Startups
Auto Added by WPeMatico
Chinese live tutoring app Yuanfudao is now worth $15.5 billion
Yuanfudao, a homework tutoring app founded in 2012, has raised $2.2 billion from investors, surpassing Byju’s as the most valuable edtech company in the world. The Beijing-based company is now worth $15.5 billion dollars, almost double its valuation set in March.
The company views the new capital as two separate extension rounds of its March raise, a $1 billion Series G financing event. The G1 round was led by Tencent with participation from Hillhouse Capital, Boyu Capital and IDG Capital. The G2 financing was led by DST Global, with participation from CITICPE, GIC, Temasek, TBP, DCP, Ocean Link, Greenwoods and Danhe Capital.
The money will be used to develop curriculum and expand Yuanfudao’s online educational service amid a larger boom in remote learning. In 2018, the company told TechCrunch that a majority of its revenue came from selling live courses. Its goal then was to fund and bring more AI into its products, and improve its user experience.
In the two years since, Yuanfudao has doubled its total users to 400 million students across China. Today’s funding suggests that it will push more live, online coursework and broaden out its closed loop system of learning.
Currently, Yuanfudao offers a variety of products: live tutoring, an online Q&A arm and a math problem-checking arm.
Yuanfudao’s physical footprint, which includes 30,000 employees in teaching centers across China, could fuel its online services. In 2014, it set up an AI Research Institute and technology laboratory with elite schools, including Tsinghua University, Peking University, Chinese Academy of Sciences and Microsoft. The goal? To bring insights from that institute directly into the app. The company sees AI as an opportunity to see what student weaknesses look like, which it can then address in teacher curriculum and product design.
Asia more broadly has a stronger education market because of consumer spending and a cultural focus on outcomes in education. Thus, the shift to digital learning has poured fuel on an already booming education market. One report says that the education economy in China alone could be worth $81 billion in two years.
As my colleague Rita Liao pointed out, Yuanfudao is nowhere near alone in the race to win the tutoring market. Other well-funded companies include Zuoyebang, a Beijing-based startup that focuses on online learning and last raised $750 million in June; and Yiqizuoye, which has Singapore sovereign fund Temasek as an investor.
Powered by WPeMatico
Freelancer banking startup Lili raises $15M
It’s only been a few months since Lili announced its $10 million seed round, and it’s already raised more funding — namely, a $15 million Series A.
The startup, founded by CEO Lilac Bar David and CTO Liran Zelkha, is creating a bank account and associated products designed for freelancers, with features like early access to direct deposit payments and the ability to set aside a percentage of income for taxes.
The account (and associated Visa debit card) is free of overdraft fees or minimum balance requirements; Bar David said the company only makes money from card processing fees.
She also said that the platform has seen rapid growth this year, with transactions up 700% since the beginning of the pandemic and nearly 100,000 accounts opened since the launch in 2019.
Bar David suggested that the economic turmoil caused by COVID-19 has prompted (or forced) more skilled workers — such as programmers and digital marketers — to turn to freelancing. Meanwhile, she’s also seen “a big shift from part-time freelance to full-time freelance.”
Lili CEO Lilac Bar David
Bar David predicted that the recent growth of the freelance economy won’t simply disappear once the pandemic is over, because workers are discovering the benefits of freelancing.
“If you have a 9-to-5 job, you’re dependent on one employer,” she said. “If something happens you’re out of a job … If you’ve got a diversified customer base, you’re not dependent on just one source of income.”
In recent months, Lili has added new features like automatically generated quarterly income and expense reports, a digital debit card (which customers can use before the physical card arrives in the mail) and the ability to send and receive money via Google Pay (Lili already supported Cash App and Venmo) .
Bar David said the startup decided to raise more funding to expand its engineering team and further accelerate its growth. Apparently she was preparing for a traditional Series A fundraising process (albeit one that was conducted in the middle of a pandemic), but “our current investors were so tremendously impressed by the product-market fit and the growth” that they were willing to fund almost all of the new round.
So the Series A was led by previous investor Group 11, with participation from Foundation Capital, AltaIR Capital, Primary Venture Partners and Torch Capital — along with new backer Zeev Ventures.
“As the global workforce evolves at a rapid pace, we are excited to lead another round of funding to help Lili capitalize on unprecedented demand and offer an entirely new solution to help freelancers seamlessly save time and money,” said Group 11’s Dovi Frances in a statement.
Powered by WPeMatico
WoHo wants to make constructing buildings fast, flexible and green with reusable ‘components’
Buildings are the bedrock of civilization — places to live, places to work (well, normally, in a non-COVID-19 world) and places to play. Yet how we conceive buildings, architect them for their uses and ultimately construct them on a site has changed remarkably little over the past few decades. Housing and building costs continue to rise, and there remains a slow linear process from conception to construction for most projects. Why can’t the whole process be more flexible and faster?
Well, a trio of engineers and architects out of MIT and Georgia Tech are exploring that exact question.
MIT’s former treasurer Israel Ruiz along with architects Anton Garcia-Abril of MIT and Debora Mesa of Georgia Tech have joined together on a startup called WoHo (short for “World Home”) that’s trying to rethink how to construct a modern building by creating more flexible “components” that can be connected together to create a structure.
WoHo’s Israel Ruiz, Debora Mesa and Anton Garcia-Abril. Photo by Tony Luong via WoHo.
By creating components that are usable in a wide variety of types of buildings and making them easy to construct in a factory, the goal of WoHo is to lower construction costs, maximize flexibility for architects and deliver compelling spaces for end users, all while making projects greener in a climate unfriendly world.
The team’s ideas caught the attention of Katie Rae, CEO and managing partner of The Engine, a special fund that spun out of MIT that is notable for its lengthy time horizons for VC investments. The fund is backing WoHo with $4.5 million in seed capital.
Ruiz spent the last decade overseeing MIT’s capital construction program, including the further buildout of Kendall Square, a neighborhood next to MIT that has become a major hub for biotech innovation. Through that process, he saw the challenges of construction, particularly for the kinds of unique spaces required for innovative companies. Over the years, he also built friendships with Garcia-Abril and Mesa, the duo behind Ensamble Studio, an architecture firm.
With WoHo, “it is the integration of the process from the design and concept in architecture all the way through the assembly and construction of that project,” Ruiz explained. “Our technology is suitable for low-to-high rise, but in particularly it provides the best outcomes for mid-to-high rise.”
So what exactly are these WoHo components? Think of them as well-designed and reusable blocks that can be plugged together in order to create a structure. These blocks are consistent and are designed to be easily manufactured and transported. One key innovation is around an improved reinforced cement that allows for better building quality at lower environmental cost.
Conception of a WoHo component under construction. Photo via WoHo
We have seen modular buildings before, typically apartment buildings where each apartment is a single block that can be plugged into a constructed structure (take for example this project in Sacramento). WoHo, though, wants to go further in having components that offer more flexibility and arrangements, and also act as the structure themselves. That gives architects far more flexibility.
It’s still early days, but the group has already gotten some traction in the market, inking a partnership with Swiss concrete and building materials company LafargeHolcim to bring their ideas to market. The company is building a demonstration project in Madrid, and targeting a second project in Boston for next year.
Powered by WPeMatico
E-bike subscription service Dance closes $17.7M Series A, led by HV Holtzbrinck Ventures
Three months on since the former founders of SoundCloud launched their e-bike subscription service, Dance today is announcing the close of a $17.7 million (€15 million) Series A funding round led by one of the larger European VCs, HV Holtzbrinck Ventures.
Founded by Eric Quidenus-Wahlforss (ex-SoundCloud), Alexander Ljung (still at SoundCloud as chairman) and Christian Springub (ex-Jimdo), Dance has ambitions to offer its all-inclusive service subscription package into expanded markets across Europe and eventually the U.S. Dance is currently operating the invite-only pilot of its e-bike subscription in Berlin, with plans for a broader launch, expanded accessibility and availability and new cities next year.
Rainer Märkle, general partner at HV Holtzbrinck Ventures, said in a statement: “The mobility market is seeing a huge shift towards bikes, strongly fueled by the paradigm shift of vehicles going electric. Unfortunately, the majority of e-bikes on the market today have some combination of poor design, high upfront costs, and cumbersome maintenance. We analyzed the overall mobility market, evaluated all means of transport, and crunched the numbers on all types of business models for a few years before we found what we were looking for. Dance is by the far the most viable future of biking, bridging the gap between e-bike ownership and more ‘joyful’ accessibility to go places.”
E-bikes tend to be notoriously expensive to purchase and a hassle to repair. That said, startups like VanMoof and Cowboy have brought an Apple -esque business model to the market, which is fast bringing the cost of full ownership down.
Most commuters are put off cycling the average 10 kilometers (6.2 miles) commute but e-bikes make this distance a breeze. Dance sits in that half-way house between owning an expensive bike and having to hunt down a rentable e-bike or electric scooter close to your location.
Additionally, the COVID-19 pandemic has brought individual, socially distanced transport into sharp relief. U.K. sales of e-bikes have boomed, seeing a 230% surge in demand over the summer. This has happened at the same time as EU governments have put in more than 2300 km of bike lanes, with the U.K. alone pledging £250 million in investment.
Quidenus-Wahlforss said the startup has been “inundated with positive responses from around the world since we announced our invite-only pilot program.”
Dance’s subscription model includes a fully assembled e-bike delivered to a subscriber’s door within 24 hours. This comes with maintenance, theft replacement insurance, a dedicated smartphone app, concierge services, GPS location tracking and unlocking capabilities.
Powered by WPeMatico
Here integrates what3words’ super simple address system into its in-car API
Geocoding startup what3words — which chunks the world into 3mx3m squares, giving each a unique three-word label to simplify location sharing — has nabbed another in-vehicle integration, via a partnership with Here Technologies.
The pair said today that OEMs using Here’s navigation platform can include what3words as an in-car nav feature directly through the Here Search API, instead of needing to integrate itself. Existing users of the platform will be able to be given access to what3word’s addressing tech via an update.
Here says its map data services can be found in 150 million vehicles worldwide at this point.
It’s by no means the first such integration for what3words, which has found cars to be a natural fit for its simplified, “rolls-off-the-tongue” addressing system. The 2013-founded startup inked a partnership with Ford last year, for example. It also counts Daimler as an investor.
Letting drivers speak or type three words to input a location into their car’s GPS system has clear benefits versus requiring they correctly specify a full address. What3words also pinpoints a more specific location than a typical postcode — and works for destinations that don’t have a street address (the start of a hiking trail or specific lay-by; a particular entrance for a campus, etc).
What3words further notes that its tech has been adopted by global car companies, logistics providers and mobility apps, including Mercedes-Benz, Tata Motors, DB Schenker, Hermes and Cabify.
In recent years the novel addressing system has also found favor with Airbnb as a way of simplifying location sharing for less traditional types of stays.
Commenting on its latest partnership in a statement, what3words CEO and co-founder Chris Sheldrick, said: “We are seeing increasing demand from automakers and mobility services. Now that we are embedded in Here, we can enable our address system simply and easily in both new and legacy vehicles.”
“Automotive OEMs and Tier 1 suppliers can now provide the what3words service to their customers through the Here Search API instead of having to integrate it themselves,” added Jørgen Behrens, SVP and chief product officer at Here Technologies in another supporting statement. “This will allow drivers to navigate easily in dense, urban environments with non-standard addressing schemes or seamlessly get to any location, be it a local pub or a trailhead.”
Powered by WPeMatico
Adyen alumni raise €2.6M seed to launch Silverflow, a ‘cloud-native’ card payments processor
Silverflow, a Dutch startup founded by Adyen alumni, is breaking cover and announcing seed funding.
The pre-launch company has spent the last two years building what it describes as a “cloud-native” online card processor that directly connects to card networks. The aim is to offer a modern replacement for the 20 to 40-year-old payments card processing tech that is mostly in use today.
Backing Silverflow’s €2.6 million seed round is U.K.-based VC Crane Venture Partners, with participation from Inkef Capital and unnamed angel investors and industry leaders from Pay.On, First Data, Booking.com and Adyen. It brings the fintech startup’s total funding to date to ~€3 million.
Bootstrapped while in development and launching in 2021, Silverflow’s founders are CEO Anne-Willem de Vries (who was focused on card acquiring and processing at Adyen), CBDO Robert Kraal (former Adyen COO and EVP global card acquiring & processing of Adyen) and CTO Paul Buying (founder of acquired translation startup Livewords).
“The payments tech stack needs an upgrade,” Kraal tells me. “Today’s card payment infrastructure based on 30 to 40-year-old technology is still in use across the global payment landscape. This legacy infrastructure is costing everyone time and money: consumers, merchants, payment-service-providers and banks. The legacy platforms require a lengthy on-boarding process and are expensive to maintain, [and] they also aren’t fit for purpose today because they don’t support data use”.
In addition, Kraal says that adding new functionality is a lengthy and expensive process, requiring the effort of specialised engineers which ultimately slows down innovation “for the whole card payments system”.
“Finally, every acquirer provides its customer with a different processing platform, which for a typical payment service provider (PSP) means they have to deal with multiple legacy platforms — and all the costs and specialised support each entails,” adds de Vries.
To solve this, Silverflow claims it has built the first payments processor with a “cloud-native platform” built for today’s technology stack. This includes offering simple APIs and “streamlined data flows” directly integrated into the card networks.
Continues de Vries: “Instead of managing a complex network of acquirers across markets with dozens of bank and card network connections to maintain, Silverflow provides card-acquiring processing as a service that connects to card networks directly through a simple API”.
Target customers are PSPs, acquirers and “global top-market merchants” that are seeing €500 million to 10 billion in annual transactions.
“As a managed service, Silverflow provides the maintenance for connections and new product innovation that users have typically had to support in-house or work on long-term product road maps with suppliers,” explains Kraal. “Based in the cloud, Silverflow is infinitely scalable for peak flows and also provides robust data insights that users haven’t previously been able to access”.
With regards to competitors, Kraal says there are no other companies at the moment doing something similar, “as far as we are aware”. Currently, acquirers use traditional third-party processors, such as SIA, Omnipay, Cybersource or MIGS. Some companies, like Adyen, have built their own in-house processing platform.
So, why hasn’t a cloud-native card processing platform like Silverflow been done before and why now? A lack of awareness of the problem might be one reason, says de Vries.
“Unless you have built several integrations to acquirers during your career, you are not aware that the 30 to 40-years-old infrastructure is still in use. This is not typically a problem some bright college graduates would tackle,” he posits.
“Second, to build this successfully, you need to have prior knowledge of the card payments industry to navigate all the legal, regulatory and technical requirements.
“Thirdly, any large corporate currently active in card payment processing will be aware of the problem and have the relevant industry knowledge. However, building a new processing platform would require them to allocate their most talented staff to this project for two-three years, taking away resources from their existing projects. In addition, they would also need to manage a complex migration project to move their existing customers from their current system to the new one and risk losing some of the customers along the way”.
Powered by WPeMatico
Health insurance startup Alan lets you chat with a doctor
French startup Alan is building health insurance products. And 100,000 people are now covered through Alan . I caught up with the company’s co-founder and CEO Jean-Charles Samuelian-Werve so that he could give us an update on the product.
Alan has obtained its own health insurance license and is a proper insurance company. It doesn’t partner with existing insurance companies. The company primarily sells its insurance product to other companies.
In France, employees are covered by both the national healthcare system and private insurance companies. So Alan convinces other companies to use its product for all employees.
Over the years, Alan has diversified its offering with high-end coverage, partnerships with CNP Assurances, Livi and Petit Bambou, and a focus on new verticals, such as companies in the hospitality industry or retired individuals.
“We’ve kept shipping, and I even think that our pace has increased. We’ve released some exciting stuff in recent months, for our members, for companies and for us internally,” Samuelian-Werve told me.
The biggest change isn’t visible to the end user. The company has built a service that lets them generate a new insurance package on demand. It uses historical data to figure out pricing on the fly. And it opens up some market opportunities as big companies want a custom insurance product depending on their needs.
The biggest Alan customer is a company with 1,000 to 1,500 employees. But the startup is currently selling its product to bigger companies. The idea is that companies with more than 100 employees can get a custom insurance package.
For the customer, pricing remains transparent as Alan shows you how much it costs to cover your medical needs depending on what you’re asking for. Alan adds a membership fee on top of that to access the platform and related services.
Alan is also introducing a new messaging feature. You can start a text discussion with a doctor whenever you have a question about your health — it’s included in your insurance package. Alan doesn’t want to replace your general practitioner. But having a doctor that you can text is always helpful when you’re not sure what to do next.
On the other side of the screen, there are actual doctors answering your questions. “We’ve hired a full-time doctor and we’re working with a bit under 10 doctors on a part-time basis,” Samuelian-Werve told me.
Alan’s app has been redesigned with a bigger emphasis on your health instead of your insurance. The company shows you all your interactions with health professionals. You can add documents and notes to consolidate information in the same place.
It sounds a bit like France’s DMP, which acts as a personal repository for all your health-related documents. And Alan doesn’t want to replace the public initiative. The startup would like to take advantage of the service to upload and download data at some point down the road.
If you give your consent, Alan can also proactively nudge you about your health. For instance, given your child’s age, Alan can notify you when they’re supposed to get vaccinated. Or if you haven’t been to the dentist in a year, Alan can tell you that it’s time to get a routine checkup.
Finally, the company has improved efficiency when it comes to reimbursements. “Seventy-four percent of reimbursements are issued within an hour. And we’re using instant transfers to send money to your bank account,” Samuelian-Werve told me.
As you can see, Alan is releasing incremental updates. They slowly add up and change the product. In the coming years, the company plans to offer its product in multiple European countries.
Powered by WPeMatico
Acapela, from the founder of Dubsmash, hopes ‘asynchronous meetings’ can end Zoom fatigue
Acapela, a new startup co-founded by Dubsmash founder Roland Grenke, is breaking cover today in a bid to re-imagine online meetings for remote teams.
Hoping to put an end to video meeting fatigue, the product is described as an “asynchronous meeting platform,” which Grenke and Acapela’s other co-founder, ex-Googler Heiki Riesenkampf (who has a deep learning computer science background), believe could be the key to unlock better and more efficient collaboration. In some ways the product can be thought of as the antithesis to Zoom and Slack’s real-time and attention-hogging downsides.
To launch, the Berlin -based and “remote friendly” company has raised €2.5 million in funding. The round is led by Visionaries Club with participation from various angel investors, including Christian Reber (founder of Pitch and Wunderlist) and Taavet Hinrikus (founder of TransferWise). I also understand Entrepreneur First is a backer and has assigned EF venture partner Benedict Evans to work on the problem. If you’ve seen the ex-Andreessen Horowitz analyst writing about a post-Zoom world lately, now you know why.
Specifically, Acapela says it will use the injection of cash to expand the core team, focusing on product, design and engineering as it continues to build out its offering.
“Our mission is to make remote teams work together more effectively by having fewer but better meetings,” Grenke tells me. “With Acapela, we aim to define a new category of team collaboration that provides more structure and personality than written messages (Slack or email) and more flexibility than video conferencing (Zoom or Google Meet)”.
Grenke believes some form of asynchronous meetings is the answer, where participants don’t have to interact in real-time but the meeting still has an agenda, goals, a deadline and — if successfully run — actionable outcomes.
“Instead of sitting through hours of video calls on a daily basis, users can connect their calendars and select meetings they would like to discuss asynchronously,” he says. “So, as an alternative to everyone being in the same call at the same time, team members contribute to conversations more flexibly over time. Like communication apps in the consumer space, Acapela allows rich media formats to be used to express your opinion with voice or video messages while integrating deeply with existing productivity tools (like GSuite, Atlassian, Asana, Trello, Notion, etc.)”.
In addition, Acapela will utilise what Grenke says is the latest machine learning techniques to help automate repetitive meeting tasks as well as to summarise the contents of a meeting and any decisions taken. If made to work, that in itself could be significant.
“Initially, we are targeting high-growth tech companies which have a high willingness to try out new tools while having an increasing need for better processes as their teams grow,” adds the Acapela founder. “In addition to that, they tend to have a technical global workforce across multiple time zones which makes synchronous communication much more costly. In the long run we see a great potential tapping into the space of SMEs and larger enterprises, since COVID has been a significant driver of the decentralization of work also in the more traditional industrial sectors. Those companies make up more than 90% of our European market and many of them have not switched to new communication tools yet”.
Powered by WPeMatico
10 Zurich-area investors on Switzerland’s 2020 startup outlook
European entrepreneurs who want to launch startups could do worse than Switzerland.
In a report analyzing Europe’s general economic health, cost of doing business, business environment and labor force quality, analysts looked for highly educated populations, strong economies, healthy business environments and relatively low costs for conducting business. Switzerland ended up ranking third out of 31 European nations, according to Nimblefins. (Germany and the UK came out first and second, respectively).
According to official estimates, the number of new Swiss startups has skyrocketed by 700% since 1996. Zurich tends to take the lion’s share, as the city’s embrace of startups has jump-started development, although Geneva and Lausanne are also hotspots.
As well as traditional software engineering startups, Switzerland’s largest city boasts a startup culture that emphasizes life sciences, mechanical engineering and robotics. Compared to other European countries, Switzerland has a low regulatory burden and a well-educated, highly qualified workforce. Google’s largest R&D center outside of the United States is in Zurich.
But it’s also one of the more expensive places to start a business, due to its high cost of living, salary expectations and relatively small labor market. Native startups will need 25,000 Swiss Francs to open an LLC and 50,000 more to incorporate. While they can withdraw those funds from the business the next day, local founders must still secure decent backing to even begin the work.
This means Switzerland has gained a reputation as a place to startup — and a place to relocate, which is something quite different. It’s one reason why the region is home to many fintech businesses born elsewhere that need proximity to a large banking ecosystem, as well as the blockchain/crypto crowd, which have found a highly amenable regulatory environment in Zug, right next door to Zurich. Zurich/Zug’s “Crypto Valley” is a global blockchain hotspot and is home to, among others, the Ethereum Foundation.
Lawyers and accountants tend to err on the conservative side, leading to a low failure rate of businesses but less “moonshot innovation,” shall we say.
But in recent years, corporate docs are being drawn up in English to facilitate communication both inside Switzerland’s various language regions and foreign capital, and investment documentation is modeled after the U.S.
Ten years ago startups were unusual. Today, pitch competitions, incubators, accelerators, VCs and angel groups proliferate.
The country’s Federal Commission for Technology and Innovation (KTI) supports CTI-Startup and CTI-Invest, providing startups with investment and support. Venture Kick was launched in 2007 with the vision to double the number of spin-offs from Swiss universities and draws from a jury of more than 150 leading startup experts in Switzerland. It grants up to CHF 130,000 per company. Fundraising platforms such as Investiere have boosted the angel community support of early funding rounds.
Swiss companies, like almost all European companies, tend to raise lower early-stage rounds than U.S. ones. A CHF 1-2 million Series A or a CHF 5 million Series B investment is common. This has meant smaller exits, and thus less development for the ecosystem.
These are the investors we interviewed:
- Jasmin Heimann, partner, Ringier Digital Ventures
- Katrin Siebenbuerger Hacki, founder, Medows
- Philipp Stauffer, partner, FYRFLY Venture Partners
- Claude Donzé, partner, Tomahawk.VC
- Lucian Wagner, partner, Privilège Ventures
- Maximilian Spelmeyer, partner, SIX Fintech Ventures
- Olaf Hannemann, partner, CV VC AG
- Andreas Iten, partner, F10
- Michael Blank, partner, investiere
- Ninja Struye de Swielande, partner, Lakestar
Jasmin Heimann, partner, Ringier Digital Ventures
What trends are you most excited about investing in, generally?
Consumer-facing startups with first revenues.
What’s your latest, most exciting investment?
AirConsole — a cloud-gaming platform where you don’t need a console and can play with all your friends and family.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
I really wish that the business case for social and ecological startups will finally be proven (kind of like Oatly showed with the Blackstone investment). I also think that femtech is a hyped category but funding as well as renown exits are still missing.
What are you looking for in your next investment, in general?
I am looking for easy, scalable solutions with a great team.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
I think the whole scooter/mobility space is super hyped but also super capital intensive so I think to compete in this market at this stage is hard. I also think that the whole edtech space is an important area of investment, but there are already quite a lot of players and it oftentimes requires cooperation with governments and schools, which makes it much more difficult to operate in. Lastly, I don’t get why people still start fitness startups as I feel like the market has reached its limits.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Switzerland makes — maximum — half of our investments. We are also interested in Germany and Austria as well as the Nordics.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Zurich and Lausanne are for sure the most exciting cities, just because they host great engineering universities. Berne is still lagging behind but I am hoping to see some more startups emerging from there, especially in the medtech industry.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Overall, Switzerland is a great market for a startup to be in — although small, buying power is huge! So investors should always keep this in mind when thinking about coming to Switzerland. The startup scene is pretty small and well connected, so it helps to get access through somebody already familiar with the space. Unfortunately for us, typical B2C cases are rather scarce.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I think it is hard to make any kind of predictions. But on the one hand, I could see this happening. On the other hand, I also think that the magic of cities is that there are serendipity moments where you can find your co-founder at a random networking dinner or come across an idea for a new venture while talking to a stranger. These moments will most likely be much harder to encounter now and in the next couple of months.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
I think travel is a big question mark still. The same goes for luxury goods, as people are more worried about the economic situation they are in. On the other hand, remote work has seen a surge in investments. Also sustainability will hopefully be put back on the agenda.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Not much. I think we allocated a bit more for the existing portfolio but otherwise we continue to look at and discuss the best cases. The biggest worries are the uncertainties about [what] the future might look like and the related planning. We tell them to first and foremost secure cash flow.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Totally! Some portfolio companies have really profited from the crisis, especially our subscription-based models that offer a variety of different options to spend time at home. The challenge now is to keep up the momentum after the lockdown.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
What gives me hope is to see that people find ways to still work together — the amount of online events, office hours, etc. is incredible. I see the pandemic also as a big opportunity to make changes in the way we worked and the way things were without ever questioning them.
Katrin Siebenbuerger Hacki, founder, Medows
Powered by WPeMatico
This former Tesla CIO just raised $150 million more to pull car dealers into the 21st century
“I have to choose my words carefully,” says Joe Castelino of Stevens Creek Volkswagen in San Jose, California, when asked about the management software on which most car dealerships rely for inventory information, marketing, customer relationships and more.
Castelino, the dealership’s service director, laughs as he says this. But the joke has apparently been on car dealers, most of whom have largely relied on a few frustratingly antiquated vendors for their dealer management systems over the years — along with many more sophisticated point solutions.
It’s the precise opportunity that former Tesla CIO, Jay Vijayan, concluded he was well-positioned to address while still in the employ of the electric vehicle giant.
As Vijayan tells it, he knew nothing about cars until joining Tesla in 2011, following a dozen years of working in product development at Oracle, then VMware. Yet he learned plenty over the subsequent four years. Specifically, he says he helped to build with Elon Musk a central analysis system inside Tesla, a kind of brain that could see all of the company’s internal systems, from what was happening in the supply chain to its factory systems to its retail platform.
Tesla had to build it itself, says Vijayan; after evaluating the existing software of third-company providers, the team “realized that none of them had anything close to what we needed to provide a frictionless modern consumer experience.”
It was around then that a lightbulb turned on. If Tesla could transform the experience for its own customers, maybe Vijayan could transform the buying and selling experience for the much bigger, broader automotive industry. Enter Tekion, a now four-year-old, San Carlos, California company that now employs 470 people and has come far enough along that just attracted $150 million in fresh funding led by the private equity investor Advent International.
With the Series C round — which also included checks from Index Ventures, Airbus Ventures, FM Capital and Exor, the holding company of Fiat-Chrysler and Ferrari — the company has now raised $185 million altogether. It’s also valued at north of $1 billion. (The automakers General Motors, BMW and the Nissan-Renault-Mitsubishi Alliance are also investors.)
Eric Wei, a managing director at Advent, says that over the last decade, his team had been eager to seize on what’s approaching a $10 billion market annually. Instead, they found themselves tracking incumbents Reynolds & Reynolds, CDKGlobal and Dealertrack, which is owned by Cox Automotive, and waiting for a better player to emerge.
Then Wei was connected to Tekion through Jon McNeill, a former Tesla president and an advisory partner to Advent.
Says Wei of seeing its tech compared with its more established rivals: “It was like comparing a flip phone to an iPhone.”
Perhaps unsurprisingly, McNeill, who worked at Tesla with Vijayan, also sings the company’s praises, noting that Tekion even bought a dealership in Gilroy, Calif., to use as a kind of lab while it was building its technology from scratch.
Such praise is nice, but more importantly, Tekion is attracting the attention of dealers. Though citing competitive reasons, Vijayan declined to share how many have bought its cloud software — which connects dealers with both manufacturers and car buyers and is powered by machine learning algorithms — he says it’s already being used across 28 states.
One of these dealerships is the national chain Serra Automotive, whose founder, Joseph Serra, is now an investor in Tekion.
Another is that Volkswagen dealership in San Jose, where Castelino — who doesn’t have a financial interest in Tekion — speaks enthusiastically about the time and expenses his team is saving because of Tekion’s platform.
For example, he says customers need only log-in now to flag a particular issue. After that, with the help of an RFID tag, Stevens Creek knows exactly when that customer pulls into the dealership and what kind of help they need, enabling people to greet him or her on arrival. Tekion can also make recommendations based on a car’s history. It might, for instance, suggest to a customer a brake fluid flush “without an advisor having to look through a customer’s history,” he says.
As important, he says, the dealership has been able to cut ties with a lot of other software vendors, while also making more productive use of its time. Says Castelino, “As soon as a [repair order] is live, it’s in a dispatcher’s hand and a technician can grab the car.”
It’s like that with every step, he insists. “You’re saving 15 minutes again and again, and suddenly, you have three hours where your intake can be higher.”
Interestingly, the steepest competition, should it come, might eventually be from Tesla itself.
In an earnings call earlier today, Musk told analysts that there are essentially a dozen startups housed inside of Tesla, including one centered on vehicle service. It’s the very business that Vijayan helped to create.
As for whether Musk might spin out any of these, he said Tesla currently has no plans to do so, suggesting it has enough on its plate for the time being.
Powered by WPeMatico