Fintech Roundup: Better.com workers leaving in ‘droves’ in wake of CEO Vishal Garg’s return

Welcome to my new weekly fintech-focused column. It’s an incredible time to be a financial technology journalist. Besides the fact that over 20% of all venture dollars last year went into fintech startups, I am particularly excited about the many ways that this technology is helping boost inclusion all over the world. While this pandemic has sucked on 100 different levels, one good thing to have come out of it is that consumers and businesses have forced more fintech to exist, and that’s a good thing. 

I’ll be publishing this every Sunday, so in between posts, be sure to listen to the Equity podcast and hear Alex Wilhelm, Natasha Mascarenhas and I riff on all things startups!

There has been plenty of drama at online mortgage lender Better.com over the last couple of months and it appears that just because its infamous CEO Vishal Garg is back at the helm, there is still no shortage of controversy surrounding the company. Earlier this week, Axios’ Dan Primack revealed that investor SoftBank, “in its apparent zeal to back the company,” promised to give Garg the 1.9% voting rights tied to its original investment, “contingent on the final settlement of certain legal proceedings (which has not yet occurred).” For those who haven’t been following this saga, Garg has received a ton of negative press for his unfeeling way of laying off 900 people over Zoom, berating his own investors over email and accusing employees of being “lazy” and “dumb dolphins.” 

We’ve all been wondering how this man can still be running the show and perhaps SoftBank’s conditions help explain it. Meanwhile, one former staffer tells me that Better employees are so upset that Garg is back, that they are leaving the company in droves. Reportedly, employees at every level – from loan officers to senior executives (some of whom are believed to be leaving potentially millions of dollars in equity on the table). As the employee told me, “It’s an astonishing fall from grace. It would not be a stretch to say that the top talent and hundreds from every department have fled in the wake of Zoomgate.”

Image Credits: Better.com CEO Vishal Garg / LinkedIn

But that’s not all. Now that Garg is back, he is apparently paranoid about things being leaked to the media and according to one employee, he and the rest of the execs still there “have put everything on lockdown.”

For example, engineering managers were said to have had an AMA (Ask Me Anything) with Garg and only in-person workers were allowed to attend. Those employees had to sign NDAs and place phones in paper bags, and there were even metal detectors to make sure no one had recording devices. Also, the company has reportedly disabled sharing of Google documents internally and they’ve blocked access to all companywide dashboards – likely because business has probably suffered dramatically. As the employee put it: “There’s no transparency into anything. Vishal doesn’t trust anyone.”

Now let’s talk about payments

Small businesses might soon be able to accept payments using their iPhones without the need for extra hardware, according to this piece, which cites Bloomberg. This is interesting because if true, Apple could be viewed as taking on Square in the contactless payments space. I found all this particularly intriguing because in October, I wrote about a startup named MagicCube – which is backed by the likes of Visa – that is building technology that will impact Android users.

Image Credits: MagicCube

That company’s software-based tech gives merchants a way to accept card payments on any consumer device with no reader or extra hardware required. CEO and co-founder Sam Shawki told me in October that he believed his startup “will be the dominant party on the Android side, which is 85% of the universe.”

Last week, Shawki told me he has an even greater vision when it comes to contactless payments:

Apple’s entry into the payments’ acceptance market will ignite the space for sure. But there is an even better vision of softPOS acceptance that goes beyond Apple’s: one that is built on an open platform, where all devices and all card networks are welcome, payment data is truly secured to the highest standards, and platforms are easily scalable. A broad ecosystem of technology pioneers, payments networks, issuers, and acquirers are developing a softPOS solution that extends beyond any company’s walled garden.

In this vision, merchants own their own data. On any device and operating system, softPOS is easy to implement, and requires no certifications. Expensive, dedicated devices become obsolete.. As these technologies proliferate in everyday life, we’ll witness the advent of the Internet of Payments…Together, sooner than you might think, the newcomers will unseat the incumbents. The meteor is about to hit. And we’ll all be better off for it.

The fact that more companies are making it easier to pay without contact is not surprising and welcome as that spells security and convenience for users. It will be exciting to watch how this all plays out.

Notable rounds and a new fund

Our Nigeria-based startups reporter, Tage Kene-Okafore last week wrote about Esusu, a New York-based fintech company that targets immigrant and minority groups and provides rent reporting and data solutions for credit building, that raised $130 million in a Series B round led by SoftBank Vision Fund 2. The investment gave four-year-old Esusu a valuation of $1 billion, making it one of the very few black-owned unicorns in the U.S. and globally (love to see this list growing!). Esusu co-founders and co-CEOs Nigerian-born American Abbey Wemimo and Indian American Samir Goel come from immigrant homes and say they experienced firsthand financial exclusion. That led them to start Esusu in 2018 in an effort to build the credit scores of immigrants and African-Americans and “leverage data to bridge the racial wealth gap” via rental payments.

Esusu

Tage also covered NALA, a Tanzanian cross-border payments company that recently pivoted from local to international money transfers, and its recent $10 million seed raise. The startup’s mission is to build the “Revolut for Africa.” You can read all about it here.

Besides Esusu, last week saw yet another fintech unicorn being born. CaptivateIQ, which claims to automate commission workflows using AI, raised its third round in 20 months. Less than 10 months after raising its $46 million Series B, CaptivateIQ raised $100 million in a Series C round at a $1.25 billion valuation. The San Francisco-based startup, which has developed a no-code SaaS platform to help companies design customized sales commission plans, says it “more than tripled” its revenue compared to the year prior, although it declined to provide hard revenue figures. A trio of firms co-led CaptivateIQ’s latest investment, including ICONIQ Growth and existing backers Sequoia and Accel.

In M&A activity, investment banking firm UBS picked up financial robot-advisor Wealthfront for $1.4 billion in an all-cash deal. Alex unpacked the deal for us here.

Unsurprisingly, Latin America continues to be a hotbed of fintech activity. I covered Brazilian lender Creditas’s $260 million Series F funding that valued the company at $4.8 billion. That’s up from the fintech’s $1.75 billion valuation at the time of its $255 million raise in December 2020. Fidelity Management led the latest round. One of the most interesting things about this company, besides all the cool services it provides (including offering Latin Americans a way to borrow money at a MUCH lower interest rate than traditional banks offer) is share all its financials! Seriously, the extent at which this company shares the details of its finances is something to be admired and we wish all startups would follow suit.

Image Credits: Creditas

Impressively, in the third quarter of 2021, Creditas says it notched US$46.8 million in revenue – up 233% from $14 million in the 2020 third quarter. It has been focused on growth, so it is still reporting a loss. But founder and CEO Sergio Furio told me that he projects annualized revenue of about $200 million for 2021. Not bad at all! I’m excited to watch this one keep growing.

I also covered a new fintech fund started by a true fintech influencer and all-around nice person, Nik Milanović. For over two years, Nik has been putting out a newsletter called This Week In Fintech, working at Google Pay and angel investing. Most importantly, he’s been building a true community of fintech enthusiasts all around the world. Now he’s putting his money where his mouth is and launching his own venture fund, called simply The Fintech Fund. Nik is trying to raise $10 million for his fund, which has a bunch of cool LPs including investors who put money in fintech startups through other vehicles (such as Bain Capital, Better Tomorrow Ventures and Cowboy Ventures’ Jillian Williams) and a several founders including NerdWallet co-founder Jake Gibson and The Block’s Mike Dudas. Also, I love the fact that the fund  has an explicit target of over 25% or more of its dollars and total number of investments going to founders from underrepresented backgrounds. I mentioned inclusion up top and it’s worth noting that Nik is big on it too. GO NIK!

Image Credits: Founder Nik Milanovic / The Fintech Fund

That’s it for now. I hope you had as much fun reading this as I did writing it. Now, go enjoy what’s left of this weekend!

The return of the lean, green startup

Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.

The market is down. The party is over. And Peloton of X startups aren’t too happy right now.

As tech stocks take a hit, the big question on my mind is how a dip in market performance impacts early-stage startups. There’s the obvious argument here that startups have been preparing for a re-correction, and that market highs were knowingly unsustainable, but just because expectations exist doesn’t mean that ripple effects float away.

Despite investor’s outward rationalization, the red, or millennial pink, flags are not going unnoticed, with some firms lowering revenue expectations even at the earliest stages. On Equity this week, Alex and I interviewed Bessemer growth partner Mary D’Onofrio, who admitted that her expectations for exit multiples have changed, and that the IPO window is mostly closed. The stocks may be sane, but that’s still kind of sad, right?

D’Onofrio is seeing rounds taking longer, VCs asking more questions and the return of full due diligence (which, for anyone who has been reading this newsletter, is music to my paranoid ears).

My take, after speaking to a handful of venture investors and founders, is that we’re going to see the return of the lean, green startup. In the past, stock market dips may have caused a retraction in venture capital dollars, leaving startups to crumble under lack of capitalization. In today’s market however, there’s never been more capital in the venture world.

A venture-backed early-stage startup has an elusive line to toe, because a decline in valuations isn’t a decline in capital. I expect to see founders with cash in the bank take on a leaner mindset, maybe spending more conservatively or thinking about runway again. Vernacular will change: If becoming the “Amazon of X” isn’t the smartest target, founders could instead focus on building out key capabilities that will help them survive an even bigger slowdown. It may be a while before a founder tells me that their capital is offensive, not defensive.

The return to normalcy feels foreign, but that’s because we’ve been in wonky times for an extended period of time. Going forward, I am paying attention to how startups speak about growth in the coming months. You’re raising money, but is it to hire, develop, acquire or just be able to exist?

For my full take on this topic, check out my latest TechCrunch+ column: 3 views: How should founders prepare for a decline in startup valuations and investor interest? I’d also love to know how you’re reacting to the news, so tweet me @nmasc_ and change my mind.

In the rest of this newsletter, we’ll get into education’s emotional pivot, fintech proactiveness and some insidery buzz in the VC and startup world.

Education’s inevitable pivot to emotion

I wrote a TechCrunch+ story about edtech’s inevitable pivot to emotion-based learning. In the story, I explore how three venture-backed companies — Wayfinder, Empowerly and Learnfully — are navigating the longstanding challenges of personalized education with fresh takes.

Here’s why it’s important: For education enthusiasts, personalized learning isn’t a new phenomenon, it’s simply a rebranding of adaptive learning. What’s fresh, then, is that newly venture-backed startups are cooking up products that look at students beyond their grades and scores. Edtech entrepreneurs are betting that the future of learning depends on understanding the more subjective traits of learners, which feels hard to argue with. The tension ahead, though, is how to apply a venture-like mindset to something as hard to scale as a sense of belonging.

Other lessons:

• Mentor Collective shakes off its boots to scale student support services
• European, North American edtech startups see funding triple in 2021

Image Credits: Dual Dual (opens in a new window) / Getty Images

Deal of the week

Parthean recently raised $1.1 million at $12 million valuation to build a personal finance company that educates users, and helps them track their finances at the same time. The big vision behind it, per co-founder and CEO Arman Hezarkhani, is the idea of pro-active learning.

“Anyone who tells you that people want to learn, largely they are wrong,” he said. “[Founders] want to believe in the best of humanity and that people are going to dedicate time to wanting to learn something, but we always come back to this vitamin versus painkiller problem.” A big area where this exists prominently is in finance, he argues, leaving consumers in a spot where they need a financial platform that helps them when they have a fever (overspend) instead of when they’re feeling ambitious (after their New Year’s resolution).

Here’s why it’s important: By combining edtech and fintech, Parthean has an opportunity to track a metric that traditional education companies are unable to measure: connection rates. Part of Parthean’s progress is measured by whether users, after they complete a crypto course, end up doing the action item that’s tacked onto the end of the lesson, whether it’s setting up a crypto wallet on Coinbase or growing a credit score.

It can only do that because it has your spending information, but that sort of integration could lead to fascinating outcomes. It’s less about consumption, and more about creation.

Honorable mentions:

• Inside Iyin Aboyeji’s plan to build charter cities for African tech
• Mark Cuban on his online pharmacy: ‘Our KPI is how much we can reduce the stress of our patients’
• Esusu becomes unicorn with SoftBank Vision Fund 2-led $130M funding
• Domestika raises $110M on a $1.3B valuation to expand its learning community for creative types

Image Credits: Peshkova (opens in a new window) / Getty Images

In the DMs

• Hustle Fund is raising a $50 million third fund, per SEC filings. This would be Hustle Fund’s second swing at an investment fund of this size, with its second fund ultimately missing the mark and closing at $30 million.
• Clubhouse is building out a child safety team, which could work on “establishing new investigation procedures, developing new safety features or researching the latest child safety regulations,” per a job listing. The social audio platform, which has attracted significant investor and user interest, has been scrutinized for its inaction on the moderation front, giving the hiring goals likely more haste than usual.
• Y Combinator wants to invest more in software tooling for its admissions process, both from a platform perspective for applicants and for a triage flow so reviewers can wade through the data set to find signals. That’s good, given Y Combinator’s batch size admissions and the fact that there are only five people on the admissions team.
• Speaking of YC, its favorite competitor On Deck appears to be taking another swing: On Deck Daily, a forum for techies to chat (or, if you really think about it, a Hacker News competitor). It’s also building a Startup School.

Across the week

Equity, the tech news podcast I co-host alongside Alex Wilhelm and Mary Ann Azevedo, is going live! Join us for a virtual, live recording of our show on February 10th — tickets are free, puns will come at the cost of our producers’ sanity.

Seen on TechCrunch

How one founder is putting the power of home ownership back in the hands of actual homeowners

Atlassian acquires Percept.AI

10,000 subscribers later, This Week in Fintech has a venture fund

Joby Aviation wants to conduct dramatic eVTOL flights over San Francisco Bay

Seen on TechCrunch+

Why Robinhood is getting hammered today

Hard cash and soft skills: How to successfully manage an acquisition

How our SaaS startup broke into the Japanese market without a physical presence

More tech drama, please

Dear Sophie: 3 questions about immigration and naturalization

Crypto pioneer David Chaum says web3 is ‘computing with a conscience’

Until next time,

N

TechCrunch+ roundup: 2021 edtech report, UBS-Wealthfront deal, falling startup revenue

I could spend hours discussing early-stage startup operations and community-based marketing, but deal flow is my blind spot.

But when investment banking firm UBS picked up financial robot-advisor Wealthfront for $1.4 billion in an all-cash deal this week, I noticed.

“At those prices, the company’s exit price is a win in that it represents a 2x or greater multiple on its final private valuations,” wrote Alex Wilhelm in The Exchange. “But its exit value is also parsable from a number of alternative perspectives: AUM, customers and revenue,” he added.

Examining each of those factors in turn, Alex found that the deal is more than just a “next-gen push” intended “to reach rich young Americans,” as some headlines suggested.

This exit will help other fintechs set expectations, but it should give a mental boost to anyone who thinks they’re too late to start up in this space.

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Full TechCrunch+ articles are only available to members
Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription

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Just over 56% of Americans own stock, but that figure is still several points lower than it was before the Great Recession more than a decade ago. With more consumers buying crypto and fractional shares today, I’d say the robo-advisor race is still doing a parade lap.

Alex, who swims through deal flow like a carefree dolphin, agrees with me — to a point:

The recent declines in active users on platforms like Robinhood, and the success of fintechs like M1 in the last few years could point to a market more open to robo-advising, but the question is whether their lower-cost model can prove sufficiently interesting to investors.

Wealthfront, for example, takes a 0.25% cut of consumer funds. Robinhood I think was doing a bit better when we considered its PFOF incomes against lower-value customer accounts that were actively trading.

Can the robos present a financial picture that is similarly strong? If they can, they will likely prove less volatile than Robinhood has to date.

We’re essentially in agreement: it’s never too late for a good idea.

Thanks very much for reading TechCrunch+ this week!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

Unpacking the UBS-Wealthfront deal

European and North American edtech startups see funding triple in 2021

Image Credits: Bet_Noire (opens in a new window) / Getty Images

Pre-pandemic, VCs were notoriously reluctant to invest in education-related companies. Today, edtech startups are seeing higher average deal sizes, more seed and pre-seed funding from non-VC investors, and an influx of generalists.

According to Rhys Spence, head of research at Brighteye Ventures, funding for edtech startups based in Europe and North America trebled over the last year.

“Exciting companies are spawning across geographies and verticals, and even generalist investors are building conviction that the sector is capable of producing the same kind of outsized returns generated in fintech, healthtech and other sectors,” writes Spence.

European, North American edtech startups see funding triple in 2021

Here’s how far VCs have lowered revenue expectations for seed through Series B

Image Credits: Matejmo (opens in a new window) / Getty Images

Valuations are soaring, but revenue averages for SaaS startups “have seen a recent and rapid decline,” according to a Kruze Consulting report Alex Wilhelm studied yesterday.

The revenue growth goalposts for early-stage startups wanting to fundraise have moved closer in the past couple of years, which means investors are now willing to pour money into companies with slower growth than they were earlier, Alex wrote.

“In all, startups are getting paid better, faster for less work than before. It’s a great time to raise, but a pretty awful time for venture capitalists trained in an era when they got more equity for their dollar.”

Here’s how far VCs have lowered revenue expectations for seed through Series B

Dear Sophie: 3 questions about immigration and naturalization

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

My F-1 OPT will run out this June. My employer has agreed to register me in the H-1B lottery in March.

What are my options if I’m not selected in the lottery?

—Gritty Grad

I’m in the U.S. with an L-1A visa that will max out later this year. My wife has been with me during the whole period on an L-2. Can my wife apply for H-1B this year?

Would she need to leave the country to activate it?

—Helpful Hubby

I have a 10-year green card that will expire later this year. I’ve been married to a U.S. citizen for 11 years, but we are in the process of divorcing.

Can I apply for U.S. citizenship even after my divorce?

—New Year, New Life

Dear Sophie: 3 questions about immigration and naturalization

IBM shrugs off investor EPS concerns, sells growth story

Madrid headquarters of IBM International Business Machine, the American multinational of informatics and technology consulting services, Spain, November 2012. Image Credits: Cristina Arias/Cover/Getty Images

IBM’s earnings report was received positively, but when CFO Jim Kavanaugh declined to share the company’s earnings per share expectations on a post-earnings conference call, the stock quickly tanked.

The stock recovered the following day, but the blip was newsworthy, since a narrow focus on offloading some assets, expanding growth and free cash flow puts IBM on track for further growth, analysts told Alex Wilhelm and Ron Miller.

“Good to see IBM finding back the growth that has eluded the vendor for longer than any investor would have liked,” said Holger Mueller, an analyst at Constellation Research.

“But a small ship can sail faster, and with Kyndryl and Watson Health assets being offloaded, it will help make IBM sail faster.”

IBM shrugs off investor EPS concerns, sells growth story

In blow to unicorns, the global IPO market continues to soften

Image Credits: Nigel Sussman (opens in a new window)

It’s still a great time to be a startup founder. Specifically — an early-stage startup founder.

WeTransfer’s parent, WeRock, delayed its IPO earlier this week, becoming the latest major software firm to shelve its plans to go public after JustWorks.

Before that, a bevy of SPAC IPOs that many hoped would shoot to the moon instead drifted off course after launching.

These signals, taken with several others, suggest that this might not be the best time to go public, wrote Alex Wilhelm and Anna Heim in The Exchange.

“Are the good times ending?”

In blow to unicorns, the global IPO market continues to soften

Edtech startups flock to the promise and potential of personalized learning

Image Credits: Getty Images/smartboy10/DigitalVision

Everyone learns differently, but parents, teachers and schools tend to forget that vital fact in the classroom.

The enforced changes brought by the pandemic, however, have led some teachers and parents to realize that personalized learning is key to education, especially in the case of neurodiverse students.

As a result, a new wave of startups have appeared that promise to deliver curricula that adapts to a student’s emotional or educational state, reports Natasha Mascarenhas.

“The pandemic’s extended stay has caused edtech entrepreneurs – and society – to view learning outcomes as broader than job placement and exam scores,” she wrote.

Edtech startups flock to the promise and potential of personalized learning

3 views: How should startups prepare for a post-pandemic dip?

Image Credits: Bryce Durbin/TechCrunch

If the public markets were a swimming pool, it would still be open for business, but there’d be signs warning newcomers that the water has gotten a bit chilly.

Natasha Mascarenhas, Mary Ann Azevedo and Alex Wilhelm, the trio behind the Equity podcast, shared their predictions about what’s in store for startup funding and due diligence in 2022:

• Natasha Mascarenhas: ‘The Lean Startup’ has aged with an asterisk
• Alex Wilhelm: Money over bulls**t
• Mary Ann Azevedo: Don’t try to be all the things

3 views: How should founders prepare for a decline in startup valuations and investor interest?

Crypto pioneer David Chaum says web3 is ‘computing with a conscience’

Image Credits: PATRICIA DE MELO MOREIRA (opens in a new window) / Getty Images

In 1982, computer scientist David Chaum wrote a dissertation that described a blockchain protocol, along with the code for implementing it.

Since then, his cryptologic research has led to developments like digital cash and anonymous communication networks. This week, he launched xxmessenger, which the company describes as the first “quantum-resistant” messaging app.

When we asked him what has changed in the past few years, Chaum said, “Seems to me that Bitcoin and the like have created something that could no longer be ignored. Now the question is: How can it be brought to the general public in a way that they can readily adopt this next generation of information technology?”

Crypto pioneer David Chaum says web3 is ‘computing with a conscience’

To cool down China’s overheated robotics industry, go back to the basics

He Huang Contributor

He Huang is a partner at Northern Light Venture Capital supporting early-stage enterprise companies.

It’s been a tumultuous few years, but China’s manufacturing industry is now on the rebound. Once an industry characterized by low-end manufacturing and intensive labor, it has transformed into a high-end manufacturing hub aided by technology.

Automation and robotics has the potential to modernize China’s manufacturing while improving labor efficiency and alleviating labor shortages. Predictably, companies and investors want to capitalize on this trend.

Robotics has been a hot sector for a while, but its popularity has shot up over the past couple of years. The sector recorded investments and financing of $6 billion in 2021, according to statistics from market research firms, and is expected to double in size in five years.

However, it’s unknown when these investments will provide a suitable return. Robotics is experiencing the biggest bubble in China’s venture capital industry, and is riddled with speculation and overvalued companies. Compared with similar investment bubbles over the last 10 years, this one is larger in scale, longer in duration, and could be more devastating than any before.

The price-to-earnings ratio is no longer applicable for many listed companies, and the market-to-sales ratio has also gone out the window. He Huang

However, the “bust” is entirely avoidable. Investors and companies need to go back to business basics and resist the industry’s typical impatience for exits on both sides of the negotiation table.

Understanding the market

With the influx of capital investment, we’re seeing a partial and cyclical overheating of the market in China. Many investors caught in this investment tide are replicating the software investment model, because many institutions that invested in Internet startups are also aggressively entering this field.

So what’s behind this surge? Everything from China’s government policy to the launch of the Science and Technology Innovation board, which has opened a convenient exit channel. Compounding the surge is the drive to upgrade China’s industrial structure.

It’s crucial, however, that investors do not apply software investment rules to industrial technology investments. For one, the investment to exit period is different. Investment in robotics and other industrial technologies is relatively long-term compared to internet companies. Internet companies can go public in three to five years after investment, but industrial technology firms are likely to take twice as long or more to go public.

Thinking about starting a business? Make TechCrunch Early Stage your first step

The idea of starting your own business can be overwhelming — often to the point of paralysis. Here’s the thing: You’re not alone. Here’s the other thing: It doesn’t have to be that way. If that drive to be your own boss won’t let you sleep at night, then TechCrunch Early Stage is an absolute must-attend event.

Whether you’re looking for sage advice, expert resources, a better understanding of the business-building process or a supportive community of like-minded “want-repreneurs,” you’ll find that and more at TC Early Stage, a summit designed for founders in the very beginning stages of business development.

Be there live and in-person only:

This event takes place IRL on April 14 at Pier 27, our expansive San Francisco venue. Meeting real people face-to-face is an essential (not to mention fun) part of building a business network, especially when you’re just starting out, and we’re ready make it happen as safely as possible. Read our COVID vaccination policy before you buy your pass.

Hot tip: The sooner you buy your ticket, the more money you’ll save. We only have a few more tickets available at the $199 price. Get ’em quick, because when they’re gone the price goes up — buy your TC Early Stage pass now, and you’ll save $350.

Here’s what you can expect to experience at your day-long adventure in learning. Three concurrent tracks offer expert-led workshops and smaller, more intimate roundtables focused on a range of topics, like how to build your brand, outside-the-box ways to raise or bootstrap, hiring talent, legal issues and a whole lot more. Even the TechCrunch editorial staff will be in the house to offer their insight on market trends and provide tips that might help you score invaluable media exposure.

Here’s another big bonus. We’re limiting the total number of tickets to ensure attendees have both access and time to talk with the experts and get real-time feedback — on issues with their fledgling companies or how they can take their idea and monetize it.

TechCrunch Early Stage takes place on April 14 in San Francisco. It’s been a long time coming, but now’s the time to mask up and get down with other determined individuals and unleash your inner entrepreneur. Buy your pass today and save $350.

Is your company interested in sponsoring or exhibiting at Early Stage 2022? Contact our sponsorship sales team by filling out this form.

India’s Moglix valued at $2.6 billion in $250 million funding

Moglix has more than doubled its valuation to about $2.6 billion from $1 billion just eight months ago as the Indian industrial business-to-business marketplace aggressively scales its offerings in many parts of the world.

Alpha Wave Global (formerly called Falcon Edge Capital), which led the seven-year-old startup’s previous funding, has returned alongside Tiger Global to co-lead a $250 million Series F financing round, the startup said.

Hong Kong-based Ward Ferry also participated in the round, bringing its all-time raise to about $470 million. As part of the new financing round, Moglix has given an 80x exit to some of its early seed-stage investors, it said Friday.

Founded by IIT Kanpur and ISB alumnus Rahul Garg, Moglix operates a B2B marketplace and procurement platform for manufacturing goods that could be anything from a centrifugal pump to a fan to routers and pulse oximeters.

“We are happy to have the continued support and faith of our investors, customers, suppliers and team. We are excited to welcome Ward Ferry onboard. We are focused on our mission to enable creation of a $1 trillion manufacturing ecosystem in India,” said Garg in a statement.

“We will continue to invest in building technology and supply chain capabilities to enable growth of the manufacturing and infrastructure sector. Moglix will increasingly focus on growth driven by supply chain financing, acquisition of the right partners and global expansion.”

The startup says it serves 500,000 small, medium-sized businesses and enterprises.

It has established over 3,000 manufacturing plants across India, Singapore, the U.K. and the UAE and counts manufacturing giants such as Hero MotoCorp, Vedanta, Tata Steel, Unilever and Air India and NTPC among its customers.

The startup, which counts Sequoia Capital India among its backers, runs a supply chain network of 16,000 suppliers, over 40 warehouses and logistics infrastructure. With close to 700,000+ SKUs on its platform, the startup claims to be the largest e-commerce platform of industrial goods in India.

News outlet DealStreetAsia first reported about the round, citing regulatory filing.

This story was updated to add confirmation and additional details from the startup.

South Korean proptech startup Zigbang acquires Samsung SDS’ smart home IoT business

Zigbang, a South Korean proptech startup that provides real estate transactions service, announced on Thursday that it will acquire Samsung SDS’ home internet of things (IoT) unit to make a foray into the smart home industry. 

Samsung SDS sells the smart home IoT division, which is the only B2C business Samsung SDS has, in order to focus on its B2B. Its main products include digital door locks and wall pads that connect to users’ smartphones. In 2016, Samsung SDS tried to sell the smart home IoT unit to Ireland-based company Allegion but couldn’t reach an agreement, as reported. 

IoT is not an easy business because the margins are thin at best, so one player that wants to be in it for the long term is scooping up its rivals in a bid for more economies of scale.

The startup expects to create technological synergies and increase its market share by acquiring the smart home IoT business.

“By combining Zigbang’s residential contents with Samsung [SDS]’ home IoT hardware, we will revolutionize the smart home market,” CEO of Zigbang Sung-woo Ahn said in a statement.

The acquisition will enable Zigbang to enter the global smart home markets and accelerate its growth because Samsung SDS’s IoT unit is currently generating solid revenues in more than 16 countries, vice president of Zigbang Sunwoong Lyuh told TechCrunch.  

The startup, which signed the acquisition agreement yesterday, aims to complete the deal in the second quarter of this year, Lyun said.  The company declined to comment on the acquisition deal valuation. The deal size is estimated at $85 million (100 billion KRW), based on media reports. 

Zigbang wants to digitize everything about living space with technology, from real estate transactions to smart home devices. The company also plans to enter the self-storage and home inspections and repairs services.

Why it matters having Matter support for your new smart home device

Zigbang has been on an acquisition-expansion spree since 2018.

The startup acquired HogangNoNo, a Korean proptech startup, in 2018, WooZoo, a co-living platform, and Sugarhill, a commercial brokerage platform, in 2019. It also made an acquisition of Movill, a residential management service platform, last year. 

Zigbang claims a total of 33.5illion users with 8.1 million monthly active users. It currently has 600 employees. 

It reached a $574.2 million (700 billion KRW) won valuation in July 2019 when it raised the latest funding $132.5 million (160 billion KRW), bringing its total funding raised to date $187.7 million (226.5 billion KRW). Zigbang was valued at $908 million (1.1 trillion won) in June 2021, based on a report released yesterday by the South Korean Ministry of SMEs and startups. 

Korean proptech startup Dongnae gets $4.1M seed extension led by NFX

Korean proptech startup Rsquare raises $72M Series C to fuel its expansion

Edtech startups flock to the promise and potential of personalized learning

The rise of remote instruction left many parents freshly aware of (and annoyed by) the shortcomings of Zoom school, but for Letha McLaren, COVID-19 brought an epiphany: the importance of a headset.

McLaren’s son, who deals with executive dysfunction, was better able to focus through the screen because he used a headset that blocked out some other noises. With the device, he could hear what the teacher was saying at all times, and better yet, was keener on paying attention. McLaren, in turn, learned what her son, a straight-A student, responds best to.

The broader takeaway for McLaren was that traditional classrooms don’t serve all students due to learning and thinking differences. So, she teamed up with longtime friend Suchi Deshpande to help a market of parents who found themselves in a similar boat, trying to find a better format for educating their children. Learnfully is a personalized learning platform that connects neurodiverse students, who have conditions such as ADHD or dyslexia, with specialists to pinpoint strengths and weaknesses.

Personalized learning has long had a halo around it. After all, an adaptive curriculum that changes based on a student’s emotional or educational state feels pretty sensible. Why not adapt learning on a student-by-student basis, instead of applying the same curriculum to everyone within a class? The easy answer, of course, is that it’s easier to scale the latter, and the former requires more money and time from end-users.

Startups such as Learnfully, along with Wayfinder and Empowerly, are breaking into the market with fresh takes on what it means to prioritize a student’s emotions in personalizing education. While consumers and venture capitalists certainly understand the vitality of personalized education like never before, these startups are navigating the longstanding challenges of true integration.

 

Closing the feedback loop

Innovating on traditional learning often requires retooling supplemental services for students outside of the classroom. McLaren explained that Learnfully is focusing less on the “what” of learning and more on the “how.”

“Students may struggle in math, but it’s because they don’t understand the building blocks which permit them to do some math programs – and so we really focus on the foundation, which oftentimes boils down to literacy.” The co-founder said the “educational therapy” approach helps Learnfully differentiate from classic tutoring platforms like Wyzant — part of the reason it was able to close a $1.25 million seed round a few weeks ago.

Daily Crunch: 4 years after launch, fintech platform Esusu saddles unicorn with $130M Series B

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Hello and welcome to Daily Crunch for January 27, 2022! Today’s news is a pretty positive roundup. New fund? Oh yeah. Huge rounds? You bet. We even have new unicorns to discuss. On the other side of the coin, the IPO market appears more ossified than open. – Alex

The TechCrunch Top 3

• Facebook’s stablecoin bet proves unstable: So much for Facebook – er, Meta – taking over the blockchain world with its own stablecoin. The assets of Diem, for which Meta was a key consortium member, are reportedly being sold for a few hundred million dollars. Cheap? No. But also a fraction of the hopes that the project once had.
• The new seed, Series A and Series B benchmarks: How far have the standards shifted for early-stage startups when it comes to revenues? The good news is that we have the data. The bad news is that it’s mostly what you expected – startups are raising larger, later rounds with less revenue than before. Growth, it turned out, was the more surprising delta to examine.
• New funds! TechCrunch has notes on a number of new funds out today that are worth digging into. This Week in Fintech has a fund now, and Portugal’s Indico Capital Partners has €50 million for its ocean tech fund. There are others. South Korean internet conglomerate Naver Group has a $100 million fund for what TechCrunch described as “metaverse creators.” It’s amazing how fast that word became ubiquitous, and therefore passé.

Startups/VC

We have a host of mega-rounds to chat through today, but first some words of warning: It appears that the IPO climate is frozen shut.

What that will mean for companies like Esusu, which just raised $130 million, or Ascend, which just raised $280 million in equity and debt for its BNPL-flavored approach to insurance, is that there is a mountain of private-market wealth out there that needs an exit. The question is just when those checks can be cashed. And if they will get more than a dollar back per dollar invested.

IPO issues or not, the crypto world is busy taking on more external capital. One particular play in the blockchain world is the infrastructure effort, building products that will support other products. This is often a good bet. Twilio is an example of the infra game coming up trumps. AWS is another. So when another crypto backend player like Fireblocks pushes its valuation to $8 billion, we know what’s going on. (And speaking of crypto, don’t forget the impending tax issue or the startups working to keep folks off the government’s naughty list.)

And now, our regular funding round rundown:

• Quan wants to take on employee churn: There are two kinds of employee exits, from the corporate perspective: regretted churn and unregretted churn. The former is when someone you wanted to keep quits, and the latter is when someone you wanted to fire does you a favor. Quan, which just raised capital, wants to tackle the former by, we report, bridging the “gap between engagement surveys and well-being perks.”
• Bloss is building a company for expecting parents: With birth rates in decline in many parts of the world, it’s clear that we’re in a new era when it comes to parenting. A time when it’s more choice than default. Bloss wants to link expecting parents with experts, which makes good sense, given that babies don’t precisely come with a handbook when they enter the world. The company just raised a pre-seed round.
• Parthean will teach you personal finance whether you like it or not: That’s slightly unfair, but the idea behind Parthean is that most folks aren’t great with money and need help. So, it is going to teach users concepts and then prompt them to take a particular action toward, in theory, financial health. Natasha’s story here is great, and worth reading if you are curious about the intersection of edtech and fintech. The company just raised $1.1 million.
• The.com is a website builder with a great URL: Short URLs were mega-hype back in the day when you had to have a .com or live a life apart from the consumer spotlight. Things have since changed. But The.com is taking us back to the ’90s with its great name and product: website building. But unlike the template-focused builders of the past, this time the company is using “blocks.” As someone with both websites and no coding skills, this appeals to me.
• The Vets is a bet that you want the vet to come to your step: Flush with $40 million in new capital, The Vets wants to make animal care an at-home affair. As someone who has spent far too much time in the last year standing outside his local vet, waiting for a certain puppy to finish her checkup while, variously, burning up in the summer and freezing in the winter, I love this idea.

And there was more. France’s Sigfox, which raised more than $300 million, is dead. A Quizup founder is building an MMO, and PortalOne raised $60 million for its “immersive” gaming platform. Whew! What a day!

Dear Sophie: 3 questions about immigration and naturalization

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Dear Sophie,

My F-1 OPT will run out this June. My employer has agreed to register me in the H-1B lottery in March.

What are my options if I’m not selected in the lottery?

—Gritty Grad

Dear Sophie,

I’m in the U.S. with an L-1A visa that will max out later this year. My wife has been with me during the whole period on an L-2. Can my wife apply for H-1B this year?

Would she need to leave the country to activate it?

—Helpful Hubby

Dear Sophie,

I have a 10-year green card that will expire later this year. I’ve been married to a U.S. citizen for 11 years, but we are in the process of divorcing.

Can I apply for U.S. citizenship even after my divorce?

—New Year, New Life

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Dear Sophie: 3 questions about immigration and naturalization

Big Tech Inc.

• LG Energy Solution goes public: The IPO market is closed, but there are always exceptions. Such is the case with LG’s electric vehicle battery maker. For obvious reasons – the global car industry is racing toward an all-electric future as quickly as its aging leaders can manage. And all those cars are going to need batteries. The company is now worth a little more than $98 billion.
• Messenger updates its E2E encryption: While governments around the world continue to try to find enough backbone to make the comically bad choice of banning encryption, Meta is moving along with its work to make its Messenger service more secure. Good!
• And if you have longed to pay for yet another streaming service, the good news is that Disney+ is coming to 42 more countries later this year.

TechCrunch Experts

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Testimonial: “Their UX expert review (i.e., user observations) of our application showed that the average time on one of the tasks was around 50 seconds. The resulting recommendation was to introduce a shortcut, which after implementation reduced the average time-on-task to 20 seconds.”

Atlassian acquires Percept.AI

Atlassian today announced that it has acquired Percept.AI, an AI company from Y Combinator’s summer 2017 batch that offers an automated virtual agent support solution — a chatbot, basically — based on a proprietary AI engine for natural language understanding. Atlassian plans to integrate this virtual agent technology into Jira Service Management, its tool for helping IT teams provide better service to employees and customers.

Ahead of today’s acquisition, Percept had raised a seed round for an undisclosed amount from the likes of Hike Ventures, Builders VC, Cherubic Ventures, Amino Captial, Tribe Capital and Y Combinator, according to Crunchbase. The two companies did not disclose the financial details of today’s acquisition.

Image Credits: Atlassian

There can be little doubt that Atlassian is investing heavily in Jira Service Management. In 2020, the company acquired Halp for its Slack-first help desk ticketing service, in addition to Mindville, an enterprise asset management firm. Last year, it picked up ThinkTilt for its no-code/low-code form builder specifically to strengthen Jira Service Management (and that’s on top of a number of other acquisitions around the Jira ecosystem in recent years).

Edwin Wong, Atlassian’s head of Product for IT Solutions, told me that the company isn’t just betting on acquisitions to expand the service, though.

“It’s not just about inorganic investments. There’s a whole host of organic things that we’ve done […],” Wong said. “The goal really isn’t just to buy something and plug it in, it is about a more deliberate strategy — to think about what fits well and then build on top of what has been created and create that sort of unified experience into one product. So it’s not really about, ‘hey, here’s six different things’ and then for our customers to have to think, ‘oh, what do I need to do pull them together?’ It is about creating those integrated experiences.”

Image Credits: Atlassian

It’s no secret, though, that IT teams are under more pressure to deliver great customer service than ever, something the pandemic isn’t making any easier, while their customers, even in the enterprise, expect a consumer-like experience. Ideally, a product like Percept.ai would be able to deflect the vast majority of tier-1 support questions, provide users a great experience and free up IT teams to focus on more complex tasks.

That’s the goal of a product like Jira Service Management and, as Wong noted, the service now has over 35,000 customers that come from virtually every industry.

Wong said that what drew the team to Percept was its engine’s ability to understand a lot of the context behind a support query. It can analyze the content, intent and sentiment and — combined with the user profile — is able to provide a personalized response. When the virtual agent has reached its limits, it’ll automatically transfer the interaction to a human. Teams can set up and tweak the service using a no-code tool, another feature that made Percept attractive to Atlassian.

The company plans to natively integrate the technology into Jira Service Management. But Atlassian also plans to expand the service’s capabilities.

“Our broader vision, if we look at it a little bit further out, it is to create what we think of a unified platform for any form of support and service desk. That’s really our goal at the end of the day,” Wong explained. “We believe that expanse really covers all sorts of different products, different capabilities. As an example, why can’t we draw from the knowledge of say a Confluence space or article in order to help answer some of those questions? Why can’t we draw from, for example, maybe a Trello board? So absolutely, when we made this acquisition, it is part of our broader long-term vision across Atlassian to deliver great experiences for our customers.”

Since this acquisition came together rather quickly (Wong said the companies started talking at the end of last year), it’s not quite clear what the future holds for existing Percept.AI customers.

Atlassian acquires Halp to bring Slack integration to the forefront