Posted on

Grab launches new consumer financial services, including micro-investments and loans

Grab announced today that its financial unit, which previously focused mainly on services for entrepreneurs and small businesses, is launching a slew of consumer products, including micro-investments, loans, health insurance and a pay-later program.

Based in Singapore, Grab began in 2012 as a ride-hailing company before expanding into on-demand deliveries and other services. In January 2019, it formed a joint venture with ZhongAn Insurance to build a digital insurance marketplace. Since then, its financial services portfolio has grown through a series of partnerships and the acquisition of Bento, which allowed it to offer investment and wealth management services as well.

In February, Grab announced that it had raised up to $856 million to speed up development of its payments and financial services.

Yesterday, Bloomberg reported that Grab raised $200 billion from South Korean private equity firm Stic, bringing its total funding so far to more than $10 billion at a valuation of about $14.3 billion. A Grab spokesperson declined TechCrunch’s request for comment on that raise.

Tapping into a growing market

During a call with reporters today, when asked if Grab has a timeline for reaching profitability, Reuben Lai, senior managing director at Grab Financial Group, said there isn’t one yet, but “research has shown that there is a real demand for the products we are launching today. What we really want to do is focus on consumers and make sure we deliver products they use. We think profitability and sustainability will follow.”

Grab Financial Group’s new products including AutoInvest, a platform that allows consumers to invest small sums of money through Grab’s app; consumer loans; a buy now, pay later program; and expanded insurance offerings, including hospital insurance that will first launch in Indonesia.

While Grab’s new consumer products were in the works before the COVID-19 pandemic, Lai said the crisis has accelerated demand for services like online shopping, digital payments and insurance.

Grab’s consumer products will compete with services like StashAway, an online investment platform based in Singapore, but Lai said Grab Financial Group’s competitive edge is that there are already millions of Grab users in Southeast Asia. This gives it a built-in consumer base and also data to continually refresh the scoring models it uses to determine creditworthiness.

According to a 2019 report by e-Conomy Asia, a research program run by Google and Temasek, about 70% of people in Southeast Asia are “underbanked,” meaning that they lack access to credit cards or long-term savings products. Even in Singapore, one of Asia’s financial centers, about 40% of consumers qualify as underbanked. Bain and e-Conomy estimate that the digital financial services in Southeast Asia can generate $60 billion in revenue by 2025, making it a lucrative market for Grab.

Micro-investing and insurance

Most of the unit’s insurance was previously focused on Grab’s ecosystem, including drivers and merchants on its platform. But new products, like hospital coverage that will launch in Indonesia first to supplement the country’s national healthcare system, are targeted at consumers.

Chandrima Das, who founded Bento in 2016 and is now head of GrabInvest, said Grab’s new micro-investment product will be accessible through Grab’s digital wallet. Returns can be cashed out and spent on Grab services or merchants that accept GrabPay. it is partnered with liquid fixed-income funds managed by Fullerton Fund Management and UOB Asset Management, and allows users to invest as little as SGD $1 at a time, with the potential to earn returns about about 1.8%. It will launch first in Singapore at the beginning of September.

While Grab Financial Group already offers working capital loans to drivers and purchase financing for merchants on its platform, its new consumer credit products include PayLater, which allows users to pay for Grab services at the end of each month, and will first be available in Singapore and Malaysia.

The company is also offering consumer loans from third-party licensed banks and financial institutions with an application process that it Ankur Mehrota, Grab Financial Group’s head of lending, says is so simple “you can do it while sitting on your couch watching Netflix.” Once approved, Grab serves a distribution platform for the loans.

Mehrota said benefits of the program for merchants include increased gross merchandise value, larger basket sizes and lower cart abandonment rates.

Read More

Posted on

Hong Kong-based EMQ raises $20 million for its cross-border financial settlement tech

Cross-border financial transactions are a major headache for individuals and large companies alike, who often have to deal with long wait times and high fees in order to send money to recipients in other countries. EMQ, a Hong Kong-based startup that develops network infrastructure to make international payments faster, announced today that it has raised a $20 million Series B led by WI Harper Group.

EMQ’s technology is integrated by clients, including online banks digital wallets, e-commerce and merchant settlement providers and licensed financial institutions, into their existing networks, making it easier for them to perform cross-border remittances.

The funding, which also included participation from AppWorks, Abu Dhabi Capital, DG Ventures, Intudo Ventures, VS Partners, January Capital, Hard Yaka, Vectr Fintech Partners, Quest Ventures and Sparklabs, will be used for expanding EMQ’s international business, product development and licensing in key markets. Its last funding was a $6.5 million Series A announced back in December 2017.

EMQ is already licensed in Hong Kong, Singapore, Indonesia and registered as a Money Service Business in Canada. It has also been accepted into the regulatory sandbox launched by Taiwan’s Financial Supervisory Commission to encourage innovation by financial tech companies.

The company’s co-founder and chief executive officer Max Liu told TechCrunch that EMQ will focus on scaling its operations, especially for business remittances, in China, followed by India and Japan. EMQ’s tech is already used to process business payments in 80 countries.

Until recently, the majority of transactions facilitated by EMQ were between consumers. Then in May, the company launched its enterprise payment solution for companies. Liu said EMQ now expects business-to-business transactions to account for half of its gross transaction volume in 2021.

According to Juniper Research, cross-border B2B transactions are expected to exceed $218 trillion by 2022, up from $150 trillion in 2018, thanks in large part to the adoption of new technology. Other fintech companies that also provide tech, including APIs, for cross-border transactions include Currencycloud, Payoneer and Transferwise.

Liu said EMQ’s main selling point is that it is focused on building a flexible infrastructure that can handle a large range of use cases in different countries, including e-commerce, merchant settlement, procurement, remittance and payroll.

He added that EMQ can be integrated into a client’s existing tech infrastructure with as little as two API calls. EMQ gives clients a fully-functional sandbox environment, which mimics real transactions, and allows them to experiment with its tech and work with EMQ’s customer support team before it is formally deployed. Liu said it usually takes clients between two weeks to two months, depending on a company’s size and requirements, to fully integrate EMQ into their business operations.

In a press statement about the investment, Edward Liu, a partner at WI Harper Group, said, “As digital transformation intensifies globally, enterprises today are increasingly international in scale and they will require a network infrastructure like EMQ with greater speed, more certainty, increased flexibility and transparency, to expand their business in Asia and beyond. We are excited to partner with the EMQ team to expand its market-leading position in cross-border business payments globally.”

Read More

Posted on

Robinhood raises $320M more, bringing its latest round to $600M at an $8.6B valuation

The stakes keep getting higher for American discount brokerage Robinhood, which today disclosed that it has added hundreds of millions of dollars to its previously disclosed funding round.

Including the $280 million that the company had already announced, Robinhood said that it was “pleased to share” that it “raised an additional $320 million in subsequent closings.” Its now $600 million funding round brings its post-money valuation to $8.6 billion. Fortune first reported the news.

(A detail, but the new capital is part of the same round as it was raised at the same price. TechCrunch reported when the company’s $280 million round was announced, the fintech company was worth $8.3 billion. Another $300 million in capital at a flat share price means that the company’s valuation should have risen by only the dollar amount added. As it did.)

Robinhood has had a good business year, even if some of its practices have come under fire. The company pledged to tighten up parts of its platform relating to more exotic trading after the suicide of one of its users, for example; a topic that TechCrunch discussed at length last week.

What is inescapable is that Robinhood is having one hell of a year. When it might go public isn’t clear, especially as the private company is having no problem raising capital without an IPO. But as its value continues to rise, it becomes an increasingly remote acquisition target.

Read More

Posted on

How European seed firm Connect Ventures finds ‘product-first’ founders

Connect Ventures, the London-based seed-stage VC that was an early investor in Citymapper and Typeform announced a new $80 million fund last month to continue investing in “product-led” founders.

Launched back in 2012, when there was a shortage of institutional capital at seed stage in Europe and micro VC was a novelty in the region, Connect Ventures invests in B2B and consumer software across Europe, including SaaS, fintech, digital health and “future of work.”

Running throughout the firm’s investment thesis is a product focus, with the belief that product-led — or “product-first” — software entrepreneurs are the kinds of founders most likely to transform the way we live and work at scale.

Connect Ventures does fewer deals per year than many seed-stage firms, promising to place bets in a smaller number of early-stage companies. It recently backed scaling startups such as Curve and TrueLayer. Keeping a compact portfolio lets the shop throw more support behind its investments to help tip the scales toward success.

To learn more about Connect’s strategy going forward, I put questions to partners Sitar Teli, Pietro Bezza and Rory Stirling. We covered what makes a product-first founder, the upsides and downside of “conviction investing,” and the next digital product opportunities in fintech, health and the future of work.

TechCrunch: Connect Ventures positions itself as a pan-European VC investing in “product-led” founders at seed stage. Can you be more specific with regards to check size, geography and the types of startups you look for?

Sitar Teli: Of course, I know it can be hard to differentiate seed funds at first glance, so it’s worth digging in one layer down. Connect is a thesis-led, seed stage, product-centric fund that invests across Europe. I know we’re going to dive into some of those parts later, so I’ll focus on our investment strategy and what we look for. We lead seed rounds of £1-£2 million (sometimes less, sometimes more) and make 8-10 investments a year. Low volume, high conviction, high support is the investment strategy we’ve executed since we started eight years ago.

Read More

Posted on

Lydia expands credit offering in partnership with Younited Credit

French startup Lydia is announcing a new partnership with Younited Credit, which lets you borrow anything between €500 and €3,000 and pay back within 6 to 36 months. The feature will be released in France at some point during the summer.

This isn’t the first time Lydia is playing around with credit. The company already partnered with Banque Casino to let users borrow between €100 and €1,000. But that feature was limited to short-term credit as you had to reimburse everything over three installments.

This time, you can borrow more money and you have more time to pay back your loan. Lydia will try to be as transparent as possible when it comes to interests. And there’s no fee in case or early repayment.

Compared to the first credit product, you can’t borrow money instantly. You apply for a loan in the app and get an answer within 24 hours. If you accept the offer, you have seven days to change your mind — it’s a regulatory requirement in France. You then receive money on your account.

By offering two different credit products, Lydia wants to cover more use cases. If something unexpected happens (your laptop broke down, you have to book an emergency flight, etc.), you can borrow as much as €1,000 in just a few seconds.

You receive the money on your Lydia account and you can start using it instantly using a virtual card, Apple Pay, Google Pay, Samsung Pay, Lydia’s debit cards or Lydia’s peer-to-peer payments.

Fees on instant credit lines are pretty high as you pay 3.13% in interests and a one-time fee of €6.90 to €19.90 to receive the money instantly depending on how much you borrow.

If you’re planning a big purchase but you can wait a week, you can go through the new credit offering with Younited Credit . This isn’t the first time Younited Credit offers an integrated credit product with another fintech startup. For instance, N26 also offers credit lines with Younited Credit in France.

Lydia started as a peer-to-peer payment app with 3.5 million users in Europe. It recently raised a $45 million funding round led by Tencent. The startup now wants to build a marketplace of financial products. And integrating Younited Credit in the app seems in line with that strategy.

Read More

Posted on

Startups are poised to disrupt the $14B title insurance industry

If you have bought a house in the last decade, you likely started the process online. Perhaps you browsed for your future dream home on a website like Zillow or Realtor, and you may have been surprised by how quickly things moved from seeing a property to making an offer.

When you reached the closing stage, however, things slowed to a crawl. Some of those roadblocks were anticipated, such as the process of getting a mortgage, but one likely wasn’t: the tedious and time-consuming process of obtaining title insurance — that is, insurance that protects your claim to home ownership should any claims arise against it after sale.

For a product that is all but required to purchase a home, title insurance isn’t something many people know about until they have to pay for it and then wait up to two months to get.

Now, finally, a handful of startups are taking on the title insurance industry, hoping to make the process of buying a policy easier, cheaper and more transparent. These startups, including Spruce, States Title, JetClosing, Qualia, Modus and Endpoint, enable part or all of the title insurance buying process. Whether these startups can finally topple the title insurance monopoly remains to be seen, but they are already causing cracks in the system.

To that end, we’ve outlined what’s broken about today’s title industry; recent developments in technology and government that are priming the industry for change; and a synthesis of some key trends we’ve observed in the space, as entrepreneurs begin to capitalize on a tipping point in a century-old, $14 billion business.

Title insurance 101

To understand how startups are beginning to challenge title insurance incumbents, we need to first understand what title insurance is and what title companies do.

Title insurance is unique from other types of insurance, which require ongoing payments and protect a buyer against future incidents. Instead, title insurance is a one-time payment that protects a buyer from what has already happened — namely errors in the public record, liens against the property, claims of inheritance and fraud. When you buy a home, title insurance companies research your property’s history, contained in public archives, to make sure no such claims are attached to it, then correct any issues before granting a title insurance policy.

Read More

Posted on

Personal Capital sells to Empower Retirement in deal worth up to $1B

Today Personal Capital, a fintech company that had attracted over $265 million in private funding, announced that it is selling itself to Empower Retirement, a company that provides retirement services to other companies. The deal is worth $825 million upon closing, with another $175 million in what are described as “planned growth” incentives, according to a release.

The deal is a likely win for Personal Capital . According to Forbes the firm was worth $660 million around the time of its Series F round of funds, which it raised in February of 2019. The company was valued at around $500 million in December of 2016, meaning that investors who put capital in at that point, or before, likely did well on their investment.

Venture groups who put capital in later, unless they had ratchets in place, likely didn’t make as much from the deal as they originally hoped. Regardless, a $1 billion all-inclusive exit is nothing to scoff at; Facebook once bought Instagram for that much money, and the sheer cheek of the transaction at the time nearly broke the Internet.

During its life as a private company, Crosslink Capital, IGM Financial, Venrock, IVP, and Corsair each led rounds into the company according to Crunchbase data.

Personal Capital is a consumer service that helps folks plan for retirement, and invest their capital. The company offers free financial tools, and a higher-cost wealth management option for accounts of at least $100,000. The company doesn’t like being called a robo-advisor, instead claiming to exist in the space between old-fashioned in-person wealth management relationships, and fully-automated options.

Regardless, the company’s sale price should help market rivals price themselves. Here are Personal Capital’s core stats (data via Personal Capital, accurate as a May 31, 2020):

  • AUM: $12.3 billion
  • Users: 2.5 million

So, Wealthfront and M1 Finance and others, there are some metrics for you to weigh yourselves again. Of course, other, competing companies have different monetization methods, so the comparison won’t be 100% direct.

The Personal Capital exit fits into the theme that TechCrunch has tracked lately in which savings and investing applications have seen demand surge for their wares. This is a trend not merely in the United States where Personal Capital is based, but also abroad.

Aside from Personal Capital’s exit today, we’ve also seen huge deals in 2020 from Plaid, which sold to Visa for over $5 billion, Galileo’s exit for over $1 billion, and Credit Karma’s sale for north of $7 billion. In response to this particular news item, TechCrunch’s Danny Crichton noted that fintech is “probably the hottest exit market right now.” He’s right.

Read More

Posted on

RenoFi brings next-generation renovation loans through a new fintech platform

It’s been called the HGTV effect, but now more than ever, homeowners have become emboldened renovators. After buying his first home, Justin Goldman, Co-Founder, and CEO of RenoFi, quickly realized that purchasing a home is no longer the end all — it’s merely the first step in the homeowner’s journey.

The inspiration behind RenoFi

Not long after purchasing his first home and deciding to remodel, Goldman’s renovation project became stagnant due to a lack of loan options available. At the time, it seemed the only way to finance your home renovation was through a cash-out refi or a home equity loan. But these loans require that you have equity to tap, which can take a decade for recent homeowners to build up. With his entrepreneurial mindset, Goldman realized an anomaly in the market: Americans finance nearly every major expenditure in their life, except renovations.

“Every other major purchase in our life has a purpose-built financial tool that goes along with it. You buy a car; you get a car loan. You go to medical school, you get a med school loan, you buy a house you get a mortgage. But when it comes to major home renovations, most people use cash, and our thesis is it’s because there’s no purpose-built financial product for it,” said Goldman.

That’s when RenoFi Loans were born. Goldman created a solution that bases the loan on the after-renovation value instead of the home’s current value. This made it possible to increase borrowing power by more than 3x, allowing users to tackle their whole renovation wish-list at once, at the lowest possible cost.

RenoFi is not a lender, but rather a fintech platform that partners with lenders to make it possible for them to offer the next generation of renovation loans.

The company has partnered with lenders like Ardent Credit Union in Philadelphia, to help homeowners borrow the right amount of money at the lowest possible rate for their home renovations. “RenoFi enables us to fill a need that isn’t being met with traditional home improvement financing options,” said Rob Werner, President & CEO of Ardent Credit Union

Helping homeowners navigate the new normal

Goldman saw more demand for RenoFi Loans in May than any other month in the company’s history. He assumes it’s because people have been sheltering in place with plenty of time to identify the things they want to change in their homes. Additionally, with the work from home movement exploding, many are considering a move to the suburbs to ensure they have the space necessary to work from home comfortably. These new suburban home purchases will be homes formerly owned by aging baby boomers likely in need of some renovation love.

Goldman believes RenoFi is well-positioned to help homeowners, contractors, loan originators, and realtors in this new normal. He realizes that people are going to want to hold onto their savings during the recession, and RenoFi’s access to financing gives them that option.

AFTER photo (right) designed by Naomi Stein and photographed by Raquel Langworthy

Advice for Entrepreneurs

RenoFi was co-founded by Goldman, Robert Shedd, and Lee Miller. As an entrepreneur and repeat-founder, Goldman has led multiple companies through challenging times and learned many lessons along the way. He started his first company, OrderUp, in college during the early years of the internet. The company, which was later acquired by Groupon, taught him how critical it is to build something special that people truly need. He then went on to start BetDash.com and Zoomer (YCombinator S14) with Shedd.

When it comes to looking for capital, Goldman partners with investors who understand what is needed at different stages of growth and has the resources and relationships to provide hands-on help throughout the journey. “Sam Landman from Comcast Ventures is someone we actually met when fundraising for our previous startup. During the ideation phase, Sam was someone we leaned on for feedback and he helped us shape the idea even before he invested. It goes to show how important it is to build and maintain relationships which is something first-time founders sometimes have trouble grasping.”

In our Founder Spotlight series, entrepreneurs from our portfolio companies share insights about the problems they’re working to solve, tips on how to build new companies, and valuable advice to new entrepreneurs.


RenoFi brings next-generation renovation loans through a new fintech platform was originally published in The Forecast on Medium, where people are continuing the conversation by highlighting and responding to this story.

Read More

Posted on

Revolut expands bank account aggregation to Ireland

Fintech startup Revolut has expanded its open banking feature to Ireland. The feature first launched in the U.K. back in February. Once again, the startup is partnering with TrueLayer to let you add third-party bank accounts to your Revolut account.

The feature launch also marks the launch of TrueLayer in Ireland. For now, Revolut users can only link their Revolut account with AIB, Permanent TSB, Ulster Bank and Bank of Ireland. Revolut and TrueLayer will add support to other banks in the future. Revolut currently has 1 million customers in the Republic of Ireland.

The idea behind open banking is quite simple. Many online services rely on application programming interfaces (APIs) to talk to each other. You can connect with your Facebook account on many online services, you can interact with other services from Slack, etc.

Financial institutions have been lagging behind on this front, but it is changing thanks to new regulation and technical updates. With open banking, your bank account should work more like a traditional internet service.

When you connect your bank account with Revolut, you can view your balance and past transactions from a separate tab that lists all your linked accounts. Users can also take advantage of Revolut’s budgeting features with their bank accounts.

As TechCrunch’s Steve O’Hear noted when he first covered Revolut’s open banking feature, Revolut was originally authorized for Account Information Services (AIS) by the U.K. regulator, the Financial Conduct Authority. It lets you access and display information from other financial institutions.

But the startup now has permission to carry out Payment Initiation Services (PIS). It means that you’ll soon be able to initiate transfers from your bank account directly from Revolut. It should make it much easier to top up your Revolut balance, for instance.

While this feature might seem anecdotal, Revolut wants to build a comprehensive financial hub for all your financial needs — a sort of super app for everything related to money. With open banking, you theoretically no longer have to open your traditional banking app.

Image Credits: Revolut

Read More

Posted on

Community Energy England: Community energy sector undergoing ‘radical and rapid’ change

State of the Sector 2020 report notes that the UK now boasts more than 260MW of community-owned energy capacity and has the potential to power 2.2 million homes by 2030 and support nearly 9,000 jobs

2020 will prove a “pivotal year” for the energy sector as community energy groups diversify and test new business models in response to the coronavirus crisis and a tougher policy environment.

That is the headline conclusion from Community Energy England’s(CEE) annual State of the Sector report, published today, which paints a picture of a community energy sector undergoing “radical and rapid change” due to the closure of the government’s Feed-In-Tariff (FiT) on 1 April this year and the ongoing impact of the coronavirus pandemic.

The update confirms that at the close of 2019, the total community-owned energy capacity in England, Wales and Northern Ireland reached 193.9MW of capacity, of which 155.4MW is solar and 33.6MW is wind. Total UK community-owned capacity increased to 264.9MW.

Solar projects dominated the community-owned electricity sector in England, Wales and Northern Ireland in 2019, accounting for 14MW of a total of new 15.4MW of installations. Wind projects accounted for a slimmer 1.2MW tranche of installations, while hydroelectricity made up the rest. Meanwhile, community organisations in the UK installed 2.1MW of heat generation capacity and 547kWh of battery storage, while delivering 102 energy efficiency projects.

Last year saw a surge of  community-owned electricity installations compared to the year before, an increase the report authors suggest was likely prompted by the imminent closure of the government’s FiT subsidy scheme.

The end of the FiT scheme will dramatically alter the support landscape for community electricity projects. Some 97 per cent of community electricity projects in 2019 were supported by the now-ended subsidy scheme.

In today’s report, CEE argues that the Smart Export Guarantee, a policy introduced by the government last January which asks suppliers to offer a payment tariff to small-scale generators, offers only a “limited form of replacement” for the more generous FiT scheme.

The government maintained that the falling cost of renewables justified an end to the popular FiT scheme, which helped drive renewables installations but was funded through a levy on energy bills. Ministers have predicted that lower renewables costs means projects should be able to be deployed without subsidy support.

However, today’s report warns that while renewables costs have fallen significantly, the financial case for many small-scale renewable projects will be “drastically diminished” throughout 2020 and 2021.

Looking ahead, the CEE said the community energy sector will need to identify and develop new business models, ownership schemes, and technologies in order to thrive in the new post-subsidy world.

“With the energy system in a critical stage of transition towards a more decentralised, distributed and digitised system, as well as wholesale changes to the policy support landscape, 2020 will be a pivotal year for the entire energy sector,” the report notes. “For community energy, electricity generation projects are expected to become more financially marginal and difficult to deliver, with a shift towards new models integrating local energy generation with demand management services to achieve project viability.”

The group forecasts that there could be a greater uptake in community shares over debt finance as communities seek to make increasingly marginal projects work. And existing organisations are likely to diversify their approach by embracing energy demand reduction projects and investigating whether low carbon heating, smart grid, and transport projects could be undertaken alongside renewables installations.

The report argues that knowledge sharing and introducing more effective and standardised methods of quantifying and explaining the wider social and environmental value community energy projects can bring could also play a role in catalysing the sector in the years to come.

The report also notes that the community energy sector will likely see fewer projects developed this year due to the impact of Covid-19.

However, it argued that the sector’s response to the crisis has demonstrated the vital role community organisations play in providing local services and fostering community cohesion. Community energy projects across the country have raised hundreds of thousands of pounds between them to support pandemic response initiatives during the crisis.

As such, the sector remains upbeat about the role it could play in the clean energy transition in the coming decade.

In a new ‘vision’ document published alongside the state of the market report, CEE predicts that with the right support and policy mechanisms community energy could be powering the equivalent of 2.2 million homes by 2030, contributing 5,270MW to the energy system, supporting 8,700 jobs, saving 2.5 million tonnes of CO2 emissions, and adding over £1.8bn to the economy each year.

Read More