Tech regulation in Europe will only get tougher

European governments have been bringing the hammer down on tech in recent months, slapping record fines and stiff regulations on the largest imports out of Silicon Valley. Despite pleas from the world’s leading companies and Europe’s eroding trust in government, European citizens’ staunch support for regulation of new technologies points to an operating environment that is only getting tougher.

According to a roughly 25-page report recently published by a research arm out of Spain’s IE University, European citizens remain skeptical of tech disruption and want to handle their operators with kid gloves, even at a cost to the economy.

The survey was led by the IE’s Center for the Governance of Change — an IE-hosted research institution focused on studying “the political, economic, and societal implications of the current technological revolution and advances solutions to overcome its unwanted effects.” The “European Tech Insights 2019” report surveyed roughly 2,600 adults from various demographics across seven countries (France, Germany, Ireland, Italy, Spain, The Netherlands, and the UK) to gauge ground-level opinions on ongoing tech disruption and how government should deal with it.

The report does its fair share of fear-mongering and some of its major conclusions come across as a bit more “clickbaity” than insightful. However, the survey’s more nuanced data and line of questioning around specific forms of regulation offer detailed insight into how the regulatory backdrop and operating environment for European tech may ultimately evolve.

 

Distractions

Paris to tax scooter and bike services

According to the City of Paris, there are 15,000 free-floating vehicles of all forms and shapes in the city, from electric scooters to fluorescent bikes and motorcycle-like scooters. And the City of Paris announced today that companies that operate free-floating services will have to pay a tax depending on the size of their fleet.

If the plan goes through and if you’re running a bike-sharing service, you’ll have to pay €20 per bike per year. For scooter companies, they’ll pay €50 per scooter per year. Motorcycle scooters will be taxed €60 per scooter per year.

According to Le Parisien, it will be a tier system. Every time you go over the basic tier, you’ll have to pay more. Companies will pay 10 percent more for vehicle No. 500 to vehicle No. 999, 20 percent more for vehicle No. 1,000 to vehicle No. 2,999, and 30 percent more for any vehicle after No. 3,000.

Paris is a tiny city — it’s smaller than San Francisco when it comes to geographical footprint. And it’s also impossible to park a car and drive in Paris. That’s why a vast majority of people who live in Paris don’t own a car. It’s simply much faster and cheaper to use the subway or other transportation methods.

That’s why bikes, scooters and motorcycle scooters are thriving. Having fewer cars on the road is a great thing, but it has created some unexpected challenges.

Bike-sharing services thrived when the city’s bike-sharing system was more or less useless during a network upgrade. GoBee Bike, oBike, Ofo and Mobike all launched their services in the streets of Paris. But they’ve all failed. GoBee Bike shut down, Ofo still has a few bikes but no team, Mobike is scaling back international operations…

That was a bad start for free-floating services, as many broken bikes are littering the streets of Paris. The dock-based bike-sharing system Vélib is now working, fine with more than 1,200 stations and tens of thousands of rides per day — you basically see them everywhere.

On the scooter front, there are now nine companies operating in Paris. Yes, you read that number correctly. They all have funny-sounding names too — Lime, Bird, Bolt, Wind, Tier, Voi, Flash, Hive and Dott.

They’re quite popular because there are a ton of bike lanes in Paris. Most people still don’t wear helmets and there are a lot of injuries — but that’s another issue.

Like many other cities, many people complain about scooters crowding the sidewalk. If you’re in a wheelchair, pushing a stroller or if you’re visually impaired, navigating the sidewalk can be difficult these days.

The City of Paris wants to make those companies accountable. They need to take care of their fleets in order to maximize the number of scooters that actually work and remove the broken scooters. And I’m sure there will be some consolidation and bankruptcies in the space.

When it comes to motorcycle scooters, Cityscoot and Coup have been putting more scooters on the road. There’s no reason they would be excluded from the tax. Sometimes, they are cluttering bike parking space, for instance:

Let’s see if that strategy works to avoid a dumping strategy. Free-floating services have a huge impact on the environment. Scooters only last a few weeks before they need to be replaced. The solution isn’t to throw more scooters at the problem.

Guesty, a tech platform for property managers on Airbnb and other rental sites, raises $35M

The growth of Airbnb — and likewise other platforms like Booking.com, VRBO and Homeaway for listing and renting short-term accommodation in private homes — has spawned an ecosystem of other businesses and services, from those who make money renting their homes, to cleaning companies that make properties “Airbnb-ready”, to those who help design listings that will get more clicks. Airbnb has seen some wild success so far, but it turns out that being a part of that ecosystem can be a lucrative business, too.

Today, Guesty — a Israeli startup that provides a suite of tools aimed at property managers that list on these platforms — is announcing that it has raised $35 million, money that it will use to fuel its growth, after seeing the number of properties managed in some 70 countries through its tech double to over 100,000 in the last year.

The company is not disclosing valuation with this round, which was led Viola Growth with participation also from Vertex Ventures, Journey Ventures, Kingfisher Investment Advisors, La Maison Compagnie d’Investissement, TLV Partners and Magma Ventures. But Amiad Soto, the CEO and co-founder, noted that it too has “more than doubled” since its last funding almost a year ago. PitchBook notes that round was around $90 million post-money, so this would put the current valuation at at least $180 million, likely more.

The idea for Guesty came about like many of the best startup ideas do: out of a personal need. In 2013, twin brothers Amiad and Koby were renting out their own apartments on Airbnb, and found themselves spending a lot of time doing the work needed to list and manage those properties.

Their first stab at a business was an all-in-one service to help hosts get their properties ready and subsequently tidied up for listings. “I was cleaning apartments, Koby was doing the business development, and my girlfriend was doing the laundry,” Soto told me in an interview. They quickly realised that this was never going to scale, “and also that our competitive advantage was building software. We are computer geeks.”

So the company quickly pivoted to building a platform that could provide all the tools that property managers — who work with individual property hosts/owners and had started emerging as key players as Airbnb itself scaled out — needed to juggle multiple listings. (That girlfriend is now his wife, so seems like they may have pivoted just in time.)

Guesty started as SuperHost and, like Airbnb, went through the Y-Combinator accelerator. It eventually rebranded to Guesty, and it now provides tools in a dozen areas that touch property managers and the job they do: Channel Manager (“channel” being the platform where the property is being listed), Multi-Calendar, Unified Inbox, Automation Tools, Mobile Management App, Branded Website Task Management, Reporting Tools, Owners Portal, Payment Processing, Analytics, Open API, 24/7 Guest Communication.

The plan is to complement that in coming years with more “smart” tools: the company is introducing AI and machine learning elements that will help it suggest more services to users, and for managers to use to do their jobs better. (One example of how this might work: if you have a property manager in New York City, and the city regulator changes something in the tax code for properties in Brooklyn, this will now be suggested through to managers whose properties are affected, and this can help with pricing modelling down the line if the manager, say, wanted to keep a specific margin on rentals.)

Perhaps because short-term property renting is a relatively new area of the accommodation and residential market, it’s fairly fragmented, and so Guesty is providing a clear move to consolidate and simplify some of that work.

“There are about 700 different services and other things that go into short-term property rentals,” Soto noted when I asked him about this. “It would take me hours to go through it all with you.”

And indeed, the market itself is much bigger than what Guesty is currently working with. Soto estimates that there are around 7 million properties now collectively getting listed on these short-term letting platforms, speaking to the opportunity ahead.

Guesty very much got its start with Airbnb and that helped it not only establish what property managers needed, but also to forge a close relationship with Airbnb at a time when it wasn’t yet building many bridges to third-party services. Soto said Guesty built its own private API to use with Airbnb, and subsequently helped inform how Airbnb eventually build an API that others could use.

It’s still a trusted partner in that regard. Now that Airbnb is moving into multi-dwelling arrangements — that is, rooms in hotels (which will now expand with its HotelTonight acquisition), plus multiple apartments in single buildings for big groups that might want to secure bookings at several places at once — it will very soon be launching a tool for these kinds of listings. Guesty has helped in the building of that, too.

Still, the opportunity for short-term lettings is bigger than Airbnb itself these days. Booking.com and its many subsidiary businesses have made a big move into this area, as have many other companies, and Guesty now handles bookings on a number of “channels”. Soto said on average, the number of bookings on its platform that are listing on Airbnb is 60 percent, with some vacation spots seeing the percentage much lower, and some urban markets seeing a much higher penetration.

This is one of those cases where being an early mover in identifying a market opportunity has worked in a startup’s favor. Guesty’s strong work with Airbnb has helped the startup build stronger ties with those companies that hope to compete with it and give Airbnb a run for its money: Booking.com, Soto notes, is a premier partner these days.

“Guesty was the first to recognize the potential of the property management market and has quickly become a category leader with its vertical-oriented, end-to-end approach,” said Natalie Refuah, partner at Viola Growth, in a statement. “Technology and AI continue to disrupt the innovation stack, acting as a catalyst to the digitization of “traditional” areas such as real estate and travel. Guesty is leading the charge, fostering a more seamless experience for property managers while providing clear advantages to customers and ultimately, their guests. We believe that with its experienced and elite executive team, Guesty is fully equipped to modernize and revolutionize the property management ecosystem.” Refuah is joining Guesty’s Board of Directors.

Nigerian fintech startup OneFi acquires payment company Amplify

Lagos based online lending startup OneFi is buying Nigerian payment solutions company Amplify for an undisclosed amount.

OneFi will take over Amplify’s IP, team, and client network of over 1000 merchants to which Amplify provides payment processing services, OneFi CEO Chijioke Dozie told TechCrunch.

The move comes as fintech has become one of Africa’s most active investment sectors and startup acquisitions—which have been rare—are picking up across the continent.

The purchase of Amplify caps off a busy period for OneFi. Over the last seven months the Nigerian venture secured a $5 million lending facility from Lendable, announced a payment partnership with Visa, and became one of first (known) African startups to receive a global credit rating. OneFi is also dropping the name of its signature product, Paylater, and will simply go by OneFi (for now).

Collectively, these moves represent a pivot for OneFi away from operating primarily as a digital lender, toward becoming an online consumer finance platform.

“We’re not a bank but we’re offering more banking services…Customers are now coming to us not just for loans but for cheaper funds transfer, more convenient bill payment, and to know their credit scores,” said Dozie.

OneFi will add payment options for clients on social media apps including WhatsApp this quarter—something in which Amplify already holds a specialization and client base. Through its Visa partnership, OneFi will also offer clients virtual Visa wallets on mobile phones and start providing QR code payment options at supermarkets, on public transit, and across other POS points in Nigeria.

Founded in 2016 by Segun Adeyemi and Maxwell Obi, Amplify secured its first seed investment the same year from Pan-African incubator MEST Africa. The startup went on to scale as a payments gateway company for merchants and has partnered with banks, who offer its white label mTransfers social payment product.

Amplify has differentiated itself from Nigerian competitors Paystack and Flutterwave, by committing to payments on social media platforms, according to OneFi CEO Dozie. “We liked that and thought payments on social was something we wanted to offer to our customers,” he said.

With the acquisition, Amplify co-founder Maxwell Obi and the Amplify team will stay on under OneFi. Co-founder Segun Adeyemi won’t, however, and told TechCrunch he’s taking a break and will “likely start another company.”

OneFi’s purchase of Amplify adds to the tally of exits and acquisitions in African tech, which are less common than in other regional startup scenes. TechCrunch has covered several of recent, including Nigerian data-analytics company Terragon’s buy of Asian mobile ad firm Bizsense and Kenyan connectivity startup BRCK’s recent purchase of ISP Everylayer and its Nairobi subsidiary Surf.

These acquisition events, including OneFi’s purchase, bump up performance metrics around African tech startups. Though amounts aren’t undisclosed, the Amplify buy creates exits for MEST, Amplify’s founders, and its other investors. “I believe all the stakeholders, including MEST, are comfortable with the deal. Exits aren’t that commonplace in Africa, so this one feels like a standout moment for all involved,”

With the Amplify acquisition and pivot to broad-based online banking services in Nigeria, OneFi sets itself up to maneuver competitively across Africa’s massive fintech space—which has become infinitely more complex (and crowded) since the rise of Kenya’s M-Pesa mobile money product.

By a number of estimates, the continent’s 1.2 billion people include the largest share of the world’s unbanked and underbanked population. An improving smartphone and mobile-connectivity profile for Africa (see GSMA) turns that problem into an opportunity for mobile based financial solutions. Hundreds of startups are descending on this space, looking to offer scaleable solutions for the continent’s financial needs. By stats offered by Briter Bridges and a 2018 WeeTracker survey, fintech now receives the bulk of VC capital to African startups,

OneFi is looking to expand in Africa’s fintech markets and is considering Senegal, Côte d’Ivoire, DRC, Ghana and Egypt and Europe for Diaspora markets, Dozie said.

The startup is currently fundraising and looks to close a round by the second half of 2019. OnfeFi’s transparency with performance and financials through its credit rating is supporting that, according to Dozie.

There’s been sparse official or audited financial information to review from African startups—with the exception of e-commerce unicorn Jumia, whose numbers were previewed when lead investor Rocket Internet went public and in Jumia’s recent S-1, IPO filing (covered here).

OneFi gained a BB Stable rating from Global Credit Rating Co. and showed positive operating income before taxes of $5.1 million in 2017, according to GCR’s report. Though the startup is still a private company, OneFi looks to issue a 2018 financial report in the second half of 2019, according to Dozie.

UK manufacturers in despair at Brexit impasse, says CBI

Total orders fall back in March as firms put off investment and stockpile goods

Britain’s manufacturers are in despair at the failure of politicians to end the Brexit impasse, according to the CBI, which reported a drop in output in March as businesses cut back production.

Export order books increased among the 358 manufacturers in the survey, supported by the low level of sterling, but this was cancelled out by a decline in domestic demand to leave the industry in a weakening position ahead of a decision in parliament on Brexit.

Continue reading…

Tandem Bank launches ‘Autosavings’ account

Tandem Bank, the U.K. challenger bank, is launching a new savings account powered by its “Autosavings” feature designed to make it easier to save.

Paying 0.5 percent interest, the Tandem Autosavings account is effectively a flexible savings bank account built on top of Tandem’s existing bank account aggregation app and the various credit cards it offers. Based on a number of rules, it will automatically put money aside based on your spending habits and what its algorithm deems you can afford.

The first rule, known as “Round Ups,” will move the change from small purchases to your Tandem Autosavings account, enabling you to round-up to the next pound across spending on all of your connected bank accounts.

The second rule, dubbed “Safe To Save,” claims to use machine learning to calculate how much you can save based on the income and outgoings of your connected accounts. Within the Tandem app you can set your saving level using a slider from minimum to maximum savings, which aims to save between 5 and 15 percent of your income.

Outside of these rules, you can also choose to top up your Tandem Autosavings account at anytime. Money moved across to your Tandem Autosavings account is pulled via the debit card you have added to the app and transactions are processed by Stripe, as we previously reported.

“We spend a huge amount of time speaking with our users, understanding the challenges they face with their money, and what we can do to help,” Tandem’s Matt Ford tells me. “A consistent theme which arose for many of our users was the need to save. People either felt like they were unable to save at all (as they battle through to the end of the month), or were trying to save, but spending got in the way and they were unable to reach their goals fast enough”.

Ford says that Autosavings aims to solve these problems by drawing on “behavioural economics principles”. The idea is that by helping customers save small amounts each time they spend, Tandem is initiating a savings behaviour for customers who may have previously felt unable to save.

“Similarly, for those who need an extra boost, we have a rule called ‘safe to save’ which, based on a forecast of upcoming spending and bills, helps sweep any spare cash automatically aside into an interest-bearing Tandem savings account… We’re planning to roll out additional rules over time to find new ways to help customers kickstart and accelerate their savings behaviour”.

Perhaps crucially, Ford says that Tandem doesn’t “sweep” money immediately. Instead, savings are first added to a “virtual pot” that builds throughout the week, before moving across into your Tandem account.

“With a quick swipe, customers can remove any savings items added to the pot before it leaves their current account, and they get a push notification before the money movement occurs so they can ensure that they are comfortable with the saving amount,” he explains. “Also, for people who have aggregated their current account and have the safe to save rule activated, we’re continually monitoring on a day-to-day basis how much a customer can afford to save based on their sending and account balance”.

Meanwhile, Tandem has picked up pace over the last 18 months. Most recently the company launched a credit card for people who find it hard to quality for one. It followed the launch of a competitive fixed savings product, pitting it against a whole host of incumbent and challenger banks, and the original Tandem credit card offering cash-back and low FX rates.

All of Tandem’s products are managed via the Tandem mobile app, which also acts as a Personal Finance Manager (PFM), including letting you aggregate your non-Tandem bank account data from other bank accounts or credit cards you might have.

Like a plethora of fintechs, Tandem’s broader strategy is to become your financial control centre and connect you to and offer various financial services. These are either products of its own or through partnerships with other fintech startups and more established providers.

Ahead of third antitrust ruling, Google announces fresh tweaks to Android in Europe

Google is widely expected to be handed a third antitrust fine in Europe this week, with reports suggesting the European Commission’s decision in its long-running investigation of AdSense could land later today.

Right on cue the search giant has PRed another Android product tweak — which it bills as “supporting choice and competition in Europe”.

In the coming months Google says it will start prompting users of existing and new Android devices in Europe to ask which browser and search apps they would like to use.

This follows licensing changes for Android in Europe which Google announced last fall, following the Commission’s $5BN antitrust fine for anti-competitive behavior related to how it operates the dominant smartphone OS.

tl;dr competition regulation can shift policy and product.

Albeit, the devil will be in the detail of Google’s self-imposed ‘remedy’ for Android browser and search apps.

Which means how exactly the user is prompted will be key — given tech giants are well-versed in the manipulative arts of dark pattern design, enabling them to create ‘consent’ flows that deliver their desired outcome.

A ‘choice’ designed in such a way — based on wording, button/text size and color, timing of prompt and so on — to promote Google’s preferred browser and search app choice by subtly encouraging Android users to stick with its default apps may not actually end up being much of a ‘choice’.

According to Reuters the prompt will surface to Android users via the Play Store. (Though the version of Google’s blog post we read did not include that detail.)

Using the Play Store for the prompt would require an Android device to have Google’s app store pre-loaded — and licensing tweaks made to the OS in Europe last year were supposedly intended to enable OEMs to choose to unbundle Google apps from Android forks. Ergo making only the Play Store the route for enabling choice would be rather contradictory. (As well as spotlighting Google’s continued grip on Android.)

Add to that Google has the advantage of massive brand dominance here, thanks to its kingpin position in search, browsers and smartphone platforms.

So again the consumer decision is weighted in its favor. Or, to put it another way: ‘This is Google; it can afford to offer a ‘choice’.’

In its blog post getting out ahead of the Commission’s looming AdSense ruling, Google’s SVP of global affairs, Kent Walker, writes that the company has been “listening carefully to the feedback we’re getting” vis-a-vis competition.

Though the search giant is actually appealing both antitrust decisions. (The other being a $2.7BN fine it got slapped with two years ago for promoting its own shopping comparison service and demoting rivals’.)

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search,” Walker continues. “In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app.”

Other opinions are available on those changes too.

Such as French pro-privacy Google search rival Qwant, which last year told us how those licensing changes still make it essentially impossible for smartphone makers to profit off of devices that don’t bake in Google apps by default. (More recently Qwant’s founder condensed the situation to “it’s a joke“.)

Qwant and another European startup Jolla, which leads development of an Android alternative smartphone platform called Sailfish — and is also a competition complainant against Google in Europe — want regulators to step in and do more.

The Commission has said it is closely monitoring changes made by Google to determine whether or not the company has complied with its orders to stop anti-competitive behavior.

So the jury is still out on whether any of its tweaks sum to compliance. (Google says so but that’s as you’d expect — and certainly doesn’t mean the Commission will agree.)

In its Android decision last summer the Commission judged that Google’s practices harmed competition and “further innovation” in the wider mobile space, i.e. beyond Internet search — because it prevented other mobile browsers from competing effectively with its pre-installed Chrome browser.

So browser choice is a key component here. And ‘effective competition’ is the bar Google’s homebrew ‘remedies’ will have to meet.

Still, the company will be hoping its latest Android tweaks steer off further Commission antitrust action. Or at least generate more fuzz and fuel for its long-game legal appeal.

Current EU competition commissioner, Margrethe Vestager, has flagged for years that the division is also fielding complaints about other Google products, including travel search, image search and maps. Which suggests Google could face fresh antitrust investigations in future, even as the last of the first batch is about to wrap up.

The FT reports that Android users in the European economic area last week started seeing links to rival websites appearing above Google’s answer box for searches for products, jobs or businesses — with the rival links appearing above paid results links to Google’s own services.

The newspaper points out that tweak is similar to a change promoted by Google in 2013, when it was trying to resolve EU antitrust concerns under the prior commissioner, Joaquín Almunia.

However rivals at the time complained the tweak was insufficient. The Commission subsequently agreed — and under Vestager’s tenure went on to hit Google with antitrust fines.

Walker doesn’t mention these any of additional antitrust complaints swirling around Google’s business in Europe, choosing to focus on highlighting changes it’s made in response to the two extant Commission antitrust rulings.

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search. In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app,” he writes.

Nor does he make mention of a recent change Google quietly made to the lists of default search engine choices in its Chrome browser — which expanded the “choice” he claims the company offers by surfacing more rivals. (The biggest beneficiary of that tweak is privacy search rival DuckDuckGo, which suddenly got added to the Chrome search engine lists in around 60 markets. Qwant also got added as a default choice in France.)

Talking about Android specifically Walker instead takes a subtle indirect swipe at iOS maker Apple — which now finds itself the target of competition complaints in Europe, via music streaming rival Spotify, and is potentially facing a Commission probe of its own (albeit, iOS’ marketshare in Europe is tiny vs Android). So top deflecting Google.

“On Android phones, you’ve always been able to install any search engine or browser you want, irrespective of what came pre-installed on the phone when you bought it. In fact, a typical Android phone user will usually install around 50 additional apps on their phone,” Walker writes, drawing attention to the fact that Apple does not offer iOS users as much of a literal choice as Google does.

“Now we’ll also do more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones,” he adds, saying: “This will involve asking users of existing and new Android devices in Europe which browser and search apps they would like to use.”

We’ve reached out to Commission for comment, and to Google with questions about the design of its incoming browser and search app prompts for Android users in Europe and will update this report with any response.

Doctolib is now a unicorn with new $170 million round

French startup Doctolib has raised a new round of funding of $170 million (€150 million). The round is led by General Atlantic, with existing investors Accel, Eurazeo, Kernel and Bpifrance also participating. Some German healthcare entrepreneurs are also joining the round — the company isn’t detailing the names of those investors.

But Doctolib is detailing an important metric — its valuation. Based on this new round, Doctolib now has a post-money valuation of $1.13 billion (€1 billion). There’s a new unicorn in town.

Doctolib first started with a scheduling service for health practitioners. For €109 per month ($124), you can replace your calendar with Doctolib and let the startup take care of your week. Patients can book an appointment on Doctolib’s website and everything stays in sync between your own calendar and your public calendar.

More recently, Doctolib expanded to new countries and new types of practitioners. The company is now live in Germany and now also works with hospitals. Some hospitals have completely switched their scheduling system to Doctolib. Doctolib essentially became the leading cloud service for healthcare scheduling.

There are currently 75,000 practitioners and 1,400 healthcare facilities using Doctolib. The company works with 750 people and has offices in 40 different cities — it sounds like you need to have a local team in order to convince doctors in a specific area.

And now, the startup wants to expand to new services. In January, the company launched its telemedicine service. Existing Doctolib customers can now flip a switch and start accepting remote appointments.

This is a natural extension of Doctolib’s booking service. In addition to finding the right doctor and booking an appointment, you can now have a video consultation with a healthcare professional and get a digital prescription in your account.

Doctolib has focused on a limited feature set for years. But the company now has a shot at becoming a sort of Salesforce for the healthcare industry — a software-as-a-service company with a range of services to help practitioners switch from traditional software suites to browser-based applications.

For instance, Doctolib could expand beyond patient-to-doctor relationships and facilitate doctor-to-doctor collaboration as well.

With today’s funding round, the company will double the size of the team within the next three years across the board. In addition to sales people, the company will also double the size of the technology, product and design teams in order to launch new products. And finally, Doctolib will also expand to new countries.