Debate over a Ukrainian nationalist leader’s role in the Holocaust has exposed how views of the past shape European allies’ relationships with Kyiv.
The boundary between freedom and oppression is thin.
Led by young women from Eastern Europe, they are cornering Europe’s leaders and pressing them for a total energy embargo on Russia — to end the fighting and to save the planet.
Differing objectives foreshadow a coming debate about what position President Volodymyr Zelensky of Ukraine and his Western allies would take if negotiations to end the conflict finally get going.
Images taken in the 1970s and ’80s provide a glimpse into life under autocracy.
Mental health professionals across the region say they have seen an increase in patients with intense anxiety. Some are asking for more sleeping pills, and many are making escape plans.
Even before the war, the country struggled with epidemics of H.I.V., tuberculosis and hepatitis. The conflict threatens to undo decades of progress.
To Central and Eastern Europeans, the invasion of Ukraine is the latest in a series of nightmarish assaults.
American consumers already have high inflation. Because of the oil price shock and Russia’s war, the odds of a recession have increased, too.
Many countries fear that the Russian leader’s efforts to turn back the clock and reclaim a sphere of influence lost at the end of the Cold War could spell disaster for them.
Democracy is on the decline worldwide, and Vladimir Putin is a big factor.
Russian troops are attacking Ukraine. For so long, U.S. policymakers have grappled with how to prevent such a moment. Now, they must answer a different question.
Military officials gave a grim assessment of the toll on Ukraine, saying that Russian forces were moving to decapitate the government in Kyiv.
Explosions thundered in Ukrainian cities shortly after President Vladimir V. Putin declared the start of a “special military operation.”
Explosions thundered in Ukrainian cities shortly after President Vladimir V. Putin declared the start of a “special military operation.”
Analysts puzzling over the Russian leader’s intentions say that his troop buildup around Ukraine could be a convincing bluff, but also posit that he could have fundamentally changed during the pandemic.
European diplomats are exploring whether a seven-year-old negotiating channel, initially intended to resolve a conflict in eastern Ukraine, can be repurposed to calm a wider crisis.
President Vladimir Putin said diplomatic ideas raised in a meeting by French President Emmanuel Macron were worth pursuing, but did not rule out a Russian invasion of Ukraine.
With vitriolic accusations that echoed the Cold War era, the United States and Russia sparred in a bitter debate over the Ukraine crisis in a Security Council meeting watched by the world on Monday.
The Americans see the Security Council meeting as an opportunity to force Russia to explain itself, while Russia calls the meeting a diplomatic farce.
Britain moved to broaden the range of sanctions available if Russia invades Ukraine, as Moscow sent an “urgent demand” to NATO to clarify its stance.
Britain is seeking to broaden the range of sanctions available if Russia invades Ukraine. Meanwhile, Russia asked NATO for clarity.
The move signals a shift for the Biden administration as the United States and NATO allies brace for possible Russian military action.
Vladimir Putin’s aim is bigger than closing NATO’s “open door” to Ukraine and taking more territory — he wants to evict the United States from Europe.
In a third round of diplomacy on Eastern European security this week, Kremlin officials sounded an increasingly pessimistic note, though they did not close the door on future talks.
The agency cautioned against treating the virus like the seasonal flu, since much remains unknown, particularly regarding the severity in areas with lower vaccination rates.
When Russians say no, they often mean yes, a former Ukrainian member of Parliament said, as suspicion ran deep about Moscow’s intentions.
Both sides expressed some optimism after negotiations in Geneva, but did not break an impasse over Russia’s demand that Ukraine never become a member of NATO.
Bosnia’s fragile multiethnic government is facing its greatest crisis since the Balkan wars. The Serb nationalist leader, Milorad Dodik, is threatening to tear the country apart.
In the stretch of Europe from the Baltic Sea to the Black Sea, where Moscow and the West have competed for influence for decades, the threat of a new military conflict is growing.
A political gamble by the nation’s desperate leader has become a diplomatic and humanitarian crisis.
In pockets of Europe, vaccine resistance has become the long tail of the populist nationalist movements that shook up European politics for a decade.
Austria took the hardest line yet on Monday, beginning a lockdown aimed exclusively at those who are not inoculated, part of a pattern to make life harder for resisters.
In his most direct comments to date on the contentious Russian pipeline, President Vladimir V. Putin called it an “obvious” way to relieve Europe’s soaring natural gas prices.
Many of those now eligible for reparations are Russian Jews who survived the Nazi siege of Leningrad. They will receive annual pensions of about $5,200, or 4,500 euros.
More than 70 years after World War II, we’re still learning about new facets of the Holocaust.
Sorry Mr. Putin, but there’s a race on for Russian and Eastern European founders. And right now, those awful capitalists in the corrupt West are starting to out-gun the opposition! But seriously… only the other day a $100 million fund aimed at Russian speaking entrepreneurs appeared, and others are proliferating.
Now, London-based Untitled Ventures plans to join their fray with a €100 million / $118M for its second fund to invest in “ambitious deep tech startups with eastern European founders.”
Untitled says it is aiming at entrepreneurs who are looking to relocate their business or have already HQ’ed in Western Europe and the USA. That’s alongside all the other existing Western VCs who are – in my experience – always ready and willing to listen to Russian and Eastern European founders, who are often known for their technical prowess.
Untitled is going to be aiming at B2B, AI, agritech, medtech, robotics, and data management startups with proven traction emerging from the Baltics, CEE, and CIS, or those already established in Western Europe
LPs in the fund include Vladimir Vedeenev, a founder of Global Network Management>. Untitled also claims to have Google, Telegram Messenger, Facebook, Twitch, DigitalOcean, IP-Only, CenturyLinks, Vodafone and TelecomItaly as partners.
Oskar Stachowiak, Untitled Ventures Managing Partner, said: “With over 10 unicorns, €1Bn venture funding in 2020 alone, and success stories like Veeam, Semrush, and Wrike, startups emerging from the fast-growing regions are the best choice to focus on early-stage investment for us. Thanks to the strong STEM focus in the education system and about one million high-skilled developers, we have an ample opportunity to find and support the rising stars in the region.”
Konstantin Siniushin, the Untitled Ventures MP said: “We believe in economic efficiency and at the same time we fulfill a social mission of bringing technological projects with a large scientific component from the economically unstable countries of the former USSR, such as, first of all, Belarus, Russia and Ukraine, but not only in terms of bringing sales to the world market and not only helping them to HQ in Europe so they can get next rounds of investments.”
He added: “We have a great experience accumulated earlier in the first portfolio of the first fund, not just structuring business in such European countries as, for example, Luxembourg, Germany, Great Britain, Portugal, Cyprus and Latvia, but also physically relocating startup teams so that they are perceived already as fully resident in Europe and globally.”
To be fair, it is still harder than it needs to be to create large startups from Eastern Europe, mainly because there is often very little local capital. However, that is changing, with the launch recently of CEE funds such as Vitosha Venture Partners and Launchub Ventures, and the breakout hit from Romania that was UIPath.
The Untitled Ventures team:
• Konstantin Siniushin, a serial tech entrepreneur
• Oskar Stachowiak, experienced fund manager
• Mary Glazkova, PR & Comms veteran
• Anton Antich, early stage investor and an ex VP of Veeam, a Swiss cloud data management company
acquired by Insight Venture Partners for $5bln
• Yulia Druzhnikova, experienced in taking tech companies international
• Mark Cowley, who has worked on private and listed investments within CEE/Russia for over 20 years
Untitled Ventures portfolio highlights – Fund I
• Sizolution: AI-driven size prediction engine, based in Germany
• Pure app – spontaneous and impersonal dating app, based in Portugal
• Fixar Global – efficient drones for commercial use-cases, based in Latvia,
• E-contenta – based in Poland
• SuitApp – AI based mix-and-match suggestions for fashion retail, based in Singapore
• Sarafan.tech, AI-driven recognition, based in the USA
• Hello, baby – parental assistant, based in the USA
• Voximplant – voice, video and messaging cloud communication platform, based in the USA (exited)
Nigerian fintech and lending startup Lidya today announced that it has completed its $8.3 million pre-Series B funding round.
In addition to the $1.3 million seed round secured in 2017 and $6.9 million Series A a year later, Lidya has raised a total of $16.5 million.
This investment will see Lidya grow its lending operations for small and medium businesses across its markets.
The idea for Lidya came about in Nigeria when Tunde Kehinde and Ercin Eksin saw the need to offer lending services while at their previous company Africa Courier Express (ACE). ACE was a last-mile e-commerce delivery company that provided logistics services to businesses and consumers.
The founders, who also held founding and executive roles at Jumia Nigeria, noticed that most of the businesses ACE worked with had credit and financing issues. And although options existed, the founders felt these platforms could not adequately cater to their ever-growing needs.
As co-CEOs, the pair launched Lidya as a digital SME lending platform in 2016. On the platform, businesses can create accounts and apply for loans ranging from $500 to $50,000, with decisions made within 24 hours.
Lidya claims to use 100 data points to evaluate each applicant and build a credit score for them to assess credit risk. When the company announced its raise in 2018, it had disbursed 1,500 business loans and was poised to enter new African markets. But it chose Europe instead.
In October 2019, Lidya announced that it had launched new lending operations in Poland and the Czech Republic. But it was not until March and April 2020 the company’s activities in Eastern Europe fully kickstarted. Since then, Lidya claims to have disbursed over $3 million to SMEs in the two countries. To date, the company has disbursed over 25,000 loans and claims to have more than a 90% customer repeat rate.
So, what was behind the decision to expand to Europe instead of other African markets? “We wanted to build a global business from day one given the size of the problem where there is a $3 trillion credit gap,” CEO Kehinde said to TechCrunch. “We challenged ourselves not to limit ourselves to one market and went through some data before expanding to Europe.”
With this raise, Lidya wants to solidify its presence in the three markets. The investment has also brought a change to the company’s leadership structure. Per a statement released by the company, Eksin has left Lidya to pursue other projects while Kehinde takes over as the sole CEO.
Currently, both European markets represent about 30% of Lidya disbursement volume while the overall default rate is less than 1%. Unlike most lending companies that raise debt financing to fund loans, Lydia uses equity to fund its loan book. Quite the unconventional method, but Kehinde points why the company thought that path was necessary.
“The idea was for us to show that our algorithms work and that we can disburse money into the market and get it back. Then we can transition to using debt for our lending operations,” the CEO said as the company looks to finalize deals with banks, family offices, and hedge funds in the coming months. This is in addition to the $300,000 line of credit Lidya has secured from Bamboo Capital Partners.
Lidya began lending in Europe at the height of the pandemic. Kehinde recounts how tough it was for the team, especially in a period that was so unusual.
“It is difficult enough to attempt to launch in two new countries but try doing that remotely,” he said. “We’re so decentralized. We had operations in Nigeria, and we were launching in Eastern Europe remotely, making sure the puzzle stays together. The team really stepped up. Everyone doubled down on the mission and we came out of the year without having any deterioration.”
The CEO adds, “Now the focus is to get back to gear. We want to be able to do 5x what we’ve done historically by this time next year. If we do that, we’ll be successful, and our customers will be successful as well.”
Lydia will grow out its teams in Lagos, Prague and Warsaw and use a portion of the funds to support lines of credit.
Speaking on the investment, Alitheia Capital co-founder and managing director said, “Lidya is tackling the fundamental challenge of providing access to credit for dynamic small and growing businesses that otherwise have limited options for financing working capital to scale their businesses in Africa and Europe. Alitheia Capital and Goodwell are pleased to be backing a team whose mission aligns with our objective of driving growth and social impact by enabling access and inclusion to finance and financial services.”
It’s quite rare to see expansion moves from Nigerian or African startups to Europe. An exception to that might be South African startups who frequently open offices in the U.K. and the Netherlands. Kehinde relishes the company’s achievement so far, having gained some foothold in both the Czech Republic and Poland. He says there is more to expect from the five-year-old digital lender.
“We’re really excited about the fact that we started in Nigeria and now our product is live in two European countries. Typically people come into Nigeria from other parts of the world but we’ve gone from Nigeria to other parts. We’re proud of the traction we’ve gotten in our push to build the biggest finance house for SMEs in our markets.”
Hepsiburada — Turkey’s giant online shopping platform considered the Amazon of its country — floats on the Nasdaq today, for a valuation likely to exceed $3.9 billion on current projections, especially with shares being marked up to $14 apiece (up from the previously predicted $12 pricing). Bu this isn’t the end of the journey for this break-out Turkish tech and e-commerce company, for long-time founder and chairwoman Hanzade Doğan Boyner – who started the business in 1998 no less, and still has overall control of the company – considers this closer to a growth round of funding, enabling her ambitious plans to mine Turkey’s fast-developing market even further, as well as expand into Central and Eastern Europe. Doğan Boyner, a scion of the powerful Doğan family in Turkey, continues to hold three-quarters of the voting power in the company, according to the prospectus filed to the SEC.
Hepsiburada’s IPO comes after it more than doubled its revenue during the pandemic, as Turkey’s largely offline population was forced to switch to online shopping in what might well be characterized as a sort of enforced ‘Great Leap Forward’ for the country.
Hepsiburada (which translates as “everything is here”) is also making history as the first-ever Turkish, NASDAQ IPO.
With a massive logistics platform spread across Turkey, the company now offers 2hr deliveries, with around 43 million products available on the platform, available from a more Chinese-like ‘super-app’ which can offer everything from groceries to flights, to payment services, via is ‘Alipay-like’ service called Hepsipay. And in Turkey, many people prefer to buy things on installments, a service Hepsiburada has pre-built into its platform.
Turkish people have also enjoyed its frictionless returns, where goods can be returned for free, involving a super-efficient logistics network.
After growing at about 50% year on year for the last five years, the company says it doubled in size last year, taking advantage of the exponential growth in Turkey’s e-commerce penetration into its 82 million-strong population.
The IPO comes after a mere $100m was invested in the platform over the last 20 years, and a profit-making period until 2018 when Doğan Boyner started investing more in the platform, prior to this moment.
TC: What brought you to this moment in time in terms of the IPO?
Doğan Boyner: “Almost 20 years ago I started with e-commerce and from day one we built it with new features, new services, and today we manage a fully integrated ecosystem, from last-mile delivery to payment to groceries. Hepsiburada is the super app that makes our customer’s lives easier. They can get their groceries or their toys for next-day delivery or flight tickets. Why are we listing now? Because the Turkish e-commerce market is at 10% penetration, and we believe that its penetration will double by 2025. It’s an inflection point. It’s a large market, and as Hepsiburada we are a pioneering platform reaching maturity towards becoming a public company. With the funds raised through the IPO, we will accelerate our growth and continue to execute our vision.”
TC: “Are you satisfied with the $3.9 billion valuation?”
Doğan Boyner: “Today’s valuation is not very important for me. It’s not where you start, it’s where you go. I’m not selling any shares, and this is primarily for growth funding. This is just the beginning. You know, the market is still low penetration, and we have an exciting journey ahead of us. I want the stock to perform well for my investors, but what the value today is irrelevant for me.”
TC: “You’re going to use some of this funding to add on new products onto the platform like booking flights or money transfers and other kinds of new products, what are some of the other kinds of expansion plans you have?”
Doğan Boyner: “One is to continue building our infrastructure, such as frictionless returns, which gives such peace of mind to our consumers. The second is Hepsi Express. It’s still only at 4% penetration. This will change the consumer’s grocery shopping habit because we have such a strong model where we partner with a lot of national chains, regional chains, Mom-and-Pop shops, so we turn those stores into our ‘dark stores’. Plus we sometimes do our own picking from the stores or sometimes the retailer does the picking. So the customer offering is very strong. You can get something in half an hour, or you can schedule it for next day, whenever you want. You can do the weekly shopping, or just get something for that night. Express is an area that we will scale. Payment is another focus. We are the only platform with a payments license. Soon it will be an open wallet and our Fintech capabilities will increase post IPO.”
TC: Are you following a sort of Alibaba / Alipay strategy?
Doğan Boyner: “We will leverage our current customers and marketplace, and we will turn them into our wallet customers. Super apps don’t really exist in Europe or the US. So it’s our vision to digitalize commerce. We are in our customer’s pocket. We want to make life easier for them.”
TC: “How did you shift operations during the pandemic?”
Doğan Boyner: “We almost became a lifeline, not just for consumers but for our merchants as well. So we rose to the occasion to not only scale operationally. We had to onboard 1000s of drivers and employees, very, very fast, but we also had to secure the well-being of our employees. While all of us were isolating we had to ask our employees to work, which, which I think we’ve done a very, very good job of, in terms of providing PPE, and providing health coverage. It was a chance to live up to our values. Our consumers experimented with us as new consumers, and they’re happy with the service so they will stay with us and our merchants appreciated us as well, because in a time when their shops were closed, they could generate revenues through us.”
TC: You’ve been a big advocate of women in your company and also in your country, you’ve created many programs for women and girls and engaged in a great deal of advocacy. Where do you feel you are on that journey?
Doğan Boyner: “Half far our workforce is female, 33% of our management is female – which should be 50%! Our woman entrepreneur program has been very impactful. We tell women entrepreneurs to come, we will teach you ecommerce, we will onboard your products, we will give you free shipping, we will prioritize your products or listing pages, we will give you real estate on our home page. Some 19,000 women have benefitted from this. Women have sent me their inspiring stories. They start small and hire two people, and then they create their own brands. Having said that, when I look at where we are in terms of gender equality globally, the needle doesn’t move much. You look at the number of CEOs in the FTSE 500, the number doesn’t change. So, I will keep doing whatever I can, because every ‘small drop’ counts. And hopefully, it will. I also think there should be a new conversation, a global conversation about gender equality in general. The 19,000 women who benefited from our program became economically more empowered. They gained skills and tools and confidence to trade on a platform like Hepsiburada, which is very meaningful.”
TC: Are you concerned that perhaps your success may attract the attention of government regulation in Turkey, in the future?
Doğan Boyner: “We are considered a national champion. Turkey has different dynamics. I think it’s an inspiration that national champions can come out and be successful.”
TC: You’ve been very hugely successful, you’re a big advocate for women in your country, do you have any political aspirations?
Doğan Boyner: “No.”
The leaders of Slovenia, Hungary and Poland, who rode to power on waves of anti-elitism anger, face rising opposition over their pandemic responses and heavy-handed policies.
Vitosha Venture Partners is a brand new venture fund launching out of Bulgaria, and backed by the Bulgarian government. The 26 million euro ($30M) fund aims to invest in approximately 100 companies, starting from low ticket sizes all the way up to a million, in early-stage and growth-stage companies that are based in or related to Bulgaria.
Vitosha will be co-financed by the European Structural and Investment Funds under the Operational Programme for Innovation and Competitiveness 2014-2020, managed by the Fund of Funds in Bulgaria. Beyond standard VC conventions, it will also back companies that matter for the growth, sustainability, and development of the local economy in Bulgaria and the Central European region.
Speaking to me over a call, co-founder Max Gurvits said: “Bulgaria and this whole region of South-eastern Europe is a very early ecosystem. The cool thing that’s happening here and that’s something we’re excited about and proud of is that because Bulgaria started a little earlier in tech than the neighboring countries, it’s still very early, but there are 1000s of people now in startups.”
He added: “I do think that in Bulgaria, something like the emergence of a unicorn-like UIPath might happen in the next two or three years. So we’re slowly but surely catching up.”
“There’s a lot of FoodTech / AgTech here, there there’s a lot of connected hardware manufacturing like electric bicycles. While those companies might not be groundbreaking or world-changing they are actually quite solid fast-growing businesses that have a pretty high probability of exiting for 2x 3x 4x 5x or more.”
Vitosha Accelerate also run an acceleration program.
The team consists of:
Erik Anderson- Managing Partner (ex WiseGuys)
Max Gurvits – Managing partner
Marin Iliev- Managing partner
Maris Prii – Managing Partner
Nikola Stojanow – Managing Partner
Paul Weinberger- Managing partner
Kamen Bankovski – Principal
Stoyan Nedin – Venture Partner
Portfolio – 17 companies up to date
Investments between EUR 150k and EUR 800k
Hobo – https://hobo.bg
Quendoo – https://www.quendoo.com
Econic One – https://econicone.com
Eirene Studio- https://eirenestudio.com
Assen Aero- http://assen.aero
MeatMe Bar- https://www.meatmebar.com/bg
Vitosha ACCELERATE startups (tickets up to EUR 50k)
Gridmetrics – https://www.gridmetrics.co
Trace the Taste- Stealth
Bye Bye Stuttering- https://www.byebyestuttering.com
The companies that became part of Vitosha’s portfolio in April are:
Assen Aero- €600K
MeatMe Bar- €400K
Trace the Taste-€50K
Bye Bye Stuttering-€50K
NATO leaders expressed a new concern about China’s growing military might, signaling a fundamental shift in the attentions of an alliance devoted to protecting Europe and North America — not Asia.
Proving that Central and Eastern Europe remains a powerhouse of hardware engineering matched with software, Gideon Brothers (GB), a Zagreb, Croatia-based robotics and AI startup, has raised a $31 million Series A round led by Koch Disruptive Technologies (KDT), the venture and growth arm of Koch Industries Inc., with participation from DB Schenker, Prologis Ventures, and Rite-Hite.
The round also includes participation from several of Gideon Brothers’ existing backers: Taavet Hinrikus (co-founder of TransferWise), Pentland Ventures, Peaksjah, HCVC (Hardware Club), Ivan Topčić, Nenad Bakić, and Luca Ascani.
The investment will be used to accelerate the development and commercialization of GB’s AI and 3D vision-based ‘autonomous mobile robots’ or ‘AMRs’. These perform simple tasks such as transporting, picking up, and dropping off products in order to free up humans to perform more valuable tasks.
The company will also expand its operations in the EU and US by opening offices in Munich, Germany and Boston, Massachusetts, respectively.
Gideon Brothers make robots and the accompanying software platform that specializes in horizontal and vertical handling processes for logistics, warehousing, manufacturing, and retail businesses. For obvious reasons, the need to roboticize supply chains has exploded during the pandemic.
Matija Kopić, CEO of Gideon Brothers, said: “The pandemic has greatly accelerated the adoption of smart automation, and we are ready to meet the unprecedented market demand. The best way to do it is by marrying our proprietary solutions with the largest, most demanding customers out there. Our strategic partners have real challenges that our robots are already solving, and, with us, they’re seizing the incredible opportunity right now to effect robotic-powered change to some of the world’s most innovative organizations.”
He added: “Partnering with these forward-thinking industry leaders will help us expand our global footprint, but we will always stay true to our Croatian roots. That is our superpower. The Croatian start-up scene is growing exponentially and we want to unlock further opportunities for our country to become a robotics & AI powerhouse.”
Annant Patel, Director at Koch Disruptive Technologies said: “With more than 300 Koch operations and production units globally, KDT recognizes the unique capabilities of and potential for Gideon Brothers’ technology to substantially transform how businesses can approach warehouse and manufacturing processes through cutting edge AI and 3D AMR technology.”
Xavier Garijo, Member of the Board of Management for Contract Logistics, DB Schenker added: “Our partnership with Gideon Brothers secures our access to best in class robotics and intelligent material handling solutions to serve our customers in the most efficient way.”
GB’s competitors include Seegrid, Teradyne (MiR), Vecna Robotics, Fetch Robotics, AutoGuide Mobile Robots, Geek+ and Otto Motors.
She joined the Resistance brigade after her family was executed and used her photographs as proof of German barbarity and Jews’ determination to fight back.
The high stakes game of chess (or, well, consolidation chicken) that is on-demand food delivery rolls on today with a little more territorial swapping in Europe: Barcelona-based Glovo has agreed to buy three of Berlin-based Delivery Hero’s food delivery brands in Central and Eastern Europe — with deals that it said are worth a total value of €170 million (~$208M).
Specifically, it’s picking up Delivery Hero’s foodpanda brand in Romania and Bulgaria; the Donesi brand in Serbia, Montenegro, Bosnia and Herzegovina; and Pauza in Croatia.
There’s some notable symmetry here: Last year Delivery Hero shelled out $272M for a bunch of Glovo’s LatAm brands, as the latter gave up on a region it had already started withdrawing from in its quest for profitability.
Glovo said then that it would be focusing on “key markets where we can build a long-term sustainable business and continue to provide our unique multi-category offering to our customers”.
Earlier this month the Barcelona-based ‘deliver anything’ app also announced it was picking up Ehrana, a local delivery company in Slovenia. So it’s been on quite the (local) shopping spree of late.
Its existing operational footprint covers markets in South West Europe, Eastern Europe and Sub-Saharan Africa. So its attention here, on the Balkans, suggests it sees a chance to eke out profitable potential in more of Central Europe too.
Glovo said the transactions in Bosnia Herzegovina, Bulgaria, Croatia, Montenegro and Serbia are expected to close “within the next few weeks”, subject to fulfilment of closing conditions and relevant regulatory approvals.
While it said Romania will be completed following approval from the competition authority — but gave no timeline for that.
Its splurge on Central and Eastern European rival food delivery brands follows a $528M Series F funding round in April — so it’s evidently not short of VC cash to burn spend.
Commenting in a statement, Oscar Pierre, CEO and co-founder, said: “It’s always been central to our long-term strategy to focus on markets where we see clear opportunities to lead and where we can build a sustainable business. Central and Eastern Europe is a very important part of that plan. The region has really embraced on-demand delivery platforms and we’re very excited to be strengthening our presence and increasing our footprint in countries that continue to show enormous potential for growth.”
In another supporting statement Delivery Hero made it clear it has bigger fish to fry (than can be served up to hungry customers in the Balkans) right now.
“Delivery Hero has built a clear leading business in the Balkan region in the last couple of years. However, with a lot of operational priorities on our plate, we believe Glovo would be better positioned to continue building an amazing experience for our customers in this region,” said Niklas Östberg, its CEO and co-founder.
A relevant, recent development for Delivery Hero‘s business is the decision to re-enter its home market of Germany — Europe’s biggest economy — under its foodpanda brand, starting in its home city of Berlin this summer (but with a national expansion planned to follow).
This is notable because back in 2018 it sold its German operations to another on-demand food delivery rival, the Dutch giant Takeaway.com — in a $1.1BN deal which included the Lieferheld, Pizza.de and foodora brands — temporarily stepping out of the competitive fray. (Meanwhile Takeaway.com has since merged with the UK’s Just Eat to become… Just Eat Takeaway so, uh, keep up.)
Delivery Hero is returning to Germany now because it can, and because the market is huge. A two-year non-compete clause between it and Just Eat Takeaway recently expired — allowing for reheating (rehashing?) of the competitive food delivery mix in German cities.
Speaking to the FT back in May about this market return, Östberg suggested Delivery Hero has girded itself (and its investors) for a long fight.
“We don’t see necessarily that we are going to go in and win the market in the next year or so. This is a 10-year game,” he said. “Of course we will definitely make sure we put in enough money to be the clear number two, the clear challenger [to Just Eat Takeaway.com].”
Winning at food delivery is certainly a(n expensive) marathon, not a sprint.
There are also of course multiple races being run in markets around the world, depending on local conditions and competitive mix — with the chance that the winner of the biggest and most lucrative races will reach such a position of VC-sponsored glory that it can buy up the top competitors from the smaller races and consolidate everything — maximizing economies of scale and gaining the ability to squeeze out fresh competition to grab a juicy profit for themselves.
Or, well, that’s the theory. Competition regulators are likely to take increasing interest in this space, for one thing. Rising awareness of gig economy workers rights is also putting pressure on the model.
For now, the thin-margin food delivery business needs the right base conditions to survive. The model only functions in cities and ideally in highly dense urban environments. Most of the players in this space also do not employ the armies of riders that are needed to make deliveries — because doing so would make the model far more costly. And in Europe political attention on gig economy workers rights could force reforms that raise regional operational costs, putting further pressure on margins.
Spain has its own labor reforms in train that will affect Glovo in its home market, for example.
Achieving sustainability (i.e. profitability without the need for ongoing VC funding injections) remains a huge hurdle for delivery apps. It will likely require massive market consolidation and/or convincing users to switch from making the occasional order of a hot meal on a weekend to relying on app-based delivery for far more of their local shopping needs — not just lunch/dinner but groceries and toiletries, and other fast moving consumers goods and household items.
It’s notable that super fast grocery delivery is a major focus for Glovo, for example — which has recently been building out networks of inner city dark stores to service in-app convenience store shopping.
Lots of other on-demand app players are also ramping up on that front. Including Delivery Hero — which has been paying more attention to groceries (picking up InstaShop last year in a deal worth $360M).
Glovo building out in Central Europe while exiting markets further afield suggests it believes it can use a concentrated market footprint to drive operational efficiencies and strong order margins through a tightly integrated meal delivery and dark store play.
If it can do that — and offer at least the whiff of profitability — it could make its business an attractive future acquisition target for a larger global giant that’s looking to up the ‘consolidation chicken’ stakes by bolting on new regions.
A larger player like Delivery Hero may even be a potential future suitor — having shown it’s happy to return to markets it left earlier. After all, it surely knows Glovo’s business pretty well since they’ve done a number of market swaps. But, for now, that’s pure speculation.
Zooming out, what the on-demand model of app-based urban convenience means for the future of urban environments is a whole other question — and one which both competition and urban regulators will need to ponder very carefully.
If the rush to scale delivery platforms drives unstoppable consolidation that sees smaller players gobbled up by a few global giants — that can then use their size and scale to outcompete local shops — it may spell even more dark times for the traditional High Street and its family-run bodegas which have already been hammered by Internet giants like Amazon.
Touch of a button convenience does carry wider costs.
Interactive voice advertising startup Instreamatic, which can insert interactive voice ads into an audio stream, has raised $6.1 million in a Series A funding led by Progress Ventures led the round, joined by Accomplice, and Google Assistant Investments.
SF-HQ’d Instreamatic lets brands that advertise through streaming music apps and podcasts (for instance) have interactive voice-based dialogues with consumers. So instead of an audio ad playing in a one-way experience (as all adverts currently do), the listener can talk to, and interact, with the ad.
For example, when an Instreamatic advert says “Hello! Need help sleeping?” the microphone on the device it’s playing on opens, and the listener can respond however they like. If they say “Yes” then the brand’s voice (perhaps it’s a mattress brand) will respond with “Then we will sing you a lullaby”. If the user doesn’t respond then the ad experience is over and the content resumes playing. There are also more complex versions of this scenario. The key is that Instreamatic knows what happened and can tailor future ads to match the listener’s past engagement. Here’s an example.
The company says its technology can understand the ‘intent and tone’ of consumers’ natural responses to take the next action.
The upshot is that this AI-fueled voice ad could be coming to an audio stream near you soon. And with audio exploding following the pandemic, the platform is likely to benefit.
CEO Stas Tushinskiy, CEO, Instreamatic said in a statement: “Consumers don’t like being fed annoyingly repetitive ads. Brands are under ever-increasing pressure to make those moments meaningful while supporting strong ROI demands. On the publisher side, audio and video platforms need a better way to prove their audiences and ad inventory deliver their promise to brands. Our voice AI infrastructure, deployed by brands such as IKEA, Infiniti, and HP and across platforms like Pandora and Gaana, is empirically demonstrating that conversational marketing benefits brands, consumers, and publishers alike.”
Instreamatic says its voice ads can reach an average of 12% engagement, with some campaigns reaching 19%. These figures are quite unusual for the online advertising industry – the average CTR of mobile advertising is 0.6%.
The company says that a recent campaign by Infiniti saw 5.5% of listeners who declined the offer in the first conversation ask to receive more information about the vehicle after the second (and more personalized) chat.
Instreamatic also says it can achieve what it calls ‘continuous dialogues’ with consumers, not dissimilar to an Alexa or Siri device.
Because of the platforms complexity, Instreamatic also says it can build up a profile of the user based on an individual consumer’s previous interactions with a brand, allowing it to customize future campaigns.
So far brands that have used the platform include Pandora, Salem Media, Gaana (the Indian streaming music service), as well as a recent deal with Universal Electronics to expand voice ads into the smart-TV industry. It is also working with Triton Digital, one of the larger audio ad networks.
“Consumer demand for audio and video content, and the ubiquity of smart devices delivering that content on-demand, continues to accelerate,” said Nick MacShane, the founding partner at Progress Ventures, the venture capital arm of Progress Partners, a full-service merchant bank. “What hasn’t caught up is how brands and publishers can effectively engage those audiences in the same medium and analytically prove the ROI of their audio and video platform ad spend.”
A competitor to Instreamatic is AdsWizz, which, instead of voice, allows users to shake their phones when they are interested in an ad. But its interactions are obviously, therefore, more limited.
According to Juniper Research, the voice-based ad market will grow to $19 billion in the U.S. by 2022, growing the market share from the $17 billion audio ad market and the $57 billion programmatic ad market. Voice assistant usage is booming. Some estimates put it at over at 3 billion right, and half of all searches are expected to be done via voice. Some 55% of teens use voice search daily.
As well as Tushinskiy, the Instreamatic team also includes cofounder Simon Dunlop (former CEO/Founder of Bookmate, a subscription-based reading and audiobook platform, and Zvuk; Victor Frumkin (co-founder at Zvuk, a mobile music streaming app in Eastern Europe and Bookmate); Ilya Lityuga, CTO, one of the original team members at RuTube; and Andy Whatley, U.S. radio industry veteran.
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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