Author: azeeadmin

Nested, the London-based “data-driven” estate agency that provides a cash advance to help you buy a new home before you’ve sold your old one, has laid off 20 percent of its workforce, TechCrunch has learned.

According to sources, the more than 15 staff being let go were informed earlier today. The majority of departures are within Nested’s operations team, including sales, although I understand they also include a number of engineers and other product people.

Contacted by TechCrunch, Nested co-founder Matt Robinson confirmed the departures, citing the uncertainty of Brexit, and the impact this is having on liquidity in the housing market. It is understood that the layoffs are designed to place Nested in a better financial position and enable it to continue weathering the Brexit storm, and ultimately position the company to reach profitability in the future.

Robinson provided the following statement:

We have come off a record year and quarter but with continued uncertainty around Brexit market volumes have fallen significantly. We will continue to grow share, however, given the external environment we must remain cautious as we build the business for the coming years.

Launched in late 2016, Nested competes with high-end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will loan you 90 between 95 percent of the market value of your property as a cash advance so you can purchase a new home prior to your old one selling.

Before Brexit and the uncertainty it has caused with regards to U.K. house prices, that figure was “up to 97 percent” of the market value of the property.

More broadly, the idea behind Nested is to eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, and also ensure that you’re never caught up in the dreaded property ‘chain’ and miss out on your desired home. By becoming a cash buyer, it also puts you in a stronger position to negotiate on your onward purchase.

Related to this, it is unknown to what extent the downward pressure on house prices in the U.K. has affected Nested’s market fit, or its ability to use data to accurately value the properties it lends cash against. However, the core value-add of not being stuck in a chain would seem to be just as useful in a downturn as it is in an overheated market.

Meanwhile, the downsizing of Nested comes just four months after the startup raised a further £120 million in funding, a combination of £20 million equity financing and £100 million in debt. The equity part of the round was led by Northzone and Balderton Capital, while the source of that debt financing, to be used primarily for the cash advances Nested provides to sellers, was not disclosed.

Previous backers in Nested include Rocket Internet’s Global Founders Capital, and London-based Passion Capital. The current listed directors are CEO Robinson, Rocket Internet’s Oliver Samwer, COO James Turford, and Northzone’s Jeppe Heinrich Zink.

Launched in late 2016, Nested competes with high-end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will loan you 90 and 95 percent of the market value of your property as a cash advance so that you’re able to purchase a new home prior to your old one selling.

Before Brexit and the uncertainty it has caused with regards to London house prices, that figure was “up to 97 percent” of the market value of the property.

More broadly, the idea behind Nested is to eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, and also ensure that you’re never caught up in the dreaded property ‘chain’ and miss out on your desired home. By becoming a cash buyer, it also puts you in the strongest possible position to negotiate on your onward purchase.

However, it is unknown how the downward pressure on house prices in the U.K. has affected Nested’s revenue or market fit, or its ability to use data to accurately value the properties it lends cash against. With that said, the core value-add of not being stuck in a chain would seem to be just as useful in a downturn as it is in an overheated market, even if Nested could be taking on greater risk if house prices fall more sharply than its models predict.

Separately — and unrelated to today’s layoffs — TechCrunch has learned that Phil Cowans, who co-founded Nested alongside CEO Robinson and COO Turford, stepped down as CTO of Nested in the last few weeks, although he remains at the company in a different role and as co-founder. He also resigned as a director of Nested on the 25th of February, according to a regulatory filing with the U.K.’s Companies House.

The shot clock’s running out on serious savings to TechCrunch Sessions: Robotics + AI. You have just one more day to score an early-bird ticket and save yourself $100. Improve your ROI the easy way and buy your ticket now before the price increases.

We can’t wait to have you join us on April 18 at UC Berkeley’s Zellerbach Hall. We have a jam-packed day of programming with the best and brightest minds, makers, technologists, investors and engineers in robotics and AI. We expect more than 1,000 attendees ready to share, learn, network and inspire.

We take networking at TechCrunch events very seriously, and this year we’re making it easier and more efficient than ever for you to connect with the right people. CrunchMatch (powered by Brella), is our free business match-making service that helps you find and connect with people based on specific mutual criteria, goals and interests. All ticket holders will receive an email with instructions on how to connect with the service. CrunchMatch not only takes the stress out of networking, it saves shoe leather, too.

We’ve already announced some of our incredible speakers, including Marc Raibert, Melonee Wise, Peter Barret, Anca Dragan and Ken Goldberg. And we’re thrilled that Anthony Levandowski, the co-founder and CEO of Pronto — and a pioneer in the field of autonomous vehicles — will also grace our stage.

If you’re curious about who else you’ll see, hear and meet, be sure to give our event agenda a thorough read. And who knows? We might have a few surprises left, so check back for updates.

A solo ticket isn’t the only way to experience TC Sessions: Robotics + AI. Early-stage startup founders can buy a demo table and maximize their exposure to a huge and hugely influential crowd — you get three attendee passes, too.

TechCrunch Sessions: Robotics + AI takes place at UC Berkeley’s Zellerbach Hall on April 18, 2019. Don’t miss your shot — you have just one day left to buy your ticket and save $100 before the 24-hour clock runs out.

With the announcement today that Mammoth Biosciences has received the exclusive license from the University of California, Berkeley to the new CRISPR protein Cas14, the company now has the last piece of its diagnostics toolkit in place.

Cas14 is a newly discovered protein from the lab of Jennifer Doudna, a pioneer in gene-editing research and a member of the first research team to identify and unlock the power of CRISPR technology.

Doudna and Mammoth Biosciences co-founder Lucas Harrington were part of the team of researchers to identify the new Cas14 protein, which can identify single-stranded DNA. The journal Science published their findings in October 2018.

“With the addition of this protein that is DNA binding and target single strands, it really means we can target any nucleic acid,” says Mammoth chief executive Trevor Martin . “It’s an extension of the toolbox.”

The licensing deal moves Mammoth one step closer toward its goal of low-cost, in-home molecular diagnostics for any illness. “The idea is we want to make this test so affordable that you can imagine going down to your CVS or Walgreens so you can bring this access to molecular level information [to questions like] if my kid has strep or flu before dropping them off to school.”

With the addition of the Cas14 protein to its portfolio, Mammoth can now run even more refined tests to assess multiple aspects of a virus or bacteria that may be present.

“When you run a single test [it’s about] how much information are you getting,” says Martin. “Are you learning that HPV is present or absent, or are you learning whether it’s a strain of HPV which has a risk of cervical cancer.”

The more granular Mammoth can be with its diagnostics, the better able the company is to determine a number of different conditions or factors that may influence treatment down the road.

Now, the company is shifting to product development and testing. The company has signed its first partnerships in the past few months with several undisclosed companies, Martin says.

Mammoth is one of the first companies to turn CRISPR’s gene editing technologies to tackle the diagnostics problem in medicine, rather than concentrate on therapies or drug development. “Even though CRISPR has taken the gene editing field by storm, we’re really at the beginning of what we’re doing.”

While applications for editing as a therapeutic tool have been tied up in patent litigation between the Berkeley lab and the Broad Institute, using CRISPR as a diagnostics tool is pretty clearly the purview of Cal. So Mammoth has fewer obstacles in its path as it works to develop its diagnostics product.

“Long term Cas14 is the most diverse protein,” says Martin, so the protein can perform more varied types of analysis. The other CRISPR proteins are limited in the types of DNA or RNA strands they can target, but the Cas14 is more flexible and can edit any sequence of proteins. 

Apple’s annual developer conference is returning to San Jose for the third year in a row, at the McEnery Convention Center. This year, WWDC will take place on June 3-7. As always, you should expect a keynote on the first day of the event with consumer-focused announcements. This year marks the 30th year anniversary of WWDC.

You can now register on Apple’s website for $1,599 — the same price as in previous years. But buying a ticket doesn’t necessarily mean that you’ll get to attend the event. Apple will hold a lottery to select the lucky winners who get to pay to go to a developer conference.

You have until March 20 at 5 p.m. to register. Developers will receive a notification on the next day if they’ve been selected. And if you’re a student, you should consider applying for a WWDC scholarship. This year, 350 students will be able to attend the event for free through this process.

In addition to some new announcements on the first day, Apple will hold many technical sessions and hands-on labs to help third-party developers in the Apple ecosystem at large. This conference is mostly aimed at developers working on apps for iOS, macOS, tvOS and watchOS. It’s a good way to understand how new frameworks are going to affect your apps and how you could take advantage of them.

Microsoft today announced a new initiative that combines all of the company’s gaming-related products for developers like Xbox Live, Azure PlayFab, Direct X, Mixer, Virtual Studio, Simplygon and Azure under a single umbrella. That umbrella, Microsoft Game Stack, is meant to give game developers, no matter whether they are at a AAA studio or working solo, all the tools they need to develop and then operate their games across devices and platforms.

“Game Stack brings together our game development platforms, tools and services like Direct X and Visual Studio, Azure and Playfab into a robust ecosystem that any game developer can use,” said Kareem Choudhry, the corporate vice president for the Microsoft Gaming Cloud. “We view this as a journey that we are just beginning.”

It’s worth noting that developers can pick and choose which of the services they want to use. While Azure is part of Game Stack, for example, the overall stack is cloud and device agnostic. Undoubtedly, though, Microsoft hopes that developers will adopt Azure as their preferred cloud. These days, after all, most games feature some online component, even if they aren’t multiplayer games, and developers need a place to store player credentials, telemetry data and other info.

One of the core components of Game Stack is PlayFab, a backend service for building cloud-connected games, which now falls under the Azure family. Microsoft acquired the service early last year and it’s worth noting that it supports all major gaming platforms, ranging from the Xbox, PlayStation and Nintendo Switch to iOS, Android, PC and web.

With today’s announcement, Microsoft is launching a number of new PlayFab services, too. These include PlayFab Matchmaking, a matchmaking service the company adapted from Xbox Live matchmaking, but that’s now available to all developers and on all devices. This service is now in public preview. In private preview are PlayFab Party, a voice and chat service (also modeled after Xbox Party Chat), PlayFab Game insights for real-time game telemetry, PlayFab Pub Sub for pushing content updates, notifications and more to the game client, and PlayFab User Generated Content for allowing players to safely share content with each other.

So while Game Stack may feel more like a branding exercise, it’s clear that PlayFab is where Microsoft is really putting its money as it’s competing with Amazon and Google, both of which have recently put a lot of emphasis on game developers, too.

In addition to these announcements, Microsoft also today said that it is bringing an SDK for Xbox Live to iOS and Android devices so that developers can integrate that service’s identity and community services into their games on those platforms, too.

Invest early and stand by your bets. Don’t buy logos or chase unicorns. That’s the Accel philosophy. At 35 years old, it has served them well, bagging the firm dozens of high-profile exits, including nine IPOs and 12 acquisitions in the last four years.

Now, sources confirm to TechCrunch, the respected venture capital firm has nabbed $2.525 billion — its largest pool of capital yet — for three new funds: $525 million for its fourteenth early-stage fund, $1.5 billion for its fifth growth fund and $500 million for its second Leaders Fund, or a dedicated pool of capital meant to help the firm strengthen its positions on particularly competitive bets.

Accel, which operates offices in Palo Alto, San Francisco, London and Bengaluru, is hot off the heels of a big exit. Its portfolio company HotelTonight, in which it was the very first institutional investor, is selling to Airbnb in what is the home-sharing company’s largest acquisition yet. The deal is said to be worth roughly $465 million, or just above the $463 million valuation the on-demand hotel booking application garnered with a $37 million Series E in 2017.

The firm can thank Brian O’Malley, now a general partner at Forerunner Ventures, for introducing Accel to HotelTonight back when he was a general partner at Battery Ventures in 2011. Accel and Battery co-led HotelTonight’s Series A, and O’Malley went on to become a partner at Accel. The firm subsequently invested in HotelTonight’s Series B, C, D and E financings, holding true to its promise to stand by its bets.

Today, Accel is the largest stakeholder in HotelTonight and can expect a decent payout in the coming months. Workplace messaging platform Slack, however, is Accel’s true portfolio standout. The company, worth more than $7 billion, is expected to go public this year. In February, the San Francisco-based unicorn filed confidentially with the U.S. Securities and Exchange Commission to make its public market debut; whether that be via a traditional initial public offering or a direct listing, a newfangled approach to going public, is still up in the air.

Accel, at consumer technology investor Andrew Braccia’s recommendation, invested in Slack when it was still Tiny Speck, a seed-stage gaming startup that would go on to become an office necessity. When Tiny Speck pivoted to become Slack, the company’s chief executive officer Stewart Butterfield offered to pay back it’s Series A and B investors, including Accel. Braccia declined.

“The reason we invested in Tiny Speck was because we were investing in that team,” Braccia told TechCrunch in 2015. “I told Stewart, ‘if you want to continue to be an entrepreneur and build something, then I’m with you.’ ”

Now owning a roughly 20 percent stake in Slack, Braccia’s faith in Butterfield will result in a billion-dollar payday for the firm.

Some other high-profile wins for Accel include Qualtrics, which famously accepted an $8 billion acquisition offer hours before completing a Nasdaq IPO. According to Qualtrics’ IPO paperwork, Accel owned a stake worth more than $1 billion. PagerDuty, which is said to have confidentially filed in January, and CrowdStrike, a cybersecurity business that reportedly hired banks for its IPO last fall, are among Accels’ upcoming exits.

Since Accel’s 2016 fundraise got them a fresh $2 billion to invest in startups, the decades-old firm has nabbed some younger talent to help it navigate an inevitable generational transition. Shortly after that fund announcement, Accel added principals Amit Kumar and Steve Loughlin, a pair of co-founders of Accel portfolio companies CardSpring and RelateIQ, respectively. In 2018, the firm hired Maya Noeth as a principal to lead its consumer growth investments, Ethan Choi to back startups in the enterprise and consumer-subscription spaces and Cherry Miao as a vice president focused on growth-stage companies. 

Its newest cohort of dealmakers — poised to become partners down the line — indicates Accel is conscious of an impending generational transition and prepared for the older investors to pass the baton to the younger folk.

Accel is among several incumbent venture funds to raise money from limited partners in the last year. Bessemer Venture Partners, one of the oldest players in the game, closed on $1.85 billion for its tenth flagship fund in October; Insight Venture Partners brought in $6.3 billion in July; Kleiner Perkins raised $600 million for its eighteenth early-stage fund in late January; and Menlo Ventures grabbed $500 million for Series B and C rounds in February. Other outfits, NEA for example, are in the process of closing up big, big funds.

At a time when nouveau venture funds are raising funds equipped with innovative investment strategies and young teams, Accel and some of its counterparts are proving old dogs can learn new tricks — or, at least, continue to lead the pack with no new tricks at all. 

Gearbest, a Chinese online shopping giant, has exposed millions of user profiles and shopping orders, security researchers have found.

Security researcher Noam Rotem found an Elasticsearch server leaking millions of records each week, including customer data, orders, and payment records. The server wasn’t protected with a password, allowing anyone to search the data.

Gearbest ranks as one of the top 250 global websites, and serves top brands, including Asus, Huawei, Intel, and Lenovo.

TechCrunch contacted GearBest — and through its dedicated security page — to secure the database. The company neither secured the data nor responded to our request for comment.

Rotem, who shared his findings with TechCrunch and published his report at VPNMentor, said names, addresses, phone numbers, email addresses and customer orders and products purchased were among the data exposed. The database also had payment and invoice information, with amount spent and semi-masked names and email addresses.

After reviewing a portion of the data, TechCrunch found the database revealed exactly what customers bought, when, and where the items were sent.

Some of the member-specific records also included passport numbers and other national ID data. Rotem said there was little evidence of encryption, and in some cases none at all.

“The content of some people’s orders has proven very revealing,” Rotem said. Not only are the exposed orders a breach of customer privacy, the exposed data could put customers in parts of the world where freedom of speech and expression is limited in danger. Some of the listings for sex toys and other intimate purchases, for example, could lead to legal repercussions where LGBTQ+ relationships or pre-marital sex are banned.

Countries like the United Arab Emirates and Pakistan have some of the strictest laws, which can lead to punishment by death.

Rotem also found a separate exposed web-based database management system on the same IP address, allowing anyone to manipulate or disrupt the databases run by Gearbest’s parent company, Globalegrow,

It’s not known exactly for how long the server was exposed. Data from internet scanning site Binary Edge showed the database was first detected on March 7.

Shenzhen-based Gearbest has a large presence in Europe, with warehouses in Spain, Poland, and Czech Republic, and the U.K., where EU data protection and privacy laws apply. Any company violating the General Data Protection Regulation (GDPR) can be fined up to four percent of its global revenue.

This is the second security issue at Gearbest in as many years. In December 2017, the company confirmed accounts had been breached after what was described as a credential stuffing attack.

ProdPerfect, a New York-based startup focused on automating QA testing for web apps, has announced the close of a $2.6 million Seed round co-led by Eniac Ventures and Fika Ventures, with participation from Entrepreneurs Roundtable Accelerator.

ProdPerfect started when cofounder and CEO Dan Wilding was VP of engineering at WeSpire, where he saw firsthand the pain points associated with web application QA testing. Whereas there were all kinds of product analytics tools for product engineers, the same data wasn’t there for the engineers building QA tests that are meant to replicate user behavior.

He imagined a platform that would use live data around real user behavior to formulate these QA tests. That’s how ProdPerfect was born. The platform sees user behavior, builds tests, and delivers analysis to the engineering team.

The service continues to build on what it knows about a product, and can then simulate new tests when new features are added based on aggregated flows of common user behavior. This data doesn’t track any information about the user, but rather anonymizes them and watches how they move through the web app. The hope is that ProdPerfect gives engineers the opportunity to keep building the product instead of spreading their resources across building a QA testing suite.

The new funding will go toward expanding the sales team and further building out the product. For now, ProdPerfect simply offers functional testing, which users a single virtual user to test whether a product breaks or not. But President and cofounder Erik Fogg sees an opportunity to build more integrated testing, including performance, security and localization testing.

Fogg says the company is growing 40 percent month over month in booked revenue.

The company says it can deploy within two weeks of installing a data tracker, and provider more than 70 percent coverage of all user interactions with 95 percent+ test stability.

“The greatest challenge is going to be finding people who share our companies core values and are of high enough talent, ambition, and autonomy in part because our hiring road map is so steep,” said Fogg. “Growing pains catch up with businesses as a team expands quickly and we have to make sure that we’re picky and that we reinforce the values we have.”

IPO-bound Lyft has employed a head of diversity and inclusion before, but this time, the person in this role has a more holistic mission. Today, Lyft is announcing Monica Poindexter, formerly Facebook’s global head of diversity business partners, has joined the company to lead the transportation company’s inclusion and diversity efforts.

“I’m in a unique role and have an opportunity to help the organization look at diversity more holistically and look at it through the lens of talent, workforce and marketplace,” Poindexter told TechCrunch. “I’m taking the time to understand the processes internally and identify areas where we can intentionally embed inclusion and diversity into our processes.”

While Poindexter will report to Lyft VP of Talent and Inclusion Nilka Thomas, what ultimately led Poindexter to take the job at Lyft was her sense of commitment from Lyft’s co-founders, John Zimmer and Logan Green.

“I interviewed with John and Logan and was also interviewing them about commitment from the leadership team,” Poindexter said. “That was a key deciding factor. I think that this work is difficult enough and you do want to be sure that you have the top-down support from leadership and are open and willing to learn but also to evolve.”

Lyft brought on Tariq Meyers to serve as its first-ever head of inclusion and diversity back in September 2016. Within his first year on the job, Lyft released its first diversity report, which showed numbers comparable to the likes of Uber, Facebook and Google. Meyers left Lyft in April 2018 to serve as Coinbase’s global head of belonging, inclusion and employee experience.

Last September, Lyft unveiled its second annual diversity report, which showed little change from the year prior. At the time, 40 percent of Lyft’s workforce identified as female while 52 percent of its employees were white.

Competition is the core of capitalism. Competition between companies lowers prices — on average — and ensures that they are forced to innovate lest they lose their markets to others. Competition between workers ensures that people strive to do their best work lest their jobs go to more qualified or faster or cheaper replacements.

Obviously, there is a spectrum here from lethargic monopoly to cutthroat competition that causes more problems than it’s worth (environmental damage in the hopes of cutting costs, fraud, deceit, etc.). Drawing that line though is really, really hard though, and there are unfortunately not many non-academic discussions of how much competition is needed to spur innovation.

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So it was surprising to read an entire chapter about this dilemma comparing China and the U.S. in Kai-Fu Lee’s book AI Superpowers (yes, yes, I am dreadfully behind on this particular book review).

While the book is about AI, Lee is trying to undo American conceptions of Chinese innovation early on in the text. Yes, the country was once a copycat haven, but that has changed as the learnings of copying have led to originality:

The first act of copying didn’t turn into an anti-innovation mentality that its creator could never shake. It was a necessary steppingstone on the way to more original and locally tailored technology products.

In his narrative, American (tech) companies didn’t fail in China because they were incompetent, but rather because they never made the effort to localize:

American public companies tend to treat international markets as cash cows, sources of bonus revenue to which they are entitled by virtue of winning at home. […] American companies treat China like just any other market to check off their global list. They don’t invest the resources, have the patience, or give their Chinese teams the flexibility needed to compete with China’s world-class entrepreneurs.

China’s entrepreneurs didn’t just learn how to build products quickly from their early copying, but also learned that they had to ferociously compete for markets:

The sheer density of competition and willingness to drive prices down to zero forced companies to iterate: to tweak their products and invent new monetization models, building robust businesses with high walls that their copycat competitors couldn’t scale.

Lee’s ultimate point is that by focusing on markets instead of mission, Chinese startups move far faster and more aggressively to seize opportunities. But that also means that there are can be thousands of startups all targeting the same market at the same time, which forces outside-the-box (read: quite possibly unethical or illegal) behavior in order to compete. “For these gladiators, no dirty trick or underhanded maneuver was out of bounds. They deployed tactics that would make Uber founder Travis Kalanick blush.”

I’ve talked a number of times about the “Chinese think Palo Alto is dumpy” problem. But it bears repeating: competition is the key to a startup ecosystem. Competition forces founders to move faster, to hire quicker, to make product decision with alacrity and otherwise to win their markets today and not a year from now. The best founders in Silicon Valley founders understand this, although this secret seems to be increasingly lost today.

History, of course repeats. Just yesterday, it was revealed that Chinese caffeine chain Luckin Coffee received a $200 million loan from investment banks in prep for an IPO. From Julie Zhu and Kane Wu at Reuters:

The firm officially launched its business only in January last year and in July raised $200 million in its maiden funding round that valued it at $1 billion, making it one of the fastest-ever firms to make the ‘unicorn’ milestone.

[…]

The loss-making firm has been expanding at breakneck speed with over 2,000 cafes opened and plans to open 2,500 this year – displacing Starbucks as China’s largest coffee chain in the process.

15 months and larger than Starbucks. That’s speed, and that’s how you compete.

Digging into the S1: Jumia IPO has points for praise and pause

Written by Arman Tabatabai

Jumia grabbed headlines yesterday after the African e-commerce player filed for an IPO on the NYSE. Our writer Jake Bright covered the news and provided insightful context around Jumia’s business model, its footprint, and the state of e-commerce in Africa.

With Jumia en route to becoming Africa’s first public tech company listed abroad, we dug into the company’s S-1 to get a better understanding of all its moving parts. Generally, the story is pretty compelling: Jumia is one of the largest pan-Africa e-commerce businesses with a large and rapidly growing active user base that is positively levered at Africa’s economic development and mobile adoption.

While the company is burning cash and losing hundreds of millions of dollars each year, that’s hardly uncommon anymore. But one area that gave me pause was the company’s margin breakdown.

To measure the economics and operating performance of the company’s core operations, Jumia uses “platform contribution,” a metric it defines as gross profit — excluding revenue from services outside the core platform — subtracted by fulfillment costs from third-party logistics providers, primarily related to freight and shipping. Using this metric, Jumia’s platform contribution was about 9-11% of sales in 2017-18.

However, Jumia’s metric excludes fulfillment and delivery costs associated with Jumia’s network of warehouses, their fulfillment employees, and other related expenses, with the logic being that these costs are fairly flat year-to-year and less indicative of the variable costs of the business. However, as an e-commerce logistics and delivery provider, the unaccounted for fulfillment costs seem at least relevant, if not core.

If we were to include all Jumia’s fulfillment expenses in the calculation, Jumia’s platform contribution would actually be negative 5-11% in 2017-18. While thin to negligible margins aren’t unusual for scaling e-commerce platforms, Jumia’s margins fall short of levels seen in past prospectuses from some of the e-commerce giants Jumia looks up to. Amazon, Alibaba, and even JD.com all had at least a year of positive margins including total fulfillment costs at the time of their S-1s. (Though to be fair here, none of the three companies are apples-to-apples comps — Amazon’s S-1 was decades ago, Alibaba operated on a completely different scale at the time of its IPO, and JD.com used a different model focused on direct sales).

Still, the numbers here are just a little unnerving within the context of Africa’s previous e-commerce failures, as discussed by Jake Bright:

“Jumia’s move to go public comes as several notable consumer digital sales startups have faltered in Nigeria…

…In late 2018, Nigerian online sales platform DealDey shut down. And TechCrunch reported this week that consumer-focused venture Gloo.ng has dropped B2C e-commerce altogether to pivot to e-procurement. The CEO cited better unit economics from B2B sales.

Jumia also competes with services backed by Amazon and Naspers in several of its markets, which can be daunting when competing on economics.

The other disclosure that had me harping on Jumia’s fulfillment expense was in the “Risk Factors” section, where the company highlighted that it operates in markets with under-developed physical, economic, legal, and institutional infrastructure. And while there’s heavy investment going into African infrastructure — which could act as a growth tailwind for Jumia in the long-run — improving, let alone creating, infrastructure takes much longer than doing the same in normal business operations, as we’ve discussed ad nauseam.

Because of the lack of infrastructure, Jumia openly discusses the difficulties of delivery and stable fulfillment in its markets and has had to build out a lot of operational infrastructure itself. To me, it at least raises questions around how quickly Jumia will be able to get its cost structure down and whether it might take a bit longer compared to some of its global e-commerce peers.

Thanks

To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to danny@techcrunch.com.

This newsletter is written with the assistance of Arman Tabatabai from New York

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