Monthly Archives: December 2020

News: Cloudflare launches Cloudflare Pages, a platform to deploy and host JAMstack sites

• December 17, 2020
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Cloudflare is launching a new product today called Cloudflare Pages. It competes directly with Netlify or Vercel, two cloud hosting companies that let you build and deploy sites using JAMstack frameworks. Popular JAMstack frameworks include Gatsby, Jekyll, Hugo, Vue.js, Next.js, etc. If that announcement sounds familiar, that’s because reverse engineer Jane Manchun Wong, leaked details

Cloudflare is launching a new product today called Cloudflare Pages. It competes directly with Netlify or Vercel, two cloud hosting companies that let you build and deploy sites using JAMstack frameworks. Popular JAMstack frameworks include Gatsby, Jekyll, Hugo, Vue.js, Next.js, etc.

If that announcement sounds familiar, that’s because reverse engineer Jane Manchun Wong, leaked details about the upcoming product by looking into Cloudflare’s code. I covered the leak a couple of weeks ago.

“You saw Jane’s tweet and she sort of spilled the beans a little early, which I thought was kinda awesome,” Cloudflare co-founder and CEO Matthew Prince told me.

But now, Cloudflare Pages is live for real. It integrates seamlessly with a Git repository and existing JAMstack frameworks. When you push a new version of your site to your Git repository, Cloudflare automatically starts building and deploying your site on its network.

If you’re not familiar with JAMstack, it’s a popular way of developing and deploying websites at scale. It lets you take advantage of global edge networks with a focus on performance.

A JAMstack framework lets you decouple the frontend from the backend of your website. Every time you change something to your site, the entire frontend is prebuilt. Your pages are transformed into optimized static pages that can be hosted and cached on a global edge network. This way, pages are served in a few milliseconds across the world.

JAMstack websites don’t have to be 100% static. You can use APIs from popular API-based services, such as Stripe. Payment modules are loaded directly from Stripe’s server when the page is rendered in your web browser. You can also build your own microservices that are loaded on demand and that can scale easily.

Coming back to Cloudflare Pages, it integrates with GitHub and GitLab repositories if you’re hosting your source code on those platforms. Once you your site is configured, you can preview each commit from Cloudflare’s interface — each commit gets its own unique URL and there’s a preview environment.

You can collaborate with other Cloudflare users by inviting them to your Pages project. When your site looks good in the preview branch, you can push it to the production branch.

Cloudflare started working on Pages when people who don’t consider themselves as devops wanted to use Cloudflare. “People on the creative side told us, ‘hey are you interested in building a website builder?’” Prince said. He identified Wix and Squarespace as website builders.

At the same time, Cloudflare noticed that JAMstack was getting quite popular. “A lot of Netlify and Vercel customers actually put Cloudflare in front of their Netlify or Vercel sites,” he added. That doesn’t really make sense when it comes to cost and performance as you’re stacking multiple CDNs.

As Cloudflare already has a huge network of servers around the world, it doesn’t cost them that much money to host JAMstack websites on its edge network — it’s cheaper than caching content hosted by Netlify. That’s why there’s a generous free tier with unlimited bandwidth and unlimited requests.

“We timed the release intentionally to be this time of the year. We really wanted to give a gift back to the developer community,” Prince said.

The company expects to get a lot of attention with today’s release. It’s going to add a thousand people to the service per day up until January. After that, it’ll open the service to everyone.

Cloudflare thinks you’ll choose Pages for JAMstack projects because of the free tier and its robust infrastructure. But the company also expects users to try out other Cloudflare services down the road.

For instance, if you want to go beyond static websites, Cloudflare offers a serverless platform called Cloudflare Workers. You can deploy some code on Workers and use it in your Pages site. With Workers KV and Durable Objects, you can go beyond stateless functions as well.

Similarly, as you start using Pages, you might be interesting Cloudflare’s advanced security features and other Cloudflare products. The company has always been betting on the long tail of developers to find its next customers, and Pages is another example of that strategy.

News: Three different space launch companies – three very different approaches to solving for cost and efficiency

• December 17, 2020
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Launch startup Astra had a monumental week, achieving their first spaceflight with a rocket test on Tuesday. Astra CEO Chris Kemp joined Relativity CEO Tim Ellis, and VOX Space President Mandy Vaughn at our TC Sessions: Space event on Wednesday, and with Relativity’s huge $500 million round earlier this year, and Virgin Orbit’s milestone test

Launch startup Astra had a monumental week, achieving their first spaceflight with a rocket test on Tuesday. Astra CEO Chris Kemp joined Relativity CEO Tim Ellis, and VOX Space President Mandy Vaughn at our TC Sessions: Space event on Wednesday, and with Relativity’s huge $500 million round earlier this year, and Virgin Orbit’s milestone test flight in May, it was a big year for all involved.

A significant portion of our discussion focused on the very different approaches that each of these launch companies is taking to solving what boils down to the same problem – improving cost and availability of launch. Kemp first described Astra’s approach, which boils down to rigorous and continuous process and cost optimization.

“Where we focus our software effort is in understanding where to make engineering optimizations,” Kemp said. “So by having an Astra operating system that is making it visible to all of our engineers, where your costs are, because you have a long lead time on this part, because there’s a lot of labor to assemble this part. […] We’re not throwing any specific technology solution at a problem, we’re trying to basically triage the trade-offs that you’re making between the performance of the rocket – you can always use a higher-cost material, and you can potentially also use a higher cost manufacturing process, like 3D printing, but it isn’t always the right approach.”

Kemp added that Astra is essentially technology-agnostic when it comes to their production stack, and flexible in terms of how to configure that based on available resources and end goal parameters.

“You want to optimize the overall economics of the business without regard to what technology you’re going to use,” he said. “So we pick the right technology to optimize the business based on the capital we have, and the production rate and the launch rate that we’re trying to target.”

Ellis, meanwhile, talked about Relativity’s use of 3D printing, and how it differs significantly from its use in the production stack of other existing rocket manufacturers.

“What we’re doing at Relativity is completely different than then what almost everyone else is doing with using 3d printing for bits and pieces of a rocket,” he said.” From Apollo and launching rockets to the Moon, how we fundamentally build and develop, and the tool sets we use to make rockets and aerospace products is more or less the same as what it was 60 years ago – you walk into a factory, and it’s full of giant, expensive, fixed tooling, very complicated supply chains building products one at a time by hand with hundreds of thousands, to even millions of parts, depending on whether it’s a rocket or commercial aircraft.”

Image Credits: Virgin Orbit, Astra, Relativity Space

By contrast, Ellis pointed out that it’s creating rockets with less than 1,000 total components by viewing 3D printing from a top-down angle, and using it for the vast majority of the production process, rather than for select components.

“Then we’re able to actually build each rocket and from raw material and fly it in 60 days, once our factories operational, and then 60 days later, we’ll do a better version and 60 days later, a better version than that,” he said. “So the compounding rate of progress that’s possible with an all-in 3d printing approach, I believe, is equivalent to going from on-premise servers to cloud, or from gas internal combustion engines to electric – it’s really actually an entirely different tech stack and value chain, it’s not just the rocket itself.”

Vaughn pointed out that while all the companies have different approaches, they all seek to change the accessibility and cost of getting payloads to orbit. She then pointed out that Virgin Orbit has identified launch location flexibility as one of the key levers to speed that change in the right direction.

“It’s not just about getting mass to orbit. It’s about how do we change what is that cost point to do, and how do we change the accessibility to do so,” she said. “Also, really unique from our perspective is, what is that just kind of inherent mobility to do – so how can we actually just fly the launch pad around, and really change the CONOPS [concept of operations] of what it takes to establish an infrastructure and leverage that infrastructure to have access to space.”

Virgin Orbit’s LauncherOne is carried by a modified 747 passenger airplane, which takes off from and lands at a traditional runway. That not only means the rocket itself requires less fuel, and therefore less mass, to deliver its cargo to orbit, but also introduces a lot of launch site flexibility.

“By changing the discussion in terms of what is a launch, and what is the end game, it’s not just about mass to orbit, it’s about all of these other elements of how can we react quickly, how can we design and produce something quickly, as well as deploy that capability, maybe in a unique way from an unexpected location, and then get the on-space effects delivered uniquely and quickly,” Vaughn said.

All three panelists agreed that the market will likely support many providers when it comes to small launch vehicles, and their existing sold inventory queues reflects that. We also heard later in the day from Amazon SVP Dave Limp, who pointed out that they alone will require multiple launch providers contracted for multiple missions to get Amazon’s Project Kuiper constellation in place on orbit.

News: Ramp raises $30M as the battle to own corporate spend heats up

• December 17, 2020
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Corporate spend management startup Ramp has raised $30 million more in a new round, it announced today. TechCrunch covered Ramp’s launch earlier this year, when it also detailed that it had raised around $23 million up to that point. The startup raised its latest round in August of 2020, with conversations about the deal kicking

Corporate spend management startup Ramp has raised $30 million more in a new round, it announced today. TechCrunch covered Ramp’s launch earlier this year, when it also detailed that it had raised around $23 million up to that point.

The startup raised its latest round in August of 2020, with conversations about the deal kicking off in June. The new capital is Ramp’s second priced raise after its August, 2019 seed round worth $8 million and the first after its February, 2020-era $15 million raise. D1 and Coatue were new investors in this new investment, which included some prior backers.

Ramp CEO Eric Glyman called the new equity something akin to a Series A3, noting that it had effectively reused docs from a preceding round, albeit with a new price attached. Venture history purists could argue that Ramp’s new raise was the company’s Series B — the second priced round after its seed — or that it is really a Series C, as the startup’s seed round was as big as a 2000s-era A and was also a priced event.

Whatever.

Ramp did not need the funds. Per Glyman, the startup still had part of its original seed round in the bank when it raised the latest check. That implies that the company had more than $45 million in cash as of August, 2020.

Asked why he raised the capital if it was not needed, the CEO told TechCrunch that its new investors had “pretty unbelievable” investment track records. And Glyman added that the round was attractively priced, limiting dilution. The exec also said that having the new funds helped Ramp hire more aggressively with confidence.

But while the round is interesting to a degree, more intriguing is the space in which Ramp competes. So let’s talk about the power of software, and when the startup and its competitors might start charging more for their deployed code.

Software

Ramp competes for market share in corporate spend management, an active vertical with a number of venture-backed players. That actor density has generated a level of competition that has rewritten the ground rules for getting credit and charge cards into the hands of companies. The table stakes are higher than ever in the niche.

Why? Because issuing credit and debit cards to consumers and corporations has largely been commoditized, causing startups hunting for slices of spend via interchange to build increasingly powerful software suites around their original products; if you can’t entice new customers with fancy cards, how about lots of digital tooling built around spend itself, to help your company manage and limit cash outflows?

The examples of this trend are myriad: Brex built out a cash management solution, for example, and expense management tools. Ramp itself launched expense management software of its own this year, and Divvy has a similar service along with other card-related software tools.

Venture capitalists have poured $55 million into Ramp, by our count, north of $400 million into Brex, not counting debt raised by the unicorn, and more than $250 million into Divvy . So, the game of building increasingly robust software stacks atop corporate cards is one to watch, as the scale of venture bets made on the key players in the space is titanic.

Ramp is dropping new code with its funding news, underscoring the point. The company recently added vendor management tooling, and is now adding reimbursing capabilities so that employees can be paid back for expenses not made on the startup’s cards.

Which of the three has the best software stack? They each think that they do, we reckon.

The result of the efforts by Ramp and its competitors to build out software around their card offerings has been rapid customer growth. Divvy, reached this week concerning its own metrics, told TechCrunch that it has seen its customer number expand 120% in 2020 and total spend on its platform rise 100% this year. Brex declined to share growth metrics.

Ramp announced its own growth figures as part of its news passel, including that it reached $100 million in spend on its platform in the first 18 months following its incorporation (a somewhat non-GAAP time frame, we admit), and that a quarter of the total spend that it has supported for corporations was recorded in the last 30 days.

There appears to be plenty of market for the startups to grow into, just as there is plenty of capital available for them to tap.

To close, a question: When will corporate spend management startups flip the switch, and start to charge for their software suite? Currently the trio make money largely from interchange, collecting a tiny piece of transactions that they power with their cards. This scales well, and keeps friction of signing up new customers low; after all, who doesn’t want a free set of financial tooling?

But, eventually, they will charge for their software. SaaS revenue is simply too highly valued to not go after. At some point. Perhaps that day will mark the end of the corporate spend land logo grab, and the start of the software niche’s maturation. At which point I expect new competitors to sprout up and the cycle to repeat.

News: Watch SpaceX launch a U.S. spy satellite live and bring its booster back for a landing on terra firma

• December 17, 2020
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SpaceX is launching a Falcon 9 today from Kennedy Space Center, with a launch window that spans three hours and opens at 9 AM EST (6 AM PST). The mission will carry a spy satellite for the U.S. National Reconnaissance Office (NRO), and will include a recovery attempt for the first-stage booster used on the

SpaceX is launching a Falcon 9 today from Kennedy Space Center, with a launch window that spans three hours and opens at 9 AM EST (6 AM PST). The mission will carry a spy satellite for the U.S. National Reconnaissance Office (NRO), and will include a recovery attempt for the first-stage booster used on the Falcon 9 vehicle.

This Falcon 9’s first stage has already flown four times previously, including during two of SpaceX’s commercial resupply missions to the International Space Station for NASA, and during a Starlink launch, as well as for SAOCOM 1B, a satellite launch operation for the Argentinian space agency in August.

SpaceX will be attempting a landing back at its landing pad at Cape Canaveral Space Force Station, a rarer occurrence vs. its use of its two drone landing ships positioned out in the ocean. SpaceX’s at-sea launches were introduced to allow for recovery of rocket boosters that didn’t have enough fuel remaining on board to make it all the way back to land – meaning this NRO mission’s parameters allow for a ‘return to sender’ trip back home.

Typically, when there’s a longer launch window, SpaceX will aim to launch at the beginning, depending on weather conditions. If that’s the case today, the stream above should begin at around 8:45 AM EST (15 minutes prior to the opening of the window).

News: Magdrive secures Seed funding for new propulsion system which could take us to the stars

• December 17, 2020
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A startup with a new type of spacecraft propulsion system could make the interplanetary travel seen in Star Trek a reality. Magdrive has just closed a £1.4M seed round led by Founders Fund, an early investor in SpaceX, backed by Luminous Ventures, 7percent Ventures, and Entrepreneur First. Magdrive is developing a next generation of spacecraft

A startup with a new type of spacecraft propulsion system could make the interplanetary travel seen in Star Trek a reality. Magdrive has just closed a £1.4M seed round led by Founders Fund, an early investor in SpaceX, backed by Luminous Ventures, 7percent Ventures, and Entrepreneur First.

Magdrive is developing a next generation of spacecraft propulsion for small satellites. The startup says its engine’s thrust and efficiency are a “generational leap” ahead of any other electrical thrusters, opening up the space industry to completely new types of missions that were not possible before, without resorting to much larger, expensive and heavier chemical thrusters. It says its engine would make fast and affordable interplanetary space travel possible, as well as operations in Very Low Earth orbit. The engine would also make orbital manufacturing far more possible than previously.

Existing electrical solutions are very efficient but have very low thrust. Chemical thrusters have high thrust but lack efficiency and are hazardous and expensive to handle. Magdrive says its engine can deliver both high thrust and high efficiency in one system.

Magdrive prototype render

If it works, the Magdrive engine could make spacecraft go faster for longer. This could open up the industry to new space missions, such as a satellite (or X-wing fighter?) that can make multiple, fast maneuvers, without worrying about conserving fuel. In order to do this right now, satellites require a chemical thruster, which requires a significant payload in fuel for launch. A 200kg satellite would require 50kg of hydrazine fuel, which would cost £1,350,000 in launch mass alone.

Co-founder (and Star Trek fan) Dr Thomas Clayson did a PhD in plasma physics, working on advanced electromagnetic fields. He realized this could be a cornerstone for developing a plasma thruster that could achieve the accelerations required for interplanetary space travel. After meeting Mark Stokes, a mechanical engineer at Imperial College London with similar dreams of space travel, they decided to build a small scale thruster for satellites.

But Magdrive is not alone. Other companies are developing so-called ‘Hall Effect Thrusters’, which is a technology that has existed since the 1960’s. Much of the development is towards miniaturization and mass reduction, but thrust and efficiency remain the same. These companies include Busek, Exotrail, Apollo Fusion, Enpusion, Nanoavionics. Meanwhile, large international companies with huge technology portfolios are working on improving chemical propulsion and making it non-toxic to handle, such as Aerojet Rocketdyne and Moog ISP.

They plan to scale up our technology to power larger manned spacecraft (once in orbit) to long-distance destinations such as the Moon and Mars. Our system would present a much more affordable than a chemical or nuclear solution, due to the huge reduction in fuel costs, and because it is reusable.

Andrew J Scott, Founding Partner, 7percent Ventures: “At 7percent we seek founding teams with ‘moonshot’ ambitions. With Magdrive this is not just a metaphor: their revolutionary plasma thruster will soon be powering satellites, but in the future could take us to deep space. While the UK’s expertise in constructing satellites is world-renowned, there has been far less focus on propulsion. In fact, Great Britain is the only country to have successfully developed and then, in the 1970’s abandoned, an indigenous satellite launch capability, which undoubtedly curbed the UK’s space sector. So we’re excited to be backing Magdrive, one of a new generation of British space startups, which has the vision and ambition to become a world-beating company in this burgeoning sector.”

The satellite industry is worth $5 Billion in 2020, predicted to grow to USD$30Billion by 2030, due to the rise in mega-constellations. Some 5,000 satellites are due to be launched in the next two years and 75% of all the companies launching these satellites have already flown something in space.

Magdrive is at the European Space Agency Business Incubation Centre in Harwell, Oxford.

News: Brainly raises $80M as its platform for crowdsourced homework help balloons to 350M users

• December 17, 2020
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The Covid-19 pandemic has led to a major upswing in virtual learning — where some schools have gone (and stayed) remote, and others have incorporated significantly stronger online components, in order to help communities maintain more social distancing. That has in turn led to a surge in the usage of tools to help home learners

The Covid-19 pandemic has led to a major upswing in virtual learning — where some schools have gone (and stayed) remote, and others have incorporated significantly stronger online components, in order to help communities maintain more social distancing. That has in turn led to a surge in the usage of tools to help home learners do their work better, and today, one of them is announcing a growth round that speaks to the opportunity in that market.

Brainly, a startup from Poland that has built a popular network for students and their parents to engage with each other for advice and help with homework questions, has raised $80 million, a series D that it will be using both to continue building out the tools that it offers to students as well as to hone in on expansion in some key emerging markets such as Indonesia and Brazil. The news comes on the heels of dramatic growth for the company, which has seen its user base grow from 150 million users in 2019 to 350 million today.

The funding is being led by previous backer Learn Capital, with past investors Prosus Ventures, Runa Capital, MantaRay, and General Catalyst Partners also participating. The company has now raised some $150 million and while it’s not disclosing valuation, CEO and co-founder Michał Borkowski confirmed it is “definitely” an upround for the company. For more context, Pitchbook estimates that the company was valued at $180 million in its last round, a Series C of $30 million in 2019.

That C round was raised specifically to help Brainly grow in the U.S. It currently has some 30 million users in that market, and it happens to be the only one in which Brainly is monetising users. Everywhere else, Brainly is currently free to use.

“Brainly has become one of the world’s largest learning communities, achieving significant organic growth in over 35 countries,” said Vinit Sukhija, Partner at Learn Capital, in a statement.

Even before the Covid-19 pandemic, Brainly was finding an audience with students — primarily those aged 13-19, said Borkowski — who were turning to the service to connect with people who could help them with homework when they found themselves at an impasse with, say, a math problem or getting to grips with the sequence of events that led to the revolutions of 1848. The platform is open-ended and is a little like a Quora for homework, in that people can find and answer questions they are interested in, as well as ask questions themselves.

That platform, however, took on a whole new dimension of importance with the shift to virtual learning, Borkowski said.

“In the western world, online education wasn’t a big investment area [pre-Covid] and that has changed a lot, with huge adoption by students, parents and teachers,” he said. “But that big transition, switching from offline to online, has left kids struggling because teachers have so much more to do, so they can’t engage in the same way.”

So with “homework” becoming “all work”, that has effectively led to needing more help than ever with home studies. And while many parents have tried to get more involved to make up the difference, “having parents as teachers has been hard,” he added. They may have been taught differently from how their kids are learning, or they don’t remember or know answers.

One thing that Brainly started to see, he said, was that with the pandemic more parents started using the app alongside students, either to work out answers together or to get the help themselves before helping their kids, with a number of these being from parents of kids younger than 13. He said that 15-20% of all new registrations currently are coming from parents.

Brainly up to now has been mainly focused on how to build out more tools for the students — and now parents — that use it, and has so far been about organic growth for those communities. However, there is clearly scope to expand that to more educational stakeholders to better organise what kind of questions are answered and how. Borkowski said that the company has indeed been approached by educators, those building curriculums and others so that answers might tie in better with the kinds of questions that they are most likely to ask of students, although for now the company “wants to keep the focus on students and parents getting stuck.”

In terms of future products, Brainly is looking at ways of bringing in more tutoring, video and AI into the mix. The AI aspect is very interesting and will in fact tie in to wider curriculum coverage based on more localised needs. For example, if you ask for help with a particular kind of quadratic equation technique, you can then be served lots of same practice questions to help better learn and apply what you’ve just been learning, and you might even then get suggested related topics that will appear alongside that in a wider mathematics examination. And, you might be offered the chance to meet with a tutor for further help.

“It will be about looking at what students are studying and how to map that to the curriculum in the country,” Borkowski said.

News: Austin’s edtech startup Aceable adds another $50 million for accelerated expansion

• December 17, 2020
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Aceable, the Austin-based mobile edtech service for state-accredited classes, is getting an “A” from investors again as private equity firm HGGC pours $50 million into the company. In the eight years since Aceable’s launch, the company has grown from a driver’s ed test prep service to an online training tool for drivers and real estate

News: PhotoRoom launches background-removal app on Android

• December 17, 2020
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French startup PhotoRoom is launching its app on Android today. The company has been working on a utility photography app that lets you remove the background from a photo, swaps it for another background and tweaks your photo. And it’s been working well on iOS already as the company attended Y Combinator, doubled its annual

French startup PhotoRoom is launching its app on Android today. The company has been working on a utility photography app that lets you remove the background from a photo, swaps it for another background and tweaks your photo.

And it’s been working well on iOS already as the company attended Y Combinator, doubled its annual recurring revenue to $2 million and raised a $1.2 million seed round.

In particular, influencers and people reselling clothes and fashion items have been relying on PhotoRoom . They use their phone as their main creativity platform. Like other professional photography apps, the startup relies on subscriptions to generate revenue ($9.49 per month or $46.99 per year).

PhotoRoom relies on machine learning to identify objects and separate them from the rest of the photo. This way, you can manipulate a specific part of your photo.

Image Credits: PhotoRoom

When the startup raised its seed round after Y Combinator, it chose to raise from Nicolas Wittenborn’s Adjacent fund, Liquid2 Ventures as well as two groups:

• A group of business angels focused on machine learning, such as Yann LeCun (Chief AI Scientist at Facebook), Zehan Wang (Head of Twitter Machine Learning Cortex, co-founder of Magic Poney), Nicolas Pinto (Perceptio founder), etc.
• And another group of business angels focused on mobile subscriptions, such as Holger Seim (Blinkist), Jacob Eiting (RevenueCat), John Bonten (advisor for Calm and Spotify) and Eric Setton (Tango).

With this funding round, the company plans to grow the team from 3 to 8 persons and work on its deep learning algorithm. If you want to learn more about PhotoRoom, feel free to read my take on the product:

News: Better Dairy picks up £1.6M seed funding to produce animal-free dairy

• December 17, 2020
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Better Dairy, a U.K. startup developing animal-free dairy that was founded out of Entrepreneur First (EF), has picked up £1.6 million in seed funding. The London-based company is currently in the R&D stages of developing products that are “molecularly identical” to traditional dairy without using animals as part of the production process. This seed round

Better Dairy, a U.K. startup developing animal-free dairy that was founded out of Entrepreneur First (EF), has picked up £1.6 million in seed funding. The London-based company is currently in the R&D stages of developing products that are “molecularly identical” to traditional dairy without using animals as part of the production process.

This seed round was led by Happiness Capital, alongside a number of other investors in the space. They include CPT Capital, Stray Dog Capital and Veg Capital, in addition to various unnamed angel investors. Better Dairy says it will use the funds to accelerate its R&D efforts with the aim of commercialising its first products by early 2022.

Founded in 2019 by Jevan Nagarajah (CEO) and Dr. Christopher Reynolds (CTO), both alumni of Imperial College London but who paired up during EF’s company builder program, Better Dairy is using advancements in technology to address the hugely unsustainable dairy market. Nagarajah has plenty of tech company experience, including stints at Rocket Internet, SumUp, and Ritua, as well as founding early ‘dark kitchen’ startup ShareDining. Meanwhile, Reynolds holds a PhD and a number of post-doctorates across bioinformatics and synthetic biology, and has a degree in natural sciences spanning chemistry and biochemistry.

Nagarajah says animal-based dairy farming is “hugely unsustainable,” noting that it emits the equivalent of over 1.7 billion tonnes of CO2 into the atmosphere each year and it takes 650 litres of water to produce just 1 litre of milk. “Dairy products themselves contain several unwanted pollutants such as growth hormones and antibiotics by virtue of the process of milking mothering cows and are thus not the most suitable for human consumption,” he adds.

However, although plant based alternatives are gaining popularity, Nagarajah argues that they are not a complete solution, often lacking in flavour, texture and nutritional profile. And while they might be able to capture market share, he doesn’t believe plant based alternatives to dairy will be successful in “radically” disrupting the existing $700 billion dairy industry and supply chain. That’s where Better Dairy comes in.

“We are instead using yeast fermentation and biology to produce products that are molecularly identical to traditional dairy,” he explains. “We follow a process very similar to beer brewing but the end result in our case is large vats of dairy instead of beer. This production process, while seemingly futuristic, is actually already being used to produce several enzymes for food production, for example rennet, as well as to produce numerous medical products such as insulin, so we are just building on this”.

Better Dairy is still early on in its R&D process, but has already managed to produce its first dairy samples in the lab. The first challenge was to manipulate yeast to produce initial dairy proof of concepts. “Following this, we believe we have identified a clear path to get us to commercially viable products,” says Nagarajah. “While some of our milestones are box ticking exercises, for example the scaling up of our manufacturing capabilities, the major challenges we need to overcome revolve around the optimisation of our end to end production process”.

That’s because, explains the Better Dairy co-founder, dairy is a relatively low cost good. To realistically disrupt the existing dairy market, the startup will need to achieve a certain level of efficiency otherwise it risks succeeding in producing better dairy but will still fail overall due to prohibitively high pricing.

“We are initially focused on dairy proteins with the view of extending our range to fats over time,” says Nagarajah. “The main dairy proteins whey and casein have many structural and nutritional benefits and are used as ingredients across thousands of food products. They are crucial in providing the texture of dairy products like cheese but are also used heavily in soups and ready meals, baked goods and pastries, chocolates and sweets and also pasta and bread. They even find their way into products like beef burgers and chicken nuggets to bolster protein content and add texture.

“While our intention was initially to enable a wave of better dairy products, our ambitions have grown to target the disruption of the entire dairy supply chain across dairy and non-dairy categories. Our vision is to create a world where humans are vegan without even realising it”.

News: GoCardless raises another $95M as it bets on open banking alongside its recurring payments network

• December 17, 2020
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GoCardless, the London fintech that aims to become the one-stop shop globally for businesses that want to let customers pay via recurring bank payments, has raised $95 million in Series F funding. According to The Telegraph newspaper, this gives the company much coveted unicorn status. However, I understand the round values GoCardless at just over

GoCardless, the London fintech that aims to become the one-stop shop globally for businesses that want to let customers pay via recurring bank payments, has raised $95 million in Series F funding.

According to The Telegraph newspaper, this gives the company much coveted unicorn status. However, I understand the round values GoCardless at just over $970 million, meaning that the 2011-founded fintech is perhaps best described as a soonicorn (presuming these things are important to you).

The latest fundraise was led by Bain Capital Ventures, and follows 46% year-on-year growth for GoCardless as it benefits from an increase in e-commerce and online payments generally during the pandemic. It brings the total raised by the company to-date to $240 million.

GoCardless says it will use the funding to accelerate its open banking strategy, which will see it combine open banking-enabled bank-to-bank payments with the global bank debit payments network it has already built out. “For the first time, merchants will be able to access the best of both worlds for recurring payments: Instant open banking payments will provide visibility and speed, while bank debit maximises cash flow and minimises churn by pulling funds automatically from payers – all at a lower cost than cards,” pitches the fintech.

In addition — and noteworthy — GoCardless says it will also expand its offering into the “adjacent e-commerce market” to launch a simple and secure way of making open banking-enabled bank-to-bank payments as a lower-cost alternative to cards.

The company has always pitched direct debits as a much better recurring payments method, especially for subscription commerce and regular B2B payments. That’s because, amongst other things, debit and credit cards expire, breaking any subsequent recurring payments. By adding bank-to-bank payments to its stack, GoCardless is continuing to push up against the card network duopoly of Visa and Mastercard.

“We think the magic is in the combination of open banking payments and our existing direct debit platform,” co-founder and CEO Hiroki Takeuchi tells me, when asked why GoCardless is entering the soon to be commoditized space of open banking payments.

“They are really complimentary as open banking is faster and more secure but direct debit is more flexible and more reliable. The combination will create something entirely new and unique that will not only make our product better for our existing customers but also enable us to go after new markets”.

He says that GoCardless already has the required FCA permissions to do open banking payments, and new products are actively under development. Debut products will be launching in the first half of 2021.

“We have been following open banking very closely but we felt it wasn’t reliable enough or slick enough for payments until quite recently,” adds Takeuchi. “This has been changing and we think now is the perfect time to focus on open banking payments”.

One interesting aspect of open banking is that the U.K. regulator is currently consulting with the industry on plans to make recurring payments possible via open banking, meaning that they could be used instead of direct debits. Arguably, GoCardless’ biggest moat is the global recurring payments network it has built, and so I put it to Takeuchi that open banking is both an opportunity and a threat to GoCardless.

“We don’t worry about this – we are agnostic to the rails we build on,” he says, pushing back. “What we care about is getting money from one bank account to another as efficiently as possible. In fact, we processed the first (and I think maybe the only) variable recurring payment via open banking last year as part of a test we worked on with the open banking team.

“If open banking offers rails that replicate direct debit then we will adopt those. The reality is that the payment itself is only a small part of the overall value we provide for our merchants — there are a lot of other basics such as reconciliation, refunds, international settlement, FX etc. that are really important — so we are confident that there is still a lot for us to do”.