Blog of the website «TechCrunch» Прогноз погоды

People

John Smith

John Smith, 49

Joined: 28 January 2014

Interests: No data

Jonnathan Coleman

Jonnathan Coleman, 32

Joined: 18 June 2014

About myself: You may say I'm a dreamer

Interests: Snowboarding, Cycling, Beer

Andrey II

Andrey II, 41

Joined: 08 January 2014

Interests: No data

David

David

Joined: 05 August 2014

Interests: No data

David Markham

David Markham, 65

Joined: 13 November 2014

Interests: No data

Michelle Li

Michelle Li, 41

Joined: 13 August 2014

Interests: No data

Max Almenas

Max Almenas, 53

Joined: 10 August 2014

Interests: No data

29Jan

29Jan, 32

Joined: 29 January 2014

Interests: No data

s82 s82

s82 s82, 26

Joined: 16 April 2014

Interests: No data

Wicca

Wicca, 37

Joined: 18 June 2014

Interests: No data

Phebe Paul

Phebe Paul, 27

Joined: 08 September 2014

Interests: No data

Артем Ступаков

Артем Ступаков, 93

Joined: 29 January 2014

About myself: Радуюсь жизни!

Interests: No data

sergei jkovlev

sergei jkovlev, 59

Joined: 03 November 2019

Interests: музыка, кино, автомобили

Алексей Гено

Алексей Гено, 8

Joined: 25 June 2015

About myself: Хай

Interests: Интерес1daasdfasf, http://apple.com

technetonlines

technetonlines

Joined: 24 January 2019

Interests: No data



Main article: Logistics

<< Back Forward >>
Topics from 1 to 10 | in all: 209

OptimoRoute raises $6.5M Series A to help businesses better plan their routes

19:00 | 6 February

Route planning sounds like it’s a problem for big logistics companies like Amazon, FedEx and UPS, but in reality, it’s something every small business with more than a few mobile employees deals with. OptimoRoute, which today announced that it has raised a $6.5 million Series A round led by Prelude Ventures, is tackling exactly this problem. Built by a team of former Google and Yelp engineers, the service allows businesses to set their specific constraints and then automatically creates daily routes for their drivers, no matter whether they are doing deliveries or cleaning pools.

What makes OptimiRoute stand out from some of its competitors in this space isn’t just its often significantly lower prices but also that it offers drivers and customers a mobile experience that includes live tracking and ETAs and the ability to change routes in real time as necessary. With OptimoRoute, companies can plan for specific days of the week or up to five weeks in advance. The company is also currently testing a pickup and delivery system for both passengers and goods, as well as support for multi-day long-haul routes.

As the company’s co-founder and CEO Marin Šarić told me, route optimization is obviously a popular academic problem. “On the one side, you do have these academic problems that are very proof of concept and minimalistic,” he said. “And then, in the commercial space, you have software that is running — in our estimation — algorithms that have been well known in the previous century, literally, you know there’s even things from the 80s. […] We at OptimoRoute really worry about the real-word constraints of what it means to build an effective schedule.”

OptimoRoute takes into account a number of variables (how much material can fit into a van, hourly wages, skills needed to perform a certain repair, etc.) and lets companies choose different priorities for optimizing their routes.

“We’re really focused on trying to make this technology available for everyone and this is appreciated even by very senior experienced logistics managers because they can focus on problems they’re trying to solve as opposed to working around hiccups with the software,” explained Šarić.

Currently, OptimoRoute has about 800 customers that range from small businesses to large energy companies like Southern Star Central Gas Pipeline, which manages the routes of more than 300 maintenance technicians with the help of the service. By reducing the mileage employees have to drive, users not only see increased productivity from their employees but, as Šarić noted, also reduce their overall carbon footprint.

The team spent a lot of time on developing the basic algorithms that power the service. The team, though, expected that a lot of its users would be very sophisticated logistics managers, but it turned out that there was a lot of demand from small and medium businesses, too.

“Prelude is excited to help OptimoRoute expand its reach and further develop its offerings for a multitude of mobile workforces,” said Victoria Beasley, principal, Prelude Ventures . “We strongly believe that OptimoRoute is set to have a huge impact on the route optimization market, saving time, money and resources, while also reducing carbon footprint, for their many diverse clients.”

 


0

Layoffs hit another Softbank co as $3.2B Flexport cuts 50

02:24 | 5 February

Fearing weak fundraising options in the wake of the WeWork implosion, late stage startups are tightening their belts. The latest is another Softbank-funded company, joining Zume Pizza (80% of staff laid off), Wag (80%+),  Fair (40%), Getaround (25%), Rappi (6%), and Oyo (5%) that have all cut staff to slow their burn rate and reduce their funding needs. Freight forwarding startup Flexport that is laying off 3% of its global staff.

“We’re restructuring some parts of our organization to move faster and with greater clarity and purpose. With that came the difficult decision to part ways with around 50 employees” a Flexport spokesperson tells TechCrunch after we asked today if it had seen layoffs like its peers.

Flexport CEO Ryan Petersen

Flexport had raised a $1 billion Series D led by SoftBank at a $3.2 billion valuation a year ago, bringing it to $1.3 billion in funding. The company helps move shipping containers full of goods between manufacturers and retailers using digital tools unlike its old-school competitors.

“We underinvested in areas that help us serve clients efficiently, and we over-invested in scaling our existing process, when we actually needed to be agile and adaptable to best serve our clients, especially in a year of unprecedented volatility in global trade” the spokesperson explained.

Flexport still had a record year, working with 10,000 clients to finance and transport goods. The shipping industry is so huge that it’s still only the seventh largest freight forwarder on its top Trans-Pacific Eastbound leg. The massive headroom for growth plus its use of software to coordinate supply chains and optimize routing is what attracted SoftBank.

Flexport Dashboard

The Flexboard Platform dashboard offers maps, notifications, task lists, and chat for Flexport clients and their factory suppliers.

But many late-stage startups are worried about where they’ll get their next round after taking huge sums of cash from SoftBank at tall valuations. As of November, SoftBank had only managed to raise about $2 billion for its Vision Fund 2 despite plans for a total of $108 billion, Bloomberg reported. LPs were partially spooked by SoftBank’s reckless investment in WeWork. Further layoffs at its portfolio companies could further stoke concerns about entrusting it with more cash.

Unless growth stage startups can cobble together enough institutional investors to build big rounds, or other huge capital sources like sovereign wealth funds materialize for them, they might not be able to raise enough to keep rapidly burning. Those that can’t reach profitability or find an exit may face down-rounds that can come with onerous terms, trigger talent exodus death spirals, or just not provide enough money.

Flexport has managed to escape with just 3% layoffs for now. Being proactive about cuts to reach sustainability may be smarter than gambling that one’s business or the funding climate with suddenly improve. But while other SoftBank startups had to spend tons to edge out direct competitors or make up for weak on-demand service margins, Flexport at least has a tried and true business where incumbents have been asleep at the wheel.

 


0

Emerge raises $20M to take its digital freight marketplace for truckers up a gear

17:30 | 4 February

Trucking is currently the most popular mode of transporting freight in the US, accounting for around $12.5 billion of the $17 billion freight market, according to the Bureau of Transportation Statistics. But with thousands of small and single-vehicle operators and legacy (often paper-based) systems underpinning communications, it’s also one of the most inefficient.

Now, there are signs that this is changing. A startup out of Phoenix, Arizona called Emerge, which has built a  platform to for shippers and brokers to find and allocate truck freight more effectively across the long tail of available truck-based carriers (a little like a Flexport but for trucks), is announcing a round of $20 million, funding it will use to continue building out its technology, as well as to keep expanding business.

The funding — led by NewRoad Capital Partners, with previous investors Greycroft and 9Yards Capital also participating — comes on the heels of some already-strong traction for Emerge. Since being founded in 2018 by brothers Andrew and Michael Leto, the company has processed more than $1 billion in freight with 1,500% year-over-year growth between 2018 and 2019. We understand that the company’s valuation is currently at over $100 million. 

Some of its traction so far is down to the founders. Both are vets of the trucking industry whose previous company, a multimodal shipment visibility/supply chain solutions platform called 10-4, sold to Trimble in a $400 million deal. And some of that is down to the gap in the market that Emerge is filling.

“Gap” is actually the operative word here. How shipments are booked on trucks today is quite inefficient, with orders often leaving empty spaces on truck beds that could be filled with goods going in the same direction; and in about 20% of all journeys carrying no load at all.

Part of the reason for this is the antiquated way that shippers book space on trucks, and part of the reason is because there is just simply too much fragmentation in the system, with 80% of all shipments today contract-based and the remaining 20% operating as a “spot market” and booked on the fly, and neither of them particularly efficient when it comes to truck occupancy. (Most of the latter spot market is booked through spreadsheets and email, Michael Leto, the CEO, said in an interview.)

Emerge’s solution is something of a stick-and-carrot approach that reminds me a little also of how advertising exchanges work.

A shipper that wants to use the Emerge platform essentially activates/lists its entire inventory of truck providers on the platform to get started. That list and inventory, in turn, become part of a bigger database of other providers: and again, this is a long-tail approach, with typically the trucking companies on the platform having no more than 200 trucks (and often less) in their fleets.

Then, when a shipper goes to Emerge to book a shipment, options are provided that might include previous truckers, but might also include others. The idea is that this provides a more efficient picture, and that in turn gets passed on as cost savings to the customers, who can typically reduce shipping costs by as much as 20% using the platform.

If the cost savings and expanded choice are the carrots, the stick comes in the form of the requirement to upload truck data and share it with other shippers: you can’t use the system without doing it.

“But it’s a network effect,” Leto explained when I asked if there was ever resistance to the model. “We allow these companies to share capacity to drive efficiencies, and to drive and lower costs with less deadhead miles. There are a lot of benefits to capacity sharing.” It doesn’t seem to have deterred too many. There are currently some 30,000 carrier profiles the platform, and 12,000  transportation entities — including carriers, brokers, or other shippers — transacted in Q4 alone, speaking to activity on the platform being strong. 

Emerge is not the only company that has identified the opportunity in providing a better and more updated platform to communicate and book space in the fragmented truck market. Sennder out of Berlin — which last year raised a sizeable round of funding — has also built a platform to centralise communications around booking shipments. It, however, seems to have less of an emphasis on encouraging shippers to take the lead in expanding that network effect that Leto describes.

Others that are tackling the wider shipping and logistics market and trying to improve how it runs include Sendy out of Kenya, which recently also announced a $20 million raise; Flexport, which now has a $3.2 billion valuation; Zencargo, which has also raised $20 million; and FreightHub ($30 million); Bringg ($25 million) and NEXT ($97 million).

But within that, Emerge’s performance so far, coupled with the Leto brothers’ history as founders, are giving the startup some extra mileage as we enter the next phase of what trucking might hold, which could include a critical mass of autonomous and electric vehicles on pre-defined routes.

“Uniquely, Emerge combines an exciting new technology designed to serve existing, unmet market need with experienced industry operators and entrepreneurs,” said Tracy Black of NewRoad in a statement. “Andrew and Michael are building the most innovative marketplace we’ve seen in the freight and digital marketplace industry — bringing contracts and carriers together to create new capacity. We are excited to be leading their Series A and I am thrilled to join the board to support their growth,”.

 


0

How Bykea is winning Pakistan’s ride-hailing and delivery market

15:48 | 31 January

Increasingly, the streets of Karachi and Lahore are being flooded with men riding bikes and wearing green T-shirts, a writer friend recently told me. In a sense, these men represent the emergence of Pakistan’s tech startups.

India now has more than 25,000 startups and raised a record $14.5 billion last year, according to government figures. But not all Asian countries are as large as India or have such a thriving startup ecosystem. Long overdue, things are beginning to change in bordering Pakistan.

Bykea, a three-year-old ride-hailing and delivery service, today has more than 500,000 bikes registered on its platform. It operates in some of Pakistan’s most populated cities, such as Karachi, Lahore and Islamabad, Muneeb Maayr, Bykea founder and CEO, told TechCrunch.

Maayr is one of the most recognized startup founders in Pakistan, and previously worked for Rocket Internet, helping the giant run fashion e-commerce platform Daraz in the country. While leading Daraz, he expanded the platform to cater to categories beyond fashion; Daraz was later sold to Alibaba.

 


0

Indian B2B packaging marketplace Bizongo raises $30M

13:15 | 27 January

Bizongo, one of the largest business-to-business online marketplaces for packaging needs in India, has raised $30 million in fresh funding round as it looks to widen its footprint in the nation and serve more categories.

The new financing round, Series C, was led by Switzerland-based hedge fund Schroder Adveq, which manages assets worth $10 billion. Existing investors B Capital, Accel, Chiratae Ventures, and IFC also participated in the round, the startup said.

Mumbai-based Bizongo has raised about $56 million to date. It was valued at about $96 million in its Series B financing round in 2018, according to an analysis of its regulatory filings.

The five-year-old startup serves as a marketplace for businesses to identify, buy, and sell material packing solutions across industries. It also offers packing design, development, and procurement solutions.

Sachin Agarwal, chief operating officer and co-founder of Bizongo, said the startup offers a unique value proposition of promising a “100% availability of packaging material and no-stock-outs at very low inventory.”

“This helps clients to reduce their packaging material procurement cost by 2-5% and at the same time ensures better production planning for our supply partners. This creates a strong value proposition for all stakeholders across the value chain,” he said in a statement.

Bizongo did not reveal how many customers it has, but said they span across some of the nation’s leading e-commerce, retail, FMCG, FMCD industries. On its website, it claims it works with over 750 manufacturers in India, and has delivered 290 million packaging units to date. It also claims to have served over 350 brands.

In a statement, Aniket Deb, chief executive and co-founder of Bizongo, said the startup has witnessed a “significant improvement in operating metrics since the last round of financing and the current round will further help us grow the business in a sustainable way.”

The fresh fund will be deployed to ramp up technology infrastructure and to expand to newer sectors such as pharma packaging. Deb said the startup also plans to work on expanding its presence in the country.

“We believe in the vision of the founders who are transforming and digitising the highly fragmented B2B packaging marketplace by leveraging technology and a unique supply chain efficiency solution. Bizongo has demonstrated strong momentum by continuing to add marquee clients and we have been impressed with the company’s rapid growth trajectory over the past year,” said Kabir Narang, General Partner at B Capital Group, in a statement.

 


0

Marijuana delivery giant Eaze may go up in smoke

00:07 | 17 January

The first cannabis startup to raise big money in Silicon Valley is in danger of burning out. TechCrunch has learned that pot delivery middleman Eaze has seen unannounced layoffs, and its depleted cash reserves threaten its ability to make payroll or settle its AWS bill. Eaze was forced to raise a bridge round to keep the lights on as it prepares to attempt major pivot to ‘touching the plant’ by selling its own marijuana brands through its own depots.

If Eaze fails, it could highlight serious growing pains amid the ‘green rush’ of startups into the marijuana business.

Eaze, the startup backed by some $166 million in funding that once positioned itself as the “Uber of pot” — a marketplace selling pot and other cannabis products from dispensaries and delivering it to customers — has recently closed a $15 million bridge round, according to multiple source. The fund was meant to keep the lights on as Eaze struggles to raise its next round of funding amid problems with making decent margins on its current business model, lawsuits, payment processing issues, and internal disorganization.

 

An Eaze spokesperson confirmed that the company is low on cash. Sources tell us that the company, which laid off some 30 people last summer, is preparing another round of cuts in the meantime. The spokesperson refused to discuss personnel issues but noted that there have been layoffs at many late stage startups as investors want to see companies cut costs and become more efficient.

From what we understand, Eaze is currently trying to raise a $35 million Series D round according to its pitch deck. The $15 million bridge round came from unnamed current investors. (Previous backers of the company include 500 Startups, DCM Ventures, Slow Ventures, Great Oaks, FJ Labs, the Winklevoss brothers, and a number of others.) Originally, Eaze had tried to raise a $50 million Series D, but the investor that was looking at the deal, Athos Capital, is said to have walked away at the eleventh hour.

Eaze is going into the fundraising with an enterprise value of $388 million, according to company documents reviewed by TechCrunch. It’s not clear what valuation it’s aiming for in the next round.

An Eaze spokesperson declined to discuss fundraising efforts but told TechCrunch, “The company is going through a very important transition right now, moving to becoming a plant-touching company through acquisitions of former retail partners that will hopefully allow us to more efficiently run the business and continue to provide good service to customers.

Desperate to grow margins

The news comes as Eaze is hoping to pull off a “verticalization” pivot, moving beyond online storefront and delivery of third-party products (rolled joints, flower, vaping products and edibles) and into sourcing, branding and dispensing the product directly. Instead of just moving other company’s marijuana brands between third-party dispensaries and customers, it wants to sell its own in-house brands through its own delivery depots to earn a higher margin. With a number of other cannabis companies struggling, the hope is that it will be able to acquire brands in areas like marijuana flower, pre-rolled joints, vaporizer cartridges, or edibles at low prices.

An Eaze spokesperson confirmed that the company plans to announce the pivot in the coming days, telling TechCrunch that it’s “a pretty significant change from provider of services to operating in that fashion but also operating a depot directly ourselves.”

The startup is already making moves in this direction, and is in the process of acquiring some of the assets of a bankrupt cannabis business out of Canada called Dionymed — which had initially been a partner of Eaze’s, then became a competitor, and then sued it over payment disputes, before finally selling part of its business. These assets are said to include Oakland dispensary Hometown Heart, which it acquired in an all-share transaction (“Eaze effectively bought the lawsuit,” is how one source described the sale). This will become Eaze’s first owned delivery depot.

In a recent presentation deck that Eaze has been using when pitching to investors — which has been obtained by TechCrunch — the company describes itself as the largest direct-to-consumer cannabis retailer in California. It has completed more than 5 million deliveries, served 600,000 customers and tallied up an average transaction value of $85. 

To date, Eaze has only expanded to one other state beyond California, Oregon. Its aim is to add five more states this year, and another three in 2021. But the company appears to have expected more states to legalize recreational marijuana sooner, which would have provided geographic expansion. Eaze seems to have overextended itself too early in hopes of capturing market share as soon as it became available.

An employee at the company tells us that on a good day Eaze can bring in between $800,000 and $1 million in net revenue, which sounds great, except that this is total merchandise value, before any cuts to suppliers and others are made. Eaze makes only a fraction of that amount, one reason why it’s now looking to verticatlize into more of a primary role in the ecosystem. And that’s before considering all of the costs associated with running the business. 

Eaze is suffering from a problem rampant in the marijuana industry: a lack of working capital. Since banks often won’t issue working capital loans to weed-related business, deliverers like Eaze can experience delays in paying back vendors. A source says late payments have pushed some brands to stop selling through Eaze.

Another drain on its finances have been its marketing efforts. A source said out-of-home ads (billboards and the like) allegedly were a significant expense at one point. It has to compete with other pot purchasing options like visiting retail stores in person, using dispensaries’ in-house delivery services, or buying via startups like Meadow that act as aggregated online points of sale for multiple dispensaries.

Indeed, Eaze claims that its pivot into verticalization will bring it $204 million in revenues on gross transactions of $300 million. It notes in the presentation that it makes $9.04 on an average sale of $85, which will go up to $18.31 if it successfully brings in ‘private label’ products and has more depot control.

Selling weed isn’t eazy

The poor margins are only one of the problems with Eaze’s current business model, which the company admits in its presentation have led to an inconsistent customer experience and poor customer affinity with its brand — especially in the face of competition from a number of other delivery businesses.  

Playing on the on-demand, delivery-of-everything theme, it connected with two customer bases. First, existing cannabis consumers already using some form of delivery service for their supply; and a newer, more mainstream audience with disposable income that had become more interested in cannabis-related products but might feel less comfortable walking into a dispensary, or buying from a black market dealer.

It is not the only startup that has been chasing that audience. Other competitors in the wider market for cannabis discovery, distribution and sales include Weedmaps, Puffy, Blackbird, Chill (a brand from Dionymed that it founded after ending its earlier relationship with Eaze), and Meadow, with the wider industry estimated to be worth some $11.9 billion in 2018 and projected to grow to $63 billion by 2025.

Eaze was founded on the premise that the gradual decriminalisation of pot — first making it legal to buy for medicinal use, and gradually for recreational use — would spread across the US and make the consumption of cannabis-related products much more ubiquitous, presenting a big opportunity for Eaze and other startups like it. 

It found a willing audience among consumers, but also tech workers in the Bay Area, a tight market for recruitment. 

“I was excited for the opportunity to join the cannabis industry,” one source said. “It has for the most part has gotten a bad rap, and I saw Eaze’s mission as a noble thing, and the team seemed like good people.”

Eaze CEO Ro Choy

That impression was not to last. The company, this employee was told when joining, had plenty of funding with more on the way. The newer funding never materialised, and as Eaze sought to figure out the best way forward, the company cycled through different ideas and leadership: former Yammer executive Keith McCarty, who cofounded the company with Roie Edery (both are now founders at another Cannabis startup, Wayv), left, and the CEO role was given to another ex-Yammer executive, Jim Patterson, who was then replaced by Ro Choy, who is the current CEO. 

“I personally lost trust in the ability to execute on some of the vision once I got there,” the ex-employee said. “I thought that on one hand a picture was painted that wasn’t the truth. As we got closer and as I’d been there longer and we had issues with funding, the story around why we were having issues kept changing.” Several sources familiar with its business performance and culture referred to Eaze as a “shitshow”.

No ‘Push For Kush’

The quick shifts in strategy were a recurring pattern that started well before the company got tight financial straits. 

One employee recalled an acquisition Eaze made several years ago of a startup called Push for Pizza. Founded by five young friends in Brooklyn, Push for Pizza had gone viral over a simple concept: you set up your favourite pizza order in the app, and when you want it, you pushed a single button to order it. (Does that sound silly? Don’t forget, this was also the era of Yo, which was either a low point for innovation, or a high point for cynicism when it came to average consumer intelligence… maybe both.)

Eaze’s idea, the employee said, was to take the basics of Push for Pizza and turn it into a weed app, Push for Kush. In it, customers could craft their favourite mix and, at the touch of a button, order it, lowering the procurement barrier even more.

The company was very excited about the deal and the prospect of the new app. They planned a big campaign to spread the word, and held an internal event to excite staff about the new app and business line. 

“They had even made a movie of some kind that they showed us, featuring a caricature of Jim” — the CEO at a the time — “hanging out of the sunroof of a limo.” (I’ve been able to find the opening segment of this video online, and the Twitter and Instagram accounts that had been created for Push for Kush, but no more than that.)

Then just one week later, the whole plan was scrapped, and the founders of Push for Pizza fired. “It was just brushed under the carpet,” the former employee said. “No one could get anything out of management about what had happened.”

Something had happened, though: the company had been taking payments by card when it made the acquisition, but the process was never stable and by then it had recently gone back to the cash-only model. Push for Kush by cash was less appealing. “They didn’t think it would work,” the person said, adding that this was the normal course of business at the startup. “Big initiatives would just die in favor of pushing out whatever new thing was on the product team’s radar.” 

Eaze’s spokesperson confirmed that “we did acquire Push For Pizza . . but ultimately didn’t choose to pursue [launching Push For Kush].”

Payments were a recurring issue for the startup. Eaze started out taking payments only in cash — but as the business grew, that became increasingly problematic. The company found itself kicked off the credit card networks and was stuck with a less traceable, more open to error (and theft) cash-only model at a time when one employee estimated it was bringing in between $800,000 and $1 million per day in sales. 

Eventually, it moved to cards, but not smoothly: Visa specifically did not want Eaze on its platform. Eaze found a workaround, employees say, but it was never above board, which became the subject of the lawsuit between Eaze and Dionymed. Currently the company appear to only take payments via debit cards, ACH transfer, and cash, not credit card.

Another incident sheds light on how the company viewed and handled security issues. 

Can Eaze rise from the ashes?

At one point, employees allegedly discovered that Eaze was essentially storing all of its customer data — including users’ signatures and other personal information — in an Azure bucket that was not secured, meaning that if anyone was nosing around, it could be easily discovered and exploited.

The vulnerability was brought to the company’s attention. It was something that was up to product to fix, but the job was pushed down the list. It ultimately took seven months to patch this up. “I just kept seeing things with all these huge holes in them, just not ready for prime time,” one ex-employee said of the state of products. “No one was listening to engineers, and no one seemed to be looking for viable products.” Eaze’s spokesperson confirms a vulnerability was discovered but claims it was promptly resolved.

Today, the issue is a more pressing financial one: the company is running out of money. Employees have been told the company may not make its next payroll, and AWS will shut down its servers in two days if it doesn’t pay up. 

Eaze’s spokesperson tried to remain optimistic while admitting the dire situation the company faces. “Eaze is going to continue doing everything we can to support customers and the overall legal cannabis industry. We’re excited about the future and acknowledge the challenges that the entire community is facing.”

As medicinal and recreational marijuana access became legal in some states in the latter 2010s, entrepreneurs and investors flocked to the market. They saw an opportunity to capitalize on the end of a major prohibition — a once in a lifetime event. But high government taxes, enduring black markets, intense competition, and a lack of financial infrastructure willing to deal with any legal haziness have caused major setbacks.

While the pot business might sound chill, operations like Eaze depend on coordinating high-stress logistics with thin margins and little room for error. Plenty of food delivery startups from Sprig to Munchery went under after running into similar struggles, and at least banks and payment processors would work with them. With the odds stacked against it, Eaze has a tough road ahead.

 


0

At CES, Schneider Electric unveils its own upgrade to the traditional fusebox

23:23 | 8 January

As renewable energy and energy efficiency continue to make gains among cost-conscious consumers, more companies are looking at ways to give customers better ways to manage the electricity coming into their homes.

At the Consumer Electronics Show in Las Vegas, Schneider Electric unveiled its pitch to homeowners looking for a better power management system with the company’s Energy Center product.

Think of it as a competitor to products from startups like Span, which are attempting to offer homeowners better ways to integrate renewable energy power generation to their homes and provide better ways to route the electricity inside the home, according to Schneider Electric’s executive vice president for its Home and Distribution division, Manish Pant.

The new product is part of a broader range of Square D home energy management devices that Schneider is aiming at homeowners. The company provides a broad suite of energy management services and technologies to commercial, industrial, and residential customers, but is making a more concerted effort into the U.S. residential market beginning in 2020, according to Pant.

Schneider will be looking to integrate batteries and inverters into its Energy Center equipment over the course of the year and is currently looking for partners.

In some ways, the home energy market is ripe for innovation. Fuse boxes haven’t changed in nearly 100 years and there are a few startups that are looking to provide better ways to integrate and manage various sources for electricity generation and storage as they become more cost competitive.

Lumin, and Sense (which is backed by Schneider Energy) also have energy efficiency products they’re pitching to homeowners.

 

 


0

Snackpass snags $21M to let you earn friends free takeout

17:58 | 19 December

“We were in the back washing blenders so they could keep taking Snackpass orders” recalls co-founder and CEO Kevin Tan. The team from order-ahead food startup Snackpass was willing to get their hands dirty to keep up with demand at one of their first restaurant partners, Tropical Smoothie Cafe on the Yale college campus.

Why were people so eager to pay for takeout through Snackpass? Because it lets them earn loyalty points to redeem for free food — both for themselves and as gifts for their friends. Sending people Snackpass rewards became a new way to flirt or show gratitude at Yale. And through the Venmo-esque Snackpass social feed, users could keep up with a fresh form of gossip while discovering restaurants.

“Anywhere someone is standing in line to order something, we can solve that with Snackpass” says Tan. “Consumer spending will be social in the future.”

That future is already taking hold. Two years after launch, Snackpass is on 11 college campuses across the US, often boasting a 75% penetration rate amongst students within 6 months. It takes a cut of every order and keeps margins high since users pick up the food themselves rather than waiting for delivery. While other food ordering startups battle to offer discounts as marauding users deal-hop between apps, Snackpass keeps users coming back through its loyalty program.

Its momentum, retention, and opportunity to expand from colleges to dense cities has now won Snackpass a $21 million Series A led by Andreessen Horowitz partner Andrew Chen. The round was joined by other heavy hitters like Y Combinator, General Catalyst, Inspired Capital, and First Round plus angels including musician Nas, NFL star Larry Fitzgerald, and legendary talent agent Michael Ovitz. Building on Snackpass’ $2.7 million seed, the cash will go towards hiring up with the goal of reaching 100 campuses in 2 years.

“Takeout is an important market because it’s huge — also in the hundreds of billions — and fragmented” writes Chen. “The opportunity complements the food delivery market in a big way: For the average restaurant, there are 6 takeout orders for every delivery order!”

“It’s Own Language”

Like many of the best startup ideas, Snackpass was born out of the founders’ own needs at Yale. Slow and expensive food delivery services didn’t make sense for smaller orders like a coffee, ice cream, or a pepperoni slice on campuses small enough for customers to walk or bike to the restaurant. Tan says “I was dabbling in several side projects, including helping a friend who managed a local pizza shop build a website to help better reach the local student community.” He realized how tough it was for restaurants around colleges to retain and reward customers, especially as regulars graduated.

Tan joined up with neuroscience student and Thiel Fellow Jamie Marshall, who became Snackpass’ COO. “I had grown up calling in every order” Marshall tells me. “Waiting in line didn’t make sense for me. I used every order-ahead platform and thought this was the future.” Jonathan Cameron, a serial entrepreneur who’d built his own order-ahead app called Happy Hour, rounded out the founding team.

Snackpass founders (from left): Jamie Marshall and Kevin Tan

Snackpass offers users a list of nearby restaurants they can order ahead from, with special tags for ones offering deals. Menu items include counts of how many people have ordered them and how many rewards points you’ll earn buying them. You pay in the app, skip the line at the restaurant, and grab your order from the counter. Each restaurant can configure their own rewards system with how much items earn and cost, such as giving you a free coffee for every 10 you buy.

Users can then spend their points to get themselves free menu items, or send a virtual Snackpass gift card to any of their phone contacts or people they find via search. This gives Snackpass a way to grow virally that most food apps lack. Thankfully, you can block people on Snackpass if they get creepy showering you with gifts.

Each purchase and gift on Snackpass shows up in its social feed unless you make it private. “That’s become its own language. People use it to flirt with each other, or bond and connect with someone new” Tan tells me. “There’s some drama or intrigue there seeing who’s sending gifts to who. People even look at the feed in the way they look at someone’s Instagram to see what’s going on with them.”

Snackpass has also done some integration work specifically for the college market that sets it apart from other order-ahead and delivery services. It can sync with students’ campus meal plans so they can spend them through the app. And student groups from clubs to fraternities can pre-load and replenish accounts for their members. Snackpass works with the same organizations to launch on new campuses. “We host parties, sponsor tailgates, and make it feel like a student-led effort so it grows organically across campus communities” Tan explains. “These efforts, combined with the social feed which would give anyone FOMO if they’re not in the app.”

Network Effect Commerce

With all the competition in the space, restaurants can be inundated with apps to manage, some of which just exacerbate spikes in demand that overwhelm kitchens. “There is certainly a risk that local restaurants will start to get platform fatigue, finding that using some apps will take too big of a bite out of their margins” says Tan. That’s why Snackpass built features that let restaurants batch orders and control how many come in at a certain time so dine-in patients and non-app users aren’t stuck with unreasonable delays.

Snackpass has recruited talent from Uber Eats and an advisor from Yelp’s executive team to help it navigate the tricky SMB sales process. One ace up its sleeve is that it can offer to send push notifications to announce recently signed partners or specials they’re launching, driving the new customers restaurants are desperate for. Tan says his startup is considering if it could charge for this kind of promotion down the line. Most customers who walk into restaurants are effectively in incognito mode, but Snackpass provides its partners with analytics to help them improve their own businesses.

“At the surface level there is a lot of competition in this space” Tan admits. “The social aspect of the app has been the key differentiator for us. Other companies have been focused on creating the fastest, cheapest, most efficient delivery service, but it’s really hard to make those margins work and consumers are trained to shop around on different apps to get
the best deal or fastest delivery time . . . Eating food is supposed to be fun and social,
and our generation grew up online and in social networks. We’re combining the social aspect of eating with the utility of order ahead, which has helped us build loyalty and enable retention
amongst our users.”

It will still be a battle to overtake long-running competitors like Allset, Level Up, and Ritual, plus incumbents that offer takeout pickup like Uber and Grubhub. Logistics is a cut-throat business, and plenty of startups have already failed in the restaurant loyalty space.

Having Andreessen Horowitz’s support could give Snackpass some extra fire power. “A16z has better support and services for their portfolio companies than any other VC we’ve come across and they’ve delivered” Tan tells me. “We knew that Andrew Chen understands growth and marketplaces from his blog and his Twitter.” That’s critical in a crowded space where such a precise balance of customer acquisition and lifetime value is necessary.

Snapchat, TikTok, and Fortnite have all tapped into the youth market with a lighthearted nature that keeps users coming back until they develop network effect. Snackpass is managing to do the same not with a messaging app or game, but a commerce platform. “We play up creativity, silliness and delight in areas where most companies focus on utility and convenience” Tan concludes. “We built Snackpass for ourselves and our friends. We’ve carried on this philosophy: if something makes us laugh, we put it in the app.”

 


0

Spain’s Glovo grabs $166M Series E for its ‘deliver anything’ app

11:00 | 19 December

Spain’s Glovo, an on-demand delivery app platform which operates in Europe, LatAm and Africa delivering food but also other urban conveniences from groceries to pharmaceuticals, has bagged another €150 million (~$166M) in a fast-following Series E round led by Abu Dhabi state investment company, Mubadala.

The raise follows a €150M in Series D that was announced in April, and $134M in Series C in mid 2018. The total raised since the business was founded back in 2015 is now around $488M.

The Barcelona-based startup says the latest raise has pushed its valuation past $1BN — putting it into a very exclusive Spanish unicorn club, with the likes of ride-hailing giant Cabify. (Glovo reckons it’s only the second privately held business in the country to achieve such a valuation).

Co-founder Oscar Pierre would not disclose the exact valuation investors are putting on the business now — beyond publicly acknowledging the unicorn milestone. “We’ve decided not to disclose valuation,” he said. “Even internally, all these valuation things it’s not something we care a lot about… Crossing the billion, I guess, is something worth announcing but not more details.”

Glovo’s new investor, Mubadala, is investing from a $400M fund announced earlier this year for backing European startups — which is itself backed by Japanese conglomerate, Softbank. Mubadala was also a backer of Softbank’s Vision Fund. (And the latter has made some very big bets in the on-demand delivery space, ploughing funding into DoorDash in the US and Rappi in Colombia to name two.)

Asked whether Glovo sees opportunities for expansion in the Gulf region in light of Mubadala joining its investor roster, Pierre said: “It hasn’t been part of the thesis of investment — so we’re not linking it.”

Glovo’s market focus remains fixed on three core regions where it currently operates: South America, South West Europe, and Eastern Europe and Africa — the strategy having been to target regions where competitors hadn’t already established themselves as the go-to on-demand delivery platform.

“Middle East for us it seems already a bit too competitive to go now,” he told us. “All our expansion playbook has been focused on going first to markets… [or where our competitors] were a second player. And the online food delivery market in Middle East is very developed already.

“So, never say never, but short answer is we’re not planning in the short term to launch there.”

Speaking in an on stage interview at TechCrunch Disrupt Berlin last week, Glovo’s other co-founder, Sacha Michaud, suggested the hyper competitive on-demand food delivery market is set for more consolidation in the short term. Though he said Glovo’s team will be head down “aiming for profitability” — rather than looking to go shopping for growth by buying rivals (or indeed being bagged themselves).

Pierre also told us the focus for the business in 2020 — now flush with Series E cash — will be achieving profitability. He said it’s hoping to achieve that in a little over a year’s time.

“Our plan is to use this money to go fully profitable as a company during early 2021,” he told TechCrunch. “I think that’s quite realistic. Still with a very high growth. So we’re expecting more than 2x-2.5x growth during next year.”

“Today we operate in 26 markets. And many of them are still in early stage, and they’re still in investment phase so I think first of all we’re going to use this money to take most of our countries to the positive operational profit stage,” he went on. “Our model is one where during the first 18 months you need to invest in a city — because you need to build the right capillarity, the right efficiency to start generating positive profits.”

Glovo launched its service in around eight new countries during 2019, per Pierre.

Which means there’s plenty of investment that still needs to go in to those markets over the coming year to bring them up to the required density to tilt for profitability.

So it looks likely that it will step off the gas a little on its blistering pace of growth and market expansions next year — as it puts more effort on deepening its footprint to push for the scale required to tip into positive margins.

Although Pierre also suggested there “might be a few new countries” it will ride into next year — noting, too, that it will have a larger marketing budget in 2020 vs this year.

“The rate of new cities that we’re currently launching is very high. Probably every week we keep launching at least ten cities — Italy for example has already like 60 cities launched and we think we can go to more than 200 so there’s a lot of cities still to penetrate,” he said. “We’ve had very good results in some African or Eastern European countries like Ukraine, Kazakhstan, Georgia. And there’s some similar markets that we could go to. [There are also examples] in Africa, like Ivory Coast. It’s been a great success.”

“We do expect a lot,” he added. “2019 on relative terms [growth] was very high. It was like 3.5x. It’s very hard to maintain that growth with the current size that we have but it’s still going to be very high — it’s probably going to be 2x-2.5x”

A big chunk of Series E funding will be ploughed into expanding Glovo’s engineer team — with a plan to hire around 300 additional developers by mid 2020. This will build on the circa 150 devs it already employs in Barcelona and a new tech hub it’s building out in Warsaw.

As a whole the business employs 1,500+ staff at this point — not including the thousands of self-employed couriers (who it calls ‘Glovers’) who make the deliveries — but 2020 will see it significantly grow headcount, with both up to 300 more engineers being added and potentially even more hires related to running the ‘dark stores’ it’s planning to significantly ramp up next year too.

Asked why this on-demand delivery business is so tech intensive Pierre said it’s all about eking out small gains to reduce friction and yield incremental savings by automating and optimizing platform and UX interactions which — cumulatively — make the difference for this type of thin margins business.

“Overall there’s a lot of complexity in what we do. So we deliver anything in your city in 30 minutes. And in this 30 minutes you need to co-ordinate a lot of things. A lot of things have to go well, like the restaurant or the store has to receive well information, they need to receive well the preparation time to get that ready, of course all the logistics and all the routing and the despatching of the orders with the couriers needs to work very well, and then the front end for the user — it’s an industry where there’s a lot of competition and we’re all developing better and better features. So that also has to work out very well.”

“If we had 400 engineers there’s many more specialized [product] teams that we would build,” he added. “On the other end we are by definition a super high volume, low margin business — and next year we’re talking about doing more than 100M orders, maybe close to 200M orders next year. Which means that you optimize every single order by 20 cents, which seems nothing in a €20 basket, and you’re generating €40M extra and a bit there. And most of the efficiencies — they come through tech.”

Groceries will be the other big focus for Glovo in 2020, with Pierre noting the category is it’s second biggest, after food (i.e. restaurant meal) deliveries.

Since 2018 Glovo has experimented with opening a handful of so-called ‘dark stores’ in key cities — such as Madrid and Barcelona. These are delivery-pick-up-only warehouses for convenience store style grocery shopping — be it toothpaste, snacks or soft drinks — with stores strategically sited to ensure speedy delivery across a city.

It has around seven cities with dark stores operational now, according to Pierre. The plan is to launch over 100 more of these ‘Super Glovos’ (as it calls them) in 2020 — focusing on larger cities.

“We are building our own dark stores and it’s a model that we like a lot,” he told us. “We think it works everywhere. So far we have basically been rolling it out in our biggest cities. And we’re going to keep with that focus.

“What we’re very focused on now is making sure that the biggest cities, we have enough capillarity of dark stores to guarantee super fast delivery time. And for us super fast delivery time means 15 minutes. So that’s what we’re focusing on… Before launching more cities we’re very focused on how do we guarantee this 15 minute delivery time.”

As noted above, ramping up on groceries will also add headcount to the business. Pierre confirmed the stores are staffed by employees — and said between four to five people are needed per store to work as packers and store managers. So that’s potentially another 500 staff Glovo will be adding to its books next year.

It also partners with supermarket giant Carrefour to offer full supermarket shopping on-demand via the app in select markets. But it sees dark stores as supplementary to that partnership model — playing to the push-button convenience its business encourages.

And — again with an eye on profitability — providing opportunities for cross selling to bulk up order size.

The dark store play piggybacks on convenience, using the fixed delivery fee as a lever to encourage users to add a few more staple items to an urgent shopping need, because, well, they might feel bad if they shell out to just get a bottle of mixer brought to their door. (Super Glovos stock a limited range of items (<1,000 SKUs) to help keep delivery times down.)

“There’s a lot of people that order because they need something very urgently — like for tonight, and since they’re ordering maybe four or five items I think we do a pretty good job at cross-selling and adding more,” said Pierre. “So it’s pretty basic things but that people need… tonight, tomorrow and maybe the day after that. They don’t do the big basket.

“In Super Glovo you can find things like oranges, potatoes, bananas. We have started selling some meat in some markets — like simple burgers. Actually we tested selling Impossible Burgers in Barcelona. But most of it is not perishable — like 90%.”

“We believe that the best for the user is to have both,” he added, discussing dark stores vs supermarket partnerships. “To have a very fast, 15 minute, more like convenience option and also offer them maybe one or two great retailers, like Carrefour — maybe for larger baskets or for their unique brands. I think that’s the best user experience possible.”

Beyond food, courier services will be another area of product focus for Glovo in 2020, per Pierre.

“Surprisingly enough there’s a lot of people that use us for courier,” he said.” Like I forgot my keys or just send some documents from point A to point B. This is a service where we want to improve our product a lot because it does take a lot of orders.”

But that’s just about going to be the limit. He suggested Glovo will have limited resources to fully implement some of the other stuff it’s experimenting with (or has plans to) — as it works towards its overarching vision of becoming an ‘everything app’ for urbanities. Because thin margins like plentiful orders.

For example, he said it’s currently testing its own brand on-demand scooters in Argentina.

“Our users in Buenos Aires there’s 500 scooters — yellow painted Glovo scooters in the streets — and they can use them with the same Glovo account. It’s a test for us to learn about a new industry and stuff.”

“Here in Barcelona we are looking at the possibility to sell ticketing — like last minute tickets for cinema, for theatres, for football matches,” he added. “And of course sell digital tickets not printed tickets. So we like everything that gets the user closer to their city and makes it basically easier. And we’re going to be testing things but I think not rolling out, scaling massively.

“We have a mentality of testing things. But we don’t think we’re going to have resources during 2020 to do a full rollout.”

Asked what he sees as the end game for Glovo if, as he hopes, it achieves profitability in 2021– whether it’s an IPO or exit via acquisition — Pierre said the team is focused on staying independent, however that can be achieved.

“We’re very focused on that point where we can basically decide our future. More or less investor independent. I think we can reach that,” he suggested. “And then decide what we want to do. Glovo’s one of these projects that it’s so fun and there’s so much entrepreneurship in terms of launching new services and verticals. The reality is that’s, for us, very important — and we don’t see ourselves doing anything else.

“So I think our dream would be stay as independent. Maybe IPO. It’s a tool for us to give liquidation to all our shareholders and employees. But it’s not a goal per se. We have 18 months to be profitable, depend on us, and keep having a very big impact.”

 


0

Amazon’s third-party merchants are now barred from using FedEx Ground for Prime shipments

05:52 | 17 December

Third-party vendors were told by Amazon over the weekend that they are barred from using FedEx’s ground delivery services for Prime shipments. The Wall Street Journal reports that a message sent by Amazon to merchants on Sunday said the ban will last “until the delivery performance of these ship methods improves.” The e-commerce platform will still allow FedEx Ground for non-Prime shipments and FedEx Express, a faster but pricier option, for Prime.

Third-party sellers now account for more than half the products sold on Amazon.com and the company’s decision on FedEx’s ground delivery comes during the peak of the holiday shopping season. Over the summer, FedEx ended partnerships with Amazon to provide it with express air deliveries and ground shipments.

An Amazon spokesperson said that the company is managing cutoffs for delivery by Christmas and want to ensure that customers receive their packages on time. TechCrunch has also contacted FedEx for comment.

Both FedEx and UPS both experienced recent shipping delays, which they said were caused by record shipping volumes and weather issues.

Amazon has also been under scrutiny by federal antitrust regulators, with some complaints centered on whether or not it forces sellers to rely on its own logistics network. The company’s focus on its warehouse and delivery services, combined with its status as the largest online retailer in the U.S., has turned it into a major competitor against FedEx, UPS and the United States Postal Service.

A recent Morgan Stanley report estimates that Amazon is currently delivering about 46% of the items ordered through its U.S. site and predicts Amazon Logistics not only start providing shipments for non-Amazon orders, but overtake FedEx, UPS and the USPS in shipment volume by 2022.

 


0
<< Back Forward >>
Topics from 1 to 10 | in all: 209

Site search


Last comments

Walmart retreats from its UK Asda business to hone its focus on competing with Amazon
Peter Short
Good luck
Peter Short

Evolve Foundation launches a $100 million fund to find startups working to relieve human suffering
Peter Short
Money will give hope
Peter Short

Boeing will build DARPA’s XS-1 experimental spaceplane
Peter Short
Great
Peter Short

Is a “robot tax” really an “innovation penalty”?
Peter Short
It need to be taxed also any organic substance ie food than is used as a calorie transfer needs tax…
Peter Short

Twitter Is Testing A Dedicated GIF Button On Mobile
Peter Short
Sounds great Facebook got a button a few years ago
Then it disappeared Twitter needs a bottom maybe…
Peter Short

Apple’s Next iPhone Rumored To Debut On September 9th
Peter Short
Looks like a nice cycle of a round year;)
Peter Short

AncestryDNA And Google’s Calico Team Up To Study Genetic Longevity
Peter Short
I'm still fascinated by DNA though I favour pure chemistry what could be
Offered is for future gen…
Peter Short

U.K. Push For Better Broadband For Startups
Verg Matthews
There has to an email option icon to send to the clowns in MTNL ... the govt of India's service pro…
Verg Matthews

CrunchWeek: Apple Makes Music, Oculus Aims For Mainstream, Twitter CEO Shakeup
Peter Short
Noted Google maybe grooming Twitter as a partner in Social Media but with whistle blowing coming to…
Peter Short

CrunchWeek: Apple Makes Music, Oculus Aims For Mainstream, Twitter CEO Shakeup
Peter Short
Noted Google maybe grooming Twitter as a partner in Social Media but with whistle blowing coming to…
Peter Short