India’s budget hotel network OYO moves into wedding banquet services

OYO Rooms, the India-based budget hotel network that’s backed by SoftBank’s Vision fund, has prioritized expansion into China this year but that’s not all it’s up to. Back home in India, it just moved into the event hosting space through the acquisition of a wedding banquet company.

Today, OYO said it has acquired Weddingz.in, a three-year-old company that claims to be India’s largest wedding planner with 4,000 venues across 15 cities. The company had raised over $1 million from investors, and it says that it handles 1,500 weddings per quarter.

The deal is undisclosed and it is OYO’s third acquisition to date, all of which have come this year. Previously it snapped up a boutique apartment operator and then IOT startup AblePlus, but this transaction marks its first move outside of its core hotels and homes segment. The company said it is making the move because wedding banquets are “a fragmented, low yield, broken customer service business” that OYO believes matches with its experience of digitizing hotels and real estate.

“At OYO, our experience ranges from end-to-end management of homes, villas, small asset to hotels with 100+ rooms while running successful businesses for our asset partners and all these facets will be of utmost importance while operating in the wedding industry that in the dire need of fundamental changes and improvements,” OYO CSO Maninder Gulati said in a statement.

OYO hinted in its announcement today that it has other real estate projects in mind to expand further beyond hotels. That core focus is its affordable hotel network that it says spans 5,500 exclusive hotels in over 160 cities across India, China, Malaysia and Nepal.

OYO announced its move into China this summer and in two months it claims to have reached 1,000 chains across 28 locations in the country with a focus on serving middle-income customers.

The company has been linked with an investment from internet giant Tencent to push on in China, but so far nothing has been confirmed. OYO does count NASDAQ-listed China Lodging, which was formerly known as Huazhu Hotels and is valued at $6.8 billion, as a strategic partner on the ground there though. China Lodging invested $10 million last year as a follow-on to OYO’s $250 million Series D, which was led by SoftBank’s Vision Fund.

Sequoia India and Accel back on-demand scooter startup in $12.2M deal

Two of India’s most prominent VCs are backing a motorbike on-demand service after Sequoia India and Accel led a $12.2 million investment in Metro Bikes. Sequoia India and Accel were joined in the round by Raghunandan G, who founded TaxiForSure which sold to Ola, among other investors.

Metro Bikes started out as a luxury bike rental service in 2014 — initially as “Wicked Rides” — and it launched scooters (motorbikes) and other two-wheel rentals in 2016. Now, the company is rebranding to Bounce and refocusing its business to on-demand scooter (that’s motorbike in U.S. parlance) rentals for first and last mile transportation. The idea is to appeal to commuters, who can pick up a bike at their nearest location and later leave it at an endzone. The cost is based on distance and time spent.

Bounce is currently present in Bangalore, where it has 2,000 scooters currently, and Hyderabad, where it has around 500. The plan is to increase those numbers but the company is waiting on a permit to operate electric scooters, once it gets that it will only deploy electric, CEO Vivekananda Hallekere told TechCrunch in an interview. Its current mix of vehicles also includes bicycles, electric bicycles and kick scooters available.

The startup is going to hone its focus on Bangalore and Hyderabad for now, with no new expansions for 6-10 months, he added. Looking further forward, Bounce is aiming to be nationwide by 2020, while Hallekere said he sees the potential for deployment in Southeast Asia in the future.

Bounce claims that it is currently seeing around four rides per vehicle per day on its on-demand platform, the company is targeting seven to twelve rides which it believes will bring it to a good level of revenue. Although Hallekere did stress that the core business is anchored in sustainability.

That’s down to the funding of the fleet, which the CEO said is financed by institutional investors who purchase the assets in exchange for a cut of revenue. That helps cover a significant portion of operating expenses, while in other cases Bounce works with OEMs who provide vehicles under similar terms.

Bounce’s founding team (left to right): Vivekananda H R, CEO; Varun Agni, CTO; Anil Giri Raju, COO

Bounce is entering a fairly congested market in India, with other startups include Wheelstreet — which TechCrunch wrote about earlier this year — ZipHop also competing with similar services. Hallekere, the Bounce CEO, said that the company’s history in the business and its technology can help it stand out.

Added to that, Bounce said it is working closely with authorities to help ease last mile congestion. For example, the company is one of a number to have a struck a deal with Bengaluru Metro Rail Corporation Ltd. (BMRCL) to put rental bikes at 36 metro stations. It also landed a deal with corporate to enable parking across the city. The company said it plans to pursue similar arrangements with metro operators in Hyderabad and other cities when it expands.

“The first mile and last mile are essential to having public transport work in India,” Hallekere said. “It’s very natural for Indians to go on scooters and we started with metro bikes keeping this in mind. We want to make an impact and enable people to ditch cars.”

Bounce is also looking to introduce a pooling service that would enable scooter owners to add their vehicles to the company’s fleet and make money when they are used.

AI training and social network content moderation services bring TaskUs a $250 million windfall

TaskUs, the business process outsourcing service that moderates content, annotates information and handles back office customer support for some of the world’s largest tech companies, has raised $250 million in an investment from funds managed by the New York-based private equity giant, Blackstone Group.

It’s been ten years since TaskUs was founded with a $20,000 investment from its two co-founders, and the new deal, which values the decade-old company at $500 million before the money even comes in, is proof of how much has changed for the service in the years since it was founded.

The Santa Monica-based company, which began as a browser-based virtual assistant company — “You send us a task and we get the task done,” recalled TaskUs chief executive Bryce Maddock — is now one of the main providers in the growing field of content moderation for social networks and content annotation for training the algorithms that power artificial intelligence services around the world.

“What I can tell you is we do content moderation for almost every major social network and it’s the fastest growing part of our business today,” Maddock said.

From a network of offices spanning the globe from Mexico to Taiwan and the Philippines to the U.S., the thirty two year-old co-founders Maddock and Jaspar Weir have created a business that’s largest growth stems from snuffing out the distribution of snuff films; child pornography; inappropriate political content and the trails of human trafficking from the user and advertiser generated content on some of the world’s largest social networks.

(For a glimpse into how horrific that process can be, take a look at this article from Wiredwhich looked at content moderation for the anonymous messaging service, Whisper.)

Maddock estimates that while the vast majority of the business was outsourcing business process services in the company’s early days (whether that was transcribing voice mails to texts for the messaging service PhoneTag, or providing customer service and support for companies like HotelTonight) now about 40% of the business comes from content moderation.

Image courtesy of Getty Images

Indeed, it was the growth in new technology services that attracted Blackstone to the business, according to Amit Dixit, Senior Managing Director at Blackstone.

“The growth in ride sharing, social media, online food delivery, e-commerce and autonomous driving is creating an enormous need for enabling business services,” said Dixit in a statement. “TaskUs has established a leadership position in this domain with its base of marquee customers, unique culture, and relentless focus on customer delivery.”

While the back office business processing services remain the majority of the company’s revenue, Maddock knows that the future belongs to an increasing automation of the company’s core services. That’s why part of the money is going to be invested in a new technology integration and consulting business that advises tech companies on which new automation tools to deploy, along with shoring up the company’s position as perhaps the best employer to work for in the world of content moderation and algorithm training services.

It’s been a long five year journey to get to the place it’s in now, with glowing reviews from employees on Glassdoor and social networks like Facebook, Maddock said. The company pays well above minimum wage in the market it operates in (Maddock estimates at least a 50% premium); and provides a generous package of benefits for what Maddock calls the “frontline” teammates. That includes perks like educational scholarships for one child of employees that have been with the company longer than one year; healthcare plans for the employee and three beneficiaries in the Philippines; and 120 days of maternity leave.

And, as content moderation is becoming more automated, the TaskUs employees are spending less time in the human cesspool that attempts to flood social networks every day.

“Increasingly the work that we’re doing is more nuanced. Does this advertisement have political intent. That type of work is far more engaging and could be seen to be a little bit less taxing,” Maddock said.

But he doesn’t deny that the bulk of the hard work his employees are tasked with is identifying and filtering the excremental trash that people would post online.

“I do think that the work is absolutely necessary. The alternative is that everybody has to look at this stuff. it has to be done in a way thats thoughtful and puts the interests of the people who are on the frontlines at the forefront of that effort,” says Maddock. “There have been multiple people who have been involved in sex trafficking, human trafficking and pedophilia that have been arrested directly because of the work that TaskUs is doing. And the consequence of someone not doing that is a far far worse world.”

Maddock also said that TaskUs now shields its employees from having to perform content moderation for an entire shift. “What we have tried to do universally is that there is a subject matter rotation so that you are not just sitting and doing that work all day.”

And the company’s executive knows how taxing the work can be because he said he does it himself. “I try to spend a day a quarter doing the work of our frontline teammates. I spend half my time in our offices,” Maddock said.

Now, with the new investment, TaskUs is looking to expand into additional markets in the UK, Europe, India, and Latin America, Maddock said.

“So far all we’ve been doing is hiring as fast as we possibly can,” said Maddock. “At some point in the future, there’s going to be a point when companies like ours will see the effects of automation,” he added, but that’s why the company is investing in the consulting business… so it can stay ahead of the trends in automation.

Even with the threat that automation could pose to the company’s business, TaskUs had no shortage of other suitors for the massive growth equity round, according to one person familiar with the company. Indeed, Goldman Sachs and Softbank were among the other bidders for a piece of TaskUs, the source said.

Currently, the company has over 11,000 employees (including 2,000 in the U.S.) and is looking to expand.

“We chose to partner with Blackstone because they have a track record of building category defining businesses. Our goal is to build TaskUs into the world’s number one provider of tech enabled business services.  This partnership will help us dramatically increase our investment in consulting, technology and innovation to support our customer’s efforts to streamline and refine their customer experience,” said Maddock in a statement.

The transaction is expected to close in the fourth quarter of 2018, subject to regulatory approvals and customary closing conditions.

India’s Hansel raises $4M to bring its app development platform to the US

Hansel, an India-based startup that enables more agile product development inside companies, has pulled in $4 million as it seeks to expand its business to the U.S..

The startup was founded in 2015 and it operates a real-time mobile app development platform that simplifies the process of product iteration inside companies. That’s to say that once a product is launched there’s a lot of work that is done to develop it, test new ideas and optimize but many companies overlook the process or lump it with the general engineering, which includes initial product development.

Hansel argues that product development and iteration are different, and its wider aim is to enable dedicated ‘product ops’ inside companies that until now never considered the process to be distinct from app development, or perhaps don’t have the budget.

“Product iteration is often neglected as people want to move to the next thing, but that means product building is only half done,” Varun Ramamurthy, CEO of Hansel, told TechCrunch in an interview. “We want to significantly accelerate product iteration and provide a platform for ‘product ops.'”

“Big firms like Facebook and Uber champion product ops teams inside their business but they have already built the infrastructure and have dedicated specialists. That allows them to move at breakneck on launched product and features, their competitive advantage is speed to market,” he added.

The Hansel ‘Lake’ platform is a single repository that decouples product development from the code itself, allowing teams to create a range of different experiences — iterations — that can be pushed out to different user segments. The company charges users based on end-user numbers, such as monthly active user bases,  but it also includes customized pricing for some premium features, too.

Ramamurthy is formerly of Zynga in the U.S. among other places, and he met his Hansel co-founders Mudit Krishna Mathur and Parminder Singh while the trio were at Flipkart, the Indian e-commerce giant.

“We got together at Flipkart and saw a huge difference in speed between Facebook, other top firms and the rest of the world,” Ramamurthy recalled. “When it comes to speed of personalization and iterations of product, the rest of the industry had a lot of catch up. We want to help separate iterations and personalization from general engineering… today it is all confused.”

Hansel founders Varun Ramamurthy, Parminder Singh and Mudit Krishna Mathur

The startup has focused on India to date where Ramamurthy said it has large mid-market companies and enterprises as clients, including Uber rival Ola, Paytm and Magicpin. That work has given the team of 23 people a good grounding on what to expect for clients, how to work with them and how to package its service, and now the next phase is to do more business in North America.

Hansel is using the new funding to open an office in the Bay Area, where it has recruited its first two hires to drive business development and sales. Ramamurthy himself plans to spend more time in the U.S. as part of the effort, which will also see a product marketing team hired Stateside. R&D and product development will remain anchored out of Hansel’s India office.

This new round takes Hansel to $5.4 million raised to date. Vertex led this Series A with participation from existing backers IDG Ventures India and Endiya Partners.

India’s Uber rival Ola is headed to Europe with ride-hailing launch in the UK

The UK is getting a new alternative to Uber after India-based ride-hailing company Ola announced plans to expand to the country, which will become its first market in Europe.

Ola was founded in 2010 and it covers over 110 cities in India where it offers licensed taxis, private hire cars and rickshaws through a network of over one million drivers. The company has raised around $3 billion from investors that include SoftBank, Chinese duo Tencent and Didi Chuxing and DST Global . It was last valued at $7 billion. Ola ventured overseas for the first time when it launched in Australia earlier this year — it is now in seven cities there — and its move into the UK signals a further expansion into Europe.

Ola’s UK service isn’t live right now, but the company said it will begin offering licensed taxi and private hire bookings initially in South Wales and Greater Manchester “soon.” Ola plans to expand that coverage nationwide before the end of this year. That will eventually mean taking on Uber and potentially Taxify another unicorn startup backed by Didi which is looking to relaunch in the UK — in London and other major cities.

So, why the UK?

Ola CEO and co-founder Bhavish Aggarwal called the country “a fantastic place to do business” and added that he “look[s] forward to providing a responsible, compelling, new service that can help the country meet its ever demanding mobility needs.”

It’s no secret that Uber has struggled in London, where its gung-ho attitude to business — ‘launch first, apologize later’ — has seen it run into issues with regulators. Uber (just about) won a provisional 15-month transport license earlier this year following an appeal against the city’s transportation regulator, Transport for London (TfL) earlier rejected its application.

The’ New Uber’ — under CEO Dara Khosrowshahi — is trying to right the wrongs of the past, but compliance with regulators takes time and requires wholesale changes to business, operations and company culture.

Ola isn’t commenting directly on its rivalry with Uber — we did ask, but got a predictable “no comment” — but the tone of its announcement today shows it is focused on being a more collaborative player than Uber.

Indeed, there’s been much groundwork. Aggarwal met with regulators in London last year and he said in a statement released today that he plans “continued engagement with policymakers and regulators” as the Ola service expands across the UK.

International expansion is very much part of Ola’s ambition to go public, which Aggarwal recently said could happen in the next three to four years. But Ola isn’t alone in looking overseas. Didi, the firm that defeated Uber in China and has backed Ola, Taxify and many others, has also been busy moving into new markets.

Last year, the firm raised $4 billion to double down on technology, AI and go overseas and it has come good on that promise by entering MexicoAustralia and Taiwan. It also landed Brazil through the acquisition of local player and Uber rival 99 and it is preparing to go live in Japan, where it will operate a taxi-booking service through a joint venture with SoftBank.

LemonBox brings US vitamins and health products to consumers in China

China is rising in many ways — the economy, consumer spending and technology — but still many of its population looks overseas, and particularly to the West, for cues on lifestyle and health. That’s a theme that’s being seized by LemonBox, a China-U.S. startup that lets Chinese consumers buy U.S. health products at affordable prices.

Indeed, the recent scare around Chinese vaccinations, which saw faulty inoculations given to babies and toddlers in a number of provinces, has only fueled demand for overseas health products which LemonBox founder Derek Weng discovered himself when his father was diagnosed as having high blood sugar levels. Weng, then working in the U.S. for Walmart, was able to look up and buy the right medicine pills for his father and bring them back to China himself. He realized, however, that others are not so fortunate.

After polling friends and family, he set up an experimental WeChat app in 2016 that dispensed health information such as articles and information. Within a year, it had racked up 30,000 subscribers and given him the confidence to jump into the business fully.

Today, LemonBox allows Chinese consumers to buy its own-branded daily vitamin packs from the U.S.. Further down the line, the goal is to expand into more specific verticals, including mother and baby, beauty and daily supplements, according to Weng, who believes that the timing is good.

“For the first time in China, people are taking a major interest in health and are working out, while society is becoming more developed,” he told TechCrunch in an interview. “We estimate that Chinese consumers are investing 30 percent of their income in health.”

The LemonBox daily pack of vitamins.

Since its full launch three weeks ago, LemonBox has pulled in 700 customers with 40 percent purchasing a three-month bundle package and the remainder a monthly order, Weng said. Typical basket size is around 300 RMB, or nearly $45.

To get the business off the ground, Weng needed expert support and his co-founder Hang Xu — who is also LemonBox’s “Chief Nutrition Scientist” — has spent 10 years in the field of nutrition science. Xu holds a Ph.D. from Texas A&M University, is a U.S.-registered dietitian and has published over 10 research papers. The startup’s third co-founder, Eddy Meng (CMO), is a graduate of Chinese app store startup Wandoujia which sold to Alibaba two years ago.

Right now, LemonBox has offices in the U.S. and China and it is squarely focused on e-commerce but Weng said the company is looking to introduce other kinds of health services. That could include consultations with dietary experts and specific offerings for patients leaving a hospital or in other long-term care situations, as well as potentially own-label products.

“We look at Stitch Fix for inspiration,” Weng said. “Right now, it leverages data to develop its own in-house private label products that improve on margin and the accuracy of recommendations. This kind of data and further services will be the next stage for us.”

LemonBox raised a seed round in March, which included participation from Y Combinator, and as part of Y Combinator’s current program, it’ll present to prospective investors at the program’s demo day. Already, though, Weng said there’s been interest from investors which the company is thinking over.

Interestingly, it was forth time lucky entering YC for Weng, who had before applied with previous startups unsuccessfully. This time it was entirely circumstantial. He applied to be in the audience for Y Combinator’s ‘Startup School’ event that took place in Beijing in May.

Unbeknownst to him, YC picked out a handful of attendees whose companies were of interest, and, after an interview that Weng didn’t realize was an audition, LemonBox was selected and fast-tracked into the organization’s latest program. In addition, YC joined the startup’s seed funding round which had initially closed in March.

That anecdotal evidence says much of YC’s effort to grab a larger slice of China’s startup ecosystem.

The organization has aggressively recruited companies from under-represented regions such as India, Southeast Asia and Africa, but China remains a tough spot. According to YC’s own data, fewer than 10 Chinese companies have passed through its corridors. That’s low considering that the organization counts over 1,400 graduates.

With events like the one in May, which helped snare LemonBox, and a new China-centric role for partner Eric Migicovsky, who founded Pebble, YC is trying harder than ever.

India may become next restricted market for U.S. cloud providers

Data sovereignty is on the rise across the world. Laws and regulations increasingly require that citizen data be stored in local data centers, and often restricts movement of that data outside of a country’s borders. The European Union’s GDPR policy is one example, although it’s relatively porous. China’s relatively new cloud computing law is much more strict, and forced Apple to turn over its Chinese-citizen iCloud data to local providers and Amazon to sell off data center assets in the country.

Now, it appears that India will join this policy movement. According to Aditya Kalra in Reuters, an influential cloud policy panel has recommended that India mandate data localization in the country, for investigative and national security reasons, in a draft report set to be released later this year. That panel is headed by well-known local entrepreneur Kris Gopalakrishnan, who founded Infosys, the IT giant.

That report would match other policy statements from the Indian political establishment in recent months. The government’s draft National Digital Communications Policy this year said that data sovereignty is a top mission for the country. The report called for the government by 2022 to “Establish a comprehensive data protection regime for digital communications that safeguards the privacy, autonomy and choice of individuals and facilitates India’s effective participation in the global digital economy.”

It’s that last line that is increasingly the objective of governments around the world. While privacy and security are certainly top priorities, governments now recognize that the economics of data are going to be crucial for future innovation and growth. Maintaining local control of data — through whatever means necessary — ensures that cloud providers and other services have to spend locally, even in a global digital economy.

India is both a crucial and an ironic manifestation of this pattern. It is crucial because of the size of its economy: public cloud revenues in the country are expected to hit $2.5 billion this year, according to Gartner’s estimates, an annual growth rate of 37.5%. It is ironic because much of the historical success of India’s IT industry has been its ability to offer offshoring and data IT services across borders.

Indian Prime Minister Narendra Modi has made development and rapid economic growth a top priority of his government. (Krisztian Bocsi/Bloomberg via Getty Images)

India is certainly no stranger to localization demands. In areas as diverse as education and ecommerce, the country maintains strict rules around local ownership and investment. While those rules have been opening up slowly since the 1990s, the explosion of interest in cloud computing has made the gap in regulations around cloud much more apparent.

If the draft report and its various recommendations become law in India, it would have significant effects on public cloud providers like Microsoft, Google, Amazon, and Alibaba, all of whom have cloud operations in the country. In order to comply with the regulations, they would almost certainly have to expend significant resources to build additional data centers locally, and also enforce data governance mechanisms to ensure that data didn’t flow from a domestic to a foreign data center accidentally or programmatically.

I’ve written before that these data sovereignty regulations ultimately benefit the largest service providers, since they’re the only ones with the scale to be able to competently handle the thicket of constantly changing regulations that govern this space.

In the India case though, the expense may well be warranted. Given the phenomenal growth of the Indian cloud IT sector, it’s highly likely that the major cloud providers are already planning a massive expansion to handle the increasing storage and computing loads required by local customers. Depending on how simple the regulations are written, there may well be limited cost to the rules.

One question will involve what level of foreign ownership will be allowed for public cloud providers. Given that several foreign companies already exist in the marketplace, it might be hard to completely eliminate them entirely in favor of local competitors. Yet, the large providers will have their work cut out for them to ensure the market stays open to all.

The real costs though would be borne by other companies, such as startups who rely on customer datasets to power artificial intelligence. Can Indian datasets be used to train an AI model that is used globally? Will the economics be required to stay local, or will the regulations be robust enough to handle global startup innovation? It would be a shame if the very law designed to encourage growth in the IT sector was the one that put a dampener on it.

India’s chief objective is to ensure that Indian data benefits Indian citizens. That’s a laudable goal on the surface, but deeply complicated when it comes time to write these sorts of regulations. Ultimately, consumers should have the right to park their data wherever they want — with a local provider or a foreign one. Data portability should be key to data sovereignty, since it is consumers who will drive innovation through their demand for best-in-class services.

Bus-sharing app Shuttl gets $11M Series B from investors including Amazon India

Shuttl, a service that lets Indian city dwellers find seats on multiple bus routes through one app, announced today that it has raised a $11 million Series B led by Amazon India, Amazon Alexa Fund and Dentsu Ventures. Returning investors Sequoia Capital, Times Internet and Lightspeed Ventures also participated.

The Gurgaon-based startup’s last round of funding was a $20 million Series A announced in December 2015, just eight months after it launched.

The Amazon Alexa Fund was created in 2016 to fund new voice technology. One of Shuttl’s most interesting features is “Chirp,” which verifies passengers by sending a sound from their mobile phones to the driver’s version of its app. The idea is that “chirping” is quicker than using tickets or passes and can therefore decrease delays on bus routes.

Shuttl, which is owned by Super Highway Labs, was created with the goal of reducing pollution and traffic in major cities like Delhi by encouraging people to take public transportation. In order to compete with Uber and Ola, its tech platform optimizes routes and capacity, while its app enables users to track the location of their bus, giving them similar convenience and reliability to on-demand ride services (as long as they remember to book their seat a day in advance).

Shuttl’s platform now includes 800 buses and it claims to have 60,000 monthly active users and provide 45,000 rides per day in five cities. Its new funding will be used to expand into two new cities.

Experian leads $28M investment in Southeast Asia fintech startup C88

Experian is making its first major bet on Southeast Asia and its population of over 650 million consumers after the financial credit giant backed Singapore-based C88 Financial Technologies, which operates financial marketplaces that help lenders reach new audiences.

C88 today announced a $28 million Series C investment round that’s led by Experian with participation from a host of other backers that include Europe-based trio ResponsAbility Investments (Switzerland), DEG in Germany, Belgium’s InterVest, plus FengHe Fund Management, Pelago Capital and Fuchsia Venture Capital, the VC arm of Thai lender Muang Thai Life Assurance.

Early investors Monk’s Hill Ventures, Telstra Ventures, Kickstart Ventures and Kejora Ventures also took part in the round, which takes C88 to just over $45 million in capital raised.

The startup was founded in 2013 and it operates services in Indonesia and the Philippines — CekAja.com and eCompareMo.com, respectively — which have collectively served over 50 million customers through a mixture of smaller loans paid back over 6-18 months and longer installment-based plans that run from 18-32 months.

Following this investment, it plans to also open a business in Thailand — the support of Muang Thai is sure to help there — as part of its mission of opening consumer financing products up to consumers in Southeast Asia.

Working with, not disrupting, banks

Unlike some parts of the world, fintech challengers in Southeast Asia are working with the existing financial institutions to help them reach segments of the population that are not addressed today. Data is a huge part of that. In most parts of the region — excluding Singapore and perhaps Malaysia — few consumers are credit profiled. That makes a bank or lender’s job of assessing their suitability for a loan extremely challenging. Throw in that they are often seeking small- to mid-sized loans, and the potential value of the customer is likely lower than the resources that would be spent evaluating them.

The system is broken but the good news is that the advent of smartphones is bringing usable data to the fore. Southeast Asia counts over 300 million internet users and that’s growing at a rapid rate.

In just the past month, Indonesia-based Kredivo — which operates digital credit — and SME-focused Aspire Capital have raised significant capital using a data-driven similar thesis.

Instead of disruption, those companies, and C88, are guiding the banking industry into the previously unaddressable long-tail of customers by actively pre-verifying them and ascertaining not just whether they are eligible for financial products, but what kind and at what rate. Indeed, very often it isn’t that a person is a so-called ‘bad actor,’ it’s more the case that there isn’t sufficient data to prove that they are eligible for credit.

“Many times [banks and lenders] just can’t lend the cash out efficiently,” CEO JP Ellis told TechCrunch in an interview. “But that can change with the advent of digital-enabled societies, data and mechanisms to price on an individual basis. It’s all about partnering with [financial institutions] because they have so much capital on their balance sheet.”

C88 claims to work with over 90 banks, financial institutions and lenders. It effectively acts as the data pipeline, sorting through would-be credit applicants to assess their level of eligibility and the types of products best suited to them. That involves a mix of data, some structured some unstructured, and work with established firms like Experian, but it remains a challenge given the aforementioned lack of credit scoring. Indeed, Ellis estimates reach is as low as 20-30 percent of the population in Indonesia, for example — which is a big deal since it is the world’s four-largest country with a population of over 260 million.

With around 10 percent of applicants successful for credit products using traditional methods, Ellis said he wants to broaden access to capital which he believes can help build up Southeast Asia’s already-growing economies.

“We think of ourselves not as a comparison of products, but as a comparison of eligibility,” he added.

Cekaja.com is C88’s portal in Indonesia

New methods of scoring

That hits on a chord that’s noticeable across Southeast Asia: unlike other regions where credit and financial products seem rigid and almost unfriendly to consumers, the industry in Southeast Asia is working to be more relatable to consumers. At least in terms of the rhetoric, which includes smaller loans, flexible payment schedules and newer kinds of credit scoring.

Ellis said some of the methodologies come from China — where internet titans Alibaba and Tencent offer financial services that are based on factors like mobile payments and utility bill history — but he said that the region’s fintech movement in Southeast Asia is very much marching to its own beat.

In Indonesia, for example, one product C88 offers is with DBS, the region’s largest bank, and some of the eligibility data is related to operator Telkomsel, which has over 190 million customers.

C88 is also offering its own-branded policies in some cases, such as dengue fever insurance in the Philippines. That’s in partnership with an insurer on the backend. Ellis said the company only offers new products when it sees an unmet need in the market, it doesn’t intend to compete with what’s already on offer from the industry, which remains its key partner.

Beyond unsecured loans and insurance, the company is also dipping its toes into asset management, although the C88 CEO concedes that this market is smaller — in terms of sheer numbers, at least.

Experian eyes Asia deals

The deal marks the first major investment in Southeast Asia for Experian, the Dublin-headquartered firm valued at around £17.5 billion, or $23 billion, and listed in London. It signals a new role helping to develop startups in Asia coming as it does just under a year after Experian backed Bankbazaar with its maiden investment in India.

“Five or six years ago, we started to think about how we solve some bigger problems rather than just being a stoic software company,” Ben Elliott, who is managing director of Experian’s Asia Pacific business, told TechCrunch in an interview. “We’re looking at organizations that we think are either disruptive in the market where we have a role to play, or those that are building into something we think we can grow with.”

Singapore-based Elliott pointed that nearly one-quarter of Southeast Asians have access to a bank account, so new methods of reach are essential. He said that the C88 deal isn’t necessarily a path to acquisition for Experian. While he didn’t rule out the possibility in the future, he said that “the initial focus is to be a valuable investor and a good partner in the business.”

Ellis, the C88 CEO, believes there’s an opportunity to work very closely with the new investor beyond new credit scoring systems they are jointly cooking up.

“Many of our financial institutions already use Experian products, so we have the opportunity to really combine forces,” he said.

WeWork China raises $500M to triple the number of cities it covers

WeWork’s China business is getting a fresh injection of capital after it raised $500 million.

The company entered China two years ago and today it covers Beijing, Shanghai and Chengdu with nearly 40 locations. It claims 20,000 members, and it is also active in Hong Kong, which technically falls under ‘Greater China.’

The new capital comes from Trustbridge Partners, Singapore’s Temasek, SoftBank, SoftBank’s Vision Fund and Hony Capital. WeWork said it’ll be used for expansion into six new cities: those are Shenzhen, Suzhou, Hangzhou, Chengdu, Nanjing, and Wuhan. This new raise is a Series B, WeWork China previously scored a $500 million Series A last year, which was also when the Chinese entity was founded.

The company has been pretty busy over that 12-month period, most notably it scooped up its largest rival, Naked Hub, in an acquisition deal that is worth a reported $400 million and massively grew its reach.

Naked Hub builds on WeWork’s presence in Greater China by adding 24 office locations and a further 10,000 members. That’s why WeWork China’s figures are so impressive for just two years of operations. Now, this new capital will put WeWork’s own DNA into that network through this planned expansion spree.

“This investment will help WeWork fuel our mission to support creators, small businesses, and large companies across China,” WeWork CEO and co-founder Adam Neumann said in a statement. “WeWork has built an incredible team in China that supports our members every day, serving as a bridge for local companies who want to reach the world as well as for global companies that want to enter the Chinese market.”

Outside of China, WeWork is also making inroads in India — where it launched in 2017 — Korea, Japan (where it operates a joint venture with SoftBank) and Southeast Asia, where it made an acquisition to kick-start its presence. Indeed, WeWork has a float of around $500 million for its operations in Southeast Asia and Korea, although the total pot for India is unknown at this point.

WeWork China’s big raise comes days after Hong Kong’s Campfire pulled in $18 million and Awfis in India raised $20 million.