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Robinhood launches no-fee checking/savings with Mastercard & the most ATMs
Robinhood is undercutting the big banks by forgoing brick-and-mortar branches with its new zero-fee checking and savings account features. With no overdraft or monthly fees, a juicy 3 percent interest rate and a claim of more U.S. ATMs than the five biggest banks combined, Robinhood is using the scalability of software to pass impressive perks on to customers. The free stock trading app already used that approach to attack brokers like E*Trade and Charles Schwab that charge a per-trade fee. Now it’s breaking into the larger financial services market with a model that could put the squeeze on Wells Fargo, Chase and Bank of America.
Today Robinhood launches checking and savings accounts in the U.S. with a Mastercard debit card issued through Sutton Bank that starts shipping December 18th. Users earn 3 percent on all the dough they keep with Robinhood, yet there’s no minimum balance or fees for monthly membership, overdrafts, foreign transactions or card replacements. That’s a pretty sweet deal compared to the other leading banks that all charge for some of that or offer much lower interest rates. The trade-off is that while customers get 24/7 live text chat support, they won’t be able to walk into a local bank branch. Users who want early access can sign up here.
Robinhood expects to turn a profit thanks to a lean 300-employee operation, earning a margin on investing your money in U.S. treasuries and a revenue share with Mastercard on interchange fees charged to merchants when you swipe. The launch could be critical to keeping Robinhood worthy of its $5.6 billion valuation from when it took a $363 million Series D in March just a year after raising at a $1.3 billion valuation. The 6 million-user app invested in launching a free cryptocurrency trading exchange early this year only to see coin prices plummet and mainstream interest fall off. But with banks hammering users with surprise fees and mediocre user experience, there’s a huge opportunity for a mobile-first startup to disrupt how we store money.
“Brick-and-mortar locations are costly. Our goal with this product was to build a completely digital experience so we can reduce our overhead so we can pass more of the value back to customers,” Robinhood co-CEO Baiju Bhatt tells me. [Disclosure: I know Bhatt and co-CEO Vlad Tenev from college.] “Saving accounts in the U.S. pay on average 0.09 percent and we all know the banks are making far more than that from the deposits. With Robinhood you earn 3 percent off all of your money. Mental math is hard, so if you look at the median U.S. household that has about $8,000 in liquid savings, they’d earn $240 a year.”
Robinhood will be sending invites to users in January for the new feature that they can use exclusively or alongside their existing bank. Anyone approved to use Robinhood’s stock brokerage is eligible, but users can also sign up directly for checking and savings with no obligation to trade stocks. Robinhood claims signing up won’t impact your credit score. Users get to customize a Robinhood-branded debit card that’s accepted wherever Mastercard is. Because the feature is run within Robinhood’s brokerage, it’s ensured by the SIPC instead of the FDIC, but you still get the same insurance on up to $250,000 cash.
One of the most appealing features of Robinhood checking and savings is getting access to 75,000 free-to-use ATMs in places like Target, Walgreens and 7-Eleven. Users won’t be able to tell just by looking at an ATM whether it’s in the network, but the Robinhood app features a map for finding the nearest one. You can deposit checks via Robinhood’s app too, and if you need to send a check, you can just tell the startup how much to deliver to whom and it will mail the check for you.
“These fees like overdraft fees — they’re not fees millionaires are paying. It’s ordinary folks paying. It’s actually more expensive for those that have less money and it’s cheaper for those that have more money. We think that isn’t right and we think that’s bad business,” Bhatt gripes. Because Robinhood built its own clearing house for moving money, and it lacks the overhead of traditional banks, it’s able to save enough money to make its no-fee structure work. “We want to build a financial services company that democratizes America’s financial system.”
Robinhood will have to convince users it’s worthy of their trust, as a security breach could be disastrous. There’s also the question of whether people are ready to ditch their bank branch. “Behaviors about and going into a branch are definitely changing,” says Bhatt. My biggest concern was not having any consistency in who I talk to when I need banking help. Bhatt tells me the company plans to roll out more personalized customer service features in the coming months, but there may always be edge cases that make the lack of in-person support annoying.
Getting into banking could open a lucrative revenue stream for Robinhood as it charts its path to IPO. The startup recently hired Jason Warnick, a 20-year veteran of Amazon, to be its CFO and get it prepped to go public. Wall Street will want to see a more robust business that’s not as vulnerable to foes like stock brokerage Charles Schwab, which is already lowering fees to stay competitive with Robinhood. Not only will checking and savings see users move more money into their Robinhood accounts that it can invest to earn a profit, but it also poises the startup to tackle more financial services in the future. More lucrative products like loans could make paying 3 percent much easier for Robinhood to handle.
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Postmates unveils Serve, a friendlier autonomous delivery robot
San Francisco partially banned delivery robots because they obstructed pedestrians, so Postmates built one with eyes, turn signals and a mandate to yield. Serve is Postmates’ new cooler-meet-autonomous-stroller that it hopes can cut costs and speed up deliveries. The semi-autonomous rover uses cameras and Lidar to navigate sidewalks, but always has a human pilot remotely monitoring a fleet of Serves who can take control if there’s a problem. There’s even a “Help” button, touchscreen and video chat display customers or passers-by can use to summon assistance.
Serve will be rolling out in various cities over the next year, starting in Los Angeles. It does deliveries to customers that unlock its cargo hatch with their phone or a passcode, but it also can grab food from restaurants in congested areas and bring them to a Postmates dispatch hub from which delivery people can take packages the last mile. That could save Postmates money on delivery labor, but the company didn’t provide any information on how it might help transition couriers to other roles or careers.
“Somehow as a society we’re OK with moving a 2-pound burrito with a 2-ton car. All the energy is used to move the car, not the burrito, and there’s all the congestion it introduces” says Ali Kashani, VP of Postmates X special projects. So Postmates spent the last couple of years piloting autonomous rovers built by Starship and Robby before deciding only it had the on-demand experience to build the right bot.
Ready to share the sidewalk with this little guy?
Serve can carry 50 pounds of goods for 25 miles on a single charge — enough to make around a dozen deliveries per day. Thanks to a low center of gravity achieved by building the battery into the bottom of the chassis, it’s less likely to get cow-tipped. It uses Velodyne Lidar and a NVIDIA XAVIER processor to tell where it’s going. A Postmates spokesperson tells me, of the scalability and efficiency of the rovers, that “ultimately we believe that there will be a world where goods move rapidly at almost zero cost to the consumer.”
“We took time to figure out what is the language for the rover and pedestrians to interact with each other. If a robot is at a sidewalk and wants to be able to cross the street, it needs to show its intent to cross,” Kashani tells me. Thanks to a light ring around the top with turn signals and eyes that can indicate where it’s trying to go, Kashani believes Serve can be a respectful and natural part of the urban environment.
Postmates could offer Serve not only to its customers, but to companies like Instacart for which it handles outsourced deliveries. That business could pit Serve against delivery robot startups like $42 million-funded Starship, $10 million-funded Marble and $5 million-funded Robby.
A good robo-citizen
Avoiding becoming an obstacle to seniors, children and people in wheelchairs will be critical if cities are going to allow robots like Serve to operate. In December, San Francisco nearly banned the bots by limiting companies to three robots each with only nine total in the city that are relegated to low-population areas, can’t travel more than three miles per hour and must be supervised remotely by humans.
Postmates tells me it’s been working with the SF board of supervisors, including Norman Yee, and a coalition of logistics companies to develop a regulatory framework for issuing permits allowing limited autonomous deliveries. Postmates’ permit application is under review by the City of SF. Postmates is working with SF’s Emerging Technology Working Group, local merchant associations and pedestrian safety groups to figure out how to balance innovative tools that could increase local retail sales and reduce traffic with the public’s need for right of way on the sidewalks.
There’s also the question of what happens to the labor Serve replaces. A Postmates spokesperson claims that Serve is about augmenting its fleet with super powers rather than replacing its fleet. The company does 4 million deliveries per month total in more than 550 cities, and some might not ever be within the scope of robots. But it’d be nice to see Postmates spin up some training courses or offer transitions to behind-the-scenes operations and customer service roles to deliverers that eventually feel the squeeze.
Interestingly, Kashani hinted at how Postmates might end up moving to an “Uber X, Uber Black Car” model where you’d pay more to have a human take your delivery upstairs and directly to your door, while you might pay less if you’re willing to grab your order from the Serve robot out on the curb. Essentially, Postmates Serve is poised to turn human delivery into a luxury.
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Glose raises $3.4 million for its collaborative reading app
French startup Glose just raised a $3.4 million funding round (€3 million) for its reading app on iPhone, iPad and Android. The company wants to make reading books more social.
If you’re an avid book reader, chances are you always carry a pencil with you to write some notes in the margins. Or maybe you have a tiny notebook with important quotes. But that experience hasn’t worked well with e-books.
Sure, you can highlight text on your e-reader, in the Kindle app and other e-book apps. But it’s hard to do anything with them down the road. Glose wants to leverage your phone to let you do more with the book you’re currently reading.
OneRagTime, Expon Capital, Kima Ventures and Bpifrance participated in today’s funding round, as well as business angels, such as Sébastien Breteau, Patrick Bertrand and Julien Codorniou.
Glose has its own bookstore and lets you read your own DRM-free e-books. The app then keeps you motivated with reading streaks and other gamification aspects. But my favorite feature is that you can highlight text, write annotations and share them with your friends.
When your friends read the same book six months later, they can open the annotations in the margin to see what you wrote. You can follow booklists, create private reading groups and see the progress of your friends; 600,000 people have downloaded the app.
Up next, Glose wants to release a separate service called Glose Education. This version will be tailored for universities and high schools. Teachers will be able to create reading groups, assign homework, write down annotations for the class and more. This seems like a natural use case for a social reading app.
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Revolut gets European banking license in Lithuania
Fintech startup Revolut is now officially a bank. While the startup initially expected to get its European banking license during the first half of 2018, the company has finally come out of the regulatory tunnel with a license in hand.
As expected, Revolut applied for a license through the Bank of Lithuania and is leveraging passporting rules to operate in other European countries. Users will see some changes over the coming months.
First, the company expects to roll out new features in the U.K., France, Germany and Poland. Right now, Revolut is more like an e-wallet that you can top up in many different ways. Users in those countries will get a true current account and a non-prepaid debit card in a few months.
After transferring your money to Revolut’s own infrastructure, funds will be covered up to €100,000 under the European Deposit Insurance Scheme. It should convince more users to switch to Revolut for their salaries and big sums of money.
Eventually, the startup expects to be able to offer overdrafts and loans. All fintech startups end up offering credit at some point as it’s a good way to generate revenue.
There are currently 8,000 to 10,000 people opening a Revolut account per day. Users generate $4 billion in monthly transaction volume.
It’s going to be interesting to see if current accounts will affect growth. It’s currently quite easy to open a Revolut account as users don’t need to go through a lot of KYC processes. This is going to change once the startup starts opening current accounts.
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Bowery, an indoor farming startup, raises $90 million more, including to counter a SoftBank-funded rival
When in July of last year, SoftBank’s Vision Fund led a whopping $200 million round in the Silicon Valley startup Plenty, investors behind a competing indoor farming startup across the country, New York-based Bowery, were left reeling. Just one month earlier, they’d closed on a round that brought Bowery’s total funding to $31 million. As one of Bowery’s backers told us in the immediate aftermath of Plenty’s enormous round, SoftBank’s involvement “definitely gives you pause.”
Its involvement has not, however, prompted investors to give up. On the contrary, Bowery just today announced that it has raised $90 million in fresh funding led by GV, with participation from Temasek and Almanac Ventures; the company’s Series A investors, General Catalyst and GGV Capital; and numerous of its seed investors, including First Round Capital.
It’s easy to understand investors’ unwavering interest in the company and the space, given the opportunity that Bowery, and Plenty, and hundreds of other indoor farming startups, are chasing. As Bowery outlined in a post this morning, “traditional agriculture uses 700 million pounds of pesticides annually, and fresh food takes weeks” and sometimes longer to land on the dinner table. Along the way, terrible things sometimes happen, including E.coli outbreaks, like the kind recently linked to the sale of romaine lettuce in the U.S.
Meanwhile, Bowery, which is growing crops inside two warehouses in New Jersey, can promise people in New York that their bok choy didn’t travel far at all.
Bowery also appears to be gaining the kind of momentum that VCs want to see. According to the company, it started life with five employees three years ago; today its staff has ballooned to 65 people. It has established a distribution partnership with Whole Foods. It has partnered with sweetgreen, the fast-food chain known for its farm-to-table salad bowls, and Dig Inn, a New York- and Boston-based chain of locally farm-sourced restaurants.
Unsurprisingly, the company says it plans to partner with new retail, food service and restaurant partners in the new year, too.
Bigger picture, Bowery says it plans to build a “global distributed network of farms” that are connected to each other through a kind of operating system, and that it has already begun work on the first of these outside the tri-state area.
Whether it succeeds in that vision is anyone’s guess at this point. It’s hard to know how big an impact that Bowery, or Plenty (which plans to build 300 indoor farms in or near Chinese cities) or any of its many competitors will ultimately have. But given that we’ll need to feed two billion more people by 2050 without overwhelming the planet, it’s also easy to understand from a humanitarian standpoint why investors might be keen to write these companies big checks. In fact, the rest of us should probably be rooting them on, too.
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Farfetch bets on sneakers with $250M Stadium Goods acquisition
The lines between streetwear and luxury fashion have blurred in recent years, especially as excitement around sneaker brands like Yeezy and Off-White has soared.
A marriage between a luxury fashion marketplace and a sneaker and streetwear reseller seems like a natural way to wrap up M&A in 2018. With that said, Farfetch has acquired New York-based Stadium Goods, opting to pay $250 million for the sneaker startup in a combination of cash and Farfetch stock. Headquartered in London, Farfetch went public on the New York Stock Exchange in September, pricing its shares at $20 apiece and raising $885 million in the process.
What’s more impressive is Stadium Goods’ journey to exit. The company, which sells new and deadstock products online and in a brick-and-mortar store in New York’s Soho neighborhood, was founded in 2015 by John McPheters and Jed Stiller and had only raised $4.6 million in venture capital funding from Forerunner Ventures, The Chernin Group and Mark Cuban, who is an advisor to the startup.
“There was a time not that long ago when you couldn’t wear sneakers and streetwear to nightclubs and restaurants,” McPheters, Stadium Goods’ chief executive officer, told TechCrunch. “But adoption of the stuff we are selling has continued to grow at a very large clip.”
The sale to Farfetch not only provides a major boost to the sneaker tech ecosystem, which is surprisingly much larger than those who aren’t familiar with it might have guessed, but it’s yet another successful e-commerce exit for Kirsten Green, the founding partner of Forerunner Ventures, who’s also backed Dollar Shave Club and Bonobos — direct-to-consumer retailers that sold for $1 billion and $310 million, respectively.
Stadium Goods founders John McPheters (left) and Jed Stiller
Farfetch boarded the sneaker and streetwear hype train a while ago when it incorporated brands like Nike’s Jordan, pairs of which sell for more than $1,000 on the site. The company doubled down on sneakers earlier this year when it began integrating Stadium Goods products. After noticing high-demand, Farfetch founder and CEO José Neves tells TechCrunch, they began acquisition talks with the startup. Stadium Goods will remain independent as part of the deal, with McPheters and Stiller staying on to lead the brand forward. The company’s portfolio of shoes and apparel will be fully available on Farfetch’s e-commerce platform in the coming months.
“Luxury streetwear is a significant part of our business,” Neves said. “For many years now, we have had the largest collection of Off-White, for example, on the internet … What we did not have was the resale, secondary market. It was clear this was an interesting opportunity.”
Together, Farfetch and Stadium Goods will focus on international growth. McPheters tells TechCrunch Stadium Goods already had a significant international base of customers, but a partnership with Farfetch gives them the tools to go places they’ve never been.
“In my mind, we are only just beginning,” McPheters said. “As more and more customers get comfortable with purchasing aftermarket items, we are going to continue to grow.”
The global athletic footwear industry is expected to be worth $95 billion by 2025. Meanwhile, sneaker resale is a $1 billion market and growing, fueled by a cohort of startups making it easier than ever for sneakerheads to locate rare shoes online and have them delivered to their doorsteps. That includes Stadium Goods, Flight Club, GOAT and StockX.
All four of these resellers, which ensure authentication of their products, are backed by VCs. Flight Club merged with GOAT earlier this year and together the pair raised a $60 million Series C. Before that, GOAT had brought in $30 million for its secondary market for collectible shoes from Accel, Upfront Ventures, Matrix Partners and more. StockX, for its part, has raised just over $50 million from Mark Wahlberg, Scooter Braun, Wale, Eminem, SV Angel and others.
According to Crunchbase data, VCs have funneled more than $200 million into sneaker startups in the past two years. Now, given the size of Stadium Goods’ exit, investment in the space will likely pick up significantly as other VCs hope to land an exit multiple that substantial.
Whether the reselling market will continue to expand is in question. Some have called it a bubble poised to burst, claiming it’s at its “height in popularity.” Why? Because corporate shoe brands like Nike and Adidas are keenly aware of the secondary market for their products and how they, too, can profit from it. If they decide to increase the supply of particular shoe models hot on the secondary market, they can radically disrupt the reseller economy. McPheters, however, says this doesn’t concern him.
“Brands need to strangle the demand to keep driving excitement in the space,” McPheters said. “They count on that hype to really move the needle.”
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YayPay raises $8.4 million for its accounts receivable service
Fintech startup YayPay just raised another $8.4 million for its software-as-a-service solution focused on collecting money from outstanding invoices. The company participated in TechCrunch’s Startup Battlefield several years ago.
Information Venture Partners led today’s funding round with existing investors Birchmere, QED, Fifth Third Capital, Gaingels and 500 Fintech Fund also participating.
YayPay targets large companies with an accounting department. The startup provides the perfect service to handle unpaid invoices. YayPay analyzes previous invoices and predicts when you’re supposed to get paid depending on the client and the nature of the invoice. This way, you know which account needs your attention right now.
Teams can collaborate to send reminders and make sure everyone is on the same page. You also can view information about your client directly in YayPay thanks to CRM and ERP integrations.
YayPay also eliminates a bunch of pesky tasks, such as gentle email reminders. You can create automated workflows so that your clients get an email a few days before a payment deadline. If they don’t open the email, you can receive a notification telling you to call them. Customers also can pay invoices directly using YayPay. The platform supports ACH and credit cards.
While this seems like a niche product, the company has managed to attract 480 clients that have generated more than $7 billion in accounts receivables. This represents a 500 percent user base increase over the last 12 months.
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Accenture will acquire digital ad company Adaptly
Accenture announced today that it’s reached an agreement to acquire Adaptly.
The digital advertising company launched in 2010 with self-serve tools for running ads across different social networks. In a blog post about the acquisition, co-founder and CEO Nikhil Sethi wrote that the company’s mission hasn’t changed, but it has expanded to support Google and Amazon’s ad platforms, while also introducing “several creative technology solutions that make our media buying work harder.”
While Adaptly has mostly stayed out of the headlines for the past few years, the company now has nearly 150 employees and works with advertisers like Chico’s, Mazda, Prudential and Sprint. Once the deal closes, it will become part of Accenture’s digital marketing arm, Accenture Interactive Operations.
“As new consumer experiences emerge and new digital platforms are born, our mission has always been to help brands connect with people in new and powerful ways,” Sethi said in the acquisition release, adding, “Being a part of Accenture is really exciting as, together, we’ll have an amazing opportunity to supercharge our key platform partnerships, drive more transparency and effectiveness for our clients, and enable them to deliver more relevant, high impact experiences.”
The financial terms of the acquisition were not disclosed. It looks like Adaptly hasn’t raised outside funding (or at least hasn’t announced any funding) from investors since 2012. Those investors include Valhalla Partners, Time Warner Investments, First Round Capital, Charles River Ventures and Lerer Hippeau.
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Tigera raises $30M Series B for its Kubernetes security and compliance platform
Tigera, a startup that offers security and compliance solutions for Kubernetes container deployments, today announced that it has raised a $30 million Series B round led by Insight Venture Partners. Existing investors Madrona, NEA and Wing also participated in this round.
Like everybody in the Kubernetes ecosystem, Tigera is exhibiting at KubeCon this week, so I caught up with the team to talk about the state of the company and its plans for this new raise.
“We are in a very exciting position,” Tigera president and CEO Ratan Tipirneni told me. “All the four public cloud players [AWS, Microsoft Azure, Google Cloud and IBM Cloud] have adopted us for their public Kubernetes service. The large Kubernetes distros like Red Hat and Docker are using us.” In addition, the team has signed up other enterprises, often in the healthcare and financial industry, and SaaS players (all of which it isn’t allowed to name) that use its service directly.
The company says that it didn’t need to raise right now. “We didn’t need the money right now, but we had a lot of incoming interest,” Tipirneni said. The company will use the funding to expand its engineering, marketing and customer success teams. In total, it plans to quadruple its sales force. In addition, it plans to set up a large office in Vancouver, Canada, mostly because of the availability of talent there.
In the legacy IT world, security and compliance solutions could rely on the knowledge that the underlying infrastructure was relatively stable. Now, though, with the advent of containers and DevOps, workloads are highly dynamic, but that also makes the challenge of securing them and ensuring compliance with regulations like HIPAA or standards like PCI more complex, too. The promise of Tigera’s solution is that it allows enterprises to ensure compliance by using a zero-trust model that authorizes each service on the network, encrypts all the traffic and enforces the policies the admins have set for their company and needs. All of this data is logged in detail and, if necessary, enterprises can pull it for incident management or forensic analysis. 
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AI-powered knowledge-sharing platform Guru raises $25 million Series B
Guru, the enterprise-focused information-sharing platform, has today announced the close of a $25 million Series B funding led by Thrive Capital, with participation from existing investors Emergence Capital, FirstMark Capital, Slack Fund and Michael Dell’s MSD Capital.
Guru came on to the scene in 2013 with the premise that organizations are not so great at building out informational databases, nor are they very good at using them. So Guru built a Chrome extension that simply sits as a layer on employees’ computers and surfaces the right information whenever asked.
Specifically, this comes in handy for customer service agents and sales people who need to answer questions from people outside of the organization quickly and accurately.
This summer, Guru revamped the platform to incorporate a new feature set called AI Suggest. The feature simply auto-surfaces relevant information as the employee goes about their business, with no searches or inquiries necessary. The company also unveiled two versions of the feature, text and voice, so that it is still useful when employees are on the phone.
Companies that are sensitive about their information being shared with Guru can customize the level of access given to Guru, including or excluding certain third-party integrations etc., as well as how long information is stored on Guru. No personally identifying information about end-customers is ever stored on the Guru platform.
Over the past couple of years, Guru has brought on big-name clients, including BuzzFeed, Glossier, Intercom and Thumbtack.
Guru has signed on 200 new clients since the launch of AI Suggest in July, with a total of around 800 companies on the platform, representing thousands of users.
For now, the company is hyper-focused on growth.
“We are not profitable yet,” said co-founder and CEO Rick Nucci .” But we’re intentionally focused on growth. What prompted us to raise this round right now is to continue to execute on the momentum of the business.”
Guru has now raised a total of $27.5 million.
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