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Arive raises $20M for an instant delivery service beyond groceries and essentials

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Arive raises $20M for an instant delivery service beyond groceries and essentials

Instant purchase and delivery of food and other essentials was one of the big bubbles of opportunity in the world of e-commerce in the last year, with dozens of startups big and small emerging and scooping up funding to build out businesses to bring items like groceries, toilet paper and Tylenol to people’s doors in 30 minutes or less. Now a startup called Arive that’s applying this concept to the wider world of consumer goods in a Prime Now-style service — partnering with premium stores and brands to sell and deliver items like Apple electronics and Bose headphones, Lululemon active wear, furniture and beauty and bath products and Van Moof electric bikes, and then delivering items via its own courier service —  is announcing a Series A of $20 million to see if the idea finds traction beyond essentials.

The funding is being led by Balderton Capital, with Global Founders Capital (the firm connected to Rocket Internet’s Samwer family), Burda Principal Investments, La Famiglia and 468 Capital also participating. (La Famiglia and 468 Capital are repeat backers of Munich-based Arive, both having invested in the seed round for the company, which is not to be confused with the mortgage startup of the same name in the U.S.)

Arive’s funding, and list of backers, is notable in that it’s based on a pretty limited run so far. The startup launched only four months ago and is currently active in just four cities in Germany — Berlin, Hamburg, Munich and Frankfurt — although now the idea will be to use the investment to expand further across the country and to start considering which other markets to tackle next.

The reason for the vote of confidence is that so far, the numbers look promising. Arive is not disclosing how many customers it has or what its revenues are looking like, but it notes that the average order size is between €50 and €100 ($56 and $113) across some 1,000 SKUs, with the average basket containing between one and four items. That presents what Arive is doing as a very different proposition to what, say, a GoPuff or Getir is hoping to achieve with its instant delivery model, essentially replacing the weekly grocery shop with multiple baskets delivered to one’s door.

“It’s not just about being the next quick commerce vertical but building the next generation of e-commerce,” said Maximilian Reeker, who co-founded Arive with Linus Fries (the two co-lead the company). He described that next generation like this: “Very convenient delivery of between 30 and 60 minutes, connecting people to local stores with a bike-based service, in an app optimized for the phone.” All of its couriers are employed by the company, either full-time or part-time.

Arive has up to now split the model into three parts, providing consignment, wholesale and, in the next 2-3 months, marketplace options for sourcing supply. Fries said that currently the wholesale part accounts for the largest part of its business and sales.

Beyond that, white label services — where Arive might sell its backend technology and delivery infrastructure to third-party retailers to build their own instant delivery services — is another area that the company is considering, Fries said. This could be a very interesting opportunity in areas such as fashion: typically online sales of clothes have been challenged by issues of sizing and dealing with returns, which make for a high barrier of entry for a company like Arive without making extensive and focused investments to address them. What it could do, however, is provide its technology to fashion brands and retailers that have, who are considering ways of getting apparel faster to would-be online buyers.

Meanwhile, although it’s taking a different approach in instant delivery by eschewing groceries and FMCG essentials and focusing on higher-ticket slower-moving consumer goods, Arive is still operating very much with those grocery delivery startups in mind for another reason.

Reeker told me that Arive actually relishes the oversupply of these startups in certain markets — indeed, the bubble has definitely started to burst for some of these startups, as they get snapped up by much larger and highly capitalized rivals looking to expand to new geographies — because they become a signal for where Arive should be considering to expand to next.

“We want to go to more places in Germany and expand internationally, and while we haven’t decided which cities, we looking at those where existing grocery plays are live,” said Reeker. “The UK, France, they are all interesting. Having those grocery companies there is an advantage for us because it’s evidence of the consumer shift that has taken place. They are already used to getting their food quickly, which is the first step.”

Arive is not the first company to have thought of building a service around instant delivery of virtually any kind of item a person might like to have without leaving their homes to buy it. This was basically the premise behind Amazon Prime Now, which the e-commerce giant launched the service in 2014. Pointedly, although Amazon expanded it to several markets, eventually it discontinued the standalone app and branding it had built for Prime Now, which now exists as a faster-delivery option for some of the items that it sells via Prime.

The message there could be interpreted in two ways. It could point to challenges for scaling something like a fast-delivery service without also providing a wider range of options that offer cheaper options and longer delivery times to customers put off by the premium that comes with instant.

Or, it could point to how there remains an opportunity for a smaller and more focused company to get the model right, understanding that the market has matured in the last eight years and consumers are not only more willing to shop online than ever before due to Covid-19, but have focused their expectations of how that experience should more closely mirror the instant-gratification of shopping in person.

Investors are willing to bet that the two co-founders — which hatched the idea of Arive while at business school — have a shot in building something fit the latter of those.

“Linus, Max, and the entire team at arive are challenging e-commerce conventions with energetic execution and an acute sensitivity to the priorities of modern brands,” said Colin Hanna, partner at Balderton Capital, in a statement. “Using light electric vehicles to rapidly fulfill orders leaves a lighter footprint on our planet and ensures that customers are home to receive goods they’ve purchased online, avoiding costly failed deliveries. The team is also committed to building their UX in a way that protects, rather than erodes, the value of the brands they are lucky to work with. Finally, high basket sizes and no wastage means the company has a much stronger path to a sustainable business model over the long run.  Balderton is fortunate to be backing arive as it scales rapidly across Europe.”

Source: Tech

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Spendesk is the fifth French startup to reach unicorn status this month

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Fintech startup Spendesk is announcing that it has raised an extension to its Series C round. Tiger Global is investing $114 million (€100 million) in the startup. Following today’s funding round, the company says that is has reached a valuation of more than $1.14 billion (more than €1 billion).

In other words, Spendesk is a new unicorn in the French tech ecosystem. Funding news has been accelerating over the last few months in France. In January alone, five startups announced that they have crossed the threshold to reach unicorn status — PayFit, Ankorstore, Qonto, Exotec and Spendesk.

Back Market, an e-commerce marketplace focused on refurbished smartphones and electronics devices, has also raised a mega round and reached a $5.7 billion valuation.

Let’s go back to Spendesk. The startup offers an all-in-one corporate spend management platform for medium companies in Europe. Originally focused on virtual cards for online payments, the company has expanded its product offering to tackle everything related to corporate spending.

Spendesk customers can order physical cards for employees, team members can use the platform to pay outstanding invoices, file expense reports, manage budgets and generate spending reports. By offering everything in a single service, Spendesk wants to simplify accounting and approvals in general so that money moves more freely.

The startup defines its platform as a “7-in-1 spend management solution”, meaning that Spendesk is no longer just a product that lets you order debit cards for your employees.

“We have had this goal since the beginning — we really want to become this platform, this operational system to manage your spending,” co-founder and CEO Rodolphe Ardant told me. “When we started working on the product, we looked at each use case and designed the right workflow for that.”

In particular, Spendesk helps you formalize your internal processes. You can define team budgets, set up complicated approval workflows for expensive payments, automate some pesky tasks, such as VAT extraction.

“We target mid-market clients. Those are customers with 50 to 1,000 employees. We have a few clients that are bigger than that and a few clients that are smaller than that,” Ardant said.

And the company currently has 3,500 clients — around half of them are based in France while other clients are mostly based in Germany and the U.K. Clients have spent €3 billion through Spendesk in 2021 alone.

With its central positioning in the financial stack, Spendesk needs to interface perfectly with other financial tools — banks on one side and ERP products on the other side.

The startup currently supports many of the popular accounting tools used by European companies, such as Xero and Datev. Spendesk customers can also export transaction batches and import them into Sage, Cegid and other accounting software solutions.

Spendesk is also working on automating the integrations with your bank accounts, which could be particularly useful for companies with multiple bank accounts. For instance, you could imagine setting up a rule that automatically triggers a transfer between your German bank account and your Spendesk account when you want to pay a German supplier.

Image Credits: Spendesk

Spend management in Europe

Spendesk isn’t the only spend management solution in Europe. There are some competitors, such as Pleo, which recently reached a $4.7 billion valuation, and Soldo — another well-funded competitor as it has raised $180 million last year.

In the U.S. as well, companies like Brex and Ramp have reached sky-high valuations. And yet, Spendesk doesn’t think it has the same positioning as American startups.

“On the American market, it shouldn’t be called the spend management industry — it’s the corporate card industry. Players like Brex and Ramp position themselves as a payment method,” Spendesk co-founder and CEO Rodolphe Ardant told me. “Europe’s corporate culture is a culture of debit — not credit. We don’t provide payment methods, we provide a process.”

It’s a slight difference in product positioning, so it’s going to be interesting to see if a European spend management startup can successfully enter the U.S. and vice versa.

When it comes to business model as well, Spendesk considers itself as a software-as-a-service company with recurring subscriptions. The startup didn’t want to share any hard numbers for its revenue. Its CEO just said that Spendesk’s revenue “more than doubles every year.”

With today’s funding round, Spendesk plans to triple the size of its team over the next two years. The company plans to have 1,000 employees by the end of 2023.

Source: Tech

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Crypto.com expands venture arm to $500 million to back early-stage web3 startups

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Crypto.com, a popular cryptocurrency exchange, has extended its venture arm’s fund size to $500 million as it looks to more aggressively back early-stage startups to help the nascent ecosystem grow, following similar moves by rivals Binance, Coinbase and FTX.

The broadening of Crypto.com Capital comes less than a year after the Singapore-headquartered firm unveiled its maiden fund of $200 million. The fund, unlike those of many of its rivals, has no LPs (meaning, it’s fully financed by the firm’s balance sheet.)

The maiden fund, whose individual checks run up to $10 million in size, has been so far deployed to back about 20 startups including YGG SEA, multi-chain crypto portfolio tracker DeBank, cross-chain token infrastructure Efinity and Ethereum scaling solution Matter Labs.

Crypto.com will continue to focus on backing early-stage startups, said Jon Russell, who joined the firm as a general partner this month, in an interview with TechCrunch.

With the fund, Crypto.com is broadly focusing on gaming, decentralized-finance and startups innovating on cross-chain solutions. But he cautioned that the industry could change and expand, as it has in recent years, to areas “we don’t know about,” hence the firm is keeping an eye out on everything.

Tuesday’s announcement also further illustrates the growing involvement of cryptocurrency exchanges in being the rainmaker – and beneficiary – of the ecosystem which encompasses the industry in which they operate.

FTX, which has backed over 15 startups, last week announced a $2 billion crypto fund. Its founder, Sam Bankman-Fried, also owns Alameda Research, a venture firm that has backed close to 100 web3 startups.

Coinbase Ventures, the investment arm of the only crypto exchange that is publicly traded, and Binance, the world’s largest cryptocurrency exchange by trading volume, are also among the most prolific investors in the web3 space.

Venture investment in crypto / web3 in 2021 by category (Image credits: Galaxy Digital)

The funding activity in the space, even as most of the aforementioned names often co-invest in startups, is at an all-time high. VCs invested more than $33 billion in crypto/web3 startups in 2021, more than all prior years combined, Galaxy Digital, another prolific investor in the space, wrote in a recent report.

“Valuations in the crypto/blockchain space were 141% higher than the rest of the venture capital space in Q4, highlighting a founder-friendly environment and the intense competition among investors for deal allocations,” the report added.

Scores of venture capital firms have also raised new funds for their crypto investments. Just last year, Andreessen Horowitz added a $2.2 billion crypto fund, Paradigm unveiled a $2.5 billion fund, and Hivemind Capital Partners announced a $1.5 billion fund. Katie Haun, who co-led a16z’s $2.2 billion crypto fund, has left the firm to launch her own crypto-focused fund.

Russell – a former journalist who previously had stints at TechCrunch, The Next Web, and The Ken – said Crypto.com is backing startups to help the ecosystem grow.

“If you’re in the industry, it’s in your interest to help companies grow in the ecosystem and the ecosystem itself to grow,” he said. (Worth pointing out that Solana, Avalanche, Polkadot — as well as some of their major investors — are also aggressively backing startups that are building applications for the native blockchains.)

The startups Crypto.com backs are under no obligation to list their tokens on Crypto.com over any of its rivals or offer the exchange any other preferential treatment, he said. The exchange team similarly doesn’t have a soft spot for the investment arm’s portfolio firms, he added.

(What’s up with the career move? “I’ve been crypto curious for a number of years but I wasn’t gasping to dive in full-time. This project appeals to me because Crypto.com is ambitious but yet it does things the right way. There’s certainly a lot of hype and hot air in crypto and web3 right now, but it’s impossible to ignore the talent that’s pouring into the industry,” he said.)

Crypto.com, which started its life as a blog of professor Matt Blaze (who sold the domain to the crypto exchange), has aggressively expanded in the past year as it looks to court more users. The Singapore-headquartered firm last year agreed to pay more than $700 million for the naming rights of the Staples Center in Los Angeles. The downtown Los Angeles complex has been rebranded as Crypto.com Arena for the next 20 years.

The firm, which bills itself as the “fastest-growing” crypto exchange, said at the time of the announcement that the move is positioned to make cryptocurrencies mainstream. Crypto.com, which processes trade volumes of over $2.5 billion every day, also teamed up with Hollywood star Matt Damon last year to promote the brand and cryptocurrencies.

The Damon-starring ad equated buying crypto tokens and NFTs to one of the greatest and boldest accomplishments in the history of humankind. Hyperbole, to be sure, but having the most mainstream American actor as Crypto.com’s celebrity sponsor has certainly helped bring the trading platform, and all that it sells, into the mainstream. The ad went viral and also attracted criticism for being cringeworthy.

Source: Tech

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Focused on smaller cities, Vietnamese social commerce startup Mio raises $8M Series A

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Mio, the Vietnamese social commerce platform, has raised an $8 million Series A, less than a year after announcing its seed round. The funding was led by Jungle Ventures, Patamar Capital and Oliver Jung, with participation from returning investors GGV, Venturra, Hustle Fund, iSEED SEA and Gokul Rajaram.

TechCrunch first covered Mio at the time of its $1 million seed funding in May 2021. Founded in 2020, Mio is a group buying platform that focuses on selling fresh produce and groceries in Tier 2 and 3 cities in Vietnam. The company is able to offer next day delivery because it built a logistics infrastructure that enables it to send produce directly from farms to customers.

The Series A brings Mio’s total raised to $9.1 million, and will be used to expand its logistics and fulfillment system, enter new areas in Vietnam and add new product categories like fast-moving consumer goods (FMCG) and household appliances.

Mio co-founder and chief executive officer Trung Huynh said that since TechCrunch first covered Mio seven months ago, it has achieved 10x gross merchandise value growth, a 10x increase in agents, or resellers, and grew its team from 60 people to 240. It now fulfills more than 10,000 pieces of fresh produce per day, operating in Ho Chi Minh, Thu Duc, Binh Duong, Dong Nai and Long An, with plans to expand into northern Vietnam.

The numbers “strengthened our conviction in this model and its potential,” he said. “We need fresh capital to accelerate hiring, product development and supply chain to keep up with the pace of growth as we deepen our presence in existing geographies and expand to new provinces.”

Mio is able to offer next day deliveries because its vertically integrated mayor layers of the value chain, including procurement, warehousing, order sorting and bulk delivery. The startup owns the majority of its logistics infrastructure and uses its own fleet of couriers. Its ability to delivery fresh produce directly from farms to customers in less than 16 hours contributed to higher customer retention and growth, Huynh said, and it will continue to shorten delivery times. .

Mio resellers are called Mio Partners. Huynh said one of the driving factors behind Mio is targeting the right people for the program, or “housewives and stay-home-moms in lower income regions who love sharing value-for-money products to their social circle of friends.”

They aggregate orders, usually from friends and family, and orders are delivered to them in batches for distribution. The startup claims Mio Partners can make up to $400 a month, including a 10% commission on each order and additional commissions based on the monthly performance of other resellers they referred to the program.

“There is a strong possibility” that Mio will expand beyond Vietnam, Huynh said, “but will only be considered at a more appropriate time after we successfully built our playbook for Vietnam.”

Source: Tech

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