Leanplum acquired by Clevertap as retention marketing platforms consolidate

CleverTap, a retention marketing platform which has raised $76.6M to date, is to fully acquire Bulgarian-originated but San Francisco-based Leanplum, a customer engagement platform which has raised $131.2M, for an undisclosed amount. The news was broken by South Eastern European startup news site The Recursive.

Sunil Thomas, CleverTap Cofounder and Executive Chairman said: “Like many private company transactions we are not disclosing the price and terms of the acquisition. This is a cash and stock transaction that is being funded by internal accrual and CleverTap stock.” The deal is expected to close in Q2 of 2022.

The most recent Series D investors in Leanplum included LAUNCHub Ventures, Shasta Ventures, Canaan Partners, and Kleiner Perkins.

This acquisition will give more global reach to CleverTap, with development centers and customer-facing teams across North America, Europe, Latin America, India, South East Asia and the Middle East. The company says it now has a total customer base of 1200 customers.

Thomas added: “Users today demand to be treated as individuals, and this has forced brands to change how they engage with them. CleverTap and Leanplum have both purposely built for a mobile-centric omnichannel world.”

“When we started Leanplum, our vision was to meet customers’ real-time needs at the cutting edge of technology,” said Momchil Kyurkchiev, Co-founder and Chief Product Officer of Leanplum in a statement. “We have succeeded in that, but as the market has matured, to fully meet the increasing demands put on brands today, we needed to bring in the best analytics, segmentation, and engagement tools, to help our customers build valuable, long-term relationships with their customers. This is why joining forces with CleverTap makes the most sense.”

CleverTap and Leanplum are well known in the retention marketing space but also compete with marketing automation software and that is a crowded category.

The acquisition is a possible sign that this market is consolidating.

YouTube teases expansion of livestream shopping with new features arriving later this year

In recent years, YouTube has been working to transform its platform into more of a shopping destination with product launches like shoppable ads or more recently, the ability to shop directly from livestreams hosted by creators. Now, it’s furthering that investment with new features for live shopping experiences. At yesterday’s YouTube Brandcast event, where the company pitched itself to advertisers as a better place for their TV ad dollars, YouTube teased upcoming features that it claimed would make it easier for viewers to discover and buy from brands.

The company touted its forthcoming tools as offering advertisers a better way to engage viewers and make connections with their audience.

One new feature, explained YouTube, will allow two creators to go live at the same time to cohost a single live shopping stream. This could effectively double the draw for the event, as each creator would bring their own fanbase to the stream.

This feature arrives shortly after YouTube in March announced a pilot program called “Go Live Together,” a new mobile collaborative streaming feature that would enable creators to invite guests to their livestream with a link before going live together. This trial suggested YouTube had its eye on developing tools to better power joint livestreams — just as it’s now planning to introduce with its upcoming two-person live shopping streams. The addition could also make YouTube more competitive with Instagram which launched the ability for creators to go live with up to three people last year.

In addition to leveraging creators to build an audience for a live shopping event, YouTube’s shopping livestreams platform also offers other tools specifically designed to drive sales. The brand-integrated shopping experience actually allows viewers to shop the products shown in the video by tapping on a built-in “view products” button which then brings up a list of items featured by the creators.

The company says its new two-person live shopping feature will roll out sometime later this year.

Another upcoming option announced at Brandcast is something YouTube calls “live redirects.”

In this case, creators will be able to start a shopping livestream on their channel, then redirect their audience over to a brand’s channel for fans to keep watching. This allows brands to tap into the power of the creator’s platform and reach their fanbase, but then gives the brands themselves access to that audience — and the key metrics and analytics associated with their live event — directly on their own YouTube channel. This will also roll out sometime this year, says YouTube, but didn’t provide a timeframe.

YouTube’s announcements follow the broader growth of the live e-commerce market in the U.S. — a trend inspired by the livestream shopping activity surging in China, where streamers can pull in billions of dollars in a matter of hours. Today, a number of startups have also entered this space, including TalkShopLive, PopShop Live, NTWRK, Whatnot, ShopShops, Supergreat, and others. Klarna even added virtual shopping capabilities to connect its buy-now, pay-later customers with live product demos from retail partners.

Retailers, too, are getting in on the action. Nordstrom launched a live events platform, while Forever 21 and Macy’s are among those that added live shopping to their apps.

Meanwhile, big tech platforms are wooing brands by touting their wider reach.

Over the past year or so, we’ve seen Walmart pilot testing TikTok’s first livestreamed shopping experience; Facebook’s live shopping boosting sales for brands like Petco, Benefit, Samsung, Anne Klein, and others; and Instagram hosting live shopping events to cater to holiday crowds. Twitter even began to test livestream shopping, also with Walmart’s help on its pilot run — but it’s unclear where such initiatives will land if the Elon Musk buyout comes to pass.

While YouTube is certainly one of the largest creator platforms for video, there is some indication that it needs to catch up to its big tech rivals in livestream shopping, however. An eMarketer study from Jan. 2022 found that only 14.4% of survey respondents said YouTube’s platform drove them to purchase during a livestream event compared with 15.8% for TikTok, 45.8% for Instagram, and 57.8% for Facebook.

Image Credits: eMarketer/Insider Intelligence

YouTube’s new livestream features — and particularly the one that pushes a creator’s fanbase to a brand’s channel — could make its solution more compelling.

“People come to YouTube every day to make decisions about what to buy, and 87% of viewers say that when they’re shopping or browsing on YouTube, they feel like they can make a faster decision about what to purchase because of all the information that we have in videos,” said YouTube CEO Susan Wojcicki, speaking to the audience at the Brandcast live event last night. “We have so much shopping activity that is already happening on YouTube, so we are making it even easier for viewers to discover and to buy,” she said.

Harlem Capital leads seed into Because, an e-commerce enablement startup

With global e-commerce sales poised to be a $5.5 billion industry this year, startups in the e-commerce enablement software space are looking to carve out a niche in this huge market.

One of those is Because, a startup developing no-code software connecting disparate data sources to automate high volumes of website updates.

Founder and CEO Ashland Stansbury explained that e-commerce companies are spending a collective $1.3 trillion to drive traffic to their websites, but only 3% of that leads to a customer purchase. In addition, the average business owner on Shopify is managing a large product catalog, often with over 50 products.

How content is typically updated is that a manager has to go into each website page and change anything manually, often leading to misinformation and mistakes.

Instead, Tampa-based Because, which was launched in November 2020, comes in to provide a “Canva-like” editing experience where e-commerce managers can design and publish messages, for example, about delivery and availability, promotions and shipping costs, aimed at driving conversion rates.

“We estimate a dozen to hundreds of hours are saved per month using Because,” Stansbury told TechCrunch. “It is also saving developer hours.”

Though some companies throw around the phrase “no-code,” they still require some coding ability, but Stansbury says Because does not. There is a campaign dashboard featuring different types of content and templates to pull from, very similar to Canva, and the manager can automatically fit in the brand and colors of the store and then change font, text or colors, and drag and drop to see what it would look like live.

Because, e-commerce enablement

Image Credits: Because / app example of campaign development

Because’s “sweet spot,” so to speak, is its rules engine for inventory. Instead of having to go product by product, the engine shows only products with an abundance of inventory or just a few left.

Within the e-commerce industry, the e-commerce software and platform market is expected to be valued at nearly $4 billion in 2022, and triple that by 2032. Companies like Melonn, CommerceIQ, CJ Dropshipping, Gelato and Moonshot Brands are also operating in this space.

Because raised $650,000 in angel investment last year, which enabled the company to grow to over 900 merchants and 150 paying customers.

Now armed with a new infusion of capital, a $3 million seed round, Because plans to grow its product and team; build out integrations with additional c-commerce platforms like Klaviyo, Smile.io and ShipBob; and leverage artificial intelligence to predict the exact message site users need to purchase and to compare their results against other stores in similar industries and geographies.

Harlem Capital led the round, and this is the third investment from them we have reported on in a month, which includes Drip and Glow Labs. Joining Harlem in the investment are Studio VC, North Coast Ventures, Gaingels and angel investors, including certain former Shopify executives.

Meanwhile, Stansbury says Because can drive an average of 38% increase in cart rate, typically in the first 90 days of integration. Her addressable market is quite large already — it is currently on Shopify, where there are over 700,000 merchants with 50 products or more to manage, she added.

“Growth has hit a real-life hockey stick, and it has been a team of myself and two engineers for the last year,” she added. “Now we will be investing in sales and marketing and rounding out the leadership team with a head of product and head of sales.”

ZMO.ai secures $8M led by Hillhouse to create AI generated fashion models

With breakthroughs in machine learning, it’s no longer uncommon to see algorithmically generated bodies that can move and talk authentically like real humans. The question is now down to whether startups offering such products can achieve a sustainable business model. Some of them have demonstrated that potential and attracted investors.

ZMO.ai, founded by a team of Chinese entrepreneurs who have spent years studying and working abroad, just closed an $8 million Series A financing round led by Hillhouse Capital. GGV Capital and GSR Ventures also participated in the round.

The startup has found a healthy demand from fashion e-commerce companies that are struggling to hire and afford models due to their growing number of stock-keeping units (SKUs), or styles, as consumer tastes become more changeable. Using the generative adversarial network (GAN), ZMO has created a piece of software to help them create virtual full bodies of models by defining simple parameters like face, height, skin color, body shape, and pose.

“Traditionally, the entire cycle of garment manufacturing may take two to three months, from design, fabric selection, pattern making, modeling, to actually hitting the shelves,” says Ella Zhang, ZMO’s CEO and co-founder, a former engineer at Google and Apple.

“We are flipping and shortening that process. [Customers] can now test a piece of clothing by putting it on a virtual model, which can go on the website. Once orders come in, the e-commerce customer can start manufacturing,” she tells TechCrunch. “They can also test what type of people would suit a certain product by trying it out on different virtual models.”

It’s unsurprising that fashion e-commerce operators would find ZMO and its likes a cost-saving tool. Zhang says her company is in early discussion with fast fashion giant Shein, which rolls out 2,000-3,000 new products per day, about potential collaborations.

Screen capture of ZMO’s AI-generated video

We previously covered Surreal, a Sequoia-backed, Shenzhen-based startup also working on synthetic media to replace humans in lifestyle photos and other commercial scenarios. The business attracted a surge in interest as the COVID-19 pandemic hit China’s e-commerce exporters, who were having a hard time finding foreign models as the country went into strict border controls.

Going forward, ZMO is also planning to apply GPT-3, which uses big data and deep learning to imitate the natural language patterns of humans, to create speeches for models. As spooky as it may sound, the feature would make it breezy for e-commerce companies to churn out TikTok videos quickly and cheaply for product promotion.

On average, e-commerce companies spend around 3-5% of their annual gross merchandise value (a rough metric measuring sales, usually excluding returns and refunds) on photoshoots, according to Roger Yin, who worked at Evernote and ran his own cross-border e-commerce business before co-founding ZMO with Zhang.

“Images play a big role in driving e-commerce sales. The problem is that the [sales] cycle is short but the cost of images is high,” Yin observes, adding that costs can be even higher for fashion companies with a quick turnover of styles. The goal of ZMO is to reduce the costs of photoshoots to 1% of GMV.

Right now, 80% of ZMO’s customers are based in China, but it’s working to attract more overseas users this year using its new financial infusion. Operating with a team of 30 staff, the startup boasts 30 “medium and large-sized” customers, including Tencent-backed Chicv, one of Shein’s numerous challengers, and over 100 “small and medium” customers, such as dropshipping sellers.

ZMO’s other co-founders include Ma Liqian, a Ph.D. in computer vision who graduated from Belgium’s KU Leuven, and Yang Han, who previously worked on AI-powered styling at Tencent and SenseTime.

How to evolve your DTC startup’s data strategy and identify critical metrics

Direct-to-consumer companies generate a wealth of raw transactional data that needs to be refined into metrics and dimensions that founders and operators can interpret on a dashboard.

If you’re the founder of an e-commerce startup, there’s a pretty good chance you’re using a platform like Shopify, BigCommerce or WooCommerce, and one of the dozens of analytics extensions like RetentionX, Sensai metrics or ProfitWell that provide off-the-shelf reporting.

At a high level, these tools are excellent for helping you understand what’s happening in your business. But in our experience, we’ve learned that you’ll inevitably find yourself asking questions that your off-the-shelf extensions simply can’t answer.

We’re generally big fans of plug-and-play business intelligence tools, but they won’t scale with your business. Don’t rely on them after you’ve outgrown them.

Here are a couple of common problems that you or your data team may encounter with off-the-shelf dashboards:

  • Charts are typically based on a few standard dimensions and don’t provide enough flexibility to examine a certain segment from different angles to fully understand them.
  • Dashboards have calculation errors that are impossible to fix. It’s not uncommon for such dashboards to report the pre-discounted retail amount for orders in which a customer used a promo code at checkout. In the worst cases, this can lead founders to drastically overestimate their customer lifetime value (LTV) and overspend on marketing campaigns.

Even when founders are fully aware of the shortcomings of their data, they can find it difficult to take decisive action with confidence.

We’re generally big fans of plug-and-play business intelligence tools, but they won’t scale with your business. Don’t rely on them after you’ve outgrown them.

Evolving your startup’s data strategy

Building a data stack costs much less than it did a decade ago. As a result, many businesses are building one and harnessing the compounding value of these insights earlier in their journey.

But it’s no trivial task. For early-stage founders, the opportunity cost of any big project is immense. Many early-stage companies find themselves in an uncomfortable situation — they feel paralyzed by a lack of high-fidelity data. They need better business intelligence (BI) to become data driven, but they don’t have the resources to manage and execute the project.

This leaves founders with a few options:

  • Hire a seasoned data leader.
  • Hire a junior data professional and supplement them with experienced consultants.
  • Hire and manage experienced consultants directly.

All of these options have merits and drawbacks, and any of them can be executed well or poorly. Many companies delay building a data warehouse because of the cost of getting it right — or the fear of messing it up. Both are valid concerns!

Start by identifying your critical metrics

The e-commerce boom is still afoot in Africa, Jumia’s earnings indicate

Jumia, the pan-African e-commerce company and sole tech company based on the continent listed on the NYSE, released its first-quarter financial performance today. The company’s results included consistent growth but lapses in some areas compared with Jumia’s previous quarter. 

As always, the first page of every Jumia report highlights its year-over-year wins. The first quarter of 2022 was no different.

What did the company highlight in its wins section? Compared to the first quarter of 2021, Jumia recorded double-digit growth in orders, GMV and revenue. Orders grew by 40% year-over-year from 6.6 million to 9.3 million. GMV itself jumped by 27% year-over-year from $198.9 million to $252.7 million. And Jumia’s revenue reached $47.6 million, a 44% rise from Q1 2021’s revenue of $33 million. 

According to co-CEOs Jeremy Hodara and Sacha Poignonnec, Jumia saw its highest GMV, order and revenue growth rates of the past nine quarters in Q1 2022. But these numbers fell well below where the e-commerce giant ended 2021, with the last quarter recording GMV sales of $330 million, $62 million in revenue and 11.3 million orders made.  However, It’s unfair to compare any quarter with fourth quarters because they are typically hot with e-commerce activities from holiday festivities and Black Friday events every November.

Shares of Jumia are up sharply this morning, rising some 16% in early trading. That’s despite the company’s sequential-quarter decline in growth, as Jumia’s growth in Q1 2022 — in GMV, orders and revenue — comfortably bested what it recorded last year.

Fast-moving consumer goods or FMCG and food deliveries show the fastest growth among its quarterly active customer base of 3.1 million, up 28% year-over-year.

FMCG was Jumia’s second-largest category for items sold during Q1 2022. However, it was the fastest growing category, posting 180% year-over-year expansion. Jumia said this growth was supported by the momentum of “the grocery sub-category which we are currently developing.” According to a few sources that have spoken with TechCrunch recently, the e-commerce company is piloting a q-commerce or quick-commerce offering in Lagos to deliver groceries to people’s homes in an hour or less.

Food delivery grew 86% year-over-year, while phones and electronics grew 19% year-over-year despite “continued global supply chain volatility for these categories.” 

Other metrics detail Jumia’s growth acceleration. The total payment value (TPV) of its fintech arm, JumiaPay, grew by 36.7% to $70.7 million in the first quarter, primarily supported by solid growth in GMV. Total transactions on JumiaPay reached 3.2 million in Q1 2022, indicating a 32% year-over-year increase. Most of these transactions were from the food delivery category, with JumiaPay completing 34% of the orders on the platform throughout the quarter.

In April, JumiaPay was granted a Payment Service Solution Provider (“PSSP”) license by Nigeria’s apex bank, the Central Bank of Nigeria, to process payments for third-party businesses. The license offers a long-term and compounding growth avenue for JumiaPay. We should keep an eye on this category in succeeding quarters as the platform’s TPVs might reach nine figures by next year (personal projections here.) 

The company’s logistics business has faired well too. Last quarter, Q4 2021, the e-commerce platform shipped 3.3 million packages for 996 partners, up from 2.9 million packages for 766 clients the previous quarter. In Q1 2022, the pan-African e-commerce giant reached new highs, shipping over 3.5 million packages for 1,250 clients.

Moving on: Jumia’s losses are not coming down. Last quarter, the company said it planned to spend up to $55 million in sales and advertising in the first half of 2022. So far, it has coughed out $18.8 million this quarter in that category, up 94% year-over-year.

Jumia’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss was $53 million in Q1 2022, a 70% year-over-year increase. But it’s a sequential-quarter drop from the $70 million recorded in Q4 2021, a figure co-CEO Poignonnec, on a call with TechCrunch, said the company would ensure it doesn’t surpass going forward. 

The e-commerce company traded at $5.53 per share before its earnings call, a significant drop from the $25 range it traded in on the bourse this time last year. But its share prices fare better now at $6.87 (at the time of writing) as it has shown steady growth in the vital parts of its business in its earnings report. But mounting losses with profitability far in the future, blended with continued share sell-offs of tech companies from Q4 2021 up until now, has contributed to its depressed valuation compared to historical levels. 

From its Q4 2021 financials, Jumia said it finished the year with $512.8 million ($117.1 million of cash and cash equivalents and $395.7 million of term deposits and other financial assets). These figures now stand at $421.2 million, $88.7 million and $332.6 million, respectively, as of March 31, 2022.

Virtual product placement ads are coming to Amazon Prime Video and Peacock

Announced at this month’s NewFronts, Amazon and Peacock demonstrated new ad formats that use similar virtual product placement (VPP) tools, a post-production technique for inserting a brand into a TV show or movie scene.

Amazon presented its new VPP tool, currently operating in beta, that lets advertisers place their branded products directly into streaming content after they have already been filmed and produced. Meanwhile, Peacock’s new “In-Scene” ads will identify key moments within a show and digitally insert a brand’s customized messaging or product post-production so the brand is showcased in the right TV show/movie and at the right time.

Product placement is nothing new and has long been a holy grail of the advertising industry. In 2019 alone, product placement in the U.S. garnered about $11.44 billion, per Statista data. That same year, approximately 49% of American viewers took action after seeing product placement in media.

Brands that use product placement in movies and TV shows capture target markets and promote products in a subtle way. Research by Sortlist revealed that, on average, customers are being sold 12.61 products per movie without even noticing.

However, the strategy is outdated, and products used in the content, for instance, a can of coke on a table, are decisions that are made months in advance.

Streaming services are rethinking this technology and using virtual product placement allows the platform to introduce new ads in the future and remonetize a piece of content over and over again.

In an illustrative video, Amazon demonstrated how its new VPP program enables brands to strategically insert products post-production into content streaming from Amazon Prime Video and the newly rebranded Amazon Freevee. The video shown at Newfronts had an M&Ms billboard (pictured above) that was digitally added way after the show had been filmed.

Colleen Aubrey, Senior Vice President, Advertising Products & Tech at Amazon, explained to the audience, “Working with content creators and using machine learning, we’re able to insert products and branded findings into a TV show or movie.” Billboards, signs, and screens in any chosen show can now have specific messaging on the streamer. Amazon will now be able to integrate different products into episodes at different moments and scenes.

She added that the M&M’s virtual product placement drove an almost 7% increase in brand favorability and almost a 15% increase in purchase intent. This gives advertisers the ability to bring their brands “in the content instead of just around,” she said, giving more flexibility and opportunity for customers to easily discover and engage with products. “Amazon ads are helping advertisers create long-term connections with customers in very everyday interactions,” Aubrey said.

The virtual product placement beta program has already been implemented in several Prime Video and Freevee original series such as “Tom Clancy’s Jack Ryan,” “Bosch: Legacy,” and the overall Bosch franchise, “Reacher,” and “Leverage: Redemption.”

Henrik Bastin, Chief Executive of Fabel Entertainment and Executive Producer of “Bosch: Legacy,” said, “Virtual product placement is a game-changer. It creates the ability to film your series without thinking about all that is required with traditional placements during production. Instead, you can sit with the final cut and see where a product could be seamlessly and naturally integrated into the storytelling.”

Image Credits: Peacock

Peacock also announced their own digitally inserted ad strategy at NewFronts. The new In-Scene Ads are designed to strengthen commercial opportunities with marketing partners, seamlessly blending products and/or messaging with content during post-production to insert advertisements during scenes that are deemed relevant to customers.

John Jelley, SVP of Product and UX at Peacock, said, “The majority of Peacock customers are opting for our ad-supported experience,” he said, “and we remain focused on collaborating with our brand partners to develop innovative, personalized ad experiences that continue to enhance the customer experience.”

While maybe not as “mind-blowing” as people think, the possibility of customizing ads for different users is fascinating to think about.

The unique technology brought forth by Peacock, Amazon Prime Video, and Amazon Freevee has the potential to transform ad-supported streaming. The insertion of carefully curated, digitally implemented ads could become the new way streaming platforms and their marketing partners target audiences and increase ad revenue.

We’re curious to see how other streaming services improve their advertising methods. Especially now that ad-supported options have become more popular. Netflix and Disney+ are the latest to announce upcoming cheaper ad-supported tiers.

Twiga starts commercial farming, looking to guarantee quality, sustain supply

Twiga, a B2B e-commerce food distribution platform, has today announced the launch of its new subsidiary, Twiga Fresh, through which it will farm and distribute its own agricultural produce to traders.

Twiga said it has begun producing horticultural produce like onions, tomatoes and watermelons on its 650-hectare (1,606 acres) land, with an estimated output of 150,000 tons of fresh produce annually. Twiga has so far invested $10 million in the new venture, which will be backed by debt from development finance institutions.

Since launch, Twiga has used technology to link smallholder farmers with informal traders, giving the producers access to new markets and a large pool of clients, all while optimizing the food supply chain in its markets. However, along the way, Twiga says they have had to deal with traceability challenges, stock outs and price volatility – which has made it hard for the company to deliver on its promise of affordability and food security. With Twiga Fresh, the latest addition to its private label business, they project a better control of production.

“The volumes for other fresh products were low because we made a decision not to scale fresh produce where we did not have traceability from a food safety standpoint,” Twiga CEO and co-founder Peter Njonjo told TechCrunch, adding that the new business will not affect so many farmers.

Twiga said it will, however, continue sourcing some produce like bananas — where the value chains are more “established and efficient” — from partner farmers.

The company says its farm is one of the largest commercial fresh produce establishments targeting the domestic market since most large-scale horticultural businesses in the East African country export their harvests.

“Most of the Africa based investment in modern commercial farming has been made in the export-oriented industry over the years because of the low formality of the domestic food market. This has led to decreasing productivity of local farming, which has impacted both quality and pricing in the market,” said Njonjo who founded the company with ex-CEO Grant Brooke.

“The pricing today on basic fresh produce is one of the highest in history and we are also witnessing increasing importation of basic food items on account of this. Through building a B2B supply chain into informal retail, Twiga has been able to formalize the domestic food market using technology, putting the company in a unique situation to invest in backward integration and solve the problem of declining productivity and increasing cost of food,” he said.

Beyond Kenya, Twiga plans to start operations in Uganda and Tanzania soon, and is also exploring new markets in Central and West Africa.

Investors cheer as Coupang cuts net loss 29% in Q1

South Korean e-commerce platform Coupang said its first-quarter net loss shrank by 29% from a year earlier. The company posted a net loss of $209.2 million in Q1 this year, in contrast to last year’s net losses of $295 million in Q1 and $404.9 million in Q4, respectively. 

Investors cheered the result, sending the value of Coupang’s stock up up more than 13% in pre-market trading.

The SoftBank Vision Fund-backed company said in its earnings release it “recorded the highest gross profit and gross profit margin in the company’s history,” which in turn helped its product commerce segment achieve profitability in Q1. 

“In the first quarter, we recorded the highest gross profit and gross margin in the history of the company,” said Bom Kim, Coupang Chairman, said during its earnings call on Wednesday. “Generating over a billion dollars in the gross profit and exceeding 20% in gross margin. That represents a 42% improvement in gross profit year over year.” 

Coupang’s revenue grew to $5.12 billion in the period ending in March 2022, up from $4.2 billion in Q1 2021, representing 22% growth. The company also disclosed that its number of active customers grew 13% year over year. 

Saying that its results were “driven largely by initiatives around process improvement, automation and supply chain optimization,” Coupang managed to notch a $194 million improvement from Q4 2021 in its adjusted EBITDA, a heavily-adjusted profit metric.

The company was not profitable according to the measure, however, disclosing that its Q1 2022 adjusted EBITDA was -$91 million, albeit an improvement from red ink of $132.9 million a year earlier. 

“While we saw some headwind from inflation and some supply chain disruption in the past quarter, our result was net positive, due to improvement of process and technology, utilization of capacity, supply chain optimization and continue to scale advertising among other areas,” Kim said. 

One of Coupang’s fastest-growing offerings is Rocket Fresh, a same-day delivery service for fresh food in South Korea, which delivers to customers’ doors within hours of purchase, according to Kim. The service is available for subscribers to the Coupang’s membership program, Rocket Wow Club. (Such rapid delivery services have become popular around the world, despite concerns about their profitability.)

The firm recently raised its membership price for both new and existing customers to improve its profitability. 

“There continues to be a lot of unpredictable variables in the short term as we mentioned, but [the long term trajectory] we will continue to see growth significantly faster than the e-commerce segment,” Kim said in the call. 

As the company’s size gets bigger, it expects to see more benefits coming from economies of scale, and its ability to invest either in software and hardware automation and efficiency projects will help grow, the company said.

In March, SoftBank Vision Fund sold 50 million shares worth $1 billion for $20.87 each in Coupang after the Japanese fund had sold Coupang shares worth $1.69 billion in September 2021, according to filings to the U.S. Securities and Exchange Commission. 

European micromobility startup Reby acquired by PE player House of Lithium for $100M

Founded in 2018, European micromobility startup Reby took an interesting path. It deployed e-scooters in the city of Zaragoza (Spain), during the COVID-19 pandemic, but also created a SaaS-oriented ‘MaaS’ (mobility-as-a-service) platform. It then won 18 agreements with public administrations for e-mobility across Italy and Spain, slightly under the radar compared with large, well-funded players like Tier, Voi and Bolt. In other words, without needing to become a large player, it secured the kinds of European municipal licenses coveted by micromobility players.

Founded by four entrepreneurs (Pep Gómez, Kiran Thomas, Cristina Castillo, and Guillem Pagès), Reby has now been acquired by House of Lithium, a Canadian private equity firm, which was already a large shareholder in the company. The firm invests in private and publicly listed entities involved in or connected with the electric mobility value chain. The transaction is priced at $100 million. The company’s founder, Pep Gómez, with the rest of the management team, will continue managing Reby. The company says it closed the year with approximately $15M of revenue with approximately US$3M EBITDA.

Reby had raised a total of US$17.9M from EXOR, 14W Ventures, Neo Fund, Fuel Capital, Hard Yaka, Day One Ventures and some angels such as like Simon Rothman (Founder of eBay Motors and board member to Tesla and Lyft), Marcelo Gigliani (APAX Digital) and Hugo Arevalo (Jobandtalent).   

In a statement, Kevin Taylor, Chairman of House of Lithium, said: “Combining Reby’s leading IoT technology and proven ridesharing business model with House of Lithium’s manufacturing, distribution, e-commerce, and retail assets, will contribute to creating an end-to-end mobility platform to maximize top-line opportunities and bottom-line results.”

Reby made a point of manufacturing its own vehicles, eschewing Chinese-made scooters; operating only under exclusivity with city hall agreements; and financing vehicle investments largely with asset-backed debt.
                     
Gomez added: “The financial capacity and capital markets expertise of the House of Lithium team makes this a great partnership with the extra power that Reby needs to continue its growth… The time for EV companies burning money with artificial growth is over, giving us a massive opportunity to win in an untapped market focusing on infrastructure regulation and R&D development in security and public space occupation, which is imperative for cities.”
        
Reby is the second venture for Gomez, who at 19 years old was the sole founder of the Fever experiences app, which has raised $298.8M to date and was backed by Goldman Sachs, Accel Partners, and Rakuten, among others.