Category: TECHNOLOGY
KitaBeli is bringing e-commerce to Indonesia’s small cities
Complicated supply chains mean that consumers in Tier 1 and Tier 2 Indonesian cities often end up paying more for goods than their peers in large cities, like Jakarta. KitaBeli is on a mission to change that, with its own distribution network and a direct-to-consumer social commerce app. Today the startup announced that it has raised $20 million in fresh funding led by Glade Brook Capital Partners, along with participation from returning investors AC Ventures and GoVentures, and new backer InnoVen Capital.
TechCrunch covered KitaBeli’s last raise, a $10 million Series A, in March 2021.
The funding will be used to expand into more small cities in Indonesia, and add new product categories like beauty, personal care and mother and baby products.
The startup says it has grown more than 10x in six months and claims to be the largest direct-to-consumer social commerce platform in Indonesia. It now has more than 400 employees.
KitaBeli says Indonesia’s Tier 2 and Tier 3 cities make up a $100 billion market, with 200 million consumers that contribute more than 50% of Indonesia’s gross domestic product. But they face more challenges ordering online compared to their peers in Tier 1 cities like Jakarta. For example, long delivery times, higher prices because of complicated supply chains and trust issues because customers don’t know who is selling a product.
To address these, KitaBeli has opened a warehouse in every city it operates in, enabling same-day and next-day deliveries. It procures products directly from brands and principals, resulting in savings that can then be passed on to their customers. Finally, it addresses the trust issue through the social commerce model, in which users gather people from their social networks for group buys.
Co-founder and CEO Prateek Chaturvedi tells TechCrunch that when he moved from India (where his previous startup GetFocus was acquired by Mokapos), he was struck by the differences and similarities between the Indian and Indonesian e-commerce markets. For example, e-commerce in Tier 2 cities was underdeveloped compared to Tier 1 cities.
“On digging deeper, we found that users in these smaller towns are buying online for the first time, and they face trust issues with these faceless services and need help and guidance on using the app,” he said. As a result, KitaBeli experimented with social features in its app, like having agents, called Mitras, in each neighborhood, referrals and group buying.
Fast-moving consumer goods were picked as KitaBeli’s first category because they are frequently purchased. “Since we are direct to consumers, we want users to build a habit of buying with us,” Chaturvedi said.
To buy on KitaBeli, users open the app, place an order, then receive incentives for sharing these purchases with their friends. KitaBeli’s shoppers use it to purchase staples like rice, oil, sugar, milk and personal care items. Chaturvedi said each user generally spends $5 to $10 in every order, and each group usually consists of 5 to 25 people.
KitaBeli is able to scale up its distribution network by opening small warehouses in …read more
https://techcrunch.com/2022/07/17/kitabeli-is-bringing-e-commerce-to-indonesias-small-cities/
Tech Savvy or Tech Addicted? Older Adults Are Stuck on Screens, Too
Older adults spend nearly 10 hours a day on their devices, and it can leave younger generations rolling their eyes. …read more
As regulation heats up, will gaming studios’ gamble on loot boxes pay off?
You’d be hard pressed to find a game that doesn’t include some form of microtransactions these days, especially in mobile games. It just makes sense for gaming companies — an immensely lucrative source of revenue, the microtransactions market was worth at $60 billion in 2021, and projected to hit $106 billion by 2026.
Typically offered as in-game collectibles, currencies or chance-based loot boxes, microtransactions are now better received than they were a few years ago. Loot boxes, which are a way for players to receive random in-game rewards in exchange for real money, have been disparaged for a while now, and they’re now increasingly subject to government scrutiny.
Loot boxes have become an issue because they encourage spending real money for a miniscule chance at obtaining valuable in-game items, more often than not leaving players with nothing to show, except a desire to continue gambling for better items. Companies have been known to employ predatory sales tactics to sell loot boxes, and in the process, introduce to minors an avenue to gambling. Despite Electronic Arts’ (EA) insistence that loot boxes are not gambling, and are, in fact, “surprise mechanics,” several studies have shown there is a link between loot boxes and gambling addiction.
Red tape redemption
When Belgium banned loot boxes in 2018, it looked like the first domino had fallen, and further regulation from other countries would follow soon. The ensuing response was sluggish, though, despite countries like the U.K. agreeing that loot boxes are an issue that needs to be addressed.
One of the biggest hurdles faced by countries attempting to regulate loot boxes is that they do not fit their present definitions of what constitutes gambling, allowing companies to offer them and continue operating outside traditional gambling regulations.
The Netherlands, following in the footsteps of Belgium’s ban, tried to get the gears moving as well by fining Electronic Arts in 2019 over the inclusion of loot boxes in its popular FIFA franchise. This fine was overturned earlier this year after an appeal.
EA couldn’t celebrate its win for long, though, as the Netherlands has now pushed to update its legal definition of gambling to ensure better regulation of loot boxes. It remains to be seen if this results in an outright ban, or leads to EA requiring a gambling license and all the regulation that goes with it. When it does happen, it’s likely that EA will simply remove the offending loot boxes from the games sold in the Netherlands, similar to its response to the ban in Belgium.
https://techcrunch.com/2022/07/17/gambling-on-the-future-of-loot-boxes/
The bright side of fintech funding results
Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann
CB Insights released its global State of Venture report last week, while PitchBook issued its own U.S.-focused venture report. Of course, we couldn’t wait to dig in to the findings of both.
Alex Wilhelm and Natasha Mascarenhas — who also happen to be my partners in crime on the Equity Podcast — and I pored through the numbers to give you all the details here.
On a high level, it’s no surprise that funding flowing into fintech startups was down both globally and in the U.S. in the second quarter of 2022. And it wasn’t only funding. Everything was down. New unicorn births, M&As, IPOs.
But the results are not as gloom and doom as they may seem at first glance.
For one, fintech continues to account for a significant share of global funding. In 2021, an estimated 21% of all venture deals were fintech. In the second quarter of 2022, according to CB Insights, investment into fintech startups wasn’t too far behind that in the second quarter of 2022. That’s not far off from last year and signals that while, yes, fewer dollars are being invested generally, fintech is still attracting serious investor interest.
Another thing. While it’s clear that this year will be far more muted for fintech investment globally and in the United States, it’s still on track to crush 2020’s results. In summary, as Alex wrote: “We’re seeing a comedown, but not a whole-cloth retreat; things are still more active in capital terms in the fintech world now than they were two years ago.”
Lastly, a few weeks back I took a snippet of time and wrote that investors seemed to be favoring later-stage deals. Based on the results of the CB Insights report, that was actually counter to what took place in all of the second quarter.
I can tell you from a reporter’s perspective that we’re scaling back considerably on covering one-off funding rounds and new fund closes. As always, there are just far too many of them for us to cover them all and actually do a good, comprehensive job. We also have come to question just how much value there is in this practice. While new raises and fund closes remain significant news events, most of us here at …read more
https://techcrunch.com/2022/07/17/the-bright-side-of-fintech-funding-results/
Kodiak Robotics’ founder explains why autonomous freight could brush off inflation
If solving the problems of autonomous driving were a question of money, it’d have been solved long before now. That’s the primary argument of Don Burnette, co-founder and CEO of autonomous trucking startup Kodiak Robotics, which has expanded its business and hit milestones with a fraction of the funds that bigger players like Waymo have.
Over the past year, Kodiak has launched commercial pilots and partnerships with Ceva Logistics and US Xpress, two large trucking and logistics companies; begun using two new autonomous freight lanes outside of Texas and has raised a $125 million Series B, bringing its total funding to $165 million since 2018.
One of the few private autonomous vehicle companies on the market, Kodiak lives by the mantra of doing more with less. Last year, Burnette told us Kodiak could deploy a commercial-scale operation for $500 million. That’s about 10% of what Waymo has raised and less than 25% of TuSimple’s IPO.
Kodiak is still aiming for that goal and has now secured a reputation for keeping a tight balance sheet and an even tighter focus on chasing self-driving trucks, and only self-driving trucks. Someone else can solve the other autonomy issues.
Someone else can also solve the issues of building sensors and labeling data, according to Burnette, who relies on third parties for such components. In Kodiak’s eyes, building lidar in-house and spending time and resources on labeling data is nothing but an expensive distraction from creating a safe and viable go-to-market strategy.
“I’m not seeing as much negativity around the markets as I’m hearing publicly, and that gives me some optimism that this market is still exciting and healthy.” Don Burnette, co-founder and CEO, Kodiak Robotics
It’s been a year since the last time we interviewed Burnette for this series, so we caught up to talk about how scrapping HD maps has allowed Kodiak to expand into interstate trucking lanes faster than competitors; how removable sensor pods will help Kodiak scale; and why autonomous trucking may be immune to today’s bear market.
Editor’s note: The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.
TechCrunch: Autonomous trucking feels like it’s becoming more competitive as the industry matures. How does Kodiak stand out?
Burnette: An important piece of the story we wanted to tell was the modularity of the system, because it was informed by conversations with partners. Last month, we demonstrated how easy it is to replace one of our sensor pods in the field by a non-AV trained technician. (Kodiak’s sensor pods include one lidar, two radar and three cameras, and they replace the truck’s stock sideview mirrors).
That last bit was really important to us, because the first question we get when we talk to pretty much anybody in the trucking industry is, “If I have an AV fleet, how do I maintain that fleet?”
We have focused on ensuring that the AV platform doesn’t get in the way of the existing routine maintenance infrastructure …read more
GameStop looks to diversify its meme money
Welcome back to Chain Reaction.
Last week, we looked at web3 without web2’s winners. This week, we’re looking at a crossover episode for meme investing.
You can get this in your inbox every Thursday afternoon by subscribing on TechCrunch’s newsletter page.
power to the pumpers
A weekly dispatch from the desk of TechCrunch crypto editor Lucas Matney:
What happens when a meme stock and a meme asset class collide? Well, investors in each hope that the result is a tidal wave of very real money.
This week, GameStop launched an NFT marketplace. The reception wasn’t particularly overwhelming, the marketplace reportedly raked in about $2 million in sales volume which equates to less than $50k in transaction fee revenue on the first day. Daily volumes have trended downward in subsequent days but it’s far from an embarrassing launch, especially when one considers the failures endured by competing upstart marketplaces like Coinbase NFT.
GameStop is hoping to find a revenue-generating vertical that decreases its reliance on brick-and-mortar sales. The timing could be better for the company as NFT dollar volumes have plummeted as crypto prices have taken a hit, but this is clearly still a vision that has registered with the company’s very unique breed of investor profile. GameStop is down more than 40% from its November highs but things have gotten much less bleak in the past couple months as the company stock has rallied some 50%.
Taking down OpenSea — the current market leader — will be no small task, but it doesn’t particularly seem like GameStop is aiming at a straight feature-for-feature copycat and is instead aiming to contribute something different to the ecosystem.
Most secondary NFT sales happen on the Ethereum or Solana blockchains, GameStop is launching their marketplace on what’s called a layer-2 of Ethereum, its a secondary network that handles most of the computation but still relies on the mainnet Ethereum when it comes to storing data on a blockchain.
This is vision of modular blockchains that Ethereum creator Vitalkik Buterin very much stands behind, but it makes things complicated because it forces crypto investors to rally behind a new network as there are many layer-2 options. GameStop is currently using a rollup network called Loopring to bundle transactions, the complication is that you can only transact on GameStop with NFTs that were minted on Loopring, meaning that you can’t buy popular collection like CryptoPunks or Bored Apes on GameStop’s storefront.
This remains a risky choice for GameStop which will probably add support for other chains down the road, but for now is left on a different set of rails that the majority of NFT dollars spent today. This does seem to signal the option as being a bit more future-minded than one might expect, if this was a pure cash grab they could have grabbed at the existing cash more effectively by playing it straight.
Having pure-ish intentions only takes you so far in the crypto world and GameStop realizing success here remains a vertical uphill climb, but meme stock buyers have …read more
https://techcrunch.com/2022/07/17/gamestop-looks-to-diversify-its-meme-money/
NFTs have the potential to become media companies, Rarible co-founder says
As NFTs work to retain mainstream attention, one founder predicts the digital asset sector will pivot in a new direction.
“I think NFT collections will evolve as media companies [into something] like Disney,” Alex Salnikov, co-founder and head of product at NFT marketplace Rarible, said to TechCrunch.
In recent months, major “blue-chip” NFT projects like Bored Ape Yacht Club (BAYC) and Doodles propelled their collections beyond just images and into different sectors.
Modsy quietly shut down while some customers were still awaiting refunds
In late June, Modsy, on online interior design services startup, abruptly ceased offering design services, laid off its designers, and left customers with unfinished renovations and project orders in process. The company returned some service order charges and promised to refund furniture deliveries to those who completed a form. But more than two weeks later, tweets show that many Modsy customers are still awaiting updates.
Unfortunately for them, Modsy has made it tougher to get in touch. While the company’s website remains operational, Modsy recently deleted its Twitter and Facebook pages and made its Instagram account private.
The reason is that Modsy quietly shut down in early July, founder and CEO Shanna Tellerman said to in an email to TechCrunch. Business of Home first reported in June that leadership intended to wind down the “corporate and legal entity of Modsy” and that most of the company’s e-commerce staff, engineers, and management had been let go. But Tellerman had declined to confirm this at the time.
“Capital constraints and uncertain market conditions forced the company to cease operations on July 6 and lay off all employees,” Tellerman told TechCrunch. Modsy’s assets were acquired by a “new entity” out of an insolvency proceeding, she added, and some former employees were hired by the entity to take the business in a “new direction.”
“Customers will be notified on next steps on how to address their needs,” Tellerman said.
The entity is Pencil, LLC, legally classified as a “general assignment for the benefit of creditors” — or ABC. (“Pencil” is a nod to Modsy’s legal name, “Pencil and Pixel, Inc.”). To form an ABC, a business — in this case, Modsy — enters into an agreement to assign its assets to a unaffiliated third party (e.g., Pencil) responsible for conducting the liquidation of the business. It’s not an untested strategy in the tech industry. E-ink smartwatch manufacturer Pebble went the ABC route when it shut down operations in December 2016. Ill-fated game streaming service OnLive also formed an ABC in 2015 to sell its technology to Sony.
ABCs have the advantage of allowing assets to be quickly sold, either for cash (to pay off creditors) or to sell the company to a new owner and keep services operating. The downside is, the equity of the original company — including any founder, investor, and employee equity — is wiped out. A former Modsy employee, speaking to TechCrunch on the condition of anonymity, said they were informed that their stock options are now worthless.
A link emailed to some Modsy customers directs to a form for claims “outside of [refunds],” including equity interest, wages, salaries, bonuses, severance, commissions, and contributions to an employee benefit plan. The wording suggests a process to recover money and benefits employees believe that they’re owed, but it’s unclear which claims, if any, will be successful.
Lennar, a homebuilder based in Fontainebleau, Florida, might be partially funding Pencil, according to the former employee. TechCrunch couldn’t independently confirm this and Tellerman refused to comment, …read more
SIM Cards Are Going Away. Why That’s a Good Thing
Already popular in Europe and Asia, eSIMs let you connect to a wireless network without a physical card. …read more
https://www.wsj.com/articles/sim-cards-esim-replace-iphone-android-11657999211?mod=rss_Technology
Microsoft’s layoffs, Airlift’s shutdown and Lofi Girl’s unplanned study break
audio stuff
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Hey, everyone! Welcome back to Week in Review, the newsletter where we recap the most read TechCrunch stories from the last seven days. Want it in your inbox? Sign up here!
The most read story on the site this week was, once again, unfortunately, about layoffs — this time at Microsoft. While the company plans to grow its headcount in the months ahead, for now it’s cutting “less than 1%” of its 180,000-person workforce as it focuses on “realigning business groups and roles.” “Less than 1%” may not sound huge, but 1% of 180,000 is still nearly 2,000 jobs…
other stuff
Lofi Girl gets taken down: YouTube still hasn’t figured out its issues with false DMCA takedowns. This week, the ridiculously chill YouTube music stream Lofi Girl got hit with a false DMCA claim. The channel is a favorite among students/programmers/anyone looking for some mellow beats to focus to, so the complaints were loud and everywhere. YouTube acknowledged and reversed the screwup, but not before the channel’s two-year streaming streak was broken.
TikTok is eating…what?: After years of unbelievable growth, you’d probably expect that TikTok has taken plenty of user activity from competing social networks — the Facebooks, the Snapchats, etc. But would you bet that it was impacting…say, Google Maps? A senior VP at Google says that’s the case.
Airlift shuts down: Airlift, one of the top startups in Pakistan, shut down suddenly this week. Employees were told on Tuesday that operations of the on-demand delivery service would cease the following day after a crucial fundraising round fell apart.
DoorDash wants bigger orders: Use DoorDash’s “DashPass” service much? Bad news. The “subtotal minimum” on your orders — basically, the amount you have to order before DashPass really does anything — will likely go up in the weeks ahead. Previously hard set at $12 for food or $35 for grocery orders, the company says the new minimum will “vary by store, city, and time of day.” In other words: algorithmssss.
Tesla loses a top AI exec: When it was announced back in March that Tesla’s director of AI, Andrej Karpathy, was going on a temporary sabbatical, the rumor was that it was just the first step toward his more official exit from the company. Sure enough: Karpathy announced on Wednesday that he’s out. Karpathy says he has “no concrete plans” for what’s next.
Nothing official: A few years ago, OnePlus co-founder Carl Pei left the company to start a new hardware venture called Nothing. This week, after months of teasing/rumors/hype, the company announced its first phone — the aptly named Phone (1). Brian Heater spent some time with the phone and shares his thoughts on it — and the wild LED setup on the back — right here.
Image Credits: Brian Heater
audio stuff
Ever wondered what your favorite TechCrunch writer sounds like? Probably …read more