Today’s children and teens want more power and control over their spending.
And while there are a number of financial services and apps out there aimed at helping this demographic save and invest money (Greenlight being among the most popular and well-known), one startup is coming at the space from another angle: helping younger people also better manage their spend.
Till Financial describes itself as a collaborative family financial tool that aims to empower kids to become smarter spenders. The New York-based company’s banking platform is designed to encourage “open and honest” discussions between parents and their kids. And it has just raised $5 million to help it advance on that goal.
A slew of investors put money in the round, including Elysian Park Ventures, Melinda Gates’ venture fund Pivotal Ventures with Magnify Ventures, Afore Capital, Luge Capital, Alpine Meridian Ventures, The Gramercy Fund, SM Ventures (the family office of the founders/CEOs of Stadium Goods) and Lightspeed Venture Partners’ Scout Fund. Also participating were angel investors such as the founders of fintech Petal, the founders of alcohol marketplace Drizly, the president of Transactis, and the president of 1800Flowers.
Part of Till’s goal is to help kids “learn by doing” and gain confidence in spending decisions. It arms them with a bank account, digital and physical debit card and goal-based savings. For example, say a teen wants to buy an iPad, they can set up an account that they can save toward that iPad and give family members (such as grandparents, for example) the opportunity to pitch in the same amount, or more. They can also set up recurring payments for things like Netflix or Spotify subscriptions so they can get a taste of what it’s like to pay regular bills.
“Parents and the current banking options miss the point when they just focus on savings. We need to first prepare kids to be Smarter Spenders, supported by savings and investing,” said Taylor Burton, who founded the company with Tom Pincince. “On Till, kids learn to spend with intention and purpose, while parents gain confidence and trust based on transparency and accountability.”
To Pincince, the market is clearly underserved.
“The legacy banks really don’t care about this young person and the early digital players are really missing the mark,” he said.
And despite the plethora of apps targeting the demographic, Pincince believes there’s plenty of room for the right players.
“The reality is you’re talking about a swath of kids under the age of 18 and over the age of eight that is the single largest unbanked population,” he said. “We’re not fighting to be the top of your son’s wallet. We’re fighting to be the first product into that wallet.”
Indeed, it’s a big market — the average middle-class family in the U.S. spends $284,570 per child by the time they turn 18.
The platform is free to all families and, early on, attracted the attention of Peggy Mangot, operating partner/COO of PayPal Ventures. She invested personally in Till in its pre-seed rounds. Prior to PayPal, Mangot ran development of Greenhouse, Well Fargo’s fee-free mobile banking app that aimed to help younger users build responsible spending habits.
Mangot has three kids and recalls that when they were shopping online, she’d give them her credit card. Or, if they were going to the corner store or meeting with friends, she’d give them cash.
“But that way, the money is meaningless to them. They didn’t really know how to understand what things cost and there was no sense of ownership,” she said. “It was just me handing over cash or a card.”
What attracted her the most about Till, Mangot said, was the team’s approach to treat younger people “with respect and agency.”
She also believes that by helping children and teens understand important financial lessons at a younger age, the world will ultimately be full of more responsible adults.
“By putting these tools in the hands of these young people early, they’ll have years and years of experience before they’re more independent and have to manage their paycheck and bills,” Mangot told TechCrunch. “Once you have mass adoption, it’s going to create a much more financially literate, confident and in control set of young adults than we’ve ever had.”
Besides making money on interchange fees, Till aims to earn revenue by partnering with merchants to offer rewards to users. It also plans to earn referral fees by referring the teens to other financial institutions when they get older and have different needs.
“It’s not our intention to be your son or daughter’s forever bank. It’s our intention to be the first bank,” Pincince said. “So, they hit the age of maturity, we’re actually giving them a high-five off of our platform and introducing them to maybe their first college loan or their first credit card.”
E-commerce is booming, but among the biggest challenges for entrepreneurs of online businesses are finding a place to store the items they are selling and dealing with the logistics of operating.
Tyler Scriven, Maxwell Bonnie and Paul D’Arrigo co-founded Saltbox in an effort to solve that problem.
The trio came up with a unique “co-warehousing” model that provides space for small businesses and e-commerce merchants to operate as well as store and ship goods, all under one roof. Beyond the physical offering, Saltbox offers integrated logistics services as well as amenities such as the rental of equipment and packing stations and access to items such as forklifts. There are no leases and tenants have the flexibility to scale up or down based on their needs.
“We’re in that sweet spot between co-working and raw warehouse space,” said CEO Scriven, a former Palantir executive and Techstars managing director.
Saltbox opened its first facility — a 27,000-square-foot location — in its home base of Atlanta in late 2019, filling it within two months. It recently opened its second facility, a 66,000-square-foot location, in the Dallas-Fort Worth area that is currently about 40% occupied. The company plans to end 2021 with eight locations, in particular eyeing the Denver, Seattle and Los Angeles markets. Saltbox has locations slated to come online as large as 110,000 square feet, according to Scriven.
The startup was founded on the premise that the need for “co-warehousing and SMB-centric logistics enablement solutions” has become a major problem for many new businesses that rely on online retail platforms to sell their goods, noted Scriven. Many of those companies are limited to self-storage and mini-warehouse facilities for storing their inventory, which can be expensive and inconvenient.
Scriven personally met with challenges when starting his own e-commerce business, True Glory Brands, a retailer of multicultural hair and beauty products.
“We became aware of the lack of physical workspace for SMBs engaged in commerce,” Scriven told TechCrunch. “If you are in the market looking for 10,000 square feet of industrial warehouse space, you are effectively pushed to the fringes of the real estate ecosystem and then the entrepreneurial ecosystem at large. This is costing companies in significant but untold ways.”
Now, Saltbox has completed a $10.6 million Series A round of financing led by Palo Alto-based Playground Global that included participation from XYZ Venture Capital and proptech-focused Wilshire Lane Partners in addition to existing backers Village Capital and MetaProp. The company plans to use its new capital primarily to expand into new markets.
The company’s customers are typically SMB e-commerce merchants “generating anywhere from $50,000 to $10 million a year in revenue,” according to Scriven.
He emphasizes that the company’s value prop is “quite different” from a traditional flex office/co-working space.
“Our members are reliant upon us to support critical workflows,” Scriven said.
Besides e-commerce occupants, many service-based businesses are users of Saltbox’s offering, he said, such as those providing janitorial services or that need space for physical equipment. The company offers all-inclusive pricing models that include access to loading docks and a photography studio, for example, in addition to utilities and Wi-Fi.
Image Credits: Saltbox
Image Credits: Saltbox
The company secures its properties with a mix of buying and leasing by partnering with institutional real estate investors.
“These partners are acquiring assets and in most cases, are funding the entirety of capital improvements by entering into management or revenue share agreements to operate those properties,” Scriven said. He said the model is intentionally different from that of “notable flex space operators.”
“We have obviously followed those stories very closely and done our best to learn from their experiences,” he added.
Investor Adam Demuyakor, co-founder and managing partner of Wilshire Lane Partners, said his firm was impressed with the company’s ability to “structure excellent real estate deals” to help them continue to expand nationally.
He also believes Saltbox is “extremely well-positioned to help power and enable the next generation of great direct to consumer brands.”
Playground Global General Partner Laurie Yoler said the startup provides a “purpose-built alternative” for small businesses that have been fulfilling orders out of garages and self-storage units.
Saltbox recently hired Zubin Canteenwalla to serve as its chief operating offer. He joined Saltbox from Industrious, an operator co-working spaces, where he was SVP of Real Estate. Prior to Industrious, he was EVP of Operations at Common, a flexible residential living brand, where he led the property management and community engagement teams.
Olist, a Brazilian e-commerce marketplace integrator, has raised $23 million in a Series D round extension led by new investor Goldman Sachs Asset Management that brings its total Series D financing to $80 million.
Existing backer Redpoint Ventures, which first put money in Olist in 2015, also participated in the latest round. With this latest infusion, Olist has now raised over $126 million since its 2015 inception. This round is reportedly its last before the company plans to go public, according to Bloomberg.
SoftBank led the first tranch of Olist’s Series D in November as well as the company’s $46 million Series C in 2019. Valor Capital, Velt Partners, FJ Labs, Península and angel Kevin Efrusy had previously invested in the first tranche of the Series D.
Olist connects small businesses to larger product marketplaces to help entrepreneurs sell their products to a larger customer base. The company was founded with the mission of helping small merchants gain market share across the country through a SaaS licensing model to small brick and mortar businesses.
As of October 2019, Olist had more than 7,000 customers and used a drop-shipping model to send products directly from stores to clients around the country, allowing them to grow with a capital-light model.
Today, Olist says its platform provides tools that support “all the stages of an e-commerce operation” with the goal of helping merchants see “rapid increases in sales volume.” It currently has about 25,000 merchants on its platform.
The startup is no doubt benefiting from the pandemic-fueled e-commerce boom taking place all over the world as more people have turned to online shopping. Latin America, in general, has been home to increased e-commerce adoption.
Olist says its revenue tripled to a record number in the first quarter of 2021 compared to the previous year, although it did not provide hard figures. It also reportedly doubled revenue in 2020, according to Bloomberg.
Olist Store, the company’s flagship product, gives merchants a way to manage product listings, logistics and store payments. It also offers “a unique sales experience” through channels such as Mercado Livre, B2W and Via Varejo. The product saw a record GMV in the first half of the year, which was up 2.5 times over the same period in the prior year, the company said.
Last year, Olist launched a new product, Olist Shops, giving users the ability to create a virtual showcase “in less than 3 minutes” that also offers payment checkout tools and integration with logistics operators. Shops has interfaces in Portuguese, English, and Spanish, and since its launch, it has attracted more than 200,000 users in 180 countries, according to Olist.
“The pandemic has accelerated digitalizing business processes around the world, thus spurring e-commerce growth in a surprising way,” said Tiago Dalvi, Olist’s founder and CEO, in a written statement.
The company plans to use its new capital to invest in technology and products, pursuing new mergers and acquisitions and boosting its internationalization process. This is on top of two acquisitions Olist made last year — Clickspace and Pax Logistica, which gave Olist entry into the heated logistics space with more than 4,000 registered drivers.
Specifically, CFO Eduardo Ferraz said the company is in preliminary discussions with ERPs, retailers, and companies with complementary solutions to its own.
“That is why we also decided to expand the investment in our Series D and bring Goldman Sachs as another relevant investor to our cap table,” he said.
David Castelblanco, managing director and head of Latin America Corporate and Growth Equity Investing for the Goldman Sachs Asset Management, said his firm was impressed with how Olist empowers SMBs to generate more revenue.
“Tiago and the Olist team are incredibly customer oriented and have created an innovative technological solution for their e-commerce clients,” he added.
Olist is operating in an increasingly crowded space. In March, we covered São Paulo-based Nuvemshop’s $90 million raise that was led by Silicon Valley venture firm Accel. That company has developed an e-commerce platform that aims to allow SMBs and merchants to connect more directly with their consumers.
In business today, many believe that consumer privacy and business results are mutually exclusive — to excel in one area is to lack in the other. Consumer privacy is seen by many in the technology industry as an area to be managed.
But the truth is, the companies who champion privacy will be better positioned to win in all areas. This is especially true as the digital industry continues to undergo tectonic shifts in privacy — both in government regulation and browser updates.
By the end of 2022, all major browsers will have phased out third-party cookies — the tracking codes placed on a visitor’s computer generated by another website other than your own. Additionally, mobile device makers are limiting identifiers allowed on their devices and applications. Across industry verticals, the global enterprise ecosystem now faces a critical moment in which digital advertising will be forever changed.
Up until now, consumers have enjoyed a mostly free internet experience, but as publishers adjust to a cookie-less world, they could see more paywalls and less free content.
They may also see a decrease in the creation of new free apps, mobile gaming, and other ad-supported content unless businesses find new ways to authenticate users and maintain a value exchange of free content for personalized advertising.
When consumers authenticate themselves to brands and sites, they create revenue streams for publishers as well as the opportunity to receive discounts, first-looks, and other specially tailored experiences from brands.
To protect consumer data, companies need to architect internal systems around data custodianship versus acting from a sense of data entitlement. While this is a challenging and massive ongoing evolution, the benefits of starting now are enormous.
Putting privacy front and center creates a sustainable digital ecosystem that enables better advertising and drives business results. There are four steps to consider when building for tomorrow’s privacy-centric world:
As we collectively look to redesign how companies interact with and think about consumers, we should first recognize that putting people first means putting transparency first. When people trust a brand or publishers’ intentions, they are more willing to share their data and identity.
This process, where consumers authenticate themselves — or actively share their phone number, email or other form of identity — in exchange for free content or another form of value, allows brands and publishers to get closer to them.
After his last startup, Framed Data, was acquired by Square, Thomson Nguyen began exploring new ideas. While an entrepreneur-in-residence at Kleiner Perkins, Nguyen interviewed hundreds of small business owners and realized that many pay hundreds of dollars in fees to maintain a business checking account. “Most small businesses are low margin, high cash flow, so they don’t have $4,000 just laying around,” Nguyen told TechCrunch. “We found in our analysis that micro-SMBs actually end up paying on average $450 in overdraft fees a year.”
Nguyen’s new startup Hatch recently launched its first two products and announced today it has secured a total of $20 million in funding from investors like Kleiner Perkins, Foundation Capital, SVB and Plaid’s founders. The fintech’s Hatch Business Checking accounts cost $10 a month, don’t charge non-sufficient funds (NSF) or overdraft fees and include cashback offers. Eligible account holders can also enroll in Hatch Cover, which covers overdrafts up to $100, or apply for lines of credit.
Some of Hatch’s customers have hundreds of employees, but Nguyen said the startup primarily focuses on businesses with up to 20 people. Many are run by only one person, who might be setting up a business account for the first time.
Hatch draws on Nguyen’s professional and personal backgrounds. Framed Data, a predictive analytics company, was acquired by Square in 2016. He worked as Square Capital’s head of data science before becoming an entrepreneur-in-residence at Kleiner Perkins in 2018, focusing on fintech and machine learning problems. As a child of immigrants, Nguyen saw firsthand the challenges small businesses can face.
“During my time at Kleiner, the goal was to think about what other problems I wanted to solve. I definitely wanted to solve additional problems within small businesses. I think a lot of what I appreciate about Square’s mission of economic empowerment for small businesses also really resonated with my own family story,” he said. “My parents immigrated here from Vietnam after the war and were like so many immigrants to the States to start small businesses. Figuring out how to use whatever talents I had to try to make it easier to start small businesses was definitely something I wanted to pursue.”
Hatch’s leadership team, including alumni of fintech companies and major financial institutions like Square, Stripe, Morgan Stanley and JP Morgan, talked to small business owners, and found that recent immigrants or people without credit histories were paying the majority of bank fees. The startup raised a $5 million seed round from Kleiner Perkins, Abstract Ventures and former Square executive Gokul Rajaram in January 2019, then a $14 million Series A round from Foundation Capital, SVB and Plaid founders William Hockey and Zack Perret in February 2020.
Hatch Business Checking began rolling out in January and currently has 4,000 users. The company’s inception coincided with an especially brutal time for many small business owners, as they weathered the COVID-19 pandemic’s economic impact and navigated the process of getting government aid through the Coronavirus Aid, Relief and Economic Security (CARES) Act.
“Initially I was a little worried, but as I was talking to all of our small business customers and even as I was doing these interviews, I realized that amidst a global pandemic, it’s been humbling to see the grit and perseverance of small business owners trying to innovate and learn,” Nguyen said.
For example, some of Hatch’s users are restaurants that hadn’t done deliveries before, but quickly signed up for multiple on-demand platforms like Postmates or Uber Eats. Others include accountants and lawyers who figured out how to move their practices online.
Hatch serves businesses in a wide range of sectors, including first-time entrepreneurs.
“There’s been this interesting trend of sole proprietors and individual creators who maybe had a side hustle, and after they were laid off during COVID, they decided, okay, I’m going start a small business,” Nguyen said. “Through our research, that’s actually how a lot of small businesses think of themselves, not as Thomson Tacos LLC for example, but just as myself, as Thomson, a person who is running this business.”
The startup uses machine learning to automate Hatch Business Checking’s online sign-up process and its know your customer (KYC) and know your business (KYB) requirements. This includes confirming business incorporation paperwork, social security or employer ID numbers and regulatory compliance like Office of Foreign Asset Control (OFAC) checks. Hatch can approve applications in less than five minutes. Once that process is complete, customers get a Mastercard virtual number and can link external bank accounts. Hatch also uses machine learning for real-time fraud and risk monitoring.
Nguyen said Hatch launched its overdraft coverage program because “we found it is a really great way for folks to get themselves out of a bind, finish the point sale and then top up their account later.”
If a business with a Hatch Business Checking account needs more working capital, it can apply for a Hatch Business Line of Credit, or loans between $200 to $5,000 at an APR of 18% to 24%. Hatch does not do hard credit checks and sees the credit lines as an alternative to the payday lenders or check cashers that customers without a FICO score or subprime ratings often use.
To screen loan applicants, Hatch uses information from their Business Checking accounts, including activity from connected point-of-sale systems. This allows Hatch to see real-time data and forecast a business’ potential forward revenue. It also enables the company to approve credit lines in as little as two hours.
“A hard credit check is actually quite difficult for recent immigrants or Americans who had trouble in their recent history. If you declare bankruptcy, it takes seven years to get it struck off your credit history,” said Nguyen. “To us, I think the more important factors are whether you actually have a business and whether that business is growing. We have a couple of examples of folks who declared bankruptcy three or four years ago, but they have a business that is booming and growing, and we’re happy to underwrite or originate that line of credit for them.”
But he emphasizes that Hatch, a signatory of the Small Business Owner’s Bill of Rights, does not see lending as a permanent solution and will not encourage its users to take on unnecessary debt.
“I think the reason we feel so strongly about this is that we want to win when our customers win,” Nguyen said. “If all we did was lending, then you would almost have a misalignment of incentives where you want to encourage lending retention. Given our business bank accounts and our revenue model, which is $10 a month and debit interchange, we really win when the business continues to exist. So for us, it’s almost a matter of building that financial independence for our customers.”
Hatch currently covers overdrafts and credit lines with its own balance sheet. “Because we’re using machine learning data to understand our own risk position, the main focus right now is to understand how businesses grow and model those products accordingly,” said Nguyen.
In an emailed statement, Kleiner Perkins partner Ilya Fushman told TechCrunch, “Small businesses account for nearly half of all economic activity in the U.S., but are often hamstrung by the banking ecosystem today. Hatch is democratizing access to the financial resources that small businesses need to start out and grow. Thomson and team are already working with thousands of SMBs and are uniquely suited with the technology and industry expertise to help them grow with the financial resources they need to be successful.”
In his statement about Foundation Capital’s investment, partner Charles Moldow said, “Our view at Foundation Capital is that the next phase of financial innovation is confluence: a coming together of lending and mobile banking. Hatch is a breaker wave of this movement for small businesses. That Thomson and his team were able to so rapidly stand up the only full-solution, mobile-first bank offering for SMBs is a testament to what they can and will accomplish.”
Since Hatch’s Series A, it has grown its team from eight people to 48, hiring remotely during the pandemic. Its plan is to expand its Business Checking accounts and continue building products for the estimated 40 million small businesses in the United States.
“When I think of the future products we can provide, it really centers around how do we make sure that a small business succeeds in starting up correctly and efficiently, and scaling their business,” said Nguyen. “Sometimes that’s financial products like our business accounts. Potentially, it could be software products that help you actually start that business. So there’s a wealth of different ideas and directions in which we can take Hatch.”
Chinese regulators have hit Alibaba with a record fine of 18 billion yuan (about $2.75 billion) for violating anti-monopoly rules as the country seeks to rein in the power of its largest internet conglomerates.
In November, China proposed sweeping antitrust regulations targeting its interent economy. In late December, the State Administration for Market Regulation said it had launched an antitrust probe into Alibaba, weeks after the authorities called off the initial public offering of Ant Group, the financial affiliate of Alibaba.
SAMR, the country’s top market regulator, said on Saturday it had determined that Alibaba had been “abusing market dominance” since 2015 by forcing its Chinese merchants to sell exclusively on one e-commerce platform instead of letting them choose freely among different services, such as Pinduoduo and JD.com. Vendors are often pressured to side with Alibaba to take advantage of its enormous user base.
Since late 2020, a clutch of internet giants including Tencent and Alibaba have been hit with various fines for violating anti-competition practices, for instance, failing to clear past acquisitions with regulators. The meager sums of these penalties were symbolic at best compared to the benefits the tech firms reap from their market concentration. No companies have been told to break up their empires and users still have to hop between different super-apps that block each other off.
In recent weeks, however, there are signs that China’s antitrust authorities are getting more serious. The latest fine on Alibaba is equivalent to 4% of the company’s revenue generated in the calendar year of 2019 in China.
“Today, we received the Administrative Penalty Decision issued by the State Administration for Market Regulation of the People’s Republic of China,” Alibaba said in a statement. “We accept the penalty with sincerity and will ensure our compliance with determination. To serve our responsibility to society, we will operate in accordance with the law with utmost diligence, continue to strengthen our compliance systems and build on growth through innovation.”
The thick walls that tech companies build against each other are starting to break down, too. Alibaba has submitted an application to have its shopping deals app run on WeChat’s mini program platform, Wang Hai, an Alibaba executive, recently confirmed.
For years, Alibaba services have been absent from Tencent’s sprawling lite app ecosystem, which now features millions of third-party services. Vice versa, WeChat is notably missing from Alibaba’s online marketplaces as a payment method. If approved, the WeChat-powered Alibaba mini app would break with precedent of the pair’s long stand-off.
Security researchers say APKPure, a widely popular app for installing older or discontinued Android apps from outside of Google’s app store, contained malicious adware that flooded the victim’s device with unwanted ads.
Kaspersky Lab said that it alerted APKPure on Thursday that its most recent app version, 3.17.18, contained malicious code that siphoned off data from a victim’s device without their knowledge, and pushed ads to the device’s lock screen and in the background to generate fraudulent revenue for the adware operators.
But the researchers said that the malicious code had the capacity to download other malware, potentially putting affected victims at further risk.
The researchers said the APKPure developers likely introduced the malicious code, known as a software development kit or SDK, from an unverified source. APKPure removed the malicious code and pushed out a new version, 3.17.19, and the developers no longer list the malicious version on its site.
APKPure was set up in 2014 to allow Android users access to a vast bank of Android apps and games, including old versions, as well as app versions from other regions that are no longer on Android’s official app store Google Play. It later launched an Android app, which also has to be installed outside Google Play, serving as its own app store to allow users to download older apps directly to their Android devices.
APKPure is ranked as one of the most popular sites on the internet.
But security experts have long warned against installing apps outside of the official app stores as quality and security vary wildly as much of the Android malware requires victims to install malicious apps from outside the app store. Google scans all Android apps that make it into Google Play, but some have slipped through the cracks before.
TechCrunch contacted APKPure for comment but did not hear back.
Digital mortgage lender Better.com has raised a $500 million round from Japanese investment conglomerate SoftBank that values the company at $6 billion.
The financing is notable for a few reasons. For one, that new $6 billion valuation is up 50% from the $4 billion it was valued at last November when it raised $200 million in Series D financing. It’s also up tenfold from its $600 million valuation at the time of its Series C raise in August 2019.
Secondly, it’s further proof that mortgage — a traditionally “unsexy” industry that has long been in need of disruption — is officially hot. For all its controversy, when SoftBank invests, people pay attention.
The COVID-19 pandemic and historically low mortgage rates fueled acceleration in the online lending space in a way that no one could have anticipated. That, combined with the general fervor in venture funding, means it’s not a big surprise that Better.com has raised $700 million in just a matter of months.
The investment brings Better.com’s total funding raised to over $900 million since its 2014 inception. Other backers include Goldman Sachs, Kleiner Perkins, American Express, Activant Capital and Citi, among others.
According to The Wall Street Journal, SoftBank is buying shares from Better’s existing investors, and agreed to give all of its voting rights to CEO and founder Vishal Garg “in a sign of its eagerness” to invest in the company.
During a one-on-one interview at LendIt Fintech’s USA 2020 virtual event in October, Garg told me that an IPO was definitely in the works.
“We’ll do it when it’s right,” he said. “One of the core tenets of American capitalism is the ability for your customers to buy your stock.”
And in February, Bloomberg reported that the startup had tapped Morgan Stanley and Bank of America Corp. for a planned initial public offering in the U.S. But there’s been no further word since. It’s not unusual for companies to raise large sums before an IPO. Affirm did it last year, for example.
Also last October, Varg told me that before the pandemic, Better was processing about $1.2 billion a month in loans. But as of October 2020, it was funding over $2.5 billion per month, and had gone from 1,500 staffers to about 4,000 worldwide.
“When the pandemic started we were doing less than sort of like $50 million a month of revenue,” he said at the time. “We’re two-and-a half times that now.”
Since then, those numbers have gone up even more. A company spokesperson told me today that Better.com funded $14 billion in loan volume in the first quarter of 2021 alone and that it is currently funding over $4 billions in loans a month. For some context, Better.com funded $25 billion in loan volume in all of 2020. And, it currently has 6,000 employees — up 2,000 from last October.
This article was updated post-publication with some additional numbers provided by the company.
In a circular released by Nigeria’s capital market regulator SEC today, investment platforms providing access to foreign securities might be treading on dangerous grounds.
According to the SEC regulations that have just been brought to light, these platforms are trading foreign securities not registered in the country and have been warned to stop doing so. Capital market operators in partnership with them have also been warned to renege on providing brokerage services for foreign securities.
Over the past three years, Robinhood-esque platforms like Bamboo, Trove, Chaka and Rise have sprung forth in the Nigerian fintech space. They offer Nigerians access to stocks, bonds and other securities in both local and international markets. These platforms have grown in popularity among the middle class and provide a haven to protect earnings from naira devaluations.
That said, there’s a vast difference in how they operate when compared to Robinhood. In addition to being a trading app, Robinhood offers online brokerages (introducing and clearing) and also zero commission trading. Nigerian investment platforms do not, and while any trading platform can get a brokerage license in the U.S., it can be a Herculean task to obtain one in Nigeria. This is where capital market operators (local and foreign brokerage firms in this case) come into play, forming strategic partnerships with these companies so Nigerians can access both local and foreign fractional securities.
After a series of regulatory onslaught from different government bodies on tech startups last year, the SEC followed suit in December. It singled out Chaka, one of the platforms and accused it of selling and advertising stocks. The regulator’s definition of the alleged offence was that Chaka “engaged in investment activities, including providing a platform for purchasing shares in foreign companies such as Google, Amazon, and Alibaba, outside the Commission’s regulatory purview and without requisite registration.”
The company’s CEO, Tosin Osibodu, denied any wrongdoing, and since the turn of the year, not much has been heard from the SEC and Chaka regarding this matter until the release of today’s circular. Unsurprisingly, the regulator continued from where it left off, only this time, all investment platforms including brokerage firms — not just Chaka — are involved. SEC’s subtle directive is to stop selling, issuing or offering for sale any foreign securities not listed on any exchange registered in Nigeria.
What this inherently means from now on is that investment platforms will have their work cut out and might only offer individuals access to only local stocks and securities. This affects the business models of these startups. And the core value they provide, which is to help Nigerians store monetary value and hedge against naira devaluation is at the threat of being wiped out.
Here’s the information released by the regulator as seen on its website:
The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on Securities Exchanges registered in other jurisdictions. These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.
The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.
The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.
This is a developing story. More to follow…
Edraak, an online education nonprofit, exposed the private information of thousands of students after uploading student data to an unprotected cloud storage server, apparently by mistake.
The non-profit, founded by Jordan’s Queen Rania and headquartered in the kingdom’s capital, was set up in 2013 to promote education across the Arab region. The organization works with several partners, including the British Council and edX, a consortium set up by Harvard, Stanford, and MIT.
In February, researchers at U.K. cybersecurity firm TurgenSec found one of Edraak’s cloud storage servers containing at least tens of thousands of students’ data, including spreadsheets with students’ names, email addresses, gender, birth year, country of nationality, and some class grades.
TurgenSec, which runs Breaches.UK, a site for disclosing security incidents, alerted Edraak to the security lapse. A week later, their email was acknowledged by the organization but the data continued to spill. Emails seen by TechCrunch show the researchers tried to alert others who worked at the organization via LinkedIn requests, and its partners, including the British Council.
Two months passed and the server remained open. At its request, TechCrunch contacted Edraak, which closed the servers a few hours later.
In an email this week, Edraak chief executive Sherif Halawa told TechCrunch that the storage server was “meant to be publicly accessible, and to host public course content assets, such as course images, videos, and educational files,” but that “student data is never intentionally placed in this bucket.”
“Due to an unfortunate configuration bug, however, some academic data and student information exports were accidentally placed in the bucket,” Halawa confirmed.
“Unfortunately our initial scan did not locate the misplaced data that made it there accidentally. We attributed the elements in the Breaches.UK email to regular student uploads. We have now located these misplaced reports today and addressed the issue,” Halawa said.
The server is now closed off to public access.
It’s not clear why Edraak ignored the researchers’ initial email, which disclosed the location of the unprotected server, or why the organization’s response was not to ask for more details. When reached, British Council spokesperson Catherine Bowden said the organization received an email from TurgenSec but mistook it for a phishing email.
Edraak’s CEO Halawa said that the organization had already begun notifying affected students about the incident, and put out a blog post on Thursday.
Last year, TurgenSec found an unencrypted customer database belonging to U.K. internet provider Virgin Media that was left online by mistake, containing records linking some customers to adult and explicit websites.
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The pandemic upended the way people shop for their everyday needs, including groceries. Online grocery sales in the U.S. are expected to reach 21.5% of the total grocery sales by 2025, after leaping from 3.4% pre-pandemic to 10.2% as of 2020. One business riding this wave is Mercato, an online grocery platform that helps smaller grocers and speciality food stores get online quickly. After helping grow its merchant sales by 1,300% in 2020, Mercato has now closed on $26 million in Series A funding, the company tells TechCrunch.
The round was led by Velvet Sea Ventures with participation from Team Europe, the investing arm of Lukasz Gadowski, co-founder of Delivery Hero. Seed investors Greycroft and Loeb.nyc also returned for the new round Gadowski and Mike Lazerow of Velvet Sea Ventures have also now joined Mercato’s board.
Mercato itself was founded in 2015 by Bobby Brannigan, who had grown up helping at his family’s grocery store in Brooklyn. But instead of taking over the business, as his Dad had hoped, Brannigan left for college and eventually went on to bootstrap a college textbook marketplace, Valore Books, to $100 million in sales. After selling the business, he returned his focus to the family’s store and found that everything was still operating the way it had been decades ago.
Image Credits: Bobby Brannigan of Mercato
“He had a very basic website, no e-commerce, no social media, and no point-of-sale system,” explains Brannigan. “I said, ‘I’m going to build what you need.’ This was my opportunity to help my dad in an area that I knew about,” he adds.
Brannigan recruited some engineers from his last company to help him build the software systems to modernize his dad’s store, including Mercato’s co-founders Dave Bateman, Michael Mason, and Matthew Alarie. But the team soon realized could do more than help just Brannigan’s dad — they could also help the 40,000 independent grocery stores just like him better compete with the Amazon’s of the world.
The result was Mercato, a platform-as-a-service that makes it easier for smaller grocers and speciality food shops to go online to offer their inventory for pickup or delivery, without having to partner with a grocery delivery service like Instacart, AmazonFresh or Shipt.
The solution today includes an e-commerce website and data analytics platform that helps stores understand what their customers are looking for, where customers are located, how to price their products, and other insights that help them to better run their store. And Mercato is now working on adding on a supply platform to help the stores buy inventory through their system, Brannigan notes.
“Basically, the vision of it is to give them the tech, the systems, and the platform they need to be successful in this day and age,” notes Brannigan.
He likens Mercato as a sort of “Shopify for groceries,” as it gives stores their own page on Mercato where they can reach customers. When the customer visits Mercato on the web or via its app, they can enter in their zip code to see which local stores offer online shopping. Some stores simply redirect their existing websites to their Mercato page, as they can continue to offer other basic information, like address, hours, and other details about their stores on the Mercato-provided site, while gaining access to Mercato’s over 1 million customers.
However, merchants can also opt for a white-label solution that they can plug into their own website, which uses their own branding.
The stores can further customize the experience they want to offer customers, in terms of pickup and delivery, and the time frames for both they want to commit to. If they want to ease into online grocery, for example, they can start with next-day delivery services, then speed thing up to same-day when they’re ready. They can also set limits on how many time slots they offer per hour, based on staffing levels.
Image Credits: Mercato
Unlike Instacart and others which send shoppers to stores to fill the orders, Mercato allows the merchants themselves to maintain the customer relationship by handling the orders themselves, which they can receive via email, text or even robo-phone calls.
“They’re maintaining that relationship,” says Brannigan. “Usually, it’s a lot better if it’s somebody from the store [doing the shopping] because they might know the customer; they know the kind of product they’re looking for. And if they don’t have it, they know something else they can recommend — so they’re like a really efficient recommendation engine.”
“The big difference between an Instacart shopper and the worker in the store is that the worker in the store understands that somebody is trying to put a meal on the table, and certain items could be an important ingredient,” he notes. “For the shoppers at Instacart, it’s about a time clock: how quickly can they pick an order to make the most money.”
The company contracts with both national and regional couriers to handle the delivery portion, once orders are ready.
Mercato’s system was put to test during the pandemic, when demand for online grocery skyrocketed.
This is where Mercato’s ability to rapidly onboard merchants came in handy. The company says it can take stores online in just 24 hours, as it has built out a centralized product catalog of over a million items. It then connects with the store’s point-of-sale system, and uploads and matches the store’s products to their own database. This allows Mercato to map around 95% of the store’s products in a matter of minutes, with the last bit being added manually — which helps to build out Mercato’s catalog even further. Today, Mercato can integrate with virtually all point-of-sale (POS) solutions in the grocery market, which is more than 30 different systems.
As customers shop, Mercato’s system uses machine learning to help determine if a product is likely in stock by examining movement data.
“One of the challenges in grocery is that most stores actually don’t know how many quantities they have in stock of a product,” explains Brannigan. “So we launch a store, we integrate with the POS. And with the POS we can see how quickly a product is moving in-store and online. Based on movement, we can calculate what is in stock.”
This system, he says, continues to get smarter over time, too.
“We’re certainly three to five years ahead, and we’re not going back,” says Brannigan of the COVID impacts to the online grocery business. “It’s very plentiful now in many places, in terms of e-commerce offerings. And the nature of retail businesses is competitive. So if 1% of people are online, it might not drive other people. But if you have 15% of stores online, then other stores have to get online or they won’t be able to compete,” he notes.
Mercato generates revenue both from its consumer-facing membership program, with plans that range from $96/year – $228/year, depending on distance, and from the merchants themselves, who pay a single digit percentage transaction fee on orders — a lower percentage than what restaurant delivery companies charge.
The company has now scaled its service to over 1,000 merchants across 45 U.S. states, including big cities like New York, Chicago, L.A. D.C., Boston, Philadelphia, and others.
With the additional funding, Mercato aims to expand its remotely distributed team of now 80 employees, as well as its data analytics platform, which will help merchants make better decisions that impact their business. It also plans to refresh the consumer subscription to add more benefits and perks that make it more compelling.
Mercato declined to share its valuation or revenue, but as of the start of the pandemic last year, the company had said it was reaching a billion in sales and a $700 million run rate.
There’s an “uber for everything” these days and now there are “Ubers for personal chefs”. Just take a look at PopTop or 100 Pleats for instance. Now in London, there is Yhangry (which brands itself as the appropriately shouty YHANGRY). This is a “private chef parties at home” website, and no doubt an app at some point. The startup has now raised a $1.5 million seed round from a number of notable UK angels which also includes a few UK VCs for good measure, as well as ‘Made In Chelsea’ TV star Ollie Locke.
Founders Heinin Zhang and Siddhi Mittal created the startup before the pandemic, which lets people order a made-to-measure dinner party online. Although it trundled along until Covid, it had to pivot into virtual chef classes during lockdowns last year and this. The company is now poised to take advantage of London’s unlocking, which will see legal outdoor and indoor dining return.
The startup also speaks to the decentralization of experiences going on in the wake of the pandemic. In 2019 we were working out in gyms and going to restaurants. In 2021 we are working out at home and bringing the restaurant to us.
Normally booking private dinner parties involves a lot of hassle. The idea here is that Yhangry makes the whole affair as easy to order as an Uber Eats or Deliveroo.
Investors in the Seed round include Carmen Rico (Blossom Capital), Eileen Burbidge (Passion Capital), Orson Stadler (Antler) and Martin Mignot (Index Ventures), Made In Chelsea star Ollie Locke, plus fellow tech founders including Jack Tang (Urban), Adnan Ebrahim (MindLabs), Alex Fitzgerald (Cuckoo Internet), Georgina Kirby (Vinehealth) and Deepali Nangia (Alma Angels). Yhangry’s statement said all the investors are also keen customers. I bet they are.
Co-founder Mittal said in a statement: “By making private chef experiences more accessible and affordable, our customers regularly tell us they are finally able to catch up with friends at home… 70% of our customers have never had a private chef before and for them, the freedom and flexibility to curate their own evening is priceless.”
Yhangry now has 130 chefs on its books. Chefs have to pass a cooking trial and adhere to Covid rules. The funding will be used to double the size of the startup’s team.
The menus start at £17pp for six people. The price of the booking covers everything, including the cost of the fresh ingredients, but customers can add extras, such as wine etc. Since its launch in December 2019, the firm says it has served more than 7,000 Londoners.
Yhangry says it will enter key European markets, such as Paris, Berlin, Lisbon and Barcelona.
How will Yhangry survive post-Covid, with restaurants/bars opening up again?
Mittal said: “When restaurants were open between our launch and March 2020, we saw demand because people want to be able to spend time with their friends in a relaxed setting, and aren’t limited to the two-hour slot you get in a restaurant. Once places start to open up again, we believe Yhangry will follow this trend of at-home dining and socializing – not to mention for people who are not ready yet to go out to a busy pub or restaurant.”
With the pandemic sending the planet indoors to workout, the at-home fitness market has boomed. It was only in October last year that three-year-old Future closed $24 million in Series B and Playbook (streaming for personal trainers) raised $9.3 million in a Series A. Into this market launched Moxie, a platform that allowed fitness instructors to broadcast live and recorded classes, access licensed music playlists and deploy a CRM and payment tools. Classes range from $5-$25 and various subscriptions and packages are offered.
Moxie has now raised a $6.3M ‘Seed+’ funding round led by Resolute Ventures with participation from Bessemer Ventures, Greycroft Ventures, Gokul Rajaram, and additional investors. With the $2.1M Seed round from last October, that means Moxie has now raised a total of $8.4M.
With the funding, Moxie now plans to better optimize the user experience with a curated selection of top Moxie classes; new tools that help connect users to instructors; and the ability to preview classes before attending.
The company claims to have experienced “exponential growth” because of its convenience in the pandemic era, with 8,000 classes and 1 million class-minutes completed in March. Moxie’s independent instructors set their own schedules and prices, and get to keep 85% of what they earn on the platform.
The company will also now launch ‘Moxie Benefits’ in partnership with Stride Health, provide instructors with access to health insurance, dental and vision plans, life insurance, and other benefits.
Also planned is ‘Moxie Teams’, enabling groups of instructors to join together to form small businesses on the platform, not unlike the way some Uber drivers form teams.
Jason Goldberg, CEO and founder said in a statement: “Moxie was born during the pandemic alongside thousands of independent fitness instructors who were forced out of gyms and studios and suddenly had to become entrepreneurs and navigate the new frontier of virtual fitness. Now we are seeing widespread adoption of online fitness into people’s lives, and Moxie’s growth proves that these shifts in consumer behavior have staying power. We know that 89% of Moxie users plan to continue virtual workouts post COVID — they love the convenience.”
Resolute Ventures Partner & Co-Founder Raanan Bar-Cohen said: “Our investment theory has always been to identify entrepreneurial founders solving for today’s problems. With Moxie, we saw an experienced operator in Jason, with a product that solved for the issues that instructors and consumers had experienced in the shift to online fitness, as well as a clear roadmap for continued success.”
So why has Moxie managed to cleave to the new virtual workout culture? Goldburg tells me it’s down to a range of factors.
For starters, it’s a two-sided fitness marketplace that has live interactive group fitness classes, unlike VOD apps, and, crucially, unlike Peloton. Additionally, any instructor can teach on Moxie, rather than wait to be picked as a ‘star’ by Peloton. Since 90% of classes are live group fitness classes, they are effectively replacing yoga studios and HIIT classes, rather than personal training. He says many top instructors are now earning $6-figures on the platform.
Certainly, Moxie has managed to capitalize on the fact that while gyms are closed, it’s easy to do virtual classes. Will they still stick around when the pandemic is over? Presumably many will find it more convenient than schlepping to the gym and less intimidating than joining classes in person. Additionally, users can switch classes as easily as switching TV channels.
As Goldberg told me via email: “Covid forced everyone to try virtual fitness for the first time. Guess what? People found it more convenient and more connected than going to offline gyms. And guess what? Peloton is not for everyone.”
While Nigeria and Kenya have been at the forefront of African fintech innovation, activities in Egypt are beginning to shape up nicely. Right now, Egypt is home to a burgeoning fintech startup ecosystem, and today, one of its biggest players, Paymob announced that it has completed an $18.5 million Series A round.
In July 2020, Paymob raised $3.5 million as its first tranche of Series A investment. An additional $15 million was raised from the same investors led by Dubai-based VC firm Global Ventures. Other investors include Egyptian investment fund A15 and Dutch development bank FMO.
The total raise of $18.5 million is the largest Series A round in Egypt yet and one of the largest equity rounds in North Africa.
“We are delighted to lead this momentous fintech fundraise in the region. Paymob has a perfect combination of high-quality technology, product customers increasingly cannot do without, and an outstanding management team, “Basil Moftah, general partner at Global Ventures, said of the investment. “Their market opportunity is also huge; Egypt’s transformation to a cashless society is being enabled by the unique products Paymob has built.”
Paymob was founded in 2015 by Alain El Hajj, Islam Shawky, and Mostafa El Menessy. The platform helps online and offline merchants to accept payments from their customers via several products and solutions. It offers a payment gateway that merchants can plugin into their sites or mobile application using its APIs. For offline merchants, Paymob has a POS solution where they can receive in-store card payments.
The company also has a payment links feature where merchants share links with their customers to receive payments that are received using mobile wallets. And according to the company, 85% of mobile wallets transactions carried out in Egypt is processed by its infrastructure. It also claims to be the largest payment facilitator in the country.
Asides from Egypt, Paymob is also present in Kenya, Pakistan, and Palestine. CEO Shawky says the company has plans to expand into more Sub-Saharan African countries. However, that will come after focusing on the Gulf Cooperation Council (GCC) to gain a large market share.
Regional expansion (with an imminent entry into Saudi Arabia this year) is one of Paymob’s objectives following this raise. Per a statement released by the company, it will also use the investments to expand its merchant network, meet increasing demand, and improve product offerings.
The pandemic presented one of the best opportunities for fintechs all over the world to achieve massive growth. For Paymob, it claims to have grown its monthly revenue over 5x last year. The company also recorded a total payment volume of more than $5 billion from over 35,000 local and international merchants like Swvl, LG, Breadfast, and Tradeline.
This growth allowed the fintech company to raise the second tranche of investment after closing just $3.5 million initially. Shawky told TechCrunch that the deal materialized after the company’s investors and management witnessed an “unprecedented growth” driven by the pandemic “in addition to the new initiatives launched by regulators, which encouraged them to increase their investment to meet our increasing demand.
As earlier iterated, fintech is on the rise in Egypt with startups like Moneyfellows, NowPay, Raseedi, Flick providing lending, payments, wealth and personal finance management services, etc.
The Egyptian fintech ecosystem also got a major boost when incumbent fintech Fawry became a publicly-traded unicorn for the first time. Since launching in 2007, Fawry has been the largest online payment platform in the country and offers a variety of services ranging from mobile wallet to banking services. Will Fawry’s longstanding presence pose a challenge to Paymob’s quest to become a dominant fintech as well? Shawky doesn’t think so.
“Paymob’s major competitor is cash. With only a small percentage of the economy operating in digital forms, we believe the opportunity of truly transforming cash into digital is yet to be unlocked,” he said.
Food delivery startups, and specifically those focused on grocery delivery, continue to reap super-sized rounds of funding in Europe, buoyed by a year of pandemic living that has led many consumers to shift to shopping online. Today, the latest of these is coming out of Norway.
Kolonial, a startup based out of Oslo that offers same-day or next-day delivery of food, meal kits and home essentials — its aim is to provide “a weekly shop” for prices that compete against those of traditional supermarkets — has raised €223 million ($265 million) in an equity round of funding. Along with that, the company — profitable as of last year — is rebranding to Oda and plans to use the money (and new name) to expand to more markets, starting first with Finland and then Germany in 2022.
The market for online grocery ordering and delivery is gearing up to be a very crowded one, with hundreds of millions of dollars being poured by investors into the fuel tanks of a range of startups — each originating out of different geographies, each with a slightly different approach. Oda believes it has the right mix to end up at the front of the pack.
“We have found ourselves in a unique position,” CEO and co-founder Karl Munthe-Kaas said in an interview with TechCrunch. “We have built a service targeting the mass market with instant deliveries and low prices, because if you want to capture the full basket for the family, you can’t be a premium service. We’ve done that, and we’re profitable.”
And now, it will have the backing of two e-commerce heavyweights for its next steps. SoftBank’s Vision Fund 2 and Prosus (the tech holdings of South Africa’s Naspers), are co-leading the round, with past backers Kinnevik and a strategic investor, Norwegian “soft discount” chain REMA, also participating.
Munthe-Kaas confirmed to TechCrunch in an interview that Oda is valued at €750 million ($900 million) post-money.
The funding is a big leap for Oda (the name is not officially going to come into effect until the end of this month, although the company is already describing itself with the new brand, so we’ll follow that lead). PitchBook data notes that before this round, Oda had only raised about $96 million, and its last valuation was estimated to be just $178 million in 2017.
The company has certainly come a long way. Founded in 2013 by ten friends, Kolonial originally seemed to have a more modest vision when it first started out: Kolonial in Norwegian doesn’t mean “colonial” (a connotation Munthe-Kaas nevertheless said the startup wanted to avoid, one big reason for the change), but “cornershop.” These days, Oda is focused more on competing against large supermarkets — its average order size is $120 — yet with a significantly more efficient cost base behind the scenes.
It’s also been helped by the current climate. Online grocery shopping has been growing and maturing for a while now, but the last year been a veritable hothouse in that process: Covid-19, shelter in place orders and a general desire for people to keep their distance all compelled many more consumers to try out online grocery shopping for the first time, and many have stuck with it.
“We have seen a significant inflection point with grocery over the last year with the market transitioning online, accelerated by Covid,” said Larry Illg, CEO of Prosus Food, in a statement. “Oda’s leadership and impressive growth in Norway paired with its ground-breaking technology and ambition to scale across Europe and beyond makes them an ideal partner to tackle the grocery opportunity over the coming years.”
Oda has over the years grown to become the sector leader in a category it arguably helped define in its home country. It was profitable last year on revenues of €200 million, and it currently controls some 70% of Norway’s online grocery ordering and delivery market based on its own particular approach to the model.
That model involves Oda building and controlling its own supply chains from producers to consumers (no partnerships with third y partphysical retailers), producing several of the products itself (such as baked goods) to order, and using centralized fulfillment centers to manage orders for large geographies.
“Centralized warehouses means 50 supermarkets in one location,” Munthe-Kaas said, adding that this also makes the business significantly greener, too.
Those fulfillment centers, meanwhile, are operated at “extreme efficiency”, in his words. Oda’s grocery item picking averages out at 212 units per hour — that is, the amount of items “picked” for orders in a week divided by the number of hours in a week. The next closest UPH number in the industry, Munthe-Kaas said, was Ocado in the UK at 170 UPH, and the norm, he added, was more like 100 UPH, with physical store picking (where customers select items from shelves themselves) averaging out at 70 UPH.
All of this translates to much more cost-effective operations, including more efficient ordering and stock rotation, which helps Oda make better margins on its sales overall. Munthe-Kaas declined to go into the details of how Oda manages to get such high UPH numbers — that’s competitive knowledge, he said — noting only that a lot of automation and data analytics goes into the process.
That will be music to the ears of SoftBank, which has had a complicated run in e-commerce in the last several years, backing a number of interesting juggernauts that have nonetheless found themselves unable to improve on challenging unit economics.
“Oda’s leading position in Norway is testament to the merits of its bespoke and data-driven approach in offering a personalised, holistic and reliable online grocery experience,” said Munish Varma, managing partner for SoftBank Investment Advisers, in a statement. “We believe that Oda’s customer-centric focus, market-leading automation technology and fulfillment efficiency are a winning combination, and position Oda for success in scaling internationally for the benefit of customers and suppliers alike.”
The big challenge for Oda going forward will be whether it can transplant its business model as it has been developed for Norway into further markets.
Oda will not only be looking for customer traction for its own business, but it will be doing so potentially against heavy competition from others also looking to expand outside their borders.
There are other online supermarket plays like Rohlik out of the Czech Republic (which in March bagged $230 million in funding); Everli out of Italy (formerly called Supermercato24, it also raised $100 million); Picnic out of the Netherlands (which has yet to announce any recent funding but it feels like it’s only a matter of time given it too has publicly laid out international ambitions); and Ocado in the UK (which also has raised huge amounts of money to pursue its own international ambitions).
And there is also the wave of companies that are building more fleet-of-foot approaches around smaller inventories and much faster turnaround times, the idea being that this can cater both to individuals and a different way of shopping — smaller and more often — even if you are a family.
Among these so-called “q-commerce” (quick commerce) players, covering just some of the most recent funding rounds, Glovo just last week raised $528 million; Gorillas in Berlin raised $290 million; Turkey’s Getir — also rapidly expanding across Europe — picked up $300 million on a $2.6 billion valuation as Sequoia took its first bite into the European food market; and reportedly Zapp in London has also closed $100 million in funding.
Deliveroo, which went public last week, is also now delivering groceries (in partnership with Sainsbury’s) alongside its restaurant delivery service.
These, ironically, are more cornershop replacements than Oda itself (formerly called Kolonia, or “cornershop” in Norwegian), and Munthe-Kaas said he sees them as “complementary” to what Oda does.
“You need to beat the physical stores on quality, selection and price and get it home delivered,” he said. “This is a margin business and the only way to optimize is to be completely relentless.”
But he also understands that this might ultimately need to be modified depending on the market. For example, while the company has not worked with other retailers in Norway — even the investment by REMA is not for distribution but for better economies of scale in procuring products that REMA and Oda will sell independently from each other — this might be a route that Oda chooses to take in other markets.
“We’re in discussions with several other retailers, wholesalers and producers,” he said. “It’s important to get sourcing terms and have upstream logistics, but there are many ways of achieving that. We are super open to making partnerships on that front, but we still think the way to win is to run the value chain.”
Pinterest today hosted an event focused on its creator community, where the company announced a series of updates including the launch of a $500,000 Creator Fund, a new content policy called the Creator Code, as well as new moderation tools, among other things. With the changes, the company says its goal is to ensure the platform continues to be a “inclusive, positive and inspiring place.” The new content guidelines put that into more specific terms as it requires Pinterest creators to fact-check content, practice inclusion, be kind, and ensure any call to action they make via the site doesn’t cause harm.
Creators will be required to agree and sign the code during the publishing process for Story Pins, where they tap a button that say “I agree” to statements that include “Be Kind,” “Check my facts,” “Be aware of triggers,” “Practice inclusion,” and “Do Not Harm.”
Image Credits: Pinterest
The code will be enforced the same way Pinterest today applies its rules for its other content policies: a combination of machine learning and human review, Pinterest tells us. However, the site’s algorithm will be designed to reward positive content and block harmful content, like anti-vaccination sentiments, for example. This could have a larger impact on what sort of content is shared on Pinterest, rather than a pop-up agreement with simple statements.
The Creator Code itself is not yet live, but will roll out to creators to sign and adopt in the weeks ahead, Pinterest says.
Image Credits: Pinterest
Pinterest today also introduced several new creator tools focused on the similar goal of making Pinterest a more positive, safe experience for all.
It’s launching comment moderation tools that will allow creators to remove and filter comments on their content, as well as tools that will allow them to feature up to three comments in the comment feed to highlight positive feedback. New spam prevention tools will help to clear out some of the unwanted comments, too, by leveraging machine learning technology to detect and remove bad comments.
Also new are “positivity reminders,” which will pop up asking Pinterest users to reconsider before posting potentially offensive comments. The notification will push users to go back and edit their comment, but doesn’t prevent them from posting.
Image Credits: Pinterest
Related to these efforts, Pinterest announced the launch of its first-ever Creator Fund at today’s event. The fund is specifically focused on elevating creators from underrepresented communities in the United States, and will offer a combination of creative strategy consulting, and compensating them with budget for content creation and ad credits. At least 50% of the fund’s recipients will be from underrepresented groups, Pinterest says.
The company tells us it’s initially committed to giving creators $500,000 in cash and media throughout 2021.
“For the first participants of the program, we worked with eight emerging creators across fashion, photography, food and travel, and will be identifying ten more creators in the next few months for the next cohort,” noted Creator Inclusion Lead Alexandra Nikolajev.
“We’re on a journey to build a globally inclusive platform where Pinners and Creators around the world can discover ideas that feel personalized, relevant and reflective of who they are,” Nikolajev said.
Pinterest has been working to rebuild its image in the wake of last year’s allegations of a host of internal issues, including unfair pay, racism, retaliation, and sexism, which conflicted with its outside image of being one of the “nicer” places to work in tech. Despite this fallout — which included a lawsuit, employee walkout, petitions, and more — the issues that had been raised weren’t always reflected in Pinterest’s product.
The company had previously launched inclusive features like “skin tone ranges” to help those shopping for beauty products find matches for their skin tone. It also allowed retailers and brands to identify themselves as members of an underrepresented group, which gave their content the ability to appear in more places across Pinterest’s platform, like the Today tab, Shopping Spotlights and The Pinterest Shop, for instance.
Evan Sharp, Pinterest’s co-founder and Chief Design and Creative Officer, referenced the company’s image as “a positive place” at today’s event.
“We’ve been building Pinterest for 11 years, and ever since our users routinely tell us that Pinterest is the ‘last positive corner of the internet.’ In that time, we’ve also learned that you need to design positivity into online platforms as deliberately as much as you design negativity out,” Sharp said. “The Creator Code is a human-centric way for Creators to understand how to be successful on Pinterest while using their voice to keep Pinterest positive and inclusive,” he added.
Today, Pinterest serves over 450 million users worldwide, but is challenged by large platforms serving creators like Facebook, Instagram, YouTube, and others, including newcomers like TikTok and those that are inching into the creator community with funds of their own, like Snapchat, which is paying creators for Spotlight content, and Clubhouse, which is now funding creators’ shows. The increased competition for creator interest has left Pinterest needing an incentive program of its own.
To kick of its announcement, Pinterest’s Head of Content and Creator Partnerships, Aya Kanai, interviewed television personality Jonathan Van Ness (Queer Eye) at today’s virtual event, where they talked about the need for positivity and inclusivity on social media. Other event participants included creators Peter Som, Alison Cayne, Onyi Moss, Oyin Edogi and Jomely Breton — the latter two who spoke about putting the Creator Fund to use for themselves.
Twitch will start holding its streamers to a higher standard. The company just expanded its hate and harassment policy, specifying more kinds of bad behavior that break its rules and could result in a ban from the streaming service.
The news comes as Twitch continues to grapple with reports of abusive behavior and sexual harassment, both on the platform and within the company itself. In December, Twitch released an updated set of rules designed to take harassment and abuse more seriously, admitting that women, people of color the and LGBTQ community were impacted by a “disproportionate” amount of that toxic behavior on the platform.
Twitch’s policies now include serious offenses that could pose a safety threat, even when they happen entirely away from the streaming service. Those threats include violent extremism, terrorism, threats of mass violence, sexual assault and ties to known hate groups.
The company will also continue to evaluate off-platform behavior in cases that happen on Twitch, like an on-stream situation that leads to harassment on Twitter or Facebook.
“While this policy is new, we have taken action historically against serious, clear misconduct that took place off service, but until now, we didn’t have an approach that scaled,” the company wrote in a blog post, adding that investigating off-platform behavior requires additional resources to address the complexity inherent in those cases.
To handle reports for its broadened rules, Twitch created a dedicated email address (OSIT@twitch.tv) to handle reports about off-service behavior. The company says it has partnered with a third party investigative law firm to vet the reports it receives.
Twitch cites its actions against former President Donald Trump as the most high profile instance of off-platform behavior resulting in enforcement. The company disabled Trump’s account following the attack on the U.S. Capitol and later suspended him indefinitely, citing fears that he could use the service to incite violence.
It’s hard to have a higher profile than the president, but Trump isn’t the only big time banned Twitch user. Last June, Twitch kicked one of its biggest streamers off of the platform without providing an explanation for the decision.
Going on a year later, no one seems to know why Dr. Disrespect got the boot from Twitch, though the company’s insistence that it only acts in cases with a “preponderance of evidence” suggests his violations were serious and well-corroborated.
Kavak, the Mexican startup that’s disrupted the used car market in Mexico and Argentina, today announced its Series D of $485 million, which now values the company at $4 billion. This round more than triples their previous valuation of $1.15 billion, which established them as a unicorn just a couple of months ago in October of 2020. Kavak is now one of the top five highest-valued startups in Latin America.
The round was led by D1 Capital Partners, Founders Fund, Ribbit and BOND, and brings Kavak’s total capital raised to date to more than $900 million. Kavak recently soft-launched in Brazil, and this new round of funding will be used to build out the Brazilian market and beyond, said Carlos García Ottati, Kavak’s CEO and co-founder. The company plans to do a full launch in Brazil in the next 60 days, García said, and we can expect to see Kavak in markets outside Latin America in the next 24 months, he added.
“We were built to solve emerging market problems,” García said.
Kavak, which was founded in 2016, is an online marketplace that aims to bring transparency, security and access to financing to the used car market. The company also offers its own financing through its fintech arm, Kavak Capital, and counts more than 2,500 employees and 20 logistics and reconditioning hubs in Mexico and Argentina.
“In Latin America, 90% of the [used car] transactions are informal, which leads to a 40% fraud rate,” said García, who experienced these challenges firsthand when he moved to Mexico from Colombia a couple of years ago and bought a used car.
“My budget allowed me to buy a used car, but there was no infrastructure around it. It took me six months to buy the car, and then the car had legal and mechanical issues and I lost most of my money,” he said. Kavak buys cars from individuals, refurbishes them and offers warranties to buyers.
“Instead of buying a new car, they can buy a better car that still has all the warranties. It’s a really aspirational process,” said García. The company, which really amounts to four companies in one given its areas of focus, was built to be comprehensive by design in order to meet the various gaps in the market, García said.
“When you’re building a business here [Latin America], you need to build several businesses because so many things are broken,” he said. That’s why the financing option, for example, has been a key to their success, according to García.
Financing has traditionally been hard to come by in Brazil, and as García said, the used car market lacks infrastructure there, too. That being said, Brazil is Latin America’s fintech hub, and the space has made leaps and bounds over the last 7-10 years with companies such as Nubank, PagSeguro, Creditas, PicPay, and others leading the way. As a result, credit cards and loans are more widely available today in the region, offering competition for Kavak Capital. While Kavak has localized some of its product for the Brazilian market — namely building out a Portuguese language version of the app and website — García said the markets are very similar.
“In Brazil, you still have the same problems that you have in Mexico, but Brazil is a little more developed, especially in fintech, which is light years ahead of Mexico,” he said.
With the Brazilian product heading to the races, García said they already have plans for other regions, though he declined to name them.
“80% of people in emerging markets don’t have access to a car,” García said of the global market size. “We want to go into big markets where customers are facing similar problems and where Kavak can really change their lives,” he added.
A new UK public body that will be tasked with helping regulate the most powerful companies in the digital sector to ensure competition thrives online and consumers of digital services have more choice and control over their data has launched today.
The Digital Markets Unit (DMU), which was announced in November last year — following a number of market reviews and studies examining concerns about the concentration of digital market power — does not yet have statutory powers itself but the government has said it will consult on the design of the new “pro-competition regime” this year and legislate to put the DMU on a statutory footing as soon as parliamentary time allows.
Concerns about the market power of adtech giants Facebook and Google are key drivers for the regulatory development.
Our new Digital Markets Unit, launched today, will help make sure tech giants can’t exploit their market dominance to crowd out competition and stifle innovation online.
— Competition & Markets Authority (@CMAgovUK) April 7, 2021
As a first job, the unit will look at how codes of conduct could work to govern the relationship between digital platforms and third parties such as small businesses which rely on them to advertise or use their services to reach customers — to feed into future digital legislation.
The role of powerful intermediary online gatekeepers is also being targeted by lawmakers in the European Union who proposed legislation at the end of last year which similarly aims to create a regulatory framework that can ensure fair dealing between platform giants and the smaller entities which do business under their terms.
The UK government said today that the DMU will take a sector neutral approach in examining the role of platforms across a range of digital markets, with a view to promoting competition.
The unit has been asked to work with the comms watchdog Ofcom, which the government named last year as its pick for regulating social media platforms under planned legislation due to be introduced this year (aka, the Online Safety Bill as it’s now called).
While that forthcoming legislation is intended to regulate a very wide range of online harms which may affect consumers — from bullying and hate speech to child sexual exploitation and other speech-related issues (raising plenty of controversy, and specific concerns about associated implications for privacy and security) — the focus for the DMU is on business impacts and consumer controls which may also have implications for competition in digital markets.
As part of its first work program, the government said the secretary of state for digital has asked the DMU to work with Ofcom to look specifically at how a code would govern the relationships between platforms and content providers such as news publishers — “including to ensure they are as fair and reasonable as possible”, as its press release puts it.
This suggests the DMU will be taking a considered look at recent legislation passed in Australia — which makes it mandatory for platforms to negotiate with news publishers to pay for reuse of their content.
Earlier this year, the head of the UK’s Competition and Markets Authority (CMA), which the DMU will sit within, told the BBC that Australia’s approach of having a backstop of mandatory arbitration if commercial negotiations between tech giants and publishers fail is a “sensible” approach.
The DMU will also work closely with the CMA’s enforcement division — which currently has a number of open investigations into tech giants, including considering complaints against Apple and Google; and an in-depth probe of Facebook’s Giphy acquisition.
Other UK regulators the government says the DMU will work closely with include the data protection watchdog (the ICO) and the Financial Conduct Authority.
It also said the unit will also coordinate with international partners, given digital competition is an issue that’s naturally globally in nature — adding that it’s already discussing its approach through bilateral engagement and as part of its G7 presidency.
“The Digital Secretary will host a meeting of digital and tech ministers in April as he seeks to build consensus for coordination on better information sharing and joining up regulatory and policy approaches,” it added.
The DMU will be led by Will Hayter, who takes up an interim head post in early May following a stint at the Cabinet Office working on Brexit transition policy. Prior to that he worked for several years at the CMU and also Ofcom, among other roles in regulatory policy.
The gaming sector has never been hotter or had higher expectations from investors who are dumping billions into upstarts that can adjust to shifting tides faster that the existing giants will.
Bay Area-based Manticore Games is one of the second-layer gaming platforms looking to build on the market’s momentum. The startup tells TechCrunch they’ve closed a $100 million Series C funding round, bringing their total funding to $160 million. The round was led by XN, with participation from Softbank and LVP alongside existing investors Benchmark, Bitkraft, Correlation Ventures and Epic Games.
When Manticore closed its Series B back in September 2019, VCs were starting to take Roblox and the gaming sector more seriously, but it took the pandemic hitting to really expand their expectations for the market. “Gaming is now a bonafide super category,” CEO Frederic Descamps tells TechCrunch.
Manticore’s Core gaming platform is quite similar to Roblox conceptually, the big difference is that the gaming company is aiming to quickly scale up a games and creator platform geared towards the 13+ crowd that may have already left Roblox behind. The challenge will be coaxing that demographic faster than Roblox can expand its own ambitions, and doing so while other venture-backed gaming startups like Rec Room, which recently raised at a $1.2 billion valuation, race for the same prize.
Like other players, Manticore is attempting to build a game discovery platform directly into a game engine. They haven’t built the engine tech from scratch, they’ve been working closely with Epic Games which makes the Unreal Engine and made a $15 million investment in the company last year.
A big focus of the Core platform is giving creators a true drag-and-drop platform for game creation with a specific focus on “remixing” allowing users to pick pre-made environments, drop pre-rendered 3D assets into them, choose a game mode and publish it to the web. For creators looking to inject new mechanics or assets into a title, there will be some technical know-how necessary but Manticore’s team hopes that making the barriers of entry low for new creators means that they can grow alongside the platform. Manticore’s big bet is on the flexibility of their engine, hoping that creators will come on board for the chance to engineer their own mechanics or create their own path towards monetization, something established app store wouldn’t allow them to.
“Creators can implement their own styles of [in-app purchases] and what we’re really hoping for here is that maybe the next battle pass equivalent innovation will come out of this,” co-founder Jordan Maynard tells us.
This all comes at an added cost, developers earn 50% of revenues from their games, leaving more potential revenue locked up in fees routed to the platforms that Manticore depends on than if they built for the App Store directly, but this revenue split is still much friendlier to creators that what they can earn on platforms like Roblox.
Building cross-platform secondary gaming platforms is host to plenty of its own challenges. The platforms involved not only have to deal with stacking revenue share fees on non-PC platforms, but some hardware platforms that are reticent to allow them all, an area where Sony has been a particular stickler with PlayStation. The long-term success of these platforms may ultimately rely on greater independence, something that seems hard to imagine happening on consoles and mobile ecosystems.