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News: Atheneum nabs $150M to build out its “research as a service” platform for virtual surveys and interviews

• August 26, 2021
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Data is the new oil, as the saying goes, and today a startup that is helping companies mine for it is announcing a major funding round to expand its business on the back of strong growth. Atheneum, which provides a platform for companies to conduct and analyze research sourced through virtual interviews and surveys with

Data is the new oil, as the saying goes, and today a startup that is helping companies mine for it is announcing a major funding round to expand its business on the back of strong growth.

Atheneum, which provides a platform for companies to conduct and analyze research sourced through virtual interviews and surveys with stakeholders (that is, research solutions that include qualitative expert consultations, quantitative surveys, and big data products to parse the results), has closed $150 million in funding.

CEO Mathias Wengeler said it plans to use the funds to continue expanding geographically, hiring more people for its teams, and building out its technology. Today Atheneum is used by some 500 large enterprises — with customers spanning verticals like life sciences, strategic consulting firms, investment services, and telecoms, media and tech firms — covering a network of some 680,000 experts and so-called opinion leaders and hundreds of thousands of surveys and interviews.

The startup was founded in Berlin a little over a decade ago and now has a second base in New York, and notably, it is already profitable. This funding — led by Guidepost Growth Equity with participation from unnamed limited partners; existing investors Crosslantic Capital Management, Michael Brehm, Vogel Communications Group; and Atheneum’s founding management team — thus is coming opportunistically to jump on what has been strong growth for the startup, especially in the last year: in 2020 the company grew nearly 50%, Wengeler said, and this year growth has bumped up to 80%.

Atheneum’s growth is coming on the back of two trends in the world of enterprise.

The first is a bigger shift to digital transformation that we’ve been witnessing, spurred by the enforced remote working practices that came out of Covid-19. Specifically, companies need tools to let them continue carrying out work in more virtualised formats, and Atheneum has created a framework for those that have typically sourced data through live interactions to keep doing that using tools like Zoom, online surveys, and cloud-based analytics to “read” and better understand all the resulting data.

The second trend is that companies making strategic decisions based on data and feedback from the field are increasingly wanting to tap into innovations in data science and technology overall to increase their access to more data and insights.

This second trend has been growing for years and predates the pandemic, which is also one of the reasons investors have been knocking: these are trends that go beyond circumstantial ones that might evolve when/if we return back to our more traditional work patterns). Wengeler and his co-founders Ammad Ahmad and Marta Margolis (pictured above) all previously worked in management consulting, and Wengeler said that he was moved to start Atheneum to more directly address that opportunity.

“Primary and raw data were out there already,” he said, “but their importance is increasing. What a doctor sees [firsthand] has a major impact on how a pharmaceutical company plans its strategy for commercialization and more, and that is different in every country. I felt that the world was getting more internationalized and we needed more raw data, we needed more market research. We see Atheneum as a platform for knowledge, based on being a one-stop-shop for primary research.”

Roshen Menon, who led the investment for Guidepost, also notes that is also a reflection of how companies themselves have evolved to build more specialized products.

“I think the fundamental shift has been from a reliance on secondary to primary research,” he said. “Companies want to do their research directly. The second shift in the broader research tech space has the long and broad research approach. Things have gotten more specialized. ‘Let’s take a survey and understand this specific problem.’

“In life sciences, we have seen a shift from blockbuster drugs to specialized research and medicine and treatments for so-called orphan diseases. And there is much more of that across all industries. Services like Atheneum’s really allow customers to get access and insights from a sea of data.”

On top of this, presenting this platform as a SaaS-style cloud service, which combines both technology and human interaction to better tailor it to the needs of the clients as needed — and of course alongside the humans who are providing the raw data in the first place — fits in with how a lot of businesses want to engage with technology and IT services these days.

That will mean an increasing number of competitors to Atheneum that will be looking to leverage their own reach and tools to dive deeper into the ‘research as a service’ space. That could include more activity from survey and direct marketing companies like SurveyMonkey or MailChimp, or even companies like Saleforce or Microsoft’s LinkedIn that want to build an ever-bigger set of tools to help people do business more efficiently.

Or even companies like Google, which up to now have focused surveys more on consumer responses that are sold as advertising units (you may have come across these on sites like YouTube), but obviously have a big opportunity to build more cloud-based services to cater to their growing roster of business customers that might better leverage their in-house big data and AI capabilities. Wengeler said that up to now, LinkedIn has been one of the more active and interesting players in building new tools that might most directly compete with what it builds.

It is nonetheless a big opportunity: Atheneum cites figures from Deloitte that estimate the data and intelligence market is worth some $22 billion currently.

Atheneum, partly as a result of raising relatively little money previously and partly a result of focusing just on its growth and client business, has been somewhat under the radar until now. To that end, it is not disclosing its valuation today. But as an indicator of where it might be, Wengeler confirmed that the startup had raised less than $20 million previously, and that this latest investment gives new backers a minority stake with the founders remaining the biggest shareholders in the company.

Menon, who is taking a board seat with this round, added in an interview that Atheneum is making “well north” of $50 million in revenue annually.

News: Point Pickup acquires e-commerce platform GrocerKey for $42M to allow for same-day delivery

• August 26, 2021
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The acquisition of GrocerKey, which brings on board the company’s front-end consumer-facing sales engine and predictive analytics, puts the data and brand recognition back in the retailer’s hands. 

Point Pickup Technologies, a last-mile delivery service, has acquired white label e-commerce platform GrocerKey for $42 million, according to the company. With the acquisition, Point Pickup now allows retailers to offer same-day delivery, from purchase to fulfillment to delivery, under their own brand name, rather than under third parties like Instacart.

Instacart made a killing delivering groceries and goods for retailers during the coronavirus pandemic, with a generated revenue of $1.5 billion in 2020 and $35 billion worth of sales. The company has an estimated 9.6 million active users and over 500,000 “shoppers” who pick up and deliver goods. 

New entrants to the same-day delivery space are cropping up, which aligns with the expected growth of the industry to $20.36 billion by 2027, according to Allied Market Research. But companies like Amazon and Instacart that perform this service and host a delivery marketplace get far more than sales revenues – they also get all the customer data. 

Tom Fiorita, founder and CEO of Point Pickup, says retailers should have a right to own that data themselves. The acquisition of GrocerKey, which brings on board the company’s front-end consumer-facing sales engine and predictive analytics, puts the data and brand recognition back in the retailer’s hands. 

“If you are a customer of Instacart, you pay them a subscription, they own your buying habits, your credit cards, your data,” Fiorita told TechCrunch. “Instacart was a big thing during COVID because no one had delivery. So now retailers woke up and said, ‘Oh my god, I can’t just have an Instacart-like marketplace be selling my goods. I don’t know who my customers are, I don’t have their credit cards or data.’ And you know data runs the world now.”

Another recent, if not smaller, entrant to the space is Canadian startup Tyltgo, which operates under a similar model to what Point Pickup is now offering via GrocerKey’s technology. In both cases, the buyer goes directly onto the merchant’s platform and places the order through them, so it feels like they’re interacting with the brand they purchased from. And on Tuesday, Walmart also announced a new white-label delivery service that would allow other merchants to tap into its own delivery platform to get orders to their customers.

Fiorita founded Point Pickup in 2015 as a reaction to Amazon’s increased omnipotence with the noble, if not naive, mission to “save local America.” Walmart and Kroger, two of the largest grocery retailers in the U.S., are Point Pickup’s top customers, alongside other nationwide retailers like Albertsons, Giant Eagle and more. But Fiorita believes the service his company is offering will be even more impactful when it starts to work its way down to the mid-sized and small- to medium-sized businesses. 

“We built this not only to survive against Amazon or Instacart, but because these small businesses need this for their survival,” Fiorita said. “These companies will no longer survive if they continue to allow other companies to sell their merchandise and to own their customer, including the data, the advertising, the CPG dollars and everything.”

Point Pickup offers deliveries of everything from grocery to general merchandise, pharmacy and oversized delivery. It has a network of 350,000 gig economy drivers across 25,000 ZIP codes in all 50 states. 

Since the company’s network of drivers, who often pick and pack the products for the customer as well as deliver the goods, comprises all gig workers with their own vehicles, Point Pickup doesn’t have a clear picture of the percentage of its fleet that’s electric or hybrid. Fiorita speculates it’s probably on par with nationwide rates, if not higher. A recent Pew Research report found that 7% of Americans say they own an EV or hybrid. 

Fiorita said that the type of car drivers own is taken into account during recruitment and that the company is looking for ways to incentivize drivers to buy less polluting vehicles. He also said Point Pickup is a vehicle-agnostic platform, meaning it’s piloting other delivery vessels like drones and autonomous robots.

To compete with the big dogs in the space like Amazon and Walmart, both of which are either testing or already have in place electric delivery vans, Point Pickup will have to also make efforts to beef up its strategy in the carbon emissions space.

News: Watch Blue Origin launch a test of NASA’s future Moon landing tech live

• August 26, 2021
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Blue Origin’s last launch was its landmark first human flight, carrying Jeff Bezos, his brother, Wally Funk and Oliver Daemen to suborbital space. Today, it’s flying New Shepard again — without any people on board, this time, but with a key payload from NASA that will test technologies the agency is using to develop a

Blue Origin’s last launch was its landmark first human flight, carrying Jeff Bezos, his brother, Wally Funk and Oliver Daemen to suborbital space. Today, it’s flying New Shepard again — without any people on board, this time, but with a key payload from NASA that will test technologies the agency is using to develop a human landing system for future missions to the Moon.

The NS-17 launch (which stands for New Shepard 17, since it’s the 17th time Blue Origin’s fully reusable suborbital rocket will be taking off) is set to take place at 9:35 AM EDT (6:35 AM PDT) from the company’s launch site in West Texas. The NASA payload on board will test technologies including a Doppler Lidar sensor array that should help future lunar landing craft get a very detailed picture of the details of the landing zone they’re targeting, and a Descent Landing Computer that handles processing of the sensor data. Blue Origin flew elements of this system once before, last October, and improvements have already been made based on that test that are integrated into this version.

The Blue Origin capsule also carries a number of other experiments, both form NASA and from academic institutions including the University of Florida. The launch plan includes a take-off, separation of the capsule, a controlled return powered landing for the booster, and a parachute-assisted landing for the capsule after a few minutes spent in suborbital space.

You can watch the livestream above, kicking off around 30 minutes prior to the target lift-off time.

News: UK names John Edwards as its choice for next data protection chief as gov’t eyes watering down privacy standards

• August 26, 2021
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The UK government has named the person it wants to take over as its chief data protection watchdog, with sitting commissioner Elizabeth Denham overdue to vacate the post: The Department of Digital, Culture, Media and Sport (DCMS) today said its preferred replacement is New Zealand’s privacy commissioner, John Edwards. Edwards, who has a legal background,

The UK government has named the person it wants to take over as its chief data protection watchdog, with sitting commissioner Elizabeth Denham overdue to vacate the post: The Department of Digital, Culture, Media and Sport (DCMS) today said its preferred replacement is New Zealand’s privacy commissioner, John Edwards.

Edwards, who has a legal background, has spent more than seven years heading up the Office of the Privacy Commissioner In New Zealand — in addition to other roles with public bodies in his home country.

He is perhaps best known to the wider world for his verbose Twitter presence and for taking a public dislike to Facebook: In the wake of the 2018 Cambridge Analytica data misuse scandal Edwards publicly announced that he was deleting his account with the social media — accusing Facebook of not complying with the country’s privacy laws.

An anti-‘Big Tech’ stance aligns with the UK government’s agenda to tame the tech giants as it works to bring in safety-focused legislation for digital platforms and reforms of competition rules that take account of platform power.

If confirmed in the role — the DCMS committee has to approve Edwards’ appointment; plus there’s a ceremonial nod needed from the Queen — he will be joining the regulatory body at a crucial moment as digital minister Oliver Dowden has signalled the beginnings of a planned divergence from the European Union’s data protection regime, post-Brexit, by Boris Johnson’s government.

Dial back the clock five years and prior digital minister, Matt Hancock, was defending the EU’s General Data Protection Regulation (GDPR) as a “decent piece of legislation” — and suggesting to parliament that there would be little room for the UK to diverge in data protection post-Brexit.

But Hancock is now out of government (aptly enough after a data leak showed him breaching social distancing rules by kissing his aide inside a government building), and the government mood music around data has changed key to something far more brash — with sitting digital minister Dowden framing unfettered (i.e. deregulated) data-mining as “a great opportunity” for the post-Brexit UK.

For months, now, ministers have been eyeing how to rework the UK’s current (legascy) EU-based data protection framework — to, essentially, reduce user rights in favor of soundbites heavy on claims of slashing ‘red tape’ and turbocharging data-driven ‘innovation’. Of course the government isn’t saying the quiet part out loud; its press releases talk about using “the power of data to drive growth and create jobs while keeping high data protection standards”. But those standards are being reframed as a fig leaf to enable a new era of data capture and sharing by default.

Dowden has said that the emergency data-sharing which was waived through during the pandemic — when the government used the pressing public health emergency to justify handing NHS data to a raft of tech giants — should be the ‘new normal’ for a post-Brexit UK. So, tl;dr, get used to living in a regulatory crisis.

A special taskforce, which was commissioned by the prime minister to investigate how the UK could reshape its data policies outside the EU, also issued a report this summer — in which it recommended scrapping some elements of the UK’s GDPR altogether — branding the regime “prescriptive and inflexible”; and advocating for changes to “free up data for innovation and in the public interest”, as it put it, including pushing for revisions related to AI and “growth sectors”.

The government is now preparing to reveal how it intends to act on its appetite to ‘reform’ (read: reduce) domestic privacy standards — with proposals for overhauling the data protection regime incoming next month.

Speaking to the Telegraph for a paywalled article published yesterday, Dowden trailed one change that he said he wants to make which appears to target consent requirements — with the minister suggesting the government will remove the legal requirement to gain consent to, for example, track and profile website visitors — all the while framing it as a pro-consumer move; a way to do away with “endless” cookie banners.

Only cookies that pose a ‘high risk’ to privacy would still require consent notices, per the report — whatever that means.

“There’s an awful lot of needless bureaucracy and box ticking and actually we should be looking at how we can focus on protecting people’s privacy but in as light a touch way as possible,” the digital minister also told the Telegraph.

The draft of this Great British ‘light touch’ data protection framework will emerge next month, so all the detail is still to be set out. But the overarching point is that the government intends to redefine UK citizens’ privacy rights, using meaningless soundbites — with Dowden touting a plan for “common sense” privacy rules — to cover up the fact that it intends to reduce the UK’s currently world class privacy standards and replace them with worse protections for data.

If you live in the UK, how much privacy and data protection you get will depend upon how much ‘innovation’ ministers want to ‘turbocharge’ today — so, yes, be afraid.

It will then fall to Edwards — once/if approved in post as head of the ICO — to nod any deregulation through in his capacity as the post-Brexit information commissioner.

We can speculate that the government hopes to slip through the devilish detail of how it will torch citizens’ privacy rights behind flashy, distraction rhetoric about ‘taking action against Big Tech’. But time will tell.

Data protection experts are already warning of a regulatory stooge.

While the Telegraph suggests Edwards is seen by government as an ideal candidate to ensure the ICO takes a “more open and transparent and collaborative approach” in its future dealings with business.

In a particularly eyebrow raising detail, the newspaper goes on to report that government is exploring the idea of requiring the ICO to carry out “economic impact assessments” — to, in the words of Dowden, ensure that “it understands what the cost is on business” before introducing new guidance or codes of practice.

All too soon, UK citizens may find that — in the ‘sunny post-Brexit uplands’ — they are afforded exactly as much privacy as the market deems acceptable to give them. And that Brexit actually means watching your fundamental rights being traded away.

In a statement responding to Edwards’ nomination, Denham, the outgoing information commissioner, appeared to offer some lightly coded words of warning for government, writing [emphasis ours]: “Data driven innovation stands to bring enormous benefits to the UK economy and to our society, but the digital opportunity before us today will only be realised where people continue to trust their data will be used fairly and transparently, both here in the UK and when shared overseas.”

The lurking iceberg for government is of course that if wades in and rips up a carefully balanced, gold standard privacy regime on a soundbite-centric whim — replacing a pan-European standard with ‘anything goes’ rules of its/the market’s choosing — it’s setting the UK up for a post-Brexit future of domestic data misuse scandals.

You only have to look at the dire parade of data breaches over in the US to glimpse what’s coming down the pipe if data protection standards are allowed to slip. The government publicly bashing the private sector for adhering to lax standards it deregulated could soon be the new ‘get popcorn’ moment for UK policy watchers…

UK citizens will surely soon learn of unfair and unethical uses of their data under the ‘light touch’ data protection regime — i.e. when they read about it in the newspaper.

Such an approach will indeed be setting the country on a path where mistrust of digital services becomes the new normal. And that of course will be horrible for digital business over the longer run. But Dowden appears to lack even a surface understanding of Internet basics.

The UK is also of course setting itself on a direct collision course with the EU if it goes ahead and lowers data protection standards.

This is because its current data adequacy deal with the bloc — which allows for EU citizens’ data to continue flowing freely to the UK — was granted only on the basis that the UK was, at the time it was inked, still aligned with the GDPR. So Dowden’s rush to rip up protections for people’s data presents a clear risk to the “significant safeguards” needed to maintain EU adequacy. Meaning the deal could topple.

Back in June, when the Commission signed off on the UK’s adequacy deal, it clearly warned that “if anything changes on the UK side, we will intervene”.

Add to that, the adequacy deal is also the first with a baked in sunset clause — meaning it will automatically expire in four years. So even if the Commission avoids taking proactive action over slipping privacy standards in the UK there is a hard deadline — in 2025 — when the EU’s executive will be bound to look again in detail at exactly what Dowden & Co. have wrought. And it probably won’t be pretty.

The longer term UK ‘plan’ (if we can put it that way) appears to be to replace domestic economic reliance on EU data flows — by seeking out other jurisdictions that may be friendly to a privacy-light regime governing what can be done with people’s information.

Hence — also today — DCMS trumpeted an intention to secure what it billed as “new multi-billion pound global data partnerships” — saying it will prioritize striking ‘data adequacy’ “partnerships” with the US, Australia, the Republic of Korea, Singapore, and the Dubai International Finance Centre and Colombia.

Future partnerships with India, Brazil, Kenya and Indonesia will also be prioritized, it added — with the government department cheerfully glossing over the fact it’s UK citizens’ own privacy that is being deprioritized here.

“Estimates suggest there is as much as £11 billion worth of trade that goes unrealised around the world due to barriers associated with data transfers,” DCMS writes in an ebullient press release.

As it stands, the EU is of course the UK’s largest trading partner. And statistics from the House of Commons library on the UK’s trade with the EU — which you won’t find cited in the DCMS release — underline quite how tiny this potential Brexit ‘data bonanza’ is, given that UK exports to the EU stood at £294 billion in 2019 (43% of all UK exports).

So even the government’s ‘economic’ case to water down citizens’ privacy rights looks to be puffed up with the same kind of misleadingly vacuous nonsense as ministers’ reframing of a post-Brexit UK as ‘Global Britain’.

Everyone hates cookies banners, sure, but that’s a case for strengthening not weakening people’s privacy — for making non-tracking the default setting online and outlawing manipulative dark patterns so that Internet users don’t constantly have to affirm they want their information protected. Instead the UK may be poised to get rid of annoying cookie consent ‘friction’ by allowing a free for all on citizens’ data.

 

News: PawaPay raises $9M seed backed by MSA, 88mph and Mr Eazi’s Zagadat Capital

• August 26, 2021
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When companies create digital payments-facing solutions for African countries outside Nigeria and South Africa, building around mobile money is key. It’s literally a no-brainer. The concept is ubiquitous in East Africa, but since mobile money is a telecom operators-led initiative, there are technical complexities in creating a unified infrastructure for businesses that need it. PawaPay,

When companies create digital payments-facing solutions for African countries outside Nigeria and South Africa, building around mobile money is key. It’s literally a no-brainer.

The concept is ubiquitous in East Africa, but since mobile money is a telecom operators-led initiative, there are technical complexities in creating a unified infrastructure for businesses that need it.

PawaPay, a U.K.-based and Africa-focused payments company, is one of the few tackling these complexities. The company takes the technical integrations from telecom operators like AirtelTigo, Econet, MTN, Safaricom, Orange and Vodafone and collapses them into one API for businesses.

Today, the company is announcing that it has closed $9 million in seed funding to scale its operational presence, recruit talent and expand into new markets.

U.K.-based fund 88mph co-led the round with China-based MSA Capital, with participation from Zagadat Capital, Kepple Ventures and Vunani Capital.

PawaPay spun off last year from online sports betting company betPawa. The company is led by CEO Nikolai Barnwell, betPawa’s former head of New Markets, Africa. He also sits on the board of 88mph.

According to him, starting pawaPay was to help people send and receive money internationally using mobile money.

An interesting instance would be freelancers in Ivory Coast trying to receive payment for services on a global payments platform. Typically, they would be required to use a bank account or card. But in places like Ivory Coast, where mobile money is prevalent, that becomes an issue.

How big is mobile money in Africa?

From the World Bank’s 2015 figures, there are over 350 million unbanked individuals in sub-Saharan Africa. Various inadequacies are responsible for this stat, but from banks’ perspectives, no incentive drives them to actually bank these people.

Most unbanked people rarely earn minimum wage in their respective countries, so it’s difficult for banks to make money off these individuals. Also, opening a bank account involves many KYC (Know Your Customer) processes for this population subset.

But one thing is for sure: The unbanked have mobile phones, and there are over 850 million mobile connections in Africa.

This huge market is why mobile money is prevalent across the continent. Telecom operators using proxies bypassed the banks and created their own systems to allow people to transfer money securely using mobile phones for low or no transfer fees.

So, individuals with phone numbers can have basic financial services such as savings and transfers. 

Presently, up to $500 billion flows through the mobile money market in sub-Saharan Africa yearly via the accounts of nearly 300 million active monthly users. This alternative financial infrastructure is one of the largest globally.

But it’s also one of the most underdeveloped because each telecom operator having its own unique mobile money product has created a fragmented infrastructure. For merchants, fragmentation means that it can be exorbitantly expensive to use at scale. 

Mobile money and card payment gateways

PawaPay wants to position itself as a market leader in high-volume mobile money payments while delivering reliability and transparency for merchants. Its API allows these merchants to access telecom operators’ mobile money systems to receive and send payments to millions of mobile money accounts. 

“We’re making a very heavy bet on the rise of mobile money and all the complexities that arise out of mobile money and all the infrastructure that needs to be built around payments with mobile money at its core,” Barnwell told TechCrunch.

“And the way we’re looking at the continent, we’re looking at adoption rates for mobile money growing at an insane speed. It has become quite obvious that this is a very significant financial infrastructure and there’s a lot of it that’s been missing if you want to work serious volume and businesses on mobile money.”

PawaPay handles local operations, compliance, regulatory cover and bank accounts, making it simple to receive payments in a new market.

The company claims to be handling over 10 million transactions on its rails per week, with beta operations in 10 African countries — Cameroon, DRC, Ghana, Kenya, Mozambique, Nigeria, Rwanda, Tanzania, Uganda, and Zambia.

Barnwell tells TechCrunch that although these transaction volumes look impressive, pawaPay would have done more if not for regulatory hurdles and licensing approaches in each market. 

“In each country, we’ve had to start from scratch with the right data to understand how they look at the space, at the licensing sheets, what kind of companies they want to license, what kind of requirements they’re looking for, how we can work quite closely with them to make sure that they’re comfortable with us,” he said.

However, the CEO states that while regulation slows down processes, it’s important for pawaPay because many unregulated companies operate without licenses and unstable technologies, some with the intention to commit fraud.

“We’ve gone in and decided we want to be completely regulated. We want to be completely covered in all the markets, with full licensing and be a very stable reliable premium product in these markets,” he added.

There are various payment gateways facilitating payments for businesses in Africa, like Flutterwave, DPO Group, Yoco, MFS Africa and Paystack. But in terms of pure mobile money play, MFS Africa is a clear competitor to pawaPay. Both platforms are largely focused on addressing the unique challenges accompanying mobile money, while the others drive innovation around bank and card payments.

MFS Africa connects over 300 million mobile money wallets enabling a range of banks, telcos, money transfer operators and other financial institutions interoperability at scale in Africa through a single integration point.

PawaPay isn’t far off. Barnwell says the company connects to nearly the same number of wallets and hopes to go live across 30 to 40 telco integrations soon.

While East Africa (buoyed by Kenya’s M-Pesa) has largely been the critical market for mobile money, West Africa is catching up nicely. Last year, West Africa recorded 198 million mobile money accounts compared to East Africa’s 293 million.

The West African region also grew the most in terms of transaction value by 46%, to over $178 billion, and countries like Ghana, Senegal and Ivory Coast are leading the charge, which presents a vast opportunity for these payment gateway providers, unlike the card payments market where two countries are prominent. 

“Although most of the attention is on card payments, the big giant in payments in Africa really is mobile money,” the CEO said.

PawaPay’s mobile money focus was a key reason Kresten Buch, founder of 88mph and chairman of pawaPay, led the round. He said that when 88mph actively invested in Africa a decade ago, “one of the key drivers was that mobile money was a superior payment method to credit and debit cards when used for online payment.” 

For Zagadat Capital, here’s what founder Oluwatosin Ajibade (also known as Mr Eazi, a singer-songwriter and entrepreneur popular in Africa’s music scene), who also sits on pawaPay’s board, had to say about the investment:

Being investors hugely focused on Africa and very familiar with the landscape, we believe that mobile money-focused fintech is not just one of the most exciting places to invest but also one of the most important bridges to ensuring financial inclusion of the billions of people across the continent. The kicker for us was that we believe in the clear mission, vision and strategy and we are confident that the pawaPay team is the best team to achieve it.

News: ‘No code’ process automation platform, Leapwork, fires up with $62M Series B

• August 26, 2021
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Copenhagen-based process automation platform Leapwork has snagged Denmark’s largest ever Series B funding round, announcing a $62 million raise co-led by KKR and Salesforce Ventures, with existing investors DN Capital and Headline also participating. Also today it’s disclosing that its post-money valuation now stands at $312M.  The ‘no code’ 2015-founded startup last raised back in

Copenhagen-based process automation platform Leapwork has snagged Denmark’s largest ever Series B funding round, announcing a $62 million raise co-led by KKR and Salesforce Ventures, with existing investors DN Capital and Headline also participating.

Also today it’s disclosing that its post-money valuation now stands at $312M. 

The ‘no code’ 2015-founded startup last raised back in 2019, when it snagged a $10M Series A. The business was bootstrapped through earlier years — with the founders putting in their own money, garnered from prior successful exits. Their follow on bet on ‘no code’ already looks to have paid off in spades: Since launching the platform in 2017, Leapwork has seen its customer base more than double year on year and it now has a roster of 300+ customers around the world paying it to speed up their routine business processes.

Software testing is a particular focus for the tools, which Leapwork pitches at enterprises’ quality assurance and test teams.

It claims that by using its ‘no code’ tech — a label for the trend which refers to software that’s designed to be accessible to non-technical staff, greatly increasing its utility and applicability — businesses can achieve a 10x faster time to market, 97% productivity gains, and a 90% reduction in application errors. So the wider pitch is that it can support enterprises to achieve faster digital transformations with only their existing mix of in-house skills. 

Customers include the likes of PayPal, Mercedes-Benz and BNP Paribas.

Leapwork’s own business, meanwhile, has grown to a team of 170 people — working across nine offices throughout Europe, North America and Asia.

The Series B funding will be used to accelerate its global expansion, with the startup telling us it plans to expand the size of its local teams in key markets and open a series of tech hubs to support further product development.

Expanding in North America is a big priority now, with Leapwork noting it recently opened a New York office — where it plans to “significantly” increase headcount.

“In terms of our global presence, we want to ensure we are as close to our customers as possible, by continuing to build up local teams and expertise across each of our key markets, especially Europe and North America,” CEO and co-founder Christian Brink Frederiksen tells TechCrunch. “For example, we will build up more expertise and plan to really scale up the size of the team based out of our New York office over the next 12 months.

“Equally we have opened new offices across Europe, so we want to ensure our teams have the scope to work closely with customers. We also plan to invest heavily in the product and the technology that underpins it. For example, we’ll be doubling the size of our tech hubs in Copenhagen and India over the next 12 months.”

Product development set to be accelerated with the chunky Series B will focus on enhancements and functionality aimed at “breaking down the language barrier between humans and computers”, as Brink Frederiksen puts it

“Europe and the US are our two main markets. Half of our customers are US companies,” he also tells us, adding: “We are extremely popular among enterprise customers, especially those with complex compliance set-ups — 40% of our customers come from enterprises banking, insurance and financial services.

“Having said that, because our solution is no-code, it is heavily used across industries, including healthcare and life sciences, logistics and transportation, retail, manufacturing and more.”

Asked about competitors — given that the no code space has become a seething hotbed of activity over a number of years — Leapwork’s initial response is coy, trying the line that its business is a ‘truly special snowflake’. (“We truly believe we are the only solution that allows non-technical everyday business users to automate repetitive computer processes, without needing to understand how to code. Our no-code, visual language is what really sets us apart,” is how Brink Frederiksen actually phrases that.)

But on being pressed Leapwork names a raft of what it calls “legacy players” — such as Tricentis, Smartbear, Ranorex, MicroFocus, Eggplant Software, Mabl and Selenium — as (also) having “great products”, while continuing to claim they “speak to a different audience than we do”.

Certainly Leapwork’s Series B raise speaks loudly of how much value investors are seeing here.

Commenting in a statement, Patrick Devine, director at KKR, said: “Test automation has historically been very challenging at scale, and it has become a growing pain point as the pace of software development continues to accelerate. Leapwork’s primary mission since its founding has been to solve this problem, and it has impressively done so with its powerful no-code automation platform.”

“The team at Leapwork has done a fantastic job building a best-in-class corporate culture which has allowed them to continuously innovate, execute and push the boundaries of their automation platform,” added Stephen Shanley, managing director at KKR, in another statement.

In a third supporting statement, Nowi Kallen, principal at Salesforce Ventures, added: “Leapwork has tapped into a significant market opportunity with its no-code test automation software. With Christian and Claus [Rosenkrantz Topholt] at the helm and increased acceleration to digital adoption, we look forward to seeing Leapwork grow in the coming years and a successful partnership.”

The proof of the no code ‘pudding’ is in adoption and usage — getting non-developers to take to and stick with a new way of interfacing with and manipulating information. And so far, for Leapwork, the signs are looking good.

News: Mental health startup Intellect gets $2.2M to expand across Asia

• August 26, 2021
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Intellect, a Singapore-based startup that wants to make mental health care more accessible in Asia, announced it has raised $2.2 million in pre-Series A funding. It is taking part in Y Combinator’s current batch, which will hold its Demo Day at the end of this month. The round was led by returning investor Insignia Venture

Intellect, a Singapore-based startup that wants to make mental health care more accessible in Asia, announced it has raised $2.2 million in pre-Series A funding. It is taking part in Y Combinator’s current batch, which will hold its Demo Day at the end of this month.

The round was led by returning investor Insignia Venture Partners and included participation from Y Combinator, XA Network and angel investors like Rainforest co-founder J.J. Chai; Prenetics and CircleDNA founder Danny Yeung; and Gilberto Gaeta, Google’s director of global HR operations.

This brings Intellect’s total funding since it launched a year ago to $3 million, including a seed round announced in December 2020 that was also led by Insignia.

Intellect offered two main product suites: a consumer app with self-guided programs based on cognitive behavioral therapy techniques, and a mental health benefits solution for employers with online therapy programs and telehealth services. The startup now claims more than 2.5 million app users, and 20 enterprise clients, including FoodPanda, Shopback, Carousell, Avery Dennison, Schroders and government agencies.

Founder and chief executive officer Theodoric Chew told TechCrunch that Intellect’s usage rate is higher than traditional EAP helpline solutions. On average, its mental health benefits solution sees about 20% to 45% engagement within three months after being adopted by companies with more than 5,000 employees.

In many Asian cultures, there is still a lot of stigma around mental health issues, but that has changed over the last year and a half as people continue to cope with the emotional impact of the COVID-19 pandemic, Chew said. “From individuals, to companies, insurers and governments, all these different types of people and organizations are today prioritizing mental healthcare on an individual and organizational level in an extremely rapid manner.”

Intellect protects user privacy with zero-knowledge encryption, so the startup and employers don’t have access to people’s records or communications with their coaches and counsellors. Any insights shared with employers are aggregated and anonymized. Chew said the company is also compliant with major data privacy regulations like ISO, HIPAA and GDPR.

Intellect is currently collaborating in 10 studies with institutions like the National University of Singapore, King’s College London, University of Queensland and the Singapore General Hospital. It says studies so far have demonstrated improvements in mental well-being, stress levels and anxiety among its users.

The new funding will be used to expand into more Asian markets. Intellect currently covers 12 countries and 11 languages.

 

News: Jolla hits profitability ahead of turning ten, eyes growth beyond mobile

• August 26, 2021
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A milestone for Jolla, the Finnish startup behind the Sailfish OS — which formed, almost a decade ago, when a band of Nokia staffers left to keep the torch burning for a mobile linux-based alternative to Google’s Android — today it’s announcing hitting profitability. The mobile OS licensing startup describes 2020 as a “turning point”

A milestone for Jolla, the Finnish startup behind the Sailfish OS — which formed, almost a decade ago, when a band of Nokia staffers left to keep the torch burning for a mobile linux-based alternative to Google’s Android — today it’s announcing hitting profitability.

The mobile OS licensing startup describes 2020 as a “turning point” for the business — reporting revenues that grew 53% YoY, and EBITDA (which provides a snapshot of operational efficiency) standing at 34%.

It has a new iron in the fire too now — having recently started offering a new licensing product (called AppSupport for Linux Platforms) which, as the name suggests, can provide linux platforms with standalone compatibility with general Android applications — without a customer needing to licence the full Sailfish OS (the latter has of course baked in Android app compatibility since 2013).

Jolla says AppSupport has had some “strong” early interest from automotive companies looking for solutions to develop their in-case infotainment systems — as it offers a way for embedded Linux-compatible platform the capability to run Android apps without needing to opt for Google’s automotive offerings. And while plenty of car makers have opted for Android, there are still players Jolla could net for its ‘Google-free’ alternative.

Embedded linux systems also run in plenty of other places, too, so it’s hopeful of wider demand. The software could be used to enable an IoT device to run a particularly popular app, for example, as a value add for customers.

“Jolla is doing fine,” says CEO and co-founder Sami Pienimäki. “I’m happy to see the company turning profitable last year officially.

“In general it’s the overall maturity of the asset and the company that we start to have customers here and there — and it’s been honestly a while that we’ve been pushing this,” he goes, fleshing out the reasons behind the positive numbers with trademark understatement. “The company is turning ten years in October so it’s been a long journey. And because of that we’ve been steadily improving our efficiency and our revenue.

“Our revenue grew over 50% since 2019 to 2020 and we made €5.4M revenue. At the same time the cost base of the operation has stablized quite well so the sum of those resulted to nice profitability.”

While the consumer mobile OS market has — for years — been almost entirely sewn up by Google’s Android and Apple’s iOS, Jolla licenses its open source Sailfish OS to governments and business as an alternative platform they can shape to their needs — without requiring any involvement of Google.

Perhaps unsurprisingly, Russia was one of the early markets that tapped in.

The case for digital sovereignty in general — and an independent (non-US-based) mobile OS platform provider, specifically — has been strengthened in recent years as geopolitical tensions have played out via the medium of tech platforms; leading to, in some cases, infamous bans on foreign companies being able to access US-based technologies.

In a related development this summer, China’s Huawei launched its own Android alternative for smartphones, which it’s called HarmonyOS.

Pienimäki is welcoming of that specific development — couching it as a validation of the market in which Sailfish plays.

“I wouldn’t necessarily see Huawei coming out with the HarmonyOS value proposition and the technology as a competitor to us — I think it’s more proving the point that there is appetite in the market for something else than Android itself,” he says when we ask whether HarmonyOS risks eating Sailfish’s lunch.

“They are tapping into that market and we are tapping into that market. And I think both of our strategies and messages support each other very firmly.”

Jolla has been working on selling Sailfish into the Chinese market for several years — and that sought for business remains a work in progress at this stage. But, again, Pienimäki says Jolla doesn’t see Huawei’s move as any kind of blocker to its ambitions of licensing its Android alternative in the Far East.

“The way we see the Chinese market in general is that it’s been always open to healthy competition and there is always competing solutions — actually heavily competing solutions — in the Chinese market. And Huawei’s offering one and we are happy to offer Sailfish OS for this very big, challenging market as well.”

“We do have good relationships there and we are building a case together with our local partners also to access the China market,” he adds. “I think in general it’s also very good that big corporations like Huawei really recognize this opportunity in general — and this shapes the overall industry so that you don’t need to, by default, opt into Android always. There are other alternatives around.”

On AppSupport, Jolla says the automative sector is “actively looking for such solutions”, noting that the “digital cockpit is a key differentiator for car markers — and arguing that makes it a strategically important piece for them to own and control.

“There’s been a lot of, let’s say, positive vibes in that sector in the past few years — new comers on the block like Tesla have really shaken the industry so that the traditional vendors need to think differently about how and what kind of user experience they provide in the cockpit,” he suggests.

“That’s been heavily invested and rapidly developing in the past years but I’m going to emphasize that at the same time, with our limited resources, we’re just learning where the opportunities for this technology are. Automative seems to have a lot of appetite but then [we also see potential in] other sectors — IoT… heavy industry as well… we are openly exploring opportunities… but as we know automotive is very hot at the moment.”

“There is plenty of general linux OS base in the world for which we are offering a good additional piece of technology so that those operating solutions can actually also tap into — for example — selected applications. You can think of like running the likes of Spotify or Netflix or some communications solutions specific for a certain sector,” he goes on.

“Most of those applications are naturally available both for iOS and Android platforms. And those applications as they simply exist the capability to run those applications independently on top of a linux platform — that creates a lot of interest.”

In another development, Jolla is in the process of raising a new growth financing round — it’s targeting €20M — to support its push to market AppSupport and also to put towards further growing its Sailfish licensing business.

It sees growth potential for Sailfish in Europe, which remains the biggest market for licensing the mobile OS. Pienimäki also says it’s seeing “good development” in certain parts of Africa. Nor has it given up on its ambitions to crack into China.

The growth round was opened to investors in the summer and hasn’t yet closed — but Jolla is confident of nailing the raise.

“We are really turning a next chapter in the Jolla story so exploring to new emerging opportunities — that requires capital and that’s what are looking for. There’s plenty of money available these days, in the investor front, and we are seeing good traction there together with the investment bank with whom we are working,” says Pienimäki.

“There’s definitely an appetite for this and that will definitely put us in a better position to invest further — both to Sailfish OS and the AppSupport technology. And in particular to the go-to market operation — to make this technology available for more people out there in the market.”

 

News: Taktile makes it easier to leverage machine learning in the financial industry

• August 26, 2021
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Meet Taktile, a new startup that is working on a machine learning platform for financial services companies. This isn’t the first company that wants to leverage machine learning for financial products. But Taktile wants to differentiate itself from competitors by making it way easier to get started and switch to AI-powered models. A few years

Meet Taktile, a new startup that is working on a machine learning platform for financial services companies. This isn’t the first company that wants to leverage machine learning for financial products. But Taktile wants to differentiate itself from competitors by making it way easier to get started and switch to AI-powered models.

A few years ago, when you could read ‘machine learning’ and ‘artificial intelligence’ in every single pitch deck, some startups chose to focus on the financial industry in particular. It makes sense as banks and insurance companies gather a ton of data and know a lot of information about their customers. They could use that data to train new models and roll out machine learning applications.

New fintech companies put together their own in-house data science team and started working on machine learning for their own products. Companies like Younited Credit and October use predictive risk tools to make better lending decisions. They have developed their own models and they can see that their models work well when they run them on past data.

But what about legacy players in the financial industry? A few startups have worked on products that can be integrated in existing banking infrastructure. You can use artificial intelligence to identify fraudulent transactions, predict creditworthiness, detect fraud in insurance claims, etc.

Some of them have been thriving, such as Shift Technology with a focus on insurance in particular. But a lot of startups build proof-of-concepts and stop there. There’s no meaningful, long-term business contract down the road.

Taktile wants to overcome that obstacle by building a machine learning product that is easy to adopt. It has raised a $4.7 million seed round led by Index Ventures with Y Combinator, firstminute Capital, Plug and Play Ventures and several business angels also participating.

The product works with both off-the-shelf models and customer-built models. Customers can customize those models depending on their needs. Models are deployed and maintained by Taktile’s engine. It can run in a customer’s cloud environment or as a SaaS application.

After that, you can leverage Taktile’s insights using API calls. It works pretty much like integrating any third-party service in your product. The company tried to provide as much transparency as possible with explanations for each automated decision and detailed logs. As for data sources, Taktile supports data warehouses, data lakes as well as ERP and CRM systems.

It’s still early days for the startup, and it’s going to be interesting to see whether Taktile’s vision pans out. But the company has already managed to convince some experienced backers. So let’s keep an eye on them.

News: The SEC and the DOJ just charged this startup founder with fraud, saying he lied to Tiger and others

• August 26, 2021
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Today, both the U.S. Department of Justice and the Securities and Exchange Commission charged Manish Lachwani, cofounder of a mobile app testing company Headspin, with fraud. The SEC says he violated antifraud provisions and the civil penalties it’s seeking include a permanent injunction, a conduct-based injunction, and an officer and director bar of Lachwani. The

Today, both the U.S. Department of Justice and the Securities and Exchange Commission charged Manish Lachwani, cofounder of a mobile app testing company Headspin, with fraud. The SEC says he violated antifraud provisions and the civil penalties it’s seeking include a permanent injunction, a conduct-based injunction, and an officer and director bar of Lachwani.

The DOJ, which actually arrested Lachwani today, has accused him of one count of wire fraud and one count of securities fraud, and the associated penalties if he’s found guilty are are more harsh, including, for wire fraud, a maximum sentence of 20 years in prison and a fine of $250,000. If he’s found guilty of securities fraud, he faces a maximum sentence of 20 years in prison and a fine of $5,000,000.

Both the the SEC and the DOJ say Lachwani — who led the company as CEO until May of last year — defrauded investors out of $80 million by falsely claiming that his company, Headspin, had “achieved strong and consistent growth in acquiring customers and generating revenue” when he was pitching its Series C round to potential backers.

By the SEC’s telling, his apparent bluster was largely an attempt to secure the round at a so-called unicorn valuation. That apparent plan worked, too, with Headspin attracting coverage in Forbes in February of last year after Dell Technologies Capital, Iconiq Capital and Tiger Global Management provided the company with $60 million in Series C funding at a $1.16 billion valuation. Forbes reported at the time that the valuation was double the valuation investors  assigned HeadSpin when it closed its Series B round in October 2018.

The SEC also says that Lachwani was looking to enrich himself, saying he did so “by selling $2.5 million of his HeadSpin shares in [that] fundraising round during which he made misrepresentations to an existing HeadSpin investor.”

The DOJ’s federal complaint offers many more details. It says that the success of Headspin — a six-year-old, Palo Alto-based company that helps apps and devices work in different environments around the world and which sells subscriptions to its service – was being misrepresented to investors by Lachwani beginning in at least early November 2019, when the company was fundraising.

The complaint alleges that “in materials and presentations to potential investors, Lachwani reported false revenue and overstated key financial metrics of the company. . . he maintained control over operations, sales, and record-keeping, including invoicing, and he was the final decision maker on what revenue was booked and included in the company’s financial records.” It says that in its investigation, it discovered “multiple examples” of Lachwani “instructing employees to include revenue from potential customers that inquired but did not engage Headspin, from past customers who no longer did business with Headspin, and from existing customers whose business was far less than the reported revenue.”

Among other materials, Lachwani “provided investors false information that overstated Headspin’s annual recurring revenue . . . by approximately $51 to $55 million,” says the DOJ.

According to the complaint, Lachwani’s fraud unraveled after the company’s Board of Directors conducted an internal investigation that revealed significant issues with HeadSpin’s reporting of customer deals and revised HeadSpin’s valuation down from $1.1 billion to $300 million.

Indeed, in August of last year, The Information reported that “after an internal review of financial irregularities forced [Headspin] to restate its financials,” the company planned to lower the value of its Series C stock by nearly 80%.

The outlet reported at the time that Lachwani had been replaced by another executive. That person, according to LinkedIn, is Rajeev Butani, who joined Headspin as its chief sales officer around the time its Series C round was being announced in February of last year.

Nikesh Arora, a former SoftBank president, the current CEO and chairman of Palo Alto Networks, and a now-former board member of Headspin, helped lead the internal review, said The Information.

The SEC’s investigation is continuing, it says. Meanwhile, the DOJ notes in its announcement that “a complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.”

In the meantime, it doesn’t look very promising right now for Lachwani, who, according to Forbes, previously sold a mobile cloud business to Google and wound up co-founding Headspin after Yahoo cofounder Jerry Yang introduced him to Brien Colwell, a former Palantir and Quora engineer was working at the time on a different startup.

Colwell remains with Headspin as its CTO. He has not been named in either the SEC or the DOJ’s complaints relating to Headspin. The company itself, which has reportedly been cooperating with the government’s investigation, was also not charged.

Pictured above, left to right, Headspin founders Lachwani and Colwell.