Mynd raises $57.3M at an $807M valuation to give people a way to invest in rental properties remotely

Mynd, a company that aims to make it easier for people to buy and manage single-family rental properties, announced today it has raised $57.3 million in funding from QED Investors.

The financing values the Oakland, California-based company at $807 million, and brings the company’s total raised to $174.9 million since its 2016 inception. Invesco Real Estate led its previous round, a $40 million raise, and committed $5 billion to purchase and rent 20,000 single-family homes through Mynd over the next three years.

Doug Brien and Colin Weil started Mynd with the goal of making real estate investing more accessible. The pair has built a platform for investors to find, finance, purchase and manage single-family rental properties — 100% remotely.

“We don’t outsource to partners. We do that all in-house,” Brien told TechCrunch. “We remove the geographical barriers to real estate investment, making it possible to invest in 25 cities from anywhere in the country — all from the comfort of home through our desktop interface and/or mobile apps.”

Currently, Mynd manages over 9,000 rental units in 25 markets across the country. The startup plans to expand to 15 additional markets over the next three years including, Indianapolis, Indiana and Memphis, Tennessee.

Mynd’s tech product is complemented by “boots on the ground” people in local markets, improving the speed and clarity of communications that the company can provide to Mynd residents, Brien said. 

“Plus it provides total visibility and transparency for our owners around the health of their investments,” he said “Unlike other companies we have our own purpose-built system called OTTO. It’s almost like a ‘Snowflake meets Zendesk’ — but custom-built for real estate investing and property management.”

Image Credits: Mynd

Last year, Mynd added 1,846 homes to the platform. This year, it’s on track to add roughly 8,500 across both retail and institutional — enough to nearly double the total homes managed by Mynd year over year, according to Brien. Invesco is its largest institutional client. On the retail side of its business, it has roughly 4,000 investors using Mynd.

“We believe that investing in the single-family residential asset class is the best path for building long-term, generational wealth,” he told TechCrunch. “Mynd is committed to democratizing real estate — making it accessible to a whole new crop of investors who were previously too intimidated and/or were constrained by geography.”

The pandemic underscored the urgency of what the company was building, he said, as people sought more space to live and work. Renting also became more common as more people wanted increased flexibility. 

Mynd plans to use its new capital to continue upgrading its digital platform, which it says is powered by “an extensive proprietary data set.” It also plans to enhance its automated workflow engine, underwriting, mobile applications and omnichannel communications. The startup also plans to keep hiring and expanding into new markets.

Presently, Mynd has 568 employees, up from 366 a year ago today.

QED partner Chuckie Reddy said the Mynd team was “one of the best” his firm had seen in the single-family rental market with a “purpose-built” tech stack designed specifically for such properties.

“They have a customized offering that is superior to anything else on the market today,” he said. 

Generally, QED believes the single-family rental asset class is one of the fastest-growing in the country, “because of how big the housing market is, the need and desire for the product and the tremendous amount of capital formation we have seen since the last financial crisis,” according to Reddy.

“There is a shortage of quality, affordable single-family rental housing, and Mynd has technology to manage this asset class,” he said.

#finance, #funding, #fundings-exits, #mynd, #qed-investors, #real-estate, #recent-funding, #startups, #venture-capital

QED Investors closes on $1.05B across two funds to invest in fintech companies globally

QED Investors announced the closing of two new funds totaling $1.1 billion, capital that it will be using to back early-stage startups, as well as growth rounds for later-stage companies.

Specifically, today QED is announcing a $550 million early-stage fund and a $550 million growth-stage fund, both of which are aimed at backing fintech companies primarily in the U.S., the United Kingdom, Latin America and Southeast Asia. The fund was oversubscribed, according to QED co-founder and managing partner Nigel Morris.

Since its 2007 founding by Morris — who also co-founded Capital One Financial Services in 1994 — and Frank Rotman, QED has backed more than 150 companies, including 20 unicorns. It currently has over $2.6 billion under management.

While fintech has been an area of investor interest for some time, it’s safe to say the sector has exploded in recent years — largely fueled by consumer demand as more people transact online. That’s especially true as the COVID-19 pandemic continues to (sadly) rage on.

Clearly, Alexandria, Virginia-based QED was investing in fintech before fintech was “cool.” As evidence of that, the firm led Credit Karma’s Series A in 2009; led Remitly’s Series A in 2014 and participated in Nubank’s Series A in 2014.

The firm has come a long way from when it closed its first fund — $30 million of internal capital — in 2008. Its last fund — totaling $400 million — closed in 2020. Over the years, QED has backed unicorns that went on to exit either via the public markets or by acquisition, including SoFi, Credit Karma, Red Ventures and, more recently, Flywire.

As someone who also years prior had launched Capital One Financial Services, it’s no surprise that when Morris started a venture fund, it was one that focused on funding fintech companies.

After 14 years… it remains our cornerstone, even though fintech has evolved from the lending and credit businesses of the early years that was a core part of our Capital One DNA,” said Morris, who serves as QED’s managing partner.

Frank Rotman, the firm’s founding partner, describes fintech as QED’s “North Star.”

“There are so many exciting financial technology verticals today that can have a meaningful and lasting impact on consumers across the world, from proptech, sustainability and earned wage access to student loan solutions and financial products that cater to those that have been long ignored by banks and financial institutions,” he said.

In particular, Rotman said the firm is bullish on the future of embedded finance and on backing companies that distribute financial products in a variety of industries such as cross-border trucking logistics (such as Nuvocargo), car sales (Kavak) and shrimp farming (XpertSea).

QED plans to invest in between 40 to 50 companies out of its early-stage fund, with an initial average check size of $5 million to $15 million with similar reserves, according to Morris. The firm expects to make 20-25 investments out of its growth fund, with average check sizes between $10 million and $40 million. It has so far made one investment out of that growth fund, which has not yet been publicly announced.

“Every single” LP from QED Fund VI increased their allocation in the firm’s new funds, according to Morris. But the firm also welcomed several new LPs. While Morris declined to be more specific, he said the new LPs included “some really well-known names.”

“There’s no better confirmation than when an LP doubles down in their support of what we’re doing,” Rotman said. 

In terms of strategy, Rotman notes that QED has continued to lead deals that it feels “passionate about being involved in.”

“It’s not a secret that the market’s hot, and opportunities move quickly in this type of environment,” he told TechCrunch. “We see firms meeting with a founder in the morning, and a term sheet issued as soon as the following day. Many VCs can offer capital. Very, very few can augment that with proven, actionable advice and insight that can help them tomorrow.”

Both Morris and Rotman believe the fact that QED’s 17-person investment team being made up of former operators gives it a competitive edge.

We’re a unique company offering unique insights in an industry in which it’s easy to perform poorly and hard to do well,” Morris said.

“Most fintech companies will fail. That’s just the statistical, pragmatic distribution that occurs,” he added.

Within the fintech industry, there are myriad complicated issues — compliance, operations, tech, talent, credit risk and treasury, Morris continued.

“And they take a long time for people to have enough tree rings to be able to understand them,” he told TechCrunch. “Much of what we do…is help ameliorate and mitigate against those different issues by bringing to bear specific functional talent and the scars on our back of mistakes that we’ve made as operators to make sure that the young entrepreneur doesn’t make those same errors. It’s not enough to simply solve one problem. Founders need to successfully solve five, six, seven problems concurrently because if any one is not solved, the entire business will come crashing to the ground.”

#fintech, #funding, #fundings-exits, #nigel-morris, #qed-investors, #startups, #tc, #venture-capital, #venture-funding

Why global investors are flocking to back Latin American startups

The Latin America startup ecosystem is having a great year, with mega-rounds being announced at breakneck speed and new unicorns minted almost monthly. This is mostly due to the clearly maturing startup scene in the region, with proven successes such as Nubank, Cornershop, Gympass and Loggi helping to bolster LatAm’s credibility.

Interestingly, many of the region’s rounds are led by or saw participation from investors based elsewhere. Firms such as SoftBank, Tiger Global Management, Tencent, Accel, Ribbit Capital and QED Investors are pouring money into LatAm. Some are even seeing more opportunity than in the U.S. — Latin America, they believe, has historically been ripe for disruption, especially in the fintech and proptech sectors, due to the significant underbanked and unbanked population in the region and the relatively unstructured real estate industry.

Last month, my colleagues Anna Heim and Alex Wilhelm found that structural factors such as strong digital penetration and quick e-commerce growth are among the key reasons Latin America is breaking venture capital records this year. One Mexico-based VC even declared that the story was about “talent, not capital.”

Local VCs are raving about the human capital in the region, but for some global investors, the appeal of Latin America extends beyond the talent to the general populace. Shu Nyatta, a managing partner at SoftBank who co-leads its $5 billion Latin America Fund, pointed out a dynamic that might seem obvious but is rarely articulated: Technology in LatAm is often more about inclusion rather than disruption.

“The vast majority of the population is underserved in almost every category of consumption. Similarly, most businesses are underserved by modern software solutions,” Nyatta explained. “There’s so much to build for so many people and businesses. In San Francisco, the venture ecosystem makes life a little better for individuals and businesses who are already living in the future. In LatAm, tech entrepreneurs are building the future for everyone else.”

Accel Partner Ethan Choi says the region’s consumer markets are growing rapidly thanks to a fast-growing middle class and “technology permeating through every aspect of consumers’ lives.” This has spurred demand for digital offerings, which has led to more startups, and consequently, investor interest.

Brazil and Mexico riding the gravy train

One look at the dollars pouring into LatAm this year is enough to convince anyone of the skyrocketing interest.

Latin America saw a total of $6.2 billion in incoming venture capital in the first half of 2021, more than double the $2.6 billion in the same period last year, and even beating the $4.1 billion invested across all of 2020, according to preliminary data from LAVCA (the Association for Private Capital Investment in Latin America — LAVCA used a different methodology than CB Insights, in case you’re wondering).

#accel, #brazil, #funding, #fundings-exits, #latin-america, #mexico, #owl-ventures, #qed-investors, #quintoandar, #ribbit-capital, #softbank, #softbank-group, #startups, #tc, #venture-capital

Reserve Trust raises $30.5M to become the ‘Stripe for B2B payments’

Reserve Trust, a Denver-based financial services provider, has raised $30.5 million in a Series A round led by QED Investors.

FinTech Collective, Ardent Venture Partners, Flywire CEO Mike Massaro and Quovo founder and CEO Lowell Putnam also participated in the financing, which included $17.9 million in secondary shares. It brings the startup’s total raised since its 2016 inception to $35.5 million.

Reserve Trust describes itself as “the first fintech trust company with a Federal Reserve master account.” What does that mean exactly? Basically, a federal reserve master account allows Reserve Trust to move dollars on behalf of its customers directly, via wire and ACH payment rails, without an intermediate or partner bank. 

Historically, only banks were able to access these payment rails directly, which left both domestic and international fintechs “with limited partner options, poor technology and slow implementations when it came to embedding high-value B2B payments,” says COO Dave Cahill. Reserve Trust touts that its technology and services give companies all over the world the ability to “seamlessly move money via the first cloud-based payment system connected directly to the Federal Reserve” since it is not limited by legacy banking systems.

Image Credits: CEO Dave Wright and COO Dave Cahill / Reserve Trust

In conjunction with the fundraise, Reserve Trust is also announcing that Dave Wright has been named CEO and Cahill joined as COO. The pair worked together previously at SolidFire, a flash storage startup that Wright founded and sold to NetApp for $870 million in 2016.

Reserve Trust works with businesses that seek to embed domestic and cross-border B2B payment by offering them the ability to store funds in custody accounts that are backed by its Federal Reserve master account.

The history of the company relates back to the global financial crisis. After the crisis, banks in the U.S. went through a process called derisking, which meant they shed businesses that on a risk return basis weren’t as strong as other businesses. One of those included the handling of U.S. dollar payments, particularly in emerging countries. 

“One of the consequences of this is that it became significantly more difficult and expensive for businesses and smaller economies to trade and move U.S. dollars around the world,” Wright told TechCrunch. “And the founders of Reserve Trust saw this opportunity to build a new type of financial institution that was focused on helping to provide U.S. dollar payment services, especially to emerging fintechs in markets around the world, and helping to reconnect those economies to global trade.”

But rather than start a bank, the founders (Dennis Gingold, Justin Guilder) navigated a previously unexplored part of regulatory waters to create a state-chartered trust company with a Federal Reserve master account.

“That’s something that had never really been done before,” Wright added. “Pretty much every other trust company has to work through banks for all their payment services. Reserve Trust is the first that has actually managed to get a Federal Reserve master account and can process payments directly with the Federal Reserve.”

The complex process took about three years, and in 2018, the company got a Federal Reserve master account and started providing U.S. dollar custody and payment services for fintechs all over the world. Reserve Trust began to see strong demand from payment and fintech companies that were struggling to develop strong partner bank relationships, even though fundamentally there wasn’t any reason the banks couldn’t work with them. 

“They found working with banks to be a slow process, one that didn’t involve a lot of technology expertise on the side of the banks, and it was really inhibiting their ability to develop their technology,” Wright said. And that was even here in the U.S. Today, more than half of its business is from domestic fintechs, although Reserve Trust still has a strong international presence as well.

The new funds will mainly go toward helping the company scale to handle what Wright describes as “a fairly overwhelming amount of demand” and toward building out the team, the technology and the services it needs to address the payment needs of larger, faster growing fintechs around the world. 

“Most of our customers today are small and midsize fintechs, but now we’re seeing demand for much larger fintechs that have much higher payment volumes and are involved in embedded banking and B2B payments,” Wright said. “They are looking for a stronger banking partner than what they’ve been able to find among the role of traditional banks.” Customers include Unlimint and VertoFX, among others.

QED Investors partner Amias Gerety and FinTech Collective principal Matt Levinson are bullish both on Reserve Trust’s history and its potential.

The pair point to payments giant Stripe as an example of how far Reserve Trust can go.

“Stripe has significant market share doing merchant acquiring and processing e-commerce payments for the consumer,” Levinson said. “B2B payments is significantly bigger in terms of volume, so we’re talking about well over $20 trillion of addressable payment flow. But there’s no real technology company that’s brought the modern payments platform to market without being beholden to legacy banks. And that’s why we’re so excited about this business.”

Reserve Trust, he added, is giving businesses a way to facilitate B2B payments that “are smarter, faster and cheaper.”

Gerety agrees.

“Despite all the excitement around digital payments and infrastructure, there is still no fintech that can offer direct integration with the U.S. payment system,” he said. “With Reserve Trust, we are creating foundational infrastructure to hold and move payments globally and at scale.”

#b2b-payments, #cloud, #finance, #fintech, #fintech-collective, #funding, #fundings-exits, #payments, #qed-investors, #recent-funding, #reserve-trust, #startups, #tc, #venture-capital

Accounting firm Proper banks $9M Series A to automate property management

Proper, an automated accounting and bookkeeping service for property managers, announced Wednesday it raised $9 million in Series A funding in a round led by QED.

Existing investors MetaProp, Expa and Bling Capital also participated in the round, which gives the San Francisco-based proptech company a total amount raised of $13.8 million. The company brought in $4.8 million of seed funding last August.

CEO Mark Rojas, whose background is in product development, founded Proper in 2017 after spending a year-and-a-half learning the ropes in a property manager’s office. He was looking at the maintenance side of the business when he realized how much the accounting part of the business “was almost a dumpster fire.”

“I knew the space was rife with problems to solve and how much accounting was a bigger part of the operations that needed to be executed each month and tied everything else together,” Rojas told TechCrunch. “Property managers don’t often come from an accounting background — usually they have a real estate license, so that lack of expertise can put them in a position where they can’t scale their portfolio, or if they try to, things break.”

Proper dashboard

Proper’s tech-enabled service is designed to execute those specific real estate accounting-related processes and apply automation to those that are repetitive. The company said property managers with 1,000 doors can see 63% higher profit margins and spend 45% less time per year on accounting.

Rojas says accounting automation in real estate has been neglected with few startups stepping up to solve it like Proper is. He considers proptech still in its infancy with much of the innovation coming from home buying, selling and maintenance rather than accounting. It also doesn’t have a “champion company” yet leading the way.

Rather than sit and wait for a company like that to emerge, Proper pivoted to address accounting in early 2020 and saw “growth explode” over the past year. Rojas said he saw the opportunity to not only scale aggressively on the revenue side, but also build a lasting business that was sustainable.

“Real estate is the most valuable asset class, and what I am looking at is how big this industry could be,” he added. “That idea of there being no competitors enables us to be aggressive, be the go-to brand and scale with that high demand.”

Now armed with the Series A funding, the company intends to focus on operations, product development, build a new customer-facing platform and add to its headcount across business functions. Rojas said it went from zero to $2.3 million in annual recurring revenue in 2020 over 12 months. Proper also grew from 15 to 120 employees in 2021 and expects to end the year with about 200.

Proper paused its sales and marketing in order to scale, and Rojas is ready to hit the “play” button again. He is also happy to work with QED, which is in alignment with the company’s vision.

As part of the investment, QED Partner Matt Risley is joining Proper’s board of directors. Risley’s background is in fintech, and he was previously chief financial officer of e-commerce payment platform Klarna.

Risley told TechCrunch he initially met Rojas during Proper’s seed round and was tracking the company’s growth as its initial ideas came to fruition. He considers Proper among the success stories coming out of the real estate industry that also include RealPage, Yardi and AvidXchange.

He spent time with small business owners using Proper and said its product has a good market fit.

“What we see consistently is they are passionate about the core business of delivering value to clients and have a true expertise,” Risley said. “We also see the relief that Proper gives property owners and managers from doing bookkeeping. Anything that enables small businesses to spend more time on what they like about their businesses, they will seize upon it.”

#bling-capital, #expa, #funding, #klarna, #metaprop, #proper, #qed-investors, #real-estate, #realpage, #recent-funding, #startups, #tc

Refyne raises $20.1 million to help workers in India get faster access to wages

A young Indian startup that is betting that earned wage access solutions will take off in the South Asian nation said on Wednesday it has closed a new round from high-profile investors.

Bangalore-based Refyne said on Wednesday that it has raised $16 million in Series A from partners of DST Global and RTP Global. The startup also disclosed that it raised a $4.1 million seed round in December from Jigsaw VC and QED Investors and XYZ Capital, all of whom also participated in the new round.

TechCrunch reported last month that Refyne was in talks with RTP Global to raise money.

Refyne works with employers to let their workers access their earned salaries in real-time. For instance, an employee could see how much they have earned in a week and withdraw a fraction of it anytime they wish.

The idea, explained Chitresh Sharma, co-founder and chief executive of Refyne, is that many individuals in India run out of cash before their next payday and then some end up taking loans on not so favorable terms to make ends meet. “An employee should have the option to access their own earnings at any time,” he told TechCrunch in an interview.

It’s a concept that has taken off in several markets — with many major employers such as Uber and McDonald’s offering this flexibility to their workforce — but is yet to be tested in India, where on paper, earned wage access idea should work as a significant portion of the working force remains on a shaky financial footing. Earlier on Monday, Indonesian startup Wagely announced a $5.5 million fundraise to test this idea in the Southeast Asian market.

Sharma, a third-time founder who returned to India to start Refyne, said the startup’s plug-and-play software is aimed at employers of all size, and the platform can prove beneficial to blue-collar as well as white-collar workers.

“The need for financial inclusion is more important today than ever before. As the first company in India to provide earned wage access, Refyne can revolutionise the way millions of workers manage their money. By providing a real, affordable alternative to payday loans, Refyne will not only improve a person’s financial health, but it will add control for the consumer and dramatically reduce the stress on those who worry about meeting their financial obligations,” said QED Investors Managing Partner and Co-Founder Nigel Morris, in a statement. This is QED’s first investment in India.

Over 100 companies in India are already using Refyne’s platform, serving over 300,000 employees. Some of the clients include Rebel Foods, Cafe Coffee Day, Hira Group, and Chai Point.

This is a developing story. More to follow…

#asia, #dst-global, #earned-wage-access, #finance, #funding, #india, #qed-investors

Wayflyer raises $76M to provide ‘revenue-based’ financing to e-commerce merchants

Wayflyer, a revenue-based financing platform for e-commerce merchants, has raised $76 million in a Series A funding round led by Left Lane Capital.

“Partners” of DST Global, QED Investors, Speedinvest and Zinal Growth — the family office of Guillaume Pousaz (founder of Checkout.com) — also put money in the round. The raise comes just after Wayflyer raised $100 million in debt funding to support its cash advance product, and 14 months after the Dublin, Ireland-based startup launched its first product.

With an e-commerce boom fueled by the COVID-19 pandemic, Wayflyer is the latest in a group of startups focused on the space that has attracted investor interest as of late. The company aims to help e-commerce merchants “unlock growth” by giving them access to working capital (from $10,000 up to $20 million) so they can improve cash flow and drive sales. For example, more cash can help these merchants do things like buy more inventory in bulk so they can meet customer demand and save money. 

In a nutshell, Wayflyer uses analytics and sends merchants cash to make inventory purchases or investments in their business. Those merchants then repay Wayflyer using a percentage of their revenue until the money is paid back (plus a fee charged for the cash advance). So essentially, the merchants are using their revenue to get financing, hence the term revenue-based financing. The advantage, Wayflyer says, is that companies make repayments as a percentage of their sales. So if they have a slow month, they will pay back less. So, there’s more flexibility involved than with other mechanisms such as traditional bank loans.

Co-founder Aidan Corbett believes that in a crowded space, Wayflyer’s use of big data gives it an edge over competitors.

Corbett and former VC Jack Pierse spun Wayflyer out of a marketing analytics company that Corbett had also started, called Conjura, in September 2019.

“Jack came to me and said, ‘You should stop using our marketing analytics engine to do these big enterprise SaaS solutions, and instead use them to underwrite e-commerce businesses for short-term finance,’ ” Corbett recalls.

And so he did.

“We just had our heads down and started repurposing the platform for it to be an underwriting platform,” Corbett said. It launched in April 2020, doing about $600,000 in advances at the time. In March of 2021, Wayflyer did about $36 million in advances.

“So, it’s been a pretty aggressive kind of growth,” Corbett said.

Over the past six months alone, the company has seen its business grow 290% as it has deployed over $150 million of funding across 10 markets with a focus on the U.S., the United Kingdom and Australia. About 75% of its customers are U.S. based.

Wayflyer plans to use its new capital toward product development and global expansion with the goal of entering “multiple” new markets in the coming months. The company recently opened a sales office in Atlanta, and also has locations in the U.K., the Netherlands and Spain.

To Corbett, the company’s offering is more compelling than buy now, pay later solutions for consumers for example, in that it is funding the merchant directly and able to add services on top of that.

“There’s a lot more opportunity for companies like ourselves to differentiate because essentially, we focus on the merchants. And when we underwrite the merchant by getting data from the merchant, there’s a lot of additional services that you can put in on top,” Corbett explained. “Whereas with buy now, pay later, you get information on the consumer, and there’s not as much room to add additional services on top.”

For example, if a business requests an advance and either is not approved for one, or doesn’t choose to take it, Wayflyer’s analytics platform is free to anybody who signs up to help them optimize their marketing spend.

“This is a critical driver of value for e-commerce businesses. If you can’t acquire customers at a reasonable price, you’re not going to be around very long. And a lot of early-stage e-commerce businesses struggle with that,” Corbett said.

It also can pair up a merchant with a marketing analytics “specialist” to analyze its marketing performance or an inventory “specialist” to look at the current terms and price a business is getting from a supplier.

“Our focus from the very beginning is really supporting the merchants, not just providing them with working capital,” Corbett said.  

Another way the company claims to be different is in how it deploys funds. As mentioned above, merchants can pay the money back at varied terms, depending on how sales are going. The company makes money by charging a principal on advances, and then a “remittance rate” on revenues until the total amount is paid back.

“We tend to be more flexible than competition in this way,” Corbett said. “Also, some competitors will pay invoices on merchants’ behalf or give them a pre-charged card to use on advertising spend,” Corbett said. “We always give cash into a merchant’s account.” 

Wayflyer recently inked an agreement with Adobe Commerce, a partnership it said would provide a new channel to further amplify its growth with the goal of funding 8,000 e-commerce businesses in the first year of the partnership.

For his part, Left Lane Capital Partner Dan Ahrens said that his firm was impressed by Wayflyer’s “nuanced understanding of what will drive value for their clients.”

“The team’s focus, specialization, and deep analytical expertise within the e-commerce market also drives superior underwriting,” he told TechCrunch. “Their explosive growth has not come about by taking on undue risk. We are big believers that their underwriting will only improve with scale, and that Wayflyer will be able to compound its competitive advantages over time.”

As mentioned, this is an increasingly crowded space. Earlier this month, Settle announced it had raised $15 million in a Series A funding round led by Kleiner Perkins to give e-commerce and consumer packaged goods (CPG) companies access to non-dilutive capital.

#adobe, #atlanta, #australia, #bank, #checkout-com, #distribution, #dst-global, #dublin, #e-commerce, #ecommerce, #economy, #finance, #funding, #fundings-exits, #guillaume-pousaz, #ireland, #kleiner-perkins, #left-lane-capital, #merchant, #netherlands, #qed-investors, #recent-funding, #spain, #startup, #startups, #tc, #underwriting, #united-kingdom, #united-states, #wayflyer

With backers like Tiger Global, LatAm crypto exchange Bitso raises $250M at a $2.2B valuation

Bitso, a regulated crypto exchange in Latin America, announced today it has raised $250 million in a Series C round of funding that values the company at $2.2 billion.

Tiger Global and Coatue co-led the round, which also included participation from Paradigm, BOND & Valor Capital Group and existing backers QED, Pantera Capital and Kaszek.

The news caught our attention for several reasons. For one, it comes just four months after the Brazilian startup raised $62 million in a Series B round. Secondly, the company believes the funding makes it the most valuable crypto platform in Latin America. And lastly, it also makes the company one of the most highly valued fintechs in the region.

Last year was a good one for Bitso, which says it processed more than $1.2 billion in international payments — including remittances and payments between companies — during 2020 alone. Bitso says it also has surpassed 2 million users. These two milestones, the company argues, is evidence of the growing use of crypto as an everyday financial tool in the region.

Demand for crypto assets and crypto-enabled financial products have soared in popularity both for individuals and businesses in the region, according to Bitso, which aims to be “the safest, most transparent, and only regulatory compliant platform” in Latin America. The company also says it’s the only player in the region to offer crypto-insurance for its client’s funds.

“The growth of the crypto ecosystem this year has been remarkable. It took Bitso six years to get its first million clients. Now — less than 10 months later — we have reached the 2 million mark,” said Bitso co-founder and CEO Daniel Vogel. But the metrics he is most proud of are that Bitso has also more than doubled the assets on its platform in the last five months and that its transacting volume during the 2021 first quarter exceeded the transaction volume it did in all of 2020.

Bitso was founded in January 2014 and acquired its first customer in April of that year.

Bitso’s mission, put simply, is to build next-generation borderless financial services for consumers and businesses alike. “Cryptocurrencies are the future of finance and Bitso makes the future available today,” the company says.

“Bitso offers products and services for individuals and businesses to use crypto in their everyday life,” Vogel said. “In some parts of the world, crypto is associated with speculation. Bitso’s customers rely on the technology for everyday uses from receiving remittances to engaging in international commerce.”

Image Credits: Bitso

Bitso says its “global-minded” product offerings fit the needs of local customers in Mexico, Argentina and now Brazil, where it just launched its retail operations. The company plans to use its new capital toward broadening its capabilities and product offering. It also plans to expand its operations in other Latin American countries in the coming months. In January, the Financial Superintendence of Colombia announced Bitso as one of the authorized companies in its Sandbox and crypto pilot program.

Bitso’s upcoming products include a crypto derivatives platform and interest bearing accounts for crypto.

“This is a pivotal moment for the future of finance in Latin America,” Vogel told TechCrunch. “We see a significant amount of traditional financial infrastructure in the region being replaced by crypto. We plan to use this funding to continue that trend by expanding our product offering for individuals and businesses.”

Naturally, Bitso’s investors are bullish on the company’s potential.

QED Investors co-founder and managing partner Nigel Morris admits that in the past he was “a crypto denier.”

“For the longest time, we didn’t see a way crypto fit. It wasn’t clear until recently that the use cases for crypto expanded much beyond speculative trading. There are now a whole series of conventional banking products that we can wrap around it,” Morris told TechCrunch.

Bitso’s mission, he said, is to “make crypto useful” and QED believes the company is succeeding at doing just that.

“Daniel and the entire Bitso team is passionate about taking the mystique out of crypto. Crypto is not going away; it’s going to be here for the future,” Morris said. “By sitting at the intersection of crypto and traditional financial institutions, Bitso has a promise to provide lower-cost, friction-free financial services to entire populations of individuals who otherwise would be excluded — a laudable and unique mission indeed.”

Bitso, he added, is learning from the crypto experience in the U.S. and around the world.

“Not making the same mistakes and leaning into the emerging regulatory landscape has been a competitive advantage to Bitso’s success in Mexico,” Morris said. “As Bitso grows throughout the regions, they certainly have a leg up and might even leapfrog crypto adoption in the U.S.”

“Crypto is rapidly gaining adoption in Latin America,” said Tiger Global Partner Scott Shleifer, in a written statement. “We are excited to partner with Bitso and believe they have the right team and platform to increase share in this growing market.”

Founded in 2014, Bitso has more than 300 employees across 25 different countries. That compares to 116 employees last year at this time. In particular, its growth in Brazil is increasing exponentially.

“We’ve gone from 1 to 26 Bitsonauts already based in Brazil, with many more working from abroad, and plan to 3X our number of hires in Brazil by the end of the year,” Vogel said, who acknowledged that the pandemic really impacted his company via the shift to remote work. “As we expand our reach into new territories, it has become a lot easier to meet staffing needs when the requirements are based on knowledge over geography.”

Bitso’s leadership is mostly based in Mexico, but the company also has offices in Buenos Aires, São Paolo and Gibraltar.

#argentina, #bitso, #bond, #brazil, #coatue, #colombia, #crypto-economy, #cryptocurrency, #decentralization, #finance, #financial-infrastructure, #financial-technology, #fintech, #funding, #fundings-exits, #latin-america, #mexico, #pantera-capital, #paradigm, #qed, #qed-investors, #recent-funding, #sao-paulo, #scott-shleifer, #startups, #tc, #tiger-global, #united-states, #valor-capital-group, #venture-capital

Tribal Credit, which provides credit cards to startups in emerging markets, raises $34.3M

The B2B payments space has seen an explosion in demand, and investor interest, in the wake of the COVID-19 pandemic as businesses try to figure out how to pay each other digitally. The challenges become even more complex when dealing with cross-border payments.

Startups that were formed before the pandemic stand to benefit from the shift. One such startup, Tribal Credit, launched its beta in late 2019 to provide payment products for startups and small to medium-sized businesses (SMBs) in emerging markets.

Today, Tribal Credit announced it has raised $34.3 million in a combined Series A and debt round led by QED Investors and Partners for Growth (PFG). Existing backers BECO Capital, Global Ventures, OTG Ventures and Endure Capital also participated in the round, along with new investor Endeavor Catalyst. The raise follows “10x” year-over-year growth, according to CEO and co-founder Amr Shady.

As part of the investment, Tribal received $3 million from the Stellar Development Foundation, a nonprofit organization that supports the development and growth of the open-source Stellar blockchain network. 

Tribal uses a proprietary AI-driven underwriting approval process to evaluate businesses and approve them for credit lines. Those businesses can then use those credit lines to spend on Tribal’s products, Tribal Card and Tribal Pay. Tribal Card is a business Visa card that allows users to create physical and virtual multi-currency cards. Tribal Pay allows them to make payments to merchants and suppliers that don’t accept credit cards. 

The company says its value proposition lies not only in its ability to provide SMEs with virtual and physical corporate cards, but also a digital platform that allows founders and CFOs “to give access to and manage the spend of their distributed teams.”

“We’ve seen more demand for making B2B online payments amidst the ongoing COVID-19 pandemic, with many SMEs migrating to digital and spending more on online products and services,” Shady told TechCrunch. “Companies in this new economy are digital and global first. The need for a corporate card was accelerated. As card spend grew during the pandemic, this meant greater liability on founders’ using their personal cards, or other competing cards linked to their personal credit.” 

Tribal, he said, underwrites the company without impacting the founders’ credit. 

Another accelerator for its products was how the pandemic forced teams to work remotely. Founders and CFOs needed a way to provide access to corporate payments while maintaining control, Shady pointed out. Tribal’s platform aims to streamline financial operations for a distributed team. 

Of course, Tribal is not the only company offering credit cards for startups. Brex, which has amassed $465 million in venture capital funding to date, also markets a credit card tailored for startups. While the companies are similar, there is a distinct difference, according to Shady: “Emerging market SMEs have different pains, particularly when it comes to cross-border payments.”

Tribal’s initial efforts are focused on Latin America, in particular Mexico, which is the startup’s biggest market.

Its new capital will go toward accelerating its growth in the region, according to Shady. In particular, the equity will go toward growing Tribal’s leadership team in Mexico, while the debt will fuel the company’s customers’ growing credit lines, Shady said.

“We have invested heavily in our product over the past year,” Shady said. “We’re the first mover in our segment in LatAm with a diverse suite of SME products that includes corporate cards, wire payments and treasury services. We’re incredibly excited by the future ahead of us in Mexico and beyond.” 

Customers include Minu, Ben and Frank, Fairplay and SLM, among others.

Looking ahead, Tribal is exploring four other Latin American markets and expects to be operational in one new market by year’s end, according to Shady.

Image Credits: Tribal Credit

QED Investors partner Lauren Morton said her firm has been following payments and the lending needs of SMEs in emerging markets closely.

“Compared with everything else we’ve seen in this market, Tribal has a differentiated and superior product that meets customers’ needs in a way that no competitor can match,” she said in a written statement. 

Morton went on to note that Tribal has had strong traction in Mexico, with adoption from “fast-growing startups” across the country, including many companies within QED’s own portfolio. 

PFG is providing the debt facility for Tribal. In addition to funding from PFG’s global fund, the firm will be co-investing from its Latin America Growth Lending Fund in partnership with IDB Invest and SVB Financial Group, the parent company of Silicon Valley Bank. 

Tribal Credit previously raised $7.8 million in a series of seed rounds. The latest round brings its total raised to $42.1 million. Tribal Credit also joined Visa’s Fintech Fast Track Program, a move that it said should accelerate its integration with Visa’s global payment network.  The company currently has 75 employees, up from 31 last year.

#artificial-intelligence, #bank, #beco-capital, #blockchain, #blockchain-network, #credit, #credit-card, #debt, #economy, #fairplay, #finance, #frank, #funding, #fundings-exits, #latin-america, #mexico, #minu, #money, #online-payments, #online-products, #partners-for-growth, #payment-network, #payments, #qed-investors, #recent-funding, #silicon-valley-bank, #slm, #startups, #svb-financial-group, #tc, #tribal-credit, #venture-capital

Payhawk raises $20 million to unify corporate cards, payments and expenses

Fintech startup Payhawk has raised a $20 million funding round. QED Investors is leading the round with existing investor Earlybird Digital East also participating. Payhawk is building a unified system to manage all the money that is going in and out.

Essentially, companies switching to Payhawk can replace several services that they already use and that didn’t interact well with each other. Payhawk lets you issue corporate cards for your employees, manage invoices and track payments from a single interface.

After signing up, customers get their own banking details with a dedicated IBAN. You can connect with your existing bank account, load funds to your Payhawk account and start using it in multiple ways.

Compared to other companies working on similar products, Payhawk gives each customer their own IBAN, which means that they can receive third-party payments.

One of the key features of Payhawk is that customers can issue virtual and physical cards for employees with different rules. You can set up a team budget, configure an approval workflow for large transactions and let Payhawk handle receipt collection from those card transactions.

You can upload invoices to manage them through Payhawk. The startup tries to automatically extract data from those invoices for easier reconciliation. Payhawk also lets you reimburse employees. The service acts as a single source of truth for your company’s spending. Finally, you can connect Payhawk with your existing ERP system.

As a software-as-a-service solution, you pay a monthly subscription fee that will vary depending on optional features and the number of active cards. Clients include LuxAir, Lotto24, Viking Life, ATU, Gtmhub, MacPaw and By Miles. Overall, the startup has 200 clients.

The company has been growing nicely as revenue doubled in Q1 2021. It currently accepts clients in the European Union and the U.K. but it already plans to expand beyond those markets. Up next, Payhawk plans to launch credit cards, more currencies and tighter integration with corporate bank accounts.

#corporate-card, #europe, #finance, #fintech, #fundings-exits, #payhawk, #qed-investors, #recent-funding, #spend-management, #startups

Nuvocargo raises $12M to digitize the freight logistics industry

Despite hundreds of billions of dollars’ worth of goods flowing across the U.S.-Mexican border each year, the freight industry has remained analog — each side of the border offering up its own maze of bureaucracy.

Nuvocargo, a digital logistics platform for cross-border trade, is trying to modernize the process. The company offers an all-in-one service that rolls freight forwarding, customs brokerage, cargo insurance and even trade financing into one UI-friendly software and app. Housing all of these services under one app makes it easier for companies to track their supply chain and gives customs and logistics teams access to more centralized information, according to Nuvocargo CEO Deepak Chhugani.

“And you just have one single audit trail in case something goes wrong,” Chhugani told TechCrunch, adding that the process helps reduce or eliminate the extra costs that come with a high administrative overhead. It also lets customers take a high-level look at their operations from within a single interface, he said.

Chhugani likened the experience to something like UberEats, which offers customers the ability to easily track food orders from restaurant to home.

“Just imagine, because you are dealing with so many different parties, you lose visibility on what’s going on. If you want a snapshot of – what did I spend end-to-end? – you actually have to go through all these email chains or faxes or texts with different providers,” Chhugani explained. “Some of them might be in another country. So [Nuvocargo] just creates more visibility throughout the process, from where the goods literally are to visibility around your finances.”

But Nuvocargo is thinking beyond the actual movement of goods. The company is also starting to offer customs brokerage, comprehensive cross-border cargo insurance, and factoring, or short-term account receivable finance. The last of these solves an especially difficult pain point for trucking companies, who sometimes must wait up to net-90 days to be paid.

The approach has caught investors’ eyes: nearly one year after announcing it had raised a $5.3 million seed round, the company has closed on a $12 million Series A funding led by QED Investors and with injections from David Velez, Michael Ronen, Raymond Tonsing, FJ Labs and Clocktower. Investors NFX and ALLVP, which participated in the previous round, also participated.

The “holy grail” of their new offerings, as Chhugani called it, is trade financing. Because Nuvocargo will already have a relationship with companies, including an understanding of credit and fraud risk, its hope is that it can offer financial products at a competitive rate.

This is what attracted QED Investors, a firm that typically focuses on financial technology rather than logistics and trucking.

“After speaking with [Deepak] and seeing the connection points and parallels between what we were looking at in e-commerce and the challenges of actually getting goods across border, the fintech spark went off in my own head,” Lauren Connolley Morton, a Partner at QED, said in an interview with TechCrunch. “The opportunities for factoring, for lending, for insuring goods are all very much right up our alley.”

Although Chhugani declined to disclose Nuvocargo’s valuation after this most recent round of funding, it’s clear there is plenty of room to grow into the logistics industry’s huge and seemingly disaggregated value chain.

#logistics, #nuvocargo, #qed-investors, #series-a, #transportation

Ribbit Capital leads $26.7M round for Brazilian fintech Cora

Cora, a São Paulo-based technology-enabled lender to small-and-medium-sized businesses, has raised $26.7 million in a Series A round led by Silicon Valley VC firm Ribbit Capital.

Kaszek Ventures, QED Investors and Greenoaks Capital also participated in the financing, which brings the startup’s total raised to $36.7 million since its 2019 inception. Kaszek led Cora’s $10 million seed round (believed at that time to be one of the largest seed investments in LatAm) in December 2019 with Ribbit then following.

Last year, Cora got its license approved from the Central Bank of Brazil, making it a 403 bank. The fintech then launched its product in October 2020 and has since grown to have about 60,000 customers and 110 employees.

Cora offers a variety of solutions, ranging from a digital checking account, Visa debit card and management tools such as an invoice manager and cashflow dashboard. With the checking account, customers have the ability to sending and receive money as well as pay bills digitally.

This isn’t the first venture for Cora co-founders Igor Senra and Leo Mendes. The paid had worked together before — founding their first online payments company, MOIP, in 2005. That company sold to Germany’s WireCard in 2016 (with a 3 million customer base) and after three years the founders were able to strike out again.

Cora co-founders Léo Mendes and Igor Senra; Image courtesy of Cora

With Cora, the pair’s long-term goals is to “provide everything that a SMB will need in a bank.”

Looking ahead, the pair has the ambitious goal of being “the fastest growing neobank focused on SMBs in the world.” It plans to use the new capital to add new features and improve existing ones; on operations and launching a portfolio of credit products.

In particular, Cora wants to go even deeper in certain segments such as B2B professional services such as law and accounting firms; real estate brokerage and education.

Ribbit Capital Partner Nikolay Kostov believes that Cora has embarked on “an ambitious mission” to change how small businesses in Brazil are able to access and experience banking.

“While the consumer banking experience has undergone a massive transformation thanks to new digital experiences over the last decade, this is, sadly, still not the case on the small business side,” he said.

For example, Kostov points out, opening a traditional small business bank account in Brazil takes weeks, “reels of paper, and often comes with low limits, poor service, and antiquated digital interfaces.”

Meanwhile, the number of new small businesses in the country continues to grow.

“The combination of these factors makes Brazil an especially attractive market for Cora to launch in and disrupt,” Kostov told TechCrunch. “The Cora founding team is uniquely qualified and deeply attuned to the challenges of small businesses in the country, having spent their entire careers building digital products to serve their needs.”

Since Ribbit’s start in 2012, he added, LatAm has been a core focus geography for the firm “given the magnitude of challenges, and opportunities, in the region to reinvent financial services and serve customers better.”

Ribbit has invested in 15 companies in the region and continues to look for more to back.

“We fully expect that several fintech companies born in the region will become global champions that serve to inspire other entrepreneurs across the globe,” Kostov said.

#brazil, #cora, #digital-banking, #finance, #fintech, #funding, #fundings-exits, #greenoaks-capital, #kaszek-ventures, #latin-america, #qed-investors, #recent-funding, #ribbit-capital, #smbs, #startups, #venture-capital

With investors expecting a Latin American cryptocurrency boom, Mexico’s Bitso raises $62 million

Six years after the launch of the Mexico-based crypotcurrency exchange and financial services platform Bitso the company revealed it has closed on $62 million in financing to capitalize on the cryptocurrency boom investors expect to hit Latin America. 

The three major cryptocurrencies are all trading up in the waning months of 2020, with Bitcoin prices nearing (or exceeding) record highs. The global growth of these digital currencies and their applications in emerging markets have savvy financial services investors like the firm QED Investors (founded by the masterminds behind Capital One) intrigued. Which is why the firm joined the Latin American heavyweight investor Kaszek Ventures in financing Bitso’s $62 million round.

Bitso may already be the dominant cryptocurrency platform in Latin America boasting 1 million users (primarily in Mexico and Argentina) and is one of the only platforms to be licensed under the Distributed Ledger Technology (DLT) license from the Gibraltar Financial Services Commission (GFSC)

 A visual representation of digital cryptocurrencies, Bitcoin, Ripple, Ethernum, Dash, Monero and Litecoin. (Photo Illustration by Chesnot/Getty Images)

Founded by Ben Peters, Daniel Vogel and Pablo Gonzalez, the company has been dominant in the Latin America crypto market, but it has also not been able to avoid some of the controversies that surround the crypto industry.

A report from Reuters flagged Bitso as one of the platforms that criminals like the human trafficker Ignacio Santoyo were using to launder money.

The founders of Bitso and their investors focus on the ability for cryptocurrencies to reduce friction and cost in markets where financial services often ignore the middle class and low income consumers that often need them the most.

“Crypto as an asset class was not going away and was clearly coming of age,” said Nigel Morris, the QED co-founder who previously led Capital One. “It’s not going away. And with that there are various financial services that are enabled by this asset class. You can lend against it. You can use it to move money cross-border. This thing is now palpable and real and has come of age.”

For all of those reasons, Latin America represented a big opportunity for QED Investors to make its first bet in the cryptocurrency space, and for Bitso to be that initial investment.

This is a terrific business model and a great team and a geography that we know,” said Morris. The firm has invested in startups like Coru and Confio already and is a big believer in the opportunity for financial services startups in Mexico broadly. 

For Bitso, the big opportunities are presenting Latin American investors with an opportunity to invest in foreign currencies like the US dollar through stablecoin offerings alongside a slew of lending and cross-border remittance services — in addition to the peer to peer transaction services the company already offers.

Bitso already employs 200 people and intends to use the capital to expand aggressively across Latin America. The company’s first port of call will be Brazil. The largest market in the region, Brazil represents a huge untapped opportunity for Bitso’s growth, according to co-founder Daniel Vogel.

“We have really good traction building products where the central product is not exposure to bitcoin or crypto but fulfilling this vision of making crypto useful,” Vogel said. “These two investors have a lot fo knowledge in the fintech space int he traditional financial services space and we’re excited to continue developing projects. We have been building some of these things out … utilizing technology for things that are useful to the end customer and developing products along those lines.”

For instance, Bitso is already processing $1 billion in remittances for customers, enabling transactions for financial services partners like crypto-currency enabled money transmitters.

Vogel first met QED and Kaszek when he was just getting Bitso off the ground, living and working in a hacker house that was shared with five other companies. “I had to kick my team out of the meeting from my only room,” Vogel recalled.

Now the company boasts a customer base of 1 million and with the new cash, hopes to add another 1 million Brazilian customers to the platform.

He thinks that access to stablecoins will lead the way. “There was so much uncertainty that people flocked to the dollar as a store of value,” Vogel said. “Access to dollars is something that has grown quite a bit in the last year.”

#abra, #argentina, #bitcoin, #bitso, #brazil, #co-founder, #cryptocurrencies, #currency, #digital-currencies, #financial-services, #kaszek-ventures, #latin-america, #mexico, #peer-to-peer, #qed-investors, #stablecoin, #tc

Collective, a back office platform that caters to ‘businesses of one,’ just landed a hefty seed round

Americans and other global citizens are increasingly self-employed, thanks to great software, the need for flexibility, and because skilled services especially can pay fairly well, among other reasons.

In fact, exactly one year ago, the Freelancers Union and Upwork, a digital platform for freelancers, released a report estimating that 35% of the U.S. workforce had begun freelancing. With COVID-19 still making its way around the country and globe, prompting massive and continued job dislocation for many tens of millions  of people, that percentage is likely to rise quickly.

Unsurprisingly, savvy startups see the economic power of these individuals — many of whom aren’t interested in managing anyone or anything other than the steady growth of their own businesses. A case in point is Collective, a 2.5-year-old, 20-person San Francisco-based startup that’s been quietly building back office services like tax preparation and bookkeeping for what it dubs “business of one” owners, and which just closed on $8.65 million in seed funding.

General Catalyst and QED Investors co-led the round, along with a string or renowned angel investors, including Uber cofounder Garrett Camp, Figma founder Dylan Field, and Doordash executive Gokul Rajaram.

We talked yesterday with cofounder and CEO Hooman Radfar about Collective’s mission to “empower, support and connect the self-employed community” — and what, exactly, it’s proposing.

TC: You previously founded a company and, even before it sold to Oracle in 2016, you had jumped over to VC, working with Garrett Camp at his startup studio Expa. Why shift back into founder mode?

HR: What I saw throughout across AddThis and Expa and my angel investing is that managing finances is hard. Accounting, taxes, compliance — all that set-up as a small business is annoying.

Two years ago, [Collective cofounder] Uger [Kaner] came into Expa and he basically pitched me on a startup-in-a-box-type program that we were talking about building from an incubation perspective, but [with more of a pointed focus on back office issues]. He’s an immigrant like me, and because he didn’t quite understand the system, he wound up having tax penalties — penalties that are even worse when you’re a freelancer. Some startups have come up with a  bespoke version of what we offer, but we were like, ‘Why do they have to do it?’ These are commodities, but if you put them together in a platform, they can can be powerful.

TC: So is what you’ve created proprietary or are you working with third parties?

HR: Both. We’re an online concierge that’s focused on the back office as the core, meaning accounting and tax services. We also form an S Corp for you because you can save a lot of money [compared with forming a business as an LLC, which features different tax requirements]. So there’s an integration layer plus a dashboard on top of that. If you’re an S Corp, you need to have payroll, so we have partnership with Gusto that comes with your subscription. We have a partnership with Quickbooks. We work with a third party on compliance. Our vision is to make this easy for you and to set this on autopilot because we understand that time is literally money.

TC: How much are you charging?

For taxes, accounting, business banking, and payroll, for the core package, it’s $200 a month. We are piloting bookkeeping and a fuller service package that’s probably [representative of] the direction we’ll head over time, and that will be an additional fee.

TC: How can you persuade these businesses of one that it’s worth that cost?

HR: There are almost three million people in the U.S. who [employ only themselves and] are making more than $100,000 a year and if you think about how many of these [different products] they are already using, it’s a great deal. Quickbooks and Gusto is cheaper with us. You see savings through expensing. The magic is really running your S Corp the right way. Part of that is normal income tax, but you also have a distribution and it’s taxed differently than an income — it’s taxed less. So we pull in salary data and look at expenses and across states, and say, ‘This is what we’d recommend to you based on how your cash flow is coming in, so you recognize this distribution in a compliant way.’

TC: Interesting about this useful data that you’ll be amassing from your customers. How might you use it? 

HR: Our first concern is making sure the right people are seeing it [meaning we’re focused on privacy]. But there’s a lot we can do with the aggregation of that data once we’ve earned the right to use it. Among the things we could do, theoretically, including creating a new level of scoring. If you’re a business of one, for example, it’s very difficult to get mortgages and loans, because credit agencies don’t have the tools to assess you. But if we have your financial history for years, can we represent that you’re a great person, you have a great business.

Another interesting direction as we reach more members — we’ll get to 2,000 soon — would be to use our power as a collective to get our members less expensive insurance, [help facilitate] credit, [help them with a] 401(k).

TC: There are a lot of other things you can get into presumably, too, from project management to graphic design . . .

HR: Right now, we’re want to make sure our core service is nailed.

Think about the transparency and peace of mind that Uber brought to ride-sharing, or that Uber Eats brings to food delivery. You know when something is cooking, when it’s on its way, when it’s arriving. We’ve gotten used to that level of transparency and accountability with so many things, but when it comes to accounting, it’s not there and that’s crazy. We want to change that.

TC: Going after “businesses of one” means you’re addressing a highly fragmented market. What kinds of partnerships are you striking to reach potential customers?

HR: We’re having those conversations now, but you can imagine neo banks make sense, along with vertical marketplaces for nurses and doctors and realtors and writers. There are a lot of possibilities.

Pictured, left to right, Collective’s cofounders: CTO Bugra Akcay, CEO Hooman Radfar, and CPO Ugur Kaner.

#collective, #dylan-field, #funding, #garrett-camp, #general-catalyst, #hooman-radfar, #qed-investors, #recent-funding, #saas, #seed-funding, #startups, #tc, #venture-capital