Payments, lending and neobanks rule fintechs in emerging markets, report says

Tech investments in emerging markets have been in full swing over the past couple of years and their ecosystems have thrived as a result.

Some of these markets like Africa, Latin America, and India, have comprehensive reports by publications and firms on trends and investments in their individual regions. But there’s hardly a report to compare and contrast trends and investments between these regions and rightfully so. Such a task is Herculean.

Well, a report released today by data research organization Briter Bridges and global inclusive tech accelerator Catalyst Fund is punching above its weight to offer a holistic representation to the darling sector of these three markets: fintech.

The report “State of Fintech in Emerging Markets Report” has three objectives — to evaluate the investment, product, and inclusivity trends across emerging markets.

The team surveyed over 177 startups and 33 investors across Africa, Latin America, and India. Though this sample size used is minuscule, the key findings are quite impressive.

Let’s dive in.

Fintechs have raised $23B across the regions since 2017

There’s no stopping emerging markets’ favorite. The sector has continued to receive the largest share of investments year-on-year for the past five years.

More than 300 million unbanked African adults account for 17% of the world’s unbanked population. So it’s not difficult to see why in 2019, the continent witnessed five mega deals in Branch, Tala, World Remit, Interswitch, and OPay that amounted to a total of over $775 million. While this dropped last year to $362 million, companies like Flutterwave, TymeBank, Kuda have raised sizeable rounds during this period.

fintech funding five years emerging markets

Image Credits: Briter Bridges & Catalyst Fund

Latin America is home to a growing base of digital users, enabling regulation and reforms, and vibrant small businesses. And just like Africa, the percentage of unbanked people is high at 70%. Fintechs in the region have seized the opportunity and have been rewarded with mega-rounds that companies like NuBank, Neon, Konfio, and Clip have enjoyed. Collectively, fintech startups have raised $10 billion in the past five years.

In 2019 alone, Indian fintech startups raised a record of $4.8 billion, per the report. Then last year, the sector brought in $3 billion. Over the past five years, they have totaled $11.6 billion with notable big names like CRED, Razorpay, Groww, BharatPe, among others.

Africa’s average seed rounds stand at $1M, India and Latin America average $4M

Per the report, early-stage deals in Africa have been increasing over the past five years totaling over $1.6 billion. Their average size, especially for seed rounds, has grown from $750,000 in 2017 to $1 million in 2020.

For  Latin America, the average seed deal in the last five years was around $5.7 million while India did approximately $4.6 million. The report says the data for the latter was skewed because of CRED’s $30 million seed round.

Image Credits: Briter Bridges & Catalyst Fund

Latin America is IPO-hungry, India breeds unicorns while Africa is just getting started with M&A

Last year, Stripe’s acquisition of Paystack was the highlight of Africa’s M&As because of its size and the homegrown status of the Nigerian fintech startup. Other larger rounds that made the headlines include the $500 million acquisition of Wave by WorldRemit (which happens to be the largest from the continent) and the DPO Group buyout by Network International for $288 million.

Unlike the African fintech market that has noticed mega acquisition deals and many undisclosed seven-figure deals, the Latin American fintech market is a sucker for IPOs. Per the report, fintechs in the region have several $100 million rounds (Nubank, PagSeguro,  Creditas, BancoInter and Neon) and M&A activity is sparse. But a number of them have gone public recently including Arco Educacao, Stone Pagamentos, and Pagseguro

On the other hand, India has more than 25 billion-dollar companies and keeps adding yearly. Just last month, the country recorded more than eight. These unicorns range from established companies like Paytm and new ones like CRED.

Payments, credit, and neobanks lead fintech activity

The report shows that payments companies are the crème de la crème for fintech investment across the three regions. Within that subset, B2B payments reign supreme. The next two funded fintech categories are credit and digital banking.

In Africa, payments startups have seen more investments than credit and neobanks. Flutterwave, Chipper Cash, Wave, Paystack, DPO come to mind.

most funded fintech categories emerging market

Image Credits: Briter Bridges & Catalyst Fund

Latin America most funded fintechs are neobanks. And it is the only region with all three product categories closely funded at $2-3 billion each. Some of these companies include NuBank, Creditas, and dLocal.

India’s top-funded fintech startups are in payments. But it has notable representation in credit and neobanks, some of which have raised nine-figure rounds like Niyo, Lendingkart, and InCred.

Investors are enthused about the future of insurance, payments, and digital banks

From the handful of investors surveyed in the report on their view on future trends in fintech products 5 years from now, most of them chose insurance, payments, and digital banking models.

Investment platforms and embedded models are also areas of interest. They were less keen on agriculture and remittances while wealth tech platforms and neobanks were also ranked lower in priority. How is it that digital banking and neo-banking are at two ends of the spectrum of investor choice? I can’t say for sure.

investors appetite in the coming years emerging markets

Image Credits: Briter Bridges & Catalyst Fund

Parts of the report talk about underserved consumers in these regions and how fintech startups are serving them. It also discusses whether these fintech startups promote financial inclusion and what features and products would get them to that point.

In all of this, the glaring fact, which is no news, is that Africa is lagging years behind Latin America and India. Talking with Briter Bridges director Dario Giuliani, he pointed out that he’d lean on five years for the continent to get to where Latin America and India are at the moment. He added that what makes India a better market at this stage is because it isn’t a continent like the other markets and operations are uniform across board.

“It is easier to manage one country than 54 countries in Africa and 20 in Latin America,” he said to TechCrunch. “In Africa, we use the label ‘Africa,’ but we’re very much talking about 4-6 countries. Latin America is basically Brazil, Mexico, Argentina and Colombia who are seeing massive companies rise. India is one.”

One key detail the report mentions is that most fintechs across emerging markets are crossing over to different sectors like crop insurance, credit lines for distributors and vendors, KYC, e-commerce payment gateways, medical finance, and insurance. Guiliani says he expects this to continue.

Una Brands launches with $40M to roll up brands on multiple Asia-Pacific e-commerce platforms

Una Brands' co-founders (from left to right): Tobias Heusch, Kiran Tanna and Kushal Patel

Una Brands’ co-founders (from left to right): Tobias Heusch, Kiran Tanna and Kushal Patel

One of the biggest funding trends of the past year is companies that consolidate small e-commerce brands. Many of the most notable startups in the space, like Thrasio, Berlin Brands Group and Branded Group, focus on consolidating Amazon Marketplace sellers. But the e-commerce landscape is more fragmented in the Asia-Pacific region, where sellers use platforms like Tokopedia, Lazada, Shopee, Rakuten or Ebay depending on where they are. That is where Una Brands comes in. Co-founder Kiren Tanna, former chief executive officer of Rocket Internet Asia, said the startup is “platform agnostic,” searching across marketplaces (and platforms like Shopify, Magento or WooCommerce) for potential acquisitions.

Una announced today that it has raised a $40 million equity and debt round. Investors include 500 Startups, Kingsway Capital, 468 Capital, Presight Capital, Global Founders Capital and Maximilian Bitner, the former CEO of Lazada who currently holds the same role at secondhand fashion platform Vestiaire Collective.

Una did not disclose the ratio of equity and debt in the round. Like many other e-commerce aggregators, including Thrasio, Una raised debt financing to buy brands because it is non-dilutive. The round will also be used to hire aggressively in order to evaluate brands in its pipeline. Una currently has teams in Singapore, Malaysia and Australia and plans to expand in Southeast Asia before entering Taiwan, Japan and South Korea.

Tanna, who also founded Foodpanda and ZEN Rooms, launched Una along with Adrian Johnston, Kushal Patel, Tobias Heusch and Srinivasan Shridharan. He estimates that there are more than 10 million third-party sellers spread across different platforms in the Asia-Pacific.

“Every single seller in Asia is looking at multiple platforms and not just Amazon,” Tanna told TechCrunch. “We saw a big gap in the market where e-commerce is growing very quickly, but players in the West are not able to look at every platform, so that is why we decided to focus on APAC, launch the business there and acquire sellers who are selling on multiple platforms.”

Una looks for brands with annual revenue between $300,000 to $20 million and is open to many categories, as long as they have strong SKUs and low seasonality (for example, it avoids fast fashion). Its offering prices range from about $600,000 to $3 million.

Tanna said Una will maintain acquisitions as individual brands “because what’s working, we don’t change it.” How it adds value is by doing things that are difficult for small brands to execute, especially those run by just one or two people, like expanding into more distribution channels and countries.

“For example, in Indonesia there are at least five or six important platforms that you should be on, and many times the sellers aren’t doing that, so that’s something we do,” Tanna explained. “The second is cross-border in Southeast Asia, which sellers often can’t do themselves because of regulations around customs, import restrictions and duties. That’s something our team has experience in and want to bring to all brands.”

Amazon FBA roll-up players have the advantage of Amazon Marketplace analytics that allow them to quickly measure the performance of brands in their pipeline of potential acquisitions. Since it deals with different marketplaces and platforms, Una works with much more fragmented sources of data for revenue, costs, rankings and customer reviews. To scale up, the company is currently building technology to automate its valuation process and will also have local teams in each of its markets. Despite working with multiple e-commerce platforms, Tanna said Una is able to complete a deal within five weeks, with an offer usually happening within two or three days.

In countries where Amazon is the dominant e-commerce player, like the United States, many entrepreneurs launch FBA brands with the goal of flipping them for a profit within a few years, a trend that Thrasio and other Amazon roll-up startups are tapping into. But that concept is less common in Una’s markets, so it offers different team deals to appeal to potential sellers. Though Una acquires 100% of brands, it also does profit-sharing models with sellers, so they get a lump sum payment for the majority of their business first, then collect more money as Una scales up the brand. Tanna said Una usually continues working with sellers on a consulting basis for about three to six months after a sale.

“Something that Amazon players know very well is that they can find a product, sell it for four to five years, and then ideally make a multi-million deal exit and build another product or go on holiday,” said Tanna. “That’s something Asian sellers are not as familiar with, so we see this as an education phase to explain how the process works, and why it makes sense to sell to us.”

Applications for the TC Early Stage Pitch-Off July are open

Early stage startups – now is your time to shine at the TechCrunch Early Stage event on July 8 and 9. This is part two of the highly successful event from April where top experts train and teach founders how to build, launch and scale their companies. In April we hosted the inaugural TC Early Stage Pitch-Off with 10 top companies from around the globe. TC is on the hunt to feature a new batch of 10 companies this summer to pitch in front of TC Editors, global investors, press and hundreds of attendees. Step into the spotlight now. Apply here by June 7th.

The Pitch. Ten founders will pitch on stage for five minutes, followed by a five-minute Q&A with an esteemed panel of VC judges. The winner will receive a feature article on TechCrunch.com, one-year free subscription to ExtraCrunch and a free Founder Pass to TechCrunch Disrupt this fall.

The Training. Nervous to pitch on-stage in front of thousands? Fear not. After completing the application, selected founders will receive training sessions during a remote mini-bootcamp, communication training and personalized pitch-coaching by the Startup Battlefield team. Selected startups will also be announced on TechCrunch.com in advance of the show. 

Qualifications. TechCrunch is looking for early-stage, pre-Series-A companies with limited press. Last pitch-off had one of the most geographically diverse batches from a TC event. The Early Stage Pitch-Off is open to companies from around the world, consumer or enterprise and in any industry — biotech, space, mobility, impact, SaaS, hardware, sustainability and more. 

Founders don’t miss your chance to pitch your company on the world’s best tech stage. Apply today!

Beyond the fanfare and SEC warnings, SPACs are here to stay

The number of SPACs in the deep tech sector was skyrocketing, but a combination of increased SEC scrutiny and market forces over the past few weeks has slowed the pace of new SPAC transactions. The correction is an inevitable step on the path to mainstreaming SPACs as an alternative to IPOs, but it won’t cause them to go away. Instead, blank-check vehicles will evolve and will occupy a small and specialized — but important — part of the startup financing landscape.

The tsunami of SPAC financings sparked commentary from all corners of the capital markets community, from equity analysts and securities lawyers to VCs and fund managers — and even central bankers. That’s understandable, as more than $60 billion of SPAC deals have been announced since the beginning of 2020, plus $55 billion in PIPE capital, according to investment bank PJT Partners.

The views debated by finance experts often relate to the reasonableness of SPAC pricing and transaction structures, the alignment of incentives for stakeholders, and post-merger financial and stock price performance. But I’m not going to add another voice to the debate on the risk-reward calculus.

As the co-founder of a quantum computing software startup who worked in financial markets for two decades, I’d like to offer my perspective on two issues that I think my peers care more about: Can SPACs still solve the funding problem for capital-intensive, deep tech startups? And will they become a permanent financing option?

Keeping the lights on at deep tech startups

I believe that SPAC financings can solve a major problem for all capital-intensive technology startups: the need for faster — and potentially cheaper — access to large amounts of capital to fund product development over multiple years.

SPACs have created a limitless well of capital that deep tech startups are diving into. That’s because they are proving to be more attractive than other sources of financing, such as taking investment from later-stage VC funds or growth equity funds with finite fund sizes and specific investment themes.

The supply of growth capital from these vehicles has been astounding. In 2020, SPACs alone raised more than $83 billion via 248 IPOs, which is equal to a third of the total $300 billion raised by the entire global VC community. If the present rate of financings had continued, the annual amount of SPAC financings would have been on par with the total R&D expenditure of the U.S. government —  roughly $130 billion to $150 billion.

This new supply of capital can let startups keep the lights on, helping them address a practical need while they develop products that may take a decade to field. Before SPACs, any startup that wanted to remain independent had to lurch from one round of VC financing to the next. That, as well as the intense IPO process, is a major time sink for management teams and distracts them from focusing on product development.

Despite gains, gender diversity in VC funding struggled in 2020

People have been discussing the importance of expanding opportunities for women in venture capital and startup entrepreneurship for decades. And for some time it appeared that progress was being made in building a more diverse and equitable environment.

The prospect of more women writing checks was viewed as a positive for female founders, a cohort that has struggled to attract more than a fraction of the funds that their male peers manage. All-female teams have an especially tough time raising capital compared to all-male teams, underscoring the disparity.

Then COVID-19 arrived and scrambled the venture and startup scene, creating a risk-off environment during the end of Q1 and the start of Q2 2020. Following that, the venture world went into overdrive as software sales became a safe harbor in the business world during uncertain economic times. And when it became clear that the vaunted digital transformation of businesses large and small was accelerating, more capital appeared.

But data indicate that the torrent of new capital has not been distributed equally — indeed, some of the progress that female founders made in recent years may have eroded.


The Exchange explores startups, markets and money.

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During a time of plenty, many female founders are still going without. The Exchange reached out to a number of American and European investors and founders to get their perspective on how today’s venture market treats female founders.

Recurring among the responses was a general view that more women venture capitalists would help lessen the gender gap in investments, and that VCs became more conservative due to COVID-19 and its constituent economic disruption, reverting to offering capital to repeat founders and their existing networks, both groups that are less diverse than the pool of new founders.

Our collection of founders and investors also said that women have been especially double-tasked during the pandemic to take on more domestic responsibilities in part due to sexist societal expectations, adding that that sexism more generally remains a problem that either isn’t improving or is improving too slowly.

But before we get into the core issues that prevent improvements in gender equity in venture funding, let’s check in on the data from last year and contrast it to its antecedents.

What the data show

While there have already been reports on gender disparities in funding, Nokia-backed VC firm NGP Capital made a great contribution to research on the topic with its 2021 dossier.

Text Blaze raises $3.3M for its speed-writing automation service

Text Blaze, which was a part of the recent Winter 2021 Y Combinator accelerator batch, announced that it has closed a $3.3 million seed round. The company’s investment was led by Two Sigma Ventures’s Villi Iltchev and Susa Ventures’s Leo Polovets.

The company’s product hybridizes two trends that TechCrunch has been tracking in recent years, namely automation and the written word. On the automation front, we’ve seen Zapier grow into a behemoth, while no-code products and RPA have made the concept of letting software boost worker output increasingly mainstream. And on the writing-assistance side of things, from Grammarly to Copy.ai, it’s clear that people are willing to pay for tools to help them writer better and more quickly.

So what does Text Blaze do? Two main things. First, its Chrome extension allows users to save “snippets” of text that they can add to emails, and other notes in rapid-fire fashion. I might save “Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines” to “/intro in Text Blaze, saving myself lots of time whenever I kick off a new podcast script.

But saving snippets and quickly inserting them into various text boxes in a user’s browser are just part of what makes Text Blaze neat. The product can also save template snippets with various boxes left open for users to fill in. So, a user could have a user-feedback snippet saved, that reserved spots for them to add in names, and other unique information quickly, while reusing the bulk of the text itself.

Text Blaze also has integrations with external services to ensure that its service can save users time. For example, the service can pull in CRM data from Hubspot into a text snippet used in Gmail. The idea is to link different services and data sources automatically, helping users shave minutes from their days, and hours from their weeks.

So far Text Blaze has run lean, according to its co-founder Dan Barak, who told TechCrunch that its staff of four will grow to around 10 this year, thanks to its new capital. Like nearly every startup that we’ve spoken to in recent months, Barak said that Text Blaze is a remote-first startup with a wide hiring lens.

Text Blaze’s model is freemium, with a consumer paid offering that costs $2.99 monthly. The key limitation in its free product, Barak, is a hard cap of 20 snippets. Past that you’ll need to pay. TechCrunch was modestly confused at the low price point, and relatively robust free feature set that the startup is offering. The co-founder explained that the company’s long-term plan is to sell into enterprises, making the pro version of Text Blaze more of a tool to generate awareness in what its service can do more than its final monetization scheme.

Some 70% of the company’s users so far have signed up using their corporate email, which could provide a wide avenue into later enterprise sales. According to the Text Blaze website, business users will pay a little more than double what its prosumer users will.

The company’s strategy appears to be working. Not only is it attracting users — its Chrome extension notes more than 70,000 users — and early revenue, but it also managed to convert Iltchev and Polovets into believers in its product. “When I first saw Text Blaze, it reminded me of the early days of Zapier which helped professionals to automate repetitive tasks, except Text Blaze provides a more approachable and easier to adopt entry point though written communications,” the Two Sigma investor told TechCrunch.

Susa’s Polovets said that he “fell in love with the [startup’s] product,” adding that he “wanted to invest as soon as I tried the product.”

Text Blaze’s round closed a few weeks ago. Let’s see how quickly it can scale with the new funds under its belt.

 

One CMO’s honest take on the modern chief marketing role

There’s no shortage of commentary around the chief marketing officer title these days, and certainly no lack of opinions about the role’s responsibilities and meaning within a company. There’s a reason for that. CMO is the shortest tenured C-suite role — the average tenure of a CMO is the lowest of all C-suite titles at 3.5 years.

CMOs either produce the numbers or we find another job.

That’s because the chief marketing officer’s role is increasingly complex. Qualifications require broad, strategic thinking while also maintaining tactical acumen across several functions. There’s a big disparity in what companies expect from CMOs. Some want a strategist with an eye for go-to-market planning, while others want a focus on close alignment with sales in addition to brand awareness, content strategy and lead generation.

Still other companies want their CMO to emphasize product marketing and management. Ask 10 CMOs how they define their role and you’ll get 10 different answers.

So, I’m sharing my honest, straight from the mouth of a tenured CMO take on what the role actually means, plus the key attributes of today’s modern CMO.

We must be the Master Builder

Hat tip to “The Lego Movie” for this analogy. Today’s marketing executives must bring functions and teams together. From sales and marketing alignment to product and everything in between, chief marketers are the connective tissue between every function. Driving alignment between these functions is table stakes.

Same goes for people teams and culture — I’ve experienced an increase in CMOs serving as the linchpin of a company’s culture. My CEO lives by the famous phrase “culture eats strategy for breakfast” and driving culture alignment now sits squarely on marketing’s shoulders.

Consistently drives new opportunities

Ah, demand generation. Driving new opportunity creation will continue to be a top priority for CMOs, of course. I’m not sharing anything new here, but the stakes are higher. CMOs either produce the numbers or we find another job. Doesn’t get any more straightforward than that. But, simply generating leads to check a box doesn’t cut it in board rooms anymore.

How 4 New Jersey pools turned into a startup that just raised $10M

As the oldest of 12 children, Bunim Laskin spent much of his teen years looking for ways to help keep his siblings entertained. Noticing that a neighbor’s pool was often empty, Laskin reached out to ask if his family could use her pool. To make it worth her while, he suggested that they could help cover her expenses for maintaining the pool.

Soon after, five other families had made the same arrangement with her and the pool owner had six families covering 25% of her expenses. This meant that the neighbor was actually making money off her pool. The arrangement sparked a business idea in Laskin’s mind. At the age of 20, he founded Swimply, a marketplace for homeowners to rent out their underutilized pools to local swimmers, with Asher Weinberger.

The Cedarhurst, New York-based company launched a beta in 2018, starting with four pools in the New Jersey area. 

“We used Google Earth to find houses, and then knocked on 80 doors with a pool,” Laskin recalls. “We got to 100 pools organically. Word of mouth really helped us grow.” The site was pretty bare bones, he admits, with potential customers only able to view photos of the pools and connect with the pool owner by phone.

That year, Swimply did around 400 reservations and raised $1.2 million from friends and family.

In 2019, Swimply launched what he describes as a “proper” website and app with an automated platform. It grew “4 to 5 times” that year, again mostly organically. In an episode that aired in March 2020, the company appeared on Shark Tank but went home without a deal.

Then the COVID-19 pandemic hit. Swimply, Laskin said, pivoted right into the pandemic.

“We were the perfect solution for people when the world was falling on its head,” he said. The company restructured its offering to ensure that pool owners did not have to interact with guests. “It was the perfect, contact-free, self-serve experience to hang out and be with people you quarantined with.”

The CDC then came out to say that it was safe to swim because chlorine could help kill the virus, and that proved to be a big boon to its business.

“On one end, it was a way for people to have a normal day and on the other, it helped give owners a way to earn an income, at a time when many people were being affected financially,” Laskin told TechCrunch.

Business took off in 2020 with revenue growing 4,000% and now Swimply is announcing a $10 million Series A round. Norwest Venture Partners led the financing, which also included participation from Trust Ventures and a number of angel investors such as Poshmark founder and CEO Manish Chandra; Rob Chesnut, former general counsel and chief ethics officer at Airbnb; Ancestry.com CEO Deborah Liu and Michael Curtis. 

Swimply is now operating in a total of 125 U.S. markets, two markets in Canada and five markets in Australia. It plans to use its new capital in part to expand into new markets and toward product development.

Image Credits: Swimply

The way it works is pretty straightforward. Swimply simply connects homeowners that have underutilized backyard spaces and pools with those seeking a way to gather, cool off or exercise, for example. People or families can rent pools by the hour, ranging in price from $15 to $60 per hour (at an average of $45/hour) depending on the amenities. New markets that Swimply has recently expanded to include Portland, Oregon; Raleigh, NC and the California cities of Oakland, San Luis Obispo and Los Gatos. 

“The shifting mindset from younger generations about ownership is a huge contributor to increased growth of the Swimply marketplace,” said co-founder Weinberger, who serves as Swimply’s COO. “Swimming is the third most popular activity for adults and number one for children, and yet no other company has tackled the aquatic space to make swimming more affordable and accessible…until now.”

While the company declined to provide hard revenue figures, Laskin said Swimply was seeing “7 digits a month in revenue” and 15,000 to 20,000 reservations a month. Families represent the most popular reservation.

“People can book and pay through our platform, and only 20% of hosts ever meet their guests,” Laskin said. “We’re enabling a new kind of consumer behavior with what we’re doing.”

The company is planning to use its new capital to also rebuild much of its tech infrastructure and boost its customer support team to be more “readily available.”

It is also now offering a complimentary up to $1 million worth of insurance per booking for liability as well as $10,000.

Swimply has a little over 20 employees, up 10 times from 2 people in December of 2020. It plans to double that number over the next few months.

The company’s model has proven quite lucrative for some owners, according to Laskin.

“Last year, there were some owners who earned $10,000 a month. One owner in Denver earned $50,000 last year and he had signed up toward the end of the summer. He should make over $100,000 this year,” Lasken projects.

Its only criteria is that owners offer a clean pool. Eighty five percent of hosts offer restrooms as well. If they don’t, they are limited to one-hour reservations with a max of five guests. Swimply has also partnered with local pool companies, and if they pay one of its owners a visit and certify that pool, that owner gets a badge on the site “so guests get an additional level of security,” Laskin said.

Ed Yip of Norwest Venture Partners admits that when he first heard of the concept of Swimply, he “didn’t know what to make of it.”

But the more he heard about it, the more excited he got.

“This is the holy grail for a consumer investor. We’re not changing consumer behavior, but rather productize the experience and make it safer and easier on both sides,” Yip told TechCrunch.

What also gets the investor excited is the potential for Swimply beyond just swimming pools in the future.

“We’re seeing a ton of demand from hosts wanting to list hot tubs and tennis courts, for example,” Yip said. “So this can turn into a marketplace for shared outdoor resources and that’s a huge market opportunity that adds value on both sides.”

Indeed, the concept of monetizing underutilized space is a growing concept. Earlier this year, we reported on Neighbor, which operates a self-storage marketplace, raising $53 million in a Series B round of funding. Neighbor’s unique model aims to repurpose under-utilized or vacant space — whether it be a person’s basement or the empty floor of an office building — and turn it into storage.

 

 

“Knowledge-as-a-service” platform Lynk announces collaboration with UBS

Lynk announced today that its “knowledge-as-a-service” platform will be integrated into UBS’ investment process. The collaboration means the banking giant’s research analysts and institutional clients, including hedge funds, private equity firms and sovereign wealth funds, will have access to Lynk’s database of 840,000 experts around the world.

Founded in 2015, Lynk has raised a total of $30 million in funding, including a $24 million round announced in January that was led by Brewer Lane Ventures and MassMutual Ventures, with participation from the Alibaba Entrepreneurs Fund. The startup has offices in New York, Hong Kong, Singapore, Mumbai, Shanghai and Toronto, and serves about 200 enterprise clients, including Fortune 500 corporations, investment firms and government agencies.

UBS’s global research analysts now have access to Lynk’s database of experts, while UBS Global Markets will introduce the startup’s solutions to its institutional clients.

Lynk’s technology uses machine learning algorithms to match clients with experts in its database. Lynk’s experts cover a wide range of industries and sectors and include C-suite executives, independent consultants, lawyers, engineers, financial analysts and scientists. The platform also has collaboration tools, so teams can automatically transcribe question-and-answer sessions, search transcripts and share notes.

“Our platform capabilities, the scope and depth of our network and our customer service that’s paired with technology is really quite synergistic with how UBS is looking at their business,” Lynk co-founder and chief executive officer Peggy Choi told TechCrunch. “They have demonstrated a very strong innovation track record in the equity research space, so this is a great extension to their suite of offerings.”

During the pandemic, Lynk’s clients in the investment sector have used it to perform research and due diligence on potential investments remotely, which Choi expects to continue even after travel picks up again.

“Relying on on-the-ground experts, working with them to verify assumptions and develop convictions before making an investment is a must,” said Choi. “We’re really seeing a structural change and that is also what UBS is hearing from its customers.”

In press statement, UBS Global Head of Research Dan Dowd said, “We are proud of our innovation track record and are highly focused on helping investors get to the crux of key investment debates as rapidly as possible. Showcasing Lynk’s technology and expertise has the potential to substantially accelerate the investment processes of our clients.”

With backers like Tiger Global, LatAm crypto exchange Bitso raises $250M at a $2.2B valuation

Bitso, a regulated crypto exchange in Latin America, announced today it has raised $250 million in a Series C round of funding that values the company at $2.2 billion.

Tiger Global and Coatue co-led the round, which also included participation from Paradigm, BOND & Valor Capital Group and existing backers QED, Pantera Capital and Kaszek.

The news caught our attention for several reasons. For one, it comes just four months after the Brazilian startup raised $62 million in a Series B round. Secondly, the company believes the funding makes it the most valuable crypto platform in Latin America. And lastly, it also makes the company one of the most highly valued fintechs in the region.

Last year was a good one for Bitso, which says it processed more than $1.2 billion in international payments — including remittances and payments between companies — during 2020 alone. Bitso says it also has surpassed 2 million users. These two milestones, the company argues, is evidence of the growing use of crypto as an everyday financial tool in the region.

Demand for crypto assets and crypto-enabled financial products have soared in popularity both for individuals and businesses in the region, according to Bitso, which aims to be “the safest, most transparent, and only regulatory compliant platform” in Latin America. The company also says it’s the only player in the region to offer crypto-insurance for its client’s funds.

“The growth of the crypto ecosystem this year has been remarkable. It took Bitso six years to get its first million clients. Now — less than 10 months later — we have reached the 2 million mark,” said Bitso co-founder and CEO Daniel Vogel. But the metrics he is most proud of are that Bitso has also more than doubled the assets on its platform in the last five months and that its transacting volume during the 2021 first quarter exceeded the transaction volume it did in all of 2020.

Bitso was founded in January 2014 and acquired its first customer in April of that year.

Bitso’s mission, put simply, is to build next-generation borderless financial services for consumers and businesses alike. “Cryptocurrencies are the future of finance and Bitso makes the future available today,” the company says.

“Bitso offers products and services for individuals and businesses to use crypto in their everyday life,” Vogel said. “In some parts of the world, crypto is associated with speculation. Bitso’s customers rely on the technology for everyday uses from receiving remittances to engaging in international commerce.”

Image Credits: Bitso

Bitso says its “global-minded” product offerings fit the needs of local customers in Mexico, Argentina and now Brazil, where it just launched its retail operations. The company plans to use its new capital toward broadening its capabilities and product offering. It also plans to expand its operations in other Latin American countries in the coming months. In January, the Financial Superintendence of Colombia announced Bitso as one of the authorized companies in its Sandbox and crypto pilot program.

Bitso’s upcoming products include a crypto derivatives platform and interest bearing accounts for crypto.

“This is a pivotal moment for the future of finance in Latin America,” Vogel told TechCrunch. “We see a significant amount of traditional financial infrastructure in the region being replaced by crypto. We plan to use this funding to continue that trend by expanding our product offering for individuals and businesses.”

Naturally, Bitso’s investors are bullish on the company’s potential.

QED Investors co-founder and managing partner Nigel Morris admits that in the past he was “a crypto denier.”

“For the longest time, we didn’t see a way crypto fit. It wasn’t clear until recently that the use cases for crypto expanded much beyond speculative trading. There are now a whole series of conventional banking products that we can wrap around it,” Morris told TechCrunch.

Bitso’s mission, he said, is to “make crypto useful” and QED believes the company is succeeding at doing just that.

“Daniel and the entire Bitso team is passionate about taking the mystique out of crypto. Crypto is not going away; it’s going to be here for the future,” Morris said. “By sitting at the intersection of crypto and traditional financial institutions, Bitso has a promise to provide lower-cost, friction-free financial services to entire populations of individuals who otherwise would be excluded — a laudable and unique mission indeed.”

Bitso, he added, is learning from the crypto experience in the U.S. and around the world.

“Not making the same mistakes and leaning into the emerging regulatory landscape has been a competitive advantage to Bitso’s success in Mexico,” Morris said. “As Bitso grows throughout the regions, they certainly have a leg up and might even leapfrog crypto adoption in the U.S.”

“Crypto is rapidly gaining adoption in Latin America,” said Tiger Global Partner Scott Shleifer, in a written statement. “We are excited to partner with Bitso and believe they have the right team and platform to increase share in this growing market.”

Founded in 2014, Bitso has more than 300 employees across 25 different countries. That compares to 116 employees last year at this time. In particular, its growth in Brazil is increasing exponentially.

“We’ve gone from 1 to 26 Bitsonauts already based in Brazil, with many more working from abroad, and plan to 3X our number of hires in Brazil by the end of the year,” Vogel said, who acknowledged that the pandemic really impacted his company via the shift to remote work. “As we expand our reach into new territories, it has become a lot easier to meet staffing needs when the requirements are based on knowledge over geography.”

Bitso’s leadership is mostly based in Mexico, but the company also has offices in Buenos Aires, São Paolo and Gibraltar.