Tag: payments

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Route’s app auto-tracks all your packages, raises $12M

Between Amazon, FedEx, UPS, and indie merchants, it’s easy to lose track of when your online purchases will be delivered. And if you’re buying something pricey or important, a lack of shipping insurance can leave you anxious and constantly checking your porch.

But a fresh startup has found unprecedented growth by letting you monitor all your ecommerce orders in one app thanks to a Gmail extension. Plus, you can buy insurance for just 1% of an item’s cost. Meet Route, emerging from stealth today to become the Find My Friends for packages. By helping merchants handle post-purchase satisfaction while charging consumers for insurance, this year Route has grown to $8.85 million in revenue run rate and from 5 to 100 employees.

Now Route is announcing it’s raised $12 million in total through a quiet $500,00 January pre-seed round from Peak Venture Capital and a new seed round with the rest from Album VC and strategic partner in direct-to-consumer brands Pattern. The cash will help Route keep up with demand and add new features to its app. Route co-founder and CEO Evan Walker tells me consumers “no longer accept the unsatisfying status quo of not knowing exactly where their order is.”

Pizza Tracker But For Everything

Domino’s saw sales skyrocket thanks to its highly visual pizza tracker app that shows live updates as your pie goes in the oven, hits the road, and reaches your door. Route wants to bring that reassuring experience to all of ecommerce.

Route co-founder and CEO Evan Walker

Walker asks “How could I NOT build this company?” The 25-year ecommerce entrepreneur got his start selling video games online in 1994, and has founded seven companies since. The communications gap between customers and merchants always plagued his businesses.

“The big lightbulb moment happened when I was traveling in Italy a few years back” Walker recalls. Talking to a furniture shop owner, he heard about their troubles of shipping vintage trunks. “He mentioned he was having a lot of issues with these items breaking in transit and wished he had a solution for it.” Now there is one.

The Route iOS app for visually tracking orders officially launches today. Purchases from partnered merchants instantly show up in the app and its website via API, but all your other buys from Amazon etc can be automatically ingested by authorizing the Route Bot Gmail extension that scans for shipping updates. Route lays out all the orders on a map with immediate access to their latest status changes like when shipping info is received, an item goes out for last mile delivery, or there’s a problem. There’s no need to copy and paste tracking numbers across multiple websites.

The Route+ insurance program that lets customers pay for peace of mind is launching today too. Customers get the option to add it from partnered merchants, file claims for lost / damaged / stolen packages in one tap, and get reimbursement from respected Lloyd’s Of London.

Walker claims that merchants that offer Route+ (which is free for them) “have seen an increase in conversion, decreased spend on customer support teams, and an improved post-purchase customer experience due to Route’s ability to quickly handle customer claims.” Merchants can also opt to pay themselves for Route+ on every order

Route now works with 1600 merchants and 600 carriers and has overseen shipments to 1.3 million customers in 187 countries. John Mayfield from Peak Venture Capital says “Their phenomenal growth of acquiring over 600 clients in the first three months makes them one of the fastest growing companies we have ever seen.”

The Brown Box Wars

The biggest challenge for Route is overcoming the thick, thick crowd of competitors in the market. Rakuten’s Slice can pull orders from your email and also grabs you refunds if an item goes on sale after you buy it. 17Track lets you paste in big lists of tracking numbers in case they’re registered to someone else’s email. Parcel offers a barcode scanner. ‘Deliveries’ will set up calendar appointments for arrivals, and works on Mac and Apple Watch. ParcelTrack lets you forward it emails of purchases to monitor, and a $2.99 premium version offers live locations of your packages plus customizable push notifications.

Route’s strength is that it’s totally free for consumers unless they want to buy insurance, and does email tracking automatically, though it will lack manual tracking number input for a few more weeks. It’s managed a 90 percent customer satisfaction score. Still, the startup could be vulnerable to a major player in ecommerce like Amazon or Shopify barging into the space. There are also platform risks, such as if Gmail blocked its scanning for tracking numbers, though Google is currently partnered with Route to facilitate email scanning.

“The better that Amazon gets at providing similar services, the more other merchants need those tools in order to compete outside of Amazon” says Walker. “From the insurance side, we are pretty good at detecting risk before it becomes a major issue and we are insuring on an individual order basis so catastrophic incidences are minimized.” The company also has to keep a watchful eye out for fraudulent insurance claims.

The growing megatrend of purchase behavior shifting online means the once occasional activity of receiving a package has become a constant chore in need of streamlining. Plenty of merchants are meanwhile looking to offload the complexity of keeping impatient buyers happy. If Route conquers its first market, it could move into adjacent spaces ranging from merchant services like freight forwarding and financing to consumer features like physical mail scanning for electronic delivery.

“Ecommerce is in my blood. I feel like I’ve taken 25 years of experience and started to craft a really interesting product in this space” Walker concludes. “With commerce going more digital everyday, there is an opportunity to create a big dent.” Or in Route‘s case, an opportunity to insure your packages against big dents.

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PayPal to acquire shopping and rewards platform Honey for $4B

PayPal announced today it has agreed to acquire Honey Science Corporation, the makers of a deal-finding browser add-on and mobile application, for $4 billion, mostly cash. The acquisition, which is PayPal’s largest to date, will give the payments giant a foothold earlier in the customer’s shopping journey. Instead of only competing on the checkout page against credit cards or Apple Pay, for example, PayPal will leap ahead to become a part of the deal discovery process, as well.

Currently, Honey’s 17 million monthly active users take advantage of its suite of money-saving tools to track prices, get alerts, make lists, browse offers and participate in an Ebates-like rewards program called Honey Gold. Its users tend to be younger, millennial shoppers, both male and female.

PayPal aims to add Honey’s technology to its own product line, expanding its reach to PayPal’s 300 million users.

“What’s exciting is that we can take the functionality Honey now offers — which is product discovery, price tracking, offers and loyalty — and build that into the PayPal and Venmo experiences,” explains PayPal SVP of Global Consumer Products and Technology, and former Xoom CEO, John Kunze. “When Honey says they’re putting money in the pockets of their customers — that’s perfectly in line with what we want to do. We want to make digital commerce and financial services more affordable, easier to use, more fun and more accessible to people around the world,” he says.

In addition, PayPal’s network of 24 million merchant partners will gain the ability to offer targeted and more personalized promotions to consumers as a means of acquiring new business and driving increased sales. PayPal Credit may also be integrated into Honey to help finance larger purchases.

Honey has flown under the radar to some extent since its founding in 2012.

Originally only a web browser extension, Honey tracks sales and retailers’ promo codes, as a rival to RetailMeNot and others. What makes the extension so useful is that it automatically tries all the eligible promo codes for you during checkout then selects the one that provided the most savings and applies it on your behalf. This helps shoppers feel more comfortable with their purchases and reduces shopping cart abandonment.

The company also rolled out features to inform shoppers of an item’s price history, including the historical pricing of any product on Amazon’s marketplace. In 2017, Honey launched DropList, which would track and alert users to lower prices, as well as tools for finding travel deals.

As more consumers shifted their shopping to e-commerce merchants, Honey’s user base also rapidly grew.

Its browser extension now works across approximately 30,000 merchant websites, including fashion, technology, travel and even pizza delivery. Last year, Honey publicly shared that its 10 million members had saved over $800 million using its tools. As of today, Honey’s 17 million members have saved more than $2 billion to date.

 

“Honey is amongst the most transformative acquisitions in PayPal’s history. It provides a broad portfolio of services to simplify the consumer shopping experience, while at the same time making it more affordable and rewarding,” said Dan Schulman, president and CEO of PayPal, in a statement.

“The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers. As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales. The combination of Honey and PayPal adds another significant and meaningful dimension to our two-sided platform,” Schulman added.

The acquisition also gives PayPal a way to fight back against the increased competition from Apple, Google, Facebook and other tech companies that have entered the payments market in recent years. On Apple’s Q4 2019 earnings call, for example, CEO Tim Cook noted that Apple Pay has now exceeded PayPal transaction volume with 3 billion transactions in the quarter. Meanwhile, analysts are predicting Facebook Pay has the potential to unseat both Apple Pay and PayPal alike.

Then there are PayPal’s original rivals — the world’s biggest card networks like Visa, Mastercard, American Express and Discover. These companies are also fighting to remain relevant online, with a new PayPal competitor of their own to simplify online checkout.

With Honey, PayPal immediately shifts the battle away from the checkout page itself to instead compete against all the places people go to discover, browse, get inspired and deal-hunt — whether that’s directly on retailers’ sites or through newer platforms, like Pinterest or Instagram Shopping.

As a result of the acquisition, Honey co-founders George Ruan and Ryan Hudson will join PayPal where they’ll work on product integrations and scaling the technology to a much larger user base. Also joining is Honey’s predominantly L.A.-based team of 350 employees.

The Honey team and headquarters will remain in L.A., where they’ve just signed a lease on a new office space with expansion goals in mind.

“Combining PayPal’s assets and reach with our technology, we can build powerful new online shopping experiences for consumers and merchants,” said Hudson. “We’ll have the ability to help millions of retailers efficiently reach consumers with offers that deliver more and more value to Honey members.”

To date, Honey had raised $49 million from investors, including Ludlow Ventures, Zuma Partners, Mucker Capital, SXE Ventures, BAM Ventures, Plug and Play, Wonder Ventures, Cendana Capital, Anthos Capital and others, according to Crunchbase.

Honey was already profitable on a net income basis in 2018, PayPal notes. The acquisition is expected to close in the first quarter of 2020, subject to regulatory approval. It’s expected to be accretive to PayPal’s non-GAAP earnings per share in 2021.

PayPal will hold a conference call at 2 PM PST today to discuss the transaction further.

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Macy’s said hackers stole customer credit cards — again

For the second time in as many years, Macy’s customers have been hit by a data breach involving countless numbers of credit cards.

In a filing with the California attorney general, the retail giant said hackers siphoned off customers’ names, addresses, and phone numbers, but also credit card numbers, card verification codes, and expiration dates by inserting malicious code on its website and quietly sending the stolen data back to the hackers.

Macy’s said the breach lasted a week, between October 7 and October 15. The retail giant did not say how many customers were affected, but the breach is likely to affect thousands of customers.

It’s the latest example of hackers breaking into websites and installing credit card skimming malware. It’s not known who was behind the credit card theft, but a hacking group known as Magecart has been behind some of the largest credit card skimming efforts in recent years — including the American Cancer Society, British Airways, Ticketmaster, AeroGarden and Newegg.

Last year, Macy’s admitted a months-long breach that saw hackers steal credit card data and passwords about 0.5% of its customer base — on both its website and Bloomingdale’s site, which Macy’s owns. The breach resulted in a class action suit, which accused Macy’s of “lackadaisical, cavalier, reckless, and negligent” security practices.

Macy’s is one of the most popular websites in the U.S., according to Alexa rankings.

Meet the Magecart hackers, a persistent credit card skimmer group of groups you’ve never heard of

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Uber is entering the ads business

Uber will become an ad platform, selling space inside its Eats app to restaurants hoping to lure in more food delivery orders. A recent Uber job listing spotted by TechCrunch seeks an Uber Eats Ads Lead “to lead the team and efforts responsible for creating a new ads business that enables eaters to discover new foods and restaurants to grow their customer base.”

An Uber spokesperson confirmed the company would be entering the ads business, telling TechCrunch “We are exploring relevant ads in Eats.” Selling ads could help it improve margins on Eats, where it only takes 10.7% of gross bookings as adjusted net revenue since it pays out so much to restaurants and drivers.

The fresh opportunity in ads comes at a critical time when Uber is desperate to show its future potential in the face of a sagging share price that closed at $28.02 yesterday, down 40% from a high of $46.38 in June. Today, Uber’s post-IPO stock lock-up expires and early investors are able to sell their shares, putting newfound pressure on its stock.

TechCrunch was the first to discover a prototype of Eats ads in Decembe called Specials, where restaurants could get featured placement in the app in exchange for offering a discount. This demonstrated Uber’s ability to steer hungry users to order from particular restaurants.

I followed up with Uber’s senior director and head of Eats product Stephen Chau, who hinted at the company’s aspiration in the ads business. “There’s a bunch of different ways we can work with restaurants over time. If we have all the restaurants on the marketplace and we give them tools to help them grow, then this will be a very efficient marketplace. They’re going to be spending those ad dollars somewhere,” Chau told me. We’ve been checking on the company’s progress in ads ever since.

As we predicted, now instead of just a quid pro quo where Uber exchanges added visibility to restaurants willing to offer discounts that could keep users loyal to Uber Eats, it plans to formally sell ads.

How Uber will become an ad company, starting with Eats Pool

“As this is a brand new space for Uber” the Toronto-based Eats Ads Lead “will be responsible for defining the vision for this new product area and determining where to start building.”

The job listing also notes whoever takes the role will “Help formulate our business, product and go-to-market strategy for ads” and “Creatively experiment and quickly iterate on early tests”. Signaling global ambitions for Eats ads, the Lead will “Customize and scale this offering across the world.”

The effort is separate from Uber’s own marketing efforts that see it spend over $1 billion per year to recruit riders, drivers, and Eats customers. Uber will start selling the ads, not just buying them.

The potential for Eats ads stems from Uber’s place as a destination for choosing what to eat, not just ordering it. Wherever there is discovery, there are opportunities for paid discovery. And as Uber focuses on cross-promoting Eats inside its main ride hailing app, it could suck in more users that are open to suggestions that restaurants pay to provide.

We don’t have details on exactly how Uber’s ads will look. However, you could imagine them appearing on the home page, the browse section, or even in search results for certain cuisines or restaurants. Restaurants hoping to boost orders could pay to appear to users who are hungry but don’t know what they want to eat, or to appear before competitors in the same food style.

Amazon successfully navigated a similar expansion from marketplace to ad platform. eMarketer expects Amazon’s US ads business will grow 33% this year to reach $9.85 billion, and claim 7.6% of the total US ad market which makes it the biggest search ad player behind Google.

Uber could use any revenue it can get. This quarter the company lost $1 billion, with $316 million of that loss coming from Eats. But Eats’ revenue grew 64% year-over-year, showing it’s increasingly popular, and could command enough user attention to make advertising lucrative.

Ads could also serve as a wedge for Uber to move deeper into business intelligence services for restaurants. It could apply its data on food delivery demand to help kitchens to optimize prices, allocate staff, and improve menus.

To save its share price, Uber’s best bet is to find new streams of cash it doesn’t have to share with drivers or restaurants. It may still be years until self-driving vehicles arrive to rescue Uber from its tremendous costs.

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Where top VCs are investing in fintech

Over the past several years, ‘fintech’ has quietly become the unsung darling of venture.

A rapidly swelling pool of new startups is taking aim at the large incumbent institutions, complex processes and outdated unfriendly interfaces that mar billion dollar financial services verticals, such as insurtech, consumer lending, personal finance, or otherwise.  

In just the past summer, the startup community saw a multitude of hundred-million dollar fintech fundraises. In 2018, fintech companies were the source of close to 1,300 venture deals worth over $15 billion in North America and Europe alone according to data from Pitchbook. Over the same period, KPMG estimates that over $52 billion in investment pour into fintech initiatives globally. 

With the non-stop stream of venture capital flowing into the never-ending list of spaces that fall under the ‘fintech’ umbrella, we asked 12 leading fintech VCs who work at firms that span early to growth stages to share where they see the most opportunity and how they see the market evolving over the long-term.

The participants touched on a number of key trends in the space, including rapid innovation in fintech infrastructure, fintech companies embedding themselves in specific verticals and platforms, rebundling and unbundling of financial services offerings, the rise of challenger banks and the state of fintech valuations into 2020.

Charles Birnbaum, Partner, Bessemer Venture Partners

The great ‘rebundling’ of fintech innovation is in full swing. The emerging consumer leaders in fintech — Chime, SoFi, Robinhood, Credit Karma, and Bessemer portfolio company Betterment — are moving quickly to increase their share of wallet with their valuable customers and become a one-stop-shop for people’s financial lives.

In 2020, we anticipate continued entrepreneurial activity and investor enthusiasm around the infrastructure and middleware layers within the fintech ecosystem that are enabling further rebundling and a rapid convergence of product themes and business models across the consumer fintech landscape.

Many players now look like potential challenger bank models more akin to what we have seen unfold in Europe the past few years. Within consumer fintech, we at Bessemer are more focused on demographically-specific product offerings that tap into underserved themes, whether that be the financial problems facing the aging population in the US or new models to serve the underbanked or underserved population of consumers and small businesses.

Ian Sigalow, Co-founder & Partner, Greycroft

What trends are you most excited in fintech from an investing perspective? 

I suspect that many enterprise software companies become fintech companies over time — collecting payments on behalf of customers and growing revenues as your customers grow. We have seen this trend in many industries over the past few years. Business owners generally prefer a model that moves IT expenditures from Operating Expenses into Cost of Goods Sold, because they can increase prices and pass their entire budget onto the customer.

On the consumer side, we have already made investments in branchless banking, insurance (auto, home, health, workers comp), cross-border payments, alternative investments, loyalty cards/services, and roboadvisor services. The companies we funded are already a few years old, and I think we will have some interesting follow-on activity there over the next few years. We have been picking spots where we think we have an unfair competitive advantage.

Our fintech portfolio is also more global than other sectors we invest in. This is because there are opportunities to achieve billion dollar outcomes in fintech, even in countries that are much smaller than the United States. That is not true in many other sectors.

We have also seen trends emerge in the US and move abroad. As an example we seeded Flutterwave, which is similar to Stripe, and they have expanded across Africa. We were also the lead investor in Yeahka, which is similar to Square in China. These products are heavily localized —tin for instance Yeahka is the largest processor of QR code payments in the world, but QR code payments are not popular in the US yet.

How much time are you spending on fintech right now? Is the market under-heated, over-heated, or just right?

Fintech is about a quarter of my time right now. We continue to see interesting new ideas and the valuations have been more or less consistent over time. The broader market doesn’t impact us very much because we tend to have a 10 year holding period.

Are there startups that you wish you would see in the industry but don’t?

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Arweave’s Permaweb blockchain can host sites & apps forever

What if you could pay now to store something online permanently? You could preserve a website against censorship, save legal contracts, or offer an app even after your company fails. That’s the promise of Arweave‘s Permaweb.

The startup has built a new type of blockchain that relies on Moore’s Law-style declining data storage costs. Users pay a few hundred dollars upfront (about half a cent per megabyte), and the interest accrued by the excess payment will perpetually cover the costs of shrinking storage prices.

The Permaweb quietly launched last June. Over 100 permanent apps have been built on Arweave’s infrastructure including an email client in the last six months, while 50,000 objects were stored on the Permaweb in October alone. As long as some node operators keep hosting the data on unused hard drive space, they keep getting paid, and the sites, apps, or files remain available. Instead of needing some special blockchain browser to access what’s stored, the Permaweb can be accessed through traditional web browsers and URLs.

Arweave founder Sam Williams

The potential of the Permaweb has attracted $5 million in funding led by Andreessen Horowitz’s a16z Crypto, and joined by other top blockchain investors Union Square Ventures and Multicoin Capital who’ve exchanged the cash for tokens from Arweave. Those tokens, and the rest Arweave is sitting on, could become increasingly valuable if the Permaweb becomes popular.

“Arweave’s mission is to become the new Library of Alexandria” Arweave founder Sam Williams writes, “but invulnerable to the pitfalls of centralised points of failure, ensuring that humanity’s shared knowledge and history is available to all future generations.”

Filling Orwell’s Memory Hole

The idea spawned from a slew of PhDs dropouts trying to address the fake news problem. They figured if sites or articles could be stored permanently in their original form, they couldn’t be changed or eradicated by a future despot.

The team discovered blockchains could handle this at small scale. But to decentralize large amounts of data, they developed a special kind of blockchain where miners are rewarded for storing a random old block from the chain, not just the most recent one. That meant the more of the total blocks they stored, the more they’d stand to earn.

After going through TechStars Berlin and recruiting some of their accelerator-mates, Arweave launched the Permaweb mid last year. Those who want to store something download a free Chrome, Firefox, or Brave browser extension, fund their wallet, and make a one-time payment. For example, here’s a permanently hosted forum that won’t disappear like many online communities have over the years.

While pricier than alternatives like AWS in the short-term, the Permaweb could theoretically keep files alive forever. Williams says that data storage costs have declined around 30% per year for a while, but the decentralized network would still be able to cover costs as long as that rate doesn’t fall lower than 0.5%. “If we dropped below 0.5% storage cost decline, then really, really bad things will have happened to humans.” And even then, today’s payments would cover 200 years of storage.

Another benefit is that users of applications can choose to use the original version of a Perma app instead of an updated one. That way if a developer polluted later versions with ads or privacy invasions, users could rely on the old one.

An important concern is that the Permaweb could be used to enable piracy. But Williams tells me the majority of node operators have to vote to approve hosting a file, so they could refuse copyrighted music or revenge porn. And anyways, torrenting is a free and so likely more appealing to pirates. We’ll see if other players try to crash into the market with a similar concept and trigger a perma pricing war.

Arweave likens itself to an Uber for storage, matching users needing to save files with those with excess storage capacity. But it acts as if there’s no middleman like Uber taking a cut. Instead the startup will sell tokens as necessary to stay funded until the network is sufficiently decentralized and runs itself.

“A lot of crypto projects are long on white papers but short on code. Arweave was the opposite” says Union Square Ventures partner Albert Wenger. His fund tried out the Permaweb by storing the National Oceanic and Atmospheric Administration’s ongoing measurements of carbon dioxide — something climate change deniers might want to suppress.

The goal was always to stop misinformation. Williams concludes “We think that we’re closing what Orwell called the memory hole so people can’t change what was said, so everyone can see it that way in the future without the possibility of redaction or censorship.”

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Arweave’s Permaweb blockchain can host sites & apps forever

What if you could pay now to store something online permanently? You could preserve a website against censorship, save legal contracts, or offer an app even after your company fails. That’s the promise of Arweave‘s Permaweb.

The startup has built a new type of blockchain that relies on Moore’s Law-style declining data storage costs. Users pay a few hundred dollars upfront (about half a cent per megabyte), and the interest accrued by the excess payment will perpetually cover the costs of shrinking storage prices.

The Permaweb quietly launched last June. Over 100 permanent apps have been built on Arweave’s infrastructure including an email client in the last six months, while 50,000 objects were stored on the Permaweb in October alone. As long as some node operators keep hosting the data on unused hard drive space, they keep getting paid, and the sites, apps, or files remain available. Instead of needing some special blockchain browser to access what’s stored, the Permaweb can be accessed through traditional web browsers and URLs.

Arweave founder Sam Williams

The potential of the Permaweb has attracted $5 million in funding led by Andreessen Horowitz’s a16z Crypto, and joined by other top blockchain investors Union Square Ventures and Multicoin Capital who’ve exchanged the cash for tokens from Arweave. Those tokens, and the rest Arweave is sitting on, could become increasingly valuable if the Permaweb becomes popular.

“Arweave’s mission is to become the new Library of Alexandria” Arweave founder Sam Williams writes, “but invulnerable to the pitfalls of centralised points of failure, ensuring that humanity’s shared knowledge and history is available to all future generations.”

Filling Orwell’s Memory Hole

The idea spawned from a slew of PhDs dropouts trying to address the fake news problem. They figured if sites or articles could be stored permanently in their original form, they couldn’t be changed or eradicated by a future despot.

The team discovered blockchains could handle this at small scale. But to decentralize large amounts of data, they developed a special kind of blockchain where miners are rewarded for storing a random old block from the chain, not just the most recent one. That meant the more of the total blocks they stored, the more they’d stand to earn.

After going through TechStars Berlin and recruiting some of their accelerator-mates, Arweave launched the Permaweb mid last year. Those who want to store something download a free Chrome, Firefox, or Brave browser extension, fund their wallet, and make a one-time payment. For example, here’s a permanently hosted forum that won’t disappear like many online communities have over the years.

While pricier than alternatives like AWS in the short-term, the Permaweb could theoretically keep files alive forever. Williams says that data storage costs have declined around 30% per year for a while, but the decentralized network would still be able to cover costs as long as that rate doesn’t fall lower than 0.5%. “If we dropped below 0.5% storage cost decline, then really, really bad things will have happened to humans.” And even then, today’s payments would cover 200 years of storage.

Another benefit is that users of applications can choose to use the original version of a Perma app instead of an updated one. That way if a developer polluted later versions with ads or privacy invasions, users could rely on the old one.

An important concern is that the Permaweb could be used to enable piracy. But Williams tells me the majority of node operators have to vote to approve hosting a file, so they could refuse copyrighted music or revenge porn. And anyways, torrenting is a free and so likely more appealing to pirates. We’ll see if other players try to crash into the market with a similar concept and trigger a perma pricing war.

Arweave likens itself to an Uber for storage, matching users needing to save files with those with excess storage capacity. But it acts as if there’s no middleman like Uber taking a cut. Instead the startup will sell tokens as necessary to stay funded until the network is sufficiently decentralized and runs itself.

“A lot of crypto projects are long on white papers but short on code. Arweave was the opposite” says Union Square Ventures partner Albert Wenger. His fund tried out the Permaweb by storing the National Oceanic and Atmospheric Administration’s ongoing measurements of carbon dioxide — something climate change deniers might want to suppress.

The goal was always to stop misinformation. Williams concludes “We think that we’re closing what Orwell called the memory hole so people can’t change what was said, so everyone can see it that way in the future without the possibility of redaction or censorship.”

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Amazon now sells movie tickets in India

Amazon has set its eye on the next business it wants to disrupt in India: online movie tickets. The e-commerce giant said Saturday it has partnered with online movie ticketing giant BookMyShow to offer booking option on its shopping site and app.

The move comes months after the e-commerce giant began offering flight ticketing option in the country as it races to turn its payments service Amazon Pay into a “super app” — a strategy increasingly employed by players in emerging markets such as India.

Starting today, Amazon users in India can book their movie tickets from the “movie tickets” category under “shop by category” or the Amazon Pay tab, the e-commerce firm said. BookMyShow, which leads the online movie ticketing market, is the exclusive partner for this new offering, the two said.

Neither of the parties disclosed the financial arrangements of the deal, but BookMyShow is likely paying Amazon a fee for tapping “millions” of customers the e-commerce giant has amassed in the country.

Amazon said its credit card users in India will get a 2% cashback on each movie ticket purchase. On its app, the company adds until November 14. it will also offer cashback of up to Rs 200 on each ticket purchase.

For its flight ticketing service, Amazon India partnered with Cleartrip . Balu Ramachandran, SVP at Cleartrip, told TechCrunch in an interview earlier that the company was paying a promotional fee to Amazon, but declined to offer specifics.

An Amazon India spokesperson declined to comment on the financial arrangements.

BookMyShow, which employs 1,400 employees, sells about 15 million tickets each month. The service, which has a presence in over 650 towns and cities, today counts heavily-backed Paytm as one of its biggest rivals. Paytm, which entered the movie ticketing business three years ago, has been able to eat some of BookMyShow’s market share by offering cashback on each ticket purchase.

The media and entertainment business in India is worth $23.9 billion, a report from EY-FICCI said in March this year, which noted that consumer spendings on the web is increasingly growing. More than 50% of all tickets sold by the top four multiplex chains in the country have occurred on the web.

Ashish Hemrajani, founder and CEO of BookMyShow, said through the partnership the company will be able to access Amazon India’s “deep penetration across tier 2 and tier 3 cities.”

Mahendra Nerurkar, Director of Amazon Pay, said today’s partnership shows Amazon’s commitment to “simplify the lives of our customers in every possible way — as they shop, pay bills, or seek other services.”

Last month, Amazon introduced a new feature that allows Amazon Pay users to pay their mobile, internet, and utility bills. This is the first time Amazon is offering these functionalities in any market (it plans to bring this to the U.S. in coming months).

Amazon has been quietly expanding its payments offering, built on top of UPI payments infrastructure, in the country. Unlike its global rivals Google and Walmart that offer standalone apps for their payment services and also focus on transactions among customers, Amazon has kept Pay integrated with its e-commerce offering and focused on consumer-to-business transactions.

The company maintains tie-ups with several popular Indian online services and frequently offers cashback to incentivize users to pick Amazon Pay over other solutions. Earlier this week, Amazon pumped about $634 million into its India business.

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Japanese instant-credit provider Paidy raises $143 million from investors including PayPal Ventures

Paidy, a Japanese financial tech startup that provides instant credit to consumers in Japan, announced today that it has raised a total of $143 million in new financing. This includes a $83 million Series C extension from investors including PayPal Ventures and debt financing of $60 million. The funding will be used to advance Paidy’s goals of signing large-scale merchants, offering new financial services and growing its user base to 11 million accounts by the end of 2020.

In addition to PayPal Ventures, investors in the Series C extension also include Soros Capital Management, JS Capital Management and Tybourne Capital Management, along with another undisclosed investor. The debt financing is from Goldman Sachs Japan, Mizuho Bank, Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank. Earlier this month, Paidy and Goldman Sachs Japan established a warehouse facility valued at $52 million. Paidy also established credit facility worth $8 million with the three banks.

This is the largest investment to date in the Japanese financial tech industry, according to data cited by Paidy and brings the total investment the company has raised so far to $163 million. A representative for the startup says it decided to extend its Series C instead of moving onto a D round to preserve the equity ratio for existing investors and issue the same preferred shares as its previous funding rounds.

Launched in 2014, Paidy was created because many Japanese consumers don’t use credit cards for e-commerce purchases, even though the credit card penetration rate there is relatively high. Instead, many prefer to pay cash on delivery or at convenience stores and other pickup locations. While this makes online shopping easier for consumers, it presents several challenges for sellers, because they need to cover the cost of merchandise that hasn’t been paid for yet or deal with uncompleted deliveries.

Paidy’s solution is to make it possible for people to pay for merchandise online without needing to create an account first or use their credit cards. If a seller offers Paidy as a payment method, customers can check out by entering their mobile phone numbers and email addresses, which are then authenticated with code sent through SMS or voice. Paidy covers the cost of the items and bills customers monthly. Paidy uses proprietary machine learning models to score the creditworthiness of users, and says its service can help reduce incomplete transactions (or items that buyers ultimately don’t pick up and pay for), increase conversion rates, average order values and repeat purchases.

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Latin America Roundup: Uber acquires Cornershop, Softbank invests in Buser and Olist

Sophia Wood Contributor
Sophia Wood is a principal at Magma Partners, a Latin America-focused seed-stage VC firm with offices in Latin America, Asia and the U.S. Sophia is also the co-founder of LatAm List, an English-language Latin American tech news source.

Brazil continued to churn out unicorns this month, with Curitiba-based Ebanx becoming the first startup from the southern part of the country to top a $1 billion valuation. U.S.-based FTV Capital provided the investment but did not disclose the amount invested nor the exact valuation of Ebanx after the investment.

Ebanx is an end-to-end payment processor that helps international companies receive payments in the Latin American market, similar to Stripe. Their clients include Airbnb, AliExpress, Pipedrive, Spotify, Uber and Wish, and more than 50 million Latin Americans have conducted transactions with more than 1,000 companies through the Ebanx platform. This investment comes on the heels of exciting partnerships with Uber Pay, Shopify, Spotify and Visa to expand cross-border payment processing across the region.

Ebanx has operations in Brazil, Mexico, Argentina, Colombia, Chile, Peru, Ecuador and Bolivia, and will expand their local payment solution, Ebanx Pay, into Colombia in 2020. The company has grown its user base by offering a full-service product that includes market research, 24/7 customer service and anti-fraud technology.

The Ebanx investment is part of a growing interest in Latin American payments startups. Brazil’s PagSeguro and StoneCo had successful IPOs last year, while Mexico’s Conekta and Ecuador’s Kushki have raised large rounds to try to unite the region under a single processor as Latin America rapidly adopts e-commerce.

Uber acquires Cornershop, takes off where Walmart left off

The acquisition of the Chilean-Mexican grocery delivery startup Cornershop has been an emotional roller coaster for Latin American entrepreneurs and investors throughout 2019. First Walmart announced a $225 million deal that would be one of the bigger exits of the region, then the acquisition was blocked by Mexican antitrust institution COFECE. This announcement dealt a blow to the ecosystem as entrepreneurs and VCs had eagerly awaited this boost in liquidity in the local market.

Last-mile delivery and logistics became a very competitive space in Latin America in 2018.

Then in mid-October 2019, Uber announced it would take a 51% stake in Cornershop for a reported $450 million, quadrupling the startup’s value in the four months since the COFECE decision. This deal will consist of cash, investment in Cornershop’s growth and stock in Uber, which IPO’d earlier this year.

However, this deal must also be approved by the Chilean and Mexican antitrust boards, which are expected to release their decisions within the next two weeks. In the meantime, Cornershop will continue its expansion into the Colombian market after it added Peru and Canada in 2019.

Last-mile delivery and logistics became a very competitive space in Latin America in 2018, and many of the players are sitting on enormous pools of capital. Colombia’s Rappi raised $1 billion from SoftBank in early 2019, breaking records for startup investment for the region. Brazil’s iFood raised $500 million from Naspers at the end of 2018. However, delivery continues to be a cash-intensive business, with many of these companies burning through capital quickly to gain market share. Cornershop was an exception and had raised less than $50 million before the acquisition.

Brazil’s Buser, Olist, raise funding from SoftBank

Despite the WeWork crash, SoftBank has continued investing consistently in Brazilian startups. In early October 2019, the Japanese investor led an undisclosed Series B round for Brazilian collaborative bus chartering startup Buser. Buser’s team will invest more than $73 million in growth over the next 12 months to create new alliances for their network of operating partners.

Buser helps coordinate groups of people to charter buses at convenient times and lower prices, disrupting the bureaucratic, anti-competitive and inefficient bus system. The company has grown 1,500% over the past nine months and serves more than 3,000 people per day. While Buser has been popular with locals, traditional bus drivers are calling for regulation to slow the company’s meteoric growth. Buser plans to add more than 100 direct jobs in 200 cities over the next 12 months, and SoftBank’s most recent investment will help power this growth.

Brazil’s e-commerce marketplace integrator Olist also received investment from SoftBank for its Series C, coming in around $46 million. Redpoint eVentures and Valor Capital also participated in the round. 

This investment signals the increased interest by traditional retailers in startups that are slowly chipping away at their market share across the region.

Olist connects small businesses to larger product marketplaces to help entrepreneurs sell their products to a larger customer base. They will reportedly use this investment to investigate the development of financial products and look for collaboration with SoftBank’s other companies, like Rappi and Loggi. Based in Curitiba, Olist was founded in 2015 to help small merchants gain market share across the country through a SaaS licensing model to small brick and mortar businesses.

Today, Olist has more than 7,000 customers and uses a drop-shipping model to send products directly from stores to clients around the country, allowing them to grow with a capital-light model. They will use the investment to add up to 100 new employees.

Carrefour Brazil acquires 49% of Ewally

Grocery chain Carrefour acquired a large stake in Brazil-based Ewally after it completed Village Capital’s first regional acceleration program.

Ewally improves financial inclusion in Brazil through a mobile wallet app that allows unbanked clients to pay bills and make purchases online through the blockchain. Carrefour will reportedly use the acquisition to accelerate digital transformation and improve online payment mechanisms throughout Brazil.

Carrefour did not disclose the amount invested and the deal is still subject to approval by Brazilian financial regulation authorities. However, this investment signals the increased interest by traditional retailers in startups that are slowly chipping away at their market share across the region.

News and Notes: Early-stage rounds are getting bigger

Startups in Brazil, Colombia and Argentina raised several rounds this month, ranging from $1.5 million to $13 million. Brazil’s Xerpa, Colombia’s Sempli, Brazil’s Gorilla and Argentina’s Bitso and Worcket were among those that raised capital from local and international investors in October 2019.

Brazilian human resource management platform Xerpa raised $13 million from Vostok Emerging Finance to continue to help companies like MercadoLibre, iFood and QuintoAndar provide benefits for their employees. Previous investors include Nubank’s David Velez, Kaszek Ventures and QED Investors.

Sempli, an online lending platform for small businesses in Colombia, raised an $8 million Series A from new investors Oikocredit and Incofin CVSO, as well as previous investors BID LAB, XTPI Fund, Generación Exponencial, and Impulsum Ventures. To date, Sempli has raised more than $24 million in equity funding. The founders will use this round to grow their portfolio and improve their risk assessment technology to provide more small business loans in Colombia.

Brazil’s Quicko, an alternative mobility startup that uses big data, raised $10 million in October from Brazilian transport company CCR. Quicko’s technology integrates all mobility options — from bicycles to Uber and 99 — to help people get where they need to go as quickly and inexpensively as possible.

Also in Brazil, startup Gorilla Invest raised $8.4 million from Ribbit Capital, Monashees and Iporanga. Gorilla aggregates financial assets so that investors can review all their commitments in one place, and currently manages more than $1.2 billion for 40,000 clients.

Mexican cryptocurrency exchange Bitso raised an undisclosed round from Argentine startup Ripple to expand into the Southern Cone, especially Argentina and Brazil. Other investors in the round included Pantera Capital, Digital Currency Group, Jump Capital and Coinbase.

Looking ahead to November, with unsettled politics in several countries across the region, tech startups are growing despite governmental changes. Some of these changes will likely have a positive effect on the regional ecosystem as people push for more sustainable and equal economic growth.

What to watch next? Last year, Q4 was marked by a wave of large investments as funds and startups look to end the year strong. IFood raised its record-breaking $500 million round in December 2018. We may well see a similar uptick this year as mega-funds like SoftBank have been consistently investing multi-million dollar rounds since June. There is no sign international investment in Latin America will slow through the end of the year, so we can likely look forward to several more growth-stage rounds before the year is out.