Venmo launches a ‘limited edition’ rainbow debit card for its payment app users

Hoping to entice more users to attach the Venmo MasterCard to their account, Venmo this morning announced it’s launching a “special edition” rainbow-colored version of its debit card that will only be available in limited quantities. Clearly, the idea here is to generate a sense of urgency around ordering the Venmo MasterCard as well as a desire to cater to Venmo users’ interest in more card varieties.

The new rainbow card will be offered until supplies last, says Venmo. And existing card holders can choose to request the rainbow card as a replacement for their current card, if they choose.

The card will be first offered to top cardholders o Friday, and will then be available to all Venmo users starting on March 4th, the company says.

“We launched the LImited Edition rainbow card based on the positive response we received from our customers when we launched the initial set of six colorful cards,” a spokesperson for Venmo explained to TechCrunch. “We know our users love to pick a card color that best suits their own personality and style, so the card design is inspired by many of our existing card colors and gives our users an even more vibrant option for their wallets and at checkout,” they added.

Venmo had first beta tested its debit card in 2017, with an ugly card that featured a photo of a lump of dough on it. (Get it? Dough.)

But the company soon realized that young people care about how a card looks – and a photo of dough wasn’t cutting it. When Venmo launched the public version of the card last July, it instead opted for an array of colorful choices. Users could choose a solid white, black, yellow, pink, blue or green shade for their Venmo debit card.

The rainbow version takes all those same colors and splashes them all over the card face.

It’s…well…unique. But it’s not really all that pretty – especially since the card still has to feature the clashing red-and-orange MasterCard logo.

The new card works the same as the old ones – allowing you to pay for things in the real world using your Venmo balance, as well as to easily split costs of purchases and tips, like you can do in the Venmo app.

It’s not surprising that Venmo is trying out different card designs.

Unique card styles have been proven to attract millennial customers. For example, part of the demand for Chase Sapphire Reserve Card is due to the fact that the card is made using a metallic alloy, instead of plastic. The company even ran out of the alloy for a time, because of the high demand. Today, there are a number of metal cards on the market, including the one from fintech startup Revolut, hoping to gain similar attention.

In addition, newcomers are testing out colorful styles – SoFi, for instance, launched an aqua and green card last year. And savings app Acorns hired Ammunition, a design firm co-led longtime industrial designer for Apple, Robert Brunner, to design its card.

But millennials often seem to prefer “fancy” to splashy, which is why Venmo rival Square went with a more formal design where it allows you to have your signature laser-printed on the card’s front.

Venmo declined to say how many cards it has shipped to date, or how many limited edition cards are now available.

The company claims demand is growing, however.

“The Venmo card has seen strong interest from our customers,” a spokesperson noted. “We saw 300% month-over-month growth in monthly active card users from August to September 2018, and the top two purchase categories are supermarkets and restaurants as Venmo becomes a part of our user’s everyday spend,” they said.

 

China wants its rural villages to go cashless by 2020

Residents of even the tiniest far-flung villages in China may soon be able to pay on their phones to run daily errands as Beijing announced this month that it aims to make mobile payments ubiquitous in rural areas by the end of 2020.

The plan arrived in a set of guidelines (document link in Chinese) jointly published by five of China’s top regulating bodies, including the central bank, the Banking and Insurance Regulatory Commission, the Securities Regulatory Commission, the Ministry of Finance and the Ministry of Agriculture and Rural Affairs, in a move to make online financial services more accessible to rural residents.

The hope is that by digitizing the lives of the farming communities, from getting loans to buy fertilizers to leasing lands to city developers, China could bolster the economy in smaller cities and countryside hamlets. Hundreds of millions of rural Chinese have migrated to large urban centers pursuing dreams and higher-paying jobs, but 42 percent of the national population remained rural as of 2017. While scan-to-pay is already a norm in bigger cities, digital payments still have considerable room to grow in rural towns. All told, 76.9 percent of China’s adults used digital payments in 2017. That ratio was 66.5 percent in rural parts, according to a report released by the central bank.

Following the digital payments pledge was the release of the annual Number One Document (in Chinese) that outlines China’s national priorities for the year. Over the past 16 years, China has devoted the paper to its rural economy and this year, digital integration continues to be one of the key goals. More precisely, Beijing wants rural officials to ramp up internet penetration, the digitization of public services, sales of rural produce to city consumers, and more.

Those directives usher in huge opportunities for companies in the private sector. Tech heavyweights such as Alibaba and JD.com were already looking outside megacities a few years ago. Both have set up online channels enabling farmers to sell and buy as well as working with local governments to build up logistics networks.

Alibaba notably invested in Huitongda, a company that provides merchandising, marketing and supply chain tools to rural retail outlets. Despite posting the slowest revenue growth in three years, Alibaba saw exceptional user growth in rural regions. Similarly, JD’s daily orders from smaller Tier 3 and 4 cities were growing 20 percent faster than those in Tier 1 and 2 cities like Beijing and Hangzhou, the company said in 2017.

Other players went with a rural and small-town play early on. Pinduoduo, an emerging ecommerce startup that’s close on the heels of Alibaba and JD, gained a first-mover advantage in these less developed regions by touting cheap goods. Kuaishou, a Tencent-backed video app that rivals TikTok’s Chinese version Douyin, has proven popular in the hinterlands as farmers embrace the app to showcase the country life and sell produce through live streaming.

Apple could be working with Goldman Sachs on a credit card

According to a new report from the WSJ, Apple and Goldman Sachs are partnering on a different kind of products for both companies — a credit card. The Mastercard-based card would be focused on Apple Pay and feature some deep integrations in iOS.

This card could launch later this year in the U.S., which would coincide with the next iPhone. An Apple credit card would be a good way to take a bigger cut on Apple Pay transactions. Instead of splitting fees between the card issuer, the card network and Apple, Apple would get a portion of the fees for the card issuer.

It could also be a way to evangelize Apple Pay. While most cards are now compatible with Apple Pay in the U.S., many people still don’t think about paying with their iPhone or Apple Watch.

This is also uncharted territory for Goldman Sachs . According to the WSJ, the new card would represent Goldman’s first card. The company could be investing as much as $200 million to build a support team and the IT infrastructure to handle payments. You could expect a cash back on some purchases.

More interestingly, Apple could also be working on an Apple Wallet overhaul for this credit card. You would be able to set up spending goals (like the rings in the Activity app), get notifications about your spending habits (like Screen Time) and track your rewards. It’s unclear if Apple plans to open up those new features to other banks.

By partnering with Apple, Goldman Sachs would get a great distribution channel. And by launching a card, Apple would prove once again that, given enough time, all companies eventually become banks.

On-demand logistics startup Lalamove raises $300M for Asia growth and becomes a unicorn

Lalamove, a Hong Kong-based on-demand logistics startup, has closed a $300 million Series D round as it seeks expansion across Asia. In doing so, the company has officially entered the unicorn club.

Founded in 2013 by Stanford graduate Shing Chow, Lalamove provides logistics and delivery services in a similar style to ride-hailing apps like Uber but it is primarily focused on business and corporate customers. That gives it more favorable economics and a more loyal customer base than its consumer-focused peers, who face discount wars to woo fickle consumers.

This new round is split into two, Lalamove said, with Hillhouse Capital leading the ‘D1’ tranche and Sequoia China heading up the ‘D2’ portion. The company didn’t reveal the size of the two pieces of the round. Other investors that took part included new backers Eastern Bell Venture Capital and PV Capital and returning investors ShunWei Capital — the firm founded by Xiaomi CEO Lei Jun — Xiang He Capital and MindWorks Ventures .

The deal takes Lalamove to over $460 million raised to date, and it follows a $100 million Series C that closed in late 2017. Lalamove isn’t disclosing a valuation but Blake Larson, the company’s head of international, told TechCrunch that it has been “past unicorn mark for quite some time [but] we just don’t talk about it.” That figures given the size of the round and the fact that Lalamove was just shy of the $1 billion mark for that Series C.

The Lalamove business is anchored in China where it covers over 130 cities with a network of over two million drivers covering vans, cars and motorbikes.

Beyond China, Lalamove is present in its native Hong Kong — where Uber once briefly tried a similar service — Taiwan, Vietnam, Indonesia, Malaysia, the Philippines and Thailand, where it works with popular chat app Line. All told, it covers 11 cities outside of China and this new capital will go towards expanding that figure with additional city launches in Southeast Asia and entry to India.

“If we do this well, then we are in countries that are more than half the world’s population,” Larsen said in an interview, although he didn’t rule out the potential for Lalamove to expand beyond Asia in the future.

There are also plans to grow the business in mainland China in terms of both geography and new services. Already, Lalamove has begun to offer driver services, starting with financing packages to help drivers with vehicle purchasing, and it is developing dedicated corporate offerings, too.

Lalamove CEO Shing Chow started Lalamove in late 2013, his past roles have included time with Bain & Company, a number of startup ventures — including a Hong Kong-based skin center — and a stint as a professional poker player

Overall, the business claims to have registered 3 million drivers to date and served more than 28 million users across all cities. With its headquarters in Hong Kong, it employs some 4,000 people across its business.

Rival GoGoVan exited through a merger with China-based 58 Suyun in 2017, at a claimed valuation of $1 billion, but Lalamove has remained independent and stuck to its guns. Larson said that already it is profitable in “a significant amount” of cities and typically, he said, the blueprint is to reach profitability within two years of opening a new location.

“The focus has always been on sustainable growth and we’re very strong on the cash flow front,” the former Rocket Internet executive added.

Larson and Lalamove have been very forthcoming in their desire to go public in Hong Kong, noting so publicly as early as 2017 at a TechCrunch China event in Shenzhen. That desire is still evident — “we’re very proud to be from Hong Kong and Hong Kong would be a good place for an IPO,” Larson said this week — but still the company said that it has no particular plan on the cards, despite its consumer-focused peers Uber and Lyft lining up IPOs in the U.S. this year.

“We don’t spend maybe even five minutes a year talking about it,” Larsen told TechCrunch. “The discussion is really ‘Let’s make sure we’re IPO ready’ because sometimes there are macroeconomic conditions you can’t control.”

Clearly, investors are bullish and it is notable that Lalamove’s new round comes at a time when many Chinese companies are downsizing their staff, with the likes of Didi, Meituan and JD.com announcing cuts and refocusing strategies in recent weeks.

“[Lalamove CEO and founder] Shing is a role model for Hong Kong’s new generation of innovative entrepreneurs,” said Sequoia China founder and managing partner Neil Shen. “Raised in Hong Kong and educated at Stanford University, Shing returned and plunged himself in the entrepreneurial wave of ‘Internet Plus,’ becoming a figure of entrepreneurial success.”

German insurance giant Allianz increases its VC fund to $1.1 billion

Allianz X, the venture capital arm attached to German insurance giant Allianz, has increased the size of its fund to €1 billion, around $1.1 billion, according to an announcement made today. The fund was initially €430 million, or around $490 million, when it launched in 2016.

This new injection comes directly from parent Allianz SE, the 124-year-old insurer which did €130 billion ($150 billion) in revenue last year, and it makes Allianz X one of the largest active startup investment vehicles in Europe. While it is anchored in Europe, the fund’s investment thesis and focus is very much a global one with a focus on verticals including fintech, health, mobility, data and cybersecurity.

It has made 15 deals to date with a focus on growth-stage investments in startups such as emerging market-focused microinsurance company BIMA, Southeast Asian ride-hailing unicorn Go-Jek, U.S-based capital marketplace C2FO and European challenger bank N26.

Allianz X, which initially began as an in-house incubation venture, is now looking to go after more of the same with its enlargened kitty but it also plans to get to work with its existing portfolio of companies.

“Since shifting our strategy, we have built a great portfolio in which many companies have already developed successful partnerships with Allianz’s business units. We are very excited about raising our investment budget to €1 billion and will use the funds entrusted to us to both strengthen our portfolio and build strong, global platforms that create new businesses for Allianz,” Dr. Nazim Cetin, CEO of Allianz X, said in a statement.

Beyond potentially supplying more capital to its existing investors — it isn’t clear whether Allianz X is a part of the new financing round that Go-Jek is raising, for example — the fund is keen to identify areas where its business units can add value both for the portfolio startups and the Allianz business itself. And, with a network of offices that spans more than 70 countries, there’s plenty of scope for collaboration.

In Indonesia, for example, Allianz has worked with Go-Jek to offer insurance to the ride-hailing company’s drivers that is payable at an affordable daily rate. That, both of them claim, has helped give many families health insurance for the first time whilst of course growing the Allianz Indonesia business by tapping into Go-Jek’s driver base which, the company says, covers “millions” of Indonesians. That’s one part of Go-Jek’s fintech strategy, which includes relationships with some 28 financial institutions to provide access to financial services and other products.

Indeed, Allianz X said it has developed dedicated operational capabilities to replicate that type of collaboration across its portfolio.

“Our work with portfolio companies is focused on developing mutually beneficial strategic partnerships between the portfolio company and one or more Allianz operating entities and global business lines. Each investment has a dedicated team at Allianz X that assists the company with joint corporate development initiatives and implements them alongside the Allianz business unit,” a spokesperson told TechCrunch.

Coinbase buys blockchain intelligence startup to boost security and new asset discovery

Coinbase, the world’s most valuable crypto company, is gearing up to add more cryptocurrencies to its exchange thanks to its latest acquisition.

We already know the firm wants to a glut of new crypto assets, but today it announced it has snapped up blockchain intelligence startup Neutrino in an undisclosed deal that seemed destined to help further that goal.

Based in Italy, Neutrino helps map blockchain networks, and in particular crypto token transactions, to pull in information and insight. With the rise of thefts, that includes a major focus on services for law enforcement agencies to track stolen digital assets while it also includes tracking ransomware and analyzing ‘darknets.’ Other solutions include tracking services for investment and finance companies to help find rising tokens and assets, an area Coinbase could clearly capitalize on.

The company and its eight staff will relocate to Coinbase’s London office from where they will continue to service clients whilst becoming part of the Coinbase business. Initially, the startup’s primary remit will be security and theft-prevention but further down the line its smarts and technology will put to discovering and analyzing new asset listings for Coinbase.

“By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors. It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations,” Coinbase’s engineering director Varun Srinivasan wrote in a brief blog post announcing the deal.

Srinivasan added that Neutrino’s technology is “the best we’ve encountered in this space.”

Coinbase has raised more than $500 million from investors, including its most recent $300 million Series E round in October that gave it a valuation of $8 billion. The purchase of Neutrino is its eleventh acquisition to date, according to Crunchbase. Most of those deals have tended to be talent-led deals as Coinbase seeks to suck up more expertise and engineering skills to support its growing business.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Visa and Mastercard could raise interchange fees

According to a report from the WSJ, Visa and Mastercard are considering raising interchange fees on card transactions in the U.S. Visa and Mastercard generate most of their revenue from these small processing fees, and it could have implications for merchants and fintech startups.

When you pay with a credit or debit card, merchants pay a small fee to the bank that issued this card. Your bank then pays an even smaller fee to the company that operates the card network.

In most cases, card issuers and card networks are separate companies. For instance, Chase issues a Visa card, Chase gets an interchange fee on every card transaction, and Chase pays a tiny fee to Visa. Some companies also operate a network and issue cards themselves, such as American Express.

The WSJ says that Mastercard and Visa will raise their fees in April — Visa confirmed the change. While fees on each transaction are nearly unnoticeable, they add up quite rapidly. They generate a ton of revenue for Visa and Mastercard, and they represent significant costs for large merchants.

It could become a consumer protection issue as customers often end up paying higher prices because of those fees. While Visa and Mastercard mostly negotiate with financial institutions, those financial institutions still want a cut on interchange fees. That’s why those fees are passed on to the merchants.

Merchants take into account the fact that a large portion of their customers are going to pay with a card. They end up raising prices for everyone, even if you pay using cash, a debit card or a credit card.

Fees on credit cards are generally higher and are the reason why points and rewards exist. Banks attract customers with advantageous reward systems because they want to get your interchange fees. Interchange fees are also much higher in the U.S. than in Europe because there has been more fraudulent activity — the U.S. has switched to chip-and-pin cards years after Europe.

An increase in interchange fees could also affect consumer fintech startups. Many challenger banks have been relying on interchange fees as one of their revenue streams. That’s part of the reason why European fintech startups, such as N26, Monzo and Revolut, have been looking at the U.S. as a potential market. There’s an entire industry built on top of those interchange fees.

Atrium, Justin Kan’s legal tech startup, launches a fintech and blockchain division

Atrium, the legal startup co-founder by Justin Kan of Twitch fame, is jumping into the blockchain space today.

The company has raised plenty of money — including $65 million from A16z last September — so rather than an ICO or token sale, this is a consultancy business. Atrium uses machine learning to digitize legal documents and develops applications for client use, and now it is officially applying that to fintech and blockchain businesses.

The division has been operating quietly for months and the scope of work that it covers includes the legality and regulatory concerns around tokens, but also business-focused areas including token utility, tokenomics and general blockchain tech.

“We have a bunch of clients wanting to do token offerings and looking into the legality,” Kan told TechCrunch in an interview. “A lot of our advisory work is around the token offering and how it operates.”

The commitment is such that the company is even accepting Bitcoin and Bitcoin Cash for payments through crypto processing service BitPay.

While the ICO market has quietened over the past year following to huge valuation losses market-wide, up to 90 percent in some cases with many ICO tokens now effectively worthless, there’s a new anticipation around regulatory-friendly security token offering (STO) options. Coinbase, for one, has backed STO platforms and its CEO Brian Armstrong has spoken of his belief that the cap table of the future is tokenized, allowing company tokens to be freely traded worldwide.

According to Armstrong, Coinbase could potentially host “millions” of STOs in the future.

If even a fraction of that number is to exist, companies will need advisors to help with structure and regulatory compliance. Many legal firms are already making a proverbial killing and, just like its core business, Atrium wants to use its tech-centric platform to offer a more efficient and cheaper alternative to expensive legal firms.

“People are doing private offerings, but the number of ICOs has definitely dropped,” Kan admitted. “Interest, though, has continued to grow, as people try to navigate this new regulatory regime. We spend a lot of time trying to focus on only taking on high-quality clients.”

Atrium Fintech and Blockchain also includes fintech work — as the name implies — but blockchain is likely to account of the majority of client work, so said Ross Barbash, who leads the 10-person team.

“We currently work with a mix of companies across the U.S, with some in Asia and Europe,” he said.

Members of Atrium’s fintech and blockchain team

The fintech work has tended to be more U.S-centric at this point, Barbash said, because Atrium’s expertise is particular to licenses at federal and state level in America.

Regulation is, of course, far trickier when it comes to blockchain as it remains a work in progress. The SEC has made periodic statements, often taking legal action to establish expectations and boundaries as it decides exactly how to respond to the explosion of blockchain and cryptocurrencies.

“The level of challenge and regulatory frameworks have evaluated blockchain analysis to business level” work rather than simply legal counsel, Barbash explained. “We’re working closely with some regulators to better understand some elements of the ecosystem.”

“With the shift from HODL to BUIDL, we are finding it easier to identify and collaborate with the teams that both have the necessary dev chops and are committed to compliance,” he added via a statement.

Some of Atrium’s disclosed clients include credit card startup Final (which was bought by Goldman Sachs) and solar financial services firm Wunder Capital.

More generally, Kan said that the blockchain and fintech division serves as a blueprint for how Atrium will go after specific verticals. He said that the startup, which now has 150 staff, will spin out different units for specific legal practices.