Daily Archives: March 23, 2021

News: Orca Security raises $210M Series C at a unicorn valuation

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Orca Security, an Israeli cybersecurity startup that offers an agent-less security platform for protecting cloud-based assets, today announced that it has raised a $210 million Series C round at a $1.2 billion valuation. The round was led by Alphabet’s independent growth fund CapitalG and Redpoint Ventures. Existing investors GGV Capital, ICONIQ Growth and angel syndicate

Orca Security, an Israeli cybersecurity startup that offers an agent-less security platform for protecting cloud-based assets, today announced that it has raised a $210 million Series C round at a $1.2 billion valuation. The round was led by Alphabet’s independent growth fund CapitalG and Redpoint Ventures. Existing investors GGV Capital, ICONIQ Growth and angel syndicate Silicon Valley CISO Investment also participated. YL Ventures, which led Orca’s seed round and participated in previous rounds, is not participating in this round — and it’s worth noting that the firm recently sold its stake in Axonius after that company reached unicorn status.

If all of this sounds familiar, that may be because Orca only raised its $55 million Series B round in December, after it announced its $20.5 million Series A round in May. That’s a lot of funding rounds in a short amount of time, but something we’ve been seeing more often in the last year or so.

Orca Security co-founders Gil Geron (left) and Avi Shua (right). Image Credits: Orca Security

As Orca co-founder and CEO Avi Shua told me, the company is seeing impressive growth and it — and its investors — want to capitalize on this. The company ended last year beating its own forecast from a few months before, which he noted was already aggressive, by more than 50%. Its current slate of customers includes Robinhood, Databricks, Unity, Live Oak Bank, Lemonade and BeyondTrust.

“We are growing at an unprecedented speed,” Shua said. “We were 20-something people last year. We are now closer to a hundred and we are going to double that by the end of the year. And yes, we’re using this funding to accelerate on every front, from dramatically increasing the product organization to add more capabilities to our platform, for post-breach capabilities, for identity access management and many other areas. And, of course, to increase our go-to-market activities.”

Shua argues that most current cloud security tools don’t really work in this new environment. Many, because they are driven by metadata, can only detect a small fraction of the risks, and agent-based solutions may take months to deploy and still not cover a business’ entire cloud estate. The promise of Orca Security is that it can not only cover a company’s entire range of cloud assets but that it is also able to help security teams prioritize the risks they need to focus on. It does so by using what the company calls its “SideScanning” technology, which allows it to map out a company’s entire cloud environment and file systems.

“Almost all tools are essentially just looking at discrete risk trees and not the forest. The risk is not just about how pickable the lock is, it’s also where the lock resides and what’s inside the box. But most tools just look at the issues themselves and prioritize the most pickable lock, ignoring the business impact and exposure — and we change that.”

It’s no secret that there isn’t a lot of love lost between Orca and some of its competitors. Last year, Palo Alto Networks sent Orca Security a sternly worded letter (PDF) to stop it from comparing the two services. Shua was not amused at the time and decided to fight it. “I completely believe there is space in the markets for many vendors, and they’ve created a lot of great products. But I think the thing that simply cannot be overlooked, is a large company that simply tries to silence competition. This is something that I believe is counterproductive to the industry. It tries to harm competition, it’s illegal, it’s unconstitutional. You can’t use lawyers to take your competitors out of the media.”

Currently, though, it doesn’t look like Orca needs to worry too much about the competition. As GGV Capital managing partner Glenn Solomon told me, as the company continues to grow and bring in new customers — and learn from the data it pulls in from them — it is also able to improve its technology.

“Because of the novel technology that Avi and [Orca Security co-founder and CPO] Gil [Geron] have developed — and that Orca is now based on — they see so much. They’re just discovering more and more ways and have more and more plans to continue to expand the value that Orca is going to provide to customers. They sit in a very good spot to be able to continue to leverage information that they have and help DevOps teams and security teams really execute on good hygiene in every imaginable way going forward. I’m super excited about that future.”

As for this funding round, Shua noted that he found CapitalG to be a “huge believer” in this space and an investor that is looking to invest into the company for the long run (and not just trying to make a quick buck). The fact that CapitalG is associated with Alphabet was obviously also a draw.

“Being associated with Alphabet, which is one of the three major cloud providers, allowed us to strengthen the relationship, which is definitely a benefit for Orca,” he said. “During the evaluation, they essentially put Orca in front of the security leadership at Google. Definitely, they’ve done their own very deep due diligence as part of that.”

News: D2C furniture startup Tylko closes $26M Series C growth round led by Pitango and Evli

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Polish startup Tylko, a modular furniture company that employs Augmented Reality as part of its sales cycle, has closed a €22 million ($26m) investment Series C funding round, led by Israel-based Pitango Growth and Finnish Evli Growth Partners, following previous investors TDJ Pitango and Experior Venture Fund. Additionally, Brian Walker, former CEO of Hermann Miller,

Polish startup Tylko, a modular furniture company that employs Augmented Reality as part of its sales cycle, has closed a €22 million ($26m) investment Series C funding round, led by Israel-based Pitango Growth and Finnish Evli Growth Partners, following previous investors TDJ Pitango and Experior Venture Fund. Additionally, Brian Walker, former CEO of Hermann Miller, and Mark Williamson, COO of US-based MasterClass, join as new investors. Tylko has now raised a total of €33 million since its inception in 2015.

It now plans to more than double its team of 140, as well as launch in new markets, and expand its portfolio, which right now is limited to shelving only.

Tylko is not dissimilar from made.com which, to some extent, pioneered the direct-to-consumer furniture market. Like Made, the idea behind Tylko is also direct-to-consumer, ‘design-on-demand’. The company says it has taken advantage of the period when people have been stuck at home during the pandemic, ordering online, to hit a 132% increase in sales in 2020 in comparison to previous years.

Jacek Majewski, co-founder, Co-CEO Tylko, commented in a statement: “Tylko’s vision has always been about putting the user experience first, in order to create a product that is perfectly designed, high-quality and sustainable. We believe that driving sustainability into this huge industry can only be done by creating highly desirable products that will win over customers by their features rather than certificates.”

Tylko says its furniture of based on ‘parametric design’, with each item being quite individual. Tylko’s platform then automates the manufacturing process for its production partners.

Mikko Kuitunen, Growth Partner at Evli Growth Partners, added: “We are impressed by Tylko’s exceptional growth and ability to scale the company as a market leader, offering new, customized solutions within the furniture market. Tylko’s strong impact-driven vision and made-to-order business model drives the market’s transition towards more sustainable solutions.”

Rami Kalish, General Managing Partner & Co-Founder at Pitango Venture Capital commented: “Tylko has a huge vision to disrupt the furniture industry.”

News: Real estate platform Loft raises $425M at a $2.2B valuation in one of Brazil’s largest venture rounds

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Buying and selling residential real estate is a complex business, no matter where you live. A slew of startups in the United States are focused on streamlining that process for people. But in Brazil, where no MLS exists, the challenge of digitizing real estate is even greater. One startup that has set out to serve

Buying and selling residential real estate is a complex business, no matter where you live. A slew of startups in the United States are focused on streamlining that process for people. But in Brazil, where no MLS exists, the challenge of digitizing real estate is even greater.

One startup that has set out to serve as a “one-stop shop” for Brazilians to help them manage the home buying and selling process has managed to attract one of the largest — if not the largest — funding rounds ever raised by a Brazilian startup.

This morning, digital real estate platform Loft announced it has closed on $425 million in Series D funding led by New York-based D1 Capital Partners. A mix of new and existing investors also participated in the round, including Advent, Altimeter, DST, Silver Lake, Soros, Tarsadia, Tiger Global, Andreessen Horowitz, Caffeinated, Fifth Wall, Monashees, QED and Vulcan, among others.

The round values Loft at $2.2 billion, a huge jump from its being just near unicorn territory in January 2020, when it raised a $175 million Series C.

A round of this size is impressive for any startup, but especially for one that was founded just over three years ago in Latin America. The region has seen explosive growth as of late, with a maturing startup scene in Brazil in particular. São Paulo-based Loft too has seen major growth. While the company was less forthcoming about its financials as of late, it told me last year that it had notched “over $150 million in annualized revenues in its first full year of operation” via more than 1,000 transactions.

In 2020, Loft saw the number of listings on its site increase “10 to 15 times,” according to co-founder and co-CEO Mate Pencz. Today, the company actively maintains more than 13,000 property listings in approximately 130 regions across São Paulo and Rio de Janeiro, partnering with more than 30,000 brokers. Not only are more people open to transacting digitally, more people are looking to buy versus rent in the country.

“We did more than 6x YoY growth with many thousands of transactions over the course of 2020,” Pencz told TechCrunch. “We’re now growing into the many tens of thousands, and soon hundreds of thousands, of active listings.”

The company’s revenues and GMV (gross merchandise value) also “increased significantly” in 2020, according to Pencz, who declined to provide more specifics. He did say those figures are “multiples higher from where they were,” and that Loft has “a very clear horizon to profitability.”

“Loft has adapted really fast to the new reality we’re living in, with COVID having only propelled or accelerated our growth,” Pencz said.

Pencz and Florian Hagenbuch founded Loft in early 2018 and today serve as its co-CEOs. The aim of the platform, in the company’s words, is “bringing Latin American real estate into the e-commerce age by developing online alternatives to analogue legacy processes and leveraging data to create transparency in highly opaque markets.” The U.S. real estate tech company with the closest model to Loft’s is probably Zillow, according to Pencz.

In the United States, prospective buyers and sellers have the benefit of MLSs, which in the words of the National Association of Realtors, are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property. Loft itself spent years and many dollars in creating its own such databases for the Brazilian market. Besides helping people buy and sell homes, it offers services around insurance, renovations and rentals.

In 2020, Loft also entered the mortgage business by acquiring one of the largest mortgage brokerage businesses in Brazil. The startup now ranks among the top-three mortgage originators in the country, according to Pencz. When it comes to helping people apply for mortgages, he likened Loft to U.S.-based Better.com.

The startup has also grown its number of employees in the past year, growing from 450 last January to 700 today. In particular, it’s significantly beefed up its tech team, according to Pencz.

Image courtesy of Loft

Notably, at the time of its series C, the investment marked the first and only investment in Latin America for Vulcan Capital (the investment arm of Microsoft co-founder Paul Allen) and the first and only Brazilian investment for Andreessen Horowitz.

This latest financing brings Loft’s total funding raised to an impressive $700 million. Other backers include Brazil’s Canary and a group of high-profile angel investors such as Max Levchin of Affirm and PayPal, Palantir co-founder Joe Lonsdale, Instagram co-founder Mike Krieger and David Vélez, CEO and founder of Brazilian fintech Nubank. In addition, Loft has also raised more than $100 million in debt financing through a series of publicly listed real estate funds.

Loft plans to use its new capital in part to expand across Brazil and eventually in Latin America and beyond. The company is also planning to explore more M&A opportunities.

“We’re now going into this year extremely well-capitalized and I think that in addition to doubling down on the core business, there might be strategic acquisitions also on the horizon,” Pencz told TechCrunch. “We also plan to make Loft as much of a regional and potentially global business, following in the footsteps of some of the other Brazilian companies who recently have been expanding globally.”

Dan Sundheim, founder of D1 Capital, said that part of his firm’s approach as investors is identifying opportunities “at the confluence of structural shifts, secular trends and world-class management teams.”

“Analyzing Loft, we were particularly impressed by the team’s focus and relentless execution, which has allowed them to build scale as well as deep data and technology moats in a short amount of time,” he said in a written statement.

News: Insuretech startup Counterpart raises $10M in funding round led by Valor Equity Partners

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Insuretech startup Counterpart, has raised $10 million in funding led by Valor Equity Partners. Also participating was Susa Ventures and Felicis Ventures. Counterpart works in the ‘management liability’ insurance market. Counterpart will also partner with Markel Specialty, a specialty insurance division of Markel Corporation, to offer its management liability insurance products. Insuretech startups like Oscar,

Insuretech startup Counterpart, has raised $10 million in funding led by Valor Equity Partners. Also participating was Susa Ventures and Felicis Ventures. Counterpart works in the ‘management liability’ insurance market. Counterpart will also partner with Markel Specialty, a specialty insurance division of Markel Corporation, to offer its management liability insurance products.

Insuretech startups like Oscar, Lemonade, and Root have made incursions into personal insurance. What has been less prevalent, says Counterpart, is startups tackling the $300bn corporate insurance market.

Counterpart is competing with Next Insurance which has raised $631M, and which also provides small business liability insurance, as well as the big insurance carriers, from AIG to Berkshire Hathaway.

Counterpart is used by some wholesale brokers in the United States to allow small to medium businesses get insurance coverage, because it digitizes much of the process, from application submission, coverage selection, binding, claims management, and loss prevention. Counterpart says this market has become less attractive to insurance carriers because of the increasing claims costs and severity, and their lack of digitization of the process.

Tanner Hackett, founder, and CEO, said in a statement: “The $1.2tn insurance industry is going through a digital revolution.. We saw an outsized opportunity with management liability, a critical insurance line in which we have unique expertise.”
 
Valor Equity Partners partner and Counterpart board member Jon Shulkin said: “Counterpart’s platform goes beyond the scope of a traditional insurer, layering in insights, tools, and services to help business stakeholders navigate this extremely challenging operating environment.”

Valor was an early backer of Tesla, SpaceX, Addepar, and GoPuff. Susa has previously backed Robinhood, PolicyGenius, and Newfront Insurance. Felicis has funded Hippo, Plaid, and Credit Karma.

News: Jumio raises $150M as its all-in-one ID authentication platform crosses 300M verified identities

• March 23, 2021
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Digital identity services — used as a key link between organizations to verify that you are who you say you are online and individuals logging into those services — have come into their own in this past year. The pandemic has precipitated a shift where many services we might have used in person are now

Digital identity services — used as a key link between organizations to verify that you are who you say you are online and individuals logging into those services — have come into their own in this past year. The pandemic has precipitated a shift where many services we might have used in person are now accessible via the web and apps, but at the same time, the amount of cybercrime aimed at abusing that environment is on the rise, and both trends fuel a stronger demand for ID verification tools. Now, one of the companies that provides digital identity products is announcing a large round of funding, underscoring both the market size and its ambitions to be a central player in that space.

Jumio, which has built a platform that provides a variety of digital identity tools and technology — using biometrics, machine learning, computer vision, big data, and more to run checks on ID documents, log-ins, suspicious financial activity, prevent identity theft and more — has closed a $150 million round of funding, money that it will use to build more tools available on its platform, and to double down on customer growth after a big year for the company.

Currently, the company’s primary business is B2B: it provides tools to enterprise customers like HSBC to manage digital identity verification. Some of the areas where it will be investing include expanding its AI capabilities to do more anti-money laundering work, and to look at building a B2C product, using the data, tools and network of customers that it has to help individuals better manage their identities online.

“I think the big thing is that the foundation of the internet is identity not anonymity,” said CEO Robert Prigge in an interview, who said the trend of digital transformation has spurred that chane. “It’s been a big shift over the last couple of years. People wanted to originally hide behind anonymity, but now identify is the keystone. Whether it’s online banking or social networks, you need to be able to establish trust remotely.”

Of course, anonymity still is there, just in a different form: data protection regulations are all about making sure that we can stay private if we so choose as we use the tools that are now the norm. That presents the challenge and opportunity for a company like Jumio: how to navigate the push for identity while still providing a way to do that with privacy protections in mind.

The funding is coming from a single investor, Great Hill Partners, which will be joining Centana and Millennium as shareholders in the company. The valuation is not being disclosed but CEO Robert Prigge noted a few details that he believes point to the company’s position right now.

He confirmed that Jumio made $100 million in revenues last year; this is the first money the company has raised in nearly five years after bringing in a modest $16 million in 2016; and this looks to be the largest single round ever raised for a digital identity company.

However, given the market environment and the advances of tech, there has been quite a lot of momentum in the space, and a number of other digital identity and anti-money laundering (AML) prevention startups have been launching, growing and raising money. Just in the last year, they have included ForgeRock ($96 million round), Onfido ($100 million), Payfone ($100 million), ComplyAdvantage ($50 million), Ripjar ($36.8 million) Truework ($30 million), Zeotap ($18 million), Persona ($17.5 million) — so I wouldn’t be surprised if this is not an outlier at the end of the day.

Acquisitions like Equifax buying Kount earlier this year, and Okta acquiring Auth0 for $6.5 billion, meanwhile, point to encroaching competition from other areas of the market such as credit rating agencies and those providing login services for corporates, as well as the bigger consolidation trends.

Jumio is notable among this group for being one of the bigger and older players. Prigge said that currently has around 1,000 customers, including some of the very biggest enterprises like the banking group HSBC, United Airlines and the telecoms operator Singtel, and it is active in 200 countries.

It’s also distinctive for having developed a platform approach, where it offers a range of different kinds of tools. This is in contrast to many others, which — partly as newer entrants — are focusing on more specific technology or addressing a narrower aspect of what is a pretty complex problem. That said, the company’s earliest work seems to still be the mainstay of what it does. The number of documents that it can “read” to begin the process of verifying users now numbers about 3,500. That has propelled more than 300 million verifications made on Jumio’s platform.

“Almost all vendors verify you are who you say you are, not that it’s really you. That is why the biometrics is so important.
In our case we see it as a holistic onboarding,” Prigge said. “We are one of the only AML and KYC [know your customer] providers.” The AML tools came by way of an acquisition the company made last year, of Beam Solutions.

This funding round, nevertheless, is a big step up for a company that has, in fact, seen a lot of ups and downs.

To be clear, Prigge is very explicit when he says that the Jumio he runs has nothing to do with an older incarnation of the company.

Jumio the first came into existence around a decade ago and raised nearly $40 million in funding from investors like Andreessen Horowitz and Eduardo Saverin as an early player in mobile payments, with technology that could use the camera on a phone to scan cards and IDs to enable the payments. That business ran into a lot of hot water for mis-stating financial results and mostly likely other related things, and eventually it filed for bankruptcy in March 2016. Saverin apparently wanted to buy the business — if only to encourage other buyers to come out of the woodwork — eventually Centana did, at a bargain price of $850,000.

While that took a portion of the business (mainly branding, a business concept and some employees) out of bankruptcy, the legacy Jumio remained in a bankruptcy process that is, almost exactly five years to the date, still ongoing, partly because the original founder is being accused of destroying documents needed to finally conclude that mess. 

The fact that Great Hill Partners is doing the investing here is notable. It’s mostly a PE firm that has been doing an increasing amount of investing in tech companies, part of a bigger trend where more PE firms are getting involved in rounds for later-stage startups. Its interest is in backing a company that has emerged as a leader in a crowded space but one targeting a big opportunity in digital identity, forecast to be worth some $12.8 billion by 2024, from $6 billion in 2019.

“Jumio has an incredible foundation – an expert management team, deep product roadmap and a global reach that is positioning the company for significant growth as the volume of online transactions and interactions, and associated fraud, is reaching record-highs. In particular, we have deep conviction in the company’s AI-enabled identity verification solution Jumio Go and KYC orchestration platform,” said Nick Cayer, partner at Great Hill Partners, in an emailed interview. “Jumio will need to both keep pace with incredible demand for online identity verification services, and of course outlast new and evolving competition in the space. We have strong conviction that Jumio has the right management team, innovative product roadmap and group of supporting investors to maintain leadership in the space.”

News: Jeff raises $1M to build alternative credit scoring and other fintech products for Southeast Asia

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According to the World Bank, more than one billion people in South and East Asia lack access to a bank account. For many, this makes it is difficult to secure loans and other services because they don’t have traditional financial records like a credit score. Jeff’s loan brokerage platform was created to make it easier

According to the World Bank, more than one billion people in South and East Asia lack access to a bank account. For many, this makes it is difficult to secure loans and other services because they don’t have traditional financial records like a credit score. Jeff’s loan brokerage platform was created to make it easier for financial service providers to integrate alternative data scoring, allowing them reach more potential borrowers.

The startup, which launched its app in Vietnam last year, announced today it has raised $1 million, led by the Estonian Business Angels Network (EstBAN). The funding will be used to enter other Southeast Asian markets, including Indonesia and the Philippines, and introduce new products, like free credit score and insurance offers, digital discount coupons and mobile wallet cashbacks. Other participants in the round included Startup Wise Guys; Taavi Tamkivi, the founder of Salv who formerly held lead roles at TransferWise and Skype; and angel investors from European on-demand ride platform Bolt.

Jeff currently claims more than 300,000 users in Vietnam. Though it is based in Latvia, Jeff will continue focusing on unbanked people in South and Southeast Asia, said founder and chief executive officer Toms Niparts. Its goal is to build a “super app” that combines personalized loan comparisons with other services like e-commerce, mobile top-ups and online discounts, Niparts told TechCrunch in an email.

Before starting Jeff, Niparts was CEO of Spain for Digital Finance International, a fintech company that is part of the Finstar Financial Group, which has investments in more than 30 countries. This gave Niparts the chance to “learn about the similarities and differences of financial services from the inside in different markets,” he said.

In particular, he saw that in Southeast Asian countries, most loan applicants “were rejected not because of bad credit history, low income or other similar reasons, but because there was not enough data about them.” While some lending companies have developed pilot projects for alternative data scoring, the process is often time-consuming, complicated and expensive.

“This is a massive problem in a big part of the world, and it makes absolute sense to build it as a centralised solution,” Niparts said.

In Vietnam, Jeff currently has between 12 to 15 active partners at a time (the number changes because lenders occasionally turn off demand, a standard industry practice), and is adding another eight to 10. In total, the company now has about 80 to 100 potential partners in its Vietnam pipeline, and part of its new funding will be used to expand its team to speed up the onboarding process.

In Indonesia, Jeff has identified about 40 potential partners, “but so far we have only been scratching the surface,” said Niparts. “The Indonesian market is considerably larger than what we have seen in Vietnam, and the forecast is we will grow the pipeline to 150-200 banks and partners in 2021.”

The company’s selling point hinges on its ability to accurately measure creditworthiness based on alternative data. For lenders, this means more pre-qualified leads and access to a larger customer segment.

“Building a credit score is a never-ending process, and we are at the very early stages of it. What we have right now is mainly around publicly accessible information and client-consented data,” Niparts said. This includes behavioral analytics, smart devices meta data, data from social media and other sources that have open APIs.

As Jeff grows, it also plans to make partnerships with mobile wallets, telecom companies and consumer apps. It is developing a lender toolkit that includes bank portal and lender API to reduce the amount of time needed to integrate with the app.

Jeff’s onboarding chatbot

Borrowers sign up for Jeff with the app’s chatbot and can start getting offers once they enter basic information like their name, contact information, the amount they want to borrow and the purpose of the loan. But adding more details and data sources to their profiles, which are screened by multiple lenders at once, increases their chances of approval, and unlocks more offers. This may include uploading documents, connecting social media accounts or consenting to share their smart device metadata.

“As we evolve, new integrations and compatible accounts from other service providers—such as utilities, food delivery, and more—will be regularly added,” said Niparts.

Jeff’s partners currently offer near-prime, peer-to-peer and digital lending services that include unsecured consumer loans, installment loans and motorbike financing. It plans to add more loan products, and is also working on its first insurance collaborations, credit cards and other bank-grade products.

“Our ambition for Jeff is to become a super app, where people can not only get access to financial services that were previously unavailable to them, but also tap in other benefits and discounts,” Niparts said. “This is also a great way to learn more about creditworthiness and what’s on demand. Every new interactions gives us more data and insights to further evolve the accuracy and value added of Jeff’s credit score.”

The number of fintech startups focused on financial inclusion is on the rise across Southeast Asia. Jeff’s competitors fall into two main categories. The first are comparison portals like TopBank, TheBank and GoBear (which recently announced it is closing), that allow users to compare financial providers and banks, but don’t focus on enabling them to access services. The second are companies like CredoLab, Seon and Kalap that provide third-party services like single data-source insights and fraud prevention, but “do not have control over the customer journey,” Nipsart said.

Jeff’s goal is to “be a one-stop shop for both,” he added. “We provide both clients, as well as deeper insights about them for banks and other partners using our platform. At the same time, we are the main point of interaction for the users, which not only solves the main need of comparing financial services and accessing them, but also offers an increasing range of other discounts and benefits.”

News: Afriex raises $1.2M seed to scale its payments and remittances platform across Africa

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Sending money from the U.S. to Nigeria can be a painstaking process. For remittance platforms like Western Union, it will cost a transfer fee and take between one to five business days for money sent from a U.S. debit card to enter a Nigerian bank account.  Crypto remittance platforms are rising to the challenge of

Sending money from the U.S. to Nigeria can be a painstaking process. For remittance platforms like Western Union, it will cost a transfer fee and take between one to five business days for money sent from a U.S. debit card to enter a Nigerian bank account. 

Crypto remittance platforms are rising to the challenge of fixing these cross-border payment issues by reducing time and fees. Just yesterday, we talked about Flux, a Nigerian fintech solving this problem in the present YC W2021 batch. Today, another YC-backed startup, Afriex — but from the Summer 2020 batch — is raising a $1.2 million seed round. 

The company founded by Tope Alabi and John Obirije in 2019 provides instant, zero-fee transfers to Africans at home and in the diaspora. It allows users to deposit cash on the app, send money to a bank account or another user, and withdraw money to a connected bank or debit card. 

Like other crypto remittance platforms, Afriex has built its business on stablecoins — cryptocurrency backed by the dollar. In essence, the company buys cryptocurrency in one country and sells it in another to offer better exchange rates. This is in contrast to better-known platforms like Western Union and Wise that use traditional banking systems.

Last year while the startup graduated from YC, it claimed to be processing about $500,000 per month in transaction fees and is used in over 30 countries. At the time, Afriex was only present in Nigeria and the U.S. But having started operations in Ghana, Kenya, and Uganda, Afriex claims to be processing millions of dollars each month. On its website, though, Afriex states that customers can only send money to and from Nigeria, Ghana, Kenya, Canada, and the U.S.

With the new investment, the Lagos and San Francisco-based startup is looking to scale up by growing the team and expanding to other markets.

Pan-African VC firm Launch Africa led the seed round. Other investors include Y Combinator, SoftBank Opportunity Fund, Future Africa, Brightstone VC, Processus Capital, Uncommon Ventures, A$AP Capital, Precursor Ventures, and Ivernet Holdings. Angel investors like Russell Smith, Mandela Schumacher-Hodge Dixon, Furqan Rydhan, and Andrea Vaccari also took part.

The SoftBank Opportunity Fund, a subsidiary of the SoftBank Group, targets founders of color in the U.S. running early-stage startups. Since launching in June 2020, it has invested in 22 startups and Afriex seems to be the only one catering to a set of users in the US and another continent.

This is due to Alabi’s upbringing as an immigrant child who has had a mix of both worlds. It was difficult to send money to Nigeria and his experience as a blockchain developer at Consensys made him realize he could solve a problem.

“We would go back home every two years and even then, I would always take note of what was missing and what could be improved. I would find myself having to pay for foreign expenses with money that was sitting in a US bank account,” said Alabi. “Traditional remittance companies were so slow and expensive that I knew I could do it better with crypto. Remittance is the best and most important use case for crypto. Our goal is to build the world’s largest remittance company, starting with emerging markets.”

News: Crypto social network BitClout arrives with a bevy of high profile investors, and skeptics

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While much of the recent wave of relentless hype around NFTs — or non-fungible tokens — has been most visibly manifested in high-dollar art auctions or digital trading cards sales, there’s also been a relentless string of chatter among bullish investors who see a future that ties the tokens to the future of social media

While much of the recent wave of relentless hype around NFTs — or non-fungible tokens — has been most visibly manifested in high-dollar art auctions or digital trading cards sales, there’s also been a relentless string of chatter among bullish investors who see a future that ties the tokens to the future of social media and creator monetization.

Much of the most spirited conversations have centered on a pre-launch project called BitClout, a social crypto-exchange where users can buy and sell tokens based on people’s reputations. The app, which launches out of private beta tomorrow morning, has already courted plenty of controversy inside the crypto community, but it’s also amassed quite a war chest as investors pump tens of millions into its proprietary currency.

Early backers of the platform’s BitClout currency include a who’s who of Silicon Valley investors including Sequoia Capital and Andreessen Horowitz, the startup’s founder tells TechCrunch. Other investors include Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital and Reddit co-founder Alexis Ohanian. A report in Decrypt notes that a single wallet connected to BitClout has received more than $165 million worth of Bitcoin deposits suggesting that huge sums have already poured into the network ahead of its public launch.

BitClout falls into an exploding category of crypto companies that are focusing on tokenized versions of social currency. Others working on building out these individual tokens include Roll and Rally, which aim to allow creators to directly monetize their internet presence and allow their fans to bet on them. Users who believe in a budding artist can invest in their social currency and could earn returns as the creator became more famous and their coins accrued more value.

“If you look at people’s existing relationships with social media companies, it’s this very adversarial thing where all the content they produce is not really theirs but it belongs to the corporation that doesn’t share the monetization with them,” BitClout’s founder, who refers to themselves pseudonymously as “diamondhands,” tells TechCrunch. (There’s been some speculation on their identity as a former founder in the cryptocurrency space, but in a call with TechCrunch, they would not confirm their identity.)

The BitClout platform revolves around the BitClout currency. At the moment users can deposit Bitcoin into the platform which is instantly converted to BitClout tokens and can then be spent on individual creators inside the network. When a creator gets more popular as more users buy their coin, it gets more expensive to buy denominations of their coin. Creators can also opt in to receive a certain percentage of transactions deposited into their own BitClout wallets so that they continue to benefit from their own success.

The company’s biggest point of controversy hinges on what has been opt-in and what has been opt-out for the early group of accounts on the platform. Most other social currency offerings are strictly opt-in. Users come to the platform in search of a way to create tokens that allow them to monetize a fanbase and build a social fabric across multiple platforms. The thought being that if the platforms own the audience then you are at their mercy.

BitClout has taken an aggressive growth strategy here, turning that model on its head. The startup has pre-populated the BitClout network with 15,000 accounts after scraping information from popular public Twitter profiles. This means that BitClout users can buy shares of Kim Kardashian’s social coin or Elon Musk’s without those individuals ever having signed up for a profile or agreeing to it. This hasn’t been well-received by all of those who unwittingly had accounts set up on their behalf including many crypto-savvy users who got scooped up in the initial wave of seeding.

The startup’s founder says that this effort was largely an effort to prevent handle squatting and user impersonation but he believes that as the platform opens, a sizable pre-purchase of creator coins reserved for the owners of these accounts will entice those users to verify their handles to claim the funds.

Perhaps BitClout’s most eyebrow raising quirk is that the platform is launching with a way to invest into the platform and convert bitcoin into BitClout, but at launch there’s no way to cash out funds. The project’s founder says that it’s only a matter of time before this is resolved, and points to Coinbase and the Winkelvoss twin’s status as coin holders as a sign of future exchange support to come, but the company has no specifics to share at launch.

While the founders and investors behind the project see a bright future for social currencies on the blockchain, many in the decentralized community have been less impressed with BitClout’s early efforts to achieve viral adoption among creators in a permission-less manner.

“BitClout will make a great case study on how badly crypto projects can mess up incentive engineering when they try to monetize social networks.” Jay Graber, a decentralized platform researcher involved in Twitter’s bluesky effort, said in a tweet. “Trust and reputation are key, and if you create a sketchy platform and mess with people’s reputations without their consent it is not going to go well.”

If BitClout comes out of the gate and manages to convert enough of its pre-seeded early adopter list that there is value in joining its closed ecosystem version of a social token then it may have strong early momentum in an explosive new space that many creators are finding valuable. The concepts explored by others in the social currency space are sound, but this particular execution of it is a high-risk one. The network launches tomorrow morning so we’ll see soon enough.

News: China to ban apps from collecting excessive user data starting May

• March 23, 2021
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Starting May 1, apps in China can no longer force users into providing excessive personal data, according to a document jointly released by a group of the country’s top regulators, the Cyberspace Administration, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation. It’s a common

Starting May 1, apps in China can no longer force users into providing excessive personal data, according to a document jointly released by a group of the country’s top regulators, the Cyberspace Administration, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation.

It’s a common practice in China where apps ask users to provide sensitive personal information and those who decline to share are often denied access. While some of the requests are justifiable, such as one’s location information to use a navigation map, many others are unnecessary, such as one’s biometrics to make mobile payments.

In December, Chinese authorities lay out the acceptable range of data that different apps are entitled to collect, as TechCrunch reported. 

All forms of apps are subject to the requirements, including the increasingly popular “mini programs,” which are lite apps accessed through an all-encompassing native app such as WeChat and Alipay without the need for an app store install, said the new document.

For now, the document appears to be a guideline at best as it does not specify how the rules should be enforced and how offenders will be punished. While it marks China’s incremental progress on data protection, regulators will have to keep updating the rules as people’s daily lives are becoming more linked to digital devices at a rapid rate.

In recent months, China has been clamping down on the technological darlings that it used to pride itself on. It introduced a sweeping antitrust law to rein in its “platform economy” and slammed anti-competition fines on Alibaba and Tencent, following Ant Group’s IPO fiasco.

News: Niantic announces partnership with Nintendo on new augmented reality ‘Pikmin’ title

• March 23, 2021
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Nearly five years after the launch of Pokémon Go, Niantic announced Monday that they are partnering with Nintendo to co-develop a new title based on the company’s Pikmin franchise. Niantic says the app is being developed in their Tokyo office and will launch later this year. “The app will include gameplay activities to encourage walking

Nearly five years after the launch of Pokémon Go, Niantic announced Monday that they are partnering with Nintendo to co-develop a new title based on the company’s Pikmin franchise.

Niantic says the app is being developed in their Tokyo office and will launch later this year.

“The app will include gameplay activities to encourage walking and make walking more delightful,” a press release from Niantic reads. The company notably specifies that the title will make use of their augmented reality platform to integrate the real world into the app’s experiences.

Pokémon Go has fallen out of headlines but has continued to deliver massive sums to the San Francisco gaming company, eclipsing $1 billion in revenue in 2020. In recent years, Nintendo has sought to build out their presence on mobile gaming platforms with a number of titles playing on some of their biggest franchises, but none of them have reached Pokémon Go’s level of success.

Niantic has raised nearly $500 million in capital, most recently raising at a $4 billion valuation.