Acapela, from the founder of Dubsmash, hopes ‘asynchronous meetings’ can end Zoom fatigue

This post is by Steve O'Hear from Fundings & Exits – TechCrunch

Acapela, a new startup co-founded by Dubsmash founder Roland Grenke, is breaking cover today in a bid to re-imagine online meetings for remote teams.

Hoping to put an end to video meeting fatigue, the product is described as an “asynchronous meeting platform,” which Grenke and Acapela’s other co-founder, ex-Googler Heiki Riesenkampf (who has a deep learning computer science background), believe could be the key to unlock better and more efficient collaboration. In some ways the product can be thought of as the antithesis to Zoom and Slack’s real-time and attention-hogging downsides.

To launch, the Berlin-based and “remote friendly” company has raised €2.5 million in funding. The round is led by Visionaries Club with participation from various angel investors, including Christian Reber (founder of Pitch and Wunderlist) and Taavet Hinrikus (founder of TransferWise). I also understand Entrepreneur First is a backer and has assigned EF venture partner Benedict Evans to work on the problem. If you’ve seen the ex-Andreessen Horowitz analyst writing about a post-Zoom world lately, now you know why.

Specifically, Acapela says it will use the injection of cash to expand the core team, focusing on product, design and engineering as it continues to build out its offering.

“Our mission is to make remote teams work together more effectively by having fewer but better meetings,” Grenke tells me. “With Acapela, we aim to define a new category of team collaboration that provides more structure and personality than written messages (Slack or email) and more flexibility than video conferencing (Zoom or Google Meet)”.

Grenke believes some form of asynchronous meetings is the answer, where participants don’t have to interact in real-time but the meeting still has an agenda, goals, a deadline and — if successfully run — actionable outcomes.

“Instead of sitting through hours of video calls on a daily basis, users can connect their calendars and select meetings they would like to discuss asynchronously,” he says. “So, as an alternative to everyone being in the same call at the same time, team members contribute to conversations more flexibly over time. Like communication apps in the consumer space, Acapela allows rich media formats to be used to express your opinion with voice or video messages while integrating deeply with existing productivity tools (like GSuite, Atlassian, Asana, Trello, Notion, etc.)”.

In addition, Acapela will utilise what Grenke says is the latest machine learning techniques to help automate repetitive meeting tasks as well as to summarise the contents of a meeting and any decisions taken. If made to work, that in itself could be significant.

“Initially, we are targeting high-growth tech companies which have a high willingness to try out new tools while having an increasing need for better processes as their teams grow,” adds the Acapela founder. “In addition to that, they tend to have a technical global workforce across multiple time zones which makes synchronous communication much more costly. In the long run we see a great potential tapping into the space of SMEs and larger enterprises, since COVID has been a significant driver of the decentralization of work also in the more traditional industrial sectors. Those companies make up more than 90% of our European market and many of them have not switched to new communication tools yet”.

MindLabs raises £1.4 million for its new platform, a “Peloton for mental health”

This post is by Catherine Shu from Fundings & Exits – TechCrunch

Ideally, mental wellness should be considered part of a healthy daily routine, like exercise. But even exercise is difficult to turn into a regular habit. Peloton addressed physical fitness by combining smart stationary bikes with live classes and community features to create an engaging experience. Now a new startup, MindLabs, is taking a similar approach to mental wellness.

Based in London, MindLabs announced today it has raised £1.4 million (about USD $1.82 million) in pre-seed investment led by Passion Capital, with participation from SeedCamp, as well as several founders of British consumer tech startups: Alex Chesterman (Cazoo and Zoopla); Neil Hutchinson (Forward Internet Group); Steve Pankhurst (FriendsReunited); James Hind (Carwow); and Jack Tang (Urban).

MindLabs was founded earlier this year by Adnan Ebrahim and Gabor Szedlak, who previously launched and ran Car Throttle, an online media and community startup that was acquired by Dennis Publishing last year. Ebrahim told TechCrunch that MindLabs’ goal is to “make taking care of your mental health as normal as going to the gym.”

Its platform will launch next year, first with a mobile app that combines live videos from mental health professionals who lead meditation and mindfulness sessions, and features to help users track their stress levels. The full platform will also include an EEG headband, called “Halo,” that measures signals, like heart and respiration rates, that can help show users how effective their sessions are.

Going from CarThrottle, sometimes described as “a BuzzFeed for cars” to mental wellness might seem like a big leap, but Ebrahim said their experience “running a media company in a tough market with a young, millennial workforce” inspired him and Szedlak to think more about the issue.

MindLabs founders Gabor Szedlak and Adnan Ebrahim

MindLabs founders Gabor Szedlak and Adnan Ebrahim

“We witnessed firsthand how there was a complete lack of investment in helping this generation with their mental health in a way that they’re used to: a community product that is mobile-first and video-led,” Ebrahim said.

“Alongside that, we had to find ways to deal with managing our own mental health given the stresses that can come when running a fast-paced, venture-backed company. And when we saw the alarming statistics in young adult suicide rates and depression, we realized that finding a solution for our own problems would help millions of others, too.”

The two left Dennis Publishing to begin work on MindLabs at the end of January. During the next few months, including time spent in COVID-19 lockdown, they began researching and developing initial concepts for the platform.

“It’s fair to say that the pandemic did end up altering the course of MindLabs,” Ebrahim said. “For example, we built more real-time community features into the app as a result of the isolation and loneliness we are all now facing as a result of lockdown. We really want to make sufferers feel less alone during the hard times, but with the added convenience now of being able to watch our videos at home.

“This has already become the new normal when it comes to physical fitness, with companies like Peloton exploding in growth, and we see the same trend happening with mental wellness, too,” he added.

The COVID-19 pandemic has also been described as a mental health crisis, and downloads of meditation and mindfulness apps like Calm, Headspace and Relax: Master Your Destiny, have grown as people try to deal with anxiety, isolation and depression at home.

Two of the main ways MindLabs’ platform differentiates from other mental wellness apps is the combination of its video classes and EEG headband. The videos will initially range in length from 10 to 40 minutes and, like Peloton’s classes, will be available on livestream or in pre-recorded, on-demand sessions.

Instead of categorizing videos by technique (for example, meditation, breathing or visualization), MindLabs decided to sort them into issues that users want to cope with, like anxiety, relationships, motivation or addiction. For example, meditation classes may include ones focused on “Overcoming COVID-19 Anxiety” or “Coping With Stress At Work.”

Community features will be linked to the classes: the number of concurrent users in a class will be displayed, along with a live feed showing subscriber achievements, like streaks or number of minutes spent in a “calm state,” that other people can react to for positive reinforcement.

Halo was developed with a hardware specialist that Ebrahim said has seven years of building and distributing medical grade wearables.

“Most importantly our headset will be going through the rigor of ISO 13485 so we can ensure the product is of the highest quality and the data we gather is the most accurate,” he added. “We want to make this technology accessible, so we expect the price of the Halo to be comparable to, say, an Apple Watch.”

Other EEG headbands, including products from Muse and Emotiv, have been on the market for a while. In MindLabs’ case, its headband will help users visualize data before, during and after their classes, including information about their brain waves, heart rates and muscle tension, and saved in the app so they can track their progress.

Turning mental wellness into a habit

One of the biggest challenges that all mental wellness apps need to address is user engagement. It can be hard staying motivated to use a self-directed mental health app when someone is already stressed, depressed or very busy. On the other hand, when they feel better, they might stop checking in.

Ebrahim sees this as a major opportunity for MindLabs, and its EEG headband and data visualization features will play a major role. “Even though there was been a proliferation of mental health apps, retention has proven difficult. But we think that is because these apps truly don’t understand their users,” he said.

“With the data we’re able to show, not just through the Halo but through syncing with Apple HealthKit, we can show our subscribers a positive progression of their mental health, similar to how you can see your weight change on a scale, or improvement in heart rate variability in an app. This helps build a powerful habit because we can finally help to close the loop when it comes to improving mental fitness.”

Participating in live classes provides accountability, too, he added. “The act of scheduling a class and tuning in with thousands of others is a powerful force, similar to having a personal trainer in the gym making sure you turn up and workout.”

MindLabs also plans to build communities around its instructors. During livestreams, instructors will welcome new subscribers and mention user achievements. After each workout, users will get a results screen they can share, similar to screenshots from fitness apps like Strava or Nike Training Club.

In terms of protecting personal privacy, Ebrahim said MindLabs is “firmly against any form of data commercialization.” Instead, it will monetize through monthly or yearly subscriptions, and user data collected through Halo or the app will only be used to make personalized content recommendations.

In a statement about Passion Capital’s investment in MindLabs, partner Eileen Burbidge said, “We’re incredibly excited to be working with MindLabs as they transform the way we look after our minds. Mindfulness is more important now than ever and we know that Adnan and Gabor’s commitment to best in class content, quality production and unparalleled user experience means they’re the best to bring this platform to market.”


As startups accelerate in record Q3, Europe and Asia rack up huge VC results

This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

Venture capital activity in Europe and Asia saw a strong return to form in Q3, data indicates.

The two continents enjoyed more venture capital investment into their local startups than in some time, underscoring that strong VC results the United States saw in the third quarter were not a fluke, but part of a broader trend.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

Data compiled by CB Insights shows a global acceleration in the number of dollars venture capitalists are putting to work around the globe as 2020 chews through its second half. The record figures that Q3 supplied stand in stark contrast to the fear that overtook startup-land in late Q1 and early Q2, when COVID-19 threw some young technology companies surprise turbulence.

But the dip in venture capital activity was short-lived. As many startups sold software, they found their wares suddenly in greater demand; across a host of verticals, startups benefited from an accelerated digital transformation as the world adapted to a new work environment. Aside from clear winners like video conferencing tools, other categories from remote learning to security tooling also got a bump.

The COVID-tailwind, as it is sometimes called, does not appear to be specific to the United States or North America. Instead, given what the venture capital data states, we can infer that startups the world around are enjoying a similar boost.1

Let’s get into the numbers to better understand what’s up in Europe and Asia. (As an aside, if you have data on African startups’ venture capital results, please email me as I am starting to poke around for a more global picture. Recent deal activity makes it plain that American media needs to do more and better reporting on the continent.)

A strong Q3

The venture capital world’s center of gravity still lands somewhere in the United States, but here’s how the three continents managed in Q3 2020, looking at their raised venture capital dollars:

  • North America: $37 billion
  • Asia: $24 billion
  • Europe: $9 billion

Asia’s result was its best since at least Q4 2018, as far back as our dataset goes. Europe’s total tied its high-water mark set in Q2 2019. But as a combined pair, venture capital outside North America might have just had its best quarter in years, if not ever.

Here’s the data in graphical format:

Via CB Insights, shared with permission.

Spendesk raises another $18 million for its corporate card and expense service

This post is by Romain Dillet from Fundings & Exits – TechCrunch

French startup Spendesk has added $18 million to its Series B round. The company already raised $38.4 million as part of its Series B last year, which means that it raised $56.4 million as part of this round. Eight Roads Ventures is investing in today’s extension round.

Spendesk, as the name suggests, focuses on all things related to spend management. The company issues virtual and physical cards for employees, lets you set up an approval workflow and manages expense reimbursements. It can also centralize all your invoices and receipts on the platform.

By centralizing everything on the same platform, it lets you control your spending in real time and save time on accounting tasks. Reconciliation is easier if you combine transactions and receipts on Spendesk. Clients can also export data to Xero, Datev, Netsuite or Sage.

Image Credits: Spendesk

For big expenses, you can send a request to your manager. If they approve your request, you receive a single-use virtual card for that expense.

Similarly, if your company gives you a physical debit card, you get a pre-defined budget. Your manager can top up your card for big expenses, block ATM withdrawals, block weekend transactions and more. Employees can check their payments from the mobile app, see their card balance and add receipts.

Spendesk is a software-as-a-service product with a monthly subscription fee. While transactions have probably slowed down due to the economic crisis, the company says that its subscription revenue has doubled year-over-year. In just a year, the company grew from 100 to 200 people.

It remains focused on small and medium companies across Europe. There are 40,000 people using Spendesk through their companies. Clients include Algolia, Curve, Doctolib, Raisin and Wefox. The company has hired Joseph Smith as Chief Revenue Officer, pictured left above with the company’s CEO Rodolphe Ardant (pictured right).

Image Credits: Spendesk

Ÿnsect, the makers of the world’s most expensive bug farm, raises another $224 million

This post is by Jonathan Shieber from Fundings & Exits – TechCrunch

Ÿnsect, the startup building the world’s most high tech bug colony, have added $224 million in equity and debt to an already impressive $148 million cash haul as it looks to commercialize its business.

Investors backing the company include the Los Angeles-based investment firm Upfront Ventures and the FootPrint Coalition, an investment vehicle financed by celebrity superhero Robert Downey Jr.

The financing, which includes $139 million in debt and another $65 million in equity will be used to fund the construction of the world’s largest insect farm in Amiens, France — set to open in early 2022.

Why invest a total of $372 million in equity and debt into bug farms? For Ÿnsect, it’s all about protein… and fish. Lots of fish.

See fish farming is an exploding industry even as the numbers of wild caught fish dwindle thanks to rising consumer demand and declining supplies thanks to ocean acidification and warming waters caused by climate change.

Industrial fish farming requires a lot of protein — and the sources of that protein are not good enough to keep industrial farmed fish healthy.

Ÿnsect hopes to change that by providing insect protein for things like fish food and fertilizer — and eventually pet food and (farther down the road) even food for people.

“Ÿnsect isn’t just about insect farming: With climate change and increasing populations worldwide, we need to produce more food with less available land and fewer resources, so that we’re not clearing forests and emptying our oceans. We believe Ÿnsect can play a pivotal role in this global solution,” co-founder and CEO Antoine Hubert said in a statement.

The company’s high-tech, vertical insect farms (primarily raising mealworms) are perfect proteins for the fish and can replace the limited sources of protein the industry currently relies on, according to investors like Upfront Ventures’ Yves Sisteron.

“Oceans are emptying and fish farms are taking over. We’re approaching 50 percent of fish coming from fish farms,” said Sisteron. “One of the main ingredients of fish feed comes from fish. These are from trawlers that rake the bottom of the ocean for anchovies that are combined with a protein paste that is fed to fish for fish farms. And that is basically not sustainable. The amounts in question are gigantic. Globally there’s about 44 million tons of fishfeed per year that is fed to farmed fish.”

Ÿnsect’s mealworms actually provide the fish with a lower-cost, higher quality protein, Sisteron said. “What Ÿnsect is solving is: Can we feed those fish a different kind of protein that will be scalable and also nutrient rich for the fish,” he said.

Ÿnsect transforms insects (and mealworms in particular) into proteins for animals and plants. The company is building full-stack factories that are fully automated, from insect reproduction to sterilization, sorting and packaging.

When the Amiens-based farm is open for business, the company expects to produce 100,000 tons of insect products annually. 500 people will work directly and indirectly on the project.

For the Downey Jr.-backed FootPrint Coalition Ventures, Ÿnsect’s combination of sustainable protein cultivation and massive end markets represented a compelling investment opportunity and a chance to back another company doing its part to combat climate change, according to founding partner Jonathan Schulhof.

It’s the firm’s second publicly disclosed investment after the bamboo-based toilet paper company Cloud Paper.

“We find the aquaculture industry to be absolutely fascinating and we think what they’re doing in that industry is vital,” Schulhof said.

Upfront and FootPrint are joining previous investors like Astanor Ventures along with other financial backers including Happiness Capital, Supernova Invest and Armat Group.

Caisse des Dépôts, Crédit Agricole Brie Picard and Caisse d’Epargne Hauts-de-France are the top banks contributing to today’s financing by providing a credit line. Some of them are taking some equity and other banks are also participating. Overall, Ÿnsect has raised $425 million since 2011.

Companies have already committed $105 million worth of contracts. Clients include wine growing company Torres, fish feed company Skretting and plant fertilizer company Compo Group.

In the future, Ÿnsect also plans to expand to the U.S. and manufacture new products, such as wet pet food.

Accel VCs Sonali De Rycker and Andrew Braccia say European deal pace is ‘incredibly active’

This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

The other week TechCrunch’s Extra Crunch Live series sat down with Accel VCs Sonali De Rycker and Andrew Braccia to chat about the state of the global startup investing ecosystem. Given their firm’s broad geographic footprint, we wanted to know what was going on in different startup markets, and inside a number of business-model varietals that we are tracking, like API-focused startups and low-code work.

As with all Extra Crunch Live episodes, we’ve included the full video below, along with a number of favorite quotes from the conversation.

Above the paywall, I wanted to share what De Rycker said about the European startup ecosystem: It’s been stuck in my head for the last day, because her comments points to a future where there is no single center of startup gravity.

Instead, considering her bullishness on her local scene, we’re going to see at least three major hubs, namely North America with a locus in the United States, Asia with a possible capital in India, and Europe, with a somewhat distributed layout.

Here’s De Rycker from our chat, responding to my question about how active the European venture and startup scene is today (transcript has been lightly edited for clarity):

What has surprised me even more [than change in the European startup scene over time] is the acceleration in the last couple of years. And I think it’s continued in the last few months, despite the COVID environment.

And that’s really because Europe isn’t just one location, right? It’s a collection of different ecosystems, different locations, different hubs. At any point in time there are 15 to 20 cities that are relevant, and they’ve all sort of reached this tipping point. And together, Europe is at this inflection point, in terms of the quality of entrepreneurs, [and] the number of opportunities. And it feels like it’s all come together with the digitization that’s going on that we’re all, you know, very much believing in right now. And the fact that there’s a ton of capital around. So I would say that we’re seeing a pretty frenetic pace, more than, candidly, pre-COVID, which is not something we expected. […]

But I would say that overall, Europe is incredibly active [regarding] deal pace, deal count, I wouldn’t say it’s very different from what I understand to be the situation in the U.S.

Undergirding what De Rycker said above, TechCrunch recently reported on the financial results of TransferWise, a European fintech unicorn that grew 70% in the last year, to £302.6 million in revenue. Toss in Adyen’s epic run as a public European tech company and there’s lots to celebrate from the continent, even if we don’t read enough about here in the States.

Extra Crunch Live continues with some really damn fun stuff coming up (including a few more that I am hosting). So, make sure you’re in and ready for the next edition as we dig deeper into season two.

Hit the jump for the full chat and some further bits from the transcript.

Sonali De Rycker and Andrew Braccia

Here’s the full video:

Digging into the next wave of tech IPOs

This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

After taking five consecutive business days off from my work laptop — and to shout at my personal laptop while losing games on Dominion online — I am back. I missed you. And while The Exchange’s regular columns were off this week (Friday aside, which you can read here), there’s still a hell of a lot to talk about.

First, a new website. If you click here, you’ll be taken to a sortable list (spreadsheet? database?) of startups with Black founders. Dubbed The Black Founder List, it’s a great asset and tool.

For folks like myself with a research and reporting focus, the list’s sortability of companies founded by Black entrepreneurs by gender, stage and market focus is amazing. And, for investors, it should provide potential dealflow. Do you write lots of Series C checks? The Black Founder List has 23 Series B startups with Black founders. Or if you prefer Series D checks, there are 11 Series C startups with Black founders to check out.

Who is writing the most checks to Black founders? Among the top names are M25, a midwest VC group, Techstars Boston and a number of angels.

The website was compiled by much the same team that TechCrunch highlighted earlier this year, when their data collection work concerning Black founders was more spreadsheet than app. So, please point your thanks for the new resource to Yonas Beshawred, Sefanit Tades, James Norman and Hans Yadav.

The Black Founder List also has a data submission button, so if you notice a missing name, add it. I want the data set to be as robust as possible, as, I reckon, it will prove a great reporting resource. And public data like this obviates certain excuses from the investing class.

Market Notes

  • I missed a lot this week that I was looking forward to, including the Asana and Palantir IPOs. For fuller thoughts, head here. Summaries follow:
  • Asana’s direct listing and resulting valuation and implied revenue multiples make its direct listing a win for the company, and the model. If other SaaS companies have the ability to raise ample pre-debut cash, perhaps the direct listing is not as dead as it seemed a few months ago when SPACs stole its spotlight, and most companies were pursuing traditional IPOs regardless.
  • Palantir’s direct listing did not feel hot until it dropped some strong revenue guidance. With that, its direct listing went fine despite its cosmically comedic voting structure. Watching Palantir’s higher-ups try to snuff public input while still providing a thin patina of democracy made me think more about Russia or Texas than a functioning democratic system.
  • Looking ahead, Airbnb is said to be hunting up $3 billion for its own IPO. Airbnb had to take on a lot of expensive cash when its business collapsed in the early COVID days. It wanted to direct list. Now it’s going to cash in a huge pile during its debut.
  • Good. More capital > less capital.
  • Sticking to our late-stage theme, when I left, Root was said to be pursuing an IPO, and when I came back, Roblox is now also tipped to be plotting with the public markets. (Root’s IPO in the wake of the successful Lemonade debut made sense. Insurtech is hot.)
  • The news should not be a surprise; Roblox’s model has found cachet with young gamers and has found a great way to make money at the same time. With a mix of Legos and video game design and Minecraft, perhaps it’s not a surprise that the company is doing well.
  • Reuters reports that Roblox could be worth $4 billion when it goes public. I believe it.
  • Datto is going public. Ron and Danny have the details here.
  • And I chatted with a few Accel investors, the juicy bits from which you can find here.

Various and Sundry

  • Draper Esprit, a Europe-focused venture capital fund that trades on the London Stock Exchange, raised £110 million this week. Esprit is a fun shop to track (I’ve known its denizen James since his LSE days), because it’s more transparent than most VC firms than you’re familiar with thanks to its structure.
  • According to the firm’s release, its share sale was “oversubscribed.” has more.
  • Mobile app spend grew to $29.3 billion in Q3, driven by 36.5 billion installs, per SensorTower. Revenue was up 32% year-over-year.
  • Uber sold $500 million worth of Uber Freight to a PE firm.
  • As noted, tech stocks had a bad September, but just how bad might surprise you.
  • And I covered Noyo’s Series A before I left, with the post going up on Monday.
  • In short, Noyo is doing the hard work to build APIs to connect the world of health insurance. It’s a huge, hard task.
  • The $12.5 million was “led by Costanoa Ventures and Spark Capital. Prior investors Core Innovation Capital, Garuda Ventures, the Webb Investment Network, Precursor Ventures and Homebrew upped their investment in the new round.”
  • (I can’t shake the thought that there’s something in the middle of the no-code/low-code boom, and startups delivering more of their products via APIs instead of as managed services. And please don’t say mashups, we left that phrase behind ages ago.)
  • I missed the window for officially commenting on the Coinbase culture dustup — the Equity crew did talk about it while I was AFK — so I will merely share this thread as my $0.02.
  • Also, read this from Eileen Burbidge on TechCrunch concerning the same matter. It’s good.

Regular morning Exchange columns return Monday morning. It’s good to be back.

By the way, TechCrunch Sessions: Mobility is coming up next week. I am going! To help you get there, here’s a 50% off code for you to get full access to the event. Or if it’s your jam, this code will get you into the expo and breakout sessions for free.

Chat soon,


Element acquires Gitter to get more developers on board with the open Matrix messaging protocol

This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Some interesting news for lovers of open, decentralized communications tech: Element, the company behind the eponymous Matrix -based Slack competitor (formerly known as Riot) has acquired developer-focused chat platform, Gitter, from dev services giant GitLab, which picked it up back in 2017.

The acquisition means Gitter’s community of some 1.7M users will be migrating to Matrix, the underlying decentralized comms protocol also made by Element — assuming they stick around for the ride with the new owner, of course. But Element is going out of its way to reassure Gitter users they’ll feel properly at home on Matrix.

In a blog post discussing the acquisition, the top-line message from Element CEO and Matrix co-founder, Matthew Hodgson, is that nothing will change in the short term. Furthermore, the pitch to the Gitter community is that, down the line, there will be plenty to gain from the migration/eventual assimilation as a “Gitter-customized version of Element” running on Matrix.

This is because the pledge is feature parity first (so, yes, that means Element will be gaining a bunch of Gitter features; such as threads and instant live room peeking, to name two). Then, once Gitter migrates to Element, it’ll get access to “all the goodies” the combination brings — including end-to-end encryption; reactions; VoIP and conferencing; widgets; all the alternative clients, bots, bridges and servers; the full open standard Matrix API; and the ability to fully participate in that decentralized network…

Another enticing promise is “constantly improving native iOS & Android clients” — which the Element team notes is a welcome alternative to Gitter’s natives ones, given they’re already being deprecated.

The migration will also mean Element will be replacing the current “creaky” matrix-appservice-gitter bridge.

We’re going to build out native Matrix connectivity — running a dedicated Matrix homeserver on with a new bridge direct into the heart of Gitter; letting all Gitter rooms be available to Matrix directly as (say), and bridging all the historical conversations into Matrix via MSC2716 or similar,” it writes. 

“Gitter users will also be able to talk to other users elsewhere in the open Matrix network — e.g. DMing them, and (possibly) joining arbitrary Matrix rooms. Effectively, Gitter will have become a Matrix client,” Element adds.

So the tl;dr is that current Gitter users should have plenty of reasons to be cheerful about the acquisition. (Plus, as Hodgson points out, anyone less than happy with the direction of travel can of course fork the platform and go their own way, being as Element is an open source company. Though of course the hope is no one will feel the need to fork it.) 

The decision to migrate Gitter to Element has been made purely on resources/efficiency grounds, per Hodgson — to avoid the need for Element to maintain both apps over the longer term. He tells TechCrunch the migration will likely take around a year — “possibly more”.

Element also plans to “comprehensively” document the whole process so that it can serve as “the flagship example of how to make an existing chat system talk – and transition to — Matrix”, as it puts it, so it’s got its eye on encouraging more apps to make the move to Matrix.

While Element says GitLab approached them about taking on Gitter they confess to a long-time “crush” on the platform — saying they jumped at the chance when the other company came knocking. (Financial terms of the transaction are not being disclosed, however.)

TechCrunch can claim a teeny part in this open source love-in, being as we’re credited with accidentally introducing the teams — after they found themselves across the aisle exhibiting at Disrupt London, back in 2014 (so you truly never know who you’ll serendipitously meet in Startup Alley).

Taking on Gitter is not just a passion project for Element, though. They saw they see the acquisition boosting growth of the Matrix ecosystem as a whole other developer community gets plugged in and — they hope — converted to evangelists for the open network.

“If developers are using it then when they need something to build on — a technology for their messaging apps — then they will naturally use Matrix. And if we want to grow this ecosystem and have as many apps as possible built on top of the protocol then we need to make it known to everyone so if they’re using it for their own comms it makes it easier for them,” Element COO, Amandine Le Pape, tells TechCrunch.

“We’re really doing this for Matrix, rather than for Element,” adds Hodgson. “We’re just trying to grow and make the Matrix network larger and healthier. So it’s not a matter of we can then sell it to governments as a communication platform more easily, it’s much more… that it becomes known to more developers so that when they build their next WhatsApp they don’t go and invent the wheel all over again. They would just obviously use Matrix because that’s what they’re already using to co-ordinate on working on React or Angular or whatever technology they already know.”

He says bringing Gitter into the Matrix fold is “obviously” a boon to developers who already use Element — such as the Mozilla community and Rust developers — as it will help reduce fragmentation.

“Half the world is on Gitter, half the world is on Element, and some poor lost souls are stuck in Discord and Slack. So by going and bringing the open guys together it will just be very concretely more useful in Element that if you want to reach out to whatever developer you will be able to find them in once place rather than having this horrible split brain between the two,” he adds.

Asked about its decision to sell Gitter, GitLab told us it has never been a core element of its business focus.

“While GitLab has contributed to Gitter’s growth in the past three years, Gitter has always been a standalone product, independent of GitLab, even after GitLab’s acquisition in 2017. GitLab and Element saw an opportunity for Gitter to grow further under Element,” it said.

GitLab has a core business focus to be the market’s leading complete DevOps platform,” it added. “It is not a case of stepping away but seeing an opportunity for an important tool to grow further. In true open source fashion, Gitter is free to use, without limits, for everyone to create public or private communities and to contribute back to. It is currently the only developer-centric messaging platform which is an open source, free, uncapped messaging SaaS. The platform has not been monetized yet and has no commercial edition. Gitter is available on the web with clients available for Mac, Windows, Linux, iOS, and Android.”

Image credit: GitLab/Gitter

Element said it will be bringing on board Gitter’s dev team as part of the acquisition — albeit, it’s actually just one “superstar” developer running the whole thing, per Hodgson and Le Pape. So the team integration process at least shouldn’t be too challenging. 

(For the record, Element is the new name for New Vector (the company) and Riot (the messaging app) which was originally called Vector. So that’s Vector > Riot > Element; and New Vector > Element. “We decided to bring everything under one single brand — as now Element the company, Element the app and Element Matrix Services for the hosting platform,” explains La Pape on this recent rebranding.)

Momentum for Matrix

Matrix, meanwhile, has been continuing to gain momentum throughout the pandemic — thanks to the accelerated shift to remote working pushing demand for secure (and, well, sovereign) digital messaging up the public sector agenda.

“Recently we’ve had the German education system coming on board, the German military coming on board. And we have two other governments who, irritatingly, we can’t disclose yet — but suffice to say they are both very big and very exciting,” notes Hodgson. “They’re in paid trials. Once we successfully convert those it will be as big, if not bigger, than France in terms of banging on about it.” 

“In all of these instances they have gone and slightly tweaked the app. They have forked Element, they have branded it, they’ve built it into an existing tool that they have and it really ties in with the developer story — the reason that they feel happy building on an open standard is because of the wider developer ecosystem,” he adds.

“We’re also seeing a whole galaxy of little startups — nothing to do with us — who are building on Matrix successfully,” Hodgson also tells us, pointing to a German healthcare startup called Famedly as one example.

“It’s unrelated to us but it’s fun to see other companies basically betting the farm on the protocol. So, again, the happier developers are to use the protocol the more random startups like that will begin to bubble up,” he adds. “And if the next-gen of Slack killers happen to be on Matrix — whether it’s us, or anybody else, so much the better.”

Another key factor that could accelerate momentum for Matrix is interoperability — a topic area regulators are increasingly eyeing as they consider how to ensure competition thrives in digital markets that can be prone to ‘winner takes all’ network effects.

Accusations of anti-competitive behavior are also being thrown around in the real-time messaging space specifically. Notably, in July, Slack filed an antitrust complaint against Microsoft arguing the latter is being anti-competitive by unfairly bundling its rival Teams product with its cloud-based productivity suite, Microsoft 365.

The Matrix network is no such walled garden, of course — and Element the app offers bridges to other messaging platforms, enabling its users to chat with others siloed on proprietary platforms like Slack. Slack, however, hasn’t offered the same courtesy to Element (only going so far as offering a bridge for, er, email users last year).

“It would be great for Slack, and [Microsoft] Teams and Discord to join in,” says Hodgson, arguing: “I think there’s probably more impetus for them to do so in terms of being able to interoperate with other systems, because we have so many bridges. If you were migrating from Skype for Business to Slack or something the Matrix could be the bridge between the two.”

“They have different users, right,” continues Le Pape, fleshing out the case for such platforms to open up to Matrix. “Usually Teams ends up being the one for the big companies who are actually using Office 365 while Slack might be more of the startup side of things so, in the end, if we could actually join everything together it would be good.” “If you all actually were able to talk to one another then that would solve it,” she adds in reference to Slack’s antitrust complaint against Microsoft.

Hodgson posits that if Microsoft were to expose Teams into Matrix it could help it defend against the complaint — being as it would be able to tell regulators it’s “participating in a global open standard network” that lets users pick whichever client they like. “I think that’s a very compelling solution,” he suggests, adding that Element is involved in discussions with “various parties” on the EU side “to make sure people understand there are viable open standards for doing this”. 

“Historically, before Matrix, basically there wasn’t anything that had the feature set that you would expect from Slack or Teams. Whereas now there is actually a viable middle language,” he adds.

Asked if it’s a wild idea that a polished consumer messaging app such as Telegram could ever move to Matrix, Hodgson describes it as an “interesting” thought — but admits there’s still a bit of a feature gap for Element, while also lauding the Telegram’s technical performance.

“I could see there being some friction in joining Matrix as it is today because it would be a slight backwards step for them… However the pressure is therefore on us to go and get to the point that Element is as snappy and as polished as Telegram — and [Element already] has good encryption,” he says. “At which point I think the tables could turn interestingly.

“But they’ve got hundreds of millions of users. I guess they feel they’re doing it right. They would rather, perhaps, become the next WhatsApp and be a 2BN user silo rather than play nice with other people because they’re already past critical mass. But perhaps if we do our job and make Matrix large enough and interesting enough that it is worth their while to link to it then why not?”

Emjoy picks up $3M to get more women tuned into sexual self-care

This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Barcelona-based Emjoy, an audio app for women that sells a narrative of sexual self-care and empowerment, has picked up $3 million in seed funding led by JME Ventures, with existing investor Nauta Capital participating.

The femtech startup believes it has lit on a major opportunity to target women with sex-positive subscription audio content that’s focused on sexual empowerment, intimate education and sensuous entertainment — all wrapped in unapologetically direct digital marketing.

Nor is it alone in seeking to build a brand around such “female first” audio content. (Another startup that springs to mind in this “mindful sex” space is Ferly, for example.) But Emjoy reckons there’s all to play for in this nascent space — which it says is benefitting not only from progress toward female empowerment in recent years but the rise in popularity of podcasting and audiobooks.

“My inspiration for founding Emjoy is based on my personal experience and the experiences of many girlfriends of mine. All of us had normalized not climaxing when having sexual encounters,” Andrea Oliver, CEO and co-founder tells TechCrunch.

“When I began researching this I came across the pleasure gap, with some studies showing that 40% of women have some type of sexual dysfunction. Having been in the VC world and having seen the tremendous success of startups in the mental health and fitness spaces, I was shocked when I could not find an app focusing on sexual wellbeing.”

“What sets us apart from competitors is offering a broad library of both wellbeing and entertainment audios, being extremely trustworthy and reliable because of our in-house sex therapist, partnering with sexual wellbeing experts, and finally being a product company that offers more than just content,” she goes on, discussing the competitive landscape. “An example of this is our ‘Daily Routines’ feature, which allows our users to take 30-day challenges to create new habits, such as accepting their bodies.”

Oliver moved from Nauta Capital, where she’d been working with startups, to founding her own business in January 2019, along with co-founder Daniel Tamas, CTO — taking in an initial €1 million from her former VC employer to get the app to market.

Emjoy launched worldwide in early 2020 and went on to clock up 80,000 registered users in its first six months. It now has 150,000 active users globally, with the U.S. and the U.K. its main markets (NB: content is currently only available in English).

Almost 10% of “recently acquired” active users are paying a subscription, per Oliver.

“The women who use Emjoy are typically in their 20s, and while most are cisgender we have also received tons of positive feedback from trans and non-binary folk. Really, Emjoy is about getting to know what you like and enjoying yourself, regardless of the gender of your partner(s),” she says.

“We are building a wellbeing brand for women because we see that sexual wellbeing is a major part of overall wellbeing. We want to normalize this,” Oliver adds, noting that Emjoy’s “wellbeing positioning” includes “entertainment content with our erotic stories”.

The startup’s team has grown to 11 people at this point — including an in-house sex therapist. Most of Emjoy’s content is produced in house at this point.

Discussing its approach to content, which the app touts as “backed by science and supervised by our in-house intimacy therapist”, Oliver says: “For each theory or guided session we try to find a scientific study to back what we say, and we work with our in-house sex therapist who creates most of the content and supervises it. We also partner with external collaborators who are experts in different fields such as sexual trauma, body acceptance, relationships etc.”

“It is important to offer science-based content because most of the sexual content that is available today, in blogs or on YouTube, for example, is very untrustworthy. We want to be a trusted and safe environment for our users,” she adds.

The new seed funding will be ploughed into making more content — with plans for additional collaborations with “leading academics, experts and influencers within the sexual wellbeing and education space” — and the overarching aim of building the “category-defining” app in the female sexual wellness space.

Asked why he’s excited about women’s sexual wellbeing audio as a category, investor Samuel Gil, partner at JME Ventures, told us the space is interesting because it’s been so overlooked.

“It has been ignored or forgotten for a very long time, but that’s now changing with women being more empowered than ever,” he said, adding: “Women with sexual wellbeing issues might be reluctant to search for help in a more traditional way due to shame or friction. A digital product is ideal to broaden access to sexual wellbeing solutions.”

He also lauded the “really immersive experiences” possible with audio content, which he said “facilitates content production”. (Or, well, it’s a lot easier to get erotic sounds past “family-friendly” App Store review rules than hardcore visuals.)

On investing in Emjoy specifically, Gil added: “It is a nascent category with no clear leaders yet. Emjoy’s vision, ambition and, above all, execution, so far makes us believe that they are really well-positioned to take the leading position very soon.”

Asked what she believes this new rush of female-pleasure-focused audio startups are tapping into, Oliver says: “It is very much an underserved need. We go hand-in-hand with our users to help them discover their bodies, gain confidence, and explore what turns them on, among many other things. We and our users see Emjoy as a journey, with our audio content helping users explore what they like and who they are.

“We are not telling users what they should do, or how they should feel because there is no normal, there’s no ‘should’ or ‘shouldn’t’. Each personal experience and body is unique and Emjoy adapts to each user’s unique journey.”

“Our users are also generating new habits with Emjoy and we are becoming an everyday tool for women who want to feel more confident or want a safe, female pleasure-centric and trusted place to get in the mood, as opposed to mainstream porn,” she adds.

Multis is a business bank account for cryptocurrencies

This post is by Romain Dillet from Fundings & Exits – TechCrunch

Meet Multis, a French startup that is building business bank accounts, except that it lets you store, send and receive cryptocurrencies. The startup just raised a $2.2 million seed round.

Investors in today’s funding round include White Star Capital, Y Combinator, Coinbase Ventures, eFounders, Greenfield One and Digital Currency Group.

“It’s very complicated to manage crypto as a company. As soon as you want to hold crypto or start paying employees and contractors, it’s a giant mess,” co-founder and CEO Thibaut Sahaghian told me.

If you’re familiar with startups working on business banking, such as Qonto, you already know what to expect from Multis. It’s a software-as-a-servie product designed for teams.

Image Credits: Multis

After creating a Multis account, you can add other team members and set permissions and limits. Behind the scene, Multis is a multisignature Ethereum wallet. The company doesn’t control the keys, which means Multis can’t access your funds.

“From a regulatory point of view, it’s been very useful because we don’t hold assets and we can’t review and block transactions,” Sahaghian said.

Thanks to the multisignature design, you can create an approval workflow so that each transaction needs to be approved by a certain number of people on the team.

Multis supports Ethereum-based ERC20 tokens, which means you can also use stablecoins, such as USDC and DAI. This way, you’re not exposed to cryptocurrency volatility when you choose to keep all your assets in USDC for instance. You can swap tokens from Multis directly.

Once you have assets in your Multis account, you can issue payments to employees, contractors, partners, suppliers, etc. You can save addresses and other relevant information to streamline payments in the future.

Centralizing all your crypto transactions on Multi can be useful when you need to file your taxes. You can export all your transactions and hand them over to your accountant.

And if you have too many assets on your hands, you can invest some assets and earn interests thanks to DeFi products. The company uses Compound for that feature.

Right now, Multis clients are mostly companies working on blockchain products, generating revenue in cryptocurrencies or paying people using stablecoins. But the company wants to simplify its product by adding EUR and USD accounts with cards and IBANs.

Multis could act as a bridge between fiat currencies and cryptocurrencies. Companies with offices in multiple countries could use it to save money on intercompany fees. The startup is still working on those new features, but it could lead to some interesting use cases.

Exotec raises $90 million for its warehouse robots

This post is by Romain Dillet from Fundings & Exits – TechCrunch

French startup Exotec has raised a $90 million Series C round led by 83North, with existing investors Iris Capital and Breega also participating. Other existing investors include 360 Capital. The company has been working on semi-automated warehouses for e-commerce clients.

The system is based on tiny robots called Skypods. They roam the floor and go up and down racks to pick up standardized bins of products.

The company also provides logistics software to coordinate all those robots through the warehouse. As you scale, you can add more robots and more racks without any downtime.

It’s not going to replace humans altogether as you still have to pick up goods from the bin and pack stuff. But human operators can stay at a workstation while robots take care of all the roaming.

You can use a workstation to pick up goods but also to replenish bins. The idea is that you never have to enter the Exotec area. It’s a robot-only zone.

In addition to productivity gains, you can also increase your storage capacity by switching to Exotec thanks to tall racks and narrow aisles.

The company now has teams in Atlanta and Tokyo — it plans to produce 4,000 robots per year by 2021. Everything is manufactured in Lille, France in a 6,000 square-meter plant. The company currently has fourteen running systems around the world. Clients include Carrefour, Leclerc, Cdiscount and Fast Retailing (Uniqlo).

Exotec has previously raised $17.7 million in 2018 and $3.8 million (€3.3 million) in 2016.

Image Credits: Exotec

Snyk acquires DeepCode to boost its code review smarts

This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Switzerland-based machine learning code review startup DeepCode — which bills itself as ‘Grammarly for coders’ — has been acquired by Snyk, a post-unicorn valuation cybersecurity startup which is focused on helping developers secure their code.

Financial terms of the deal have not been disclosed. But the ‘big code’ parsing startup had only raised around $5.2M since being founded back in 2016, per CrunchBase — mostly recently closing a $4M seed round from investors including Earlybird, 3VC and btov Partners last year.

DeepCode CEO and co-founder Boris Paskalev confirmed the whole team is “eagerly” joining Snyk to continue what he couched as “the mission of making semantic AI-driven code analysis available for every developer on the planet”.

“DeepCode as a company will continue to exist (fully owned by Snyk), we will keep and plan to grow the Zurich office and tap into the amazing talent pool here and we will continue supporting and expanding the cutting-edge product offering for the global development community,” Paskalev told TechCrunch.

Asked whether DeepCode’s product will continue to exist as a standalone in the future or whether full assimilation into Snyk’s platform will include closing down the code-review bot it currently offers developers he said no decision has yet been taken.

“We are still to evaluate that in details but the main goal is to maintain/expand the benefits that we offer to all developers and specifically to grow the open-source adoption and engagement,” he said, adding: “Initially clearly nothing will change and the DeepCode product will remain as a standalone product.”

“Both companies have a very clear vision and passion for developer-first and helping developers and security teams to further reduce risk and become more productive,” Paskalev added.

In a statement announcing the acquisition Snyk said it will be integrating DeepCode’s technology into its Cloud Native Application Security platform — going on to tout the benefits of bolting on its AI engine which it said would enable developers to “more quickly identify vulnerabilities”.

“DeepCode’s AI engine will help Snyk both increase speed and ensure a new level of accuracy in finding and fixing vulnerabilities, while constantly learning from the Snyk vulnerability database to become smarter,” wrote CEO Peter McKay. “It will enable an even faster integration for developers, testing for issues while they develop rather than as an additional step. And it will further increase the accuracy of our results, almost eliminating the need to waste time chasing down false positives.”

Among the features that have impressed Snyk about DeepCode, McKay lauded code scanning that’s “10-50x faster than alternatives”; and what he described as an “exceptional developer UX” — which allows for “high precision semantic code analysis in real-time” because scanning is carried out at the IDE and git level.

In its own blog post about the acquisition of the ETH Zurich spin-off, the university writes that the AI startup’s “decisive advantage” is that ‘it has developed the first AI system that can learn from billions of program codes quickly, enabling AI-​based detection of security and reliability code issues”.

“DeepCode is an excellent example of a modern AI system that can learn from data, program codes in this case, yet remain transparent and interpretable for humans,” it adds.

The university research work underpinning DeepCode dates back to 2013 — when its co-founders were figuring out how to combine data-​driven machine learning methods with semantic static code analysis methods based on symbolic reasoning, per the blog post.

DeepCode’s tech currently reaches more than 4M contributing developers, with more than 100,000 repositories subscribed to its service.

Kard raises another $3.5 million for its challenger bank for teens

This post is by Romain Dillet from Fundings & Exits – TechCrunch

French startup Kard has added $3.5 million (€3 million) to its seed round. The company already raised the same amount last year, which means that Kard has raised $7 million (€6 million) in total for its seed round.

Founders Future is leading the round, with Laurence Krieger, Michael Vaughan, Jon Oringer and Iris Mittenaere also participating.

Kard is building a challenger bank specifically designed for teenagers. When you create an account, you receive your own IBAN and a Mastercard debit card. You can block and unblock the card, you receive instant transaction notifications and you can send and receive money with other Kard users.

For the past year, the service has been completely free and 50,000 teenagers signed up. Starting today, Kard is switching to paid subscriptions for new users. Each family has to pay €4.99 per month or €49.90 per year to create a family account. After that, you can create as many accounts as you want — if you have two, three or four children, it still costs €4.99 per month.

With today’s change, Kard is also adding some additional features. Parents can download the Kard app and manage allowances from the app. You can schedule weekly or monthly transfers, block your child’s card and send money instantly by pairing a card with the app.

As for teenagers, Kard users now get a virtual card for online payments. As a Kard user, your smartphone is insured against screen damage (up to €100). There are now three different card designs as well — black, silver or pink.

The startup says that Apple Pay and Google Pay are on the roadmap, as well as money pots. There will be some personalized discounts in the app as well, which could open up a new revenue stream.

Kard competes with PixPay, Xaalys, Vybe, but also Revolut Junior, Lydia and services from traditional banks. Let’s see how the new pricing strategy affects Kard’s growth going forward.

TransferWise reports accelerating revenue growth to 70% in its March, 2020 fiscal year

This post is curated by Keith Teare. It was written by Alex Wilhelm. The original is [linked here]

TransferWise, a European fintech unicorn, announced the financial results of its fiscal year ending March, 2020.

The company posted strong growth, continued profit and new customer records. TransferWise was most recently valued at $5 billion during a secondary sale worth $319 million in July of this year.

On the results front, we can compare the company’s March 2020 year to its March 2019 year, the results of which we also have available. Here are the nuts and bolts, picking from the provided metrics to share the most material:

  • TransferWise fiscal 2020 revenue: £302.6 million, up 70% from its fiscal 2019 result of £179 million. That’s a venture-level revenue result from a mature company that is self-powering.
  • TransferWise grew more quickly in its March 2020 year than in its March 2019 year, when it managed a slower 53% growth rate per the company. Accelerating revenue growth at this scale is very valuable.
  • TransferWise managed a fourth year of consecutive profitability, generating £21.3 million in “net profit after tax” for the March 2020 fiscal year. The company first started generating profit “since 2017” per its own release, which we presume means the year ending March 2017.
  • The company reported that it now has 8 million worldwide customers, up from 6 million in the preceding fiscal year. That’s 33% growth.
  • The pace at which business customers sign up for TransferWise appeared to include slower growth, moving from 10,000 per month in the March 2019 year to “over 10,000” in its most recent release.
  • TransferWise processed £42 billion in “cross currency transfers,” or around 63% of its total processing volume of £67 billion.

Instead of merely shouting at this point that TransferWise should go public, as it is providing granular data on its performance we’re already somewhat sated. More notes on gross margins would be good, for example, but this level of transparency is still welcome.

Turning to future growth, TransferWise stated in a release that APAC is the company’s “fastest growing region.” Its U.S. business was worth around a fourth of its March 2020 year’s revenue. Europe was just over half for the same period.

The company’s ability to pay for its own growth means that it has not raised money for some time. Indeed, the last equity round that we have on the company is its November, 2017 investment. That capital was $280 million raised at a $1.3 billion pre-money valuation in a deal led by Merian Global Investors and IVP. Since then the company has sold secondary shares from time to time.

That should lessen internal demands for a traditional liquidity event, but not quash them altogether. The unavoidable question is why not go public when the firm already reports so much public performance data. On the other hand, when a company needs no capital, it need not accept advice, either.

Regardless, TransferWise shows that fintech can make money after all.

TransferWise reports accelerating revenue growth to 70% in its March, 2020 fiscal year

This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

TransferWise, a European fintech unicorn, announced the financial results of its fiscal year ending March, 2020.

The company posted strong growth, continued profit and new customer records. TransferWise was most recently valued at $5 billion during a secondary sale worth $319 million in July of this year.

On the results front, we can compare the company’s March 2020 year to its March 2019 year, the results of which we also have available. Here are the nuts and bolts, picking from the provided metrics to share the most material:

  • TransferWise fiscal 2020 revenue: £302.6 million, up 70% from its fiscal 2019 result of £179 million. That’s a venture-level revenue result from a mature company that is self-powering.
  • TransferWise grew more quickly in its March 2020 year than in its March 2019 year, when it managed a slower 53% growth rate per the company. Accelerating revenue growth at this scale is very valuable.
  • TransferWise managed a fourth year of consecutive profitability, generating £21.3 million in “net profit after tax” for the March 2020 fiscal year. The company first started generating profit “since 2017” per its own release, which we presume means the year ending March 2017.
  • The company reported that it now has 8 million worldwide customers, up from 6 million in the preceding fiscal year. That’s 33% growth.
  • The pace at which business customers sign up for TransferWise appeared to include slower growth, moving from 10,000 per month in the March 2019 year to “over 10,000” in its most recent release.
  • TransferWise processed £42 billion in “cross currency transfers,” or around 63% of its total processing volume of £67 billion.

Instead of merely shouting at this point that TransferWise should go public, as it is providing granular data on its performance we’re already somewhat sated. More notes on gross margins would be good, for example, but this level of transparency is still welcome.

Turning to future growth, TransferWise stated in a release that APAC is the company’s “fastest growing region.” Its U.S. business was worth around a fourth of its March 2020 year’s revenue. Europe was just over half for the same period.

The company’s ability to pay for its own growth means that it has not raised money for some time. Indeed, the last equity round that we have on the company is its November, 2017 investment. That capital was $280 million raised at a $1.3 billion pre-money valuation in a deal led by Merian Global Investors and IVP. Since then the company has sold secondary shares from time to time.

That should lessen internal demands for a traditional liquidity event, but not quash them altogether. The unavoidable question is why not go public when the firm already reports so much public performance data. On the other hand, when a company needs no capital, it need not accept advice, either.

Regardless, TransferWise shows that fintech can make money after all.

Klarna raises $650 million at a $10.6 billion valuation

This post is by Romain Dillet from Fundings & Exits – TechCrunch

Fintech startup Klarna has raised a mega-round of funding led by Silver Lake. The company is raising $650 million at a post-money valuation of $10.65 billion. Klarna says it is now the highest-valued private fintech company in Europe following today’s funding round.

In addition to Silver Lake, GIC (Singapore’s sovereign wealth fund) and funds and accounts managed by BlackRock and HMI Capital are also participating in today’s funding round. Merian Chrysalis, TCV, Northzone and Bonnier have bought out existing shareholders.

Klarna’s main product is an alternative payment method on e-commerce platforms. It lets you buy now and pay later over three or four installments with 0% interest. It has been quite popular in different European markets as many customers don’t have credit cards and/or don’t want to pay the fees involved with revolving credit lines.

Merchants get paid when the initial transaction occurs with Klarna transparently managing credit lines for customers. In addition to transaction fees, the company also generates revenue from late fees.

More recently, the company expanded to the U.S. where it now has 9 million customers out of 90 million customers in total. It mainly competes with Affirm in the U.S. Klarna has also been expanding its offering by targeting consumers directly — not just e-commerce companies.

You can now download the Klarna app to see all your Klarna payments, access a marketplace of stores, track deliveries and set up price-drop notifications. Using the app, you can also create virtual cards to pay with Klarna on unsupported stores, such as Amazon. It’s not as straightforward as clicking Klarna when you check out, but it works. The app has 12 million monthly active users and 55,000 daily downloads.

The company launched a rewards program this summer called Vibe. It is only available in the U.S. for now. It lets you earn points for every dollar you spend using Klarna as your payment method. You can exchange points for gift cards at H&M, Amazon, Walmart, Uber, etc.

Klarna is now working with 200,000 retail partners, such as Sephora, Groupon and Ralph Lauren. During the first half of 2020, the company reported $466 million in revenue and $59.8 million in losses.

Bank-as-a-service startup Swan helps other companies issue cards, accounts and IBANs

This post is by Romain Dillet from Fundings & Exits – TechCrunch

Meet Swan, a new French startup that wants to let other companies offer financial services by issuing cards, bank accounts and IBANs with just a few lines of codes. The company could be considered as a bank-as-a-service platform, like Treezor or solarisBank.

Originally founded by startup studio eFounders, the startup just raised a $5.9M million (€5 million) seed round led by Creandum with Bpifrance’s Digital Venture fund also participating.

Swan has obtained an e-money license from the French regulator, which lets them operate payment services and hold user funds. Unlike a bank, it can’t issue credit lines. The company also handles risk, which means that it handles KYC processes (“know your customer”). Essentially, if you’re working with Swan, they take care of all the risky aspects of managing money.

Compared to other bank-as-a-service companies, Swan doesn’t necessarily want to power neobanks and help them get started. The startup thinks a ton of companies touch on financial services but can’t offer those services because it’s such a big investment.

For instance, you can imagine an invoicing product that generates IBANs for you so that it automatically matches incoming transactions to the right invoice (like Upflow). On-demand companies could issue cards to their delivery employees partners so that they can pay for groceries and food directly using a Swan-powered card. Marketplace companies could handle pay-ins and pay-outs at a more granular level with each client managing their own e-money wallet.

This vision is part of a bigger trend called embedded finance. By expanding your product to control a bigger stack of the experience, you can provide new products and services and make your customers stick around for a long time.

As a Swan customer, you can customize the branding with your own logo and colors. When you issue cards, you can choose between a physical Mastercard card or a virtual one. They work with Apple Pay and Google Pay. You pay €900 per month and a flat monthly fee for each account and card that you issue.

Swan is taking a developer-oriented approach. The company says it can take several months to integrate a banking-as-a-service product into your own product. With an API-driven approach, Swan wants to make it as easy as integrating Stripe on your e-commerce website.

Sentinel loads up with $1.35M in the deepfake detection arms race

This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Estonia-based Sentinel, which is developing a detection platform for identifying synthesized media (aka deepfakes), has closed a $1.35 million seed round from some seasoned angle investors — including Jaan Tallinn (Skype), Taavet Hinrikus (Transferwise), Ragnar Sass & Martin Henk (Pipedrive) — and Baltics early stage VC firm, United Angels VC.

The challenge of building tools to detect deepfakes has been likened to an arms race — most recently by tech giant Microsoft, which earlier this month launched a detector tool in the hopes of helping pick up disinformation aimed at November’s US election. “The fact that [deepfakes are] generated by AI that can continue to learn makes it inevitable that they will beat conventional detection technology,” it warned, before suggesting there’s still short term value in trying to debunk malicious fakes with “advanced detection technologies”.

Sentinel co-founder and CEO, Johannes Tammekänd, agrees on the arms race point — which is why its approach to this ‘goal-post-shifting’ problem entails offering multiple layers of defence, following a cyber security-style template. He says rival tools — mentioning Microsoft’s detector and another rival, Deeptrace, aka Sensity — are, by contrast, only relying on “one fancy neural network that tries to detect defects”, as he puts it.

“Our approach is we think it’s impossible to detect all deepfakes with only one detection method,” he tells TechCrunch. “We have multiple layers of defence that if one layer gets breached then there’s a high probability that the adversary will get detected in the next layer.”

Tammekänd says Sentinel’s platform offers four layers of deepfake defence at this stage: An initial layer based on hashing known examples of in-the-wild deepfakes to check against (and which he says is scalable to “social media platform” level); a second layer comprised of a machine learning model that parses metadata for manipulation; a third that checks for audio changes, looking for synthesized voices etc; and lastly a technology that analyzes faces “frame by frame” to look for signs of visual manipulation.  

“We take input from all of those detection layers and then we finalize the output together [as an overall score] to have the highest degree of certainty,” he says.

“We already reached the point where somebody can’t say with 100% certainty if a video is a deepfake or not. Unless the video is somehow ‘cryptographically’ verifiable… or unless somebody has the original video from multiple angles and so forth,” he adds.

Tammekänd also emphasizes the importance of data in the deepfake arms race — over and above any specific technique. Sentinel’s boast on this front is that it’s amassed the “largest” database of in-the-wild deepfakes to train its algorithms on.

It has an in-house verification team working on data acquisition by applying its own detection system to suspect media, with three human verification specialists who “all have to agree” in order for it to verify the most sophisticated organic deepfakes. 

“Every day we’re downloading deepfakes from all the major social platforms — YouTube, Facebook, Instagram, TikTok, then there’s Asian ones, Russian ones, also porn sites as well,” he says.

“If you train a deepfake model based on let’s say Facebook data-sets then it doesn’t really generalize — it can detect deepfakes like itself but it doesn’t generalize well with deepfakes in the wild. So that’s why the detection is really 80% the data engine.”

Not that Sentinel can always be sure. Tammekänd gives the example of a short video clip released by Chinese state media of a poet who it was thought has been killed by the military — in which he appeared to say he was alive and well and told people not to worry. 

“Although our algorithms show that, with a very high degree of certainty, it is not manipulated — and most likely the person was just brainwashed — we can’t say with 100% certainty that the video is not a deepfake,” he says.  

Sentinel’s founders, who are ex NATO, Monese and the UK Royal Navy, actually started working on a very different startup idea back in 2018 — called Sidekik — building a Black Mirror-esque tech which ingested comms data to create a ‘digital clone’ of a person in the form of a tonally similar chatbot (or audiobot).

The idea was that people could use this virtual double to hand off basic admin-style tasks. But Tammekänd says they became concerned about the potential for misuse — hence pivoting to deepfake detection.

They’re targeting their technology at governments, international media outlets and defence agencies — with early clients, after the launch of their subscription service in Q2 this year, including the European Union External Action Service and the Estonian Government.

Their stated aim is to help to protect democracies from disinformation campaigns and other malicious information ops. So that means they’re being very careful about who gets access to their tech. “We have a very heavy vetting process,” he notes. “For example we work only with NATO allies.”

“We have had requests from Saudi Arabia and China but obviously that is a no-go from our side,” Tammekänd adds.

A recent study the startup conducted suggests exponential growth of deepfakes in the wild (i.e. found anywhere online) — with more than 145,000 examples identified so far in 2020, indicating a ninefold year-on-year growth. 

Tools to create deepfakes are certainly getting more accessible. And while plenty are, at face value, designed to offer harmless fun/entertainment — such as the likes of selfie-shifting app Reface — it’s clear that without thoughtful controls (including deepfake detection systems) the synthesized content they enable could be misappropriated to manipulate unsuspecting viewers.

Scaling up deepfake detection technology to the level of media swapping going on on social media platforms today is one major challenge Tammekänd mentions. 

“Facebook or Google could scale up [their own deepfake detection] but it would cost so much today that they would have to put in a lot of resources and their revenue would obviously fall drastically — so it’s fundamentally a triple standard; what are the business incentives?” he suggests.

There is also the risk posed by very sophisticated, very well funded adversaries — creating what he describes as “deepfake zero day” targeted attacks (perhaps state actors, presumably pursuing a very high value target).

“Fundamentally it is the same thing in cyber security,” he says. “Basically you can mitigate [the vast majority] of the deepfakes if the business incentives are right. You can do that. But there will always be those deepfakes which can be developed as zero days by sophisticated adversaries. And nobody today has a very good method or let’s say approach of how to detect those.

“The only known method is the layered defence — and hope that one of those defence layers will pick it up.”

Sentinel co-founders, Kaspar Peterson (left) & Johannes Tammekänd (right). Photo Credit: Sentinel

It’s certainly getting cheaper and easier for any Internet user to make and distribute plausible fakes. And as the risks posed by deepfakes rise up political and corporate agendas — the European Union is readying a Democracy Action Plan to respond to disinformation threats, for example — Sentinel is positioning itself to sell not only deekfake detection but bespoke consultancy services, powered by learnings extracted from its deepfake data-set. 

“We have a whole product — meaning we just don’t offer a ‘black box’ but also provide prediction explainability, training data statistics in order to mitigate bias, matching against already known deepfakes and threat modelling for our clients through consulting,” the startup tells us. “Those key factors have made us the choice of clients so far.”

Asked what he sees as the biggest risks that deepfakes pose to Western society, Tammekänd says, in the short term, the major worry is election interference. 

“One probability is that during the election — or a day or two days before — imagine Joe Biden saying ‘I have a cancer, don’t vote for me’. That video goes viral,” he suggests, sketching one near term risk. 

“The technology’s already there,” he adds noting that he had a recent call with a data scientist from one of the consumer deepfake apps who told him they’d been contacted by different security organizations concerned about just such a risk.

“From a technical perspective it could definitely be pulled off… and once it goes viral for people seeing is believing,” he adds. “If you look at the ‘cheap fakes’ that have already had a massive impact, a deepfake doesn’t have to be perfect, actually, it just has to be believable in a good context — so there’s a large number of voters who can fall for that.”

Longer term, he argues the risk is really massive: People could lose trust in digital media, period. 

“It’s not only about videos, it can be images, it can be voice. And actually we’re already seeing the convergence of them,” he says. “So what you can actually simulate are full events… that I could watch on social media and all the different channels.

“So we will only trust digital media that is verified, basically — that has some method of verification behind that.”

Another even more dystopian AI -warped future is that people will no longer care what’s real or not online — they’ll just believe whatever manipulated media panders to their existing prejudices. (And given how many people have fallen down bizarre conspiracy rabbit holes seeded by a few textual suggestions posted online, that seems all too possible.)

“Eventually people don’t care. Which is a very risky premise,” he suggests. “There’s a lot of talk about where are the ‘nuclear bombs’ of deepfakes? Let’s say it’s just a matter of time when a deepfake of a politician comes out that will do massive damage but… I don’t think that’s the biggest systematic risk here.

“The biggest systematic risk is, if you look from the perspective of history, what has happened is information production has become cheaper and easier and sharing has become quicker. So everything from Gutenberg’s printing press, TV, radio, social media, Internet. What’s happening now is the information that we consume on the Internet doesn’t have to be produced by another human — and thanks to algorithms you can on a binary time-scale do it on a mass scale and in a hyper-personalized way. So that’s the biggest systematic risk. We will not fundamentally understand what is reality anymore online. What is human and what is not human.”

The potential consequences of such a scenario are myriad — from social division on steroids; so even more confusion and chaos engendering rising anarchy and violent individualism to, perhaps, a mass switching off, if large swathes of the mainstream simply decide to stop listening to the Internet because so much online contents is nonsense.

From there things could even go full circle — back to people “reading more trusted sources again”, as Tammekänd suggests. But with so much at shapeshifting stake, one thing looks like a safe bet: Smart, data-driven tools that help people navigate an ever more chameleonic and questionable media landscape will be in demand. 

TechCrunch’s Steve O’Hear contributed to this report 

Willo, a freemium video interview SaaS, scores ~$320k during the remote work boom

This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Glasgow, Scotland-based video interview startup Willo has scored a £250,000 (~$320k) seed round of funding after watching demand for its asynchronous Q&A style video platform leap up during the COVID-19 lockdown.

Guernsey-based VC firm 1818 Venture Capital is investing in the seed round, with Willo board members Steve Perry, Stefan Ciecierski and Peter Preston also kicking in a smaller chunk of the capital.

The 2018-founded startup says usage of its SaaS platform has grown at least 80% each month since April, after the UK went into a nationwide lockdown to slow the spread of the novel coronavirus.

Customers have also been finding new uses for the product beyond video interviews — such as for reviews, training, and learning and development — as remote working has been supercharged by the pandemic.

“We have over 1,000 users in 60+ countries — growing 2x faster this month than previous months!” says CEO and founder, Euan Cameron. “Core industries are recruitment, customer research, learning and development and non-profits for volunteers etc.”

The seed funding will be put towards accelerating Willo’s international growth — with a recruitment drive that will add 24 members of staff planned, in addition to spending on further product development.

Cameron confirms it’s working on adding real-time video to the platform, when we ask — so it’s gunning to go after a slice of Zoom (et al)’s lunch.

“Our core product offering is simple, affordable async video communication. However, we are currently in development of a realtime (Live) interviewing option so that organisations can seamlessly flip from an asynchronous video into a realtime one,” he says.

Currently Willo offers an interface that let employers pose questions for candidates/staff to respond to by recording a video response. The platform stores all videos in a dashboard for easy reviewing and sharing.

For the recruitment use-case it also offers a question bank — letting employers choose from “hundreds” of pre-written questions to shave a little friction off the recruitment process.

Expanding on some of the additional uses customers have been finding for the platform during the pandemic, Cameron tells TechCrunch: “We have an education charity in the UK (Worktree) who use Willo to ask people in successful careers around the world about their job and their career path. Worktree then provides these videos to kids in schools to help them make career choices.

“A business in Europe uses Willo to identify niche influencers who have potential and bring them on board a training and development program.”

Another example he gives is a university in India that’s using it to find and enrol software engineers for a degree course. Businesses are also using it to obtain customer testimonials and for customer research. And of course Willo’s own VC investor is a user — having adopted the platform for all new business pitches.

“Every new business must go through Willo as part of what they have branded their ‘Ten Minute Pitch’. They connect Willo to Calendy to automate this workflow which is cool,” he notes, adding: “What is most interesting is that all of these examples previously used to rely on face-to-face meetings or video calls, but they had to adapt.”

Willo is also putting a tentative toe into the waters of artificial intelligence for the hiring use-case, although he says its roadmap has shifted to focus more on chasing growth as a result of the pandemic lockdown effect.

Its website trails an “AI-powered” beta feature that’s doing keyword analysis with the aim of identifying personality and behavioral traits, based on how candidates speak.

Asked about this, Cameron says: “Currently, our AI which is in beta is purely focused on the transcription of the audio, we are working hard on not only transcribing accurately but also creating keyword trends. For example, if you are an analytical person we can identify that and call it out to the organisation by looking at common words and themes within your interview.”

“This is very much in its infancy as COVID-19 has pushed us to focus on delivering what we already do at scale and for the many additional use cases [mentioned previously],” he adds.

Applying algorithms to automate elements of the hiring process is something a growing number of startups have been dabbling in in recent years. Although there can be legal risks around bias/discrimination when applying such tools — given the varied and often complex patchworks of applicable laws in different jurisdictions. (In the UK, for example, equality, employment and data protection law may all need to be considered.)

Asked how Willo is avoiding the risk of AI-powered keyword analysis leading to unfair/unequal effects for interview candidates, Cameron says: “Regarding UK equality law we have been working with organisations on a 1-to-1 basis around training and development of their own staff to ensure that they are using Willo as a tool for good. We believe that the same bias and discrimination would occur in a face-to-face or live video interview so it is a case of eradicating that from the individuals through training. We partner with an HR consultancy to help deliver this training when requested.”

“We are working with an incredibly experienced data and compliance expert to ensure we introduce AI effectively, legally and to the benefit of both interviewer and interviewee,” he adds.

“Our core values are always to be transparent and ensure that we are adding value for all users. One of the challenges with AI at Willo is to ensure that we continue to enhance the human interactions at scale — the number one piece of feedback we receive from users is that they loved seeing and hearing from people — so we never want to automate that out of the product.”

On the competitive front, Cameron lists Sparkhire, Vidcruiter and Recright as “key” competitors though he notes that Willo, which offers a freemium tier, is positioning itself to be accessible for a wider range of users.

“They all focus primarily on recruitment and are prohibitively expensive for most SMEs and start-ups. I believe that video interviewing should benefit everyone, not just large multinationals,” he adds.

ThoughtRiver nabs $10M to speed up deal-making with AI contract review

This post is by Natasha Lomas from Fundings & Exits – TechCrunch

ThoughtRiver, a London-based legaltech startup that’s applying AI to speed up contract pre-screening, has announced a $10 million Series A round of funding led by Octopus Ventures. Existing seed investors Crane, Local Globe, Entrée Capital, Syndicate Room, and angel investor Duncan Painter also participated in the round.

The UK startup is one of a number applying AI to automate work that would otherwise be done by legal professions with the aim of boosting operational efficiency. Other startups playing in the space include the likes of Kira Systems, LawGeex and Luminance to name a few.

ThoughtRiver argues it has a different focus vs the majority of contract view companies because it’s focusing on pre-signature contracts — with the aim of making securing a deal faster. “Almost all others are just employed to pull data from existing contracts. ThoughtRiver is as much in demand by Sales teams as it is by Legal,” a spokesman told us.

The Series A investment comes after twelve month’s of what it’s billed as significant growth for the 2015-founded startup, which says its automated contract review software is now being used by the likes of G4S, Singtel and DB Schenker. It launched a service at the end of 2017 and now has more than 25 customers around the world, per the spokesman.

It also trumpets inking a strategic partnership with professional services firm PwC — which will see the latter developing a service for its clients powered by ThoughtRiver’s software, according to a press release.

ThoughtRiver touts up to 95% in time and 80% in cost savings vs an initial contract review that’s carried out by in-house lawyers. And ‘faster contract reviews sum to increased deal flow velocity’ is its overarching claim.

On the tech side, ThoughtRiver has created an ontology of contract legal logic, couched as a series of detailed questions which, combined with its natural language processing (NLP) engine, enables its software to pre-screen contracts by generating a risk assessment. It will also suggest tweaks to the legalese to remediate problems, including via a plug-in for Microsoft Word, where customers’ in-house lawyers may prefer to work.

Other benefits the startup touts are data extraction to power contract analytics at scale — such as for due diligence or to assess the impact of regulatory change. Its sale pitch also suggests that easy access to an overview of contractual positions helps customers by enabling better-informed business relationships.

Image credit: ThoughtRiver

ThoughtRiver has already established offices in New York, Singapore, London, Cambridge and Auckland. It says the new funding will be put towards further growth in the US market, where it will be dialling up sales and marketing efforts. Expanding integrations with major tech partners is also on the cards.

Commenting on the funding in a statement, Akriti Dokania, early stage investor at Octopus Ventures, said: “While the legal sector has been slow to adopt AI compared to other industries, ThoughtRiver has a proven business model based on solving a fundamental issue for lawyers. By using an advanced Natural Language Processing engine to drive faster contract reviews and acceleration of deal flow and business growth, legal professionals can work more efficiently than ever. We are thrilled to support the ThoughtRiver team with its plans for global expansion as the firm disrupts an established market and set of processes.”