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7-month-old Simsim secures $16M for its social commerce in India
Simsim, a social commerce startup in India, said on Friday it has raised $16 million in seven months of its existence as it attempts to replicate the offline retail experience in the digital world with help from influencers.
The Gurgaon-based startup said it raised $16 million across seed, Series A and Series B financing rounds from Accel Partners, Shunwei Capital and Good Capital. (The most recent round, Series B, was of $8 million in size.)
“Despite e-commerce players bandying out major discounts, most of the sales in India are still happening in brick-and-mortar stores. There is a simple reason for that: Trust,” explained Amit Bagaria, co-founder of Simsim, in an interview with TechCrunch.
The vast majority of Indians are still not comfortable with reading descriptions — and that too in English, he said.
Simsim is taking a different approach to tackle this opportunity. On its app, users watch short-videos produced in local languages by influencers who apply beauty products or try out dresses and explain the ins-and-outs of the products. Below the video, the items appear as they are being discussed and users can tap on them to proceed with the purchase.
“Videos help in educating users about the category. So many of them may not have used face masks, for instance. But it becomes easier when the community influencer is able to show them how to apply it,” said Rohan Malhotra, managing partner at Good Capital, in an interview with TechCrunch.
Influencers typically sell a range of items and users can follow them to browse through the past catalog and stay on top of future sales, said Bagaria, who previously worked at the e-commerce venture of financial services firm Paytm .
“This interactiveness is enabling Simsim to mimic the offline stores experience,” said Malhotra, who is one of the earliest investors in Meesho, also a social commerce startup that last year received backing from Facebook and Prosus Ventures.
“The beauty to me of social commerce is that you’re not changing consumer behavior. People are used to consuming on WhatsApp — and it’s working for Meesho. Over here, you are getting the touch and feel experience and are able to mentally picture the items much clearer,” he said.
Simsim handles the inventories, which it sources from manufacturers and brands, and it works with a number of logistics players to deliver the products.
“Several Indian cities and towns are some of the biggest production hubs of various high-quality items. But these people have not been able to efficiently sell online or grow their network in the offline world. On Simsim, they are able to work with influencers and market their products,” said Bagaria.
The platform today works with more than 1,200 influencers, who get a commission for each item they sell, said Bagaria, who plans to grow this figure to 100,000 in the coming years.
Even as Simsim, which has been open to users for six months, is still in its nascent stage, it is beginning to show some growth. It has amassed over a million users, most of whom live in small cities and towns, and it is selling thousands of items each day, said Bagaria.
He said the platform, which currently supports Hindi, Tamil, Bengali and English, will add more than a dozen additional languages by the end of the year. In about a month, Simsim also plans to start showing live videos, where influencers will be able to answer queries from users.
A handful of startups have emerged in India in recent years that are attempting to rethink the e-commerce market in the nation. Amazon and Walmart, both of which have poured billions of dollars in India, have taken a notice too. Both of them have added support for Hindi in the last two years and have made several more tweaks to their platforms to expand their reach.
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Soylent shakes up its executive team, naming Demir Vangelov as its new CEO
Soylent, the once high-flying Los Angeles-based meal replacement startup that has raised $72.4 million in financing from investors including Google Ventures, Lerer Hippeau and Andreessen Horowitz, has shaken up its executive team.
This week, the company announced in a blog post that the company’s chief financial officer, Demir Vangelov, would be taking over the top spot at the company and current chief executive Bryan Crowley would be stepping down.
“We would like to thank Bryan Crowley for his immense contributions to the company,” wrote Soylent chairman and founder Rob Rhinehart, in a statement.
Vangelov, who’s taking over from Crowley, previously served as an executive at the milk alternative company Califia Foods and at Oberto Foods, so he knows consumer packaged brands.
Crowley came to the company with grand ambitions to revitalize the Soylent brand and product line. The company had introduced a line of snack bars to complement its line of powders and drinks, while updating its drink line with a nootropic beverage containing caffeine and supplements supposedly designed to boost cognitive performance in addition to providing a meal replacement.
Soylent also set up fancy digs in Los Angeles’ arts district and established a Food Innovation Lab, which only a year ago awarded $25,000 to a few food startups working there.
Now, only a year later, the Food Innovation Lab is shuttered and Soylent has moved to a smaller office space. The company declined to comment on the news or its new strategy.
In some ways, Soylent may suffer from being a progenitor of an investment thesis which has passed it by. When the company launched in 2013, it was a fairly novel idea to start a new food brand, as Rhinehart notes in the blog post announcing the executive change:
Soylent started as a movement. In 2013, there was scarcely any innovation or attention to one of the world’s most important product sectors: our food. Today, innovative food companies are performing record-breaking IPOs, new retailers are raising massive growth rounds, and food, agriculture, and ingredient technologies are some of the most disruptive startups in the ecosystem. But we still have a lot of work to do to fulfill Soylent’s mission of nutrition for all.
Today we are making some changes at the company. We are renewing our commitment to being transparent, authentic and science-driven, all while putting the customer first. To do this we are going to re-focus on our core products. We will be improving our current product line as well as bringing some truly innovative ideas off the shelf and into the market, and we will be improving our prices by focusing on quality over quantity when it comes to distribution and marketing.
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As 5 more startups join the $100M club, are we just making a pre-IPO list?
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re adding five names to the $100 million annual recurring revenue (ARR) club and listing all preceding members in a single post. This series, which was a bit of an accident, if I’m being honest, has included more than a dozen companies that have reached $100 million ARR, along with a handful more that are close.
Today we’re adding Seismic, ThoughtSpot, Noom, Riskified and Moveable Ink to the list. As always, we have funding histories, growth metrics and interviews below on the new group. But at this juncture, as we head toward the two-dozen company mark, it’s a good time to ask, what is this list that we’re compiling?
At first, the goal of the jokingly-named “$100 million ARR club” was to highlight companies that were of real scale, an idea designed to gently push back against the “unicorn” moniker. As more and more unicorns were born and the private-capital world became adept at getting startups of all maturity levels over the requisite $1 billion valuation threshold, the term began to feel too diluted to have much signaling value.
While, in contrast, $100 million in ARR felt much more “hard” to the valuation metric’s comparable squishiness. But, since that first post, more and more companies have written in, sharing hard metrics and the series has continued. Perhaps we’re really just compiling an IPO watchlist, a grouping of firms that will probably go (or should go) public in the next 18 months.
Let’s dig into our new additions. Then, we’ll list all our prior entrants with links to our preceding coverage in case you are playing catch up. With that, here’s the entire $100 million ARR club a list of companies that we think could go public inside the next six quarters.
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Google closes $2.6B Looker acquisition
When Google announced that it was acquiring data analytics startup Looker for $2.6 billion, it was a big deal on a couple of levels. It was a lot of money and it represented the first large deal under the leadership of Thomas Kurian. Today, the company announced that deal has officially closed and Looker is part of the Google Cloud Platform.
While Kurian was happy to announce that Looker was officially part of the Google family, he made it clear in a blog post that the analytics arm would continue to support multiple cloud vendors beyond Google.
“Google Cloud and Looker share a common philosophy around delivering open solutions and supporting customers wherever they are—be it on Google Cloud, in other public clouds, or on premises. As more organizations adopt a multi-cloud strategy, Looker customers and partners can expect continued support of all cloud data management systems like Amazon Redshift, Azure SQL, Snowflake, Oracle, Microsoft SQL Server and Teradata,” Kurian wrote.
As is typical in a deal like this, Looker CEO Frank Bien sees the much larger Google giving his company the resources to grow much faster than it could have on its own. “Joining Google Cloud provides us better reach, strengthens our resources, and brings together some of the best minds in both analytics and cloud infrastructure to build an exciting path forward for our customers and partners. The mission that we undertook seven years ago as Looker takes a significant step forward beginning today,” Bien wrote in his post.
At the time the deal was announced in June, the company shared a slide, which showed where Looker fits in what they call their “Smart Analytics Platform,” which provides ways to process, understand, analyze and visualize data. Looker fills in a spot in the visualization stack while continuing to support other clouds.
Slide: Google
Looker was founded in 2011 and raised more than $280 million, according to Crunchbase. Investors included Redpoint, Meritech Capital Partners, First Round Capital, Kleiner Perkins, CapitalG and PremjiInvest. The last deal before the acquisition was a $103 million Series E investment on a $1.6 billion valuation in December 2018.
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Datometry snares $17M Series B to help move data and applications to the cloud
Moving data to the cloud from an on-prem data warehouse like Teradata is a hard problem to solve, especially if you’ve built custom applications that are based on that data. Datometry, a San Francisco startup, has developed a solution to solve that issue, and today it announced a $17 million Series B investment.
WRVI Capital led the round with participation from existing investors including Amarjit Gill, Dell Technologies Capital, Redline Capital and Acorn Pacific. The company has raised a total of $28 million, according to Crunchbase data.
The startup is helping move data and applications — lock, stock and barrel — to the cloud. For starters, it’s focusing on Teradata data warehouses and applications built on top of that because it’s a popular enterprise offering, says Mike Waas CEO and co-founder at the company.
“Pretty much all major enterprises are struggling right now with getting their data into the cloud. At Datometry, we built a software platform that lets them take their existing applications and move them over to new cloud technology as is, and operate with cloud databases without having to change any SQL or APIs,” Waas told TechCrunch.
Today, without Datometry, customers would have to hire expensive systems integrators and take months or years rewriting their applications, but Datometry says it has found a way to move the applications to the cloud, reducing the time to migrate from years to weeks or months, by using virtualization.
The company starts by building a new schema for the cloud platform. It supports all the major players including Amazon, Microsoft and Google. It then runs the applications through a virtual database running the schema and connects the old application with a cloud data warehouse like Amazon Redshift.
Waas sees virtualization as the key here as it enables his customers to run the applications just as they always have on prem, but in a more modern context. “Personally I believe that it’s time for virtualization to disrupt the database stack just the way it has disrupted pretty much everything else in the datacenter,” he said.
From there, they can start developing more modern applications in the cloud, but he says that his company can get them to the cloud faster and cheaper than was possible before, and without disrupting their operations in any major way.
Waas founded the company in 2013 and it took several years to build the solution. This is a hard problem to solve, and he was ahead of the curve in terms of trying to move this type of data. As his solution came online in the last 18 months, it turned out to be good timing as companies were suddenly looking for ways to move data and applications to the cloud.
He says he has been able to build a client base of 40 customers with 30 employees because the cloud service providers are helping with sales and walking them into clients, more than they can handle right now as a small startup.
The plan moving forward is to use some of the money from this round to build a partner network with systems integrators to help with implementation so that they can concentrate on developing the product and supporting other data repositories in the future.
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Tozny introduces encrypted identity tool as part of security service platform
Tozny, a Portland, Oregon startup that wants to help companies more easily incorporate encryption into programs and processes, introduced TozID today. It is an identity and access control tool that can work independently or in conjunction with the company’s other encryption tools.
“Basically we have a Security as a Service platform, and it’s designed to help developers and IT departments add defense in depth by [combining] centralized user management with an end-to-end encryption platform,” Tozny CEO and founder Isaac Potoczny-Jones told TechCrunch.
The company is introducing an identity and access solution today with the hope of moving beyond its core developer and government audience to a broader enterprise customer base.
Under the hood, TozID uses standards identity constructs like single sign-on, SAML and OpenID, and it can plug into any existing identity framework, but the key here is that it’s encryption-based and uses Zero Knowledge identification. This allows a user (or application) to control information with a password while reducing the risk of sharing data because Tozny does not store passwords or send them over the network.
In this tool, the password acts as the encryption key, which enables users or applications to control access to data in a very granular way, only unlocking information for people or applications they want to be able to access that information.
As Potoczny-Jones pointed out, this can be as simple as one-to-one communication in an encrypted messaging app, but it can be more complex at the application layer depending on how it’s set up. “It’s really powerful to have a user make that decision, but that’s not the only use case. There are many different ways to enable who gets access to data, and this tool enforces those kinds of decisions with encryption,” he explained.
Regardless of how this is implemented, the user never has to understand encryption or even know that encryption is in play in the application. All they need to do is enter a password as they always have, and then Tozny deals with the complex parts under the hood using standard open source encryption algorithms.
The company also has a data privacy tool geared towards developers to build in end-to-end encryption into applications, whether that’s web, mobile, server and so forth. Developers can use the Tozny SDK to add encryption to their applications without a lot of encryption knowledge.
The company has been around since 2013 and hasn’t taken any private investment. Instead, it has developed an encryption toolkit for government agencies, including NIST and DARPA, that has acted as a funding mechanism.
“This is an open source toolkit on the client side, so that folks can vet it for security — cryptographers like that — and on the server side it’s a SaaS-type platform,” he said. The latter is how the company makes money, by selling the service.
“Our goal really here is to bring the kind of cybersecurity that we’ve been building for government agencies into the commercial market, so this is really work on our side to try to, you might say, bring it down market as the threat landscape moves up market,” he said.
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Peru’s startup scene is ready for more
Greg Mitchell is regional director of Angel Ventures, a startup investor and advisor and is the creator of the blog Ruta Startup.
Funding of Latin American startups has doubled each year over the past two years.
And while most of this capital has been directed toward Brazil and Mexico, this surge is starting to have an effect on startups in the region’s smaller markets. The increased availability of capital for later rounds is creating more opportunities for startups to scale both regionally and globally. And while it may not be one of the largest countries in Latin America, Peru continues to have one of the best-performing economies and fastest-growing startup scenes.
In 2019, a new record was set for the amount of capital invested into Peruvian startups, at least $11 million, a 24% increase compared to 2018. Most of the money went to fintech (47%) and edtech (37%) startups. Over the past four years, more than $22.7 million in public funds went toward startup-related projects as well.
The government-backed program Innóvate Perú awarded approximately $13.8 million of its total investments almost exclusively to startups. Total venture capital investment will likely exceed US$25 million in 2020, doubling what was achieved in 2019, and will continue to grow from there.
In 2019, Peru’s development bank, COFIDE, announced a new fund of funds to invest in venture capital firms, mirroring similar entities such as Chile’s CORFO, Colombia’s Bancoldex and Mexico’s NAFIN. While there are plenty of opportunities to secure seed-stage capital in Peru, many startups still have to look abroad for growth capital. Keynua, Xertica, Turismoi and Runa are just a few of the Peruvian startups that sought international investors to lead their rounds over $1 million. Following in the path of similar funds, the fund of funds will invest $20 million in half a dozen venture capital firms, which would in turn invest in approximately 120 startups.
As government support for entrepreneurs continues to pour in, the Peruvian startup ecosystem is entering a new phase. More and more startups are launching, graduating from accelerator programs and seeking ways to reach their next milestone. Local early-stage investors are stepping in to fill the financing gap and have teamed up to form the Peruvian Seed and Venture Capital Association, PECAP, to share investment opportunities and lay a strong foundation for venture capital in Peru. Here’s a look at just a few of the opportunities for more venture capital to step in.
Fueling Peru’s growing fintech sector
A massive fintech boom is playing out across Latin America, with the size of the industry expected to exceed $150 billion by 2021. Peru is home to an estimated 120 fintech startups actively tackling the issues of financial inclusion and better servicing the region’s small and medium-sized businesses. Peru’s economy is still largely informal, with approximately 14 million people underbanked. In 2017, María Laura Cuya started Peru’s Fintech Association to work alongside regulators, academics and other organizations to improve financial literacy and access to financial products, with a focus on Peruvian SMEs.
A few of Peru’s fintech sectors stand out, including factoring and foreign exchange, where a number of startups are quickly gaining traction and already branching out to neighboring markets. Innova Funding, Innova Factoring, Facturedo, Kambista and Rextie are just a few examples. Peru’s membership in the Pacific Alliance also makes it an attractive initial market prior to launching in other Pacific Alliance countries.
In 2019, Peruvian fintechs Keynua and Apurata were selected for the Y Combinator accelerator program, putting them on the international radar. Traditional banks in Peru are also shifting their mindsets and warming up to fintech partnerships. The publicly traded Peruvian bank, Credicorp, for example, recently set up a corporate venture fund called Krealo. The bank made its first investments in Culqi, a local payments gateway, and Independencia, a lending platform.
Impact investing opportunities
Latin America is a top destination for impact investment capital, outpacing many other regions in the world, with a 15% compound annual growth rate over the last five years, according to the Global Impact Investing Network. Edtech represents a rising entry point across the region for impact investors thanks to its potential for both financial and non-financial returns.
According to an OECD report, approximately 30 million young people in Latin America are not participating in any form of education, training or employment, and 76% of this total are women. Laboratoria, co-founded by edtech thought leader Mariana Costa Checa, helps women develop technical skills and has expanded across the region from its headquarters in Lima to train more than 1,000 women so far. The startup has received praise from global companies, including Walmart and Facebook. In 2019, the skills development platform Crehana raised the largest-ever round for a Peruvian startup ($4.5 million) from both regional and global funds.
Peru attracted more impact investment capital than Mexico, a longtime leader in the region, for the first time in 2018. Much of this investment is focused on improving Peru’s education system. Local startups are addressing everything from early childhood education to workforce training, and as more success stories emerge, more resources will be needed to fully tap into Latin America’s large markets for these solutions.
Supporting long-term startup growth
The government-backed program Innóvate Perú has financed more than 3,400 entrepreneurial projects to date, and more than 25 private institutions are now accelerating, incubating and investing in Peruvian startups. New startup creation is at its highest rate ever; however, these companies are outgrowing their angel and seed-stage supporters and are now seeking ways to take their ventures to the next level.
Over the past few years, Latin America has proven that it is a place where startups can scale and succeed. Now, with more startups coming out of the region’s smaller, underserved markets, like Peru, there is an opportunity to deploy capital effectively and bring impactful solutions to millions of people across the region.
*Angel Ventures was an investor in Culqi before it was sold to BCP. Neither Angel Ventures nor Greg Mitchell currently hold any shares.
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Eight Sleep CEO says his startup is more than a mattress company
Matteo Franceschetti, CEO of Eight Sleep, would prefer that you don’t call his startup a mattress company.
Eight Sleep does sell mattresses, albeit smart ones packed with sensors and temperature regulation controls. The company has raised north of $70 million from backers including Founders Fund and Khosla Ventures. A great deal of this funding surrounds the idea that there is more untapped potential in the sleep economy than existing players in the space have been able to imagine.
While Franceschetti says he intends for his company to remain private for the “foreseeable future,” Eight Sleep is in a less-than-comfortable spot following Casper’s botched IPO last week. Though Casper’s stock popped on its first day of trading, the process of pricing its shares ended up leaving its private investors a bit less than ecstatic. Casper debuted trading at a value of $575 million, a far cry from the $1.1 billion private market valuation it had previously achieved.
Franceschetti has been aiming to transform Eight Sleep into a company more focused on a robust tech platform than your average bed-in-a-box company. The startup’s initial effort, a smart sleep cover for your existing mattress, evolved into a mattress with a layer of sensors that then transformed into a sensor-laden mattress with a heating and cooling unit, called “The Pod.” The company’s product development has aimed to build out a more end-to-end platform for sleep, something Franceschetti says has made him reticent to compare his company to other direct-to-consumer mattress companies.
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Anniversary Sale: Get 1 year of Extra Crunch for $99
Last February we launched Extra Crunch, and today we’re celebrating its one-year anniversary. As a token of appreciation to our readers, we’re offering a limited-time deal for annual Extra Crunch membership. From now until the end of February, new users signing up for Extra Crunch in the U.S. can get a full year of membership for only $99 plus tax (normally priced at $150/year).
Get Extra Crunch membership for only $99 (plus tax) here.
Extra Crunch is our membership program and it features how-tos and guides on company building, intelligence on the most disruptive opportunities for startups, a dedicated newsletter, no banner ads, 20% discounts on all TechCrunch events, a series of community perks for annual members and more.
Since launching Extra Crunch, we’ve published more than 1,000 articles on fundraising, early-stage investing, startup PR and other topics targeted to entrepreneurs and investors. In addition to TechCrunch writers, we’ve run contributions from Julian Shapiro at Demand Curve, Jake Saper at Emergence Capital, Rory O’Driscoll at Scale and many others.
Some of our top stories from the past year:
- Where top VCs are investing in fintech
- The $100M ARR Club
- How to trigger FOMO among VCs
- The landscape for enterprise startups is changing
- Inside the venture capital recruiting process
We hope you stay engaged with the TechCrunch community through Extra Crunch. Our focus has and always will be on building a strong relationship with our readers, and we hope you will continue to support us.
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If you are a monthly Extra Crunch subscriber and want to upgrade to an annual plan to claim the deal, please navigate to My Account (while logged in). Under the “subscriptions” tab, there is a way to upgrade.
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Coinbase launches margin trading for some users
Cryptocurrency exchange Coinbase is launching margin trading today. Margin trading lets you trade on leverage. But it works both ways — margin trading lets you multiply your gains and your losses.
Margin trading is going to be available on Coinbase Pro, the company’s exchange interface for educated investors. Both retail and institutional investors will be able to submit margin trading orders with up to 3x leverage. It’ll work with any pair of assets with USD as the base currency.
For now, the feature is limited to 23 U.S. states if you’re a retail investor. Institutional investors in 45 states and nine international countries can access margin trading, though.
There are many potential use cases for margin trading. For instance, you can allocate a tiny portion of your portfolio to a margin trading order to hedge across multiple positions. Coinbase believes it has enough liquidity to help investors set up sophisticated margin trading orders.
If you’re a retail customer living in one of the 23 states where margin trading is available, you might not be able to use it. The company wants to restrict margin trading to the most advanced traders.
Coinbase is going to track your past activity on Coinbase Pro and look at trades, balances, deposits and withdrawals. If you’re an active trader, you’ll be able to access margin trading.
Here’s the list of 23 U.S. states with margin trading for retail investors: Florida, Texas, Illinois, New Jersey, Virginia, Georgia, Arkansas, Alaska, Oregon, Connecticut, New Hampshire, Massachusetts, Nebraska, North Carolina, Oklahoma, Colorado, Kansas, Maine, South Carolina, Utah, Wisconsin, Wyoming and West Virginia.
Disclosure: I own small amounts of various cryptocurrencies.
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