May 2021 – Page 14 – Digital Pulse

News: LatAm-focused corporate spend startup Clara raises $30M months after its last round

May 26, 2021
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This morning Clara announced that it closed a new, $30 million funding round and secured a $50 million revolving debt facility. The startup, which provides corporate cards to Mexican companies, raised funds earlier this year when it was busy launching its product. Since then, growth has proven rapid for the Mexico City-based company. TechCrunch learned

This morning Clara announced that it closed a new, $30 million funding round and secured a $50 million revolving debt facility.

The startup, which provides corporate cards to Mexican companies, raised funds earlier this year when it was busy launching its product. Since then, growth has proven rapid for the Mexico City-based company.

TechCrunch learned that the company is valued around $130 million after this latest investment, according to sources familiar with its latest fundraising. The round added DST and monashees to Clara’s cap table; prior investor General Catalyst also contributed funds to the deal.

We spoke with Gerry Giacomán Colyer, a co-founder at the startup and its CEO, about why Clara raised more capital so quickly after it last closed a financing round. The short gist is that the company’s growth, and market, allowed it to raise easily. And that the startup has pretty big plans, so having more capital with which to hire is welcome.

Per Giacomán Colyer, since he last spoke to this publication the transaction volume (GTV) that Clara supports has grown by 100x. His company is managing 2x week-over-week growth at times, which is super rapid. That’s precisely the sort of usage growth that venture capitalists covet; and as Clara makes revenue from interchange fees that stem from transaction volume, the startup is likely seeing its revenue advance at roughly the same rate as its GTV.

How Brex more than doubled its valuation in a year

That Clara was able to raise more capital is unsurprising. Not only is it growing quickly in its home market with designs on Brazil in the future, a U.S.-based player in the same space recently sold for north of $2 billion. Divvy’s sale was likely a shot in the arm for not only Clara, but also Brex and Ramp, two other well-known players in the larger corporate spend world.

Clara’s success in Mexico makes it likely that related startups also targeting markets that lack a modern corporate spend solution will see strong venture capital interest; I would not be surprised if we heard from a number of other companies attacking geographies with favorable interchange economics with a similar model, as it has proven to be so lucrative.

TechCrunch asked Giacomán Colyer about who his company is targeting in terms of customers; Brex famously got its start working with high-growth startups before moving to work with a broader array of companies. Clara is working with startups in the Mexican market, the company said, but also with larger firms as well. Its CEO said that its underwriting model is set up to support more traditional cash-flow modeling.

So far Clara has largely attracted customers via word-of-mouth, and is working to bolster its referral system. But now that it has lots more capital, it will be interesting to see if the startup builds out a more aggressive go-to-market motion.

And more than just equity capital, the debt that Clara also secured as part of its recent funding round will help it underwrite customers without having to work off of its own balance sheet. Giacomán Colyer said that even after the capital costs associated with the facility, Clara’s economics are still good. Interchange is a flexible beast, it seems.

To that end, TechCrunch asked Giacomán Colyer if his company intends to charge for software in time, or merely eat off of interchange. In the United States, Brex is now in camp one, along with Airbase, while Ramp is sticking to camp two. Divvy proved that you can get to nine-figures in top line without charging for software, though having some ARR in the mix along with interchange incomes could provide a margin-boost to interchange top line. Regardless, Clara appears happy to keep to interchange for the time being.

Let’s see how quickly Clara can keep scaling. We’ll check back with the company in a few months.

Why did Bill.com pay $2.5B for Divvy?

News: Collab Capital closes $50 million debut fund to back Black founders

May 26, 2021
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A decade before investing outside of San Francisco and New York became trendy, entrepreneurs Jewel Burks, Justin Dawkins and Barry Givens were betting on Atlanta. Each experienced first-hand the biases that disproportionately hurts Black founders – while also being living proof of the wave of Black innovation and opportunity in their city. Last year, the

Last year, the trio saw opportunity in that disconnect and launched Collab Capital, a firm designed to invest explicitly in Black founders. It debuted with $2 million in capital and a massive end target: $50 million. Today, the firm announced that it has met that goal, with backers such as Apple, Goldman Sachs, Google, The Andrew W. Mellon Foundation, Mailchimp, and PayPal, making it one of the largest funds closed from an entirely Black-led firm solely committed to Black founders.

Collab Capital launches with a $50 million target and a mission to help Black entrepreneurs

“We really wanted to build a fund that was appropriate for the opportunity that we see [in Black founders],” Burks said. “And honestly I would say, it’s a small fund out there relative to the number of Black-led companies out there that are looking and seeking funding.”

With the new fund, Collab Capital plans to invest in 50 companies over a three-to-five-year period with check sizes between $500,000 and $750,000. The firm has also reserved up to $2 million per investment for follow-on bets. It is targeting ownership between 10% to 15% in each deal. To date, Collab Capital has backed six companies in the healthcare, edtech, and future of work spaces, including Music Tech Works and Hairbrella.

Internally, the team plans to stay based in Atlanta. Burks, who founded Atlanta-based PartPic, a TC Battlefield company that sold to Amazon, said that reinvesting in the community has always been a part of Collab Capital’s intention. Case in point? The firm’s first three deals were in Atlanta. As Zoom investing became more popular in the wake of the coronavirus, the team invested in startups from Kansas City, Washington, D.C., and Miami, as well.

How did Atlanta become a top breeding ground for billion-dollar startups in the Southeast?

“We’re excited to be able to support founders anywhere in the United States, but we’re really focused on cities that have a high concentration of Black innovators and a lower concentration of capital,” she said.

The world before June

While part of Collab’s focus is avoiding coastal cities, network matters. The firm’s ability to secure heavyweight investors such as Apple and PayPal gives it a key signal that validates its bet on Black founders.

Burks thinks part of the reason that investors might be more intentional about backing firms such as hers is the result of the racial injustice that was highlighted in the wake of the murder of George Floyd, Breonna Taylor, and countless other Black people at the hands of police.

Venture firms rush to find ways to support Black founders and investors

After Floyd and Taylor were murdered, there was a global movement spearheaded by Black Lives Matter in response to police brutality and racism in the United States. Burks says that Collab Capital had only raised a few million at that time, but then witnessed “a shift in the hearts and minds of capital allocators.”

Burks noted that when Collab Capital was first raising its fund, potential investors told them to have a “wider perspective” on what kinds of entrepreneurs to back. Some thought they should create a fund around underrepresented founders or multicultural founders. With general VC volatility in the early months of the pandemic, Collab Capital saw some of its LPs pull back or delay commitments.

“We were very adamant that the most important thing we wanted to solve was the funding gap for Black founders, so we were not willing to broaden the spectrum there because we saw that there were so many firms out there for diverse founders, and even in some of those, Black founders were still marginalized.”

While the majority of venture dollars are still managed by white men, Black-led venture capital firms are having quite the year. Collab Capital’s news is preceded by Harlem Capital, which closed a $134 million seed fund earlier this year, Cleo Capital, which set a $20 million target for Fund II, and MaC VC landing $103 million for its inaugural fund.

Beyond a broader understanding of the importance of diversity in tech, Burks pointed to Zoom as a value unlock.

“If you’d asked me a year ago [if] I think we’d be successful in raising $50 million over Zoom meetings, I would have said absolutely not,” she said. “But you can build meaningful relationships with people and not even have to be in person. That’s a big surprise — and, oh, the realization that you don’t have to travel so much.”

News: Glovo splurges $208M on three Delivery Hero brands in the Balkans

May 26, 2021
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The high stakes game of chess (or, well, consolidation chicken) that is on-demand food delivery rolls on today with a little more territorial swapping in Europe: Barcelona-based Glovo has agreed to buy three of Berlin-based Delivery Hero’s food delivery brands in Central and Eastern Europe — with deals that it said are worth a total

Specifically, it’s picking up Delivery Hero’s foodpanda brand in Romania and Bulgaria; the Donesi brand in Serbia, Montenegro, Bosnia and Herzegovina; and Pauza in Croatia.

There’s some notable symmetry here: Last year Delivery Hero shelled out $272M for a bunch of Glovo’s LatAm brands, as the latter gave up on a region it had already started withdrawing from in its quest for profitability.

Glovo said then that it would be focusing on “key markets where we can build a long-term sustainable business and continue to provide our unique multi-category offering to our customers”.

Earlier this month the Barcelona-based ‘deliver anything’ app also announced it was picking up Ehrana, a local delivery company in Slovenia. So it’s been on quite the (local) shopping spree of late.

Its existing operational footprint covers markets in South West Europe, Eastern Europe and Sub-Saharan Africa. So its attention here, on the Balkans, suggests it sees a chance to eke out profitable potential in more of Central Europe too.

Glovo said the transactions in Bosnia Herzegovina, Bulgaria, Croatia, Montenegro and Serbia are expected to close “within the next few weeks”, subject to fulfilment of closing conditions and relevant regulatory approvals.

While it said Romania will be completed following approval from the competition authority — but gave no timeline for that.

Its splurge on Central and Eastern European rival food delivery brands follows a $528M Series F funding round in April — so it’s evidently not short of VC cash to burn spend.

Commenting in a statement, Oscar Pierre, CEO and co-founder, said: “It’s always been central to our long-term strategy to focus on markets where we see clear opportunities to lead and where we can build a sustainable business. Central and Eastern Europe is a very important part of that plan. The region has really embraced on-demand delivery platforms and we’re very excited to be strengthening our presence and increasing our footprint in countries that continue to show enormous potential for growth.”

In another supporting statement Delivery Hero made it clear it has bigger fish to fry (than can be served up to hungry customers in the Balkans) right now.

“Delivery Hero has built a clear leading business in the Balkan region in the last couple of years. However, with a lot of operational priorities on our plate, we believe Glovo would be better positioned to continue building an amazing experience for our customers in this region,” said Niklas Östberg, its CEO and co-founder.

A relevant, recent development for Delivery Hero‘s business is the decision to re-enter its home market of Germany — Europe’s biggest economy — under its foodpanda brand, starting in its home city of Berlin this summer (but with a national expansion planned to follow).

This is notable because back in 2018 it sold its German operations to another on-demand food delivery rival, the Dutch giant Takeaway.com — in a $1.1BN deal which included the Lieferheld, Pizza.de and foodora brands — temporarily stepping out of the competitive fray. (Meanwhile Takeaway.com has since merged with the UK’s Just Eat to become… Just Eat Takeaway so, uh, keep up.)

Delivery Hero is returning to Germany now because it can, and because the market is huge. A two-year non-compete clause between it and Just Eat Takeaway recently expired — allowing for reheating (rehashing?) of the competitive food delivery mix in German cities.

Speaking to the FT back in May about this market return, Östberg suggested Delivery Hero has girded itself (and its investors) for a long fight.

“We don’t see necessarily that we are going to go in and win the market in the next year or so. This is a 10-year game,” he said. “Of course we will definitely make sure we put in enough money to be the clear number two, the clear challenger [to Just Eat Takeaway.com].”

Winning at food delivery is certainly a(n expensive) marathon, not a sprint.

There are also of course multiple races being run in markets around the world, depending on local conditions and competitive mix — with the chance that the winner of the biggest and most lucrative races will reach such a position of VC-sponsored glory that it can buy up the top competitors from the smaller races and consolidate everything — maximizing economies of scale and gaining the ability to squeeze out fresh competition to grab a juicy profit for themselves.

Or, well, that’s the theory. Competition regulators are likely to take increasing interest in this space, for one thing. Rising awareness of gig economy workers rights is also putting pressure on the model.

For now, the thin-margin food delivery business needs the right base conditions to survive. The model only functions in cities and ideally in highly dense urban environments. Most of the players in this space also do not employ the armies of riders that are needed to make deliveries — because doing so would make the model far more costly. And in Europe political attention on gig economy workers rights could force reforms that raise regional operational costs, putting further pressure on margins.

Spain has its own labor reforms in train that will affect Glovo in its home market, for example.

Achieving sustainability (i.e. profitability without the need for ongoing VC funding injections) remains a huge hurdle for delivery apps. It will likely require massive market consolidation and/or convincing users to switch from making the occasional order of a hot meal on a weekend to relying on app-based delivery for far more of their local shopping needs — not just lunch/dinner but groceries and toiletries, and other fast moving consumers goods and household items.

It’s notable that super fast grocery delivery is a major focus for Glovo, for example — which has recently been building out networks of inner city dark stores to service in-app convenience store shopping.

Lots of other on-demand app players are also ramping up on that front. Including Delivery Hero — which has been paying more attention to groceries (picking up InstaShop last year in a deal worth $360M).

Glovo building out in Central Europe while exiting markets further afield suggests it believes it can use a concentrated market footprint to drive operational efficiencies and strong order margins through a tightly integrated meal delivery and dark store play.

If it can do that — and offer at least the whiff of profitability — it could make its business an attractive future acquisition target for a larger global giant that’s looking to up the ‘consolidation chicken’ stakes by bolting on new regions.

A larger player like Delivery Hero may even be a potential future suitor — having shown it’s happy to return to markets it left earlier. After all, it surely knows Glovo’s business pretty well since they’ve done a number of market swaps. But, for now, that’s pure speculation.

Zooming out, what the on-demand model of app-based urban convenience means for the future of urban environments is a whole other question — and one which both competition and urban regulators will need to ponder very carefully.

If the rush to scale delivery platforms drives unstoppable consolidation that sees smaller players gobbled up by a few global giants — that can then use their size and scale to outcompete local shops — it may spell even more dark times for the traditional High Street and its family-run bodegas.

Local retail in many places has already been hammered by Internet giants like Amazon. Delivery apps are another high tech threat to bricks-and-mortar shopping. Touch of a button convenience does carry wider costs.

Glovo exits the Middle East and drops two LatAm markets in latest food delivery crunch

Spain’s Glovo picks up $528M as Europe’s food delivery market continues to heat up

Delivery Hero CEO shares what he’s learned about managing logistics during a pandemic

News: Yalo raises $50M to build ‘c-commerce’ services for chat apps like WhatsApp

May 26, 2021
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Facebook has long been working on raising WhatsApp’s profile as a channel for businesses to interact with (and sell to) their customers. Today, a startup that has built a suite of tools for retailers and others to build and run those services over WhatsApp and other messaging platforms is announcing growth funding to address that

Yalo, which describes itself as a c-commerce (“chat commerce”) startup building tools for businesses to use messaging apps as part of their customer outreach and sales strategies, has raised $50 million, funding that it will be using to expand its services with a specific focus on emerging markets like Latin America and Southeast Asia.

Yalo already counts big brands like Unilever, Nestle, Coca-Cola and Walmart among the customers using its platform for sales and marketing efforts. In total that speaks to potentially an audience of 350 million, although Yaho doesn’t disclose how many people are actually using Yalo services as a part of that.

The funding is being led by B Capital, with participation from other, undisclosed, investors. Yalo, which recently rebranded from Yalochat, is on a funding roll at the moment: the company’s last round was in August, a $15 million Series B. B Capital’s investment is interesting, given Yalo’s focus on building tools for businesses to better utilize Facebook apps to interact with customers: the VC firm was co-founded by Eduardo Saverin, one of Facebook’s co-founders.

CEO Javier Mata said in an emailed interview that the reason for the swift funding was because of how fast business has been growing in the last year, part of the bigger boom for e-commerce overall.

“Covid fast forwarded us into the future and with it the need for conversational commerce increased significantly,” he said. “It went from being [one] digital commerce channel to becoming the main one.” He said that some of Yalo’s customers are seeing 80% of their sales happening on top of (and inside) messaging apps, a huge shift when you consider how reliant some brands in the consumer packaged goods sector have in the past been on more physical retail channels, whether that was a supermarket, a corner shop or a vending machine. “The market demand increased and we raised to continue overdelivering to customers.”

He added that Yalo wasn’t looking for more funding, “but then we saw an opportunity to accelerate our growth, so we did it. Everything we do is to provide value to our customers and in this case we decided to accelerate our product development so that customers would get conversational marketing, payments, and the world would get no-code builder to create all kind of conversational app sooner.”

Yalo is not disclosing its valuation with this round, CEO Javier Mata said in an email interview. The startup has raised $75 million to date, with other past investors including NXTP from Argentina and Sierra Ventures.

Founded in Mexico, now based in San Francisco, and currently active in Mexico, India, Brazil and the U.S., Yalo’s strategy is to play into the role messaging apps have taken on for consumers in many markets, but especially emerging markets, where many people “live” when on their phones, using them not just to chat to friends, but to interact with a wide range of services.

This is also something that messaging companies like Facebook, taking a page from companies like WeChat and Line in Asia, have been looking to cultivate. Over the years, WeChat and Line have leveraged their success as basic messaging apps to build out wider “super apps” covering all kinds of other forms of communication, as well as a plethora of services like payments, shopping, entertainment and news, both build by the apps themselves as well as by third parties, and now used by hundreds of millions of people.

WhatsApp is Yalo’s biggest platform “by a lot,” said Mata, with SMS in second place, so this is where a lot of its focus is right now.

While WhatsApp has been building out the facility to provide more services, Yalo has built a platform that sits in between brands and the apps themselves in order to use them. Its service — which works with other apps as well (it describes itself as platform-agnostic and able to be embedded in any messaging app) — lets agencies or the brands themselves plan and run marketing and sales campaigns, offer helpdesk services and take payments, giving customers the option to create “micro apps” to live in various messaging environments.

The emerging market focus for Yalo seems to mirror the role that messaging and mobile have taken in these markets overall. In many cases, consumers in developing economies skipped straight over using traditional computers and went online for the first time with cheap smartphones. As a result, that paved the way for consumers, whose digital consumption was more focused on mobile screens, to being more receptive and likely to use messaging apps for more than just messaging.

Mata believes that while emerging markets may have paved the way, though, more developed economies will follow.

“We went from brick and mortar to desktop apps, from apps to web apps, from web apps to mobile apps, and now the future/present is about conversational apps,” Mata said. “Conversational apps are the future because they take advantage of the messaging app that people have already downloaded and they do not need users to install or learn a new ux. It is easier to adopt a new technology when you do not need to replace a lot of legacy technology and you can just leapfrog. That is exactly what emerging markets are doing.”

He believes that “the US and other markets will get there but they will take longer, and eventually the lines between e-commerce and c-commerce will blur. You are starting to see that with text marketing, which is only a tiny fraction of conversational and it is already huge. It’s not a surprise that China is further ahead in digital than the US and conversational commerce is the predominant way of commerce through WeChat. Emerging markets leapfrog when it comes to adopting new tech.”

In the meantime, BCG estimates that c-commerce is already a $35 billion market, and will grow to $130 billion by 2025 in emerging markets alone, accounting for 60% of all digital commerce.

The question will be, then, that if this really takes off, whether the likes of Facebook will try to own the integration experience as much as owning the platform itself, or whether those who have helped to build more interesting commerce experiences on the traditional web — companies like Shopify and Magento, but also Amazon — might try to own this space too, presenting more competition down the line for Yalo.

Not an issue for now, investors say.

“Yalo has become the leading conversational commerce company, revolutionizing the way large enterprises engage with their customers and enabling them to transact through chat applications. We have been impressed with their execution and are very pleased to expand our relationship with them by leading their Series C round.” said Saverin in a statement.

News: Visa takes a swipe in fintech, builds new online marketplace

May 26, 2021
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The relationships between banks and fintechs are multi-faceted. In some cases, they partner. In many cases, they compete. In other cases, one acquires or invests in the other. Well, today, an announcement by global payments giant Visa is aimed at helping facilitate banks and fintechs’ ability to work together. Specifically, Visa said today it has expanded

The relationships between banks and fintechs are multi-faceted.

In some cases, they partner. In many cases, they compete. In other cases, one acquires or invests in the other.

Well, today, an announcement by global payments giant Visa is aimed at helping facilitate banks and fintechs’ ability to work together.

Specifically, Visa said today it has expanded its Visa Fintech Partner Connect, a program designed to help financial institutions quickly connect with a “vetted and curated” set of technology providers.

I talked with Terry Angelos, senior vice president and global head of fintech at Visa, to understand just exactly what that means.

“Global fintech investment last year was $105 billion,” Angelos said. “There were about 2,861 deals in venture, PE and M&A. So literally over $100 billion is going into fintech, which is more than the combined tech budgets of every bank in the U.S. As a result, a lot of innovation that is occurring in fintech is funded by venture dollars. We’re trying to bring that innovation to our clients, whether they are banks, processors or other fintechs.”

The program initially launched in Europe in November of 2020, and now is available in the U.S., Asia Pacific, Latin American and CEMEA (Central Europe, Middle East and Africa). Visa has worked to identify fintechs that can help banks and financial institutions (that are clients of Visa’s) as well as other fintechs “create digital-first experiences, without the cost and complexity of building the back-end technology in-house.”

Local teams will run programs in the respective regions, and vet and manage partners in the following categories: account opening, data aggregation, analytics and security, customer engagement and new cardholder services and operations and compliance.

So far, Visa has identified about 60 partners that offer a range of technologies — from back-office functions to new front-end services, according to Angelos. Those partners include Alloy, Jumio, Argyle, Fidel, FirstSource, TravelBank, Canopy, Hummingbird and Unit21, among others. Twenty-four are located in the U.S.

“So much of fintech focus and coverage is about disrupting existing banks. Everyone is trying to disrupt everyone, including fintechs like PayPal,” Angelos told TechCrunch. “Venture numbers are certainly very large. What we’re realizing is there is a significant opportunity to pair up a lot of venture-backed companies with our existing clients. It runs a little bit against us versus them approach you typically hear about.”

Visa clients can get in touch with program partners via the Visa Partner website and get benefits such as reduced implementation fees and pricing discounts.

“The Fintech Connect program is about both helping to identify and curate interesting fintech companies and then create a favorable commercial partnership for our clients so they can engage with these Fintech Connect partners,” Angelos said.

So, what does Visa gain from all this?

“Our goal is that all of our clients are in a position to build better digital experiences for their consumers,” he told TechCrunch. “We would love it if every bank had the latest tools in order to onboard clients and build digital experiences.”

One of its partners, for example, is virtual card startup Extend.

“There are fintechs that provide this today such as TripActions, Ramp and Divvy,” Angelos points out. “But what Visa is doing is looking at ‘How can we enable our banking clients to do something similar?’ So we’re bringing innovation into our ecosystem so that anyone can take advantage.”

It can also help companies such as TripActions, Ramp or Divvy with other complementary technologies for security posture, for example.

“The net beneficiary is to hopefully move more spending onto those rails,” Angelos said. “For example, if you look at B2B spend, there’s about $120 trillion of it annually. We believe about $20 trillion of that is card eligible. Today, Visa captures about $1 trillion of that. So, another $19 trillion is available for Visa to capture through our partners if our banks and fintechs can build these kinds of solutions to enable B2B payments.”

To be clear, Visa also invests in startups from time to time. But this initiative is distinct from those efforts, although a couple of its partners have been recipients of funding from Visa.

7 VCs look into the future of fintech

News: India asks social media firms if they have complied with the new regulations

May 26, 2021
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India has asked social media firms to provide specific details about whether they have complied with its new IT rules “as soon as possible” and “preferably today” even as the new regulations are being challenged by WhatsApp. In a letter to “significant social media intermediaries” — which New Delhi defines as social media firms with over

In a letter to “significant social media intermediaries” — which New Delhi defines as social media firms with over 5 million registered users in India — on Wednesday, Ministry of Electronics and Information Technology asked the firms to share the names of their apps, websites, or services that will come under the scope of the new IT rules and the status of their compliance.

The letter, obtained by TechCrunch, also asks the firms to provide names and contact details of chief compliance officer, nodal contact person, and resident grievance officer that they have appointed in India as part of the compliance, and also asked for the physical address of the local office. The new rules mandate that firms have several officials in India to address on-ground concerns.

The letter also implies that India doesn’t plan to give social media firms any extension on the deadline to comply with the new regulations. “The additional due diligence required from SSMI have come into effect today, at the conclusion of three additional months given to SSMIs,” it said.

“If you are not considered as SSMI, please provide the reasons for the same including the registered users on each of the services provided by you,” the letter adds. “The government reserves the right to seek any additional information, as may be permitted within these Rules and the IT Act.”

Earlier on Wednesday, WhatsApp sued the Indian government challenging the second largest internet market’s new regulations that it said could allow authorities to make people’s private messages “traceable,” and conduct mass surveillance.

This is a developing story. More to follow…

News: Indonesian crypto exchange Pintu gets $6M Series A led by Pantera, Intudo and Coinbase Ventures

May 26, 2021
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Along with the stock market, cryptocurrency is also seeing an uptick among retail investors in Indonesia. Pintu, a platform focused on first-time cryptocurrency buyers, announced today it has raised a $6 million Series A, led by Pantera Capital, Intudo Ventures and Coinbase Ventures. Other participants in the round included Blockchain.com Ventures, Castle Island Ventures and

Other participants in the round included Blockchain.com Ventures, Castle Island Ventures and Alameda Ventures.

Coinbase unveils fund for early-stage cryptocurrency startups

The Indonesian Commodity Futures Trading Regulatory Agency (also known as Bappepti) began regulating Bitcoin and other cryptoassets as commodities two years ago, paving the way for licensed brokers like Pintu. Founded last year by Jeth Soetoyo to make it easier for first-time investors to purchase Bitcoin, Ethereum and other cryptocurrencies, Pintu is registered under Bappebti and the Ministry of Communication and Informatics as a licensed cryptoassets broker.

A wave of interest in capital investing during the COVID-19 pandemic, especially among millennials who want alternatives to keeping their money in low-yield savings accounts, spurred interest in investment apps like Ajaib, Bibit and Pluang, which have all recently raised funding.

Many first-time investors are also looking at cryptocurrencies. According to Pintu’s internal estimates, last year Indonesia processed $10 billion USD in cryptoassets transactions, mostly through retail investors.

Ajaib raises $65M Series A extension led by Ribbit Capital, increasing the round’s total to $90M

Pintu chief operating officer Andrew Adjiputro told TechCrunch in an email that many Indonesian retail traders see crypto as an alternative investment asset class, and that the majority of retail investors are aged 20 to 35 years old. But the company is starting to see more older investors as crypto gains popularity.

“Based on our internal survey, in terms of public’s top of mind asset classes, we see crypto as a top three asset class in Indonesia, alongside gold and mutual funds,” he said.

Other Indonesian cryptocurrency exchanges include Indodax and Tokocrypto. When asked how Pintu differentiates, Adjiputro said it focuses on the mass market to reach mainly first-time crypto users, and its value proposition lies in its mobile-first app, easy user experience and educational materials developed by the company.

“For most Indonesians, the concept of investing and trading is new, because historically penetration in these categories have been so low,” he explained. “So what we’re seeing is also the opportunity to help Indonesians understand the concept of investing/trading and along the way leapfrog investments into other asset classes. What this means is that there is a large base of underserved first time investors that demand a simple and intuitive trading platform where they are handheld from the start to finish and also educated on the fundamentals of investing/trading on top of that of crypto.”

Pintu’s new funding will be used on marketing, hiring and product development.

Coinbase’s direct listing alters the landscape for fintech and crypto startups

News: Tesla will store Chinese user data locally, following Apple’s suit

May 26, 2021
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The handling of user data in China has become a delicate matter for American tech companies operating in the country. Apple’s move to store the data of its Chinese customers in servers managed by a Chinese state-owned cloud service has stoked controversy in the West over the years. A recent New York Times investigation found that the setup could give the Chinese government easy access to Apple’s user data in China, compromising”, but Apple said it “never compromised the security” of its customers or their data.

Tesla, one of the few U.S. tech heavyweights that generate substantial revenues from China, is working out a similar data plan. The electric carmaker said it has established a data center in China to carry out the “localization of data storage,” with more data facilities incoming, the company announced through its account on microblogging platform Weibo. All data generated by Tesla vehicles sold in mainland China will be stored domestically.

Tesla is acting in response to new requirements drafted by the Chinese government to regulate how cameras- and sensors-enabled carmakers collect and utilized information. One of the requirements states that “personal or important data should be stored within the [Chinese] territory.”

It’s unclear what level of access Chinese authorities have to Tesla’s China-based data. In the case of Apple, the phone maker said it controlled the keys that protect the data of its Chinese customers.

Tesla recently fell out of favor with Chinese media and the public after a customer protested the carmaker’s faulted parts at an auto show in Shanghai, earning her widespread sympathy. Tesla also faces fierce competition from Chinese rivals like Nio and Xpeng, which are investing heavily in world-class designs and autonomous driving technology.

The American firm clearly wants the government’s good graces in its second-largest market. It appeared a few days ago at an industry symposium along with Baidu, Alibaba, research institutions, and think tanks to discuss the new vehicle policy proposed by the country’s cybersecurity watchdog.

“Important data” generated by vehicles as defined by the Chinese internet regulator include traffic conditions in military and government compounds; surveying and mapping data beyond what the government discloses; status of electric charging grids; face, voice, and car plate information; and any data deemed as affecting national security and public interest.

The regulations also urge car service providers to not track users by default, as well as inform them of the kinds of and reasons for data collection. If gathered, information should be anonymized and stored for only “the minimum period of time.”

Tesla mulls cars tailored to China amid mounting criticism

News: UK’s Paysend raises $125M at a $700M+ valuation to expand its all-in-one payments platform

May 26, 2021
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With more people than ever before going online to pay for things and pay each other, startups that are building the infrastructure that enables these actions continue to get a lot of attention. In the latest development, Paysend, a fintech that has built a mobile-based payments platform — which currently offers international money transfers, global

With more people than ever before going online to pay for things and pay each other, startups that are building the infrastructure that enables these actions continue to get a lot of attention.

In the latest development, Paysend, a fintech that has built a mobile-based payments platform — which currently offers international money transfers, global accounts, and business banking and e-commerce for SMBs — has picked up some money of its own. The London-based startup has closed a round of $125 million, a sizable Series B that the company’s CEO and founder Ronnie Millar said it will be using both to continue expanding its business geographically, to hire more people, and to continue building more fintech products.

The funding is being led by One Peak, with Infravia Growth Capital, Hermès GPE, previous backer Plug and Play and others participating.

Millar said Paysend is not disclosing valuation today but described it as a “substantial kick-up” and “a great step forward in our position ahead towards unicorn status.”

From what I understand though, the company was valued at $160 million in its previous round, and its core metrics have gone up 4.5x. Doing some basic math, that gives the company a valuation of around $720 million, a figure that a source close to the company did not dispute when I brought it up.

Something that likely caught investors’ attention is that Paysend has grown to the size it is today — it currently has 3.7 million consumer customers using its transfer and global account services, and 17,000 small business customers, and is now available in 110 receiving countries — in less than four years and $50 million in funding.

There are a couple of notable things about Paysend and its position in the market today, the first being the competitive landscape.

On paper, Paysend appears to offer many of the same features as a number of other fintechs: money transfer, global payments, and banking and e-commerce services for smaller businesses are all well-trodden areas with companies like Wise (formerly “TransferWise”), PayPal, Revolut, and so many others also providing either all or a range of these services.

To me, the fact that any one company relatively off the tech radar can grow to the size that it has speaks about the opportunity in the market for more than just one or two, or maybe five, dominant players.

Considering just remittances alone, the WorldBank in April said that flows just to low- and middle-income countries stood at $540 million last year, and that was with a dip in volumes due to Covid-19. The cut that companies like Paysend make in providing services to send money is, of course, significantly smaller than that — business models include commission charges, flat fees, or making money off exchange rates; Paysend charges £1 per transfer in the UK. More than that, the overall volumes, and the opportunity to build more services for that audience, are why we’re likely to see a lot of companies with ambitions to serve that market.

Services for small businesses, and tapping into the opportunity to provide more e-commerce tools at a time when more business and sales are being conducted online, is similarly crowded but also massive.

Indeed, Paysend points out that there is still a lot of growing and evolution left to do. Citing McKinsey research, it notes that some 70% of international payments are currently still cash-to-cash, with fees averaging up to 5.2% per transaction, and timing taking up to an hour each for sender and recipient to complete transfers. (Paysend claims it can cut fees by up to 60%.)

This brings us to the second point about Paysend: how it’s built its services. The fintech world today leans heavily on APIs: companies that are knitting together a lot of complexity and packaging it into APIs that are used by others who bypass needing to build those tools themselves, instead integrating them and adding better user experience and responsive personalization around them. notes, is a little different from these, with a vertically integrated approach, having itself built everything that it uses from the ground up.

Millar — a Scottish repeat entrepreneur (his previous company Paywizard, which has rebranded to Singula, is a specialist in pay-TV subscriber management) — notes that Paysend has built both its processing and acquiring facilities. “Because we have built everything in-house it lets us see what the consumer needs and uses, and to deliver that at a lower cost basis,” he said. “It’s much more cost efficient and we pass that savings on to the consumer. We designed our technology to be in complete control of it. It’s the most profitable approach, too, from a business point of view.”

That being said, he confirmed that Paysend itself is not yet profitable, but investors believe it’s making the right moves to get there. And, to be clear, Paysend actually does partner with other companies, including those providing APIs, to improve its services. In April, Plaid and Paysend announced they were working together to power open banking transfers, reducing the time to initiate and receive money.

“We are excited by Paysend’s enormous growth potential in a massive market, benefiting from a rapid acceleration in the adoption of digital payments,” said Humbert de Liedekerke, managing partner at One Peak Partners, in a statement. “In particular, we are seeing strong opportunities as Paysend moves beyond consumers to serve business customers and expands its international footprint to address a growing need for fast, easy and low-cost cross border digital payments. Paysend has built an exceptional payment platform by maintaining an unwavering focus on its customers and constantly innovating. We are excited to back the entire Paysend team in their next phase of explosive growth.”

News: With new Partner Colin Hanna, and Shikha Ahluwalia as Associate, Balderton puts down roots in Berlin

May 26, 2021
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As of now, one fo the UK’s biggest and most active tech VCs has a new partner. Principal Colin Hanna has spearheaded several of Balderton’s deals in the past couple of years, and has now been appointed a Partner. But there’s a twist to this plot. He will be officially based in Berlin (where he’s

Hanna said: “Having been with Balderton for five years, I am humbled to now call my mentors my Partners. I look forward to strengthening Balderton’s unique approach from Berlin as we engineer serendipity for European founders with planet-scale ambition.”

Bernard Liautaud, Managing Partner of Balderton commented: “We are delighted to announce Colin’s promotion to Partner. Since he joined Balderton in 2016, Colin has had a significant impact on both Balderton and our portfolio… Colin has strengthened our position in DACH by establishing our permanent presence in Berlin and bringing in Shikha Ahluwalia, whom we are delighted to have. In addition, he was instrumental in the definition of the Balderton Sustainable Future Goals. We have no doubt Colin will be highly successful in his new role.”

The story does not end there, however. Joining him will be tech entrepreneur and founder Shikha Ahluwalia as an Associate covering the DACH region.

co-founded SBL, the D2C women’s fashion e-commerce company in India. Prior to that she was had a tech advisory boutique, and was previously with JP Morgan’s Investment Banking Division in London.

Balderton has 10 current investments across DACH including Contentful, Infarm, SOPHiA Genetics, McMakler, Demodesk, and vivenu.

Ahluwalia commented: “Over the past few years, I have seen the DACH start-up ecosystem evolve rapidly. We at Balderton believe the next European giant will be a technology company and know that the DACH ecosystem plays a significant role in helping form category-leading technology companies. As a former founder myself, I have first-hand experience with the unique challenges of running young businesses. I am excited to contribute and support founders on their own journey as part of Balderton Capital.”

Speaking to me over an interview Hanna said: “Shikha’s hiring deepens our commitment to the local Berlin ecosystem and to the DACH region more broadly. We have been actively supporting Founders in Germany for more than a decade.”

After spending his childhood in Jakarta and Hong Kong, and picking up a degree in Political Economy, Hanna has carved out a career in venture investing – at Balderton since July 4, 2016 – looking at it through the prism on the rise of urban living, grassroots-driven technologies like open source and crypto, and the political ramifications of technology.

He sits on the Board of companies like e-bikes startup VanMoof, Finoa (a crypto custodian), Rahko (quantum computing drug discovery, and helped lead on investments into Traefik and Luno and Vivenu).

One these you might pick up from all those is that they err towards the ‘purpose-driven’ side of the equation.

He told me: “I believe the next generation of Founders, particularly in Europe, care more about just their bank accounts and want to build companies that generate impact and are not afraid to take a view on how they want the world to change. Measuring this is a challenge and something we are trying to do with our SFGs at Balderton which I helped spearhead. I believe that when companies like Coinbase and others go “apolitical” they commit themselves to defending the structural status quo rather than becoming agents of deliberate change.”

“My point about purpose driven companies is that when I think when employees want to work with companies believe in their values and you try to tell them those aren’t important, that could be viewed as political. I don’t think we should be we should be muffling the employees.”

Does he think Coinbase, and also recent more recently Basecamp / 37 Signals were wrong to so-called ‘depoliticize’ their businesses?

“I think, I think every CEO is free to run their company how they see fit. But I think that that poses challenges for them on the talent side. I understand, as an American, how charged and how destructive the political climate became, and so I can really understand and empathize why certain choices were made at that time, because you get to a point where that where the conversation becomes toxic… I hope that the steps that they’ve taken, don’t strangle dialogue and conversation that’s constructive about how we want to make an impact and change the world, either as individuals or with the companies we work for,” he said.

Hanna also told me that he think VCs should be wary that the shift to remote will make it easier to invest more widely. “You have to more background checks on founders now, and things like that. But is it a ‘little bit’ more dangerous or is it ‘50% more dangerous’ the fact that people aren’t meeting up in person?”

Monthly Archives: May 2021