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African payment startup Chipper Cash raises $13.8M Series A

By Jake Bright

African cross-border fintech startup Chipper Cash has closed a $13.8 million Series A funding round led by Deciens Capital and plans to hire 30 new staff globally.

The raise caps an event filled run for the San Francisco based payments company, founded two years ago by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled.

The two came to America for academics, met in Iowa while studying at Grinnell College and ventured out to Silicon Valley for stints in big tech: Facebook for Serunjogi and Flickr and Yahoo! for Moujaled.

The startup call beckoned and after launching Chipper Cash in 2018, the duo convinced 500 Startups and and Liquid 2 Ventures — co-founded by American football legend Joe Montana — to back their company with seed funds.

Two years and $22 million in total capital raised later, Chipper Cash offers its mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.

“We’re now at over one and a half million users and doing over a $100 million dollars a month in volume,” Serunjogi told TechCrunch on a call.

Chipper Cash does not release audited financial data, but does share internal performance accounting with investors. Deciens Capital and Raptor Group co-led the startup’s Series A financing, with repeat support from 500 Startups and Liquid 2 Ventures .

Deciens Capital founder Dan Kimmerling confirmed the fund’s lead on the investment and review of Chipper Cash’s payment value and volume metrics.

Parallel to its P2P app, the startup also runs Chipper Checkout: a merchant-focused, fee-based mobile payment product that generates the revenue to support Chipper Cash’s free mobile-money business.

The company will use its latest round to hire up to 30 people across operations in San Francisco, Lagos, London, Nairobi and New York — according to Serunjogi.

Image Credits: Chipper Cash

Chipper Cash has already brought on a new compliance officer, Lisa Dawson, whose background includes stints with the U.S. Department of Treasury’s Financial Crimes Enforcement Network and Citigroup’s anti-money laundering department.

“You know in the world we live in the AML side is very important so it’s an area that we want to invest in from the get go,” said Serunjogi.

He confirmed Dawson’s role aligned with getting Chipper Cash ready to meet regulatory requirements for new markets, but declined to name specific countries.

With the round announcement, Chipper Cash also revealed a corporate social responsibility component to its business. Related to current U.S. events, the startup has formed the Chipper Fund for Black Lives.

“We’ve been huge beneficiaries of the generosity and openness of this country and its entrepreneurial spirit,” explained Serunjogi. “But growing up in Africa, we’ve were able to navigate [the U.S.] without the traumas and baggage our African American friends have gone through living in America.”

The Chipper Fund for Black Lives will give 5 to 10 grants of $5,000 to $10,000. “The plan is to give that to…people or causes who are furthering social justice reforms,” said Serunjogi.

In Africa, Chipper Cash has placed itself in the continent’s major digital payments markets. As a sector, fintech has become Africa’s highest funded tech space, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019.

Africa Top VC Markets 2019

Image Credits: TechCrunch

Those ventures, and a number of the continent’s established banks, are in a race to build market share through financial inclusion.

By several estimates — including The Global Findex Database — the continent is home to the largest percentage of the world’s unbanked population, with a sizable number of underbanked consumers and SMEs.

Increasingly, Nigeria has become the most significant fintech market in Africa, with the continent’s largest economy and population of 200 million.

Chipper Cash expanded there in 2019 and faces competition from a number of players, including local payments venture Paga. More recently, outside entrants have jumped into Nigeria’s fintech scene.

In 2019, Chinese investors put $220 million into OPay (owned by Opera) and PalmPay — two fledgling startups with plans to scale first in West Africa and then the broader continent.

Over the next several years, expect to see market events — such as fails, acquisitions, or IPOs — determine how well funded fintech startups, including Chipper Cash, fare in Africa’s fintech arena.

Danggeun Market, the South Korean secondhand marketplace app, raises $33 million Series C

By Catherine Shu

Danggeun Market, the startup behind Karrot, South Korea’s largest neighborhood marketplace and networking app, announced today that that it has raised a $33 million Series C. The round was led by Goodwater Capital and Altos Ventures.

The funding brings Danggeun Market’s total raised so far to $40.5 million. Its list of investors also include Kakao Ventures, Strong Ventures, SoftBank Ventures and Capstone Partners. Danggeun Market, which launched Karrot in the United Kingdom last November, will use part of the funding to expand into more international markets and increase its monetization tools.

One of Karrot’s most unique features is that its peer-to-peer marketplace only shows people listings from sellers located within a 6-kilometer radius (the distance is set slightly wider for more remote areas), and most transactions are completed in person. As a safety measure, all user identities are verified through their mobile numbers and location.

In a call with TechCrunch, Danggeun Market co-founder and co-CEO Gary Kim and vice president Chris Heo said Karrot’s model works because of the high population density in many South Korean cities. As the app launches overseas, the company will focus on other densely populated areas, especially ones that don’t already have a dominant neighborhood marketplace app.

Danggeun Market planned to enter three new countries this year, but slowed down the pace of its expansion because of the COVID-19 pandemic. Instead, it will focus on enhancing its community features in South Korea, with the goal of launching in at least one new country by the end of this year.

Danggeun Market was founded in 2015 by Gary Kim and Paul Kim, both of whom previously worked at KakaoTalk, South Korea’s largest messaging app. Before Danggeun Market launched, the most popular online secondhand marketplace in South Korea was website Joonggonara, but it didn’t have a mobile app.

Being designed for smartphones helps Karrot differentiate from other peer-to-peer marketplaces. For example, its distance limits make listings easier to spot, and also encourages interactions among neighbors. Its approach to neighborhood networking is also the foundation of the company’s monetization model. Instead of charging listing fees, the app is free to use, and the company makes money through hyperlocalized advertising.

Danggeun Market says its monthly active users have grown 130% year-over-year, reaching seven million in April and making Karrot the second-largest shopping app in South Korea after Coupang, the country’s largest e-commerce platform. Users spend an average of 20 minutes per day on the app, and gross merchandise value increased by 250% year-over-year, despite the COVID-19 pandemic.

Heo said the number of listings on the app actually grew from 4.4 million in January to 8.4 million in April, as more people spent time at home and found things they wanted to get rid of, and also preferred to remain within their neighborhoods. Danggeun Market’s community features also saw a jump in the number of postings made.

Heo said face-to-face transactions continued, because many South Koreans were already used to wearing masks and other safety measures that were ramped up during the pandemic. The company added a new feature called Karrot Help, with tools to help match people with neighbors who needed help running errands and a mask inventory checker for nearby pharmacies, and implemented tools to automatically control the price of mask listings and prevent profiteering.

Automattic pumps $4.6M into New Vector to help grow Matrix, an open, decentralized comms ecosystem

By Natasha Lomas

Automattic, the open source force behind WordPress .com, WooCommerce, Longreads, Simplenote and Tumblr, has made a $4.6M strategic investment into New Vector — the creators of an open, decentralized communications standard called Matrix. They also develop a Slack rival (Riot) which runs on Matrix.

The investment by Automattic, which is at a higher valuation than the last tranche New Vector took in, extends an $8.5M Series A last year, from enterprise tech specialists Notion Capital and Dawn Capital plus European seed fund Firstminute Capital — and brings the total raised to date to $18.1M. (Which includes an earlier $5M in strategic investment from an Ethereum-based secure chat and crypto wallet app, Status).

New Vector’s decentralized tech powers instant messaging for a number of government users, including France — which forked Riot to launch a messaging app last year (Tchap) — and Germany, which just announced its armed forces will be adopting Matrix as the backbone for all internal comms; as well as for the likes of KDR, Mozilla, RedHat and Wikimedia, to name a few.

Getting Automattic on board is clearly a major strategic boost for Matrix — one that’s allowing New Vector to dream big.

“It’s very much a step forwards,” New Vector CEO and CTO and Matrix co-founder, Matthew Hodgson, tells TechCrunch. “We’re hopefully going to get the support from Automattic for really expanding the ecosystem, bringing Matrix functionality into WordPress — and all the various WordPress plugins that Automattic does. And likewise open up Matrix to all of those users too.”

A blog post announcing the strategic investment dangles the intriguing possibility of a decentralized Tumblr — or all WordPress sites automatically getting their own Matrix chatroom.

“This is huge news, not least because WordPress literally runs over 36% of the websites on today’s web – and the potential of bringing Matrix to all those users is incredible,” New Vector writes in the blog post. “Imagine if every WP site automatically came with its own Matrix room or community?  Imagine if all content in WP automatically was published into Matrix as well as the Web?… Imagine there was an excellent Matrix client available as a WordPress plugin for embedding realtime chat into your site?”

Those possibilities remain intriguing ideas for now. But as well as ploughing funding into New vector Automattic is opening up a job for a Matrix.org/WordPress integrations engineer — so the Matrix team has another tangible reason to be excited about future integrations.

“One of the best and the biggest open source guys really believes in what we’re doing and is interested in trying to open up the worlds of WordPress into the decentralized world of Matrix,” adds Hodgson. “In some ways it’s reassuring that a relatively established company like Automattic is keeping its eye on the horizon and putting their chips on the decentralized future. Whereas they could be ‘doing a Facebook’ and just sitting around and keeping everything centralized and as locked down as possible.”

“It’s a bit of a validation,” says Matrix co-founder and New Vector head of ops and products, Amandine le Pape. “The same way getting funding from VCs was validation of the fact it’s a viable business. Here it’s a validation it’s actually a mainstream open source project which can really grow.”

New Vector co-founders, Matthew Hodgson and Amandine le Pape

While the strategic investment offer from Automattic was obviously just a great opportunity to be seized by New vector, given ideological alignment and integration potential, it also comes at helpful time, per le Pape, given they’ve been growing their SaaS business.

“The business model that we’re looking at with New Vector to go and drive — both to fund Matrix and also to keep the lights on and grow the projects and the company — is very, very similar to what Automattic have successfully done with WordPress.com,” adds Hodgson. “So being able to compare notes directly with their board and our board to go and say to them how do you make this work between the WordPress.org and the WordPress.com split should be a really useful tool for us.”

While Matrix users can choose to host their own servers there’s obviously a high degree of complexity (and potential expense) involved in doing so. Hence New Vector’s business model is to offer a paid Matrix hosting service, called Modular, where it takes care of the complexity of hosting for a fee. (Marketing copy on the Modular website urges potential customers to: “Sign up and deploy your own secure chat service in seconds!”)

“Some of our highest profile customers like Mozilla could go and run it themselves, obviously. Mozilla know tech. But in practice it’s a lot easier and a lot cheaper overall for them to just go and get us to run it,” adds Hodgson. “The nice thing is that they have complete self sovereignty over their data. It’s their DNS. We give them access to the database. They could move off at any time… switch hosting provider or run it themselves. [Users] typically start off with us as a way to get up and running.”

Talking of moving, Hodgson says he expects Automattic to move over from Slack to Riot following this investment.

“I am very excited about what New Vector is doing with Matrix — creating a robust, secure, open protocol that can bring all flavors of instant messaging and collaboration together, in the way that the web or email has its foundation layer,” added Automattic founder, Matt Mullenweg, in a supporting statement. “I share New Vector’s passion for open source and the power of open standards. I’m excited to see how Automattic and New Vector can collaborate on our shared vision in the future.” 

Mullenweg was already a supporter of Matrix, chipping into its seed via Patreon back in 2017. At the time the team was transitioning from being incubated and wholly financed by Amdocs, a telco supplier where New Vectors’ co-founders used to work (running its unified comms division), to spinning out and casting around for new sources of funding to continue development of their decentralized standard.

Some three years on — now with another multi-million dollar tranche of funding in the bank — Hodgson says New Vector is able to contemplate the prospect of profitability ahead, with ~16.8 million users and 45,000 deployments at this point (up from 11M and 40k back in October).

“I think there’s also a high chance — touch wood — that this injection gives us a path straight through to profitability if needed,” he tells us. “Given the macroeconomic uncertainty thanks to the [COVID-19] pandemic, the opportunity to say we have this amount of cash in the bank, assuming our customers follow roughly the trajectory that we’d seen so far… this would be a way to get out the other side without having to depend on any further funding.

“If things are on track we probably would do additional funding next year in order to double down on the success. But right now this at least gives us a pretty chunky safety net.”

The coronavirus crisis has been accelerating interest in Matrix “significantly”, per Hodgson, as entities that might have been contemplating a switch to decentralized comms down the line feel far greater imperative to take control of their data — now that so many users are logging on from home.

“As lockdowns began we saw sign ups increase by a factor of about 10,” he says. “It’s tapered off a little bit but it was a real scaling drama overnight. We had to launch an entirely new set of videoconferencing deployments on Jitsi’s offering, as well as scaling up the hardware for the service which we run by several times over.

“We’re also seeing retention go up, which was nice. We assumed there would be a huge spike of users desperately trying to find a home and then they wouldn’t necessarily stick around. In practice they’ve stuck around more than the existing user base which is reassuring.”

In some cases, New Vector has seen customers radically shrink planned deployment timescales — from months to a matter of days.

“We literally had one [educational] outfit in German reach out and say that tender in September — we want you to go live on Monday,” says Hodgson, noting that in this instance the customer skipped the entire tendering process because of they felt they needed a secure system school kids could use. (And privacy concerns ruling out use of centralized options such as Zoom or Microsoft Teams.)

“The biggest impact from a New Vector perspective at least has been that a lot of our slower moving, bigger opportunities — particularly in the public sector with governments — have suddenly sped up massively,” he adds. “Because it was previously a nice to have premium thing — ‘wouldn’t it be good if we had our own encrypted messenger and if everybody wasn’t using Telegram or WhatsApp to run our country’ — and then suddenly, with the entire population of whichever country it might be suddenly having to work remotely it’s become an existential requirement to have high quality communication, and having that encrypted and self sovereign is a massive deal.”

In terms of competing with Slack (et al), the biggest consideration is usability and UX, according to Hodgson.

So, over the last year, New Vector has hired a dedicated in-house design team to focus on smoothing any overly geeky edges — though most of this work is yet to be pushed out to users.

“We’ve actually pivoted the entire development of Riot to be design led,” he says. “It’s no longer a whole bunch of developers, like myself, going and hacking away on it — instead the product owner and the product direction’s being laid by the design team. And it is an unrecognizable difference — in terms of focus and usability.

“Over the coming year we are expecting Riot to basically be rebuilt at least cosmetically to get rid of the complexity and the geekiness and the IRC hangovers which we have today in favor of something that can genuinely punch its weight against Slack and Discord.”

In another major recent development New Vector switched on end-to-end encryption across the piece in Riot, making it the default for all new non-public conversations (DMs and private chats).

“It’s the equivalent of email suddenly mandating PGP and managing not to break everything,” says Hodgson of that feat.

A key challenge was to “get parity” with users of the non-encrypted version of Matrix before it could be enabled everywhere — with associated problems to tackle, such as search.

“Typically we were doing search on the server and if the messages are encrypted the server obviously can’t index them — so we had to shift all of our search capabilities to run client side. We went and wrote a whole bunch of REST that allows you to basically embed a search engine into Riot on the client, including on the desktop version, so that people can actually reach their encrypted message history there and share it between devices,” he explains.

Another focus for the e2e was the verification process — which is also now built in by default.

“When you now log into Riot it forces you to scan a QR code on an existing login if you’ve already logged in somewhere. A bit like you do on WhatsApp web but rather than just using it to authenticate you it also goes and proves that you are a legitimate person on that account,” he says. “So everyone else then knows to trust that login completely — so that if there is an attack of some kind, if you admin tries to add a malicious device into your account to spy on you or if there’s a man-in-the-middle attack, or something like that, everybody can see that the untrusted device hasn’t been verified by you.

“It’s basically building out a simple web of trust of your devices and immediate contacts so that you have complete protection against ghost devices or other nastier attempts to go and compromise the account. The combination of using QR codes and also using emoji comparison rather than having to read out numbers to one another is I think almost unique now, in terms of creating really, really super robust end-to-end encryption.”

The e2e encryption Matrix uses is based on algorithms popularized by the Signal protocol. It was audited by NCC Group in 2016 but plans for the new funding include a full stack audit — once they’ve ironed out any teething issues with the new default e2e.

“[We want to] at least pick a path, a particular set of clients and servers — because we can’t do the whole thing, obviously, because Matrix has got 60-70 different apps on it now, or different clients. And there are at least four viable server implementations but we will pick the long term supported official path and at least find a set which we can then audit and recommend to governments,” says Hodgson of the audit plans.

They’re also working with Jitsi on a project to make the latter’s WebRTC-compatible videoconferencing platform e2e encrypted too — another key piece as Jitsi’s tech is what New Vector offers for video calling via Matrix.

“We partner with Jitsi for the videoconferencing side of things and we’re working with them on their e2e encrypted videoconferencing… They [recently] got the world’s first WebRTC -based e2e encrypted conferencing going. And they plan to use Matrix as the way to exchange the keys for that — using also all of the verification process [New Vector has developed for Riot]. Because end-to-end encryption’s great, obviously in terms of securing the data — but if you don’t know who you’re talking to, in terms of verifying their identity, it’s a complete waste of time,” adds Hodgson.

So when Jitsi’s e2e encryption launches New Vector will be able to include e2e encrypted videoconferencing as part of its decentralized bundle too.

How much growth is New Vector expecting for Matrix over the next 12 months? “We’ve tripled almost all of the sizing metrics for the network in the last year, and I think we tripled the year before that so I’m hoping that we can continue on that trajectory,” he says on that.

Another “fun thing” New Vector has been working on, since the end of last year, is a peer-to-peer version of Matrix — having developed a “sufficiently lightweight server implementation” that allows Matrix users to run ‘riot’ in a decentralized p2p space via a web browser (or via the app on a mobile device).

“We turned on the peer-to-peer network about a month ago now and they’re at the point right now of making it persistent — previously if all of the clients on the network went away then the entire network disappeared, whereas now it has the ability to persist even if people start restarting their browsers and apps. And it’s very much a mad science project but as far as I know nobody else is remotely in that ballpark,” he says.

“The nice thing is it looks and feels identical to Matrix today. You can use all of the clients, all of the bridges that people have already written… It just happens to be that the Riot is connecting to a server wedged into itself rather than talking to one sitting on the server… So it’s a total paradigm shift.”

“We weren’t sure it was going to work at all but in practice it’s working better than we could have hoped,” he adds. “Over the next year or so we’re going to expect to see more and more emphasis on peer-to-peer — possibly even by default. So that if you install Riot you don’t have to pick a server and go through this fairly clunky thing of figuring out what service provider to trust and do you want to buy one from us as New Vector or do you want to a Swiss ISP. Instead you can start off bobbing around the ocean in a pure peer-to-peer land, and then if you want to persist your data somewhere then you go and find a server to pin yourself to a home on the Internet. But it would be a completely different way of thinking about things.”

Those interested in dipping a toe in p2p decentralized IM can check out this flavor of Riot in a web browser via p2p.riot.im

Germany ditches centralized approach to app for COVID-19 contacts tracing

By Natasha Lomas

Germany has U-turned on building a centralized COVID-19 contacts tracing app — and will instead adopt a decentralized architecture, Reuters reported Sunday, citing a joint statement by chancellery minister Helge Braun and health minister Jens Spahn.

In Europe in recent weeks, a battle has raged between different groups backing centralized vs decentralized infrastructure for apps being fast-tracked by governments which will use Bluetooth-based smartphone proximity as a proxy for infection risk — in the hopes of supporting the public health response to the coronavirus by automating some contacts tracing.

Centralized approaches that have been proposed in the region would see pseudonymized proximity data stored and processed on a server controlled by a national authority, such as a healthcare service. However concerns have been raised about allowing authorities to scoop up citizens’ social graph, with privacy experts warning of the risk of function creep and even state surveillance.

Decentralized contacts tracing infrastructure, by contrast, means ephemeral IDs are stored locally on device — and only uploaded with a user’s permission after a confirmed COVID-19 diagnosis. A relay server is used to broadcast infected IDs — enabling devices to locally compute if there’s a risk that requires notification. So social graph data is not centralized.

The change of tack by the German government marks a major blow to a homegrown standardization effort, called PEPP-PT, that had been aggressively backing centralization — while claiming to ‘preserve privacy’ on account of not tracking location data. It quickly scrambled to propose a centralized architecture for tracking coronavirus contacts, led by Germany’s Fraunhofer Institute, and claiming the German government as a major early backer, despite PEPP-PT later saying it would support decentralized protocols too.

As we reported earlier, the effort faced strident criticism from European privacy experts — including a group of academics developing a decentralized protocol called DP-3T — who argue p2p architecture is truly privacy preserving. Concerns were also raised about a lack of transparency around who is behind PEPP-PT and the protocols they claimed to support, with no code published for review.

The European Commission, meanwhile, also recommended the use of decentralization technologies to help boost trust in such apps in order to encourage wider adoption.

EU parliamentarians have also warned regional governments against trying to centralize proximity data during the coronavirus crisis.

But it was Apple and Google jumping into the fray earlier this month by announcing joint support for decentralized contacts tracing that was the bigger blow — with no prospect of platform-level technical restrictions being lifted. iOS limits background access to Bluetooth for privacy and security reasons, so national apps that do not meet this decentralized standard won’t benefit from API support — and will likely be far less usable, draining battery and functioning only if actively running.

Nonetheless PEPP-PT told journalists just over a week ago that it was engaged in fruitful discussions with Apple and Google about making changes to their approach to accommodate centralized protocols.

Notably, the tech giants never confirmed that claim. They have only since doubled down on the principle of decentralization for the cross-platform API for public health apps — and system-wide contacts tracing which is due to launch next month.

At the time of writing PEPP-PT’s spokesman, Hans-Christian Boos, had not responded to a request for comment on the German government withdrawing support.

Boos previously claimed PEPP-PT had around 40 governments lining up to join the standard. However in recent days the momentum in Europe has been going in the other direction. A number of academic institutions that had initially backed PEPP-PT have also withdrawn support.

In a statement emailed to TechCrunch, the DP-3T project welcomed Germany’s U-turn.

“DP-3T is very happy to see that Germany is adopting a decentralized approach to contact tracing and we look forward to its next steps implementing such a technique in a privacy preserving manner,” the group told us.

Berlin’s withdrawal leaves France and the UK the two main regional backers of centralized apps for coronavirus contacts tracing. And while the German U-turn is certainly a hammer blow for the centralized camp in Europe the French government appears solid in its support — at least for now.

France has been developing a centralized coronavirus contacts tracing protocol, called ROBERT, working with Germany’s Fraunhofer Institute and others.

In an opinion issued Sunday, France’s data protection watchdog, the CNIL, did not take active issue with centralizing pseudonymized proximity IDs — saying EU law does not in principle forbid such a system — although the watchdog emphasized the need to minimize the risk of individuals being re-identified.

It’s notable that France’s digital minister, Cédric O, has been applying high profile public pressure to Apple over Bluetooth restrictions — telling Bloomberg last week that Apple’s policy is a blocker to the virus tracker.

Yesterday O was also tweeting to defend the utility of the planned ‘Stop Covid’ app.

« Oui l'application #StopCovid est utile ». Volontaire, anonyme, transparente et temporaire, elle apporte les garanties de protection des libertés individuelles. À la disposition des acteurs sanitaires, elle les aidera dans la lutte contre le #COVID19 https://t.co/12xYG5Z8ZC

— Cédric O (@cedric_o) April 26, 2020

We reached out to France’s digital ministry for comment on Germany’s decision to switch to a decentralized approach but at the time of writing the department had not responded.

In a press release today the government highlights the CNIL view that its approach is compliant with data protection rules, and commits to publishing a data protection impact assessment ahead of launching the app.

If France presses ahead it’s not clear how the country will avoid its app being ignored or abandoned by smartphone users who find it irritating to use. (Although it’s worth noting that Google’s Android platform has a substantial marketshare in the market, with circa 80% vs 20% for iOS, per Kantar.)

A debate in the French parliament tomorrow is due to include discussion of contacts tracing apps.

We’ve also reached out to the UK’s NHSX — which has been developing a COVID-19 contacts tracing app for the UK market — and will update this report with any response.

In a blog post Friday the UK public healthcare unit’s digital transformation division said it’s “working with Apple and Google on their welcome support for tracing apps around the world”, a PR line that entirely sidesteps the controversy around centralized vs decentralized app infrastructures.

The UK has previously been reported to be planning to centralize proximity data — raising questions about the efficacy of its planned app too, given iOS restrictions on background access to Bluetooth.

“As part of our commitment to transparency, we will be publishing the key security and privacy designs alongside the source code so privacy experts can ‘look under the bonnet’ and help us ensure the security is absolutely world class,” the NHSX’s Matthew Gould and Dr Geraint Lewis added in the statement.

Leverice is a team messenger app that’s taking aim at information overload

By Natasha Lomas

Meet Leverice: A team messenger and collaboration platform that’s aiming to compete with b2b giants like Slack by tackling an issue that continues to plague real-time messaging — namely, ‘always-on’ information overload. This means these tools can feel like they’re eating into productivity as much as aiding it. Or else leave users stressed and overwhelmed about how to stay on top of the work comms firehose. 

Leverice’s pitch is that it’s been built from the ground up to offer a better triage structure so vital bits of info aren’t lost in rushing rivers of chatter than flow across less structured chat platforms.

It does this by giving users the ability to organize chat content into nested subchannels. So its theory is that hyper structured topic channels will let users better direct and navigate info flow, freeing them from the need to check everything or perform lots of searches in order to find key intel. Instead they can just directly drill down to specific subchannels, tuning out the noise.

The overarching aim is to bring a little asynchronicity to the world of real-time collaboration platforms, per co-founder and COO Daniel Velton.

“Most messaging and collaboration tools are designed for and built around synchronous communications, instant back-and-forth. But most members of remote teams communicate at their own pace — and there was no go-to messaging tool built around asynchronous communications,” he tells TechCrunch.

“We set out to solve that problem, to build a messenger and collaboration platform that breaks rivers down into rivulets. To do that, we needed a tech stack and unique architecture that would allow teams to efficiently work with hundreds of channels and subchannels distributed between scores of channel branches of varying depths. Having that granularity ensures that each little shelf maintains topical integrity.

“We’re not discussing Feature 2.1.1 and 2.1.2 and 2.1.3 and 2.1.4 inside a single ‘Features’ channel, where the discussions would blend together. Each has its own little home.”

Of course Slack isn’t blind to the info-overload issues its platform can generate. Last month it announced “a simpler, more organized Slack”, which includes the ability for users to organize channels, messages and apps into “custom, collapsible sections”. Aka folders.

So how is Leverice’s subchannel architecture a great leap forward on the latest version of Slack — which does let users organize themselves (and is now in the process of being rolled out across its user-base)?

“All structuring (including folders) on other popular messengers is essentially an individual preference setting,” says Velton. “It does not reflect on a teamwide channel tree. It’s definitely a step in the right direction but it’s about each user adding a tiny bit of structure to their own private interface, not having a structure that affects and improves the way an entire team communicates.

“Leverice architecture is based on structuring of channels and subchannels into branches of unlimited depth. This kind of deep structuring is not something you can simply ‘overlay’ on top of an existing messenger that was designed around a single layer of channels. A tremendous number of issues arise when you work with a directory-like structure of infinite depth, and these aren’t easily solved or addressed unless the architecture is built around it.”

“Sure, in Leverice you can build the ‘6-lane autobahns’,” he adds, using an analogy of vehicle traffic on roads to illustrate the concept of a hierarchy of topic channels. “But we are the only messenger where you can also construct a structured network of ‘country roads’. It’s more ‘places’ but each ‘place’ is so narrow and topical that working through it all becomes more manageable, quick and pleasant, and it’s something you can do at your own pace without fear of missing important kernels of information as they fly by on the autobahn.”

To be clear, while Slack has now started letting users self-organize — by creating a visual channel hierarchy that suits them — Leverice’s structure means the same structured tree of channels/subchannels applies for the whole team.

“At the end of the day, for communications to work, somebody on a team needs to be organized,” argues Velton. “What we allow is structuring that affects the channel tree for an entire team, not just an individual preference that reflects only on a user’s local device.”

Leverice has other features in the pipeline which it reckons will further help users cut through the noise — with a plan to apply AI-powered prioritization to surface the most pressing inbound comms.

There will also be automated alerts for conversation forks when new subchannels are created. (Though generating lots of subchannel alerts doesn’t sound exactly noise-free…)

“We have features coming that alert users to forks in a conversation and nudge the user toward those new subchannels. At this stage those forks are created manually, although our upcoming AI module will have nudges based on those forks,” says Velton.

“The architecture (deep structuring) also opens the door to scripting of automated workflows and open source plug-ins,” he adds.

Leverice officially launched towards the end of February after a month-long beta which coincided with the coronavirus-induced spike in remote work.

At this stage they have “members of almost 400 teams” registered on the platform, per Velton, with initial traction coming from mid-size tech companies — who he says are either unhappy with the costs of their current messaging platform or with distraction/burnout caused by “channel fatigue”; or who are facing info fragmentation as internal teams are using different p2p/messaging tools and lack a universal choice.

“We have nothing but love and respect for our competitors,” he adds. “Slack, Teams, WhatsApp, Telegram, Skype, Viber, etc.: each have their own benefits and many teams are perfectly content to use them. Our product is for teams looking for more focus and structure than existing solutions offer. Leverice’s architecture is unique on the market, and it opens the door to powerful features that are neither technically nor practically feasible in a messenger with a single layer containing a dozen or two dozen channels.”

Other differentiating features he highlights as bringing something fresh to the team messaging platform conversation are a whiteboard feature that lets users collaborate in the app for brainstorming or listing ideas, prorities; and a Jira integration for managing and discussing tasks in the project- and issue-tracking tool. The team is planning further integrations including with Zoom, Google Docs and “other services you use most”.

The startup — which was founded by CEO Rodion Zhitomirsky in Minsk but is now headquartered in San Jose, California, also with offices in Munich, Germany — has been bootstrapping development for around two years, taking in angel investment of around $600,000.

“We are three friends who managed complex project-based teams and personally felt the pains of all the popular messengers out there,” says Velton, discussing how they came to set up the business. “We used all the usual suspects, and even tried using p2p messengers as substitutes. They all led us and our teams to the same place: we couldn’t track large amounts of communications unless we were in “always-on” mode. We knew there had to be a better way, so we set out to build Leverice.”

The third co-founder is Dennis Dokutchitz.

Leverice’s business model is freemium, with a free tier, a premium tier, and a custom enterprise tier. As well as offering the platform as SaaS via the cloud, they do on-premise installations — for what Velton describes as “the highest level of security and privacy”.

On the security front the product is not end-to-end encrypted but he says the team is developing e2e encrypted channels to supplement the client-server encryption it applies as standard.

Velton notes these forthcoming channels would not support the usual search features, while AI analysis would be limited to “meta-information analysis”, i.e. excluding posts’ content.

“We don’t process customer or message data for commercial purposes, only for internal analytics and features to improve the product for users,” he adds when asked about any additional uses made of customer data. (Leverice’s Privacy Policy can be found here.)

With remote work the new order of the day across most of the globe because of the COVID-19 pandemic, it seems likely there will be a new influx of collaboration tools being unboxed to help home workers navigate a new ‘professionally distant’ normal.

“We’ve only been on the market for 6 weeks and have no meaningful revenue to speak of as of yet,” adds Velton.

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