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Extra Crunch roundup: Cohort analysis, YC Demo Day recaps, building your supply chain

By Walter Thompson

The ongoing fintech revolution continues to level the playing field where legacy companies have historically dominated startups.

To compete with retail banks, many newcomers are offering customers credit and debit cards; developer-friendly APIs make issuance relatively easy, and tools for managing processes like KYC are available off the shelf.

To learn more about the low barriers to entry — and the inherent challenges of creating a unique card offering — reporter Ryan Lawler interviewed:

  • Michael Spelfogel, founder, Cardless
  • Anu Muralidharan, COO, Expensify
  • Peter Hazlehurst, founder and CEO, Synctera
  • Salman Syed, SVP and GM of North America, Marqeta

Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


We’re off on Monday, September 6 to celebrate America’s Labor Day holiday, but we’ll be back with new stories (and a very brief newsletter) on Tuesday morning.

Thanks very much for reading,

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

 

6 tips for establishing your startup’s global supply chain

Image Credits: Suriyapong Thongsawang (opens in a new window) / Getty Images

The barrier to entry for launching hardware startups has fallen; if you can pull off a successful crowdfunding campaign, you’re likely savvy enough to find a factory overseas that can build your widgets to spec.

But global supply chains are fragile: No one expected an off-course container ship to block the Suez Canal for six days. Due to the pandemic, importers are paying almost $18,000 for shipping containers from China today that cost $3,300 a year ago.

After spending a career spinning up supply chains on three continents, Liteboxer CEO Jeff Morin authored a guide for Extra Crunch for hardware founders.

“If you’re clear-eyed about the challenges and apply some rigor and forethought to the process, the end result can be hard to match,” Morin says.

Our favorite startups from YC’s Summer 21 Demo Day, Part 1

Y Combinator’s Summer 21 Demo Day, Part 1

Image Credits: Bryce Durbin / TechCrunch

Twice each year, we turn our attention to Y Combinator’s latest class of aspiring startups as they hold their public debuts.

For YC Summer 2021 Demo Day, the accelerator’s fourth virtual gathering, Natasha Mascarenhas, Alex Wilhelm, Devin Coldewey, Lucas Matney and Greg Kumparak selected 14 favorites from the first day of one of the world’s top pitch competitions.

Virtual events startups have high hopes for after the pandemic

Image Credits: Yuichiro Chino / Getty Images

Few people thought about virtual events before the pandemic struck, but this format has fulfilled a unique and important need for organizations large and small since early 2020. But what will virtual events’ value be as more of the world attempts a return to “normal”?

To find out, we caught up with top executives and investors in the sector to learn about the big trends they’re seeing — as the sequel to a survey we did in March 2020.

We surveyed:

  • Xiaoyin Qu, founder and CEO, Run The World
  • Rosie Roca, chief customer officer, Hopin
  • Hemant Mohapatra, partner, Lightspeed Venture Partners India
  • Paul Murphy, former investor in Hopin with Northzone (currently co-founder of Katch)

Tracking startup focus in the latest Y Combinator cohort

Alex Wilhelm and Anna Heim wrapped up TechCrunch’s coverage of the summer cohort from Y Combinator’s Demo Day with an evaluation of how the group fared in comparison to their expectations.

They were surprised by the number of startups focusing on no-and low-code software, and pleased by the unanticipated quantity of new companies focusing on space.

“It seems only fair to note that some categories of startup activity simply met our expectations in terms of popularity,” noting delivery-focused startups including dark stores and kitchens.

Popping up less than expected? Crypto and insurtech.

Read on for the whole list of startups that caught the eye of The Exchange.

Use cohort analysis to drive smarter startup growth

Image Credits: erhui1979 / Getty Images

Cohort analysis is what it sounds like: evaluating your startup’s customers by grouping them into “cohorts” and observing their behavior over time.

In a guest column, Jonathan Metrick, the chief growth officer at Sagard & Portage Ventures, offers a detailed example explaining the value of this type of analysis.

Questions? ​​Join us for a Twitter Spaces chat with Metrick on Tuesday, September 7, at 3 p.m. PDT/6 p.m. EDT. For details and a reminder, follow @TechCrunch on Twitter.

Fintech startup Jeeves raises $57M, goes from YC to $500M valuation in one year

By Mary Ann Azevedo

Last summer, Jeeves was participating in Y Combinator’s summer batch as a fledgling fintech.

This June, the startup emerged from stealth with $31 million in equity and $100 million in debt financing. 

Today, the company, which is building an “all-in-one expense management platform” for global startups, is announcing that it has raised a $57 million Series B at a $500 million valuation. That’s up from a valuation of just north of $100 million at the time of Jeeves’ Series A, which closed in May and was announced in early June.

While the pace of funding these days is unlike most of us have ever seen before, it’s pretty remarkable that Jeeves essentially signed the term sheet for its Series B just two months after closing on its Series A. It’s also notable that just one year ago, it was wrapping up a YC cohort.

Jeeves was not necessarily looking to raise so soon, but fueled by its growth in revenue and spend after its Series A, which was led by Andreessen Horowitz (a16z), the company was approached by dozens of potential investors and offered multiple term sheets, according to CEO and co-founder Dileep Thazhmon. Jeeves moved forward with CRV, which had been interested since the A and built a relationship with Thazhmon, so it could further accelerate growth and launch in more countries, he said.

CRV led the Series B round, which also included participation from Tencent, Silicon Valley Bank, Alkeon Capital Management, Soros Fund Management and a high-profile group of angel investors including NBA stars Kevin Durant and Andre Iguodala, Odell Beckham Jr. and The Chainsmokers. Notably, the founders of a dozen unicorn companies also put money in the Series B including (but not limited to) Clip CEO Adolfo Babatz; QuintoAndar CEO Gabriel Braga; Uala CEO Pierpaolo Barbieri, BlockFi CEO Zac Prince; Mercury CEO Immad Akhund; Bitso founder Pablo Gonzalez; Monzo Bank’s Tom Blomfield; Intercom founder Des Traynor; Lithic CEO Bo Jiang as well as founders from UiPath, Auth0, GoCardless, Nubank, Rappi, Kavak and others.

Whew.

The “fully remote” Jeeves describes itself as the first “cross country, cross currency” expense management platform. The startup’s offering was live in Mexico and Canada and today launched in Colombia, the United Kingdom and Europe as a whole. 

Thazhmon and Sherwin Gandhi founded Jeeves last year under the premise that startups have traditionally had to rely on financial infrastructure that is local and country-specific. For example, a company with employees in Mexico and Colombia would require multiple vendors to cover its finance function in each country — a corporate card in Mexico and one in Colombia and another vendor for cross-border payments.

Jeeves claims that by using its platform’s proprietary Banking-as-a-Service infrastructure, any company can spin up their finance function “in minutes” and get access to 30 days of credit on a true corporate card (with 4% cash back), non card payment rails, as well as cross-border payments. Customers can also pay back in multiple currencies, reducing FX (foreign transaction) fees.

For example, a growing business can use a Jeeves card in Barcelona and pay it back in euros and use the same card in Mexico and pay it back in pesos, reducing any FX fees and providing instant spend reconciliation across currencies. 

Thazhmon believes that the “biggest thing” the company is building out is its own global BaaS layer, that sits across different banking entities in each country, and onto which the end user customer-facing Jeeves app plugs into.

Put simply, he said, “think of it as a BaaS platform, but with only one app — the Jeeves app — plugged into it.”

Image Credits: Jeeves

The startup has grown its transaction volume (GTV) by more than 5,000% since January, and both revenue and spend volume has increased more than 1,100% (11x) since its Series A earlier this year, according to Thazhmon.

Jeeves now covers more than 12 currencies and 10 countries across three continents. Mexico is its largest market. Jeeves is currently beta testing in Brazil and Chile and Thazhmon expects that by year’s end, it will be live in all of North America and Europe. Next year, it’s eyeing the Asian market, and Tencent should be able to help with that strategically, he said.

“We’re building an all-in-one expense management platform for startups in LatAm and global markets — cash, corporate cards, cross-border — all run on our own infrastructure,” Thazhmon told TechCrunch. “Our model is very similar to that of Uber’s launch model where we can launch very quickly because we don’t have to rebuild an entire infrastructure. When we launch in countries, we actually don’t have to rebuild a stack.”

Jeeves’ user base has been doubling every 60 days and now powers more than 1,000 companies across LatAm, Canada and Europe, including Bitso, Kavak, RappiPay, Belvo, Runa, Moons, Convictional, Muncher, Juniper, Trienta, Platzi, Worky and others, according to Thazhmon. The company says it has a current waitlist of over 15,000.

Jeeves plans to use its new capital toward its launch in Colombia, the U.K. and Europe. And, of course, toward more hiring. It’s already doubled its number of employees to 55 over the past month.

Former a16z partner Matt Hafemeister was so impressed with what Jeeves is building that in August he left the venture capital firm to join the startup as its head of growth. In working with the founders as an investor, he concluded that they ranked “among the best founders in fintech” he’d ever interacted with.

The decision to leave a16z also related to Jeeves’ inflection point, Hafemeister said. The startup is nearly doubling every month, and had already eclipsed year-end goals on revenue by mid-year.

It is evident Jeeves has found early product market fit and, given the speed of execution, I see Jeeves establishing itself as one of the most important fintech companies in the next few years,” Hafemeister told TechCrunch. “The company is transitioning from a seed company to a Series B company very quickly, and being able to help operationalize processes and play a role in their growth and maturity is an incredible opportunity for me.”

CRV General Partner Saar Gur (who is also an early investor in DoorDash, Patreon and Mercury) said he was blown away by Jeeves’ growth and how it has been “consistently hitting and exceeding targets month over month.” Plus, early feedback from customers has been overwhelmingly positive, Gur said.

“Jeeves is building products and infrastructure that are very difficult to execute but by doing the ‘hard things’ they offer incredible value to their customers,” he told TechCrunch. “We haven’t seen anyone build from the ground up with global operations in mind on day one.”

All the reasons why you should launch a credit or debit card

By Ryan Lawler

Over the previous two or three years we’ve seen an explosion of new debit and credit card products come to market from consumer and B2B fintech startups, as well as companies that we might not traditionally think of as players in the financial services industry.

On the consumer side, that means companies like Venmo or PayPal offering debit cards as a new way for users to spend funds in their accounts. In the B2B space, the availability of corporate card issuing by startups like Brex and Ramp has ushered in new expense and spend management options. And then there is the growth of branded credit and debit cards among brands and sports teams.

But if your company somehow hasn’t yet found its way to launch a debit or credit card, we have good news: It’s easier than ever to do so and there’s actual money to be made. Just know that if you do, you’ve got plenty of competition and that actual customer usage will probably depend on how sticky your service is and how valuable the rewards are that you offer to your most active users.

To learn more about launching a card product, TechCrunch spoke with executives from Marqeta, Expensify, Synctera and Cardless about the pros and cons of launching a card product. So without further ado, here are all the reasons you should think about doing so, and one big reason why you might not want to.

Because it’s (relatively) easy

Probably the biggest reason we’ve seen so many new fintech and non-fintech companies rush to offer debit and credit cards to customers is simply that it’s easier than ever for them to do so. The launch and success of businesses like Marqeta has made card issuance by API developer friendly, which lowered the barrier to entry significantly over the last half-decade.

“The reason why this is happening is because the ‘fintech 1.0 infrastructure’ has succeeded,” Salman Syed, Marqeta’s SVP and GM of North America, said. “When you’ve got companies like [ours] out there, it’s just gotten a lot easier to be able to put a card product out.”

While noting that there have been good options for card issuance and payment processing for at least the last five or six years, Expensify Chief Operating Officer Anu Muralidharan said that a proliferation of technical resources for other pieces of fintech infrastructure has made the process of greenlighting a card offering much easier over the years.

Point raises $46.5 million for its premium debit card

By Romain Dillet

Challenger bank Point has raised a $46.5 million Series B funding round. The company offers an account associated with a debit card. And the startup positions itself as a premium debit card company and tries to offer credit card rewards with debit cards.

Existing investor Peter Thiel's Valar Ventures is investing more money in the company and leading the Series B round. Other investors include Breyer Capital, YC Continuity and Human Capital. The company raised a $10.5 million Series A round 18 months ago and a seed round before that, which means that Point has raised $60 million in total.

Point wants to build the anti-credit card. The company tries to keep what’s best about credit cards but leave behind what’s not so good. Many people think credit cards are a slippery slope. If you spend too much money without realizing that you’re not going to be able to make ends meet, you’ll pay interests. Those interests can even make it harder to pay back your credit card debt.

That’s why credit card incentives are both attractive and scary. If you have enough savings or if you earn a lot of money, paying your credit card bill is not going to be an issue. But that’s not always the case.

Point tells you that you should ditch your credit card altogether. When you open a Point account, you can top it up with another debit card or set up direct deposits with your employer. Opening a Point account currently costs $49 per year. You get two free ATM withdrawals per month and you don’t pay any foreign transaction fees.

After that, you can safely spend money with your Point card. You know that you have enough money to pay for your purchases as it’s a debit card. Every time you want to buy something expensive, you have to top up your account first.

Point users earn points with every purchase. You get 5x points on subscriptions, such as Spotify and Netflix, 3x points on food deliveries and ride sharing, and 1x points on everything else. If you pay with your Point card, you also get trip cancellation insurance, car rental insurance, global travel assistance, phone insurance and new purchase insurance.

You can control the Point card from the Point app — you can lock it and unlock it whenever you want and you can choose to receive notifications whenever you want. The Point debit card also works with Apple Pay and Google Pay.

With today’s funding round, the company plans to hire more people, launch new features and introduce new products. In other words, don’t expect any major changes. But the company now has more money to expand more rapidly.

Image Credits: Point

HomeLight closes on $100M Series D at a $1.6B valuation as revenue surges

By Mary Ann Azevedo

HomeLight, which operates a real estate technology platform, announced today that it has secured $100 million in a Series D round of funding and $263 million in debt financing.

Return backer Zeev Ventures led the equity round, which also included participation from Group 11, Stereo Capital, Menlo Ventures and Lydia Jett of the SoftBank Vision Fund. The financings bring the San Francisco-based company’s total raised since its 2012 inception to $530 million. The equity financing brings HomeLight’s valuation to $1.6 billion, which is about triple of what it was when it raised its $109 million in debt and equity in a Series C that was announced in November of 2019.

Zeev Ventures led that funding round, as well as its Series A in 2015.

The latest capital comes ahead of projected “3x” year-over-year growth, according to HomeLight founder and CEO Drew Uher, who projects that the company’s annual revenue will triple to over $300 million in 2021. Doing basic math, we can deduce that the company saw around $100 million in revenue in 2020.

Over the years, like many other real estate tech platforms, HomeLight has evolved its model. HomeLight’s initial product focused on using artificial intelligence to match consumers and real estate investors to agents. Since then, the company has expanded to also providing title and escrow services to agents and home sellers and matching sellers with iBuyers. In July 2019, HomeLight acquired Eave as an entry into the (increasingly crowded) mortgage lending space.

“Our goal is to remove as much friction as possible from the process of buying or selling a home,” Uher said.

In January 2020, HomeLight launched its flagship financial products, HomeLight Trade-In and HomeLight Cash Offer. Since then, it has grown those products by over 700%, Uher said, in part fueled by the pandemic.

HomeLight’s Trade-In product gives its clients greater control over the timeline of their move and ability to transact, and Cash Offer gives people a way to make all cash offers on homes, “even if they need a mortgage,” he said. 

“The pandemic only highlighted many of the pain points in the real estate transaction process that we’ve been focused on solving since our founding,” Uher told TechCrunch. “Between the real estate industry’s historic information asymmetry, outdated processes and unreasonable costs — not to mention today’s record-low inventory and all-time high bidding wars — buying or selling a home can be an incredibly difficult process, even without the challenges put in place by a global pandemic.”

Image Credits: HomeLight

Then in August 2020, the company acquired Disclosures.io and launched HomeLight Listing Management, with the goal of making it easier for agents to share property information, monitor buyer interest and manage offers in one place. 

In June of 2021, HomeLight appointed Lyft chairman and former Trulia CFO Sean Aggarwal to its board.

Uher founded HomeLight after he and his wife felt the pain of trying to buy a home in the competitive Bay Area market.

“The process of buying a home in San Francisco was so frustrating it made me want to bang my head against the wall,” Uher told me at the time of HomeLight’s Series C. “I realized there were so many things wrong with the real estate industry. I went through a few real estate agents before finding the right match. So when I did find one, it made me feel empowered to compete and win against the other buyers.”

He started HomeLight with a single product, its agent matching platform, which uses “proprietary machine-learning algorithms” to analyze millions of real estate transactions and agent profiles. It claims to connect a client to a real estate agent on average “every 90 seconds.”

Over the years, Uher said that hundreds of thousands of agents have applied to be a part of the HomeLight agent network and that it has worked with over 1 million homebuyers and sellers in the U.S. Today, the company works closely with the top 28,000 of those agents across the country. HomeLight maintains that it is not trying to replace real estate agents, but instead work more collaboratively with them.

Uher said the company plans to use its new capital in part toward expanding to new markets its Trade-In and Cash Offer operations. HomeLight Trade-In and Cash Offer are currently available in California, Texas and, more recently, in Colorado.

“We plan to expand as quickly as we can across the entire country,” Uher said. “We also plan to hire aggressively in 2021 and beyond.”

HomeLight presently has over 500 employees, up from about 350 at the end of last year. The company has offices in Scottsdale, Arizona, San Francisco, New York, Seattle and Tampa, and plans to open new sites throughout the U.S. in the coming months. 

Oren Zeev, founding partner at Zeev Ventures, said he believes that HomeLIght is better positioned than any other proptech company “to reinvent the transaction experience” for agents and their clients.

“With the onset of iBuyers and other technology introduced in the past decade, many proptech companies are building products to cut agents out of the transaction process entirely,” Zeev wrote via email. “This is where HomeLight uniquely differs — and excels — from its competitors…They’re in the perfect position to revolutionize the industry.”

India launches Account Aggregator to extend financial services to millions

By Manish Singh

India’s top banks five years ago built the interoperable UPI railroads and enabled over 150 million people in the South Asian market to pay digitally. Scores of firms — including local firms Paytm, PhonePe, CRED and international giants Google and Facebook — in India today support the UPI infrastructure, which is now reporting 3 billion transactions each month.

Banks are now ready for their second act.

On Thursday, eight Indian banks announced that they are rolling out — or about to roll out — a system called Account Aggregator to enable consumers to consolidate all their financial data in one place. (Participants banks are HDFC, Kotak, ICICI, Axis, SBI, IndusInd, IDFC, and Federal Bank. Four of them are rolling out the system Thursday, others say they will roll out the new system soon.)

The objective of Account Aggregator (AA) is to aggregate all financial information of an individual, said M Rajeshwar Rao, Deputy Governor of India’s central bank — Reserve Bank of India — at a virtual event Thursday.

The new system makes it possible for banks, tax authorities, insurers, and other finance firms to aggregate data of customers — who have provided their consent — to get better understanding about their potential customers, make informed decisions and ensure smoother transactions.

Users who provide consent — and it only takes a few taps to do so — will be able to share their financial information from one Account Aggregator participant to another through a centralized API-based repository. Users get to decide for how long they wish their data to be shared with a particular Account Aggregator participant.

“For retail loan underwriting (“eligibility check”), rather than submitting previous 3 years bank statements, I can simply authenticate a data transfer via AA (and revoke the data transfer AFTER the loan is approved or sanctioned). For self-employed or freelance professionals, getting Term Insurance has always been difficult since they cannot prove their income – AA lets you provide an audit trail of past income to underwrite the Term Insurance application,” Rahul Mathur, founder and chief executive of insurance aggregator startup BimaPe, told TechCrunch.

An illustration of how the AA system works.

Most countries globally already have privacy laws that recognize the rights of individuals. But even as individuals and businesses have the right to exercise their control over their data, the current system has made it difficult for consumers to operationalize how they provide consent.

“They face this difficult for two reasons,” explained Siddharth Tiwari, head of the Bank for International Settlements in Asia and Pacific. “Firstly, a service provider usually seeks consent to use and transfer data at time when consumers [are] agreeing to participate in an activity with the service provider. Since this consent is granted for a wide variety of possibilities, it is broad and sweeping in nature,” he said.

“Secondly, newly created data are often gathered and retained in proprietary silos and stored in various institutions in incompatible formats. Consumers can find it difficult to share their data as they have only limited options. […] Thus, service providers who are custodians of data effectively act as defacto owner of the data,” he said, adding that Account Aggregator is designed to potentially address these challenges. “A robust consent-based data sharing system has the potential for consumers derive value from their data while maintaining control.”

Account Aggregator is built in part to help consumers and businesses access financial services such as loans. Existing credit bureaus in India have data of only a fraction of the nation’s 1.4 billion population, which makes it very difficult for most in the country to access working capital, explained Infosys chairman Nandan Nilekani, who’s been an adviser to the initiative, at the event Thursday.

“Talks are on to onboard telecom operators as well,” he said, adding that the system has already achieved the sophistication that it could be extended to other industries.

“It’s an architecture that can now be applied to several additional industries,” he said, pointing to healthcare, fitness, testing labs as examples. “We can confidently say that there is no other country in the world that has built a robust infrastructure of this kind and at scale where its people can leverage their data. This approach is now getting global recognition.”

The Account Aggregator system is also positioned to dramatically increase the addressable market for online insurers, lenders, and players in several other industries.

“This is a big step towards a connected financial ecosystem, and will be very significant in Fi’s journey to help working millennials get better with their money. With the successful demonstration of the framework today we are excited to have all our users experience the power and convenience of the AA integration once it’s rolled out to all users,” said Sumit Gwalani, co-founder of Fi.

This is a developing story. More to follow…

Top Indian payments app PhonePe opens its data firehose to everyone

By Manish Singh

PhonePe, one of the largest digital payments services in India, on Thursday launched Pulse, a free product to offer insights into how people in the world’s second largest internet market are paying digitally.

And PhonePe would know: the Flipkart-backed five-year-old startup said its insights are based on over 22 billion transactions it has processed over the years.

Pulse offers an unprecedented level of understanding of the inroads digital payments and various financial services have made across Indian states, districts and over 19,000 zip codes. The new product offers a range of granular data including how many of its transactions in a state were made between users, to merchants, and to pay utility bills.

The startup, which has anonymized users’ data, will publish new data and analysis periodically and one major report each year, it said. The startup also published its maiden report (PDF) Thursday.

A look at PhonePe’s Pulse product (Screengrab)

PhonePe co-founder and chief executive Sameer Nigam said at a virtual conference that PhonePe is also making its insights available through an API for academics, analysts and other players to use at no charge.

More than 100 million Indians have started to transact digitally in the past five years buoyed by New Delhi’s move to invalidate much of the cash in circulation in 2016 and establishment of UPI railroads by retail banks in India that offers interoperability across apps. UPI has emerged as the most popular way Indians pay digitally today and PhonePe commands more than 40% of its market share.

The sudden surge in the adoption of mobile payments has also attracted several international giants — including Google, Facebook, Amazon, and Samsung — to launch their payment offerings in the South Asian nation. India’s mobile payments market is estimated to be worth $1 trillion by 2023, according to Credit Suisse.

The rationale behind launching Pulse, an effort that was initially conceptualized by the startup’s communications team, is to offer clarity to people on the digital payments behavior as there have been too much unverified noise in the industry, PhonePe executives said at a virtual event Thursday.

When asked about potentially losing the competitive advantage, Nigam said PhonePe is publishing the data for the greater good and he encouraged other players in the industry to also take similar steps. The data could help businesses better inform their decisions, he said.

This is a developing story. More to follow…

Sphere raises $2M to help employees lobby for green 401(k) plans

By Mike Butcher

In the United States, a 401(k) plan is an employer-sponsored defined-contribution pension account. However, with legacy institutional investing, most of these have at least some level of fossil fuel involvement and let’s face it, very few of us really know. Now a startup plans to change that.

California-based startup Sphere wants to get employees to ask their employers for investment options that are not invested in fossil fuels. To do that it’s offering financial products that make it easier – it says – for employers to offer fossil-free investment options in their 401(k) plans. This could be quite a big movement. Sphere says there are over $35 trillion in assets in retirement savings in the US as of Q1 2021.

It’s now raised a $2M funding round led by climatetech-focused VC Pale Blue Dot led the investment round. Also participating were climate-focused investors including Sundeep Ahuja of Climate Capital. Sphere is also a registered ‘Public Benefit Corporation’ allowing it to campaign in public about climate change.

Alex Wright-Gladstein, CEO and founder of Sphere said: “We are proud to be partnering with Pale Blue Dot on our mission to reverse climate change by making our money talk. Heidi, Hampus, and Joel have the experience and drive to help us make big changes on the short 7 year time scale that we have to limit warming to 1.5°C.” Wright-Gladstein has also teamed up with sustainable investing veteran Jason Britton of Reflection Asset Management and BITA custom indexes.

Wright-Gladstein said she learned the difficulty of offering fossil-free options in 401(k) plans when running her previous startup, Ayar Labs. She tried to offer a fossil-free option for employees, but found out it took would take three years to get a single fossil-free option in the plan.

Heidi Lindvall, General Partner at Pale Blue Dot said: “We are big believers in Sphere’s unique approach of raising awareness through a social movement while offering a range of low-cost products that address the structural issues in fossil-free 401(k) investing.”

Insurify, a ‘virtual insurance agent,’ raises $100M Series B

By Mary Ann Azevedo

How many of us have not switched insurance carriers because we don’t want to deal with the hassle of comparison shopping?

A lot, I’d bet.

Today, Insurify, a startup that wants to help people make it easier to get better rates on home, auto and life insurance, announced that it has closed $100 million in an “oversubscribed” Series B funding round led by Motive Partners.

Existing backers Viola FinTech, MassMutual Ventures, Nationwide, Hearst Ventures and Moneta VC also put money in the round, as well as new investors Viola Growth and Fort Ross Ventures. With the new financing, Cambridge, Massachusetts-based Insurify has now raised a total of $128 million since its 2013 inception. The company declined to disclose the valuation at which the money was raised.

Since we last covered Insurify, the startup has seen some impressive growth. For example, it has seen its new and recurring revenue increase by “6x” since it closed its Series A funding in the 2019 fourth quarter. Over the last three years, Insurify has achieved a CAGR (compound annual growth rate) of 151%, according to co-founder and CEO Snejina Zacharia. It has also seen consistent “2.5x” year-over-year revenue growth, she said.

Insurify has built a machine learning-based virtual insurance agent that integrates with more than 100 carriers to digitize — and personalize — the insurance shopping experience. There are others in the insurtech space, but none that we know of currently tackling home, auto and life insurance. For example, Jerry, which has raised capital twice this year, is focused mostly on auto insurance, although it does have a home product. The Zebra, which became a unicorn this year, started out as a site for people looking for auto insurance via its real-time quote comparison tool. Over time, it has also evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. But it too is mostly focused on auto.

Zacharia said that since Insurify’s Series A funding, it has expanded its home insurance marketplace, deepened its carrier integrations to provide users an “instant” purchase experience and launched its first two embedded insurance products through partnerships with Toyota Insurance Management Solutions and Nationwide (the latter of which also participated in the Series B funding round).

Image Credits: Insurify

Last year, when ShyScanner had to lay off staff, Insurify scooped up much of its engineering team and established an office in Sofia, Bulgaria.

Zacharia, a former Gartner executive, was inspired to start the company after she was involved in a minor car accident while getting her MBA at MIT. The accident led to a spike in her insurance premium and Zacharia was frustrated by the “complex and cumbersome” experience of car insurance shopping. She teamed up with CTO Tod Kiryazov to build Insurify, which the pair describe as a virtual insurance agent that offers real-time quotes.

“We decided to build the most trusted virtual insurance agent in the industry that allows for customers to easily search, compare and buy fully digitally — directly from their mobile phone, or desktop, and really get a very smart, personalized experience based on their unique preferences,” Zacharia told TechCrunch. “We leverage artificial intelligence to be able to make recommendations on both coverage as well as carrier selection.”

Notably, Insurify is also a fully licensed agent that takes over the fulfillment and servicing of the policies. Since the company is mostly working as an insurance agent, it gets paid new and renewed commission. So while it’s not a SaaS business, its embedded insurance offerings have SaaS-like monetization.

“Our goal is to provide an experience for the end consumer that allows them to service and manage all of their policies in one place, digitally,” Zacharia said. “We think that the data recommendations that the platform provides can really remove most of the friction that currently exists in the shopping experience.”

Insurify plans to use its fresh capital to continue to expand its operations and accelerate its growth plans. It also, naturally, wants to add to its 125-person team.

“We want to build into our API integrations so customers can receive real-time direct quotes with better personalization and a more tailored experience,” Kiryazov said. “We also want to identify more embedded insurance opportunities and expand the product functionality.”

The company also down the line wants to expand into other verticals such as pet insurance, for example.

Insurify intends to use the money in part to build brand awareness, potentially through TV advertising.

“Almost half of our revenue comes from self-directed traffic,” Zacharia said. “So we want to explore more inorganic growth.”

James “Jim” O’Neill, founding partner at Motive Partners and partner Andy Rear point out that online purchasing now accounts for almost all of the growth in U.S. auto insurance. 

“The lesson from other markets which have been through this transition is that customers prefer choice, presented as a simple menu of products and prices from different insurers, and a straightforward online purchasing process,” they wrote via email. “The U.S. auto market is huge: even a slow transition to online means a massive opportunity for Insurify.”

In conducting their due diligence, the pair said they were impressed with how the startup is building a business model “that works for customers, insurers and white-label partners.”

Harel Beit-On, founder and general partner at Viola Growth, believes that the quantum leap in e-commerce due to COVID-19 will completely transform the buying experience in almost every sector, including insurance.

“It is time to bring the frictionless purchasing experience that customers expect to the insurance space as well,” she said. “Following our fintech fund’s recent investment in the company, we watched Insurify’s immense growth, excellent execution with customer acquisition and building a brand consumers trust.”

Flat.mx raises $20M from VCs, proptech unicorn founders to fix Mexico’s ‘broken’ real estate market

By Mary Ann Azevedo

Flat.mx, which wants to build a real estate “super app” for Latin America, has closed on a $20 million Series A round of funding.

Anthemis and 500 Startups co-led the investment, which included participation from ALLVP and Expa. Previously, Flat.mx had raised a total $10 million in equity and $25 million in debt. Other backers include Opendoor CEO and CEO and co-founder Eric Wu, Flyhomes’ co-founder and CEO Tushar Garg and Divvy Homes’ co-founder Brian Ma.

Founded in July 2019, Mexico City-based Flat.mx started out with a model similar to that of Opendoor, buying properties, renovating them and then reselling them. That September, the proptech startup had raised one of Mexico’s largest pre-seed rounds to take the Opendoor real estate marketplace model across the Rio Grande.

“The real estate market in Mexico is broken,” said co-founder Bernardo Cordero. “One of the biggest problems is that it takes sellers anywhere from 6 months to 2 years to sell. So we launched the most radical solution we could find to this problem: an instant offer. This product allows homeowners to sell in days instead of months, a fast and convenient experience they can’t find anywhere else.”

Building an instant buyer (ibuyer) in Mexico — and Latin America in general — is a complex endeavor. Unlike in the U.S., Mexico doesn’t have a Multiple Listing Service (MLS). As such, pricing data is not readily available. On top of that, agents are not required to be certified so the whole process of buying and selling a home can be informal.

And since mortgage penetration in Mexico is also low, it can be difficult for buyers to have access to reasonable financing options.

“To build an iBuyer, we had to solve the transaction end-to-end,” said co-founder Victor Noguera. “We had to build the MLS, a third-party marketplace, a contractor marketplace, financial products, broker technology, and a home maintenance provider, along with other services. In other words, we have been building the real estate Superapp for Latam.”

Flat.mx says its certified remodeled properties have gone through a 200+ point inspection and “a full legal review.” 

Flat.mx is growing sales by 70% quarter-over-quarter, and has increased its inventory by 10x over the last year, according to its founders. It has also nearly tripled its headcount from 30 at the middle of last year to over 85 today. So far, Flat.mx has conducted thousands of home valuations and over 100 transactions.

Image Credits: Flat.mx

The pandemic only helped boost interest.

“Our low touch digital solution was key for having a strong business during the pandemic. We were able to create quick liquidity for sellers at a time in Mexico where it was complicated to sell,” said Cordero. “Our model allows sellers to sell with one visit instead of having to receive over 40 potential buyers at a time where they wanted to sell but also wanted to avoid contact with many buyers.”

The company plans to use its new capital to continue to develop what it describes as a “one-stop shop where homeowners and buyers will be able to get all the services they need in one place.”

The founders believe that rather than just try to tackle one aspect of the homebuying process, it makes more sense in emerging markets to address them all.

“We believe that each one of our products makes the others stronger and creating this ecosystem of products will continue to give us an important advantage in the market,” said Noguera. The startup plans to also use the capital from the round to expand its presence in Mexico for iBuying, and to invest in data and financial products.

Image Credits: Flat.mx

Naturally, Flat.mx’s investors are bullish.

Archie Cochrane, principal investor at Anthemis Group, said his firm views Flat.mx as an integral part of its embedded finance thesis in the context of the Mexican property sector. 

“The iBuyer model itself is well understood and developed in many parts of the world, but it is also a complex model with many variables that requires a seasoned and astute team to execute the strategy,” Cochrane wrote via email. “When we met Victor and Bernardo, it was clear that their clarity of vision and deep understanding of the broader opportunity set would allow them to succeed over the long term.

Tim Chae, managing partner at 500 Startups, said he envisions that Flat.mx will become “the go-to route” for buyers, sellers, agents and lenders in Mexican real estate. 

“There are nuances and specific problems that are unique to Mexico that Flat.mx has done a great job identifying and solving,” he said. 

ALLVP Partner Fernando Lelo de Larrea said that essentially after years of “unkept promises,” software is finally transforming the real estate industry in Mexico. 

“Most models replicate successful models from the more mature U.S. proptech space,” he said. “Since we started investing in proptech, we’ve never seen such an innovative approach to seizing a trillion dollar opportunity.”

CoachHub raises $80M in Series “B2” round, as coaching goes digital in the pandemic

By Mike Butcher

The world of professional coaching has grown over the years as coaches realised they could easily counsel people remotely and clients realized digital coaching was far more efficient. But, equally, a problem arose in how to sift the wheat from the chaff. At the same time corporates realised that their own staff could benefit – but faced the same sifting problem. In a classic Internet play, CoachHub came along three years ago and applied AI to a marketplace to do the sifting. All well and good, but with training and personal development going almost completely digital due to the pandemic, the market has exploded.

Berlin-based CoachHub has now raised $80m in a Series “B2” funding, increasing its total Series B capital to $110m. Investors Draper Esprit, RTP Global, HV Capital, Signals Venture Capital, Partech, and Speedinvest all participated bringing the total funds raised to $130m, since 2019.

Last year it raised a $30 million Series B round, also led by Draper Esprit, alongside existing investors HV Capital, Partech, Speedinvest, signals Venture Capital, and RTP Global.

The startup competes with other aggregators such as AceUp out of Boston, which has raised $2.3M.
 
The three year old startup says it has tripled its employees, and added new clients including Fujitsu, Electrolux, Babbel, ViacomCBS and KPMG.
 
Co-founder and Chief Sales Director Yannis Niebelschütz said in a statement: “This latest round of funding will allow us to meet the ever-growing demand for digital solutions for training and personal development, which has been triggered by the pandemic.”
 
Christoph Hornung, investment director at Draper Esprit said: “It’s no longer just about the pandemic. What we are increasingly seeing with digital-first, highly enriched platforms such as CoachHub are more dynamic and – crucially – more accessible tools to transform companies through training and education.”
 
CoachHub says it uses AI to match individuals with 2,500 business and well-being coaches in 70 countries across six continents. Coaching sessions are available in 60+ languages.

Tribe and Arkam back Jar app to help millions in India start their savings journey

By Manish Singh

Even as hundreds of millions of people in India have a bank account, only a tiny fraction of this population invests in any financial instrument.

Fewer than 30 million people invest in mutual funds or stocks, for instance. In recent years, a handful of startups have made it easier for users — especially the millennials — to invest, but the figure has largely remained stagnant.

Now, an Indian startup believes that it has found the solution to tackle this challenge — and is already seeing good early traction.

Nishchay AG, former director of mobility startup Bounce, and Misbah Ashraf, co-founder of MarsPlay (sold to Foxy), founded Jar earlier this year.

The startup’s eponymous six-month-old Android app enables users to start their savings journey for as little as 1 Indian rupee.

Users on Jar can invest in multiple ways and get started within seconds. The app works with Paytm (PhonePe support is in the works) to set up a recurring payment. (The startup is the first to use UPI 2.0’s recurring payment support.) They can set up any amount between 1 Indian rupee to 500 for daily investments.

The Jar app can also glean users’ text messages and save a tiny amount based on each monetary transaction they do. So, for instance, if a user has spent 31 rupees in a transaction, the Jar app rounds that up to the nearest tenth figure (40, in this case) and saves nine rupees. Users can also manually open the app and spend any amount they wish to invest.

Once users have saved some money in Jar, the app then invests that into digital gold.

The startup is using gold investment because people in the South Asian market already have an immense trust in this asset class.

India has a unique fascination for gold. From rural farmers to urban working class, nearly everyone stashes the yellow metal and flaunts jewelry at weddings.

Indian households are estimated to have a stash of over 25,000 tons of the precious metal whose value today is about half of the country’s nominal GDP. Such is the demand for gold in India that the South Asian nation is also one of the world’s largest importers of this precious metal.

Jar’s Android app (Image Credits: Jar)

“When you’re thinking about bringing the next 500 million people to institutional savings and investments, the onus is on us to educate them on the efficacies of the other instruments that are in the market,” said Nishchay.

“We want to give them the instrument they trust the most, which is gold,” he said. The startup plans to eventually offer several more investment opportunities, he said.

The founders met several years ago when they were exploring if MarsPlay and Bounce could have any synergies. They stayed in touch and, last year during one of their many conversations, realized that neither of them knew much about investments.

“That’s when the dots started to connect,” said Ashraf, drawing stories from his childhood. “I come from a small town in Bihar called Bihar Sharif. During my childhood days, I saw my family deeply troubled with debt because of poor financial decisions and no savings,” he said.

“We both understand what a typical middle class family goes through. Someone who comes from this background never had any means in the past but their aspirations are never-ending. So when you start earning, you immediately start to spend it all,” said Nishchay.

“The market needs products that will help them get started,” he said.

That idea, which is similar to Acorn and Stash’s play in the U.S. market, is beginning to make inroads. The app has already amassed about half a million downloads, the founders said. Investors have taken notice, too.

On Wednesday, Jar announced it has raised $4.5 million from a clutch of high-profile investors, including Arkam Ventures, Tribe Capital, WEH Ventures, and angels including Kunal Shah (founder of CRED), Shaan Puri (formerly with Twitch), Ali Moiz (founder of Stonks), Howard Lindzon (founder of Social Leverage), Vivekananda Hallekere (co-founder of Bounce), Alvin Tse (of Xiaomi) and Kunal Khattar (managing partner at AdvantEdge).

“Over 400 million Indians are about to embrace digital financial services for the first time in their lives. Jar has built an app that is poised to help them — with several intuitive ways including gamification — start their investment journey. We love the speed at which the team has been executing and how fast they are growing each week,” said Arjun Sethi, co-founder of Tribe Capital, in a statement.

Transactions and AUM on the Jar app are surging 350% each month, said Nishchay. The startup plans to broaden its product offerings in the coming days, he said.

UK-based Heroes raises $200M to buy up more Amazon merchants for its roll-up play

By Ingrid Lunden

Heroes, one of the new wave of startups aiming to build big e-commerce businesses by buying up smaller third-party merchants on Amazon’s Marketplace, has raised another big round of funding to double down on that strategy. The London startup has picked up $200 million, money that it will mainly be using to snap up more merchants. Existing brands in its portfolio cover categories like babies, pets, sports, personal health and home and garden categories — some of them, like PremiumCare dog chews, the Onco baby car mirror, gardening tool brand Davaon and wooden foot massager roller Theraflow, category best-sellers — and the plan is to continue building up all of these verticals.

Crayhill Capital Management, a fund based out of New York, is providing the funding, and Riccardo Bruni — who co-founded the company with twin brother Alessio and third brother Giancarlo — said that the bulk of it will be going toward making acquisitions, and is therefore coming in the form of debt.

Raising debt rather than equity at this point is pretty standard for companies like Heroes. Heroes itself is pretty young: it launched less than a year ago, in November 2020, with $65 million in funding, a round comprised of both equity and debt. Other investors in the startup include 360 Capital, Fuel Ventures and Upper 90.

Heroes is playing in what is rapidly becoming a very crowded field. Not only are there tens of thousands of businesses leveraging Amazon’s extensive fulfillment network to sell goods on the e-commerce giant’s marketplace, but some days it seems we are also rapidly approaching a state of nearly as many startups launching to consolidate these third-party sellers.

Many a roll-up play follows a similar playbook, which goes like this: Amazon provides the marketplace to sell goods to consumers, and the infrastructure to fulfill those orders, by way of Fulfillment By Amazon and its Prime service. Meanwhile, the roll-up business — in this case Heroes — buys up a number of the stronger companies leveraging FBA and the marketplace. Then, by consolidating them into a single tech platform that they have built, Heroes creates better economies of scale around better and more efficient supply chains, sharper machine learning and marketing and data analytics technology, and new growth strategies. 

What is notable about Heroes, though — apart from the fact that it’s the first roll-up player to come out of the U.K., and continues to be one of the bigger players in Europe — is that it doesn’t believe that the technology plays as important a role as having a solid relationship with the companies it’s targeting, key given that now the top marketplace sellers are likely being feted by a number of companies as acquisition targets.

“The tech is very important,” said Alessio in an interview. “It helps us build robust processes that tie all the systems together across multiple brands and marketplaces. But what we have is very different from a SaaS business. We are not building an app, and tech is not the core of what we do. From the acquisitions side, we believe that human interactions ultimately win. We don’t think tech can replace a strong acquisition process.”

Image Credits: Heroes

Heroes’ three founder-brothers (two of them, Riccardo and Alessio, pictured above) have worked across a number of investment, finance and operational roles (the CVs include Merrill Lynch, EQT Ventures, Perella Weinberg Partners, Lazada, Nomura and Liberty Global) and they say there have been strong signs so far of its strategy working: of the brands that it has acquired since launching in November, they claim business (sales) has grown five-fold.

Collectively, the roll-up startups are raising hundreds of millions of dollars to fuel these efforts. Other recent hopefuls that have announced funding this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), HeydayThe Razor GroupBrandedSellerXBerlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia. 

The picture that is emerging across many of these operations is that many of these companies, Heroes included, do not try to make their particular approaches particularly more distinctive than those of their competitors, simply because — with nearly 10 million third-party sellers today on Amazon globally — the opportunity is likely big enough for all of them, and more, not least because of current market dynamics.

“It’s no secret that we were inspired by Thrasio and others,” Riccardo said. “Combined with COVID-19, there has been a massive acceleration of e-commerce across the continent.” It was that, plus the realization that the three brothers had the right e-commerce, fundraising and investment skills between them, that made them see what was a ‘perfect storm’ to tackle the opportunity, he continued. “So that is why we jumped into it.”

In the case of Heroes, while the majority of the funding will be used for acquisitions, it’s also planning to double headcount from its current 70 employees before the end of this year with a focus on operational experts to help run their acquired businesses. 

Challenger bank Bunq rolls out Spanish IBANs

By Romain Dillet

Amsterdam-based challenger bank Bunq is updating its service with a handful of new features. In addition to Dutch, German and French bank account numbers, existing and new users in Spain can now get a Spanish IBAN.

European IBANs are supposed to work across Europe. Your employer or internet provider can’t force you to get a local IBAN. And yet, that’s rarely the case. When you move to another European country, chances are the first thing you do is that you open a local bank account.

While European fintech companies have teamed up to create a lobbying effort called “Accept my IBAN”, some challenger banks, such as Bunq, are adding the ability to get local bank account numbers as an intermediary fix. Bunq users can also choose to associate IBANs from multiple European countries with their account. You have to pay a one-time fee of €9.99 every time you add a new local IBAN.

Bunq is also drawing inspiration from Revolut, Wise, Vivid Money and others as you’ll soon be able to receive, convert and hold other currencies. For instance, if you’re going to a non-Euro country for an internship, you will be able to receive your salary on your Bunq account. Bunq is starting with USD accounts with plans to add more currencies down the road.

Other new features include the ability to receive reminders the day before a direct debit occurs, a subscription view that lets you view current subscriptions and when they’re set to expire, an improved search feature and the ability to automatically accept direct debits and payment requests from your friends — make sure you set up a limit before enabling that feature.

Bunq recently announced plans to raise $228 million (€193 million) at a $1.9 billion valuation (€1.6 billion). The investment round hasn’t been approved by the Netherlands’ banking regulator just yet. Bunq is currently operating in 29 European markets.

A new coalition for “Open Cap Table” presents an opportunity for equity transparency

By Danny Crichton
Yifat Aran Contributor
Dr. Yifat Aran is a visiting scholar at the Technion, Israel Institute of Technology, and an Assistant Professor in Haifa University Faculty of Law. She earned her JSD from Stanford Law School where her dissertation focused on equity-based compensation in Silicon Valley startups.

The ownership of startups is often a mystery. In the absence of a public registry, it is difficult to figure out who owns what. Since most startups incorporate in Delaware, the Delaware Division of Corporations holds relevant information, but you may not be able to get all the information you need, and putting it together from the legal paperwork will be challenging.

To understand a startup’s capital structure, you must have access to its capitalization table, also known as cap table. The cap table shows shareholder information, current ownership stakes along with economic and voting rights, future equity purchase rights, vesting schedules and purchase prices. All of this information is compiled into a format that founders and investors can digest easily, allowing them to calculate payouts in various exit scenarios, analyze equity dilution from new hire equity grants, and understand the impact of additional funding rounds.

Initially, startups might collect this data using Excel spreadsheets, but as the ownership structure grows more complex, it becomes more difficult to follow and document, and the cost of errors become a big problem. This has led to the development of a cap table management software industry.

However, the way in which various cap table data items are organized and accounted for varies among the different service providers. Without a standard, it is impossible to automatically synchronize data between software platforms, making it difficult to switch vendors as well as to ensure that all parties are on the same page.

Now, a coalition of Silicon Valley law firms and startup vendors is forming to address this issue. In a Medium post from July 27, the Open Cap Table Coalition stated its intention to “improve the interoperability, transparency, and portability of startup cap table data.” Since standardization means fewer billable hours for lawyers and less lock-in for software platforms, it may go against the short-term interest of some participants. However, the coalition reflects Silicon Valley’s way of doing business – as AnnaLee Saxenian, the Dean of the UC Berkeley School of Information noted in her influential 1994 book “Regional Advantage”, the Valley is a place where intense competitors become partners and informal co-operation and exchange become institutionalized.

As such, the founding members certainly deserve praise. Eliminating inefficiencies allows the ecosystem to move faster and allows players to concentrate on creating value. However, if only founders and investors can see the data, the open cap table coalition will fall short of its potential. For the open cap table to be truly open, the information that determines equity value must be accessible to all equity holders, including startup employees.

I have written on TechCrunch in the past about the abuse potential of startup equity compensation, a highly opaque and practically unregulated market. Employees are often swayed by the allure of stock options without understanding what these securities are and how they are valued. Successful IPO stories portraying employees as instant millionaires create an impression that startup equity offers a fast track to financial prosperity. However, success is the exception, not the rule, when it comes to startups, and wrong investment decisions can result in an employee going into debt. Further, it can be damaging to the startup and the ecosystem in the long term if employees’ expectations are not in line with the startup’s financial reality.

“Pretty much nothing destroys trust between shareholders and startups quicker than poor communication, especially around issues such as the status of the cap table,” wrote Aaron Solomon, head of strategy for Esquire Digital, in support of the open cap table initiative. The exact same is true for employee trust in the company and its leadership — miscommunication around equity issues can be detrimental. As Travis Kalanick discovered first hand, messing with employee equity can backfire.

“We are going to IPO as late as humanly possible,” Kalanick said in June 2016. “It’ll be one day before my employees and significant others come to my office with pitchforks and torches. We will IPO the day before that.” However, waiting for employees to lose their temper is a risky game; you may wake up a day too late instead of the day before. Nowadays, when it is harder to find good employees than to raise money, transparency with both capital and human capital providers is vital.

A couple of years ago, I interviewed startup lawyers and founders in Silicon Valley to understand why they don’t share more information with employees. There was a recurring fear of liability as well as disagreement over disclosure formats. Now, when the industry’s influential players decide on a cap table format, it is possible to also form an agreement on how these data should be shared with employees. If the coalition takes on this challenge, it could easily change the industry by establishing a voluntary standard that everyone can rally around.

Capital/labor relationships in startups are inherently imbalanced, since employees contribute human capital but are denied information and voting rights. It is possible to partially rectify this imbalance by providing employee equity-holders with bottom-line information on what they stand to gain under various exit scenarios. Making information accessible and easy to understand for employees can help startups attract talent and maintain positive culture.

Saxenian’s book on Silicon Valley’s regional advantage describes also how employee stock options contributed to the transformation of Silicon Valley in the 1970s. However, as capital markets and regulations have changed, employee, entrepreneur, and investor relationships have been negatively impacted, resulting in ongoing friction over liquidity and risk allocation. Today, by establishing real equity transparency, Silicon Valley can retain its competitive edge. Until the Open Capital Table Coalition engages in this challenge, it cannot claim to foster a genuinely open community.

Extra Crunch roundup: Pre-pitch tactics, Warby Parker S-1, Israel’s fintech ecosystem

By Walter Thompson

Forget what you’ve heard: There are many shortcuts to success.

Tapping into someone else’s experience is a tried-and-true method, which is why two-time Y Combinator participant Chris Morton wrote a guest post for Extra Crunch with advice for founders hoping to be accepted by the famed accelerator.

Morton, who has also reviewed thousands of YC applications, shares his thoughts on when to submit an application, what to do if you miss the deadline and whether you’ll need to relocate if accepted.

“Remember that your application should be good enough to get an interview, not win a prize,” says Morton. “Go back to work instead of spending more time perfecting an application.”


Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription


Robert Katai

Image Credits: Robert Katai under a license.

In an interview with reporter Anna Heim, Romania-based marketer Robert Katai discussed some of the methods he uses to help clients refine their content and branding strategies.

“Today, content creation is free — everybody can do it. The hard part is how you distribute and amplify that.”

Katai also shared his impressions of Romania’s startup ecosystem, suggestions for maintaining top-of-mind status with customers, and reinforced the often-overlooked need to continually repurpose content to grab mindshare.

Like our other growth marketing interviews, there’s no paywall.

Thanks very much for reading Extra Crunch this week! I hope you have a fantastic weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Why global investors are flocking to back Latin American startups

Image Credits: Bryce Durbin / TechCrunch

Latin America’s increasingly dynamic venture capital scene has been making headlines of late. To learn more about why investors are so enthusiastic, senior reporter Mary Ann Azevedo spoke to several who are actively engaged with the region:

  • Shu Nyatta, managing partner, SoftBank
  • Ethan Choi, partner, Accel
  • Julie Ruvolo, director of venture capital, LAVCA
  • Bill Cilluffo, partner, QED Investors
  • Ana Cristina Gadala-Maria, principal, QED Investors
  • Ross Darwin, principal, Owl Ventures

“I am not surprised by all the activity,” Mary Ann writes. “However, I am a bit taken aback by the sheer number of rounds, the caliber of firms leading them and the sky-high valuations.

“It seems that the region is finally, and deservedly, being taken seriously. This is likely just the beginning.”

Corporate venture capital follows the same trend as other VC markets: Up

Corporations are not remaining on the sidelines of the fiery 2021 venture capital game, Alex Wilhelm and Anna Heim note in The Exchange.

After parsing data from CB Insights and Stryber and chatting with a handful of investors, Alex and Anna concluded that the corporate venture capital market looks a lot like other VC markets.

“Perhaps this should not be a surprise,” they write. “We’ve seen non-venture funds flow into the later stages of startup land, pushing VCs toward earlier-stage and more venture-y deals. Why would CVCs be immune to the same trend?”

Ramp and Brex draw diverging market plans with M&A strategies

Image Credits: Bryan Mullennix (opens in a new window) / Getty Images

Corporate spending management startup Brex raised a $300 million Series C and acquired Buyer just a week after rival Brex announced it had acquired Israeli fintech Weav.

Ryan Lawler and Alex Wilhelm dug into the Ramp-Brex rivalry, and what those acquisitions say about their diverging strategies.

“From a high level, all of the recent deal-making in corporate cards and spend management shows that it’s not enough to just help companies track what employees are expensing these days,” they write.

“As the market matures and feature sets begin to converge, the players are seeking to differentiate themselves from the competition.”

Boston’s startup market is more than setting records in scorching start to year

Alex Wilhelm and Anna Heim interviewed VCs and corralled data to present a detailed picture of Boston’s startup funding scene.

“Boston is benefiting from larger structural changes to at least the U.S. venture capital market, helping close historical gaps in its startup funding market and access funds that previously might have skipped the region,” they write.

“And local university density isn’t hurting the city’s cause, either, boosting its ability to form new companies during a period of rich investment access.”

Europe’s quick-commerce startups are overhyped: Lessons from China

Image of a motorcycle courier speeding down a street.

Image Credits: Andrew Holt (opens in a new window) / Getty Images

Half of the companies offering instant grocery delivery in Europe were founded last year as the pandemic reshaped most aspects of our existence.

To date, they’ve raised about $2 billion, but Picus Capital’s Alexander Kremer says startup lessons from China suggest that “instant delivery is not the magic bullet to crack the dominance” of old-school grocery players.

“If the performance of online grocery platforms in China (a market five to seven years ahead of Europe in terms of online retail) is anything to go by, a range of B2C business models would be more likely to displace the traditional grocery retailers.”

D2C specs purveyor Warby Parker files to go public

For The Exchange, Alex Wilhelm examines the S-1 filing from Warby Parker, “a consumer hardware company with two main sales channels, largely attractive economics, falling losses and rising adjusted profitability. You could even argue that it handled the pandemic well, despite COVID-19’s negative impact on its operations.”

But how are its growth prospects?

Dear Sophie: Can I still get a green card through marriage if I’m divorcing?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I received a conditional green card after my wife and I got married in 2019. Recently, we have made the difficult decision to end our marriage. I want to continue living and working in the United States.

Is it still possible for me to complete my green card based on my marriage through the I-751 process or do I need to do something else, like ask my employer to sponsor me for a work visa?

— Better to Have Loved and Lost

Using AI to reboot brand-client relationships

Artificial intelligence robot arm and businessman completing gear jigsaw puzzle (teamwork).

Image Credits: Getty Images under an alashi (opens in a new window)license.

Marketing automation can help boost key metrics, but it can also be a disservice to brands by perpetually devaluing goods and services, ShareThis’ Michael Gorman writes in a guest column.

Companies with a narrow focus on driving conversions are missing the bigger picture: AI can help create richer experiences that identify consumer actions and intent while also improving customer experiences.

“We live in a world rich with data, and insights are growing more vibrant every day,” he writes.

Israel’s maturing fintech ecosystem may soon create global disruptors

Abstract of israel map network, internet and global connection concept, Wire Frame 3D mesh polygonal network line, design sphere, dot and structure. Vector illustration eps 10. (Abstract of israel map network, internet and global connection concept, W

Image Credits: Thitima Thongkham (opens in a new window) / Getty Images

Fintech startups based in Israel raised more than $1.8 billion in 2019, but in Q1 2021, companies in the category raised $1.1 billion.

Facilitating a wide range of services, more than a dozen fintech unicorns have already emerged in a country that has a population slightly smaller than Los Angeles County, many of them started by entrepreneurs who lacked financial backgrounds.

“So what is it about Israeli-founded fintech startups that stand out from their scaling neighbors across the pond?” asks Flint Capital’s Tel Aviv-based investor, Adi Levanon.

Forbes jumps into hot media liquidity summer with a SPAC combo

For The Exchange, Alex Wilhelm takes stock of Forbes’ SPAC combination during a week when POLITICO was snatched up for more than $1 billion by Axel Springer and just a few months after BuzzFeed went public via a blank-check company.

“Is it the most exciting debut? No,” he writes.

“But it does highlight that with enough sheer gumption, one can take a magazine business into the digital age and keep aggregate revenue growing. That’s worth something.”

Are B2B SaaS marketers getting it wrong?

A square peg forced into a round hole. 3D render with HDRI lighting and raytraced textures.

Image Credits: mevans (opens in a new window) / Getty Images

Technical jargon is one of the most annoying aspects of technology marketing.

Sadly, it tends to perpetuate itself: Marketers are terrified of making a wrong move, so they tend to copy what everyone else is doing.

If you want to attract customers and drive higher conversions, cut the jargon.

“Do everything you can to be immediately understood and you’ll have a much better chance of cutting through the noise and pushing clear and persuasive benefits in a way no prospect can resist,” advises Konrad Sanders, CEO of The Creative Copywriter.

Corporate venture capital follows the same trend as other VC markets: Up

By Anna Heim

As the global market for startup investing presses to new heights in terms of dollars invested this year, and deal volume ticks up in several regions, corporations are diving into the action.

Data from CB Insights and Stryber indicate that corporate investors are taking part in deals worth more than ever, even if corporate venture capital (CVC) deal activity is not up uniformly around the world.


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In a sense, it’s not surprising that CVCs are seeing the deals that they participate in rising in size — the global venture capital market has trended toward larger deals and more dollars for some time now. But questions lie inside the eye-popping figures: How are corporate investors adapting to a more rapid-fire and expensive venture capital market? We also wanted to know if CVCs are shaking up their deal sourcing, and whether the classic corporate venture tension between strategic investing and deploying capital for financial return is seeing a focus mix shift.

To help us understand the data we have at our fingertips, The Exchange reached out to M12’s Matt Goldstein, Sony Innovation Fund’s Gen Tsuchikawa and WIND VenturesBrian Walsh. (TechCrunch last covered CVC outfit WIND Ventures here.)

Let’s talk data and then dig into the nuance behind the numbers.

A boom in deal value

Precisely measuring CVC activity is interestingly difficult. When we discuss the value of venture capital deals, for example, what counts and what doesn’t is a matter of taste. For example, how to treat the SoftBank Vision Fund. Do deals that it leads that include venture capital participation count toward larger VC activity for a given period of time? What about investments led by crossover funds?

No matter what you choose, aggregate venture capital data will always include dollars invested by non-venture entities. So you do the best you can. CVC has the same problem, amplified. Because CVCs are often participatory to deals, instead of leading them, especially in the later stages of startup investing today, tallying concrete corporate venture investment is difficult. So we proceed in the same manner as we do with aggregate venture data counting, including deals that a particular investor type participated in.

Perfect, no. But it’s consistent, which is what we likely care about more. All that’s to say that when we observe the following deal and dollar data, CB Insights notes plainly that for its purposes, “‘CVC-backed funding’ and ‘CVC-backed deals’ refer to corporate venture capital participation in these funding rounds.”

Fair enough. Per CB Insights’ H1 2021 CVC report, CVCs participated in $78.7 billion in funding activity in the first half of 2021, a record for a half-year period. That dollar figure was derived from some 2,099 deals around the world. Precisely how strong those figures are is not clear from their absolute scale.

Indiagold raises $12 million for its gold-focused digital alternative credit platform

By Manish Singh

India has a fascination for gold. The households in the South Asian market are estimated to have a stash of over 25,000 tons of the precious metal, whose value today is about half of the country’s nominal GDP. But much of this gold has been sitting idly in lockers in big metal wardrobes for generations.

For generations, Indians across the socio-economic spectrum have preferred to stash their savings — or at least a part of it — in the form of gold. In fact, such is the demand for gold in India — Indians stockpile more gold than citizens in any other country — that the South Asian nation is also one of the world’s largest importers of this precious metal.

They use this gold not only as a savings instrument, which protects them from the ups-and-downs of the financial market, but also as an asset against which they could get credit. However, selling off your gold in the form of jewelry or otherwise has a stigma attached to it — one is so broke that they had to pawn off their last asset of financial security.

The other challenge with keeping gold in the house is that it’s not safe.

Indiagold, a young startup that is attempting to help people put this gold to use, said on Friday it has raised $12 million in its Series A funding. The new financing round was led by Prosus’ PayU — which typically only backs later stage deals — and Falcon’s Alpha Wave Incubation (AWI) fund. Better Tomorrow Ventures, 3one4 Capital, Rainmatter Capital and existing investor Leo Capital also participated in the round.

Indiagold, founded by Nitin Misra and Deepak Abbot — two former executives of Paytm — is building a gold-focused digital alternative credit platform.

The startup today has two major offerings: It has made it very easy and affordable for people to keep their gold in a safe locker; and it’s enabled them the option to take a loan against their gold reserves.

Once a user has signed about Indiagold, the startup’s agents come to their house, inspect and weigh the gold and put it in a tamper-proof bag, which also has a RFID sticker attached to it. Then they put the bag in a steel box, which the customer locks with their fingerprint, and the agent livestreams their journey as they leave the premises to the designated vault location.

The idea is to make it very simple for customers to put their gold in a locker. Traditionally, because of the emotional stigma attached to the yellow metal, most people have hesitated to do anything with the gold jewelry they own. When they engage with the agent who is locking the gold with their biometric in front of them and showing them the live feed of the journey to the safe locker, a trust is established.

“This whole business is built around trust,” said Gupta in an interview with TechCrunch. “Unless a norm in some circles of the startup ecosystem where you are expected to break things and move fast, we have to spend as much time with customers to build that trust,” he said.

Indiagold also offers their locker at a much affordable price — just a few dollars a year, as opposed to hundreds taken by banks. And unlike banks, Indiagold backs the customers’ gold by insurance.

Customers have access to Indiagold app where they can see realtime value of the gold items they have put in the locker. This is when the startup’s second offering kicks in. In the event these customers need to take a loan, the startup facilitates a line of credit to them within 30 seconds.

Tapping on gold as a loan collateral is a very large market in India. “Despite the large gold reserves held by Indian household, the gold loan market has barely scratched the surface. The gold collateral (166 tons) held by Muthoot Finance is less than 1% of the estimated gold reserves in Indian households (~25k tons). This is because gold is seen as a family heirloom and passed along generations,” analysts at Bernstein wrote in a report to clients earlier this year.

This is a developing story. More to follow…

Israel’s maturing fintech ecosystem may soon create global disruptors

By Annie Siebert
Adi Levanon Contributor
Adi Levanon has been an early-stage VC for nearly a decade, with a strong focus on fintech investments since 2015, both in the U.S. and Israel. Currently, she is the Tel Aviv-based investor at Flint Capital.

“Even with its vast local talent, it seems Israel still has many hurdles to overcome in order to become a global fintech hub. [ … ] Having that said, I don’t believe any of these obstacles will prevent Israel from generating disruptive global fintech startups that will become game-changing businesses.”

I wrote that back in 2018, when I was determined to answer whether Israel had the potential to become a global fintech hub. Suffice to say, this prediction from three years ago has become a reality.

In 2019, Israeli fintech startups raised over $1.8 billion; in 2020, they were said to have raised $1.48 billion despite the pandemic. Just in the first quarter of 2021, Israeli fintech startups raised $1.1 billion, according to IVC Research Center and Meitar Law Offices.

It’s then no surprise that Israel now boasts over a dozen fintech unicorns in sectors such as payments, insurtech, lending, banking and more, some of which reached the desired status just in the beginning of 2021 —  like Melio and Papaya Global, which raised $110 million and $100 million, respectively.

Over the years I’ve been fortunate to invest (both as a venture capitalist and personally) in successful early-stage fintech companies in the U.S., Israel and emerging markets  —  Alloy, Eave, MoneyLion, Migo, Unit, AcroCharge and more.

The major shifts and growth of fintech globally over these years has been largely due to advanced AI-based technologies, heightened regulatory scrutiny, a more innovative and adaptive approach among financial institutions to build partnerships with fintechs, and, of course, the COVID pandemic, which forced consumers to transact digitally.

The pandemic pushed fintechs to become essential for business survival, acting as the main contributor of the rapid migration to digital payments.

So what is it about Israeli-founded fintech startups that stand out from their scaling neighbors across the pond? Israeli founders first and foremost have brought to the table a distinct perspective and understanding of where the gaps exist within their respective focus industries —  whether it was Hippo and Lemonade in the world of property and casualty insurance, Rapyd and Melio in the world of business-to-business payments, or Earnix and Personetics in the world of banking data and analytics.

This is even more compelling given that many of these Israeli founders did not grow within financial services, but rather recognized those gaps, built their know-how around the industry (in some cases by hiring or partnering with industry experts and advisers during their ideation phase, strengthening their knowledge and validation), then sought to build more innovative and customer-focused solutions than most financial institutions can offer.

Having this in mind, it is becoming clearer that the Israeli fintech industry has slowly transitioned into a mature ecosystem with a combination of local talent, which now has expertise from a multitude of local fintechs that have scaled to success; a more global network of banking and insurance partners that have recognized the Israeli fintech disruptors; and the smart fintech -focused venture capital to go along with it. It’s a combination that will continue to set up Israeli fintech founders for success.

In addition, a major contributor to the fintech industry comes from the technological side. It is never enough to reach unicorn status with just the tech on the back end.

What most likely differentiates Israeli fintech from other ecosystems is the strong technological barriers and infrastructure built from the ground up, which then, of course, leads to the ability to be more customized, compliant, secured, etc. If I had to bet on where I believe Israeli fintech startups could become market leaders, I’d go with the following.

Voice-based transactions

Voice technologies have come a long way over the years; where once you knew you were talking to a robot, now financial institutions and applications offer a fully automated experience that sounds and feels just like a company employee.

Israel has shown growing success in the world of voice tech, with companies like Gong.io providing insights for remote sales teams; Bonobo (acquired by Salesforce) offering insights from customer support calls, texts and other interactions; and Voca.ai (acquired by Snapchat) offering an automated support agent to replace the huge costs of maintaining call centers.

Shares is a new stock trading app with a focus on social features

By Romain Dillet

Meet Shares, a new European startup that wants to add a social twist to financial investment — in that case, the company means ‘social’ as in ‘social network’. The startup has been developing its product under the radar for a few months already. It is also moving at a fast pace. It has assembled a team of 35 people and raised $10 million in a pre-product seed round.

Shares sent me a few details about what you should expect from the trading platform and why it’s different from what’s out there. Essentially, the startup combines two important trends.

First, stock trading has been moving to mobile and a few tech companies have been working on well-designed trading platforms to appeal to a new set of users. That shift is well underway in the U.S. as Robinhood has managed to attract tens of millions of users.

In Europe, it’s been a different story as the European market is still fragmented with a handful of stock-trading apps slowly expanding to new markets. Those companies include Freetrade, Trade Republic, Bitpanda and, to a certain degree, Revolut.

The second big investment trend of the past couple of years is that investment has become a social activity. Evidence of this lies in the GameStop short squeeze that occurred back in January 2021. In other words, people like to talk about stocks on Reddit, Discord, Telegram groups and more.

With Shares, users will be able to trade 1,500 stocks with no-minimum, no-fees access. You’ll be able to buy fractional shares and start investing with £1.00 in your Shares account. With such a low barrier to entry, the startup wants to convince first-time investors as the vast majority of people don’t own individual stocks. Shares plans to comply with KYC and AML regulation (‘Know Your Customer’ and ‘Anti-Money Laundering’).

But the app will offer more than just an interface to buy and sell shares. Users will be able to start conversations with friends, learn from experts and access market intelligence data. Shares will also feature some information to learn more about investing, tax, regulation and compliance. The most intriguing feature will be the ability to create group stock indexes with friends.

The startup was co-founded by Benjamin Chemla and François Ruty. Among other things, Benjamin Chemla previously co-founded Stuart, a last-mile logistics company that was acquired by La Poste in 2017.

They have already raised $10 million in a seed round led by Singular. Valar Ventures, Global Founders Capital and Red Sea Ventures also participated in the funding round. The startup has also partnered with some strategic advisors, including Freetrade co-founder André Mohamed.

That’s an impressive seed round for a fintech company that isn’t live yet. With a team of 35 people, it’s clear that Shares wants to move fast. It’s going to be interesting to see how online communities react when the app goes live.

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