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How Silicon Valley Is Rewiring Downing Street’s Brain

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Last month, Boris Johnson, the U.K.’s prime minister, delivered a speech in the industrial town of Dudley about his plan to lead the country out of the pandemic with large-scale investment projects. The most noteworthy feature of the speech was his mantra-like repetition of “build,” a word that appeared no fewer than 32 times in his speech and, for good measure, three times on a sign on his lectern.   

The prominence of the word was no coincidence. Johnson’s chief aide, Dominic Cummings, had picked it up from a couple of influential essays written by his favorite Silicon Valley thinkers, according to a person close to Johnson.  

One of them was an April essay entitled “It’s Time to Build” by venture capitalist Marc Andreessen—a critique of the West’s lack of preparedness for the coronavirus—in which he repeated some version of the word 41 times. A few days later, Ben Thompson, the influential analyst behind the Stratechery blog, took Andreessen’s ideas a step further in his own essay,“How Tech Can Build,” laying out a plan for putting the venture capitalist’s ideas into practice.

Source: https://www.theinformation.com/articles/how-silicon-valley-is-rewiring-downing-streets-brain

Start Ups

Enterprise investor Jason Green on SPAC hopefuls versus startups bound for traditional IPOs

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Jason Green has a pretty solid reputation as venture capitalists go. The enterprise-focused firm he co-founded 17 years ago, Emergence Capital, has backed Saleforce, Box and Zoom, among many other companies, and even while every firm is now investing in software-as-a-service startups, his remains a go-to for many top founders selling business products and services.

To learn more about the trends impacting Green’s slice of the investing universe, we talked with him late last week about everything from SPACs to valuations to how the firm differentiates itself from the many rivals with which it’s now competing. Below are some outtakes edited lightly for length.

TC: What do you make of the assessment that SPACs are for companies that aren’t generating enough revenue to go public the traditional route?

JG: Well, yeah, it’ll be really interesting. This has been quite a year for SPACs, right? I can’t remember the number, but it’s been something like $50 billion of capital raised this year in SPACs, and all of those have to put that money to work within the next 12 to 18 months or they give it back. So there’s this incredible pent-up demand to find opportunities for those SPACs to convert into companies. And the companies that are at the top of the charts, the ones that are the high-growth and profitable companies, will probably do a traditional IPO, I would imagine.

[SPAC candidates are] going to be companies that are growing fast enough to be attractive as a potential public company but not top of the charts. I think [sponsors are] going to target companies that are probably either growing slightly slower than the top-quartile public companies but slightly profitable, or companies that are growing faster but still burning a lot of cash and might actually scare all the traditional IPO investors.

TC: Are you having conversations with CEOs about whether or not they should pursue this avenue?

JG: We just started having those conversations now. There are several companies in the portfolio that will probably be public companies in the next year or two, so it’s definitely an alternative to consider. I would say there’s nothing impending I see in the portfolio. With most entrepreneurs, there’s a little bit of this dream of going public the traditional way, where SPACs tend to be a little bit less exciting from that perspective. So for a company that maybe is thinking about another private round before going public, it’s like a private-plus round. I would say it’s a tweener, so the companies that are considering it are probably ones that are not quite ready to go public yet.

TC: A lot of the SPAC fundraising has seemed like a reaction to uncertainty around when the public window might close. With the election behind us, do you think there’s less uncertainty?

JG: I don’t think risk and uncertainty has decreased since the election. There’s still uncertainty right now politically. The pandemic has reemerged in a significant way, even though we have some really good announcements recently regarding vaccines or potential vaccines. So there’s just a lot of potential directions things could head in.

It’s an environment generally where the public markets tend to gravitate more toward higher-quality opportunities, so fewer companies but higher quality,  and that’s where SPACs could play a role. In the first half of next year, I could easily see SPACs being the more likely go-to-market for a public company, then the latter half of next year, once the vaccines have kicked in and people feel like we’re returning to somewhat normal, I could see the traditional IPO coming back.

TC: When we sat down in person about a year ago, you said Emergence looks at maybe 1,000 deals a year, does deep due diligence on 25 and funds just a handful or so of these startups every year. How has that changed in 2020?

JG: I would say that over the last five years, we’ve made almost a total transition. Now we’re very much a data-driven, thesis-driven outbound firm, where we’re reaching out to entrepreneurs soon after they’ve started their companies or gotten seed financing. The last three investments that we made were all relationships that [date back] a year to 18 months before we started engaging in the actual financing process with them. I think that’s what’s required to build a relationship and the conviction, because financings are happening so fast.

I think we’re going to actually do more investments this year than we maybe have ever done in the history of the firm, which is amazing to me [considering] COVID. I think we’ve really honed our ability to build this pipeline and have conviction, and then in this market environment, Zoom is actually helping expand the landscape that we’re willing to invest in. We’re probably seeing 50% to 100% more companies and trying to whittle them down over time and really focus on the 20 to 25 that we want to dig deep on as a team.

TC: For founders trying to understand your thinking, what’s interesting to you right now?

JG: We tend to focus on three major themes at any one time as a firm, and one we’ve termed ‘coaching networks.’ This is this intersection between AI and machine learning and human interaction. Companies like [the sales engagement platform] SalesLoft or [the knowledge management system] Guru or Drishti [which sells video analytics for manual factory assembly lines] fall into this category.

The second [theme] is going deep into more specific industry verticals. Veeva was the best example of this early on with with healthcare and life sciences, but we now have one called p44 in the transportation space that’s doing incredibly well. Doximity is in the healthcare space and going deep like a LinkedIn for physicians, with some remote health capabilities. And then [lending company] Blend, which is in the financial services area. These companies are taking cloud software and just going deep into the most important problems of their industries.

The third theme [centers around] remote work. Zoom, which has obviously has been [among our] best investments is almost a platform, just like Salesforce became a platform after many years. We just funded a company called ClassEDU, which is a Zoom-specific offering for the education market. Snowflake is becoming a platform. So another opportunity is is not just trying to come up with another collaboration tool, but really going deep into a specific use case or vertical.

TC: What’s a company you’ve missed in recent years and were any lessons learned?

JG: We have our hall of shame. [Laughs.] I do think it’s dangerous to assume that things would have turned out the same if if we had been investors in the company. I believe the kinds of investors you put around the table make a difference in terms of the outcome of your company, so I try to not beat myself up too much on the missed opportunities because maybe they found a better fit or a better investor for them to be successful.

But Rob Bernshteyn of Coupa is one where I knew Rob from SuccessFactors [where he was a product marketing VP], and I just always respected and liked him. And we were always chasing it on valuation. And I think I think we probably turned it down at an $80 million or $100 million valuation [and it’s valued at] $20 billion today. That can keep you up at night.

Sometimes, in the moment, there are some risks and concerns about the business and there are other people who are willing to be more aggressive and so you lose out on some of those opportunities. The beautiful thing about our business is that it’s not a zero-sum game.

Source: https://techcrunch.com/2020/11/25/enterprise-investor-jason-green-on-spac-hopefuls-versus-startups-bound-for-traditional-ipos/

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AI

Why the mortgage broking industry needs to embrace rather than fear AI

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For a sector that relies so heavily on the kind of repetitive work artificial intelligence was built for, the mortgage broking industry has been a shockingly slow adopter of AI, says Effi CEO, Mandeep Sodhi.

Perhaps this is because many in the industry still see it has a threat rather than an aid.

Deloitte’s 2020 Australian Mortgage report found almost half of respondents considered robo-advice and AI to be a major challenge to brokers.

This distrust of AI is robbing the mortgage broking industry of a valuable tool. It’s an attitude that needs to change fast if the valuable service brokers provide is to remain relevant.

In fact, mortgage broking is perfect positioned for benefit hugely from AI. No matter how smart artificial intelligence becomes it will never be able to replace the kind of valuable human to human interaction and understanding a mortgage broker can provide but, what it can do is take on the repetitive grunt work that saps time and energy from those interactions. This means more time can be taken getting to know a client really well enabling a broker to understand their need intricately so they can provide the best possible service for that client.

AI can also streamline and automate processes that take up client’s time like filling in numerous and repetitive forms and waiting on phone calls to scheduled meetings. This means that clients have more time to convey their needs to their broker and to get to know them.

The end result is a closer, more valuable relationship between brokers and clients. Developing this kind of relationship that means clients are comfortable picking up the phone to ask their broker questions or seek further advice and the broker has the time to answer them thoughtfully and thoroughly.

Source: https://australianfintech.com.au/why-the-mortgage-broking-industry-needs-to-embrace-rather-than-fear-ai/

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Blockchain

Chainalysis Set to Become Blockchain’s Next Unicorn

Blockchain analysis and data provider Chainalysis should attain unicorn status this upcoming week as raising another $100 million in venture capital would give it a $1 billion valuation. In an interview with Forbes on Nov 20, Chainalysis CEO and co-founder Michael Gronager confirmed the upcoming event. Gronager expects to announce the Series C funding round … Continued

The post Chainalysis Set to Become Blockchain’s Next Unicorn appeared first on BeInCrypto.

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Blockchain analysis and data provider Chainalysis should attain unicorn status this upcoming week as raising another $100 million in venture capital would give it a $1 billion valuation.

In an interview with Forbes on Nov 20, Chainalysis CEO and co-founder Michael Gronager confirmed the upcoming event. Gronager expects to announce the Series C funding round this upcoming week. Venture Capital company Addition led the deal. According to Forbes, Accel, Benchmark, and Ribbit, which invested in Chainalysis previously, are expected to figure in the investment.

Chainalysis has over 350 clients including government and private institutions. The company assisted in a high-profile case with the U.S. Department of Justice (DoJ) in October. The DoJ announced that with the help of Chainalysis, it seized nearly 70,000 bitcoins from a hacker who stole them from the Silk Road black market.

Chainalysis also worked with the DoJ in other headline cases. In July 2020, the DoJ announced the disruption of three terrorist-financing cyber-enabled campaigns. These campaigns funded terrorists involving the al-Qassam Brigades, the military organs of Hamas, al-Qaeda, and the Islamic State of Iraq and the Levant (ISIS).

Forbes noted that the Series C round follows an extended Series B investment in July 2020. This $49 million round also brought in former Trump administration Treasury Department undersecretary for terrorism and financial intelligence Sigal Mandelker as a member of Chainalysis’ board of advisors.

The money raised will fund Chainalysis’ global expansion and intensification of its work with governments. The Series B round alone was earmarked in part for expanding the company’s headcount to over 300. Its client count is growing rapidly as well. The current count of 350 is up from 295 clients when the Series B round closed.

The deal is also a coup for the Addition venture capital firm. The fund is the creation of Lee Fixel, formerly of Tiger Global. The company was founded in early 2020 with $1.3 billion raised.

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Source: https://beincrypto.com/chainalysis-set-to-become-blockchains-next-unicorn/

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Fintech

Novatti partners with leading global card payment company UnionPay

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ASX-listed Australian fintech company Novatti Group Limited, a leading digital banking and payments company, has partnered with leading global card payment company, UnionPay.

UnionPay has more than 8.4b cards issued globally and a network spanning 179 countries and regions, highlighting its immense scale.1 In Australia alone, UnionPay is accepted by 90% of ATMs, 85% of point of sale terminals, and by major retailers such as Coles and Target.2

The partnership with UnionPay will drive growth in Novatti’s core payment processing business, with Novatti appointed as a UnionPay acquirer, providing UnionPay customers with access to Novatti’s merchant and transaction services across Australia.

The partnership will benefit other Novatti businesses, including ChinaPayments, Novatti’s China-focused, cross-border payments platform, which enables Chinese residents to pay Australian bills in Chinese currency. UnionPay has already been integrated into ChinaPayments, with transactions using UnionPay accounts already taking place. Further, ChinaPayments will shortly be integrated into the UnionPay app, providing eligible UnionPay users with direct access to ChinaPayments.

The partnership with UnionPay adds to Novatti’s growing list of tier-one global partners, including Visa, Alipay, WeChat Pay, Google Pay, Samsung Pay, Marqeta, and Decta. Growing commercial relationships and payments processing networks with these major partners underpins a core pillar of Novatti’s long-term revenue growth strategy, leveraging Novatti’s existing platforms and infrastructure to deliver more services and gain a greater share of wallets with our customers.

Managing Director of Novatti, Peter Cook, said, ‘We are thrilled to be partnering with UnionPay, a leading global card payment company. Through this partnership, Novatti will drive continued growth in our payment processing business, delivering further value from our existing platforms and technology.’


1. UnionPay International – https://www.unionpayintl.com/en/aboutUs/companyProfile/introductiontoUPI/ & https://m.unionpayintl.com/wap/en/mediaCenter/newsCenter/marketUpdate/7157.shtml

2. UnionPay International – https://m.unionpayintl.com/wap/en/mediaCenter/newsCenter/marketUpdate/6932.shtml

Source: https://australianfintech.com.au/novatti-partners-with-leading-global-card-payment-company-unionpay/

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