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April 21, 2019
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Y Combinator

Ro, a direct-to-consumer online pharmacy, reaches $500M valuation

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Venture capitalists have valued direct-to-consumer telehealth business Ro at $500 million with an $85 million Series B financing, sources confirm to TechCrunch.

The fresh round of funding comes seven months after Ro — widely known for its men’s health brand Roman, a cloud pharmacy for erectile dysfunction — made headlines with an $88 million Series A. 

Ro didn’t immediately respond to a request for comment.

The company’s outsized Series A, led by FirstMark Capital, was used to launch and scale its second digital health brand, “Zero,” a treatment plan meant to help men and women quit smoking. Zero sells a $129 kit complete with a month’s worth of prescription cessation medication Bupropion, nicotine gum and access to an app used to track progress.

Its latest infusion of capital will likely be used in part to support its third personalized health brand, Rory, a purveyor of women’s health products the business unveiled last month. Targeting menopausal women, Rory offers six products treating four conditions — including prescription medication and supplements for hot flashes, over-the-counter treatments for insomnia, prescription vaginal estrogen cream and an all-natural water-based lubricant for vaginal dryness and Latisse, which helps grow eyelashes — which are available for purchase and direct-to-consumer delivery.

“Right now, we have [millions] of women experiencing menopause,” Rory co-founder Rachel Blank told TechCrunch last month. “They are walking around and frankly, their vagina hurts and they are uncomfortable. Really, what we are building at Rory is a lot of the educational content around this to let women know they have choices and they can take control during this phase of life where they feel like their bodies are rebelling against them.”

When asked whether Ro was fundraising to bolster the new effort, Blank, a former investor at Ro-backer General Catalyst, declined to comment. Curiously, a source with knowledge of Ro’s fundraising said there was no mention of the imminent launch of its women’s brand, Rory, in its pitch to VCs earlier this year.

Ro was started by a trio of entrepreneurs: Rob Schutz, Saman Rahmanian and chief executive officer Zachariah Reitano in 2017. Reitano had previously co-founded a Y Combinator -backed startup called Shout, Rahmanian is a co-founder of the WeWork-acquired business Managed by Q, and Schutz worked as the vice president of growth for Bark&Co before building Ro.

The startup initially launched under the name Roman, which became its flagship brand when the business adopted the umbrella name Ro last year. Roman offers men a $15 online doctor’s consultation, which, if they are an appropriate candidate, gives them access to an instant prescription for Viagra, Cialis or generic drugs that can be filled at Roman’s in-house cloud pharmacy.

In a 2017 interview with TechCrunch’s Josh Constine, Reitano said he began experiencing ED at 17-years-old: “I think in a good way I’ve become numb to the embarrassment,” he said. “I remember the embarrassment of having the condition with no solution, and that’s much worse than sharing the fact that I had it and was able to fix it myself.”

Ro has previously raised $91.1 million in venture capital funding, hitting a valuation of $154 million with its Series A, according to PitchBook. Its investors include Initialized Capital, Box Group and Slow Ventures, as well as angels like Y Combinator partner Aaron Harris, Benchmark’s Scott Belsky and the chief executives of Casper, Code Academy and Pill Pack.

Founded just two years ago, Ro was amongst the first of a new cohort of men’s health businesses supported by VCs. Hims, one of the leading brands in the space, has similarly landed big rounds of capital from top-tier investors. Most recently, Hims brought in $100 million at a $1 billion valuation from an undisclosed growth-stage fund.

Several other companies, including Numan, Manual and Thirty Madison, have raised capital to support men with hair loss treatments and ED medications delivered to discreetly their doorsteps, among other products.

News Source = techcrunch.com

YC alum Keeper raises $1.6M to help gig workers pay taxes

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Every year around this time, Uber drivers, Wag dog walkers, Bird scooter chargers, social media influencers and other gig economy workers face the unsightly challenge of paying their taxes.

Companies like Uber and Lyft classify their drivers as independent contractors, which means you aren’t given any benefits and the company doesn’t withhold any of your taxes. This puts gig workers in a tough position come tax day, especially if they aren’t prepared to shell out big sums to the IRS.

Keeper, a startup that’s just graduated from the Y Combinator startup accelerator, is here to make taxes a lot easier for that demographic and to save them as much money as possible.

Founded by childhood buddies and former debate partners Paul Koullick and David Kang, the San Francisco-based company has raised $1.65 million on a $10 million valuation in a round led by Jake Jolis of Matrix Partners.

Keeper co-founders Paul Koullick (left) and David Kang

The pair entered YC this winter with a big idea and little to show for it. Come March, they had developed a full-fledged product and accumulated 200 paying customers. With their first round of funding, they plan to add to their small but growing team and acquire 10,000 customers in the next 18 months.

“There are some companies that are trying to go very broad and trying to cover the whole spectrum of benefits; we’re just trying to go really deep on taxes,” Kang told TechCrunch. “This is a pain point. This is where people are definitely leaving the most money on the table.”

Keeper guesses the average gig worker in the U.S. is overpaying their taxes by more than 20 percent, or about $1,550 for those making more than $25,000 per year. Why? Because these independent contractors aren’t claiming the tax write-offs available to them, like phone bills, car maintenance fees and even a Spotify subscription for drivers.

“If you’re a dog walker, there are so many things you need to be writing off, like your poop bags, your extra leashes, your parking,” Koullick told TechCrunch. “This population needs the guidance of an accountant, but they can’t afford one and we’re trying to create this third option.”

Like a personal accountant, Keeper monitors gig workers’ expenses all year in search of possible tax deductions, saving each user $173 per month on average, it estimates. The startup uses Plaid to follow its customers’ transaction history, and once per day sends a text message asking if there are any tax write-offs to note. Over time, it gets smarter and smarter, keeping the SMS questions to a minimum.

Keeper doesn’t fully file taxes for 1099 workers yet, but will begin offering a quarterly tax filing service in June. Next year, it plans to offer a full-year tax-filing service.

Koullick, Keeper’s chief executive officer, worked in product at Square before joining another startup, called Stride, where he built and scaled Stride Tax, a mileage and expense-tracking app. Kang, for his part, has spent most of his post-graduate career at a trading firm in Chicago, focused on quantitative modeling. The two toyed with a few startup ideas before landing on Keeper’s tax business.

“We wanted to build something that actually mattered to real people,” Koullick explained. “And we wanted to do it in the financial space where we were happy to wade through ugly details and systems on their behalf.”

Keeper isn’t the only recent YC alum focused on the growing gig economy. Another, Catch, sells health insurance, retirement savings plans and tax-withholding services directly to freelancers, contractors or anyone uncovered. Given the rapid rise of Uber and other gig platforms, it’s no wonder YC startups are tapping into the various business opportunities available there.

“We’re willing to tackle some of these topics that are kind of boring and mundane and really intensive,” Kang added. “Like the average person doesn’t want to think about taxes or filling out forms. We saw that as an opportunity for us to step in and be like, hey, we’ll take it.”

News Source = techcrunch.com

Streetwear marketplace Bump raises $7.5M

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Bump, the Y Combinator-backed marketplace for streetwear, is announcing that it has raised $7.5 million in Series A funding.

Bump’s Jack Ryder told me that even before starting the company, he and his co-founder Sam Howarth were active in buying and selling streetwear and sneakers — but he admitted that it took several tries before the startup found the right model. (He described a previous iteration, involving a reverse marketplace where people post the items they’re interested in buying, as “the world’s worst idea.”)

Now, however, Ryder said Bump has nearly 2 million registered users. It allows them to buy and sell jackets, T-shirt, sneakers and more among themselves. They can sort through the marketplace based on brand, color and size, and can chat one-on-one or in groups.

The startup it relies on moderators and crowdsourcing to determine when a listing looks fake — apparently there have been issues with less than 2 percent of listings in the app, and Ryder said most of the time it’s just young, inexperienced sellers “who didn’t understand how to ship the item.”

Ryder sees Bump’s social side as the real opportunity for growth. While he said the startup still has “tons of room in streetwear to keep going,” he suggested that the “bigger and more important mission” is to turns online shopping into “a multi-player experience.”

“There’s tons of places where you can buy streetwear online … but the real unique thing about Bump was the social side,” he said. “The average age of our users is 15 years old — that’s actually way younger than the demographic of people interested in sneakers and streetwear. The problem we’re solving isn’t making it easier to buy streetwear; it’s how teenagers, how Gen Z shops with their friends online.”

Ryder said that when he was at YC, he was told to shy away from the idea of social shopping, because there’s “almost like a graveyard” of failed startups. In his view, however, those startups were just “adding a like button or adding a follow button,” rather than really bringing the social and shopping experiences together.

Meanwhile, Instagram and other social networks have been adding shopping capabilities, but he said they face the need to juggle different kinds of content and users.

“We think people are getting a way better shopping experience [on Bump], just because it’s a marketplace first,” Ryder said.

With the new round, Bump plans to relocate from New York to London, where it already employs some contractors, and where Ryder and Howarth were initially based.

The funding was led by e.ventures, with the firm’s Brendan Wales joining the Bump board. Kleiner Perkins, Y Combinator and undisclosed angel investors also participated.

“Having been early investors in both Farfetch and TheRealReal, we have seen firsthand how luxury and streetwear have converged over the past five years,” said Wales said in a statement. “Bump is at the intersection of both, with a social product that enables Gen Z buyers and sellers of high-end streetwear to transact globally in a peer-to-peer fashion. Jack and Sam of Bump, exemplify founder authenticity for this category, and we are grateful to be partnering with the entire team going forward.”

News Source = techcrunch.com

The team behind Baidu’s first smart speaker is now using AI to make films

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The HBO sci-fi blockbuster Westworld has been an inspiring look into what humanlike robots can do for us in the meatspace. While current technologies are not quite advanced enough to make Westworld a reality, startups are attempting to replicate the sort of human-robot interaction it presents in virtual space.

Rct studio, which just graduated from Y Combinator and ranked among TechCrunch’s nine favorite picks from the batch, is one of them. The “Westworld” in the TV series, a far-future theme park staffed by highly convincing androids, lets visitors live out their heroic and sadistic fantasies free of consequences.

There are a few reasons why rct studio, which is keeping mum about the meaning of its deliberately lower-cased name for later revelation, is going for the computer-generated world. Besides the technical challenge, playing a fictional universe out virtually does away the geographic constraint. The Westworld experience, in contrast, happens within a confined, meticulously built park.

“Westworld is built in a physical world. I think in this age and time, that’s not what we want to get into,” Xinjie Ma, who heads up marketing for rct, told TechCrunch. “Doing it in the physical environment is too hard, but we can build a virtual world that’s completely under control.”

Rct studio wants to build the Westworld experience in virtual worlds. / Image: rct studio

The startup appears suitable to undertake the task. The eight-people team is led by Cheng Lyu, the 29-year-old entrepreneur who goes by Jesse and helped Baidu build up its smart speaker unit from scratch after the Chinese search giant acquired his voice startup Raven in 2017. Along with several of Raven’s core members, Lyu left Baidu in 2018 to start rct.

“We appreciate a lot the support and opportunities given by Baidu and during the years we have grown up dramatically,” said Ma, who previously oversaw marketing at Raven.

Let AI write the script

Immersive films, or games, depending on how one wants to classify the emerging field, are already available with pre-written scripts for users to pick from. Rct wants to take the experience to the next level by recruiting artificial intelligence for screenwriting.

At the center of the project is the company’s proprietary engine, Morpheus. Rct feeds it mountains of data based on human-written storylines so the characters it powers know how to adapt to situations in real time. When the codes are sophisticated enough, rct hopes the engine can self-learn and formulate its own ideas.

“It takes an enormous amount of time and effort for humans to come up with a story logic. With machines, we can quickly produce an infinite number of narrative choices,” said Ma.

To venture through rct’s immersive worlds, users wear a virtual reality headset and control their simulated self via voice. The choice of audio came as a natural step given the team’s experience with natural language processing, but the startup also welcomes the chance to develop new devices for more lifelike journeys.

“It’s sort of like how the film Ready Player One built its own gadgets for the virtual world. Or Apple, which designs its own devices to carry out superior software experience,” explained Ma.

On the creative front, rct believes Morpheus could be a productivity tool for filmmakers as it can take a story arc and dissect it into a decision-making tree within seconds. The engine can also render text to 3D images, so when a filmmaker inputs the text “the man throws the cup to the desk behind the sofa,” the computer can instantly produce the corresponding animation.

Path to monetization

Investors are buying into rct’s offering. The startup is about to close its Series A funding round just months after banking seed money from Y Combinator and Chinese venture capital firm Skysaga, the startup told TechCrunch.

The company has a few imminent tasks before achieving its Westworld dream. For one, it needs a lot of technical talent to train Morpheus with screenplay data. No one on the team had experience in filmmaking, so it’s on the lookout for a creative head who appreciates AI’s application in films.

rct studio

Rct studio’s software takes a story arc and dissects it into a decision-making tree within seconds. / Image: rct studio

“Not all filmmakers we approach like what we do, which is understandable because it’s a very mature industry, while others get excited about tech’s possibility,” said Ma.

The startup’s entry into the fictional world was less about a passion for films than an imperative to shake up a traditional space with AI. Smart speakers were its first foray, but making changes to tangible objects that people are already accustomed to proved challenging. There has been some interest in voice-controlled speakers, but they are far from achieving ubiquity. Then movies crossed the team’s mind.

“There are two main routes to make use of AI. One is to target a vertical sector, like cars and speakers, but these things have physical constraints. The other application, like Alpha Go, largely exists in the lab. We wanted something that’s both free of physical limitation and holds commercial potential.”

The Beijing and Los Angeles-based startup isn’t content with just making the software. Eventually, it wants to release its own films. The company has inked a long-term partnership with Future Affairs Administration, a Chinese sci-fi publisher representing about 200 writers, including the Hugo award-winning Cixin Liu. The pair is expected to start co-producing interactive films within a year.

Rct’s path is reminiscent of a giant that precedes it: Pixar Animation Studios . The Chinese company didn’t exactly look to the California-based studio for inspiration, but the analog was a useful shortcut to pitch to investors.

“A confident company doesn’t really draw parallels with others, but we do share similarities to Pixar, which also started as a tech company, publishes its own films, and has built its own engine,” said Ma. “A lot of studios are asking how much we price our engine at, but we are targeting the consumer market. Making our own films carry so many more possibilities than simply selling a piece of software.”

News Source = techcrunch.com

Africa Roundup: Jumia files for IPO, OneFi acquires Amplify, FlexClub expands in Mexico

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Less than a decade ago IPOs, acquisitions, and global expansion by African startups were more possibility than reality. March saw all three from the continent’s tech scene.

Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange, per SEC documents and confirmation from chief executive Sacha Poignonnec.

In an updated filing, (since the March 12 original) Jumia indicated it will offer 13,500,000 ADR shares, for an offering price of $13 to $16 per share to trade under the ticker symbol “JMIA”. The IPO could raise up to $216 million for Jumia.

Since our first story (and reflected in the latest SEC docs) Mastercard Europe agreed up front to buy $50 million in Jumia ordinary shares.

With a smooth filing process, Jumia will become the first African startup to list on a major global exchange. The company is incorporated in Germany, but maintains its headquarters in Nigeria, and operates exclusively in Africa with 4000 employees on the continent.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data. The company has started to generate annual revenues over $100 million, but like many burn-rate startups, has done so while racking up big losses.

There’ll be a lot more to cover, analyze, and debate pre and post Jumia’s NYSE bell toll—which could happen in coming weeks or months. For example, can Jumia generate a profit, is it really an African startup, will Jumia become an acquisition target for a big outside name or an acquirer of smaller startups in African e-commerce? Stay tuned for continuing TechCrunch coverage.

On the acquisition front,  Lagos based online lending startup OneFi bought Nigerian payment solutions company Amplify for an undisclosed amount.

OneFi is taking over Amplify’s IP, team, and client network of over 1000 merchants to which Amplify provides payment processing services, OneFi CEO Chijioke Dozie told TechCrunch.

The purchase of Amplify caps off a busy period for OneFi. Over the last seven months the Nigerian venture secured a $5 million lending facility from Lendable, announced a payment partnership with Visa, and became one of first (known) African startups to receive a global credit rating. OneFi is also dropping the name of its signature product, Paylater, and will simply go by OneFi (for now).

Collectively, these moves represent a pivot for OneFi away from operating primarily as a digital lender, toward becoming an online consumer finance platform.

“We’re not a bank but we’re offering more banking services…Customers are now coming to us not just for loans but for cheaper funds transfer, more convenient bill payment, and to know their credit scores,” said Dozie.

OneFi will add payment options for clients on social media apps including WhatsApp this quarter—something in which Amplify already holds a specialization and client base. Through its Visa partnership, OneFi will also offer clients virtual Visa wallets on mobile phones and start providing QR code payment options at supermarkets, on public transit, and across other POS points in Nigeria.

On the back of the acquisiton, OneFi is in the process of raising a round and will look to expand internationally, considering Senegal, Côte d’Ivoire, DRC, Ghana and Egypt and Europe for Diaspora markets.

On African startups expanding globally, FlexClub—a South African venture that matches investors and drivers to cars for ride-hailing services—announced it will expand in Mexico in a partnership with Uber after closing a $1.2 million seed round led by CRE Venture Capital.

The move comes as Africa’s tech-transit space continues to produce unique mobility solutions shaped around local needs.

FlexClub touts itself as a “gig economy investment platform” that is creating new asset classes in emerging markets, according to chief executive and co-founder Tinashe Ruzane.

That asset class, for now, is ride-hail vehicles. FlexClub allows investors to go on the site and purchase a car (ultimately managed and serviced by FlexClub). The startup then connects that car to an Uber driver who uses earnings to pay a weekly rental charge.

Those fees generate monthly, fixed-rate interest income for the investor. The driver has the option of buying the car after the 12 months, with a descending purchase price over time.

FlexClub’s platform manages the investment, rental income, and disbursement of funds across all parties. The startup also handles insurance, maintenance, and upkeep of the cars.

Ruzane envisions this as a model to finance multiple asset classes in emerging markets—where lending options are fewer for individuals who may not have credit histories.

“Our goal is to make this completely passive… where investors can invest in different kinds of assets on our platform, login to a dash, and see this is how my five cars in South Africa are doing, my vans in Mexico, my motorbikes in Indonesia — with a diversified portfolio around the world,” he explained.

FlexClub will begin work matching investors to cars and Uber drivers in Mexico in April. The startup sees opportunities to move into other mobility classes, such as Africa’s ride-hail motorcycle taxi and three-wheel tuk-tuk market, CEO Tinashe Ruzane told TechCrunch in this feature.

And finally, francophone Africa will see a boost in funds and support for startups. The Dakar Network Angels group launched last month, making its first investment to cleantech venture Coliba—an Ivorian startup that uses a mobile app to coordinate waste recycling

The deal is part of Dakar Network Angels’ mission of convening experts and capital to bridge the resource gap for startups in French-speaking Africa — or 24 of the continent’s 54 countries.

The organization — which goes by DNA for short — will offer seed fund investments of between $25,000 to $100,000 to early-stage ventures with high growth potential. These rounds will come with the entrepreneurial guidance of DNA’s angel network.

Launched in Senegal, the organization’s founder is Marieme Diop — a VC investor at Orange Digital Ventures — named the goal of bridging VC disparities between francophone and non-francophone Africa as the primary driver for DNA. She pointed to funding data by Partech indicating that 76 percent of investment to African startups goes to three English-speaking countries — Nigeria, Kenya and South Africa.

To gain consideration for DNA investment, startups must gain referral by a member. DNA will take a minority stake (less than 10 percent) in ventures that receive seed funds and provide program mentorship until exits, Diop told TechCrunch.

To become an angel, members must commit to investing a minimum of $10,000 a year (for those coming on as individuals), $20,000 (for corporates) and be on hand to support the portfolio startups, according to DNA’s Corporate Membership Charter.

More Africa Related Stories @TechCrunch

African Tech Around The Net

News Source = techcrunch.com

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