Ant is changing how consumers borrow money from its app

In December 2020, Beijing laid out a guideline for Ant Group to “rectify” its business after calling off its IPO, which could have been the largest initial public offering in history. In the plan, regulators asked Ant to revamp its credit business, among other changes that would make it subject to the same set of regulations overseeing financial institutions. In other words, Ant can no longer get by with its freewheeling practices by calling itself a “tech” firm.

Nearly a year later, the Alibaba-affiliated fintech powerhouse showed that it has almost finished restructuring its popular consumer credit products.

Credit loan products contributed nearly 40% of Ant’s revenues in the six months ended June 2020, according to the firm’s prospectus filed last year. The two main products are Huabei (Spend), which launched in 2014 for daily expenditures by consumers, working like a virtual credit card. A year later Jiebei (Borrow) was introduced as a credit product for larger consumption transactions.

Under the old model, Ant originated loans that were then underwritten by third-party banks and other financial institutions. As of June 2020, about 98% of Ant’s credit balance originated through its platform was underwritten by its partner financial institutions or securitized, according to the firm’s prospectus.

Jiebei has split itself into two brands, users reported earlier this week. Credit lines extended by third-party banks are now called Xinyong Dai (Credit Loan) on Alipay, Ant’s flagship financial services app. Those provided by Ant’s consumer finance company, which was recently established at the behest of regulators, are staying under the Jiebei brand.

Huabei has similarly started a restructuring, which will show users which loans are extended independently by banks and which by Ant’s consumer finance firm. Huabei will focus on “small-ticket” everyday transactions, it said in a Weibo post.

“Following the brand differentiation, users applying for credit loan services will have more information about their credit providers to avoid brand confusion.”

Huabei also noted that it’s now submitting consumer credit information to a database overseen by China’s central bank. It started the routine in September after it established its consumer credit company, which, just like banks, need to report their credit information to the central bank in China.

4 common DEIB mistakes startups can avoid

As a startup founder, you’re likely laser-focused on growth. We get it: You can’t do anything at all if the lights aren’t on. But if you want to survive and thrive as a company, investing early in diversity, equity, inclusion and belonging (DEIB) is critical.

In the Great Resignation era, talent is in high demand, willing to leave and often motivated by factors other than pay.

Unfortunately, we’ve seen startups make the four mistakes below over and over, and it costs them in time, money and talent. You can’t afford that. Take the time to understand why these DEIB mistakes have long-term costs and use our tips to course correct them now.

Mistake 1: Your hiring strategy is based on referrals

You managed to bring together a group of talented, motivated people. You’re doing well and they’re all excited to tell their friends and former colleagues about new job openings. Thanks to their enthusiasm, you’re filling jobs quickly, without even needing to post them or spend money recruiting. Win, right?! Wrong.

First, people’s networks are very homogeneous (three-quarters of white Americans, for example, don’t have a single Black friend). Despite a lot of anecdotal beliefs about the quality of referral hires, research actually shows that referrals don’t perform better. You’re not getting the best person for the job — you’re getting the easiest person to find.

You’re also setting up extremely bad company habits. Good hiring is a habit that involves consistently articulating what is important for each role, evaluating those criteria and making sound hiring decisions. Referral hiring kicks the can of good habits far down the road, where it is much more costly to fix.

If you want to be a company with a future, you will need a real hiring strategy. Get started now. Building out an effective hiring strategy will align your team on what matters most to your organization, ensure you are hiring the best and help you avoid the lack of diversity nearly all large tech companies face today.

Start with ensuring that referrals go through the same hiring process as all other candidates. Next, focus on your job descriptions. Make sure they clearly articulate four to five of the main skills required for the job, not a laundry list. Finally, ensure interviewers actually evaluate those skills in a meaningful way. These steps are the foundation of structured hiring, which 100 years of research shows is the most effective way to hire.

Mistake 2: You don’t have job levels

Startups move fast and startup employees are known for being able to “wear many hats.” Surely, in such a fast-paced and uncertain environment, writing out job levels doesn’t make sense, right? Wrong.

Without a basic job-level system in place, hiring, compensation and promotion decisions are made based on completely subjective criteria. Eventually, those people you’ve hired, paid and promoted are going to start talking to each other and asking how those decisions were made.

If you don’t have a coherent answer that you are comfortable sharing with them and your entire team, you’re in trouble. People are willing to accept difficult realities, like if current business needs don’t support having two senior engineers. They are much less forgiving of poor communication and unfairness.

Instead, use Radford or similar leveling rubrics as a guide to sketch out job levels for each of the departments at your company (even if it’s a department of one). This will help you write great job descriptions because it forces you to clarify the key components of each role. Then, you will know what to evaluate folks on when it’s time to make decisions about rewards, like raises and promotions.

Don’t worry: This system is flexible, and you can make changes as you grow. The important thing is that it puts your company in the habit of making people decisions based on predetermined criteria rather than on a bias-prone case-by-case basis.

Mistake 3: Your policies focus on the employees you have, not the ones you want

Your current team is mostly 20-somethings with big dreams, similar hobbies and few responsibilities outside of work. Maybe no one has a partner, let alone a baby. So it doesn’t make sense to write out parental leave and flexible work policies, right? Wrong.

Your benefits partly serve as a recruiting ad for your company. Your current team may be delighted by free snacks and a gym stipend. But ambitious men and women that want a family (90% of Americans do) and the 31% of the workforce with children have scanned your benefits and decided to pass. Lack of a thoughtful parental leave policy is a sign that you haven’t thought about how to support employees with different life situations and needs.

An equitable parental leave policy tells all potential candidates that you think about your employees as whole people and are committed to supporting them over the long haul. PL+US offers a step-by-step guide to creating a gender-neutral, equitable policy. Parental leave is just one example, though. Think about all the talent pools you could tap that may be underrepresented in your company. What kind of policies and benefits could you offer to support (and attract) those folks?

Mistake 4: You don’t take onboarding seriously

You’re moving fast, so your new hire onboarding consists of a rushed email and a smattering of links and documents to get your new employee “up to speed.” That’s OK because those smart self-starters you just hired will figure it out on their own, right? Maybe, but it may cost you.

A rushed, cursory onboarding experience sets up your shiny new employees for failure and disengagement. When new hires are thrown into the deep end without a clear understanding of what is expected of them, they spend precious energy second-guessing themselves. (In fact, high-achieving individuals are especially likely to suffer from “imposter syndrome.”) And your employees aren’t robots — they have a fundamental human need to connect with others and fit in. Yet, 40% of employees feel isolated at work.

So invest in creating a thoughtful onboarding process. There are many great onboarding templates and checklists to get you started, like this one. Next, focus on communicating clear expectations by writing out the unwritten rules in a company handbook and laying out a clear first project.

Finally, don’t forget the personal connections. One belonging intervention that we use at Peoplism is to have all current employees share a mistake they’ve made. This not only helps people get to know their new colleagues on a deeper level, but research also shows simply learning that others have had to overcome their insecurities increases people’s sense of belonging and performance.

If you survive as a company, you will eventually need to have a robust hiring strategy, a job-level system, thoughtful policies and a thorough onboarding process. The question is this: Will you leave a sea of disgruntled employees rage-reviewing you on Glassdoor before you get to fixing these four common DEIB mistakes?

Don’t wait! Invest in your people practices and your DEIB strategy as early as possible. These four common mistakes are not just bad for underrepresented employees — they’re bad for all of your current and future employees, which means they’re bad for your startup.

Airwallex raises $100M at a $5.5B valuation to expand its business banking and payments platform globally

E-commerce and other online businesses are becoming increasingly global in their operations and customer bases, and a startup called Airwallex — which has built a banking solution that addresses the opportunity to provide cross-border financial services — has been seeing a massive surge of activity. To capitalize further on that opportunity, today the company is announcing growth funding.

Hong Kong and Melbourne-based Airwallex has raised $100 million, capital that it will be using to continue building out its banking and payments businesses into more markets, and to invest expanding its products.

The funding — which is being led by Lone Pine Capital, and joined by 1835i Ventures (the venture arm of ANZ, the Australia and New Zealand Banking Group) and Sequoia Capital China, all previous investors — is an extension to the company’s Series E that it announced only in September; and it brings the total of the round to $300 million.

The valuation is also being extended with this latest injection: Airwallex is now worth $5.5 billion (compared to $4 billion in September). From what we understand, the company was getting term sheets as high as $7 billion from outside investors (that outside interest was what prompted the round in the first place).

Airwallex today has around 20,000 customers spanning areas like e-commerce, tech/SaaS companies and professional services. It also has 500 large platform customers (Papaya Global and GOAT are two examples) that have embedded Airwallex’s services within their own services to power transactions for their own customers.

That business has seen a big boost of activity as a result of a few key developments in the world.

For starters, the Covid-19 pandemic has led to a big shift towards more e-commerce among both consumers and businesses. In turn, businesses have needed to extend their financial infrastructure to accommodate more customers. And because e-commerce has broken down the barriers of where you can do business, they’ve also had to extend their financial reach to touch customers in ever-wider geographies. Covid-19 has also massively disrupted supply chains, so businesses have also had to become more enterprising in how they manage these: they may now have to work with more partners, and potentially be agile enough to pay different people month-to-month.

All of these present the kinds of use cases that speak to the kinds of services that Airwallex offers. Jack Zhang, Airwallex’s co-founder and CEO, said that revenues at the company grew 100% in Q3 over Q2. Its annualized revenues in that most recent quarter were $100 million. “We had a target to achieve that at the end of the year, but we delivered it a quarter earlier,” he said.

It also means a number of other companies are also looking to serve this need: competitors to Airwallex across its different services include Stripe, PayPal, Revolut (via Revolut Business), and more.

Airwallex built its company originally around business banking — its thesis was that companies had a lot of banking options when it came to doing business in their own markets, but for those who worked across borders, it offered domestic and international accounts that worked as easily as domestic ones, along with card issuing, transfers and foreign exchange, payouts and so on. More recently, the company has moved into payments to complement that. The plan will be to add more services natively to that stack, as well as integrate with third-party providers by way of an app store that it is now developing. That will launch potentially next year.

Zhang also said some of the funds will be used for M&A, as part of the inevitable consolidation that we’re going to continue seeing in fintech.

“We’ve now raised $800 million in the last 6 years, with $600 million in the last two years, and we still have $600 million in the bank right now,” he told TechCrunch. “A very large part of that is going to be used for M&A purposes.” Features that Airwallex wants to have as a native part of its stack it might buy instead of building itself include subscription payments; software to automatically calculate stamp duty depending on the market where items are being sold; and more data analytics to help customers analyze their revenues better. “I think there will be consolidation in the next period. But it won’t be just two players. The [fintech] space is big enough for a dozen winners.”

And it looks like Airwallex is setting itself up to be one of those winners. Zhang confirmed to me that Stripe — which today is a key competitor of Airwallex’s — approached the company to acquire it around 2018/2019, when Airwallex was significantly smaller but already developing a strong presence in Asia Pacific, which is still its biggest market, even as Airwallex moves deeper EMEA and North America. (It would have been a big step for Stripe into the region, which is has instead taken on its own steam.)

Zhang said that another big fintech, currently valued at around $20 billion, also approached Airwallex more recently. Nothing has come of that, either — partly because Airwallex is now too expensive, he said.

“I think we are probably to big for others to buy us,” Zhang added.

As for what is coming next on the liquidity front, an IPO “is not on the agenda,” but is something that the company will think about potentially for 2023 or 2024.

“Airwallex’s achievements in the last quarter alone showcase the strength of the company’s business model and its unique ability to meet their customers’ evolving needs in a competitive digital payments market,” said David Craver, co-chief investment office at Lone Pine Capital. “The future is bright for Airwallex, and we look forward to helping its team unlock greater growth opportunities.”

UNest raises $26M Series B to help parents save for their kids’ expenses

UNest, a fintech startup that provides financial planning tools for parents saving on behalf of their children, announced today that it raised $26 million in Series B funding led by The Artemis Fund. Existing investor Northwestern Mutual Future Ventures participated alongside new investors including Franklin Templeton, Launchpad Capital, AltaIR Capital, OneWay Ventures, Unlock Venture Partners, and Square co-founder Jim McKelvey. Franklin Templeton’s head of US marketing, Jennifer Ball, will join UNest’s board.

The round brings UNest’s total funding from investors to $40 million. It plans to use the proceeds to launch new features, including UNest Legacy, which will allow parents to buy individual stocks and cryptocurrencies in the accounts they manage for their children. 

Currently, UNest users, who are parents typically in the 30-35 age range, can only invest in ETFs through the platform. UNest Legacy is expected to launch in the second quarter of next year in response to user demand for more control over their holdings and access to crypto in particular, CEO and founder Ksenia Yudina told Techcrunch. 

UNest plans to partner with Franklin Templeton to introduce ESG portfolios to its users early next year, Yudina said. The company’s expansion into providing individually-managed account offerings and educational content about investing reflects a broader demand from investors to actively manage their holdings based on their personal goals and values. 

The Series B news comes on the heels of a high-growth year for UNest. It registered as a broker-dealer, acquired two companies, and added 300,000 users to its platform in 2021, bringing its total user count to 400,000. UNest plans to serve 1 million users by the end of next year, Yudina said. 

Yudina said UNest is also evaluating long-term expansion opportunities in Europe as well as new B2B opportunities such as partnering with companies to offer UNest accounts as part of their benefits packages, a feature for which she said users have expressed strong demand. 

Yudina, who has both a CFA and an MBA, started building the Los-Angeles based company in 2018 after working as a financial planner for high net-worth clients. She was motivated to build a solution that would help families save to prevent taking on excessive debt, like she herself did to fund her own education. 

UNest launched its core product, an app available on iOS and Android, in February 2020. The company originally offered tax-advantaged 529 college savings plans to parents, but now provides custodial accounts to its customers instead, which allow parents to save for a more flexible range of goals on behalf of their kids, Yudina said.

Yudina said the main hurdle for many parents to effectively save for their children’s expenses is a lack of awareness and financial literacy regarding the solutions available to them. That’s where she sees UNest making an impact through its user-friendly platform.

“It’s very simple. It takes only five minutes and no paperwork. [Another advantage we have is] branding and marketing, and the ability to make it social, involving friends and family,” Yudina said.

South Africa’s NFTfi raises $5M so people can use their NFTs as collateral for loans

Once regarded as a fad (for some, it still is), NFTs, digital assets that depict real-world objects, are becoming increasingly popular within and outside the crypto world.

But with large amounts of capital locked into illiquid NFTs, more people are looking for ways to unlock liquidity without selling their NFTs.

This market is one South African company NFTfi targets and has raised a seed round of $5 million to continue pioneering the financialization of NFTs. Early-stage crypto fund 1kx led the round, with Ashton Kutcher’s Sound Ventures, Maven 11, Scalar Capital, Kleiner Perkins and others participating

Founded by Stephen Young in February 2020, NFTfi acts as a marketplace where users can get a cryptocurrency loan on their NFTs and offer loans to borrowers against their NFTsIn other words, users can use their NFTs as collateral to get loans from other users on the decentralized and peer-to-peer system.

For example, if a user comes to the platform to borrow $10,000, different lenders would propose to the borrower offers with varying interest rates and payments terms, from which the borrower could then select

Meanwhile, the borrower will need to submit an NFT as part of the transaction. When the transaction is made, the NFT gets transferred into NFTfi’s smart contract (no one, including the NFTfi team, will have access to it) while the borrower receives the money

Once the loan gets paid with interest to the lender, the NFT returns to the borrower’s wallet. If the loan is not repaid during the allocated time, the lender receives the NFT.

NFTfi users apply a common practice in the traditional art world where banks, big galleries or auction houses offer loans to artists to determine if an NFT is worth a loan or not

Typically, in the traditional market, loans are roughly 50% of the artwork’s value. On NFTfi’s platform, lenders make evaluations and give borrowers up to 50% of their NFT value as the loan principal.

So, if an NFT is worth $20,000 at the point a borrower needs money, lenders are likely to offer not more than $10,000 as a loan. The interest rates, however, vary depending on the lender and assets. NTFfi takes a 5% cut of the interest earned on every loan by lenders, but it doesn’t make anything on a default. 

Risk exists on both sides, though. Borrowers have a set time to repay their loans before lenders take their NFTs, and since NFTs are volatile due to public demand and perception, lenders can eventually take lesser-priced NFTs.

“That’s why lenders want to have some room between the price of the asset and how much they lend,” Young said on the dynamics in pricing between lenders and borrowers on NTFfi. “This is because in the case where somebody defaults, they need to be able to sell it for less than market value, and the price might have dropped in between. So that’s why they need such a big buffer between the loan value and the value of the actual asset.”

Currently, roughly 20% of loans on the platform get defaulted on, but according to Young, most are lower-value loans. The reason behind this is that high-value NFTs are pretty exclusive and hard to come by, so users fund loans that they hope will default as a way to acquire the NFTs.

“A lot of lenders actually don’t mind a default because often they’ll only lend on assets that they would like to add to their collection anyway. So when they get a default, they’ll keep the assets or list them on the market for 75% of the total value and might actually end up making more profits on defaults than on the actual loan.”

While it appears that NFTfi serves as an advantage to lenders, Young says that’s not the case. However, the platform is working to address that speculation by including features that allow term negotiations and extensions for borrowers.  

The top NFT loans on NFTfi span across popular digital collectibles on the Ethereum blockchain — Art Blocks, Bored Ape Yacht Club, Cryptopunks, Autoglyphs, Meebits and VeeFriends. NFTfi transacted its first loan in May 2020, and since then, more than 1,500 have taken place on the platform.

Young claims the company has been growing at 805 month-on-month in terms of loan volume and the company has totalled more than $15 million in value. The company says lenders have earned over $500,000 in interest.

Before launching NFTfi during the early stages of the COVID-19 pandemic as digital assets became more prominent, Young was the co-founder and chief product officer at Coindirect, a cryptocurrency exchange and OTC desk.

He raised $890,000 as seed money for NTFfi last year, assembling a team in South Africa to build and launch the product. Most of the group still reside in the African country; however, the company is now incorporated in the British Virgin Islands for compliance and regulatory reasons, according to Young.

With the new cash infusion, NFTfi plans to grow its team, launch new product features, roll out the platform on other blockchains, invest in its community and fund its decentralization.

What started from a bunch of friends using their NFTs as collateralized loans between themselves — with blind trust and some spreadsheet document — has taken flight to become a fully decentralized platform, one Young hopes will have a more significant impact in the NFT world.

“Our main focus is that we want to do for NFTs what DeFi did for cryptocurrencies. As soon as you brought DeFi into cryptocurrencies, you also had this explosion of activity and liquidity in the market. And really, we want to act as that catalyst for the NFT market, unlocking some of the value in these NF T’s so they can then be ploughed back into the NFT community and market to help develop the space further.”

EasySend raises $55.5M for a no-code platform to build online interactions with customers

No-code continues to permeate the many layers of enterprise IT, where traditionally non-technical workers have had to rely on technical experts to get things done, and startups building these tools are raising a lot of money as they see a surge of business.

In the latest development, EasySend — a Tel Aviv startup that has built a platform for people to build customer interactions using drag-and-drop interfaces that do not require knowing any coding languages — has raised $55.5 million, a Series B that it will be using to continue building out more templates for its platform, hire more talent, and for business development.

Oak HC/FT is leading the round, with previous backers Vertex IL, Intel Capital, and Hanaco Venture also participating. EasySend said it separately also secured $5 million in venture debt from Silicon Valley Bank. Tal Daskal — the company’s CEO who co-founded the startup with COO Omer Shirazi, and CTO Eran Shirazi — would not disclose EasySend’s valuation but said it was five times bigger than its previous valuation.

For some context on that earlier number, PitchBook estimated that the startup was valued at $31.4 million in its last round, which would make this current valuation about $157 million, if that figure is accurate. In any case, the company has seen a big boost of business specifically out of the U.S., where revenues grew 10-fold.

EasySend has some 100 enterprise customers today, spanning areas like education, government, financial services and insurance. The latter two are particularly strong verticals for EasySend, with Cincinnati Insurance, NJM Insurance Group, PSCU, Sompo, and Petplan among its customers.

The startup has raised $71.5 million to date.

The opportunity in the market that EasySend has been targeting is that typically a lot of businesses produce and use paper-based forms to gather information about customers, and the people who often formulate those materials are not technical.

But as companies started to make a bigger and bigger shift towards virtual environments for customer service, they needed to move away from all of those paper-based processes. Daskal and the team saw an opportunity, he said, to “help them business digital customer journeys from scratch.” The company started out first in traditional banking, but quickly saw the same problem and potential solution in a lot of adjacent markets.

That development, meanwhile, has been also caught up in the currents of Covid-19: as more companies push for so-called “digital transformation” they have sped up the move away from paper-based and offline activity. That has also driven more business to EasySend, as one way for companies to help more of their staff engage with and use digital tools to get their work done.

And, as is often the case, the digital tools replacing the analogue ones are giving their users more functionality: one area where EasySend has built out tech and will be doing more is in the area of analytics, where users can track engagement around the interactions that they have built. That will soon become augmented with AI insights to provide more trending and forecasting data, Daskal told TechCrunch.

The plan is to continue investing not just in addressing more “customer journey” use cases, but to bring in more technology like RPA to make the process even more integrated with the rest of the business. Adding in newer services like ID verification, e-signatures, and other technology from third parties will potentially open the door to handling a more complex and wider array of interactions.

“Today, more than ever, companies need to create exceptional customer experiences to have a competitive edge. EasySend has transformed the way businesses deliver a digital experience to their customers in a quick and efficient way,” said Dan Petrozzo, Partner at Oak HC/FT, in a statemetn. “Our investment is a reflection of our belief that EasySend is in a unique position to lead enterprises into the digital era, and we see significant growth opportunities ahead.”

AARP, T. Rowe Price, QED kick off community to target $8.3T 50-plus market

Technology aimed at older people, whether it be healthcare, fintech or entertainment, is not new, but a new community of startups, investors and global industry leaders are shining a light on what they say is an $8.3 trillion opportunity.

AgeTech Collaborative from AARP is bringing together organizations, like T. Rowe Price, Walgreens, Cooley and QED Investors, to scale startup products and tools and get them in front of AARP’s 38 million members.

The collaborative kicked off with 50 participating startups, including Voiceitt, Rendever, Trust & Will and Mighty Health. Companies have the benefit of six testbeds to trial their products and will be able to bounce ideas off more than 10 investors and venture capitalists, top companies with a stake in the 50-plus community and service providers.

Andy Miller, AARP senior vice president of innovation and product development, told TechCrunch that while the spending power of those over 50 is already $8.3 trillion, that is expected to triple in 30 years.

Miller said the idea stemmed from AARP Innovation Labs, an accelerator he leads, which was attracting some 30 companies, but was not able to provide access to AARP’s membership. Instead, the organization began thinking of ways to give startups a path to scale, which included finding pilot opportunities and partnering with companies willing to test out products.

AARP was also getting calls from venture capital firms eager to get the organization’s take on a startup targeting the 50-plus market, as well as other accelerator programs.

“We felt there was this enormous need to bring together this ecosystem,” Miller said. “Within this demographic, 10,000 people turn 65 every day, and the oldest millennials are 10 years from turning 50. There is a financial incentive, but ours is socially good by allowing people to age better. We can leverage the power of AARP, the ultimate connector where we have a unique vantage point, with VC, corporate and startups. If anyone should win the age stack, it should be AARP. We want everyone to be successful.”

Other organizations are also playing into the age tech space, looking for the next best innovations, including Aging 2.0, while startups continue to bring in funding for various products and services. For example, Bold raised $7 million earlier this year for its senior-focused fitness programs.

Meanwhile, prior to the global pandemic, technology for older folks was a nice to have, but now is “an absolute necessity to live your best life,” he added. From having to scan QR codes to access a restaurant menu to telemedicine appointments with doctors, it required older people to be more comfortable with technology.

In addition to those two areas, Miller sees innovations in categories like voice, which is what Voiceitt is working on with technology to decipher grunts and sounds that translate into turning on lights, and fintech with products like intergenerational financial planning.

Fintech is also one of the areas that Nigel Morris, managing partner of QED Investors, has been keeping his eye on.

There is a need to understand retirement options and figure out whether they will pass money to their children and that people are no longer retiring at 60 and going off to the beach, but would rather take advantage of the gig economy, he said.

QED invests in four age tech companies, including Freewill, software for managed giving, and True Link, which helps caregivers manage finances.

“Companies are thinking of this problem, and this is the time,” Morris added. “This population is not classically cool and is overlooked because many investors don’t understand the population. There is so much opportunity and AARP putting this together is great. Being a founding member is a feather in our cap.”

Aplazo takes in $27M to increase adoption of BNPL in Mexico

Four months after securing a $5.25 million seed round, Mexican buy now, pay later startup Aplazo is back with an even bigger round to expand adoption of the payment plan approach across that country.

Angel Peña and Alex Wieland co-founded the company in 2020. Prior to Aplazo, Peña lived in New York and worked at Morgan Stanley investing in credit in Mexico, while Wieland had been launching businesses across Latin America after spending time at companies like Uber and Lime.

Aplazo plugs into a merchant’s payment process, online or offline, and enables users to purchase items and pay in five equal installments without needing a credit card.

That offline component, in particular, is what Peña says differentiates the company from competitors, as 95% of purchases are still made offline in Mexico. Typically, you need to have a credit card in order to take advantage of installments. However, credit penetration in Mexico is low, less than 10%, due to lack of trust in the banking system, he added. The more popular payment methods are still cash or a debit card.

“That means 90% of people are unaddressed,” Peña told TechCrunch. “There is huge adoption for it, but the roadblocks are the banks who have been super profitable, but have not democratized installment credit.”

The merchant is charged a fee to use the tool, but customers are not, and Alplazo takes on the risk of installment payments and chargebacks. The merchant then benefits from increased conversion rates and higher average order values, while also maintaining a consumer relationship.

Due to about 40% of the population not having a credit history, Aplazo uses alternative data, such as open banking and telecom data, to gauge consumers’ creditworthiness and level of affordability, optimizing approval rates and providing fair credit products to underserved consumers, Peña said.

Today, they announced $27 million in Series A investment led by Oak HC/FT, with participation from existing investors Kaszek and Picus Capital. This gives the company total funds of over $35 million.

Peña says the new funding was unexpected since the company had enough capital from its seed round. However, the opportunity provided the company a chance to accelerate its mission, which includes technology and product development and investing in merchant success. In addition, the company intends to double its 50-person team by February and launch in two additional countries in 2022.

Since the seed round, Aplazo grew its total processing volume more than eight times and in less than a year has partnered with over 1,000 merchants that operate in lifestyle products like fashion, footwear and beauty. Peña estimates these categories represent some $70 billion in spending in both online and offline purchases.

Aplazo is the latest startup going after the BNPL space that has been dominated by companies like Afterpay, which was bought by Square earlier this summer, Klarna and Affirm. There has been a lot of activity in the past year, between M&A with Afterpay and companies like ShopBack, which agreed to acquire Hoolah, and funding rounds for BNPL companies. For example, Billie, Nelo and Scalapay raised recently.

“We have been fascinated by the global phenomenon that is buy now, pay later,” Allen Miller, principal at Oak HC/FT, said. “We wanted to make an investment in Latin America and thought that buy now, pay later would be an interesting entry point. The industry has the same appetite as the U.S., but is on steroids, and with the limited access to credit opportunity for buy now, pay later to be successful, Angel and Alex fit the mold.”

Miller expects the future of buy now, pay later in Latin America to be a bright one for a couple of reasons: one, fewer millennials are getting credit cards and are instead relying on debit cards. Two, merchants want to access a whole swath of people, but can’t due to the large amount of people who don’t have access to credit. Aplazo is building an infrastructure around both of those elements and “has been able to attract talent from best brands, and when we saw that momentum, that was exciting,” he added.

Puls Technologies lands $15M to provide on-demand home repair service

When you live in a home, something always breaks. And it can be difficult to know who to call and if you can afford the repairs. That’s where Puls Technologies come in.

Now armed with $15 million in fresh capital led by Hanaco Venture Capital, the Livermore, California-based company, which offers on-demand home repair services through its mobile app, is also going after the home insurance market by launching an appliance warranty option for appliances like refrigerators, washers, dryers and ovens, starting at about $29 per month.

To do this, Puls taps into prediction algorithms to match the technician with the job so that repairs are made in a timely and hassle-free manner and typically within one or two days, versus weeks. The company works with more than 7,000 vetted technicians in 20 cities across the United States.

The company initially got started in 2015 as a mobile phone repair service, and in 2020 underwent a management shift that pivoted the business model to memberships, Gabi Peles, Puls CEO, said via email.

It decided to go after appliance warranties after not only seeing the thousands of complaints that come from customers each year related to traditional home warranty services, but also how 61% of Americans are unable to afford an unexpected $1,000 expense.

“High fees, fine print, excluding costly issues and the delay of dispatching handymen to a job portray the limitations of pre-existing warranty plans,” Peles said. “Puls allows users to gain more coverage for most home appliances at a reasonable price. We are also committed to enhancing the experience of technicians, providing them with a platform that drives new business by increasing the daily amount of jobs they can access and offering additional income opportunities with upselling and cross-selling.”

Under its previous management structure, Puls raised $96 million, including a $50 million round back in 2018. This latest $15 million is the first under the company’s new management, Peles said.

Puls Technologies

Puls Technologies app. Image Credits: Puls Technologies

The company grew 100% over the last six months, including nearly doubling its employee base to 60 in the past year. It saw some of that demand related to the global pandemic, when the need for home repairs increased due to people spending more time at home.

Peles explained that the average refrigerator door is opened and closed 20 times per day, but with everyone at home, that rose to over 100 times, sparking an increase in the number of door repair requests.

To continue meeting that demand, Puls intends to use the new funding to expand its footprint to over 40 cities and expects to reach over 100 employees by the end of 2022.

Meanwhile, Lior Prosor, general partner and co-founder of Hanaco Venture Capital, said via email that Puls was going after a home repair and maintenance services market in the U.S. that was both large and fragmented across hundreds of thousands of different service providers.

That leaves both technicians and homeowners underserved: the technician lacks the tools to excel at their jobs, while the homeowner receives lackluster service, he added. Puls changes that for technicians by handling the scheduling, pricing, billing and customer service so that they can focus on the customer.

“We saw a great opportunity to double down on the company’s operating model change in 2020,” Prosor said. “We had a strong conviction in Gabi’s vision that Puls’ assets could be used to build the best home care company in the insurtech market.

“The business is at a clear inflection point with new membership and warranty products driving increasing and exciting business metrics that point to a sustainable growth trajectory,” he added. “The platform is both cost-effective and has proven product-market-fit across both project-based jobs and ‘Click & Fix’ subscription services, with an exciting pipeline of new offerings in its warranty and home insurance products.”

The Naked Market flashes some new capital to create better-for-you food brands

Food and beverage startup The Naked Market bagged $27.5 million of Series A investment, led by Integrated Capital, to continue developing its line of healthier food brands.

The company was founded in 2019 by Harrison Fugman, Alex Kost and Tim Marbach, who created a “fast fail” method to develop new foods that includes an end-to-end infrastructure that can go from idea to market in about three months. The company also handles distribution.

On the other side is a proprietary data tool called The Machine that gathers over 15 million data points from places like Shopify, direct customer feedback, Amazon, retail point of sale and search engine trends, to unearth category opportunities for the company to pursue. In addition, a direct customer feedback loop enables The Naked Market to quickly gauge which products are winning with consumers so they can be scaled.

“This portfolio approach is different because we are using a data-driven fast fail strategy,” CEO Fugman told TechCrunch. “We can start to identify foods and bring them to market in a matter of months versus years, and if we see a brand does not have product market fit, we can shut it down quickly.”

Since its inception, The Naked Market has produced five brands, including Flock Chicken Chips, AvoCrazy, Project Breakfast and Beach House Bowls. Its latest brand, Rob’s Backstage Popcorn, is a joint venture with the Jonas Brothers.

Joining Integrated Capital in the round are Great Oaks Venture Capital, Pacific Tiger Group, Sope Creek Capital and Clearco. The Naked Market has raised over $33 million, which includes an earlier $6 million seed round.

Jeffrey Yam, executive director at Integrated Capital, met Fugman and Kost in Hong Kong and had already gotten to know them well when they presented Yam with their business plan.

Yam said he liked the approach of going after the market size and the white space for challenger brands. He also was intrigued by the data-driven technology.

“The data-driven approach to identify winners and losers early on makes them a perfect platform to go after this market,” he added. “Their ability to bring products to market in a short amount of time, with asset-light infrastructure, is a big opportunity.”

The Naked Market

The Naked Market founders Alex Kost and Harrison Fugman. Image Credits: The Naked Market

Meanwhile, the snack food market was valued at $427 billion in 2020, and is expected to grow 3% annually through 2026. Fugman said a multibillion market like that “gets us excited to have this kind of landscape for disruption.” He notes that customer preference toward more healthier snacks over the past decade are giving companies, like his that are investing in R&D, a seat at the table.

“Incumbents aren’t investing in R&D, or if they are, they are spending low, single digits there, and this creates an opportunity,” Fugman added. “We are looking for categories where we can create a brand that goes after a market leader, and we feel that we have cracked the equation to identify the market and create a brand and reasonable scale.”

The Naked Market’s products have been on the market for just over 12 months, and the new funding will “pour fuel on that fire,” he said. The new capital will enable the company to scale its existing brands, create new products and pursue M&A opportunities.

The company has 10 employees and is experiencing triple-digit growth since its founding two years ago. Fugman expects to launch new brands in the first half of 2022.

For now, the company is selling online but has intentions of going into retailers in coming years and has some partners already lined up.