Tag: e-commerce

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China Roundup: Xi’s power on bitcoin, the rise of Alibaba’s new rival

Welcome back to TechCrunch’s China roundup, a digest of the latest events that happened at major Chinese tech companies and what they mean to tech founders and executives around the world.

Alibaba’s nemesis

Alibaba’s new rival is shaking up China’s internet landscape.

This week, four-year-old e-commerce upstart Pinduoduo displaced JD.com to be the fourth-most valuable internet company in the country. Its market capitalization of $47.6 billion on Friday put it just behind e-commerce leader Alibaba, social networking behemoth Tencent and food delivery titan Meituan in China. Baidu, the search equivalent of Google in China, has fallen off the top-three club, ending a decade of unshakable dominance of Baidu, Alibaba, and Tencent (the “BAT”) on the Chinese internet.

The story of Pinduoduo comes down to growing internet penetration and the rise of social commerce. Pinduoduo, which is known for selling ultra-cheap products, is particularly popular with price-sensitive residents in small towns and rural regions, a market relatively underserved by online retail pioneers Alibaba and JD.com . However, Pinduoduo has set about targeting more urban consumers by heavily subsidizing big-ticket items such as iPhones.

Its seamless integration with WeChat, the ubiquitous messaging app owned by Pinduoduo investor Tencent, contributes to adaptability among a less tech-savvy population. WeChat users can access Pinduoduo via the messenger’s built-in lite app, skipping app downloads; they also get deals from group-buying, thus the name Pinduoduo, which means “shop more together” in Chinese.

The incredible rise of Pinduoduo, China’s newest force in e-commerce

Earlier this month, Pinduoduo founder and chief executive Colin Huang, a 39-year-old former Google engineer of few words, gave a 45-minute speech at the company’s anniversary, according to a summary published by local tech media Late News. He announced that Pinduoduo has surpassed JD.com in gross merchandise volume, or the total dollar value of goods sold. It’s unclear whether the companies use the same set of metrics for GMV, for instance, whether the figure includes refunded items.

While its rivalry with JD.com is nuanced as both companies are backed by Tencent, Pinduoduo’s competition against Alibaba is more blatant. In his missive to staff, Huang acknowledged that Pinduoduo is “standing on a giant’s shoulders,” hinting at Alibaba’s sheer size. When it comes to fighting the impending battle during the upcoming Single’s Day shopping festival (11/11), the founder sounded poised. “Pinduoduo should not feel pressured. The one who should is our peer.”

Also worth your attention

  • 82% of Chinese adults used digital payments in 2018, up about 5%; among those living in rural China, 72% made transactions via online banking, telephone banking, the point-of-sale system, ATM or other digital channels, said a new report released by the People’s Bank of China. Beijing’s push for rural areas to go cash-free is in part what gives rise to such flourishing e-commerce businesses as Pinduoduo.
  • Few things move the bitcoin market like President Xi Jinping’s endorsement of blockchain. Speaking at a politburo meeting on Thursday, Xi called for China to “take blockchain as an important breakthrough to achieve independence of core technologies” (in Chinese). Bitcoin price soared more than 10% in response. But as industry experts cautioned, when China, where crypto exchanges are banned, speaks of “blockchain” it usually means the encrypted technology that not only undergirds cryptocurrencies but can revolutionize a whole range of sectors like finance, manufacturing and agriculture. Expect all corners of Chinese society to capitalize on the blockchain concept with even greater force.

  • One of China’s most prominent venture investors just closed $352 million for the first fund of his new financial vehicle. JP Gan, a former managing partner at Qiming Venture Partners, recently started Ince Capital Partners with internet veteran and venture investor Steven Hu. Having backed noted companies including Xiaomi, Meituan, Ctrip, Musical.ly, to name just a few, Gan will continue to fund early to growth-stage startups in China’s internet, consumer and artificial intelligence sectors.
  • Smartphone maker Xiaomi hired leading voice recognition expert Daniel Povey. The researcher who was part of the team to develop the widely used open-source speech recognition toolkit Kaldi announced his next move on Twitter. Before this, Povey declined an offer from Facebook after he was fired by John Hopkins University for attempting to break up a student sit-in. He told The Baltimore Sun earlier that he intended to join a Chinese company because “they don’t have American-style social justice warriors” and he would feel “more relaxed among the Chinese.” Many Chinese tech companies have research and development operations in the U.S. including Xiaomi, which set up a U.S. R&D center in 2017 (in Chinese) to deepen collaboration with chipmaking giant Qualcomm.
  • NetEase’s e-learning unit Youdao began trading at $13.50 per ADS in the U.S. on Friday amid increased regulatory scrutiny on Chinese IPOs. Youdao, which operates a suite of popular online educational products from dictionaries to MOOC-style courses, had over 100 million monthly active users by the first half of 2019, shows its prospectus. It’s one of the many attempts by NetEase founder Ding Lei, once China’s richest man back in 2003, to add momentum to his 22-year-old company. These days NetEase makes the bulk of its revenue from video games and ranks only behind Tencent in China’s booming gaming sector. In September, it sold its once-hopeful cross-border e-commerce business Kaola to Alibaba for $2 billion. 

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Very Good Security raises $35M in Series B in ‘zero data’ push

Data security startup Very Good Security, has raised $35 million in its latest round of funding.

Its Series B, announced Thursday, was led by Goldman Sachs, with participation from existing investors Andreessen Horowitz — which led its $8.5 million Series A round — and Vertex Ventures US.

Very Good Security’s offering is simple. Instead of other businesses and startups holding onto their own collected user data, Very Good Security stores it in its secured vault, and gives its business customers the tools to access, edit, and process it without any of the liability.

The company’s software-as-a-service offering replaces sensitive data, such as credit card numbers or medical information for example, with an aliased version. The data can used just like ordinary data but it’s unreadable to humans, rendering it useless to hackers in the event of a data breach or theft.

Businesses who sign up to the data security offering can say they’re “zero data,” a term Very Good Security uses to describe companies that don’t store their own data. The company says by storing data in its vaults and not their own makes it more difficult for attackers to steal user data, while relieving companies of the burden of having to maintain a secure data environment themselves.

It makes sense, given how startups especially are notoriously unfocused on security.

Mahmoud Abdelkader, co-founder and chief executive of Very Good Security, said his company helps other businesses and startups launch and grow while “offloading the risk that comes with data custodianship.”

The company said it will use the $35 million round to support its “rapid” growth as its customer base increases. To date, the company has enlisted Brex and Deliveroo as customers, indicating considerable trust in the platform.

Very Good Security makes data ‘unhackable’ with $8.5M from Andreessen

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Combining StitchFix and Instagram, FlipFit ushers in the next phase of social retail

Nooruldeen Agha, has been thinking about what’s next for fashion retail for years.

The serial entrepreneur behind the Dubai-based online fashion retailer, Elabelz and marketing studio Elephant Nation had always wanted to redesign the shopping experience for how customers actually shopped in stores and online.

“If it was 1994 and we knew what technology is today and we want to reinvent this [shopping] experience… one thought was how we bought our whole life and how we go to the mall,” says Agha. 

Shopping is, for most people, a social activity. Friends go to the mall or department store together to try on clothes and ask each other for advice. Most online and offline shopping experiences are completely divorced from that, Agha said.

“Fashion shopping has always been a social experience,” said Agha, co-founder and co-CEO of Flip, in a statement. “The decision for today’s shoppers to buy happens once they receive validation from friends and family, but e-commerce has made shopping very isolating. We are connecting the social behaviors of shopping, which were previously only possible offline, with a virtual experience.”

So he wanted to take the social aspects of Instagram and the subscription box and retail elements of StitchFix to create the new Los Angeles-based startup, Flip Fit. 

But to do it, Agha needed a push. His businesses in Dubai were successful, he says, and there was no need for him to pursue another new venture — especially one in America.

Then he met Jonathan Ellman at the Summit conference in Los Angeles.

“We met at a party.  At midnight,” Ellman says. “At 10 o clock the next morning we were sitting on a balcony talking to each other and  came to an understanding that Noor with his dynamics and understanding the industry… that he could not stay in Dubai.”

Ellman has a history as an investor and an operator. He was the founder of the scout program at GreatPoint Ventures and spent years at HoneyBook. And he knew immediately that Agha’s idea had legs.

For the next year, the two laid the foundation for the business. Noor had all of the connections already. Elabelz was pulling in $23 million in revenue off of the sale of 150,000 boxes of clothes — so the logistics and fulfillment and brand partnerships would be a breeze. The company has 200 brands that have already signed on as of today’s launch including: AG, JBrand, Hudson, Retrobrand, Boyish, MadeWorn, Junkfood, Mavi and Edwin.

FlipFit works by creating a social network based on friends and followers. The company isn’t borrowing from Facebook or Instagram, but instead is trying to build out its network from scratch. Users of the app are encouraged to take vote on selfies their friends take in different outfits. Each vote garners in-app cash that can be redeemed whenever someone purchases an item ($10 for each new voting user and $1 per vote).

As users vote on the styles they like, they can also add clothes to a virtual wardrobe. When they’re ready they can select a few styles from that closet to be shipped out to them to try on. If the user doesn’t like the clothes, then they just return it.

The mechanics aren’t that different from a number of other online retailers, but the difference is in the company’s decision to create an entirely new social graph.

Initially, Agha and Ellman are tapping influencers to hook in their target customers. Over the next 90 days roughly 500 influencers across social media will be encouraging their audiences to vote on different outfits using the FlipFit app. The influencers are getting $150 in store credit twice-a-month or getting paid sponsorships (depending on the size of their following). The outfits with the most votes are the ones that the influencers will keep… training their audiences on the mechanics of how to shop as they market the product.

Agha says that the user experience is most akin to TikTok or Snap,rather than Instagram. There’s a publicly available feed for those who want to use it or the feed can be made private and shared among friends. And the app is only available for children 13 and up.

On the business side, the company is keeping 33% of the cash from any item sold. It’s cut is higher, because FlipFit handles all of the back end logistics of shipping and returns, according to the co-founders. Every box the company ships includes the standard pre-printed return label.

“Returns are our default. While the rest of the industry is fighting this phenomena, we are leaning into it,” said Jonathan Ellman, co-founder and co-CEO of Flip. “Almost half of all fashion shoppers bracket their online purchases, buying several pieces to try on at home with the intention of returning what doesn’t fit or what doesn’t match what they saw online. We believe returns should be as easy as the purchase and by making the shopping process more efficient and effective, we’re keeping clothes out of landfills and in your closet.”

The company is, to date, backed by a $3.75 million seed round led by TLV Partners with participation from Lool Ventures.

“Flip is the evolution of social media and e-commerce — birthing the baby of Istagram and Amazon and creating the first physical product marketplace where your likes and actions impact the products you receive,” says Rona Segev, a general partner at TLV.

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Former Stitch Fix COO Julie Bornstein is rewriting the e-commerce playbook

More than two years after Julie Bornstein–Stitch Fix’s former chief operating officer–mysteriously left the subscription-based personal styling service only months before its initial public offering, she’s taking the wraps off her first independent venture.

Shortly after departing Stitch Fix, Bornstein began building The Yes, an AI-powered shopping platform expected to launch in the first half of 2020. She’s teamed up with The Yes co-founder and chief technology officer Amit Aggarwal, who’s held high-level engineering roles at BloomReach and Groupon, and most recently, served as an entrepreneur-in-residence at Bain Capital Ventures, to “rewrite the architecture of e-commerce.”

“This is an idea I’ve been thinking about since I was 10 and spending my weekends at the mall,” Bornstein, whose resume includes chief marketing officer & chief digital officer at Sephora, vice president of e-commerce at Urban Outfitters, VP of e-commerce at Nordstrom and director of business development at Starbucks, tells TechCrunch. “All the companies I have worked at were very much leading in this direction.”

Coming out of stealth today, the team at The Yes is readying a beta mode to better understand and refine their product. Bornstein and Aggarwal have raised $30 million in venture capital funding to date across two financings. The first, a seed round, was co-led by Forerunner Ventures’ Kirsten Green and NEA’s Tony Florence. The Series A was led by True Ventures’ Jon Callaghan with participation from existing investors. Bornstein declined to disclose the company’s valuation.

“AI and machine learning already dominate in many verticals, but e-commerce is still open for a player to have a meaningful impact,” Callaghan said in a statement. “Amit is leading a team to build deep neural networks that legacy systems cannot achieve.”

Bornstein and Aggarwal withheld many details about the business during our conversation. Rather, the pair said the product will speak for itself when it launches next year. In addition to being an AI-powered shopping platform, Bornstein did say The Yes is working directly with brands and “creating a new consumer shopping experience that helps address the issue of overwhelm in shopping today.”

As for why she decided to leave Stitch Fix just ahead of its $120 million IPO, Bornstein said she had an epiphany.

“I realized that technology had changed so much, meanwhile … the whole framework underlying e-commerce had remained the same since the late 90s’ when I helped build Nordstrom.com,” she said. “If you could rebuild the underlying architecture and use today’s technology, you could actually bring to life an entirely new consumer experience for shopping.”

The Yes, headquartered in Silicon Valley and New York City, has also brought on Lisa Green, the former head of industry, fashion and luxury at Google, as its senior vice president of partnerships, and Taylor Tomasi Hill, whose had stints at Moda Operandi and FortyFiveTen, as its creative director. Other investors in the business include Comcast Ventures and Bain Capital Ventures

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Apple’s China stance makes for strange political alliances, as AOC and Ted Cruz slam the company

In a rare instance of bipartisanship overcoming the rancorous discord that’s been the hallmark of the U.S. Congress, senators and sepresentatives issued a scathing rebuke to Apple for its decision to take down an app at the request of the Chinese government.

Signed by Senators Ron Wyden, Tom Cotton, Marco Rubio, Ted Cruz, and Congressional Representatives Alexandria Ocasio-Cortez, Mike Gallagher and Tom Malinowski, the letter was written to “express… strong concern about Apple’s censorship of apps, including a prominent app used by protestors in Hong Kong, at the request of the Chinese government.”

In 2019, it seems the only things that can unite America’s clashing political factions are the decisions made by companies in one of its most powerful industries.

At the heart of the dispute is Apple’s decision to take down an app called HKMaps that was being used by citizens of the island territory to track police activity.

For several months protestors have been clashing with police in the tiny territory over what they see as the undue influence being exerted by China’s government in Beijing over the governance of Hong Kong. Citizens of the former British protectorate have enjoyed special privileges and rights not afforded to mainland Chinese citizens since the United Kingdom returned sovereignty over the region to China on July 1, 1997.

China attacks Apple for allowing Hong Kong crowdsourced police activity app

“Apple’s decision last week to accommodate the Chinese government by taking down HKMaps is deeply concerning,” the authors of the letter wrote. “We urge you in the strongest terms to reverse course, to demonstrate that Apple puts values above market access, and to stand with the brave men and women fighting for basic rights and dignity in Hong Kong.”

Apple has long positioned itself as a defender of human rights (including privacy and free speech)… in the United States. Abroad, the company’s record is not quite as spotless, especially when it comes to pressure from China, which is one of the company’s largest markets outside of the U.S.

Back in 2017, Apple capitulated to a request from the Chinese government that it remove all virtual private networking apps from the App Store. Those applications allowed Chinese users to circumvent the “Great Firewall” of China, which limits access to information to only that which is approved by the Chinese government and its censors.

Apple’s capitulation to China’s VPN crack-down will return to haunt it at home

Over 1,100 applications have been taken down by Apple at the request of the Chinese government, according to the organization GreatFire (whose data was cited in the Congressional letter). They include VPNs, and applications made for oppressed communities inside China’s borders (like Uighurs and Tibetans).

Apple isn’t the only company that’s come under fire from the Chinese government as part of their overall response to the unrest in Hong Kong. The National Basketball Association and the gaming company Blizzard have had their own run-ins resulting in self-censorship as a result of various public positions from employees or individuals affiliated with the sports franchises or gaming communities these companies represent.

However, Apple is the largest of these companies, and therefore the biggest target. The company’s stance indicates a willingness to accede to pressure in markets that it considers strategically important no matter how it positions itself at home.

The question is what will happen should regulators in the U.S. stop writing letters and start making legislative demands of their own.

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Popular app Snaptube caught serving invisible ads and charging users for premium purchases they haven’t made

A popular video downloader app for Android has been found generating fake ad clicks and unauthorized premium purchases from its users, according to a security firm.

Snaptube, which boasts some 40 million users, allows users to download videos and music from YouTube, Facebook, and other major video sites. The app, developed in China, is not on Google Play because the app maker claims Google will not allow video downloader apps on the store. Some third-party app stores estimate Snaptube has been downloaded over a billion times to date. The app’s developer says that the app is “safe” to use.

But researchers at London-based security firm Upstream, which shared its findings exclusively with TechCrunch, said the free app ends up costing consumers.

Upstream’s chief executive Guy Krief said users are served invisible ads without their knowledge that run silently on the device, allowing the app maker to generate ad revenue at the expense of churning up a user’s mobile data and battery power. The app also uses the same background click technique to rack up premium purchases charges that the user never asked for.

Krief said the only indication that a user’s device might be used in this way is if their mobile data usage increases, their device gets warm, and the battery runs out faster than usual.

The company pinned the blame on a third-party software development kit (SDK) code, known as Mango, embedded inside Snaptube’s app. Mango was also used in Vidmate, a similar video downloader app also accused of ad fraud behavior; as well as 4shared, a cloud storage app.

According to Uptream, this third-party code kit downloads additional components from a central server in order to engage in this fraudulent ad activity, and uses chains of redirection and obfuscation to hide its activity.

Mango is particularly sneaky, said Krief. Within hours of the news breaking that Vidmate’s app was engaged in similar suspicious behavior, his company saw a Snaptube’s suspicious activity drop almost immediately. “Our assumption back then was they’re probably also using similar code and they went silent because of all the publicity,” he said in a phone call.

Two months later, the same suspicious activity in Snaptube’s app resumed.

A graph showing Snaptube’s suspicious activity dropping as soon as the Vidmate story is published. (Image: Upstream)

Krief said it was “very common” to see apps engaging in ad fraud to go through bursts of high levels of activity, followed by periods of quiet.

In recent weeks Upstream said it’s blocked more than 70 million suspicious transactions originating from four million devices, according to data from its proprietary security platform. The company said consumers could have been charged tens of millions of dollars in unwanted premium charges had those clicks not been blocked.

Snaptube said in a statement: “We didn’t realize the Mango SDK was exercising advertising fraud activities, which brought us major loss in brand reputation.”

“After the user complained about the malicious behavior of the Mango SDK, we quickly responded and terminated all cooperations with them,” a spokesperson said. “The versions on our official site as well as our maintained distribution channels are free of this issue already.”

Snaptube said it was “considering” legal action against the Mango developers.

It’s not the first time Snaptube has been caught out engaging in potentially fraudulent activity. In February, security firm Sophos found the app engaging in similar fraudulent behavior — generating and reporting fake ad clicks and racking up costs for the user. Later in the year, Snaptube responded to reports that Android devices were warning users that the app contained the suspicious third-party code, noting that it would “terminate” using the code “as soon as possible.”

That promise was made in August. Yet, some three months later, the code remains in the app.

File-storage app 4shared caught serving invisible ads and making purchases without consent

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Arianna Huffington’s Thrive Global is buying a startup that uses neuroscience to boost app usage

When Arianna Huffington stepped down from her role at the Huffington Post to start Thrive Global, she said the goal of her new business was to help a generation “avoid the burnout that all too often comes with success today.”

In practice, that has meant creating a business that sells mindfulness and general health and wellness tips and tricks to a cohort of corporations that believe increased mental and physical health can lead to greater on-the-job productivity.

Now, Thrive Global is adding a tech tool to its arsenal of cognitive behavioral therapies with the acquisition of the Los Angeles-based startup, Boundless Mind.

Originally called Dopamine Labs, the company was founded in 2015 to bring some of the same technologies that social media companies like Facebook used to boost engagement to a broader range of applications.

Meet the tech company that wants to make you even more addicted to your phone

Terms of the deal were not disclosed, but the stock and cash acquisition will see all nine members of the current Boundless team join Thrive Global. Previous Boundless investors including Revolution’s Rise of the Rest Seed Fund and Esther Dyson will join Thrive Global’s cap table.

“We were very impressed by their neuroscience-based artificial intelligence that they used to power changes in behavior,” says Huffington. “We can use technology to hook people to unhook them from unhealthy behaviors.”

Boundless “epitomized the use of technology to encourage healthy habits,” Huffington says.

From Huffington’s perspective, most health problems in the U.S. are actually rooted in behavioral problems rather than biological ones. “Until 100 years ago, people died from infectious diseases… Now most people are dying from behaviors,” says Huffington, quoting Boundless Mind co-founder Dalton Combs.

Roughly 70% of healthcare spending in the U.S. goes to behavioral change and lifestyle-related conditions, says Huffington. Thrive Global tackles the issue through a combination of pop psychology and celebrity advice, while Boundless uses artificial intelligence and machine learning nudges.

The Boundless technology works by monitoring what activity is happening on the phone’s tap screen (similar to Apple’s screen time monitoring). What Boundless does on the back end is analyze that data and create prompts to encourage behavior — in much the same way that other companies’ apps have notifications to prompt re-engagement.

Going forward, the Boundless team is hoping to use more of the information coming from a phone’s increasing array of sensors to better refine its notifications. Results from the adoption of the company’s software vary, but Boundless points to data from apps spanning health, fitness, productivity, finance and e-commerce – including a 60% increase in walking, 30% increase in productivity and 21% increase in engagement around diet and exercise. 

APPROVED BOUNDLESS x AH PHOTO 1

Arianna Huffington and the co-founders and staffers of Boundless Mind

Thrive Global has three pillars to its business: live workshops, a digital health program called Thriving Academy, and a newer mental health focused package called Thriving Mind.

The company has already signed corporate partners like Accenture, JPMorgan, Hilton, Bank of America and Procter & Gamble, and Huffington says customers have already seen results in lower rates of employee attrition and better employee satisfaction results on surveys. 

These kinds of correlations don’t mean causation and the company is still working to better quantify the benefits of adopting its workplace wellness protocols. One of the places where Thrive Global is putting its brain training regime to the test is in call centers in Central America, 

“You can imagine how the Boundless intervention will allow us to hyper-personalize,” says Danny Shea, Thrive Global’s head of global expansion. In call centers that could mean prompting an employee to take a break after a long or stressful call.

“We’re thrilled to see the continued growth and market expansion at Thrive Global” said Somesh Dash, General Partner at IVP and member of Thrive Global’s Board of Directors. “The combination of Thrive’s mission and Boundless Mind’s technology is truly remarkable and the integration will help Thrive scale a game-changing and differentiated behavior change technology platform to enterprises around the world.”

To date Thrive Global has raised over $65 million from investors including JAZZ Venture Partners, IVP, Marc Benioff, Ray Dalio, and Kevin Durant.

 

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Walmart launches in-home grocery delivery in three cities: Kansas City, Pittsburgh & Vero Beach

Walmart will bring your groceries to you and put them away in the fridge, with the launch of its new service, InHome. The retailer is today debuting its new in-home grocery delivery service in three cities: Kansas City, (Missouri and Kansas); Pittsburgh, Pennsylvania; and Vero Beach, Florida. Customers in these markets can subscribe to InHome for $19.95 per month, then receive free, unlimited deliveries where Walmart associates enter their home and put the groceries away while live-streaming the delivery in real-time.

The retailer had previously detailed its plans to offer in-home grocery delivery earlier this year, saying that it would make it easier for customers to shop for groceries online.

Unlike with traditional e-commerce orders, groceries can’t sit outside on the doorstep for hours. Using insulated coolers to work around this problem can be costly, and it only buys a little more time. Instead, InHome delivery solves the problem of dealing with fresh and frozen groceries by simply putting them away at the time of delivery.

At launch, Walmart is partneroing with Level Home for its front door smart entry technology and Nortek Security & Control for its garage door smart entry technology. Level Home also today announced $71 million in funding, which included a strategic investment from Walmart.

From the InHome website, customers can select either device for $49.95 and receive free, professional installation. They can then start their InHome subscription, taking advantage of a free month trial to see if the service works for them.

While deliveries won’t have other fees beyond the $19.95 per month InHome subscription, there is a $30 minimum order to use the service. In other words, it’s meant to be used in place of a real grocery shopping trip, not just for a few items for dinner.

When it’s time for delivery, the Walmart associate uses a one-time code to unlock the door or garage using the InHome app, which pairs with the supported smart entry device.

And to assuage customers’ concerns about strangers entering their home when they’re not there to supervise, Walmart came up with the pretty wild idea to record the delivery in real-time so customers can watch it take place from afar.

On the associates’ vest, they’ll wear a proprietary, live-streaming camera that sends video of the delivery right to the customer’s device. And if the camera doesn’t turn on, the door or garage door won’t unlock, Walmart says.

InHome is Walmart’s answer to Amazon’s Key by Amazon service, which involves both in-home and in-car delivery of Amazon purchases. But unlike Key, which focuses on Amazon packages, InHome is for Walmart Grocery orders only, not Walmart.com merchandise.

The service is one of several ways Walmart has been expanding its online grocery business in recent months.

It also last month expanded its Delivery Unlimited service, an Instacart rival, across the U.S. At $12.95 per month, it’s the better choice for anyone who was already getting delivery from Walmart Grocery at least twice per month, given the $9.99 per delivery fee.

And now, for a few dollars more, InHome, makes sense for those who want even less hassle when it comes to online grocery shopping.

There’s an un-touted environmentally-friendly aspect to this service, as well. First, grocery delivery can end up being more efficient than everyone shopping for themselves, as drivers can often deliver a couple of orders on the same trip, when the customers are near each other. And the drivers could use larger cooler bags and other reusable containers, like crates, instead of plastic bags, for example, since they’re putting items away instead of handing them over. (Typically, grocery delivery services today bring your order in tons of plastic bags.)

Of course, individual stores may not enforce the use of reusable bags — that remains to be seen.

Walmart says the public launch of InHome will help it gain insights before it rolls out the service more broadly.

 

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Source: Nike has picked up Russell Wilson’s Tally/TraceMe in a rare acquisition

Nike has long been synonymous with premium sneakers and other sports gear, but now it seems that the company could be extending its brand into another area — digital media — thanks to the rumored acquisition of a Seattle-based startup.

TechCrunch has learned from a source that multi-billion dollar sports giant has acquired TraceMe, which originally built an app to let fans engage with sports stars and other celebrities before later pivoting into a service called Tally, a platform aimed at sports teams, broadcasters and venues to help fans engage around sporting events.

TraceMe was originally founded by Russell Wilson, the champion quarterback of the Seattle Seahawks, who was the executive chairman of the startup. The company had raised at least $9 million from investors that included the Seattle-based Madrona Venture Group and Bezos Expeditions (Amazon CEO Jeff Bezos’ fund), as well as YouTube co-founder Chad Hurley and others and it was last valued, in 2017, at $60 million.

Our source said the deal closed in recent weeks and that “it was a good outcome” for the company and investors. It involved both IP — the main interest, the source said, was in TraceMe’s tech rather than Tally’s — and the team.

Indeed, at least eight of them, including TraceMe’s CEO Jason LeeKeenan, an ex-Hulu executive, are now listing Nike as their place of employment. LeeKeenan describes his new role as the head of Nike Seattle. Others on the team now have taken roles that include software engineers, head of product and product designers.

No one at TraceMe and Nike that we have contacted has responded to our requests for comment but just a little while ago GeekWire (which likely had the same tip we did) published a post noting that it had a source that confirmed the deal.

The athletic footwear giant Nike is no stranger to the world of technology: it has been a longtime collaborator with the likes of Apple to develop apps for its devices and has been an early mover on the concept of bringing and integrating cutting-edge (yes, possibly gimmicky) tech into its footwear and other gear. And that’s before you consider Nike as an e-commerce force.

But while the dalliance between sports, tech, and fashion is well established, this deal opens up a different frontier for the company. It’s very rare for Nike to make an acquisition, but it makes sense that if it were going to do some M&A, that it would be in the area of digital media and picking up engineers to execute on a wider vision in that area.

The company is best known, of course, for its shoes and related sporty clothes, which it has for a long time created in co-branding with the biggest sports stars and has more recently started to extend to a wider circle of celebrities and hot brands in a spirit of sporty street style. These have included the likes of so-cool Supreme, Travis Scott, and seemingly tentative forays into music culture.

Nike overshadows all other sports shoe brands in size, with its current market cap at nearly $117 billion, more than twice that of its closest competitor, Adidas . But Adidas has been stealing a march when it comes to partnerships with a wide network of celebrities (even if Drake prefers checks over stripes).

While it isn’t clear yet how and if Nike will be using the startup’s existing services, you could see how a deal like this could help Nike start to think about how it might leverage the collaborations and endorsements it already has in place into experiences beyond shoes, advertising and athletic performance. In this age of Instagram and influencers playing a massive role in shifting consumer sentiment (and dollars), this could give Nike a shot at building its own media platform, independent of these, on its own terms.

This is a bigger trend that we’re seeing across a lot of digital media. Consider how companies like Spotify have extended beyond simple music streaming, investing in building tools to help artists on its platform with marketing and expanding their brands: selling shoes means selling a concept, and that concept needs to have a foothold in a digital experience. 

 

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Africa e-tailer Jumia’s shares fall 4% day after IPO lockup expiration

Shares of Africa focused e-commerce company Jumia dropped 4% the day after the lockup period expired for its April IPO on the New York Stock Exchange.

The lockup provision prevents major shareholders — namely those who purchased equity pre-public listing — from selling their shares for a specified number of days following the IPO.

Jumia’s stock price began Thursday at $7.54, fell to an all-time low of $6.98 by 2pm, and then closed 35 cents down from opening, at $7.19. Jumia’s trading volume on Thursday moved up 19 percent over the daily average since the company went public.

Jumia Share Price October 10Sites that track SEC Form 4 trades, or sales by insiders, aren’t showing anything (at the moment) for Jumia.

What does this all mean? It appears there wasn’t an immediate big stock sell by Jumia’s early and large shareholders post lockup expiry. There was some speculation these investors could drop the company after several rough and tumble months for Jumia post IPO.

Founded in Lagos in 2012, Jumia currently operates multiple online verticals in 14 African countries — from B2C consumer retail to travel bookings.

For Jumia, going public has been an up and down affair. After becoming the first tech startup operating in Africa to list on a major exchange, the company saw its share price rise 70% after listing on the NYSE in April at $14.50.

Then in May, Jumia’s stock tumbled when it came under assault from a short-seller, Andrew Left, who accused the company of fraud in its SEC filings.

Africa e-tailer Jumia issues post-IPO results amid short-sell assault

Jumia’s latest earnings reporting — delivered in August — had some downside beyond losses. The  company did post second-quarter revenue growth of 58% (≈$43 million) and increased its customer base to 4.8 million from 3.2 million over the same period a year ago.

But Jumia also posted greater losses for the period, 67.8 million euros, compared to 42.3 million euros in 2018.

On top of that, Jumia opened up about a sales related fraud (that it has reported in its original SEC IPO filing) committed by some of its employees and members of its JForce program “to benefit from differences between commissions charged to sellers and higher commissions paid to JForce agents,” according to a Jumia statement.

“The transactions in question generated approximately 1% of our GMV in each of 2018 and the first quarter of 2019 and had virtually no impact on our 2018 or 2019 financial statements,” the statement continued.

Collectively, this has added up to influence Jumia’s share-price falling some 50% from its opening price of $14.50 and 80% from its high of $46.99 on May 1.

As a public company now, the most direct way for Jumia to revive its share-price would be reducing its losses while maintaining or boosting revenues. Of course, that’s the common prescription for many a tech company.

Jumia believes expanding and generating more revenue through its JumiaPay product (with better margins than B2C e-commerce transactions) could help close the revenue vs. loss gap.

Investors and the market at large will be able to track Jumia’s progress during its next (Q3) earnings call, scheduled for November 12, Jumia confirmed to TechCrunch.