Year: 2019

Argentina’s Kaszek Ventures raises $600m in boost to Latin American start-ups

Posted on by Jack Pearson

Venture capital group Kaszek Ventures announced on August 29 that it has raised $600m from two new funds, providing a boost to Latin America’s growing start-up ecosystem. Kaszek Ventures is widely credited with a recent surge in start-up investment in Latin America where, in 2018 alone, investment skyrocketed to nearly $2bn.

Kaszek stated it had closed a $375m fund for early-stage companies, while another $225m will go towards supporting companies that are more mature in their development. Raised in about two months, the latest commitments will increase Kaszek’s total capital under management to approximately $1bn. It is the first local early-stage investor to achieve this.

Having once been overshadowed by their peers in Silicon Valley, Latin American entrepreneurs are now finding it much easier to raise capital

The venture capital group was launched in 2011 by Hernan Kazah and Nicolas Szekasy. The two had previously founded the e-commerce marketplace MercadoLibre, Latin America’s most highly valued tech start-up, before delving into the world of venture capital funding. Since its creation, Kaszek Ventures has invested in over 70 companies, with its portfolio centred in Latin America. Some of its most prolific investments include the digital bank Nubank, fintech start-up Creditas and shipping logistics platform Loggi.

Brazil has long enjoyed higher levels of financing and business growth compared with the rest of the region, but other countries like Colombia and Argentina are also now experiencing start-up booms. This trend can be partly attributed to the adoption of 4G across Latin America, which has facilitated the development of more tech companies. In addition, countries like Colombia have slowly experienced greater political stability and enjoyed increased affluence, which has led to the growth of the middle classes.

This growth has also been fuelled by a huge surge in venture capital funding. Having once been overshadowed by their peers in Silicon Valley, Latin American entrepreneurs are now finding it much easier to raise capital. Between 2016 and 2018, venture capital funding nearly quadrupled. Earlier this year, the region received its largest ever venture capital deployment in the form of a $5bn fund from Japan’s SoftBank Group. With Kaszek Ventures’ latest commitments, it seems that the time is now for Latin America’s start-ups.

Apple set for new sales in India as foreign direct investment rules are relaxed

Posted on by Jack Pearson

India has liberalised its foreign direct investment rules, in a boost to single-brand retailers such as Apple. The tech giant has lobbied the Indian Government to relax its rules for years, which has prevented the company from opening online stores without first establishing a bricks-and-mortar retail presence. The rules also stipulated that companies must source 30 percent of their production locally.

Now, thanks to reforms announced on August 28, India’s sourcing laws will change so that products manufactured in accordance with the 30 percent sourcing rule can now be sold in other markets, not just in India. In addition, single-brand retail companies will be able to set up online stores before they open retail outlets.

Although smartphone sales are currently in decline around the world, India’s smartphone market remains highly attractive – it is the world’s fastest growing, and also its second largest

To boost sales, several iPhone models have been assembled locally. This allows the company to enjoy some of the tax benefits Narendra Modi’s government have provided as part of its Make in India initiative. However, because retail stores have not been set up in India, Apple has sold its products in the country through third-party offline retailers and e-commerce sites like Amazon. These companies have tended to offer heavy discounts on the iPhone and MacBook Air products. Although this has boosted sales, Apple executives have voiced their dissatisfaction with this arrangement on the grounds that it dilutes the brand’s image.

Apple is now poised to launch online sales of its devices in India within the coming months. It is also hopeful to set up its first retail store, although this is likely to happen further down the line. “It will take us some time to get our plans underway and we’ll have more to announce at a future date,” a spokesperson said.

Although smartphone sales are currently in decline around the world, India’s smartphone market remains highly attractive – it is the world’s fastest growing, and also its second largest. For Apple, these new reforms will make doing business in India easier and more lucrative than ever, helping it to catch up with Chinese smartphone manufacturers, such as Xiaomi, which have benefitted from aggressive uncontested marketing in India.

Sygnum takes steps to become one of the world’s first crypto banks

Posted on by Jack Pearson

Crypto firm Sygnum has become one of the first to receive conditional banking licences from Swiss regulators, in a landmark move that could see digital assets become more established within the financial sector. Sygnum’s co-founders, Mathias Imbach and Gerald Goh, told Bloomberg on August 27 that they now planned to obtain similar licences in Singapore.

Sygnum is a digital asset technology group based in Singapore and Switzerland. On August 26, the company was awarded a provisional banking and securities dealer licence from the Swiss Financial Market Supervisory Authority. As a result, Sygnum is set to become an official bank later in the year.

Cryptocurrency-related financial services are at a nascent stage, as blockchain infrastructure and regulation within the sector is still largely underdeveloped

Once it operates as a Swiss bank, the company will be able to issue, store, trade and manage bitcoin and Ethereum, as well as convert fiat currencies into the two cryptocurrencies. Securing a full Swiss banking licence will also enable it to apply for a traditional banking licence in Singapore. In anticipation of this, the company has already begun talks with Singaporean regulators and petitioned for a capital markets services licence.

Cryptocurrency-related financial services are at a nascent stage, as blockchain infrastructure and regulation within the sector is still largely underdeveloped. However, Switzerland has been leading the way in welcoming the technology into the banking industry. Facebook’s Libra project is headquartered in Geneva, and the nation is currently updating its financial legislation to allow the integration of crypto technologies.

Singapore’s banking sector has been comparatively slow to adapt to this disruption. As a result, Sygnum is focusing on raising capital and establishing itself as a key player in order to win regulator approval. It has raised about CHF 60m ($61m) and secured backing from a range of eminent individuals and institutions. For example, Chua Kim Leng, a former assistant managing director at the Monetary Authority of Singapore, is in charge of Sygnum’s anti-money-laundering committee. Assuming the company receives its Singaporean licences, this could signal the institutionalisation of the budding world of cryptocurrency.

Johnson & Johnson to pay $572m in historic opioid trial

Posted on by Jack Pearson

An Oklahoma judge has ruled that pharmaceutical giant Johnson & Johnson must pay $572m for its contribution to the state’s opioid addiction crisis. The case was the first to reach a verdict in light of the thousands of lawsuits filed against opioid creators and distributors. According to the US Centres for Disease Control and Prevention, there have been over 400,000 opioid-related overdose deaths in the US between 1999 and 2017.

The ruling states that the company deceptively marketed opioids by downplaying the risks of addiction, which led to doctors prescribing the drugs heavily. Since 2000, approximately 6,000 people have died in Oklahoma from opioid overdoses.

Addiction to opioids – including prescription painkillers like fentanyl – has led to hundreds of thousands of deaths and destroyed communities across the US

The company announced that it would appeal the judgement after the verdict was delivered. It claimed its painkillers accounted for less than one percent of total opioid prescriptions in Oklahoma and the US, including generic medications. It also argued that the state’s public nuisance accusation was founded on “radical theories unmoored from more than a century of Oklahoma case law”.

Ahead of the case, Oklahoma had already reached a $270m settlement with Purdue Pharma, the maker of OxyContin, as well as an $85m settlement with Teva Pharmaceuticals. The fine for Johnson & Johnson was significantly lower than some investors and analysts had expected, causing the company’s shares to rise by two percent in extended trading after the verdict.

The US’ opioid epidemic is widely considered to be one of the worst public health crises in the nation’s history. Addiction to opioids – including prescription painkillers like fentanyl – has led to hundreds of thousands of deaths and destroyed communities across the US.

Plaintiffs in other opioid lawsuits are sure to have been following the Oklahoma case closely. Two Ohio counties are currently preparing for a trial in October, which will consolidate 2,000 opioid lawsuits. It’s highly likely that the Oklahoma case will shape the nature of this upcoming trial, as its verdict represents a significant step forward for holding pharmaceutical companies accountable for their role in the crisis and its consequences.

How intelligent enterprises transform experiences and operations

Posted on by The New Economy

30,000 people from over a hundred countries gathered in Orlando to be a part of SAPPHIRE NOW 2019, SAP’s annual three day celebration of business and technology. SAP is helping organisations combine operational data and experience data, to help them discover new growth initiatives and lead in their industries. Dave Scullin from Ballance Agri-Nutrients, Tony Costa of Bumble Bee Foods, and Helle Huss from KMD, discuss their businesses’ journeys.

Dave Scullin: We’re finding the demographic of farmers in New Zealand changing. And that demand for a great digital experience increasing over time.

The farming demographic is changing – younger ones are coming through, farms are getting larger and more complex in New Zealand. There’s a lot more corporate farming. And they’re demanding 24/7 access to information, they’re demanding an easy way of doing business with us. They’re demanding what I term a unique blend of customer experience e-commerce type capability and agri-tech capability.

So that’s why we’re investing, and that’s why I’m pleased to be seeing SAP invest in bringing experience and operational data together at scale.

Tony Costa: The great customer experience for us is increased trust in us as a brand, that we provide the highest level food safety, transparency, in sustainable caught seafood.

Transparency does matter to the consumer. They want that relationship with a company like Bumble Bee; they want full traceability of their product, and they want to know exactly what they’re eating.

So the experience economy to us is providing that value-driven experience for our customers and our retailers.

Helle Huss: The employee experience is also very important. So whenever we develop new business solutions, we always take the point of: what is actually the user experience that you want to achieve, in order to increase the use of the solutions or technology that you’re actually implementing? Because if you don’t understand the user needs of whatever system in the enterprise: usage will go down, and you will have the manual processes taking over.

And so, it’s very much at the core when we develop new solutions, to understand the user journey: their needs, and their behaviour, in order to design the best solution.

The New Economy: For these innovators, adapting to the experience economy is the next digital disruption. And it’s going to completely transform their industries.

Tony Costa: The future as we see it is, the whole supply chain relationship is completely changing. The way that we interact with our suppliers, our retailers, and even the consumer – leveraging technology to balance that relationship is critically important as we move forward.

We really think we’re just scratching the surface of the capabilities. We’ve had a great positive feedback and uplift just in culture, to see that we are doing what we say we’re going to do. Lead the industry in transparency, and providing that to our consumers and our retailers. And our true focus is around food safety and food quality.

Dave Scullin: At the moment we sell nutrients, we manufacture nutrients and animal feed, and we sell them to our farmers.

Ultimately I think we’ll move to an outcomes-based business model where we take control of the whole supply chain. Farmers will pay us for those pasture outcomes or those crop outcomes or those animal outcomes. And we’ll be responsible for managing their pasture to the optimum level, based on weather data, historical fertiliser plan and agronomy data. Soil health data. And the whole way we work with our customers will be very digitally-centric.

Helle Huss: The core of our business is really our ability to understand those user needs. If you don’t understand how to build in behaviour from consumers or employees, you won’t be able to sell.

Many top executives are not born as digital consumers; they may be afraid of technology, they don’t have the experience and the background. And if you don’t have that, how can you develop actually a clear strategy, and new business models.

Therefore it’s extremely critical that top executives get on board with this technology. It’s not frightening. And try to understand – maybe not the bits and bytes of the technology, but more: what can the technology can do, in order to help transform their businesses, and not lose out on competition.

How Entel, Chile’s largest mobile telecoms provider, uses experience data

Posted on by The New Economy

Entel is Chile’s largest telephony provider – and also its number one in customer satisfaction for mobile and household markets. The company has been working with SAP-acquisition Qualtrics for seven years, using its tools to measure customer experience in real time. Customer Division Manager Pablo Oyarzun explains how combining experience data with operational data is helping Entel improve customer journeys every single day. This video is in Spanish with English subtitles.

Pablo Oyarzun: Entel is a company that has been present in the Chilean market for more than 50 years. We are a cellular phone company. We also sell fiber and wireless solutions for households, directly in the homes of customers.

We have the largest (35 percent) share of the mobile telephony market in Chile; and we also have a 37-38 percent share of the total income of the telecoms market in Chile.

My name is Pablo Oyarzun. I’m the Manager for the Customer Division at Entel. I supervise the customer experience areas, which measure customer satisfaction and the customer journey.

We are number one in the country in customer satisfaction In the mobile and household markets.

Since the company was founded, the customer has always been at the core of our company. All the company’s business strategy is customer-centric. All the future decisions made by the company are based on customer needs.

We’re pretty moved, motivated and excited at being able to provide our customers with new experiences.

We have started to measure the experience of our customers from a contextual and omnichannel perspective. This has enabled us to understand the different needs of our customers and satisfy them when they contact us through different service channels – right away, and in the best possible way.

Qualtrics is one of our partners – we’ve been working together for more than seven years. We started using tools that enabled us to measure the experience of our customers in the digital world.

We used to have operational indicators and satisfaction rates, but we weren’t able to match them. Now we can do it, correlate them, and automatically identify them when we change the customer journey. We can also measure their satisfaction, we have the operational indicators, and we automatically – almost in real time – realise that we made an appropriate change; or that we have, in fact, to go back and repurpose a new customer journey.

By having real-time information, we’re able to measure and define new customer journeys every day; so we can test different what-if scenarios and then change such journeys. This has enabled us to improve in three key areas.

First, it’s real-time information; second, we’ve been able to detect the customer’s pain points much more easily; and third, we can take the customer sentiments and, based on them, offer a new customer journey.

This has enabled us to change the experiences we offer in our stores, the experience we offer online and in our mobile app; and in addition, we provide customer service executives with information about the reasons we failed, or are providing exceptional performance.

Having real-time information makes this process easy, and with this new agile structure, we can offer a new customer experience every week and automatically get new results. This has enabled Entel to rank first in customer service in Chile.

Recently, SUBTEL, a government organisation, published an index where we were awarded as the best mobile telephony company for customer service.

We’ve also won the BCX Award – for the sixth year in a row – for the best customer service in mobile telephony in Ibero-America; and for the eighth year in a row, we are the best company for customer service in Chile.

All this allows us to offer our customers endless possibilities, and Entel’s technology that can help them in their lives.

YouTube shuts down accounts for spreading Hong Kong disinformation

Posted on by Jack Pearson

Google has announced that YouTube, its video-streaming service, has taken down more than 200 channels that are allegedly part of a coordinated influence campaign by the Chinese Government to spread disinformation about the protests in Hong Kong. The decision follows similar actions taken earlier this week by Twitter and Facebook, which both accused the Chinese Government of carrying out similar campaigns on their platforms.

Unrest in Hong Kong began in response to a bill that would have granted powers to Chinese courts to allow the extradition of defendants from the city-state to mainland China in order to stand trial in the state-controlled courts. Hong Kong’s courts are popular in the city-state because of their independence and the separation of powers. Hong Kong’s governance model is a by-product of the city’s status as a former British colony until its return to China in 1997. The bill was eventually suspended, but protests have continued nonetheless, with many calling for an end to Chinese interference in their semi-autonomous affairs.

On August 19, Twitter announced that it had removed hundreds of accounts referring to protestors as “cockroaches” and dangerous extremists. Some of these channels posed as news organisations or independent bodies, but the company found that they were in fact linked to the Chinese Government. China’s Ministry of Foreign affairs denied these claims, however.

Google said the discovery of the 210 YouTube accounts was “consistent” with those made by Twitter and Facebook. However, unlike Twitter and Facebook, Google did not openly accuse the Chinese Government of being behind the campaign. The company did not disclose the content of the videos the accounts had posted or how popular they were.

On August 19, Twitter announced that it had removed hundreds of accounts referring to protestors as “cockroaches” and dangerous extremists

Tech giants have taken an inconsistent stance on authoritarian regimes in recent years. In 2014, Google refused to take down videos of Putin’s opposition, Alexei Navalny, when ordered to by the Russian Government. However, in 2018, it complied with Russian orders to remove YouTube videos promoting a rally led by Navalny’s Anti-Corruption Foundation.

Financially, it is in the interest of social media companies to forge close relationships with governments around the globe, allowing them to expand their services worldwide. However, social media giants are coming under increased scrutiny as the human cost of their compliance becomes more apparent.

Blockchain platform for credit history launched in Sierra Leone

Posted on by Jack Pearson

Kiva, a San-Francisco-based non-profit, is introducing an online ID database in Sierra Leone that uses blockchain technology to track credit history. The platform was launched by Kiva and Sierra Leonean President Julius Maada Bio on August 21 in Freetown, the country’s capital.

It’s hoped the initiative will enable Sierra Leone’s citizens to secure loans, establish credit histories and gain access to financial services.

The platform works by giving each prospective borrower a digital wallet. Their transactions are recorded on a blockchain ledger, which ensures user information is secure and can’t be tampered with

More than three quarters of Sierra Leone’s seven million citizens are excluded from the formal banking sector, due to the West African country’s standing as one of the poorest in the world. The use of informal financial institutions like community banks is therefore common in the country. However, these projects have no way of establishing the identity or credit history of borrowers, and therefore tend to offer loans with very high interest rates to minimise lender risk.

Kiva is a non-profit that aims to increase financial inclusion around the world. It has deployed a total of $1.3bn in loans across almost 80 countries. This will be the first time the company has implemented an online credit system.

The platform works by giving each prospective borrower a digital wallet. Their transactions are recorded on a blockchain ledger, which ensures user information is secure and can’t be tampered with. Lenders will then be able to access citizens’ credit histories by using fingerprints and other biometric data previously collected by the Sierra Leonean Government.

A potential flaw in the platform is that the wallet can only be accessed through an online app, even though the majority of Sierra Leoneans have limited access to the internet. However, Kiva plans for users to get around this by using MiFi devices that can connect to the internet via phone networks.

Sierra Leone’s government aims to have all banks and microfinance institutions set up with the system by the end of the year. As one of the poorest countries in the world, Sierra Leone has a pressing need for improved financial inclusion within the global economy. With greater access to financial services, its population will be able to improve its ability to claim a stake in the digital economy.

Facebook grants users more control over how their data is shared

Posted on by Jack Pearson

On August 20, Facebook announced the release of a new tool that will allow users to prohibit third-parties from storing their personal data. Users will be able to view their ‘off-Facebook’ activity and choose to clear it – a significant concession from the social media giant following the Cambridge Analytica scandal. Users will also have the option to prevent Facebook from using their browsing history for personalised advertising.

It’s worth noting that Facebook will not be deleting data that third-parties have already collected. Instead, it’s disconnecting data from users’ personal information on Facebook. This means companies will be able to see that someone has visited their website, but not identify the person or sell their data on – a system akin to the browsing privacy afforded to VPN users.

Facebook will not be deleting data that third-parties have already collected. Instead, it’s disconnecting data from users’ personal information on Facebook

However, if a significant number of Facebook users disconnect their browsing data, this could put a dent in Facebook’s revenue. Targeted advertising is highly profitable for the company; in the second quarter of this year, Facebook made nearly $17bn from ad sales. Erin Egan, Chief Privacy Officer at Facebook, and David Baser, Director of Product Management, acknowledged in the announcement that the new feature could have “some impact” on the business.

This will, of course, depend on how many people make use of the tool. Few Facebook users actually know about the social network’s pre-existing privacy settings. Considering this, it seems unlikely that the majority will now take the initiative to disconnect their browsing data.

The feature will be rolled out in Ireland, South Korea and Spain before it is made available to users around the world. It’s a much-anticipated move from the social network, which has come under heavy criticism for its privacy practices.

While the new tool marks a step in the right direction, it is unlikely to satisfy the company’s critics. Many privacy advocates are calling for Facebook to not simply increase transparency around the data it gathers, but to stop data collection altogether.

US leads AI race but China is hot on its heels

Posted on by Jack Pearson

The US is currently the global leader in AI, but could soon lose top spot to China, according to a report released by the Centre for Data Innovation on August 18. It also concluded that the EU is falling behind in the race to develop AI. The nations that achieve AI dominance stand to make significant economic gains in the future.

According to the report, the US’ top position is largely thanks to its thriving AI start-up ecosystem, which enjoys significant private equity and venture capital funding. The country also leads in the development of semiconductors and the computer chips needed for AI systems.

Although China is now second to the US, it is rapidly gaining ground in terms of AI capabilities

Each region was compared across six key metrics: talent, research, development, adoption, data and hardware. The US leads in four of these categories (talent, research, development and hardware) while China leads in adoption and data. Overall, the US scored 44.2 out of 100, while China totalled 32.3 and the EU 23.5.

Although China is now second to the US, the report concluded that it is rapidly gaining ground in terms of AI capabilities. In 2017, the country announced its initiative to become dominant in AI by 2030. The ability of China’s central government to gather huge amounts of data on its citizens gives it a distinct advantage in the AI race since the technology requires large datasets in order to learn faster and more effectively.

The report also found that the EU is struggling to realise its AI ambitions. The bloc hopes to make itself “the world-leading region for developing and deploying cutting-edge, ethical and secure AI”. However, while it is a strong performer in the talent and research categories, the EU is falling behind in commercial AI adoption.

The report concludes that, unless the EU can significantly accelerate its AI initiatives, it is currently unlikely to catch up with the US or China. This is fast becoming a race with only two main competitors.

SoftBank Vision Fund invests $110m in renewable energy storage technology

Posted on by Jack Pearson

SoftBank Vision Fund announced on August 15 that it has invested $110m in Energy Vault, a Swiss start-up that is developing energy storage technology. As nations come under pressure to reduce their carbon emissions, many have pledged to switch to renewable energy sources. However, one of the biggest challenges they face is how to store energy at scale.

Energy Vault hopes to solve this problem. Using towers of huge cement bricks, each weighing 35 tonnes, it can store the energy generated by solar or wind power plants. Software controls the movements of these bricks so that power is charged and discharged in response to changes in power availability across an electric grid.

This is the first time SoftBank has invested in an energy company – an unusual move considering the early stages of the company’s development

Energy stored in the towers can be delivered for less than the cost of fossil fuels at any hour of the day. Energy Vault states that, while it’s unlikely the storage technology will ever be commonly found in cities, the towers are well suited to remote locations.

Energy Vault’s journey began at Idealab, a Californian start-up incubator. Having officially launched in late 2018, the start-up has since partnered with CEMEX, a Mexican building materials company, and India’s Tata Power. Once Energy Vault has completed its test phase, it will build its first commercially functioning site.

This is the first time SoftBank has invested in an energy company – an unusual move considering the early stages of the company’s development. However, according to Akshay Naheta, Managing Partner at SoftBank Investment Advisors, the company believes Energy Vault could scale quickly.

The $110m investment in Energy Vault testifies to a growing demand for renewable energy storage technologies that will no doubt continue to accelerate in the coming years. According to a report by GlobalData, the global energy storage market is expected to reach 22.2GW in 2023, up from almost 5GW at the end of 2018. Vision Fund’s move is a green light for the market and is likely to trigger other large investments in the technology.

Verizon sells social media network Tumblr

Posted on by Helen

Verizon revealed on August 12 that it is selling Tumblr, an early social media unicorn, to Automattic, the parent company of WordPress. The highly visual blogging platform – home of memes, fandoms and artistic communities – was acquired by Yahoo for $1.1bn in 2013. Three years later, Yahoo wrote down the value of that acquisition by $482m.

Verizon, which acquired Yahoo and its affiliated websites in 2017, has now sold Tumblr for well below $20m, according to Axios. Later reports indicated that the selling price could even be as low as $3m.

It’s been a steady fall from grace for a platform that once commanded significant influence in the social media sphere. As sites like Facebook, Instagram, YouTube and Reddit have grown in popularity, Tumblr has seen its traffic wane.

As sites like Facebook, Instagram, YouTube and Reddit have grown in popularity, Tumblr has seen its traffic wane

Verizon’s decision to ban porn from the platform last year further dented Tumblr’s popularity, as many saw the site’s tolerance of adult content as one of its key selling points, distinguishing it from more public platforms like Instagram. This also made it a refuge for the LGBTQ community, some of whom saw it as a safe space where they could freely express their sexuality. According to Sensor Tower, the number of Tumblr’s first-time users declined 33 percent year-over-year last quarter.

Automattic said in a statement that it did not plan on bringing huge change to Tumblr, implying also that the adult content ban would not be reversed. Instead, it hoped Tumblr would serve as a “complementary” site to its flagship brand, WordPress. As part of the sale, Automattic also takes on Tumblr’s technologies and 200 employees.

Despite Tumblr’s financial woes and diminishing influence, the 450 million blogs on the platform tend to be run by highly engaged and active users. It’s hoped that Automattic could be a better partner for the blogging site in the long-term. For Verizon, on the other hand, this marks a significant scaling back of its operations within the spheres of media and digital advertising.