Tuesday, September 6, 2022

Seedstars Africa Ventures appoints new partner to back more founders in the continent

Seedstars Africa Ventures, the pan-African early-stage fund for startups, has appointed Bruce Nsereko-Lule as its new general partner, to help it deploy more capital and provide the much-needed technical support for founders across the continent.

Seedstars Africa Ventures – which is part of Seedstars Group, an accelerator and VC that is active globally in over 30 emerging markets – provides early-stage capital of up to $2 million in seed and Series A rounds. The fund counts the French equity firm LBO France among its limited partners, and has, so far, invested over $5 million in five startups, including Kenya’s ISP Poa Internet and Nigeria’s grid management SaaS for electricity distribution utilities Beacon Power Services, since it was founded in 2020.

The fund, which plans to deploy more capital over the next few months, will tap Nsereko-Lule’s vast experience, and the networks he has gained over the years as an active venture capitalist in Africa.

Nsereko-Lule told TechCrunch that his focus at the fund will be helping it make great investments in the continent and provide initial and follow-on funding to cushion startups, and help them build and scale businesses.

“We will be putting in an initial check ($250k-$500k) and basically, we will lead the round. And then we will keep funding until the business has reached proper growth, and probably hit profitability and has opportunities to exit and further scale,” said Nsereko-Lule, who has joined Tamim El Zein, and Maxime Bouan, the fund’s other general partners.

“By doing this, we are providing more funding to local founders, and trying to stop this constant fundraising loop that founders find themselves in. The support is meant to help them to spend their full time building the business.”

Seedstars Africa Ventures general partners (L-R) Tamim El Zein, Bruce Nsereko-Lule, and Maxime Bouan. Image Credits: Seedstars Africa Ventures

Prior to joining the fund, Nsereko-Lule was previously the founding investment principal of Chandaria Capital, a Kenya-based VC fund founded in 2017 to serve as the investment vehicle of the Chandaria Industries. He had previously worked as an investment banker in the U.K.

Chandaria Capital backed 38 startups 

During his time at Chandaria Capital, Nsereko-Lule says they invested millions of dollars in 38 startups, initially starting with Kenya before entering other African and emerging markets in South America and Asia.

By the end of his tenure, the sector-agnostic fund had completed 52 transactions (including follow-on investments) with startups such as Tushop, Jumba, Wasoko, Kobo360, TradeDepot, Carry1st, Shara, and Chari.

“I was in charge of operations, and it was an exciting journey – it was something completely new, but I had my financial background. We decided to be a sector-agnostic fund from day one, and that was because we saw multiple investment opportunities across the continent,” he said.

At Seedstars Africa Ventures, Nsereko-Lule plans to continue backing founders in the continent at even a greater scale, as he is convinced that there are many great startups in Africa that are struggling to get funding.

“Venture capital in Africa is doing very well. You see multiple businesses gaining funding, building sustainable business models, growing and scaling. An interesting fact is that the startups that we invested in have managed to raise over $450 million since our investment. So, this really proves that Africa has managed to create an environment where companies can grow and successfully scale to valuable businesses,” said Nsereko-Lule.

He added: “We’re also in a fortunate situation where we have a much higher success ratio. With startups really managing to scale and gain more funding. And we’re starting to see the development of exits.”

Seedstars Africa Ventures fund targets to raise $100 million to invest in startups within Africa – which continue to receive the least VC funding when compared to other regions in the World. Last year, the continent received nearly $5 billion in VC funding, and while this was almost double the previous year, the funding was negligible in comparison with markets like the US ($311- $329.8 billion), and India ($42 billion).

However, Nsereko-Lule says the ecosystem will continue to grow.

“There are a lot of opportunities to invest in, provide good returns, and at the same time make an impact on the continent.”



Monday, September 5, 2022

Solar-powered carmaker Lightyear raises $85M and gears up for production

Lightyear, a Dutch startup developing a long-range solar-powered car, today announced that it has raised €86 million ($85 million) as it prepares to begin production of its first vehicle in the coming months.

While recent history is littered with examples of prototype solar-powered vehicles, the burgeoning electric car movement has so far been mostly limited to automobiles that need to be plugged into the grid to charge, or hybrid electric vehicles (HEV) that self-charge while driving. A number of companies are pushing to make solar-powered cars a mass-market reality, however, such as Germany’s Sonos Motors which recently revealed the final production design of its inaugural solar electric vehicle, scheduled to launch some time in 2023. And Lightyear, a six-year-old startup that debuted its prototype back in 2019 and which had previously raised more than $100 million.

Driving change

Introducing solar-charging to the electric vehicle fray essentially solves two problems in one — drivers don’t have to worry so much about where the nearest charging station is, as the car can constantly top itself up while parked. And drivers can also travel further without having to plug in, with Lightyear promising a range of more than 600 miles on a single charge. This is, of course, hugely dependent on individual driving habits, as well as the time of year, given that sunlight is pivotal.

Lightyear CEO Lex Hoefsloot debuts the company’s first solar car on June 9, 2022

Lightyear is scheduled to begin production of its Lightyear 0 (formerly called Lightyear One) car this coming fall, costing prospective buyers a cool €250,000. In tandem, Lightyear is also already working on the follow-up, the Lightyear 2, which is its full mass-market model that weighs in at a more affordable €30,000 — it’s expected to hit production in 2025.

Lightyear’s latest cash injection includes capital from a public consortium of backers that includes Invest-NL, an investment company set up by the Dutch Ministry of Finance in 2020, and private funds from the likes of SHV and Dela.

“In the current market environment, our technology has incredible potential for positive societal influence, so I see investments of this caliber as a testament to Lightyear’s product vision,” Lightyear CEO and cofounder Lex Hoefsloot said in a statement. “[Lightyear] remains on track to deliver the world’s first solar car and work towards a more sustainable future.”



Cultivated Biosciences wants to make plant-based dairy ‘feel’ more like the real McCoy

The vegan food market was pegged as a $27 billion industry last year, a figure that’s expected to more than double within a decade. This hasn’t gone unnoticed by the major food and beverage incumbents such as NestlĂ©, which launched a plant-based dairy line under the Wunda brand last year, while rival Unilever has been doubling down on its vegan offerings.

But any company looking to develop successful plant-based food alternatives often face challenges when trying to replicate certain goods traditionally made from animal-based ingredients. Dairy, in particular, has its problems, as recreating the “creaminess” without using real cream isn’t easy — and existing dairy-free solutions such as coconut oil or palm oil aren’t all that sustainable from an environmental standpoint.

This is something that Swiss startup Cultivated Biosciences is setting out to solve, through creating something akin to high-fat cream using a GMO-free yeast fermentation process.

Mouthfeel

Founded out of Zurich in 2021 by Tomas Turner and Dimitri Zogg, Cultivated Biosciences is one of countless companies working in a sustainable food space that’s working to reduce humans’ dependency on animals for sustenance, spanning everything from chicken and seafood, to sausages. Dairy is also garnering significant attentions from entrepreneurs and investors the world over, with the likes of Brown Foods recently raising cash to develop cell-cultured “cowless” milk in a lab, while Better Dairy and New Culture are using precision fermentation techniques to help provide the necessary milk proteins lacking in other dairy-free alternatives.

Cultivated Biosciences, for its part, is tackling the problem from a slightly different angle — it’s focusing squarely on the “texture” to help vegan food producers create goods that “feel” closer to the real McCoy.

“We are working on the fat and surrounding microstructure component that give dairy its amazing mouthfeel,” CEO Tomas Turner explained to TechCrunch. “We have developed a fat-rich ingredient that you can imagine as a 20% fat cream, with a mouthfeel and colour indistinguishable from dairy.”

In terms of how the company creates this, Turner said that they use a one-step process starting with oleaginous (oily) yeast, which it then ferments depending on the needs of its vegan dairy-brand clients and the specific products they’re making — whether that’s yoghurt, cheese, ice cream, or anything else.

“We can concentrate, dilute, or dry the cream, in a very similar way to how you process dairy,” Turner added.

To help take the product through the next steps toward commercialization, Cultivated Biosciences today announced that it has raised $1.5 million in pre-seed funding, money Turner said will be used to optimize its production process, carry out additional R&D, and enter product development trials with what will be its first customers next year, with plans to launch its first products starting shortly after. The company will also need to go through regulatory approval processes in its target markets, including Novel Food in the EU and GRAS (Generally Regarded as Safe) in the U.S.

“We will start doing test launches in 2024 in the U.S., expand in Europe in 2025, and continuously expand commercialization as we scale up production,” Turner said.

Cultivated Biosciences’ pre-seed round was led by Switzerland’s Wingman Ventures, with participation from Big Idea Ventures, Blue Horizon, Proveg International, among other backers.



Agritech company Cropin launches its cloud platform to digitize the agricultural industry

Backed by investors including the Bill and Melinda Gates Foundation and CDC Group, Cropin is set on digitizing the agricultural industry. Today, the company announced the launch of Cropin Cloud, a cloud platform with integrated apps. Founded in 2010, Cropin’s other products are live in 92 countries, it is partnered with over 250 B2B customers and has digitized 26 million acres of farmland. It claims the world’s largest crop knowledge graph of more than 500 crops and 10,000 crop varieties.

Krishna Kumar, the founder and CEO of Cropin, told TechCrunch that Cropin Cloud was developed because the agriculture industry does not have access to a “unified, coherent platform that can enable and help build a wide variety of solutions,” even as it faces disruptions caused by climate change, geo-political tensions, food supply chain disruptions and a growing global population.

“The global ag ecosystem is gigantic in depth and breadth, but strangely, the tools to capture and share data coherently are sorely missing,” he added.

Cropin Cloud can be used by agribusinesses of all sizes. It has three sub-platforms that allow farmers and other stakeholders in the food value chain to access tools for earth observation, remote sensing and data and machine learning to help them better manage crops and harvests.

Cropin's leadership team

Cropin’s leadership team

The first sub-platform is Cropin Apps, which covers a wide range of uses cases: global farming operations management, food safety measures, supply chain visibility, predictability and risk management, tracing food from the farm to table, research and development and production management. It also helps farmers track deforestation and carbon emissions.

Cropin Data Hub, meanwhile, gathers data from different sources for analysis, including on-field farm management apps, IoT devices, drones, remote sensing satellites and weather reports. And finally, Cropin Intelligence uses the company’s 22 contextual deep-learning and AI models to help agribusinesses with data points like crop detection, crop stage identification, yield estimates, irrigation scheduling, pest and disease prediction, nitrogen uptake and harvest date estimation.

Some examples of how Cropin’s technology has been utilized include Unilever’s work with coconut farmers who used the company’s SmartFarm Plus app to record information about how mature trees were, issues they were facing and productivity levels. The app then used that data to provide location-specific advice, like how much coconut sugar farmers were likely to produce.

Cropin also provided insights about the weather, crop management, pest and disease forecasts, nutrient management and soil and water management practices to the World Bank and Government of India in a project that spanned 244 villages, 30,000 farm plots and 77 crop varieties. Cropin says this resulted in a 30% average increase in yield and productivity, with nearly 37% increase in farm revenue.

Since its launch 12 years ago, Cropin has raised a total of $33 million. In addition the Bill and Melinda Gates Foundation’s Strategic Investment Fund and CDC Group, its other investors include ABC World Asia, Chiratae Ventures, Ankur Capital, Beenext and Kris Gopalakrishnan’s family office. Kumar said Cropin is now in the process of fundraising for its Series D round, and aims to raise investments in the range of $50 million to $75 million in the next six months.

Headquartered in Bangalore, Cropin has subsidiaries in the United States, Singapore and the Netherlands. Earlier this year, co-founder and COO Kunal Prasad relocated to the Netherlands to oversee European operations. Kumar says Cropin’s committed annual recurring revenue is $15 million to $25 million and that the company has grown 2.5x over the past few years, and expects to see similar growth this year. “With the launch of Cropin Cloud, we expect 2023 will be a game changer for Cropin in terms of revenue growth,” Kumar said.



Y Combinator, Global Brain back Tailor, a Japanese headless ERP startup

Tailor, a Japan-based back-end enterprise resource planning (ERP) platform, said today it has raised $4.3 million in seed funding from Y Combinator and Global Brain.

Founded in 2021 by Yo Shibata and Misato Takahashi, Tailor provides a headless ERP platform, meaning an ERP without a front end, instead delivering data from back-office systems like finance and procurement to other applications via API, Shibata told TechCrunch.

Legacy ERPs provided by companies such as SAP, Oracle and NetSuite (which is owned by Oracle) and local players like OBIC, are difficult to customize for users, according to Shibata. One of the reasons is that their systems are typically built for the world’s largest organizations, making them ill suited and expensive for small and medium businesses’ projects, Shibata said, often leaving these ERP customers frustrated by the vast number of features and the complexity of the user interface, he added.

Japanese enterprises have been suffering from high maintenance costs and slow development. The company says approximately 70% of the software industry spend in Japan goes to building customized products.

Shibata claims that Tailor’s API-first approach should make it easier for enterprises to integrate with another third-party SaaS tool and help users build their tailor-made internal tools faster.

Serial entrepreneurs Shibata and Misato have previously founded a retail-tech company Spotlight and sold it to Rakuten for $ 20 million in 2013. They reunited again last year for a bigger challenge, aiming to enter the global market with Tailor’s ERP platform and with the ambitious goal of reaching $1 billion in revenue.

The Japanese startup currently has one customer and 10 employees but plans to double its headcount to 20 employees by the end of this year. With the seed money, the company will enhance its product capability and developer onboarding features, Shibata said. Additionally, the company intends to prepare the product for developers in the U.S. and sell it in the U.S. market, aiming for 2023.

“We aim to transform the way to build the internal business software for enterprises,” Shibata said.



Solar Foods wants to replace industrial animal farming with a high-tech protein harvest

Fermentation has a long, rich history in food production, from beer and wine, to yogurt and cheese, leavened bread and coffee, miso and tempeh, sauerkraut and kimchi, to name just a few of the tasty things we can consume thanks to a chemical process thought to date back to the neolithic period. But if this 2017-founded Finnish startup, Solar Foods, has its way fermentation could have a very special place in the future of human food too.

The industrial biotech startup is working on bringing a novel protein to market — one it says will offer a nutritious, sustainable alternative to animal-derived proteins. The product, a single cell protein it’s branding Solein, is essentially an edible bacteria; a single cell microbe grown using gas fermentation. Or, put another way, they’re harvesting edible calories from hydrogen-oxyidizing microbes.

“Technically it’s like a brewery,” explains CEO and co-founder Dr Pasi Vainikka in an interview with TechCrunch. “Like fermentation technologies are. It’s not that strange [a process] — there is this one difference, which is the feedstock.”

The production of Solein requires just a handful of ‘ingredients’: Air, water and energy (electricity) — which means there’s no need for vast tracts of agricultural land to be given our to making this future foodstuff. It could be produced in factories located in remote areas or inside cities and urban centers.

Nor indeed are other foods needed to feed it to create an adequate yield, as is the case with rearing livestock for human consumption. So the promise looks immense. (As Vainikka argues: “Land use and energy use are the two main problems of human kind — and the rest follows from these two.)

Nutritionally speaking, Solein resembles some existing foodstuffs — sitting between dried meat, dried carrot or dried soy in terms of the blend of vitamins, amino acids, proteins (overall, it’s 65% protein), per Vainikka. “So it’s very familiar but it’s a bit [of a] new combination,” he suggests, adding: “The taste is very mild, very neutral.” (A mild taste may not sound especially scintillating for the tastebuds but it means it’s easy to include as an ingredients in a wide range of foods without the need for a strong flavor to be masked.)

While Solar Foods has essentially discovered a new species through its fermentation process, the microbe itself obviously hasn’t just appeared on planet Earth — and is likely very ancient; perhaps even hundreds of millions of years old. So there’s a fascinating blend of old and new coming together in the startup’s bioreactor.

Why is finding new forms of protein important? The problem Solar Foods is aiming to tackle is that the environmental costs of livestock-based meat production are indisputably massive — whether you’re talking unsustainable land and water use; climate-heating emissions and pollution; and animal welfare concerns. But what if you could produce billions of nutritious meals without the need to deforest huge swathes of land and slaughter masses of livestock to produce the food? What if humanity could feed itself and stop consuming the planet in the process?

That’s the promise and the core differentiator that Solar Foods claims vs animal-derived proteins.

Solar Foods bioreactor for producing Solein

A Solar Foods bioreactor for producing Solein (Image credits: Solar Foods)

If you compare Solein to the growing gaggle of plant-based meat alternatives, they do still rely upon land being farmed to produce the necessary plants — whether soy or pea or oat etc — that form the basis of their products. Although they need far less land than meat production requires so the environment upside is still very real. But Solar Foods sees itself blending into this competitive mix — selling Solein to companies producing plant-based foods as another ingredient they can use to cook up nutritious, environmentally friendly meals.

“Cereals, vegetables, fruits, herbs aren’t going anywhere,” says Vainikka, discussing how Solein might fit into an evolved food production system. “So if we go back to the original problem — 80% of all the problems that have to do with food, whether it’s loss of natural habitat or forest loss or whatever, has to do with the industrialized animal production… So actually Solein could solve 80% of the problem but 20% of the calories because mostly we are, on a calorie basis, eating carbohydrates.”

And if you’re excited about the promise of lab-grown meat — which is also seeking to de-link protein production from land use — Vainikka says the startup is supportive of such efforts since, once again, it’s spying potential customers as he says cultivated/lab-grown meat producers could use Solein to feed the cell cultures they’re using to grow slaughter-free steaks.

So use-cases for Solar Foods’ edible bacteria look broad, provided people are willing to eat it (or have it fed to something in their food chain). Conceivably it could even be used as a feedstock for livestock — although the startup’s messaging is focused on the need to transform a broken food system and enter “the era of sustainable food production”, as its website puts it.

It is also working on developing a closed-loop system in which the sole byproduct of its production process — water containing bits of the Solein protein — would be continuously recycled back into production of more of the foodstuff. And if it can pull that off, the edible bacteria could potentially function as a life support system for humans on space missions where the timescales are too long for astronauts to rely on food supplies brought with them from Earth (such as, for eg, a mission to Mars).

“The specific thing that we think is different in what we’re doing — compared to anything else on the market today — is that we don’t use any agriculture in the foods,” Vainikka tells TechCrunch. “Electricity and carbon dioxide are the main ingredients — instead of sunlight and carbohydrates or oils. So that’s the fundamental point where the disconnection of food production from agriculture happens.

“That’s our thing. And the reason to do that is once you can de-link the connection between use of land and land-use impacts and food production then basically all the environmental benefits fall on your lap that there can be in relation to food production.”

Down here on Earth, being able to unhitch food production from the vagaries of seasonal weather and other factors that can have major impacts on agricultural yields — such as pests, natural disasters, issues with supply chains specific to farming, and so on — is another touted advantage for Solar Foods’ approach. “Security of supply… consistency and quality,” says Vainikka, checking off some of the added advantages he says the edible protein offers vs traditional farming, i.e. on top of the massive heap of land-delinking-based environmental gains which could — for example — support a mass reforestation of farm land, promoting biodiversity and fighting global warming since trees suck up CO2.

Europe’s energy crisis bites

Solein looks like a no brainer on the environmental front. But one key component of its production — energy; electricity — is facing supply issues of its own in Europe at present, in the wake of Russia’s invasion of Ukraine. (Russia being a major but unreliable supplier of gas to Europe.)

Solar Foods’ long term bet is on energy production costs being brought down (or, well stabilized) by widespread access to cheap renewables — such as wind and hydro energy in the north of Europe and solar in the sunny south. Thing is, for now, the European energy markets are typically structured so that the wholesale price of energy is linked to the cost of the most expensive type of energy (fossil fuel derived), despite there already being a fair amount of renewable energy available which is far cheaper to produce. (Hence why if the price of gas goes up the wholesale price of energy rises, and the bill payer must pay more, even if their energy supplier sources their energy from cheaper to produce renewable sources.)

Since the Ukraine war started, Europe has been facing an exacerbated supply vs demand issue. And over the past several months it’s been hard for Europeans to escape energy price spikes as their governments have sought to reduce reliance on Russian gas imports — shrinking energy supply options and helping keep war-spiked wholesale prices high.

The coming winter looks very grim, with Russia recently electing to entirely shutter gas exports via its Nord Stream pipeline to Germany in what looks like an attempt to weaken Western support for the pro-Ukraine sanctions. So energy supply in Europe has become a weapon of economic war.

It’s an incredibly volatile situation but one thing is clear: Europe’s ‘competitive’ marginal-cost-based energy markets are in desperate need of structural reform — to reflect the cheaper production costs of renewables and ensure consumers and businesses aren’t at the mercy of fossil fuel volatility and cripplingly high prices linked to Russian aggression.

But, in the meanwhile, with electricity being a key component of Solar Foods’ process, the startup is having to manage what Vainikka — who has a background in energy economics that he says allows him to understand where the markets are headed — refers to with classic Nordic understatement as “turbulence”.

Solar Foods CEO, Dr Pasi Vainikka (left) and CTO Juha-Pekka Pitkanen

Solar Foods CEO, Dr Pasi Vainikka (left) and CTO Juha-Pekka Pitkanen (Image credits: Solar Foods)

He suggests Solar Foods may therefore need to wait out the current energy crisis before it’s able to scale commercial production of Solein in a way that’s economically viable — though it’s banking on Europe being able to find a way through to more stable electricity prices in the not too distant future. (In recent days, the Commission has said it will be coming with an emergency reform plan to curb energy prices — both in the short term and over the longer run, to ensure prices reflect cheaper renewables.)

“At the moment we shouldn’t make electricity supply agreements for our factory. We can’t be on the market today to make those agreements,” confirms Vainikka. “Because of this [energy price volatility] — it’s a fact. The second [thing] is we are quite happy that we are not fermenting natural gas — we are fermenting electricity. So we have an opportunity to make a good deal after turbulence.”

“We need to replace fossil fuels with electricity so we need a lot of new generation capacity which is also a problem in the market but we’re confident that this works,” he adds. “Unfortunately there is this turbulence now.”

Solar Foods is pressing on regardless of the current energy crisis.

It’s in the process of building its first factory — actually a demo facility, as a step on the road to future commercial scaling up of Solein production — at a cost of around €40M, drawing on backing from a number of VC funds since 2017, over seed and Series A rounds, as well as raising debt financing (such as €15M from Danske Bank Growth earlier this year).

The demo facility at least won’t have major energy requirements to run. (Although he says it’s still holding off on signing an energy supply contract for now.)

“We’ll manage the turbulence but of course it would be better for it not to continue too long,” says Vainikka. “We’re using this demo [facility] operated by one wind turbine to prove that this scales — but the real factories would be 100x larger in terms of energy use, 50x larger — and it would need rather 50 turbines to run a huge facility that will produce half a billion meals. Then you must get a good [energy supply] contract and if we were investing into that factory now it might be postponed because of the turbulence.”

Good food and food for good?

With the demo factory set to come on stream in 2023, Solar Foods’ hope is the first consumer product containing Solein will be on the market by the end of next year (or, failing that, in early 2024). Which global market will get the first commercial taste of the novel protein will depend on regulatory clearances.

Solar Foods has applied for clearance in multiple jurisdictions but can’t predict whether regulators in Europe or the US or Asia will be first with approval, given variances in this process. (But Vainikka says it’s possible the first clearance could happen this year.)

What the first product for sale to consumers that contains Solein will be also isn’t yet clear.

Vainikka suggests a few possibilities — such as that it could be added to existing foods like breakfast cereals or vegan meals for fortification purposes (owning to its vitamin and mineral content, such as iron and B vitamins); or as a main ingredient in plant-based meat replacement products, replacing stuff like pea protein. Or he says it could be used as an egg-replacement in pasta or pastry production. Or as a principle ingredient in ice cream or yogurt (or even to make a spreadable faux cheese).

“We leave the final formulation and product development for our customers so that we can empower them to renew categories,” he suggests. “And make having a food an act for good.”

Solein, a novel protein, shown integrated into a variety of foodstuffs

Image credits: Solar Foods

“Frankly as a company we think that it might be a good idea to focus on what we master — which is this conversion-fermentation; producing this ingredient and so that it would have the functionalities needed for food products,” he continues, expanding on Solar Foods’ decision to stay in its biotech lane. “There are so many, so huge, or so experienced or so old [food] companies on the market who have already access to the consumer, all the experience regarding textures, product development regarding all kinds of plant-based ingredients and so on. So when we introduce Solein into the market you would not only need to get everything right, what we are doing and mastering now, but also the final product — of course taste and texture is decisive.”

“So that’s a heavy investment program that we’ve dived into,” he adds, emphasizing the still extensive range of requirements for developing a product that’s designed even to be an ingredient in processed foods that people eat.

“Nutrition must be there… then second is safety, then functionality, of course — how it works and forms texture — and then scaling and production technology; who has it, how does it work, is it scalable, and how does the supply chain work — so who’s really the gatekeeper? So this we are in the middle of now… A lot will happen in the next 12-16 months,” he predicts.

While Solar Foods won’t be a food product maker itself it does have an R&D lab where it carries out culinary experiments with its product — and images on its website show a selection of demo foodstuffs, from chicken-style chunks served with pasta, to soup, bread and a breakfast smoothie, all with a distinctive rich yellow hue.

In its refined form — i.e. after it’s passed through Solar Foods’ electrolysing and fermenting bioreactors and been dried — Solein takes the form of a yellow powder (the hue is down to betacarotene which it naturally contains).

The strong color makes it looks a bit like a custom blend of turmeric and cumin. But taste-wise it’s nothing like that strong. Per Vainikka, one expert taster who sampled it suggested it was akin to dried carrot. But whether or not you’re a fan of carrots is besides the point; he emphasizes that the taste is mild enough that it can be easily masked in whatever food product it was being incorporated into — just without the added nutrients going anywhere.

For example, in the sample case of adding Solein to pasta, Vainikka says it would — nutritionally speaking — be akin to eating, say, a plate of spaghetti bolognese with all the nourishment derived from an animal-based ingredient but without the need to have any minced meat on the plate. Which, well, might take some swallowing for those used to consuming traditional (and oftentimes culturally significant) recipes. (An Italian I described this meat-less but nutritionally meat-like pasta dish to at a dinner party I attended recently was visibly shocked at the prospect and a second Italian she started to explain the concept to responded by suggesting we should focus on having fun eating the actual food on our plates instead of talking about, er, such high concept stuff, so, well, there may be some acceptance humps in the short term.)

But as plant-based faux meats advance in taste and texture it’s easy to envisage creative food producers being able to whip up something that has a meat-like taste and texture and — thanks to the addition of Solein — is also imbued with similar levels of protein, iron and vitamins as actual meat. And that could be a strong selling point for consumers, especially with the current food fad for high protein eating.

Other food ideas Solar Foods has been experimenting with in its labs are ‘cheese’ ball lollypops, mayonnaises and dressings, pancakes and plenty more besides.

Solein

Image credits: Solar Foods

Vainikka says he hopes the first commercial food to contain the ingredient won’t be a burger — since there are so many meat-alternative patty options out there already. But he suggests it could be a “meat like bite” — something akin to a nugget — such as might be be served in an Asian hot-pot or similar. “Then yogurt, ice cream, soup, bakery pastry application is something that might go first,” he postulates.

“You could imagine it could be a frozen food, fresh or even on the street kitchen of Asian city,” he also suggests, saying the startup is keen to branch out and “appreciate different food cultures on the planet” — so it can “try to explain how Solein could be an ingredient in different kinds of dishes from the Asian hot pots to burger patties to soups or pastries or whatever”.

Food is of course not only cultural but individual tastes can be hugely personal — and/or political. So once Solein leaves Solar Foods’ factories and arrives in customers’ commercial kitchens that’s where all these localizing product and branding challenges will really kick in — as buyers will have to work on figuring out how best to blend it in with other taste and cultural considerations or indeed make its presence stick out loudly (at least on the packet) where shouting about sustainability benefits might be the best way to reap big sales in their particular target market.

One thing looks clear: The future of food won’t be dull — or even uniformly yellow-hued. A full rainbow of possibilities for alternative eats are coming down the pipe — and the environmental challenges we face, as a species, demand we find appetite to consume them.



3 views: Meetings are bad, yo. Choose emails

It’s a long weekend here in the United States, meaning office workers, at least, get a three-day break from the dreaded meeting. We wanted to take this time to offer up an impassioned defense of … email.

Hear us out. It’s conventional wisdom that meetings are killers of productivity and morale and happy work environments. So why not write an email?

We know email has its drawbacks, too — it’s hard to manage and riddled with spam. But as work moves ever more online, it’s superior to meetings. Two inbox zeroers and one Chaos Muppet drowning in notifications — see if you can guess who’s who! — tell you why.

Ram Iyer: Do you love meetings, or do you just hate writing?

Back when I used to smoke, I also used to work at a publication that had frequent and immensely unproductive meetings. Most of our team of over 20 people would just sit by quietly for an hour while someone droned on about something.

If you’re counting the person-hours wasted, each of those meetings wasted an average of 20 hours that could have been spent doing actual work. They were unnecessarily stressful, too: I found myself desperately wanting to smoke after every single meeting, and I wasn’t alone.

Thankfully, that hasn’t always been the case. I’ve been fortunate to mostly have worked in companies that fostered a culture of just communicating via email or messaging. But in hearing my friends and ex-colleagues complain about work over the past couple of years, I noticed a trend: As the pandemic sent everyone home, meetings became ever more frequent to the point that people found them getting in the way of their work.

I’ve asked this question often over the past couple of years: If it can be an email, why isn’t it? Why are people so driven to speak when they could write an email and save everyone’s time?

I think I finally have a theory.



Metaverse Magna raises $3.2M at a $30M valuation to build Africa’s largest gaming DAO

This February, Africa and emerging market-focused Nestcoin raised a pre-seed round to build, operate and invest in its web3 applications, including crypto content platform Breach Club and gaming guild Metaverse Magna (MVM). Nine months after its launch last December, the latter has completed a seed sale token round of $3.2 million at a $30M fully diluted valuation. 

MVM, incubated in partnership with a multi-strategy blockchain investment fund, Old Fashion Research (OFR), welcomed participation from investors including South Korean video game developer Wemade, Japan-based blockchain-focused venture capital firm Gumi Cryptos Capital (gCC), HashKey, Tess Ventures, LD Capital, Taureon, AFF, Polygon Studios, Casper Johansen (Spartan), and IndiGG. In a statement, MVM said the funding will expand its efforts to build “Africa’s largest gaming DAO and provide gamers with access to world-class opportunities.”

There are over 3 billion gamers who spend $200 billion+ yearly on consoles and in-app purchases such as NFTs. Emerging markets, including Africa, account for 30% of this number; platforms like MVM see games as one way to introduce these millions of users to web3.

The gaming DAO publishes mobile games in frontier markets and creates developer tools for game creators to utilize emerging business models in Web3 gaming. It operates as an independent organization as part of the broader Nestcoin ecosystem, said Nestcoin CEO Yele Bademosi in an email interview when quizzed on why MVM had to raise money after the African web3 upstart closed a $6.45 million round this year. 

“Africa has the highest youth population globally, but over 60% of the continent’s youth are unemployed,” said Bademosi in a statement. “Gaming presents a unique opportunity to help young Africans earn and lift themselves and their families out of poverty. MVM’s seed sale token ensures opportunities for millions of gamers in these emerging markets..”

What started as a gaming guild offering play-to-earn scholarships to over 1,000 gamers to earn (up to $1,000 monthly, according to the platform’s pitch to users) from free-to-play web2 games and crypto games like Axie Infinity and Pegaxy has grown to a 100,000 member strong-community across an ecosystem including 2,000+ gamers, 10,000 Telegram and 20,000 Discord members. 

Meanwhile, MVM said it is building a soon-to-launch social gaming app, Hyper. At the same time, in the interview, Bademosi stated that the gaming DAO platform was working on launching 10 web2 games (mostly hyper-casual games across different genres), including Candy Blast — its version of Candy Crush — Wordler, Kong Clumb and Electron Dash.

While MVM doesn’t have a set date to launch its token to the public, Bademosi gives a tentative “12 months” response when asked. In addition, MVM tokens would remain locked for 12 months upon the Token Distribution Event and unlocked in quarterly installments for 30 months. The chief executive also noted that more details around the utility of the governance token for MVM would be released to the platform’s member community in due course as part of its “build in public” ethos.

“Gaming guilds will be one of the mainstream DAOs and play a pivotal role in game tokenomics. Partnership with MVM is an opportunity to expand the ecosystem of WEMIX [a global blockchain gaming platform developed by Wemade] in Africa, the continent with a rapidly growing market and a young population,” said Henry Chang, CEO of Wemade, in a statement.



Sunday, September 4, 2022

SkorLife gives control of credit data back to Indonesian consumers

Indonesia’s credit bureaus currently have about 92 million credit records, but the founders of SkorLife say many people have trouble accessing their own data. That’s why they built the app, which not only lets people see their credit histories for free, but also gives personalized advice on how to improve data. The Jakarta-based startup announced today it has raised $2.2 million in pre-seed funding.

AC Ventures participated in the round, which also included Saison Capital and angel investors like all the founders of OneCard; Advance.ai’s Jefferson Chan; KoinWorks’ Will Arifin of KoinWorks; Lummo’s Krishnan Menon; Evermos’ Arip Tirta of Evermos; Qoala’s Harshet Lunani; Init-6’s Willy Arifin; Lummo’s Krishnan Menon; Evermos’ Arip Tirta; Qoala’s Harshet Lunani; Init-6’s Achmad Zaky; and executives from Northstar Group, Stripe, Google, Boston Consulting Group, Gojek and CreditKarma.

SkorLife says the private, alpha version of its app has been downloaded more than 3,000 times and is growing organically by 50 to 60 new users a day. That surpasses its internal target by 7x and the app will be available for public download soon. The company’s new funding will be used on product development, new hires and marketing. SkorLife currently has 10 employees, with plans to increase headcount to 40.

CEO Ongki Kurniawan was previously country head of Stripe Indonesia and also held leadership positions at Grab, telcoXL Axiata and Line, while COO Karan Khetan is a serial entrepreneur whose past startups include 5x and BookMyShow Southeast Asia. The two met in 2018 while setting up a partnership between Grab and BookMyShow to offer ticketing services through Grab’s super app.

SkorLife founders Ongki Kurniawan and Karan Khetan

SkorLife founders Ongki Kurniawan and Karan Khetan

Kurniawan tells TechCrunch the two spent a lot of time exploring different ideas. The first was to digitize the “pawn broker”/secured loan industry, but the unit economics did not work.

“However, we found that many Indonesians resort to pawning their items because they believe they will get rejected if they approach banks,” he said, adding that seven out of 10 loan applicants do indeed get rejected. “This was further validated after speaking with a number of industry experts. We learned that Indonesia’s consumer borrowing pool is small.”

While doing their research, Kurniawan and Khetan also saw that many Indonesians don’t have access to their credit scores and other data that would help them see how banks determine their creditworthiness, which in turn means they lose the opportunity to access affordable loans.

SkorLife’s founders say that creditworthiness is underused in Indonesia, where most financial institutions score a person’s ability to get lines of credit based on their “income worthiness.”

“The thing to remember is not everyone who has high income will pay their debt and not everyone who has a low income will not pay their debt,” Kurniawan said.

Kurniawan said that most people in Indonesia are unaware they can access their own credit history and credit scores, and believe that only financial institutions and banks have access to that information.

If they do figure out how to access it, they have two options. The first is the free route, where they request data from OJK (Indonesian Financial Services Authority). But the problem with this is that they either have to go to an OJK office, or wait days for an online appointment. The second, paid route involves customers going to three licensed credit bureaus in Indonesia to get their credit reports. But these reports cost money, and Kurniawan says they are many pages long “and not designed to be digested by consumers because it is intended to be used by analysts in financial institutions.”

SkorLife solves those problems by giving people free access to credit scores they would otherwise have to jump through hurdles to get. Its main product is a credit builder application that enables people to instantly see and monitor their credit scores, credit reports and other data from credit bureaus, for free. It also helps users dispute inaccurate information on their credit reports. If someone doesn’t have a credit history yet, the app will help them start building scores.

Through the app, customers can see their BI Checking Score, or Indonesia’s nationally-recognized credit information that is used by almost all financial institutions to make credit decisions, as well as their credit score, which is generated by credit bureaus to determine the possibility of someone defaulting on a loan in the next 12 months.

They also see what factors go into their credit score, including their payment history, credit utilization, the balance versus their secured versus unsecured credit accounts, the age of each of their credit accounts, ID monitoring to see if a financial institution is doing a hard check on their data, the total number of credit accounts they have, both active and inactive, and outstanding balances.

That data is then used to create AI-based, personalized insights for each customer that they can use to improve their credit scores. The app also has educational content and a features that makes it easy for customers to dispute inaccurate data.

Some examples of insights include payment history, and allowing customers to check bill dates and set reminders, age of credit (or encouraging customers not to close a card that has been open for a long time), and utilization. SkorLife recommends that customers maintain a credit card limit utilization beneath 30% to improve their score.

In a statement, AC Ventures founder and managing partner Adrian Li said, “The opportunity in Indonesia is massive. Even as the space is relatively untapped, the consumer credit market size is already north of US$185 billion. That said, it has always been a challenge here because lenders have never been able to draw holistic conclusions about borrowers based on limited and fragmented information. But with these data troves just waiting to be unlocked and used meaningfully in a consumer-facing app, we are excited about SkorLife’s vision and mission of putting people back in charge of their financial futures.

 



Docquity, a community for healthcare professionals, raises $44M Series C

A call between doctors can save lives. That’s what Docquity co-founder Indranil Roychowdhury learned when his father was hospitalized with a life-threatening condition in India. An emergency room doctor initially told him that there was no chance of survival, but then another doctor called one of his peers in the United States, and they came up with an alternative treatment plan that worked. Docquity was created to help doctors collaborate in the same way, at scale, even if they live in different countries.

The Singapore-based company announced today it has raised $44 million in Series C funding led by returning investors Itochu Corporation, which put in $32 million. The rest of the round came from investors including iGlobe Partners, Alkemi, Global Brain, KDV and Infocom.

Roychowdhury told TechCrunch that after his father’s experience, he and his co-founders, Amit Vithal and Abhisek Wadhwa, wondered why “in today’s day of social media, it took a phone call to save someone’s life.” Docquity was founded in 2015 so doctors and other healthcare professionals have an easier way of working with one another.

The new capital brings Docquity’s total raised to $57.5 million. It says it is the largest community of healthcare professionals in Southeast Asia, with more than 350,000 doctors on board. The funding will be used to grow Docquity in its existing markets, like Indonesia and the Philippines, and enter new ones, including Japan, the United Arab Emirates, Saudi Arabia and Egypt. It recently launched in Taiwan, where more than 2,000 doctors have signed up so far. The company claimed two-fold revenue growth in 2021.

The company now has a team of 300 people and aside from its Singapore headquarters, also has a tech and engineering hub in Gurgoan, India, and other offices in Indonesia, the Philippines, Malaysia, Thailand, Vietnam and Taiwan.

In addition to giving doctors tools to connect and collaborate, Docquity has partnered with more than 250 medical associations in Southeast Asia to develop learning modules, which can be used to earn compulsory continuing medical education (CME) credits. The company says that so far, its platform has enabled doctors to earn a total of 4.2 million CME credits.

Docquity has three core features. The first, Docquity Academy, partners with universities and senior medical practitioners to create learning tools for doctors. The second, Docquity Clinic, allows doctors to have follow-up consultations with their patients. Finally, Docquity Insights takes data about user engagement on the platform to understand what they need.

Roychowdhury said that on average, about 50,000 doctors take courses on its platform every month, and that it was one of the first companies to launch online lectures and symposiums when the pandemic started in 2020. It now hosts about 500 lectures a month. Doctors taking the courses can also join private groups to discuss real world cases and the best treatment plans.

“While teaching and exam-style education is a key component, we believe that experiential learning through case discussions among peers in a major learning source for doctors,” said Roychowdhury.

Docquity ensures patient privacy through several measures. It’s a closed, GDPR and HIPAA-compliant network that only allows in doctors verified by medical associations. It has also set up internal compliance and pharma co-vigilance team to ensure privacy and security. It lets pharmaceutical and medical device companies to engage with doctors, but no advertisements are allowed on the platform.

Another Docquity initiative is making healthcare more affordable. It recently launched its Patient Adherence Program (PAP) to help doctors bring care to underserved patients. “Making treatments more affordable is a key objective of the platform and we have started working in breast cancer as a therapeutic area with one of our clients, and have already served close to 600 breast cancer patients in the Philippines,” said Roychowdhury.



These are the top 3 most important slides in your pitch deck

It’s a commonly accepted wisdom that you need between 10 and 20 slides to tell the story of your startup. A lot of founders don’t seem to realize that not all slides are the same, however. Some slides carry more weight than others — and three of them are absolutely crucial. Today, I’m taking you through why those three slides are so important.

The way to use this article is to think about which of these attributes you have in your startup to help organize your pitch deck. For example, No. 1 in this list is traction. If you have amazing traction, that should probably be the first slide in your deck. If your traction is flat (i.e., not growing, or even shrinking), poor or non-existent — maybe don’t highlight that and think instead about how else you can tell your story.

1 — Traction is king

Up and to the right. Which makes sense. Up and to the left would be time travel, and if you can do that, you have an even more valuable company than you thought.

Your traction slide is, by some considerable margin, your trump card. If you are showing a huge amount of revenue and rapid growth, all other sins are forgiven.

It doesn’t matter if you have an inexperienced team, a terrible product or a dubious market. If you can show that you have money coming in and growing at 9% or more week over week, you will raise money.

There’s a hierarchy in terms of what type of traction helps:

  • Profit. If you are cash-positive and growing rapidly, you probably don’t even need venture capital — but if raising cash helps you grow even faster, you’re in a great place.
  • ARR. If your annual recurring revenue is growing rapidly, you’re in luck. Recurring revenues and SaaS dynamics mean that you are onto something.
  • Active users. If you’re growing your number of users exponentially, without necessarily knowing how to monetize them, that’s still an impressive feat. If you can show that you can build a huge, sticky audience, you can probably find a way to make money off that down the line.
  • Sign-ups. If you’re seeing huge growth in the number of sign-ups to your product or service, but they aren’t generating revenue or sticking around, there’s still value in that — although your traction slide should be paired with a solid “How is this going to make money?” slide.


Brex’s departing CRO explains his decision to join Founders Fund

Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top — and make sense — of it so you can stay in the know. Let’s goooo! — Mary Ann

Hey, hey — this will be a slightly abbreviated version of this newsletter, as Monday the 5th is a holiday here in the U.S. and news was a bit slower than normal last week. But there ain’t no rest for the weary, so here we go!

On Friday’s episode of the Equity Podcast, Natasha, Alex and I discussed what a small world this venture community is.

Just hours after recording on September 1, we got wind of yet another example of this.

Forbes’ Alex Konrad reported that Brex’s chief revenue officer, Sam Blond, is becoming a partner at Founders Fund.

Now, executives or founders moving into full-time investing roles is not uncommon. But there were a couple of things about this news that made our ears perk up.

Earlier this year, Brex reached decacorn status with a $300 million raise. The buzzy startup began its life offering corporate cards to startups and over time has evolved its model to include “a big push” into software and serving larger enterprise customers with less of a focus on SMBs and bootstrapped startups. (The move was a bit of a controversial one that was met with surprise and some disappointment in the startup community.)

Now, if you’re a chief revenue officer at a startup that’s on a growth trajectory, it seems like, well, a bit of an unusual time to leave. Especially when Blond was reportedly one of the company’s first 20 employees.

Konrad wrote: “At the time, Brex had only a placeholder website and less than $100 in sales…four-plus years later, the business has several hundred million dollars of annualized revenue.”

Even more notably, though, Blond left Brex to join a venture capital firm that is an investor in one of the company’s biggest rivals in the corporate spend space, Ramp.

For the unacquainted, Brex and Ramp have gone head-to-head for years.

Blond told Forbes that he’d made the decision to begin “full-time startup investing” early in the year. According to the article: “He interviewed with several firms, but ultimately went with the one whose partner, Midas List investor Keith Rabois, had helped welcome him into the local tech scene. ‘I’ve always been impressed with Keith and, reputationally, Founders Fund,’ Blond says. ‘When I decided that I wanted to get into VC, it was obvious that Founders Fund was the top option for me to explore.’ ”

I reached out to Blond to get his take on the news from a fintech lens. He was about to board a plane but we did manage this quick Q&A:

TC: When exactly did you leave Brex?

SB: I’m still a full-time employee at Brex. My last day as a full-time employee is right before I start at FF. We went out and hired an amazing new CRO, Doug Adamic, to replace me, and I’ve been helping with the transition.

You told Forbes that you had decided to go into full-time startup investing earlier this year. What led you to make that decision, and how long were you angel investing?

I’ve been angel investing for about four years. I decided I wanted to do VC full time for a few reasons: (a) I’ve really enjoyed angel investing, have learned a ton, and believe I’ve been able to really help the companies I’ve invested in scale their go to market. (b) I’ve had success in joining two of the fastest-growing tech businesses (Zenefits and Brex) with some of the best founders around (Parker, Pedro, and Henrique). The combination of (a) and (b) give me some level of confidence that I will be good at being a VC (picking the right companies, and helping them scale revenue). (c) Brex has been a really incredible experience, and the success we’ve had will be difficult to replicate if I join another company. I’m ready and motivated for a new challenge.

What will be your focus at Founders Fund? Will you be investing in fintechs?

This question was answered by Founders Fund’s comms head Erin Gleason: 

EG: Sam will be a generalist investing across stages, sectors and geographies, like all our partners, but he’s particularly interested in early-stage enterprise deals.

What did you think about the fact that Founders Fund is an investor in Ramp, one of Brex’s biggest rivals? Is that an issue at all?

I view Ramp being an FF portfolio company as coincidental. It wasn’t influential in my motivation to want to join, and my focus will be on investing in and helping new portfolio companies. I’m very loyal to Brex and everyone I’ve developed close friendships with there.

You were one of Brex’s earliest employees. What are your thoughts on the company’s future?

I’m very bullish on Brex’s future. The team is incredible, and the strategy with Empower is differentiated and already seeing a lot of early success winning larger enterprise customers.

Image Credits: Founders Fund

Weekly News

Just how lucrative is the buy now, pay later (BNPL) market? asks TC+ editor Alex Wilhelm. “New data from Klarna and recent earnings results from Affirm make it clear that building a global business in the fintech space is far from inexpensive. The two companies, Affirm American and Klarna Swedish, are among the most valuable players in the BNPL market today. They’re both now nearly equal in value. And both recently reported financial results.”

Writes TechCrunch’s Ivan Mehta: “Block’s (formerly known as Square) Cash App is now letting users make payments on e-commerce sites outside the Square network. Until now, users could only make payments using Cash App Pay on Square terminals or online Square merchant partners. The company has partnered with American Eagle, Aerie, Tommy Hilfiger, Finish Line and JD Sports for the launch with more merchants like Romwe, Savage x Fenty, SHEIN, thredUP and Wish coming to follow in the coming months.”

While there were several interesting funding deals announced out of Africa this week (see the next section for more on those), our man on the ground, Tage Kene-Okafor, also wrote about how Kuda, a challenger bank based in Nigeria and the U.K., “has joined the ranks of tech companies in Africa that are pruning their workforce. The news of the layoffs, which was first disclosed to TechCrunch by sources, was confirmed by Kuda via email, saying it laid off less than 5% of its 450-strong workforce, or about 23 people…It was just last August that the digital bank, which provides zero to minimal fees on cards, account maintenance and transfers and is one of Africa’s soonicorns, raised $55 million.”

Fundings and M&A

Seen on TechCrunch

Solid banks $63M for easier deployment of embedded fintech products

Fintech startup Alloy leans on fraud prevention to land new $1.55B valuation

Landa can make you a landlord with just $5

Nigerian YC-backed startup Anchor comes out of stealth with $1M+ to scale its banking-as-a-service platform

Duplo digitizes payment flows for African B2B enterprises, gets $4.3M seed funding

Kenyan fintech Pezesha raises $11M backed by Women’s World Banking, Cardano parent IOG

Nigeria’s Grey raises $2M for cross-border payments play and regional expansion

And elsewhere

RentSpree secures $17.3M to expand rental management tools

Wealth management tech startup VRGL raises $15M to help firms acquire clients, manage proposals

Well, that’s it for this week. Once again, thank you for reading! If you’re here in the U.S., hope you are enjoying this long holiday weekend and getting some rest and relaxation. And if you’re not in the U.S., I hope you’re still getting some rest and relaxation. xoxoxo, Mary Ann



Saturday, September 3, 2022

It’s not just you: The freemium bar is shifting

Welcome to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily TechCrunch+ column where it gets its name. Want it in your inbox every Saturday? Sign up here.

In recent weeks, several companies tweaked the free tiers of their products, from Slack and Otter.ai to Google Meet and Heroku. This ties back into a crucial question for freemium businesses: When should you start charging? And does that look different in a downturn? Let’s explore. — Anna

No time for freebies?

Oh, how things have changed.

You are already used to reading this on The Exchange, whether we are talking about public markets, venture capital or macroeconomic indicators. But now there’s another sign of the times: Free tiers are becoming less generous.

An email I received from Google made it clear that we are in a very different mindset than when the pandemic started. To help us all stay connected,” the email read, “two years ago we offered the premium version of Google Meet to everyone and announced that we would temporarily not enforce the 1-hour time limit for group meetings. Beginning this month, group meetings with three or more participants will revert to having a 1-hour limit.”

If you’d like to host longer group meetings on Google Meet, you will have to sign up for a paid plan. In other words, Google is cutting down on its largesse.



Yes, your 5-year financial projections are going to be wrong. You need them anyway

When I was an early-stage founder, I bristled at the idea of making a five- or even three-year financial projection of my business. I can promise you one thing: It will be dramatically wrong. But as part of your fundraising, you need to make them anyway, and there are a couple of great reasons for that.

VCs understand as well as you do that you can’t predict the future. Hell, that isn’t just true for companies at the pre-seed stage; if founders could predict the future, there wouldn’t be so much nervousness around IPOs.

But it’s worth keeping in mind that your investors aren’t asking you to predict to the nearest penny how your company is going to perform in 2030. They are looking for two very specific things: Whether you understand how the financial dynamics in your business work and whether you are venture-scale.

Being venture-scale

To be venture-investable, you need to be “venture-scale.” That means that if an investor puts $1 million into your business, you need to have a very firm grasp of how you’re going to turn that $1 million investment into a $10 million return. Now, not every business is going to do that, of course, and it’s not easy to guess which businesses are going to successfully give investors a 10x return.

I can guarantee you one thing, though: If the financial projections show steady 10% year-on-year growth for the next decade, it may be a good lifestyle business, but it’s never going to give a 10x investment return.

In other words: Yes, your financial projections need to be “realistic,” in the sense that they show that there’s a logical progression from where you are to where you want to be. But you also need to show, in spreadsheets and numbers, that you at least have a fighting chance at being venture-scale. If your most optimistic, most aggressive growth trajectory falls short of this, you’re not going to have a good time as a VC-backed startup founder: It shows that you have fundamentally misunderstood why investors invest.

Understanding the financial mechanics

When you are raising money, you need to show your investors that you have clear plans for why you are raising money. In other words: What are you going to do with the money?



Indian agency searches fintech Paytm, Razorpay and Cashfree offices in Chinese loan apps probe

India’s financial crime fighting agency searched the offices of fintech unicorns Paytm and Razorpay as well as Cashfree on Friday as part of an ongoing investigation into fraudulent Chinese loan apps, it said Saturday, the latest in a series of probes in recent months.

The Enforcement Directorate said its searches at high profile Indian firms and businesses controlled by Chinese personnel were prompted by 18 complaints made to the Cyber Crime Police in Bengaluru. The complaints alleged the businesses’ involvement in “extortion and harassment of the public who had availed small amount of loans through the mobile apps.”

“During enquiries, it has emerged that these entities are controlled/operated by Chinese persons. The modus operandi of these entities is by using forged documents of Indians and making them as dummy directors of those entities, they are generating proceeds of crime,” the agency said in a statement (PDF).

“It has come to notice that the said entities were doing their suspected/illegal business through various merchant IDs/accounts held with payment gateways/banks,” the agency added.

The entities operated by Chinese personnel were generating “proceeds of crime through merchant IDs/accounts held with payment gateways/banks,” the agency said. There were discrepancies in the addresses where they were operating and what they had disclosed to the local authority, the agency said.

The agency said it seized an amount of $2.13 million from Chinese personnel-controlled entities and its searches are ongoing.

The government agency has performed over half a dozen probes into tech firms this year, including at Chinese smartphone vendors Vivo, Oppo and Xiaomi and seized more than $1 billion of capital that it said firms had evaded in fraudulent tax computations.

Last week, it also searched the premises of CoinSwitch, a top local crypto exchange backed by Andreessen Horowitz and alleged the Indian firm acquired shares of over $200 million in violation of local forex laws, TechCrunch reported earlier.

The Enforcement Directorate also froze assets worth over $8 million from WazirX last month, citing suspected violation of foreign exchange rule, and $46 million from the local entity of Vauld for facilitating “crime-derived” proceeds from predatory lending firms.

Indian authorities are cracking down on lending apps that are charging exorbitant fees and using unethical means to collect the payments back. India’s central bank is moving ahead with new guidelines for digital lending that will mandate firms to provide more disclosure and transparency to benefit consumers as well as restrict several business practices.

Google said last month that it has blocked over 2,000 unethical lending apps in India this year.



5 investors discuss what’s in store for venture debt following SVB’s collapse

There are many questions around the implications of Silicon Valley Bank’s (SVB) collapse that won’t be answered for a long time. But there’s...