Klang gets $8.95M for an MMO sim sitting atop Improbable’s dev platform

Berlin-based games studio Klang, which is building a massive multiplayer online simulation called Seed utilizing Improbable’s virtual world builder platform, has just bagged $8.95M in Series A funding to support development of the forthcoming title.

The funding is led by veteran European VC firm Northzone. It follows a seed raise for Seed, finalized in March 2018, and led by Makers Fund, with participation by firstminute capital, Neoteny, Mosaic Ventures, and Novator — bringing the total funding raised for the project to $13.95M.

The studio was founded in 2013, and originally based in Reykjavík, Iceland, before relocating to Berlin. Klang’s original backers include Greylock Partners, Joi Ito, and David Helgason, as well as original investors London Venture Partners.

The latest tranche of funding will be used to expand its dev team and for continued production on Seed which is in pre-alpha at this stage — with no release date announced yet.

Nor is there a confirmed pricing model. We understand the team is looking at a variety of ideas at this stage, such as tying the pricing to the costs of simulating the entities.

They have released the below teaser showing the pre-alpha build of the game — which is described as a persistent simulation where players are tasked with colonizing an alien planet, managing multiple characters in real-time and interacting with characters managed by other human players they encounter in the game space.

The persistent element refers to the game engine maintaining character activity after the player has logged off — supporting an unbroken simulation.

Klang touts its founders’ three decades of combined experience working on MMOs EVE Online and Dust 514, and now being rolled into designing and developing the large, player-driven world they’re building with Seed.

Meanwhile London-based Improbable bagged a whopping $502M for its virtual world builder SpatialOS just over a year ago. The dev platform lets developers design and build massively detailed environments — to offer what it bills as a new form of simulation on a massive scale — doing this by utilizing distributed cloud computing infrastructure and machine learning technology to run a swarm of hundreds of game engines so it can support a more expansive virtual world vs software running off of a single engine or server.

Northzone partner Paul Murphy, who is leading the investment in Klang, told us: “It is unusual to raise for a specific title, and we are for all intents and purposes investing in Klang as a studio. We are very excited about the team and the creative potential of the studio. But our investment thesis is based on looking for something that really stands out and is wildly ambitious over and above everything else that’s out there. That is how we feel about the potential of Seed as a simulation.”

Headout lands $10M Series A to help tourists book last-minute outings

Imagine being in a new city with a few hours to kill, but no idea what to do. Headout is a travel app that enables tourists to book outings at very short notice, in most cases on the same day. The startup announced today that it’s raised a $10 million Series A led by returning investors Nexus Venture Partners and Version One Ventures to support its ambitious growth targets.

Over the next 18 months, co-founder and CEO Varun Khona says the startup wants to expand from 20 cities to 100 cities in North America, Europe and the Asia-Pacific. The app recently added French, German and Spanish in select markets and aims to have all of its inventory available in 12 languages by the end of next year. Its bookings includes sightseeing tours, museum tickets and shows.

Headout’s Series A brings its total raised to $12 million. Its seed round was announced in 2015, when TechCrunch first profiled the company. The startup claims it has grown eight times over the past 12 months and is profitable.

As it enters new markets, however, Headout will be up against a roster of competitors that also offer experience bookings for tourists. These include Klook, TripAdvisor-owned Viator, Get Your Guide and Airbnb’s Experiences feature.

Khona says Headout’s main edge is tailoring its inventory and technology platform for “spontaneous last-minute mobile use cases.” It’s also a managed marketplace, meaning it standardizes pricing and quality, with the hope of creating a consistent experience across all outings. The startup says this focus on combining quality with unit economics means it’s enabled customers to save an average of 18% on last-minute bookings.

Japanese startup Paidy raises $55M Series C to let people shop online without a credit card

Paidy, a fintech startup that enables Japanese consumers to shop online without using a credit card, announced today that it has raised a $55 million Series C. The round was led by Japanese trade conglomerate Itochu Corporation, with participation from Goldman Sachs.

The Tokyo-based startup says this brings its total funding so far to $80 million, including a $15 million Series B announced two years ago. One notable fact about Paidy’s funding is that it’s raised a sizable amount for Japanese startup, especially one with non-Japanese founders (its CEO and co-founder is Canadian and Goldman Sachs alum Russell Cummer, left in the photo above with CTO and co-founder Lee Smith).

Paidy was launched because even though Japan’s credit card penetration rate is high, their usage rate is relatively low, even for online purchases. Instead, shoppers pay cash on delivery or at convenience stores, which function as combination logistics/payment centers in many Japanese cities.

This is convenient for buyers because they don’t have to enter a credit card online or worry about fraud, but a hassle for businesses that often need to float cash for merchandise that hasn’t been paid for yet or deal with incomplete deliveries.

Paidy makes it possible for people to buy online without creating an account or using their credit cards. Instead, if a merchant uses Paidy, its customers are able to check out by entering their mobile phone numbers and email addresses. Then Paidy authenticates them with a four-digit code sent through SMS or voice. Every month, customers settle their bills, which include all transactions they made using Paidy, at a convenience store or through bank transfers or auto-debits (installment and subscription plans are also available).

The value proposition for businesses is that Paidy can increase their customer base and guarantee they get paid by using machine learning algorithms to underwrite transactions. The company claims that there are now 1.4 million active Paidy accounts, with the ambitious goal of increasing that number to 11 million by 2020 by expanding to bigger merchants and offline transactions.

In a press statement, Cummer said “We are extremely honored that Paidy’s business concept was highly valued by one of Japan’s most prestigious business conglomerates, ITOCHU. Through this tie-up, we expect to launch new merchants in order to deliver Paidy’s frictionless and intuitive financial solution to a much broader audience.”

Next Insurance, an insurtech targeting small businesses, scores $83M Series B led by Redpoint

Next Insurance, the Israeli digital insurance startup that helps small businesses get cover, has raised a significant new funding round, adding another $83 million to its balance sheet.

The Series B round is led by Silicon Valley’s Redpoint Ventures, and will be used by the company to continue expanding across the U.S., where it now operates as a full service insurance carrier. It will also increase headcount in both its Israel and U.S. offices.

Founded in 2016 with the aim of becoming a one-stop insurance shop for micro and small business insurance needs, Next Insurance designs insurance plans for business sectors that are often overlooked by more general insurers.

Small business owners often rely on price comparison websites to figure out what kind of coverage they need and where to buy it, though that means the plans they get don’t always cover all their needs. The other option is to use a broker but that also adds another middle person.

“The complexity of the small business insurance market is very significant and this leads to a situation where even the largest insurance providers own less than 10 percent of the small business market,” founder and CEO Guy Goldstein told TechCrunch when the company raised its Series A. “This offers us huge growth potential as we aim to specialize in and become a market leader in each small business vertical”.

The small business sectors where Next Insurance offers general and professional liability insurance currently includes contractors, fitness, cleaning, beauty, therapy, entertainment, and education. It lets you buy insurance instantly at what it claims is very competitive prices and with no hidden fees. In addition, now that Next Insurance is a licensed carrier, it is able to write policies independently, with what it says is more freedom over underwriting, setting prices, and configuring policies.

Moving forward, the company plans on adding further lines of insurance, on-demand coverage, and ensuring that claims are paid within 48 hours. It is also hoping to develop more sophisticated uses of AI and machine learning to improve the customer experience and streamline the insurance purchasing process.

To that end, Goldstein says Next Insurance’s Series B is a “monumental turning point” in the company’s history, describing growth over the last two years as exponential. Hyperbole aside, the company does appear to have found market fit, as evidenced by the size of the round and how many previous backers followed on.

The Series B Round brings Next Insurance’s total funding to $131 Million in just two years. Other investors that participated in this round include Nationwide Insurance, Munich Re, American Express Ventures, Ribbit Capital, TLV Ventures, and Zeev Ventures. Elliot Geidt, Managing Director of Redpoint Ventures, will join the board of Next Insurance.

More broadly, the insurtech space is rapidly heating up in recognition that the insurance sector, both consumer and B2B, is still yet to be fully digitised, especially in a mobile-first world. In the U.S., consumer home insurance app Lemonade has been grabbing most of the headlines, not least after it raised $120 million in a round led by Softbank.

“Gone are the days of complicated, unreadable policies, exclusions that leave entrepreneurs vulnerable, and endless meetings and phone calls with insurance agents who don’t understand the nuances and needs of different classes of business,” adds Goldstein in a statement. “Small businesses are the backbone of the U.S. economy, and they deserve insurance policies that are simple to access, affordable to own, and which provide them the support and confidence they need to thrive”.

Box acquires Butter.ai to make search smarter

Box announced today that it has acquired Butter.ai, a startup that helps customers search for content intelligently in the cloud. The terms of the deal were not disclosed, but the Butter.AI team will be joining Box.

Butter.AI was started by two ex-Evernote employees, Jack Hirsch and Adam Walz. The company was partly funded by Evernote founder and former CEO Phil Libin’s Turtle Studios. The latter is a firm established with a mission to use machine learning to solve real business problems like finding the right document wherever it is.

Box has been adding intelligence to its platform for some time, and this acquisition brings the Butter.AI team on board and gives them more machine learning and artificial intelligence known-how while helping to enhance search inside of the Box product.

Photo: Box

“The team from Butter.ai will help Box to bring more intelligence to our Search capabilities, enabling Box’s 85,000 customers to more easily navigate through their unstructured information — making searching for files in Box more contextualized, predictive and personalized,” Box’s Jeetu Patel wrote in a blog post announcing the acquisition.

That means taking into account the context of the search and delivering documents that make sense given your role and how you work. For instance, are if you are a salesperson and you search for a contract, you probably want a sales contract and not a one for a freelancer or business partnership.

The company launched in September, 2017, and up until now it has acted as a search assistant inside Slack you can call upon to search for documents and find them wherever they live in the cloud. The company will be winding down that product as it becomes part of the Box team.

As is often the case in these deals, the two companies have been working closely together and it made sense for Box to bring the Butter.AI team into the fold where it can put its technology to bear on the Box platform.

“After launching in September 2017 our customers were loud and clear about wanting us to integrate with Box and we quickly delivered. Since then, our relationship with Box has deepened and now we get to build on our vision for a MUCH larger audience as part of the Box team,” the founders wrote in a Medium post announcing the deal.

The company raised $3.3 million over two seed rounds. Investors included Slack and General Catalyst.

TaxScouts wants to make filing your tax return a lot less tedious

TaxScouts, a U.K. startup founded by TransferWise and Marketinvoice alumni, is the latest online service designed to make filing your tax return a lot less tedious. However, rather than focusing on the bookkeeping part of the problem primarily tackled by cloud accounting software — which is often overkill if you are self-employed or simply earn a little additional income outside of your day job — the company combines “automation” with human accountants to help you prepare your tax submission.

“Doing taxes is either tedious when you have to do them yourself, or expensive when you hire an accountant,” says TaxScouts co-founder and CEO Mart Abramov, who was employee number 8 at TransferWise and also previously worked at Intuit, MarketInvoice and Skype. “We’re automating as much of the admin part of tax preparation as possible in our online app. We then connect you with a certified accountant who will take care of the entire tax filing process for you”.

The headline draw is that TaxScouts charges a flat fee of £99 if you pay in advance, and promises a turn-around of just 24 hours. To help with this, the web app walks you through your tax status, income and expenses without assuming too much prior knowledge. This includes asking you to upload or take a photo of any required documents, such as invoices or dividend certificates. The idea is that all of the admin is captured digitally and packaged up ready for your assigned accountant to take a look.

“As more of the menial tasks are handled by our app this allows accountants to focus on what they do best and not get stuck in admin,” explains Abramov. “They can focus on providing advice and expertise to make sure everything is done right. Our customers get both the benefits of getting a personal accountant and having a simple tool to manage it all, without the huge costs”.

Abramov tells me that TaxScouts’ typical customers are anyone who wants to have their self assessment done for them or who just wants help with tax preparation. This spans self-employed people — from construction workers to professional freelancers — entrepreneurs and company directors, and people who are entitled to some kind of tax relief or refund, such as investors on crowdfunding platforms. He also said that gig economy workers are a good fit.

Moving forward, TaxScouts plans to further develop the automation functionality, including plugging into more data sources beyond its existing integration with HMRC. Abramov says this could include a driver’s Uber data for tracking mileage claims, for example, while I can immediately see how the app could integrate with various fintech offerings that capture transactions and receipts.

To that end, the startup has raised £300,000 in “pre-seed” funding to continue building out the product. Backers include Picus Capital, Charlie Delingpole (co-founder of ComplyAdvantage and MarketInvoice), and Charlie Songhurst (former GM corporate strategy at Microsoft).

Boost VC backs Storyline’s Alexa skill builder

Have you felt a disconnect with your Alexa and wished she could share more of your sense of humor or tell you an actually scary ghost story? Startup Storyline makes designing your own Alexa skills as easy and dragging and dropping speech blocks, and has just raised $770,000 in a funding round led by Boost VC to help grow its skill builder API.

The company launched in 2017 to help bridge the gap between creators and the tricky voice recognition software powering smart speakers like Alexa. With its new funding, CEO and co-founder  Vasili Shynkarenka says that Storyline is hoping to expand its team and its interface to other smart speakers, like Google Home, as well work on integrating monetization and third-party services into the interface.

Storyline’s user friendly interface lets users drag-and-drop speech commands and responses to customize user’s interactions with their smart speaker devices. Users can choose between templates for a skill or a flash briefing, and test the voice recognition and logic of the design live in their browser window.

Since its launch, over 12,000 Storyline users have published 2,500 skills in the Alexa Skills Store — more than 6% of all skills in the store. The interface has also been used by the grand-prize winners of Amazon’s developer Alexa Skills Challenge: Kids and the publication Slate.

For Shynkarenka, the creation of these skills is vastly different from the creation of a typical smartphone app.

“Most people think of Alexa as another software platform, like a smartphone or the web, and that’s not [actually] true,” he said. “The most popular apps on Alexa are not the apps that let you chat with friends or browse your social networks. The most popular apps are content apps — the apps that you can use to play trivia games with your family over dinner.”

Just as YouTube has video creators, Shynkarenka says he wants Storyline to become the home for smart speaker content across devices. The startup has already cultivated an active online community of 2,500 creators excited about creating and sharing this content.

Storyline is not alone in this space however, Amazon itself released Amazon Blueprints in April that allows users to create customized Amazon skills using several different available templates.

As the smart speaker space, and subsequent skill creation one, continue to heat up, the creation of your perfectly customized new smart speaker family member may be closer than you think.

Fever gets $20M to delight more hipsters with A/B tested Madhatter’s G&T parties

London-based Fever, an urban events discovery app-cum-entertainment events business with an online media arm that it uses as marketing megaphone and data-gathering lens on its community of users, has closed a $20 million Series C investment to expand into new markets across Europe and North America — and win more hipsters over to its own brand “immersive themed experiences”.

The round was co-led by European media group Atresmedia and real estate company Labtech — because of course parties need venues — and with participation from existing investors Accel Partners and 14W Ventures.

The 2014-founded startup had raised $19.3M prior this round, according to Crunchbase, including a $3M seed for its original Fever event discovery app back in 2014.

Fever’s urban events discovery app uses a recommendation algorithm to offer personalized listings coverings activity such as music festivals, theatre, fashion, restaurants and pop-ups. But it also feeds and supplements that business via an online media network, called Secret Media Network, plus a series of branded social media channels (Secret London, Secret NYC etc) — using this cross-platform media operation to gather intel on what its community of urban users would like to do next for paid hipster fun.

In its main markets (London, New York, Paris, Madrid) it says the reach of this network is more than 12M unique users per week — allowing it to market upcoming events to millions of engaged eyeballs as well as power its own-brand ‘Fever Originals’ events, based off of the insights it’s mining from its community.

Specifically it says it’s using anonymised behavioral data-mining to algorithmically predict untapped demand for events that don’t yet exist — and then serving them up as an own brand event.

This community data driven events programming extends to testing the intent users have for different themed “immersive experiences” in different settings and scenarios — a process it likens to Netflix’s approach of using analytics to understand audiences to develop and market new content.

So what kind of events has this A/B testing-esque programming process resulted in?

Fever gives an example of an Alice in Wonderland themed experience it ran in a double-decker bus in Brooklyn — saying this was a “clear winner” during its user analysis, when it tried out alternative theme options (such as Aladdin and the Lion King), as well as alternative city locations (in other parts of New York), and venues (rooftop, double-decker bus, indoors). But its NYC community clearly wanted Alice in a bus in Brooklyn.

The resulting Madhatter themed G&T immersive experience amassed more than 12,000 people on the waitlist before the event went live. “At $60 per person, it sold out for the month of June in just a couple of days since it was released in early May, with only a sketch of what the venue would look like, and a brief story describing the experience,” Fever tells TechCrunch.

Another forthcoming own-brand event — to be announced later this month — is billed as the biggest escape room in Europe. TechCrunch’s Roman Dillet is bound to be interested in that — or at least if the event is bound for Paris.

Fever says it will also put on a music and art festival in Madrid in September which it’s called “Jardin de las Delicias” which it says is inspired by Bosch’s Garden of Earthly Delights — a late 15th or early 16th century painting that hangs in Madrid’s Museo de Prado.

When open, the triptych masterpiece in oils depicts a heaven to hell progression starting with Adam and Eve in the garden of Eden, and ending in a highly detailed and nightmarish illustration of hell involving animals torturing and feasting on human flesh.

The large central panel illustrates a vision of life between those two moral bookends: Teeming with nude male and female flesh, animals, plants and some fantastical creatures. Presumably that’s where Fever’s themed event intends to focus. At least, we hope so…

El jardín de las Delicias, de El Bosco.jpg
By Galería online, Museo del Prado., Public Domain, Link

Fever says its data-driven, wait-list model allows it to mitigate financial risk for the events it programs and the partners it works with (such as drinks brands).

It does not use a booking fee model for Fever Originals — its platform is free for users, with no additional fees when they buy a ticket — rather it’s operating what it calls a “marketing fee monetization strategy”, which is describes as significantly more lucrative than a traditional booking fee.

“The organisers pay a commission fee based upon Fever’s ability to drive additional ticket sales and attendance to their event or experience,” it explains. “Fever is using its prescription power to get its users excited about experiences they were not originally considering, and as a result is offering a powerful marketing tool for organisers, in comparison with other traditional tools (billboards, TV ads, etc.).

“This is in contrast to a ‘ticketing fee’, which refers solely to a fee charged for the processing of a ticket sale transaction. Given that Fever/Secret Media creates significant financial and advertorial value for event organisers, the ‘marketing fee’ is around 3-5 times that of a ‘ticketing fee’.”

It adds that its current cities have been growing self-sufficiently over the last 12 months, at a rate of 100% year on year, since reaching break-even — which also happened a year ago.

At the same time, it continues to offer third party events discovery within its apps, saying the business model it started with hasn’t changed but that its growing audience (and the data it’s able to extract from them) has allowed it to supplement that by programming its own events.

With A/B-tested events like these, the world’s hipsters have probably never had it so good.

Commenting on the Series C in a statement, Javier Nuche, MD of diversification at Atresmedia, said: With this investment we are consolidating our presence in the fast-growing experience economy and digital marketing space. Fever’s ability to mobilize a digital audience together with its optimization technology has proven extremely valuable for advertisers and will create very significant commercial synergies with Atresmedia, in our goal to offer the best communication solutions to our clients.”

Draper Esprit invests in and partners with German VC Earlybird

Draper Esprit, the publicly-listed VC firm based in London, is putting down further roots across Europe in cooperation with German VC Earlybird.

The “strategic partnership” sees Draper invest an initial €18 million in the latest Earlybird Fund VI (which closed this week at €175 million, above its initial target, apparently), with a commitment to invest a further €17 million or so per annum over the next four years.

The tie up will also mean the two VCs will work together beyond Draper simply being an LP in Earlybird, such as sharing deal-flow and investment resources. In addition, Draper is taking a minority stake in the management company of Earlybird Fund VI via the issuing of new Draper Esprit shares to Earlybird partners.

By putting money into Earlybird Fund VI, Draper has also indirectly acquired a minority stake in a number of startups that have already received investment from the fund. They include Shapeshift, Everoad, Movinga, Fraugster, Medidate, Xain, and Crossengage.

However, explained Draper Esprit CEO and co-founder Simon Cook in a call this morning, the partnership is really about the two firm’s leveraging the brand recognition of their broader and respective portfolios.

In aggregate, both firms say they count 100 “high growth” companies across Europe in their respective portfolios. They include the likes of Revolut, Graze, UI Path, N26, Transferwise, Ledger, Graphcore and Peak Games.

Meanwhile, in a European VC market where almost every local early-stage VC is becoming “pan-European,” the two firms met to discuss how they might work together. As the conversation progressed, it became clear that a more formal partnership fitted the ambitions of both VCs as they both attempt to have a larger presence across the continent.

In a corresponding blog post, Draper Esprit reiterates that it invests in series A, B and beyond, whereas Earlybird is focused on seed stage to series A. So, whilst there is some overlap, it won’t be hard for the two firms to divvy up deals and Cook told me Draper Esprit will share all relevant deal-flow with Earlybird and where it makes sense a partner at either firm will take the lead.

“We invest from offices in the U.K., Ireland, and Paris. They, from Berlin, Munich, Istanbul. We raise money via the public markets and through our EIS and VCT funds, they from traditional private LPs,” adds the VC firm.

Airwallex raises $80M for its international payment service for businesses

Airwallex, a three-year-old fintech startup focused on international payments for SMEs and businesses, is putting itself on the map after it raised an $80 million Series B round.

Based of out of Melbourne, but with six offices in Asia and other parts of the world, Airwallex’s new funding round is the second largest financing deal for an Australian startup in history. The round was led by existing investors Tencent, the $500 billion Chinese internet giant, and Sequoia China. Other participants included China’s Hillhouse, Horizons Ventures — the fund from Hong Kong’s richest man Li Ka-Shing — Indonesia-based Central Capital Ventura (BCA) and Australia’s Square Peg, a firm from Paul Bassat who took recruitment firm Seek to IPO and is one of Australia’s highest-profile founders.

The financing takes Airwallex to $102 million raised. Tencent led a $13 million Series A in May 2017, while Square Peg added $6 million more via a Series A+ in December. Mastercard is also a backer; the finance giant uses Airwallex to handle its “Send” product while Tencent uses the service to power an overseas remittance service for its WeChat app.

Airwallex handles cross-border transactions for companies that do business in multiple countries using international currencies. So it’s not unlike a Transferwise-style service for SMEs that lack the capital to develop a sophisticated (and expensive) international banking system of their own.

The service uses wholesale FX rates to route overseas payments back to a client’s domestic bank and is capable of processing “thousands of transactions per second,” according to the company. A use case example might include helping a China-based seller return money earned in the U.S. or Europe via Amazon or other e-commerce services, or route sales revenue back directly from their own website.

Airwallex CEO Jack Zhang (far right) on stage at TechCrunch Shenzhen in 2017

China is a key market for Airwallex — which was started by four Australian-Chinese founders — as well as the wider Asian region, and in particular Australia, Hong Kong and Southeast Asia. With this new capital, Airwallex co-founder and CEO Jack Zhang said the company will increase its focus on Hong Kong and Southeast Asia, whilst also extending its business in Europe (where it has a London-based office) and pushing into North America.

Product R&D is shared across Melbourne and Shanghai, while Hong Kong accounts for business development, compliance and more, Zhang explained. However, Airwallex’s locations in London and San Francisco are likely to account for most of the upcoming headcount growth planned following this funding. Right now, Airwallex has around 100 staff, according to Zhang.

The company is also aiming to expand its product range, too.

The firm is in the process of applying for a virtual banking license in Hong Kong, a third-party payment license in mainland China, and a cross-border Chinese yuan license. One goal, Zhang revealed, is to offer working capital loans to SMEs to help them to scale their businesses to the next level. Airwallex is working with an undisclosed partner to underwrite deals in the future. Zhang explained that the company sees a gap in the market since banks don’t have access to critical data on clients for loan assessments.

More generally, he’s bullish for the future despite Brexit and the ongoing trade war between the U.S. and China.

“The trade war gives the Chinese yuan a lot of vitality, and we’ve seen more demand in the market. China’s belt road initiative has really taken off, too, and we’re seeing the impact in many many of our payment corridors,” he explained. “Business has been booming, especially as traditional offline SMEs start to move online and go from domestic to global.”

“We want to be the backbone to support these new opportunities for businesses,” Zhang added.