Naspers-owned PayU doubles down on India with $70M deal to buy Wibmo

PayU, the Naspers-owned payments company that competes with the likes of PayPal but focuses mainly on emerging markets, has made an acquisition to expand its business in India. It has acquired Wibmo, a startup based out of the U.S. (Cupertino, to be exact) that mostly operates in India. PayU is paying $70 million for the startup, bringing the total its invested in building its business to $500 million in the last two years.

Wibmo offers a range of payment processing services that cover security, risk and fraud, authentication, SME disbursements, mobile payments, QR codes and prepaid cards. It works with banks, merchants and offers consumer-facing services, too. The appeal to PayU appears to be an opportunity to own touchpoints across the payment process, a bridge to develop its own ecosystem, although Wibmo will keep its branding and run as a wholly-owned subsidiary.

The deal had previously been reported by Economic Times last month, and it speaks to ongoing consolidation.

“This is a strategic acquisition for PayU that combines our merchant network and Wibmo’s leadership in digital security,” Aakash Moondhra, Chief Financial Officer at PayU Global, told TechCrunch in an interview. “PayU is very bullish on India as a market.”

A Citi report issued late last year valued PayU’s India unit at $2.5 billion, and that’s no accident given the level of investment that the company has made.

PayU acquired Citrus for $130 million in 2016, and it has also made investments in Indian fintech startups that include PaySense and Zest Money. Elsewhere in the world, its deal-making has included investments in Creditas in Brazil, Germany’s Kreditech, U.S-based Remitly — which operates remittance worldwide — and Zooz in Israel.

Another key area for the business in India has been a move away from a wallet-based approach to financial services. PayU shuttered one of its wallet apps in India at the beginning of last year, and instead went after services that include credit and deferred payment options, via its LazyPay service. The business also has its core payment gateway service, which will be boosted by the addition of Wibmo.

Naspers itself is doubling down on India, where it has backed unicorns Swiggy, food delivery service that recently raised a $1 billion round, and education service Byju’s, which pulled in $540 million, with major deals announced in recent months.

The company, which is still best known for its early investment in Tencent, has reportedly set aside $1 billion for fintech-related M&A in India, according to a Bloomberg report published last month.

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Movo grabs $22.5M to get more cities in LatAm scooting

Madrid-based micromobility startup Movo has closed a €20 million (~$22.5M) Series A funding round to accelerate international expansion.

The 2017 founded Spanish startup targets cities in its home market and in markets across LatAm, offering last mile mobility via rentable electric scooters (e-mopeds and e-scooters) plotted on an app map. It’s a subsidiary of local ride-hailing firm, Cabify, which provided the seed funding for the startup.

Movo’s Series A round is led by two new investors: Insurance firm Mutua Madrileña, doubtless spying strategic investment potential in helping diversify its business by growing the market for humans to scoot around cities on two wheels — and VC fund Seaya Ventures, an early investor in Cabify.

Both Mutua Madrileña and Seaya Ventures are now taking a seat on Movo’s board.

Commenting on the Series A in a statement, Javier Mira, general director of Mutua Madrileña, said: “The equity investment in Movo reflects Mutua Madrileña’s aspiration to respond to the new mobility needs that are emerging, and to the economic and social changes that are occurring and that are transforming our life habits.”

Movo currently operates in six cities across five countries — Spain, México, Colombia, Perú and Chile.

It first launched an e-moped service in Madrid a year ago, according to a spokeswoman, and has since expanded domestic operations to the southern Spanish coastal city of Malaga, as well as riding into Latin America.

The new funding is mostly pegged for further international expansion, with a plan to expand into new markets in LatAm including Argentina, Brazil and Uruguay. Movo is targeting operating in a total of 10 countries by the end of 2019.

The Series A will also be used to grow its vehicle fleet in existing markets, it said.

“We are very excited to be able to offer a solution to the problems of mobility in cities, particularly for short distances in areas with high population density,” said CEO Pedro Rivas in a statement. “We are committed to working together with governments to complement mass public transport with these new micromobility alternatives, so that people can get around in a more sustainable and efficient way.”

Commenting on its investment in the Cabify subsidiary, Seaya Ventures’ Beatriz Gonzalez, founder and managing partner, said the fund is “committed to the evolution of mobility towards sustainable alternatives in the world’s major cities”.

“We want to be part of the transport revolution by promoting projects like Cabify and, of course, Movo,” she said in a statement which seeks to paint micromobility as a solution for urban congestion and poor air quality. “We are motivated to continue to promote companies with which we share this sense of responsibility towards the development and improvement of people’s quality of life.”

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Udacity restructures operations, lays off 20 percent of its workforce

Udacity, the $1 billion online education startup, has laid off about 20 percent of its workforce and is restructuring its operations as the company’s co-founder Sebastian Thrun seeks to bring costs in line with revenue without curbing growth, TechCrunch has learned.

The objective is to do more than simply keep the company afloat, Thrun told TechCrunch in a phone interview. Instead, Thrun says these measures will allow Udacity from a money-losing operation to a “break-even or profitable company by next quarter and then moving forward.”

The 75 employees, including a handful of people in leadership positions, were laid off earlier today as part of a broader plan to restructure operations at Udacity. The startup now employs 300 full-time equivalent employees. It also employs about 60 contractors.

Udacity, which specializes in “nanodegrees” on a range of technical subjects that include AI, deep learning, digital marketing, VR and computer vision, has been struggling for months now, due in part to runaway costs and other inefficiencies. The company grew in 2017, with revenue increasing 100 percent year-over-year thanks to some popular programs like its self-driving car and deep learning nanodegrees, and the culmination of a previous turnaround plan architected by former CMO Shernaz Daver.

New programming was added in 2018, but the volume slowed. Those degrees that were added lacked the popularity of some of its other degrees. Meanwhile, costs expanded and their employee ranks swelled.

Udacity CEO Vishal Makhijani left in October and Thrun stepped in. He took over as chief executive and the head of content on an interim basis. Thrun, who founded X, Google’s moonshot factory, is also CEO of Kitty Hawk Corp., a flying-car startup. In an earlier interview, Thrun told TechCrunch that he discovered the company had grown too quickly and was burdened by its own self-inflicted red tape. Staff reductions soon followed. About 130 people were laid off and other open positions were left vacant, Thrun said.

Thrun insists these latest layoffs aren’t just a half-hearted attempt to quickly cut costs and instead are part of a strategic turnaround plan. He communicated that same thinking in the email sent to employees.

“By bringing our costs in line with our revenue and refocusing our product strategy, we believe we can continue to grow the overall business both in enterprise and consumer segments in fiscal 2019 and beyond, while also achieving a break-even position in terms of both cash flow and EBITA, which will ensure that we can continue to do our important work,” Thrun wrote toward the end of the email to employees.

Last year, Udacity generated about $90 million in revenue.

Even as Udacity slashes costs and headcount, it’s trying to expand its enterprise business, which has had recent success. Udacity now has contracts with 60 enterprise customers, including AT&T and PricewaterhouseCoopers. Airbus and Audi recently signed on, as well.

Udacity’s plan was developed largely by Lalit Singh, the interim COO hired in February. Singh conducted a review of the business, including its operating model and Udacity’s primary costs such as workforce, marketing and other non-workforce expenses. As a result of the review, Udacity has laid off more staff, streamlined operations and programming and cut other costs.

“We have tremendous opportunities in front of us, and we also have some challenges. To succeed, we have to ensure that we have an operating structure that allows us to be nimble, efficient, and better organized to win with fewer silos and frankly, reduced cost,” Thrun wrote in the email.

As of Tuesday, four executives who handle different aspects of the business now report directly to Thrun. Those executives include Singh, Alper Tekin, who recently became CPO, James Richard, who was VP of engineering and has been named CTO, and Caroline Finch, vice president of consumer growth.

Alex Varel, the company’s head of enterprise sales, and Jimmy Lee, head of enterprise operations, will now report to Singh.

The change is striking compared to October, when Thrun came back to temporarily fill the CEO role. At that time, 17 people reported to Thrun.

Udacity also has cut costs and streamlined its marketing efforts, downsized and consolidated office space and made its educational programming consistent throughout the various regions in which it operates, including the U.S., Brazil, China and India.

The company will keep an office, albeit a smaller space, in Mountain View, and one in San Francisco. Udacity is closing an additional satellite office in San Francisco and is evaluating its real estate needs in other countries, as well.

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Facebook co-founder Eduardo Saverin’s B Capital makes $406M first close of new fund

B Capital, the VC firm from Facebook co-founder Eduardo Saverin, has made the first close of its second fund.

The firm has closed out $406 million in initial capital, according to a filing lodged with the FCC last month. The document doesn’t include details of a target raise or which LPs have committed. Saverin came to prominence as a co-founder of Facebook, but he has rebuilt himself as an investor with a particular focus on Asia.

B Capital is a relatively new entrant but already this new fund represents an upsized raise, even without the final close. B Capital’s first fund closed $360 million last February with consulting firm BCG a major backer from the get-go. The firm pitches itself as a bridge between the corporate world and quality startups, an area where its BCG alliance no doubt carries significant weight.

The firm is based out of Southeast Asia — where Saverin has lived since renouncing his U.S. citizenship in 2011 — but it investors globally and has a San Francisco office. Its focus covers financial services, insurance, health, industrial, transportation and “consumer enablement.” To date, B Capital has invested in 19 startups, according to its website, and those include scooter startup Bird, insurance-focused CXA — which raised $25 million last month — Indian fintech startup Mswipe — which announced a $30 million round last week — and logistics firm NinjaVan.

Saverin has also made investments via his family fund, Velos, but its involvement has tapered down since B Capital launched.

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Bringing affiliate marketing and outsourced customer acquisition to Brazil nets Escale $22.6 million

Despite not being Brazilian and having their first exposure to the country only a few years ago, the two co-founders of Escale have managed to raise $22.6 million for their company, which provides customer acquisition services to companies in telecommunications and healthcare across Brazil.

Their secret? A knowledge of search engine optimization technologies honed through side businesses the two ran back in the United States.

The state of online marketing and digital sales was so woefully bad in Brazil that co-founders Matthew Kligerman and Ken Diamond had a green field in front of them on which to build Brazil’s first true online customer acquisition service, according to Diamond.

“We fell in love with Brazil for its warm culture and natural beauty, but as consumers, we had terrible experiences acquiring the most fundamental products and services for our new lives: internet, cell phone plans, health insurance and basic banking needs,” Kligerman said in a statement.

The company’s largest customer, according to Diamond, is NET, the Brazilian cable and telecom operator. NET was the first company to sign on for Escale’s customer acquisition services, but the company’s roster of clients now includes some of Brazil’s largest companies including Bradesco, Sul America, Claro, GNDI, and Amil.

It’s that marquee client list that attracted QED Investors and Invus Opportunities to co-lead the $22.6 million round that Escale just closed. The company’s previous investors Kaszek Ventures, Rocket Internet’s GFC and Redpoint e.Ventures also participated in the funding.

Latin America is in the throes of a startup renaissance at the moment with Brazilian companies like Nubank and iFood and the Colombian company Rappi reaching billion dollar valuations. Meanwhile investors are committing more capital to the region. Softbank, for instance is Softbank committing $5 billion to a new Latin American-focused fund.

With the new funding, Escale intends to move deeper into the development of customer acquisition platforms across verticals like consumer finance, insurance, and education with comparison shopping sites and informational services (a la CreditKarma in the U.S.).

“With millions of web and cloud voice interactions every month, Escale can transform each of those interactions into data points, and continually improve its proprietary acquisition platform, ‘EscaleOS’, to create highly-intelligent, customized marketing and sales funnels, helping consumers at the right moment connect with the products and services they need,” says Nicolas Berman, a partner at Kaszek Ventures. “The more consumer interactions they have, the faster Escale’s data flywheel spins.”

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