Category Archives: Blogging

Nested, the London-based “data-driven” estate agency that provides a cash advance to help you buy a new home before you’ve sold your old one, has raised a further £120 million in funding. The new round is a mixture of equity and debt: £20 million and £100 million, respectively. Leading the equity round is Northzone, and Balderton Capital, while the debt finance comes from an unnamed institutional investor.

It is noteworthy that Balderton has only just invested in Nested several rounds into the company’s existence, considering that the London-based venture capital firm typically invests earlier at Series A. Balderton is also a backer of GoCardless, the payments company previously co-founded by Nested founder Matt Robinson. That said, Balderton General Partner Tim Bunting did invest in Nested in a personal capacity very early on.

Launched in late 2016, Nested competes with high-end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will loan you up to 95 per cent of the market value of your property as a cash advance, that way you’re able to purchase a new home prior to your old one selling. Before Brexit and the uncertainty it has caused with regards to London house prices, that figure was up to 97 percent of the market value of the property, and I understand Nested hopes to return to that percentage once things settle down.

More broadly, the idea behind Nested is to eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, and also ensure that you’re never caught up in the dreaded property ‘chain’ and miss out on your desired home, or are kept in limbo indefinitely waiting for your property to sell. By becoming a cash buyer, it also puts you in the strongest possible position to negotiate on your onward purchase. Robinson says this typically sees savings of 2-4 percent.

In return, Nested charges a fee from 2-4 per cent (plus VAT) depending on how soon you want to receive the advance, and takes a loss if it fails to sell the property for an amount above its initial advance. The idea is to incentivise the startup to always try to get you the genuine market price or more.

Asked how well that is working out so far, Robinson tells me historical valuation accuracy is on average within 1.5 percent of what the company predicted. Better still, Nested is running at 100 percent accuracy for 2018 and is confident enough to make this data public.

“The traditional agents don’t even track it and the online players do their best to obscure the fact that they sell only roughly 4/10th of properties they take on i.e. most customers pay them £1,000 up-front to not sell their house and are left out-of-pocket!” says the Nested founder.

To date, Nested has helped over 400 home-owners, and, aside from increasing volume, including helping property owners outside of London, the company says it plans to further expand its product offering. The bulk of these new products will continue to target sellers to “radically improve the selling experience”. However, I understand that since sellers are buyers, too, future services could also include using Nested’s data, tech and expertise to help with the buying process as well.

Adds Robinson in a statement: “We’re excited to receive the backing from some of Europe’s top VCs who share our vision for fixing the age-old problem of buying and selling homes. We are building an incredible team to offer an unassailable service with the most progressive technology in the property industry. This investment will allow us to continue solving the problems that prevent people from moving home with ease”.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week was a blast. Connie and I were in the studio with our guest, True Ventures’s Tony Conrad, while Danny repped the other side of the country, dialing in from New York.

It was another week shaped by news from Asia. Once we had sorted the sartorially expedient, we first turned to the world of SoftBank, this time taking a close look at its debt load. While SoftBank is currently famous for its investments through its Vision Fund, the company is picking up some notable, debt-powered investments into its vehicle that could add to its risk profile.

After all, who doesn’t want more risk as 2018 comes to a close?

Moving on, Ford is doubling-down on its wager that mobility means more than cars, this time picking up Spin for some sum of money between $40 and $100 million, with most figures coming in a bit light from the nine-figure range.

We care as it’s a fresh turn in the scooter skirmish, not to mention the greater micromobility wars. Bird and Lime have a new competitor that has, possibly, super-deep pockets.

Next, we took a peek at Luckin Coffe’s meteoric rise. This is where our guest selection really showed off; Conrad is a former investor in Blue Bottle, making him a functional caffeine expert. We dug through margins, growth, and why venture players are interested in Luckin at all.

And finally, a look at how recently-public companies are selling more shares after their initial debut. So, when it comes to money on the table, don’t fret it too much.

Fraugster, the Berlin-based startup that uses artificial intelligence to prevent fraud for online retailers, has raised $14 million in a Series B funding. The round is led by CommerzVentures, the venture capital subsidiary of Commerzbank, alongside early Fraugster investors Earlybird, Speedinvest, Seedcamp, and Rancilio Cube.

Notably, Munich Re/HSB Ventures, the VC arm of global reinsurer Munich Re, also participated in the round. That’s because Munich Re is insuring Fraugster’s “Fraud Free” product, which takes on the full liability for each transaction to ensure retailers utilising Fraugster’s fraud detection technology never lose out — a sign that the company is pretty confident in its machine learning.

Selling its wares to payments companies — including Ingenico ePayments, and Six Payments — the Fraugster AI technology takes data from multiple sources, analyses and cross-checks it in a fraction of a second, to determine whether a transaction is fraudulent or not.

The idea isn’t just to block any potential fraud, which rules-based systems can already do, but to actually let more transactions through. That’s because false-positives (ie accidentally preventing perfectly valid purchases) is the real bane of the industry.

Citing industry average stats of false positives, Fraugster CEO and co-founder CEO Max Laemmle tells me that for every dollar lost to fraud, $17 is lost through transactions that are wrongly turned down, leading to lower revenues for merchants. He says that Fraugster’s technology has already got that down to $2.

Meanwhile, the anti-fraud startup says it will use the new funds to continue expansion into new markets. This includes the U.S., Asia and Europe, where retailers are facing “an accelerating battle against fraud”.

Taranis, an ag-tech startup that uses aerial scouting and deep learning to identify potential crop issues, announced today that it has raised a $20 million Series B led by Viola Ventures. Existing investors Nutrien (one of the world’s largest fertilizer producers), Wilbur-Ellis venture capital arm Cavallo Ventures, and Sumitomo Corporation Europe also participated.

Tel Aviv-based Taranis says its aerial imaging technology, carried on high-speed drones or manned aircraft, is currently used by farms in Argentina, Brazil, Russia, Ukraine, and the United States. It plans to expand into more countries with this round of funding, including Australia.

Founded in 2015 by Ofir Schlam, Asaf Horvitz, Eli Bukchin, and Ayal Karmi to increase food production, Taranis’ software targets commodity crops like corn, cotton, wheat, soybean, sugarcane, and potatoes. It identifies potential crop issues, including insect damage, nutrient deficiencies, and diseases, and provide farmers with magnified, high-resolution images that are detailed enough to (for example) let them see what bugs are eating their plants.

In a press statement, Viola Ventures partner Zvika Orron said “After analyzing the digital farming industry, we proudly chose Taranis to be our first investment in this space. Taranis has all the necessary ingredients to become the leader in farm digitalization: a comprehensive precision agriculture solution, leading industry partners to scale and penetrate the market and a passionate team making it all happen.”

Traditional crop monitoring is labor-intensive and not always accurate, even with the use of sensors to track soil quality, fertilizer levels, insects, and other issues. Other venture capital-backed startups using computer vision and AI-based technology to make the process more efficient (a growing field referred to as “precision farming”) include Prospera, which is also based in Tel Aviv, Arable, and Ceres Imaging.

Agricultural giants have also started shopping for precision farming startups. For example, over the past twelve months, Deere agreed to buy Blue River, and Brazilian startup Strider was purchased by Syngenta.

SoftBank CEO Masayoshi Son says the company won’t walk away from its existing commitment with the Saudi Arabian royal family — the largest LP in its $100 billion Vision Fund — but the firm will wait on the outcome of an investigation into the death of journalist Jamal Khashoggi before deciding on whether to continue the relationship.

In his first public remarks following the gruesome death of Khashoggi, whose murder last month is linked with Saudi Arabia’s Crown Prince Mohammad bin Salman, Son condemned the journalist’s killing as an “act against humanity and also journalism and free speech… a horrible and deeply regrettable act.”

While he said the company “want(s) to see those responsible held accountable,” Son told the audience at a SoftBank investor day that there’s no immediate strategy for a follow-up to the $100 billion fund, which has forced other VCs to raise charge fund and adjust their investment strategies.

“We still have money in the Vision Fund 1, in addition, the [SoftBank Mobile] IPO is underway so therefore we can collect money so we will use that effectively for now,” he said. “I think it is still too early to go ahead with Vision Fund 2 so we will be cautious in our next step… however, we have no change in the SoftBank 2.0 strategy, we want to continue expanding better.”

That is in line with previous comments from SoftBank playing down an imminent second fund — its COO Marcelo Claure recently said there is “no certainty” of a follow-up — but the firm has adopted a softer response than other top businessmen who are aligned with Saudi money.

Virgin CEO Richard Branson very publicly suspended his role with two Saudi projects and walked away from investment talks with the country’s Public Investment Fund (PIF), which was in discussion to put money into his Virgin Galactic and Virgin Orbit ventures.

While Son did cancel a speaking engagement at a high-profile Saudi investment event last month, he said today that he believes SoftBank has a responsibility to use the funds it has already collected from PIF.

“Before this tragic case happened, we had already accepted a responsibility to the people of Saudi Arabia to help them manage their financial resources and we can’t all of a sudden drop such responsibility. Things that we have already accepted, we would like to fulfill our fiduciary duties,

“For new projects, we would like to carefully watch the outcome of the case and once the explanation is fully made then we will think about it once again,” Son said.

Despite ducking out of that event, the SoftBank supremo has traveled to the Middle East to meet Saudi Arabia’s Crown Prince Mohammad bin Salman and government officials, and he said that he “directly raised our concerns with them and asked for further clarity on this tragic case.” The prince, he said, is “taking this very seriously.”

PIF’s role in Vision Fund — it is the largest single investor — has threatened to taint its efforts, with chatter in Silicon Valley suggesting that many companies would prefer to take money from less-tainted sources. However, SoftBank has struck two deals in the past week — putting $375 million into robotic food-prep startup Zume and $1.1 billion into glass maker View — which suggest that the sheer size of the checks on offer outweigh any concerns on the origins of its money.

When asked about negative blowback, Son said he hadn’t heard of any cases of startups refusing an investment from the Vision Fund, but he did concede that there “may be some impact” in the future.

You probably don’t know how much it should cost to get your home’s windows washed, yard landscaped or countertops replaced. But Setter does. The startup pairs you with a home improvement concierge familiar with all the vendors, prices and common screwups that plague these jobs. Setter finds the best contractors across handiwork, plumbing, electrical, carpentry and more. It researches options, negotiates a bulk rate and, with its added markup, you pay a competitive price with none of the hassle.

One of the most reliable startup investing strategies is looking at where people spend a ton of money but hate the experience. That makes home improvement a prime target for disruption, and attracted a $10 million Series A round for Setter co-led by Sequoia Capital and NFX. “The main issue is that contractors and homeowners speak different languages,” Setter co-founder and CEO Guillaume Laliberté tells me, “which results in unclear scopes of work, frustrated homeowners who don’t know enough to set up the contractors for success, and frustrated contractors who have to come back multiple times.”

Edo, an ad analytics startup founded by Daniel Nadler and actor Edward Norton, announced today that it has raised $12 million in Series A funding.

Nadler and Norton have both had startup success before — Nadler co-founded and led Kensho, which S&P Global acquired for $550 million. Norton invested in Kensho and co-founded CrowdRise, which was acquired by GoFundMe.

Even so, ad analytics might seem like an arcane industry for an actor/filmmaker to want to tackle. However, Norton said he was actually the one to convince Nadler that it was worth starting the company, and he argued that this is an important topic to both of them as creators. (Nadler’s a poet.)

“Movie studios and publishers, they take risks on talent, on creative people like us,” Norton said. “We want them to do well … The better they do with the dollars they spend, the less risk averse they become.”

Nadler and Norton recruited Kevin Krim, the former head of digital at CNBC, to serve as Edo’s CEO.

Krim explained that while linear TV advertising still accounts for the majority of ad budgets, the effectiveness of those ads is still measured using old-fashioned “survey-based methodologies.” There are other measurement companies looking online; Norton said they’re focused on social media sentiment and other “weak proxies” for consumer behavior.

In contrast, Edo pulls data from sources like search engines and content sites where people are doing research before making a purchase. By applying data science, Krim said, “We basically can measure the change in consumer engagement, the behaviors that are indicative of intent. We can measure the change in consumer behavior for every ad.”

In fact, Edo says that since its founding in 2015, it has created a database of 47 million ad airings, so advertisers can see not just their own ad performance, but also that of their competitors. This allows advertisers to adjust their campaigns based on consumer engagement — Krim said that in some cases, advertisers will receive the overnight data and then adjust their ad rotation for that very night.

As for the Series A, it was led by Breyer Capital. (Jim Breyer has backed everything from Facebook to Etsy to Marvel.) Vista Equity co-founders Robert Smith and Brian Sheth participated in the round, as did WGI Group.

“For more than a decade I’ve watched the data science talent arbitrage transform industries from finance to defense, from transportation to commerce,” Breyer said in the funding announcement. “We needed someone to bring these capabilities to bear on the systemic inefficiencies and methodological shortcomings of measurement and analytics in media and advertising.”

On the customer side, Edo is already working with ESPN, Turner, NBCUniversal and Warner Bros. I wondered whether some of the TV networks might have been worried about what Edo would reveal about their ads, but Norton said the opposite was true.

“I don’t sense that they in any way have trepidation that we’re going to pull their pants down — quite the opposite,” he said. “They are absolutely thrilled with our ability to help burnish and validate their assertions about the strength of what they’re offering.”

Rockset, a startup that came out of stealth today, announced $21.5M in previous funding and the launch of its new data platform that is designed to simplify much of the processing to get to querying and application building faster.

As for the funding, it includes $3 million in seed money they got when they started the company, and a more recent $18.5 million Series A, which was led by Sequoia with participation from Greylock.

Jerry Chen, who is a partner at Greylock sees a team that understands the needs of modern developers and data scientists, one that was born in the cloud and can handle a lot of the activities that data scientists have traditionally had to handle manually. “Rockset can ingest any data from anywhere and let developers and data scientists query it using standard SQL. No pipelines. No glue. Just real time operational apps,” he said.

Company co-founder and CEO Venkat Venkataramani is a former Facebook engineer where he learned a bit about processing data at scale. He wanted to start a company that would help data scientists get to insights more quickly.

Data typically requires a lot of massaging before data scientists and developers can make use of it and Rockset has been designed to bypass much of that hard work that can take days, weeks or even months to complete.

“We’re building out our service with innovative architecture and unique capabilities that allows full-featured fast SQL directly on raw data. And we’re offering this as a service. So developers and data scientists can go from useful data in any shape, any form to useful applications in a matter of minutes. And it would take months today,” Venkataramani explained.

To do this you simply connect your data set wherever it lives to your AWS account and Rockset deals with the data ingestion, building the schema, cleaning the data, everything. It also makes sure you have the right amount of infrastructure to manage the level of data you are working with. In other words, it can potentially simplify highly complex data processing tasks to start working with the raw data almost immediately using SQL queries.

To achieve the speed, Venkataramani says they use a number of indexing techniques. “Our indexing technology essentially tries to bring the best of search engines and columnar databases into one. When we index the data, we build more than one type of index behind the scenes so that a wide spectrum of pre-processing can be automatically fast out of the box,” he said. That takes the burden of processing and building data pipelines off of the user.

The company was founded in 2016. Chen and Sequoia partners Mike Vernal joined the Rockset board under the terms of the Series A funding, which closed last August.

Messaging app firm Line has given up majority control of its Line Games business after it raised outside financing to expand its collection of titles and go after global opportunities.

The Line Games business was formed earlier this year when Line merged its existing gaming division from NextFloor, the Korea-based game publisher that it acquired in 2017. Now the business has taken on capital from Anchor Equity Partners, which has provided 125 billion KRW ($110 million) in financing via its Lungo Entertainment entity, according to a disclosure from Line.

A Line spokesperson clarified that the deal will see Anchor acquire 144,743 newly-created shares to take a 27.55 percent stake in Line Games. That increase means Line Corp’s own shareholding is diluted from 57.6 percent to a minority 41.73 percent stake.

Korea-based Anchor is best known for a number of deals in its homeland including investments in e-commerce giant Ticket Monster, Korean chat giant Kakao’s Podotree content business and fashion retail group E-Land.

Line operates its eponymous chat app which is the most popular messaging platform in Japan, Thailand and Taiwan, and also significantly used in Indonesia, but gaming is a major source of income. This year to date, Line has made 28.5 billion JPY ($250 million) from its content division, which is primarily virtual goods and in-app purchases from its social games. That division accounts for 19 percent of Line’s total revenue, and it is a figure that is only better by its advertising unit, which has grossed 79.3 billion JPY, or $700 million, in 2018 to date.

The games business is currently focused on Japan, Korea, Thailand and Taiwan, but it said that the new capital will go towards finding new IP for future titles and identifying games with global potential. It is also open to more strategic deals to broaden its focus.

While Line has always been big on games, Line Games isn’t just building for its own service. The company said earlier this year that it plans to focus on non-mobile platforms, which will include the Nintendo Switch among others consoles.

That comes from the addition of NextFloor, which is best known for titles like Dragon Flight and Destiny Child. Dragon Flight has racked up 14 million users since its 2012 launch, at its peak it saw $1 million in daily revenue. Destiny Child, a newer release in 2016, topped the charts in Korea and has been popular in Japan, North America and beyond.

Line went public in 2016 via a dual U.S.-Japan IPO that raised over $1 billion.

Note: the original version of this article was updated to clarify that Lungo Entertainment is buying newly-issued shares.