E-commerce now accounts for 14% of all retail sales, and its growth has led to a rise in the fortunes of startups that build tools to enable businesses to sell online. In the latest development, a company called VTEX — which originally got its start in Latin America helping companies like Walmart expand their business to new markets with an end-to-end e-commerce service covering things like order and inventory management, front-end customer experience and customer service — has raised $140 million in funding, money it will be using to continue taking its business deeper into more international markets.
The investment is being led by SoftBank, specifically via its Latin American fund, with participation also from Gávea Investimentos and Constellation Asset Management. Previous investors include Riverwood and Naspers; Riverwood continues to be a backer, the company said.
Mariano Gomide, the CEO who co-founded VTEX with Geraldo Thomaz, said the valuation is not being disclosed, but he confirmed that the founders and founding team continue to hold more than 50% of the company. In addition to Walmart, VTEX customers include Levi’s, Sony, L’Oréal and Motorola . Annually, it processes some $2.4 billion in gross merchandise value across some 2,500 stores, growing 43% per year in the last five years.
VTEX is in that category of tech businesses that has been around for some time — it was founded in 1999 — but has largely been able to operate and grow off its own balance sheet. Before now, it had raised less than $13 million, according to PitchBook data.
This is one of the big rounds to come out of the relatively new SoftBank Innovation Fund, an effort dedicated to investing in tech companies focused on Latin America. The fund was announced earlier this year at $2 billion and has since expanded to $5 billion. Other Latin American companies that SoftBank has backed include online delivery business Rappi, lending platform Creditas and property tech startup QuintoAndar.
The common theme among many SoftBank investments is a focus on e-commerce in its many forms (whether that’s transactions for loans or to get a pizza delivered), and VTEX is positioned as a platform player that enables a lot of that to happen in the wider marketplace, providing not just the tools to build a front end, but to manage the inventory, ordering and customer relations at the back end.
“VTEX has three attributes that we believe will fuel the company’s success: a strong team culture, a best-in-class product and entrepreneurs with profitability mindset,” said Paulo Passoni, managing investment partner at SoftBank’s Latin America fund, in a statement. “Brands and retailers want reliability and the ability to test their own innovations. VTEX offers both, filling a gap in the market. With VTEX, companies get access to a proven, cloud-native platform with the flexibility to test add-ons in the same data layer.”
Although VTEX has been expanding into markets like the U.S. (where it acquired UniteU earlier this year), the company still makes some 80% of its revenues annually in Latin America, Gomide said in an interview.
There, it has been a key partner to retailers and brands interested in expanding into the region, providing integrations to localise storefronts, a platform to help brands manage customer and marketplace relations, and analytics, competing against the likes of SAP, Oracle, Adobe and Salesforce (but not, he said in answer to my question, Commercetools, which builds Shopify -style API tools for mid and large-sized enterprises and itself raised $145 million last month).
E-commerce, as we’ve pointed out, is a business of economies of scale. Case in point: While VTEX processes some $2.5 billion in transactions annually, it makes a relatively small return on that — $69 million, to be exact. This, plus the benefit of analytics on a wider set of big data (another economy of scale play), are two of the big reasons VTEX is now doubling down on growth in newer markets like Europe and North America. The company now has 122 integrations with localised payment methods.
“At the end of the day, e-commerce software is a combination of knowledge. If you don’t have access to thousands of global cases you can’t imbue the software with knowledge,” Gomide said. “Companies that have been focused on one specific region are now realising that trade is a global thing. China has proven that, so a lot of companies are now coming to us because their existing providers of e-commerce tools can’t ‘do international.’ ” There are very few companies that can serve that global approach and that is why we are betting on being a global commerce platform, not just one focused on Latin America.”
Slack makes customer acquisition look easy.
The day we acquired our first Highspot customer, it was raining hard in Seattle. I was on my way to a startup event when I answered my cell phone and our prospect said, “We’re going with Highspot.” Relief, then excitement, hit me harder than the downpour outside. It was a milestone moment – one that came after a long journey of establishing product-market fit, developing a sustainable competitive advantage, and iterating repeatedly based on prospect feedback. In other words, it was anything but easy.
User-first products are driving rapid company growth in an era where individuals discover, adopt, and share software they like throughout their organizations. This is great if you’re a Slack, Shopify, or Dropbox, but what if your company doesn’t fit that profile?
Product-led growth is a strategy that works for the right technologies, but it’s not the end-all, be-all for B2B customer acquisition. For sophisticated enterprise software platforms designed to drive company-wide value, such as Marketo, ServiceNow and Workday, that value is realized when the product is adopted en masse by one or more large segments.
If you’re selling broad account value, rather than individual user or team value, acquisition boils down to two things: elevating account based-selling and revolutionizing the inside sales model. Done correctly, you lay a foundation capable of doubling revenue growth year-over-year, 95 percent company-wide retention, and more than 100 percent growth in new customer logos annually. Here are the steps you can take to build a model that realizes on-par results.
Account-based selling is not a new concept, but the availability of data today changes the game. Advanced analytics enable teams to develop comprehensive and personalized approaches that meet modern customers’ heightened expectations. And when 77 percent of business buyers feel that technology has significantly changed how companies should interact with them, you have no choice but to deliver.
Despite the multitude of products created to help sellers be more productive and personal, billions of cookie-cutter emails are still flooding the inboxes of a few decision makers. The market is loud. Competition is cut throat. It’s no wonder 40 percent of sales reps say getting a response from a prospect is more difficult than ever before. Even pioneers of sales engagement are recognizing the need for evolution – yesterday’s one-size-fits-all approach to outreach only widens the gap between today’s sellers and buyers.
Companies must radically change their approach to account-based selling by building trusted relationships over time from the first-touch onward. This requires that your entire sales force – from account development representatives to your head of sales – adds tailored, tangible value at every stage of the journey. Modern buyers don’t want to be sold. They want to be advised. But the majority of companies are still missing the mark, favoring spray-and-pray tactics over personalized guidance.
One reason spamming remains prevalent, despite growing awareness of the need for quality over quantity, is that implementing a tailored approach is hard work. However, companies can make great strides by doing just three things:
The Indian government said on Tuesday that it is “empowered” to intercept, monitor, or decrypt any digital communication “generated, transmitted, received, or stored” on a citizen’s device in the country in the interest of national security or to maintain friendly relations with foreign states.
Citing section 69 of the Information Technology Act, 2000, and section 5 of the Telegraph Act, 1885, Minister of State for Home Affairs G. Kishan Reddy said local law empowers federal and state government to “intercept, monitor or decrypt or cause to be intercepted or monitored or decrypted any information generated, transmitted, received or stored in any computer resource in the interest of the sovereignty or integrity of India, the security of the state, friendly relations with foreign states or public order or for preventing incitement to the commission of any cognizable offence relating to above or for investigation of any offence.”
Reddy’s remarks were in response to the parliament, where a lawmaker had asked if the government had snooped on citizens’ WhatsApp, Messenger, Viber, and Google calls and messages.
The lawmaker’s question was prompted after 19 activists, journalists, politicians, and privacy advocates in India revealed earlier this month that their WhatsApp communications may have been compromised.
WhatsApp has said that Israeli spyware manufacturer NSO’s tools have been used to send malware to 1,400 users. The Facebook-owned company has in recent weeks alerted users whose accounts had been compromised. The social juggernaut earlier this month sued NSO alleging that its tools were being used to hack WhatsApp users.
NSO has maintained that it only sells its tools to government and intelligence agencies, an assertion that stoked fear among some that the state could be behind targeting the aforementioned 19 people — and perhaps more — in the country.
Reddy did not directly address the questions, but in a blanket written statement said that “authorized agencies as per due process of law, and subject to safeguards as provided in the rules” can intercept or monitor or decrypt “any information from any computer resource” in the country.
He added that each case of such interception has to be approved by the Union Home Secretary (in case of federal government) and by the Home Secretary of the State (in case of state government.)
Last month, the Indian government said it was moving ahead with its plan to revise existing rules to regulate intermediaries — social media apps and others that rely on users to create their content — as they are causing “unimaginable disruption” to democracy.
It told the country’s apex court that it would formulate the rules by January 15 of next year.
A report published today by New Delhi-based Software Law and Freedom Centre (SFLC) found that more than 100,000 telephone interception are issued by the federal government alone every year.
“On adding the surveillance orders issued by the state governments to this, it becomes clear that India routinely surveils her citizens’ communications on a truly staggering scale,” the report said.
The non-profit organization added that the way current laws that enable law enforcement agencies to conduct surveillance on citizens’ private communications are “opaque” as they are run “solely by the executive arm of the government, and make no provisions for independent oversight of the surveillance process.”
Africa-focused fintech startup OPay has raised a $120 million Series B round backed by Chinese investors.
Located in Lagos and founded by consumer internet company Opera, OPay will use the funds to scale in Nigeria and expand its payments product to Kenya, Ghana and South Africa — Opera’s CFO Frode Jacobsen confirmed to TechCrunch.
OPay’s $120 million round comes after the startup raised $50 million in June. It also follows Visa’s $200 million investment in Nigerian fintech company Interswitch and a $40 million raise by Lagos-based payments startup PalmPay — led by China’s Transsion.
There are a couple of quick takeaways. Nigeria has become the epicenter for fintech VC and expansion in Africa. And Chinese investors have made an unmistakable pivot to African tech.
Opera’s activity on the continent represents both trends. The Norway-based, Chinese-owned (majority) company founded OPay in 2018 on the popularity of its internet search engine.
Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.
The company has built a hefty suite of internet-based commercial products in Nigeria around OPay’s financial utility. These include motorcycle ride-hail app ORide, OFood delivery service and OLeads SME marketing and advertising vertical.
“OPay will facilitate the people in Nigeria, Ghana, South Africa, Kenya and other African countries with the best fintech ecosystem. We see ourselves as a key contributor to…helping local businesses…thrive from…digital business models,” Opera CEO and OPay Chairman Yahui Zhou, said in a statement.
Opera CFO Frode Jacobsen shed additional light on how OPay will deploy the $120 million across Opera’s Africa network. OPay looks to capture volume around bill payments and airtime purchases, but not necessarily as priority. “That’s not something you do every day. We want to focus our services on things that have high-frequency usage,” said Jacobsen.
Those include transportation services, food services and other types of daily activities, he explained. Jacobsen also noted OPay will use the $120 million to enter more countries in Africa than those disclosed.
Since its Series A raise, OPay in Nigeria has scaled to 140,000 active agents and $10 million in daily transaction volume, according to company stats.
Beyond standing out as another huge funding round, OPay’s $120 million VC raise has significance for Africa’s tech ecosystem on multiple levels.
It marks 2019 as the year Chinese investors went all in on the continent’s startup scene. OPay, PalmPay and East African trucking logistics company Lori Systems have raised a combined $240 million from 15 different Chinese actors in a span of months.
OPay’s funding and expansion plans are also a harbinger for fierce, cross-border fintech competition in Africa’s digital finance space. Parallel events to watch for include Interswitch’s imminent IPO, e-commerce venture Jumia’s shift to digital finance and WhatsApp’s likely entry in African payments.
The continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population — which makes fintech Africa’s most promising digital sector. But it’s becoming a notably crowded sector, where startup attrition and failure will certainly come into play.
And not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa.
This places OPay and its Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent. That means inevitable competition between Opera and Africa’s largest multi-service internet company, Jumia.
TikTok is beginning to dabble in social commerce. The short-form video app said it has started to allow some users to add links to e-commerce sites (or any other destination) to their profile biography as well as offer creators the ability to easily send their viewers to shopping websites.
The company said the roll-out of these two features are part of its usual “experimentation” to improve the app experience for users. Though, this particular experimentation could significantly change how lucrative influencers find TikTok.
A spokesperson of ByteDance, one of the world’s most valuable startups that also owns TikTok, said, “We’re always experimenting with new ways to improve the app experience for our users. Ultimately, we’re focused on ways to inspire creativity, bring joy, and add value for our community.”
These features were first spotted and shared by Fabian Bern, founder of influencer of Chinese startup Uplab. In a video he tweeted on Thursday, Bern showed how it was possible for the first time for creators to give their viewers the ability to visit a third-party website.
— Fabian 法比安 (@iamfabianbern) November 14, 2019
In the video, we also see TikTok is permitting users to add a URL in their profile bio. Instagram has long allowed this functionality, which is used by a large number of accounts for a variety of reasons. While influencers usually direct their fans to merchandise stores, some news publishers use it to drive people to news articles, for instance. The current set of restrictions on Instagram, however, leave a lot to be desired.
If TikTok, which has amassed over a billion users, retains these features, it could disrupt what many industry figures call “social commerce.” Social media companies and messaging apps in recent years have lured customers through their core services and introduced shopping features.
In many markets, such as China, Southeast Asia and India, which happens to be one of TikTok’s biggest markets, social commerce is increasingly becoming popular and beginning to pose a challenge to “traditional” e-commerce players such as Amazon.
And major giants are beginning to see an opportunity in this space. Facebook, which offers a marketplace, this year backed Meesho, an Indian social commerce startup.
Meesho connects buyers and sellers on WhatsApp and other social media platforms, enables them to showcase and sell their goods and works with a range of logistics companies to service their orders.
“This is big!,” said Nameet Potnis, head of business growth and marketing for the India unit of Naspers’ global payments firm PayU, of TikTok’s new features.
“Excited to see how this is going to reshape commerce in tier 2/3 India where TikTok rules over Instagram. As Indians get comfortable with buying and paying online, local influencers will change the game.”
TikTok’s experimentation comes at a time when rival Instagram is beginning to expand a test in which it hides “likes” from public view. The move has caused concerns for influencers, who count on likes to inform advertisers of their reach.
TikTok, which has amassed more than 180 million users in India and thousands of influencers in the country, last month expanded to an education category in India.
E-commerce accounts for around 11% of all retail sales in the U.S., but it’s growing much faster than brick-and-mortar sales, going up 14.8% this year versus a mere 1.9% for physical retail, according to eMarketer. So to better compete today and in the future, retailers are now investing in more advanced tools not just to figure out more about what’s selling best, when and where, but how to serve individuals better — in essence, to provide the same kind of help, recommendations, discounts and communication with shoppers that online portals like Amazon provides.
Punchh, a company that got its start in loyalty cards (hence the name) but has since expanded into a wider world of analytics and customer personalization to tap into that trend, is today announcing that it has raised $40 million to continue expanding its business. The funding is being led by Adams Street Partners and Sapphire Ventures (which also led its previous round of $30 million in April 2018), with AllianceBernstein also participating.
To date, Punchh has raised around $73 million, with its valuation over $300 million. (To be clear, CEO and founder Shyam Rao said the exact number wasn’t being disclosed, but he did say it was “well north” of multiples of its last valuation, which was around $100 million. PitchBook has filled in the blanks: a first close of this round this summer, for just over $35 million, came in at a pre-money valuation of $300 million, which would make this about $340 million.)
Punchh has built most of its business up to now in the restaurant industry. Its customers include companies like Yum Brands (the Pizza Hut, Taco Bell, KFC giant), Denny’s and other big and smaller operations, where it provides not just app-based loyalty card services, but ways to link up people’s payment cards with their purchasing history to better track what they are buying, and the ability to build subsequent discount and other promotional campaigns around that. Altogether, Rao tells me that it has data on some 125 million customers globally, covering some 80,000 locations.
“We get access to 100% of all transactions at those locations, working out to 3 billion transactions per month,” Rao said. That data in turn trains Punchh’s AI models to feed the bigger recommendation and analytics engine.
For the last year, Punchh been slowly expanding into other retail areas such as convenience stores and more: its most recent customer win, a deal with Casey’s General Stores, Inc. with 2,100 stores in 16 states in Midwest, is a sign that the strategy is working.
The opportunity that Punchh is targeting is somewhat ironic: the level of personalization that it’s building into the brick-and-mortar customer experience used to be a cornerstone of what it meant to be a “regular customer” at a local or favorite store, bar or restaurant.
These days — in part because of the decline of the small business, in part because our spending habits have changed, in part because everything has been digitised and retailers are looking for ways to actually downsize human-based customer relations — you don’t typically get that kind of experience anymore.
On the online front, online stores like Amazon have leveraged the model of personalization and seized the opportunity to use data to offer it in their own style: by recommending products to you when you come to their virtual storefronts, based on what you’ve bought or browsed for already online. So while old days of brick-and-mortar personalization have disappeared, they’ve been quickly replaced online, but not so in the physical world.
That’s now slowly changing in part because of innovations from companies like Punchh, which also takes into account cash purchases, since its technology is integrated at the point of sale.
“When you buy something in cash, we may not know who you are but we do know that you come in at, say, 8am and what you bought,” he said. “We can still use that to predict lifetime value and to generate a coupon.”
Ironically, while the was a model that was pioneered in brick and mortar, it was honed online, and is now again being improved and advanced, Punchh supporters say, back in the physical — not online — world, which is, after all, still accounting for more sales overall.
“Punchh is the undisputed leader in this category. They work with the biggest brands, have the most sophisticated technology, and drive real results for their customers,” said Robin Murray, Partner at Adams Street Partners, in a statement. “While everyone else got distracted by maximizing ecommerce, Punchh took the best technologies and practices from that space and applied them to physical retail. Now the world is coming back around – just look at Amazon’s purchase of Whole Foods – and Punchh is already 10 steps ahead of the game.”
Moveworks, a startup using AI to help resolve Help Desk tickets in an automated fashion, announced a $75 million Series B investment today.
The round was led by Iconiq Capital, Kleiner Perkins and Sapphire Ventures. Existing investors Lightspeed Venture Partners, Bain Capital Ventures, and Comerica Bank also participated. The round also included a personal investment from John W. Thompson, who is a partner at LightSpeed Venture Partners and chairman at Microsoft. Today’s investment brings the total raised to $105 million, according to the company.
That’s a lot of money for an early-stage company, but CEO and co-founder Bhavin Shah says his company is solving a common problem using AI. “Moveworks is a machine learning platform that uses natural language understanding to take tickets that are submitted by employees every day to their IT teams for stuff they need, and we understand [the content of the tickets], interpret them, and then we take the actions to resolve them [automatically],” Shah explained.
He said the company decided to focus on help desk tickets because they saw data when they were forming the company that suggested a common set of questions, and that would make it easier to interpret and resolve these issues. In fact, they are currently able to resolve 25-40% of all tickets autonomously.
He says this should lead to greater user satisfaction because some of their problems can be resolved immediately, even when IT personnel aren’t around to help. Instead of filing a ticket and waiting for an answer, Moveworks can provide the answer, at least part of the time, without human intervention.
Aditya Agrawal, a partner at Iconiq, says that the company really captured his attention. “Moveworks is not just transforming IT operations, they are building a more modern and enlightened way to work. They’ve built a platform that simplifies and streamlines every interaction between employees and IT, enabling both to focus on what matters,” he said in a statement.
The company was founded in 2016, and in the early days was only resolving 2% of the tickets autonomously, so it has seen major improvement. It already has 115 employees and dozens of customers (although Shah didn’t want to provide an exact number).
Facebook wants more people to know it owns Instagram, WhatsApp, and Oculus while still maintaining a distinct identity for its main app. So today Facebook launched a new capitalization and typography format for its company name, using all capital letters and a shifting color scheme that highlights Instagram’s purple gradient and WhatsApp’s green tint.
“Over the coming weeks, we will start using the new brand within our products and marketing materials, including a new company website” Facebook’s CMO Antonio Lucio writes. For example, the bolder “from FACEBOOK” branding will appear at the bottom of the Instagram login screen and settings menu. Facebook previously used a blue or white lowercase “f” as a logo.
Facebook began its rebranding process in June, adding “from Facebook” taglines to its products. The Information reported Facebook CEO Mark Zuckerberg was unsatisfied with the credit Facebook was getting for owning Instagram and WhatsApp.
Zuckerberg double-down on that sentiment during this month’s earnings call as a response to questions about anti-trust investigations against the company that could seek to force a spin off of its acquisitions. Zuckerberg noted that it wa Facebook’s resources in areas like anti-spam, internationalization, and ads that helped turn Instagram from a sub-50 million user product to a billion-plus one today.
Some see Facebook as preemptively mounting defense against anti-trust action. Beyond rebranding, it’s working on making Facebook Messenger, WhatsApp, and Instagram Direct a unified interoperable and encrypted messaging system where users can chat across the apps. Building them all on a centralized infrastructure could make Facebook tougher to break up.
Yet from another perspective, the rebranding efforts feel ham-handed and egotistical. Facebook likely benefits from the fact that most people don’t actually know it owns Instagram and WhatsApp. A recent Pew study found only 29% of Americans correctly the named the two as companies owned by Facebook.
Given Facebook’s rash of data security, developer platform, election interference, and ongoing privacy scandals, it’s probably better off if people think they can escape the toxicity by using Instagram. The acquisitions effectively acted as a brand lifeboat for Facebook.
Now it seems Facebook is happy to burn down some of the credibility of its younger apps if it builds up the central company. Autonomy at the acquired companies has seemed to wane since Facebook installed loyal lieutenants like Adam Mosseri and Will Cathcart to run Instagram and WhatsApp.
The big problem for Facebook, beyond government regulation? If talent see Facebook as choking the potential of its subsidiaries, top workers might be hesistant to join or stay at the family of social networks.
India said on Monday that it is moving ahead with its plan to revise existing rules to regulate intermediaries — social media apps and others that rely on users to create their content — as they are causing “unimaginable disruption” to democracy.
In a legal document filed with the country’s apex Supreme Court, the Ministry of Electronics and Information Technology said it would formulate the rules to regulate intermediaries by January 15, 2020.
In the legal filing, the government department said the internet had “emerged as a potent tool to cause unimaginable disruption to the democratic polity.” Oversight of intermediaries, the ministry said, would help in addressing the “ever growing threats to individual rights and nation’s integrity, sovereignty and security.”
The Indian government published a draft of guidelines for consultation late last year. The proposed rules, which revise the 2011 laws, identified any service — social media or otherwise — that have more than 5 million users as intermediaries.
Government officials said at the time that modern rules were needed, otherwise circulation of false information and other misuse of internet platforms would continue to flourish.
The Monday filing comes as a response to an ongoing case in India filed by Facebook to prevent the government from forcing WhatsApp to introduce a system that would enable revealing the source of messages exchanged on the popular instant messaging platform, which counts India as its biggest market with more than 400 million users.
Some have suggested that social media platforms should require their users in India to link their accounts with Aadhaar — a government-issued, 12-digit biometric ID. More than 1.2 billion people in India have been enrolled in the system.
Facebook executives have argued that meeting such demands would require breaking the end-to-end encryption that WhatsApp users enjoy globally. The company executives have said that taking away the encryption would compromise the safety and privacy of its users. The Supreme Court will hear Facebook’s case on Tuesday.
India’s online population has ballooned in recent years. More than 600 million users in India are online today, according to industry estimates. The proliferation of low-cost Android handsets and access to low-cost mobile data in the nation have seen “more and more people in India become part of the internet and social media platforms.”
“On the one hand, technology has led to economic growth and societal development, on the other hand there has been an exponential rise in hate speech, fake news, public order, anti-national activities, defamatory postings, and other unlawful activities using Internet/social media platforms,” a lower court told the apex court earlier.
Bob Stutz has had a storied career with enterprise software companies including stints at Siebel Systems, SAP, Microsoft and Salesforce. He announced on Facebook last week that he’s leaving his job as head of the Salesforce Marketing Cloud and heading back to SAP as president of customer experience.
Bob Stutz Facebook announcement
Constellation Research founder and principal analyst Ray Wang says that Stutz has a reputation for taking companies to the next level. He helped put Microsoft CRM on the map (although it still had just 2.7% marketshare in 2018, according to Gartner) and he helped move the needle at Salesforce Marketing Cloud.
Bob Stutz, SAP’s new president of customer experience. Photo: Salesforce
“Stutz was the reason Salesforce could grow in the Marketing Cloud and analytics areas. He fixed a lot of the fundamental architectural and development issues at Salesforce, and he did most of the big work in the first 12 months. He got the acquisitions going, as well,” Wang told TechCrunch. He added, “SAP has a big portfolio from CallidusCloud to Hybris to Qualtrics to put together. Bob is the guy you bring in to take a team to the next level.”
Brent Leary, who is a long-time CRM industry watcher, says the move makes a lot of sense for SAP. “Having Bob return to head up their Customer Experience business is a huge win for SAP. He’s been everywhere, and everywhere he’s been was better for it. And going back to SAP at this particular time may be his biggest challenge, but he’s the right person for this particular challenge,” Leary said.
The move comes against the backdrop of lots of changes going on at the German software giant. Just last week, long-time CEO Bill McDermott announced he was stepping down, and that Jennifer Morgan and Christian Klein would be replacing him as co-CEOs. Earlier this year, the company saw a line of other long-time executives and board members head out the door including including SAP SuccessFactors COO Brigette McInnis-Day, Robert Enslin, president of its cloud business and a board member, CTO Björn Goerke and Bernd Leukert, a member of the executive board.
Having Stutz on board could help stabilize the situation somewhat, as he brings more than 25 years of solid software company experience to bear on the company.
Global retail e-commerce is expected to be a $25 trillion business this year, and today one of the companies that has built a set of tools to help larger enterprises to sell to consumers online has raised a large growth round to meet that demand. Commercetools, a German startup that provides a set of APIs that power e-commerce sales and related functions for large businesses, has raised $145 million (€130 million) in a growth round of funding led by Insight Partners, at a valuation that we understand from a close source is around $300 million.
The funding comes at the same time that commercetools is getting spun out by REWE, a German retail and tourist services giant that acquired the startup in 2015 for an undisclosed amount.
The route the company took after that is a not-totally-uncommon one for tech startups acquired by non-tech companies: commercetools had been acquired by REWE as part of a strategy to take some of its own e-commerce tech in-house, but commercetools had always continued to work with outside clients and has been growing at about 110% annually, CEO and co-founder Dirk Hoerig said in an interview.
Current companies include Audi, Bang & Olufsen, Carhartt, Yamaha and some very big names in retail products and services (including major telco/media brands in the USA that you will definitely know). Ultimately, the decision was taken to bring in outside funding and spin out the businesses as an independent startup once again to supercharge that growth. REWE will remain a significant shareholder with this deal.
Hoerig said that commercetools had raised only around $30 million in outside funding when it was a startup ahead of getting acquired.
Although e-commerce has grown over the last couple of years with slightly less momentum than in previous years given wider economic uncertainty, it continues to expand, and in that growth, we’ve seen a swing back to individual retail brands looking for ways of connecting more directly with customers outside of the third-party marketplaces (like Amazon) that have come to dominate how people spending money online.
That is giving a boost to those providing essentially non-tech businesses the tools to build e-commerce activity by offering “headless” tools that are attached to front-end systems designed by others.
Shopify — coincidentally, also backed by Insight when it was still a private company — focuses more on providing e-commerce tools by way of APIs to medium and smaller customers, and it has ballooned to some 800,000 customers. Commercetools, in contrast, focuses more on companies that typically generate revenues in excess of $100 million annually, Hoerig said.
Commercetools has no plans to expand to smaller companies — “We have no plan to compete against Shopify,” Hoerig said. Nor is there any strategy in place to extend into logistics, another important component of e-commerce services.
That’s not to say that commercetools doesn’t have a crowded field when it comes to competition, though. Hoerig noted that companies like SAP, Oracle and IBM are typical competitors and are more often already the incumbent provider to large enterprises. Then, there are others like Microsoft, in hot competition with Amazon for cloud customers, also expanding their commerce services for business. Companies typically make the change to replace them with something like commercetools, he said, when they decide they need a “more modern” approach.
In all (if that list alone wasn’t a strong enough hint), the wider market for e-commerce tools is very fragmented.
“Even SAP has only something like a 2% share,” he added.
Today, commercetools offers a range of services, starting at APIs to power the basics of webshops and mobile sites, along with IoT services (“machines buying from machines,” Hoerig noted), powering chatbots, the architecture for running marketplaces, social commerce services (for example, powering selling through Instagram), and augmented reality. It currently integrates with Adobe, Frontastic, Bloomreach and Magnolia.
Commercetools plans to use the funding to continue expanding its business in North America and other parts of the world, as well as to continue building up its B2B2B offering — that is, tools for businesses to sell to other businesses. This is an area that companies like Alibaba are very strong in (and Amazon has been also growing its business), and the idea is to provide tools to let companies sell on their own sites either as a complement to, or to replace, third-party marketplaces.
Another area where it will continue to figure where it can play better is in the development of better online-to-offline technology.
Richard Wells and Matt Gatto of Insight are both joining the board with this deal.
“With a strong track record of investing in retail software leaders, we are excited to have the opportunity to invest in commercetools and help them scale up internationally,” said Wells in a statement. “In our opinion commercetools represents the next wave of enterprise commerce software and has the potential to unlock powerful innovation and growth within the e-commerce sector.”
Pendo, the late stage startup that helps companies understand how customers are interacting with their apps, announced a $100 million Series E investment today on a valuation of $1 billion.
The round was led by Sapphire Ventures . Also participating were new investors General Atlantic and Tiger Global, and existing investors Battery Ventures, Meritech Capital, FirstMark, Geodesic Capital and Cross Creek. Pendo has now raised $206 million, according to the company.
Company CEO and co-founder Todd Olson says that one of the reasons they need so much money is they are defining a market, and the potential is quite large. “Honestly, we need to help realize the total market opportunity. I think what’s exciting about what we’ve seen in six years is that this problem of improving digital experiences is something that’s becoming top of mind for all businesses,” Olson said.
The company integrates with customer apps, capturing user behavior and feeding data back to product teams to help prioritize features and improve the user experience. In addition, the product provides ways to help those users either by walking them through different features, pointing out updates and new features or providing other notes. Developers can also ask for feedback to get direct input from users.
Olson says early on its customers were mostly other technology companies, but over time they have expanded into lots of other verticals including insurance, financial services and retail and these companies are seeing digital experience as increasingly important. “A lot of this money is going to help grow our go-to-market teams and our product teams to make sure we’re getting our message out there, and we’re helping companies deal with this transformation,” he says. Today, the company has over 1200 customers.
While he wouldn’t commit to going public, he did say it’s something the executive team certainly thinks about, and it and has started to put the structure in place to prepare should that time ever come. “This is certainly an option that we are considering, and we’re looking at ways in which to put us in a position to be able to do so, if and when the markets are good and we decide that’s the course we want to take.”
At age 27, Jordan Fudge is quietly making a splash in the VC world.
Fudge is the managing partner of Sinai Ventures, a multi-stage VC fund that manages $100 million and has more than 80 portfolio companies including Ro, Drivetime, Kapwing, and Luminary. His 2017 investment in Pinterest — a secondary shares deal from his prior firm that was rolled into Sinai when he spun out — will have returned the value of Sinai’s Fund I by itself once the lockup on shares expires next week.
Fudge and co-founder Eric Reiner, a Northwestern University classmate, hired staff in New York and San Francisco when Sinai launched in early 2018. Today, they’re centralizing the team in Los Angeles for its next fund, a bet on the rising momentum of the local startup ecosystem and their vision to be the city’s leading Series A and B firm.
Fudge and Reiner have intentionally stayed off the radar thus far, wanting to prove themselves first through a track record of investments.
A part-time film financier who also serves on the board of LGBT advocacy non-profit GLAAD, Fudge describes himself as an atypical VC firm founder, an edge he’s using to carve out his niche in a crowded VC landscape.
I spoke with Fudge to learn more about his strategy at Sinai and what led to him founding the firm. Here’s the transcript (edited for length and clarity):
Eric Peckham: Tell me the origin story here. How did Sinai Ventures get seeded?
Jordan Fudge: I was working for Eagle Advisors, a multi-billion dollar family office for one of the founders of SAP, focused on the tech sector across public markets, crypto, and eventually VC deals. Two years in, I pitched them on spinning out to focus on VC and they seeded Sinai with the private investments like Compass and Pinterest I had done already, plus a fresh fund to invest out of on my own. It was $100 million combined.
Here we go again. Western governments are once again dialling up their attack on end-to-end encryption — calling for either no e2e encryption or backdoored e2e encryption so platforms can be commanded to serve state agents with messaging data in “a readable and usable format”.
US attorney general William Barr, acting US homeland security secretary Kevin McAleenan, UK home secretary Priti Patel and Australia’s minister for home affairs, Peter Dutton, have co-signed an open letter to Facebook calling on the company to halt its plan to roll out e2e encryption across its suite of messaging products. Unless the company can ensure what they describe as “no reduction to user safety and without including a means for lawful access to the content of communications to protect our citizens”, per a draft of the letter obtained by BuzzFeed ahead of publication later today.
If platforms have e2e encryption a “means for lawful access” to the content of communications sums to a backdoor in the crypto.
Presumably along the lines of the ‘ghost protocol’ that UK spooks have been pushing for the past year. Aka an “exceptional access mechanism” that would require platforms CC’ing a state/law enforcement agent as a silent listener to eavesdrop on a conversation on warranted request.
Facebook -owned WhatsApp was one of a number of tech giants joining an international coalition of civic society organizations, security and policy experts condemning the proposal as utter folly earlier this year.
The group warned that demanding a special security hole in encryption for law enforcement risks everyone’s security by creating a vulnerability which could be exploited by hackers. Or indeed service providers themselves. But the age-old ‘there’s no such thing as a backdoor just for you’ warning appears to have fallen on deaf ears.
In their open letter to Facebook, the officials write: “Companies should not deliberately design their systems to preclude any form of access to content, even for preventing or investigating the most serious crimes. This puts our citizens and societies at risk by severely eroding a company’s ability to detect and respond to illegal content and activity, such as child sexual exploitation and abuse, terrorism, and foreign adversaries’ attempts to undermine democratic values and institutions, preventing the prosecution of offenders and safeguarding of victims. It also impedes law enforcement’s ability to investigate these and other serious crimes.”
Of course Facebook is not the only messaging company using e2e encryption but it’s in the governments’ crosshairs now on account of a plan to expand its use of e2e crypto — announced earlier this year, as part of a claimed ‘pivot to privacy’. And, well, on account of it having two billion+ users.
The officials claim in the letter that “much” of the investigative activity which is critical to protecting child safety and fighting terrorism “will no longer be possible if Facebook implements its proposals as planned”.
“Risks to public safety from Facebook’s proposals are exacerbated in the context of a single platform that would combine inaccessible messaging services with open profiles, providing unique routes for prospective offenders to identify and groom our children,” they warn, noting that the Facebook founder expressed his own concerns about finding “the right ways to protect both privacy and safety”.
In March Mark Zuckerberg also talked about building “the appropriate safety systems that stop bad actors as much as we possibly can within the limits of an encrypted service”.
Which could, if you’re cynically inclined, be read as Facebook dangling a carrot to governments — along the lines of: ‘We might be able to scratch your security itch, if your regulators don’t break up our business.’
Ironically enough the high profile intervention by officials risks derailing Facebook’s plan to unify the backends of its platforms — widely interpreted as a play to make it harder for regulators to act on competition concerns and break up Facebook’s business empire along messaging product lines: Facebook, WhatsApp, Instagram.
Or, well — alternative scenario — Facebook could choose to strip e2e crypto from WhatsApp. Which is currently the odd one out in its messaging suite on account of having proper crypto. Governments would sure be happy if it did that. But it’s the opposite of what Zuckerberg has said he’s planning.
The government is demanding backdoor access to the private communications of 1.5 billion people using #WhatsApp. If @Facebook agrees, it may be the largest overnight violation of privacy in history. https://t.co/qkxO1pJuUh
— Edward Snowden (@Snowden) October 3, 2019
Curiously the draft letter makes no mention of platform metadata. Which is not shielded by even WhatsApp’s e2e encryption. And thus can be extracted — via a warrant — in a readable format for legit investigative purposes. And let’s not forget US spooks are more than happy to kill people based on metadata.
Instead the officials write: “We must find a way to balance the need to secure data with public safety and the need for law enforcement to access the information they need to safeguard the public, investigate crimes, and prevent future criminal activity. Not doing so hinders our law enforcement agencies’ ability to stop criminals and abusers in their tracks.”
The debate is being framed by spooks and security ministers as all about content.
Yet a scrambled single Facebook backend would undoubtedly yield vastly more metadata, and higher resolution metadata, on account of triangulation across the services. So it really is a curious omission.
We’ve reached out to Facebook for its reaction to the letter. BuzzFeed reports that it sent a statement in which it strongly opposes government attempts to build backdoors. So if Facebook holds firm to that stance it looks like another big crypto fight could well be brewing. A la Apple vs the FBI.
In another announcement being made today, the UK and the US have signed a “world first” Bilateral Data Access Agreement that’s intended to greatly speed up electronic data access requests by their respective law enforcement agencies.
The agreement is intended to replace the current process which sees requests for communications data from law enforcement agencies submitted and approved by central governments via a process called Mutual Legal Assistance — which can take months or even years.
Once up and running, the claim is the new arrangement will see the process reduced to a matter of weeks or even days.
The agreement will work reciprocally with the UK getting data from US tech firms, and the US getting access from UK communication service providers (via a US court order).
Any request for data must be made under an authorisation in accordance with the legislation of the country making the request and will be subject to independent oversight or review by a court, judge, magistrate or other independent authority, per the announcement.
The UK also says specifically that it has obtained “assurances” which are in line with the government’s continued opposition to the death penalty in all circumstances. Which is only mildly reassuring given the home secretary’s previous views on the topic.
The announcement also makes a point of noting the data access agreement does not change anything about how companies can use encryption — nor prevent them from encrypting data.
Fyle, a Bangalore-headquartered startup that operates an expense management platform, has extended its previous financing round to add $4.5 million of new investment as it looks to court more clients in overseas markets.
The additional $4.5 million tranche of investment was led by U.S.-based hedge fund Steadview Capital, the startup said. Tiger Global, Freshworks, and Pravega Ventures also participated in the round. The new tranche of investment, dubbed Series A1, means that the three-and-a-half-year old startup has raised $8.7 million as part of its Series A financing round, and $10.5 million to date.
The SaaS startup offers an expense management platform that makes it easier for employees of a firm to report their business expenses. The eponymous service supports a range of popular email providers including G Suite and Office 365, and uses a proprietary technology to scan and fetch details from emails, Yash Madhusudhan, co-founder and CEO of Fyle, demonstrated to TechCrunch last week.
A user, for instance, could open a flight ticket email and click on Fyle’s Chrome extension to fetch all details and report the expense in a single-click in real-time. As part of today’s announcement, Madhusudhan unveiled an integration with WhatsApp . Users will now be able to take pictures of their tickets and other things and forward it to Fyle, which will quickly scan and report expense filings for them.
These integrations come in handy to users. “80%-90% of a user’s spending patterns land on their email and messaging clients. And traditionally it has been a pain point for them to get done with their expense filings. So we built a platform that looks at the challenges faced by them. At the same time, our platform understands frauds and works with a company’s compliances and policies to ensure that the filings are legitimate,” he said.
“Every company today could make use of an intelligent expense platform like Fyle. Major giants already subscribe to ERP services that offer similar capabilities as part of their offerings. But as a company or startup grows beyond 50 to 100 people, it becomes tedious to manage expense filings,” he added.
Fyle maintains a web application and a mobile app, and users are free to use them. But the rationale behind introducing integrations with popular services is to make it easier than ever for them to report filings. The startup retains its algorithms each month to improve their scanning abilities. “The idea is to extend expense filing to a service that people already use,” he said.
Until late last year, Fyle was serving customers in India. Earlier this year, it began searching for clients outside the nation. “Our philosophy was if we are able to sell in India remotely and get people to use the product without any training, we should be able to replicate this in any part of the world,” he said.
And that bet has worked. Fyle has amassed more than 300 clients, more than 250 of which are from outside of India. Today, the startup says it has customers in 17 nations including the U.S., and the UK. Furthermore, Fyle’s revenue has grown by five times in the last five months, said Madhusudhan, without disclosing the exact figures.
To accelerate its momentum, the startup is today also launching an enterprise version of Fyle that will serve the needs of major companies. The enterprise version supports a range of additional security features such as IP restriction and single sign-in option.
Fyle will use the new capital to develop more product solutions and integrations and expand its footprint in international markets, Madhusudhan said. The startup, which just recently set up its sales and marketing team would also expand the headcount, he said.
Moving forward, Madhusudhan said the startup would also explore tie-ups with ERP providers and other ways to extend the reach of Fyle.
In a statement, Ravi Mehta, MD at Steadview Capital, said, “intelligent and automated systems will empower businesses to be more efficient in the coming decade. We are excited to partner with Fyle to transform one of the core business processes of expense management through intelligence and automation.”
WhatsApp users may soon get the ability to have their messages self-destruct after a set period of time. That’s according to a highly-reliable tipster who spotted the feature combing through the code of a beta version of the app.
Twitter user WABetaInfo said on Tuesday that the recently released public beta of WhatsApp for Android — dubbed v2.19.275 — includes an optional feature that would allow users to set their messages to self-destruct.
The ability to have messages disappear forever after a fixed amount of time could come in handy to users who share sensitive information with friends and colleagues on the app. It’s one of the most popular features on instant messaging client Telegram, for instance.
Telegram offers a “secret chat” feature wherein users can engage with each other and their messages disappear from their devices after a set amount of time. The messaging platform says it does not store the text on its servers and restricts users from forwarding the messages, or take a screenshot of the conversation, to ensure there is “no trail” of the texts.
“All secret chats in Telegram are device-specific and are not part of the Telegram cloud. This means you can only access messages in a secret chat from their device of origin. They are safe for as long as your device is safe in your pocket,” it explains.
Facebook, which owns WhatsApp, also offers a “secret chat” feature on its Messenger app. But there, the secret chat feature only encrypts end-to-end messages and media content shared between two users. On WhatsApp, messages between users are end-to-end encrypted by default.
Currently, WhatsApp is testing the feature in a group setting that supports participation from multiple individuals. Messages could be set to self-destruct as soon as five seconds after they have been sent and as late as an hour. Additionally, an image shared by WABetaInfo shows that group administrators will have the ability to prevent other participants in the group from texting.
Some third-party WhatsApp apps have allowed self-destructing messages feature in the past. But in recent years, WhatsApp has started to crack down on third-party services to ensure safety of its users.
It remains unclear how soon — if ever — WhatsApp plans to roll out this feature to all its users. We have reached out to them for comment.
The company, which was founded back in 2016, has built a cross-platform chatbot to automate candidate support and increase efficiency around hiring by applying machine learning and natural language processing for what it dubs “talent interaction”.
The target customers are large enterprises with Jobpal offering the product as a managed service.
For these employers the pitch is increased efficiency by being able to rapidly respond to and engage potential job applicants whenever they’re reaching out for more info via an always-on channel (i.e. the chatbot) which is primed to respond to common questions.
Candidates can also apply for vacancies via the Jobpal chatbot by answering a series of questions in the familiar messaging thread format. Jobpal says its chatbot can also be used to screen applicants’ CVs and recommend the most promising candidates.
It takes care of the logistical legwork of scheduling interview appointments — leaving HR departments with more time to spend on more meaningful portions of the recruitment process.
Co-founder and CEO Luc Dudler tells TechCrunch it has more than 30 enterprise clients at this stage, generating “thousands of conversations” per day. Customers he name checks include the likes of Airbus, Deutsche Telekom and McDonald’s.
The software works on popular messaging platforms including WhatsApp, Facebook Messenger, WeChat and SMS, and is available in 15+ languages — though Jobpal confirms the German market remains its largest so far.
“The sheer volume of interest and number of questions enterprises receive from prospective talent is often difficult to deal with, which results in a suboptimal experience and frustrated candidates. Conversational interfaces and Natural Language Processing enable us to deliver a candidate-centric experience and increase the efficiency of the recruiting function,” says Dudler, arguing that the recruitment landscape has become “candidate first” — putting the onus on enterprises to get the “candidate experience” right.
“This technology allows employers to engage with candidates when they want and on the platforms they use, such as WhatsApp. This gives control to the candidates, meaning they can get answers in a matter of seconds, instead of days or weeks. For Internal HR teams, they can spend time more time finding the best talent, as jobpal automates tedious and time-consuming tasks, allowing recruitment teams to focus on more value-add tasks.”
“We focus mainly on communication and engagement, and our customers only do in-house recruitment. We don’t work with agencies,” he adds.
Jobpal points to increased engagement from use of its chatbot — claiming companies are seeing more queries from jobseekers than they used to receive emails, as well as arguing the “low-friction” approach is accessible and convenient and leads to increased conversion rates.
With any automated process there could be a risk of biased and unequitable outcomes — depending on the criteria the chatbot is using to sift candidates. Although Jobpal says it’s not using algorithms to take recruitment decisions, so the biggest bias risk looks to be in the hands of the employers setting the criteria.
Misinterpretation of candidates’ queries based on the technology failing to understand what’s being asked could potentially lead to responses that disproportionately disadvantage certain applicants. Though Jobpal says queries that are too complex are routed to a human to deal with.
“We get a lot of queries about the application process/deadline/evaluation, qualifications needed, supporting documents, working hours, growth options and salary that Jobpal is designed to deal with,” says Dudler, of Jobpal candidate users. “Our chatbots don’t answer questions that are too personal, too obscure or anything non-recruitment related such as customer service queries.”
“Jobpal stores the query data but it’s de-associated from the candidate data. This data is used to train AI models which supports general communication as well as company-specific chatbots. We don’t mine or sell candidate profiles, and we don’t do algorithmic decision making in the recruitment process,” he adds.
The software integrates with a number of enterprise Human Capital Management suites at this point, including SAP SuccessFactors, Workday, Oracle (formerly Taleo), Avature and Smartrecruiters.
The seed round follows what Dudler couches as “a huge increase in demand” — with the team spying an opportunity for further growth.
“We’ll be investing in product development and tripling our headcount in the next 12 months. Specifically, we are looking to recruit a VP of marketing,” he tells us.
Chatbots still strike many consumers as robotic — and even irritating — but the technology has nonetheless been flourishing in the customer support and recruitment space for several years now. Business areas where there’s no shortage of repetitive tasks for automating. And where being able to offer some level of service 24/7 is a major plus.
On the hiring front, the power imbalance between employer and job applicant might even make interfacing with a bot more appealing for a candidate than the pressure of talking to an actual human who already works at the target employer.
For certain types of jobs employee churn can also be incredibly high — making hiring essentially a neverending task. Again, chatbots are a natural fit in such a scenario; being scalable, they take the strain out of repeat and formulaic conversations — with the promise of a smooth pipeline of candidate conversions.
Given all that there’s now no shortage of recruitment chatbots touting automated support for HR departments. At the same time there’s unlikely to ever be a one-size fits all approach to the hiring problem. It’s a multifaceted, multi-dimensional challenge on account of the spectrum of work that exists and jobs to be filled, and indeed the human variety of jobseekers.
This is why there are so many different ‘flavors’ and ‘styles’ of chatbots offering to assist, some with algorithmic matching, and/or targeting different types of employers and/or jobs/industry (or indeed jobseekers; passive vs active) — others just super basic tools (such as the Jobo bot which alerts jobseekers to vacancies matching criteria they’ve specified).
Some more sophisticated chatbot examples include MeetFrank (passive job matching); Mya (for recruiting agencies and massive enterprises, including for shift filling); Vahan (low skilled, blue-collar job-matching for high attrition delivery jobs); and AllyO (conversational AI for “end-to-end HR management”).
With so much chatbot competition pledging to ‘streamline recruitment’ by applying automation to the hiring task, employers might be forgiven for thinking they have a fresh choice headache on their hands.
But for startups applying AI technology to ‘fix recruitment’ by making talk cheap (and structured), the patchwork of players and approaches still in play suggests there’s ongoing opportunity to grab a slice of a truly massive market.
Digi-Prex is a seven-month old startup that runs an eponymous online subscription pharmacy in Hyderabad and serves patients with chronic diseases. Patients share their prescription with Digi-Prex through WhatsApp and the startup’s workers then deliver the medication to them on a recurring cycle.
Delivery is not the only thing Digi-Prex is trying to provide. It helps patients better track when they need a new supply of medicine, and checks if they are seeing improvements. The startup has amassed thousands of customers in Hyderabad, Samarth Sindhi, founder of Digi-Prex, told TechCrunch in an interview.
Digi-Prex just closed its seed round from a range of highly-influential VC firms. It’s also one of the largest seed financing rounds for an Indian startup.
“Instead of trying to acquire customers online, we work with physicians and pharmacies to serve customers,” said Sindhi, an alum of Brown University who worked with a healthcare firm in the U.S. before returning to India. The startup shares some margin with physicians and pharmacies, but more importantly, it says this arrangement works for everyone because it is able to serve customers who are living at distant neighborhoods.
Digi-Prex works directly with medicine distributors to secure supplies at lower costs. It then undercuts the pricing of over-the-top counters, providing medicines to its customers at discounted rates.
Sindhi said the startup will use the fresh capital to expand its business to 10 cities in India, and find ways to be more useful to the patients. Some of the things that Digi-Prex is working on includes providing patients with access to better physicians and offering them more information about their disease.
It’s not surprising why Digi-Prex is using WhatsApp as a distribution platform. “When I returned to India, I was fascinated by how nobody was texting anymore. Everyone was doing everything on WhatsApp,” he said.
WhatsApp, which is already the most popular app in India, is increasingly finding business applications in the country. Vahan, another Y Combinator-backed startup, is using WhatsApp to help white-collar workers find jobs with logistics companies.
Brands are often left to act like the person who searches for their keys under the streetlight simply because that is where the light is better. However, when brand marketers focus only on engaging with the customers they can more easily see — where online activity is visible — they risk overlooking the valuable opportunities hiding in darker spaces.
One of the most valuable of those dark web spaces is in the realm of what we call “microbrowsers” — the messaging apps like Slack, WhatsApp and WeChat. We call them microbrowsers because they display miniature previews of web pages inside private message discussions. These previews, also known as ‘unfurled links’, create your brand’s first impression and play a big role in whether or not the person on the receiving end will click through to buy, or read or engage.
Google Analytics lumps all microbrowser-generated web traffic into the ‘Direct’ bucket, which we often just ignore. This means we look for customers where we know how to create campaigns easily — on Facebook, Twitter and Instagram, and buying Google Ad Words.
And as more people rely more heavily on messaging apps for primary communication, these link previews from microbrowsers are becoming the leading segment of your direct traffic visitors. In Cloudinary’s 2019 State of Visual Media Report, which drew on data from more than 700 customers and 200 billion transactions, we found that 77% of link sharing in Slack occurs during working hours and that the vast majority of the click-throughs are reported as ‘direct’ traffic. The rise of microbrowsers gives us an opportunity to engage and attract customers through word of mouth discussions.
The good news is that the ‘leads’ that microbrowsers send to your brand site are usually highly qualified and close to the bottom of the traditional sales pipeline funnel. When consumers arrive on your site they are often ready and eager to buy (or read, view and listen to your content).
Whether it be for sneakers, tickets to a concert, a birthday gift idea, or an article to read — a trusted peer recommendation typically happens in that fleeting moment when the appetite to buy is right now. That isn’t just valuable, it’s the holy freaking grail!
The way to get the most value from microbrowser traffic is by helping along this peer influencing that happens in the dark. By creating compelling, informative links with images, video and text information specifically for microbrowsers, you increase the likelihood that peer-to-peer recommendations in groups convert into sales and reads.
What follows are some top tips to ensure that the links unfurling within microbrowsers have the greatest impact.
First, remember the golden rule: your audience is human. When creating content for microbrowsers, design it for humans, not machines.
Running a payments business in India is not cheap. Just ask Paytm . One of India’s largest payment companies reported a net loss of Rs 3959 crore ($549 million) for the financial year that ended in March, up 165% over 1490 crore ($206 million) in the same period last year.
During the same period, the company’s revenue rose to Rs 3232 crore ($448 million), compared to Rs 3052 crore ($423 million) in the year before. The firm’s debt also surged to Rs 695 crore ($96 million), One97 Communications, the parent firm of Paytm, told investors in its annual report.
One97 Communications also runs an e-commerce business, which recently raised money from eBay, and Paytm Money, that runs mutual funds business. On a consolidated basis, the 9-year-old firm reported an annual loss of Rs 4217.20 crore ($584 million), up from Rs 1604.34 crore ($222 million) from the year before.
Indian news outlet BloombergQuint first reported (paywalled) the financial performance of Paytm.
The loss should worry Paytm, whose CEO Vijay Shekhar Sharma said in a conference last week that the firm would begin to work on going public in the next 22 to 24 months. The level of competition that Paytm faces today is only about to increase in the coming future, and unlike earlier, the Indian firm is not facing off financially weaker local rivals.
Paytm, which has raised over $2 billion to date from a range of investors including SoftBank, Alibaba, and Berkshire Hathaway, continues to be the largest mobile wallet app provider in India, but increasingly users are moving to government-backed UPI payments infrastructure. In UPI land, Paytm competes with Flipkart’s PhonePe and Google Pay, both of which are heavily-backed.
As of July, both PhonePe and Google Pay commanded a bigger market share across UPI apps than Paytm.
Also in UPI land, you don’t make money on each transaction. So lately, every payments firm in India, including Paytm, has expanded it offering to include financial services such as a credit card, or loan, or insurance.
In many ways, this has created a level playing field for payment firms that did not dominate the wallet business.
In a statement, Paytm said it has been investing $1 billion per year for the last two years to “expand payments ecosystem in our country.” The company plans to invest a further $3 billion in the next two years.
“We believe India is at the inflection point of digital payments and Paytm’s sole focus is towards solving the merchant payments and offering them financial services. We will invest Rs 20,000 crore ($2.7 billion) in the next two years towards achieving this,” a company spokesperson said.
The biggest challenge for Paytm and other UPI payment apps has yet to emerge. Before the end of this year, WhatsApp, which has over 400 million users in India, plans to offer UPI payment option to all its years in the coming month.