Tag Archives: Blog

News: A lot of cash and little love: An insurtech story

• August 6, 2021
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The players in the space that we can name and track are generally cash-rich and market-sentiment poor.

Hippo began to trade earlier this week after completing its SPAC combination. The home-focused U.S. neoinsurance provider initially stuck close to its $10 per-share pre-combination price before plummeting yesterday during regular trading.

But Hippo’s declines don’t appear to be of its own doing. Lemonade, another U.S. neoinsurance player — albeit one more focused on rental coverage — posted slightly better-than-expected Q2 results earlier in the week. After its report, Lemonade’s value dropped sharply, and it appears it dragged Hippo down with it.

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The trading volatility is interesting on its own, but what matters more is that the drop in the value of several neoinsurance companies is part of a larger trend. This week’s declines are not incredibly surprising — the market has negatively repriced tech-enabled insurance providers in recent quarters, which can be an uncomfortable situation for a category that previously basked in warm attention from public investors.

At this juncture, we’d typically riff on the new values of public neoinsurance companies and use that data to work our way into a guess concerning what the price declines might mean for related startups. Taking public-market data and using it to better understand private markets is pretty much the national pastime of this column.

Not today. Instead, we’re going to look into an interesting dynamic among neoinsurance companies that may matter a bit more for our comprehension of the private markets. Namely that the players in the space that we can name and track are generally cash-rich and market-sentiment poor.

Public markets are cutting the value of neoinsurance stocks, but the companies behind the valuation declines are rather wealthy. This makes their enterprise values smaller than you might guess from a quick glance at their market cap figures. But do Lemonade or Hippo really care if the stock market decides from one quarter to the next that their businesses are worth plus or minus 10%? Do they have enough cash to pursue their long-term visions, regardless?

Let’s unpack all the numbers, discuss an interview The Exchange held with Hippo CEO Assaf Wand earlier in the week and consider what Lemonade had to say during its earnings call.

News: Raise, a startup building Africa’s Carta, gets backing from 500 Startups

• August 6, 2021
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As startups in Africa continue to grow and raise money at a ridiculous pace, so too will their cap tables expand. Most African startups’ bulk of VC money is from foreign investors, making it imperative for African startups to incorporate abroad, especially in the U.S. The processes for incorporation are quite complicated, and even though

As startups in Africa continue to grow and raise money at a ridiculous pace, so too will their cap tables expand. Most African startups’ bulk of VC money is from foreign investors, making it imperative for African startups to incorporate abroad, especially in the U.S.

The processes for incorporation are quite complicated, and even though most founders still get the hang of it, they risk the chance of messing up their cap tables. For instance, some Nigerian startups are guilty of issuing preferred shares in naira and then canceling to issue dollar-denominated SAFEs when they get incorporated in the U.S.

Raise, a startup building Africa’s Carta is tackling these challenges and has received backing from 500 Startups to scale its technology.

In 2019, Marvin Coleby, Tina Nyamache and Eugene Mutai set out to create a blockchain solution that would make it easier for people to buy and sell shares in pre-IPO companies in Africa. After running several iterations, they found out that most companies still struggled with the concept of equity and liquidity. They spent money managing corporate structures for holding companies in Delaware, Canada, and Europe but maintained paper-based subsidiaries across Africa.

According to Coleby, most of the equity across Africa is still stored, tracked and updated using paper certificates, manual processes and fragmented government databases. This raises transaction costs to manage subsidiaries and issue employee stock options. It also inflates costs to enter and exit positions in private and public companies.

Image Credits: Raise

So they started Raise to help startups, investors, employees, and law firms manage deals, cap tables and corporate compliance. 

On the platform, Raise customers can also automate due diligence, set valuations, track employee stock vesting and make routine documentation for licenses and government documents in Nigeria and Kenya. 

When Raise launched in 2019, it was in private beta and was backed by Binance Labs, the sole investor in its pre-seed round. Since proceeding to a public beta in 2020, Raise has onboarded customers like Anjarwalla & Khanna, Africa’s largest law firm; startups Bamboo, Workpay and Mono; and VC firms like Microtraction and Chrysalis Capital.

But the long-term problem Raise is trying to solve is liquidity, Coleby tells TechCrunch on a call.

“Everything we do is to find a way to make it easier for founders, customers, employees, investors to get liquidity from investing in companies,” he said. “Companies are raising money, people are investing, and employees are getting stock options. However, there are only one or two exits now and then. That’s because we build with the Silicon Valley model where we have to grow, scale until we get some big exit. From our perspective, liquidity doesn’t have to be that way. It can be small little pieces of liquidity that employees and investors get over time.”

By that measure, Africa’s capital markets for private and public companies are painfully illiquid. It takes several months or years to buy or sell equity, and, according to Raise, over $1 trillion of stock in Africa is “illiquid, paper-based and priced in inflationary currencies.”

Nigerian stock trading platforms like Chaka, Bamboo and Trove help Nigerians create liquidity for assets locally and internationally. However, Raise aims to build the platform behind them to streamline more asset classes and investment opportunities.

While that’s still in the works, Raise organizes ownership data for African companies and makes them accessible. It’s a similar play to what Carta, a $3 billion company offering cap table software, does for U.S. companies.

Over time, onboarding cap tables and equity data will also open up use cases for Carta to become a blockchain-based digital asset platform. The plan is to become more like Africa’s Nasdaq for private companies as it hopes to sell indexes, ETFs, futures, and assets for them. Coleby says in that way, Raise will become an equity engine for processing Africa’s hundreds of billion dollars of trade and securities volume.

Coleby says the number of companies going live is increasing 60% month-on-month. The platform manages about 200 cap tables with assets worth more than $400 million. The next phase of growth, according to Coleby, will be onboarding Series A and growth-stage companies onto the platform.

The company is active in Nigeria and Kenya. Coleby says a seed round is in the works to continue growing deeper into those markets and experiment with funding and liquidity operations across the African VC space.

Next, Raise is building a marketplace that continues connecting and educating investors, employees, and founders in one platform with their law firms to use trusted and verified data to do deals and issue stock options to employees.

News: What to expect from Samsung’s next Unpacked

• August 6, 2021
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Foldables! Two, probably! Those are your headliners. Samsung tipped its hand with the event invite, which features a pair of geometrical objects that pretty clearly represent the new Galaxy Z Fold and Galaxy Z Flip. The other headliner is what we won’t be seeing at the event (Deadliner? Endliner?). The company already confirmed via corporate

Foldables! Two, probably! Those are your headliners. Samsung tipped its hand with the event invite, which features a pair of geometrical objects that pretty clearly represent the new Galaxy Z Fold and Galaxy Z Flip.

The other headliner is what we won’t be seeing at the event (Deadliner? Endliner?). The company already confirmed via corporate blog that we won’t be seeing the next version of the Galaxy Note next week. That’s a big break from the device’s long-standing annual refresh cycle.

We still don’t know if this is the end-end of the line for the phablet. Samsung told TechCrunch, “We will not be launching new Galaxy Note devices in 2021. Instead, Samsung plans to continue to expand the Note experience and bring many of its popular productivity and creativity features, including the S Pen, across our Galaxy ecosystem. We will share more details on our future portfolio once we are ready to announce.”

Image Credits: Samsung

Rumors surfaced prior to this revelation that the company may have been forced to put the device on hold, as global supply chain issues continue to hamstring manufacturers. There’s also an argument to be made, however, that Samsung has gradually made the Note redundant over the past several Galaxy S updates.

It seems telling that the company referred to a forthcoming “flagship” in its official Unpacked copy. With the Note out of the picture and the Galaxy S about six months out from a refresh, this appears to refer to the Galaxy Fold gaining the (admittedly ceremonial) title. Whether that means two or three flagships in the company’s Armada remains to be seen.

What we do know, however, is that — like the Galaxy S before it — at least one of the forthcoming foldables will be blurring that Note line.

“I hope you’ll join us as we debut our next Galaxy Z family and share some foldable surprises — including the first-ever S Pen designed specifically for foldable phones,” the company’s president and head of Mobile Communications Business, TM Roh wrote. The executive also promised “even more refined style, armed with more durable, stronger material” on the new Galaxy Z Flip.

Previous — and subsequent — leaks have given us good looks at both the Galaxy Z Flip 3 and Galaxy Z Fold 3. Hell, it wouldn’t be a Samsung event if pretty much everything didn’t leak out prior to the event.

A series of tweets from EVLeaks has given us nearly every angle of the upcoming foldable smartphones, along with (European) prices that put the Fold and Flip starting at €1,899 and €1,099, respectively. Both mark a sizable decrease from the previous generation. That’s nice — if not entirely surprising. Samsung’s plan all along has clearly been a prolonged drop in pricing as foldable technology scaled. We’re still a long ways away from cheap here, but perhaps nudging our way toward the realm of possibility for more users.

Other leaked details for the Fold/Flip include a 7.6/6.7-inch internal display, a Snapdragon 888 processor (both) and 12MP triple/dual cameras, respectively. Interestingly, water resistance is also reportedly on board here.

With a year of virtual events under its belt, the company seems to have a better idea of pacing. Samsung — along with many other companies in the space — took liberties when events went more from in-person to online, meting out announcements event by event. Thankfully, next week’s Unpacked is a much bigger, self-contained event.

The other expected highlights are both wearables. First is the long-awaited fruits of the partnership between Samsung and Google that was announced at I/O. We didn’t get a lot of info at the time, beyond the fact that it will potentially be a boon for users and developers, with the ability to jointly create apps for both the beleaguered Wear OS and Samsung’s custom brand of Tizen.

Image Credits: Samsung

“Samsung and Google have a long history of collaboration, and whenever we’ve worked together, the experience for our consumers has been dramatically better for everyone,” Google SVP Sameer Samat said at a June follow-up to the I/O news. “That certainly holds true for this new, unified platform, which will be rolling out for the first time on Samsung’s new Galaxy Watch. In collaboration with Samsung, we’re thrilled to bring longer battery life, faster performance and a wide range of apps, including many from Google to a whole new wearable experience.”

The company held an (admittedly disappointing) event at MWC focused on the forthcoming watch. There was, however, one key thing missing: the watch. Based on pure speculation, I’d suggest that the wearable just didn’t come together on the timeline Samsung was expecting, but the company went ahead and did a virtual presser at the (mostly virtual) trade show.

The company did, however, announced One UI Watch — a wearable version of its streamlined OS interface. Samsung notes in a press release:

One UI Watch together with the new unified platform will create an entirely new Galaxy Watch experience. As part of the new experience, once you install watch-compatible apps on your smartphone, they will be swiftly downloaded onto your smartwatch. If you’ve customized your clock app on your phone to show the time in different cities around the globe, this will be automatically reflected on your watch as well. And if you block calls and messages from your watch, they will now be blocked on your smartphone, too.

Leaks have also revealed the Galaxy Watch 4 and Galaxy Watch 4 Classic models along with (again) European pricing. They’re reportedly set to start at €279 and €379, respectively, with each featuring multiple sizing options. That last bit was always a sticking point for me with Samsung watches, which have traditionally been fairly massive, knocking out a good number of potential buyers in the process.

The last big piece of the puzzle are the Galaxy Buds 2. The latest upgrade to the company’s entry-level buds are said to be gaining active noise canceling.

Will there be surprises once things kick off at 7AM PT/10AM ET on August 11? Little, ones, probably. These leaks have a tendency to capture things in broad strokes but miss some of the key nuances in the process. And while the company is more than a little familiar with pre-show leaks, it’s still managed to surprise us in the past.

News: SpaceX stacks the full Starship launch system for the first time, standing nearly 400 feet tall

• August 6, 2021
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SpaceX has achieved another major milestone in its Starship fully reusable launch system: It stacked the Starship spacecraft itself on top of a prototype of its Super Heavy booster, which itself is loaded up with a full complement of 29 Raptor rocket engines, and the Starship on top has six itself. The stacked spacecraft now

SpaceX has achieved another major milestone in its Starship fully reusable launch system: It stacked the Starship spacecraft itself on top of a prototype of its Super Heavy booster, which itself is loaded up with a full complement of 29 Raptor rocket engines, and the Starship on top has six itself. The stacked spacecraft now represents the tallest assembled rocket ever developed in history.

This stacking, which happened at SpaceX’s development site in south Texas, is a significant development because it’s the first time the two elements of the full Starship system have been united as one. This is the configuration that will be used for launching the next Starship prototype on its test mission that will hopefully achieve orbit.

Taken together, the massive combined launch system reaches nearly 400 feet tall (around 390 feet, to be more precise), and combined with the orbital launch stand on which it rests, the whole thing is about 475 feet high, which is taller than the Great Pyramid of Giza.

The stacking itself is impressive, but don’t expect it to last: The likely next step is for the two halves of the launch system to be separated again, with both undergoing more work, analysis and testing ahead of a reassembly in preparation for the actual eventual orbital launch test.

As for when the orbital launch test will actually take place, it’s not currently clear. The disassembly, testing and reassembly will take some time, but the company is definitely still aiming to make that happen before end of year.

Stream above from NASASpaceflight.

News: Verifiable secures $17M for its API that manages healthcare provider information

• August 6, 2021
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The Austin-based company’s technology creates an infrastructure for healthcare provider data management that puts providers at the center.

Less than a year after its $3 million seed round, Verifiable snapped up another $17 million for its healthcare provider credentialing API toolkit.

The Austin-based company’s technology creates an infrastructure for healthcare provider data management that puts providers at the center. Verifiable founder Nick Macario told TechCrunch that data fuels critical operations across health systems and insurance carriers, like contracting, credentialing, enrollment, claims and directories. All of this is being done manually now, and often inaccurately, which is leading to billions of dollars of annual waste.

Verifiable’s infrastructure manages healthcare providers and automates the verification of provider data, enabling automation of business processes like credentialing, payer enrollment and network management for virtual healthcare platforms, health systems and insurance payers. It is able to reduce credentialing turnaround times by over 70%, Macario said.

Insurance payers is the newest part of the company’s expansion that includes verifying provider directories. For example, the information that pops up when someone performs an in-network search on their healthcare plan’s website to find a certain provider in their area.

The Altman brothers led the $17 million Series A round and was joined by David Sacks/Craft Ventures and a group of individual investors including Flexport’s Ryan Petersen, Rippling’s Parker Conrad, Front’s Mathilde Collin, Syapse’s Jonathan Hirsch, Todd Goldberg and Rahul Vohra. Tiger Global and existing investors also participated in the round.

Macario was also planning to raise another round of funding, but he said the combination of an inflection point with the product and Jack Altman’s continued investment interest made it a good time to start scaling the team.

Altman said the general space of healthcare technology has potential. It is also a topic near to him — his wife is a nurse. He was speaking to her about what Verifiable was working on, and she told him that there are still teams of people doing this.

“So much data is flowing through, and because healthcare is such a massive part of the country’s GDP, there is so much potential that can be unlocked,” Altman added. “I love Verifiable’s positioning around the provider. They are the people between the healthcare system and the patient, so to have access to their data, patients can form a relationship with them, which is a powerful position.”

In addition to expanding into insurance payers, Macario intends to use the new funding to double his team of 26 employees by the end of the year. The company has openings for engineers, operations and go-to-market talent.

Verifiable works with companies like Lyra Health, Talkspace, Modern Health, Headway, Wheel, Quartet Health, Forward and provider networks to automate credentialing, compliance processes and provider operations.

“We have seen significant growth from customers and users over the past year,” Macario said. “We are making hundreds of thousands of unique verifications and will continue to double down on providers, use cases and payers.”

News: Stage 2 Capital launches $80M Fund II targeting B2B software startups

• August 6, 2021
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The firm’s approach combines venture capital expertise with a diverse community of over 250 limited partners and go-to-market experts who work with portfolio companies to accelerate revenue growth.

Boston go-to-market venture capital firm Stage 2 Capital kicks off its second fund with plans to invest $80 million into B2B software companies.

The firm’s approach combines venture capital expertise with a diverse community of over 250 limited partners and go-to-market experts who work with portfolio companies to accelerate revenue growth.

Firm co-founders Jay Po, a former investor at Bessemer Venture Partners, and Mark Roberge, former chief revenue officer at HubSpot, started Stage 2 Capital in 2018.

While at Bessemer, Po told TechCrunch he met startup founders who were not sure how to scale revenue or build a sustainable sales machine. He saw how big the skills gap was in go-to-market (GtM), so on nights and weekends he took classes on sales development to better understand what was going on.

At the same time, Roberge was on faculty at Harvard Business School and was consulting startups. He, too, saw founders struggle to build out their GtM function, so much so that gathered a bunch of data points and put them all together in a book, “The Sales Acceleration Formula: Using Data, Technology and Inbound Selling to go from $0 to $100 million.”

Stage 2 Capital team. Image Credits: Stage 2 Capital

Po said the firm “was virtual before it was cool,” which is how it has been able to invest in diverse geographies and set its own pace in terms of curating its network and making introductions.

Their goal is to educate startups on the right time to scale. While startups should be growing 100% or 200%, many startups scale prematurely because they see certain companies experience massive growth all at once and assume that is the way to do it, Roberge said.

“We find companies jump into that set of goals prematurely and are not ready for it,” he added. “We help them to understand when and how fast they can go. They are often looking at that prior success, but are not appreciating the context, like who the other company was selling to and the environment at that time.”

Po and Roberge launched their first fund in 2018, raising $15 million, and ended up making 11 investments in late-seed stage to Series A companies and amassed a network of 97 LPs from companies like Gong, Procore, Atlassian, Asana and Drift. The firm wants to assist companies in changing the world, but Roberge said that will take a while, and that peers were impressed with the early signals of the investment thesis.

Investments from the first fund include companies hailing from across the United States, including Sendoso, Ocrolus, Gosite and Reibus.

“Stage 2 Capital stands out from all other VCs because of the expertise and partnership Jay, Mark and the LPs bring,” said Kris Rudeegraap, founder and CEO of Sendoso, in a written statement. “They’ve exceeded expectations on delivering what they promised and we’ve increased our revenue almost 10 times in the short time since they invested.”

The firm’s second fund represents a five-time increase in investment capital, Po said. He expects to be able to invest in another 20 companies with an average check size of $250,000. The pair have already made seven investments so far, including DeepScribe, Arcade, QuotaPath and Sales Impact Academy.

News: Bulk payments startup Comma raises $6M Seed round led by Octopus and Connect

• August 6, 2021
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UK-based open banking bulk payment startup Comma has raised £4.34 million ($6m) in a Seed round of funding led by Octopus Ventures and Connect Ventures. They were joined by investors Village Global, and the founders of Wagestream, Peter Briffet and Portman Wills. The company says it enables small and micro businesses to bulk pay bills,

UK-based open banking bulk payment startup Comma has raised £4.34 million ($6m) in a Seed round of funding led by Octopus Ventures and Connect Ventures. They were joined by investors Village Global, and the founders of Wagestream, Peter Briffet and Portman Wills.

The company says it enables small and micro businesses to bulk pay bills, salaries, and taxes using existing high street small business bank accounts, saving them a lot of time and money in administration. This is because BACS is difficult to obtain and costly and virtual accounts require KYC to setup and add complexity to bookkeeping.

Comma says that during the pandemic, there was a large increase in outsourced financial operations. The availability of open banking bulk payment APIs from several of the High St banks made the product possible, which led to the startup picking up a great deal more business.

The Comma app connects to accounting systems (Xero, Quickbooks, Sage) and allows a business or their accountant to enter and manage supplier bank details without needing bank access. They can pay between 15 – 50 payees at once and the system posts payments against bills back to the accounting system to mark what has been paid.

Founder Tom Beckenham said: “I worked as COO of a business that was billing across continents and paying hundreds of staff. It was a very manual process. It occurred to me that larger businesses had corporate banking and systems that managed payments. Small businesses did not and were largely ignored. I noticed that traditional methods of solving the problem for small businesses had high setup costs – eliminating most of the market.”

He said he saw an opportunity to use new open banking technology to get to this long tail of businesses and solve payments holistically: “We have just got past the £1,000,000 in payments so far. We will get to £1m per week by the end of the quarter.”

In the UK the startup competes to some extent with Credec, Telleroo, and BACS bureaus such as ADP. Internationally, Melio in the US is the closest comparison. Libeo in France is also offering something similar.

Comma payments dashboard

News: Nigeria’s Decagon raises millions to finance and train software engineers

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This past decade, Nigeria has seen several companies cater to the development and growth of software engineers and tech talent in general. It’s a space many in the Nigerian ecosystem like to think is budding yet overcrowded. So when Chika Nwobi started Decagon in 2018, the perception was generally “here comes another tech talent accelerator.”

This past decade, Nigeria has seen several companies cater to the development and growth of software engineers and tech talent in general. It’s a space many in the Nigerian ecosystem like to think is budding yet overcrowded.

So when Chika Nwobi started Decagon in 2018, the perception was generally “here comes another tech talent accelerator.” Two years on, the entrepreneur who is a household name has significantly scaled the company to new heights.

Today, Decagon is announcing its $1.5 million seed round and a student loan financing facility of $25 million from Nigerian financial institution Sterling Bank.

As a serial founder, Nwobi ran a couple of tech businesses, most notably mobile internet company MTech in the early 2000s. With Decagon, Nwobi is charting new territory in the fast-paced startup world after years of investing via his seed-stage firm called L5Lab.

Nwobi says Decagon aims to address the underrepresentation of black people in tech globally, starting with Nigeria. The West African country is the most populous on the continent and the most populous black nation globally.

The dire need for tech talent in Nigeria has become more evident these days, where startups are raising venture capital at a ridiculous pace. Youth unemployment in the country is at a staggering 50%, and while tech has presented an avenue to create jobs, supply isn’t catching up with demand. And more worrisome is the fact that the country’s best talents are leaving in droves to foreign companies in the U.S, Canada, the U.K., and Germany.

So the issue really is supply. If supply is fixed, everyone is happy. That’s what Decagon hopes for by training and connecting engineers to work remotely with both local and international companies. “Microsoft, Facebook and Google have all invested in building engineering offices in Nigeria, but most other companies can’t afford to do that, so we help them access top talent to work as remote engineers,” Nwobi said.

Decagon runs a six-month software engineering program and selects its candidates based on merit. It’s a paid program, and the software engineers are expected to pay about N2 million (~$4,000) tuition to get in. Then, the company employs an income-sharing model when the engineers find work and start earning upon graduation.

But what if the trainees can not afford the program in the first place? The student loan financing takes care of that, and students who take that option are expected to repay N3 million (~$6,000) in the space of three years.

The company claims to be the first to create such merit-based loan financing for students in Nigeria. The financing is in partnership with the financier Sterling Bank and Nigeria’s apex bank, the Central Bank of Nigeria (CBN). It allows Decagon to offer a Pay-After-Learning plan that provides the trainees with laptops, accommodation, internet, meal allowance and a stipend. No upfront payment is expected, says the company.

Decagon says while more than 80,000 people have applied to partake in its program, it has accepted only 440 candidates. That’s a 0.55% acceptance rate. However, Nwobi discloses three figures to show the company is on the right track: the company has recorded a 100% placement rate for its trainees, a 100% loan repayment rate, and a 410% salary increment made by its software engineers after getting placement.

Global tech talent company Andela employed this model before pivoting, and while it didn’t work for them, it seems to be working for Decagon. The reason is likely because Andela used equity financing to carry out these operations, whereas Decagon uses debt. 

Obinna Ukachukwu, the divisional head of Sterling Bank, commenting on the student loan financing, said, “We got involved to support alternative education by providing loans for Nigerian students complemented with financial literacy training. Based on the excellent performance of the current portfolio, it made sense to scale our support to Decagon.”

For its equity financing, Decagon raised money from Kepple Africa and Timon Capital. Some angel investors like Paul Kokoricha, managing partner of the private equity business of ACA, and Tokyo-based UNITED Inc., also took part.

Nwobi says Decagon operates at the intersection of edtech, fintech and the future of work, and the funds will be used to scale its efforts on the three fronts. The company will also be looking to deepen gender inclusion by increasing female participation in its cohorts from 25% (its current stats) to 50% in the next three years.

The CEO adds that the company which he refers to as a “tech talent catalyst” is profitable and growing at 500% per annum. “We see this capital as fuel to accelerate our mission to transform exceptional people, often from under-represented backgrounds, into world-class engineers by connecting them with financing, in-demand skills and their dream jobs.”

“We’re thrilled to work with Decagon to build up the top 0.5% of vetted engineering talent in Africa and help connect them to global tech opportunities. The frequency of engineering leaders from US and European companies in our network ask about sourcing African and Nigerian technical talent has increased at a rapid clip, and we’re excited to lean into that and help Decagon on their mission,” partner at Timon Capital, Chris Muscarella, said in a statement.

Decagon’s raise comes when there is general skepticism about the viability of tech talent accelerators on the continent despite their apparent need.

Before Andela changed its model, it was a clear market leader with over $180 million in its arsenal. Since it’s pivot, funding has relatively stalled for most of these companies. Maybe Decagon’s student loan financing method will be the new trendsetter in a space that desperately needs investment to solve Africa’s talent problem.

News: India’s Vedantu not in talks to sell to Byju’s, top exec says

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Indian online learning platform Vedantu is not in talks to sell the firm to edtech giant Byju’s, a top executive said on Friday. A report on Friday by Indian news outlet Entrackr said Byju’s had offered $700 million to $800 million to acquire Bangalore-based Vedantu, which counts Accel and GGV Capital among its investors. In

Indian online learning platform Vedantu is not in talks to sell the firm to edtech giant Byju’s, a top executive said on Friday.

A report on Friday by Indian news outlet Entrackr said Byju’s had offered $700 million to $800 million to acquire Bangalore-based Vedantu, which counts Accel and GGV Capital among its investors.

In a conversation with TechCrunch, Vedantu co-founder and chief executive Vamsi Krishna said any speculation around the firm engaging with Byju’s for an acquisition or merger is “absolutely 100% inaccurate.”

Byju’s, which has acquired over half a dozen startups, declined to comment.

India’s most valuable startup, Byju’s, has held conversations with multiple education firms in recent quarters as the Bangalore-headquartered giant looks to expand its footprint and broaden its product offerings.

The startup did reach out to both Unacademy and Vedantu last year and offered them both roughly $1 billion, according to four people familiar with the matter. But Byju’s and Vedantu haven’t re-engaged this year, the people said.

Vedantu is separately in advanced stages to close a new financing round that would value it over $1 billion, two sources familiar with the matter told TechCrunch. The round is expected to close within weeks, they added.

News: The first Zambian startup to get into YC is developing Africa’s first card-issuing API

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More than 40 African startups from a handful of countries have gone through YC over the past decade. Zambia joins that list today, and its entrant, Union54, is a worthy first entry. Union54 (54 is a nod to the number of African countries) is a fintech company founded by Perseus Mlambo and Alessandra Martini. The

More than 40 African startups from a handful of countries have gone through YC over the past decade. Zambia joins that list today, and its entrant, Union54, is a worthy first entry.

Union54 (54 is a nod to the number of African countries) is a fintech company founded by Perseus Mlambo and Alessandra Martini. The startup claims to be Africa’s first card-issuing API and only just launched this year. But to paint the picture, Union54 didn’t come out of thin air; it is a project from the couple’s earlier startup Zazu.

Zazu was launched in 2015 as a challenger bank in Zambia. As with any fintech on the continent, Zazu had to create its own debit cards that users could connect to a wallet. Most times, Zazu would have to wait months for partner banks in the country to issue these cards. Mlambo tells me that at one point they had to wait for 18 months.

All this while the founders began to work with banks around the region to start issuing cards themselves. But the banks were lethargic in their approaches. “We just realized that either the processor or the bank was not necessarily well equipped to be able to answer our questions or to be able to give us the product that we’re looking for,” Mlambo said to TechCrunch in an interview.

The startup decided to go for the bullseye and meet with Mastercard. I mean, why wait for banks when you can bag those who issue these cards in the first place, right? Ultimately, the company got a Mastercard Principle membership, the first fintech from Africa, it claims.

As a principal member, Zazu became authorized to act as an “issuing bank.” In other words, they can provide debit cards and as “acquirers,” which means they can provide transaction processing services.

Along the way, the founders realized that to really advance African fintech, it was imperative to make it easier for any African country’s fintech to issue virtual or physical debit cards. So the team spun out Union54 from Zazu. The platform now has several APIs that make it simple for any fintech to issue programmable debit cards.

“We’ve now used our membership to be able to help other companies, any African fintech who wants to issue their own cards. They can just come to us, plug into our APIs, and move quickly, without needing to spend a long time negotiating,” Mlambo said about providing the service for other African fintechs.

The CEO adds that the company targets fintechs that don’t want to spend hundreds of thousands of dollars in setup fees to get virtual or physical cards. Union54 claims to issue cards in weeks via an API that does BIN sponsorship, program management and settlement, among other features.

Being able to do this gives Union54 bragging rights as Africa’s first card-issuing API. Fintechs have rarely looked at this opportunity; most are focused on other segments from payment gateways to wallets. It’s an interesting point to note because somehow, all the big players in these segments end up trying to create virtual and physical cards for their customers and face complications doing so. That’s the void Union54 wants to fill, and although it’s currently in beta, the company boasts of an impressive unnamed clientele signed up on its wait list and currently using the platform.

“The fascinating thing about these companies is that they are not B or C players. They are in the top 5% of African fintech. And for me, I always tell people, we’re now in the golden generation of African fintech. So it’s really the perfect time for a card-issuing product to be able to work with all of these guys considered leaders in their space. It means we really do have something that people want to use every day,” the CEO added.

On the company’s site, there are eight use cases for its API: ledger-based, acquirers/gateways, buy now, pay later, credit union, delivery companies, digital banking, credit card management and corporate cards.

Fintechs using Union54 are also allowed to design the cards and set the currency in which they want the cards to be charged, and set an extensive catalog of who will use them, what they will be used for, when they will be used and how they will be used.

Union54 charges fintechs on a pay-as-you-go basis for every API call. If a fintech company wants to create a physical card, they are charged a flat fee between $7-9 and an undisclosed flat fee when a transaction is made.

Mlambo says getting into the summer batch of YC 2021 has allowed the company to sign up its first set of customers, as most of them have come from YC’s network. He calls YC a program that has been “worth it from day one.”

“I am really excited and proud that Union54 has become the first Zambian fintech to get accepted into Y Combinator. And the second in Southern Africa. As you will know, when global investors look at Africa, they often do so from a West African perspective and our getting into Y Combinator validates a small part of our broader hypothesis: it is possible to service Africa from friendly jurisdictions such as Zambia.”