear from company builders and we want to hear from them directly. We will be collecting endorsements submitted by founders through the form linked here.
Through the form, founders will be asked to submit their name, their startup, the stage of company, the name of the one “first check” investor they want to endorse and a couple of minor logistical items. We are asking founders here for their on-the-record endorsement. We ask that you limit your recommendations to one (1) person per fundraise round.
While many investors may have helped you in your journey, we are specifically interested in the person who most helped you get a round underway and closed. The one who catalyzed your round. The one who guided you through the fundraise process. The one investor you would ultimately recommend to other founders who are trying to find their VC champion.
Our main goal is to help founders, dreamers and company builders find investors who will invest in them today, and with your help, we think we can. The TechCrunch List is not meant to identify every possible investor under the sun who might make an investment within a space, nor just the big household-name VCs whose reputations can sometimes seem more linked to their follower counts on Twitter as opposed to their bold term sheets.
Our hope is that this can be a go-to resource for founders looking to fundraise going forward, and with that in mind, we are very determined to improve the glaring representation gaps in the venture industry. It’s no secret that the world of VC still looks like a country-club membership roster, dominated by white men with strong opinions and loud voices. Looking at the data, it’s clear that there are groups that are particularly underrepresented, with only a small portion of the industry made up of Black, Latinx and female investors, for example.
We want to amplify these voices and we want to hear particularly from founders of color, female founders and other underrepresented groups. We also want to make sure our recommended investor lists are sufficiently representative and highlight underrepresented investors who might not have had equal opportunities in the past.
We want to help builders wade through the BS politics and fundraising annoyances that founders complain to us about on a daily basis, and help them identify qualified leads that are actually active, engaged and specialized and are the best fit to help founders raise money and grow now.
Thank you for your support. We’re excited to build The TechCrunch List with you — and for you.
The venture capital industry is less transparent today than at any time in recent memory.
For all the talk about expanding access and improving its sordid record on diversity, in reality, it has never been harder for founders to figure out who can even write a check to their startups in the first place.
When I first returned to TechCrunch after my second stint in venture capital, my first piece was entitled “The loss of first check investors.” While working in the venture capital industry, it was maddening to see — particularly at the pre-seed and seed stages — how few investors were really willing to go out on a limb and invest in founders before another VC had committed a check.
It’s only gotten worse in the past two years since that article, and the complexity comes from a number of different places. As our investigation showed more than a year ago, fewer and fewer venture rounds are being announced through SEC Form D filings.
There are almost no publicly accountable datasets left indicating who is writing checks in the venture industry and which companies are receiving those checks. While stealthiness is valid in the early days of a startup, the excuse wears thin after years.
The alchemy for a successful startup can be hard to parse. Sometimes, it’s who you know. Sometimes it’s where you go to school. And sometimes it’s what you do. In the case of La Haus, a startup that wants to bring U.S. tech-enabled real estate services to the Latin American real estate market, it’s all three.
The company was founded by Jerónimo Uribe and Rodrigo Sánchez Ríos, both graduates of Stanford University who previously founded and ran Jaguar Capital, a Colombian real estate development firm that had built over $350 million worth of retail and residential projects in the country.
Uribe, the son of the controversial Colombian President Daniel Uribe (who has been accused of financing paramilitary forces during Colombia’s long-running civil war and wire-tapping journalists and negotiators during the peace talks to end the conflict) and Sánchez Ríos, a former private equity professional at the multi-billion-dollar firm Lindsay Goldberg, were exposed to the perils and promise of real estate development with their former firm.
Now the two entrepreneurs are using their know-how, connections and a new technology stack to streamline the home-buying process.
It’s that ambition that caught the attention of Pete Flint, the founder of Trulia and now an investor at the venture capital firm NfX. Flint, an early investor in La Haus, saw the potential in La Haus to help the Latin American real estate market leapfrog the services available in the U.S. Spencer Rascoff, the co-founder of Zillow, also invested in the company.
“Latin America is very early on in its infancy of having really professional agents and really professional brokerages,” said Flint.
La Haus guides home buyers through every stage of the process, with its own agents and salespeople selling properties sourced from the company’s developer connections.
“The average home in the U.S. sells in six weeks or less,” said La Haus chief financial officer Sánchez Ríos in an interview. “That timing in Latin America is 14 months. That’s the dramatic difference. There is no infrastructure in Latin America as a whole.”
La Haus began by reaching out to the founders’ old colleagues in the real estate development industry and started listing new developments on its service. Now the company has a mix of existing and new properties for sale on its site and an expanded geographic footprint in both Colombia and Mexico.
“We have a portal… that acts as a lead-generating machine,” said Sánchez Ríos. “We aggregate listings, we vet them. We focus on new developers.”
The company has about 500 developers using the service to list properties in Colombia and another 200 in Mexico. So far, the company has facilitated more than 2,000 transactions through its platform in three years.
“Real estate now is turning fully digital and also in this market professionalizing,” said Flint. “The publicly traded online real estate companies are approaching all-time highs. People are just prizing the space that they spend their time in… the technologies from VR and digital walkthroughs to digital closes become not just a nice to have but a necessity. “
Capitalizing on the open field in the market, La Haus recently closed on $10 million in financing led by Kaszek Ventures, one of the leading funds in Latin America. That funding will be used to accelerate the company’s geographic expansion in response to increasing demand for digital solutions in response to the COVID-19 epidemic.
“Because of Covid-19, consumers’ willingness to conduct real estate transactions online has gone through the roof,” said Sánchez Ríos, in a statement. “Fortunately we were in the position to enable that, and we expect to see a permanent shift online in how people conduct all, or at least most, of the home-buying process. This funding gives us ample runway to build the end-to-end real estate experience for the post-Covid Latin America.”
Joining NFX, Rascoff, and Kaszek Ventures are a slew of investors including Acrew Capital, IMO Ventures and Beresford Ventures. Entrepreneurs like Nubank founder David Velez; Brian Requarth, the founder of Vivareal (now GrupoZap); and Hadi Partovi, CEO and founder of Code.org also participated in the financing.
“We backed La Haus because we saw many of the same ingredients that resulted in a fantastic outcome for many of our successful companies: A world-class team with complementary skills; a huge addressable market; and an almost religious zeal by the founders to solve a big problem with technology,” said Hernan Kazah, co-founder and managing partner of Kaszek Ventures.
African cross-border fintech startup Chipper Cash has closed a $13.8 million Series A funding round led by Deciens Capital and plans to hire 30 new staff globally.
The two came to America for academics, met in Iowa while studying at Grinnell College and ventured out to Silicon Valley for stints in big tech: Facebook for Serunjogi and Flickr and Yahoo! for Moujaled.
The startup call beckoned and after launching Chipper Cash in 2018, the duo convinced 500 Startups and and Liquid 2 Ventures — co-founded by American football legend Joe Montana — to back their company with seed funds.
Two years and $22 million in total capital raised later, Chipper Cash offers its mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.
“We’re now at over one and a half million users and doing over a $100 million dollars a month in volume,” Serunjogi told TechCrunch on a call.
Chipper Cash does not release audited financial data, but does share internal performance accounting with investors. Deciens Capital and Raptor Group co-led the startup’s Series A financing, with repeat support from 500 Startups and Liquid 2 Ventures .
Deciens Capital founder Dan Kimmerling confirmed the fund’s lead on the investment and review of Chipper Cash’s payment value and volume metrics.
Parallel to its P2P app, the startup also runs Chipper Checkout: a merchant-focused, fee-based mobile payment product that generates the revenue to support Chipper Cash’s free mobile-money business.
The company will use its latest round to hire up to 30 people across operations in San Francisco, Lagos, London, Nairobi and New York — according to Serunjogi.
Image Credits: Chipper Cash
Chipper Cash has already brought on a new compliance officer, Lisa Dawson, whose background includes stints with the U.S. Department of Treasury’s Financial Crimes Enforcement Network and Citigroup’s anti-money laundering department.
“You know in the world we live in the AML side is very important so it’s an area that we want to invest in from the get go,” said Serunjogi.
He confirmed Dawson’s role aligned with getting Chipper Cash ready to meet regulatory requirements for new markets, but declined to name specific countries.
With the round announcement, Chipper Cash also revealed a corporate social responsibility component to its business. Related to current U.S. events, the startup has formed the Chipper Fund for Black Lives.
“We’ve been huge beneficiaries of the generosity and openness of this country and its entrepreneurial spirit,” explained Serunjogi. “But growing up in Africa, we’ve were able to navigate [the U.S.] without the traumas and baggage our African American friends have gone through living in America.”
The Chipper Fund for Black Lives will give 5 to 10 grants of $5,000 to $10,000. “The plan is to give that to…people or causes who are furthering social justice reforms,” said Serunjogi.
In Africa, Chipper Cash has placed itself in the continent’s major digital payments markets. As a sector, fintech has become Africa’s highest funded tech space, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019.
Image Credits: TechCrunch
Those ventures, and a number of the continent’s established banks, are in a race to build market share through financial inclusion.
By several estimates — including The Global Findex Database — the continent is home to the largest percentage of the world’s unbanked population, with a sizable number of underbanked consumers and SMEs.
Increasingly, Nigeria has become the most significant fintech market in Africa, with the continent’s largest economy and population of 200 million.
Chipper Cash expanded there in 2019 and faces competition from a number of players, including local payments venture Paga. More recently, outside entrants have jumped into Nigeria’s fintech scene.
Over the next several years, expect to see market events — such as fails, acquisitions, or IPOs — determine how well funded fintech startups, including Chipper Cash, fare in Africa’s fintech arena.
Looking for a way to get your early-stage startup the massive attention it deserves? Look no further. TechCrunch is highlighting over 30 companies at Disrupt SF. Selected companies will get a video interview with TC editorial that will be shared with the masses. One of the best ways to get in front of thousands of influencers is by exhibiting in Startup Alley during Disrupt 2020. An even better way is to exhibit for free. Take the first step and apply to be a TC Top Pick.
Applying is easy, but earning the TC Top Pick designation — well, not so much. Discerning TechCrunch editors scour every application searching for creative, potential-laden startups that spark the imagination. Each startup that joins the ranks of the TC Top Picks wins an interview on TechCrunch and a free Digital Startup Alley Package. That’s where the massive exposure comes into play. Everyone — investors, tech media, founders, devs, engineers, R&D folks and more — wants to meet and greet those who made the grade.
Ready to take your shot? Here’s what you need to know. You’re eligible to apply if your pre-Series A startup falls into one of the following categories:
Social Impact + Education, Space, Artificial Intelligence + Machine Learning, Biotech + Healthtech, Enterprise + SaaS, Fintech, Mobility, Retail + E-commerce, Robotics, Hardware + IOT, and Security + Privacy.
TechCrunch editors will choose up to three startups in each category. Note the phrase “up to three.” They won’t fill the bucket without ample cause. What do you get with a Digital Startup Package? Plenty. For starters, it lets three people from your company exhibit from anywhere — remember, virtual Disrupt 2020 is a global event with a global audience. That’s huge.
You’ll demo like crazy — scheduling 1:1 video meetings with the previously mentioned masses — investors, media, potential customers, collaborators and the list goes on. Here’s more good news. You’ll have CrunchMatch, our AI-powered networking platform, to help make your networking easier and more efficient. The platform opens weeks ahead of Disrupt, giving you even more time to find and connect with people who can move your business forward.
Thanks to this next perk, the exposure you get as a TC Top Pick will stretch far beyond Disrupt. TechCrunch editors will create a video interview for each Top Pick startup and promote the videos across its social media platforms. It’s a long-term marketing tool you can use to pitch potential investors and clients.
Does your early-stage startup deserve massive attention? Take advantage of this massive opportunity to keep your startup on track and moving forward. Apply to be a TC Top Pick today.
Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.
Mukesh Ambani has courted the seventh major investor for his telecommunications business in just as many weeks.
On Sunday, Reliance Jio Platforms said it will sell a stake of 1.16% for $750 million to Abu Dhabi Investment Authority (ADIA), continuing its eye-catching run of investments at the height of a global pandemic.
The three-and-a-half-year-old digital unit of oil-to-retail giant Reliance Industries, the most valuable firm in India, has now secured nearly $13 billion from seven investors including Facebook, U.S. private equity firms Silver Lake, General Atlantic by selling close to 20% stake.
Abu Dhabi Investment Authority’s announcement is the third deal Reliance Jio Platforms, which is India’s largest telecom operator with over 388 million subscribers, has secured just this week. Jio Platforms is selling $1.2 billion stake to Abu Dhabi-based sovereign firm Mubadala, it said earlier this week. The company also announced that U.S private equity firm Silver Lake was pumping an additional $600 million to increase its stake in Jio to 2.1%.
The deal further captures the appeal of Jio Platforms to foreign investors looking for a slice of the world’s second-largest internet market. Jio, which launched its commercial operations in the second half of 2016, upended the market by offering mobile data and voice calls at cut-rate prices.
“The incumbent players (Airtel, Vodafone, Idea, BSNL) in India did the opposite of what companies in their position do elsewhere in the world when a new player emerges in the market. The existing players expect the newcomer to compete aggressively on price. They often lower their prices – some times steeply — to reduce the latter’s attractiveness. Newcomers often complain to the regulators about anti-competitive practices of incumbents,” said Mahesh Uppal, director of communications consultancy firm Com First.
“In India, the opposite happened. It was the existing players who ran to regulators with complaints. So we saw a major miscalculation from incumbent players that had already missed out on taking any major step before the launch of Jio,” he said.
India has emerged as one of the biggest global battlegrounds for Silicon Valley and Chinese firms that are looking to win the nation’s 1.3 billion people, most of whom remain without a smartphone and internet connection.
Media reports have claimed in recent weeks that Amazon is considering buying stakes worth at least $2 billion in Bharti Airtel, India’s third largest telecom operator, while Google has held talks for a similar deal in Vodafone Idea, the second largest telecom operator.
The new capital should help Ambani, India’s richest man, further solidify his commitment to investors when he pledged to cut Reliance’s net debt of about $21 billion to zero by early 2021 — in part because of the investments it has made to build Jio Platforms, said Uppal.
Its core business — oil refining and petrochemicals — has been hard hit by the coronavirus outbreak. Its net profit in the quarter that ended on March 31 fell by 37%.
“I am delighted that ADIA, with its track record of more than four decades of successful long-term value investing across the world, is partnering with Jio Platforms in its mission to take India to digital leadership and generate inclusive growth opportunities. This investment is a strong endorsement of our strategy and India’s potential,” said Ambani.
When Nigerian angel investor Tomi Davies backed his first company — Strika Entertainment in 2001 — he admits he wasn’t aware of his future role.
“I was just helping out friends. I didn’t know it was angel investing. I didn’t know there was a structure to it,” he said.
Seven years later, Davies received a 20x return on his first exit and a decade after that he’s recognized as an architect of early-stage investing across Africa.
Davies is President of The African Business Angel Network and continues to fund and mentor young tech entrepreneurs in multiple countries.
On a call with TechCrunch, he shared advice for startups on fundraising, surviving COVID-19 and suggestions for global investors on entering Africa.
Davies’ ascendance in fundraising runs parallel to the boom in startup formation and VC on the continent over the last decade.
When he began In 2001, there wasn’t much measurable venture or digital entrepreneurial activity in Sub-Saharan Africa, outside South Africa. In fact, there was limited data on VC investing on the continent until around five years ago.
An early Crunchbase assisted study estimated VC to African startups annually grew from $40 million in 2012 to $500 million by 2015. A recent assessment by investment firm Partech tallied $2 billion going to the continent’s digital entrepreneurs in 2019, across top markets Nigeria, South Africa and Kenya.
Image Credits: TechCrunch
There are now thousands of VC backed startup entrepreneurs across the continent descending on every conceivable use-case — from fintech to on demand electric motorcycle mobility.
Increasingly, Davies’ home country of Nigeria has become the continent’s unofficial capital for venture investment and startup formation, given its market thesis of having Africa’s largest economy and population of 200 million people.
Even with the boom in VC to the continent’s startups — which has drawn investors such as Goldman Sachs and Steve Case — for years panels at African tech conferences have echoed the need for more early-stage funding options.
Davies has worked to meet that. He came to investing at the friends and family level after receiving an MBA at the University of Miami and an earlier career that spanned roles in management consulting, telecoms and IT.
After emerging as one of the early angels to Africa’s startups, supporting the continent’s innovation ecosystem became a mission for the Nigerian investor.
“My raison d’etre became, and will remain until the day I die, tech in African,” Davies said on a call from Lagos.
In his role as President of The African Angel Business Network, or ABAN, Davies has worked with a team to build out a local investor web across the continent.
“ABAN is very simply a network of networks…we have 49 networks in 33 African countries,” he explained.
Those include Lagos Angel Network, which Davies co-founded, Cairo Angels and Angel Investor Ethiopia, announced in Addis Ababa in 2019.
Tomi Davies (L) judges pitches with Cellulant CEO Ken Njoroge at Startup Ethiopia 2019, Image Credits: Jake Bright
ABAN establishes certain guidelines and criteria for how member networks operate, but each chapter sets its own investment terms, according to Davies.
For example, ABAN affiliated Dakar Angel Network — founded in 2018 to support startups in French speaking Africa — offers seed investments of between $25,000 to $100,000 to early-stage ventures.
Where and how startups seek funds from ABAN’s family of networks depends on where they operate. “One thing I say to everybody, from presidents to business people to investors, is Africa is about cities,” Davies said.
“When you know which city your looking to invest in or seek investment in, automatically we’ll be in a position to say, ‘here’s your network.'”
For the Lagos Angel Network in Nigeria, the team has a pitch night the third Thursday of each month with a 30 day rule. “Before you leave, you’ll hear if we’re interested or not. If we’re interested, we’ve got 30 days to make you an offer,” explained Davies.
In addition to his work with ABAN, Davies continues to invest in his own portfolio of startups — now at 32 ventures — and is a regular judge on Africa’s tech competition circuit.
He’s developed a framework to assess companies and shared parts of it with TechCrunch.
Tomi Davies (center) at Startup Battlefield Africa 2017
“What I say to any startup raising is the first thing any investor is listening to is how do I get my money back. That’s question number one, ‘How do I get my exit?,'” he said.
Davies stressed three things to satisfy that question: “The product service offering that you have, the customers who see value in that product service offering and the nature of the relationship in terms of channel and price offering,” he said.
“That’s what you’re always tinkering with after you start with some kind of value proposition.”
Davies referenced the increased significance of referrals, given the coronavirus has cancelled a number of events and limited mobility to pitch in person in Africa’s top VC markets.
“Because of COVID-19, networks have become critically important. Because investors can’t touch, can’t feel, can’t see [founders] people are looking now for referential integrity, ‘Who sent me this deck?,'” Davies said.
On how a coronavirus induced Nigerian recession may impact startups, Davies flagged the country’s non-stop informal commercial activity — and the adaptability of Nigerian entrepreneurs — as factors that could carry ventures through.
“There’s a significant chunk of the economy that’s in the informal market. So even if you look back at the recessions we’ve had…it hasn’t been felt on the streets,” he said.
Davies is also collaborating with partners on creating working capital solutions for startups whose revenues have been impacted by slowdown.
Tomi Davies is direct about his desire to draw new partners from tech centers such as Silicon Valley, into early-stage investing in Africa.
“We are always looking for co-investors and I speak on behalf of all 49 networks in ABAN,” he said. Davies highlighted the local expertise each network brings to their market as a benefit to VCs looking to invest on the continent through an African Business Angel Network affiliate.
OurCrowd, the Israeli crowdfunding venture investment platform, today announced the launch of its Pandemic Innovation Fund, with plans to raise a total of $100 million. The money will be invested in “urgent technological solutions for the medical, business, educational and social needs triggered by global pandemics and other health emergencies.”
The fund will invest in startups that look at developing vaccines and tests, as well as therapeutics, remote monitoring, digital health and personal protection. In addition, it’ll also look at startups that focus on continuity and disruption management that focus on remote working, distance learning, robotic process automation, home exercise and cybersecurity. That gives the fund a pretty broad mandate, but it’ll also allow the partners to spread the investments across a variety of industries.
“The rapid spread of the coronavirus has validated our vision of a connected digital world poised to solve any crisis through global communication and rapid response,” said OurCrowd CEO Jon Medved. “To ensure that we get the world back on track, there is now an urgent need for innovation. Technology can help us overcome many of the problems resulting from the crisis. It’s time for tech to move fast and fix things.”
OurCrowd has already invested in a number of companies that would have been a good fit for the new fund if they came along today, including MigVax, which recently raised $12 million for its coronavirus vaccine efforts, as well as Sight Diagnostics, SaNOtize, TytoCare and others.
The principals for the new fund are healthcare exec Dr. Morris Laster, OurCrowd venture partner and chairman of its medical advisory board Dr. Morry Blumenfeld and OurCrowd venture partner David Sokolic.
“Together we must tackle the current pandemic as well as plan for future ones, because this story is just beginning. Entrepreneurs are uniquely skilled to provide fast and effective solutions to some of our greatest challenges. Our new fund will create the bridge between the innovations we need and the far-sighted investors able to provide the resources required to improve our world,” said Laster.
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.
Daniel Graf has had a long career in the tech industry. From founding his own startup in the mid-2000s to working at Google, then Twitter, and finally Uber, the tech business has made him extremely wealthy.
But after leaving Uber, he wasn’t necessarily interested in working at another business… At least, not until he spent an afternoon in the spring of 2019 with an old friend, General Catalyst managing director Hemant Taneja, walking in San Francisco’s South Park neighborhood and hearing Taneja talk about a new startup called Mindstrong.
Taneja told Graf that by the fall of that year, he’d be working at Mindstrong… and Taneja was right.
“I was intrigued by healthtech previously,” said Graf. “The problem always was…and it sounds a little too money oriented.. but if there’s no clear visibility around who pays who in a startup, the startup isn’t going to work,” and that was always his issue with healthcare businesses.
NEW YORK, NY – MAY 21: Daniel Graf accepts a Webby award for Google Maps for Iphone at the 17th Annual Webby Awards at Cipriani Wall Street on May 21, 2013 in New York City. (Photo by Bryan Bedder/Getty Images for The Webby Awards)
With Mindstrong, which announced today that it has raised $100 million in new financing, the issue of who pays is clear.
So Graf joined the company in November as chief executive, taking over from Paul Dagum, who remains with Mindstrong as its chief scientific officer.
“Daniel joined the company as it was moving from pure R&D into being something commercially available,” said Taneja, in an email. “In healthcare, it’s increasingly important to understand how to build for the consumer and that’s where Daniel’s experience and background comes in. Paul remains a core part of the team because none of this happens without the science.”
The company, which has developed a digital platform for providing therapy to patients with severe mental illnesses ranging from schizophrenia to obsessive compulsive disorders, is looking to tackle a problem that costs the American healthcare system $20 billion per month, Graf said.
Unlike companies like Headspace and Calm that have focused on the mental wellness market for the mass consumer, Mindstrong is focused on people with severe mental health conditions, said Graf. That means people who are either bipolar, schizophrenic or have major depressive disorder.
It’s a much larger population than most Americans think and they face a critical problem in their ability to receive adequate care, Graf said.
“1 in 5 adults experience mental illness, 1 in 25 experience serious mental illness, and the pandemic is making these numbers worse. Meanwhile, more than 60% of US counties don’t have a single practicing psychiatrist,” said Joe Lonsdale, the founder of 8VC, and investor in the latest Mindstrong Health round, in a statement.
Dagum, Mindstrong Health’s founder has been working on the issue of how to provide better access and monitor for indications of potential episodes of distress since 2013. The company’s technology provides a range of monitoring and measurement tools using digital biomarkers that are currently being validated through clinical trials, according to Graf.
“We’re passively measuring the usage of the phone and the timing of the keyboard strokes to measure how [a patient] is doing,” Graf said. These smartphone interactions can provide data around mental acuity and emotional valence, according to Graf — and can provide signs that someone might be having problems.
The company also provides access to therapists via phone and video consultations or text-based asynchronous communications, based on user preference.
“Think of us more as a virtual hospital… our care pathways are super complex for this population,” said Graf. “We’re not aware of other startups working with this population. These folks, the best you get right now is the county mental health.”
Mindstrong’s Series C raise included participation from new and existing investors, including General Catalyst, ARCH Ventures, Optum Ventures, Foresite Capital, 8VC, What If Ventures and Bezos Expeditions, along with other, undisclosed investors.
And while mental health is the company’s current focus, the platform for care delivery that the company is building has broader implications for the industry, especially in the wake of the COVID-19 epidemic, according to General Catalyst managing director, Taneja.
“I expect that we’ll see discoveries in biomarker tech like Mindstrong’s that could be applied horizontally across almost any area of healthcare,” Taneja said in an email. “Because healthcare is so broad and varied, going vertical like Mindstrong is makes a lot of sense. There’s opportunity to become a successful and very impactful company by staying narrowly focused and solving some really hard problems for even a smaller part of the overall population.”
Tesla has officially dismissed a lawsuit filed earlier this month against Alameda County that sought to force the reopening of its factory in Fremont, California.
The dismissal, which was granted Wednesday, closes the loop on a battle between Tesla CEO Elon Musk and county health and law enforcement officials. The lawsuit filed May 9, hours after Musk threatened to sue and move operations out of state, sought injunctive and declaratory relief against Alameda County. Reuters was the first to report the dismissal.
The lawsuit was filed after Tesla’s plans to resume production at the Fremont factory were thwarted by the county’s decision to extend a stay-at-home order issued to curb the spread of COVID-19, the disease caused by coronavirus.
Musk had based the reopening on new guidance issued by California Gov. Gavin Newsom that allows manufacturers to resume operations. However, the governor’s guidance included a warning that local governments could keep more restrictive rules in place. Alameda County, along with several other Bay Area counties and cities, extended the stay-at-home orders through the end of May. The orders were revised and did ease some of the restrictions. However, it did not lift the order for manufacturing.
After several days of Twitter rants and negotiations with the county, Tesla was allowed to begin to reopen its factory as long as it adhered to approved safety measures.
The novel coronavirus has been devastating for many people, families and communities — and the consequences are still being calculated. The tech world has seen wave after wave of layoffs, sometimes multiple waves at one company only weeks apart. Some startups have lost nearly all their revenue, and depending on their cash reserves, have little hope of recovering.
For VCs, the last two months have been an exercise in triage.
Partners have gone through their entire investment portfolios to identify the winners, what’s salvageable and what (at least in their minds) has no hope of resuscitation. If you are in the first two groups, it’s back to whatever normal looks like in the midst of a global pandemic and a deep economic recession.
But what if you suddenly get a call informing you that your investor — perhaps your biggest champion to date — is going to cut the rope and write you off entirely?
That’s what we are going to talk about today.
Before we go anywhere, be thankful if you even know how your investors are judging your startup. Most, unfortunately, will couch the terms they use (“we will be engaging less” or perhaps “we are unlikely to do our pro rata going forward”) rather than just saying directly, “we are writing you off; don’t call us — we’ll call you.” That’s polite and face-saving for all parties, but the lack of transparency can make decisions down the road much harder. It’s better to know where you stand, even if the news is hard.
The first step to approaching this situation is to get your bearings. Much like during a fundraise process, it’s not uncommon for different investors on your cap table to reach different conclusions about your startup’s potential. One investor may write you off, while another has you marked at a more neutral valuation or even positively. This can absolutely be frustrating, and given the emotion of this situation, it can be hard to rationally accept that an investor who once believed in you no longer does so.
Sphero just announced that it has spun off another company. Once again, the new startup has a decidedly different focus from its parent company’s core of education-focused products. While still a robotics company at its heart, the underwhelmingly named Company Six will create robotic systems designed for first responders and other humans whose work requires them to put themselves in harm’s way.
Also snuck into the press into the press release almost as an an after thought, is the appointment of Paul Copioli as the new CEO of Sphero, effective immediately. The executive is an industry veteran, who has worked at VEX Robotics, industrial robotics giant Fanuc and Lockheed Martin. Most recently, he was the President and COO of LittleBits when the startup was acquired by Sphero.
Copioli takes over after the company’s exit from the consumer space. Sphero has pivoted almost entirely into the educational market, with the LittleBits acquisition making up an important piece of the puzzle.
“It’s an honor to lead the Sphero team as we continue to pave the way for accessible robots, STEAM and computer science education for kids around the world,” he says in a release “With our focus on education and our mission to inspire the creators of tomorrow, Sphero has a long-standing place in our school systems and beyond.”
Spinning Company Six off as its own independent entity is seemingly part of the new focus. The seeds of the startups were formed by former CEO Paul Berberian’s Public Safety Division within Sphero. He has since shifted to become Chairman of both companies, while former Sphero COO Jim Booth will head Company Six as COO. Got all that?
Company Six has already closed a $3 million seemed round, lead by Spider Capital, with Sphero investors Foundry Group and Techstars also on-board. Like previous Sphero spinoff Misty, information about Company Six is minimal at the time of its announcement. The new company’s site is essentially bare. We only know it will be focused on creating robotic systems for first responders, defense workers and other dangerous jobs. The news echoes iRobot’s 2016 spinoff of its military wing, Endeavor.
By applying the experience used to bring more than 4 million robots to market at Sphero, the Company Six team believes it can create products that are not only robust and feature-rich enough for professional applications, but also affordable enough to be adopted by the majority, rather than the minority, of civilian and military personnel.
More news to follow soon, no doubt.
Apollo Agriculture believes it can attain profits by helping Kenya’s smallholder farmers maximize theirs.
That’s the mission of the Nairobi-based startup that raised $6 million in Series A funding led by Anthemis.
Founded in 2016, Apollo Agriculture offers a mobile-based product suit for farmers that includes working capital, data analysis for higher crop yields and options to purchase key inputs and equipment.
“It’s everything a farmer needs to succeed. It’s the seeds and fertilizer they need to plant, the advice they need to manage that product over the course of the season. The insurance they need to protect themselves in case of a bad year…and then, ultimately, the financing,” Apollo Agriculture CEO Eli Pollak told TechCrunch on a call.
Apollo’s addressable market includes the many smallholder farmers across Kenya’s population of 53 million. The problem it’s helping them solve is a lack of access to the tech and resources to achieve better results on their plots.
The startup has engineered its own app, platform and outreach program to connect with Kenya’s farmers. Apollo uses M-Pesa mobile money, machine learning and satellite data to guide the credit and products it offers them.
The company — which was a TechCrunch Startup Battlefield Africa 2018 finalist — has served over 40,000 farmers since inception, with 25,000 of those paying relationships coming in 2020, according to Pollak.
Apollo Agriculture co-founders Benjamin Njenga and Eli Pollak
Apollo Agriculture generates revenues on the sale of farm products and earning margins on financing. “The farm pays a fixed price for the package, which comes due at harvest…that includes everything and there’s no hidden fees,” said Pollak.
On deploying the $6 million in Series A financing, “It’s really about continuing to invest in growth. We feel like we’ve got a great product. We’ve got great reviews by customers and want to just keep scaling it,” he said. That means hiring, investing in Apollo’s tech and growing the startup’s sales and marketing efforts.
“Number two is really strengthening our balance sheet to be able to continue raising the working capital that we need to lend to customers,” Pollak said.
For the moment, expansion in Africa beyond Kenya is in the cards but not in the near-term. “That’s absolutely on the roadmap,” said Pollak. “But like all businesses, everything is a bit in flux right now. So some of our plans for immediate expansion are on a temporary pause as we wait to see things shake out with with COVID.”
Apollo Agriculture’s drive to boost the output and earnings of Africa’s smallholder farmers is born out of the common interests of its co-founders.
Pollak is an American who studied engineering at Stanford University and went to work in agronomy in the U.S. with The Climate Corporation. “That was how I got excited about Apollo. I would look at other markets and say, ‘wow, they’re farming 20% more acres of maize, or corn, across Africa but farmers are producing dramatically less than U.S. farmers,'” said Pollak.
Pollak’s colleague, co-founder Benjamin Njenga, found inspiration from his experience in his upbringing. “I grew up on a farm in a Kenyan village. My mother, a smallholder farmer, used to plant with low-quality seeds and no fertilizer and harvested only five bags per acre each year,” he told the audience in 2018 at Startup Battlefield Africa in Lagos.
Image Credits: Apollo Agriculture”We knew if she’d used fertilizer and hybrid seeds her production would double, making it easier to pay my school fees.” Njenga went on to explain that she couldn’t access the credit to buy those tools, which prompted the motivation for Apollo Agriculture.
Anthemis Exponential Ventures’ Vica Manos confirmed its lead on Apollo’s latest raise. The UK-based VC firm — which invests mostly in the Europe and the U.S. — has also backed South African fintech company Jumo and will continue to consider investments in African startups, Manos told TechCrunch.
Additional investors in Apollo Agriculture’s Series A round included Accion Venture Lab, Leaps by Bayer and Flourish Ventures.
While agriculture is the leading employer in Africa, it hasn’t attracted the same attention from venture firms or founders as fintech, logistics or e-commerce. The continent’s agtech startups lagged those sectors in investment, according to Disrupt Africa and WeeTracker’s 2019 funding reports.
Some notable agtech ventures that have gained VC include Nigeria’s Farmcrowdy, Hello Tractor — which has partnered with IBM — and Twiga Foods, a Goldman-backed B2B agriculture supply chain startup based in Nairobi.
On whether Apollo Agriculture sees Twiga as a competitor, CEO Eli Pollak suggested collaboration. “Twiga could be a company that in the future we could potentially partner with,” he said.
“We’re partnering with farmers to produce lots of high-quality crops, and they could potentially be a great partner in helping those farmers access stable prices for those…yields.”
TikTok enlists a big name from Disney as its new CEO, Walmart is shuttering its Jet e-commerce brand and EasyJet admits to a major data breach.
Here’s your Daily Crunch for May 19, 2020.
Mayer’s role involved overseeing Disney’s streaming strategy, including the launch of Disney+ last fall, which has already grown to more than 50 million subscribers. He was also seen as a potential successor to Disney CEO Bob Iger; instead, Disney Parks, Experiences and Products Chairman Bob Chapek was named CEO in a sudden announcement in February.
Mayer was likely an attractive choice to lead TikTok not just because of his streaming success, but also because hiring a high-profile American executive could help address politicians’ security concerns about the app’s Chinese ownership.
Walmart tried to put a positive spin on the news, saying, “Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com. The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy.”
EasyJet, the U.K.’s largest airline, said hackers have accessed the travel details of 9 million customers. The budget airline said 2,200 customers also had their credit card details accessed in the data breach, but passport records were not accessed.
The results paint a stunning picture of an industry on the verge of breaking away from a market correction. Our six respondents described numerous opportunities for startups and investors, but cautioned that this atmosphere will not last long. (Extra Crunch membership required.)
Where upstart companies aren’t cutting staff, they are often reducing spend — which is bad news for Brex, since it makes money on purchases made through its startup-tailored corporate card. But co-founder Henrique Dubugras seems largely unbothered on how the pandemic impacts Brex’s future.
Yesterday afternoon, Vroom, an online car buying service, filed to go public. What does a private, car-focused e-commerce company worth $1.5 billion look like under the hood? (Extra Crunch membership required.)
Founded in 2014 and previously called Verve, Pollen operates in the influencer or “word-of-mouth” marketing space. The marketplace lets friends or “members” discover and book travel, events and other experiences — and in turn helps promoters use word-of-mouth recommendations to sell tickets.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.
Founder Yiming Zhang will continue to serve as ByteDance CEO, while TikTok President Alex Zhu (formerly the co-founder of the predecessor app Musical.ly) becomes ByteDance’s vice president of product and strategy.
“I’m thrilled to have the opportunity to join the amazing team at ByteDance,” Mayer said in a statement. “Like everyone else, I’ve been impressed watching the company build something incredibly rare in TikTok – a creative, positive online global community – and I’m excited to help lead the next phase of ByteDance’s journey as the company continues to expand its breadth of products across every region of the world.”
The news was first reported by The New York Times and subsequently confirmed in announcements from ByteDance and Disney.
Mayer’s role involved overseeing Disney’s streaming strategy, including the launch of Disney+ last fall, which has already grown to more than 50 million subscribers. He was also seen as a potential successor to Disney CEO Bob Iger; instead, Disney Parks, Experiences and Products Chairman Bob Chapek was named CEO in a sudden announcement in February.
Mayer was likely an attractive choice to lead TikTok not just because of his streaming success, but also because hiring a high-profile American executive could help deflect politicians’ security concerns about the app’s Chinese ownership.
Over at Disney, Rebecca Campbell (most recently president of Disneyland Resort, who also worked on the Disney+ launch as the company’s president for Europe, Middle East and Africa) is taking over Mayer’s role, while Josh D’Amaro is taking on Chapek’s old job as chairman of Disney parks, experiences and products.
In a statement, Chapek said:
As we look to grow our direct-to-consumer business and continue to expand into new markets, I can think of no one better suited to lead this effort than Rebecca. She is an exceptionally talented and dedicated leader with a wealth of experience in media, operations and international businesses. She played a critical role in the launch of Disney+ globally while overseeing the EMEA region, and her strong business acumen and creative vision will be invaluable in taking our successful and well-established streaming services into the future.
European startups are calling for more flexibility in EU state aid rules to allow national governments to provide liquidity for the region’s fledgling digital businesses during the COVID-19 crisis.
In a joint letter addressed to Commission EVP Margrethe Vestager, more than a dozen startup associations from across the bloc have called for rules to be adapted to ensure digital businesses are not blocked from receiving any emergency state aid.
In March the Commission applied an update to EU state aid rules clarifying how Member States can provide support to homegrown businesses during the coronavirus emergency.
However the startup association representatives co-signing the latter — which include reps from Coadec in the UK, France Digitale, Germany’s Bundesverband Deutsche Startups, Startup Poland and several others — are concerned the framework is being too narrowly drawn where digital upstarts are concerned.
They point out that startups may be intentionally operating at a loss as a calculated bet on gaining scale down the line, making the current rules a poor fit.
“Startups across Europe report that the Temporary Framework for State Aid is not yet giving enough flexibility to Member States to support startup ecosystems,” they write. “The definition of an ‘undertaking in difficulty’ is intended to apply to loss-making businesses. Such a definition will often be enough to deny support being given to such a business. However many startups are loss-making by design in their first years, as they are taking a calculated bet on exponential growth and associated job growth that will emerge in the following years.
“Only taking the current cash flow into account belittles the economic potential of these startups and prevents them from receiving much-needed support. In doing so it can undermine the post COVID-19 recovery, as it is today’s loss making startups which will be the driver for economic and job growth in the future.”
The letter goes on to call for startups to “receive the support that other economic actors are also receiving”.
“Startups provide a key opportunity for our economies and societies to recover as we come out of COVID,” they suggest, adding: “They will play a central part in re-growing our economy and crucially in doing so on a more carbon-neutral footing.”
We reached out to the Commission for a request for comment but at the time of writing it had not responded.
While it might a bit of a contradiction for VC-backed tech businesses which may choose to operate at a loss during ‘normal’ times to be calling for liquidity help now, Benedikt Blomeyer, EU policy director at Allied for Startups — one of a number of startup associations signing the letter — told us the argument is simply that Europe’s startups should be able to expect the same kind of support that is being extended to other types of businesses.
A number of EU Member States have laid out major support programs for startups to date — such as France’s $4.3BN liquidity support plan, announced in March; and a match fund revealed last month in the UK (which remains an EU member until the end of this year).
But the contention appears to be that liquidity isn’t flowing to all the European startups that need it, nor arriving in a timely enough way.
“For startups, loss-making doesn’t mean that it is necessarily a failing business,” Blomeyer told TechCrunch. “The bigger picture is that we are looking at startup ecosystems as key providers of jobs and economic growth coming out of the crisis. Some startups will fail, just like other businesses. But the question is whether startups should be able to access the same kind of support that other companies can to help them survive this crisis. We believe they should.”
Commenting on the issue in a statement, Paolo Palmigiano, head of competition, EU & trade for law firm Taylor Wessing, agreed the EU state aid rules may struggle to accommodate Internet businesses.
“The criteria introduced by the Commission in the Framework that a company must be viable as of 31 Dec 2019 makes sense in the old brick and mortar world. A company which would have gone in any case bankrupt, even without the current crisis, should not receive aid. The criteria start to be more complex and causes difficulties for tech companies which might not be profitable at the time although they could be in the future,” he said.
“The state aid rules were created in the 60s at a time when the single market did not exist and Europe had a lot of old-style industries (like steel). We need to see how the Commission react but I can see them struggling – how do you distinguish a loss making tech company which in any case would have gone bankrupt from a loss making company that will become profitable in the short term?”
Asked how it believes the Commission should replace the current viability criteria and assess which startups merit help and which don’t, Allied for Startups’ Blomeyer called for a blanket exemption for startups founded over the last half decade or more.
“There could be a clear exemption from the UID test for companies that have been set up in the last 5-7 years,” he suggested. “We need to underline that this is an unprecedented crisis that requires extraordinary measures. So while in normal times a regular process of assessing whether/how to assess startups might have worked, now the ecosystems that built them are melting away before our eyes because of the barriers. The basic conundrum is that it is unclear whether a loss-making startup is indeed not a viable business. This needs resolving.”
In what now feels like an earlier age late last year — as European Commission president Ursula von der Leyen was taking up her five-year mandate — tech-driven change was identified as one of her key policy priorities, with digitization and a green deal taking center stage, alongside a push for European tech sovereignty and support for homegrown startups to scale up.
So if Europe’s startups are feeling overlooked now, in the middle of an unprecedented economic shock, that hardly reflects well on the Commission’s claimed high tech policy goals.
A comprehensive study into how startups will work in the future, in the wake of the global COVID-9 pandemic, has been launched by UK non-profit Founders Forum. The initiative comes in the wake of a number of organizations announcing extended offices closures and ‘Work From Home’ policies.
The group hopes the COVID-19 Workplace Survey will give the startup community actionable data in order that founders can make critical decisions regarding their return to work strategy and service providers (including accelerator programmes, co-working spaces and investors) can best support startups in a “post-COVID-19” world.
The initiative was started by Brent Hoberman, co-Founder and Executive Chairman of Founders Forum, Founders Factory and firstminute capital.
Speaking to TechCrunch, Hoberman said: “Founders are having to make critical decisions about their return to work strategy in isolation”. He says the survey aims to measure “the current action being taken by founders of early-stage businesses regarding their office spaces and remote work strategies” as well as “employee sentiment about returning to the workplace”. This will then help “guide both founders and service providers on what can be done to improve the situation for these startups and their employees”.
The COVID-19 Workplace Survey is an anonymous survey designed to answer these core questions:
Hoberman explained: “We want founders to know the answer to ‘How are other Founders changing their workplace strategy?’”.
He added that founders also need to understand how each employee’s remote work environment influences their opinion on remote work policies going forward, given there is no one-size-fits-all solution: “What do different demographics really want in the way of remote work?”.
For service providers like co-working spaces, they will also find out what startups will want from their workplaces (e.g flexible desk space, shared meeting rooms) in the post-lockdown environment.
The survey will run for the next 10 days and the results will be published on TechCrunch .
A survey of UK angel investors regarding their investment strategies during the COVID-19 pandemic has found that over 65% of angels investors are continuing to invest in startups during Lockdown, but with predominantly new deals. Many are completing more deals and increasing their cheque size by as much as 18%.
However, the pandemic has reduced their total capital to invest in 2020 by just over 61%, while just under 60% think the effects of COVID-19 will negatively affect their ability to invest for the rest of 2020. Over 250 angels completed the full survey in the last two weeks, after TechCrunch exclusively published it.
These are the findings of new UK initiative Activate our Angels (AoA). The initiative comes just as the UK government’s “Future Fund” for startups, which has been criticized as being inadequate for the needs of Angel and Seed-stage startups, is poised to be launched some time this week.
AoA was started by Nick Thain the former CEO and co-founder of GiveMeSport, which was acquired last year and includes representatives from 7percent Ventures, Forward Partners, Portfolio Ventures, ICE, Foundrs, Punk Money, Humanity, Culture Gene, Barndance, Bindi Karia and Stakeholderz.
Activate our Angels started its campaign just under two weeks’ ago with the goal to give founders actionable data to help them make funding decisions, during and post-lockdown.
The survey shows that while angels are currently investing, founders will need to lock this funding down fast, as 59% of angels surveyed says their future investing will be negatively affected the longer the lockdown goes on.
This becomes more important if a startup has raised under £250,000.
Furthermore, the survey concluded that angels are investing 18% more per deal and have increased the frequency of deals in Lockdown by over 122% from 0.27 deals per month in 2019 to 0.6 deals per month in the last 3 months.
Angels are looking for increased runway and revenue generative businesses, and they’re seeing reduced valuations and smaller rounds.
Additionally, angels are told the survey that they have 61% of the capital to invest in 2020 compared to 2019. This suggests that angels are “making hay while the lockdown-sun is shining” said the survey.
Consequently, angels will have significantly less money for the rest of 2020.
For start-ups that have not raised yet, the findings suggest they should do their first round as soon as possible.
For start-ups who have already raised, this impending angel capital crunch ￼makes initiatives such as the forthcoming government-backed Future Fund as important as ever, says the survey.
“If angels are not investing in Lockdown, they are holding cash and waiting to be confident that COVID-19 is over. The best way to contact them is via an introduction/recommendation, email or linkedIn, not via Social Media,” it added.
The results from the survey have been summarised below.
● 66.7% of Angel investors are still investing during Lockdown
○ 77% of those are investing in new deals
○ 23% of those in existing portfolio deals
● 33.3% of angels are not investing in lockdown
○ 71% of those are reviewing deals
○ 29% of those are not investing at all
● 17.6% more is being invested per deal during Lockdown.
○ £23,071 invested per deal in Lockdown
○ £19,620 invested per deal in 2019
● Angels completed an average of 1.81 deals during lockdown, angels completed an average of 3.24 deals in the whole of 2019
○ 1 deal every 3-4 weeks (approx.), since Lockdown on 23rd March 2020
○ 1 deal approximately every 7-8 weeks (approx.), in last 1-3 months
○ 1 deal every 3-4 months (approx.) in last 4-12 months
○ 1 deal every 3-4 months (approx.) in 2019
● 58.1% of angels believe that Covid-19 will have a negative impact on their ability to invest in 2020, 27.2% No Change and 14.7% said it would have a positive impact
● 51.4% of angels surveyed said they would be investing Less in 2020
○ of those angels said they would invest 61% less capital in 2020 compared to
● 33.3% of angels are not investing in Lockdown
○ of those 47.6% are only going to invest again when they are confident Covid- 19 crisis is over
○ of those 28.6% are not planning to invest again.
● 64.9% of angels are changing the business sectors they’re looking at including; Healthcare, Fintech and gaming
● 54.1% of angels have changed their investment requirements, with longer runway, revenue generative and recurring revenue being the most important factors.
○ 46.9% of angels had no change in investment requirements
● 68% of angels have seen deal terms with reduced valuations as a result of Covid-19 and 35% have seen smaller Investment rounds.
● When it comes to getting in contact with angels, 72% want to be contacted via recommendations/introductions. ○ 54% via email ○ 32.6% LinkedIn ○ 30.9% Angel network. ○ Facebook and Twitter being the least effective way to contact angels with less than 3% of respondents selecting this.
● 70% of angels said SEIS/EIS was important, very important or critical to their investment decisions, of those 58% said they would not invest more if the SEIS allowance was increased to the £200k from the current £100k cap.
Tesla officials visited two sites in Tulsa, Oklahoma this week to search for a location for its future and fifth gigafactory that will produce its all-electric Cybertruck and Model Y crossover, a source familiar with the situation told TechCrunch.
Company representatives also visited Austin. A final decision has not been made, but Austin and Tulsa are among the finalists, according to multiple sources. The AP also reported Tulsa and Austin as top picks for the gigafactory.
Tesla expects to make a decision as soon as next month, and “certainly within three months,” CEO Elon Musk said April 29 during the company’s first quarter earnings call.
Musk tweeted in March that Tesla was scouting locations for a so-called “Cybertruck Gigafactory.” Musk said, at the time, that the factory would be located in the central part of the U.S. and would be used to produce Model Y crossovers for the East Coast market as well as the cybertruck.
Not long after the tweets, TechCrunch learned that Tesla was eyeing Nashville and had been in talks with officials there. Tesla informed Nashville officials this week that the city is out of the running for its gigafactory location, according to one source.
An email was sent to Tesla requesting comment. The article will be updated if Tesla responds.
Tulsa Mayor G.T. Bynum’s office issued a statement neither confirms nor denies the talks.
“While I can not comment on potential projects, it is clear that Tesla and Tulsa were forged in the same spirit,” Bynum said in an emailed statement. “Both founded by pioneers who dreamt big and made it happen. Both trying to change the world with a new kind of energy. Both investing big in what matters most: people. Tulsa is a city that doesn’t stifle entrepreneurs – we revere them. And as Tesla continues to rapidly change transportation all around the world, I can’t imagine a better place for them to further that important work than Green Country.”
This next gigafactory, wherever it is located, will likely be larger and produce multiple products, CFO Zachary Kirkhorn said during the same April 29 call.
“That’s under a belief that there’s significant efficiencies by having as much as possible and similar product lines under the same roof and as much vertical integration as possible all in one facility,” Kirkhorn said.
Musk has referred to these as future plants as “tera” factories — a nod to terawatt, or more specifically a terawatt-hour of battery capacity. The company’s first “gigafactory” is in Sparks, Nevada. The massive structure, which has surpassed. 1.9 million square feet, is where Tesla produces battery packs and electric motors for its Model 3 vehicles. The company has a joint venture with Panasonic, which is making the lithium-ion cells.
Tesla dubbed the Sparks plant a “gigafactory” because the company said at the time it would be capable of producing 35 gigawatt-hours per year of battery cells.
Tesla assembles its Model S, Model X and Model 3 vehicles in Fremont, Calif. at a factory that was once home to GM and Toyota’s New United Motor Manufacturing Inc (NUMMI) operation. Tesla acquired the factory in 2010. The first Model S was produced at the factory in June 2012.
“Gigafactory 2” in Buffalo, New York, is where Tesla produces solar cells and modules. The company’s third gigafactory is located in Shanghai, China and started producing the Model 3 late last year. The first deliveries began in early January.
Tesla is now preparing to build another factory near Berlin. Once complete, this German factory will produce the Model 3 and Model Y for the European market.