Ideaforge

Indifi, a Gurgaon-based startup that offers loans to small and medium-sized businesses and also operates an online lending marketplace, has raised 1,450 million Indian rupees ($20.4 million) in a new financing round to expand its business in the country.

The Series C round for the four-year-old startup was led by CDC Group, a UK-government-owned VC fund. Existing investors Accel, Elevar Equity, Omidyar Networks, and Flourish Ventures also participated in the round, the startup announced on Tuesday (Indian Standard Time).

Indifi, which has raised about $34 million in venture capital to date, has also relied on debt to grow and finance loans on its platform. Currently, it’s in about $21 million in debt, Alok Mittal, cofounder and managing director of Indifi, told TechCrunch in an interview.

Indifi, which itself finances some loans, additionally also serves as a marketplace for banks and non-banking financial companies to participate in funding loans to small and medium-sized enterprises, said Mittal. Both the businesses are equally growing and contributing to its bottom line, he said.

A typical loan processed by Indifi is of about $7,000 in size. Overall, the startup offers between $1,400 to  $70,000 in capital to businesses.

Unlike banks and many other online lenders, Indifi works with an ecosystem of companies to assess risk factors before granting loan to a business, Mittal said. For instance, Indifi works with food-delivery startups Zomato and Swiggy and checks a restaurant’s past history, feedback from their customers before issuing to a restaurant.

Similarly, if an enterprise from the travel industry were to look for a loan, Indifi checks the volatility of the market. Some of its other business partners include Oyo Rooms, MakeMyTrip, Flipkart, FirstData, Travel Booking, and Riya Travel.

“We chose to invest in Indifi because of its advanced data-driven approach that enables it to reach [thousands] of underserved customers across India. By reducing the high cost of risk assessment and customer acquisition, Indifi helps formal and informal businesses to access growth finance that otherwise may not receive it,” Srini Nagarajan, managing director and head of CDC Group’s Asia business, said in a statement.

Despite its longer background check process, Mittal said Indifi has been able to finance nearly 50% of all the applications it gets, compared to about 10% deals that materialize with banks and other lenders.

Indifi, which spent first year-and-a-half of its existence building relationships with major companies and refining its products, has amassed more than 15,000 customers to date, Mittal said. Its client base has grown by 2.5 times in the past year, he said.

The startup will use the fresh capital to find new clients and lending partners to expand its marketplace business, Mittal said. It will also explore lending to businesses in more sectors including logistics (so fleet-owners could also get loan).

Indifi competes with a handful of businesses including Bangalore-based Zest Money, Five Star Finance, Capital Float, and in some capacity, with Drip Capital, which recently raised $25 million.

Source: Tech Crunch

Our French startup Digicoop is a remote-first worker cooperative. We started the company in 2015, based on our shared values and passion for technology. The goal was simple: make good products that will have a positive impact on companies. The road to funding, not so simple.

Due to our unique business model, which focuses on building a sustainable company, we had to forego venture capital and convince lots of players to take a chance. The effort paid off. Here’s a look at why we chose to be a co-op, how we got the funding, and how it drives our product development.

Table of Contents

• Raison d’être
• SCOP: We’re all in this together
• Co-ops on the rise
• A new approach to management
• Sustainable growth
• Co-op funding, a tricky business
• Exit strategy? Not here
• Hitting roadblocks
• Round 1: Community help
• Round 2: Crowdfunding
• Vision of the future
• Last but not least: our products

Raison d’être

Unlike many startups, Digicoop wasn’t founded because of a particular product. Our story is a bit different. In 2015, a few friends and former colleagues came together to work on projects they were passionate about. Initially we didn’t know what those would be, but we quickly figured out the theme: collaborative work tools for teams. 

Making that our focus was no coincidence. We recognized that the workplace was changing: distributed teams were becoming more common, and with that more transparency and an increased cross-team collaboration necessary. We became frustrated with traditional work tools and processes, as they were no longer enough.

We saw an opportunity to develop products suitable for the digital future, but that wasn’t our only driver. Being passionate about technology and the impact it can have on the society, we set out to build tools that could make a positive difference. The idea was to empower employees, not only managers.

Our shared values and vision of the workplace were the reason we decided to go against the grain and structure Digicoop as a worker cooperative (called SCOP in France), giving each employee a real stake in the company.

SCOP: We’re all in this together

Source: Tech Crunch

Privacy commissioners from the Americas, Europe, Africa and Australasia have put their names to a joint statement raising concerns about a lack of clarity from Facebook over how data protection safeguards will be baked into its planned cryptocurrency project, Libra.

Facebook officially unveiled its big bet to build a global digital currency using blockchain technology in June, steered by a Libra Association with Facebook as a founding member. Other founding members include payment and tech giants such as Mastercard, PayPal, Uber, Lyft, eBay, VC firms including Andreessen Horowitz, Thrive Capital and Union Square Ventures, and not-for-profits such as Kiva and Mercy Corps.

At the same time Facebook announced a new subsidiary of its own business, Calibra, which it said will create financial services for the Libra network, including offering a standalone wallet app that it expects to bake into its messaging apps, Messenger and WhatsApp, next year — raising concerns it could quickly gain a monopolistic hold over what’s being couched as an ‘open’ digital currency network, given the dominance of the associated social platforms where it intends to seed its own wallet.

In its official blog post hyping Calibra Facebook avoided any talk of how much market power it might wield via its ability to promote the wallet to its existing 2.2BN+ global users, but it did touch on privacy — writing “we’ll also take steps to protect your privacy” by claiming it would not share “account information or financial data with Facebook or any third party without customer consent”.

Except for when it admitted it would; the same paragraph states there will be “limited cases” when it may share user data. These cases will “reflect our need to keep people safe, comply with the law and provide basic functionality to the people who use Calibra”, the blog adds. (A Calibra Customer Commitment provides little more detail than a few sample instances, such as “preventing fraud and criminal activity”.)

All of that might sound reassuring enough on the surface but Facebook has used the fuzzy notion of needing to keep its users ‘safe’ as an umbrella justification for tracking non-Facebook users across the entire mainstream Internet, for example.

So the devil really is in the granular detail of anything the company claims it will and won’t do.

Hence the lack of comprehensive details about Libra’s approach to privacy and data protection is causing professional watchdogs around the world to worry.

“As representatives of the global community of data protection and privacy enforcement authorities, collectively responsible for promoting the privacy of many millions of people around the world, we are joining together to express our shared concerns about the privacy risks posed by the Libra digital currency and infrastructure,” they write. “Other authorities and democratic lawmakers have expressed concerns about this initiative. These risks are not limited to financial privacy, since the involvement of Facebook Inc., and its expansive categories of data collection on hundreds of millions of users, raises additional concerns. Data protection authorities will also work closely with other regulators.”

Among the commissioners signing the statement is the FTC’s Rohit Chopra: One of two commissioners at the US Federal Trade Commission who dissented from the $5BN settlement order that was passed by a 3:2 vote last month. 

Also raising concerns about Facebook’s transparency about how Libra will comply with privacy laws and expectations in multiple jurisdictions around the world are: Canada’s privacy commissioner Daniel Therrien; the European Union’s data protection supervisor, Giovanni Buttarelli; UK Information commissioner, Elizabeth Denham; Albania’s information and data protection commissioner, Besnik Dervishi; the president of the Commission for Information Technology and Civil Liberties for Burkina Faso, Marguerite Ouedraogo Bonane; and Australia’s information and privacy commissioner, Angelene Falk.

In the joint statement — on what they describe as “global privacy expectations of the Libra network” — they write:

In today’s digital age, it is critical that organisations are transparent and accountable for their personal information handling practices. Good privacy governance and privacy by design are key enablers for innovation and protecting data – they are not mutually exclusive. To date, while Facebook and Calibra have made broad public statements about privacy, they have failed to specifically address the information handling practices that will be in place to secure and protect personal information. Additionally, given the current plans for a rapid implementation of Libra and Calibra, we are surprised and concerned that this further detail is not yet available. The involvement of Facebook Inc. as a founding member of the Libra Association has the potential to drive rapid uptake by consumers around the globe, including in countries which may not yet have data protection laws in place. Once the Libra Network goes live, it may instantly become the custodian of millions of people’s personal information. This combination of vast reserves of personal information with financial information and cryptocurrency amplifies our privacy concerns about the Libra Network’s design and data sharing arrangements.

We’ve pasted the list of questions they’re putting to the Libra Network below — which they specify is “non-exhaustive”, saying individual agencies may follow up with more “as the proposals and service offering develops”.

Among the details they’re seeking answers to is clarity on what users personal data will be used for and how users will be able to control what their data is used for.

The risk of dark patterns being used to weaken and undermine users’ privacy is another stated concern.

Where user data is shared the commissioners are also seeking clarity on the types of data and the de-identification techniques that will be used — on the latter researchers have demonstrated for years that just a handful of data points can be used to re-identify credit card users from an ‘anonymous’ data-set of transactions, for example.

Here’s the full list of questions being put to the Libra Network:

• 1. How can global data protection and privacy enforcement authorities be confident that the Libra Network has robust measures to protect the personal information of network users? In particular, how will the Libra Network ensure that its participants will:

  • a. provide clear information about how personal information will be used (including the use of profiling and algorithms, and the sharing of personal information between members of the Libra Network and any third parties) to allow users to provide specific and informed consent where appropriate;
  • b. create privacy-protective default settings that do not use nudge techniques or “dark patterns” to encourage people to share personal data with third parties or weaken their privacy protections;
  • c. ensure that privacy control settings are prominent and easy to use;
  • d. collect and process only the minimum amount of personal information necessary to achieve the identified purpose of the product or service, and ensure the lawfulness of the processing;
  • e. ensure that all personal data is adequately protected; and
  • f. give people simple procedures for exercising their privacy rights, including deleting their accounts, and honouring their requests in a timely way.

• 2. How will the Libra Network incorporate privacy by design principles in the development of its infrastructure?

• 3. How will the Libra Association ensure that all processors of data within the Libra Network are identified, and are compliant with their respective data protection obligations?

• 4. How does the Libra Network plan to undertake data protection impact assessments, and how will the Libra Network ensure these assessments are considered on an ongoing basis?

• 5. How will the Libra Network ensure that its data protection and privacy policies, standards and controls apply consistently across the Libra Network’s operations in all jurisdictions?

• 6. Where data is shared amongst Libra Network members:

  • a. what data elements will be involved?

  • b. to what extent will it be de-identified, and what method will be used to achieve de-identification?
    c. how will Libra Network ensure that data is not re-identified, including by use of enforceable contractual commitments with those with whom data is shared?

We’ve reached out to Facebook for comment.

Source: Tech Crunch

A $28 million financing has made SmartNews, an AI-powered news aggregation app, a unicorn.

Japan Post Capital has led the Series E round, which brings the company’s total investment to $116 million and pushes its valuation to $1.1 billion. Existing investors in SmartNews include Development Bank of Japan, SMBC Venture Capital and Japan Co-Invest L.P.

The company, founded in Tokyo in 2012, boasts 20 million monthly active users in the U.S. and Japan. Growing at a rate of 500% per year, its audience checks into the app for a mix of political, sports, global and entertainment news curated for each individual reader. To make money, the company sells inline advertising, video ads and deals with publishers to sell ads against “SmartViews,” its equivalent of Google’s AMP or Facebook’s Instant Articles

Source: Tech Crunch

Users reported issues with Instagram and Facebook Sunday morning.

[Update as of 12:45 p.m. pacific] Facebook says the outage affecting its apps has been resolved.

“Earlier today some people may have had trouble accessing the Facebook family of apps due to a networking issue. We have resolved the issue and are fully back up, we apologize for the inconvenience,” a Facebook company spokesperson said in a statement provided to TechCrunch.

The mobile apps wouldn’t load for many users beginning in the early hours of the morning, prompting thousands to take to Twitter to complain about the outage. #facebookdown and #instagramdown are both trending on Twitter at time of publish.

Source: Tech Crunch

We spend a lot of time around here covering the latest startup fundraises, and for good reason. While capital is certainly an input and not an output, there is nothing quite like the closing of a round of several million in venture capital to prove that yes, the startup I’m working on is at least interesting to someone other than me. External validation shouldn’t be your motivating principle, but it is motivating. Plus, it’s a great milestone to reach out to the press and start talking up the story.

And so week after week, we cover the latest rounds. This company raised $4.5 million in a seed round, and this company raised $16 million in a series A. These stories — and the narratives behind them — are crisp, clean, and precise. A proverbial founder walked up and down South Park in SoMa, explained their story, collected a couple of term sheets, picked one, locked in the due diligence, and is now announcing their round. The VCs are excited, the founder(s) are excited, the employees are excited (and sometimes even the customers are excited!)

The reality for founders though is far more messy and gritty than those headlines would indicate. When I get founders off the record and out for drinks, the true story starts to emerge. That $4.5 million seed fundraise took eight months of maniacal scheduling with two hundred investors just to find a lead. And that lead didn’t lead lead, but took only 20% of the round. In the meantime, they raised twelve times across convertible notes and SAFEs, each one giving the company just a bit more gas in the tank to continue.

When I wrote that a startup raised $4.5 million in one slam dunk, what I really should have written was that they raised $150k, $300k, a few more $50k investments from randos, a couple of thousand from that startup competition, wow $500k from that amazing angel, a $750k SBIR grant from the government that took nine months too long to process, some credits from Brex, and finally at some point that lead investor showed up who gets $3-3.5 million in news value credit on their wimpy $900k check.

As an editor and a writer who covers these aggregate rounds, I struggle with how to approach them. Founders regularly tell me that they would love more transparency and less bravado around fundraises. They want to read how other founders handle the messy complexity of their fundraises, if only because they can compare their own hellish experiences with those of others.

More fundamentally, our readers deserve to read the truth. A $4.5 million round led by a single venture firm writing a $3.5 million check is a very different construct than a bricolage of a random assortment of angel investors. That difference in investor and round quality does indicate something about the startup under examination, and so offering more of those details would better inform our readers as well.

All that is well and good, but no one really wants to hear about these difficulties. Certainly users and customers don’t want to hear about how the software they use or purchased is run by a company that is constantly days away from death. Some early-stage employees probably have the focus to ignore such morbid considerations while carrying out their functions, but many need their paychecks to come from a black box. Somehow, the checks always arrive, and that lowers the stress for everyone.

And even just in terms of the craft of writing, do we really want to exchange the standard funding sentence (“blah blah blah raised blah from blah with participation from blah blah blah”) with a multi-paragraph exegesis of a fundraise?

Writing is about choosing which details are salient and which to pass over. It would be exhausting every morning to read tomes of fundraise detail. Yet, our consistency in depicting fundraises as efficient and precise can create an atmosphere where if you didn’t find a lead in a few weeks and lock down the whole round, you are a failure.

That’s not really a depiction I want to support.

And so, take this as someone who talks to dozens of founders a year off the record about their fundraises, and also sat on the other side of the table as a VC for years. Fundraises are almost always really, really, tough. Very few people get commits in the first meeting, or even in the subsequent meetings. Half the investor introductions during a fundraise are often a complete waste of time if not outright damaging, psychologically or materially. There are a lot of sharks out there. It is much more common today to aggregate a bunch of mini-rounds than it was a couple of years ago.

This is not failure, but just the path of the entrepreneur today in 2019. And at the end of that whole long and windy road, after all of those hundreds of hours of coffee meetings and PowerPoint strategy sessions and skeptical investor convos, all of that work will boil down to twenty words about how the fundraise closed, X dollars were raised, and money was seemingly wired magically to your bank account.

You, me, and really everyone can and should know the truth. But perhaps just rejoice in that headline, and get back to the next slog.

Source: Tech Crunch

Following a failed attempt in July, French inventor Franky Zapata successfully crossed the Channel on top of a hoverboard this weekend. Starting his trek in Sangatte in northern France, the journey took 20 minutes, before landing in St. Margarets Bay, England.

“For the last five to six kilometers I just really enjoyed it,” Zapata told Reuters and other reports on landing near Dover. “Whether this is a historic event or not, I’m not the one to decide that, time will tell.”

Zapata, a former jet ski racer, developed the Flyboard Air some three years back. On July 14, Zapata took part in France’s Bastille Day military parade, riding the Air. That same month, he attempted the feat a first time, only to fall into the water when attempting to land on a boat-mounted platform in order to refuel.

He stopped again to refuel midway, but did so without incident this time out. Three helicopters were along for the ride and a crowd of dozens of well wishers were on-hand to cheer to him upon landing.

Source: Tech Crunch

What founders need to know about pro rata rights

Pro rata used to be reasonably simple. Venture investors who bought preferred shares in startups had the right to lock in a certain percentage of equity provided they continued funding the company in the future rounds of financing. But as VCs have raised ever larger funds and cap tables have become ever more congested, who gets pro rata — and who keeps it — has become a massive distraction for many founders during their fundraises.

Andy Sparks, the founder of Holloway Guides (which, as my co-editor Eric Eldon wrote this week, raised $4.6 million from the New York Times and others), writes in with an analysis of pro rata rights from the latest Holloway Guide on Raising Venture Capital. We are really digging this new model of covering the issues affecting startups, and wish Sparks and his team well in their endeavor.

Pro rata is Latin for “in proportion.” Most people are familiar with the concept of prorating from dealing with landlords: if you’re entering into a lease halfway through the month, your rent may be prorated, where you pay an amount of the rent that is in proportion to your time actually occupying the property.

Almost all investors try to negotiate for pro rata rights, because if a company is doing well they want to own as much of it as possible. After all, why not double down on a winner than use that same money to invest in a newer, unproven company? In the 2018–2019 fundraising climate, though, it’s safe to say we’re at “peak pro rata.” Everybody wants pro rata, even those who don’t entirely understand how it works or affects companies.

Which immigration headlines should you care about?

Every day in the United States, immigration issues dominate the headlines. That can be very taxing for startups, which are often founded by immigrant entrepreneurs and often have sizable immigrant employee bases as well. So which stories should you pay attention to and which stories can you ignore and live in blissful ignorance?

Source: Tech Crunch