Amazon Launches Local Register, A Square Competitor With Lower Transaction Rates

Amazon has launched a Square and PayPal Here competitor called Local Register, which provides users with a free app and a $10 card reader, and charges merchants and anyone selling services who use it just 1.75 percent per swipe on both credit and debit transactions, so long as users sign up before October 31. That’s a special rate, and is a full percentage point lower than Square’s 2.75 percent per swiped transaction (3.5 percent plus 15 cents for manual entry), and will last until January 1, 2016, at which point it will return to the standard 2.5 percent per transaction Amazon is charging (or 2.75 percent for manually entered transactions).

The $10 fee Amazon is charging for people to buy its reader is also essentially erased since Amazon grants users of its payment system $10 in transaction credit right off the bat. Amazon is clearly hoping it can lure real-world sellers away from the established competition with more attractive rates, but it’s also boasting that Local Register is backed by Amazon’s customer support, a secure card reader design that “limits swivel” during swiping, and their existing secure infrastructure for accepting payments which is backed by all the experience of their online storefront.

Amazon also offers business reporting within the Local Register app, which is available on the Amazon Appstore, iOS App Store and Google Play, which provides info like when you experience peak sales and overall performance. Amazon is also offering an ecosystem of accessories, including cash drawers, receipt printers and semi-permanent stands and mounts for mobile devices in order to give shop owners and food truck vendors everything they need to set up more involved installations.

Payments received through Local Register go into a seller’s bank account the next business day, and Amazon makes funds available to use on its own ecommerce portal almost immediately. It’s a clever way to funnel some money back into its ecosystem.

 Overall, Amazon looks to be pushing business owners to do all their sales, both online and off, via its platform, and to make that happen it’s willing to undercut the competition. Starting August 19, the new Amazon reader will also be available in Staples locations in the U.S., which should help it somewhat in matching Square’s general retail availability.

Square recently announced an EMV chip card reader that would be coming to the U.S. soon, so that might give it a temporary edge over Amazon, but Amazon can move quickly to iterate on its product when the time comes. Overall, this could be a big challenge to Square and PayPal’s local payment efforts, depending on how aggressively Amazon decides to go after winning over users of its competing services.

-Courtesy: Techcrunch

Battle of the cabs: Olacabs drives into India’s industrial hub Ahmedabad, days after TaxiForSure

olacabs-720x344

The race to cover Indian cities with on-demand cab services has entered a new stretch, with the entry of Olacabs into Ahmedabad just 12 days after its competitor TaxiForSure drove into the capital of Gujarat and home of Indian Prime Minister Narendra Modi. This is the 10th Indian city in which Ola has launched operations since starting out three years ago in Mumbai, while its six-month-younger Bangalore-based competitor is now in five cities.

Ola has raised US$65 million in three rounds of funding, the latest being in June this year, so it has the fuel to speed ahead with its expansion. “We currently have over 12,000 cabs on our platform across these 10 cities and plan to double our capacity in the next one year,” says Anand Subramanian, director of marketing communications, Olacabs. TaxiForSure has a more modest US$14 million in its kitty, but is reported to be in talks to raise funding, and has a similar target of around 25,000 cabs in a year from now.

Gujarat is a leading business hub of the country, and Narendra Modi’s election this year was driven by the so-called Gujarat model of growth. Ahmedabad is often cited for its urban planning, but personal transportation services have been lagging behind other Indian cities. Now that gap will close rapidly. Amdavadis, as the denizens of Ahmedabad are called, enjoy the benefits of competition between taxi aggregators.

Cities like Delhi, Mumbai, and Bangalore have already seen intense competition, especially since the entry of global operator Uber.

In fact, the entry of Uber has shaken up Indian cab operators like Meru Cab, Mega Cab, and EasyCabs. Just last week, a letter from the Association of Radio Taxis to the Reserve Bank of India complained of illegal credit card transactions on the Uberapp.

The GPS-based hassle-free ordering of Uber also stole the thunder from Ola, which had introduced mobile app-based ordering of taxis in India. The launch of UberX, the smaller car variant of the UberBLACK, has also brought it on par in terms of price.

Now the battle to sign on taxis and drivers is in full swing on these services, none of which keep their own fleets. Hence the race to Ahmedabad, in which TaxiForSure had its nose ahead of Ola. But then again, this race has just begun.
-Courtesy: Techinasia

Why Alibaba’s Snapchat Stake Could Touch Off a Wider Investment Binge

 

Chinese investment in U.S. companies has skyrocketed over the last few years, particularly as monoliths such as Alibaba Group prepare to go public. That company, founded by multi-billionaire entrepreneur Jack Ma, has invested hundreds of millions of dollars in U.S tech companies that will be valuable to Alibaba as it continues to expand.

But it’s a two-way street, and one with some unforeseen turns. U.S. tech companies are likely to profit from a strategic entree into a difficult-to-tackle, and often-opaque Chinese market, many investors say. At the same time, competition for some of the hottest Silicon Valley startups is likely to increase an already white-hot market, according to other venture capitalists.

“Imagine if Alibaba set up a joint venture with Snapchat, to bring a native version to China, and Alibaba had 25 percent of the joint venture,” says John Backus, founder and managing partner of New Atlantic Ventures. “They make more money than a growth equity investor would, because they make money on the investment and the joint venture.”

Snapchat, the mobile chat application that swatted away a $3 billion offer from Facebook, is reportedly in negotiations with Alibaba for a financing round that would value the company at $10 billion.

Chinese investment in the U.S. doubled in 2013 to $14 billion, according to Rhodium Group, an investment management and strategic planning consultancy in New York. Through the first quarter of 2014, Chinese companies announced $8 billion worth of U.S. deals.

Similarly, China’s appetite for initial public offerings in the U.S. has also increased, with 10 IPOs year-to-date for 2014, according to IPO fund manager Renaissance Capital. That’s about one quarter of all non-U.S. companies that have listed here, but only a sliver of the 181 total IPOs for the same time period. Nevertheless, it’s five times the number of Chinese listings for the full-year 2012.

Besides Alibaba, other Chinese companies purchasing U.S. tech companies include Huawei and Lenovo. (It’s not all tech though: Shuanghui International recently acquired pork producer and American stalwart Smithfield for $4.7 billion last year.)

Despite the money pouring in, many venture capitalists scoff at the idea that Chinese investments and its gargantuan purchasing power could cause a run on valuable tech companies.

“These investments represent access to the Chinese market,” says Maha Ibrahim, a general partner at venture capital firm Canaan Partners, of San Francisco.

Its portfolio company Kabam, the mobile gaming concern, announced Thursday it had received $120 million from Alibaba. Ibrahim led Canaan’s Series A investment of $3.5 million in Kabam, of which Canaan is a majority owner today. Alibaba’s investment has pushed that company’s valuation to $1 billion.

Give and Take

More than the money, Alibaba’s ownership stake will allow Kabam to continue growing, says Ibrahim. She adds that Kabam, which has 200 developers in Beijing, has seen important revenue growth in China and elsewhere.

“Kabam is committed to the Asian market, and Alibaba is increasingly committed to the U.S. market, so a partnership is really a bi-directional thing,” Ibrahim says.

Going forward, investors speculate that Alibaba will continue looking for tech companies that will help it expand in electronic payments, mobile commerce, and gaming. More generally, other Chinese companies will look at strategic investments in tech startups, much the way Google and Intel do now through their venture capital arms.

And, as a side note, as U.S. search and content firm Yahoo looks to unwind its 23 percent ownership stake in Alibaba when Alibaba goes public in September, it could end up competing with Alibaba for companies to acquire as it looks to reinvent itself. Or, it could even be acquired by Alibaba itself.

“Chinese companies and investors see an opportunity [in Silicon Valley],” says David Zilberman, a partner at Comcast Ventures, the venture capital affiliate of Comcast Corp., in San Francisco. “That certainly makes investing more competitive for VCs, but that’s part and parcel of current market conditions.”

-Courtesy: Inc.com

Meal delivery site Foodpanda arrives in Hong Kong, its fourteenth market in Asia

hong kong food

Foodpanda, the meal delivery service born out of Berlin-based Rocket Internet, announced today it has officially launched in Hong Kong. The coastal city marks the company’s fourteenth destination in Asia, and its forty-fifth destination worldwide.

Foodpanda’s entrance in Hong Kong pits it against Delivery.com – the venture-backed, NYC-based startup launched local service in Hong Kong last April. That company’s site, however, only features 34 merchant listings. Foodpanda, which has operated in stealth in Hong Kong since May, claims to have more than 100 listings. Other competitors in the space include local players like Koziness, which recently acquired Dial-a-Dinner and Soho Delivery, along with any other company that optimizes its SEO for search terms like “Hong Kong Food Delivery.”

Success rates for Rocket Internet ventures tend to vary wildly market-by-market and company-by-company. The self-proclaimed incubator has pushed Foodpanda aggressively around the world, going so far as to acquire competitors in Russia, Hungary, and Brazil. Rocket’s bull bet on food delivery perhaps explains it’s relatively delayed entrance into Hong Kong, where it will rest alongside just two other Rocket ventures: taxi app Easy Taxi and property listing site Wimdu.

-Courtesy: Techinasia

 

Amazon’s Master Of Commerce Move Into The Phone Game

Mobile is so 2010. So why would Amazon throw its hat into the game of phones?

That’s the thing — it didn’t. The company is headed into battle in two other markets full of potential: real-world commerce and digital advertising.

Amazon has focused its business almost solely on e-commerce since its launch in 1994. Twenty years later, the vast majority of commerce still takes place in the physical world; a 2014 Q1 US Census report shows that digital sales account for just 6 percent of total sales.

So, if 94 percent of sales still happens in the real world, how does Amazon conquer this territory? It introduces a phone.

The Fire Phone can recognize a physical object, scan a bar code, and quickly provide you with Amazon’s prices, taking showrooming to a whole new level. And then, the company is able to unlock that other 94 percent of commerce spend that it previously couldn’t touch.

Should retailers be shaking in their proverbial boots? Probably.

With an active user base of 244 million, Amazon has become a trusted provider of goods. Now, those who trust the company already can buy an Amazon phone that makes it even easier to find what they want and order it with a couple of clicks. Even if just 10 percent of active users buy a Fire, that’s still 24 million people who will have access to Amazon’s low prices, vast inventory, and shipping.

But real-world commerce isn’t the only new frontier for Amazon; the Fire Phone unlocks mobile advertising opportunities for the company, making it the third viable player in the thriving space, along with Google and Facebook.

In 2014, mobile advertising in the U.S. will total $17.73 billion and reach over $35 billion by 2017, eclipsing online advertising spend, according to analysis from eMarketer. Google and Facebook combined took home over two-thirds of mobile ad spending last year. Now, Amazon could give these two companies stiff competition due to its customer relationships and new features on its phone that aren’t available on Apple or Android devices. Amazon becomes the third major player with a mobile device tied to an immense database of browsing and past purchase data.

With this phone, Amazon is able to do exactly the same thing as Google and Facebook: utilize customer identities and interest to bring targeted mobile ads to them on their phones. But Amazon has a distinct advantage: Its users have already bought something from them! As a result, the company is even better-equipped than other companies to use past purchase data to send highly tailored mobile ads to consumers. Amazon will be able to guarantee brands a pre-qualified, “in-market” audience. Who else can do that?

In his demo of the Fire, Bezos made the real-world connections for the phone absolutely apparent, talking about how easy it is to walk down the street and use Firefly to recognize signs, goods, etc. This feature opens up so many doors: the ability to recognize places in the real world, to search for things you want based on what Amazon knows you are interested in, and the ability for Amazon to harness that data for more relevant recommendations.

In effect, the Fire could provide an understanding of the physical world and merchant locations and, when combined with everything else Amazon knows about a user, actually deliver on the promise of “Marketing that consumers find really valuable, not intrusive.” Now imagine that they start pushing you the occasional recommendation when you’re near a physical store. Imagine you can get a reminder for something you have scanned when you’re near a place to buy it, with Amazon taking its cut for driving that real-world transaction. That massively changes the game of mobile marketing.

Rebecca Lieb, an analyst with the Altimeter Group, discussed the real impact of the Fire Phone with the New York Times: “Scan a product or listen to music, and you’re delivered straight to the page on Amazon on which you can purchase it. Impulse shopping just went to a new level.”

Amazon is not in the mobile business, the phone business or the Internet of things business. And while analysts appear divided on the short- and long-term impact of the Fire for Amazon’s overall business model, they should agree on one point: Bezos and Co. are the masters of the commerce business, and the Fire Phone is just one tool that can be used to help it gain its slice of the immense cash flow happening not online, but on Main Street.

I would even go so far as to say that the Fire Phone will be key to the Amazon growth strategy for the next 50 years. Congratulations, Mr. Bezos. Well played. The only thing I am wondering is, Why isn’t the phone free?

-Courtesy: Techcrunch

Crowdfunding Growing at a Startling Rate, New Report Says

Enlist Twitter for Crowdfunding Success

But as with any fledgling industry moving towards maturity, more and more data has started to appear that makes answering these questions a bit easier. One recent mountain of data on the crowdfunding world that just arrived contains a plethora of information — read on as I distill some of it for you.

Barry James and his team at The Crowd Data Center recently released eFunding & The State of The Crowdfunding Nation, a report (which can be purchased for $49) that studied more than 75,000 crowdfunding campaigns for the first quarter of 2014. The report provides a wealth of information about both rewards-based and equity-crowdfunding campaigns. It puts crowdfunding into a whole new perspective.

Those of us in the industry already knew how profoundly the crowdfunding explosion had affected society. But the report puts it into perspective, and one particular fact truly illustrates the explosive nature of the burgeoning industry. Gordon Moore, one of Intel’s founders, coined Moore’s Law that predicted computing power would grow exponentially for the foreseeable future, doubling every 18 to 24 months.

According to the eFunding report, crowdfunding on a global basis is doubling at nearly 10 times the rate of Moore’s Law.

The report and the infographics accompanying it offer insights into what is happening in crowdfunding worldwide by drawing on a continuous influx of data from live crowdfunding campaigns as well as studying the major funding platforms, pledges and patterns of donors and investors during the first quarter of 2014. Here are some interesting facts and numbers about the global effect of crowdfunding from the eFundingreport:

  • More than $57,000 is pledged to a crowdfunding campaign somewhere in the world every hour of every day.
  • The five most popular categories of successful crowdfunding campaigns are gaming, technology, design, film and music.
  • Rewards-based campaigns on Kickstarter successfully fund 42.8 percent of the time. On Indiegogo, the success rate is 14.4 percent.
  • The average number of backers of a successful Kickstarter campaign is 255.
  • An average of 325 new crowdfunding campaigns launch every day.

These tidbits of information are a great resource for anyone who is looking to crowdfund. For example, being able to look at the statistics that are now available allows interested crowdfunders to know which platforms work and how well. James and his crew are constantly updating the site with more and more research. The site has search tools that let anyone answer almost any data-driven question about crowdfunding, questions that are crucial when someone is considering, planning and launching a campaign.

Until now, getting answers to these could take hours or days of research on many different platforms, trying to compare apples to oranges.

As someone experienced with the field, not only can I now find promising crowdfunding rising stars or rocketing campaigns far before they’ve become obvious to the world, but I can do so by mining the live-data (registration is required) on active campaigns on a daily or even hourly basis. The site’s analytics can also be used to dig deeper into the data for emerging trends.

While traditionally, investing has been a very closed world with information closely guarded and available at a premium, if at all, one of the things I love about crowdfunding that’s transformative is its openness and transparency. Having data such as this available will assist investors and entrepreneurs as the crowdfunding world booms when equity crowdfunding under Title III of the JOBS Act soon becomes a reality.

-Courtesy: Entrepreneur.com

India’s flash sales startup FashionAndYou raises $10 million

India’s flash sales startup FashionAndYou raises $10 million

India’s flash sales startup FashionAndYou has raised $10 million in funding from new and existing investors. This includes Sequoia Capital, Smile Group, Norwest Venture Partners, Intel Capital and Nokia Growth Partners.

This comes a lengthy two and half years after FashionAndYou raised $40 million in series B funding, on top of the $8 million it attracted in 2010.

This fresh funding goes into strengthening the estore’s technology, attracting more customers, and increasing sales.

The startup is facing ever stronger competition in this online fashion shopping sector from Myntra and Rocket Internet’s Jabong

. Specializing in men’s and women’s clothing, accessories, and home decor, FashionAndYou offers 15 new daily sales wherein users get the chance to buy items from top brands at discounted prices. The startup recently claimed it reached 5.5 million members.

Aasheesh Mediratta, FashionAndYou’s CEO, said in a statement today:

“We have overcome a challenging phase in the last year and streamlined operations resulting in a lean and efficient organisation. The new funds will help strengthen the technology behind our inventory light business model, acquire more customers to bolster our flash sales dominance, and build a more cohesive brand.”

Women shoppers account for 70 percent of sales on FashionAndYou and it’s anticipated this figure will go up. Industry estimates suggest that woman will drive growth in online shopping in the country; spending by female eshoppers is expected to grow by a factor of six in the next three years, outpacing the general growth of ecommerce expenditure in India.

India’s eshoppers spent $16 billion last year.

-Courtesy: Techinasia

Kickstarter Simplifies Its Rules And Lowers The Barrier For Project Acceptance

Crowdfunding site Kickstarter, which has almost become the ‘Kleenex’ of the crowd-sourced funding world in terms of brand recognition, today unveiled two changes to its business model (via The Verge) that will have a huge impact on non-equity crowdfunding in general and on its main rival Indiegogo. Basically, Kickstarter is simplifying its rules and relaxing the barriers for entry, even introducing a “Launch Now” feature that allows project creators to bypass the network’s approval process entirely.

That means that what you see on Kickstarter is no longer necessarily vetted for feasibility or content standards – which means fewer guarantees that hardware projects, which typically have a low incidence of success anyway, will ever make it to market. But Kickstarter appears to have decided to stop fighting the tide and go with the flow; now it can unapologetically embrace its role as a community-driven mechanism for investing in ideas, instead of even pretending in any way to be a pre-order store for devices.

Kickstarter has also trimmed its rules for creators document, cutting it by over two-thirds from 1,000 words down to 300, and previously banned campaign types including bath and beauty projects, as well as multiple reward items for hardware projects are now allowed. Non-developers can offer app projects, too, though charities, GMOs and photo-style renderings that might mislead people into believing a graphic is a photo are still off-limits, the Verge reports.

Approvals for projects are now done algorithmically, instead of employing human moderators initially, and if they pass that process (which can take as few as five minutes) they’re free to go live. It’s a very different take on crowdfunding to the one Kickstarter initially espoused, and one that in many respects deemphasizes community and instead puts the focus on growth. It’s not quite Indiegogo’s stance of neutral network operator, but it’s much closer to that vision, and it means we should see a whole host of new projects on the site that we’d never have seen before.

For creators, this is obviously good news. I’ve spoken to many who have been frustrating at the Kickstarter approval process and had their enthusiasm bogged by subtleties in the rules that prevented them from launching. Many of these would decamp to Indiegogo as a result. But it could also be an issue for the network long-term – if overall quality takes a hit, that might ultimately affect any single project’s chances of success. Discovery could also become a problem as the projects ranks swell.

Kickstarter has clearly evaded the risk of the backer community souring based on frustration and failed projects however; it’s been 5 years since it launched, and so far, it continues to attract backers and churn out successful campaigns. It’s a new type of beast, and half a decade has been time enough for its users to become accustomed to its identity as not-quite-store but not-quite-charity.

This also presents an opportunity for other startups looking for ways to embrace the crowdfunding trend – less editorial oversight by Kickstarter itself means users will be looking elsewhere for a filter for the network, for curation and for alternate models. Kickstarter may become the Amazon of crowdfunding, but there’s still room for boutique stores, Pinterests and  Shopifys in the space, too.

-Courtesy: Techcrunch

Korean ecommerce giant Coupang nabs $100M in funding from Sequoia Capital

coupang logo

Coupang, the rapidly-growing Seoul-based ecommerce startup, announced this morning it raised US$100 million in an investment led by Sequoia Capital Global Equities and Sequoia Heritage. The funding will be used to help the company continue its quest to clinch Korea’s online shopping market.

“With the support of Sequoia and this round, we can go even further in our quest to differentiate the end-to-end experience for our customers,” said Coupang CEO and founder Bon Kim in a statement. “Most purchases are now made via mobile and can be delivered same-day or next-day. We aim to continue to create captivating experiences.”

As its name indicates, Coupang originated as one of the many Groupon-inspired startups that emerged globally after that Chicago-based company shook up the US retail market with its group buying schemes. Whereas many of those startups quickly went out of business, Coupang pivoted towards traditional ecommerce of the Amazon-esque strain in order to stay afloat. This worked to Kim’s advantage, since South Korea lacked an all-in-one online shopping site despite containing a tech-savvy and relatively wealthy populace of about 50 million residents. Now, three years after it was founded, the company generates US$1 billion in annual gross merchandise volume, thereby placing it alongside India’s Flipkart, China’s JD.com, and Southeast Asia’s Lazada

-Courtesy: Techinasia

Payments Firm Swipely Raises $20M More As Its Processing Tally Crosses The $2B Mark

Payments company Swipely has announced that it raised a Series C round totaling $20 million. This round, led by the Pritzker Group and including previous investors Shasta Ventures and First Round Capital, brings the company’s tally to more than $40 million.

Swipely had recently announced that its payment processing rate had doubled to $2 billion on an annual basis, but declined to tell TechCrunch at the time if it was pursuing more capital. As it turns out, and as this publication presumed, it was in the process of nailing down the Series C. The company’s revenue tracks up with its payment-processing rate, so to see it double that figure from $1 billion to $2 billion in under a year implies quick top-line growth.

Competitor Square is processing around 15 times as much, or in the neighborhood of $30 billion.

Swipely CEO Angus Davis declined to discuss a solid growth expectation for the company’s processing rate, but he did tell me that companies growing at more than 50 percent yearly can be described as going through a period of hyper-growth, and that his firm is growing more quickly than that. Davis is known for his work at TellMe, which sold to Microsoft for around $800 million.

Davis also told TechCrunch that Swipely’s lifetime customer value (LTV) compared to its customer acquisition cost (CAC) was “well in excess” of three, a standard industry threshold. LTV to CAC is a SaaS firm metric that is widely cited. It implies that a company is generating more than thrice the cost of acquiring a new customer in top line. That excess revenue then covers other corporate costs. If your ratio is less than three — or more 0.33, if you flip the numerator and denominator, of course — your growth as a firm can be viewed as a combination of being inefficient and too expensive.

The company intended to raise between $15 million and $20 million for marketing and product expansion.

I also asked the firm about its views on Square’s recent move into loaning clients money for expansion purposes. Swipely, Davis told TechCrunch, already does that in some capacity, using third-party support. The company, if I had to infer, doesn’t view the effort as a core part of its business, but one that it could expand.

Square’s financials, recently disclosed, indicate that the company’s gross profit margin is a pressure point. Moving up the value stack — loans could supply such incomes — will therefore be attractive to market participants.

-Courtesy: Techcrunch