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Fintech startup SellersFunding raises $166.5M in equity, credit round to support e-commerce sellers
SellersFunding secured $166.5 million in a combination of Series A equity funding and a credit facility to continue developing its technology and payments platforms for e-commerce businesses.
Northzone led the round and was joined by Endeavor Catalyst and Fasanara. SellersFunding CEO Ricardo Pero did not disclose the funding breakdown, but did say the company previously raised two seed rounds for a total of $40 million in equity and more than $100 million in credit facilities, including one that the company was expanding to $200 million.
SellersFunding, with offices in Florida, New York and London, created a digital platform that delivers financial tools and resources to streamline global commerce for thousands of marketplaces, including working capital, cross-border cash management, tax solutions and business valuation.
Pero got the idea for the company after spending 20 years in the financial industry. He left JP Morgan in 2016 with a drive to start his own company. He was consulting for a friend selling on Amazon who asked him to help make sense of Amazon’s fees and to review the next year’s budget because the friend was struggling to keep up with growth.
“I helped him address the fees issue, but when I went to talk to traditional lenders, I found that they have no clue about e-commerce and the needs of SMEs,” he said.
In addition to being a lending source for businesses selling on these marketplaces, SellersFunding leverages sales data provided by the marketplaces and e-commerce platforms to create sales and cash flow estimates based on the credit limits given to clients so that owners can better understand the fees they are paying and make more informed decisions.
He founded the company in 2017, and today has over 30,000 registered users and is approaching $10 billion in sales volume that is feeding data into SellersFunding’s daily models. The company makes money as both a lender and on fees it charges for payments collected by its customers. Merchants can collect money from marketplaces and pay their suppliers in local or foreign currency.
SellersFunding has consistently grown 300% year over year, Pero said. As such, he intends to use the new funding to scale globally, expand the team, create a marketing budget and look for two small acquisitions in the U.S. and Europe.
The company will continue to invest on the payments side and to promote cross-border payments.
“When I look at the payments landscape, companies are competing on pricing and I don’t think we will ever have a focus there, but instead will compete on customer experience,” Pero added. “Our core business will always be lending and our core investments will be payments and technology, but then we will extend to other services that our clients want.”
With an eye on expanding internationally, it fit to bring on Northzone as a partner, he added. The venture firm is based in Europe and was of a similar vision for thinking globally.
Jeppe Zink, general partner at Northzone, said via email that Pero and his team “are the most experienced in this category” and are building a category leader that is “more experienced and understanding of the lending side than its competitors.”
“We have seen this massive rise in e-shopping, most of the new ones coming from marketplaces like Amazon and Shopify, and if you look at the sellers, thousands are small businesses sourcing their goods which means that they are very important customers,” Zink added. “Normal banks like Barclay can’t check credit. SellersFinding is helping small businesses get this credit, and rightly so. In the same way we thought neobanks won with accounts created when it comes to delivering credit and banking products, they are nowhere to be found yet.”
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Where top VCs are investing in remote events
The novel coronavirus pandemic has rapidly moved companies into a remote-first world.
Nearly all of the world’s largest events have been canceled, put on pause or pivoted to online-only. In the tech world, event cancellations thus far have included SXSW, GDC, Mobile World Congress, Google I/O, Facebook F8, E3 and others.
As more and more hosts consider staging fully remote events as possible alternatives, we decided to take a deeper look into the venture-backed startups focused on supporting large-scale virtual gatherings, like Hopin and Run The World. To further understand the impact of COVID-19, we asked five leading VCs who have invested in or have knowledge of startups focused on remote events to update us on the state of the market and to share where they see opportunity in the sector:
- Sarah Cannon, Index Ventures
- Connie Chan, Andreessen Horowitz
- Andrei Brasoveanu, Accel Partners
- Ryan Kuder, Techstars Anywhere
- Paul Murphy, Northzone
Sarah Cannon, Index Ventures
Which trends in remote events/conferencing excite you the most from an investing perspective?
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The companies that will shape the upcoming multiverse era of social media
Throughout this series on the rise of multiverse virtual worlds, I have outlined the collision of gaming and social media into a new multiverse era of social media within virtual worlds due to technological and cultural changes. The result will be a healthier ecosystem of social media than what currently exists and the economic development of these virtual worlds such that many people turn to them as sources of income.
The critical question that remains in this final part of the series: Who will be the dominant companies of this multiverse era who build the most popular virtual worlds? Will one virtual world achieve a monopoly or will there be many worlds we hop between on a daily basis? Will the most influential company be the developer of a certain world or an infrastructure layer underpinning many worlds?
(This is the final column in a seven-part series about “multiverse” virtual worlds.)
There are three categories of competitors in position for this new stage: gaming incumbents, social media incumbents and new virtual world startups.
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Decentralized video infrastructure platform Livepeer raises $8M Series A
Video is the core entertainment medium of the web. Platforms like YouTube, Twitch, Netflix and more deliver millions of hours of videos to hungry consumers every day, and those deliveries will only intensify as video games move increasingly to streaming models.
Yet, delivering all of that content remains an expensive and challenging endeavor. The largest platforms employ hundreds of video-encoding specialist engineers to optimize the transcoding and delivery costs of their product, while also paying millions either for their own cloud infrastructure or to AWS or Google Cloud. Yet, few affordable options exist for startups — such as live-streaming apps like Houseparty (which was bought last week by Epic Games) — or even for large enterprises with streaming needs but without access to specialized hardware.
That’s where Livepeer comes in. The brainchild of multi-time founder duo Doug Petkanics and Eric Tang, Livepeer offers a decentralized platform for video encoding centered on the Ethereum network. Its early success has attracted the attention of media VCs, and the company announced today that it has raised an $8 million Series A venture capital round led by Northzone. Houseparty founder Ben Rubin joined the round as well, and video infrastructure behemoth Brightcove’s former CEO David Mendels also joined as an advisor to the company.
Livepeer is essentially a marketplace between encoding providers (the supply side) and app developers who need video-streaming services (the demand side). Today, developers can integrate Livepeer inside their apps by downloading the node, running the Livepeer media server and funding their account with Ethereum. So far, more than 100 events have streamed their videos using the platform, although Petkanics admits that they have been an “early-adopter, philosophically-aligned crowd.”
At this point in the life cycle of crypto and blockchain, it can be easy to be skeptical of next-generation technologies built on these platforms. But Petkanics believes there is a unique opportunity in video that connects well with this market.
In addition to the absolutely stupendous increase in video streaming across the web, there is a unique compute market for encoding: the millions of GPUs bought by crypto miners over the past few years. Those GPUs calculate the hashes required to make money in crypto, but in many cases according to Petkanics, leave idle the other processing units on those chips that actually handle video encoding. Livepeer sees an opportunity — at least early in the company’s growth cycle — to essentially bootstrap on top of that excess capacity for processing power.
Right now, Petkanics told me the company has more than 30 providers of compute power on the platform, and that the “supply side of the network is running, and it is the last thing that keeps me up at night.”
That excess compute power is driving significantly lower prices for encoding. Petkanics said that Livepeer is 10 times cheaper than incumbent streaming providers, and with additional development work in the coming years, he believes he can further improve that cost advantage. Today, he said that the platform can handle two streams for roughly 70 cents per day, compared to $3 per stream per hour of incumbents (a number that surely varies across companies with different levels of negotiation leverage).
Having compute power is one thing — getting customers to use it is another. The goal of the Series A funding, along with the company’s new Pilot Partner Program, is to begin implementing applications outside of the crypto-fans and enter the enterprise. The company is offering six months free for new participants as an inducement to try the platform.
Ultimately, Petkanics sees Livepeer creating a “token coordinating network” that incentivizes more compute power to join and match the needs of customers. Even more interestingly, the increasing need of particular video-encoding algorithms means there is an incentive for developers to add new functionality to the company’s open-source media server, creating a novel way to improve open-source sustainability.
Petkanics and Tang have previously worked together with Jordan Cooper on Wildcard, a redesign of the mobile browser that had previously raised $10 million, led by General Catalyst. Before that, they worked together at Hyperpublic, which developed databases of local information with an API for developers that sold to Groupon in 2012. Livepeer has 12 employees, with half based in New York City, and half distributed.
In addition to Northzone, Digital Currency Group, Libertus, Collaborative Fund, Notation Capital, Compound, North Island and StakeZero joined the round.
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Talking the future of media with Northzone’s Pär-Jörgen Pärson
We live in the subscription streaming era of media. Across film, TV, music, and audiobooks, subscription streaming platforms now shape the market. Gaming and podcasting could be next. Where are the startup opportunities in this shift, and in the next shift that will occur?
I sat down with Pär-Jörgen “PJ” Pärson, a partner at European venture firm Northzone, to discuss this at SLUSH this past winter. Pärson – a Swede who now runs Northzone’s office in NYC – led the top early-stage investor in Spotify and led the $35 million Series C in $45/month sports streaming service fuboTV (which has roughly 250,000 subscribers).
In the transcript below, we dive into the core investment thesis that has guided him for 20 years, how he went from running a fish distribution to running a VC firm, his best practices for effective board meetings and VC-entrepreneur relationships, and his assessment of the big social platforms, AR/VR, voice interfaces, blockchain, and the frontier of media. It has been edited for length and clarity.
From Fish to VC
Eric Peckham:
Northzone isn’t your first VC firm — Back in 1998, you created Cell Ventures, which was more of a holding company or studio model. What was your playbook then?
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Klang gets $8.95M for an MMO sim sitting atop Improbable’s dev platform
Berlin-based games studio Klang, which is building a massive multiplayer online simulation called Seed utilizing Improbable’s virtual world builder platform, has just bagged $8.95M in Series A funding to support development of the forthcoming title.
The funding is led by veteran European VC firm Northzone. It follows a seed raise for Seed, finalized in March 2018, and led by Makers Fund, with participation by firstminute capital, Neoteny, Mosaic Ventures, and Novator — bringing the total funding raised for the project to $13.95M.
The studio was founded in 2013, and originally based in Reykjavík, Iceland, before relocating to Berlin. Klang’s original backers include Greylock Partners, Joi Ito, and David Helgason, as well as original investors London Venture Partners.
The latest tranche of funding will be used to expand its dev team and for continued production on Seed which is in pre-alpha at this stage — with no release date announced yet.
Nor is there a confirmed pricing model. We understand the team is looking at a variety of ideas at this stage, such as tying the pricing to the costs of simulating the entities.
They have released the below teaser showing the pre-alpha build of the game — which is described as a persistent simulation where players are tasked with colonizing an alien planet, managing multiple characters in real-time and interacting with characters managed by other human players they encounter in the game space.
The persistent element refers to the game engine maintaining character activity after the player has logged off — supporting an unbroken simulation.
Klang touts its founders’ three decades of combined experience working on MMOs EVE Online and Dust 514, and now being rolled into designing and developing the large, player-driven world they’re building with Seed.
Meanwhile London-based Improbable bagged a whopping $502M for its virtual world builder SpatialOS just over a year ago. The dev platform lets developers design and build massively detailed environments — to offer what it bills as a new form of simulation on a massive scale — doing this by utilizing distributed cloud computing infrastructure and machine learning technology to run a swarm of hundreds of game engines so it can support a more expansive virtual world vs software running off of a single engine or server.
Northzone partner Paul Murphy, who is leading the investment in Klang, told us: “It is unusual to raise for a specific title, and we are for all intents and purposes investing in Klang as a studio. We are very excited about the team and the creative potential of the studio. But our investment thesis is based on looking for something that really stands out and is wildly ambitious over and above everything else that’s out there. That is how we feel about the potential of Seed as a simulation.”
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Bloglovin’ becomes Activate and names Kamiu Lee as its new CEO
Bloglovin’ has a new name, new funding and a new CEO: Kamiu Lee, who previously served as the company’s vice president of strategy and business development.
It sounds the rebrand and Lee’s promotion are both part of a growing emphasis on the company’s influencer marketing business, where it helps advertisers find influencers who can promote their brands and products. In fact, the new name Activate comes from the company’s existing influencer marketing platform Activate by Bloglovin’, which was built around its acquisition of Sverve two years ago.
“Activate, from a commercial standpoint, is what represents who we are today,” Lee told me.
At the same time, she said the company will continue to support the Bloglovin’ product, which allows readers to find and follow fashion bloggers. The two sides of the business are tied together because it’s “a way for these creators to get discovered, and so it continues to be an audience development tool … for them.”
Lee told me she’s actually worn a number of different hats at Bloglovin’ since joining four years ago as the company’s first monetization-focused hire. With her experience across the company and her current focus on business and strategy, she said it seemed like a “natural step” to take the lead for “the next stage of the company.”
Meanwhile, Bloglovin’s outgoing CEO Giordano Contestabile will remain involved as a board member and advisor.
Lee acknowledged that Activate faces plenty of competition from other influencer marketing companies, but she said its approach is distinguished by the richness of its data (Activate isn’t just scraping public data but also getting direct access to the influencers’ own analytics), as well as its “real care for the content and the influencers.”
“It’s really easy to completely cater to the brands, and to a certain extent, if the dollars are there, the influencers will follow,” Lee said. “But in order to be really sustainable, you need great content, and you need to really understand the influencers.”
She also pointed to the size and breadth of Activate’s influencer network — it’s worked with 75,000 influencers to create 6,500 pieces of content per month over the past 12 months. This allows brands to create campaigns that combine content from, say, a single top tier influencer, 15 mid-tier influencers and 100 micro-influencers.
Activate is also launching a new service called Activate Studio, which supplements its existing self-serve product by supporting brands that don’t have large social media teams of their own, helping them develop and manage their influencer marketing strategy.
On top of its other news, the company has also raised an undisclosed amount of new funding from Northzone.
“Within the marketing and advertising industries, we see the incredible value to be captured by influencer marketing,” said Northzone’s Par Jorgen Parson in a statement. “Activate’s unique relationship and dedication to their influencers and industry-leading expertise make them an obvious front-runner among companies competing in the space.”
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Join Us For A Micro-Meetup In New York Tonight
The inimitable Jon Shieber will be interviewing Pär-Jörgen Pärson of Northzone VC at a mini-meetup to be held in New York tonight and you’re invited. You can RSVP here. The event will be held at 116 Houston Street, Manhattan, NY and start at about 7pm. Shieber will talk to PJ for a bit and then there will be some good old networking, wine drinking, and the occasional heated argument… Read More
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Berlin-based online fashion and lifestyle retailer Lesara wants to make it easier for consumers in Europe to buy ‘direct’ from factories in Asia, thus passing on significant discounts.