Author: azeeadmin

25 Jun 2020

New Enterprise Associates goes to Hollywood and launches a venture firm with CAA

New Enterprise Associates has launched a new investment initiative with the Hollywood talent agency Creative Artists Agency.

The new partnership, called Connect Ventures, said it will identify and accelerate the growth of early-stage, consumer-focused businesses formed in the wake of the global pandemic.

In a world where everything is a commodity and nothing is more commoditized than influence, the merger of these two entities — one which develops technology platforms, the other which tries to make money from the celebrities that have capitalized on those platforms and the whole attention economy — makes total sense (in an ‘everything is a dumpster fire and there are over 120,000 Americans that have died from an epidemic, but who cares,’ kind of way).

“Connect Ventures is uniquely positioned to identify and support the most innovative entrepreneurs, helping accelerate the growth of their businesses by providing access to the expertise, knowledge, and relationships of both CAA and NEA,” said Richard Lovett, President, CAA, in a statement. “Connect Ventures will be deeply integrated into CAA’s ecosystem to help unlock new opportunities in service of our clients.”

Cool.

CAA has celebrity endorsers at the ready across movies, television, social media, and sports — with around 2,000 athletes and others at the ready to pitch products for profit.

This new initiative is CAA’s umpteenth shot at breaking into startups or later stage media investing. Other programs that the company has initiated include an incubator and business development arm, a late stage investment fund, and now Connect.

“In creating Connect Ventures, we’re bringing together two proven platforms built on decades of experience to unlock a really exciting opportunity set that is emerging at the intersection of culture and commerce, as well as data and software,” said Tony Florence, General Partner and Head of Technology Investing at NEA, in a statement. “Heightened consumer demand for new ways to explore, engage and transact across nearly all categories of daily life will give rise to powerful new creative tools and distribution platforms—a trend already underway but accelerated as a result of the global health crisis.”

The new endeavor will be led by NEA’s general partner, Rick Yang, and CAA’s Michael Blank, the head of the firm’s Consumer Investments, will lead the agency’s involvement in Connect Ventures.

The new firm also has made its first investment in Spire Animation Studios, a new feature animation studio from the Academy Award-winning producer of Ratatouille, Brad Lewis and serial entrepreneur P.J. Gunsagar. The studio said it will release its first animated feature n 2023.

“The animation industry is ready for a new voice in feature animation.  We’re super excited about forging creative chemistry with talented filmmakers from across mediums to make inspiring original stories for global audiences,” said Lewis.

25 Jun 2020

5 VCs agree: COVID-19 reshaped adtech and martech

We last surveyed VCs about their advertising and marketing investment strategies back in January — which is to say, in a completely different world, before the coronavirus pandemic began to wreak havoc on the global economy.

While there don’t appear to be any comprehensive numbers yet about the effect on digital advertising (which is, after all, still playing out), early data and anecdotes suggest a rapid decline, with some categories of ad spend disappearing entirely.

And as we noted in our previous survey, Crunchbase data shows that adtech had already fallen at a roughly 10% compounded annual growth rate over the last five years.

So what does the landscape look like now, and where are the remaining opportunities? To find out, we’ve compiled updated answers from two investors who participated in the previous survey and brought in three new perspectives:

For the most part, they acknowledged the landscape’s challenges — not just the pandemic, but the general maturity of the industry — while also pointing to opportunities in areas like machine learning. As Elton put it succinctly, “Marketing and advertising are not going away.”

Eric Franchi, MathCapital

How much time are you spending looking at marketing tech or adtech startups right now? Are you more focused on one or the other?

Adtech and martech are our main categories as a fund. We selectively invest in categories that might benefit from it (think DTC brands or media) or be of benefit to it (think next-generation CRM or HR tech). But 90%+ of our focus is adtech and martech.

What are you looking for in your next investment?

As always — team first. We look for founding teams with talent, vision and grit. We keep a fairly wide berth in terms of products and categories but we are spending much of our time focused on two themes: the post-privacy era in marketing (i.e. new, cookieless, compliant forms of identity and infrastructure) and future of digital media (i.e. video, OTT, audio, etc.).

How has COVID-19 impacted the adtech and martech investing landscape? Are there still opportunities?

Dealflow is down somewhat, but we are still seeing great opportunities. We have several investments in the pipeline for Q2. The challenges right now are similar to other sectors: spending time getting to know teams and calibrating expectations for growth in a Zoom-only (for now) world.

What kind of advice are you giving to your portfolio companies?

Right now, two months post-lockdown, most adjustments have been made to budgets and plans, teams (and customers) are adjusted to being fully remote and things have somewhat stabilized. Now is the time to get teams focused on sales and marketing. It’s a unique and rare time to outflank larger, slower-moving competitors and adapt to the market.

Christine Tsai, 500 Startups

25 Jun 2020

5 VCs agree: COVID-19 reshaped adtech and martech

We last surveyed VCs about their advertising and marketing investment strategies back in January — which is to say, in a completely different world, before the coronavirus pandemic began to wreak havoc on the global economy.

While there don’t appear to be any comprehensive numbers yet about the effect on digital advertising (which is, after all, still playing out), early data and anecdotes suggest a rapid decline, with some categories of ad spend disappearing entirely.

And as we noted in our previous survey, Crunchbase data shows that adtech had already fallen at a roughly 10% compounded annual growth rate over the last five years.

So what does the landscape look like now, and where are the remaining opportunities? To find out, we’ve compiled updated answers from two investors who participated in the previous survey and brought in three new perspectives:

For the most part, they acknowledged the landscape’s challenges — not just the pandemic, but the general maturity of the industry — while also pointing to opportunities in areas like machine learning. As Elton put it succinctly, “Marketing and advertising are not going away.”

Eric Franchi, MathCapital

How much time are you spending looking at marketing tech or adtech startups right now? Are you more focused on one or the other?

Adtech and martech are our main categories as a fund. We selectively invest in categories that might benefit from it (think DTC brands or media) or be of benefit to it (think next-generation CRM or HR tech). But 90%+ of our focus is adtech and martech.

What are you looking for in your next investment?

As always — team first. We look for founding teams with talent, vision and grit. We keep a fairly wide berth in terms of products and categories but we are spending much of our time focused on two themes: the post-privacy era in marketing (i.e. new, cookieless, compliant forms of identity and infrastructure) and future of digital media (i.e. video, OTT, audio, etc.).

How has COVID-19 impacted the adtech and martech investing landscape? Are there still opportunities?

Dealflow is down somewhat, but we are still seeing great opportunities. We have several investments in the pipeline for Q2. The challenges right now are similar to other sectors: spending time getting to know teams and calibrating expectations for growth in a Zoom-only (for now) world.

What kind of advice are you giving to your portfolio companies?

Right now, two months post-lockdown, most adjustments have been made to budgets and plans, teams (and customers) are adjusted to being fully remote and things have somewhat stabilized. Now is the time to get teams focused on sales and marketing. It’s a unique and rare time to outflank larger, slower-moving competitors and adapt to the market.

Christine Tsai, 500 Startups

25 Jun 2020

Privacy not a blocker for “meaningful” research access to platform data, says report

European lawmakers are eyeing binding transparency requirements for Internet platforms in a Digital Services Act (DSA) due to be drafted by the end of the year. But the question of how to create governance structures that provide regulators and researchers with meaningful access to data so platforms can be held accountable for the content they’re amplifying is a complex one.

Platforms’ own efforts to open up their data troves to outside eyes have been chequered to say the least. Back in 2018, Facebook announced the Social Science One initiative, saying it would provide a select group of academics with access to about a petabyte’s worth of sharing data and metadata. But it took almost two years before researchers got access to any data.

“This was the most frustrating thing I’ve been involved in, in my life,” one told Protocol earlier this year, after spending some 20 months negotiating with Facebook over exactly what it would release.

Facebook’s political Ad Archive API has similarly frustrated researchers. “Facebook makes it impossible to get a complete picture of all of the ads running on their platform (which is exactly the opposite of what they claim to be doing),” said Mozilla last year, accusing the tech giant of transparency-washing.

The tech giant points to European data protection regulations and privacy requirements attached to its business following interventions by the US’ FTC to justify painstaking progress around data access. But critics argue this is just a cynical shield against transparency and accountability. Plus of course none of these regulations stopped Facebook grabbing people’s data in the first place.

In January, Europe’s lead data protection regulator penned a preliminary opinion on data protection and research which warned against such shielding.

“Data protection obligations should not be misappropriated as a means for powerful players to escape transparency and accountability,” wrote EDPS Wojciech Wiewiorówski. “Researchers operating within ethical governance frameworks should therefore be able to access necessary API and other data, with a valid legal basis and subject to the principle of proportionality and appropriate safeguards.”

Nor is Facebook the sole offender here, of course. Google brands itself a ‘privacy champion’ on account of how tight a grip it keeps on access to user data, heavily mediating data it releases in areas where it claims ‘transparency’. While, for years, Twitter routinely disparaged third party studies which sought to understand how content flows across its platform — saying its API didn’t provide full access to all platform data and metadata so the research didn’t show the full picture. Another convenient shield to eschew accountability.

More recently the company has made some encouraging noises to researchers, updating its dev policy to clarify rules, and offering up a COVID-related dataset — though the included tweets remains self selected. So Twitter’s mediating hand remains on the research tiller.

A new report by AlgorithmWatch seeks to grapple with the knotty problem of platforms evading accountability by mediating data access — suggesting some concrete steps to deliver transparency and bolster research, including by taking inspiration from how access to medical data is mediated, among other discussed governance structures.

The goal: “Meaningful” research access to platform data. (Or as the report title puts it: Operationalizing Research Access in Platform Governance: What to Learn from Other Industries?

“We have strict transparency rules to enable accountability and the public good in so many other sectors (food, transportation, consumer goods, finance, etc). We definitely need it for online platforms — especially in COVID-19 times, where we’re even more dependent on them for work, education, social interaction, news and media consumption,” co-author Jef Ausloos tells TechCrunch.

The report, which the authors are aiming at European Commission lawmakers as they ponder how to shape an effective platform governance framework, proposes mandatory data sharing frameworks with an independent EU-institution acting as an intermediary between disclosing corporations and data recipients.

“Such an institution would maintain relevant access infrastructures including virtual secure operating environments, public databases, websites and forums. It would also play an important role in verifying and pre-processing corporate data in order to ensure it is suitable for disclosure,” they write in a report summary.

Discussing the approach further, Ausloos argues it’s important to move away from “binary thinking” to break the current ‘data access’ trust deadlock. “Rather than this binary thinking of disclosure vs opaqueness/obfuscation, we need a more nuanced and layered approach with varying degrees of data access/transparency,” he says. “Such a layered approach can hinge on types of actors requesting data, and their purposes.”

A market research purpose might only get access to very high level data, he suggests. Whereas medical research by academic institutions could be given more granular access — subject, of course, to strict requirements (such as a research plan, ethical board review approval and so on).

“An independent institution intermediating might be vital in order to facilitate this and generate the necessary trust. We think it is vital that that regulator’s mandate is detached from specific policy agendas,” says Ausloos. “It should be focused on being a transparency/disclosure facilitator — creating the necessary technical and legal environment for data exchange. This can then be used by media/competition/data protection/etc authorities for their potential enforcement actions.”

Ausloos says many discussions on setting up an independent regulator for online platforms have proposed too many mandates or competencies — making it impossible to achieve political consensus. Whereas a leaner entity with a narrow transparency/disclosure remit should be able to cut through noisy objections, is the theory.

The infamous example of Cambridge Analytica does certainly loom large over the ‘data for research’ space — aka, the disgraced data company which paid a Cambridge University academic to use an app to harvest and process Facebook user data for political ad targeting. And Facebook has thought nothing of turning this massive platform data misuse scandal into a stick to beat back regulatory proposals aiming to crack open its data troves.

But Cambridge Analytica was a direct consequence of a lack of transparency, accountability and platform oversight. It was also, of course, a massive ethical failure — given that consent for political targeting was not sought from people whose data was acquired. So it doesn’t seem a good argument against regulating access to platform data. On the contrary.

With such ‘blunt instrument’ tech talking points being lobbied into the governance debate by self-interested platform giants, the AlgorithmWatch report brings both welcome nuance and solid suggestions on how to create effective governance structures for modern data giants.

On the layered access point, the report suggests the most granular access to platform data would be the most highly controlled, along the lines of a medical data model. “Granular access can also only be enabled within a closed virtual environment, controlled by an independent body — as is currently done by Findata [Finland’s medical data institution],” notes Ausloos.

Another governance structure discussed in the report — as a case study from which to draw learnings on how to incentivize transparency and thereby enable accountability — is the European Pollutant Release and Transfer Register (E-PRTR). This regulates pollutant emissions reporting across the EU, and results in emissions data being freely available to the public via a dedicated web-platform and as a standalone dataset.

“Credibility is achieved by assuring that the reported data is authentic, transparent and reliable and comparable, because of consistent reporting. Operators are advised to use the best available reporting techniques to achieve these standards of completeness, consistency and credibility,” the report says on the E-PRTR.

“Through this form of transparency, the E-PRTR aims to impose accountability on operators of industrial facilities in Europe towards to the public, NGOs, scientists, politicians, governments and supervisory authorities.”

While EU lawmakers have signalled an intent to place legally binding transparency requirements on platforms — at least in some less contentious areas, such as illegal hate speech, as a means of obtaining accountability on some specific content problems — they have simultaneously set out a sweeping plan to fire up Europe’s digital economy by boosting the reuse of (non-personal) data.

Leveraging industrial data to support R&D and innovation is a key plank of the Commission’s tech-fuelled policy priorities for the next five+ years, as part of an ambitious digital transformation agenda.

This suggests that any regional move to open up platform data is likely to go beyond accountability — given EU lawmakers are pushing for the broader goal of creating a foundational digital support structure to enable research through data reuse. So if privacy-respecting data sharing frameworks can be baked in, a platform governance structure that’s designed to enable regulated data exchange almost by default starts to look very possible within the European context.

“Enabling accountability is important, which we tackle in the pollution case study; but enabling research is at least as important,” argues Ausloos, who does postdoc research at the University of Amsterdam’s Institute for Information Law. “Especially considering these platforms constitute the infrastructure of modern society, we need data disclosure to understand society.”

“When we think about what transparency measures should look like for the DSA we don’t need to reinvent the wheel,” adds Mackenzie Nelson, project lead for AlgorithmWatch’s Governing Platforms Project, in a statement. “The report provides concrete recommendations for how the Commission can design frameworks that safeguard user privacy while still enabling critical research access to dominant platforms’ data.”

25 Jun 2020

Target is rolling out fresh grocery pickup nationwide, starting with the Midwest

Target today is joining the growing number of grocery retailers offering curbside and in-store pickup services for fresh and frozen items. The retailer had paused its plans to rollout grocery pickup this spring, citing the COVID-19 pandemic as a factor. It said it didn’t have time to train employees on the new processes. Today, those plans are back in motion. The company now says it expects to have fresh and frozen grocery pickup available across 1,500 stores in the U.S. within a matter of months.

The addition isn’t being powered by Target’s grocery delivery service, Shipt, but will instead utilize store staff to pick and bag items — much as they do today for Target’s existing Order Pickup and Drive Up services.

However, consumers won’t have access to all of Target’s fresh and frozen food items at launch. The pickup services will offer 750 fresh and frozen items on top of the thousands of non-perishables already available. This includes produce, dairy, bakery, meat and frozen products.

In the same order, shoppers can also order from the more than 250,000 items available for pickup across categories like home, apparel, essentials and more.

A company spokesperson tells us the decision to limit fresh and frozen product selection to 750 items was related to how the service was used in early tests. The company found that Target shoppers largely used pickup to shop for grocery essentials in between larger trips to the store.

Both Drive Up and Order Pickup will offer the same product selection, we understand.

Target says the fresh and frozen items will be stored in temperature-controlled storage in the pickup area in the front of the store, until the customer arrives for their pickup.

The service is free to use and doesn’t require an order minimum or membership. In addition, Target RedCard holders and Target Circle members will be able to utilize their discounts on the new grocery items, as well.

Target is currently rolling out fresh and frozen grocery in the Midwest region, following its successful tests of grocery pickup in the Twin Cities and Kansas City markets. This will make the service available to 400 stores. It expects to reach 1,500 stores by the U.S holiday season.

The retailer is one of many grocers to now offer pickup services in the U.S. For Walmart, online grocery has played a large role in its growing e-commerce sales. In the fourth quarter of its fiscal 2019, ahead of the pandemic, Walmart’s e-commerce sales grew by 35%. As the coronavirus outbreak drove more shoppers to buy online and pickup outside of Walmart sales, the retailer reported a 74% jump in e-commerce sales in Q1.

Target, meanwhile, reported in Q1 its same-day services were growing in popularity as well, due to the pandemic. It even saw days where its volume of order pickup was twice as high as Cyber Monday. And on the Friday before Easter, it did more volume via Shipt’s delivery service than it did in a typical week.

Also in Q1, Target’s digital sales overall grew 141% while its combination of same-day services (Shipt, Drive Up, and Order Pickup) grew 278%. Of the millions of shoppers using Drive Up, 40% were new to the service — an indication of how the pandemic has shifted consumer behavior.

But Q1 was not all good news for the retailer. It said it was spending more on labor, selling fewer high-margin items, and writing down apparel and other goods that weren’t selling due to the pandemic’s influence on shopper’s needs. The company promised that its investments in online shopping options and its workforce — last week, for example, it raised its minimum wage to $15 per hour — would pay off in the long run.

“The speed and convenience of our fulfillment options are unmatched across the country, and they’ve become even more critical for our guests searching for easy and safe ways to shop during the pandemic. By adding fresh grocery to the pickup services our guests already love, we’re giving them even more reasons to shop at Target, said Target’s chief operating officer, John Mulligan, in a statement. “During a time when even more people are looking for different ways to get the items they need, we’ll continue to invest in making Target the easiest and safest place to shop,” he added.

 

25 Jun 2020

Wirecard, the disgraced German payments firm backed by Softbank, files for insolvency over €1.3B in loans coming due

The house of cards has well and truly collapsed for Wirecard, the German payments company that has been accused of accounting fraud. Today it announced that its German operation Wirecard AG was applying for insolvency proceedings in a Munich court, the Amtsgericht München, due to “impending insolvency and over-indebtedness.” It also issued a separate statement that elaborated to note that “the company’s ability to continue as a going concern is not assured” after it was unable to reach a deal with lenders over loans coming due on June 30 and July 1, respectively for €800 million ($896 million) and €500 million ($560 million).

It also said it hopes to restructure under temporary bankruptcy measures, and in the meantime Wirecard Bank AG would not be part of proceedings. “BaFin [the financial services watchdog] has already appointed a special representative for Wirecard Bank AG. In future, the release processes for all payments of the bank will be located exclusively within the bank and no longer at Group level.”

The collapse comes not just at a time when Wirecard’s own loans are falling due, but we have been facing a global recession due to the global health pandemic: that has had a knock-on effect for a number of industries, and so while some businesses are thriving, others have halted altogether, or slowed down considerably, which will have a direct impact on a company whose business model is set up to make incremental commissions on payments.

The Softbank-backed, publicly-traded business is still determining whether insolvency applications will also need to be filed for subsidiaries of the Wirecard Group: the company provides online and in-person payment services to merchants in other countries — most recently opening a subsidiary in Mexico — with offices in some 28 other locations.

Wirecard’s stock, traded in Germany on the Deutsche Borse Xetra exchange, has today plummeted nearly 77% (after drops in previous days), giving it a market cap of $350 million, an Enron-style collapse. As a point of contrast, when SoftBank invested $1 billion last year, it was worth around $19 billion.

The news brings a sad, but unsurprising, development to an especially rough week for the company, after its auditors Ernst & Young discovered a $2.1 billion accounting hole in its books, and then the former CEO, Markus Braun, was arrested on charges of fraud.

Those who have been watching the company for longer than the past week might also recall that all of this has been going on for months, although a separate investigation led by KPMG and published in April determined that “no incriminating evidence was found for the publicly raised accusations of balance sheet manipulation.”

Wirecard is one of the many disastrous investments made by SoftBank in recent times: the Japanese technology and investment giant put $1 billion into the company in April 2019.

Unlike many of its other bad deals — which have included troubled WeWork and Uber, which has failed to live up as a public company to the valuation expectations made by SoftBank and others when it was still private — this one did not come out of its Vision Fund, but was made directly by the SoftBank Group.

With the downfall coming as it has to a company that is publicly traded, Wirecard has been unable to offset its losses and its financial situation as they have played out on an open forum. The company counts Olympus, Getty Images, Orange, KLM among its customers.

25 Jun 2020

Illumina’s accelerator has an impressive 93 percent follow-on funding rate — here’re its latest picks

Since its launch in 1998 Illumina and its genetic analysis toolkits and services have become an essential component of the new biological manufacturing and therapeutic development industries which have emerged in the last twenty five years.

And for the past six years the company has attempted to encourage the development of the industry through an incubator program that launches new startups in the field into the market.

Since its inaugural cohort in 2014, around 93 percent of its graduates have gone on to raise additional capital. As an example, investors have poured over $150 million into Encoded Therapeutics, a provider of targeted gene therapies.

Earlier this week, the company announced its latest cohort of startups that will work with its London and San Francisco-based teams.

They include:

  • AarogyaAI Innovations Pvt. LTD, a diagnostics company whose technology quickly diagnoses drug-resistance.
  • MEDIC Life Sciences Inc., which is developing a pre-clinical testbed of millions of tumor samples based on CRISPR and cancer organoids to enable personalized targeted therapies for cancer.
  • Pluton Biosciences, LLC, a developer of herbicides and pesticides derived from bacteria, fungi, and viruses looking to replace chemical treatments.
  • WellSIM Biomedical Technologies, Inc., a tools company developing a high-throughput microfluidics-based automated processor to isolate and analyze exosomes.
  • Alchemab Therapeutics LTD, a developer of antibody therapeutics using patient antibodies.
  • Neurolytic Healthcare LTD, a diagnostics company providing genomics-driven diagnostics and personalized treatment recommendations for neurological conditions.
  • Tailor Bio LTD, a cancer diagnostics company developing a precision oncology platform to identify patterns in the genetics of tumors to predict how patients will respond to different therapies.

“As we navigate the current global pandemic, there is an even stronger urgency to create breakthrough genomics startups that will transform human health and beyond,” said Amanda Cashin, Co-founder and Global Head of Illumina Accelerator, in a statement. “By opening our second location and partnering with seed stage capital investors, we are proud to invest in these transformative startups to push the boundaries of where genomics can go.”

The accelerator program has partnered with First In Ventures, an investment organization backed in part by the family office DBM Invest, in both the US and the UK. Wing Venture Capital will also continue to provide convertible notes in the US while government entities through the Cambridgeshire & Peterborough Combined Authority will support companies in the UK.

Illumina has also opened up applications for its next batch of companies. 

25 Jun 2020

Google to offer loans to merchants in India

Google said on Thursday it plans to offer crediting feature to millions of merchants in India through its Google Pay app starting later this year as the American technology group looks to help small businesses in the country steer through the pandemic and also find a business model for its mobile payments service.

The company said it was working with financial institutions to offer loans to merchants from within Google Pay for Business app. The Google Pay’s business app, which the Android giant launched late last year, has already amassed 3 million merchants, it said.

Google’s announcement comes today as part of its effort to share its broader initiatives for small and micro-businesses in India. The company said Google My Business, an app it launched in India in the second half of 2017 to help mom and pop stores and other small merchants build online presence, has been used by more than 26 million businesses in the country to list themselves on Google search and Maps. India has about 60 million small and micro-sized businesses in the nation, according to government estimates.

“Every month we drive over 150 million direct connections between these businesses and customers including calls, online reservations and direction requests,” it said.

New Delhi ordered a nationwide lockdown in late March in a bid to control the spread of Covid-19. The move forced most businesses to suspend their operations. In recent weeks, the Indian government has moved to relax some of its restrictions and many stores have resumed their businesses.

Last year Google launched Spot feature in India that allows businesses to easily create their own branded commercial fronts that will be accessible to customers through Google Pay app.

In May, Google introduced Nearby Stores as a Spot feature on Google Pay app that allowed local businesses in select part of the country get discovered by customers in their neighborhood. The company said it is expanding this offering across India starting today.

Thursday’s announcement also outlines the grip Google has on small businesses in India, and how its scale — and resources — could pose additional challenges for scores of startups that are already attempting to serve businesses.

SoftBank -backed Paytm, Walmart’s PhonePe, and New Delhi-based BharatPe have in recent years onboarded millions of merchants and offer them a range of services including loans.

Paytm, which works with over 16 million merchants, earlier this year launched a range of gadgets, including a device that displays QR check-out codes that comes with a calculator and USB charger, a jukebox that provides voice confirmations of transactions and services to streamline inventory management for merchants.

For some of these players, Google’s increasingly growing interest in targeting merchants means they will be facing off the search giant on two fronts. TechCrunch reported earlier this month that Google Pay had about 75 million transacting users in India, more than any of its competitors. But Google Pay, and most other payments services in India are struggling to find a business model for their services.

Facebook, Google’s global rival, has courted more than 1 million merchants in India on its WhatsApp’s business app. WhatsApp, which is the most popular app in India, is informally used by countless of additional merchants in the country.

25 Jun 2020

TikTok launches TikTok For Business for marketers, takes on Snapchat with new AR ads

TikTok is announcing to advertisers that it’s open for business. The company is today officially introducing a new brand and platform called “TikTok For Business” that will serve as the home for all its current and future marketing solutions for brands. At launch, the site will include access to TikTok ad formats, including its marque product, TopView, which is the ad that appears when you first launch the TikTok app. Other products under this TikTok For Business umbrella include Brand Takeovers, In-Feed Videos, Hashtag Challenges, and Branded Effects.

Brand Takeovers are the 3-5 second ads that can be either a video or image. In-Feed Videos can be up to 60 seconds in length and run with the sound on. Hashtag Challenges allow brands to participate in the user community by inviting TikTok users to create content around a hashtag of their choice. This includes Hashtag Plus, which also adds a shopping feature to this experience.

Meanwhile, Branded Effects allow brands to insert themselves more directly into the content creation experience. The effects allow a brand or product to be added to a video in a 2D, 3D, or now AR format in either the foreground or background of the video. These can also be combined with Hashtag Challenges to boost engagement with the brand.

The new AR effect, “Brand Scan,” is being added today alongside the formal launch of TikTok For Business itself. Digiday had previously scooped TikTok’s AR ad plans, noting how these would present a direct challenge to Snapchat’s Sponsored Lens and Word Lenses AR formats.

Except for the AR effect, most of the marketing products on TikTok For Business were offered before today, but the new platform organizes them under one roof and provides a place to introduce new products, as they arrive.

In addition, the platform is launching a new e-learning center that will help marketers learn about TikTok and its ad offerings. This center will include product guides, resources and creative best practices to help them launch successful campaigns or learn about the Branded Effects Partner Program.

TikTok doesn’t publicly disclose the pricing for its ad tools and solutions, but says pricing is based on what the brand wants to achieve and the scope of its campaign. Its own website details some of its budgeting requirements, like a $50 minimum on both daily campaign budgets and total budgets, for example. Digiday recently reported TikTok’s ad rates on a CPM basis have been cheap amid the recession, in comparison with Facebook.

Image Credits: TikTok

Today, the brands work closely with TikTok on buying and managing their campaigns and on performance reporting. But TikTok is working to roll out new solutions that will make this process easier.

The launch of the new platform aims to move TikTok from being a place where marketers can experiment, to one that demands a seat at the table alongside other social platforms, like Facebook, Instagram, Twitter and Snapchat.

The company will present the platform to brands and advertisers at the IAB’s NewFronts later this afternoon, where it will position itself as a place where marketers create work that becomes a part of the TikTok community, instead of being separate from it. On TikTok, some marketing campaigns were so successful that TikTok users made their own version of it, for instance.

The presentation will also pitch the idea that the TikTok platform is a place where culture and trends are created and shared globally, and where content can go viral in hours across a diverse audience.

Related to this, TikTok also noted it’s testing a new platform called Creator Marketplace in select regions. This platform, introduced last year, allow brands to discover and partner with TikTok content creators on paid brand campaigns, similar to YouTube’s BrandConnect (which recently changed its name from FameBit).

TikTok’s revenue had been growing ahead of today’s format debut of its platform for marketers. This January, reports claimed its revenue was on track to skyrocket over 300% by Q4 2020. The Information more recently reported TikTok’s U.S. revenue was expected to hit $500 million this year.

“With the launch of TikTok For Business, we set out to embrace the creative, positive, and real moments that make our community so special with solutions for businesses to connect and grow with our wonderfully expressive community,” said TikTok’s Managing Director for Global Business Marketing, Katie Puris, in an announcement.

“As we continue to build a platform where brands bring immense value to the user experience, we’re excited to continue investing in solutions that give brands a platform to inspire others, be discovered, and meaningfully connect with the TikTok Community,” she added.

25 Jun 2020

Connect Ventures outs $80M third fund to back ‘product-led’ seed-stage founders

Connect Ventures, the London-based seed-stage VC that was an early investor in Citymapper and Typeform — and more recently backed scaling startups such as Curve and TrueLayer — is announcing a new $80 million fund to continue investing in “product-led” founders.

Backing the new fund is a combination of existing and new LPs including Top Tier Capital Partners, Isomer Capital, the U.K. taxpayer’s British Patient Capital, De Agostini, Big Society Capital, Draper Esprit and Korelya Capital. Connect’s last fund, raised in 2016, was around $62 million based on today’s exchange rate, so this is a slightly larger amount of deployable capital.

Launched back in 2012 when there was still a very limited supply of institutional capital at seed-stage in Europe (and when seed cheques were often called Series A!), Connect Ventures is pan-European and invests in B2B and consumer software categories including SaaS, fintech, digital health and “future of work”.

Running throughout the firm’s investment thesis is a product focus, with the belief that “product-led, software entrepreneurs” are the kinds of founders most likely to transform the way we live and work at scale.

You can see this digital product bent throughout a lot of its portfolio companies. For example, as B2B SaaS companies go, Typeform is about as product-focused as they come. More obviously, consumer fintech plays such as finance app Emma, and all-your-cards-in-one app Curve, also live and die by their respective apps — a theme that will continue going forward with this third fund.

“We’re interested in building long term relationships with founders who have the obsession and focus required to build product-led companies, and the ambition to build category leaders,” says Sitar Teli, general partner at Connect Ventures, in a statement.

One other notable thing about Connect Ventures is that it has always and continues to do fewer deals per year than many seed-stage firms — so-called “conviction investing”, as it is often referred to today. In other words, the opposite to a spray ‘n’ pray approach that favours diversification. That means not only placing bigger (and therefore riskier) bets in a smaller number of early-stage companies, but also throwing more support behind those investments, including taking a board seat, in a bid to help tip the scales towards success.

“We’ve intentionally created a low volume, high conviction, high support investment firm to back these founders,” adds Teli. “That’s why we’ll be targeting the same curated number of seed investments with this fund, using the larger fund size to provide the right capital and support on our journey together”.

On that note, Connect says it has already started deploying this fund with recent investments. They include BSit (the subscription-based childcare and babysitting platform), Oyster (the distributed talent enablement platform), and, as already mentioned, fintech Emma.

Alongside Teli, Connect Ventures’ two other general partners are Pietro Bezza and Rory Stirling (see TechCrunch’s previous coverage of Stirling’s recruitment). The firm has backed over 50 startups to date.