July 2021 – Page 36 – Digital Pulse

News: Andreessen Horowitz funds Vitally’s $9M round for customer experience software

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Customer success company Vitally raised $9 million in Series A funding from Andreessen Horowitz to continue developing its SaaS platform automating customer experiences.

Co-founder and CEO Jamie Davidson got the idea for Vitally while he was at his previous company, Pathgather. As chief customer officer, he was looking at tools and “was underwhelmed” by the available tools to automate repetitive tasks. So he set out to build one.

The global pandemic thrust customer satisfaction into the limelight as brands realized that the same ways they were engaging with customers had to change now that everyone was making the majority of their purchases online. Previously, a customer service representative may have managed a dozen accounts, but nowadays with product-led growth, they tackle a portfolio of thousands of customers, Davidson told TechCrunch.

New York-based Vitally, founded in 2017, unifies all of that customer data into one place and flows it through an engine to provide engagement insights, like what help customers need, which ones are at risk of churning and which to target for expanded revenue opportunities. Its software also provides automation to balance workflow and steer customer success teams to the tasks with the right customers so that they are engaging at the correct time.

Andreessen approached Davidson for the Series A, and he liked the alignment in customer success vision, he said. Including the new funding, Vitally raised a total of $10.6 million, which includes $1.2 million in September 2019.

From the beginning, Vitally was bringing in strong revenue growth, which enabled the company to focus on building its platform and hold off on fundraising.

“A Series A was certainly on our mind and road map, but we weren’t actively fundraising,” Davidson said. “However, we saw a great fit and great backing to help us grow. Tools have lagged in the customer success area and how to manage that. Andreessen can help us scale and grow with our customers as they manage the thousands of their customers.”

Davidson intends to use the new funding to scale Vitally’s team across the board and build out its marketing efforts to introduce the company to the market. He expects to grow to 30 by the end of the year to support the company’s annual revenue growth — averaging 3x — and customer acquisition. Vitally is already working with big customers like Segment, Productboard and Calendly.

As part of the investment, Andreessen general partner David Ulevitch is joining the Vitally board. He saw an opportunity for the reimagining of how SaaS companies delivered customer success, he told TechCrunch via email.

Similar to Davidson, he thought that customer success teams were now instrumental to growing SaaS businesses, but technology lagged behind market need, especially with so many SaaS companies taking a self-serve or product-led approach that attracted more orders than legacy tools.

Before the firm met Vitally, it was hearing “rave reviews” from its customers, Ulevitch said.

“The feedback was overwhelmingly positive and affirmed the fact that Vitally simply had the best product on the market since it actually mapped to how businesses operated and interacted with customers, particularly businesses with a long-tail of paying customers,” he added. “The first dollar into a SaaS company is great, but it’s the renewal and expansion dollars that really set the winners apart from everyone else. Vitally is in the best position to help companies get that renewal, help their customers expand accounts and ultimately win the space.”

SaaS needs to take a page out of the crypto playbook

News: DNSFilter secures $30M Series A to step up fight against DNS-based threats

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DNSFilter, an artificial intelligence startup that provides DNS protection to enterprises, has secured $30 million in Series A funding from Insight Partners. DNSFilter, as its name suggests, offers DNS-based web content filtering and threat protection. Unlike the majority of its competitors, which includes the likes of Palo Alto Networks and Webroot, the startup uses proprietary AI

DNSFilter, an artificial intelligence startup that provides DNS protection to enterprises, has secured $30 million in Series A funding from Insight Partners.

DNSFilter, as its name suggests, offers DNS-based web content filtering and threat protection. Unlike the majority of its competitors, which includes the likes of Palo Alto Networks and Webroot, the startup uses proprietary AI technology to continuously scan billions of domains daily, identifying anomalies and potential vectors for malware, ransomware, phishing, and fraud.

“Most of our competitors either rent or lease a database from some third party,” Ken Carnesi, co-founder and CEO of DNSFilter tells TechCrunch. “We do that in-house, and it’s through artificial intelligence that’s scanning these pages in real-time.”

The company, which counts the likes of Lenovo, Newegg, and Nvidia among its 14,000 customers, claims this industry-first technology catches threats an average of five days before competitors and is capable of identifying 76% of domain-based threats. By the end of 2021, DNSFilter says it will block more than 1.1 million threats daily.

DNSFilter has seen rapid growth over the past 12 months as a result of the mass shift to remote working and the increase in cyber threats and ransomware attacks that followed. The startup saw eightfold growth in customer activity, doubled its global headcount to just over 50 employees, and partnered with Canadian software house N-Able to push into the lucrative channel market.

“DNSFilter’s rapid growth and efficient customer acquisition are a testament to the benefits and ease of use compared to incumbents,” Thomas Krane, principal at Insight Partners, who has been appointed as a director on DNSFilter’s board. “The traditional model of top-down, hardware-centric network security is disappearing in favor of solutions that readily plug in at the device level and can cater to highly distributed workforces”

Prior to this latest funding round, which was also backed by Arthur Ventures (the lead investor in DNSFilter’s seed round), CrowdStrike co-founder and former chief technology officer Dmitri Alperovitch also joined DNSFilter’s board of directors.

Carnesi said the addition of Alperovitch to the board will help the company get its technology into the hands of enterprise customers. “He’s helping us to shape the product to be a good fit for enterprise organizations, which is something that we’re doing as part of this round — shifting focus to be primarily mid-market and enterprise,” he said.

The company also recently added former CrowdStrike vice president Jen Ayers as its chief operating officer. “She used to manage their entire managed threat hunting team, so she’s definitely coming on for the security side of things as we build out our domain intelligence team further,” Carnesi said.

With its newly-raised funds, DNSFilter will further expand its headcount, with plans to add more than 80 new employees globally over the next 12 months.

“There’s a lot more that we can do for security via DNS, and we haven’t really started on that yet,” Carnesi said. “We plan to do things that people won’t believe were possible via DNS.”

The company, which acquired Web Shrinker in 2018, also expects there to be more acquisitions on the cards going forward. “There are some potential companies that we’d be looking to acquire to speed up our advancement in certain areas,” Carnesi said.

Are we overestimating the ransomware threat?

News: Ethos picks up $100M at a $2.7B+ valuation for a big data platform to improve life insurance accessibility

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More than half of the U.S. population has stayed away from considering life insurance because they believe it’s probably too expensive, and the most common way to buy it today is in person. A startup that’s built a platform that aims to break down those conventions and democratize the process by making life insurance (and

Ethos, which uses more than 300,000 data points online to determine a person’s eligibility for life insurance policies, which are offered as either term or whole life packages starting at $8/month, has picked up $100 million from a single investor, SoftBank Vision Fund 2. Peter Colis, Ethos’s CEO and co-founder, said that the funding brings the startup’s valuation to over $2.7 billion.

This is a quick jump for the the company: it was only two months ago that Ethos picked up a $200 million equity round at a valuation of just over $2 billion.

It’s now raised $400 million to date and has amassed a very illustrious group of backers. In addition to SoftBank they include General Catalyst, Sequoia Capital; Accel; GV; Jay-Z’s Roc Nation; Glade Brook Capital Partners; Will Smith and Robert Downey Jr.

This latest injection of funding — which will be used to hire more people and continue to expand its product set into adjacent areas of insurance life critical illness coverage — was unsolicited, Colis said, but comes on the heels of very rapid growth.

Ethos — which is sold currently only in the U.S. across 49 states — has seen both revenues and user numbers grow by over 500% compared to a year ago, and it’s on track to issue some $20 billion in life insurance coverage this year. And it is approaching $100 million in annualized growth profit. Ethos itself is not yet profitable, Colis said.

There are a couple of trends going on that speak to a wide opportunity for Ethos at the moment.

The first of these is the current market climate: globally we are still battling the Covid-19 global health pandemic, and one impact of that — in particular given how Covid-19 has not spared any age group or demographic — has been more awareness of our mortality. That inevitably leads at least some part of the population to considering something like life insurance coverage that might not have thought about it previously.

However, Colis is a little skeptical on the lasting impact of that particular trend. “We saw an initial surge of demand in the Covid period, but then it regressed back to normal,” he said in an interview. Those who were more inclined to think about life insurance around Covid-19 might have come around to considering it regardless: it was being driven, he said, by those with pre-existing health conditions going into the pandemic.

That, interestingly, brings up the second trend, which goes beyond our present circumstances and Colis believes will have the more lasting impact.

While there have been a number of startups, and even incumbent providers, looking to rethink other areas of insurance such as car, health and property coverage, life insurance has been relatively untouched, especially in some markets like the U.S. Traditionally, someone taking out life insurance goes through a long vetting process, which is not all carried out online and can involve medical examinations and more, and yes, it can be expensive: the stereotype you might best know is that only wealthier people take out life insurance policies.

Much like companies in fintech who have rethought how loan applications (and payback terms) can be rethought and evaluated afresh using big data — pulling in a new range of information to form a picture of the applicant and the likelihood of default or not — Ethos is among the companies that is applying that same concept to a different problem. The end result is a much faster turnaround for applications, a considerably cheaper and more flexible offer (term life insurance lasts for only as long as a person pays for it to), and generally a lot more accessibility for everyone potentially interested. That pool of data is growing all the time.

“Every month, we get more intelligent,” said Colis.

There is also the matter of what Ethos is actually selling. The company itself is not an insurance provider but an “insuretech” — similar to how neobanks use APIs to integrate banking services that have been built by others, which they then wrap with their own customer service, personalization and more — Ethos integrates with third-party insurance underwriters, providing customer service, more efficient onboarding (no in-person medical exams for example) and personalization (both in packages and pricing) around them. Given how staid and hard it is to get more traditional policies, it’s essentially meant completely open water for Ethos in terms of finding and securing new customers.

Ethos’s rise comes at a time when we are seeing other startups approaching and rethinking life insurance also in the U.S. and further afield. Last week, YuLife in the UK raised a big round to further build out its own take on life insurance, which is to sell policies that are linked to an individual’s own health and wellness practices — the idea being that this will make you happier and give more reason to pay for a policy that otherwise feels like some dormant investment; but also that it could help you live longer (Sproutt is another also looking at how to emphasize the “life” aspect of life insurance). Others like DeadHappy and BIMA are, like Ethos, rethinking accessibility of life insurance for a wider set of demographics.

There are some signs that Ethos is catching on with its mission to expand that pool, not just grow business among the kind of users who might have already been considering and would have taken out life insurance policies. The startup said that more than 40% of its new policy holders in the first half of 2021 had incomes of $60,000 or less, and nearly 40% of new policy holders were under the age of 40. The professions of those customers also speak to that democratization: the top five occupations, it said were homemaker, insurance agent, business owner, teacher, and registered nurse.

That traction is likely one reason why SoftBank came knocking.

“Ethos is leveraging data and its vertically integrated tech stack to fundamentally transform life insurance in the U.S.,” said Munish Varma, managing partner at SoftBank Investment Advisers, in a statement. “Through a fast and user-friendly online application process, the company can accurately underwrite and insure a broad segment of customers quickly. We are excited to partner with Peter Colis and the exceptional team at Ethos.”

News: Valoreo raises $30M more to acquire e-commerce brands across LatAm

July 21, 2021
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Just over five months after securing $50 million in debt & equity, Valoreo has closed on a $30 million Series A funding round. Mexico City-based Valoreo aims to invest in, operate and scale e-commerce brands as part of its self-described mission “to bring better products at more affordable prices” to the Latin American consumer. Valoreo

Just over five months after securing $50 million in debt & equity, Valoreo has closed on a $30 million Series A funding round.

Mexico City-based Valoreo aims to invest in, operate and scale e-commerce brands as part of its self-described mission “to bring better products at more affordable prices” to the Latin American consumer.

Valoreo (which the company says is an extension of the Spanish word “valor,” meaning to add value), acquires merchants that operate their own brands and primarily sell on online marketplaces such as Amazon and Mercado Libre. The company targets brands that offer “category-leading products” and which it believes have “significant growth potential.” It also develops brands in-house to offer a broader selection of products to the end customer.

The startup was founded in late 2020 and has since swelled to more than 100 employees throughout Latin America. It has also since completed “multiple” acquisitions of local brands operating across a variety of industries, such as beauty, fitness and home goods.

California-based Presight Capital and Kingsway Capital out of the United Kingdom co-led the round, which also included participation from existing backers such as Kaszek, Upper90 and FJ Labs. The company declined to break down how much equity it raised in its seed round, but including debt, Valoreo has secured $80 million since inception.

It plans to use the new capital mostly to continue acquiring e-commerce brands across Mexico, Brazil and Colombia as well as to do more hiring.

Tech in Mexico: A confluence of Latin America, the US and Asia

The company says its model differs from that of its U.S.-based competitors (such as Thrasio and Perch) in that it is tailored to “the specific needs of the Latin American market and is specifically focused on the Latin American end customer.”

Valoreo aims to help entrepreneurs who may lack the resources and access to capital to take their businesses to the next level.

At the time of its seed raise, co-founder and co-CEO Stefan Florea told TechCrunch that the company takes less than five weeks typically from its initial contact with a seller to a final payout.

Then, the acquired and developed brands are integrated into the company’s consolidated holding. By tapping its team of “specialists” in areas such as digital marketing and supply chain management, it claims to be able to help these brands “reach new heights” while giving the entrepreneurs behind the companies “an attractive exit,” or partial exit in some cases.

Generally Valoreo acquires the majority of the business, with the purchase price typically being a combination of an upfront cash payment and a profit share component so sellers can still earn money.

Hernan Kazah, co-founder and managing partner of Kaszek, said the firm doubled down on its investment in the startup after seeing its “impressive growth over the past few months.”

Valoreo is not the only Latin American startup focused on this space. In April, Merama announced it had raised $60 million in seed and Series A funding and secured $100 million in debt.

The money was raised “at well over a $200 million valuation,” co-founder and CEO Sujay Tyle said at the time.

Armed with $160M in funding, LatAm’s Merama enters the e-commerce land grab

News: Byju’s acquires reading platform Epic for $500 million in US expansion push

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Byju’s said on Wednesday it has acquired California-headquartered reading platform Epic for $500 million, the latest in a series of moves from India’s most valuable startup as it deepens its footprint in the U.S. market. The deal involves both cash and stock and Epic founders — Kevin Donahue and Suren Markosian — will continue to

The deal involves both cash and stock and Epic founders — Kevin Donahue and Suren Markosian — will continue to run the business, they said in an interview with TechCrunch.

Epic operates an eponymous digital reading platform for kids aged 12 or younger. The platform, which has a presence across 90% of elementary schools in the U.S., has amassed over 2 million teachers and 50 million kids (up from 20 million last year).

Epic, which counts Evolution Media as an early backer, collects and analyzes real-time anonymized and aggregated data on how many children read a book, how deeply they engage with it and where their interest starts to wane. In a Netflix-esque move, the firm has also started to release several print versions of its own original titles.

TechCrunch reported in March that Byju’s was in talks to acquire Epic. Donahue and Markosian are no strangers to Byju’s. They first met with Byju Raveendran, co-founder and chief executive of the eponymous Indian startup, four or five years ago, but conversations about an acquisition only began this year, they said.

Raveendran (pictured above) said in an interview that his son uses the app, which gave him the conviction to explore any opportunity with the startup more seriously.

“We started Epic about eight years ago with the goal of bringing books to every child. We thought through technology we can get kids excited about reading and we can remove any barrier between the child and book. We are now in almost every school in the U.S., reaching over 50 million kids and a billion books read,” said Markosian.

“It has been our personal passion to build this platform because we wanted our kids to read more, too. So when we got to this point, it really made sense for us to look at scaling globally and internationally. When we started to talk to Byju, we realized that we share a common passion for education and belief in technology helping solve this opportunity. Together with Byju, we can take Epic to the next level,” he said.

Some original titles released by Epic. Image Credits: Epic

U.S. expansion

For Byju’s, the new product expands its current portfolio and brings expertise about a demographic of the U.S. that the startup has been looking for, said Raveendran. The addition of Epic to Byju’s offerings is “complimentary from a product standpoint as reading is a very powerful format for students to learn,” he said.

“The distribution they have will also help us offer more options to students in the U.S. and reach a demographic that we have also been working to serve. They understand this demographic very well,” he said.

Earlier this year, Byju’s rebranded its international business as Byju’s Future School, as part of which it is offering coding and math in synchronous and asynchronous formats to students and plans to add music, English, fine arts and science to the catalog. Raveendran said he hasn’t decided whether Epic will be rebranded, acknowledging that the California-headquartered startup has a strong brand awareness in the U.S.

Byju’s, which launched a learning app featuring Disney characters in the U.S. earlier this month, now has three large offerings in the U.S. that Raveendran expects will generate $100 million each in revenue this year alone. “Our ambition is to make a global impact,” he said.

The startup plans to invest $1 billion in its North America business, he said. Byju’s, which also has a significant presence in China, plans to bring Epic’s offering to India and other markets, he added.

Acquisitions and fundraise

Epic is the latest in a series of acquisitions by Byju’s. In the past two years, the startup has acquired U.S.-based kids-focused “phygital” startup Osmo (for $120 million), online coding platform WhiteHat Jr (for $300 million), coaching centre chain Aakash (for nearly $1 billion), and Indian edtech startups Toppr* and Gradeup*. (*Yet to be officially confirmed.)

“We have not done acquisitions not for the sake of doing it,” said Raveendran, who himself is a teacher, pointing to the growth and success of firms he has acquired post-acquisition and how these firms have been led by their original founding teams. “Our aspiration is very long-term. We work with the founders to help them turbo-charge their growth,” he said, adding that the startup is open to exploring more M&A opportunities.

Byju’s, which has raised about $1.5 billion since the pandemic broke last year and has attracted several high-profile investors including Blackstone, said the fundraise in recent years has helped the startup to acquire younger firms. He said the startup currently doesn’t plan to raise more external capital, but he didn’t rule out more fundraises in the next few months.

News: Austin-based Fetch Package secures $60M in equity & debt after tripling ARR in 2020

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Fetch Package, a last-mile package delivery company for apartment communities, has raised $50 million in a Series C round of funding and closed on a $10 million venture debt facility. Michael Patton founded Fetch in May 2016 after being frustrated by having packages lost at the apartment community in which he was living. “I took

Fetch Package, a last-mile package delivery company for apartment communities, has raised $50 million in a Series C round of funding and closed on a $10 million venture debt facility.

Michael Patton founded Fetch in May 2016 after being frustrated by having packages lost at the apartment community in which he was living.

“I took the time to research how communities were handling packages. What I found was that some communities are receiving up to 300 to 400 packages a week and trying to manage that volume manually, adding a significant time burden on the team,” he told TechCrunch. “I knew there had to be a better way and that solution needed to be one that could easily handle the future of package delivery as e-commerce was gaining significant traction.”

Fetch launched its operations in Dallas in February of 2017 with the goal of solving “the package problem” for apartment communities. The startup, which later moved its headquarters to Austin, has seen impressive growth.

By the end of 2017, the SaaS company was servicing approximately 2,000 apartments in the Dallas area. Over the next three years that number grew to almost 150,000 doors being serviced out of 25 warehouses in 15 markets, including Atlanta, Austin, Charlotte, Chicago, Denver, Houston, Orlando, Portland, Phoenix, Arizona and Seattle.

Fetch currently has just over 200,000 doors, or around 700 communities, across the country under contract. It says it works with seven of the top 10 nationally recognized apartment management companies in the country, in addition to “a majority of the largest owners and developers.” Last December, it inked a national preferred vendor agreement with management giant Greystar. Fetch delivered about 3.5 million packages in 2020, and hit the 2.5 million mark for volume in June 2021. The company says it’s currently on track to deliver more than 8 million packages by the end of the year.

While the company would not disclose hard revenue figures, Patton says it tripled its year-over-year ARR (annual recurring revenue) in 2020 and GAAP revenue grew 6x year-over-year. Over the last two years, Fetch has seen “record sales,” he added, and is on pace to surpass 300,000 units by year’s end. Austin-based Ocelot Capital led its Series C round, which also included participation from Greenpoint Partners, Alpaca VC and Rose Park Advisors. Existing backers Iron Gate Capital, Signal Peak Ventures, Venn Ventures, Pando Ventures and Seamless also put money in the round.

In addition to the equity raise, Signature Bank provided the company with a $10 million venture debt facility. The latest financing brings Fetch’s total funding to more than $92 million, and triples its valuation from its $18 million Series B raise last August.

10 investors predict MaaS, on-demand delivery and EVs will dominate mobility’s post-pandemic future

Andrew Townsend, managing member at Ocelot Capital, believes that Fetch is “solving for a major bottleneck within the supply chain that is often overlooked.”

“We expect e-commerce delivery volume to continue to grow for the foreseeable future and Fetch is the only scalable solution available to multifamily operators,” he said.

What makes Fetch stand out, in his view, is that the company can “efficiently” manage the fluctuations in package volume in ways that traditional parcel storage solutions cannot. It also provides apartment residents with the “unique convenience of on-demand doorstep delivery that aligns with the varied schedules of apartment dwellers,” Townsend added.

All packages at Fetch’s client communities are sent to the company’s facilities using a unique code identifier. The company then coordinates scheduled, direct-to-door delivery with residents directly via its app in a time frame that it says “works best for their schedule.”

“This takes the property out of the package management business and provides residents with a convenient amenity,” Patton said.

Fetch works with a mix of W2 employees as well as 1099 contractors to fulfill their service. On the W2 side, Fetch has had a 50% increase in total employees since the middle of last year, with about 350 employees today. This is in addition to the “thousands” of independent contractors/gig economy workers who also serve as drivers in all their markets.

Looking ahead, Fetch will use its new capital primarily to expand into new markets, with plans to launch in South Florida, Philadelphia, San Francisco, Nashville, Minneapolis and a “few other markets” over the next two quarters. Over the next 18 months, the company intends to launch around 20 new markets. The money will also go toward investing in its tech stack and operational infrastructure, Patton said.

Bringg nabs $100M at a $1B valuation for a last-mile delivery platform for retailers

News: Employee mental health platform Oliva raises $2.2M pre-seed round led by Moonfire Ventures

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Just as many other employee services have gone digital, so too is mental health. In the consumer space there are growing startups like Equoo, but the race is now on for the employee. And since telemedicine has gone digital and video-based, so too is mental health provision. A number of companies are already playing in

Just as many other employee services have gone digital, so too is mental health. In the consumer space there are growing startups like Equoo, but the race is now on for the employee.

And since telemedicine has gone digital and video-based, so too is mental health provision. A number of companies are already playing in this space, including Spill Chat, On Mind, Lyra Health, Modern Health, Ginger and TalkSpace For Business.

Oliva’s take on this is not to create a marketplace or pre-recorded videos, but to put trained professionals in front of employees to talk directly to them. And there is even science to back it up. Indeed, some research suggests Psychotherapy via the internet is as good if not better than face-to-face consultations.

Oliva’s on-demand, professional-led mental healthcare for employees and managers has now attracted investment to the tune of a $2.2m pre-seed investment round, led by Moonfire Ventures, the new seed-stage VC firm from Atomico co-founder Mattias Ljungman.

The UK and Spain-based startup has also attracted angel investment from tech executives from Amazon, Booking.com, DogBuddy, Typeform, Hotjar, TravelPerk, and more.

Oliva is founded by Javier Suarez, who previously co-founded TravelPerk, and Sançar Sahin, who previously led marketing teams at Hotjar and Typeform, so both are well blooded in startups.

Suarez says he was inspired to create a mental health startup after the rigors of TravelPerk: “Employees are a company’s greatest asset – the better they feel, the better your company performs. But organizations are not set up to support their employees’ mental health in and outside of the workplace, which creates a massive problem for teammates, managers, and the organization as a whole. We’ve launched Oliva to give employees access to comprehensive online mental healthcare and to help organizations overcome the related challenges—from attracting & retaining talent and training managers to supporting remote workers.”

Privacy is addressed via the use of a secure and encrypted personal portal, where employees can chat with a care provider who matches them with a professional. They get 1-to-1 video therapy sessions from a range of mental health professionals, and can also track their progress.

The team has also attracted Dr. Sarah Bateup, who has spent over two decades teaching and training mental healthcare professionals, who is now Chief Clinical Officer.

She said: “Oliva improves the way mental healthcare is accessed, supported, and paid for, while also adding more ongoing oversight and accountability to the process. Our ambition is for Oliva to be viewed as a badge of quality and set a new standard for workplace mental healthcare.”

Mattias Ljungman, Founder at Moonfire Ventures, added: “Mental health has been an overlooked area of care and wellbeing, especially in the workplace. Oliva’s founders are the only team we’ve seen taking a holistic, impact-driven approach to supporting mental health. While employer-funded mental health is becoming a well-established model in the US, Oliva is the first to bring a truly comprehensive approach to UK and European businesses.”

Oliva platform is integrated with Slack, providing employees with mental health drop-in sessions, therapy courses, and dedicated training and support for managers.

News: Percent raises $5M, aiming to become the ‘Stripe for donations’ to good causes

July 21, 2021
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What with the planet collapsing and democracy under constant attack from all quarters – you know, just the usual – one or two members of the global population have, idly or not, wondered if the private sector might want to step up? I mean, as well as shooting billionaires into space. At the same time, even! Luckily, many businesses want to do better. But there are one or two hurdles. Incorporating “purpose” into their digital offering, such as donating to a non-profit at the end of a moving documentary, is harder than it looks. Businesses don’t have the capacity to build in donation software; they can’t continually verify and audit good causes; and processing donations is fraught with legal complications, compliance, and regulatory risk. What is to be done?

 Pennies is one organization that bills itself as the digital equivalent of the traditional charity collection box. However, perhaps what we need is… drum roll… an API?

Step forward Percent. Founded in 2017, Percent provides an API allowing firms to customers to donate to good causes, matching a donation made when making a payment, or rounding up a financial transaction, for instance.

It’s now closed a $5M venture round led by Morpheus Ventures, allowing it to expand in the US, as well as its existing presence in the UK and Australia. The UK’s Nationwide Building Society – also an early investor and customer of the product – is a co-investor in the round.

The company says its API-first platform takes care of auditing and compliance processes to prevent fraud and money-laundering whilst also parsing tax-efficient disbursements of funds into 200 countries worldwide. It says 7 million non-profit causes have been added to the platform and it’s vetted the potential recipients of donations.

Henry Ludlam, Founder, and CEO of Percent, said: “Percent was founded to become the global API-first infrastructure behind all giving. This will be the foundation for a better, fairer future of capitalism in which every financial transaction has social and environmental good built into it.”

In an interview I asked him if the pandemic had accelerated the opportunity: “Because of COVID, suddenly now we have brands that are really desperate to build purpose into their business in a way that they just weren’t doing 18 months ago. It’s really been an amazing shift. We’ve just seen a huge shift in what consumers expect from businesses. Consumers expect businesses to build purpose into what they do now.”

He said that the product could be even built into – surprise! – streaming services: “Say you’ve seen a documentary. And at the end of the documentary, you feel particularly moved, like you watched a David Attenborough or something like that. You could then actually be able to quickly and easily build donations into the end of it. So using our API, it would pull up a list of nonprofits, so right there and then the customer could make a donation. We’re also working with a crypto platform where you can round down your transactions and donate to any nonprofit as well. There’s loads of really cool stuff we are working on which is coming out soon.”

Kristian Blaszczynski, Managing Partner of Morpheus Ventures, said: “With the events of the last several years, it has become more apparent that aligning brands with purpose is driving consumer behavior and spend. However, today, the process of donating to non-profits is incredibly archaic, manual, and inefficient… Percent’s API-first platform abstracts away all of these complexities and automates the processes, allowing businesses to align closer to their stakeholders and focus on their core business.”

Percent could well be pushing at an open door. Kantar Research says that only 22% of people could name a brand they thought was doing a good job addressing issues such as climate change, plastic waste, and water pollution. On the flip side, 95% of businesses think that “purpose” is at the heart of what they do. The disparity could not be more stark.

Is Percent the stripe for donations? We’re about to find out.

News: Yapily raises $51 million for its open banking API by focusing on infrastructure

July 21, 2021
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Fintech startup Yapily has raised a $51 million Series B funding round led by Sapphire Ventures. The company has been working on a single, unified open banking API for several European markets. Developers can leverage that programming interface to interact with third-party bank accounts directly from their own products. “The core difference between us and

“The core difference between us and most of the players in the space is our focus on the infrastructure,” founder and CEO Stefano Vaccino told me. Unlike Tink or TrueLayer, Yapily operates in the background. You never see a Yapily logo anywhere and the company provides no front-end interface.

Another difference is that Yapily focuses exclusively on API integrations. Due to recent regulatory changes in Europe (PSD2), banks now have to offer official APIs to integrate with third-party services. While some still don’t offer APIs, many of them are now complying with the rules.

By focusing on official APIs, Yapily can offer a snappier and more reliable experience. Other startups working on unified open banking APIs rely on a mix of official APIs, screen scraping and private APIs. Screen scraping can be particularly slow and private APIs sometimes stop working overnight.

When it comes to coverage, Yapily supports more than 1,500 banks across eight different countries. “We have between 90 and 99% coverage in the U.K., France, Spain, Germany, Ireland, Austria, Italy and the Netherlands,” Vaccino said. You can see the full list of banks on this page. According to Vaccino, only Tink has a similar level of coverage in Europe.

You can use Yapily’s API for several different purposes. For instance, the API lets you check the balance on a bank account, check the account holder name and fetch the last two years of transaction.

But the startup has also noticed that more and more customers rely on open banking to initiate payments from a bank account. Compared to card payments, account-to-account payments are cheaper. Cards also expire, leading to churn. Yapily’s API can be used for one-time payments, international payments, bulk payments and recurring payments.

With today’s funding round, the company plans to expand its commercial presence across Europe. In addition to the U.K., Germany and Italy, Yapily will hire new team members focused on France and Spain.

The startup will also build integrations with banks in new markets in Northern Europe and the Baltics — and then beyond Europe. “At the beginning of next year, we’re going to look at Latin America and especially Brazil,” Vaccino said. Brazilian banks already have a lot of open banking APIs.

Right now, Yapily has around 100 customers, such as American Express, QuickBooks, Bux, Vivid Money, Volt and Moneyfarm. By focusing on the infrastructure layer, other fintech startups are taking advantage of Yapily to build applications on top of the startup’s API. It’s an interesting go-to-market strategy and it seems to be working well.

News: Soldo raises $180M for its business expense management platform

July 21, 2021
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Expense management has long been a pain point for employees and accounting departments: for many, tracking and parsing how money is spent on behalf of a company is just too bogged down in legacy software ill-equipped to handle more modern demands. Today, a UK startup building solutions to bring the process into the 21st century

Soldo, which provides a platform to issue employees with prepaid company cards that are linked through to an automated expense management system, has closed $180 million in funding. Soldo currently has some 26,000 customers, ranging from small medium-sized businesses, through to mid-market enterprises and up to large multinationals across 30 countries, with Mercedes Benz, GetYourGuide, Gymshark, Bauli, and Brooks Running among some of the more popular of them. Alongside that, by way of APIs, it also integrates with the popular accounting packages used by organizations today — NetSuite, QuickBooks, Zucchetti, and Xero, along with options to connect Soldo to more than 50 expense management platforms including Concur and Expensify.

The round, a Series C, is being led by Singapore’s Temasek, with Sunley House Capital, Advent International’s crossover fund, Citi Ventures, and previous backers Accel, Battery Ventures and Dawn Capital, also participating. Silicon Valley Bank also provided debt financing of an undisclosed amount.

London-based Soldo also did not disclose its valuation is in a statement on this latest investment, but as a point of reference, when it started to raise this money, back in December, the company was valued at around $278 million, according to PitchBook data. In the event, Soldo said the round was oversubscribed on the back of strong growth for the company: spend volume on its platform has grown four-fold since its series B, a $61 million round in 2019. (Note: Soldo’s main operations are in London, but it also has a small corporate HQ is in Dublin, as it picked up an e-money license in Ireland in 2019, part of its Brexit hedging.)

More generally — and perhaps because many of us are spending more time away from the head office, or perhaps because some of us are finally getting out on the road again to meet people — expense management is getting a lot of attention at the moment. Just earlier this month, one of Soldo’s bigger competitors, Denmark’s Pleo, raised $150 million at a $1.7 billion valuation.

It is a massive market to play for: Europe’s addressable market for expense management runs at $170 billion, the company said.

The crux of the challenge that Soldo aims to fix is that expenses is usually a very fragmented, non-digitised business, and employees that rack up expenses are usually not accountants: that is to say, handling them correctly is not one of their core competencies. The expenses themselves, meanwhile, have evolved to cover a lot of different things, a by-product of everything becoming easier to buy online and also how we work today: they might include subscriptions, travel and entertainment, office supplies for your home office, and making purchases on behalf of your company for marketing campaigns or online advertising, and more.

When expenses are happening digitally, they are easier to track, but very often they are for services or goods being purchased IRL, and that is when the other issues arise: people often forget to get receipts, or lose them before they fill out their reports, or pay for things out of their own pocket, and more.

And on top of that, expenses are made on corporate cards, or by way of bank transfers. The former can be expensive and hard to control, while the latter has its own challenges: it’s a slow process and often requires multiple people to clear a payment.

Soldo’s approach to fixing this is to first of all make it easier to issue employees with cards, prepaid in order to control spend on them better. It then links the card to an app, which creates automatic prompts that pop up for you every time you make a purchase with a card, to be reminded to capture a receipt and upload it.

“Soldo’s vision is manage the total spend across the breadth of a company, whether that be advertising, software subscriptions, travel and entertainment, vendor management or salaries across all payment methods. When we look at this way, expense management is only one of the many possible use cases and cards are only one of the many ways that a company might transfer money to suppliers,” Carlo Gualandri, CEO and founder of Soldo, told TechCrunch in an email. In contrast to competitors like Pleo, he noted “that we have a broader and more complete focus on managing all the possible needs of a company, way beyond travel and expenses. This is important because the value for the customer of using a spend management platform increases as a more significant share of company spend gets moved onto it.”

Without a doubt, the company’s growth since being founded five years ago hit a big speed bump in the form of Covid-19. Its recovery from that is a testament to how it’s found a place even in the current market.

“The pandemic did almost completely wipe out travel and expenses as a use case of companies’ spend – given limited numbers of workers were travelling, or expensing lunches, for example, in lockdown,” said Gualandri. “It was quite shocking to see all of Europe switch off, country by country, in the first weeks of March of last year as the lockdown kept people in their homes. And with that, a significant part of our financial services revenues also disappeared because business travel is the most common and widespread use of corporate cards.” But then, two things happened, he continued:

“The number of other company spend use cases grew significantly. We saw the global shift to ecommerce and the digitalisation of the finance department. From supporting workers at home to other business activities there was a definite move toward online procurement and that requires a card for the payment,” he said. “Also, many companies started distributing their products or services online and with that they shifted a large share of their spend toward online marketing, an example of a key spend which is normally paid for using cards. So, there was definitely a case of certain spend categories going down and others going up and rapidly so. A number of pandemic related problems emerged that we realised we could solve.”

“Our experience in software and payments technology gives us deep insight and we are confident Soldo stands at the forefront of finance digitalisation,” said Simon Lambert, a director at Sunley House, Advent International’s crossover fund, said in a statement. “The company operates in a large and fast-growing market, and we are thrilled to partner with its outstanding management team as they seek to build Europe’s leading pay and spend automation platform.”

Monthly Archives: July 2021