On Tuesday, Tencent’s usually low-profile founder and CEO Pony Ma made rare comments to weigh in on escalating tensions between the United States and China, calling domestic tech companies to build more self-reliance in a bid to stay competitive.
“China has come to the forefront of development. There is less and less room for taking the best from outside and improving on them. As the ZTE and Huawei cases have intensified recently, we are also constantly watching whether the trade war will turn into a tech war,” said Ma at an event in China’s Yunnan Province per a transcript Tencent provided to TechCrunch.
Ma’s concern is not unexpected. As recent US-China negotiations show, the Shenzhen-based telecommunication and smartphone giant has become deeply entangled in the trade spat. The Commerce Department last week restricted American companies from selling components and other technology to Huawei — which the Trump administration has labeled as posing a national security threat — though it has since scaled back the ban. That would eventually cut Huawei off from certain services from Google, chips made by Qualcomm and Intel, and its other American suppliers.
Despite China’s efforts to lead in global innovation, many of its tech startups and champions still rely heavily on imported technologies to deliver products and services. People have celebrated this level of interdependence as a result of trade, but increasingly they worry decoupling the US and China will hurt companies on both sides and lead to a bifurcation of the global tech economy.
“[China]’s digital economy will be a high-rise built on sand and hard to sustain if we don’t continue to work hard on basic research and key knowledge, not to mention the transformation from old to new forms of drivers or high-quality development,” Ma pointed out.
Jack Ma, founder of Tencent’s arch-foe Alibaba, remarked along the same line following a similar ban placed on the sale of American components to Huawei rival ZTE in April of last year.
“It is the compelling obligation for big companies to compete in core technology,” said Alibaba’s Ma at an industry event per a report from the South China Morning Post.
The latest technology ban from the US has now accelerated Huawei’s efforts to become more technologically independent. That includes designing its own chips and rolling out its own smartphone operating system, though observers and stakeholders, including Huawei’s founder Ren Zhengfei himself, have raised questions on their viability in the short run.
“We will give it a try. Making the operating system isn’t too difficult. What’s difficult is the ecosystem. How do you build an ecosystem? This is a big project, and it will take time,” said Ren during an interview with state media on Tuesday.
When it comes to Huawei’s homegrown chips, Ren said the company is “capable of making American-quality semiconductors, but that doesn’t mean it won’t buy them.” On the other side, chip experts interviewed by Reuters have called out Huawei for its claim, saying it would be difficult for the Chinese company to manufacture network gears without American suppliers.
It’s harvest season for Southeast Asia’s full-stack food delivery startups. Following on from Singapore’s Grain raising $10 million, so Malaysia-based Dahmakan today announced a $5 million financing round of its own.
The money takes the startup to $10 million raised to date — its last round as $2.6 million last year — and it comes via new investors U.S-based Partech Partners and China’s UpHonest Capital and existing backers Y-Combinator, Atami Capital and the former CEO of Nestlé who was an angel investor. The round was closed earlier this year but is now being announced alongside this expansion play.
It is going all in on ‘cloud kitchen’ model of using unwanted retail space to cook up meals specifically for digital orders, which is entirely its business since it handles all processes in house rather than through a marketplace model.
Already, in its home town of Kuala Lumpur, Malaysia, Dahmakan has introduced ‘satellite’ hubs that will allow it to serve customers located in different parts of the city more efficiently. The service already fares better than rivals like FoodPanda, Grab Food and (in Thailand) GoJek’s GetFood service because customers order ahead of time from a fixed menu with scheduled delivery times, but there’s room to do better and more.
“The way that we are thinking about it is that we are 18 months ahead of the competition in terms of the cloud kitchen model. Most are only starting to build out clusters of mini kitchens (150sqft) or so without leveraging too much AI in terms of product development, procurement or automation in machinery,” Dahmakan COO and co-founder Jessica Li told TechCrunch.
“What we’ve figured out is how to scale food production for thousands of deliveries while maintaining quality and keeping costs at 30 percent below comparable restaurant prices,” she added, explaining that the company plans to add “new brands and new products” using the satellite hub approach.
A serving of Ayam Penyet, Indonesian smashed chicken
Dahmakan is looking to extend its reach in Southeast Asia, too.
Li said the immediate priority is domestic growth in Malaysia with the service set to expand in Penang and Johor Bharu during the third quarter of this year. Beyond that, she revealed that Dahmakan plans to move into Singapore and Indonesia before the end of 2019.
Food delivery is quickly becoming the new ride-hailing war in Southeast Asia as Grab and Go-Jek, which have raised the most money in the region, pour capital into space. Quite why they are doing so isn’t entirely clear. Food could be a channel for loyalty (if such a thing can exist in incentive-led verticals) and user engagement for ride-hailing or other parts of their so-called “super app” services, but, either way, it is certainly distorting the market by flooding users with promotions.
That’s not necessarily a bad thing for startups like Dahmakan and Grain which have grown in a more sustainable and responsible manner. They benefit from more people using food delivery in general, while they may also become attractive acquisition targets in the future.
Like Grain, Dahmakan puts a focus on healthy eating, which stands in contrast to the typical junk food orders that others in the space serve through their marketplace of restaurants. That certainly helps them stand out among certain audiences, and it’ll be interesting to see what new products and brands that Dahmakan is hatching to capitalize on the flood of attention food delivery is seeing..
This is certainly only the start. A Google-Temasek report on Southeast Asia published last year forecasts that the region’s food delivery market will grow from an estimated $2 million last year to $8 billion in 2025. That four-fold prediction is larger than the growth forecast for ride-hailing, although the latter is larger.
“That’s faster than any other region even China,” Li said.
A report from Google and Temasek predicts huge growth for ride-hailing and food delivery services in Southeast Asia
Sun Basket, a provider of a healthy meal delivery service, has raised another $30 million in venture capital funding. The round, led by PivotNorth Capital, brings the company’s total raised to $125 million.
The Series E funding delays Sun Basket’s expected initial public offering once again. There’s been unsubstantiated talk of a Sun Basket float for quite some time; in fact, before Blue Apron and Hello Fresh, a pair of fellow meal kit delivery businesses, completed IPOs, Sun Basket was the subject of exit rumors. Alas, we will have to wait a while longer before the company makes the big leap.
After all, Blue Apron has performed very poorly since going public on the New York Stock Exchange two years ago. Sun Basket chief executive has been honest about the difficulties of being a meal kit startup in a post-Blue Apron IPO universe, telling PitchBook his company’s Series D round “was by far the most challenging fundraise” in his company’s history.
Sun Basket, headquartered in San Francisco, was founded in 2014 by award-winning chefs Adam Zbar and Justine Kelly. The company delivers fresh, organic and sustainable ingredients to customers, setting itself apart from the large number of meal-kit providers active in the U.S. Its latest infusion of capital will be used to expand their offerings to include breakfast, lunch and dinner, “personalized for any lifestyle.”
“We’re thrilled to have the strong support of our investors who share our vision for building the leading personalized healthy eating platform,” CEO Zbar said in a statement. “Food is a $1T market ripe for online disruption, and Sun Basket will continue to innovate, focusing on our customers’ top three needs: health, ease, and personalization.”
Sun Basket says its growing fast. In its funding announcement, the business cited a compound annual growth rate of 80 percent over the last three years with “the best unit economics in the space.” Sapphire Ventures, August Capital, Founders Circle, Unilever Ventures, Baseline Ventures, Relevance Capital, Accolade Partners, and Correlation Ventures have also particiated in the round.
Despite known issues in the space, a tough path to profitabliity and high-profile failures (see ‘After Raising $125M, Munchery Fails To Deliver’), venture capital investors continue to make deals in the meal kit/ food delivery space. From large financings like DoorDash’s $400 million Series F to GrubMarket’s recent $25 million deal, food startups continue to attract investment.
Customer engagement service Freshworks, which you may still remember under its old name of Freshdesk, today announced that it has acquired Natero, a customer success service with some AI/ML smarts that helps businesses prevent churn and manage their customers.
The acquisition, Freshworks CEO Girish Mathrubootham told me, will help the company complete its mission to provide its users with a 360-degree view of their customers. As Mathrubootham stressed, Freshdesk started out with a focus on customer support and then added additional functionality for marketers and other roles over time. Today, however, companies want this full 360-degree view of a customer and be able to offer differentiated service to their top customers, for example. In many ways, the acquisition of Natero closes the loop here.
“The acquisition extends our ‘customer-for-life’ vision to all teams, including account and customer success managers who require up-to-date customer usage and health data to proactively engage those accounts at risk of churn or ready to buy more,” Mathrubootham said.
Natero founder and CEO Craig Soules echoed this and noted that the only way to do this is to have a rich customer model at the core of these efforts. “More and more people wanted to take data from Natero and take it to sales tools,” he said when I asked him about how his company will fit into the Freshworks portfolio — and why he sold the company. “We Freshworks, we saw a company that was going into this direction and that was doing customer success for a very long it. […] It felt like a very natural fit to leverage this customer model.”
Mathrubootham also noted that Freshworks was actually a Natero customer so when Natero got to the point where it was looking for more capital to expand this focus on its customer model, the two companies started talking.
Natero will continue to exist as a stand-alone product, but it will also become part of the Freshworks 360 suite, Freshwork’s integrated customer engagement suite.
Ahead of today’s acquisition, Natero had raised a total of $3.3 million. That’s not a lot for a startup that launched back in 2012, but Soules noted how he was able to fund the company’s expansion through revenue. The two companies did not disclose the acquisition price.
Ford Motor is laying off 7,000 salaried employees as part of CEO Jim Hackett’s restructuring plan to reduce bureaucracy, cut costs and turn the automaker into a more agile company prepared for a future that extends beyond its traditional business of producing and selling cars and trucks.
The cuts represent about 10 percent of the automaker’s salaried employees. Some buyouts and layoffs have already occurred, according to an email sent to employees by Hackett. The contents of the email were initially reported by the WSJ. TechCrunch has since reviewed the email.
Some 1,500 employees opted for voluntary buyouts, which occurred in November 2018, according to a spokesperson. Ford expects to complete the restructuring efforts expect by August globally. Cuts affecting Ford’s North American workforce will be complete by June, a Ford spokesperson told TechCrunch.
This cuts will result in annual savings of about $600 million, Hackett said in the email. “We also made significant progress in eliminating bureaucracy, speeding up decision making and driving empowerment as part of this redesign,” he wrote.
The layoffs were anticipated by employees. Ford informed employees last October that it would be restructuring the company, a move that would likely result in layoffs and voluntary buyouts.
The reorganization is part of a broader strategy to prepare for a future with autonomous vehicle technology, electrification and unconventional ownership models.
The restructuring plan is focused on making the company more agile and less bureaucratic. Each business went through a “Smart Redesign” process, according to Hackett’s email, which notes that 1,000 employees were involved in this activity.
Ford previously announced it would spend $11 billion to add 16 all-electric vehicles within its global portfolio of 40 electrified vehicles through 2022. At the heart of the company’s electrification effort is its Corktown project, a massive 1.2 million-square-foot space dedicated to its electric and autonomous vehicles businesses.
The goal of Corktown is to create a “mobility corridor” — Ford’s version of its own Sand Hill Road in Silicon Valley — that ties hubs of research, testing and development in the academic hub of Ann Arbor to Ford’s Dearborn headquarters, and finally to Detroit.
Last year, Hackett revealed several other techcentric plans for the automaker that included the introduction of an open cloud-based platform for cities to use, a partnership with Qualcomm for Cellular Vehicle-to-Everything, or C-V2X, a term that means two-way communication with stoplights, signs and other city infrastructure. The company
Artemis, the ag-tech startup formerly known as Agrilyst, today announced that it has raised an $8 million Series A funding round. The round was co-led by Astanor Ventures and Talis Capital, with participation from iSelect Fund and New York State’s Empire State Development Fund. With this, the company, which won our 2015 Disrupt SF Battlefield competition, has now raised a total of $11.75 million.
When Agrilyst launched, the company mostly focused on helping indoor farmers and greenhouse operators manage their operations by gathering data about their crop yields and other metrics. Over the course of the last few years, that mission has expanded quite a bit, though, and today’s Artemis sees itself as an enterprise Cultivation Management Platform (CMP) that focuses on all aspects of indoor farming, including managing workers and ensuring compliance with food safety and local cannabis regulations, for example.
The expanded platform is meant to give these businesses a single view of all of their operations and integrates with existing systems that range from climate control to ERP tools and Point of Sale systems.
Compliance is a major part of the expanded platform. “When you look at enterprise operations, that risk is compounded because it’s not just that risk across many, many sites and many acres, so in 2018, we switched to almost entirely focusing on those operations and have gained a lot of momentum in that space,” Kopf said. “And now we’re using the funding to expand from mainly focusing on managing that data to help with profitability to using that data to help you with everything from compliance down to the profitability element. We want to limit that exposure to controllable risk.”
With this new focus on compliance, the company also added Dr. Kathleen Merrigan to its board. Merrigan was the Deputy Secretary of Agriculture in the Obama administration and is the first Executive Director of the Swette Center for Sustainable Food Systems at Arizona State University . She is also a venture partner at Astanor Ventures .
“Technology innovation is rapidly transforming the agriculture sector. Artemis’ approach to using data as a catalyst for growth and risk management provides the company a significant advantage with enterprise-level horticulture operations,” said Merrigan.
Cannabis, it’s worth noting, was not something the company really focused on in its early years, but as the company’s CEO and founder Allison Kopf told me, it now accounts for about half of the company’s revenue. Only a few years ago, many investors were also uncomfortable investing in a company that was in the cannabis business, but that’s far less of an issue today.
“When we raised our seed round in 2015, we were pitching to a lot of funds and a lot of funds told us that they had LPs that can’t invest in cannabis. So if you’re pitching that you’re going to eventually be in cannabis, we’re going to have to step away from the investment, ” Kopf said. “Now, folks are saying: ‘If you’re not in cannabis, we don’t want to invest.’”
Today, Artemis’s clients are worth a collective $5 billion. The company plans to use the
Fresh from raising $70 million last year via big names including Goldman Sachs and TPG Growth, Livspace, an India-based startup that offers a one-stop-shop for interior design, has lured yet another marquee investor: Ikea.
The startup said today it has taken an undisclosed investment from Ingka Investments, the VC arm of Ikea parent Ingka Group, which operates 90 percent of Ikea’s retail footprint. Livspace CEO and co-founder Anuj Srivastava declined to provide a figure for the deal, but he told TechCrunch that the stake involved is a minor one while there is no plan to bolt a larger round on to this investment. Deal Street Asia first reported news of the deal.
“There is strong strategic and commercial potential,” Srivastava, a former Googler who started Livspace in 2015, said of the new investor. “This is an opportunity to create the best possible omnichannel experience for consumers.”
India is a tough place for international retail companies but Ikea has made progress in recent times.
Livspace, for those unaware of it, runs a service that is aimed at taking the hassle out of interior design. The company’s platform connects homeowners with designers and the supply chain to go through ideas, chose a plan and implement it. That includes, among other things, 3D virtual renders of a renovation, offline meetings at a Livspace design center and, in some cases, customized furnishings. By bringing all parties together, Livspace claims to offer cost savings to consumers as well as higher rates and more efficient use of time for designers.
That model resonates with Ikea (Ingka), according to Srivastava, who said the company sides began talking following the announcement of Livspace’s Series C round last September.
“We’ve felt the natural synergy always existed,” he said. “This is an extremely strong endorsement of our vision.”
Synergies, indeed, although somewhat frustratingly neither party is saying how they will work together going forward. The obvious suggestion would be that Ikea products become available through Livspace, but Srivastava said the specifics are still to be agreed.
Further down the line, though, he admitted that Ikea’s involvement could fuel an international expansion beyond India. Going overseas is something that the company is openly talked up in the past and, with Ikea’s global footprint of 367 stores across 30 markets, the investment from Ingka could give Livspace a running start in new markets.
That, like the details of the alliance, is something that will come later, however.
“The India business is keeping us really, really busy at this time,” said Srivastava on that possibility.
“We’re engaged in exploratory activities but there’s no immediate plan or timeline,” he added as a tease. A new market launch isn’t likely until something like 12-18 months down the line, the Livspace CEO said.
As for whether this deal might be a precursor to an eventual acquisition, such are the synergies, Srivastava said that possibility isn’t being entertained.
“There is no such intention as of now,” he explained. “We continue to have strong interest from financial investors and continue to operate with the intention to stay independent, there’s now even more belief in our platform approach.”
“There is distinctly an investment outlay involved [with] no long term indication of an M&A opportunity,” he added.
As we swing into the summer tourist season, a company poised to capitalise on that has raised a huge round of funding. GetYourGuide — a Berlin startup that has built a popular marketplace for people to discover and book sightseeing tours, tickets for attractions and other experiences around the world — is today announcing that it has picked up $484 million, a Series E round of funding that will catapult its valuation above the $1 billion mark.
The funding is a milestone for a couple of reasons. GetYourGuide says it is the highest-ever round of funding for a company in the area of “travel experiences” (tours and other activities) — a market estimated to be worth $150 billion this year and rising to $183 billion in 2020. And this Series E is also one of the biggest-ever growth rounds for any European startup, period.
The company has now sold 25 million tickets for tours, attractions and other experiences with a current catalog of some 50,000 experiences on offer. That’s a sign of strong growth: in 2017 it sold 10 million tickets, and its last reported catalog number was 35,000. It will be using the funding to build more of its own “Originals” tour experiences — which have now passed the 40,000 tickets sold mark — as well as to build up more activities in Asia and the US, two fast-growing markets for the startup.
The funding is being led by Softbank, via its Vision Fund, with Temasek, Lakestar, Heartcore Capital (formerly Sunstone Capital), and Swisscanto Invest among others also participating. (Swisscanto is part of Zürcher Kantonalbank: GetYourGuide was originally founded in Zurich, where the founders had studied, and it still runs some R&D operations there.) The company has now raised well over $600 million.
It’s notable how Softbank — which is on the hunt for interesting opportunities to invest its $100 billion superfund — has been stepping up a gear in Germany to tap into some of bigger tech players that have emerged out of that market, which today is the biggest in Europe. Other big plays have included €460 million into Auto1 and €900 million into payments provider Wirecard. Other companies it has backed, such as hotel company Oyo out of India, is using its funding to break into Europe (and buy German companies in the process).
There had been reports over the last several months that GetYouGuide was in the process of raising anywhere between $300 million and more than $500 million. In late April, we were told by sources that the round hadn’t yet closed, and that numbers published in the media up to then had been inaccurate, even as we nailed down that Softbank was indeed involved in the round.
The valuation in this round is not being disclosed, but CEO Johannes Reck (who co-founded the app with Martin Sieber, Pascal Mathis, Tobias Rein and Tao Tao) said in an interview with TechCrunch that it was definitely “now a unicorn” — meaning that its valuation had passed the $1 billion mark. For additional context, the rumor last month was that GetYourGuide’s valuation is now up to €1.6 billion ($1.78 billion) but I have not been able to get firm confirmation of that number.
From hip replacements to hipsters
GetYourGuide’s growth — and investor interesting in it — has closely followed the rise of new platforms like Airbnb that have changed the face of how we travel, and what we do when we get somewhere. We have moved far beyond the days of visiting a travel agent that books everything, from flight to hotel to all your activities, as you sit on the other side of a desk from her or him. Now with the tap of a finger or the click of a mouse, we have thousands of choices.
Within that, GetYourGuide thinks that it has jumped on an interesting opportunity to rethink the activity aspect of tourism. Tour packages and other highly organized travel experiences are often associated with older people, or those with families — essentially people who need more predictability when they are not at home.
Reck noted that the earliest users of GetYourGuide in 2010 were precisely those people — or at least those who were more inclined to use digital platforms to begin with: the demographic, he said, was 40-50 year olds, most likely travelling with family.
That is one thing that has really started to change, in no small part because of GetYourGuide itself. Making the experience of booking experiences mobile-friendly, GetYourGuide has played into the culture of doing and showing that has propelled the rise of social media.
“They want to do things, to have something to post on Instagram,” he said. The average age of a GetYourGuide user now, he said, is 25-40.
This has even evolved into what GetYourGuide provides to users. “At some point, staff in Asia had the idea of crafting a ‘GetYourGuide Instagram Tour of Bali.’ That really took off, and now this is the number-one tour booked in the region.” It has since expanded the concept to 50 destinations.
That has also led GetYourGuide to conclude it has a ways to go to continue developing its model and scope further, expanding into longer sightseeing excursions, beyond one or two-hour tours into day trips and even overnight exeperiences.
As it continues to play around with some of these offerings, it’s also increasingly taking a more direct role in the branding and the provision of the content. Initially, all tickets and tours were posted on GetYourGuide by third parties. Now, GetYourGuide is building more of what Reck calls “Originals” — which it might develop in partnership with others but ultimately handles as its own first-party content. (That Instagram tour was one of those Originals.)
It’s notable that others are closing in on the same “experiences” model that forms the core of GetYourGuide’s business: Airbnb, to diversify how it makes revenues and to extend its touchpoints with guests beyond basic accommodation bookings, has also started to sell experiences. Meanwhile, daily deals pioneer Groupon has also positioned itself as a destination for purchasing “experiences” as a way of offset declines in other areas of its business. Similarly, travel portals that sell plane tickets regularly default to pushing more activities on you.
Reck pointed out that the area of business where GetYourGuide is active is becoming increasingly attractive to these players as other aspects of the travel industry become increasingly commoditised. Indeed, you can visit dozens of sites to compare pricing on plane tickets, and if you are flexible, pick up even more of a bargain at the last minute. And the rise of multiple Airbnb-style platforms offering private accommodation has made competition among those supplying those platforms — as well as hotels — increasingly fierce.