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Google, Nokia, Qualcomm are investors in $230M Series A2 for Finnish phone maker, HMD Global
Mobile device maker HMD Global has announced a $230M Series A2 — its first tranche of external funding since a $100M round back in 2018 when it tipped over into a unicorn valuation. Since late 2016 the startup has exclusively licensed Nokia’s brand for mobile devices, going on to ship some 240M devices to date.
Its latest cash injection is notable both for its size (HMD claims it as the third largest funding round in Europe this year); and the profile of the strategic investors ploughing in capital — namely: Google, Nokia and Qualcomm.
Though whether a tech giant (Google) whose OS dominates the world’s smartphone market (Android) becoming a strategic investor in Europe’s last significant mobile OEM (HMD) catches the attention of regional competition enforcers remains to be seen. Er, vertical integration anyone? (To wit: It’s a little over two years since Google was slapped with a $5BN penalty by EU regulators for antitrust violations related to how it operates Android — and the Commission has said it continues to monitor the market ‘remedies’.)
In a further quirk, when we spoke to HMD Global CEO, Florian Seiche, ahead of today’s announcement, he didn’t expect the names of the investors to be disclosed — but a press spokesperson had already shared them with us so he duly confirmed the trio are investors in the round. (But wouldn’t be drawn on how much equity Google is grabbing.)
HMD’s smartphones run on Google’s Android platform, which gives the tech giant a firm business reason for supporting the mobile maker in growing the availability of Google-packed hardware in key growth markets around the world.
And while HMD likens its consistent (and consistently updated) flavor of Android to the premium ‘pure’ Android experience you get from Google’s own-brand Pixel smartphones, the difference is the Finnish company offers devices across the range of price points, and targets hardware at mobile users in developing markets.
The upshot is relatively little overlap with Google’s Pixel hardware, and still plenty of business upside for Google should HMD grow the pipeline of Google services users (as it makes money by targeting ads).
Connoisseurs of mobile history may see more than a little irony in Google investing into Nokia branded smartphones (via HMD), given Android’s role in fatally disrupting Nokia’s lucrative smartphone business — knocking the Finnish giant off its perch as the world’s number one mobile maker and ushering in an era of Android-fuelled Asian mobile giants. But wait long enough in tech and what goes around oftentimes comes back around.
“We’re extremely excited,” said Seiche, when we mention Google’s pivotal role in Nokia’s historical downfall in smartphones. “How we are going to write that next chapter on smartphones is a critical strategic pillar for the company and our opportunity to team up so closely with Google around this has been a very, very great partnership from the beginning. And then this investment definitely confirms that — also for the future.”
“It’s a critical time for the industry therefore having a clear strategy — having a clear differentiation and a different point of view to offer, we believe, is a fantastic asset that we have developed for ourselves. And now is a great moment for us to double down on this,” he added.
We also asked Seiche whether HMD has any interest in taking advantage of the European Commission’s Android antitrust enforcement decision — i.e. to fork Android and remove the usual Google services, perhaps swapping them out for some European alternatives, which is at least a possibility for OEMs selling in the region — but Seiche told us: “We have looked at it but we strongly believe that consumers or enterprise customers actually love [Google] services and therefore they choose those services for themselves.” (Millions of dollars of direct investment from Google also, presumably, helps make the Google services business case stack up.)
Nokia, meanwhile, has always had a close relationship with HMD — which was established by former Nokia execs for the sole purpose of licensing its iconic mobile brand. (The backstory there is a clause in the sale terms of Nokia’s mobile device division to Microsoft expired in 2016, paving the way for Nokia’s brand to be returned to the smartphone market without the prior Windows Mobile baggage.)
Its investment into HMD now looks like a vote of confidence in how the company has been executing in the fiercely competitive mobile space to date (HMD doesn’t break out a lot of detail about device sales but Seiche told us it sold in excess of 70M mobiles last year; that’s a combined figure for smartphones and feature phones) — as well as an upbeat assessment of the scope of the growth opportunity ahead of it.
On the latter front US-led geopolitical tensions between the West and China do look poised to generate a tail-wind for HMD’s business.
Mobile chipmaker Qualcomm, for example, is facing a loss of business, as US government restrictions threaten its ability to continue selling chips to Huawei; a major Chinese device maker that’s become a key target for US president Trump. Its interest in supporting HMD’s growth, therefore, looks like a way for Qualcomm to hedge against US government disruption aimed at Chinese firms in its mobile device maker portfolio.
While with Trump’s recent threats against the TikTok app it seems safe to assume that no tech company with a Chinese owner is safe.
As a European company, HMD is able to position itself as a safe haven — and Seiche’s sales pitch talks up a focus on security detail and overall quality of experience as key differentiating factors vs the Android hoards.
“We have been very clear and very consistent right from the beginning to pick these core principles that are close to our heart and very closely linked with the Nokia brand itself — and definitely security, quality and trust are key elements,” he told TechCrunch. “This is resonating with our carrier and retail customers around the world and it is definitely also a core fundamental differentiator that those partners that are taking a longer term view clearly see that same opportunity that we see for us going forward.”
HMD does use manufacturing facilities in China, as well as in a number of other locations around the world — including Brazil, India, Indonesia and Vietnam.
But asked whether it sees any supply chain risks related to continued use of Chinese manufacturers to build ‘secure’ mobile hardware, Seiche responded by claiming: “The most important [factor] is we do control the software experience fully.” He pointed specifically to HMD’s acquisition of Valona Labs earlier this year. The Finnish security startup carries out all its software audits. “They basically control our software to make sure we can live up to that trusted standard,” Seiche added.
Landing a major tranche of new funding now — and with geopolitical tension between the West and the Far East shining a spotlight on its value as alternative, European mobile maker — HMD is eyeing expansion in growth markets such as Africa, Brail and India. (Currently, HMD said it’s active in 91 markets across eight regions, with its devices ranged in 250,000 retail outlets around the world.)
It’s also looking to bring 5G to devices at a greater range of price-points, beyond the current flagship Nokia 8.3. Seiche also said it wants to do more on the mobile services side. HMD’s first 5G device, the flagship Nokia 8.3, is due to land in the US and Europe in a matter of weeks. And Seiche suggested a timeframe of the middle of next year for launching a 5G device at a mid tier price point.
“The 5G journey again has started, in terms of market adoption, in China. But now Europe, US are the key next opportunity — not just in the premium tier but also in the mid segment. And to get to that as fast as possible is one of our goals,” he said, noting joint-working with Qualcomm on that.
“We also see great opportunity with Nokia in that 5G transition — because they are also working on a lot of private LTE deployments which is also an interesting area since… we are also very strongly present in that large enterprise segment,” he added.
On mobile services, Seiche highlighted the launch of HMD Connect: A data SIM aimed at travellers — suggesting it could expand into additional connectivity offers in future, forging more partnerships with carriers.
“We have already launched several services that are close to the hardware business — like insurance for your smartphones — but we are also now looking at connectivity as a great area for us,” he said. “The first pilot of that has been our global roaming but we believe there is a play in the future for consumers or enterprise customers to get their connectivity directly with their device. And we’re partnering also with operators to make that happen.”
“You can see us more as a complement [to carriers],” he added, arguing that business “dynamics” for carriers have also changed substantially — and customer acquisition hasn’t been a linear game for some time.
“In a similar way when we talk about Google Pixel vs us — we have a different footprint. And again if you look at carriers where they get their subscribers from today is already today a mix between their own direct channels and their partner channels. And actually why wouldn’t a smartphone player be a natural good partner of choice also for them? So I think you’ll see that as a trend, potentially, evolving in the next couple of years.”
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Apple unveils iOS 14 and macOS Big Sur features for India, China and other international markets
Apple will roll out a range of new features and improvements that are aimed at users in India, China and other international markets with its yearly updates to iOS, iPadOS, and macOS operating systems, it unveiled today.
iOS 14, which is rolling out to developers today and will reach general users later this year, introduces new bilingual dictionaries to support French and German; Indonesia and English; Japanese and Simplified Chinese; and Polish and English. For its users in China, one of Apple’s biggest overseas markets, the iPhone-maker said the new operating system will introduce support for Wubi keyboard.
For users in India, Apple is adding 20 new document fonts and upgrading 18 existing fonts with “more weights and italics” to give people greater choices. For those living in the world’s second largest internet market, Mail app now supports email addresses in Indian script.
Apple said it will also deliver a range of additional features for India, building on the big momentum it kickstarted last year.
Messages now feature corresponding full-screen effects when users send greetings such as “Happy Holi” in one of the 23 Indian local languages.
More interestingly, iOS 14 will include smart downloads, which will allow users in India to download Indian Siri voices and software updates as well as download and stream Apple TV+ shows over cellular networks — a feature that is not available elsewhere in the world.
The feature further addresses the patchy networks that are prevalent in India — despite major improvements in recent years. Last year, Apple beamed a feature for users in India that enabled users in the nation to set an optimized time of the day in on-demand streaming apps such as Hotstar and Netflix for downloading videos.
New improvements further shows Apple’s growing focus on India, the world’s second largest smartphone market. Apple chief executive Tim Cook said earlier this year that the company will launch its online store in the country later this year, and open its first physical store next year. A source familiar with the matter told TechCrunch last month that the global pandemic had not affected the plan.
iOS 14 will also allow users in Ireland and Norway to utilize the autocorrection feature as the new update adds support for Irish Gaelic and Norwegian Nynorsk. And there’s also a redesigned Kana keyboard for Japan, which will enable users there to type numbers with repeated digits more easily on the redesigned Numbers and Symbols plane.
All the aforementioned features — except email addresses in Indian script in Mail and smart downloads for users in India — will also ship with iPadOS 14. And the aforementioned new bilingual dictionaries, new fonts for India, and localized messages are coming to macOS Big Sur.
Additionally, Apple says on the desktop operating system it has also enhanced predictive input for Chinese and Japanese results in more accurate and contextual predictions.
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Oriente raises $50 million to continue building its infrastructure for digital financial services
Oriente, a Hong Kong-based startup that develops tech infrastructure for digital credit and other online financial services, has raised $50 million for its ongoing Series B round. The funding was led by Peter Lee, co-chairman of Henderson Land, one of Hong Kong’s largest property developers, with participation from investors including website development platform Wix.com.
Launched in 2017 by Geoff Prentice (one of Skype’s co-founders), Hubert Tai and Lawrence Chu, Oriente focuses on markets that are underserved by traditional financial institutions. The new funding will be used for growth in Oriente’s existing markets, the Philippines and Indonesia, and expansion into new countries, including Vietnam.
It will also be used to continue building Oriente’s technology, which uses big data analytics to help merchants increase sales conversions and lower risk. Oriente has now raised more than $160 million in equity and debt, including a $105 million round in November 2018.
While many large tech companies, including Grab, Google, Facebook, Amazon, Uber, Apple and Samsung, are looking at digital payments and other online financial services, they need the tech infrastructure to do so, and partners that can also help them handle regulations in different markets.
Oriente doesn’t compete with payment providers. Instead, it is “innovating credit as a service,” Prentice told TechCrunch, by building technology that allows offline and online merchants to launch digital credit solutions quickly.
Oriente “is the only company that is focusing on building an end-to-end digital financial services infrastructure,” he added, with services created for consumers, online and offline merchants, and enterprise clients.
For consumers, the startup currently offers two apps, Cashalo in the Philippines and Finmas in Indonesia, which it says has a combined 5 million users and more than 1,000 merchants. Services include cash loans, online credit and working capital for small to medium-sized enterprises.
Oriente says that in 2019, it saw a 700% year-over-year growth in transactions and served more than 4 million new users, while merchant partners had a more than 20% increase in sales volume.
Over the next few months, Oriente plans to expand its Pay Later digital credit feature and launch new growth capital solutions for small businesses that need financing. Oriente also has several partnerships in the works to expand its enterprise solutions for larger businesses and corporations.
In Vietnam, Oriente is currently beta testing a consumer platform similar to Cashalo and Finmas. It will offer online credit and financing, as well as other services in partnership with local companies.
Oriente has also started focusing on how to serve businesses during the COVID-19 pandemic, since many merchants are coping with revenue declines, loss of users and cash flow issues.
“Over the past few weeks, we’ve reprioritized our corporate strategy to focus on the top opportunities within each market. We have also taken various steps to rebuild our organizations for optimized operational and financial efficiency in line with current and forecasted market conditions and our more focused strategy,” Prentice said.
“Our aim is not only to mitigate anticipated headwinds on liquidity but to demonstrate that our business has the potential to overcome and outperform the market in a recession—unlocking value for all stakeholders for years to come.”
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Google Cloud opens its Seoul region
Google Cloud today announced that its new Seoul region, its first in Korea, is now open for business. The region, which it first talked about last April, will feature three availability zones and support for virtually all of Google Cloud’s standard service, ranging from Compute Engine to BigQuery, Bigtable and Cloud Spanner.
With this, Google Cloud now has a presence in 16 countries and offers 21 regions with a total of 64 zones. The Seoul region (with the memorable name of asia-northeast3) will complement Google’s other regions in the area, including two in Japan, as well as regions in Hong Kong and Taiwan, but the obvious focus here is on serving Korean companies with low-latency access to its cloud services.
“As South Korea’s largest gaming company, we’re partnering with Google Cloud for game development, infrastructure management, and to infuse our operations with business intelligence,” said Chang-Whan Sul, the CTO of Netmarble. “Google Cloud’s region in Seoul reinforces its commitment to the region and we welcome the opportunities this initiative offers our business.”
Over the course of this year, Google Cloud also plans to open more zones and regions in Salt Lake City, Las Vegas and Jakarta, Indonesia.
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GGV Capital says mom-and-pop shops can boost e-commerce in emerging markets
Despite the rapid growth of e-commerce in India, Southeast Asia and other emerging markets, the vast majority of retail transactions there still happen offline in small stores that also serve as neighborhood hubs.
The central role these stores play in their communities led GGV Capital to develop what the firm refers to as its mom-and-pop shop investment thesis. This means backing startups that help small retailers digitize operations, tap into better supply chains and serve as delivery points in markets where logistics and online payment infrastructures are still developing. In turn, GGV’s managing partners believe this will lay the groundwork for stronger e-commerce growth.
Companies that GGV has already invested in under this thesis include B2B e-commerce platform Udaan and Telio, bookkeeping app KhataBook and social commerce startup Shihuituan (also called Nice Tuan) in China.
A sociological approach to e-commerce investment
GGV managing partner Hans Tung says the mom-and-pop shop thesis means looking at consumers’ shopping habits across countries and understanding why they are different from a historical and social perspective. During his career, Tung has observed e-commerce develop in markets including the United States, China, Japan, Taiwan, India, Southeast Asia and Latin America. Offline shopping habits, population density, transportation infrastructure and credit card penetration all played a factor in how e-commerce evolved in each of those places.
“You realize e-commerce doesn’t exist in a vacuum. It exists as a substitute for what is happening in the offline world,” he says. “Mobile payment doesn’t happen in a vacuum. It just fulfills the same needs with a different method. It was a substitution for what was happening in the offline world with credit card and debit card penetration.”
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Company-builder Antler passes $75M raised after investment from Schroders and Ferd
Antler is a “company builder” that emerged a couple of years ago, running startup generator programs and investing from an early stage, bringing a heady mix of technologists, product builders and operators together with its own technology stack.
Now, plenty of “company builders” have come and gone. It’s a bit like Apocalypse Now: everyone goes in thinking they will come up with the major formula to spit out startups at a prodigious rate and they come out screaming “The Horror! The Horror!”
But Antler appears to have been on an interesting run. It has so far made more than 120 investments across a wide range of companies, with several going on to raise later-stage funding from the likes of Sequoia, Golden Gate Ventures, East Ventures, Venturra Capital and the Hustle Fund.
Since its launch in Singapore two years ago, Antler now has a presence across New York, London, Singapore, Sydney, Amsterdam, Stockholm, Nairobi and Oslo.
Today, it’s announcing that it has attracted investment from British investment management company Schroders, investment house FinTech Collective and Ferd, the vehicle used by Johan H. Andresen, the Norwegian industrialist and investor.
This latest investment takes the capital raised by Antler over the past six months to more than $75 million.
These investors join an existing group that includes Facebook co-founder Eduardo Saverin, Canica International and Credit Saison, the third-largest credit card issuer in Japan. The idea here is that these investors get exposure to early-stage companies as they are built.
As with most company builders and accelerators, Antler only takes 1-1.5% of the applicants
Its portfolio includes Sampingan, an on-demand workforce in Indonesia; Xailient, a computer vision technology; Airalo, a global e-sims marketplace; and FusedBone, which enables medical centers to produce bespoke, non-metal implants on-site.
Magnus Grimeland, Antler co-founder and CEO said: “With our support, our founders start refining their ideas and building new and innovative businesses. What is equally important is the deep relationship our founders build with their peers, our advisors and backers. Having accomplished investors like Schroders, Ferd and FinTech Collective on board means we can provide a more valuable network for our startups as they grow their businesses.”
Peter Harrison, Group CEO of Schroders, who will also be joining Antler’s advisory board, said: “We are in a period of unprecedented change. The visibility on venture capital activity and innovation that Antler provides is therefore leading-edge.”
Antler says more than 40% of its portfolio companies have a female co-founder and 78% of these have a female CEO.
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Pachama launches to support global reforestation through carbon markets
The world’s forests are ablaze, under threat from illegal logging and disappearing due to the less dramatic environmental degradation wrought by drought and other signs of climate change.
It’s part of the negative feedback loop that seems to be accelerating climate change as greenhouse gases accumulate in the atmosphere, but one startup company is trying to facilitate reforestation by supporting carbon offsets that specifically target the world’s flora.
Pachama has raised $4.1 million to create a marketplace where companies can support carbon offset projects. The company is backed by some big names in tech investment, like former Uber executive Ryan Graves, through his private investment firm, Saltwater, and Chris Sacca, a prominent early investor in Uber, through his Lowercase Capital firm.
Founded by Diego Saez-Gil, a serial entrepreneur whose last company was a startup selling a “smart-suitcase,” Pachama is aiming to bring reforestation projects to the carbon markets whose impacts can be independently verified by the company’s monitoring software to ensure their ability to offset emissions.
“We were making a smart connected suitcase which got banned,” says Saez-Gil. “After that I decided to take some time off and I was quite burnt out. I wanted to do some soul searching and tried to decide what I wanted to put my efforts [into].”
He traveled to South America and did a trip through the Amazon rain forest in Peru. It was there that Saez-Gil saw the effects of deforestation in an area that represents a huge carbon dioxide offset for the planet.
“There are about 1 billion hectares on the planet that could be reforested,” says Saez-Gil.
That opportunity — to contribute to the perpetuation of independently validated carbon markets around the world — is what convinced investors like Paul Graham, Justin Kan, Daniel Kan, Gustaf Alströmer, Peter Reinhardt, Jason Jacobs and Chris Sacca from Lowercase Capital, as well as funds such as Social+Capital, Global Founders Capital and Atomico, to contribute to the company’s $4.1 million funding.
It’s a pretty big consortium to finance what amounts to a small capital commitment (given the size of the funds under management that these investors have at their disposal), but investors are right to be a little wary.
Carbon markets are driven by policy, and policymakers have been reluctant to draft legislation that would put a high enough price on carbon emissions to make those markets viable.
“Pachama’s carbon credit marketplace is launching at a pivotal moment when awareness of the climate crisis is reaching an all-time high, and businesses are increasingly looking to become carbon neutral,” said Ryan Graves, Pachama’s lead investor and new director said in a statement. “What attracted me to Pachama was the company’s use of technology to bring trust to an industry that desperately needs it, and gives the verifiable results to the purchasers of carbon credits.”
Awareness doesn’t equal political action, however, and Pachama needs the political will of both governments and consumers to move the needle on creating viable carbon trading markets.
Pachama’s business becomes profitable only when the price of carbon moves beyond $15 per ton of carbon dioxide (or similar emissions) offset. Currently, there are only two markets in the world where that threshold has been reached — the California market and Europe, according to Saez-Gil.
For Pachama’s founder, forest preservation and reforestation projects can have outsized benefits. “There are only 500 forest projects that are certified today… we need tens of thousands,” says Saez-Gil. “There are one billion hectares on the planet available for reforestation without competing with agriculture.”
The restoration of native forests can contribute to replenishing global biodiversity, and captures more carbon than cultivating forests for industrial use, but both are better than destruction to grow row crops or support animal husbandry, Saez-Gil says.
Pachama sources projects that are approved by existing certification bodies, but offers its customers monitoring and management services through access to satellite imagery and sensors that provide information on emissions and carbon capture on reforested land.
It’s a potential solution to the problem of deforestation that’s plaguing countries like Brazil. “The government in Brazil, they want to generate income for the country,” says Saez-Gil. If carbon markets paid as much as ranching, it would reduce the need for animal husbandry and plantation farming in Brazil, Indonesia or places like Peru.
Today, most investments in reforestation projects are done through middlemen, which increases opacity and the chance that projects are being double-counted or sold, according to Saez-Gil. Pachama has a person who is contacting forest project developers so that they can list the projects independently. Then the company verifies the offsets with satellite imaging systems.
The company currently has 23 forest projects — three in the Amazon rain forest in Brazil and Peru and projects in the U.S. in California, Vermont, New Jersey, Connecticut and Maine .
Saez-Gil has high hopes for the future of carbon markets based on demand coming, in part, from new regulations like those imposed on the airline industry.
“Airlines will have to offset part of their emissions as part of CORSIA,” says Saez-gil. That’s an offset of 160 million tons of emission per year. “There is all this demand coming for different offsets for different markets that will make the price go up.”
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Rapyd, which offers fintech-as-a-service via a single API, adds $20M more to its coffers at a $1.2B valuation
One of the biggest trends in the world of financial technology has been an ongoing push towards consolidation, where larger fish are snapping up smaller fish (including a proliferation of interesting startups) to get improved economies of scale in a business model where every transaction brings incremental returns. But today, a startup that has built the concept of consolidation into its basic DNA has raised another round of funding to continue doubling down on its business.
Rapyd — a London-based startup that has built an API that lets customers tap into a range of financial services spanning payments, checkout, funds collection, fund disbursements, compliance as a service, foreign exchange, card issuing and soon logistics across a wide range of geographies — has picked up an additional $20 million. Rapyd’s valuation with the funding is now at $1.2 billion (up from just under $1 billion in October).
The $20 million comes from new investment firm Durable Capital Partners.
Notably, it was only in October that Rapyd announced a $100 million raise. CEO and co-founder and Arik Shtilman said that Rapyd has now raised $180 million in total, with previous investors in the startup including Oak HC/FT Tiger Global, Coatue, General Catalyst, Target Global, Stripe and Entrée Capital. (Stripe, itself a fast-growing fintech upstart, remains only a financial investor in the company, Shtilman confirmed.)
Durable is the firm founded by Henry Ellenbogen, formerly a star investor at T. Rowe Price, in what Rapyd said was the firm’s first investment. (Note: Durable was also announced earlier as an investor in Convoy’s $400 million round, some clear signs that it’s open for business now.)
With Rapyd only recently raising a round, Shtilman said that the reason for the — err — rapid follow up was because the company is gearing up to make some acquisitions, as it too moves in on the consolidation trend by adding in more tools into its “Swiss Army Knife” of services.
“We’ve started to look at two acquisitions that were bigger than what we originally planned, with prices more in the range of $100 million,” he said. Up to now, Rapyd has largely built its technology from the ground up, but this will be about “getting at new business very quickly,” he added. Both deals are in progress now and are likely to close in February / March. One is of a card issuing platform (a la Marqeta), and the other is of a company based in Asia Pacific that is a significant player in payments in the region.
The focus on Asia Pacific both for testing out new services and acquisitions is in part because this, along with Latin America, have shaped up to be important geographies for the company. In the last three months, Rapyd has signed on 20 additional large-scale companies, Shtilman said, with several of them based out of, or serving, customers out of the two regions.
In fact, Rapyd doesn’t talk much about actual customers, but they include e-commerce merchants, gig-economy platforms — including Uber — financial institutions, and technology providers. The basic pitch is that financial services are complex, and providing one like payments often means having to offer others. Building these from scratch if this is not your core competency can be time-consuming and costly, and so that is where a company like Rapyd steps in with its API.
This is what attracted its newest investor, too. “Durable Capital Partners LP has a vision to identify and invest in promising early stage growth companies and invest in teams that have bold ideas but can also execute at a world-class level and build much larger companies,” said Ellenbogen in a statement. “I believe the Fintech-as-a-Service category has tremendous potential as companies seek to embed financial services as an integral part of the next generation technology stack. I believe Rapyd is very well positioned to drive this trend and I believe Arik’s track record in scaling cloud-based businesses will deliver success in this sector.”
When we last talked with Rapyd in October, we asked Shtilman about whether the company would ever move into logistics as part of its range of tools. After all, when you think about the complexities of procuring, storing and moving goods, it’s clear that logistics is one of the cornerstones you need to get right in an online business.
He said that this was on the company’s roadmap, and now Rapyd is in a pilot in Indonesia — an interesting test bed, considering that the country’s is spread across thousands of islands — where it has integrated a logistics service and given access to a single merchant as stage one of its closed beta. It’s also in discussions with other companies about how it can incorporate their services into the Rapyd platform to provide further “logistics as a service” to customers. He also confirmed the Durable has been a help here, by making an introduction to Convoy as part of that wider strategy.
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Southeast Asian real estate portal 99.co agrees to joint venture with iProperty, as their rival PropertyGuru prepares for IPO
Southeast Asian real estate portal 99.co has agreed to form a joint venture with iProperty. As part of the deal, iProperty owner REA Group will invest $8 million of working capital into the venture, expected to be finalized by the second quarter of 2020.
99.co and REA Group, a real estate-focused digital advertising conglomerate that is listed on the Australian Securities Exchange (ASX), say that the joint venture immediately makes 99.co the market leader in Indonesia and positions it to take the top spot in Singapore, as well. The deal also makes 99.co a more formidable rival to PropertyGuru. Backed by TPG Capital and KKR, PropertyGuru is expected to raise up to AUD $380.2 million (about USD $255.9 million) in an IPO on the ASX this month.
The joint venture is expected to be finalized by the second quarter of 2020 and 99.co will assume full control of REA Group brands iProperty.com.sg in Singapore and Rumah123.com in Indonesia. The joint venture will be led by 99.co’s management team, including co-founder and CEO Darius Cheung.
99.co’s last round of funding was a $15.2 million Series B, announced in August, that the company says took its valuation to over $100 million.
In a press statement, Cheung said, “We are coming for market leadership. This is a key milestone that positions us instantly as number one in Indonesia, and well on our way to that in Singapore. Our innovative DNA plus REA’s unrivaled experience and resources makes this partnership a lethal combination Southeast Asia has not seen before.”
The company’s existing shareholders, including Facebook co-founder Eduardo Saverin, Sequoia Capital, MindWorks Ventures, Allianz X, East Ventures and 500 Startups, will have a combined stake of 73%, with REA Group holding the remaining 27%.
Launched in 2014, 99.co was created to make real estate listings more navigable for renters and buyers in Singapore and other Southeast Asian markets. REA Group owns portals in Malaysia, Hong Kong, Indonesia, Singapore and China, and a property review site in Thailand. It is also a stakeholder in Move, the American real estate site, and Indian property portal PropTiger.
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Aspire raises $32.5M to help SMEs secure fast finance in Southeast Asia
Aspire, a Singapore-based startup that helps SMEs secure working capital, has raised $32.5 million in a new financing round to expand its presence in several Southeast Asian markets.
The Series A round for the one-and-a-half-year-old startup was funded by MassMutual Ventures Southeast Asia. Arc Labs and existing investors Y Combinator — Aspire graduated from YC last year — Hummingbird and Picus Capital also participated in the round. Aspire has raised about $41.5 million to date.
Aspire operates a neo-banking-like platform to help small and medium-sized enterprises (SMEs) quickly and easily secure working capital of up to about $70,000. AspireAccount, the startup’s flagship product, provides merchants and startups with instant credit limit for daily business expenses, as well as a business-to-business acceptance and other tools to help them manage their cash flow.
Co-founder and CEO Andrea Baronchelli tells TechCrunch that about 1,000 business accounts are opened each month on Aspire and that the company plans to continue focusing on Southeast Asia, where he says there are about 78 million small businesses, leaving plenty of room to scale (applications can be made through Aspire’s mobile app and are reviewed using a proprietary risk assessment engine before getting final approval from a human). Aspire claims it has seen 30% month-over-month growth since it was founded in January 2018 and expects to open more than 100,000 business accounts by next year.
Baronchelli, who served as a CMO for Alibaba’s Lazada platform for four years, says Aspire launched to close the gap left by the traditional banking industry’s focus on consumer services or businesses that make more than $10 million in revenue a year. As a result, smaller businesses in Southeast Asia, including online vendors and startups, often lack access to credit lines, accounts and other financial services tailored to their needs.
Aspire currently operates in Thailand, Indonesia, Singapore and Vietnam. The startup said it will use the fresh capital to scale its footprints in those markets. Additionally, Aspire is building a scalable marketplace banking infrastructure that will use third-party financial service providers to “create a unique digital banking experience for its SME customers.”
Baronchelli adds that “the bank of the future will probably be a marketplace,” so Aspire’s goal is to provide a place where SMEs can not only open accounts and credit cards, but also pick from different services like point of sale systems. It is currently in talks with potential partners. The startup is also working on a business credit card that will be linked to each business account by as early as this year.
Southeast Asia’s digital economy is slated to grow more than six-fold to reach more than $200 billion per year, according to a report co-authored by Google. But for many emerging startups and businesses, getting financial services from a bank and securing working capital have become major pain points.
A growing number of startups are beginning to address these SMEs’ needs. In India, for instance, NiYo Bank and Open have amassed millions of businesses through their neo-banking platforms. Both of these startups have raised tens of millions of dollars in recent months. Drip Capital, which helps businesses in developing markets secure working capital, raised $25 million last week.
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