Author: azeeadmin

China’s largest question and answer platform Zhihu began trading in New York at $9.5 per share at the lower end of its IPO range, valuing the company at about $5.3 billion.

The aggregate offering size of Zhihu’s IPO and the concurrent private placements is $772.5 million, assuming the underwriters do not exercise their option to purchase additional ADSs. With Zhihu’s sizable flotation, some Silicon Valley executives and investors may start to pay more attention to this ten-year-old company from China that was once simply regarded as the “Quora of China.”

Q&A remains at the core of Zhihu, which means “do you know” in classical Chinese, but the service has become much more than the American counterpart that was founded two years before it.

“I think Quora is a good product, but I think Quora today still equals Quora ten years ago,” said Kai-Fu Lee, whose investment firm Sinovation Ventures is a seed investor in Zhihu and is the company’s largest outside shareholder with a 13% stake.

“Zhihu has already grown up and is on the path to becoming a multifaceted super app centered around knowledge, while Quora is still a question and answer website with an app,” added Lee, an AI expert and an avid Zhihu contributor himself.

Asides from facilitating Q&As, Zhihu has also dabbled in premium content, live videos, e-commerce, online education, among other forms that it believes are ripe for sharing knowledge.

Today, Zhihu generates about 70-80% of its revenues from advertising, according to its prospectus, though other businesses like membership and e-commerce are growing financial contributors, a sign that it’s working to diversify monetization streams.

The willingness of Chinese startups to “reinvent themselves and cannibalize their own success” is what differentiates them from American companies, Lee observed.

“Because they know if they don’t do that, their challenger will, and they are ambitious towards building the super app as a dream. I think American entrepreneurs tend to build something really good and light, partner with other companies and stay in their comfort zone,” said the investor who was the president of Google China in the late 2000s.

“I really think that Silicon Valley and U.S. entrepreneurs should look to China for ideas or inspirations of doing things differently.”

Conflict of interest

From 2019 to 2020, Zhihu’s monthly active users grew from 48 million to 68.5 million, an indication that the platform has thrived beyond the small clientele of Chinese tech elites, investors and academics whom it first attracted. A new mother could be on Zhihu asking for postnatal tips and a Foxconn worker may be on the site sharing her factory stories.

Zhihu’s revenue increased from 670.5 million yuan ($102 million) in 2019 to 1.4 billion yuan in 2020, while its net loss shrank from 1 billion yuan to 517.6 million yuan. It may seem at first that commercialization is at odds with Zhihu’s principle rooted in open user collaboration. Oftentimes, answerers are not economically incentivized but simply participating for leisure. But Zhihu is for-profit from day one and needs income after all.

It’s a always delicate matter to balance a product’s commercial and user interests. The bottom line is to be vigilant and deliberate about the kind of ads or sponsored content allowed on the platform. Restrain could mean smaller advertising revenue, but a medical ad scandal that hit Chinese search giant Baidu back in 2016 showed how easily user trust could be lost. Well-placed and responsible ads, on the other hand, could bring greater returns for both advertisers and the platform.

On the innovative side, not all users have appreciated Zhihu’s new features. Zhihu has recently upped its ante on short videos, which have become the default format through which many Chinese users receive information, thanks to more affordable connectivity and industry forerunners like Douyin and Kuaishou. But some users argue that short videos by nature verge on entertainment and are obtrusive for the more serious, text-focused Zhihu.

Zhihu has other interests to balance. Its shareholders include Tencent, Baidu and Kuaishou, which are “super apps” themselves for their extensive functionalities. They all have traffic deals with Zhihu. For example, Zhihu content is surfaced in the search results on WeChat, which has its own search engine.

While joining hands with giants could drive user growth for a smaller player, dependence on outsiders could also constrain a startup, forcing it to give away significant shares too early and joggle the interests of multiple allies, who could be rivals themselves.

Lee declined to comment on Zhihu’s relationship with any specific partner, but he did indicate that Zhihu doesn’t currently have an “overreliance” on partners and that the firm keeps “natural working business relationships with them.”

“That also speaks to the purity and the ambition of the Zhihu team, that it hopes to maintain more independence by making more friends,” said Lee.

Security researchers say a powerful new Android malware masquerading as a critical system update can take complete control of a victim’s device and steal their data.

The malware was found bundled in an app that had to be installed outside of Google Play, the app store for Android devices. Once installed by the user, the app hides and stealthily exfiltrates data from the victim’s device to the operator’s servers.

Researchers at mobile security firm Zimperium, which discovered the malicious app, said once the victim installs the malicious app, the malware communicates with the operator’s Firebase server to remotely control the device.

The spyware can steal messages, contacts, device details, browser bookmarks and search history, record calls and ambient sound from the microphone and take photos using the phone’s cameras. The malware also tracks the victim’s location, searches for document files, and grabs copied data from the device’s clipboard.

Zimperium CEO Shridhar Mittal said it was likely a targeted attack.

“I think a lot of time and effort was spent on creating this app. We believe that there are other apps out there like this, and we are trying our very best to find them as soon as possible,” said Mittal.

Tricking someone into installing a malicious app is a simple but effective way to compromise a victim’s device. It’s why Android devices warn users not to install apps from outside of the app store. But many older devices don’t run the latest apps, forcing users to rely on older versions of their apps from bootleg app stores.

Zimperium said the malware hides itself from the victim, and tries to evade being caught by not using up too much network data by uploading thumbnails to the attacker’s servers rather than the full image. The malware also captures the most up-to-date data, including location and photos.

Mittal confirmed that the malicious app was never installed on Google Play. When reached, a Google spokesperson would not comment on what steps the company was taking to prevent the malware from entering Google Play. Google has seen malicious apps slip through its filters before.

But the researchers don’t know what the malware is for, or who is behind it, or who it’s targeting.

“It’s easily the most sophisticated we’ve seen,” said Mittal.

This kind of malware that has far-reaching access to a victim’s device comes in a variety of forms and names, but largely does the same thing. In the early days of the internet, remote access trojans, or RATs, let snoops spy on victims through their webcams. Nowadays, child monitoring apps are often repurposed to spy on a person’s spouse, known as stalkerware or spouseware.

Last year, TechCrunch reported on the KidsGuard stalkerware — ostensibly a child monitoring app — that used a similar “system update” to infect victims’ devices.

“We are starting to see an increasing number of RATs on mobile devices. And the level of sophistication seems to be going up, it seems like the bad actors have realized that no mobile devices have just as much information on them and as much access and they are less protected than the traditional endpoints.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Natasha and Danny and Alex and Grace were all here to chat through the week’s biggest tech happenings. News was right back up to a dull roar this week, so we did our best to trim and hone and just bring you the most important things.

Here’s the rundown:

• David Dobrik stepped down from Dispo, the photo-sharing app he co-created, this past week after allegations came out about him. We talked about the venture capital angle, since early-stage investors in the app reactively distanced from their investments. Could this set precedent or have a chilling effect on celebrity-startups?
• Robinhood filed privately to go public! So, it’s happening everyone. At long last, one of Silicon Valley’s hottest companies is kicking off its IPO process. We’re hype, you’re hype, and we had some jokes.
• And in other mega-unicorn news, it appears that Microsoft is tempted to plonk down $10 billion for Discord. Why, you ask? Well why not. It’s just $10 billion from Microsoft’s $1,780 billion valuation. Or around half a percent.
• Sticking to the $10 billion-and-greater category, Plaid could be raising $600 million at a valuation of $10 billion to $15 billion. That’s a lot of money. Danny, however, has some doubts.
• Also, Plaid has announced the inaugural cohort of its FinRise accelerator, a program focused on helping fintech startups led by underrepresented founders.
• And then there were a few rounds to chat about. Namely the intensely interesting Bevy deal, and Ro raising $500 million at a $5 billion  valuation.
• And to wrap, Natasha and Alex shared their favs from TechCrunch’s massive Y Combinator demo day coverage. Which you can read here, and here.

Let’s all get some rest!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!

Chainalysis, a blockchain analysis company, announced Friday it has closed on $100 million in Series D financing, doubling its valuation to over $2 billion.

The round comes just four months after the company secured a $100 million Series C round at a $1 billion valuation. Paradigm led the latest funding event while existing backers Addition and Ribbit doubled down on their investment in the company. TIME Ventures, Marc Benioff’s investment fund, also participated in the latest financing, which brings Chainalysis’ total raised to $265 million.

This latest round marks Chainalysis’ fourth raise in less than two years. Previous backers in the company also include Accel and Benchmark.

Chainalysis was founded in 2014 as the official investigators into the hack of Mt. Gox, then the world’s largest cryptocurrency exchange. Today, the New York-based company provides data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies in more than 60 countries. Among its 400 customers are fintechs such as Square, financial institutions like Barclays and cryptocurrency businesses like Gemini, Bitstamp and BitPay.

Chainalysis’ self-described mission is “to build trust in blockchains to promote more financial freedom with less risk.”

The company says its data platform powers investigation, compliance and risk management tools “that have been used to solve some of the world’s most high-profile cyber criminal cases and grow consumer access to cryptocurrency safely.”

Chainalysis operates under the belief that eventually every company will use the blockchain to conduct their business, according to co-founder and CEO Michael Gronager.

“We’ve collected more information about what happens on blockchains than anyone in the cryptocurrency industry,” he said. “That information enables our customers to make better data-driven decisions.”

Over the past year, the company says it has achieved the following:

• Increased its annual recurring revenue (ARR) by more than 100% year-over-year
• Doubled its client base to include government agencies in over 30 countries and private sector businesses in over 60 countries
• Grown its support to cover over 100 digital assets across 10 native blockchains, encompassing an estimated approximate 90% of cryptocurrency economic activity
• Doubled its number of employees over the past year to 233 today
• Expanded its partnership program, which now consists of more than 50 companies, including Fireblocks and Flashpoint
• Looking ahead, Chainanalysis said it plans to hire hundreds over the course of 2021; it also plans to use its new funds primarily to expand its enterprise data offering

“We’ll continue to invest in investigations and compliance software, but we’ll also build out new data products both for our existing customer base and new audiences,” Gronager said.

The company is particularly focused on building out its presence in the Asia-Pacific region.

“Cryptocurrency is global, and so is Chainalysis,” said Gronager.

To Chainalysis, cryptocurrencies present unprecedented transparency.

“They are the first global payment systems outside of any one organization’s control, but their blockchains create public, permanent records of all transactions, including illicit activity,” Gronager told TechCrunch.

Blockchain analysis comes in by helping people interpret those public blockchain ledgers. Chainalysis tools aim to help government agencies, cryptocurrency businesses and financial institutions understand which real-world entities transact with each other.

“For example, we can show that a given transaction took place between two different cryptocurrency exchanges, or between a cryptocurrency exchange and an illicit entity, such as a darknet market or a sanctioned organization,” Gronager said.

Paradigm co-founder Fred Ehrsam said his firm was drawn to the way Chainalysis provides key data infrastructure and software for the cryptocurrency ecosystem.

“The team knows the regulatory landscape better than anyone, has been refining their tools for years, and deeply know what their customers want. This is not an overnight success story – rather a team that has built with a long run vision, through multiple crypto cycles, that has created a market leading position for themselves, with the opportunity to compound,” he added. “As cryptocurrency adoption grows, so will demand for Chainalysis offerings.”

As further evidence of a cryptocurrency boom, BlockFi earlier this month announced it closed on a massive $350 million Series D funding at a $3 billion valuation. The financial services company for crypto market investors offers a retail and institutional-facing suite of products.

Notably, BlockFi is also a Chainalysis customer. In a written statement, CEO and co-founder Zac Prince said that Chainalysis provides BlockFi with data “that delivers insights beyond compliance that can help inform our business development activities, tailor our offerings, and identify new revenue streams.” 

This morning, well-known robotic process automation (RPA) unicorn UiPath has filed to go public.

The company’s S-1 filing comes after it raised billions of dollars while private, making it amongst the best-funded startups in history. Over the last year, for example, the company’s rapid-fired fundraising included its Series E and Series F rounds of capital, both of which came inside the last 12 months.

UiPath’s filing details a rapidly growing company. From its fiscal year ending January 31, 2020, to its fiscal year ending January 31, 2021, UiPaths’s revenues grew from $336.2 million to $607.6 million, which translates to just under 81% growth. That top-line expansion brought with it GAAP net income of –$519.9 million in its year ending in early 2020, and -$94.7 million in the year ending January 31 2021.

UiPath was valued privately at $10.2 billion in mid-2020, and $35 billion in early 2021.

For the company’s 27 known investors, the IPO filing is a critical moment. If UiPath can defend its rich private valuation, its IPO could be viewed as a success. However, investors in that final round — Alkeon Capital and Coatue, the investors that also led its Series E — will want to see its market value appreciate.

If UiPath can reach a public valuation of more than $35 billion remains to be seen.

The company’s financials paint the picture of a high-growth company that got its costs in line after a very expensive fiscal year ending January 31, 2020. UiPath cut its sales and marketing costs, its research and development spend, and even its general and administrative budget in its most recent fiscal year. The result is that its gross profit scaled against a smaller cost base. And the result of that was dramatically improved profitability, and cash generation.

As the S-1 notes: “[UiPath’s] operating cash flows were $(359.4) million and $29.2 million and our free cash flows were $(380.4) million and $26.0 million in the fiscal years ended January 31, 2020 and 2021, respectively.” That’s a massive turnaround, perhaps one that’s even more impressive than the company’s improving GAAP net margins.

There’s more to come from UiPath, namely a dive into its quarterly results, which the company says will come in a “subsequent amendment to [its] prospectus.”

All told, UiPath’s most recent fiscal year shows material operating leverage — something that not every software company going public can brag about.

We’ve seen a lot of trend lines moving throughout 2020 and into 2021 around automation, workflow, robotic process automation (RPA) and the movement to low-code and no-code application building. While all of these technologies can work on their own, they are deeply connected and we are starting to see some movement towards bringing them together.

While the definition of process automation is open to interpretation, and could include things like industrial automation, Statista estimates that the process automation market could be worth $74 billion in 2021. Those are numbers that are going to get the attention of both investors and enterprise software executives.

Just this week, Berlin-based Camunda announced a $98 million Series B to help act as a layer to orchestrate the flow of data between RPA bots, microservices and human employees. Meanwhile UIPath, the pure-play RPA startup that’s going to IPO any minute now, acquired Cloud Elements, giving it a way to move beyond RPA into API automation.

Not enough proof for you? How about ServiceNow announcing this week that it is buying Indian startup Intellibot to give it — you guessed it — RPA capabilities. That acquisition is part of a broader strategy by the company to move into full-scale workflow and automation, which it discussed just a couple of weeks ago.

Meanwhile at the end of last year, SAP bought a different Berlin process automation startup, Signavio, for $1.2 billion after announcing new automated workflow tools and an RPA tool at the beginning of December. Microsoft is in on it too, having acquired process automation startup Softmotive last May, which it then combined with its own automation tool PowerAutomate.

What we have here is a frothy mix of startups and large companies racing to provide a comprehensive spectrum of workflow automation tools to empower companies to spin up workflows quickly and move work involving both human and machine labor through an organization.

The result is hot startups getting prodigious funding, while other startups are exiting via acquisition to these larger companies looking to buy instead of build to gain a quick foothold in this market.

Cathy Tornbohm, Distinguished Research Vice President at Gartner, says part of the reason for the rapidly growing interest is that these companies have stayed on the sidelines up until now, but they see an opportunity and are using their checkbooks to play catch up.

“IBM, SAP, Pega, Appian, Microsoft, ServiceNow all bought into the RPA market because for years they didn’t focus on how data got into their systems when operating between organizations or without a human. [Instead] they focused more on what happens inside the client’s organization. The drive to be digitally more efficient necessitates optimizing data ingestion and data flows,” Tornbohm told me.

For all the bluster from the big vendors, they do not control the pure-play RPA market. In fact, Gartner found that the top three players in this space are UIPath, Automation Anywhere and Blue Prism.

But Tornbohm says that, even as the traditional enterprise vendors try to push their way into the space, these pure-play companies are not sitting still. They are expanding beyond their RPA roots into the broader automation space, which could explain why UIPath came up from its pre-IPO quiet period to make the Cloud Elements announcement this week.

Dharmesh Thakker, managing partner at Battery Ventures, agrees with Tornbohm, saying that the shift to the cloud, accelerated by COVID-19, has led to an expansion of what RPA vendors are doing.

“RPA has traditionally focused on automation-UI flow and user steps, but we believe a full automation suite requires that ability to automate processes across the stack. For larger companies, we see their interest in the category as a way to take action on data within their systems. And for standalone RPA vendors, we see this as validation of the category and an invitation to expand their offerings to other pillars of automation,” Thakker said.

The activity we have seen across the automation and workflow space over the last year could be just the beginning of what Thakker and Tornbohm are describing, as companies of all sizes fight to become the automation stack of choice in the coming years.

Vibrant, a medical technology company that’s developed a disposable vibrating pill to treat chronic constipation, today announced its Series E for $7.5 million. The company is based in Tel Aviv and is lead by Lior Ben-Tsur, a startup veteran. Since its founding in 2007, the company has raised a total of $25 million. This round is being led by Unorthodox Ventures with participation by Sequoia.

Vibrant, which is going through its third and final round of Food and Drug Administration (FDA) testing, plans to launch in the U.S. in the next year. The capsules are about the size of a multi-vitamin, Ben-Tsur said.

“Patients are used to taking drugs day in and day out, so this wouldn’t be a different experience in that regard, but this pill doesn’t have any medication,” Ben-Tsur said. While Ben-Tsur is not a founder, he was brought on about 10 years ago to serve as the company’s CEO.

According to a study published in the American Gastroenterological Association, about 16% of American adults suffer from constipation, and the number jumps to 33.5% in adults between the ages of 60-101. Also, constipation is 1.5 times more common in women than in men.

The most common way to treat constipation is through the use of over-the-counter or prescription drugs, most of which target the nerves in the colon which in turn prompt a bowel movement. The Vibrant Capsule, however, “once swallowed, kickstarts the natural impulses of your intestinal wall to contract, relax and get things moving again — without the use of chemicals,” the company said in a statement.

In addition to being medication-free, the value of Vibrant over laxatives, according to the company, is that the bowel movements are more controlled, whereas laxatives can cause unexpected diarrhea and long-term side effects. Also, while laxatives are meant to be taken on a daily basis, the disposable capsule can be used anywhere from 2-5 times per week. The capsules connect to an app that automatically records when you take a pill, and upon having a bowel movement, the person notes it in the app which then sends a monthly report to the patient’s doctor, allowing them to monitor and adjust the treatment protocol as necessary.

In a 2019 human trial organized by Vibrant, 250 patients were enrolled in a double-blind study (Vibrant Capsule = 133, placebo = 117). The results showed that those who took the Vibrant Capsule were more likely to experience a bowel movement within three hours. The trial details and the results were published in the journal of Neurogastroenterology and Motility.

Several years ago a group of doctors and engineers performed a test in a live pig’s colon, and accidentally pinched the side of the colon wall. As a result, they noticed that the pig promptly had a bowel movement. The test was actually about something totally unrelated to constipation, and the results were a random discovery. To replicate the effects, the team created a vibrating belt that when worn for about three hours, would also cause a bowel movement.

“The problem is no one wants to shake for three hours to have a bowel movement,” said Ben-Tsur. With this information in hand, the group set out to develop a treatment for constipation in humans that would produce similar results but where the vibrations couldn’t be felt. There were other mechanical capsules already on the market such as the Smart Pill, a mechanical diagnostic capsule that reports on generalized motility through the entire digestive tract and aids doctors in diagnosing motility disorders, so the team knew that people could safely swallow and excrete capsules.

According to Ben-Tsur, there hasn’t been any development in the treatment of constipation in the last 20 years — the treatment protocol has continued to focus on medication. When he learned about the market size, the lack of innovation in the space, and the potential, he was convinced that he wanted to lead Vibrant.

Vibrant plans on using this round of funding to take the capsule to market in the U.S. — its first market. The company is currently speaking with healthcare providers and insurance companies so that the capsule will be covered by insurance starting at the time of launch. The Smart Pill, while only used once as a diagnostic test, is still not covered and costs, on average, about $1,400 out of pocket. Ben-Tsur and his team aim to offer a product that is accessible. “From day one we were on a mission to build something that wouldn’t be more expensive than existing drugs,” he said.

Google’s latest investment in India is a startup that is helping businesses come online.

One-year-old DotPe, a Gurgaon-based startup, said on Friday it has raised $27.5 million in its Series A financing round. The round was led by PayU, with participation from existing investor Info Edge Ventures and Google.

The young startup, now valued at about $90 million, helps brick and mortar stores sell to customers online and collect payments digitally.

It’s a problem that scores of startups in India are solving today, but DotPe has some additional hooks. It helps merchants scan their inventories and quickly establish a log online.

Once the catalog is ready, a business can then make it available on WhatsApp and reach customers there. WhatsApp is the most popular smartphone app in India with over 450 million users. DotPe says it also helps businesses get visibility on Google Search.

The startup, co-founded by Shailaz Nag, formerly co-founder and managing director of PayU, also enables neighborhood stores to collect payments from walk-in customers and features tools to offer loyalty points and discounts to customers to boost engagement.

“This new partnership will empower businesses to be more discoverable, expand business avenues and conduct commerce like never before,” said Nag. “Pandemic or not, we are here to reimagine the way offline businesses work and bring the digital revolution to the doorstep of every entrepreneur.”

DotPe says its platform, which doesn’t require businesses to install an app, has amassed over 5 million merchants in the last six months. These merchants are seeing over 38% of daily orders from repeat customers, the startup said.

“In a very short time, DotPe has acquired a promising merchant base with its impeccable product experience and innovation,” said Anirban Mukherjee, CEO, PayU India.

Sanjay Gupta, VP and Country Head of Google India, said in a statement that the company’s investment in DotPe is illustrative of Google’s belief in “working with India’s start-up ecosystem towards the goal of building a more inclusive digital economy that will benefit everyone.”

Google announced a $10 billion fund for India last year, its biggest market by users. The Android-maker has invested in several startups in the country including hyperlocal delivery firm Dunzo, InMobi Group’s Glance, and DailyHunt.

DotPe said it will deploy the fresh capital to reach more merchants in India and scale its technology stack to meet the growing demand.

If you browse Instagram, you are probably familiar with the term “link in bio.” Links aren’t allowed in post captions, and users are only allowed one URL in their bios, so many create a simple website with multiple links for their followers. Linktree, one of the most popular “link in bio” services with more than 12 million users, announced today it has raised $45 million in Series B funding. The round was co-led by Index Ventures and Coatue, with participation from returning investors AirTree Ventures and Insight Partners.

Coatue chairman Dan Rose will join Linktree’s board of directors. The Sydney, Australia-based startup’s last round was a $10.7 million Series A announced in October 2020. Linktree’s latest funding will be used on tools that make social commerce easier.

Linktree says about a third, or 4 million, of its users signed up within the last three months. This is in partly because people have been spending more time on social media and e-commerce shopping during the pandemic.

Founded in 2016, Linktree now competes with a roster of “link in bio” services, including Shorby, Linkin.bio and the recently launched Beacons.

“When we launched Linktree, we created an entirely new category. We were first to market and, with over 12 million users globally, still hold 88% of market share,” founder and chief executive officer Alex Zaccaria told TechCrunch. “Inevitably we’ve seen plenty of competitors pop up as a result, but part of the uniqueness of Linktree is its deceptively simple design.”

Zaccaria added that one of Linktree’s differentiators is its adoption by users in a wide range of categories, including health and wellness, real estate, sports, music, politics, publishing and food. It’s used for bio links by Shopify, Facebook, TikTok, YSL, HBO and Major League Baseball, and celebrities like Jonathan Van Ness, Jamie Oliver and Pharrell.

“We might have started as a link-in-bio tool, but over time Linktree has evolved and the platform has become a social identity layer of the internet. Our vision for how the platform will sit at the intersection of digital self-expression and action means we’re thinking boldly when it comes to our roadmap.”

The home ownership rate in Vietnam is about 90%, but many millennials are struggling to join that number. Rising property prices in cities, coupled with a lack of financing options, mean more people have to delay buying their first homes unless they have family support.

Part of Y Combinator’s latest batch, Homebase was founded in 2019 to give prospective buyers in Vietnam an alternative to traditional financing. Homebase acts as a co-investor, buying a share of property with customers, who then have the option of purchasing equity from Homebase until they take full ownership, or selling the property for their portion of the proceeds. In the meantime, buyers pay rent to Homebase that corresponds to the company’s stake, and have full usage rights to the home, so they can live in or rent it.

Co-founders Junyuan Tan and Phillip An originally started Homebase in Singapore, but decided to focus on Vietnam because Tan had lived there while working on his previous startups, RePrice Technologies and Atlantis Lab. Tan wanted to buy a home, but found bank mortgages charged high interest rates even on short-term loans.

“If you look at the whole of Southeast Asia, compared to Europe or the U.S., there are really no other solutions, like government schemes or rent-to-own financing solutions,” Homebase chief operating officer Phillip An told TechCrunch.

Its model is similar to Divvy Homes and ZeroDown in the United States and, in fact, leaders from both startups have invested in Homebase (Divvy Homes co-founder Brian Ma and ZeroDown’s former COO Troy Steckenrider). Homebase’s other backers include VinaCapital Ventures, Class 5 Global, Pegasus Technology Ventures, 1982 Ventures, Antler and Darius Cheung, the founder and CEO of 99.co.

Most of Homebase’s transactions are currently in Ho Chi Minh City and Saigon, and it plans to expand into Hanoi and Danang by the end of this year. Ultimately, Homebase’s goal is to enter other Southeast Asian markets where home owners also face a dearth of financing options, like Singapore, Thailand and Indonesia.

In Vietnam, about 70% of adults are “unbanked,” meaning they don’t have a bank account, which makes it difficult to apply for mortgages. An said some of Homebase’s customers use the service because they are unbanked. Other customers have financial accounts, but see Homebase as a faster, more flexible option to bank loans.

Its contracts range from one to 10 years, and at the end, customers have the option of buying all the equity in the property or selling it with Homebase to get back their investment. The amount of equity customers buy at the start also varies. For example, home buyers who are using Homebase as an alternative to mortgages typically take an initial 20% to 30% stake in the property, while real estate investors often start with a 50% stake.

Homebase finances its stake in properties in part by working with third-party financial institutions, including private high-net worth individuals and family offices who see it as an opportunity to diversify their holdings into a new asset class. An said the company is also talking to different types of funds, including equity, hedge, real estate debt and emerging market debt, from Europe, the United States and Singapore.

To screen applicants, Homebase has an internal checklist and onboarding process, and it also works with real estate agents, developers and other partners in Vietnam.

For those third parties, Homebase serves as a value-add tool that helps them close more deals by providing a way for customers to get financing. Homebase also performs due diligence on potential properties, including examining documentation and permits, and has built an asset valuation model based on existing property data, transaction data and information from developers.

An said this valuation service, which Homebase is expanding, is a key part of the business because it provides assurance to buyers that the company’s incentives are aligned with theirs.

“We stand to risk our investment, too,” he said. “Many customers are also first-time buyers and they want more help to find a good property.”