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Over the years, there has been a growing trend of fintech infrastructure players around the world. In Africa, a handful of startups have launched in the past three years to provide such services. Stitch, a South African fintech startup, is one of them and today, it is coming out of stealth and announcing its seed round of $4 million. This makes it the largest round raised by any API fintech startup in Africa at the moment.
Founded by Kiaan Pillay, Natalie Cuthbert, and Priyen Pillay, Stitch wants to provide full API access to financial accounts across Africa starting from its first market, South Africa. With its API, developers can connect apps to financial accounts. This allows users to share their transaction history and balances, confirm their identities, and initiate payments.
We’ve seen a wave of API-led financial services companies proliferating around the globe. Plaid leads the way in the U.S. Sweden-based fintech Tink has also been dominant across Europe, while Truelayer and Belvo are holding the forte in the UK and Latin America.
These companies provide engineering and developer tools that reduce the technical and operational effort needed for apps to connect to their users’ financial accounts. By way of APIs, they make it possible for other companies to integrate what are otherwise complex services to build from the ground up simply by adding in a few lines of code.
Like other financial infrastructure company, Stitch services allows companies and developers to innovate around other services like personal finance, lending, insurance, payments and wealth management.
The founders draw on prior experience building API products for local markets in the past. In 2017, Kiaan Pillay worked as the head of operations for South African insurance API platform Root. He left a year to Smile Identity, a San Fransisco-based identity API company. There, he worked with fintechs across Africa and discovered they faced infrastructural issues around compliance and identity.
The Stitch team
At the same time, Pillay, Cuthbert — who was the CTO at Root — and Priyen were looking to build a Venmo for Africa, but after eight months, they soon discovered the solution was crappy. However, one feature on the platform seemed to work for the fintechs with infrastructural issues.
“We got to the point where we could build any payouts for our clients so users could link and cash out their bank accounts,” Pillay tells TechCrunch. “We decided to automate this process using screen scraping. I must admit, it didn’t look good but we took it in our stride because we thought it served its purpose and was super cool.”
This set the team up to work on Stitch — Pillay as CEO, Cuthbert as CTO and Priyen as CPO. After working on building better functionality and technology, Stitch beta launched in September 2019 and secured a pre-seed round a month later. While in stealth, Stitch says it has gotten a handful of clients, which include Intelligent Debt Management, Momentum Velocity Club, Paystack, Flexclub, and two of South Africa’s biggest insurance players. The company is also beginning to attract some attention from corporate companies around consumer-facing products.
As of now, Stitch has a data and identity API product, and this month, a payment product will be added to its offerings. Like most API fintech startups, Stitch charges developers and companies per API call. However, for some products like budgeting or personal finance management apps, it also charges a fixed fee.
With wide and deep investor backing, Stitch will use the funding to consolidate growth in South Africa. There are plans to also launch operations in West and East Africa; the company’s statement reads.
Africa’s financial infrastructure space is heating up
These markets already have players, mainly Nigerian startups, in the API fintech space. They have raised sizeable rounds with enviable backings as well. Mono, a startup that only launched six months ago, is backed by YC; For Okra, it is Pan-African VC firm TLcom Capital; OnePipe has Techstars, and US-based but Africa-focused Pngme has attracted investment from Pan African VC firms EchoVC and Lateral Capital.
For now, these startups don’t operate in more than two countries. For instance, Mono, Okra and OnePipe are only live in Nigeria. Pngme says it’s operating in Nigeria and Kenya, while Stitch is only in South Africa. It will be interesting to see how competition and collaboration play out when they expand outside their markets. We might not wait long as Okra is currently in beta in Kenya and South Africa, and Mono is planning an expansion into Ghana and Kenya before the end of the year.
This doesn’t bother Pillay and his team at Stitch, though. He, alongside founders of these startups who I’ve talked to in the past year, believe competition is healthy for the market, and more founders should actually build similar companies. That said, Pillay adds that what might play out is each company creating a niche functionality at which they’re best.
“Unlike the U.S. where Plaid is dominant, I think the African market needs many players because the market is large. Europe is a good example; many sizeable companies are providing similar banking API services. For us, I think what we would start to see happen is that some companies will be known to do a particular functionality well like payments, data enrichment, or merchant identification.”
Image Credits: Stitch
Stitch has an impressive lineup of investors for this seed round led by London-based VC firm, firstminute Capital and SA-based investment firm, The Raba Partnership. Other investors who took part include both funds and angels.
The funds include CRE and Village Global, Norrsken (a fund by Klarna co-founder Niklas Adalberth), Future Africa (a fund by Flutterwave co-founder Iyinoluwa Aboyeji) and 500 Fintech. The angel cohort includes Venmo co-founder Iqram Magdon Ismail, some founding members at Plaid, executives at Coinbase, Revolut, Fast, and Paystack.
On how the startup still in stealth managed to get these investors on board, Pillay says it’s down to the company’s network in the US and the belief each investor have in the product.
“Spending a lot of time in San Francisco when working with Smile has helped us to get in touch with these globally world-class founders and investors. There’s an opportunity for us to provide a new generation of financial services in markets across Africa, and we’re really fortunate to have them back us.”
For Brent Hoberman, co-founder and executive chairman of firstminute capital, the firm decided to back Stitch because it believes most online business in Africa will embed fintech capabilities in their applications — facilitating online payments, increasing lending capacity and streamlining KYC and identity checks — through Stitch.
“As a fellow South African, I’m excited to be partnering with a team of exceptionally talented local engineers with pan-African ambitions,” he added.
That said, Africa’s fintech sector is beginning to heat up after a slow January which saw agritech and cleantech sectors dominate funding rounds. This week, South African digital bank TymeBank raised a whopping $109 million to expand across the country and into Asia, extending the sort of large rounds we’ve seen in the past from a sector that attracted more than 30% of VC funding.
For Stitch, its seed round is the latest in a series of notable deals in the African API fintech space over the last two years, where other major players have raised between $500,000 to $5 million.
ViacomCBS executives held a virtual investor event today where they outlined the strategy for Paramount+, the streaming service set to launch on March 4 that’s basically a rebranded, expanded version of CBS All Access.
In addition to launching in the United States, executives said the service will be available across Latin America and Canada on March 4, with a Nordic launch a few weeks later and an Australian launch also planned for this year.
And they said that Paramount+ will cost $4.99 per month with ads in the U.S. (less than the $5.99 charged for CBS All Access), or $9.99 without ads and with additional sports, news and live TV content. There are also plans to bundle this with the company’s premium subscriptions, such as Showtime.
Yes, it’s yet another streaming service with a plus in its name. But the company’s streaming president and CEO Tom Ryan said research has shown that ViacomCBS brands — not just Paramount and CBS, but Comedy Central, MTV, Nickelodeon and more — are well-known to viewers, and they’ll all be front-and-center in the new service. Plus, it’s worth noting that ViacomCBS already produces a number of hit streaming shows on other services, such as “13 Reasons Why,” “Emily in Paris” and “Jack Ryan.”
ViacomCBS executives also argued that Paramount+ will have a unique combination of live news, live sports and (to use a phrase repeated throughout the event) “a mountain of entertainment.” And from a product perspective, the service will offer originals in 4K, HDR and Dolby Vision, with easy downloads.
On the entertainment side, the service is supposed to have more than 30,000 TV show episodes and 2,500 movies. And the library will expand with new shows like a new version of “Frasier” with Kelsey Grammer returning to the role, as well as a “Halo” TV show that will now debut on Paramount+ instead of Showtime in early 2022. The service is also rebooting a variety of Paramount properties like “Love Story,” “Fatal Attraction” and “Flashdance.”
And like CBS All Access before it, Paramount+ will be home to new Star Trek shows — not just the already launched “Discovery,” “Picard” and “Lower Decks,” but also the upcoming “Strange New Worlds” and the kids animated series “Prodigy.”
On the movie side, Paramount CEO Jim Gianopulos said the company is still a big believer in the theatrical model, but it will be bringing some 2021 releases — including “A Quiet Place Part 2,” the first “Paw Patrol” movie and “Mission Impossible 7” — to Paramount+ in an accelerated fashion, 30 to 45 days after they come to theaters (a much less aggressive strategy than HBO Max, which will stream all Warner Bros. movies this year simultaneously with their theatrical release). And there will be new straight-to-streaming movies as well, starting with reboots of “Paranormal Activity” and “Pet Sematary.”
Source: https://techcrunch.com/2021/02/24/paramount-will-cost-4-99-per-month-with-ads/
Singapore is quickly turning into a hub for food-tech startups, partly because of government initiatives supporting the development of meat alternatives. One of the newest entrants is Next Gen, which will launch its plant-based “chicken” brand, called TiNDLE, in Singaporean restaurants next month. The company announced today that it has raised $10 million in seed funding from investors including Temasek, K3 Ventures, EDB New Ventures (an investment arm of the Singapore Economic Development Board), NX-Food, FEBE Ventures and Blue Horizon.
Next Gen claims this is the largest seed round ever raised by a plant-based food tech company, based on data from PitchBook. This is the first time the startup has taken external investment, and the funding exceeded its original target of $7 million. Next Gen was launched last October by Timo Recker and Andre Menezes, with $2.2 million of founder capital.
Next Gen’s first product is called TiNDLE Thy, an alternative to chicken thighs. Its ingredients include water, soy, wheat, oat fiber, coconut oil and methylcellulose, a culinary binder, but the key to its chicken-like flavor is a proprietary blend of plant-based fats, like sunflower oil, and natural flavors that allows it to cook like chicken meat.
Menezes, Next Gen’s chief operating officer, told TechCrunch that the company’s goal is to be the global leader in plant-based chicken, the way Impossible and Beyond are known for their burgers.
“Consumers and chefs want texture in chicken, the taste and aroma, and that is largely related to chicken fat, which is why we started with thighs instead of breasts,” said Menezes. “We created a chicken fat made from a blend, called Lipi, to emulate the smell, aroma and browning when you cook.”
Both Recker and Menenzes have years of experience in the food industry. Recker founded German-based LikeMeat, a plant-based meat producer acquired by the LIVEKINDLY Collective last year. Menenzes’ food career started in Brazil at one of the world’s largest poultry exporters. He began working with plant-based meat after serving as general manager of Country Foods, a Singaporean importer and distributor that focuses on innovative, sustainable products.
“It was clear to me after I was inside the meat industry for so long that it was not going to be a sustainable business in the long run,” Menenzes said.
Over the past few years, more consumers have started to feel the same way, and begun looking for alternatives to animal products. UBS expects the global plant-based protein market to increase at a compounded annual growth rate of more than 30%, reaching about $50 billion by 2025, as more people, even those who aren’t vegans or vegetarians, seek healthier, humane sources of protein.
Millennial and Gen Z consumers, in particular, are willing to reduce their consumption of meat, eggs and dairy products as they become more aware of the environmental impact of industrial livestock production, said Menenzes. “They understand the sustainability angle of it, and the health aspect, like the cholesterol or nutritional values, depending on what product you are talking about.”
Low in sodium and saturated fat, TiNDLE Thy has received the Healthier Choice Symbol, which is administered by Singapore’s Health Promotion Board. Next Gen’s new funding will be used to launch TiNDLE Thy, starting in popular Singaporean restaurants like Three Buns Quayside, the Prive Group, 28 HongKong Street, Bayswater Kitchen and The Goodburger.
Over the next year or two, Next Gen plans to raise its Series A round, launch more brands and products, and expand in its target markets: the United States (where it is currently recruiting a growth director to build a distribution network), China, Brazil and Europe. After working with restaurant partners, Next Gen also plans to make its products available to home cooks.
“The reason we started with chefs is because they are very hard to crack, and if chefs are happy with the product, then we’re very sure customers will be, too,” said Menenzes.
We check out Amazon’s new smart home device, Airbnb adds flexible search and Hopin is raising even more money. This is your Daily Crunch for February 24, 2021.
The big story: We review the Amazon Echo Show 10
Brian Heater spent some time with Amazon’s new smart home device, paying particular attention to the screen that rotates based on the user’s location. He reports that the screen works smoothly and silently, but also feels “unnecessary,” and in some cases “downright unnerving” (especially from a privacy perspective).
Ultimately, Brian concludes that the $249 device is “a well-constructed, nice addition to the Show family and one I don’t mind moving around the old-fashioned way.”
The tech giants
Airbnb plans for a new kind of travel post-COVID with flexible search — The feature will allow users to forgo putting in exact dates when they look to book lodging on the platform.
YouTube to launch parental control features for families with tweens and teens — YouTube announced a new experience for teens and tweens who are now too old for the schoolager-focused YouTube Kids app, but who may not be ready to explore all of YouTube.
Google Cloud puts its Kubernetes Engine on autopilot — This new mode turns over the management of much of the day-to-day operations of a container cluster to Google’s own engineers and automated tools.
Startups, funding and venture capital
VCs are chasing Hopin upwards of $5-6B valuation — According to multiple sources who spoke with TechCrunch, the company may be nearing the end of a fundraise in which it’s seeking to raise roughly $400 million.
Primary Venture Partners raises $150M third fund to back NYC startups — The firm’s portfolio includes Jet.com (acquired by Walmart for $3.3 billion), Mirror (acquired by Lululemon for $500 million) and Latch (which is planning to go public via SPAC).
Joby Aviation takes flight into the public markets via a SPAC merger — Joby has spent more than a decade developing an all-electric, vertical take-off and landing passenger aircraft.
Advice and analysis from Extra Crunch
Four essential truths about venture investing — Observations from Alex Iskold of 2048 Ventures.
Dear Sophie: Which immigration options are the fastest? — The latest edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
Can solid state batteries power up for the next generation of EVs? — For the last decade, developers of solid state battery systems have promised products that are vastly safer, lighter and more powerful.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Everything else
Europe kicks off bid to find a route to ‘better’ gig work — The European Union has kicked off the first stage of a consultation process involving gig platforms and workers.
The Equity podcast is growing — More Equity!
Techstars’ Neal Sáles-Griffin will join us at TechCrunch Early Stage 2021 to talk accelerators — Neal has seen this industry from just about every angle — as a teacher, advisor, investor and repeat co-founder.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Source: https://techcrunch.com/2021/02/24/daily-crunch-we-review-the-amazon-echo-show-10/
Through all of the last year’s lockdowns, venue closures, and other social distancing measures that governments have enacted and people have followed to slow the spread of Covid-19, shopping — and specifically e-commerce — has remained a consistent and hugely important service. It’s not just something that we had to do; it’s been an important lifeline for many of us at a time when so little else has felt normal. Today, one of the startups that saw a big lift in its service as a result of that trend is announcing a major fundraise to fuel its growth.
Wallapop, a virtual marketplace based out of Barcelona, Spain that lets people resell their used items, or sell items like crafts that they make themselves, has raised €157 million ($191 million at current rates), money that it will use to continue growing the infrastructure that underpins its service, so that it can expand the number of people that use it.
Wallapop has confirmed that the funding is coming at a valuation of €690 million ($840 million) — a significant jump on the $570 million valuations sources close to the company gave us in 2016.
The funding is being led by Korelya Capital, a French VC fund backed by Korea’s Naver, with Accel, Insight Partners, 14W, GP Bullhound and Northzone — all previous backers of Wallapop — also participating.
The company currently has 15 million users — about half of Spain’s internet population, CEO Rob Cassedy pointed out to us in an interview earlier today, and has maintained a decent number-four ranking among Spain’s shopping apps, according to figures from App Annie.
The startup has also recently been building out shipping services, called Envios, to help people get the items they are selling to the buyers, which has expanded the range from local sales to those that can be made across the country. About 20% of goods go through Envios now, Cassedy said, and the plan is to continue doubling down on that and related services.
Naver itself is a strong player in e-commerce and apps — it’s the company behind Asian messaging giant Line, among other digital properties — and so this is in part a strategic investment. Wallapop will be leaning on Naver and its technology in its own R&D, and on Naver’s side it will give the company a foothold in the European market at a time when it has been sharpening its strategy in e-commerce.
The funding is an interesting turn for a company that has seen some notable fits and starts. Founded in 2013 in Spain, it quickly shot to the top of the charts in a market that has traditionally been slow to embrace e-commerce over more traditional brick-and-mortar retail.
By 2016, Wallapop was merging with a rival, LetGo, as part of a bigger strategy to crack the U.S. market (with more capital in tow).
But by 2018, that plan was quietly shelved, with Wallapop quietly selling its stake in the LetGo venture for $189 million. (LetGo raised $500 million more on its own around that time, but its fate was not to remain independent: it was eventually acquired by yet another competitor in the virtual classifieds space, OfferUp, in 2020, for an undisclosed sum.)
Wallapop has for the last two years focused mainly on growing in Spain rather than running after business further afield, and rather than growing the range of goods that it might sell on its platform — it doesn’t sell food, nor work with retailers in an Amazon-style marketplace play, nor does it have plans to do anything like move into video or selling other kinds of digital services — it has honed in specifically on trying to improve the experience that it does offer to users.
“I spent 12 years at eBay and saw that transition it made to new goods from used goods,” said Cassedy. “Let’s just say it wasn’t the direction I thought we should take for Wallapop. We are laser focused on unique goods, with the vast majority of that second hand with some artisan products. It is very different from big box.”
Wallapop’s growth in the past year isare the result of some specific trends in the market that were in part fuelled by the Covid-19 pandemic.
People spending more time in their homes have been focused on clearing out space and getting rid of things. Others are keen to buy new items now that they are spending more time at home, but want to spend less on them. In both cases, there has been a push for more sustainability, with people putting less waste into the world by recycling and upcycling goods instead.
At the same time, Facebook hasn’t really made big inroads with its Marketplace in the country, and Amazon has also not appeared as a threat to Wallapop, Cassedy noted.
All of these have had a huge impact on Wallapop’s business, but it wasn’t always this way. Cassedy said that the first lockdown in Spain saw business plummet, as people were restricted to leave their homes.
“It was a rollercoaster for us,” he said. “We entered the year with incredible momentum, very strong.”
He noted that the drop started in March, when “not only did it become not okay to leave house and trade locally but the post office stopped delivering parcels. Our business went off a cliff in March and April.”
Then when the restrictions were lifted in May, things started to bounce back than ever before, nearly overnight, he said. “The economic uncertainty caused people to seek out more value, better deals, spending less money, and yes they were clearing out closets. We saw numbers bounce back 40-50% growth year-on-year in June.”
The big question was whether that growth was a blip or there to say. He said it has continued into 2021 so far. “It’s a validation of what we see as long term trends driving the business.”
“The global demand for C2C and resale platforms is growing with renewed commitment in sustainable consumption, especially by younger millennials and Gen Z,” noted
Seong-sook HAN, CEO of NAVER Corp., in a statement. “We agree with Wallapop’s philosophy of conscious consumption and are enthused to support their growth with our technology and develop international synergies.”
“Our economies are switching towards a more sustainable development model; after investing in Vestiaire Collective last year, wallapop is Korelya’s second investment in the circular economy, while COVID-19 is only strengthening that trend. It is Korelya’s mission to back tomorrow’s European tech champions and we believe that NAVER has a proven tech and product edge that will help the company reinforce its leading position in Europe,” added Fleur Pellerin, CEO of Korelya Capital.
