Year: 2021

While Madrid and Barcelona tend to attract the buzz when it comes to tech startups in Spain, Valencia is slowly and surely making a name for itself as a growing tech ecosystem.

The country’s third-largest city, Valencia features great beaches, sunny weather all year, and affordable housing and healthcare. And with a population of only around a million people, it’s a little more manageable compared to its bigger cousins.

The city also topped the InterNations Expat City Ranking 2020 as one of the best cities for expats to settle in. What’s more, it produces plenty of talent — about 25,000 bachelor’s and masters degrees are issued in the city every year.

So to find out what the startup scene in Valencia looks like, we spoke with eight local investors, executives and founders. The city appears to be strong in areas such as travel, AI, cybersecurity, fintech, agritech, travel tech, biotech, sports tech, and VR. The blockchain/crytpo scene could do with some improvement, according to a few respondents.

The city’s investment scene is not particularly large and most investors focus on seed funding, but it’s growing as family-owned companies, and individual and institutional investors turn to tech. BIGBAN is a private nonprofit angel investor network based in Valencia, and incubators and accelerator programs continue to proliferate, supported by corporates and local government initiatives such as Startup Valencia.

Notable startups in the city include Streamloots, Voicemod, Jeff, Beroomers, Flywire and Blinkfire Analytics.

We surveyed:

• Luz Adell, CFO/partner, Draper B1
• Jordi Díaz Maiquez, CEO, Play&go experience
• Helena Ortiz Gil, CMO, Techer Team
• Patricia Pastor, director, GoHub
• Fernando Marzal, VP of New Business, Jeff
• Enrique Penichet, founding partner, Draper B1
• Javier Moliner Urdiales, CEO, Howlanders
• Jorge Soriano Lázaro, CEO, Criptan

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Luz Adell, CFO/partner, Draper B1

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Key sectors include fintech, agritech and travel tech.

Which are the most interesting startups in your city?
Streamloots, Criptan, Voicemod, Boatjump, Zeleros, WiTraC and Sales Layer.

What are the tech investors like in Valencia? What’s their focus?
The Valencia investor scene is growing. There are more family-owned companies, and individual and institutional investors, and they have also invested capital. We have some of the top incubators and accelerator programs in Spain. BIGBAN, a private nonprofit angel investor network based in Valencia, is building and developing one of the most dynamic and active investor communities in Spain.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
People will stay or move in to the city. Expats and digital nomads prefer moving to Valencia.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Startup Valencia, BIGBAN, Lanzadera, Plug and Play, GoHub, Angels Capital, Demium, Tbig Advisory, KM Zero, BioHub and Draper B1.

Where do you think the city’s tech scene will be in five years?
Valencia is becoming a pole of attraction for companies and talent thanks to an ecosystem in continuous evolution, with a clear entrepreneurial mindset.

Jordi Díaz Maiquez, CEO, Play&go experience

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Tourism.

Which are the most interesting startups in your city?
Zeleros.

What are the tech investors like in Valencia? What’s their focus?
Demium, and GoHub for deep tech.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
People will stay or move in.

Where do you think the city’s tech scene will be in five years?
Much better than now.

Helena Ortiz Gil, CMO, Techer Team

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Virtual reality is strong and exciting. Blockchain could be improved.

Which are the most interesting startups in your city?
Techer Team and some Lanzadera projects.

What is the investing scene like in Valencia? What’s the investors’ focus?
It could improve.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
Most people stayed back.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Lanzadera, Valencia Activa, Demium and GoHub.

Where do you think the city’s tech scene will be in five years?
I hope it improves.

Patricia Pastor, director, GoHub

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Water, industry, smart city tech.

Which are the most interesting startups in your city?
Fivecomm, Sales Layer, Quibim, Jeff and Voicemod.

What are the tech investors like in Valencia? What’s their focus?
GoHub for B2B in AI, 5G, cybersecurity and sustainability.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
We’ll see hundreds of remote workers.

Where do you think the city’s tech scene will be in five years?
In the top 15.

Fernando Marzal, VP of New Business, Jeff

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Day-to-day services.

Which are the most interesting startups in your city?
Flywire, Streamloots, Voicemod, Blinkfire and Demium.

What is the tech investment scene like in Valencia? What’s investors’ focus?
Seed investors.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
Stay. Valencia is one the better places to work thanks to weather, city size, beach, etc.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Startup Valencia Association.

Where do you think the city’s tech scene will be in five years?
One of the main startup cities in Europe.

Enrique Penichet, founding partner, Draper B1

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Valencia’s tech ecosystem is strong on providing tech talent. There are a lot of people with capabilities in AI and cybersecurity. Because of this some corporate accelerators are growing strong here, mainly in fintech, such as Bankia Fintech.

We have a unicorn in fintech Flywire, and a foreign fintech scaleup, Creditas (from Brazil), has established their HQ here. We also have some good startups in fintech growing here such as Criptan, Colectual or The Logic Value.

Valencia has also been traditionally strong in video gaming. ESAT, a globally recognized academy located here, provides great talent, and mainly due to this, we have some successful startups such as Voicemod or Streamloots in the gaming industry. In fact, one of the major gaming events in Spain and Europe, Dreamhack, is held in Valencia.

Due to Lanzadera, together with Station F, one of the biggest accelerators in Europe is located in Valencia, and there are now startups growing in all verticals.

Which are the most interesting startups in your city?
Flywire, Jeff, Streamloots, Voicemod, Criptan, Cronoshare, Quibim, Cuidum and Gokoan.

What are the tech investors like in Valencia? What’s their focus?
Most investors are business angels and early-stage investors. Draper B1, Angels Capital, Zriser, and Keith VC.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
Both things are happening, Valencia is a nice place to work, near the Mediterranean Sea. It was recognized by Bloomberg as the No. 1 city in the world to work. So, many people are coming here to work remotely. At the same time, some people are leaving to work from the countryside.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Accelerators and founders.

Where do you think the city’s tech scene will be in five years?
A bunch of companies from Valencia have closed Series A rounds. Hopefully, in five years it will be commonplace to see some Series B or C or D happening. Right now, probably only Flywire has accomplished that.

Javier Moliner Urdiales, CEO, Howlanders

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
E-commerce, travel and Industry 4.0.

Which are the most interesting startups in your city?
Howlanders, Jeff, Airhopping, Landbot and WiTraC.

What are the tech investors like in Valencia? What’s their focus?
Focus on seed. Already some years of experience, mainly BA, small VC or crowd.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
People will move in due to quality of life, low costs, the location and local government support.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Javier Megias and Juan Roig.

Where do you think the city’s tech scene will be in five years?
Bigger, stronger, totally international community thanks to new arrivals (startups and remote workers), more national or international VCs managed locally from Valencia.

Jorge Soriano Lázaro, CEO, Criptan

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Cryptocurrencies, or using crypto.

Which are the most interesting startups in your city?
Balio.

What are the tech investors like in Valencia? What’s their focus?
Draper B1.

With the shift to remote working, do you think people will stay in Valencia, or will they move out? Will others move in?
Yes, people are staying here. We were working remotely since the beginning.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Draper B1, Enrique Penichet and Signne.

Where do you think the city’s tech scene will be in five years?
One of the most innovative in Europe.

Heaven knows what will happen to the mental health of children who’ve gone through this past year but if there’s one thing we need right now it’s mental health provision for young people that can scale. And as much as some of us can’t bear the thought of another video call, a UK startup reckons it’s come up with the magic formula for online therapy for children.

Now, Healios has raised a £7 million ($10M) Series A round to expand its platform across the UK. If the roll-out is successful, the startup is looking at expanding internationally. The round was led by InHealth Ventures with participation from existing investors AlbionVC.

Healios will use the funding to expand its AI, machine learning, and data science expertise, as well as add to the team. Healios says its platform digitises the clinical pathway, enabling children, adults, and their family members to use clinical services at home.

According to UK government statistics, one in eight (12.8%) five to 19-year-olds in the UK have a mental health disorder but two-thirds are unable to access NHS care because of soaring demands. And the Covid-19 pandemic has made things worse.

Launched in 2013, Healios says it has now worked with 65% of NHS Mental Health Trusts, with 70,000 specialized clinical sessions delivered, which is a high success rate for a startup, considering how hard it is to get NHS approval.

The online, family-focused therapy program for young people zeros in on psychosis and schizophrenia. Healios says that studies have shown involving family members from the start can reduce suicide by as much as 90%. It also covers anxiety, low mood, autism and ADHD, as well as support to their families.

Unlike some startups in the area of mental health, Healios is not a marketplace of advisers but is an end-to-end provider of these services.

InHealth Ventures and InHealth Group Chair, Richard Bradford, will be joining the Healios board, alongside Cat McDonald of AlbionVC.

Rich Andrews, Founder, and CEO of Healios, said: “This funding will help us reach more families in need and enable us to develop further sector-leading interventions and therapies. By bringing together clinical experts and giving them the tools to reach their patients regardless of where they are, we are closing the access gap which has plagued mental health provision for far too long.”

Andrews also told me: “A young person will have an initial mental health assessment with us. If needed, we’ll make a diagnosis and then they’ll move on to other interventions with us, so this is a seamless experience.”

Dr Ben Evans, Managing Director of InHealth Ventures, said: “Healios is a standard-bearer for healthcare innovation. They bring together clinical excellence with digital expertise, working in partnership with the NHS to address a critical, but complex area of care delivery. Healios’ work to date speaks for itself; their holistic approach to diagnosis and treatment has had a substantive impact on clinical outcomes and patient experience.”

Cat McDonald, Investor at AlbionVC, added: “Covid has engendered a pace of innovation previously unseen in healthcare. In particular, we have seen that remote care not only works, but often works much better than traditional alternatives. The option to receive care remotely, at home and in a family-centric setting is the strong preference of most kids suffering from poor mental health.”

French startup Back Market — a marketplace for refurbished electronics goods — has raised a $335 million Series D funding round led by General Atlantic. Today’s funding round values the startup — which says it now has 5 million customers globally — at $3.2 billion, the company said. It will be using the funding to expand into new markets.

At a time when mobile phone makers are seeing declines in sales due to slower renewal cycles, and incrementally fewer features added into newer models, Back Market provides another alternative to people who don’t want to pay full price for a device that might still be in good condition and new to the user, if not altogether new itself.

Consumers can buy refurbished smartphones at different price points, with the stock ranging from old models through to recently released devices. Prices vary depending on the model and the condition of the device. Other stock includes laptops, tablets, headphones, gaming consoles, and other gadgets and consumer electronics.

The company is also part of what you might more generally call the circular economy, where people are recycling items back into the sales market to extend their life.

Used good sales are of course nothing new, but in more recent years the vast availability of new and cheap goods has taken consumers out of the habit of thinking of used as having much attraction or value — witness sites focused on used goods like eBay now quite dominated by new items. However, the concept has picked up steam and credibility again in the past year of pandemic living, a time when people are looking to save money, with many thinking of the part they play in this world of ours, possibly helping to put a little less of our plastic and other waste into it.

“Our goal now goes beyond making renewed tech a viable option,” Back Market’s CEO, Thibaud Hug de Larauze, said in a statement. “We want to make it the first choice for electronics purchases. The support and confidence of these prominent funds, together with our growing customer base, marks an important step in Back Market’s journey, and more importantly for the refurbished sector as a whole.”

All the same, he estimates that new device sales is a $1.5 trillion market globally. In other words, the opportunity is big (so much to disrupt!) but also quite formidable, all the reason why those focusing on used goods as a big business are trying to up their quality game, as Back Market is doing.

The environmental aspect was one of the reasons for Generation Investment Management in this round: the firm co-founded by Al Gore invests with an ethos of sustainability.

“Back Market’s transparent and trusted approach empowers consumers to change their purchasing behavior by making it easier, safer and more affordable to buy refurbished goods,” added Shalini Rao, Director of Growth Equity, Generation Investment Management, in a statement. “We look forward to supporting Back Market as it doubles down in the US and elsewhere globally. The world generates over 50 million tonnes of electronic waste each year. Back Market offers an alternative that has the potential to radically shift unsustainable consumption patterns.”

Back Market doesn’t refurbish devices directly. Instead, third-party companies act as the sourcing partners for Back Market. They list their inventory on the marketplace and find customers more easily. That is in essense the “marketplace” of Back Market (which is not a black market after all but just a play on the idea). Overall, 1,500 companies sell devices on the platform.

Generation Investment Management also participated in today’s funding round as well as existing investors Goldman Sachs Growth Equity, Aglaé Ventures, Eurazeo and daphni.

Back Market also invests heavily in merchant services, parts sourcing and quality control. The idea is that you should be sure the device is going to work as expected if you buy it through Back Market.

The company claims that the overall defective rate of products is now sitting at 5% — there’s a defect warranty included with each purchase.

While Back Market originally started in Europe, it is now active in 13 different markets including the U.S. and Japan. Up next, the startup plans to launch in Canada, Greece, Sweden and Slovakia.

“We are excited to support Back Market, a category-defining business which is re-shaping and growing the refurbished electronics market globally,” said Chris Caulkin, Managing Director and Head of Technology for EMEA, General Atlantic, in a statement. “Back Market has built a strong consumer brand centered around quality, sustainability, convenience and affordability. We look forward to working with Thibaud, Quentin, Vianney and the full Back Market team as they accelerate their expansion into new categories and geographies.”

BukuKas, a startup focused on digitizing Indonesia’s small businesses, has raised $50 million in Series B funding. The round included participation from Gokul Rajaram, the DoorDash executive, and Taavet Hinrikus, co-founder and chief executive officer of TransferWise.

This news comes just four months after BukuKas announced a $10 million Series A led by Sequoia Capital India. BukuKas will use its Series B to hire for its engineering and product teams in Jakarta and Bangalore, and launch new services for merchants.

“We’ve been growing really fast and there was a lot of interest from some very good people,” chief executive officer Krishnan Menon told TechCrunch. “This is not a capital-need based raise, but more of a tactical raise and having the right people back us long term.”

BukuKas was founded by Menon and chief operating officer Lorenzo Peracchione, who met while working at Lazada Indonesia. Since its launch as as a digital bookkeeping app in December 2019, BukuKas has added new features, including online payments and an e-commerce platform. The app has onboarded about 6.3 million businesses so far and now has a total of 3 million monthly active users. It claims its annualized bookkeeping transaction volume is $25.9 billion USD, or the equivalent of about 2.2% of Indonesia’s gross domestic product.

According to Bank Indonesia, the country’s central bank, there are about 60 million SMEs, though Menon says that number may range from 55 million to 65 million. The majority still operate mostly offline, but the push to digitization began even before the COVID-19 pandemic. For example, the Indonesian government launched a program two years ago with marketplace Blibi to encourage more businesses to sell online, with the goal of helping more SMEs go global.

This means there is a growing roster of startups and services focused on helping small businesses go online. These include Y Combinator-backed BukuWarung, WarungPintar, Grab’s Mitra GrabKios and wholesaler-focused CrediBook. India-based Khatabook, another Sequoia Capital India portfolio company, launched BukuUang in Indonesia, but has since pulled out of the market.

“There’s obviously a macro shift that’s happening in the market right now. People are rushing to get digitized and people are coming out of a rough year. They started to realize ‘I need to upgrade,’ so there’s a rush to get digitized, to manage their money better, a movement to digital payments,” said Menon.

BukuKas’ goal is to become an end-to-end software stack for micro, small and medium enterprises and serve 20 million MSMEs by the end of 2022, with inventory management, invoicing, payment-related analytics and other tools. The company recently took several steps toward that goal. In April, it launched BukuKasPay for business owners to pay suppliers online or accept digital payments, including virtual bank accounts and e-wallets like OVO, Dana, GoPay, LinkAja and ShopeePay from customers. In September 2020, it acquired a digital ledger app called Catatan Keuangan Harian to expand its market share before launching an e-commerce platform called Tokko that enables MSMEs to set up online shops. About 1.3 million merchants have created shops using Tokko in the six months since its release.

Tokko focuses on merchants who find big marketplaces, like Tokopedia, too complicated, and want an alternative way to set up an online brand.

BukuKas’ users include warungs (small stores), fashion retailers, electronics stores, social commerce sellers and service providers. On average, its users make several thousand U.S. dollars per month in revenue, but some earn as high as tens of thousands of dollars.

The app is designed to work as a layer on top of WhatsApp. For example, many merchants allow customers to buy on credit, so they can use BukuKas to send automatic reminders through WhatsApp with a payment link. Businesses can also send invoices or take Tokko orders through WhatsApp. Menon said since many Indonesian merchants already relied on WhatsApp to communicate with suppliers and customers, this helps it onboard more users because they don’t have to make major changes to their operational routines. It also creates viral loops, as other businesses get payment reminders or invoices sent through BukuKas, and decide to try the app, too.

“Our thesis is very similar to what Square or Shopify did in the U.S. We keep merchants as the center of the universe, and we keep building solutions for them,” Menon said. “That can be software-related solutions like BukuKas’ early version and Tokko moving further into commerce. We’re moving further into banking solutions, so payments come first, and then actually building out the full banking suite. The end goal is if a merchant five years from now looks back and says, thanks to BukuKas I was able to adapt to the digital era, and sticks with us.”

Transport for London and London Councils have announced Dott, Lime and Tier Mobility as the winners of its prized e-scooter pilot, confirming last month’s suspicions based on job postings by the companies. 

Last year, the government legalized e-scooter rental trials by local authorities, although private e-scooter riding is still illegal. This legislation spurred the launch of TfL and London Council’s open and competitive procurement process for viable operators. The pilot, which will run for up to 12 months, will begin June 7 in some of London’s boroughs, Canary Wharf and the City of London. More neighborhoods expected to join as the year progresses, according to TfL. Lambeth and Southwark are also seeking participation. 

Rides can only begin and end in participating neighborhoods, which will designate parking bays for the scooters that are enforced by operators’ geofencing capabilities. However, riders will be able to move freely across these boroughs and “ride-through areas,” which thus far only appears to be Tower Hamlets. Between 60 and 150 e-scooters will be available to rent in each participating borough. Tfl will gradually let operators that demonstrate strong compliance add scooters. Those that don’t comply could have their scooter numbers reduced. 

Safety and data sharing are core requirements for the participating scooter companies. TfL hopes to be able to use data shared by the operators to help London and the United Kingdom shape future policy on e-scooters and investigate them as a viable option for London’s sustainable recovery from the pandemic. London’s mayor has set a goal of being a zero-carbon city by 2030, so green forms of mobility that decrease reliance on ICE vehicles is essential. 

“We’re doing all we can to support London’s safe and sustainable recovery from the coronavirus pandemic and it’s clear that e-scooters could act as an innovative, greener alternative to car trips,” said Helen Sharp, TfL’s e-scooter trial lead in a statement. “This new trial will provide the data and insights we need to determine the longer-term role e-scooters could play in our strategy for a greener and healthier future for London.”  

TfL outlined the following safety requirements for scooters: 

• A lower maximum speed of 12.5mph; 
• Lights at the front and the rear of the vehicles that are always on throughout any rental;  
• Audible warning systems that can be used without adjusting the rider’s grip of the handlebar;
• ‘First-ride policies’ requiring new users to take an e-learning safety course;
• Rules against riding on sidewalks. 

As with all governing city bodies, street clutter is of particular importance to London. Aside from strict geofencing regulations, there will also be a mandatory response time for operators in cases where vehicles have been improperly parked, are damaged or are causing an obstruction, according to TfL. 

“The safety of those using e-scooters, as well as other road users and pedestrians, is absolutely paramount, so it’s important that they are trialled in this rigorous way to ensure high standards,” said Will Norman, London’s walking and cycling commissioner, in a statement. 

Dott, Lime and Tier will set their own rental pricing, but they’ll need to be mindful of the needs of essential workers and those with lower incomes by offering appropriate discounts. Lime already offers its Lime Access Program in operating cities, which provides 50% off rides to those on public assistance and workers who have been most affected by the pandemic. 

After Lime’s recent win of New York and Paris, the company, which can be found slinging rides for electric scooters, bikes and mopeds in over 130 cities across Europe, the Middle East and the United States, is merely cementing its big city dominance. With its ongoing e-bike operations in London, the company was a shoe-in. 

Berlin-based Tier Mobility, which also operates in Paris, is the second heaviest hitter. Its recent expansion into Kraków, Poland marked its 100th city, and the company plans to extend courage in Europe, the Middle East and new markets, as well as add e-bikes to its fleet. 

In addition to e-scooters, Tier will be bringing its rider-swappable battery business to London, allowing riders to exchange batteries at charging stations hosted in local businesses across London. This would allow riders to earn free trips in the process while bringing increased footfall for businesses trying to recover from the pandemic. Additionally, having this crowdsourced approach has the potential to reduce congestion associated with collection and transporting e-scooters to a warehouse for charging . 

As seems to be the case with these metropolitan scooter deals, there’s always one promising underdog. In the case of London, that’s Amsterdam-based Dott, which recently raised $85 million in a Series B, and operates in about 20 cities in Europe. London will be Dott’s first city in the U.K. 

Canoo, the Los Angeles-based electric vehicle startup that debuted on the Nasdaq public exchange earlier this year, is being investigated by the U.S. Securities and Exchange Commission, just months after its merger with special purpose acquisition company Hennessy Capital Acquisition Corp.

The investigation is broad, covering the Hennessy’s initial public offering and merger with Canoo, the company’s operations, business model, revenues, revenue strategy, customer agreements, earnings and other related topics, along with the recent departures of certain of the company’s officers, according to a quarterly earnings report posted Monday. Canoo learned of the investigation on April 29. Canoo’s share price fell more than 3% in after-hours trading following the release of its first-quarter earnings.

“The SEC has also informed the Company that the investigation does not mean that it has concluded that anyone has violated the law, and does not mean that it has a negative opinion of any person, entity or security. We intend to provide the requested information and cooperate fully with the SEC investigation,” Canoo noted in the regulatory filing. Canoo added that it does not consider the investigation or other lawsuits it is facing to be material to its business.

The SEC investigation follows a string of executive departures, a change to some of the core pieces of its business model, the loss of a key automotive partnership and at least one lawsuit brought by shareholders. And that’s just the activity since the first of the year.

Canoo started as Evelozcity in 2017, founded by former Faraday Future executives Stefan Krause and Ulrich Kranz. The company rebranded as Canoo in spring 2019 and debuted its first vehicle several months later. It was this first vehicle, as well as Canoo’s plan to offer it only as a subscription, that captured the attention of investors, companies and the media. Last year, Hyundai announced a partnership with Canoo to co-develop EVs, but that deal fell apart in early 2021 after the company changed its business model and decided to not offer engineering services to other automakers, according to comments made by the company’s chairman and now CEO Tony Aquila in a March investors’ call.

Canoo has sustained numerous executive departures, including co-founder and CEO Kranz, general counsel Andrew Wolstan, CFO Paul Balciunas and its head of powertrain development. Krause, who was the company’s first CEO, stepped down in August 2019. Last month, Canoo was also named as a defendant in two class-action complaints filed by shareholders.

Amid the executive exits and business pivots, the company has managed to narrow its quarterly losses despite an increase in R&D expenditures and no revenue. The company reported Monday a net loss of $15.2 million, or 7 cents a share, in the first quarter, compared to a loss of $30.9 million, or 37 cents a share, in the same period last year. The company said it ended the quarter with $641.9 million in cash and equivalents.

Canoo, the Los Angeles-based electric vehicle startup that debuted on the Nasdaq public exchange earlier this year, is being investigated by the U.S. Securities and Exchange Commission, just months after its merger with special purpose acquisition company Hennessy Capital Acquisition Corp.

The investigation is broad, covering the Hennessy’s initial public offering and merger with Canoo, the company’s operations, business model, revenues, revenue strategy, customer agreements, earnings and other related topics, along with the recent departures of certain of the company’s officers, according to a quarterly earnings report posted Monday. Canoo learned of the investigation on April 29. Canoo’s share price fell more than 3% in after-hours trading following the release of its first-quarter earnings.

“The SEC has also informed the Company that the investigation does not mean that it has concluded that anyone has violated the law, and does not mean that it has a negative opinion of any person, entity or security. We intend to provide the requested information and cooperate fully with the SEC investigation,” Canoo noted in the regulatory filing. Canoo added that it does not consider the investigation or other lawsuits it is facing to be material to its business.

The SEC investigation follows a string of executive departures, a change to some of the core pieces of its business model, the loss of a key automotive partnership and at least one lawsuit brought by shareholders. And that’s just the activity since the first of the year.

Canoo started as Evelozcity in 2017, founded by former Faraday Future executives Stefan Krause and Ulrich Kranz. The company rebranded as Canoo in spring 2019 and debuted its first vehicle several months later. It was this first vehicle, as well as Canoo’s plan to offer it only as a subscription, that captured the attention of investors, companies and the media. Last year, Hyundai announced a partnership with Canoo to co-develop EVs, but that deal fell apart in early 2021 after the company changed its business model and decided to not offer engineering services to other automakers, according to comments made by the company’s chairman and now CEO Tony Aquila in a March investors’ call.

Canoo has sustained numerous executive departures, including co-founder and CEO Kranz, general counsel Andrew Wolstan, CFO Paul Balciunas and its head of powertrain development. Krause, who was the company’s first CEO, stepped down in August 2019. Last month, Canoo was also named as a defendant in two class-action complaints filed by shareholders.

Amid the executive exits and business pivots, the company has managed to narrow its quarterly losses despite an increase in R&D expenditures and no revenue. The company reported Monday a net loss of $15.2 million, or 7 cents a share, in the first quarter, compared to a loss of $30.9 million, or 37 cents a share, in the same period last year. The company said it ended the quarter with $641.9 million in cash and equivalents.

Per a recent report by Bain & Co., e-commerce is expected to grow to $28.5 billion in MENA by 2022 from a 2019 value of $8.3 billion. Egypt, one of the most active e-commerce countries in the region, is anticipated to grow 33% annually to reach $3 billion by 2022.

But for any e-commerce business to thrive, its last-mile delivery arm has to be well figured out. Bosta is one such company in Egypt helping small businesses with logistics and last-mile delivery. Today, the company is announcing it has closed a Series A investment of $6.7 million. U.S. and Middle East VC firm Silicon Badia led the round, with participation from 4DX Ventures, Plug and Play Ventures, Wealth Well VC, Khwarizmi VC, as well as other regional and global investors. 

This investment comes a year after the company raised a $2.5 million round, which takes its total investment raised to $9.2 million.

Bosta was launched in 2017 by Mohamed Ezzat and Ahmed Gaber. The company offers next-day delivery to customers and handles exchange shipments, customer returns and cash collection.

The idea for Bosta came during Ezzat’s time at Lynks, his previous consumer goods startup. Lynks, the first YC-backed company from Egypt, allows people in Egypt to buy brands from the U.S., China and the U.K.

As co-founder and COO at Lynks, Ezzat was responsible for logistics, international clearance and last-mile delivery. In 2016, Egypt experienced an economic downturn coupled with the Egyptian pound devaluation and government restriction on imports. For Lynks it meant slow growth, but Ezzat was concerned about fixing the last-mile delivery bit, which, according to him, was a huge pain point.

“My nightmare was always the last mile. And at that time, you know that e-commerce is still very, very small. So it’s only 1% of the whole retail value,” he told TechCrunch. “So I was always thinking, how come if we want the e-commerce to grow, and we don’t have any strong company when it comes to last-mile because, in the end, every transaction on an e-commerce platform is a transaction on a courier platform.”

E-commerce is a fragmented sector where 80% of transactions come from small businesses selling on Facebook, Instagram and social media in general. Most of these businesses lack a strong delivery experience, and Ezzat left Lynks the following year to start Bosta. 

Being in the parcel delivery industry, Bosta wants to help these companies to grow profitably. It also tries to simplify logistics and allow its customers to have full control over the delivery process.

“You can use Bosta to get anything to your doorstep. You buy in our local currency, and we buy everything, handle the shipping, customs, clearance and bring it to your doorstep,” the CEO added.

The company doesn’t own fleets of vehicles to carry out operations. Instead, it operates an Uber-like model where drivers sign up, are made contractors and make money when a delivery is completed.  

Since 2017, the company has delivered more than 4 million packages to businesses, more than half since the pandemic outbreak last year. Bosta completes more than 300,000 deliveries per month, which is a 3.5x increase from when it raised its previous round, Ezzat stated. He also claims that more than 2,200 businesses use its platform daily and achieve a 95% delivery success rate.

Asides from small businesses, Bosta works with major e-commerce platforms like Souq (an Amazon company) and Jumia. Depending on the volume of goods transported, Bosta charges small businesses about 35-40 Egyptian pounds, while the big players are charged less, at 20-25 Egyptian pounds.

Speaking on the investment, Fawaz H Zu’bi said in a statement: “E-commerce has always had amazing potential in our region but was always being held back by something whether payments, logistics, market fragmentation, or customer adoption. We are excited to finally see companies like Bosta emerge to tackle some of these issues and help e-commerce realize its full promise and potential in a region that has now ‘turned on’ digitally.”

In the next two years, Bosta plans to deliver more than 15 million parcels in Egypt and serve over 20,000 businesses. The funds will be used for those causes, as well as expanding operations across Africa, MENA and the GCC.

“The investment is to dominate Egypt,” said Ezzat. “We want to make sure that we deliver the next day across Egypt, not just in Cairo, where we currently do. And to be a market leader when it comes to e-commerce on the continent and be profitable. This is the main target for us now and also to start operations in Saudi Arabia.”

Digital health in the U.S. got a huge boost from COVID-19 as more people started consulting physicians and urgent care providers remotely in the midst of lockdowns. So much so that McKinsey estimates that up to $250 billion of the current healthcare expenditure in the U.S. has the potential to be spent virtually. The prominence of digital health is undoubtedly here to stay, but how it looks and feels from provider to provider is still a debate among sector startups.

But for providers who want to deliver care virtually across the country, it’s not as simple as adding a Zoom invite to an annual check-up. The process requires intention every step of the way — right from the clinicians delivering remote care to the choice of payment processor.

Providers and healthcare startups can choose white-label solutions such as publicly-listed Teladoc and Truepill, which have been around for a long time, and have powered the operations of unicorns like Hims and Hers, Nurx, and GoodRx as they look to scale in a compliant but efficient manner.

Turnkey solutions might be tempting to companies looking to take advantage of this opportunity, but startups still have to decide what to outsource and what to build. Should you rely on others for staffing your practice? Do you build your own payment processing service in-house? Do you integrate with Zoom or build your own video-conferencing software? These questions are crucial to think about early on to prepare for future scale regardless of whether a startup is B2B or B2C.

More than just Zoom

SteadyMD, which in March raised a $25 million Series B led by Lux Capital, wants to be the infrastructure layer that makes it easier for other companies to offer telehealth services. It is hoping to address a pain point it ran into years earlier: The complexity of launching compliant telehealth services in all 50 states.

The company launched in 2016 with the intent to provide high-quality, virtual primary care for brick-and-mortar shops. Through that process, SteadyMD built a suite of tools to make it work with EMR integrations, doctor-patient communication channels, digital recruiting and forecasting software, and prescription referrals and operations. The burdensome process struck a chord with the co-founders and they pivoted the company to where it is today: an “AWS for healthcare”.

SteadyMD offers a suite of services to its customers, the least of which, says co-founder Guy Friedman, is its video-conferencing platform.

“It’s not about the technology capacities,” Friedman says. “The very large companies that have a lot of resources are using us to help them increase their capacity as workforce.”

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Welcome to Daily Crunch for Monday, May 17. We have a lot to get to, so we’ll keep our introduction incredibly curt and simply note that early-stage founders can still apply to the upcoming TechCrunch Battlefield event for another week or so. Neesha has the details here. — Alex

TechCrunch Top 3

Today the biggest stories concern the never-ending flow of cash to insurtech, the ability of software companies to post accelerating revenue growth, and the market leverage of major tech platforms:

Jerry raises $28M: Adding another name to the list of startups working on building insurance marketplaces, Jerry has a twist on the model and a huge new infusion of cash. The startup wants to help consumers do more than just find insurance, pursuing the superapp concept, but in a new direction. For more on insurtech marketplaces and their growth, head here. (Insurtech is super hot in aggregate, it’s worth remembering.)

Monday.com is going public: We’ve long known that corporate communications and planning startup Monday.com was north of $100 million in annual recurring revenue. Now, at last, it has filed to go public. So we ripped into the numbers, which show accelerating revenue adds. More importantly than the raw math, however, was the implicit point from the news that the IPO markets remain open, and for more than just the latest SPAC deals. That’s good news for late-stage startups everywhere.

Apple adds lossless for no cost: Spotify wants to charge for higher-quality streaming. Apple has decided not to. And that’s not great news for the smaller company because it needs to boost its revenue per user over time. Apple, which has infinite money, does not. The Spotify-Apple war is a notable one to watch because it pits an incumbent upstart against an upstart incumbent in the music streaming space. Let’s see how Spotify fires back.

Startups and VC

It appears that every startup in the world just raised more money, so here’s a rundown of the latest deals in quick-fire fashion, ordered by size:

Fave raises $2.2M to connect fans and creators: Founder Jacquelle Amankonah Horton wants to close the space between fans and the creators they love. Given the general market focus in recent quarters on creators, the company makes sense.

Merge raises $4.5M for its HR and finance API: Merge offers a single API to connect products to all sorts of finance and HR products. It’s akin to a super API. And with what we presume is a developer-led sales motion and on-demand pricing, it’s right in the middle of the current startup business model zeitgeist.

Telda raises $5M for Egyptian neobanking: The Telda round is cool not only because we don’t cover Egyptian tech enough, but also because there’s Sequoia money in it. American VCs are looking farther and farther afield for their next deal.

Houm raises $8M for LatAm home sales: TechCrunch described Houm as “an all-in-one platform that helps homeowners rent and sell their properties in” Latin America. The recent Y Combinator grad took part in the accelerator’s winter 2021 batch.

Code Ocean raises $21M for collaborative data science: In short, Code Ocean provides data jockeys with a “small-scale container platform that lets you wrap up all the necessary components of your data and analysis in an easily shared format,” Devin Coldewey reports. And now it has a lot more money to chase that vision.

Ankorstore raises $102M to supply indie stores: Hailing from France, Ankorstore provides wholesale items to smaller retailers. And Tiger just poured capital into the company, meaning that the startup has some of the most intriguing financial backing out there today.

One more hardware SPAC: Bright Machines is going public via a SPAC. Our own Ron Miller helped us dig into the company and its accounting results.

The battle for voice recognition inside vehicles is heating up

Until recently, integrating affordable voice-recognition software into an automobile was something from science fiction.

But last year, the percentage of vehicles offering in-car connected services reached 45%. By 2024, analysts predict cars with voice recognition will comprise 60% of the market.

Considering how much time many of us spend behind the wheel, there’s an infinite number of applications for the technology. For our latest Extra Crunch market map, we sized up the general market opportunity before creating a roster of major players and reaching out to investors to see where they’re placing bets.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

Akin to the startup market, Big Tech was incredibly busy in the last few days, so here’s your run-through:

JD.com’s logistics subsidiary is going public: Good news from the Chinese startup market has been somewhat rare lately. Here’s some, which not only helps change the narrative a bit about the country’s tech scene, but also underscores how bonkers the global e-commerce market is.

SpaceX sent out 52 more Starlink satellites: Bring on rural, high-speed internet. So we can all move to Montana. (Please.)

GoJek and Tokopedia are GoTo Group: The expected combination of “Indonesia’s two biggest startups” is done, TechCrunch reports. GoJek, of course, is in the ride-hailing business, while Tokopedia is a marketplace. Now it’s a single, massive entity.

Microsoft makes Teams better for your parents: What happens when your Discord deal dies? Well, you make your current chat-video-groups service better for regular folks, it turns out. Aside from gaming, Teams may be Microsoft’s best shot at a consumer play that works out for some time.

Finally, BigTelco companies ditching media assets to de-lever ahead of higher infrastructure spend? Say no more, AT&T, we’re already hip to it. (Or they could just limit some shareholder return programs for a bit. You know?)