Crypto asset manager Babel raises $40M from Tiger Global, Bertelsmann and others

Three years after its inception, crypto financial service provider Babel Finance is racking up fundings and partnerships from major institutional investors. The startup said Monday that it has closed a $40 million Series A round, with lead investors including Zoo Capital, Sequoia Capital China, Dragonfly Capital, Bertelsmann and its Asian fund BAI Capital, and Tiger Global Management.

For years, traditional investors were reluctant to join the cryptocurrency fray. But in 2020, Babel noticed that many institutions and high net worth individuals began to consider crypto assets as an investment class.

Babel, with offices in Hong Kong, Beijing, and Singapore, wanted to capture the window of opportunity and be one of the earliest to help allocate crypto assets in investors’ portfolios. But first, it needed to win investors’ trust. One solution is to have reputable private equity and venture capital firms on its cap table.

“It’s more of a brand boost so we can attract more institutions and build up credibility,” Yulong Liu, Babel’s head of global partnerships, said of the financing which is a strategic round as Babel had “reached profitability” and “wasn’t actively looking for funding.”

To vie for institutional customers and wealthy individuals, Babel plans to spend its fresh proceeds on product development, compliance and talent acquisition, seeking especially banking professionals and lawyers to work on regulatory requirements. It currently has a headcount of 55 employees.

Mainstream investors are jumping into the crypto scene partly because many see bitcoin as a way to hedge against “solvency and credibility risks” amid global economic uncertainties caused by Covid-19, said Liu. “Bitcoin is not something controlled by the government.”

The other trigger, Liu explained, was what shock the industry in February: Elon Musk bought $1.5 billion in bitcoin and declared Tesla would begin accepting the digital token as payments. That sparked a massive rally around bitcoin, sending its price to over $40,000.

Babel’s evolution has been in line with the trajectory of the industry. In its early days, the startup was a “crypto-native” company offering deposit and loan products to crypto miners and traders. These days, it also runs a suite of asset management products and services tailored to enterprise clients around the world. It’s applying for relevant financial licenses in North America and Asia.

As of February, Babel’s crypto lending business had reached an outstanding balance of $2 billion in equivalent cryptocurrency, the firm says. It has served more than 500 institutional clients and sees about $8 billion in direct trading volume each month. 80% of its revenues are currently derived from institutions. The goal is to manage one million bitcoins within four years.

Google begins surfacing vaccine centers, hospital beds, oxygen info in India

Google, which reaches more than half a billion people in India, is turning its services into tools to help the world’s second largest internet market fight the pandemic.

Google said on Monday it has rolled out a range of updates to its Search, Maps, YouTube, and Google Pay services in India to display and boost authoritative and credible information about the coronavirus to help people in the South Asian nation find vaccination centers and other resources to navigate the crisis.

Google Search, which has been offering updates on the virus for more than a year, now also displays information panels with vaccine registration details in India and highlights the official Indian government website for the vaccine at the top.

Search and Maps that have been showing 2,500 testing centers in India now similarly also show locations of over 23,000 vaccination centers across the country in English and eight Indian languages. The company said it is working with India’s Ministry of Health and Family Welfare to source this information.

Google, which identifies India as its biggest market by users, said it is also testing a Q&A function in Google Maps in India to enable people to ask about and share local information on the availability of beds and medical oxygen in select locations in the country.

The new features rollout comes as India reports over 350,000 infections and over 3,500 fatalities everyday. The nation’s healthcare infrastructure is struggling to serve patients, having largely run out of beds and medical supplies.

In recent weeks, scores of firms, startups, entrepreneurs and investors have stepped up to fill this gap. And Twitter, Facebook, and WhatsApp have become the real-time helpline as people exchange leads with one another.

Google said it is also using its various channels to help extend the reach of health information campaigns in India. This “includes the ‘Get the Facts’ around vaccines campaign, to encourage people to focus on authoritative information and content for vaccines. We’re also surfacing important safety messages through promotions on the Google homepage, Doodles and reminders within our apps and services,” it wrote in a blog post.

On YouTube, Google has curated a set of playlists with videos that offer authoritative information about the vaccine, the spread of the virus, and facts from experts. The company said it has also rolled out a COVID Aid campaign on Google Pay to enable users to donate to non-profit organizations such as GiveIndia, Charities Aid Foundation, Goonj, Save the Children, Seeds, UNICEF India (National NGOs) and United Way.

The company said a similar campaign to support several other foundations has raised over $4.6 million.

“As India battles this devastating wave, we’ll keep doing all we can to support the selfless individuals and committed organizations on the front lines of the response. There’s a long way to go—but standing together in solidarity, working together with determination, we can and will turn the tide,” read a blog post signed by Covid Response team at Google India.

Telkomsel invests an additional $300 million in Gojek

Telkomsel, a unit of Indonesia’s largest telecom operator Telkom, has invested an additional $300 million in ride-hailing and payments firm Gojek, the two firms said Monday, just months after the network provider wrote a $150 million check to the Southeast Asian firm.

The announcement comes amid Gojek working to seal a proposed merger with e-commerce platform Tokopedia. The $18 billion deal would result in a new entity called GoTo, according to media reports. Telkomsel’s investment today likely makes it one of GoTo’s top eight investors.

Gojek — which has raised over $3.45 billion to date from high-profile investors including Google, Facebook, PayPal, Visa, and Tencent — and Telkomsel said their strategic partnership will “open up new synergies as the two companies scale up digital services and deliver new, innovative solutions.”

The two firms have maintained a deal since 2018 to subsidize the cost of mobile data consumed by the ride-hailing firm’s driver partners.

With more than 170 million subscribers, Telkomsel is the largest telecom operator in Indonesia. In addition to ride-hailing, Gojek has expanded to several additional businesses, including digital payments and food delivery in Indonesia.

Today’s news follows a $150 million investment Telkomsel made in Gojek in November last year. The two firms have since integrated several aspects of their services to accelerate digitization of micro, small and medium enterprises and bringing greater cost savings for driver partners.

Some of these include integration of Telkomsel MyAds with GoBiz, which enables Gojek’s MSME partners to use MyAds to efficiently expand their outreach to Telkomsel users, and easy onboarding for Gojek MSME partners to become Telkomsel reseller partners through the DigiPOS Aja! Application.

The two firms also co-market gaming services through Telkomsel’s Dunia Games and GoPay in collaboration with Tencent, providing greater value for PUBGM users, they said.

“Telkomsel is optimistic that this latest investment will open more opportunities for society to access advanced digital technology-based innovations developed by homegrown companies,” said Telkomsel chief executive Setyanto Hantoro in a statement.

Walmart’s Flipkart to cover insurance for all sellers in India and waive additional fees

Walmart-owned Flipkart is exempting storage and cancellation fees for sellers on its marketplace and also providing them with insurance coverage as the top e-commerce platform in India looks to maintain cordial relationships with more than 300,000 sellers who are facing severe disruption amid an unprecedented rise in the spread of coronavirus infections in the South Asian nation.

The Bangalore-headquartered firm said Friday evening that it is exempting storage fees to sellers who use the company’s fulfilment centres, and also waiving off the cancellation fees until the end of the month. (Several Indian states, as they did during the first wave of the virus, have imposed restrictions on sale and delivery of non-essential items.)

Flipkart will bear 100% premium of COVID insurance to all sellers that transact on the platform, covering any hospitalization and consultation fees between 50,000 Indian rupees ($685) to 300,000 Indian rupees ($4095).

The news today comes a week after Amazon, Flipkart’s chief rival in India, announced it was waiving 50% of the referral fee sellers are required to pay the e-commerce firm for this month, though not all sellers are qualified to avail this benefit. (The company said earlier this week that it was also postponing Prime Day in India and Canada due to the growing cases of the infection.)

Flipkart said it is also making it easier for sellers to access working capital from the firm without any incremental cost, though it did not specify the steps it had made.

It is also extending the window for the Seller Protection Fund to 30 days (from 14) to make claims on returned products. Flipkart said it will also ease its policies and performance metrics to ensure that they are not impacted by state-led lockdowns.

Flipkart, which as of last year was working to go public this year, said it has partnered with Vriddhi, Walmart’s Supplier Development Program in India, to organize webinars for small businesses to share best practices to ensure safety of workforce and provide insights to stay afloat amid the crisis.

“Through these testing times it is our constant effort to support our seller partners who face immense operational challenges as a result of the pandemic. As a democratic marketplace, we want to ensure that our lakhs [hundreds of thousands] of seller partners are able to continue operations and keep the economic engine running,” said Jagjeet Harode, senior director and head of Marketplace at Flipkart, in a statement.

“With them and their family’s financial and health safety in mind, we have rolled out these initiatives that will bring them the much-needed respite to keep their businesses active.”

India has been reporting over 400,00 daily infections this week, more than any other nation, as the world’s second-most populated nation struggles to contain the second wave of the virus. Scores of firms, startups, investors and people alike are uniting to help the nation fight the virus, which has severely impacted the healthcare facilities.

GajiGesa, a fintech focused on Indonesian workers, adds strategic investors and launches new app for micro-SMEs

GajiGesa, a fintech startup that provides earned wage access (EWA) and other services for workers in Indonesia, has added strategic investors to help it launch new services and expand its user base. Its new backers include OCBC NISP Ventura, the venture capital arm of one of Indonesia’s largest banks, and the founders of grab-and-go coffee chain Kopi Kenangan. GajiGesa also recently expanded beyond the enterprise space with a new employee management system for SMEs and micro-SMEs. Called GajiTim, the app is aimed at businesses with between five to 100 workers and has gained more than 50,000 active users since it was launched in mid-March.

The amount of GajiGesa’s latest funding was undisclosed. The startup, launched last year by husband-and-wife team Vidit Agrawal and Martyna Malinowska, announced a $2.5 million seed round led by Defy.vc and Quest Ventures in February. Over the last quarter, GajiGesa’s enterprise customer base has doubled to more than 60 companies, representing tens of thousands of workers.

GajiGesa is part of a new wave of startups focused on digitizing the 60 million small businesses in Indonesia. Others include digital bookkeeping apps like BukuWarung and BukuKas for very small businesses including neighborhood stores; Moka and Jurnal for larger companies; and CrediBook, which focuses on B2B businesses.

Before starting GajiGesa, Agrawal’s experience included serving as Uber’s first employee in Asia, while Malinowska was former product lead at Standard Chartered’s SC Ventures and alternative credit-scoring platform LenddoEFL. They created GajiGesa to give workers an alternative to payday and other high-interest lenders by allowing them to access their earned wages immediately, instead of waiting for semi-monthly or monthly paychecks. (Other companies that offer similar services around the world include Square, London-based Wagestream and Gusto). Based on a recent survey, GajiGesa said more than 75% of workers at companies that use its EWA feature have stopped using informal lenders for short-term needs.

The founders of Kopi Kenangan, the grab-and-go coffee chain backed by investors like Sequoia Capital India, Alpha JWC and Horizons Ventures, have become prolific angel investors in other startups, and their network will help GajiGesa onboard more employers, Agrawal told TechCrunch. Its strategic partnership with Bank OCBC NISP, meanwhile, will help it launch more services.

GajiGesa co-founders Vidit Agrawal and Martyna Malinowska

GajiGesa co-founders Vidit Agrawal and Martyna Malinowska

“One thing we are realizing is that a lot of employees who use the earned wage aspect of GajiGesa are expecting more kinds of products, either a loan product or an insurance product, and that’s where an opportunity arises to partner with a bank,” Agrawal told TechCrunch. About two-thirds of Indonesia’s population is “unbanked,” meaning they don’t have a bank account, so this also gives Bank OCBC NISP a chance to onboard new customers.

“Having a bank as a partner allows us to structure the right interest rate, the right size of products and create a larger impact,” said Malinowska.

GajiGesa does not charge interest rates or require collateral, since users are pre-approved by their employers. Instead, companies can decide to charge fees or offer GajiGesa as part of a benefits package. When a worker withdraws money, GajiGesa asks why they are using the Earned Wage Access feature, and presents that data to companies in an anonymized and aggregated format.

This allows employers to see what needs their work base has and potentially develop new benefits. For example, one of the top three reasons workers use EWA is to pay medical bills. “This is a strong signal to an employer that if you’re trying to retain employees, especially a blue collar employee, even a basic insurance product might be very attractive for the family,” said Agrawal.

GajiGesa also discovered that many workers, especially in Tier 2 to Tier 3 cities, use its EWA to fund family businesses instead of taking out loans for working capital.

“A lot of families in Indonesia often have one member working in a factory with fixed salaries, and they have micro-industries at home, for example making wafers or stickers to sell in their communities or online,” said Agrawal. “They were going to loan sharks previously or private lenders for very expensive rates so they can run their business, and now the family member who is working in a factory can withdraw capital to support the family business so they don’t need to go to loan sharks.”

GajiTim was launched because the startup saw many inbound inquiries from SMEs, like restaurants, small factories and general stores, that have a lot of part-time workers. These businesses often rely on paper systems, including punch time cards, to track working hours and calculate paychecks. But this often results in disputes, so having an app that counts working hours and earned wages in real-time gives workers more transparency and helps companies save time. GajiTim also has access to GajiGesa’s flagship EWA service and allows it to bring more clients onto the platform.

Juul inventor’s Myst lands funding as institutional investors turn to China’s e-cigs

Over the past several years, institutional investors had largely shied away from China’s e-cigarette makers, an industry that was teeming with shoddy workshops and lacked regulatory oversight. But investors’ attitude is changing as China sets in motion its strictest ever regulation on electronic cigarettes.

Myst Labs, a Chinese e-cigarette maker co-founded in 2019 by Chenyue Xing, a chemist who was part of the team at Juul that invented nicotine salts, a key ingredient in vaping, recently raised “tens of thousands of dollars” from a Series B funding round. The financing was led by its existing investor, IMO Ventures. Thomas Yao, CEO and another co-founder of Myst, is a founding partner of IMO Ventures.

In March, one of China’s top tech policy makers published a set of draft rules that would bring e-cigarettes under the same regulatory scope as traditional tobacco, which means vaping companies will need licenses for production, wholesale and retail operations in the world’s largest manufacturer and exporter of e-cigarettes.

These changes will deal a blow to small producers with poor quality control, leaving the industry with a handful of established and compliant players, Fang Wang, head of marketing at Myst, told TechCrunch.

For one, standardizing production is costly, Li said. From ceramic coils, batteries, to fragrance, every component and ingredient of a vape will need to meet stringent requirements. E-cigarette companies will also need to pay tobacco taxes, an important source of tax revenue for the Chinese government.

The other challenge is how to lower nicotine content. Many current products on the market have a relatively high nicotine concentration at 3-5%, so if China is in line with the European Union standard of 1.7%, many small brands will be forced out of business because they lack the know-how to produce low-nicotine vapes that still satisfy users’ crave, suggested Li.

“We’ve received a lot of investor interest in the past few months. Before that, professional, institutional investors often avoided e-cigarette companies, but they are showing more willingness now as regulations take shape,” Li added.

Myst declined to list its other investors but said they include high-profile individuals invovled in the e-bike sharing company Lime, Facebook and the bitcoin industry.

Most of Myst’s current sales are from China, where it has opened 600 stores and plans to reach a footprint of 1,000 stores in the next few quarters. Overseas, the startup has a retail footprint in Malaysia, Russia, Canada and the United Kingdom, where it’s selling in over 30 shopping malls and a few hospitals through its distribution partner, Ecigwizard.

The new funding will allow Myst to further expand its sales network and strengthen its research and development. The company prides itself on its product containing 1.7% nicotine, which it claims can deliver the effect of a 3% counterpart. At her lab, Xing is currently working on e-liquids with “natural tobacco contents” and without organic acids, additives that allow nicotine salts to vaporize and be absorbed.

Myst is still a relatively small player compared to China’s market dominator Relx, which went public in New York earlier this year and is applying for a license to sell in the U.S. But Yao is optimistic about Myst’s future. Vaping, he said, is one of the fastest-growing consumer categories in China. Myst’s recent sales are tripling every three months.

“In other consumer areas, you rarely see a top player commanding 60-70% of the market, so there is still a lot of room for the top 10 players to grow,” the CEO said.

SoftBank leads $15M round for China’s industrial robot maker Youibot

SoftBank has picked its bet in China’s flourishing industrial robotics space. Youibot, a four-year-old startup that makes autonomous mobile robots for a range of scenarios, said it has notched close to 100 million yuan ($15.47 million) in its latest funding round led by SoftBank Ventures Asia, the Seoul-based early-stage arm of the global investment behemoth.

In December, SoftBank Ventures Asia led the financing round for another Chinese robotics startup called KeenOn, which focuses on delivery and service robots.

Youibot’s previous investors BlueRun Ventures and SIG also participated in the round. The startup, based in Shenzhen where it went through SOSV’s HAX hardware accelerator program, secured three financing rounds during 2020 as businesses and investors embrace industrial automation to minimize human contact. Youibot has raised over 200 million yuan to date.

Founded by a group of PhDs from China’s prestigious Xi’an Jiaotong University, Youibot develops solutions for factory automation, logistics management, as well as inspection and maintenance for various industries. For example, its robots can navigate around a yard of buses, inspect every tire of the vehicles and provide a detailed report for maintenance, a feature that helped it rack up Michelin’s contract.

Youibot’s “strongest suits” are in electronics manufacturing and electric power patrol, the company’s spokesperson told TechCrunch.

The startup is also seeing high growth in its semiconductor business, with customers coming from several prominent front-end wafer fabs, which use the firm’s robots for chip packaging, testing, and wafer production. Youibot declined to disclose their names due to confidentiality.

Chinese clients that it named include CRRC Zhuzhou, a state-owned locomotive manufacturer, Huaneng Group, a state-owned electricity generation giant, Huawei, and more. China currently comprises 80% of Youibot’s total revenues while overseas markets are rapidly catching up. The firm’s revenues tripled last year from 2020.

Youibot plans to spend the fresh proceeds on research and development in its mobile robots and propietary software, team building and market expansion.

Krafton announces PUBG India return under Battlegrounds Mobile title

Krafton, the South Korean video game developer of PUBG Mobile, said on Thursday that it is bringing back the popular gaming title to India under the brand name Battlegrounds Mobile India. The new title, which uses the color scheme of the Indian flag, will offer “a world class AAA multiplayer” and free-to-play gaming experience on mobile devices, it said.

The developer said it will open pre-registration for Battlegrounds Mobile India ahead of its launch in the country, but didn’t share a specific date. The title has been exclusively developed for the world’s second largest internet market, Krafton said.

“Krafton will collaborate with partners to build an esports ecosystem while bringing in-game content regularly, starting with a series of India specific in-game events at launch, to be announced later,” it said.

Thursday’s announcement comes months after India banned PUBG Mobile alongside 200 other apps with links to China citing national security concerns. In the months since Krafton has taken several steps — including cutting ties with its publishing partner Tencent, inking a global cloud deal with Microsoft, pledging a $100 million investment in India’s mobile gaming ecosystem, and earlier this year backing local startup Nodwin — to ally New Delhi’s concerns.

“With privacy and data security being a top priority, Krafton will be working with partners, to ensure data protection and security, at each stage. This will ensure privacy rights are respected, and all data collection and storage will be in full compliance with all applicable laws and regulations in India and for players here,” it said in a statement.

The firm didn’t say whether it had any conversation with New Delhi and if it had received the approval to launch the new title.

Prior to being banned in India, PUBG Mobile was the most popular mobile game in the country. The app had amassed over 50 million monthly active users in the country. PUBG Mobile still had over 10 million users in India last month, according to a popular mobile insight firm. (Many have been using VPN tools and other workarounds to bypass the geo-restriction.)

This is a developing story. More to follow…

Tesla supplier Delta Electronics invests $7M in AI chip startup Kneron

Despite a persistent semiconductor shortage that is disrupting the global automotive industry, investors remain bullish on the chips used to power next-generation vehicles.

Kneron, a startup that develops semiconductors to give devices artificial intelligence capabilities by using edge computing, just got funded by Delta Electronics, a Taiwanese supplier of power components for Apple and Tesla. The $7 million investment boosts the startup’s total financing to over $100 million to date.

As part of the deal, Kneron also agreed to buy Vatics, a part of Delta Electronics’ subsidiary Vivotek, for $10 million in cash. The new assets nicely complement Kneron’s business as the startup extends its footprint to the booming smart car industry.

Vatics, an image signal processing provider, has been selling system-on-a-chip (SoC) and intellectual property to manufacturers of surveillance, consumer, and automotive products for many years across the United States and China.

Headquartered in San Diego with a development force in Taipei, Kneron has emerged in recent years as a challenge to AI chip incumbents like Intel and Google. Its chips boast of low-power consumption and enable data processing directly on the chips using the startup’s proprietary software, a departure from solutions that require data to be computed through powerful cloud centers and sent back to devices.

The approach has won Kneron a list of heavyweight backers, including strategic investor Foxconn, Qualcomm, Sequoia Capital, Alibaba, and Li Ka-shing’s Horizons Ventures.

Kneron has designed chips for scenarios ranging from manufacturing, smart homes, smartphones, robotics, surveillance and payments to autonomous driving. In the automotive field, it has struck partnerships with Foxconn and Otus, a supplier for Honda and Toyota.

Following the acquisition, Vatics executives will join Kneron to lead its surveillance and security camera division. The merged teams will jointly develop surveillance and automotive products for Kneron going forward. Image signal processors, coupled with neural processing units, are helpful in detecting objects and ensuring the safety of automated cars.

“This acquisition will allow us to offer full-stack AI solutions, along with our current class-leading NPUs [neural processing units], and will significantly speed up our go-to-market strategy,” said Kneron’s founder and CEO, Albert Liu.

Founded by former Carousell and Fave execs, Rainforest gets $36M to consolidate Asia-Pacific Amazon Marketplace brands

A group photo of Rainforest’s team members Elita Subaja, J.J. Chai and Jerry Ng

From left to right: Rainforest business operations and strategy director Elita Subaja; co-founder and CEO J.J. Chai and brand manager Jerry Ng

Singapore-based Rainforest is one of the newest entrants in the wave of startups that “roll-up” small e-commerce brands. Launched in January by alumni from some of Southeast Asia’s top startups, including Carousell, OVO and Fave, Rainforest acquires Amazon marketplace sellers. This is similar to the Amazon-centric approach taken by Thrasio, Branded Group and Berlin Brands Group, three of the highest-profile e-commerce aggregators, but Rainforest is one of the first companies in the space to launch out of Asia and focus specifically on acquiring brands in the region. It is also laser-focused on home goods, personal care and pet items, with the goal of building the e-commerce version of conglomerate Newell Brands, whose portfolio includes Rubbermaid, Sharpie and Yankee Candle.

Rainforest announced today that it has raised seed funding of $36 million led by Nordstar with participation from Insignia Venture Partners. This includes equity financing of $6.5 million and a $30 million debt facility from an undisclosed American debt fund.

Co-founder and chief executive officer J.J. Chai, who previously held senior roles at Carousell and Airbnb, told TechCrunch that Rainforest raised debt financing (like many other e-commerce aggregators) because it is non-dilutive and will be used to acquire about eight to 12 brands sold through Amazon’s B2B service Fulfilled By Amazon (FBA). The startup’s other co-founders are chief financial officer Jason Tan, who held the same roles at OVO and Fave, and chief technology officer Per-Ola Röst, who previously founded Amazon analytics tool provider Seller Matrix and ran a FBA brand worth seven figures.

Rainforest’s portfolio currently includes three brands, which it acquired for about $1 million each. The company wants to wait until its portfolio is larger to disclose what brands it owns, but Chai said they include a mattress brand that is a best seller on Amazon, a cereal maker and a kitchenware brand. Focusing on specific verticals will allow Rainforest to streamline supply chains, product design and marketing as it scales up its brands.

Amazon’s total gross merchandise volume in 2020 was about $490 billion. According to Marketplace Pulse, $300 billion of that came from third-party sellers. Thrasio and Branded Group, which was started by Lazada co-founder and former CEO Pierre Poignant, also acquire Asian brands, but most e-commerce aggregators have so far focus on American, European or Latin American sellers (like Mexico City-based Valoreo, which also recently raised funding). Rainforest will look at sellers in the Asia-Pacific region, including China, Southeast Asia and Australia.

Chai said about 30% of Amazon’s third-party sellers are based in Asia, and he expects more e-commerce aggregators to launch in the region. “All the ingredients are there and I guess it’s just a matter of time when more people figure it out and solve this problem,” he said. “Everything we’ve seen has worked out, and of course the original creators noticed this trend, which is that there is an explosion of microbrands.”

Rainforest looks for home goods, personal care or pet product FBA sellers that are currently doing about $5 million to $10 million in sales per year, and making a minimum 15% profit margin. Most of its pipeline of potential deals are inbound inquiries. Rainforest can give brands a valuation within two days. If they are interested in the offer, due diligence usually takes about a month, and sellers get the first tranche of their payment in about 40 days.

The company plans to look at other marketplaces in the future, but is starting with Amazon because its analytics allows quicker valuations. Rainforest looks at the “Three R’s,” or product reviews, ratings and ranking, to see how well a seller is performing. It also wants brands that can expand beyond Amazon into other channels and have unique intellectual property with wide appeal. “We’re looking for products that can traverse global markets,” said Chai. “So, for example, no lawnmower covers, a very American kind of thing that’s maybe less relevant in this part of the world, because our intention is to take these brands to their next level potential.”

Many of the brands in Rainforest’s pipeline are run by sole proprietors who have gotten to the point where they need to hire a team to continue growing, but want to exit instead so they can move on to their next venture.

“Being able to create a physical goods brand and build a sizable business out of it is a relatively new phenomenon. It used to be that you needed a factory, big branding, R&D. The combination of online advertising, marketplaces and supply chains being disrupted has created an opportunity where individuals can create brands in the same way that the App Store allowed people to start distributing software,” said Chai. “Where we play into that trend is that there are a lot of microbrands and many will get stuck, so we can give the entrepreneurs a way to exit and bring a brand to its full potential.”