The pandemic has disrupted international trade, driving up the cost of shipping goods and adding a fresh challenge to the global economic recovery.
The pandemic has disrupted international trade, driving up the cost of shipping goods and adding a fresh challenge to the global economic recovery.
The UK’s medical device regulator has admitted it has concerns about VC-backed AI chatbot maker Babylon Health. It made the admission in a letter sent to a clinician who’s been raising the alarm about Babylon’s approach toward patient safety and corporate governance since 2017.
The HSJ reported on the MHRA’s letter to Dr David Watkins yesterday. TechCrunch has reviewed the letter (see below), which is dated December 4, 2020. We’ve also seen additional context about what was discussed in a meeting referenced in the letter, as well as reviewing other correspondence between Watkins and the regulator in which he details a number of wide-ranging concerns.
In an interview he emphasized that the concerns the regulator shares are “far broader” than the (important but) single issue of chatbot safety.
“The issues relate to the corporate governance of the company — how they approach safety concerns. How they approach people who raise safety concerns,” Watkins told TechCrunch. “That’s the concern. And some of the ethics around the mis-promoting of medical devices.
“The overall story is they did promote something that was dangerously flawed. They made misleading claims with regards to how [the chatbot] should be used — its intended use — with [Babylon CEO] Ali Parsa promoting it as a ‘diagnostic’ system — which was never the case. The chatbot was never approved for ‘diagnosis’.”
“In my opinion, in 2018 the MHRA should have taken a much firmer stance with Babylon and made it clear to the public that the claims that were being made were false — and that the technology was not approved for use in the way that Babylon were promoting it,” he went on. “That should have happened and it didn’t happen because the regulations at that time were not fit for purpose.”
“In reality there is no regulatory ‘approval’ process for these technologies and the legislation doesn’t require a company to act ethically,” Watkins also told us. “We’re reliant on the healthtech sector behaving responsibly.”
The consultant oncologist began raising red flags about Babylon with UK healthcare regulators (CQC/MHRA) as early as February 2017 — initially over the “apparent absence of any robust clinical testing or validation”, as he puts it in correspondence to regulators. However with Babylon opting to deny problems and go on the attack against critics his concerns mounted.
An admission by the medical devices regulator that all Watkins’ concerns are “valid” and are “ones that we share” blows Babylon’s deflective PR tactics out of the water.
“Babylon cannot say that they have always adhered to the regulatory requirements — at times they have not adhered to the regulatory requirements. At different points throughout the development of their system,” Watkins also told us, adding: “Babylon never took the safety concerns as seriously as they should have. Hence this issue has dragged on over a more than three year period.”
During this time the company has been steaming ahead inking wide-ranging ‘digitization’ deals with healthcare providers around the world — including a 10-year deal agreed with the UK city of Wolverhampton last year to provide an integrated app that’s intended to have a reach of 300,000 people.
It also has a 10 year agreement with the government of Rwanda to support digitization of its health system, including via digitally enabled triage. Other markets it’s rolled into include the US, Canada and Saudi Arabia.
Babylon says it now covers more than 20 million patients and has done 8 million consultations and “AI interactions” globally. But is it operating to the high standards people would expect of a medical device company?
In a written summary, dated October 22, of a video call which took place between Watkins and the UK medical devices regulator on September 24 last year, he summarizes what was discussed in the following way: “I talked through and expanded on each of the points outlined in the document, specifically; the misleading claims, the dangerous flaws and Babylon’s attempts to deny/suppress the safety issues.”
In his account of this meeting, Watkins goes on to report: “There appeared to be general agreement that Babylon’s corporate behaviour and governance fell below the standards expected of a medical device/healthcare provider.”
“I was informed that Babylon Health would not be shown leniency (given their relationship with [UK health secretary] Matt Hancock),” he also notes in the summary — a reference to Hancock being a publicly enthusiastic user of Babylon’s ‘GP at hand’ app (for which he was accused in 2018 of breaking the ministerial code).
In a separate document, which Watkins compiled and sent to the regulator last year, he details 14 areas of concern — covering issues including the safety of the Babylon chatbot’s triage; “misleading and conflicting” T&Cs — which he says contradict promotional claims it has made to hype the product; as well as what he describes as a “multitude of ethical and governance concerns” — including its aggressive response to anyone who raises concerns about the safety and efficacy of its technology.
This has included a public attack campaign against Watkins himself, which we reported on last year; as well as what he lists in the document as “legal threats to avoid scrutiny & adverse media coverage”.
Here he notes that Babylon’s response to safety concerns he had raised back in 2018 — which had been reported on by the HSJ — was also to go on the attack, with the company claiming then that “vested interest” were spreading “false allegations” in an attempt to “see us fail”.
“The allegations were not false and it is clear that Babylon chose to mislead the HSJ readership, opting to place patients at risk of harm, in order to protect their own reputation,” writes Watkins in associated commentary to the regulator.
He goes on to point out that, in May 2018, the MHRA had itself independently notified Babylon Health of two incidents related to the safety of its chatbot (one involving missed symptoms of a heart attack, another missed symptoms of DVT) — yet the company still went on to publicly rubbish the HSJ’s report the following month (which was entitled: ‘Safety regulators investigating concerns about Babylon’s ‘chatbot”).
Wider governance and operational concerns Watkins raises in the document include Babylon’s use of staff NDAs — which he argues leads to a culture inside the company where staff feel unable to speak out about any safety concerns they may have; and what he calls “inadequate medical device vigilance” (whereby he says the Babylon bot doesn’t routinely request feedback on the patient outcome post triage, arguing that: “The absence of any robust feedback system significant impairs the ability to identify adverse outcomes”).
Re: unvarnished staff opinions, it’s interesting to note that Babylon’s Glassdoor rating at the time of writing is just 2.9 stars — with only a minority of reviewers saying they would recommend the company to a friend and where Parsa’s approval rating as CEO is also only 45% on aggregate. (“The technology is outdated and flawed,” writes one Glassdoor reviewer who is listed as a current Babylon Health employee working as a clinical ops associate in Vancouver, Canada — where privacy regulators have an open investigation into its app. Among the listed cons in the one-star review is the claim that: “The well-being of patients is not seen as a priority. A real joke to healthcare. Best to avoid.”)
Per Watkins’ report of his online meeting with the MHRA, he says the regulator agreed NDAs are “problematic” and impact on the ability of employees to speak up on safety issues.
He also writes that it was acknowledged that Babylon employees may fear speaking up because of legal threats. His minutes further record that: “Comment was made that the MHRA are able to look into concerns that are raised anonymously.”
In the summary of his concerns about Babylon, Watkins also flags an event in 2018 which the company held in London to promote its chatbot — during which he writes that it made a number of “misleading claims”, such as that its AI generates health advice that is “on-par with top-rated practicing clinicians”.
The flashy claims led to a blitz of hyperbolic headlines about the bot’s capabilities — helping Babylon to generate hype at a time when it was likely to have been pitching investors to raise more funding.
The London-based startup was valued at $2BN+ in 2019 when it raised a massive $550M Series C round, from investors including Saudi Arabia’s Public Investment Fund and a large (unnamed) U.S.-based health insurance company, as well as insurance giant Munich Re’s ERGO Fund — trumpeting the raise at the time as the largest-ever in Europe or U.S. for digital health delivery.
“It should be noted that Babylon Health have never withdrawn or attempted to correct the misleading claims made at the AI Test Event [which generated press coverage it’s still using as a promotional tool on its website in certain jurisdictions],” Watkins writes to the regulator. “Hence, there remains an ongoing risk that the public will put undue faith in Babylon’s unvalidated medical device.”
In his summary he also includes several pieces of anonymous correspondence from a number of people claiming to work (or have worked) at Babylon — which make a number of additional claims. “There is huge pressure from investors to demonstrate a return,” writes one of these. “Anything that slows that down is seen [a]s avoidable.”
“The allegations made against Babylon Health are not false and were raised in good faith in the interests of patient safety,” Watkins goes on to assert in his summary to the regulator. “Babylon’s ‘repeated’ attempts to actively discredit me as an individual raises serious questions regarding their corporate culture and trustworthiness as a healthcare provider.”
In its letter to Watkins (screengrabbed below), the MHRA tells him: “Your concerns are all valid and ones that we share”.
It goes on to thank him for personally and publicly raising issues “at considerable risk to yourself”.
Babylon has been contacted for a response to the MHRA’s validation of Watkins’ concerns. At the time of writing it had not responded to our request for comment.
The startup told the HSJ that it meets all the local requirements of regulatory bodies for the countries it operates in, adding: “Babylon is committed to upholding the highest of standards when it comes to patient safety.”
In one aforementioned aggressive incident last year, Babylon put out a press release attacking Watkins as a ‘troll’ and seeking to discredit the work he was doing to highlight safety issues with the triage performed by its chatbot.
It also claimed its technology had been “NHS validated” as a “safe service 10 times”.
It’s not clear what validation process Babylon was referring to there — and Watkins also flags and queries that claim in his correspondence with the MHRA, writing: “As far as I am aware, the Babylon chatbot has not been validated — in which case, their press release is misleading.”
The MHRA’s letter, meanwhile, makes it clear that the current regulatory regime in the UK for software-based medical device products does not adequately cover software-powered ‘healthtech’ devices, such as Babylon’s chatbot.
Per Watkins there is no approval process, currently. Such devices are merely registered with the MHRA — but there’s no legal requirement that the regulator assess them or even receive documentation related to their development. He says they exist independently — with the MHRA holding a register.
“You have raised a complex set of issues and there are several aspects that fall outside of our existing remit,” the regulator concedes in the letter. “This highlights some issues which we are exploring further, and which may be important as we develop a new regulatory framework for medical devices in the UK.”
An update to pan-EU medical devices regulation — which will bring in new requirements for software-based medical devices, and had been originally intended to be implemented in the UK in May last year — will no longer take place, given the country has left the bloc.
The UK is instead in the process of formulating its own regulatory update for medical device rules. This means there’s still a gap around software-based ‘healthtech’ — which isn’t expected to be fully plugged for several years. (Although Watkins notes there have been some tweaks to the regime, such as a partial lifting of confidentiality requirements last year.)
In a speech last year, health secretary Hancock told parliament that with the government aimed to formulate a regulatory system for medical devices that is “nimble enough” to keep up with tech-fuelled developments such as health wearables and AI while “maintaining and enhancing patient safety”. It will include giving the MHRA “a new power to disclose to members of the public any safety concerns about a device”, he said then.
In the meanwhile the existing (outdated) regulatory regime appears to be continuing to tie the regulator’s hands — at least vis-a-vis what they can say in public about safety concerns. It has taken Watkins making its letter to him public to do that.
In the letter the MHRA writes that “confidentiality unfortunately binds us from saying more on any specific investigation”, although it also tells him: “Please be assured that your concerns are being taken seriously and if there is action to be taken, then we will.”
“Based on the wording of the letter, I think it was clear that they wanted to provide me with a message that we do hear you, that we understand what you’re saying, we acknowledge the concerns which you’re raised, but we are limited by what we can do,” Watkins told us.
He also said he believes the regulator has engaged with Babylon over concerns he’s raised these past three years — noting the company has made a number of changes after he had raised specific queries (such as to its T&Cs which had initially said it’s not a medial device but were subsequently withdrawn and changed to acknowledge it is; or claims it had made that the chatbot is “100% safe” which were withdrawn — after an intervention by the Advertising Standards Authority in that case).
The chatbot itself has also been tweaked to put less emphasis on the diagnosis as an outcome and more emphasis on the triage outcome, per Watkins.
“They’ve taken a piecemeal approach [to addressing safety issues with chatbot triage]. So I would flag an issue [publicly via Twitter] and they would only look at that very specific issue. Patients of that age, undertaking that exact triage assessment — ‘okay, we’ll fix that, we’ll fix that’ — and they would put in place a [specific fix]. But sadly, they never spent time addressing the broader fundamental issues within the system. Hence, safety issues would repeatedly crop up,” he said, citing examples of multiple issues with cardiac triages that he also raised with the regulator.
“When I spoke to the people who work at Babylon they used to have to do these hard fixes… All they’d have to do is just kind of ‘dumb it down’ a bit. So, for example, for anyone with chest pain it would immediately say go to A&E. They would take away any thought process to it,” he added. (It also of course risks wasting healthcare resources — as he also points out in remarks to the regulators.)
“That’s how they over time got around these issues. But it highlights the challenges and difficulties in developing these tools. It’s not easy. And if you try and do it quickly and don’t give it enough attention then you just end up with something which is useless.”
Watkins also suspects the MHRA has been involved in getting Babylon to remove certain pieces of hyperbolic promotional material related to the 2018 AI event from its website.
In one curious episode, also related to the 2018 event, Babylon’s CEO demoed an AI-powered interface that appeared to show real-time transcription of a patient’s words combined with an ’emotion-scanning’ AI — which he said scanned facial expressions in real-time to generate an assessment of how the person was feeling — with Parsa going on to tell the audience: “That’s what we’ve done. That’s what we’ve built. None of this is for show. All of this will be either in the market or already in the market.”
However neither feature has actually been brought to market by Babylon as yet. Asked about this last month, the startup told TechCrunch: “The emotion detection functionality, seen in old versions of our clinical portal demo, was developed and built by Babylon‘s AI team. Babylon conducts extensive user testing, which is why our technology is continually evolving to meet the needs of our patients and clinicians. After undergoing pre-market user-testing with our clinicians, we prioritised other AI-driven features in our clinical portal over the emotion recognition function, with a focus on improving the operational aspects of our service.”
“I certainly found [the MHRA’s letter] very reassuring and I strongly suspect that the MHRA have been engaging with Babylon to address concerns which have been identified over the past three year period,” Watkins also told us today. “The MHRA don’t appear to have been ignoring the issues but Babylon simply deny any problems and can sit behind the confidentiality clauses.”
In a statement on the current regulatory situation for software-based medical devices in the UK, the MHRA told us:
The MHRA ensures that manufacturers of medical devices comply with the Medical Devices Regulations 2002 (as amended). Please refer to existing guidance.
The Medicines and Medical Devices Act 2021 provides the foundation for a new improved regulatory framework that is currently being developed. It will consider all aspects of medical device regulation, including the risk classification rules that apply to Software as a Medical Device (SaMD).
The UK will continue to recognise CE marked devices until 1 July 2023. After this time, requirements for the UKCA Mark must be met. This will include the revised requirements of the new framework that is currently being developed.
The Medicines and Medical Devices Act 2021 allows the MHRA to undertake its regulatory activities with a greater level of transparency and share information where that is in the interests of patient safety.
The regulator declined to be interviewed or response to questions about the concerns it says in the letter to Watkins that it shares about Babylon — telling us: “The MHRA investigates all concerns but does not comment on individual cases.”
“Patient safety is paramount and we will always investigate where there are concerns about safety, including discussing those concerns with individuals that report them,” it added.
Watkins raised one more salient point on the issue of patient safety for ‘cutting edge’ tech tools — asking where is the “real life clinical data”? So far, he says the studies patients have to go on are limited assessments — often made by the chatbot makers themselves.
“It’s one quite telling thing about this sector is the fact that there’s very little real life data out there,” he said. “These chatbots have been around for a good few years now… And there’s been enough time to get real life clinical data and yet it hasn’t appeared and you just wonder if, is that because in the real-life setting they are actually not quite as useful as we think they are?”
Under a proposed law, companies in Europe could be punished if they fail to pay women and men the same salaries.
The move, under new E.U. rules, is part of an intensifying global competition for doses as vaccine shortages hamper rollouts and variants raise fears of virus surges.
Dija, the London-based grocery delivery startup, is officially launching today and confirming that it raised £20 million in seed funding in December — a round that we first reported was partially closed the previous month.
Backing the company is Blossom Capital, Creandum and Index Ventures, with Dija seemingly able to raise pre-launch. In fact, there are already rumours swirling around London’s venture capital community that the upstart may be out raising again already — a figure up to £100 million was mooted by one source — as the race to become the early European leader in the burgeoning “dark” grocery store space heats up.
Over the last few months, a host of European startups have launched with the promise of delivering grocery and other convenience store items within 10-15 minutes of ordering. They do this by building out their own hyper-local, delivery-only fulfilment centres — so-called “dark stores” — and recruiting their own delivery personnel. This full-stack or vertical approach and the visibility it provides is then supposed to produce enough supply chain and logistics efficiency to make the unit economics work, although that part is far from proven.
Earlier this week, Berlin-based Flink announced that it had raised $52 million in seed financing in a mixture of equity and debt. The company didn’t break out the equity-debt split, though one source told me the equity component was roughly half and half.
Others in the space include Berlin’s Gorillas, London’s Jiffy and Weezy, and France’s Cajoo, all of which also claim to focus on fresh food and groceries. There’s also the likes of Zapp, which is still in stealth and more focused on a potentially higher-margin convenience store offering similar to U.S. unicorn goPuff. Related: goPuff itself is also looking to expand into Europe and is currently in talks to acquire or invest in the U.K.’s Fancy, which some have dubbed a mini goPuff.
However, let’s get back to Dija. Founded by Alberto Menolascina and Yusuf Saban, who both spent a number of years at Deliveroo in senior positions, the company has opened up shop in central London and promises to let you order groceries and other convenience products within 10 minutes. It has hubs in South Kensington, Fulham and Hackney, and says it plans to open 20 further hubs, covering central London and Zone 2, by the summer. Each hub carries around 2,000 products, claiming to be sold at “recommended retail prices”. A flat delivery fee of £1.99 is charged per order.
“The only competitors that we are focused on are the large supermarket chains who dominate a global $12 trillion industry,” Dija’s Menolascina tells me when I ask about competitors. “What really sets us apart from them, besides our speed and technology, is our team, who all have a background in growing and disrupting this industry, including myself and Yusuf, who built and scaled Deliveroo from the ground up”.
Menolascina was previously director of Corporate Strategy and Development at the takeout delivery behemoth and held several positions before that. He also co-founded Everli (formerly Supermercato24), the Instacart-styled grocery delivery company in Italy, and also worked at Just Eat. Saban is the former chief of staff to CEO at Deliveroo and also worked at investment bank Morgan Stanley.
During Dija’s soft-launch, Menolascina says that typical customers have been doing their weekly food shop using the app, and also fulfilling other needs, such as last-minute emergencies or late night cravings. “The pain points Dija is helping to solve are universal and we built Dija to be accessible to everyone,” he says. “It’s why we offer products at retail prices, available in 10 minutes — combining value and convenience. Already, Dija is becoming a key service for parents who are pressed for time working from home and homeschooling, as one example”.
Despite the millions of dollars being pumped into the space, a number of VCs I’ve spoken to privately are skeptical that fresh groceries with near instant delivery can be made to work. The thinking is that fresh food perishes, margins are lower and basket sizes won’t be large enough to cover the costs of delivery.
“This might be the case for other companies, but almost everyone at Dija comes from this industry and knows exactly what they are doing, from buying and merchandising to data and marketing,” Menolascina says, pushing back. “It’s also worth pointing out that we are a full-stack model, so we’re not sharing our margin with other parties. In terms of the average basket size, it varies depending on the customer’s need. On one hand, we have customers who do their entire grocery shop through Dija, while on the other hand, our customers depend on us for emergency purchases e.g. nappies, batteries etc.”
On pricing, he says that, like any retail business, Dija buys products at wholesale prices and sells them at recommended retail prices. “Going forward, we have a clear roadmap on how we generate additional revenue, including strategic partnerships, supply chain optimisation and technology enhancements,” adds Menolascina.
Meanwhile, TechCrunch has learned that prior to launching its own app, Dija ran a number of experiments on takeout marketplace Deliveroo, including selling various convenience store items, such as potato chips and over-the-counter pharmaceuticals. If you’ve ever ordered toiletry products from “Baby & Me Pharmacy” or purchased chocolate sweets from “Valentine’s Vows,” you have likely and unknowingly shopped at Dija. Those brands, and a number of others, all delivered from the same address in South Kensington.
“Going direct to consumer without properly testing pick & pack is a big risk,” Menolascina told me in a WhatsApp message a few weeks ago, confirming the Deliveroo tests. “We created disposable virtual brands purely to learn what to sell and how to replenish, pick & pack, and deliver”.
Scientists want to inoculate every adult in one Austrian district, in a real-world test of how the Pfizer-BioNTech vaccine works against the variant first seen in South Africa.
With most of us locked into a square video box on platforms like Zoom, the desire to break away and perhaps wander around a virtual space is strong. These new ways of presenting people – as small circles of videos placed in a virtual space where they can move around – has appeared in various forms, like ‘virtual bars’ for the last few months during global pandemic lockdowns. Hey, I even went to a few virtual bars myself! Although the drinks from my fridge could have been better…
The advantage of this spatial approach is it gives a lot more ‘agency’ to the user. You feel, at least, a bit more in control, as you can make a ‘physical’ choice as to where you go, even if it is only still a virtual experience.
Now SpatialChat, one of the first startups with that approach which launched on ProductHunt in April last year, is upping the game with a new design and the feature of persistent chats. The product debuted on ProductHunt on April 20, 2020, and rose to No. 3 app of the day. The web-based platform has been bootstrapped the founders with their own resources.
SpatialChat now adding a special tier and features for teams running town hall meetings and virtual offices, and says it now has more than 3,000 organizations as paying customers, with more than 200,000 total monthly active users.
The startup is part of a virtual networking space being populating by products such as
Teamflow, Gather, and Remo. Although it began as a online networking events service, its now trying to re-position as a forum for multi-group discussions, all the way up from simple stand-up meetings to online conferences.
SpatialChat uses a mix of ‘proximity’ video chats, screen sharing, and rooms for up to 50 people. It’s now putting in pricing plans for regular, weekly, and one-time use cases. It says it’s seen employees at Sony, Panasonic, Sega, LinkedIn, Salesforce, and McKinsey, as well as educators and staff at 108 American universities, including Harvard, Stanford, Yale, and MIT, use the platform.
Almas Abulkhairov, CEO and Co-founder of SpatialChat says: “Slack, Zoom, and Microsoft Teams represent a virtual office for many teams but most of our customers say these apps aren’t a good fit for that. They don’t provide the same serendipity of thought you get working shoulder to shoulder and “Zoom fatigue” became a term for a reason. We want to bring the best from offline work.”
Konstantin Krasov, CPO at DataSouls, who used the platform, said: “We had 2500 people in attendance during a 2-day event that we hosted for our community of 50,000 Data Scientists. SpatialChat enabled us to make a cool networking event, Q/A and AMA with thought leaders in data science.”
A lot of our communication these days with each other is digital, and today one of the companies enabling that — with APIs to build chat experiences into apps — is announcing a round of funding on the back of some very strong growth.
Stream, which lets developers build chat and activity streams into apps and other services by way of a few lines of code, has raised $38 million, funding that it will be using to continue building out its existing business as well as to work on new features.
Stream started out with APIs for activity feeds, and then it expanded to chat, which today can be integrated into apps built on a variety of platforms. Currently, its customers integrate third-party chatbots and use Dolby for video and audio within Stream, but over time, these are all areas where Stream itself would like to do more.
“End-to-end cryption, chatbots: we want to take as many components as we can,” said Thierry Schellenbach, the CEO who co-founded the startup with the startup’s CTO Tommaso Barbugli in Amsterdam in 2015 (the startup still has a substantial team in Amsterdam headed by Barbugli, but its headquarters is now in Boulder, Colorado, where Schellenbach eventually moved).
The company already has amassed a list of notable customers, including Ikea-owned TaskRabbit, NBC Sports, Unilever, Delivery Hero, Gojek, eToro and Stanford University, as well as a number of others that it’s not disclosing across healthcare, education, finance, virtual events, dating, gaming and social. Together, the apps Stream powers cover more than 1 billion users.
This Series B round is being led by Felicis Ventures’ Aydin Senkut, with previous backers GGV Capital and 01 Advisors (the fund co-founded by Twitter’s former CEO and COO, Dick Costolo and Adam Bain) also participating.
Alongside them, a mix of previous and new individual and smaller investors also participated: Olivier Pomel, CEO of Datadog; Tom Preston-Werner, co-founder of GitHub; Amsterdam-based Knight Capital; Johnny Boufarhat, founder and CEO of Hopin; and Selcuk Atli, co-founder and CEO of social gaming app Bunch (itself having raised a notable round of $20 million led by General Catalyst not long ago).
That list is a notable indicator of what kinds of startups are also quietly working with Stream.
The company is not disclosing its valuation but Schellenbach hints that it is “6x its chat revenues.”
Indeed, the Series B speaks of a moment of opportunity: it is coming only about six months after the startup raised a Series A of $15 million, and in fact Stream wasn’t looking to raise right now.
“We were not planning to raise funding until later this year but then Aydin reached out to us and made it hard to say no,” Schellenbach said.
“More than anything else, they are building on the platforms in the tech that matters,” Senkut added in an interview, noting that its users were attesting to a strong return on investment. “It’s rare to see a product so critical to customers and scaling well. It’s just uncapped capability… and we want to be a part of the story.”
That moment of opportunity is not one that Stream is pursuing on its own.
Some of the more significant of the many players in the world of API-based communications services like messaging, activity streams — those consolidated updates you get in apps that tell you when people have responded to a post of yours or new content has landed that is relevant to you, or that you have a message, and so on — and chat include SendBird, Agora, PubNub, Twilio and Sinch, all of which have variously raised substantial funding, found a lot of traction with customers, or are positioning themselves as consolidators.
That may speak of competition, but it also points to the vast market there for the tapping.
Indeed, one of the reasons companies like Stream are doing so well right now is because of what they have built and the market demand for it.
Communications services like Stream’s might be best compared to what companies like Adyen (another major tech force out of Amsterdam), Stripe, Rapyd, Mambu and others are doing in the world of fintech.
As with something like payments, the mechanics of building, for example, chat functionality can be complex, usually requiring the knitting together of an array of services and platforms that do not naturally speak to each other.
At the same time, something like an activity feed or a messaging feature is central to how a lot of apps work, even if they are not the core feature of the product itself. One good example of how that works are food ordering and delivery apps: they are not by their nature “chat apps” but they need to have a chat option in them for when you do need to communicate with a driver or a restaurant.
Putting those forces together, it’s pretty logical that we’d see the emergence of a range of tech companies that both have done the hard work of building the mechanics of, say, a chat service, and making that accessible by way of an API to those who want to use it, with APIs being one of the more central and standard building blocks in apps today; and a surge of developers keen to get their hands on those APIs to build that functionality into their apps.
What Stream is working on is not to be confused with the customer-service focused services that companies like Zendesk or Intercom are building when they talk about chat for apps. Those can be specialized features in themselves that link in with CRM systems and customer services teams and other products for marketing analytics and so on. Instead, Stream’s focus are services for consumers to talk to other consumers.
What is a trend worth watching is whether easy-to-integrate services like Stream’s might signal the proliferation of more social apps over time.
There is already at least one key customer — which I am now allowed to name — that is a steadily growing, still young social app, which has built the core of its service on Stream’s API.
With just a handful of companies — led by Facebook, but also including ByteDance/TikTok, Tencent, Twitter, Snap, Google (via YouTube) and some others depending on the region — holding an outsized grip on social interactions, easier, platform-agnostic access to core communications tools like chat could potentially help more of these, with different takes on “social” business models, find their way into the world.
“Stream’s technology addresses a common problem in product development by offering an easy-to-integrate and scalable messaging solution,” said Dick Costolo of 01 Advisors, and the former Twitter CEO, in a statement. “Beyond that, their team and clear vision set them apart, and we ardently back their mission.”
Hepster, an insurtech platform from Germany, has raised $10 million in a Series A funding led by Element Ventures. Also participating was Seventure Partners, MBMV, and GPS Ventures, as well as previous investors. The funds will be used to broaden the Hepster insurance ecosystem and scale up its network, with an emphasis on automation.
The German insurance market is famously slow at adopting new practices, and Hepster is part of a new wave of insurtech startups in the country taking advantage of this. It allows businesses to build insurance policies from scratch, matched specifically to the needs of their individual service or industry. E-commerce players, for instance, can then embed these insurance products into the e-commerce journey.
Its products are therefore better suited to the new sector of, for example, shared e-bike schemes and peer-to-peer rental platforms, which are rarely covered by traditional brokers in Germany. However, it also caters to traditional, established industries as well.
It now has more than 700 partners, including European bike retailers and rental companies Greenstorm Mobility and Baron Mobility, as well as Berlin-based cargo bike provider Citkar and Munich e-bike startup SUSHI.
Christian Range, Hepster co-founder and CEO, said in a statement: “Hepster is now a key player within the European insurance market. Our state-of-the-art technology with our API-driven ecosystem, as well as our highly service-oriented approach, sets us apart.”
In interview, he told me: “Germany is the toughest market with the most regulations, the most laws. We have a saying in Germany if you can make it in Germany, you can make it everywhere. Also, it’s a big market in terms of selling insurance products because Germans really like insurance in every regard. So there is huge market potential in Germany I think.”
Michael McFadgen, partner at Element Ventures, said: “As new industries and business models emerge, companies need much more flexible insurance propositions than what is currently being offered by traditional brokers. Hepster is the breakout company in the space, and their focus on embedded insurance will pay dividends in years to come.”
Fintech startup ClearGlass Analytics has closed a £2.6 million ($3.6M) funding round for its platform, which aims to create greater transparency on fees in the long-term savings market, such as pensions and the wider asset management market.
The £2.6m seed round includes European VC Lakestar and Outward VC, the venture arm of Investec, as well as several angels from both the asset management and pension fund worlds. These include Ruston Smith, a pension trustee; Richard Butcher, Chair of the PLSA (UK pension trade body); Chris Wilcox, former Global Head of JP Morgan Asset Management; and Rob O’Rahilly, Sikander Ilyas and Alex Large, also former JP Morgan employees.
ClearGlass is targeting the £1.5trillion mature ‘Defined Benefit’ pension schemes market and claims to now work with over 500 DB pension funds. It will use the funding to expand into the UK Defined Contribution pension market, and consolidate its early footprint in Europe and Africa.
How ClearGlass works is that it acts as a data interface between asset managers and their clients. Pension funds then use the platform to see all of their investment costs in one place, thus getting more data than usual from more asset managers and other suppliers. This helps the funds see the ‘true cost’ of what they are paying for the management of their investments. ClearGlass claims to be able to uncover the kinds of costs of asset management that, in some instances, can be more than double those expected.
The startup recently did an analysis of the cost and performance of over 400 asset managers. It found that while most UK asset managers were meeting minimum standards for data delivery, quality, and accuracy, 30 (including some powerful players) did not pass their tests.
The company was founded by Dr. Christopher Sier, a World Bank and FCA expert who previously developed the cost transparency standard at the request of the FCA, and co-founders Ritesh Singhania and Kunal Varma.
Sier, founder and CEO, said: “Finding your costs are so much larger is shocking, but also something to be celebrated. These incremental costs were always there, they just weren’t exposed, and now you can identify those and bring about change. You can’t manage what you don’t measure.”
In an interview with TechCrunch, Ritesh Singhaniam, COO, said getting the data about pension funds is normally “super challenging and complicated. And second of all, even when you got the data, you couldn’t make head nor tail of it because you can’t compare it across funds. What we have done is that we have been the line of communication between the manager and the pension fund. So we have built a piece of technology that helps with the communication between the asset managers, and the pension funds to be able to collect that data, check that data. And finally, give them something that doesn’t require them to spend 20 hours to understand it.”
ClearGlass was incubated by the Founders Factory accelerator.
Wipro said on Thursday it has reached an agreement to buy 22-year-old British tech consultancy firm Capco for $1.45 billion as the major Indian software exporter looks to win customers in Europe and Asia.
The Indian firm, which identifies U.S. as its biggest market, said the two companies share “complimentary business models” and expects the deal to close by the end of June.
London-headquartered Capco’s clients include “many marquee names” in the global financial services industry including “Boards and C-Suites” in the banking, capital markets, wealth and asset management and insurance sectors, the Indian firm said in a filing (PDF) to the stock exchange in the country.
Privately-held firm Capco, which employs about 5,000 consultants and had raised about $80 million from investors 20 years ago, is “widely acknowledged for its deep domain and consulting expertise, risk and regulatory offerings and thought leadership around key industry technology challenges and opportunities. In addition, Capco services clients in the energy and commodities trading sector,” the two firms said in a joint press release.
“Together, we can deliver high-end consulting and technology transformations, and operations offerings to our clients. Wipro and Capco share complimentary business models and core guiding values, and I am certain that our new Capco colleagues will be proud to call Wipro home,” said Thierry Delaporte, CEO and Managing Director of Wipro, who assumed the top role last year.
Delaporte replaced Abidali Neemuchwala, who led the company for four years and fell short of delivering Wipro’s target of becoming a $15 billion firm by 2020. The company’s revenue at the end of March last year was $8.1 billion.
Under the new leadership, Wipro is increasingly chasing clients in Europe and Asia. The firm last year landed orders from European clean energy firms Fortum and E.On. It has publicly stated that it is also looking to acquire firms.
“Together, we will offer bespoke transformational end-to-end solutions, now powered by innovative technology at scale, to create a new leading partner to the financial services industry. We look forward to leveraging the complementary capabilities and similar cultures of both companies to drive industry change and offer exciting opportunities for both our clients, and our people,” said Lance Levy, CEO of Capco, in a statement.
Food delivery start-up Deliveroo has today confirmed its £8bn ($11bn) stock market floatation in London, something which was on the cards previously.
The eight-year-old company will use the “dual-class” innovation which has been introduced to the London Stock Exchange by the UK government in a bid to keep UK companies from being lured over to the NASDAQ, as well as attract continental European listings.
The listing will be on the London Stock Exchange’s “premium” segment. Dual-class shares are popular in the US – where it is used by companies such as Facebook and Alphabet – because it allows founders to take a longer view of strategy and retain more control of their companies during decisions such as mergers and acquisitions.
Will Shu, CEO of Deliveroo, said in a statement: “Deliveroo was born in London. This is where I founded the company and delivered our first order. London is a great place to live, work, do business and eat. That’s why I’m so proud and excited about a potential listing here.”
Deliveroo’s business has boomed during pandemic-related lockdowns – it posted six-months of consecutive profits throughout this period – and now plans to expand.
Although Deliveroo’s listing came comes just a day after the British government gave the green light to recommendations for the dual-class shares, Deliveroo’s listing was always expected to be in London, given it’s UK base, so this news looks to have a political tinge attached to it. Indeed, the press release was handily issued with a supportive statement from the Chancellor of the Exchequer.
Claudia Arney, Chair of Deliveroo, said: “The time-limited dual-class structure would provide Will and his team with the certainty needed to execute against their ambitious growth plan to become the definitive online food company.”
Deliveroo’s plans include expanding its ‘ghost’ kitchens; on-demand grocery; extending its Plus subscription service; and offering its Signature service to restaurants, which allows customers to order delivery via a restaurants’ own website.
The multibillion-pound IPO will be a shot in the arm for The City after Amsterdam overtook London as Europe’s largest share trading center in January, post-Brexit.
Deliveroo pegged a $7 billion valuation in January after raising $180 million from investors.
Bolt, an Uber competitor that is building an international on-demand network of services to transport people, food and other items in cars, scooters and bikes across Europe and Africa, has picked up some strategic funding today to continue expanding its business in emerging markets.
The International Finance Corporation, a division of the World Bank, is investing €20 million ($24 million) in the Tallinn, Estonia-based startup to open up more services across Eastern Europe and Africa, with a specific mention of more services in Ukraine and Nigeria, two of those regions’ biggest economies, and more innovative services to target demographic groups that might be under-represented or under-served, such as women.
Funding from the IFC is a significant endorsement of a company, if at the same time a relatively small amount compared to Bolt’s wider fundraising efforts.
Most recently, it raised $182 million in December at a significant hike to its previous valuation (which had been $1.9 billion). A Bolt spokesperson tells us that, once again, “our valuation has grown with the latest funding round, but we’re not disclosing the updated number.” (For the record, in December we calculated that the valuaton was probably around $4.3 billion, based on a 1.5x multiple on GMV of €3.5 billion, figures provided to us by CEO and co-founder Markus Villig. That figure wasn’t disputed, nor confirmed, though.)
People may not consider the IFC in the same breath as more typical VCs like SoftBank, Sequoia, Index Ventures, or Andreessen Horowitz, but it’s a significant player when it comes to backing startups around the world. Last year alone it invested $22 billion in companies, it said.
Backing a transportation startup is a notable move for it, considering that a lot of the IFC’s interest in tech has typically been around financial services. For example, it has also invested money into CurrencyCloud, Remitly, CompareAsiaGroup, and Kreditech, among others.
But improving transportation is another development target — in particular when you consider that companies like Bolt are built like marketplaces that provide income to people, infrastructure to businesses (in the form of delivery), on top of its most obvious service helping consumers get around.
“We are looking forward to partnering with IFC to further support entrepreneurship, empower women and increase access to affordable mobility services in Africa and Eastern Europe,” said Villig, in a statement. “Together with the investment from the European Investment Bank last year, we are proud to have sizable and strategically important institutions backing us and recognizing the strategic value Bolt is providing to emerging economies”.
Bolt’s efforts in emerging markets have long been one the key ways that the company differentiates itself from Uber — perhaps logical, considering that the company itself was founded in an emerging economy. Since launching in 2013, it has picked up over 50 million customers and more than 1.5 million drivers in 40 countries, including 400,000 drivers in 70 cities on the African continent.
That strategy has also grown over time to include services for under-represented groups in these under-represented markets. Bolt is piloting a “Women Only” ride-hailing service in South Africa, with female drivers and passengers to improve job opportunities and general safety, one of the programs that the IFC funding will support, it said.
“Technology can and should unlock new pathways for sustainable development and women’s empowerment,” said Stephanie von Friedeburg, IFC Senior Vice President of Operations, in a statement. “Our investment in Bolt aims to help tap into technology to disrupt the transport sector in a way that is good for the environment, creates more flexible work opportunities for women, and provides safer and more affordable transportation access in emerging markets.”
Countingup, the U.K. fintech offering a business current account with built-in accounting features, has closed £9.1 million in Series A investment. Leading the round is Framework Venture Partners, with participation from Gresham House Ventures, Sage and existing investors.
It’s noteworthy that Countingup has previously taken investment from ING, and the addition of Sage as a backer is interesting since both could help the startup reach more business customers. It also potentially sets up one future road to exit. However, let’s not get ahead of ourselves.
Founded in 2017 by Tim Fouracre, who previously founded cloud accounting software Clear Books, Countingup now boasts over 34,000 business customers. The company’s long-term vision is to be the one “financial hub” for micro businesses in the U.K. and beyond. Its initial “attack vector” was to combine a business bank account with bookkeeping features to help automate the filing of accounts — a major time sink and pain-point for sole traders and small businesses.
Today that includes a business bank account with its own sort code and account number, a Mastercard for making payments and support for faster payments and direct debits. On the accounting software side, Countingup currently supports automated bookkeeping, invoicing, receipts, payment of bills, tax estimates and profit and loss reporting.
In addition, accountants can be given limited access via the web to better support clients banking with Countingup. This includes the option for business owners to share real-time bookkeeping data with their accountant, “eliminating the pains of re-authorisation requests, data lags, duplicates, and inaccuracies,” says the fintech.
To that end, Fouracre tells me the new funding will be used to quickly scale up the team from 30 to 80 people. “This will accelerate our roadmap enabling more swim lanes of product work to be on the go concurrently,” he says.
That roadmap includes tax filing, new financial services (e.g. loans, card payment services) and multi-currency invoicing and payments to support the 33% of SMEs in the U.K. that trade internationally. A web version of the app for small business customers is planned too.
“We will also be building out our sales and marketing teams for more aggressive growth,” adds Fouracre.
Countingup’s business model combines both SaaS and fintech. On the SaaS side, the company earns monthly subscription fees. On the fintech side, it generates revenue from banking activity (e.g. interchange fees) on Mastercard spend. In the future, that will likely include other sources of income via offering credit, payments and FX.
Comments Neal Watkins, EVP, Small Business Segment at Sage: “Investing in high-growth SaaS businesses is core to our strategy to enable small businesses and accountants to survive and thrive. This is an exciting opportunity to be part of the startup journey in a new way as businesses explore the benefits of bringing accounting and financial services together”.
Fintech startup Revolut has its own banking license in the European Union since late 2018. It lets the company offer some additional financial services without partnering with third-party companies. And the company is going to let customers switch to Revolut Bank in 10 additional countries.
The Bank of Lithuania has granted a specialized license — it isn’t a full-fledged license per se as it focuses on some activities. The company is taking advantage of European passporting rules to operate in other European countries. Right now, Revolut takes advantage of its banking license in two countries — Poland and Lithuania.
In Lithuania for instance, you can apply for a credit card with a credit limit that’s twice the value of your monthly salary (up to €6,000). The company also offers personal loans between €1,000 and €15,000. You can pay back over 1 to 60 months.
Now, customers in Bulgaria, Croatia, Cyprus, Estonia, Greece, Latvia, Malta, Romania, Slovakia and Slovenia will be able to become Revolut Bank customers. It’s not a transparent process as you need to get through a few steps to carry your account over.
But once this process is done, your deposits are protected under the deposit guarantee scheme. If Revolut Bank shutters at some point down the road, customers can claim up to €100,000 thanks to the scheme — both euros and foreign currencies are protected.
You can expect new credit products in the 10 new markets. Overall, Revolut has attracted 15 million customers. The company recently announced that it was also applying for a banking license in the U.K., its home country and its biggest market.
Prime Minister Viktor Orban of Hungary withdrew his party from the center-right grouping in the European Parliament, heading off a move to expel them over democratic backsliding at home.
In a year where mass transit on airplanes, trains and buses has had lower traveler numbers in the wake of the Covid-19 pandemic, one of the startups hoping to pioneer a totally new approach to getting individuals from A to B — flying taxis — has raised some significant funding.
Volocopter, a startup out of southern Germany (Bruchsal, specifically) that has been building and testing electric VTOL (vertical take-off and landing) aircraft, has picked up €200 million (about $241 million) in a Series D round of funding. Alongside its aircraft, Volocopter has also been building a business case in which its vessels will be used in a taxi-style fleet in urban areas. CEO Florian Reuter tells us that live services are now two years out for the two vehicle models it has been developing.
“We are actually expecting to certify our VoloCity in around two years and start commercial air taxi operations right after,” he said. “Paris and Singapore are in pole position [as the first cities], where Paris wants to get have electric air taxis established for the 2024 Olympics. With our VoloDrone we expect first commercial flights even earlier than with our VoloCity.”
To date, Volocopter has shown off its craft in flights in Helsinki, Stuttgart, Dubai, and over Singapore’s Marina Bay. In addition to Europe and Asia, it also wants to launch services in the U.S..
For some context, this is basically on track with what the company had previously projected: in 2019 — when Volocopter raised an initial $55 million in funding for its Series C (finally closed out at €87 million, around $94 million) — the company said it was three years away from service.
This latest (oversubscribed) Series D includes investments from a mix of financial and strategic backers. Funds managed by BlackRock; global infrastructure company Atlantia S.p.A.; Avala Capital; automotive parts behemoth Continental AG; Japan’s NTT via its venture capital arm; Tokyo Century, a Japanese leasing company; multiple family offices are all new investors, among others. Volocopter also said that all of its existing investors — that list includes Geely, Daimler, DB Schenker, Intel Capital, btov Partners, Team Europe, and Klocke Holding and more — also contributed to the round.
If that sounds like a big list, it’s somewhat intentional, as the task of what Volocopter is complex and requires a wide ecosystem of other players, said Rene Griemens, the company’s CFO.
“Getting urban air mobility off the ground requires a full ecosystem that we are developing right now. Many of our strategic partners will support us on different aspects of the supply chain, scaling components, entering markets, improving operations amongst others. Most of them know certain aspects of our business model really well (eg. Japan Airlines for aviation, Atlantia for infrastructure),” he said. “Their investment is a reflection of their excitement about Volocopter as a leader in building the entire ecosystem of UAM, thereby giving credibility and comfort for purely financial investors.”
He added that many of these companies have a very “hands-on partnership” with Volocopter. “DB Schenker, for example, is rolling out leading-edge heavily-load electric logistics drones together with us around the globe.”
The company has now raised nearly $390 million. We’re asking for an updated valuation, but for some context, PitchBook data estimates its valuation now at $624 million.
Founded in 2011, Volocopter has now been working on its idea — distinctive for its very wide circular design that sits where the rotor on a helicopter would be — for a whole decade, and in many regards it’s the classic idea of a moonshot in action.
It has yet to make any money, and the product that it’s building to do so is very groundbreaking — flying into completely unchartered territory, so to speak — and therefore ultimately untested.
However, all of these have faced various hurdles ranging from investor lawsuits to bankruptcies, accidents, mothballed projects and divestments (perhaps most notably, Joby scooped up Elevate last year as Uber stepped away from costly moonshots).
And most importantly, none of them are flying commercially yet. With Volocopter (as with the others), investors have taken a long-term bet here on a concept and a team it believes can deliver.
For now, the company says that technology is no longer the barrier, and neither it seems are regulators, who are, in the pandemic, more focused on considering new approaches to old problems to improve efficiency and acknowledge that we might have to do things a little differently from now on, in the wake of new demands from public health, and the public.
In the case of VTOL craft, the promise has always been that they could bypass a lot of the issues with street congestion in urban areas, and provide a more environmental alternative to gas-guzzling, present-day transportation modes.
The challenge, on the other hand, has been determining the safety both of completely new devices, and also of the traffic and other systems that they would operate under. With the idea being that ultimately these craft would be autonomous, that adds another complex twist.
Interestingly, regulators in different markets that might have been more skeptical of new concepts seem to be more open to considering them differently now with the pandemic at hand. This has played out in other arenas, too, such as the electric scooter market in the UK, which saw a bump in activity after regulators long skeptical gave them a provisional nod last year, citing the need for more individualized transportation options in a pandemic-hit country.
Volocopter’s model is based around transporting one person or small parties, so in a sense might be attractive here too.
“There aren’t any major hurdles anymore in terms of the technology as such,” said Retuer. “It is now all about execution. EASA has defined what is necessary to get electric air taxis certified to the highest safety level in aviation. We have the best technology in the market to certify to EASA’s high safety standards and will keep our heads down to finalize the few remaining steps to certification.”
In contrast, he said the other challenges that remain are those of any highly technical startup: “Our largest challenge right now is talent acquisition,” he said. “We are looking for the best talents worldwide and growing our team quickly now, so that we can accelerate on the technical and market development sides. Especially in the markets where we will open early routes, such as Paris, Singapore, China and Japan, we are going full speed in preparing everything necessary from digital infrastructure to landing sites, city approvals and more.”
Vestiaire Collective announced a new funding round. The company has raised $216 million, or €178 million — it has reached a valuation above $1 billion, making it a unicorn. French fashion and luxury group Kering is leading the round with Tiger Global Management. Kering now owns 5% of Vestiaire Collective.
The startup operates an online marketplace where you can find pre-owned luxury and fashion items. And it’s a complicated industry as you don’t want to buy a damaged item or a cheap knockoff. The company controls and authenticate some items before they reach the buyer. If you opt for direct shipping, you can get reimbursed if there’s something wrong with what you ordered.
In addition to the two lead investors, many of the company’s existing shareholders are investing once again, such as Vestiaire Collective’s own CEO Max Bittner, Bpifrance’s Large Venture fund, Condé Nast, Eurazeo through Eurazeo Growth and Idinvest Venture, Fidelity International, Korelya Capital, Luxury Tech Fund and Vitruvian Partner.
As you may have noticed, it’s been a bit harder to travel and buy fashion items in store. Many fashion e-commerce companies have been thriving during the coronavirus outbreak, and Vestiaire Collective is one of them. Transaction volume doubled in 2020 compared to 2019. There are 140,000 new listings every week.
In addition to the current pandemic, many consumers are concerned about the impact of fashion on the environment. At the lower end of the spectrum, retailers and fast fashion brands encourage you to buy more and more stuff as trends change with each season. At the higher end of the spectrum, luxury brands don’t want to undermine the value of their goods by putting items on sale to clear room for a new collection.
That’s why Vestiaire Collective is particularly well positioned to find new customers who are looking for quality goods that are going to last for a while and that haven’t been specifically produced for them. Similarly, people can sell their stuff instead of throwing them away.
While Vestiaire Collective originally started in Europe, the company is now growing rapidly in the U.S. and Asia. “As of January 2021, local sellers in those regions had increased their items sold by more than 250% year-over-year,” Tiger Global partner Griffin Schroeder said in the release.
With today’s funding round, the company plans to further develop partnerships with brands through buy-back circular solutions. The company also wants to encourage more people to sell something every time they buy something. Vestiaire Collective aims to be carbon neutral by 2026 and get the B Corp certification. The startup will also hire 155 people in the technology team.
Semih Korkmaz and Hantz Févry launched Stoovo in 2019 as a way to help gig workers make the best use of their time.
Févry, who immigrated to the U.S. from Haiti, knew first hand the struggles that come with part time work from his days as a student at Stonybrook University. While there bouncing from job to job, Févry would feel the sting associated with hidden fees, unkept promises, and variability of part-time labor.
The time at Stonybrook was also when Févry got his first taste of entrepreneurship. In 2010 and 2011 Févry said the Dean of the University’s business school let the budding business owner cut back on his hours so he could start iTrade International, an import-export business selling earthquake detection equipment in Haiti.
That first taste of tech and business development eventually landed Févry a job at Google in Hong Kong and offered him the chance to travel around the world. After a stint in Europe, Févry moved back to the U.S. where he set to work building Stoovo.
The question on his mind was this: How can we leverage technology to help gig workers or people taking short term assignments?
Févry and his co-founder Korkmaz envisioned Stoovo as a way to level they playing field by providing gig workers with information about the highest paying jobs available on the gig platforms at any one time. “What the platforms are doing is they are optimizing to make sure that they’re responding to demand,” Févry said. “What we do is use the same approach to predict what will be the demand, where will be the demand, what will be the competition, and what’s the payout.”
The company’s software advises gig workers on the optimum time for using each service based on their earning criteria and hours, Févry said.
“We tell you when to start working, where you need to start working, and when you need to go when you need to take your break,” he said.
But the company’s service isn’t only about optimization. There’s also a banking component and a suite of products to ensure that gig workers are also getting the most out of their gigs financially. The company offers a checking account, a tax management service, and lending services as well through services like BellBizzer, a Seattle-based company which offers a short-term rental service for consumer goods.
Both Korkmaz and Févry spent time working as delivery drivers or freelancing to get a feel for the challenges gig workers faced, Févry said. During lunch breaks at Google, Févry would do food deliveries to seewhat he could do so that he could understand how to make the gig economy work better.
Ultimately, the best solution would be to pay gig workers a fair wage for the time they spend doing their work, but barring that, technologically developed band-aids to help heal technologically enabled wounds seem like the only option.
Gig companies like Uber have a history of using their algorithms to wring more money from drivers — sometimes unbeknownst to the workers.
Back in August, a developer named Armin Samii created an app called UberCheats that monitored the UberEats application for a software bug to inform drivers if they were underpaid by the company for the distance they’d traveled to make a delivery. Last week, the app was taken down, but only because of a copyright infringement claim from Uber.
Stoovo and UberCheats seem to come from the same place. The idea is to equip workers with tools that can work for workers instead of for big platforms.
It’s this vision that attracted investors like Derek Norton from Watertower Ventures to invest in the company. To date, Stoovo has raised $2.4 million from investors including Watertower, 500 Startups, Plug and Play Ventures, and TSEF, Févry said.
With the money the company hopes to build out more products that can enable things like low-cost money transfers. Ultimately, the company just wants to give these gig workers a chance, Févry said.
“The gig economy is rife with frustrations,” Févry said, and Stoovo is making a pitch to smooth over the obstacles. “We really understand your life. We are also immigrants,” he said. “We know that of that $200… we know you have to send $40 overseas… We are building a product with [gig workers], we are not building for them.”
After inking a $9.2 billion deal to merge their classifieds businesses last year, eBay and Norway’s Adevinta have announced a deal to sell off three popular web properties in the UK to get the deal cleared by local regulators, the Competition Markets Authority. The companies plan to sell off Adevina-owned Shpock, and eBay-owned Gumtree and Motors.co.uk — three UK sites that let individuals sell used goods and find/offer services — with the transactions expected to be completed in time for eBay and Adevinta to complete their bigger deal in Q2 2021, pending final regulatory approvals.
“EBay and Adevinta remain excited about the proposed combination of Adevinta and eBay Classifieds Group and now target closing the transaction in Q2 2021, subject to final ratification of the remedies execution plan by the CMA and receipt of outstanding regulatory approval in Austria,” the companies said in a joint statement.
The companies have not yet said whether they plan to sell them in a single package or to independent buyers, but a spokesperson for Adevinta said that it’s likely that the CMA will give another update in 2-4 weeks. She declined to give a price range for the properties.
But in the statement from the companies, eBay said that Gumtree and Motors, which form its UK classifieds business, account for less than 10% of its consolidated revenues ($10.3 billion last year); and Adevinta said that Shpock revenues make up less than 1% of its consolidated revenues (which were about $80 million in the last 12 months). Adevinta is the majority owner of Norwegian publisher Schibsted, among other businesses.
The CMA provisionally has said that it would support the deal if the sale of the three properties gets completed.
“The CMA considers that there are reasonable grounds for believing that the undertakings offered by Adevinta and eBay, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002,” it noted in a brief update (which was dated 2 March, 2020, although I think that was a typo).
The divestment decision comes as a result of the CMA last month announcing that the deal raised competition concerns as is.
“It is important that people have choice when it comes to selling items they no longer require or searching for a bargain online, and that they can enjoy competitive fees and services,” said CMA’s Joel Bamford, Senior Director of Mergers, in a statement. “There is a realistic chance that without this deal Gumtree and Shpock would have been direct competitors to eBay, which is by far the biggest player in this market. This is the latest in a series of merger probes by the CMA involving large digital companies, where we are thoroughly examining deals to ensure that competition is not restricted, and consumers’ interests are protected.”
Interestingly, one of those other deals also involves eBay, indirectly. Another asset that eBay sold off as part of its wider divestment efforts aiming to streamline its business was selling secondary ticket market company Stubhub to Viagogo in a $4 billion deal. That acquisition closed last year, but then the merger was investigated by the CMA, which last month ordered Viagogo to divest the company’s business outside of North America. It’s a crushing blow when you consider that events have fallen off a virtual cliff (literally and figuratively).
Turning back to Gumtree, Shpock and Motors.co.uk, even if those sites are a relatively small part of eBay and Adevinta’s wider business revenue-wise, collectively they form a very popular option for people looking to buy or sell used goods or hire people for service jobs in the UK. I’ve been a regular user of both in my time, to sell and buy items, and to advertise for/discover several excellent au pairs. Coincidentally, people also use them to resell tickets.
It’s notable that the CMA didn’t consider Facebook, or any others, big enough yet to be seen as viable competitors in that market. It will be worth watching to see how and if that changes though. With deals like last week’s $191 million fundraise for Wallapop, and Facebook’s persistent Marketplace efforts, it is clear that there is still business to be found in classified listings, both as a standalone enterprise, or as something that creates stickiness for users to hang around for other services and advertising alongside them.
The on-demand grocery delivery industry in Europe (and beyond) continues to heat up amidst the pandemic, including a plethora of startups taking a vertical approach by operating their own delivery only — or “dark” — stores. The latest to show its hand is Berlin-based Flink, which today is announcing that it has raised a hefty $52 million in seed financing.
The round is led by Target Global and existing investors Northzone, Cherry Ventures, and Silicon Valley-based debt provider TriplePoint Capital. Cristina Stenbeck from Kinnevik also joins the round in a personal capacity.
TriplePoint’s inclusion is notable, since debt financing makes sense for these types of capital intensive businesses, including those that need to build out actual stores, albeit dark ones, and other deep logistics infrastructure.
To that end, the injection of capital — which brings total funding to date to $64 million — coincides with Flink’s expansion into the Netherlands and France, and follows the opening of ten dark stores in a number of German cities. They include Berlin, Hamburg, Munich, Nuremberg, Dusseldorf, and Cologne, with more planned.
Officially launched just six weeks ago, Flink, which means “quick” in German, claims to deliver groceries from its own network of fulfilment centres in under 10 minutes. That puts it up against dark store competitors including Berlin’s much-hyped Gorillas and London’s Dija and Weezy, and France’s Cajoo, all of which also claim to focus on fresh food and groceries.
There’s also the likes of Zapp, which is still in stealth and more focused on a potentially higher-margin convenience store offering similar to U.S. unicorn goPuff. (Related: goPuff itself is also looking to expand into Europe and is currently in talks to acquire or invest in the U.K.’s Fancy, which some have dubbed a mini goPuff).
However, based on today’s funding round and an extremely experienced founding team, Flink is certainly one to watch. The rather stealthy company was founded in late 2020 by Oliver Merkel (former Bain & Company partner who led the firm’s retail practice in Germany), Christoph Cordes (former co-CEO of home24 which IPO’d in 2018), and Julian Dames (former co-founder of Foodora, CMO at foodpanda and VP at Delivery Hero, and most recently at Softbank). Founder-market-fit? Check.
As noted, Flink is pitching itself very much as a grocery solution, similar to Dija and Gorillas, for example, meaning that the real competition — in the short to mid-term, at least — is traditional supermarkets that do scheduled delivery that isn’t typically on-demand. However, delivering just-in-time fresh food poses many logistical challenges, such as the supply chain and ensuring you actually stock the products customers want when they want them. That’s a slightly different challenge to focusing on convenience store items such as beer, chocolate and snacks or cigarettes etc., which is closer to the original goPuff model.
In a brief call last night with Christian Meermann, founding partner at Cherry Ventures, he told me that he believes truly on-demand groceries can be made to work, including the unit economics, but concedes it is a huge challenge logistically. But he also pointed out that the prize is potentially much bigger for whichever team can figure it out, since grocery shopping can easily happen multiple times per week and basket sizes can soon add up. Meermann isn’t convinced the same can be said of a pure convenience store offering, but of course there is overlap between the two.
Jessica Schultz, general partner at Northzone and previously a co-founder of HelloFresh, agrees. She says that instant shopping delivery will become “the new standard” in shopping more generally, and that groceries is the perfect category to start in, due to the nature of the products and frequency of consumption (e.g. perishables, waste, snacking, three meals per day etc.).
“Getting all your groceries, and not only convenience items but also your fresh herbs, your fruits, your bread… in less than 10 minutes is truly a wow experience,” she tells me. “I’m incredibly impressed with what the Flink team has achieved to date in this very fast-moving industry. I’m not sure I’ve seen such a rapid growth, or clean and strategic approach before. Their deep understanding of the core market dynamics is what will make them succeed”.
Meanwhile, the new financing will be used to expand further within Germany and into additional European markets this year. “In Q2 2021, Flink will roll out its first stores in the Netherlands and France, beginning in cities like Amsterdam and Paris,” says the 120-person company.
Comments Flink founder Oliver Merkel: “Consumers absolutely love to get their grocery shopping done in 10 minutes,” says founder Oliver Merkel. “We’ve received fantastic NPS feedback and see people using Flink multiple times a week. With the additional funding, we can roll out Flink even faster in Europe.”
TikTok is bringing in external experts in Europe in fields such as child safety, young people’s mental health and extremism to form a Safety Advisory Council to help it with content moderation in the region.
The move, announced today, follows an emergency intervention by Italy’s data protection authority in January — which ordered TikTok to block users it cannot age verify after the death of a girl who was reported by local media to have died of asphyxiation as a result of participating in a black out challenge on the video sharing platform.
The social media platform has also been targeted by a series of coordinated complaints by EU consumer protection agencies, which put out two reports last month detailing a number of alleged breaches of the bloc’s consumer protection and privacy rules — including child safety-specific concerns.
“We are always reviewing our existing features and policies, and innovating to take bold new measures to prioritise safety,” TikTok writes today, putting a positive spin on needing to improve safety on its platform in the region.
“The Council will bring together leaders from academia and civil society from all around Europe. Each member brings a different, fresh perspective on the challenges we face and members will provide subject matter expertise as they advise on our content moderation policies and practices. Not only will they support us in developing forward-looking policies that address the challenges we face today, they will also help us to identify emerging issues that affect TikTok and our community in the future.”
It’s not the first such advisory body TikTok has launched. A year ago it announced a US Safety Advisory Council, after coming under scrutiny from US lawmakers concerned about the spread of election disinformation and wider data security issues, including accusations the Chinese-owned app was engaging in censorship at the behest of the Chinese government.
But the initial appointees to TikTok’s European content moderation advisory body suggest its regional focus is more firmly on child safety/young people’s mental health and extremism and hate speech, reflecting some of the main areas where it’s come under the most scrutiny from European lawmakers, regulators and civil society so far.
TikTok has appointed nine individuals to its European Council (listed here) — initially bringing in external expertise in anti-bullying, youth mental health and digital parenting; online child sexual exploitation/abuse; extremism and deradicalization; anti-bias/discrimination and hate crimes — a cohort it says it will expand as it adds more members to the body (“from more countries and different areas of expertise to support us in the future”).
TikTok is also likely to have an eye on new pan-EU regulation that’s coming down the pipe for platforms operating in the region.
EU lawmakers recently put forward a legislative proposal that aims to dial up accountability for digital service providers over the content they push and monetize. The Digital Services Act, which is currently in draft, going through the bloc’s co-legislative process, will regulate how a wide range of platforms must act to remove explicitly illegal content (such as hate speech and child sexual exploitation).
The Commission’s DSA proposal avoided setting specific rules for platforms to tackle a broader array of harms — such as issues like youth mental health — which, by contrast, the UK is proposing to address in its plan to regulate social media (aka the Online Safety bill). However the planned legislation is intended to drive accountability around digital services in a variety of ways.
For example, it contains provisions that would require larger platforms — a category TikTok would most likely fall into — to provide data to external researchers so they can study the societal impacts of services. It’s not hard to imagine that provision leading to some head-turning (independent) research into the mental health impacts of attention-grabbing services. So the prospect is platforms’ own data could end up translating into negative PR for their services — i.e. if they’re shown to be failing to create a safe environment for users.
Ahead of that oversight regime coming in, platforms have increased incentive to up their outreach to civil society in Europe so they’re in a better position to skate to where the puck is headed.
M.I.T. researchers have devised a virtual-reality technique that lets them read old letters that were mailed not in envelopes but in the writing paper itself after being folded into elaborate enclosures.
Humaans, a London-based HR startup, has raised $5 million in seed funding to accelerate the development of its employee on-boarding and management platform. Backing the round is Y Combinator, Mattias Ljungman’s Moonfire, Frontline Ventures and former head of Stripe Issuing, Lachy Groom.
A number of other investors, made up of seasoned entrepreneurs and startup operators, also participated. They include LinkedIn CEO Jeff Weiner (via Next Play Ventures), Stripe COO Claire Johnson, Figma CEO Dylan Field, Intercom co-founder Des Traynor, former Workday CTO David Clarke, former Benchmark GP Scott Belsky, Notion COO Akshay Kothari, Qubit co-founder Emre Baran, Evervault CEO Shane Curren and Stripe head of security Gerardo Di Giacomo.
Founded by former Qubit employees Giovanni Luperti and Karolis Narkevicius, Humaans came into existence formerly in April 2020 after the pair quit the product agency they had founded together. With a soft launch the previous year while bootstrapping, and with validation from early users, Luperti and Narkevicius decided they had found enough product-market fit to focus on the startup full-time.
“We bootstrapped Humaans by reinvesting capital from the previous businesses we co-founded,” explains CEO Luperti. “After gaining initial commercial traction, we decided to raise capital and brought a number of investors and operators onboard, and joined Y Combinator”.
Pitching itself as a central hub for employee on-boarding and management — or a single source of truth for staffing — Humaans aims to play nicely by integrating with other existing SaaS used across the “HR stack”. This is because scaling companies are increasingly rejecting all-encompassing HR software and using the best modern SaaS offerings for various different functions.
“Companies are frustrated with poorly integrated HR stacks, making processes slow while exposing them to compliance risks,” says Luperti. “This is why the adoption of point solutions is increasing dramatically. Companies are adopting what’s best based on their needs and stage of growth to address their people needs”.
For example, a company may choose an applicant tracking system, a performance management system, contract management software and an employee engagement platform, and so on. “This makes the ‘all-in-one’ model antiquated, creating the opportunity for a solution like Humaans to emerge. We’re building a layer of infrastructure for all employee data”.
This is seeing Humaans attempt to bring together the full HR stack and automate processes like on-boarding, off-boarding and compensation management with fast workflows that can be set up not dissimilar to an IFTTT or Zapier-style type of interaction model.
“If you ask around, most employees dislike their HR software,” says Luperti. “HR tools have historically been clunky, slow and not good at providing a good user experience. Existing players focused more on sales and acquisition than retention through product. But HR buyers today are more sophisticated than ever and have an appetite for best in class. We’re building the Slack of HR… an employee management platform that’s both delightful and very powerful”.
To that end, Humaans says it grew 3x in the past few months and is popular amongst distributed companies, such as Pleo, ChartMogul, Bombinate, HeySummit and Pento.
Adds the Humaans CEO: “There are two segments of existing players: those targeting SMEs, and those working with corporations. Serving the companies in the middle is the opportunity we’re going after”.
Crisp, an Amsterdam-based, online-only supermarket focused on fresh produce, has raised €30 million in a Series B financing led by leading Target Global and joined by Keen Venture Partners and the co-founders of Adyen and Takeaway.com. Crisp has now raised a total of €42.5 million to date. It plans to use the money to expand in the Netherlands, and eventually across Europe.
Crisp says its USP is seasonal products sourced directly from 600+ small and high-quality producers at an affordable price in the Netherlands. Customers order through a smartphone app and deliveries are the next day within a 1-hour time slot. It also uses a 100% electric fleet serving big cities and suburbs, and its model is to have zero food waste.
The European grocery market is currently worth €2 trillion, but access to customers for high-quality, smaller producers is still tricky and blocked by incumbents. Crisp is taking advantage of consumers moving online, and wanting fresher food.
Tom Peeters, CEO and co-founder of Crisp, told my via online interview that “the differentiation on our model is that we offer quality and convenience. So, fish is super fresh fruits and produce is super fresh, etc. We basically stay away from the standard supermarket proposition that everything is always there, and you manage long shelf life. We’d rather build a very short chain sourcing directly at the source and bringing it in a very convenient way to you.”
He said it’s not a 15 minute delivery but the next day in order to ensure freshness. “The typical customer is a young family. An average order is 45 products and rather than offering all the brands, we on-boarded the long-tail of food producers in our digital marketplace, so we sourced from over 600 sources of food.”
He said: “Food in Holland is 40 billion euros, in Germany it is 200 billion. I think Europe combined it’s over two or 3 trillion. So that means basically we don’t need to spread thin over many countries in order to build a healthy business, not just healthy products, so we make money on every customer order.”
Founded in 2018, by serial entrepreneurs Tom Peeters, Michiel Roodenburg and Eric Klaassen Crisp claims to be now one of the fastest-growing supermarkets in the Netherlands, with a seven-fold in sales in 2020 and more than 85% of sales coming from repeat customers, it says.
Bao-Y van Cong, Investment Director at Target Global, headquartered in Berlin, said: “Crisp is building a world-class technology platform that is of value to both consumers and producers. The way we buy our food has not changed a lot since the 1950’s, creating inefficiencies in quality, affordability, and convenience. Crisp reflects the changing relationship that consumers today have with food: The European market for grocery shopping is starting to move online fast, super-accelerated by the pandemic. At the same time, we see a massive surge in demand for fresh and transparently sourced food.”
TechCrunch is embarking on a major project to survey the venture capital investors of Europe, and their cities.
Our <a href=”https://forms.gle/k4Ji2Ch7zdrn7o2p6”>survey of investors in Zagreb will capture how Croatia is faring, and what changes are being wrought amongst investors by the coronavirus pandemic.
We’d like to know how the Croatian startup scene is evolving, how the tech sector is being impacted by COVID-19, and, generally, how your thinking will evolve from here.
Our survey will only be about investors, and only the contributions of investors will be included. More than one partner is welcome to fill out the survey. (Please note, if you have filled the survey out already, there is no need to do it again).
The shortlist of questions will require only brief responses, but the more you can add, the better.
Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.
What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?
This survey is part of a broader series of surveys we’re doing to help founders find the right investors.
For example, here is the recent survey of London.
You are not in Croatia, but would like to take part? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting a call out to your country next anyway! And we will use the data for future surveys on vertical topics.
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(Please note: Filling out the survey is not a guarantee of inclusion in the final published piece).
Clue, an early pioneer in the femtech category with a well-regarded period-tracking app that’s used by around 13 million people, is getting ready to launch a digital contraceptive which will offer users a statistical prediction of ovulation as a birth control tool.
A US launch of Clue Birth Control is slated for “this year”. The team won’t be more specific on the date yet.
Pricing will be “premium” — but they’re also keeping the exact cost under wraps for now.
The Berlin-based company is today announcing that they’ve gained FDA clearance for the forthcoming product, clearing the way for a US launch in 2021.
Europe is the next region on their launch list but the necessary regulatory clearances mean the roll out will be gradual, going market by market.
The startup has also recently made a number of operational changes — including to the leadership of the company — to reflect becoming a medical-device grade regulated entity in the US.
The short version is that founder and CEO, Ida Tin, has moved up to become chairwoman of the board, while Audrey Tsang (who was leading product) and Carrie Walter (formerly general counsel), are now Clue’s co-CEOs.
TechCrunch chatted to all three women — along with Clue’s chief medical officer, Lynae Brayboy — to get the lowdown on its latest news.
Clue is not the first to market with an app offering a statistical prediction of fertility but unlike first mover, Natural Cycles — which gained FDA clearance back in 2018 — its product, Clue Birth Control, is being billed as “all-digital”; aka it will work without the user needing to take their temperature daily.
There’s also no need to track other bodily changes (such as monitoring cervical fluid). The method is based on women inputting a single data point regularly: The start date of their period.
This means it looks like a major step up in ‘ease of use’ vs the earlier-to-market rival — which Clue has achieved within similar efficacy margins (see below).
Clue’s algorithmic prediction is based on Bayesian modelling — with the app displaying a high risk window across a number of days of the user’s cycle, during which having unprotected intercourse could result in the woman getting pregnant. It shows a window of low risk when the opposite is true.
The length of these windows is likely to change as the user inputs more data, with the risk-window starting out longer and typically shrinking as the app becomes more personalized to their individual cycle data.
“Bayesian modelling has been used in medicine for a lot of different applications. What that does is it takes population data and it puts that population data into an algorithm — which is a mathematical model — and [that] basically borrows from what has been found in the population in terms of cycling and ovulation,” explains Brayboy, who was appointed as Clue’s first ever chief medical officer last summer.
“Before we had a fertile window [i.e. displayed in the Clue period-tacking app to illustrate the stages of a cycle] — which is not a reliable, nor is it a tested, model of contraception. So now we’re using a bayesian modelling concept,” she says. “It personalizes over time. So as the individual puts in their cycle day one then we’re able to personalize the window of their high risk days vs their low risk days.
“[The high risk window] will start out long… Usually it’ll be 16 days within the cycle — but it’ll shorten over time. It probably won’t shorten to more than nine days.”
For the product to work as a contraception, users must either abstain from sex on high risk days or use additional protection (such as condoms). That’s why it’s a more involved method than some established birth control alternatives (especially vs an IUD; intrauterine device). On low risk days Clue users are relying on the app’s statistical prediction of their (low) fertility risk to not get pregnant.
Clue says the product has been shown to be 92% effective at preventing unwanted pregnancy under ‘typical use’ and 97% effective under ‘perfect use’ — referencing the standard research terminology for measuring contraception effectiveness (the latter meaning the product is used exactly as instructed every time the woman has sex vs ‘typical’ use which accounts for some usage slip-ups).
What those percentages mean in practice is that under typical use, eight couples out of 100 would be predicted to get pregnant over a year of use of Clue’s digital birth control. While — in the perfect use scenario — the failure rate would be three out of 100 over a year’s use.
(For comparison, Natural Cycles says its product is 93% effective under typical use and 98% effective under perfect use; while — per the Guttmacher Institute‘s US study — the pill is 93% effective under typical use and 99% effective under perfect use; and male condoms are 87% effective under typical use vs 98% effective under perfect use.)
Clue isn’t disclosing how many users it’s expecting to sign up — but the length of time it’s taken to bring the product to market suggests it’s confident Clue Birth Control will find a sustainable user base. (It’s been quietly working on the development since at least 2019 — but will only say the product has been “a long time” in the works when we ask.)
The extra time Clue’s taken to bring its digital contraceptive to market does look like time well spent. The statistical method underlying Clue Birth Control has, for example, undergone rigorous pre-market clinical testing — via a prospective effectiveness trial which reported results back in 2019.
“It’s been in development for a long time because work like this and proving the efficacy of something like this takes a long time,” says Tsang. “From a product perspective as well we want to make sure that these are experiences [that are] easy to understand and that matches the safety and efficacy of this type of product. So that as well.
“It takes a long time to make sure that we develop something that is also usability validated on that front and that we put that out with confidence and with an exact understanding of how well users will understand that.”
The ovulation prediction algorithm was put through a year-long, full-scale, representative (of the US population), independent clinical trial involving more than 700 women. This was conducted by researchers at the Institute for Reproductive Health (IRH) at Georgetown University in partnership with a third company, called Cycle Technologies — using a research app, called DOT (Dynamic Optimal Timing), for the purpose of the trial.
Clue says it acquired the assets of DOT — both the algorithm and the app — in summer 2019 and it’s that clinically validated technology which it’s implementing into its own app now, as Clue Birth Control.
“This was a ‘proper’, full scale clinical trial that was designed to be a clinical trial — rather than put a product out there, see if it works and collect the data,” says Walter. “This was done by academics. We then bought the algorithm and the app and we implemented the features of the app into Clue Birth Control which is a feature of Clue.”
“The clinical trial shows you both what the algorithm does and how the user interacts with the app. Because the algorithm is only part of the story — the main part is can a woman understand what’s going on, track and check and then act on the information,” she adds.
The FDA clearance process for Clue Birth Control involved scrutiny of the efficacy of the algorithm’s statistical predictions and also how Clue presents the information to users. So the whole package has been examined by the regulator. (To be clear the DOT app was not FDA cleared; rather Clue implemented that clinically tested algorithm in its own app and submitted the package for FDA clearance.)
“When you get FDA clearance as a medical device that is for a very specific product — you don’t then get to just take it away and tinker with it,” says Walter. “So I’m sure that there will be further iterations. This is iteration one of a new kind of birth control — but as of right now the thing that is going into our app is the thing that FDA saw and cleared. So the only piece… that we put significant creative work into was making sure that the usability interface is totally user tested and safe.”
Going forward, Clue’s business processes will be subject to ongoing regulatory scrutiny — a considerable switch for the startup that Tin describes as a “huge maturing process”.
“Another big part of the work that happened is to live and be a regulated company,” she tells TechCrunch. “That in itself is a very big change and a huge amount of work… So that’s another thing that has to happen. So one thing is what you put out in the market that users see but as a company you really have to operate in a completely new way — it’s a huge maturing process that we have gone through.”
“It feels like the baby can walk and talk and is actually more like a teenager and now it’s like leaving home — and I say you can do this!” she adds when asked what it feels like to see her femtech startup becoming FDA regulated.
No method of contraception — except for abstinence — is 100% effective, of course. But just comparing the varying efficacy percentages of different contraception methods may not be super helpful given how personal birth control choices are.
A digital contraceptive certainly has a bunch of pros and cons that need to be considered. And Clue is being up front that its product is not suitable for everyone.
Top line: Clue says Clue Birth Control is only suitable for women, aged between 18-45, who have regular periods. (It also says: Users must also be able to track their period; check the app each day they have sex; and be prepared to use a condom or avoid sex that may result in pregnancy on high-risk days.)
Clearly there are various additional considerations beyond having a regular cycle that potential users should weigh up before signing up. Not least being comfortable with the stated degree of pregnancy risk.
That’s also true of all FABM (fertility awareness based methods) of birth control — including the old fashioned, non-digital/manual-tracking version (sometimes referred to as the rhythm or calendar method). But app-based products like Natural Cycles and Clue Birth Control are undoubtedly making FABM accessible to more women. Which means that communicating — and even enforcing — suitability is a key component of responsible product development in this category.
This is because the level of commitment and attention to detail required to act on changing fertility information makes FABM more complex than some birth control options. An IUD, for example, works without a woman needing to do anything once it’s been inserted. The pill is also more simplistic — in the sense that it only requires a woman to remember to take a tablet daily.
At the same time, it’s clear that hormonal contraception isn’t for everyone — or may not be accessible to everyone (Brayboy points to rising difficulty for US women specifically to access contraception as a relevant point here, for instance). And the convenience of an app-based form of personalised contraception has quickly convinced a new generation of women to try an alternative. (Natural Cycles’ reported some 1.5 million users worldwide last year.)
App-based convenience can invite missteps too, though. After its launch in Europe in 2017 Natural Cycles quickly attracted criticism over misleading and aggressive social media marketing. It was also investigated in Sweden after a hospital in its home market reported a number of unintended pregnancies from women who had been using the app. Although that probe confirmed the number of pregnancies was within the claimed margin of efficacy Natural Cycles agreed with the regulator to clarify the risk of its product failing.
So how digital birth control is presented is a vital consideration.
Clue doesn’t look like it’s taking any risks with how it communicates suitability for Clue Birth Control — prospective users have to go through an eligibility process which requires them to not just say they’re eligible but demonstrate eligibility by being able to provide key information, including about their own cycle.
If the user can’t show eligibility the app will “boot them out”, as Tsang puts it. She says they’ll also then be locked out for a period of time so they can’t just go back in and try different answers. While users whose cycle becomes too irregular for the product to work properly will similarly be prevented from continued use.
“There is a very detailed assessment process as soon as you try to sign up for Clue Birth Control,” she says. “It asks you a series of questions that really even in the questions themselves and how you answer — it’s like a question with a drop-down underneath it — even in how we’ve set those up it makes it so that users actually have to explicitly say that they are eligible. It’s not a true/false kind of situation. It’s ‘how are old are you’?… We ask these explicit questions so what that does is it actually draws the information out of the user in a way where we can be sure that they are actually eligible to use this feature as it is regulated to be used.”
“That process itself was scrutinized in detail by FDA,” adds Walter. “This is a device that you can use in the privacy of your phone — nobody else has to be involved in it — so it’s really important that that funnel is correct and so that is something that we talked about in a lot of detail.
“And one thing that you do need to be aware of is that you’re not going to be able to answer these questions unless you have some awareness of your cycle going in. Because you’ve got to know is your cycle typically this long or this long. What does your longest cycle look like? What’s your shortest cycle look like over the last 12 months?”
“The [FDA] clearance is related to the product as presented. The product — because it relies purely on one data input and statistical predictions — there’s obviously some level of… ‘irregularity’,” Walter adds. “If your periods are wildly unpredictable this isn’t going to work. What our science team says is… about 70-80% of currently cycling women fall within the bandwidth that could be covered by it.
“It’s 20-40 day cycles and 9 days or less of variation between them. So it’s not like you have to know to the day.”
“We know that it’s impossible to be perfect and so we make sure to tell people that typical use is 92% and so we don’t at all try to oversell ourselves. And that this is better than doing many things which are commonly done by users in the US,” says Brayboy.
“The pill and the IUD have very very defined risks,” she adds. “So we essentially explain that we are not as effective as those methods but our users potentially would have benefits because some of them cannot tolerate those methods for whatever reason.”
“Unfortunately a lot of people do rely on coitus interruptus and a lot of people do rely on condoms which are great but you have to use condoms every single time in order to be effective. And so those individuals might really benefit from having some idea of where they are in their cycle and it’s not only some idea — it’s a rigorously looked at algorithm that they can use in the privacy of their home,” Brayboy goes on.
“It’s really getting difficult… for a lot of American women to actually access birth control. One because of job loss; two because of a recent supreme court ruling in 2020 about opting out of contraceptive coverage. And so this is something they can do in collaboration with their healthcare providers but they don’t have to go out to a pharmacy and hopefully people will see that it’s easy to use. It really is easy to use. You never [don’t] leave your phone at home so you can’t lose this contraception.”
Another major consideration for users of digital contraception is that unprotected sex offers no protection against STDs (sexually transmitted diseases) — rates of which have been increasing in the US in recent years.
Clue therefore recommends its product for women who are in stable relationships — and/or are getting regularly screened, along with their partner/s — i.e. rather than for those who don’t know the sexual history of the people they’re sleeping with.
“It was sort of a premise from the beginning that we only want people to use this product for whom it’s really truly a good product,” says Tin. “It’s like we’re building this product because we think many people will benefit from it and we’ve seen many people needing it and so that’s the core. We want to be helpful. We don’t want people to use it for whom it’s not a good solution. And that’s how we’ve built it.”
Asked who the ‘perfect/ideal’ user for Clue Birth Control, Brayboy puts it like this: “This is someone who — as I envisage as a physician — potentially wants to get pregnant in the next couple of years but is not ready and does not want to use hormonal birth control for whatever reason and is already using condoms.
“So this is someone who wants to not get pregnant just now but is preparing, is planning — and they don’t want something that’s long acting.”
She also points out that many of the most effective methods of contraception (“like the levonorgestrel IUD or the Mirena”, which are ~99.9%) have draw-backs too — in that they have to be placed and removed from the woman’s uterus. They may also, she suggests, have a long term effect on the endometrium.
“So [Clue Birth Control] is something where if you decide okay in the next few years you want to get pregnant you absolutely can stop [following the regime] and you can get pregnant. And you also have a better idea of your cycles at the same time — so it gives you that added benefit,” she adds. “Again, our indication’s 18-45 but a lot of people who are in their late 20s and 30s would be ideal candidates for this.”
Tin also points to the “staggering amount of unwanted pregnancies” in the US and around the world — noting that many women currently still don’t use any birth control, for whatever reason. So an app-based fertility prediction might be an alternative that works for them.
Brayboy notes that unintended pregnancy in the US is about 45% but can be as high as 69% in some ethnic groups, per figures from the American College of OBGYN.
“Unintended pregnancy is also hard to study because people don’t typically plan to become pregnant — and so it makes it difficult. But this [app-based FABM] is a way — also people could really think about how do I want to plan my family in the next couple of years? And so it really is a lovely way for people to start really thinking about becoming parents.”
The marketing for Clue Birth Control will reflect that it’s a “serious choice” people are making to opt for a digital birth control, per Tsang.
“We make sure that people understand that no form of birth control is 100% effective. And that this is a choice — and this is a serious choice that they make,” she says. “In our marketing we plan to help people make that choice — make a choice that’s right for them. And be transparent about the risks and how it works and what it means.”
“I would say that we don’t have huge plans to do social media and influencer marketing,” she adds. “But again we do have these standard operating procedures that make sure that we both speak about the labelling, we speak about our product in a way that reflects exactly what it is.”
The aforementioned changes to Clue’s leadership team are coupled with a wider retooling of its internal processes — reflective of its new status as a regulated company.
“Something that a lot of people aren’t aware of is that to be allowed to have a medical device on the market you have to operate a quality management system that covers your entire company. And as you know if you cover tech startups that’s not how tech startups tend to work!” says Walter.
“Which is why it’s incredibly important if you’re going to use an app to make important life decisions about your health you want to make sure they’re building their product in a quality controlled way. And of course any app that you find out there on the market that is not a regulated medical device pretty much 100% will not be working in this way. And so one of the things that we had to do — and that we will be audited for once we have the product in the market — is to show that all of our processes, from design over software development, testing, user testing, all of these things are quality controlled every step of the way. So that’s the big change that we’ve gone through in the last two years.”
“It’s a really big change,” adds Tin. “And for us it’s been important to get the team along in a really good way — not lose who we are. We think of it as acquiring a new ninja skill — something new that we’re learning to do that we’re adding to who we are — so that we can still be user focused and maintain all the qualities that we care about and always have cared about but now doing it sort of at a higher level under this quality management system.
“I think it’s very well aligned with who we are because essentially a quality management system’s about quality and risk and care, essentially, for users — and we feel a lot of responsibility putting out a product that help people navigate really big, important things, like getting pregnant, not getting pregnant, so we feel good about making sure that our processes match that level of responsibility. So in that way it’s been easy to get the team along but I will say it’s been a huge amount of work.
“I don’t know how many thousands of pages of technical documentation that we have submitted etc. It’s really like a huge rehaul. So the fact that we can maintain still feeling like Clue while operating in a very new way I’m pretty happy about. Because we could also become very boring — big, corporate-ish — but that isn’t who we are and that’s important because of course we want to keep caring about users.”
For all the extra paperwork, Tsang says Clue’s mission as a company hasn’t — and isn’t — changing.
“It’s just very value-aligned. We’re here to put something out that’s high quality and where we have a clear procedure and clear processes for evaluating risk and mitigating risk. And that’s all completely values aligned with being a femtech company that empowers women to make healthy choices,” she says.
“Nobody is going to go out there and say well we play fast and loose with people’s health. Nobody wants to do that but it helps to have a third party watch you — and that’s what it means to be a regulated company. It means that there are democratically accountable government institutions looking over your shoulder and checking,” adds Walter.
“And I think if you’re looking at some of the criticism that femtech has come into recently — legitimately — because there are all kinds of apps out there that are completely unregulated, no one knows where they’re coming from, no one knows what their business models are, no one knows what they’re really doing. And this is a strong move in the opposite direction.
“We take the constraints that flow from that seriously… As Ida says we’re going to try not to lose our fun in the process.”
The team does also see wider opportunities flowing from being a regulated entity.
“I think this broadens our mission too,” says Brayboy. “Period tracking is really important in overall health but I think this allows individuals to use FABM in a modern way — and FABM itself can help individuals take in things in their cycles that might actually affect their fertility long term and also some diagnosis that might be important to speak with their physician about early, so they present to care early. So we hope to have that partnership with users and their healthcare providers.”
“We don’t have plans to do [comparative studies with other types of contraception] but what I’d like to say is that we have a post-market surveillance plan and we’ll be doing studies with collaborators — we’ve already started to collaborate with academia before Clue Birth Control came out so it’s something that we’ll continue to do,” she also says. “What we’ll be doing in future is we’ll be going to clinical meetings, and presenting and allowing people to collaborate with us. And I think that’s really important that our doors are open for physician scientists and scientists and contraceptive researchers to continue to look at us. And we want to do that because we’re all about science — we’re based on science. And I came to Clue because of that mission.”
“For us it’s also an ability to keep doing more and more advanced things with the data, if you like,” adds Tin. “Which of course is important because people have many needs that if you are to answer them it has to be regulated. It’s right that they’re regulated. Now we learn how to operate as a regulated company — we are operating as a regulated company — that gives us an ability to keep meeting these needs that are deeper.”
Walter also emphasizes the competitive advantage of being a consumer app that’s subject to regulatory surveillance as a medical device — in a sea of unregulated apps.
“A really important thing is that if you look at your average health and fitness app or whatever, their main KPI is let’s get a tonne of users through the door and make money off them. And I’m not going to say we don’t want a tonne of users through the door and to be profitable — we do want that. But because we are regulated we also have this post-market surveillance obligation that we will be audited on. That’s a KPI now. That’s not a nice to have. And I think that’s a big difference. And that’s something that consumers should think about when they’re using an app — like what KPIs are those people working to.
“And you might want to ask yourself what other apps is that developer putting out? Do they have 15 gaming apps and one period tracker? And what’s their business model?”
“And who’s leading the company,” Brayboy chips in. “Look around this Zoom room you can see that we have all potentially had periods and continue to have them and so have had to make these decisions and so I think it puts us in a very unique position because we have a level of empathy and understanding that really comes from a personal space.
“And I wanted to say on the global health [potential] — I’m really excited about that. And that’s another of the reasons why I joined the company because I started my career in the Republic of Mali in West Africa and I saw how difficult it was for individuals to get contraception and a lot of things that are culturally pushed to people in those areas. And so this to me really represents an exciting prospect… I think there’s just limitless possibilities in other countries — we haven’t really thought about the cultural practices and the tendencies that people want to use something that is hormone free.”
Asked about the new co-CEO structure, Tin says it’s a natural continuation of the collaborative leadership style she encouraged at Clue.
“The big two things that Clue is going to care about is being a regulated company and building a sustainable business and I could’t think of two better people than Carrie and Audrey to mind these two parts of the business… We have had a very collaborative leadership style at Clue, always, because that’s how I like doing things — and it feels again also like an upgrade. Now two people get to do this in a pair and I think that’s a really great reflection of what I think is the future of leadership. So on that level it’s also an expression of who we are to choose to have co-CEOs.”
“We’re new at this but it’s been really fun the last couple of weeks but at the heart of it are these values of being disciplined about being transparent,” adds Tsang. “Being collaborative and being equal. And it allows us to hold each other accountable for all of those things which are at at the heart of Clue’s values. So I completely agree with Ida — I’d love to see more leadership look like this moving forward and I personally have been enjoying it quite a bit.”
“Who needs another ‘hero CEO’,” adds Walter. “My starting point was that every conversation I have is actually better when Audrey’s in it — so let’s make my head conversations that way. Let’s upgrade the thinking process to a dialogue. And I think once you accept that most decisions are better made in some form of collaboration — let’s get real, right; we’re not that much of a genius that all of us don’t ever need to talk to other people — so once we accept that then the only question is how do you collaborate?
“As Ida said, we’ve always had a pretty collaborative management team but actually we found that — it’s like in the arts. Where are the most productive, most creative collaborations — they’re in really tight micro teams. And so let’s put that at the heart. And of course there’s a management team and of course there are other expertise and having Lynae in the company is wonderful and having the science component, and data science component, and all of this expertise, but I really like this generative heart of two. This dialogue as being the decision making process. There’s no reason to me why that wouldn’t make us more bold and more thoughtful.”
“I want to second this and maybe it’s also worth saying that I founded Clue together with a bunch of great guys — one of them my life partner, and in a way we have, for many years, also been a very closed pair,” adds Tin. “And working on understanding equality and living from that place and now it’s, in a way, just an even more clear part of the structure. It’s like a good next step on something we’ve been learning about — basically since the beginning of Clue.”
Klarna, the Swedish buy now, pay later behemoth and upstart bank, has raised $1 billion in new funding at a post-money valuation of $31 billion. That sees the company retain the crown as the highest valued private fintech in Europe.
Backers of this round are said to be combination of new and existing investors, while Klarna claims it was 4 times oversubscribed. That’s likely prompted by reports the company is eyeing up a direct public listing and the current appetite for public tech stocks in general.
As a reference point, Affirm, which is viewed in the U.S. as one of Klarna’s most direct competitors, recently IPO’d. If you want further data points, read Alex’s Extra Crunch analysis of Klarna, Affirm and AfterPay’s most recent earnings.
In addition to confirming the new fund raise — which had been widely leaked given that there dozens of frenzied investors involved — Klarna is also announcing that the company will pledge 1% of the capital raised to a newly created initiative that focuses on “key sustainability challenges around the world”. The initiative will be formally launched April 22 on World Earth Day.
A very early mover in what is now widely called buy-now-pay-later (BNPL), Klarna has been built on the concept of giving consumers a way to buy things online without having to pay for them upfront, and without resorting to a credit card. It does this both by offering online retailer integrations where Klarna appears as an option at check out, and through its own “shopping mall” app, where users can browse all the stores that let you pay with Klarna.
On the back of this, the company hopes to foster a bigger financial relationship with its users as a fully-fledged challenger bank. It has a range of licensed banking services, such as savings and current accounts, in Sweden and Germany, with more countries to follow.
On the BNPL front, Klarna is active in over 17 countries, and has over 250,000 retail partners including Macys, H&M, IKEA, Expedia Group, Samsung, ASOS, Peloton, Abercrombie & Fitch, Nike and AliExpress.
The fintech has been backed by Sequoia Capital since 2010. More recent investors include Dragoneer, Bestseller Group, Permira, Visa, Atomico, Ant Group, Commonwealth Bank of Australia, Silver Lake, HMI Capital, TCV, Northzone, GIC (Singapore’s sovereign wealth fund) and funds and accounts managed by BlackRock.
Meanwhile, Klarna was founded all the way back in 2005 and has a fascinating story from startup to scale-up — a story that almost certainly has a few more twists and turns yet. If you need to catch up, check out this 8,000 word opus on the company for Extra Crunch.
On the back of Zynga acquiring Turkey’s Peak Games for $1.8 billion last year and then following it up with another gaming acquisition in the country, Turkey has been making a name for itself as a hub for mobile gaming startups, and specifically those building casual puzzle games, the wildly popular and very sticky format that takes players through successive graphic challenges that test their logic, memory and ability to think under time pressure.
Today, one of the more promising of those startups, Istanbul-based, Peak alum-founded Dream Games, is announcing the GA launch of its first title, Royal Match (on both iOS and Android), along with $50 million in funding to double down on the opportunity ahead — the largest Series A raised by a startup in Turkey to date.
While Dream Games will focus for the moment on building out the audience for puzzle games with more innovative ideas, it also has its sights set on a bigger goal.
“We’re building this as an entertainment company,” CEO Soner Aydemir said in an interview, where he described Pixar as a key inspiration not just for size but for quality in its category. “What they did for animated movies, we want to do for mobile gaming. We are focusing on casual puzzle games first because everyone plays these, but we will also move forward with other genres. We want to be a huge interactive entertainment company that builds high quality games.”
The Series A is being led by Index Ventures, with participation also from Balderton Capital and Makers Fund. The latter two backed Dream Games previously, in a $7.5 million seed round in 2019. Index, meanwhile, is a notable VC to have on board: other successful gaming startups it has backed include Discord, King, Roblox and Supercell.
Interestingly, this is not Index’s first investment in a gaming startup founded by Peak Games alums: in December it led a $6 million round for another Istanbul mobile casual puzzle gaming startup founded by ex-Peak employees: Bigger Games.
Dream Games is not disclosing its valuation with this round.
Dream Games raising $57.5 million ahead of launching any games — or proving whether they get any traction — may sound like a risky bet, but there is some context to the story that sets up the odds in this startup’s favor.
The founding team all come from Peak Games, the Istanbul gaming startup that was so nice, Zynga bought it twice — first, in the form of one small acquisition of some specific titles, and then the whole company some years later.
CEO Soner Aydemir is Peak’s former director of product who built the company’s two biggest hits, Toy Blast and Toon Blast. Ikbal Namli and Hakan Saglam were Peak’s former engineering leads. And Peak product manager Eren Sengul and an ex-Peak 3D artist Serdar Yilmaz round out the rest of the founding team.
(Aydemir notes that the team left and formed Dream Games in 2019, about a year before Zynga’s full acquisition.)
The other indicators that Dream Games is on to something are its metrics for its limited test run of Royal Match.
Royal Match — in which players are tasked with helping King Robert restore his royal castle “to its former glory” by rebuilding it through a series of match-3 levels and obstacles, with new rooms, royal chambers and gardens making up the different levels of the game — was launched first as a limited test on iOS and Android in the U.K. and Canada in July leading up to this launch. In that time, Aydemir said it saw 1 million downloads and 200,000 daily average users.
“We think the numbers are very promising compared to previous experiences,” he said.
While Aydemir likes to describe Dream as an “entertainment” company, there is a lot of technology going into the product, from the graphics and the mechanics of the puzzles themselves through to the data science behind them.
“If you want to create an iconic game, you need to combine engineering, art and data science together with high quality user acquisition and a strong marketing approach,” he said.
And he believes that when you focus on these it will inevitably lead to quality, which means you no longer have to focus on simply trying to find a hit.
“We don’t like that approach,” he said. “We don’t want to find a hit.”
That was also the mix that Index also wanted to back.
“Building iconic titles requires a harmonious mix of craft, science and flawless execution,” said Index Ventures partner Stephane Kurgan, who led the round together with Index’s Sofia Dolfe. “The Dream Games team has perfected this mix over many years of working together, and has put it on full display in Royal Match. We could not be more excited to work with them in their journey to build the next global casual champion.”
While Dream Games’ long-term ambition is to build out interactive experiences around different audiences and genres, Aydemir said that casual games, and puzzles in particular, have proven to be a huge hit with consumers.
The strength of that trend has up to now meant that puzzle games generally have proven to have more staying power than other genres in mobile games, which have soared in popularity but also somewhat fizzled out.
“Every year we see the bigger market of users growing by 20%,” he said. “It will remain for decades.”
Interestingly, the focus on casual gaming startups in Turkey seems like a perfect storm of sorts. Undeniably, the proven success of Peak has brought in more punters, but it has also shown the way to developers: you can build a successful and global consumer tech startup out of Turkey, and perhaps puzzles — which focus on shapes — are especially good at transcending different language barriers.. Alongside that, Aydemir pointed out that the country is strong on engineers and developers but slim on opportunities with bigger tech companies.
“Mobile gaming is a younger industry, so that presents an opportunity,” he said.
Updated to correct that Index is not an investor in Rovio, and that the limited test had 200,000, not 200, DAUs.
Universal jurisdiction, the idea that any nation’s courts can try people for atrocities committed anywhere, has gained as a tool of human rights lawyers battling impunity.
As automakers promise to get rid of internal combustion engines, Heidelberg is trying to get rid of autos.
Countries eager to augment the troubled E.U. buying program are eyeing offers from each other, from Russia and China, and from private brokers, some of whom are fraudsters.