Hollywood moments for high street stores

Financial Times

Gautam Malkani

Walk into any Blockbuster video rental outlet and it is not hard to identify the big releases of the moment. This month, the stores have been practically wallpapered, shelf upon shelf, with video and DVD copies of The Last Samurai, the Tom Cruise epic chronicling the demise of the Japanese warrior tradition

Ominously, the film’s release on video last week coincided with Blockbuster’s launch of an alternative film rental service that has prompted observers to start chronicling the demise of another tradition – going to the video store.

Blockbuster has joined a growing list of companies offering customers a revolving selection of DVDs through the post in return for a monthly subscription. The model has proved successful in the US: it also emerged last week that Netflix, the company that pioneered the service in 1998, is considering expanding into the UK after generating $272m (£154m) of revenues last year from a subscriber base of 1.49m.

After watching Netflix challenge traditional rental stores in the US, Blockbuster appears to recognise that even multiple images of Tom Cruise lining the walls cannot smooth out the common problems of finding a parking space; limited selection; queuing; the couple with chronic indecision; the juvenile with no proof of age and the fumbling when you find that you have forgotten your membership card.

The two companies’ attempts to bring the revolution to the UK rental market presents a challenge for a small start-up company based near Clerkenwell in London. Video Island was formed two years ago by a former Microsoft executive hoping to import the Netflix model to the UK.

After £2.5m of investment from its founders and from Benchmark and Index Ventures, the venture capital firms, Video Island will not disclose the number of subscribers to its own website. But if it were just a copycat website, the developments last week at Blockbuster and Netflix would probably herald the company’s early downfall.

Unlike other DVD subscription outfits, however, Video Island’s rental website comprises only part of the company’s business. The other, more compelling part, is a “white-label” service it provides for well-known consumer brands that sound like much more credible adversaries to the likes of Blockbuster. Video Island provides the infrastructure for the service, but the brands the consumer sees belong to its partners, such as Tesco, MSN, Comet and Toys ‘R’ Us. All of them have signed with Video Island in the past four months amid the bubbling interest in DVD subscription services. The partnerships have contributed to 75 per cent month-on-month revenue growth in the three months they have been operating.

“If all we were doing was trying to replicate Netflix or Blockbuster this wouldn’t be that interesting,” admits Saul Klein, the 33-year-old chief executive and co-founder. “But the dynamics of the entertainment industry have changed in the last few years. It’s not just the entertainment companies that offer entertainment services any more, so we are also seeking to accelerate that trend.” Through its various partner brands, the company claims to have more than 20 per cent of the British market for online video rentals, including DVDs.

Mr Klein has no qualms about borrowing other people’s business models and brands. “There’s no point trying to be a hero and creating a new brand and a new business model with a new customer proposition,” he says. “Netflix defined the service so the cat was out of the bag in terms of the business model.”

But as well as providing a bolt-on entertainment subscription business for non-media and entertainment companies, there are other reasons for Video Island’s white-label approach. Not least is the sheer cost of starting a new brand. “Our expertise lies in defining and delivering this service, not necessarily marketing it to the end customer,” he says.

He also points to the importance of reaching the mass market rapidly. “Our strategy is to offer this to the mass market through mass market brands. Our existing partners allow us to reach 5.9m online customers and it’s going to be expensive for [Blockbuster and Netflix] to reach that number of online shoppers cost-effectively.”

Tesco, which launched its service with Video Island in March, also cites the need to start a service fast and cost-effectively as one reason for entering the market through a partnership. “We observed a growth business in the US and looked for the best partner around,” says Laura Wade-Gery, chief executive of Tesco.com. She likens the arrangement to Tesco’s partnership with Royal Bank of Scotland, which has helped the supermarket group enter the personal finance market.

As a result of its partnership model, Video Island’s website and the third-party websites it powers are variations on each other. Users compile a wish-list from a selection of 15,000 film titles. Depending on the specific subscription package, customers are sent a rotating batch of three titles for a monthly fee of about £15, with their selection replenished from the list every time they post a DVD back in a pre-paid envelope. There are no “due back” dates and so no fines.

Mr Klein is also aware of the potential threat the rising popularity of DVDs poses to pay-per-view film channels on TV, especially as he does not believe digital TV or broadband internet connections will be able to offer as wide a selection as his service for some years to come, if ever: “We think of this as the common man’s video-on-demand because it’s here today, whereas people have been talking about video-on-demand for 10 years.”

But he is careful not to overstate the competition, and argues that pay-TV channels, DVDs and now postal subscription services should increase the film- going audience rather than carve it up. “We’ve got a business that’s designed to partner with these guys [TV channels and film studios] as opposed to designed to compete. If you are a movie fan, the way you access a film is less relevant. So if as a business you offer movies, you should be interested in offering them in every window [from cinema, to TV to DVD rental].”

Stephen Foulser, commercial vice-president of Blockbuster UK, agrees. “I don’t think we are cannibalising our high-street business; the outlets only reach about 55 per cent of the UK population. Also, the online subscription service is niche – it’s for heavy renters and people with busy lives.”

In Blockbuster stores, another image is now as ubiquitous as Tom Cruise – that of Uma Thurman gracing the DVD covers of Kill Bill, the Quentin Tarantino film that depicts a more modern kind of Samurai.


Hollywood has always taught the importance of getting into bed with someone with a big name. Video Island has followed this advice, forming partnerships with well-known consumer brands such as Tesco and MSN, which has drastically cut the marketing budget it would have needed to reach potential customers alone.

Saul Klein, chief executive, highlights the difficulties of going it alone by citing Amazon and Netflix as the only companies to have built long-term businesses combining the internet with retailing from scratch. Laura Wade-Gery, chief executive of Tesco.com, adds: “You’re paying your money up-front to someone whom you are then trusting to send DVDs out of thin air, so it’s helpful to be working with a name that people know and trust.”

For Tesco and the other consumer brands, the partnership model makes it possible to launch the service in a much shorter time, as well as giving them access to technical expertise.

Suppliers such as film studios are often apprehensive about new distribution mechanisms, so rental companies need to make sure there are benefits for them too. “The studios love this because it helps people go back into the catalogue,” explains Mr Klein. “When you offer ‘The Last Samurai’ you can also showcase the whole Tom Cruise catalogue. When was the last time you saw a Blockbuster store showcase a copy of ‘Risky Business’?”

While a new venture needs to grab market share from wherever it can, there is no need to make enemies out of everyone. For example, Video Island markets its service as a complementary opportunity, not a threat, for pay-per-view digital TV movie channels. A collaborative effort might even help enlarge the potential market.

In a similar vein, even your direct rivals can benefit your business if you are both promoting a new service that requires a change in consumer behaviour.

Alphabet’s GV leads $16 million investment in site rental firm Peerspace


By Paresh Save (reuters.com)

SAN FRANCISCO (Reuters) – Alphabet Inc’s venture capital unit GV led a $16 million investment this month in Peerspace Inc, a self-serve online booking tool for event spaces, the firms told Reuters on Tuesday.

The deal reflects venture capitalists’ continued interest in businesses that bring to the web tasks that once required physical proximity or multiple phone calls, including hailing rides, renting wedding outfits and booking vacation cabins.

Peerspace said it has accommodated tens of thousands of events such as corporate meetings, film shoots and bridal showers. About 6,000 locations across nine large U.S. cities have listed on Peerspace, including churches, bookstores and mansions.

People often seek hotel ballrooms or well-known sites for events. But Peerspace has a $30-billion opportunity in the United States to promote overlooked and distinctive locations, said Joe Kraus, a general partner at GV who is joining the startup’s board of directors.

Peerspace also has begun helping event organizers schedule catering and rent video equipment as part of a growing offering of add-ons.

“The long-term opportunity is not only to solve the event space but the whole event,” said Kraus, whose firm is tasked with generating a financial return for Alphabet.

GV has in-house teams that plan to help Peerspace with design, employee recruiting and striking partnerships, he said.

Kraus said his role will include advising on balancing expansion and listings quality, so users do not encounter “significantly not-as-described” locations.

Peerspace sends a staffer to review each location before it is listed, but the aim is to increasingly shift to user feedback and algorithms for vetting, said Chief Executive Eric Shoup.

Turo, a car rental app in which GV invested, does not inspect each new vehicle submitted by users, but new listings can get better promotion on its service if they meet criteria such as uploading several high-quality photos, Kraus said.

Peerspace is developing advanced algorithms to improve listings, Shoup said. For instance, it has tested computer vision software, a form of artificial intelligence, to automatically detect pools and fireplaces in photos so that the company can “definitively” describe a site’s amenities, he said.

Foundation Capital and Red Bridge Partners also participated in the latest financing, which nearly doubles Peerspace’s total capital raised to $34 million.

Original Article

Social care start-up OnCare raises over half a million to transform the care industry


By AMELIA HEATHMAN (standard.co.uk)

A new London-based healthcare start-up has raised £550,000 in seed funding to transform social care.

Named OnCare, the business has grown out of the Founders Factory incubator programme, in collaboration with Aviva.

OnCare is part of Founders Factory’s mission to help launch 200 new start-ups by 2021. The new company creates software tools for care providers, replacing the outdated paper-based processes that burden the industry.

There are over 1.3 million care workers in the UK, with around £20 billion spent every year, meaning social care is ripe for disruption.

Over 20 care agencies in the UK are already working with OnCare. Care workers use a reporting app to record information about their clients which allows providers to be more responsive to their needs through real-time alerts and updates.

As well, OnCare’s technology makes it easier for families to stay updated with their loved one’s care and needs through text updates and a digitised view of the care records, making the care process easier and more transparent.

Care providers using OnCare’s technology have said the app has improved staff productivity, whilst families are seeing the benefit in keeping up to date with the care process for their family member.

To fund OnCare’s growth, the start-up has announced its seed funding round with investors including Alex Chesterman, the founder and CEO of Zoopla, and Simon Franks, LoveFilm’s co-founder.

Chesterman and Franks said they were both interested in how OnCare is using technology to make the provision of social care easier and more effective.

OnCare’s CEO, Alistair Cohen said the funds will be used for product development as well as to support the start-up’s growth in the UK and internationally.

“For too long, social care has been subject to over-priced, poorly-designed software and don’t believe that’s right,” said Cohen. “With this investment, we can make sure that we support and strengthen social care in the UK and beyond, helping providers to use their money more efficiently and continue to provide an amazing service.”

More and more start-ups are entering the social care scene. Earlier this year, online care platform SuperCarers raised £3.8 million for its ‘eHarmony for care’ model – a matchmaking service which joins up carers and families without the need for agencies.

And last year, another London based company, Cera, launched an artificial intelligent (AI) assistant to help carers and patients answers questions about their health, which could, in turn, be used to spot future symptoms and illnesses.

With concerns over the UK’s ageing population set to grow, transforming social care with technology is one way to ease the pressure for the future.

Original Article

Young entrepreneurs: Gauthier Van Malderen and Matthew Davis, Perlego


By Julia Watts (startups.co.uk)

While spending over £300 per year on hefty, outdated textbooks, university student Gauthier Van Malderen wondered why there wasn’t a more modern solution to the expense and inconvenience:

“I was using Netflix for films, Spotify for music and thought, ‘Surely this could work for textbooks!’”

Amazingly, the student wasn’t new to business and already had two ventures under his belt: Teenage Tourist, which he launched aged 19 and later sold to Robby Rai, and student marketing company Iconic Matter, which sold in 2015.

His co-founder Matthew Davis, who went to school with him, had a similarly impressive background in website building, which he had been doing since the age of 12.

A match made in heaven, the pair teamed up and launched Perlego – an online platform for buying, storing and reading educational e-books – in January 2017.

By charging readers a monthly subscription fee (which it says costs less than a single textbook) while paying 65% of revenue back to publishers, Perlego aims to create an affordable solution for students and give publishers an opportunity that is just as lucrative as print publishing.

In just over a year, Davis and Van Malderen have grown their business to a team of 12 and raised a whopping £850,000 funding. Angel investors in the business include LOVEFiLM’s Simon Franks, Zoopla’s Alex Chesterman, and Peter Hinssen and Remi Saby of Mister Auto.

The business has also secured a partnership with Ingram, “the world’s largest e-book distributor”. As a result, Perlego now boasts e-books from over 1,000 publishers.

As young entrepreneurs, the duo say they are uniquely positioned to understand how their generation interacts with the online world, and in five years’ time they hope to have gone global and opened a US office.

Considering the pace at which Perlego is growing, we believe Davis and Van Malderen are well on their way towards achieving this goal.

Original Article

LiDAR autonomous sensor startup Ouster announces $27M Series A led by auto powerhouse Cox Enterprises


By Danny Crichton (TechCrunch)

Angus Pacala has had a lifelong passion for autonomous cars going all the way back to high school. A little more than a decade ago, he followed the launch of the DARPA Grand Challenge, a Department of Defense competition that pitted research teams against each other over who could build the best autonomous car. Stanford won the challenge in 2005, which is “one of the reasons I went there,” Pacala said.

His freshman year, he met Mark Frichtl, who was similarly interested in autonomous cars. The two took classes and worked on problem sets together, eventually working with each other at Quanergy, which Pacala had co-founded. Now, they are putting their collective talents together in a new venture called Ouster to bring affordable LiDAR sensors to the world.

Ouster today announced a $27 million series A fundraise led by Cox Enterprises, whose Cox Automotive division owns and offers a variety of auto services including the well-known Kelley Blue Book and AutoTrader.com.

Few areas of research are as important to the viability of fully autonomous cars as sensors — the actual physical hardware which evaluates the space around a vehicle and provides the raw data for machine learning algorithms to control the car without a human driver.

While visible light cameras, radar, and infrared sensors have been used by various engineering teams to build a physical map around a vehicle, the key component for nearly all autonomous car platforms is LiDAR. As Devin described on TechCrunch in an overview earlier this year, the technology, which has been around for decades, has become one of the key linchpins to successfully building L4 and L5 fully-autonomous vehicles.

There is just one challenge: essentially only one company makes the technology for production scale — Velodyne, which is based in the Valley. The company announced just a few weeks ago that it is quadrupling production of its main LiDAR product due to demand from autonomous car manufacturers. However, the prices for many of its sensors remain out-of-reach for most consumer applications, with some of the company’s most advanced sensors costing tens of thousands of dollars.

For Pacala, that price barrier has been a major challenge and ultimately gets at the mission of Ouster. “Our long term vision is to push LiDAR from being a research product to being in every consumer automobile,“ he said.

Ouster hopes that its first product, a 64-channel LiDAR sensor called OS1, which will be priced at $12,000, is that solution. The company says that the product is dramatically lighter, smaller, and uses less power than other competitors. It’s also shipping now.

Improving the performance of the sensor while also lowering its sticker price wasn’t a simple challenge. Pacala emphasized that technology wasn’t the entire solution. “While we can talk about the nitty-gritty of technology, the other side is not just the fundamental technology, but the design for manufacturability that really makes this lower cost while maintaining the performance” of the sensor.

That’s one of the reasons he chose the venture partners he did. “This isn’t just a typical list of Sand Hill investors. There is a time and place for those sort of investors, but we saw an opportunity to expand our reach by having investors who are much more attuned to the auto industry,” Pacala said. “VCs that are located in Detroit and who talk to OEMs day in and day out” had more to offer the company at this stage.

Ouster is setting an aggressive timeline to scale out its manufacturing. It intends to ramp up production heavily in the new year, targeting a thousand units a month in January and getting to ten thousand units a month by the end of June.

Certainly speed is of the essence. Venture capitalists around the world have been heavily funding automotive sensing technology over the past two years, including large rounds into Valley-based Luminar, Israel-based Oryx Vision, and China-based Hesai. But Pacala is sanguine about the company’s chances. “We have delivered first and then talked second, which is why you haven’t heard anything about us until now.” He hopes the heavy emphasis on getting manufacturing right early on will give him a lead in the race for your automobile.

In addition to Cox Enterprises, Fontinalis, Amity Ventures, Constellation Technology Ventures, Tao Capital Partners, and Carthona Capital also participated in the fundraise.

Original Article

Robocar LiDAR Startup Has A Novel Pitch: You Can Buy Our Sensor Now


By Alan Ohnsman (Forbes)

As self-driving vehicles move closer to reality there’s intense competition to supply the artificial intelligence and sensors they need, particularly for vision technology. A new player joining that space has a particularly bold claim: A laser LiDAR sensor with performance matching the best of what’s on the market at a much lower price and it’s available now.

San Francisco-based Ouster, emerging from stealth mode this week, is selling the spinning 64-laser OS1 LiDAR from its website for $12,000 each. The company also raised $27 million from investors including Cox Enterprises and Ford Executive Chairman Bill Ford’s Fontinalis Partners to boost production of the optical sensor which Ouster says is lighter, smaller and more efficient than Velodyne’s $75,000 HDL-64. That model, which Velodyne has sold for a decade, is the high-end standard for 3-D, 360-degree pulsed laser imaging.

“The fact that we have a device that’s on the market … is a really big deal very few other companies can claim. Most companies are making the claim that they’ll have something at some point, but they don’t have anything now,” Ouster CEO and co-founder Angus Pacala told Forbes. “We’ve really tried to avoid hyping the company or the products before they’re available … to reverse this trend of brinksmanship when it comes to LiDAR.”

The ghostly “point cloud” images generated by LiDAR, short for light, distance and ranging, give self-driving cars an ability to see that’s super human, detecting road conditions and hazards more than a 100 meters away and under any lighting conditions. Combined with cameras, radar and even small sonar sensors, the technology that’s been used for 3-D mapping for decades is generally seen as essential for autonomous vehicles to function safely – assuming cost and performance requirements are met. The technology is also at the heart of a bitter legal fight between Alphabet Inc.’s Waymo and Uber that began in February 2017.

Velodyne, the current leader in LiDAR for autonomous vehicles, is currently expanding production at its San Jose, California, factory with a goal of producing at least a million units annually, to meet fast-growing demand from auto and tech companies that want to begin operating large fleets of robotic vehicles in the next two to three years.

That demand is a huge opportunity for suppliers of the technology. As a result LiDAR system sales should reach $2.5 billion in 2026, more than 10 times the level in 2016, according to an estimate IHS Markit Senior Analyst Akhilesh Kona.

That’s why since 2016 investments in existing and new LiDAR makers, including Velodyne, Ibeo, Quanergy, Oryx Vision, Luminar, Innoviz, LeddarTech, AEye, Strobe and Princeton Lightwave, total at least $800 million, based on a Forbes estimate. Aside from Velodyne, most of the startups are making only small batches for testing and evaluation or are in various stages of preparation for production.

(For more on Velodyne, see “How A 34-Year-Old Audio Equipment Company Is Leading The Self-Driving Car Revolution” from the September 5, 2017 issue of Forbes.)

Ouster’s goal is to make 1,000 of its OS1 sensors per month starting in January at its factory in San Francisco’s Mission district, and boost that to a 10,000-unit monthly rate in late 2018, said Pacala. A Stanford University trained engineer, he previously co-founded Quanergy, which specializes in solid state, non-spinning LiDAR. Shipments of Ouster’s OS1 have already begun to customers Pacala declined to identify, citing confidentiality agreements.

“We spent the past 12 months researching the broader perception space, with a specific focus on LIDAR, and feel strongly that Ouster’s team, technical approach and focus on manufacturing at volume positions them to capture a market leadership position today and power the autonomous systems of the future,” Chris Thomas, a founder and partner of Fontinalis Partners, said in a statement. (Despite Bill Ford’s connection, the fund is not affiliated with Ford Motor, a Velodyne investor.)

Ouster says its sensor is designed for large-scale production, able to fit any vehicle platform given its compact size. (It’s about half that of a coffee mug, according to Pacala). Resolution is just as detailed as Velodyne’s much larger HDL-64 (roughly the size of a Kentucky Friend Chicken bucket).

While the Velodyne model is a benchmark, the company is boosting sales of its own much smaller “Puck” LiDAR units, with between 16 and 32 rotating lasers. In November Velodyne said a new 128-beam model is going into production with more than 10 times the range and performance of the HDL-64. In a recent interview CEO David Hall declined to discuss pricing, beyond plans for discounts to customers who purchase large quantities of the new sensor.

The OS1’s “internal operation is fundamentally different” than that of Velodyne, Pacala said, without elaborating.

Unlike testing for crashworthiness or tailpipe emissions, there’s not yet an objective, public, outside source of performance analysis for LiDAR and other advanced optical sensors. Whether Ouster has game-changing tech or not will be determined in the months ahead if auto and tech customers who start buying its $12,000 device clamor for more.

Original Article

Credible founder Stephen Dash comes home for biggest ASX tech IPO of 2017


By Paul Smith (Financial Review)

A 33-year-old Australian tech entrepreneur, who left Australia five years ago for Silicon Valley, will return home to ring the bell at the Australian Securities Exchange on Friday as his fintech company Credible becomes the biggest local tech float of the year.

Stephen Dash, a former investment director at Mark Carnegie’s private equity, venture capital and advisory firm M.H. Carnegie, already raised over $US20 million ($26.5 million) in external funding for the US-focused online student loan marketplace before raising $68 million through an initial public offering, which valued the company at $306.6 million.

Credible has carved out a potentially lucrative niche in the US market, where students have typically paid significantly higher rates for their loans. It has created an online marketplace where borrowers can seek out offers from numerous vetted lenders, and has also recently expanded into personal loans and a credit card marketplace.

Mr Dash told The Australian Financial Review the ASX had emerged as an extremely desirable listing location for overseas tech companies, and now shaped as a preferable option to venture capital and private equity for larger growth funding rounds.

He said Credible’s pre-IPO investor roadshow had demonstrated both demand to invest in the company and a heartening sophistication among local analysts and fund managers about how fast growing tech companies should be assessed.

“We went up to Hong Kong and Melbourne and Sydney, and we had a lot of support both from existing investors and new investors, because there’s not too many places you can get exposure to US fintech on the ASX,” Mr Dash said.

“I’ve got a checklist of what matters when you’re looking at taking capital and the biggest one to me is flexibility to raise more money relatively quickly assuming things go well.

“The rule of thumb [with VC] is that you spend half of your time raising money and the other half running your business, but that is not a great way for a CEO to spend their time if they can avoid it.”

Mr Dash owned 55 per cent of the company but following the raising, which was underwritten by Bell Potter, his stake will fall to 44.7 per cent. His shares, which are held in CDIs, will be escrowed for two years.

“I’m not taking any money off the table, and I’m viewing this very much like just another round of capital for us, which just comes with additional reporting and audit requirements and corporate governance,” Mr Dash said.

Successful raising

Promient US fintech executive Ron Suber is the company’s chairman and owns 0.9 per cent of the issued capital. Mr Suber has been given 11,028 options via a stock incentive plan in relation to advisory services, according to the company’s prospectus.

Three quarters of the company’s shares are subject to escrow. Credible issued CDIs at $1.21 each. Each CDI accounts for 25 shares.

The ASX wants to attract emerging technology from around the world, which are still too small for the NASDAQ or New York Stock Exchange.

In addition to being the largest tech IPO of 2017, Credible is also the second largest ever tech IPO raise for a foreign company on the ASX, behind Kiwi billing software company Gentrack, which raised $90.5 million in 2014.

It is also the largest ASX IPO for a US-based company in the past five years.

Only three US companies have raised more than Credible in ASX IPOs; mining stock Boart Longyear raised $2.35 billion in 2007, medical device maker Reva Medical raised $85 million in 2010 and GI Dynamics raised $80 million in 2011.

“ASX has developed a sweet spot for attracting global companies with market caps of between $100 million to $1 billion. In the United States and Europe, the size of these companies often sees them go onto second boards or they are viewed by the market as small cap,” ASX’s executive general manager of listings Max Cunningham said.

Credible will be hoping local investors buy into its vision of taking a large share of a potentially huge and under-served market. It expects to close loans worth $US758 million this year, which would be more than double last year’s $US364 million and well up from $US81.4 million in 2015.

The company has a number of Australian backers, including Regal Funds Management, Aussie Home Loans founder John Symond, former Seven Group chief executive Peter Gammell and Carthona Capital, which was Credible’s first external investor.

‘The end of the beginning’

Queensland Airports chairman and Seven Group board member Annabelle Chaplain has also joined Credible’s board ahead of the IPO.

Carthona Capital partner Dean Dorrell, who worked with Mr Dash at M.H. Carnegie, said he wasn’t looking to exit and had invested significantly in the IPO.

He said he believed the size of the potential market for Credible meant the valuation of about $300 million could be worth 10 times more in the future.

“We see this IPO as the end of the beginning and are still long-term believers in Stephen and the company,” Mr Dorrell said.

“Credible and Stephen have executed even better than I expected. They’ve originated more than $US1 billion of loans since inception, produced significant revenues that are growing more than 100 per cent each year over the past three years, and have built a supremely talented team with a big coup in attracting a globally significant player in fintech, Ron Suber, as chairman.”

The IPO funds will be used to build out its platform and also get increasingly sophisticated in its marketing strategy.

Mr Dash said the new pressures of running a public company would not distract him or his staff from their main purpose, and that staff would be advised against obsessing about how their stock was performing day to day.

“We’re banning stock watching from the business to be honest,” Mr Dash said.

“Day-to-day share price is irrelevant really for all employees … it doesn’t matter. What matters is that we build a business that is around in 50 years and you don’t do that by worrying about the day to day, you do that by just making good long term investment decisions.”

Original Article

Credible Raises $50 Million in Australian IPO


By businesswire.com

Unique approach to $13 trillion U.S. consumer finance market drives success of offering

SAN FRANCISCO–(BUSINESS WIRE)–Credible, the consumer finance marketplace that empowers millennials to make smarter financial decisions, has raised $50 million (A$67 million) in an initial public offering on the Australian Securities Exchange (ASX).

The offering — the largest tech IPO on the ASX this year — will allow Credible to accelerate development of the company’s technology platform, deepen its partnerships with financial institutions, and grow its customer base.

Credible, which is targeting the $13 trillion U.S. consumer finance market, chose a listing on the ASX to fund the company’s next phase of growth because it will provide more flexibility to pursue new opportunities, said CEO Stephen Dash.

“The ASX is an attractive alternative to private funding for growth-stage companies with an Australian nexus,” Dash said. “This is another round of capital, not an end game.”

After launching Credible.com as the first multi-lender marketplace to provide instant, personalized rates for student loans and student loan refinancing, Credible broadened its offerings to include personal loans and credit cards. Dash said the marketplace approach can be applied to any financial product that requires consumers to make complex choices that are difficult to evaluate.

Dash called the IPO “a strong validation of our business model. We see significant opportunities for growth in both our existing and potential future offerings.”

The IPO highlights strong investor appetite for high-growth fintech companies, said Ron Suber, Credible’s chairman.

On an eight-day roadshow leading up to the IPO, Suber said potential investors — including those in Australia, Hong Kong and Singapore — were impressed with Credible’s executive leadership team, the scale of the consumer finance marketplace opportunity, and Credible’s differentiated position in this market.

“Credible is doing for lending what Expedia and Kayak have done for travel,” Suber said. “We go beyond lead generation to create value for both consumers and lenders by building deep integrations throughout the ecosystem. Everybody wins.”

Credible’s marketplace approach has been well-received by millennials, who have annual buying power of $200 billion and value the transparency, simplicity, and immediacy the company provides. To date, approximately 665,000 consumers have created Credible accounts, enabling them to evaluate their options and take out more than $1 billion in loans.

About Credible

As a marketplace that empowers consumers to discover financial products and services that are the best fit for their own, unique circumstance, Credible is fiercely independent and committed to delivering fair and unbiased solutions for millennials. Credible’s integrations with lenders and credit bureaus allow consumers to access real rates through a neutral platform, without sharing their information until they’re ready to proceed with an offer. The Credible platform provides an unrivaled customer experience, as reflected by hundreds of positive Trustpilot reviews and a TrustScore of 9.5/10. For more information, news media may email [email protected], or call (415) 894-9219.

Original Article

Cleo, a chatbot that wants to replace your banking apps, raises £2M led by LocalGlobe


By Steve O’Hear (techcrunch.com)

Cleo, the London-based fintech startup that offers an AI-powered chatbot to help you manage your finances, has closed £2 million in further funding, adding to an impressive list of backers that already includes Skype founder Niklas Zennström.

The new round is led by LocalGlobe, the seed VC firm founded by father and son duo Robin and Saul Klein, with participation from a number of existing investors. They include Zennström himself, Entrepreneur First (EF), and Jason Goodman, the founder of advertising agency Albion, who also becomes a non-executive director of Cleo.

Founded by Barney Hussey-Yeo and Aleksandra Wozniak, after they teamed up at company builder EF, Cleo is described as a digital financial assistant, powered by AI, that takes the form of a chatbot available via Facebook Messenger. It offers a conversational interface and, in lots of ways, is a replacement for your existing bank’s apps, enabling you to ask for insights into all of all your spending across multiple accounts and credit cards, broken down by transaction, category or merchant, once you give Cleo permission to access that data.

In the world a spew of updates since the chatbot officially launched in January, Cleo also lets you take a number of actions, including some based on the financial data it has gleaned. You can now send money to your Facebook Messenger contacts via Cleo (without sort codes or logging into your bank, and instead charged to the debit card you have linked to the app), automatically put small amounts of money aside into a savings account based on what Cleo deems you can afford, and find better deals and switch for things like utilities and various financial products, such as credit cards.

In a call with Cleo co-founder Barney Hussey-Yeo, he told me that the idea for Cleo came when he was at Wonga, the controversial payday loans company, where he previously worked in the data science team (Wonga co-founder Errol Damelin is also an investor in Cleo). This, he says, gave him a unique insight into how opaque financial services, and particularly the incumbent banks, are in the way they cross-sell products that aren’t always in the interests of customers and don’t do a good job of helping them understand and manage their spending, despite sitting on a ton of relevant data. In turn, Hussey-Yeo wanted a better way to track his own spending, noting that despite having a relatively well paid job, he too had unwittingly turned to his bank’s overdraft.

To that end, Cleo has been designed from the ground up to make your spending data work a lot harder for you. The chatbot can answer questions like your current balance, how much you have spent on, say, takeouts or travel that week, and warn you if you are running over budget for the month. You can also set spending goals and other types of alerts related to your transactions. Hussey-Yeo says this is in contrast to the passive approach banks take where simply warning you that you are heading towards an unauthorised overdraft would in aggregate cost millions in lost revenue.

However, given that financial data is the next and possibly final frontier in this current user data land grab (after search/intent and social), and in a PSD2 and Opening Banking world that is seeing regulation force banks to make customer data accessible to third-party apps, the company that can establish itself as the interface for you to manage all things money has a huge opportunity to make a lot of money too. It is therefore no surprise to hear Hussey-Yeo say that Cleo wants to be that interface.

Like a growing number of fintech startups — from fully fledged challenger banks (“nobody needs to be a bank to replace your banking app,” Hussey-Yeo argues), to other chatbot-styled financial assistants, such as Plum, Chip and Ernest, or all-your-cards-in-one app Curve — central to Cleo is a much more ambitious fintech platform play. This will see the app connect to and interface with a growing number of financial services and offer more of its own, something already evident in its recently launched savings and switching features. The company also plans to expand beyond U.K./Europe to the U.S. and Australia.

“Everyone is racing to the same goal,” says Hussey-Yeo, before describing the plethora of fintech startups trying to become the platform for users to manage their finances as partaking in an arms race. “There’s a shit ton of VC money going into the space, the best investors in the world. Everyone knows that a huge company will come out the other side, [but] it’s all to play for,” he says.

The word play, or rather, playful, might also be an apt description of Cleo itself. The chatbot has purposefully been given a rather overfamiliar personality, including being very reliant on the use of emoji and gifs, which Hussey-Yeo says the startup’s users absolutely love. He cautions me not to underestimate the importance of Cleo’s conversational style in helping the app compete purely from a user experience perspective, particularly amongst the digital natives it is targeting. (I’m told that a recent survey of around 1,000 Cleo users revealed that 77 per cent have stopped using their bank’s own app within three months, while the chatbot’s high retention rates were a big draw for investors.)

I’m also reminded that, in response to my scepticism towards the number of startups and established companies that initially jumped on the chatbot bandwagon, Hussey-Yeo once joked that I didn’t understand the potential of chatbots because, at just over the age of 40, I was too old. I doubt the millennial founder has ever used that line on 69-year-old Robin Klein, whom I understand led and championed LocalGlobe’s participation in Cleo’s latest funding round.

Original Article

Thriva raises £1.5M from angels, Seedcamp, 500 and LCIF to scale blood testing


By Mike Butcher (techcrunch.com)

When I gingerly held the little spring-loaded plastic device which would shortly be hurtling an extremely sharp needle towards my finger at a rate of knots, I wondered momentarily about Theranos. Here was a company led by a turtle-necked founder who’d promised angels would dance upon a pin, thus writing your future. Or, perhaps more accurately, the world upon a small spec of blood on a pin. It was a high-handed claim then. It still is. But the difference is this: I’d already undergone a long, detailed quiz by Thriva, the UK-based startup. They’d set my expectations. They’d already implied they could not (sorry) tell if I was going to die at 70. Just whether I should ease back on a few things and push hard on other, probably greener and crunchier, things. And maybe, just maybe, you ought to hit the gym more often, Mr Butcher?

Admittedly I probably already knew that. But two things occur to me about monitoring your health. Firstly, lots of people do not believe the data this until someone genuinely medical tells them (and if it’s a convincing, scientific company, then all well and good). That’s good for Thriva.

Secondly, the more educated amongst us genuinely love the scientific nature of the results. This is not a personal trainer or “wellness expert” sticking their finger in the air and telling you to do more press ups or eat more broccoli. This is bona-fide blood test results. So, eventually, when my results said I should watch the cholesterol levels and maybe cut out the butter and fried chicken, I believed it.

This is the crucial point about Thriva. It sets expectations and then delivers real results. Unlike another blood-testing start-up one might mention.

And this is possibly why it has also now raised £1.5 million in seed funding, announced at The Europas today in London. The investment round includes Alex Chesterman, founder and CEO of Zoopla, Simon Franks (LoveFilm founder), Taavet Hinrikus (TransferWise founder), as well as the early stage venture funds Seedcamp, 500 Startups and the London Co-Investment Fund (LCIF).

With a simple finger-prick blood test that can be done at home, with results within 48 hours, people can take control of their health, and they get a dashboard to track health changes over time.

The money will be used to expand their product range into looking at your gut health to heavy metals to hormones. As with similar companies, it is increasingly improving its dataset and applying machine learning to provide more powerful insights and predictions.

“Your blood can tell an amazing story about your health. Our mission is to ensure that understanding and tracking your biochemistry becomes as normal as counting your steps or jumping on the weighing scales,” says Thriva CEO Hamish Grierson. He believes this will be commonplace inside the next 5 years.

The questions are clear though. Can they get past the huge dip in engagement after a few months when people get tired of monitoring their blood? The results suggest they might. Secondly, perhaps there is the possibility of integrate this with national health services? That’s a long shot. But then again the “worried well” love to monitor themselves, so who needs that.

Original Article