Month: May 2018

Startup life is nothing if not full of ups and downs. On the up this week is Cera, the London-based homecare startup advised by former Deputy Prime Minister Sir Nick Clegg, which today is announcing $17 million in Series A funding. Investing in the round is Guinness Asset Management (via its EIS fund), Yabeo (which is also the lead investor in Germany’s biggest care supply company Pflegebox), and Kairos. In addition, a number of Cera’s seed backers have followed on.

Contrast that with last week when a Bloomberg report alleged that fake reviews of Cera had been posted to third-party websites, such as TrustPilot — allegedly written by “Cera Care employees or people close to them” — and that at the time of its report some non-existent or expired NHS partnerships were incorrectly listed on Cera’s website.

The same report also revealed that Cera — which makes a virtue of it ability to collect and take actions on client data — wasn’t registered with the U.K. data regulator, the Information Commissioner’s Office (ICO), before February this year, although the company tells TechCrunch it began the process a year earlier. Either way, the startup launched as early as November 2016 and therefore was likely operating for a period without the proper data regulation.

Addressing the alleged fake reviews, and alleged misrepresentation of some NHS partnerships, Cera issued TechCrunch with the following statement:

“We have looked into this, and TrustPilot have removed unverified reviews. We pride ourselves on delivering outstanding, high-quality care, which is demonstrated through our platform’s automated customer feedback, which remains at a 95% satisfaction rate.

“Contrary to certain statements in recent press articles, we have partnered with several NHS organisations over the past year, successfully delivering NHS-funded and referred care services. In 2018 we have delivered NHS CCG funded care with the following CCGs: Lambeth, Tower Hamlets, Haringey, Enfield, and previously had partnered with CCGs including Brent, Harrow and Hillingdon, and East London Foundation Trust, in addition to marketing in NHS hospitals including: Central Middlesex, West Middlesex, Northwick Park, Royal Marsden, Whittington and Barnet & Chase Farm. We note that at the time the articles were written, our website was not fully up to date with these materials and have since rectified it – this was in part due to variable contractual expiry dates”.

Meanwhile, Cera says it will use its Series A funding — which is made up of both equity and debt — to expand its services further across the U.K., launching in an additional three cities beyond London, namely Manchester, Leeds and Birmingham, via what it is calling a “buy and build” strategy. This will see Cera buy struggling homecare agencies across the U.K. — many of which it says lack the technology to scale and grow independently — as a more rapid means of expanding.

“In a fragmented market of over 8,000 homecare providers, Cera has built the technology to quickly aggregate U.K. homecare businesses in a scalable manner, in what will be a U.K.-first from a startup in this space. This model will also be used to drive Cera’s expansion to Germany,” says the company.

The injection of capital will also support Cera’s continued investment in “AI”. It has been prototyping a chatbot-styled assistant it calls “Martha,” which it claims can successfully foresee deterioration in patient health, based on carer feedback, such as whether a patient hasn’t been eating, has a fever, or isn’t walking normally. The aim is to pre-empt more serious illnesses and avoid unnecessary admissions to hospital.

Related to this, I understand from Cera’s latest investor email report that Cera has grown its data set to “over 1 million data points” — a 90 percent quarter-on-quarter increase — which it intends to feed into its machine learning-powered predictive analytics tool to help improve health outcomes and reduce preventable hospital admissions. “We are taking active steps to ensure GDPR compliance,” says the company, which is just as well.

The same email details a number of business development updates by Cera, including that it is working on a collaboration with NHS 111 that — if it goes ahead — would permit integration of data records between Cera and the NHS 111 service. The startup is also working on Amazon Alexa integration, and has formed an exclusive partnership with the Daily Mail Group, to offer home care to Daily Mail readers and users.

To that end, the U.K. homecare startup space is pretty crowded already and therefore media partnerships and other more direct ways to market could be quite important beyond simply becoming a partner provider to local health and social care authorities. Cera’s direct U.K. competitors include HomeTouch (backed by Rocket Internet’s GFC, Passion Capital, Bupa, and 500 Startups), and SuperCarers.

from TechCrunch

Poq, the London-based startup that offers a SaaS to make it easier for retailers to launch and maintain a consumer-facing shopping app, has raised £9.5 million in Series B funding. Leading the round is Smedvig Capital, with participation from previous backers Beringea, and Revolt Ventures. It brings the total amount raised by Poq to £16.5 million since the company was founded in 2011.

A fairly early entrant into the so-called ‘apps-as-a-service’ space, Poq’s pitch is that it enables retailers — with a particular focus on ‘pureplay’ or multichannel brands — to create their own e-commerce app at a fraction of the price of using a traditional app development agency or doing it all in-house. The company counts the likes of House of Fraser, Missguided, Pretty Little Thing, Holland & Barrett, Hotel Chocolat, Fragrance Direct, and Made.com as clients.

“Our platform is the result of years of focus on retail apps and is proven to increase conversion rates and revenue,” Øyvind Henriksen, CEO and co-founder at Poq, tells TechCrunch. “New code is rolled out every week and major releases delivered every quarter”.

This, he says, is often in contrast to the way retailers engage with a traditional app agency, which typically sees a lot of work and investment go into a version one, only for the app to be left unloved as each update can be costly and has unnecessary friction.

The other option is to not bother with an app and just have a mobile website, but Poq claims these don’t perform well in retail and that apps are proven to provide a better shopping experience, which leads to much better engagement, retention and conversion.

“While everyone would love to have an app, the reality is that apps are typically hard to build and maintain. By using Poq’s SaaS approach, retailers get the product faster to market, keep it up to date easier, [and] have the ability to plug into an ecosystem of pre-built integrations to technology providers,” says Henriksen.

The Poq CEO describes Poq’s typical customer as a large pureplay or multichannel retailer. “Our first major customer was House of Fraser,” he says, “and that’s when we proved ourselves as an enterprise-ready software provider. From then we’ve seen multichannel customers such as Holland and Barrett and House of Fraser use apps as a new digital channel, the apps also power their loyalty programs in the stores”.

Meanwhile, Poq says the new funding will help the company drive growth in the U.K. and Europe, as well as in the U.S., where it plans to open offices. I’m told the U.S. currently makes up 20 percent of Poq’s revenue.

from TechCrunch

Zinc, the London-based company builder tackling various societal problems, has picked up £3 million in seed investment as it readies its second cohort and mission. Backing the round is LocalGlobe, Niklas Zennström’s Atomico, U.K. university LSE, and a number of angel investors.

Launched late last year, Zinc helps build startups almost from scratch. Somewhat similar to Entrepreneur First, it focuses on recruiting potential founders — in this instance, experts in social science, technology, design and business — who through the 9-month programme form new companies.

Each Zinc cohort is tasked with tackling a specific mission around a broader theme. The debut programme, which was used to prove the model and is currently drawing to a close, set out to create startups that can tackle the problem of women’s mental and emotional health. This saw 55 prospective founders and entrepreneurs participate, resulting in 17 new companies being formed.

They span tech-enabled businesses working on problems as diverse as perinatal mental health, loneliness amongst the elderly, young women discovering sexual pleasure, stress-related physical conditions like IBS, women walking safely in cities, new talking therapies, and more. One criteria of Zinc-founded companies is that the resulting solution needs to be applicable globally, and that the problem being tackled affects a large enough number of people in the developed world ie ~100 million or more.

“We try to solve huge societal issues by mobilising talent, ideas and capital, and by taking a mission-led approach,” Ella Goldner, co-founder and GM of Zinc, tells TechCrunch. “Our programme does so by finding the best talent, surrounding them with smarts experts to help them build new tech-enabled scalable businesses, and help them develop products and services that tackle the issues in the context of the mission”.

Zinc’s second mission, which the company builder is currently recruiting for, will see it focus on the 150 million people living in places that have been hit hard by automation and globalisation over the last 20 or 30 years, as traditional industries in those areas have declined (e.g. coal, manufacturing, textiles, shipbuilding, ports and tourism).

“The founders on the programme are a diverse group of entrepreneurial creative individuals who are driven by the mission, and are keen to set up a new business. They have background in tech, the mission’s focus area, or in ops and marketing. The average age is 34 and they are truly diverse in terms of nationalities… We believe in people’s ability to take control over those issues and solve them, rather than relying on public sector to do that,” explains Goldner.

Suzanne Ashman Blair, partner at LocalGlobe, echoes that sentiment and says that Zinc has got off to a great start with its first mission. “To have an impact on society’s deepest challenges, we need to bring together entrepreneurial talent and capital. Zinc has demonstrated that its approach to addressing social problems through technology is a powerful combination”.

LSE’s investment in Zinc also sees it effectively become a founder of the burgeoning company builder. The London university is leading a new consortium of U.K. universities (Oxford, Manchester, Sussex and Sheffield) who will work with the Zinc programme to “turn research insight into new businesses that have commercial and social impact”.

To that end, in addition to Goldner, Zinc lists it founders as Paul Kirby (a former Head of the No 10 Policy Unit and previously a senior partner at KPMG), Saul Klein (co-founder of LocalGlobe and a serial tech entrepreneur), and Professor Julia Black (Pro-Director for Research at the London School of Economics and Political Science and a Board Member of U.K. Research & Innovation).

Meanwhile, Zinc says the new £3 million funding will enable it to plan future missions and replicate the success of its launch programme.

from TechCrunch

Beauty-in-a-box brand Birchbox has changed up its ownership structure.

The New York-based startup, which has raised almost $90 million in funding from noted venture firms like Accel Partners and First Round Capital, has a new majority owner in hedge fund Viking Global, sources confirm to TechCrunch.

First reported by Recode, Birchbox made some changes to its cap table after failing to find a suitable buyer. We are told that the details are still getting finalized, but that Viking is expected to take on a majority stake after investing about $15 million. Viking previously led Birchbox’s $60 million funding round in 2014.

Birchbox did not respond for comment. 

Birchbox has managed to become a household name amongst its targeted demographic of female millennials, but its business has faced challenges amidst growing competition. Ipsy, Glossybox, Sephora and Allure Magazine are amongst the many beauty sample box subscriptions that consumers can buy.

Its boxes retail for just $10 per month. And while they are able to find discounts and partnerships with beauty brands eager to partner with Birchbox, it can still be hard to keep distribution costs down, while also spending on sales and marketing to grow the business. Birchbox hopes that consumers will buy more full-sized products off of its website.

Recaps are not uncommon, but they are usually a sign that a startup is struggling. However, it is an opportunity for Birchbox to raise cash and remain in business while it figures out a longer-term plan.

Birchbox was founded in 2010 by Harvard Business alums Hayley Barna and Katia Beauchamp. Barna left Birchbox and is now an investor at First Round Capital. Beauchamp remains CEO.

from TechCrunch

Apple ended up with a pretty decent report for its second quarter, beating analyst expectations on most of its metrics — but it is making a huge move in terms of returning capital to investors.

The company said it is announcing a new $100 billion buyback program and increasing its dividend by 16%. That means that Apple investors are going to get more of an opportunity to snap up the value the company has created over time as it’s continued to grow significantly. While Apple in the past several months a lot of the momentum that carried it to a market cap nearing $1 trillion, the company’s stock has still risen around 80% in the past two years. Not surprisingly, the stock today is soaring (by Apple standards) in extended trading, with shares rising nearly 5% after the report.

Last quarter Apple CFO Luca Maestri said the company expected to be “net cash neutral” over time, signaling that it might start returning more capital to shareholders through its dividend and share buyback programs. That’ll be important for the company, which thanks to the tax bill last year will be able to repatriate a significant amount of the cash it holds outside of the U.S.

The rest of the line was a pretty solid beat on expectations Apple’s services revenue continues to grow as it looks to create a steady additional revenue stream. All that’s important too, of course, but the big news here is the set of buybacks. Here’s the bottom line:

• Q2 Revenue: $61.1 billion, compared to analyst estimates of $60.86 billion. Apple projected between $60 billion and $62 billion. It’s an increase of 14% year-over-year.
• Q2 Earnings: $2.73 per share, compared to analyst estimates of $2.60 per share.
• Q2 iPhone shipments: 52.2 million units sold, compared to Wall Street estimates of 51.9 million iPhones sold.
• Q3 Gross Margin estimate: Between 38% and 38.5%
• Q3 Revenue estimate: Between $51.5 billion and $53.5 billion
• Q2 iPad shipments: 9.1 million units
• Q2 Mac shipments: 4.1 million units
• Q2 Services revenue: $9.2 billion, up 31% year-over-year

That big capital return program is likely to keep investors happy for some time while it continues to sort out its new iPhone lineup. Last year, the company released the iPhone X — which was widely praised, but also carried a substantial $999 price tag for the cheapest model. Apple has worked to create programs to pay for those phones over time, but it’s still an extremely high ticket price. That’s especially true internationally, where consumers might not tolerate high prices for those phones. As a result, the reception on Wall Street was pretty muted, and Apple seems to have to figure out some other way to restart that iPhone growth engine.

Toward the end of last year, it seemed like Apple was inching closer to being a company with a market cap over $1 trillion. That’s a completely symbolic number, but nonetheless would be a significant milestone for the iPhone maker that looks to figure out what a next-generation smartphone looks like. Apple’s stock has by no means been in a tailspin, but it hasn’t really done anything either as expectations start to drop a bit following the launch of the iPhone X.

from TechCrunch