Building a fintech giant is very expensive


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

Venture capitalists and other investors have poured capital into fintech startups around the world in recent years, including a record number of rounds worth $100 million or more in the second quarter of 2020. In Q2 2020 venture-backed fintech startups raised 28 nine-figure rounds, underscoring the scale of the bet investors are making on fintech’s long-term success.


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Inside that fintech wave are various hubs of activity, including payments tech, investing and banking. That last category has helped give rise to so-called neobanks, startup banking entities that offer mobile-first, consumer-friendly banking tools and services. Given the old-fashioned nature of banking in many countries (and how far out of reach banking remains for many) neobanks have seen strong uptake by users in recent years.

And the startup cohort has raised oceans of capital to help fuel its growth. In America, Chime was most recently valued at $5.8 billion after raising hundreds of millions in late 2019. More recently, neobank Revolut added $80 million to its Q1 2020 round worth $500 million. Revolut is also worth north of $5 billion. Monzo is well-funded (albeit at a recent valuation reduction), Latin America-focused NuBank is worth $10 billion, according to Crunchbase, Starling recently raised another £40 million, while Germany’s N26 is worth over $3 billion after its most recent nine-figure round.

From the fundraising perspective, then, neobanks are killing the game. And thanks to recent tailwinds from the COVID-19 pandemic which have bolstered interest in savings-related products, many of the same entities could be enjoying a strong year thus far. But recent self-reporting of some neobank’s 2019-era results details ample red ink — perhaps more than we might have anticipated.

Of course, startups don’t raise money for fun; they raise it to invest it in their operations and drive scale. So, we knew that these mega-fundraisers were losing money on purpose. All the same, let’s peek at the economics of several neobanks, as their now dated and thus not at all current results can provide useful context on two points: Why investors are excited to put their capital to work in neobanks, and why neobanks always seem to have another check to announce.

Monzo, Starling and Revolut

To prevent my receiving unhappy emails from irked fans of these companies, please bear in mind that we’re looking several quarters back when observing the following results.

It would be lovely to have more recent data, but with European neobanks reporting their — roughly — 2019 results in recent weeks, this is what we have. We are going to parse the numbers, but we will not conflate past performance with current results. We do not know much about 2020 neobank financial performance.

Anyhoo, to the numbers. You can read the full documents from Monzo here, Starling here (or here, if that link is struggling) and Revolut here.

Let’s start with Monzo, which has a clear set of figures for us to peek at:

Google, Nokia, Qualcomm are investors in $230M Series A2 for Finnish phone maker, HMD Global


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

Mobile device maker HMD Global has announced a $230M Series A2 — its first tranche of external funding since a $100M round back in 2018 when it tipped over into a unicorn valuation. Since late 2016 the startup has exclusively licensed Nokia’s brand for mobile devices, going on to ship some 240M devices to date.

Its latest cash injection is notable both for its size (HMD claims it as the third largest funding round in Europe this year); and the profile of the strategic investors ploughing in capital — namely: Google, Nokia and Qualcomm.

Though whether a tech giant (Google) whose OS dominates the world’s smartphone market (Android) becoming a strategic investor in Europe’s last significant mobile OEM (HMD) catches the attention of regional competition enforcers remains to be seen. Er, vertical integration anyone? (To wit: It’s a little over two years since Google was slapped with a $5BN penalty by EU regulators for antitrust violations related to how it operates Android — and the Commission has said it continues to monitor the market ‘remedies’.)

In a further quirk, when we spoke to HMD Global CEO, Florian Seiche, ahead of today’s announcement, he didn’t expect the names of the investors to be disclosed — but we’d already been sent press release material listing them so he duly confirmed the trio are investors in the round. (But wouldn’t be drawn on how much equity Google is grabbing.)

HMD’s smartphones run on Google’s Android platform, which gives the tech giant a firm business reason for supporting the mobile maker in growing the availability of Google-packed hardware in key growth markets around the world.

And while HMD likens its consistent (and consistently updated) flavor of Android to the premium ‘pure’ Android experience you get from Google’s own-brand Pixel smartphones, the difference is the Finnish company offers devices across the range of price points, and targets hardware at mobile users in developing markets.

The upshot is relatively little overlap with Google’s Pixel hardware, and still plenty of business upside for Google should HMD grow the pipeline of Google services users (as it makes money by targeting ads).

Connoisseurs of mobile history may see more than a little irony in Google investing into Nokia branded smartphones (via HMD), given Android’s role in fatally disrupting Nokia’s lucrative smartphone business — knocking the Finnish giant off its perch as the world’s number one mobile maker and ushering in an era of Android-fuelled Asian mobile giants. But wait long enough in tech and what goes around oftentimes comes back around.

“We’re extremely excited,” said Seiche, when we mention Google’s pivotal role in Nokia’s historical downfall in smartphones. “How we are going to write that next chapter on smartphones is a critical strategic pillar for the company and our opportunity to team up so closely with Google around this has been a very, very great partnership from the beginning. And then this investment definitely confirms that — also for the future.”

“It’s a critical time for the industry therefore having a clear strategy — having a clear differentiation and a different point of view to offer, we believe, is a fantastic asset that we have developed for ourselves. And now is a great moment for us to double down on this,” he added.

We also asked Seiche whether HMD has any interest in taking advantage of the European Commission’s Android antitrust enforcement decision — i.e. to fork Android and remove the usual Google services, perhaps swapping them out for some European alternatives, which is at least a possibility for OEMs selling in the region — but Seiche told us: “We have looked at it but we strongly believe that consumers or enterprise customers actually love [Google] services and therefore they choose those services for themselves.” (Millions of dollars of direct investment from Google also, presumably, helps make the Google services business case stack up.)

Nokia, meanwhile, has always had a close relationship with HMD — which was established by former Nokia execs for the sole purpose of licensing its iconic mobile brand. (The backstory there is a clause in the sale terms of Nokia’s mobile device division to Microsoft expired in 2016, paving the way for Nokia’s brand to be returned to the smartphone market without the prior Windows Mobile baggage.)

Its investment into HMD now looks like a vote of confidence in how the company has been executing in the fiercely competitive mobile space to date (HMD doesn’t break out a lot of detail about device sales but Seiche told us it sold in excess of 70M mobiles last year; that’s a combined figure for smartphones and feature phones) — as well as an upbeat assessment of the scope of the growth opportunity ahead of it.

On the latter front US-led geopolitical tensions between the West and China do look poised to generate a tail-wind for HMD’s business.

Mobile chipmaker Qualcomm, for example, is facing a loss of business, as US government restrictions threaten its ability to continue selling chips to Huawei; a major Chinese device maker that’s become a key target for US president Trump. Its interest in supporting HMD’s growth, therefore, looks like a way for Qualcomm to hedge against US government disruption aimed at Chinese firms in its mobile device maker portfolio.

While with Trump’s recent threats against the TikTok app it seems safe to assume that no tech company with a Chinese owner is safe.

As a European company, HMD is able to position itself as a safe haven — and Seiche’s sales pitch talks up a focus on security detail and overall quality of experience as key differentiating factors vs the Android hoards.

“We have been very clear and very consistent right from the beginning to pick these core principles that are close to our heart and very closely linked with the Nokia brand itself — and definitely security, quality and trust are key elements,” he told TechCrunch. “This is resonating with our carrier and retail customers around the world and it is definitely also a core fundamental differentiator that those partners that are taking a longer term view clearly see that same opportunity that we see for us going forward.”

HMD does use manufacturing facilities in China, as well as in a number of other locations around the world — including Brazil, India, Indonesia and Vietnam.

But asked whether it sees any supply chain risks related to continued use of Chinese manufacturers to build ‘secure’ mobile hardware, Seiche responded by claiming: “The most important [factor] is we do control the software experience fully.” He pointed specifically to HMD’s acquisition of Valona Labs earlier this year. The Finnish security startup carries out all its software audits. “They basically control our software to make sure we can live up to that trusted standard,” Seiche added. 

Landing a major tranche of new funding now — and with geopolitical tension between the West and the Far East shining a spotlight on its value as alternative, European mobile maker — HMD is eyeing expansion in growth markets such as Africa, Brail and India. (Currently, HMD said it’s active in 91 markets across eight regions, with its devices ranged in 250,000 retail outlets around the world.)

It’s also looking to bring 5G to devices at a greater range of price-points, beyond the current flagship Nokia 8.3. Seiche also said it wants to do more on the mobile services side. HMD’s first 5G device, the flagship Nokia 8.3, is due to land in the US and Europe in a matter of weeks. And Seiche suggested a timeframe of the middle of next year for launching a 5G device at a mid tier price point.

“The 5G journey again has started, in terms of market adoption, in China. But now Europe, US are the key next opportunity — not just in the premium tier but also in the mid segment. And to get to that as fast as possible is one of our goals,” he said, noting joint-working with Qualcomm on that.

“We also see great opportunity with Nokia in that 5G transition — because they are also working on a lot of private LTE deployments which is also an interesting area since… we are also very strongly present in that large enterprise segment,” he added.

On mobile services, Seiche highlighted the launch of HMD Connect: A data SIM aimed at travellers — suggesting it could expand into additional connectivity offers in future, forging more partnerships with carriers. 

“We have already launched several services that are close to the hardware business — like insurance for your smartphones — but we are also now looking at connectivity as a great area for us,” he said. “The first pilot of that has been our global roaming but we believe there is a play in the future for consumers or enterprise customers to get their connectivity directly with their device. And we’re partnering also with operators to make that happen.”

“You can see us more as a complement [to carriers],” he added, arguing that business “dynamics” for carriers have also changed substantially — and customer acquisition hasn’t been a linear game for some time.

“In a similar way when we talk about Google Pixel vs us — we have a different footprint. And again if you look at carriers where they get their subscribers from today is already today a mix between their own direct channels and their partner channels. And actually why wouldn’t a smartphone player be a natural good partner of choice also for them? So I think you’ll see that as a trend, potentially, evolving in the next couple of years.”

Uber picks up Autocab to push into places its own app doesn’t go


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

Uber has bought UK based Autocab, which sells SaaS to the taxi and private hire vehicle industry, with the aim of expanding the utility of its own platform by linking users who open its app in places where it doesn’t offer trips to local providers who do.

No acquisition price has been disclosed and Uber declined to comment on the terms of the deal.

Autocab has a SaaS presence in 20 countries globally at this stage, according to an Uber spokeswoman. We’ve asked whether it will be closing a marketplace service which connects local taxi firms with trip bookers in any locations as a result of the Uber acquisition.

The Manchester-based veteran taxi software maker — which sells booking and despatch software as well as operating a global marketplace (iGo) which local firms can plug into to get more trips — was founded back in 1989, per Crunchbase.

Uber’s spokeswoman said it plans to support Autocab’s expansion of SaaS and iGo internationally — suggesting the tech giant hopes to be able to integrate the marketplace across its own global footprint in order to be able to offer users a less patchy service.

The move also looks intended to create more opportunities for Uber drivers to pick up jobs from outside its own platform, including delivery work.

In a press release announcing the acquisition, Uber said “thousands of people” open its app every month in places where they can’t get a trip. It lists 15 UK towns which fall into this category — headed by Oxford (with 67,099 app opens monthly) and Tunbridge Wells (46,150); or at the other end Colchester (16,540) and Ipswich (16,539).

“Through Autocab’s iGo marketplace, Uber will be able to connect these riders with local operators who choose to take their booking. In turn, operators should be able to expand their operations and offer more earnings opportunities to local drivers. Uber will also explore providing drivers with additional revenue opportunities related to its platform for other services, such as delivery,” it added.

According to Bloomberg, Uber won’t be integrating Autocab’s marketplace in markets where it already offers a service, such as London — so there does look to be an element of Uber using the purchase to shore up its own key markets by closing down the chance of a little locally flavored competition.

Uber’s rides business has been hard hit by the coronavirus pandemic, which has squeezed demand for on-demand transportation, as many professionals switching to remote work at home. Social distancing requirements have also hit the nightlife industry, further eating into demand for Uber’s service.

All of which makes life hard for Uber’s ‘self employed‘ drivers — giving the company an incentive to find ways to retain their service during a leaner time for on-demand trips when they may otherwise abandon the platform, damaging its ability to provide a reliable service.

For Autocab’s part, the acquisition offers a road to further global expansion. It will remain independent with its own board after the acquisition, per the pair’s press release — retaining its focus on serving the taxi and private hire vehicle industry globally.

Commenting in a statement, Jamie Heywood, Uber’s regional GM for Northern & Eastern Europe, said: “Autocab has worked successfully with taxi and private hire operators around the world for more than thirty years and Uber has a lot to learn from their experience. We look forward to working with the Autocab team to help local operators grow and provide drivers with genuine earnings opportunities.”

Autocab CEO, Safa Alkatab, added: “Autocab has been working with local operators across the world to provide the technology to make them more efficient and open up a marketplace to provide more trips. Working with Uber we can scale up our ambitions, providing hundreds of thousands of additional trips for our customers, and help cement the place of licenced operators in their local community.”

Uber picks up Autocab to push into places its own app doesn’t go


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

Uber has bought U.K.-based Autocab, which sells SaaS to the taxi and private hire vehicle industry, with the aim of expanding the utility of its own platform by linking users who open its app in places where it doesn’t offer trips to local providers who do.

No acquisition price has been disclosed and Uber declined to comment on the terms of the deal.

Autocab has a SaaS presence in 20 countries globally at this stage, according to an Uber spokeswoman. We’ve asked whether it will be closing a marketplace service which connects local taxi firms with trip bookers in any locations as a result of the Uber acquisition.

The Manchester-based veteran taxi software maker — which sells booking and dispatch software as well as operating a global marketplace (iGo) which local firms can plug into to get more trips — was founded in 1989, per Crunchbase.

Uber’s spokeswoman said it plans to support Autocab’s expansion of SaaS and iGo internationally — suggesting the tech giant hopes to be able to integrate the marketplace across its own global footprint in order to be able to offer users a less patchy service.

The move also looks intended to create more opportunities for Uber drivers to pick up jobs from outside its own platform, including delivery work.

In a press release announcing the acquisition, Uber said “thousands of people” open its app every month in places where they can’t get a trip. It lists 15 U.K. towns which fall into this category — headed by Oxford (with 67,099 app opens monthly) and Tunbridge Wells (46,150); or at the other end Colchester (16,540) and Ipswich (16,539).

“Through Autocab’s iGo marketplace, Uber will be able to connect these riders with local operators who choose to take their booking. In turn, operators should be able to expand their operations and offer more earnings opportunities to local drivers. Uber will also explore providing drivers with additional revenue opportunities related to its platform for other services, such as delivery,” it added.

According to Bloomberg, Uber won’t be integrating Autocab’s marketplace in markets where it already offers a service, such as London — so there does look to be an element of Uber using the purchase to shore up its own key markets by closing down the chance of a little locally flavored competition.

Uber’s rides business has been hard hit by the coronavirus pandemic, which has squeezed demand for on-demand transportation, as many professionals switched to remote work at home. Social distancing requirements have also hit the nightlife industry, further eating into demand for Uber’s service.

All of which makes life hard for Uber’s “self employed” drivers — giving the company an incentive to find ways to retain their service during a leaner time for on-demand trips when they may otherwise abandon the platform, damaging its ability to provide a reliable service.

For Autocab’s part, the acquisition offers a road to further global expansion. It will remain independent with its own board after the acquisition, per the pair’s press release — retaining its focus on serving the taxi and private hire vehicle industry globally.

Commenting in a statement, Jamie Heywood, Uber’s regional GM for Northern & Eastern Europe, said: “Autocab has worked successfully with taxi and private hire operators around the world for more than thirty years and Uber has a lot to learn from their experience. We look forward to working with the Autocab team to help local operators grow and provide drivers with genuine earnings opportunities.”

Autocab CEO Safa Alkatab, added: “Autocab has been working with local operators across the world to provide the technology to make them more efficient and open up a marketplace to provide more trips. Working with Uber we can scale up our ambitions, providing hundreds of thousands of additional trips for our customers, and help cement the place of licenced operators in their local community.”

Open Banking & Beyond: What’s Next for European FinTech Infrastructure?


This post is by Annalise Dragic from Sapphire Ventures Perspectives - Medium

Sapphire Ventures has had a long history of investing in fintech companies around the world, having backed Square (NYSE: SQ), IEX and OnDeck in the US, Paytm in India, and Currency Cloud and Transferwise in the UK. As fintech companies continue to bring innovative solutions to the market around the world, we’ve recently taken a closer look at the fintech infrastructure sector. Over the next couple of months, we plan to share our perspectives on this topic in a three-part series covering fintech in the European market, global payments and core banking. Here, we begin with part one focused on European developments.

Europe as a Global FinTech Leader

The same global trends that impact fintech infrastructure globally apply to Europe. Banks and financial institutions are serving an increasingly international customer base and their offerings are being unbundled. We believe fintech is shifting from a vertical to a horizontal sector as companies move to embed financial products into their offerings. This is a trend we believe is here to stay and relies on the development of a robust infrastructure layer.

Europe has been at the forefront of fintech infrastructure innovation due in part to the role of regulation. The European Union enacted PSD2 (Payment Services Directive 2) requiring banks to open up their data to third parties, and the UK implemented a similar regulation with Open Banking. It goes without saying though, one cannot generalize advancements across the entire European continent. The European market is a summation of distinct markets with differing characteristics. There are nuances between economies and cultures, as well as varying levels of adoption of fintech solutions.

However as a whole, Europe has moved faster than other geographies to embrace an open and API-centric banking model. According to Tracxn, 53 percent of Open Banking startups worldwide are headquartered in Europe. As a critical hub in fintech, Europe continues to push the frontier of innovation.

The Rise of Open Banking

Over recent years, we’ve seen a rise of Open Banking startups building out a connectivity layer between traditional financial institutions and fintech companies to aggregate and share banking data. Solutions have evolved from rudimentary screen scraping to incorporating open APIs made possible by PSD2 and Open Banking.

These new companies benefit consumers and businesses by providing greater control over financial data, easier access to financial services and facilitating the creation of new products. A recent survey conducted by Open Banking startup Tink found financial executives across 17 European countries were positively inclined towards the Open Banking movement with 46 percent believing that the development of better digital services is one of the biggest opportunities.

Source: Tink Report Inside the Minds of Europe’s Bankers.

As of today, the European Open Banking landscape remains heavily fragmented. Startups are mostly working with banks and financial institutions in their home market before expanding internationally. Out of the Nordics, there are players like Tink and Nordic API Gateway; out of the UK, there is Truelayer and Yapily; and out of Germany there is Deposit Solutions, Ndgit and FinTec Systems. We predict that in the short to medium term there will be consolidation in the pure connectivity space. In fact, we’re already seeing the beginnings of this with Tink’s recent acquisition of Eurobits in Spain.

The Shift to Open Finance

As the Open Banking sector continues to develop, the new adjacent space of Open Finance is emerging around it. There is a tremendous opportunity in this new space for the businesses and services that are being built on top of the connectivity layer made possible through Open Banking.

There are a number of different approaches to this new and broader space extending beyond Open Banking. Almost all of the existing Open Banking players are introducing value-add services, such as KYC/AML credit scoring and others on top of their API networks. There are also a number of Banking-as-a-Service (BaaS) players that are providing easy access to third-party services and applications like Bankable and Solarisbank, for example. Other players are focusing on specific use cases like FidelAPI with loyalty points and Bud with analytics, among others. In the bank-to-bank payments space, new companies like Primer and Banked are developing new infrastructure to take on PayPal and the other payment giants. And in accounting and financial tools, startups like Codat are expanding API connectivity beyond banking to accounting data.

Although there are varying approaches to a more holistic Open Finance offering, the difference between where value is created versus captured in the fintech infrastructure sector is clear. The first wave of Open Banking focused companies are creating value through exposing and connecting banking data. But the next wave of players building applications and services utilizing this data are better positioned to capture the value of the vast market opportunity in Europe.

What’s Next?

As this next wave of startups mature, Sapphire Ventures is looking to continue to partner with entrepreneurs to build Companies of Consequence in the fintech space. We welcome the opportunity to connect with European teams building Open Banking or Open Finance. Please reach out to us here: https://sapphireventures.com/contact/

And stay tuned for parts two and three of our deep dive covering payments and core banking infrastructure coming soon!

Disclaimer: Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures, LLC (“Sapphire Ventures”). Information provided reflects Sapphire Ventures’ views as of a time, whereby such views are subject to change at any point and Sapphire Ventures shall not be obligated to provide notice of any change. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. (1) Companies mentioned in this article are a representative sample of portfolio companies in which Sapphire Ventures has invested in which the author believes such companies fit the objective criteria stated in commentary, which do not reflect all investments made by Sapphire. A complete alphabetical list of Sapphire Ventures’ investments made by its direct growth and sports investing strategies is available here. While the Sapphire Ventures has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein, which is subject to change. Past performance is not indicative of future results.


Open Banking & Beyond: What’s Next for European FinTech Infrastructure? was originally published in Sapphire Ventures Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.

As remote work booms, Everphone grabs ~$40M for its ‘device as a service’ offer


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

The latest startup to see an uplift in inbound interest flowing from the remote work boom triggered by the coronavirus pandemic is Berlin-based Everphone, which sells a ‘mobile as a service’ device rental package that caters to businesses needing to kit staff out with mobile hardware plus associated support.

Everphone is announcing a €34 million Series B funding round today, led by new investor signals Venture Capital. Other new investors joining the round include German carrier Deutsche Telekom — investing via its strategic investment fund, Telekom Innovation Pool — US-based early stage VC AlleyCorp and Dutch bank NIBC.

The Series B financing will go on expanding to meet rising demand, with the startup telling TechCrunch it’s expecting to see a 70-100% increase in sales volume vs the pre-crisis period, thanks to a doubling of inbound leads during the pandemic.

“The global pandemic has been a catalyst for growth in the field of digitization,” said CEO and co-founder, Jan Dzulko, in a statement. “We are currently experiencing a significant increase in demand at home and abroad, which is why we are aiming for European expansion with the funding.”

Everphone describes its offer as a one-stop-shop, with the service covering not just the rental of (new or refurbished) smartphones and tablets but an administration and management wrapper that covers support needs, including handling repairs/replacements — with the promise of replacements within 24 hours if needed and less client risk from not having to wrangle traditional rental insurance fine print.

Other touted pluses of its “device as a service” approach include flexibility (users get to choose from a range of iOS and Android devices); lower cost (pricing depends on customer size, device choice and rental term but starts at €7,99 a month for a refurbished budget device, rising up to €49,99 a month for high end kit with a 12-month upgrade); and rental bundles which can include standard mobile device management software (such as Cortado and AirWatch) so customers can plug the rental hardware into their existing IT policies and processes.

Everphone reckons this service wrapper — which can also extend to including paid apps (such as Babbel for language learning) as an employee on-device perk/benefit in the bundle — differentiates its offer vs incumbent leasing providers, such as CHG-Meridian or De Lage Landen, and from wholesale distributors.

It also touts its global rollout capability as a customer draw, checking the scalability box.

While its investors (including German carrier, DK) are being fired up by the conviction that the COVID-19 induced shift away from the office to home working will create a boom in demand for well managed and secured work phones to mitigate the risk of personal devices and personal data mingling improperly with work stuff. (On that front Everphone’s website is replete with references to Europe’s data protection framework, GDPR, repurposed as scare marketing.)

“Everphone envisions that every employee will one day work via their smartphone,” added Marcus Polke, partner at signals Venture Capital, in a supporting statement. “With this employee-centric approach and integrated platform, everphone goes far beyond the mere outsourcing of a smartphone IT infrastructure.”

The 2016-founded startup has more than 400 customers signed up at this point, both SMEs and multinationals such as Ernst & Young. It caters to both ends of the market with an off-the-shelf package and self-service device management portal that’s intended for SMEs of between 100 and 1,500 employees — plus custom integrations for larger entities of up to 30,000 employees.

It says it’s able to offer “highly competitive” prices for renting new devices because it gives returned kit a second life, refurbishing and reselling devices on the consumer market. “Thanks to this profitable secondary lifespan, we are able to offer highly competitive prices and extensive service levels on our rental devices,” Everphone writes on its website.

The second hand smartphone market has also been seeing regional growth. Swappie, a European ecommerce startup that sells refurbished iPhones, aligning with EU lawmakers’ push for a ‘right to repair’ for electronics, raised its own ~$40M Series B only last month, for example. Its secondhand marketplace is one potential outlet for Everphone’s rented and returned iPhones.

Tandem snags $5.7M for its language buddy app amid COVID-19’s e-learning boom


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

The Berlin-based startup behind Tandem, an app for practicing a second language, has closed a £4.5 million (~$5.7 million) Series A round of financing to capitalize on growth opportunities it’s seeing as the coronavirus crisis continues to accelerate the switch to digital and online learning.

With many higher education institutions going remote as a result of concerns over virus exposure risks of students mixing on physical campuses, there’s a growing need for technology that helps language students find people to practice with, as Tandem tells it. And while language learning apps make for a very crowded space, with giants like Duolingo and Babbel, Tandem focuses on a different niche: native speaker practice.

As the name suggests, its app does pair matching — connecting users with others who’re trying to learn their own language for mutual practice, by (their choice of) text, phone chat or video call.

The platform also incorporates a more formal learning component by providing access to tutors. But the main thrust is to help learners get better by practicing chatting to a native speaker via the app.

Because of the pandemic push to socially distant learners, that’s a growing digital need, according to Tandem co-founder and CEO Arnd Aschentrup. He says the coronavirus crisis spurred a 200% increase in new users — highlighting a “clear appetite” among consumers for digital language learning.

The team has taken another tranche of funding now so it can scale to meeting this growing global opportunity.

The Series A is led by European VC firm Brighteye Ventures, with Trind Ventures, Rubylight Limited and GPS Ventures also participating. It brings the startup’s total raised to date to £6.8 million.

“Given the accelerated user-uptake and clear market opportunity, we felt that 2020 was the right time to partner with the team at Brighteye to bring Tandem into the mainstream,” says Aschentrup, adding: “We anticipate significant growth opportunities for online learning and social learning in the wake of coronavirus.”

He says two “key trends” have emerged over the past few months: “Firstly, schools and universities providing language courses have either temporarily shut down, or moved almost entirely to remote lessons. Students are therefore relying on additional platforms to learn and practice languages, which is precisely what Tandem offers.

“Secondly, we know that lockdown has enormously limited people’s ability to socialise. Friendships have been harder to maintain, and new connections more difficult to spark. We’re excited about Tandem’s ability to connect people all across the globe despite lockdown. Since coronavirus began, engagement on Tandem’s video chat feature has increased three-fold, and new user signups have increased 200%.”

Tandem had been growing usage prior to COVID-19 — increasing membership from around a million back in 2017 (when we last spoke), to more than 10 million members now, spread across 180 countries.

Aschentrup couches the underlying growth as “strong organic demand,” noting the platform has been profitable since 2019 (hence not taking in more outside funding ’til now). But, with the pandemic curve ball accelerating the switch to remote learning, it’s expecting usage of its platform to keep stepping up.

“We’ve successfully increased our community numbers ten-fold in recent years, profitably and organically,” he tells TechCrunch. “More people than ever value digital learning solutions combined with human connection, and so the time is ripe to introduce Tandem to language learners more widely around the globe. With the team at Brighteye on our side we’re excited to further develop Tandem’s reach and voice over the coming period.”

“We expect increased interest in online learning to sustain well after lockdown lifts. In China — where lockdown sanctions were implemented and lifted earlier — user engagement has remained buoyant.”

“Once people experience the value of learning as part of a like-minded global community, it often becomes a lasting part of their lifestyle,” he adds.

Tandem’s best markets for language learners are China (10%), the U.S. (9%) and Japan (9%) — which combined make up close to a third (27%) of its user base.

While the most popular language pairs (in ranked order of popularity) are:

  1. English – Spanish
  2. Spanish – Portuguese
  3. English – Chinese
  4. English – French
  5. Chinese – Japanese

While the vast majority (94%) of Tandem’s user base is making use of the freemium offering, it monetizes via a subscription product, called Tandem Pro, which it introduced in 2018 to cater to members who “preferred taking a community approach to language learning,” as Aschentrup puts it.

“For $9.99 per month, members can access key features such as: translating unlimited messages, finding Tandem partners nearby or in specific locations — for example ahead of international travels or studying abroad — and having enhanced visibility in the community as a featured Pro member,” he explains.

Aschentrup describes the “community aspect” of Tandem as a key differentiator versus other language learning apps — saying it helps users “develop and maintain cross-cultural friendships.”

“Members are often on opposite sides of the world to each other, yet able to enjoy a window into another culture entirely. Now more than ever, we’re pleased to be facilitating members’ healthy curiosity about other languages, countries and styles of living.”

The new funding will go on developing additional features for the app, and expanding the team across marketing and engineering, per Aschentrup. Currently Tandem has 24 full-time employees — it’s planning to double that to a 50-member team globally, post-Series A.

Commenting in a statement, Alex Spiro, managing partner at Brighteye Ventures, lauded the team’s “innovative and effective strategy” in building a community platform that tackles the language gap by connecting learners with fluent speakers.

“The product has not only proven resilient in this global crisis but has seen impressive growth during the period, and the team is now very well equipped to come out of it stronger and to continue to support loyal language learners that now number in the millions and will number many more in the coming years,” he added.

cargo.one gets $18.6M to take its air freight booking platform over the pond


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

Berlin -based cargo.one, which runs a marketplace for booking air freight, has closed an $18.6 million Series A round of funding led by Index Ventures.

Next47 and prior backers Creandum, Lufthansa Cargo and Point Nine Capital also participated in the round, along with a number of angel investors — including Tom Stafford of DST Global and Carlos Gonzalez-Cadenas (COO of GoCardless and former Chief Product Officer of Skyscanner).

The August 2017-founded startup says it’s seen bookings rise during the coronavirus crisis travel crunch as airlines seek alternatives to selling seats to passengers.

Over the past 12 months the startup says it’s scaled GMV by 10x and is expecting continued fast-paced growth as COVID-19 accelerates the adoption of digital distribution in air cargo.

The new funding will go on expanding the business, with the team aiming to increase the number of airlines signed up — including beefing up coverage in Europe. cargo.one is also targeting expanding into North America and Asia — planning to triple headcount to 70 staff by the end of the year via an aggressive hiring drive.

Currently it has 12 airlines signed up to use the platform to book in freight shipments, including Lufthansa, All Nippon Airways, Finnair, Etihad, AirBridgeCargo and TAP Air Portugal. It launched the booking product two summers ago, with Lufthansa Cargo as the first airline signed up.

“cargo.one is a two-sided marketplace, connecting airlines with forwarders of all sizes,” says co-founder and MD Oliver Neumann, discussing the business model. “We receive a commission fee from the airlines for selling their air freight capacities on our platform. For freight forwarders the access to the booking platform is free.”

The platform offers real-time visibility of available air freight across covered airlines and routes — aiming to replace what can be an arduous process of phone and/or email back and forth for its target users (freight forwarding offices).

Airlines set prices for air freight products sold via cargo.one.

“The air cargo market has been stuck in the 90s when compared to the passenger business. The vast majority of air cargo to this day is booked by calling the airlines directly. Many processes are still manual and time-consuming,” says Neumann, who describes the product as “more than just a booking platform”.

“We design, build and maintain custom integrations to our airline partners, creating both the front end for freight forwarders and integrating into the systems of the airlines and helping them improve the back-end infrastructure. That’s why we refer to it as the operating system for air cargo.”

“At cargo.one we are building a 100% digital solution and enable airlines to transform their business digitally. Over the past years, cargo.one has built tailored technical integrations with airline partners that enable them to distribute their capacity online without the need to overhaul their infrastructure,” he adds.

Currently, cargo.one’s platform has some 1.1M+ air freight offers per month, covering 120+ countries and 300 airports globally.

On the customer side it has more than 1,500 freight forwarding offices signed up at this point — which it touts as including “21 of the top 25 companies globally”.

“From January to June 2020, cargo.one saw the number of air cargo search requests by freight forwarders quadruple. In response to increased demand from airlines and freight forwarders, we expect to triple the size of the business by the end of the year,” adds Neumann.

Index’s Martin Mignot and Max Rimpel led the Series A investment in cargo.one.

Commenting on the funding in a statement, Mignot, said: “cargo.one has formed close partnerships with major global airlines, who have subsequently seen their cargo business expand significantly. Conversations with dozens of other airlines in the Americas and Asia show the clear need for a simple booking engine for air cargo, and early signs of the far-reaching impact it will have on the airline industry and businesses around the world who rely on it to serve their customers.”

Venture capital has been pouring into the logistics space over the past decade, chasing an increasing number of startups spotting opportunities to apply digital efficiencies to the movement of physical goods — including aiming to replace freight forwarders themselves, in the case of another Berlin logistics startup, FreightHub, which raised a $30M Series B last year for a logistics play that covers sea, air and rail freight.

Revolut extends Series D round to $580 million with $80 million in new funding


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

Fintech startup Revolut just announced that it has raised $80 million as part of its Series D round that it announced in February. The new influx of funding comes from TSG Consumer Partners.

In February, Revolut raised a $500 million led by TCV at a $5.5 billion valuation. Today’s new funding extends that funding round to $580 million — the company says the valuation remains the same.

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

The startup expanded beyond that simple feature set and now wants to become a financial hub, a super app for all things related to money. For instance, you can insure your phone, get a travel medical insurance package, buy cryptocurrencies, buy shares, donate to charities and save money from Revolut.

The company says it’ll use the investment to add new features in the U.S. and roll out banking operations across Europe — you can expect local banking details in multiple European countries. Eventually, Revolut also plans to offer credit products across Europe.

In addition to that, Revolut is working on a subscription management tool. It lets you see all your active subscriptions, cancel them from Revolut and receive alerts when a free trial ends.

There are now 12 million registered users on Revolut.

Typewise taps $1M to build an offline next word prediction engine


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

Swiss keyboard startup Typewise has bagged a $1 million seed round to build out a typo-busting, ‘privacy-safe’ next word prediction engine designed to run entirely offline. No cloud connectivity, no data mining risk is the basic idea.

They also intend the tech to work on text inputs made on any device, be it a smartphone or desktop, a wearable, VR — or something weirder that Elon Musk might want to plug into your brain in future.

For now they’ve got a smartphone keyboard app that’s had around 250,000 downloads — with some 65,000 active users at this point.

The seed funding breaks down into $700K from more than a dozen local business angels; and $340K via the Swiss government through a mechanism (called “Innosuisse projects“), akin to a research grant, which is paying for the startup to employ machine learning experts at Zurich’s ETH research university to build out the core AI.

The team soft launched a smartphone keyboard app late last year, which includes some additional tweaks (such as an optional honeycomb layout they tout as more efficient; and the ability to edit next word predictions so the keyboard quickly groks your slang) to get users to start feeding in data to build out their AI.

Their main focus is on developing an offline next word prediction engine which could be licensed for use anywhere users are texting, not just on a mobile device.

“The goal is to develop a world-leading text prediction engine that runs completely on-device,” says co-founder David Eberle. “The smartphone keyboard really is a first use case. It’s great to test and develop our algorithms in a real-life setting with tens of thousands of users. The larger play is to bring word/sentence completion to any application that involves text entry, on mobiles or desktop (or in future also wearables/VR/Brain-Computer Interfaces).

“Currently it’s pretty much only Google working on this (see Gmail’s auto completion feature). Applications such as Microsoft Teams, Slack, Telegram, or even SAP, Oracle, Salesforce would want such productivity increase – and at that level privacy/data security matters a lot. Ultimately we envision that every “human-machine interface” is, at least on the text-input level, powered by Typewise.”

You’d be forgiven for thinking all this sounds a bit retro, given the earlier boom in smartphone AI keyboards — such as SwiftKey (now owned by Microsoft).

The founders have also pushed specific elements of their current keyboard app — such as the distinctive honeycomb layout — before, going down a crowdfunding route back in 2015, when they were calling the concept Wrio. But they reckon it’s now time to go all in — hence relaunching the business as Typewise and shooting to build a licensing business for offline next word prediction.

“We’ll use the funds to develop advanced text predictions… first launching it in the keyboard app and then bringing it to the desktop to start building partnerships with relevant software vendors,” says Eberle, noting they’re working on various enhancements to the keyboard app and also plan to spend on marketing to try to hit 1M active users next year.

“We have more ‘innovative stuff’ [incoming] on the UX side as well, e.g. interacting with auto correction (so the user can easily intervene when it does something wrong — in many countries users just turn it off on all keyboards because it gets annoying), gamifying the general typing experience (big opportunity for kids/teenagers, also making them more aware of what and how they type), etc.”

The competitive landscape around smartphone keyboard tech, largely dominated by tech giants, has left room for indie plays, is the thinking. Nor is Typewise the only startup thinking that way (Fleksy has similar ambitions, for one). However gaining traction vs such giants — and over long established typing methods — is the tricky bit.

Android maker Google has ploughed resource into its Gboard AI keyboard — larding it with features. While, on iOS, Apple’s interface for switching to a third party keyboard is infamously frustrating and finicky; the opposite of a seamless experience. Plus the native keyboard offers next word prediction baked in — and Apple has plenty of privacy credit. So why would a user bother switching is the problem there.

Competing for smartphone users’ fingers as an indie certainly isn’t easy. Alternative keyboard layouts and input mechanism are always a very tough sell as they disrupt people’s muscle memory and hit mobile users hard in their comfort and productivity zone. Unless the user is patient and/or stubborn enough to stick with a frustratingly different experience they’ll soon ditch for the keyboard devil they know.  (‘Qwerty’ is an ancient typewriter layout turned typing habit we English speakers just can’t kick.)

Given all that, Typewise’s retooled focus on offline next word prediction to do white label b2b licensing makes more sense — assuming they can pull off the core tech.

And, again, they’re competing at a data disadvantage on that front vs more established tech giant keyboard players, even as they argue that’s also a market opportunity.

“Google and Microsoft (thanks to the acquisition of SwiftKey) have a solid technology in place and have started to offer text predictions outside of the keyboard; many of their competitors, however, will want to embed a proprietary (difficult to build) or independent technology, especially if their value proposition is focused on privacy/confidentiality,” Eberle argues.

“Would Telegram want to use Google’s text predictions? Would SAP want that their clients’ data goes through Microsoft’s prediction algorithms? That’s where we see our right to win: world-class text predictions that run on-device (privacy) and are made in Switzerland (independent environment, no security back doors, etc).”

Early impressions of Typewise’s next word prediction smarts (gleaned by via checking out its iOS app) are pretty low key (ha!). But it’s v1 of the AI — and Eberle talks bullishly of having “world class” developers working on it.

“The collaboration with ETH just started a few weeks ago and thus there are no significant improvements yet visible in the live app,” he tells TechCrunch. “As the collaboration runs until the end of 2021 (with the opportunity of extension) the vast majority of innovation is still to come.”

He also tells us Typewise is working with ETH’s Prof. Thomas Hofmann (chair of the Data Analytic Lab, formerly at Google), as well as having has two PhDs in NLP/ML and one MSc in ML contributing to the effort.

“We get exclusive rights to the [ETH] technology; they don’t hold equity but they get paid by the Swiss government on our behalf,” Eberle also notes. 

Typewise says its smartphone app supports more than 35 languages. But its next word prediction AI can only handle English, German, French, Italian and Spanish at this point. The startup says more are being added.

Electric-bike maker Cowboy raises $26 million


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

Cowboy has raised a $26 million (€23 million) Series B funding round from Exor Seeds, HCVC, Isomer Capital, Future Positive Capital and Index Ventures. The startup has been manufacturing premium electric bikes and selling them directly to consumers around Europe.

The company recently released the third generation of its flagship bike, which is all about refinements and iterating on its existing offering. If you haven’t seen one in a European city, it features an iconic triangle-shaped aluminum frame with integrated pill-shaped lights.

With a focus on simplicity, there are no gears or buttons to control motor assistance. The motor kicks in automatically when you start pedaling. Some of the key features of the Cowboy bike are the carbon belt, custom-made tires with a puncture protection layer and the detachable battery.

Cowboy bikes are also connected bikes thanks to some electronic components. For instance, you can lock your bike when you’re not using it. The company is currently testing auto-unlock, a feature that takes advantage of Bluetooth Low Energy to detect your phone.

By combining data from the accelerometer, the speed of the bike and your pedal power, Cowboy will also soon automatically detect a crash and notify an emergency contact.

In addition to designing a bike, Cowboy is also a service company. It has built a network of repair partners and offers test rides to potential clients. It is now available in dozens of European cities.

The company also offers an insurance product thanks to a partnership with Qover. For €8 per month, you can receive real-time notification whenever someone is trying to steal your bike and you’re insured against theft. For €10 per month, you’re also insured against damage.

With today’s funding round, the startup plans to hire more than 30 people in the next six months, expand its network of test rides and scale production operations with Flex .

Scalable Capital raises $58M at a $460M valuation for its robo-investment platform


This post is by Ingrid Lunden from Fundings & Exits – TechCrunch

Startups building tech-based platforms to help make investments continue to be in high demand, building on an expanding market of investors getting more confident to rely on technology to undercut broker fees and speed up the process. Today, one of the hopefuls in the space is announcing a growth round to capitalise on that opportunity.

Scalable Capital — the Munich-based startup that has built a platform to monitor and manage investment portfolios investing in shares, manage trades and exchange traded funds for a flat fee of €2.99 per month — has closed a round of €50 million ($58 million) to expand its business. Scalable currently has some 80,000 customers across Germany, Austria and the UK. Using its services both directly and via bank partners, the startup says it has more than $2 billion under management on its platform and the plan is to build more products for those customers, add more customers in those regions and potentially look to more countries in Europe.

CEO Erik Podzuweit confirmed to TechCrunch that the Series D was made at a post-money valuation €400 million ($460 million).

The investment is coming from a mix of new and existing investors, including BlackRock, HV Holtzbrinck Ventures and Tengelmann Ventures. It brings the total raised by the startup to €116 million ($133 million).

The last several years have seen a veritable explosion of startups — and banks, often tapping technology built by startups, as is the case with Scalable — building financial technology tools that help people bypass slow, costly and often less-transparent legacy banking services. In place of the incumbents, startups are developing apps and web-based platforms to help users make faster, cheaper and (critically) more financial transactions.

That trend has been accelerated significantly in the last few months, where people are spending a lot more time in front of screens at home as part of social distancing orders to contain the spread of the novel coronavirus. Services that used to be conducted in person are shifting to being carried out online: That was already a trend before the health pandemic, of course, but now with more limited options, people are making the shift faster.

It seems that this is even the case in the world of investing apps.

Despite the wider economic downturn spurred by the global health pandemic, those who have the money to make investments are still doing so, not just to capture new opportunities that are arising, but also to move away from investments that might be less fruitful in the current climate.

It seems ironic for a startup to set out to “democratise” services for wealth management — one way that Scalable likes to describe its service — considering that wealth management is not something that the majority of people will ever have the means to need to think about, but the trend seems to play out at all levels of the economy.

And that means startups are raising money to meet that demand to disrupt traditional brokers. One of Scalable’s direct competitors, Trade Republic, announced a fundraise of $67 million just in April. Others in the same space that are also on the radar of VCs include Bux, YieldStreet (out of the U.S.), Parallel Markets, Freetrade, Revolut and Robinhood.

“In times of Covid-19, our funding round is a powerful signal; it shows that our focused, digital business model is convincing the investors,” Podzuweit, co-founder and co-CEO of Scalable Capital, said in a statement.

To date, Scalable has built out its business as both a B2B and B2C service. For the former, it sells its tech to banks who want to offer a “robo advisor” option to its investor customers. Partners in that business include a mix of huge banks and other startups, among them Barclays, Gerd Kommer Capital, Raiffeisen Banking Group Austria, Raisin, ING Deutschland, Siemens Private Finance, the Openbank digital bank from Santander, Targobank from French Crédit Mutuel, Oskar and Baader Bank.

The B2C service, which was only launched in June, offers a service directly to investors themselves. It sounds like it has been growing very quickly in the month or so it’s been in the market. In an email exchange, Podzuweit — who co-founded the company in 2014 with Florian Prucker, Adam French (previously at Goldman Sachs) and Professor Dr. Stefan Mittnik (an academic who is the current chair of Financial Econometrics and director of the Center for Quantitative Risk Analysis at the Ludwig Maximilian University in Munich) — said that the B2C and B2B businesses are roughly at a 50/50 rate in terms of revenues at the moment.

The B2C service includes a robo advisor for private investors with an “own asset management strategy.” The service branded “Prime Broker” offers flat-rate trades, and Scalable says that on average users of it service are about 10 years younger than those for its wealth management service (no surprise there, since it’s likely that older people who have accrued more wealth will be the most likely targets for something aimed at “wealth management”).

And that underscores the opportunity for growth into new customer segments that Scalable wants to target with this funding.

AB Tasty raises $40 million to optimize e-commerce user experience


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

AB Tasty has raised a new $40 million funding round led by Credit Mutuel Innovation, with existing investors Korelya Capital, Omnes, Partech and XAnge also participating. Overall, the startup has raised $64 million.

The startup is focused on improving user experience on e-commerce platforms, travel portals, fashion websites and more. It lets you customize the message and the feature set of your application depending on the person with whom you’re interacting.

AB Tasty started the fundraising process at the end of last year and managed to close this funding round by the end of April. “We were supposed to close the round by the end of March and then coronavirus hit, which delayed the closing a bit,” co-founder and CEO Alix de Sagazan told me. But it seems like lockdowns didn’t derail the startup.

At first, AB Tasty was a web analytics agency. In 2013, the company started working on a software-as-a-service product with a simple testing product — hence the name AB Tasty. But it evolved beyond that with a recommendation engine.

Integrating AB Tasty on your website works pretty much like integrating Google Analytics. You insert a single line of JavaScript code on every page of your site. It lets you learn a ton of information about your visitors and sort them into buckets — for European users, they’d have to give their consent in the GDPR module. You can separate engaged users from casual wanderers, you can identify customers who have been on your site for a while, etc.

After that, you can act on those segments to send personalized messages. For instance, using dynamic widgets you could give a discount to users who have a loyalty card.

More recently, AB Tasty has been trying to make it easier to roll out new features and customize an app for a specific audience. It lets you hide features behind flags and trigger them depending on multiple conditions. For instance, you could progressively roll out a new feature to 10% of your user base, then 20% of your user base, etc. You also could hide features that aren’t available in some countries.

Overall, AB Tasty is trying to increase your average basket size, upsell your customers with other products, make customers come back more often and generate more revenue.

Originally from France, AB Tasty now has teams in many different countries, such as Germany, the U.K., Spain, Singapore and the U.S. “I moved to New York in September 2018. It’s been nearly two years and we’ve had tremendous growth since I arrived in the U.S.,” de Sagazan said.

Revenue in the U.S. has jumped by 480% over the past two years and 60% of the company’s revenue now comes from outside of France. The company has around 900 clients, such as Le Bon Coin, LVMH, L’Oréal, Carrefour, Leclerc, Oui.SNCF, Sephora, Disneyland Paris, etc.

Adevinta acquires eBay’s Classifieds business unit in $9.2B deal


This post is by Ingrid Lunden from Fundings & Exits – TechCrunch

Consolidation continues apace in the world of e-commerce, and today it was the turn of the classified ads market. Today, eBay announced that it had reached a deal to sell off its Classifieds business unit to Adevinta, a Norway-based classified ads publisher majority owned by Danish publisher Schibsted. The deal is valued at $9.2 billion, which includes eBay getting $2.5 billion in cash and 540 million Adevinta shares. The deal makes eBay a 44% owner of Adevinta, with a 33.3% voting stake.

Adevinta’s interest in eBay was reported earlier in the week, but with the deal coming at a much lower valuation, of $8 billion.

More generally, it caps off months of speculation about the future for the classifieds business, which has come out of long-term pressure spurred by activist investors for eBay to rationalise what had once been a sprawling e-commerce business empire (advocating for a reverse Amazon, I guess you could say). That included not just its marketplace, but classified ads, payment services (PayPal, which got spun out as a separate company), and ticketing (Viagogo acquired its Stubhub business in a $4 billion deal last year, although that is now facing some regulatory scrutiny.).

Now, all three of those business units are no longer a part of eBay.

Adevinta is in 15 countries and today 35 digital products and websites. eBay meanwhile owns 12 brands in 13 countries around the world, but the business has been hard-hit by the coronavirus crisis. In the last quarter, eBay said that it brought in revenues of just $248 million, down 3% on an as-reported basis and remaining flat on a FX-Neutral basis. For some context, the marketplace brought in revenues of $1.9 billion in the same period.

The overlap will mean a classified ad footprint of  20 countries, and the companies believe that some $150 million – $185 million in synergies will be reached through the combination.

“We are pleased we reached an agreement with Adevinta that brings together two great companies,” said Jamie Iannone, CEO of eBay, in a statement. “eBay believes strongly in the power of community and connections between people, which has been essential to our Classifieds businesses globally. This sale creates short-term and long-term value for shareholders and customers, while allowing us to participate in the future potential of the Classifieds business.”

With little needed but text and a search facility to create a very basic classifieds list, classifieds were one of the first early “hits” of the internet, disrupting newspapers and one of their traditionally most consistent revenue streams (not so anymore, of course).

Over the years, the tech behind what constitutes a “classified ad” has changed, but those in the market are now competing with a wide plethora of alternatives that leverage social and geographical networks to connect people to things or services they might like to buy or rent, including the likes of Facebook’s Marketplace but also a lot of mobile apps and more. And some of these completely undercut the business model of the original disruptors.

That has meant that those who have established themselves in the space have played on consolidation to grow and improve their economies of scale.

“With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands. We believe the combination of the two companies, with their complementary businesses, creates one of the most exciting and compelling equity stories in the online classifieds sector,” said Rolv Erik Ryssdal, CEO of Adevinta, in a statement.

“We have been impressed with eBay Classifieds Group’s achievements in recent years, leading across markets with nationally recognized brands including Mobile.de, Gumtree, Marktplaats, dba, Bilbasen, Kijiji, 2dehands, 2ememain, Vivanuncios, Automobile.it, Motors.co.uk, Autotrader (Australia), Carsguide (Australia), and eBay Kleinanzeigen, and innovating consistently across its product portfolio and advertising technology platform.”

For now there are no announcements of layoffs or other moves, with eBay’s classifieds executive team coming over with the deal.

“This deal is a testament to the growth and potential of the eBay Classifieds business,” said Alessandro Coppo, SVP and GM, eBay Classifieds Group. “We are excited for our local classifieds brands to join Adevinta and shape a global leader in an industry full of potential.”

The deal is expected to be completed in the first quarter of 2021, subject to regulatory and shareholder approvals.

As part of, Schibsted will acquire eBay Classifieds’ Danish business once the deal closes.

“Schibsted’s Board of Directors and management strongly supports the agreement between Adevinta and eBay, as we are confident that it will further strengthen the value creation potential for Schibsted and the rest of Adevinta’s shareholders. Schibsted intends to continue to contribute to the value creation for all Adevinta shareholders as a significant long-term anchor shareholder,” said Kristin Skogen Lund, CEO of Schibsted in s a statement.

 

eBay reportedly getting close to selling its classified-ads unit to Adevinta


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

eBay is reportedly getting close to a deal to sell its classified-ads business to Adevinta, a Norwegian company that runs online marketplaces across Europe and Latin America. According to a Wall Street Journal report, if the negotiations are successful, a cash and stock deal could be announced as soon as Monday. The transaction is expected to value eBay’s classified business at about $8 billion.

The Wall Street Journal first reported in February that eBay was planning to sell off its classifieds business, with prospective buyers named at that time including private equity firms TPG and Blackstone Group, Naspers, and German publisher Axel Springer SE.

More recently, Prosus NV, an Amsterdam-based investment firm that is controlled by Naspers, emerged as a contender, but Bloomberg reported over the weekend that negotiations hit a bump because eBay wants to maintain a stake in the classifieds business after selling it.

Activist shareholders Elliot Management and Starboard Value LP have pushed eBay to sell off non-core business units to focus on its marketplace, resulting in the sale of StubHub to viagogo for more than $4 billion last year and the appointment of a new chief executive officer.

Ebay’s classifieds division operates mostly outside of the United States, including in Canada, Europe, Africa, Australia and Mexico. If Adevinta ends up acquiring it, it can expand its international portfolio of peer-to-peer e-commerce platforms.

An Adevinta representative told TechCrunch the company had no comment on the reported negotiations. TechCrunch has also reached out to eBay.

Ebay said in its last quarterly earnings report, issued in April, that it was “explor[ing] potential value-creating alternatives for its Classifieds business, is holding active discussions with multiple parties and anticipates having an update by the middle of the year.”

During the first quarter of this year, eBay’s main marketplace business generated $2.1 billion in revenue, down, while its classifieds business saw $248 million in revenue. In 2019, the classifieds business made $1.1 billion in revenue, versus $7.6 billion for eBay Marketplace, which is weathering competition from larger online rivals like Amazon.

The background to EU citizens’ court win over US tech giants


This post is curated by Keith Teare. It was written by Alex Hern UK technology correspondent. The original is [linked here]

Data privacy rights have been backed by a new ruling, the latest twist in a nine-year campaign to limit surveillance by US agencies

A ruling of the court of justice of the European Union (CJEU) could prevent tech companies like Facebook from sending data from the trading bloc to the US, after finding that there are not enough protections against snooping by American intelligence agencies. It is the latest ruling in a long-running European legal saga.

July 2000: EU and US develop the Safe Harbour Privacy Principles, which allow personal information to be transferred between the two without breaching the EU’s data protection rules. Under the principles, US companies can self-certify that they comply with the EU data protection directive.

Continue reading…

Tech firms like Facebook must restrict data sent from EU to US, court rules


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

Long-running legal saga finds inadequate protections against snooping on personal data by US intelligence agencies

Tech companies like Facebook could be prevented from sending data back to the US, after the latest ruling in a long-running European legal saga found that there are not enough protections against snooping by US intelligence agencies.

The ruling of the court of justice of the European Union (CJEU) does not immediately end such transfers, but requires data protection authorities (DPAs) in individual member states to vet the sending of any new data to make sure people’s personal information remains protected according to the EU’s data protection laws (GDPR).

Continue reading…

Layer gets $5.6M to make joint working on spreadsheets less hassle


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

Layer is not trying to replace Excel or Google Sheets. Instead the Berlin-based productivity startup wants to make life easier for those whose job entails wrangling massive spreadsheets and managing data inputs from across an organization — such as for budgeting, financial reporting or HR functions — by adding a granular control access layer on top.

The idea for a ‘SaaS to supercharge spreadsheets’ came to the co-founders as a result of their own experience of workflow process pain-points at the place they used to work, as is often the case with productivity startups.

“Constantin [Schünemann] and I met at Helpling, the marketplace for cleaning services, where I was the company’s CFO and I had to deal with spreadsheets on a daily level,” explains co-founder Moritz ten Eikelder. “There was one particular reference case for what we’re building here — the update of the company’s financial model and business case which was a 20MB Excel file with 30 different tabs, hundreds of roles of assumptions. It was a key steering tool for management and founders. It was also the basis for the financial reporting.

“On average it needed to be updated twice per month. And that required input by around about 20-25 people across the organization. So right then about 40 different country managers and various department heads. The problem was we could not share the entire file with [all the] people involved because it contained a lot of very sensitive information like salary data, cash burn, cash management etc.”

While sharing a Dropbox link to the file with the necessary individuals so they could update the sheet with their respective contributions would have risked breaking the master file. So instead he says they created individual templates and “carve outs” for different contributors. But this was still far from optimal from a productivity point of view. Hence feeling the workflow burn — and their own entrepreneurial itch.

“Once all the input was collected from the stakeholders you would start a very extensive and tedious copy paste exercise — where you would copy from these 25 difference sources and insert them data into your master file in order to create an up to date version,” says ten Eikelder, adding: “The pain points are pretty clear. It’s an extremely time consuming and tedious process… And it’s extremely prone to error.”

Enter Layer: A web app that’s billed as a productivity platform for spreadsheets which augments rather than replaces them — sitting atop Microsoft Excel and Google Sheets files and bringing in a range of granular controls.

The idea is to offer a one-stop shop for managing access and data flows around multi-stakeholder spreadsheets, enabling access down to individual cell level and aiding collaboration and overall productivity around these key documents by streamlining the process of making and receiving data input requests.

“You start off by uploading an Excel file to our web application. In that web app you can start to build workflows across a feature spectrum,” says Schünemann — noting, for example, that the web viewer allows users to drag the curser to highlight a range of cells they wish to share.

“You can do granular user provisioning on top of that where in the offline world you’d have to create manual carve outs or manual copies of that file to be able to shield away data for example,” he goes on. “On top of that you can then request input [via an email asking for a data submission].

“Your colleagues keep on working in their known environments and then once he has submitted input we’ve built something that is very similar to a track changes functionality in Word. So you as a master user could review all changes in the Layer app — regardless of whether they’re coming through Excel or Google Sheets… And then we’ve built a consolidation feature so that you don’t need to manually copy-paste from different spreadsheets into one. So with just a couple of clicks you can accept changes and they will be taken over into your master file.”

Layer’s initial sales focus is on the financial reporting function but the co-founders say they see this as a way of getting a toe in the door of their target mid-sized companies.

The team believes there are wider use-cases for the tool, given the ubiquity of spreadsheets as a business tool. Although, for now, their target users are organizations with between 150-250 employees so they’re not (yet) going after the enterprise market.

“We believe this is a pretty big [opportunity],” Schünemann tells TechCrunch. “Why because back in 2018 when we did our first research we initially started out with this one spreadsheet at Helpling but after talking to 50 executives, most of them from the finance world or from the financial function of different sized companies, it’s pretty clear that the spreadsheet dependency is still to this day extremely high. And that holds true for financial use cases — 87% of all budgeting globally is still done via spreadsheets and not big ERP systems… but it also goes beyond that. If you think about it spreadsheets are really the number one workflow platform still used to this day. It’s probably the most used user interface in any given company of a certain size.”

“Our current users we have, for example, a real estate company whereby the finance function is using Layer but also the project controller and also some parts of the HR team,” he adds. “And this is a similar pattern. You have similarly structured workflows on top of spreadsheets in almost all functions of a company. And the bigger you get, the more of them you have.

“We use the finance function as our wedge into a company — just because it’s where our domain experience lies. You also usually have a couple of selective use cases which tend to have these problems more because of the intersections between other departments… However sharing or collecting data in spreadsheets is used not only in finance functions.”

The 2019 founded startup’s productivity platform remains in private beta for now — and likely the rest of this year — but they’ve just nabbed €5 million (~$5.6M) in seed funding to get the product to market, with a launch pegged for Q1 2021.

The seed round is led by Index Ventures (Max Rimpel is lead there), and with participation from earlier backers btov Partners. Angel investors also joining the seed include Ajay Vashee (CFO at Dropbox); Carlos Gonzales-Cadenaz (COO of GoCardless), Felix Jahn (founder and CEO of McMakler), Matt Robinson (founder of GoCardless and Nested) and Max Tayenthal (co-founder and CFO of N26).

Commenting in a statement, Index’s Rimpel emphasized the utility the tool offers for “large distributed organizations”, saying: “Spreadsheets are one of the most successful UI’s ever created, but they’ve been built primarily for a single user, not for large distributed organisations with many teams and departments inputting data to a single document. Just as GitHub has helped developers contribute seamlessly to a single code base, Layer is now bringing sophisticated collaboration tools to the one billion spreadsheet users across the globe.”

On the competition front, Layer said it sees its product as complementary to tech giants Google and Microsoft, given the platform plugs directly into those spreadsheet standards. Whereas other productivity startups, such as the likes of Airtable (a database tool for non-coders) and Smartsheets (which bills itself as a “collaboration platform”) are taking a more direct swing at the giants by gunning to assimilate the spreadsheet function itself, at least for certain use cases.

“We never want to be a new Excel and we’re also not aiming to be a new Google Sheets,” says Schünemann, discussing the differences between Layer and Airtable et al. “What Github is to code we want to be to spreadsheets.”

Given it’s working with the prevailing spreadsheet standard it’s a productivity play which, should it prove successful, could see tech giants copying or cloning some of its features. Given enough scale, the startup could even end up as an acquisition target for a larger productivity focused giant wanting to enhance its own product offering. Though the team claims not to have entertained anything but the most passing thoughts of such an exit at this early stage of their business building journey.

“Right now we are really complementary to both big platforms [Google and Microsoft],” says Schünemann. “However it would be naive for us to think that one or the other feature that we build won’t make it onto the product roadmap of either Microsoft or Google. However our value proposition goes beyond just a single feature. So we really view ourselves as being complementary now and also in the future. Because we don’t push out Excel or Google Sheets from an organization. We augment both.”

“Our biggest competitor right now is probably the ‘we’ve always done it like that’ attitude in companies,” he adds, rolling out the standard early stage startup response when asked to name major obstacles. “Because any company has hacked their processes and tools to make it work for them. Some have built little macros. Some are using Jira or Atlassian tools for their project management. Some have hired people to manage their spreadsheet ensembles for them.”

On the acquisition point, Schünemann also has this to say: “A pre-requisite for any successful exit is building a successful company beforehand and I think we believe we are in a space where there are a couple of interesting exit routes to be taken. And Microsoft and Google are obviously candidates where there would be a very obvious fit but the list goes beyond that — all the file hosting tools like Dropbox or the big CRM tools, Salesforce, could also be interesting for them because it very much integrates into the heart of any organization… But we haven’t gone beyond that simple high level thought of who could acquire us at some point.” 

Creandum backs Amie, a new productivity app from ex-N26 product manager Dennis Müller


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

Amie, a new productivity app from ex-N26 product manager Dennis Müller, has picked up $1.3 million in pre-seed funding to “kickstart” development and hiring.

Backing 23-year-old Müller is Creandum — the European VC best known for being an early investor in Spotify — along with Tiny.VC and a plethora of angels. They include Laura Grimmelmann (Ex-Accel), Nicolas Kopp (CEO, N26 U.S.), Roland Grenke (Dubsmash co-founder) and Zachary Smith (SVP of product at U.S. challenger bank Chime).

Founded early this year and with a planned launch in early 2021, Berlin-based Amie is developing a productivity app that combines a person’s calendar and to-dos in one place. Previously called coco, it promises to work across all devices, with an interface that “works just like you think.”

“Back in the day, you had a calendar on your office wall, and a to-do list on a notepad,” Müller tells me. “You could take your list with you elsewhere, but not your calendar. Those were digitized instead of rethinking the flow. Most productivity apps solve very specific problems, creating a new one, [and] users need too many tools.”

Amie pre-release app screenshot.

Müller says Amie is built on the principle that “to-dos, habits and events all take time, and all belong in the same place.” Many people already schedule to-dos and the startup wants to offer the fastest way to create to-dos, schedule events, check your calendar “and even jump into Zoom calls.”

As a glimpse of what’s to come, Amie promises to let you drag ‘n’ drop to-dos into your day, or turn links and screenshots into to-dos. “With Amie’s Alfred-like app, you can create an event and invite people in a different timezone, all while other apps are still loading,” says the young company.

More broadly, Amie wants to act as a central workspace, letting you also do things like join video calls, take notes and do email, without the need to open extra browser tabs and therefore avoid “context switching.”

“Amie will target professionals who are currently using Google Calendar, due to our integration,” adds Müller. “The waitlist already counts thousands of users, who are mostly professionals working in the tech industry (e.g., designers, developers, bizdevs, etc.”

LocalGlobe and TransferWise’s Taavet Hinrikus back ‘frictionless finance’ startup Radix


This post is curated by Keith Teare. It was written by Steve O'Hear. The original is [linked here]

Radix, a U.K. startup that’s building a decentralised finance protocol on which new financial apps can connect and be built on top of, has raised $4.1 million in new funding.

Backing the company, which counts the Ethereum network and a number of other “DeFi” projects as competitors, is London-based seed-stage VC LocalGlobe and TransferWise co-founder Taavet Hinrikus.

Radix DLT Ltd. — separate from the nonprofit Radix Foundation — had previously raised $1.9 million in equity funding in the form of a SAFE note and will be issued 2.4 billion tokens by the Radix Foundation (see below).

In its own words, Radix DLT is building a decentralised finance protocol that aims to provide “frictionless access, liquidity and programmability of any asset in the world.” The Radix team also claims it has overcome the scalability issue that typically plagues decentralised finance and blockchain-based ledgers.

In a public test of the Radix network last year, it claims to have achieved over 1 million transactions per second, a throughput over 5x higher than the Nasdaq at its peak.

It also positions itself as different from other distributed ledgers and decentralised protocols. Radix is “not trying to be a general purpose platform,” says CEO Piers Ridyard. “Decentralised finance, and by extension, the financial industry, is a highly specialised sector that requires a highly specialised set of tools and incentives. Unlike the general purpose protocols that came before it, such as Ethereum, Radix is building a layer 1 protocol specifically for decentralised finance.”

Benefiting from more than seven years of R&D carried out by founder Dan Hughes, a self-taught coder from the North of England, Ridyard says that Radix’s sole focus on DeFi from the get-go means Radix is lowering the barriers to adoption via integrations with payment rails and consumer applications, and increasing on-ledger liquidity by making it as easy as possible for developers to build new DeFi apps. The latter consists of the Radix Engine, a developer interface that claims to enable quick public ledger deployments using a “secure-by-design” environment.

But what’s the problem DeFi potentially solves?

At the highest level, proponents of so-called DeFi point to the fact that every system in finance is essentially built on its own, proprietary, non-compatible technology stack that still has far too many human processes behind it. For example, the London Stock Exchange, the U.S. Nasdaq and the Shanghai Stock Exchange are all built as “islands.” To trade across them requires centralised technology, protocol and legal integrations with each.

“That is because finance, lending, borrowing, swapping and issuance are all done in these little islands of technology that require legal contracts and Excel spreadsheets sent over email as the connective tissue,” says Ridyard. “APIs are improving this process, but there is no such thing as a standard API; Plaid became a $5.3 billion company for essentially this reason.”

By being decentralised and interoperable from day one, it’s this ability to trade across ledgers and asset classes programatically that DeFi systems such as Radix want to provide.

“This is the core and key difference for assets and services that are built on public ledgers,” explains Ridyard. “As soon as they are built on Radix, they become interoperable. I can seamlessly and programmatically move my assets from the services of one application, built by one company and team, to that of another, built by a different company and team, but issued and launched on the same decentralised public ledger. The public ledger acts as an interoperable platform for many startups to experiment and build better versions of existing products (such as stock exchanges) or entirely new products (such as continuous function market makers) that are just not possible with the current systems.”

Worth noting, Ridyard says that from a consumer point of view, the products and services aren’t likely to change much in their appearance — they’ll still be accessed via mobile apps and will probably be offered via regulated companies as they are today. Instead, he says the consumer-facing upsides will be speed, higher rates on deposits and the seamless ability to swap between asset types without needing to go into cash as the interim asset.

Adds the Radix CEO: “I should also stress that decentralised finance is not about moving existing banks onto public ledgers. It is about unbundling of banking services (borrowing, lending, investment) into applications that can all interoperate on a single public network. Banks are like newspapers coming into the internet age, some will make the transition, but not all.”

Cue statement from LocalGlobe’s Saul Klein (for posterity, if nothing else): “I see the same revolutionary potential in the Radix team as I did with the Skype and Netscape teams at the birth of the internet. We’re excited to join them at the start of a new decentralised network revolution.”

*Radix has two main legal entities: Radix DLT Ltd and the Radix Foundation. Since inception, both have received funding in different forms. The Radix Foundation is a not-for-profit company limited by guarantee, registered in the U.K., and was created to promote the long-term interests of the Radix Public Network as well as help manage the Radix community and ecosystem. Between 2013 and 2017, people from the Radix Community contributed 3,000 BTC in exchange for 3 billion RADIX tokens issued by the Radix Foundation. These tokens arguably have value as they’re needed to pay the transaction fees to use the Radix protocol.