Cendana has raised a $30 million ‘fund of funds’ for VCs managing $15 million or less

Cendana Capital, a San Francisco-based fund of funds manager, has amassed stakes in more than 100 venture firms since launching in 2010. For the most part, it did this by focusing on managers who are raising funds of $100 million or less in capital, even foregoing stakes in beloved outfits like Forerunner Ventures and Uncork Capital as their assets under management ballooned well beyond that amount.

Yet as the market changed, however, Cendana founder Michael Kim began to play with that formula. Last spring, for example, when he closed on $278 million in new capital commitments, he said planned to invest in the seed-stage managers he has always backed, but that he planned to funnel a small amount of capital to pre-seed managers raising $50 million or less, as well as to invest in a sprinkling of international managers.

Now Kim is back with a brand-new fund that sees him covering even more ground. Called Cendana’s Nano fund, it has raised $30 million in capital from existing Cendana backers to invest in up to 12 investment managers who are piecing together funds of $15 million or less capital. There are simply too many smart people right now making smaller bets for Cendana not to make the move, he suggests. We talked with Kim about the fund — and the changing landscape more broadly — in a chat has been edited lightly for length.

TC: What’s the thesis behind this Nano fund?

MK: The seed market has evolved a lot over the last 18 months to 24 months. You have this whole world of Twitter VC, meaning people who have a lot of strong opinions and an operator-investor perspective, but who may not have substantial funds behind them. You have solo capitalists like Lachy Groom and Josh Buckley, who’ve gone out and raised hundreds of millions of dollars. You also have the AngelList rolling funds. I think there are probably more than 100 rolling funds out there, and probably 95% of them are [headed by] people who are working at the big tech or private tech companies, and it’s more of a vehicle of convenience for their friends to invest alongside them.

TC: And you think they need more capital than is floating out there already?

MK: I think we are the only institutional LP that is focused at this stage, because as you know, many of the funds of funds and university endowments and family offices have to write big checks, so they’re not going to be investing a little bit into a tiny $10 million fund.

TC: What are you looking for exactly?

MK: The goal is to find the next Lowercase Capital. Not everyone knows this, but Chris Sacca’s first fund was $8 million and it returned 250x. Manu Kumar of K9 Ventures — his first fund was $6.25 million and returned 53x. So you can generate substantial alpha with these smaller funds.

Historically, we would meet with fund managers, and when they said, ‘We’re going to raise a $10 million to $15 million fund,’ we were like,’Okay, sounds interesting. Let’s talk when you’re raising your second fund.’ But we realized that we’re missing out an entire segment of the market. So Nano was created to capture that.

TC: Why draw a line in the sand at $15 million?

MK: First, if you’re going to be running a $100 million seed fund, you have to be writing $1.5 million to $2 million checks, and that’s a super competitive space right now, because not only are there other seed funds but also a lot of firms — Founders Fund, Sequoia Capital, Lightspeed, General Catalyst — that are very active at the seed stage. We’re coming across a lot of these managers who want to stay small, because by writing $300,000 to $400,000, they’re not competing against Sequoia or Forerunner Ventures; they’re just sliding into the round.

TC: Do you worry they will just get washed out of that investment later through subsequent checks from bigger players?

MK: Right now, we now have more than 100 portfolio funds within Cendana, and we did some data analysis. We looked at the fund size, and then the average ownership of each fund. And it turns out there’s a baseline of about 15% of a fund, meaning if you’re a $100 million fund, the average ownership stake [you have in your startups] is around 15%. If you’re a $50 million fund, the average ownership is about 7.5%.

We then looked at performance across our fund managers, and it turns out that of funds with $50 million in capital — our better-performing funds — have more ownership than 7.5%. They have more like 10% to 12%. Now, when you look at these tiny funds, if you’re a $15 million fund, 15% of that [should equate to] 2.2% ownership, but we are seeing that these tiny funds are actually getting more like 4% to 5% ownership. They’re punching above their weight because of who is involved.

TC: Who have you backed so far?

MK: The first one is Form Capital, a fund from Bobby Goodlatte and Josh Williams. Both were early at Facebook; Bobby led the team that designed Facebook Photos and was later an [entrepreneur-in-residence] at Greylock. Josh cofounded Gowalla (acquired by Facebook).

TC: How big a fund are they raising and how much are you giving them?

MK: They raised a $15 million fund, and our strategy is to [account for] 20% of [each of these funds], so we wrote them a $3 million check.

The second fund manager is Jeff Morris Jr.; he runs a fund called Chapter One. He was a senior product guy at Tinder and and an active angel, and he raised a $10 million fund last year into which we wrote a $2 million check.

TC: And the third?

MK: The third manager hasn’t closed the fund, so I can’t disclose his name, but he was a very early employee at Uber and ran their data teams.

The last is an interesting example because this person could probably go out and raise $100 million, but to my point about not wanting to compete against everyone in the world in writing a big check, he’s content to write [sub $500,000] checks into interesting data analytics and AI and machine learning companies, and everybody wants him involved because of his experience and his network of data scientists worldwide.

TC: When Chris Sacca dove in, it was his full-time job, I think. Do you care if these managers are focused solely on investing?

MK: No. With Nano we’re investing in people who may actually have a day job, which would not be a fit for our main fund, but with our Nano fund, our aperture is wider. We welcome anyone out there looking to manage $15 million or less to reach out.

TC: Well, to be clear, you have some criteria. What is it?

MK: No matter who we invest in, they have to have investment experience and an investment track record. What we really look for at the end of the day is a person who has some sort of advantage — whether it’s domain expertise or networks. So you could be an amazing computer scientist in Pittsburgh at Carnegie Mellon and if you’ve made some investments [we’d talk with you]. It could be someone coming out of Stripe or PayPal or Facebook or an entrepreneur in Atlanta.

TC: A $30 million fund of funds is going to get committed pretty fast in this market. Is the plan to raise maybe one every year?

MK: We have an incredible top of the funnel, and as you’re alluding, we’re going to be inundated. But we walk in there and try to meet with everybody.

We’re also in discussions with our existing fund managers to create a nano fund for [some of] them. So, you know, imagine one of our fund managers, running a $100 million fund. Why not create a $10 million nano vehicle with them where they could write $250,000 to $500,00 check? They don’t want to fill up their fund with these small checks, but you could see how, if they were to create this smaller vehicle, it could be very interesting for them for a returns perspective.

TC: So you’d write them a check for a third of this nano fund . . .

MK: And their LPs would fill in the rest. I’m sure they’d be excited to do it.

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Spain’s Glovo picks up $528M as Europe’s food delivery market continues to heat up

On the heels of Deliveroo raising more than $2 billion ahead of its debut on the London Stock Exchange this week, another hopeful in the food delivery sector has closed a super-sized round. Glovo, a startup out of Spain with 10 million users that delivers restaurant take-out, groceries and other items in partnership with brick-and-mortar businesses, has picked up a Series F of $528 million (€450 million).

Glovo aims to become the market leader in the 20 markets in Europe where it is live today, in part by expanding its “q-commerce” service — the delivery of items to urban consumers in 30 minutes or less — and it will be using the money to double down on that strategy, including hiring up to 200 more engineers to work in its headquarters in Barcelona, as well as hubs in Madrid and Warsaw, Poland.

This is a milestone funding round not just for the company, but its home country: it marks the largest-ever round raised by a Spanish startup.

“We started in Spain, where you have access to far less capital than other countries in Europe. We do more with less and that’s made us leaner,” said Sacha Michaud, the co-founder of the company, in an interview this week. “We’ve got our own strategy and it seems to be working.”

The funding is being led by Lugard Road Capital and Luxor Capital Group (the former is an affiliate of the latter), with Delivery Hero, Drake Enterprises and GP Bullhound also participating. All are previous backers of Glovo.

“We’re thrilled to have the continued backing of Luxor Capital Group and all of our existing investors. Over the last few months, we’ve moved very, very quickly but our vision remains unchanged,” said Oscar Pierre, Glovo’s other co-founder and CEO, in a statement. “This investment will allow us to double-down in our core markets, accelerate our leadership position in places where we are already very strong and continue to expand our excellent Q-Commerce division, as well as bring new innovations to our unique multi-category offering to extend more choice to our customers.”

Valuation is not being disclosed with this round, but when it raised its $166 million Series E in December 2019 — just ahead of the Covid-19 pandemic that truly changed the face of delivery services in many parts of the world — the company had a valuation of $1.18 billion, according to PitchBook data. Michaud would only confirm to me that it was “definitely an up-round,” which would put it at at least $1.7 billion, based on that estimate.

The funding comes on the heels of a very busy period of fundraising in the sector as investors the race to get in on the delivery of hot food, groceries and other necessities in Europe — a fast-growing business model in the most normal of times that blasted off in the last year as an essential service for consumers confined to their homes, often by government mandate, to stave off the spread of the coronavirus.

Just in the last few days, Gorillas in Berlin raised $290 million on a $1 billion+ valuation for its on-demand grocery business; Everli out of Italy (formerly called Supermercato24) raised $100 million (Luxor is one of its investors too); and reportedly Zapp in London has also closed $100 million in funding. Earlier in March, Rohlik out of the Czech Republic bagged $230 million.

Amid all those private raises, we also had Deliveroo’s IPO yesterday, which — as IPOs so often do — exposed some of the trickier aspects of the business. The company — which is backed by Amazon, a formidable player in food and essentials delivery — easily raised the most of money of the month — $2.1 billion in the private placement ahead of the listing — but then proceeded to slog out its debut on the LSE with shares progressively slumping throughout the day and ending up significantly lower than its offer price.

Areas of concern around Deliveroo serve as cautionary tales for all of them: not just how you price an IPO and what allocation you give to future shareholders, but also the unit economics of your business model, the price of competition, and where labor costs will fit into the bigger picture (and the bottom line).

“We’ve got our own road and we’re doing a pretty good job,” Michaud said in an interview when the subject of Deliveroo IPO came up. “We’re still David versus the Goliath out there.” Part of that for Glovo has also included some decisions made on rationalizing its own business: the company sold off its Latin American operations in a $272 million deal to its backer Delivery Hero last year to focus solely on Europe and adjacent geographies.

But even before the Series F being announced today, Glovo itself was one of the companies raising money for specific purposes, and those efforts point to how it plans to proceed in the weeks and months ahead on its own growth plan.

In January Glovo announced a strategic deal with Swiss real-estate firm Stoneweg, which pitched in €100 million ($117 million), to co-develop a number of “dark stores” in areas where Glovo already operates to improve its distribution networks and help speed up its delivery times.

It’s part of a fulfillment operation that complements the hot food that Glovo sells on behalf of its restaurant partners: the dark stores are stocked with items Glovo sells on behalf of other companies such as Carrefour, Continente, and Kaufland, as well as a lot of independent retailers, companies that have not built their own (costly) B2C delivery networks but have wanted to provide that service to consumers nonetheless.

Although the company today promises deliveries in 29 minutes, in many markets, Michaud said, it’s already averaging 10-15 minutes and the aim is to make that the norm everywhere. This is in part an operational challenge, but also a technical one: this is one reason why the company is adding in more engineers and building out its platform.

Restaurant delivery of hot food remains the biggest category of business for Glovo, he added, but the company has seen a surge of demand for the other kinds of items and is expanding that accordingly.

“With Covid, we’ve been delivering pretty much anything you want in your city,” Michaud said. “Covid has been an accelerator and has educated the market. Instead of crossing city and spending time waiting and buying items, anything I want and Glovo will bring it to me. Why wouldn’t I do this?” He believes the more traditional rush of people doing in-person shopping is “definitely not gong to come back,” with groceries to be in the same position as restaurants in a couple of years. That’s leading the company to expand into more areas: “clothing, fashion and pharmacy, flowers. Hopefully we’re now in a good position to do that.”

That position, of course, will involve an important component of this three-sided marketplace. In addition to the restaurants and retailers that partner with Glovo, and the consumers who use the app to buy and get things delivered, there are the delivery people and couriers that do the first- and last-mile work to get the goods into the system, and then to customers. The couriers in the system work today largely on a freelance basis, often balancing jobs on competing apps, and their efforts, and how they are compensated for them, have been the focus of a lot of scrutiny both here and in the U.S.

In short: the companies say couriers have an amazing opportunity to earn money; but many couriers and organizations supporting their cause believe the reality to be far from that.

That has played out with a number of very public protests and is starting now to trickle into formal legal moves to ensure these workers’ rights. Apart from the ethical angle here, it’s of concern also to investors focused more on the bottom line and the costs that they might mean for businesses that already work on thin margins (or in many cases, losses). Indeed, it’s very likely that these issues formed part of what weighed on Deliveroo in its public listing and poor debut.

This has also been playing out for Glovo very directly. The company lost a supreme court case in Spain in September last year, where the court rejected its attempt to classify a courier as self-employed rather than an employee. Now, the country is working on more formal reforms to put in place guidelines and requirements for companies to mandate benefits to those workers. That will take some time to play out, and in the meantime there are also wider European efforts underway to harmonize the approach across all countries in the EU.

This is a complicated issue, but essentially Glovo advocates to keep the couriers as self-employed, but supports the idea of benefits provided to those workers nonetheless by those taking their services (such as Glovo), and it wants the approach to be Europe-wide.

“We think there needs to be more social rights for workers,” Michaud said. “We believe in a freelance model with additional social rights that companies like Glovo would give them, but in many countries the regulations are not there for that to happen.”

But it’s also not all cut-and-dry since it doesn’t support some of the other aspects of that labor reform. “We think the rigid strict tables and minimum wages are not the way to fix the problem,” he added, explaining that the flexibility of the business model does not support that. In short, it’s negotiating and hoping that it can claw in some expenses while conceding others.

Investors seem ready for these kinds of questions and their longer-term impact, given that the trade-off for them is a foothold in what has been one of the most successful tech efforts in the region.

“Our investment in Glovo reflects our commitment to a company and leadership team that continues to innovate and disrupt in the on-demand delivery space,” said Jonathan Green, founder and porfolio manager at Lugard Road Capital, in a statement. “As a long-term investor in Glovo, we are excited to watch the company continue to delight its customers through its unique multi-category offering, amidst an enormous market opportunity in both existing and new geographies.”

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Samsung Galaxy M21 gets One UI 3.1 Core update

The Samsung Galaxy M21 announced last March with Android 10-based One UI 2.0 received One UI 2.1 in September and One UI 2.5 in November. The smartphone then picked up the Android 11-based One UI 3.0 update in January, and now it's receiving the One UI 3.1 Core update. The new firmware includes the March 2021 Android patch and improves the Galaxy M21's security while also improving the camera and overall device performance. But aside from that, you can also expect it to bring new editing tools, Eye Comfort Shield, and improved stock apps to the smartphone. Samsung Galaxy M21 One...

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Celonis announces significant partnership with IBM to sell its process mining software

Before you can improve a workflow, you have to understand how work advances through a business, which is more complex than you might imagine inside a large enterprise. That’s where Celonis comes in. It uses software to identify how work moves through an organization and suggests more efficient ways of getting the same work done, also known as process mining

Today, the company announced a significant partnership with IBM where IBM Global Services will train 10,000 consultants worldwide on Celonis. The deal gives Celonis, a company with around 1200 employees access to the massive selling and consulting unit, while IBM gets a deep understanding of a piece of technology that is at the front end of the workflow automation trend.

Miguel Milano, chief revenue officer at Celonis says that digitizing processes has been a trend for several years. It has sped up due to COVID, and it’s partly why the two companies have decided to work together. “Intelligent workflows, or more broadly spoken workflows built to help companies execute better, are at the heart of this partnership and it’s at the heart of this trend now in the market,” Milano said.

The other part of this is that IBM now owns Red Hat, which it acquired in 2018 for $34 billion. The two companies believe that by combining the Celonis technology, which is cloud based, with Red Hat, which can span the hybrid world of on premises and cloud, the two together can provide a much more powerful solution to follow work wherever it happens.

“I do think that moving the [Celonis] software into the Red Hat OpenShift environment is hugely powerful because it does allow in what’s already a very powerful open solution to now operate across this hybrid cloud world, leveraging the power of OpenShift which can straddle the worlds of mainframe, private cloud and public cloud. And data straddle those worlds, and will continue to straddle those worlds,” Mark Foster, senior vice president at IBM Services explained.

Celonis pushes beyond process mining into automated workflow tooling

You might think that IBM, which acquired robotic process automation vendor, WDG Automation last summer, would simply attempt to buy Celonis, but Foster says the partnership is consistent with the company’s attempt to partner with a broader ecosystem.

“I think that this is very much part of an overarching focus of IBM with key ecosystem partners. Some of them are going to be bigger, some of them are going to be smaller, and […] I think this is one where we see the opportunity to connect with an organization that’s taking a leading position in its category, and the opportunity for that to take advantage of the IBM Red Hat technologies…” he said.

The companies had already been working together for some time prior to this formal announcement, and this partnership is the culmination of that. As this firmer commitment to one another goes into effect, the two companies will be working more closely to train thousands of IBM consultants on the technology, while moving the Celonis solution into Red Hat OpenShift in the coming months.

It’s clearly a big deal with the feel of an acquisition, but Milano says that this is about executing his company’s strategy to work with more systems integrators (SIs), and while IBM is a significant partner it’s not the only one.

“We are becoming an SI consulting-driven organization. So we put consulting companies like IBM at the forefront of our strategy, and this [deal] is a big cornerstone of our strategy,” he said.

IBM CEO Arvind Krishna wants to completely transform his organization

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Microsoft shuts down Cortana app on Android and iOS

Microsoft’s Cortana apps for Android and iOS have officially reached their defunction on March 31 2021. Microsoft’s voice assistant alternative to Google Assistant and Siri will continue to function on Windows 10. As explained in Microsoft’s Cortana support page, the mobile app is no longer supported as of Wednesday this week. Lists and reminders will no longer be available through Cortana apps on mobile. These reminders and lists can still be accessed through Cortana on Windows 10 and Microsoft’s To Do apps, available for both Android and iOS. The shutdown was originally...

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Huawei posts strong revenue in 2020 despite US ban

Huawei’s 2020 annual report has been published and the company reports that the numbers are in line with what was forecasted: “marginal growth”. Huawei’s sales revenue weighed in at CNY 891.4 billion ( $136.7 billion) with net profit CNY 64.6 billion ($9.9 billion). Revenue is up 3.8% YoY and profits are up 3.2% YoY. This is despite US sanctions that were set in 2019 by the Trump Administration. Over the past year, we’ve held strong in the face of adversity. We’ve kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recover and social...

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Xiaomi Mi 11 Ultra stars in its very own video teardown

This Monday Xiaomi unveiled its top of the line flagship smartphone for 2021, the Mi 11 Ultra, alongside many other products. The Ultra is the successor of the widely praised (including by us) Mi 10 Ultra from 2020, which sadly never got an international release. The Mi 11 Ultra rectifies that error, albeit for an eye-watering price. If you were wondering whether what's inside the handset might warrant all that dough, a Chinese YouTube channel has the answer for you, in the form of a video teardown. Obviously it's in Chinese, but you can see what's important - and you may also want to try...

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ZTE Watch GT and LiveBuds SE unveiled

ZTE held a launch event in China earlier today where we saw the debut of its S30 series phones. Alongside those, ZTE announced its Watch GT smartwatch and a new pair of TWS earphones called LiveBuds SE. ZTE Watch GT The Watch GT comes with a traditional round watch casing and a 1.2-inch AMOLED display. The lightweight aluminum alloy build and helps the Watch GT tip the scales at just 30 grams. The casing features a brushed look while the silicone watch straps come in black, gray, orange, yellow and blue colors. Watch GT can track your heart rate as well as blood oxygen levels,...

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Apple invests $50M into music distributor UnitedMasters alongside A16z and Alphabet

Independent music distribution platform and tool factory UnitedMasters has raised a $50M series B round led by Apple. A16z and Alphabet are participating again in this raise. United Masters is also entering a strategic partnership with Apple alongside this investment. 

If you’re unfamiliar with UnitedMasters, it’s a distribution company launched in 2017 by Steve Stoute, a former Interscope and Sony Music executive. The focus of UnitedMasters is to provide artists with a direct pipeline to data around the way that fans are interacting with their content and community, allowing them to connect more directly to offer tickets, merchandise and other commercial efforts. UnitedMasters also generally allows artists to retain control of their own masters.

Neither of these conditions are at all typical in the music industry. In a typical artist deal, recording companies retain all audience and targeting data as well as masters. This limits an artist’s ability to be agile, taking advantage of new technologies to foster a community. 

While Apple does invest in various companies, it typically does so out of its Advanced Manufacturing Fund to promote US manufacturing or strategically in partners that make critical components of its hardware like silicon foundries or glass manufacturing. Apple does a lot more purchasing than investing, typically, buying a company every few weeks or so to supplement one product effort or another. UnitedMasters, then, would be a relatively unique partnership, especially in the music space. 

I spoke to UnitedMasters CEO Steve Stoute about the deal and what it means for the businesses 1M current artists and new ones. Stoute credits Apple executive Eddy Cue having a philosophy aligned with the UnitedMasters vision with getting this deal done. 

“We want all artists to have the same opportunity,” says Stoute. “Currently, independent artists have less opportunity for success and we’re trying to remove that stigma.”

This infusion, Stoute says, will be used to hire talent that are mission oriented to take UnitedMasters global. They’re seeking local technical talent and artists talent to build out the platform worldwide. 

“Every artist needs access to a CTO,” Stoute says. “Some of the value of what a manager is today for an artist needs to be transferred to that role.”

UnitedMasters wants to provide that technical edge at scale, allowing artists to build out their fanbase at a community level.

Currently, UnitedMasters has deals with the NBA, ESPN, TikTok, Twitch and others that allow artists to tap big brand deals that would normally be brokered by a label and manager. It also has a direct distribution app that allows publishing to all of the major streaming services. Most importantly, they can check stream, fan and earnings data at a glance. 

“Steve Stoute and UnitedMasters provide creators with more opportunities to advance their careers and bring their music to the world,” said Apple’s Eddy Cue in a release statement. “The contributions of independent artists play a significant role in driving the continued growth and success of the music industry, and UnitedMasters, like Apple, is committed to empowering creators.”

“UnitedMasters has completely transformed the way artists create, retain ownership in their work, and connect with their fans,” said Ben Horowitz, Co-Founder and General Partner of Andreessen Horowitz in a release. “We are excited to work with Steve and team to build a better, bigger, and far more profitable world for musical artists.” 

We are currently at an inflection point in the way that artists and fans connect with one another. Though there have been seemingly endless ways for artists to get their messages out or speak to fans using social media and other platforms, the actual business of distributing work to a community and making money from that work has been out of their hands completely since the beginning of the recording industry. Recent developments like NFTs, DAOs and social tokens, as well as an explosion of DTC frameworks have begun to re-write that deal. But the major players have yet to make the truly aggressive strides they need to in order to embrace this ‘artist centric’ new world. 

The mechanics of distribution have been based on a framework defined by DRM and the DMCA for decades. This framework was always marketed as a way to protect value for the artist but was in fact architected to protect value for the distributor. We need a rethinking of the entire distribution layer.

As I mentioned when reporting the UnitedMasters + TikTok deal, it’s going to be instrumental in a more equitable future for artists:

It’s beyond time for the creators of The Culture to benefit from that culture. That’s why I find this UnitedMasters deal so interesting. Offering a direct pipeline to audiences without the attendant vulture-ism of the recording industry apparatus is really well-aligned with a platform like TikTok, which encourages and enables “viral sounds” with collaborative performances. Traditional deal structures are not well-suited to capturing viral hype, which can rise and fall within weeks without additional fuel.

In music, Apple is at the center of this maelstrom along with a few other major players like Spotify. One of the big misses in recent years for Apple Music, in my opinion, was Apple’s failure to turn Apple Music Connect into an industry-standard portal that allowed artists to connect broadly with fans, distribute directly, sell tickets and merchandise but — most importantly — to foster and own their community. 

A UnitedMasters tie up isn’t a straight line to that goal, but it’s definitely got the ingredients. I’m looking forward to seeing what this produces. 

Image Credits: Steve Stoute

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Accel-backed mobile money platform NALA to start offering remittance services to East Africa

According to a McKinsey report, the total number of mobile money services worldwide was 282 in 2017, with more than half of those operating in sub-Saharan Africa. 

In 2020, these numbers increased significantly, but the ratio remained similar.  In 96 countries, there are 310 live mobile money services, according to a GSMA report. Out of that number, 171 are from Africa, while 157 are in sub-Saharan Africa.

In Tanzania, mobile money services can be relatively difficult to use due to unstable internet and high service fees. Benjamin Fernandes noticed this as a national television host while building a mobile money service to enable people to pay for TV subscriptions in East Africa back in 2011. 

Six years later, he would start his own mobile money and wallet aggregator, NALA, to solve these issues. Its first mobile application allowed users to make mobile money payments and utilize mobile banking without an internet connection. The business grew to 250,000 users in over a year after its official launch.

Nala has built a hassle-free, offline mobile money payment platform for Africa

Last year, the WorldBank predicted a sharp decline of international remittances to Africa. But even though Africa is still the most expensive region to send money to with averages of 10.6% in transaction fees, the opposite happened. There was an increase in remittance activity on the continent.

Kenya, for instance, had its highest-ever inbound remittance at $3 billion, while WorldRemit acquired Sendwave in August 2020 for $500 million and Mama Money claimed to have grown 500% within the year.

NALA also noticed an uptick in remittance requests where 1 in 7 users wanted to receive money internationally. This happened despite not being in that business at the time. It’s not hard to see why: Presently, over 70% of money sent to Sub-Saharan Africa is transacted through physical stores. When many over-the-counter services were suspended or limited due to coronavirus restrictions, people were left with expensive, unreliable or hard-to-access alternatives.

Combined with the increasing trend for digital-first financial services and listening to some users’ requests, NALA began testing international money transfers in August 2020 to facilitate payments from the U.K. to Kenya, Uganda and Tanzania. By building a multi-currency ledger where people can send money from the U.K. to Tanzania and back to the U.K., Fernandes says NALA can build a Wise for Africa.

“I believe international payments are only 1% built today. Until you can send money both ways seamlessly, our work isn’t done,” Fernandes told TechCrunch. “We believe African markets should be ‘sender’ markets, too; there is a lot of trade happening with other countries, and most of the money is sent via costly bank wires or at physical stores. It doesn’t need to be this way; it’s time for something better.” 

Various platforms are trying to achieve this, but none specifically targets the East African region. That is NALA’s play, according to the CEO. “This is where we see a big advantage for us. We are local, we understand mobile money, we built bill payments on our previous product, and this is an extension of that,” he added.

Benjamin Fernandes (CEO, Nala)

Since graduating as the first East African company from Y Combinator in 2019, NALA has brought other interesting investors on board to support its mission. The most notable is Accel, which has been kept under wraps for some time. The VC firm rarely makes deals on the continent and has only invested in NALA and Egypt’s Instabug. Other backers include NYCA Partners and angel investors like Shamir Karkal (co-founder of Simple), Peeyush Ranjan (former Flipkart CTO and current head of Google Payments), and Thomas Stafford (DST Global). 

NALA also enlisted the services of Nicolas Esteves, who was the VP of engineering at Osper and had a stint at Monzo to become the company’s CTO which, according to Fernandes, will considerably improve the company’s chances of achieving its goal. “When we brought someone of his calibre on our team, it just opened up the doors of what we could accomplish because he has built multi-currency ledgers across different large companies.”   

For now, though, the company will be rolling out a beta product next month for U.K.-based customers sending money to Kenya and Uganda (Tanzania will come later). The company claims that the service will support instant payments to all major mobile money accounts and says it is closing some banking partnerships that will allow it to facilitate money transfers from East Africa to the U.K.

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Realme V13 5G is official with Dimensity 700 and a big battery

Realme introduced the GT Neo today with a Dimensity 1200 chipset, but it wasn’t the only phone on the stage - we also saw the launch of the Realme V13 5G. This new affordable midranger has some specs to get enthusiastic about - a big 5,000mAh battery, 90Hz refresh rate and ample storage for the class. The chipset of the Realme V13 5G is Dimensity 700 - an SoC, built on the 7nm process technology, and having two CPU cores running at 2.2 GHz (the other six are at 1.8 GHz). It is coupled with 8GB RAM and either 128GB or 256GB storage. On top of that, there is also a dedicated microSD...

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ZTE S30 Pro comes with SD768G and 144Hz AMOLED display, the S30 and S30 SE switch to Dimensity and LCD

ZTE unveiled a trio of mid-range 5G phones with the new S30 series. Besides next gen connectivity, the three phones share a passion for display quality, photography and fast charging, it's just that some are better at those things than others. ZTE S30 Pro The clear leader of the pack, the ZTE S30 Pro derives its power from a Snapdragon 768G chipset. It comes with 8GB of RAM and 256GB storage as standard and runs MyOS 11, a ZTE skin over Android 11 (all three phones run the same software). The S30 Pro is powered by a Snapdragon 768G with a heat pipe that keeps it cool A heat...

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Kaya VC launches its new $80M fund, focusing on Prague, Warsaw and the CEE region

Kaya VC’s new €72 million ($80m) fund will focus on startups in Prague, Warsaw and the wider CEE region. Previously called Enern, the Central and Eastern European VC — which, historically, started out investing in wind-farms and ended up invested in software — has changed its name to better reflect its modern focus. The firm will also back startups “at any stage” of funding. LPs in the fund include the EIF and a number of successful entrepreneurs from the region.

This is the team’s fourth fund, and together with the previous funds, the AUM is around €250m. The fund has invested in 27 companies with the latest investments into B2B marketplaces, healthtech and blockchain. 

The decade-old Prague-based VC (“KAYA” will be the official naming format) has previously invested in Booksy (raised $70 million in January 2021), Twisto (€16 million this year), DocPlanner (€80m in 2019), and Rohlik ($230m this year). Kaya previously participated in liquidity events for Skype, Wise (formerly TransferWise) and Bolt, UiPath which recently raised $750 million at a $35 billion valuation ahead of an IPO.

Kaya says it will be sector agnostic, with partners following some personal passions: Tomas Obrtac on agri-tech; Pavel Mucha on next-generation consumer experiences; Tomas Pacinda on fintech, and Martin Rajcan focuses on energy transition. All other areas of tech will be looked at. Similar to funds such as Point Nine in Berlin, Kaya says it is an ‘equal partnership’ meaning each partner can make decisions on what to back.

The firm plans to be able to write the first cheque and is also backing super-early ‘studio projects’ which have gone on to raise subsequent funding rounds.

Pavel Mucha, partner at Kaya VC, commented in a statement: “When I initially started investing in local startups in Prague and Warsaw, it was because there was a need to work with people to build something valuable that didn’t exist already. Over the past 10 years, we’ve seen this sector grow and mature, and with that our strategy of backing intrepid founders who are making a difference from Booksy’s Stefan Batory to Rohlik’s Tomáš Čupr.”

Kaya is also part of the Included VC, network, a mentor network for underrepresented groups such as women and people of color. Mucha told me: “We’ve hired through their program, been closely involved and big supporters. We think it’s a great addition to the ecosystem within Europe, and hope to do more. It’s definitely a very meaningful initiative we stand fully behind.”

Martin Rajcan, partner at Kaya VC, added: “Founders coming out of Central and Eastern Europe are globally-orientated, have strong technical skills, and an unmatched hunger for success. It’s these strong fundamentals paired with a next-level intensity that makes them so exciting to work with and we want to support such talent in any way we can. With partners, venture partners, advisors, and scouts across Europe, we’re in a unique position to support founders in the diaspora outside of core cities such as Prague and Warsaw.” 

In Turkish the word Kaya means ‘rock’, in Japanese, it’s ‘sanctuary’. Whatever the case, Kaya is in a good position to take advantage of the burgeoning startups in the CEE region. According to Dealroom there has been 5x more foreign investment in the CEE region than in 2015.

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Realme GT Neo arrives with a Dimensity 1200 chipset in a familiar body

Realme GT Neo just made its official debut with a Dimensity 1200 chipset and bold design of the back panel. The phone is almost identical to the Realme GT 5G, down to the measurements, cameras and screen. The Realme GT Neo is built around a 6.43” Super AMOLED screen with a punch hole in the right corner. It has Full HD+ resolution, 120Hz refresh rate and 360Hz touch sampling rate. The 6nm Dimensity 1200 chipset by Mediatek is coupled with three RAM options - 6GB, 8GB and 12GB - and two UFS 3.1 storage choices - 64GB and 128GB. The Realme GT Neo has a 64MP main shooter on the...

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Cryptocurrency wallet and blockchain tech startup imToken raises $30 million Series B

imToken, the blockchain tech startup and crypto wallet developer, announced today it has raised $30 million in Series B funding led by Qiming Venture Partners. Participants included returning investor IDG Capital, and new backers Breyer Capital, HashKey, Signum Capital, Longling Capital, SNZ and Liang Xinjun, the co-founder of Fosun International.

Founded in 2016, the startup’s last funding announcement was for its $10 million Series A, led by IDG, in May 2018. imToken says its wallet for Ethereum, Bitcoin and other cryptocurrencies now has 12 million users and over $50 billion in assets are currently stored on its platform, with total transaction value exceeding $500 billion.

Ethereum wallet imToken raises $10M Series A from IDG to expand in the US, Asia and Africa

The company was launched in Hangzhou, China, before moving to it current headquarters to Singapore, and about 70% of its users are in mainland China, followed by markets including South Korea, the United States and Southeast Asia.

imToken will use its latest funding to build features for “imToken 3.0.” This will include keyless accounts, account recovery and and a suite of decentralized finance services. It also plans to expand its research arm for blockchain technology, called imToken Labs and open offices in more countries. It currently has a team of 78 people, based in mainland China, the United States and Singapore, and expects to increase its headcount to 100 this year.

In a press statement, Qiming Venture Partners founding managing partner Duane Kuang said, “In the next ten to twenty years, blockchain will revolutionize the financial industry on a global scale. We believe that imToken is riding this trend, and has strongly positioned itself in the market.”

Crypto boom continues as Chainalysis raises $100M, doubles valuation to over $2B

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Remote-controlled forklifts have arrived in France, courtesy of Phantom Auto

Global logistics company Geodis has tapped startup Phantom Auto to help it deploy forklifts that can be controlled remotely by human operators located hundreds, and even thousands, of miles away.

The aim is to use the technology to reduce operator fatigue — and the injuries that can occur as a result — as well as reduce the number of people physically inside warehouses, according to the Geodis. The use of remotely operated forklifts won’t replace employees — just where they work. It’s that detail that Geodis, which often has operations outside of city centers, finds appealing.

Stéphanie Hervé, chief operating officer for Geodis’ Western Europe, Middle East and Africa operations, told TechCrunch that use of the remotely operated forklifts will help the company attract a new group of workers, including those with physical disabilities. The intent isn’t to outsource workers to other countries, but to find more workers within a region, according to the company.

Under the partnership, Phantom Auto’s remote operation software is integrated into KION Group forklifts. The forklifts are equipped with 2-way audio so that remote operators, which Geodis also describes as ‘digital drivers’, can communicate with their co-workers inside the warehouses.

Image Credits: Geodis

Phantom Auto and Geodis have been working together for more than two years via pilot program conducted in Levallois and Le Mans, France. This announcement signals a deeper relationship and one that could be a boon for Phantom Auto.

The initial deployment is focused on France, Hervé said. For now, Phantom Auto’s software will be used to remotely operate forklifts in the initial pilot sites of Levallois and Le Mans and will then expand throughout the country over the next year. Geodis employees at the two initial sites have already been trained to remotely operate the forklifts, Phantom Auto co-founder Elliot Katz said.  

Geodis’ footprint extends far beyond the boundaries of France. The company has some 165,000 clients in 120 countries. They own 300 warehouses, which are located throughout the world, and also provide third-party logistics services to thousands of other customers, including Amazon and Shopify.

Phantom Auto’s tie-up with Geodis is another example of the company seeking business outside of the fledging autonomous vehicle industry, which was its initial focus. The company, founded in 2017, developed vehicle-agnostic software to remotely monitor, assist operate fleets of unmanned vehicles such as forklifts, robots, trucks and passenger vehicles.

The company is adjacent to the AV industry. While AV operators rarely talk publicly about the need for teleoperations, it is viewed as a necessary support system to commercially deploy robotaxis and for other AV applications. But as autonomous vehicle developers pushed back timelines to commercialize the technology, Phantom Auto expanded into new areas.

Phantom Auto, which has raised $25 million to date, expanded a logistics business targeting sidewalks, warehouses and cargo yards, all the places where autonomy and teleoperation are being deployed today.

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Facebook gets a C – Startup rates the ‘ethics’ of social media platforms, targets asset managers

By now you’ve probably heard of ESG (Environmental, Social, Governance) ratings for companies, or ratings for their carbon footprint. Well, now a UK company has come up with a way of rating the ‘ethics’ social media companies. 
  
EthicsGrade is an ESG ratings agency, focusing on AI governance. Headed up Charles Radclyffe, the former head of AI at Fidelity, it uses AI-driven models to create a more complete picture of the ESG of organizations, harnessing Natural Language Processing to automate the analysis of huge data sets. This includes tracking controversial topics, and public statements.

Frustrated with the green-washing of some ‘environmental’ stocks, Radclyffe realized that the AI governance of social media companies was not being properly considered, despite presenting an enormous risk to investors in the wake of such scandals as the manipulation of Facebook by companies such as Cambridge Analytica during the US Election and the UK’s Brexit referendum.

EthicsGrade Industry Summary Scorecard – Social Media

The idea is that these ratings are used by companies to better see where they should improve. But the twist is that asset managers can also see where the risks of AI might lie.

Speaking to TechCrunch he said: “While at Fidelity I got a reputation within the firm for being the go-to person, for my colleagues in the investment team, who wanted to understand the risks within the technology firms that we were investing in. After being asked a number of times about some dodgy facial recognition company or a social media platform, I realized there was actually a massive absence of data around this stuff as opposed to anecdotal evidence.”

He says that when he left Fidelity he decided EthicsGrade would out to cover not just ESGs but also AI ethics for platforms that are driven by algorithms.

He told me: “We’ve built a model to analyze technology governance. We’ve covered 20 industries. So most of what we’ve published so far has been non-tech companies because these are risks that are inherent in many other industries, other than simply social media or big tech. But over the next couple of weeks, we’re going live with our data on things which are directly related to tech, starting with social media.”

Essentially, what they are doing is a big parallel with what is being done in the ESG space.

“The question we want to be able to answer is how does Tik Tok compare against Twitter or Wechat as against WhatsApp. And what we’ve essentially found is that things like GDPR have done a lot of good in terms of raising the bar on questions like data privacy and data governance. But in a lot of the other areas that we cover, such as ethical risk or a firm’s approach to public policy, are indeed technical questions about risk management,” says Radclyffe.

But, of course, they are effectively rating algorithms. Are the ratings they are giving the social platforms themselves derived from algorithms? EthicsGrade says they are training their own AI through NLP as they go so that they can automate what is currently very human analysts centric, just as ‘sustainalytics’ et al did years ago in the environmental arena.

So how are they coming up with these ratings? EthicsGrade says are evaluating “the extent to which organizations implement transparent and democratic values, ensure informed consent and risk management protocols, and establish a positive environment for error and improvement.” And this is all achieved, they say, all through publicly available data – policy, website, lobbying etc. In simple terms, they rate the governance of the AI not necessarily the algorithms themselves but what checks and balances are in place to ensure that the outcomes and inputs are ethical and managed.

“Our goal really is to target asset owners and asset managers,” says Radclyffe. “So if you look at any of these firms like, let’s say Twitter, 29% of Twitter is owned by five organizations: it’s Vanguard, Morgan Stanley, Blackrock, State Street and ClearBridge. If you look at the ownership structure of Facebook or Microsoft, it’s the same firms: Fidelity, Vanguard and BlackRock. And so really we only need to win a couple of hearts and minds, we just need to convince the asset owners and the asset managers that questions like the ones journalists have been asking for years are pertinent and relevant to their portfolios and that’s really how we’re planning to make our impact.”

Asked if they look at content of things like Tweets, he said no: “We don’t look at content. What we concern ourselves is how they govern their technology, and where we can find evidence of that. So what we do is we write to each firm with our rating, with our assessment of them. We make it very clear that it’s based on publicly available data. And then we invite them to complete a survey. Essentially, that survey helps us validate data of these firms. Microsoft is the only one that’s completed the survey.”

Ideally, firms will “verify the information, that they’ve got a particular process in place to make sure that things are well-managed and their algorithms don’t become discriminatory.”

In an age increasingly driven by algorithms, it will be interesting to see if this idea of rating them for risk takes off, especially amongst asset managers.

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Nested, the UK-based ‘modern’ estate agent, raises additional £5M to improve the home-selling experience

Nested, the London-based startup that is using technology to build a “modern” estate agency and improve the home-selling experience, has raised an additional £5 million. Backing comes from Axel Springer, alongside previous backers Balderton Capital and Northzone.

Described as a “strategic investment,” Nested co-founder and CEO Matt Robinson tells TechCrunch that the round brings the “vast industry experience and resources” of Axel Springer to the board, in advance of a U.K. nationwide launch this year — meaning that the proptech is expanding beyond its current footprint of London.

Pitched as a “modern estate agent,” Nested’s offering pairs local agents with what it claims is industry leading tools and technology to help them better-support home-sellers (and buyers). It initially launched by offering to front the cash needed to buy your next home before you had sold your existing one, but now covers the entire house-selling journey.

Most recently, Robinson says Nested has been testing a new “hyper-local” approach so it can better service different neighbourhoods in a huge city like London. The idea, he says, is to give customers the best of both worlds: “a fantastic local agent who knows their area inside out, powered by Nested’s unique technology”.

This saw Nested launch 5 hyper-local areas in 2020 and Robinson says it has quickly gained up to 15% market share in those local markets. It is planning to launch an additional 30 areas over the next 18 months, as well as moving outside London for the first time.

“We find the best local agents and empower them with unique technology and services versus anyone else in the industry, traditional or online,” says Robinson. “There are some good traditional agents out there but the tools they have to do their job and for the customer to see what’s happening are pre-internet. We take the best local agents and give them tools to instantly be better at their job and give customer a better experience”.

He says that this is very different to online estate agencies, such as Purplebricks, which effectively offer “a DIY option where the agents are set up to fail by having to serve too many customers to give any of them a good service”. Meanwhile, he notes, traditional agents have barely changed in 50 years.

“Customers used to pick us because we had great features and services they couldn’t get anywhere else and great people but it was clear that the vast majority of customers also really value the knowledge and experience of a local agent and we were forcing them to pick between superior features, service and people versus most local,” adds Robinson.

“Our approach now is to give them both. We hire the absolute best local agents, and empower them and our customers with features to manage their sale better than they could anywhere else. For example, our customer account, buying agent and advance”.

Furthermore, Robinson argues that by focusing on each local market, customers benefit from local network effects through cross-selling homes. “We are [also] able to give agents a healthier workload with less travel, meaning more time for clients and better tailored advice”.

As an example of how Nested’s tech helps local agents do a better job, the company recently released updates to its mobile app which gives home-sellers instant access to every aspect of their sale — from viewing feedback and scheduled viewings to even showing what actions their agent has taken to generate enquiries and how many times they have chased up specific enquiries. “All at the tap of a button instead of playing phone tag with your agent,” is how Robinson frames it.

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Samsung Galaxy S20 FE 5G arrives in India

Samsung announced the Galaxy S20 FE in India last October, and after five months, the company has launched its 5G variant in the South Asian country. The Galaxy S20 FE 5G comes in a single 8GB/128GB memory configuration in India priced at INR55,999 ($765/€650) but early birds can have it for INR47,999 ($655/€560). You can buy one in Cloud Navy, Cloud Mint, or Cloud Lavender colors from Samsung's official India site, Samsung Exclusive Stores, Amazon.in, and leading retail outlets across the country. Unlike its 4G counterpart powered by the Exynos 990 SoC, the Galaxy S20 FE 5G has the...

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Deliveroo prices its shares on the LSE at £3.90, at the lower end of the range, with a market cap of £7.59B

Tech stocks continue to deliver on the public markets, figuratively and literally: Deliveroo, the UK food-delivery giant backed by Amazon that has seen a surge of business during the Covid-19 pandemic, has announced pricing of £3.90 ($5.36) for its shares when goes public on the London Stock Exchange later today, valuing it with a market cap of £7.59 billion ($10.4 billion).

The figure is at the lower end of the reduced range Deliveroo set earlier in the week of £3.90-£4.10. At the time, Deliveroo said the “volatile global market conditions for IPOs” led it to narrow the range from its original £3.90-£4.60. “Deliveroo is choosing to price responsibly within the initial range and at an entry point that maximises long-term value for our new institutional and retail investors,” the company said.

Separately, Deliveroo has been facing persistent controversy over how it pays its drivers, a story that doesn’t look like it will go away too soon. Deliveroo sources have repeatedly claimed that negative stories arising out of these labor issues have not been impacting the company in the lead-up to the IPO. Activity today on the market be an interesting indication of what the real impact has been.

Regardless of that, the listing today is a milestone not just for the company but for the London stock market in general. At a time when a number of scaled up privately-held tech companies have, and are exercising, a lot of options — acquisitions to bigger rivals, listing in the U.S. market, pursuing a SPAC — it’s notable that Deliveroo has opted for the LSE. It’s the biggest IPO on the exchange in terms of market cap in nine years (when commodity giant Glencore listed in 2011), and the biggest in terms of money raised since last September (when e-commerce company The Hut Group listed).

“I am very proud that Deliveroo is going public in London – our home,” said Will Shu, Deliveroo’s CEO and co-founder. “As we reach this milestone I want to thank everyone who has helped to build Deliveroo into the company it is today — in particular our restaurants and grocers, riders and customers. In this next phase of our journey as a public company we will continue to invest in the innovations that help restaurants and grocers to grow their businesses, to bring customers more choice than ever before, and to provide riders with more work. Our aim is to build the definitive online food company and we’re very excited about the future ahead.”

As with the U.S. exchanges, tech companies are fueling a lot of the action on the LSE at the moment, with four out of the last five IPOs valued at over £1.5 billion in the last five years coming from tech companies.

The labor controversy is one that will continue to play out for the company in part because it’s about more than just Deliveroo. Earlier this month, Uber reclassified 70,000 drivers in the UK as workers to give them benefits as the result of losing a court case, although Uber Eats — a rival to Deliveroo — was not included in the deal. However, it may not be legal but public pressure that will shift what happens with food delivery drivers. Just Eat, another competitor in the space, last year kicked off an agency worker model that gives drivers the option to work instead under an hourly wage rather than per ride. That becomes, in turn, one possible outcome for how to resolve the situation.

Whether or not investors have an opinion on this matter, it may not be that the so-called “investors revolt” is directly related to a sense of justice for low-paid delivery people, as it is the threat of legal action, losing court cases, and generally finding more costs on the bottom line than originally anticipated in the company’s unit economics.

Those unit economics are indeed a focus for investors, who may be bullish on the basic idea even as disputes over how to run it as an equitable business continue. Going into the IPO, Deliveroo is not profitable, but its loss had been narrowing on a huge surge of sales during the Covid-19 pandemic, not least because many restaurants have been forced to shut down their dine-in businesses and so consumers are turning to services like this to get their fixes of pre-prepared sushi, pizza, jerk chicken and burritos.

We’ll update this post with more after the stock officially starts trading.

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India’s HealthPlix raises $13.5 million to help doctors treat patients more efficiently

There are fewer than 300,000 doctors in India actively practicing medicine. They serve hundreds of millions of patients who suffer from chronic illness in the world’s second most populous nation.

A doctor only has a few minutes to spend on a patient, remember the past diagnosis by glancing at their record, and look for progress.

HealthPlix, a Bangalore-based startup, believes it can help doctors serve these patients more efficiently with the limited time they have.

The startup has developed a software for doctors that helps them keep a tab on the symptoms a patient has displayed in the past, the medicine that was prescribed to them, and if they are showing any improvements in a methodical template.

But it doesn’t stop there, said Sandeep Gudibanda, co-founder of HealthPlix, in an interview with TechCrunch. The software has a knowledge base that is making determination of all the other factors that a doctor needs to assess as they treat the patient.

For instance, if a patient has diabetes, and they have mentioned that they had swollen feet and are experiencing more frequent visits to the washroom, said Gudibanda, the doctor can quickly assess that the patient’s symptoms are getting worse and she needs to start looking at the health of the kidney and other organs.

“As a doctor, you are able to see how my disease is progressing, what medicine was prescribed to me and if they are working. So you are not going to prescribe me some medicine that didn’t work two months ago. Based on the data of more than 12 million patients we have, our software is also able to inform doctors what other things I am exposed to,” he said.

“Doctors have immense knowledge, but they have very little time. So how do we help them make better decisions on the few minutes they have with a patient,” he asked. “These few minutes matter most. It is in this precious interaction that health decisions get made, diagnostic tests get prescribed, pharmaceutical brands get chosen, surgical procedures get planned, and hospital referrals get made. This interaction is the moment of truth, where $88 billion of annual healthcare spend is decided.”

Scores of healthtech startups in India today are attempting to serve patients. What distinguishes HealthPlix from most is the approach it has taken. Unlike other startups, HealthPlix’s solution puts doctors at its centre of universe, said Gudibanda, who has spent nearly two decades in entrepreneurship in healthtech.

He said in a country like India, where there are so many people suffering from chronic diseases, a doctor’s intervention is needed for best results. “While going through the patient’s route, we might achieve some scale, we realized that the stakeholder they reason with and listen to is the doctor. A doctor here serves hundreds of patients. You work with the doctor and you make a bigger impact,” he said.

“Second, because of the immense workload on doctors, who can only spend 2-3 minutes to serve a patient, If he or she doesn’t have all the information, their thinking might get compromised. Hence the doctor had to be in the piece.”

HealthPlix initially started in late 2016 to help doctors connect with patients digitally. But that model, he recalled, wasn’t working. The current model is growing fast. More than 6,000 doctors today are using HealthPlix for over four hours a day, he said. The startup plans to reach over 50,000 doctors in two years.

On Wednesday, the startup said it has raised $13.5 million in its ongoing Series B financing round. The round was led by Lightspeed Venture Partners. The startup has now raised about $23.5 million to date.

“What sets HealthPlix apart is its doctor-first B2B approach. Doctors are the most influential decision-makers in healthcare. We believe whichever platform wins their trust will have the sole right to orchestrate the entire $88 billion of healthcare spend,” said Vaibhav Agrawal, Partner at Lightspeed, in a statement.

“The impact is very clear — improved health outcomes for patients, better practices for doctors, 10x better Insights for pharma and med device companies, and superior underwriting capability for insurers.”

Gudibanda said the startup will also deploy the fresh capital to tackle some acute diseases.

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Sequoia Capital India on its early investment in Appier, the fund’s latest exit

Chih-Han Yu, chief executive officer and co-founder of Appier Group Inc., right, holds a hammer next to a bell during an event marking the listing of the company on the Tokyo Stock Exchange, at the company’s office in Taipei, Taiwan on Tuesday, March 30, 2021. Photographer: Billy H.C. Kwok/Bloomberg via Getty Images

Appier’s initial public offering on the Tokyo Stock Exchange yesterday was a milestone not only for the company, but also Sequoia Capital India, one of its earliest investors. Founded in Taiwan, Appier was the fund’s first investment outside of India, and is now also the first company in its portfolio outside of India to go public. In an interview with TechCrunch, Sequoia Capital managing director Abheek Anand talked about what drew the firm to Appier, which develops AI-based marketing software.

Before shifting its focus to marketing, Appier’s founders—chief executive officer Chih-Han Yu, chief operating officer Winnie Lee and chief technology officer Joe Su—worked on a startup called Plaxie to develop AI-powered gaming engines. Yu and Su came up with the idea when they were both graduate students at Harvard, but found there was little demand at the time. Anand met them in 2013, soon after their pivot to big data and marketing, and Sequoia Capital India invested in Appier’s Series A a few months later.

“It’s easy to say in retrospect what worked and what didn’t work. What really stands out without trying to write revisionist history is that this was just an incredibly smart team,” said Anand. “They had probably the most technical core DNA of any Series A company that we’ve met in years, I would argue.” Yu holds a PhD in computer science from Harvard, Wu earned a PhD in immunology at Washington University in St. Louis and Su has a M.S. in computer science from Harvard. The company also filled its team with AI and machine learning researchers from top universities in Taiwan and the United States.

Taiwan’s Appier raises $80M for AI-based marketing technology

At the time, Sequoia Capital “had a broad thesis that there would be adoption of AI in enterprises,” Anand said. “What we believed was there were a bunch of people going after that problem, but they were trying to solve business problems without necessarily having the technical depth to do it.” Appier stood out because they “were swinging at it from the other end, where they had an enormous amount of technical expertise.”

Since Appier’s launch in 2012, more companies have emerged that use machine learning and big data to help companies automate marketing decisions and create online campaigns. Anand said one of the reasons Appier, which now operates in 14 markets across the Asia-Pacific region, remains competitive is its strategy of cross-selling new products and focusing on specific use cases instead of building a general purpose platform.

Appier’s core product is a cross-platform advertising engine called CrossX that focuses on user acquisition. Then it has products that address other parts of their customers’ value chain: AiDeal to help companies send coupons to the customers who are most likely to use them; user engagement platform AIQUA; and AIXON, a data science platform that uses AI models to predict customer actions, including the likelihood of repeat purchases.

“I think the number one thing that the company has spent a lot of time on is focusing on efficiency,” said Anand. “Customers have tons of data, both external and first-party, that they’re processing to drive business outcomes. It’s a very hard technical problem. Appier starts with a solution that is relatively easy to break into a customer, and then builds deeper and deeper solutions for those customers.”

Appier’s listing is also noteworthy because it marks the first time a company from Taiwan has listed in Japan since Trend Micro’s IPO in 1998. Japan is one of Appier’s biggest markets (customers there include Rakuten, Toyota and Shiseido), making the Tokyo Stock Exchange a natural fit, Anand said, even though most of Sequoia Capital India’s portfolio companies list in India or the United States.

The Tokyo Stock Exchange also stood out because of its retail investor participation, liquidity and total volume. Some of Appier’s other core investors, including JAFCO Asia and SoftBank Group Corp., are also based in Japan. But though it has almost $30 billion in average trading volume, the vast majority of listings are domestic companies. In a recent report, Nikkei Asia cited a higher corporate tax rate and lack of potential underwriters, especially for smaller listings, as a potential obstacles for foreign companies.

But Appier’s debut may lead the way for other Asian startups to chose the Tokyo Stock Exchange, said Anand. “Getting ready for the Japanese exchange meant having the right accounting practices, the right reporting, a whole bunch of compliance stuff. It was a long process. In some ways we were leading the charge for external companies to get there, and I’m sure over time it will keep getting easier and easier.”

Sequoia announces $1.35 billion venture and growth funds for India and Southeast Asia

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Uganda’s Tugende closes $3.6M Series A extension to meet the demand for its asset finance products

Ugandan technology-enabled asset finance company Tugende today announced that it has closed $3.6 million in a Series A extension round.

The investment, which, according to the company, was agreed on and structured in 2020, follows the $6.3 million raised in November 2020 and led by Toyota Tsusho investment fund Mobility 54. This brings Tugende’s total Series A financing to $9.9 million.

San Francisco and Paris-based VC firm, Partech led the round. Enza Capital participated, alongside some unnamed angel investors.

Michael Wilkerson founded Tugende in 2012. The company uses asset finance, technology and a customer support model to help micro, small and medium-sized enterprises own income-generating assets.

While primarily based in East Africa, the company wants to tackle the $331 billion credit gap facing these businesses across Africa. Its core product is for motorcycle riders in Kenya and Uganda, with a lease-to-own or hire-purchase package. These riders get some training, medical and life insurance, safety equipment and hands-on support from their first use of the motorcycle to owning it. 

Between 2006 and 2010, CEO Wilkerson, then a journalist and researcher, spent a great deal of time using motorcycles (Boda bodas) for quick and flexible transport. It was such an effective means for transport for him that he built a large contact list of “go-to” boda boda riders he would call for rides when need be. This was long before ride-hailing made its way to East Africa.

Michael Wilkerson (Tugende CEO). Image Credits: Tugende

These boda boda riders earned enough to pay motorcycle rent and survive, but not enough to build significant savings. While the little amounts they paid for rent could actually service a loan, traditional banks either required significant collateral or very high down payments.

So in 2010, Wilkerson launched Own Your Own Boda, a for-profit enterprise to put these riders on a path toward owning their motorcycles. They began informally with handwritten contracts, but progressed into using technology to scale the solution from 2013 when it rebranded to Tugende. 

Once boda boda riders get on board, they can double their take-home profit from $5 per day to $10 per day after becoming owners, the CEO claims.

“With an average household of five people, this can really transform the lives of our client and their families. Besides just increased daily profit, ownership of an asset is also wealth in itself,” Wilkerson told TechCrunch. “Some clients sell the fully owned motorcycle and use that lump sum of capital to make other investments while coming back to Tugende for a new lease, which is affordable from their daily cash flow.”

In addition to motorcycle taxis, Tugende has broadened the productive assets it finances to boat engines, cars, equipment for retail shops, refrigerators and other income-generating equipment. The company is also currently piloting financing for e-mobility assets. 

Image Credits: Tugende

The pivot to using technology in 2013 allowed Tugende to move fully to digital payments, build its own interoperable payment gateway in 2017 and launch an in-house credit score in 2019 to allow clients to see how they are performing. 

Talking about clients, Tugende currently has more than 43,000 across Kenya and Uganda. Out of that number, 16,000 have achieved full ownership of at least one asset.

Last year was a challenging one for the company, as the pandemic disrupted some of its activities; excluding 2020, Tugende has doubled in team size year-on-year. The company currently has more than 520 employees, with 20 branches in Uganda and four in Kenya.

While the pandemic presented challenges that the company has since maneuvered, it also brought a new investor in Partech. “Last year, in the middle of the pandemic, we decided to invest in Tugende”, said Tidjane Deme, partner at the firm that invested in 82 startups across 24 countries in 2020. “Tugende combines technology and strong operations to aid millions of professionals to grow their businesses and drive economies forward. We will support Michael and his team to build up the tech platform, fine-tune the model and expand in new markets.”

Over the years, Tugende’s demand has come mainly via word of mouth, a strategy Wilkerson says the company has struggled to keep up with. That’s the purpose of the new investment — to provide supply for growing demand. Also, the investment will support the closure of new debt capital to fuel Tugende’s strong portfolio growth in Uganda and Kenya.

Partech is doubling the size of its African venture fund to $143 million

Because of the nature of its business, Tugende needs a steady influx of debt capital. Since its inception, it has raised more than $20 million from debt partners like Partners Group Impact Investments and the U.S. Development Finance Corporation.

So why opt for equity financing this time when it mostly thrives on debt capital? Wilkerson says with the company’s long waiting list of new clients, Tugende has been trying to close new capital fast enough to keep up with this demand.

You see, most lenders require a minimum equity cushion, and even though Tugende has been net income positive for most of the last five years through 2019, its internally generated equity couldn’t anchor enough debt to meet its word of mouth client demand. Now, when you add the company’s goals to grow in new geographies and new asset products, the reason for this equity financing is apparently clear.

“Debt is Tugende’s fuel for growth. But good equity financing is like upgrading the engine, getting a top-notch mechanic and driving coach thrown in on top to help you handle the speed,” the CEO added. 

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There is also the need for balance sheet strength, leading to more capital runway with larger and better-priced debt deals. Besides, there is the multiplier effect of having hands-on equity support.

Unlike many digital or digitally-enabled lenders, Wilkerson says Tugende’s prime focus on long-term value, not today’s credit transaction alone, is what will keep customers in the Tugende ecosystem in the coming years.

“We are particularly enthused by the team’s innovative application of technology, which incorporates a range of social considerations to build a new type of credit score, and which will increase access to capital across a range of African markets where entrepreneurs currently have a limited credit history or access to collateral,” added Mike Mompi, partner at Enza Capital of the investment.

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