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Microsoft is to acquire a 4% stake in the London Stock Exchange Group (LSEG), the company that owns the London Stock Exchange as well as a several other businesses including financial market data company Refinitiv which LSEG acquired from a Blackstone/Thomson Reuters consortium last year for $27 billion.

Microsoft’s stake, which it bought from the same Blackstone/Thomson Reuters consortium,constitutes part of a bigger 10-year partnership, which includes a contractual commitment for LSEG to spend a minimum of $2.8 billion on cloud computing services. This will involve LSEG migrating its data platform and “other key technology infrastructure” over to Azure, while the Workspace data and analytics product it procured as part of its Refinitiv acquisition last year will be integrated with core Microsoft applications including Teams and the broader Microsoft 365 software suite.

This initial partnership will create a single product spanning data, analytics, and collaboration, and could go some way toward helping LSEG challenge the likes of Bloomberg as the go-to platform for finance and investment workers.

The integration will allow all LSEG customers to collaborate with each other through Teams, and generate models and graphs through connecting LSEG content and Excel, for example. But the scope of the partnership seems fairly far-reaching, with plans to mesh Microsoft’s cloud-based machine learning smarts with LSEG’s analytics and modelling to “co-develop a new suite of solutions” for financial institutions, the companies said.

So this is a win-win for both firms: a huge cloud contract for Microsoft that opens it to Refinitiv’s 40,000 customers, as well as an equity investment in a major Bloomberg challenger. And for LSEG, it now has the technological and financial backing of one of world’s biggest public cloud companies.

“Bringing together our leading data sets, analytics, and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies,” LSEG CEO David Schwimmer said in a press release.

Microsoft to acquire 4% stake in London Stock Exchange Group as part of 10-year cloud partnership by Paul Sawers originally published on TechCrunch

Individuals or businesses buying furniture in Africa can purchase from local furniture stores or global furniture retailers like IKEA. But both options have pros and cons; for the latter, local furniture stores may lack the quality that clients need, while global retailers, in addition to taking several months to ship their products to Africa, can be too pricey.

Taeillo, a Lagos-based startup innovating around these issues relating to time, quality and cost via its online furniture e-commerce store, has raised $2.5 million in “expansion” funding from Aruwa Capital, a Nigeria-based early-stage growth equity and gender-lens fund.

In a statement, Taeillo said it is an alternative for customers who incur high costs when they import furniture (combined with an unstable exchange rate) and have to endure long wait periods of 3-6 months before the furniture is delivered. “… we provide customers with aesthetically pleasing furniture pieces at a fraction of the importation price and with a 50% reduction in delivery time to about 4-8 weeks,” it continued.

Founded in 2018 by Jumoke Dada, the online furniture seller sources raw materials from local suppliers and manufactures furniture pieces from sofas and beds to chairs and tables, which it sells to individual customers and businesses. The company, which doubles as a manufacturer and retailer, can be likened to Wayfair and now-defunct Made.com. However, because it serves an entirely different market, Taeillo has had to be authentic with its product offerings by infusing cultural elements (it refers to them as Afrocentric furniture).

When Dada launched the platform, its target audience was solely businesses. The initial product brought in $165,000 in seed funding from investors such as CcHUB Growth Capital, Montane Capital and B-Knight. However, in mid-2020, during the pandemic, Taiello, leaning on investors’ guidance and citing a chance in the market after several walk-in stores halted operations, pivoted to a direct-to-consumer approach.

“It was more or less like opportunity met preparation because, at that time, many people were at home, and the leading furniture brands were not online to serve them,” CEO Dada told TechCrunch. “Traditional showrooms were locked up too, so that was an opportunity for brands like us to position ourselves and prove that they could buy furniture online without necessarily going into showrooms.”

The decision proved a masterstroke; up until its pivot, Taeillo had sold under 200 pieces of furniture in Nigeria. Its pivot came with the launch of the “Amakisi” table (₦29,999/~$85) — a work table and one of its best-selling products — which quickly gained popularity and sold over 1,000 pieces in six months. Since then, the online furniture manufacturer and retailer has expanded into 10 additional product categories, moved into Kenya and shipped more than 10,000 pieces of furniture to over 5,000 customers in both countries.

In 2021, Taeillo raised a $150,000 bridge round from CcHUB Syndicate as it tripled its revenue from the previous year. But that growth and progress didn’t come without headaches. Due to the popularity of some of its furniture within the Nigerian millennial and working-class demographic, Taeillo has struggled to meet demand; on various occasions, taking months to deliver products. Though it manages its supply chain to an extent and manufactures about 70% of its products, the startup also relies on third-party manufacturers who make components before they are sent to Taeillo’s warehouse, assembled and shipped to customers. According to Dada, the reasons behind extended wait times – with the company producing as many as 800 pieces of furniture monthly – are due to working with these third-party providers, including suppliers and logistics services.

“Sometimes, as a modern business, you must deal with crude suppliers. But recently, we’ve had to change our suppliers to shorten the time we get the materials. Right now, we’re also working around strategic partnerships with third-party logistics companies and might set up a logistics arm to help us improve our deliveries.” said the CEO on how Taeillo plans to deal with the long delivery times while also admitting that the online furniture manufacturer and retailer could also improve how it handles production.

With the funding, Taeillo intends to reduce delivery times to about 3-5 days by pre-manufacturing some of its best-selling furniture (for instance, the “Amakisi” table) instead of waiting till customers make orders before starting production. The investment will also help scale its “Pay with Flexi” product, where shoppers can buy furniture and pay in installments; over 200 people have used it. Then there’s its augmented reality and virtual reality (AR/VR) tech (powering virtual showrooms), which the startup intends to double down on marketing-wise.

“We’ve done a lot of work with less. So now, we want to get outstanding talent that will take us to the next growth stage. Also, we want to increase our market share, optimize operations, hack our supply chain and ensure that customers have a great experience,” expressed the chief executive of the online furniture retailer, who made over $1 million in annual revenue in 2021.

Adesuwa Okunbo Rhodes, founder and managing partner at sole investor Aruwa Capital, said investing in Taeillo aligns with one of her firm’s investment objectives: backing women founded- and led startups. Last week, the three-year-old growth equity firm, which is one of the few founded and run by an African woman, closed a $20 million+ fund from Visa Foundation and other LPs to invest in 10 startups across fintech, healthcare, renewable energy and essential consumer goods serving the female population.

“In line with Aruwa’s gender lens investing strategy, Taeillo is founded and led by a woman and has a 50% female representation in its management team,” she said in a statement. “… The company [Taeillo] has maintained its innovative model in a traditional brick-and-mortar industry, creating a unique value proposition for its customers in a fast-growing, underserved market. By leveraging technology in its value chain, Taeillo has been able to achieve exponential growth in less than 2 years, achieving results that take traditional furniture companies decades to achieve.”

Nigerian startup Taeillo raises funding to scale its online furniture e-commerce platform by Tage Kene-Okafor originally published on TechCrunch

After years of outsourcing and offshoring manufacturing to countries with cheaper labour and bigger production ecosystems, the U.S. and Europe are on a mission to bring some of that industrial work back to its own shores. Today, a startup that believes it can help with that shift is announcing some funding. Robco, a Munich-based startup that has built a platform for designing low-cost modular robots for small and medium industrial businesses, has picked up €13 million (abut $13.8 million). The round — a Series A — is led by Sequoia, with Kindred Capital, Promus Ventures and Torsten Reil, Christian Reber, and Daniel Dines all also investing.

Roman Hölzl, the CEO of Robco who co-founded the company with Paul Maroldt and Constantin Dresel, said the plan will be to invest the funds both in expanding the capabilities of the existing modules and to continue adding on more clients to its modular-based ‘robotics as a service’ model.

Robco’s current offering is based around three components that focus on lathe turning, laser engraving and palletizing, with its business model based around clients ordering what they need made and that in turn being delivered as a service to them — the robots themselves are not purchased and stay on Robco’s balance sheet with the idea that they can be reconditioned and reused for other clients when needed. The plan is to bring on more modules in milling and quality inspection, as well is to look at further geographical expansion, for example into the U.S. market.

Even with the hundreds of millions of dollars that have been poured into a variety of industrial automation and robotics companies over recent years, Robco believes that it has found a niche in the market by focusing on tricky tasks and building cost-effective solutions to address the needs of smaller manufacturers. In short, SMBs might need to scale up productivity at times but — either due to the economics of the need, or labor shortages, or both — are unable to hire people to fill those jobs on a permanent basis. This is an area that those making larger machines for bigger industrial clients had yet to address, he said.

“When we think about the market we think there are two categories that have dominated,” Höltzl said in an interview. “The first is component manufacturers, and the other is a fragmented market of system integrators building costly and craftsman-like robots where you pay $250k per solution. No company yet has crossed the chasm to [provide] great, delightful technology that could be deployed in days or months. We are not selling robots nor software. We are basically offering an automation service, and solving a concrete problem.”

Höltzl describes the traditional approach of hiring machine operators as “the classic status quo” — something he saw first-hand in his parents’ own small factory, which was the inspiration for founding the company in 2020 — not, as you might have thought, Covid-19 and the pressure it put on in-person work, although that certainly gave it a strong current on which to generate interest and eventually sell its ideas into the market. One reason was that many factors had to lay off rather than just furlough their staff, and then when it came time to get back online, they couldn’t fill out tasks and some of their costly manufacturing machines just sat vacant, and that was before considering the weekends and evenings when staff that was there didn’t work. He cites stats that say there are around 2 million vacant labor positions in Europe, with costs for labor increasing 6.6% annually on average.

The cost comparison with using a Robco robot is big: the company today, he said, charges typically $1,000/month, with costs changing based on length of engagement (costs go down if contracts are longer), with overall charges being as high as $4,000/month depending on the complexity of what the client needs. Typical deployments start at 10 modular machines, he said.

This is taking off massively, he noted, with strong triple-digit revenue growth, “exciting unit economics,” and so far four patents on its hardware and techniques from a founding team spun out of a big research university and thus grounded in AI and engineering expertise — all details that would have attracted investors like Sequoia that have only relatively recently really doubled down on Europe with a shiny new office in London, but like others in the world of VC are facing huge pressure around existing portfolio companies and how they are weathering the significant storms that have hit the tech sector.

All of that spells more prudent, and perhaps less exuberant, investing, which likely means more strict adherence to theses around making returns and less about exploring interesting ideas.

“Robco’s approach is unique [in the SMB manufacturing space] because what they are doing is a little like Lego. They are taking a modular approach,” said Luciana Lixandru, who led the investment for Sequoia. “Whatever your use case is you tell them what machine you need and they create the right format. Implementation times are short, one or two days. Then they have created a software platform where you put the modules together creates a digital twin. Then the configuration and control is easy — something that previously would have required more technical expertise or outside consultants.”

She believes this is a big gap that has yet to be tackled in the market, with out 70% of tasks for SMB manufacturers capable of being automated. “This isn’t a surgical robot, but something that can do repetitive tasks that happen in manufacturing.” In that regard, interestingly, there is a correlation between what a company like Robco is looking to fix and what a company like UiPath (a huge investment in Lixandru’s past, and partly how she established her name in VC) focused on with robotic process automation, at the administrative end of running a business.

“This company got very far so far with very little,” she added, raising one of the other big signals investors are especially relying on these days, pointing out that Robco raised only “a couple of million dollars before this, [and] they have real customers, with a bunch of robots already deployed. We have a lot of data and evidence that it’s working. I’m skeptical of 99% of robotics [pitches] and I can see how it’s hard to build a marketplace around it, but we see the ‘why now’ here and that’s why we think it will take off.”

Robco links up with $14M led by Sequoia to bring modular robotics to industrial SMBs by Ingrid Lunden originally published on TechCrunch

Uber is suing the New York City Taxi & Limousine Commission (TLC), which last month approved a fare hike for ride-hail apps and taxi drivers amid a post-pandemic driver shortage, rising operational costs and higher inflation. The ride-hail company is attempting to prevent an increase in rates it must pay drivers in NYC by December 19.

On November 15, the TLC voted to increase the per-minute rates of ride-hail drivers by 7.42% and per-mile rates by 23.93%, a move by the commission that is meant to attract more drivers to the roads to serve increasing passenger demand. In its petition, Uber called the increases “dramatic, unprecedented and unsupported hikes,” noting that earlier fare increases have ranged from 1.46% to 5.34% and “accurately reflected the impact of inflation.”

Uber accused the TLC of using unsound economic principles to “achieve a predetermined result.” The company said the rule would force Uber to spend an additional $21 million to $23 million per month, a cost from which the company could not recover. Uber could alternatively offset the additional payments by increasing rider fares, but the company said that would result in 10% increase for riders, which would “irreparably damage Uber’s reputation, impair goodwill and risk permanent loss of business and customers.”

The ride-hail giant went on to say that the challenged rule will harm riders, drivers and the ride-share industry as a whole. Uber accused the TLC of not proposing a solution to balance these risks.

“A rate increase of this magnitude may very likely result in higher rider fares,” reads the lawsuit. “Those higher fares, in turn, will depress the number of rides requested through the Uber platform. Fewer requested rides translates into fewer opportunities for Drivers to earn fees. The Challenged Rule could very well have the effect of harming Driver earnings, undermining the purpose of these regulations.”

Uber has asked the court to issue a temporary restraining order and preliminary injunction to block the implementation of the TLC’s rule pending a decision on Uber’s petition to block it entirely.

Taxi & Limousine Commissioner David Do said in a statement that the city must “stand behind our workers without traditional employment protections.”

“New York City leads the nation in protecting drivers, and this important rule reflects that reality,” Do said. “We are confident that we are well within our legal authority in implementing this important rule, and we are vigorously fighting this lawsuit.”

Uber has challenged rulings in the past that are designed to protect gig workers. A California superior court last year ruled Proposition 22 — a ballot proposal that was passed in 2020 and defines ride-hail and gig workers as independent contractors, not employees, and thus not eligible for certain labor protections — was unconstitutional and unenforceable. Uber in turn filed an appeal to invalidate AB-5, California’s controversial law on the employment status of gig workers, as unconstitutional and block its enforcement. This continual volley in the courts buys Uber time by clogging up the legal system so the company can continue to operate without making changes.

Uber sues NYC Taxi & Limo Commission to block rate increase for drivers by Rebecca Bellan originally published on TechCrunch

Twitter is officially bringing back the Twitter Blue subscription Monday, starting in five countries before rapidly expanding to others, according to Esther Crawford, director of product management at Twitter. Web sign-ups will cost $8 per month and iOS sign ups will cost $11 per month for “access to subscriber-only features, including the blue checkmark,” per a tweet from the company account.

Android users can purchase on the web and use their subscription on their phones, said Crawford. The higher cost for iOS sign ups might be a move by Twitter to offset the cost of Apple’s 30% commission for in-app purchased subscriptions, or simply to deter users from subscribing through the Apple Store at all, following a Twitter storm from an angry Elon Musk over allegations that Apple was cutting advertising on the platform.

Twitter had previously attempted to democratize the prestige of the blue checkmark — once used for verifying trustworthy and noteworthy accounts — by making it available to anyone willing to shell out $8 per month, verification be damned. The result was a slew of users buying a checkmark to impersonate other accounts and generally cause mischief. (See: Fake-pharma company Eli Lilly tweeting that insulin is now free and fake-Tesla tweeting, “Our cars do not respect school zone speed limits. Fuck them kids.”)

Crawford tweeted over the weekend that Twitter has now added a review step before applying a blue checkmark to an account in order to combat impersonation, which she says is against the Twitter Rules.

With the relaunch of Twitter’s subscription offering, the social media platform will further color-code timelines by introducing gold checkmarks for businesses and, soon, gray checkmarks for government and “multilateral accounts,” whatever those are.

“Businesses who previously had relationships with Twitter will receive goldchecks on Monday,” tweeted Crawford. “We will soon open this up to more businesses via a new process.”

Because Twitter is still really testing this feature out, the company warned that subscribers who change their handle, display name or profile photo will temporarily lose the blue checkmark until their account is reviewed again.

Subscribers will be able to edit their tweets, upload 1080p videos and have access to reader mode, alongside their blue checkmarks, the company said. They’ll also have their tweets “rocketed” to the top of replies, mentions and search and will be spammed with 50% fewer ads.

Twitter Blue to relaunch with actual verification process, higher price for Apple users by Rebecca Bellan originally published on TechCrunch

There’s one slide that almost every founder gets wrong when they are putting together a pitch deck to raise money from venture capitalists. The slide is usually known as “the ask,” and it typically lives toward the end of the pitch deck.

It is meant to do something pretty straightforward: Explain how much money a startup is raising and for what. It shouldn’t be rocket science, but it’s almost universally a struggle to get right.

Here are the most common mistakes:

Forgetting to include the slide altogether.
Not naming a specific dollar amount you are raising.
Including a valuation on the slide.
Omitting what the funds will be used for.
Listing a specific runway, i.e., “This will keep us running for 18 to 24 months.”

Let’s explore in detail why these mistakes are so detrimental to your fundraising process and how you can best include these points in your deck.

The one slide 99% of founders get wrong when fundraising by Haje Jan Kamps originally published on TechCrunch

For companies aiming toward net zero, tracking scope 3 carbon emissions is a key challenge. Scope 3 are emissions along a supply and value chain, which means they have to account for a large number of partners. Avarni automates much of the process and says it can cut down the amount of time spent on carbon reporting from months to minutes. The Sydney, Australia-based startup announced today it has raised $3 million for its carbon management platform. The funding was led by deep tech venture firm Main Sequence, with returning investors Vulpes Ventures and Common Sense Ventures.

Avarni’s platform aggregates supply chain and spending data into one comprehensive dataset, and it uses that and AI to help clients report and forecast their carbon footprint. Since its launch last year, Avarni has analyzed more than $100 billion in corporate spending data and 100 million tones of carbon dioxide equivalents in supply chains, from public and private markets. Its clients include consulting firms like KPMG Australia and Point B, and solar energy startup 5B.

Avarni was founded by CEO Tony Yammine, previously a management consultant at KPMG Australia, CPO Misha Cajic, a former Atlassian product manager and CTO Anuj Paudel, who was a cloud network engineer at Macquarie Telecom Group. Yammine told TechCrunch that the team’s experience with their former employers gave them the opportunity to speak to hundreds of enterprise companies about the challenges they faced tracking and reporting on scope 3 emissions.

A CDP report shows that scope 3 emissions account for as much as 75% of total corporate emissions. But they are hard to track because companies need to get emissions data from their supply chain, and that is often incomplete or inconsistent and requires a lot of organization. Avarni deals with that challenge by using its dataset to help identify emissions hotspots in supply chains, and is able to do so regardless of the structure or taxonomy of input data, Yammine said.

KPMG Australia used Avarni to progressively map climate risk in its supply chain by asking its 20 largest vendors, who account for 40% of total annualized goods and services on spend, to provide carbon performance data. Point B, meanwhile, is working with Avarni to provide quicker greenhouse gas emissions insights to its customers.

The startup monetizes by charging professional services and consultancies a flat fee each month based on licenses. Enterprises pay a flat fee based on the amount of procurement data analyzed by Avarni. The company doesn’t price by supplier, Yammine said, because it doesn’t want to disincentivize emissions forecasting based on the size of a supply chain. It also recently launched modular pricing that will let clients pay by the components they need, including researching, benchmarking and carbon forecasting.

Most of Avarni’s competitors are in the U.S. and include Persefoni, SINAL Technologies and Watershed. Yammine said it differentiates by using AI to speed up the decarbonization process. “Carbon reporting companies claim to automate data, but it’s not possible to automate data if you don’t have AI technology and comprehensive dataset to begin with.”

The company will use its new funding to develop its platform. It will also hire more employees and open an office in the U.S.

In a statement, Vulpes Ventures managing partner Field Pickering said, “What Avarni has achieved over the last year has been phenomenal and they are on a strong trajectory despite a challenging economic environment. The team is rapidly building one of the biggest datasets available on corporate emissions. This is the intelligence businesses need to inform their decarbonization strategies—and Avarni is at the forefront of rapidly collecting this information.”

Avarni is building a comprehensive dataset to analyze supply chain emissions by Catherine Shu originally published on TechCrunch

Canada’s venture market isn’t immune from the global market downturn, but unlike the U.S. — where everything seems increasingly bleak — there are quite a few bright spots in Canada’s ecosystem this year.

Data from the Canadian Venture Capital and Private Equity Association (CVCA) found that C$7.2 billion ($5.28 billion) was invested across 520 deals in the country through the third quarter of this year. This compares to C$15 billion deployed through 786 deals in 2021 (more on Canada’s last year here). Through Q3, the Canadian market had already surpassed its 2020 numbers. It’s also worth noting that, unlike in the U.S., the fourth quarter is not the slowest investment period each year in Canada.

A lot of recent Canadian venture investment has been concentrated in the early stages. So far this year, 88% of the known venture deals in Canada were seed or early stage, compared to 67% in the U.S., according to PitchBook.

CVCA’s manager of research and product, David Kornacki, said that despite the investment totals being lower than last year, there have been a lot of signs this year that the Canadian venture market is growing closer to maturity. For one, he thinks the proliferation of seed deals will create a good pipeline of later-stage opportunities in the region in a few years, something Canada has struggled with.

There are a lot of reasons to be excited about Canada’s venture market by Rebecca Szkutak originally published on TechCrunch

Welcome toThe Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign uphereso you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. —Mary Ann

One of the biggest news stories last week was that Plaid laid off 260 employees, or about 20% of its workforce. This may have come as a surprise to many, but not to all of us.

Rumblings about Plaid laying off some 200 people started as far back as late May. At that time, when asked, the company denied it was letting go of any workers. But as the year wore on, and the macro-environment grew more challenging, it felt like it was inevitable that Plaid — which was valued at $13.4 billion last year — would join the long list of fintech giants letting go of workers.

Notably, when outlining the decision to reduce staff, CEO and co-founder Zach Perret said he “made the decision to hire and invest ahead of revenue growth, and the current economic slowdown has meant that this revenue growth did not materialize as quickly as expected.”

It’s become a common refrain as of late — CEOs taking responsibility for over-hiring and well, in way, being too optimistic about revenue growth. Optimistic or short-sighted? It seems there is a fine line.

I think one of the most startling things about the recent group of layoffs in the fintech space, though, is how many of them are taking place at some of the highest-valued startups out there. Klarna was valued at $45 billion last year. This year, it saw a huge drop in valuation and slashed jobs more than once. Brex was valued at $12.3 billion earlier this year. Then a layoff. Stripe was valued at $95 billion last year. Then amass layoff. Chime was valued at $25 billion last year. Then amass layoff. Now Plaid.

Did they all get ahead of themselves? Were they trying to do too much too fast? (Brex co-CEO and Henrique Dubugras admitted as much onstage at Disrupt.) Did they all think the pandemic-fueled boom would last indefinitely? Did they all think the venture money would just flow freely forever?

Also, maybe some of these companies really just believed they would need so many workers. I mean, who knew a downturn of this magnitude was coming?

Maybe it was a combination of all of the above. Obviously, each company’s circumstances are different and I am not privy to their internal discussions (as much as I would like to be!). But it’s clear that a reset may be in order.

Hearing and writing about so many high-profile companies laying off workers is sobering for me as a tech journalist. I can only imagine how sobering it is for other startups in the space. My humble opinion is that we all should learn from the mistakes of others. And I’m not pointing fingers specifically at the companies mentioned above. I mean generally.

Of course, I’m not a founder or CEO and likely never will be. But here is some unsolicited (and probably obvious) advice from someone covering startups for years:

Stay focused. It’s easy to get caught up in the competitive landscape and want to outdo your rivals. But really, before you start expanding into new segment after new segment, make sure you’ve really nailed the ones you’re already working in.
Hire responsibly and carefully. No, that does not mean you should have the people on staff doing the work of two to three employyes. It means that each open position should have been thought through carefully. Is it really needed? Can this hire wait until we’re further along? Would it make more sense to hire a contractor for the time being?
Stay humble. Don’t boast. Kicking ass and taking names? Good for you. Don’t beat your chest too loudly. Being confident is one thing. Being arrogant is another.
Limit/cut the trash talk. It’s easy, especially on social media, to get caught up in discussing how or why you think your company is better than others in your space. It’s fine to talk about why you think your offering is better in a general sense from what else is out there. But to name names and try to make others look bad? Most of the time that has the opposite effect and just makes you look bad.
Be real. Whether it be on social (Twitter or Mastodon or LinkedIn or Post — wherever you are more likely to share) or when talking to the media. Authenticity is huge, and speaking for myself and my fellow TC reporters, it is very much appreciated and valued — especially considering it’s not as common as we’d like it to be. Transparency goes hand in hand with that, especially internally. Don’t leave your employees in the dark, or mislead them.
Oh, and don’t lie and commit fraud.

While I didn’t start this newsletter thinking I would come up with a list of CEO dos and don’ts, here we are. Thanks for indulging me.

Weekly News

“Fintech was hot in 2021, but looking back on it … maybe too hot? The sector exploded last year, seeing record investment — $132 billion globally, according to CB Insights — with many startups reaching lofty valuations, including Stripe at $95 billion, Klarna at $45 billion and Plaid at $13 billion. While these companies have very real customer bases and products, it is not hard to imagine that at least some of these valuations were propped up by hype.” Rebecca Szkutak reports on just how hard fintech valuations have fallen this year.

Robinhood last week launched a waitlist for its new offering, Robinhood Retirement, which it describes as the “first and only” individual retirement account (IRA) with a 1% match on every eligible dollar contributed. The move is a big bet on the part of the fintech giant that the traditional 9-to-5 employee is no longer the norm, as it is targeting gig workers and contractors, who have historically found it challenging to save for retirement without the benefit of a full-time job and access to an employer-sponsored plan. It is also likely a strategy designed to help retain users considering the company reported losing 1.8 million monthly active users in the third quarter, a quarterly decrease of 12.8% to 12.2 million, “the lowest level since it listed as a publicly traded company,” according to Yahoo News. More by me here.

Tage Kene-Okafor reported that “Chipper Cash, an African cross-border payments company valued at $2.2 billion last year, has laid off a portion of its workforce. Last week, a few affected and non-affected employees took to LinkedIn to reveal the news. TechCrunch has learned from sources that more than 50 employees were affected across multiple departments; the engineering team took the biggest hit, with around 60% of those laid off coming from the department, according to people familiar with the matter.”

From Manish Singh: “Indian financial services firm Paytm is considering repurchasing its shares, following a tremulous year that has seen its stock price fall by over 60%. Paytm said it will discuss with the board on December 13 the proposal to buy back the fully paid-up equity shares of the company, the Noida-headquartered firm disclosed in a stock exchange filing.” More here.

Fintech-focused Gilgamesh Ventures has named Paula Youas its newest (and third) partner and chief operating officer, overseeing platform growth. The move comes as the firm approaches the two-year anniversary of its inaugural fund. Since its founding in 2020, Gilgamesh has raised over $10 million and invested in nearly 30 early-stage fintech companies across the Americas, including Xepelin, Klar, Pomelo, Glean and Modern Life.

From Finextra: “Mobile-only UK bank Kroo has launched its flagship current account, offering customers two percent in interest on amounts up to £85,000. Kroo’s analysis of Bank of England data shows that there was £271bn sitting idle in UK households’ non-interest-bearing sight deposits as of the 30th of September 2022. Aimed at Millennials and Gen Z, Kroo says it will plant two trees for every new customer who opens a current account, through its charity partner, One Tree Planted.”

Adam Neumann’s latest startup, residential real estate upstart Flow, is partnering with fintech startup Bond to create a digital wallet for Flow’s residents. A variety of financial products will be embedded in the planned digital wallet with specific capabilities being announced at a later date. In case you somehow missed it, Neumann — you may remember him from his days at a little ol’ proptech called WeWork — in August made headlines (and a lot of people angry) when he raised $350 million at a $1 billion valuation, making Flow a unicorn before it even began operating.

Earlier this year, Mastercard launched the Start Path Open Banking program in an effort to give open banking startups “access to a combination of hands-on mentoring, co-innovation opportunities and engagement with Mastercard’s global network of banks, merchants, partners and digital players to help scale their business.” On Friday, Mastercard selected the following eight open banking startups to join the program: AIS Gateway (Poland); Currensea (United Kingdom); Fego.ai (India); Floid (Chile); Kaoshi (United States); Level (United Kingdom); Percents (United States) and Railz (Canada). More here.

As reported by Reuters: “dLocal (DLO.O), the Uruguayan fintech facing allegations of potential fraud from a short-seller, has applied for a UK regulatory license, the company’s chief executive told investors in a recent call reviewed by Reuters, amid claims it dodged rigorous regulatory oversight by relying on Maltese regulators.”

Brazilian fintech startup Matera, which has built instant payment and QR code technology for financial institutions, has moved its headquarters to San Francisco. The move, the company told me via email, “comes amid tremendous adoption of Pix, the instant payment system implemented by the Central Bank of Brazil in 2020 and used by 70% of Brazilians.” Specifically, Matera provides instant payment software for banks leveraging Pix in addition to providing core banking services to over 250 global banks, credit unions and digital banks — serving over 55 million accounts. The company says its jump into the U.S. market “will enable it to empower far more financial institutions to extend their payments capabilities.”

From Forbes: “During a year of steep losses in financial markets, these entrepreneurs, traders and investors are skillfully navigating choppy waters and making an outsize impact.”

Funding and M&A

Seen on TechCrunch

Ocho wants to rethink (and rebrand) personal finance for business owners

Andreessen Horowitz leads $43M Series A for Setpoint, which aims to be the ‘Stripe for credit’

TripActions secures $400M in credit facilities from Goldman Sachs, SVB

SBM Bank India, building BaaS platform, seeks funding at $200 million valuation

And elsewhere

Hotel payment software platform Selfbook announces a strategic investment from Amex Ventures. TechCrunch covered its previous raise here.

SME-focused challenger bank Allica brings home £100 million Series C led by TCV

Avant secures $250 million in funding from Ares Management Corporation

Fintel Connect, which has built marketing software for the financial industry, raises seed funding led by BankTech Ventures

Uplinq raises $5.6M for bookkeeping and analysis platform for SMBs

Syncfy raises $10 million in seed funding led by Point72 Ventures to build open finance platform in Latin America

Mortgage infrastructure platform Pylon raises $8.5M in seed round

Carputty wins investor millions to dull auto financing pain point

And with that, I will sign off. I’ll only publish one more newsletter before year’s end and then will be taking a break over the holidays. Until then, have a wonderful week. xoxoxo, Mary Ann

Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me at maryann@techcrunch.com. Or you can drop us a note at tips@techcrunch.com. If you prefer to remain anonymous, click here to contact us, which includes SecureDrop (instructions here) and various encrypted messaging apps.)

Fintech giants face uphill battle by Mary Ann Azevedo originally published on TechCrunch

This month, we’re five years into building Contrary. Along the way, we’ve raised hundreds of millions from some of the world’s top institutions and have been fortunate to back startups like Ramp, Anduril and many others.

But just like the stories of the startups we back, the journey has taught us a number of lessons the hard way.

I’ve been reflecting on our history as we hit this milestone and wanted to share a few things that I wish I knew five years ago.

Early logos are important

One of the few regrets I have is that we didn’t go logo-hunting early. We didn’t chase hot companies that were raising rounds led by household name firms. Instead, we stuck to our knitting on Fund I, leading rounds in startups and teams we were convinced in and had sourced via our own infrastructure. I was under the impression that if we did precisely what we said we’d do — lead rounds, back great talent, bring a unique model to market — we’d stand out.

Turns out, when you’re building a venture firm from scratch (limited track record, didn’t work in venture prior, etc.), logos matter. They matter for prospective LPs, who use them as a proxy for access; they matter for your peer set, who use them as a proxy for how sharp you are; and they matter for founders, who will immediately head to your website and see if you’ve backed name-brand startups.

Fast-forward to today. Ironically, our Fund I is one of the best of its vintage year, according to Cambridge Associates benchmarks. But that performance took five years to blossom, and it made raising Fund II more difficult. I once had an LP ask, “Have you invested in any startups I’ve heard of?”

It’s long stopped being an issue, but there’s no doubt in my mind that logo- hunting would’ve saved us time in the early years.

Reputation is critical

In an industry where your reputation and brand are the most important parts of building a firm, getting started from day zero is critical. Early logos are just one piece of the puzzle.

Invest heavily in building meaningful relationships with well-respected partners, founders and LPs. Send them relevant, high-quality deals for free; become Twitter friends; go to events; co-invest in firms; and cold email them and grab coffee. Do whatever it takes, because relationships are currency in more ways than one.

As an example, one of the primary ways LPs will evaluate you and your fund is by aggressively checking references with their existing venture managers. They’ll ask if partner X has heard of you, if they’ve worked with you, and if they’d bring you into deals.

This requires brand awareness at the bare minimum and ideally includes years of collaborating and producing stellar results. The best way to build your reputation is by sending deals to investors that ultimately make them lots of money.

5 lessons we’ve learned from building a venture fund from scratch by Ram Iyer originally published on TechCrunch