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Testing times for second wave scooter startups
Investors are still pouring millions into scooter startups, albeit sometimes at flat valuations. At the same time a little cash is flowing the other way, in cases where cities have realized the importance of prioritizing the needs of the local environment and its citizens, over and above the ambitions of VCs for a swift and lucrative exit.
Scooter startups affected by such regulatory bumps in the road are, unsurprisingly, rather less keen to shout about this sort of policy friction and the negative cash and ride flow it generates.
In one recent incident in Spain, in the Catalan capital of Barcelona, El Pais reported that the town hall fined a local scooter startup, called Reby, for contravening urban mobility rules.
The startup is so new it doesn’t even have scooters available for public hire yet. But it’s already had some of its ‘test’ rides removed by police and been fined for breaking scooter sharing rules.
If it was hoping to copy-paste from an Uber 1.0 playbook, things aren’t looking good for Reby. (Indeed, that’s a very tatty manual in most places these days.)
Spain’s capital city Madrid also forced a temporary suspension on scooter sharing startups recently, as we reported last month, after changes to mobility laws that tighten the screw on scooter sharing — requiring already operational startups to tweak how their rides operate in order to come into compliance.
While Madrid authorities haven’t banned scooter sharing entirely, they have imposed more limits on where and how they can be used, thereby injecting fresh friction into the business model.
But compared to Barcelona that’s actually a free ride. Things aren’t so much bumpy as roadblocked entirely for scooter sharing in the latter city where regulations adopted by Barcelona town hall in 2017 essentially ban the on-demand scooter model, at least as startups prefer to operate it.
These rules require companies that wanting to offer scooters for hire must provide a guide with the ride (one guide per maximum two people), as well as a helmet. They must also verify that the person to whom the vehicle is hired has the ability to ride it properly.
Rides might scale if you’re able to litter enough cheap and easy scooters all over the urban place but a (human) guide per two rides definitely does not.
Yet, as we’ve written before, there’s no shortage of patinetes electronics weaving around Barcelona’s often narrow and crowded streets. Most of these are locally owned though. And the town hall appears to prefer it that way. After all, people who own high tech scooters aren’t usually in a rush to ditch them in stupid places.
In its 2017 by-law regulating various personal mobility vehicles (PMVs) — including, but not limited to, two-wheeled electric scooters — the city council said it wanted to foster safer and sustainable usage of scooters and other PMVs, pointing to “the growing presence of this new mobility which is taking up more and more road space”.
“Barcelona City Council is committed to a sustainable city mobility model which gives priority to journeys on foot, by bicycle or on public transport,” it added, setting out what it dubbed a “pioneering regulation” that forbids e-scooter use on pavements; imposes various speed restrictions; and gives priority to pedestrians at all times.
Scooters can also only be parked in authorized parking places, with the council emphasizing: “It is forbidden to tie them to trees, traffic lights, benches or other items of urban furniture when this could affect their use or intended purpose; in front of loading or unloading zones, or in places reserved for other users, such as persons with reduced mobility; in service areas or where parking is prohibited, such as emergency exits, hospitals, clinics or health centres, Bicing [the local city bike hire scheme] zones and on pavements where this might block the path of pedestrians.”
There’s more though: The regulation also targets scooter sharing startups seeking to exploit PMVs as a commercial opportunity — with “special conditions for economic activities”.
These include the aforementioned guide, helmet and minimum skill level rule. There’s also a registration scheme for PMVs being used for economic activity which allows city police to scan a QR code that must be displayed on the ride to check it conforms to the regulation’s technical requirements. How’s that for a smart use of tech?
“There may be specific restrictions in specific areas and districts where there is a lot of pressure from these kinds of vehicles or they pose a specific problem,” the council also warns, giving itself further leeway to control PMVs and ensure they don’t become a concentrated nuisance.
Despite what are clear, strict and freshly imposed controls on scooter sharing, that hasn’t stopped a couple of smaller European startups from trying their luck at getting rentable rubber on Catalan carrers anyway — perhaps encouraged by demonstrable local appetite to scoot (that and the lack of any big Birds).
The opportunity probably looks tantalizing; a dense urban environment that’s also a tourist hotspot with clement weather, lots of two-wheel-loving locals and a small but vibrant tech scene.
In Reby’s case, the very early stage Catalan startup, whose co-founders’ LinkedIn profiles suggests the business was founded last July, has a website and not much else at this point, aside from its ambitions to follow in the wheeltracks of Bird, Lime et al.
Nonetheless it has racked up fines worth €5,300 (just over $6,000), according to town hall sources, after being deemed to have breached the city’s PMV rules.
Reby had put out up to a hundred scooters in Barcelona for ten days, according to El Pais, padlocking them to bike anchors (with a digital password for unchaining delivered via app) — presumably in the hopes of locating a grey area in the regulation and unlocking the pile em’ high, rent em’ cheap dockless on-demand scooter model that’s disrupted cities elsewhere.
But the Ayuntamiento de Barcelona was unimpressed. Its new by-law brought in a penalty system with fines of up to €100 for minor infringements, up to €200 for serious infringements and up to €500 for very serious infringements. (We understand Reby received 53 sanctions for minor infringements — costing €100 apiece).
Penalties are levied per infringement, so essentially per scooter deployed on the street. And while a few thousand euros might not sound that much of a big deal, the more scooters you scatter the higher the fine scales. And of course that’s not the kind of scaling these startups are scooting for.
We asked Reby for its version of events but it didn’t want to talk about it. A spokesman told us it’s still very early days for the business, adding: “We are a very small team and haven’t launched yet officially. We are doing some tests in Barcelona.”
A more established European scooter startup, Berlin-based Wind, has also clashed with city hall. El Pais reports it had around 100 scooters seized by police last August, also after abortively trying to put them on the streets for hire.
Town hall sources told us that, in Wind’s case, the company’s rides were removed immediately by police, not even lasting a day — so there wasn’t even the chance for a fine to be issued. (We contacted Wind for comment on the incident but it did not respond.)
The bottom line is legislative hurdles won’t simply vanish because startups wish it.
Where scooters are concerned city authorities aren’t dumb and can also move surprisingly fast. The dumping grounds some urban spaces have become after being flooded with unwanted dockless rides by overfunded startups chasing scale via max disruption (and minimum environmental sensitivity) certainly hasn’t gone unnoticed.
At the same time, keeping streets flowing, uncluttered and safe is the bread and butter business of city councils — naturally pushing PMVs up the regulatory agenda.
You also don’t have to look far for tragic stories vis-a-vis scooters. Last summer a 90-year-old pedestrian was killed in a suburb of Barcelona after she was hit by two men riding an electric scooter. In another incident in a nearby town a 40-year-old scooter rider also reportedly died after falling off her ride and being run over by a truck.
The risks of PMVs mingling with pedestrians and more powerful road vehicles are both clear and also not about to disappear. Not without radical action to expel most non-PMV vehicles from city centers to expand the safe (road) spaces where lower powered, lighter weight PMVs could operate. (And no major cities are proposing anything like that yet).
Add to that, in European cities like Barcelona, where there has already been major investment in public transport infrastructure, there’s a clear incentive to funnel residents along existing tracks, including by tightly controlling new and supplementary forms of micro-mobility.
If the Barcelona city council has one potential blind spot where urban mobility is concerned it’s air pollution. Like most dense urban centers the city often suffers terribly from this. And savvy scooter companies would do well to be pressing on that policy front.
But there’s little doubt that would-be fast-follower scooter clones have their work cut out to scale at all, let alone go the distance and get big enough to attract acquisitive attention from the category’s beefed up early movers.
Even then, for the Birds and Limes of the scooter world, multi-millions in funding may buy runway and the opportunity to scoot for international growth but policy roadblocks aren’t the kind of thing that money alone can shift.
Scooter startups need to sell cities on the potential civic benefits of their technology, by demonstrating how PMVs could replace dirtier alternatives that are already clogging roads and having a deleterious impact on urban air quality, as part of a modern and accessible mobility mix.
But that kind of lobbying, while undoubtedly benefiting from local connections, takes money and time. So there’s no shortage of challenge and complexity in the road ahead for scooter startups, even as — as we wrote last month — the investment opportunity is shrinking, with investors having now placed their big bets.
In some cities, scooter ownership also appears to be growing in popularity which will also eat into any sharing opportunities.
One regional investor from an early stage Madrid-based fund that we spoke to about scooters had no qualms at having passed over the space. “We’ve looked at various companies in the space and in Spain but we’re not very attracted by the market given our fund size, competition and regulation question marks,” KFund‘s Jamie Novoa told us.
So those entrepreneurs still dreaming of fast following the likes of Bird, Lime and Spin may find the race they were hoping to join is already over and park gates being padlocked shut.
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Contentful raises $33.5M for its headless CMS platform
Contentful, a Berlin- and San Francisco-based startup that provides content management infrastructure for companies like Spotify, Nike, Lyft and others, today announced that it has raised a $33.5 million Series D funding round led by Sapphire Ventures, with participation from OMERS Ventures and Salesforce Ventures, as well as existing investors General Catalyst, Benchmark, Balderton Capital and Hercules. In total, the company has now raised $78.3 million.
It’s been less than a year since the company raised its Series C round and, as Contentful co-founder and CEO Sascha Konietzke told me, the company didn’t really need to raise right now. “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now,” said Konietzke. “But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge. And at the same time, we already had some interesting conversations ongoing with Sapphire [formerly SAP Ventures] and Salesforce. So we saw the opportunity to add more funding and also start getting into a tight relationship with both of these players.”
The original plan for Contentful was to focus almost explicitly on mobile. As it turns out, though, the company’s customers also wanted to use the service to handle its web-based applications and these days, Contentful happily supports both. “What we’re seeing is that everything is becoming an application,” he told me. “We started with native mobile application, but even the websites nowadays are often an application.”
In its early days, Contentful focused only on developers. Now, however, that’s changing, and having these connections to large enterprise players like SAP and Salesforce surely isn’t going to hurt the company as it looks to bring on larger enterprise accounts.
Currently, the company’s focus is very much on Europe and North America, which account for about 80 percent of its customers. For now, Contentful plans to continue to focus on these regions, though it obviously supports customers anywhere in the world.
Contentful only exists as a hosted platform. As of now, the company doesn’t have any plans for offering a self-hosted version, though Konietzke noted that he does occasionally get requests for this.
What the company is planning to do in the near future, though, is to enable more integrations with existing enterprise tools. “Customers are asking for deeper integrations into their enterprise stack,” Konietzke said. “And that’s what we’re beginning to focus on and where we’re building a lot of capabilities around that.” In addition, support for GraphQL and an expanded rich text editing experience is coming up. The company also recently launched a new editing experience.
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Agtech startup Imago AI is using computer vision to boost crop yields
Presenting onstage today in the 2018 TC Disrupt Berlin Battlefield is Indian agtech startup Imago AI, which is applying AI to help feed the world’s growing population by increasing crop yields and reducing food waste. As startup missions go, it’s an impressively ambitious one.
The team, which is based out of Gurgaon near New Delhi, is using computer vision and machine learning technology to fully automate the laborious task of measuring crop output and quality — speeding up what can be a very manual and time-consuming process to quantify plant traits, often involving tools like calipers and weighing scales, toward the goal of developing higher-yielding, more disease-resistant crop varieties.
Currently they say it can take seed companies between six and eight years to develop a new seed variety. So anything that increases efficiency stands to be a major boon.
And they claim their technology can reduce the time it takes to measure crop traits by up to 75 percent.
In the case of one pilot, they say a client had previously been taking two days to manually measure the grades of their crops using traditional methods like scales. “Now using this image-based AI system they’re able to do it in just 30 to 40 minutes,” says co-founder Abhishek Goyal.
Using AI-based image processing technology, they can also crucially capture more data points than the human eye can (or easily can), because their algorithms can measure and asses finer-grained phenotypic differences than a person might pick up on or be easily able to quantify just judging by eye alone.
“Some of the phenotypic traits they are not possible to identify manually,” says co-founder Shweta Gupta. “Maybe very tedious or for whatever all these laborious reasons. So now with this AI-enabled [process] we are now able to capture more phenotypic traits.
“So more coverage of phenotypic traits… and with this more coverage we are having more scope to select the next cycle of this seed. So this further improves the seed quality in the longer run.”
The wordy phrase they use to describe what their technology delivers is: “High throughput precision phenotyping.”
Or, put another way, they’re using AI to data-mine the quality parameters of crops.
“These quality parameters are very critical to these seed companies,” says Gupta. “Plant breeding is a very costly and very complex process… in terms of human resource and time these seed companies need to deploy.
“The research [on the kind of rice you are eating now] has been done in the previous seven to eight years. It’s a complete cycle… chain of continuous development to finally come up with a variety which is appropriate to launch in the market.”
But there’s more. The overarching vision is not only that AI will help seed companies make key decisions to select for higher-quality seed that can deliver higher-yielding crops, while also speeding up that (slow) process. Ultimately their hope is that the data generated by applying AI to automate phenotypic measurements of crops will also be able to yield highly valuable predictive insights.
Here, if they can establish a correlation between geotagged phenotypic measurements and the plants’ genotypic data (data which the seed giants they’re targeting would already hold), the AI-enabled data-capture method could also steer farmers toward the best crop variety to use in a particular location and climate condition — purely based on insights triangulated and unlocked from the data they’re capturing.
One current approach in agriculture to selecting the best crop for a particular location/environment can involve using genetic engineering. Though the technology has attracted major controversy when applied to foodstuffs.
Imago AI hopes to arrive at a similar outcome via an entirely different technology route, based on data and seed selection. And, well, AI’s uniform eye informing key agriculture decisions.
“Once we are able to establish this sort of relation this is very helpful for these companies and this can further reduce their total seed production time from six to eight years to very less number of years,” says Goyal. “So this sort of correlation we are trying to establish. But for that initially we need to complete very accurate phenotypic data.”
“Once we have enough data we will establish the correlation between phenotypic data and genotypic data and what will happen after establishing this correlation we’ll be able to predict for these companies that, with your genomics data, and with the environmental conditions, and we’ll predict phenotypic data for you,” adds Gupta.
“That will be highly, highly valuable to them because this will help them in reducing their time resources in terms of this breeding and phenotyping process.”
“Maybe then they won’t really have to actually do a field trial,” suggests Goyal. “For some of the traits they don’t really need to do a field trial and then check what is going to be that particular trait if we are able to predict with a very high accuracy if this is the genomics and this is the environment, then this is going to be the phenotype.”
So — in plainer language — the technology could suggest the best seed variety for a particular place and climate, based on a finer-grained understanding of the underlying traits.
In the case of disease-resistant plant strains it could potentially even help reduce the amount of pesticides farmers use, say, if the the selected crops are naturally more resilient to disease.
While, on the seed generation front, Gupta suggests their approach could shrink the production time frame — from up to eight years to “maybe three or four.”
“That’s the amount of time-saving we are talking about,” she adds, emphasizing the really big promise of AI-enabled phenotyping is a higher amount of food production in significantly less time.
As well as measuring crop traits, they’re also using computer vision and machine learning algorithms to identify crop diseases and measure with greater precision how extensively a particular plant has been affected.
This is another key data point if your goal is to help select for phenotypic traits associated with better natural resistance to disease, with the founders noting that around 40 percent of the world’s crop load is lost (and so wasted) as a result of disease.
And, again, measuring how diseased a plant is can be a judgement call for the human eye — resulting in data of varying accuracy. So by automating disease capture using AI-based image analysis the recorded data becomes more uniformly consistent, thereby allowing for better quality benchmarking to feed into seed selection decisions, boosting the entire hybrid production cycle.
Sample image processed by Imago AI showing the proportion of a crop affected by disease
In terms of where they are now, the bootstrapping, nearly year-old startup is working off data from a number of trials with seed companies — including a recurring paying client they can name (DuPont Pioneer); and several paid trials with other seed firms they can’t (because they remain under NDA).
Trials have taken place in India and the U.S. so far, they tell TechCrunch.
“We don’t really need to pilot our tech everywhere. And these are global [seed] companies, present in 30, 40 countries,” adds Goyal, arguing their approach naturally scales. “They test our technology at a single country and then it’s very easy to implement it at other locations.”
Their imaging software does not depend on any proprietary camera hardware. Data can be captured with tablets or smartphones, or even from a camera on a drone or using satellite imagery, depending on the sought for application.
Although for measuring crop traits like length they do need some reference point to be associated with the image.
“That can be achieved by either fixing the distance of object from the camera or by placing a reference object in the image. We use both the methods, as per convenience of the user,” they note on that.
While some current phenotyping methods are very manual, there are also other image-processing applications in the market targeting the agriculture sector.
But Imago AI’s founders argue these rival software products are only partially automated — “so a lot of manual input is required,” whereas they couch their approach as fully automated, with just one initial manual step of selecting the crop to be quantified by their AI’s eye.
Another advantage they flag up versus other players is that their approach is entirely non-destructive. This means crop samples do not need to be plucked and taken away to be photographed in a lab, for example. Rather, pictures of crops can be snapped in situ in the field, with measurements and assessments still — they claim — accurately extracted by algorithms which intelligently filter out background noise.
“In the pilots that we have done with companies, they compared our results with the manual measuring results and we have achieved more than 99 percent accuracy,” is Goyal’s claim.
While, for quantifying disease spread, he points out it’s just not manually possible to make exact measurements. “In manual measurement, an expert is only able to provide a certain percentage range of disease severity for an image example; (25-40 percent) but using our software they can accurately pin point the exact percentage (e.g. 32.23 percent),” he adds.
They are also providing additional support for seed researchers — by offering a range of mathematical tools with their software to support analysis of the phenotypic data, with results that can be easily exported as an Excel file.
“Initially we also didn’t have this much knowledge about phenotyping, so we interviewed around 50 researchers from technical universities, from these seed input companies and interacted with farmers — then we understood what exactly is the pain-point and from there these use cases came up,” they add, noting that they used WhatsApp groups to gather intel from local farmers.
While seed companies are the initial target customers, they see applications for their visual approach for optimizing quality assessment in the food industry too — saying they are looking into using computer vision and hyper-spectral imaging data to do things like identify foreign material or adulteration in production line foodstuffs.
“Because in food companies a lot of food is wasted on their production lines,” explains Gupta. “So that is where we see our technology really helps — reducing that sort of wastage.”
“Basically any visual parameter which needs to be measured that can be done through our technology,” adds Goyal.
They plan to explore potential applications in the food industry over the next 12 months, while focusing on building out their trials and implementations with seed giants. Their target is to have between 40 to 50 companies using their AI system globally within a year’s time, they add.
While the business is revenue-generating now — and “fully self-enabled” as they put it — they are also looking to take in some strategic investment.
“Right now we are in touch with a few investors,” confirms Goyal. “We are looking for strategic investors who have access to agriculture industry or maybe food industry… but at present haven’t raised any amount.”
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Zizoo, a booking.com for boats, sails for new markets with $7.4M on board
Berlin-based Zizoo — a startup which self describes as booking.com for boats — has nabbed a €6.5 million (~$7.4M) Series A to help more millennials find holiday yachts to mess about taking selfies in.
Zizoo says its Series A — which was led by Revo Capital, with participation from new investors including Coparion, Check24 Ventures and PUSH Ventures — was “significantly oversubscribed”.
Existing investors including MairDumont Ventures, aws Founders Fund, Axel Springer Digital Ventures and Russmedia International also participated in the round.
We first came across Zizoo some three years ago when they won our pitching competition in Budapest.
We’re happy to say they’ve come a long way since, with a team that’s now 60-people strong, and business relationships with ~1,500 charter companies — serving up more than 21,000 boats for rent, across 30 countries, via a search and book platform that caters to a full range of “sailing experiences”, from experienced sailor to novice and, on the pricing front, luxury to budget.
Registered users passed the 100,000 mark this year, according to founder and CEO Anna Banicevic. She also tells us that revenue growth has been 2.5x year-on-year for the past three years.
Commenting on the Series A in a statement, Revo Capital’s managing director Cenk Bayrakdar said: “The yacht charter market is one of the most underserved verticals in the travel industry despite its huge potential. We believe in Zizoo’s successful future as a leading SaaS-enabled marketplace.”
The new funds will be put towards growing the business — including by expanding into new markets; plus product development and recruitment across the board.
Zizoo founder and CEO Anna Banicevic at its Berlin offices
“We’re looking to strengthen our presence in the US, where we’ve seen the biggest YoY growth while also expand our inventory in hot locations such as Greece, Spain and the Caribbean,” says Banicevic on market expansion. “We will also be aggressively pushing markets such as France and Spain where consumers show a growing interest in boat holidays.”
Zizoo is intending to hire 40 more employees over the course of the next year — to meet what it dubs “the booming demand for sailing experiences, especially among millennials”.
So why do millennials love boating holidays so much? Zizoo says the 20-40 age range makes up the “majority” of its customer.
Banicevic reckons the answer is they’re after a slice of ‘affordable luxury’.
“After the recent boom of the cruising industry, millennials are well familiar with the concept of holidays at sea. However, sailing holidays (yachting) are much more fitting to the millennial’s strive for independence, adventure and experiences off the beaten path,” she suggests.
“Yachting is a growing trend no longer reserved for the rich and famous — and millennials want a piece of that. On our platform, users can book a boat holiday for as low as £25 per person per night (this is an example of a sailboat in Croatia).”
On the competition front, she says the main competition is the offline sphere (“where 90% of business is conducted by a few large and many small travel agents”).
But a few rival platforms have emerged “in the last few years” — and here she reckons Zizoo has managed to outgrow the startup competition “thanks to our unique vertically integrated business model, offering suppliers a booking management system and making it easy for the user to book a boat holiday”.
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See you in Vancouver tonight
We’ve finalized the Vancouver micro meetup tonight. We’ll be holding it at Hootsuite HQ on 5, East 8th Ave. at 7pm on October 4. Extra special thanks to the folks at Hootsuite for helping out.
You must RSVP here so we know how many are attending. I’ve already picked 10 companies to pitch, so if you haven’t been notified please come and support your friends.
As there will be no booze at the event we’ll have an extra-special drinkathon at 9pm at a bar of your choosing. I’m open to suggestions.
N.B. – Yes, I know that’s not Vancouver. Just wanted to see if you were paying attention.
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Munich Re buys IoT middleware startup, relayr, in deal worth $300M
Berlin based Internet of Things (IoT) startup relayr, whose middleware platform is geared towards helping industrial companies unlock data insights from their existing machinery and production line kit by linking Internet connected sensors and edge devices to platform controls, has been acquired by insurance group Munich Re in a deal which values the company at $300 million.
relayr was founded back in 2013 with the initial aim of helping software developers hack around with hardware, at a time when developer interest in IoT was just taking off.
The startup went on to pass through startupbootcamp and crowdfunded a cute looking chocolate-bar shaped hardware starter kit before expanding into building a hardware agnostic cloud services platform to act as a central hub for data flows. relayr then further honed its focus to the needs of industrial IoT, and its platform — which is now used by around 130 businesses — offers end-to-end middleware combined with device management and IoT analytics, and can operate in the cloud, on-premise or a hybrid of both depending on customers needs.
We first covered the Berlin-based startup back in 2014 when it closed a $2.3M seed round. It’s raised $66.8M in total, according to Crunchbase, which includes a $30M Series C round in February led by Deutsche Telekom Capital Partners.
relayr did not disclose the investors in its 2014 seed at the time, saying only that they were unnamed U.S. and Switzerland-based investors. But Kleiner Perkins and Munich Re (via its HSB subsidiary which is acquiring relayr now) were named as investors in later rounds, along with Deutsche Telekom .
Insurance giants and telcos have a clear strategic interest in IoT — with the technology promising to drive network usage and utility on the telco side, and offering transformative potential for the insurance industry as data streams can be used to monitor equipment performance and predict (and even steer off) costly failures.
Munich Re said today that its HSB subsidiary is acquiring 100% of relayr in a deal that values the business at $300M. (It’s not clear if it’s all cash or a mix of cash and stock — we’ve asked. Update: A spokeswomen for Munich Re confirmed the transaction will be financed with “internal cash funds” from the group).
It says the deal will help it “shape opportunities in the fast-growing IoT market”, and is envisaging a joint business model with the combined pair developing not just tech solutions for clients but risk management, data analysis and financial instruments.
“IoT is already significantly changing our world and has the potential to disrupt the traditional insurance and reinsurance industry through new business models, services and competitors,” said Torsten Jeworrek, member of Munich Re’s board of management in a statement. “I am truly happy to announce this acquisition, as it supports our strategy to combine our knowledge of risk, data analysis skills and financial strength with the technological expertise of relayr. This is our basis to develop new ideas for tomorrow’s commercial and industrial worlds.”
“We are delighted to strengthen our relationship with Munich Re/HSB to push digitalization in commercial and industrial markets and strive for our mission to help commercial and industrial businesses stay relevant,” added relayr CEO, Josef Brunner. “The unique combination of the companies demonstrates the importance to deliver business outcomes to customers and the need to combine first-class technology and its delivery with powerful financial and insurance offerings. This transaction is a great opportunity to build a global category leader.”
The pair have been partnered since 2016, when the insurance firm invested in relayr’s Series B, but say they see the acquisition strengthening Munich Re’s financial and insurance offerings while also offering a route to expand relayr’s middleware business via leveraging the insurance group’s large client base.
“Back in 2016, HSB invested in relayr in an effort to harness the strategically significant business potential offered by IoT. relayr’s end-to-end IoT solutions for the industrial and commercial sectors are an ideal addition to our Group’s capabilities,” said Greg Barats, president and CEO of HSB, and the person responsible for Munich Re’s IoT strategy, in another supporting statement. “HSB has always focused on insurance and technology… relayr will help us to rapidly implement our global strategy to develop new IoT solutions for our clients. Digital transformation in the industrial and commercial sectors offers opportunities for new services and financial applications.”
relayr says it already offers industrial companies which are seeking to digitalise their businesses a “comprehensive range of services” — such as being able to extract and analyse data from machines and equipment to determine when a machine is likely to fail (and it touts cutting costs, increased energy efficiency and product quality improvement as among the benefits its platform offers) — but says the acquisition will allow it to develop its “innovative value stack”, by enabling new revenue models, cost reduction, and “increased effectiveness across industries”.
It also sees benefit in sitting under the established Munich Re umbrella — as a way to convince customers it will be a long-term business partner. It adds that it will continue to maintain its current focus on IoT for the industrial sector.
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Chilling effects
The removal of conspiracy enthusiast content by InfoWars brings us to an interesting and important point in the history of online discourse. The current form of Internet content distribution has made it a broadcast medium akin to television or radio. Apps distribute our cat pics, our workouts, and our YouTube rants to specific audiences of followers, audiences that were nearly impossible to monetize in the early days of the Internet but, thanks to gullible marketing managers, can be sold as influencer media.
The source of all of this came from Gen X’s deep love of authenticity. They formed a new vein of content that, after breeding DIY music and zines, begat blogging, and, ultimately, created an endless expanse of user generated content (UGC). In the “old days” of the Internet this Cluetrain-manifesto-waving post gatekeeper attitude served the slacker well. But this move from a few institutional voices into a scattered legion of micro-fandoms led us to where we are today: in a shithole of absolute confusion and disruption.
As I wrote a year ago, user generated content supplanted and all but destroyed “real news.” While much of what is published now is true in a journalistic sense, the ability for falsehood and conspiracy to masquerade as truth is the real problem and it is what caused a vacuum as old media slowed down and new media sped up. In this emptiness a number of parasitic organisms sprung up including sites like Gizmodo and TechCrunch, micro-celebrity systems like Instagram and Vine, and sites catering to a different consumer, sites like InfoWars and Stormfront. It should be noted that InfoWars has been spouting its deepstate meanderings since 1999 and Alex Jones himself was a gravelly-voice radio star as early as 1996. The Internet allowed any number of niche content services to juke around the gatekeepers of propriety and give folks like Jones and, arguably, TechCrunch founder Mike Arrington, Gawker founder Nick Denton, and countless members of the “Internet-famous club,” deep influence over the last decades media landscape.
The last twenty years have been good for UGC. You could get rich making it, get informed reading it, and its traditions and habits began redefining how news-gathering operated. There is no longer just a wall between advertising and editorial. There is also a wall between editorial and the myriad bloggers who write about poop on Mt. Everest. In this sort of world we readers find ourselves at a distinct loss. What is true? What is entertainment? When the Internet is made flesh in the form of Pizzagate shootings and Unite the Right Marches, who is to blame?
The simple answer? We are to blame. We are to blame because we scrolled endlessly past bad news to get to the news that was applicable to us. We trained robots to spoon feed us our opinions and then force feed us associated content. We allowed ourselves to enter into a pact with a devil so invisible and pernicious that it easily convinced the most confused among us to mobilize against Quixotic causes and immobilized the smartest among us who were lulled into a Soma-like sleep of liking, sharing, and smileys. And now a new reckoning is coming. We have come full circle.
Once upon a time old gatekeepers were careful to let only carefully controlled views and opinions out over the airwaves. The medium was so immediate that in the 1940s broadcasters forbade the transmission of recordings and instead forced broadcasters to offer only live events. This was wonderful if you had the time to mic a children’s choir at Christmas but this rigidity was bed for a reporter’s health. Take William Shirer and Edward R. Murrow’s complaints about being unable to record and play back bombing raids in Nazi-held territories – their chafing at old ideas are almost palpable to modern bloggers.
There were other handicaps to the ban on recording that hampered us in taking full advantage of this new medium in journalism. On any given day there might be several developments, each of which could have been recorded as it happened and then put together and edited for the evening broadcast. In Berlin, for example, there might be a bellicose proclamation, troop movements through the capital, sensational headlines in the newspapers, a protest by an angry ambassador, a fiery speech by Hitler, Goring or Goebbels threatening Nazi Germany’s next victim—all in the course of the day. We could have recorded them at the moment they happened and put them together for a report in depth at the end of the day. Newspapers could not do this. Only radio could. But [CBS President] Paley forbade it.
Murrow and I tried to point out to him that the ban on recording was not only hampering our efforts to cover the crisis in Europe but would make it impossible to really cover the war, if war came. In order to broadcast live, we had to have a telephone line leading from our mike to a shortwave transmitter. You could not follow an advancing or retreating army dragging a telephone line along with you. You could not get your mike close enough to a battle to cover the sounds of combat. With a compact little recorder you could get into the thick of it and capture the awesome sounds of war.
And so now instead of CBS and the Censorship Bureau we have Facebook and Twitter. Instead of calling for the ability to record and playback an event we want permission to offer our own slants on events, no matter how far removed we are from the action. Instead of working diligently to spread only the truth, we consume the truth as others know it. And that’s what we are now chafing against: the commercialization and professionalization of user generated content.
Every medium goes through this confusion. From Penny Dreadfuls to Pall Mall sponsoring nearly every single new television show in the 1940s, media has grown, entered a disruptive phase that changes all media around it, and is then curtailed into boredom and commoditization. It is important to remember that we are in the era of Peak TV not because we all have more time to watch 20 hours of Breaking Bad. We are in Peak TV because we have gotten so good at making good shows – and the average consumer is ravenous for new content – that there is no financial reason not to take a flyer on a miniseries. In short, it’s gotten boring to make good TV.
And so we are now entering the latest stage of Internet content, the blowback. This blowback is not coming from governments. Trump, for his part, sees something wrong but cannot or will not verbalize it past the idea of “Fake News”. There is absolutely a Fake News problem but it is not what he thinks it is. Instead, the Fake News problem is rooted in the idea that all content deserves equal respect. My Medium post is as good as a CNN which is as good as an InfoWars screed about pedophiles on Mars. In a world defined by free speech then all speech is protected. Until, of course, it affects the bottom line of the company hosting it.
So Facebook and Twitter are walking a thin line. They want to remain true to the ancillary GenX credo that can be best described as “garbage in, garbage out” but many of its readers have taken that deeply open invitation to share their lives far too openly. These platforms have come to define personalities. They have come to define news cycles. They have driven men and women into hiding and they have given the trolls weapons they never had before, including the ability to destroy media organizations at will. They don’t want to censor but now that they have shareholders then they simply must.
So get ready for the next wave of media. And the next. And the next. As it gets more and more boring to visit Facebook I foresee a few other rising and falling media outlets based on new media – perhaps through VR or video – that will knock social media out of the way. And wait for more wholesale destruction of UGC creators new and old as monetization becomes more important than “truth.”
I am not here to weep for InfoWars. I think it’s garbage. I’m here to tell you that InfoWars is the latest in a long line of disrupted modes of distribution that began with the printing press and will end god knows where. There are no chilling effects here, just changes. And we’d best get used to them.
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Knotel acquires 42Floors in order to build the blockchain of property
Another day, another blockchain project. This time sources are reporting that Knotel – an office space rental service in Manhattan – has acquired 42Floors, a commercial real estate search engine in order to, according to founder Amol Sarva, get “access to data and technology on over 10 billion square feet of office space, driving further liquidity to Knotel’s marketplace while also accelerating its plans for a blockchain platform.”
The deal is not yet complete.
Knotel is building the Agile HQ platform, a way to rent office space for a few hours or a few months without getting stuck in a lease. The company has 1 million square feet of space in New York, San Francisco, London, and Berlin and it raised $100 million in funding. The company claims it has more has more buildings in New York than WeWork.
“42Floors built a powerful tool to organize a dark market that hasn’t changed in a hundred years,” said Amol Sarva, CEO of Knotel. “It’s still backroom and bilateral while the rest of the world is becoming digital and standardized. This is what leads to transactions that take months to close with a dozen middlemen – no reliable information. You can buy a house faster than you can rent a floor. Partnering together will help give owners and customers what they both want: truth.”
The reported 42Floors acquisition enables the company to bring new properties onto its platform and could let non-blockchain-based contracts move to the blockchain.
UPDATE – Text changed to reflect the type of business and ICO plans.
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TravelPerk grabs $21M to make booking business trips suck less
TravelPerk, a Barcelona-based SaaS startup that’s built an end-to-end business travel platform, has closed a $21 million Series B round, led by Berlin-based Target Global and London’s Felix Capital. Earlier investors Spark Capital and Sunstone also participated in the round, alongside new investor Amplo.
When we last spoke to the startup back in June 2016 — as it was announcing a $7M Series A — it had just 20 customers. It’s now boasting more than 1,000, name-checking “high growth” companies such as Typeform, TransferWise, Outfittery, GetYourGuide, GoCardless, Hotjar, and CityJet among its clients, and touting revenue growth of 1,200% year-on-year.
Co-founder and CEO Avi Meir tells us the startup is “on pace” to generate $100M in GMV this year.
Meir’s founding idea, back in 2015, was to create a rewards program based around dynamic budgeting for business trips. But after conversations with potential customers about their pain-points, the team quickly pivoted to target a broader bundle of business travel booking problems.
The mission now can be summarized as trying to make the entire business travel journey suck less — from booking flights and hotels; to admin tools for managing policies; analytics; customer support; all conducted within what’s billed as a “consumer-like experience” to keep end-users happy. Essentially it’s offering end-to-end travel management for its target business users.
“Travel and finance managers were frustrated by how they currently manage travel and looked for an all in one tool that JUST WORKS without having to compare rates with Skyscanner, be redirected to different websites, write 20 emails back and forth with a travel agent to coordinate a simple trip for someone, and suffer bad user experience,” says Meir.
“We understood that in order to fix business travel there is no way around but diving into it head on and create the world’s best OTA (online travel agency), combined with the best in class admin tools needed in order to manage the travel program and a consumer grade, smart user experience that travelers will love. So we became a full blown platform competing head on with the big TMCs (travel management companies) and the legacy corporate tools (Amex GBT, Concur, Egencia…) .”
He claims TravelPerk’s one-stop business trip shop now has the world’s largest bookable inventory (“all the travel agent inventory but also booking.com, Expedia, Skyscanner, Airbnb… practically any flight/hotel on the internet — only we have that”).
Target users at this stage are SMEs (up to 1,500 employees), with tech and consulting currently its strongest verticals, though Meir says it “really runs the gamut”. While the current focus is Europe, with its leading markets being the UK, Germany and Spain.
TravelPerk’s business model is freemium — and its pitch is it can save customers more than a fifth in annual business travel costs vs legacy corporate tools/travel agents thanks to the lack of commissions, free customer support etc.
But it also offers a premium tier with additional flexibility and perks — such as corporate hotel rates and a travel agent service for group bookings — for those customers who do want to pay to upgrade the experience.
On the competition front the main rivals are “old corporate travel agencies and TMC”, according to Meir, along with larger players such as Egencia (by Expedia) and Concur (SAP company).
“There are a few startups doing what we are doing in the U.S. like TripActions, NexTravel, as well as some smaller ones that are popping up but are in an earlier stage,” he notes.
“Since our first round… TravelPerk has been experiencing some incredible growth compared to any tech benchmark I know,” he adds. “We’ve found a stronger product market fit than we imagined and grew much faster than planned. It seems like everyone is unhappy with the way they are currently booking and managing business travel. Which makes this a $1.25 trillion market, ready for disruption.”
The Series B will be put towards scaling “fast”, with Meir arguing that TravelPerk has landed upon a “rare opportunity” to drive the market.
“Organic growth has been extremely fast and we have an immediate opportunity to scale the business fast, doing what we are doing right now at a bigger scale,” he says.
Commenting in a statement, Antoine Nussenbaum, partner at Felix Capital, also spies a major opportunity. “The corporate travel industry is one of the largest global markets yet to be disrupted online. At Felix Capital we have a high conviction about a new era of consumerization of enterprise software,” he says.
While Target Global general partner Shmuel Chafets describes TravelPerk as “very well positioned to be a market leader in the business travel space with a product that makes business travel as seamless and easy as personal travel”.
“We’re excited to support such an experienced and dedicated team that has a strong track record in the travel space,” he adds in a supporting statement. “TravelPerk is our first investment in Barcelona. We believe in a pan-European startup ecosystem and we look forward to seeing more opportunities in this emerging startup hub.”
Flush with fresh funding, the team’s next task is even more recruitment. “We’ll grow our teams all around with emphasis on engineering, operations and customer support. We’re also planning to expand, opening local offices in 4-5 new countries within the upcoming year and a half,” says Meir.
He notes the company has grown from 20 to 100 employees over the past 12 months already but adds that it will continue “hiring aggressively”.
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WTF is Brexit?
At 10pm on June 23, 2016, the polls closed in the UK on a referendum on EU membership and the counting began. The next morning Europeans woke to the news that the British public had voted to leave the 28 Member State bloc called the European Union. The ugly word Brexit — coined during the campaign as a shorthand media conflation for ‘British exit’ — was apparently… Read More
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