eBay acquires the sneaker authentication business from partner Sneaker Con Digital

Online marketplace eBay is further investing in its sneaker business with today’s news that it’s acquiring Sneaker Con Digital’s authentication business, which verifies the authenticity of high-value footwear. The business has operations in the U.S., U.K., Canada, Australia, and Germany, and had been previously working with eBay to vet the sneakers being bought and sold on its platform.

Sneakers have become a large category on eBay’s marketplace, where today there are over 1.9 million pairs available to buy every day.

In October 2020, eBay launched an “Authenticity Guarantee” service in partnership with Sneaker Con, whose team of experts would verify the sneakers at no cost to sellers before items were shipped to the buyers. If the buyer then returns the sneakers, the authenticators would inspect them again before they’re sent back to the seller. This multi-point inspection system involves checking various aspects of the shoes in question, including the sizing, labels, stitching, logos, heel tabs, laces, and more, and even the box itself.

When the shoes were verified, the left sneaker is given an NFC-enabled tag that provides more detailed information about the sneakers’ authenticity when scanned. Verifiable listings also receive a blue check mark next to the item. The service was available for any sneaker over $100 being sold on eBay’s platform.

Many buyers and sellers preferred to shop sneakers through eBay as they’d be able to see photos of the exact shoes they’d be getting, instead of stock photos, and there were fewer fees compared with some rival sneaker marketplaces. Attracting this kind of buyer is also part of eBay’s larger strategy to drive enthusiasts to its site across various high-end categories, like handbags, watches, and sneakers, then benefit as they shop more items on eBay. The company recently noted the average sneaker buyer on eBay spends approximately $2,000 in other categories, for example.

Ebay says its Authenticity Guarantee service led to quarter-over-quarter category growth and, in just over a year, it’s authenticated over 1.55 million sneakers worldwide.

In its Q3 2021 earnings, eBay also noted its U.S. sneaker business was healthy and growing at double-digit rates, and it was expanding to other markets, including Germany. The company additionally announced plans to invest in 3D image capability on sneaker listings that would allow buyers to interact with a 360-degree view of the item they’re purchasing, as another means of instilling buyer confidence.

With the acquisition, eBay is bringing its partnered authentication business in-house where it will continue to build on its offerings to accommodate resale market trends, the company said about today’s news. Deal terms were not disclosed.

However, the deal is only for Sneaker Con’s authentication business — its events business will continue to operate separately. The deal was signed and closed on November 24, 2021, notes eBay.

“eBay has always been a vibrant community of enthusiasts, with deeply knowledgeable buyers, sellers and employees,” said Jordan Sweetnam, SVP and General Manager of eBay North America, in a statement. “We partnered with Sneaker Con to launch sneaker authentication on eBay last year because the team shared our passion for the category – with best-in-class capabilities to deliver what our customers want most. The response to our authentication offering has been overwhelming, and this acquisition allows us to continue to transform eBay and bring a higher level of trust and confidence to every transaction,” he added.

This Week in Apps: Twitter launches livestream shopping, Netflix snags new games, Tile gets acquired

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.

Do you want This Week in Apps in your inbox every Saturday? Sign up here: techcrunch.com/newsletters

Top Stories

Twitter launches livestream shopping

Image Credits: Twitter

Twitter’s e-commerce initiatives now include livestream shopping, the company announced this week, and Walmart will be the first retailer to test the new platform. The Live Shopping service will take advantage of Twitter’s existing capabilities in livestreaming content and its newer e-commerce features, like the Shop Module for business profiles. During the upcoming livestream event, users will be able to watch the show, tweet to join the conversation from the Live Events page, and browse products on the “Shop” and “Latest” tabs just below the video. When ready to purchase, users will click through to the retailer’s website where the livestream will continue — so they don’t have to miss any of the show.

Walmart was a sensible first partner for the new effort, as the retailer has been increasingly investing in livestream events across social media. Over the past year, it hosted more than 15 livestream events across five platforms, including YouTube, TikTok and its own website, among others.

Its Twitter livestream will focus on Cyber Deals and will kick off on November 28 at 7 PM ET in the U.S. The stream will also be broadcast on Walmart.com/live, and across the retailer’s Facebook, Instagram, TikTok and YouTube accounts.

Twitter says this is the first-ever e-commerce livestream on its platform, but it plans to bring more experiences like this to its customers in the future.

The event will also serve as a means of testing the Twitter user base’s appetite for live shopping, which today often takes place on other social apps, like Instagram and Facebook, on dedicated live commerce platforms and on video services like YouTube and TikTok. But Twitter —  a place where users tend to track news, events, pop culture trends, politics and more — hasn’t yet defined itself as a platform. Its overabundance of new features released in the past year feel more like spaghetti being thrown at the wall to see what sticks, instead of a carefully planned roadmap. Twitter today wants to be a home to live audio, creator subscriptions, newsletters, bitcoin tipping, NFTs, private communities and more. But, in reality, only some of these things will actually work. For example, Twitter already had to kill its Stories feature (Fleets) due to lack of traction. And its early days of Super Follow, subscriptions didn’t produce much revenue.

Whether or not it will be able to offer the sort of live commerce experience that resonates with consumers and delivers retailers’ objectives still remains to be seen.

Weekly News

Platforms: Google

  • Google’s Play Store is testing out a new “Offers” section that’s different from the existing “Offers & Notifications” page in the app menu. Instead, it’s being used to bring up carousels of deals, limited-time specials and paid apps going free, while the “Offers & Notifications” section had only delivered a heavily curated list of offers, or, if none were available, the option to add a promo code.
  • Android 10 is still the most-used version of the Android OS, according to numbers crunched by 9to5Google using data provided through Android Studio. The Android 10 OS has a 26.5% market share, edging out Android 11’s 24.2%. Android 12 hasn’t yet made an appearance in the numbers.

E-commerce and delivery services

  • Uber enters the cannabis delivery market. The ride-hailing app announced that users in Ontario, Canada would be able to place cannabis orders on its Uber Eats app following its listing of cannabis retailer Tokyo Smoke on its marketplace. The company had said it would consider expanding cannabis delivery in the U.S. when the legality of doing so is made more clear.
  • Mobile advertising and app monetization company Tapjoy announced the launch of a rewarded shopping product, Tapjoy Shopping. The in-app marketplace lets consumers shop from hundreds of brands and retailers, and earn rewards in their favorite apps — like virtual currency — for their purchases. The feature is available in any of the over 10,000 apps that belong to Tapjoy’s network. Tapjoy says shopping offers like this have been increasingly important to mobile publishers after Cost Per Engagement app ads were banned on iOS.
  • France has asked search engines and app stores to remove the popular e-commerce platform Wish, which mostly sources products from China-based merchants. The order comes following France’s investigations into fraud, product safety and counterfeit goods on Wish, which found that 95% of toys on Wish didn’t comply with EU regulation, 45% were dangerous, 95% of electronics didn’t comply with regulation and 90% were dangerous.

Augmented Reality

Image Credits: Snap

  • Snapchat is bringing AR to holiday shopping. On Black Friday (11/26), the company will launch the Snap Holiday Market, which will feature immersive AR experiences from a half-dozen brand partners, including Amazon Prime Video, Coca-Cola, Hollister, Under Armour, Verizon and Walmart. Each brand will have a dedicated storefront where Snapchat users can browse their products and deal in an AR space designed for each brand. The market will be available from the Lens Carousel and the top of the “For You” tab in the Lens Explorer.
  • Snap also plans to offer AR try-on and e-commerce Lenses throughout the holiday shopping season, including those from brands like American Eagle, Fendi, Diork Kaja Beauty, NYX Cosmetics, Shein and Tory Burch.
  • The company announced a new AR stat, as well: Snapchat now sees over 6 billion AR Lens plays every day on average, it said.

Fintech

  • The German neobank N26 will shutter its U.S. operations. The company’s 500,000 U.S. customers will see their accounts closed on January 11 and will be provided with instructions on how to withdraw their funds. The company said it made the decision to better focus on its core European business and plans to launch to more countries in Eastern Europe, as well as Brazil. The bank had previously shut down its business in the U.K., citing post-Brexit difficulties.

Social

  • TikTok hires a new head of diversity and inclusion. The company has hired Shavone Charles, previously of VSCO, Instagram and Twitter, to fill the newly created role. The exec will be LA-based and report to TikTok’s head of comms, Hilary McQuaide.
  • Kuaishou, the Chinese maker of the largest short-form video platform after TikTok, reported earnings. Revenue rose 33% as the company reported 20.5 billion yuan ($3.2 billion) for the three months ended September, versus the 20.1 billion yuan average forecast. Total MAUs on its main app reached 573 million, though the company had to shut down its U.S. TikTok rival Zynn earlier this year.
  • Twitter made a change to its crowdsourced fact-checking program, Birdwatch, which now allows users to submit their contributions anonymously. Twitter says pilot users “overwhelmingly” requested this feature, particularly women and Black contributors. “Research has shown that aliases have the potential to reduce bias, by putting focus on the content of a note, not the author,” Twitter said, adding that aliases may also “reduce polarization by helping people feel comfortable crossing partisan lines.”

  • Twitter also updated its iOS app to address the annoying bug (which Twitter must have thought was a feature) where your timeline would refresh automatically, making the tweets you were actively reading disappear from view. After first fixing this issue on the web, Twitter is now rolling it out to iOS users.
  • Reddit said it’s shutting down Dubsmash, the short-form video app it acquired late last year, and is integrating video tools into its own app.  Reddit said its camera features will now include the ability to change recording speeds and the option to set a timer, similar to other short-form video apps. Users can now also upload videos in landscape, portrait mode and fill, as well as adjust and trim multiple clips. The company is also adding a new editing screen that includes text Stickers, a drawing tool and filters. And users have the option to add voiceovers or adjust the volume directly on the editing screen.
  • Social networking app for women Peanut announced a new feature called “Go Global,” which will allow its users to connect with other women around the world, instead of only those nearby. The company said there was demand for the option after it launched its live audio feature Pods. But it could also make Peanut more useful in markets where there just aren’t that many local users to connect with.

Image Credits: Peanut

  • The TikTok app ecosystem is huge. Correction! In our last newsletter, we pointed to Sensor Tower’s analysis of the TikTok app ecosystem and mistakenly referred to its “400 or so mobile apps.” The ecosystem saw 400 apps debut in 2020, but in total, there are some 900 apps tied to TikTok to offer things like downloading videos, viewing analytics, tracking hashtags and more. Meanwhile, those 900 apps reached over 1 billion downloads worldwide, not 3 billion. (But TikTok, including its sister app Douyin, have 3.3 billion installs, for comparison.)

Messaging

  • Facebook, err Meta, said it’s delaying the launch of end-to-end encryption (E2EE) across its messaging products until 2023 following warnings from child safety campaigns, including the National Society for the Prevention of Cruelty to Children. Such a system would prevent law enforcement and tech platforms from being able to detect child abusers, critics warned, and asked Meta to not proceed until it had a plan in place to prevent child abuse from being undetected on its platform. A former Facebook employee also accused Meta of announcing an absurdly accelerated timeline for E2EE to preempt antitrust action and for “good marketing,” which would have resulted in systems to identify child grooming, sextortion and CSAM distribution operating at less than 10% of the effectiveness of the systems that did inspect content.
  • WhatsApp introduced a new feature that would allow its web and desktop users to make their own custom stickers for use in the messaging app. The sticker maker is available from any chat from the paperclip icon, then clicking on “Sticker.”

Streaming & Entertainment

  • Apple Podcasts gets a suspicious boost in its App Store ratings. At first, it looked like angry podcast listeners and creators would finally have their say about the app’s decline by downrating Apple’s Podcasts app after Apple, for the first time, made its first-party apps reviewable by the public. But soon thereafter, the previously (embarrassingly) 1.8 star-rated app jumped, in a little over a month, to a 4.6 star rating. What gives? Apple critic Kosta Eleftheriou first noticed the change, and theorizes it’s because Apple is now intelligently prompting users for reviews — which, to be fair, is its right. But many of the reviews seem to be people reviewing the podcasts themselves, not the actual app, which is odd and…a bit suspicious.
  • Spotify will drop its shuffle feature on albums, after Adele asked. The streamer would previously default to shuffle mode but Adele had asked Spotify to allow her new album to play in the intended order. The artist tweeted that “our art tells a story and our stories should be listened to as we intended,” when thanking Spotify for the adjustment.
  • Music streaming app Tidal introduced direct artist payments, which aims to more equitably distribute funds to artists, compared with the models used by Apple and Spotify. With this user-centric payment system, subscription fees are directly distributed to the artists a user streams.
  • TikTok expands its TV footprint. The short-form video app rolled out to more TV devices across the U.S. and Canada with the addition of support for Google TV and Android TV OS, as well as LG and Samsung Smart TVs. Amazon Fire TV was previously supported.
  • Spotify tests a TikTok-like feed. The company is the latest to experiment with short-form video in its app as a means of content discovery. Except in Spotify’s case, it’s capitalizing on its existing Canvas video format but presenting it in a new place.
  • Spotify also debuted a “Netflix Hub” on its app, which features playlists, soundtracks and podcasts tied to Netlflix shows and movies. The companies had partnered on other initiatives before now, and see the hub as a way to serve their respective audiences with new and, sometimes exclusive, entertainment content.

Image Credits: Spotify/Netflix

Gaming

  • Netflix’s new gaming service added two more titles, including the return of Gameloft’s “Asphalt Xtreme.” The streamer recently expanded its service worldwide across iOS and Android, with a handful of titles, including a few casual games and two “Stranger Things”-themed games. Now, it’s added another arcade title, “Bowling Ballers,” and a reboot of Gameloft’s action racing game, “Asphalt Xtreme,” which had officially shut down just in September.

Travel and Transportation 

  • Telsa’s app experienced an outage that prevented car owners from opening their doors or starting their vehicles. Users reported getting a 500 server error on their iOS app, leading them to tweet at Elon Musk directly for help.

Government & Policy

  • The EU passed new rules that may impact major European and U.S. tech companies. The Digital Markets Act’ would make messaging apps interoperable, bans behavioral ad targeting to minors and would fine a company as much as 20% of total global annual sales for breaches of the law. The vote was the final step toward finalizing the rules, expected to come into action in 2022.
  • WhatsApp is reorganizing its privacy policy to provide more information on the data it collects and how it’s protected, used and shared across borders, after Irish regulators fined the service a record €225 million ($267 million USD) for breaching EU data privacy rules.
  • Instagram head Adam Mosseri is the next big tech rep who will testify before Congress. The exec will appear before lawmakers for the first time, and will answer the senators’ questions about Instagram’s impact on young people following the whistleblower leaks.
  • China’s state media reported Tencent has to submit new apps or updates for regulatory inspection through December 31 after Beijing determine Tencent’s apps infringed on users’ rights and interests. Tencent said its apps are still functional and available for download.
  • Apple pushed back the feature that would allow U.S. users to store their state’s driver’s license or state ID on their iPhone. The company said Arizona and Georgia would be the first states to get the feature, with Connecticut, Iowa, Kentucky, Maryland, Oklahoma and Utah to follow. The feature was originally set to launch in late 2021, but will now arrive in early 2022.

Security & Privacy

  • Privacy-focused search engine DuckDuckGo added to its Android app the ability to block hidden trackers, as part of its new “App Tracking Protection for Android” feature. The new option, now in beta, aims to block data collection from happening inside apps, where third-party trackers are hidden away in the app’s code.
  • Apple sued NSO Group, the maker of the nation-state spyware Pegasus. The suit is asking for a permanent injunction that would prevent NSO Group from using any Apple product or service, to “prevent further abuse and harm to its users.”

Funding and M&A

🤝 Family locator and communication app Life360 announced it would acquire lost-item tracking company Tile for $205 million. The deal will see Tile continue to be led as its own brand under its existing CEO CJ Prober. The company says no further changes to the Tile team are currently planned and Prober will also now join the Life360 board of directors. Tile, an Apple critic, claims that its business suffered from the AirTag’s arrival and Apple’s anti-competitive practices. It had recently announced a $40 million debt round to keep the business going.

💰 Niantic raised $300 million from Coatue at a $9 billion valuation to build the “real-world metaverse.” The Pokémon GO maker is betting on a metaverse that blends the real world with augmented reality, not virtual reality. This month, Niantic unveiled the Lightship AR Developer Kit which offers tools for AR game development. It also recently launched a new AR game, Pikmin Bloom.

🤝 Triller, the one-time TikTok rival turned live events company, has acquired Thuzio, a live events company co-founded by NY Giants’ Tiki Barber. The business had suffered during the pandemic when live events were shuttered. TrillerNet (Triller’s parent) confirmed the deal to the New York Post but didn’t disclose terms.

💰 Creator-driven marketplace LTK raised $300 million from SoftBank’s Vision Fund, valuing the business at $2 billion. The company, which was previously branded RewardStyle and LIKEtoKNOW.it, helps social media influencers make their posts shoppable from a centralized marketplace on the web and the LTK app. Brands can also use LTK to connect with creators on marketing campaigns.

💰 Mobile DevOps company Bitrise announced a $60 million round of funding led by Insight Partners to help developers build better mobile apps. Bitrise aims to create an end-to-end platform for mobile development that automates core workflows, shortens release cycles and provides a better understanding of how new pieces of code will affect live apps before their release, and counts over 100,000 developers as users.

💰 Column Tax, a company that makes income tax software designed to be embedded in other fintech apps, raised $5.1 million in seed funding led by Bain Capital Ventures. The company’s Tax Refund Unlock feature also recently became available to 2 million users of the cash advance app Klover.

💰 Berlin-based same-day grocery delivery app Yababa raised $15.5 million in seed funding led by Creandum and Project A, to expand its service within Germany and across Europe. The service, which currently offers items that cater to Turkish and Arabic communities, plans to expand its product mix in the future.

🤝 Coinbase acqui-hired the team behind BRD, a crypto wallet startup that first launched its mobile wallet back in 2014. BRD’s co-founders say nothing will be changing for BRD users for the time being, but users will have the option to migrate to Coinbase’s wallet in 2022.

💰 TabTrader raised $5.8 million in Series A funding for its mobile app that aggregates crypto exchange data. The app has more than 400,000 active users, with a particularly strong presence in Europe and Asia. Investors include 100X Ventures, Hashkey Capital, Spartan Capital, SGH Capital, SOSV and Artesian Venture Partners.

Downloads

Fold AR (Fold)

Image Credits: Fold

Of course, the metaverse has bitcoin? I mean, for sheer rubbernecking purposes we have to check out Niantic’s latest app. The Pokémon GO maker has weirdly teamed up with a bitcoin rewards and payments app, Fold, to launch an AR bitcoin mining experience called Fold AR. Currently in beta, Fold AR lets users earn bitcoin and other in-app benefits by exploring their physical surroundings using augmented reality. Unlike in Pokémon GO, where users seek out rare creatures, Fold users will collect bitcoin and other prizes, including those that increase their bitcoin cashback rewards. The company believes the game will appeal to bitcoin newcomers and existing cryptocurrency fans alike and will drive users to Fold’s app — where the in-app AR experience lives. Before the AR launch, Fold was focused on its bitcoin cashback experience where users connect their credit card, their Fold card or a bitcoin wallet, in order to purchase gift cards and receive cash back in the form of BTC. Fold AR rolls out on November 23 to select users and will add more users over time.

Rensource-spinoff Sabi closes $6M bridge round, expands B2B retail platform outside Nigeria

Nigeria’s informal trade sector, worth over $244 billion, has more than 40 million micro, small and medium businesses.

Most of these businesses operated offline until a few years ago when startups brought about digitization by providing infrastructure and a gamut of e-commerce and financial services.

One-year-old Sabi — a spinoff from Rensource, an African energy company that offers power-as-a-service to customers — is the latest startup to raise funds to serve the informal sector. The company confirmed to TechCrunch that it has raised a $6 million bridge round led by pan-African VC firm CRE Ventures.

Sabi’s bridge round is coming a year after closing a $2 million seed round from CRE Ventures, Jaango Capital, Atlantica Ventures and Waarde Capital.

Ademola Adesina and Anu Adasolum have been at the helm of Rensource since the company started in 2015; Adesina as founder and CEO and Adasolum, COO.

By providing these small and medium businesses with power, the team at Rensource began to look into other pain points these SMEs had and find ways to add value beyond energy provision.

With the pandemic halting Rensource’s business, the team had time to develop this concept which became Sabi in October 2020.

Adasolum leads Sabi’s efforts as founder and CEO following the company’s branch out in March, while Adesina holds a co-founder and director role. 

Sabi is an attempt at platforming the informal sector and African trade via various online and offline channels. This means that Sabi tries to complement the middlemen (mainly distributors) in the B2B e-commerce retail chain rather than replace them, a model familiar with other prominent B2B e-commerce retail startups such as Sokowatch, MaxAB TradeDepot and Twiga.

“We’re not trying to be, you know, a tech-enabled digital distributor. We’re not trying to disintermediate a market full of hyper-specialization where one of the defining characteristics of the informal sector is you have all these middlemen and agents performing a very narrow role,” Adesina said to TechCrunch.

We think that specialization is important for the sector to work properly — whether it’s aggregation, making a sale, knowing the customer especially well, all these middlemen play a key role. And the way we deal with them is we give them a set of tools and an infrastructure they can run their business on to make it more optimized.”

Sabi caters to the needs of manufacturers, distributors, wholesalers and retailers and classifies all of them as merchants.

The company operates an asset-light model and doesn’t own vehicles, warehouses or goods. But it provides visibility into these assets across the entire value chain from the demand and supply side and controls on a single platform.

Running this model exempts Sabi from the constraints a typical B2B e-commerce retail platform might face when acting as a distributor for manufacturers to retailers.

Sabi

Anu Adasolum (Founder and CEO, Sabi)

For instance, asset-heavy platforms can’t move goods from two different suppliers in the same truck or use the same salespeople when distributing goods from different suppliers to retailers. On the other hand, Sabi doesn’t have such constraints, so whereas other platforms try to standardize operations around goods offtake, Sabi concentrates on offtake monitoring.

“We focus our processes, policies and monitoring around understanding the different types of users and monitoring how the third parties we work with are serving them,” said CEO Adasolum.

“As a result, the net experience of each off-taker is different and it works more for their particular business type. So I’m not going to go to a business that is used to working a particular way and change it but instead offer several other channels that they’re more comfortable with through our platform.”

These channels include offline agents, call centres, merchant partners, supplier centres and mobile app. Each stakeholder can access tools around inventory management, sales, tracking, digital invoices, analytics on the platform.

“We’re starting with what makes them comfortable, not what we think is best,” the CEO added. 

Merchants on Sabi deal with FMCG goods and products in other sectors such as agriculture, electronics and chemicals. The category-agnostic platform is home to more than 175,000 merchants who have made B2B transactions totalling over $200 million annualized GMV run rate. And more than 10,000 agents serve these merchants on Sabi’s network.

Sabi makes money by taking a transaction fee when any merchants perform any sale on the marketplace. The company also earns a margin for providing financing to them.

Adesina said in Q1 2022, Sabi plans to roll out a subscription model where agents will pay a monthly fee to access a reseller model.

Also in Sabi’s pipeline is providing manufacturers with visibility and data-backed insights and direct engagement down the value chain.

Growing an average of 40% month on month in Nigeria, Sabi intends to replicate its rapid growth in other African countries Kenya and South Africa.

The company opened shop in Kenya last month and just made a few hires in South Africa, intending to go live early next year. Another round of funding, a Series A, might close in time to fuel the company’s expansion into both countries, Adesina said.

Pardon Makumbe, co-founder and managing partner of CRE Venture Capital, in a statement emphasizing why his firm doubled down on its investment under a year said, “Sabi’s online and offline approach to serving informal businesses, combined with the quality of its platform and service provider curation, has clearly taken root in Nigeria. The company is on track to be one of the fastest-growing African companies of 2021 and is showing no signs of slowing down.”

Sabi’s growth, in addition to market demand, comes from the background of its founders. Before Sabi and Rensource, CEO Adasolum worked at Jumia, where she was in charge of offline sales for some African countries: Nigeria, Ghana and Kenya.

She has also performed commercial operations and merchant acquisition roles for the African e-commerce giant. Adesina too has vast experience working with multinationals such as the Capricorn Investment Group, the Rockefeller Foundation and JP Morgan.

Adesina is confident that the digitization of offline processes for B2B e-commerce retail will continue despite questions about why many players exist in the space. And he believes as more startups come into the market, more venture capital will follow.

Sabi’s monthly GMV numbers is one reason the co-founder has this conviction. Right now, the company claims to be on the verge of processing about $12 million monthly GMV.

While Jumia, Africa’s biggest e-commerce player, records this volume on average after five years in operation, it has taken Sabi less than a year to achieve this feat which can be attributed to the size of the country’s informal B2B e-commerce retail market.

“The kind of data we’re seeing now in terms of like real-time visibility into whether people like this product or that product, that stuff is gonna accrue and grow exponentially over the next a few years,” the co-founder said.

“And then I think that the same way one saw in China in the late 90s the kind of hyper digitalization of what was a very informal economy, I see that happening faster in Africa than most people realize. I think it’s something people don’t realize how quickly it’s going to happen.”

Pet video marketplace Camlist eyes UK growth after raising $1.3 million pre-seed funding

Camlist, a video marketplace for pets, has raised $1.3 million in a pre-seed round, funding that the startup plans to use to develop its platform and grow its workforce — as it looks to expand its reach in the UK, its second market (after the U.A.E.), which it entered earlier this year.

Unlike other marketplaces, Camlist (derived from camera listing) allows sellers to list videos of the pets they wish to sell, and once contact is made, the buyer and seller can engage through both video and text-chat within the app.

The marketplace currently only allows the listing of pets, but it is set to diversify to other items in the near future.

“Classifieds, or peer to peer commerce in general, has been stuck in the same old way of operation since eBay showed up. There has not been real significant innovation ever since; it’s just listings, maybe some images and phone numbers,” said Camlist co-founder and chief executive officer, Moustafa Mahmoud.

“But at Camlist we are changing that. We are turning the marketplace into a video experience because every pre-owned item has a story.”

Mahmoud said that they are building the safest way for anyone to find a pet by also ensuring verified health checks and interest free financing, in partnership with third parties, for those unable to make one-off payments. Camlist has rehomed over 6,000 pets to date.

“Our in-app GMV (Gross Merchandise Value) has been growing 100% every two quarters, so we’re doubling every quarter, and our total GMV is around $2 million a month,” said Mahmoud.

The Y Combinator company was founded and launched in Dubai, U.A.E, last year, just before Covid pandemic hit. The launch turned out to be timely and the site grew popular as people, forced to stay home, bought their own pets — partly to deal with boredom, but also because they had the time to nurture them.

“We’re building the marketplace category by category, and we just feel that the pets listing is so huge, and also very underserved. We plan to expand into different items as we grow,” said Mahmoud, who is also a computer scientist.

Other co-founders include Maha Refai, also the startup’s chief product officer, who has 16 years’ experience building and scaling digital products. She is also the creator of MBC’s (Middle East’s largest free-to-air broadcaster) premier video platform as well as other multiple video streaming products.

Alsayed Gamal, who is Camlist chief technical officer, has 15 years software engineering experience. He has knowledge and experience in mobile platforms, data engineering, DevOps, API design, microservices and serverless architecture.

Mahmoud said the idea to start Camlist was inspired by the need to counter the bad experiences he went through while making purchases on classified sites in Dubai, U.A.E, where items were often misrepresented and scams high.

Moustafa Mahmoud; Camlist chief executive officer, he co-founded the video marketplace with Maha Refai; the startup’s chief product officer and Alsayed Gamal; chief technical officer.

Classifieds are popular in Dubai, an expat city, as people use them to dispose of their items, but they have also provided an opportunity for scammers to target unsuspecting people. To counter this, Camlist has an option for in-app payments — with funds released once the buyers confirm receipt of the pets. This feature ensures that buyers are not defrauded by deterring cons masquerading as vendors.

Mahmoud and his other co-founders provide a marketplace that allows buyers to first experience items of interest, through video, before making a purchase. This is besides ensuring that buyers were protected against fraud and guaranteeing high quality services.

The company also follows up with the sellers on its platform to ensure that they are breeding or keeping the pets in healthy environments, as well as vaccinating, deworming, and microchipping them.

“We also support our buyers and sellers by providing them with free vaccinations, microchipping, deworming, insurance, and pet food. We try to provide the best experience for our buyers and our sellers,” he said.

The startup raised the new funding from Y-Combinator; the technology startup accelerator, Act One Ventures; an early-stage venture fund and a number of angel investors from Houseparty, Mux and Facebook.

“We really looked forward to investors who believe in our vision of building the marketplace of the future. And we are really fortunate to get people who believe in this vision, and who actually work and build applications in the video industry,” said Mahmoud.

After achieving traction in the UK, Camlist is planning to enter the US market, which it believes is going to be a huge and important market for them.

“So, the current state for us is expansion within the UK because it’s a pretty big market. And we can see the impact of what we’re doing here. But as soon as we reach a certain stage where we have the majority of the market, then we will start to expand into the United States,” said Mahmoud, who was born in Egypt, with his family moving to Dubai when he was six years old.

Forest bags $8M seed round to acquire Japanese e-commerce brands 

Japan has been the birthplace of traditional arts and crafts since ancient times. Craftmanship, meticulous attention to detail and balance of design and functionality have contributed to creating unique Japanese products like pottery, traditional fabrics, washi (paper), woodwork, glasses, bento-boxes and more. 

This craftsmanship continues to be passed along from generation to generation and live on in modern Japan. However, the craftsmen and women, who do not always have the skills or tools to be influential merchants, have often been left behind in the rapidly evolving business environment in the 21st century.

In recent years, a growing number of e-commerce entrepreneurs have started to develop their own products and brands in response to a shift in consumer demand from cheap, mass-produced goods to diversified products that meet one’s unique needs and lifestyle. 

Forest, a Japanese e-commerce aggregator, seeks to identify sustainable, high-quality products and brands that embrace the spirit of Japan and help them grow and enter the global market by using the power of technology.

Forest announced today it has raised approximately $8 million (900 million yen) of seed round led by The University of Tokyo Edge Capital Partners (UTEC) and Nordstar Partners.

The startup will use the new capital to acquire more than 300 Japanese e-commerce brands that have been carefully crafted and curated by entrepreneurs. Forest will apply digital marketing strategies at scale, optimize sales and enhance inventory planning through data analytics, as well as support cross-border e-commerce expansion. 

Forest is currently in the process of finalizing its first acquisition. It will continue to look for brands that generate sales between $1 million and $5 million and target to acquire companies with more than $10 million of sales next year, said CEO of Forest Shingo Yuhara told TechCrunch. 

It also plans to raise around $20 million to $30 million debt and equity capital of Series A, targeting the first half of 2022, Yuhara said.  

Forest looks at marketplaces, including Amazon, Rakuten, Zozotown, Yahoo Japan sellers, Shopify and more. 

Forest, founded in July by Yuhara and COO Masa Mishizawa, will compete with other e-commerce aggregators like Rainforest, Una Brands and Thrasio in the global market. Forest said it is the first pure aggregator dedicated to the Japanese market. Given that Forest initially focuses on the Japanese market, it does not see Rainforest and Thrasio as its pure competitors, Yuhara said. 

Thrasio set up a Japanese office in March to acquire Japanese brands and products sold on Amazon Japan and other e-commerce platforms.  

The Japanese e-commerce market was estimated at $165 billion (19 trillion yen) as of 2020, according to a report by Japan’s Ministry of Economy, Trade and Industry. 

“[The] investment into Forest is one of our largest seed round investments within the IT sector. In my previous life, I managed my family-owned apparel business and personally experienced the pains and limitations of a small business. I strongly believe that Forest can solve these problems and capitalize on the potential of these businesses through the power of technology,” said partner of UTEC Hiroyuki Sakamoto. “We look forward to working with the experienced Founders who seek to challenge this attractive market opportunity and we feel privileged to participate as co-lead investor.”   

“We are excited to be investing in Forest that is well-positioned to take advantage of the large opportunity in acquiring and scaling niche brands in Japan,” said managing partner Ole Ruch of Nordstar. 

France asks search engines and app stores to remove Wish

Several French ministers have issued a common statement announcing that they have asked the main search engines and mobile app stores operating in France to hide Wish’s website and mobile app altogether. Wish is a popular e-commerce platform that mostly references products from China-based merchants. It doesn’t hold inventory as products are shipped directly from merchants to customers.

Last year, the French administration in charge of consumer rights and fraud started investigating Wish. At the time, the direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF) suspected that it was a bit too easy to mislead consumers and sell counterfeit goods on Wish, such as sneakers and perfumes with images incorrectly showing the logos of famous brands.

The French administration then ordered 140 different goods on Wish — most of them were imported products. This time, they wanted to find out whether those products were safe or not.

95% of toys that they acquired on the platform didn’t comply with European regulation — 45% of them were deemed dangerous. When it comes to electronics goods, 95% of them also shouldn’t be available in Europe, and 90% of them were dangerous in one way or another.

And even cheap costume jewelry sold on the platform presented a risk — 62% of those that they ordered are considered as dangerous. Again, these metrics are based on a very small sample of 140 products.

When Wish is notified that it is selling a dangerous good, those products are removed from the marketplace within 24 hours as expected. And yet, “in most cases, those products remain available under a different name, and sometimes even from the same seller. The company doesn’t keep any log related to transactions of non-compliant and dangerous products,” France’s Ministry of the Economy says in its statement.

According to the same investigation, when Wish notifies customers that they have purchased a dangerous product, it doesn’t mention the reason of the product recall.

In July 2021, the French administration in charge of consumer rights and fraud notified Wish and asked them to comply with European regulation on e-commerce and product safety. The administration gave them a two-month notice before further action.

Four months later, the French government is taking advantage of recent changes in European regulation to dereference or block problematic websites and apps. It’s a convoluted process, but the Ministry of the Economy asked the French administration in charge to ask search engines and app stores to dereference Wish. It’s going to take a bit of time — at the time of writing, Wish is still available in the App Store and you can still find Wish’s website in Google search results.

After that, Wish will be shadowbanned in France. The website will still be available and the app will still work if you already have it on your phone. But you won’t see it in search results in the App Store, the Play Store or Google.

If the French administration thinks Wish has implemented proper changes to comply with French regulation, it could lift the shadowban. With this radical decision, France is setting a precedent and shows once again that the web is becoming more and more fragmented. In that case, it says it is acting in the consumers’ best interests.

It’s also going to be interesting to see whether Europe’s upcoming Digital Services Act will have a bigger impact on drop shipping as a whole. Europe is expected to overhaul the e-commerce directive from 2000 with the Digital Services Act.

European Parliament’s IMCO backs limits on tech giants’ ability to run tracking ads

In what looks like bad news for adtech giants like Facebook and Google, MEPs in the European Parliament have voted for tougher restrictions on how Internet users’ data can be combined for ad targeting purposes — backing a series of amendments to draft legislation that’s set to apply to the most powerful platforms on the web.

The Internal Market and Consumer Protection Committee (IMCO) today voted overwhelmingly to support beefed up consent requirements on the use of personal data for ad targeting within the Digital Markets Act (DMA); and for a complete prohibition on the biggest platforms being able to process the personal data of minors for commercial purposes — such as marketing, profiling or behaviorally targeted ads — to be added to the draft legislation.

The original Commission proposal for the DMA was notably weak in the area of surveillance business models — with the EU’s executive targeting the package of measures at other types of digital market abuse, such as self-preferencing and unfair T&Cs for platform developers, which its central competition authority was more familiar with.

“The text says that a gatekeeper shall, ‘for its own commercial purposes, and the placement of third-party advertising in its own services, refrain from combining personal data for the purpose of delivering targeted or micro-targeted advertising’, except if there is a ‘clear, explicit, renewed, informed consent’, in line with the General Data Protection Regulation,” IMCO writes in a press release. “In particular, personal data of minors shall not be processed for commercial purposes, such as direct marketing, profiling and behaviourally targeted advertising.”

It’s fair to say that adtech giants are masters of manipulating user consent at scale — through the use of techniques like A/B testing and dark pattern design — so beefed up consent requirements (for adults) aren’t likely to offer as much of a barrier against ad-targeting abuse as the committee seems to think they might.

Although if Facebook was finally forced to offer an actual opt-out of tracking ads that would still be a major win (as it doesn’t currently give users any choice over being surveilled and profiled for ads).

However the stipulation that children should be totally protected from commercial stuff like profiling and behavioral ads is potentially a lot more problematic for the likes of Facebook and Google — given the general lack of robust age assurance across the entire Internet.

It suggests that if this partial prohibition makes it into EU law, adtech platforms may end up deciding it’s less legally risky to turn off tracking-based ads altogether (in favor of using alternatives that don’t require processing users’ personal data, such as contextual targeting) vs trying to correctly age verify their entire user base in order to firewall only minors’ eyeballs from behavioral ads.

At the very least, such a ban could present big (ad)tech with a compliance headache — and more work for their armies of in-house lawyers — though MEPs have not proposed to torpedo their entire surveillance business model at this juncture.

In recent months a number of parliamentarians have been pushing for just that: An outright ban on tracking-based advertising period to be included, as an amendment, to another pan-EU digital regulation that’s yet to be voted on by the committee (aka the Digital Services Act; DSA).

However IMCO does not look likely to go so far in amending either legislative package — despite a call this week by the European Data Protection Board for the bloc to move towards a total ban on behavioral ads given the risks posed to citizens fundamental rights.

Digital Markets Act

The European Parliament is in the process of finalizing its negotiating mandate on one of the aforementioned digital reforms — aka, the DMA — which is set to apply to Internet platforms that have amassed market power by occupying a so-called ‘gatekeeping’ role as online intermediaries, typically giving them a high degree of market leverage over consumers and other digital businesses.

Critics argue this can lead to abusive behaviors that negatively impact consumers (in areas like privacy) — while also chilling fair competition and impeding genuine innovation (including in business models).

For this subset of powerful platforms, the DMA — which was presented as a legislative proposal at the end of last year — will apply a list of pre-emptive ‘dos and don’ts’ in an attempt to rebalance digital markets that have become dominated by a handful of (largely) US-based giants.

EU lawmakers argue the regulation is necessary to respond to evidence that digital markets are prone to tipping and unfair practices as a result of asymmetrical dynamics such as network effects, big data and ‘winner takes all’ investor strategies.

Under the EU’s co-legislative process, once the Commission proposes legislation the European Parliament (consisting of directly elected MEPs) and the Council (the body that represents Member States’ governments) must adopt their own negotiating mandates — and then attempt to reach consensus — meaning there’s always scope for changes to the original draft, as well as a long period where lobbying pressure can be brought to bear to try to influence the final shape of the law.

The IMCO committee vote this morning will be followed by a plenary vote in the European Parliament next month to confirm MEPs’ negotiating mandate — before the baton passes to the Council next year. There trilogue negotiations, between the Parliament, Commission and Member States’ governments, are slated to start under the French presidency in the first semester of 2022. Which means more jockeying, horse-trading and opportunities for corporate lobbying lie ahead. And (likely) many months before any vote to approve a final DMA text.

Still, MEPs’ push to strengthen the tech giant-targeting package is notable nonetheless.

A second flagship digital update, the DSA, which will apply more broadly to digital services — dealing with issues like illegal content and algorithmic recommendations — is still being debated by MEPs and committee votes like IMCO’s remain outstanding.

So the DMA has passed through parliamentary debate relatively quickly (vs the DSA), suggesting there’s political consensus (and appetite) to rein in tech giants.

In its press release summarizing the DMA amendments, rapporteur Andreas Schwab (of the EPP and DE political grouping) made this point, loud and clear, writing: “The EU stands for competition on the merits, but we do not want bigger companies getting bigger and bigger without getting any better and at the expense of consumers and the European economy. Today, it is clear that competition rules alone cannot address all the problems we are facing with tech giants and their ability to set the rules by engaging in unfair business practices. The Digital Markets Act will rule out these practices, sending a strong signal to all consumers and businesses in the Single Market: rules are set by the co-legislators, not private companies!”

In other interesting tweaks, the committee has voted to expand the scope of the DMA — to cover not just online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing, and video-sharing services (i.e. where those platforms meet the relevant criteria to be designated “gatekeepers”) — but also add in web browsers (hi Google Chrome!), virtual assistants (Ok Google; hey Siri!) and connected TV (hi, Android TV) too.

On gatekeeper criteria, MEPs backed an increase in the quantitative thresholds for a company to fall under scope — to €8 billion in annual turnover in the European Economic Area; and a market capitalisation of €80 billion.

The sorts of tech giants who would qualify — based on that turnover and market cap alone (NB: other criteria would also apply) — include the usual suspects of Apple, Amazon, Meta (Facebook), Google, Microsoft etc but also — potentially — the European booking platform, Booking.com.

Although the raised threshold may keep another European gatekeeper, music streaming giant Spotify, out of scope.

MEPs supported the additional criteria for a platform to qualify as a gatekeeper and fall under scope of the DMA of: Namely, providing a “core platform service” in at least three EU countries; having at least 45M monthly end users and 10,000+ business users. The committee also noted their support that these thresholds do not prevent the Commission from designating other companies as gatekeepers — “when they meet certain conditions”.

In other changes, the committee backed adding new provisions around the interoperability of services, such as for number-independent interpersonal communication services and social network services.

And — making an intervention on so-called ‘killer acquisitions’ — MEPs voted for the Commission to have powers to impose “structural or behavioural remedies” where gatekeepers have engaged in systematic non-compliance.

“The approved text foresees in particular the possibility for the Commission to restrict gatekeepers from making acquisitions in areas relevant to the DMA in order to remedy or prevent further damage to the internal market. Gatekeepers would also be obliged to inform the Commission of any intended concentration,” they note on that.

The committee backed a centralized enforcement role for the Commission — while adding some clarifications around the role of national competition authorities.

Failures of enforcement have been a major bone of contention around the EU’s flagship data protection regime, the GDPR, which allows for enforcement to be devolved to Member States but also for forum shopping and gaming of the system — as a couple of EU countries have outsized concentrations of tech giants on their soil and have been critized as bottlenecks to effective GDPR enforcement.

(Only today, for example, Ireland’s Data Protection Commission has been hit with a criminal complaint accusing it of procedural blackmail in an attempt to gag complainants in a way that benefits tech giants like Facebook… )

On sanctions for gatekeepers which break the DMA rules, MEPs want the Commission to impose fines of “not less than 4% and not exceeding 20%” of total worldwide turnover in the preceding financial year — which, in the case of adtech giants Facebook’s and Google’s full year 2020 revenue would allow for theoretical sanctions in the $3.4BN-$17.2BN and $7.2BN-$36.3BN range, respectively.

Which would be a significant step up on the sorts of regulatory sanctions tech giants have faced to date in the EU.

Facebook has yet to face any fines under GDPR, for example — over three years since it came into application, despite facing numerous complaints. (Although Facebook-owned WhatsApp was recently fined $267M for transparency failures.)

While Google received an early $57M GDPR from France before it moved users to fall under Ireland’s legal jurisdiction — where its adtech has been under formal investigation since 2019 (without any decisions/sanctions as yet).

Mountain View has also faced a number of penalties elsewhere in Europe, though — with France again leading the charge and slapping Google with a $120M fine for dropping tracking cookies without consent (under the EU ePrivacy Directive) last year.

Its competition watchdog has also gone after Google — issuing a $268M penalty this summer for adtech abuses and a $592M sanction (also this summer) related to requirements to negotiate licensing fees with news publishers over content reuse.

It’s interesting to imagine such stings as a mere amuse-bouche compared to the sanctions EU lawmakers want to be able to hand out under the DMA.

European Parliament’s IMCO backs limits on tech giants’ ability to run tracking ads

In what looks like bad news for adtech giants like Facebook and Google, MEPs in the European Parliament have voted for tougher restrictions on how Internet users’ data can be combined for ad targeting purposes — backing a series of amendments to draft legislation that’s set to apply to the most powerful platforms on the web.

The Internal Market and Consumer Protection Committee (IMCO) today voted overwhelmingly to support beefed up consent requirements on the use of personal data for ad targeting within the Digital Markets Act (DMA); and for a complete prohibition on the biggest platforms being able to process the personal data of minors for commercial purposes — such as marketing, profiling or behaviorally targeted ads — to be added to the draft legislation.

The original Commission proposal for the DMA was notably weak in the area of surveillance business models — with the EU’s executive targeting the package of measures at other types of digital market abuse, such as self-preferencing and unfair T&Cs for platform developers, which its central competition authority was more familiar with.

“The text says that a gatekeeper shall, ‘for its own commercial purposes, and the placement of third-party advertising in its own services, refrain from combining personal data for the purpose of delivering targeted or micro-targeted advertising’, except if there is a ‘clear, explicit, renewed, informed consent’, in line with the General Data Protection Regulation,” IMCO writes in a press release. “In particular, personal data of minors shall not be processed for commercial purposes, such as direct marketing, profiling and behaviourally targeted advertising.”

It’s fair to say that adtech giants are masters of manipulating user consent at scale — through the use of techniques like A/B testing and dark pattern design — so beefed up consent requirements (for adults) aren’t likely to offer as much of a barrier against ad-targeting abuse as the committee seems to think they might.

Although if Facebook was finally forced to offer an actual opt-out of tracking ads that would still be a major win (as it doesn’t currently give users any choice over being surveilled and profiled for ads).

However the stipulation that children should be totally protected from commercial stuff like profiling and behavioral ads is potentially a lot more problematic for the likes of Facebook and Google — given the general lack of robust age assurance across the entire Internet.

It suggests that if this partial prohibition makes it into EU law, adtech platforms may end up deciding it’s less legally risky to turn off tracking-based ads altogether (in favor of using alternatives that don’t require processing users’ personal data, such as contextual targeting) vs trying to correctly age verify their entire user base in order to firewall only minors’ eyeballs from behavioral ads.

At the very least, such a ban could present big (ad)tech with a compliance headache — and more work for their armies of in-house lawyers — though MEPs have not proposed to torpedo their entire surveillance business model at this juncture.

In recent months a number of parliamentarians have been pushing for just that: An outright ban on tracking-based advertising period to be included, as an amendment, to another pan-EU digital regulation that’s yet to be voted on by the committee (aka the Digital Services Act; DSA).

However IMCO does not look likely to go so far in amending either legislative package — despite a call this week by the European Data Protection Board for the bloc to move towards a total ban on behavioral ads given the risks posed to citizens fundamental rights.

Digital Markets Act

The European Parliament is in the process of finalizing its negotiating mandate on one of the aforementioned digital reforms — aka, the DMA — which is set to apply to Internet platforms that have amassed market power by occupying a so-called ‘gatekeeping’ role as online intermediaries, typically giving them a high degree of market leverage over consumers and other digital businesses.

Critics argue this can lead to abusive behaviors that negatively impact consumers (in areas like privacy) — while also chilling fair competition and impeding genuine innovation (including in business models).

For this subset of powerful platforms, the DMA — which was presented as a legislative proposal at the end of last year — will apply a list of pre-emptive ‘dos and don’ts’ in an attempt to rebalance digital markets that have become dominated by a handful of (largely) US-based giants.

EU lawmakers argue the regulation is necessary to respond to evidence that digital markets are prone to tipping and unfair practices as a result of asymmetrical dynamics such as network effects, big data and ‘winner takes all’ investor strategies.

Under the EU’s co-legislative process, once the Commission proposes legislation the European Parliament (consisting of directly elected MEPs) and the Council (the body that represents Member States’ governments) must adopt their own negotiating mandates — and then attempt to reach consensus — meaning there’s always scope for changes to the original draft, as well as a long period where lobbying pressure can be brought to bear to try to influence the final shape of the law.

The IMCO committee vote this morning will be followed by a plenary vote in the European Parliament next month to confirm MEPs’ negotiating mandate — before the baton passes to the Council next year. There trilogue negotiations, between the Parliament, Commission and Member States’ governments, are slated to start under the French presidency in the first semester of 2022. Which means more jockeying, horse-trading and opportunities for corporate lobbying lie ahead. And (likely) many months before any vote to approve a final DMA text.

Still, MEPs’ push to strengthen the tech giant-targeting package is notable nonetheless.

A second flagship digital update, the DSA, which will apply more broadly to digital services — dealing with issues like illegal content and algorithmic recommendations — is still being debated by MEPs and committee votes like IMCO’s remain outstanding.

So the DMA has passed through parliamentary debate relatively quickly (vs the DSA), suggesting there’s political consensus (and appetite) to rein in tech giants.

In its press release summarizing the DMA amendments, rapporteur Andreas Schwab (of the EPP and DE political grouping) made this point, loud and clear, writing: “The EU stands for competition on the merits, but we do not want bigger companies getting bigger and bigger without getting any better and at the expense of consumers and the European economy. Today, it is clear that competition rules alone cannot address all the problems we are facing with tech giants and their ability to set the rules by engaging in unfair business practices. The Digital Markets Act will rule out these practices, sending a strong signal to all consumers and businesses in the Single Market: rules are set by the co-legislators, not private companies!”

In other interesting tweaks, the committee has voted to expand the scope of the DMA — to cover not just online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing, and video-sharing services (i.e. where those platforms meet the relevant criteria to be designated “gatekeepers”) — but also add in web browsers (hi Google Chrome!), virtual assistants (Ok Google; hey Siri!) and connected TV (hi, Android TV) too.

On gatekeeper criteria, MEPs backed an increase in the quantitative thresholds for a company to fall under scope — to €8 billion in annual turnover in the European Economic Area; and a market capitalisation of €80 billion.

The sorts of tech giants who would qualify — based on that turnover and market cap alone (NB: other criteria would also apply) — include the usual suspects of Apple, Amazon, Meta (Facebook), Google, Microsoft etc but also — potentially — the European booking platform, Booking.com.

Although the raised threshold may keep another European gatekeeper, music streaming giant Spotify, out of scope.

MEPs supported the additional criteria for a platform to qualify as a gatekeeper and fall under scope of the DMA of: Namely, providing a “core platform service” in at least three EU countries; having at least 45M monthly end users and 10,000+ business users. The committee also noted their support that these thresholds do not prevent the Commission from designating other companies as gatekeepers — “when they meet certain conditions”.

In other changes, the committee backed adding new provisions around the interoperability of services, such as for number-independent interpersonal communication services and social network services.

And — making an intervention on so-called ‘killer acquisitions’ — MEPs voted for the Commission to have powers to impose “structural or behavioural remedies” where gatekeepers have engaged in systematic non-compliance.

“The approved text foresees in particular the possibility for the Commission to restrict gatekeepers from making acquisitions in areas relevant to the DMA in order to remedy or prevent further damage to the internal market. Gatekeepers would also be obliged to inform the Commission of any intended concentration,” they note on that.

The committee backed a centralized enforcement role for the Commission — while adding some clarifications around the role of national competition authorities.

Failures of enforcement have been a major bone of contention around the EU’s flagship data protection regime, the GDPR, which allows for enforcement to be devolved to Member States but also for forum shopping and gaming of the system — as a couple of EU countries have outsized concentrations of tech giants on their soil and have been critized as bottlenecks to effective GDPR enforcement.

(Only today, for example, Ireland’s Data Protection Commission has been hit with a criminal complaint accusing it of procedural blackmail in an attempt to gag complainants in a way that benefits tech giants like Facebook… )

On sanctions for gatekeepers which break the DMA rules, MEPs want the Commission to impose fines of “not less than 4% and not exceeding 20%” of total worldwide turnover in the preceding financial year — which, in the case of adtech giants Facebook’s and Google’s full year 2020 revenue would allow for theoretical sanctions in the $3.4BN-$17.2BN and $7.2BN-$36.3BN range, respectively.

Which would be a significant step up on the sorts of regulatory sanctions tech giants have faced to date in the EU.

Facebook has yet to face any fines under GDPR, for example — over three years since it came into application, despite facing numerous complaints. (Although Facebook-owned WhatsApp was recently fined $267M for transparency failures.)

While Google received an early $57M GDPR from France before it moved users to fall under Ireland’s legal jurisdiction — where its adtech has been under formal investigation since 2019 (without any decisions/sanctions as yet).

Mountain View has also faced a number of penalties elsewhere in Europe, though — with France again leading the charge and slapping Google with a $120M fine for dropping tracking cookies without consent (under the EU ePrivacy Directive) last year.

Its competition watchdog has also gone after Google — issuing a $268M penalty this summer for adtech abuses and a $592M sanction (also this summer) related to requirements to negotiate licensing fees with news publishers over content reuse.

It’s interesting to imagine such stings as a mere amuse-bouche compared to the sanctions EU lawmakers want to be able to hand out under the DMA.

Peek raises $80M as its travel experiences software and marketplace business passes $2B in bookings

Travel and tourism are slowly starting to move again in the wake of Covid-19 crashing over the world and sending us to shelter in place. Today a company focused on experiences — museum visits, skydiving, local cooking classes and more — is announcing a round of growth funding on the back of seeing its own business bounce back. Peek, which provides both a marketplace for consumers to discover and book experiences, a platform for businesses to book team building and other internal events, and tech for tourism companies to digitize, manage and run their own experience businesses online — “like a Shopify for experiences,” CEO and co-founder Ruzwana Bashir said — has raised $80 million. It plans to use the funds to continue expanding its product, hiring more talent, and taking Peek to more places, after passing some $2 billion in bookings from some 35 million customers, mostly in North America.

The round, a Series C, is notable in part because of who is behind it: the funding is being led by WestCap — the investment firm founded by another major player in the business of travel, the former CFO of Airbnb, Laurence Tosi. New investor Goldman Sachs Asset Management is also in the round, along with 3L, Cathay Innovation, I2BF Global Ventures, Manta Ray and Apeiron. Other high profile past backers include Jack Dorsey, Eric Schmidt, and Kayak founder Paul English.

San Francisco-based Peek is not disclosing its valuation, but Bashir told us the figure “has increased substantially because we grew the business a lot and hit profitability this year.” Peek has now raised over $100 million in the last 10 years.

“Now that we are starting to invest again, we are going into investment mode,” she added. Worth pointing out, too, that this round was originally pitched to me as a $60 million investment, and then it grew by $20 million just days ago, which speaks also to the confidence investors currently have in the travel and tourism space.

That’s a big shift from a year ago, when travel-related companies were regrouping and trying to figure out how to continue weathering what had turned out to be a very long storm. Many of them had gone into the summer of 2020 hopeful that the pandemic (which really kicked off earlier in the year) would have subsided and led to a wave of exuberant movement in the warmer months, only to find any bounce short-lived. One of the more well-capitalized of the travel experience startups — Berlin’s GetYourGuide, valued at over $1 billion just 6 months before Covid-19 first started appearing — found itself raising first a big convertible note, and then a big credit facility, as it shored up its business as the pandemic wore on.

Peek was also not immune. When Covid-19 hit, “it was pretty terrifying for us. We were growing great and then, all of the sudden, bookings crashed,” Bashir, who co-founded the company with Oskar Bruening (pictured, below) said. “We then did all the hard things.” That included Peek laying off 30% of its staff to help it get through the slump.

Peek also took to the offensive, thinking of how it could work differently with its customers on both sides of the business. With end users, it doubled down on virtual experiences (for example, online cooking classes); and rethinking and expanding who “customers” could be by building out experiences booking for corporate and internal events.

But the real key sounds like how it rethought that it worked with experience providers, where it helped them get their own emergency loans, and it equipped them with the tools to work within the “new normal” by helping them shift to focusing more on local activities for local people rather than tourists; and providing them with more software and functionality to run those businesses.

“We are the operating system for those merchants,” she said.

It turned out to be the right move: it meant that as those businesses picked up in activity, so did Peek, which found itself turning profitable in the midst of the pandemic. Software currently accounts for “the majority” of Peek’s business, she said, although that could well change over the next year as consumer travel starts to rebound and that brings more activity to Peek’s own marketplace.

“There is a lot of opportunity, $1 trillion in gross merchandise value, and still a lot of businesses haven’t made the leap online,” he said. Many of the experiences customers were previously using pen, paper, phone calls, and managing through spreadsheets, she said, “but [now] you can’t connect with customers now before you connect.”

Activities that Peek covers range from wine tours and watersports to skydiving and art classes, while Peek Pro, as the B2B2C product is called, offers tech to enable online booking, point-of-sale services, and “hundreds” of automations covering things like inventory management, dynamic pricing, waivers, and marketing analytics. Peek says that it has ‘thousands’ customers, including businesses like the Museum of Ice Cream, Color Factory, Artechouse (the experiential art venues) and Pennekamp State Park.

Some of those businesses, without a doubt, target younger adults and thus were already pretty digitally savvy to begin with, but more generally Bashir believes that Peek’s success in building B2B2C tech for experiences companies is part of the bigger trend in the world of business software specifically for offline businesses.

“People underestimate what happened in offline. There was a leap forward in e-commerce,” she said of the story that’s often told about the impact Covid-19 had on businesses that were already online. But offline businesses were faced with needing to suddenly make what she calls “a ten-year leap” to catch up. Peek is part of the battalion of tech companies have rushed to fill that void for various other use cases, such as building software for restaurants, or building logistics or curbside pickup for brick-and-mortar retailers.

“We have been early adopters and investors in travel technology companies, and have been following Peek.com for years,” said Tosi of WestCap, in a statement. “Ruzwana Bashir is a dynamic leader and Peek.com’s unique approach has allowed them to serve millions of people. This is a transformative solution that will allow a wider audience of travelers and locals to have meaningful experiences, and for activity operators to grow their businesses.”