Contabilizei raises $20 million to ease Brazilians’ tax pain

Online tax filing and accounting service, Contabilizei, has raised $20 million in a new round of financing led by Point72 Ventures, the early stage investment arm associated with hedge fund guru Steven Cohen’s Point72 Asset Management.

Smart money in both the venture and private equity space has been long Brazil for a bit, and the new investment provides even more firepower to the thesis that Brazil’s startup ecosystem is on the move.

“For the Brazilian ecosystem, the investment represents the trust and the opportunity that we have here in the Brazilian market. For quite some time it was difficult to attract this kind of investment from abroad,” says Contabilizei chief executive Vitor Torres. Even though we had a recession there are technology companies that are growing,” Torres says, saying that the company has already staved off acquisition offers and will eventually eye a potential public offering in U.S. or domestic markets.

Though it was only founded five years ago, the company already has 200 employees and more than 10,000 customers throughout Brazil.

Contabilizei has already audited more than 2 billion reals in customer revenue and saved its users over 500 million reals in taxes. For new companies, Contabilizei will also offer free business registration and formation filings. So far, the company has helped 5,000 new businesses get their paperwork done around the country.

“In Brazil, one of the greatest frictions for a small company is meeting its tax reporting requirements,” said Pete Casella, Head of Fintech & Financial Services Investments at Point72 Ventures. “By building an automated tax accounting service that can deliver services at a fraction of the cost of a traditional accountant, we believe that Contabilizei has established the high trust relationships that will enable it to serve customers in many new ways over the coming years.”

New investors also contributed to the round including the International Financial Corp., an investment arm of the The World Bank, and Quona Capital, Quadrant, and the Fintech Collective. They joined existing company backers Kaszek Ventures, e.Bricks, Endeavor Catalyst, and Curitiba Angels.

“Our goal is to simplify the entrepreneur’s routine so they can focus on their own business and not on bureaucracy. We are only at the beginning, and in three years we want to grow 15 times more,” said Vitor Torres, chief executiver and founder of Contabilizei, in a statement. “We were pioneers in the debureaucratization of accounting in the country and we managed to do it with a quality that surpasses 98% of our customers’ satisfaction.”

A photo of an egg has toppled reality star Kylie Jenner as Instagram’s most-liked post

Instagram has found something it likes more than a Kardashian-Jenner family baby, and it’s an egg.

This weekend, a photo of a plain egg became the most-liked photo on Instagram, the social app owned by Facebook with over one billion users that’s reflective of internet culture.

The photo, which you can see below in its full glory, currently has more than 23 million likes at the time of writing. That has seen it surpass a February 18 photo from Kylie Jenner — the sister of Kim Kardashian and a reality TV star in her own right — which announced the birth of her baby with rapper Travis Scott and has 18.2 million likes.

Unlike Jenner, who has 21 million Instagram followers, the egg account — “world_record_egg” — is a newcomer that seems to have been created in early January. Nothing is known of its ownership, although it now has 2.4 million followers which could — and I can’t believe I’m writing this… — make it an influencer account.

While much can be said about Jenner’s rise to fame, she’s a pretty successful entrepreneur. Her two-year-old ‘Kylie Cosmetics’ brand is estimated to gross over $600 million in annual revenue. While it is funny that a photo of an egg can take the record on Instagram there might be more to it. Jenner’s company trades on her brand, the egg could be a rejection or protest of today’s reality TV culture… which is best embodied by the Kardashians and, in particular, Kylie Jenner. That certainly seems the case looking at the splurge in new and egg-related comments on Jenner’s birth post from last year.

Maybe that’s wishful thinking and this is just another internet phenomenon that can’t be explained. It could simply be a joke that blew up, but don’t discount the potential that this is a stunt from a company launching a new product or wanting to make a splash.

Showing that she might have a sense of humor, 21-year-old Jenner acknowledged the new record in a video of her smashing an egg.

View this post on Instagram

Take that little egg

A post shared by Kylie (@kyliejenner) on

This is the second social media record set this year after Twitter got a new most-retweeted tweet — however, the roles were very much different.

Yusaku Maezawa, a Japanese billionaire who is paying Elon Musk’s SpaceX for a trip to the moon, saw a tweet that offered nearly $1 million in prize money for retweets surpass a true internet phenomenon, U.S. teen Carter Wilkerson. Back in April 2017, Wilkerson took to Twitter to plead for free chicken nuggets; his original tweet now has around 3.6 million retweets.

Why Silicon Valley needs more visas

When I hear protesters shout, “Immigrants are welcome here!” at the San Francisco immigration office near my startup’s headquarters, I think about how simple a phrase that is for a topic that is so nuanced, especially for me as an immigrant entrepreneur.

Growing up in Brazil, I am less familiar with the nuances of the American debate on immigration legislation, but I know that immigrants here add a lot of jobs and stimulate the local economy. As an immigrant entrepreneur, I’ve tried to check all of those boxes, and really prove my value to this country.

My tech startup Brex has achieved a lot in a short period of time, a feat which is underscored by receiving a $1 billion dollar valuation in just one year. But we didn’t achieve that high level of growth in spite of being founded by immigrants, but because of it. The key to our growth and to working towards building a global brand is our international talent pool, without it, we could never have gotten to where we are today.

So beyond Brex, what do the most successful Silicon Valley startups have in common? They’re also run by immigrants. In fact, not only are 57% of the Bay Area’s STEM tech workers immigrants, they also make up 25% of business founders in the US. You can trace the immigrant entrepreneurial streak in Silicon Valley from the founders of SUN Microsystems and Google to the Valley’s most notorious Twitter User, Tesla’s Elon Musk.

Immigrants not only built the first microchips in Silicon Valley, but they built these companies into the tech titans that they are known as today. After all, more than 50% of billion dollar startups are founded by immigrants, and many of those startups were founded by immigrants on H-1B visas.

Photo courtesy of Flickr/jvoves

While it might sound counterintuitive, immigrants create more jobs and make our economy stronger. Research from the National Foundation of American Policy (NFAP) has shown that immigrant-founded billion-dollar companies doubled their number of employees over the past two years. According to the research, “WeWork went from 1,200 to 6,000 employees between 2016 and 2018, Houzz increased from 800 to 1,800 employees the last two years, while Cloudflare went from 225 to 715 employees.”

We’ve seen the same growth at Brex. In just one year we hired 70 employees and invested over $6 million dollars in creating local jobs. Our startup is not alone, as Inc. recently reported, “50 immigrant-founded unicorn startups have a combined value of $248 billion, according to the report [by NFAP], and have created an average of 1,200 jobs each.”

One of the fundamental drivers of our success is our international workforce. Many of our key-hires are from all over Latin America, spanning from Uruguay to Mexico. In fact, 42% of our workforce is made up of immigrants and another 6% are made up of children of immigrants. Plenty of research shows that diverse teams are more productive and work together better, but that’s only part of the reason why you should bet on an international workforce. When you’re working with the best and brightest from every country, it inspires you to bring forth your most creative ideas, collaborate, and push yourself beyond your comfort zone. It motivates you to be your best.

With all of the positive contributions immigrants bring to this country, you’d think we’d have less restrictive immigration policies. However, that’s not the case. One of the biggest challenges that I face is hiring experienced, qualified engineers and designers to continue innovating in a fast-paced, competitive market.

This is a universal challenge in the tech industry. For the past 10 years, software engineers have been the #1 most difficult job to fill in the United States. Business owners are willing to pay 10-20 percent above the market rate for top talent and engineers. Yet, we’re still projected to have a shortage of two million engineering jobs in the US by 2022. How can you lead the charge of innovation if you don’t have the talent to do it?

What makes matters worse is that there are so few opportunities and types of visas for qualified immigrants. This is limiting job growth, knowledge-sharing, and technological breakthroughs in this country. And we risk losing top talent to other nations if we don’t loosen our restrictive visa laws.

H1-B visa applications fell this year, and at the same time, these visas have become harder to obtain and it has become more expensive to acquire international talent. This isn’t the time to abandon the international talent pool, but to invest in highly specialized workers that can give your startup a competitive advantage.

Already, there’s been a dramatic spike in engineering talent moving to Canada, with a 40% uptick in 2017. Toronto, Berlin, and Singapore are fastly becoming burgeoning tech hubs, and many fear (rightfully) that they will soon outpace the US in growth, talent, and developing the latest technologies.

This year, U.S. based tech companies generated $351 billion of revenue in 2018. The U.S. can’t afford to miss out on this huge revenue source. And, according to Harvard Business School Professor William R. Kerr and the author of The Gift of Global Talent: How Migration Shapes Business, Economy & Society, “Today’s knowledge economy dictates that your ability to attract, develop, and integrate smart minds governs how prosperous you will be.”

Immigrants have made Silicon Valley the powerhouse that it is today, and severely limiting highly-skilled immigration benefits no-one. Immigrants have helped the U.S. build one of the best tech hubs in the world— now is the time for startups to invest in international talent so that our technology, economy, and local communities can continue to thrive.

Moon-bound billionaire supplants nugget lover’s most retweeted tweet

A Japanese billionaire who’s paying Elon Musk to fly him around the Moon, assuming all goes to plan with SpaceX’s giant metal phallus, has bought himself a rather different ride in the meanwhile.

The BBC reports that Yusaku Maezawa has elbowed aside nugget-loving U.S. teen, Carter Wilkerson, to bag the title of most retweeted tweet by promising to give away 100 million yen (just under $1M) in cash if people RT the tweet.

His 5 million+ Twitter followers probably helped too.

At the time of writing Maezawa’s January 5 tweet has ~4.6M RTs (and counting), beating out Wilkerson’s April 2017 tweet pleading for free chicken nuggets which now has circa 3.6M RTs.

Sorry kid.

Of course it’s not a fair fight. Wilkerson had just 138 Twitter followers to provide native uplift when his brief plea for “Nuggs” went viral.

Prior to Wilkerson, the world record retweeted tweet was a celebrity group selfie.

So we can add something else to the list of things money can buy (fine art; a ticket to the moon; faux popularity).

In true entrepreneur spirit, Maezawa, founder of Japanese online clothing retailer Zozo, is using his puffed up profile (i.e. as the man who Musk might fly to the moon) to drum up business for his clothing business.

Clearly he’s hoping to get more than just a trip to outer space for the “lot of money” he’s paying Musk for the chance to play lunar tourist. So the key lesson is demand the moon and back folks.

Hence the world’s most retweeted tweet now promotes a Spring sale. Late stage capitalism eat yer heart out.

We can at least be thankful the tweet wasn’t crypto related. After all, given the Musk connection, that sort of spam would have been rather more typical.

A look back at the Israeli cyber security industry in

2018 saw a spate of major cyber attacks including the hacks of British Airways, Facebook and Marriott. Despite growing emphasis on and awareness of cyber threats, large organizations continue experiencing massive data breaches. And as the world becomes increasingly connected (cars and medical devices, among others), attack vectors are evolving and exposures multiply.

The Israeli cybersecurity industry has long been recognized as a hotbed for innovative solutions, and 2018 to be yet another strong year. Early stage companies raised more money than ever before to tackle emerging security threats like protecting the proliferating number of internet-connected devices and enabling blockchain technologies to thrive in more secure environments.

Growing seed rounds chasing greenfield opportunities

In 2018, the total amount of funding for Israeli cybersecurity companies across all stages grew 22 percent year-over-year to $1.03B. This closely matched the funding trends of 2016 and 2017 that each saw 23 percent year-over-year growth in funding amount. At the same time, 2018 saw 66 new companies founded, an increase of 10 percent over 2017, which represented a rebound after a dip last year (60 new companies in 2017 vs. 83 in 2016). Notably, average seed round increased to $3.6M in 2018 from $3.3M in 2017. 2018 marked the fifth consecutive year the size of Israeli cyber seed rounds grew. Since 2014, the average seed round size has increased 80 percent.

With industry growth metrics of Israeli cybersecurity up across the board in 2018, 2017’s dip in new cyber startups appears to have been an outlier. Not only does entrepreneurial interest in cyber look to be on the rise, investor enthusiasm, especially at the early stages, signals a market brimming with opportunity. Growing round sizes are interesting, but more revealing is following where this capital is flowing.

Emerging fields supplanting “traditional” technologies

The top emerging fields among new startups in 2018 included new verticals within IoT security, security for blockchain and cryptocurrencies, cloud-native security and SDP (Software Defined Perimeter). These nascent verticals drew considerably more attention than more “traditional” cyber sectors such as network security, email security and endpoint protection. Of all the emerging sectors, IoT drew the most investment with funding reaching $229.5M across all stages. What makes IoT particularly interesting is its continual branching into various new sub-domains including automotive, drones and medical devices.

Shai Morag, CEO and co-founder of Secdo, an Israeli cybersecurity firm acquired for $100M by Palo Alto Networks in mid-2018, sees these trends accelerating. “Innovation is going to keep happening in these areas for the next few years. We’ll also see innovation in third-party supply-chain risk assessment and management. Another wide-open field for innovation is SMBs. They are an underserved market hungry for full-stack solutions. These emerging fields are where I’m seeing the most excitement.”

Breaking out data on seed round funding into cyber startups targeting emerging vs. traditional markets reveals an even more pronounced growth trend. 2018’s aggressive early stage funding rounds disproportionately focused on companies pursuing emerging fields within cybersecurity. Of the 33 seed rounds raised in 2018, 20 (61 percent) went to companies in emerging fields. Even more striking, the sum of all seed rounds for emerging tech companies in 2018 was $79M, a 76 percent year-over-year increase. The numbers are clear, there is overwhelming investor interest in emerging cyber tech.

For example, the two largest seed funding rounds this year were in the IoT security domain. VDOO, founded by ex-Cyvera entrepreneurs (acquired by Palo Alto Networks in 2014 for $200M) and which develops security solutions for IoT vendors, raised an abnormally high seed round of $13M. Toka Cyber has secured $12.5M seed funding from Andreessen Horowitz and others, to develop and expand their IoT cybersecurity platform for governmental agencies. Twistlock, a pioneer developer of cloud-native security solutions raised $33M series C this year. BigID which protects sensitive data in light of GDPR and other privacy regulations raised both A ($14M) and B ($30M) rounds during 2018.

As the more traditional cybersecurity markets continue to consolidate and mature, prospects dim for “me too” cyber startups. We see that the industry still faces pressing problems in need of innovative solutions. Looming labor shortages, GDPR and other global data privacy legislation and the IoT explosion, are major challenges presenting substantial opportunities to incumbents able to provide relief. Investors and entrepreneurs sense greenfield opportunities on the horizon and are racing to plant their flags before the competition. This new divergent ecosystem is more selective of sophisticated, savvy investors and specialized, seasoned entrepreneurs.

Greenfields, not green founders

In 2018, 60 percent of founders had more than a decade’s worth of experience in the private sector–a 28 percent increase from 2017. The experience of these more seasoned founders came mostly from working in startups either as an executive or as an entrepreneur. Although Israel’s cybersecurity ecosystem relies heavily on the technical training potential entrepreneurs receive during service in the Israeli Defense Forces (IDF), in 2018, the proportion of founders coming straight out of the IDF fell to 2 percent, dropping from 10 percent the year before.

While nearly all Israeli founders leverage the skills and know-how acquired in the IDF’s various technological units, the need for experience from the private sector, either as an executive or an employee, seems to be more prevalent. Larger seed checks and larger ambitions are fuelling this push for more mature, veteran founders. Rising founders are not simply looking to build a novel technology and score a lucrative acquihire exit from an existing giant–they want to push into greenfield territory and stake a market-leading claim all their own.

Amichai Shulman, co-founder & former CTO of Imperva and a Venture Advisor at YL Ventures, gives such founders aiming to “own a market” the following advice: “Make sure you’re able to explain – primarily to yourselves – how your offering and product becomes something bigger than what it inherently is in the beginning. Be able to articulate how you expand (in the future) further into organizations, not just by ‘selling more’ but by solving bigger and more general problems.”

Cyber exits continue to overperform

Beyond general trends, 2018 also had many exciting individual exits. Checkpoint-Dome9 and CyberArk-Vaultive were notable because both acquirer and acquiree were Israeli — a mark of true market maturity. The acquisition of Sygnia by Singaporean holding giant Temasek also was remarkable because it shows that the Israeli cyber market continues to attract new classes and kinds of global strategic players each year. In addition, Thoma Bravo’s  $2.1B acquisition of Israeli cyber firm Imperva made waves throughout the industry.

Tsahy Shapsa, co-founder of Cloudlock, which was acquired by Cisco in 2016 for $293M, reflected on the potential he sees coming from growing global investment. “From an entrepreneurial perspective, there is a constant dilemma between short-/mid-term exits and building a legacy company. As funding floods into Israel from around the world, temptation to sell early only increases. But all these exits have an advantage. They grow the pool of experienced, ‘repeat’ entrepreneurs and set the stage for more legacy companies to originate locally.” Zohar Alon, CEO and co-founder of Dome9 Security, which was acquired by Checkpoint in 2018 for $175M added the following guidance: “Israeli entrepreneurs should establish and maintain a constant communication channel with the local corporate development leaders, same as most do with the VC community focusing on product and go-to-market synergies.”

Israeli cybersecurity maintaining momentum

In 2018, investors became more domain-focused and preferred emerging fields. With traditional cybersecurity consolidating, emerging greenfields signal much stronger potential. Furthermore, growth continued both in cybersecurity startups as well as their fundraising across all stages, indicating rising confidence in the Israeli cybersecurity market.

The 2018 Israeli cybersecurity market boasted an excellent exit climate, highlighted not only by Imperva’s large-scale acquisition but also by the diversity in the types of players in the space. As such, the local cybersecurity market signals its ability to create and nurture large-scale security vendors, thereby attracting variety of both international and local players which continue identifying and capitalizing opportunities in this domain. For 2018, as has been the case for many years past, the state of the cyber nation is strong–and 2019 appears to promise more of the same.

Apoll01 wants to remake education by decentralizing the diploma

Dan Genduso spent nearly a decade working in consulting before landing on the Disrupt Berlin stage to launch his first startup, Apoll01 — a small company with a big idea about how to solve America’s expanding education crisis. 

First at Accenture and then at Slalom Consulting in San Francisco, Genduso focused on building out customer engagement platforms that captured the workflows, institutional knowledge and digital assets surrounding the development of customer profiles.

“I was building those out and personalizing products and advertisements to people,” Genduso recalled. “I got kind of tired of doing that and started to notice that there were other applications for this technology to enable people instead of enabling companies.”

That realization started Genduso on the path that would culminate with the launch of Apoll01 and its first product, a digital identity management tool, built on Hyperledger, that the Apoll01 founder hopes will be the first step in the transformation of the American educational system.

There’s no doubt that education in the U.S. is at a tipping point. Whether or not anyone ascribes to the belief of Harvard University Professor Clayton Christensen, the progenitor of the popular theory of disruptive innovation, who predicts that “50 percent of the 4,000 colleges and universities in the U.S. will be bankrupt in 10 to 15 years,” there’s no arguing against the fact that a wave of attrition is coming for higher education in the country.

That statistic is sobering, but debatable. However, even the Department of Education and Moody’s Investor Services predict that the number of college and university closures will triple in the coming years. 

What’s worrying to Genduso is that this thinning of educational opportunity for students is occurring alongside what will be rising demand for new skill sets as automation transforms the workforce.

Longer term, Genduso sees Apoll01 as a new platform for managing labor in the age of automation. In a future where automation has erased traditional notions of work, Genduso sees people operating in a more flexible and attenuated gig economy where workers will be matched with short-term projects in the same way that Uber drivers are now matched with riders. He thinks that Apoll01 will be the ledger that has a full accounting of its users’ skillsets and is able to match them with the jobs that need to be filled.

“The same way I was automating operations of a company by making it so there’s no middle man, I realized I could match people to education and to work without the middleman as well,” Genduso says.

That’s the long-term vision, but the first step is getting an identity management system to store all of the different accreditations, certificates and skills that a person has amassed over their educational career in a single place. And that’s what Genduso is launching on the Disrupt stage.

“Right now, think about how there are online training platforms like Salesforce’s Trailhead,” said Genduso. “There are industry-specific schools like blockchain schools. You have specialized training schools and then you have Coursera and Udacity. There’s nothing that’s pulling those things together to put a school system together. No one is pulling that together to create an accreditation and acknowledge that what you’re learning counts.”

That vision was enough to earn Genduso a finalist slot in the U.S. Department of Education’s “Reimagining the Higher Education Ecosystem Challenge” and garner praise from the country’s controversial Secretary of Education, Betsy DeVos. Apoll01 was among a number of companies including Competency Catalyst, EdRec: Next Gen by Design, and FlexchainEdu, trying to create ways for skills learned outside of the traditional classroom to be acknowledged by employers and traditional universities.

Other companies, like Learning Machine, raised $3 million to pursue putting digital diplomas on the blockchain. In fact, traditional universities have already acknowledged the value of the tools and services that Genduso is hoping to develop. In September, Genduso was accepted into the University of Southern California’s Rossier EdVentures education technology incubator.

“The original use case of this product was to start within universities to better understand their students and personalize online education for their students. [Universities] wanted to better understand what their students had been learning outside of the university system from other online learning platforms,” Genduso says.

However, the entrepreneur soon realized that for Apoll01 to be successful, it would have to be independent from the university system.

“The only way there could be a profile that moves outside of the university and within the university was through an independent profile,” says Genduso. So he developed an identity management tool on top of the Hyperledger Fabric open source blockchain toolkit.

Some universities are already putting diplomas and certifications on the blockchain. Learning Machine is working with MIT to put their certifications and digital diplomas into a cryptographically secured ledger, while Southern New Hampshire University and Central New Mexico Community College, both issue blockchain diplomas.

“I’m trying to get away from this world where everyone is screwing everything up by creating these closed systems for the user,” says Genduso. “I’m trying to get people who run these online institutions to get those pilot programs to get that started. My customer is not a university, my customer is every single person… I’m trying to do what’s best for them.”

Apoll01 already has its first customer, through a pilot with the blockchain based education company Teachur, but the company’s vision resonates with a number of different potential customers.

One of those could be edX, the online portal for massive open online courses (MOOCs) that were the darling of the education set only a few years ago. Writing in Quartz, edX chief executive, Anant Agarwal laid out a compelling rationale for Apoll01’s technology.

Education isn’t static. In this future, traditional degrees themselves may become antiquated, and employers will increasingly look for what multifarious skills learners know versus what degree they possess. Modular credentials will be ideal for working professionals who want to update their skillset to suit the shifting job market, better preparing students and adults alike for an excitingly unpredictable future.

Initially, Genduso sees his company getting traction by charging universities a small fee for access to the profiles that his users are generating. Eventually, Apoll01’s chief executive thinks there’s an opportunity to raise money through the tokenization of the platform, where advertisers, continuing education companies, and other vendors in the education space would pay for access to the profiles created on Apoll01’s platform. The key, for Genduso, is to make the system as accessible as possible for the students.

“In the next 10 to 15 years 50 percent of colleges and universities are going to be bankrupt and we’re also heading to a time when 10 percent to 15 percent of people are going to be out of work. When you look at that trajectory how do you as a person in the labor force properly prepare for that?” Genduso asked. “You can start building a profile where you’re building up a transcript that actually counts for something and you can get it from all of these different sources.”

Travel activities startup KKday lands investment from Alibaba and Line

Taiwan’s KKday, a startup in the increasingly competitive travel activities space, has pulled in an undisclosed funding round that adds two strategic investors to its business: Chinese e-commerce firm Alibaba and Japanese chat app company Line.

KKday was founded in 2015 to help people who travel overseas to find and book activities, ranging from tours to tourist attraction, transportation, museums and more. The company said it offers over 20,000 “unique experiences” in over 500 cities across 80 countries. There is much potential to move into, it seems, with analyst firm Phocuswright predicting that the travel tour and activities market will grow by one-third to reach $183 billion by 2020.

Unlike Hong Kong-based regional rival Klook, which is valued at over $1 billion and has ventured into Europe and the U.S, KKday is focused on Asian markets only.

We last wrote about the startup in January when it raised a $10.5 million round led by Japanese travel operator H.I.S, and this new Series B funding round is led by Alibaba’s Taiwan-based entrepreneur fund and Line Ventures, the VC arm connected to Japan’s leading chat app.

KKday CEO Ming Chen told TechCrunch in an interview that the two will help KKday with its efforts in China and Japan. Alibaba initially made an investment in July, this new deal represents a follow-up and it’ll see more emphasis placed on KKday’s branded store on Alibaba’s Fliggy travel store in China. Interestingly, Alibaba’s fund has also invested in another Taiwan-based activities service, FunNow.

Similarly, KKday will double down on Japan, where Chen said the company has seen “huge growth” thanks in a large part to its relationship with H.I.S. — a 38-year-old firm which has offices in 150 cities and $5.5 billion in annual sales. Chen, who thinks KKday may be Japan’s largest travel activities booking platform already, said Line will introduce a dedicated ‘Travel’ account that ties into the KKday service to allow Line users to book activities and share details with friends without leaving the messaging app.

Chen and KKday CMO Yuki Huang explained that the company is always open to strategic investments where it believes it can find business value.

“We’re very focused on looking for strategic investors not just money,” Huang said.

Others in the round announced today include existing investors CDIB Capital from Hong Kong and Monk’s Hill Ventures in Southeast Asia. That, added to Alibaba in China/Taiwan and H.I.S and Line in Japan, gives KKday a balanced investor base to help its business in those regions, Huang added.

KKday’s main rival is Klook and a Taiwanese competitor is FunDay, but a plethora of companies have sprouted to offer similar services in other parts of the world. Those include Peek in the U.SCulture TripGetYourGuideHeadout and WithLocals. Still, KKday is sticking to its Asia focus for now, according to Chen and Huang.

Silicon Valley’s sovereign wealth problem

It’s time to bring the conversation about where Silicon Valley gets its money from out into the open. Following recent revelations into Saudi Arabia’s extensive reach and influence in the US technology sector, the willful ignorance that has defined the relationship between venture capital firms and the limited partnerships (LPs) that fund them for years now isn’t going to cut it anymore.

According to the latest reports from the Wall Street Journal, Saudi Arabia is now the single-largest source of funding for US-based tech companies. Since 2016, the Saudi royal family has invested at least $11 billion into US startups directly, and in August, the Saudi Arabian government committed $45 billion to Softbank’s $92 billion Vision Fund. To put that into context, the total amount of funding deployed across all VC deals so far in 2018 is $84.3 billion — a record for the industry, but a paltry sum relative to the wealth of the Saudi Kingdom.

Backlash is rising — and that’s a good thing. With tech companies now capturing the lion’s share of global wealth creation, we should absolutely want to know where that money is going. For one, it’s a matter of ethics. The US tech industry generates billions of dollars in returns annually for investors. When that money is being funneled into the coffers of a country with a total lack of respect for basic human rights, that’s a problem. It’s not good for Silicon Valley entrepreneurs and it’s not good for the country as a whole.

That’s not to say all sovereign wealth is at issue. Not in the least bit. But when it comes to funds that support nation states with questionable track records on human rights, there’s no debate.

This is a critical moment for Silicon Valley. It’s a wake up call to venture capitalists and entrepreneurs alike to start being more mindful about their sources of funding. There are plenty of better institutions and more impactful causes you can be helping to enrich – research initiatives at top public children’s hospitals, financial aid programs at historically black colleges and universities, public pension funds, and the list goes on – you just have to make the effort and be intentional about it. As an industry, we can and should be doing more to support these groups. If fact, it’s one of the very reasons why Jyoti Bansal and I founded Unusual Ventures and raised our entire fund from a diverse set of LPs.

If history is any guide, however, it will take more than the better nature of entrepreneurs and their investors to make a real impact.

Gender parity in the tech industry is a fitting example: While advocates have been calling for greater gender diversity in senior leadership positions at tech companies for decades, gender inequality continues to pervade the entire sector. In September, California took steps to remedy the issue by passing a law requiring public companies to have at least two female directors on the executive board. Since then, we’ve seen some improvements – although there is still far, far more that needs to happen.

Similarly, what’s likely needed to move the needle on transparency in venture funding is common sense regulation. For instance, we should consider a law that requires – at a minimum – transparency around how much funding VC firms raise from foreign sources.

This already exists for VC funding raised from public US institutions. When VCs raise capital from public universities, endowments, pension funds and others, they are required to report it under the Freedom of Information Act (FOIA). Ironically, this mandate has contributed to the rise of sovereign wealth funds in the tech sector. That is, the additional reporting requirements that come along with raising money from public institutions drives VCs to “easier” sources of funding, such as sovereign wealth and billionaire family offices. Translation: transparency isn’t just common sense – it’s effective too – so let’s level the playing field.

Just like with any society-level issue though, fixing Silicon Valley’s sovereign wealth problem won’t happen overnight. For one, drafting legislation and enacting it into law takes time. It’s also extremely difficult for VCs to make changes around their investment base in the short term. If change is going to take root, the big moments to watch will be the start of the next funding cycle (ie. when VCs are out raising their next fund) and future legislative sessions, especially in the California state legislature.

In the meantime, entrepreneurs need to start asking VCs about where their money comes from. Nothing is going to happen without the industry’s best entrepreneurs stepping up and putting the pressure on VCs. So long as they are willing to accept funding without asking where it comes from, there is little incentive for the VC industry to change.

But if the entrepreneur community in Silicon Valley takes a stand on transparency in VC and starts asking the right questions, there is nothing stopping this moment from becoming more than just another news cycle. It will become a movement the VC industry cannot ignore.

Lessons from building Brex into a billion-dollar startup

When I think about my experience as an immigrant and entrepreneur in Silicon Valley, I remember growing up in Brazil and how we saw tech founders and CEOs as kings. We imagined what it would be like to assume the throne.

But these weren’t just any kings. Silicon Valley was the kingdom of nerds and underdogs. We identified with these guys, they were just like us. We were fed the myth of a Silicon Valley meritocracy, and the illusion that all you needed was ambition, determination, and a good idea to meet the right person and get funded.

What we didn’t understand was that this myth was not completely rooted in reality. Not everyone has access to the American Dream, and those who do have a track record of success before they’re given their moment to prove, or in our case, pitch ourselves.

Part of this disconnect was cultural. In Brazil, when I began my first startup, Pagar.me, a payment processing company, my co-founder Pedro Franceschi and I were two 16 year-old kids who learned how to code before we were ten. While it was hard for people to take us seriously initially—I mean, would you quit your job to work for two 16 year- olds? Being so young also worked to our advantage; it revealed that we were passionate, driven, and invested in tech at an age that we didn’t need to be.

Once we got our start-up off the ground, our employees were as invested in us as we were invested in them and the company. That’s because in Brazil, most of us grew up with parents that stayed their whole lives at the same company. You grew with the company, and that’s the approach we took when it came to hiring for our first company: who did we see sharing our same vision and growing with us?

Coming to the United States was almost a completely opposite experience. The barrier of entry was much higher. You have to go to the right college, graduate from right incubator programs, develop relationships with the right VCs, and have at least one successful startup under your belt before anyone would even consider booking a meeting with you.

Pedro and I had to carefully position ourselves before we even got to the Valley. When we finally did get to the U.S., we had already launched a successful startup and we were accepted to Stanford. Soon after, we were accepted by Y-Combinator, and that’s where we built relationships with the key players that would open up the doors for future meetings.

With our current startup, Brex,  we found that there weren’t just cultural differences at play, but different approaches we needed to take in order for our business to be successful. For example, in Brazil, we bootstrapped our first startup, and as a result, we had to find our product-market fit immediately. When you are so cash-constrained, it also limits how much you can build your company, and you think in terms of short-term wins instead of sustained growth. Your growth strategy is confined and you’re constantly reacting to your immediate client demands.

In the U.S., VCs and angel-investors aren’t interested in the short-term. They’re interested in long-term growth and how you are going to deliver 10x profits over a ten year period. Our strategy could no longer be: plan as we go and grow with our customer. Instead, we needed to deliver a roadmap, and when that roadmap changed or evolved, communicate those changes and adopt a culture of transparency.   

Additionally, we learned how difficult it is to find and retain  talent in the U.S.; it can feel like a Sisyphean task. Millennials for example, spend less than two years on average at a job, and if you spend six years or more at the same company, recruiters will actually ask you: “why?” So how can you build a company for the long-term in an environment where employees are not personally invested in the growth of your company?

We also learned that many successful tech startups offer stock options to their early employees, but as the company evolves and changes over time, those same stock options are not offered to future employees. This creates the exact opposite of a meritocracy. Why would a new employee work harder, longer, and bring more to the table if you are not going to be compensated for it?

Instead of using this broken model, we have invested in paying our team higher wages upfront, and based on performance, we award our team members with stock options. We want to be a company that people are proud of working at longterm, and we want to create a culture that is merit-based.

While some of the myths that we first believed in about Silicon Valley are now laughable looking back, they were also really instructional as to how we wanted to build our company and what pitfalls we wanted to avoid.

Even though nearly half of tech startups are founded by immigrant entrepreneurs, we have a cultural learning curve in order to have the opportunity to be “the next unicorn.” And maybe that’s the point, we’re experiencing a moment in time during which myths and unicorns no longer serve us, and what we need instead is the background, experience, and vision to create a company that is worth the hype.

The Hack Fund will use crypto to give startups early liquidity

Now that “utility” tokens have become a popular and international way to fund major blockchain projects, a pair of investors are creating a new way to turn tokens into true equities. The investors, Jonathan Nelson and Laura Nelson, have created Hack Fund, an early stage investment vehicle that allows startups to launch what amounts to “blockchain stock certificates,” according to Jonathan.

“Our previous business model exchanged equity from startup companies for services, and wrapped that equity into funds that we then sold to investors. These fund investors have included family offices, institutions, and high net worth individuals,” said Jonathan. “However, Hack Fund represents a new business model. Because Hack Fund leverages the blockchain, investors all over the world at all levels can participate in startup investing by trading blockchain stock certificates. Also, its SEC compliant structure means that it is also available to a limited number of accredited investors in the US.”

The team originally created Hackers/Founders, a tech entrepreneur group in Silicon Valley, and they now support 300,000 members in 133 cities and 49 countries. Hack Fund is a vehicle to support some of the startups in the Hackers/Founders network.

“HACK Fund, through its Hackers/Founders heritage, has a large, unique global network,” said Jonathan. “This provides Hack Fund with unparalleled reach and deal flow across the global technology market. There are a few blockchain-based funds, but they are limited themselves to blockchain-only investments. Unlike typical venture funds, HACK Fund will provide quick liquidity for investors, leveraging blockchain technology to make typically illiquid private stocks tradeable.”

The idea behind Hack Fund is quite interesting. In most cases investing in a company leads to up to ten years of waiting for a liquidity event. However, with blockchain-based stock certificates investors can buy shares that can be bought and sold instantly while company performance drives the value up or down. In short, startups become liquid in an instant, which can be a good thing or a bad thing, depending on the founding team.

“HACK Fund is a publicly traded closed-end fund. The fund’s venture investments are valued on a quarterly basis by an independent third party, audited and posted to the blockchain for all token holders to review. There are no K-1 statements issued, there is no partnership/LLC, rather HACK Fund is an investment company akin to Berkshire Hathaway which invests in the same manner as early-stage venture capital,” said Jonathan.

The team is raising a little over $2 million in an ICO to build out the fund. They’ve already raised most of their $100 million total goal from individual investors but the ICO will let retail investors buy some of the tokens as they are made available on the BRD wallet.