Author: azeeadmin

Circle has announced that it plans to become a public company. The cryptocurrency company will merge with Concord Acquisition Corp, a SPAC. Circle is better known as one of the founding members of the Centre consortium with Coinbase. Along with other crypto partners, they have issued USD Coin (USDC), a popular stablecoin.

A SPAC is a publicly traded blank-check company. Merging with a SPAC has become a popular way to become a publicly listed company for tech companies.

According to Circle, the deal should value the company at $4.5 billion. Investors involved in the merger have committed $415 million in PIPE financing. The company also recently raised $440 million in capital. In other words, Circle will have plenty of capital on its hands if the merger goes through.

Created in 2013, the company originally wanted to create a mainstream bitcoin payment platform. But the company later pivoted to create a social payments app. Circle became a sort of Venmo clone with some blockchain technology under the hood. At some point, Circle even removed the ability to send and receive bitcoins.

“We never thought of ourselves as a bitcoin startup. The media certainly classified us that way because we were involved with the technology. From the day we founded the company three years ago we’ve focused on trying to build a new consumer finance company. And one that makes money work the way the Internet works,” Circle co-founder and CEO Jeremy Allaire told TechCrunch’s Natasha Lomas in 2016.

While that consumer play didn’t take off, it’s interesting to see that Allaire was already thinking about being able to programmatically move money. In 2017 and 2018, the company pivoted once again to focus on cryptocurrencies. It launched an over-the-counter trading desk for big cryptocurrency investors.

It acquired Poloniex, one of the largest cryptocurrency exchanges in the U.S. at the time. It also launched Circle Invest, a really simple mobile app that let you buy and sell a handful of crypto assets.

But Circle’s most promising product has been its stablecoin — USD Coin, or USDC for short. As the name suggests, 1 USDC is always worth 1 USD. Unlike traditional cryptocurrencies, you can be sure that the value of USDC isn’t going to fluctuate like crazy. Auditing firms regularly check that issuers always keep as many USD in bank accounts as USDC in circulation.

With USDC, moving money from one wallet to another becomes as easy as using standard API calls. The company has then added various infrastructure products around USDC, such as Circle Accounts. Circle has also built ramps to bridge the gap between fiat currencies and cryptocurrencies.

There are currently $25 billion USDC in circulation and the company believes there will $190 billion USDC in circulation by the end of 2023. And Circle plans to leverage the popularity of USDC to build financial services that take advantage of USDC.

The pandemic has been a time for a lot of reflection on both a personal and business level. Tech companies in particular are assessing whether they will ever again return to a full time, in-office approach. Some are considering a hybrid approach and some may not go back to a building at all. Amidst all this, Dropbox has decided to reimagine the office with a new concept they are introducing this week called Dropbox Studios.

Dropbox CEO and co-founder Drew Houston sees the pandemic as a forcing event, one that pushes companies to rethink work through a distributed lens. He doesn’t think that many businesses will simply go back to the old way of working. As a result, he wanted his company to rethink the office design with one that did away with cube farms with workers spread across a landscape of cubicles. Instead, he wants to create a new approach that takes into account that people don’t necessarily need a permanent space in the building.

“We’re soft launching or opening our Dropbox Studios [this] week in the U.S., including the one in San Francisco. And we took the opportunity as part of our focus to reimagine the office into a collaborative space that we call a studio,” Houston told me.

Houston says that the company really wanted to think about how to incorporate the best of working at home with the best of working at the office collaborating with colleagues. “We focused on having really great curated in-person experiences, some of which we coordinate at the company level and then some of which you can go into our studios, which have been refitted to support more collaboration,” he said.

To that end, they have created a lot of soft spaces with a coffee shop to create a casual feel, conference rooms for teams to have what Houston called “on-site off-sites” and classrooms for organized group learning. The idea is to create purpose-built spaces for what would work best in an office environment and what people have been missing from in-person interactions since they were forced to work at home by the pandemic, while letting people accomplish more individual work at home.

The company is planning on dedicated studios in major cities like San Francisco, Seattle, Tokyo and Tel Aviv with smaller on demand spaces operated by partners like We Work in other locations.

As Houston said when he appeared at TechCrunch Disrupt last year, his company sees this as an opportunity to be on the forefront of distributed work and act as an example and a guide to help other companies as they undertake similar journeys.

“When you think more broadly about the effects of the shift to distributed work, it will be felt well beyond when we go back to the office. So we’ve gone through a one-way door. This is maybe one of the biggest changes to knowledge work since that term was invented in 1959,” Houston said last year.

He recognizes that they have to evaluate how this is going to work and iterate on the design as needed, just as the company iterates on its products and they will be evaluating the new spaces and the impact on collaborative work and making adjustments when needed. To help others, Dropbox is releasing an open source project plan called the Virtual First Toolkit.

The company is going all in with this approach and will be subletting much of its existing office space as it moves to this new way of working and its space requirements change dramatically. It’s a bold step, but one that Houston believes his company is uniquely positioned to undertake, and he wants Dropbox to be an example to others on how to reinvent the way we work.

Legacy TV services like HSN and QVC may have put live shopping shows on the map for consumers, but livestream commerce got a completely new boost of life in the pandemic, with retailers and e-commerce leviathans tapping a perfect storm of the craze for video entertainment, a trend (or even municipal rules in some cases) for people to stay away from physical stores, and a surge of e-commerce activity to bring more buying “shows” online.

Now, a startup and app called Popshop Live, which has approached this concept with a new twist — a standalone business that taps into the millennial taste for shopping from smaller and more edgy brands and individuals as much as bigger retailers — is today announcing some funding as it finds a lot of traction with sellers, shoppers and the media world at large.

The startup has closed a Series A of around $20 million (the startup is not disclosing the exact amount but a source very close to the deal confirmed this figure), at a valuation of about $100 million.

The round is being led by Benchmark, with participation also from TQ Ventures (Andrew Marks, Schuster Tanger, and Scooter Braun’s firm), Mantis VC (The Chainsmokers’ VC vehicle), Access Industries and SV Angel as well previous backers Floodgate, Abstract Ventures and Long Journey Ventures who were in Popshop’s seed round in July 2020. Individual investors in this latest Series A include Sophia Amoruso, Baron Davis, Jim Lanzone, Kevin Mayer, Vivi Nevo, Michael Ovitz, Hailey Bieber and Kendall Jenner. Yep… sounds like Popshop has popped, at least with the high-profile set.

But wait… there’s more!… as the late night shopping advertorials love to say. The funding is coming on the heels of the company pulling in some impressive numbers on the back of its livestreaming format. Sellers on Popshop Live are seeing gross merchandise value of $500,000 and more, with 80% of customers returning within 30 days to buy more.

Popshop is not disclosing how many sellers are now on its platform, but says that the figure went up by 500% in the last three months. They include names like 3D Retro, JapanLA, Earthing.VIP, Kettle & Fire and Mall of America, as well as others you may not know but might love the names anyway: they include “Giant Robot” and “EmoWeasel”. (Now who wouldn’t want to buy an old Def Leppard t-shirt from Giant Robot?)

Founded by Danielle Li, who goes by Dan Dan (pictured, right), Popshop lives in the same segment of e-commerce as Depop, the London-based peer-to-peer shopping platform that recently got acquired by Etsy for $1.625 billion.

Like Depop, the ethos of Popshop (funny that the two rhyme with each other) is based around a mix of interesting items, sold by equally interesting people, with some socialzing thrown in for good measure by way of a stream of chat that runs alongside the selling videos, and of course an algorithmic feed that lets you watch show, after show, after show, as you swipe into the night.

The effect is somewhere between diverting entertainment and practical platform for purchasing, and I’m going to be honest, you could imagine it living very well as a feature on an app like Snapchat or Instagram. (I’m guessing that these sites will also try to build something like this, if not try to buy Popshop outright.)

It’s an interesting turn, given how one doesn’t think of channels like HSN and QVC as anything other than uncool, the domain of the middle-aged middle-class everyman, not… Kendall Jenner.

But the idea of more dynamic, streamed sales targeting a much younger demographic has precedent of course: there is YouTube and is massive culture of influencers using the platform to plug brands and products; and Twitch following swiftly behind with its livestreamed, often-janky but very fun productions crafted by the individuals starring in them. And of course, Amazon has long been trying to tap into that (for years, we suspect), most recently incorporating a way for influencers to use its Amazon Live platform, as its own streamed selling show format is called, to sell wares to people.

And there is China — which, with its hugely popular apps TikTok and Wechat (whose features get shamelessly copied by Western counterparts), has clearly become the newest pacemaker for where things are going in the world of apps, and consumer tastes.

The idea with Popshop is that it’s found an audience for this particular genre among younger users in the West, and that it is showing signs of  staying power that will transcend our current “new normal” as everyone loves to call it.

“Livestream commerce is not just a trend in China and through the pandemic, it is an emerging multi-billion-dollar phenomenon whose growth is accelerating every day,” said Benchmark’s Matt Cohler (who is a board member now of the startup). ““Dan Dan has created something fundamentally new, unbounded, and powerful. Her tenacity and commitment to her vision of creating a marketplace for culture is singular.”

And to be clear, it’s not just working with quirky retailers and individuals but the more traditional stores and environments that used to welcome younger shoppers but haven’t been able to.

“Popshop Live was a valuable alternative shopping platform as traditional in-person retail halted during the pandemic,” added Jill Renslow, EVP of business development and Marketing at Mall of America. “Even as the world continues to open up and we welcome shoppers back to Mall of America, we plan to continue live steam shopping to reach new customers in a unique way.”

Popshop said that the funding in part will be used to triple its team, which currently numbers 30. And it’s kicking that off with some interesting hires. Jason Droege, who founded and ran Uber Eats, is joining to head growth strategy; and Bangaly Kaba, who was previously at Instacart as VP of product and Instagram as head of growth, is coming on to build out Popshop’s product.

“There are few new products that seem magical the first time you use them,” said Droege in a statement. “Popshop is a totally new take on content and retail and I’m excited to scale it to new sellers and new categories.”

“Bangaly and Jason are forces to be reckoned with and we’re thrilled to welcome them to our team,” added Li. “Their combined expertise, along with that of our new backers, will accelerate the expansion of our platform across geographies, verticals and product features.” I’ll hopefully talk to Li later and update this with more from her.

A 2016 study by global consultancy PwC states that an estimated 90% of sales in Africa’s major economies come through informal channels like markets and kiosks. In sub-Saharan Africa, 90% of these household retail transactions are carried out via a network of about 100 million MSMEs. 

Africa’s retail payments, mostly cash-based, is expected to reach $2.1 trillion by 2025. Kenya’s MarketForce wants to digitize a large portion of them. Today, the B2B retail end-to-end distribution platform is announcing the close of its $2 million pre-Series A round.

The investors who took part in this round include existing ones — P1 Ventures and Y Combinator, and new ones like Launch Africa, V8 Capital, Future Africa, GreenHouse Capital, Rebel Fund, Remapped Ventures, and some unnamed angel investors.

MarketForce has raised a total of $2.5 million, which includes its $350,000 seed round last year and $150,000 check from Y Combinator as part of the accelerator’s Summer 2020 batch. 

Tesh Mbaabu and Mesongo Sibuti founded MarketForce in 2018. The founders wanted to solve the fragmentation issue they noticed among small retail shops and their distribution networks. In addition, these shops are often used as points for offering financial services to the everyday Kenyan. Thus, MarketForce’s play enables the optimized distribution of FMCG goods and financial services through this network of agents.

It was this business that got the startup into Y Combinator. But upon graduation, MarketForce decided to tests its hands on another model: RejaReja, a B2B e-commerce marketplace for merchants.

RejaReja was launched in December 2020. The platform helps informal retail merchants buy and sell FMCGs and digital financial services. With RejaReja, MarketForce joins a growing list of startups like TradeDepot and Sokowatch trying to revamp supply-chain markets for Africa’s informal retailers.

RejaReja offers next-day delivery for hundreds of SKUs from a handful of FMCG brands. Though the trademark MarketForce retail distribution product is still very much thriving, RejaReja is where the founders think most of the company’s best opportunities lie.

“We’ve run both models simultaneously and we’ve seen much faster traction on the e-commerce side of the marketplace. We’re investing more and more resources into that, and the pre-Series A round was raised to focus on scaling that platform,” CEO said to TechCrunch.

Last month, MarketForce announced the acquisition of another Kenyan retail platform Digiduka. The platform allows informal retailers to resell digital services like airtime, electricity tokens, and bill payments. Digiduka’s acquisition saw that it was fully integrated into RejaReja, which now provides a wallet for retailers to act as agents and collect mobile money and bank payments via mobile app, WhatsApp bots or USSD shortcodes.

MarketForce’s RejaReja runs an asset-light model where it doesn’t own capital assets like warehouses and delivery trucks. Most of the assets are provided by the company’s partners (distributors, manufacturers, and third-party logistics providers) who lease their assets to fulfil orders.

Kiosks using RejaReja have access to various SKUs through an app and can place orders on it. And based on their ordering habits, MarketForce can extend working capital loans to them.

With this round of funding, MarketForce plans to launch RejaReja in Nigeria and scale up the product across more towns in East Africa. The startup has a presence in Kenya, Uganda, and Tanzania, where over 15,000 retail customers use RejaReja to process thousands of orders daily.

On the other hand, MarketForce’s trademark SaaS product has garnered over 10,000 monthly active users despite giving RejaReja a year headstart, and they have performed 300,000 transactions worth more than $500 million. MarketForce clients include Pepsi, Safaricom, Fort Beverages, Lami, Platinum Credit, among others.

“Our clients and partners understand MarketForce’s power to increase sales performance and productivity across markets and industries,” CTO Mesongo said in a statement. “We are building the operating system for retail distribution in Africa, and we have the right combination of technology and team to make our Pan-African vision a reality.”

With computer science degrees, the founders say it was a struggle to scale MarketForce initially. Although both founders didn’t have any prior experience and expertise in fintech or e-commerce before launching the company, they have compensated for that gap by making good hires.

“Retail distribution is a very hardcore business so getting the right talent, the right people who understand the traditional elements in the business but are also willing to innovate and revolutionize the space has also been interesting for us,” the CEO said.

Another challenge the company faced in its early years was that it took a while for partners to get on board because they didn’t understand how MarketForce would operate without owning warehouses and logistics. But over time, as the company generated value to its partners, orders and revenue have started to increase rapidly, with the latter metric recording a 100% month-on-month growth, according to Mbaabu.

“…MarketForce has proven that they know how to leverage the entire retail supply chain as a gateway for digital payments. Their organic, as well as acquisition-driven growth and expansion strategy thus far, has proven that their understanding of unit economics and marginal customer acquisition costs is solid. As a pan-African fintech company, they are very well positioned to tap into the $700 billion that gets transacted in this space every year,” managing partner at Launch Africa, Zachariah George, said in a statement.

Five months after announcing a $3 million seed round from Spero Ventures, shopping-focused live video host Talkshoplive is back, this time with a $6 million seed extension led by Raine Ventures.

The new round of funding gives Los Angeles-based Talkshoplive $10.5 million raised to date and enables it to scale its product management and technical teams. In addition, the company will double-down on category verticals.

Talkshoplive CEO Bryan Moore said he founded the company with his sister Tina in 2018, after he led social media efforts at Twentieth Television (previously known as Twentieth Century Fox) and CBS Television.

Following the initial seed round, Moore said he found himself talking to even more investors wanting to get involved with the company. Then San Francisco-based Raine came along.

“We were not looking to fundraise, but when Raine reached out, what they had to offer was so strategic to our business,” Moore said in an interview. “Live commerce is today where social media was 15 years ago. Everyone is asking what their brand’s live commerce strategy is, but we had to figure out how to build it for the U.S.”

Initially, the company was focused on books and music, working with famous names, such as Matthew McConaughey, Alicia Keys and Dolly Parton. Now, the company is looking at food, beauty, fashion, and sports.

“We’ve had just about everyone from the Food Network essentially start using Talkshoplive,” Moore said. “A large community around food has been built on the platform, especially after Giada De Laurentiis showed everyone the inside of her pantry. Now other personalities are being asked to show their pantries.”

Though the company launched its embeddable player in 2019, Moore says adoption of it became strongest over the last quarter, due in part due to new partnerships.

Talkshoplive debuted a new version of its embeddable player three weeks ago with publishers Hearst, with Oprah Daily, as well as Condé Nast’s Bon Appétit magazine and now launching across additional publications. In fact, sales so far this year have surpassed all of the company’s 2020 revenue, growing 85 percent month over month, he said.

The global pandemic put a spotlight on live commerce platforms, especially those catering to sports cards and other collectible enthusiasts. Seeing new funding recently were sports trading card platform Alt, raising $31 million in May, while Whatnot, specializing in Pokémon cards and Funko Pop figurines, raised $20 million in Series A funding in March.

Meanwhile, Moore said he is looking forward to working with Raine Ventures, which was joined in the round with a group of entertainment and retail angel investors, including former Showtime chairman and CEO Matt Blank, Genius Sports chairman David Levy and Vivre founder Eva Jeanbart-Lorenzotti.

“We believe that Talkshoplive has a differentiated technology and strategy that will continue to drive adoption of live commerce,” Gordon Rubenstein, managing partner of Raine Ventures, said in a statement. “In the case of TSL, not only is there a clear value proposition that engages, supports and aligns incentives of all key players across the retail landscape, but also a fantastic team.”

 

Beyond Meat today announced the arrival of its new plant-based Chicken Tenders at upward of 400 U.S. based restaurants. The news follows continued growth for the California-based faux meat giant, which includes expansion to Walmart stores, Taco Bell restaurants and a big push into China over the past year.

The company says it’s a different product entirely from Beyond’s Chicken Strips despite bearing a similar name. That product predated the company’s wildly popular Beyond Burger patties, but were discontinued back in 2019 due to a lack of popularity compared to other offerings.

The new recipe is largely made of fava beans and peas, contains 14 grams of protein a serving and is less than 40% the saturated fat of standard chicken tenders. The company says there’s no cholesterol, antibiotics or hormones, which not a lot of big-name chicken producers can say.

“As with all our products, Beyond Chicken Tenders offer delicious taste and an exceptional culinary experience, along with strong nutritional benefits,” CIO Dariush Ajami said in a press release tied to the news. “Innovation is at the heart of Beyond Meat, and Beyond Chicken Tenders are the latest example of our mission to create groundbreaking, tasty options that are better for people and for our planet.”

There are no huge nationwide chains being announced among the participating restaurants, which will start offering the foodstuffs today. Here’s a partial list:

• Bad Mutha Clucka
• Bird Bird Biscuit
• Blissful Burgers
• Burger Patch
• Detroit Wing Company
• Dog Haus
• Duke’s on 7
• Epic Burger
• Fire Wings
• Flyrite Chicken
• JAILBIRD
• Melt Bar and Grilled
• Milwaukee Burger Company
• Next Level Burger / Next Level Clucker
• Nuno’s Tacos & Vegmex Grill
• Plant-Based Pizzeria
• Plow Burger
• Pub 819
• Romeo’s Pizza
• Sarpino’s Pizza
• Stanley’s Northeast Bar Room
• Syberg’s
• The Bar Draft House
• The Block Food & Drink
• The Howe Daily Kitchen & Bar
• Toppers Pizza
• Verdine

Lotta weirdly named chicken restaurants out there, folks.

There’s growing competition in the faux chicken market, as well. Last month, Nuggs-maker Simulate announced a $50 million Series B to help it get to the other side.

Swiss Post, the former state-owned mail delivery firm which became a private limited company in 2013, diversifying into logistics, finance, transport and more (including dabbling in drone delivery) while retaining its role as Switzerland’s national postal service, has acquired a majority stake in Swiss-Hungarian startup Tresorit, an early European pioneer in end-to-end-encrypted cloud services.

Terms of the acquisition are not being disclosed. But Swiss Post’s income has been falling in recent years, as (snailmail) letter volumes continue to decline. And a 2019 missive warned its business needed to find new sources of income.

Tresorit, meanwhile, last raised back in 2018 — when it announced an €11.5M Series B round, with investors including 3TS Capital Partners and PortfoLion. Other backers of the startup include business angels and serial entrepreneurs like Márton Szőke, Balázs Fejes and Andreas Kemi. According to Crunchbase Tresorit had raised less than $18M over its decade+ run.

It looks like a measure of the rising store being put on data security that a veteran ‘household’ brand like Swiss Post sees strategic value in extending its suite of digital services with the help of a trusted startup in the e2e encryption space.

‘Zero access’ encryption was still pretty niche back when Tresorit got going over a decade ago but it’s essentially become the gold standard for trusted information security, with a variety of players now offering e2e encrypted services — to businesses and consumers.

Announcing the acquisition in a press release today, the pair said they will “collaborate to further develop privacy-friendly and secure digital services that enable people and businesses to easily exchange information while keeping their data secure and private”.

Tresorit will remain an independent company within Swiss Post Group, continuing to serve its global target regions of EU countries, the UK and the US, with the current management (founders), brand and service also slated to remain unchanged, per the announcement.

The 2011-founded startup sells what it brands as “ultra secure” cloud services — such as storage, file syncing and collaboration — targeted at business users (it has 10,000+ customers globally); all zipped up with a ‘zero access’ promise courtesy of a technical architecture that means Tresorit literally can’t decrypt customer data because it does not hold the encryption keys.

It said today that the acquisition will strengthen its business by supporting further expansion in core markets — including Germany, Austria and Switzerland. (The Swiss Post brand should obviously be a help there.)

The pair also said they see potential for Tresorit’s tech to expand Swiss Post’s existing digital product portfolio — which includes services like a “digital letter box” app (ePost) and an encrypted email offering. So it’s not starting from scratch here.

Commenting on the acquisition in a statement, Istvan Lam, co-founder and CEO of Tresorit, said: “From the very beginning, our mission has been to empower everyone to stay in control of their digital valuables. We are proud to have found a partner in Swiss Post who shares our values on security and privacy and makes us even stronger. We are convinced that this collaboration strengthens both companies and opens up new opportunities for us and our customers.”

Asked why the startup decided to sell at this point in its business development — rather than taking another path, such as an IPO and going public — Lam flagged Swiss Post’s ‘trusted’ brand and what he dubbed a “100% fit” on values and mission.

“Tresorit’s latest investment, our biggest funding round, happened in 2018. As usual with venture capital-backed companies, the lifecycle of this investment round is now beginning to come to an end,” he told TechCrunch.

“Going public via an IPO has also been on our roadmap and could have been a realistic scenario within the next 3-4 years. The reason we have decided to partner now with a strategic investor and collaborate with Swiss Post is that their core values and vision on data privacy is a 100% fit with our values and mission of protecting privacy. With the acquisition, we entered a long-term strategic partnership and are convinced that with Tresorit’s end-to-end encryption technology and the trusted brand of Swiss Post we will further develop services that help individuals and businesses exchange information securely and privately.”

“Tresorit has paved the way for true end-to-end encryption across the software industry over the past decade. With the acquisition of Tresorit, we are strategically expanding our competencies in digital data security and digital privacy, allowing us to further develop existing offers,” added Nicole Burth, a member of the Swiss Post Group executive board and head of communication services, in a supporting statement.

Switzerland remains a bit of a hub for pro-privacy startups and services, owing to a historical reputation for strong privacy laws.

However, as Republik reported earlier this year, state surveillance activity in the country has been stepping up — following a 2018 amendment to legislative powers that expanded intercept capabilities to cover digital comms.

Such encroachments are worrying but may arguably make e2e encryption even more important — as it can offer a technical barrier against state-sanctioned privacy intrusions.

At the same time, there is a risk that legislators perceive rising use of robust encryption as a threat to national security interests and their associated surveillance powers — meaning they could seek to counter the trend by passing even more expansive legislation that directly targets and or even outlaws the use of e2e encryption. (Australia has passed an anti-encryption law, for instance, while the UK cemented its mass surveillance capabilities back in 2016 — passing legislation which includes powers to compel companies to limit the use of encryption.)

At the European Union level, lawmakers have also recently been pushing an agenda of ‘lawful access’ to encrypted data — while simultaneously claiming to support the use of encryption on data security and privacy grounds. Quite how the EU will circle that square in legislative terms remains to be seen.

But there are also some more positive legal headwinds for European encryption startups like Tresorit: A ruling last summer by Europe’s top court dialled up the complexity of taking users’ personal data out of the region — certainly when people’s information is flowing to third countries like the US where it’s at risk from state agencies’ mass surveillance.

Asked if Tresorit has seen a rise in interest in the wake of the ‘Schrems II’ ruling, Lam told us: “We see the demand for European-based SaaS cloud services growing in the future. Being a European-based company has already been an important competitive advantage for us, especially among our business and enterprise customers.”

EU law in this area contains a quirk whereby the national security powers of Member States are not so clearly factored in vs third countries. And while Switzerland is not an EU Member it remains a closely associated country, being part of the bloc’s single market.

Nevertheless, questions over the sustainability of Switzerland’s EU data adequacy decision persist, given concerns that its growing domestic surveillance regime does not provide individuals with adequate redress remedies — and may therefore be violating their fundamental rights.

If Switzerland loses EU data adequacy it could impact the compliance requirements of digital services based in the country — albeit, again, e2e encryption could offer Swiss companies a technical solution to circumvent such legal uncertainty. So that still looks like good news for companies like Tresorit.

 

H Venture Partners brought together more than 75 consumer and retail industry experts to invest in its first fund, raising $10 million aimed at consumer brand startups backed by science.

Founder and Managing Partner Elizabeth Edwards (pictured above) formed the Cincinnati-based venture capital firm in 2017 after 15 years as a VC at other firms, most notably investing in companies, including Peloton, Bill.com, Roots and Freshly.

“Venture capitalists tend to stay away from consumer and science-based investments because they don’t believe consumer brands can be technical,” Edwards said in an interview. “However, you can see all of the technology that goes into lettuce being grown and the packaging technology needed to get it from Point A to Point B without it being spoiled. We love that kind of stuff — where Mother Nature, science and human behavior come together in a consumer brand.”

Check sizes from the fund average $500,000, and H Venture is targeting female founders and founders of color. Edwards says that is in line with statistics showing 85 percent of consumer purchases are made by women, while 93 percent of venture capital is managed by white men. In addition, consumer purchases represent 69 percent of U.S. gross domestic product, but only 3 percent of venture capital investments, she added.

H Venture has already infused capital into 10 companies with a goal toward 15 investments, she said. It looks for the kinds of brands that could be imagined on a store shelf in a retailer, such as Sephora or Target, Edwards added. 

A Sephora store shelf, and an aching back, is actually how she found out about CBD brand Prima, started by The Honest Company founder and former Chief Purpose Officer Christopher Gavigan. H Venture co-led Prima’s $9.2 million seed round in May with Defy Partners, Greycroft and Lerer Hippeau. 

Edwards said she “became a believer” in Prima, not only because it was a brand she discovered when she needed it, but also the plethora of third-party testing and certifications the company had, as well as Prima’s leveraging of the supply chain and aspirations of being more than a CBD brand.

H Venture’s initial portfolio also includes baby food maker Cerebelly and clean wine company Avaline, founded by Cameron Diaz and Katherine Power.

“Avaline is not a celebrity brand like you would find on social media, but Cameron Diaz wrote two books on clean wines and is passionate about making wine the ‘old world way,’” Edwards said. 

Meanwhile, the new fund pulls together a network of founders, entrepreneurs and investors from top consumer and retail companies, half of whom are female, to provide an expertise to startups that Edwards considered unparalleled to Silicon Valley firms. Most of the funds’ backers are people with more than 35 years in the retail and consumer space, running billion-dollar companies.

“The consumer expertise we have is phenomenal; for example, we have the world’s foremost expert on diapers and on baby food,” she said. “He’s not just an investor, he is your board member. H Venture doesn’t claim to be experts in everything, instead we have an incredible network of executives, and helping startups is how they want to spend their time.”

Toronto-based Clearco, a fintech capital provider for online companies, has raised $215 million in a round led by SoftBank Vision Fund II. The financing event closed just weeks after Clearco completed its most recent financing, a $100 million round that quintupled its valuation to $2 billion.

While the trend of rapid-fire, follow-on financing for startups is well-known these days, SoftBank’s involvement is notable for a meta reason: a Japanese Conglomerate that was once known for flashy nine-figure VC checks is putting millions of dollars into a company built on somewhat the opposite ethos: alternative financing that allows founders to avoid venture capital altogether.

And while co-founders Michele Romanow and Andrew D’Souza admit that the two companies are on opposite sides of the spectrum, they also think the existing between the two entities led to a closed deal.

“Their business was to rethink the way venture capital is done,” D’Souza said. “They saw what we were doing on the other end of the spectrum, which was to use technology to thousands of entrepreneurs, and that’s really what resonated.”

Two years ago, Clearco, formerly Clearbanc, launched “the 20-minute term sheet”, a platform that allowed e-commerce companies to raise non-dilutive marketing growth capital between $10,000 to $10 million based on its revenue and ad spend. The founders then flexed rapid capital deployment based on data — and, to date, Clearco has put more than $2.5 billion in over 5,500 companies.

In the past few year, Cleaco’s messaging has changed. Per D’Souza, fast, affordable and “unbiased” capital is still a big reason why people come to the company, but they are now focused on the “technical challenge on how to provide personalized advice and the support you get from an engaged investor, board member, advisor, but at the scale of thousands and millions.” The product map has followed this energy. In the last year, Clearco launched ClearRunway to help SaaS founders secure non-dilutive capital repaid through revenue-share agreements, a valuation tool, inventory buybacks, and ClearAngel, an alternative financing platform for founders with minimal revenue.

Today’s money will be used to help Clearco grow to new geographies beyond Europe, Canada and the United States. Part of its international strategy will include M&A, as copycats emerge in emerging markets. While Clearco has grown from the anti-VC tool to a founder and capital services platform, its opinionated international energy may be what makes it a good deal for SoftBank.

“We believe that we can back a million founders around the world if we can take this alternative financing model in every country,” Romanow said. “Masa has a different model, which was to put $100 million dollar in 100 companies,” she added, referring to Masayoshi Son, the billionaire at the helm of SoftBank. She noted how Son didn’t speak for the first eight minutes of Clearco’s pitch (which ultimately was the result of him paying attention, not questioning Clearco’s utility).

Despite SoftBank’s previously garish personality, the group’s investment strategy may be changing. Per Nikkei Asia, SoftBank Vision Fund II has an average check size of $152 million, far lower than Vision Fund I’s average check size of $931 million. Still, the publication reports that the conglomerate has begun cranking up its investment cadence to one new deal a day.

With the Clearco investment, its clear that it thinks that rewriting venture capital will include adding optionality to it, as well.

An estimated one billion people worldwide face the challenge of proving who they are, according to a World Bank Group report which states that 81% of this number live in sub-Saharan Africa and South Asia without official proof of identity.

It’s no news that Africans spend an inordinate amount of time trying to prove or verify their identities to gain access to address proofs, financial accounts, loans, SIM cards, and social services. Per reports, an estimated 500 million Africans have no formal identification at all.

There’s a dearth of services tackling this challenge but the few that exist are employing artificial intelligence for more dependable processes. Smile Identity is one of such. The company provides ID verification and KYC compliance for African faces and identities. Today, the company is announcing that it has closed a $7 million Series A funding.

Costanoa Ventures co-led the investment with pan-African venture firm CRE Venture Capital. Other investors that participated include VCs like LocalGlobe, Intercept Ventures, Future Africa and unnamed angel investors. Existing investors, including Khosla Impact, ValueStream Ventures, Beta Ventures, 500 Startups, and Story Ventures, also participated. 

Mark Straub founded Smile Identity with William Bares in 2017. As an investor, Straub took regular trips between Mumbai and Nairobi, spending up to a decade in the former. In the early 2000s, it was incredibly frustrating to get SIM cards or provide identity checks in India. But things began to change in 2009 when the India Stack was set in motion. The stack is a unified software platform via APIs that provide governments, businesses, startups, and developers with seamless identification, verification and authentication processes across multiple industries.

“People could easily do things like KYC to sign a document digitally, to share or federate documents across a company or school, to prove a birth certificate, or to prove an educational credential,” he said to TechCrunch. “It really unleashed this wave of innovation, entrepreneurship activity and fundamentally changed financial services and eventually share economy services in India.”

While India greatly advanced with this effort, Africa has largely played catch up. Most businesses on the continent still find it daunting to onboard new customers, salespeople or employees without spending lots of time and energy on people, processes and paperwork.

“I’d seen for 10 or 15 years how long Indians had been waiting and how many problems this set of new national ID combined with these different software protocols solved. I saw how much friction the Stack removed from people’s lives. And I thought if only there was an Africa stack.”

Straub said he began brainstorming with some entrepreneurs in Nairobi and figured that if an African Stack was to be built, three factors needed to come into play — cost, government independence, and spot-on technology. It also happened that at that time, open-source face recognition algorithms on a wide range of smartphones had flooded the market and advanced the state of verification dramatically.

Leveraging camera technology, Straub and his partners started Smile Identity and developed de-biased face recognition that was ultimately more accurate for Africans than the base level open-source algorithms published in U.S. colleges.

“We were able to combine that over time by matching selfies against either identity documents or photos on file at ID issuing authorities. And it was really the combination of those two technologies — the face recognition and all the lightness checks and, and anti-fraud checks that go with it, combined with verifying for the source of truth.” 

Four years on, Smile Identity is now present across six markets in Africa: Nigeria, Kenya, South Africa, Ghana, Rwanda, and Uganda. It also enables 15 different ID types and covers more than 250 million identities, performing over one million identity checks every month.

Its software is used in banking, fintech, ride-sharing, worker verification, public social welfare programs, and telecommunications. Smile Identity says it has about 80 customers who are charged on a per-query basis. Some include payments companies like Paystack, Paga, and Chipper Cash; neo-banks like Kuda and Umba; traditional banks like Stanbic IBTC; cryptocurrency exchanges like Binance, Luno, and Paxful; and supply-chain businesses like Twiga.

Finding product-market fit took a while for Smile Identity at first. There was little or no playbook to follow, so the company had to figure out the right mixture of features and pricing favourable for African markets, smartphones and the internet.

“We have had to build SDKs and mobile wrappers that work for Android and iOS but also things like React Native and Flutter and make them work on mobile web browsers. Almost every one of these solutions we came up with was because we hit some friction point with customers that forced us to innovate. A lot of those were either device issues that we ran into or low internet connection or low or no internet connection conditions.”

But with continuous iteration and working with different clients, Smile Identity is on track for another level of growth. In the past couple of months, there have been numerous talks on fintechs and regulatory requirements ranging from local data protection laws and consent requirements to privacy policies and data impact assessments. These requirements are hard to keep up with, and Straub says Smile Identity is working on templates its clients can use to navigate them.

“Right now, we’ve been building into our products and our services, some of these compliance measures. And that’s ongoing work, of course, as more and more of these requirements are put on companies.”

Straub believes that in many ways, Smile Identity is at an index of the growth of African fintech because of its bilateral usage. According to him, Smile Identity help fintechs spot good and potential bad users who might hurt their businesses in the future. “We are an accelerant of the growth of fintechs and shared economy companies because they know when they spend money on customers, those are real customers because they have actually done verification with us,” he said.

In 2019, Smile Identity secured a $4 million seed round. With this Series A, the company has raised a total of $11 million. Smile Identity plans to use the new investment to improve its services, expand across more markets, add support for more ID types and hire more engineers and support staff across Africa. That said, John Cowgill, a partner at Costanoa, will be joining Smile Identity’s board.