African healthtech startups in the supply chain segment show rapid growth, spurring a $7M investment initiative

While Africa’s health systems are still reeling from the effects of the COVID pandemic, the adoption of digital health services has been revved in some countries. Telemedicine, the standout offering, witnessed massive adoption during the pandemic, and in the last five years, no other service has been launched more by healthtech startups.

However, a particular segment has achieved scale faster within the past year. These startups digitize the supply chain and distribution to providers. And according to a new report from Salient Advisory, a global healthcare consulting firm, this is the segment where the most impressive growth has occurred for Africa’s healthcare in the last 12 months.

Companies in this segment work with community pharmacies and lower-end providers such as drug shops to help stock products. Some include mPharma, Lifestores, Shelf Life, and Maisha Meds.

“The fastest traction we’re seeing are those helping the providers–those who interface with the customer like pharmacies, clinics, and hospitals–to digitize distribution to the consumer. That’s where the greatest traction has happened,” said Remi Adeseun, the director, Africa at Salient Advisory, to TechCrunch in an interview.

Salient surveyed over 80 companies across Ghana, Kenya, Nigeria, and Uganda, 25% more than the number it tracked in its last report in 2021.

The models of these B2B companies mirror their retail e-commerce counterparts such as Wasoko and TradeDepot, as they use tech-enabled solutions to digitize medicine distribution to underserved pharmacies, drug shops, clinics, and hospitals.

As such, their growth has been rapid, Salient says. Lifestores, for instance, increased its outlets from 85 to 600 in Nigeria; Maisha Meds grew from 400 to 900 outlets across Kenya and Nigeria; Shelf Life has over 1,630 outlets in Kenya and Nigeria, up from 400 the year before.

The report says 36% of all-time funding reported by the health supply chain startups it profiled was raised in the last 12 months. However, the segment is yet to record the type of investments that have poured into B2B retail e-commerce in the previous two years.

For instance, medium-to-large scale players like MarketForce and Wasoko have raised between $40-$130 million in single rounds (some including debt). And save from mPharma, which has a network of Mutti pharmacies and recently raised $35 million to build out its telehealth and e-commerce offerings, funding has been few and far between for B2B distribution healthtech startups.

“Companies like Wasoko and other companies in B2B e commerce involved in FMCG are raising larger sums. But the point we’re making within the context of healthtech and within the smaller context of our research is that these B2B companies are growing the fastest. Over the last four months, they also raised the larger sums of money,” says Yomi Kazeem, senior consultant for West Africa at Salient Advisory. “And of course, funding in health tech is generally low. So we wouldn’t expect them to be raising large sums just yet. But there’s every possibility that as they grow, that might change.”

One way Adeseun reckons that might happen is if B2B e-commerce platforms in retail take an interest in pharmaceutical and health-based products. But he contends that since most of these startups haven’t scratched the surface of a vast FMCG space, it’ll take a long while before they invest in B2B medicine distribution.

Adeseun also cited two events that could push more funding into this segment. “We think one of the things that will also drive investor interest is when the scale matches the kind of appetite they have. Many startups operate in single or two countries, so expanding geographic footprints will be an enabler to draw in better funding.” The second is clearer and forward-thinking regulations.

But Salient notes in its report that regulatory frameworks governing this space, especially e-pharmacy activities, have evolved since last year. Online pharmacy regulations have been launched in Nigeria and Ghana and are in development in Kenya and Uganda. The report says all regulations currently require online pharmacies to have a licensed physical location under the control of a licensed pharmacist.

“Uniquely, Ghana is going beyond enacting online pharmacy regulations to embark on broader digital transformation of pharmaceutical care, through a government-run, centralized e-pharmacy platform to house all online pharmacy transactions across the country,” its authors wrote.

“This could transform the availability of product data and confer end-to-end visibility for product movement in the online pharmacy space. Once fully established, the platform’s scope could be expanded to include health products currently being distributed through offline models and serve as a model for similar initiatives beyond Ghana.”

The research found that while many startups, retail pharmacies, and e-commerce players such as Jumia and Copia remain active in digitizing distribution, customers ordering over-the-counter products from their online channels appeared small.

On competition between these platforms, Adeseun said a few of these chain pharmacy incumbents, such as MedPlus and HealthPlus, are taking on a digital strategy by adding telemedicine capabilities, thus responding to the innovation that startups introduced. However, a direct path to multi-national telemedicine scale through these chains is not clear, the report contended.

Regarding how they influence their market, 94% of companies surveyed claimed to have an impact on medicine supply. 60% said theirs was on quality, while 43% of innovators claimed an effect in lowering pharmaceutical and drug prices.

Last year, two talking points from Salient’s report were the need for increased capital from Africa-based investors and more money to flow into women-led startups. There’s been an improvement on the former: 58% of innovators that raised funding in the last 12 months cited Africa-led investors as a source of financing. But nothing has changed for the latter category as women-led startups are not still receiving the funding they need. According to the report, female-led startups with black CEOs accounted for 2% of the total funding raised by healthtech startups featured in this report. In 2021, they received just $1.6 million.

Spurred by the findings, a consortium of global and continental organizations, with funding from the Bill and Melinda Gates Foundation, is set to launch a $7 million pan-African healthtech initiative. Adeseun said the initiative, dubbed the Investing in Innovation (I3), will focus on women’s access to funding: supporting and funding 60 early and growth-stage African health supply chain startups over two years–and providing access to skills development.

“Women founders are disadvantaged,” the director said. “And that’s one of the things the investment in innovation will try to address: to take that gender and disadvantaged African founder lens and prioritize them when selecting the potential beneficiaries who will participate in the program.”

The pan-African initiative will have four hubs in east, north, south, and west Africa. It will give these startups access to market opportunities and showcase them to impact investors and venture capitalists. The expectation for the initiative is that after the two years elapses, additional funding will come from development partners who have already indicated interest but want proof of success before committing, Adeseun said.

Rider is taking a nimble approach to e-commerce logistics in Pakistan

Rider is on a mission to provide online shoppers in Pakistan with “Amazon-like” next-day deliveries. The Karachi-based company announced it has raised $3.1 million in new funding from Y Combinatior, along with new investors i2i, Flexport, Soma Capital and Rebel Fund. Returning investors included GFC, Fatima Gobi and TPL E-ventures, along with Dropbox co-founder Arash Ferdowsi. This brings RIder’s total raised to $5.4 million since September 2021.

Founded in 2019 by former UPS Pakistan executive Salman Allana, Rider is building a network of sorting hubs, delivery centers and a digitized fleet. The platform enables sellers to offer next-day delivery with route optimization, live tracking and scheduling for buyers. The company claims that since their pre-seed investment round in September 2021, monthly revenues have grown 110% and they have doubled their customer base to 650 online sellers. So far, Rider has delivered 3 million parcels across 60 cities in Pakistan. It currently runs a network of 16 hubs that cover 60 cities across Pakistan, which Allana said accounts for about 60% of e-commerce demand in the country.

Allana told TechCrunch that growing up in Karachi and spending his early career in sub-Saharan Africa meant he was used to poor supply chains and logistics services. “If you ordered something online, you accepted the huge risk it might never show up,” he said. When he moved to London to study for his MBA, he became “obsessed” with Amazon delivery. “How could an order I placed at midnight be at my doorstep the next morning? I believed there was a clear and large opportunity to bring this service quality to online sellers in Pakistan and eradicate ‘parcel anxiety’ for all online buyers in Pakistan—including myself.”

After earning his MBA, Allana started working for UPS Pakistan as head of strategy and business development. He saw for himself the challenges logistics incumbents face, including lost orders, buyers who are reluctant to order online again and, for online sellers, headaches like manual cash-on-delivery, reconciliation and slow payback, which created working capital challenges, especially for Pakistan’s one million SMEs that rely on Instagram and Facebook to reach buyers.

“I learnt that the traditional delivery payers were not set up or equipped to service the online retail trend, and that change from the inside would be slow and costly,” Allana said. “The COVID pandemic saw a huge and irreversible shift to online shopping across Pakistan. Only a built-for-purpose, dynamic, growth-focused startup could capture this opportunity on time.”

Logistics is a notoriously cash-burning sector. Allana said that the network of delivery centers Rider is building isn’t what you would usually imagine. Instead they include mobile warehouses (or pre-sorted vans), empty spaces in the parking lot of malls and petrol stations. Moving forward, Rider would also like to have delivery centers in kiranas, or convenience stores. This means delivery centers are flexible enough to move as high volume e-commerce zones change.

“We’re fundamentally building for ‘urban logistics,’ so we don’t have requirements for large sorting centers and spaces,” he said. “Our network consists of numerous small delivery centers which are purposely placed to cover high-volume e-commerce zones, and which ultimately are flexible to move as these zones change.”

Rider’s new funding will be used on its in-house tech, including e-commerce enablement tools like plug-ins and built-in wallets to help SMEs, which Allana said are mostly owned by women, grow their businesses.

“Our ambition from day one—we want to be the country’s number end-to-end e-commerce logistics solution provider,” Allana said. “But we see logistics as a series of building blocks, each of which we need to get right, operationally and financially, before we can build the next. Today, Rider is doing last-mile delivery to the customers’ doorstep. We’ve proven our last mile solutions work, we’ve proven they work at scale and we now need to prove they work sustainably before we enter other verticals.” He added Rider already has an eye on its next phase, and piloted its B2B movement, or overland trucking, in January.

In a prepared statement, i2i general partner Kalsoom Lakhani said, “As the e-commerce industry in Pakistan grows, so will the need for a next generation 3PL player that understands the Pakistani market realities and knows how to build both aggressively but also efficiently. We believe that this player is Rider and have so much conviction in Salman and his vision.

Roku and Walmart partner up to bring shoppable ads to streaming

Roku and Walmart announced a new partnership that aims to crack the code on making purchases via TV streaming and shopping with remotes. On Thursday, the two companies introduce their plan to allow viewers to purchase items with their remotes while streaming on Roku devices. The deal is expected to unite Roku’s streaming platform’s 61.3 million subscribers with a retailer that had total revenue of $141.6 billion in the first quarter of 2022.

The companies wrote in a statement that this is a first-of-its-kind partnership between retailers and streaming platforms. This doesn’t count Amazon, of course, which is both a retailer and streaming platform. But it could open the door for other streaming services to do the same.

Essentially, the program adds an overlay to an existing ad so that streamers can choose to click “OK” on their Roku remote and make a transaction right on the screen with their TV show paused. A shopper won’t be taken to or need to capture QR codes on their phones to complete orders.

Typing a credit card number using a TV remote can be frustrating so Roku and Walmart have made it so customers won’t have to enter their credit card numbers since Roku’s payment platform has the customers’ payment details pre-populated.

The partnership “evolves shopping beyond the QR code and will change the way customers interact and shop TV and video content,” Roku and Walmart wrote.

Roku’s OneView ad-buying platform will power and measure Walmart’s shoppable ads. In addition, the Roku Brand Studio will design custom branded content for TV streaming and shopping.

To start, the shoppable ads will appear on The Roku Channel video-on-demand content and will roll out over time to other channels on the platform, Roku informed TechCrunch.

Image Credits: Roku

“We’re working to connect with customers where they are already spending time, shortening the distance from discovery and inspiration to purchase,” said William White, chief marketing officer, Walmart, in a statement. “No one has cracked the code around video shoppability. “By working with Roku, we’re the first to market retailer to bring customers a new shoppable experience and seamless checkout on the largest screen in their homes – their TV.”

“We’re making shopping on TV as easy as it is on social,” added Peter Hamilton, Head of TV Commerce, Roku. “For years, streamers have purchased new Roku devices and signed up for millions of subscriptions with their Roku remote. Streaming commerce brings that same ease and convenience to marketers and shoppers.”

Since this announcement, Roku stock jumped over 4% in after-hours trading on Thursday. This is a small win for the company as we reported back in April that Roku stock declined following its first-quarter results, dropping 20% in March and more than 70% in a year. We will have to wait and see if this new partnership with Walmart will satisfy investors and drive higher engagement for the platform.

Video shopping is far from new, and shoppable TV has moved beyond QVC (the TV shopping channel) and 1-800 ads. For instance, Amazon launched Amazon Live in 2019 — a strong indicator that live video had become the new focus for e-commerce. Then, Instagram took the plunge in 2020, introducing Live Shopping. Facebook followed with Facebook Shops. Walmart, Google, TikTok, and Shopify all joined the party as well.

Walmart has been fairly experimental when it comes to new ways to transact. It was the first retailer to test out both TikTok’s and Twitter’s live e-commerce platforms and has invested in live shopping by hosting events across Facebook, Instagram, YouTube, TalkShopLive, and others.

The live shopping space continues to heat up as, yesterday, eBay announced the launch of eBay Live, a live and interactive environment for shoppers.

Live commerce has been the major trend for years now since users can easily navigate online checkout using a mobile phone or desktop. But T-commerce — or shopping content as it’s seen on TV — has never really taken off. YouTube most recently has tried to enter this space by making its YouTube app a second-screen companion for TV viewers that will allow them to shop as they watch. It remains to be seen whether it will take over or if Roku and Walmart can move the needle on people purchasing products on their television screens.

Updated June 17, 2022 at 12:56 p.m. ET with Roku comment to TechCrunch.

Alibaba extends logistics arm to Pakistan for e-commerce unit Daraz

Cainiao, the logistics service operated by Alibaba, is launching two automated distribution centers in Karachi and Lahore as its first entry into Pakistan, it announced on Friday.

Alibaba’s overseas expansion has manifested in a mix of investment and integration over the past decade. In 2018, the e-commerce titan bought Pakistan’s e-commerce platform Daraz for an undisclosed amount. It controls the online shopping service Lazada, which is neck to neck with Shopee in Southeast Asia, and owns a stake in Turkey’s Trendyol as well as Indonesia’s Tokopedia.

Founded in 2012, Daraz was born out of the internet venture builder Rocket Internet like its sibling Lazada. It delivers to Pakistan, Bangladesh, Sri Lanka, Nepal, Myanmar, and other countries in the region. Daraz declined to disclose how many active users it has, only saying it has “served a potential user base of 500 million people” and grew 85% in gross merchandise volume (rough metric for sales in e-commerce) over the last two years.

The smart distribution centers will come with a suite of Cainiao’s in-house tech like electric control units, software-based programmable logic controllers (PLC is critical for warehouse automation but traditionally is hardware-powered, Caniao told TechCrunch), and a computing solution that promises to combine the capabilities of cloud and the speedy runtime on the edge.

The suite of warehousing solutions, said Cainiao, could reduce manual labor by half and increase human productivity by 100%.

Given Alibaba’s far-reaching footstep worldwide, it won’t be surprising to see Cainiao following the parent into more countries. Cainiao already operates nine large overseas distribution centers across Europe, Asia, and the Americas and has plans to ramp up operations in Southeast Asia, South Asia, and Europe, the company’s vice president of technology Ding Hongwei said in a statement.

Integrating Cainiao into Alibaba’s sprawling e-commerce portfolio indeed looks to be the plan.

“Logistic network development is a priority in our globalization strategy as logistics is the fundamental infrastructure supporting a high-quality consumer experience based on integrated product supply from cross-border and locally,” Daniel Zhang, CEO of Alibaba, said on the firm’s December earnings call.

“Cainiao has been developing logistic network in Southeast Asia and Europe, leveraging the commerce use cases presented by Lazada, AliExpress, and the Trendyol.”

AliExpress is Alibaba’s cross-border e-commerce platform that mostly connects Chinese sellers to global consumers.

The next big social platform is the smartphone’s homescreen

BeReal, LiveIn, Locket… what do these new consumer social apps have in common besides a highly-ranked position on the App Store’s Top Charts? They engage their users through a combination of push notifications and homescreen widgets, instead of forcing people to spend a long time browsing their app, scrolling feeds, or watching creator content.

The popularity of this homescreen-based form of social networking is, in part, tied to Apple’s move to launch a widgets platform for the iPhone with the release of iOS 14 in 2020. In doing so, it invited a new ecosystem of apps to emerge.

Initially, this began with apps that allowed users to better personalize their homescreens with widgets and custom app icons that matched their backgrounds, sending apps like Widgetsmith, Brass, Color Widgets, and others to the top of the App Store. But over time, developers realized that widgets didn’t just have to be homescreen decorations – they could, in effect, be an active extension of their own platforms. Their widgets could serve as a tool to engage users in the most personal space on a mobile device: the prime real estate that is the phone’s homescreen.

When Locket first launched in December 2021, this idea was more of a novelty.

Developer and former Apple WWDC student scholarship winner Matt Moss thought it would be clever to use a widget to send photos to his girlfriend as they embarked on a long-distance relationship. But soon, his friends were clamoring for access to the app he had built as a simple side project.

Since then, Locket has expanded from iOS to Android and how now seen a total of 20 million installs to date, according to estimates from app store intelligence firm Sensor Tower. But its popularity has declined a bit as newer competitors emerged. While Locket was No. 9 in the Social Networking category, as of the time of writing, it was only No. 42 Overall on the U.S. App Store. That rank is largely due to the fact that there are so many other apps now playing in this space and gaining momentum.

For instance, another app called BeReal had originally arrived in December 2019 – before iPhone’s widgets became broadly available. This social app encourages users to capture a photo within 2 minutes of receiving a push notification using BeReal’s camera — which takes both a front-facing photo and selfie at the same time. The idea is to give users a way to see what their friends are up to in real-time. Before this year, BeReal had seen steady, but not groundbreaking, growth, achieving 1.9 million worldwide installs, per Sensor Tower data. The app is backed by $30 million in funding, led by a16z, Accel, and New Wave.

Then, in February 2022, BeReal tapped into the idea to leverage the homescreen to capture friends’ reactions to users’ posts, with the launch of a feature called “WidgetMojis.” This addition allowed BeReal to display friends’ photos in a live-updating widget on the homescreen as they reacted to users’ BeReal posts, or what BeReal calls RealMojis. By April, the app intelligence firm Apptopia had reported that BeReal had grown its monthly active users 315% year-to-date and that 65% of its lifetime downloads had occurred this year. That figure has since grown to around 86%, Sensor Tower says, as the app now has a total of 13.9 million lifetime installs.

Over the course of 2022, BeReal’s popularity has skyrocketed. This year alone BeReal has gained some 12 million installs, the data further indicates. And, as of the time of writing, BeReal was the No. 10 Overall app on the U.S. App Store, beating out traditional social networking and communication apps like Messenger, Snapchat, Telegram, Discord, Twitter, and Pinterest. It was also the No. 3 app in the Social Networking category.

For younger users, BeReal also becoming a part of their cultural lexicon and everyday app rotation. On TikTok, the hashtag #bereal has over 390 million views, while variations on the name bring in thousands or millions more.

But BeReal is now only one of many competing in this space. Another vying for a part of this emerging market is the newer addition, LiveIn, which launched in January 2022 after pivoting from a Clubhouse-like app, Livehouse. This homescreen social networking app comes with its own twist. Instead of just sending selfie photos to friends’ phones, users can send videos and drawings, as well. Another new feature lets users “duet” photos and videos — taking a cue from the similarly-named mashup feature found on TikTok.

The company said in a press release it reached 4 million monthly active users in the first two months after launch. At the time, the hashtags #liveinapp and #livepic had generated more than 40 million TikTok views. Today, #liveinapp has 279.5 million TikTok views and #livepic has 37.6 million.

@tuckerthorn Guys use the link in my bio so I can send photos to your Home Screen 😂 #liveinapp @liveinapp #fyp #app #foryou ♬ As It Was – Harry Styles

In addition to the casual photo-sharing and updated widgets, these new social apps include a photo archive so users can look back at their memories. This serves not only as a way to incentivize users to launch the apps outside of designated photo-taking times, but also as a way to lock in users and keep them from abandoning the platform.

This sort of photo archive isn’t a new concept – it’s inspired by Facebook and Snapchat’s Memories features, but is designed to achieve the same results with a younger crowd.

In fact, these new social apps have taken many of the core concepts more recently popularized by Snapchat – access to real-life friends, private photo sharing, spontaneous and casual photo-taking, and memories – and have built their own differentiated platforms that tap into the smartphone’s notification system and direct homescreen access via widgets.

These three apps are only a handful of a growing number of apps building for social via the phone’s homescreen widgets.

Other top downloaded apps include Noteit Widget, which has gained 18.8 million lifetime installs per Sensor Tower data; Loveit: Live Pic & Note Widget (1.4 million installs); Widgetshare (3.1 million installs); Peek (704K installs); Widgetpal (374K installs), Snapwidget (185K installs); Rocket Widget (127K installs); Comet: Live Friends Widget (112K installs); and others.

There are even clones capitalizing on the names of popular brands like the not-so-subtly named app called “LivePic, Locket Photo Widgets” which has managed to pull in 79K installs — some of which likely came by way of misdirected App Store searches.

Gen Z’s shift to authenticity

Another one of the many things these apps have in common is that they promote sharing real-life photos that don’t involve heavy editing, filters, or AR effects – features Snapchat and Instagram had become known for. This speaks to a broader shift that’s helping fuel this trend: the end of the Instagram aesthetic and the increased desire for authenticity on social media.

We already saw hints of this emerging with the launches of other newcomer social photo apps like Dispo or Poparazzi, both of which focused on uncurated photostreams – the latter, where photos were snapped and posted by the user’s friends, not users themselves. There were also the apps that aimed at photographers abandoned by Instagram — like Glass, or Herd Social, which had positioned themselves as being “anti-Instagram” apps.

This broader group of photo apps promoted their defiance of Big Tech with its manufactured algorithms, the overabundance of features, and the hyper-competitiveness that now sees mainstream social networks chasing TikTok with short videos, not to mention their collective drive to incorporate all sorts of other activity — like e-commerce, creator subscriptions, virtual tipping, NFTs, and more. When it’s not trying to be an online mall, Instagram is trying to clone TikTok, for example. Snapchat is hosting creator content and now wants users to shop using AR.

Meanwhile, younger users – the key demographic that uses social apps – seemed to have actually just wanted simpler apps that focused on what they wanted social networking to be about: their friends.

It’s funny that it’s come to this. The “social graph” was once the holy grail of consumer social platforms – to know who someone was connected to in real life was perceived as valuable data. For one thing, it meant you could lock users into a walled garden they wouldn’t want to leave because their friends were all there, too. And making this social graph inaccessible to competitors meant every new network had to start from scratch. But these days, mainstream social networks are more heavily focused on connecting users with creators – after all, that’s where the money is. Users can subscribe to, shop from, and virtually tip content creators. Monetizing true friendships is much more difficult.

But Big Tech’s greed left a gap in the market where they began to underserve those in search of real-world connections. This impact isn’t just visible within the homescreen social app trend.

It’s also helped drive users to the almost too numerous to count “friend-finding” and friend discovery apps, like Yubo, LMK, Wink, Hoop, Wizz, Vibe, Fam, Itsme, Lobby, Hippo, LiveMe, Swiping, and others – many of which had built on top of Snapchat’s APIs until the company tightened its developer policy over child safety concerns.

The trend is similarly impacting dating, leading to Match’s biggest-ever acquisition of Hyperconnect for $1.73 billion, which had been building “social discovery” apps that weren’t designed specifically for romantic connections. Bumble today is beefing up its “BFF” feature as younger people are shifting their interest to friend-finding apps.

But this broader shift in social isn’t without concerns. Though mainstream social apps are now being held accountable regarding their user protections, newer social apps are flying under the radar. Parents haven’t heard of these new apps and don’t know to monitor or restrict them as a result. The same goes for lawmakers and regulators, too, who have their eyes affixed solely on tech giants. And as reports have shown, the apps’ privacy protections and policies, in some cases, are fairly weak. This is particularly concerning given that many are marketed towards and used by tweens and younger teens, who may inadvertently post to global, public feeds instead of to friends, post inappropriate content, or become the victims of cyberbullying.

But the apps’ freewheeling nature isn’t the only reason why homescreen social networking is having a moment. Beyond those mentioned above, there are many other factors at play here — including the apps’ clever use of TikTok to drive downloads, influencer marketing, and college ambassador programs to spread the word about new apps more “organically.” There’s also the continuous background noise related to social networking’s ill effects that Gen Z is aware of, even if only mariginally. Data scandals, high-profile leaks and whistleblowing, Congressional hearings, regulatory inquiries, and the resulting media coverage have helped fuel consumer demand for apps that weren’t created by today’s dominant players.

The market’s readiness for this type of networking is demonstrated by how well these “homescreen social” apps are currently doing. They’re dominating the Social Networking charts and are staking their position in the Overall Top Charts. While, longer-term, they could end up being another flash in the pan the way location-based social networking apps were in the 2010’s, there’s a sense that some Gen Z users no longer consider these apps experimental.

@carolinelusk it’s time sensitive man #fyp #foryou #foryoupage ♬ original sound – AnxietyGangOfficial

And while TikTok is certainly a viable threat in terms of capturing the valuable – and profitable – connection between users and creators, users’ social graphs are still up for grabs. In fact, many among Gen Z don’t want to share their real-world relationships with TikTok, they’ve said in videos posted to the platform. They appreciate that’s TikTok a network that’s about creativity and individualized interests, not their real-world connections.

@420koreaboono every time damn stop asking♬ ITSJULYSKI – JULYSKI

TikTok has realized this too and understands the risk it poses for its own business. It even got so pushy about acquiring users’ address books that it destroyed its own Discover page in favor of a Friends page in hopes of capturing that data.

If the trend continues, it could impact other mainstream social networks, which have largely ignored this new avenue to gain users and haven’t adopted the “live pics from friends” widget format, either.

With the social graph filtering to smaller, simpler homescreen social networking apps, there also now comes the potential to build a different kind of social network that could be monetized in new ways beyond ads. These apps could roll out premium features, a subscription service, direct payment, and more. But that future is still in question, as it remains to be seen whether homescreen social networking apps have long-term staying power among the historically fickle younger crowd who have adopted them. exits stealth with $20M to help big lenders speed up making high-value loans

Large banks are stepping up their game when it comes to new services and the technology that underpins them, and in many cases they are borrowing straight from the tech world’s playbook: Instead of building in-house, to speed things up, they are tapping third parties that have already found a fix for a tricky problem, integrating their breakthroughs by way of APIs.

In the latest development, a startup called Able has built an engine to speed up the processing of  documents and other data required for commercial loans (typically $100,000 but sometimes up to $100 million in value), which it sells as a service to banks and other lenders. Today, it’s coming out of stealth mode with $20 million in funding and a launch into the wider market.

The Series A is being led by Canapi Ventures — a specialist fintech investor — with participation also from Human Capital, which also led the startup’s seed round. Diego Represas, the CEO of Able who co-founded it with Andrew Hurst, noted that there are also a couple of strategic investors — financial services companies that are already using Able’s tech — but they are not disclosing those names currently.

I write that it is launching into the wider market because although it’s coming out of stealth, Able’s actually been around since 2020, and the customers it’s picked up are already using Able’s technology — which involves RPA, computer vision and other forms of AI to ingest and process data related to loans as part of their evaluation process.

The section of the loan market that it is focusing on is larger commercial endeavors and so are being done at much higher values than the typical small business loan. That also means more parsing of paperwork related to a loan application, a cumbersome process that Able is aiming to reduce by up to 30% on a typical application.

Represas said he came to the idea of fixing this after a meeting up with cousin of his who worked in business finance and told him about the painful process that went on behind the scenes.

Represas and Hurst at the time were engineers at another fintech, Digit, and so Represas’s natural inclination was to think that there was likely already a solution in the market to cut this down.

It turned out that there wasn’t. He couldn’t believe it, he said: business loans are a $6 trillion annual market, but globally banks were spending about $60 billion annually to process those loan applications.

Perhaps the bigger market size has kept a lot of incumbents from wanting to fix what didn’t really seem broken. But we know how this song goes: there are a number of companies now also building to address this, and so perhaps it was just a matter of time before they would get their inefficient stranglehold on business loans disrupted.

“So we dove into solving this problem,” he said.

The company is picking an interesting moment to announce funding and open for business. Inflation is on the rise, and interest rates are getting hiked up in a bid to contain it.

That means it’s a complicated, but potentially interesting, time to be a fintech startup building technology to power commercial loan services for major banks and other large lenders.

On one hand, higher interest rates and the presence of inflation might make getting loans and taking any business leap or risk less attractive; on the other hand, it may be precisely the right time to have a product out there that takes friction out of the process and therefore speeds up the transaction and lowers the costs around it.

Companies, meanwhile, will still be in need of funding to grow, and in some cases you’ll have companies investing in that because their products are breaking through, maybe because of the current state of the market. (As people in tech love to point out, Google and Airbnb after all were both launched during recessions.)

You could say the same for Able. Its own product crosses into a couple of different competitive spaces. There are a number of startups out there already either working directly with businesses, or providing their tech to embed elsewhere to power business loans with new approaches that leverage AI and big data analytics. (Some like Kabbage eventually do get snapped up by incumbents: Amex acquired the SoftBank-backed startup back in 2020 after it struggled hard through the first year of the pandemic.)

Alongside that, there is a wave of companies out there targeting fast-scaling companies and making it easier to secure revolving credit and debt facilities as an alternative to the equity-based funding that they might typically consider. They include the likes of Hum (formerly called Capital) providing services directly to businesses; and Sivo, which provides debt-as-a-service; Clearco and Wayflyer both targeting e-commerce and online businesses; and more.

I should also point out that there is another fintech startup called Able, although it focuses on personal money management and is not connected to this Able at all.

Represas notes that Able’s focus on the tech that is used for processing, but not decision-making or risk-profiling (which Represas told me is just a small aspect of loan approval and not where the pain point is); the fact that it focuses on commercial loans and not SMB loans (too small an opportunity, he said); and that it does not directly interface with borrowers itself but works through banks, all make it distinct from the rest of the pack (why create new channels when those banks already have those deep relationships, was Represas’ rhetorical question to me when I asked why not). All in all, Able is disruptive, but it’s not a threat, to its customers.

And that makes it one to watch.

“Able is a game-changer. Their team is already working with several banks in the Canapi network on use cases that span the entire loan lifecycle,” said Neil Underwood, general partner at Canapi Ventures and president of Live Oak Bank, in a statement. “Able cuts the time and resources needed to process any business loan. Lenders get better economics and a scalable platform for growth. Everyone gets a modern digital experience. It’s a win-win situation for all parties involved.”

Jumia’s venture into quick commerce could slow its path to profitability

Profitability has been an ongoing theme for Jumia since it went public in 2019. Each time the pan-African e-commerce platform releases its quarterly financials, investors and tech stakeholders dwell on its adjusted EBITDA and operating losses.

While the company’s financial results in the last couple of years have detailed slow and steady growth, Jumia’s continuous losses are a recurring cause for concern. A few investors that have spoken to TechCrunch believe the e-commerce giant is light-years from achieving profitability, and it’s not difficult to understand their perspective.

Jumia’s adjusted EBITDA throughout 2019 stood at a loss of €182.7 million (about $204.5 million). In its 2020 financials, the company said it had demonstrated meaningful progress on its path to profitability, improving its adjusted EBITDA deficit to a loss of €119.5 million that year (around a $136.3 million adjusted loss).

Co-CEO Jeremy Hodara reiterated this in an interview with TechCrunch referencing the company’s reduced losses in Q4 2020. “We’ll be trying to do so every quarter. We want to go about it by improving the efficiency of the business and opening new avenues for growth,” Hodara said. But by the end of 2021, Jumia’s adjusted EBITDA losses ended at $196.7 million, a 44% increase from the previous year.

Although the e-commerce company started 2021 on a good footing, reducing losses a bit in the first quarter, it reverted to its old method of executing aggressive advertising, which it had slowed during the pandemic. As the company grew its GMV, orders, quarterly active customers and revenue in the subsequent quarters, its losses compounded, particularly in Q4, when it reached $70 million, a 107% year-over-year increase.

Sacha Poignonnec, the company’s other co-CEO, told TechCrunch in an interview last month that Jumia plans not to exceed $70 million of losses in future quarters.

“We are stabilizing our level of marketing and investments,” he said. “There will be some fluctuations here and there, but we will reduce our losses below this peak we had in Q4.” Jumia anticipates a loss of not more than $220 million this year, which would surpass 2021’s numbers.

Jumia has expanded its results along many e-commerce metrics that matter since going public: orders, revenue, user base and GMV. The company has also improved its monetization outlook with JumiaPay (the fintech recently acquired licenses to process payments for third-party businesses in Egypt and Nigeria) and its logistics arm. Yet its path to achieving profitability remains arduous, perhaps even more so as it enters the quick commerce (q-commerce) space.

Amazon Prime Day lands on July 12-13

Prime Day, Amazon’s annual event where it and sellers on the platform discount a huge number of items for a burst of sales activity, is coming to a screen near you. Today, the e-commerce giant announced that Prime Day will run this year on July 12-13.

The U.S., Amazon’s home turf, is the company’s focus point for this discount bonanza, but like “Black Friday”, Prime Day has gone increasingly global over the years, and so Amazon will also be holding Prime Day on the same day in at least 15 other countries including Canada, China, Brazil, Germany, Japan, Mexico, the Netherlands, and the U.K..

Prime Day sales will be run in India, Saudi Arabia, Egypt, the United Arab Emirates and some other markets later this summer, the company said.

Typically Prime Day is held in summer, a tactic to stir up activity to offset more traditionally sluggish sales activity in that period. However, Amazon had to adjust the schedule for Prime Day for the last two years because of the pandemic. In 2020, it delayed it to October; in 2021, it moved up the date to June.

Prime Day is about boosting sales but it’s also about boosting something else: as its name implies it’s one of Amazon’s special features reserved for members of Prime, its loyalty club where people pay an extra fee to get free shipping on various items, access to the company’s media streaming services, and more. Amazon notes that Prime members will get early access to some of the Prime Day deals ahead of the rest of the consumer pack from from June 21.

Deals will include discounts on Amazon’s own products — eg, a 55% discount on its own devices like the Echo Show 5 (2nd Gen), the Echo Show 5 (2nd Gen) Kids, the Kindle Paperwhite, and the Halo fitness band; as well as discounts on Fire TV-compatible sets from companies like Insignia, Toshiba, Panasonic, alongside Amazon’s own devices.

Other offers Amazon is already announcing include 20% on some Amazon Fresh products and $10 credit for completing tasks like listening to a song, streaming a video, and borrowing a book in Prime services, and a chance to win prizes for shopping from small businesses.

It also uses the event to try out some other selling formats.

Starting June 21, Amazon will broadcast live shopping with celebrities/ like Porsha Williams, Joe and Frank Mele, and Hilary Duff on its website, shopping app, and Fire TV. This follows on from last year, when Kristen Bell, Karamo Brown, and Mindy Kaling took part in live shopping during Prime Day.

And it’s tapping into BNPL to get people clicking a little more. Fintech firm Affirm partnered with Amazon to offer Prime Members a Buy Now, Pay Later (BNPL) option to split their payments into three installments for purchases more than $50 made between June 28 and July 11. (As with other BNPL platforms, Affirm’s pitch is “interest free” payments.)

Amazon stakes a lot on Prime Day for its bottom line. It said that last year, it sold more than 250 million items last year during the sales event, working out to gross merchandise volume of $9.54 billion. However, to put that into some context, analysts pointed out that yearly growth was low. Part of that is simply the outsized lift that Covid-19 buying patterns provided, followed by the inevitable return to earth: In 2020, Amazon saw a 54% year-on-year bump in sales for Prime Day, but that figure shrunk to ‘just’ 7% growth in 2021.

Given inflation and the larger pressures we are seeing on consumer spending in the U.S. and elsewhere, it will be interesting to see what 2022 will hold in that context.

Something also to watch: this is the company’s first Prime Day after its founder Jeff Bezos stepped down from the CEO position last year. All eyes will be on whether current CEO Andy Jassy will deliver the goods, so to speak.

He’s definitely on the move with changes: in the last few months, Amazon has raised the prices of its Prime Service from $12.99 to $14.99 per month, started an invite-only ordering system for items like PlayStation 5 and Xbox, started testing an AR shopping experience, and promised to start a drone delivery system in California later this year.

Nevertheless, the company hasn’t had the greatest year so far, reporting a $3.84 billion loss in its first quarter results, with estimates of $116 billion to $121 billion for Q2 sales, coming in below analysts’ expectation of $125.5 billion. At the time of writing, Amazon’s stock is trading more than 36% down over a year ago.  Amazon is also trying to deal with issues like fake reviews and counterfeit products on its platform.

A new report from eMarketer suggests that the US e-commerce market will cross the mark of $1 trillion. However, for the first time, Amazon will see its market share shrink ever so slightly: down to 37.8% from 38% previously. Considering how much rests these days on market chatter, Prime Day results could be the difference between whether Amazon sinks or floats on those words.

Is consolidation on the horizon for Southeast Asia’s tech industry?

The recent IPOs of several tech companies in Southeast Asia might give investors cause to wonder if the time is ripe for exits and consolidation in the region.

If you’re thinking along those lines, you aren’t far off from the truth. An analysis of recent changes in the market reveals four factors that are set to catalyze consolidation in Southeast Asia in the near future.

Startups have cash and are looking to spend it

After fundraising multiple times, there are a number of large and late-stage tech startups that have ample liquidity and are increasingly open to pursuing growth inorganically.

As more tech companies look to the super app business model to retain users and increase monetization, we could expect more inorganic expansion and consolidation in the coming years.

Recent M&A in the region indicates two key strategic considerations influencing acquisitions:

  • Adding new product segments/verticals or markets into offerings.
  • Strengthening their existing offerings (verticals or markets).

For instance, Grab acquired Singapore-based robo-advisory startup, Bento, in 2020. The acquisition was mainly driven by the strategic consideration of adding a new product segment, because it helped Grab bring retail wealth management and investment solutions to its users and partners.

The acquisition of the Singapore-based home renovation platform Qanvast by Livspace in 2021 is an example of the second strategic consideration. This acquisition helped Livspace strengthen and consolidate its position in existing markets (Singapore and Malaysia).

We’ve summarized some more examples of strategic acquisitions below:

Image Credits: Jungle Ventures

As cash-rich tech startups become keener to seek inorganic growth, consolidation is likely to pick up.

Companies are expanding across regions and countries

Southeast Asia is culturally diverse and countries here are different from each other despite their geographical proximity. The region has 11 countries with a wide range of cultures, ethnicities, languages, religions, economic development status, etc., which give rise to very different consumer behavior and market characteristics.

As tech companies from neighboring countries and regions expand into Southeast Asia, the region’s diversity and differences pose challenges to their expansion, since each country likely requires a unique greenfield approach.

Khazenly, an Egyptian on-demand warehousing and fulfiLlment platform, raises $2.5M seed funding

The e-commerce market in Egypt is expected to grow 30% to $7.5 billion this year, spurred by a growing number of younger shoppers and rising incomes.

Local merchants are essential in driving this growth, and solving their logistical and operational needs end-to-end is where new upstarts in Egypt notice the most opportunity. Khazenly, founded in mid-2021, is one such startup. It is announcing that it has raised $2.5 million in seed funding.

Khazenly was launched by Mohamed Younes, Osama Aljammali, Mohamed Montasser, and Ahmed Dewidar. It is an on-demand digital warehousing and fulfillment management platform that provides an omnichannel solution to help merchants digitize their businesses.

On a call with TechCrunch, chief executive Younes said Khazenly solves fulfillment issues for small and medium-sized merchants who focus on business and consumers. He argues that these merchants don’t have the resources to pull off renting a large warehouse and engage in manual processes when carrying out operations. Thus, Khazenly allows merchants and social commerce retailers to optimize their fulfillment processes digitally when selling online (B2C), via retail stores (B2B), marketplaces, cross-border, or a combination of these channels.

“There is no player in Egypt matching the digital experience that we already have to manage both B2C and B2B,” the CEO said. “Though we solve both aspects separately, we are solving a big pain in the market by automating both.”

Younes also touched on the company’s focus on convenience. According to him, this, alongside its multifaceted client approach and data/AI-driven product, sets Khazenly apart from similar platforms in the market such as ShipBlu, Flextock and Bosta. “The combination of all this through the same platform allows us to have a big differentiation,” he said.

The platform’s use of AI and big data– stemming from the CEO’s background in that space after spending several years at IBM and Huawei — allows it to inform merchants on what products to stock concerning location and demand. At the same time, the rest of the executive and management team have experience in other segments of the business, having worked for the likes of DB Schenker, Uber, Amazon and Baker Hughes.

Khazenly also offers other services in addition to its warehousing and AI capabilities. They include cross-docking, transportation, delivery and cash collection services.

“Our clients carry out all these seamless experiences using our digital platform. Also, beyond the current fulfillment, we do many activities with our clients and support them in marketing and other value-added services,” said Younis.

The chief executive said his company operates an asset-light model as it doesn’t own any of the warehouses or delivery vehicles. For the latter, Khazenly partners with over 100 last-mile companies to fulfill delivery for its merchants. These merchants are charged varying monthly subscription fees calculated from their space allocated in the warehouse and the projection of orders.

“After the launch of three weeks, we found that some of the clients cannot calculate how much space their restock will consume in the warehouse,” the CEO said. “So we developed a calculator in which the client puts in very nice scalar quantities and automatically calculates how much space they will consume in the warehouse, estimates the number of orders, and puts out a subscription range.”

While Younes declined to give exact figures on the number of merchants on its platform or gross merchandise value (GMV) processed, he said Khazenly’s GMV is in eight figures. At the same time, the company supports merchants in over 16,000 self-service activities. Some brands that have used Khazenly’s digitized fulfillment services come from industries like fashion and electronics to FMCGs such as XRPS by Tradeline and Mozare3.

The on-demand digital warehousing and fulfillment platform bootstrapped its way to a soft launch mid-last year and is just receiving its first institutional capital.

The round was co-led by regional VCs Arzan Venture Capital and Shorooq Partners. Participating investors include Camel Ventures, Averroes Ventures, and a couple of angels.

There’s been an increased global focus on building more resilient e-commerce supply chains. According to Laith Zraikat, a partner at Arzan, backing Khazenly proves that the “logistics tech and fulfillment sector is still up for disruption.”

Khazenly plans to continue expanding its portfolio of data-driven products, it said in its statement. One of the products is its mobile dark stores, an offering that allows items to get shipped faster off the back of a more-efficient warehouse forecast.

Younis stated that proceeds from the investment would be used to quadruple the company’s facilities as it follows a roadmap of building more AI and data-driven products and expanding geographically.

“We are very excited and proud of what we did the last few months. And I believe in the coming days we will do even more strategic and key milestones to let our merchants grow even more,” he said.