Monthly Archives: February 2021

News: Lightspeed’s Gaurav Gupta and Grafana Labs’ Raj Dutt will tell us why they financially tied the knot (twice!)

  • February 1, 2021
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Many founders only know their own experience fundraising, and don’t hear much about what other founders went through. On Extra Crunch Live on Wednesday, we’re going to remedy that. Grafana Labs has raised upwards of $75 million since it launched in 2014. Lightspeed Venture Partners, and partner Gaurav Gupta to be specific, led both the

Many founders only know their own experience fundraising, and don’t hear much about what other founders went through. On Extra Crunch Live on Wednesday, we’re going to remedy that.

Grafana Labs has raised upwards of $75 million since it launched in 2014. Lightspeed Venture Partners, and partner Gaurav Gupta to be specific, led both the startup’s Series A and Series B rounds. As far as commitments go, that’s a pretty significant one.

The new and improved Extra Crunch Live pairs founders and the investors who led their earlier rounds to talk about how the deal went down, from the moment they met to the conversations they had (including some disagreements) to the relationship as it exists today. Hell, we may even take a peek at the original pitch deck that made it all happen.

Then, we’ll turn our eyes back to you, the audience. That same founder/investor duo (in this case, Grafana Labs CEO Raj Dutt and LVP’s Gaurav Gupta) will take a look at your pitch decks and give their own feedback. (If you haven’t yet submitted a pitch deck to be torn down on Extra Crunch Live, you can do so here.)

The hour-long episode is sandwiched in between two 30-minute rounds of networking. From start to finish, it goes from 11:30am PT/2:30pm ET to 1:30pm PT/4:30pm ET. And Extra Crunch Live will come to you at the same time, every week, with a new pair of speakers.

So let’s learn a little bit more about Gupta and Dutt.

Before becoming an investor, Gupta enjoyed a rich career in the product development sphere, holding positions at Elastic (where he led product management), Splunk (VP of Products), as well as Google, Gateway and the McKenna Group. He joined Lightspeed in 2019 as a partner, focusing primarily on enterprise software. He’s led investments in Impira, Blameless, Hasura and Panther, and of course, Grafana. He sits on the board of the last three companies in that list.

Dutt is the cofounder and CEO at Grafana Labs, but the fast-growing company isn’t his first go at entrepreneurialism. Dutt also founded and led Voxel, a cloud-hosting startup that was acquired by Internap for $30 million in 2012.

We’re absolutely thrilled to have Gupta and Dutt join us on our first episode of Extra Crunch Live in 2021. As a reminder, Extra Crunch Live is for Extra Crunch members only. We’re coming to you with a new pair of speakers every week, and you can catch everything you missed on demand if you can’t join us live. It’s worth the cost of the subscription on its own, but EC members also get access to our premium content, including market maps and investor surveys. Long story short? Subscribe, smarty. You won’t regret it.

Oh, and here’s a look at other speakers you can expect to see on Extra Crunch Live:

Aydin Senkut (Felicis) + Kevin Busque (Guideline) – February 10
Steve Loughlin (Accel) + Jason Boehmig (Ironclad) – February 17
Matt Harris (Bain Capital Ventures) + Isaac Oats (Justworks) – February 24

And that’s just the February slate!

All the details to register for this upcoming episode (and more) are available below. Can’t wait to see you there!

News: Robinhood’s Q4 2020 revenue shows a return to growth

  • February 1, 2021
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So much for a blowback!

Deeply-funded fintech company Robinhood has been the world’s most-discussed startup over the last week. After the discount trading pioneer found itself in the midst of a battle between hedge funds on one side and a slurry of retail and institutional capital on the other, Robinhood’s trading volume spiked last week.

But after the National Securities Clearing Corporation (NSCC) raised its deposit requirements before the market open on Friday, Robinhood was forced to restrict trading in a number of popular stocks. The company also drew down its credit lines and raised new capital from prior investors to stay open during a trading avalanche.

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

According to a Clubhouse chat between Robinhood CEO Vlad Tenev and Elon Musk last night, the NSCC initially asked Robinhood to post $3 billion in reserve capital. That figure was reduced to $1.4 billion and later to $700 million after Robinhood agreed to limit certain trades. Robinhood transmitted the funds and opened Friday.

But that’s all recent news. Let’s look back further.

TechCrunch has tracked Robinhood’s payment for order flow (PFOF) revenues for a several quarters now. The key revenue source for Robinhood is trackable, as the company has to file its incomes from it. This provides a good view into the company’s growth.

Today we’re parsing its Q4 2020 data, which shows a return to sequential-quarterly growth at the trading upstart.

Of course, we won’t have Q1 2021 data for another three months, but we do have — at last — a good look at how Robinhood wrapped 2020 and some insight into why its investors were willing to put in another $1 billion just last week.

Robinhood’s Q4 2020

Regular readers of The Exchange will recall that after a stonking Q2 2020, Robinhood’s Q3 2020 PFOF incomes were large, but not sequentially-impressive; while Robinhood likely saw sharp revenue gains from Q3 2019 to Q3 2020, when we stacked last year’s third-quarter against its second, the company’s growth had slowed enough that we were curious what would happen in Q4.

News: Apple launches an iCloud Passwords extension for Chrome users on Windows

  • February 1, 2021
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Apple has introduced an iCloud Passwords Chrome extension that will make life easier for those who use both Windows computers and other Apple devices, like a Macbook or an iPhone. The new browser extension lets you access the passwords you saved in Safari on your other Apple devices, then use them within Chrome when you’re on

Apple has introduced an iCloud Passwords Chrome extension that will make life easier for those who use both Windows computers and other Apple devices, like a Macbook or an iPhone. The new browser extension lets you access the passwords you saved in Safari on your other Apple devices, then use them within Chrome when you’re on a Windows PC.

You can also save any new passwords you create in Chrome to your iCloud keychain, so it’s synced across your Apple devices.

Image Credits: Apple

Apple didn’t formally announce the new feature, but reports of an iCloud Passwords extension had already been referenced in the release notes of the new iCloud for Windows 10 (ver 12), which arrived at the end of January. After the update, a “Passwords” section appeared in the app designated by the iCloud Keychain logo. This directed users to download the new extension, but the link was broken, as the extension was not yet live.

That changed on Sunday, according a report from 9to5Google, which found the new Chrome add-on had been published to the Chrome Web Store late on Sunday evening. Now, when Windows users access the new Passwords section, the dialog box that prompts the download will properly function.

Once installed, Chrome users on Windows will be able to access any passwords they saved or allowed iCloud Keychain to securely generate for them within Safari for macOS or iOS. Meanwhile, as Windows users create new credentials, these, too, will be synced to their iCloud Keychain so they can later be pulled up on Mac, iPhone, and iPad devices, when needed.

This is the first Chrome extension to support iCloud Keychain on Windows, as before Apple had only offered an iCloud Bookmarks tool for older Windows 7 and 8 PCs, which reached over 7 million users.

Image Credits: Apple

Some users who have tried the extension are reporting problems, but it seems that’s related to their PCs not having been first updated to iCloud for Windows 12.0, which is a prerequisite for the new extension to work.

Though Apple typically locks users into its own platforms, it has slowly expanded some of its services to Windows and even Android, where it makes sense. Today, Apple offers its entertainment apps like Apple Music and Apple TV on other platforms, including Android, and has launched Apple TV on its media player rival, Amazon Fire TV, among others. And 9to5Mac notes that Apple appears to be working to bring Music and Podcasts to the Microsoft Store in the future, as well.

News: Amazon says government demands for user data spiked by 800% in 2020

  • February 1, 2021
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New transparency figures released by Amazon show the company responded to a record number of government data demands in the last six months of 2020. The new figures land in the company’s bi-annual transparency report published to Amazon’s website over the weekend. Amazon said it processed 27,664 government demands for user data in the last

New transparency figures released by Amazon show the company responded to a record number of government data demands in the last six months of 2020.

The new figures land in the company’s bi-annual transparency report published to Amazon’s website over the weekend.

Amazon said it processed 27,664 government demands for user data in the last six months of 2020, up from 3,222 data demands in the first six months of the year, an increase of close to 800%. That user data includes shopping searches and data from its Echo, Fire, and Ring devices.

The new report presents the data differently from previous transparency disclosures. Amazon now breaks down the top requesting countries. U.S. authorities historically made up the bulk of the overall data demands Amazon receives, but this latest report shows Germany with 42% of all requests, followed by Spain with 18%, and Italy and the U.S. with 11% share each.

But the report also removes the breakdown by legal process, and now only differentiates between the requests it gets for user’s content and for non-content. Amazon said it handed over user content data in 52 cases.

For its Amazon Web Services cloud business, which it reports separately, Amazon said it processed 523 data demands, with 75% of all requests made by U.S. authorities, and Amazon turned over user’s content in 15 cases.

An Amazon spokesperson would not say what led to the sharp rise in data demands. (Amazon seldom comments on its transparency reports.)

Amazon’s transparency report is one of the lightest reads of all the tech giants at just three pages in length, and spends most of the report explaining how it responds to each legal demand than on the data itself. The company, known for its notorious secrecy, became the last of the major tech giants to push out a transparency report in 2015. Where most tech companies added data to their transparency reports, like takedown notices and account removals, Amazon bucked the trend by removing data from its reports, despite the company’s growing reach into millions of homes.

The Financial Times reported this weekend that Ring, the video doorbell and home security startup acquired by Amazon for $1 billion, now has 2,000 law enforcement partners across the United States, allowing police departments to access homeowners’ doorbell camera footage.

News: Equity Monday: Rich tech folks chat rich tech things on rich tech app funded by rich tech investors

  • February 1, 2021
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here — and make sure to check out last week’s main episode and companion chat about Robinhood.

This morning we ran into quite a lot of the same material, with Robinhood back in the news and the stock market looming large. Here’s what we talked about:

All that and we are back Thursday, if not before. Hugs and hellos from the Equity crew!

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts

News: Amazon expands its biometric-based Amazon One palm reader system to more retail stores

  • February 1, 2021
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Last fall, Amazon introduced a new biometric device, Amazon One, that allowed customers to pay at Amazon Go stores using their palm. Today, the company says the device is being rolled out to additional Amazon stores in Seattle — an expansion that will make the system available across eight total Amazon physical retail stores, including

Last fall, Amazon introduced a new biometric device, Amazon One, that allowed customers to pay at Amazon Go stores using their palm. Today, the company says the device is being rolled out to additional Amazon stores in Seattle — an expansion that will make the system available across eight total Amazon physical retail stores, including Amazon Go convenience stores, Amazon Go Grocery, Amazon Books, and Amazon 4-star stores.

Starting today, the Amazon One system is being added as an entry option at the Amazon Go location at Madison & Minor in Seattle. In the next few weeks, it will also roll out to two more Amazon Go stores, at 5th & Marion and Terry & Stewart, the company says. That brings the system to eight Seattle locations, and sets the stage for a broader U.S. expansion in the months ahead.

As described, the Amazon One system uses computer vision technology to create a unique palm print for each customer, which Amazon then associates with the credit card the customer inserts upon initial setup. While the customer doesn’t have to have an Amazon account to use the service, if they do associate their account information, they’ll be able to see their shopping history on the Amazon website.

Amazon says images of the palm print are encrypted and secured in the cloud, where customers’ palm signatures are created. At the time of its initial launch, Amazon argued that palm prints were a more private form of biometric authentication than some other methods, because you can’t determine a customer’s identity based only on the image of their palm.

But Amazon isn’t just storing palm images, of course. It’s matching them to customer accounts and credit cards, effectively building a database of customer biometrics. It can also then use the data collected, like shopping history, to introduce personalized offers and recommendations over time.

The system raises questions about Amazon’s larger plans, as the company’s historical use of biometrics has been fairly controversial. Amazon sold biometric facial recognition services to law enforcement in the U.S. Its facial recognition technology was the subject of a data privacy lawsuit. Its Ring camera company continues to work in partnership with police. In terms of user data privacy, Amazon hasn’t been careful either — for example, by continuing to store Alexa voice data even when users deleted audio files. 

What’s more is the company doesn’t just envision Amazon One as a means of entry into its own stores — they’re just a test market. In time, Amazon wants to make the technology available to third-parties, as well, including stadiums, office buildings and other non-Amazon retailers.

The timing of the Amazon One launch in the middle of a pandemic has helped spur customer adoption, as it allows for a contactless way to associate your credit card with your future purchases. Upon subsequent re-entry, you just hold your hand above the reader to be scanned again and let into the store.

These systems, however, can disadvantage a lower-socioeconomic group of customers, who prefer to pay using cash. They have to wait for special assistance in these otherwise cashless, checkout-free stores.

Amazon says the system will continue to roll out to more locations in the future.

News: 5 ways Robinhood’s rushed UX changes exacerbated the GameStop crisis

  • February 1, 2021
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The GameStop debacle has been hailed by many as a first of its kind form of digital activism, with the ‘crowd’ coming together to stick it to Wall Street, and specifically hedge funds that are in the business of short selling. However, what if you’re a startup or scale-up caught in the middle of such

The GameStop debacle has been hailed by many as a first of its kind form of digital activism, with the ‘crowd’ coming together to stick it to Wall Street, and specifically hedge funds that are in the business of short selling.

However, what if you’re a startup or scale-up caught in the middle of such an unprecedented and unstoppable set of events, requiring you to make rapid business and product decisions almost seemingly on the fly. Especially if there is significant reputational damage at stake when things don’t go to plan.

That’s exactly the position that trading platform Robinhood found itself in last week. Despite promising to make finance accessible for all, the company temporarily limited trading on GameStop, AMC, and other memestocks, leaving users upset that the fintech darling wasn’t living up to its name. The specific reasons may have been short-term and technical, but the choice was viewed with suspicion by much of Robinhood’s users, not least because Robinhood has a large hedge fund as a customer. This saw the Robinhood app receive hundreds of thousands of 1-star ratings on the app stores, which Apple and Google helped remove.

But what role did UX play in all of this and how could better UX choices have mitigated the Robinhood backlash? That’s the question we asked together with Built for Mars founder and UX expert Peter Ramsey, who tracked Robinhood’s product changes throughout the GameStop crisis.

If you want more UX content, Peter and Steve write a regular UX column over at Extra Crunch, so do also check out other recent UX teardowns:

Specifically, we highlight 5 UX fails and suggest ways to fix them. As you’ll see, the fast moving events meant it was a continuously moving target and would have been very challenging for any product team. With that said, there are many learnings that can be applied to other existing digital products or ones you are currently building, regardless of whether or not you’re hit by the next GameStop-styled crisis.

Removing Gamestop from search results

Robinhood wanted to stop people buying GME shares, so they just removed Gamestop from the search results.

Image Credits: Built For Mars

The fail: Robinhood didn’t want people to find the page to purchase Gamestop shares, so they just removed Gamestop from the search results.

The fix: Robinhood absolutely should have left Gamestop in the search results. By removing it entirely the company did three things: created ambiguity, provided no explanation, and looked suspicious.

The rule: Great UX is about being definitive and clear, and the absence of information is the opposite of this.

Blocking people from buying Gamestop shares

People could still get on to the GME stock page, so Robinhood simply disabled the buy button and showed this generic message:

Image Credits: Built For Mars

The fail: Robinhood stopped people buying shares—essentially closing the free market—and disabled the buy button with a generic message.

The fix: This is an unprecedented move from a brokerage, and most Robinhood users will never have considered this to be a possibility. They should have included a link to more information about why they had to take this decision. In this instance, with insufficient info, users flocked to Twitter but found no explanation on the Robinhood Twitter account either.

The rule: When delivering bad news which will directly affect customers, you need to have spent the time to properly explain why this has happened, how it affects them, and what happens next.

Fractional shares are unavailable

Robinhood is known for fractional shares, but it temporarily blocked people buying fractional shares of Gamestop. This was after Robinhood re-allowed people to buy shares, but with limits:

No fractional shares
Limited number of shares

Image Credits: Built For Mars

The fail: When people tried to buy fractional shares, they would put in their order, and see this error message. It explains what you can’t do, but doesn’t provide any context as to why.

The fix: Simple: add context explaining why they’ve had to make this decision. The company removed one of the key USPs of Robinhood, and it didn’t even mention if it’s temporary.

The rule: You shouldn’t just add an explanation in one place and expect all your users to see it. You should proactively place links to your detailed response in all of the places and features that are affected by your restrictions.

Creating sell orders on your behalf

People were claiming on Twitter that Robinhood were automatically creating sell orders, and not allowing people to cancel them. (As it turns out, the T&Cs state that Robinhood has the legal right to do this.)

Image Credits: Built For Mars

The fail: If this is true, it means that Robinhood was taking drastic action to mitigate their liquidity issues. This action directly affects the finances of their users, and still, there’s no explanation why.

The fix: Whilst good UX can’t make this okay, a decent explanation in context of why they’re having to do this at least provides a good rationale. Also, it’s not an ‘error’, so labelling it an error feels disingenuous.

The rule: Stopping your user from doing an action is one thing, but taking control and doing something that may be against their will is another. This should only be done with sufficient context, explanation and empathy.

Failing to get statements

People wanted to leave Robinhood, and were claiming that other brokerages needed a ‘statement of portfolio’ to initiate a switch.

Twitter blew up as the ‘download statement’ function was broken for people all weekend. We never saw Robinhood address it, and naturally people assumed it was a dirty tactic to keep customers from leaving.

The fail: When trying to download a statement users saw this error message. This didn’t just happen once, but users were claiming that it was broken and they were unable to download their statements.

Image Credits: Built For Mars

The fix: Unlike the other examples, this doesn’t require more context, but does need an alternative method of reaching the same result. Some features are vital and urgent, some aren’t.

The rule: Some actions are important enough that it’s not good enough to just fail. In these instances, you need to provide an alternative way to reach the same goal.

News: Rapid7 acquires Kubernetes security startup Alcide for $50M

  • February 1, 2021
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Rapid7, the Boston-based security operations company, has been making moves into the cloud recently and this morning it announced that it has acquired Kubernetes security startup Alcide for $50 million. As the world shifts to cloud native using Kubernetes to manage containerized workloads, it’s tricky ensuring that the containers are configured correctly to keep them

Rapid7, the Boston-based security operations company, has been making moves into the cloud recently and this morning it announced that it has acquired Kubernetes security startup Alcide for $50 million.

As the world shifts to cloud native using Kubernetes to manage containerized workloads, it’s tricky ensuring that the containers are configured correctly to keep them safe. What’s more, Kubernetes is designed to automate the management of containers, taking humans out of the loop and making it even more imperative that the security protocols are applied in an automated fashion as well.

Brian Johnson, SVP of Cloud Security at Rapid7 says that this requires a specialized kind of security product and that’s why his company is buying Alcide. “Companies operating in the cloud need to be able to identify and respond to risk in real time, and looking at cloud infrastructure or containers independently simply doesn’t provide enough context to truly understand where you are vulnerable,” he explained.

“With the addition of Alcide, we can help organizations obtain comprehensive, unified visibility across their entire cloud infrastructure and cloud native applications so that they can continue to rapidly innovate while still remaining secure,” he added.

Today’s purchase builds on the company’s acquisition of DivvyCloud last April for $145 million. That’s almost $200 million for the two companies that allow the company to help protect cloud workloads in a fairy broad way.

It’s also part of an industry trend with a number of Kubernetes security startups coming off the board in the last year as bigger companies look to enhance their container security chops by buying the talent and technology. This includes VMWare nabbing Octarine last May, Cisco getting PortShift in October and RedHat buying StackRox last month.

Alcide was founded in 2016 in Tel Aviv, part of the active Israeli security startup scene. It raised about $12 million along the way, according to Crunchbase data.

News: DesignCrowd raises $10 million AUD to grow its DIY platform, BrandCrowd

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DesignCrowd announced today it has raised $10 million AUD (about $7.6 billion USD) in pre-IPO funding. The capital will be used on hiring and product development, with the goal of accelerating the growth of BrandCrowd, its DIY platform. The new funding comes as DesignCrowd gets ready for a potential initial public offering on the Australian

DesignCrowd announced today it has raised $10 million AUD (about $7.6 billion USD) in pre-IPO funding. The capital will be used on hiring and product development, with the goal of accelerating the growth of BrandCrowd, its DIY platform.

The new funding comes as DesignCrowd gets ready for a potential initial public offering on the Australian Securities Exchange. The round’s investors include Perennial Value Management, Alium Capital, Ellerston Capital, Regal Funds Managemetn and CVC, along with returning backers Starfish Ventures and AirTree Ventures. DesignCrowd has now raised more than $22 million AUD in total.

Founded in 2007 and based in Sydney, Australia, DesignCrowd built its reputation as a design crowdsourcing platform, allowing users to get proposals from designers around the world. BrandCrowd was launched to complement DesignCrowd’s crowdsourcing/marketplace model, expanding its potential user base and differentiating it from other sites people use to find designers, like 99designs and Fiverr.

While there are other DIY logo makers aimed at entrepreneurs and small brands, including tools from Design Hill, Canva and Tailor Brands, BrandCrowd had an advantage from the start because it already has access to more than 800,000 designers through DesignCrowd, allowing the company to find the best logo designers from around the world for its library, said co-founder and chief executive officer Alec Lynch. BrandCrowd prefers to buy designs upfront before publishing them, since all logos are exclusive to the platform (users can pay an extra fee to remove logos from its library).

BrandCrowd customers pay a one-off fee to download a logo and can sign up for monthly or annual subscriptions. Many use both platforms, Lynch said.

“For example, if a small business wants to start by getting a custom logo design from a designer on DesignCrowd, we then allow them to use that logo in our DIY design tools on BrandCrowd to make everything else they might need, from business card designs to Instagram posts and email signature,” said Lynch. “They can even make modifications to their logo on BrandCrowd using our logo editor tool.”

DesignCrowd’s net revenues in 2020 grew 54% year-over-year, due primarily to BrandCrowd. The company says BrandCrowd saw over five million sign-ups over the past 12 months, with more than half of its revenue from the United States.

During the COVID-19 pandemic, the company experienced some headwinds in March and April 2020, Lynch said, but then global demand for online design rebounded and began increasing.

“Our hypothesis is that the pandemic led to more people starting new businesses in the second half of 2020 and more people needing design for those businesses, which was helpful for us,” he added. “In addition to this small ‘boom’ in small businesses starting, we think the pandemic has probably accelerated an existing trend of businesses sourcing design online rather than offline.”

News: Nigerian digital bank Carbon hit $240M in payments processed last year, up 89% from 2019

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In 2018, Carbon, a Nigerian fintech startup, made its financials public for the first time. Although typical for foreign private startups, it’s almost an anomaly in Africa. There have been rare cases in the past, for instance, when Rocket Internet had to include Jumia’s financials in its yearly reports after going public. At the time,

In 2018, Carbon, a Nigerian fintech startup, made its financials public for the first time. Although typical for foreign private startups, it’s almost an anomaly in Africa. There have been rare cases in the past, for instance, when Rocket Internet had to include Jumia’s financials in its yearly reports after going public. At the time, the German investment outfit was a founding shareholder in the African-based unicorn.

While Carbon has been hailed for transparency and openness, it remains to be seen if it’s a trend other African startups are willing to follow. Posting audited financials can prove detrimental for a private African company for several reasons ranging from bad marketing and PR if huge losses are incurred to regulatory clampdown if the company performs well.

A $15.8 million VC-backed company, Carbon was founded by Chijioke Dozie and Ngozi Dozie in 2012. The brothers started the company in a niche digital lending market, but now, the company offers a plethora of services from savings to payments and investments.

When Chijioke Dozie, the CEO, spoke to TechCrunch in 2019, he cited recruitment purposes and clientele trust as reasons why the company made its financials public — an exercise it has done every second quarter for two years. It’s a tradition Dozie hopes the company will keep this year.

“Our annual report will be released in the second quarter after our financial audit has been concluded. If you recall, we released a year in review in January 2020 before we released the fiscal year of 2019 report,” he told TechCrunch.

The company’s annual reports reveal numbers on gross earnings, profit/loss before and after-tax, net impairment loss, total assets, liabilities, and equity, among others. The company’s year on review, on the other hand, highlights payments processed, customer base, loans disbursed, and investments made on the platform. 

As we wait for its annual report for 2020, its year in review offers a sneak peek into how Carbon grew the past year.

For the fiscal year 2020, the company which has about 659,000 customers said it processed ₦96.54 billion (~$241.35 million), up 89% compared to the same period a year ago. For its lending arm, disbursement volume was ₦25.21 billion (~$63 million), up 9.1% from FY2019. Also, ₦13.02 billion (~$32.55 million) worth of investments was made on the platform, representing a 365% increase from the previous year.

According to the company, factors that influenced these numbers last year included launching an iOS app for customer acquisition, introducing its USSD banking feature for lower-income customers; and a social chat feature for faster transactions. 

Image Credits: Carbon

Also, in its quest to become a digital bank, Carbon acquired a microfinance bank license. According to Dozie, the license means that Carbon’s customers are afforded additional protection through depositors’ insurance via the NDIC. The Nigerian Deposit Insurance Corporation, a federal insurance agency, protects depositors and guarantees the settlement of insured funds when a financial institution can no longer repay their deposits. With that in place, Dozie says the typical Carbon wallet is now a full-fledged bank account, and customers can perform transactions on the platform as they would with any bank.

Like Carbon, other startups on the continent have followed suit by releasing year-on-year metrics. In recent memory, most of these startups play in the fintech and crypto-exchange space. But Carbon remains unique amongst these crop of companies as it releases both transaction stats and real insights into its financial performance.

Whereas transaction stats tend to highlight a seemingly explosive year-on-year growth of a company, a comprehensive view of financials will likely show a mixed performance. For instance, Carbon generated $17.5 million in revenue for FY2019, up 68% from 2018. For that same period, it recorded a 23% decrease in its profit after tax numbers, a 222% rise in total liabilities and 107% increase in assets finishing the year off with a 6% increase in total equity.

It’ll be interesting to see what these numbers look like for 2020. But that’s not the only event to keep an eye on. In addition to its $10 million Series A from SA-based Net1 UEPS Technologies and a $5million debt financing in 2019 from Lendable, Dozie says the digital bank is ramping efforts to raise a Series B round soon to consolidate the company’s position on the continent.

  


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