Year: 2021

Monzo, the U.K. challenger bank with just shy of 5 million customers, has recruited a new U.S CEO to head up its efforts states-side, TechCrunch has learned.

Carol Nelson, who previously spent ten years as CEO of Cascade Bank and prior to that was a long time senior vice president of Bank of America, will start as early as next week, staff at Monzo were informed this morning. Notably, she has been a strategic advisor to Monzo U.S. for more than a year, so she’ll already be familiar with the bank’s U.S. ambitions and general culture.

Technically, Nelson takes over from TS Anil, who is now Monzo’s U.K. CEO and held both CEO titles temporarily after Monzo founder Blomfield relinquished CEO duties to become president in May. Then, last month, we broke news that Blomfield had decided to cease his involvement with Monzo entirely, the challenger bank and now fintech unicorn he founded six years ago.

Details of Monzo’s U.S. ambitions first broke cover in January 2019 (again, thanks to this publication), and were officially confirmed the following June. Since then, Monzo U.S. has only seen a tentative soft launch, reminiscent of its early U.K. beta all those years ago and an understanding that product-market-fit is key for different geographies.

The current U.S. team is still roughly ten people as the bank works through its U.S. banking charter application and supports a limited pool of U.S. customers. I understand there are currently over 20,000 signups to the U.S. waitlist, and that post pandemic Monzo will choose San Francisco for its U.S. HQ.

(In April last year, Monzo shuttered its Las Vegas customer support office, amid a round of cutbacks. However, that satellite office was to serve U.K. customers overnight and separate to its U.S. plans.)

Meanwhile, the recruiting of a new U.S. CEO comes hot on the heels of Monzo reportedly raising further top up funding. First reported by Sky’s Mark Kleinman via a tweet (yes, really) and with additional details sourced by Business Insider, the challenger bank is closing a further £50 million, thought to be on the same terms as its recent Series G funding. Backing comes from existing investors — Novator, and Kaiser — and new investor Octahedron Capital.

Spacelift, a startup that automates the management of cloud infrastructure, has raised $6 million in a Series A funding round led by London’s Blossom Capital. Polish fund Inovo Venture Partners and Hoxton Ventures are also investing.

The Polish and US-based startup is taking advantage of the opportunity presented by the increasingly complex cloud world, with what it dubs as an ‘infrastructure-as-code (IaC)’ and a ‘policy-as-code’ platform. This allows teams to automate processes, it says, in a more efficient manner without the risk of downtime.

Co-founder Marcin Wyszynski hit upon the idea after working for companies like Deliveroo in the UK and Berlin-based scooter operator TIER Mobility. The company is headquartered in Redwood City, California, US with an additional office in Warsaw, Poland.

Wyszynski said in a statement: “The switch to using cloud servers and infrastructure as code has benefits for businesses but it has created new challenges for teams, particularly when they are distributed. The slightest mistake can cause major outages and downtime which is obviously bad for business. We designed Spacelift to minimize these issues, by providing automation, control, and visibility tools to teams wherever they are.”

Imran Ghory, co-founder and partner at Blossom Capital commented: “Managing infrastructure has been a persistent pain point for fast-growing teams and the need for specialized management tool platforms has been underlined by the fact that so many teams are now working remotely.”

Spacelift’s competitors include HashiCorp (which raised $349.2M) and Scalr (raised $7.5M).

Since M-Pesa’s mobile money infrastructure came into play in 2007, there has been a proliferation of fintech services ranging from wallets to savings and loans. With this mobile money ecosystem growing in double-digits year-on-year, a lot of data is being created in the process. But this has left some fragmentation, where one person’s information is diverse and can be accessed via multiple channels. 

For banks and financial institutions, it becomes difficult to understand and provide insights from users’ data. Over the past three years, some platforms have looked to solve this problem. They aggregate users’ financial data and share it with these financial players through APIs driving more data-driven insights and value-added products. One such platform is Pngme.

Today, the Africa-focused but U.S.-based unified financial data platform announced its seed round of $3 million. The investment, led by Radical Ventures, Raptor Group, Lateral Capital and EchoVC was closed in Q3 2020 and came after the fintech startup raised $500,000 in pre-seed two years ago. It further reflects the continued customer growth from banks, fintechs, credit bureaus and microfinance banks in Ghana, Kenya and Nigeria.

Founded by Brendan Playford and Cate Rung, Pngme started primarily as a lending platform in 2018. Playford, who grew up in the U.K., came to East Africa in 2007 to work on philanthropic biofield projects. He ended up writing short-term loans to entrepreneurs, particularly in Kenya and Tanzania, and during this time formed the basis for which he as CEO and Rung as COO founded Pngme.

“That was sort of the impetus we needed and also the experience of being credit invisible in the U.K. led Cate and me to found the company specifically focusing on providing access to finance to Africans,” he said to TechCrunch.

According to Rung, the company’s initial thesis was that entrepreneurs didn’t get enough help, capital-wise. But going into 2019, when the company raised its pre-seed round, the founders realized another problem — the lack of data infrastructure to access risk when giving out loans or capital.

Their stint in an accelerator based in Toronto, Canada helped to better understand the more valuable version of the company — the B2C layer which connects entrepreneurs with finance or the data infrastructure layer to understand risk or a person’s financial identity.

“We were building two different companies at once, so we had to choose one path. We realised that the data infrastructure layer was critical and a massive pain point in most of sub-Saharan Africa,” the COO added.

Pngme had to make a swift pivot to the latter. Building this would have a much more significant impact. Being able to aggregate mobile money transactions, bank transactions, loan data, behavioural data, process all that data into a structured format and make it available as an open API to developers, fintechs or banks across the continent will provide data to power real-time credit and new financial products.

Additionally, the company found out in the course of building that consumers want to understand their finances more. This helps to navigate their way to financial wellness using credit and, later, more sophisticated products. On the other hand, financial institutions need the data to know what customer segments to expand to or increase their bottom line. Therefore, placing emphasis on the customers’ needs is one of the company’s core value propositions.  

“We’re hyper-focused on providing the highest real-time data coverage on credit-invisible customers, something that no other API is offering in our markets,” said Playford regarding the company’s consumer-centric play.

Some of Pngme’s customers include SimpleFi, Pavelon, ReadyCash, CashTopUp and Rigo Microfinance. In addition to this, the CEO says the company will integrate with large institutional banks next month.

Despite similarities to other API fintech startups in the region with Plaid-esque functionalities, Playford says Pngme intends to be different from the billion-dollar company.

For one, its focus on traditional channels like USSD data — which has the highest financial coverage on the continent — attests to that. “We’ve gone a step beyond just providing rails to actually building on top of the data. We also provide machine learning insights for our customers,” Rung said.

Also, the platform’s SDK collects user-permissioned data through a partner’s existing app using a one-click data-sharing feature. This data is served up through an easy to integrate API that delivers real-time financial data and alerts. With 300% month-on-month growth in the fourth quarter of 2020, Pngme forecasts the number of user-permissioned data profiles created on its platform to reach hundreds of thousands and millions by 2022.

Pngme’s revenue model is subscription and API-call driven. The platform has different tiers; developers can get a set number of free API calls with no subscription with the free tier. With the enterprise tier for banks and fintech, API calls are charged and can be discounted in some instances. Besides that, the company has a white-glove onboarding process where Playford says developers and startups can reach out to build specific use cases on the platform.

Since raising its pre-seed round, Pngme has been in stealth mode, working with a close group of customers. But with this seed round, the company is going full tilt. According to Pngme, the investment is being used to grow its Lagos and Nairobi teams, particularly the engineers and data scientists, and scaling its product for banks, mobile money operators and fintechs.

Lateral Capital, one of the investors in this round, also backs another API fintech startup in Mono. On the firm’s decision to invest in Pngme, managing partner, Rob Eloff said to TechCrunch that “over the past five years, we have seen a growing appreciation for the continent-wide challenge of providing accurate relational data for financial services customers across Africa. In Pngme, we are fortunate to have met a team with a unique solution to the root cause of financial exclusion in Africa, and a unique culture that spans the best of Africa and the U.S.”

For EchoVC Partners, a Lagos-based early-stage VC, it’s the remarkable job the Pngme team has done in building and delivering a unified financial data API platform for credit identity and access. This is according to Damilola Thompson, the VP and associate general counsel at the firm.

At the moment, Pngme is processing millions in data points per month. With that scale, Rung hopes it will lead to the creation of new technology and more sophisticated financial products.

“What I think is most exciting is the way mobile money leapfrogged any sort of traditional financial infrastructure. Similar to that is how we’re seeing open banking in the U.S. give way to so many new financial products for the end consumer. I hope that by providing forward-thinking open API layers, the same can happen in Africa.”

India may soon have another fintech unicorn. BharatPe said on Thursday it has raised $108 million in a financing round that valued the New Delhi-based financial services startup at $900 million.

Coatue Management led the three-year-old startup’s Series D round. Other six existing institutional investors — Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo and Sequoia Capital — also participated in the round, which brings BharatPe’s total to-date raise to $233 million in equity and $35 million in debt.

The startup said as part of the new financing round it returned $17.17 million to its angel investors and employees with stock option.

“With the balance sheet well capitalized (more than US$ 200M in bank), we are now going to keep our heads down and deliver US$30B TPV and build a loan book of US$ 700mn with small merchants by March 2023,” said Ashneer Grover, co-founder and chief executive of BharatPe.

BharatPe operates an eponymous service to help offline merchants accept digital payments and secure working capital. Even as India has already emerged as the second largest internet market, with more than 600 million users, much of the country remains offline.

Among those outside of the reach of the internet are merchants running small businesses, such as roadside tea stalls and neighborhood stores. To make these merchants comfortable with accepting digital payments, BharatPe relies on QR codes and point of sale machines that support government-backed UPI payments infrastructure.

The startup said it had deployed over 50,000 PoS machines by November of last year, and enables monthly transactions worth more than $123 million. It does not charge merchants for universal QR code access, but is looking to make money by lending. Grover said the startup’s lending business grew by 10x in 2020.

“This growth reiterates the trust that the small merchants and kirana store owners have showed in us. This is just the beginning of our journey and we are committed to build India’s largest B2B financial services company that can serve as one-stop destination for small merchants. For BharatPe, merchants will always be at the core of everything we build,” he said.

BharatPe’s growth is impressive especially because it was not the first startup to help merchants. In a recent report to clients, analysts at Bank of America said BharatPe has proven that fintech is not the winner takes all market.

“BharatPe perhaps has the late mover advantages in the space. It was one of the first companies to act as a universal consolidator of QR codes on UPI, giving the merchant the advantage to have one QR code (eventually others like Paytm followed). Unlike its Fintech peers, BharatPe is not educating the merchants but instead following its larger peers who have already educated the merchants,” they wrote in the report, reviewed by TechCrunch.

The startup, which has presence in 75 cities today, plans to further expand its network in the nation with the new fund.

Northmill Bank, the Sweden-based challenger that has around 200,000 customers across three European countries, has raised around $30 million in new funding.

Leading the round is M2 Asset Management, the Swedish investment company controlled by Rutger Arnhult, and asset management firm Coeli. The injection of cash will be used for continued geographical expansion and to accelerate the development of new products. Notably, this will include plans to launch in 10 new markets as Northmill aims to step on the gas. Next stop, Norway.

As it stands, 2006-founded Northmill is available in Sweden, Norway and Finland, where it competes with incumbent banks with physical branches and the likes of Lunar, Revolut and Klarna (which operates as a bank in its home country of Sweden, and Germany).

More adjacent, another competitor is Anyfin, which is similar to Northmill’s “Reduce” product, which promises to help customers consolidate their existing loans/credit and lower their interest payments. “Our fastest-growing product and main driver today is Reduce, which lowers people’s interest on existing credits, part-payments and credit cards,” explains a Northmill spokesperson.

Founded nearly 15 years ago and originally operating as a credit provider, in 2019 Northmill secured a full banking license, regulated by the Swedish Financial Supervisory Authority. The bank employs 150 people and offers savings, credits, payments and insurances. More generally, it has taken a different and slower path than most of the newer crop of challengers in Europe, relying less on investment to fuel its growth and claims to have been profitable from nearly the get-go.

Cue statement from Rutger Arnhult, chairman of the board of M2 Assets Management: “Northmill Bank is already a profitable company with a proven and sustainable business model, which stands out among today’s tech investments. We have been following their journey for a while and have been impressed by the founders, as well as the company. The banking market is well on its way to change and the winners will be those who best can adapt to the new digital reality. For me, this is an investment in a tech company with long-term owners, who are just at the beginning of their journey. I see great growth potential in the bank.”

This afternoon Bumble priced its IPO at $43 per share, ahead its raised IPO range of $37 to $39 per share.

After filing to go public in mid-January, and offered up its first price range on February 2nd. That range, $28 to $30 per share wound up coming up short. Bumble raised its price range to $37 to $39 per share earlier this week.

Before counting a possible underwriters’ option, Bumble raised $2.15 by selling 50,000,000 million shares in its public offering. The company will begin to trade tomorrow morning.

Bumble’s debut comes amidst a number of other 2021 offerings, including MetroMile’s SPAC-led public combination earlier this week. Other well-known companies are anticipated to list this year, including Coinbase and, perhaps, Robinhood.

The public offering of Bumble shares comes after a sustained period when one company, Match, was presumed to be the only possible public dating company. However, the smaller Bumble has proven that there is room for at least one more.

TechCrunch explored Bumble’s financial results here, if you’d like more.

This afternoon Bumble priced its IPO at $43 per share, ahead its raised IPO range of $37 to $39 per share.

After filing to go public in mid-January, and offered up its first price range on February 2nd. That range, $28 to $30 per share wound up coming up short. Bumble raised its price range to $37 to $39 per share earlier this week.

Before counting a possible underwriters’ option, Bumble raised $2.15 by selling 50,000,000 million shares in its public offering. The company will begin to trade tomorrow morning.

Bumble’s debut comes amidst a number of other 2021 offerings, including MetroMile’s SPAC-led public combination earlier this week. Other well-known companies are anticipated to list this year, including Coinbase and, perhaps, Robinhood.

The public offering of Bumble shares comes after a sustained period when one company, Match, was presumed to be the only possible public dating company. However, the smaller Bumble has proven that there is room for at least one more.

TechCrunch explored Bumble’s financial results here, if you’d like more.

Facebook tries to get less political, Oracle’s TikTok acquisition may not be happening and Twitter says Donald Trump is banned forever. This is your Daily Crunch for February 10, 2021.

The big story: Facebook tests a News Feed with less politics

Facebook announced today that it’s testing changes to the News Feed that would downrank political content. The company says the results will help determine how it treats such content in the future; content from health organizations and official government agencies will not be affected.

Two years ago, Facebook said it would be downranking publisher content in favor of content from family and friends, but this time it’s targeting politics specifically. For now, this test is only being conducted with a small group of users in select markets, including the United States, Canada, Brazil and Indonesia.

The tech giants

TikTok’s forced sale to Oracle is put on hold — The insane saga of a potential forced sale of TikTok’s U.S. operations is reportedly ending.

Twitter says Trump is banned forever, even if he runs for president again — “When you’re removed from the platform, you’re removed from the platform,” said Twitter CFO Ned Segal.

Apple Maps to gain Waze-like features for reporting accidents, hazards and speed traps — The new features are live in the iOS 14.5 beta.

Startups, funding and venture capital

Israeli startup CYE raises $100M to help companies shore up their cyber-defenses — CYE conducts offensive operations against their customers (with their permission) to find weaknesses before malicious hackers do.

SecuriThings snares $14M Series A to keep edge devices under control — This could include devices like security cameras, access control systems and building management systems.

Podz turns podcasts into a personalized audio newsfeed — A new company from an old Startup Battlefield winner, backed by Katie Couric and Paris Hilton.

Advice and analysis from Extra Crunch

Three adtech and martech VCs see major opportunities in privacy and compliance — We asked them to update us on whether deal flow has recovered, and to look ahead at the possibility of additional regulation.

Dear Sophie: How can I improve our startup’s international recruiting? — The latest edition of the advice column that answers immigration-related questions about working at technology companies.

How will investors value MetroMile and Oscar Health? — Last night, MetroMile and SPAC INSU Acquisition Corp. II completed their combination.

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

Everything else

Ancestry says it fought two police requests to search its DNA database — Neither request resulted in the company turning over customer or DNA data.

NASA will use Fitbits to help prevent spread of COVID-19 to astronauts and employees — NASA will provide 1,000 of its employees, including 150 astronauts, with Fitbit devices in a pilot program.

EU’s top privacy regulator urges ban on surveillance-based ad targeting — The regulator is proposing that this ban be included in a major reform of digital services rules.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Scalarr, a startup that says it uses machine learning to combat ad fraud, is announcing that it has raised $7.5 million in Series A funding.

The company was founded by CEO Inna Ushakova and CPO Yuriy Yashunin, who previously led the mobile marketing agency Zenna. Ushakova told me that while at Zenna, they realized that ad fraud had grown to the point that it posed a real threat to their business.

At the same time, the team wasn’t impressed by any of the existing anti-fraud solutions, so it built its own technology. Eventually, they shut Zenna down completely and moved the entire team over to Scalarr.

The startup’s products include AutoBlock, which is supposed to detect fraud before the advertiser bids on an ad, and DeepView, which is used by adtech platforms (including ad exchanges, demand-side platforms and supply-side platforms).

Scalarr says it can detect 60% more fraud than existing products on the market and that it saved its clients $22 million in ad fraud refunds in 2020. Ushakova attributed this in large part to the startup’s extensive use of machine learning technology.

She added that while large ad attribution companies are adding anti-fraud products, they aren’t the focus. And historically, companies have tried to detect fraud through a “rules-based approach,” where there’s a list of behaviors that suggest fraudulent activity — but no matter how quickly they create those rules, it’s hard to keep up with the fraudsters.

“Fraud is ever evolving,” Ushakova said. “It’s like a Tom and Jerry game, so they are ahead of you and we are trying to catch them.”

As for why machine learning works is so much more effective, she said, “Only ML could help you predict the next step, and with ML, you should be able to detect abnormalities that are not classified. Right after that, our analytics should be able to take a look at those abnormalities and decide whether something significant statistically important.”

Scalarr’s Series A led by the European Bank of Reconstruction and Development, with participation from TMT Investments, OTB Ventures, and Speedinvest. Among other things, the company will use the money to expand its presence in Asia and to continue developing the product.

Today, there are a number of website builders aimed at creators who want to point fans to a dedicated landing page from their social media profile. If you’ve spent any time on TikTok or Instagram, you’ve likely come across one of these simplified “link in bio”-style websites — like those hosted by Linktree, for example. A new startup called Beacons is now entering this market with the goal of making “link in bio” websites even more powerful. Its website builder offers creators an expanded set of tools to monetize their community, including through donations, sales, paid requests, affiliate shopping and more.

After signing up for the service, Beacons walks the user through a series of questions, many which can be answered with just a “yes” or “no.” For example, Beacons may ask the user if they want to accept donations or collect followers’ emails, if they make TikTok or YouTube videos, and which category they’re in, in terms of the content they create.

This information is used to set up their Beacons landing page with the right content sections, which Beacons calls “blocks.” At launch, Beacons offers around a dozen of these configurable blocks, like email and SMS collection modules, video embed blocks for TikTok or YouTube creators, music blocks for embedding a track or album, a Twitter block to embed a tweet or Twitter profile, and link blocks, similar to Linktree, among others.

There’s even a “friends” block, which is like a modern-day Myspace Top 8. This lets you link out to your friends on either Beacons, Instagram, Twitter or TikTok.

An area where Beacons differentiates itself from other “link in bio” website builders, however, is with its set of “monetization” blocks. Today, it has four tools for creators who want to generate revenue from their online presence. One of these is similar to Cameo, as it allows the creator to set up a menu of options to take fan requests for personalized content. For instance, fans could ask a fitness influencer to critique their routine, or they could pay to have their burning questions answered by someone they admire. The creator can then send out a personalized response either publicly or privately.

Other monetization blocks allow creators to accept donations or sell digital downloads — like e-books or paid video content, for instance.

The fourth, and perhaps most interesting, monetization block is a TikTok shopping feature. It allows creators to embed their TikTok videos where they recommend products directly on their Beacons website. From here, they can add affiliate links to the products in question, allowing them to directly generate revenue when fans purchase the items they’ve featured.

This particular feature comes at an opportune time. Today, TikTok is only beginning to formalize its plans around e-commerce. In a recent presentation to marketers, TikTok spoke of its plans to launch new online shopping tools that would allow brands to more directly reach TikTok’s younger audience. TikTok has also partnered with Shopify on social commerce, and has experimented with live video shopping, including with a holiday event hosted by Walmart.

But TikTok’s creators have already been driving shopping trends across categories like fashion, beauty, home décor, household items, toys and much more, to the point that “TikTok made me buy it,” has become a common excuse for the impulse purchases prompted by TikTok’s viral content. By allowing creators to now more directly and financially benefit from these trends is the next logical step.

The idea for Beacons comes from co-founders Neal Jean, Jesse Zhang, Greg Luppescu and David Zeng. Neal, Jesse and David met while in the PhD program at Stanford studying different areas of research, like machine learning and AI. Greg, meanwhile, did his Master’s at Stanford, then went on to work at Apple on the Apple Watch team.

Neal, Jesse and David had teamed up on Beacons and went through the Y Combinator Summer 2019 batch, iterating on ideas and pivoting the product several times. Some of those early concepts may eventually return — like a Shopify integration that would connect creators with brands selling on Shopify, for example.

The broader focus, however, had always been on helping creators make money, says Neal.

“Even before our current product, we were really focused on trying to help creators solve monetization,” he explains. “When we kind of made this mini-pivot into the more Linktree-like product, we thought about building features that can help creators actually generate revenue — which I don’t think Linktree or any of the existing incumbents in the space were doing. Even today, you can’t actually make any money through Linktree,” he notes.

Linktree, of course, is only one of many “link in bio” websites on the market today, which means Beacons still faces a lot of competition. Other rivals include Linkin.bio, Lnk.bio, Shorby, Tap.bio, Feedlink.io, Link in Profile, Milkshake, Campsite, bio.fm, url.bio and biolincs.me, for example.

Unlike some of its competitors, Beacons offers its tools for free and instead monetizes through a premium plan ($10/mo) that allows creators to use their own custom domain. It also makes money by taking a percentage of sales on the requests and sales blocks, which is either 9% on the free plan or 5% on the paid plan. This rev share doesn’t bring in much money today — only “hundreds” of dollars — but the team believes that will scale as the startup grows and gains a large user base.

“Our strategy is…to continue building out more of these different kinds of revenue streams for creators,” says Neal. “And as we do that, I think, the fraction of transactional revenue will become higher relative to the subscription revenue than it is today.”

Since launching in private beta last September, Beacons has seen 90,000 sign-ups and now has over 20,000 people who are considered active users of the product — most arrived in the last couple of months when the service began to roll out some of its newer features. So far, Beacons hasn’t done any paid marketing, with around 77% of new users coming to Beacons because they saw it on someone else’s profile.

The team raised a small, post-YC angel round of around $600,000 but is looking to fundraise in the future.