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Is India’s BNPL 2.0 set to disrupt B2B?
Both as a term and as a financial product, “buy now, pay later” has become mainstream in the past few years. BNPL has evolved to assume various forms today, from small-ticket offerings by fintechs on consumer checkout platforms and marketplaces, to closed-loop products offered on marketplaces such as Amazon Pay Later (which they are now extending for outside use as well). You can also see some variants offered by companies that want to expand the scope of consumption and consumer credit.
Globally, BNPL has seen the most growth in the consumer segment and has driven retail consumption and lending over the past few years. Consumer BNPL offerings are a good alternative to credit cards, especially for people who do not have a credit history and can’t get credit from banks. That said, a specific vertical of BNPL products is gaining traction — one targeted toward small and medium enterprises (SMEs). This new vertical is known as “SME BNPL.”
BNPL can be particularly useful when flow-based underwriting or transaction-based underwriting is used to offer credit to small businesses.
B2B commerce in India is moving online
E-commerce has seen tremendous growth in India over the past decade. Skyrocketing smartphone and internet penetration led to rapid growth in e-commerce across large cities and smaller towns alike. Consumer credit has also taken off in parallel as credit cards and digital lending spurred credit-based consumption across offline and online stores.
However, the large B2B supply chain enabling the burgeoning retail market was plagued by bottlenecks and inefficiencies because it involved a plethora of intermediaries and streamlining became a big problem. A number of tech players responded by organizing the previously disorganized B2B commerce market at various touch points, inserting convenience, pricing and easier product access through tech-enabled logistics and a modern supply chain.
Image Credits: Redseer
India’s B2B e-commerce space has developed rapidly since 2020. Small businesses have moved from using paper to smartphone apps for running a significant part of their day-to-day business, leading to widespread disruption in how businesses transact today. The COVID-19 pandemic also forced small businesses, which were earlier using physical means to procure goods and services, to try new and online models to conduct their affairs.
Image Credits: Redseer
Moreover, the Indian government’s widespread promotion of an instant payments system in the form of the Unified Payments Interface (UPI) has changed how people send money to each other or pay merchants for their goods and services. The next step for solving the digital B2B puzzle is to embed credit inside every transaction and invoice.
Image Credits: Redseer
If we compare online B2B transactions to the offline world, there is only one missing link: The terms offered to small businesses by their supplier/distributor or vendor. Businesses, unlike consumers, must buy goods and services to eventually trade them, or add value and sell to consumers or others down the value chain. This process is not immediate and has a certain time cycle attached.
The longer sales cycle means many small businesses require credit payment terms when buying inventory. As B2B commerce scales and grows through digital means, a BNPL product that caters to the needs of SMEs can support their growth and alleviate the burden on their cash flows.
How does consumer BNPL differ from SME BNPL?
An SME BNPL product is a purchase financing product for small businesses transacting with suppliers, distributors, aggregator platforms or B2B marketplaces.
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Extra Crunch roundup: China’s new data privacy law, fractional farming, debt vs. equity
China’s first data privacy laws go into effect on November 1, 2021. Will your company be in compliance?
Modeled after the EU’s GDPR, the new regulations “[introduce] perhaps the most stringent set of requirements and protections for data privacy in the world,” writes Scott W. Pink, special counsel in O’Melveny’s Data Security & Privacy practice.
In a comprehensive overview, he explains its key requirements and compliance steps for U.S.-based firms that service Chinese consumers.
“American firms doing business in China or with companies inside China will need to immediately start assessing how this new law will impact their activities,” he advises.
Now that the world has embraced remote work, are visas as critical for startup founders who want to succeed in the United States?
On Tuesday, September 14, at 2 p.m PT/5 p.m. ET, Managing Editor Danny Crichton and immigration law attorney Sophie Alcorn will discuss the matter on Twitter Spaces.
Join @DannyCrichton on Tuesday, September, 14 at 2 p.m. PT/5 p.m. ET as he discusses if remote work will make H-1B visas redundant with @Sophie_Alcorn https://t.co/SCMUiqUj8J
— TechCrunch (@TechCrunch) September 10, 2021
They’ll take questions from the audience, so mark your calendar and follow @techcrunch on Twitter to get a reminder before the chat.
Thanks very much for reading Extra Crunch; I hope you have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Fintech is transforming the world’s oldest asset class: Farmland
Image Credits: hauged (opens in a new window) / Getty Images
Whether or not he actually said it, “buy land, they ain’t making any more of it,” is one of Mark Twain’s best quotes on capitalism.
Past recessions and the ongoing pandemic have created real uncertainty about the future of commercial and residential real estate, but farmland is “historically stable,” says Artem Milinchuk, founder and CEO of FarmTogether.
Anatomy of a SPAC: Inside Better.com’s ambitious plans
Image Credits: mikroman6 (opens in a new window) / Getty Images
Online mortgage company Better.com isn’t waiting to complete its SPAC merger before making big moves: Ryan Lawler reported that it purchased Property Partners, a U.K.-based startup that offers fractional property ownership.
It’s the second company Better bought in recent months: In July, it snapped up digital mortgage brokerage Trussle.
“We aren’t so easily categorized,” said Better CEO Vishal Garg, who told Ryan that the company plans to soon expand into traditional financial services like auto loans and insurance.
Said CFO Kevin Ryan, “a lot of people have their niches in the way they’re attacking this, but we feel like we’re on a path to being full stack where everything’s embedded in the same flow.”
5 factors that can make or break a startup’s growth journey
Image Credits: JoKMedia (opens in a new window) / Getty Images
If you don’t have a good story to share, it doesn’t matter how big your marketing budget is.
“Paid marketing can be a useful tool in your toolkit to accelerate an already humming flywheel. Just don’t let it be the only one,” suggests Brian Rothenberg, a two-time founder who’s now a partner at Defy.
Drawing from his time as VP of growth for Eventbrite, he shares five critical factors for kick-starting, maintaining and measuring growth over the long term.
Debt versus equity: When do non-traditional funding strategies make sense?
Image Credits: Peter Dazeley (opens in a new window) / Getty Images
Many potential founders are well-versed in startup economics — and many are completely green.
When it comes to raising funds, understanding the relative benefits (and limitations) of debt and equity financing is required knowledge, however.
Founders who are less willing to dilute their control may be willing to use debt financing to fund their capital expenditures, “but it doesn’t make sense for everyone,” says six-time entrepreneur David Friend.
Investors are doubling down on Southeast Asia’s digital economy
Image Credits: Getty Images
Last year, startups based in Southeast Asia raised more than $8.2 billion, a 4x increase from 2015.
In the first half of 2021, regional M&A has increased 83% to a record $124.8 billion.
It’s not just venture capitalists and Big Tech who are beefing up their presence in the region.
“Over 229 family offices have been registered in Singapore since 2020, with total assets under management of an estimated $20 billion,” writes Amit Anand, a founding partner of Jungle Ventures.
Edtech leans into the creator economy with cohort-based classes
Image Credits: Bryce Durbin / TechCrunch
Natasha Mascarenhas examined the parallels between edtech and the creator economy, both of which boomed amid the pandemic — and blurred amid the rise of cohort-based classes.
“Edtech and the creator economy certainly differ in the problems they try to solve: Finding a VR solution to make online STEM classes more realistic is a different nut to crack than streamlining all of a creator’s different monetization strategies into one platform. Still, the two sectors have found common ground in the past year.”
Meet retail’s new sustainability strategy: Personalization
Image Credits: Liyao Xie (opens in a new window) / Getty Images
Were the shoes, jacket and makeup that looked so good on Instagram (and in your shopping cart) disappointing when you put them on for the first time?
Due to buyer’s remorse, it’s not uncommon for apparel or beauty products to languish in the back of a drawer or end up as gifts, but there are also serious consequences.
“The beauty industry produces over 120 billion units of packaging every year, little of which is recycled. Globally, an estimated 92 million tons of textile waste ends up in landfills,” Sindhya Valloppillil, founder and CEO of Skin Dossier, notes in a guest column.
The answer to bringing sustainability to the industry, she says, is using tech to personalize the retail experience:
- AR virtual try-on with shade matching
- Advanced virtual fitting rooms with VR/AR for fashion
- Smart packaging with IoT and distributed ledger technology
Plentywaka founder Onyeka Akumah on African startups and global expansion
Image Credits: Bryce Durbin / TechCrunch
Twenty million people live in Lagos, Nigeria, and each day, 14 million of them use the city’s transit system.
Travelers rely on overcrowded public buses that navigate congested routes: What should be a 30-minute trip is often a three-hour journey, but Treepz CEO and co-founder Onyeka Akumah “has big plans to ameliorate the public transport infrastructure in Africa and beyond,” writes Rebecca Bellan.
“We wanted to give people a better way to commute with predictability, where they can know when the bus will get here, the certainty that they will have a seat in a vehicle, that it’s a decent vehicle and a safe one where you can bring your laptop,” said Akumah.
“Those are the things we said we wanted to change.”
Dear Sophie: When can I apply for my US work permit?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
My husband just accepted a job in Silicon Valley. His new employer will be sponsoring him for an E-3 visa.
I would like to continue working after we move to the United States. I understand I can get a work permit with the E-3 visa for spouses.
How soon can I apply for my U.S. work permit?
— Adaptive Aussie
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Givz raises $3M in seed funding to make donations a marketing tool for businesses
Givz, which has developed an API-powered platform that gives brands a way to convert discounts into donations, has raised $3 million in seed funding.
Eniac and Accomplice co-led the financing for the New York-based startup. Additional investors include Supernode Ventures, Claude Wasserstein of Fine Day, Phoenix Club and Dylan Whitman.
Givz was founded in 2017 to make charitable giving more accessible and convenient for the masses. In March 2020, right before the COVID-19 pandemic hit, the company pivoted from B2C to B2B and used the technology rails it had built to create the e-commerce marketing platform that Givz is today.
The company aims to drive “full-price purchasing behavior” by giving consumers the ability to convert the money they would be saving if getting a discount, and donating it to their favorite charities.
Prior to the funding, Givz had been working with more than 80 enterprise, mid-market and SMB retail and e-commerce clients such as H&M, Tom Brady’s TB12, Seedlip and Terez, and accumulated more than 40,000 individual users. Since the shift last year, the company has helped drive more than $1 million to 1,100 charities, according to CEO and founder Andrew Forman.
It just launched on Shopify, which Forman says will give the startup access to the 1.7 million retailers that use Shopify as their e-commerce platform.
Givz operates under the premise that “donation-driven marketing” consistently outperforms discounts and costs less, “making it an attractive addition” to corporate marketing.
“We are creating a new marketing category and generating the largest sustainable charitable giving platform in the process,” he told TechCrunch.
An example of a company using Givz can be found in Tervis, which offered customers “For every $50 you spend, you’ll receive $15 to give to the charity of your choice.”
“They used Givz technology to allow consumers to choose the charity of their choice and make a turnkey disbursement to hundreds of charities,” Forman explained. “They saw a 20% lift in website conversion and a 17% increase in average order value as a result of this offer.”
Image Credits: Givz
Currently, Givz has eight employees with plans to more than double that number over the next year.
The company plans to use the new capital toward that hiring, and to do some marketing of its own.
“We also want to explore the full potential around the consumer behavior data we collect,” Forman said.
In the short term, Givz is focused on “Shopify growth” with direct to consumer brands.
“But we have successful use cases and huge potential with enterprise retailers and financial institutions,” Forman told TechCrunch. “In the future, we have our sights set on restaurants, the gaming industry and global expansion. I believe that using personalized donations to incentivize consumer behavior has endless application across industries, verticals and continents.”
Eniac partner Vic Singh said that there’s been a trend of brands experimenting with different ways to target the socially conscious consumer.
“We believe Givz’s donation-driven marketing platform offers brands the best way to attract the socially conscious consumer while elevating their brand, moving more inventory and driving increased order value rather than simplistic traditional discounting,” he added.
Accomplice’s TJ Mahony said that both he and Singh believed SMS would emerge as a new marketing category, which led to early investments in Attentive and Postscript, respectively.
“We both saw a similar opportunity with Givz,” he wrote via e-mail. “Discounting is a well worn marketing muscle, but it’s detrimental to the brand, margins and customer expectations. We believe continuous impact marketing becomes the alternative to discounting and marketers will begin to build teams and budget around thoughtful and persistent giving strategies.”
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Tiger Global backs Nacelle with $50M for its e-commerce infrastructure
Consumer shift to buying online during the global pandemic — and keeping that habit — continues to boost revenue for makers of developer tools that help e-commerce sites provide better shopping experiences.
LA-based Nacelle is one of the e-commerce infrastructure companies continuing to attract investor attention, and at a speedy clip, too. It closed on a $50 million Series B round from Tiger Global. This is just six months after its $18 million Series A round, led by Inovia, and follows a $4.8 million seed round in 2020.
The company is working in “headless” commerce, which means it is disconnecting the front end of a website, a.k.a. the storefront, from the back end, where all of the data lives, to create a better shopping experience, CEO Brian Anderson told TechCrunch. By doing this, the back end of the store, essentially where all the magic happens, can be updated and maintained without changing the front end.
“Online shopping is not new, but how the customer relates to it keeps changing,” he said. “The technology for online shopping is not up to snuff — when you click on something, everything has to reload compared to an app like Instagram.”
More people shopping on their mobile devices creates friction due to downloading an app for each brand. That is “sucking the fun out of shopping online,” because no one wants that many apps on their phone, Anderson added.
Steven Kramer, board member and former EVP of Hybris, said via email that over the past two decades, the e-commerce industry went through several waves of innovation. Now, maturing consumer behaviors and expectations are accelerating the current phase.
“Retailers and brands are struggling with adopting the latest technologies to meet today’s requirements of agility, speed and user experience,” Kramer added. “Nacelle gives organizations a future-proof way to accelerate their innovation, leverage existing investments and do so with material ROI.”
Data already shows that COVID-era trends accelerated e-commerce by roughly five years, and Gartner predicts that 50% of new commerce capabilities will be incorporated as API-centric SaaS services by 2023.
Those kinds of trends are bringing in competitors that are also attracting investor attention — for example, Shopistry, Swell, Fabric, Commerce Layer and Vue Storefront are just a few of the companies that raised funding this year alone.
Anderson notes that the market continues to be hot and one that can’t be ignored, especially as the share of online retail sales grows. He explained that some of his competitors force customers to migrate off of their current tech stack and onto their respective platforms so that their users can get a good customer experience. In contrast, Nacelle enables customers to keep their tech stack and put components together as they see fit.
“That is painful in any vertical, but especially for e-commerce,” he said. “That is your direct line to revenue.”
Meanwhile, Nacelle itself grew 690% in the past year in terms of revenue, and customers are signing multiyear contracts, Anderson said.
Anderson, who is an engineer by trade, wants to sink his teeth into new products as adoption of headless commerce grows. These include providing a dynamic layer of functionality on top of the tech stack for storefronts that are traditionally static, and even introducing some livestream capabilities later this year.
As such, Nacelle will invest the new round into its go-to-market strategy and expand its customer success, partner relations and product development. He said Nacelle is already “the de facto standard” for Shopify Plus merchants going headless.
“We want to put everything in a tailor-made API for e-commerce that lets front-end developers do their thing with ease,” Anderson added. “We also offer starter kits for merchants as a starting point to get up-and-running.”
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White-label SaaS shipping startup Outvio closes $3M round led by Change Ventures
Outvio, an Estonian startup that provides a white-label SaaS fulfillment solution for medium-sized and large online retailers in Spain and Estonia, has closed a $3 million early-stage financing round led by Change Ventures.
Also participating were TMT Investments (London), Fresco Capital (San Francisco) and Lemonade Stand (Tallinn). Several angels also joined the round, including James Berdigans (Printify) and Kristjan Vilosius (Katana MRP). This is the startup’s first institutional round of funding after bootstrapping since 2018.
Online retailers usually have to use a number of different tools or hire expensive developers to create in-house shipping solutions. Outvio offers online stores of any size a post-purchase shipping setup, which seeks to replicate an Amazon-style experience where customers can also return packages. Among others, it competes with ShippyPro, which runs out of Italy and has raised $5 million to date.
“We can give any online store all the tools needed to offer a superior post-sale customer experience,” Juan Borras, co-founder and CEO of Outvio, said. “We can integrate at different points in their fulfillment process, and for large merchants, save them hundreds of thousands in development costs alone.”
“What happens after the purchase is more important than most shops realize,” he added. “More than 88% of consumers say it is very important for them that retailers proactively communicate every fulfillment and delivery stage. Not doing so, especially if there are problems, often results in losing that client. Our mission is to help online stores streamline everything that happens after the sale, fueling repeat business and brand-loyal customers with the help of a fantastic post-purchase experience.”
“While online retailing has a long way to go, the expectations of consumers are increasing when it comes to delivery time and standards,” Rait Ojasaar, investment partner at lead investor Change Ventures, said. “The same can be said about the online shop operators who increasingly look for more advanced solutions with consumer-like user experience. The Outvio team has understood exactly what the gap in the market is and has done a tremendous job of finding product-market fit with their modern fulfillment SaaS platform.”
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Twitter launches US e-commerce pilot that lets users shop from profiles
Twitter this morning will launch a pilot in the U.S. aimed at testing the potential for e-commerce on its platform. The company is introducing a new “Shop Module” that offers brands, businesses and other retailers the ability to showcase their products to Twitter users directly on the business’ profile. Users will then be able to scroll through a carousel of product images in the module and tap through on a product they’re interested in purchasing. This opens up the business’s website inside the Twitter app itself, where the customer can learn more about the product in question and opt to make a purchase.
The Shop Module will appear in a new, dedicated space at the top of a supported Twitter profile, which can be seen by U.S. users in English on iOS devices.
The company told TechCrunch that only businesses with a Professional Profile will be able to use the feature at this time.
Professional Profiles, which began testing in April, give businesses, nonprofits, publishers and creators the ability to display specific information about their business directly on their profile, including things like their address, phone number, operating hours and more. Essentially, it’s the Twitter equivalent to something like a Facebook Page for a business.
At launch, the new Shop Module will be made available to only a small group of pilot testers. In addition to gaming retailer @GameStop and travel brand @ArdenCove, Twitter says there will only be approximately 10 other brands across the lifestyle, traditional retail, gaming, media and entertainment, tech and telco industries who will gain access to the new feature.
At present, Twitter isn’t offering a way for interested businesses to sign up for the pilot because the company is only in the initial phases of testing this feature, it said.
Image Credits: Twitter
While Twitter users often discuss products on the app and even reach out to companies directly for help with purchases, it’s unclear whether users will come to view Twitter as a shopping platform.
With the pilot, Twitter aims to better understand what could help it make that shift by tracking which types of products drive traffic to online retailers. For example, it wants to determine whether people are inspired by online conversations in the heat of the moment — like sports fans buying team apparel — or whether Twitter users could be encouraged to make purchases of a more lasting impact, like products for a new skincare routine. Having a diverse lineup of early pilot testers will help the company to compare data across verticals to learn what works best.
Twitter says it will also work directly with businesses to better understand their needs through the creation of a new Merchant Advisory Board, which will consist of “best-in-class examples” of merchants on Twitter.
The company earlier this year mentioned its plans to expand into e-commerce. At Twitter’s Analyst Day presentation in February, where it first announced its Super Follow platform for creators, the company also briefly spoke about its e-commerce investments.
“We’re … starting to explore ways to better support commerce on Twitter,” Twitter revenue lead Bruce Falck said during the event. “We know people come to Twitter to interact with brands and discuss their favorite products. In fact, you may have even noticed some businesses already developing creative ways to enable sales on our platform.
“This demand gives us confidence in the power of combining real-time conversation with an engaged and intentional audience. Imagine easily discovering, and quickly purchasing, a new skincare product or trendy sneaker from a brand you follow with only a few clicks,” Falck added.
Since then, Twitter has tested a new e-commerce feature for tweets, which allowed businesses to link out to online product pages — like those on a Shopify store, for instance.
Twitter CFO Ned Segal also touted the potential to shop on Twitter when speaking to investors at the J.P. Morgan Technology, Media and Communications conference in May, noting that people “do a lot of research on Twitter before they buy something.”
Twitter’s entry into online shopping comes at a time when major tech companies and social platforms are ramping up their investments in e-commerce. Facebook has made significant moves into e-commerce with shopping features across Facebook, Instagram and WhatsApp, including with initiatives like online storefronts, integrated checkout, product drops, video shopping and more.
Shopify has also partnered with a number of tech platforms, including Facebook, TikTok and Google, to make it easier for consumers to connect with products sold by its merchants.
It’s worth noting that Twitter previously attempted to run a commerce operation and failed. In 2017, the company began to wind down its “Buy” button product, which had allowed Twitter users to click to make purchases, and the retailer partnerships associated with that effort due to lack of traction. Clearly, the company believes the time is now right to try again.
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Vaayu’s carbon tracking for retailers raises $1.6M, claims it could cut CO2 in half by 2030
Carbon tracking is very much the new hot thing in tech, and we’ve previously covered more generalist startups doing this at scale for companies, such as Plan A Earth out of Berlin.
But there’s clearly an opportunity to get deep into a vertical sector and tailor solutions to it.
That’s the plan of Vaayu, a carbon tracking platform aimed specifically at retailers. It has now raised $1.57 million in pre-seed funding in a round led by CapitalT. Several angels also took part, including Atomico’s Angel Program, Planet Positive LP, Saarbrücker 21, Expedite Ventures and NP-Hard Ventures.
Carbon tracking for the retail fashion industry, in particular, is urgently needed. Unfortunately, the fashion industry remains responsible for 10% of annual global carbon emissions, which ads up to more than all international flights and maritime shipping combined.
Vaayu says it integrates with various point-of-sale systems, such as Shopify and Webflow. It then pulls in data on logistics, operations and packaging to monitor, measure and reduce their carbon emissions. Normally, retailers calculate emissions once a year, which is obviously far less accurate.
Vaayu was founded in 2020 by Namrata Sandhu (CEO), former head of Sustainability at fashion retailer Zalando, as well as Anita Daminov (CPO) and Luca Schmid (CTO). Vaayu currently has 25 global brand customers, including Missoma, Armed Angels and Organic Basics.
Commenting on the fundraise, Sandhu said: “We have only nine short years left to achieve the UN’s goal of reducing carbon emissions by 50% by 2030 and as the third-largest contributor to global emissions, retailers need to take action — and fast. Vaayu is here to help retailers measure, monitor, and reduce their carbon footprint at scale across the entire supply chain — something that I know from my own experience can be complex and expensive.”
Speaking to me over a call, Sandhu told me: “Putting the focus on retail basically allows us to automate the calculation, which means in three clicks you can get your carbon footprint right away. That then allows us to really get accurate data, and with that, we can basically do reductions specific to the business but using software, rather than any kind of manual intervention or a kind of ‘intermediate’ state where you need to put together an Excel sheet. Because we focus on retail we can automate the entire process and also automate the reductions.”
“We are delighted to be backed by female-led CapitalT who understood us and our vision right from the start. We look forward to developing Vaayu further in the coming months so we can reach as many retailers as possible and help put the brakes on the impending climate crisis,” she added.
Janneke Niessen, founding partner, CapitalT commented: “We are very excited to join Vaayu on their mission to reduce carbon emission for retailers worldwide. The Vaayu product is very scalable and its quick and easy implementation allows for fast adoption. We are confident that with this experienced team, Vaayu will soon be one of the fastest-growing climate tech companies in Europe and the world.”
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Esper raises $30M Series B for its IoT DevOps platform
There may be billions of IoT devices in use today, but the tooling around building (and updating) the software for them still leaves a lot to be desired. Esper, which today announced that it has raised a $30 million Series B round, builds the tools to enable developers and engineers to deploy and manage fleets of Android-based edge devices. The round was led by Scale Venture Partners, with participation from Madrona Venture Group, Root Ventures, Ubiquity Ventures and Haystack.
The company argues that there are thousands of device manufacturers who are building these kinds of devices on Android alone, but that scaling and managing these deployments comes with a lot of challenges. The core idea here is that Esper brings to device development the DevOps experience that software developers now expect. The company argues that its tools allow companies to forgo building their own internal DevOps teams and instead use its tooling to scale their Android-based IoT fleets for use cases that range from digital signage and kiosks to custom solutions in healthcare, retail, logistics and more.
“The pandemic has transformed industries like connected fitness, digital health, hospitality, and food delivery, further accelerating the adoption of intelligent edge devices. But with each new use case, better software automation is required,” said Esper CEO and co-founder Yadhu Gopalan, who founded the company together with COO Shiv Sundar. “Esper’s mature cloud infrastructure incorporates the functionality cloud developers have come to expect, re-imagined for devices.”
Image Credits: Esper
Mobile device management (MDM) isn’t exactly a new thing, but the Esper team argues that these tools weren’t created for this kind of use case. “MDMs are the solution now in the market. They are made for devices being brought into an environment,” Gopalan said. “The DNA of these solutions is rooted in protecting the enterprise and to deploy applications to them in the network. Our customers are sending devices out into the wild. It’s an entirely different use case and model.”
To address these challenges, Esper offers a range of tools and services that includes a full development stack for developers, cloud-based services for device management and hardware emulators to get started with building custom devices.
“Esper helped us launch our Fusion-connected fitness offering on three different types of hardware in less than six months,” said Chris Merli, founder at Inspire Fitness. “Their full stack connected fitness Android platform helped us test our application on different hardware platforms, configure all our devices over the cloud, and manage our fleet exactly to our specifications. They gave us speed, Android expertise, and trust that our application would provide a delightful experience for our customers.”
The company also offers solutions for running Android on older x86 Windows devices to extend the life of this hardware, too.
“We spent about a year and a half on building out the infrastructure,” said Gopalan. “Definitely. That’s the hard part and that’s really creating a reliable, robust mechanism where customers can trust that the bits will flow to the devices. And you can also roll back if you need to.”
Esper is working with hardware partners to launch devices that come with built-in Esper-support from the get-go.
Esper says it saw 70x revenue growth in the last year, an 8x growth in paying customers and a 15x growth in devices running Esper. Since we don’t know the baseline, those numbers are meaningless, but the investors clearly believe that Esper is on to something. Current customers include the likes of CloudKitchens, Spire Health, Intelity, Ordermark, Inspire Fitness, RomTech and Uber.
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Extra Crunch roundup: ‘Nightmare’ security breach, Poshmark’s IPO, crypto boom, more
The rest of the world may be slowing down as we prepare for Christmas and the new year, but we are not taking our foot off the gas.
Alex Wilhelm keeps a close watch on the public markets in his column The Exchange, but this week, he branched out to look at some of the metrics underpinning soaring cryptocurrency prices and turned his gaze on StockX, the consumer reseller marketplace that just raised $275 million in a Series E that values the company at approximately $2.8 billion.
“Selling a tenth of your company for north of a quarter-billion may be somewhat common among late-stage software startups with tremendous growth,” he says, but “don’t laugh — the round actually makes pretty OK sense.”
Our staff continues to file their end-of-year stories: We ran a post this morning by Manish Singh that studies India’s massive total addressable market for retail. The nation has more than 60 million mom-and-pop neighborhood stores, and companies like Walmart and Amazon are eager to offer help with payments, logistics and inventory management — as are hundreds of native and foreign startups.
In an interview with author and MIT professor Sinan Aral, Managing Editor Danny Crichton discussed some of the debates currently swirling around the desire in some quarters to regulate social media platforms. In “The Hype Machine,” Aral explores topics like neuroscience, economics and misinformation before offering potential solutions for resolving what he calls “a full-blown social media crisis.”
The stories that follow are an overview of Extra Crunch from the last five days. Complete articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.
Thank you very much for reading Extra Crunch this week; I hope you have a safe, relaxing weekend!
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Unpacking Poshmark’s IPO filing
Image Credits: Nigel Sussman (opens in a new window)
How did fashion marketplace Poshmark go from posting regular losses in 2019 to generating net income in 2020?
After the company filed a public S-1 last night, Alex Wilhelm pondered the question this morning in The Exchange.
Like many e-commerce platforms, Poshmark saw a surge in activity during the COVID-19 pandemic, but it also slashed its marketing spend, which helped boost profits. As the cash-rich company prepares its road show, “Poshmark is valuable,” Alex concluded.
“How valuable the market will decide. But who will it enrich with its final pricing decision?”
Just how bad is that hack that hit US government agencies?
WASHINGTON, D.C. – APRIL 22, 2018: A statue of Albert Gallatin, a former U.S. Secretary of the Treasury, stands in front of The Treasury Building in Washington, D.C. The National Historic Landmark building is the headquarters of the United States Department of the Treasury. (Photo by Robert Alexander/Getty Images)
The breach of FireEye and SolarWinds by hackers working on behalf of Russian intelligence is “the nightmare scenario that has worried cybersecurity experts for years,” reports Zack Whittaker.
The intrusion began several months ago, but news of the breach wasn’t made public until this week.
“Given that potential victims include defense contractors, telecoms, banks, and tech companies, the implications for critical infrastructure and national security, although untold at this point, could be significant,” said Erin Kenneally, director of cyber risk analytics at Guidewire, an industry platform for insurance carriers.
In his analysis for Extra Crunch, Zack breaks down the rippling effects of supply-chain attacks that can compromise platforms like SolarWinds, which is used by more than 420 of the Fortune 500.
From startups to Starbucks: The embedded API opportunity
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Embedded finance connects services like payment processing with everyday activities like grabbing a coffee before unlocking an e-scooter.
“The ability to be at the right place at the right time, supporting consumers and merchants alike, where they want it, how they want it and when they want it — cannot be understated,” says Simon Wu, an investment director with Cathay Innovation.
In a post that identifies embedded finance’s top providers and enablers, he offers advice for startups and established brands that are hoping to “earn and build customer loyalty while generating new revenue streams.”
Is rising usage driving crypto’s recent price boom?
Image Credits: Nigel Sussman (opens in a new window)
Bitcoin is at an all-time high.
CoinMarketCap reports that crypto market values have reached almost $659 billion; that figure was just $140 billion in March 2020.
“These gains have created a huge amount of wealth for crypto holders,” Alex Wilhelm wrote yesterday.
To get a better handle on why crypto values are sky-bound, he parsed some basic industry metrics, including the number of unique bitcoin addresses, fees paid and transactions per day.
“Do the price gains make sense in the short term? Who knows,” he wrote, “but they are not based on nothing.”
2020 was a disaster, but the pandemic put security in the spotlight
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For his year-end Extra Crunch story, security reporter Zack Whittaker looked back at the myriad security challenges and vulnerabilities COVID-19 brought to the fore.
The hacks of Fire Eyes and SolarWinds were just one link in the chain: How well is your company prepared to deal with file-encrypting malware, hackers backed by nation-states or employees accessing secure systems from home?
“With 2020 wrapping up, much of the security headaches exposed by the pandemic will linger into the new year,” says Zack.
Inside Zoox’s six-year ride from prototype to product
Zoox Fully Autonomous, All-electric Robotaxi. Image Credits: Zoox
After six years of research and development, autonomous vehicle company Zoox this week unveiled an electric robotaxi that can carry four people at a maximum speed of 75 miles per hour.
Automotive writer Kirsten Korosec interviewed Zoox co-founder and CTO Jesse Levinson to learn more about the vehicle’s development and how the company overcame a series of technical and legal challenges.
“I would say that if you have a big idea and you’re confident that it makes sense, you should at least explore the idea, rather than giving up because the current regulations aren’t designed for it,” said Levinson.
Kirsten only had 15 minutes to interview Levinson, but this comprehensive interview covers topics like regulatory compliance, Zoox’s relationship with parent company Amazon and the highest (and lowest) moments he experienced along the way.
Pluralsight $3.5B deal signals a matured edtech market
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In one of the largest enterprise acquisitions of 2020, Visa Equity Partners this week purchased Utah-based edtech startup Pluralsight for $3.5 billion.
According to the entrepreneurs and investors reporter Natasha Mascarenhas spoke to, this deal “shows the strength of edtech’s capital options as the pandemic continues.”
“What’s happening in edtech is that capital markets are liquidating,” a major change from “the old days where the options to exit were very narrow,” says Deborah Quazzo, a managing partner at GSV Advisors and seed investor in Pluralsight.
Dear Sophie: How did immigration change for startup founders in 2020?
Image Credits: Sophie Alcorn
Dear Sophie:
I’m on an F1 OPT and am about to incorporate a startup with my two American co-founders.
What were the biggest immigration changes in 2020 affecting us?
—Ambitious in Albany
How to pick an investor in good or bad times
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Founders and the VCs who back them may not be friends, but they’re usually friendly.
Investors are on a first-name basis with entrepreneurs from their portfolio companies and frequently have candid conversations with them about life, work and the world in general. In the before times, they might even have shared a meal or attended a baseball game together.
But make no mistake, it is a top-down relationship — the investor will always have the upper hand. When an entrepreneur accepts a check, they are hiring their next boss.
In an Extra Crunch guest post, Quiq CEO and founder Mike Myer poses two questions for founders who are considering a new relationship with a VC:
- How can the investor help the business?
- What’s the risk that the investor will hurt the business?
From India’s richest man to Amazon and 100s of startups: The great rush to win neighborhood stores
NEW DELHI, INDIA – 2011/12/18: Rice is sold at a night market in Paharganj, the urban suburb opposite New Delhi Railway Station. (Photo by Frank Bienewald/LightRocket via Getty Images)
In India, about 90% of consumers buy their everyday goods from neighborhood-based kirana stores instead of supermarkets.
As a result, U.S. retail giants like Walmart and Amazon have adopted an “if you can’t beat them, join them” approach, offering the nation’s 60 million mom-and-pop shops software for inventory control, payments and e-commerce.
India’s retail market will be worth an estimated $1.3 trillion by 2025, but e-commerce represents just 3% of that activity today, reports Manish Singh.
For his final Extra Crunch story of 2020, he looked at the startups and major players who are hoping to carve out their niche in one of the world’s largest retail ecosystems.
ClickUp CEO talks hiring, raising and scaling in the white-hot productivity space
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Earlier this year, business productivity software startup ClickUp raised a $35 million Series A.
Now, just six months later, the company has closed a second round of $100 million that values the San Diego-based startup at $1 billion.
Lucas Matney interviewed CEO Zeb Evans this week to learn more about how the company was buoyed by pandemic-based behavior shifts that doubled its customer base and multiplied revenue by a factor of nine.
“I think that the biggest thing that we’ve always focused on is shipping a new version of ClickUp every week. That is our differentiation,” he said. “We’ve kind of created these iterative cycles called natural product-market fit and it’s been hard to keep up with that.”
2020’s top 10 enterprise M&A deals totaled a staggering $165B
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In 2018, the total value of the year’s 10 top enterprise mergers and acquisitions reached $87 billion; last year, that figure fell to just $40 billion.
But in 2020, 10 M&A deals accounted for $165.2 billion.
“Last year’s biggest deal — Salesforce buying Tableau for $15.7 billion — would have only been good for fifth place on this year’s list,” notes enterprise reporter Ron Miller. “And last year’s fourth largest deal, where VMware bought Pivotal for $2.7 billion, wouldn’t have even made this year’s list at all.”
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Chicago’s ShoppingGives gets served a seed round from Serena Williams’ VC firm, Serena Ventures
ShoppingGives, a Chicago-based startup pitching retailers a service that can integrate nonprofit donations into their sales and shopping platforms, has raised an undisclosed amount from Serena Williams’ venture capital firm, Serena Ventures, the company said.
ShoppingGives allows retailers to offer a donation on behalf of a shopper to any of over 1.5 million nonprofits that are on its list — all without leaving the retailer’s website.
The company said that retailers can use the donation data to create a more authentic and personalized engagement with customers based on the causes they support.
“ShoppingGives aligned with my values of investing in businesses and entrepreneurs who are making a difference. By creating opportunities to grow social impact with a seamless approach for retailers and brands, ShoppingGives is charting the course for all businesses to stand forth as agents of change in our society,” said Williams in a statement.
The company’s technology helps retailers manage and report donations and is already recommended by Shopify as one of a collection of apps for merchants setting up their online stores. Its service integrates with e-commerce content management systems and is already a partner for the PayPal giving fund.
ShoppingGives has already donated to more than 6,000 nonprofit organizations selected by customers, according to the company. Brands like Kenneth Cole, Natori, White + Warren, Margaux, Solstice Sunglasses, Tomboyx, Fresh Clean Tees, Blind Barber, Huron and Neighborhood Goods use the service already.
Image Credit: ShoppingGives
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