FreshRSS

🔒
❌ About FreshRSS
There are new available articles, click to refresh the page.
Before yesterdayYour RSS feeds

Customer experience startup Clootrack raises $4M, helps brands see through their customers’ eyes

By Christine Hall

Getting inside the mind of customers is a challenge as behaviors and demands shift, but Clootrack believes it has cracked the code in helping brands figure out how to do that.

It announced $4 million in Series A funding, led by Inventus Capital India, and included existing investors Unicorn India Ventures, IAN Fund and Salamander Excubator Angel Fund, as well as individual investment from Jiffy.ai CEO Babu Sivadasan. In total, the company raised $4.6 million, co-founder Shameel Abdulla told TechCrunch.

Clootrack is a real-time customer experience analytics platform that helps brands understand why customers stay or churn. Shameel Abdulla and Subbakrishna Rao, who both come from IT backgrounds, founded the company in 2017 after meeting years prior at Jiffstore, Abdulla’s second company that was acquired in 2015.

Clootrack team. Image Credits: Clootrack

Business-to-consumer and consumer brands often use customer satisfaction metrics like Net Promoter Score to understand the customer experience, but Abdulla said current methods don’t provide the “why” of those experiences and are slow, expensive and error-prone.

“The number of channels has increased, which means customers are talking to you, expressing their feedback and what they think in multiple places,” he added. “Word of mouth has gone digital, and you basically have to master the art of selling online.”

Clootrack turns the customer experience data from all of those first-party and third-party touchpoints — website feedback, chat bots, etc. — into granular, qualitative insights that give brands a look at drivers of the experience in hours rather than months so that they can stay on top of fast-moving trends.

Abdulla points to data that show a customer’s biggest driver of brand switch is the experience they receive. And, that if brands can reduce churns by 5%, they could be looking at an increase in profits of between 25% and 95%.

Most of the new funding will go to product development so that all data aggregations are gathered from all possible touchpoints. His ultimate goal is to be “the single platform for B2C firms.”

The company is currently working with over 150 customers in the areas of retail, direct-to-consumer, banking, automotive, travel and mobile app-based services. It is growing nine times year over year in revenue. It is mainly operating in India, but Clootrack is also onboarding companies in the U.S. and Europe.

Parag Dhol, managing director of Inventus, said he has known Abdulla for over five years. He had looked at one of Abdulla’s companies for investment, but had decided against it due to his firm being a Series A investor.

Dhol said market research needs an overhaul in India, where this type of technology is lagging behind the U.S.

“Clootrack has a very complementary team with Shameel being a complete CEO in terms of being a sales guy and serial entrepreneur who has learned his lessons, and Subbu, who is good at technology,” he added. “As CMOs realize the value in their unstructured data inside of their own database of the customer reviews and move to real-time feedback, these guys could make a serious dent in the space.”

 

UK now expects compliance with children’s privacy design code

By Natasha Lomas

In the UK, a 12-month grace period for compliance with a design code aimed at protecting children online expires today — meaning app makers offering digital services in the market which are “likely” to be accessed by children (defined in this context as users under 18 years old) are expected to comply with a set of standards intended to safeguard kids from being tracked and profiled.

The age appropriate design code came into force on September 2 last year however the UK’s data protection watchdog, the ICO, allowed the maximum grace period for hitting compliance to give organizations time to adapt their services.

But from today it expects the standards of the code to be met.

Services where the code applies can include connected toys and games and edtech but also online retail and for-profit online services such as social media and video sharing platforms which have a strong pull for minors.

Among the code’s stipulations are that a level of ‘high privacy’ should be applied to settings by default if the user is (or is suspected to be) a child — including specific provisions that geolocation and profiling should be off by default (unless there’s a compelling justification for such privacy hostile defaults).

The code also instructs app makers to provide parental controls while also providing the child with age-appropriate information about such tools — warning against parental tracking tools that could be used to silently/invisibly monitor a child without them being made aware of the active tracking.

Another standard takes aim at dark pattern design — with a warning to app makers against using “nudge techniques” to push children to provide “unnecessary personal data or weaken or turn off their privacy protections”.

The full code contains 15 standards but is not itself baked into legislation — rather it’s a set of design recommendations the ICO wants app makers to follow.

The regulatory stick to make them do so is that the watchdog is explicitly linking compliance with its children’s privacy standards to passing muster with wider data protection requirements that are baked into UK law.

The risk for apps that ignore the standards is thus that they draw the attention of the watchdog — either through a complaint or proactive investigation — with the potential of a wider ICO audit delving into their whole approach to privacy and data protection.

“We will monitor conformance to this code through a series of proactive audits, will consider complaints, and take appropriate action to enforce the underlying data protection standards, subject to applicable law and in line with our Regulatory Action Policy,” the ICO writes in guidance on its website. “To ensure proportionate and effective regulation we will target our most significant powers, focusing on organisations and individuals suspected of repeated or wilful misconduct or serious failure to comply with the law.”

It goes on to warn it would view a lack of compliance with the kids’ privacy code as a potential black mark against (enforceable) UK data protection laws, adding: “If you do not follow this code, you may find it difficult to demonstrate that your processing is fair and complies with the GDPR [General Data Protection Regulation] or PECR [Privacy and Electronics Communications Regulation].”

Tn a blog post last week, Stephen Bonner, the ICO’s executive director of regulatory futures and innovation, also warned app makers: “We will be proactive in requiring social media platforms, video and music streaming sites and the gaming industry to tell us how their services are designed in line with the code. We will identify areas where we may need to provide support or, should the circumstances require, we have powers to investigate or audit organisations.”

“We have identified that currently, some of the biggest risks come from social media platforms, video and music streaming sites and video gaming platforms,” he went on. “In these sectors, children’s personal data is being used and shared, to bombard them with content and personalised service features. This may include inappropriate adverts; unsolicited messages and friend requests; and privacy-eroding nudges urging children to stay online. We’re concerned with a number of harms that could be created as a consequence of this data use, which are physical, emotional and psychological and financial.”

“Children’s rights must be respected and we expect organisations to prove that children’s best interests are a primary concern. The code gives clarity on how organisations can use children’s data in line with the law, and we want to see organisations committed to protecting children through the development of designs and services in accordance with the code,” Bonner added.

The ICO’s enforcement powers — at least on paper — are fairly extensive, with GDPR, for example, giving it the ability to fine infringers up to £17.5M or 4% of their annual worldwide turnover, whichever is higher.

The watchdog can also issue orders banning data processing or otherwise requiring changes to services it deems non-compliant. So apps that chose to flout the children’s design code risk setting themselves up for regulatory bumps or worse.

In recent months there have been signs some major platforms have been paying mind to the ICO’s compliance deadline — with Instagram, YouTube and TikTok all announcing changes to how they handle minors’ data and account settings ahead of the September 2 date.

In July, Instagram said it would default teens to private accounts — doing so for under 18s in certain countries which the platform confirmed to us includes the UK — among a number of other child-safety focused tweaks. Then in August, Google announced similar changes for accounts on its video charing platform, YouTube.

A few days later TikTok also said it would add more privacy protections for teens. Though it had also made earlier changes limiting privacy defaults for under 18s.

Apple also recently got itself into hot water with the digital rights community following the announcement of child safety-focused features — including a child sexual abuse material (CSAM) detection tool which scans photo uploads to iCloud; and an opt in parental safety feature that lets iCloud Family account users turn on alerts related to the viewing of explicit images by minors using its Messages app.

The unifying theme underpinning all these mainstream platform product tweaks is clearly ‘child protection’.

And while there’s been growing attention in the US to online child safety and the nefarious ways in which some apps exploit kids’ data — as well as a number of open probes in Europe (such as this Commission investigation of TikTok, acting on complaints) — the UK may be having an outsized impact here given its concerted push to pioneer age-focused design standards.

The code also combines with incoming UK legislate which is set to apply a ‘duty of care’ on platforms to take a rboad-brush safety-first stance toward users, also with a big focus on kids (and there it’s also being broadly targeted to cover all children; rather than just applying to kids under 13s as with the US’ COPPA, for example).

In the blog post ahead of the compliance deadline expiring, the ICO’s Bonner sought to take credit for what he described as “significant changes” made in recent months by platforms like Facebook, Google, Instagram and TikTok, writing: “As the first-of-its kind, it’s also having an influence globally. Members of the US Senate and Congress have called on major US tech and gaming companies to voluntarily adopt the standards in the ICO’s code for children in America.”

“The Data Protection Commission in Ireland is preparing to introduce the Children’s Fundamentals to protect children online, which links closely to the code and follows similar core principles,” he also noted.

And there are other examples in the EU: France’s data watchdog, the CNIL, looks to have been inspired by the ICO’s approach — issuing its own set of right child-protection focused recommendations this June (which also, for example, encourage app makers to add parental controls with the clear caveat that such tools must “respect the child’s privacy and best interests”).

The UK’s focus on online child safety is not just making waves overseas but sparking growth in a domestic compliance services industry.

Last month, for example, the ICO announced the first clutch of GDPR certification scheme criteria — including two schemes which focus on the age appropriate design code. Expect plenty more.

Bonner’s blog post also notes that the watchdog will formally set out its position on age assurance this autumn — so it will be providing further steerage to organizations which are in scope of the code on how to tackle that tricky piece, although it’s still not clear how hard a requirement the ICO will support, with Bonner suggesting it could be actually “verifying ages or age estimation”. Watch that space. Whatever the recommendations are, age assurance services are set to spring up with compliance-focused sales pitches.

Children’s safety online has been a huge focus for UK policymakers in recent years, although the wider (and long in train) Online Safety (neé Harms) Bill remains at the draft law stage.

An earlier attempt by UK lawmakers to bring in mandatory age checks to prevent kids from accessing adult content websites — dating back to 2017’s Digital Economy Act — was dropped in 2019 after widespread criticism that it would be both unworkable and a massive privacy risk for adult users of porn.

But the government did not drop its determination to find a way to regulate online services in the name of child safety. And online age verification checks look set to be — if not a blanket, hardened requirement for all digital services — increasingly brought in by the backdoor, through a sort of ‘recommended feature’ creep (as the ORG has warned). 

The current recommendation in the age appropriate design code is that app makers “take a risk-based approach to recognising the age of individual users and ensure you effectively apply the standards in this code to child users”, suggesting they: “Either establish age with a level of certainty that is appropriate to the risks to the rights and freedoms of children that arise from your data processing, or apply the standards in this code to all your users instead.” 

At the same time, the government’s broader push on online safety risks conflicting with some of the laudable aims of the ICO’s non-legally binding children’s privacy design code.

For instance, while the code includes the (welcome) suggestion that digital services gather as little information about children as possible, in an announcement earlier this summer UK lawmakers put out guidance for social media platforms and messaging services — ahead of the planned Online Safety legislation — that recommends they prevent children from being able to use end-to-end encryption.

That’s right; the government’s advice to data-mining platforms — which it suggests will help prepare them for requirements in the incoming legislation — is not to use ‘gold standard’ security and privacy (e2e encryption) for kids.

So the official UK government messaging to app makers appears to be that, in short order, the law will require commercial services to access more of kids’ information, not less — in the name of keeping them ‘safe’. Which is quite a contradiction vs the data minimization push on the design code.

The risk is that a tightening spotlight on kids privacy ends up being fuzzed and complicated by ill-thought through policies that push platforms to monitor kids to demonstrate ‘protection’ from a smorgasbord of online harms — be it adult content or pro-suicide postings, or cyber bullying and CSAM.

The law looks set to encourage platforms to ‘show their workings’ to prove compliance — which risks resulting in ever closer tracking of children’s activity, retention of data — and maybe risk profiling and age verification checks (that could even end up being applied to all users; think sledgehammer to crack a nut). In short, a privacy dystopia.

Such mixed messages and disjointed policymaking seem set to pile increasingly confusing — and even conflicting — requirements on digital services operating in the UK, making tech businesses legally responsible for divining clarity amid the policy mess — with the simultaneous risk of huge fines if they get the balance wrong.

Complying with the ICO’s design standards may therefore actually be the easy bit.

 

Olsam raises $165M to buy up and scale consumer and B2B Amazon Marketplace sellers

By Ingrid Lunden

On the heels of Heroes announcing a $200 million raise earlier today, to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same is announcing some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, has closed $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.

Apeiron Investment Group — an investment firm started by German entrepreneur Christian Angermayer (known first for biopharmaceuticals, then investing and crypto, including playing a role in SoftBank investing in Wirecard) — led the Series A equity round, with Elevat3 Capital (another Angermayer firm that has a strategic partnership with Founders Fund and Peter Thiel) also participating. North Wall Capital was behind the debt portion of the deal. We have asked and Olsam is only disclosing the full amount raised, not the amount that was raised in equity versus debt. Valuation is also not being disclosed.

Being an Amazon roll-up startup from London that happens to be announcing a fundraise today is not the only thing that Olsam has in common with Heroes. Like Heroes, Olsam is also founded by brothers.

Sam Horbye previously spent years working at Amazon, including building and managing the company’s Business Marketplace (the B2B version of the consumer Marketplace); while co-founder Ollie Horbye had years of experience in strategic consulting and financial services.

Between them, they had also built and sold previous marketplace businesses, and they believe that this collective experience gives Olsam — a portmanteau of their names, “Ollie” and “Sam” — a leg up when it comes to building relationships with merchants; identifying quality products (versus the vast seas of search results that often feel like they are selling the same inexpensive junk as each other); and understanding merchants’ challenges and opportunities, and building relationships with Amazon and understanding how the merchant ecosystem fits into the e-commerce giant’s wider strategy.

Olsam is also taking a slightly different approach when it comes to target companies, by focusing not just on the usual consumer play, but also on merchants selling to businesses. B2B selling is currently one of the fastest-growing segments in Amazon’s Marketplace, and it is also one of the more overlooked by consumers.”It’s flying under the radar,” Ollie said.

“The B2B opportunity is very exciting,” Sam added. “A growing number of merchants are selling office supplies or more random products to the B2B customer.”

Estimates vary when it comes to how many merchants there are selling on Amazon’s Marketplace globally, ranging anywhere from 6 million to nearly 10 million. Altogether those merchants generated $300 million in sales (gross merchandise value), and its growing by 50% each year at the moment.

And consolidating sellers — in order to achieve better economies of scale around supply chains, marketing tools and analytics, and more — is also big business. Olsam estimates that some $7 billion has been spent cumulatively on acquiring these businesses, and there are more out there: Olsam estimates that there are some 3,000 businesses in the UK alone making more than $1 million each in sales on Amazon’s platform.

(And to be clear, there are a number of other roll-up startups beyond Heroes also eyeing up that opportunity. Raising hundreds of millions of dollars in aggregate,  others have made moves this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), HeydayThe Razor GroupBrandedSellerXBerlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.)

“The senior team behind Olsam is what makes this business truly unique,” said Angermayer in a statement. “Having all been successful in building and selling their own brands within the market and having worked for Amazon in their marketplace team – their understanding of this space is exceptional.”

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

By Ingrid Lunden

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

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

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

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

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

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

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

Image Credits: Heroes

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

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

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

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

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

Accounting platform Synder raises $2M to automate e-commerce bookkeeping

By Christine Hall

As Synder’s two co-founders Michael Astreiko and Ilya Kisel wrap up their time at Y Combinator, they also announced their seed round of $2 million from TMT Investments.

Though the round was acquired before going into the accelerator program, the Belarus-based pair wanted to wait to publicly share the milestone. As they focus their sights on their next journey of growth and expansion, the new funding will go toward attracting more clients, visibility and sales.

The company bills itself as an easy accounting platform for e-commerce businesses. It was originally founded as CloudBusiness in 2016 and developed accounting automation and management of business finances for small and mid-size businesses.

Astreiko and Kisel started Synder, in 2018 and a year later focused on the company full-time to develop an easy way for commerce companies to shift to omnichannel sales, something Astreiko told TechCrunch can be “a huge pain” due to the complexity of different payment systems and high fees.

“There are a lot of solutions on the market, but you still have to have special knowledge to operate within accounting or commerce,” Kisel said. “For us, the simplicity means that it is worth it if you can have access in several clicks to consolidated inventory, profits and liabilities. Small businesses sometimes are not sharing this information due to competition, but if something is working and easy, they will definitely share it.”

Synder does the heavy lifting for companies by connecting sales channels like Amazon, Shopify, eBay and Etsy into one platform that users can manage with one-click operations. It also created a way to help the accounting stream so that all of the different payment methods can still be used, Kisel said.

The company is already working with 4,000 clients, and will now be fast-tracking their expansion, but will need the right people on board to help the company grow, Astreiko said.

Igor Shoifot, a partner at TMT Investments, said he will join Synder’s board after the company graduates from YC. He likes the simplicity of what the company is doing.

“Often the best solutions are economical, succinct and elegant — you can be onboarded in 10 minutes,” he added. “There is really nobody that really provides a similar solution that was that easy or didn’t require downloading or installing something. I also like their focus on growth, the fact they have no burn and they are making money.”

Synder’s business model is a subscription SaaS model that starts off as a free trial, and users can purchase additional services inside the platform to fit small and large companies.

Its more than 15 employees are spread around Europe, and the company just started hiring in the areas of marketing and sales in the U.S.

 

Point Pickup acquires e-commerce platform GrocerKey for $42M to allow for same-day delivery

By Rebecca Bellan

Point Pickup Technologies, a last-mile delivery service, has acquired white label e-commerce platform GrocerKey for $42 million, according to the company. With the acquisition, Point Pickup now allows retailers to offer same-day delivery, from purchase to fulfillment to delivery, under their own brand name, rather than under third parties like Instacart.

Instacart made a killing delivering groceries and goods for retailers during the coronavirus pandemic, with a generated revenue of $1.5 billion in 2020 and $35 billion worth of sales. The company has an estimated 9.6 million active users and over 500,000 “shoppers” who pick up and deliver goods. 

New entrants to the same-day delivery space are cropping up, which aligns with the expected growth of the industry to $20.36 billion by 2027, according to Allied Market Research. But companies like Amazon and Instacart that perform this service and host a delivery marketplace get far more than sales revenues – they also get all the customer data. 

Tom Fiorita, founder and CEO of Point Pickup, says retailers should have a right to own that data themselves. The acquisition of GrocerKey, which brings on board the company’s front-end consumer-facing sales engine and predictive analytics, puts the data and brand recognition back in the retailer’s hands. 

“If you are a customer of Instacart, you pay them a subscription, they own your buying habits, your credit cards, your data,” Fiorita told TechCrunch. “Instacart was a big thing during COVID because no one had delivery. So now retailers woke up and said, ‘Oh my god, I can’t just have an Instacart-like marketplace be selling my goods. I don’t know who my customers are, I don’t have their credit cards or data.’ And you know data runs the world now.”

Another recent, if not smaller, entrant to the space is Canadian startup Tyltgo, which operates under a similar model to what Point Pickup is now offering via GrocerKey’s technology. In both cases, the buyer goes directly onto the merchant’s platform and places the order through them, so it feels like they’re interacting with the brand they purchased from. And on Tuesday, Walmart also announced a new white-label delivery service that would allow other merchants to tap into its own delivery platform to get orders to their customers.

Fiorita founded Point Pickup in 2015 as a reaction to Amazon’s increased omnipotence with the noble, if not naive, mission to “save local America.” Walmart and Kroger, two of the largest grocery retailers in the U.S., are Point Pickup’s top customers, alongside other nationwide retailers like Albertsons, Giant Eagle and more. But Fiorita believes the service his company is offering will be even more impactful when it starts to work its way down to the mid-sized and small- to medium-sized businesses. 

“We built this not only to survive against Amazon or Instacart, but because these small businesses need this for their survival,” Fiorita said. “These companies will no longer survive if they continue to allow other companies to sell their merchandise and to own their customer, including the data, the advertising, the CPG dollars and everything.”

Point Pickup offers deliveries of everything from grocery to general merchandise, pharmacy and oversized delivery. It has a network of 350,000 gig economy drivers across 25,000 ZIP codes in all 50 states. 

Since the company’s network of drivers, who often pick and pack the products for the customer as well as deliver the goods, comprises all gig workers with their own vehicles, Point Pickup doesn’t have a clear picture of the percentage of its fleet that’s electric or hybrid. Fiorita speculates it’s probably on par with nationwide rates, if not higher. A recent Pew Research report found that 7% of Americans say they own an EV or hybrid. 

Fiorita said that the type of car drivers own is taken into account during recruitment and that the company is looking for ways to incentivize drivers to buy less polluting vehicles. He also said Point Pickup is a vehicle-agnostic platform, meaning it’s piloting other delivery vessels like drones and autonomous robots.

To compete with the big dogs in the space like Amazon and Walmart, both of which are either testing or already have in place electric delivery vans, Point Pickup will have to also make efforts to beef up its strategy in the carbon emissions space.

D2C specs purveyor Warby Parker files to go public

By Alex Wilhelm

Did you miss IPOs? I sure did. They could be coming back after a summer lull.

Warby Parker, a D2C glasses company backed by over a half-billion dollars of private capital, filed to go public yesterday. For investors like General Catalyst, Tiger Global and Durable Capital Partners, it’s an important debut. Having taken on equity capital since at least 2011, investors have been waiting a long time for Warby to float.


The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


And there’s quite a lot to like about the company, the first parse of its IPO filing reveals. There are some less attractive elements to its business worth discussing, and we need to examine how COVID-19 impacted the company’s 2020 performance.

Warby last raised known private capital in August 2020, a $120 million Series G that valued the company at just over $3 billion on a post-money basis. D1 Capital Partners led that transaction, which included both Durable Capital and Baillie Gifford.

For D2C startups, the Warby IPO is something of a do-over. The Casper IPO from early 2020 is now a cautionary tale for companies employing the business model; the company reduced its IPO range, priced at $12 per share and today trades for just over $5.

But there’s more to Warby Parker’s IPO than just the D2C category. It’s a public benefit corporation, which it says in its filing means that it is “focused on positively impacting all stakeholders” as opposed to merely shareholders. And the company has a charitable bent to its efforts through a foundation and donation model of giving away eyewear when customers purchase their own set. Warby also has a hybrid sales model, leaning on both IRL and digital retail channels. There’s lots to dig into.

So let’s parse Warby’s growth history, its profitability progress over time and how the company is blending IRL shopping with digital channels. We’ll close by examining just how the company was priced last year, taking a guess at what it might be worth in today’s public markets.

Inside Warby Parker’s historical growth

Looking at Warby’s full-year results for 2020 is not inspiring. The company grew well from 2018 to 2019, expanding from $272.9 million in revenue to $370.5 million in revenue, or around 36%. That’s not an astounding pace of growth, but it’s more than respectable for a company of Warby’s age and size.

Then in 2020 the company only managed to eke out 6% growth to $393.7 million in top line. What happened to slow the company’s growth rate from Just Fine to Not Fine At All? COVID, it appears.

Givz raises $3M in seed funding to make donations a marketing tool for businesses

By Mary Ann Azevedo

Givz, which has developed an API-powered platform that gives brands a way to convert discounts into donations, has raised $3 million in seed funding.

Eniac and Accomplice co-led the financing for the New York-based startup. Additional investors include Supernode Ventures, Claude Wasserstein of Fine Day, Phoenix Club and Dylan Whitman.

Givz was founded in 2017 to make charitable giving more accessible and convenient for the masses. In March 2020, right before the COVID-19 pandemic hit, the company pivoted from B2C to B2B and used the technology rails it had built to create the e-commerce marketing platform that Givz is today.

The company aims to drive “full-price purchasing behavior” by giving consumers the ability to convert the money they would be saving if getting a discount, and donating it to their favorite charities. 

Prior to the funding, Givz had been working with more than 80 enterprise, mid-market and SMB retail and e-commerce clients such as H&M, Tom Brady’s TB12, Seedlip and Terez, and accumulated more than 40,000 individual users. Since the shift last year, the company has helped drive more than $1 million to 1,100 charities, according to CEO and founder Andrew Forman.

It just launched on Shopify, which Forman says will give the startup access to the 1.7 million retailers that use Shopify as their e-commerce platform.

Givz operates under the premise that “donation-driven marketing” consistently outperforms discounts and costs less, “making it an attractive addition” to corporate marketing.

“We are creating a new marketing category and generating the largest sustainable charitable giving platform in the process,” he told TechCrunch. 

An example of a company using Givz can be found in Tervis, which offered customers “For every $50 you spend, you’ll receive $15 to give to the charity of your choice.” 

“They used Givz technology to allow consumers to choose the charity of their choice and make a turnkey disbursement to hundreds of charities,” Forman explained. “They saw a 20% lift in website conversion and a 17% increase in average order value as a result of this offer.”

Image Credits: Givz

Currently, Givz has eight employees with plans to more than double that number over the next year.

The company plans to use the new capital toward that hiring, and to do some marketing of its own.

“We also want to explore the full potential around the consumer behavior data we collect,” Forman said.

In the short term, Givz is focused on “Shopify growth” with direct to consumer brands.

“But we have successful use cases and huge potential with enterprise retailers and financial institutions,” Forman told TechCrunch. “In the future, we have our sights set on restaurants, the gaming industry and global expansion. I believe that using personalized donations to incentivize consumer behavior has endless application across industries, verticals and continents.”

Eniac partner Vic Singh said that there’s been a trend of brands experimenting with different ways to target the socially conscious consumer. 

“We believe Givz’s donation-driven marketing platform offers brands the best way to attract the socially conscious consumer while elevating their brand, moving more inventory and driving increased order value rather than simplistic traditional discounting,” he added.

Accomplice’s TJ Mahony said that both he and Singh believed SMS would emerge as a new marketing category, which led to early investments in Attentive and Postscript, respectively.

“We both saw a similar opportunity with Givz,” he wrote via e-mail. “Discounting is a well worn marketing muscle, but it’s detrimental to the brand, margins and customer expectations. We believe continuous impact marketing becomes the alternative to discounting and marketers will begin to build teams and budget around thoughtful and persistent giving strategies.”

Virtual dressing room startup Revery.ai applying computer vision to the fashion industry

By Christine Hall

Figuring out size and cut of clothes through a website can suck the fun out of shopping online, but Revery.ai is developing a tool that leverages computer vision and artificial intelligence to create a better online dressing room experience.

Under the tutelage of University of Illinois Center for Computer Science advisrr David Forsyth, a team consisting of Ph.D. students Kedan Li, Jeffrey Zhang and Min Jin Chong, is creating what they consider to be the first tool using existing catalog images to process at a scale of over a million garments weekly, something previous versions of virtual dressing rooms had difficulty doing, Li told TechCrunch.

Revery.ai co-founders Jeffrey Zhang, Min Jin Chong and Kedan Li. Image Credits: Revery.ai

California-based Revery is part of Y Combinator’s summer 2021 cohort gearing up to complete the program later this month. YC has backed the company with $125,000. Li said the company already has a two-year runway, but wants to raise a $1.5 million seed round to help it grow faster and appear more mature to large retailers.

Before Revery, Li was working on another startup in the personalized email space, but was challenged in making it work due to free versions of already large legacy players. While looking around for areas where there would be less monopoly and more ability to monetize technology, he became interested in fashion. He worked with a different adviser to get a wardrobe collection going, but that idea fizzled out.

The team found its stride working with Forsyth and making several iterations on the technology in order to target business-to-business customers, who already had the images on their websites and the users, but wanted the computer vision aspect.

Unlike its competitors that use 3D modeling or take an image and manually clean it up to superimpose on a model, Revery is using deep learning and computer vision so that the clothing drapes better and users can also customize their clothing model to look more like them using skin tone, hair styles and poses. It is also fully automated, can work with millions of SKUs and be up and running with a customer in a matter of weeks.

Its virtual dressing room product is now live on many fashion e-commerce platforms, including Zalora-Global Fashion Group, one of the largest fashion companies in Southeast Asia, Li said.

Revery.ai landing page. Image Credits: Revery.ai

“It’s amazing how good of results we are getting,” he added. “Customers are reporting strong conversion rates, something like three to five times, which they had never seen before. We released an A/B test for Zalora and saw a 380% increase. We are super excited to move forward and deploy our technology on all of their platforms.”

This technology comes at a time when online shopping jumped last year as a result of the pandemic. Just in the U.S., the e-commerce fashion industry made up 29.5% of fashion retail sales in 2020, and the market’s value is expected to reach $100 billion this year.

Revery is already in talks with over 40 retailers that are “putting this on their roadmap to win in the online race,” Li said.

Over the next year, the company is focusing on getting more adoption and going live with more clients. To differentiate itself from competitors continuing to come online, Li wants to invest body type capabilities, something retailers are asking for. This type of technology is challenging, he said, due to there not being much in the way of diversified body shape models available.

He expects the company will have to collect proprietary data itself so that Revery can offer the ability for users to create their own avatar so that they can see how the clothes look.

“We might actually be seeing the beginning of the tide and have the right product to serve the need,” he added.

Alerzo raises $10.5M Series A to bring Nigeria’s informal retail sector online

By Tage Kene-Okafor

The process of digitizing the operations of mom and pop stores in Nigeria is serious business right now. In fact, it might be the second-best thing after fintech at the moment.

Today’s news is from Alerzo, a little-known B2B e-commerce retail startup based in Ibadan, Nigeria. The company is announcing a $10.5 million Series A round led by New York-based Nosara Capital. FJ Labs and several family offices from the U.S., Europe and Asia, including Michael Novogratz’s, participated in the round.

In total, Alerzo has raised more than $20 million since its launch. Early investors include the Baobab Network, an Africa-focused accelerator based in London, and Signal Hill, a Singapore-based fund manager that participated in its $5.5 million seed round last year. The company also said it closed a $2.5 million working capital facility to serve its customers.

Adewale Opaleye founded Alerzo in 2018 as a last-mile distribution platform that helps retailers stock inventory directly from manufacturers. Its business, officially launched in 2019, is centered on helping street-side vendors and shops in Nigeria’s south-western cities access household supplies quicker and efficiently.

Speaking with TechCrunch, Opaleye said he started Alerzo to empower the millions of women who are the backbone of consumer commerce in Nigeria’s $100 billion informal retail sector.

The need to solve this problem stemmed from observing firsthand the challenges his mom faced while operating two mom-and-pop stores.

“Growing up in Ibadan, I watched my mother operate two informal retail stores to raise my three siblings and me. Seeing the many challenges she faced running her stores, and I decided to start a business that uniquely catered to the needs of retailers just like her,” he told TechCrunch in an interview

These retailers are beholden to an inefficient distribution system that results in inconsistent inventory availability, opaque pricing and limited access to formal financial and banking services.

The founder says Ibadan was the ideal market to establish its headquarters because informal retailers in the region experience these challenges more than those in Lagos.

Alerzo

Adewale Opaleye (Founder & CEO, Alerzo)

Alerzo’s core business distributes FMCG goods using a first-party relationship platform which allows suppliers to clear inventory faster and lets Alerzo control the supply chain and delivery.

Given the lack of trust in the marketplace and the requirement to pay on delivery, Opaleye says this was the most inclusive business model where the economics made sense for the company.

Alerzo claims to have built up a network of up to 100,000 small businesses, 90% of which are women-led. The company exclusively serves the country’s tier-2 to tier-4 cities in Southwest Nigeria — Ibadan, Ekiti and Abeokuta, to name a few. It connects retailers to local and multinational distributors of consumer brands, like Unilever, Nestlé, Procter & Gamble, Dangote, and PZ.

“Without Alerzo, these retailers need to take a day off from the store to visit a central market, pay for transportation and haul a large amount of inventory back to the store. Alerzo replaces this stressful experience by not only reducing costs and time spent running a retail shop but also improving the livelihood of these working women,” said the founder about the company’s growth.

About one-third of the total retailers on Alerzo use the platform monthly. According to its website, retailers can order products via SMS, voice and WhatsApp and deliver them to their stores in less than 10 hours. The company claims to have processed over 1 million orders this past year.

Alerzo owns and operates its full-stack tech-driven supply chain and logistics to process these orders. The company provides warehousing and fulfillment solutions to suppliers and storefront delivery to informal retailers. It currently owns over 200 vehicles and 20 warehouses to serve its thousands of customers.

The last couple of years have seen a rise in last-mile delivery and distribution companies with a large increase in on-demand services across many sectorsWhile most players in Nigeria tend to focus on Lagos and Nigeria’s capital city Abuja, Alerzo’s approach to covering other cities has seemingly paid off so far.

But though Alerzo has enjoyed almost a first-mover advantage in less crowded markets, stiff competition will play out as other key players look to come in. Omnibiz, for instance, has Ibadan in its sights, and TradeDepot is setting up a presence in 10 to 15 cities, aiming to cover all major cities in the country by the end of the year.

Nevertheless, Alerzo’s investors remain bullish on the company’s potentials.

“We’ve studied informal retail marketplaces globally over the last couple of years and Alerzo really stood out to us due to a strong management team led by a founder with a unique understanding of his customer and an attractive business model with exceptional unit economics,” said Ian Loizeaux, the managing partner at Nosara Capital, in a statement. “The company is at the beginning of a compelling multi-decade opportunity to streamline and digitize Nigeria’s retail supply chain.

Seed investor Kevin Jung of Signal Hill cites Alerzo’s focus on the informal retail market outside Lagos as one of the reasons why he backed Alerzo earlier on. He also referred to the company’s orientation toward Asia (a playbook Opaleye adopted when he went to China for studies in 2016), as the best reference point for the emerging business model of digitizing informal retail markets

Alerzo has an office in Singapore that the CEO says serves as a regional hub to identify best practices among similar high-growth businesses operating across Southeast Asia and India and adapt them to the Nigerian market. Likewise, to expand its digital footprint, the company recently launched an office in Lagos.   

The proceeds from this Series A round will be used to expand geographically to northern Nigeria. Alerzo also plans to launch AlerzoPay, the company’s cashless payments and lending platform, as well as a portfolio of new business support services.

Tiger Global backs Nacelle with $50M for its e-commerce infrastructure

By Christine Hall

Consumer shift to buying online during the global pandemic — and keeping that habit — continues to boost revenue for makers of developer tools that help e-commerce sites provide better shopping experiences.

LA-based Nacelle is one of the e-commerce infrastructure companies continuing to attract investor attention, and at a speedy clip, too. It closed on a $50 million Series B round from Tiger Global. This is just six months after its $18 million Series A round, led by Inovia, and follows a $4.8 million seed round in 2020.

The company is working in “headless” commerce, which means it is disconnecting the front end of a website, a.k.a. the storefront, from the back end, where all of the data lives, to create a better shopping experience, CEO Brian Anderson told TechCrunch. By doing this, the back end of the store, essentially where all the magic happens, can be updated and maintained without changing the front end.

“Online shopping is not new, but how the customer relates to it keeps changing,” he said. “The technology for online shopping is not up to snuff — when you click on something, everything has to reload compared to an app like Instagram.”

More people shopping on their mobile devices creates friction due to downloading an app for each brand. That is “sucking the fun out of shopping online,” because no one wants that many apps on their phone, Anderson added.

Steven Kramer, board member and former EVP of Hybris, said via email that over the past two decades, the e-commerce industry went through several waves of innovation. Now, maturing consumer behaviors and expectations are accelerating the current phase.

“Retailers and brands are struggling with adopting the latest technologies to meet today’s requirements of agility, speed and user experience,” Kramer added. “Nacelle gives organizations a future-proof way to accelerate their innovation, leverage existing investments and do so with material ROI.”

Data already shows that COVID-era trends accelerated e-commerce by roughly five years, and Gartner predicts that 50% of new commerce capabilities will be incorporated as API-centric SaaS services by 2023.

Those kinds of trends are bringing in competitors that are also attracting investor attention — for example, Shopistry, Swell, Fabric, Commerce Layer and Vue Storefront are just a few of the companies that raised funding this year alone.

Anderson notes that the market continues to be hot and one that can’t be ignored, especially as the share of online retail sales grows. He explained that some of his competitors force customers to migrate off of their current tech stack and onto their respective platforms so that their users can get a good customer experience. In contrast, Nacelle enables customers to keep their tech stack and put components together as they see fit.

“That is painful in any vertical, but especially for e-commerce,” he said. “That is your direct line to revenue.”

Meanwhile, Nacelle itself grew 690% in the past year in terms of revenue, and customers are signing multiyear contracts, Anderson said.

Anderson, who is an engineer by trade, wants to sink his teeth into new products as adoption of headless commerce grows. These include providing a dynamic layer of functionality on top of the tech stack for storefronts that are traditionally static, and even introducing some livestream capabilities later this year.

As such, Nacelle will invest the new round into its go-to-market strategy and expand its customer success, partner relations and product development. He said Nacelle is already “the de facto standard” for Shopify Plus merchants going headless.

“We want to put everything in a tailor-made API for e-commerce that lets front-end developers do their thing with ease,” Anderson added. “We also offer starter kits for merchants as a starting point to get up-and-running.”

Wonder Brands picks up $20M, aims to build marketplace of Latin American e-commerce brands

By Christine Hall

E-commerce roll-up companies are big in the United States, and Wonder Brands wants to be that for Latin America.

The Mexico-based company closed on $20 million in seed funding, co-led by ALLVP and Mountain Nazca, with participation from CoVenture, Victory Park Capital, GFC, QED (Fontes), Korify Capital and Endeavor Catalyst.

Wonder Brands co-founders Nicolás Gonzalez Luna and Federico Malek came together to start the company in January 2021 to acquire digital brands in the MercadoLibre and Amazon ecosystem. It then leverages its technology to scale their operations and grow sales by taking care of the marketing, analytics, supply chain management and working capital needs of the companies. It focuses on companies in the areas of home and garden, sports and fitness, beauty and personal care.

“MercadoLibre has a larger share, but Amazon is entering the region quickly, so there is not one dominating marketplace. MercadoLibre may have half the market, but then it is more balanced between a number of different platforms,” Gonzalez Luna told TechCrunch. “That diversification means operations here are more complex than the classic Amazon seller. Negotiations take longer and require more discussion about who you are to get the trust in you. That’s why we will be doing fewer, but larger deals than our U.S. counterparts.”

Malek’s background is on the commerce side, having worked at Argentinian insurtech company iunigo.com before founding e-commerce fulfillment company Avenida.com, which was acquired by Groupon in 2010. He then worked as Groupon’s managing director in the region. He knew Gonzalez Luna, whose background includes Goldman Sachs where he focused on M&A.

Michael Breitstein, principal at CoVenture, said his firm has made a variety of investments on the debt and equity sides of e-commerce and believes Malek and Gonzalez Luna provide a “great one-two punch” with their backgrounds, as well as the ability to raise capital and build out a platform.

Though there is a lot of competition to acquire digitally native companies in the $1 million revenue range, Malek said Wonder Brands will focus on larger sellers and operators, with a deal target of at least $5 million in revenue. They are also taking a “buy and build” approach rather than the “buy and consolidate” business model many of the other roll-up companies have, he added.

With its approach, the company’s goal is to enable its acquired companies to sell on multiple channels. It provides support in four areas: category management and brand development, marketing and performance, technology to automate processes like inventory and logistics and operations to manage all of the channels needed. For example, in Latin America, inventory has to be consolidated into one warehouse, but then separated depending on the sales channel, Malek.

Acquiring and scaling companies is big business. London-based Hahnbeck Business Systems, an e-commerce M&A firm that tracks funding to FBA (fulfillment by Amazon) acquirers all over the world, reports that e-commerce roll-up companies raised $7.24 billion in disclosed funding to date.

According to the different sources, reports say Latin American e-commerce company MercadoLibre has a market cap of between $70 billion and $94.billion. Meanwhile, marketplace merchants accounted for 55% of units sold on Amazon.com, according to the retailer. In 2020, that accounted for $300 billion in sales, according to Marketplace Pulse estimates based on Amazon disclosures.

The seed financing enables Wonder Brands to invest in building a team to focus on the four support areas and marketing. The company has 20 employees currently and plans to triple that in the next month. The funding is also complementing larger debt facilities that the company has available to acquire brands. Its target is to make six or seven acquisitions this year.

The company is on target to achieve $55 million in revenue by the end of the year and will then move toward $100 million in revenue in the next 12 months, Malek said. It currently operates in Mexico and plans to begin operations in Brazil by the end of 2021.

 

Amazon will pay you $10 in credit for your palm print biometrics

By Zack Whittaker

How much is your palm print worth? If you ask Amazon, it’s about $10 in promotional credit if you enroll your palm prints in its checkout-free stores and link it to your Amazon account.

Last year, Amazon introduced its new biometric palm print scanners, Amazon One, so customers can pay for goods in some stores by waving their palm prints over one of these scanners. By February, the company expanded its palm scanners to other Amazon grocery, book and 4-star stores across Seattle.

Amazon has since expanded its biometric scanning technology to its stores across the U.S., including New York, New Jersey, Maryland and Texas.

The retail and cloud giant says its palm scanning hardware “captures the minute characteristics of your palm — both surface-area details like lines and ridges as well as subcutaneous features such as vein patterns — to create your palm signature,” which is then stored in the cloud and used to confirm your identity when you’re in one of its stores.

Amazon’s latest promotion: $10 promotional credit in exchange for your palm print. (Image: Amazon)

What’s Amazon doing with this data exactly? Your palm print on its own might not do much — though Amazon says it uses an unspecified “subset” of anonymous palm data to improve the technology. But by linking it to your Amazon account, Amazon can use the data it collects, like shopping history, to target ads, offers and recommendations to you over time.

Amazon also says it stores palm data indefinitely, unless you choose to delete the data once there are no outstanding transactions left, or if you don’t use the feature for two years.

While the idea of contactlessly scanning your palm print to pay for goods during a pandemic might seem like a novel idea, it’s one to be met with caution and skepticism given Amazon’s past efforts in developing biometric technology. Amazon’s controversial facial recognition technology, which it historically sold to police and law enforcement, was the subject of lawsuits that allege the company violated state laws that bar the use of personal biometric data without permission.

“The dystopian future of science fiction is now. It’s horrifying that Amazon is asking people to sell their bodies, but it’s even worse that people are doing it for such a low price,” said Albert Fox Cahn, the executive director of the New York-based Surveillance Technology Oversight Project, in an email to TechCrunch.

“Biometric data is one of the only ways that companies and governments can track us permanently. You can change your name, you can change your Social Security number, but you can’t change your palm print. The more we normalize these tactics, the harder they will be to escape. If we don’t [draw a] line in the sand here, I am very fearful what our future will look like,” said Cahn.

When reached, an Amazon spokesperson declined to comment.

 

White-label SaaS shipping startup Outvio closes $3M round led by Change Ventures

By Mike Butcher

Outvio, an Estonian startup that provides a white-label SaaS fulfillment solution for medium-sized and large online retailers in Spain and Estonia, has closed a $3 million early-stage financing round led by Change Ventures. Also participating were TMT Investments (London), Fresco Capital (San Francisco), and Lemonade Stand (Tallinn). Several angels also joined the round including James Berdigans (Printify) and Kristjan Vilosius (Katana MRP). This is the startup’s first institutional round of funding, after bootstrapping since 2018.

Online retailers usually have to use a number of different tools or hire expensive developers to create in-house shipping solutions. Outvio offers online stores of any size a post-purchase shipping experience, which seeks to replicate an Amazon-style experience where customers can also return packages. Among others, itcompetes with ShippyPro, which runs out of Italy and has raised $5 million to date.

Juan Borras, co-founder and CEO of Outvio said: “We can give any online store all the tools needed to offer a superior post-sale customer experience. We can integrate at different points in their fulfilment process, and for large merchants, save them hundreds of thousands in development costs alone.”

He added: “What happens after the purchase is more important than most shops realize. More than 88% of consumers say it is very important for them that retailers proactively communicate every fulfilment and delivery stage. Not doing so, especially if there are problems, often results in losing that client. Our mission is to help online stores streamline everything that happens after the sale, fueling repeat business and brand-loyal customers with the help of a fantastic post-purchase experience.”

Rait Ojasaar, Investment Partner at lead investor Change Ventures commented: “While online retailing has a long way to go, the expectations of consumers are increasing when it comes to delivery time and standards. The same can be said about the online shop operators who increasingly look for more advanced solutions with consumer-like user experience. The Outvio team has understood exactly what the gap in the market is and has done a tremendous job of finding product-market fit with their modern fulfilment SaaS platform.”

Acrew Capital, Jeff Bezos back Colombia-based proptech La Haus’ $100M debt, equity round

By Mary Ann Azevedo

La Haus, which has developed an online real estate marketplace operating in Mexico and Colombia, has secured $100 million in additional funding, including $50 million in equity and $50 million in debt financing.

The new capital was obtained as an extension to the company’s Series B, the first tranche of which closed in January. With the latest infusion, Medellin, Colombia-based La Haus has now secured $135 million total for the round and over $158 million in funding since its 2017 inception.

San Francisco Bay Area venture firms Acrew Capital and Renegade Partners co-led the round, which also included participation from Jeff Bezos’ Bezos Expeditions, Endeavor Catalyst, Moore Strategic Ventures, Marc Benioff’s TIME Ventures, Rappi’s Simon Borrero, Maluma, and Gabriel Gilinski. Existing backers who put money in this round include Greenspring Associates, Kaszek, NFX, Spencer Rascoff’s 75 & Sunny Ventures, Hadi Partovi and NuBank’s David Velez. 

Jerónimo Uribe (CEO), Rodrigo Sánchez-Ríos (president), Tomás Uribe (chief growth officer) and Santiago Garcia (CTO) founded the company after Jerónimo and Tomas met Sánchez-Ríos at Stanford University. Prior to La Haus they started and ran Jaguar Capital, a Colombian real estate development company with over $350 million of completed retail and residential projects. 

The company declined to reveal at what valuation the extension was raised, with Sánchez-Ríos saying only that it was “a significant increase” from January.

The Series B extension follows impressive growth for the startup, which saw the number of transactions conducted on its Mexico portal climb by nearly 10x in the second quarter of 2021 compared to the 2020 second quarter. With over 500 homes selling on its platform (via lahaus.com and lahaus.mx) the company is “the market leader in selling new housing in Spanish-speaking Latam by an order of magnitude,” its execs claim.  La Haus expects to have facilitated more than $1 billion in annualized gross sales by the end of the year. 

The startup was founded with the mission of making it easier for people to buy homes and helping “solve LatAm’s extreme housing inequality.” Its end goal is to accelerate access to new housing by both generating and curating supply and demand and then matching it with its technology, noted Sánchez-Ríos. 

“In the last six months, our chief product officer has built a product that allows this to happen 100% digitally,” he said. “Before it would take a lot of time, people involved and visits. We want to provide people looking for a home a similar experience as to people looking for their next flight at delta.com.”

It has done that by embedding its software to developers’ new projects so that it can bring that digital experience to its users. 

“They are able to view the projects on our sites, we match them and then they can see in real time which units of a particular tower are available, and then select, sign and pay for everything digitally,” Sánchez-Río said.

Image credit: La Haus

The need for new housing in the region and other emerging markets in general is acute, they believe. And the pace of building new homes is slow because small and mid-sized developers – who are responsible for building the majority of new homes in Latin America – are cash constrained. At the same time, mortgages are mostly not affordable for consumers, with banks extending only a fraction of the credit to individuals compared to the U.S., and often at far worse terms. 

What La Haus is planning to do with its new capital – particularly the debt portion – is go beyond selling homes via its marketplace to helping extend financing to both developers and potential buyers.It plans to take the proprietary data it has been able to glean from the thousands of real estate transactions conducted on it platform to extend capital to developers and consumers “more quickly, with much lower risk and at better terms.”

Already, what the startup has accomplished is notable. Being able to purchase a home 100% digitally is not that easy even in the U.S. Pulling that off in Latin America – which has historically trailed behind in digital adoption – is no easy feat. By year’s end, La Haus intends to be in every major metropolitan area in Mexico and Colombia. 

Its ultimate goal is to be able to help new, sustainable homes “to be built faster, alleviating the inequality caused by lack of access to inventory.”

To Acrew Capital’s Lauren Kolodny, La Haus is building a solution specific to the issues of Latin America’s housing market, rather than importing business models – such as iBuying – from the U.S.

“For many people in the United States home equity is their largest asset. In Latin America, however, consumers have been challenged with an impenetrable real estate market stacked against consumers,” she wrote via email. “La Haus is removing barriers to home ownership that stifles millions of people from achieving financial security. Specifically, Latin America has no centralized MLS, very costly interest rates, no transactional transparency, and few online informational tools.”

La Haus, Kolodny added, is breaking down these barriers by consolidating listings online, offering pricing transparency and educating consumers about their financing options.

Acrew first invested in the startup in its $10 million Series A and has been impressed with its growth over time.

“They have a unique focus on new housing — a massive industry worldwide, but especially in emerging markets where new housing is so necessary,” Kolodny said. “The management team…knows real estate in Latin America better than anyone we’ve met.”

For its part, the La Haus team is excited to put its new capital to work. As Sánchez-Río put it, “$50 million goes a lot further in Mexico and Colombia than in the U.S.”

“We are going to be very aggressive in Mexico and Colombia, and plan to go from four to at least 12 markets by the end of the year,” Jeronimo told TechCrunch. “We’re also excited to roll out our financing solution to developers and buyers.”

Walmart to sell its e-commerce technologies to other retailers

By Sarah Perez

Walmart’s investments in software and retail technologies it used to transform its business from a brick-and-mortar to one that combines both in-person and online shopping will now be made available to other retailers for the first time, the company announced today. Through a strategic partnership with Adobe, Walmart will integrate access to Walmart’s Marketplace, as well as its various online and in-store fulfillment and pickup technologies, into the Adobe Commerce Platform.

The technologies will be made available to both Adobe Commerce and Magento Open Source customers, Adobe says.

The deal will allow Walmart to potentially reach thousands of small to mid-sized retailers, who will effectively be able to tap into the same tools that one of the largest global retailers is using to run their business.

Through the partnership, Adobe retail customers will be able to do things like show store pickup eligibility and available pickup times online; offer multiple pickup options like curbside and in-store pickup; provide their store associates with mobile tools to pick for orders, validate item selections and handle substitutions; and use tools to communicate with customers about their pickup orders, like those where customers can alert store associates of their ETA or arrival for curbside pickup.

Another aspect of the partnership will allow retailers to syndicate and sell their products across Walmart’s Marketplace.

The arrangement not only aims to benefit Walmart’s bottom line as it offers new revenue streams related to retail technologies, it could also serve as another tool in Walmart’s battle with Amazon for online retail dominance.

Retail businesses will use the Adobe Commerce platform to reach an expanded set of customers by listing products on Walmart’s Marketplace and then leverage Walmart’s Fulfillment Services to offer two-day shopping across the U.S.

And this, in turn, could boost the number of available products sold on Walmart’s Marketplace, which is still largely dwarfed by Amazon.

Walmart’s Marketplace had grown to an estimated 70,000 sellers in 2020, fueled by a surge in online shopping triggered by the pandemic, according to third-party estimates. This was a more than doubling over 2019. Today, the marketplace is topping 100,000 sellers, per Marketplace Pulse data. Amazon’s Marketplace, on the other hand, counts an estimated 6.3 million total sellers worldwide, 1.5 million of which are currently active, per estimates.

Part of Walmart’s problem in scaling its marketplace business could be related to its ease-of-use on the seller side. Many smaller sellers have reported that Walmart’s Marketplace is far more difficult to use than Amazon’s, and they’ve complained about waiting months to hear back from Walmart about whether they were approved to sell on the platform.

Adobe’s partnership could help to address some of those challenges.

Adobe also notes it’s working to consolidate its other channel solutions into a single, unified extension that would allow its retail customers to sell across multiple sales channels — including Amazon’s — using one, integrated tool for easy account setup and catalog syndication.

This is the first time Walmart has made its retail technologies available to other businesses, the company said. And it has yet to forecast what sort of revenue the new partnership could bring in. But it’s a path that Amazon has also been pursuing in recent years to maximize the return on investment from its novel, retail innovations, like its A.I. and computer vision-powered Just Walk Out system that lets customers skip the checkout line.

“The core mission of helping people save money and live better is at the heart of every idea including Scan & Go and checkout technologies, AI-powered smart substitutions and pickup and delivery,” said Suresh Kumar, chief technology officer and chief development officer of Walmart Inc., in a statement. “Combining Adobe’s strength in powering commerce experiences with our unmatched omni-customer expertise, we can accelerate other companies’ digital transformations,” he said.

Adobe’s retail customers in the U.S. will be able to integrate Walmart’s technologies in their own storefronts starting in early 2022, the companies said. Pricing and other details will be provided closer to launch.

While today’s announcement concerns channel partner Adobe, who will help to resell the technologies, Walmart also has a GoToMarket team that will target retailers directly.

Allocate banks $5M to open up venture capital fund access

By Christine Hall

The world of venture capital investing is a relatively small one, and relationship-based to boot. Family offices and accredited investors are eager to get involved in high-quality funds, but face hurdles like access to fund managers.

Enter Allocate. The company, founded by Samir Kaji and Hana Yang in February 2021, is developing an approach to venture capital fund investing that provides a way for investors of any size to participate.

On Thursday, the San Francisco-based company announced it raised $5 million in seed funding from a group of backers including Urban Innovation Fund, Tusk Venture Partners, Basis Set Ventures, Liquid2 Ventures, Fika Ventures, Ulu Ventures and Anthemis Group.

The pair met as Kauffman Fellows, both with backgrounds in financial services. By the time they met, Yang was working in the nonprofit world, and said they began talking about the friction between the nonprofit and venture capital worlds. Then Yang joined Kaji at First Republic Bank to work together and continue the conversation.

Kaji, citing a Boston Consulting Group report, estimated there are between 8,000 and 11,000 global family offices and nearly 17 million accredited investors that currently control some $42 trillion in assets.

They saw the issue as it related to supply and demand: On the supply side, there are a finite number of institutional investors, “all with their dance cards full,” Kaji told TechCrunch. Fund managers want to get at that nontraditional endowment money and are looking at family offices, but finding those individuals is a challenge.

Meanwhile, on the demand side, family offices have trouble accessing venture capital firms — they don’t know where to look to find managers, don’t have time to cultivate those relationships or can’t make the traditional $1 million commitments.

As a result, Kaji and Yang decided to start Allocate as a way to usher in the next era of venture capital by creating a way for retail investors of any size or background to invest in funds and for managers to find family offices.

Allocate’s platform curates venture fund products for wealth advisors, family offices and qualified individual investors based on their investment objectives, and any pre- and post-investment transactions and reporting activities are completed on the platform.

The company sets up its own feeder vehicles that aggregate investor capital so that there are lower minimum investments and that capital can easily be managed by fund managers. It then charges a fee, on an annual basis, on investments made.

Currently, investors can choose the funds they want to invest in, but Kaji said Allocate will eventually also offer products that will be like funds of funds, where investments go into a pot that will be invested by a fund manager.

The company is pre-revenue and said it will use the new funding to build out its product and make some key hires over the next year as it gears up for a formal software product launch at the end of the year. It is already attracting a waitlist of several hundred fund managers and investors.

“With the market the way it is, the number of accredited investors is expected to grow by 50% by 2025,” Raji said. “There is a huge opportunity to unlock the market and have people participate.”

Jordan Nof, co-founder and managing partner at Tusk Ventures, agrees. He sees a lot of economic growth taking place outside the public market, and opportunities present themselves for someone to capitalize on.

Due to the access issue between fund managers and potential investors, there are trillions of dollars sitting on the sidelines, he told TechCrunch. With Allocate, Nof saw a way to bridge the two parties with tools for both sides to make sound decisions and further evolve venture capital.

“I have known Samir for quite some time, and he and his team understand this problem set and they have a vision of what the venture capital future looks like,” he added. “This is a cottage industry even though VC is responsible for impacting the largest of technology companies, which have taken VC, yet it is a still super fragmented industry that has no transparency. Allocate is the next transition of a true platform that enables family offices and high-net worth individuals access.”

 

Brokrete wants to be the ‘Shopify of construction’, raises $3M seed led by Xploration Capital

By Mike Butcher

With the pandemic affecting every aspect of life and industry, it’s no surprise that digitization is coming to construction fast. Construction suppliers are increasingly under the same pressure as other sectors to perform at a higher level. We’ve seen the rise of companies like Dozer, Reno Run, and Toolbox try to address this, but often the model is closer to a vertical integration one rather than something more open. Even with that, it’s still the case that to order concrete or bricks, construction companies have to negotiate each time, while simultaneously record keeping.

This is the argument of Brokrete, which bills itself as the “Shopify of construction.”

The startup has now raised a $3M seed financing round led by Xploration Capital, which was joined by unnamed new strategic investors and existing investors. The startup graduated from Y Combinator’s winter cohort last year. Other strategic investors include Ronald Richardson, Avlok Kohli (CEO of AngeLlist Ventures) and the MaRS Investment Accelerator Fund (IAF). The funding will be used to expand in North American and European markets. Brokrete also launched an e-commerce platform for suppliers in the construction industry it calls Storefront.

Jordan Latourelle, the company’s founder and CEO said: “Construction today is a largely offline, $1.2 trillion market where legacy commerce is the norm. Brokrete’s Storefront product equips suppliers with the tools required to enhance their operations by orders of magnitude. I founded Brokrete after seeing an industry left behind by e-commerce giants. Now we are becoming the operating system for e-commerce in the construction industry, while staying easy and affordable at the same time.”

Brokrete says its platform is code-free, white-labeled, multi-channel, and industry-specific to sell and manage orders online. Suppliers get an iOS and Android app for e-commerce to receive offline orders from more ‘traditional’ customers. It then provides order management, payouts, dispatching, logistics, and real-time delivery. There are also financial and operational ERP integrations. Brokrete claims to works with 1000+ contractors and to have a 250+ supplier network.

Latourelle told me: “We’re giving the construction industry an opportunity to use it on a Shopify way, and create their own store. It’s like a branded storefront for suppliers.”

Eugene Timko, managing partner at Xploration Capital said: “Construction is one of the few remaining large industries with mostly undigitized supply chains. Historically the key problem was the lack of real-time access to actual stocks which prevented producers and distributors from going online. Now with Brokrete’s end-to-end solution, these businesses can not only sell through Brokrete’s marketplace but can also enable their own direct online channels. Similar to Shopify, this has allowed many thousands of previously offline businesses to start accepting orders online.”

Powered by local stores, JOKR joins the 15-min grocery race with a $170M Series A

By Mike Butcher

“We are true believers in the fact that the world needs a new Amazon, a better one, a more sustainable one, one that appreciates local areas and products.” It’s quite one thing to claim you are out to replace Amazon (just as its founder goes into space), but Ralf Wenzel, Founder and CEO of JOKR, certainly believes his company might have a shot. And he’s raising plenty of money to aim at that goal.

Today the fast-growing grocery and retail delivery platform has closed a whopping $170 million Series A funding round. The round comes three months after the company started operations in the U.S., Latin America, and Europe. JOKR’s team consists of people who created both foodpanda and Delivery Hero, so from the outside at least, they have the chops to build a big business.

The round was led by Led by GGV Capital, Balderton Capital, and Tiger Global Management. It was joined by Activant Capital, Greycroft, Fabrice Grinda’s FJ Labs, as well as Latin America’s tech-specialized VC firms Kaszek and Monashees, as did HV Capital, the first institutional investor.

Based out of New York, where it launched last month JOKR plans to roll out across cities in the U.S., Latin America and Europe. Right now it’s live in nine cities, across Latin American countries, Brazil, Mexico, Colombia, Peru, as well as Poland and Austria in Europe.

Wenzel said: “The investment we announced today will empower us to continue our expansion at an unprecedented rate as we continue to build JOKR into the premier platform for a new generation of online shopping, with instant delivery, a focus on local product offerings and more sustainable delivery and supply chains. We are proud to be able to partner with such a distinguished group of international tech investors to help us seize the enormous opportunity in front of us.”

JOKR’s pitch is that it enables small local businesses to sell their goods, sourced from other local businesses, via the platform, thus expanding their reach without the need for complex logistics and delivery networks on their own. But that local aspect also builds sustainability into the model.

Hans Tung, Managing Partner at GGV Capital, and newly appointed member of JOKR’s board said: “Ralf has put together an all-star team for food delivery that will transform the retail supply chain. The combination of food delivery experience and the sophisticated data capabilities that optimizes inventory allocation and dispatch, set JOKR apart. We look forward to working with the team on their mission to make retail more instant, more democratic, and more sustainable.”

JOKR is joining other fast-delivery grocery providers like Gorillas and Getir in providing a 15 minute delivery time for supermarket and convenience products, pharmaceuticals, but also ‘exclusive’ local products that are not available in regular supermarkets. Although, so far, it only has an app on Google Play.

Speaking at an interview with me Wenzel said: “We are close to the equivalent of Instacart, strongly grocery focused. Our offering is significantly broader than the ones of Gorillas because we’re not only focusing on convenience and all kinds of different grocery categories, we’re getting closer to a supermarket offering, so the biggest competing element would be the traditional supermarkets, the offline supermarkets, as well as online grocery propositions. We are vertically integrating and hence procuring directly, cutting out middlemen and building our own distribution warehouses.”

❌