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News: The China tech crackdown continues

We should expect more of the same from the Chinese government: More complaints about the impact of “excessive” capital in its industries, more tumbling share prices and more held IPOs.

The Chinese government’s crackdown on its domestic technology industry continues, with Tencent under fresh pressure despite the company’s efforts to follow changing regulatory expectations.

News broke over the weekend that Beijing filed a civil suit against Tencent “over claims its messaging-app WeChat’s Youth Mode does not comply with laws protecting minors,” per the BBC. And NetEase, a major Chinese technology company, will delay the IPO of its music arm in Hong Kong. Why? Uncertain regulations, per Reuters.


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The latest spate of bad news for China’s technology industry follows a raft of regulatory changes and actions by the nation’s government that have deleted an enormous quantity of equity value. After a period of relatively light-touch regulatory oversight, domestic Chinese technology companies have found themselves on defense after the Chinese Communist Party (CCP) came after their market power in antitrust terms — and some of their business operations from other perspectives. Sectors hit the hardest include fintech and edtech.

Gaming is also in the CCP crosshairs.

After state media criticized the gaming industry as providing the digital equivalent of drugs to the nation’s youth last week, shares of companies like Tencent and NetEase fell. Tencent owns Riot Games, makers of the popular “League of Legends” title. And NetEase generated $2.3 billion in gaming revenue out of total revenues of $3.1 billion in its most recent quarter.

NetEase stock traded around $110 per share in late July. It’s now worth around $90 per share after expectations shifted in light of the gaming news, indicating that investors are concerned about its future performance. Tencent’s Hong Kong-listed stock has also fallen, from HK$775.50 to HK$461.60 this morning.

Tencent tried to head off regulatory pressure, announcing changes to how it controls access to its games after the government’s shot across the bow. The effort doesn’t appear to have worked. That Tencent is being sued by the government despite its publicly announced changes implies that its proposed curbs to youth gaming were either insufficient or perhaps moot from the beginning.

News: How one founder bucked the data-driven trend and created a startup based on inspiration

When Oleg Stavitsky and his co-founders started Endel, they didn’t necessarily expect for it to become a venture-backed business with the likes of Amazon’s Alexa Fund as investors. Stavitsky and his founding team describe themselves as a “collective of imaginative creatives and artists,” and the group had previously developed a unique set of apps for

When Oleg Stavitsky and his co-founders started Endel, they didn’t necessarily expect for it to become a venture-backed business with the likes of Amazon’s Alexa Fund as investors. Stavitsky and his founding team describe themselves as a “collective of imaginative creatives and artists,” and the group had previously developed a unique set of apps for children called Bubl that were designed to foster creative development and avoid the usual tropes of character-based kid-focused entertainment.

Endel is a wholly different project, delivering personalized soundscapes to its users that help them achieve states of focus, relaxation and sleep. These are tailored specifically to individual users, and have more in common with meditative exercises and other wellness techniques than with traditional music. And the company has attracted a lot of big-name attention, including a partnership with Grimes that originated when she reached out because she loved using the app and wanted to see if they could work together.

Oleg talks to us all about his experience building Endel, and what it’s like being part of a highly unconventional founder collective building a consumer tech startup outside of Silicon Valley.

We loved our time chatting with Oleg, and we hope you love yours listening to the episode. And of course, we’d love if you can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Please leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email at found@techcrunch.com, or leave us a voicemail at (510) 936-1618. And please join us again next week for our next featured founder.

News: Equity Monday: Apple’s privacy flap continues as crypto regulation looms

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

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

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and me here.

It’s going to be a busy week, with a Samsung event and a host of earnings reports that we’ll have to pay attention to. But more important there are a few stories still dominating the news cycle:

All that and we also riffed on the Siemens-Sqills deal, Cornerstone OnDemand going private, and Delivery Hero buying a piece of Deliveroo.

And, for added flavor and fun, Canopy Servicing just raised a $15 million Series A, while Siga OT Solutions raised a $8.1 million Series B.

All that, and we got to talk stocks! Hugs and love from the Equity crew — chat Wednesday!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

News: Amazon’s top Indian seller Cloudtail to cease operations after May 2022

Amazon and parent of its top Indian seller Cloudtail have decided to not continue their joint venture after May 2022, the two firms said in a statement Monday, hours after India’s top court ruled that the American e-commerce firm and Walmart’s Flipkart must face antitrust investigations. Billionaire N.R. Narayana Murthy’s Catamaran, the parent firm of

Amazon and parent of its top Indian seller Cloudtail have decided to not continue their joint venture after May 2022, the two firms said in a statement Monday, hours after India’s top court ruled that the American e-commerce firm and Walmart’s Flipkart must face antitrust investigations.

Billionaire N.R. Narayana Murthy’s Catamaran, the parent firm of Cloudtail, and Amazon launched the joint venture in the country in 2014. The joint venture had restructured its ownership in 2019 following India’s new regulations for e-commerce firms.

The development follows India’s Supreme Court ruling earlier in the day that Amazon and Flipkart must face antitrust investigations ordered against them in the country. The Indian watchdog — the Competition Commission of India — ordered an investigation into the firms last year for allegedly promoting select sellers (those in which they own a stake) on their e-commerce platforms and using business practices that stifle competition.

In a statement Monday, the two firms said Cloudtail — registered as Prione Business Services — enabled over 300,000 sellers and entrepreneurs to go online and provided 4 million merchants with digital payment capabilities. The joint venture, they said, helped merchants and small businesses access millions of customers in India.

Cloudtail is one of the largest sellers on Amazon in India. The e-commerce group has stakes in a few more third-party sellers including Appario Retail, which is its joint venture with Patni Group.

“As our JV with Amazon reaches the end of its tenure, I reflect on this successful partnership that introduced the power of digitization and empowered hundreds of thousands of SMBs across big and small towns,” said M.D. Ranganath, President of Catamaran, in a statement.

Long-standing laws in India have constrained Amazon, which has yet to turn a profit in the country, and other e-commerce firms to not hold inventory or sell items directly to consumers. To bypass this, firms have operated through a maze of joint ventures with local companies that operate as inventory-holding firms.

India got around to fixing this loophole in late 2018 in a move that was widely seen as the biggest blowback to the American firm in the country at the time. Amazon and Walmart-owned Flipkart scrambled to delist hundreds of thousands of items from their stores and made their investments in affiliated firms way more indirect.

In June this year, India proposed even tougher e-commerce rules that, among other things, prohibits Amazon, Flipkart and other e-commerce players from running their in-house / private labels. The new proposal asks e-commerce firms to ensure that none of their related and associated parties are listed on their platforms as sellers for selling to customers directly.

“Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally,” said Amit Agarwal, Global Senior VP and Country Head of Amazon India, in a statement.

News: Facebook adds Photobucket and Google Calendar to its data portability options

Facebook announced that it has added two new destinations for when you want to move your data from the social network, including shifting images to Photobucket and event listings to Google Calendar.

Daniel Cooper
Contributor

Daniel Cooper is a senior editor at Engadget.

Facebook has today announced that it has added two new destinations for when you want to move your data from the social network. In a blog post, the company said that users will be able to move their images to Photobucket and event listings to Google Calendar. Product Manager Hadi Michel said that the tool has been “completely rebuilt” to be “simpler and more intuitive,” giving people more clarity on what they can share to which platforms. In addition, users can now launch multiple transfers, with better fine-grain control on what they’re choosing to export in any one transfer.

This is yet another feature piled on to the Data Transfer Project, an open-source project developed by Google, Facebook and Microsoft. Facebook users can already send their photos to Google’s own image-storage service, as well as Dropbox, Blogger, Google Documents and WordPress. This is, in part, a way to address the long-in-progress ACCESS Act, which would enable users to transfer their data to any competing platform. Facebook says that it calls on government to “make clearer rules about who is responsible for protecting that data as it is transferred to different services.”

Editor’s note: This post originally appeared on Engadget.

News: Canopy raises $15M Series A after posting 4.5x customer growth in H1 2021

Canopy’s leaders expect focused fintech products to win out over large bundles of services.

Canopy Servicing announced this morning it recently closed a $15 million Series A. The startup sells software to fintechs and others, allowing customers to create loan programs and service the resulting products.

The company raised a $3.5 million seed round in 2020. Canaan led its Series A, with participation from Homebrew, Foundation and BoxGroup, among others. Per Canopy, its valuation grew by 5x from its seed round to its Series A.

The company has raised $18.5 million to date.

So far this reads much like any other post announcing a new startup funding round, kicking off with an array of information concerning the round and who chipped into the transaction. Next, we’d probably note the competitors, growth and what investors in the company in question have to say about their recent purchase. This morning, however, I want to riff a bit on the future of fintech and how the financial tech stack of the future may be built.

TechCrunch chatted with Canopy CEO Matt Bivons last week. He has an interesting take on where fintech is headed. Let’s discuss it and work through what Canopy does.

Canopy

As with many startups, Canopy was built to scratch an itch. Bivons had run into issues regarding loan servicing in prior jobs. He went on to found a startup that aimed to build a student credit card. But after working on that project, Bivons and co-founder Will Hanson pivoted the company to a B2B-focused concern building loan servicing technology.

Behind the decision was market research undertaken by the Canopy crew that uncovered that a great number of fintech startups wanted to get into the credit market. That makes sense; credit products can provide far more attractive economics to fintech startups than, say, checking and savings accounts. Knowing that loan servicing was a bear and a half to manage, Canopy decided to focus on it.

Bivons framed Canopy as a modern API for loan servicing that can be used to create and manage loans at any point in their lifecycle. He noted that what the startup is doing is akin to what several successful fintech companies have done, namely taking a piece of the fintech world and making it better for developers.

This is where Bivons’ view of the future of fintech products comes into play. According to the CEO, in the future, companies will not buy a monolithic financial technology stack. Instead, he thinks, they will buy the best API for each slice of the fintech world that they need to implement. This matters because we could argue that Canopy is targeting too small a product space. Not that its market isn’t large — debt and its servicing are massive problem spaces — but seeing a company find a niche to focus on makes more sense when its leaders expect focused fintech products to win out over large bundles of services.

Bivons added that much of the fintech focus of the last five years has been on debit, citing Chime, Step and Greenlight as examples. The next decade, he said, is going to focus on credit products. That would be good news for Canopy.

Canopy co-founders via the company. CTO Will Hanson (left) and CEO Matt Bivons (right).

Critically, and for the finance nerds out there, Bivons told TechCrunch that its loan servicing technology does not require the company to take on any credit risk, and that it has gross margins of around 90%. I never trust a too-round number, but the figure indicates that what Canopy has built could grow into an attractive business.

Today, Canopy is a traditional SaaS, though Bivons said that it wants to move toward usage-based pricing in time. Its service costs around 50 cents per account per month, or around $6 per year in its current form. Today, around 40% of Canopy’s customers are seed and Series A-scale startups, though Bivons noted that it is moving up the customer size chart over time.

The resulting growth is impressive. Canopy’s customer count grew 4.5x from February to May of 2021. Of course, Canopy is a young company, so its overall customer base could not have been massive at the start of the year. Still, that’s the sort of growth that makes investors sit up and pay attention, making the Canopy Series A somewhat unsurprising.

Fintech growth doesn’t seem to be slackening much, meaning that the market for what Canopy is selling should expand. Provided that its view that best-of-breed, more particular fintech products will beat larger stacks in the market, it could have an interesting trajectory ahead of it. And now that it has raised its Series A, we can start to annoy it with more concrete questions about its growth from here on out.

News: CommandBar raises $4.8M to make web-based apps searchable

James Evans and his co-founders at CommandBar were working on a different software product when they hit a wall while trying to find certain functionalities within the software.

James Evans and his co-founders at CommandBar were working on a software product when they hit a wall while trying to access certain functionalities within the software.

That’s when the lightbulb moment happened and, in 2020, the team shifted to building a product search engine add-on to make software easier to use.

“We thought this paradigm feels like it could be useful, but it is hard to build well, so we built it,” Evans told TechCrunch.

On Monday, CommandBar emerged from beta and announced its $4.8 million seed round, led by Thrive Capital, with participation from Y Combinator, BoxGroup and a group of angel investors including, AngelList’s Naval Ravikant, Worklife Ventures’ Brianne Kimmel, StitchFix president Mike Smith and others.

CommandBar’s business-to-business tool, referred to as “command k,” was designed to make software simpler and faster to use. The technology is a search interface that sits on top of web-based apps so that users can access functionalities by searching simple keywords. It can also be used to boost new users with recommended prompts like referrals.

CommandBar in Clubhouse. Image Credits: CommandBar

Companies integrate CommandBar by pasting in a line of code and using configuration tools to quickly add commands relevant to their apps. The product was purposefully designed as low-code so that product and customer success teams can add configurations without relying on engineering support, Evans said.

Initially, it was a difficult sell: One of the more challenging parts in the early days of the company was helping customers and investors understand what CommandBar was doing.

“It was hard to describe over the phone, we had to try to get people on Zoom so they could see it,” he said. “It is easier now to sell the product because they can see it being used in an app. That is where many new users come from.”

CommandBar is already being used by companies like Clubhouse.io, Canix and Stacker that are serving hundreds of thousands of users. The most common use case for CommandBar so far is onboarding new software users.

He intends to use the new funding to grow the team, hiring across engineering, sales and marketing. The beta testing was successful in receiving good feedback from the early customers, and Evans wants to reflect that in new products and functionalities that will come out later this year.

Vince Hankes, an investor at Thrive Capital, was introduced to CommandBar through one of its pre-seed investors.

His interest is in B2B software companies and applications, and one of the things that became obvious to him while looking into the space was the natural tension between the simplicity and functionality of apps.

Apps are sometimes hard for even a power user to navigate, he said, but CommandBar makes something as simple as resetting a password easier by being able to search for that term and go right to that page if it is configured that way by the company.

“The types of companies interested in their product are impressive,” Hankes said. “We began to see demand from a broad range of companies that weren’t obvious. In fact, they are using CommandBar as a tool for deeper customer engagement.”

 

News: Wheel the World raises $2M to provide unlimited experiences for travelers with limited accessibility

Friends Alvaro Silberstein and Camilo Navarro came up with the idea for the Wheel the World travel booking site following a 2016 trip to Torres del Paine National Park in Chile.

Friends Alvaro Silberstein and Camilo Navarro came up with the idea for the Wheel the World travel booking site following a 2016 trip to Torres del Paine National Park in Chile. Initially, they thought this type of trip would be near impossible with Silberstein in a wheelchair after a car accident as a teenager left him paralyzed.

Turns out it became the trip of a lifetime thanks to a successful crowdfunding campaign to finance a scouting trip and the purchase of a state-of-the-art hiking wheelchair. Silberstein said with the help of Navarro and other friends, he became the first to complete the Patagonia trek by wheelchair.

Then in 2018 while in graduate school at UC Berkeley, they decided to launch Wheel the World so that others in similar situations as Silberstein could find accessible travel experiences.

Three years later, about 1,300 people have booked trips through the Berkeley, California-based company’s website, which offers over 400 listings to more than 50 destinations. On Monday, they announced $2 million in a seed round led by Chile Global Ventures and Dadneo, with the support of Plug N Play Tech Center and YouTube CEO Susan Wojcicki.

“We have a clear belief and purpose to make the world accessible,” Silberstein said.

Wheel the World collects over 200 data points on hotels through its Accessibility Mapping System, like hotel room measurements, and digitizes them to build its marketplace so that travelers can determine if that particular room will meet their needs. Users go on the site and build a profile, outlining their accessibility needs, and Wheel the World will recommend the best listings.

The company will also work with hotels and tours to attract this new segment of travelers and how to work with people who have disabilities, which Navarro said was 1 billion people globally, along with another large population of family and friends that would be involved in trips.

“Tapping into this market of disability travel will be tapping into more than $100 billion globally,” Silberstein added. Indeed, in 2018 and 2019, travelers with disabilities took a total of 81 million trips, spending $58.7 billion on their own travel alone, according to a 2020 report by Open Doors Organization, a nonprofit organization teaching businesses how to make their goods and services accessible to people with disabilities.

Silberstein and Navarro plan to use the new funding to build out Wheel the World’s software, make additional hires and add travel listings to the platform. Navarro expects to have over 3,000 listings by the end of 2022. The company has 23 employees today, and Silberstein is planning to double that over the next year.

Though the global pandemic was tough on the company, the founders said they used the time to design their system and think about their value proposition. It seems like the results paid off: The company recorded its best months ever for each of the last three months, Silberstein said.

“This year we are seeing travel inventory coming back, more people are vaccinated and we are pushing our inventory to grow more near where our users live so they can travel closer to home as well as far away,” he added.

 

News: Wannabe ‘social bank’ Kroo swerves VCs to raise a $24.5M Series A from HNWs

Launched in February 2018, Kroo, the London-based consumer-facing fintech raised some seed funding last year for its prepaid card service which claims to offer more ‘social features’ in its drive towards offering full-blown banking services. Kroo’s pitch is that it removes friction from financial interactions with friends and family, and throws in some environmental initiatives

Launched in February 2018, Kroo, the London-based consumer-facing fintech raised some seed funding last year for its prepaid card service which claims to offer more ‘social features’ in its drive towards offering full-blown banking services. Kroo’s pitch is that it removes friction from financial interactions with friends and family, and throws in some environmental initiatives as well, such as tree planting.

It’s now raised $24.5 million (£17.7 million) in a Series A funding round led by Rudy Karsan, a high-net-worth tech entrepreneur and founder of Karlani Capital. Kroo will use the funding in its drive towards a full banking license in early 2022.

The fund-raising is fairly unusual for a fintech startup that aspires to become a bank, given the lack of an institutional investor. However, this will give it a lot more freedom as it heads towards bank status next year.

Kroo currently offers a prepaid debit card plus an app to track personal and social finances, such as the ability to create payment groups with friends, track spending, and split and pay bills, removing the usual awkwardness around such things.

The company has also pledged to donate a percentage of profits to social causes, and launched a tree-planting referral scheme, so that every time a customer refers a friend, Kroo plants 20 trees.

Kroo CEO Andrea de Gottardo

Kroo CEO Andrea de Gottardo

CEO Andrea de Gottardo (pictured), who joined Kroo as Chief Risk Officer in 2018, said: “We want to build the world’s greatest social bank: a bank dedicated to its customers and to the world we live in. We’re going to do more than just work with Kroo customers to improve their relationship with money and provide them with access to fair loans. We’re going to offer them ways to actively take part in making our world a better place, like carbon offsetting and a tree-planting referral program.”

Karsan said: “The reason I’m excited about Kroo is that it has a concrete opportunity to dramatically change the way people feel about their bank, for good. Kroo has an exceptionally talented management team and a nimble tech stack that will enable the continuous delivery of banking features customers really care about.”

Speaking to me over a call, de Gottardo added: “We have raised, including the series A, over £30 million through high net worth individuals and syndicated investors. So we still haven’t done an institutional round. That was a choice.”

He elaborated: “We’re lucky enough to have Rudy Karsan, a high net worth, and an extremely supportive pool of investors that keep following on in the rounds. It was our intention get up to a Series A without any institutions, and to be free of the pressure from VC. It’s now highly likely we will go institutional for a Series B round.”

News: LawVu, a cloud-based platform for in-house legal teams, raises $17M NZD from Insight Partners

In-house legal teams play a critical role in companies, but a lot of them don’t have the same kind of technology as their counterparts in sales or finance. Instead, they often rely on email, shared inboxes and spreadsheets. LawVu gives them a cloud-based platform to share legal advice, documents, communicate with each other or external

In-house legal teams play a critical role in companies, but a lot of them don’t have the same kind of technology as their counterparts in sales or finance. Instead, they often rely on email, shared inboxes and spreadsheets. LawVu gives them a cloud-based platform to share legal advice, documents, communicate with each other or external counsel and create reports for the rest of the company, including the C-suite. “LawVu is to legal what Salesforce is to sales teams,” co-founder and chief strategy officer Tim Boyne told TechCrunch in an email.

The Tauranga, New Zealand-based company announced today that it has raised $17 million NZD (about $11.9 million USD) in Series A funding led by Insight Partners, the venture firm known for its ScaleUp program for growth-stage startups, with participation from returning investor AirTree Ventures. Its previous funding was a seed round of about $1.8 million USD led by Shasta Ventures and AirTree, announced in May.

LawVu was founded in 2015 by Boyne, who spent over a decade working in IT and operations at law firms, and Sam Kidd, a SaaS project management expert. Since LawVu was designed for distributed teams and remote workers, adoption increased dramatically in 2020 during the COVID-19 pandemic. LawVu’s annual recurring revenue tripled in 2020 and is continuing to grow. While it has users in 30 countries, about two-thirds of its recurring revenue now comes from the United States and Australia, with clients like Telstra, AMP, Linktree, Expedia, PwC and Instacart.

The company plans to hire key leadership roles in the U.S. for its global go-to-market strategy and open U.S. offices as it continues developing LawVu’s technology.

LawVu is used by in-house legal teams ranging from one person to more than 300. Its fastest adoption is coming from teams of five to 500 legal professionals.

The startup serves in-house legal teams, instead of law firms, because “in-house lawyers have very different incentives and objectives to their private practice peers. This creates a vastly different set of needs for in-house lawyers to be effective at their jobs, particularly on the technology front,” Boyne said.

For example, private practice lawyers focus on specific projects, charging clients on time spent. In contrast, in-house lawyers have to balance “reactive work,” or what their company asks for, and “proactive work,” or anticipating the business’ needs and reducing risks.

LawVu’s cloud platform serves as a “legal workspace” that combines all the tech tools in-house legal teams need. For example, it lets them manage matter (or legal issues that can include advice requests, contract executions, M&A transactions or litigation), contracts, documents, e-billing and outsourced work.

For in-house legal teams, LawVu’s analytics helps the rest of their company understand exactly what they do by providing metrics using data that is usually tucked away in email inboxes or a salesperson’s files, Boyne said.

“Legal work is largely invisible. Unlike other industries, legal is at the very beginning of its data journey,” Boyne said. He added, “as lawyers migrate their work into our workspace, everything is able to be captured as data. For the first time, the legal function now has the ability to see demand, types of work, team capacity, future hiring needs, what law firms are performing well, even process areas to automate with other tools.”

In addition to helping in-house legal teams become more productive, LawVu also helps them prove their value to decision makers. Boyne explained that legal teams are often overlooked because they are viewed as cost centers which do not directly add to a company’s profit, and who come in at the end of a project or decision.

“Typically as a business scales really fast, the legal team can be left behind with the capacity to only fight fires and no time to engage and add much needed strategic value. If you don’t have the data to back up the value and work you are doing, it becomes very hard to get more resources when needed, be this tech or people,” Boyne said.

“LawVu workspace allows them to streamline their service, have information at their fingertips, deliver outcomes quickly, measure and demonstrate value, all freeing them up to truly become a valued member of the business leadership team.”

Insight Partners managing director Rachel Geller will join LawVu’s board. In a statement, she said, “LawVu’s global growth speaks volumes to its future as a business and ability to provide high-value outcomes to legal teams. Its combination of intuitive user experience and excellent customer feedback make LawVu stand out in the legal tech industry.”

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