Do you need to raise funds to get your idea off the ground?
You’ve got a brilliant business idea, but your bank lacks your vision. (Or perhaps you lack the collateral.)
Maybe you reached out to friends and family, but you know they lost their shirts when your brother-in-law’s salmon-flavored energy drink flopped. Is this the death of your nascent business?
Rocket Internet, the Berlin-based incubator founded by the Samwer brothers with a number of notable exits and fundings under its belt, is branching further into Asia, and specifically emerging markets.
It’s partnering with Ooredoo, the main carrier in Qatar (formerly known as QTel), in a new joint venture called Asia Internet Holding to build and fund e-commerce startups, especially those focused on mobile services. The pair are not yet revealing how much money they are investing, but you could look to similar projects from Rocket as one marker: Africa Internet Holding, also formed in partnership with carriers, is building and investing in its regional startup portfolio with $410 million to spend.
An Indian startup which builds robots that help online retailers automate their warehouses has raised funding from New York-based investment firm Tiger Global and early-stage investor Blume Ventures.
Grey Orange Robotics received about Rs 54 crore in the round where two angel investors Raju Reddy and Dileep Nath also participated, said a person with direct knowledge of the developments.
Australian email marketing platform Campaign Monitor has raised US$250 million in funding from American VC firm Insight Venture Partners. The funds will be used for expansion to the US and Europe as well as for acquisitions. Owners Dave Greiner and Ben Richardson have bootstrapped the business to date. Campaign Monitor has 100,000 paying customers in 19 countries. The equity stake in exchange for the investment is not disclosed, but it is estimated that the latest funding pegs Campaign Monitor’s value at US$600 million. This is an exciting time for the Australian ecosystem and represents the largest amount ever raised for an Australian startup. They’ve done it their way with an office on the beach in Sutherland with 40 local staff.
1. Beatrobo | Japan
Tokyo-based startup Beatrobo is a global, social music service that uses customizable robot avatars as a conduit for sharing songs and discovering new artists. The startup has just received series A investment from Japanese convenience store chain Lawson.
South Korea, once referred to as the ‘Land of the Morning Calm,’ has emerged as one of the key startup hubs in Asia. Having witnessed firsthand the changes in this once conservative and shy nation, the pace of change is amaizing and the hunger with which local founders are embracing the challenge and opportunity presented by entrepreneurship. As predictable and arduous corporate careers begin to lose their appeal in a country still dominated by big names such as Samsung, Hyundai, and LG, there are strong signals that innovation will begin to shape the economic landscape in the near future.
Looking for cash for your startup? Fundable just announced that it has surpassed $100 million in commitments from backers and investors.
That means, communications chief Laura Moller said, that it’s now the biggest crowdfunding platform around.
Fundable works like a crowdfunded venture capitalist, taking in funding commitments from over 53,000 backers and disbursing them in small investments to hundreds of startups in a model very similar to Kickstarter or Indiegogo. If you see a company you like — perhaps Pixel Press, which enables anyone to build their own video games — you can choose to back that company.
Interestingly, Fundable doesn’t take a percentage of the investment, but simply charges a small monthly fee. Investors can choose equity or Kickstarter-like rewards.
Businesses like Fundable have only been possible since last year, when the JOBS Act made it legal not only to raise money but also to tell people about it in public — so-called “general solicitation” rule.
“Before, it was like having your house for sale but not being able to tell anyone about it but your friends and family,” Fundable CEO Eric Corl told me then. “This will open up a tremendous amount of capital for entrepreneurs.”
At least $103 million worth as of this moment, it appears. And counting.
Fundable is a crowdfunding site for startups. Fundable’s platform takes advantage of the new JOBS Act, also known as the “Crowdfunding Bill,” which now allows startup companies to publicly raise money from anyone willing to back them.
If you spent more college mornings nursing a hangover than attending Anthropology 101, good luck getting an Upstart loan.
Founded by Google veterans, the crowdfunding startup today expanded its offerings to include a more traditional, fixed-rate loan product (the site also lets investors back young folks for a portion of their future income).
But “more” is a key word here: These loans are far from traditional. Upstart considers all sorts of unconventional factors, including what school prospective borrowers attended, what they majored in, and how they performed, among other data points.
“Those variables are actually predictive of default rates on loans, and they’re also predictive of earning potential,” Upstart CEO Dave Girouard told website VentureBeat.
The company can measure input from more than 1,000 different U.S. universities, all of which have different majors and grading systems. Upstart verifies that data by requiring documents from the borrower and performing its own due diligence.
That educational data, alongside credit and income history, enables Upstart to predict the likelihood of successful loan payments. Upstart’s algorithm runs simulations measuring expected income against expected expenses. It also considers the likelihood of extended unemployment, which is the primary reason people default on loans.
“What’s really different is we don’t just look at your current income, we actually have built a model for your employability,” said Girouard.
That risk assessment model determines loan interest rates, which fall between 6.5 percent and 20 percent, and the origination fee, the 1 to 5 percent of the loan amount Upstart keeps for itself. The actual loan values range from $5,000 to $25,000.
Young doesn’t always mean risky
Upstart’s loans are crowdfunded and anonymized, which means investors contribute to Upstart-vetted borrowers without ever knowing who they are. Moreover, the three-year loans are targeted at young people, who other lenders typically view as “high risk.”
But Upstart thinks otherwise. The startup pointed to a recent study from the Federal Reserve Bank of Richmond, which determined young borrowers are the least likely to experience a serious credit card default.
Armed with that knowledge, Upstart set out to make its loans available to recent grads or soon-to-graduate students — a population that has historically struggled to borrow money at reasonable rates.
“We think it’s a really unmet need in the market… for whatever reason, most lenders avoid this part of the market because they don’t know how to underwrite it,” said Girouard. “I don’t come from financial services, nor does the rest of our team, so we figured there must be a better way to determine creditworthiness.”
Upstart’s crowdfunded loans bring the startup into competition with Lending Club and Prosper. But unlike those sites, Upstart allows borrowers to use their loans for educational expenses.
In fact, Girouard initially realized there was demand for a fixed-rate loan product when people signed up for an income share agreement (Upstart’s original product) in order to finance coding bootcamp tuition.
“We started to see a lot of people last fall joining up who were not entrepreneurs, but to go to one of these coding bootcamps,” he said. “When we dug into it, we found that they really didn’t have better options.”
By Wednesday afternoon, just hours after Upstart began offering fixed-rate loans, around 150 people had already applied for one, said Girouard. In contrast, only 330 people have tried to raise money through an Upstart income sharing agreement — and that product has been available for 15 months.
Founded in 2012, Upstart has raised around $7.6 million from several institutional investors, including Google Ventures, Kleiner Perkins, Khosla Ventures, Founder’s Fund, and First Round Capital. It’s based in Palo Alto, Calif., and currently has 15 employees.
SMEs are increasingly looking at crowdfunding as a way of raising finance without dealing with bureaucratic banks and fickle investors. However, new rules by the Financial Conduct Authority (FCA), which came into force recently, regulate certain types of crowdfunding.
Crowdfunding involves raising finance by taking small investments, loans or donations from a large number of people. Depending on who you believe, the new FCA rules have either "taken the crowd out of crowdfunding" or "represent the right balance between the freedom to invest and investor protection".
When a startup gets handed that first big check, how much of that can they dedicate to their own livelihoods?
From the media you would belive that founders of every tech startup thats been funded are all millionaires and billionaires. But thats not allways true.