Month: May 2018

Robinhood started off as a dead-simple stock trading application that had no transaction fees — but since it’s continued to grow, and especially as it starts to dive into cryptocurrenty, investors are getting pretty excited about its prospects and are pouring a ton of new funding into it.

And it’s that tantalizing prospect of creating a next generation way of trading assets and cryptocurrency is now sending Robinhood to a $5.6 billion valuation in a new financing round that the company is announcing today. Robinhood says it’s closed a $363 million Series D financing round, with DST Global led this new round and Iconiq, Kleiner Perkins, Sequoia and Capital G participated. Robinhood had a $1.3 billion valuation last year when it had around 2 million users, and Robinhood says it now has 4 million users and has passed $150 billion in transaction volume.

“It’s the only place right now where you can trade crypto, stocks, and options all in one place,” CEO Vlad Tenev said. “For us to construct an experience that feels seamless and natural for customers, that for example want to sell an equity and use the proceeds to buy crypto, seamlessly, that’s been challenging not just from a product and design standpoint, but also infrastructure standpoint. There’s complexity under the hood, and our goal is to make it as seamless as possible in the process and make that complexity go away.”

Those 4 million users — and that valuation — indicates that Robinhood has clearly exposed a lot of demand for an easier way to users to dip their toes into financial services without having to work with firms that have trading fees like Scotttrade or E*Trade. And while there are a lot of services that offer robo-advisory services like Betterment and Wealthront, which make it easier to start investing small amounts of money, Robinhood offers users the opportunity to do these things at a more granular level.

And, of course, there’s the cryptocurrency aspect that is clearly spurring a lot of interest in the company. At the time, 1 million users waitlisted for access in just the five days after Robinhood Crypto was announced. Robinhood has premium services like Robinhood Gold, where the company can find additional ways to generate revenue that offset the requirements of running a system that allows users to trade stocks for free. Robinhood has raised $539 million to date, as diving into financial services can be an expensive prospect, as well as getting enough users on board to the point that it can scale to a level that the business starts to increasingly make sense.

Robinhood’s crypto trading service came out in February and by today, the comapny says it’s available in 11 states. The company also rolled out a web version and stock option trading, trying to become a more robust financial services company that’s still tuned to a younger generation that wants an easier way to get into investing without needing a big balance to invest. Most of Robinhood’s users, too, aren’t so-called “day traders” and are instead holding stocks for a while after they buy them.

“If you look at the data and the statistics, people that are active day traders are actually a very small percentage of our space,” Tenev said. “People that are actually transacting on that cadence are the minority of our customers. Most of our customers engage in more of these buy and hold accumulation strategies. We really see a lot of unique things because we don’t charge trading commissions. There are customers that deposit money regularly twice or once a month and then buy stocks as soon as those deposits come in. We don’t see a lot of customers that are doing rapid buying and selling.”

Still, as it tries to further expand — especially into products like crypto and new regions — it’s going to increasingly find itself trying to jump hurdles that financial services companies find when going abroad. And there’s always a chance that the trading platforms will try to become a little more competitive (and companies like Square are even getting into Bitcoin trading). That’s going to require a robust amount of funding to try to outmaneuver well-capitalized companies that might already have those relationships in place to more easily expand.

“The political climate is uncertain, it sort of affects everyone, it doesn’t affect us uniquely,” Tenev said. “We’re a crypto business now. Not a lot of people have a ton of clarity on what that’s gonna look like in the future, it’s a new space that’s evolving really rapidly. I think that we’re confident we can adapt and evolve, and we’re operating the business in a responsible way. There’s only so much you can do, but I feel like we’ve done a lot to address any concerns.”

from TechCrunch

As India’s internet access continues to surge among the billion-plus population, data is becoming the new oil. Whether online commerce, ride-hailing, mobile payments and banking, or more, someone needs to verify that people are who, and what, they say they are.

That’s an opportunity where HelloVerify, a verification and background screening startup that recently graduated Y Combinator in the U.S., is looking to make its mark.

The startup isn’t like most other YC grads. For one thing, it is from India — one of just 30 from the 1,000-plus YC network — while it is five years old, hasn’t raised VC capital and is profitable. The team came to the well-respected program to boost its network and learn more about startup scaling and monetization.

Founders Karan Mirchandani and Varun Mirchandani (two brothers) started the business primarily as an analog checking service, but as India’s digital ecosystem advanced, so the nature of its work developed. The company works with services to help verify their customers using a mix of offline registrations and online repositories, including social media. Today, online insurance, e-commerce, ride-sharing, flight booking and real estate web portals are among its fastest growing segments.

“In 12-24 months, our data business will leapfrog [our legacy focus] and drive this business to multiple-times more revenue,” the Mirchandanis told TechCrunch in a recent interview.

Already the numbers are notable.

Beyond a staff of 300 people, HelloVerify said it has carried out over two million background checks, with over 80 “large” customers among its clientele, such as Tata, Infosys and Prudential. Annual revenue, the brothers said, is currently at around $3 million.

In addition to digital growth, the business is poised to accelerate thanks to Aadhaar, the government-backed single identity platform for Indian citizens.

There have been controversies — particularly around weak security and the rollout in some states — but the system stands to massively boost the ease in which background checks can be carried out by providing a central lookup system.

“Aadhaar is focused on an audience of one billion people. It’ll be linked and connected to different databases which will be available for background screening. That, in turn, moves background screening away from traditional ways to make the process faster and more affordable,” CEO Karan Mirchandani explained.

Currently, he added, background checks typically take 24 hours to be processed. That’s a massive improvement on six to eight days when HelloVerify first went into business, but the founders see the potential to make it instant, or near-instant, once the Aadhaar system is fully established.

Already, the company is automating parts of its processes — including the solicitation of information and documents from individuals — but it sees the potential to add much more efficiencies through code. Particularly as the volume of tasks they are given increases.

“What started in IT is now speeding across airlines, shared economy, and more — from white collar to blue collar. The usage of background screening likely to happen more and more, for example, checking pilots, drivers, tenants, nannies, etc,” Varun Mirchandani explained.

In anticipation of that growth, HelloVerify is looking to raise capital from investors for the first time. The founders describe their goal as “a typical” Series A aimed at “taking the tech to the next level” and giving it a cash pile to go after aggressive growth.

Having already seen the benefit of mentoring at YC — where they also took the standard $120,000 investment check — the brothers are keen to open doors and networks with strategic investors that provide more than just capital.

“[YC gives] a different flavor you wouldn’t get in India, in terms of access to investors, platforms and people. It’s been a huge learning curve. It takes you at least five years ahead of the rest,” Karan said.

“Our objective is to go deeper, deeper and deeper to become India’s biggest online background checker,” Varun added. “With how big background screening has become in U.S., I believe the opportunity in India may be x10 based on population and added complexity.”

Certainly, Walmart’s $16 billion investment in Flipkart and Amazon’s continued efforts in the country, where it has deployed some $5 billion, are a testament to the growth potential that HelloVerify sees.

from TechCrunch

Google announced today it was going to acquire Israeli cloud migration startup, Velostrata. The companies did not share the purchase price.

Velostrata helps companies migrate from on-premises datacenters to the cloud, a common requirement today as companies try to shift more workloads to the cloud. It’s not always a simple matter though to transfer those legacy applications, and that’s where Velostrata could help Google Cloud customers.

As I wrote in 2014 about their debut, the startup figured out a way to decouple storage and compute and that had wide usage and appeal. “The company has a sophisticated hybrid cloud solution that decouples storage from compute resources, leaving the storage in place on-premises while running a virtual machine in the cloud,” I wrote at the time.

But more than that, in a hybrid world where customer applications and data can live in the public cloud or on prem (or a combination), Velostrata gives them control to move and adapt the workloads as needed and prepare it for delivery on cloud virtual machines.

“This means [customers] can easily and quickly migrate virtual machine-based workloads like large databases, enterprise applications, DevOps, and large batch processing to and from the cloud,” Eyal Manor VP of engineering at Google Cloud wrote in the blog post announcing the acquisition.

This of course takes Velostrata from being a general purpose cloud migration tool to one tuned specifically for Google Cloud in the future, but one that gives Google a valuable tool in its battle to gain cloud marketshare.

In the past, Google Cloud head Diane Greene has talked about the business opportunities they have seen in simply “lifting and shifting” data loads to the cloud. This acquisition gives them a key service to help customers who want to do that with the Google Cloud.

Velostrata was founded in 2014. It has raised over $31 million from investors including Intel Capital and Norwest Venture partners.

from TechCrunch