Daily Archives: October 23, 2020

News: Calling Brussels VCs: Be featured in The Great TechCrunch Survey of European VC

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe, and their cities. Our <a href=”https://forms.gle/k4Ji2Ch7zdrn7o2p6”>survey of VCs in Brussels will capture how the city is faring, and what changes are being wrought amongst investors by the coronavirus pandemic. (Please note, if you have filled the survey out already,

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe, and their cities.

Our <a href=”https://forms.gle/k4Ji2Ch7zdrn7o2p6”>survey of VCs in Brussels will capture how the city is faring, and what changes are being wrought amongst investors by the coronavirus pandemic. (Please note, if you have filled the survey out already, there is no need to do it again).

We’d like to know how Brussels’ startup scene is evolving, how the tech sector is being impacted by COVID-19, and, generally, how your thinking will evolve from here.

Our survey will only be about investors, and only the contributions of VC investors will be included. More than one partner is welcome to fill out the survey.

The shortlist of questions will require only brief responses, but the more you can add, the better.

You can fill out the survey here.

Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.

What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?

This survey is part of a broader series of surveys we’re doing to help founders find the right investors.

https://techcrunch.com/extra-crunch/investor-surveys/

For example, here is the recent survey of London.

You are not in Brussels, but would like to take part? Or you are in another part of the country? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting a call out to your city next anyway! And we will use the data for future surveys on vertical topics.

The survey is covering almost every European country on the continent of Europe (not just EU members, btw), so just look for your country and city on the survey and please participate (if you’re a venture capital investor).

Thank you for participating. If you have questions you can email mike@techcrunch.com

News: Here’s how fast a few dozen startups grew in Q3 2020

Earlier this week I asked startups to share their Q3 growth metrics and whether they were performing ahead of behind of their yearly goals. Lots of companies responded. More than I could have anticipated, frankly. Instead of merely giving me a few data points to learn from, The Exchange wound up collecting sheafs of interesting

Earlier this week I asked startups to share their Q3 growth metrics and whether they were performing ahead of behind of their yearly goals.

Lots of companies responded. More than I could have anticipated, frankly. Instead of merely giving me a few data points to learn from, The Exchange wound up collecting sheafs of interesting data from upstart companies with big Q3 performance.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Naturally, the startups that reached out were the companies doing the best. I did not receive a single reply that described no growth, though a handful of respondents noted that they were behind in their plans.

Regardless, the dataset that came together felt worthy of sharing for its specificity and breadth. And so other startup founders can learn from how some of their peer group are performing. (Kidding.)

Let’s get into the data, which has been segmented into buckets covering fintech, software and SaaS, startups focused on developers or security and a final group that includes D2C and fertility startups, among others.

Q3 performance

Obviously, some of the following startups could land in several different groups. Don’t worry about it! The categories are relaxed. We’re here to have fun, not split hairs!

Fintech

  • Numerated: According to Numerated CEO Dan O’Malley, his startup that helps companies more quickly access banking products had a big Q3. “Revenue for the first three quarters of 2020 is 11X our origination 2020 plan, and 18X versus the same period in 2019,” he said in an email. What’s driving growth? Bank digitization, O’Malley says, which has “been forced to happen rapidly and dramatically” in 2020.
  • BlueVineBlueVine does banking services for SMBs; think things like checking accounts, loans and payments. The company is having a big year, sharing with TechCrunch via email that has expanded its customer base “by 660% from Q1 2020 to” this week. That’s not a revenue metric, and it’s not Q3 specific, but as both Numerated and BlueVine cited the PPP program as a growth driver, it felt worthy of inclusion.
  • Harvest Platform: A consumer-focused fintech, Harvest helps folks recover fees, track their net worth and bank. In an email, Harvest said it “grew well over 1000%+” in the third quarter and is “ahead of its 2020 plan” thanks to more folks signing up for its service and what a representative described as “economic tailwinds.” The savings and investing boom continues, it appears.

Software/SaaS

  • Uniphore: Uniphore provides AI-based conversational software products to other companies used for chatting to customers and security purposes. According to Uniphore CEO Umesh Sachdev, the company grew “320% [year-over-year] in our Q2 FY21 (July-sept 2020),” or a period that matches the calendar Q3 2020. Per the executive, that result was “on par with [its] plan.” Given that growth rate, is Uniphore a seed-stage upstart? Er, no, it raised a $51 million Series C in 2019. That makes its growth metrics rather impressive as its implied revenue base from which it grew so quickly this year is larger than we’d expect from younger companies.
  • Text Request: A SMS service for SMBs, Text Request grew loads in Q3, telling TechCrunch that it “billed 6x more than we did in 2019’s Q3,” far ahead of its target for doubling billings. A company director said that while “customer acquisition was roughly on par with expectations,” the value of those customers greatly expanded. I dug into the numbers and was told that the 6x figure is for total dollars billed in Q3 2020 inclusive of recurring and non-recurring incomes. For just the company’s recurring software product, growth was a healthy 56% in Q3.
  • Notarize: Digital notarization startup Notarize — Boston-based, most recently raised a $35 million Series C — is way ahead of where it expected to be, with a VP at the company telling TechCrunch that during “the first week of lockdowns, Notarize’s sales team got 3,000+ inquiries,” which it managed to turn into revenues. The same person added that the startup is “probably 5x ahead of [its] original 2020 plan,” with the substance measured being annual recurring revenue, or ARR. We’d love some hard numbers as well, but that growth pace is spicy. (Notarize also announced it grew 400% from March to July, earlier this year.)
  • BurnRate.io: Acceleprise-backed Burnrate.io hasn’t raised a lot of money, but that hasn’t stopped it from growing quickly. According to co-founder and CEO Robert McLaws, BurnRate “started selling in Q4 of last year” so it did not have a pure Q3 2019 v. Q3 2020 metric to share. But the company managed to grow 3.3x from Q4 2019 to Q3 2020 per the executive, which is still great. BurnRate provides software that helps startups plan and forecast, with the company telling TechCrunch with yearly planning season coming up, it expects sales to keep growing.
  • Gravy AnalyticsLocation data as a service! That’s what Gravy Analytics appears to do and apparently it’s been a good run thus far in 2020. The company told TechCrunch that it has seen sales rise 80% year-to-date over 2019. This is a bit outside our Q3 scope as it’s more 2020 data, but we can be generous and still include it.
  • ChartHopTechCrunch covered ChartHop earlier this year when it raised $5 million in a round led by Andreessen Horowitz. A number of other investors took part, including Cowboy Ventures and Flybridge Capital. Per our coverage, ChartHop is a “new type of HR software that brings all the different people data together in one place.” The model is working well, with the startup reporting that since its February seed round — that $5 million event — it has grown 10x. The company recently raised a Series A. Per a rep via email, ChartHop is “on-target” for its pre-pandemic business plan, but “far ahead” of what it expected at the start of the pandemic.
  • Credo: Credo is a marketplace for digital marketing talent. It’s actually a company I’ve known for a long-time, thanks to founder John Doherty. According to Doherty, Credo has “grown revenue 50% since June, while only minimally increasing burn.” Very good.
  • Canva: Breaking my own rules about only including financial data, I’m including Canva because it sent over strong product data that implies strong revenue growth. Per the company, Canva’s online design service has seen “increased growth over both Q2 and Q3, with an increase of 10 million users in Q3 alone (up from 30 million users in June).” 33% user growth from 30 to 40 million is impressive. And, the company added that it saw more team-based usage since the start of the pandemic, which we presume implies the buying of more expensive, group subscriptions. Next time real revenue, please, but this was still interesting.

Developer/Security

News: Google removes 3 Android apps for children, with 20M+ downloads between them, over data collection violations

When it comes to apps, Android leads the pack with nearly 3 million apps in its official Google Play store. The sheer volume also means that sometimes iffy apps slip through the cracks. Researchers at the International Digital Accountability Council (IDAC), a non-profit watchdog based out of Boston, found that a trio of popular and

When it comes to apps, Android leads the pack with nearly 3 million apps in its official Google Play store. The sheer volume also means that sometimes iffy apps slip through the cracks.

Researchers at the International Digital Accountability Council (IDAC), a non-profit watchdog based out of Boston, found that a trio of popular and seemingly innocent-looking apps aimed at younger users were recently found to be violating Google’s data collection policies, potentially accessing users’ Android ID and AAID (Android Advertising ID) numbers, with the data leakage potentially connected to the apps being built using SDKs from Unity, Umeng, and Appodeal.

Collectively, the apps had more than 20 million downloads between them.

The three apps in question — Princess Salon​, Number Coloring and ​Cats & Cosplay — have now been removed from the Google Play app store, as you can see in the links above. Google confirmed to us that it removed the apps after IDAC brought the violations to its attention.

“We can confirm that the apps referenced in the report were removed,” said a Google spokesperson. “Whenever we find an app that violates our policies, we take action.”

The violations point to a wider concern with the three publishers’ approach to adhering to data protection policies. “The practices we observed in our research raised serious concerns about data practices within these apps,” said IDAC president Quentin Palfrey.

The incident is being highlighted at a time when a lot of attention is being focused on Google and the size of its operation. Earlier this week, the US Department of Justice and 11 States sued the company, accusing it of monopolistic and anticompetitive behavior in search and search advertising.

To be clear, the app violations here are not related to search, but they underscore the scale of Google’s operation, and how even small oversights can lead to tens of millions of users being affected. They also serve as a reminder of the challenges of proactively policing individual violations on such a scale, and that those challenges can land in a particularly risky area: how minors use apps.

At least in the cases of two of the publishers, Creative APPS and Libii Tech (whose apps are built around the cast of characters illustrated at the top of this story), other apps are still live. And it also appears that versions of the apps are also still downloadable through APK sites (like this one). There are also versions on iOS (for example here), but Palfrey said it had not assessed iOS versions so it’s not clear if they are similarly leaking data.

The violation in this case is complex but is an example of one of the ways that users can unknowingly be tracked through apps.

Pointing to the behind-the-scenes activity and data processing that gets loaded into innocent-looking apps, IDAC highlighted three SDKs in particular used by the app developers: the Unity 3D and game engine, Umeng (an Alibaba-owned analytics provider known as the “Flurry of China” that some have described also as an adware provider), and Appodeal (another app monetization and analytics provider) — as the source of the issues.

Palfrey explained that the problem lies in how the data that the apps were able to access by way of the SDKs could be linked up with other kinds of data, such as geolocation information. “If AAID information is transmitted in tandem with a persistent identifier [such as Android ID] it’s possible for the protection measures that Google puts in place for privacy protection to be bridged,” he said.

IDAC did not specify the violations in all of the SDKs, but noted in one example that certain versions of Unity’s SDK were collecting both the user’s AAID and Android ID simultaneously, and that could have allowed developers “to bypass privacy controls and track users over time and across devices.”

IDAC describes the AAID as “the passport for aggregating all of the data about a user in one place.” It lets advertisers target ads to users based on signals for preferences that a user might have. The AAID can be reset by users. However, if an SDK is also providing a link to a users Android ID, which is a static number, it starts to create a “bridge” to identify and track a user.

Palfrey would not get too specific on whether it could determine how much data was actually drawn as a result of the violations that it identified, but Google said that it was continuing to work on partnerships and procedures to catch similar (intentional or otherwise) bad actors.

“One example of the work we are doing here is the Families ad certification program, which we announced in 2019),” said the spokesperson. “For apps that wish to serve ads in kids and families apps, we ask them to use only ad SDKs that have self-certified compliance with kids/families policies. We also require that apps that solely target children not contain any APIs or SDKs that are not approved for use in child-directed services.”

IDAC, which was launched in April 2020 as a spinoff of the Future of Privacy Forum, has also carried out investigations into data privacy violations on fertility apps and Covid-19 trackers, and earlier this week it also published findings on data leakage from an older version of Twitter’s MoPub SDK affecting millions of users.

News: Huawei reports slowing growth as its operations “face significant challenges”

Huawei announced earnings results today showing that its growth has slowed significantly this year as the Chinese telecom equipment and smartphone giant said its “production and operations face significant challenges.” While Huawei did not specify trade restrictions in its brief announcement, the company has been hit with a series of commercial trade restrictions by the

Huawei announced earnings results today showing that its growth has slowed significantly this year as the Chinese telecom equipment and smartphone giant said its “production and operations face significant challenges.”

While Huawei did not specify trade restrictions in its brief announcement, the company has been hit with a series of commercial trade restrictions by the U.S. government. The full impact of those policies haven’t been realized yet, because U.S. government has granted Huawei several waivers, including one that will delay the implementation of a ban on commercial trade with Huawei and ZTE until May 2021.

During the first three quarters of 2020, the Chinese telecoms and smartphone giant reported revenue of 671.3 billion yuan (about USD $100.7 billion), an increase of 9.9% year-over-year, with a profit margin of 8%. The company said those results “basically met expectations,” but it represents a huge drop from its performance during the same period last year, when Huawei reported 24.4% growth with a profit margin of 8.7%.

Huawei is a privately-held company and its announcement did not break down its results in terms of smartphone or telecoms equipment sales, or other detail.

The company wrote that “as the world grapples with COVID-19, Huawei’s global supply chain is being put under pressure and its production and operations face significant challenges. The company continues to do its best to find solutions, survive and forge forward, and fulfill its obligations to customers and suppliers.”

Other U.S. restrictions include one that would ban Huawei from using U.S. software and hardware in certain semiconductor processes, forcing it to find other sources for chips.

In addition to the U.S., Huawei is also facing scrutiny by other countries, including the United Kingdom, which is planning to implement a new poicy that will bar telecoms from buying new 5G equipment from Huawei to ZTE and require them to remove any parts from those companies that’s already been installed in UK 5G networks by 2027.

Replacing Huawei equipment also presents costly challenges for telecoms, because Huawei is one of the biggest suppliers in the world. Last month, the U.S. Federal Communications Commission said it would cost $1.837 billion to replace Huawei and ZTE networking equipment, with rural telecom networks facing the most financial pressure.

But 2020 has had a few bright spots for Huawei. In July, a report from Canalys found that Huawei overtook Samsung as the leader in global smartphone shipments during the second quarter of 2020, a major milestone because it marked the the first time in nine years that Apple and Samsung didn’t take the top spot on Canalys’ charts. This was partly because smartphone shipments in general have been hurt during the COVID-19 pandemic, but Huawei was helped by sales within China, its domestic market.

News: Nordic challenger bank Lunar raises €40M Series C, plans to enter the ‘buy now, pay later’ space

Lunar, the Nordic challenger bank that started out life as a personal finance manager app (PFM) but acquired a full banking license in 2019, has raised €40 million in Series C funding from existing investors. The injection of capital follows a €20 million Series B disclosed in April this year and comes on the back

Lunar, the Nordic challenger bank that started out life as a personal finance manager app (PFM) but acquired a full banking license in 2019, has raised €40 million in Series C funding from existing investors.

The injection of capital follows a €20 million Series B disclosed in April this year and comes on the back of Lunar rolling out Pro paid-for subscriptions — similar to a number of other challenger banks in Europe — personal consumer loans, and the launch of business bank accounts in August.

The latter appears to have been an instant success, perhaps proof there is — like in the U.K. — pent up demand for more accessible banking for sole traders. Just months since launching in Denmark, Lunar Business claims to have signed up more than 50% of all newly founded sole trader businesses in the country.

I’m also told that Lunar has seen “best-in-class” user engagement with users spending €1,100 per month versus what the bank says is a €212 EU average for card transactions. Overall, the bank has 5,000 business users and 200,000 private users across Denmark, Sweden and Norway.

Meanwhile — and most noteworthy — after launching its first consumer lending products on its own balance sheet, Lunar has set its sights on the “buy now, pay later” market, therefore theoretically encroaching on $10.65 billion valued Klarna, and Affirm in the U.S. which just filed to go public. Other giants in the BNPL space also include PayPal.

Lunar founder and CEO Ken Villum Klausen says the “schizophrenic” Nordic banking market is the reason why the challenger is launching BNPL. “It’s the most profitable banking landscape in the world, but also the most defensive, with least competition from the outside,” he says. “This means that the traditional banking customer is buying all their financial products from their bank”.

It is within this context that Lunar’s BNPL products are built as “post-purchase,” where Lunar will prompt its users after they have bought something (not dissimilar to Curve’s planned credit offering). For example, if you were to buy a new television, the app will ask if you want to split the purchase into instalments. “This does not require merchant agreements etc, and will work on all transactions both retail and e-commerce,” explains Klausen.

“We do not view Klarna as a direct competitor as they are not in the Nordic clearing system,” he adds. “Hence, you cannot pay your bills, get your salary and use it for daily banking. Klarna is enormous in Sweden, but relatively small in Denmark, Norway and Finland”.

In total, Lunar has raised €104 million from investors including Seed Capital, Greyhound Capital, Socii Capital and Chr. Augustinus Fabrikker. The challenger has offices in Aarhus, Copenhagen, Stockholm and Oslo, with a headcount of more than 180 employees. It plans to launch its banking app in Finland in the first half of 2021.

News: France rebrands contact-tracing app in an effort to boost downloads

Don’t call it StopCovid anymore. France’s contact-tracing app has been updated and is now called TousAntiCovid, which means ‘everyone against Covid’. The French government is trying to pivot so that it’s no longer a contact-tracing app — or at least not just a contact-tracing app. Right now, TousAntiCovid appears to be a rebranding more than

Don’t call it StopCovid anymore. France’s contact-tracing app has been updated and is now called TousAntiCovid, which means ‘everyone against Covid’. The French government is trying to pivot so that it’s no longer a contact-tracing app — or at least not just a contact-tracing app.

Right now, TousAntiCovid appears to be a rebranding more than a pivot. There’s a new name and some changes in the user interface. But the core feature of the app remains unchanged.

StopCovid hasn’t been a success. First, it’s still unclear whether contact-tracing apps are a useful tool to alert people who have been interacting with someone who has been diagnosed COVID-19-positive. Second, even when you take that into consideration, the app never really took off.

Back in June, the French government gave us an update on StopCovid three weeks after its launch. 1.9 million people had downloaded the app, but StopCovid only sent 14 notifications.

Four months later, StopCovid/TousAntiCovid has been downloaded and activated by close to 2.8 million people. But only 13,651 people declared themselves as COVID-19-positive in the app, which led to 823 notifications. Even if you’re tested positive, in most cases, no one is going to be notified.

Hence today’s update. If you’ve been using the app, you’ll receive TousAntiCovid with a software update — the French government is using the same App Store and Play Store listing. When you first launch the app, you go through an onboarding process focused on contact-tracing — activate notifications, activate Bluetooth, etc.

France is using its own contact-tracing protocol called ROBERT. A group of researchers and private companies have worked on a centralized architecture. The server assigns you a permanent ID (a pseudonym) and sends to your phone a list of ephemeral IDs derived from that permanent ID.

Like most contact-tracing apps, TousAntiCovid relies on Bluetooth Low Energy to build a comprehensive list of other app users you’ve interacted with for more than a few minutes. If you’re using the app, it collects the ephemeral IDs of other app users around you.

If you’re using the app and you’re diagnosed COVID-19-positive, your testing facility will hand you a QR code or a string of letters and numbers. You can choose to open the app and enter that code to share the list of ephemeral IDs of people you’ve interacted with over the past two weeks.

The server back end then flags all those ephemeral IDs as belonging to people who have potentially been exposed to the coronavirus. On the server again, each user is associated with a risk score. If it goes above a certain threshold, the user receives a notification. The app then recommends you get tested and follow official instructions.

But there are some new things in the app. You can now access some recent numbers about the pandemic in France — new cases over the past 24 hours, number of people in intensive care unit, etc. There’s a new feed of news items. Right now, it sums up what you can do and cannot do in France

And there are some new links for useful resources — the service that tells you where you can get tested and a link to the exemption certificate during the curfew. When you tap on those links, it simply launches your web browser to official websites.

Let’s see how the app evolves as the government now wants to actively iterate on TousAntiCovid to make it more attractive. If TousAntiCovid can become a central information hub for your phone, it could attract more downloads.

News: India’s Flipkart buys over $200 million stake in Aditya Birla Fashion and Retail

Flipkart is acquiring a 7.8% stake in Aditya Birla Fashion as the Walmart-owned Indian e-commerce firm makes further push into the fashion category in one of the world’s largest retail markets. The e-commerce group will pay $203.8 million for its stake in Aditya Birla Fashion and Retail, a conglomerate that operates over 3,000 stores including

Flipkart is acquiring a 7.8% stake in Aditya Birla Fashion as the Walmart-owned Indian e-commerce firm makes further push into the fashion category in one of the world’s largest retail markets.

The e-commerce group will pay $203.8 million for its stake in Aditya Birla Fashion and Retail, a conglomerate that operates over 3,000 stores including the Pantaloons brand. As part of the “landmark partnership,” Flipkart will also sell and distribute various Aditya Birla Fashion and Retail’s brands products.

“This partnership is an emphatic endorsement of the growth potential of India,” said Kumar Mangalam Birla, Chairman of Aditya Birla Group, which operates the fashion retail firm in a filing to the stock exchange. “It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 billion in the next 5 years.”

Kalyan Krishnamurthy, CEO of Flipkart Group, said the two companies will work toward “making available a wide range of products for fashion-conscious consumers across different retail formats across the country. We look forward to working with ABFRL and its well established and comprehensive fashion and retail infrastructure as we address the promising opportunity of the apparel industry in India.”

In July, Flipkart also invested $35 million in $35 million in Arvind Fashions, one of the decades-old Indian firm’s subsidiaries.

More to follow…

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