It was back in 2019 that we reported on Visionaries Club, a new, Berlin-based, European VC focusing on B2B, founded by Sebastian Pollok and Robert Lacher. At the time, Visionaries Club had launched two new €40M micro funds for seed and growth-stage B2B.
Pollok was previously a VC at e.ventures in San Francisco and also founded Amorelie, which exited to Pro7Sat.1 Media Group. Lacher was previously a founding partner of La Famiglia, an early investor in FreightHub, Coya, Asana Rebel, OnTruck and Personio.
Visionaries Club has now announced a second B2B-focused fund, with a new €150m Seed Fund and €200m ‘Early Growth Fund. It’s so far invested in companies such as Personio, Miro, Choco, Xentral, Truelayer, Vay, Taxdoo, Yokoy, Pigment, Leapsome and Gtmhub, alongside VCs such as Sequoia, Accel, Index, Lightspeed or Bessemer.
In a statement, Lacher said: “We are extremely proud and humbled that more than 20 of our founder LPs are founders we have backed in the past, that now reinvest their private money into our funds such as Hanno Renner (Personio), Jenny Podewills (Leapsome), Daniel Khachab (Choco), Christian Reber (Pitch / Superlist) or the founders of Taxdoo and Insify.”
The fund essentially operates as a micro-VC fund, which means it can lead, and co-lead Seed investment deals, co-investing alongside larger, multistage VC funds in Early Growth stage (Series B) deals.
It’s also launching the Visionaries Club science-driven, €50 million ‘Tomorrow Fund’ to back science-driven startups at the Pre-Seed and Seed stage.
Additionally, Sahar Meghani and Marton Sarkadi Nagy have been promoted to Partners.
London-based Meghani will take a lead role in managing the new Growth Fund, while Sarkadi Nagy will take a lead on the seed fund activities.
NeoCarbon, a Berlin-based climate tech startup that’s taking a retrofitting approach to scaling direct air capture (DAC) devices for uptake of CO2 emissions has nabbed pre-seed funding. Its focus is on developing DAC kit that can be installed (retrofitted) inside working cooling towers in the industrial sector — thereby, its pitch runs, slashing the cost of drawing down carbon emissions.
The €1.25M pre-seed round, which was co-led by PropTech1 and Speedinvest, will be used for the next phase of development as NeoCarbon works on turning its current, lab-based proof of concept into a pilot prototype in a commercial facility — hopefully early next year. So it’ll be using the pre-seed funds for that, including expanding its engineering team to get an MVP in shape for a first pilot in the coming months.
It’s initial focus is on retrofitting DAC to smaller scale industrial cooling towers — rather than the gigantic towers you might see at a power station. (Or indeed the really tiny units you might find on a shopping center or office building.) Though it says it hopes, longer term, to develop tech for really large towers too. But it argues that even smaller industrial towers process a lot of air and can therefore capture meaningful quantities of CO2 — and, well, the climate crisis isn’t going to hang around and wait for huge projects to kick off so its philosophy is start smaller to scale faster.
“Our sweet spot in the coming, let’s say, 2-3 years, will be 1-10 megawatts of cooling power,” says co-founder and CTO Silvain Toromanoff, talking to TechCrunch over Zoom. “And those are already in the thousands of tonnes of capture potential per year.”
“We did a very early proof of concept (POC) in the early days, in February,” he goes on. “Now today we are finalizing our very first, what we call, MVP — so it’s still very small scale. But the POC was very low budget and more like quantitive. Now we are finalizing, basically this week, the prototype MVP which will be more qualitative results.
“We haven’t started yet measurements and tests with it but it’s basically in the finalizing stage of actually getting it to work.”
While DAC sounds great in theory — using chemicals to literally suck problematic emissions out of the air! — human activity is generating vast amounts of CO2 (NeoCarbon cites the relevant stat as 51 billion tons per year) so you’d need an awful lot of DAC to make a dent in the climate crisis.
But one big barrier to scaling DAC is the cost of implementation.
NeoCarbon’s tactic for cutting the cost of DAC is to focus on repurposing existing industrial infrastructure which already has the right conditions to suck carbon out of the air — after all, cooling towers are designed to have a lot of air flowing through them — meaning there’s no need to build a whole new CO2-capturing edifice. (Though you do have to be sure your tech can adapt to varying installation conditions.)
Hence it claims it will be able to reduce the costs of DAC by up to 10x — making DAC “mass-market ready”, as its pitch puts it.
CO2 going down the chimney
Another consideration with direct air capture is, well, what do you do with the captured CO2?
If you do something that simply releases it into the atmosphere again you’re — at best — delaying rather than cutting emissions. Which isn’t going to cut it if you’re claiming to have a tech to help the climate crisis.
In the short term, NeoCarbon says its approach to this issue is to focus on sites where captured CO2 could be repurposed by the industrial facility itself — such as vertical farms (which use CO2 to feed plants), or carbonated drinks makers (which use the stuff for liquid fizz).
This is another reason why it’s settled on retrofitting industrial cooling towers — since they can be located in proximity to a business need for CO2 — allowing the carbon dioxide to be usefully fed back into commercial processes as a raw material. (Plus, as well as climate considerations, it argues there can be wider business benefits, such as bolstering supply chain resilience and reducing manufacturing costs as CO2 has faced some shortages and price spikes in recent years.)
This circularity will only enable the creation of carbon neutral processes, though. So, longer term, Toromanoff says it’s planning to partner with facilities that would plug (or rather pipe) captured CO2 into carbon permanent storage facilities so that actual sequestering can take place (aka, carbon capture & storage) — thereby dangling the possibility of DAC playing its part in reducing climate heating emissions. (“We have already a few LOIs (letters of intent) and discussions around storage partnerships — let’s say for early 2024 for the first projects,” notes Toromanoff on that.)
Again, it’s betting that infrastructure for sequestering carbon is most likely to be built out in locations that feature the sorts of industrial cooling towers it’s targeting — since industries like manufacturing and farming face rising pressure to tackle large carbon footprints.
So, more generally, its strategy to drive uptake of DAC is to zero in on a dovetailing of needs that it reckons will foster the right conditions for scaling the tech — and so scaling DAC’s utility as a climate-change mitigation measure — as well as for growing a technology licensing business around that.
The target customers for licensing its DAC tech for cooling towers — which is the piece it wants to focus on as a business, along with scaling uptake of its tech — could end up being cooling tower manufacturers themselves. After all, they have plenty of built infrastructure but aren’t a modern industry so are likely to lack the sort of product innovation that would allow them to develop such services in-house to differentiate what’s otherwise a pretty standard industrial component they’re selling (so working with a startup is one way to bridge that disruptive gap).
“We’re going industry by industry so we can tailor our product to one or a limited set of industries at the beginning and then expanding. And then of course we’ve also been in touch with all the largest global players in cooling tower manufacturing,” says Toromanof, discussing NeoCarbon’s go to market plans. “We’re currently developing an MOU with at least one of them with means we could have co-development of our product with their cooling towers specifically
“One thing that has been brought up is the idea that we could focus on the capture tech and they could focus on the connecting part — which is not the core of the IP or the difficult part it’s more just difficult in the sense that there’s a lot of variety but technically it’s just connecting the pieces together.”
“In the long run we don’t want to handle all this ourselves because — for example — [for] international scaling, we don’t want to have a fleet of maintenance especially when cooling tower manufacturers already have this,” he adds. “We could leverage [existing maintenance contract relationships they have with their customers] so they would also do the maintenance for our product. And of course that means that on their end they would have some kind of exclusive licence to utilize our product in a certain geography and timeframe.”
It’s still early days for the startup, which was only founded in January, but the climate crisis isn’t hanging about so NeoCarbon’s founders are keen to move as fast as they can to scale their prototype into tested and proven hardware that makes adding a CO2-capture facility to a cooling tower a matter of ‘plug and play’.
They were inspired to take a retrofitting approach to drive uptake of DAC by another climate tech startup — US-based Noya Labs — but argue they have a bit of a different focus (i.e. on industrial rather than on commercial buildings). Plus of course they’re building in Europe (not the US) so will be focused on the 300,000 or so cooling towers they’ve identified where their tech could be most quickly retrofitted across the region.
What’s the biggest challenge to successfully scaling their technology? Toromanoff says one of the “most critical” elements is ensuring they can retrofit their DAC devices without negatively impacting the cooling function (or indeed creating any other problems for industrial processes).
“That is one of the non-negotiable things because otherwise we couldn’t do this so there’s a few ways we’re looking at this. It might be also something we need to develop with iterations but basically… if you’re adding something on top of the cooling tower it creates a bit more resistance to the air flow but at the same time we’re also consuming some of the heat so the idea’s that those two things [balance out],” he suggests. “Basically the tower would indeed be less efficient but it would also need to do less work.”
The startup’s origin story includes its two scientist co-founders meeting at a co-founder matching event run by company-builder Antler in Berlin — after they’d both quit their jobs and been casting around for startup ideas where they could make a climate impact fast. (NeoCarbon’s other founder is CEO René Haas, who was stuck on a delayed train for most of our Zoom chat.)
It was also at Antler — which is another participant in NeoCarbon’s pre-seed raise, along with some unnamed angels — where the pair were brainstorming ideas when they came across what Noya Labs was doing with retrofitting DAC and saw an opportunity to do something similar in Europe (and for European industrial infrastructure), which they also thought offered the best chance for them to leverage their existing startup experience and skills, in execution and scaling, to the climate-imperative task of quickly expanding uptake of DAC.
“The best case scenario is to have it running by end of Q1 next year,” says Toromanoff of the upcoming pilot, adding: “We have a very strong incentive to act as fast as possible [because of the climate crisis]. That’s why also it’s called a pilot — because we are not pretending it will be a final product so we are also looking for a partner that would be ready to take a bit of risk.”
NeoCarbon wants industrial cooling towers to join the climate fight by Natasha Lomas originally published on TechCrunch
Runa Capital, which launched there in 2010, says it has raised $55 million towards its fourth fund, aiming for a hard cap of $250 million.
And after 12 years in the US, the normally Palo Alto-based VC says it is now relocating its HQ to Luxembourg, to re-focus its attention on the European market, as several other US VCs have done this year.
TechCrunch understands the move is in part motivated by the higher returns now available from European startups, a trend we’ve seen as other US VCs – such as Sequoia and Lightspeed – have opened European offices.
Runa’s partners will now be now spread across Luxembourg, London, Berlin, San Francisco, and Palo Alto.
The firm has also promoted principals Konstantin Vinogradov and Michael Fanfant to General Partners focusing on Europe and the USA, respectively.
The fourth fund will continue to focus on early-stage investments in enterprise software and deep tech, such as open-source software, machine learning, quantum computing startups, finance, education, and healthcare.
The first investments of the new fund include Barcelona-based embedded finance provider Hubuc, Paris-based open-source enterprise software developer OpenReplay, as well .
Founded by the teams behind the Acronis and Parallels software companies, Runa Capital has so far over 100 early-stage investments in Europe and North America.
Its portfolio consists of Mambu (valued at $5.5 billion), Nginx (acquired by F5 for $700M), Ecwid (acquired by Lightspeed for $500M), Acumatica (acquired by EQT), and Drchrono (acquired by EverCommerce).
To date, the fund has raised around $500M for its three early-stage funds and one “opportunity” VC fund.
In a statement Dmitry Chikhachev, General Partner and Co-founder at Runa Capital said: “Runa Capital has a tight-knit team and a track record of promoting our partners from within. Konstantin and Michael will bolster our push into the most exciting and promising areas.”
Indeed, new partner Vinogradov originally joined Runa Capital in 2012 as a Junior Analyst while Fanfant previously сo-founded fintech startup Octane Lending.
Runa Capital’s portfolio includes Nordic banker Nicolai Tangen and Andreas Gauger (CEO at OpenExchange).
Despite its Russian ethnicity in terms of founders, Runa hasn’t made any investments in Russia-based companies since 2012 and, in fact, issued a vehement statement last March openly criticizing Russia’s invasion of Ukraine. Soviet-era-born technology entrepreneur Serguei Beloussov (who has since taken the name Serg Bell and Singaporean citizenship) founded Runa after starting Acronis, and has since gone on to also establish the Acronis Cyber Foundation which has partnered with UNICEF, built schools and educated migrants to Switzerland.
Berlin-based agriTech startup Klim is in a hurry to get farmers adopting so-called ‘regenerative’ methods — which are touted as less harmful to soils and biodiversity than conventional farming — arguing this evolution offers the best chance to shrink the global carbon footprint of agriculture fast enough to tackle the climate crisis.
Its digital platform, launched in an early pilot phase in May last year, now has around 1,700 farmers signed up to get support to make a quicker switch away from conventional farming methods that are associated with denuded soils and broader environmental harms — not least climate change itself, with global food production responsible for a quarter of climate-heating greenhouse gas emissions, more than 80% of which comes from agriculture.
Klim’s product includes an app that supports farmers to transition to regenerative agricultural methods by helping them set goals and determine the best combination of techniques to apply to their farmland (such as which cover crops to sew for their soil type etc).
There’s a financial support side too. Farmers use the app to chronicle the progress of their transition, e.g. by taking photos of crop growth, as a way of proving they’re sticking with the program (Klim also uses satellite data for monitoring and says it also undertakes some site visits); and — if they do that — they can earn revenue payouts for carbon sequestered as their farm’s soil health improves, over the years, or as they undertake other environmentally focused interventions (such as restoring hedges, reforesting or planting flower strips to boost biodiversity).
The startup does not currently offer loans to farmers via its platform but it says it’s looking into it — likely in conjunction with agricultural banks, where the interest rate could be linked to their climate performance as an added incentive — saying it may expand to providing farmers with financial support to get going with regenerative methods too. (“There’s a lot of different angles and tools where you can help farmers make a better living if they are doing something that’s better for the planet,” it suggests, emphasizing: “That’s the whole point. You want to set the incentives so that sustainable agriculture makes more sense than unsustainable agriculture — and that’s the challenge we’re all working on.)
While Klim talks keenly of being on an environmental “mission”, it is a for-profit venture — so it’s also intending to monetize as it supports farmers to earn money for cultivating carbon sinks on their land.
Ecosystem services marketplace
Its business model involves taking a commission on the sale of carbon ‘insets’ (as opposed to offsets; the idea being they will be sold to entities to shrink emissions within their own supply chains) — creating a marketplace where farmers can sell what it bills as “ecosystem services”, meaning they can generate revenue off of practices that suck up more CO2 than if they’d continued farming without adopting a regenerative approach.
Buyers of farmers’ “ecosystem services” might be food companies or other entities looking to green their supply chain, as emissions reporting requirements step up. So the upshot is a farmer following the program gets paid for ‘farming carbon’, as it’s sometimes called — in addition to selling any actual crops/food they produce — and Klim gets its cut of any sequestered carbon or other ‘eco services’ they sell.
“It’s all an investment into the future,” says CEO and co-founder Dr Robert Gerlach. “We help the farmer to do that with a digital platform that gives the farmer a way to transition, it gives them the know-how to do it, and it gives them farm management tools to achieve that.”
The startup’s work doesn’t stop there. It’s also seeking to support farmers to transition to less environmentally damaging methods by working with food companies and retailers to raise their profile with consumers — with an eye on the extra value that might be squeezed out (i.e. via a higher price) for produce that can claim to have taken less of an toll on the planet prior to arriving on the plate vs conventionally farmed alternatives.
“We position the farmer in public with the consumer as a climate hero,” Gerlach tells TechCrunch. “We work with industry — especially the food industry — [which] needs to transform its supply chain. They need to reduce the emissions in their supply chain and they need to secure the yields in their supply chain even though there’s ever more frequent droughts.
“The only way they can achieve that is if they transition their supply chain to regenerative. But the food industry does not really have access, in some cases, to their own farmers — for example in the case of retail — or they do really know how to best actually transition their farmers and we then come in with our platform and help them to transition their farmers to regenerative agriculture.”
This includes a “Klim label” that can be put on food packaging — using a QR code to point consumers to information showcasing the farmer and their regenerative methods. “I can tell you that farmers love that consumers are learning about regenerative agriculture,” says Gerlach. “If a consumer appreciates that a farmer works in a climate-friendly way he’s probably also willing to pay more for that — and that gives farmers security that they can actually embark on the journey to transition because consumers will reward it.”
“Farmers are in some form of crisis of meaning,” he adds. “They see that their profitability is dropping over the last decades, they see that the regulatory requirements are rising and they see that in public they are often unjustly portrayed as climate sinners — and what they really want is to gain a sense of purpose in what they do; they want to feel that what they’re doing makes sense and is appreciated, especially by the consumer.”
The August 2020-founded startup has just closed a €6.5 million seed raise, led by Berlin-based food and green tech investor, Green Generation Fund to plough into further product dev and international expansion, as it races to get more farmers farming greener. Other investors in the round include biodiversity-focused fund Edaphon, early stage climate-focused VC Ponderosa and Silicon Valley-based agriculture impact fund Agfunder, with existing investors such as Ananda, FoodLabs and Wi Venture also joining the round.
In total, Klim has raised just shy of €8M since being founded — just two years ago. The latest cash injection is being put towards accelerating its mission to get as many farmers as possible tilling less, and sewing more, as quickly as possible. So while its early focus has been on its home turf it’s now shooting for internationalization.
Which markets it’ll be expanding into first are tbc but as it widens its net it will be going up against a broader crop of agriTech startups offering similar support for farmers to transform their methods — such as the likes of Danish startup Agreena; Regrow in the US; and Australian giant Indigo Agriculture, which has increased its focus on regenerative agriculture in recent years, to name three.
“Our mission and purpose is to get as many farmers to adopt regenerative practices or ‘carbon farming’ as fast as possible,” emphasizes Gerlach. “Only if we can get many farmers to transition a lot of their farmland to regenerative agriculture do we have a chance to achieve the 1.5 degree temperature targets.”
“There is a clear chance, we have as a planet, to achieve the 1.5 degree targets,” he also argues. “However it requires rapid action — and that’s the whole point for Klim.”
But what is regenerative agriculture?
A few things to note upfront here: There is no fixed definition for ‘regenerative agriculture’ — hence it can refer to a different bundle of techniques in different regions (in the US it’s often talked about in association with cattle farming, for example, which means it can have a chequered reputation among environmentalists). Moreover, in recent years, hype about claimed environmental benefits from making tweaks to existing agricultural processes has seen the buzzy badge of ‘regenerative’ keenly taken up by some of the biggest names in (junk) food production, from PepsiCo to McDonalds.
Some of this hype has — frankly — been unbelievable. Such as an unsubstantiated claim that if all the planet’s farmers switched to regenerative agriculture it could 100% reverse climate change. But while there’s a healthy dose of scepticism around what looks like very lurid greenwashing by certain vested interests (most notably those with an agenda to claim you can ‘green’ unsustainable livestock farming); there are more measured and/or pragmatic proponents — and plenty of soil scientists — who argue there is worthwhile substance here.
These more measured supporters argue that by applying regenerative agriculture methods broadly it can help restore soil health and improve biodiversity in a meaningful, impactful way — across millions (or well billions if you’re taking all farmed land on the planet) of hectares while still producing enough food to feed everyone in the world.
The claimed ‘regenerative’ transformation is done through the use of various soil-friendly (or, well, friendlier) methods — such as crop rotation and cover cropping, plus a reduction in mechanical tilling, along with promoting other beneficial activities like hedge restoration, reforesting etc — which, in turn, can allow farmers to avoid the conventionally heavy use of fertilizers, herbicides and pesticides; chemicals that are absolutely bad for biodiversity (and probably human health too) and more broadly damaging to the environment and the long term security of food production as they denude the health of the top soil, killing off the organic matter (humus) that’s good at retaining water and taking up carbon.
Impoverished soils are a direct problem for farmers, of course, as they reduce the quality (and potentially the yield) of food that can be produced from land — as well as exacerbating the impact of climate-associated issues like droughts that can devastate crops (since poor soils dry out faster). So there’s a clear logic and interconnected web of potential benefits to be derived from adopting methods that can reduce some of the harms of conventional farming.
“Since the beginning of modern agriculture we have released around 500 Gigatons of CO2 into the atmosphere. And, for example, in Germany right now each hectare (100m x 100m) of farmland releases 0.7 tonnes of CO2 into the atmosphere through the destruction of [organic matter in soils]. So we need to get farmers to convert quickly and if you want them to convert quickly you need to understand what is preventing them from converting in the first place. And that was our starting point,” Gerlach explains.
“What’s really important is to know that we have reduced soil carbon over the last 100 years — globally, some studies say that we have lost 50% of soil carbon. If you look at some color-coded maps that show you where we have lost soil carbon and how much it looks pretty damn bad. Very red. So in order to build that up again you need decades — so you need to start now. And the more regenerative methods you use, the more confidence a farmer gains in using these methods, the more soil carbon you can actually build up.”
All that said, whether regenerative agriculture is — overall — net helpful or harmful for humanity when you consider the existential crisis of climate change facing all life on the planet and agriculture’s leading contributory role in fuelling the crisis through the release of greenhouse gases is a wider question. The answer is probably closest to ‘it depends’.
Thing is, if the buzzy term ends up greenwashing agriculture’s reputation to the extent that it acts as a barrier to the kind of wholesale transformation of global food production that’s needed to avoid catastrophic climate change — say by creating an excuse for food giants to continue industrial-scale livestock farming, rather than switching to deriving their products from low-carbon, plant-based (and/or other alternative) proteins (at least some of which are already being produced in abundance) — there’s an argument that the trend could end up doing more harm than good.
But, at the same time, we do face multiple sustainability crises in parallel. And the long term viability of agricultural food production is very evidently one of them — with no shortage of warnings that farmland simply won’t continue to produce if we continue to treat soils so poorly. So soil restoration looks like vital, necessary work in and of itself. Measures to stem biodiversity loss are also essential.
Additionally, if you take it as given that humanity won’t be saved from its need (and/or appetite) to eat certain proteins by some fancy new technology swooping in to enable a sudden mass low-carbon shift in food production that’s able to eliminate animal farming overnight (because the most potentially transformative, low carbon alternatives for growing and harvesting protein are still being developed and/or scaled up) — and also accept that we will need to rely on large scale, land-based agriculture for many more years to come (since plant-based nutrients constitute the bulk of many people’s diets right now and are likely to remain so for the foreseeable future) — then some environmental improvement of agriculture is better than nothing, is the regenerative pragmatist’s argument.
Towards sustainable farming?
Discussing some of the environmental critiques of regenerative agriculture, Gerlach appears to entrench his support even further — straying towards backing a notion (which has, by the way, been heavily promoted by the meat industry) that even livestock farming could be made sustainable with the right interventions (and/or in certain contexts).
“Even cattle you can raise in a way where you have significantly reduced climate impact,” he argues. “And that in itself is an advantage. Of course we all know we need to transition the popular away from a predominantly meat-based diet but then you have a question that others need to answer… whether there should still be a role for animal husbandry at all or zero?
“But if you are in a space where you are raising cattle, for example, you can do so with significantly reduced climate impact. And there are scientific studies that claim you can even raise cattle in a climate positive way.”
He does not specify which scientific studies he’s referring to — but a five-month investigation into meat industry lobbying tactics conducted by DeSmog last year found suspiciously similar climatewashing claims featuring in its PR and lobbying. (DeSmog summarized its findings as follows: “Downplaying the impact of livestock farming on the climate; casting doubt on the efficacy of alternatives to meat to combat climate change; promoting the health benefits of meat while overlooking the industry’s environmental footprint; exaggerating the potential of agricultural innovations to reduce the livestock industry’s ecological impact.” So, yeah, uncanny.)
One thing is clear: The greenwashing pitfalls are real given how much meat industry cash is being sloshed around to try to deflect climate blame and derail change — but it’s also fair to say that so are the challenges of transitioning consumers to alternative proteins en masse fast.
Many consumers are unlikely to stomach a too-swift transition away from traditionally farmed meat — although if the full environmental costs of meat production were reflected in the price people paid then their diets might be rather swiftly reconfigured. (And we may well soon see this effect in practice, as the energy crisis drives food inflation that’s hitting meat producers especially hard — given that it’s such an inefficient way of producing protein for human consumption.)
Meat alternatives have traditionally been more expensive for consumers to buy but as that changes it’s likely a lot more people will find an appetite for textured vegetable proteins.
At the same time, food is of course cultural, personal and, at times, political — what we eat (or don’t) can often be incredibly polarizing. So while demand for plant-based diets is absolutely on the rise — especially among younger generations who understand the urgency of the climate emergency — societal tastes rarely change overnight. (Although, again, the cost of living crisis might just be the lever that flips the West to a predominantly plant-based diet.)
But the pragmatist’s view of regenerative agriculture is still that it’s a necessary evolutionary step on the road to reforming food systems, and that — by promoting the use of less environmentally harmful methods, even for heavily polluting industries such as dairy farming — it can at least help shrink the emissions toll of some major climate sinners in the meanwhile.
Gerlach also suggests that, unlike in the US, the predominant application for regenerative agriculture in Europe is plant-based farming in any case. And he says Klim’s platform does not currently include any livestock farmers — although it is supporting some farmers who are producing animal feed (such as grass for dairy cows) — so it is attached to the supply chain of animal-derived foods. And as it begins to scale uptake of its platform via international expansion there is a question over whether or not it will end up feeling pressure to open up to livestock farmers too.
Reduction and transition
“We are agnostic. We are working with industries that are purely plant-based. And we are also working with the dairy industry — who need to reduce their emissions significantly,” says Gerlach of where Klim stands now. “Regenerative agriculture can play a huge role in reducing the emissions of also of industries that are in the dairy industry. And any reduction of emissions right now that we can achieve is a good thing.”
“It would be a mistake to say regenerative is cattle — because it simply isn’t,” he also asserts. “We are currently rewarding only agricultural methods — for example the cover crop, the catch crop — so plant-based methods. That’s — at the moment — what we do.”
On the question of whether there is any tension between an approach that’s focused on encouraging a reduction in emissions, whatever the farmer is doing — and claims therefore to be “climate-positive” — but which isn’t supporting farmers to make a full-fat transition to low carbon agriculture (i.e. if they’re doing a type of farming that sustains high carbon livestock farming), Gerlach argues that both reduction and transition need to happen in parallel. He also suggests there are signs this is already happening, such as around dairy with the rise of plant-based milks and vegan cheeses.
“Right now — at least in the most developed countries — there is a clear transition away from dairy-based products. If you go to the supermarket now and compare the milk shelves to ten years ago, currently you have over half a milk and almost nothing dairy based. That goes on in parallel,” he argues. “And at the same time what you already have right now and still have you need to reduce the impact — so you’re absolutely right; you need to tackle both things: Transition and reduction in parallel. Only then do you have a chance to achieve the climate targets.”
But isn’t there a risk that regenerative agriculture — by allowing farmers to apply an environmentally friendly sounding label to small changes in their methods rather than transformative leaps — it could actually slow the transition to low carbon food production that’s critically needed if we’re to avert climate disaster?
“May I ask the question in return?” he responds. “Imagine you have a large company that is considering to reduce the emissions from their dairy production by 50%. Would you tell them not to do it because they should rather go out of business or would you help them to reduce the emissions?”
We counter by pointing out there’s another option: Provide support to those farmers to transition away from dairy to plant-based agriculture. “Well, you will have to offer both things,” Gerlach suggests. “Our role is actually to enable the transition to regenerative agriculture — and to that role we are, in a way, bound. So I think both things happen but the transition of moving from a meat-based to a plant-based economy is one that is driven by the consumer.”
He also argues — quite rightly — that climate change won’t have one simple ‘panacea’ fix. Change is certainly needed wholesale, everywhere, root and branch, across every industry and sector.
However that shouldn’t be used as an excuse to sustain the unsustainable — and risk delaying an already dangerously overdue transition to sustainable food production. There are already plenty of viable low carbon protein alternatives that can take the place of animal-derived proteins on the plate. (Vegetarian food is not some fancy new invention, after all; large swathes of the developing world have long consumed a predominantly plant-based diet.)
So there’s undoubtedly a balance to be struck here between hand-holding farmers and consumers and express-fixing an industrialized food system that’s dragging us down the path to climate disaster at top speed.
Gerlach makes another point that if one region were to make a too radically sudden switch away from livestock farming or producing animal-derived proteins it could just drive demand for the same food to produced elsewhere but less sustainably — i.e. to cater to ongoing consumer demand which local farmers have stopped serving — with the risk of an overall net negative for the climate as emissions are ‘outsourced’, rather than shrunk.
So yes, there are certainly complex and intertwined impacts to consider. But, also, with the right policy nudges and incentives, there should be ways to mitigate such risks and create appetite for locally produced low carbon alternatives. (Such as, for example, by championing homegrown ‘true climate’ farming heroes.)
“If you’re totally rational about it, the question you ask is precisely the right one: Where do you have the biggest climate impact?” Gerlach concedes. “If you now say dairy industry you should not reduce your emissions you should go out of business — or if you should say you should slowly reduce your production, because consumer demand does it, and what you still produce — or need to produce — you should reduce your emissions? I personally believe in a combination.
“The question you ask — whether you slow down a transition — of course it’s a justified question. I personally don’t think you do. I think the transition towards a plant-based diet is such a strong movement right now nothing will slow that down and, if anything, regenerative agriculture will accelerate it.
“Why? Because regenerative agriculture has another benefit: With regenerative agriculture I regenerate the soil, I improve the nutrition availability in the soil, and I improve the nutrition density of the vegetarian food — the plant-based food — that I generate so I make it a higher quality. So actually you increase the demand for regeneratively sourced plant-based food which should actually drive the ‘from red to green’ transition even faster.”
“You have to always look at the reality of where we are now — and where we need to be in 10, and 20 and 50 years,” he also argues, suggesting that regenerative agriculture has an inescapable role to play in climate action as part of a cross-cutting collective. “I know that currently everything in the food sector is about alternative proteins and meat. It would not be fair to reduce regenerative agriculture to cattle raising and therefore compare it to meat alternatives… It would be misleading.
“Even if you would assume we could raise protein and perhaps even other nutritions completely in the factory right now and even if you assume we can do so with an energy balance that is better than natural farming, which most people actually doubt, you would still need to create a roadmap to feed 8BN people this way. And on that roadmap there’s clearly a role for agriculture. If anybody tells you in the next 10 or 20 years there’s a case for feeding 8BN people without agriculture then I don’t know what to say anymore. So if you accept that you need agriculture to feed 8BN people at least in the next 20 years — and, I wager, much longer; permanently — then you also need to accept that reducing the climate emissions from this form of natural agriculture is a good thing.”
“I don’t believe that with artificial proteins alone we can now achieve the 1.5 degrees temperature target,” he adds. “I don’t believe that we could scale up alternative proteins in the next five years to feed 8BN people so that we don’t need agriculture at all anymore and that we achieve the 1.5 degree target. That I don’t believe. If it’s possible then I would be very happy because I’m most of all concerned about the climate. But I don’t think it’s possible. So the simple answer is — if that hypothesis is true then you need agriculture and if you need agriculture then it is a good thing to reduce the emissions in agriculture.”
Few would likely argue with Gerlach on the ‘moonshot’ artificial proteins point. But there may be more debate about whether the gentler, more incremental transition allowed for by regenerative proponents can really hope to shrink carbon emissions fast enough for us to avoid suffering major climate harms.
Clearly it will take massive uptake of regenerative methods — whole continents of farmers switching, not just a few villages’ worth of farms — to stand any chance of having the scale of impact requires. But Gerlach’s point is that if every industry takes up the baton to phase down emissions in collective parallel there’s reason for hope.
“If we want to have any realistic chance of achieving the 1.5 degree temperature targets we need to A) stop dreaming about some far away, not ready technologies that will never be able to scale up to achieve that goal. B) we need to be able to reduce emissions in all sectors, massively, not only in food production — in industrial production, in home energy use, everywhere. And we need to capture as much CO2 from the atmosphere in the form of negative emissions and store as much as we can in soils, in biomass, or elsewhere,” he argues.
“It’s a combination of all the technologies that are available — each one of them pushed like crazy. And only if we all work together, and if we all say it’s better to actually make an impact now, even though not perfect, than to say it’s not perfect and therefore I rather don’t do anything at all — only then do we have a chance.”
Seen from that perspective, ‘climate sinning’ famers doing their bit to go greener can form a meaningful piece of a ‘climate-positive’ collective action patchwork. Or, well, that’s the hope.
Klim harvests $6.6M seed to get more farmers growing greener by Natasha Lomas originally published on TechCrunch
The global problem of an over-abundance of CO2 in the atmosphere is ongoing, and a huge area that needs to be addressed, given the amount pumped out by industry. It’s hoped that if carbon dioxide could be converted at the point of emission, we could deal with the climate crisis a lot faster and create a sustainable carbon economy.
There are a few companies trying to tackle this. Zurich-based Climeworks is capturing CO2 from the air via commercial carbon dioxide removal technology, and has raised $784M so far. US-based Lanzatech is doing something similar, turning turning carbon into feedstock. It has raised $310.4M.
Now Copenhagen-based BioTech company SecondCircle thinks it also has a novel approach.
It claims to be able to capture CO2 from industrial emitters at the point of emission using ‘synthetic biology’ to develop biocatalysts (bacteria). These then convert the carbon dioxide into chemical compounds that are sold back to industry. If it cane be scaled-up, this could turn even emissions into a revenue opportunity.
The company has now closed a €1.2M Pre-Seed round led by Berlin-based early stage investor Atlantic Labs. But it has a lot more to play with than that. It also has a €43m EU grant to scale-up the process, as it is part of a consortium which received cash from the EU’s Horizon 2020 research and innovation programme. Dubbed “PyroCO2” the project aims to demonstrate the large-scale conversion of industrial carbon emissions into value-added chemicals and materials.
Torbjørn Ølshøj Jensen, co-founder and CEO of SecondCircle said in a statement: “We strongly believe that we can only solve the global CO2 problem by building new approaches for sustainable value creation from inevitable emissions.”
Synthetic biology’ technology is already starting to be widely applied in a number of areas. SecondCircle spun out of the Biosustain NNF Center for Biosustainability at the Danish Technical University. Founded in 2020 and based in Copenhagen, the company is run by the founding team Alex Toftgaard Nielsen, Stephanie Redl, Torbjørn Ølshøj Jensen.
“By capturing carbon at the source and converting it into highly valuable products, SecondCircle has the potential to reduce customers’ emissions and simultaneously turn the unit economics of carbon capture on its head by finally having a profitable use case. Supporting this team was a no brainer for us,” added Max Kufner, Principal at Atlantic Labs.
When it comes to geospatial and mapping data and how they are leveraged by organizations, satellites continue to play a critical role when it comes to sourcing raw information. Getting that raw data into a state that can be usable by enterprises, however, is a different story. Today, a Berlin-based startup called LiveEO, which has built a satellite analytics platform to do just that, has raised €19 million ($19.5 million) on the back of strong demand for its tech from companies working in transportation and energy infrastructure.
The rise of companies like LiveEO comes on the back of a period of rapid commercialization in infrastructure intended to be used in space, typified by companies like SpaceX but also others building, for example, a new wave of satellites themselves. As with the larger opportunity in enterprise IT, big data players like LiveEO are essentially the second wave of that development: applications built leveraging that infrastructure.
“Someone has to build applications for end users to really make it simple to use and integrate that data into processes,” explained Daniel Seidel (left), who co-founded and co-leads LiveEO with Sven Przywarra (right). “That is what we are doing at scale.”
MMC Ventures is leading the investment, a Series B, and in addition to €17M of venture capital, the round also includes backing from two public bodies, the European Commission and Investitionsbank Berlin. Previous backers Dieter von Holtzbrinck Ventures (DvH Ventures), Helen Ventures, Matterwave, and motu ventures, and new backers Segenia Capital and Hannover Digital Investments (HDInv), are also participating. LiveEO had previously raised €5.25 million Series A in 2021, and it said that in that time, it’s tripled revenues with customers in five continents and more than doubled its headcount to about 100, with more than half of those engineers and data scientists.
As a German startup, LiveEO is one of a small but growing group of startups in Europe capitalizing on increasing interest in space among investors in recent years, despite the wider pressures on tech finance. Relatively speaking, though, the sums are still modest compared with other areas of tech: LiveEO says that this €19 million round is one of the largest in earth observation tech in Europe. LiveEO is focused on enterprise, specifically industrial applications for its analytics — although given the geopolitical landscape, and how that is bringing a new host of interested parties playing the part of financiers to foster its growth, it will be interesting to see how that develops.
LiveEO’s platform addresses a specific gap between space tech and enterprise data. Satellites are collectively producing more data about our world than ever before, covering not just physical objects in the most minute detail, but thermal progressions, how systems are moving, and more.
Ironically, a lot of that data is very locked up when it comes to enterprises using it: given the fragmentation in the satellite industry itself, the data is not only often in very raw, formats, but coming from multiple sources, too, so getting it into forms that can be integrated into existing IT systems and specifically (and more trickily) the IT systems that integrate with the infrastructure that is the building block of a lot of industrial deployments — let alone parsing it for insights — are all tall tasks, so much so that the opportunities of doing them often go unrealized.
The core of the company’s platform brings all this together, in what LiveEO describes as an “infrastructure monitoring suite powered by satellite imagery.” This involves taking the earth observation data produced by satellites and applying AI to it to analyze it in the context of what LiveEO’s industrial clients — which include major railway companies like Deutsche Bahn, or the energy company e.on — are seeking to understand better.
That could include data on risks from vegetation on railways or other lines; ground deformation; or other physical movements or activities; and it also includes the ability for an LiveEO user to directly integrate this data to link up with its own IT management systems for its infrastructure, for example those that monitor systems to make sure they are working as they should. It also pitches its solution as greener: using satellites to source the kind of geographic data that these industrial applications need means no need to use on-the-ground teams and vehicles to source it in other ways.
“One of the great advantages of satellite data is that we don’t require hardware to be installed at the infrastructure itself,” said Przywarra.
That data, they believe, is also more complete: as Seidel describes it, the combination of terabytes of data from multiple sources means it is not just 3D, but “4D” — with thermal and other kinds of details available, “is like the difference between using an image from a smartphone, and a high-end camera with high resolution.”
All of this is also still a relatively new field, Przywarra added. “Prior to Google Earth, satellite maps were only used by experts,” he said. “We enable more non-experts to use satellite data. We make it accessible and usable.”
Lead investor MMC is one of the more prominent deep tech investors in Europe, and it’s notable that they’re putting focus in this area as an opportunity.
“We are excited to lead this round for LiveEO and it reflects MMC’s continued focus on emerging datasets and companies that develop AI analytics to power core business decisions,” said Andrei Dvornic, a principal at MMC Ventures, in a statement. “LiveEO offers a critical tool that paves the way for sustainable industry automation, and we wholeheartedly support the company’s vision of leveraging satellite technologies, big data, and the latest developments in artificial intelligence to help companies adapt to the challenges posed by climate change.”
There’s around 250,000 hair and beauty professionals working across the U.K., and Glambook wants to be the sharing economy platform that takes care of them.
The company recently raised $2.5 million at a $12 million valuation, and I managed to talk it into letting me share its pitch deck with you to see how the company wove its story to its investors.
We’re looking for more unique pitch decks to tear down, so if you want to submit your own, here’s how you can do that.
Slides in this deck
Glambook raised its investment with a 19-slide deck, and they agreed to share it with us in full:
- Cover slide
- Problem slide
- “Unsolved for a reason” — opportunity slide
- Solution slide
- Value Proposition slide
- “People love our product” — product validation slide
- Market slide
- Addressable market slide
- Traction slide
- “Why Now” — timing slide
- Positioning slide
- Business Model slide
- Go-to-market slide
- Road map slide
- Social Impact slide
- Team slide
- “Here is our story” — the “why us” slide
- Summary slide
- Contact slide
Three things to love
For an early-stage company, Glambook has a lot going for it — it is seeing meaningful traction and operates in an interesting market. The biggest challenge the company has to overcome is convincing investors that this is a market that is, indeed, clamoring for a technology makeover. And it does a pretty damn good job.
Here are three things that work particularly well:
TractiooooooooooooonIs your team awful? Is your product garbage? Is your market niche? I’m not saying that any of those things apply to Glambook, but in general, none of it matters if you have traction.
You can counter almost every question with: “Perhaps it’s stupid, but look at the numbers. It’s working!” Really, the question becomes why it works, and if you can keep it working, even at scale.
For a relatively small, $2.5 million round, having 20,000 customers across 38 countries is impressive. (Although I also note that the most important traction metrics — How sticky is it? How many orders are facilitated? How much revenue is being generated? — are missing.)
The story Glambook is selling here is that “Things are changing, and we are right there as it does,” which is the perfect place to be as an early-stage startup.
More importantly, saying there are subscription sales happening without including monthly or annual recurring revenue figures isn’t great storytelling. I’m impressed by the number of countries and the number of professionals on this slide, but I also want to know the number of clients and the value of the subscriptions. Not including those figures makes me immediately suspicious.
Those are asides, though. The company is showing real, measurable, important figures. The takeaway here is that if your company has those, show them off with pride. Why? VCs invest in inherently high-risk businesses. Any traction — and any progress — goes a long way toward showing that the business is at least partially de-risked.
As I mentioned, if you’ve got traction, you’re doing something right, and that something can probably be developed into a good company one way or another.
A rising tideGlambook uses this slide to tell the story of a market in evolution. In 2019, 54% of hairdressing and barbering professionals were self-employed, and by 2020, that had grown to 60%.
I’d have loved to have a graph pulling this data back further into the past for a longer timespan so I could see more of a trend, but there’s something powerful happening in this market, without a doubt. The story Glambook is selling here is that “Things are changing, and we are right there as they do,” which is the perfect place to be for an early-stage startup.
If you can weave macroeconomics and big societal changes into your pitch and show off how you are benefiting from them, you potentially have a winner.
This slide is titled “Why now,” but I think it walks hand in hand with another slide, titled “Unsolved for a reason.” I’ll talk more about that later, but suffice it to say that with this deck, the company signals some of its biggest challenges without offering a 100% satisfactory answer.
“This market is bigger than you’d think”A lot of the time as a VC, you’ll be pitched companies in industries and markets you aren’t that familiar with. I had to sit with that for a moment in this case.
Beauticians, hairdressers and barbers — is that really a big enough market to build a business empire around? The U.K. has a population of 67 million or so, so if those numbers are okay, there’s around 1,400 people per hair and beauty business. That would have to mean that around 4% of the U.K. population works as beauticians, hairdressers and barbers.
Just as a gut check, that sounds a little bit high to me, but a quick Google search results in the article the company cites on this slide, which seems to confirm those numbers. That is exciting, not least because a few searches also don’t identify a clear market leader in this space. Could Glambook become that market leader?
The pitch here is slightly unfocused: Glambook is a Berlin-based company that uses a lot of U.K.-based stats while also saying it has customers in 38 countries (I’ll get to that in just a moment as well.). The important part of this particular slide is illustrating that there’s a huge market that’s ripe for disruption.
As an investor, that’s the kind of thing that makes me lean forward and pay extra attention.
In the rest of this teardown, we’ll take a look at three things Glambook could have improved or done differently, along with its full pitch deck!
Uber is testing adding train and coach travel to its app in the UK so customers can book longer distance ground travel via a fully integrated tie-up with Berlin-based multimodal travel platform, Omio.
The latter has built up its own consumer facing apps for booking intercity and international travel, across a wide variety of supported transport options, over almost a decade of operations. But, in recent years, it’s been ploughing resource into building out a b2b line — making its inventory available to partners via APIs so they can add transport booking options to their own apps and platforms.
Uber isn’t the first such tie up for Omio, per founder and CEO Naren Shaam. But he tells TechCrunch it’s the first partner to get full access to its ground transport inventory — which covers more than 1,000 transportation providers across 37 countries at this point.
“Uber is the first partner that is both at this scale but also the first that gets access to our full ticketing API so you actually are, as a customer, able to do everything within the Uber app — so it is the first with respect to this product that we’re offering,” he says.
Omio’s earlier b2b partnerships include some transport providers themselves, such as UK-based LNER, as well as the travel search engine Kayak and smartphone maker Huawei, among others.
The ride hailing giant is also the biggest b2b partner Omio has signed up so far: Shaam says the tie-up will put its inventory in front of the circa 5 million+ customers Uber claims in the UK market.
And while Omio’s own app includes non-ground transport options (like ferries and even flights) he says its platform remains strongest in inventory terms for booking train and coach/bus travel — hence why it’s starting there with Uber. Although Shaam hints there could be more to come. “This is the beginning of our partnership; it will expand — beyond just geography,” he suggests, noting that Omio’s b2b partners can “pick and choose” from its full inventory range of supported transport models to offer their own customers.
“It is very clear to me that we’re never going to have 100% of all the eyeballs in the wall using only Omio so very much the company is evolving into a more data company — where the data and our inventory becomes a core asset,” he adds, discussing its ramping up of focus on b2b alongside what he couches as a nicely scaling b2c business of its own.
“We spent years building very unique inventory… so actually during the pandemic… we realized that what we built — the core of the asset — is unique inventory that is very hard to access anywhere so we started building a team for b2b.”
From the get-go, the ground transport tie-up via Omio’s API will enable UK Uber users to book international trains if they’re so inclined.
Albeit actually getting out of the country and into France may prove more challenging — given recent post-Brexit travel chaos hitting holidaymakers at borders and in airports (related to post-pandemic staffing issues), not to mention ongoing pay-related train strikes over the summer… (Shaam confirms Omio has seen some of that disruption in its UK data, with users switching to shorter distance travel, for example, but he says he expects such changes to be temporary.)
Commenting on the tie-up in a statement, Andrew Brem, general manager of Uber UK, said: “We’re excited to launch our new travel offering this summer, allowing a seamless door-to-door travel experience across the UK. Partnering with Omio will accelerate our efforts to become the go-to travel app for our UK users”.
Trips booked via Uber’s app using Omio’s API generate a commission for Omio — a portion of which it passes back to Uber for bringing it the custom. (The commission split isn’t being disclosed.) It’s also generating revenue from Uber by licensing its tech.
For its part, Uber has been long been expanding its core ride hailing platform by integrating additional functionality — targeting becoming an urban convenience hub (aka a ‘super app’) where you can book everything from dinner and a movie as well as order a ride to get there.
So adding longer distance ground transport adds another string to that play and could help it tack on last mile ride hailing journeys at either end of a train trip, say. Or (re)capture some revenue from users who may be switching from ride hailing to cheaper rail or coach options if they can be persuaded to make those bookings in its app.
Challenges for Uber to turn a profit also remain. Reporting Q2 earnings yesterday it still couldn’t claim that — but it did generate another quarter of free cash flow and was rewarded by investors bumping its share price on another positive signal that suggests it can at least self fund so won’t literally burn itself out of cash.
Returning to the Omio tie-up, Shaam says ground transport booking functionality provided by its API will be added to Uber’s app in phases with a basic set of features at launch today — which he expects Uber to build out over the coming months.
“It’s a new product for Uber and while we have a lot of knowledge over time building long distance ground transport Uber focuses mainly on inner city public transport and the use cases are very different. Long distance you have multiple fare class, cancelation, a reservation system, seat reservation etc — very different product than just a ride hailing product — so it is going to be in phases where they add multiple products.
“So the first one will be in your ‘transit tab’ — where you can search from, say, London to Manchester or Oxford or even Heathrow Express, or London to Paris on Eurostar, and you can fully transact on the Uber transit product long distance train or bus.”
“The full extent of the basic aspects of the product should be there in the first instance, I think — I do believe the add ons come as they bring the Uber magic to life,” he adds.
But will Uber users — who typically use the app for booking a quick cab trip or a hot meal — really think to use its platform for a less spur-of-the-moment purchase like a train or bus trip to another city or region?
Responding to that, Shaam points to “high overlap”, in terms of customers, despite the two products being built for very different use cases — while also playing up some “complementary” segmentation between these respective customer bases (noting for example that Uber has a higher share of business travellers among its users). So the suggestion is there’s enough similarity and difference between their platforms for the tie-up to drive new business for both of them.
Shaam won’t be drawn into sharing any internal estimates for how many Uber customers it expects to pick up but he does say they’re hoping the tie-up will help Omio substantially increase its penetration of the UK market — which he confirms is not one of its bigger markets currently.
Asked if Uber will be rolling the transport booking feature out to other markets — such as the US — he also sounds hopeful, while affirming that today’s launch is a bit of a test to see how users take to it. So how far this long(er) distance travel booking feature flies within Uber’s digital real estate remains to be seen.
“The partnership, hopefully, is not limited to the UK but it is a new product for Uber and they need to launch in one market, test and then hopefully depending on the success of that — for both sides — we intend very much to scale it,” he adds.
Omio has generally emerged from the COVID-19 travel freeze and pandemic disruption in upbeat mood — announcing an $80M Series E top up to its funding in June and reporting rebounding demand which Shaam reiterates again now. He remains on bullish form, talking up the scale of the mobile booking opportunity yet to be captured when it comes to the kind of intercity/longer haul travel demand Omio has made it its mission to service.
“One of the bets we made during the pandemic is a massive shift from kiosk [based-booking] to mobile because of what happened with COVID-19,” he says. “For me it’s a surprise that 50%+ of the entire rail industry still sells its tickets at a kiosk. If you actually look at it, both hotels and airlines are higher basket — higher average basket — slightly even more complex experience and no one I speak to can remember ever booking a flight outside of the Internet or in the offline world so it’s very much still an industry that is significantly offline and that whole thing will come to mobile — because of the simplicity of the way train products work (per geography).
“Most of it I think will become mobile and our own data shows that 80% of all our tickets are sold on the phone. Incredible when you compare it to other travel segments. So for me it’s a natural trend that’s happening which has been accelerated by COVID-19 — so this is something we can bet on quite comfortably; a switch to mobile will be accelerated with more products and more service links.”
Mobile app- vs kiosk-based booking can woo travellers by helping them beat (at least some of) the queues, he suggests, or avoid unfriendly user interfaces on outdated ticket office machines that might not even support the user’s local language and aren’t often upgraded.
You could say Omio’s vision for its travel business, post-pandemic, is ‘onward, upward and outward’ — with a strategy to spread its utility far and wide by integrating into all sorts of other apps (or super apps) that travellers might want to use to get where they need to go. And Shaam confirms it has further b2b partnerships in the works.
“The goal of our b2b business is very much like a SaaS,” he adds. “You plug in once and then it — hopefully — adds annual recurring revenue and we just add more partners in different verticals… to parallel industries and give them a piece of our revenue so the economics is also attractive for anyone that wants to sell transport but wouldn’t necessarily want to, or have the capital to… put in the effort to rebuild 1,000 integrations in 37 countries because it’s a single API, less than one second latency. You plug into Omio and then you’re plugged into our entire ecosystem.”
Babbel, the popular subscription-based online language learning service, today announced a couple of updates about its U.S. businesses — the Berlin-based company’s largest market by overall revenue and its fastest growing one, too. In the first half of 2022, the company sold more than 1 million subscriptions in the U.S and it’s now also extending its B2B business to the U.S. as well.
A few years ago, Babbel squarely set its sights on the U.S. when it brought on Julie Hansen, the former COO and president of Business Insider, as its CRO and U.S. CEO. It’s maybe no surprise that the company is now looking to expand the B2B side of its business as well. So far, the company only expects to see about 6% of its total revenue come from its B2B business by the end of the year, but it’s a growing part of its overall business. “B2B is a slower build,” Hansen told me. “It’s a people-led business. But it’s growing really nicely. We’re actually ahead of goal so far this year.”
To push ahead, Babbel has hired a group of salespeople in the U.S. and is starting to see some traction with U.S. businesses, including a number of MLB teams, for example. Hansen noted that the U.S. market is also quite different from the European market in this respect.
“[The U.S. market] is different from Europe, where we’re largely serving a white-collar audience — multinational companies, sometimes its frontline workers, a hotel desk, etc. Very often, it’s intra-company communication, as well as between companies. In the US, we have some of that, but we have a lot of what you might consider more of a blue-collar workforce,” Hansen noted.
Overall, the company’s B2B side now works with over 1,000 companies and is seeing a revenue renewal rate of above 100%.
She also noted how Babbel has branched out from its origins as a mobile app in recent years. The company has launched more than 20 podcasts in recent years for example, but from the business perspective, its live classes continue to grow as well. Hansen noted that Babbel’s live classes saw 300% year-over-year user growth and 400% year-over-year revenue growth, something she attributed to Babbel changing its business model for these live classes from pre-class pricing to an all-you-can-eat (or learn?) subscription model. In Europe, the company’s live businesses saw more than 1 million Euros in revenue in May and June, the company tells me, and it’s also now launching in the U.S.
Like other educational apps, Babbel got some tailwinds during the early pandemic, as people decided that they might as well learn a new language while stuck at home. Interestingly, Babbel never saw a real slowdown during the later phases of the pandemic, in part because now, travel has once again become a major motivator for its customers.