A compilation of important news from the startup world:
Financial tech startups compete for overlooked US immigrant market
For two decades, Noe Sanchez sent money from California to his father in Mexico CITY through storefront outlets of traditional remittance firms such as Western Union. Now he grabs his smartphone and uses Remitly, one of several new competing mobile apps promoting cheap and quick international transfers. Sanchez quickly got over his initial unease of sending money through an unfamiliar company. Founded in 2011 and backed by Amazon.com Inc Chief Executive Jeff Bezos’s venture capital arm, Remitly is among a vanguard of financial technology , or fintech, companies targeting what they view as an under-served immigrant market – traditionally disregarded as high-risk and low-margin. Many emerging companies in the fast-growing fintech sector, by contrast, view financial services for immigrants as an untapped source of revenue. They include remittance apps, such as Remitly, TransferWise and Xoom – an early player bought last year by PayPal Holdings Inc for $890 million – along with companies such as Lendup and Oportun, which lend to high-risk borrowers.
As The EU Vote Approaches What Do Tech Startups Think Of The Brexit Prospect
What do Britain’s upcoming technology businesses think of the prospect of an exit from the European Union? With the referendum on EU membership now exactly one month away, the opinion polls suggest the ‘remain’ side is gaining ground, but pollsters were famously wrong about the outcome of the Britain’s last general election and the result can’t be taken for granted. If the remain campaigners win the day, it will be business is usual on June 24th,but if the votes goes the other way, at least two years of exit negotiations will follow. Arguably Britain’s tech companies are far more exposed to the potential shock of an EU exit than most SME businesses. That’s partly because tech startups – particularly in London – are already playing in an international marketplace, even before they begin to sell goods and services or earn revenues.
How Unit Economics Can Place Value On Tech Startups
You have probably heard that there is a growing problem in Silicon Valley. Startups are being valued too high, stay private for too long and have soaring burn rates. But one thing continues to be overlooked; unit economics. It is a basic concept that looks at the direct revenues and costs associated with a particular business model. This is expressed on a per unit basis and has meaning to businesses of all sizes, large and small. Startups, now more than ever, struggle to explain how their unit economics will ever make sense. Essentially they are losing money on an ongoing basis with no sign of ever turning a profit. A change in mentality to improve this will help manage the perceived tech bubble, but also increase the cost of raising capital. Building the model first requires you to choose a unit. In a consumer facing business the best unit is often a single customer. The investment at the customer level is defined by customer acquisition costs (CAC), which is the total sales and marketing expenses of acquiring a single customer. Once that is determined, you can derive the amount of value each unit generates. This is often referred to as lifetime value (LTV). Mathematically it is a representation of gross margin, monthly churn percentage and monthly revenue per customer.
‘10/12 Industry Report’: Five oil and gas tech startups to watch
Tough economic times encourage entrepreneurialism. Just look at Google, McDonald’s and Microsoft—all of which were founded during tough economic times. And as 10/12 Industry Report details in a feature from its latest quarterly issue, tough economic times in the oil and gas sector is spurring giants such as Shell, Halliburton and Chevron to invest in private tech companies aimed at increasing efficiencies, safety and production to positively impact bottom lines. A number of new technological innovations in the industry were recently on display at the second annual Energy Innovation and Entrepreneurship Summit, held in conjunction with the New Orleans Entrepreneur Week. Among the startups showcased at the event, 10/12 Industry Report highlights five startups in the industry to watch this year. Among them is Spotter, a tablet app created by Baton Rouge-based Envoc, which allows companies to create and manage their own inspection questionnaires or forms for users in the field. The app was created to replace the pen and paper in order to make audits and inspections more accurate than ever before.
Music Tech Startups Scramble To Gain Traction (And Investors) In Nashville
For seven music technology startups working in Nashville this year, last Monday marked a big day — Pitch Day, when their founders and CEOs courted investors with snazzy slideshows and pithy presentations. They pitched ideas like customizing sheet music. Selling concert merchandise online. Streaming songs alongside user-submitted photos. These companies recently completed an accelerator program called Project Music, run out of Nashville’s Entrepreneur Center. And while it can be difficult for any startup in the marketplace to find funding, these companies face an extra challenge: Many investors are still skittish about risking money in the music technology business. “In general, music companies have been reticent to invest in smaller technology plays because they’ve been trying to do it themselves,” says Joe Galante, a former chairman of Sony Music Nashville and co-founder of Project Music. So that leaves some entrepreneurs feeling stuck in the middle.
Five Common Barriers To Getting Startup Money: A Lesson From Asia
If you talk to venture capitalists in Asia and need not beg for money, ask them about rejection rates. China-based startup accelerator SOSV accepts just 3% of its applicants. Venture capital firm Beenext of Japan and Singapore funds 60 of the 1,000 companies it has screened. Just two random examples. Why do most applicants fall short? Money is naturally limited and the high-net-worth individuals behind venture capital funds want a return. But a lot of those individuals are adventurous people willing to gamble on good ideas even without an elaborate plan for making money. Startups can also seek crowdfunding or get bank loans. There’s more to the rejections.
Temasek sees no sharp rebound in global startup valuations
Funding for global tech startups should return,even if valuations don’t rebound to their 2015 levels as investors press for less inflated values, a senior executive at Singapore state investor Temasek [TEM.UL] said. Lured by a potential market for app-based, on-demand and logistics-heavy businesses, venture capitalists and others have thrown billions of dollars to startups that often need only cash and a working app to enter the fray. Temasek, which manages a portfolio worth S$266 billion ($193 billion), has invested in several startups including India’s restaurant search and food delivery service Zomato and online marketplace Snapdeal, as well as Chinese ride-hailing firm Didi Chuxing.
Three Israeli startups go through to finals in Hong Kong app contest
Israeli mobile app developers, Castle Builders, Tekoia, and E.Soof have been picked to take part in the finals of the Asia Smartphone Apps competition to be held in June. Three Israeli mobile app companies will be heading to Hong Kong in June to take part in the final round of the Asia Smartphone Apps competition to be held on June 14-17th. The three companies, Tekoia, Castle Builders, and E.Soof will each compete in one of three categories, Advertising and Marketing, Creative Lifestyle, and Games and Edutainment. Each of them faces competition from two other companies. The winners will all receive a unique opportunity to showcase their technologies, meet investors and potential partners in Asia’s smartphone industry, and attend seminars and workshops.
Startups boosted by Unilever-local strategic incubator platform tie-up
CONSUMER goods giant Unilever has joined hands with a joint incubator platform to accelerate the growth of local startups with cutting-edge technology. It’s another step that confirms the company’s focus and support for local entrepreneurship after the launch of its Foundry initiative in Shanghai last year. The joint multinational companies incubator platform launched by the Zhangjiang High-Tech Park aims to become a hotspot where a variety of resources from local firms, startups, multinational companies as well as overseas incubators converge and integrate. Shanghai is ready to leverage the opportunities and policies of the pilot free trade zone, the international scientific and technological innovation center as well as the pilot reform zone for all-round innovation to launch a series of early and pilot implementation policy in order to promote multi-aspect innovation with scientific innovation as the focus, and to motivate and promote innovation spirit and entrepreneurship in the whole society.