Browsing Tag: Startups

App Samurai, a platform to market mobile apps, has closed an investment of $2.4 million in Series A funding, led by 212 Ventures and co-invested by Collective Spark, 500 Startups and Degerhan Usluel. It has now raised a total of $4.6 million, which will be used to develop the mobile advertising group’s product portfolio and global expansion.

Founded in 2016, the App Samurai Group is used by app makers to grow their apps by using a portfolio of products, including a user acquisition platform (App Samurai), a real-time mobile ad fraud detection and prevention solution (Interceptd) and an in-app engagement solution (Storyly).

Commenting on the raise, Emre Fadillioglu, CEO and co-founder, said in a statement: “This $2.4m investment aligns with our 2020 globalization strategy and will accelerate our talent acquisition and geographical footprint. Our priority now is to bring the brightest minds together, to drive greater transparency, integrity and efficiency for the mobile marketing ecosystem.”

Its direct competitors include Traffic Guard, Scalarr, Forensiq, Machine, 21 Metrics, FraudScore and FraudLogix, while indirect competitors include Adjust, AppsFlyer, Tune and Kochava.

Source: Tech Crunch Startups | App Samurai closes a .4M Series A funding round led by 212 Ventures

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Over the past three months, a number of financial events have occurred in the fintech and finservices world that have caught our eye. Between two rounds at $500 million and two exits in the billions of dollars, financial technology and services startups have been on fire.

Today I’d like to rewind and go over the four largest events from the past three months in fintech and finservices (total value: $13.4 billion) and pull in data on other rounds that have happened recently. This will help us get a handle on what’s going on in the two heated startup sectors.

Recall that our last look into fintech’s venture activity wrapped up its Q4 2019 results. Today, thanks to the punishing news cycle that the sector has kept up over the last few weeks, we’re going a bit further. Into the breach!

Four events

We have two rounds ($500 million rounds for Revolut and Chime) and two sales (exits for Plaid and Credit Karma) to wrap up today. Here’s what each of those deals might tell us about the current market for money-focused startups and investment, starting with our two rounds and followed by our two exits:

• Chime raises $500 million, boosting its valuation from $1.5 billion (March 2019) to $5.8 billion (December 2019). Chime’s round demonstrated that the neobanking boom, at least in terms venture interest, is far from over. The America-focused financial services company grew its accounts figure to 6.5 million, giving it a valuation of a little under $1,000 per account; how much revenue and margin it can extract from its existing accounts is almost a red herring given its current pace of growth. But even with the growth caveat, investors have bet big that its long-term revenues will help support a valuation of over $10 billion in time. (The company’s most recent investors expect material return on their funds.) This implies confidence in the long-term economics of neobanking and general bullishness on the company’s category — so the existing 6.5 million accounts better churn out good chunks of top line.

  
  Source: Tech Crunch Startups | For investors, late-stage fintech startups are a lucrative bet

CoolBitX, a blockchain security startup based in Taiwan, announced today it has raised a $16.75 million Series B led by returning investor SBI Holdings, a Japanese financial group.

Korean cryptocurrency exchange Bitsonic, Monex Group, another Japanese financial group and Taiwan’s National Development Fund also participated.

Founded in 2014, CoolBitX makes two products. One is CoolWallet S, a Bluetooth-enabled hardware wallet for cryptocurrency. The other is called called Sygna, a solution created to help virtual asset service providers (VASPs) become compliant with a new rule passed last year by the Financial Action Task Force (FATF).

Referred to as the “travel rule,” it is meant to prevent money laundering and the financing of terrorist acts by requiring virtual asset service providers to collect personally identifiable information (PII) from customers during transactions. All virtual asset service providers in FATF member countries need to comply by June.

With its new funding, CoolBitX plans to expand Sygna’s presence beyond the Asia-Pacific region. The startup says that 12 cryptocurrency exchanges have already signed memorandums of understanding with it and are currently using or testing Sygna, including SBI VC Trade, Coincheck, Bitbank, DMM Bitcoin, BITpoint, MaiCoin, BitoPro and Ace.

CoolBitX founder and CEO Michael Ou told TechCrunch in an email that Sygna’s deployment helps differentiates it from competitors like Shyft and Ciphertrace, which also offer travel rule compliance solutions, because it has been tested and proven by users.

“In addition, Sygna ensures that VASPs can quickly comply with new regulations with minimal disruptions to their day-to-day operations,” he added. “By focusing on seamless user experience, maximum security during the transmission of data, Sygna aims to facilitate the mainstream adoption of the crypto currency.”

In a press statement, SBI Holdings president and CEO Yoshitaka Kitao said, “As one of the early investors in CoolBitX, SBI Holdings is happy to see the breakthroughs made by the CoolBitX team to drive cryptocurrency adoption forward. As such, we are delighted to participate in our second tranche of investment in CoolBitX. The borderless nature of digital assets requires a solution that isn’t bound by geographical boundaries, and we are proud to partner with CoolBitX on their journey to bring a secure and easy-to-implement system to the world.”

Source: Tech Crunch Startups | Blockchain security startup CoolBitX raises .75M Series B

Southeast Asian on-demand transport rivals Grab and Gojek deny that they are involved in talks to merge, but today Grab announced a piece of news that — at the very least — will divert attention from that story, or more likely stoke the fires of speculation that it is indeed gearing up for a deal: Grab said that it has raised $856 million more in funding, in two tranches from strategic Japanese investors, specifically to help grow the other arm of its business, in payments and financial services. Grab did not disclose its valuation with the latest investments.

The news comes directly on the heels of rumors that Grab is in talks to merge with its big regional rival, Gojek . Both companies have denied the reports directly to TechCrunch, although a source close to one of them confirms that they have been talking for 3.5 months — starting just after Gojek founder and former CEO left the company in October to join Indonesian president Joko Widodo’s cabinet.

Ever since GoJek founder left the startup, there has been internal tension at the firm, the source said. The tension escalated after GoJek failed to secure new funds from SoftBank, the talks of which have not been previously reported, the source said. This led the startup’s board to push for a merger.

The funding is coming in two tranches that were actually announced separately.

The first, from Mitsubishi UFJ Financial Group, Inc, will see the firm invest “up to $706 million into Grab to jointly develop next generation bespoke financial services in Southeast Asia to boost financial inclusion in the region,” the two said in a joint statement. MUFG and its regional affiliates will also become “First Choice Bank” to Grab, meaning that Grab will use MUFG first in countries where it operates when it requires a banking partnership for payments or other financial services.

The second tranche is coming from TIS INTEC, an IT solutions business out of Japan, which is putting in $150 million along with a strategic deal to help Grab develop the infrastructure needed to run is growing financial services business, starting with digital payments by way of GrabPay.

Both deals are important not just for Grab but its new investors, which are looking for more opportunities and customer channels into a wider region of Asia beyond their common home market of Japan.

Grab’s growth of its “super app” — in which it (like others pursuing a similar strategy) provides a one-stop shop for consumers to both see to their transportation needs, but also other aspects of their connected consumer life, such as eating, entertainment and managing their money — has involved the company partnering with a number of other financial giants, including Mastercard, Credit Saison, Chubb, and ZhongAn Online P&C Insurance Co. Ltd.

“MUFG’s investment into Grab is a vote of confidence in our super app strategy and our ability to build a long-term, sustainable business. Together with MUFG, we look forward to playing a key role in driving financial inclusion in Southeast Asia and offering greater and affordable access to financial products and services to millions of customers across the region,” said Ming Maa, President, Grab, in a statement.

“MUFG has been developing business in Southeast Asia by building a platform centered on our partner banks. We are excited to be able to provide customers with next-generation financial services by combining Grab’s advanced technologies and data management expertise with our financial knowledge and know-how,” said Hironori Kamezawa, Deputy President, Group COO & Group CDTO, MUFG, in a statement. “We believe that this alliance will also generate additional momentum for our ongoing digital transformation of MUFG.”

The financing development looks like it may have been precipitated by the report that surfaced on Monday from The Information, which reported that it is in merger discussions with Gojek, a ride-hailing business based out of Indonesia and also a big player in on-demand transportation and related services in the region.

A Gojek spokesperson told TechCrunch that “there are no plans for any sort of merger, and recent media reports regarding discussions of this nature are not accurate.” A Grab representative, meanwhile, said that the company declines to comment on market rumors and speculation.

A merger is one possible solution to the costly rivalry being waged by the two companies in Southeast Asia and the statements may be an effort to ward off attention before a deal nears completion.

With a $14 billion valuation and investors including SoftBank, Uber and Didi Chuxing, Grab is the larger company, but it competes head-to-head in Indonesia with Gojek, which has financial backing from Tencent, Google and Visa, among others. Both companies have expanded beyond ride-hailing into a wide range of services, including food deliveries and payments, through their apps.

The logic here is that while ride-hailing has proven to be a very popular business (both in terms of attracting drivers and passengers in the two-sided marketplace), the unit economics of ride-hailing on their own have nevertheless proven time and again to be disastrous — largely because the operational costs needed to build and run these kinds of businesses are just too high when you take into account the competitive landscape.

The biggest companies in the space, such as Uber, have reported billions of dollars in operating losses, leading them to divest of some of the most unprofitable efforts to once-rivals — Grab for example has become involved in Uber’s business in Southeast Asia — and, parallel to that, invest big in expanding to other services to capitalise on their economies of scale.

Thus, with Grab and Gojek, the pair have expanded into delivering other things besides passengers — such as food — and using the financial relationships they already have with users paying for transport in the app to provide other financial services.

But even that may not be enough to tip into the black — a need that investors would have eventually called in, after handing over billions in funding and waiting sometimes for many years to get a return. And that, most likely, is why we are now hearing about deals like this, and will probably hear about more in other regions, too.

According to the Information, executives from Gojek and Grab have met occasionally over the past several years, and began to discuss a merger more seriously recently. But for now it’s the usual story: the two disagree over the businesses’ valuations and how control of the combined company would be split, with Grab telling its major investors that Gojek wants its shareholders to hold 50% of its combined Indonesian operations, and wish to avoid Gojek’s operations getting absorbed by Grab.

If these talks don’t find their way to a signed contract, it’s not clear whether Gojek will have to go out for more funding, or if either/both will look for other strategic partners. One thing is certain: the bigger consolidation trend does mean the field of players is getting smaller.

If they agree to merge, the two companies would potentially also deal with regulatory challenges similar to the ones Grab had to deal with when it bought Uber’s Southeast Asia operations in 2018.

Source: Tech Crunch Startups | Grab raises up to 6M to boost payments business as rumors swirl of a merger with rival Gojek

Speedinvest, the European seed-stage VC that was started from Vienna but has since added offices in London, Berlin, Munich and San Francisco, has raised a new €190 million fund. It brings the firm’s total assets under management to more than €400 million.

Describing its third fund as “oversubscribed” and ahead of schedule, SpeedInvest’s remit remains largely the same. The VC writes first cheques of between €50,000 and €1.5 million, but has also set aside €100 million of the fund for follow-on investments in its most promising portfolio companies.

Sector-wise, Speedinvest says it is targeting fintech, “deep tech”, marketplaces, industrial tech, digital health and consumer tech startups — so a pretty wide brief. To make this possible, the firm has what it describes as 40 investment professionals divided into teams working across these five sectors.

In addition, the VC claims 20 “operational experts” providing portfolio companies with “full-service HR, growth marketing, business development, and U.S. expansion support”.

Cue statement from Speedinvest CEO Oliver Holle: “Having been a founder myself, I have a clear view on value creation by investors. You need to deliver sector-specific, operationally relevant input that goes far beyond boardroom advice and cash. In our experience, the best way to do that is to be face-to-face with our founders”.

Meanwhile, Speedinvest’s portfolio includes a number of Europe’s fast-growing tech companies, such as insurtech Wefox (€235 million Series B), e-scooter rentals company Tier Mobility (€55 million Series B), and fintech Curve (€50 million Series B). Other notable investments include Coachhub, TWAICE, Billie, Tourradar, Inkitt and Luko.

In fact, Speedinvest says it has already invested in over ten startups from this new fund.

Separately, it says it will be increasing its on the ground presence in France this Spring, where it has already invested in companies such as Luko, Lemon Way, Actiondesk and FairMoney.

Source: Tech Crunch Startups | Speedinvest raises new €190M fund to continue backing early-stage European tech startups

Fintech startup Revolut is raising a large Series D round of funding. TCV is leading the $500 million round, valuing the company at $5.5 billion. Over the past few years, Revolut has raised $836 million in total.

Some existing investors are also participating in today’s funding round, but Revolut isn’t sharing names. Previous investors include DST Global, Index Ventures, Balderton Capital and many others.

If you’re not familiar with Revolut, the company is building a financial service to replace traditional bank accounts. You can open an account from an app in just a few minutes. You can then receive, send and spend money from the app or using a debit card.

On top of that, Revolut has added a ton of features that it has built in-house or through partnerships. You can insure your phone, get a travel medical insurance package, buy cryptocurrencies, buy shares, donate to charities, save money and more.

Revolut currently has more than 10 million customers, mostly in Europe and the U.K. The company doesn’t share specific numbers when it comes to transaction volume and monthly active customers, but here are some percentage-based metrics:

• The total number of users has grown by 169% in 2019.
• Daily active customers grew by 380% in 2019.
• Revenue grew by 354% in 2018 (yes, 2018).
• Revenue from premium subscription plans (Revolut Premium and Revolut Metal) have grown by 154% in 2019.

With the new influx of cash, the company says that it’ll focus on improving its product for existing users as well as revenue. It’s all about making Revolut more useful and stickier going forward.

In particular, you can expect new lending services for both retail customers as well as companies using Revolut for Business. While Revolut provides a ton of services in the U.K., customers in other markets don’t have the same feature set. For instance, Revolut recently launched savings vaults in the U.K. — customers in other markets will be able to open savings sub-accounts in the future, as well.

Other than that, Revolut wants to double down on the core features. The company will improve its two subscription tiers (Premium and Metal) and improve banking operations across Europe — you can expect full bank accounts in Europe in the future.

There are currently 2,000 people working for Revolut. “We’re on a mission to build a global financial platform — a single app where our customers can manage all of their daily finances, and this investment demonstrates investor confidence in our business model. Going forward, our focus is on rolling-out banking operations in Europe, increasing the number of people who use Revolut as their daily account, and striving towards profitability,” Revolut co-founder and CEO Nik Storonsky said in the release.

Revolut is currently live in the U.K., Europe, Singapore and Australia (in beta). While the company has announced plans to expand to a handful of countries, the main focus is on launching in the U.S. and Japan in the coming months.

Source: Tech Crunch Startups | Revolut raises 0 million at a .5 billion valuation

Oxx, a European venture capital firm co-founded by Richard Anton and Mikael Johnsson, this month announced the closing of its debut fund of $133 million to back “Europe’s most promising SaaS companies” at Series A and beyond.

Launched in 2017 and headquartered in London and Stockholm, Oxx pitches itself as one of only a few European funds focused solely on SaaS, and says it will invest broadly across software applications and infrastructure, highlighting five key themes: “data convergence & refinery,” “future of work,” “financial services infrastructure,” “user empowerment” and “sustainable business.”

However, its standout USP is that the firm says it wants to be a more patient form of capital than investors who have a rigid Silicon Valley SaaS mindset, which, it says, often places growth ahead of building long-lasting businesses.

I caught up with Oxx’s co-founders to dig deeper into their thinking, both with regards to the firm’s remit and investment thesis, and to learn more about the pair’s criticism of the prevailing venture capital model they say often pushes SaaS companies to prioritize “grow at all costs.”

TechCrunch: Oxx is described as a B2B software investor investing in SaaS companies across Europe from Series A and beyond. Can you be more specific regarding the size of check you write and the types of companies, geographies, technologies and business models you are focusing on?

Richard Anton: We will lead funding rounds anywhere in the range $5-20 million in SaaS companies. Some themes we’re especially excited about include data convergence and the refining and usage of data (think applications of machine learning, for example), the future of work, financial services infrastructure, end-user empowerment and sustainable business.

Source: Tech Crunch Startups | VC firm Oxx says SaaS startups should avoid high-risk growth models

Boris Renski, the co-founder of Mirantis, one of the earliest and best-funded players in the OpenStack space a few years ago (which then mostly pivoted to Kubernetes and DevOps), has left his role as CMO to focus his efforts on a new startup: FreedomFi. The new company brings together open-source hardware and software to give enterprises a new way to leverage the newly opened 3.5 GHz band for private LTE and — later — 5G IoT deployments.

“There is a very broad opportunity for any enterprise building IoT solutions, which completely changes the dynamic of the whole market,” Renski told me when I asked him why he was leaving Mirantis. “This makes the whole space very interesting and fast-evolving. I felt that my background in open source and my existing understanding of the open-source landscape and the LTE space […] is an extremely compelling opportunity to dive into headfirst.”

Renski told me that a lot of the work the company is doing is still in its early stages, but the company recently hit a milestone when it used its prototype stack to send messages across its private network over a distance of around 2.7 miles.

Mirantis itself worked on bringing Magma, a Facebook-developed open-source tool for powering some of the features needed for building access networks, into production. FreedomFi is also working with the OpenAirInterface consortium, which aims to create an ecosystem for open-source software and hardware development around wireless innovation. Most, if not all, of the technology the company will develop over time will also be open source, as well.

Renski, of course, gets to leverage his existing connections in the enterprise and telco industry with this new venture, but he also told me that he plans to leverage the Mirantis playbook as he builds out the company.

“At Mirantis, our journey was that we started with basically offering end-to-end open-source cloud buildouts to a variety of enterprises back when OpenStack was essentially the only open-source cloud project out there,” he explained. “And we spent a whole bunch of time doing that, engaging with customers, getting customer revenue, learning where the bottlenecks are — and then kind of gradually evolving into more of a leveraged business model with a subscription offering around OpenStack and then MCP and now Kubernetes, Docker, etc. But the key was to be very kind of customer-centric, go get some customer wins first, give customers a services-centric offering that gets them to the result, and then figure out where the leveraged business model opportunities are.”

Currently, enterprises that want to attempt to build their own private LTE networks — and are willing to spend millions on it — have to go to the large telecom providers. Those companies, though, aren’t necessarily interested in working on these relatively small deployments (or at least “small” by the standards of a telco).

Renski and his team started the project about two months ago and for now, it remains self-funded. But the company already has five pilots lined up, including one with a company that produces large-scale events and another with a large real estate owner, and with some of the tech falling in place, Renski seems optimistic that this is a project worth focusing on. There are still some hurdles to overcome and Renski tells me the team is learning new things every day. The hardware, for example, remains hard to source and the software stack remains in flux. “We’re probably at least six months away from having solved all of the technology and business-related problems pertaining to delivering this kind of end-to-end private LTE network,” he said.

Source: Tech Crunch Startups | Mirantis co-founder launches FreedomFi to bring private LTE networks to enterprises

David Renteln, the Los Angeles-based co-founder of Soylent and the co-founder and chief executive of new nicotine gum manufacturer Lucy Goods, thinks there should be a better-tasting, less-medicinal offering for people looking to quit smoking.

That’s why he founded Lucy Goods, and that’s why investors, including RRE Ventures, Vice Ventures and FundRX joined previous investors YCombinator and Greycroft in backing the company with $10 million in new funding.

“We reformulated nicotine gum and the improvements that we made were to the taste, the texture and the nicotine release speed,” said Renteln.

These days, any startup that’s working on smoking cessation or working with tobacco products can’t avoid comparisons to Juul — the multi-billion-dollar startup that’s at the center of the surge in teen nicotine consumption.

“The Juul comparison is something that’s obviously top of people’s minds,” Renteln said. “It’s important to note that there’s a huge difference in nicotine products.”

Renteln points to statements from former Food and Drug Administration chief, Scott Gottlieb (who’s now a partner at the venture firm New Enterprise Associates), which drew a distinction between combustible tobacco products on one end and nicotine gums and patches on the other.

“Nicotine isn’t the principle agent of harm associated with these tobacco products,” said Rentlen. “It’s addictive but not inherently bad for you.”

Lucy Goods also doesn’t release its nicotine dosage in a concentrated burst like vapes, which are designed to replicate the head rush associated with smoking a cigarette, said Renteln.

“It is a stimulant and they will get a sensation, but it’s not as intense as taking a very deep drag of a cigarette,” Renteln said. 

The company’s website also doesn’t skew to young, lifestyle marketing images. Instead, there are testimonials from older, ex-smokers hawking the Lucy gum.

“I don’t want anyone underage using any nicotine product or any drug in general… [and] the flavors have been around for a long time.”

Joining Renteln in the quest to create a better nicotine gum is Samy Hamdouche, a former business development executive at several Southern California biotech startups and the previous vice president of research at Soylent. 

For both men, the idea is to get a new product to market that can help people quit smoking — without a social stigma — Renteln said.

“Smoking is the leading cause of preventable death in the United States claiming over 480,000 lives every year and costing the U.S. an estimated $300 billion in direct health costs and lost productivity. Lucy is committed to bringing innovative nicotine products to the market to eliminate tobacco related harm and we’re proud to be part of their journey,” said RRE investor, Jason Black in a statement.

Source: Tech Crunch Startups | With cinnamon, fruit and mint-flavored nicotine gum, is LA’s Lucy Goods the next Juul?

Deviceplane, a member of the Y Combinator Winter 2020 class, is developing an open-source toolset to manage, monitor and update Linux devices running at the edge.

“We solve the hard infrastructure problems that all these companies face, including network conductivity, SSH access, orchestrating and deployment of remote updates, hosting, application monitoring and access and security controls. It’s 100% open source, available under an Apache License. You can either host it yourself or you can run on the hosted version,” company founder and CEO Josh Curl told TechCrunch.

He could see this working with a variety of hardware, including robotics, consumer appliances, drones, autonomous vehicles and medical devices.

Curl, who has a background in software engineering, was drawn to this problem and found that most companies were going with home-grown solutions. He said once he studied the issue, he found that the set of infrastructure resources required to manage, monitor and update these devices didn’t change that much across industries.

The over-the-air updates are a big part of keeping these devices secure, a major concern with edge devices. “Security is challenging, and one of the core tenets of security is just the ability to update things. So if you as a company are hesitant to update because you’re afraid that things are going to break, or you don’t have a proper infrastructure to do those upgrades, that makes you more hesitant to do upgrades, and it slows down development velocity,” Curl said.

Customers can connect to the Deviceplane API via Wi-Fi, cellular or ethernet. If you’re worried about someone tapping into that, Curl says the software assigns the device a unique identity that is difficult to spoof.

“Devices are assigned an identity in Deviceplane and this identity is what authorizes it to make API calls to Deviceplane. The access key for this identity is stored only on the device, which makes it impossible for someone else to spoof this device without physical access to it.

“Even if someone were able to spoof this identity, they would not be able to deploy malicious code to the spoofed device. Devices never have access to control what software they’re running — this is something that can be done only by the developer pushing out updates to devices,” Curl explained.

The company intends to offer both the hosted version and installed versions of the software as open source, something that he considers key. He hopes to make money supporting companies with more complex installations, but he believes that by offering the software as open source, it will drive developer interest and help build a community around the project.

As for joining YC, Curl said he has friends that had been through the program in the past, and had recommended he join as well. Curl sees being part of the cohort as a way to build his business. “We were excited to be tapping into the YC network — and then being able to tap into that network in the future. I think that YC has funded many companies in the past that can be Deviceplane customers, and that can accelerate going forward.”

Curl wasn’t ready to share download numbers just yet, but it’s still an early-stage startup looking to build the company. It’s using an open-source model to drive interest, while helping solve a sticky problem.

Source: Tech Crunch Startups | Deviceplane wants to bring over-the-air updates to Linux edge devices