Amazon launches a $4.99-per-month ‘personal shopper’ service for men’s fashion

Amazon is introducing a personal shopping service for men’s fashion. The service, now available to Prime members, is an expansion of the existing Personal Shopper by Prime Wardrobe, a $4.99 per month Stitch Fix rival, originally aimed at women. With Personal Shopper by Prime Wardrobe, an Amazon stylist selects an assortment of fashion items that match a customer’s style and fit preferences. These are are then shipped to the customer on a monthly basis for home try-on. Whatever the customer doesn’t want to keep can be returned using the resealable package and the prepaid shipping label provided.

At launch, the new men’s personal shopping service will include brands like Scotch & Soda, Original Penguin, Adidas, Lacoste, Carhartt, Levi’s, Amazon Essentials, Goodthreads, and more — a mix of both Amazon’s own in-house brands and others. In total, Amazon says Personal Shopper by Prime Wardrobe will offer hundred of thousands of men’s styles across more than a thousand different brands.

The service itself is similar in many ways to Stitch Fix, as it also starts customers with a style quiz to personalize their monthly fashion selections. Also like competitive fashion subscription services, customers can reach out to their stylist with specific requests  — like if they need a professional outfit for job interview, for example, or some other occasion where they may want something outside their usual interests.

But unlike Stitch Fix, which charges a $20 “stylist fee” which is later credited towards any items you choose to keep, Amazon’s personal shopping service is a flat $4.99 per month. Another difference is that the Personal Shopper service will alert you ahead of your shipment to review their picks. You then choose the up to 8 items you want to receive, instead of waiting for the surprise of opening your box.

Image Credits: Amazon

Before today, Amazon had offered men’s fashion in its try-before-you-buy Prime Wardrobe product selection. But that service simply allows Amazon Prime members to request certain fashion items for home try-on, instead of paying for them upfront then returning what doesn’t work. To date, Prime Wardrobe’s biggest drawback has been that many of the fashion items found on Amazon aren’t eligible for home try-on, particularly many of those from the most in-demand brands.

However, Amazon claims it doesn’t stuff Prime Wardrobe with only its own brands. The company says less than 1% of its total selection of brands within Prime Wardrobe are Amazon-owned. (Of course, that percentage may be higher in the boxes customers receive from their personal shopper, at times.)

Amazon also says millions of customers have used the home try-on option provided by Prime Wardrobe and   “hundreds of thousands” of customers have created fashion profiles within Personal Shopper by Prime Wardrobe since its 2019 launch.

However, only “tens of thousands” of customers today use the Personal Shopper service on a monthly basis.

That means Prime Wardrobe is no real threat to Stitch Fix at this time, if making a comparison purely based on number of paying customers.

StitchFix has had longer to perfect its model and refine its insights which has allowed it to grow its active client base to 3.5 million. That figure is up 9% year-over-year, as of the company’s latest earnings reported earlier this month. More recently, Stitch Fix benefited from the pandemic — after it got through its initial backlogged orders — as customers sought to change their style from businesswear to activewear.

Men’s activewear had been particularly in demand, which is perhaps a trend Amazon had also seen ahead of the launch of its new service.

While home try-on via Prime Wardrobe is available today in the U.S., UK, Germany, Austria and Japan, the Personal Shopper by Prime Wardrobe subscription is currently available in the U.S. only. It’s also only available on mobile devices.

 

Amazon’s Prime Day mega sale event will take place October 13-14

Holiday shopping season is getting a big head start this year. Amazon today announced that it will hold Prime Day — its annual mega global sale event on a big range of items, including toys, TVs, electronics, fashion, beauty, kitchen, home, and Amazon Devices — on Tuesday, October 13 (midnight PT) and carrying on through Wednesday, October 14, just weeks ahead of Black Friday. Prime Day will take place in the U.S., U.K, U.A.E, Spain, Singapore, Netherlands, Mexico, Luxembourg, Japan, Italy, Germany, France, China, Canada, Belgium, Austria, Australia, and (for the first time) Turkey and Brazil.

Prime Day, as its name implies, is a sale aimed that people who are members of Amazon’s Prime loyalty program, which provides free shipping on a big range of items, access to Amazon’s various streamed media services, and other perks, for a monthly or annual fee. There are some 150 million+ people globally who now take out Prime memberships and Amazon offers free trials for people to sign up so that they can buy during the two-day event. 

(Pricing for Prime starts at $119 a year or $12.99 a month for individuals, with discounts for students, those on government assistance and others. Business Prime for businesses starts at $69 per year.)

The event, which is still called “Prime Day” even though it has grown over time to 48 hours, is usually held over the summer as a way of boosting buying activity in what can otherwise be more sluggish shopping months — 2019’s event was in July — but this year, it was postponed because of COVID-19.

That was likely due to multiple reasons. Given that the virus was peaking in the US this summer, having a big sales event might have been a bad look. But in addition to that, the economic impact of the virus has also taken a toll: for many budgets have tightened, and so if consumers are going to take the time to buy big-ticket items, Amazon is possibly banking on them doing that only once this year, during holiday shopping, rather than twice.

It will be interesting to see how Prime Day stacks up in that context. Last year, Amazon said that its Prime Day (which was extended for the first time to 48 hours in 2019) sold 175 million items, more than Black Friday and Cyber Monday combined.

Those are the key dates to note. Thanksgiving weekend — bookended by the US holiday and Cyber Monday and including Black Friday — have over the years become the unofficial “start” of the holiday shopping season. That period has become the key moment for retailers offline and online, when they bank on doing the most selling of the year and hitting (or hopefully passing) their numbers.

By placing its Prime Day event just a month ahead of that period, Amazon is essentially extending out the start time of that period, experimenting with the idea that they might actually get to “own” the whole start to the shopping season.

That may sound bold, but Amazon’s impact on wider shopping patterns and “shopping holidays” had already been proven. Last year, some 250 other online retailers, competitors to Amazon, set up promotional events to coincide with Prime Day, taking advantage of people being online and ready to buy things, and trying to make sure they are not cut out of the spending sprees.

Yet it’s not a sure thing, in the current climate. Even though Amazon, like a lot of other online retailers, have been raking in the sales as more people have turned away from physical stores to comply with social distancing rules, the longer term picture has been less sure. The job market is not strong, and people are watching their wallets.

So Amazon is taking all that on board and trying to pin bigger sweeteners into the mix on both sides of its marketplace. In addition to offering free trials of Prime (which it always does) it said it will give $10 credits to people to use on Prime Day if they spend $10 with selected small businesses between now and October 12.

“In the midst of an unprecedented year, we’re committed to making this the most successful Prime Day ever for our small businesses and excited for Prime members worldwide to discover new ways to support local entrepreneurs and save big on everything they need and love,” said Jeff Wilke, Amazon CEO Worldwide Consumer, in a statement. “This year’s Prime Day is the perfect opportunity for Prime members to get their holiday shopping done early from the comfort of their homes – and to have more time to spend with their families and friends throughout the season.”

Although Amazon sells a giant amount of merchandise directly, its network of third party sellers, many of which are small businesses who have come to rely on Amazon as the central piece of their e-commerce strategies, is a critical part of its wider catalogue, so getting them on board has been a major effort for the company. (Not least because it helps the company in its general antitrust profile, too.)

“In such an unsettled economy, we’ve actually been able to grow our sales with Amazon, allowing us to pay our employees more and pivot quickly when supply chain shortages struck,” said Colleen Sundlie, owner of Date Lady in Springfield, MO, in a statement. “Selling online has helped us stay connected with customers and continue growing our small business despite the challenging times.”

Playing with Holiday Shopping dates is really par for the course for Amazon, which also said that it’s getting a jump on its own Prime Day with sales starting today on Amazon Devices like the Echo Dot (get for $39.98) and Fire TV Recast ($129.99), and $100 off on Fire TV Edition Smart TVs, as well as deals on its streaming and media services, for example subscribing to four months of Amazon Music for $0.99.

It’s also pushing its payments services for the event. Prime members who sign up to Amazon Prime Rewards Visa Signature Cards get $100 gift cards among other perks.

Drive predictable B2B revenue growth with insights from big data and CDPs

As the world reopens and revenue teams are unleashed to meet growth targets, many B2B sellers and marketers are wondering how they can best prioritize prospect accounts. Everyone ultimately wants to achieve predictable revenue growth, but in uncertain times — and with shrinking budgets — it can feel like a pipe dream.

Slimmer budgets likely mean you’ll need more accurate targeting and higher win rates. The good news is your revenue team is likely already gathering tons of prospect data to help you improve account targeting, so it’s time to put that data to work with artificial intelligence. Using big data and four essential AI-based models, you can understand what your prospects want and successfully predict revenue opportunities.

Big data and CDPs are first steps to capturing account insights

Capturing and processing big data is essential in order to know everything about prospects and best position your solution. Accurately targeting your campaigns and buyer journeys necessitates more data than ever before.

Marketers today rely on customer data platforms (CDPs) to handle this slew of information from disparate sources. CDPs let us mash together and clean up data to get a single source of normalized data. We can then use AI to extract meaningful insights and trends to drive revenue planning.

That single source of truth also lets marketers dive into the ocean of accounts and segment them by similar attributes. You can break them down into industry, location, buying stage, intent, engagement — any combination of factors. When it’s time to introduce prospects to your cadence, you’ll have segment-specific insights to guide your campaigns.

AI realizes data-based insights

You might find that your data ocean is much deeper than you expected. While transforming all that data into a single source to drive actionable insights, you’ll also need the right resources and solutions to convert raw data into highly targeted prospect outreach.

This is where AI shines. AI and machine learning enable revenue teams to analyze data for historical and behavioral patterns, pluck out the most relevant intent data, and predict what will move prospects through the buyer journey.

Daily Crunch: Shopify confirms data breach

Shopify blames “rogue” employees for a data breach, Google Maps adds COVID-19 data and China pushes back against the TikTok deal. This is your Daily Crunch for September 23, 2020.

The big story: Shopify confirms data breach

The e-commerce platform blamed two “rogue members” of its support team, alleging that they stole customer data from “less than 200 merchants.” Shopify said it has fired the employees in question and referred the matter to the FBI.

In a blog post, the company said the affected data includes names, postal addresses and order details, but not “complete payment card numbers or other sensitive personal or financial information.” The company also said that there’s no evidence that the data has been utilized.

A merchant shared with TechCrunch a copy of their notification from Shopify, which said that the last four digits of customers’ payment cards had also been taken.

The tech giants

Amazon removes the $500 Prime Bike, says it has nothing to do with the Peloton knock-off — Echelon Fitness said it developed the Prime Bike “in collaboration with Amazon,” but Amazon is saying that isn’t the case.

Google Maps gets a COVID-19 layer — Google Maps users will be able to see a color-coded map indicating the number of cases per 100,000 people.

Top 20 iOS homescreen customization apps reach 5.7M installs after iOS 14 release — The three most-downloaded apps (Widgetsmith, Color Widgets and Photo Widget) account for 95% of these 5.7 million downloads.

Startups, funding and venture capital

China says it won’t approve TikTok sale, calls it ‘extortion’ — An editorial in the official English-language newspaper of the Chinese Communist Party said China has no reason to approve the “dirty” and “unfair” deal.

Zoom’s earliest investors are betting millions on a better Zoom for schools — ClassEDU is a new startup from former Blackboard CEO Michael Chasen aiming to answer the question: What if someone created a Zoom experience that was designed, not just marketed, for classrooms?

Endel raises $5M to create personalized ‘sound environments’ that improve productivity and sleep — I tried it out myself, listening to Endel’s mix of soothing music and white noise as I worked.

Advice and analysis from Extra Crunch

Fundraising lessons from David Rogier of MasterClass — Rogier says entrepreneurs should try to raise funds before launching.

Scaling to $100 million ARR: 3 founders share their insights — For this Disrupt panel, Alex Wilhelm spoke to Egnyte CEO Vineet Jain, Kaltura president Michal Tsur and GitLab CEO Sid Sijbrandij.

Dear Sophie: Possible to still get through I-751 and citizenship after divorce? — Another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Data breach at New York Sports Clubs owner exposed customer data — Town Sports International, the parent company of New York Sports Clubs and Christi’s Fitness gyms, is mopping up after a security lapse exposed customer data.

Curly the curling robot throws stones like a pro — Researchers designed Curly to be a robot that can observe the real world and act accordingly in a precise and strategic manner.

TC Sessions Mobility 2020 kicks off in two weeks — Speakers include Redwood Materials CEO JB Straubel and Celina Mikolajczak, vice president of battery technology for Panasonic Energy of North America.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Mirakl raises $300 million for its marketplace platform

French startup Mirakl has raised a $300 million funding round at a $1.5 billion valuation — the company is now a unicorn. Mirakl helps you launch and manage a marketplace on your e-commerce website. Many customers also rely on Mirakl-powered marketplaces for B2B transactions.

Permira Advisers is leading the round, with existing investors 83North, Bain Capital Ventures, Elaia Partners and Felix Capital also participating.

“We’ve closed this round in 43 days,” co-founder and U.S. CEO Adrien Nussenbaum told me. But the due diligence process has been intense. “[Permira Advisers] made 250 calls to clients, leads, partners and former employees.”

Many e-commerce companies rely on third-party sellers to increase their offering. Instead of having one seller selling to many customers, marketplaces let you sell products from many sellers to many customers. Mirakl has built a solution to manage the marketplace of your e-commerce platform.

300 companies have been working with Mirakl for their marketplace, such as Best Buy Canada, Carrefour, Darty and Office Depot. More recently, Mirakl has been increasingly working with B2B clients as well.

These industry-specific marketplaces can be used for procurement or bulk selling of parts. In this category, clients include Airbus Helicopters, Toyota Material Handling and Accor’s Astore. 60% of Mirakl’s marketplace are still consumer-facing marketplaces, but the company is adding as many B2B and B2C marketplaces these days.

“We’ve developed a lot of features that enable platform business models that go further than simple marketplaces,” co-founder and CEO Philippe Corrot told me. “For instance, we’ve invested in services — it lets our clients develop service platforms.”

In France, Conforama can upsell customers with different services when they buy some furniture for instance. Mirakl has also launched its own catalog manager so that you can merge listings, add information, etc.

The company is using artificial intelligence to do the heavy-lifting on this front. There are other AI-enabled features, such as fraud detection.

Given that Mirakl is a marketplace expert, it’s not surprising that the company has also created a sort of marketplace of marketplaces with Mirakl Connect.

“Mirakl Connect is a platform that is going to be the single entry point for everybody in the marketplace ecosystem, from sellers to operators and partners,” Corrot said.

For sellers, it’s quite obvious. You can create a company profile and promote products on multiple marketplaces at once. But the company is also starting to work with payment service providers, fulfillment companies, feed aggregators and other partners. The company wants to become a one-stop shop on marketplaces with those partners.

Overall, Mirakl-powered marketplaces have generated $1.2 billion in gross merchandise volume (GMV) during the first half of 2020. It represents a 111% year-over-year increase, despite the economic crisis.

With today’s funding round, the company plans to expand across all areas — same features, same business model, but with more resources. It plans to hire 500 engineers and scale its sales and customer success teams.

Amazon adds support for Kannada, Malayalam, Tamil and Telugu in local Indian languages push ahead of Diwali

More than seven years after Amazon began its e-commerce operations in India, and two years after its shopping service added support for Hindi, the most popular language in the country, the American giant is embracing more local languages to court hundreds of millions of new users.

Amazon announced on Tuesday its website and apps now support Kannada, Malayalam, Tamil, and Telugu in a move that it said would help it reach an additional 200-300 million users in the country.

Localization is one of the most crucial — and popular — steps for companies to expand their potential reach in India. Netflix added support for Hindi last month, and Amazon’s Alexa started conversing in the Indian language last year. (Amazon’s on-demand video streaming service, Prime Video, also supports Hindi, in addition to Tamil and Telugu.)

The company said the usage of Hindi, which it rolled out on its website and apps in India in 2018, has grown by three times in the past five months, and “hundreds of thousands” of Amazon customers have switched to Hindi shopping experience.

Amazon’s further language push comes months after its chief rival in India, Walmart -owned Flipkart, added support for Tamil, Telugu and Kannada, three languages that are spoken by roughly 200 million people in India.

Like Flipkart, Amazon worked with expert linguists to develop an accurate and comprehensible experience in each of the languages, the American e-commerce firm said.

But simple translation is not enough to make inroads with users in India. YouTube and YouTube Music, for instance, understand when Bollywood fans in India search for music by the name of the movie character or actor who played the part instead of the actual musician or song title — a phenomenon unique among Indian users.

Amazon appears to have incorporated similar learnings into its shopping experience. The company said for translations it preferred using commonly used terms from daily life over perfectly translated words.

Kishore Thota, Director of Customer Experience and Marketing at Amazon India, termed the availability of Amazon India shopping experience in four new languages a “major milestone.”

The move comes weeks ahead of Diwali, the biggest festival in India that sees hundreds of millions of Indians spend lavishly. “We are super excited to do this ahead of the upcoming festive season,” said Thota.

Language learning service Babbel says it has now sold over 10M subscriptions

Babbel, the popular Berlin-based online language learning service, today announced that it has now sold a total of 10 million subscriptions to its service. For a language learning service, that’s quite a substantial number, especially given that Babbel doesn’t really offer a free tier. In part, the company’s march to 10 million subscriptions was accelerated by the COVID-19 pandemic, but Babbel had already seen accelerating growth before, in no small part thanks to its aggressive expansion in the U.S. where Babbel’s subscriber volume and revenue have tripled year over year.

Image Credits: Babbel

The fact that growth accelerated during the pandemic actually came as a bit of a surprise to the team. Typically, at least in the U.S., demand for language learning is somewhat seasonal and users are often motivated to learn a new language because they are preparing a big trip to Europe, for example.

“We know that in the U.S., we typically find the number one motivation that our users give for why they would want to learn a language is travel, which of course, makes sense, because that is your chance to use the language,” Babbel US CEO Julie Hansen told me. “And in fact, last year, there was record travel from the U.S. to Europe. […] I was very, very concerned for the prospects of our business, not to mention the prospects of our national health.”

But with a bit of lag, after the lockdowns in the U.S. (and around the globe) started, Babbel saw an increase in interest in its service because people wanted to use this time for self-improvement. At the same time, Babbel — like so many other education-related services — launched free tiers for high school and college students, too. Hansen said the company saw at least a “couple of hundred thousand” downloads from those initiatives alone. With that, the company’s user base now also skews a little bit younger (though Hansen also credited the company’s advertising on social and especially TikTok for this).

“You can literally draw a graph per country with the date of school closures, the date of lockdown — and then maybe a day or two for the first couple of Netflix series to go by — and then language learning picked up quite quickly,” Babbel CEO Arne Schepker said.

One area that has been challenging is B2B sales, where Babbel (and its competitors) saw an immediate slowdown, but as Hansen noted, some companies also started leaning more into digital training for their employees, maybe in part because they replaced in-person classes with tools like Babbel. Yet, despite the overall slowdown, Babbel still doubled its B2B revenue year-over-year and recently signed on its fellow Berlin -based company Delivery Hero as one of its customers.

Image Credits: Babbel

Ahead of the pandemic, Babbel also started investing in its language travel business after it acquired LingoVentura in 2018. And while the team believes that this business will pick up again over time, Schebker acknowledged that nobody is traveling right now, so this business is currently in a holding pattern.

Looking ahead, the company will soon launch what Hensen called “other learning methods,” but the team isn’t quite ready to talk about these yet beyond the fact that Babbel plans to embrace “a multitude of learning experiences” to meet learners where they are.

TikTok’s Chinese rival Kuaishou becomes a popular online bazaar

In China, short video apps aren’t just for mindless time killing. These services are becoming online bazaars where users can examine products, see how they are grown and made, and ask sellers questions during live sessions.

Kuaishou, the main rival of TikTok’s Chinese version (Douyin), announced that it accumulated 500 million e-commerce orders in August, a strong sign for the app’s monetization effort — and probably a conducive condition for its upcoming public listing.

On the heels of the announcement, Reuters reported that Kuaishou, a Tencent-backed company behind TikTok clone Zynn, is looking to raise up to $5 billion from an initial public offering in Hong Kong as early as January. The company declined to comment, but a source with knowledge of the matter confirmed the details with TechCrunch.

There are intricacies in the claim of “500 million orders.” It doesn’t exclude canceled orders or refunds, and Kuaishou won’t reveal what its actual sales were. The company also said the number made it China’s fourth-largest e-commerce player following Alibaba, JD.com and Pinduoduo.

It’s hard to verify the claim as there are no comparable figures from these firms during the period, but let’s work with what’s available. Pinduoduo previously said it logged over 7 billion orders in the first six months of 2019. That means it averaged 1.16 billion orders per month, more than doubling Kuaishou’s volume.

Kuaishou’s figure, however, does indicate that many users have bought or at least considered buying through its video platform.

The app, known for its celebration of vernacular and even mundane user content, boasts 300 million daily active users at the latest, which suggests on average its users made at least one order during the month. Many of the products sold were produce grown by its large base of rural users. The app gained ground in small towns and far-flung regions early on exactly because its content algorithms didn’t intend to favor the “glamorous”.

Over time, it gathered pace among Chinese urbanites who found themselves enjoying others’ candid filming of country life and happily ordering their farm products. The focus on bringing rural produce to urban areas also squares nicely with China’s push to invigorate its rural economy, and it’s not rare to see Kuaishou using terms like “poverty-alleviation” in its social media campaign.

Douyin, which leans towards polished videos from “influencers”, also enables its content creators to monetize — through both sharing ad revenue and hawking products. With a DAU twice as big as Kuaishou’s at 600 million, the app vows to bring 80 billion yuan ($11.8 billion) of income to creators in the coming year, the chief executive of ByteDance China, Kelly Zhang, said recently at Douyin’s creator conference.

Finance and the digital divide: a conversation with Tunde Kehinde of Lidya

Small and medium businesses have been some of the hardest hit in the Covid-19 pandemic. And all that has been as true in emerging markets as it has been for SMBs in the developed world.

Tunde Kehinde has had a front-row seat witnessing and responding to that crisis. He’s the CEO and co-founder of Lidya, a startup out of Nigeria that has built a platform for SMBs to apply for and get loans and other financial services, aimed at markets on the African continent and increasingly also in emerging economies in Europe. We sat down with him as part of our new virtual Disrupt series, where we have been connecting with some of the biggest movers and shakers in the tech world beyond the US.

Kehinde has been called the “Jeff Bezos of Africa”, a funny title you might think sounds like tenuous or cheesy marketing until you know more about his history in business, the impact it’s had so far (he’s not that old) in the region, and until you hear him speak.

Kehinde — born in Nigeria and exposed to a lot of the US way of doing things through university years at Howard and then Harvard — was previously the co-founder of one of the biggest tech startups to have come out of the continent — Jumia — an Amazon-style marketplace that is slowly branching out into a wider web of services like payments, food delivery and more.

Initially incubated by Rocket Internet, Jumia raised hundreds of millions of dollars from VCs, scaled to multiple countries on the continent, and is now traded publicly on Nasdaq with a current market cap of $660 million — modest by Amazon standards maybe, but a real milestone for African tech.

That alone would probably merit some to wonder if he’s the “next Bezos”, but it’s been his follow-up act at Lidya that paints a broader picture. In short, there is a lot more potential for payment and online commerce services in emerging markets, and focusing on helping small businesses cross the digital chasm is not just a good business opportunity, but a developmental one, too. Capital, specifically the lack thereof, has always been a huge hindrance to growth, and these days it’s an even more critical axiom to address.

You can see the full Disrupt conversation below, where Kehinde covers a lot of ground, not just about his company but about how tech is evolving in the region.

The breakout success of a handful of startups — which include the likes of new digital payments unicorn Interswitch as well as Jumia — venturing into multiple jurisdictions, he noted, is seeing more VCs also increase their interest and investment activity. He thinks the next very important step is to have more exits, which will confer a different kind of credibility and liquidity to the market.

And there should be, he added: There are few places like the African continent that is a blank slate, where you can come in quickly and build a really dominant player, if you have the right capital and team, he said.

“It’s night and day between seven years ago and now,” he added, but also admitted that while financial services and the related world of e-commerce are obvious places to start — it was also the classic category to tackle first in the US and Europe many years earlier — he still sees more interest from VCs in the U.S., Europe and Latin America.

His advice for VCs?

“If I were a VC I would look at what have been the biggest successes from folks like me,” he said. “Seeing Jumia and others going public, as more of these things happen the more you can develop a great policy and that will make it easier. I launched, I got to scale, I got return on investment, the right infrastructure can be built.”

Tune in here to hear him also talk about China and how to handle investment from outside Africa; what other big deals in loans for SMBs, such as Kabbage getting acquired by Amex, mean for startups like Lidya, the impact of the global coronavirus pandemic on business; identifying opportunities beyond your immediate region; and more.

The Chainsmokers just closed their debut venture fund, Mantis, with $35 million

Alex Pall and Drew Taggart are best known as The Chainsmokers, an electronic DJ and production duo whose first three albums have given rise to numerous Billboard chart-topping songs, four Grammy nominations and one Grammy award, for the song “Don’t Let Me Down.”

Soon, they hope they’ll be known as savvy venture investors, too.

They already have some major-league believers, including investors Mark Cuban, Keith Rabois, Jim Coulter and Ron Conway, who are among the other individuals who provided the Chainsmokers’s new early-stage venture firm, Mantis, with $35 million in capital commitments for its debut fund.

It’s a surprisingly traditional vehicle in many ways. Mantis is being managed day-to-day by two general partners who respectively offer venture and operational experience: Milan Koch graduated in 2012 from UCLA and has been an investor ever since, including as a venture partner with the seed-stage fund Base Ventures; Jeffrey Evans founded the record label Buskin Records and the mobile communications platform TigerText (now TigerConnect), among other companies, and has long known the Chainsmokers’s business manager, Josh Klein.

With fundraising begun earlier this year, the firm has already made a handful of investments, too, including the fitness app Fiton (Pall says they “squeezed into the A round after its close”), and LoanSnap, a mortgage-lending startup that was founded by serial entrepreneur Karl Jacob.

Pall and Taggart take their health seriously, so the fitness app is easy to understand.

As for why the world’s highest-paid DJs would be interested in such a seemingly staid business as mortgage lending, Taggart says the firm’s mission is ultimately to find and fund a wide range of startups that could potentially benefit its young audience, and that he and Pall are happy to use their star power to help related founders when a particular technology catches their eye.

In the case of LoanSnap, he says that he and Pall were impressed by LoanSnap’s promise to process loans more efficiently than other lenders. By getting involved in the company, all sides also recognized a “massive press opportunity for LoanSnap at a time when COVID was hitting and there was going to be billions of dollars in refinancing going on that [the company] wanted to participate in,” he says.

Indeed, despite investing a relatively small amount — $250,000 — in what was ultimately a $10 million round for LoanSnap in May, Mantis was credited in numerous reports as being the deal lead.

Taggart and Pall say they also take inspiration from singer Jimmy Buffett, who has co-created numerous businesses to both benefit, and capitalize off, his own fan base. Though Buffett started with Margaritaville — a hospitality company with a casual dining American restaurant chain, a chain of stores selling Jimmy Buffett-themed merchandise and casinos with lodging facilities — he has more recently begun building retirement communities in Florida for aging Buffett acolytes, and Pall and Taggart say the strategy resonates.

“When we started eight years ago, our fans were primarily all in college,” says Taggart. “Now they are dealing with paying back their college loans, and they’re probably applying to buy their first house, so a company like LoanSnap feels like one of those startups whose services our fans have grown into needing.”

Pall and Taggart aren’t entirely brand new to investing. Pall says they’ve been making seed-stage bets as angel investors for several years, including in Ember, an eight-year-old, LA-based company that makes temperature-controlled mugs and travel mugs and has raised roughly $25 million altogether, shows Crunchbase.

“I’d like to say that we were like thinking in this incredible way about the business at the time, but we were just like, ‘This is a really great product and we love the founder,’ ” Pall says.

In fact, the two got into a number of “diverse deals,” he continues, but “all of it was inbound” until two years ago, when they “decided to kind of change our strategy and go seek out the opportunities that we thought were out there…  We thought that maybe if we institutionalize this process, [we’ll discover] a lot more opportunity out there for us to work with dynamic founders and interesting founders who are going to change the landscape of tomorrow.”

Soon after, Pall and Taggart were introduced to Koch and Evans, who had already joined forces and were looking for an investment partner who was a market influencer. The group spent the next year getting to know one another, and things began coming together from there.

Pall and Taggart — who say that all four members of the team have to want to do a deal for it to move forward — are certainly entrepreneurial themselves. Aside from performing roughly 100 shows last year before beginning work this year on a fourth album, the two also run a production studio. And they are stakeholders in a small-batch spirit brand called JaJa Tequila.

Last year, they also co-founded YellowHeart, a ticketing platform that aims to put more power in the hands of performers, rather than scalpers.

Mantis was originally targeting $50 million in capital commitments, as reported by Bloomberg. Asked if that target proved too ambitious, Koch says the original idea was to raise $30 million, and that though the fund’s limited partner agreement stated that it could raise up to $50 million, the team “just decided that for a first-time fund, in order for us to produce a great IRR, we’d just rather stick to the target.”

You can find our interview with Taggart and Pall at the 21-minute mark.

Pictured at the top of the page, left to right: Jeffrey Evans, Alex Pall, Drew Taggart, Milan Koch.