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February 24, 2019
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On-demand logistics startup Lalamove raises $300M for Asia growth and becomes a unicorn

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Lalamove, a Hong Kong-based on-demand logistics startup, has closed a $300 million Series D round as it seeks expansion across Asia. In doing so, the company has officially entered the unicorn club.

Founded in 2013 by Stanford graduate Shing Chow, Lalamove provides logistics and delivery services in a similar style to ride-hailing apps like Uber but it is primarily focused on business and corporate customers. That gives it more favorable economics and a more loyal customer base than its consumer-focused peers, who face discount wars to woo fickle consumers.

This new round is split into two, Lalamove said, with Hillhouse Capital leading the ‘D1’ tranche and Sequoia China heading up the ‘D2’ portion. The company didn’t reveal the size of the two pieces of the round. Other investors that took part included new backers Eastern Bell Venture Capital and PV Capital and returning investors ShunWei Capital — the firm founded by Xiaomi CEO Lei Jun — Xiang He Capital and MindWorks Ventures .

The deal takes Lalamove to over $460 million raised to date, and it follows a $100 million Series C that closed in late 2017. Lalamove isn’t disclosing a valuation but Blake Larson, the company’s head of international, told TechCrunch that it has been “past unicorn mark for quite some time [but] we just don’t talk about it.” That figures given the size of the round and the fact that Lalamove was just shy of the $1 billion mark for that Series C.

The Lalamove business is anchored in China where it covers over 130 cities with a network of over two million drivers covering vans, cars and motorbikes.

Beyond China, Lalamove is present in its native Hong Kong — where Uber once briefly tried a similar service — Taiwan, Vietnam, Indonesia, Malaysia, the Philippines and Thailand, where it works with popular chat app Line. All told, it covers 11 cities outside of China and this new capital will go towards expanding that figure with additional city launches in Southeast Asia and entry to India.

“If we do this well, then we are in countries that are more than half the world’s population,” Larsen said in an interview, although he didn’t rule out the potential for Lalamove to expand beyond Asia in the future.

There are also plans to grow the business in mainland China in terms of both geography and new services. Already, Lalamove has begun to offer driver services, starting with financing packages to help drivers with vehicle purchasing, and it is developing dedicated corporate offerings, too.

Lalamove CEO Shing Chow started Lalamove in late 2013, his past roles have included time with Bain & Company, a number of startup ventures — including a Hong Kong-based skin center — and a stint as a professional poker player

Overall, the business claims to have registered 3 million drivers to date and served more than 28 million users across all cities. With its headquarters in Hong Kong, it employs some 4,000 people across its business.

Rival GoGoVan exited through a merger with China-based 58 Suyun in 2017, at a claimed valuation of $1 billion, but Lalamove has remained independent and stuck to its guns. Larson said that already it is profitable in “a significant amount” of cities and typically, he said, the blueprint is to reach profitability within two years of opening a new location.

“The focus has always been on sustainable growth and we’re very strong on the cash flow front,” the former Rocket Internet executive added.

Larson and Lalamove have been very forthcoming in their desire to go public in Hong Kong, noting so publicly as early as 2017 at a TechCrunch China event in Shenzhen. That desire is still evident — “we’re very proud to be from Hong Kong and Hong Kong would be a good place for an IPO,” Larson said this week — but still the company said that it has no particular plan on the cards, despite its consumer-focused peers Uber and Lyft lining up IPOs in the U.S. this year.

“We don’t spend maybe even five minutes a year talking about it,” Larsen told TechCrunch. “The discussion is really ‘Let’s make sure we’re IPO ready’ because sometimes there are macroeconomic conditions you can’t control.”

Clearly, investors are bullish and it is notable that Lalamove’s new round comes at a time when many Chinese companies are downsizing their staff, with the likes of Didi, Meituan and JD.com announcing cuts and refocusing strategies in recent weeks.

“[Lalamove CEO and founder] Shing is a role model for Hong Kong’s new generation of innovative entrepreneurs,” said Sequoia China founder and managing partner Neil Shen. “Raised in Hong Kong and educated at Stanford University, Shing returned and plunged himself in the entrepreneurial wave of ‘Internet Plus,’ becoming a figure of entrepreneurial success.”

News Source = techcrunch.com

Alibaba’s Ant Financial buys UK currency exchange giant WorldFirst reportedly for around $700M

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Ant Financial, the financial services behemoth affiliated with Chinese e-commerce giant Alibaba, has made its first big move into Europe. It’s acquired London-headquartered payments company WorldFirst in a deal that sources tell us is valued at around $700 million.

(That price would also line up with multiple reports from December claiming the two were in talks for an acquisition of around £550 million, or $717 million at current exchange rates.)

This isn’t your average multi-hundred million dollar acquisition. The deal was confirmed by WorldFirst in a note to customers while Alibaba, which curiously didn’t put out an official press release, acknowledged the acquisition to us through a spokesperson.

Yet despite a relatively under-the-radar outing, the deal has potentially significant consequences. It not only underscores the strong market connections between China and Europe, but also the margin (and thus strategic) pressures that many smaller remittance companies are under in the wake of larger companies like Amazon building its own money-moving services, as well as competition from local players in Asia.

One of a number of globally active money remittance services, 15-year-old WorldFirst lets businesses and consumers move money between countries at prices that are lower than regular banks.

The company claims to have transferred over £70 billion ($90 billion) for customers since 2004, with more than one million transfers made each year. WorldFirst is a player in the competitive remittance market, in which migrant workers send money home to family, who can make transfers online or in person at WorldFirst outlets.

Ant Financial is best known for its Alipay service, which is China’s dominant mobile payment app with over 550 million registered users. Alibaba owns one-third of Ant, which is valued at as much as $150 billion, and it has been pushing to expand its empire outside of China and beyond Asia Pacific, too.

“Alipay and WorldFirst’s capabilities and international footprints are highly complementary,” WorldFirst co-founder and chief executive Jonathan Quin wrote in an internal memo obtained by TechCrunch.

According to Quin, WorldFirst will retain its brand and become a wholly-owned subsidiary of Ant Financial. Many merchants in the UK already accept Alipay, which has expanded to cater for Chinese tourists spending money overseas.

“The tie-up will add WorldFirst’s international online payments and virtual account products to Alipay’s range of technology solutions,” an Ant Financial spokesperson told TechCrunch without disclosing the size of the buyout.

WorldFirst has been financed by private equity investors and, as a private company, it keeps its financial details closely held, but in August 2018 it noted that it had transferred more than $95 billion for some 160,000 customers — businesses and individuals included. A source told us its GMV was around $10 billion a year.

But sources noted that it was under pressure of its own that would have made securing a deal with Ant even more of a priority.

“That whole sector of payments from the West to China sellers for e-commerce is under massive margin pressure from Amazon going direct with its own service, plus new China based entrants PingPong, LianLian and Airwallex,” one executive very close to the remittance space told us. “WorldFirst had recently seen low to declining growth because of this.” Another source said that it had been shopping itself around.

(The Amazon reference is related to Amazon PayCode, a new service it has built with Western Union to let people in markets where Amazon has not launched a local site to pay for goods in local currencies on its platform. The deal was first announced in October last year, and has seen the two companies offering payment alternatives in places like Thailand and Kenya to remove the need to transfer payments in other ways, via Alipay or whatever transfer service a seller or buyer might use.)

The acquisition gives Ant Financial a massive international boost, and for the first time a presence in Europe, but it comes amid some stumbles for the company in its other attempts to expand internationally.

Notably, the company agreed to acquire Nasdaq-listed MoneyGram for $1.2 billion in 2017 after it won a bidding war for the global payment company. Ultimately, however, the deal was blocked by the U.S. government. Bruised by the episode, which set its plans back by a year, Ant went on to raise an enormous $14 billion funding round last summer during which time it presumably kicked off the search for a MoneyGram alternative.

While WorldFirst is based out of the UK, the company last year made a key move to expand its US operations when it was announced in August that it would acquire the retail money transfer business of San Francisco-based startup Wyre, which had built the network on blockchain technology but was selling it to focus on the other side of its business, providing currency exchange APIs to larger B2B customers.

It looked like all systems go for WorldFirst to move deeper in the US after that. But then, the company abruptly announced on February 20 that it planned to close the U.S-based business. The move may have been made to prevent a repeat of that scuppered MoneyGram acquisition.

WorldFirst is closing its business in the U.S. in a move widely seen as a precursor to its acquisition by Ant Financial

Outside of the U.S. and China, Ant Financial has aggressively expanded its presence in Asia through a series of investment deals that have seen it put $200 million into Kakao Pay in Korea, and find similar deals in Southeast Asia. The overall strategy appears to be to replicate the success of Alipay in China, where it offers mobile payments and digital financial services that cover loans, banking and wealth management.

In a show of its global ambition, Alipay just this week announced a deal to bring its payment option to U.S. Walgreens stores. A previous partnership with point-of-sale company First Data added Alipay to four million retail partners Stateside, and the company has similar deals in Europe and parts of Asia.

News Source = techcrunch.com

GoEuro rebrands as Omio to take its travel aggregator business global

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European multimodal travel booking platform GoEuro has announced a change of name and destination: Its new ambition is to go global, scaling beyond its regional grounding to tackle the challenge of intercity travel internationally — hence needing a more expansive brand name.

The name it’s chosen is Omio, pronounced with the stress on the ‘me’ sound in the middle of the word.

GoEuro unveiled a new brand identity late last year — which it says now was preparing the ground for this full rebranding.

So why Omio? CEO and founder Naren Shaam tells TechCrunch the new name was chosen to be memorable, lighthearted and neutral. A word that travels inoffensively across languages was also clearly essential.

“It took a while — probably eight months — to do the search on the name,” he says. “The hard thing about the name is a few criteria we had. One was that it had to be short, easy to remember, and four letter names are just non-existent now.

“It had to be lighthearted because travel inherently comes with a lot of stress to consumers… Every time you book travel it’s a lot of anxiety and then relief after you book it etc. So we want to change that behavior to customers; saying we will take care of your journey.”

The multimodal travel startup, which was founded back in 2012, also says it’s happy to have been able to retain a ghost of its old brand — thanks to the double ‘o’ in both names — which it intends to suggestively stand in for the beginning and end of a journey.

In Europe the travel aggregator tool that’s been known since launch as GoEuro — and soon, within a matter of weeks, Omio, everywhere it operates — has some 27 million monthly users tapping into the convenience of a platform that knits together train travel, bus trips, flights and most recently ferries to offer the most comprehensive coverage available of longer distance travel options in the region.

Europe is heavily networked for transport, with multiple intercity travel options to choose from. But it is also massively fragmented across a huge mix of providers (and languages) making it challenging for travellers to navigate, compare and book across so many potential options.

Taming this complexity via a multimodal search and comparison tool that now also integrates booking for most ground-based travel options (and some flights) on one platform has been GoEuro’s mission to-date. And now it’s Omio’s tackle globally.

“Global transport is not on a single product. What we bring is way more than just air, in terms of all ground transportation,” says Shaam. “So for me the problem of how do I get from Kyoto to Tokyo, or Rio to Sao Paulo. Or somewhere in Southeast Asia in Thailand is still a global problem. And it’s not yet solved. And so for us it’s the right time to evolve the brand… It’s definitely time to step out and say we want to build a global brand. We want to be that transport product across the world where we can serve all transport globally.”

While GoEuro is in some senses a quintessentially European business — Shaam says he “couldn’t have imagined” building a multimodal transport platform out of the US, for instance, where travel is so dominated by airlines and cars — he suggests that sets the business up to tackle similar complexity elsewhere.

Putting in the hard graft of negotiating partnerships and nailing technical integrations with multiple transport providers, large and tiny, also isn’t the sort of tech business prone to fast-following platform clones. So Omio suggests competition at a global scale will most likely be piecemeal, from multiple regional players.

“When I look beyond Europe the problem that I experienced in Europe in 2010 [which inspired me to set up GoEuro] is definitely a problem I experience still globally,” he says. “So when we can figure out how to bring 100,000 remote train and bus stations plugged into a uniform, normalized product and then give a single-click mobile ticket that works everywhere why not actually solve this problem globally?”

That translates into having “the engineering and the product and the means” to scale what GoEuro has done for travel in Europe internationally, moving to other continents with their own blend and mix of transport options and challenges.

Shaam notes that Omio employs more than 200 engineers within a company that has a staff of 300 — emphasizing also that the partnerships plus all the engineering that sits behind the aggregator’s front end take a lot of resource to maintain.

“I agree it is such a European startup. And it has served us well to get 27M monthly users traveling across Europe. Last year alone we served something like eight million unique routes. So the density of routes that we have is great. We already have global users; we have users from 100+ countries,” he says, adding: “If you look at Europe, European companies are starting to go on the global stage more and more now.

“You can see Spotify being one of the largest global tech companies coming out of Europe. You’ve seen some in the fintech space. Industries where there’s heavy fragmentation in Europe allow us to build global products because Europe is a great product market.”

GoEuro — now Omio — founder and CEO, Naren Shaam

On the international expansion horizon, Omio says its considering expanding into South America, Asia and the U.S. Although Shaam says no decisions have yet been taken as to the regions and markets it might move into first.

He also readily accepts the goal of building a global travel aggregator is a long term mission, with the partnerships, engineering and legacy technology integrations that will have to underpin the expansion all requiring time (and money) to work through.

There’s also no suggestion that Omio intends to offer a more lightweight transport proposition as a strategy to elbow its way into new markets, either.

“If we go into the U.S. the goal is not to just offer another airline product,” he says. “There’s enough websites out there that do exactly that. So we will offer something different. And our competition will also be regional companies that offer something similar in each market.”

In a year’s time, Shaam says he hopes to have further deepened the platform’s coverage and usage in Europe — noting there are more transport dots to connect in markets including Portugal, Ireland, Norway, Sweden, plus parts of Eastern Europe (as well as “very heavily fragmented” bus providers in Spain and Italy).

By then he says he also wants to have “a clear answer to what are the two next big continents we want to expand into and have people that are ready to do that”.

So connecting the dots of intercity travel is very evidently a far slower-paced business than heavily VC-backed innercity transport plays — which have attracted multiple billions in funding in very short order thanks to fast usage velocity and revenue growth vs GoEuro’s modest (by contrast) ~$300M.

Nonetheless Shaam is convinced the intercity opportunity is still “a big market”. Perhaps not as massive as micromobility, ride-hailing and so on but still big and relatively under-invested, as he sees it.

So how will GoEuro as Omio approach scaling a travel business that is, necessarily, so very grounded in fixed and non-uniform transport infrastructure? He suggests the business will be able to draw on what is already years of experience integrating with transport providers of various types and sizes to support the new global push.

It’s developed what he describes as an “a la carte” menu of products for different sized travel providers — arguing this established menu of tools will help scale into new markets in fresh geographies, even while conceding there are other aspects of the business that will not be so easily replicable.

“Over time we built a lot of tooling that adapts to the different types of suppliers. So, for example, if you’re a large state-owned operator… that has very different systems built for decades basically vs a tiny bus company that runs from Naples to Positano that nobody even knows the name of or no technology it stands on we have different products that we offer to each of them.

“We have all the tooling built out so it’s basically ‘plug and play’ for us to do. So this thing doesn’t change. That’s portable.”

What will be new for Omio is international product market fit, with Shaam saying, for example, that it won’t necessarily be able to rely on the same sort of network effects it sees in Europe that help drive usage.

He also notes mobile penetration rates will differ — again requiring a different approach to serving customer needs in new regions such as Latin America.

“It’s not quick,” he concedes. “That’s why we’d rather launch now because I can’t tell you that in three months we’ll have had four more continents covered, right. This is a long term play but we’ve raised enough capital to make sure we’re here for that long term journey.”

“We have a name that people know and we can build technology,” he adds, expanding on what Omio can bring to the table as it tries to sell its platform to travel providers everywhere. “We’ve worked with 800+ suppliers. So from a commercial standpoint, people know who we are and how much scale we can bring in terms of their fixed cost businesses — so we can sell a lot of tickets for all of them. We can bring international tourists from a global audience. And we can really fill up seats. So people know that you put your supply on our product and we instantly scale because the existing demand is just so large.”

The Berlin-based startup closed a $150M funding round last fall so it’s not short of immediate resources to support the new hires it’ll be looking to add to start building out its global roadmap.

Shaam also notes it brought in more Asian capital with its last round, which he says he hopes will help “with this globalization capital”. Most of the investors it added then are also geared towards longer term returns vs traditional VC, he adds.

Omio is not currently in the process of raising another funding round, according to Shaam, though he confirms it does plan to raise more in future as it works towards the global vision of a single platform to help travellers move all over the world.

“The amount of capital that’s gone into intercity transport is tiny compared to innercity transport,” he notes. “That means that if you’re still going after a global problem that we want to solve that means that we need to raise capital at some point in the future. For now we’re just very comfortable with what we have but it doesn’t mean that we’ll stop.”

One potential future market Omio is likely to approach only very cautiously is China.

A b2c partnership with local travel booking platform Qunar, which GoEuro inked back in 2017, to link Chinese consumers with European travel opportunities, means Omio has a commercial reason to be sensitive of any moves into that market.

The complexity and challenge of going into China as an outsider is of course another major reason to go slow.

“I want to say very carefully that China is a market we need a lot more time to understand before we go into, as I think there’s enough lessons learned from all the tech companies from the West,” says Shaam readily. “It’s not going to be a rushed decision. So in that case the partnership with have with Qunar — I don’t see any changes in the near term because going into China is a big step for us. And it’s not an easy decision anyway.”

News Source = techcrunch.com

Indonesia-focused Intudo Ventures raises new $50M fund

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Intudo Ventures, a VC firm focused on Indonesia, has closed a new $50 million fund. This is Intudo’s second fund to date following its $20 million debut last year.

The firm is a relative newcomer to Southeast Asia but a key differentiator is that it is solely focused on Indonesia, which is the world’s fourth most populated country with over 260 million people and the region’s largest economy.

It is also the dominant market for tech and the internet in the region. According to a much-cited report from Google and Singapore sovereign fund Temasek, Indonesia’s online economy will grow to $100 billion by 2025 from $8 billion in 2015. That’s a dominant chunk of the Southeast Asia market, which is predicted to reach $240 billion as a whole.

A Google-Temasek report forecasts significant growth across Southeast Asia, with Indonesia taking the lead

Another factor that separates Intudo from other firms is its approach to working with local partners. Most VC firms in Southeast Asia tend to source their LPs from Singapore, West Asia and China with a smattering of local families or conglomerates who wield influence on the ground in markets. In Indonesia, Intudo claims to have over 20 families among its LP base, as opposed to the conventional approach of two or three.

However, founding partners Eddy Chan and Patrick Yip told TechCrunch that the majority of its capital comes from U.S-based LPs, with no investor providing more than 10 percent of the fund’s capital. Some of its overseas backers include Founders Fund, the family office of former Walgreens CEO Greg Wasson, Japan’s World Innovation Lab and Taiwan’s CTBC Group, according to the partners.

“Indonesia is a market we feel is dominated by about 100 core families, we are back by 20-some of the most influential groups in the market,” Chan said in an interview.

The goal is to help Intudo’s portfolio companies tap into opportunities from those LPs and their business holdings.

“When we sign up LPs, first and foremost we want to be able to engage the network and resources for the startup we invest into. We find a fit and hopefully provide some kind of unfair advantage… a leg up when they want to compete,” Chan explained.

“We’re not biased to any one family, we invest in a purely financially-driven manner,” added Yip.

Intudo Ventures’ founding partners Eddy Chan and Patrick Yip

Yip provides the on-the-ground presence having returned to Indonesia from the U.S. 15 years ago. Chan is in the U.S. for eight months a year, he said, where he spends much of his time seeking out Indonesia talent studying in the U.S. for prospective hiring or incubating new projects.

“We have a long-term view that we either place them in our portfolio, found companies with them or put them in with a Bain, or McKinsey type company,” Chan explained.

Yip formerly operated an investment firm associated with Goldman Sachs and spent time at retail giant CP, Chan, meanwhile has spent time as an investor and co-founded smart light company Leeo before leaving in 2015 following a restructuring.

The fund itself is focused on Series A and pre-A with some Series B with an initial investment of $500,000-$5 million with more for follow-on rounds, the partners explained. But the focus is on doubling down on a few prospects, with the fund slated to do around 12-15 deals through its lifecycle.

Chan said that when it comes to going beyond the fund’s deal range the thesis is to involve its LPs who, he claimed, are keen to invest in Indonesia further down the line. With just a year since Intudo’s debut fund closed that theory has not been tested yet although one early bet, BeliMobilGue just raised a $10 million Series A. Others in the portfolio include co-working venture CoHive, payment gateway company Xendit and fitness startup Ride Jakarta.

For now, at least, Intudo intends to remain laser-focused on Indonesia.

“Down the road will we add other countries? Time will tell,” Chan said. “This is our bread and butter and where we’re strong and what we have committed to for our LPs.”

News Source = techcrunch.com

PayPal shutters Malaysia office as part of customer service reorg

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Payment giant PayPal has closed its office in Malaysia as part of a restructuring of its customer support teams.

The office, located in capital city Kuala Lumpur, was home to a team of customer service agents that catered to PayPal users across Asian region and beyond. Now, its responsibility will be assumed by other offices, which include locations in the Philippines, China and India.

A PayPal spokesperson explained to TechCrunch that the move is aimed at consolidating a range of different employees at PayPal offices to help blend a range of employees under the same roof. The closure of the office doesn’t impact the PayPal service in Malaysia.

PayPal confirmed the office will close this year in a statement. The company emphasized its efforts to transition affected staff into new jobs both inside PayPal and with other companies:

We have made the difficult decision to close PayPal’s Operations Centre in Malaysia by the end of this year. The work currently being delivered at our Operations Centre in Malaysia will gradually move to other locations. This internal reorganization does not affect our customers in Malaysia, who can continue to use our products and services as normal.

We regularly review our global site structure and staffing to ensure the support and services we provide at each site best meet the evolving demands of our customers. Our Operations Centre in Malaysia has done a remarkable job serving our customers since the site opened in 2011. However, this decision was made to align our investment in sites that are better equipped to support the future needs of our customers and our company.

Our priority now is to do everything we can to set up our employees for future success and we are fully committed to helping them as they transition to the next step in their careers. As well as offering comprehensive separation packages, we have built an on-site careers center to promote job opportunities and provide immediate assistance to employees.

PayPal was the first company to pioneer digital payments but it has fallen behind in Asia and other emerging markets as mobile payment players and messaging apps have stepped up.

WeChat, which offers integrated QR code payments, dominates China, while WhatsApp is experimenting with payments in India, its largest market with 200 million active users, in a move that may well expand to other markets including Southeast Asia, where it is widely used. Other challengers with digital payments include Line, which offers payments in Japan, Taiwan and Thailand, and Alibaba’s Ant Financial, a major player in China that is making aggressive moves in Korea and Southeast Asia.

News of the Kuala Lumpur office closure was first reported by Malaysian media.

News Source = techcrunch.com

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