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Zolve raises $15 million for its cross-border neobank aimed at global citizens – TechCrunch

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On Wednesday, he announced Zolve, a neobanking platform for individuals moving from India to the U.S. (or the other way around).

The startup works with banks in the U.S. and India to provide consumers access to financial products seamlessly — without paying any premium or coughing up any security deposit.

In an interview with TechCrunch, Raghunandan said the startup underwrites the risks, which has enabled banks in foreign countries to extend their services to Zolve customers. “Consumers can open an account with us and access all banking services as if they are banking with their national bank,” he said.

As part of the announcement, Raghunandan said two-month-old Zolve has raised $15 million in a seed financing round led by Accel and Lightspeed. Blume Ventures and several high-profile angel investors, including Kunal Shah (founder of Cred), Ashish Gupta (formerly the MD of Helion), Greg Kidd (known for his investments in Twitter and Ripple), Rahul Mehta (managing partner at DST Global) and Rahul Kishore (senior managing director of Coatue Capital), also participated in the round. So did Founder Collective (which has backed Airtable and Uber), in what is its first investment in an Indian startup.

“Individuals with financial identities in multiple geographies need seamless global financial solutions and we believe the team’s strong identification with the problem will enable them to deliver compelling and innovative financial experiences,” said Bejul Somaia, Lightspeed India Partners, in a statement.

Before starting Zolve, Raghunandan founded TaxiForSure, a ride-hailing firm, that he later sold to Ola for $200 million. Image Credits: Zolve

Raghunandan acknowledged that a handful of other startups are also attempting to solve this challenge, but he said other firms are not making use of a consumer’s credit history from their origin nation. “We are the only one who is looking at this problem in a completely different light. We are not trying to solve the problem at the destination country where consumers face the challenges. We are finding the solution in the home country itself, where the consumers already have a reputation and credit history,” he said.

Once a customer has access to a credit card and other financial services in the new nation, they can quickly broaden their local credit history, something that otherwise takes years, he said.

“The global citizen community is largely underserved in terms of access to financial services and we believe that there is a huge market opportunity for Zolve. Raghu has a proven track record as a founder and we are delighted to partner with him again, on his latest venture. The team’s passion and commitment are commendable and we are positive that Zolve will create tremendous value for this community,” said Anand Daniel, partner at Accel, in a statement.

Headquartered in San Francisco and Bangalore, Zolve offers a range of compelling features even for those who don’t plan to visit a foreign land. If you’re in India, for instance, you can use Zolve to buy shares of companies listed at U.S. exchanges. You can also buy bitcoin and other cryptocurrency from exchanges based in the U.S. or Europe, said Raghunandan.

The startup, which has already amassed more than 5,000 customers, has formed revenue-sharing arrangements with its banking partners. Raghunandan said since Zolve currently onboards customers in India and generates much of its revenue from banking partners in the U.S., it’s already operating on a profitable model.



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Vienna’s GoStudent raises $244M at a $1.7B valuation for its online tutor marketplace – TechCrunch

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Online teaching came into the spotlight for many students and parents in the last year, and today one of the companies that saw a big lift during that rush of activity is announcing a big round of funding to carry it into what has emerged as a more permanent change of habits for many learners.

GoStudent, a marketplace where K-12 students (and their parents) can find and engage with one-to-one video-based tutors in a variety of subjects, has raised €205 million ($244 million), in a Series C round that values the company at €1.4 billion ($1.7 billion).

The funding is coming at a time of strong growth. The Vienna, Austria-based startup is now live in 18 countries and sees some 400,000 sessions booked monthly on its platform, up 700% year-on-year (and up 15% month-on-month). It says it is on track to double employees to 1,000 and reach 10,000 tutors by the end of this year. The plan is to expand to more countries — Mexico and Canada are next on the list — and to continue growing its lists of tutors and subjects covered.

“We now plan to be even more aggressive geographically and plan to invest more into the brand,” Felix Ohswald, cofounder and CEO, told TechCrunch.

(As a point of comparison, when it last fundraised in March, GoStudent was booking a mere 250,000 tutoring sessions over its platform.)

DST Global is leading the round, with SoftBank (via its Vision Fund 2), Tencent, Dragoneer and previous backers Coatue, Left Lane Capital and DN Capital also participating. Vienna, Austria-based GoStudent has raised €291 million to date, including a €70 million round only this past March and €13.3 million in a Series A this past November.

The rapid pace of funding and GoStudent’s rising valuation — this investment makes it the highest-valued edtech startup in Europe, the company said — comes amid a streak of funding rounds for edtech companies.

And that may be no surprise: online and other digital tools in the last year especially felt more relevant (and in many cases were used more) than ever before due to social distancing during the pandemic. (Other recent deals have included funding for Byju’s, Kahoot, Formative, Engageli, Lingoda, Brainly, ClassDojo, Newsela, and Yuanfudao, among many others.)

But in the case of GoStudent, it’s also because the startup itself is also doing an A+ job in scaling its concept.

The company has been around since 2016 — when it started out initially providing a network for people to help each other answer questions (similar to Brainly), as well as connect with tutors, and for tutors to organize classes — but it was only about 2.5 years ago that GoStudent started to focus more squarely on one-to-one tutoring.

GoStudent provides a fully-integrated service, which lets students and their parents select from a range of topics that are typically taught in schools — currently some 30 subjects, including sciences, math, computing, languages, history, business and more — that they can be tutored on generally or specifically with the aim of taking an exam.

Tutoring comes from people who are tested, vetted and interviewed by GoStudent before they can join the platform; and before engaging tutors, parents and students interview an individual tutor and go through a practice lesson as part of that.

Learning plans are then organized according to students’ schedules and what they are setting out to do (they can send over their homework, or chapters they’re studying in school or even a curriculum outline); and the classes, assessments and payments (based on packages booked), are all handled over the platform, too.

Although there are a number of ways of learning a subject over the internet today — and specifically a number of online-only direct tutoring platforms in the market now (including Brainly, Yuanfudao, and others) — Ohswald said that by and large GoStudent’s biggest competition is the bigger in-person business of teaching, and of students and tutors connecting with each other through word of mouth — the “offline shadow market of tutors,” as he calls it.

All the same, while there are tech tools involved in provisioning and running lessons, at its heart GoStudent is also still about humans connecting to help each other, rather than humans connecting with computer programs.

Interestingly, its founders believe that the Covid-19 pandemic effect was not uniformly positive for its business.

“The pandemic had mixed effects,” Ohswald said. “On the one hand there was a natural demand from kids and parents. But with the schools closed, there was less pressure, less exams, less demand for after-school study. That aspect had a negative effect. But more broadly, there was a BIG boost for digital education. So the mindset of the parent and family drastically shifted.”

He noted that many families turned to tutoring to help “support the kids at home, to help them to stop being overwhelmed.” (And I would add, especially in the first part of the lockdown last year when schools were scrambling a little to regroup and teach online, that as a parent, we found it a relief to have at least some consistency with private tutors online at that time.)

What that means, essentially, is that while GoStudent did well in the last year, the company does not want to tie its growth to a specific set of pandemic circumstances that may well become less of an issue in the year ahead.

Indeed, for better or worse, there are bigger factors at play that predate the pandemic. Increasing pressure on students to perform their best competing against others, a continuing focus on testing, and a general level of academic ambition; but also a much easier and cheaper way of finding and connecting with people who can help students feel more supported in their efforts: all of these are also playing a role.

“GoStudent is one of the fastest growing companies that we have ever backed. The company has grown 800% in terms of revenue and 70x in terms of value since 2020 and we are convinced that this is just the beginning,” Nenad Marovac, founder and managing partner, DN Capital, told TechCrunch. “We believe that GoStudent can become one of the top digital schools in the world. By leveraging technology GoStudent democratizes quality education to all at affordable prices.”



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Fintech veteran Jitendra Gupta is ready for his new inning — now he is going after banks in India – TechCrunch

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For most people in India, having to engage with banks doesn’t instill a sense of joy. Banks in the South Asian market are notorious for making unannounced spam calls to upsell customers loans and credit cards, even when they have been explicitly asked not to do so.

Moreover, when a customer does reach out to a bank with a query, it can take forever to get the job done. Take ICICI Bank, India’s third largest bank and until recently my only banking partner for over six years, for an example.

It is now in its third month in figuring out who exactly in its relationship with Amazon is supposed to re-issue me a credit card. I have moved on with my life, and it looks like they did, too, likely before they even looked at my query.

Small and medium-sized businesses aren’t a big fan of banks, either. If you operate an early-stage startup, it’s anyone’s guess if you will ever be able to convince a bank to issue you a corporate account. So of course, startups — Razorpay and Open — took it upon themselves to fix this experience.

For consumers, too, in recent years, scores of startups have arrived on the scene to improve this banking experience. Whether you are a teenager, or just out of college, or a working professional, or don’t have a credit score, there are firms that can get you a credit card and loan.

But even these services have a ceiling limit of some sort. And customers aren’t loyal to any startup.

“A customer’s relationship is always with the entity where they park their savings deposit,” said Jitendra Gupta, a high-profile entrepreneur who has spent a decade in the fintech world. Since these customers are not parking their money with fintech, “the startups have been unable to disrupt the bank. That’s the hard reality.”

So what’s the alternative? Gupta, who co-founded CitrusPay (sold to Naspers’ PayU) and served as managing director of PayU, has been thinking about these challenges for more than two years.

“If you really want to change the banking industry, you cannot operate from the side. You have to fight from the centre, where they deposit their money. It’s a very time-consuming process and requires a lot of initial capital and experience with banks,” he told TechCrunch in an interview.

After more than a year and a half of raising about $24 million — from Sequoia Capital India, 3one4 Capital, Amrish Rau, Kunal Shah, Kunal Bahl, Tanglin Venture Partners, Rainmatter and others — Gupta is ready to launch what he believes will address a lot of the issues individuals face with their banks.

His new startup, called Jupiter, wants to bring “delight” to the banking experience, and it will launch in India on Thursday.

“We believe that a bank account should be a smart account, where it gives you insight, shares personalized tips and guides you through attaining some financial discipline,” he said.

A snapshot of the reach of banks and fintech startups in India. Data: CIBIL, Statista, BofA Global Research. Image: BofA

To be sure, Jupiter, too, will offer loans and other financial services to customers. But instead of making irrelevant calls to customers, it will assess which of its customers are running short on money and give the option to take a credit line from its app itself, he said. “The upsell doesn’t need to happen by way of spam. It needs to happen by way of contextualization and personalization.”

“Jupiter has been built in a deep integration with the underlying bank, allowing the consumer to have a frictionless experience for all their banking needs,” said Amrish Rau, chief executive of Pine Labs, co-founder of CitrusPay and longtime friend of Gupta.

The startup, which employs 115 people, has developed a number of products for customers joining on day one. The products include the ability to buy now and pay later on UPI, a feature first offered in the market by Jupiter, and a mutual fund portfolio analyzer. A debit card, in-app chat with a customer service agent, expense categorisation, finding the right card, determining the existing health insurance coverage, and more are ready to ship, the startup said.

Jupiter is currently working on providing zero mark-up on forex transactions, and frictionless two-factor authentication. The startup has published a public Trello page where it has outlined the features it is working on and when it expects to ship them, as well as features suggested by its beta-testing customers. “I want to establish full transparency in what we are working on to build trust with customers,” said Gupta.

Jupiter will have its own customer relationship team that will engage with the startup’s users. The startup, which last month opened a waiting list for customers to sign up, had amassed more than 25,000 applications as of two weeks ago.

Even Jupiter, which one day wishes to disrupt the banking sector, currently has to partner with banks. Its partners are Federal Bank and Axis Bank.

I asked Gupta about the excitement his investors see in Jupiter. “Everyone believes, as you see with fintech giants such as Nubank globally, that we will become a full bank,” he said.

But for the time being, Gupta said he is not looking to partner with more banks. “I don’t want Jupiter to attract customers because they want to bank with Federal or Axis. I want them to come to Jupiter because they want to bank with Jupiter,” he said.

In the next 12 months, the startup hopes to serve more than 1 million customers.



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What does Red Hat’s sale to IBM tell us about Couchbase’s valuation? – TechCrunch

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The IPO rush of 2021 continued this week with a fresh filing from NoSQL provider Couchbase. The company raised hundreds of millions while private, making its impending debut an important moment for a number of private investors, including venture capitalists.

According to PitchBook data, Couchbase was last valued at a post-money valuation of $580 million when it raised $105 million in May 2020. The company — despite its expansive fundraising history — is not a unicorn heading into its debut to the best of our knowledge.

We’d like to uncover whether it will be one when it prices and starts to trade, so we dug into Couchbase’s business model and its financial performance, hoping to better understand the company and its market comps.

The Couchbase S-1

The Couchbase S-1 filing details a company that sells database tech. More specifically, Couchbase offers customers database technology that includes what NoSQL can offer (“schema flexibility,” in the company’s phrasing), as well as the ability to ask questions of their data with SQL queries.

Couchbase’s software can be deployed on clouds, including public clouds, in hybrid environments, and even on-prem setups. The company sells to large companies, attracting 541 customers by the end of its fiscal 2021 that generated $107.8 million in annual recurring revenue, or ARR, by the close of last year.

Couchbase breaks its revenue into two main buckets. The first, subscription, includes software license income and what the company calls “support and other” revenues, which it defines as “post-contract support,” or PCS, which is a package of offerings, including “support, bug fixes and the right to receive unspecified software updates and upgrades” for the length of the contract.

The company’s second revenue bucket is services, which is self-explanatory and lower-margin than its subscription products.



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Maybe neobanks will break even after all – TechCrunch

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The Exchange is back after its brief hiatus. Anna and I have some really neat stuff planned, so stick with us every morning this week. — Alex

Building a consumer-facing fintech company is expensive. And if you want to build one in a sector crowded by both incumbent companies and richly funded startups, it can be super expensive.

That was the lesson we learned in late 2020 by examining operating results from a number of neobanks.

Neobanks are essentially software layers atop banking infrastructure, offering consumers digital-first, mobile-friendly and often lower-fee banking services. The push to rethink consumer banking is a global effort, with neobanks cropping up in essentially every market you can think of. Private investors have shown up in droves to fund competing neobanks because they have the potential to secure users — customers — that generate revenues for long periods of time.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


Investors have proven more than willing to fund huge investments in growth and product at many neobanks, leading to steeply negative operating results at the unicorns. In short, while American consumer fintech Chime has disclosed positive EBITDA — an adjusted profitability metric — many neobanks that we’ve seen numbers from have demonstrated a stark inability to paint a path to profitability.

That could be changing.

Recent results from Revolut that TechCrunch covered earlier this morning show that the company had a deeply unprofitable 2020. But if we dig into its quarterly results, there’s good news to be found. Neobanks could be maturing into their cost structure at last.

So today we’ll parse the key Revolut financial results and look at what we can dig up from Starling and Monzo. Perhaps the somewhat good financial news from Revolut is not merely to be found at just one neobank?

Revolut’s 2020

Our own Romain Dillet has a broad look at Revolut’s business here, if you would like a wider lens. We only care about its raw financial results at the moment.

Here are the big numbers:

  • 57% revenue growth from £166 million in 2019 to £261 million in 2020
  • Gross profit growth of £123 million in 2020, up 215% from 2019
  • Gross margin of 49% in 2020, what Revolut described as nearly a doubling
  • 2020 operating loss of £122 million from £98 million in 2019
  • Total loss of £168 million in 2020, up from £107 million in 2019

The gist of these figures is that the company’s revenue growth was solid, but improving gross margins allowed its gross profit to spike in 2020.



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Vietnamese financial services app MFast gets $1.5M pre-Series A led by Do Ventures – TechCrunch

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MFast founders Phan Thanh Long and Phan Thanh Vinh

MFast, a mobile app that lets Vietnamese users in remote areas access financial services, announced today it has raised a $1.5 million pre-Series A. The round was led by Do Ventures, with participation from JAFCO Asia. 

Launched in 2019 by fintech company Digipay, MFast says it has been used by 600,000 people to date. It partners with financial institutions who provide services like loans and insurance, and says it has been used to distribute more than 50 billion VND (about $2.2 million USD) worth of insurance products so far, and 5,000 billion (about $217 million) in financial products.. The company told TechCrunch that it currently has 11 financial partners.

MFast’s consumer credit partners include Mirae Asset, CIMB, Mcredit and Easy Credit, and its insurance partners include PVI, PTI and BSH. It claims to have a network of more than 350,000 advisors, who offers their services through the app.

The company pre-qualifies applicants for credit services using predictive machine learning algorithms to identify applicants with high risks of defaulting on their loans, while its insurance customers are matched with plans using a data-driven engine.

The majority, or about 75% to 80% of MFast’s users are in remote provinces or rural areas, which the company says often limits their access to banking and credit-related services. 

The funding will be used to expand MFast to more cities and provinces in Vietnam, develop its technology and partner with more institutions. MFast also plans to enter other markets in the future. 



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Google’s first retail location opened today in NYC – TechCrunch

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To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Welcome back to the Daily Crunch for Thursday, June 17. Thank you to Walter Thompson and the Extra Crunch staff for taking the reins I took from Alex. I was released from jury duty, so I’ll be seeing you through the remainder of the week, and we’ll be back to regularly scheduled Alex in no time.

But before we get on with the show, I want to let you know that Duolingo’s director of engineering will join us at our City Spotlight: Pittsburgh event in just two weeks. Karin Tsai joined the company in 2012 as one of its first engineers, and saw the company grow from a scrappy startup into a 400-person global business.

Henry

The TechCrunch Top 3

Google recently discovered a bug in its Android app that could have allowed an attacker to quietly steal personal data from a device. The company caught it, plugged it and confirmed that it had no evidence that anyone’s data was compromised.

Senator Kirsten Gillibrand (D-NY) has revived a bill that would establish a new U.S. federal agency to shield Americans from the invasive practices of tech companies operating in their own backyard.

The AI-powered defense company founded by Oculus founder and seller-to-Facebook Palmer Luckey has landed a $450 million round of investment that values the startup at $4.6 billion just four years in.

Startups and VC

Unit has raised $51 million in a Series B round to further its goal of making it possible for non-fintech and fintech companies alike to build banking products “in minutes.”

Disrupting job recruitment disruption: Beamery raised $138 million to continue building out more technology and shake up online job recruitment as we know it. Ingrid reports today that the company calls itself a “talent operating system,” describing that thusly: “A way to manage sourcing, hiring and retaining of people, plus analyzing the bigger talent picture for an organization.”

Nylas, which created an effective way to integrate email, calendars and other tools into other apps using APIs, is announcing a big round of funding to expand its business — $120 million big. 

Data analytics for HR is what eqtble is offering, and it just raised a $2.7 million seed round to do it. There is a lot of data to capture when it comes to a company’s staff, and eqtble wants to help you snag it.

The industrial side of cybersecurity: Claroty, a late-stage company that protects big companies, including Pfizer (which it helped to secure its COVID-19 vaccine supply chain — raised $140 million.

5 tips for brands that want to succeed in the new era of influencer marketing

A small startup with the right message can connect with established and emerging stars on TikTok, Instagram and YouTube who will promote your company’s products and services — as long as they understand the influencer marketplace.

Creators have plenty of brands and revenue channels to choose from, but growth marketers who understand how to court influencers will make inroads no matter how small their budget. Although brand partnerships are still the top source of revenue for creators, many of them are starting to diversify.

If you’re in charge of marketing at an early-stage startup, this post explains how to connect with an influencer who authentically resonates with your brand and covers the basics of setting up a revenue-share structure that works for everyone.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

If you live in New York, you can now make your way to Google’s new store, which opened today in Chelsea. The giant’s new brick-and-mortar presence joins the likes of Apple, Microsoft, Samsung and Amazon so people can peruse its hardware offerings, as well as those of selected not-Google offerings.

It’s an advertising world, and we’re just living in it: Instagram today announced the global launch of ads in Reels, its TikTok rival. Sarah Perez says in her reporting that the ads will be up to 30 seconds in length and vertical in format. Like Reels, the new ads will loop, and people will be able to like, comment on and save them, the same as other Reels videos.

Google this morning announced a line of new virtual machines built on AMD’s third-gen EPYC processor. The new line, called Tau, is x86-compatible and offers a 42% price-performance boost over standard VMs. Google, of course, claims the Tau family “leapfrogs” existing cloud VMs.

Amazon this week announced its Appstore Small Business Accelerator Program, which will reduce the commissions Amazon takes on app developer revenues for qualifying smaller businesses. Previously, Amazon’s Appstore took a 30% cut of revenue, including that from in-app purchases. Now, it will take only 20% from developers who earned up to $1 million in the prior calendar year. The program will additionally offer AWS credits.

E3 2021, virtual style, wrapped this week, and, according to Brian Heater, Microsoft won the week with the announcement of 30 games. Nintendo followed with added Switch software.

TechCrunch Experts: Growth Marketing

Illustration montage based on education and knowledge in blue

Image Credits: SEAN GLADWELL (opens in a new window) / Getty Images

TechCrunch is building a shortlist of the top growth marketers in tech. If you’re a founder, we’d love to hear who you’ve worked with.

Fill out the survey here.

If you’re curious about how these surveys are shaping our coverage, check out this interview Extra Crunch Managing Editor Eric Eldon did with Susan Su, head of Portfolio at Sound Ventures, about growth marketing in 2021.



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Crypto finance startup Amber Group raises $100M at $1B valuation – TechCrunch

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More mainstream venture capital firms are jumping on the crypto bandwagon as investors increasingly consider bitcoin an investable asset, despite the recent massive price drops of a few major cryptocurrencies. Amber Group, a Hong Kong-based cryptocurrency trading startup, said on Monday it has raised $100 million in a Series B funding round at a pre-money valuation of $1 billion.

The latest valuation is ten times that of the company’s Series A closed in 2019, a $28 million round that counted Coinbase Ventures as one of its investors. Also notably, Amber’s Series B financing was bankrolled by a list of high-profile financial and VC firms, including China Renaissance, which led the round, and Tiger Brokers, Tiger Global Management, Arena Holdings, Tru Arrow Partners, Sky9 Capital, DCM Ventures, and Gobi Partners.

Its past investors Pantera Capital, Coinbase Ventures, and Blockchain.com also participated in the round.

In May, Babel Finance, another crypto asset manager based out of Hong Kong, secured $40 million in funding from a number of big-name institutional investors, including Amber’s investor Tiger Global.

Founded by a group of former investment bankers in their twenties, Amber initially set out to apply machine learning algorithms to quantitative trading but pivoted in 2017 to crypto when the team saw spikes in virtual currency’s trading volumes. The startup now serves both institutional and individual investors, offering them algorithmic trading, electronic market-making, high-frequency trading, OTC trading, borrowing and lending, derivatives, among other products.

The firm launched its mobile app in the third quarter of 2020, widening its scope from institutional clients to retail consumers. It said the trading app has so far accumulated over 100,000 registered users.

Amber has been profitable since its inception, according to its co-founder and CEO Michael Wu, with annualized revenues of $500 million based on figures from January to April 2021.

The startup has seen “record months over the past quarter across both client flow and on-exchange market-making volumes,” said Wu, and it now accounts for “2-3% of total trading volumes in major spot and derivative markets.” Its cumulative trading volumes have doubled from $250 billion since the beginning of the year to over $500 billion. Altogether, it manages around $1.5 billion in trading capital that varies based on BTC and ETH prices.

Amber has over 330 employees worldwide across Hong Kong, Taipei, Seoul, and Vancouver. The proceeds from its Series B will go towards global expansion.



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