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Ryft Partners With American Express to Drive Efficient Marketplace and Digital Platform Payments for Merchants

Fintech Finance News

Through this partnership, Ryft is enabling its eCommerce merchants within the UK to accept payments from Amex Cards, increasing payment flexibility. Ryft is a unified payment platform designed specifically to power marketplaces and B2B platforms. The end-to-end solution helps merchants meet their PSD2 compliance requirements, fully automates payouts, monetises transactions for digital platforms, and increases the number of payment options across digital marketplaces.

Launched in March, Ryft’s capabilities will expand to allow more cutting-edge digital platforms to add Amex as way to pay. As a global payments leader, Amex is an important addition to Ryft’s comprehensive suite of payment methods in its journey to scaling and growth.

Since its launch in 2022, the Ryft platform has experienced significant growth, processing millions of transactions across a variety of different digital merchant platforms. Constantly striving for optimisation and achieving the next level of innovation, the addition of Amex as a payment option allows Ryft to remain competitive in the market, giving its merchant customers the ability to welcome loyal and high spending Amex Cardmembers.

Speaking on the partnership, CEO and co-founder of Ryft, Sadra Hosseini commented: “We are delighted to announce our new partnership with American Express, a true leader in the payments industry. This collaboration marks a significant milestone for us, opening doors to exciting possibilities and reinforcing our commitment to delivering unparalleled value to our partners.

“Moving forward, we look forward to offering merchants innovative solutions that will redefine the way people experience payments. This partnership symbolises a powerful synergy between our two businesses, and we can’t wait to embark on this journey of growth in the marketplace space together.”

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Forbes

Lapse Snaps Up $30 Million Round As An Anti-Social Media Photo App

David Bloom (Forbes)

Lapse, a three-year-old photo-sharing app, announced it raised $30 million in Series A funding from a group of prominent venture-capital firms and angel investors led by Greylock and DST Global Partners. Greylock general partner Jacob Andreou, a former Snap executive, joined Lapse’s board.

“Lapse has captured the hearts and minds of a generation who isn’t sharing their lives with friends on other social platforms,” Andreou said in a release. "This is a testament to Lapse's founders Ben and Dan (Silvertown), who are a unique blend of art and science, and obsessed with building an authentic experience for young people to capture moments and share memories."

The raise represents a particularly hefty show of financial support at a time when high interest rates have choked off access to VC money for many startups. The key, suggested Dan Silvertown in an interview, is the company’s very different approach to the notion of being a modern social-media app, focused on “friends, not followers.”

The app has gone through a couple of major iterations, but is notable because it doesn’t allow users to immediately see photos they take, instead holding off making the images available while they “develop” for one to three hours. The delayed-gratification approach is inspired by film-based disposable cameras, much as Silvertown’s brother and co-founder Ben used during a 2021 trip to Vietnam.

The “development” delay for images “allows (users) to stay in the moment and keep enjoying that experience,” Dan Silvertown said. “Instead of taking 50 angles, it takes you back to disposable cameras, where you take some photos and then put the camera away and prioritize the experience.”

Once the image is available, the app doesn’t allow any fiddling around with endless editing tools, freeing the user from any expectations of creating a perfected image. When an image is presented, the user swipes right to share to friends on the app, left to archive, or delete. It simplifies the photo app to its bare essentials.

The app does apply a dozen different enhancements to the developed image, adding such film-like touches as lens flares and grain, even halation or color bleeding around bright light sources, Silvertown said.

“We always felt it was really important to have a look, a unique look,” Silvertown said. “We wanted to have an aesthetic that was unique.”

Lapse’s approach may be a well-timed orthogonal digression from the dominant ways that billions of people use more traditional social-media tools. After photos are taken in those apps, the user typically dives into editing, twiddling the image with seemingly endless tools using artificial intelligence and computational photography functions. The resulting images are optimized, but frequently look highly manipulated and even inauthentic.

“The direction we're moving is actually perpendicular to where the general market is moving,” Silvertown said. “We believe it's a lot more satisfying. AI gives a double-edged sword, with the ability to create massive amounts of content. But the photos (created with AI) are not particularly satisfying. It’s not a real memory you're solidifying. The image doesn’t tell you anything about the person who made it or what was going on when it was taken.”

Editing tools are available in the app, in the Lab section, but only if the image is being exported for other uses. Those tools include cropping and removal of the watermark the app applies to shared images.

The London-based Lapse will use the funding round to modestly expand its 20-person workforce, but remain focused on further improvements to the app experience, Silvertown said.

The company has raised a total of $42 million, including the Series A round, and is still building out the experience and user base, with no immediate investor pressure to make money, Silvertown said. When it comes time to generate revenue, the company will consider such common approaches as ads, in-app purchases and subscriptions.

Participants in the Series A also included re-ups from earlier rounds by GV, which is Alphabet’s venture fund, SpeedInvest, and Octopus Ventures, and angel investors Soleio, Naveen Gavini, Nima Khajehnouri, and Praveen Murugesan. The latter three are former senior executives from Pinterest, Snap and Uber, respectively.

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Sky News

SumUp rival Lopay swipes £6m seed funding in payments battle

Mark Kleinman (Sky News)

Lopay founder Richard Carter has received financing from BackedVC and Portage for his payments start-up, which he says is far cheaper to use than more established rivals, Sky News understands.

A British payments start-up which is muscling in on the turf occupied by bigger rivals such as SumUp has secured £6m in backing from a host of prominent venture capitalists.

Sky News understands that Lopay, which was founded by industry executive Richard Carter, has amassed the substantial seed funding from BackedVC, Portage, The Venture Collective and a number of angel investors.

The funding round will be announced publicly on Thursday.

Lopay, which has signed up more than 20,000 small businesses, enables SMEs to take card payments from customers more cheaply than the costs charged by more established payment providers.

In total, Lopay says it has taken nearly 10m customer payments since being founded last year.

It claims its fees are less than a third of those charged by PayPal and half of SumUp and Zettle's - three of the industry's biggest names - while giving customers the option of receiving cleared funds in their accounts immediately after each transaction.

The company estimates its pricing has saved merchants more than £1m in aggregate fees since its launch, and anticipates processing another £500m in payments during the next year, saving its customers more than £2.5m.

"Lopay's mission has resonated with thousands of small businesses and sole traders who are being squeezed simultaneously by high inflation and fragile customer demand," Mr Carter, a former executive at Ecrebo, a point-of-sale marketing platform, said.

"Against that backdrop, the big beasts of the card payment industry have been poor champions of small business.

"Their high fees mean too many small firms are paying up to 300% more than they need to - or waiting up to three business days - to receive card payments from their customers."

The £6m fundraising is large by comparison with most seed funding rounds, and comes amid a more challenging environment for early-stage companies to secure new capital.

Juliette Souliman, a principal at Portage, said Lopay was "breaking new ground in the archaic mobile POS payment industry, saving thousands of small businesses time and money as they navigate the post-pandemic business landscape".

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uktech.news

Pharmacierge to build 30ft medication-dispensing robot in London

George Simister (uktech.news)

Health tech firm Pharmacierge has announced plans to build a 5,500 sq ft dispensary at its London facility, with plans including a 30ft dispensing robot sending medication between floors via spiralling chutes.

The multi-arm robot will pick out the required medication and load it into chutes that travel up to the top floor of the pharmacy.

Inside the pharmacy, there will be zones designated for biological, refrigerated and controlled medications.

Edward Ungar, CEO of Pharmacierge, said: “While our mPrescribe technology now equally serves clinicians and patients outside of London, we felt very strongly that only a local investment would remain faithful to our brand values, our roots and the private medical community who have supported us through thick and thin.”

Pharmacierge told UKTN it expects the London facility and robotic arm to be up and running early next year.

The dispensary will be situated on Wimpole Street in Marylebone, London. With its nearby Harley Street location, the company will now operate 8,000 sqft of space.

According to Pharmacierge, it deals with more than 4,500 GP and consultants. Over 90% of the practices say it prescription software saves them “5-15 mins per prescription”.

Backers of the health tech business include Cazoo’s founder Alex Chesterman, who invested in its £1.25m round in 2021. Its most recent funding round came in April this year, when it scooped £2.4m, primarily from the doctors that use its service.

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uktech.news

Money management platform Mintago raises £3.9m

Oscar Hornstein (uktech.news)

Mintago, a fintech startup based in London, has raised $4.75m (£3.9m) for its employee money management platform.

Founded in 2019, Mintago has created a platform for businesses to support employees with their financial management goals.

Users can manage pension contributions and locate lost pension pots. Mintago also offers access to financial advisors, debt counselling and financial education programmes.

The company lists Superscript, Oddbox and Lucky Saint among the brands that offer Mintago access to employees.

“There has never been a greater need for businesses to support their employees’ financial wellbeing,” said Daniel Conti, co-founder, COO and CFO of Mintago.

“The cost-of-living crisis is a source of significant stress for millions of Britons, and this can naturally impact their work life – the best employers recognise this and are upping their support for staff by providing the necessary financial planning tools and access to advice, in turn building better relationships with their employees.”

The equity investment round was led by BlackLion Ventures along with Love Ventures and Cur8 Capital. The startup said it would put the new funds towards developing the underlying technology of the platform, as well as hiring in sales and marketing.

Mintago, which employs 30 people, has raised a total of £5.5m in equity funding since launch.

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uktech.news

Digital brand incentive platform WeGift raises £26m

Oscar Hornstein (uktech.news)

Digital payments startup WeGift has secured £26m in funding, a sizeable round for British fintech startups amid slowing later-stage investment.

WeGift has built a platform for brands to provide customers with digital rewards and incentives.

Working with companies like Nike, Aldi, and Airbnb, WeGift said the pay-out for its digital gift cards is instant and its API can be incorporated into partner brands across a wide range of industries.

“We’re building the world’s leading infrastructure for moving stored value, and these funds will help us accelerate our growth,” said WeGift co-founder and CEO, Aron Alexander.

“Innovations in pay-outs have been few and far between, leading to solutions that no longer match the speed with which business operates.”

Alexander added: “Our digital currency network gives corporate and platform users powerful tools to incentivize, reward, drive conversion, disburse funds and more.”

The Series B round was led by Element Ventures and also included participation from new investors Clocktower Ventures and Volution Capital, and returning investors CommerzVentures, AlbionVC, and SAP.

“[WeGift has] created a simple, elegant solution to an extremely complex problem, and they have fantastic traction,” said Mike McFadgen, a partner at Element Ventures.

“They’re well positioned to have a major impact on how value moves and commerce functions. We look forward to working with them in the years to come as they revolutionise payouts.”

The company’s previous funding round came in March 2021, when it received £8.7m.

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uktech.news

Stripe rival Ryft raises £1.2m for merchant payment system

George Simister (uktech.news)

Ryft has closed a seed round of funding that brings the total raised by the fintech startup to £1.2m for its automated next-day merchant payments system.

The Ryft seed round was led by SFC Capital, with further investment coming from the ex-founder of Shutterstock and the founder of LoveFilm.

The London-based company’s payment solution integrates into an online marketplace and accepts payments from all major cards, along with Google and Apple Pay.

The company competes with the likes of Stripe Connect, the marketplace payments integration created by Irish-American fintech giant Stripe.

Ryft claims that its solution comes “without the high fees and lengthy payout wait times”, with merchants receiving funds the next working day and Ryft charging a flat fee for each transaction.

“We are excited to work with Ryft in supporting marketplace businesses with a unified payment platform designed to power B2B platforms and provide a seamless experience for merchants and marketplaces,” said Ed Stevenson, investment manager, SFC Capital.

According to the company, its product adheres to PSD2 compliance rules, protect against FCA fines and comply with anti-money laundering rules.

Ryft was founded by Sadra Hosseini and Alex Mackenzie. The idea was inspired by their previous business restaurant ordering app Butlr, which went on to be acquired by OrderPay.

Sadra Hosseini, CEO and founder, Ryft, said: “We are both incredibly excited to be working with SFC Capital to further our ability to provide seamless support to marketplaces and merchants within the industry and continue to solve the current problems associated with complex money routines under PSD2 regulation.”

Payments startup Super this month emerged from stealth with a £22.5m pre-seed for its online checkout payments service.

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startuplanes.com

Flexa secures £2.30 million Seed investment led by Ada Ventures

Nicole Fernandes (startuplanes.com)

Flexa Careers, the platform bringing transparency to the hiring market, has raised a £2.3m ($2.9m/€2.7m) Seed Round to expand its global reach. The round was led by Ada Ventures and joined by Auxxo Female Catalyst Fund, angel syndicate HERmesa, and a wide group of angel investors.

Flexa has flipped the hiring process on its head; enabling companies to showcase what their working environments offer when it comes to flexibility and benefits, and be discovered by candidates who want to know up-front how the company operates and get a transparent look at what its working policies are before applying for a role.

Flexa vets and verifies companies through a two-stage benchmarking process; looking at everything from their approach to working location, through to what benefits are on offer, and then surveying how their current employees feel about working there.

Companies are then approved to showcase their jobs on the platform and people can filter opportunities by these criteria to find their perfect working environment in seconds.

73% of candidates say flexibility is non-negotiable and people are 257% more likely to apply to a company through Flexa versus a job traditional platform, according to Flexa’s research with YouGov. Flexa is enabling companies to build their brands as flexible, empowering employers, whilst increasing the discoverability of their vacancies and their ability to appeal to a more diverse audience.

Founded in early 2020 by Molly Johnson-Jones, Maurice O’Brien, and Tim Leppard, Flexa Careers now has over 450,000 users, and more than 150 companies headquartered all over the world have been approved to feature on the platform. Flexa Careers has already been used by candidates across 70 countries, but their core audience is centred in the UK and Ireland, where they originally launched. This funding will therefore be used to expand and solidify their global reach.

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techfundingnews

UK-based tinnitus relief app raises $3.3M funding

By Editorial Team (techfundingnews.com)

London-headquartered digital health company Oto focused on tinnitus, has raised a $3.3 million seed investment. This raise follows the pre-seed round in December 20221 and the completion of the W22 cohort of the prestigious Y Combinator programme.

Oversubscribed investment!

The oversubscribed round was led by Octopus Ventures (that invested in Intigriti and Delio) and supported by Goodwater Capital and Y Combinator with additional follow-on funding from Calm Storm Ventures and Bethnal Green Ventures.

Oto intends to use the proceeds of this round to double down on achieving precision product-market fit to accelerate towards profitability by ensuring that its products directly address the needs of what is an incredibly underserved community.

Kamran Adle, an investor at Octopus Ventures, said “For many, Tinnitus is a condition that they have little choice but to ‘learn to live with’. The Oto team, however, refuse to habituate and instead are providing a 10x cheaper and more convenient way to help people manage their condition. Though they probably don’t complain, we all know someone who suffers from tinnitus and have seen the effects it can have on an individual’s life. This is one of the reasons we wanted to support George, Ed and the entire Oto team as they tackle the market and provide an innovative digital solution to a long overlooked issue”.

Oto co-founder Dr. Ed Farrar said, “As a chronic condition that is not well understood and has no known cure, the impact of tinnitus can be far reaching for those affected by it, which makes this raise incredibly important to us. Achieving an oversubscribed round at any time is a huge achievement and something we’re immensely proud of. However, against the backdrop of the investment downturn, founding teams have to be more intentional about how funding is used.”

Supports people with tinnitus

Currently, tinnitus, characterised by ringing in the ears, affects around 50 million people in the US and UK, of which 20 million have intrusive tinnitus, a condition that can severely impact an individual’s life. Founded by Dr Edmund Farrar & Dr George Leidig, Oto is a digital health startup that helps people access evidence-based treatment for overlooked and underserved chronic conditions.

Living with tinnitus is tough. The Oto app teaches how to take control of the ringing using clinically proven techniques. Its mission is to provide instant access to help for anyone with tinnitus. Its first product provides psychological support to anyone with tinnitus. The team developed a unique solution based on their clinical experience and personal experience of the condition. Oto is the first venture-funded digital tinnitus solution.

Its unique, science-backed support programme via mobile app helps manage what can be an incredibly debilitating condition. The mobile app compiles and consolidates the latest therapy techniques to support people to maximise their quality of life with tinnitus. The platform has been built by an expert team of audiologists, doctors, therapists and researchers, who have decades of experience in managing tinnitus behind them.

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Sky News

Gen-Z super-app Cleo hits $500m valuation despite tech downturn

By Mark Kleinman (Sky News)

Sofina, a Euronext Brussels-listed investor, is leading an $80m fundraising by Cleo, a British-based app which has turned the US into its most important market, Sky News learns.

A British finance app aimed at Gen-Z consumers has hit a $500m valuation despite the turbulent backdrop which has afflicted technology companies since Russia's invasion of Ukraine three months ago.

Sky News has learnt that Cleo, which was founded by Barney Hussey-Yeo in 2016, has raised $80m in new capital from investors including Sofina, a listed tech investor which has backed companies such as Typeform and Graphcore.

The fundraising was orchestrated over a period of several months but was only finalised after pressure began to be exerted on the valuations of capital-hungry growth companies.

Cleo is a digital assistant which offers users proactive financial advice with a distinctive tone of voice that aims to avoid the jargon typical of consumer-facing offerings in the sector.

It has amassed an array of heavyweight backers in previous funding rounds, the last of which took place 18 months ago and raised roughly $40m for the company.

Sources close to Cleo said the new capital injection had been agreed at a valuation of about $500m - roughly five times the level of the December 2020 fundraising.

One insider added that the company's accelerating growth rates coupled with its low cashburn level meant it had been able to convince investors to back it at the new valuation.

Cleo now serves millions of young consumers in the US, and claims to be the only fintech founded in the UK before launching in the US and then making that its core market.

Raising capital now will enable Cleo to maintain and expand its service during an economic downturn that many economists believe could be protracted.

It also intends to increase its workforce from 140 full-time equivalent employees to approximately 220 by the end of the year.

The company's existing backers include blue-chip venture capital names such as Balderton Capital and LocalGlobe, with individual investors including founders of tech unicorns such as Skype and Wise.

Cleo declined to comment on the fundraising or its new valuation.

A Sofina spokesperson said: "We are excited to form this partnership with Cleo, a company and App that is truly loved by its users, on many of whom Cleo already had a positive impact.

"We are looking forward to the journey ahead, bringing fintech enabled personal financial empowerment to many more people worldwide."

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TechCrunch

Perlego raises $50M to build out its vision of being the ‘Spotify for textbooks’

By Ingrid Lunden (TechCrunch)

Spotify helped pave the way for a new model for consumers to listen to music: pay a monthly fee to stream whatever you want, with no need to own any physical or digital versions of it. Now, a startup called Perlego, which has been applying that concept to academic textbooks, has picked up $50 million to expand its business after seeing its platform boom through COVID-19. The London startup currently has 400,000 paying subscribers who get all-you-can-read access to some 850,000 titles — textbooks, fiction and other literature that students are assigned as coursework at universities and other higher-learning institutions. That catalogue, the startup says, makes Perlego the largest online textbook subscription service in the world.

Mediahuis Ventures, the VC arm of European media group Mediahuis, led the round, with participation also from Raine Ventures, the VC arm of Raine Group (the investment bank that’s overseeing the sale of Chelsea FC), and Evli Growth Partners. This round, a Series B, also had angel investors, such as the two co-founders of Kahoot, Jamie Brooker and Johan Brand, by way of their We Are Human fund; as well as backing from “strategic” publishers.

Perlego doesn’t disclose which strategics those might be from the long list of its current partners. Perlego (Latin for “I read”) works with 5,000 education publishers, including Cengage, Routledge, Cambridge University Press, Elsevier and Harvard University Press.

Gauthier Van Malderen and Matthew Davis founded the company in 2017, when, as newly minted university grads, they were inspired to build a platform to address what they felt was an acute financial issue for students: the very high cost of textbooks.

“This was a pain point of mine,” Van Malderen said, recalling how he would typically pay £200-£300 for a single book, only to “read one assigned chapter and then never use it again.” It was not unlike how you might want to hear a few songs but not a full album by a recording artist. “So I thought, surely a subscription model would work here.”

The high cost of textbooks is something that many a student of higher learning will know all too well. A survey from the Public Interest Research Group in the U.S. found that in 2020 some 65% of college students reported that they held off buying school textbooks because of the prices, despite knowing that it would likely impact how well they did in the courses. Van Malderen also cited a stat (but didn’t give me the source) that some 23% of students drop classes because of the cost of the books required to take them.

Vitl has secured listings in over 2,000 stores in the past year, including Sainsbury’s, Boots and most recently, Holland & Barrett.

Mr Relph said: "We’re delighted with the closing of an oversubscribed investment round and the further commitment of existing and new investors. It allows us to continue to expand our product range and distribution at a time when nutrition and wellness has become more relevant than ever.

"The pandemic reminded us all how important our health is and with our personalised products, on the shelf range and at home tests, we hope to help even more people optimise and personalise their nutrition."

“The market for educational content has lagged other types of content, which have successfully digitized and offered new models of consumption to users. We believe that adoption of an online subscription model in this category is inevitable, and that Perlego’s platform and business model will lead the education industry in this digital shift,” said Elizabeth Brillman, VC partner at Raine Ventures, in a statement. “We are excited to partner with Gauthier and the entire Perlego team in this journey.”

Initially, he said, publishers were a little slower, but not uninterested, in engaging with the startup to see what might come of the relationship. As Van Malderen described it, while publishers have had a pretty firm grip on publishing books for a predictable market space — those in education — the situation had some significant cracks in it from their perspective.

“A big issue for publishers is that they price textbooks high in part to offset piracy,” he said. (And he didn’t add this, but the more limited publishing runs and specialized nature of the titles clearly also play a role.) But he added what hurts them more is not illegal but equally disruptive and something publishers were keen to combat: the second-hand book market. Those two forces have actually been on a collision course for some time. Perlego claims that in 2021, it intercepted 2.1 million searches online for “free” pirated textbooks.

“A model like ours not only prevents piracy, but it reduces the need for second-hand books,” he said.

Instead, the business model has been built around the idea of making the book subscription not free but at least considerably more affordable for students, or even institutions that might want to partner with Perlego to give their students access to the service as part of their offering to them. The company currently has a two-week free trial before users have to either pay monthly (£12 in the U.K./$18 in the U.S.) or annually (which works out to £8/$12 per month). But it does not have a freemium tier à la Spotify, as it’s still considering how that might look.

“Personally, I am against ads,” he said. “We want to create a clean space without the stress of advertising. We are not keen to have advertising in the loop.” He said that potentially one idea might be to create tiers of books instead, where some are free to use, and others require premium subscriptions. In terms of publishers, it works on a revenue share model, where 65% of its subscription revenues are in turn distributed to publishers it works with, with an additional commission paid based on consumption of work and the value of the book. Over time, he said thety are also considering how they might work with publishers also to sell actual hard copies of books that people might like to own for life.

As with other companies that have built businesses around e-books, Perlego isn’t just extolling the virtues of lower pricing, but also highlights (pun intended) the advantages of the digital interface for other reasons: Van Malderen says that the books become part of a “private digital library” that is more dynamic (and easier to carry around) than the analogue version, and where (in tech terms) that library becomes a kind of platform in itself: you have the ability to save your own annotations, and for people to share annotations with each other, as well as add other documents, and other kind of media, beyond Perlego books to those libraries.

“Our vision is to be an ecosystem to find all your course material, including videos or PDFs,” he said. “We believe that could also be a place for instructors to carry out your work assignments and grading, too, streamlining for everyone.” It is also not the only one looking at how to leverage digital platforms to disrupt the textbook industry. Chegg has also built out a rental/purchasing portal for online textbooks; Open Library and Libre Texts are two others; but none of these are as extensive in terms of catalogues and functionality as Perlego — not yet at least.

The model is one that seems to be finding some interesting traction with the three sides of Perlego’s marketplace all growing especially in the last two years, at time when online learning has taken a hold of the world in the wake of the COVID-19 pandemic. It now has linked up with 6,000 institutions to fulfill class and course syllabi across 172 countries. Some 40% of the students that use Perlego are in the U.S. In 2021, Perlego saw 450% subscriber growth, and publishers have also warmed to it: its book catalogue has gone up 166% in the last year, and has grown by more than 500,000 since 2019, when it was at a mere 300,000 titles.

“Perlego is changing the equation for university students, helping them access course resources, while also enabling publishers to move online and harness new revenue opportunities. We’ve watched the company soar since our first investment, and are excited to double down on our commitment to the company in their Series B. Making independent information accessible to society is at the heart of what we do. Mediahuis is pleased to extend its mission further into higher education.” said Paul Verwilt, COO at Mediahuis, in a statement.

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Business Live

Former THG chairman joins £6.2m investment into personalised nutrition platform Vitl

By Jon Robinson (BusinessLive)

A former chairman of THG and CEO of the Co-operative Group has taken part in a £6.2m investment into a personalised nutrition platform.

Richard Pennycook has backed London-based Vitl which was founded by Jonathan Relph and launched in 2015.

The funding round was led by Ornament Health AG, a Swiss-based health-tech investor, while the company is also backed by Samos Investments, Nogra Pharma Ltd and C4 ventures.

Mr Pennycook was CEO of the Co-operative Group from 2013 to 2017 and chaired THG (then known as The Hut Group) from 2013 to 2019.

He has also held roles at the likes of JD Wetherspoon, Welcome Break and Morrisons.

Mr Pennycook is currently chairman of Boparan Holdings.

Vitl has secured listings in over 2,000 stores in the past year, including Sainsbury’s, Boots and most recently, Holland & Barrett.

Mr Relph said: "We’re delighted with the closing of an oversubscribed investment round and the further commitment of existing and new investors. It allows us to continue to expand our product range and distribution at a time when nutrition and wellness has become more relevant than ever.

"The pandemic reminded us all how important our health is and with our personalised products, on the shelf range and at home tests, we hope to help even more people optimise and personalise their nutrition."

Snezhana Gurina, executive director of Ornament Health AG, added: "Ornament is based on the ideologies of preventative medicine and individualized approach for each user.

"These principles are similar to those which Vitl are based on. For that reason, we are delighted to help contribute to the brand's growth and development."

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thetimes.co.uk

Vitamins business Vitl gets an additional £6.2m cash injection

By Jon Robinson (BusinessLive)

Vitl, a personalised vitamins business, has raised £6.2 million. Current and previous investors include Alex Chesterman, the founder of Zoopla and the New York-listed Cazoo, and Richard Pennycook, a former boss of The Co-operative Group.

The business was founded in 2015 by Jonathan Relph, a former City banker who, through his coverage of medical technology companies, noticed the shift towards people using more data through their fitness apps to make health decisions. Relph believed that he could offer a better product than the generic multivitamin supplements advertised on buses on his bicycle commute home.

Vitl tailors its nutritional supplements based on customer responses to a five-minute questionnaire. It has a website to sell directly, as well as via Sainsbury’s, Boots and Holland & Barrett.

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HearingHealthMatters

UK startup Oto closes £510,000 pre-seed raise with Y Combinator selection

By Hearinghealthmatters.org

LONDON, UNITED KINGDOM — Digital health startup Oto has been selected to join the globally renowned Y Combinator accelerator program at the same time as successfully closing their pre-seed raise.

As one of only 15 UK healthtech startups selected since Y Combinator’s launch in 2005,1 Oto’s digital tinnitus support platform will follow in the footsteps of some of the world’s most successful tech disruptors including, Airbnb, Dropbox and Reddit.

Oto aims to transform the delivery of support for tinnitus, using accessible, science-backed and evidence-based digital tools. There is currently no cure for tinnitus, which affects up to 1 in 7 people around the world, and is commonly left unmanaged or poorly managed, which causes significant distress for those living with the condition. According to the UK’s National Institute for Health and Care Excellence guidance, recommended first line treatment for tinnitus-related distress is digital cognitive behavioral therapy (CBT), however until Oto was launched, there has never been a definitive solution.

Digital Tinnitus Management

Oto’s mobile app compiles and consolidates the latest therapy techniques to support people to maximize their quality of life with tinnitus. The platform has been built by an expert team of audiologists, doctors, therapists and researchers, who have decades of experience in managing tinnitus behind them. Its co-founders include tinnitus patients themselves and former military doctors Dr Edmund Farrar, Dr George Leidig and Specialist Registrar in Ear, Nose and Throat Surgery Dr Jameel Muzaffar.

This week Y Combinator also unveiled a new funding increase for YC companies, more than quadrupling from $125,000 to $500,000. As part of the Y Combinator program, the Oto team will take part in a virtual bootcamp (virtual due to COVID) starting in this month (January 2022). The three-month stint culminates in an end of cohort Demo Day, where the startup teams will present to a carefully selected audience of investors, looking to invest in the next tech game-changer.

Alongside the Y Combinator news, the startup has also announced the close of a £510,000 pre-seed raise with numerous investors including:

  • Acequia Capital

  • West Midlands Academic Health Science Network SME Innovation Fund

  • CalmStorm Ventures

  • Bethnal Green Ventures

As well as notable angels:

  • Simon Franks

  • Errol Damelin

  • Alex Stephany

  • Matt Robinson

  • Ian Hogarth

This investment will be used to accelerate clinical validation, growth and strengthening the international user-base. As well as consolidating the B2B2C offering, the funding will enable several key hires who will spearhead product development, ahead of a seed round planned for 2022.

“It is a huge achievement for us to be accepted onto Y Combinator and we’re incredibly excited to be a part of such a prestigious global movement that has an unparalleled track record for success. I know personally just how debilitating tinnitus can be and so as a team, we’re looking forward to learning from the very best innovators and entrepreneurs as we explore new ways to accelerate our growth and make a difference in the lives of as many people living with tinnitus as possible. Coupled with our pre-seed investment round, 2022 is shaping up to be a truly formidable year for Oto and for the tinnitus community.”

–Dr Edmund Farrar, co-founder of Oto and former RAF doctor



“Having also experienced the impact of tinnitus myself, I know first-hand how excruciatingly difficult it often is to just get through the day,” said Dr George Leidig, co-founder of Oto and former Royal Navy doctor. “The incidence of tinnitus is rising, and yet it is an isolating condition which is overlooked and traditionally poorly managed. We believe that effective therapy should be accessible to everyone with tinnitus so our mobile app allows anyone to access a fully-fledged targeted CBT programme created by tinnitus experts. With Y Combinator’s support we hope to enable the increasing number of people living with tinnitus to find practical and helpful tools to live a better quality of life.”

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finextra.com

Collective Benefits bags $10 million investment from Prosus Ventures

Collective Benefits

Collective Benefits, an insurance and benefits marketplace for independent workers, today announced a US $10 million investment from Prosus Ventures, the venture investing arm of Prosus, one of the largest technology investors in the world.

Collective Benefits offers much-needed insurance and benefits for independent workers across sectors. This includes sick pay, accident and injury insurance, wellness, financial and education support, as well as a perks marketplace. This new funding will allow Collective Benefits to expand its suite of products and services for independent workers, as well as continue to expand its presence as the market leader across Europe and beyond.

Prosus has been investing in and operating platforms that depend on independent workers for nearly a decade, including ride sharing, food delivery and home services. This investment highlights the industry’s increasing focus on worker wellbeing and social impact in building a more sustainable future for independent workers.

“We're delighted to welcome Prosus Ventures as an investor in Collective Benefits,” said Anthony Beilin, CEO and co-founder at Collective Benefits. “They have significant expertise investing in and operating platforms that work with independent workers, and are an ideal partner to set the stage for Collective Benefits’ next phase of growth. We are transforming a hundred-year-old industry to finally serve the real needs and wants of the growing independent workforce. With this fresh funding, we’re one step closer to realising our vision to create valuable benefits for independent workers.”

The only provider focused exclusively on insurance and benefits for independent workers, Collective Benefits has experienced solid traction since launching less than 18 months ago and is now live in over 20 markets, serving more than 200,000 members. The company’s vision is two-fold: to be the marketplace for independent workers, allowing them to enjoy all the benefits that employers would traditionally offer to full-time employees, and be the go-to partner for independent worker platforms, giving them a tangible solution to provide these protections and benefits to their workers.

“The pandemic has accelerated the momentum of flexible and independent work,” said Sandeep Bakshi, Head of European Investments for Prosus Ventures. “Collective Benefits is in a unique position at the forefront of the demand for independent worker benefits. The company’s mission fits well within our investment thesis to find transformational technology solutions that create a meaningful impact by addressing large societal needs. We see clear opportunities for expansion across the independent economy and we’re excited for what’s to come.”

A significant and increasing portion of the workforce is employed through independent work. Currently, 96% of independent workers are without any form of income protection and over 50% have less than £200 in savings. In the European Union alone, nearly 24 million people, or 11% of the EU workforce, have provided services for a digital platform at least once. This vulnerability creates an unsustainable situation, not just for the workers, but also the companies that depend on them. As such, platform companies are looking for sustainable business solutions from which all parties can benefit. Offering more inclusive workplace benefits are a necessary next step, enabling platform companies to scale, attract and retain the best talent.

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The Telegraph

Cazoo founder backs new prescription app

By Hannah Boland (Telegraph)

Serial entrepreneur Alex Chesterman is throwing his weight behind an app that lets GPs prescribe medicines and delivers them to patients the same day

Pharmacierge has raised £1.25m from backers including Mr Chesterman, the founder of car site Cazoo and property portal Zoopla, as well as Simon Franks, the co-founder of LoveFilm, with funds to be used to roll out the app more widely across the UK.

The company has developed an e-prescription app through which clinicians can prescribe medication to patients, in a system it says cuts out much of the admin for doctors and removes the need for paper prescriptions.

Private medical practices spend as much as two hours a day on admin tasks related to prescriptions.

Medicines can then either be delivered that same day to people within London, or the next day across the rest of the UK.

Pharmacierge said demand for its services had ballooned during the pandemic, when many people had not wanted to visit pharmacies in person and clinicians had worked remotely.

It has worked with more than 3,000 clinicians so far. It comes amid a wider shift within healthcare systems to offer more virtual care.

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EU-Startups

London-based Webiny nabs €2.9 million to help developers build serverless solutions in minutes

Charlotte Tucker (eu-startups.com)

London-based Webiny, an open-source platform providing developer tools, libraries, ready-made apps and processes specifically created for serverless development, has raised €2.9 million in a seed funding round led by Microsoft’s venture arm M12, with notable participation from Samsung Next, Cota Capital, Episode 1 and YCombinator.

Founded in 2019, Webiny was originally conceived in the context of a serverless content management system. However, the startup states that as users and customers began requesting to use its serverless platform for more, such as building full-stack applications, scalable and performant APIs and fully control the security aspects around those, they pivoted. Webiny became a platform to help companies adopt serverless within their organisations..

With feedback from hundreds of organisations that have tried out Webiny, they decided to split Webiny into 2 different products. The serverless CMS, from before, and a new serverless application framework focusing on building full-stack apps and GraphQL APIs.

Webiny’s serverless application framework provides developers with a performant and ready-made architecture running on fault-tolerant serverless infrastructure, designed to handle millions of users. Previously, to reach this level of performance, scalability and redundancy, organisations had to have entire teams of experts to build and manage such a solution, now, these capabilities are available within minutes.

Having now closed this funding round, the team will use the boost to develop its platforms further, and improve their documentation and developer experience.

Sven Al Hamad, CEO and co-founder, commented in a recent statement: “None of this would have been possible without a team that truly believes in our mission supported by our existing investors and advisors. It’s a combination of many great things that came together at the right point in time, fueled by the amazing support and feedback coming from our amazing community.”

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BusinessLive

Beckley Psytech completes oversubscribed $80m (£58m) fundraise to develop portfolio of psychedelic medicine breakthroughs

By BusinessLive

Upsized and oversubscribed Series B financing brings healthcare and science focused venture capital

Aims to support acceleration of clinical development of low-dose psilocybin in SUNHA and 5MeO-DMT in other neuro-psychiatric indications

OXFORD, England--(BUSINESS WIRE)--Beckley Psytech, a private company dedicated to addressing neurological and psychiatric disorders through the novel application of psychedelic medicines, today announced it has successfully completed an oversubscribed Series B financing, raising $80m (£58m) from venture capital (VC) investors to fund its promising research programmes. The Series B financing was initially set at $50m and was upsized to $80m due to overwhelming interest from investors to support Beckley Psytech in broadening and accelerating the clinical development of its innovative research pipeline.

Beckley Psytech will use the proceeds to complete the ongoing Phase 1b trial with low-dose psilocybin in patients suffering from SUNHA, a rare and debilitating headache condition estimated to affect 45,000 people in the US and Europe, and to initiate a Phase 1 dose-ranging study on a novel formulation of intranasal 5-MeO-DMT before starting a Phase 2 trial in Treatment Resistant Depression. The funding will also support the expansion of the company’s pipeline with new, unique and proprietary psychedelic compounds.

The financing round is led by Integrated, a healthcare focused VC which partners with companies and entrepreneurs that are transforming the health and well-being of communities around the globe. The science-focused investor consortium includes Prime Movers Labs, which funds breakthrough scientific startups; Adage Capital Management LP, a Boston based institutional investor; Palo SantoDelphi VCLeafy TunnelNegev Capital; and existing investor Bicycle Day Ventures.

Cosmo Feilding Mellen, CEO of Beckley Psytech, said: “My life’s passion has been to unlock the therapeutic potential of psychedelics as I believe these compounds could help millions of people around the world. The progress Beckley Psytech has made in attracting exceptional talent to the team and advancing our ambitious clinical development programmes over the past two years has been tremendously exciting. As we embark on our next phase of growth, our strong syndicate of expert investors will support us in bringing much-needed innovative treatments to patients suffering from neurological and psychiatric conditions."

Jay Newmark, general partner of Integrated, commented: “Cosmo and his dedicated team at Beckley Psytech have created an exceptional research and development platform. Their highly differentiated approach, which treats not only large indications such as depression but also rare indications such as SUNHA, is allowing accelerated access to market. We deeply appreciate our value alignment with this team and eagerly anticipate their progress in improving access to these medicines.”

Dr Amy Kruse, partner, Prime Movers Lab, said: “It is nearly impossible to find a team with more experience in developing psychedelic medicines for neurological conditions than the one at Beckley Psytech. The COVID-19 pandemic brought mental health to the public’s attention in a profound way. The excitement around psychedelics in the mental health market is very real because they are transformative medicines that will soon make their way into the lives of millions of people who desperately need them.”

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CityAM

Collective raises £6m with Silicon Valley NFX, amid growing demands for gig worker benefits

Farah Ghouri (cityam.com)

Collection Benefits, a UK insurance tech startup, have raised £6m in a round led by a Silicon Valley venture fund, as the demand for insurance and benefits in the gig economy continues.

The year-old insurance provider also announced the appointment of Pete Flint OBE, the co-founder of Lastminute.com and a general partner at NFX, as a new board member.

Collective is an insurance provider designed specifically for independent, freelance workers in the gig economy which also works directly with on-demand platforms such as TaskRabbit.

Since being founded the company has insured 200,000 people across 20 countries with flexible insurance and benefits specifically for independent workers, from sick and injury pay to family and compassionate leave.

The London-based insurtech said the investment will help fuel its expansion across Europe as it continues to fill the gap between the flexibility of gig work with the lack of protections independent work naturally comes with, with insurance cover.

The business said the injection of cash will allow it to create more products, such as public liability insurance and pensions, to protect independent workers’ physical, mental and financial wellbeing.

Pete Flint OBE, general partner at NFX said: “We like to partner with the startups that will define their category.”

He described the insurtech company’s services as “the missing safety net for independent workers – in a way that creates a win-win outcome for both independent workers themselves, and the platform companies they work with.”

The investment in Collective will be “an opportunity to transform both the insurance and the on-demand economy” with a blend of ground-breaking tech and razor-sharp insurance capabilities,” said Flint.

It comes a year after Collective raised a £3.3m seed round, taking the total raised since it was founded to just under £10m.

Alongside NFX, Collective has enjoyed continued support from investors including Stride VC, Delin Ventures, Insurtech Gateway and executives from Uber, Just Eat and Urban.

Collective chief executive officer Anthony Beilin said “We see NFX’s investment in Collective as a major vote of confidence in our ability to solve the protection gap problem for tens of millions of independent workers across the UK and Europe.”

Beilin, who is also a co-founder of the startup, came up with the idea of an insurance solution for independent workers while he was himself on sick leave with a host of generous benefits from a large corporate insurer.

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TechCrunch

Direct-to-consumer orthodontic startup Impress raises $50M to scale across Europe

By Mike Butcher (techcrunch.com)

As the famous phrase goes, “software is eating the world” — and now software is eating dentistry. Or, perhaps more accurately, the arena of orthodontics — the specialty of dentistry that deals with things like braces — is slowly but surely being digitalized.

To whit, Impress, a Southern European player in direct-to-consumer orthodontics, has raised a $50 million Series A funding round led by CareCapital (a dental division of Hillhouse Capital in Asia), along with Nickleby Capital, UNIQA Ventures and investors including Michael Linse, Valentin Pitarque, Peter Schiff, Elliot Dornbusch and others. All existing shareholders, such as TA Ventures and Bynd VC, also participated.

Impress is an homage to the direct-to-consumer startups in this area in the U.S., such as SmileDirect, and now plans to scale across Europe from its existing bases in Spain, Italy, Portugal, the U.K. and France.

The company was founded in 2019 in Barcelona by orthodontist Dr. Khaled Kasem and serial entrepreneurs Diliara and Vladimir Lupenko.

Speaking from Barcelona, Lupenko told me that the idea was to “combine the best orthodontic tradition with the most innovative technology in the sector.”

As things stand, most of the time, consumers can usually only access cosmetic teeth alignment treatments or orthodontic medical treatments in conventional clinics. The new wave of clinics employs 3D scans and panoramic X-rays to check nerve and bone health.

Impress’s model is to offer these high-quality medical treatments directly to consumers, by developing its own chain of orthodontic clinics, which also put an emphasis on design and a “modern” patient experience, it says.

As Diliara Lupenko says: “We didn’t copy what other companies in the space were doing and approached the market from a different angle from the get-go. We doubled down on the doctor-led digital model which brought us way better conversion rates and treatment quality even though on paper it looked complex in the beginning. It’s still very complex but we were able to crack it and scale exponentially.”

Impress now has 75 clinics in Spain, Italy, the U.K., France and Portugal, which optimize costs and automate key parts of the value chain.

It now says it’s approaching €50 million in annual run-rate and is projected to grow to €150 million of revenue in 12 months.

Andreas Nemeth, managing partner of UNIQA Ventures GmbH commented: “Impress’s customer-centric focus, as well as its demonstrated ability to blitzscale, attracted us to the business. Vladimir and his team leverage technology to create a seamless customer journey for invisible orthodontics and optimized their cost structure in a unique way using software.”

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Business News Australia

Buy-now pay-later for household bills Deferit raises $15m in Series B

By Buiness News Australia

An oversubscribed Series B funding round raising $15 million will accelerate international growth and bolster the team of Sydney-based bill payment platform Deferit.

Led by existing investor Carthona Capital and new investor Alceon Group, the $15 million raise will give the buy-now pay-later (BNPL) platform for bills a shot in the arm, after Deferit witnessed 150 per cent growth in the past 12 months.

The platform, which doesn't fund discretionary purchases but helps users manage household bills such as telecommunications, energy and car registrations, has already passed milestones of 250,000 users and helped Australians pay off over $100 million in bills.

Deferit CEO and co-founder Jonty Hirsowitz (pictured right) said the funds would be used to accelerate the company's growth via marketing and partnerships, and to grow its team with new hires.

"Our total focus is executing our vision to help more Australian's pay more bills on time and we're delighted with the support of Carthona Capital and our existing and new investors including Alceon Group," Hirsowitz said.

According to co-founder Mat Blas (pictured left), Deferit addresses a unique segment of the BNPL market, giving customers flexibility with bill payments by enabling them to be paid off in four fortnightly instalments.

"In the bill payment vertical we're addressing a different consumer need and pain point," says Blas.

"Consumers want and need flexibility around moving their payment dates and getting their budget on track and that's what we're allowing users to do: across all major billers; as any bill arrives; at the click of a button."

"The Deferit team led by Jonty Hirsowitz and Mat Blas have proven they can scale the business and manage risk and we believe they have the product and vision to make Deferit a lead player in the $211B Pay Later vertical of everyday bills," adds Carthona Capital partner Dean Dorrell.

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Berkley Psytech

Beckley secures landmark clinical trial approval

By Beckley Psytech

Beckley Psytech, a private company dedicated to addressing neurological and psychiatric disorders through psychedelic medicine, has received Clinical Trial Authorisation (CTA) from the UK Medicine and Healthcare Products Regulatory Agency (MHRA) to explore the effects of psychedelic agent psilocybin for treating short-lasting unilateral neuralgiform headache attacks (SUNHA), a rare and debilitating headache condition.

The upcoming Phase 1B study plans to enrol up to 12 patients suffering from SUNHA, a disease belonging to a group of headache disorders called the Trigeminal Autonomic Cephalalgias (TACs), considered one of the most painful disorders known to mankind and estimated to affect approximately 46,000 patients in the US, Canada and the G5 from Europe. There are currently no approved treatments for SUNHA, which is characterized by short-lasting headaches that range from severe to excruciating and may occur over 100 times a day.

This landmark clinical trial, the first researching the effect of psilocybin on SUNHA patients, will evaluate the potential therapeutic benefits of the psychedelic compound in treating this disabling condition. Beckley Psytech is also evaluating the use of wearables for data capture in this clinical trial.

Approval of Beckley Psytech’s psilocybin clinical trial is the latest achievement in its mission to develop a fully licensed psychedelic medicine pipeline, following the company’s successful private fund raising of £14m in December 2020. The company is also developing synthetic 5-MeO-DMT, a unique psychedelic agent with a short duration of action, in the treatment of neuropsychiatric diseases, expected to enter the clinic in 2021.

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uktech.news

LoveFilm co-founder backs former army officer startup in £1.3M funding to protect people’s privacy

By Staff Reporter (uktech.news)

Investors including Force Over Mass Capital, the FCA regulated venture capital firm focused on early stage technology investments across the UK and Europe, Simon Franks one of the co-founders of LoveFilm, Eric Salama former CEO of Kantar and Innovate UK have recently came together to back a new London-based startup Glimpse Protocol.

The tech startup was founded by Mark Stoter OBE, a former British Army Intelligence officer, and his cyberwarfare colleagues. They’re taking a stand to protect people’s privacy by developing new tech that delivers accurate digital ads without the need for consumer data.

Raised £1.3 million

Glimpse Protocol has secured a £1.3 million seed investment round which the company plans to use to grow its engineering team and capitalise on the success of pilots completed across 2020.

Mark Stoter OBE, CEO, and co-founder said, “Our vision for Glimpse Protocol is to set new standards for privacy in advertising, becoming the kitemark that consumers can trust. This investment will enable us to roll out our technology that delivers valuable, effective advertising while respecting consumer privacy. With consumers, regulators, and tech giants taking action on data privacy, the digital advertising industry is seeking a solution that can weather technical changes and increasingly stringent privacy requirements. Unlike our competitors, who offer partial stopgaps, Glimpse Protocol provides a uniquely clear vision of how the problem can and must be tackled.”

He launched the company in 2019 along with Tim Holmes-Mitra MBE, and Alasdair Macdonald to tackle digital advertising’s biggest challenge: ensuring brands can reach their customers without breaching their privacy or the law.

Basically, Glimpse Protocol uses a unique combination of edge processing and novel cryptography to ensure consumers can never be traced or de-anonymised.

By guaranteeing privacy and cutting out 3rd party data sources, the UK company offers +30% ROI to brands and can extend reach to previously closed-off audiences.

Simon Franks, the investor, said: “Digital advertising needs to be re-shaped both for the good of the public and also for advertisers. Glimpse Protocol’s approach is exciting and timely and has the potential to disrupt an industry by allowing advertisers to reach the audiences they need but in an ethical way that respects consumer privacy and pays publishers a fair price. It’s a real breakthrough and I’m convinced that they will be both a commercial success but also a champion for the consumer. I am very proud to be a part of their journey.”

Eric Salama, investor and former CEO of Kantar, said: “I’m delighted to participate in Glimpse’s seed round. Consumer Privacy is becoming a more and more central issue by the day and Glimpse is one of the few platforms combining effective advertising tools with complete respect for consumer privacy. It allows the ad industry to serve brands and publishers in an ethical way.”

Glimpse Protocol has already developed an exciting partnership with Iconic Labs Plc giving access to premium platforms including JOE Media. Commenting on the collaboration, Iconic Labs COO Samuel Regan Asante commented, “We are excited by our partnership with Glimpse Protocol who are leading the way in cookie-less technologies in the Adtech industry. Iconic Labs is aiming to establish itself as a leader in both the tech and media fields and Glimpse Protocol’s technology presents the perfect balance of the two.”

Further, Glimpse Protocol is a Tech Nation Rising Star regional 2020 winner and a participant in the Founders Factory accelerator programme.

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thegrocer.co.uk

Fast grocery delivery app Weezy plots expansion after $20m fundraise

By Alec Mattinson (thegrocer.co.uk)

UK-based fast grocery delivery app Weezy is planning to roll out its services across London and further afield after raising $20m (£14.7m) in growth funds.

The app-based supermarket, which promises groceries within 15 minutes of ordering began to deliver in London during the summer after securing £1m pre-seed investment.

Now it is looking to scale up operations after raising $20m in Series A funding, led by New York-based venture capital fund Left Lane Capital.

Also participating are UK-based fund DN Capital, earlier investors Heartcore Capital and angel investors, notably Groupon founder Chris Muhr.

The funding will help expand the company’s London-based team by 50 employees over the next four months, in addition to extra fulfilment centre staff.

Weezy is opening two fulfilment centres in Lambeth and London Fields this month, adding to its existing locations covering Battersea, Clapham, Fulham and Chelsea.

It plans to open 40 more UK sites by the end of 2021.

Since its launch in July 2020, Weezy has delivered fresh produce and household items to thousands of customers, using pedal cycles or electric mopeds, in less than 15 minutes on average charging £2.95 per delivery.

Weezy helps busy householders to shop for groceries quickly and says it “has proved to be a lifeline for all age groups during the coronavirus pandemic”.

Kristof Van Beveren, co-founder and CEO of Weezy, commented: “People are no longer happy to wait around for deliveries, and there is strong demand for a more efficient service. Weezy customers love the friendliness of our team, the quality of our produce, and our quick, accurate delivery times. This new funding round will allow us to expand the team and our footprint to bring Weezy to more customers across the UK.”

Harley Miller, managing partner of Left Lane Capital, added: “Weezy’s founding team have the right balance of drive, experience and temperament to lead in e-commerce innovation and convenience within the UK grocery market and beyond. It is an honour to partner with them on this journey and help them solidify their first-mover advantage in London.”

Seed investors in the business include former Ocado head of retail Jon Rudoe, who as digital and technology director at Sainsbury’s founded Chop Chop and SmartShop; and Onefinestay co-founder Greg Marsh, an early backer of Deliveroo.

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tech.eu

UK-based Beckley Psytech raises £14 million to advance drug discovery to clinical trials

By Annie Musgrove (tech.eu)

Beckley Psytech, a UK psychedelic medicine company with ties to drug policy think tank the Beckley Foundation, has raised £14 million to turn certain drugs into licensed pharmaceutical medicines.

The equity round, which follows on from £3 million of funding raised in May, comes from Noetic Psychedelic Fund and Bail Capital, who are joining existing investors Jim Mellon and Richard Reed.

This investment will help the company power through its drug development pipeline, specifically exploring the use of 5-MeO-DMT, a synthetic substance that could treat neuropsychiatric diseases. The company is actually preparing to begin its Phase 1 clinical trial – a ground-breaking regulatory standard clinical trial on 5-MeO-DMT.

The team will also explore other psychedelic agents that could treat so-called ‘orphan diseases’, those that are too rare to be lucrative enough for typical pharmaceutical companies.

Beckley Psytech was founded last year by long-time psychedelic researcher Lady Amanda Feilding and CEO Cosmo Feilding Mellen, as a spin-out of the foundation that’s been around since 1998. Its Scienctific Advisory Board includes Dr. Robin Carhart-Harris from Imperial College London, Prof. Matthew Johnson from Johns Hopkins University and Prof. Guy Goodwin from the University of Oxford.

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reuters.com

Ouster, maker of self-driving tech, agrees $1.9 billion deal to go public

By Joshua Franklin, Paul Lienert (reuters.com)

(Reuters) - Ouster Inc, a U.S. startup that makes lidar sensors for self-driving cars and smart cities, said on Tuesday it has agreed to go public through a merger with special purpose acquisition company (SPAC) Colonnade Acquisition Corp.

The deal values San Francisco-based Ouster at around $1.9 billion and makes it the fifth lidar manufacturer this year to agree a SPAC merger to go public, following on from Velodyne Lidar Inc, Luminar, Innoviz and Aeva.

Ouster sees its digital lidar technology as having practical applications beyond autonomous vehicles and extending to areas such as drones, smart cities and robotics, according to company co-founder and Chief Executive Angus Pacala.

“The vision of the future that we’re pushing towards is lidar on every vehicle on earth, every moving object on earth and every piece of intelligent fixed infrastructure on earth, in the same way that camera technology has propagated and become ubiquitous in the last 20 years,” Pacala said in an interview, speaking with Colonnade Chief Executive Remy Trafelet.

Reuters had reported earlier that Ouster and Colonnade were nearing a merger agreement.

SPACs like Colonnade are increasingly popular investment vehicles which raise funds in an initial public offering (IPO) with the aim of buying a private company. The acquired company then becomes public as result of the merger and is an alternative to the traditional IPO process.

Colonnade raised $200 million in an IPO in August. For the deal with Ouster, Colonnade also raised $100 million through a private investment in public equity, or PIPE, transaction. Investors in the PIPE included Cox Automotive, Fontinalis Partners, and WWJ Enterprises.

Overall the deal will bring in up to $300 million in gross proceeds for Ouster.

Ouster, which expects to generate around $19 million in revenue in 2020, stood out from other companies in the space that Colonnade had looked at buying because its business is already generating revenue, Trafelet said.

“It’s not a business plan – they’re selling real products to real customers right now,’ he said.

Lidar sensors, which use laser light pulses to render precise images of the environment around the car, are seen as essential by many automakers to allow higher levels of driver assistance right up to making them capable of self-driving.

Five-year-old Ouster had previously raised $142 million from private market investors, including Cox , Silicon Valley Bank and Fontinalis, which is co-owned by Ford Motor Executive Chairman Bill Ford.

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TechCrunch

Cleo, the AI-powered 'financial assistant', raises $44M Series B led by EQT Ventures

By Steve O'Hear (techcrunch.com)

Cleo, the London-founded “financial assistant” that takes the form of an app and chatbot and now counts the U.S. as its largest market, has raised $44 million in Series B funding.

Leading the round, which I understand actually closed earlier this year, is EQT Ventures . Also participating are existing investors Balderton Capital, LocalGlobe and SBI.

They join much earlier investors such as Entrepreneur First, Taavet Hinrikus, Matt Robinson, Errol Damelin, Niklas Zennström, Alex Chesterman and Ian Hogarth — all well-known names in London’s tech investment community.

Targeting “Gen Z” and with a rather lofty sounding mission to “fight for the world’s financial health,” Cleo’s AI/machine learning-powered app connects to your bank accounts and gives you proactive advice and information on your finances, including timely nudges, to help you stay on top of your spending. Over time, the idea is that Cleo can help change your financial behaviour for the better.

The broader premise is that Cleo can replace your bank’s own app, and by speaking to you in a more human and user-friendly way, improve your financial health. In addition, and crucially — as Cleo founder Barney Hussey-Yeo is fond of arguing — the company can do all of this without having the same cost base or misaligned incentives of an actual bank.

The assumption made in 2017, when Cleo really got off the ground, was that through a combination of data science and machine learning, delivered in a fun and openly gamified way, the company’s financial assistant chatbot could attract and retain gen z and millennial users. Then, after engaging with the app, users would have experienced enough value to upgrade to a paid subscription or various financial services offered through Cleo now or in the future. With 4 million registered users — 96% of whom are in the U.S. — the first part appears to be panning out.

Hussey-Yeo tells me the new funding round gives him a “mandate” to take some big product bets in order to move forward the financial health of Cleo’s users. “[Those product bets] won’t all work out, but if one or two of them connects, we’ll fundamentally change the game in some of the most broken areas in financial services”.

In addition, the company will expand its operations in the U.S., including building out executive and product teams in San Francisco.

“When we launched in the U.S it became quickly apparent that it would be our dominant market,” says the Cleo founder. “We were signing up about 1,000 users per day in the U.K. at the time. After [just] a week, we were at 10,000 per day in the U.S. and kept growing”.

Hussey-Yeo attributes a lot of the success state-side to better banking APIs in the U.S. with Plaid, which he says “dramatically drove up” conversion rates and lowered customer acquisition costs. “This combined with a much larger market focused us 100% on winning in the U.S. first. This race is far from played out”.

Hussey-Yeo says Cleo will always offer a free version “because everybody needs the ability to make smarter decisions about their financial lives”. In contrast, the premium product costs $5.99 per month and is intended for people who “need a little extra help,” providing features such as gamified savings, and “levelled up” credit scores with coaching. Premium users can also trigger a $100 salary advance designed to stop them dipping into a costly bank overdraft.

Meanwhile, Cleo says it has grown revenue by 400% in the last 12 months, and Hussey-Yeo tells me the company is now doing $10 million-plus ARR. In a further nod toward stronger unit economics, the cost to acquire a user is now less than $2, with the vast majority of users acquired organically.

“So we’re definitely not in growth at all costs mode,” he says. “We’ve worked hard over the last 12 months to bring our payback period comfortably under 12 months which is an incredibly rare feat at scale for fintech”.

One interesting aspect of Cleo’s mission and the strong “personality” its chatbot exhibits, is that the problem space the company is tackling is potentially based on behavioural science as much as it is data science. Hussey-Yeo doesn’t disagree.

“This is where the idea of a conversational interface came from,” he says. “I realised you could break the complexity down into a language anyone could engage with, and I mean actually look forward to engaging with it, to ultimately change their behaviour.

“Today we have an outstanding machine learning department but just as importantly is the behavioural researchers and writers at Cleo. We know this is the combination that makes Cleo special and, I hope, will eventually lead to us being the financial advisor for a billion people”.

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TechCrunch

WeGift, the 'incentive marketing' platform, collects $8M in new funding

By Steve O'Hear (techcrunch.com)

WeGift, the 'incentive marketing' platform, collects $8M in new funding

WeGift, the London-based startup that has built an “incentive marketing” platform that lets businesses easily issue e-gift cards and other digital rewards to customers, has raised $8 million in new funding.

Dubbed a Series A extension, the round is led by AlbionVC . Existing investors, including Stride.vc, SAP.iO fund and Unilever Ventures, also followed on. Following the fundraise, Ed Lascelles, general partner at AlbionVC, is joining the WeGift board.

WeGift says it will use the additional capital to continue building out its “real-time infrastructure” for digital rewards and incentives. This will include investment in building its supply chain through direct integrations with brands, and product development “that serves corporate marketing teams looking to acquire, activate and retain customers at scale”.

Founded in 2016 by Aron Alexander, WeGift wants to digitise the $700 billion rewards and incentives industry, which is largely still powered by legacy systems built for physical gift cards.

“Currently payments are a one way street,” WeGift’s Alexander told TechCrunch in June. “Payments technology is built to enable businesses to take money from consumers but it doesn’t let businesses send money to consumers.

“We’ve created a new category of digital non-cash rewards to power customer acquisition, retention and loyalty globally: the ‘Twilio for e-gift cards’ ”.

To do this, WeGift offers a “cloud-based, open API” platform that allows businesses to automate sending digital incentives. This is combined with analytics, making it easier to track ROI on incentive marketing campaigns.

Since we last covered the startup, WeGift has grown its network to more than 700 brand partners (such as Nike and Uber) across 30 markets and 20 currencies. It claims “hundreds of clients,” such as Vodafone, Samsung, VoucherCodes, Perkbox and Sodexo, among others.

“We’ve become a favourite of the telecom and energy industry with companies like Vodafone, Utilita, LookAfterMyBills and E.ON using our platform,” Alexander tells me.

WeGift is disclosing 317% in annual revenue growth, but isn’t providing actual revenue numbers. Notably, the company has also opened a New York office.

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uktechnews

Flexa secures £250k Pre-Seed investment led by QVentures

By Safiya Marzook (uktechnews.info)

Flexa raises £250,000 in pre-seed funding to scale flexible working platform

LONDON, UNITED KINGDOM, Flexa is very excited to announce that they have successfully raised £250,000 from a consortium of international and domestic investors, including renowned angel investors Simon Franks and Douglas Choi. The round is being led by venture capital firm, QVentures. The funds will be used to support the scaling-up of Flexa’s flexible working platform.

Flexible working is now the number one candidate demand in the job market – with over one third of candidates citing a lack of flexible working as a deal-breaker. However, until now, there has been no way of knowing which companies truly offer flexible working. The investment will enable Flexa to continue its expansion in the UK and Ireland through rapid candidate acquisition and verification of truly flexible companies.

“I was let go from a previous role because I needed to work from home occasionally in order to accommodate my autoimmune disease. The fact that candidates do not know whether they will be able to work in a way that works for them is unacceptable. We are on a mission to bring a more flexible, inclusive way of working to as many people as we possibly can.” Flexa’s Co-Founder, Molly Johnson-Jones, explained.

Robert Walsh, Managing Partner at QVentures, says:

“Having first met with the team at Flexa a year ago, we’ve seen first hand the drive they have in connecting job seekers with truly flexible employers in the rapidly evolving office environment. A testament to this has been the companies that Molly and Maurice have brought on board and the glowing reviews they’ve received so far. With this investment, we’re confident that the team at Flexa will be able to better serve both job seekers and companies, in these challenging times where companies look to see how they can effectively recruit and employ best practices to manage a remote workforce.”

About the company

Flexa is a job and employer brand platform that works exclusively with truly flexible companies. The business has quickly grown to colonise the flexible working space with over 40,000 users and 30 partner companies.

Flexa was launched in February of this year by Molly Johnson-Jones (ex-Nomura & ex-11:FS), Maurice O’Brien (ex-Betfair) and Tim Leppard (successful exit of Diliger Research).

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TechCrunch

London-based Weezy raises pre-seed funding for its 15-minute grocery delivery app

By Steve O'Hear (TechCrunch)

First there was same-day delivery. Then came one-hour delivery. Now a new London startup wants to make 15 minute delivery a thing.

Putting the hyper hyper-local into online grocery shopping, Weezy combines its own strategically located fulfilment centres with a fleet of electric moped and bicycle couriers, ready to accept orders via the Weezy app. Its founders, Kristof Van Beveren and Alec Dent, think they’ve spotted a gap in the market for an online grocery service that targets “time-poor professionals and parents” who want the speed of an on-demand service but without it being prohibitively expensive.

investors appear to agree, with Weezy launching out of stealth off the back of £1 million in pre-seed funding from Heartcore Capital, in addition to various individual backers made up of former executives of Ocado, Tesco, Sainsbury’s Chop Chop and Deliveroo.

Starting in London’s affluent Fulham and Chelsea districts, customers use Weezy’s app to select and pay for items on their shopping lists -– spanning fresh fruits, vegetables, bread and cupboard fillers, to over-the-counter medicines, cleaning products and alcoholic drinks. The order is then picked and packed at Weezy’s own fulfilment centre, before being delivered on electric scooters or bicycles within 15 minutes. The service runs between 10am and 10pm every day, charging £2.95 for delivery.

Notably, groceries are sourced not only from selected wholesalers, but also from local independent bakers, butchers and markets, seeing Weezy talk up its support for local businesses. The startup plans to open up to 15 more fulfilment centres in the U.K. capital city by the end of next year, before setting its sights on broader U.K. expansion.

“No other service delivers as quickly,” says Weezy CEO and co-founder Van Beveren. “Our hyperlocal fulfilment centre model works since we are able to optimise the space for fast picking and packing while having low property and fit-out costs, thereby keeping prices in check. This, coupled with our in-house team of riders, allows us to offer the fastest and friendliest grocery delivery service. And, compared to convenience stores, Weezy has better pricing and a broader and more premium range of products”.

In comparison, Van Beveren notes that Sainsbury’s Chop Chop takes up to 60 minutes to deliver (and outsources delivery to courier company Stuart). Amazon Prime Now promises 1-2 hours delivery via Morrisons and its own warehouses, while Amazon Fresh in London offers same or next day delivery.

“Next to speed, we have a full range of carefully curated products and pricing in line with recommended retail prices,” adds Weezy co-founder and COO Dent. “We also only use electric vehicles or bicycles for deliveries. We are committed to creating a supportive culture and the best working conditions for our team of riders, who are also trained to work in the fulfilment centre, and offered opportunities for career progression. Happy staff make happy customers”.

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TechCrunch

Thriva raises £4M from Target in an era when at-home blood testing is more crucial than ever

By Mike Butcher (TechCrunch)

Thriva emerged in 2016 as an at-home blood-testing startup allowing people to check, for instance, cholesterol levels. In the era of a pandemic, however, at-home blood testing is about to become quite a big deal, alongside the general trend toward people proactively taking control of their health.

It has secured a £4 million extension to its Series A funding round from Berlin-based VC Target Global . The investment takes Thriva’s total funding to £11 million. The investment comes from Target Global’s new Early Stage Fund II and will top up the £6 million Series A raised in 2019. Existing investors include Guinness Asset Management and Pembroke VCT.

Thriva has processed more than 115,000 at-home blood tests since 2016. Interestingly, these customers actually use the information to improve their health, with 76% of Thriva users achieving an improvement in at least one of their biomarkers between tests.

The startup has also launched personalized health plans and high-quality supplements, scaling up its partnerships with hospitals and other healthcare providers.

Founded by Hamish Grierson, Eliot Brooks and Tom Livesey, it claims to be growing 100% year-on-year and has expanded its team to 50 members in the company’s London headquarters.

In a statement Grierson said: “As the world faces unprecedented challenges posed by the coronavirus crisis, we have all been forced to view our health, and our mortality, in a new light.”

Speaking to TechCrunch he added: “While there are other at-home testing companies, we don’t see them as directly competitive. Thriva isn’t a testing company. Our at-home blood tests are an important data point but they’re just the beginning of the long-term relationships we’re creating with our customers. To deliver on our mission of putting better health in your hands, we not only help people to keep track of what’s really happening inside their bodies, we actually help them to make positive changes that they can see the effects of over time.”

Dr. Ricardo Schäfer, partner at Target Global said: “When we first met the team behind Thriva, we were immediately hooked by their mission to allow people to take health into their own hands.”

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Research-Live

Capgemini buys Purpose

By ResearchLive

FRANCE – Consulting business Capgemini has acquired social impact agency, Purpose, for an undisclosed amount.

Founded in New York in 2009 and now with outlets across the globe, Purpose’s 100 employees – covering campaigners, creatives, strategists and technologists – will be combined with Capgemini’s digital innovation, consulting and transformation brand, Capgemini Invent.

Purpose has spent the past decade building a reputation in creating purpose-driven campaigns, branding, creative content, and participatory social impact strategies clients.

Cyril Garcia, CEO of Capgemini Invent said: “Heightened demands from stakeholders have driven a major shift towards building business with purpose. For many large companies, this has evolved beyond corporate social responsibility to business transformation and redefining business models, practices and culture.

“Purpose joining Capgemini will bolster the capabilities of our teams that are working closely with senior executives and boards, to envision and build what’s next for their organisation.”

Jeremy Heimans, CEO and co-founder of Purpose, added: “By joining the Capgemini Group, we can truly take Purpose to the world – dramatically growing our scale and impact at a crucial moment for so many of the issues we care about. Capgemini Invent, combined with the wider group’s scale, offers us access to vast technological capacity, unrivalled data and analytics, and a deep understanding of how to change organisations and business models from the inside out.”

Purpose will continue to operate as a Public Benefit Corporation and will be run independently with its senior management remaining in place.

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Tech Crunch

Perlego raises $9M Series A for its textbook subscription service

Backing the round is Charlie Songhurst, Dedicated VC, and Thomas Leysen (Chairman of Mediahuis and Umicore). Perlego’s existing investors including ADV, Simon Franks and Alex Chesterman also reinvested on a pro-rata basis.

London-based Perlego says the additional funding will be used to develop the next generation of Perlego’s “smarter learning platform,” including adding new features that simplify and enhance the learning experience, as well as content libraries in non-English languages to enable further expansion to “strategic” European markets beyond its U.K. roots.

Pitched as akin to a “Spotify for textbooks,” Perlego enables students, and also professionals, who now make up 30% of users, to access textbooks on a subscription basis.

It houses over 300,000 eBooks, from over 2,300 publishers, and the service is cross-device — via the web and iOS and Android apps — and available in multiple languages. Along with U.K. publishers, Perlego now also includes content from key publishers in Germany, the Nordics and Italy.

For the students, the draw is obvious: text books are increasingly expensive to purchase, and public libraries are under resourced. In the U.K., Perlego gives readers access to its entire digital library for £12 per month. As long as the needed text books are available on the service, that is infinitely more affordable.

For publishers, Perlego claims to offer a distribution method that stems revenue losses caused by piracy and the buoyant used text book market — hence the comparison to Spotify’s positioning.

Publishers such as Pearson, Wiley and Sage are already on board, Perlego says it is seeing a 116% increase in new subscribers month-on-month, though it isn’t breaking out subscriber numbers.

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seekingalpha

Fox To Acquire Majority Credible Labs Stake For Fintech Marketplace

By Donovan Jones (seekingalpha)
Quick Take

Fox (FOXA) announced it has agreed to acquire a controlling interest in Credible Labs for $265 million.

Credible Labs operates an online multi-lender financial services marketplace.

With the deal, FOXA hopes to combine Credible with its Fox Business and Television Station assets and leverage those audiences for Credible’s fintech marketplace.

Target Company

San Francisco, California-based Credible was founded in 2012 to develop an online multi-lender marketplace that allows borrowers to receive competitive loan offers from lenders.

Management is headed by Founder and CEO Stephen Dash, who was previously Investment Director at M.H. Carnegie & Co.

Investors have invested at least $25.3 million in the company and include Ron Suber, Carthona Capital, Regal Funds Management, AMTD Group, Scott Langmack, Soul Htite, Cthulhu Ventures, and Redbus Group among others.

Market & Competition

According to a market research report by TransUnion, in 2018, the unsecured personal loan market reached an all-time-high of $138 billion, marking a year-over-year [yoy] growth of 17%.

During the same year, fintech companies made up about 38% of the personal loans market.

In contrast, traditional banks’ and credit unions’ shares accounted for 28% and 21% of the market in 2018, representing a drop from 40% and 31% in 2013, respectively.

Major fintech firms that provide personal loans include:

Lendio
LendKey
Upstart Network
Nav

Acquisition Terms and Financial

Fox disclosed the acquisition price and terms as an acquisition of 67% of the Credible Labs equity for $265 million in cash to Credible’s shareholders.

Additionally, Fox committed to invest ‘up to $USD 75 million of growth capital to Credible over approximately two years.’

A review of the firm’s most recent 10-K filing indicates that as of June 30, 2019, Fox had $3.2 billion in cash and equivalents and $9.6 billion in liabilities, of which borrowings totaled $6.8 billion.

Free cash flow for the twelve months ended June 30, 2019, was $2.3 billion.

Since the stock began trading in mid-March as a result of the spin-off from the sale of its film and TV assets to Disney, the price has dropped about 20%.

Commentary

Fox is acquiring Credible to integrate it into its Fox Business and Fox Television Stations business segments.

As Fox CEO Lachlan Murdoch stated in the deal announcement, “Credible, which has tremendous synergy with core brands such as Fox Business and Fox Television Stations and will benefit from our audience reach and scale, will drive strategic growth, further develop our brand verticals and deepen consumer relationships.”

Beyond that generality, Fox didn’t provide any meaningful details about how the deal would be synergistic.

One must assume that Fox wants to reach deeper beyond simply being a media firm and become a direct provider of marketplace services, in this case, financial services.

It is notable that the new Fox’ (post-Disney acquisition of its film & TV assets) first significant foray is in acquiring an Internet fintech marketplace company.

Fox wants to combine it with its existing media properties to leverage its existing audience into this fintech marketplace.

While the deal won’t immediately move the stock price needle for FOXA, it provides investors with a directional signal about Murdoch’s intentions for the future with the new slimmed-down Fox.

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Reuters

Murdoch’s Fox Corp to buy fintech Credible Labs in $397 million deal

By Paulina Duran (reuters)

SYDNEY (Reuters) – U.S. broadcaster Fox Corp (FOXA.O) on Monday agreed to buy Credible Labs Inc (CRD.AX) in a deal valuing the online finance broker at $397 million, as the Murdoch-controlled firm hunts for growth following the sale of its film and TV assets to Disney.

In a challenging media landscape, the San-Francisco-based Credible Labs, listed on the Australian Stock Exchange, gives Fox exposure to an online service that matches personal borrowers and lenders seeking to service the $1.6 trillion a year U.S. mortgage market.

“The acquisition of Credible underscores Fox Corporation’s innovative digital strategy that emphasizes direct interactions with our consumers,” Lachlan Murdoch, Fox Corp’s executive chairman and chief executive, said in a statement.

Credible’s online platform provides credit checks to borrowers seeking mortgages and student and personal loans, and uses that information to show them pre-qualified loan rates and refinancing options that they can click through to obtain.

The fintech company had synergies with FOX Business and FOX Television businesses and would join its FOX Sports app, live and on demand content and FOX Now, Fox said, which would help both companies to grow.

Rupert Murdoch’s newly spun-off media company Fox Corp debuted on the Nasdaq in March following the $71 billion sale of Twenty-First Century Fox Inc’s film and television assets to Walt Disney Co (DIS.N).

The smaller firm now relies on costly live cable sports and news in an increasingly competitive television industry.

PREMATURE SALE

Credible said its shareholders will receive A$2.21 in cash per CHESS depository interest (CDI), valuing it at A$585 million less than two years after it listed in Australia at just over half that value.

Fox’s offer price represents a 7% premium to its last close of A$2.06 on August 2.

Majority shareholder, founder and Chief Executive Stephen Dash would remain head of the new Fox subsidiary and would exchange shares equal to one-third of Credible’s outstanding common stock into units of a newly created Fox subsidiary.

The transaction is subject to shareholder approval. Credible’s board of directors – who own a combined 13% of shares in the company – unanimously backed the proposal.

Some minority shareholders were surprised by the approach and feared missing out on the potential growth of the company if they sell now, said Bell Potter analyst Damien Williamson, who values Credible at A$2.78 per share.

“Premature is the word to describe how some minority shareholders see the transaction,” said Williamson. “This company is operating in a very large market and has the potential to do really well.”

Williamson said there was potential for Credible’s larger American rivals, such as Lendingtree Inc (TREE.O), to launch competing bids for the company.

Shares in Credible rose 6.3% percent to A$2.19 in a broader market that was down 1.8%.

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techcrunch.com

Postmates’ self-driving delivery rover will see with Ouster’s lidar

By Kirsten Korosec (techcrunch.com)

Postmates’ cooler-inspired autonomous delivery robot, which will roll out commercially in Los Angeles later this year, will rely on lidar sensors from Ouster, a burgeoning two-year-old startup that recently raised $60 million in equity and debt funding.

Postmates unveiled the first generation of its self-described “autonomous rover” — known as Serve — late last year. The vehicle uses cameras and light detection and ranging sensors called lidar to navigate sidewalks, as well as a backup human who remotely monitors the rover and can take control if needed.

A new second-generation version made its debut onstage earlier this month at Fortune’s Brainstorm Tech event. This newer version looks identical to the original version except a few minor details, including a change in lidar sensors. The previous version was outfitted with sensors from Velodyne, a company that has long dominated the lidar industry.

The supplier contract is notable for Ouster, a startup trying to carve out market share from the giant Velodyne and stand out from a global pack of lidar companies that now numbers close to 70. And it could prove substantial for the company if Postmates takes Serve to other cities as planned.

Lidar measures distance using laser light to generate highly accurate 3D maps of the world around the car. It’s considered by most in the self-driving car industry a key piece of technology required to safely deploy robotaxis and other autonomous vehicles.

Ouster’s strategy has been to cast a wider net for customers by selling its lidar sensors to other industries, including robotics, drones, mapping, defense, building security, mining and agriculture companies. It’s an approach that Waymo is also pursuing for its custom lidar sensors, which will be sold to companies outside of self-driving cars. Waymo will initially target robotics, security and agricultural technology.

Ouster’s business model, along with its tech, has helped it land 437 customers to date and raise a total of $90 million.

The contract with Postmates is its first major customer announcement. COAST Autonomous announced earlier this week that it was using Ouster sensors for its a low-speed autonomous shuttles. Self-driving truck companies Kodiak and Ike Robotics have also been using the sensors this year.

Ouster, which has 125 employees, uses complementary metal-oxide-semiconductor (CMOS) technology in its OS1 sensors, the same tech found in consumer digital cameras and smartphones. The company has announced four lidar sensors to date, with resolutions from 16 to 128 channels, and two product lines, the OS-1 and OS-2.

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City A.M.

Unilever and SAP lead £4m investment round in digital reward platform WeGift

By Michael Searles (City A.M.)

The likes of SAP and Unilever have led a £4m investment round into London startup WeGift, which is aiming to become the first real-time digital reward platform.

The company secured the £4m Series A funding, which was also led by venture capital firm Stride, as it also reported a 500 per cent growth in annual revenue.

WeGift plans to use the funds to increase the scale of its operations, improve its technology platform, and support its expansion into the US.

“Employees and customers alike expect consumer-like experiences from businesses,” said SAP managing director Ram Jambunathan. “Being able to provide those experiences is a key driver of retention and satisfaction.

“But today, businesses rely largely on archaic, manual processes for rewards. WeGift can uniquely enable customers to provide appealing experiences from incentives to reimbursements, which is well-aligned with SAP’s distinctive ability to leverage operational data and drive experience management.”

Meanwhile, Unilever Ventures said WeGift had “huge opportunity to leverage their technology across the consumer goods industry”.

Other investors included Simon Franks of the Redbus Group and Zoopla founder, Alex Chesterman.

WeGift uses cloud-based technology to allow businesses to automate sending digital value in real-time rather than relying on manually sending rewards on cards or in the post.

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techcrunch.com

WeGift, the digital rewards platform, raises £4M Series A

By Steve O’Hear (techcrunch)

WeGift, the U.K. startup that has developed a platform to let businesses easily issue e-gift cards and other digital rewards, has closed £4 million in Series A funding.

Leading the round is Stride.VC — the relatively new early-stage venture capital firm founded by Fred Destin and Harry Stebbings — alongside a number of other investors including SAP.iO fund, Unilever Ventures, James Hind (founder of Carwow,) and Eamon Jubbawy (co-founder of Onfido).

The startup’s previous backers include Alex Chesterman, Charlie Songhurst, Simon Franks, Ascension Ventures, and Fuel Ventures.

“Currently payments are a one way street,” WeGift founder and CEO Aron Alexander tells TechCrunch. “Payments technology is built to enable businesses to take money from consumers but it doesn’t let businesses send money to consumers.

“We’ve created a new category of digital non-cash rewards to power customer acquisition, retention and loyalty globally: the ‘Twilio for e-gift cards’”.

Alexander says that historically businesses would offer a physical reward to power these use cases. For example, “open a bank account and get a free toaster (for my generation it was a free Filofax). In comparison, he says that e-gift cards are more appealing to consumers because they’re “easier to deliver than merchandise, they don’t get lost in the mail and they can spend it on what they want”.

There are upsides for the businesses handing out digital rewards, too. They include bulk percentage discounts when purchasing e-gift cards from retailers, and negating the need to ask for a customer’s bank account details. Most importantly, says Alexander, “you can track how they affect the customer journey”.

However, the problem with using e-gift cards at scale is that the technology infrastructure to automate orders and delivery is missing, meaning that it remains quite a manual process that often falls back on emails, CSV files and PDFs “This is what we are changing… [by automating] the issuing process of non-cash rewards,” explains the WeGift founder.

The resulting WeGift cloud-based platform offers an open API to enable businesses to automate sending digital rewards, on-demand and in real-time. “We give them instant access to a huge choice of rewards and payouts, an ever-growing network of more than 500 brand partners, across 26 markets and 20 currencies, in real-time,” adds Alexander.

Stride.VC’s Destin says digital rewards is a “messy, fragmented industry with broken processes, prone to errors and leakage, aged technology stacks and plenty of misalignment and distrust between the players”. It is also an industry dominated in the U.S. by two incumbents with a legacy in the physical gift card space and therefore ripe for disruption.

“The business model is well understood,” writes Destin in a Medium post. “Think Stripe, applied to non-cash payouts. Robust APIs, real-time capabilities, disruptive pricing, transparency”.

Meanwhile, WeGift says the Series A will enable the company to deliver on its vision of create “the world’s first” real-time infrastructure for digital rewards and incentives. Specifically, the funding will be used to further scale WeGift’s operations, support expansion to the U.S, and to continue investing in its technology platform.

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prnewswire

Peerspace Launches 2.0 iPhone App For Instant Bookings Of Hourly Event, Meeting and Production Rentals

By Peerspace

SAN FRANCISCO, June 11, 2019 /PRNewswire/ — Peerspace, the world’s largest marketplace for hourly rentals of unique spaces for events, meetings, photo shoots, and media productions, today announces the 2.0 version of their iPhone app now available on the Apple App Store. Peerspace makes it easy for anyone to find and rent inspiring spaces by the hour for meetings, events, photo shoots and more. Peerspace unlocks significant income for property owners for their facilities, galleries, offices, and spaces – which may otherwise remain empty or underutilized seasonally or on certain days of the week.

Over 10,000 venues are available on Peerspace for hourly rental throughout the United States with a focus on metros including San Francisco, Dallas, Houston, Austin, Silicon Valley, Los Angeles, Seattle, New York, Boston, Chicago, Washington DC, and Atlanta – with more locales slated to be added throughout 2019.

New Peerspace 2.0 app features include expanded location search and activity selection, advanced filtering by guest capacity, price, amenities and more, the ability to search by activity type, and Instant Booking – a new way to easily book the desired venue. For more information please visit, www.peerspace.com.

“Increasingly, we see our customers book their meetings and events on-the-go,” said Eric Shoup, CEO at Peerspace. “We believe the future is where booking and hosting events is so easy that it can all be done with a few taps on your phone. Our 2.0 app is a big step towards that vision.”

Peerspace’s expanding catalog of unique spaces and locations range from an authentic Brooklyn Coffee Shop to a 1906 Historic Church in Pasadena, California to a Downtown Chicago office in one of the nation’s tallest buildings and a 75 Acre Horse Ranch outside of Houston.

For event and meeting planners, Peerspace removes the hassles of intricate booking negotiations and paperwork, while Peerspace’s expert support provides knowledgeable guidance and service to make sure events go off without a hitch, available 7 days a week.

Peerspace 2.0 features include:

Instantly book a space
Entirely updated design
Crisp, high-resolution location imagery
Search by any location, select activity types, and even your specific date and time
Advanced, specific filters to help match you to the best space
Communicate on the go with hosts
Easily manage bookings directly from your phone
For more information on hosting, or to sign up to make your space available through Peerspace, please visit: https://www.peerspace.com/host

Visit Peerspace on Instagram by visiting: https://www.instagram.com/peerspace

About Peerspace
Peerspace provides access to cities’ best places to meet, create and celebrate, removing the hassle of securing a space for events while making it easy for anyone to rent out their space. The Peerspace marketplace opens the door to thousands of spaces available at all price points – from lofts and mansions to storefronts and studios – so people have a choice of places to get together. By making their space available to an audience of millions, Peerspace makes it easy for both individuals and businesses to safely share and earn extra income from their space.

Founded in April of 2014, Peerspace is headquartered in San Francisco, with offices in Los Angeles, New York, and Chicago. The company’s investors include Google Ventures, Foundation Capital, Structure Capital, Carthona Capital, and 31VENTURES.

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Financial Times

Hollywood moments for high street stores

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.

NO COMPANY IS AN ISLAND IN THE SEARCH FOR
NEW WAYS TO REACH CUSTOMERS

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.

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pehub.com

Cleo grabs $10 mln in Balderton Capital-led round

By Iris Dorbian (pehub.com)

London-based Cleo, a digital assistant that helps people manage their finances, has raised $10 million in funding. Balderton Capital led the round.

PRESS RELEASE

London, 21 September 2018

Cleo, a digital assistant that helps people manage their finances, has secured $10m in investment to further its mission of becoming the global interface for money. Users securely connect their bank accounts to Cleo, who sits on top, giving them personalised insight into their spending data. Predominantly millennials, Cleo’s users talk to her in Facebook Messenger, where she creates a daily relationship between them and their money.

Cleo has over 600,000 users, with 94% aged under-35. The AI has a fun, wry, and relatable personality which is helping to drive its rapid growth among millennials. Designed to help young people save, Cleo sets targets, tracks your spending, puts away savings automatically, and answers questions instantly and intelligently.

The latest $10m of investment funding brings Cleo’s total investment raised to $15m, since being founded in 2016. The round was led by Balderton Capital, Europe’s leading Series A investor, who joined a world-leading set of existing backers that include seed fund LocalGlobe, who led Cleo’s seed round, as well as angels that include Niklas Zennstrom, founder of Skype, Taavet Hinrikus, founder of TransferWise and Simon Franks, co-founder of LoveFilm.

Cleo is now set to launch its own range of financial products. CEO Barney Hussey-Yeo points out that “from overdraft fees to credit cards, the traditional range of financial products doesn’t work for this generation. The model of retail banking is not set up for the people it serves. Cleo’s changing that.” The company will continue to expand internationally, following a successful launch in North America in April 2018, which saw 350,000 people sign up within four months. Hussey-Yeo notes that: “Cleo is designed to solve a global problem. There’s an arms race going on to become the financial interface for this generation. A Google-size company will emerge in the next five years that achieves that.”

Rob Moffat, partner at Balderton Capital, agrees: “In the future, people may not use a traditional bank account as their primary financial interface. Cleo has managed to strike the perfect balance between education and entertainment, bringing a unique personality that keeps users coming back. We believe that Cleo has the team and product to become the leading global player in the coming years.”

About Cleo: Cleo is a fintech startup based in Shoreditch, London. Cleo interacts securely with other banks’ accounts and credit cards, using Artificial Intelligence to help users manage their money, budget, and save for the future. Having launched in the UK in late 2016, Cleo has expanded to the US and Canada this year, and will be looking to grow internationally. Cleo’s backers include Balderton Capital, LocalGlobe, Entrepreneur First, and the founders of Skype, TransferWise, Climate Corporation, Zoopla, Lovefilm, Wonga, Songkick, Moonfruit, creative agency Albion and MMC Ventures.

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techcrunch.com

Perlego raises $4.8M for its ‘Spotify for textbooks’

By Steve O’Hear (techcrunch.com)

Perlego, which has been dubbed the ‘Spotify for textbooks,’ has closed $4.8 million in finding. Leading the round is ADV, with participation from existing angel investors, including Simon Franks (co-founder of Lovefilm), Alex Chesterman (founder of Zoopla), and Peter Hinssen.

To be able to do this, it works with 650 publishers, including big names like Oxford University Press, Princeton University Press, Macmillan Higher Education, and Cengage Learning. Publishers receive 65 percent of each subscription on a consumption basis.

“Textbook prices have increased more than fifteen-fold since 1970, or three times the rate of inflation,” Perlego co-founder and CEO Van Malderen tells TechCrunch. “In the U.K., the average university student spends £439 a year on textbooks. This is only exacerbating the cost of higher education and the debt burden on students, which is set to rise again this year in the U.K.”.

In turn, Perlego says it helps publishers monetise their content to a large segment of price-sensitive students that would otherwise buy their books from the used-books market or download pirated copies. It also supplies publishers with detailed data on the consumption of titles.

“We are true subscription model,” adds Van Malderen. “For £12 per month you get unlimited access to the best textbooks. We do not operate a complex leasing model and publishers benefit [through] data collection, reduced piracy, no cannibalization from second-hand print sales”.

Meanwhile, Perlego says it will use the new funding to grow the team and support the company’s growth across the U.K. and Europe. It will also further invest in developing its product for students and professionals.

In addition, Perlego has joined Founders Factory this month as part of its edtech accelerator programme, which is backed by Holtzbrinck Macmillan one of the world’s leading academic publishers.

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standard.co.uk

Perlego’s ‘Spotify for textbooks’ will solve your student textbook woes

By Amelia Heathman (standard.co.uk)

Don’t choose between textbooks and food again thanks to Perlego

In just a few weeks, the UK’s new and returning university students will be arriving at their digs, getting schedules, and buying brand new books for the year.

But with the increasing costs of textbooks, learning is becoming evermore expensive. Indeed, research by the US Census Bureau showed that prices increased more than 800 per cent from 1978 to 2014. This means students will be forced to make decisions on a fairly critical aspect of their education, based on what they can, and can’t, afford.

This is the problem a new ed-tech start-up Perlego wants to solve.

Set up by two 25-year olds, Gauthier Van Malderen and Matthew Davis, it aims to act like Spotify – only for textbooks. Perlego offers a subscription model that gives students access to the books they need in order to complete their degree.

The thinking behind it is making educational content accessible for all, says CEO Van Malderen.

“In this digital age, we believe that anyone should be able to learn anything at any time. Knowledge should be more accessible, not locked behind sky-high price tags and tuition fees,” he said.

For a subscription price of £12 a month, students can get access to over 200,000 eBooks across all the major subjects including social sciences, engineering, law, medicine and engineering. You can find books from over 650 publishers including Oxford University Press, Taylor & Francis, Wiley and from today, Cenage Learning, the second biggest textbook publisher in the world.

eBooks can be downloaded to read offline and specific paragraphs can be annotated with highlights and notes. The start-up is currently working on iOS and Android apps, which will also feature speech-to-text functionality so you can tune into chapters on your commute to uni or when you’re working at home.

The platform works for publishers too. The accessible pricing mitigates textbook piracy, a major issue in the industry, and companies receive a commission when books are read, the same way Spotify pays publishers when people listen to songs online.

Even if you’re not a student, you can still use Perlego. For £15 a month, you can access all of Perlego’s titles, including a growing range of non-fiction books such as Yuval Noah Harri’s Homo Sapiens and Homo Deus, and Shoe Dog, Nike creator Phil Knight’s memoir.

If you want to learn about major tech topics such as artificial intelligence, blockchain or coding, it is all there on the platform.

Perlego is only two years old but has caught the eye of many in the tech world, raising $4.8 million in funding from the likes of venture firm ADV and angel investors including Simon Franks, co-founder of Lovefilm and Alex Chesterman, founder of Zoopla.

As well, the start-up has recently joined Founders Factory and will take part in its six-month ed-tech focused accelerator programme.

Mike Dimelow, CIO at ADV, said Perlego will do for textbooks what Spotify has done for music.

“Spotify has re-defined this consumption for music, Perlego will do the same for educational textbooks and professional learning. Its platform connects consumers to publishers and enables partial ownership, we feel this is a winning model. Consumers pay for what they read whilst publishers monetise content they commission,” he said.

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uktech.news

Ex Goldman Sachs banker raises £450K for AI-driven fitness app

By Sian Bradley (uktech.news)

Auro, an app which has built an AI-driven fitness coach, has closed its second seed funding round, bringing its total raise to £450K since the company launched in 2017.

The startup was founded by ex Goldman Sachs banker Anta Pattabiraman, and is now backed by European tech entrepreneurs including the founders of Zoopla, LoveFilm and Passion Capital.

Auro offers personalised workouts – referred to as a “personal trainer in your ear”. The workouts are created using content from experienced world class instructors, creating motivating playlists and using data science.

The aim is to build AI that learns and adapts based on activity level so users may achieve and exceed their fitness goals. CEO Anta Pattabiraman explained this further: “When you add all of the elements a PT brings including proven programming of the type you find in the top boutique studios in London, with curated music playlists, data driven personalisation and a vibrant fitness community you can be a part of, you have an engaging, personalised fitness solution in an app.”

This funding will be used to develop the product and its AI capabilities and grow the team.

India-born entrepreneur and angel investor Pattabiraman was inspired to create an affordable personal trainer after a PT helped him to get back in shape after suffering from a sports related injury. “There are 9.7 million gym members in the UK, yet only a quarter of a million use personal trainers because of the cost,” he said. “Without personalised instruction, most people get demotivated and don’t make the most of their gym membership/ fitness schedule. I fundamentally believed that this could be changed. I wanted to make personalised instruction available to one and all.”

The gym industry is a strong one,with a recent report by Deloitte stating that the European fitness market is currently worth £24bn, whilst other research shows that having a personal trainer to guide and motivate you improves the chances of achieving one’s fitness goals by 73%.

Pattabiraman went on to explain how Auro is filling a gap in the market: “The fit-tech space has really started to take off in the last 18 months or so, with many new innovative products hitting the market. We are focusing on personalising workouts to suit every individual using technology.

“We are building a platform for the future where the intensity and duration of the classes will adapt to the user in just the same way as a great PT would adapt fitness programmes individually for their client,” he added.

But how does Auro differ from other online fitness providers? Auro is portable and app-based, with workouts dedicated to gym based or outdoor activities and exercises. The intention is to mimic the energy of a group gym class.

Investor, founder and CEO of Zoopla, Alex Chesterman explained why he thinks the company is unique: “Having looked at the virtual fitness space closely for a few years, I believe Auro has come out with a unique product that offers consumers personalised instruction and variety at a compelling price point without the need for expensive hardware,” he said.

Auro offers a basic £8 per month subscription model, and is completely audio based.

Simon Franks, investor and co-founder of LoveFilm, concluded: “I am really happy to support Auro on their journey. This investment reflects our belief in the management team and also our continued interest in the intersection between health, fitness and technology.”

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finsmes.com

Fitness App Auro Closes Second Seed Funding; Brings Total to £450K

By finsmes.com

Auro, a UK based provider of an AI-driven fitness app, closed a second seed funding round, bringing the total funds it has raised since its launch less than a year ago to £450K.

Backers included Alex Chesterman, founder of Zoopla, Simon Franks, co-founder of LoveFilm and Stefan Glaenzer, founding partner of Passion Capital.

The company intends to use the funds will be used to reinforce the development of content, build the team and its AI capabilities.

Co-founded by entrepreneur and amateur marathon runner Anta Pattabiraman, a former Goldman Sachs investment banker, and Karthik Naraynan, a former chief engineer at Samsung, Auro provides a data driven, audio-only personal trainer app that adapts fitness programs individually for the user.

Personal Trainer fitness programs have been adapted for outdoor runs, treadmill, cross trainer / elliptical, spin, rowing and strength.

The subscription fee is £8 per month. Auro is available to download via Apple App Store and Google Play.

Original Article
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reuters

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
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standard.co.uk

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.

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startups.co.uk

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.

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techcrunch.com

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.

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forbes.com

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.

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afr.com

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.”

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businesswire.com

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.

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techcrunch.com

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.

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techcrunch.com

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.

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techcrunch.com

Skype’s Niklas Zennström backs London fintech startup Cleo

By Steve O’Hear (techcrunch.com)

London-based Cleo, a startup that’s developed an AI-powered chatbot to help you manage your finances, has picked up $700,000 in funding from an impressive list of angel investors, including Skype founder Niklas Zennström.

He’s joined by Zoopla co-founder Alex Chesterman, Wonga co-founder Errol Damelin, Albion co-founder and Atomico Executive-in-Residence Jason Goodman, Atomico Partner and The Climate Corp. co-founder Siraj Khaliq, Lovefilm co-founder Simon Franks, and Moonfruit co-founders and Entrepreneur First Partners Wendy White and Joe White. I also understand the round actually closed late last year.

Noteworthy is that Zennström has invested in a personal capacity not via Atomico, the VC firm he founded and manages. And whilst that’s not unheard of — though not always publicised — it would suggest he is bullish about Cleo’s prospects. Given his and other Cleo angel investors’ ties to Atomico, however, I also wouldn’t be surprised to see the VC appear in the fintech startup’s future A round, should or when it happens.

Founded by Barney Hussey-Yeo and Aleksandra Wozniak, after they teamed up at company builder Entrepreneur First, Cleo is described as a “financial assistant” powered by AI. It takes the form of a chatbot, either via the Cleo app or Facebook Messenger, and through integration with Amazon’s Alexa and Google’s Google Home.

The result is that you can chat to Cleo via text or voice to interrogate your bank account and credit card data in order to keep track of your spending and hopefully budget better. This includes things like asking for your current balance, a breakdown of how much you’ve spent that month at a particular merchant, and setting budget or spending reminders and alerts.

“We’re trying to reduce the complexity and increase the transparency of financial services for our generation,” Cleo’s CEO and millennial co-founder Barney Hussey-Yeo tells me. “Cleo’s an AI financial assistant that makes managing your money incredibly simple… using artificial intelligence and machine learning you can ask Cleo nearly anything about your finances”.

To that end, Hussey-Yeo says typical users are young professionals and graduates who are keen to easily understand where their money’s going and to start saving. “They’re used to using world class products from Facebook, Snapchat and Uber and expect more from their bank,” he says.

Meanwhile, the burgeoning startup is yet to monetize, though future plans include offering its own “faster, more flexible and cheaper financial products”. Hussey-Yeo also conceded the ‘manage your money’ space is increasingly competitive, and name-checks challenger bank Monzo for its impressive execution.

Adds the Cleo CEO: “There’s a clear arms race going on to become the financial interface for this generation. Taking the ownership and control away from banks will be amazing for the consumer but will also create oversized returns. This is Europe’s chance to build a Google or Facebook sized company”.

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bloomberg.com

Student-Loan Startup Raises Money from Prosper’s Suber, Others

By Dakin Campbell (bloomberg.com)

– Credible says second round of financing draws $10 million

– CEO Dash says company still hold most funds from first round

Credible, which offers an online exchange for student and personal loans, raised $10 million from investors including Ron Suber, the president of Prosper Marketplace Inc., and Regal Funds Management to expand its business of matching borrowers with lenders.

The Series B funding round was led by Regal, and included existing investor Carthona Capital, Credible founder and Chief Executive Officer Stephen Dash said this week in an interview. The firm’s Series A round was for $10 million and much of it is still in the bank, Dash said.

San Francisco-based Credible works with student loans much like Kayak.com does for airline fares, acting as a marketplace for borrowers to compare available interest rates. The closely held firm works with credit bureaus and lenders such as financial-technology startups or banks to provide a personalized rate, Dash said.

“We have effectively created a pricing system that is accurate, because we are getting the data from the lenders,” Dash said. “We are really focused on helping millennials make these decisions about student or personal loans in a really simple way.”

The lender gets involved only when the borrower decides to accept the quote. Credible doesn’t initially provide data to lenders or hit a person’s credit report. It uses proprietary technology to quote an interest rate that will match the rate offered by a lender 95 times out of 100, Dash said.

Online Lending

Credible is tapping into the craze for online loans, pioneered by so-called peer-to-peer lenders like LendingClub Corp. and Prosper, and student-loan firms like Social Finance Inc. Dash’s firm, founded more than four years ago, participates in just under $1 billion in lending a year, including new student loans, refinancings and personal loans, he said.

The fast-growing online-loan industry ran into trouble last year after LendingClub and others struggled with loan quality and due-diligence concerns. LendingClub’s market value has slumped to $2.15 billion from as high as $10 billion after a December 2014 public offering. Social Finance, which specializes in refinancing student loans, pushed back its plans to go public, CEO Mike Cagney said last month.

Credible closed its Series A in 2015 in a fundraising led by Soul Htite, founder and CEO of Dianrong.com and co-founder of LendingClub, according to TechCrunch. Suber also participated in that round.

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finsmes.com

E-book Platform Perlego Secures £500K in Seed Funding

By FinSMEs (finsmes.com)

Perlego, a London, UK-based e-book platform, secured £500K in seed funding.

Private angels from the United Kingdom, Belgium and France participated in the round including Simon Franks, who co-founded film rental service LOVEFiLM and film distribution company Redbus.

The company intends to use the funds to grow the team, publishing partnerships and continue developing the platform.

Founded by Gauthier Van Malderen and Matthew Davis, Perlego offers academic and professional e-books under a monthly subscription fee. The company has already partnered up with over 240 publishers including Packtpublishing, Oxford University Press, Palgrave and Elsevier, offering over 85,000 ebooks to date.

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techcrunch.com

Perkbox, an employee engagement platform, picks up £2.5M backing from Draper Esprit

By Steve O’Hear (techcrunch.com)

Perkbox, a U.K. startup that offers an employee engagement platform to help companies retain employees (and customers), has picked up £2.5 million in backing from publicly listed European VC Draper Esprit. The new round — its first since it raised a very modest £350,000 five years ago and before several pivots — comes at the same time as the company’s equity crowdfunding campaign, which launched this week.

That is seeing Perkbox attempt to raise up to an additional £2 million at a rather hefty pre-money valuation of £75.4 million, and, I’m told, makes it the highest valued startup to attempt to crowdfund on Seedrs. Nice armchair investing, if you can attract it.

(Update: Seedrs tells me the equity crowd funding campaign is on the same terms as Draper Esprit’s investment in Perkbox.)

Originally launched as Huddlebuy, a group-buying platform for SMEs, all the way back in 2011, the since re-branded Perkbox eventually settled on the idea of developing a “digital engagement platform” to enable companies of all sizes (including startups) to look after their staff and customers via various perks and benefits.

“In the U.K., just 39 per cent of employees are engaged and only 28 per cent of consumers are loyal to their providers. Our digital platform helps brands connect and engage with their employees and customers through boosting financial, emotional and physical wellbeing,” says Perkbox co-founder and CEO Saurav Chopra.

On the “financial” side, this currently amounts to Perkbox being able to offer employees subscribed to its platform over 200 perks, including things like free phone insurance, cinema tickets, and 2 for 1 meal deals when eating out. “We are one of the biggest buyers of cinema tickets,” Chopra tells me, noting that working capital, along with investing in growth, is one of the reasons why Perkbox has chosen to raise funding at this time.

Then there’s “emotional” wellbeing. This has seen Perkbox build out an online rewards & recognition system, which encourages managers to reward employees with physical rewards, and enables teammates and peers to recognise each other’s work by exchanging digital badges. These include being labeled “King of the Kettle”, “Office DJ” and “Sales Superstar”. Yes, really.

Finally, there’s the “physical,” delivered via Perkbox’s Wellness Hub, which Chopra describes as a collection of professionally made cooking and exercise videos, and a free 24/7 employee assistance helpline “to boost wellbeing and reduce sick days”.

“We also have ‘Perkbox for customers’ — an advanced customer loyalty programme that helps businesses to acquire, engage and retain a loyal customer base. Our programmes can be white labelled, extending customer branding across the whole customer experience,” he adds.

So how well is Perkbox doing? The platform boasts over 300,000 paying members, and expects to hit one million by the end of the year. I’m told this translates into £10 million £4.3 million in revenue last year and is predicted to reach £15 million in revenue for this year. Chopra also says he’s confident of delivering over £25 million in revenue the following year. The startup’s team has now grown to over 105 people.

“Customers can include SMEs with 5 employees to some of the U.K.’s largest brands and fastest growing startups,” adds Chopra. “Deliveroo, Worldpay, Le Pain Quotidian, Holland & Barrett, BlaBlaCar, these are just a few of our well-known customers”.

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Tech Crunch

Credible, The Marketplace For Student Loans, Closes $10 Million Series A Funding

By Jordon Crook (techcrunch.com)

Unlike other student loan marketplaces that sell leads to lenders, Credible works by getting firm offers of credit for their customers to evaluate and choose from.

When a student gets accepted to a university, they (and their parents) can fill in all the required information on Credible, which then sends the relevant information to their lending partners. Working with 12 different lenders, Credible gets a fixed quote on loans for that individual student and lets them choose the credit line that works best for them.

“The line of credit is legally viable and set for 30 days – meaning Credible isn’t offering a range of rates, but an actual loan – and once accepted, the transaction is complete.

Credible also offers a student loan refinancing product, letting graduates who want to adjust their numbers refinance their outstanding federal and private student loans.

Credible founder and CEO Stephen Dash said that, of the $200 billion in outstanding student loans that have the potential to be refinanced, only around $5 billion of that is actually being refinanced.

The company makes money by taking a transaction fee from the lender once a credit line is actually accepted by the borrower.

“We’re fully aligned with both the lender and the borrower,” said Dash. “We offer the lender an efficient customer acquisition channel, but we never sell user information or leads, ensuring that our incentives are aligned with the borrower, as well.”

Credible first launched in 2012 and has raised a total of $12.7 million, including this latest Series A round.

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Wall Street Journal

Credible Raises $10 Million for Student-Loan Marketplace

By Mike Billings (wsj.com)

Credible Labs Inc., a company that wants to make it easier for students to obtain or refinance loans, has raised $10 million in new funding from venture investors and leaders in the alternative-lending industry, Lora Kolodny reports for Dow Jones VentureWire.

The company’s website lists rates and loan offers from financial services firms that run the gamut from traditional banks, credit unions and peer-to-peer lending platforms.

“The new funding included existing investors Carthona Group and Redbus Group. New investors included Soul Htite, the founder and chief executive of Dianrong.com and co-founder of Lending Club Corp.; Prosper President Ron Suber; and Scott Langmack, chairman of Purisima West Fundsand board member at Dianrong.com

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venturebeat.com

Credible, a ‘Kayak for student loans,’ lands $2.7M for itself

By Barry Levine (venturebeat.com)

One wonders if anything can fix the U.S. student loan system, in which many students carry massive borrowing for a credential that is often considered essential.

But student loan marketplace Credible is trying to connect students to the best deal available. Today, the San Francisco-based company is announcing it has closed the final $1.5 million tranche of its $2.7 million seed financing, the total raised thus far for the two-year-old company.

“In ten seconds, a recent graduate can use Credible’s comparison tool to find out if they are overpaying on their student loans,” founder and CEO Stephen Dash told VentureBeat via email.

In five minutes, he added, a student borrower can complete a Profile that enables lenders to offer personalized quotes with exact rates for private loans. In a Dashboard, users can compare such factors as APR, monthly payment, fixed or variable interest rate, total repayments, and estimated savings.

If a borrower decides to move forward, the last part of the process — including identity and income verification, and document signing — takes place with the lender.

There’s no charge for borrowers to use the platform, as lenders for completed loans pay a fee to Credible. The company said it does not sell leads or user data.

More than 15,000 profiles have been created on Credible since it launched last March, of which about 12,000 were entered in the last three months.

Dash pointed to an actual 2010 Babson College graduate named Cole who reduced the interest rate on his loan from 8.90 percent to 3.75 percent and saved more than $40,000 over the life of the loan. Credible said that borrowers saved an average of $11,688 last year by refinancing through the site.

Dash noted that federal loans have interest rates nearing 8 percent. But he added that at least 10 lenders are now providing “a very competitive” refinancing of federal and private student loans through his company’s marketplace.

The site focuses on helping borrowers in the refinancing of existing loans — as opposed to their initial college loans — because “this is where borrowers can save the most money by comparing lenders’ offers,” Dash said.

It’s where the better deals are.

“A graduate is typically a much more attractive lending proposition than a student,” he said, because they have a longer credit history, usually have a job, and have a university degree.

Most other online facilitators of loan refinancing are lenders themselves, Dash said, including Citizens Bank, CuStudentLoans, Earnest, CordiaGrad, Success Loans, iHelp, and others. By contrast, he said, Credible is a nonlending matchmaker between borrowers and lender — “a Kayak for student loans,” the company says.

Sites like PrivateStudentLoans, eStudentLoan, and SimpleTuition, Dash pointed out, are “lead-gen sites [that] provide rate ranges,” not actual quotes.

The student loan space is heating up. A few weeks ago, personal and student loan lender Earnest announced it had closed a $17 million Series A round. And SoFi, originally called Social Finance, offers loans from alumni to students at their alma mater and is reportedly prepping an IPO.

Investors providing the recently completed funding for Credible include Carthona Capital, Cthulhu Ventures, and Redbus Group. The new money will be used to expand Credible’s team and to build out its user-friendly features, the company told us.

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techcrunch.com

With $500K In The Bank, Credible Launches A Kayak-Style Marketplace To Simplify Student Loan Refinancing

By Rip Emerson (techcrunch.com)

With outstanding student debt now over $1 trillion in the U.S., it’s clear that college grads are struggling mightily to make payments and refinance their debt. Meanwhile, thanks to decades of plummeting borrowing costs, millions upon millions of consumers have been able to refinance mortgages and begin paying down debt.

In some irrational alternate universe, one might expect that lenders would be lining up to take advantage of soaring student loan debt by offering more favorable terms than competitors. Nope, because that’s “crazy.” Even when students happen to find a decent job out of college, make payments on time and improve their credit scores, they remain locked into absurdly high fixed rates.

The majority of the big players in the private loan market appear more than happy to maintain the status quo, and wave off refinancing as a threat to the bottom line. Enter: Credible, a San Francisco-based startup launching today that aims to help graduates extricate themselves from high fixed rates, and make it easy to switch lenders and save on their loan payments.

Taking home the “Best 2.0 Company” Award at this week’s Launch Festival, Credible founder Stephen Dash said that, while racked with debt, the truth is that today many students could save a significant amount of money on their loan payments by switching lenders. Yet, the majority of them don’t because they don’t know how, or because the process of switching is so complicated and time-consuming.

So, Credible has developed a platform that makes it easy for students to find out whether or not they’re eligible for lower interest rates and could benefit from switching lenders. The startup’s loan comparison tools enable students to understand their loan profile relative to their peers and get an indication of what similar borrowers are paying for private loans.

Typically, if a student wants to find out if they’re eligible for lower rates, they have to seek out a handful of different lenders and spend time filling out a bunch of repetitive forms, Dash says. With so much opacity around the degree to which they’ll actually be able to save on their payments and the time required to find out, most students opt against the idea of refinancing.

To address this friction, Credible allows students to quickly qualify their eligibility in a 7-question process. After answering questions about their current employment, salary, credit score and so on, students enter their email, receive their log-in information and can then view their options.

If they’re eligible for better rates and an appealing amount of savings, students can then opt to begin the process of switching lenders and refinancing their loans. Again, rather than filling out a bunch of different applications, Credible lets students submit a single offer request form, which consolidates the information every lender needs to see to make a refinancing offer.

To do this, in place of applications, students fill out a profile on Credible, link their existing loans, select the lenders with the best rates, enter their I.D. credentials (which Dash says are encrypted and never saved), at which point they’ll be able to view their existing loans.

After entering employment information, students can add a co-signer, upload their driver’s license and a recent pay stub, and then hit “submit.” Lenders then have every piece of information they require, Dash says, and a couple of days later, Credible will notify the student that the lenders’ offers have arrived. Students can then sign into their profile to review and compare the responses in their own private, secure dashboard. They can drill down into loan information, interest rates, total costs and so on, giving them, at least in theory, the opportunity to make a more informed decision.

Dash explains that Credible has essentially opted to take a “marketplace-style” approach to student loan refinancing, inspired by the way sites like Kayak.com have been able to transform the travel market. The Credible team set out to offer a similar experience; in other words, to simplify the complex search for financial services products that are themselves, fairly complex.

Naturally, many students opt to remain in the federal loan market rather than moving into private markets due to the risk of losing many of the protections the federal market provides. What’s more, private market giants like Discover Financial Services and Sallie Mae are the kind of companies that have little incentive to offer their existing customers refinancing options.

As a result of the complex, risky and often frightening world of student loans and loan refinancing, Dash says that it’s extremely important for Credible to be seen as an independent, transparent and customer-first option amidst the jungle. As part of that, Credible offers its service for free, and allows students to decide to which lenders it sends their information.

It’s still early in the process for Credible, so that list of supported lenders will likely expand over the coming year. But, as of now, the startup had 30K students sign up during its beta trial and Dash said that one of its student borrowers is now expecting to be able to save more than $40K in interest payments over the life of their refinanced loans.

As to how it plans to make money: Dash says that the goal is to, as much as possible, align its business model with both borrowers and lenders. That means that the startup has opted to get paid on disbursed loans as opposed to the Kayak-style lead-gen model, so that a lender must extend and offer a refinancing and a borrower must actively accept that offer before Credible can generate revenue.

To further support its launch and upcoming marketing push, Credible has closed a $500K round of seed financing from a handful of venture capital funds and angel investors, including Carthona Capital, Cthulhu Ventures, Orrick, Cap-Meridian Ventures, Simon Franks, Trevor Loewensohn, Mitch Zuklie and Peter Gammell.

With its funding in the bank, looking forward, Dash sees potential opportunities for Credible’s platform and technology to be applied beyond the world of student loans. After tackling the student loan market, the team’s big goal is to work towards the transformation of “every complex application process in banking and insurance.” The central goal for the startup, whether it’s in student loans or outside, will be to put some of the control back in the hands of the consumer and make it easy to switch lenders and understand their options.

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artdaily.org

Private Museum owners from around the world gather in London for summit

By artdaily.org

LONDON.- Art14 London announced the second edition of the Global Private Museum Summit, which will be sponsored by Citi Private Bank. The event will take place at the Royal Academy of Arts, London on Thursday 27 February 2014. Following the success of the inaugural event earlier this year, the closed-door session will bring together leading contemporary art museum owners to set up a network that will share exhibitions, expertise and funding strategies. Across the world, private museums of contemporary art are changing the ecology of the art world and this summit provides a unique forum in which an emerging and powerful force can meet and help to develop a sustainable future for the art world.

The Global Private Museum Summit will assemble private museum owners from all over the world, from China to Greece, from Indonesia to the United Arab Emirates, from the USA to Germany and from Mexico to Italy.

Philip Dodd, Chairman of Art14 London Advisory Board and Chairman of Made in China UK will chair the summit. Participants will include Wang Wei (China); Kian Chow Kwok (China); Li Bing (China); Dai Zhikang and Wong Shun Kit (China); Owais Husain (UAE); Ramin Salsali (UAE); Dominique and Sylvain Levy (France); Dirk Krämer and Klaus Maas (Germany); Gunnar B. Kvaran (Norway); Alexandra Economou (Greece); Dr Oei Hong Djien (Indonesia); Fabiana Marenghi Vaselli Bond (Italy); Patrizia Sandretto Re Rebaudengo and Eugenio Re Rebaudengo (Italy); Gina Diez Barroso (Mexico); Simon Franks (UK); Lord Edward Spencer-Churchill (UK); Nicolai Frahm (UK); Dr Bernhard Zünkeler (USA) and Don and Mera Rubell (USA).

Philip Dodd states that ‘The response to the inaugural summit was immensely positive. It clearly met a need and there has been tremendous enthusiasm from last year’s contributors – as well as new participants from countries as various as Indonesia and Norway – at the news that we shall hold a second symposium. The ambition of the summit is to set up a genuinely global network – whereby an exhibition might travel from France to Indonesia to the US or from China to Germany. In a global art world we need global networks and this may well be the first one which does not assume that west is best.’

Stephanie Dieckvoss, Fair Director, commented ‘The Global Private Museum Summit demonstrates Art14 London’s dedication to bringing major global private museum owners to London’s vibrant art scene. The galleries exhibiting at the Fair will show artists from almost every continent of the world and display them in dialogue with each other. The summit reflects the need for an art world with an international outlook and allows private museum owners to share their knowledge and expertise with a view to driving change world-wide.’

Suzanne Gyorgy, Managing Director Citi Private Bank Art Advisory & Finance said: ‘Citi Private Bank is thrilled to sponsor the Global Private Museum Summit, which will provide a fantastic opportunity for museum owners from around the world to share knowledge, develop networks and exchange ideas. The Summit acknowledges the increasingly important role of private museums, and has the potential to influence the way they collaborate and operate in the global art world.’

The Global Private Museum Summit is a three-way partnership between Art 14 London, Citi Private Bank and Made in China UK, of which Philip Dodd is Chairman. The Summit is the property of Made in China UK.

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TechCrunch

London’s Private Taxi Marketplace Apps Move Up A Gear As Kabbee Gets Backed By Octopus

By Steve O’Hear (TechCrunch)

Hailo, the taxi-booking app with a whopping $50 million+ in funding from the likes of Atomico, Accel, Union Square Ventures, and Richard Branson, has been grabbing most of the headlines in London. The service lets you book a fully licensed taxi in various major cities in the U.S. and Europe.

But, as in other cities in the UK, private taxi firms – known as “minicabs” – offer a cheaper, unmetered, alternative to the iconic black cab. Legally these taxi firms can’t be ‘hailed’ from the street and are therefore predisposed to being booked in advance via the telephone (or an app!). Now throw in a marketplace element that lets you get an instant quote from a range of competing minicab firms, along with user reviews and ratings.

That describes the proposition of minicab marketplace apps Kabbee, and Minicabster, both of which are announcing new funding. The private taxi-booking app space in the UK is definitely moving up a gear.

Kabbee has raised a £3.8m Series A funding round led by Octopus Investments (previous backers of property search engine Zoopla, Graze.com, SwiftKey and Secret Escapes). Notably, Simon Nixon, the founder of MoneySupermarket.com, also joins the round – adding a significant amount of marketplace experience to the startup’s investor list. According to CrunchBase, this brings total funding to around $9 million (circa £5.6m).

The additional funding will be used by Kabbee to accelerate growth, including beyond London, and consolidate what it claims is its position as the UK capital city’s most popular minicab app, as well as to further develop its technology and build awareness of the Kabbee brand.

Kabbee’s existing backers include Samos Investments (Betfair, Ocado, Goal.com), Pentland (Speedo, JD Sports, Hunter), Redbus (LOVEFiLM, Lionsgate), Tim Levene (Managing Partner at Augmentum Capital) and Ed Wray (co-Founder of Betfair).

Meanwhile, Minicabster, which currently operates in London, Manchester and Birmingham, has raised £2 million in funding (the round actually closed back in August) from a number of angel investors including David Buttress, CEO of takeout marketplace Just-Eat, Daniel McPherson, founder of Launcha, and Tom Singh, founder of New Look.

I’m also told that Buttress was instrumental in the conception of Minicabster, having first been pitched the idea by co-founder Brooke Pursey at a barbecue shortly before Anycabs, as it was known then, was founded two years ago.

So, just like Kabbee, Minicabster has significant marketplace experience in its investor ranks. In a sense, both startups are applying the Just-Eat model to the minicab space, while issues over trust and safety are also shared.

Comparing the two offerings like-for-like, Kabbee has apps for iPhone, Android and Blackberry 10, and lets users instantly compare quotes from 60 leading London fleets and then book and pay by cash, card or pre-paid account. It launched in June 2011 and claims over 250,000 app downloads to date.

Minicabster has apps for iOS and Android, and claims 200,000 “users”, which I’m taking as app downloads.

Another direct competitor is CompareMyFare.

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London Evening Standard

Minicab booking app Kabbee raises £4m to take on black taxis

By Lucy Tobin (London Evening Standard)

A minicab app has secured almost £4 million in investment to challenge the capital’s black taxi drivers.

Kabbee, a price comparison and booking app for London minicabs which has more than 250,000 users, is raising the cash in a bid to take on Hailo, a rival black cab service. Hailo allows passengers to pre-book black taxis but last month drew criticism when it began forcing customers to pay a minimum of £15 for a night fare..

Kabbee has secured £3.8 million from investors behind businesses including housing website Zoopla and food firm Graze as well as the founder of moneysupermarket.com, Simon Nixon, to win business Hailo is losing.

“The London minicab sector has been cannibalising the black taxi market for 20 years because metered fares have been going up, even as the quality difference [has] been disappearing,” said Kabbee’s chief executive Justin Peters. “Satnav systems mean that The Knowledge is no longer essential, and because black taxis congregate in Central London, minicabs now offer better coverage too. Londoners have a right to demand the best transport service so it looks like London’s iconic black taxis will have some difficult decisions to make.”

Transport for London is investigating Hailo over its new minimum fares. TfL sets a £2.40 starting price for London taxis and has warned black taxi drivers that they risk enforcement action if caught charging passengers more than is stated on the meter.

But Hailo is sticking to its fare plans of forcing all customers to pay £10 in the day, or £15 at night, even if the meter reading is lower.

Kabbee’s app links up Londoners with a fleet of 5,000 minicab drivers. It does not charge a minimum fare.

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FT.com

Kabbee in search of best way to hail cab

By Jonathan Moules, Enterprise Correspondent (FT.com)

If you were looking for somewhere to launch a smartphone app for booking minicabs, you would be hard pressed to find anywhere better than Crouch End. This north London suburb has never had a tube or train station, making it one of the most difficult places to reach by public transport.

But if Justin Peters thought launching his Kabbee app would be an easy ride, he chose the wrong market in terms of the technology, if not topography.

Hailing taxis with the click of an app has quickly become one of the most competitive battlegrounds of the digital world – with more people touting for business than kerbside on Oxford Street on a Saturday night.

However, Mr Peters has approached the taxi market in a very different way to other e-hailing apps, which book black cab drivers in London and other major cities whose tariffs and operations are governed by strict regulations.

What the Kabbee app offers, by contrast, is price comparisons and user ratings for local minicab firms, each of which employs its own fleet of drivers.

In the UK, this is a market of about 2,500 separate fleets, each with different prices and standards of service, employing some 55,000 drivers.

As a result, devising a smartphone app to book one of them is rather more complicated than using a smartphone to hail a badged taxi driver, which is what GetTaxi, Uber and Hailo set out to do. These apps simply deal direct with drivers and – at most – have to track about 23,000 cars via GPS

“Other e-hail apps are selling what is already a commodity,” Mr Peters argues. “We don’t even control the entire ecosystem of drivers.”

He claims he first says an opportunity in online minicab booking as far back as 1998, shortly after he left school and decided to become a dotcom entrepreneur.

“I was lying in bed thinking of a service with a short lead time that could be transformed by the speed the internet sends information to hundreds of people,” he recalls. “It was then I thought: cabs.”

But it was another 12 years before he launched his app. In between, Mr Peters worked as a City trader – a job he says that he only took to raise capital for his cab idea.

He then bought a minicab fleet of his own, imagining that he could scale up the business to become a direct competitor to Addison Lee, London’s largest private car hire business. When this proved too difficult, he focused on the concept of Kabbee.

Without the overheads of managing a fleet, Kabbee broke even in a couple of months, says Mr Peters. In the 30 months since then, it has booked £10m-worth of fares from a network of 5,000 minicabs, making it the second largest organiser of taxi journeys in London after Addison Lee. Kabbee makes its money by taking a 10 per cent commission on each fare.

One of Kabbee’s continuing challenges, though, is maintaining service levels while working with so many fleet operators. Unlike black cab drivers, minicab drivers do not have to provide a minimum standard of vehicle or, if working in London, pass the test about street names and routes, called “The Knowledge”.

Mr Peters says he assessed about 300 of London’s largest minicab fleets before selecting 80 to join his smartphone service last year – most of the others only have a handful of drivers. Of those 80 fleets, 20 have since been replaced, after failing to meet Kabbee’s minimum standards of punctuality and customer satisfaction.

Raising standards is as much about helping the minicab firms as attracting people to use the app to hail a ride, Mr Peters argues – pointing out that Kabbee’s records of pick-up and arrival times, and passenger ratings, give fleet owners their only independent monitoring of how drivers are performing.

Mr Peters claims to have global ambitions and has so raised $3.25m in two funding rounds, from backers including Betfair founder Ed Wray, Pentland Group, Redbus Group and Samos Investments.

However, he admits that Kabbee’s progress may be slower than other e-hail app companies, because its aim is to consolidate whole cab markets rather than simply increasing business for individual drivers.

“We are tackling an industry that seems to be broken because it isn’t consolidated,” he says. “People in it don’t seem to be earning enough money and the passengers aren’t having a good experience. If we can solve it in London we can export it. I couldn’t see us doing that in 100 cities but I could see us going to six.”

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PR Newswire

Amazon to Acquire LOVEFiLM International Limited

Press Release

LUXEMBOURG CITY and LONDON, January 20, 2011 /PRNewswire-FirstCall/ — Amazon.com, Inc. (NASDAQ: AMZN) today announced that it has reached an agreement to acquire the remaining shares in LOVEFiLM International Limited (http://www.LOVEFiLM.com). LOVEFiLM is a leading European subscription entertainment service which combines the benefits of online DVD and games rental-by-post as well as streaming films and TV shows instantly over the internet to PCs, internet enabled TVs and Playstation(R)3. LOVEFiLM operates today in the UK, Germany, Sweden, Norway and Denmark. Amazon already has a significant minority shareholding in LOVEFiLM and does not itself operate any similar business in Europe.

“LOVEFiLM has been innovating on behalf of movie rental customers across Europe for many years and with the advent of the LOVEFiLM player, they are further delighting customers by streaming digital movies for their immediate enjoyment,” said Greg Greeley, Amazon’s Vice President of European Retail. “LOVEFiLM and Amazon have enjoyed a strong working relationship since LOVEFiLM acquired Amazon Europe’s DVD rental business in 2008, and we look forward to a productive and innovative future.”

“The deal is a winner for the members who love LOVEFiLM because of its value, choice, convenience and innovation in home entertainment,” said Simon Calver, Chief Executive of LOVEFiLM International. “With Amazon’s unequivocal support we can significantly enhance our members’ experience across Europe.”

The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first quarter of 2011.

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Wall Street Journal

Amazon Buys Remainder of LoveFilm

Press Release

Amazon.com Inc. said it has acquired the full control of LoveFilm International Ltd., a European DVD-by-mail rental service that is often described as the Netflix Inc. of Europe.

Amazon was already one of LoveFilm’s largest shareholders, with about a 42% stake that it received after combining its own DVD-rental operations in Europe with the company in 2008.

Thursday’ s deal valued LoveFilm at around £200 million ($320 million), said people familiar with the matter.

In just over seven years, LoveFilm has used acquisitions to become Europe’s largest DVD-subscription businesses with more than 1.5 million customers in the U.K., Germany, Sweden, Norway and Denmark.

Much like Netflix in the U.S., LoveFilm has shifted from mailing DVDs to streaming digital movies over the Internet. LoveFilm has recently started streaming films on devices such as Sony Corp.’s PlayStation 3 consoles and Internet television sets made by Sony and Samsung Electronics Co.

Amazon is a big seller of DVDs and already has an on-demand service that lets people rent movies by streaming. However, it doesn’t rent DVDs in the mail, as LoveFilm and Netflix do. Netflix has started to offer its streaming service in Canada , but doesn’t currently operate in Europe.

Dharmash Mistry, a partner at Balderton Capital who is on LoveFilm’s board, said the deal would help LoveFilm increase its drive to a digital streaming service.

“Our December figures showed 20% of all consumption was digital,” Mr. Mistry said. “That would have been less than 5% at the beginning of last year.”

The shift to online streaming meant LoveFilm was competing with traditional broadcasters like BSkyB and Virgin, Mr. Mistry said. “This is a volume business. Sky has 10 million subscribers, Virgin about three million. LoveFilm is under two million,” he added.

LoveFilm, which was founded in 2004, currently has a catalogue of 70,000 movies and videogames. In 2006 the company merged with Video Island and Screen Select to create Europe’s largest online DVD rental business.

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Saatchi Gallery Online

The Franks-Suss Collection Curated by Tamar Arnon and Eli Zagury

PHILLIPS DE PURY & COMPANY GALLERY The Franks-Suss Collection Curated by Tamar Arnon and Eli Zagury

Saatchi Gallery Online

London – Phillips de Pury & Company is pleased to announce that a curated selection of about 25 works from The Franks – Suss Collection will be presented at Phillips de Pury & Company’s space at the Saatchi Gallery. The exhibition will be on view from January 28, 2010.

Inspired by collectors’ passion and energy, we are developing unique platforms to share the love of art of exceptional collectors with a broader public. We will offer the unique opportunity to view private collections curated by exceptional art collectors. Our overall goal is to offer diverse perspectives on contemporary art and the individuals that champion it.

The Franks-Suss Collection was established in 2002 by Simon Franks and Rob Suss. The collection, curated by Tamar Arnon and Eli Zagury, includes in excess of 150 artworks by some 50 artists from 16 countries working in a variety of media including painting, sculpture, photography and video projection. It showcases a variety of contemporary artists, with works from China and wider Asia forming a large part of the collection although pieces from The Americas, Europe, The Middle East and Africa are also included.

Simon Franks, (The Franks-Suss Collection):

“The pieces we have selected for this show highlights the work of some of the emerging artists in our collection. We are very proud to be able to showcase their exciting new work in such a wonderful setting. Once again Phillips De Pury and the Saatchi Gallery are demonstrating their passion for art and their dedication to bringing the next generation’s work to the attention of the wider public. Collecting art should be a very personal journey. The more you see, the more you learn and the more your collecting takes on new directions and new meanings. In navigating this path we have sought out work that displays at least one of three elements. For us these elements are: genuine artistic skill and technical brilliance, an innovative and original concept, and a challenging or aesthetically pleasing look. It is my strong belief that every piece in our collection has at least one, if not all, of these elements.”

The Franks-Suss Collection was created and developed with the help of two curators; Tamar Arnon and Eli Zagury. These two curators, alongside Simon Franks and Rob Suss, followed their instincts and impeccable taste to obtain some of the greatest artists from the undiscovered and emerging sectors of the market. From its earliest origins a large part of the focus of the collection was drawn from the emerging world, based on the premise that where there is economic growth, cultural revolution or political turmoil, there is often poignant contemporary art to be found.

The exhibition at Phillips de Pury & Company’s space in the Saatchi Gallery features some 20 artists from 9 countries including Farhad Moshiri from Iran, Os Gemeos from Brazil, Sun Xun from China, Matthew Day Jackson from the USA and Boo Ritson from the UK. Others include Fernando Gutierrez, Michael Vasquez, Jia Aili, Ryan McGinley, Mariana Mauricio, Chen Ke, Kentaro Kobuke, Steve Bishop, Kohei Nawa, Tomoo Gokita, Jon Pylypchuk, Li Jikai, Izumi Kato, Radhika Khimji and Kevin Francis Gray.

The Franks-Suss Collection
Phillips de Pury & Company Gallery at Saatchi Gallery
Duke of York Headquarters
London
SW3 4SQ
Tel: +44 20 7318 4010
Gallery opening hours: 10am-6pm, 7 days a week, last entry 5:30PM
Free admission

www.phillipsdepury.com
www.saatchigallery.com

This press release is available on the press page of our website: http://www.phillipsdepury.com/press.aspx
Further information is available upon request. Please contact the communications department below for further details or images.

Press Contacts:

Lauren Holowesko
Communications Assistant to Thierry Nataf – Senior Vice President
[email protected]
+ 44 20 7318 4010

Sarah Baptiste
Assistant to Thierry Nataf – Senior Vice President
[email protected]
+44 20 7318 4010

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Private Equity News

Apex to lose stake in advertising company

Private Equity News
Jennifer Bollen

Apax partners has become the latest private equity firm to lose its stake in a portfolio company after UK advertising company Streetbroadcast was bought out of insolvency.

UK restructuring firm Redbus Group announced it had acquired the assets of Streetbroadcast last week. The acquisition followed the appointment of MCR Corporate Restructuring as the company’s administrator in March.

The deal has meant that Apax and its partners have lost their stakes in the business. Apax had invested £3m (Euro 3.4m) in Streetbroadcast alongside Vincent Tchenguiz’s real estate and venture capital firm Consensus Group in 2004. The following year, private equity firm New Smith Capital Partners also bought into the business.

The firms did not disclose the size of their individual stakes but Streetbroadcast had £21 million of equity on its balance sheet for the last two years and £10m of debt, according to Simon Franks, chairman of Redbus Group. Apax was unavailable for comment on the loss; Redbus declined to comment; Consensus did not provide a comment in time for publication.

Franks said Streetbroadcast’s creditors achieved a recovery rate – the amount of money recovered by lenders against the value of a security when they issued a loan – of less than 10%.

He said Redbus, which has bought all of Streetbroadcast’s assets but not the corporate shell for an undisclosed sum, has bolted the company onto advertising business The Media Vehicle, an existing investment. Berwin Leighton Paisner gave legal advice to Redbus while law firm Brown Rudnick advised MCR.

The deal marks the latest loss for buyout firms in recent months as their portfolio companies grapple with the recession. Losses since March include those by Change Capital, which lost £28m in its investment in UK hardware store chain Robert Dyas in April, and this week it emerged UK private equity firm Lloyds TSB Development Capital wrote off its investment in UK healthcare company Robinia.

North American firms have also been hit, according to figures from Private Equity Analyst, the US-based sister publication of Private Equity News, which showed firms lost almost $7bn (Euro 5bn) in equity in companies that became insolvent in the region last year.

Dean Dorrell, chief executive of Redbus, said: “The fact that a company as innovative as Streetbroadcast has gone into administration is perhaps another symptom of the current harsh economic environment.”

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The Independent

Redbus buys advertiser backed by Apax

The Independent

Advertising: The acquisition and turnaround group Redbus yesterday bought Streetbroadcast, the largest lamp-post advertiser in Britain, two months after the company went into administration. Streetbroadcast was owned by a consortium of heavy-hitting investors including Apax Partners, New Smith Capital Partners and Vincent Tchenguiz’s Consensus Group. Yet it was put into administration at the start of March after the backers decided against further investment in the group, which has struggled since the onset of the credit crunch.

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MediaWeek

Primesight bid to buy Steetbroadcast thwarted by Redbus

MediaWeek

Maisie McCabe

London – Primesight has failed in its bid to buy beleaguered outdoor outfit Streetbroadcast after a late move by investment vehicle Redbus Group.

It is understood that Redbus, which specializes in buying the assets of struggling companies within the media and telecoms industries and counts the likes of DVD rental outfit LoveFilm among its investments, moved quickly over the past few days to purchase the entire assets of Streetbroadcast yesterday (29 April).

Media Week reported earlier this week that Primesight was poised to buy Streetbroadcast’s retail park business but negotiations are believed to have been thwarted at a late stage.

Dean Dorrell, chief executive of Redbus Group, said this acquisition is essentially a “bolt-on” transaction and Streetbroadcast’s assets fit into Redbus’ existing outdoor advertising operations.

Redbus Group’s out-of-home arm Redbus Outdoor operates six-sheet student advertising company X-sites and trolley and shopping basket ad company In-Store.

Simon Franks, chairman of Redbus Group said the current economic conditions mean “unfortunately, some smaller businesses or less well financed businesses are getting crushed” while only the “strong companies can ride through”.

Though Franks confirmed Redbus has bought Streetbroadcast in its entirety except the name, he could not confirm which parts of the business Redbus would concentrate on in the long term.

Streetbroadcast entered into administration at the beginning of March, but stopped trading on 16 April when the remaining staff members were made redundant. Franks said he did not rule out re-employing some of the staff who had lost their jobs.

Primesight was unavailable for comment.

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guardian.co.uk

Leeds bidder considers claim against Bates

Matt Scott

Ken Bates is set to come under more legal scrutiny over the 2007 administration process of Leeds United as a result of his court action in Jersey. Redbus Group was the highest cash bidder in the administrator’s auction of the club nearly two years ago. But the surprise decision by the offshore company Astor Investments to waive a £17.6m debt owed by Leeds handed control to Bates’s consortium.

In the wake of Guardian revelations of attempts in the Jersey royal court to identify the ultimate beneficial owners of the offshore companies around Leeds, Redbus has sought legal advice to discover whether it now has an opportunity to overturn the decision that led to Bates becoming the owner of Leeds two years ago.

Redbus is exploring whether it can launch a claim against Astor, Bates, his Forward Sports Fund investment vehicle or the club executives who took Leeds United into insolvency and remain at Elland Road with the new company. Mark Taylor, who is Bates’s solicitor and a Leeds director, has stated: “There is nothing to investigate.”

Those behind the Redbus attempts to take over the club are said to be still smarting at the failure of the acquisition. Although that deal was structured with a private-equity partner, it is believed Redbus has sufficient funding to carry out the purchase according to the previous terms and to invest in the squad independently of any third-party involvement.

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Can Lovefilm compete with downloads?

The Sunday Times

Matthew Goodman

A British firm that rents out DVDs by post has just taken over internet giant Amazon’s service. But can it compete with downloads?

IF you have ever wondered which movies the former page three girl Melinda Messenger likes to curl up with, then Lovefilm.com is the place to find out.

She is one of several celebrities to list her favourite films on the site. The picks are there to provide a little bit of inspiration for customers of the site’s main business – film rental.

In four years Lovefilm has become the UK’s leader in the fast-growing online DVD rental market, and last week it grew by another 50% after announcing a deal to take over a similar service offered by Amazon, the internet retailer, taking the number of subscribers to 900,000. As part of the deal Amazon will take a stake, thought to be about 30%, in Lovefilm, making it the company’s biggest single investor. The deal is reported to value Lovefilm at about £200m.

The service is straightforward. Users create a list of DVDs they wish to rent from the 65,000 or so available (having recommendations on the site helps focus the mind, says the management). For a monthly charge, anywhere between £3.99 and £14.99, the company posts out the DVDs on the list, one or two at a time. Customers return them when they are finished in a prepaid envelope and the next disc on the list is sent out. There are no late fees, and its fans say it is easier and more convenient than going to a video shop. So far the group is in no more than 3% of UK households but it is confident this will grow.

Chief executive Simon Calver has been working on the Amazon deal for several months and believes it is crucial to have as big a customer base as possible because the competition comes not just from other online rental services but also other film sources – high-street stores and subscription-movie channels on satellite and cable television.

“With Amazon we have a better chance of being competitive in that market than as two independent companies,” he said, adding that Amazon’s experience of developing into an internet giant should benefit the company greatly. The US group will have a seat on the Lovefilm board, alongside representatives of the smaller company’s existing backers, who include Balder-ton Capital and Index Ventures, the tech investors.

Lovefilm, which had sales of £50m last year, has been steadily consolidating what is a relatively niche industry. The first site to launch in the UK was Video Island in 2003; Lovefilm followed about a year later and the two merged in April 2006, having between them swallowed a number of smaller rivals along the way. Before the Amazon deal, the business was estimated by Screen Digest, a consultancy, to have about 62% of the online rental market. That has now risen to almost 80%.

Despite this leading position, there is a concern in some quarters that technology could derail the business model. The prospect of internet users downloading movies directly could render the idea of an offline rental service obsolete. In the US last year DVD sales fell 4.5%, as downloading became more popular. Netflix, the US company on which Video Island and Lovefilm are modelled, has 6,000 films available for download. The British company offers just over 800 at present.

Calver believes that the threat should not be overplayed. “Because we are in this market, we can monitor it. Everyone is still learning, and most people are groping their way through digital distribution.

“We are experimenting with downloading, with different price points and business models. But there are still fundamental barriers to downloading, such as the choice of content, the time it takes to download a film, and how to get the product from the PC and onto the TV.”

He argues that there is a fundamental difference between paying to download a music track, which customers might listen to repeatedly, and a film, which may get watched just once. This is especially true in the UK.

Calver said: “People here are used to paying [for entertainment] on a subscription basis; the television licence fee, cable TV. Most digital services are pay-per-transaction. There’s inherent resistance to that in the UK. Digital downloading will be significantly smaller than DVDs for many years to come.”

Calver’s more immediate goal is to reach 1m subscribers and take the business into profitabil-ity, which should be achieved by the end of this year. Lovefilm has been paying special attention to its pricing, increasing the range of packages offered to attract wallets of all sizes.

Despite Calver’s views on subscriptions, he says a new pay-as-you-go service is beginning to attract people who watch films relatively infrequently.

If the group can extend its service further beyond movie buffs and enter the mainstream, it could provide a Hollywood-style happy ending for its backers.

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Amazon puts weight behind Lovefilm

Tom Braithwaite in London

Amazon, the world’s biggest online retailer, is to bow out of DVD rentals and throw its weight behind Lovefilm, the leading European specialist, in the latest shake-up of the home entertainment market.

The US company is to transfer its subscribers – who participate in an old-meets-new process of ordering films via the internet but receiving and returning them via the post – and inject some cash to Lovefilm in exchange for a stake believed to be about 30 per cent of the company and valued at about £60m to £70m.

Simon Calver, chief executive of Lovefilm, said the arrival of Amazon as the single biggest shareholder did not mean an end to plans for an eventual initial public offering or buy-out of the business. “This puts those options more firmly on the table than before,” he said.

Lovefilm, which hired Goldman Sachs in December 2006 to explore its strategic options, is backed by Arts Alliance Media, Index Ventures, Balderton Capital and DFJ Esprit.

Lovefilm is understood to have recorded unaudited sales of £70m last year compared with £41.4m in the 18 months to December 31 2006 – the reporting period included the acquisition of Video Island, a competitor.

Although Amazon is to retreat from the market, it will offer Lovefilm’s rental service via its own websites in the UK and Germany and provide marketing support.

Lovefilm had boasted 600,000 subscribers before Monday’s announcement of the deal, which will see the customer base rise to 900,000. The increase, although significant, suggests the company had gained a significant lead over Amazon in the niche market for DVDs sent via the post.

But as well as selling DVDs, Amazon also competes in the market via its fledgling film download service in the US, called Amazon Unbox.

The deal with Lovefilm, which has to be passed by UK and German competition authorities, does not prevent Amazon bringing its digital alternative to Europe. Lovefilm operates a small download service of its own.

Amazon’s decision to throw its weight behind Lovefilm is only the latest sign of upheaval in the home entertainment market. In a similar move, Wal-Mart dropped DVD rentals in 2005 and advised its customers to switch to a service operated by Netflix, the US specialist.

The attraction of the online model has posed a significant structural threat to traditional film rental companies such as Blockbuster, which has suffered falling revenues in spite of launching its own internet DVD rental service.

Figures from the MRIB, the entertainment consultancy, showed the rental market shrank on the UK high street from 6.9m rents in January 2007 to 5.6m last month; the postal market increased from 2.2m to 2.7m.

The challenge for the bricks-and-mortar survivors such as Blockbuster as well as the relative newcomers such as Lovefilm and Netflix is the prospect of “disintermediation” as studios either cut out the middle man or select new or fewer platforms for digital downloads. “That is going to be a much more competitive space,” said Ian Maude, analyst at Enders Analysis. “It’s going to be much harder for them [Lovefilm] as we shift to the next technology platform.”

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Home Entertainment

Tech success for Lovefilm

Online rental service Lovefilm International has been recognised as two of the fastest growing technology companies in the UK.

The Sunday Times’ Tech Track 100 survey which ranks Britain’s fastest growing private technology companies put Lovefilm International fifth in the overall rankings.

The five year-old company has boosted its sales 367.92 per cent from £1.3 million in 2004 to an annualised £27.6 million in 2006.

Lovefilm ceo Simon Calver told HEW: “It’s been an exciting four years with the business. We are beginning to get broader recognition and awareness of our achievements in the markets we are working in.

“It also goes to show that entertainment is not necessarily a shrinking business. There are people out there who are watching more films and consuming more content.”

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Financial Times

Bates leaves opposition crying foul

Roger Blitz, Leisure Industries Correspondent

Ken Bates invoked Iraq’s executed former dictator to justify his continued stewardship of Leeds United football club.

“Ninety-nine per cent of the letters and e-mails are supporting us,” the club’s chairman said this week as he sought to buy back the club from administration. “That’s as good as Saddam Hussein did and he was fiddling the figures.”

Mr Bates, who sold Chelsea to Roman Abramovich, is this weekend banking on his famed determination and cussedness to hold on to the Elland Road club.

Opposing him to varying degrees are local MPs, Leeds supporters, the Football League and HM Revenue & Customs.

Mr Bates, 75, who first took control of the club in January 2005, has presided over the latest decline in a once mighty club that as recently as 2001 were semi-finalists of the Champions League. Yet his opponents have thus far proved powerless to unseat him.

The club’s most startling decline came under former chairman Peter Ridsdale, who borrowed heavily in the expectation of future revenues from further years of Champions League qualification. The club missed out on qualification, triggering one of the more rapid and pitiful collapses in British sport.

The sale of players reduced debts to about £21m when Mr Bates bought the club from Leeds chartered accountant Gerald Krasner.

Last year, it was one match away from a return to the Premier League. But in May, Mr Bates took Leeds into administration with debts of £35m and the team were relegated into League One, the third tier of the English football pyramid.

KPMG, its administrators, this week said it was fast running out of cash and heading for liquidation.

But Mr Bates continues to outwit his enemies. He proposed buying back the club, offering creditors 1p in the pound, and won a Company Voluntary Arrangement from creditors by a narrow margin last month.

Revenue & Customs, owed £7.7m by the club, challenged the vote, despite Mr Bates upping his offer to them. It issued a 52-pagewitness statement questioning the voting rights of threeoffshore creditors, Krator Trust, Astor Investment Holdings and Forward Sports Fund, who represent 45 per cent of creditors.

The statement alleged these creditors were linked to Mr Bates.

In stepped KPMG, forestalling Revenue & Customs’ challenge in the High Court by putting the club up for sale again at 8pm last Friday and inviting bids by Monday. Bidders had six hours to examine Leeds’ accounts and four bids were lodged.

On Wednesday, KPMG announced Mr Bates had won the bid with an undisclosed sum.

Mr Bates is thought to have bid around 13p in the pound. A consortium of Redbus, the investment company headed by Simon Franks, and Simon Morris, a local property developer, is understood to have offered 30p. So too, it appears, did Adam Pearson, the club’s former commercial director.

The identity of the fourth bidder has not been disclosed.

So why did Mr Bates win? Astor, the largest of the creditors, told KPMG that it would waive its debts only if Mr Bates won the auction. Victory for Mr Bates.

Colin Burgon, a Leeds MP, said the Leeds United case raises issues about football governance.

“Many of us now are looking seriously at the role of companies registered abroad but having a decisive role in football clubs in Britain,” he said.

The Football League, under the chairmanship of former Conservative minister Lord Mawhinney, isfurious. Now it is refusing to hand over the so-called “golden” share all clubs need to enable them to play in the league.

Appalled at the way KPMG has handled the administration, particularly the sale of the club without a CVA, the league is threatening court action and demanding greater transparency from the club and the accountancy company.

KPMG’s view is that it had to act in haste because ofthe parlous state of theclub and that it wouldbe impossible to achieve another CVA because of Astor’s position.

Leeds MPs also want an explanation from KPMG as to why they said Astor was registered in Guernsey when it is in fact based in theBritish Virgin Islands.

What puzzles them further is why Yorkshire Radio, owned by Mr Bates, is owed £470,000 by the club.

The club called on the league to transfer the golden share “to bring all matters to a satisfactory conclusion and allow the club to concentrate on football again”.

But Mr Bates’ enemies are joining forces, hoping to prevent his regime at Leeds from continuing much longer.

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Financial Times

League refuses to approve Leeds sale

Roger Blitz, Leisure Industries Correspondent

The Football League is refusing to sanction the sale of Leeds United to Ken Bates, the club’s chairman, and has launched an inquiry into the handling of the club’s affairs by its administrator, KPMG.

In a hard-hitting statement released on its website on Thursday, the league said it had failed to receive the required documentation and assurances from KPMG over its intended sale of the club to Mr Bates.

“To date, no documentation regarding the sale has been submitted to the league by the administrators,” the league said.

KPMG on Wednesday resold the club to Mr Bates for an undisclosed sum without a company voluntary arrangement. It solicited bids for the club last Friday after the Inland Revenue challenged a creditors’ deal put together by Mr Bates last month.

The deadline for bids expired on Monday, and Mr Bates’ bid trumped a joint offer from Simon Franks of investment company Redbus, and property developer Simon Morris.

Mr Bates, who took over the club in January 2005, took the club into administration in May, with debts of £35m.

KPMG said on Wednesday it knew the league would not consider transferring its football share, which effectively registers the club with the league, to a new entity without a CVA.

In its statement, the league said that without the required documentation and assurances it was unable to transfer Leeds’ share in the league to the club. It also demanded certainty from KPMG on the Inland Revenue’s legal proceedings against the administrator.

However, the league said there was nothing in its regulations to stop the club playing in the league while under administration. The new season, with Leeds scheduled to play in League One, begins next month.

A meeting of the board on Thursday morning concluded it was concerned at the handling of the whole process by KPMG “and the chairman was instructed to obtain legal advice in that regard”.

It added that KPMG had asked to attend the board meeting, and the league had expected it to be there. “The league was informed late yesterday afternoon that they would not be attending, with no explanation provided,” the league’s statement said.

KPMG were unable to offer immediate comment on the situation.

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The Times

Bates fights off £36.5m rival bid to regain control of Leeds

Rick Broadbent

Ken Bates declared victory in the battle for Leeds United last night after fending off a £36.5 million rival bid and resuming control of the Coca-Cola League One club. The chairman rounded on his rivals after KPMG, the administrator, sold the club to him, but he still needs to convince the Football League and Revenue & Customs that the deal is right.

As officials meet today to decide whether to return the club’s Football League share ? a requirement if Leeds are to be allowed to compete next season ? the size of one of the failed bids will intrigue fans. Sources revealed that the deal put together by Simon Franks, the Redbus founder, and Simon Morris, the property tycoon, was worth £16.5 million, with a further £20 million to be invested on players over 2½ years. Franks said that he was “gobsmacked” at the outcome.

Bates said that Franks had “never been to Leeds”, before targeting his other rivals. “We have serious investors who want to come in for the right reasons,” Bates said. “Simon Morris was more interested in the property than the football club.”

Franks said: “I think we provided proof of funds of £10 million against his [Bates’s] £350,000 ? and we still lost by the vagaries of the process.” Franks claimed that only Bates had been allowed to see the books.

Another challenge is possible, but Bates’s first task is to convince the Football League that all football debts will be settled.

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The Guardian

Bates’ rival enters Leeds fray and pledges to restore former glories

Matt Scott (Guardian News)

Ken Bates has been accused of “playing with the emotions” of Leeds United fans with his claims this week that the club could collapse as a result of the taxman’s challenge to his takeover.

HM Revenue and Customs (HMRC) lodged its formal opposition to the Bates consortium’s takeover on Tuesday, with a preliminary court hearing set for tomorrow. A meeting was held yesterday involving the Football League and the administrator, KPMG, and there was another summit involving KPMG, HMRC and club directors as Bates sought to rescue his consortium’s ownership of the club.

It is believed that the consortium is willing to improve on its 8p-in-the-pound offer, which the taxman had rejected on Tuesday. But in the meantime rival bidders were joining the fray.

Simon Franks, of the Redbus Group, a corporate fund that specialises in turning around ailing companies, yesterday declared his firm’s interest.

“We have put in an offer of considerably more than the 8p bid by Bates,” said Franks. “We are the only UK group bidding for Leeds for its football abilities. Unlike other bidders’, ours is not a property deal. We believe that Leeds is a top-10 team and its rightful place is in the Premiership.”

Franks’s group has £35m at its disposal and, after paying off creditors the sums required to take control of the club from the administrators, would commit the remainder to player wages and transfer fees rather than to the buyback of the freeholds at Elland Road and the Thorp Arch training ground.

“With a tweak of the way the club is run we can get Leeds back to its former glory,” said Franks. “Our interests are utterly aligned with those of the fans.

“Leeds will survive, whatever happens here. Bates is trying to protect his interests but it’s an unfair tactic to say it faces liquidation. He shouldn’t play with the emotions of the fans.”

While the club remains in administration there is an embargo on player trading. That has made life difficult but although the chairman, Bates, had stated on Tuesday that his club would go to the wall if his takeover failed, there were more conciliatory noises yesterday from Elland Road. That was in response to concerns among club supporters that their funds paid for season-ticket renewals were at risk.

In a statement Leeds said: “We understand it is a worry for supporters who have invested in the club for next season, but you can be assured it is in everyone’s collective interest for the club to continue. This is what we are working to achieve.”

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BBC News Online

Lovefilm and Video Island link up

BBC News Online

Online DVD rental firms Lovefilm and Video Island, the largest two such providers in the UK, are to merge.

The firms will join under the Lovefilm brand, with the equal merger giving them greater scale to compete against US rivals Blockbuster and Amazon.

It will also enable Lovefilm and Video Island, who are both backed by private equity groups, to generate marketing and operational savings.

Video Island currently has 200,000 subscribers to Love Film’s 120,000.

The two groups also run the online DVD rental operations of a number of other companies.

Video Island – whose main brand is Screen Select – operates Tesco, ITV, MSN and Easycinema’s operations; while Lovefilm handles Sainsbury’s, WH Smith, CD Wow and Film Four’s services.

‘Stronger company’

Revenues from the combined group totalled £25m last year, and both firms have been expanding into Europe.

Simon Calver, chief executive of Video Island, will take up the same role at the merged group.

“For three years both companies have done an excellent job changing the way DVDs are rented in the UK and Scandinavia, by providing customers with unparalleled value, choice and convenience,” he said.

“Together we will be a stronger company offering better features and service.”

Renting DVDs via the internet was first pioneered in the US by American market leader Netflix.

It is currently suing Blockbuster, claiming its rival copied its way of doing business.

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The Guardian

Maiden’s ‘too expensive’ billboard deals scare off potential bidder

By Donovan Jones (seekingalpha)
  • Cautious start to takeover auction for advertiser

  • JCDecaux sees some of its contracts as uneconomic

Dan Milmo and Cosima Marriner (The Guardian)

The outdoor advertiser, Maiden Group, has received up to half a dozen takeover approaches, but one big rival has declined to bid, saying that its billboard contracts are “too expensive”.

Maiden, Britain’s fourth-largest outdoor advertiser, was put up for sale in December after breaching its banking covenants. The investment bank NM Rothschild, is running the auction and has received indicative bids from three advertisers, including Viacom Outdoor, a US-owned group, and Cemusa, a Spanish firm. It has also received approaches from two private equity players and an entrepreneur.

Ron Zeghibe, Maiden’s chief executive and largest shareholder, is not thought to have submitted a management buyout bid. Maiden’s management team owns more than 50% of the business. Shares in Maiden, which have put in a volatile performance this month, rose 14% to 68.5p yesterday, valuing the group at £36m.

However, one business widely expected to bid, the French outdoor advertiser JCDecaux, has not submitted an offer. Jean-François Decaux, co-chief executive of the group, said some contracts signed by Maiden last year had been renewed on uneconomical terms.

“The contracts they have renewed are far too expensive. We did not participate in the Rothschild process,” he said.

Last year, Maiden renewed a £450m contract to run poster campaigns in 17 railway stations, including King’s Cross and Liverpool Street in London. It also won full control of Network Rail’s roadside contract, covering advertising spaces on tracksides, station roads and bridges.

Some competitors were concerned about the cost of taking on these contracts in the event of a takeover. The standard outdoor advertising contract runs for up to 10 years and involves splitting the revenue with the site’s owner. This includes a minimum revenue guarantee and often features a sizeable upfront payment.

A number of significant outdoor contracts were put out to tender last year – including the Network Rail franchises – attracting interest from all the big players. The biggest UK contract this year covers London Underground. The incumbent, Viacom Outdoor, is thought to have lodged a bid for Maiden as an insurance policy in case it loses the Underground franchise.

Another potential Maiden suitor is Redbus Group, the company run by the young media entrepreneur Simon Franks. After making $34m (£19.2m) on the sale of his Redbus film distribution division to the US firm Lions Gate last year, Mr Franks’s main business is now Redbus Outdoor, which sells advertising space in supermarkets and on university campus billboards. Maiden’s railway and shopping-centre advertising assets are considered a good fit with Redbus Outdoor. Mr Franks confirmed yesterday that he was “actively monitoring” the Maiden situation, but had “absolutely decided not to bid” for it. However, Redbus is said to be interested in buying Maiden’s debt.

Some industry players are thought to be biding their time, waiting to see if Maiden’s financial condition deteriorates and if its contracts are retendered as a result, or if a fire sale is ordered.

Maiden has £39m of debt and owes trade creditors £20m. It has £9m cash on its balance sheet and faces a £2m legal bill following a recent high court ruling. However, the legal action is not thought to have material consequences for the group’s balance sheet. Maiden declined to comment yesterday.

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Financial Times

Film deal with happy ending

Clay Harris (Mudlark)

Simon Franks went into the City, starting as a graduate trainee at JP Morgan, because that seemed to be the best way to raise the capital to achieve his goal of starting a business.

By the time he was 26 and a proprietary trader at Paribas, Franks owned his flat outright and had saved several hundred thousand pounds. Mortgaging the flat, raiding his savings and selling his car, Franks in 1998 started Redbus Film distribution, which is now a leading UK independent distributor as well as co-producer of films such as Bend it Like Beckham.

Redbus yesterday was sold for $41m (£23m) in cash and shares to Lions Gate Entertainment Toronto, the independent film producer and distributor, making him a multi-millionaire at 34.

The deal gives Lions Gate the ability to self-distribute its films in the UK. Franks, distribution president Zygi Kamasa and head of theatrical distribution Chris Bailey, will continue to run the UK operations. The sale does not include Redbus’s outdoor advertising business or its online video rental arm, Video Island.

Redbus Interhouse, the AIM-traded data storage and internet hosting company, is not related to Franks’ company apart from holding a license to use the name.

Franks saw Redbus’s success as a reflection of the application of business methods and a hint of that entrepreneurial talent that was latent in the City.

None of his team has a conventionally “creative” background. He said: “Every single person here came from banking, law, accountancy or something else in business.”

Franks said the sale of Redbus Film Distribution was a “happy and sad day – I love it like a baby.” But he could not resist a plug for Good Night, and Good Luck, directed by and starring George Clooney. “Go see it, it’s superb.”

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Daily Telegraph

DealMaker : US Studio Lions Gate Entertainment has bought Britain’s Redbus Film Distribution for $42m

By Donovan Jones (seekingalpha)

US Studio Lions Gate Entertainment has bought Britain’s Redbus Film Distribution for $35m (£20m) in stock and cash

Dealmaker

US Studio Lions Gate Entertainment has bought Britain’s Redbus Film Distribution for $35m (£20m) in stock and cash. Lions Gate has also acquired Redbus’s library of distribution rights to more than 130 films including hits such as Bend it Like Beckham. Redbus chairman Simon Franks, a former JP Morgan Banker, founded the company in 1998. Redbus was advised on the deal by Allen & Co ‘s John Josephson and Omar Issani.

Original Article
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mad.co.uk

Video Island buys DVDs365

Jim Butcher

Online DVD rental service Video Island, which merged with ScreenSelect last year, has acquired rival DVDs365 as it looks to expand further into the burgeoning market.

The company, which recently unveiled plans to invest 6 million in marketing over the next 12 months, will also own DVDs363’s sister brands mailbox Movies, QFlicks and Movietrak as part of the deal. Video Island said the acquisition would allow it to expand the reach of the business, which already supports the rental operations by Tesco, ITV, easyGroup and MSN.

Bill Dobbie, founder and managing director of DVDs365, will join Video Island as an advisor to the board. The move comes as Video Island announced it is planning to expand the number of titles it offers users, after securing an extra 5 million in funding from the venture debt provider EVP, bringing its total to 15 million. The firm currently offers more than 33,000 titles, more than any other service in Europe, as well as Radio Times’ film reviews and integrated movie news feeds.

Saul Klein, chief executive of Video Island, said of this latest deal: “Combining DVDs365’s expertise with Video Island’s unrivalled financial backing, innovative partnership strategy and position in the market, creates a uniquely strong independent player.”

Regarding the upcoming marketing drive, Klein said that the majority of the majority of spend would be used in conjunction with its partnerships, which include companies such as Boots, Currys and Times Newspapers. Last week the company struck deals with Mobix Interactive and IFILM in a bid to its expand its business beyond the postal service it currently operates to allow UK movie fans access to digital content and services.

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Screendaily

Video Island raises extra £5m in backing

Author

Online DVD rental outfit Video Island has raised a further £5m in backing from EVP, Europe’s leading venture debt provider. The funding takes the total amount raised by Video Island to over £15m. EVP joins current equity investors Benchmark Capital, Cazenove Private Equity and Index Ventures.

The funding will be used to expand Video Island’s DVD library, to invest in current operations and will be earmarked for potential acquisition opportunities. Video Island CEO Saul Klein said: “Having already raised £10m, Video Island has always recognised that building a scaleable and substantial business in this sector is both extremely capital intensive and requires total operational focus combined with highly specialist expertise.”

Video Island, founded in September 2003, runs its own consumer brand ScreenSelect.co.uk as well as providing online DVD rental services for companies such as Tesco, MSN, ITV and easyGroup.

It claims a library of over 32,000 titles and makes nearly 1.5m shipments per month – the online equivalent of 150 high street stores. According to Screen Digest, the online video rental business has expanded dramatically in the last few months and is estimated to be on track to represent 15% of the total UK rental sector this year.

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Variety

Online DVDs Take Off In The UK

Adam Dawtrey

LONDON – Online rental is changing the face of the video business in the U.K. While rentals from standalone stores are cratering, the online subscription business is booming.

From a standing start in fall 2003, online DVD rentals (where customers pay a monthly fee, order via the Web and receive their titles by mail) are on course to total 13% of all video rentals in 2005, more than doubling the 2004 figure of 6%. Figures come from Screen Digest.

The British online market is growing faster even than the longer-established U.S. business, where subscription services (largely but not exclusively online) from Netflix (nasdaq: NFLXnewspeople ) and Blockbuster (nyse: BBInewspeople ) took 6.9% of the market last year and are predicted to reach 12% this year, according to Adams Media Research.

Video Island , which claims to be Britain’s market leader with a share of around 35%, has just logged its 6 millionth rental. It operates primarily under the ScreenSelect brand, but also runs services for other major consumer names, including ITV, Microsoft ‘s (nasdaq: MSFTnewspeople ) MSN, EasyGroup and Tesco (otc: TSCDYnewspeople ). Its main rival, LoveFilm , has a similar portfolio of different brands, each offering a slightly different deal to consumer. Blockbuster and Amazon.com (nasdaq: AMZNnewspeople ) also offer their own services.

That’s where the British market differs from the U.S., which has seen vicious price competition between the two main players, but little flexibility in the type of service on offer.

Video Island ships out 17,000 different titles every week from its catalog of 32,000. The biggest store, by comparison, stocks no more than 4,000 titles, and BSkyB delivers 450 movies a week to its pay TV subscribers.

Online rental opens up a whole new world of commercial possibility for the kind of niche product that never previously had a rental value.

Where the traditional retail rental business is all about the latest blockbusters, a remarkable 85% of all Video Island’s rentals are for titles more than 3 months old. Films more than 3 years old account for 17% of its transactions–and TV shows, a negligible category in video stores, also make up 17%.

Through its Web site, Video Island gleans detailed information about the tastes and wishes of its subscribers, and it’s eager to make those insights available to distributors and rights holders. Video Island Chief Executive Saul Klein would like Warren Beatty to know that one of the most requested titles still unavailable on DVD is Reds .

The success of online DVD rental offers a significant challenge not only to traditional high-street stores, but also to BSkyB’s film channels, and perhaps most of all to wannabe video-on-demand operators like telecommunications company BT Group (nyse: BTnewspeople ). The Royal Mail may be 300 years old, but at the moment it’s one of the most cost-effective and customer-friendly ways to deliver digital content to the home.

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Fast Track

Fast Track 100 entrepreneurs honoured

Fast Track

Entrepreneurs from Britain’s 100 fastest-growing companies were honoured at the seventh annual Sunday Times Virgin Atlantic Fast Track 100 awards dinner, held at Sir Richard Branson’s Oxfordshire home on 8 June.

Companies that have appeared on the latest Sunday Times Virgin Atlantic Fast Track 100 league table, which ranks the UK’s unquoted companies with the fastest sales growth, attended the afternoon conference, which concluded with an awards dinner for 240 entrepreneurs and guests.

The conference began with a scene-setting analysis of the current economy from Dennis Turner, chief economist of HSBC. A panel made up of the founders of companies which have appeared on the Fast Track 100 league tables – Roger Keenan of Eyretel, Karan Bilimoria of Cobra Beer and Ambition 24hours’ Penny Streeter – shared their experiences with a question and answer session with the audience. They were followed by a lively talk from easyGroup’s Stelios Haji-loannou and the afternoon concluded with a Q&A session by Richard Branson.

Five awards for management excellence were presented by sponsors during the evening, ranging from the award for customer service to the award for best management team.

Sir Richard Branson presented the award for the fastest-growing company , sponsored by Virgin Atlantic, to Simon Franks of Redbus Film Distribution . The company co-produced and holds distribution rights for box office hit ‘Bend It Like Beckham’, growing their sales by 286% a year to £15m in 2002.

The award for customer service , also sponsored by Virgin Atlantic, was presented by Paul Moore, the airline’s public relations director, to Richard Power of Rocco Forte Hotels . The London-based luxury hotel group uses independent assessors to check its 2,000 customer service criteria, and hotel managers need to score 97% or more to receive their bonuses.

The best use of technology award, sponsored by Microsoft, was presented by director of partnering Eric Gales to Simon Nixon of Moneysupermarket.com . This financial website developer, based in Chester, receives up to 10,000 applications a day for credit cards, mortgages and insurance.

The award for best management team , sponsored by Pricewaterhouse Coopers, was presented by partner Jonathon Hook to Angus Ball of BDML , based in Portsmouth. This insurance underwriter’s four founders have grown sales to £56m in just five years while increasing the company’s profits tenfold.

The award for best emerging brand , sponsored by The Sunday Times , was presented by the newspaper’s business editor William Lewis to Louise Agran and Rob Papps of Nando’s . This restaurant chain arrived in Britain 12 years ago from South Africa and now has more than 80 Portuguese-themes restaurants nationwide, specializing in grilled chicken with a spicy sauce.

Notes for editors:

The league table

Now in its seventh year, the Sunday Times Virgin Atlantic Fast Track 100 is compiled by Oxford-based research and events company Fast Track. It was published in The Sunday Times on 7 th December 2003, and is on www.fasttrack.co.uk .

Fast Track

Fast Track is an Oxford-based research, publishing and networking events company that tracks Britain’s most dynamic unquoted companies. It also produces three other annual league tables: Profit Track 100 based on the fastest-growing profits; the Tech Track 100 league table of young tech companies and the Top Track 100 of the largest unquoted companies.

Fast Track was founded and is run by Dr Hamish Stevenson, who is also an associate fellow of Templeton College, Oxford University.

www.fasttrack.co.uk

Virgin Atlantic

Virgin Atlantic has built its international reputation on the quality of its customer service, innovative product development and unrivalled value for money. Innovations such as complimentary limousines and in-flight beauty therapy have earned the airline numerous awards.

www.virgin.com/atlantic

Microsoft

Microsoft is the worldwide leader in software, services and Internet technologies for personal and business computing. The company leads the software industry in technology transformation offering a wide range of products and services designed to empower people any time, any place and on any device.

www.microsoft.com/uk

Pricewaterhouse Coopers LLP

Pricewaterhouse Coopers LLP is the world’s largest professional services organization. Drawing on the knowledge, skills and expertise of more than 125,000 people, we build relationships by providing services based on quality and integrity to companies of all sizes. www.pwc.com/uk

The Sunday Times

The Sunday Times is Britain’s leading broadsheet newspaper attracting over three million readers every week. It is the leading business newspaper, reaching 43.3% of all board directors, more than the combined top-level business readership of its three main Sunday broadsheet rivals.

www.timesonline.co.uk
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Financial Times

Hollywood moments for high street stores

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.

NO COMPANY IS AN ISLAND IN THE SEARCH FOR
NEW WAYS TO REACH CUSTOMERS

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.

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Press Release

Redbus goes outdoor

Redbus Outdoor Limited is pleased to announce its entry into the out of home advertising sector, via the formation of xsites , the 18-24 campus based, illuminated 6 sheet network.

xsites has exclusive, long term agreements with the majority of University Student Unions across the UK, including Bath University, Birmingham University, Bristol University, Durham University, Edinburgh University, Hull University, Leeds University, London School of Economics, Loughborough University, London University, Liverpool University, Southampton University and many more.

xsites’ first nationwide campaign will be for Sony Ericsson, arranged by Mediaedge:cia. xsites has also booked KPMG and UIP through Posterscope for 2004. With national coverage in all TV regions, xsites will be the most targeted, low wastage outdoor medium on campus. xsites panels have been located in high footfall areas to maximise impact. Redbus Outdoor also has exclusive arrangements with NUS Services Limited ( NUSSL ) in relation to outdoor advertising on NUSSL University Unions.

Redbus Outdoor is a subsidiary of Redbus plc. Director of Corporate at Redbus plc, Antony Ceravolo commented ” xsites provides clients with the most accountable and visible medium, reaching over 1 million students across the top Universities in the UK. We saw a gap in the 18-24 outdoor offering and see this network as providing a premium platform for advertisers looking to access the youth market in a low wastage and captive environment .”

For more information on xsites or Redbus please contact:
Antony Ceravolo
Redbus
74A Charlotte Street
London W1T 4QJ
+44 207 299 88 00

About Redbus

Redbus is a UK based media and entertainment company with operations in filmed entertainment, outdoor advertising, IP licensing and online based entertainment. Redbus was ranked the fastest growing company of 2003 in the Sunday Times Virgin Atlantic Fast Track 100 . www.redbus.com

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Evening Standard

Britains Booming Young Companies

Adam Leyland

Pension funds are in the mire. Stock markets stand 35% below their 2000 highs. The stink of sleaze pervades the City’s streets as eight-digit payoffs greet corporate failure. And if they can’t rip them off legally, corporate fat cats will steal it, as the Parmalat scandal proves.

But, amid the doom and gloom, there’s a new generation of businesses – young, privately owned, fast growing and profitable – which are challenging the old guard and proving once again that small companies are the powerhouse of the UK economy. These are the Hot 100, the blue-eyed boys and girls of Gordon Browns so-called enterprise economy, and they are growing at a remarkable rate. Over the past 4 years, they have doubled in size. Every single year. The fastest growing of all in the Hot 100, Redbus Film Distribution has almost quadrupled each year.

It could be argued the rise of Redbus is an early success story from the renaissance of British film, but in fact it is as a distributor that chief executive Simon Franks has built the business. Young, good-looking and super confident, Franks worked in the City, arbitraging in interest rates, in order to save money to start the business.

Since founding Redbus, he has picked out a number of smash hits, including The Gift, The Mothman Prophecies, Bend It Like Beckham and Jeepers Creepers. Franks was also executive producer on the last two but, as a serial entrepreneur in the making, he has branched out into other areas – a minicab firm, DVD/VHS rental, online movies, intellectual property licensing, broadcasting, advertising – and promises that these too will feature in the Hot 100 in future years.

What is the secret of success for the likes of Redbus? Surprisingly, Franks puts it down to caution. One sometimes gets the impression the most successful entrepreneurs are brave, almost reckless in their decisions. He believes his approach differs chiefly in his attitude to risk. “People are unrealistic about when the money is going to come in and how much money they are going to need in the short term.” He says.

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Independent Sunday

City Gears Up for Arrival of Runaway Redbus, the Company that Can’t Stop Growing

Tim Webb

Redbus will this week be named as the UK’s fastest growing privately owned company. Caspian Publishing, with the accountants Vantis, is publishing its annual Hot 100 list of private firms. The Company’s Chief Executive and founder, Simon Franks, describes the Redbus Entertainment and Media group as a “small-cap News Corp”. If he fulfils his ambitions, this would presumably make the 32-year-old former investment banker the next Rupert Murdoch.

Mr. Franks who quit the City to found the group in 1998 has diversified the business beyond film distribution, which was the first venture of the group. Mr. Franks’ business strategy is to “incubate” new ventures before they became self-sufficient. He has set up Video Island, the largest online DVD rental subscription service in the UK, and Blueback, a luxury private hire company.

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Real Business

Cover Story : Hot 100

By Staff

The No 1 company in the Hot 100 has quadrupled in size every year for the last four years. Even the average Hot 100 company has doubled. How did they do it? From cigarette rollies to high-tech flower distribution; from restaurants to UK call centres; from CCTV cameras to karaoke machines, the ventures are compelling, creative, and strangely cautious.

Hot 100 at a glance
From £227k four years ago, the average turnover at a Hot 100 company has risen to £20m today, a 99.7 per cent increase. In the last year alone, it rose by £7.5m (or 55.7 per cent).

This year’s fastest-growing company in the Hot 100, Redbus Film Distribution, has seen annual sales growth of 284.8 per cent. The biggest company in the Hot 100 (Taran Microsystems) had a turnover of £158.9m; and the smallest (Nimbus) £2.1m.

Entertainment, food, drink and ciggies were among the most lucrative products, as the nation drowned its sorrows against a backdrop of depression in most other business sectors.

Finance, healthcare, security, computer games and recruitment were also among the best-performing sectors.
Women entrepreneurs tend to be found in retail, travel, catering and recruitment, but in this year’s Hot 100, women are also running an international betting operation and a truck-driving business.

Media, Entertainment
Media and entertainment businesses abound in this year’s Hot 100. As well as the fastest-growing business in Redbus (1) there’s Top That Publishing (6) , the latest venture of Barrie Henderson. He sold his first business – best known for the Munch Bunch – to Ladybird Books in 1987, and Henderson Publishing was sold to Dorling Kindersley in 1990 after another smash hit with a range of books for kids called FunFax, which sold over 20m copies. At Top That, started in 1999, Henderson’s latest innovation is “Books Plus”, which combines books with games or model kits. The best selling of these, Mini Maestro , has sold close to 8m copies already and saw Top That topping £8m sales. The launch of an adult imprint called Kudos, launched last year, will add further turnover, as will recent expansion into the US.

#1 Redbus Film Distribution Simon Franks is on a mission. Still only 32, he is building a sizeable media empire with Redbus plc. The first venture was Redbus Film Distribution, which has had a string of hits including Bend It Like Beckham, Jeepers Creepers, The othman Prophecies, Welcome to Collinwood and The Gift .

Leaving the City, Franks started Redbus with business partner Zygi Kamasa and “a couple of hundred grand” of his own. Once the business showed promise he raised a further £1.5m from private investors. All, he says have been paid off at a profit. Redbus does have one significant shareholder in the bankrupt German media company Helkon Media, which bought a 51% stake in 2001. Franks is just waiting for ownership to be transferred back.His approach to building the business is cautious. A typical film project doesn’t go cash-positive until twelve months after the decision to go ahead with a script. It can be as long as 24 months before a real return is seen, even on a successful film. “People often get it wrong when they are starting a business,” he explains. “They are unrealistic about when the money is going to come in and how much money they are going to need in the short term.”
“I was very disciplined, very honest,” he says. Even so, what he thought were pessimistic assumptions all proved to be overly optimistic. “There were a number of times when we sat down as a board and discussed whether we should declare ourselves insolvent,” Franks admits. It’s clearly very risky. So how does Redbus seem to win each time? The attributes he gives are aggression, entrepreneurship, opportunism and discipline. “We’re one of the most disciplined media businesses,” he says. He eliberately employs business school types rather than film industry professionals to maintain that discipline.

If it sounds a bit like Franks casts himself as a venture capitalist, you’re right. Redbus also has a venture arm that as stakes in the DVD rental start-up Video Island and the new London minicab operation Blueback.

To what does Vantis attribute the success of Redbus? “A clear management structure, business objectives and good people are the building blocks,” says Andy Scott. “But in an inherently risky industry, such as film distribution and production, Simon Franks’ preference for people with business skills is undoubtedly a contributory factor.”

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Tornado Insider

Video Island on the Move

Tornado Insider

The UK-based online DVD rental service specialist Video Island announced this week partnerships with MSN and Comet . MSN.co.uk is forming a new partnership with Video Island – which sees the creation of “MSN DVD Rental” within the MSN Entertainment Channel. Under the terms of the agreement between MSN and Video Island, MSN’s 16.2 million users will now have access to Video Island’s 15,000 DVD titles.

“We are delighted to have partnered with Video Island to offer online DVD rental to a whole new audience. This is a brilliant service – users will find MSN DVD Rental quick, convenient and easy to use,” said Chris Ward, Commercial Director MSN UK.

Saul Klein, CEO Video Island, added, “Video Island has built a business designed to bring subscription DVD rentals to a mass-market with the largest national brands. Working with MSN will enable millions of people in the UK to experience the unrivalled selection, convenience and value of unlimited DVD rentals.”

Video Island also announced that it has joined forces with Comet, one of the UK’s largest out of town electrical retailers, to promote Video Island as a value add service to Comet customers. The partnership will give Video Island a presence across all of Comet’s 250 retail outlets and will also be promoted to its customer base via web and email channels.

To capitalize on the size of the market opportunity, Video Island secured financial backing in 2003 from global venture capital firms Benchmark and Index Ventures , who have been behind e-commerce powerhouses such as Ebay and Betfair, as well Redbus plc – recently named as the number one in the Sunday Times Fast Track 100 and Robin Klein, Chairman of Retail Variations

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Media Guardian

New online DVD rental services aim to transform the way we rent films

Hollywood or bust

Media Guardian

For a nation of disparate social, geographical and demographic groups Christmas seems to be a remarkably uniform experience – for those who celebrate it. Huge slap-up lunch, lashings of booze, the yearly row with your parents, cousins or siblings, then sit down in front of the telly to work it all off. For those too satiated on dried-out turkey and too much red wine to do much about it, endless repeats of Only Fools and Horses or the umpteenth showing of The Great Escape will be the order of the day. Those looking for something a little more contemporary – say Terminator III or Pirates Of The Caribbean – face a trek to the video shop, which will inevitably be closed. There is, however, an alternative. Get the video shop to come to you courtesy of a new subscription DVD service that is springing up across the UK.

Videoisland.com and Screen-select.co.uk, in operation for only a few months, are just two of the dozen or so DVD services to have launched this year. Using a combination of the internet, mail order and subscription, they aim to provide customers with a regular rotating supply of DVDs without having to leave their homes. From about £2.99 a week, subscribers can choose three DVDs from a list of about 14,000 titles, split between new releases such as Hulk and Terminator III and back classics.

Unlike a normal video shop, which penalises you for late return – what the trade euphemistically calls extended viewing fees – services such as Video Island, Screen Select and Movie Match let you keep the films as long as you keep paying your monthly subscription. DVDs are returned and replaced by pre-paid envelope. “If you are one of the 40%-50% of UK households with a DVD then this is by far the most effective way of enjoying it,” says William Reeve, managing director of Screen Select.

With two industries, the internet and movies, coming together then the word hype can’t be far around the corner. But with DVD subscription or “rentailing” as it’s know, there is at least a proven model. Both Video Island and Screen Select say their businesses are modelled on Netflix, the US DVD subscription retailer which now boasts about 1.4 million subscribers paying up to $39.95 (£23) a month for a rotating selection of eight DVDs. Launched in 1998, Netflix recently posted a third quarter profit of more than $6m on revenues of more than $72m. Saul Klein, chief executive of Video Island, says the success of the Netflix model lies in marrying an effective e-commerce model with collaborative filtering, the technology used by e-tailers such as Amazon to recommend alternative titles on a “people who liked/bought this also bought that” basis. That and the wider choice offered by online DVD operations. “One of the biggest bugbears with high street stores is their limited selection of DVD titles,” he says. “Because many multiples have a revenue share deal with the studios then they’re naturally focused on pushing new releases.” The revenue split, he argues, has skewed the rental market so that typically all that is available in high street stores are the top 20 titles that Hollywood is pushing. “What’s happening with the new model is that the renter who has been lacking choice and lacking selection now has the ability to choose from over 14,000 titles, in effect every title available to rent in the UK.”

Given this greater choice online, renters are turning the high street model on its head. Instead of an 80/20 split between new and back-catalogue films, the Netflix model shows that over two thirds of viewers using subscription services are watching older films, while just under a third want the latest releases. “What’s great about that is that everybody wins,” Klein argues. “The customers get what they want and the studios, which have enormous back catalogues that they find very hard to market and to rent because they don’t get shelf space can leverage these new releases to push relevant back-catalogue films. If you’re promoting Hulk you can also promote other Ang Lee movies that may be as diverse as Ice Storm and Sense and Sensibility.”

But as every unsuccessful e-tailer from Boo through to Webvan has proved, getting the proposition right is just the beginning. Though anyone can build a website and start offering DVDs overnight, creating a sustainable business is an expensive business. While high street DVD prices are falling, buying the special DVDs that studios stipulate for the rental market can still cost between £30-£40 a disk. Then there’s the free trial that nearly everyone has to offer to encourage customers to get used to the service.

“The biggest challenge is communication to consumers who aren’t particularly used to the idea that you can get something in the post quite conveniently. The problem is that to give people a feel for the service you have to offer a trial and let them experience the service first-hand. Putting three disks into somebody’s home without seeing any revenue back is expensive,” says Reeve.

Klein says access to capital is key. But even with Simon Franks, chief executive of media and entertainment group Redbus, and venture capital firms Benchmark Capital and Index Ventures among its backers, Video Island is still pursuing partnerships rather than going it alone. “If you look at the history of new brands, particularly new internet brands, the reality is they are very hard and very expensive and take a hell of a long time to build, especially if you are handling physical product. We believe the best way to bring a new brand to the market is in partnership with people who already respect consumer behaviour,” says Klein.

The first partnerships, he adds, should be announced early next year, and are likely to include existing retailers, broadband providers and even mobile phone operators. The increased awareness these alliances should bring could provide a strategic boost not just for Video Island but the whole DVD subscription sector.

The lack of readily available online alternatives should also help. Both Klein and Reeve say they would prefer to remove the huge costs associated with physical delivery and provide films digitally over broadband, but say it’s likely to be at least 10 years if not more before the technology makes it feasible for the average user. Though online movie services such as Movielink do exist, they are predominantly available only in the US, and are slow and restricted in the number of films they offer.

“The most cost-effective way of delivering high-quality films is by combining 50%-60% internet access – that allows people to browse a catalogue and manage their list – with a 100% postal delivery. Everybody has a letterbox and it’s a lot cheaper to deliver high-quality films via the mail with a 92% chance of next-day delivery than it is to deliver low quality movies to 10-15% of the country through broadband,” says Klein.

It’s this combination of digital access with physical delivery that will be crucial to the success of DVD subscription services in the UK. But with a proven model in Netflix, if companies like Video Island and Screen Select can get it right then persuading customers to switch from the high street to the home shouldn’t be a Herculean task. If you’re an occasional user, then shelling out up to £200 a year might seem expensive. If on the other hand you’re finding yourself getting in the car twice a week and spending around £3.50 per DVD at your local store, then online subscription looks better value. With time to sign up before the festive season you’ve no excuse for lolling in front of a schedule compiled by someone who’ll no doubt be on a beach in Tobago or Thailand and remember, a DVD is not just for Christmas.

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Sunday Times

Redbus Hits the Fast Track in Pole Position

Click Here to download: Research Report 2003

Redbus Film Distribution Ltd, the UK based film distribution company, was named the fastest growing company in the UK according to the Sunday Times 2003 Fast Track 100, sponsored by Microsoft, Price Waterhouse and Virgin Atlantic.

Redbus Film Distribution is a 100 per cent owned subsidiary of Redbus plc, the entertainment and media group based in London.

RFD has established itself as one of the leading independent film distributors in the UK. In the last two years alone it has had box office hits with Bend it like Beckham, Jeepers Creepers, The Mothman Prophecies, The Gift, Cabin Fever and Welcome To Collinwood.

“We are delighted by this recognition and proud that we are one of the very few British film companies that are not only profitable but making a mark on the UK business landscape as a whole”, commented Redbus plc Chief Executive Simon Franks.

“We are determined to grow Redbus plc into one of the UK’s largest entertainment and media groups and remain convinced that Redbus Film Distribution will not be the only one of our companies to appear on future Fast Track 100 lists” continued Mr Franks.

For the 2003 Fast Track 100 results please visit:
http://www.fasttrack.co.uk/press/release.htm

Notes to editor

About Redbus plc
www.redbus.com

Redbus is an entertainment and media group based in the UK, with operations in:

  • Filmed Entertainment
  • Outdoor Advertising & Broadcast
  • Online based entertainment
  • Intellectual Property Licensing

The Company’s foundations are in filmed entertainment via the 100 per cent owned Redbus Film Distribution, Redbus Pictures and Redbus Home Entertainment. Building on its success in Filmed Entertainment, the Company established operations outside of film with a media focus that leverage Redbus’ entrepreneurial approach and the resources it has available.

About Redbus Film Distribution Ltd

Redbus Filmed Entertainment is one of the largest integrated independent film groups in Europe. The Filmed Entertainment division is 100 per cent owned by Redbus and comprises:

  • Redbus Distribution Limited (RFD), one of the most successful independent film distribution companies in the UK which has a library of over 75 titles
  • Redbus Pictures, the production entity of the Filmed Entertainment Group, responsible for such hits as Bend it Like Beckham
  • Redbus Home Entertainment, the DVD and VHS unit

Redbus takes a disciplined and integrated approach to feature film production and distribution via a combination of astute acquisitions, bold and innovative marketing and creative tax-shelter arrangements, which has yielded a strong track record in acquiring, producing and distributing profitable films.

For more information
Ali King – Redbus
0207 299 8834

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Tornado Insider

C3 million first round for Video Island

By Staff

UK-based home entertainment company, Video Island , has closed a €3 million Series A financing round co-led by Benchmark Capital and Index Ventures . Founding investors and strategic partners include Simon Franks of Redbus , and Robin Klein , founder and Chairman of Retail Variations . The funding will be used for sales and marketing, business development and further investment in logistics and the DVD library.

Founded in 2002, Video Island is a highly personalized home entertainment subscription service, launching its full online DVD rental business in the next month. The company offers membership to the UK’s “ultimate DVD library”, with over 12,000 DVDs delivered directly to people’s doors.

Saul Klein , Co-founder and CEO, commented, “We established the Video Island proposition around the firm foundations of some of the UK’s most successful entertainment distribution and multi-channel retail entrepreneurs, as well as the most sophisticated technology platform in the marketplace. By now working with Index and Benchmark, we are delighted to have found two VCs who have pan European expertise, global reach and the experience of building some of the world’s most successful e-commerce businesses such as eBay and Betfair.”

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Pressl

Video Island prepares for launch with initial 3 Million (euros) series A Financing News release

Round led by international venture capitalists Benchmark Capital and Index Ventures Home entertainment company, Video Island, announces the closing of a €3 million (£2.1 million) Series A financing round co-led by Benchmark Capital and Index Ventures. Founding investors and strategic partners include Simon Franks of Redbus plc, the UK based media and entertainment group which owns one of the most successful independent film distributors in the UK and Robin Klein, Founder and Chairman of Retail Variations plc, one of the UK’s largest independent multi-channel retailers. George Coelho, Partner at Benchmark and Danny Rimer, Partner at Index Ventures, will join the Video Island board.

Founded in 2002, Video Island is a highly personalised home entertainment subscription service, offering membership to the UK’s ultimate DVD library – with over 12,000 titles and growing, delivered directly to people’s doors, with no due dates and no late fees or hidden costs. Following a free 14-day trial, subscribers to the Video Island service pay a flat monthly membership fee, starting from as little as £12.99 per month (the equivalent of £2.99 a week). This enables them to rent an unlimited number of titles from a library, which includes every DVD available for rental in the UK – from mainstream Hollywood to Art House, music and documentaries. DVDs are dispatched and returned by 1st class post (pre paid) and subscribers manage a list of films they wish to rent on the Video Island website.

Video Island has a uniquely sophisticated technology and operations platform. In addition to having the most advanced multi-channel personalisation capabilities in the marketplace, Video Island’s patent-pending automated pick-pack logistics infrastructure enables subscribers to receive with unparalleled efficiency and accuracy the titles they want in a scaleable and cost-effective manner. Given the spectacular growth of the DVD marketplace, automation in operations will become a key factor in offering a reliable service to an ever-increasing
customer base.

Video Island is capitalising on the explosive growth of the DVD market in Europe. DVD players are the fastest selling consumer electronics product in history, outstripping mobile phones and PCs. This Christmas alone, almost 2 million players are expected to be sold. The UK market currently accounts for 35% of the total European video market [1]and U.K. DVD rental market alone is expected to grow from £65 million in 2001 to £400m in 2005[2]. While subscription-based DVD rental has been highly successful in the US, the European market remains largely untapped, despite the increasing level of DVD player penetration. Europe also has highly efficient and cost-effective postal services, which provides a key-enabling factor.

“Given the growth in the DVD market, where DVD players can now be purchased for less than £40 on the high street, we are extremely excited about Video Island’s prospects. We believe Video Island’s offering will change the dynamics of home entertainment and we look forward to helping the team build the business,” George Coelho, Partner at Benchmark Capital commented.

Danny Rimer, Partner at Index Ventures, added, “The real challenge of offering a service like Video Island is everything that happens behind the scenes. Having looked at and reviewed a number of services the combination of the Video Island team, technology and know-how made it the right choice. We look forward to helping them build a world-class service.”

Saul Klein, Co-founder and CEO, was previously co-founder of multi-channel advisory and investment business The Accelerator Group and prior to that Group Program Manager for Web Platform Services at Microsoft, where he managed the roll-out of Passport Services. He was also the co-founder of The Electronic Telegraph, the world’s first daily newspaper on the Internet and Fantasy Football. He commented, “We established the Video Island proposition around the firm foundations of some of the UK’s most successful entertainment distribution and multi-channel retail entrepreneurs, as well as the most sophisticated technology platform in the marketplace. By now working with Index and Benchmark, we are delighted to have found two VCs who have pan European expertise, global reach and the experience of building some of the world’s most successful e-commerce businesses such as eBay and Betfair.”

The proceeds of fundraising will be used for sales and marketing, business development and further investment in logistics and the DVD library.

About Video Island

Video Island is a company set to revolutionise the DVD rental market. Founded in 2002, it is a highly personalised home entertainment subscription service, launching its full online DVD rental business in the next month. Subscribers to the Video Island service pay a monthly membership fee, which enables them to rent as many DVDs as they like, subject to a maximum of three simultaneous DVD rentals. Video Island offers the “ultimate DVD library” – 12,000 DVDs, directly to your door. Unlike traditional home entertainment services, Video Island offers no late fees has no hidden costs and offers great value for money. Video Island has secured investment both from leading international venture capital firms as well as from strategic partners such as Redbus plc and Robin Klein, Retail Variations. For further information about Video Island and a chance to sample an entertainment paradise, see www.videoisland.com.

About Benchmark Capital

Benchmark Capital was founded in 1995 with the mission of helping talented entrepreneurs build major technology enterprises focused on long-term growth. Benchmark takes a hands-on, team-oriented approach to venture investing in order to deliver a superior level of service to its portfolio companies, such as eBay (Nasdaq: EBAY), Juniper Networks (Nasdaq: JNPR) and Red Hat (Nasdaq: RHAT) and Betfair. Managing more than $2 billion in committed venture capital, Benchmark focuses on early-stage investment in markets where the partners have direct, relevant experience. For more information on Benchmark, visit its web site at www.benchmark.com

About Index Ventures

Index Ventures is a leading pan-European venture capital fund dedicated to investments in information technology and life sciences. Index proactively seeks out the top entrepreneurial teams in each investment area and leverages its core assets in helping the entrepreneurs build their company into a global leader. Index Ventures investors include leading technology companies and institutional investors. Index investments in the online services arena include European companies such as Betfair, Ciao, and Stepstone (Oslo: STP.OL); and U.S. companies such as Listen (acquired by Nasdaq: REAL) and Ofoto (acquired by Nasdaq: EK).

To learn more about Index Ventures visit: www.indexventures.com

About Redbus plc

Redbus is a UK based group of media and entertainment related companies and assets. Redbus assets include the highly successful Redbus Film Distribution and Redbus Pictures and has distributed such hits as Maybe Baby, The Gift, Mothman Prophecies, Jeepers Creepers, Welcome to Collingwood and The Hunted. Redbus Pictures has also recently co-produced the international hit Bend it Like Beckham and has a motion picture library of over 75 titles. The Video Island investment was led by Antony Ceravolo, Redbus Corporate Finance Director.

About Robin Klein

Robin is a serial multi-channel retail entrepreneur. He is currently Chairman of The Accelerator Group (TAG), an investment and advisory company for multi-channel retailers including Lastminute.com, Cotswolds Company, Agent Provocateur, Digivate as well as the founder of Retail Variations plc multi-channel retail group, which comprises over £120m in retail sales from over 130 stores, catalogues and websites including Past Times, Ocean, Hawkshead and SF Cody. Robin was previously Chairman and CEO of Innovations Group PLC, the catalogue retailer of innovative products. He co-founded (as investor and non-exec director) Aroma Coffee bars in 1993, which was sold to McDonalds for £10m in 1997. He sold Innovations for £45m in 1997 to Arcadia, where from 1996 to 1998 he was the Managing Director, Marketing and Home Shopping. He also created Dial, the home shopping joint venture between Arcadia and Littlewoods and remained as part time Chairman of Dial until June 2001.

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Variety

Redbus Drives Profit: Company unloads Winchester share

Adam Dawtrey

LONDON — British film distrib Redbus has sold its 4% stake in the publicly listed sales company Winchester Entertainment.

Redbus made a small profit on the deal — it acquired its shares last year at 12 pence (20¢) and offloaded them at around 24¢.

The company took advantage of an uptick in Winchester’s stock price after it agreed to acquire Cobalt Pictures. But the sale indicates that Redbus does not share Winchester’s view about the upside potential of that deal.

Redbus bought a stake in Winchester as a possible prelude to a reverse takeover, which would have given the distrib access to a public listing. But Redbus has since cooled on the prospects for the indie sales business and is focusing on production.

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Home Entertainment

Redbus Chief calls for rental re-think: Home entertainment weekly

THE HEAD of a leading UK independent calls this week for a radical re-think of the two-tier ‘new rules’ pricing policies adopted by the majors in the past year.

Simon Franks of Redbus Home Entertainment states in an exclusive feature in this week’s HEW that the label is switching to two-tier with the release of The Hunted and Welcome To Collinwood – but with reluctance.

“ Our product is now two-tier priced, much to our chagrin,” he says. “We are being forced into two-tier by the way the market has changed.”

However, he believes the British video and DVD market is still in a state of flux and proposes a new kind of all-industry body to come up with the best business model for the industry.

Elsewhere Franks slams revenue share deals, criticises the treatment of independent rental dealers and sounds a warning against the current fashion for indentikit Summer blockbusters.

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Screen International

Winchester Mulls sale Option As Shares slump

Adam Minns

UK-based Winchester Entertainment has effectively put itself up for sale, saying it is considering “strategic options”.

UK distributor Helkon SK is seen as a possible buyer after earlier this year buying a 3.67% stake in the AIM-listed company, which this week declared half-way losses on continuing operations of $10m (£6.3m).

Winchester shares fell 43% to 12.4cents (7 3/4p) following the announcement. Leslie Hill, Winchester’s non-executive chairman, said he was steeping down.

” Losses reported cannot continue and actions have and are being taken to address this,” said Hill. “We have sold loss making Optical Image, curtailed development expenditure and cut overheads. Conditions in our markets remain difficult requiring substantial write downs of film and television programme stocks. We continue to focus on our film businesses. The board is again considering strategic options.”

Along with cuts in Los Angeles, Winchester is reducing operating expenses through staff reductions and lower legal expenses in the London office. Hill said that Winchester has stopped expenditure on new development projects during the summer and is focusing on moving film rights already owned into production. Winchester also aims to board film projects outside of its own development slate.

This company said it was still owed $3.5m (£2.2m) from its German tax financing partner on Last Orders and cited costs of $640,000 (£400,000) due to delays Harv The Barbarian

” The lead actor requested guarantees which we were not willing to provide until all contracts were signed,” Hill said. “As a result the actor has moved on to pursue other projects.”

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