From the startup world – Aug 2

What's happening around the world!

Compilation of news from startup world :

It’s a new era for female Israeli entrepreneurs

The Israeli startup scene has dramatically changed within a couple of years because of the significant increase in investment prospects (i.e. incubators, accelerators, angels), events, meet-ups, competitions, lectures, academic programs and more. Especially interesting are the slowly, yet surely recent alterations in the diversity of the entrepreneurs, with more and more women entering the previously male-dominated startup habitat, turning it into an even more interesting scene. It is a crucial change that should have occurred earlier — but fortunately it is here, and it is here to stay. There have been many debates, with many viable reasons provided, regarding why Israeli women entrepreneurs haven’t been active in the startup scene till now, why they are only now getting recognition and whether they are actually the ones taking more action. Here are a few arguments as to why Israeli women entrepreneurs are starting to blossom.

A French Startup with Silicon Valley Dreams

Lamia Hanafi has just discovered that her brother Safir is using Tinder, the mobile dating app famous for its swiping functionality. “Did you find your wife?” she playfully asks. “Not my wife,” he replies in French, “but dates.” While the search for Mrs. Right continues, all of Safir’s swiping ultimately became part of the inspiration for Lok-Iz, a real estate app co-founded by the brother and sister. The endeavor has brought them from Normandy, France to Silicon Valley for a recent visit.  Encouraged by the success of tech startups that have emerged from the region, the siblings are hoping to glean advice and perhaps even funding from investors. For them, the startup environment in Silicon Valley stands in stark contrast to France’s. “We just noticed that things are going really faster here. It’s different than in France, you have to send an email, keep waiting for two weeks or one month to get this famous interview with this partner. Here, it was just so informal and things are going quicker,” said Lamia.

National movement attracts 4,000 local startups so far

Up to 4,000 local startups have reportedly applied to join the National Movement of 1,000 Digital Startups following the online registration opening on July 23. Officially launched on June 17, the movement aims to produce high-quality, digital-technology-based start-ups that can have a positive impact by solving problems in Indonesia. It was co-initiated by the Communications and Information Ministry alongside KIBAR, a tech start-up ecosystem builder that produces, mentors and nurtures start-ups. Kibar CEO Yansen Kamto told that the number was expected to increase as the end of the registration period was still three months away. “From those who have registered, we will select startups that have outstanding ideas and can provide solutions to Indonesia’s problems. For the Ignition stage in Jakarta, for instance, we only picked 200 participants,” said Yansen on Saturday in Jakarta.

A Q&A with DFJ Partner, Bill Bryant, on “unicorn” valuations and startup investing

I think the next several months and possibly years will be challenging for raising capital. There has definitely been a reset. The market was over extended in an unhealthy way and we are seeing the impact across the board. The catalyst for this reset has been the collapse of public markets stocks where comparisons versus private startup companies are unfavorable. Smart investors are saying: “Why would I invest in this promising startup that values itself at 10 to 15 x revenue when there are fantastic companies trading for 3 x revenue. It doesn’t make sense.”

 Video ad company Teads raises $47M in debt, plans acquisitions and further Asia expansion

Video advertising platform Teads has raised a further $47 million in debt financing. Providing the capital are a bank syndicate made up of BNPP, Bank of China, HSBC, Banque Palatine, and BPI. The European company says the new finance will be used to acquire ad tech companies in possession of technology that will consolidate what it claims is Teads’ “leading position” in the video advertising industry, and to fund further expansion into the Asian market. Teads specialises in so-called “outstream” ads, that is video ads that reside outside of video content, such as placed in an article between two paragraphs of text. Or, put another way, video ads that potentially perform better and are an alternative to video pre-rolls. It last raised £20 million (~$30m) in equity and debt financing back in January 2015. At the time the company was talking up its IPO prospects, but a public offering has yet to materialise. Hence today’s new financing. With that said, Teads says it’s been profitable for the last four years. Meanwhile, M&A targets for the company are said to include smaller ad tech startups developing technologies that Teads can leverage to complement its offering to premium publishers and advertisers.

Tech Stocks’ New Attraction: Dividends

Technology stocks that predate the internet bubble of the late 1990s are hot again, thanks to a feature that many tech firms deliberately avoided in those days: hefty dividends. International Business Machines Corp. , which pays an annual dividend of $5.60 a share, has been one of the biggest contributors to the Dow Jones Industrial Average’s gain this year. Cisco Systems Inc., which didn’t pay a dividend during its 1990s heyday but now pays $1.04 annually, in the last week of July closed at its highest level since before the financial crisis. The wave of cash pouring into older tech stocks reflects investors’ willingness to pay up for investments that provide steady income. Government-bond prices are near all-time highs, sharply depressing yields, and dividend-paying utility and telecommunications stocks are up more than 20% this year, far outpacing the Dow industrials and the S&P 500. Some investors fear that the gains in shares of Cisco, IBM and other income generators are a sign that the embrace of dividend stocks has gone too far. IBM and HP Inc. have increased their dividend in recent years and now yield more than 3%, reflecting the annual dividend payment as a share of the current stock price—even as sales and profitability slipped at both companies. Yields on utility and telecom shares were lower in late July than in the past eight years of annual yields, according to S&P Dow Jones Indices, as share prices in the industries have been bid up.

Start-ups, accelerated

When Ma Shwe Yee Mya Win, 22, started thinking about developing a tech product she drew on her experience as a freelance web designer. She was 18 when she started doing design work and, because she lacked a network of contacts, had to rely on a middleman to source projects. The broker took 50 percent of all she earned. Later, as she developed her skills and contacts, it fell to 30 percent, but she still felt it was too much for simply linking her with clients. Now she is aiming to collect that fee for herself – and in the process make the market more equitable for both sides. With her sister, Ma Honey Mya Win, 24, Shwe Yee Mya Win has established “The Platform”, a Myanmar-based online marketplace for IT freelancers and those who seek their services. They acknowledge that they’re not reinventing the wheel; there are many similar sites and products, including freelancer and Fiverr. But they are rarely, if ever, used in Myanmar; the only real competitors are a handful of Facebook groups and pages. So far, so good: there seems to be a market crying out for someone to make it more efficient. But not so fast! Listening to the sisters’ pitch are Mr Jes Kaliebe Petersen, director of Phandeeyar Accelerator, a program that aims to nurture tech start-ups, and Ko Thar Htet, a start-up coach and entrepreneur. It’s not long before the probing questions begin. What market research have you done? Will you focus on all types of freelance projects, or just specific sectors? How much will you charge and how will you handle payments? What will you do to encourage businesses to post jobs that they need completed? Some questions receive a clear response, others less so. A few problems become clear. The sisters are waiting for further market research to finalise what is known as the minimum viable product (MVP) – the version of the product that requires the least effort to get it to a point where it can be market tested. But the market validation is proving difficult to complete without a product to show prospective users.


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