Year: 2020

On the heels of Amazon getting approval from the competition authority to proceed with an investment leading a $575 million round for food delivery startup Deliveroo in the UK, two of Deliveroo’s biggest rivals got their own £6.2 billion merger approved, and they have subsequently picked up an extra $756 million to come out fighting.

Today, the competition watchdog in the UK officially gave a nod to the merger, originally valued at $10 billion but more currently valued at £6.2 billion, between UK’s JustEat and the Netherlands’ Takeaway.com. And along with that, the merged company announced that it had raised €700 million ($756 million) in new outside funding in the form of new shares and convertible bonds.

JustEat and Takeaway had already been respectively trading on the London and Netherlands stock exchanges — on LSE as ‘JET’ and on AMS as ‘TKWY’ — and they said they would use the capital and convertible bond issue to pay down debts, business development and other corporate purposes and potential acquisitions in what remains a very fragmented and crowded market for food delivery in Europe and elsewhere, despite the rapid scaling we’re seeing among some of the biggest players.

Specifically the pair said in their announcement that they would use the money to “partially pay down revolving credit facilities currently utilised by both Just Eat and Takeaway.com, for general corporate purposes as well as to provide the Company with financial flexibility to act on strategic opportunities which may arise.”

The two also noted that the placement is conditional on the two getting successfully admitted to trade as a merged company. They’ve made the application for this and it is expected to become effective on April 27.

The Competition and Markets Authority, meanwhile, noted that its decision was influenced by the fact that Takeaway.com had not been active in the UK market and “we are satisfied that there are no competition concerns.”

“Millions of people in the UK use online food platforms for takeaways and, where a merger could raise competition concerns, we have a duty to rigorously investigate whether customers could lose out. In this case, we carefully considered whether Takeaway.com could have re-entered the UK market in future, giving people more choice,” it said. “It was important we investigated this properly, but after gathering additional evidence which indicates this deal will not reduce competition, it is also the right decision to now clear the merger.”

The moves cap of a turbulent nine months for the two companies, which announced their intention to merge last year to bulk up against pricey competition from Uber Eats, Deliveroo (which itself was getting a huge cash injection and support from the mighty Amazon) and more. After the two announced their intentions to come together, Prosus (the tech holdings of Naspers) also made a protracted, hostile bid for JustEat.

Online food delivery services have been a popular business in the world of tech: three-sided marketplaces bring together restaurants, consumers who would rather stay home but still want to eat restaurant food, and an army of delivery people who largely work as contractors to shuttle between the other two — but their growth has come at high costs.

Heavy competition between a number of firms, and the overall unit economics of on-demand services, have meant that all of them need large sums of cash to grow and often survive while they slowly inch towards profitability. (And those that cannot raise that cash often fall by the wayside or are swallowed up in larger consolidation plays for economy of scale.)

The big question is how the current climate is going to affect that general model. Stay-at-home orders have been a huge boost for businesses that cater to people making transactions virtually, or staying at home; and food delivery services check both of those boxes.

At least in the short term, that has spelled major opportunity for all of them, and the most optimistic believe that even if that outsized surge abates when some of our COVID-19 restrictions get relaxed, it will leave in its place a permanent shift among consumer and business behaviour.

For its part, the CMA noted that “millions” of people in the UK are using take-out services and that it is trying to be more flexible and efficient during COVID-19 to enable more services to people.

“During the COVID-19 outbreak, the CMA is working with businesses where it can to be flexible – for example, by recognising that there may be delays in providing the information it needs to conduct investigations,” it said. “However, it is also trying to complete investigations efficiently at this time, wherever possible, to provide businesses with certainty. In this case, the CMA was able to publish its final decision 26 days ahead of the statutory deadline.”

OneDegree, the Hong Kong-based insurance technology startup, launched its first product today, a line of medical plans for pets called Pawfect Care. The company will introduce other products, including cyber insurance and medical coverage for humans, all available completely online, over the next 12 months.

Founded in 2016, OneDegree raised $30 million in Series A funding last year, and its investors include BitRock Capital, Cyperport Macro Fund and Cathay Ventures.

Co-founder and CEO Alvin Kwock told TechCrunch that it took OneDegree two years to launch Pawfect Care because of the stringent regulatory approval process required to get an insurance license in Hong Kong.

The first two virtual insurance licenses issued by Hong Kong’s Insurance Authority went to companies owned by existing insurance providers (Sun Life’s Bow Tie and Asia Insurance’s Avo), in an effort to encourage more legacy players to go digital. OneDegree was the first independent insurance company to start online to be granted a license.

OneDegree will gradually launch cyber and human medical insurance plans over the next year. Kwock said the COVID-19 pandemic has created a “paradigm shift,” because face-to-face activities have declined dramatically, and the Insurance Authority is now issuing new virtual insurance licenses and allowing more products to be sold online.

The company decided to start with pet insurance because the company estimates that even though there are about half a million pet dogs and cats in Hong Kong, only about 3% of them have medical insurance despite the high cost of veterinary care. OneDegree lets customers buy and manage policies and file claims through a mobile app. It says that about 90% of approved claims will be paid within two working days.

In response to the pandemic, Pawfect Care’s pet insurance includes coverage of medical costs related to COVID-19. OneDegree emphasizes that there have only been a few known cases of pets testing positive for the virus so far and no evidence of them acting as carriers so far, but added the coverage for customers’ peace of mind.

Ford today took the wraps off an electric Mustang prototype. Called Mustang Cobra Jet 1,400, it carries Ford’s long tradition of drag racing the Mustang. But for the first time, a quiet electric power plant is spinning the slicks instead of a roaring V8.

This one-off prototype is said to hit mid-eight second quarter-mile times thanks to 1,400 HP and 1,100 ft.-lbs of torque. That’s on par with numbers put up by Ford’s 2018 Cobra Jet equipped with a supercharged 5.2L engine.

Ford has yet to reveal any technical information about the electric Cobra Jet’s motors, batteries, tires, or range.

Such prototypes are critical to Ford’s electric strategy that includes producing an electric SUV under the Mustang brand. Many have criticized Ford for expanding the Mustang family to include the Mach-E electric SUV as the Mustang has always been a two-door sports car. With this electric Mustang drag racer, Ford is seemingly telling the automotive world that it sees electric motors and batteries as a viable future for the Mustang brand.

This electric Cobra Jet could be a shot across the bow of Tesla and Porsche. The original 1968 Ford Mustang 428 Cobra Jet is widely considered the most powerful muscle car of the era, outclassing everything from General Motors and Chrysler. Right now, in 2020, Tesla and Porsche offer the most powerful and fastest electric cars outside of electric exotics, and this prototype is seemingly telling them to check their rearview mirrors because Detroit is serious about electric cars.

The original Cobra Jet debuted in 1968 and dominated drag strips across the United States. A person could walk into a Ford dealership and leave with a vehicle capable of besting most modified Cameros, GTOs, and Road Runners. Ford revived the Cobra Jet in 2008 and has since released limited-run versions every few years. Most are not road legal. These are cars designed to do one thing: go fast in a straight line. And now, with the 1,400 HP electric Mustang Cobra Jet, it’s designed to do two things: Go fast and show the world batteries can be fun, too.

Challenger bank Bunq has revamped joint accounts to give you more flexibility. If you’re a premium users (ie not just a Bunq Travel customer), you can create a sub-account with someone else who’s not a premium user for €2.99 per month. Bunq also lets you create multiple sub-accounts, meaning that you can have an account with your partner, another one with your kid, etc.

The feature is called Bunq +1 and is different from traditional Bunq sub-accounts. With Bunq +1, you can invite someone who isn’t already a Bunq user and share an account with them. They don’t have to pay €7.99 for a Bunq Premium subscription. The main Bunq account holder pays €2.99 per month for each +1 account.

After that, you can both deposit money, view transactions and spend money. Each user gets their own Bunq card. This feature can be particularly useful for parents who want to manage allowance on Bunq. The parent could instantly transfer money from their main account to the +1 account — they can view transactions at all time. The kid could spend money with a Bunq card.

If you’re trying to share an account with an existing Bunq Premium user, you can create a sub-account and share it. Each user will have a full-fledged Bunq account with their own personal account. They’ll also have a shared sub-account with its own IBAN.

Of course, you both have to pay €7.99 per month for a Bunq Premium subscription. Bunq Premium users can create up to 25 sub-accounts for free.

Business customers can also leverage Bunq +1 to hand out corporate cards to their employee. Each employee could have their own +1 account with their own card. Businesses could then manage expenses and top up accounts.

French startup Doctolib is sharing some metrics on its video consultation feature. While the startup first started as a way to help doctors manage appointments and let them accept online appointments, the company has been taking advantage of its huge community of health professionals to add video consultations on top of that.

Since the start of the COVID-19 pandemic, users have booked 2.5 million online appointments in France and Germany. More than 31,000 physicians offer video consultations and 872,000 patients have used the service at least once over the past five weeks.

Usually, Doctolib charges practitioners a monthly fee to access the service and use it to replace their calendar. Practitioners can choose to pay an additional €79 per month ($90) on top of their standard Doctolib plan to start accepting remote appointments.

During the epidemic, the startup has chosen to waive video consultation subscription fees. It’s the right thing to do, but it’s also a great way to convince more practitioners to start accepting remote appointments.

The result is explosive growth. Doctolib jumped from 1,000 to 100,000 video consultations per day in just a month. The good news is that it isn’t just for young people — 28% of users who book an online appointment are 55 years old and beyond.

Those appointments comply with France’s national healthcare system. Patients get reimbursed just like a normal appointment. But there are some legal restrictions. Usually, you can’t book a remote appointment and get reimbursed if the doctor doesn’t know you already.

But that restriction has been lifted during the lockdown. Let’s see if the momentum will hold when the national healthcare system puts back some limits on video consultations.

While some U.S. investors might have taken comfort from China’s rebound, we still find ourselves in the early innings of this period of uncertainty.

Some epidemiologists have estimated that COVID-19 cases will peak in April, but PitchBook reports that dealmaking was down -26% in March, compared to February’s weekly average. The decline is likely to continue in coming weeks — many of the deals that closed last month were initiated before the pandemic, and there is a lag between when deals are made and when they are announced.

However, there’s still hope. A recent report concluded that because valuations are lower and there’s less competition for deals, “the best-performing vintages tend to be those that invest at the nadir of a downturn and into the early stage of recovery.” There are countless examples from the 2008 recession, including many highly valued VC-backed businesses such as WhatsApp, Venmo, Groupon, Uber, Slack and Square. Other early-stage VCs seem to have arrived at a similar conclusion.

Also, early-stage investing seems more resilient. During the last recession, angel and seed activity increased 34% as interest in the stage boomed during a period of prolonged growth.

Image Credits: PitchBook (opens in a new window)

Furthermore, there is still capital to be deployed in categories that interested investors before the pandemic, which may set the new order in a post-COVID-19 world. According to data provider Preqin Ltd., VC dry powder rose for a seventh consecutive year to roughly $276 billion in 2019, and another $21 billion were raised last quarter. And looking at the deals on the early-stage side that were made year to date, especially in March, the vertical categories that garnered the most funding were enterprise SaaS, fintech, life sciences, healthcare IT, edtech and cybersecurity.

Image Credits: PitchBook

That said, if VCs have the capital to deploy and are able to overcome the obstacle of “having never met in person,” here are six investment trends that could emerge when the pandemic is over.

1. Future of work: promoting intimacy and trust