Vertex Ventures hits $230M first close on new fund for Southeast Asia and India

Tis the season to be raising in India and Southeast Asia. Hot on the heels of new funds from Strive and Jungle Ventures, so Singapore’s Vertex Ventures, a VC backed by sovereign wealth fund Temasek, today announced a first close of $230 million for its newest fund, the firm’s fourth to date.

Vertex raised $210 million for its previous fund two years ago, and this new vehicle is expected to make a final close over the coming few months with more capital expected to roll in. If you care about numbers, this fund may be the largest dedicated to Southeast Asia although pedants would point out that the Vertex allocation also includes a focus on India, echoing the trend of funds bridging the two regions. There are also Singapore-based global funds that have raised more, for example, B Capital from Facebook co-founder Eduardo Saverin.

Back to Vertex, it’s worth recalling that the firm’s third fund was its first to raise from outside investors — having previously taken capital from parent Temasek. Managing partner Chua Kee Lock told Bloomberg that most of those LPs signed on for fund four including Taiwan-based Cathay Life Insurance. Vertex said in a press release that it welcomed some new backers, but it did not provide names.

The firm has offices in Singapore, Jakarta and Bangalore and its most prominent investments include ride-hailing giant Grab, fintech startup InstaRem, IP platform PatSnap and Vision Fund-backed kids e-commerce firm FirstCry. Some of its more recent portfolio additions are Warung Pintar — which is digitizing Indonesia’s street kiosk vendors — Binance — which Vertex backed for its Singapore entity — and Thailand-based digital insurance play Sunday.

One differentiator that Vertex offers in Southeast Asia and India, beyond its ties to Temasek, is that there are connections with five other Vertex funds worldwide. Those include a new global growth fund, and others dedicated to global healthcare as well as startups in Israel and the U.S.

Others VCs operating in Southeast Asia’s Series A/B+ bracket include Jungle Ventures, which just hit first close on a new fund aimed at $220 million, Openspace Ventures, which closed a $135 million fund earlier this year, Sequoia India and Southeast Asia, which raised $695 million last year, Golden Gate Ventures, which has a third fund of $100 million, and Insignia Ventures, which raised $120 million for its maiden fund.

Growth funds are also increasingly sprouting up. Early stage investor East Ventures teamed up with Yahoo Japan and SMDV to launch a $150 million vehicle, while Golden Gate Ventures partnered with anchor LP Hanwha to raise a $200 million growth fund.

XPRIZE names two grand prize winners in $15 million Global Learning Challenge

XPRIZE, the non-profit organization developing and managing competitions to find solutions to social challenges, has named two grand prize winners in the Elon Musk-backed Global Learning XPRIZE .

The companies, KitKit School out of South Korea and the U.S., and onebillion, operating in Kenya and the U.K., were announced at an awards ceremony hosted at the Google Spruce Goose Hangar in Playa Vista, Calif.

XPRIZE set each of the competing teams the task of developing scalable services that could enable children to teach themselves basic reading, writing, and arithmetic skills within 15 months.

Musk himself was on hand to award $5 million checks to each of the winning teams.

Five finalists including: New York-based CCI, which developed lesson plans and a development language so non-coders could create lessons; Chimple, a Bangalore-based, learning platform enabling children to learn reading, writing and math on a tablet; RobotTutor, a Pittsburgh-based company which used Carnegie Mellon research to develop an app for Android tablets that would teach lessons in reading and writing with speech recognition, machine learning, and human computer interactions, and the two grand prize winners all received $1 million to continue developing their projects.

The tests required each product to be field tested in Swahili, reaching nearly 3,000 children in 170 villages across Tanzania.

All of the final solutions from each of the five teams that made it to the final round of competition have been open-sourced so anyone can improve on and develop local solutions using the toolkits developed by each team in competition.

Kitkit School, with a team from Berkeley, Calif. and Seoul, developed a program with a game-based core and flexible learning architecture to help kids learn independently, while onebillion, merged numeracy content with literacy material to provide directed learning and activities alongside monitoring to personalize responses to children’s needs.

Both teams are going home with $5 million to continue their work.

The problem of access to basic education affects more than 250 million children around the world, who can’t read or write and one-in-five children around the world aren’t in school, according to data from UNESCO.

The problem of access is compounded by a shortage of teachers at the primary ad secondary school level. Some research, cited by XPRIZE, indicates that the world needs to recruit another 68.8 million teachers to provide every child with a primary and secondary education by 2040.

Before the Global Learning XPRIZE field test, 74% of the children who participated were reported as never having attended school; 80% were never read to at home; and 90% couldn’t read a single word of Swahili.

After the 15 month program working on donated Google Pixel C tablets and pre-loaded with software, the number was cut in half.

“Education is a fundamental human right, and we are so proud of all the teams and their dedication and hard work to ensure every single child has the opportunity to take learning into their own hands,” said Anousheh Ansari, CEO of XPRIZE, in a statement. “Learning how to read, write and demonstrate basic math are essential building blocks for those who want to live free from poverty and its limitations, and we believe that this competition clearly demonstrated the accelerated learning made possible through the educational applications developed by our teams, and ultimately hope that this movement spurs a revolution in education, worldwide.”

After the grand prize announcement, XPRIZE said it will work to secure and load the software onto tablets; localize the software; and deliver preloaded hardware and charging stations to remote locations so all finalist teams can scale their learning software across the world.

Ride-hailing firm Grab is losing its CTO

Grab is once again on the hunt for a CTO after Theo Vassilakis, the former Microsoft and Google executive who currently occupies the role, announced that he will leave the ride-hailing company this summer.

Vassilakis became Grab CTO in October 2017, ending a very long search to fill the job, but he explained in a LinkedIn post that he is leaving the Singapore-based firm, and Southeast Asia, for family reasons.

My family and I moved to Singapore in late 2017 when I joined Grab. Living and working in Southeast Asia has been an adventure that broadened our horizons and will always be in our hearts. Unfortunately, our personal circumstances have changed unexpectedly and we’ll need to spend most of our time outside the region — mostly in the south of China for the foreseeable future.

Following his exit on June 30, Vassilakis will remain an advisor to Grab, with a specific focus on “coaching our senior tech leaders and shepherding our ongoing AI and marketplace optimization efforts.” He said that he will be involved in finding and hiring his replacement.

While it will lack a ‘group CTO,’ Grab does have CTOs for its transport and financial business units — Mark Porter and Vikas Agrawal, respectively — while head of product and design Jerald Singh will be involved in filling the void. Grab’s first CTO was Wei Zhu, who is credited with creating Connect with Facebook, but he left in 2015 after just a year and later sued over alleged unpaid earnings.

Under Vassilakis’ leadership, Grab massively increased its tech presence. The company now has seven R&D offices — Bangalore, Beijing, Ho Chi Minh City, Jakarta, Kuala Lumpur, Seattle and Singapore — and it claims to have doubled its headcount in 2018. Grab said in December that it is projected to add a further 1,000 “tech roles” this year.

The company has also expanded from merely transportation services to on-demand services, apps from third-parties via its ‘platform’ strategy, and payments and financial services.

Grab has also become the largest tech company in Southeast Asia by some margin in the eyes of investors. The company was most recently valued at $14 billion when it raised nearly $1.5 billion from SoftBank’s Vision Fund in March. To date, Grab has raised in excess of $7.5 billion from investors, and there’s more to come. The company said earlier this month that it plans to pull in $2 billion more from investors this year to battle rival Go-Jek, make acquisitions and develop its ‘super app’ strategy.

India’s Mfine raises $17.2M for its digital healthcare service

Mfine, an India-based startup aiming to broaden access to doctors and healthcare using the internet, has pulled in a $17.2 million Series B funding round for growth.

The company is led by four co-founders from Myntra, the fashion commerce startup acquired by Flipkart in 2014. They include CEO Prasad Kompalli and Ashutosh Lawania who started the business in 2017 and were later joined by Ajit Narayanan and Arjun Choudhary, Myntra’s former CTO and head of growth, respectively.

The round is led by Japan’s SBI Investment with participation from sibling fund SBI Ven Capital and another Japanese investor Beenext. Existing Mfine backers Stellaris Venture Partners and Prime Venture Partners also returned to follow on. Mfine has now raised nearly $23 million to date.

“In India, at a macro-level, good doctors are far and few and distributed very unevenly,” Kompalli said in an interview with TechCrunch. “We asked ‘Can we build a platform that is a very large hospital on the cloud?’, that’s the fundamental premise.”

There’s already plenty of money in Indian health tech platforms — Practo, for one, has raised over $180 million from investors like Tencent — but Mfine differentiates itself with a focus on partnerships with hospitals and clinics, while others have offered more daily health communities that include remote sessions with doctors and healthcare professionals who are recruited independently of their day job.

“We are entering a different phase of what is called health tech… the problems that are going to be solved will be much deeper in nature,” Kompalli said in an interview with TechCrunch.

Mfine makes its money as a digital extension of its healthcare partners, essentially. That means it takes a cut of spending from consumers. The company claims to work with over 500 doctors from 100 ‘top’ hospitals, while there’s a big focus on tech. In particular, it says that an AI-powered ‘virtual doctor’ can help in areas that include summarising diagnostic reports, narrowing down symptoms, providing care advice and helping with preventative care. There are also other services, including medicine delivery from partner pharmacies.

To date, Mfine said that its platform has helped with over 100,000 consultations across 800 towns in India during the last 15 months. It claims it is seeing around 20,000 consultations per month. Beyond helping increase the utilization of GPs — Mfine claims it can boost their productivity 3/4X — the service can also help hospitals and centers increase their revenue, a precious commodity for many.

Going forward, Kompalli said that the company is increasing its efforts with corporate companies, where it can help cover employee healthcare needs, and developing its insurance-style subscription service. Over the coming few years, that channel should account for around half of all revenue, he added.

A more immediate goal is to expand its offline work beyond Hyderabad and Bangalore, the two cities where it currently is.

“This round is a real endorsement from global investors that the model is working,” he added.

Indian government district leaks thousands of Aadhaar numbers

A lapse in security has led to the leaking of over a hundred thousand Aadhaar numbers, TechCrunch can reveal.

One of the web systems used to record attendance of government workers for the Indian district of Jharkhand was left exposed and without a password as far back as 2014, allowing anyone access to names, job titles, and partial phone numbers on 166,000 workers as of the time of writing.

But the photo on each record page used the file name as that worker’s Aadhaar number, a confidential 12-digit number assigned to each Indian citizen as part of the country’s national identity and biometric database.

The data leak isn’t a direct breach of the central database run by Aadhaar’s regulator, the Unique Identification Authority of India (UIDAI), but represents another lapse in responsibility from the authority charged with protecting its data.

Aadhaar numbers aren’t strictly secret but are treated similarly to Social Security numbers. Anyone of the 1.23 billion Indian citizens enrolled in Aadhaar — more than 90 percent of the population — can use their unique number or their thumbprint to verify their identity in order to enroll in state services, like voting, welfare or financial assistance. Aadhaar users can even use their Aadhaar identity to open a bank account, get a SIM card, call an Uber, buy something on Amazon, or rent an Airbnb.

But the system has been plagued with problems that have led to starvation in cases, and the illicit trade of citizen data on the underground market.

It’s unclear why the Jharkhand government site was accessible to anyone who knew where to look, but little effort had been put in to ensure the security of the system — or even hide it from the outside world. The site was easily found on a subdomain of the district government’s website, but for long enough that it was indexed by Google, which cached copies of not only the site itself, but also its attendance record pages that still contain Aadhaar numbers in each worker’s photo.

TechCrunch asked Baptiste Robert, a French security researcher who goes by the online handle Elliot Alderson, to take a look at the site. Robert has prior experience in revealing Aadhaar-related data leaks. Using less than a hundred lines of Python code, Robert demonstrated that it was easy for anyone to scrape the entire site in batches to download their photos and corresponding Aadhaar numbers.

TechCrunch verified a small selection of Aadhaar numbers from the site using UIDAI’s own verification tool on its website. (We used a VPN in Bangalore as the page was unavailable in the U.S.). Each record came back as a positive match.

After confirming our findings, we reached out to both the Jharkhand government and UIDAI.

Jharkhand’s attendance site leaking worker data. (Image: TechCrunch)

At the time of publication, neither had responded, but the website had been pulled offline.

The exposure may represent a fraction of the billion-plus users registered with Aadhaar, but uncovers yet another inadvertent disclosure of citizen data from a system that UIDAI claims is impenetrable. Instead of learning from mistakes and mishaps, UIDAI instead has shown a long history of rebuffing evidence of security incidents or breaches with mockery and declaring findings as “fake news,” by claiming to refute evidence without presenting any of its own.

The leak of Aadhaar numbers may not be seen as sensitive compared to leaked biometric data. Former attorney general Mukul Rohtagi once called a separate leak of Aadhaar numbers “much ado about nothing.” But it’s raises fears that obtaining and misusing someone’s number could lead to identity theft and fraud — which reportedly peaked last year.

Others have expressed concern that the system puts privacy at risk by recording information on a person’s life, which authorities can use to conduct surveillance on ordinary citizens.

But the exposure alone contradicts the Indian government’s claims that the Aadhaar system as a whole is secure.

In recent years, several security lapses involving data relating to Aadhaar have reignited fresh concerns about the centralized database — including several issues found by Robert. Last year, security researcher Karan Saini, a New Delhi-based security researcher, found a poorly-secured web address used by state-owned utility company Indane that had direct access to the Aadhaar database, allowing him to query results from the system. UIDAI rubbished the reports, baselessly claiming that there was “no truth to this story” in a series of tweets from its official Twitter account, despite evidence to the contrary. In the same year, India’s Tribune newspaper reported that some were selling direct access to the Aadhaar database. UIDAI responded by filing a complaint against the reporter with police.

Despite the security concerns, India’s Supreme Court ruled the database constitutional in September after a long-running court battle.

Entrepreneur First eyes further Asia growth to build its global network of founders

British startup venture builder Entrepreneur First is eying additional expansion in Asia, where its operation is now as large as it is in Europe, as it expands its reach in 2019. But, despite serving a varied mixture of markets, the company said its founders are a fairly unified breed.

The Entrepreneur First program is billed as a “talent investor.” It matches prospective founders and, through an accelerator program, it encourages them to start and build companies which it backs with financing. The organization started out in London in 2011, and today it is also present in Paris and Berlin in Europe and, in Asia, Singapore, Hong Kong and (soon) Bangalore. To date, it says it has graduated over 1,200 founders who have created more than 200 companies, estimated at a cumulative $1.5 billion on paper.

Those six cities cover a spread of unique cultures — both in general life and startup ecosystems — but, despite that, co-founder Matthew Clifford believes there’s actually many commonalities between among its global founder base.

“It’s really striking to me how little adjustment of the model has been necessary to make it work in each location,” Clifford — who started EF with Alice Bentinck — told TechCrunch in an interview. “The outliers in each country have more in common with each other and their fellow compatriots… we’re uncovering this global community of outliers.”

Despite the common traits, EF’s Asia expansion has added a new dimension to the program after it announced a tie-in with HAX, one of the world’s best-known hardware-focused accelerator programs, that will see the duo co-invest in hardware startups via a new joint program.

“We saw early that hardware was a much more viable part of the market in Asia than it is traditionally seen in Europe [and] needed a partner to accelerate the talent,” Clifford said.

Already, the first four beneficiaries of that partnership have been announced — AIMS, BOPSIN, Neptune Robotics and SEPPURE — each of which graduated the first EF cohort in Hong Kong, its fourth in Asia so far. Going forward, Clifford expects that around three to five startups from each batch will move from EF into the joint initiative with HAX. The program covers Asia first but it is slated to expand to EF’s European sites “soon.”

Entrepreneur First held its first investor day in Hong Kong this month

Another impending expansion is EF’s first foray into India via Bangalore which starts this month, and there could be other new launches in 2019.

“We’ll continue to grow by adding sites but we are not in a rush,” Clifford said. “The most important thing is retraining quality of talent. It may be six months until we add another site in Asia but there’s no shortage of places we think it will work.

“We operate a single global fund,” he added. “We’re a talent investor and we believe there are strong network effects in that. The people who back us are really betting on the model… [that it’s] an asset class with great returns.

While it appears that its global expansion drive is a little more gradual than what was previously envisaged — backer and board member Reid Hoffman told TechCrunch in 2016 that he could imagine it in 50 cities — Clifford said EF isn’t raising more capital presently. That previous investment coupled with management fees is enough fuel in the tank, he said. The organization also operates a follow-on fund but it has one major exit to date, Pony Technology, the AI startup bought by Twitter for a reported $150 million.

Still, with hundreds of companies in the world with EF on the cap table, Clifford said he is bullish that his organization can target an international-minded breed of entrepreneur worldwide. The impact he sees is one that will work regardless of any local constraints placed on them.

“With our global network of capital, we always want capital, not talent, to be the limiting factor. Our goal is to make being ‘an EF company’ more relevant to your identity as a startup regardless of your location,” he told TechCrunch

LetsTransport raises $13.5M to digitize and improve last mile logistics in India

India’s B2B supply chain is slowly shifting into the digital era. Following a $23 million investment for Moglix, which helps bring business and manufacturing procurement online, LetsTransport, a startup that brings increased efficiency to logistics and business transportation, has raised $13.5 million for growth.

Founded in 2015 by IIT Kharagpur graduates Pushkar Singh, Sudarshan Ravi and Ankit Parasher, Bangalore-based LetsTransport has surface level comparisons with Uber and other on-demand services since it pairs companies with trucks to carry out their last mile distribution.

But that is really a cosmetic comparison. LetsTransport offers a range of product modules to manage fleets, including intelligent routing. Then, on the business side, its unit economic are far superior to Uber and co since the business customers it caters are not cost-motivated and will happily pay for a consistent service with guarantees.

For the truck operations, the service is designed to increase their average utility and get more jobs completed in quicker times. Singh, the company’s CEO, told TechCrunch in an interview that operating partners are typically seeing 40 percent efficiency improvements with a 30 percent reduction in distribution cost for the brands and retailers on the other side. Routing, he explained, is currently “done primitively by the driver” which is where LetsTransport tries to add value.

The service currently operates in seven cities in India and it has been used by big name customers like Coca-Cola, Amazon, Metro Cash & Carry and Big Bazaar, while some 20,000 truckers have carried out jobs on its platform to date. To help sweeten its appeal, the company goes beyond providing work to help trucking operating with insurance, after sale care and other maintenance services.

This Series B funding round was led by Bertelsmann India Investments with participation from China’s Fosun International and others. The company’s other investors including Japan duo GMO Venture Partners and Mitsui Sumitomo Insurance Venture Capital, as well as Rebright Partners and NB Ventures.

Singh told TechCrunch that the capital will go towards expanding to twenty new cities in tier-two India as well as looking into global opportunities.

“We’re trying to consolidate our position in India and [are] looking at products that can be offered internationally,” he said, explaining that markets in Southeast Asia and Africa could be in the pipeline. “The needs of an emerging market are quite similar… it needs a little localization but we have a great product.”

In particular, he added, LetsTransport has received expansion requests from its existing client base which would help when it comes to new launches. For now, though, the plan is to test specific modules in new markets before bringing other, more significant operational aspects of the business overseas.

Those modules could include the company’s smart routing system, which companies can deploy for their own transportation solutions. That’s a good way to reach new customers and develop a moat around those who use its marketplace business, too.

Pointing out that 14 percent of India’s GDP is spent on logistics versus 7.5 percent in the U.S. — Singh is bullish that there is plenty of scope to digitize the system and make significant improvements to efficiencies.

“It’s a very large industry that’s ripe for disruption,” he said. “There are inefficiencies that should dead by now.”

Ola, Uber’s India rival, invests $100M in scooter rental startup Vogo

We’re familiar with Uber cozying up to scooter startups — it has bought one and invested in another — but over in India, the U.S. firm’s key rival is hatching a major alliance of its own it invested $100 million in scooter rental startup Vogo.

Ola first invested back in August when Vogo raised an undisclosed Series A round from Ola, Matrix Partners and other investors, but now Ola is doubling down with this follow-on deal. It isn’t saying how much equity it has captured with this investment, nor the valuation that it gives Vogo but you can well imagine it is high for a company that has only just done its Series A.

As you’d expect, this is a strategic investment and it’ll mean that Vogo scooters will appear within the Ola app, from where they can be booked by the company’s 150 million registered users, “soon.” Bangalore and Hyderabad are the two cities where Vogo operates, but you’d imagine that it will lean on Ola to expand into other parts of tier-one India where Ola already has a strong presence.

Ola’s money is going directly into supply, with Vogo planning to buy 100,000 more scooters for its platform. The company’s scooters, for those who don’t know them, are unlocked using a one-time password generated from the company’s Android app. Scooters are either dropped off at a designated station, or the rider specifies that they are taking a round trip and then returns it to the station where they started.

Ola CEO and co-founder Bhavish Aggarwal — pictured in the top image alongside Vogo CEO and founder Anand Ayyadurai — said he hopes that the deal and integration will improve last-mile transportation options across India.

A selection of screen captures from the Vogo Android app

“Our investment in Vogo will help build a smart multi-modal network for first-last mile connectivity in the country. Vogo’s automated scooter-sharing platform, backed by Ola’s expertise in this space can help transform our cities. Together, we are thrilled to be at the forefront of India’s rapidly growing micro-mobility market,” he said in a prepared statement.

Ola previously invested in its own bike rental service last year, although that category has struggled in India as Chinese imports like Ofo have fled the country after struggling to develop a sustainable business in the country, and others outside of China. Ola and also Uber have offered motorbike taxis in India since 2016, but scooters offer a more individual approach.

Uber, for its part, doesn’t offer scooters in India at this point. But with India its second-largest market — it has reportedly crossed $1.6 billion in annualized bookings — you’d imagine that it is near the top of the company’s thoughts… although there is the business of that upcoming U.S. IPO to deal with.