Author: azeeadmin

Venmo is adding support for cryptocurrency, starting today. The company says it will begin to roll out the ability for Venmo’s more than 70 million users to buy, hold and sell cryptocurrencies directly in the app, similar to the support Venmo parent company PayPal added late last year. Initially, Venmo will support four types of cryptocurrency: Bitcoin, Ethereum, Litecoin and Bitcoin Cash — the same that PayPal offers its U.S. users.

The company had already announced its plans to introduce cryptocurrency on Venmo in 2021. Both Venmo and PayPal support for crypto come by way of a partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services. 

Though there isn’t much differentiation between what both PayPal and Venmo offers users today, the company explains that the move is more about getting cryptocurrencies in front of a separate, and arguably younger, audience.

“While there is some overlap between the bases, there are also a lot of customers who are discretely either PayPal or Venmo users,” explains Darrell Esch, Venmo general manager and SVP. “So this ultimately gives us a new group of customers who aren’t using PayPal day in and day out the ability to access [crypto] through Venmo.”

He says that Venmo skews younger, with more of its users in their 20s and 30s, compared with the overall U.S. population. They also have other traits that might make them receptive to investing in cryptocurrencies. For example, they’re more likely than the overall U.S. population to have a college degree, they’re solidly middle-income earners and they skew toward digital natives.

The user base has also already begun purchasing crypto, Venmo notes. More than 30% had purchased crypto or equities, according to a 2020 Venmo customer study. This picked up during the pandemic, as well.

At launch, Venmo will leverage its in-app social feed to spread the word about cryptocurrencies. Users can share their crypto transactions to the feed, if they choose. This will raise awareness and engagement with the idea of crypto, as will Venmo’s new educational features. The company says it plans to publish access guides and videos inside the app that will help to answer some of the common questions about cryptocurrencies for those who are just getting started. (See below video, for example.)

Meanwhile, although PayPal announced its U.S. customers could shop with cryptocurrencies via its supported merchant base, Venmo doesn’t immediately have a similar option. However, the company as of February rolled out to its user base a feature called Business Profiles, which enables Venmo users to transact with small sellers and merchants on its app. It’s not difficult to imagine the role that crypto could play here, as well, in the future. Venmo also offers other products, including a debit and credit card, which could also be leveraged in the future to take advantage of a crypto integration, perhaps.

But in the meantime, the only way to use crypto on Venmo is by buying, selling and holding. The company says users can start with as little as a dollar and pay via their linked bank account or debit card. Of note, the Venmo wallet doesn’t connect with that of parent company PayPal, though we understand the exchange rates will be the same.

Support for crypto on Venmo is starting to roll out today and will reach all customers within the next few weeks, Venmo says.

Tesla is working on vehicles tailored to Chinese consumers as complaints about the quality of its electric vehicles send shock waves through the internet in the country.

The American EV giant is mulling new products that will be designed from the ground up for China, Grace Tao, a vice president at Tesla, told 21st Century Business Herald, a Chinese business news outlet, during the Shanghai auto show this week. The vehicles developed in China will also be sold globally, she added.

At the same auto event on Monday, a woman showed up at Tesla’s booth, climbing atop a Tesla car and shouting allegations of faulty brakes made by the company. The person was later detained for damaging the vehicle, and Tesla said on microblogging platform Weibo that her car had crashed due to exceeding the speed limit, not quality issues.

Nonetheless, the protestor won widespread sympathy when videos of her spread online. Many users joined in to vent about their Tesla problems. Posts with the hashtag “Tesla stand turned into a stage for defending rights” garnered over 220 million views on Weibo within two days.

“We have since the start been willing to work with national and authoritative third-party organizations to thoroughly inspect the issues raised by the public. By doing this, we wish to win assurance and understanding from consumers,” Tesla China said in a statement posted on Weibo in response to the incident.

“But we still haven’t fulfilled this wish, mainly because our ways of communicating with customers may be problematic. Secondly, we indeed can’t decide for our customers how they want to resolve these issues.”

Like in the West, Tesla has fostered a cult-like following in China. And along with Apple, it’s one of the few American tech giants that have gained a firm foothold in China. Last year, Tesla shipped nearly 500,000 vehicles globally and China contributed 20% to its revenues.

But the company also faces mounting competition from Chinese homegrown challengers. Xpeng, Nio, and Li Auto, the well-funded startups, as well as old-school carmakers, with help from high-tech firms like Huawei, are ready to take a slice of Tesla’s market. The designed-in-China vehicles are already finding a spot among the more patriotic crowds.

It doesn’t help that the Chinese government is placing more scrutiny over Tesla. In January, the firm was summoned by local regulators over quality concerns, shortly after it recalled several tens of thousands of vehicles in the country. The government restricted the use of Tesla by military facilities over national security concerns, The Wall Street Journal reported in March. Elon Musk later said his company would be shut down if its cars were used to spy.

“Challenger” startups in banking and insurance have upended their industries, and picked up significant business, by building more customer-friendly tools and services — more personalized, easier to access, and usually competitively priced — than those typically provided their bigger, incumbent rivals. Now, a startup out of Romania that is building tools to help the incumbents respond with better services of their own is announcing a significant round of funding as its business grows.

FintechOS, which has built a low-code platform aimed at larger (older) banking and insurance companies to help them build new services and analytics on top of and around their existing infrastructure, has picked up €51 million ($61.5 million at today’s rates).

FintechOS’s opportunity has been to target wave of incumbents in those two industries that have been slowly watching as newer players like Lemonade (in insurance) and a huge plethora of challenger banks (Revolut, N26, Monzo and many others) are swooping in and picking up customers, especially among younger demographics, while they have been unable to respond mostly because their infrastructure is too old and big: turning a huge ship around, as we have seen, is no small task — a situation that has become only more apparent in the last year of pandemic living and the big shift to digital interactions that resulted from it.

“When we launched FintechOS in 2017, we could already see existing solutions to digital transformation would struggle to deliver tangible results. By contrast, our unique approach has quickly inspired a sea-change in how financial institutions address digitization and engage with their customers,” said Teodor Blidarus, co-founder and CEO at FintechOS, in a statement. “Events over the last year have only increased pressure on our industry to evolve and as a result we’re seeing growing demand for our powerful platforms. Our latest round of funding will help us grow at the pace needed to improve outcomes for financial institutions and their customers globally.”

The Series B round of funding is being led by Draper-Esprit, with Early Bird, Gapminder Ventures, Launchub, and OTB Ventures (which all participated in its Series A in December 2019) also participating. There are other backers in the round that are not being disclosed at this time, the startup added. It’s also not disclosing its valuation. FintechOS has raised just under $80 million to date.

FintechOS is active today in the UK and Europe — where it has been growing at a CAGR of 200% and says its services touch “millions” of people, with some of its key customers including the likes of banking giants Societe Generale and IdeaBank and international insurance brokers Howden. The plan will be to continue investing in those markets, as well as expanding internationally.

And it will be adding in more services. Today, the banking platform is designed to help banks launch more retail services for consumers and small and medium business customers, and for insurance companies to build new health, life and general insurance products (there are a lot of synergies in how insurance and financial services companies have been built over the years, and so it’s a natural couplet when it comes to building tools for those industries).

In the financial sector, FintechOS lets banks build in new digital onboarding flows, credit cards and loan products, savings and mortgage products. Insurance products include new approaches to generating and handling quotes, customer onboarding and management and claims automation — which may well FintechOS into closer contact and collaboration with the most successful startup to come out of its home country to date, the RPA juggernaut UiPath.

FintechOS is tapping into a couple of very big trends that have arguably been the biggest in the financial and related insurance industries.

The first of these is the fact that core services around things like credit/loans, current deposits and savings are not just very complex to build but actually have largely become commoditized — similar to digital payments — and so packaging them up and turning them into services that can be integrated by way of an API makes them more easily accessed without the heavy lifting needed to build them from scratch. This lets companies focus instead on customer service or building more interesting tools around those basic services to customise them (for example AI based personalization). Disintermediating basic functions from the services built around them is arguably a bigger trend but it has been especially prevalent in enterprise, which has long been a slow-moving space when it comes to innovation in the back-end, and the front-end.

The second of these is the big swing towards using no-code and low-code tools to empower more people within organizations to get stuck in when they can see something not working as efficiently as it could, and building the workflows themselves to improve that. This also applies to trying out and testing new products — again something that typically has not been done in financial and insurance services but can now be possible with low-code and no-code tools.

“Not only is our technology helping financial institutions become customer centric, but it’s also helping them provide products and services to more people and businesses,” said Sergiu Negut, the other co-founder who is FintechOS’s CFO and COO, said in a separate statement. “With so many markets still underserved, the ability to tailor offerings to a segment of one offers the opportunity to increase financial inclusion and adheres to our ideal that easy access to financial services is essential. We’re delighted to be working with investors who share our views on how fintech should be transforming the financial services industry.”

Notably, Draper Esprit also has backed Thought Machine, another big player in the world of fintech that is taking some of the learnings and models that have helped new entrants disrupt incumbents, and is packaging them up as services for incumbents, too. It takes a different approach to doing this, not using low-code but smart contracts, which could be one reason why the VC doesn’t see the investments as conflict of interest. They are also tackling an enormous market, and so at least for now there is room for them, and many others in the space, such as Temenos, Mambu, Rapyd and many others.

“When we met Teo and Sergiu, we were immediately convinced of their vision: a data led, end-to-end platform, facilitated with a low-code/no-code infrastructure,” Vinoth Jayakumar, partner at Draper Esprit, said in a statement. “Incumbent financial services firms have cost-to-income ratios up to 90%, so we see a huge and increasing need for infrastructure software that allows digitisation at speed, ease and lower cost. Draper Esprit builds enduring partnerships; with the team at FintechOS we hope to build an enduring fintech company that will dramatically change financial services experiences for people all over the world.”

 

 

Earlier this year we covered the launch of Heights, a new supplements startup in an increasingly hot category. Feel, is a year-old UK startup with another twist on this world: pure nutritional supplements. It’s now closed a $6.2 million investment, led by Fuel Ventures, with participation from TMT Investments, Sova VC, Richard Longhurst (founder of LoveHoney.com) and Igor Ryabenkiy (founder and GP of Altair Capital).

Feel founder Boris Hodakel says he spun his startup up after looking at the UK’s big health and retail brands including Graze, Tesco, Bulk Powders and Simba Sleep.

In many ways Feel is very akin to Graze. The supplements arrive in a post-box-friendly box and is available in a range of subscription packages. This is basically ‘Graze nuts, but for supplements.’

Feel has a direct-to-consumer subscription model, and is claiming a 60x growth in its first year and 21,000 active subscriptions.

Hodakel’s contention is that while Feel provides higher grade supplements to consumers which cost more to produce, it manages to keep costs down for consumers via direct-to-consumer model.

Hodakel, founder and CEO of Feel said: “Not all vitamins are created equal and the majority you find on retail shelves have a dirty formula that is difficult to absorb by the body, missing natural elements. We’re the cleanest alternative in the market – backed up by science –  and continually invest in making our formulas as effective as possible while still affordable.”

He says he started Feel because, having a skin problem, supplements were part of his health routine, but “the aha moment” happened he realized how many fillers were in normal supplements. “All our formulas are researched and formulated in-house, and we keep updating them, like our flagship multivitamin in just two years is already in its 3rd version,” he said.

Mark Pearson, managing partner at Fuel Ventures added: “The growth and the expansion of Feel’s product line present a really exciting time for Feel and we are supporting them in becoming a significant disruptor to the health supplement market.” 

Alexander Chikunov, Partner at Sova VC added, “Feel is in the process of disrupting consumer habits around vitamin intake, and changing a marketplace worth $144bn by providing its customers with top-quality products, combined with flawless and friendly service.”

In the past ten years, an investment team led by Christian Winter, Jan Sessenhausen, Helmut Klawitter and Wilken Engelbracht worked principally with German family offices, investing in startups such as Klarna, Zalando and Delivery Hero that went on to be worth around €80 billion in total. Today they are launching a VC firm of their own, Cusp Capital, with €300 million ($361m) under their belt. 

Cusp Capital will back early-stage young tech companies across Europe. Its LPs include institutional investors such as the European Investment Fund, KfW Capital, RAG Stiftung, and NRW.BANK, alongside family offices and entrepreneurs.

In a statement Christian Winter, general partner, said: “Cusp Capital is built on and incorporates our experience as investors over the past decade. We have worked in various operational roles and accompanied more than 50 early-stage companies to successful exits and IPOs.”

Prior to forming Cusp, the team of partners had worked largely with the Haub Family office and the Tengelmann Group.

Over a call, he told me the firm is planning lead deals in Seed and Series A rounds, and co-lead in growth rounds. They plan to do 25-30 investments with this fund or a 6-7 a year period.

Cusp’s Initial investments will range from mid-to-high single-digit million Euros and it says it has already signed the first term sheets for investments.

Jan Sessenhausen, General Partner of Cusp Capital says: “We dedicate a lot of time to developing investment hypotheses with global relevance. We use these hypotheses to identify promising companies, and actively approach entrepreneurs with our expertise. Having our own perspective early on allows us to see eye-to-eye with founders and have the deep discussions needed to help them realize their full potential.”

One of those hypotheses is around focused sustainability. The firm says this will be a core theme for its investing, going forward. In addition, widening access to financing for lower-income consumers will also be a feature of its investing thesis.

Cusp Capital is headquartered in Essen, with a second office in Berlin.

Qapita, a Singapore-based fintech that provides capitalization table and employee stock ownership plans (ESOP) management software, has raised $5 million in pre-Series A funding. The round was led by MassMutual Ventures, with participation from Endiya Partners and angel investors including Avaana Capital founder Anjali Bansal and Udaan co-founder Sujeet Kumar.

Vulcan Capital and East Ventures, who led Qapita’s seed round in September 2020, also returned for this funding, along with most of its angel investors, including Koh Boon Hwee, Atin Kukreja, Alto Partners, Mission Holdings, Northstar Group Partners and K3 Ventures. East Ventures co-founder and managing partner Willson Cuaca will join Qapita’s board.

Qapita currently serves clients in Indonesia, Singapore and India, focusing on startups. Its software platform helps private companies digitize and manage cap tables, perform due diligence and issue equity to employees. Qapita was founded in 2019 by Ravi Ravulaparthi, Lakshman Gupta and Vamsee Mohan, and has since grown its team to 30 people.

Its goal is to create more liquidity and re-investment in the Indian and Southeast Asian startup ecosystems by making it easier to issue equity. Qapita currently serves more than 100 companies, and its new funding will be used to add more features and strike partnerships with service providers like legal, accounting and company secretarial firms.

In a press statement, MassMutual Ventures Anvesh Ramineni, said, “Globally, we are witnessing trends that indicate a convergence between public and private markets. Qapita is enabling this in the region through their solution – from cap table and stakeholder management to digital share issuances and liquidity solutions. We believe the team has the right combination of experience, understanding of regional markets and product expertise to deliver on their vision.”

One after another, Chinese tech giants have announced their plans for the auto space over the last few months. Some internet companies, like search engine provider Baidu, decided to recruit help from a traditional carmaker to produce cars. Xiaomi, which makes its own smartphones but has stressed for years it’s a light-asset firm making money from software services, also jumped on the automaking bandwagon. Industry observers are now speculating who will be the next. Huawei naturally comes to their minds.

Huawei seems well-suited for building cars — at least more qualified than some of the pure internet firms — thanks to its history in manufacturing and supply chain management, brand recognition, and vast retail network. But the telecom equipment and smartphone maker repeatedly denied reports claiming it was launching a car brand. Instead, it says its role is to be a Tier 1 supplier for automakers or OEMs (original equipment manufacturers).

Huawei is not a carmaker, the company’s rotating chairman Eric Xu reiterated recently at the firm’s annual analyst conference in Shenzhen.

“Since 2012, I have personally engaged with the chairmen and CEOs of all major car OEMs in China as well as executives of German and Japanese automakers. During this process, I found that the automotive industry needs Huawei. It doesn’t need the Huawei brand, but instead, it needs our ICT [information and communication technology] expertise to help build future-oriented vehicles,” said Xu, who said the strategy has not changed since it was incepted in 2018.

There are three major roles in auto production: branded vehicle manufacturers like Audi, Honda, Tesla, and soon Apple; Tier 1 companies that supply car parts and systems directly to carmakers, including established ones like Bosch and Continental, and now Huawei; and lastly, chip suppliers including Nvidia, Intel and NXP, whose role is increasingly crucial as industry players make strides toward highly automated vehicles. Huawei also makes in-house car chips.

“Huawei wants to be the next-generation Bosch,” an executive from a Chinese robotaxi startup told TechCrunch, asking not to be named.

Huawei makes its position as a Tier 1 supplier unequivocal. So far it has secured three major customers: BAIC, Chang’an Automobile, and Guangzhou Automobile Group.

“We won’t have too many of these types of in-depth collaboration,” Xu assured.

L4 autonomy?

Arcfox, a new electric passenger car brand under state-owned carmaker BAIC, debuted its Alpha S model quipped with Huawei’s “HI” systems, short for Huawei Inside (not unlike “Powered by Intel”), during the annual Shanghai auto show on Saturday. The electric sedan, priced between 388,900 yuan and 429,900 yuan (about $60,000 and $66,000), comes with Huawei functions including an operating system driven by Huawei’s Kirin chip, a range of apps that run on HarmonyOS, automated driving, fast charging, and cloud computing.

Perhaps most eye-catching is that Alpha S has achieved Level 4 capabilities, which Huawei confirmed with TechCrunch.

That’s a bold statement, for it means that the car will not require human intervention in most scenarios, that is, drivers can take their hands off the wheels and nap.

There are some nuances to this claim, though. In a recent interview, Su Qing, general manager for autonomous driving at Huawei, said Alpha S is L4 in terms of “experience” but L2 according to “legal” responsibilities. China has only permitted a small number of companies to test autonomous vehicles without safety drivers in restricted areas and is far from letting consumer-grade driverless cars roam urban roads.

As it turned out, Huawei’s “L4” functions were shown during a demo, during which the Arcfox car traveled for 1,000 kilometers in a busy Chinese city without human intervention, though a safety driver was present in the driving seat. Automating the car is a stack of sensors, including three lidars, six millimeter-wave radars, 13 ultrasonic radars and 12 cameras, as well as Huawei’s own chipset for automated driving.

“This would be much better than Tesla,” Xu said of the car’s capabilities.

But some argue the Huawei-powered vehicle isn’t L4 by strict definition. The debate seems to be a matter of semantics.

“Our cars you see today are already L4, but I can assure you, I dare not let the driver leave the car,” Su said. “Before you achieve really big MPI [miles per intervention] numbers, don’t even mention L4. It’s all just demos.”

“It’s not L4 if you can’t remove the safety driver,” the executive from the robotaxi company argued. “A demo can be done easily, but removing the driver is very difficult.”

“This technology that Huawei claims is different from L4 autonomous driving,” said a director working for another Chinese autonomous vehicle startup. “The current challenge for L4 is not whether it can be driverless but how to be driverless at all times.”

L4 or not, Huawei is certainly willing to splurge on the future of driving. This year, the firm is on track to spend $1 billion on smart vehicle components and tech, Xu said at the analyst event.

A 5G future

Many believe 5G will play a key role in accelerating the development of driverless vehicles. Huawei, the world’s biggest telecom equipment maker, would have a lot to reap from 5G rollouts across the globe, but Xu argued the next-gen wireless technology isn’t a necessity for self-driving vehicles.

“To make autonomous driving a reality, the vehicles themselves have to be autonomous. That means a vehicle can drive autonomously without external support,” said the executive.

“Completely relying on 5G or 5.5G for autonomous driving will inevitably cause problems. What if a 5G site goes wrong? That would raise a very high bar for mobile network operators. They would have to ensure their networks cover every corner, don’t go wrong in any circumstances and have high levels of resilience. I think that’s simply an unrealistic expectation.”

Huawei may be happy enough as a Tier 1 supplier if it ends up taking over Bosch’s market. Many Chinese companies are shifting away from Western tech suppliers towards homegrown options in anticipation of future sanctions or simply to seek cheaper alternatives that are just as robust. Arcfox is just the beginning of Huawei’s car ambitions.

Dott has raised a new $85 million Series B funding round — this round is a mix of equity and asset-backed debt financing. Belgium-based investment company Sofina is leading the investment. Dott is a micromobility startup that is better known for its colorful electric scooters that you can find across several European cities.

The company operates a fleet of 30,000 electric scooters in five cities. Users can download a mobile app and unlock a scooter through the app. The company charges an unlocking fee as well as a per-minute price.

During its early days, Dott positioned itself as a capital-efficient, sustainable e-scooter company. It has raised a lot less money than Bird or Lime and it has taken a different approach when it comes to operations.

For instance, Dott has always had its own warehouses to charge and repair vehicles. The startup doesn’t work with third-party logistics providers. Dott has hired its own in-house team of logistics employees.

Similarly, Dott tries to repair, reuse and recycle scooters as much as possible. Thanks to swappable batteries and electric trucks, the company tries to keep its CO2 emissions as low as possible in the cities where it operates.

As a result, the company has won permits to operate in Paris and Lyon following tender processes. Overall, the company operates in a dozen cities in France, Italy, Belgium, Germany and Poland. Tier, a European competitor, has been expanding more aggressively and has raised $250 million in November 2020.

In addition to Sofina, new and existing investors include EQT Ventures, Prosus Ventures, Aberdeen Standard Investments, Estari, Expon Capital, Felix Capital, FJ Labs, Invest-NL, McRock Capital and Quadia.

With today’s funding round, the company plans to expand beyond e-scooters with a new bike-sharing service. Dott already shared images of its e-bike. It should be launching this summer.

Dott also plans to expand to other cities and countries, starting with Spain and the U.K. As you can see, Dott doesn’t want to launch a hundred cities at once. It is slowly rolling out its service in new cities. It is currently EBIT positive across all cities and Dott probably wants to keep it this way.

Singapore-based fintech Hashstacs Pte Ltd (STACS) announced today it has raised $3.6 million USD in pre-Series A funding. The company develops blockchain platforms that can work with financial institutions’ existing infrastructure, and its core technology is also used in GreenSTACS for environmental, social and governance (ESG) investments. The round was led by Wavemaker Partners, which focuses on enterprise and deep tech companies in Southeast Asia, with participation from the Tribe Accelerator, a program for blockchain startups backed by the Singaporean government. STACS participated in Tribe last year, along with Project Ubin, the Monetary Authority of Singapore’s blockchain-based multi-currency payments network initiative.

Founded in 2019, STACS has now raised a total of more than $6 million and is preparing to raise Series A funding later this year. The company’s goal is to fix fragmentation in the tech systems used by financial institutions that can result in capital being locked in international clearing systems, a build-up of transaction fees and fines for trades that fail to settle. Its core solution is a technology stack that is built around STACS blockchain. It allows clients to integrate payment platforms (including Ubin), trading platforms and external software like user management systems, while enabling smart contracts and digital ledgers.

STACS’ products include a real-time trade processing platform that is used by clients like Eastspring Investments and BNP Paribas Securities Service. Some of its other clients are Deutsche Bank, Bursa Malaysia, EFG Bank and Bluecell Intelligence. STACS co-founder and managing director Benjamin Soh told TechCrunch that STACS is targeting a network of more than 30 institutions by the end of this year.

GreenSTACS launched last month in a collaboration with Bluecell Intelligence to help companies certify and monitor green and sustainability-related loans and bonds.

Soh said in an email that STACS received many requests from financial institutions that needed to perform impact monitoring on ESG projects, but were not able to do so effectively because “information sources are asymmetric, there is no common data infrastructure and serving of ESG financing is typically too inefficient.”

STACS’ goal is to make GreenSTACS “the common infrastructure” for ESG financing and impact monitoring, he added. The platform enables loan and bond parameters to be programmed into security tokens and connects with data sources, like IoT devices or satellite images, to create real-time impact reports on a distributed ledger. This helps prevent “greenwashing,” a term that refers to making something seem more environmentally-friendly or sustainable than it really is.

“Essentially, this would boost investors’ and banks’ confidence with green financing by ensuring green money is strictly used in achieving pledged green goals and policies,” said Soh.

In a press statement, Wavemaker general partner Gavin Lee said, “There is an immense opportunity to help financial institutions process large volumes of trade more quickly, securely and accurately while reducing costs and illiquid capital. As an enterprise distributed ledger technology provider, STACS has productized a secure layer that can be deployed instantly above existing infrastructure. Enterprise sales is never easy for young companies, but Benjamin is a convincing and seasoned serial entrepreneur who has secured numerous leading financial institutions as key clients.”

Indonesian startup CoLearn started as a chain of physical tutoring centers and was in the process of shifting to a hybrid offline-online model when the COVID-19 pandemic hit. The team sensed that remote learning would permanently change how students want to be tutored and decided to focus completely on its app, which launched in August 2020. CoLearn has since been downloaded more than 3.5 million times and has about one million active users, mostly students in grades 7 to 12.

The company announced today it has raised $10 million in Series A funding co-led by Alpha Wave Incubation and edtech-focused GSV Ventures. This marks the first time both have made an investment in Indonesia. The round also included participation from returning investors Sequoia Capital India’s Surge and AC Ventures.

One of the Jakarta-based company’s goals is to improve educational standards in Indonesia. The country’s PISA (Programme for International Student Assessment, a global ranking system created by the Organisation for Economic Co-operation and Development) rankings are in the bottom 10% for math, science and reading. CoLearn’s goal is to help move up Indonesia’s PISA ratings to the top 50% over the next five years.

CoLearn’s app offers more than 250,000 pre-recorded videos with homework help. The videos serve as a hook to convince students (or their parents) to sign up for CoLearn’s live online classes.

The company’s co-founders are Abhay Saboo, Marc Irawan and BYJU product team alum Sandeep Devaram. Despite being the world’s fourth most populous country with 270 million people, Indonesia has not seen the same level of investment and innovation in its educational infrastructure as countries like China or India, Saboo told TechCrunch. “We’re trying to solve the problem of how do you change mindsets, how do you change motivation, how do you increase in confidence levels?”

CoLearn started its offline in business in 2018, before shifting to a hybrid model. Once the pandemic hit, the company decided to go fully online. Even after schools reopen, the team anticipates that most students will prefer the convenience of online afterschool learning because going to brick-and-mortar tutoring centers can eat up hours of their time each day, Saboo said.

CoLearn’s users ask about 5 million questions through the app each month. Its AI platform matches them with video tutorials, recorded by more than 400 tutors, that break down key concepts. Saboo said creating engaging videos instead of presenting solutions in a diagram is one of the ways CoLearn differentiates from competitors like SnapAsk, which raised $35 million last year to expand in Southeast Asia.

“What we realized is that kids are really craving a step-by-step explanation and this is the TikTok generation, so if a picture says a thousand words, then a video says a million,” he said. He added that students often hit pause on the video when they think they have the answer to a question, before skipping to the end to see if they got it right, indicating that they want to understand concepts instead of simply getting a solution.

CoLearn’s live online classes will be its main priority going forward and the startup hopes to replicate the success of companies like China’s Yuanfadao and Zuoyebang. As part of that goal, it runs teacher training programs and expects to train more than 200 teachers over the next two years, especially in STEM subjects. The company may eventually scale into other countries that have similar issues with their education systems, but Saboo said CoLearn’s plan is to focus on Indonesia for at last the next couple of years.

Other investors in CoLearn include Leo Capital, TNB Aura, S7V, January Capital, Alpha JWC, Taurus Ventures, Alter Global and Mahanusa Capital.

In press statement, GSV Ventures managing partner Deborah Quazzo said, “The opportunity to build efficacious learning solutions for the fourth largest country in the world is vast. The greatest businesses are created when entrepreneurs tackle large, important problems and CoLearn is doing that.”