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As we move deeper into a cloud-centric world, everything was supposed to get easier, but in truth there’s a lot of moving parts, and companies need help getting everything to work. This takes people with a particular set of skills to help clients with tasks like integrations, managing hybrid and multi-cloud environments and getting data where you need it.
Tecera, a new venture capital firm launching today wants to attack this problem by investing in companies that can act as helpers and consultants. In a world where venture capital tends to gravitate mostly towards software and hardware, this is a distinctly different investment thesis.
Chris Barbin, founder and CEO at Tecera knows quite a bit about this. He was one of the founders at Appirio, a consulting firm founded way back in 2006 when cloud computing as we know it today was just getting off the ground. His former company had the vision and the foresight to start a firm to help companies use new tools like Salesforce, Google, Workday and AWS. Wipro bought the company in 2016 for $500 million after it had raised over $117 million, according to Crunchbase data.
Barbin believes that today, the level of complexity has only increased, and there will be a growing need for what he calls this people power to make everything work, and that takes a specialized kind of investor. “There’s been a flurry of investment activity into professional services-based companies over the last couple of years, but there’s never been an investment firm that is exclusively focused on these types of businesses,” Barbin explained.
During the firm’s research phase, the founders identified key platform companies like Salesforce, Twilio, Snowflake, DataDog and Cloudflare, and they estimate that there are between 7500 and 10,000 consulting companies supporting companies like this. “The goal of the firm is to help create a kind of a powerhouse for those emerging [platforms], or a firm or two that actually has the collection of those [SaaS platforms] in their toolkit,” he said.
The company will be targeting established firms with revenue between $5 and $20 million with aspirations to grow into the hundreds of millions, and will be doling out investments of between $5 and 20 million of capital per bet.
The firm is just getting started, but plans to have 8 employees by mid-year. Barbin indicated at least one investment was already in the pipeline, but wasn’t ready to give details just yet.
Source: https://techcrunch.com/2021/01/28/tecera-launches-with-225m-to-fund-cloud-consulting-firms/
New wellness startup Heights is formally launching this week, focusing on a category it describes as ‘braincare’. The startup will market “ultra high quality, sustainable plant-based supplements that feed your brain” based on what it says is scientific data.
It has raised a $2 million Seed funding round (£1.7M) via the Seedrs crowdfunding platform, with the round also including the institutional investor Forward Partners. Angel investors include Tom Singh (founder of New Look), Damian Bradfield (WeTransfer), Dhiraj Mukherjee (Shazam), Renee Elliot (Planet Organic), and celebrity investor Chris Smalling (an England and Manchester United professional footballer).
The funds will be used for customer growth and new product development, including soon-to-launch a ‘psychobiotic‘ probiotic aimed at cognition and mental health.
Customers first take a ‘brain health’ survey, then sign up for a monthly, quarterly, or annual subscription.
Customers need only take two capsules a day, thus hugely decreasing the complexity of juggling regular vitamin taking.
The product fits through a letterbox and the unusual bottle was designed by the well-known product design agency Pentagram. A content and coaching program included in the subscription helps customers, and another brain health survey happens after a month. Heights claims that “93%” improve their brain health score within one month.
Heights is not alone in this new market for what some describe as ‘designer vitamins’ and the arena is already populated by the likes of Hims / Hers, Motion, Vitabiotics and Bulletproof.
These companies broadly fall into the “Nootropics” category — vitamins and minerals designed to improve cognitive function, memory, creativity, or motivation, in healthy individuals. But the market is not small. The ‘self care’, ‘healthcare’, and ‘personal development’ market is worth over $1Trillion but supplements alone is worth at least $100BN+.
Heights founders Dan Murray-Serter and Joel Freeman, with adviser Dr. Tara Swart.
However, co-founder Dan Murray-Serter says Heights is aiming to do something different to the aforementioned players.
In a text-based interview, he said: “Nootropics as a category really focus on quick fixes, which is why we’re working on the category creation of ‘braincare’ because there are no ‘quick fixes’ in life, and that terminology and category have essentially set people up with the same false hopes as ‘get-rich-quick’ schemes do. We’re set up differently — aka, starting with scientifically researched articles and journal references.”
He said Heights will be positioned more like a skincare or haircare brand, “because people understand that the daily habit/practice is what creates the longevity and impact, not just a one-day miracle.”
Murray-Serter says there are 20 key nutrients science says our brains need to thrive, and these are mostly found in a combination of buying multivitamins, omega 3s, and ‘nootropics’. He says Heights has sourced the “highest quality” ingredients in the most ‘bioavailable form’ in a patented capsule which makes it easier to digest for the body.
“One of the most common reasons the habit of taking vitamins doesn’t stick for people is that the bottle goes into a cupboard and gets ignored. So we started with design alongside quality,” he says. The Heights vitamins come in a distinctive, recyclable bottle which Heights will also aven recycle if you send it back to them.
Murray-Serter, who previously founded the mobile startup Grabble, says he came up with the idea for the startup after a bout of chronic anxiety and a 6 month-long period of insomnia. The problem was solved by high-quality, high-density vitamins and supplements, as opposed to normal supplements which usually only have the lowest recommended daily levels of vitamins inside them.
After starting a newsletter on the subject of optimizing cognitive performance with cofounder Joel Freeman, the pair amassed a following of 60,000 readers www.yourheights.com/sundays
and then came up with the idea of launching the actual product.
The company now has a ‘Braincare‘ podcast that has reached 100,000 downloads, and the founders have also been joined by key team member Chief Science Officer, Dr Tara Swart (pictured).
Two things may help Heights. Firstly, in the era of Covid-19, public health authorities and governments around the world have recommended taking Vitamin D to boost the body’s immune system should someone fall prey to the disease. It’s not insignificant that two Heights capsules contain 400% of the ‘Nutrient Reference Value’ (formerly known as Recommended Daily Allowance) of Vitamin D3, as well as many other supplements. Theoretically, one could take four normal tablets of this, but the customer experience and other added vitamins in Heights will appeal to many. Secondly, the growing awareness of mental health and interest in maintaining good mental health is now a regular subject of public discourse. So Heights appears to be well-positioned to ride both those waves.
While the pandemic has left some startups strapped for cash, the aptly-named Brazilian neobank Nubank is swimming in it. This morning, the company announced that it has raised a $400 million Series G round, putting their total funding to date at $1.2 billion. But even more remarkable, in addition to their new $25 billion valuation (up from $10 billion in 2019), is their customer base of 34 million users, which they’ve built up since the fintech’s launch in 2013.
“We’ve gone from 12 million customers in 2019 to 34 million solely based on word of mouth,” said David Velez, the company’s co-founder and CEO. By September last year, the company was onboarding 41,000 new customers per day. NuBank prides itself on having a $0 customer acquisition cost. Velez said the startup spends what would be marketing money on “great salaries” and superior customer service, which in turn creates “fanatic” customers who share their love for the brand with others.
The new valuation places NuBank as the fourth most valuable financial institution in Latin America and the largest digital bank in the world by the number of customers and app downloads.
The round was led by both private and public investors including Singapore’s GIC, Whale Rock, and Invesco. Current investors Tencent, Dragoneer, Ribbit Capital, and Sequoia also participated in the round. Velez is a former Sequoia partner and is originally from Colombia though he attended Stanford University and worked in the U.S. for many years.
NuBank, based in São Paulo — the financial capital of Latin America and home to 12.8 million people — has expanded to Colombia and Mexico and plans to use the new funding to flesh out its operations in those markets while continuing to build out its product offerings in Brazil.
What started as a credit card company now functions as a full-service bank, minus the cumbersome bank branches, which is one way the company has been able to allocate its funding primarily toward growth.
“People were really done with being mistreated and paying high fees,” said Velez, speaking to Brazil’s notoriously bureaucratic and dreadful banking experience (liken it to going to the DMV, but regularly). Historically, to pay your monthly bills in Brazil, you had to go to a bank branch and wait in line — often outside in the heat — until it was your turn. The lines wrapped around the block like that of an Apple Store upon the release of the latest iPhone.
“It’s like they are doing you a favor by opening an account for you and then charging you 450% interest rate per year,” said Velez. “Our bet was that people would really like to be treated like humans,” he added.
In 1994, when the Brazilian real currency was introduced, it was pegged at 1:1 with the U.S. dollar. However, in recent years, with the country’s largest corruption scandal in history which saw three consecutive presidents jailed, impeached, and incriminated, respectively, the economy has plummeted. And COVID-19 certainly hasn’t helped. The exchange rate is now 1 USD to 5.40 BRL. With low exchange rates in Brazil, Colombia, and Mexico, a $400 million USD investment creates a sizable runway, especially since Nubank’s Brazil operation has been cash-flow positive since 2018.
The company is known for reaching the unbanked population in Brazil, especially those who simply weren’t in the financial position to get a credit card. Traditional banks are present in about 80% of Brazilian municipalities, but considering that Nubank’s app-based product is location-agnostic, it’s able to reach 100% of the municipalities, the company said. In addition, it’s been helping Brazilians build credit. Its Barney-purple credit card starts at a monthly limit of $50 reals per month (roughly $10 USD). If a customer pays on time the first month, their credit continues to increase over the following months.
Amongst its slew of products, Nubank also offers a debit card and savings account, and while it doesn’t have branches of its own, money can be withdrawn from network ATM’s, as is common in the U.S.
“Nubank was born out of the conviction that people deserved better, more transparent and human financial services that would allow them to be in control of their money and their future. We started seven years ago in Brazil, a country with one of the most concentrated banking sectors in the world, and we were able to free millions of people of the bureaucracy and the pain. Through technology and human customer service, we were able to have a positive impact on their daily lives,” said Velez.
The UK’s competition regulator will make a decision on whether or not Facebook’s purchase of Giphy has a ‘realistic prospect’ of substantially lessening competition by March 25, it said today, as it continues to scrutinize the acquisition.
“The Competition and Markets Authority (CMA) hereby gives notice pursuant to paragraph (b) of the definition of ‘initial period’ in section 34ZA(3) of the [Enterprise] Act that it has sufficient information in relation to the completed acquisition by Facebook, Inc of Giphy, Inc, (the Merger) to enable it to begin an investigation for the purposes of deciding whether to make a reference for a Phase 2 investigation,” it writes.
“The initial period defined in section 34ZA(3) of the Act in relation to the Merger will therefore commence on the first working day after the date of this notice, ie on 29 January 2021. The end of the initial period and the deadline for the CMA to announce its decision whether to refer the Merger for a Phase 2 investigation is therefore 25 March 2021.”
The Competition and Markets Authority launched a probe of Facebook’s $400M acquisition of the GIF-sharing platform back in June 2020.
The investigation put a freeze on Facebook’s ability to continue activities related to integrating Giphy into its wider business empire — such as integrating products or teams or working on business deals or contracts together — despite having already been completed the acquisition.
Facebook confirmed its plan to acquire Giphy in May 2020 — when it also announced its plan to integrate the platform into its photo and video sharing app, Instagram.
But those plans remain on ice as a result of competition scrutiny in the UK. (Last June Facebook and Giphy confirmed they were complying with the CMA’s order to pause integration activity.)
It’s another sign of the growing regulatory friction that tech giants are facing when they seek to grow via acquisition. Last year, for example, European regulators also spent months eyeing Google’s Fitbit acquisition — although they did finally clear the deal in December. But only after obtaining a number of commitments from the tech giant related to how Fitbit data could be used and rivals’ access to APIs.
In the Facebook-Giphy case, the UK watchdog will make a decision in March on whether to open a deeper and broader Phase 2 investigation (after which it would need to issue a final decision).
It could also decide at that point that there is no ‘realistic prospect’ of a substantial lessening of competition as a result of Facebook acquiring Giphy and conclude its intervene — lifting the bar on continued integration between the pair.
The regulator also has discretion to choose not to open a Phase 2 investigation for other reasons, such as if it believes the market is not of sufficient importance to justify the deeper dive or that benefits to customers from a merger outweigh any negative competitive effects.
Given the acquired business in this case is a platform for swapping reaction GIFs it certainly seems possible the CMA may decide that a deeper dive isn’t merited. But we’ll know more in a couple of months.
Whatever happens, regulatory concern linked to Facebook’s grip on the social web has already delayed its plans for Giphy by well over half a year — and the probe may yet drag on for longer — impacting its ability to move fast (and break things).
Source: https://techcrunch.com/2021/01/28/uks-competition-watchdog-still-eyeing-facebooks-giphy-buy/
