Month: August 2018

Xiaomi has continued its investment in India after it led a $13.4 million round for fintech startup ZestMoney.

The newly-public Chinese firm previously said it would invest up to $1 billion in India and Indian startups over a five-year period, and this deal follows its maiden India fintech investment in lending platform KrazyBee.

The new capital is an extension to ZestMoney’s recently closed $6.5 million Series A, and it takes the company to $22 million raised to date. Existing backers PayU, Ribbit Capital and Omidyar Network joined Xiaomi in this ‘Series A2’ round.

ZestMoney was founded in 2015 by British entrepreneur Lizzie Chapman, who moved to India in 2011 to head up payday loan startup Wonga’s division in the country. Wonga — which is reportedly close to shutting down — didn’t ultimately pursue that opportunity. After a spell consulting, Chapman reunited with her former Wonga India colleagues Ashish Anantharaman and Priya Sharma and the trio launched ZestMoney.

Despite close ties to Wonga, it’s fair to say that ZestMoney comes at the problem of consumer loans from a totally different direction.

Payday loan companies have (rightly) come under fire for restrictive terms and a business model that is most lucrative when customers pay back late or default on loans.

In contrast, ZestMoney — and other loan services across Asia — are much more consumer-centric. That’s to say that the businesses monetize when consumers pay back their loans, while terms are considerably more customer friendly.

“New age fintech is much more optimistic” than what’s come before, Chapman told TechCrunch in an interview. “The thesis is ‘Behave well and do good things and you’ll get cheaper pricing.'”

ZestMoney Founders (left to right) Priya Sharma, Lizzie Chapman, and Ashish Anantharaman

The startup also works with banks, rather than against them.

That makes plenty of sense because the idea of giving microloans runs counter to any kind of orthodox thinking at banks in India. Loans of $200-$300 are too small to yield any significant revenue, and banks aren’t in a position go out there and attract thousands of small loans customers that would make it viable.

Then there’s the issue of data. It simply doesn’t exist in the same way it does in the U.S, UK and other Western markets. Few consumers have a credit score, which in conventional banking terms would mean lenders are taking a stab in the dark backing them.

That explanation plus the low volume explains why banks don’t offer the services themselves, but it also goes somehow to understanding why startups like ZestMoney can.

They can essentially act like a funnel for banks, bringing in significant volumes of micro-loan customers by specializing on that area of financing. In ZestMoney’s case, that’s 200,000 applications per month. While by focusing on financial support for single-purchase items — Chapman said electronics, education and learning, and vacations are among the top reasons for loans — the service encourages repeat customers, which in turn provides data which can help vet potential loans.

Added to that, it is also in the common interest within the tech ecosystem to encourage more flexible financing.

Companies like Amazon and Flipkart, which are keen to tap the growth potential of India’s 1.3 billion population, acknowledge that more flexible payment solutions are necessary when the average salary is orders of magnitudes lower than say the U.S. That’s why these e-commerce companies and others work with ZestMoney to subsidize many of the costs around loans. The startup passes that on to consumers, meaning that, often, they get attractive interest-free rates on big-ticket items likes phones or computers.

Chapman concedes that this situation won’t last forever, but she said it helps gain initial reach among some new users and encourage repeat business from existing customers.

Indeed, Xiaomi and ZestMoney have collaborated in a similar way before.

The Chinese firm tapped the startup one year ago to develop its Mi Finance service for Xiaomi customers in India. That relationship, which Chapman said included reciprocal learnings on both sides, led to this week’s investment deal.

ZestMoney is eying a larger round of funding soon as it aims to ramp up its business, and particularly technology. Chapman said the firm is focusing on AI and facial/voice recognition which she believes will enable her company to go beyond tier-one cities in India and reach those who are less comfortable with English and are less experienced in using the internet and digital services.

Planday, the workforce collaboration platform for shift workers, has raised €35 million in new funding. The Series C round is led by SEB Private Equity, with participation from previous backers, including Creandum and Idinvest.

The Danish startup plans to use the additional investment to further develop the cloud-based software and to expand into new markets across Europe and North America. This will also include establishing a U.K.-based technology development hub — which represents a major market for Planday — as well as to grow sales and customer support teams in its London office.

Founded in 2013, Planday has developed a flexible rota scheduling platform that is used by businesses to help manage shift workers. The cloud software enables “real-time, contextual communication” between employees, managers and co-workers in shift-based industries that have been traditionally underserved by tech.

Specifically, employees can communicate with each other, swap shifts and clock in and out. Managers can also create ‘smart’ schedule templates, measure their target revenue compared to wage costs and track hours worked.

Planday is also arguably a platform in the true sense of the word, in terms of integrating with integrating with various third-party software offerings that are used by shift-based businesses. This includes payroll/accounting software from from Intuit and Sage, and EPOS software from Lightspeed and iZettle.

“Our mission is to deliver fully integrated solutions that provide a seamless experience for our customers,” says John Coldicutt, Chief Commercial Officer at Planday.

Meanwhile, Planday says its customer base spans 39 countries, and in the U.K., where it is estimated that 26 percent of all work is shift-based, the startup is growing 250 percent annually, although it doesn’t break out actual numbers.

Another analyst has Huawei overtaking Apple in the global smartphone rankings for the second quarter this year. The latest figures from Gartner put Huawei ahead on sales to end users in Q2.

Overall, Gartner says sales of smartphones to end users grew 2% in the quarter, to reach 374 million units.

The analyst pegs the Chinese smartphone maker with a 13.3% marketshare, saying it sold ~49.8M devices in the quarter, up from 9.8% in the year before quarter — ahead of Apple, which it calculates took an 11.9% marketshare (down from 12.1% in Q2 2017), selling ~44.7M iPhones.

According to Gartner’s figures, Samsung also lost share year-over-year — declining 12.7% in the quarter.

The Galaxy smartphone maker retained its no.1 spot in the rankings, with 19.3% in Q2 (vs 22.6% in the equivalent quarter last year) and ~72.3M devices sold. Though Gartner notes it’s being squeezed by “ever-growing competition from Chinese manufacturers”, while slowing demand for its flagships are squeezing its profitability. Not a happy combination.

In recent years Huawei has been one of a handful of Chinese OEMs bucking the trend of a slowing global smartphone market. And Gartner’s data suggests Huawei’s smartphone sales grew 38.6 per cent in the second quarter.

As we noted earlier this month, when other analysts reported Huawei outstripping Apple on smartphone shipments in Q2, the handset maker has built momentum for its mid-range Honor handset brand while performing solidly at the premium end too, with devices such as the P20 Pro (albeit while copypasting Apple’s iPhone X ‘notch’ screen design in that instance.)

“Huawei continues to bring innovative features into its smartphones and expand its smartphone portfolio to cover larger consumer segments,” said research director Anshul Gupta in a statement. “Its investment into channels, brand building and positioning of the Honor devices helped drive sales. Huawei is shipping its Honor smartphones into 70 markets worldwide and is emerging as Huawei’s key growth driver.”

For Apple the quarter was a flat one (0.9% growth), though that’s to be expected given Cupertino structures its mobile release cycle around a big-bang annual smartphone refresh in the fall, ahead of the holiday quarter, rather than releasing devices throughout the year.

Even so, Gupta noted that Apple is also facing growing competition from Chinese brands, which in turn is amping up pressure on the company to innovate its handsets to keep increasingly demanding consumers happy by delivering “enhanced value” in exchange for the iPhone’s premium price.

And recent reports have suggested Apple is prepping a number of iPhone design changes for fall, including a splash of color.

“Demand for the iPhone X has started to slow down much earlier than when other new models were introduced,” he added, sounding another note of concern for Apple.

Fourth placed Chinese OEM Xiaomi is one device maker putting pressure on longer term players in the smartphone market. In Q2 Gartner reckons the company sold ~32.8M devices, carving itself an 8.8% marketshare — up from 5.8% in the year ago quarter.

The analyst’s data also shows Google’s Android operating system further extending its lead over Apple’s iOS in Q2, securing 88% market share vs 11.9% for iOS.

While the smartphone market is no longer a simple duopoly on the device maker front, with Huawei elbowing past Apple to bag the second spot in the global rankings, it remains very much the opposite story where smartphone operating systems are concerned.

And Gartner’s data now records the ‘other’ category of smartphone OSes at a 0.0% marketshare, down from 0.1% in the year ago quarter…

Google launched its Tez paymen app in India a year ago, and now the company is giving the service major push into retail as it prepares to expand it to other parts of Asia and beyond.

The app itself is being rebranded to Google Pay — bringing it in line with Google’s global payment service, which is available in 20 countries — but there are more tangible updates on their way. Most notably, Google is plotting to turn Tez Google Pay into an all-encompassing payment app for India.

The service started out in bank-based payments before adding bill and utility payments and messaging, but now Google is planning an extended push into retail, both online and offline. Economic Times recently reported on the rebrand and expansion.

The service already supports payments with some 2,000 apps and websites, including Goibibo and RedBus, but it is adding to that number and planning ‘deep’ integration with partners such as Uber and ticketing service BookMyshow. Google is also focusing on offline, and it said it is in the process of adding in-store payment support with a range of retail brands that will include Big Bazaar, e-Zone, and FBB.

Tez competes with dedicated payment services like Paytm and Mobikwik, and also WhatsApp — the Facebook-owned service that is India’s top messaging app but has struggled to win approval to launch an upcoming payment service due to concerns around its lack of a local office.

Already, Google’s service has made progress. The Tez app has pulled in 55 million downloads, and Google said it has racked up 750 million transactions with an annual run rate of over $30 billion. That, it said, has motivated it to look at overseas expansion opportunities.

Google’s India-based Tez service has been rebranded to Google Pay

Beyond the retail push, the service formerly known as Tez will also expand to cover micro-loans, bringing it into direct competition with startups like ZestMoney — which just closed an investment from Xiaomi this week.

Google said it has partnered with a number of India-based banks — including HDFC Bank, ICICI Bank, Federal Bank, and Kotak Mahindra Bank — to offer “pre-approved” loans to customers “in a matter of seconds” through the Google app.

These will be smaller than typical loans, especially those in the West. Loans on services like ZestMoney typically cover one-off purchases like electronics, education fees and more, CEO Lizzie Chapman told TechCrunch in a recent interview.

Finally, Google also plans to expand Tez Google Pay overseas. That means both adding Tez features to the Google Pay service worldwide, and taking the India-based service into new parts of Asia. That’ll require plenty of localization since the Indian version is heavily based around the country’s UPI payment system — which doesn’t translate overseas — but it’s a step in the right direction.

Google isn’t saying too much about which markets it might move into but you’d imagine Southeast Asia, which as plenty of similarities with India, will be top of mind.

Note: The original version of this story was updated to correct that the integration with banks doesn’t use Tez payment data to assess user creditworthiness. 

Google has lit the news canon at its annual India event which takes place in New Delhi today. The company just introduced a subtle new AI-powered feature for its Google Go search app: website reading. You can bet this is the first of many product announcements to come out today.

The U.S. firm introduced Google Go — which is essentially a data-light search app for emerging markets — last year, and this new feature is designed to increase its appeal across India, particularly for non-English audiences.

A quick refresher: Hindi and English are the official national languages of India, but its billion-plus population is hugely diverse with more than 20 other languages recognized. The majority of those living in urban India are comfortable with English, but companies are increasingly aware that they need to cater to other tongues in order to offer even basic online services to the rest (majority) of the country.

Google isn’t alone in adopting this approach — it is actually a relative laggard — but now it is trying to help translate the web with this new Google Go feature.

Google said the addition can make website reading just like watching TV or listening to the radio. The feature reads out text in one of 28 supported languages whilst highlighting each word on the page as it goes. The firm said it uses AI to seek out the most important information on a web page, and also to play it back in each language.

There are obvious use cases for activities that pull attention away from reading, such as cooking, but more widely the feature is seen as part of Google Go’s general approach to making information more accessible to those who are relatively inexperienced when it comes to using the internet.

“The new feature is inspired by user research in India, where we heard from people how important it is to understand information effortlessly. Especially for people coming online for the first time, consuming long-form text on a small device can be difficult and time-consuming. With this new feature, you can just press play and follow along,” the company wrote in a statement.

It added that it is looking into ways to add the feature to other Google apps in the future, so stayed tuned.

Google wants to make the transition back into civilian life smoother for U.S. military veterans by adding tools that help them find jobs or promote their businesses.

One new feature is an initiative of Grow with Google, the company’s career development program. It helps veterans discover job openings relevant to the skills they learned while serving by entering the phrase “jobs for veterans” into Google’s search engine along with their military job codes. Employers and job boards can also enable the feature on their own sites by using Google’s Cloud Talent Solution, a machine-learning based job search platform.

In a Google announcement, Matthew Hudson, a Google Cloud program manager and former Air Force civil engineer who served three tours in Iraq and Afghanistan, wrote that veterans often miss out on opportunities because “there isn’t a common language that helps recruiters match a veteran’s experience with the need for their skills and leadership in civilian jobs. As a result, 1 in 3 veterans—of the roughly 250,000 service members who transition out of the military each year—end up taking jobs well below their skill level.”

For veterans who founded, own or lead a business, Google has added a new attribute to help identify them on Google My Business, Google Maps and mobile search listings. In a blog post, Google data scientist and former U.S. Army staff sergeant Sean O’Keefe wrote that more than 2.5 million businesses in the U.S. are majority-owned by veterans. The “Veteran-Led” attribute badge will appear on Google business listings alongside other attributes like “Has Wifi” or “Family Friendly.”

The company also said Google.org, its charity initiative, will grant $2.5 million to the United Service Organizations (USO) to provide IT training, career support and Google Support Professional Certification, a course designed to prepare people for entry-level IT support jobs.

Following last week’s suspension of 284 accounts for “engaging in coordinated manipulation,” Twitter announced today that it’s kicked an additional 486 accounts off the platform for the same reason, bringing the total to 770 accounts.

While many of the accounts removed last week appeared to originate from Iran, Twitter said this time that about 100 of the latest batch to be suspended claimed to be in the United States. Many of these were less than a year old and shared “divisive commentary.” These 100 accounts tweeted a total of 867 times and had 1,268 followers between them.

Since our initial suspensions last Tuesday, we have continued our investigation, further building our understanding of these networks. In addition, we suspended an additional 486 accounts for violating the policies outlined last week. This brings the total suspended to 770.

— Twitter Safety (@TwitterSafety) August 27, 2018

As examples of the “divisive commentary” tweeted, Twitter shared screenshots from several suspended accounts that showed anti-Trump rhetoric, counter to the conservative narrative that the platform unfairly targets Republican accounts.

Fewer than 100 of the 770 suspended accounts claimed to be located in the U.S. and many of these were sharing divisive social commentary. On average, these 100 Tweeted 867 times, were followed by 1, 268 accounts, and were less than a year old. Examples below. pic.twitter.com/LQhbvFjxSo

— Twitter Safety (@TwitterSafety) August 27, 2018

Twitter also said that the suspended accounts included one advertiser that spent $30 on Twitter ads last year, but added those ads did not target the U.S. and that the billing address was outside of Iran.

“As with prior investigations, we are committed to engaging with other companies and relevant law enforcement entities. Our goal is to assist investigations into these activities and where possible, we will provide the public with transparency and context on our efforts,” Twitter said on its Safety account.

After years of accusations that it doesn’t enforce its own policies about bullying, bots and other abuses, Twitter has taken a much harder line on problematic accounts in the past few months. Despite stalling user growth, especially in the United States, Twitter has been aggressively suspending accounts, including ones that were created by users to evade prior suspensions.

Twitter announced a drop of one million monthly users in the second quarter, causing investors to panic even though it posted a $100 million profit. In its earnings call, Twitter said that its efforts don’t impact user numbers because many of the “tens of millions” of removed accounts were too new or had been inactive for more than a month and were therefore not counted in active user numbers. The company did admit, however, that it’s anti-spam measures had caused it to lose three million monthly active users.

Whatever its impact on user numbers, Twitter’s anti-abuse measures may help it save face during a Senate Intelligence Committee hearing on September 5. Executives from Twitter, Facebook and Google are expected to be grilled by Sen. Mark Warner and other politicians about the use of their platforms by other countries to influence U.S. politics.

Byton, the new China-based automaker founded by former BMW and Infiniti executives, has produced the first 10 prototypes of its tech-centric all-electric SUV and some of them will be in the U.S. before the end of the year, company president and co-founder Daniel Kirchert told TechCrunch.

Byton plans to produce another 100 prototypes of the SUV, which the automaker calls the M Byte, by the end of 2018, Kirchert said in recent interview during Monterey Car Week.  Some of these vehicles will be shipped to the U.S., where self-driving vehicle technology startup Aurora will take over.

Aurora, a startup founded by self-driving tech stars Chris Urmson, Sterling Anderson, and Drew Bagnell, will begin testing its Level 4 autonomous driving systems on the Byton SUV prototype before the end of 2018, according to Kirchert. The two companies announced a partnership in January at the big tech trade show CES.

Byton will continue with its own tests such as vehicle reliability and cold-weather testing at its Nanjing prototype manufacturing plant. The plant is built on the site of Byton’s future factory, which is already under construction.

The prototype production milestone comes on the heels of $500 million in fresh funding that was announced in June. The Series B round included investors FAW Group, Tus-Holdings and CATL, which TechCrunch has learned will supply Byton with batteries.

A production version of the M Byte is targeted for the end of 2019, with the first vehicles to be sold in China. Sales will then move to the U.S. and Europe in mid-2020, Kirchert said.

Back when Byton first revealed its SUV concept at CES this January, founders Kirchert and CEO Carsten Breitfeld said it was close to what the final production version would look like. It’s about 80% complete, Kirchert said recently, adding that the prototype has modest changes from the concept, including a slight changes to the height and headlights as well as improvements to the door latches.

The rest, including a massive touchscreen that takes up the entire dashboard, is largely unchanged. the M Byte also has another touchscreen on the steering wheel and a variety of “smart” connected features that lets customers use hand gestures and voice commands via Amazon’s Alexa assistant to control aspects of the car. The vehicle also monitors the driver’s heart rate, weight, oxygen saturation, or blood pressure.

The SUV, which Byton likes to call an SIV or or “smart intuitive vehicle, will come in a base model featuring a 70-kilowatt-hour battery pack that can travel 250 miles on a single charge. A pricier version with a 90-kwH pack will be able to travel about 325 miles on a single charge.

The M Byte SUV will not come equipped with a Level 4 system, a designation by SAE International that means the car takes over all of the driving in certain conditions. Instead, it will have come out with Level 2 capabilities, which means the vehicle has combined automated features such as steering and acceleration, but still requires the human driver to remain and ultimately responsible.

Kirchert explained that the company is using its SUV prototypes to ensure a Level 4 self-driving system, can be properly integrated in future vehicles such as the K Byte, a new concept from Byton that was on display Sunday at Pebble Beach Concours d’Elegance. The sedan will be the second vehicle in Byton’s portfolio and is expected to have a global market launch.

Two weeks ago, Walmart concluded its investments to acquire a majority stake in Flipkart.

This is one of the largest transactions in e-commerce and in the internet space globally, with Walmart deploying US$16 billion to obtain an approximate 77 percent shareholding at closing. As part of this transaction, my company, Naspers, exited fully, selling our 11.18 percent stake for $2.2 billion.

In addition to the obvious financial success — a 3.6x or $1.6 billion absolute return in six years — being part of one of the greatest success stories of the Indian and global e-commerce market led to countless insights for Naspers.

Our journey with Flipkart will help us to further shape how we partner with entrepreneurs to build leading technology companies in the future.

I was fortunate enough to have had a front-row seat at Flipkart for the past six years, leading our various investment rounds and being Naspers’ appointed board director. Here are some of the key lessons that I will remember moving forward.

Pursue big market opportunities and solve big problems

E-commerce is a global trend that manifests in every market around the world. The potential of Indian e-commerce is beyond any doubt, with a total retail market of more than $500 billion. Before Flipkart, Indian e-commerce customers were repeatedly disappointed by mediocre selection, low product quality, little flexibility in payment options and a lengthy delivery experience.

Flipkart was the first player to solve these issues at scale, opening up the marketplace to more categories (starting with media and then rapidly expanding into electronics, lifestyle, etc.), offering warehouse services, and introducing its own courier network, Ekart, that ensured customer delight and cash on delivery. Other players eventually offered similar services, but Flipkart was the pioneer.

Market leadership is key to sustainable success, even in e-commerce, which tends to have “winner takes most” as opposed to “winner takes all” characteristics. Leaders enjoy attention from sellers, buyers, as well as existing and prospective employees. They continue to innovate while laggards are trying to catch up. Throughout our six-year journey with Flipkart, the company was in a market leadership position against strong competition from global and local online players.

Given the rapid growth of the Indian e-commerce market, Flipkart had to scale its tech platforms while also scaling its business model and organization. This is hard to do, and we’ve seen many businesses fail to scale. Flipkart was not one of them.

As a market leader and pioneer in the Indian e-commerce market, Flipkart had to sail unchartered waters. Experimenting while increasing in scale carried significant risk for the organization and had consequences for the market — Flipkart made many bold decisions over the years. Many of these worked out beautifully, such as acquiring Myntra in May 2014 to obtain a strong position in the strategic fashion and apparel category, or establishing Big Billion Day as the marquee sales event of the year.

There were others that did not work out, like trialing app-only shopping, but these failures never deterred the team from taking chances and changing course if needed, while always capturing the lessons. In the end, the app-only move allowed the company to become mobile-centric and a clear innovation leader in this area.

Think globally, but act locally

Flipkart is focused on the Indian market, but the competitive battle for sellers, buyers and talent is fought globally. The team adopted global best practices like Big Billion Day, which was inspired by ideas from the U.S., China and Romania.

They also measure success based on KPIs constantly drawing comparison with global market leaders. Most importantly though, Flipkart always innovated for the local market, taking local tastes into account (as serviced by the multitude of private label brands at Flipkart and Myntra), as well as bandwidth and affordability constraints on the customer side, leading to super-light mobile sites and apps, as well as various trade-in and financing programs.

Play the long game

Despite multi-billion-dollar trading volumes, the current e-commerce market in India is still mostly driven by affluent metro city dwellers in places like Mumbai, Delhi and Bangalore. This is not dissimilar to what we’ve seen in other countries around the world at a similar development stage as e-commerce in India.

However, to really unlock the potential of Indian e-commerce, one has to reach the hundreds of millions of customers that live in tier-two or -three cities, or in the countryside.

This will require a very unique approach in terms of selection, price points and delivery and payment mechanisms. Flipkart management spends a considerable amount of time strategizing about these challenges.

The common thread in all of these lessons is that you need to have strong, inspiring leaders who come from the local market and have the vision and desire to scale their platforms responsibly and skillfully. Whether it was Binny and Sachin as co-founders of the business, or Kalyan, Ananth and Sameer in leading the respective Flipkart, Myntra and PhonePe business units, without these leaders it would have not been possible for Flipkart to grow to what it is today. I’m very grateful for my time with Flipkart and wish the team and Walmart all the best in continuing this incredible journey… a journey made in India.

What if facial recognition could determine your ancestry without the need for 23andme? Come see Kairos show off this feat of artificial intelligence at TechCrunch Disrupt SF next week. We’ll follow up the demo with a fireside chat investigating Kairos’ commitment to not be evil. “Facial recognition-powered government surveillance is an extraordinary invasion of the privacy of all citizens — and a slippery slope to losing control of our identities altogether” CEO Brian Brackeen wrote in a TechCrunch guest post in June.

Founded six years ago, Kairos has been steadily building facial recog to combat bank fraud, secure enterprise software with biometrics, and to create smart contracts so only the right person can collect on a cryptocurrency transaction. Now it’s running a token sale to fund the next stages of its tech development.

But facial recognition is only helpful if it’s exceedingly accurate. That’s what we’ll be testing on stage at Disrupt. “If people take a selfie, it tells them what percentages of different races they are” Brackeen says. That’s a bold claim.

It’s also somewhat worrying. That tech in the wrong hands could power racial discrimination. Even if it’s illegal for businesses to do so, that won’t necessarily stop them if they can make an extra buck or be a jerk to people they hate. Signing pledges and making promises might not be enough.

What can developers making problematic tech do to guarantee it’s not misused? Who should oversee these ethical questions? And are startups any more accountable than giant corporations? Come to Disrupt or watch on the livestream as we get you the answers.