Technology has been used to manage regulatory risk since the advent of the ledger book (or the Bloomberg terminal, depending on your reference point). However, the cost-consciousness internalized by banks during the 2008 financial crisis combined with more robust methods of analyzing large datasets has spurred innovation and increased efficiency by automating tasks that previously required manual reviews and other labor-intensive efforts.

So even if RegTech wasn’t born during the financial crisis, it was probably old enough to drive a car by 2008. The intervening 11 years have seen RegTech’s scope and influence grow.

RegTech startups targeting financial services, or FinServ for short, require very different growth strategies — even compared to other enterprise software companies. From a practical perspective, everything from the security requirements influencing software architecture and development to the sales process are substantially different for FinServ RegTechs.

The most successful RegTechs are those that draw on expertise from security-minded engineers, FinServ-savvy sales staff as well as legal and compliance professionals from the industry. FinServ RegTechs have emerged in a number of areas due to the increasing directives emanating from financial regulators.

This new crop of startups performs sophisticated background checks and transaction monitoring for anti-money laundering purposes pursuant to the Bank Secrecy Act, the Office of Foreign Asset Control (OFAC) and FINRA rules; tracks supervision requirements and retention for electronic communications under FINRA, SEC, and CFTC regulations; as well as monitors information security and privacy laws from the EU, SEC, and several US state regulators such as the New York Department of Financial Services (“NYDFS”).

In this article, we’ll examine RegTech startups in these three fields to determine how solutions have been structured to meet regulatory demand as well as some of the operational and regulatory challenges they face.

Know Your Customer and Anti-Money Laundering

Source: Tech Crunch Startups | The startups creating the future of RegTech and financial services

Uber and Lyft going public may have put closer public scrutiny on the economics of ridesharing, but it hasn’t had a chilling effect on the level of competition in the space. In the latest development, TechCrunch has learned and confirmed that Bolt, the Estonian ridesharing, scooter and food delivery company that operates across Europe — most recently opening for business in London — and a number of emerging markets, has completed the first tranche of its latest round of funding. The equity injection bumps up the valuation of the company to over $1 billion, money that Bolt plans to use to fuel its international growth.

“We have closed a new funding round, aimed at supporting our recent launch in London and further expansion plans in 2019,” a spokesperson said in a short statement to TechCrunch.

The spokesperson would not elaborate on the size of the round, but technically, this would be a Series C. To date, Bolt has raised $185 million with its last big investment valuing it at $1 billion.

We understand that backers in this latest funding include Nordic Ninjas — a new fund out of Sweden backed by a number of Japanese LPs to invest in Northern European startups (Bolt is based out of Tallinn) — as well as Naya Capital (founded by hedge fund investor Masroor Siddiqui), Creandum, G Squared and Superangel, a fund out of Estonia.

We are still trying to see if we can get further investor names and more details on the numbers. Previous investors in Bolt have included Didi (and by association SoftBank and Uber), Daimler, Korelya Capital and Spring Capital, although we understand Spring is not in this round, and SoftBank is also not actively talking to Bolt for investment.

Bolt has been talking about this funding for a little while now — CEO and founder Markus Villig admitted to me, when asked, four months ago that more funding was on the cards — but according to a short note in PitchBook and a memo sent out to TMT investors (TMT is a shareholder in Bolt), the investment actually only closed this month.

It appears that this is not the final close — there is more dealmaking going on — but so far, the investor list provides some interesting indicators about Bolt.

G Squared has been behind a number of growth rounds for a range of fast-growing and large tech startups, including Pinterest, SoFi, Airbnb, Coursera, Spotify, Postmates and Instacart. It’s also backed some of the biggest names specifically in the category of transportation, including Lyft, Uber, Fair, Getaround, Turo and Auto1. Its involvement speaks to big sums of money, and confidence in a strong growth story, hedging bets (or suggesting collaborations?) by potentially having stakes simultaneously in would-be competitors.

Nordic Ninjas, meanwhile, includes Honda as a shareholder. Added to Daimler, the owner of Mercedes who invested in Bolt last year when it was still called Taxify, this gives an interesting strategic twist to the investment.

And, it could also give Bolt a springboard to consider how to enter the Japanese market, to mark its first move into East Asia, to complement a footprint that includes a mix of developed and emerging markets in Western Europe, countries in the Arabic world, Africa, Eastern Europe, Western Asia and Australia.

Japan is notable for being one of the only developed countries to have, up to now, prohibited ridesharing businesses — that is, where private owners of vehicles work either individually or in networks to provide paid transportation services to other individuals.

That has led to a couple of different outcomes. First, the likes of Uber must partner with established taxi companies in the country to get entry into the market, rather than follow their usual course of business. And second, established taxi companies in Japan, which own and operate their own fleets, have become the most popular operators of ride-hailing apps in what is a fairly fragmented market.

It’s also a challenge to get operating licenses in the country. Didi, the Chinese ride-hailing giant that is also an investor in Bolt, last year launched its own app in the Japan. Didi works with some 10 fleets and provides the logistics and ordering layer on top of those third-party services. Bolt operates a partnership program modeled on the same idea, which helps it build up quickly in the emerging markets where it has gained a lot of ground quickly.

Notably, much of Bolt’s growth seems to have been carefully carved out to focus on markets that have a lot of growth in them and do not have widely-available ridesharing players already in place (London, the biggest ride-hailing market in Europe, being a key exception where Uber figures strong among others that include Gett and Free Now/formerly MyTaxi/Hailo). As Bolt continues to capitalise and grow, it will be interesting to see how and if that pattern will change.

We’ll update this story as we learn more.

Source: Tech Crunch Startups | Uber rival Bolt has closed another tranche of funding at a B+ valuation

DigitalBridge, the Manchester, U.K.-based startup using technology to help solve the “imagination gap” when planning home renovations, has picked up £3 million in new backing.

The round is led by Maven Capital Partners via two funds it manages: £1.5 million from Maven’s Venture Capital Trusts (VCTs) and £1.5 million from the NPIF Maven Equity Finance, a regional development fund managed by Maven as part of the U.K. government’s Northern Powerhouse Investment Fund.

Working with Kingfisher Plc (owners of B&Q and Castorama) for the last couple of years, DigitalBridge has pivoted from its original AR-based home decor planning app to a new product it’s calling a ‘guided design tool’ for kitchens and bathrooms. That’s because, DigitalBridge founder David Levine tells me, home decor visualisation is only a nice-to-have whereas it’s a “must-have” for bathrooms and kitchens.

“Bathrooms and kitchens are much more complex rooms governed by complex design rules,” he explains. “We felt there was a big gap for a guided design tool which actively guides consumers through the entire journey of designing, visualising and buying whilst simplifying the inherent complexity of these rooms”.

There was, perhaps, another factor at play, too: the creation of AR development kits by Apple and Google have made it “really simple” for retailers to build their own home decor and furniture AR solutions, as well as seeing new competitors enter the space.

“Unlike most tools on the market today, DigitalBridge is utterly focused on the consumer and obsessed with creating simple and compelling experiences that enable that consumer to build their dream bathroom or kitchen irrespective of their design experience,” adds Levine. “Crucially, our core skillsets of AI and computer vision are absolutely pivotal to reducing that complexity”.

The DigitalBridge solution resides on a retailer’s website or app — it is already live with B&Q in the U.K. — and guides you through the entire process of creating your new bathroom or kitchen. The the draw for retailers is that by enabling customers to easily design and visualise their new bathroom or kitchen, DigitalBridge can reduce sales cycles, increase conversion rates and average basket sizes, and “drive more engaged customers into store”.

“By using our technology, consumers are now able to visit the B&Q website and design the dream bathroom that will work for them, their family and budget, all without the need for professional assistance,” explains Levine. “Within minutes, they are guided through the process of entering their floor plan, designing the perfect bathroom and bringing it to life in immersive 3D. Once they’re happy with the design, they can buy directly online or go into a store to complete the purchase”.

Meanwhile, with regards to today’s newly disclosed funding round, Jeremy Thompson, Investment Director at Maven, says that DigitalBridge has developed a market-leading AI product which solves a genuine problem for retailers” by helping them engage with customers online. “We are genuinely excited to work with them and support their next stage of growth, as they look to accelerate deployment of the existing product, develop new products and enter new markets, including the U.S.,” he adds.

Source: Tech Crunch Startups | DigitalBridge raises £3M for its ‘guided design tool’ for kitchens and bathrooms

Wind Mobility, the Berlin and Barcelona-based micro-mobility startup that operates e-scooter rentals in Europe, Israel and Asia, is disclosing $50 million in Series A funding. The new round is backed by existing investors. The company last raised $22 million in funding eight months ago from Chinese Source Code Capital and Europe’s HV Holtzbrinck Ventures, after it pivoted away from bike rentals to focus on e-scooters.

Coinciding with the new funding, Wind is unveiling its “third generation” e-scooters, which it says have been designed “from the ground up” for micro-mobility sharing. Eight months in development, the new hardware claims to be significantly more durable and best-in-class for battery life with the ability to drive 65-80km between charges.

The battery is hot swappable, too, meaning that it should be more efficient to run the Wind e-scooter service. That’s because not only can more scooters remain in circulation at any given time, potentially increasing revenue per scooter, but there’s a reduction in the cost of collecting dead batteries for re-charging as they are de-coupled from the scooter itself.

Wind also claims its new scooter has the highest waterproofing with IP67 standard, and that its increased durability should see it last over 12 months when used in the tough sharing environment. That in turn puts the startup on a better unit economic footing since flimsy hardware that needs to be replaced frequently has been a fiscal drag for e-scooter companies using off-the-shelf e-scooters designed primarily for single ownership and not for commercial use.

In the last few months a number of other micro-mobility companies have announced upgrades to their hardware, including European competitors Voi and Tier, although Wind Mobility co-founder and CEO Eric Wang has long talked up the importance of hardware as a differentiator, something he echoed again in a call late last week.

Specifically, Wang argued that it is still “Day One” in the e-scooter rental race and even though Wind hasn’t been as aggressive in its roll out and has deployed less scooters than Lime, Voi and Tier in Europe, he says there is still everything to play for. He said it was a conscious decision not to put too many scooters on the streets until the hardware was good enough to set the company on a path to profitability. Even with the 3rd generation scooter being deployed immediately, the company plans to stagger the launch so that it can gather sufficient data on how the new hardware is performing before hitting the accelerator so to speak.

The early signs look promising, however (in a video Wang sent me via WhatsApp the new Wind scooter survives being plunged into a pond and can be seen driving off after retrival from the water), although the Wind CEO cautions other companies and industry commentators not to underestimate how difficult hardware is. He argues that the detailed design decisions that Wind has made and the resulting improvements aren’t easily replicated any time soon and that there are “no shortcuts” in hardware. This has seen Wind set up its own R&D center in China in order to work as closely with the supply chain as possible.

Meanwhile, I’m told Wind now offers its services in 20 plus cities including operations in Germany, France, Spain, Israel, Austria, Portugal, Demark, Korea and Japan. The company currently employs over 120 people worldwide.

Source: Tech Crunch Startups | Wind Mobility raises additional M and unveils new e-scooter hardware designed for rentals