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The Station: Via hits $2.25B valuation, letters from readers, layoffs in a time of COVID-19

Hi, and welcome back to The Station, a weekly newsletter dedicated to all the ways people and packages travel from Point A to Point B. I’m your host Kirsten Korosec, senior transportation reporter at TechCrunch. If this is your first time, hello; I’m glad you’re with us.

I have started to publish a version of the newsletter on TechCrunch. That’s what you’re reading now. For the whole newsletter, which comes out every weekend, you can subscribe by heading over here, and clicking “The Station.” It’s free!

Last week, I asked readers to share how they were doing amid the COVID-19 pandemic. The response was overwhelming. It wasn’t just the number of you who reached out. It was your words — devoid of pretense, the veneer exposed — that struck me.

There were, of course, those who used the opportunity to make a marketing push or pitch a story. I get the impulse, but you won’t be rewarded here. I’m seeking something different. And I will share below some of what you sent me in hopes that it provides insight, solace or, dare I suggest, an esprit de corps among us.

I will repeat my appeal from last week: Maybe you’re a startup founder, a safety driver at an autonomous vehicle developer, a venture capitalist, engineer or gig economy worker. I’m interested in how you’re doing, what you’re doing to cope and how you’re getting around in your respective cities.

Please reach out and email me at kirsten.korosec@techcrunch.com to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.

Micromobbin’

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As we’ve seen the past few weeks, operators are stepping up to respond and adjust to the COVID-19 pandemic.

Lyft began offering its scooters for free to healthcare and other essential workers. As part of the program, up to 30-minute rides will be free for members of critical workforces through April 30 in Austin, Denver, Los Angeles, the Washington D.C. metro area, San Diego and Santa Monica.

Spin, similarly, introduced a new initiative that provides free, 30-minute rides and helmets to essential healthcare workers. Spin, which began offering this on April 1, is making this available in Baltimore, Denver, Detroit, Los Angeles, Portland, San Francisco, Tampa and Washington, D.C.

‘Micromobility winter on steroids’

That’s how RideReport CEO William Henderson described the current state of the micromobility industry in a recent interview with TechCrunch reporter Megan Rose Dickey.

Ride Report creates software that enables cities to work with micromobility operators. That gives Henderson a bird’s-eye view on the industry, which he shared with TechCrunch.

Yep, this is an Extra Crunch article, and you need a subscription. A few of the highlights include biking as one of the few bright spots, how some companies have pivoted to providing rides to healthcare workers and insights on how the industry and cities might have reacted had the pandemic occurred two years in the future.

A novel rewards program

These times have sparked a host of new ideas. Here’s one. A Nashville-based startup called Hytch Rewards developed an app that companies and governments can use to give their employees incentives to walk, bike, rideshare or use public transit. The company’s entire purpose has been to reward commuter behavior that reduces traffic congestion and lowers emissions.

Now it’s pivoting to reward people for staying at home. The office of Tennessee Congressman Jim Cooper is among the first employer to partner on Hytch’s Shelter in Place initiative, which offers a small daily reward to staff for working from home.

— Megan Rose Dickey  (with a cameo from Kirsten Korosec)

Deal of the week

money

This week, we’ll highlight Via’s Series E funding round that was led by Exor. The on-demand shuttle startup raised $400 million, TechCrunch learned. Exor contributed $200 million of that raise. The remaining $200 million came from new investors Macquarie Capital, Mori Building and Shell, as well as existing investors 83North, Broadscale Group, Ervington Investments, Hearst Ventures, Planven Ventures, Pitango and RiverPark Ventures.

Noam Ohana, who heads up Exor Seeds, the holding company’s early-stage investment arm, will join Via’s board.

Via gets the “deal of the week” designation not just because its post-funding valuation is now $2.25 billion. Via’s actions during the pandemic offers a little bit of understanding on how companies are adapting and where opportunities may lie. Via has two sides of its business: a consumer-facing shuttle and a “partnerships” division that sells its software platform to cities and transit authorities that allows them to deploy their own shuttles.

As you might expect, the consumer-facing shuttles has been adversely affected by COVID-19. There is some promise with the partnerships side of the business, according to CEO Daniel Ramot .

Existing partners, a list that includes transit authorities in Berlin, Germany, Ohio and Malta, have worked with Via to convert or adapt the software to meet new needs during the pandemic. A city might dedicate its shuttle service to transporting goods or essential personnel. For instance, Berlin converted its 120-shuttle fleet transport to an overnight service that provides free transit to healthcare workers traveling to and from work.

“There has been a real interest in emergency services,” Ramot told me, adding he expects to see more demand for the software platform and the flexibility it provides as the pandemic unfolds.

Via isn’t the only company shifting its attention to emergency services. Moovit, an Israeli-based Mobility as a Service startup, launched an Emergency Mobilization On-Demand service. The feature was developed to turn unused vehicle fleets into an on-demand solution to get essential workers to their destination. Moovit is also offering transit agencies and operators a transit data manager for free for three months. This management tool lets transit agencies communicate schedules, line changes and service alerts to users.

Other deals:

  • Qcraft.ai raised what it described as an “eight-figure USD investment” in a seed funding round from IDG Capital, Vision+ Capital and Tide Capital. Qraft didn’t provide the exact number; VentureBeat reported it is $24 million.
  • Phantom.ai, which has focused on advanced driver assistance systems, raised $22 million in a Series A round led by Celeres Investments; Celeres was joined by Ford Motor and Korean telecommunications giant KT. Two existing investors, Millennium Technology Value Partners and DSC Investment, also participated in the round.
  • Seegrid, a company that makes self-driving industrial vehicles for material handling, closed a $25 million growth-equity investment from G2VP.
  • GM and Honda deepened their relationship and said they will jointly develop two new electric vehicles slated for 2024. Under the plan, the automakers will focus on their respective areas of expertise. Honda will design the exterior and interiors of the new electric vehicles; GM will contribute its new electric vehicle architecture and Ultium batteries, its OnStar safety and security services and its hands-free advanced driver assistance technology, known as Super Cruise.
  • Enovix, which has developed a silicon-based lithium-ion battery, has raised $45 million in new funds. The company said T. J. Rodgers and York Capital participated, as well as an unnamed “major new strategic investor.”

Layoffs in a time of COVID-19

We’ve all seen the bars, restaurants, retail shops and salons in our community shuttered because of stay-at-home directives from local and state governments. We’ve started to see the results of those closures in the form of tens of thousands of jobless claims.

Startups are not immune. It is difficult to get an exact number, but Layoffs.fyi is working to track what is going on in the startup world. As of April 4, the site had calculated 126 startups had laid off more than 10,000 people since March 11.

The transportation sector has been among those hardest hit. Some of the companies that have laid off 20% or more of their staff include shared scooter company Bird; peer-to-peer car rental startups Getaround and Turo; Cabin; freight brokerage KeepTruckin: and Moovel and Zipcar.

Maybe your company is actually hiring. If so, go check out Layoffs.fyi, the site doesn’t just list layoffs. The site also includes spreadsheet that list employees you might want to hire.

From you

I have selected a few excerpts from readers who shared with me — and now you all — their observations about what is happening in their lives in this COVID-19 world. I have edited these for length and clarity.

I plan to share more with you in the weeks ahead, so please reach out.

From Canoo CPO James Cox, who also advises founders of Routable.ai, a startup that developed a real-time routing engine for high-capacity rides. Cox explained in his email to me that Routable’s CEO wrote a piece in Medium (which you can read here) about providing critical transportation during the COVID-19 pandemic:

As a result of the piece, the Boston Medical Center reached out last week. They’ve now adapted their technology to provide rides to homeless people and solve an allocation problem of which bed in which hospital in Boston to send them to.

They’ve worked directly with the frontline doctors and nurses and IT teams on it. They were previously using a whiteboard, which is obviously not going to scale to solve the problem! The trial launches Monday and is a really interesting short-term pivot that is solely focussed on doing good and adjusting to this crazy world we are now living in.

From Aryan Bhasin, a college student under lockdown in India:

There is no sense of transportation at all. Public transport is becoming interesting because even though all forms of transport are banned (one can only use a vehicle to buy essentials at grocery stores), the Indian government has been sending hoards of buses to get villagers back to their villages — completely blowing apart all rules of social distancing.

Airlines, too, have been a very interesting sector to follow. Most airlines have changed their business models significantly in lieu of COVID-19 as governments organize airlifts for stranded citizens.

From Luis Orsini-Rosenberg, CEO of GetHenry, a Berlin-based micromobility startup that focuses on B2B services. GetHenry, which is part of the Techstars Smart Mobility Accelerator, operates in Austria, Germany and Spain. He shared what is happening in Austria:

All of our business partners in Austria had to close its gates. A day after the lockdown was communicated by the government, we started to reach out to hundreds of restaurants, deliveries, couriers, hospitals, pharmacies and medical services to offer them our vehicles for individual transportation or last-mile delivery cases. Last week, the first e-scooters went out to restaurant partners and medical services.

We are starting to generate some revenues again, but it will not be enough to keep the business alive long-term. We have applied for public aid funds and wage subsidies and will cut costs to an absolute minimum in the coming weeks. Going forward, we will either: wait and do nothing or solely focus on the last-mile delivery service.

Read more: https://techcrunch.com/2020/04/06/the-station-via-hits-2-25b-valuation-letters-from-readers-layoffs-in-a-time-of-covid-19/

Credit Cards

Indias mobile payments firm MobiKwik reaches rare key profit milestone

Indian mobile payments firm MobiKwik has reached a milestone very few of its local rivals can even contemplate: not burning money. The 10-year-old Gurgaon-headquartered firm said Tuesday it is now generating a profit excluding interest, taxes, depreciation and amortization.

“We have been in an ecosystem where we have seen a lot of high-growth and several regulatory changes in the payments domain. But what we realized was that payments alone is likely not going to be a very profitable business,” Bipin Singh, co-founder and CEO of MobiKwik, told TechCrunch in an interview.

To get to the path of profitability, MobiKwik has made a number of significant changes to its business in recent years. It stopped participating in the race to aggressively acquire users and fighting with heavily backed firms such as Paytm, which has raised more than $2 billion to date.

Paytm remains unprofitable and an analysis of its financial performance shows that this is not going to change anytime soon. Google, which also offers a payments service in India, has no shortage of cash, either. MobiKwik has raised about $118 million to date from Sequoia Capital, American Express and Cisco Investments, among others.

Upasana Taku, co-founder and COO of MobiKwik, said the company has taken inspiration from Kotak and ICICI banks, both of which have about 15 million to 20 million customers — a fraction of many digital payment apps — but are profitable. MobiKwik, which employs 400 people, has 110 million users, she said.

In the last two and a half years, MobiKwik has cut down on cashbacks it bandies out to users — a practice followed by every company offering a payments solution in India — and focused on building financial services on top of its wallet app to retain customers and find additional sources of revenue.

The company continues to focus on its mobile wallet and payments processing businesses that account for about 75% of its revenue, but its growing suite of financial services, such as providing credits and insurance to customers, is already bringing the rest of the revenue, she said.

That’s not surprising, as India remains alarmingly under served. Fewer than 50 million credit cards are in circulation in the nation currently, and for people with limited income, getting a loan of any size remains a major challenge.

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“Even the population that has access to smartphones and cheap internet data can’t get a credit card in India. We found it a good match for the growth of our payments app. We started serving these users who have the discipline to repay money and have certain kind of income,” the couple said, who are now also donning the role of angel investors.

MobiKwik works with banks and other lenders to finance loans between Rs 5,000 ($69) to Rs 100,000 ($1,380). In the 18 months since it started offering this, MobiKwik has provided 800,000 loans and disbursed $100 million.

In late 2018, the company launched “sachet-sized” insurance plans to provide protection from cyber fraud, fire, accident and hospitalization. These sachets start at as little as Rs 20 (28 cents) and thousands of users buy these everyday. Similarly, it also allows users to buy mutual funds for as little as $1.30.

MobiKwik expects its revenue to hit $69 million in the financial year that ends in March next year, up from $28 million a year earlier. The company, which expects to turn fully profitable by fiscal year 2021, plans to go public in four to five years, Taku said.

MobiKwik competes with a number of players, many of which are increasingly adding financial services, such as loans, to their platforms. Since these digital platforms are able to process loans without the need of salespeople and support staff, it becomes feasible for banks to chase customers with weak financial power.

India’s overall retail credit demand is expected to grow 60% to $771 billion over the next four years, according to the Digital Lenders Association of India.

Read more: https://techcrunch.com/2019/09/03/mobikwik-ebidta-positive/

Credit Cards

Indias 9-month-old CRED raises $120M to help people improve their financial behavior

Many Silicon Valley companies and fintech startups in India today share a common mission: They all want to bring their financial services to the next billion users. Dozens of fintech startups that we have spoken to in recent months have told us that they all want to address much of India, one of the last great growth markets globally, in the next few years.

So you can imagine our excitement when we learned there is at least one startup that is going after just a few million users in the immediate future. We’re talking about CRED, a nine-month-old, Bangalore-based startup that is building solutions to incentivize credit card users in India to become more responsible with money and thereby improve their credit score.

CRED has raised $120 million in a Series B financing round, Kunal Shah, founder and CEO of the startup, told TechCrunch on Monday. He declined to share more information. The startup, which has raised about $145 million to date, is now valued between $430 million to $450 million, a person familiar with the matter told TechCrunch.

According to a regulatory filing, existing investors Sequoia Capital, Ribbit Capital and DST Global’s Gemini Investments led the round, with participation from Tiger Global, Hillhouse Capital, General Catalyst, Greenoaks Capital and Dragoneer.

Hundreds of millions of Indians today don’t have a credit score because they have never taken a loan from a recognized entity nor owned a credit card. According to the government’s official figures, fewer than 50 million credit cards are in circulation in India currently, with industry reports suggesting that the actual number of unique credit card holders is about half of that.

“Nobody taught us about how to use money,” Shah told TechCrunch in a recent interview. “This has created a huge trust gap in India. If you look at developed markets, systematic trust is very high between all the entities. Members don’t have to rely on third-parties. In India, even if you wanted to rent a flat, you look for brokers, for instance.”

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You can build that trust when you know how someone handles their money, and how they have handled it in recent history. “Our aim is to create a big membership community with high credit worthiness, therefore open up more opportunities for them,” Shah explained.

Shah is not going after the masses. He wants to focus on just the credit card users for now, and if he could win the trust of just half of those plastic card holders in India, he would consider it a success.

“Instead of chasing the mythological mass customers who are currently useful only on paper if you wanted to boast about your daily active user or monthly active user metric, our goal is to serve the existing users,” he said.

On CRED, users are offered a range of features, including the ability to better track their spending, get reminders and check their credit score, but more importantly, access to a range of lofty offers such as membership to a gym at a discounted price, access to good restaurants at low prices and subscription to various services at little to no charge. Users can access these features by earning points, which they can secure every time they pay their credit card bills on time.

Varun Krishnan, editor of technology news site FoneArena, told TechCrunch that he has found CRED useful in getting reminders to pay his bills and likes that he can pay them through a range of payment options, including UPI apps and debit cards. “I have several cards and it is hard to track amounts and due dates of payment for each one. They send all these alerts on WhatsApp, which is a blessing,” he said.

These are the reasons that attracted many people like Krishnan to join CRED. That, and some incentive to pay his bills — though he hopes that CRED expands the range of offers it currently provides to customers.

That wish may soon come true. In the coming months, CRED will enable these highly sought-after customers to access some financial services from banks in a single-click. Additionally, it is also exploring expansion to some international markets, the aforementioned source said.

CRED does not charge users any money for joining its platform, nor for availing any of the features it offers. But it is generating revenue from some of the partners that are supplying offers on the app.

It’s not a surprise that Shah, an industry veteran known for speaking the uncomfortable truths at conferences, has won the trust of so many investors already. He built one of the biggest payment apps in India, Freecharge, and sold it to e-commerce giant Snapdeal for a whopping $400 million in one of the increasingly rare exits that India’s fintech market has seen to date.

Read more: https://techcrunch.com/2019/08/26/india-cred-kunal-shah/

telecommunications

Africas top mobile phone seller Transsion to list in Chinese IPO

Chinese mobile-phone and device maker Transsion will list in an IPO on Shanghai’s STAR Market, Transsion confirmed to TechCrunch.

The company — which has a robust Africa sales network — could raise up to 3 billion yuan (or $426 million).

“The company’s listing-related work is running smoothly. The registration application and issuance process is still underway, with the specific timetable yet to be confirmed by the CSRC and Shanghai Stock Exchange,” a spokesperson for Transsion’s Office of the Secretary to the Chairman told TechCrunch via email.

Transsion’s IPO prospectus is downloadable (in Chinese) and its STAR Market listing application available on the Shanghai Stock Exchange’s website.

STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that also went live in July with some 25 companies going public. 

Headquartered in Shenzhen — where African e-commerce unicorn Jumia also has a logistics supply-chain facility — Transsion is a top-seller of smartphones in Africa under its Tecno brand.

The company has a manufacturing facility in Ethiopia and recently expanded its presence in India.

Transsion plans to spend the bulk of its STAR Market raise (1.6 billion yuan or $227 million) on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development, including a mobile phone R&D center in Shanghai, a company spokesperson said. 

Transsion recently announced a larger commitment to capturing market share in India, including building an industrial park in the country for manufacture of phones to Africa.

The IPO comes after Transsion announced its intent to go public and filed its first docs with the Shanghai Stock Exchange in April. 

Listing on the STAR Market will put Transsion on the freshly minted exchange seen as an extension of Beijing’s ambition to become a hub for high-potential tech startups to raise public capital. Chinese regulators lowered profitability requirements for the exchange, which means pre-profit ventures can list.

Transsion’s IPO process comes when the company is actually in the black. The firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan a year earlier. Net profit for the year slid to 654 million yuan, down from 677 million yuan in 2017, according to the firm’s prospectus.

Transsion sold 124 million phones globally in 2018, per company data. In Africa, Transsion holds 54% of the feature phone market — through its brands Tecno, Infinix and Itel — and in smartphone sales is second to Samsung and before Huawei, according to International Data Corporation stats.

Transsion has R&D centers in Nigeria and Kenya and its sales network in Africa includes retail shops in Nigeria, Kenya, Tanzania, Ethiopia and Egypt. The company also attracted attention for being one of the first known device makers to optimize its camera phones for African complexions.

On a recent research trip to Addis Ababa, TechCrunch learned the top entry-level Tecno smartphone was the W3, which lists for 3,600 Ethiopian Birr, or roughly $125.

In Africa, Transsion’s ability to build market share and find a sweet spot with consumers on price and features gives it prominence in the continent’s booming tech scene.

Diving deep into Africa’s blossoming tech scene

Africa already has strong mobile-phone penetration, but continues to undergo a conversion from basic USSD phones, to feature phones, to smartphones.

Smartphone adoption on the continent is low, at 34%, but expected to grow to 67% by 2025, according to GSMA.

This, added to an improving internet profile, is key to Africa’s tech scene. In top markets for VC and startup origination — such as Nigeria, Kenya, and South Africa — thousands of ventures are building business models around mobile-based products and digital applications.

If Transsion’s IPO enables higher smartphone conversion on the continent, that could enable more startups and startup opportunities — from fintech to VOD apps.

Another interesting facet to Transsion’s IPO is its potential to create greater influence from China in African tech, in particular if the Shenzhen company moves strongly toward venture investing.

China’s engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities — further boosted in recent years as Beijing pushes its Belt and Road plan.

Transsion’s IPO move is the second recent event — after Chinese owned Opera’s big venture spending in Nigeria — to reflect greater Chinese influence and investment in the continent’s digital scene.

So in coming years, China could be less known for building roads and bridges in Africa and more for selling smartphones and providing VC for African startups.

Opera founded startup OPay raises $50M for mobile finance in Nigeria

Read more: https://techcrunch.com/2019/08/07/africas-top-mobile-phone-seller-transsion-to-list-in-chinese-ipo/

Credit Cards

Indias 30-year-old MyMoneyMantra raises $15M to scale its financial services marketplace

MyMoneyMantra, a 30-year-old New Delhi-based firm that operates a marketplace of financial services, has raised $15 million in its maiden funding round from an external source to expand its offerings and reach in the nation.

Dutch investment firm IFSD BV and private equity firm Vaalon Capital funded the $15 million round in MyMoneyMantra, the Indian firm said on Wednesday. A person familiar with the matter said the round valued MyMoneyMantra at about $50 million.

The company’s founder, Raj Khosla, said MyMoneyMantra, which employs about 2,500 employees and serves over 4 million customers across 50 cities, will use the capital to explore ways to capture a larger share of the market.

Khosla said the firm would work closely with Vaalon Capital’s team to expand its offerings and deepen its ties with banks and insurance companies. In the financial year that ended in March, MyMoneyMantra generated a revenue of $19.6 million.

MyMoneyMantra works with over 90 banks, non-bank lenders and insurance companies to help customers get deals on loans and credit cards. The firm, which competes with BankBazaar and Andromeda in India, has done business of over $5.5 billion to date.

Today’s announcement underscores investors’ growing interest in India’s fintech market that saw tens of millions of users try digital payment services for the first time after the Indian government banned some paper bills. Cash still dominates most of the transactions in the country.

India’s fintech startups raised $285.6 million in the quarter that ended in March this year, thereby surpassing China to become Asia’s top fundraising hub for financial technology, according to CBInsights.

And that momentum continues. In recent months, a score of startups that are trying to help India’s next hundreds of millions of users access financial services have secured significant capital from major investors. While some startups such as Open and Niyo are operating “neo banks” to help blue-collar workers access financial services, many big names like Paytm and Ola have launched their own credit cards.

Read more: https://techcrunch.com/2019/07/17/indias-30-year-old-mymoneymantra-raises-15m-to-scale-its-financial-services-marketplace/

Credit Cards

Indias largest mobile wallet company Paytm now offers a credit card

Paytm, India’s largest mobile wallet app, has branched out to several businesses in recent years as threat from Google and Facebook grows. On Tuesday, it added another category to the list: credit cards.

The firm, operated by One97 Communications, today unveiled Paytm First Credit Card with lofty benefits as it races to bulk up its financial offerings. The cards, issued by Citi Bank, will be the first in the country to offer unlimited, one percent cashback on purchases, Paytm claimed in a statement. The company is hoping to rope in about 25 million credit card customers in the coming months.

The penetration of credit cards remains very low in India with under 50 million people possessing one. With people conducting most of their businesses through cash in the nation, banks have little understanding of a customer’s credit history and score. And it also doesn’t help that banks in India are still wary of issuing credit cards to those who don’t perfectly fit the traditional blue collar job.

But why is a company that made its name through a mobile payment wallet open to its customers engaging with credit card companies? Paytm itself is struggling to grow its business and retain existing customers. Some of its recent major bets haven’t exactly paid off. Its ecommerce business Paytm Mall remains tiny despite bleeding money.

But more importantly, payments itself has become a commoditized space. Users park their money in Paytm and do transactions from there. Paytm makes money from this accumulated sum. This business flourished for years, especially in the months after the Indian government invalidated much of the cash in the nation. But then the government launched its own payment infrastructure called UPI, which removes the need for a middleman.

This has made payments more convenient for users, who are increasingly jumping ship. UPI apps such as PhonePe that have emerged in the last two and a half years now see more transactions than wallet apps. To make matter worse for Paytm, Google and Facebook — two companies that have larger userbase in India — have entered the payments space. Google Pay reached 100 million installs on Google Play Store recently, and WhatsApp plans a nation-wide roll out of its payment feature in India later this year.

So Paytm is now expanding its financial offerings and credit card play fits well in it. With more than 200 million active users, Paytm rivals banks on both the number of customers and volume of transaction it processes.

“Our new offering is designed to bring utmost flexibility to our customers in their digital payment options and will help spur large-ticket cashless payments,” Vijay Shekhar Sharma, chairman and CEO of One97 Communications said in a statement.

Backed by SoftBank, Alibaba, and most recently Warren Buffett’s Berkshire Hathaway, Paytm has the capital to spur the adoption of its new credit card. As part of the package, Paytm’s credit card holders will be able to avail dining, shopping, travel and other offers that Citi Bank provides to its privilege customers. In the first four months of issuing a card, the company will offer its customers discounts worth Rs 10,000 ($142) on spending of Rs 10,000.

Paytm First Credit Card will work both in India and elsewhere and support contactless transactions. Like any other credit card, customers will be able to pay back a sum in multiple monthly instalments. Paytm First Credit Card will charge users a nominal fee of Rs 500 ($7.1) that will be waived off if their spendings through the card exceeds Rs 50,000 ($710) in a year.

If the gamble works, Paytm will be able to retain some customers and convince many to do big-ticket transactions. For Citi Bank, this partnership is just an easy ploy to acquire some customers.

In the meantime, Paytm continues to aggressively expand its financial offerings. In recent years, it has launched a digital payments bank, and has started to offer prepaid Forex cards for international purchases. It also lets customers buy gold, and employers issue food allowance wallets for their staff. Last year, the company announced Paytm Money to facilitate purchase of mutual funds.

Earlier this year, the company launched Paytm First, a subscription bundle that includes access to subscriptions from other services such as Zomato, Uber, Gaana, and Eros Now. In an interview with TechCrunch late last month, Paytm’s Sharma said payments is the moat around which you can build a number of services. “Now that’s a business model… payment itself can’t make you money.”

Read more: https://techcrunch.com/2019/05/14/indias-mobile-wallet-company-paytm-now-offers-a-credit-card/

Credit Cards

Indias ride-hailing firm Ola is now in the credit card business, too

A day after India’s largest wallet app Paytm entered the credit card business, local ride-hailing giant Ola is following suit. Ola has inked a deal with state-run SBI and Visa to issue as many as 10 million credit cards in the next three and a half years, it said today.

The move will help Visa and SBI (State Bank of India) acquire more customers in India, where most transactions are still bandied out over cash. For Ola, which rivals Uber in India, the foray into credit cards represents a new avenue to monetize its customers, as TechCrunch previously reported.

With about 150 million users availing more than 2 million rides on its platform each day, Ola is sitting on a mountain of data about its users’ financial power and spends. With the card, dubbed Ola Money-SBI Credit Card, the mobility firm is also offering several discounts and savings to retain its loyal customer base.

Ola, which is nearing $6 billion in valuation and counts SoftBank and Naspers among its investors, said it will offer its credit card holders “highest cashback and rewards” in the form of Ola Money that could be redeemed for Ola rides, as well as flight and hotel bookings. There will be 7% percent cashback on cab spends, 5% on flight bookings, 20% on domestic hotel bookings (6% on international hotel bookings), 20% on more than 6,000 restaurants and 1% on all other spends.

In an interview with TechCrunch, Nitin Gupta, CEO of Ola financial services, claimed that the company was offering “five times rewards to customers” in comparison to average credit card companies. “Also, the card is a first of its kind offering that can be managed digitally through the Ola App. We are committed to creating an inclusive ecosystem where mobility and financial services go hand in hand in leading growth and development,” he said. Ola said it has already rolled out the card to some users and will invite other eligible customers to avail it.

“Mobility spends form a significant wallet share for users and we see a huge opportunity to transform their payments experience with this solution. With over 150 million digital-first consumers on our platform, Ola will be a catalyst in driving India’s digital economy with cutting edge payment solutions,” Bhavish Aggarwal, co-founder and CEO of Ola, said in a statement.

Why credit cards?

Ola appears to be following the playbook of Grab and Go-Jek, two ride-hailing services in Southeast Asian markets that have ventured into a number of businesses in recent years. Both Grab and Go-Jek offer loans, remittance and insurance to their riders, while the former also maintains its own virtual credit card. Interestingly, Uber, which also offers a credit card in some markets, has no such play in India.

The move will allow Ola to look beyond ride-hailing and food delivery, two businesses that appear to have hit a saturation point in India, said Satish Meena, an analyst with research firm Forrester.

In recent years, Ola has started to explore financial services. It offers riders “micro-insurance” that covers a range of risks, including loss of baggage and medical expenses. The company said earlier this year, it has sold more than 20 million insurances to customers. Using Ola Money to facilitate cashbacks also underscores Ola’s push to increase the adoption of its mobile wallet, which, according to estimates, lags Paytm and several other wallet and UPI payment apps.

The company has also made a major push in the electric vehicles business, which it spun off as a separate company earlier this year. In March, its EV business raised $300 million from Hyundai and Kia. The company has said that it plans to offer one million EVs by 2022. Its other EV programs include a pledge to add 10,000 rickshaws for use in cities.

Read more: https://techcrunch.com/2019/05/15/indias-ride-hailing-firm-ola-is-now-in-the-credit-card-business-too/

Credit Cards

Partnering with Visa, emerging market lender Branch International raises $170 million

The San Francisco-based startup Branch International, which makes small personal loans in emerging markets, has raised $170 million and announced a partnership with Visa to offer virtual, pre-paid debit cards to Branch client networks in Africa, South-Asia and Latin America. 

Branch — which has 150 employees in San Francisco, Lagos, Nairobi, Mexico City and Mumbai — makes loans starting at $2 to individuals in emerging and frontier markets. The company also uses an algorithmic model to determine credit worthiness, build credit profiles and offer liquidity via mobile phones.

“We’ll use [the money] to deepen existing business in Africa. Later this year we’ll announce high-yield savings accounts…in Africa,” says Branch co-founder and chief executive Matt Flannery.

The $170 million round from Foundation Capital and its new debit card partner, Visa, will support Branch’s international expansion, which could include Brazil and Indonesia, according to Flannery. Branch launched in Mexico and India within the last year. In Africa, it offers its services in Kenya, Nigeria and Tanzania.

A potential Branch customer

The Branch-Visa partnership will allow individuals to obtain virtual Visa accounts with which to create accounts on Branch’s app. This gives Branch larger reach in countries such as Nigeria — Africa’s most populous country with 190 million people — where cards have factored more prominently than mobile money in connecting unbanked and underbanked populations to finance.

Founded in 2015, Branch started operating in Kenya, where mobile money payment products such as Safaricom’s M-Pesa (which does not require a card or bank account to use) have scaled significantly. M-Pesa now has 25 million users, according to sector stats released by the Communications Authority of Kenya. Branch has more than 3 million customers and has processed 13 million loans and disbursed more than $350 million, according to company stats.

Branch has one of the most downloaded fintech apps in Africa, per Google Play app numbers combined for Nigeria and Kenya, according to Flannery.

Already profitable, Branch International expects to reach $100 million in revenues this year, with roughly 70 percent of that generated in Africa, according to Flannery.

In addition to Visa and Foundation Capital, the $170 Series C round included participation from Branch’s existing investors Andreessen Horowitz, Trinity Ventures, Formation 8, the IFC, CreditEase and Victory Park, while adding new investors Greenspring, Foxhaven and B Capital.

Branch last raised $70 million in 2018. The company’s overall VC haul and $100 million revenue peg register as pretty big numbers for a startup focused primarily on Africa. Pan-African e-commerce startup Jumia, which also announced its NYSE IPO last month, generated $140 million in revenue (without profitability) in 2018.

Startups building financial technologies for Africa’s 1.2 billion population have gained the attention of investors. As a sector, fintech (or financial inclusion) attracted 50 percent of the estimated $1.1 billion funding to African startups in 2018, according to Partech.

Branch’s recent round and plans to add countries internationally also tracks a trend of fintech-related products growing in Africa, then expanding outward. This includes M-Pesa, which generated big numbers in Kenya before operating in 10 countries around the world. Nigerian payments startup Paga announced its pending expansion in Asia and Mexico late last year. And payment services such as Kenya’s SimbaPay have also connected to global networks like China’s WeChat.

Read more: https://techcrunch.com/2019/04/08/partnering-with-visa-emerging-market-lender-branch-international-raises-170-million/

mobile wallet

Google moves big into mobile payments in Asia with launch of new app

Image: google tez/screenshot

Google is going big into Asia’s mobile payment scene.

The tech giant has launched a new mobile money app called Tez in India — a country with a smartphone user base of over 300 million, which has been named the world’s fastest growing smartphone market.

SEE ALSO: Asia’s newest mobile wallet may actually get the region to go cashless, finally

“Tez” which means fast in Hindi, lets users link up their bank accounts to their phones, allowing them to use the app to pay merchants in stores, and instantly transfer money to friends.

Google’s app isn’t just another of the many mobile payment apps out there. To make Tez count, Google made sure it worked with India’s national Unified Payments Interface (UPI), a payment system backed by the government and 19 major banks in the country.

Image: google tez/screenshot

That’s huge. With the support of huge banks, that ensures Tez will work for the vast majority of users in India, allowing them to transfer money to each other regardless of bank provider they’re with.

And unlike mobile wallet systems, users can skip the additional step of managing a separate wallet fund, and transfer money to and from their accounts directly.

To sign up for Tez, you simply key in your phone number, choose your bank, and the bank will verify your number with an SMS.

To send money to another user, you then enter in their UPI ID, or select their phone number from your contacts list, if they’re also using Tez.

Ping cash to a nearby friend

But if you don’t want to share private details like your bank account or phone number, Tez has got another trick up its sleeve.

Its “cash mode” option offers proximity-based transfer, and searches for another smartphone nearby with the Tez app. You can then send or receive money from whoever’s beside you.

However, there’s a limit of $1,560 (₹1,00,000) on money transfers in one day.

Half of India has bank accounts, but only 2 percent has credit cards

It’s a strategic move by Google to let Tez users link up their phones to their bank accounts, unlike apps like Apple Pay, which links to a user’s credit or debit card.

India has a low credit card penetration of 29.8 million cards — which equals to around just 2 percent of the population.

On the other hand, an estimated 53 percent of the country’s population has bank accounts.

But Google might have some competition soon.

Messaging app WhatsApp is in talks to launch its own payment app in India, which will also be run on a UPI framework.

Tez is available on both Android and iOS.

WATCH: Finally, a clock that can track all your family and friend’s locations

Read more: http://mashable.com/2017/09/18/tez-mobile-payments-google-india/