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September 22, 2018
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Cleo, the ‘digital assistant’ that replaces your banking apps, picks up $10M Series A led by Balderton

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When Cleo, the London-based ‘digital assistant’ that wants to replace your banking apps, quietly entered the U.S., the company couldn’t have expected to be an instant hit. Many better funded British startups have failed to ‘break America’. However, just four months later, the fintech upstart counts 350,000 users across the pond — claiming more than 600,000 active users in the U.K., U.S. and Canada in total — and says it is adding 30,000 new signups each week. All of which hasn’t gone unnoticed by investors.

Already backed by some of the biggest VC names in the London tech scene — including Entrepreneur First, Moonfruit founder Wendy Tan White, Skype founder Niklas Zennström, Wonga founder Errol Damelin, TransferWise founder Taavet Hinrikus, and LocalGlobe — Cleo is adding Balderton Capital to the list.

The European venture capital firm, which has previously invested in fintech unicorn Revolut and the well-established GoCardless, has led Cleo’s $10 million Series A round, in which I understand most early backers, including Zennström, also followed on. One source told me the Series A gives the hot London startup a post-money valuation of around £30 million (~$39.7m), although Cleo declined to comment.

In a call with co-founder and CEO Barney Hussey-Yeo, he explained that the new capital will be used to continue scaling the company, with further international expansion the name of the game. Hussey-Yeo says Cleo will be targeting Western Europe, the Americas, and Australasia, aiming to launch in a whopping 22 countries in the next 12 months, as Cleo bids to become the “default interface” for millennials interacting and managing their money.

Primarily accessed via Facebook Messenger, the AI-powered chatbot gives insights into your spending across multiple accounts and credit cards, broken down by transaction, category or merchant. In addition, Cleo lets you take a number of actions based on the financial data it has gleaned. You can choose to put money aside for a rainy day or specific goal, send money to your Facebook Messenger contacts, donate to charity, set spending alerts, and more.

However, in the context of traction and Cleo’s broader global ambitions, it is the decision not to become a bank in its own right, that Hussey-Yeo feels is really beginning to bear fruit. His argument has always been that you don’t need to be a bank to become the primary way users interface with their finances, and that without the regulatory and capital burden that becoming a fully licensed bank brings, you can scale much more quickly. I have a feeling that strategy — and its pros and cons — has a long way to play out just yet.

News Source = techcrunch.com

EU antitrust regulator eyeing Amazon’s use of merchant data

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The European Union’s competition commission is looking into how Amazon uses data from retailers selling via its ecommerce marketplace, Reuters reports.

Competition commissioner Margrethe Vestager revealed the action today during a press conference. “We are gathering information on the issue and we have sent quite a number of questionnaires to market participants in order to understand this issue in full,” she said.

It’s not a formal antitrust probe at this stage, with Vestager also telling reporters: “These are very early days… we haven’t formally opened a case. But we are trying to make sure that we get the full picture.”

The Commission appears to be trying to determine whether or not third-party merchants selling on Amazon’s platform are being placed at a disadvantage vs the products Amazon also sells, thereby competing directly with some of its marketplace participants.

“You have these platforms that have sort of dual purpose, they are both hosting a lot of merchants to enable maybe the smaller guy to have his business, to be found, to do his commerce, and at the same time thgey themselves are merchants — big merchants. So they’re both hosts and they also do the merchant business themselves. And the question here is the about the data,” Vestager also said.

“Because if you as Amazon get the data from the smaller merchants that you host which can be of course completely legitimate because you can improve your service to these smaller merchants. Well, do you then also use these data to do your own calculations? As to what is the new big thing? What is it that people want? What kind of offers do they like to receive? What makes them buy things? And that has made us start a preliminary… antitrust investigation into Amazon’s business practices.”

Companies found to be in breach of EU antitrust rules can be fined up to 10 per cent of their global annual turnover.

We’ve reached out to Amazon for comment.

In recent years the ecommerce giant has greatly expanded the own-brand products it sells via its marketplace, such as via its Amazon Elements line, which includes vitamin supplements and baby wipes, and AmazonBasics — which covers a wide array of ‘everyday’ items including batteries and even towels.

The company does not always brand its own-brand products with the Amazon label, also operating a raft of additional own brands — including for kids clothes, women’s fashion, sportswear, home furnishings and most recently diapers, to name a few. So it is not always immediately transparent to shoppers on its marketplace when they are buying something produced by Amazon itself.

Meanwhile, tech giants’ grip on big data has been flagged as a potential antitrust concern by Vestager for several years now.

In a speech at the DLD conference back in 2016 she said: “If a company’s use of data is so bad for competition that it outweighs the benefits, we may have to step in to restore a level playing field,” adding then that she was continuing to “look carefully at this issue”.

It’s not clear how the Amazon probe will pan out but it signifies a stepping up of the Commission’s action in this area.

The EU also issued Google with a recordbreaking $5BN fine this summer, for abusing the dominance of its Android mobile operating system.

That fine followed another recordbreaking penalty in 2017, when Google was slapped with an $2.7BN antitrust fine related to its search comparison service, Google Shopping.

Google is appealing against both rulings.

News Source = techcrunch.com

Ostrichpillow Hood, the latest product from Studio Banana, is no joke

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I’m not going to lie, when Studio Banana released the original Ostrichpillow back in 2012, despite breaking all Kickstarter records at the time, I thought the whole thing might be an elaborate joke. Or, worse still, since the sleep-at-your-desk styled product had found popularity amongst people who worked at startups, Silicon Valley was now parodying itself.

Except that “transformative” design company Studio Banana is based in Europe, with offices based in London, Lake Geneva and Madrid. And 500,000 sales and five products later, the joke is arguably on its critics. As I’m fond of telling founders who ask for validation, ultimately it is the market that decides.

Enter the latest Ostrichpillow creation: the aptly named Ostrichpillow Hood. Aptly named because, well, it’s a hood. However, unlike the previous products in the range, which were designed to facilitate sleep in non-traditional places, the Ostrichpillow Hood, we’re told, is to be used in “everyday waking life”.

Specifically, by reducing the ability to see activity in the edges of your field of vision, it is intended to help you focus on the task at hand and/or reduce overstimulation, such as the kind induced by open plan co-working spaces.

The Ostrichpillow Original

“The product we’re launching now is the sixth of the different products that have emerged in the Ostrichpillow family and they’re catering to different needs,” Ali Ganjavian, co-founder of Studio Banana, tells me in a video call yesterday. “Ostrichpillow was really about complete isolation and it was really a statement product… So different products have different use-cases and different functions, and also different social acceptances”.

I suggest that the Ostrichpillow Hood may turn out to be broadly socially acceptable, not least for anyone already familiar with the original Ostrichpillow, but also because asking work colleagues to respect the need to focus is a lot different to asking them to ignore your need to take a nap at your desk. Ganjavian doesn’t degree, even though there is no doubt the two products share the same design heritage.

“A lot of the stuff we are thinking about now is about the state of mind,” he says, noting that throughout the working day we are bombarded with stimuli and information, from messaging apps, emails, social media, meetings and even something as innocuous as having to say hello to work mates. “[The Ostrichpillow Hood] is really about sheltering. It is not only a physical movement, there is psychology in the way it shelters you… it’s about shifting your mood”.

Next Ganjavian demonstrates the three positions the Ostrichpillow Hood is designed to be worn.

The ‘Hood’ position is for when you need to concentrate on something in public, for example when commuting or in an open plan office or coffee shop. Like wearing a pair of visually loud headphones, it also has the added effect of signalling to colleagues that you’d rather not be disturbed or are “wired in“.

The ‘Eclipse’ position, where the hood can be turned around to cover your face completely, is for when you need to truly switch off from your surroundings, such as to deeply think, take a short break or meditate. “If I’ve got my headphones on in that posture then what it allows me to do is to totally isolate myself in the same way I would with an Ostrichpillow but in a much more acceptable way,” says Ganjavian.

Finally, the ‘Hoop’ position, with the hood worn down around your neck, is designed to feel warm and cozy and turns the Ostrichpillow Hood into attire more akin to a fashion accessory.

Adds the Studio Banana co-founder: “What I find really exciting about this moment is that I currently work in between three different geographies, there is so much going on, and how do we create a tool or object that makes me feel good, helps me perform better, and helps me become more efficient, and also feeds that overall well-being that I’m looking for in my workplace. At the same time, I can just walk out into the street with it on and just go home and feel good about it”.

News Source = techcrunch.com

Zortrax launches a new high-speed, high-resolution printer, the Inkspire

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Zortrax has launched a new printer, the Inkspire, that prints using an LCD to create objects in high-quality resin in minutes. The printer – essentially an upgrade to traditional stereolithography (SLA) printers – uses a single frame of light to create layers of 25 microns.

Most SLA printers use a laser or DLP to shine a pattern on the resin. The light hardens the resin instantly, creating a layer of material that the printer then pulls up and out as the object grows. The UV LCD in the $2,699 Inkspire throws an entire layer at a time and is nine times more precise than standard SLA systems. It can print 20 to 36 millimeters per hour and the system can print objects in serial, allowing you to to print hundreds of thousands of small objects per month.

“The printer is also perfect for rapid prototyping of tiny yet incredibly detailed products like jewelry or dental prostheses. But there are more possible applications,” said co-founder Marcin Olchanowski. “Working with relatively small models like HDMI cover caps, one Zortrax Inkspire can 3D print 77 of them in 1h 30min. 30 printers working together in a 3D printing farm can offer an approximate monthly output of 360,000 to over 500,000 parts (depending on how many shifts per day are scheduled). This is how Zortrax Inkspire can take a business way into medium or even high scale production territory.”

The printer company, which is now one of the largest in Central Europe, explored multiple technologies before settling on this form of SLA printing.

“At the early stage of this project we were investigating the technology itself, and it seemed very unlikely we were able to create such a device,” said Olchanowski. “We tried SLA and DLP but we were not happy with these technologies. We perceived them undeveloped. But, step by step, we succeeded. We see huge prospects of development for resin 3D printing technology, because nowadays customers expect the higher quality of printed models.”

The company sells 6,500 printers yearly and will see $13.7 million in revenue this year. They are also selling resins for their new printers and they will ship in about two months.

Printers like the Inkspire are a bit harder to use than traditional extruder-based printers like Makerbots. However, the quality and print speed is far better and paves the way to truly 3D-printed production runs for one-off parts.

News Source = techcrunch.com

Kano’s latest computer kit for kids doubles down on touch

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Learn-to-code startup Kano, whose products aim to turn kids into digital makers, has taken the wraps off the latest incarnation of its build-it-yourself computer kit.

With the new flagship Kano is doubling down on touch interactions — urging kids to “make your own tablet”. The Computer Kit Touch packs a 10.1″ HD touchscreen, along with Kano’s now familiar bright orange wireless keyboard which comes with a built in trackpad.

While touch is becoming increasingly central to its products, Kano says the keyboard remains an important component of the product — supporting text-based coding apps which its platform also provides access to, as well as the more approachable drag-and-drop block-based coding systems that do really benefit from having a touchscreen to hand.

The kit, which Kano says is generally (but not exclusively) aimed at the 6-13 age range, is on sale from today, priced at $279.99 — via its website (Kano.me), as well as from selected retailers and e-tailers.

The Raspberry Pi powered computer is also getting increased storage capacity in this upgrade — of 16GB. But the main refresh is around updating Kano OS, Kano’s kid-friendly Pi topper, with expanded support for touch controls, according to founder Alex Klein .

Last year Kano combined touch and keyboard based interaction into a single product, the Computer Kit Complete — calling that a DIY laptop.

The 2018 refreshed version looks much the same, with enhancements generally behind the scenes and/or under the hood.

“The big moves this year are advancing the software and content ecosystem,” says Klein. “How it’s all integrated together.”

He points to another coding kit the team has up for pre-order, slated to ship next month — a co-branded Harry Potter gizmo in which kids get to build a motion-sensitive “coding wand” and use it to cook up their own digital spells, helped along by Kano’s software — adding: “With the Potter kit we’re bringing Kano code — to create a system, the ability to blend and change physics engines and sounds and particle systems — to tablets. So we’ve now got a touch-based interaction model for that e-product, as well as mouse and keyboard, and so we’ve brought that software system now to the Computer Kit Touch.

“You can code by dragging and dropping blocks with your fingers, you can paint and draw. You can change the pitch of a loop or a melody by running your fingers up and down and then using a change of a parameter mess with how quickly that melody changes, mess with the number of layers, you can make a beat or a loop using a touch-based digital audio workstation style X-Y plane. You can go into any one of our creative coding apps and pull in touch-based interactions, so instead of just using a mouse, a click and point, you can make an app that responds to swipes and taps, and different speeds, and in different locations.”

“On the touch kit itself there’s also a set of new content that demystifies how touchscreens work and peels back the layer of the screen and shows you what’s behind, and you’re kind of touching the intersection of the different copper wires and seeing what’s happening beneath,” he adds.

“There’s obviously a big hardware upgrade with the new ability to touch it, to take it with you. We’ve refined a lot of the components, we’ve improved the speed, the battery life. But really the core of it is this upgraded software that integrates with all the other kit.”

Talking of other kit, the learn-to-code space is now awash with quasi-educational gizmos, leaving parents in Western markets spoiled for choice of what to buy a budding coder.

Many more of these gizmos will be unboxed as we head into the holiday season. And while Kano was something of a startup pioneer here — a category creator, as Klein tells it — there’s now no shortage of tech for kids promising some kind of STEM-based educational benefit. So it’s facing an ever-growing gaggle of competition.

Kano’s strategy to stand out in an increasingly contested space is to fix on familiar elements, says Stein — flagging for example the popular game Minecraft — which runs on the Kano kit, and for which there’s a whole subsection of the Kano World community given over to hacking Minecraft.

And, well, aside from block-headed Minecraft characters it’s hard to find a character more familiar to children than the fictional wizard Harry Potter. So you can certainly see where Kano’s trying to get with the coding wand.

“We broke our first month pre-order target in one day,” he says of that forthcoming e-product (RRP ~$130). “There was massive coverage, massive traffic on our site, it was picked up all over the place and we’re very happy with the pre-orders so far. As are our retail partners.”

The Potter co-branding play is certainly Kano trying to make its products cast a wider spell by expanding the appeal of coding from nerdy makers to more mainstream child consumers. But how successful that will be remains to be seen. Not least because we’ve seen this sort of tactic elsewhere in this space.

Sphero, for example, is now rolling back the other way — shifting away from Star Wars co-branded bots to a serious education push focused on bringing STEM robotics to schools. (Although Kano would doubtless say a programmable bot that rolls is not the same as a fully fledged kit computer that can run all manner of apps, including familiar and fashionable stuff like Minecraft and YouTube.)

“We’re very pleased to see that this category that we created, with that Kickstarter campaign in 2013 — it’s become more than what some people initially feared it would be which was niche, maker ‘arcanery’; and it’s becoming a major consumer phenomenon,” he says. “This notion that people want to make their own technology, learn how to code and play in that way. And not just kids — people of all ages.”

On the hard sales front, Klein isn’t breaking out numbers for Potter kit pre-sales at this stage. But says the various incarnations of its main computer kit have shipped ~360,000 units since September 2014. So it’s not Lego (which has also moved into programmable kits) — but it’s not bad either.

In recent years Kano has also branched out into offering Internet of Things kits, previewing three code-your-own connected devices in 2016 — and launching Kickstarter campaigns to get the products to market.

It’s since shipped one (the Pixel kit) but the other two (a build-it-yourself camera kit and a DIY speaker) remain delayed — leaving crowdfunder backers waiting for their hardware.

Why the delay? Have Kano’s priorities shifted — perhaps because it’s focusing efforts on cobranded products (like the Potter wand) vs creating more of its own standalone devices?

“We are still committed to shipping the speaker kit, the camera kit,” Klein tells TechCrunch. “A big reason for [the delay] is not only the fact that the company is in a position now where we have mass distribution, we have great partners — perennially testing new product ideas — and we want to make sure that products are going to resonate with, not just a small group of people but many, many people, of many different age groups and interests before we release them.”

He also points out that any backers of the two devices who want refunds can get them in full.

Though he also says some are choosing to wait — adding that Kano remains committed to shipping the devices, and saying for those that do wait there will be a few extra bells and whistles than originally specced out in the crowdfunder campaign.

The delay itself looks like the market (and consumer tastes) moving quicker than Kano predicted — and so it finds itself wishing its products could deliver more than it originally planned (but without a wand to wave to instantly achieve that).

This is also a pitfall with previewing anything months or years ahead of time, of course. But the expense and complexity of building hardware makes crowdfunding platforms attractive — even for a relatively established brand like Kano.

“The delay is really unfortunate,” he adds. “We did say they would ship earlier but what we have done is we’ve offered any backer a full refund on the camera and the speaker if they don’t want to wait. But if they do wait they will receive incredible camera, incredible speaker. Both of them are going to benefit from the advancements made in low cost computing in the last year.

“The speaker as well is going to have elements that weren’t even part of the original campaign. On our side it’s critical that we get those products absolutely right and that they feel mass, and that they demystify not only coding and the Internet of Things, which was part of the original purpose, but in the case of the camera and the speaker there are elements that have come to the fore in more recent months like voice interaction and image recognition that we feel if our mandate is to demystify technology and we’re shipping a camera and a speaker… that’s kind of part of it. Make it perfect, make it of the moment. And for any backer who doesn’t want to wait for that, no problem at all — we’ll refund you 100%.”

Beyond reworking its approach with those perhaps overly ambitious connected devices, Kano has additional release plans in its pipeline — with Klein mentioning that additional co-branded products will be coming next year.

He says Kano is also eyeing expanding into more markets. “There’s a significant market for Kano even beyond our traditional leading position amongst 6-13 year olds in the US and the UK. There’s a really strong market for people who are beyond the US and the UK and we’re now at a scale where we can start really investing in these distribution and localization relationships that have come our way since year one,” he says.

And he at least entertains the idea of a future Kano device that does away with a keyboard entirely — and goes all in on touch — when we suggest it.

“Would we move to a place where we have no keyboard in a Kano computer? I think it’s very possible,” he says. “It might be a different form factor, it might be smaller, it might fit in your pocket, it might have connectivity — that kind of stuff.”

Which sort of sounds like Kano’s thinking about making a DIY smartphone. If so, you heard it here first.

The five and a half year old London-based startup is not yet profitable but Klein flags growth he dubs “fast enough” (noting it doubled sales year-over-year last year, a “trend” he says continued in the first half of this year), before adding: “It’s not impossible for us to get to profitability. We have a lot of optionality. But at the moment we are making investments — in software, in team — we have partner products coming out like Harry, we’ll have more coming out next year. So in terms of absolute positive EBITDA not yet but we are profitable on a units basis.”

Kano closed a $28M Series B last year — and has raised some $44.5M in all at this stage, according to Crunchbase. Is it raising more funding now? “I think any entrepreneur who is looking to do something big is always in some sense keeping an eye out for sources of capital,” replies Klein. “As well as sources of talent.”

He points by way of a connected aside to this study of C-suite execs, carried out by Stripe and Harris poll, which found that access to software developers is a bigger constraint than access to capital, saying: “I read that and I thought that that gap — between the 1% of 1% who can develop software or hardware and the rest of us — is exactly the challenge that Kano set out to solve from a consumer and education perspective.”

“In terms of fundraising we do get a lot of inbound, we have great investors at the moment,” he adds. “We do know that the scale of this particular challenge — which is demystify technology, become synonymous with learning to code and making your own computers — that requires significant support and we’ll be continuing to keep our eyes out as we grow.”

 

News Source = techcrunch.com

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