News from around the world – June 26

A compilation of important news from the startup world: 

What Brexit Means For Tech
Now that the citizens of the U.K. have voted to leave the European Union, it’s time to take a good look at the implications for the technology sector. So-called Brexit will take a while to arrive. Prime minister David Cameron indicated Friday morning that he will stay on for three months before handing over to a successor, and he wants the next prime minister to begin the negotiations with the EU over the terms of the exit. That could take two years, so Britain will probably only leave in 2018. That means years of uncertainty, with tech firms and investors unable to know for sure how regulations will evolve (or devolve) in the U.K. and, indeed, the EU. As Stratechery’s Ben Thompson has correctly noted, the U.K. is one of the voices in Europe that has called for relatively light-touch tech regulation in the EU. Without it, Germany and France will have even stronger positions in the bloc than they currently do. Germany and France are the countries that have taken the lead on cracking down on American tech firms, such as Google, over their perceived transgressions.

Jordanian Startups to Exhibit for the First Time at Mobile World Congress Shanghai
Mobile World Congress (MWC) Shanghai, Asia’s biggest mobile event of the year is set to raise its curtains this year starting from June 29th to July 1st. Organized by the GSMA and held each year in the business hub of Shanghai, China; MWC is a mobile event like no other, bringing together the worldwide mobile industry from C-level mobile executives to tech-savvy consumers to experience a connected life full of exciting new technologies and products. For the very first time in the history of MWC, onlookers will get to witness a stand-alone Jordan Pavilion with 12 Jordanian Startups representing the nation. Led by Zain Jordan along with Manaseer Group and Intaj, the initiative aims to provide Jordanian entrepreneurs and startups with the right essentials to develop and transform their creative and innovative ideas into productive business’ that aim to operate on a local, regional and global scale. Zain Jordan (The revolutionary telecommunications provider in Jordan) along with Manaseer Group (The pioneers in planning, designing, and implementing successful businesses) and Intaj, (The Information and Communications Technology Association of Jordan) is presenting twelve exclusive startups this opportunity to showcase at the MWC

$100m fund launched for impact startups in Africa, Latin America, and Asia
Capria, a global business accelerator for impact fund managers, on Thursday announced the launch of a US$100-million fund targeting early-stage impact businesses across Africa, Latin America, and Asia. According to a press release sent to Ventureburn the fund plans to invest in at least 15 impact funds over the next five years, significantly expanding Capria Network’s global reach. By 2025, Capria says it hopes to unlock over US$500-million in local and global capital to invest in businesses that will “cumulatively serve more than 5 million low-income people across diverse emerging economies”. The fund, which is meant to address the fact that less than 10% of impact investors are focused on early-stage investments by expanding investment focus from micro businesses (served by microfinance) to the SMEs (small and medium enterprises). This, it says, will enable local companies to scale up providing more jobs, improved livelihoods, and better access to affordable products and services.

500 Startups, East Ventures invest in Indonesian agriculture-tech startup iGrow
LEADING global venture capital seed fund and startup accelerator 500 Startups and early stage investor East Ventures have invested an unspecified amount in Indonesian agriculture-tech startup iGrow. iGrow, which won Tech in Asia’s Startup Arena in Jakarta in 2014, is a long-term project that aims to link investors to underemployed farmers in order to make use of under-utilized land and produce organic food and sustainable incomes. In short, an individual invests a small sum of money, which a farmer will use to plant and cultivate crops chosen by the investor, which can be almost anything from bananas to avocados to longans. The startup has been dubbed the ‘Farmville for real life’, and has been hailed for leading the way towards sustainable agriculture in Indonesia, reports Forbes. The investment is a long-term one, and individuals will have to wait for the crops to yield harvests, which can take a few years. However, once the harvests are sold, investors receive money back, which varies according to the growth cycles and expected return on investment (ROI).

‘Investing for good’ gains appeal amid rocky tech startup market
As valuations flounder for Silicon Valley startups once worth billions of dollars, investor interest is on the rise in startups with both financial and social benefits, such as healthcare software for poor communities or low cost solar panels for homes. So-called “impact investing” rose to US$15.2 billion globally last year from US$10.6 billion in 2014, according to a recent report by the Global Impact Investing Network. The figure includes several types of investment, from funds to foundations, which intend to generate social and financial returns. The group expects a 16 percent rise in 2016. The change reflects investor concern with current valuations of more mainstream technology startups, a desire to help by some investors and a broadening definition of social-good startups. There is also growing sentiment that the rise of mobile technology will allow for profitable upstarts in parts of the world relatively untouched by Silicon Valley. Earlier this year Union Square Ventures Partner Fred Wilson called the developing world “the next whitespace” for venture capital, pointing to 2.5 billion people poised to adopt smartphones.

Fintech investment in Asia hits US$2.6 billion in Q1 16
Following a drop off in the fourth quarter of 2015 (Q4 15) at US$0.5 billion, fintech investment in Asia reversed course in first quarter of 2016 (Q1 16) to hit a new high of US$2.6 billion. Total investment in fintech companies globally hit US$5.7 billion in Q1 16, with venture capitalists (VC)-backed fintech companies drawing US$4.9 billion in funding. China accounted for US$2.4 billion of Asia fintech funding, and 49 percent of fintech funding across all geographies, primarily as a result of more than US$1 billion funding rounds to JD Finance and Lu.com. These findings were part of the Pulse of Fintech report, a quarterly global report on fintech VC trends published jointly by KPMG International and CB Insights. The report also revealed that North America saw both fintech funding and deals rebound following a major drop in Q4 15, as VC-backed fintech companies raised US$1.8 billion across 128 deals, an increase of 80 percent in funding quarter-over-quarter.

U.K. Tech Startups Prepare For Life After Brexit
Entrepreneurs working in London’s tech sector got a rude awakening this morning when they looked at their phones: against the bookmakers and pollster’s olds, Britain had voted to leave the EU. Around 90% of technology founders in the UK didn’t want this result. Many of them are from overseas themselves. Today, still reeling from the shock of a result that could have major economic ramifications, startup founders in the London are having to consider new strategies for growing their companies in a country that suddenly doesn’t seem as welcoming to the foreigners they want to hire. “It’s just a very depressing day,” says Herman Narula, founder of simulation software maker Improbable which is based in Farringdon, London and recently raised $20 million from Andreessen Horowitz. Over at the headquarters of Made.com, an e-commerce firm based in London, the atmosphere is said to be “very depressed,” says Brent Hoberman, the co-founder of Lastminute.com and Founders Factory, a large tech accelerator in the capital. “People feel rejection. I think this is what the Leave campaign underestimated: the psychology of rejecting openness.”

Twilio IPO offers valuable lessons for tech startups
The company was listed on the New York Stock Exchange under the ticker symbol TWLO opening at TK. Twilio was worth $1bn (£670m) as a private company, and it is now worth $2.4bn at $29 a share. Twilio provides a messaging platform for developers, which means that companies can use its tools and services to create their own messaging apps and features. It has stayed focused on helping software developers do things that were previously considered really hard. Huge barriers prevented developers from working with the different telecoms providers and their complicated SMS gateways, their many standards and protocols, and their unmanageable pricing structures. Twilio successfully broke down all the things that stopped developers from creating messaging features into a few simple pieces that made a whole new market possible. Twilio counts Uber, Airbnb and eBay among their customers. These companies use the platform to handle SMS alerts for things like journey ETAs, bookings and order confirmations.

Four tech startups in Colorado Springs make their pitches
Colorado Springs had its own version of “Shark Tank” Thursday evening, with four different technology startups presenting their ideas to fellow entrepreneurs packed inside Epicentral Coworking downtown. The quartet of presentations chosen for this month’s New Tech event consisted of CreativeLab.tv, EdYOUU, HitSpot and A Better Mousetrap, all tech-based plans. Each participant had five minutes to pitch their startup, and the audience of nearly 80 people had five minutes to critique and ask questions. Sam Elliott led the event for Peak Startup, which hosts New Tech on the fourth Thursday of every month. “What Peak Startup’s mission is to make sure that those who want to start companies here in Colorado Springs have the resources they need beyond just the community and beyond being able to come to these events,” he said. Paul Wagner introduced CreativeLab.tv, a web and mobile development company.

Federal Law Could Hurt Tech Start-Ups
A change to federal wage laws could be particularly painful for technology startups. On Dec. 1, the federal threshold for overtime will be raised. Most workers who are paid less than $47,476 annually would be paid overtime for any work over 40 hours a week. While there are a number of exemptions to that rule, tech workers are not among them. Employees of technology startups typically forego a higher wage for a share of ownership in the company. Diana Furchtgott-Roth, a former economist with the U.S. Department of Labor, said the changes could kill innovative companies. “It is really tragic that this sector of the American economy, which has paid off so well for so many people and has been a source of innovation, is going to have to change its rules,” she said. “Some startups have been incredibly successful and made millions for the workers who have been on that first rung of the startup.”

Be the first to comment

Leave a Reply

Your email address will not be published.


*


Money | Money | Money