TrueLayer nabs $130M at a $1B+ valuation as open banking rises as a viable option to card networks

Open banking — a disruptive technology that seeks to bypass the dominance of card networks and other traditional financial rails by letting banks open their systems directly to developers (and new services) by way of APIs — continues to gain ground in the world of financial services. As a mark of that traction, a startup playing a central role in open banking applications is announcing a big round of funding with a milestone valuation.

TrueLayer, which provides technology for developers to enable a range of open-banking-based services has raised $130 million in a funding round that values the London-based startup at over $1 billion.

Tiger Global Management is leading the round, and notably, payments juggernaut Stripe is also participating.

Open Banking is a relatively new area in the world of fintech — the UK was an early adopter in 2018, Europe then signed on, and it looks like we are now seeing more movements that the U.S. may soon also join the party — and TrueLayer is considered a pioneer in the space.

The vast majority of transactions in the world today are still made using card rails or more antiquated banking infrastructure, but the opportunity with open banking is to build a completely new infrastructure that works more efficiently, and might come with less (or no) fees for those using it, with the perennial API promise: all by way of few lines of code.

“We had a vision that finance should be opened up, and we are actively woking to remove the frictions that exist between intermediaries,” said CEO Francesco Simoneschi, who co-founded the company with Luca Martinetti (who is now the CTO), in an interview. “We want a financial system that works for everyone, but that hasn’t been the case up to now. The opportunity emerged five years ago, when open banking came into law in the UK and then elsewhere, to go after the most impressive oligopoly: the card networks and everything that revolves around them. Now, we can easily say that open banking is becoming a viable alternative to that.”

It seems that the world of finance and commerce is slowly catching on, and so the funding is coming on the heels of some strong growth for the company.

Services that TrueLayer currently include payments, payouts, user account information and user verification; while end users range from neobanks, crypto startups, and wealth management apps through to e-commerce companies, marketplaces and gaming platforms.

And the startup says it now has “millions” of consumers making open banking transactions enabled by TrueLayer’s technology, and some 10,000 developers are building services based on open banking standards. TrueLayer so far this year has doubled its customer base, picking up some key customers like Cazoo to enable open-banking based payments for cars; and it has processed “billions” of dollars in payments, with payment volume growing 400%, and payment up 800%.

The plan is to use the funding to invest in building out that business further — specifically to extend its payments network to more regions (and more banks getting integrated into that network), as well as to bring on more customers using open banking services for more regular, recurring transactions.

“The shift to alternative payment methods is accelerating with the global growth of online commerce, and we believe TrueLayer will play a central role in making these payment methods more accessible,” said Alex Cook, partner, Tiger Global, in a statement. “We’re excited to partner with Francesco, Luca and the TrueLayer team as they help customers increase conversion and continue to grow the network.”

Notably, Stripe is not a strategic investor in TrueLayer at the moment, just a financial one. That is to say, it has yet to integrate open banking into its own payments infrastructure.

But you can imagine how it would be interested in it as part of the bigger mix of options for its customers, and potentially also to build its own standalone financial rails that well and truly compete with those provided by the card networks (which are such a close part of what Stripe does that its earliest web design was based on the physical card, and even its name is a reference to the stripe on the back of them.

There are other providers of open banking connectivity in the market today — Plaid out of the U.S. is one notable name — but Simoneschi believes that Stripe and TrueLayer on the same page as companies.

“We share a profound belief that progress comes through the eyes of developers so it’s about delivering the tools they need to use,” he he said. “We are in a very complementary space.”

#api, #bank, #banking, #ceo, #cto, #europe, #finance, #financial-services, #funding, #london, #mobile-payments, #money, #online-banking, #online-commerce, #online-payments, #open-banking, #partner, #payment, #payments-infrastructure, #payments-network, #stripe, #tiger-global-management, #truelayer, #united-kingdom, #united-states, #web-applications

Spain’s Factorial raises $80M at a $530M valuation on the back of strong traction for its ‘Workday for SMBs’

Factorial, a startup out of Barcelona that has built a platform that lets SMBs run human resources functions with the same kind of tools that typically are used by much bigger companies, is today announcing some funding to bulk up its own position: the company has raised $80 million, funding that it will be using to expand its operations geographically — specifically deeper into Latin American markets — and to continue to augment its product with more features.

CEO Jordi Romero, who co-founded the startup with Pau Ramon and Bernat Farrero — said in an interview that Factorial has seen a huge boom of growth in the last 18 months and counts more than anything 75,000 customers across 65 countries, with the average size of each customer in the range of 100 employees, although they can be significantly (single-digit) smaller or potentially up to 1,000 (the “M” of SMB, or SME as it’s often called in Europe).

“We have a generous definition of SME,” Romero said of how the company first started with a target of 10-15 employees but is now working in the size bracket that it is. “But that is the limit. This is the segment that needs the most help. We see other competitors of ours are trying to move into SME and they are screwing up their product by making it too complex. SMEs want solutions that have as much data as possible in one single place. That is unique to the SME.” Customers can include smaller franchises of much larger organizations, too: KFC, Booking.com, and Whisbi are among those that fall into this category for Factorial.

Factorial offers a one-stop shop to manage hiring, onboarding, payroll management, time off, performance management, internal communications and more. Other services such as the actual process of payroll or sourcing candidates, it partners and integrates closely with more localized third parties.

The Series B is being led by Tiger Global, and past investors CRV, Creandum, Point Nine and K Fund also participating, at a valuation we understand from sources close to the deal to be around $530 million post-money. Factorial has raised $100 million to date, including a $16 million Series A round in early 2020, just ahead of the Covid-19 pandemic really taking hold of the world.

That timing turned out to be significant: Factorial, as you might expect of an HR startup, was shaped by Covid-19 in a pretty powerful way.

The pandemic, as we have seen, massively changed how — and where — many of us work. In the world of desk jobs, offices largely disappeared overnight, with people shifting to working at home in compliance with shelter-in-place orders to curb the spread of the virus, and then in many cases staying there even after those were lifted as companies grappled both with balancing the best (and least infectious) way forward and their own employees’ demands for safety and productivity. Front-line workers, meanwhile, faced a completely new set of challenges in doing their jobs, whether it was to minimize exposure to the coronavirus, or dealing with giant volumes of demand for their services. Across both, organizations were facing economics-based contractions, furloughs, and in other cases, hiring pushes, despite being office-less to carry all that out.

All of this had an impact on HR. People who needed to manage others, and those working for organizations, suddenly needed — and were willing to pay for — new kinds of tools to carry out their roles.

But it wasn’t always like this. In the early days, Romero said the company had to quickly adjust to what the market was doing.

“We target HR leaders and they are currently very distracted with furloughs and layoffs right now, so we turned around and focused on how we could provide the best value to them,” Romero said to me during the Series A back in early 2020. Then, Factorial made its product free to use and found new interest from businesses that had never used cloud-based services before but needed to get something quickly up and running to use while working from home (and that cloud migration turned out to be a much bigger trend played out across a number of sectors). Those turning to Factorial had previously kept all their records in local files or at best a “Dropbox folder, but nothing else,” Romero said.

It also provided tools specifically to address the most pressing needs HR people had at the time, such as guidance on how to implement furloughs and layoffs, best practices for communication policies and more. “We had to get creative,” Romero said.

But it wasn’t all simple. “We did suffer at the beginning,” Romero now says. “People were doing furloughs and [frankly] less attention was being paid to software purchasing. People were just surviving. Then gradually, people realized they needed to improve their systems in the cloud, to manage remote people better, and so on.” So after a couple of very slow months, things started to take off, he said.

Factorial’s rise is part of a much, longer-term bigger trend in which the enterprise technology world has at long last started to turn its attention to how to take the tools that originally were built for larger organizations, and right size them for smaller customers.

The metrics are completely different: large enterprises are harder to win as customers, but represent a giant payoff when they do sign up; smaller enterprises represent genuine scale since there are so many of them globally — 400 million, accounting for 95% of all firms worldwide. But so are the product demands, as Romero pointed out previously: SMBs also want powerful tools, but they need to work in a more efficient, and out-of-the-box way.

Factorial is not the only HR startup that has been honing in on this, of course. Among the wider field are PeopleHR, Workday, Infor, ADP, Zenefits, Gusto, IBM, Oracle, SAP and Rippling; and a very close competitor out of Europe, Germany’s Personio, raised $125 million on a $1.7 billion valuation earlier this year, speaking not just to the opportunity but the success it is seeing in it.

But the major fragmentation in the market, the fact that there are so many potential customers, and Factorial’s own rapid traction are three reasons why investors approached the startup, which was not proactively seeking funding when it decided to go ahead with this Series B.

“The HR software market opportunity is very large in Europe, and Factorial is incredibly well positioned to capitalize on it,” said John Curtius, Partner at Tiger Global, in a statement. “Our diligence found a product that delighted customers and a world-class team well-positioned to achieve Factorial’s potential.”

“It is now clear that labor markets around the world have shifted over the past 18 months,” added Reid Christian, general partner at CRV, which led its previous round, which had been CRV’s first investment in Spain. “This has strained employers who need to manage their HR processes and properly serve their employees. Factorial was always architected to support employers across geographies with their HR and payroll needs, and this has only accelerated the demand for their platform. We are excited to continue to support the company through this funding round and the next phase of growth for the business.”

Notably, Romero told me that the fundraising process really evolved between the two rounds, with the first needing him flying around the world to meet people, and the second happening over video links, while he was recovering himself from Covid-19. Given that it was not too long ago that the most ambitious startups in Europe were encouraged to relocate to the U.S. if they wanted to succeed, it seems that it’s not just the world of HR that is rapidly shifting in line with new global conditions.

#barcelona, #booking-com, #brazil, #ceo, #crv, #enterprise, #europe, #factorial, #general-partner, #germany, #hiring, #human-resource-management, #human-resources, #ibm, #k, #k-fund, #labor, #mathematics, #onboarding, #oracle, #payroll, #people-management, #performance-management, #personnel, #sap, #software, #spain, #tiger-global-management, #united-states, #zenefits

Construction tech startup Agora raises $33M in Tiger Global-led round amid 760% YoY ARR growth

Agora, a startup that has built a materials management platform for contractors, has raised $33 million in a Series B round of funding led by Tiger Global Management.

8VC, Tishman Speyer, Yahoo co-founder Jerry Yang, Michael Ovitz, DST, LeFrak and Kevin Hartz also participated in the financing, which brings the startup’s total raised since its 2018 inception to about $45 million.

Construction tech is one of those sectors that has not historically been considered “sexy” in a startup world that often favors glitzier technology. But construction fuels the commercial and real estate industries, which in turn impacts all of us in one way or another.

Meanwhile, the $10 trillion construction industry has long been plagued with productivity challenges. In fact, according to McKinsey, labor productivity growth in the industry has been stagnant since 1947.

Image Credits: Agora

Maria Rioumine and Ryan Gibson founded Agora with the mission of making it easier for commercial trade contractors to order and track materials, automate manual data entry and give everyone involved in the procurement process a single platform by which they can communicate with each other.

The end goal is to help projects move along faster, and contractors to avoid unnecessary delays by reducing building costs. The bigger picture impact, Agora hopes, is that its SaaS platform can help make the “built environment faster and more efficient to build,” and thus help make cities “more affordable and accessible to all.” 

San Francisco-based Agora is tackling the problem in a very specific, niche way that is proving to be popular both with contractors and investors alike. Rather than attempting to be a blanket solution for all trades, Agora is focusing on specific trade verticals, one by one. For example, it started out with electrical and is now moving into mechanical.

“Last year, there was more than $101 billion worth of electrical work done. Our customers work on all types of products,” Rioumine told TechCrunch. “For example, we have customers that do power stations, some that build hospitals and others that build school classrooms and university campuses, and still others that build churches and casinos. The work that these contractors do is so essential.”

Agora’s annual recurring revenue has grown 760% year over year while its customer base is up 6x during the same time frame, according to the company. It has also tripled its headcount to 45 people and today is processing $140 million in annualized materials volume for its customers.

The startup wasn’t actively raising for the Series B — instead, investors were proactively offering term sheets, Rioumine said.

“A few investors that knew us well approached us about preempting the round,” she told TechCrunch. “Twelve days after the first conversation, we had multiple term sheets.”

Tiger Global Partner John Curtius said he was drawn to Agora’s “unique” trade-specific approach.

In his view, the startup is “defining the future of procurement in construction.”

“Agora is solving a huge and critical problem,” Curtius wrote via email. “Billions of dollars a year are wasted because of inefficient procurement processes and breakages in the supply chain.”

The platform specifically does things like give contractors the ability to: customize templates, create pre-approved materials lists and easily reorder frequently needed items, order from a catalogue that offers more than 400,000 SKUs and eliminate manual data entry, which reduces errors and automates basic processes.

By bringing both field and office teams onto one digital platform, Agora claims it saves office teams 75% of the time they spend processing purchase orders, and field teams 38% of the time their foremen spend on materials management. In total, the company said its technology can provide up to $300,000 of potential annual savings for its average customer.

The company plans to use its new capital to hire across a number of teams, as well as continue to expand beyond 30 states and into other trade verticals.

“There has been this really heavy underinvestment in tech in construction for a long time,” Rioumine said. On average, the technology spend as a proportion of revenue in construction is about 1.5%, “which is actually the lowest of the industries out there where the median is 3.3%,” she added.

“So when we think about just how large this industry is and how little productivity improvements there have been recently, I think now we have this amazing opportunity to really invest in technology and bring it on to the job sites and into trade contractors’ hands.”

#agora, #construction, #construction-tech, #funding, #fundings-exits, #jerry-yang, #kevin-hartz, #michael-ovitz, #procurement, #real-estate, #recent-funding, #saas, #san-francisco, #startups, #supply-chain, #tc, #tiger-global, #tiger-global-management, #venture-capital

Chilean fintech Xepelin secures $230M in debt and equity from Kaszek, high-profile angels

Chilean startup Xepelin, which has created a financial services platform for SMEs in Latin America, has secured $30 million in equity and $200 million in credit facilities.

LatAm venture fund Kaszek Ventures led the equity portion of the financing, which also included participation from partners of DST Global and a slew of other firms and founders/angel investors. LatAm- and U.S.-based asset managers and hedge funds — including Chilean pension funds — provided the credit facilities. In total over its lifetime, Xepelin has raised over $36 million in equity and $250 million in asset-backed facilities.

Also participating in the round were Picus Capital; Kayak Ventures; Cathay Innovation; MSA Capital; Amarena; FJ Labs; Gilgamesh and Kavak founder and CEO Carlos Garcia; Jackie Reses, executive chairman of Square Financial Services; Justo founder and CEO Ricardo Weder; Tiger Global Management Partner John Curtius; GGV’s Hans Tung; and Gerry Giacoman, founder and CEO of Clara, among others.

Nicolás de Camino and Sebastian Kreis founded Xepelin in mid-2019 with the mission of changing the fact that “only 5% of companies in all LatAm countries have access to recurring financial services.”

“We want all SMEs in LatAm to have access to financial services and capital in a fair and efficient way,” the pair said.

Xepelin is built on a SaaS model designed to give SMEs a way to organize their financial information in real time. Embedded in its software is a way for companies to apply for short-term working capital loans “with just three clicks, and receive the capital in a matter of hours,” the company claimed.

It has developed an AI-driven underwriting engine, which the execs said gives it the ability to make real-time loan approval decisions.

“Any company in LatAm can onboard in just a few minutes and immediately access a free software that helps them organize their information in real time, including cash flow, revenue, sales, tax, bureau info — sort of a free CFO SaaS,” de Camino said. “The circle is virtuous: SMEs use Xepelin to improve their financial habits, obtain more efficient financing, pay their obligations, and collaborate effectively with clients and suppliers, generating relevant impacts in their industries.”

The fintech currently has over 4,000 clients in Chile and Mexico, which currently has a growth rate “four times faster” than when Xepelin started in Chile. Over the past 22 months, it has loaned more than $400 million to SMBs in the two countries. It currently has a portfolio of active loans for $120 million and an asset-backed facility for more than $250 million.

Overall, the company has been seeing a growth rate of 30% per month, the founders said. It has 110 employees, up from 20 a year ago.

Xepelin has more than 60 partnerships (a number that it said is growing each week) with midmarket corporate companies, allowing for their suppliers to onboard to its platform for free and gain access to accounts payable, revenue-based financing. The company also sells its portfolio of non-recourse loans to financial partners, which it says mitigates credit risk exposure and enhances its platform and data play.

“When we talk about creating the largest digital bank for SMEs in LatAm, we are not saying that our goal is to create a bank; perhaps we will never ask for the license to have one, and to be honest, everything we do, we do it differently from the banks, something like a non-bank, a concept used today to exemplify focus,” the founders said.

Both de Camino and Kreis said they share a passion for making financial services more accessible to SMEs all across Latin America and have backgrounds rooted deep in different areas of finance.

“Our goal is to scale a platform that can solve the true pains of all SMEs in LatAm, all in one place that also connects them with their entire ecosystem, and above all, democratized in such a way that everyone can access it,” Kreis said, “regardless of whether you are a company that sells billions of dollars or just a thousand dollars, getting the same service and conditions.”

For now, the company is nearly exclusively focused on the B2B space, but in the future, it believes several of its services “will be very useful for all SMEs and companies in LatAm.” 

“Xepelin has developed technology and data science engines to deliver financing to SMBs in Latin America in a seamless way,” Nicolas Szekasy, co-founder and managing partner at Kaszek Ventures, said in a statement.The team has deep experience in the sector and has proven a perfect fit of their user-friendly product with the needs of the market.”

Chile was home to another large funding earlier this week. NotCo, a food technology company making plant-based milk and meat replacements, closed on a $235 million Series D round that gives it a $1.5 billion valuation.

#chile, #digital-bank, #dst-global, #finance, #financial-services, #fintech, #free-software, #funding, #fundings-exits, #hans-tung, #justo, #kaszek-ventures, #latin-america, #mexico, #msa-capital, #picus-capital, #recent-funding, #ricardo-weder, #saas, #square-financial-services, #startups, #tiger-global-management, #venture-capital

Powered by local stores, JOKR joins the 15 min grocery race with a $170M Series A

“We are true believers in the fact that the world needs a new Amazon, a better one, a more sustainable one, one that appreciates local areas and products.” It’s quite one thing to claim you are out to replace Amazon (just as its founder goes into space), but Ralf Wenzel, Founder and CEO of JOKR, certainly believes his company might have a shot. And he’s raising plenty of money to aim at that goal.

Today the fast-growing grocery and retail delivery platform has closed a whopping $170 million Series A funding round. The round comes three months after the company started operations in the U.S., Latin America, and Europe. JOKR’s team consists of people who created both foodpanda and Delivery Hero, so from the outside at least, they have the chops to build a big business.

The round was led by Led by GGV Capital, Balderton Capital, and Tiger Global Management. It was joined by Activant Capital, Greycroft, Fabrice Grinda’s FJ Labs, as well as Latin America’s tech-specialized VC firms Kaszek and Monashees, as did HV Capital, the first institutional investor.

Based out of New York, where it launched last month JOKR plans to roll out across cities in the U.S., Latin America and Europe. Right now it’s live in nine cities, across Latin American countries, Brazil, Mexico, Colombia, Peru, as well as Poland and Austria in Europe.

Wenzel said: “The investment we announced today will empower us to continue our expansion at an unprecedented rate as we continue to build JOKR into the premier platform for a new generation of online shopping, with instant delivery, a focus on local product offerings and more sustainable delivery and supply chains. We are proud to be able to partner with such a distinguished group of international tech investors to help us seize the enormous opportunity in front of us.”

JOKR’s pitch is that it enables small local businesses to sell their goods, sourced from other local businesses, via the platform, thus expanding their reach without the need for complex logistics and delivery networks on their own. But that local aspect also builds sustainability into the model.

Hans Tung, Managing Partner at GGV Capital, and newly appointed member of JOKR’s board said: “Ralf has put together an all-star team for food delivery that will transform the retail supply chain. The combination of food delivery experience and the sophisticated data capabilities that optimizes inventory allocation and dispatch, set JOKR apart. We look forward to working with the team on their mission to make retail more instant, more democratic, and more sustainable.”

JOKR is joining other fast-delivery grocery providers like Gorillas and Getir in providing a 15 minute delivery time for supermarket and convenience products, pharmaceuticals, but also ‘exclusive’ local products that are not available in regular supermarkets. Although, so far, it only has an app on Google Play.

Speaking at an interview with me Wenzel said: “We are close to the equivalent of Instacart, strongly grocery focused. Our offering is significantly broader than the ones of Gorillas because we’re not only focusing on convenience and all kinds of different grocery categories, we’re getting closer to a supermarket offering, so the biggest competing element would be the traditional supermarkets, the offline supermarkets, as well as online grocery propositions. We are vertically integrating and hence procuring directly, cutting out middlemen and building our own distribution warehouses.”

#activant-capital, #amazon, #austria, #balderton-capital, #brazil, #ceo, #colombia, #delivery-hero, #distribution, #europe, #food-delivery, #foodpanda, #getir, #ggv-capital, #gorillas, #grocery-store, #hans-tung, #hv-capital, #instacart, #jokr, #latin-america, #managing-partner, #mexico, #new-york, #online-food-ordering, #online-shopping, #peru, #pharmaceuticals, #poland, #premier, #ralf-wenzel, #retailers, #tc, #tiger-global-management, #united-states

Digital lending platform Blend valued at over $4B in its public debut

Mortgages may not be considered sexy, but they are a big business.

And if you’ve refinanced or purchased a home digitally lately, you may or may not have noticed the company powering the software behind it — but there’s a good chance that company is Blend.

Founded in 2012, the startup has steadily grown to be a leader in the mortgage tech industry. Blend’s white label technology powers mortgage applications on the site of banks including Wells Fargo and U.S. Bank, for example, with the goal of making the process faster, simpler and more transparent. 

The San Francisco-based startup’s SaaS (software-as-a-service) platform currently processes over $5 billion in mortgages and consumer loans per day, up from nearly $3 billion last July.

And today, Blend made its debut as a publicly-traded company on the New York Stock Exchange, trading under the symbol “BLND.” As of early afternoon, Eastern Time, the stock was trading up over 13% at $20.36.

On Thursday night, the company had said it would offer 20 million shares at a price of $18 per share, indicating the company was targeting a valuation of $3.6 billion.

That compares to a $3.3 billion valuation at the time of its last raise in January — a $300 million Series G funding round that included participation from Coatue and Tiger Global Management. Also, let’s not forget that Blend only became a unicorn last August when it raised a $75 million Series F. Over its lifetime, Blend had raised $665 million before Friday’s public market debut.

In filing its S-1 on June 21, Blend revealed that its revenue had climbed to $96 million in 2020 from $50.7 million in 2019. Meanwhile, its net loss narrowed from $81.5 million in 2019 to $74.6 million in 2020.

In 2020, the San Francisco-based startup significantly expanded its digital consumer lending platform. With that expansion, Blend began offering its lender customers new configuration capabilities so that they could launch any consumer banking product “in days rather than months.”

Looking ahead, the company had said it expects its revenue growth rate “to decline in future periods.” It also doesn’t envision achieving profitability anytime soon as it continues to focus on growth. Blend also revealed that in 2020, its top five customers accounted for 34% of its revenue.

Today, TechCrunch spoke with co-founder and CEO Nima Ghamsari about the company’s decision to go with a traditional IPO versus the ubiquitous SPAC or even a direct listing.

For one, Blend said he wanted to show its customers that it is an “around for a long time company” by making sure there’s enough on its balance sheet to continue to grow.

“We had to talk and convince some of the biggest investors in the world to invest in us, and that speaks to how long we’ll be around to serve these customers,” he said. “So it was a combination of our capital need and wanting to cement ourselves as a really credible software provider to one of the most regulated industries.”

Ghamsari emphasized that Blend is a software company that powers the mortgage process, and is not the one offering the mortgages. As such, it works with the flock of fintechs that are working to provide mortgages.

“A lot of them are using Blend under the hood, as the infrastructure layer,” he said.

Overall, Ghamsari believes this is just the beginning for Blend.

“One of the things about financial services is that it’s still mostly powered by paper. And so a lot of Blend’s growth is just going deeper into this process that we got started in years ago,” he said. As mentioned above, the company started out with its mortgage product but just keeps adding to it. Today, it also powers other loans such as auto, personal and home equity.

“A lot of our growth is actually powered by our other lines of business,” Ghamsari told TechCrunch. “There’s a lot to build because the larger digitization trends are just getting started in financial services. It’s relatively large industry that has lots of change.”

In May, digital mortgage lender Better.com announced it would combine with a SPAC, taking itself public in the second half of 2021.

 

#better-com, #blend, #coatue, #companies, #credible, #exit, #finance, #financial-services, #fintech, #fundings-exits, #ipo, #leader, #loans, #money, #new-york-stock-exchange, #saas, #san-francisco, #software, #special-purpose-acquisition-company, #startups, #tiger-global-management

Tiger Global leads $34M investment into Unit21, a no-code fraud prevention platform

Unit21, a startup that helps businesses monitor fraudulent activities with its no-code software, announced today it has raised $34 million in a Series B round of funding led by Tiger Global Management.

The round values San Francisco-based Unit21 at $300 million and comes nine months after the startup raised a $13 million Series A that included investments from the founders of Plaid, Chime and Shape Security as well as former Venmo COO Michael Vaughan.

ICONIQ Capital and existing backers Gradient Ventures (Google’s AI venture fund), A.Capital and South Park Commons participated in the latest funding event. 

Former Affirm product manager Trisha Kothari and Clarence Chio founded Unit21 in 2018 with the goal of giving risk, compliance and fraud teams a way to fight financial crime via a “secure, integrated, no-code platform.” 

Image Credits: Unit21

The pair say they started Unit21 based on the belief that the existing model of “black box” machine learning used for fraud prevention and detection was flawed. Their idea was to develop an alternative system to provide risk and compliance teams with more control over their operations. Unit21 describes its core technology as a “flag-and-review” toolset designed to give non-technical operators and anti-money laundering (AML) teams the ability to “easily” write complex statistical models and deploy customized workflows without having to involve their engineering teams. Unit21 says it provides this toolset to companies with the aim of helping them mitigate fraud and money laundering risks through Know Your Customer (KYC) verification, transaction monitoring detection and suspicious activity report (SAR) case management. 

Unit21 has built up an impressive customer base of over 50 enterprise clients, including Chime, Intuit, Coinbase, Gusto, Flywire, Wyre and Twitter, among others. The company says it has monitored more than $100 billion in activity via its API and dashboard since its 2018 inception. It also says that it has saved more than 20 million users over $100 million in fraud loss/suspicious activity. The company declined to reveal hard revenue figures, saying only revenue grew by “12x” in 2020 compared to 2019.

“Data is the most important weapon in the fight against fraud and money laundering,” Kothair said. “This funding will support our mission to democratize data and make it more accessible to  operations teams.”

The company will also use its new capital in part toward expanding its engineering, research & development and go-to-market  teams. As of late June, Unit21 had 53 employees, up from 12 at the same time last year. The startup also plans evolve its platform for generalized flag + review use cases beyond financial crimes and fraud. It’s also eyeing expansion in the Asia-Pacific (APAC) and Europe/Middle East (EMEA) markets.

Tiger Global Partner John Curtius said Unit21 is transforming organizations’ ability to “analyze data to its advantage for risk management and compliance.”

The space is a hot one with a number of other fraud-prevention companies raising capital in recent months including Sift, Seon and Feedzai. According to Compliance Week (citing analysis by Fenergo), financial institutions were hit with an estimated $10.4 billion in global fines and penalties related to anti-money laundering (AML), know your customer (KYC), data privacy, and MiFID (Markets in Financial Instruments Directive) regulations in 2020, bringing the total to $46.4 billion for those types of breaches since 2008. The report, spanning up to its release date of Dec. 9, said there has been 198 fines against financial institutions for AML, KYC, data privacy, and MiFID deficiencies, representing a 141% increase since 2019.

#a-capital, #api, #asia-pacific, #chime, #coinbase, #coo, #crime, #europe, #finance, #financial-regulation, #fintech, #flywire, #fraud, #funding, #fundings-exits, #gradient-ventures, #gusto, #iconiq-capital, #intuit, #know-your-customer, #machine-learning, #michael-vaughan, #middle-east, #money, #money-laundering, #no-code-software, #plaid, #product-manager, #recent-funding, #risk-management, #san-francisco, #shape-security, #startups, #tax-evasion, #tc, #terrorism, #tiger-global-management, #twitter, #venmo, #venture-capital

Tiger Global leads $42M Series B in Nigerian credit-led neobank FairMoney

Neobanks have led the charge as regards venture capital funding for consumer fintech startups. But while they have collectively dominated the fintech space, they don’t operate a monolithic model.

There are five distinct models, and the one adopted by Nubank, the $30 billion behemoth, is the credit-led model. Neobanks operating this model start by offering credit via cards or on an app and subsequently offer bank accounts as a gateway to other services.

Nigerian fintech startup FairMoney operates this model. Today, it is announcing a $42 million Series B raise to diversify its offerings and expand to “become the financial hub for its users.” 

Tiger Global Management led the round. Existing investors from the company’s previous rounds, DST Partners, Flourish Ventures, Newfund, and Speedinvest, participated. The investment comes after FairMoney raised €10 million Series A two years ago and €1.2 million seed in 2018.

Founded in 2017 by Laurin Hainy, Matthieu Gendreau, and Nicolas Berthozat, FairMoney started as an online lender that provides instant loans and bill payments to customers in Nigeria.

When CEO Hainy spoke to TechCrunch in February, the company was six months into its expansion to India. One of the highlights of that discussion was FairMoney’s impressive numbers in 2020. Last year, the company disbursed a total loan volume of $93 million to over 1.3 million users who made more than 6.5 million loan applications

The company also made some progress on the India front, processing more than 500,000 loan applications from over 100,000 unique users.

So what has changed since then? For one, Hainy says FairMoney ticked one of the goals which was acquiring a microfinance bank license. The license allows FairMoney to operate as a financial service provider in Nigeria.

“We have received our MFB banking license which now enables us to open current accounts for our users, and we’re doing that on quite a big scale,” Hainy said to TechCrunch. “We opened accounts for our repeated and new customers, which I think is quite a unique company strategy because we don’t need to burn millions of dollars of customer acquisition cost on users like other competitors. I think all of that has enabled us to become sort of the largest digital bank in Nigeria.”

Quite the claim but behind it are figures to back it up. Of the company’s current 3.5 million registered users, 1.3 million are unique bank account holders. The company says it is projecting to disburse $300 million worth of loans to them this year. How will it finance that? By raising bonds. FairMoney’s loan book is grown by its capital markets activity and has convinced some investment banks to invest a substantial amount in its unlisted bond

The credit-led neobank offers loans to individuals from ₦1,500 (~$3) to ₦500,000 (~$1,000) ranging from days to six months. Small business loans have become a prominent service most digital banks have begun to offer in Nigeria’s retail sector, and FairMoney sees an opportunity there. Hainy states that from now on, the company will start servicing loans to registered SMEs in Nigeria. In the works also is the issuance of cards. However, unlike the credit cards operated by Nubank, FairMoney is shipping debit cards, the more prevalent one in the Nigerian market.

“The ambition is that by the end of the year, the customer has the full-fledged banking experience from P2P transfers and lending to debit cards and current accounts. In addition to that, we are working on a number of additional services from savings products, stock trading, and crypto-trading products potentially depending on where regulation is heading,” Hainy added

But while most African companies, after completing a Series B raise, think about expansion, it’s a different case for FairMoney. Hainy calls this a ‘focus round’ and says FairMoney wants to consolidate its position in Nigeria and India; therefore, it is not considering any expansion to other markets.

“We feel that with India and Nigeria, we have tons of work to do and tons of problems to solve. We are doubling down on the Nigerian opportunity, which is building out more banking services and becoming one of the commercial banks in the country. And then India by building a large credit book there,” the CEO combined.

African fintech startups have attracted a lot of capital this year and they continue to do so. So far, the continent has seen three nine-figure raises, all from fintech companies Flutterwave, TymeBank and Chipper Cash. There’s also one reportedly in the works from OPay.

Nigerian fintechs are leading the crop as exciting startups keep coming from the country week in week out, gaining access to capital at an astonishing rate.

It is not news that while local investors are cutting checks at pre-seed and seed levels, and sometimes Series A, international investors control the continent’s latter stages. TymeBank cited U.K. and Philippines venture capital firms as investors. For Chipper Cash, it was SVB Capital, Ribbit, and Bezos Expeditions, while Avenir Growth Capital and Tiger Global invested in Flutterwave.

In FairMoney, Tiger Global has made a return to the continent. Per public knowledge, it is the first time the U.S. hedge fund is investing in two African startups in a year after backing Flutterwave in March. “We are excited to partner with FairMoney as they build a better financial hub for customers in Nigeria and India,” Scott Shleifer, partner at Tiger Global, said in a statement. “We were impressed by the team and the strong growth to date and look forward to supporting FairMoney as they continue to scale.”

Hainy calls the investment a great industry signaling for the continent. He believes Tiger Global decided to back FairMoney because the company has been able to scale tremendously and shown that it can operate banking and lending while running a profitable business when most of its counterparts are not.

“I think what most people have been discussing is the question of sustainability. How long can digital banks operate as financial service providers while making losses? So I think that’s another great signal for the market that we’ve actually managed to do that in a profitable manner, providing upside for our shareholders and also showing our clients that they can actually bank on us in the future,” Hainy added.

And to achieve its goal to become a financial hub for its customers’ banking needs, the CEO said the company is embarking on a hiring spree for top talent. “We are hiring worldwide, and there are 150 open positions out there right now that we’re trying to fill with strong talent to help us build the financial app for Nigerians.”

#africa, #digital-bank, #fairmoney, #finance, #funding, #india, #neobank, #nigeria, #nubank, #online-lending, #tc, #tiger-global-management

Tiger Global leads $31.5M investment in interactive edtech Quizizz

Quizizz, an Indian startup that is making learning more interactive so that students find it compelling to spend more hours studying, said on Wednesday it has raised $31.5 million in a new financing round.

Tiger Global led the Series B financing round in the five-and-a-half-year-old startup. Yahoo co-founder Jerry Yang and existing investors Eight Roads Ventures, GSV Ventures, Nexus Venture Partners also participated in the new round.

Quizizz, which concluded its previous financing round in March this year, has raised $47 million to-date. The new round values it at about $300 million, I heard earlier this month.

“When we were kids, it was so difficult to focus on studies. Our thesis has been that with kids now living in a world with so much distraction, there’s a need to make learning more interesting,” said Ankit Gupta, co-founder and chief executive of Quizizz, in an interview with TechCrunch.

Along with Deepak Cheenath, Quizizz’s other co-founder, Gupta started the startup’s journey in a non-profit school in Bangalore, where they built several prototypes. The same year — 2015 — the duo engaged closely with teachers and students in the U.S., and pivoted to Quizizz, said Gupta.

On Quizizz, teachers and the community develop gamified lessons for students. (Teachers don’t have to build these lessons. For the concepts that they want to explain to students, if lessons exist, many just use those instead. The platform has over 20 million quizzes today.)

These lessons have enabled students to find learning more engaging, said Gupta. The platform also enables teachers to identify in real-time students who are struggling with grasping any concept and then to address those gaps, he said.

The platform covers a range of subjects including computer science, english, mathematics, science, social studies, world languages, and creative arts.

Over the years, Quizizz has grown organically across the globe with many classrooms today using the platform, said Gupta. The platform is used by teachers in over 120 nations today with students answering more than 300 million questions on Quizizz each week. In the U.S., which is Quizizz’s largest market now, over 80% of K-12 schools use the platform, he said.

“During the pandemic, Quizziz made the transition to teaching online seamless. Now that we’re back in the building, I’ve used it almost exclusively. Making, finding, and altering lessons using Quizizz has become almost a hobby for me,” said Rory Roberts, a math teacher at Brigantine Community School, in a prepared statement.

“This week, we conducted user-testing with teachers in California, saw a video of students cheering on their classmates in an auditorium in Kenya, and got a thank you note from a group of teachers wearing Quizizz branded t-shirts in Indonesia. We’re incredibly proud of the role our growing team, and teacher community, have played in this movement,” said Quizizz’s Cheenath.

The startup plans to deploy the fresh capital to expand its team across both the U.S. and India to keep up with its growth. It is also looking to form partnerships to accelerate its international expansion.

#apps, #asia, #education, #eight-roads-ventures, #funding, #gsv-ventures, #india, #jerry-yang, #nexus-venture-partners, #tiger-global, #tiger-global-management

Crypto finance startup Amber Group raises $100M at $1B valuation

More mainstream venture capital firms are jumping on the crypto bandwagon as investors increasingly consider bitcoin an investable asset, despite the recent massive price drops of a few major cryptocurrencies. Amber Group, a Hong Kong-based cryptocurrency trading startup, said on Monday it has raised $100 million in a Series B funding round at a pre-money valuation of $1 billion.

The latest valuation is ten times that of the company’s Series A closed in 2019, a $28 million round that counted Coinbase Ventures as one of its investors. Also notably, Amber’s Series B financing was bankrolled by a list of high-profile financial and VC firms, including China Renaissance, which led the round, and Tiger Brokers, Tiger Global Management, Arena Holdings, Tru Arrow Partners, Sky9 Capital, DCM Ventures, and Gobi Partners.

Its past investors Pantera Capital, Coinbase Ventures, and Blockchain.com also participated in the round.

In May, Babel Finance, another crypto asset manager based out of Hong Kong, secured $40 million in funding from a number of big-name institutional investors, including Amber’s investor Tiger Global.

Founded by a group of former investment bankers in their twenties, Amber initially set out to apply machine learning algorithms to quantitative trading but pivoted in 2017 to crypto when the team saw spikes in virtual currency’s trading volumes. The startup now serves both institutional and individual investors, offering them algorithmic trading, electronic market-making, high-frequency trading, OTC trading, borrowing and lending, derivatives, among other products.

The firm launched its mobile app in the third quarter of 2020, widening its scope from institutional clients to retail consumers. It said the trading app has so far accumulated over 100,000 registered users.

Amber has been profitable since its inception, according to its co-founder and CEO Michael Wu, with annualized revenues of $500 million based on figures from January to April 2021.

The startup has seen “record months over the past quarter across both client flow and on-exchange market-making volumes,” said Wu, and it now accounts for “2-3% of total trading volumes in major spot and derivative markets.” Its cumulative trading volumes have doubled from $250 billion since the beginning of the year to over $500 billion. Altogether, it manages around $1.5 billion in trading capital that varies based on BTC and ETH prices.

Amber has over 330 employees worldwide across Hong Kong, Taipei, Seoul, and Vancouver. The proceeds from its Series B will go towards global expansion.

#arena-holdings, #asia, #blockchain-com, #coinbase, #coinbase-ventures, #cryptocurrency, #dcm-ventures, #funding, #gobi-partners, #pantera-capital, #series-b, #tc, #tiger-global-management

Tiger Global leads $30M investment into Briq, a fintech for the construction industry

Briq, which has developed a fintech platform used by the construction industry,  has raised $30 million dollars in a Series B funding round led by Tiger Global Management.

The financing is among the largest Series B fundraises by a construction software startup, according to the company, and brings Briq’s total raised to $43 million since its January 2018 inception. Existing backers Eniac Ventures and Blackhorn Ventures also participated in the round.

Briq CEO and co-founder Bassem Hamdy is a former executive at construction tech giant Procore (which recently went public and has a market cap of $10.4 billion) Canadian software giant CMIC. Wall Street veteran Ron Goldshmidt is co-founder and COO.

Briq describes its offering as a financial planning and workflow automation platform that “drastically reduces” the time to run critical financial processes, while increasing the accuracy of forecasts and financial plans.

Briq has developed a toolbox of proprietary technology that it says allows it to extract and manipulate financial data without the use of APIs. It also has developed construction-specific data models that allows it to build out projections and create models of how much a project might cost, and how much could conceivably be made. Currently, Briq manages or forecasts about $30 billion in construction volume.

Specifically, Briq has two main offerings: Briq’s Corporate Performance Management (CPM) platform, which models financial outcomes at the project and corporate level and BriqCash, a construction-specific banking platform for managing invoices and payments. 

Put simply, Briq aims to allow contractors “to go from plan to pay” in one platform with the goal of solving the age-old problem of construction projects (very often) going over budget. Its longer-term, ambitious mission is to “manage 80% of the money workflows in construction within 10 years.”

The company’s strategy, so far, seems to be working.

From January 2020 to today, ARR has climbed by 200%, according to Hamdy. Briq currently has about 100 employees, compared to 35 a year ago.

Briq has 150 customers, and serves general and specialty contractors from $10 million to $1 billion in revenue.  They include Cafco Construction Management, WestCor Companies and Choate Construction and Harper Construction. The company is currently focused on contractors in North America but does have long-term plans to address larger international markets, Hamdy told TechCrunch.  

Some context

Hamdy came up with the idea for Santa Barbara, California-based Briq after realizing the vast amount of inefficiencies on the financial side of the construction industry. His goal was to do for construction financials what Procore did to document management, and PlanGrid to construction drawing. He started Briq with his own cash, amassed through secondary sales as Procore climbed the ranks of startups to become a construction industry unicorn.

Briq CEO and co-founder Bassem Hamdy

“I wanted to figure out how to bring the best of fintech into a construction industry that really guesses every month what the financial outcomes are for projects,” Hamdy told me at the time of the company’s last raise – a $10 million Series A led by Blackhorn Ventures announced in May of 2020. “Getting a handle on financial outcomes is really hard. The vast majority of the time, the forecasted cost to completion is plain wrong. By a lot.”

In fact, according to McKinsey, an astounding 80 percent of projects run over budget, resulting in significant waste and profit loss.

So at the end of a project, contractors often find themselves having doled out more money and resources than originally planned. This can lead to negative cash flow and profit loss. Briq’s platform aims to help contractors identify outliers, and which projects are more at risk.

Throughout the COVID-19 pandemic, Briq has proven to be “extremely valuable” to contractors, Hamdy said.

“In an industry where margins are so thin, we have given contractors the ability to truly understand where they stand on cash, profit and labor,” he added.

#articles, #blackhorn-ventures, #briq, #california, #construction, #construction-software, #construction-tech, #economy, #eniac-ventures, #executive, #finance, #financial-technology, #fintech, #funding, #fundings-exits, #mckinsey, #north-america, #plangrid, #procore, #recent-funding, #saas, #startups, #tiger-global-management, #venture-capital

Investors race to win early-stage startup deals in India

India may be grappling with the second wave of the coronavirus, rising unemployment, and a dwindling economy, but the South Asian nation’s burgeoning startup ecosystem has never had it better.

High-profile investors in India have long aggressively chased growth-stage, and late-stage deals, pouring record amounts of capital into the country. But in a sign of the growing investor bullishness regarding Indian startups, even early-stage companies that have largely been bereft of much similar attention in recent years are now sharing the limelight.

More than 70 early-stage Indian startups are currently in advanced stages of talks to raise money, according to sources familiar with the matter. The size of the investments vary from a few million dollars to up to $100 million. TechCrunch is reporting some of the more notable deals today.

The usual caveat that many of deals haven’t yet closed, and that their terms could change or the talks may not materialize into an investment applies in our reporting. The deals described below have not been previously reported.

Sequoia Capital India, the most prolific investing firm in the country, is in talks to place capital in over two-dozen Indian startups including Register Book, a firm that operates an eponymous bookkeeping app; Vah Vah, which runs an app to educate people about makeup from artists; SaaS platform BambooBox, and email marketing software provider MailModo.

The firm is also in talks to back, alongside venture fund Nexus, OneCode, a startup that runs an app to connect digital-first brands with sellers. Sequoia Capital India, which launched a dedicated fund for early stage startups called Surge two years ago, is also in talks to invest in Probo, an app that rewards users for sharing their opinion; and Rattle.

Vaibhav Domkundwar, who runs Better Capital, said the early-stage startup scene in India has never been this hot.

“Pre-seed and seed stage momentum is at its peak, but we are also seeing pre-emptive rounds at Series As and Bs now,” he told TechCrunch.

Domkundwar, who has backed over 140 startups including Khatabook and neobank Open, attributed some excitement to the new generation of founders in India, who he said are building product-first and distribution-first companies. “We are seeing the fastest pace of investment in these teams,” he said.

A different investor, who requested anonymity, said second time founders are able to raise on a deck or a Notion doc from elite angels, unicorn founders and microVCs. The pace at which these founders are able to close the deal, the investor said, was “stunning.”

The frantic pace of investments in early-stage deals come as many of the more mature bets have become unicorns in India and many established startups are finally exploring taking the public markets.

India has birthed 14 unicorns this year, up from 11 last year and just 6 in 2019. High-profile investors such as Tiger Global and Falcon Edge Capital have increased their focus on India this year and winning founders with their large size of checks, higher valuation, access to resources, and quick turnaround time.

Many established firms are now chasing early-stage deals.

GSV is in talks to invest in Filo, a startup that operates an eponymous tutor app; and payments stack startup Inai has closed a new round from Better Capital and others and will be part of Y Combinator’s next batch. (Speaking of which, Y Combinator’s previous batch featured its largest cohort of Indian startups in history.)

One-year-old startup BrightCHAMPS, which has built a coding and math platform for kids, is currently in talks with GSV and Tiger Global to raise about $70 million.

Indiagold, a startup that allows people in the South Asian nation to access credit against their gold reserve, is in talks to close a new round with two high-profile foreign investors that have traditionally backed growth and late stage deals.

Germany’s Razor Group is in late stage talks to invest in Upscale, a startup that is attempting to replicate the Thrasio model in India.

Fintech investor RTP is in talks to invest in Fleek, a startup that is building “a payments system for subscription economy.” Falcon Edge’s AWI is in talks to invest in fitness subscription platform Ultrahuman, while SaaS platform AccelData has been approached by Bessemmer and WestBridge.

For high-profile investors with billions in dry powder, there are many rewards for spotting a promising startup in its initial years. One can buy a much larger stake in a startup for lower prices before the valuation of the startup — assuming things work out well — soars. Investing early also reduces the amount an investor may lose should things with the portfolio firm goes south.

But not everyone is happy with the new dynamics.

An investor with a micro fund told TechCrunch — on the condition of anonymity to speak candidly — that involvement of bigger investors in early stage deals has made it tougher for smaller firms to source new deals as the bigger investors are now aggressively trying to close entire rounds by themselves.

The investor said there is an additional competition in the market now: groups of high-profile founders, who tend to collectively back startups.

The investor cited earlier in the story termed these investments as “optionality cheques.” These optionality checks — that usually back second time founders or first time founders who previously worked at a unicorn or soonicorn — started with the Series A crowd such as Sequoia Capital India, Matrix, Lightspeed India Partners, he said. Now, the investor said, Tiger and Falcon / AWI are doing it, too.

There are two implications of these optionality checks, the investor said. “They make life more difficult for microVCs / seed VCs as they cannot compete with the Tigers or Falcons or Series A funds who can cut “smaller” checks with impunity, and perhaps even dilute less.”

But the investor cautioned the founders who are raising such optionality checks. “If the same fund doesn’t back them in the next round, then the negative signal can imperil their chances of raising from other VCs. Second, the excess money that they get can sometimes encourage faster expansion and higher spends.

Lightspeed India Partners, best known for its investments in unicorns Oyo Rooms and e-commerce platform Udaan, is in talks to back Vegrow, a startup that partners with farmers; 100ms.live, which operates an eponymous tool to help developers add video conferencing features to their apps, as well as edtech startup Kalaam Labs.

Dyte, which is building a “Stripe for live video calls,” is in talks with Nexus and Sequoia Capital India. Elevation Capital, which is also in talks to invest in VeGrow, is inching closer to investing in FamPay, which offers credit cards to teens at about $150 million valuation. Bangalore-based Chiratae Ventures is in the final stages of talks to invest in AeroLeap and analytics startup Locale.ai.

Fanplay, a platform for social media influencers to monetise via mobile games, has already raised from several American microVCs, but the round hasn’t closed yet. Mumbai-headquartered due diligence and monitoring platform Advarisk has been approached by “several investors” but has yet to close the round.

Trading signals provider Tradex is in talks to raise from Leo Capital. Audio social media app Frnd, radio and podcast aggregator app Kuku FM, and crop management platform Bharatagri are also in advanced stages of talks with investors to raise capital.

Plug and play payments provider Card91 has been approached by several investors, but hasn’t closed the round yet. Tournafest has closed a round from a clutch of angel investors, and so have Easy Eat and Stockgro. Kosh has raised from YC, and VentureSouq among others.

Tech veteran Nandan Nilekani’s firm Fundamentum is in talks to back Bijak, which operates a business-to-business marketplace to trade agricultural commodities, and supply chain startup Reshamandi.

A survey by InnoVen Capital, results of which were published on Thursday, said that over 80% of the investors it had surveyed said their dealflow for early-stage startups had increased this year, compared to last year.

Over 75% of the respondents in the same survey said the valuations in recent deals were on the “higher side” because of the “intense competition for high quality deals and entry of large established VCs in this space.”

“Early-stage investment activity has proven to be resilient despite the pandemic, with bigger transaction sizes and higher valuations, a clear sign of a maturing early-stage ecosystem,” said Tarana Lalwani, Senior Director at InnoVen Capital India.

#asia, #falcon-edge, #funding, #india, #lightspeed, #sequoia-capital-india, #tiger-global, #tiger-global-management

Indian health insurance startup Plum raises $15.6 million in Tiger Global-led investment

The vast majority of people in India, the world’s second most populous nation, don’t have health insurance coverage. A significant portion of the population that does have coverage get it from their employers.

Plum, a young startup that is making it easier and more affordable for more firms in the nation to provide insurance coverage to their employees, said on Monday it has raised $15.6 million in its Series A funding to accelerate its growth. Tiger Global led the funding round.

Existing investors Sequoia Capital India’s Surge, Tanglin Venture Partners, Incubate Fund, Gemba Capital, also participated in the new round, which brings the one-a-half-year-old startup’s to-date raise to $20.6 million. TechCrunch reported earlier this year that Plum was in talks with Tiger Global for the new financing round.

Kunal Shah (founder of Cred), Gaurav Munjal, Roman Saini and Hemesh Singh (founders of Unacademy), Lalit Keshre, Harsh Jain and Ishan Bansal (founders of Groww), Ramakant Sharma and Anuj Srivastava (founders of Livspace), and Douglas Feirstein (founder of Hired) also participated in the new round.

Plum offers health insurance coverage on a B2B2C model. The startup partners with small businesses to provide health insurance coverage to all their employees (and their family members), charging as little as $1 a month for an employee.

The startup has developed the insurance stack from scratch and partnered with insurers to include additional coverage on pre-existing conditions and dental, said Abhishek Poddar, co-founder and chief executive of Plum, in an interview with TechCrunch.

(Like fintech firms, which partner with banks and NBFCs to provide credit to customers, online insurance startups have partnerships with insurers to provide health insurance coverage. Plum maintains partnerships with ICICI Lombard, Care Health, Star Health and New India Assurance.)

Poddar, who has worked at Google and McKinsey, said Plum is making it increasingly affordable and enticing for businesses to choose the startup as their partner. Most insurance firms and online aggregators in India today currently serve consumers. There are very few players that engage with businesses. Even among those that do, they tend to be costlier and not as flexible.

Plum offers its partnered client’s employees the option to top up their health insurance coverage or extend it to additional members of the family. Unlike its competitors that require all the premium to be paid annually, Plum gives its clients the ability to pay each month. And signing up an entire firm for Plum takes less than an hour. (The speed is a key differentiator for Plum. Small businesses have to typically spend months in negotiating with other insurers. Bangalore-based Razorpay has also partnered with Plum to give the fintech startup’s clients a three-click, one-minute option to sign up for insurance coverage.)

The startup plans to deploy the fresh capital to further expand its offerings, making its platform open to smaller businesses with teams as small as seven employees to sign up, said Poddar. The startup plans to cover 10 million people in India with insurance by 2025, and eventually expand to international markets, he said.

India has an under-penetrated insurance market. Within the under-penetrated landscape, digital distribution through web-aggregators today accounts for just 1% of the industry, analysts at Bernstein wrote in a recent report.

“As India’s healthcare insurance industry rapidly expands and transforms, Plum is well positioned to make comprehensive health insurance accessible to millions of Indians. We are excited to partner with Abhishek, Saurabh and the Plum team as they scale their leading tech-enabled platform to employers across the country,” said Scott Shleifer, Partner at Tiger Global, in a statement.

Plum is the latest investment from Tiger Global in India this year. The hedge fund, which has backed over 20 Indian unicorns, has emerged as the most prolific investor in Indian startups in recent months, winning founders with its pace of investment, check size and favorable terms. Last week, the firm invested in Indian social network Koo.

#apps, #asia, #funding, #india, #plum, #sequoia-capital-india, #tc, #tiger-global, #tiger-global-management

Indian logistics giant Delhivery raises $277 million ahead of IPO

Delhivery, India’s largest independent e-commerce logistics startup, has raised $277 million in what is expected to be the final funding round before the firm files for an IPO later this year.

In a regulatory filing, the Gurgaon-headquartered startup disclosed it had raised $277 million in a round led by Boston-headquartered investment firm Fidelity. Singapore’s sovereign wealth fund GIC, Abu Dhabi’s Chimera, and UK’s Baillie Gifford also participated in the new round, a name of which the startup didn’t specify.

The new round valued the 10-year-old startup at about $3 billion. Delhivery — which also counts SoftBank Vision Fund, Tiger Global Management, Times Internet, The Carlyle Group, and Steadview Capital among its investors — has raised about $1.23 billion to date. The startup didn’t comment on Sunday.

Delhivery began its life as a food delivery firm, but has since shifted to a full suite of logistics services in over 2,300 Indian cities and more than 17,500 zip codes.

It is among a handful of startups attempting to digitize the demand and supply system of the logistics market through a freight exchange platform.

Research and image: Bernstein

Its platform connects consigners, agents and truckers offering road transport solutions. The startup says the platform reduces the role of brokers, makes some of its assets such as trucking — the most popular transportation mode for Delhivery — more efficient, and ensures round the clock operations.

This digitization is crucial to address the inefficiencies in the Indian logistics industry that has long stunted the national economy. Poor planning and forecasting of demand and supply increases the carrying costs, theft, damages, and delays, analysts at Bernstein wrote in a report last month about India’s logistics market.

Delhivery, which says it has delivered over 1 billion orders, works with “all of India’s largest e-commerce companies and leading enterprises,” according to its website, where it also says the startup has worked with over 10,000 customers. For the last leg of the delivery, its couriers are assigned an area that never exceeds 2 sq km, allowing them to make several delivery runs a day to save time.

Indian logistics market’s TAM (total addressable market) is over $200 billion, Bernstein analysts said.

The startup said late last year that it was planning to invest over $40 million within two years to expand and increase its fleet size to meet the growing demand of orders as more people shop online amid the pandemic.

#asia, #baillie-gifford, #chimera, #delhivery, #fidelity, #funding, #gic, #india, #logistics, #rivigo, #softbank, #softbank-vision-fund, #tiger-global, #tiger-global-management, #times-internet

Bain Capital Ventures has $1.3 billion more to invest — including in emerging fund managers

Bain Capital Ventures (BCV), the venture arm of the 37-year-old private equity firm Bain Capital, announced this morning that it has $1.3 billion more smackers to invest across two funds, a $950 million fund for seed and Series A deals and a $350 million fund for growth-stage opportunities. That amount is up slightly from late 2018, when the outfit announced $1 billion across two funds.

While the outfit is backed by all the usual suspects, including endowments and pension funds, it’s worth noting that around $130 million of that capital comes from investors and other employees inside of Bain, whose contributions typically make up 10% of a fund. (Investors at other firms like Sequoia are big investors in their funds, too.)

More interesting, of course, is where the capital will be spent. According to partners Sarah Smith and Aaref Hilaly, the focus remains very much on enterprise startups, where the team likes to jump in early and build up a big position. (Some of its biggest bets in terms of dollars invested right now include the text message marketing company Attentive, currently valued at $2.2 billion, and the in-memory database company Redis Labs, valued right now at $2 billion.)

Interestingly, BCV is also investing directly in a lot of emerging managers, 50 of whom BCV has already backed in order improve the diversity of ideas and startups that it gets to see at the earliest stages.

It’s all part of the firm’s continuing evolution, says the outfit, which got its start in 2001 on the East Coast and was designed initially to fund Series B and older companies but has evolved to fund mostly West Coast- and, to a smaller degree, New York-based startups that are just getting off the ground. To underscore the shift, says Hilaly, BCV wrote checks to 42 companies last year and 37 of them were either seed-stage or Series A-stage startups and the “vast majority were pre-revenue.”

Asked if competition at the later-stage drove the firm to seek out more nascent deals, Hilaly notes that competition at every stage is intense right now and argues that BCV’s current team composition — Hilaly spent seven years at Sequoia and earlier founded a company himself; Smith spent a collective seven years at Quora and Facebook; partner Enrique Salem was a former president and CEO of Symantec, for example — makes it most impactful at the company formation stage, when founders are still getting the fundamentals down.

As for why the organization needs such a massive fund to back such young companies, it’s a reflection of the changing market, both partners suggest. Not only do firms need to be able to provide the capital that entrepreneurs need to grow at a faster clip than ever before, but it’s becoming increasingly important for venture outfits to support the ecosystem — including as a competitive edge.

For some firms, that support comes in the form of scout programs that empower operators and founders to write checks to friends who are starting companies.

For BCV, it means committing an undisclosed but “material” amount of capital to emerging seed-fund managers. So far among the managers it has backed is Bobby Goodlatte of Form Capital, who we talked with recently (see below); Maren Bannon of London-based January Ventures; Ryan Hoover of Weekend Fund; Scribble Ventures, run in part by husband-and-wife duo Elizabeth and Kevin Weil; and Noemis Ventures in New York.

Smith says that BCV is “really excited about this program because it’s great for founders, who have more choice than ever as they’re getting started. It’s also helping on-ramp a broader group of investors into the venture ecosystem, which is something I’m personally passion about as I care about diversity of thought.”

Those newer funds — 17% of which are run by Black general partners and 21% of which are run by women —  also help BCV to stay atop the latest enterprise trends, she adds, saying that in addition to checks, BCV helps make limited partner introductions for managers to help get them off the ground. (BCV does not ask for any information rights beyond what the firms’ other limited partners receive.)

As for where BCV will be funneling the rest of its new capital, Smith says that BCV has always been — and remains — thesis driven, and that much of what interests the firm right now is application software infrastructure, health tech investing, e-commerce-enabled enterprise tech, and fintech, including crypto, which has become a growing area of interest.

Some of the firm’s related deals include the crypto lending startup BlockFi and Digital Currency Group, the parent company behind the popular Grayscale Bitcoin Trust.

BCV has also invested in “a few tokens,” says Hilaly, “but that’s not the major focus,” he adds.

In the meantime, BCV — which is writing checks as small as several hundred thousand dollars to upwards of $100 million in companies — is also keeping an eye on the trends that continue to reshape the venture industry, including, right now, bigger and faster deals.

“It’s unprecedented,” observes Hilaly of what’s happening in the market right now. “My general feeling is that venture is not so unlike startups, and every firm has to just reinvent itself every five or 10 years because the ecosystem around it is changing so much.

“You can complain about competition,” he continues, “but the reality is competition just forces you to be better.” Certainly, he says, “You have to you have to be on your game to a greater extent than ever before or there’s just no way a sensible founder would pick you.”

#aaref-hilaly, #attentive, #bain-capital-ventures, #blockfi, #digital-currency-group, #docusign, #linkedin, #redis-labs, #sarah-smith, #sequoia-capital, #surveymonkey, #tc, #tiger-global-management, #venture-capital

Portside raises $17M for its business aviation management platform

Portside, an aviation startup that is building a platform for managing the backend of a corporate flight department, charter operation, government fleet and fractional ownership operation, today announced that it has raised a $17 million funding round led by Tiger Global Management, with participation from existing investors I2BF Global Ventures and SOMA Capital.

The idea behind Portside, which was founded in 2018, is that it lets business aviation companies and flight departments manage everything from flight operations to maintenance, crew and staff scheduling, expense management for crew members and staff, and financial data to help them operate more efficiently. It’s basically everything you need to run your flight department in a single solution, but it also integrates with virtually all of the existing scheduling, accounting, expense management and maintenance tools a flight department or fractional ownership operation is likely using today.

Image Credits: Portside

While the COVID pandemic put a halt to most forms of private aviation early on, that market saw a quick rebound. Portside says it saw its revenue grow almost 300% in 2020 and that it added more than 50 aircraft operators in multiple countries to its user base.

“This infusion of new capital will be used to accelerate investment in product innovation, support further engagement with large enterprise customers and grow our global engineering and customer success teams,” said Alek Vernitsky, co-founder and CEO of Portside. “We appreciate the strong support we have received from both our existing and new investors in this round. They have collectively demonstrated their confidence in our strategy and intentional approach to cloud-based digital transformation of the global business aviation industry.”

Portside is not alone in this market. Companies like Fl3xx, for example, offer similar solutions for flight departments and at the lower end, tools like Flight Circle offer a subset of these features for general aviation clubs and partnerships.

“Portside has progressed rapidly since inception and is entering the next stage of fulfilling its vision of becoming the undisputed leader in cloud-based solutions for business aviation,” stated John Curtius, partner at Tiger Global Management. “In our view, Portside represents the future of the industry, and we are pleased to partner with a company we believe will continue to create significant value for many years to come.”

#aviation, #expense-management, #fractional-ownership, #ownership, #portside, #recent-funding, #soma-capital, #startups, #tc, #tiger-global-management, #transportation

Crypto asset manager Babel raises $40M from Tiger Global, Bertelsmann and others

Three years after its inception, crypto financial service provider Babel Finance is racking up fundings and partnerships from major institutional investors. The startup said Monday that it has closed a $40 million Series A round, with lead investors including Zoo Capital, Sequoia Capital China, Dragonfly Capital, Bertelsmann and its Asian fund BAI Capital, and Tiger Global Management.

For years, traditional investors were reluctant to join the cryptocurrency fray. But in 2020, Babel noticed that many institutions and high net worth individuals began to consider crypto assets as an investment class.

Babel, with offices in Hong Kong, Beijing, and Singapore, wanted to capture the window of opportunity and be one of the earliest to help allocate crypto assets in investors’ portfolios. But first, it needed to win investors’ trust. One solution is to have reputable private equity and venture capital firms on its cap table.

“It’s more of a brand boost so we can attract more institutions and build up credibility,” Babel’s spokesperson Yiwei Wang said of the firm’s latest financing, which is a strategic round as Babel had “reached profitability” and “wasn’t actively looking for funding.”

To vie for institutional customers and wealthy individuals, Babel plans to spend its fresh proceeds on product development, compliance and talent acquisition, seeking especially banking professionals and lawyers to work on regulatory requirements. It currently has a headcount of 55 employees.

Mainstream investors are jumping into the crypto scene partly because many see bitcoin as a way to hedge against “solvency and credibility risks” amid global economic uncertainties caused by Covid-19, said Wang. “Bitcoin is not something controlled by the government.”

The other trigger, Wang explained, was what shock the industry in February: Elon Musk bought $1.5 billion in bitcoin and declared Tesla would begin accepting the digital token as payments. That sparked a massive rally around bitcoin, sending its price to over $40,000.

Babel’s evolution has been in line with the trajectory of the industry. In its early days, the startup was a “crypto-native” company offering deposit and loan products to crypto miners and traders. These days, it also runs a suite of asset management products and services tailored to enterprise clients around the world. It’s applying for relevant financial licenses in North America and Asia.

As of February, Babel’s crypto lending business had reached an outstanding balance of $2 billion in equivalent cryptocurrency, the firm says. It has served more than 500 institutional clients and sees about $8 billion in direct trading volume each month. 80% of its revenues are currently derived from institutions. The goal is to manage one million bitcoins within four years.

#asia, #babel-finance, #beijing, #bertelsmann, #bitcoin, #cryptocurrencies, #cryptocurrency, #decentralization, #digital-currencies, #financial-technology, #funding, #sequoia-capital, #sequoia-capital-china, #singapore, #spokesperson, #tc, #tiger-global-management

HoneyBook raises $155M at $1B+ valuation to help SMBs, freelancers manage their businesses

HoneyBook, which has built out a client experience and financial management platform for service-based small businesses and freelancers, announced today that it has raised $155 million in a Series D round led by Durable Capital Partners LP.

Tiger Global Management, Battery Ventures, Zeev Ventures, 01 Advisors as well as existing backers Norwest Venture Partners and Citi Ventures also participated in the financing, which brings the New York-based company’s valuation to over $1 billion. With the latest round, HoneyBook has now raised $215 million since its 2013 inception. The Series D is a big jump from the $28 million that HoneyBook raised in March 2019. 

When the COVID-19 pandemic hit last year, HoneyBook’s leadership team was concerned about the potential impact on their business and braced themselves for a drop in revenue.

Rather than lay off people, they instead asked everyone to take a pay cut, and that included the executive team, who cut theirs “by double” the rest of the staff.

“I remember it was terrifying. We knew that our customers’ businesses were going to be impacted dramatically, and would impact ours at the same time dramatically,” recalls CEO Oz Alon. “We had to make some hard decisions.”

But the resilience of HoneyBook’s customer base surprised even the company, who ended up reinstating those salaries just a few months later. And, as corporate layoffs driven by the COVID-19 pandemic led to more people deciding to start their own businesses, HoneyBook saw a big surge in demand.

“Our members who saw a hit in demand went out and found demand in another thing,” Oz said. As a result, HoneyBook ended up doubling its number of members on its SaaS platform and tripling its annual recurring revenue (ARR) over the past 12 months. Members booked more than $1 billion in business on the platform in the past nine months alone. 

HoneyBook combines tools like billing, contracts, and client communication on its platform with the goal of helping business owners stay organized. Since its inception, service providers across the U.S. and Canada such as graphic designers, event planners, digital marketers and photographers have booked more than $3 billion in business on its platform. And as the pandemic had more people shift to doing more things online, HoneyBook prepared to help its members adapt by being armed with digital tools.

Image Credits: HoneyBook

“Clients now expect streamlined communication, seamless payments, and the same level of exceptional service online, that they were used to receiving from business owners in person,” Alon said.

Oz and co-founder/wife, Naama, were both small business owners themselves at one time, so they had firsthand insight on the pain points of running a service-based business. 

HoneyBook’s software not only helps SMBs do more business, but helps them “convert potentials to actual clients,” Oz said.

“We help them communicate with potential clients so they can win their business, and then help them manage the relationship so they can keep them,” Naama said.

The company plans to use its new capital toward continued product development and to “dramatically” boost its 103-person headcount across its New York and Tel Aviv offices.

“We’re seeing so much demand for additional services and products, so we definitely want to invest and create better ways for our members to present themselves online,” Alon told TechCrunch. “We’re also seeing demand for financial products and the ability to access capital faster. So that’s just a few of the things we plan to invest in.”

The company also wants to make its platform “more customizable” for different categories and verticals.

Chelsea Stoner, general partner at Battery Ventures, said her firm recognized that the expansive market of productivity tools to serve small businesses and entrepreneurs was “a market of discrete and separate productivity tools.”

HoneyBook, she said, is a true platform for SMBs, “providing a huge array of functionality in one cohesive UX.”

“It unites and connects every task for the solopreneurs, from creating and distributing marketing collateral, to organizing and executing proposals, to sending invoices and collecting payments,” Stoner said. “The company is constantly innovating and iterating in response to its members; we also see a lot of opportunity with payments going forward…And, due to Covid-19 and other factors, the company is sitting on pent-up demand that will accelerate growth even more.”

#advisors, #articles, #battery-ventures, #business, #business-models, #canada, #ceo, #chelsea-stoner, #citi-ventures, #co-founder, #economy, #entrepreneurship, #executive, #funding, #fundings-exits, #general-partner, #honeybook, #new-york, #norwest-venture-partners, #payments, #productivity-tools, #recent-funding, #saas, #small-business, #startups, #tel-aviv, #tiger-global-management, #united-states, #venture-capital, #zeev-ventures

Tiger Global backs Indian crypto startup Coinswitch Kuber at over $500M valuation

Coinswitch Kuber, a startup that allows young users in India to invest in cryptocurrencies, said on Thursday it has raised $25 million in a new financing round as it looks to expand its reach in India, the world’s second largest internet market and also the place where the future of private cryptocurrencies remains uncertain for now.

Tiger Global financed the entire Series B funding round of Coinswitch Kuber and valued the three-year-old Indian startup at over $500 million. The announcement of Series B comes just three months after Coinswitch closed its $15 million Series A round from Ribbit Capital, Sequoia Capital India, and Kunal Shah. The Bangalore-based startup has raised $41.5 million to date.

TechCrunch reported earlier this month that the New York-headquartered technology hedge fund had led or was in advanced stages of talks to lead investments in many Indian startups including Coinswitch.

Coinswitch Kuber is one of the handful of startups operating in the cryptocurrency space today. The startup allows users to buy slivers of several popular cryptocurrencies. A user on Coinswitch, for instance, can buy small sachets of bitcoin and other currencies for as low as 100 Indian rupees ($1.3)-worth.

The startup said it has amassed over 4.5 million users, more than half of whom are aged 25 or younger. In the past 11 months, Coinswitch Kuber said it processed transactions over $5 billion.

But how the startup performs in the future is not entire in its hand.

While trading of private cryptocurrency such as bitcoin is currently legal in India, New Delhi is widely expected to introduce a law that bans all private cryptocurrency.

Ashish Singhal, co-founder and chief executive of Coinswitch Kuber, said he is optimistic that India will not ban private cryptocurrencies, but said the startup closed the financing round with Tiger Global before New Delhi’s indication to formulate a law.

“This investment round brings us at par with some of the most sought after cryptocurrency companies in the world and sets us up for the long run,” said Singhal.

In recent months, some startups in India have started to explore a contingency plan in case the nation does end up banning cryptocurrency trading in the country. Many startups are today building in India, but focusing on serving customers overseas.

“As they build India’s leading cryptocurrency platform, CoinSwitch is well positioned to capture the tremendous growing interest in crypto among retail investors. We are excited to partner with CoinSwitch as they innovate in this emerging asset class,” said Scott Shleifer, Partner at Tiger Global, in a statement.

#apps, #asia, #cryptocurrency, #finance, #funding, #india, #tiger-global-management

Messaging platform Gupshup raises $100 million at $1.4 billion valuation

A startup that began its journey in India 15 years ago, helping businesses reach and engage with users through texts said on Thursday it has attained the unicorn status and is also profitable.

San Francisco-headquartered Gupshup has raised $100 million in its Series F financing round from Tiger Global Management, which valued the 15-year-old startup at $1.4 billion.

The startup operates a conversational messaging platform, which is used by over 100,000 businesses and developers today to build their own messaging and conversational experiences to serve their users and customers.

Gupshup, which has raised $150 million to date and concluded its Series E round in 2011, says each month its clients send over 6 billion messages.

“The growth in business use of messaging and conversational experiences, transforming virtually every customer touchpoint, is an exciting secular trend,” said John Curtius, a partner at Tiger Global Management, in a statement. “Gupshup is uniquely positioned to win in this market with a differentiated product, a clear and sustainable moat, and an experienced team with a proven track record. In addition to its market leadership, Gupshup’s unique combination of scale, growth and profitability attracted us.”

Tens of millions of users in India, including yours truly, remember Gupshup for a different reason, however. For the first six years of its existence, Gupshup was best known for enabling users in India to send group messages to friends. (These cheap texts and other clever techniques enabled tens of millions of Indians to stay in touch with one another on phone a decade ago.)

That model eventually became unfeasible to continue, Beerud Sheth, co-founder and chief executive of Gupshup, told TechCrunch in an interview.

“For that service to work, Gupshup was subsidizing the messages. We were paying the cost to the mobile operators. The idea was that once we scale up, we will put advertisements in those messages. Long story short, we thought as the volume of messages increases, operators will lower their prices, but they didn’t. And also the regulator said we can’t put ads in the messages,” he recalled.

That’s when Gupshup decided to pivot. “We were neither able to subsidize the messages, nor monetize our user base. But we had all of this advanced technology for high-performance messaging. So we switched from consumer model to enterprise model. So we started to serve banks, e-commerce firms, and airlines that need to send high-level messages and can afford to pay for it,” he said.

Over the years, Gupshup has expanded to newer messaging channels, including conversational bots and it also helps businesses set up and run their WhatsApp channels to engage with customers.

Sheth said scores of major firms worldwide in banking, e-commerce, travel and hospitality and other sectors are among the clients of Gupshup. These firms are using Gupshup to send their customers with transaction information, and authentication codes among other use cases. “These are not advertising messages or promotional messages. These are core service information,” he said.

The startup, which had an annual run rate of $150 million, will use the fresh capital to broaden its product offering and court clients in more markets.

This is a developing story. More to follow…

#apps, #funding, #india, #tiger-global-management

Avant doubles down on digital banking with Zero Financial acquisition

Avant, an online lender that has raised over $600 million in equity, announced today that it has acquired Zero Financial and its neobank brand, Level, to further its mission of becoming a digital bank for the masses.

Founded in 2012, Chicago-based Avant started out primarily as an online lender targeting “underserved consumers,” but is evolving into digital banking with this acquisition. The company notched gross revenue of $265 million in 2020 and has raised capital over the years from backers such as General Atlantic and Tiger Global Management.

“Our path has always been to become the premier digital bank for the everyday American,” Avant CEO James Paris told TechCrunch. “The massive transition to digital over the last 12 months made the timing right to expand our offerings.” 

The acquisition of Zero Financial and its neobank, Level (plus its banking app assets), will give Avant the ability to offer “a full ecosystem of banking and credit product offerings” through one fully digital platform, according to Paris. Those offerings include deposits, personal loans, credit cards and auto loans.

Financial terms of the deal weren’t disclosed other than the fact that the acquisition was completed with a combination of cash and stock.

Founded in 2016, San Francisco-based Zero Financial has raised $147 million in debt and equity, according to Crunchbase. New Enterprise Associates (NEA) led its $20 million Series A in May of 2019.

Level was unveiled to the public in February of 2020, created by the same California-based team that founded the “debit-style” credit card offering Zero, according to this FintechFutures piece. The challenger bank was created to target millennials dissatisfied with the incumbent banking options.

Zero Financial co-founder and CEO Bryce Galen said that Avant shared his company’s mission “to challenge the status quo by bringing innovative financial services products to consumers who might otherwise be unable to access them.”

Avant, notes Paris, uses thousands of AI-driven data points to determine credit risk. With this acquisition, that lens will be expanded with data, such as a deposit customer’s cash flow, how they manage their finances and whether they pay their bills on time. 

“This will allow us to make credit decisions faster and deliver personalized options to help underbanked consumers gain financial freedom, at any and every stage of their financial journey,” Paris told TechCrunch. “It will also build long-term engagement and loyalty and help grow our reach beyond the 1.5 million customers we’ve served to date.”  

Like a growing number of fintechs, Avant operates under the premise that a person’s ability to get credit shouldn’t be dictated by a credit score alone.

“A significant amount of Americans have poor, bad or no credit at all. For these people, accessing credit isn’t exactly easy and often comes with extra fees,” Paris said. That’s why, he added, Avant has focused on providing options for such consumers with “transparent, rewards-driven products.”

Level’s branchless, all-digital platform offers things such as cashback rewards on debit card purchases, a “competitive APY” on deposits, early access to paychecks and no hidden fees, all of which are especially beneficial for consumers on the path to financial freedom, according to Paris.

Since its inception in 2012, Avant has connected more than 1.5 million consumers to $7.5 billion in loans and 400,000 credit cards. The company launched its credit card in 2017 and over the past two years alone, it has grown its number of credit card users by 170%.

#apps, #artificial-intelligence, #avant, #bank, #banking, #california, #challenger-bank, #chicago, #credit-card, #debit-card, #digital-banking, #economy, #exit, #finance, #funding, #general-atlantic, #level, #ma, #money, #premier, #san-francisco, #startups, #tc, #tiger-global-management, #zero-financial

With an ARR topping $250 million, LA’s vertical SAAS superstar ServiceTitan is now worth $8.3 billion

Who knew building a vertical software as a service toolkit focused on home heating and cooling could be worth $8.3 billion?

That’s how much Los Angeles-based ServiceTitan, a startup founded just eight years ago is worth now, thanks to some massive tailwinds around homebuilding and energy efficiency that are serving to boost the company’s bottom line and netting it an unprecedented valuation for a vertical software company, according to bankers.

The company’s massive mint comes thanks to a new $500 million financing round led by Sequoia’s Global Equities fund and Tiger Global Management.

ServiceTitan’s backers are a veritable who’s who of the venture industry, with longtime white shoe investors like Battery Ventures, Bessemer Venture Partners and Index Ventures joining the later stage investment funds like T. Rowe Price, Dragoneer Investment Group, and ICONIQ Growth.

In all, the new $500 million round likely sets the stage for a public offering later this year or before the end of 2022 if market conditions hold.

ServiceTitan now boasts more than 7,500 customers that employ more than 100,000 technicians and conduct nearly $20 billion worth of transactions providing services ranging from plumbing, air conditioning, electrical work, chimney, pest services and lawn care.

If Angi and Thumbtack are the places where homeowners go to find services and technicians, then ServiceTitan is where those technicians go to manage and organize their own businesses.

Based in Glendale, Calif., with satellite offices in Atlanta and Armenia, ServiceTitan built its business to solve a problem that its co-founders knew intimately as the children of parents whose careers were spent in the HVAC business.

The market for home services employs more than 5 million workers in the US and represents a trillion dollar global market.

Despite the siren song of global expansion, there’s likely plenty of room for ServiceTitan to grow in the U.S. Home ownership in the country is at a ten-year high thanks to the rise of remote work and an exodus from the largest American cities accelerated by the COVID-19 pandemic.

A focus on energy efficiency and a desire to reduce greenhouse gas emissions will likely cause a surge in residential and commercial retrofits which will also boost new business. Indeed these trends were already apparent in the statistic that home improvement spending was up 3 percent in 2020 even though the broader economy shrank by 3.5 percent.

“We depend on the men and women of the trades to maintain our life support systems: running water, heat, air conditioning, and power,” said Ara Mahdessian, co-founder and CEO of ServiceTitan. “Today, as both homeownership rates and time spent at home reach record highs, these essential service providers are facing rising demand from an increasingly tech-savvy homeowner. By providing contractors with the tools they need to deliver a great customer experience and grow their businesses with ease, ServiceTitan is enabling the hardworking men and women of the trades to reach the level of success they deserve.”

#armenia, #atlanta, #battery-ventures, #bessemer-venture-partners, #california, #chase-coleman, #dragoneer-investment-group, #energy-efficiency, #finance, #greenhouse-gas-emissions, #iconiq-growth, #investment, #los-angeles, #sequoia, #servicetitan, #software, #t-rowe-price, #tc, #thumbtack, #tiger-global-management, #united-states

Meet SeekOut, a profitable diverse hiring startup that just raised $65M

Most companies claim they want a diverse staff but at the same time, complain they don’t know how to go about recruiting more diverse candidates.

Enter SeekOut — a startup that is out to give companies no excuses with its AI-powered platform.

A group of former Microsoft executives and engineers —  Anoop Gupta, Aravind Bala, John Tippett, Vikas Manocha — founded SeekOut in 2016. The team started out building a messaging platform that provided a deep level of information about people that others might be emailing. When they realized that what customers really were after was the information they were uncovering, and not so much the messaging capability, the company pivoted in 2017.

Today, SeekOut’s goal is to help talent acquisition teams to recruit “hard-to-find and diverse talent.” The startup wouldn’t name names but said it is working with 6 out of the 10 “most highly valued companies” by market cap in the U.S. Overall, it had about 500 customers as of January across a range of industries from technology to pharmaceutical to aerospace and defense to banking.

Over the years, SeekOut has built out a database with hundreds of millions of profiles using its AI-powered talent search engine and “deep interactive analytics.” It finds talent by scouring public data and using natural-language and machine-learning technologies to understand the expertise of each candidate and build a complete 360-degree view of each potential employee. Specifically, it blends info from public profiles, GitHub, papers and patents, employee referrals, company alumni, candidates in ATS systems.

While SeekOut initially focused strictly on technical talent, it has since broadened its base to helping recruiters and sources find more diverse candidates in general as well as people with simply “hard-to-find” skill sets. And it claims to do it with “unprecedented speed and precision” via a blind hiring method designed to reduce bias. SeekOut then gives recruiters a way to engage with candidates instantly by getting access to the right contact information in a “single click.”

SeekOut co-founders (left to right) Anoop Gupta, Aravind Bala, Vikas Manocha and John Tippett. Image courtesy of SeekOut

The startup is hitting such a sweet spot that it attracted the attention of Tiger Global Management, the global investment firm that just led a $65 million Series B that values SeekOut at around $500 million.

Existing backers Madrona Venture Group and Mayfield also participated in the financing, which brings SeekOut’s total funding since inception to $73 million.

In a world where so many startups have yet to turn a profit, SeekOut is a refreshing exception. Since its $6 million Series A raise in May 2019, the SaaS company says it has grown its subscription revenue (ARR) by “more than 10-fold” (although it declined to reveal hard revenue figures). And it’s been profitable, or cash-flow positive, each of the last two years.

Gupta, who serves as the company’s CEO, said its platform (dubbed Talent-360) helps companies not only find diverse talent, but helps them improve retention by finding the “right” candidate to begin with.

While there was a pause almost across the board in hiring when the COVID-19 pandemic began, the emergence of remote work as a new normal has forced companies to think more creatively about hiring — especially since they are not constricted by geography as in the past — according to Gupta.

“This freedom also means their need for tools like SeekOut increased and we have seen our business take off as a result,” he told TechCrunch. “The focus on diversity hiring and our unique approach to finding the talent and offering blind hiring features has super charged the adoption.”

SeekOut’s Insights dashboard. Image courtesy of SeekOut

Mario Linares, head of talent acquisition at Aviatrix, acknowledges that competition for talent among software companies is fiercer than ever

“SeekOut’s innovative AI-powered search, global power filters, diversity filters, and talent pool insight have been critical components of Aviatrix’s global growth plan,” he said in a written statement.

For Tiger Global Partner John Curtius, SeekOut’s platform has the potential “to transform the world of HR.”

“We are impressed by the customer love and traction SeekOut is experiencing,” he said in a written statement.

Looking ahead, SeekOut plans to use its new capital to speed up the development and expansion of its platform and build customer success, engineering, sales and marketing teams in Seattle. And it plans to use its own platform to do it.

The company also plans to double its headcount of 50 over the next year.

#diversity, #funding, #fundings-exits, #labor, #personnel, #recent-funding, #saas, #seekout, #startups, #tiger-global-management, #venture-capital

Inside Workvivo’s plans to take on Microsoft in the employee experience space

Maintaining company culture when the majority of staff is working remotely is a challenge for every organization — big and small.

This was an issue, even before COVID. But it’s become an even bigger problem with so many employees working from home. Employers have to be careful that workers don’t feel disconnected and isolated from the rest of the company and that morale stays high.

Enter Workvivo, a Cork, Ireland-based employee experience startup that is backed by Zoom founder Eric Yuan and Tiger Global that has steadily grown over 200% over the past year.

The company works with organizations ranging in size from 100 employees to over 100,000 and boasts more than 500,000 users. According to CEO and co-founder John Goulding, it’s had 100% retention since it launched. Customers include Telus International, Kentech, A+E Networks and Seneca Gaming Corp., among others.

Founded by Goulding and Joe Lennon in 2017, Workvivo launched its employee communication platform in mid-2018 with the goal of helping companies create “an engaging virtual workplace” and replace the outdated intranet.

“We’re not about real time, we’re more asynchronous communication,” Goulding explained. “We have a lot of transactional tools, and typically carry the bigger message about what’s going on in a company and what positive things are happening. We’re more focused on human connection.”

Using Workvivo, companies can provide information like CEO updates, recognition for employees via a social style — “more things that shape the culture so workers can get a real sense of what’s happening in an organization.” It launched podcasts in the second quarter and livestreaming in Q4.

In 2019, Workvivo showed its product to Zoom’s Yuan, who ended up becoming one of the company’s first investors. Then in May of 2020, the company raised $16 million in a Series A funding led by Tiger Global, which is best known for large growth-oriented rounds.

Workvivo, which was built out long before the COVID-19 pandemic, found itself in an opportune place last year. And demand for its offering has reflected that. 

“Since COVID hit, growth has accelerated,” Goulding told TechCrunch. “We grew three times in size over where we were before the pandemic started, in terms of revenue, users, customers and employees.”

The SaaS operator’s deals range from $50,000 to close to $1 million a year, he said. Workvivo is Europe-based and operates in 82 countries. But the majority of its customers are located in the U.S. with 80% of its growth coming from the country.

The startup opened an office in San Francisco in early 2020, which it is expanding. Thirty percent of its 65-person team is currently U.S.-based, with some working remotely from other states.

While Workvivo would not reveal hard revenue figures, Goulding only said it’s not seeking additional funding anytime soon considering the company is “in a very strong capital position.”

To tackle the same problem, Microsoft last month launched Viva, its new “employee experience platform,” or, in non-marketing terms, its new take on the intranet sites most large companies tend to offer their employees. With the move, Microsoft is taking on the likes of Facebook’s Workplace platform and Jive in addition to Workvivo.

Despite the increasingly crowded space, Workvivo believes it has an advantage over competitors in that it integrates well with Slack and Zoom.

“We’re sitting alongside Slack and Zoom in the ecosystem,” Goulding said. “There’s Zoom, Slack and us.”

Slack is real-time messaging and what’s happening in the immediate future, and Zoom is real-time video and “about the moment,” he said.

To Goulding, Microsoft’s new offering is unproven yet and a reactionary move.

“It’s obvious there’s a battle to be won for the center of the digital workplace,” he said. “We’re here to capture the heartbeat of an organization, not pulses.”

#eric-yuan, #labor, #personnel, #saas, #startups, #tc, #tiger-global, #tiger-global-management, #workvivo

Locus Robotics has raised a $150M Series E

Massachusetts-based Locus Robotics today announced a $150 million Series E. The round, led by Tiger Global Management and Bond, brings the firm’s total to around $250 to date, and values the robotics company at $1 billion. Locus is notable for a more modular and flexible solution for automating warehouses than many of its competitors (see: Berkshire Grey). The company essentially leases out robotic fleet for organizes looking to automate logistics.

“We can change the wings on the plane while it’s flying,” CEO Rick Faulk tells TechCrunch. Basically no one else can do that. Companies want flexible automation. They don’t want to bolt anything to the floor. If you’re a third-party logistics company and you have a two, three, four-year contract, the last thing you want to do is invest $25-$50 million to buy a massive solution, bolt it to the floor and be locked into all of this upfront expense.”

The company currently has some 4,000 robots deployed across 80 sites. Roughly 80% of its deployments are in the U.S., with the remaining 20% in Europe. Part of this massive funding round will go toward expanding international operations, including a bigger push into the EU, as well as the APAC region, where it presently doesn’t have much of a footprint.

The company will also be investing in R&D, sales and marketing and increasing its current headcount of 165 by 75 in the coming year.

The pandemic is clearly a driver in interest around this brand of automation, with more companies looking toward robotics for help.

“COVID has put a spike in the growth of online ordering, clearly, and that spike is probably a four to five year jump,” says Faulk. “If you look at the trend of e-commerce, it’s been on a steady upward tick. It was about 11% last year and COVID put a spike up to 16/17%. We think that genie’s out of the bottle, and it’s not going back any time soon.”

The funding round also points to a company that seemingly has no desire to be acquired by a larger name, akin to Kiva Systems’ transformation into Amazon Robotics.

“We have no interest in being acquired,” the CEO says. “We think we can build the most and greatest value by operating independently. There are investors that want to invest in helping everyone that’s not named ‘Amazon’ compete.”

#bond, #funding, #locus-robotics, #logistics, #recent-funding, #robotics, #startups, #tiger-global-management

Tiger Global is raising a new $3.75 billion venture fund, one year after closing its last

According to a recent letter sent to its investors, Tiger Global Management, the New York-based investing powerhouse, is raising a new $3.75 billion venture fund called Tiger Private Investment Partners XIV that it expects to close in March.

The fund is Tiger Global’s 13th venture fund, despite its title — the partners might be superstitious — and it comes hot on the heels of the firm’s 12th venture fund, closed exactly a year ago, also with $3.75 billion in capital commitments.

A spokesperson for the firm declined to comment on the letter or Tiger Global’s broader fundraising strategy when reached this morning.

It’s a lot of capital to target, even amid a sea of enormous new venture vehicles. New Enterprise Associates closed its newest fund with $3.6 billion last year. Lightspeed Venture Partners soon after announced $4 billion across three funds. Andreessen Horowitz, the youngest of the three firms, announced in November it had closed a pair of funds totaling $4.5 billion.

At the same time, Tiger Global has seemingly has a strong case to potential limited partners. Last year alone, numerous of its portfolio companies either went public or was acquired.

Yatsen Holding, the nearly five-year-old parent company of China-based cosmetics giant Perfect Diary, went public in November and is now valued at $14 billion. (Tiger Global’s ownership stake didn’t merit a mention on the company’s regulatory filing.)

Tiger Global also quietly invested in the cloud-based data warehousing outfit Snowflake and, while again, it didn’t have a big enough stake to be included in the company’s S-1, even a tiny ownership percentage would be valuable, given that Snowflake is now valued at $85 billion.

And Tiger Global backed Root insurance, a nearly six-year-old, Columbus, Oh.-based insurance company that went public in November and currently boasts a market cap of $5.3 billion. Tiger owned 10.3% sailing into the offering.

As for M&A, Tiger Global saw at least three of its companies swallowed by bigger tech companies during 2020, including Postmates’s all-stock sale to Uber for $2.65 billion; Credit Karma’s $7 billion sale in cash and stock to Intuit; and the sale of Kustomer, which focused on customer service platforms and chatbots, for $1 billion to Facebook.

Tiger Global, whose roots are in hedge fund management, launched its private equity business in 2003, spearheaded by Chase Coleman, who’d previously worked for hedge-fund pioneer Julian Robertson at Tiger Management; Scott Shleifer, who joined the firm in 2002 after spending three years with the Blackstone Group; and, soon after, Lee Fixel, who joined the firm in 2006.

Shleifer focused on China; Fixel focused on India, and the rest of the firm’s support team (it now has 22 investing professionals on staff) helped find deals in Brazil and Russia  before beginning to focus more aggressively on opportunities in the U.S.

Every investing decision was eventually made by each of the three. Fixel left in 2019 to launch his own investment firm, Addition. Now Shleifer and Coleman are the firm’s sole decision-makers.

Whether the firm replaces Fixel is an open question. Tiger Global is known for grooming investors within its operations rather than hiring outsiders, so a new top lieutenant would almost surely come from its current team.

In the meantime, the firm’s private equity arm — which has written everything from Series A checks (Warby Parker) to checks in the multiple hundreds of millions of dollars — is currently managing assets of $30 million, compared with the $49 billion that Tiger Global is managing more broadly.

A year ago, Tiger Global, which employs 100 people altogether, was reportedly managing $36.2 billion in assets.

According to the outfit’s investor letter, the firm’s gross internal rate of return across its 12 previous funds is 32%, while its net IRR is 24%.

Tiger Global’s investors include a mix of sovereign wealth funds, foundations, endowments, pensions, and its own employees, who are collectively believed to be the firm’s biggest investors at this point.

Some of Tiger Global’s biggest wins to date have include a $200 million bet on the e-commerce giant JD.com that produced a $5 billion for the firm. According to the WSJ, it also cleared more than $1 billion on the Chinese online-services platform Meituan Dianping, which went public in 2018.

Tiger Global also reportedly reaped $3 billion from majority sale of India’s Flipkart to Walmart in 2018,  though the Indian government has more recently been trying to recover $1.9 billion from the firm, claiming it has outstanding tax dues on the sale of its share in the company.

Not last, Tiger Global owned nearly 20% of the connected fitness company Peloton at the time of its 2019 IPO (a deal that Fixel reportedly brought to the table, along with Flipkart).

Peloton, valued by private investors at $4 billion before doubling immediately in value as a publicly traded company, now boasts a market cap of $48.6 billion.

Tiger Global has invested its current fund in roughly 50 companies over the last 12 months. Among its newest bets is Blend, an eight-year-old, San Francisco-based digital lending platform that yesterday announced $300 million in Series G funding, including from Coatue, at a post-money valuation of $3.3 billion.

It also led the newly announced