<span>Monthly Archives</span><h1>July 2021</h1>
    MAGIC Fund raises $30M to scale its global founders-backing-founders fund
    Startups

    MAGIC Fund raises $30M to scale its global founders-backing-founders fund

    July 6, 2021

    Influential entrepreneurs like Paul Graham and Naval Ravikant always preach the need for startups to have founders-turned-investors on their cap table. As Ravikant puts it, “founders want to know that the people they are taking money from have first-hand experience.” 

    His platform AngelList has helped individual founders-cum-investors source and participate in deals via collectives. However, some venture firms have taken this up a notch by bringing founders to create a fund and invest together.

    Today, one of such, MAGIC Fund, a global collective of founders, is announcing that it has raised a second fund of $30 million to continue backing early-stage startups across Africa, Europe, Latin America, North America, and Southeast Asia.

    Since the firm’s first fund launched in 2017, MAGIC has invested in 70 companies at pre-seed and seed stages across these emerging markets. Some of these companies include Retool, Novo, Payfazz, and Mono.

    MAGIC Fund has 12 founders who act as general partners. TechCrunch caught up with managing partner Adegoke Olubusi and operating partner Matt Greenleaf to learn more about the fund’s thesis and activities.

    Olubusi, who had built and exited a couple of startups over the years, also dabbled with angel investing for some time. In 2017, Olubusi’s current startup Helium Health got accepted into Y Combinator. It was there he met more founders like him who were angel investors with impressive portfolios. The interesting bit? Each founder wanted to invest in other companies during YC’s Demo Day.

    “So about three years ago, I was at YC, and I was going to invest in my own batch. I was pitching on the day, but I was also listening to other pitches. However, it wasn’t just me; there were many other founders as well,” Olubusi said.

    After building and exiting multiple startups, some founders turn into angel investing to support startups and their ecosystems. However, most of them tend to go alone and are stuck with cutting checks in their local markets, which limits opportunities.

    Some MAGIC portfolio companies

    Here’s a scenario. In 2016, when unicorns Flutterwave and Kavak raised their seed rounds in Nigeria and Mexico respectively, an African biotech founder who knew about Kavak and a Latin American edtech founder interested in African fintech would not have had the capacity to evaluate those deals even if they wanted; the reason being a lack of reach and experience in both the industry or geography

    Olubusi and the other founders knew this would be a limitation in the long run if they went solo. Thus, they decided to create MAGIC. The idea was to bring global founders together with diverse skillsets in diverse industries and geographies to evaluate deals better and drive value for each other. Hence, they can participate in two unicorns instead of one.

    “Instead of us investing individually because obviously, we have somewhat limited capacity in terms of how much time we have as founders because of our respective companies, why don’t we collaborate on a strategy together and co-invest together?”

    “The way we thought of MAGIC was a fund of micro funds built by founders for founders,” Greenleaf continued.

    Fund of micro funds but more than money

    In some of the personal conversations I’ve had with founders about their investors, a recurring theme has been that the most useful investors didn’t necessarily sign the biggest checks. It’s a theme Olubusi also relates to all too well.

    “It was like every time we think about it, everyone who gave the most money rarely had time for us. It was so frequent that we all identified this as an actual thing. What actually drove value for us were other investors who were founders and operators, and other experienced people who were able to help us find product-market fit and fight regulators. These were actually the people in the trenches with us.”

    Olubusi believes the early-stage part of investing, particularly in pre-seed and seed, is where VCs who are founder-operators find their sweet spot. They are precious when startups are trying to figure out product-market fit. And unlike traditional investors who are looking to get multiples on investments, Olubusi argues that for founders-investors, what matters is how much value they can drive for startups.

    Image Credits: MAGIC Fund

    MAGIC’s play is even more essential considering that it also plays in emerging markets where on-the-ground operational help is needed in industries with numerous unknowns and uncertainties.

    “There is so much money in the market now and early-stage decision making at pre-seed and seed should be left in the hands of founders. Because think about it really, to make an evaluation of whether I should invest in a healthcare or fintech company in Africa, it makes sense to have those who’ve spent years battling through it in the trenches make those decisions. And what we’re trying to do with the fund is publish as much information as possible and keep performing at the 100 percentile and say this is still the best strategy and is very scalable.”

    MAGIC Fund 1 was $1.5 million and Olubusi says the investments performed 5x over the period of three years. As some of these companies exited, their founders invested in MAGIC and came on board as Fund 2 partners. 

    MAGIC has also enlisted additional investors who, according to Olubusi, are respected for their investing abilities and ecosystem support. For instance, Olugbenga Agboola, Flutterwave CEO, is known across the African tech ecosystem as a founder who goes out of his way to help established and up-and-coming fintech companies. Hendra Kwik of Payfazz has such a reputation in Southeast Asia as well. They, alongside other founders, join MAGIC as limited partners.

    Per the firm’s statement, one-third of the entire fund was contributed by the founder GPs. For its LPs, diversity play is considered as 50% of them are black while 33% are women. Some of them include Michael Seibel, Tim Draper, Rappi’s Andres Bilbao, Paystack’s Shola Akinlade, Katie Lewis, and Octopus Ventures’ Kirsten Connell. For its partners, MAGIC has brought on the likes of Stitchroom’s Tom Chen, Medumo’s Adeel Yang, Juice’s Michael Lisovetsky, and Troy Osinoff, and Evercare’s Temi Awogboro.

    Magic Fund 2 will be writing $100,000 to 300,000 checks at pre-seed and seed stages focusing on fintech, healthcare, SaaS and enterprise, women’s health, developer tools.

    What does the fund look for in founders? Olubusi gives two answers. One, MAGIC wants to back founders with incentives to stick through the hard times of a company.

    “At pre-seed and seed, you don’t have enough data about a company to make an investment decision. Your bet is entirely on the founder and the founding team. What we know, having done this several times, is that things get harder. So when we’re looking at the founder, we’re evaluating whether or not the founder has the grit to stick through the toughest times which are going to come up.”

    The second indicator factors if the founder has the willingness, openness, the flexibility to learn and use that knowledge to succeed. Greenleaf believes these strategies have incredibly helped the firm fund exceptional companies and maintain good relationships with founders.

    “Most of these founders don’t view us as their investors. They view us as fellow founders who are helping them along their journey. I think that also ties into them keeping it real with us and allows us to see them as people, and not just founders. That’s one of the things that have worked in our favor,” he said.

    World News

    Tuesday’s heat indexes expected to reach 105 in parts of DC region – WTOP

    July 6, 2021

    Tuesday’s heat indexes expected to reach 105 in parts of DC region  WTOPCT Weather: 100 Degree Heat, Severe Storms And Flooding Concerns  Patch.comHeat advisory goes into effect for much of central Pennsylvania  WGAL Susquehanna Valley Pa.Heat advisory in effect for most of CT Tuesday, Wednesday  CT PostDangerous heat, ‘severe’ thunderstorms forecast for Staten Island on Tuesday: NWS  SILive.comView Full Coverage on Google News

    World News

    Chicago shootings: 100 shot, 18 fatally, in weekend gun violence across city, CPD says – WLS-TV

    July 6, 2021

    Chicago shootings: 100 shot, 18 fatally, in weekend gun violence across city, CPD says  WLS-TVAt least 150 people fatally shot in more than 400 shootings over the Fourth of July weekend  CNN Bloody July Fourth weekend leaves 150 fatally shot in more than 400 shootings nationwide  Fox NewsMan with concealed carry license steps in, shoots gunman who shot 3, Chicago police say  The Pantagraph2 Chicago officers shot, wounded trying to break up crowd  The IndependentView Full Coverage on Google News

    World News

    New Jersey man who went on racist rant draws protests at his home – The Washington Post

    July 6, 2021

    New Jersey man who went on racist rant draws protests at his home  The Washington PostWhite man who pushed Black neighbor in racist rant arrested  Yahoo NewsRacist rant video New Jersey: Edward Cagney Mathews taken into police custody  WPVI-TVNJ Man Accused Of Harassing Black Neighbor In Video Gets Jeered By 100 Angry Protesters  Mahwah-Ramsey Daily VoiceMan Gives Out Address Amid Racist Rant, Pelted By Protesters During Arrest  TMZView Full Coverage on Google News

    World News

    The Capitol riot, 6 months on: Here are the missed warnings and failures that led to insurrection on US soil – Business Insider

    July 6, 2021

    The Capitol riot, 6 months on: Here are the missed warnings and failures that led to insurrection on US soil  Business InsiderFive big questions about the Jan. 6 select committee | TheHill  The HillHunt for Capitol attackers still on 6 months after Jan. 6  The Associated PressRobbins: GOP stance on Jan. 6 belies reality of Capitol footage  Boston HeraldEditorial: How low can they go? House GOP leadership runs fast from the insurrection truth  STLtoday.comView Full Coverage on Google News

    Startups

    Free Extra Crunch membership included with TC Early Stage tickets

    July 6, 2021

    TechCrunch Early Stage is coming up soon, and all attendees can get 3 months of free access to Extra Crunch as a part of a ticket purchase. Extra Crunch is our members-only community focused on founders and startup teams. 

    Head here to buy your ticket to TC Early Stage

    Extra Crunch unlocks access to our investor surveys, private market analysis, and in-depth interviews with experts on fundraising, growth, monetization and other core startup topics. Get feedback on your pitch deck through Extra Crunch Live, and stay informed with our members-only Extra Crunch newsletter. Other benefits include an improved TechCrunch.com experience and savings on software services from AWS, Crunchbase, and more.

    Learn more about Extra Crunch benefits here, and buy your TC Early Stage tickets here

    What is TC Early Stage? 

    TC Early Stage is a two-day virtual event where early-stage founders can take part in highly interactive group sessions with top investors and ecosystem experts. This particular Early Stage event has a focus on marketing and fundraising.

    The event will take place July 8-9, and we’d love to have you join. 

    View the event agenda here, and purchase tickets here

    Once you buy your TC Early Stage pass, you will be emailed a link and unique code you can use to claim the free 3 months of Extra Crunch.

    Already bought your TC Early Stage ticket?

    Existing pass holders will be emailed with information on how to claim the free 3 months of Extra Crunch membership. All new ticket purchases will receive information over email immediately after the purchase is complete.

    Already an Extra Crunch member?

    We’re happy to extend a free 3 months of access to existing users. Please contact extracrunch@techcrunch.com, and mention that you are an existing Extra Crunch member who bought a ticket to TC Early Stage 2021: Marketing and Fundraising.

    World News

    New York’s ‘head-swirling’ mistake puts harsh spotlight on ranked-choice voting – POLITICO

    July 6, 2021

    New York’s ‘head-swirling’ mistake puts harsh spotlight on ranked-choice voting  POLITICOMany red states’ new voting laws stirred outrage. Louisiana took a ‘more measured approach’  The AdvocateHere’s a different way to fix gerrymandering  The Washington PostThere’s Good Election News—Except in New York  The Wall Street JournalVoters liked ranked choice voting in NYC mayor’s race, and it could come to Florida | Editorial  South Florida Sun SentinelView Full Coverage on Google NewsNew York’s ‘head-swirling’ mistake puts harsh spotlight on ranked-choice voting  POLITICOMany red states’ new voting laws stirred outrage. Louisiana took a ‘more measured approach’  The AdvocateHere’s a different way to fix gerrymandering  The Washington PostThere’s Good Election News—Except in New York  The Wall Street JournalVoters liked ranked choice voting in NYC mayor’s race, and it could come to Florida | Editorial  South Florida Sun SentinelView Full Coverage on Google NewsRead MoreTop stories – Google News

    Startups

    TravelPerk buys UK-based Click Travel in latest pandemic purchase

    July 6, 2021

    Business trip booking platform TravelPerk has bagged another rival — picking up UK-based Click Travel. Terms of the deal are not being disclosed but we’re told it’s the third — and largest — acquisition for TravelPerk to date.

    The Barcelona-based startup has been on a bit of a shopping spree since the pandemic crisis hit Europe last year, picking up risk management startup Albatross in summer 2020 to bolster resilience to COVID-19’s impacts, before going on to acquire US-based NexTravel in January to expand its presence in the US market.

    The latest acquisition deepens TravelPerk’s UK and European business, adding Click Travel’s 2,000+ SME clients (which includes the likes of Five Guys, Red Bull and Talk Talk) to its customer base — which will total just over 5,000 post-acquisition.

    The UK company handles some £300M in business travel for its client base, which will bolster TravelPerk’s revenues going forward. The latter now bills itself as the “leading” travel management platform for the SME market globally and the UK as a whole.

    “We are a global travel management platform but our core markets are the US and Europe and we expect both markets to be our primary growth areas this year,” said CEO and co-founder Avi Meir. “At the current moment, the US is our largest market due to the covid restrictions in the EU & UK.”

    “Assuming travel restrictions won’t be imposed again, we expect to grow by 200% in 2022 with strong growth in our core markets in the US & EU,” he added.

    Click Travel, which is based in Birmingham, was founded all the way back in 1999 — and appears to have raised relatively little venture capital over the years, per Crunchbase. However, in 2018, the veteran player participated in the government-backed Future Fifty scale-up program — and also took in a “multi-million pound” investment from the UK-based Business Growth Fund.

    Whether there will be any domestic hang-wringing over a high growth UK business being sold to a European rival remains to be seen.

    In a statement on its sale to TravelPerk, CEO James McLean omitted to mention the pandemic’s impact on the travel sector — choosing instead to highlight what he couched as the pair’s shared “mission” to reduce the cost and complexity of business travel.

    “Those shared objectives, combined with the natural cultural fit between our two companies, means we are incredibly excited to bring our teams together. Combining TravelPerk’s industry-leading knowledge, technology, experience and first class customer support with our own is a powerful proposition and we can’t wait to get started,” McLean added.

    While Click Travel has focused on serving the UK market, TravelPerk has had a global focus from the start.

    It has also attracted a large amount of external investment (totalling just under $300M) over its shorter run (founded in 2015).

    Back in April, for example, it raised a $160M Series D round. It had also topped up its Series C round in July 2019 before the pandemic hit. So TravelPerk hasn’t been short of funds to ride out the COVID-19 revenue crunch — and as well as shopping for competitors it has also been able to avoid making any layoffs over the travel crisis. 

    Per a press release, capital to fund the Click Travel acquisition was provided by Boston-based investment manager, The Baupost Group.

    TravelPerk’s Meir remains bullish about the near-term prospects for growth in the business travel sector, despite ongoing concerns in Europe and the US about the more infectious ‘Delta’ variant of the virus which is contributing to surging rates of COVID-19 in some markets (including the UK) — claiming it’s already seeing green shoots of recovery in “key markets”.

    “TravelPerk is outgrowing the market pace and is already at above 2019 revenue figures,” Meir told TechCrunch. “When it comes to the rest of the industry, the recovery of travel is well underway but moving at different speeds in different markets. For instance in the US, according to TSA Checkpoint figures, at the current rate of recovery the US travel market is expected to reach pre-pandemic volume at the end of August 2021.

    “We anticipate the global market may take a little longer but are optimistic we will see close to pre-pandemic levels in 2022.”

    “We’re one of the few players in the travel industry that continued scaling and growing since the beginning of the pandemic with a strategy that didn’t involve any layoffs,” he also told us. “Since March last year, our strategy has been not to sit back but to be aggressive and invest massively in our product offering and in our global reach, so that we are in the best position possible to capitalise when travel makes its full recovery. Today’s news is a major part of that plan.

    “We will aim to continue being aggressive in our growth strategy and we are open to more acquisitions if they make strategic sense and are aligned with our vision and culture.”

    Per Meir, Click Travel and TravelPerk will initially continue to run as two independent platforms but he confirmed that an “eventual full integration” is planned — with both set to operate under the TravelPerk brand in time.

    The startup also says it will retain all Click Travel’s staff — denying it has plans to axe any jobs. It also intends to hold onto the company’s Birmingham base — having the city as another UK hub for its business (in addition to its existing London office).

    “The 150 amazing people working for Click Travel were a big reason why we wanted to acquire the company, and were priced into the deal,” said Meir. “We have no plans of redundancies. We rather aim to integrate the entire team into the TravelPerk Group.”

    Asked if TravelPerk might consider expanding its focus to also target the enterprise segment, he noted that it’s seen interest from larger businesses — and said he’s “open” to the idea — but for now Meir said TravelPerk remains fully focused on the SME market: “where we think there is the biggest need, and the biggest growth potential”.

    “That’s why this acquisition is so exciting for us; it makes us undoubtedly the leading travel management platform for SMEs globally,” he added.

    Flexibility and sustainability

    Discussing how the pandemic has changed business travel, Meir highlighted two “important trends” he said TravelPerk will continue to invest it: Namely flexibility for bookings; and sustainability so environmental impact can be reduced.

    TravelPerk plans to invest more than $100M in two key products in these areas (aka: FlexiPerk and GreenPerk), per Meir.

    “We’ve noticed on our platform that travellers are booking closer to their departure date: Before the pandemic, trip searches were usually conducted between 7 and 30 days prior to the selected departure date,” he said, elaborating on the importance of flexibility for the sector. “Now we are seeing most trip searches are for trips less than 6 days away. Flexibility is therefore one of the most in-demand perks in business travel. Travellers will rely on flexible fares to give them the peace of mind that they won’t lose money if they need to change or cancel a trip on short notice.”

    On sustainability, Meir said businesses are already looking for ways to reduce their carbon footprint and general environmental impact, while consumers are also wanting to make conscientious decisions to reduce carbon emission — suggesting that train-based travel is set to gain ground (vs flights) as a result. (That might, ultimately, require some creative retooling of TravelPerk’s logo — which prominently features an airplane icon… )

    “We expect to see significant interest in our carbon offsetting product, GreenPerk, as a result but we also expect to see changes in how people are choosing to travel,” he said.

    “For instance, rail is undoubtedly the more environmentally-friendly travel option. In fact, taking a train over a domestic flight can reduce an individual’s carbon emissions by about 84%. We have been building out our rail inventory for a number of years now and we expect train travel to be an increasingly popular business travel option for customers this year and next.”

    As for the changing mix of business-related travel in a pandemic-reconfigured world of remote work, Meir continues to argue that more businesses providing employees with remote working options will sum to more business travel overall.

    “This might be bad news for the daily commute but it will result in more business travel,” he suggested. “Whether they are going fully remote and ‘working from anywhere’, or operating on a hybrid model, distributed teams will need (and want) to come together. We believe there will be a new type of business trip — one where team members will travel from different working hubs to get together for teambuilding and brainstorming sessions, for meetings with clients and colleagues, and even for ‘bleisure’ (business and leisure) trips.”

    World News

    Republicans’ effort to deny the Capitol attack is working – and it’s dangerous – The Guardian

    July 6, 2021

    Republicans’ effort to deny the Capitol attack is working – and it’s dangerous  The GuardianFive big questions about the Jan. 6 select committee | TheHill  The HillFBI is still searching for 100s of Capitol rioters 6 months after insurrection  The Week MagazineRobbins: GOP stance on Jan. 6 belies reality of Capitol footage  Boston HeraldEditorial: How low can they go? House GOP leadership runs fast from the insurrection truth  STLtoday.comView Full Coverage on Google News

    Startups

    ManoMano raises $355 million for its home improvement e-commerce platform

    July 5, 2021

    French startup ManoMano has raised a Series F funding round of $355 million led by Dragoneer Investment Group. The company operates an e-commerce platform focused on DIY, home improvement and gardening products. It is currently available in six European countries. Following today’s funding round, the company has reached a valuation of $2.6 billion.

    In addition to Dragoneer Investment Group, Temasek, General Atlantic, Eurazeo, Bpifrance’s Large Venture fund, Aglaé Ventures, Kismet Holdings and Armat Group are also participating.

    “We operate in Europe and we are the industry leader in online sales,” co-founder and co-CEO Philippe de Chanville told me. In France in particular, the company has been profitable for a couple of years already. In 2020 alone, the company’s gross merchandise volume doubled to €1.2 billion ($1.42 billion at today’s rate).

    So why did the company raise given that it’s already in a strong position to replicate the same model in other European markets? Because they could and because they didn’t need to. With a high valuation, ManoMano could raise quite a bit of money without having to sell a significant chunk of its equity.

    In addition to France, the startup operates in Spain, Italy, Belgium, Germany and the U.K. With today’s funding round, the company wants to develop its activities in the U.K. and Germany in particular — they are Europe’s two biggest markets for home improvement and gardening.

    ManoMano sells products to hobbyists and also targets the B2B market with ManoManoPro. It’s already working well in France with very small teams (1 to 5 employees) and the company is expanding this offering to Spain and Italy.

    The startup will also invest more heavily in its product and build a better logistics infrastructure. “For the logistics part, we work with third-party logistics companies — we are a tech company,” co-founder and co-CEO Christian Raisson told me.

    ManoMano doesn’t have its own warehouses and doesn’t own any inventory. That’s why ManoMano plans to recruit 1,000 people over the next 18 months and most of them will be tech profiles.

    While ManoMano has 7 million clients, sales of home improvement and gardening items still mostly happen in brick-and-mortar stores. The startup is well aware that it’s not just a matter of having the best products at good price points.

    ManoMano works with advisors (or Manodvisors) so that experts can give advice whenever customers need some tips. Overall, customers have initiated 2.3 million conversations with advisors in 2020. Recommendations and advice will be key to gain market shares. And the company is now well capitalized to innovate on this front and differentiate itself from other e-commerce platforms.