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Wednesday, 31 August 2022

Duplo digitizes payment flows for African B2B enterprises, gets $4.3M seed funding

Duplo digitizes payment flows for African B2B enterprises, gets $4.3M seed funding

The process of sending and receiving payments in a $1.5 trillion B2B payments market in sub-Saharan Africa is one where merchants commonly use manual invoices and inefficient processes that burden merchants and make them struggle with their businesses.

Duplo, a B2B payments startup that solves these issues by enabling African enterprises to collect payments from their clients and partners and make payments to their suppliers and vendors, has raised $4.3 million in seed funding. The news is coming just seven months after Duplo announced its $1.3 million pre-seed investment; in total, the YC-backed startup has received $5.6 million since Yele Oyekola and Tunde Akinnuwa launched it last September.

The Nigerian startup went live with FMCG distributors as its first set of customers this January. FMCG distributors can onboard retailers in their network on the Duplo platform, collect payments digitally and access real-time insights into business performance. Co-founder and CEO Yele Oyekola told TechCrunch over a call that this distributor-retailer channel has been a source of viral growth for the startup. “One distributor can cater to over 1,000 retailers and onboard them on Duplo. Those retailers can become Duplo customers as well. And then it becomes easier for us to digitize how payment moves between retailers and distributors,” he added.

FMCG distributors can also track and reconcile payments while automating payments to vendors, manufacturers and suppliers, with instant payments enabling them to transact in larger quantities.

YC-backed Duplo raises $1.3M pre-seed to build financial OS for B2B companies in Nigeria

Meanwhile, Duplo now serves finance teams of midsize and enterprise businesses not to be over-reliant on a particular market. For finance teams, the B2B payments startup automates invoice generation and processing, receiving and approving bills, collecting and disbursing funds, and completing account reconciliation. Beyond that, Duplo integrates directly with accounting and ERP platforms popular with Nigerian businesses such as SAP, Microsoft Dynamics, QuickBooks and Sage, so payment that goes through Duplo automatically syncs with these platforms in real time, saving the finance teams time and cost while reducing errors and fraud.

“When we think of payments in the continent or even Nigeria, for example, there’s a lot of focus on merchants collecting payments from the customers. And from the B2B angle, what startups help them with, is just collection and payout. Still, there’s a massive value in assisting them in tracking and reconciling payments in real-time, which is where we play a significant role.” Businesses can cut time spent on administrative tasks such as account reconciliation by up to 50% and reduce payment-related costs by up to 85%, according to Duplo.

While Duplo handles payments for B2B payments within Nigeria, it has recently received requests from some of its customers to facilitate payments to businesses out of the country over the last couple of months. As a result, the Nigerian startup surveyed 1,000 business owners across Kenya, South Africa, Egypt and Nigeria to better understand their wait times for receiving payments from business customers and partners globally. About 44% stated that they have to wait over 24 hours; 34% acknowledged that it takes up to a week, while 17% said they wait for a month and 3% noted 30 days as the minimum wait time.

Duplo said it currently facilitates payments from merchants in Nigeria to other regions like the U.S., U.K. and Europe; Oyekola said settlement time ranges from 24 to 48 hours. Such product upgrades have seen Duplo increase the number of businesses on its platform by 1,000% over the last three months, while total payment volume (TPV) processed in the past five months has grown by 4,200%, the company claims.

There’s room for more growth, Oyekola insists. While Duplo has a robust accounts receivable arm that allows businesses to collect money across cash invoices and virtual accounts, it needs to improve account deliverables where businesses can schedule payments, set invoices and generally enhance the platform across different use cases.

“We’re also trying to expand into new verticals,” the chief executive noted. “Initially, we started with the FMCG industry; now we’ve seen interest in the construction industry, telecoms, and these major mid-sized enterprise businesses, and set up the foundation to scale across the continent hopefully in the next nine to 12 months.”

The seed funding, raised to help the company launch new products and expand into new business verticals in Nigeria, included participation from investors such as Liquid2 Ventures, Soma Capital, Tribe Capital, Commerce Ventures, Basecamp Fund, and Y Combinator and existing investor Oui Capital.

“The Duplo team has built an incredible suite of products that improve how businesses make and receive payments from each other,” said Peter Oriaifo, principal at Oui Capital. The growth that the company has experienced since our initial pre-seed investment in 2021 has been nothing short of impressive. It is for this reason that we are excited to back Duplo once more.”



Kula makes the job recruitment process less exhausting

Kula makes the job recruitment process less exhausting

The process of finding job candidates often entails a lot of tedious manual work for recruiters, like sending versions of the same email over and over again. That’s Kula was created. The platform not only automates tasks like sending introductory messages, but also surfaces promising leads from the first-degree connections of an organization’s existing employee base.

Kula announced today it has raised a $12 million seed round co-led by Sequoia Capital India and Square Peg Capital, with participation from returning investors Venture Highway and Together Fund.

The new funding comes less than six months after Kula’s pre-seed and brings its total raised to $15 million before its public launch. It will be used to expand its research and development, product and go-to-market teams in the United States, Singapore and India.

Kula co-founders Suman Kumar Dey, Achuthanand Ravi and Sathappan M

Kula co-founders Suman Kumar Dey, Achuthanand Ravi and Sathappan M

Before co-founding Kula, CEO Achuthanand Ravi worked as a recruiter at tech companies including Stripe, Uber and Freshworks. During that time, he saw marketing and sales teams get increasingly sophisticated tech tools, but the recruitment process still remained more or less the same.

Kula helps fix that by integrating with tools commonly used by recruiters, including LinkedIn, Github, Gmail and the Applicant Tracking System (ATS) and automating workflows. For example, it can send introductory messages to promising leads through emails, LinkedIn nudges and InMails. A feature called Kula’s Circle consolidates all employee networks into one dashboard, helping recruiters figure out potential candidate from the first-degree connections of all their employees. Kula also includes analytics that helps recruiters forecast and measure their talent pipeline more accurately.

Kula is currently pre-revenue with alpha customers, and monetizes by selling to businesses through it’s go-to-market strategy, which is mostly focused on the United States. In particular, it targets SMBs and mid-market organizations with less than 1,000 employees, which Ravi says are underserved.

Ravi identified Gem.com, HireEz and Beamery as Kula’s closest competitors. But Gem.com only offers automated reach-outs as a product, and has no feature for the referral workflow like Kula’s Circle. HireEZ’s only channel to reach out to a candidate is email, but Kula’s platform also automates InMails on LinkedIns, an important source of potential candidates. Beamery, meanwhile, only counts the outbound recruitment workflow as a small part of is platform, Ravi said.

In a statement, Square Peg Capital partner Piruze Sabuncu said, Recruitment is an absolute priority for companies across the spectrum of size, industry, and geography, and is still an underserved business function. Kula’s founding team brings an unmatched combination of substantial recruiting experience and distinguishing engineering talent – giving them the ability to understand the problem deeply and build a solution that scales with the organizations they serve.”

What downturn? Investors remain bullish on HR tech as the Great Resignation slows



Tuesday, 30 August 2022

Topi raises $45M to power hardware subscriptions for B2B merchants

Topi raises $45M to power hardware subscriptions for B2B merchants

A new company is looking to do for B2B hardware sales what a growing number of companies have been doing in the consumer sphere, by making it easier for businesses to pay for equipment in instalments through rentals and subscriptions.

While companies such as Klarna and Affirm have been pushing payment services that help consumers procure goods without having to pay for everything up front, Berlin-based startup Topi launched out of stealth last December with $4.5 million in funding to do something similar for B2B transactions. At the time, Topi was somewhat vague in terms of what its actual product would be, but the company today announced its first product in partnership with German electronics retailer Gravis, and unveiled a fresh $45 million in equity and debt financing. 

Hardware-as-a-service

At its most basic level, Topi is selling a hardware-as-a-service business model, allowing merchants to rent out their equipment such as smartphones, printers, PC monitors, coffee machines, robotic arms, or whatever industry-specific machinery they specialize in. While it’s true that many merchants offer financing options already that allow businesses to stagger their payments, this isn’t typically integrated directly into the checkout process — and that, effectively, is what Topi is bringing to the table.

Topi payment methods

The problem, ultimately, is that companies can spend thousands of dollars up-front on physical goods that are essential to their operations, leaving them with limited capital for other business-critical purchases. On top of that, products that they buy might be outdated or obsolete in just a few years.

In tandem, with businesses across the industrial spectrum tightening their purse strings due to economic pressures, merchants will be looking for new ways to encourage their customers to continue spending money, even if it means on slightly different terms.

Topi essentially brings together the various components that a seller might need to offer hardware subscriptions, including insurance, logistics, and refinancing providers, so that merchants can easily build rentals into their existing online channels using Topi’s APIs. So for example, an electronics retailer might offer a €1,000 MacBook Air for a monthly fee of €26.25 payable over three years with a full warranty included, after which the customer can decide to upgrade to the latest MacBook model, return the device, or pay the remainder of the balance to own the laptop outright. In the future, Topi will also offer Klarna-style instalment payment options for customers who know in advance that they want to own the product at the end.

It’s worth noting that Topi also supports up-front purchases, so that a customer can decide to rent an iPhone at the checkout for a two-year period, while buying a laptop outright. Topi is pitched as a modular platform, so that merchants can pick and choose which elements they want — they can select just monthly billing and credit checks, to the full shebang including refinancing partners and insurance.

Additionally, while the Topi branding is prominent at checkout with the inaugural product, the company said that it plans to offer a white-labeled version that allows businesses to include their own logo.

Topi: Like a Klarna for B2B transactions

Access over ownership

A quick peek across the consumer technology sphere reveals a steady transition from ownership to access. This is evidenced in fields such as music, where subscription streaming services from the likes of Spotify and Apple Music now outweigh physical format or download sales. And the so-called circular economy is driving demand for consumer electronics rentals that includes smartphones, and even automobile subscription services.

There is evidence of this shift elsewhere in the B2B space too, with Munich-based Klarx specializing in construction equipment rentals. So it’s clear there is a movement away from ownership, something that Topi cofounder Charlotte Pallua said other merchants must take note of if they’re to stay ahead of the curve.

“If traditional retailers want to stay competitive and not lose their customers to those retailers, they will need to start offering subscriptions as a payment option,” Pallua told TechCrunch.

Pallua previous worked as a strategy and business development manager at Apple in the San Francisco Bay Area, where she led a team tasked with exploring the feasibility of hardware subscriptions — Apple has yet to launch such a service, but reports continue to surface that the Cupertino company is still looking to bolster its recurring revenue via such subscriptions. Pallua met her cofounder Estelle Merle while at Harvard Business School in Boston, and the duo cemented their friendship out in Silicon Valley where Merle worked briefly at Tesla during her MBA before landing at German mobility startup Via.

A year on from its foundation, Pallua and Merle are now ready to launch their businesses in partnership with Gravis, an Apple authorized reseller which has 40 physical outlets in Germany in addition to its online store. Gravis was a key partner as Topi iterated its product through its pilot phase.

“We are excited that our business customers can now easily subscribe to their IT equipment in real-time at the point of transaction, without tedious processes and bureaucratic paperwork,” Gravis managing director Jan Sperlich said in a statement. “In our pilot phase, around half of our customers that rented hardware through Topi came back for additional products.”

But arguably more important than all of that, Topi isn’t just focused on improving access to hardware or helping companies’ cashflows — they see sustainability as a core underlying selling point behind its product.

“In light of climate change, being sustainable is increasingly important for companies,” Pallua said. “Used devices should be given a second life or properly recycled — a drawer full of old devices should no longer exist.”

Topi’s funding round constituted $15 million in equity and $30 million in debt, with backers including Index Ventures, Creandum, TriplePoint Capital, and undisclosed angel investors.



Twitter’s attempt to monetize porn reportedly halted due to child safety warnings

Twitter’s attempt to monetize porn reportedly halted due to child safety warnings

Despite serving as the online watercooler for journalists, politicians and VCs, Twitter isn’t the most profitable social network on the block. Amid internal shakeups and increased pressure from investors to make more money, Twitter reportedly considered monetizing adult content.

According to a report from The Verge, Twitter was poised to become a competitor to OnlyFans by allowing adult creators to sell subscriptions on the social media platform. That idea might sound strange at first, but it’s not actually that outlandish — some adult creators already rely on Twitter as a means to advertise their OnlyFans accounts, since Twitter is one of the only major platforms on which posting porn doesn’t violate guidelines.

But Twitter apparently put this project on hold after an 84-employee “red team,” designed to test the product for security flaws, found that Twitter cannot detect child sexual abuse material (CSAM) and non-consensual nudity at scale. Twitter also lacked tools to verify that creators and consumers of adult content were above the age of 18. According to the report, Twitter’s Health team had been warning higher-ups about the platform’s CSAM problem since February 2021.

To detect such content, Twitter uses a database developed by Microsoft called PhotoDNA, which helps platforms quickly identify and remove known CSAM. But if a piece of CSAM isn’t already part of that database, newer or digitally altered images can evade detection.

“You see people saying, ‘Well, Twitter is doing a bad job,'” said Matthew Green, an associate professor at the Johns Hopkins Information Security Institute. “And then it turns out that Twitter is using the same PhotoDNA scanning technology that almost everybody is.”

Twitter’s yearly revenue — about $5 billion in 2021 — is small compared to a company like Google, which earned $257 billion in revenue last year. Google has the financial means to develop more sophisticated technology to identify CSAM, but these machine learning-powered mechanisms aren’t foolproof. Meta also uses Google’s Content Safety API to detect CSAM.

“This new kind of experimental technology is not the industry standard,” Green explained.

In one recent case, a father noticed that his toddler’s genitals were swollen and painful, so he contacted his son’s doctor. In advance of a telemedicine appointment, the father sent photos of his son’s infection to the doctor. Google’s content moderation systems flagged these medical images as CSAM, locking the father out of all of his Google accounts. The police were alerted and began investigating the father, but ironically, they couldn’t get in touch with him, since his Google Fi phone number was disconnected.

“These tools are powerful in that they can find new stuff, but they’re also error prone,” Green told TechCrunch. “Machine learning doesn’t know the difference between sending something to your doctor and actual child sexual abuse.”

Elon Musk taps the Twitter whistleblower for help getting out of the deal

Although this type of technology is deployed to protect children from exploitation, critics worry that the cost of this protection — mass surveillance and scanning of personal data — is too high. Apple planned to roll out its own CSAM detection technology called NeuralHash last year, but the product was scrapped after security experts and privacy advocates pointed out that the technology could be easily abused by government authorities.

“Systems like this could report on vulnerable minorities, including LGBT parents in locations where police and community members are not friendly to them,” wrote Joe Mullin, a policy analyst for the Electronic Frontier Foundation, in a blog post. “Google’s system could wrongly report parents to authorities in autocratic countries, or locations with corrupt police, where wrongly accused parents could not be assured of proper due process.”

This doesn’t mean that social platforms can’t do more to protect children from exploitation. Until February, Twitter didn’t have a way for users to flag content containing CSAM, meaning that some of the website’s most harmful content could remain online for long periods of time after user reports. Last year, two people sued Twitter for allegedly profiting off of videos that were recorded of them as teenage victims of sex trafficking; the case is headed to the U.S. Ninth Circuit Court of Appeals. In this case, the plaintiffs claimed that Twitter did not remove the videos when notified about them. The videos amassed over 167,000 views.

Twitter faces a tough problem: the platform is large enough that detecting all CSAM is nearly impossible, but it doesn’t make enough money to invest in more robust safeguards. According to The Verge’s report, Elon Musk’s potential acquisition of Twitter has also impacted the priorities of health and safety teams at the company. Last week, Twitter allegedly reorganized its health team to instead focus on identifying spam accounts — Musk has ardently claimed that Twitter is lying about the prevalence of bots on the platform, citing this as his reason for wanting to terminate the $44 billion deal.

“Everything that Twitter does that’s good or bad is going to get weighed now in light of, ‘How does this affect the trial [with Musk]?” Green said. “There might be billions of dollars at stake.”

Twitter did not respond to TechCrunch’s request for comment.

Apple quietly pulls references to its CSAM detection tech after privacy fears

 



California pushes ahead with its own children’s online privacy protections

California pushes ahead with its own children’s online privacy protections

California lawmakers have passed a bill that seeks to make apps and other online spaces safer for kids in the absence of robust federal standards. The bill, if signed into law, would impose a set of new protections for people under the age of 18 in California, potentially punishing tech companies with thousands in fines for every child affected by any violation.

The bill, the California Age-Appropriate Design Code Act, still needs to be signed by California Governor Gavin Newsom before becoming law. If signed, its provisions would go into effect on July 1, 2024, giving platforms an interval of time to come into compliance.

The new privacy rules would apply to social apps like Instagram, TikTok and YouTube — frequent targets of criticism for their mishandling of young users’ safety and mental health — but also to other businesses that offer “an online service, product, or feature likely to be accessed by children.” That broader definition would also extend the bill’s requirements to gaming and education platforms that kids might use, along with any other websites or services that don’t explicitly limit their use to adults.

The bill defines a child as anyone under the age of 18, pushing apps and other online products that might attract minors to enact more privacy protections for all under-18 users, not just the youngest ones. The federal law that carves out some privacy protections for children online, the Children’s Online Privacy Protection Act (COPPA), only extends its protections to children under age 13.

California Age-Appropriate … by TechCrunch

Among its requirements, the California children’s privacy legislation would prohibit companies from collecting any minor’s user data beyond what is absolutely necessary or leveraging children’s personal information in any way “materially detrimental to the physical health, mental health, or well-being of a child.” It would also require affected companies to default users under 18 to the strongest privacy settings, “including by disabling features that profile children using their previous behavior, browsing history, or assumptions of their similarity to other children, to offer detrimental material.”

The bill would also create a new working group dedicated to implementing its requirements comprised of members appointed by the governor and state agencies. The California Attorney General would be empowered to fine companies that violate its rules $2,500 per child affected for any violations deemed to be “negligent” and $7,500 for intentional violations.

“We are very encouraged by today’s bi-partisan passage of AB 2273, a monumental step toward protecting California kids online,” the children’s advocacy organization Common Sense said in a statement Tuesday. “Today’s action, authored by Assembly members Wicks, Cunningham and Petrie-Norris, sends an important signal about the need to make children’s online health and safety a greater priority for lawmakers and for our tech companies, particularly when it comes to websites that are accessed by young users.”

While there’s plenty of detail to be worked out still, the California bill could force the hand of tech companies that have historically prioritized explosive user growth and monetization above all — and dragging their feet when it comes to the less lucrative work of verifying the age of their users and protecting young people from online threats to safety and mental health. Inspired by the U.K. children’s privacy legislation known as the “Age Appropriate Design Code,” the current legislation could similarly force tech companies to improve their privacy standards for minors across the board rather than creating customized experiences for regionally specific user segments that fall under new legal protections.

UK now expects compliance with children’s privacy design code



Magic Eden looks to challenge OpenSea’s NFT dominance

Magic Eden looks to challenge OpenSea’s NFT dominance

Few startups in the crypto world boast the market dominance that OpenSea currently enjoys, but numerous venture-backed startups are looking to chip away at their lead.

Welcome back to Chain Reaction, where we unpack and explain the latest in crypto news, drama and trends, breaking things down block by block for the crypto curious.

For our Tuesday episode this week, we talked to Jack Lu, the co-founder and CEO of fast-rising NFT marketplace Magic Eden. The venture-backed startup was founded last year and has already reached unicorn status — raising at a $1.6 billion valuation.

The startup has become the default way for NFT traders in the Solana ecosystem to transact, but as the marketplace has grown, its team has refocused its ambitions to take on OpenSea on its home turf — the Ethereum network, which they’ve recently begun rolling out early support for.

The startup is looking to differentiate itself inside the broader NFT marketplace space, shying away from being a hub for online art, and leaning more into verticals like gaming.

“We’re not really a generalized marketplace that plays in every category, we don’t play in one-of-one fine art, we don’t do usernames or domain names,” Lu tells us, noting that Magic Eden largely focuses on “collectibles” which include things like avatars and profile photos, as well as NFTs related to gaming.

It was the gaming part of Magic Eden’s focus that took up the bulk of the conversation as Anita and Lucas looked to get a finger on the pulse of crypto gaming in late summer 2022.

Magic Eden raises $130M, hitting unicorn status at $1.6B valuation

“There is no such thing as ‘web3 gamers,’ people who like playing games do not go looking to play a web3 game, they just want to play a game,” Lu says” “I think we’re going to see a shift where it’s pure game content developers who are masterful at developing game content and game loops themselves that are going to come into this space and are more into using web3 as an instrument.. to realize some player goal or product goal within the game itself.”

You can listen to the full episode to hear Lu’s more expansive thoughts on the NFT gaming market as well as his thoughts on a potential race-to-the-bottom in NFT transaction fees.

Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the action.



Dubai-based Stake raises $8 million to let people across the globe invest in local properties

Dubai-based Stake raises $8 million to let people across the globe invest in local properties

Dubai-based startup Stake is offering retail investors from across the globe to buy fractions of rental property in UAE’s marquee city and earn regular income. The startup, found in 2020, claims that because of Dubai’s real-estate rules it has managed to attract investing users on the platform from over 80 countries in the world.

The company, founded by Manar Mahmassani, Rami Tabbara, and Ricardo Brizido in 2020,  has raised $8 million in a pre-Series A round from investors like BY Ventures, MEVP, and Vivium Holdings to expand its portfolio and launch in Saudi Arabia and Egypt. The company first raised a $4 million seed round last year.

“This round is a testament to what we are building at Stake and our mission to bring access and liquidity to the oldest, largest, and most sought-after asset class in the world. The proceeds will allow us to expand into Saudi Arabia and Egypt, continue attracting the best talent to the team, and cement Stake’s position as the category leader in the MENA region,” Mahmassani said in a written statement.

Tabbara told TechCrunch over a call that after being in the real estate business for over 15 years, he realized that a lot of people want to invest in MENA region but they can’t afford to put in large chunks of money without paying huge commissions to brokers and developers. So he wanted to accelerate the process of investing in real estate with Stake.

Image Credits: Stake

The firm says it lists premium properties on its platform that are already on rent. To acquire a property, Stake looks at factors like location, build quality, view, and if it has tenants. Tabbara said if the property is not rented, the company uses its data to list properties that could be rented out quickly. Stake has paid over AED 1 million ($272,249) in rental income to investors, which is credited every month.

Stake currently manages more than 44 properties with a combined value of AED 56 million ($17.9 million).  The company claims that it has achieved an average 17% monthly growth rate in both investors and assets under management (AUM).

“Our platform currently boasts 42,000 registered users and more than 2,100 active investors on the platform. While we have users from many countries on the site, folks from UAE, Saudi Arabia, Kuwait, the UK, and India are our top five investor bases,” Tabbara said.

Users can quickly register with the platform and invest from as low as AED 500 ($136). Because of Dubai’s investment rules individual investors can only invest up to AED 183,500 ($50,000) per year. The proptech company also limits maximum ownership by a single investor in a property to 33% to evenly spread out gains.

The firm doesn’t rely on financing to acquire homes. All the money to purchase a property comes from the investors. While Dubai’s property rule allows for partial deeds, there’s a cap of four investors, so Stake creates a special purpose vehicle for each property to facilitate deed registration. All properties usually have an investment term of five periods, but a house’s value goes up 30% in the market, and the investors can vote to sell it.

Stake’s business model relies on various fees. When investors purchase a property, the company charges them 1.5% with an additional 0.5% charged annually for maintenance. Plus, there are 0.2% Know Your Customer (KYC) and Anti-money laundering fees upfront and 0.1% annually from the second year of the term. The company also charges investors 2.5% as an exit fee when they sell their stake. What’s more, if the property is sold at a higher rate than its acquisition, Stake takes a 15% cut from the profit. The company is not profitable yet but has achieved 470% year-on-year growth in terms of revenue.

In the next 12 months, apart from launching its platform in Egypt and Saudi Arabia, the company also wants to build a second-day trading platform, where investors can sell their stake in a property to other investors. Stake is focusing on launching a way to let people invest in vacation properties that go on platforms like Airbnb — something that platforms like Komoco and Here are trying in the U.S.

In the local market, Stake’s closest competitor is SmartCrowd, which raised a $3 million bridge round in June. Tabbara claims that his company has already surpassed SmartCrowd when it comes to AUM.

“We are banking on our team, technology, and experience in dealing with different properties to become the most prominent real estate investment platform in the Middle East and North Africa (MENA)” region,” he said.



PostEx acquires Call Courier to become Pakistan’s larger e-commerce service provider

PostEx acquires Call Courier to become Pakistan’s larger e-commerce service provider

Pakistani fintech PostEx has acquired logistics service provider Call Courier, creating what it describes as the largest e-commerce service provider in the country. PostEx will now serve 1.3 million users with over 8,000 merchants across 500 cities in Pakistan, and is on track to having a loan book of more than $12 million.

The acquisition means that Call Courier will become a wholly-owned subsidiary under the group name. PostEx provides services like upfront payments in a country where more than 90% of e-commerce payments are still completed in cash, and revenue-based financing for e-commerce sellers and SMEs.

PostEx co-founder and CEO Omer Khan told TechCrunch that according to the World Bank, about 100 million adults in Pakistan don’t have a bank account. As a result, businesses have limited access to working capital and lack adequate cash flow. On the other hand, consumers are wary of digital transactions, and even many who have bank accounts still prefer to pay cash on delivery for items ordered online.

But cash on delivery is problematic for e-commerce businesses because they have a higher rejection rate at the door. Furthermore, funds from cash on delivery purchases often take up to two to three weeks to be deposited into a business’ banking account, compared to a few days for digital payments.

As a result, PostEx’s founding team decided there was potential to build a reliable logistics service provider, plus upfront cash. Upfront payments mean that online vendors no longer have to wait through long payment cycles, and have better cash flow.

“We’re out there making it simpler for businesses to reach out to more customers, take care of their delivery needs and provide them with upfront liquidity,” said Khan. “This is essential for smaller businesses that need every penny to sustain themselves.”

In terms of competition, Khan says PostEx’s novelty factor is its hybrid of fintech and logistics. It has raised $8.6 million to date, and its backers include Zayn Capital, Global Founder Capital, MSA Capital, RTP, FJ Labs and Shorooq.

In a statement, Senator Afnan Ullah Khan, a member of the Prime Minister’s IT Task Force Committee said, “This acquisition shows the importance of close collaboration between fintech and logistics highlighting the importance of access to capital. This acquisition makes PostEx the largest e-commerce service provider in the market, showing the potential of startups for challenging incumbents. It’s refreshing to see new solutions to old problems.”

Pakistan’s growing tech ecosystem is finally taking off

 



Monday, 29 August 2022

Peter Thiel backs electronics marketplace PriceOye in maiden Pakistan investment

Peter Thiel backs electronics marketplace PriceOye in maiden Pakistan investment

A Pakistani startup, which has taken inspiration from China’s JD.com and India’s Flipkart to build a managed marketplace of electronics products, said on Tuesday it has raised seed funding from scores of investors including PayPal founder Peter Thiel.

Launched in March 2020 — just two weeks before the COVID-19 pandemic ravaged the world — the Islamabad-based startup PriceOye offers a range of electronics products, including smartphones, TVs and home appliances.

Its seed funding round was led by JAM Fund, a venture capital firm by Tinder founder Justin Mateen. The institutional funding round also included participation of Beenext, DG Daiwa, Mantis VC, HOF Capital, Jet.com investor Palm Drive Capital and Atlas Ventures, among others. Angels including Thiel, Immad Akhud of Mercury Bank, and Asif Keshodia of Souq also participated in the round — alongside previous investors Fatima Gobi Ventures, SOSV, and Artistic Ventures. This is Thiel’s maiden investment in Pakistan.

PriceOye has served 45 million unique users in Pakistan in the last two years, covering 37.5% of the country’s total internet userbase, Adnan Shaffi, co-founder and CEO of the startup, told TechCrunch in an interview.

“We are the second most visited shopping website in the entire country, with over two and a half million monthly active users coming on the platform, doing research using our product recommendation engine, and then getting to know about different products,” he said.

After exiting two startups, Adan and his brother Adeel Shaffi got the idea of launching PriceOye when they were doing “a lot of island hopping” in Southeast Asia. The duo looked at several startups in Indonesia and India and found the Asian markets were seeing similar consumer internet trends play out — just at a different pace. They built a thesis that Pakistan will see similar adoption of consumer internet services in the next four to five years.

That’s the genesis of PriceOye.

The duo decided to go with the managed marketplace model, where only brands and their official representatives are allowed to sell products, to limit the instances of common frauds and errors that have proven to be painful to traditional online marketplaces, Adnan said.

“We realized that in a market, where trust is one of the biggest factors, and there’s a lot of trust deficit between the consumer and the brand, the only way a marketplace can work is the managed marketplace model, which originally started out of China from JD.com, then replicated by Flipkart, and a lot of other players in Southeast Asia,” Adnan said.

PriceOye sees 30% repeat users of its entire customer base who visit the platform regularly to purchase consumer electronics goods. The startup also claims to sell four smartphones to a single user per year on an average.

It is the largest online platform for selling mobile phones and accessories in Pakistan, claimed Adnan, adding that 35% of its overall orders come from tier-two and tier-three cities across the country.

“Within a short period of time, PriceOye has grown exponentially and has cemented its position as the leading national company in online consumer electronics. We are excited to join PriceOye in its mission towards changing the way people shop in Pakistan,” said Mantis VC founder and partner Alex Pall, in a prepared statement.

PriceOye is looking to deploy the fresh funding to expand its 97-member team by hiring new talent. It’s also planning to bring its platform closer to people in the country by starting offline experience centers — beginning with three centers in high-end shopping malls across Islamabad, Karachi and Lahore. More new products and categories are also in the pipeline for the eponymous platform.

Before the latest round, PriceOye had raised $450,000 in pre-seed funding from Fatima Gobi Ventures, Artistic Ventures and SOSV.

“It’s always a difficult choice for consumers to spend big amounts of money on high-value products while being unsure about their authenticity. I was inspired by the vision of PriceOye founders Adnan and Adeel of creating transparency and bringing convenience to customers when it comes to shopping for consumer electronics,” said Seamon Chan, managing partner of Palm Drive Capital, in a statement.



Singapore-based career development platform Glints recruits $50M in new funding

Singapore-based career development platform Glints recruits $50M in new funding

Glints, one of Southeast Asia’s largest talent development and recruitment platforms, announced today it ha raised $50 million in an oversubscribed Series D. The round was co-led by DCM Ventures, Lavender Hill Capital and returning investor PERSOL Holdings. This brings Glints’ total raised so far to $80 million.

As part of the investment, Lavender Hill Capital founding partner Xiaoyin Zhang and DCM Ventures general partner Ramon Zeng, will join Glints’ board.

Glints’ platform currently has three million professionals in five markets (Indonesia, Vietnam, Singapore, Malaysia and Taiwan), and 50,000 companies that are seeking workers, including AIA, IKEA, GetGo, KKday and Gameloft.

Despite layoffs, there’s still a talent crunch in Southeast Asia

The new capital will be used to expand Glints’ talent supply base in the Philippines and employer demand globally and hiring for its product and tech teams.

Founder and CEO Oswald Yeo told TechCrunch the company is focusing on the Philippines because of “its large and fast-growing international workforce. Additionally, we’re seeing local employers interested in hiring both tech talent locally and also remote hiring as well.

Founded in 2013, the Singapore-based startup says its annual revenue and gross profits grew 2.5x year-over-year, continuing its trend of annual revenue growing at a triple-digit percentage.

One growth driver is increase demand for remote workers. Glints says remote cross-border job postings grew more than 3x year-over-year, and that it sees positive contribution margins across all business units, with Indonesia and Vietnam continuing to be profitable. This continues a trend from earlier in the pandemic: over the past two years, Glints’ remote cross-border job posts have grown more than 11x.

How to recruit when your software startup is in stealth mode



Singapore-based Propseller uses data to take the hassle out of real estate transactions

Singapore-based Propseller uses data to take the hassle out of real estate transactions

Headquartered in Singapore, proptech startup Propseller is on a mission to make real estate transactions more efficient and data-driven for sellers and buyers alike. Its platform is able to tell users the likelihood of a conversion each step of the way. Today Propseller announced it has raised $12 million in Series A funding led by Vertex Ventures Southeast Asia and India. 

Other investors participating in the round include returning backers Hustle Fund, Iterative and Rapzo Capital, along with new investors Partech, ICCP SBIT, Vulpes Ventures and Redbadge Pacific. It also includes several prominent proptech founders, like PropertyGuru’s Jani Rautiainen, OpenAgent’s Marta Higuera, Homeday’s Steffen Wicker and Tushar Garg of Flyhomes. 

Founded in 2018, Propseller will use its Series A to scale its business model, expand its offerings (including adding services like moving) and enter overseas markets. It currently has about 50 employees, including 20 salaried real estate agents (or consultants, as the startup calls them), and plans to hire 200 more people for its marketing, operations, product, engineering and sales and real estate teams. 

By using technology to make the real estate buy/sell process more efficient, Propseller is also able to charge only 1% commission rate, as opposed to 2% for traditional real estate agencies, its founder and CEO Adrien Jorge told TechCrunch. 

Jorge became interested in real estate while growing up in Nice, France. He says people from his family either became engineers or real estate agents, and he noticed that the latter group made more money than the engineers. Curious, Jorge joined his mother’s real estate agency at the age of 14 and stayed there until he was 22. But when his grandfather asked if the wanted to take over the business, Jorge decided not to.

One of his reasons was that the traditional real estate agency model was hard to scale and very manual, and often charged commissions that are hard to justify. Instead, Jorge went on to work for tech companies, including six years at Groupon, where he was in positions including general manager of Southeast Asia. 

While looking for investment opportunities, Jorge experienced the hassle of buying real estate in Southeast Asia. For example, he says that property prices are often high, but service from traditional brokerages often leave much to be desired. He attributes this to the fragmentation of Southeast Asia’s real estate market, with 200,000 agents across Southeast Asia, who close on average only two transactions per year. 

As a result, Jorge saw an opportunity to build a platform to help people sell their homes more quickly, with transparency and the least amount of hassle. 

The reason why Propseller calls its licensed real estate agents consultants is because the company’s automation gives them the time to work on client relationships. On average, Propseller’s consultants close about 55 sales transactions per year, which also means they make more revenue. 

“We are very likely the only company in Singapore to tell you what is the expected conversion rate of buyer leads coming from PropertyGuru or 99.co,” said Jorge. This means when a lead is generated, it can be tracked from start to finish, so sellers and consultants know how likely a successful closing is at every step of the process. 

Viewings generally take place offline, but Propseller also makes video and VR viewings for each property. Sellers can stay on top of the process with a dashboard that shows them which channels their property is being distributed on, inquiries generated, scheduled viewings and offers. 

The COVID pandemic has made people more willing to buy large-ticket items online and many who will continue to work from home are seeking a larger property. As the pandemic subsides gradually, Jorge believes these trends will stick around. 

The company’s main competition are the 34,000 independent agents in Singapore, who own about 99% of the real estate market share. Proptech competitors include Own My Home and Blue Nest in Singapore, Red Fin in the U.S. and Flyhomes to a certain extend, Jorge said. 

Propseller is setting itself apart with an end-to-end real estate transaction platform, Jorge said. “We have broken down every step of the process, recording everything that happens and we are able to record data that no one else has and identify how that process can be optimized to get the best results.” 

In a prepared statement, Vertex Ventures Southeast Asia and India managing partner Carmen Yuen said that Propseller is “revolutionizing the way we transact our homes in a more cost and time-efficient, using technology and data. We’ve followed the Propseller team for more than two years now, and they have demonstrated impressive resilience and growth over the years.” 

Proptech still has fundamental problems for entrepreneurs to solve



Finally, an underwater messaging app

Don’t you hate it when, after going just five or 10 meters underwater, you lose signal completely? Now this vexing limitation of modern technology is being addressed by researchers at the University of Washington, who have made an underwater communication app that uses sonic signals to pass messages to your other submerged friends. It may sound silly, but millions of people could use this tech in both recreational and professional diving situations.

The communication problem underwater is simple: Rradio waves are absorbed by water, and no signal our phones send or receive can travel more than a few inches without being completely lost. That’s one reason submersibles and the like need a tether: to pass data back and forth to the surface.

Sound waves, on the other hand, travel through water quite readily, and are used by countless aquatic species to communicate. Not humans, though — because the way we make sound only works well in air. So for as long as anyone can remember, divers have communicated to one another using hand signals and other gestures.

Professional divers will have a vocabulary of dozens of signals, from “low on air” to “danger to your right” and anything else you can imagine coming up during a dive. But you have to learn those, and see them when they’re used for them to work; you can bet at least some divers wish they could tap out a message like they do above the waves.

That’s the idea behind AquaApp, a software experiment by the Mobile Intelligence Lab at UW, led by PhD student Tuochao Chen and prolific professor Shyam Gollakota.

The system uses a modified form of “chirping,” or using the phone’s speaker to create high-frequency audio signals to communicate data rather than radio. This has been done before, but not (to my knowledge) in such a simple, self-correcting way that any smartphone can use.

“With AquaApp, we demonstrate underwater messaging using the speaker and microphone widely available on smartphones and watches. Other than downloading an app to their phone, the only thing people will need is a waterproof phone case rated for the depth of their dive,” said Chen in a UW news release.

It’s not as simple as just converting a signal to an acoustic one. The conditions for transmitting and receiving are constantly changing when two people’s locations, relative speeds and surroundings are constantly changing.

“For example, fluctuations in signal strength are aggravated due to reflections from the surface, floor and coastline,” said Chen’s co-lead author and fellow grad student, Justin Chan. “Motion caused by nearby humans, waves and objects can interfere with data transmission. We had to adapt in real time to these and other factors to ensure AquaApp would work under real-world conditions.”

The app is constantly recalibrating itself with a sort of handshake signal that the phones can easily hear and then report back the characteristics of. So if the sender’s tone is received but the volume is low and the high end is attenuated, the receiver sends that information and the sender can modify its transmission signal to use a narrower frequency band, more power and so on.

In their on-site experiments in lakes and “a bay with strong waves” (probably Shilshole), they found that they could reliably exchange data over 100 meters — at very low bitrates, to be sure, but more than enough to include a set of preprogrammed signals corresponding to the old hand gestures. While some (including myself) may lament the loss of an elegant and very human solution to a longstanding problem, the simple truth is this might make dangerous diving work that much safer, or let recreational divers communicate more than “help” and directions.

That said, diving is a pastime and profession steeped in history and tradition, and it’s very unlikely that this digital communication method will supplant gestures — an analog, self-powered alternative is exactly the kind of thing you want ready as a backup if things go sideways.

AquaApp’s code is open source and free to use — take a look and try it yourself at this GitHub repo.



Netflix’s ad-supported plan could cost as low as $7

Netflix’s ad-supported plan could cost as low as $7

Netflix’s upcoming ad-supported plan could cost anywhere from $7 to $9 per month according to a Bloomberg report published over the weekend. For comparison, the streaming service offers a basic single-screen plan in the U.S. for $9.99 per month, while its most popular plan, which offers full HD streaming on two screens, costs $15.99 per month.

The Bloomberg report noted that Netflix plans to show roughly four minutes of commercials for an hour of programming, which is on par or less than its competitors. It also said that the company might show ads before and during a show, but won’t show anything after an episode ends.

In April, the streaming giant said it plans to offer its ad-supported plan next year. But since then multiple reports have remarked that the firm might launch this plan by the end of the year. The new report says Netflix might launch its ad-fueled tier in at least half a dozen markets in the last quarter of the calendar year.

During its recent earnings call, Netflix confirmed that users subscribing to the ad-supported plan wouldn’t have access to its whole catalog initially — that could be due to its licensing deal with different studios. Recent reports have also revealed that Netflix might now allow offline viewing in its upcoming plan.

What’s more, a report from Bloomberg last week suggested Netflix might not run ads on kids’ content — even on the ad-supported plan. The report noted the company might initially refrain from showing ads on its original movie programming.

The streaming giant has tried to garner more users by experimenting with cheaper plans like mobile-only plans available in India, Malaysia, Nigeria, Kenya, and South Africa. However, the ad-supported plan could become available globally after launch. Estimates suggest that ads on Netflix will generate $8.5 billion in revenue by 2027. A study published by Digital TV Research in May suggests that the global ad-supported video on demand (AVOD) market will grow to $70 billion by 2027 — with the U.S. generating $31 billion.

Netflix is not the only streaming service looking to rely on an ad-supported plan to expand its user base. In March, Disney+ confirmed that it is planning to introduce a similar tier by the end of the year. Earlier this month, the company confirmed the launch for December with $7.99 per month pricing. During its earnings call for Q2 2022, Warner Bros. Discovery also said it’s exploring an ad-fueled plan for the new service — slotted to launch in 2023 — created by the merger of HBO Max and Discovery+.



Sunday, 28 August 2022

The majority of early-stage VC deals fall apart in due diligence

The majority of early-stage VC deals fall apart in due diligence

Covering Five Flute’s fundraising and tearing down the deck the company used to raise its $1.2 million seed round had me wondering: How the hell do investors decide whether to invest in a company at the earliest stages?

VC firm Baukunst led the Five Flute investment, and I sat down with Axel Bichara and Tyler Mincey to learn how they evaluate a potential early-stage deal. They told me that the vast majority of the deals they look at fall apart at the due diligence stage and helped me get a deeper understanding of what that process looks like from the inside.

“Common wisdom tends to generate mediocrity. That’s not helpful. In VC, we are looking for the outliers.” Axel Bichara, co-founder and general partner, Baukunst

“The decision to take a second meeting is one of the biggest decisions in venture capital because, from that [moment] onward, you are committing significant time,” Bichara said, explaining that, in his experience, they only invest in one out of every 250 deals or so that they see. Only about 1 in 40 first meetings result in a second meeting. “Everything you do after the first meeting, I consider due diligence. You’re evaluating the founders. At the stage we invest, most of our due diligence focuses on two things: The quality of the founding time and the size/attractiveness of the market opportunity. If you get those two right, everything else will fall into place, almost by definition.”

With the right team and a huge market, everything else can be figured out later, Bichara argued, saying that if you have a great “founder-market fit,” you’re off to the races.

“The right founding team will do the right thing [in that case]. They will execute well, and there will be capital-efficient market opportunities. You enter with a competitive advantage, find a niche and scale from there. If you don’t get a resounding ‘yes’ from those two, you shouldn’t invest,” Bichara explained. “All the due diligence you do is geared toward answering those two questions.”

In the case of Baukunst, the firm’s investment thesis means that for an investment to make sense, the startup needs to at least have the possibility of a $1 billion outcome or more — which means that the market opportunity needs to be big enough to enable that if the founding team executes well.

“You just work backward from there,” Bichara said, “and all the due diligence we do will be in support of that.”



Can battery recycling help end US reliance on China?

Can battery recycling help end US reliance on China?

The Inflation Reduction Act, signed into law by President Joe Biden earlier this month, puts the U.S. on the path toward realizing its carbon reduction goals, in part by spurring its EV market. It has also plunged that same market into short-term chaos by requiring entire supply chains to be restructured in just a few years.

The catalyst is the IRA’s steep requirements around where automakers can shop for critical battery materials if they want to be eligible for the $7,500 Clean Vehicle tax credit. China, the world’s largest producer of such supplies, is not on the list.

As a result, many in the industry are swiveling their heads toward battery recycling companies that promise to supply automakers with at least some of the materials they’ll need in the coming years to produce the wave of EVs coming to market. This space has already seen substantial recent VC investment, particularly as millions of tons of lithium-ion batteries are expected to retire by 2030.

The new legislation has sent a signal to recyclers, battery producers and automakers that 2030 is not soon enough.

Ending reliance on China



Aston Martin Valhalla plug-in hybrid to shape future EVs

Aston Martin Valhalla plug-in hybrid to shape future EVs

Aston Martin is using its upcoming Valhalla high-performance plug-in hybrid to develop a playbook for its future EVs.

Executives said that the 937-horsepower Valhalla supercar exhibited at the Pebble Beach Concours d’Elegance on Sunday showcases lessons in driver engagement, visual effects and sound that could surface in its first EV in 2025.

“If we get that performance hybrid recipe right, it’s something we could see elsewhere later on in the range,” said Alex Long, head of Product & Market Strategy for Aston Martin Lagonda.

The Valhalla’s engineers were especially concerned with retaining the brand’s racetrack-ready driving dynamics when developing the mid-engine two seater, he said. Electric vehicles can feel less engaging as the driver cedes control to the electrical systems and advanced driver assistance functions that govern them.

“EVs are more like daily drivers and less of a weekend thrill,” Long said.

Engineers strived to put the driver back in control of the Valhalla’s hybrid powertrain, which combines a twin-turbo V8 with two e-motors, by dialing in “a little bit of oversteer and lots of feedback from the front end” among other tweaks.

“One thing we’ve been very careful to do is with tuning the responses of the car back to the driver,” he said. “If you over assist the drive, then there’s a level of disengagement.”

Electric motors provide quicker acceleration, hybrids and EVs are heavier and tend to be less nimble than their gas-engine counterparts. The additional weight from the battery powertrain presented several challenges, including figuring out how to change direction quickly without overloading the brake system.

The Valhalla is also pioneering the exterior design for the brand’s electrified portfolio, said Chief Creative Officer Marek Reichman. Its body displays both painted and carbon surfaces to create shadows that help make the car appear to be in motion when standing still.

“There has to be a great visual balance, so how do you break up the car, whether it’s the carbon or the body color, or paint it to give a vernacular to electrification? I think it has to have its own language.”

Sound, too, came in to play. Historically, engine noise has been crucial to the perception of a sports car’s performance. “It’s a big challenge with EVs because you lose a lot of the emotion with the sound quality, and you don’t have that step process of gearing up,” Long said.

The Valhalla is “a nearly silent operation” in EV mode, he added. “All of the noise will come from the V8, which is going to be loud.”



Burn, baby, burn. Real estate-focused fintech startups feel the heat

Burn, baby, burn. Real estate-focused fintech startups feel the heat

Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann

As we all know, the housing market goes through cycles. Low interest rates mean more purchases and refinances. Higher interest rates mean far fewer purchases and refinances — and lots of business for fintechs operating in the real estate industry.

In 2020, historically low interest rates led to a surge in both rates and purchases. Existing home buyers rushed to alter the terms of their loans and aspiring home buyers took advantage of those low rates to purchase homes. Factor in that more people were spending more time at home than ever due to COVID shelter-in-place orders, home took on new meaning. Suddenly, many needed more space. Others took advantage of new remote work policies and being constrained by commutes to relocate to new homes.

This led to a boom in business for startups catering to home buyers. Companies (like digital mortgage lender Better.com) couldn’t keep up and had to go on a hiring spree to meet all the consumer demand. Venture dollars flowed into proptech after proptech.

Then 2022 came.

Mortgage interest rates, which began their ascent in 2021, continued to climb…significantly. Prospective home buyers, turned off by the rate surge as well as the competitive and overheated housing markets, began to reconsider their plans, as buying was suddenly far less appealing. At the same time, as the venture market slowed dramatically and suddenly, raising capital was much harder.

Layoffs in the sector began — and they took place in a range of real estate tech companies, big and small. Digital mortgage lender Better.com conducted its first of four layoffs in the past nine months on December 1, 2021. Its fourth layoff was scheduled to take place last week before news of it leaked to some employees, and the media. (You can read my story on that here).

And, real estate tech startup Reali announced last week that it had begun a shutdown and would be laying off most of its workforce on September 9.

In a press release, co-founder and chairman Amit Haller said “the challenging real estate and financial market conditions and unfavorable capital-raising environment” led to the decision to wind down operations.

“Reali was one of the pioneering companies to offer the ‘buy before you sell’ and ‘cash offer’ programs to homeowners,” he said in the release. “We believed deeply in benefiting the consumer foremost in every transaction.”

Readers reacted with shock that a company could burn through so much cash, so fast.

Indeed, a little birdie told me that six-year-old Reali had been burning through cash and is in debt as it tries to sell off parts of its business. The company did not respond to my requests for comment.

Now, to be fair, Reali and Better.com aren’t the only ones facing challenges in the real estate tech world. Earlier this month, another “buy before you sell” startup Homeward laid off 20% of its staff. And Redfin and Compass let go of a combined 900+ people in mid-June. In February, online brokerage Homie laid off about one-third of its staff, or some 90 to 100 people.

While Better.com and Reali aren’t in the same exact space, they both cater(ed) to home buyers. And they both apparently burned a lot of cash in 2021. In case you missed it, Better.com CEO Vishal Garg was recorded — in a meeting held after the company’s first round of layoffs last year — saying: “Today we acknowledge that we over hired, and hired the wrong people. And in doing that we failed. I failed. I was not disciplined over the past 18 months. We made $250 million last year, and you know what, we probably pissed away $200 million.”

Oof.

Frankly, it’s both mind-blowing and offensive to hear of companies that can blow through enough cash to help millions of people in need like it’s nothing.

Personally, I’m all about the lean-and-mean mentality. Operate capital efficiently all the time, downturn or no downturn, and you won’t be as panicked and sinking when the going gets tough. That means not hiring for the sake of hiring, thinking long-term and not spending like there’s no tomorrow.

More fintechs are focusing on nonprofits

Last week, I came across, or was pitched, several tidbits of news that made me realize that an increasing number of fintech companies are launching products to help nonprofits and charities more efficiently move, raise and distribute more money.

First up, fintech startups Highnote and GiveCard said they are partnering to help nonprofits, shelters and governments issue prepaid debit cards to the “financially vulnerable” communities they serve. Via email, they told me: “Studies show direct cash payments can put people on a path to permanent housing and end their reliance on predatory lenders. But buying a bunch of prepaid debit cards from the local corner store and then surveying the recipients every week to see if it’s helping isn’t a scalable solution, and the lack of data is a major reason why city governments are reluctant to fund it. The tech behind Highnote allows GiveCard to rapidly deploy cards to its network of nonprofits and collect enough top-level anonymized data to figure out whether the programs are working, and whether the amount or the frequency of the payments needs to be adjusted, opening the possibility for more city governments to start adopting these programs.”

Los Angeles–based B Generous, a self-described “fintech for good” platform, has launched Donate Now, Pay Later (DNPL), a new tool it says allows donors “to make contributions to their favorite nonprofits through a proprietary philanthropic credit product called a Point of Donation Loan™ (PoDL). Using Donate Now, Pay Later™, B Generous says the nonprofit receives the donation immediately, and the donor gets the tax receipt right away, but the donor pays nothing out of pocket at the point of donation and instead pays over time, with no interest, costs or fees.” The goal, it says, is to increase average donation values for nonprofits.

It’s not only startups getting in the nonprofit space. TC’s Sarah Perez reports that “PayPal is expanding further into the charitable donations business with its August 25 launch of support for Grant Payments. The new product has been created in partnership with National Philanthropic Trust (NPT) and Vanguard Charitable and allows Donor-Advised Fund (DAF) sponsors, community foundations and other grantmakers to move their donations electronically through PayPal’s platform.” Notably, Sarah adds that PayPal cited “a sizable market in charitable giving as a reason for entering this space with a new product.”

Fintech for good? Love it.

Climber giving another climber a helping hand up to the top of a rock.

Image Credits: kieferpix / Getty Images

Weekly News

Within half a year of going to market with its bill pay feature, Ramp went from launch to more than $1 billion in annualized bill pay volume, according to co-founder and CEO Eric Glyman. Last week, he told me that Ramp has now added financing and overlay to its bill pay product with a new offering called Flex. With the new Flex feature, customers will have the option “in one click” to add financing to pay the money back up to 30, 60 or 90 days later for a fee while the vendor “gets paid right away.” Besides the extra time, bill pay gives the business the flexibility to pay any way they wish or the vendor requires, including via ACH, check or card. Read more, by me, here.

Natasha Mascarenhas broke the news that Argyle, which at one point aimed to be the “Plaid for employment records,” has laid off 6.5% of its staff — five months after raising a $55 million Series B. The company blamed the decision on a move upstream to serve more enterprise customers rather than SMBs (sound familiar? Ahem, Brex). Yet, it’s still hiring. Confused? So were we. But we can only infer that it needs to hire more people with enterprise experience and let go of those with smaller company–focused skill sets.

News that T. Rowe Price cut the value of its stake in fintech giant Stripe made headlines last week, the new data point coming in the wake of similar cuts by other investment houses regarding their ownership in late-stage startups. However, while it is true that T. Rowe Price reduced the value of its stake in Stripe, part of its Global Technology Fund, the latest reduction in its worth is not unique. Not only has Fidelity disclosed that it now values its Stripe shares at a discount to prior marks, but the latest T. Rowe Price news also comes after a similar cut in March. But the company is not the only fintech under pressure, Alex Wilhelm and I write in this piece. Meanwhile, at least one VC wants to cash in on Stripe’s lowered valuation. Homebrew’s Hunter Walk tweeted: “pls let me know if you find anyone selling preferred shares at this latest valuation because I’d like to purchase.”

“Google Wallet is now available in South Africa, the first market for this product in Africa, to make it easy for users to save and easily and securely access their payment cards, loyalty cards and boarding passes,” reported Annie Njanja.

MANTL, a provider of account origination solutions, has partnered with Alliant Credit Union — a $17 billion digital financial institution — to expand into the credit union market with MANTL for Credit Unions. Via email, the company said the software was designed to improve application conversion rates and reduce the time to open new or additional accounts.

Personal finance company MX announced that Wes Hummel — who previously served as PayPal’s vice president of site reliability and cloud engineering — has been named chief technology officer (CTO) of MX. The company told TechCrunch Hummel joins MX just weeks after Jim Magats, also formerly of PayPal, was named CEO of the company.

Image Credits: Twitter

Fundings and M&A

Seen on TechCrunch

  • Complete has raised $4 million in seed funding led by Accel, with support from Y Combinator and executives at Calm, Opendoor and Stripe. The San Francisco startup helps startups think through the “why” and “how” of employee pay. Anita Ramaswamy digs in here.
  • Dubai-based Zywa, a neobank for Gen Z, plans to fuel its growth in the United Arab Emirates (UAE), and to kick-start its expansion to Saudi Arabia and Egypt after raising $3 million seed funding at over $30 million (110 million AED) valuation. Read more from Annie Njanja here.
  • Deposits, a Dallas-based startup offering a cloud-based, plug-and-play feature to simplify the implementation of digital banking tools for credit unions, community banks, insurers, retailers and brands, raised $5 million.  Christine Hall gives us the story here.
  • Lastly, CSI, a decades-old fintech solutions vendor, agrees to be acquired for $1.6 billion.

And elsewhere

Now for an important PSA: TechCrunch Disrupt finally returns — live and in person — to San Francisco on October 18–20. We’re excited to share the complete agenda, where you’ll hear from game-changing leaders like Serena Williams (Serena Ventures), Marc Lore (Wonder Group), Ami Gan (OnlyFans), Johanna Faries (Call of Duty), Chris Dixon (a16z), and many more!

In addition to hearing from these leaders, you can get your how-to on over at the TechCrunch+ stage, check out roundtable discussions and breakout sessions. Whatever you do, start planning your schedule now so you don’t miss a lick of all this startup goodness.  Register before September 16 and save $1,100. This will be my first Disrupt and I am beyond excited!

That’s it for this week. Thanks for joining me on this wild fintech ride. See you next week! xoxo, Mary Ann



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