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Growth capital investor Kennet raises $250M fund, backed by Edmond de Rothschild

By Mike Butcher

Venture capital is “not the only fruit” for entrepreneurs, as the often quieter ‘Growth Capital’ can also see great returns for entrepreneurs who prefer to retain a lot of ownership and control but are also willing to bootstrap over a longer period in order to reach revenues and profits. With the COVID-19 pandemic pushing millions of people online, tech investors of all classes are now reaping the dividends in this accelerated, Coronavirus-powered transition to digital.

Thus it is that Kennet Partners, a leading European technology growth equity investor, has raised $250m (€223m) for its fifth fund, ‘Kennet V’, in partnership with Edmond de Rothschild Private Equity, the Private Equity division of the Edmond de Rothschild Group.

Kennet is perhaps best know for its involvement in companies such as Receipt Bank, Spatial Networks and its exist from Vlocity, IntelePeer, and MedeAnalytics. It’s also invested in Eloomi, Codility, Nuxeo and Rimilia. In raising this new fund, Kennet says it exceeded its target and secured new investors from across Europe and Asia.

The Kennet V fund has already started to deploy the capital into new investments in B2B, SaaS across the UK, Europe and the US.

Typically, Kennet invests in the first external funding that companies receive and is used to finance sales and marketing expansion, particularly internationally. It’s cumulative assets managed are approximately $1 billion.

Hillel Zidel, managing director, Kennet Partners, told me by phone that: “We were fortunate in that most of the capital was raised just before Covid hit. But we were still able to bring additional investors in. Had we been designing a fund for now, then this would have been it, because people have rushed towards technology out of necessity. So this has brought forward digitization but at least five years.”

Johnny El-Hachem, CEO, Edmond de Rothschild Private Equity said in a statement: “We partnered with Kennet, because we liked the dynamism of the team coupled with their strategy of financing businesses providing mission-critical technology solutions. The COVID crisis has underscored the importance of many of these tools to business continuity.”

Private equity firm Great Hill Partners acquires stock media service Storyblocks

By Frederic Lardinois

Storyblocks, the subscription-based stock media service, today announced that it has been acquired by private equity firm Great Hill Partners. The firm previously backed companies like Wayfair (and then exited that specific investment in 2017) and Custom Ink. Great Hill also acquired Gizmodo Media Group in 2019. Storyblocks and Great Hill did not disclose the price of the acquisition.

Storyblocks was founded in 2009 and raised about $18.5 million since its launch. Over the years, it went through a few changes. Its early focus was on video content and until 2017, it operated under the VideoBlocks moniker (before that, it was FootageFirm). The company’s focus was always on its buffet-style subscription service, though it also offered an “a la carte” marketplace for one-time purchases. Only a small fraction of users actually bought from the marketplace, so last year, it doubled down on its subscription library.

“Our mission was really all about this idea of affordability and access,” Storyblocks CEO TJ Leonard told me ahead of today’s announcement. “That’s core to our DNA. It always will be. But as we look to the future, we see ourselves supporting our customers across their entire workflow as they work to keep up with the content demand of their audience. You wrap all that together and it felt like the moment was right to take the next step. Update, North Atlantic Capital, QED [Investors] — all of our early investors — have done an awesome job supporting the business over the last eight years to help us get to this point. But Great Hill brings a track record — and I think an expertise — that is perfect for this next stage for us.”

Leonard, who just like the rest of the team is staying on, noted that Storyblocks is profitable and wasn’t actively trying to raise any capital to sustain its business or looking for an exit. Instead, he argued, this sale was simply a logical progression.

“We’ve long felt that even though the business is more than ten years old, there’s still a lot of chapters left in our story. We’re really excited to continue to chase them down,” he said. “And we’ve said all along that if we were going to find a new partner, our first criteria was that they needed to believe in the same mission and vision that we had, they needed to believe the same market opportunity that we saw — and they needed to feel like we had the right model and the right team to go take advantage of that opportunity. As we got to know Great Hill better, it was clear that we were really well aligned across all those important points.”

He also noted that he tends to think of Great Hill as “a growth-oriented private equity investor, almost a growth equity investor masquerading with a private equity structure” given that the firm tends to acquire companies but then also often spins them out again. “All of our conversations have been oriented around how do we change what’s working today and accelerate it. How do we take our long term strategic growth plan that sets certain goals over the next five years and accomplish them in three,” he said.

Storyblocks will continue to operate as usual and continue to invest in its content libraries, Leonard told me. COVID-19 only made the demand for stock footage go up (Storyblocks now sees twice as many downloads per week compared to the start of 2020), but the company was already seeing a growing demand for its service before the pandemic, in large parts because the demand for video content only continues to increase.

“This doesn’t feel like an ending. It feels like we have a lot of good work to do,” said Leonard. “It feels like in a lot of ways, the market is just kind of catching up to what we’ve believed since our founding, which is that if you can help people create more high-quality video content, do it at an affordable price, do it in a way that saves them time, then there’s a huge opportunity out there.”

Who’s writing first checks into startups?

By Arman Tabatabai

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.

How we’re rebuilding the VC industry

By Arman Tabatabai

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.

EU digs in on digital tax plan, after US quits talks

By Natasha Lomas

The European Commission has reiterated its commitment to pushing ahead with a regional plan for taxing digital services after the US quit talks aimed at finding agreement on reforming tax rules — ramping up the prospects of a trade war.

Yesterday talks between the EU and the US on a digital services tax broke down after U.S. treasury secretary, Steven Mnuchin, walked out — saying they’d failed to make any progress, per Reuters.

The EU has been eyeing levying a tax of between 2% and 6% on the local revenues of platform giants.

Today the European Commission dug in in response to the US move, with commissioner Paolo Gentiloni reiterating the need for “one digital tax” to adapt to what he dubbed “the reality of the new century” — and calling for “understanding” in the global negotiation.

However he also repeated the Commission’s warning that it will push ahead alone if necessary, saying that if the US’ decision to quit talks means achieving global consensus impossible it will put “a new European proposal on the table”.

C’è bisogno di una #DigitalTax adeguata alla realtà del nuovo secolo. Serve un’intesa nel negoziato globale. Se lo stop americano la rendesse impossibile, la @EU_Commission metterà sul tavolo una nuova proposta europea.

— Paolo Gentiloni (@PaoloGentiloni) June 18, 2020

Following the break down of talks, France also warned it will go ahead with a digital tax on tech giants this year — reversing an earlier suspension that had been intended to grease the negotiations.

The New York Times reports French finance minister, Bruno Le Maire, describing the US walk-out as “a provocation”, and complaining about the country “systematically threatening” allies with sanctions.

The issue of ‘fair taxes’ for platforms has been slow burning in Europe for years, with politicians grilling tech execs in public over how little they contribute to national coffers and even urging the public to boycott services like Amazon (with little success).

Updating the tax system to account for digital giants is front and center for Ursula von der Leyen’s Commission — which is responding to the widespread regional public anger over how little tech giants pay in relation to the local revenue they generate.

European Commission president von der Leyen, who took up her mandate at the back end of last year, has said “urgent” reform of the tax system is needed — warning at the start of 2020 that the European Union would be prepared to go it alone on “a fair digital tax” if no global accord was reached by the end of this year.

At the same time, a number of European countries have been pushing ahead with their own proposals to tax big tech — including the UK, which started levying a 2% digital services tax on local revenue in April; and France, which has set out a plan to tax tech giants 3% of their local revenues.

This gives the Commission another clear reason to act, given its raison d’être is to reduce fragmentation of the EU’s Single Market.

Although it faces internal challenges on achieving agreement across Member States, given some smaller economies have used low national corporate tax rates to attract inward investment, including from tech giants.

The US, meanwhile, has not been sitting on its hands as European governments move ahead to set their own platform taxes. The Trump administration has been throwing its weight around — arguing US companies are being unfairly targeted by the taxes and warning that it could retaliate with up to 100% tariffs on countries that go ahead. Though it has yet to do so.

On the digital tax reform issue the US has said it wants a multilateral agreement via the OECD on a global minimum. And a petite entente cordiale was reached between France and the US last summer when president Emmanuel Macron agreed the French tech tax would be scraped once the OECD came up with a global fix.

However with Trump’s negotiators pulling out of international tax talks with the EU the prospect of a global understanding on a very divisive issue looks further away than ever.

Though the UK said today it remains committed to a global solution, per Reuters which quotes a treasury spokesman.

Earlier this month the US also launched a formal investigation into new or proposed digital taxes in the EU, including the UK’s levy and the EU’s proposals, and plans set out by a number of other EU countries, claiming they “unfairly target” U.S. tech companies — lining up a pipeline of fresh attacks on national plans.

Brazil’s BizCapital raises $12 million for its online lending service

By Jonathan Shieber

BizCapital, an online lender based in Brazil, has raised $12 million from a clutch of investors including the German development finance institution, the corporate venture capital fund of MercadoLibre and existing investors Quona Capital, Monashees, Chromo INvest and 42K Investments.

“This latest round reinforces investors’ confidence in BizCapital’s ability to innovate in the Latin American credit market amid challenging circumstances caused by Covid-19,” said Francisco Ferreira, the company’s chief executive, in a statement. “We have seen four times as many business credit inquiries on our site year over year, and we are ready to serve them.” 

Founded in 2016, the company pitches itself as a fast and reliable way to access financing for working capital. It already has more than 5,000 customers across 1,200 cities in Brazil, according to a statement.

The company said it would use the money to develop new products for Brazilian small and medium-sized businesses and will expand into new distribution channels.

“With this new round of capital, we will continue to widen our product lineup, helping entrepreneurs during the entire lifecycle of their companies,” said Ferreira, in a statement. “There’s never been a more important time for innovation.” 

In a reflection of their American counterparts, Brazil’s venture capital firms had slowed down the pace of their investments, but now it seems like a slew of new deals are coming to market.

The investment reflects the longterm confidence that investors have in the increasingly central position e-commerce and technology-enabled services will have in the future of the Latin American economy.

 

 

Bird launches navigation app to help riders stay in the right lane

By Kirsten Korosec

Bird is rolling out a new standalone app, called Bird Maps, in Paris and Tel Aviv that will provide turn-by-turn navigation for riders who want to use bike or micromobility lanes for their entire trip.

The app, which will be available on iOS and Android, was created using navigation software from Trailze, an Israeli startup that has mapped the urban grid with micromobility in mind. Bird has not determined how long it will pilot Bird Maps. The results of the pilot will determine testing in other cities, a spokesperson told TechCrunch.

Bird Maps prioritizes bike lanes, wide roads or paths with less traffic and offers visual and, more importantly, audio directions to riders. A Bird spokesperson said the company expects the audio feature will be the main method people use in the app. Bird is not testing phone mounts, which would be the only safe way for riders to view the navigation.

“With millions of people embracing shared electric micromobility and cities everywhere committing more resources to the development of bike and micromobility lanes, we wanted to ensure that riders could more easily navigate and utilize city infrastructure,” Patrick Studener, head of Bird EMEA said in a statement. “By working with Trailze to pilot Bird Maps in Paris and Tel Aviv – two cities that have recently committed to and developed additional bike lanes – we are making it easier for riders to feel more comfortable and safe as they move about their cities without relying upon cars and hope to pave the way for increased adoption and usage of clean transportation.”

Making it easier and safer to use scooters will help boost ridership, and as a result, generate more revenue. But it also builds goodwill with cities that have grown weary of scooter, bike-share and ride-hailing companies creating new problems and running afoul of local regulations. If Bird can provide a safe alternative to riding on sidewalks, the scooter company could get a warmer welcome from cities.

Bird and Trailze see more opportunity to find safe pathways for scooters and bikes in the wake of the COVID-19 pandemic and the related lockdowns, which prompted more than 300 cities to introduce plans to designate some 2,600 additional miles of slow streets and temporary bike lanes.

Bird said this maps app follows other initiatives it has launched that use technology to improve, safety such as Helmet Safety and Warm up mode.

Remessa Online raises $20 million to become the TransferWise of Latin America

By Jonathan Shieber

Remessa Online, the Brazilian money transfer service, said it has closed on $20 million in financing from one of the leading Latin American venture capital firms, Kaszek Ventures, and Accel Partners’ Kevin Efrusy, the architect of the famed venture capital firm’s Latin American investments.

Since its launch in 2016, Remessa Online has provided a pipeline for over $2 billion worth of international transfers for small and medium-sized businesses in the country. The company now boasts over 300,000 customers from 100 countries and says its fees are typically one eighth the cost of the local money transfer options.

“We understand that transferring money is just the beginning, and we are eager to build a global financial system that will make life easier for global citizens and businesses alike,” Liuzzi said.

Money transfer services are a huge business that startups have spent the last decade trying to improve in Europe and the US. European money transfer company, TransferWise has raised over $770 million alone in its bid to unseat the incumbents in the market. Meanwhile, the business-to-business cross-border payment gateway, Payoneer, has raised roughly $270 million to provide those services to small businesses.

Remessa Online already boasts a powerful group of investors and advisors including André Penha, the co-founder of apartment rental company Quinto Andar, and the former chief operating officer of Kraft Heinz USA, Fabio Armaganijan. With the new investment from Kaszek, firm co-founder Hernan Kazah, the co-founder of the Latin American e-commerce giant, MercadoLibre, and co-founder of Kaszek Ventures, will take a seat on the company’s board.

“We developed an online solution that is faster and substantially cheaper than traditional banking platforms, with digital and scalable processes and an omnichannel customer support offered by a team of experts”, said Remessa Online’s co-founder and strategy director Alexandre Liuzzi, in a statement.

Last year, the company expanded its money transfer service to the UK and Europe, allowing Brazilians abroad to invest money, pay for education or rent housing without documentation or paperwork. The company’s accounts now come with an International Banking Account Number that allows its customers to receive money in nine currencies.

With the new year, Remessa has added additional services for small and medium-sized businesses and expanded its geographic footprint to include Argentina and Chile.

Latin American countries — especially Brazil — have been hit hard by the COVID-19 pandemic. While much of the economy is still reeling, the broad trends that are moving consumers and businesses to adopt ecommerce and mobile payment solutions are just as pronounced in the region as they are in the US, according to investors like Kazah.

“This crisis is accelerating the digitization process of several industries around the world and Remessa Online has taken the lead to transform the cross-border segment in Brazil , specially for SMBs,” he said in a statement.

Founded in 2016,  by Fernando Pavani, Alexandre Liuzzi, Stefano Milo, and Marcio William, Remessa Online was born from the founders own needs to find an easier way to send and receive money from abroad, according to the company.

In 2018, after a $4 million investment from Global Founders Capital and MAR Ventures, the company developed international processing capabilities and a more robust compliance tool kit to adhere to international anti-money laundering and know your customer standards. In the latter half of 2019, the company entered the SMB market with the launch of a toolkit for businesses that had been typically ignored by larger financial services institutions in Brazil.

“We believe in a world without physical borders. Our mission is to help our clients with their global financial needs, so that they can focus on what matters: their international dreams,” said Liuzzi.

As venture firms struggle with diversity, the Kauffman Fellows program is grooming candidates to help

By Jonathan Shieber

Recognizing the need for a more diverse venture capital industry, the Kauffman Fellows program is looking to take steps to train its most diverse class of would-be investors and is adding to its board to foreground diversity and inclusion going forward, the nonprofit said today.

A longtime resource for startup founders and the venture capital industry and a voice for bringing the tools of venture investment to a broader national stage, Kauffman Fellows is bringing diversity to its boardroom with the appointment of Marlon Nichols as one of the organization’s newest directors. Nichols, a founder of MaC Venture Capital, joins Melissa Richlen, who heads up limited partner investments in private equity and venture capital for the MacArthur Foundation, and Allen Taylor, whose work at Endeavor and Endeavor Catalyst is focused on investing in entrepreneurs in undercapitalized markets in the U.S. and around the world.

“This organization is taking diversity very seriously and it’s starting from the top down. The board is now 25% Black and 38% women. And the new class of Kauffman Fellows is the most diverse class in the 25-year history of the program,” said Nichols. 

A graduate of the Fellows program, Nichols said the new emphasis on diversity will help to get more new fund managers exposure to a network of dealmakers and potential limited partners.

“It’s setting them up for longevity in the industry so as those funds grow, they’re going to grow from a diverse base, and that foundation in diversity will lead to investments in more diverse founders,” said Nichols. “Instead of setting up a committee to talk about diversity, [the Fellows] is pulling them into the game and setting them up by giving them the resources to succeed in the game.”

The twenty-fifth class of Kauffman Fellows is also the most diverse cohort the Fellows has assembled. Out of 61 fellows, 41% are women and 49% are people of color, while 11% are underrepresented minorities.

“Since our inception, we have believed that in order to best understand the world’s challenges and continue to catalyze innovation, the future of the VC industry must be diverse and more reflective of society as a whole. This has been at the core of the Kauffman Fellows mission, and it started with an extremely diverse group of Fellows in our charter class 25 years ago,” the Fellows said in a statement. “Over the years, we have measured the importance of a trusted diverse network and how it impacts the success and longevity of the best investors in the industry. Research has shown that Kauffman Fellows not only have larger returns than the industry average, but they stay in the industry 15+ years post-fellowship, which is 2X the minimum number of years it takes to recognize success in venture capital.”

Founders: Land a video interview with TC

By Neesha A. Tambe

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.

Halal fintech startup Wahed closes $25M led by Saudi Aramco’s investment arm

By Mike Butcher

New York-based fintech startup Wahed (meaning “One” in Arabic) describes itself as a digital Islamic investment platform and as the world’s first “halal robo adviser.” It has now closed a $25 million investment round led by Saudi Aramco Entrepreneurship Ventures (also known as Wa’ed Ventures), a venture capital investment arm of oil giant Saudi Aramco.

Existing investors BECO and CueBall Capital participated, as well as Dubai Cultiv8, and Rasameel. The funds will be used to expand internationally, including developing the company’s subsidiary in Saudi Arabia. The platform is currently running in the US and UK, and has more than 100,000 clients globally. It plans to grow in the largest Muslim markets including Indonesia, Nigeria, India and the CIS. The three-year-old company has already received a license to operate in Saudi Arabia, and aims to get regulatory approval in 20 countries.

According to Crunchbase, Wahed has now raised a total of $40 million in funding since its 2015 founding by Junaid Wahedna.

Last October, Wahed launched in Malaysia after the Malaysian Securities Commission awarded the company the country’s first Islamic Robo Advisory license. The firm is also considering listing its Islamic ETF on the Saudi stock exchange

Ethical investment and Islamic finance is growing in popularity in Muslim countries so long as it is in line with Islamic ethics, so Wahed looks set to benefit.

Commenting on the investment, Junaid Wahedna, CEO of Wahed, said: “We’re excited to have the support of Aramco Ventures as we foray into the Saudi market. We consider Aramco a strategic long term partner in both the Kingdom and the rest of the world.”

Wassim Basrawi, Managing Director at Wa’ed Ventures, said: “We believe in Wahed’s mission to provide ethical investing. The company has taken the lead in delivering investment services to one of the world’s fastest-growing sectors – Islamic Finance. Wahed is also, in the true spirit of FinTech, helping to broaden the investment landscape. This latest funding round will enable Wahed to make Saudi their regional MENA hub and contribute towards a fast-growing FinTech ecosystem.”

OurCrowd launches $100M Pandemic Innovation Fund

By Frederic Lardinois

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.

How startups can leverage elastic services for cost optimization

By Walter Thompson
Joey Lei Contributor
Joey Lei is director of service management at Synoptek, a global systems integrator and managed services provider. Prior to joining Synoptek, he was a lead product manager for Dell EMC’s Data Protection Division and was a founding product manager for Dell EMC PowerProtect Data Manager, Dell EMC’s newest generation data protection and data management solution.

Due to COVID-19, business continuity has been put to the test for many companies in the manufacturing, agriculture, transport, hospitality, energy and retail sectors. Cost reduction is the primary focus of companies in these sectors due to massive losses in revenue caused by this pandemic. The other side of the crisis is, however, significantly different.

Companies in industries such as medical, government and financial services, as well as cloud-native tech startups that are providing essential services, have experienced a considerable increase in their operational demands — leading to rising operational costs. Irrespective of the industry your company belongs to, and whether your company is experiencing reduced or increased operations, cost optimization is a reality for all companies to ensure a sustained existence.

One of the most reliable measures for cost optimization at this stage is to leverage elastic services designed to grow or shrink according to demand, such as cloud and managed services. A modern product with a cloud-native architecture can auto-scale cloud consumption to mitigate lost operational demand. What may not have been obvious to startup leaders is a strategy often employed by incumbent, mature enterprises — achieving cost optimization by leveraging managed services providers (MSPs). MSPs enable organizations to repurpose full-time staff members from impacted operations to more strategic product lines or initiatives.

Why companies need cost optimization in the long run

Uber UK launches Work Hub for drivers to find other gig jobs during COVID-19

By Natasha Lomas

Uber UK has launched a Work Hub for drivers to view a selection of temporary work opportunities with other companies as a way to supplement pandemic-hit ride-hailing earnings during the coronavirus crisis.

The Work Hub sits within the Uber driver app and displays offers of work from third party providers — including jobs that involve using a car to make deliveries — offering alternative gigs to drivers whose earnings have been affected by weak demand for ride-hailing during the COVID-19 pandemic.

The ride-hailing giant rolled out a similar feature in the US back in April, offering drivers there the ability to respond to job postings from around a dozen other companies, as well as the ability to receive orders through other Uber units: Eats, Freight and Works.

The UK flavor of the feature has fewer external suppliers (three at launch) — and seemingly no other internal Uber work gigs on offer.

From today, Uber said UK drivers can access “thousands” of “temporary job postings” and “flexible earning opportunities” with other companies — initially delivery firms Hermes and Yodel.

The recruiter, Adecco Group, is also offering temp work via the UK Work Hub for drivers.

“We’ll continue to add new partnerships and listings to the Work Hub as we find more opportunities for you, so check the Driver app regularly for updates,” Uber adds in a blog post announcing the launch.

The company has previously emailed UK drivers encouraging them to sign up for delivery work with the online supermarket Ocado, as demand for grocery delivery has surged during the COVID-19 pandemic.

But it’s now made this signposting more formal, via the Work Hub — and says the “thousands” of jobs are additional to any Ocado opportunities it had already emailed to UK drivers.

It’s not clear why Uber UK is not offering drivers the ability to pick up Uber Eats orders to tide themselves over.

However the Eats vs Uber ride-hailing labor force in the country likely has relatively little overlap, with cycle and motorbike couriers dominating UK Eats deliveries. Additionally, no UK cities keen to encourage extra cars to hit the streets right now — so Uber may have multiple reasons not to want to cross those streams in Europe.

“Drivers are doing essential work to keep our communities moving as we fight this virus, but with fewer trips happening they need more ways to earn. With the Work Hub, drivers can find these additional earning opportunities with other companies, working flexibly around driving on the Uber app if they choose to do so,” said Jamie Heywood, Uber’s regional GM for Northern and Eastern Europe, in a statement.

The Work Hub initiative generally looks intended to encourage drivers to supplement (pandemic-hit) Uber earnings with other gig jobs. And — cynics might say — discourage an essential platform workforce from looking elsewhere for permanent work.

Uber will need its pool of drivers to be there still, owning a car and available for gig work, when normalcy returns if it’s ride-hailing business is to bounce back.

Aside from the US and the UK, other markets where Uber has already launched the Work Hub for drivers are Australia, Chile, Costa Rica, Canada, Mexico, Portugal and South Africa.

While the feature has been born in a crisis, Uber had already made moves into the broader temp work space — launching a shift finder app, called Uber Works, in Chicago last year. And the company told us it sees longer term opportunity for the Work Hub, as a vehicle to broaden the type of earning opportunities it can put in front of drivers, saying the initiative will continue to evolve.

Belvo scores $10M from Founders Fund and Kaszek to scale its API for financial services

By Anna Escher

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.  

A 12 year journey ends as Skimlinks is acquired by retail marketing platform Connexity

By Mike Butcher

Connexity, a lead-gen platform for online retailers, has acquired Skimlinks, a UK platform for publishers to make money through affiliate links. Terms of the deal were undisclosed. According to Crunchbase, Skimlinks had raised a total of $25.5M and reached a late a Series C stage of funding, the final round coming from Frog Capital which invested $16M.

An early Seed investor was Sussex Place Ventures way back in 2009. For context, San Francisco-based competitor VigLink, which has raised a total of $27.3 million, remains an independent company.

Sources in the VC industry indicate that the acquisition was a “decent one” that may even have hit three figures, with a possible a large-ish earnout and equity component. Certainly, this was not a ‘firesale,’ by any means.

Although coy on the price of the acquisition, co-founder and President Alicia Navarro said: “Every party, including many staff, has made money out of this deal and is very happy.”

Cofounded in 2007 by Navarro and Joe Stepniewski, Skimlinks rode the wave of online activity as publishers struggled to monetize their ballooning online operations in the mid-teens of the last decade. Affiliate programs allow publishers to get a cut of the revenue when their link drives a purchase on an e-commerce site. Skimlinks makes the process easier through automation.

Originally spinning out of an idea Navarro had about consumer online commerce habits — a startup called Skimbit which resembled Pinterest in some respects — it had scaled to the US by the time I interviewed Navarro in 2012.

In 2013 it took on a growth financing round led by Greycroft Partners.

A couple of years later the platform was driving more than $500 million in e-commerce sales for publishers.

By 2016 editorial content from its publisher network of 1.5M domains had driven nearly $1 billion of ecommerce transactions and the company said it was on a path to profitability.

In 2018 Navarro stepped away from the CEO position, taking on the role of President, and handed the reigns to Sebastien Blanc, previously Chief Revenue Officer.

Speaking to TechCrunch, Navarro said the COVID-19 pandemic had accelerated the growth of the business as more publishers in its network monetized the massively increased online traffic, brought about by global lockdown policies.

Bill Glass, CEO of Connexity said in a statement: “Our solutions help retailers acquire new customers and sales while enabling ecommerce-oriented publishers to monetize engaged shopping audiences. Combining the companies creates more scale on both sides of the marketplace.”

Sebastien Blanc, CEO of Skimlinks said: “By marrying Connexity’s CPC search budgets with the broad CPA affiliate monetization coverage of Skimlinks, we provide best-in-class monetization for publishers. Our combined scale will fortify Connexity as a critically important customer acquisition channel for retailers and will strengthen publisher monetization solutions.”

And what of the founders? Stepniewski has taken on a senior role with Facebook UK. Navarro is now working on a fresh startup she bills as “AirBnB-meets-Calm as a service” allowing founders or executives to unplug and get into what is known as ‘Deep Work’.

She is now in the process of early-stage fundraising, so her entrepreneurial journey is clearly going to continue.

Greyparrot bags $2.2M seed to scale its AI for waste management

By Natasha Lomas

London-based Greyparrot, which uses computer vision AI to scale efficient processing of recycling, has bagged £1.825 million (~$2.2M) in seed funding, topping up the $1.2M in pre-seed funding it had raised previously. The latest round is led by early stage European industrial tech investor Speedinvest, with participation from UK-based early stage b2b investor, Force Over Mass.

The 2019 founded startup — and TechCrunch Disrupt SF battlefield alum — has trained a series of machine learning models to recognize different types of waste, such as glass, paper, cardboard, newspapers, cans and different types of plastics, in order to make sorting recycling more efficient, applying digitization and automation to the waste management industry.

Greyparrot points out that some 60% of the 2BN tonnes of solid waste produced globally each year ends up in open dumps and landfill, causing major environmental impact. While global recycling rates are just 14% — a consequence of inefficient recycling systems, rising labour costs, and strict quality requirements imposed on recycled material. Hence the major opportunity the team has lit on for applying waste recognition software to boost recycling efficiency, reduce impurities and support scalability.

By embedding their hardware agnostic software into industrial recycling processes Greyparrot says it can offer real-time analysis on all waste flows, thereby increasing efficiency while enabling a facility to provide quality guarantee to buyers, mitigating against risk.

Currently less than 1% of waste is monitored and audited, per the startup, given the expensive involved in doing those tasks manually. So this is an application of AI that’s not so much taking over a human job as doing something humans essentially don’t bother with, to the detriment of the environment and its resources.

Greyparrot’s first product is an Automated Waste Monitoring System which is currently deployed on moving conveyor belts in sorting facilities to measure large waste flows — automating the identification of different types of waste, as well as providing composition information and analytics to help facilities increase recycling rates.

It partnered with ACI, the largest recycling system integrator in South Korea, to work on early product-market fit. It says the new funding will be used to further develop its product and scale across global markets. It’s also collaborating with suppliers of next-gen systems such as smart bins and sorting robots to integrate its software.

“One of the key problems we are solving is the lack of data,” said Mikela Druckman, co-founder & CEO of Greyparrot in a statement. “We see increasing demand from consumers, brands, governments and waste managers for better insights to transition to a more circular economy. There is an urgent opportunity to optimise waste management with further digitisation and automation using deep learning.”

“Waste is not only a massive market — it builds up to a global crisis. With an increase in both world population and per capita consumption, waste management is critical to sustaining our way of living. Greyparrot’s solution has proven to bring down recycling costs and help plants recover more waste. Ultimately it unlocks the value of waste and creates a measurable impact for the environment,” added Marie-Hélène Ametsreiter, lead partner at Speedinvest Industry, in another statement.

Greyparrot is sitting pretty in another aspect — aligning with several strategic areas of focus for the European Union, which has made digitization of legacy industries, industrial data sharing, investment in AI, plus a green transition to a circular economy core planks of its policy plan for the next five+ years. Just yesterday the Commission announced a €750BN pan-EU support proposal to feed such transitions as part of a wider coronavirus recovery plan for the trading bloc. 

DHL acquires stake in Link Commerce developed by MallforAfrica

By Jake Bright

DHL has acquired a minority stake in Link Commerce, a turn-key e-commerce company that grew out of MallforAfrica.com — a Nigerian digital-retail startup.

Link Commerce offers a white-label solution for doing digital-sales in emerging markets.

Retailers can plug into the company’s e-commerce platform to create a web-based storefront that manages payments and logistics.

With the investment one of the world’s largest delivery services looks to build a broader client-base globally using a business built in Africa.

DHL is trying to get their hands more into global e-commerce…across the world and they figured our platform was a good way to do it,” Link Commerce CEO Chris Folayan told TechCrunch.

Folayan originally founded MallforAfrica, which paved the way for Link Commerce. DHL’s investment in the company —  the amount of which is undisclosed — has roots in collaboration with Folayan’s original startup.

MallforAfrica began a partnership with DHL in 2015 and launched DHL Africa eShop in 2019. The sales platform is powered by Link Commerce and has brought more than 200 U.S. and U.K. sellers — from Neiman Marcus to Carters — online to African consumers in 34 countries.

DHL AFRICA ESHOP MAP

Image Credits: DHL

Similar to MallforAfrica’s model, Africa eShop allows users to purchase goods directly from the websites of any of the app’s partners.

For the global retailers selling on Africa eShop, the hurdles that held back distribution on the continent — payments, currency risk, logistics — are handled by the underlying Link Commerce operating platform.

“That’s what our service does. It takes care of that whole ecosystem to enable global e-commerce to exist, no matter what country you’re in,” Folayan told TechCrunch in 2019.

Link Commerce was built out of Folayan’s startup MallforAfrica.com, which he founded in 2011 after studying and working in the U.S.

A common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home — highlighted a gap between supply and demand for the continent’s consumer markets.

With MallforAfrica Folayan aimed to close that gap by allowing people on the continent to purchase goods from global retailers directly online.

MallforAfrica and Link Commerce founder Chris Folayan, Image Credits: MallforAfrica

The e-commerce site went on to onboard over 250 global retailers and now employs 30 people at order processing facilities in Oregon and the UK.

MallforAfrica’s Africa eShop expansion put it on a footing to compete with Pan African e-commerce leader Jumia — which went public on the NYSE in 2019 — and China’s Alibaba, anticipated to enter online retail on the continent at some point.

The Link Commerce, DHL deal won’t change that, but Folayan has shifted the hirearchy of his businesses to make Link Commerce the lead operation and Africa one market of many.

Image Credits: Link Commerce

“We changed the structure. So now Link Commerce is above MallforAfrica and MallforAfrica is now powered by Link Commerce,” Folayan explained on a recent call.

“Right now the focus is on Africa…but we’re taking this global,” he added.

Folayan and DHL plan to extend the platform to emerging markets around the world, where other companies may look to grow by wrapping an online store, payments, and logistics solution around their core business.

That could include any large entity that wants to launch an international e-commerce site, according to Folayan.

“Link Commerce is focused on banks, mobile companies, shipping companies and partnering with them to expand globally,” he said.

That’s a big leap from Folayan’s original venture, MallforAfrica.com

What began as a startup to sell brand name jeans and sneakers online in Africa, has pivoted to a global e-commerce fulfillment business partially owned by logistics giant DHL.

Omidyar-backed Spero Ventures invests in Mexico City’s Mati, a startup pitching ID-verification

By Jonathan Shieber

Spero Ventures, the venture capital firm backed by eBay founder Pierre Omidyar, has gone to Mexico City for its latest investment, backing the identity verification technology developer Mati.

Launched in San Francisco, the two co-founders Filip Victor and Amaury Soviche, decided to relocate to Mexico because of its proximity to big, untapped markets in Mexico, Brazil, and Colombia.

“After developing the technology in San Francisco, we chose to start commercially in Latin America. It has been the perfect petri dish for us: the markets here, especially in Mexico, Brazil and Colombia, are very exciting. These countries have the highest payments fraud rates in the world, which makes their identity issues the most interesting,” said Victor in a statement.

The rise of a new generation of fintech startup across Latin America creates a unique opportunity for Mati in a number of markets — and so does a new generation of financial services regulations, the company said. “We view the fintech regulations sweeping across LatAm as an opportunity to help a lot of promising fintechs and marketplaces get to the next level”, Victor said.

Already working across three countries, with operations in Mexico City, St. Petersburg, and San Francisco, Mati is an example of the global scope that even very early stage companies can now achieve.

Identity verification is at the core of much of the modern gig economy and much of the social networking defining life during a pandemic.

The company said it will use the capital investment — it would not disclose the amount of money it raised — to continue product development and expand its geographic footprint.

The scope of the identity verification problem is what brought Spero to the table to discuss an investment, according to a statement from Shripriya Mahesh, the founding partner at Spero.

“For us, identity is foundational to scaling the vast array of gig economy, fintech, social, and commerce platforms that represent our collective future of work,” Mahesh said. “The ability to have safe and trusted interactions at an unprecedented scale, especially with people in places where national identity infrastructure is limited, will create opportunities and global connections we can’t yet even forecast.”

Aspiration, the LA-based fintech focused on conscious consumerism, raises $135 million

By Jonathan Shieber

When former Bill Clinton speechwriter and political wunderkind Andrei Cherny launched Aspiration four years ago, the upstart fintech startup was one of Los Angeles’ early entrants into a  financial services market dominated by players from Europe and the financial capital of the U.S. in New York City.

Fast forward four years and the big New York fintechs are still around, but Cherny’s Aspiration remains undimmed and has today disclosed a $153 million funding round to get even bigger.

Unlike other financial services startups that compete around a suite of product offerings designed to offer no-fee checking and deposits or upfront cash payments and short-term no-interest loans, Aspiration differentiates itself with a focus on sustainability and conscious consumerism.

The company first pitched the market with an investment management service like those from Betterment and Wealthfront, but one where customers could choose their own fees. It also guaranteed investments in sustainable companies and a portfolio that would not include fossil fuel companies or other businesses deemed to be less-than-friendly to Mother Nature.

The conscious consumerism is a through-line that knits together the other products in the Aspiration portfolio including its Impact Measurement Score product that gives customers a window into how their shopping habits measure up with their desires to be more earth-friendly.

The company’s just-announced $135 million cash infusion brings the total capital raised to $200 million and was led by local investor Alpha Edison. Additional new and existing investors including UBS O’Connor Capital Solutions, DNS Capital, Radicle Impact, Sutter Rock, Jeff Skoll, Joseph Sanberg, Social Impact Finance, the Pohlad Companies, and AGO Partners, also participated in the financing.

So far, 1.5 million Americans have signed up to use Aspiration’s financial management and banking services and the company has seen $4 billion in transactions pass through its accounts.

There’s a whole suite of new services designed to help customers go green too. The company launched a matching feature where the company plants a tree for every debit card purchase that its customers make, when they round up to the nearest dollar. And it’s offering a premium subscription tier that includes debit cards made from recycled ocean plastic. The card offers higher cash back and interest rates and a feature that offsets the carbon emissions of every mile a customer drives.

Finally, Aspiration has inked partnerships with other socially conscious companies like Toms and Warby Parker giving its customers extra cash back rewards when they shop at those businesses.

“Aspiration has built deep, trusting customer relationships that are beginning to unlock latent demand for financial services among the tens of millions of conscious consumers,” said Nate Redmond of Alpha Edison, in a statement. “We are excited to lead a great group of investors to fuel Aspiration’s durable growth and lasting impact.”

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