Author: azeeadmin

It’s hard to keep up with the fundraising spree in China’s autonomous driving industry these days. Guangzhou- and California-based robotaxi company WeRide, which counts Renault-Nissan-Mitsubishi Alliance as one of its strategic investors, has raised over $600 million in just under five months.

The four-year-old upstart said in May that its valuation leaped to $3.3 billion in its Series C fundraising. WeRide has kept the details of the round privy until today when it announced the investment was a lofty sum of $310 million from Alliance Ventures, a strategic venture capital fund operated by Renault-Nissan-Mitsubishi, China Structural Reform Fund, a Chinese state-owned private equity fund, and Pro Capital, which manages China’s CDB Equipment Manufacturing Funds.

It’s unclear how much WeRide has raised since its inception as some of its investments were undisclosed. It pulled in “tens of millions of dollars” from a Series A round.

This is the second time Renault-Nissan-Mitsubishi has shelled out money for WeRide following its initial strategic investment back in 2018. The follow-on funding came as the two companies strengthen ties to develop Level 4 driving vehicles for the Chinese market. Electric cars from the Dongfeng-Nissan joint venture, automated by WeRide software, have been providing robotaxi service in Guangzhou for 18 months. WeRide uses Nissan vehicles in California for research and development.

Ashwani Gupta, COO of Nissan, gave an assuring statement about the partnership: “As China stands at the forefront of helping define the future of mobility, we are delighted to partner with WeRide to bring even more innovative technologies and services to enrich people’s lives in China.”

WeRide similarly sounded rosy about the alliance with Nissan. “Throughout the past three years, they have been playing a critical role in supporting WeRide’s autonomous driving platform, hence, enabling us to establish a leading fleet of robotaxis,” said Tony Han, WeRide founder and CEO .

“With the continued support of Nissan, we will accelerate the commercial use of our driverless robotaxis in China.”

Joyride, a Toronto-based company that provides white label apps, back-end analytics and multi-modal fleet management for shared micromobility startups, has raised $3.7 million — seed money that it says will help it reach a greater number of small, local operators. 

The company, which operates in more than 160 markets in every continent besides Antarctica, has primarily been able to generate enough revenue to support its business since its founding in 2014. With the fresh capital, Joyride will double down on its ability to help local operators find and finance the right vehicles, access insurance programs from trusted partners and learn how to deploy a profitable fleet. Joyride has already offered these services to an extent alongside its SaaS business model, but wants to feature them more prominently as its business grows.

“Really early on in the pandemic, we saw companies like Bird and Lime pull out of almost every market they were in, and then almost right away we started to get a lot of local entrepreneurs from those cities contacting us and saying, ‘Hey, Bird and Lime just left. I see a real opportunity here for me to run a micromobility business for myself,’” Joyride’s founder and CEO Vince Cifani told TechCrunch.

Since last year, Joyride has seen interest from entrepreneurs looking to start small scooter and e-bike share businesses increase four-fold compared to pre-pandemic numbers, Cifani said. That looks like about 150 requests per week. Joyride’s stats point to an emerging trend of local operators beginning to spring up in the parts of the world perhaps deemed too small fry for the big operators. 

Over the last couple of years, the industry seems to have been on the consolidation path, especially when we look at acquisitions like Lime buying Jump and Boosted and Bird buying Circ and Scoot. But we haven’t really seen consolidation among the hundreds of smaller businesses operating locally, said Cifani. And while they may be small individually, they’re mighty in numbers, quietly cropping up in towns and cities across the globe and privately at hotels and on campuses. In some cases, like with The Hague in the Netherlands, fleets are being operated by public transit. 

As local operators proliferate, the opportunity for companies like Joyride grows. In Germany, a similar software provider Wunder Mobility recently launched a lending division to help micromobility startups finance fleets.

“We’ve identified that there are over 10,000 different markets for these types of local operators to run this type of business,” said Cifani. “So if it’s taken Bird, say, half a billion dollars to get into 100 plus markets, are they actually going to raise $100 billion to try and get into every single market opportunity in the world? The inflection point for us is that there’s a huge opportunity for this long tail market, and we’ve seen Bird try to pivot into that space as well with its fleet manager model.”

Under Bird’s fleet manager model, which made up 94% of the company’s “sharing” revenue in the second half of 2020, the vehicles and software are supplied to local operators. Bird always maintains ownership and branding of the scooters. The fleet managers are responsible for fleet deployment and rebalancing, sanitization, and general care and maintenance of the Bird vehicles. In exchange, the operators receive a portion of the fee that users pay to rent the scooters.

Joyride is different. The company helps customers buy fleets outright from manufacturing partners and in some cases helps them finance their vehicles.

Where the big players like Bird and Lime have chased scale in the push to become profitable, Cifani says many of Joyride’s operators running smaller operations tell him they’ve paid back the money for all their vehicles within a few months. 

Joyride’s seed round was led by Proeza Ventures, Urban Innovation Fund and Craig Miller, former CPO of Shopify, a platform that has similarly helped democratize the e-commerce space. Cifani says Joyride will be doing a Series A in the near future.

Sohail Prasad and Samvit Ramadurgam are cofounders who met during Y Combinator’s 2012 summer batch and went on to cofound Forge, which helps accredited investors and institutions buy and sell private company shares and which most recently raised $150 million in new funding in May.

Forge — originally known as Equidate —  has taken off as demand for private company shares has ballooned. The company, launched in 2014, has now raised $250 million altogether, including from, Deutsche Börse, Temasek, Wells Fargo, BNP Paribas, and Munich Re. It acquired rival SharesPost last year for $160 million in cash and stock. According to the company, it now has more than $14 billion in assets under custody.

Prasad and Ramadurgam — who helped hire Forge CEO Kelly Rodriques back in 2018 — say they’re excited about that success. They still own a stake in the company; they’re non-voting board members.

But after spending 18 months as co-president of Forge at the outset of Rodrigues’s tenure, they left early last year to begin tinkering on a new idea, one that Prasad says is centered around giving a much wider pool of people access to private company shares. Called D/XYZ (pronounced “Destiny”), the idea is to enable any investor — not just the 1% —  to invest in startups whose services they use and love.

Unfortunately, the two aren’t offering much more of a curtain raiser than that right now, though Prasad suggests D/XYZ is neither a new fund nor a crowdfunding vehicle. It’s also not selling any tokens, we gather. Instead, Prasad hints at a new product — the likes of which the public hasn’t seen before — saying the company is being cautious in how much it shares publicly because it first wants to “get the go-ahead from regulators, as well as to ensure we have a clear path to market,” he says.

In the meantime, the two have raised $5 million in seed funding from numerous founders who like the idea of making private company shares easier for their parents, friends, customers, partners, and everyone else who likes what they’re building. Among the round’s participants is Coinbase cofounder Fred Ehrsam; Plaid cofounder and CEO Zach Perret; Quora and Expo cofounder Charlie Cheever; Superhuman founder and CEO Rahul Vohra; and serial entrepreneur Siqi Chen, who most recently founded a finance software company called Runway.

As for some of the nascent startup’s most obvious competition, Prasad doesn’t sound concerned. Asked, for example, about Carta, a well-funded company that helps private companies and their employees manage and sell their stock and options and that has long talked about democratizing access to private company shares, Prasad says it remains very much a direct competitor instead to Forge given that both cater first and foremost to companies, not individuals.

And what of SPACs, the special purpose acquisition companies that are moving private companies onto the public market faster, allowing (at least in theory) more people to access high-growth companies at earlier stages? It’s a partial solution, says Prasad. But the way he sees it, “SPACs are more a reflection that people want late-stage access to private tech and their best option right now is giving money to a SPAC manager who will hopefully find a promising company to merge with in two years or less.” He calls them a “layer of abstraction.”

Of course, there’s also the question of whether Forge will be a friend of foe if whatever Prasad and Ramadurgam are building succeeds. Could their tech be sold back to their first company? Could Forge come to see them as a rival to its business?

“What we’re doing now is not competitive,” insists Prasad. “It’s more picking up the mantle where we left off. Forge is focused on trading, custody, company solutions and data. It has built what some call boring plumbing.” Now that the plumbing has been erected, it has “enabled a lot of other interesting things to be built, too.”

So is D/XYZ working with Forge in some capacity? Prasad demurs. “Potentially,” he says.

In other words, stay tuned.

Pictured above, left to right: Sohail Prasad and Samvit Ramadurgam.

The founders of Holy Grail, a two-year old startup based in Cupertino, California, are taking a micro approach to solving the outsized problem of capturing carbon.

The startup is prototyping a direct air carbon capture device that it is modular and small — a departure from the dozens of projects in the U.S. and abroad that aim to capture CO2 from large, centralized emitters, like power plants or industrial facilities. Holy Grail co-founder Nuno Pereira told TechCrunch that this approach will reduce costs and eliminate the need for permits or project financing.

While Holy Grail has a long development and testing phase ahead, the idea has captured the attention and capital from well-known investors and Silicon Valley founders. Holy Grail recently raised raised $2.7 million in seed funding from LowerCarbon Capital, Goat Capital, Stripe founder Patrick Collison, Charlie Songhurst, Cruise co-founder Kyle Vogt, Songkick co-founder Ian Hogarth, Starlight Ventures and 35 Ventures. Existing investors Deep Science Ventures, Y Combinator and Oliver Cameron, who co-founded Voyage, the autonomous vehicle acquired by Cruise, also participated.

The carbon capture device is still in the prototype stage, Pereira said, with many specifics – such as the anticipated size of the end product and how long it will likely function – still to be worked out. Cost-effectively separating CO2 from the air is an extremely difficult problem to solve. The company is in the process of filing patents for the technology, so he declined to be too specific about many characteristics of the device, including what it will be made out of. But he did stress that the company is taking a fundamentally different technical approach to carbon capture.

“The current technologies, they are very complex. They are basically either [using] temperature or pressure [to capture carbon],” he said. “There is a lot of things that go into it, compressors, calciners and all these things.” Pereira said the company will instead use electricity to control a chemical reaction that bind to the CO2. He added that Holy Grail’s devices are not dependent on scale to achieve cost reductions, either. And they will be modular, so they can be stacked or configured depending on a customer’s requirements.

The scrubbers, as Pereira calls them, will focus on raw capture of CO2 rather than conversion (converting the CO2 into fuels, for example). Pereira instead explained – with a heavy caveat that much about the end product still needs to be figured out – that once a Holy Grail unit is full, it could be collected by the company, though where the carbon will end up is still an open question.

The company will start by selling carbon credits, using its devices as the carbon reducing project. The end goal is selling the scrubbers to commercial customers and eventually even individual consumers. That’s right: Holy Grail wants you to have your own carbon capture device, possibly even right in your backyard. But the company still likely has a long road ahead of it.

“We’re essentially shifting the scaling factor from building a very large mega-ton plant and having the project management and all that stuff to building scrubbers in an assembly line, like a consumer product to be manufactured.”

Pereira said many approaches will be needed to tackle the mammoth problem of reducing the amount of CO2 in the atmosphere. “The problem is just too big,” he said.

Usually, a teacher who grades students on a curve is boosting the efforts of those who didn’t perform well on the test. In the case of cloud companies, however, it’s the other way around.

As of Q1 2021, startups in this sector have median Series A rounds around $8 million, reports PitchBook. With $100+ million Series D rounds becoming more common, company valuations are regularly boosted into the billions.

Andy Stinnes, a general partner at Cloud Apps Capital Partners, says founders who are between angel and Series A should seek out investors who are satisfied with $200,000 to $500,000 in ARR.

Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.

Usually a specialist firm, these VCs are open to betting on startups that haven’t yet found product-market fit.

“At this phase of development, you need a committed partner who has both the time and the experience to guide you,” says Stinnes.

These observations aren’t just for active investors: This post is also a framework for new and seasoned founders who are getting ready to knock on doors and ask strangers for money.

Thanks very much for reading Extra Crunch this week!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Maybe neobanks will break even after all

Image Credits: Nigel Sussman (opens in a new window)

Alex returned from a week of vacation with a dispatch about the profitability of neobanks Revolut, Chime and Monzo.

“In short, while American consumer fintech Chime has disclosed positive EBITDA — an adjusted profitability metric — many neobanks that we’ve seen numbers from have demonstrated a stark inability to paint a path to profitability,” he writes.

“That could be changing.”

How to land the top spot in Google Search with featured snippets in 2021

Image Credits: IngaNielsen / Getty Images

“Google search is not what it used to be,” Ryan Sammy, the director of strategy at growth-marketing agency Fractl, writes in a guest post. “We all want to be No. 1 on the search results page, but these days, getting to that position isn’t enough. It might be worth your while to instead go after the top featured snippet position.”

Sammy writes that earning the featured snippet spot is “one of the best things you can do for your SEO.” But how do you land your page in the coveted snippet perch?

What does Red Hat’s sale to IBM tell us about Couchbase’s valuation?

Image Credits: Getty Images

After noSQL provider Couchbase filed to go public, joining the ranks of the Great IPO Rush of 2021, Alex Wilhelm looked into its business model and financial performance, with a goal of better understanding the company — and market comps.

Alex used Red Hat, which recently sold to IBM for around $34 billion, as a comp, determining Couchbase “is worth around $900 million” if you use the Red Hat math.

“The Red Hat-Couchbase comparison is not perfect; 2019 is ages ago in technology time, the database company is smaller and other differences exist between the two companies,” Alex notes. “But Red Hat does allow us the confidence to state that Couchbase will be able to best its final private valuation in its public debut.”

How much to pay yourself as a SaaS founder

Image Credits: AlenaPaulus (opens in a new window) / Getty Images

Anna Heim interviewed SaaS entrepreneurs and investors to find out how much early-stage founders should pay themselves.

Startups run by CEOs who take home a small salary tend to do better over the long run, but there are other points to consider, such as geography, marital status, and frankly, what quality of life you desire.

Waterly founder Chris Sosnowski raised his own pay to $14/hour last year; at his prior job, his salary topped $100,000.

“We had saved money up for over a year before we cut out my pay,” he told Anna. “I can live my life without entertainment … so that’s what we did for 2020.”

How much are you willing to sacrifice?

The early-stage venture capital market is weird and chaotic

Image Credits: Nigel Sussman (opens in a new window)

Alex Wilhelm and Anna Heim had been hearing that Series A raises were coming later, while Series Bs were coming in quick succession after startups landed an A.

That piqued their curiosity, so they put feelers out to a bunch of investors to understand what’s going on in early-stage venture capital markets.

In the first of a two-part series, Alex and Anna examine why seed stage is so chaotic, why As are slow, and why Bs are fast. In their first dispatch, they looked at the U.S. market.

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for June 22, 2021. We have startup product news, funding rounds and a roster of Big Tech updates for you today. But before we get into all of that do not forget to sign up for TechCrunch Spotlight: Pittsburgh startup Pitch-Off. Also the Equity podcast crew are hosting a live taping this Thursday that should be a lot of fun. I’ll be there! — Alex

The TechCrunch Top 3

• Twitter starts rolling out Super Follows and ticketed Spaces: The great product push at Twitter continued today with an early rollout of its Super Follow feature. If you have 10,000 followers and tweet about once per day, you could be eligible to charge people from $2.99 to $9.99 per month for bonus tweets. The company is also rolling out ticketed Twitter Spaces, its live-audio product.
• Another startup taking on Google: While we await the launch of Neeva’s subscription search alternative, Brave has put its own search offering into the market. You can give it a test here, if you’d like. The short gist is that it’s a “nontracking search engine built on top of an independent index and touted as a privacy-safe alternative to surveillance tech products like Google search,” TechCrunch wrote.
• The early-stage startup funding market in focus: TechCrunch dug into the world of seed and early-stage venture capital rounds that startups are raising today. After a VC tipped us off to the concept of Series As coming late and Series Bs coming early, we asked a host of other investors about the idea. What did we learn? That some startups can start raising the moment they close their last round. Wild.

Startups

Everyone and their favorite pup raised money today, so we’re breaking our startup coverage into two chunks. The first is focused on product news. The second on funding rounds. Let’s go:

• Airbank is building a small and midsized fintech service to help aggregate all of a company’s bank accounts and financial data. Read the story here.
• Racial Inequity Drawdown is a framework that aims to “address racial inequity in startup investing and in the broader world,” TechCrunch reports.
• Squad launched a new mobile app that connects groups of friends through time-gated audio messages. You have 24 hours to hear what your friends said now that Squad has completed its focus-shift to more intimate collections of friends from interest groups.

Turning to the money world, there are more rounds than we can get to today. But here’s a selection of favorites:

• Mollie raises $800 million for its payment-integration service: Dutch startup Mollie is now worth $6.5 billion after raising nearly $1 billion in a single round. The startup “provides a way for businesses to integrate payments into sites, documents and other services by way of an API,” TechCrunch wrote. Its new round and valuation implies that there’s room yet in the payments space for more mega-unicorns. Still.
• Speaking of fintech, Australian startup Zeller just raised AUD$50 million at a AUD$400 million valuation. It provides POS and card services for SMBs.
• Lidar-focused Quanergy Systems is going public: Via a SPAC, of course. You can peruse its investor deck if you want all the gritty projections. What matters here is that the SPAC boom is not done, even if it appears to be slowing. And we’re hearing from Series-B-level founders that SPACs are already hitting them up. Expect more and weirder SPAC deals over time.
• Oyster is now a half-unicorn: That’s what we learned when the startup focused on supporting employees outside of a company’s home country raised a $50 million Series B that valued it at nearly $500 million.
• Vantage raises $4M to help folks manage their AWS spend: All that growth that Amazon’s AWS cloud service has managed in recent years was built on rising customer spend. And some AWS customers want to spend less. And Vantage is going to help.
• G2 raises $157 million to help companies choose software: Software is such a huge category that even niches can support a host of competitors. But all that spend means lots of companies making choices about what software to leverage. G2 wants to help. And it is now a unicorn after its investors poured nine-figures of capital into its coffers at a valuation of more than $1 billion.
• Transmit raises $543 million in a Series A to help kill passwords: The company is now worth $2.2 billion, with plans to use its new money to “expand its reach and investing in key global areas to grow the organization.” Any move to kill passwords is TechCrunch-approved.

How much to pay yourself as a SaaS founder

Anna Heim interviewed SaaS entrepreneurs and investors to find out how much early-stage founders should pay themselves.

Startups run by CEOs who take home a small salary tend to do better over the long run, but there are other points to consider, such as geography, marital status, and frankly, what quality of life you desire.

Waterly founder Chris Sosnowski raised his own pay to $14/hour last year; at his prior job, his salary topped $100,000.

“We had saved money up for over a year before we cut out my pay,” he told Anna. “I can live my life without entertainment … so that’s what we did for 2020.”

How much are you willing to sacrifice?

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

Big Tech Inc.

Another day, another slew of headlines discussing the latest tech and government scrap. Today we learned that the U.S. government may review Amazon’s plan to buy a huge movie studio. There was also more from India today, with news breaking that the country is digging into Google over its smart TV market. On the same theme, the EU is now investigating Google’s adtech software from an antitrust perspective.

In related news, the push to unionize Amazon employees is not stopping in its home market.

TechCrunch Experts: Growth Marketing

Image Credits: SEAN GLADWELL (opens in a new window) / Getty Images

Today we’re featuring one of the recommendations that was submitted to our survey. Stay tuned throughout the week as we highlight more responses!

Name of Marketer: Ladder

Recommendation: “They really get what I need. By testing different messaging on different personas, we discover what works and what doesn’t to better understand our users and prospects. This is gold for a company at our stage. Showing those results to our investors blew their minds.”

Submit your own recommendation here.

Community

Natasha Mascarenhas wondered out loud “what makes a great investor?” We asked you for your thoughts, and a lot of you have weighed in. Still time to vote and share your two cents.

Speaking of sharing, we put out our last call for startups to be included in our Pittsburgh Spotlight Pitch-Off. If you know of a great startup in the Pittsburgh ecosystem, share this far and wide and encourage folks to submit their company. While you’re at it, make sure you’re registered to attend on June 29th!

Before our conversation on Extra Crunch Live, Marlon Nichols dropped a bomb on me. The MaC Venture Capital founding managing partner hadn’t actually seen Wonderschool’s original pitch deck before investing in the remote education startup. Our conversation with the company’s CEO, Chris Bennett was the first time he’d been through the seed-stage deck.

Their partnership was a bit of Silicon Valley luck, good timing and some old fashioned networking.

“He was a part of an organization that was helping to bring more diverse founders in touch with investors,” says Nichols. “That was happening when I first moved to the San Francisco Bay Area in 2011. We started to build a casual relationship then. Fast forward to 2016. At my first fund, Cross Culture [Ventures], we were interested in investing in early childhood care. We were actually looking at a number of different companies and one of my partners, Suzy [Ryoo] was like, ‘Have you heard of this company Wonderschool that Chris Bennett was starting, and I was like, ‘Holy shit, I know Chris.’ ”

According to Bennet, Nichols reached out about the opportunity on Facebook Messenger. After the initial conversation and assessing some direct competitors, Nichols says Wonderschool was ultimately the right fit for Cross Culture’s portfolio.

Fittingly, the startup’s origin also has its roots in SV networking.

“I used to go the TED conference every year,” says Bennett. “I met a woman who told me that early childhood education was really important [ … ] She said, ‘A lot of the skills I use today as a CEO, a lot of those seeds were planted before the age of five.’ I thought that was a really wild idea. I started doing research and realized there was a shortage of childcare in America.”

Bennett cringed slightly when we started the process of showing off the company’s early deck. The first thing that jumped out at all of us was just how bare bones the presentation is: white text on a blue background, largely made up of bullet points. There’s not flash — or even graphics — to be found in the entire thing. And the CEO adds that honestly, not much changed aesthetically between that first pitch and the Series A deck.

“It aligned with what we were valuing at the time,” says Bennett. “We were really focused on getting the product-market fit and really trying to understand what our customers needed. And we’re really focused on building the team.”

Perhaps there was something to it, however, as Wonderschool managed to raise $20 million for the latter.

Viva Republica, the Seoul-based fintech company behind Toss, a super app with more than 40 financial services, announced today it has raised $410 million at a post-money valuation of $7.4 billion. The new funding was led by Alkeon Capital, an American investment firm, and included participation from new investors like Korea Development Bank, and returning backers Altos Ventures and Greyhound Capital.

The company plans to launch Toss Bank, a neobank, in September 2021, which it describes as “the final key component” of its super app strategy. It will also use the funding to continue its expansion in overseas markets, including Vietnam, where Toss launched last year.

Viva Republica, which hit unicorn status in 2018, has now raised more than $940 million in equity funding.

Founder and chief executive officer SG Lee told TechCrunch that Toss Bank will focus on lending, and also offer savings accounts with competitive interest rates.

“A lot of challenger banks and neobanks are focusing on the banking experience, such as cards, so their main revenue source is interchange fees,” he said. “Toss is quite different because we already cover all that. We cover P2P payment, money transfer, cards and all sorts of services. So we are focusing on loans, unsecured loans, mortgages, all sorts of loans. We are going to use this vehicle to give the most competitive interest rates to users, and Toss Bank will not have a separate app, since we have super app strategy.”

Toss founder SG Lee

One of the reasons Toss Bank is focusing on loans is because if someone has a middling credit score, many South Korean banks will only offer them loans at subprime interest rates, Lee said. Toss Bank will be able to offer better rates because its risk-scoring model leverages data from its millions of users.

Toss now claims a total of 20 million users (or more than a third of South Korea’s 51.7 population) and of that amount, 11 million are monthly active users.

The app launched as a Venmo-like peer-to-peer money transfer platform in 2015, before adding more services. Now its users can turn to the app for almost all of their financial needs.

For example, they can check their balances at different banks and credit cards on a dashboard. Merchants can use Toss Payments to send and receive online payments and manage their business finances. Other features include budgeting tools, bill payments, a credit score tracker and insurance plans. Lee said more than 20% of bank accounts and credit cards in South Korea are already registered on Toss.

As a financial super app, Toss Bank will be able to supplement information from South Korea’s main credit rating agencies with its own data about user transactions: for example, where do they spend money, how often do they spend, their cash flow and balances.

Lee added that one of South Korea’s leading credit bureaus, KCB (Korea Credit Bureau), backtested Toss’ engine with data from over two million users, and it turned out to be 150% better in terms of differential power analysis and 30% lower in delinquency rates. “This is the first engine that counts this asset-related data, and no machine-learning technologies have been used in credit evaluation” in South Korea, he said. “I think Toss Bank is really well-positioned to disrupt the whole loan market.”

In March, Toss also launched an investment service called Toss Securities, designed to make stock trading accessible to new investors who shy away from traditional brokerages. Over the past three months, it has signed up more than 3.5 million users.

Viva Republica launched Toss in Vietnam, its first international market, in 2020, and the app now has services like no-fee money transfers, debit cards and a financial dashboard through a partnership with CIMB bank. Toss currently claims more than three million monthly active users in Vietnam and says it adds more than 500,000 active users every month. Toss is planning to enter other Southeast Asian markets, too.

Toss hasn’t finalized a timeline, but it is targeting Malaysia for its next market by the end of this year. “The product that we built for Vietnam is actually quite scalable across all Southeast Asia markets, so it’s a matter of time,” Lee said. “But we want to focus on the Vietnam market because it’s scaling increasingly fast and we have to cover the growth.”

As for the possibility of holding an initial public offering or finding another exit opportunity, Lee said the company is still finalizing its plans. “As an Asian company, reaching a $7.4 billion valuation is pretty high, and I think at some point we will face not being able to do more fundraising in the private market. So we’re targeting to raise once more by the end of this year or early next year for over $300 million. That will be our last private fundraising, and then we’re thinking a timeline of three years, and we are reviewing not only for a Korean listing but also a U.S. listing.”

Viva Republica, the Seoul-based fintech company behind Toss, a super app with more than 40 financial services, announced today it has raised $410 million at a post-money valuation of $7.4 billion. The new funding was led by Alkeon Capital, an American investment firm, and included participation from new investors like Korea Development Bank, and returning backers Altos Ventures and Greyhound Capital.

The company plans to launch Toss Bank, a neobank, in September 2021, which it describes as “the final key component” of its super app strategy. It will also use the funding to continue its expansion in overseas markets, including Vietnam, where Toss launched last year.

Viva Republica, which hit unicorn status in 2018, has now raised more than $940 million in equity funding.

Founder and chief executive officer SG Lee told TechCrunch that Toss Bank will focus on lending, and also offer savings accounts with competitive interest rates.

“A lot of challenger banks and neobanks are focusing on the banking experience, such as cards, so their main revenue source is interchange fees,” he said. “Toss is quite different because we already cover all that. We cover P2P payment, money transfer, cards and all sorts of services. So we are focusing on loans, unsecured loans, mortgages, all sorts of loans. We are going to use this vehicle to give the most competitive interest rates to users, and Toss Bank will not have a separate app, since we have super app strategy.”

Toss founder SG Lee

One of the reasons Toss Bank is focusing on loans is because if someone has a middling credit score, many South Korean banks will only offer them loans at subprime interest rates, Lee said. Toss Bank will be able to offer better rates because its risk-scoring model leverages data from its millions of users.

Toss now claims a total of 20 million users (or more than a third of South Korea’s 51.7 population) and of that amount, 11 million are monthly active users.

The app launched as a Venmo-like peer-to-peer money transfer platform in 2015, before adding more services. Now its users can turn to the app for almost all of their financial needs.

For example, they can check their balances at different banks and credit cards on a dashboard. Merchants can use Toss Payments to send and receive online payments and manage their business finances. Other features include budgeting tools, bill payments, a credit score tracker and insurance plans. Lee said more than 20% of bank accounts and credit cards in South Korea are already registered on Toss.

As a financial super app, Toss Bank will be able to supplement information from South Korea’s main credit rating agencies with its own data about user transactions: for example, where do they spend money, how often do they spend, their cash flow and balances.

Lee added that one of South Korea’s leading credit bureaus, KCB (Korea Credit Bureau), backtested Toss’ engine with data from over two million users, and it turned out to be 150% better in terms of differential power analysis and 30% lower in delinquency rates. “This is the first engine that counts this asset-related data, and no machine-learning technologies have been used in credit evaluation” in South Korea, he said. “I think Toss Bank is really well-positioned to disrupt the whole loan market.”

In March, Toss also launched an investment service called Toss Securities, designed to make stock trading accessible to new investors who shy away from traditional brokerages. Over the past three months, it has signed up more than 3.5 million users.

Viva Republica launched Toss in Vietnam, its first international market, in 2020, and the app now has services like no-fee money transfers, debit cards and a financial dashboard through a partnership with CIMB bank. Toss currently claims more than three million monthly active users in Vietnam and says it adds more than 500,000 active users every month. Toss is planning to enter other Southeast Asian markets, too.

Toss hasn’t finalized a timeline, but it is targeting Malaysia for its next market by the end of this year. “The product that we built for Vietnam is actually quite scalable across all Southeast Asia markets, so it’s a matter of time,” Lee said. “But we want to focus on the Vietnam market because it’s scaling increasingly fast and we have to cover the growth.”

As for the possibility of holding an initial public offering or finding another exit opportunity, Lee said the company is still finalizing its plans. “As an Asian company, reaching a $7.4 billion valuation is pretty high, and I think at some point we will face not being able to do more fundraising in the private market. So we’re targeting to raise once more by the end of this year or early next year for over $300 million. That will be our last private fundraising, and then we’re thinking a timeline of three years, and we are reviewing not only for a Korean listing but also a U.S. listing.”

GM has launched a series of new subsidiaries in the past year tackling electrification, connectivity and even insurance — all part of the automaker’s aim to find value (and profits) beyond its traditional business of making, selling and financing vehicles. These startups, including numerous ones that will never make the cut, get their start under Vice President of Innovation Pam Fletcher’s watch.

Fletcher, who joined TechCrunch on June 9 at the virtual TC Sessions: Mobility 2021 event, runs a group of 170 people developing and launching startups with a total addressable market of about $1.3 trillion.

Today, about 19 companies are making their way through the incubator in hopes of joining recent GM startups like OnStar Guardian, OnStar Insurance, GM Defense and BrightDrop, the commercial electric vehicle delivery business that launched in January. Not everything will make it, Fletcher told the audience, noting “we add new things all the time.”

Launching any startup presents challenges. But launching multiple startups within a 113-year-old automaker that employs 155,000 people globally is another, more complex matter. The bar, which determines whether these startups are ever publicly launched, is specific and high. A GM startup has to be a new idea that can attract new customers and grow the total addressable market for the automaker, using existing assets and IP.

The Volt effect

The 2010 Chevrolet Volt is a noteworthy moment on the GM timeline. The vehicle marked the company’s first commercial push into electrification since the 1990s EV1 program. Fletcher, who was the chief engineer of the Chevy Volt propulsion system from 2008 to 2011, noted that the Volt was the beginning of a change within the automaker that eventually led to other commercial products including the all-electric Chevy Bolt, the hands-free driver assistance system Super Cruise and its current work on autonomous vehicle development with its subsidiary Cruise.

I don’t know that the Volt was a root exactly of what we’re seeing today. But I think it was definitely the start of a groundswell of really looking at, how do we inject technology that customers are excited about and care about quickly? How do we engage them deeply in the process? … Which we’ve always done … just, I think there was a climate there where the appetite was so strong with a certain group of customers for the technology that it allowed us to get really a front row seat with them, which was game changing for those of us on the frontlines. And obviously, there have been many programs that have had that in their own ways, but you really see that accelerating now with the advent of everything we’re doing in electrification and autonomous and a portfolio that is just emerging even to the notion of applying some of these great technologies to our new full size, truck and SUV programs. So it’s really broad, based across the company, which is exciting. (Timestamp: 4:56)

Fletcher explained how working to commercialize new technology changed how the company interacted with customers.

With new technologies, one, you get to a new customer base sometimes. So, really understanding what that customer is looking like and putting them at the center of everything. Also, different technologies have different development processes and timelines and pipelines for activity. So, it really allowed us to start to think about how to approach each step of our product development and customer engagement differently. And the Volt was an interesting time too, because that was the advent of new social media was really starting to become much more popular. And so we were very connected with those customers and a great customer base that gave us tremendous feedback very directly, you know, through at the time, what was a new channel. (Timestamp: 3:50)