Month: June 2018

Zebra Medical Vision, an Israeli medical imaging startup that uses machine and deep learning to build tools for radiologists, has raised a $30 million Series C led by health technology fund aMoon Ventures, with participation from Aurum, Johnson & Johnson Innovation—JJDC Inc. (the conglomerate’s venture capital arm), Intermountain Health and artificial intelligence experts Fei-Fei Li and Richard Socher. Existing investors Khosla Ventures, Nvidia, Marc Benioff, OurCrowd and Dolby Ventures also returned for the round.

Zebra also announced its Textray research today, which it claims is the “most comprehensive AI research conducted on chest X-rays to date.” Textray is being used to develop a new product that has already been trained using almost two million images to identify 40 clinical findings. Scheduled to launch next year, it will help automate the analysis of chest X-rays for radiologists.

Founder and CEO Elad Benjamin, who launched Zebra with Eyal Toledano and Eyal Gura in 2014, told TechCrunch in an email that its Series C capital will be spent on new hires to speed up the development of its analytics engine and its go-to-market strategy.

Chest X-rays are one of the most common radiographs ordered, but also among the most difficult for radiologists to interpret. There are several groups of researchers focused on using artificial intelligence algorithms to make the process more accurate and efficient, including teams from Google, Stanford and the Dubai Health Authority.

Benjamin said Zebra, which has now raised a total of $50 million, differentiates its approach by looking at its algorithms from a “holistic product perspective. Developing an algorithm is just one piece,” he added. “Integrating it into the workflow, adapting it to the needs of multiple countries and healthcare environments, supporting and updating it, and regulating it properly globally takes a tremendous focus – and that’s what delivers value, over and above an algorithm.”

He added that “it will take a few more years” before AI becomes mainstream in medical imaging and diagnosis, but he believes that it will eventually be a critical component of radiology. Zebra Medical Vision already markets a bundle of algorithms for lung, breast, liver, cardiovascular and bone disease diagnoses called AI1 that costs hospitals $1 per scan.

In a press statement, aMoon managing partner Dr. Yair Schindel said “We are excited to partner with the Zebra team, which is harnessing the power of data and machine learning to provide physicians and healthcare systems with tools to dramatically increase capacity, while improving patient care. This investment aligns with our vision of backing scalable and sustainable innovations that will have a valuable impact on fundamental facets of global healthcare.”

from TechCrunch

Laka, a London-based insurtech startup that has developed what it calls “crowd insurance” to rival the traditional premiums and is initially targeting high-end bicycle owners, has raised $1.5 million in seed funding. The round is led by publicly-listed Tune Protect Group, with participation from Silicon Valley’s 500 Startups — money that will be used to enter new insurance categories and for international expansion, including South East Asia.

Founded in 2017, Laka has developed what it claims is a unique insurance model that sees customers only pay for the true cost of cover. At the end of each month, the cost of any claims is split fairly between customers, with the individual’s maximum premium capped at the “market rate”. If there is no claim, the premium that month is zero. To date, the startup says it has saved customers more than 80 percent compared to market prices.

What’s interesting about this model is that it is potentially much-better aligned with customers, meaning that fewer claims mean lower costs for the entire Laka customer base. Laka itself only makes money when a claim is made — it adds 25 percent on top of each claim to cover costs and create some margin. As long as it stays on top of fraudulent claims, customers stand to benefit with a more cost-effective and fairer insurance product.

“Customers join without paying any upfront premiums. When there is a claim, we settle it with working capital we borrow from our insurance partner in exchange for a fee,” explains Laka co-founder Jens Hartwig. “At the end of the month, we total up all claims we have settled, add our fee on top, and split the bill on a pro-rata basis. Thus, we pay out first and then ask customers to pay us back the expenses incurred”.

In contrast, the more a traditional insurer pays out in claims, the less profit it makes. “It’s a great business model from the insurer’s point of view as they happily take customer’s money and maybe settle a claim down the line. In the meantime they can reinvest the available capital. This proposition is clearly not as attractive from the customer’s’ point of view,” says Hartwig.

To change this, Laka’s model moves away from “underwriting risk” to credit risk — that is, ensuring customers can pay the required, albeit capped premium when the startup does have to pay out, which Hartwig reckons is an easily manageable risk with credit cards and modern payment providers such as Stripe.

The cap — where the monthly premium has a maximum so that Laka’s customers never face bill shock — is being provided by Zurich U.K. in the form of a stop-loss agreement for which Laka pays a small fixed fee per policy, per month. Any exposure above the cap is absorbed by Zurich, acting like a reinsurer.

Hartwig says that in months with a lot of claims, this is where the stop-loss kicks in, capping each customer’s exposure at a clearly communicated level. The promise is that you will never be charged more than competitors, but — crucially — if everyone takes better care, you will pay much less.

“We effectively offer a profit share to our customers, encouraging improved behaviour as they benefit from taking better care. By changing the way we earn money in the business model, we fixed the conflict of interest between customer and insurer,” adds the Laka co-founder.

from TechCrunch

CloudNC, the U.K. startup and Entrepreneur First alumni that is developing AI software to automate part of the manufacturing process, has quietly raised £9 million in Series A funding, TechCrunch has learned.

According to sources — and since confirmed by the company — Atomico, the European VC firm founded by Skype’s Niklas Zennström, has led the round. A number of existing investors, including Episode 1 and Entrepreneur First, also participated. We first heard a term sheet had been put on the table as far back as March, and last week the investment finally closed.

With the broader aim of using AI to dramatically reduce the time and costs associated with manufacturing, CloudNC is developing software and a cloud computing service that hopes to automate the programming of CNC milling machines.

These machines work by carving blocks of solid metal into useful shapes, where a useful shape could be anything from a Macbook body, to bits of a car, to jet engine turbine blades. Unlike 3D printing, this happens in a ‘subtractive’ way; metal is cut out until what is left is the resulting component.

The problem is that to instruct a CNC machine to turn a 3D design into a finished part requires it to be fed pre-programmed sequences of machine control commands, which currently is a highly skilled and manual process. You have to instruct the machine not just precisely where and how to cut, but also which of its hundreds of tools to use. Programming a CNC machine can also be time-consuming, taking up to 100 hours for more complicated parts.

Related to this manual labour, there’s a second problem CloudNC thinks it can solve, which is the speed of manufacturing itself. That’s because, the startup claims, a human can’t possibly calculate the most efficient way to cut out a block of metal for each bespoke part being manufactured, even though it is currently extremely well-educated guess-work. However, in theory, AI combined with ‘super computing’ in the cloud, can. The result: halving the time needed to manufacture parts and therefore halving the costs (minus the raw material costs, of course).

“We’re applying breakthrough AI methods to control these machines automatically, which will revolutionise how the things around us are made,” CloudNC co-founder and CEO told me after I called him yesterday to confirm the startup’s Series A. “Our mission is to make milling machines one click devices that can produce a part easily, efficiently and with minimal human intervention”.

Meanwhile, a person familiar with Atomico’s investment tells me it plays into the VC firm’s strategy around “industry 4.0,” and that we can expect further investments in the space.

Specifically related to CloudNC, the thinking is that we are heading towards a future where there will be less emphasis on mass production and a move towards just-in-time manufacturing, where certain kinds of products are produced closer to where they are sold and can benefit from near zero inventory. Consumer trends such as product personalization and an appetite for innovative design-led products, enabled by new technology, business models and startups, are helping to drive this.

If CloudNC can deliver on its promise of halving the cost of CNC machine-based manufacturing, it stands to make a major contribution to — and benefit from — that future.

from TechCrunch

Marshmallow, a new ‘insurtech’ startup in the U.K. building a product for immigrants/expats who are poorly served by the car insurance market, has picked up $1.2 million in seed funding. Backing the company, which is set to launch later this year, is Passion Capital, and Investec Bank.

Founded in March 2017 by identical twins Oliver and Alexander Kent-Braham, and David Goate — all three of whom previously worked at digital identity company Yoti — Marshmallow is developing insurance products that aim to use better data and technology to provide more fairly priced insurance cover to non-U.K. nationals. To that end, the startup is starting out with car insurance for foreign-born drivers.

“Car insurance typically requires an insurer to understand a person’s driving ability, driving history and current lifestyle before they can offer them an accurate price,” explains Marshmallow’s Oliver Kent-Braham.

“Unfortunately, a lot of insurers don’t attempt to understand foreign drivers living in the U.K., instead they just overcharge them. U.K.-based, foreign drivers can expect to be quoted prices that are 51 percent higher than the market average”.

To fix that, the Marshmallow team — which also includes Tim Holliday, who was previously the Chief Underwriting Officer and MD of Personal Lines at Zurich — has built an underwriting system that aggregates global data rather than U.K.-only data.

“We combine this with a proprietary algorithm that eliminates underwriting bias before computing a more accurate price for foreign drivers living in the U.K.,” says Kent-Braham.

The Marshmallow founder says typical customers are people who have moved to the U.K. to build a life here. The company’s research suggests that after one or two years of living in the U.K., people are ready to settle down and that this often means buying a car and inevitably getting insurance.

“Our customers are ambitious, entrepreneurial, educated people who are striving to build a better life in the U.K. Unfortunately, with the current political climate these individuals don’t always feel welcome in the U.K. and we don’t want financial services to further discourage them to settle here,” he says.

Meanwhile, competitors are cited as large incumbent insurers who still use legacy systems and struggle to use U.K. data, let alone global data. In other words — similar to other fintech narratives — this is being pitched as a battle against antiquated companies and old technology.

“We’ve built everything from the ground up which enables us to access global data, have accurate pricing and a user experience that is transparent and convenient,’ adds Kent-Braham.

from TechCrunch

Here’s a unique approach to Western companies doing business in China. Today, Evernote — the U.S. note-making service — span out its China-based unit into an independent entity with “full autonomy” over its business and services.

Evernote introduced its Yinxiang Biji China-based service in 2012, but now it is transitioning to a minority shareholder with the Chinese management team taking day-to-day control. As part of its move to independence, Yinxiang Biji has raised an undisclosed Series A round from the Sequoia CBC Cross-border Digital Industry Fund.

The terms are not disclosed, but Raymond Tang, CEO of Yinxiang Biji, said ownership of the business is split roughly equally between Evernote, the Chinese investors and the startup’s management team — while Yinxiang Biji itself has raised “several hundred million RMB.” (For comparison, 100 million RMB is roughly $15 million.)

Evernote and Yinxiang Biji have inked a two-year deal that will see them cross-license IP, and Tang and Evernote CMO Andrew Malcolm told TechCrunch in an interview that the duo will continue to work closely. The IP deal could also be extended, according to Malcolm, who added that the spin-out has been a move that he and Tang have discussed since they both joined Evernote in 2015.

Yinxiang Biji claims to have more than 20 million registered users who have created over one billion notes. Tang said that note creation in China per user is 50 percent higher than Evernote’s other customer base, while the business has grown at a 60-percent rate annually.

More broadly, Malcolm said the China entity accounts for some 10 percent of Evernote’s global revenue but he acknowledged that, despite adopting a local strategy since it launched, Yinxiang Biji will have the freedom to push its business harder as an independent entity. That chiefly includes building out features that apply more directly in China, such as social integrations and more.

“Even without having done some of the basics that [Chinese] users would expect, we’ve found product-market fit. How much more impactful could we be if we allowed the Chinese market team to think about their brand, technology and innovation?” he said.

The company has arguably been one of the most successful U.S. tech companies to venture into China — Linkedin, which is mired in some controversy, might be another. Yet still a change is needed since the existing approach “doesn’t satisfy what we have learned about how Chinese users want to use Evernote versus those in the rest of the world,” Malcolm summarized.

That sentiment was echoed by Eric Xu, partner of the Sequoia fund.

“I am convinced that Yinxiang Biji will further unleash its potential and pick up development after the spin-off, as technical and decision-making autonomy is gained and fully localized operations are on the way. Moreover, its business model is a frame of reference for future cross-border Internet partnerships,” Xu said in a supplied statement.

Beyond impact on the service, there is a major business reason, too. The move frees Yinxiang Biji up for a potential listing, which Malcolm and Tang both acknowledged is part of the plan since Chinese financial regulations are strict, including clauses such as two years of profitability. Part of that planned approach includes the new management structure, which makes Yinxiang Biji majority-Chinese owned thus satisfying another regulatory requirement.

“We are very much aware of how far ahead you need to be thinking” in order to go public in China, Malcolm said. “It’s top of our minds when we speak.”

Tang, meanwhile, suggested that the company might look to tap exchanges in Shanghai or Shenzhen, but there’s no immediate timeframe for that at this point. Both executives pointed out that the Chinese market requires a unique approach and, in this case for certain, Evernote is adopting one.

Evernote, once valued at over $1 billion, has been in a period of transition over the last few years after the exit of co-founder and CEO Phil Libin in the summer of 2015. A slew of over executives followed Libin, a ‘changing of the guard’ as perhaps might be expected when a founding member departs. Since then, the company has quietly solidified its business in the years since then under the helm of CEO Chris O’Neill, who previously spent a decade with Google.

Under that context, the Chinese move makes plenty of sense since it happened under the previous Evernote management regime, but it also raises questions about Evernote’s own immediate future, and a potential IPO. The company isn’t saying anything on that now, but it would be quite something if the business unit it set up in China went public before the mothership.

from TechCrunch

Y Combinator alum Meesho, one of several “social selling” startups gaining speed in India, will add more features to its e-commerce platform after closing a $11.5 million Series B led by Sequoia India. Existing investors SAIF Partners, Y Combinator and Venture Highway also returned for the round, which brings the Bangalore-based startup’s total funding so far to $15 million. Its last round of funding, a $3.4 million Series A, was announced last October.

Like social selling competitors including GlowRoad and Zepo, Meesho’s model combines dropshipping from its wholesale partners with a comprehensive suite of e-commerce tools and services. This reduces overhead while making it easy for sellers, who Meesho says includes many housewives, students and retirees, to set up an online business through WhatsApp, Facebook and other social media.

Meesho’s tools include an online platform that allows sellers to manage purchases and process payments, as well as a network of wholesale suppliers (its main categories are currently fashion and lifestyle items) and logistics providers. In other words, it offers almost everything its vendors need to start selling online. This leaves vendors responsible for customer acquisition, picking what items they want to include in their online shops and marketing them.

This reselling model appeals to small stores, as well as individuals, who want to make more money but don’t want the expense of setting up an e-commerce business from scratch and carrying inventory. Meesho’s rivals include e-commerce startups like GlowRoad, Shopmatic and Zepo, which have also recently raised large funding rounds. All of these companies attract sellers by offering a significant amount of help with order management, payment processing, fulfillment and logistics.

In order to differentiate, chief executive officer Vidit Aatrey, who co-founded Meesho in 2015 with Sanjeev Barnwal, its chief technology officer, tells TechCrunch it focuses on product quality, pricing and personalization to help resellers improve their sales and customer service. Meesho claims that more than 800,000 resellers have used its platform and that a “typical” reseller earns between 20,000 to 25,000 rupees per month (about $298 to $373).

In a press statement about the funding, Sequoia India managing director Mohit Bhatnagar said “Social commerce is the future of e-commerce in India. People buy from people they trust, and that’s what Meesho enables.  Entrepreneurs, many of them women, use the Meesho platform to recommend, customize and sell to their family and friends. Social selling is a huge trend and Sequoia India is excited to partner with Meesho, which is the early leader in this space.”

Aatrey says Meesho’s Series B capital will be used to hire more people for its tech and product teams in order to build a suite of new customer acquisition and selling tools. The startup also plans to add more personalization options for its resellers and product categories.

from TechCrunch