Gamification and social hooks have become cornerstones across every category of consumer apps these days, and today one that’s using these to build out a new e-commerce platform is Europe is announcing a seed round to give its growth a boost. Blidz — a social shopping app that offers big discounts (many items in categories like jewelry, clothes and gadgets sell for just $0.99 on there) on goods based on how many people are coming together to buy them, and then presents users with a selection of games on top of that to unlock more deals — has picked up €6 million ($6.6 million at today’s rates) in a seed round of funding after seeing its early growth reach 50,000 monthly users.

General Catalyst — one of the group of VCs out of the U.S. that have turned increasing attention to backing startups out of Europe in recent years — and European VC Peak are co-leading this round, with D4 Ventures, Fabric Ventures, FJ Labs and previous backer IPR.VC also participating, along with a few individuals: Youngme Moon (the Harvard professor who focuses on the digital economy), Christopher North (formerly a longtime Amazon exec, now primarily an investor) and Don Hoang (the ex-Uber and Revout exec).

If you are au fait with the world of social shopping and the description of Blidz sounds a little familiar to you, it might be because it is in large part a clone, specifically of Pinduoduo, the wildly successful gamified social shopping app in China, which CEO Lasse Diercks, who co-founded Blidz with Markus Haverinen (CPTO), cites as a direct inspiration.

“We saw the trend of Pinduoduo, learned how the model worked, built it and sent it out to the market a little over a year ago,” he told me matter-of-factly in an interview the other day.

Pinduoduo’s fortunes and challenges are bookends worth contemplating with thinking about Blidz: the Chinese platform currently has a market cap of nearly $60 billion (it’s listed on Nasdaq in the U.S.) and nearly 870 million active buyers — although recent growth has been slowing on the back of more competition and the weaker performance of China’s economy overall. That speaks of a lot of potential for Blidz, but also some of the same growth issues longer term.

The longer-term challenges, however, seem to be a far-off consideration at the moment for a startup that is only a year old. Like Pinduoduo’s founder Colin Huang, Diercks tells me he saw an opportunity to provide a different offering to the market beyond the domination not just of Amazon but the Amazon approach to e-commerce that was essentially being repeated by other marketplace platforms (build for scale with a huge number of SKUs, optimize around personalization, search and ads to surface products to potential buyers, improve margins by providing your own products alongside these and/or other logistics economies of scale).

“Our vision is to liberate Western consumers,” Diercks said. “We want to offer the western consumers better and less expensive shopping experience.”

In his view, that offering is addressed in two ways. Firstly, it’s about the front-end experience. Using gamification (currently there are four games on Blidz, and there will be more coming), Blidz also uses social hooks (share your deal on your timelines and in messaging to friends and groups!) respectively to engage users, getting them to create their own network effect by recommending products to people they know over other social channels, and for people to be won over to buying goods by seeing how many others are also buying them, and the price lowering as a result.

(That indeed has been a trick used in the pre-internet days, too, initially pioneered by home shopping live TV shows where people phoned in to buy goods.)

Secondly is the choice that Blidz, like Pinduoduo before it, is making to accept a much lower margin on sales in exchange for selling more goods.

Translating that to today’s internet landscape in regions like Europe and the U.S. was a no-brainer since the market has so little variety in it at the moment.

“Sixty percent of e-commerce in Europe today is dominated by Amazon, and then a long tail of others like it. We believe that there is a monopoly in price extraction,” he said. “In the end, that’s the vision of the company, to offer Western consumers a better and less expensive shopping experience.”

The solution, he believes, is to accept a much smaller margin on goods sold and aim for simply selling more of them to make up the difference and then some. China’s Pinduoduo, he said, sometimes makes as little as 0.5% off a sale. “This is a 60x difference compared to for example Wish.”

China is playing another key role for the company beyond being the market that birthed the platform that is Blidz’s inspiration: it’s also the key country in the supply chain for goods that are sold on Blidz. That’s reality commerce for you: although there are definitely signs of some startups building business models that nurture more manufacturing and goods production closer to those who are making purchases, China remains a critical supplier for the wider consumer market, and will be for a long time.

“We are building a supply chain in China where we have a team ex-Wish guys. They are building this for us,” said Diercks. This is not about buying cheap goods, but tapping into a newer generation of products coming out the country’s factories that are just as good and sometimes better than the average offerings. It then buys these in bulk, in a concept he described as “quality-to-price.”

“We don’t want to work with every supplier. We want to work with a select number,” he said. And that constrain of supply appears to be giving Blidz better bargaining power, he said. “They are waiting to come on board. The end vision is to be the Shein of this space,” he added, referring to the Chinese fashion sensation that has leveraged its own direct relationships with clothes and accessory manufacturers to source a higher level of quality, and then sells those goods directly to consumers itself.

The social shopping space is littered with a lot of businesses that appeared to be rocket ships, only to fizzle out their engines before reaching long-term, stratospheric orbits. Diercks doesn’t believe that Pinduoduo, and now Blidz, are comparable to these. “We don’t believe that Groupon or LivingSocial were ever really that social,” he said, because they never truly leveraged people’s own social graphs in their selling approaches. They are also more focused on experiences rather than products in their DNA, even if more recently Groupon’s goods business has shifted that somewhat.

The potential here of building out that model to more markets and possibly picking up more localized variations along the way, and picking up what looks like a base of loyal users up to now, have together been enough to sell the idea to top investors willing to take a punt on it.

“The Blidz founding team has a number of unique insights relating to the evolution of online commerce,” noted Adam Valkin, MD of General Catalyst, in a statement. They are creating a new customer experience in the West by combining social media, gaming and shopping into a data-driven entertaining and easy-to-use platform. We’re excited to see what emerges from this talented team.” 

B2B marketplaces have been in many ways slower to modernize than their consumer counterparts when it comes to e-commerce. Today a startup that has been a trailblazer in that space is announcing some funding from a key investor that underscores how this is changing and the opportunities that exist as a result. Profishop, which has built a storefront selling products for business and industrial environments — think power tools, workbenches, and agricultural and catering equipment, but also office supplies — by working directly with wholesalers to build a “just in time” platform for ordering and distribution, has raised $35 million, an equity investment that it will be using both to continue expanding its business and platform in Europe as well as further afield.

Based out of Bremen, Germany, Profishop is now active in 13 markets with its German storefront currently its biggest; earlier this year it also spearheaded efforts to break into the U.S.  Arasch Jalali, the CEO who co-founded the company with Anna Hoffmann (the CTO, who also happens to be Jalali’s wife), said that the company cleared $100 million in sales with 500,000 customers last year, and it’s on track to more than double those numbers this year.

“We have grown 100%-120% year-on-year every year since starting,” he said.

That growth rate is likely what got the company on the radar of Tiger Global — the storied late-stage investor that has been getting more active in Europe and in making earlier-stage bets in recent times — which is the sole investor in this round. Profishop has been active for about a decade and has been profitable in that time. In fact, before this it had only raised a seed round of an undisclosed amount, from Takkt and Howzat, according to PitchBook data.

The initial inspiration for Profishop, and its subsequent growth, is a textbook example of a classic startup story.

Jalali tells me that he first thought about the concept for Profishop when working in his first job out of university, a B2B business, where he saw first-hand how antiquated processes were for sellers and buyers in the market.

It was 2010, but by and large businesses in the B2B space in Germany were still using printed catalogues to lay out to potential customers everything that they had for sale, and the rest of the process for buying was equally analogue: the product purchasing process, including contacting a business to get price estimates and stock checks, were made by fax, comparing different products from different places also involved… comparing different faxed documents.

It was also a tedious process that typically involved middlemen-type players that slowed things down and brought more cost into the system: typically manufacturers of supplies worked with wholesalers, who then might sell directly to businesses, but might also work with further retailers who then finally sold to business customers.

In that context, the bar for entry into disrupting that state of affairs was paradoxically both very high and very low.

Low, because there was so much to do: even setting out to digitize those catalogues, or creating an online payment system would be a significant step towards modernizing — forget about more sophisticated ideas around better search algorithms, more tailored marketing, smart pricing, better logistics services, analytics for suppliers to understand what customers want or do not want to buy, and so on.

High, because it can be hard to convince companies entrenched in traditional ways of doing business to switch things up. And Profishop’s idea for how to switch things up was relatively revolutionary: its idea was to tap directly into the German manufacturing industry to work directly with the companies making products, and to set up a system whereby when a business customer purchased a product, Profishop would pass on the order directly to that manufacturer, who would drop-ship it directly to the business making the order. This “just in time” approach would mean no warehouses and no stock buying-in for Profishop, which was building a platform to position itself as a facilitator between the other two parties.

Jalali said that initial efforts to work with manufacturers were very slow to start with. When it opened for business online it had only five products listed, including a workbench and a locker. And he and his wife had zero experience in e-commerce. “We hadn’t even done any marketing,” he said. “But we got our first sale in 45 minutes.” In fact they hadn’t even had the time or funds to set up stock so the “just in time” first sale almost happened by default.

It was hard-going at first to talk to wholesales and sell them on the idea. “No one believed in us, and some even just laughed in our faces and told us this would never work.”

“We onboarded 20 new manufacturers in our first year,” he said. This year it will be 500 “and it will soon be 5,000.”

Ironically, one of the early nay-sayer brands is now one of its biggest partners. In total Profishop has some 1,600 wholesales and offers 1.6 million items for drop shipments.

In building out this business, Profishop has tapped into some interesting, larger socio-economic trends.

One of the biggest has been the role of manufacturing and how it has shifted over the years. For decades, a lot of global manufacturing has moved over to Asia, and specifically China, which has invested a huge amount in becoming the global leader in this space. Profishop’s whole business model is predicated on manufacturing happening locally to fit its logistics and fulfillment model. Indeed, it currently has no deals with manufacturers further afield.

This has meant that it’s been fostering a new market entry point and business opportunity for more localized manufacturing businesses, but that wasn’t always the case. Jalali noted that in some instances, the factories it visits prior to working with a company were dormant, the company having switched to shipping in supplies from China and using its factories more like warehouses.

“We would ask, ‘Where are your employees? Your site says you have 250 of them.’ They would answer that they now order everything from China,” he said. “But that has changed.” He said that part of the reason is economic: prices have gone up, both in terms of the costs needed to maintain manufacturing quality, but also the logistics and shipping costs for those goods, some 5x on average between 2020 and 2022, he said. “It has meant that a lot are thinking about bringing manufacturing back to Euope or Easter Europe. But it’s a process. It’s hard work but they are thinking about it.” The U.S. business, in part because of the size of the country, has Profishop working with a logistics company to help handle drop shipments, and as it expands in Europe this is likely to be a part of the equation there, too.

In terms of competitors, there are a number of other companies moving deeper into B2B, and no less than major marketplaces like Amazon and Alibaba are already big players (there, it’s wholesalers who do the selling to buyers). Even the name Profishop — a portmanteau of “professional” and “shop” — is not trademarked and is already being used by a specific brand to sell its industrial equipment online directly. It’s a crowded space, but one where building out relationships and offering the more direct option to manufacturers (no wholesalers involved) appears to be giving Profishop a big opening.

“The long-tail of equipment purchases for businesses is often unmanaged and offline. Profishop’s B2B marketplace brings this spend online, allowing customers to easily manage and source more than 1.5 million high-quality SKUs on one platform,” said Griffin Schroeder, a partner at Tiger Global, in a statement. “200,000 active buyers in Europe utilize Profishop, and we are thrilled to partner with Arasch and Anna to help them expand the business internationally.” 

Shares of U.S.-listed Chinese companies, and especially technology concerns, are ripping higher this morning. Driving the day’s trading were comments from Chinese government official Liu He concerning both foreign-listed Chinese shares and the pace of reform in the country’s economy.

Yesterday, The Exchange noted that a selloff of Chinese equities had steepened in recent days; uncertainty regarding the Chinese government’s COVID-19 policies, its closeness to the increasingly ostracized Russian government, rapid-fire regulations on major tech companies, and a shift in government thinking regarding its economy — the “common prosperity” effort — had rattled investors.

The Exchange explores startups, markets and money.

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Today, however, in light of the pronouncement, things are looking up for Chinese companies, at least in valuation terms. For example, the NASDAQ Golden Dragon China Index, comprising 93 different U.S.-listed Chinese companies, shot nearly 18% higher this morning. Alibaba and Baidu are up 17% apiece, shares of Bilibili are up 30%, and so on.

What’s changing?

The comments in question — here, in Chinese — indicate, per a CNBC translation, that the “Chinese government continues to support various kinds of businesses’ overseas listings.”

For holders of foreign shares of Chinese companies, that’s a relief given market concern that companies could be forced to delist. The document also notes that regulatory work should be completed rapidly — more welcome news. Other topics were mentioned, including monetary policy, the country’s real estate market and Hong Kong.

That the Chinese government is potentially retreating from the posture it struck last year when it was busy going after Chinese tech companies’ business models, labor practices, data policies and capital sources is incredibly important. Not only for the companies directly impacted by the day’s news, but also startups looking to build in the country.

Recall that we saw an early indication yesterday that the pace of venture investment in China is slowing in the first quarter. No single factor can claim the full mantle of responsibility for that change. But many contributed to it, and if China is willing to keep open more avenues for exits — foreign IPOs — while creating more regulatory room for companies to build, well, it’s a good recipe for more startup activity.

The Chinese venture capital market once challenged the United States’ VC market in activity terms. Those days are now years past. But leading status or not, there are a lot of folks who want to build in China, so we’re tracking their fortunes.

Shares of Chinese technology companies are selling off at home and abroad this week as the nation’s ties to Russia add to investor uncertainty at the expense of China’s tech industry. China is also enduring a COVID-19 outbreak, leading to mass lockdowns in technology hubs, and some of its leading technology concerns are looking to bring their listings back to domestic shores due to regulatory pressure.

The scale of the recent drop in the value of Chinese equities was dubbed “panic selling” and “relentless,” for context. In numerical terms, the Hong Kong Hang Seng Index fell more than 5.7% today, reaching a new 52-week low; the Shanghai Composite fell 5%, also a 52-week low.

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If you are parsing the public-market carnage this morning, you might expect that Chinese venture capitalists would pull back their investment cadence. After all, when the market’s risk tolerance flips, we often see more conservative behavior from money managers, right?

Maybe.

One key surprise in 2021 was the fact that despite a regulatory barrage from the central government, Chinese startups had a pretty good year when it came to raising capital. You would have been forgiven for expecting the opposite. After all, the scale of the 2021-era regulatory crackdown on Chinese tech companies was one of the most important technology stories last year, leading to a huge reshuffling of not only economic power in the country, but also where private capital flowed.

Naturally, we’re curious if the recent selloff in Chinese equities will have the sort of impact on private-market investment that we expected to see last year, even if our confidence in being able to read the nation’s economic future is low. Let’s dive into recent data and see what we can find out.

Declines

If we tracked a few days of declines in the public markets and then asked what impact the market movement had on historical venture investment, we’d sound a little silly; near-term public market movements don’t impact trailing private-market results. But the recent declines in the value of Chinese equities are more continuation than new movement, so we can look at Q1 venture capital data and do a little bit of compare-and-contrast.

On the historical declines point, the NASDAQ Golden Dragon China Index tracks the value of U.S.-listed companies with a “majority” of their business “within the People’s Republic of China.” And oh boy is it a hot mess. I have never seen a chart quite like this one:

Image Credits: YCharts

You can see a clear trend from early 2021 to today, including the recent selloff that has caused such a stir.

Adding up our data thus far: Chinese equities are taking body-blows as geopolitical, regulatory, and pandemic-related uncertainty led investors to race for the exits. And, even more, the valuation declines that we are discussing are not a new phenomenon, but could instead be considered an acceleration of prior trends (see above chart).

So are we, at last, seeing a deceleration in the pace of Chinese venture capital?

Maybe!

Voila, a startup building infrastructure for social commerce, is bringing concepts from China’s e-commerce market to the U.S. The company offers an alternative to the “link in bio” solutions used today by creators, like Linktree and Beacons, which direct followers to creators’ social profiles, personal websites, and other recommendations. Instead of a link list or landing page, Voila creates A.I.-powered customizable, shoppable storefronts by automatically detecting items in the creators’ online content then generating shoppable links.

With now over 10,000 creators signed up for the service, Voila is today announcing the close of its $6 million Series A led by Sinnovation Ventures and joined by Fosun Rz Capital. To date, Voila has raised $7.5 million, including from investors SOSV and Artesian.

Voila founder Ke Shang first moved from China to the U.S. to attend college. He later joined a machine learning team at Google, thanks to his mathematics background. But Shang was always interested in how U.S. e-commerce could be improved with technology.

For instance, Shang shares how he was once inspired by a joke on the TV show “The Big Bang Theory” to build a tech-enabled shopping tool. On the show, the character Penny asked the oddball genius, Sheldon, to create something that would allow her to take a photo of a shoe she liked in order to instantly find out where to buy it.

“Sheldon thought it was stupid,” says Shang. “But I thought this is a great idea — I could just scan through any content and find out all the shopping options right away. And if you could tell me the best deal it would be even better.”

He ended up experimenting with the idea by building out a big database of shoes by crawling online shoestores like Zappos, DSW, and others, then used deep learning to train a model that would allow users to find similar pairs of shoes to those in their photo. The project wasn’t really commercially viable, but led Shang towards the creation of Voila.

Today, the founder explains, online creators act as the connector between the product and the consumers. But often, their followers who want to buy the item in question have to leave the social media app and go to Google to search for the product. And if the product has gone viral, you may find it’s already out of stock by the time you come across the photo or video that prompted you to buy in the first place.

Image Credits: Voila

Voila offers an improved solution. While it will allow creators to enter the exact URLs for the products featured on their social media accounts, its secret sauce is how it can build out an extended list of recommendations automatically. To work, creators connect their Instagram or TikTok accounts to Voila, which then scans through their content to detect items and generate affiliate links. As part of this process, it uses machine learning to try to also analyze the scene in order to suggest other relevant items that can be added.

That is, in addition to the specific product the influencer suggested, Voila can generate a list of similar products at different price points and generate affiliate links to those items as well.

Image Credits: Voila

“We like certain influencers’ or celebrities’ lifestyles, but we can’t afford those styles,” Shang explains. “That shouldn’t stop our pursuit,” he notes. “You have options. It’s just a way to make sure that everyone finds the right thing and increases the creators’ content-inspired sales.”

Plus, if an item is sold out at one retailer, Voila can find it at another.

It can also suggest items to accompany the purchase that aren’t in the photo or video. For example, if the influencer was wearing a nice pair of sunglasses on a hot, sunny day, Voila might suggest a hydrating face mask alongside the sunglasses.

Image Credits: Voila

To train its model, Voila crawled around 50 million fashion and style photos and learned north of 300 different attributes that relate to apparel items.

The products are showcased on online storefronts that creators can customize with their own text, colors and links. On the backend, it offers creators analytics detailing their shop’s engagement, audience demographics, and more.

Image Credits: Voila

Since launching in late 2019, Voila has signed up over 10,000 creators to its service. More than 70% are based in North America, with around 20% in Europe and the rest hailing from parts of Asia. Unlike some “link in bio” solutions, Voila’s service is free to the creators — there’s no freemium tier with a push to upgrade to a premium subscription.

Instead, Voila works with affiliate marketing programs Rakuten and CJ to create the creators’ links that can be matched to a database of roughly 3 million products. Its revenue comes from taking a percentage of sales its platform generates. Voila won’t disclose how much it’s making, citing the early-stage nature of its business and the competitive landscape.

Image Credits: Voila

Shang ended up fundraising for Voila after getting stuck in China after flying home to visit family just before Covid hit.

“I was stuck there for two years,” he says. “But while I was in China, I didn’t waste any time. I got the team built. I was also able to raise two rounds — one pre-Series A round from a small investor and a Series A round from the current investors.”

Today, Voila has a 40-person team, which includes former Alibaba, Bytedcance, and Rent the Runway employees across both the U.S. and China. The company is now in search of a CMO.

Shang, who’s currently on the East Coast, is preparing to move out to California to be in a better time zone for communicating with staff in China.

“I haven’t been able to sleep before 3 AM every day. I can’t do that anymore,” he notes.

With the additional funds, Voila plans to grow its user base and spend more of its resources on its database.

“That’s really the most difficult task, and I think that’s the key to our success,” Shang says.

With startups getting into nuclear technology, it’s no surprise to see more fund-raising happening. Now, Kyoto Fusioneering, a fusion energy startup based out of Japan but increasingly expanding abroad, has raised 1.33 billion yen (US$ 11.7 million) in its latest round of funding. The company has now raised 1.67 billion yen (US$ 14.7 million) to date.

In 2020 the U.K. government-backed STEP, a prototype reactor, aiming to have it operating by 2040, and Kyoto Fusioneering has been awarded several contracts to support its development. This is going to be key to KF’s future.

The series B funding round was supported by existing investors, Coral Capital Co. Also participating was Daiwa Corporate Investment, DBJ Capital, JAFCO Group, JGC MIRAI Innovation Fund and JIC Venture Growth Investments.

KF has also secured an 800 million yen ($7 million) debt financing from Bank of Kyoto, Japan Bank for International Cooperation, Japan Finance Corporation, Sumitomo Mitsui Banking Corporation, and MUFG Bank.

The funds will be used to accelerate its research and expand the business, developing its plant engineering technologies for plasma heating (gyrotrons) and heat extraction (blankets). These technologies are needed in the development of fusion reactor projects.

At the moment a group of nations are supporting the international ITER project (the European Union, Japan, the United States, Russia, Korea, India, the UK, and China), a technology test reactor which will be first operated later this decade.
O
thers, such as the U.S. and China, are pursuing their own domestic programs. The Japanese government also has a number of initiative sin the fusion space.

James Riney, Founding Partner & CEO of Coral Capital, said: “Climate change is an existential threat to humanity, and a fusion energy future, if achieved, could be the silver bullet that literally saves the world.. While many startups talk about how they want to change the world, this company is actually doing it.”

Nuclear fusion promises a lot but to date has not delivered a great deal, but if someone gets it right, it has the potential to solve much of world’s energy and environmental problems, given it would mean a virtual unlimited fuel resource, and clean energy with no carbon emissions.

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

This Monday show actually felt a bit old-school, in that the weekend controversy in tech has spilled over into the working morning, meaning that we need to talk about it. But first, markets:

• After the somewhat punishing start to last week, today’s trading is somewhat more staid. Global equities are moving, but nothing suicidal, and cryptos are off a bit in the last 24 hours, but up in the last seven days. Naturally, given what has happened in recent trading sessions, all that could change in a moment but at least we’re starting in un-choppy waters.
• The Joe Rogan furor continued. After several musicians decided to take their music off the service in protest of Spotify’s decision to pay for material that those artists viewed as undercutting public health, Spotify made some of its rules public and said that it will append COVID-19 notes to podcasts that discuss the pandemic. We talk about why.
• In startup-land, FTX has raised another huge round, TCV is putting more late-stage money into early-stage rounds, and Bamboo raised.
• Closing out, changes are afoot in China’s venture capital market.

So yes, there’s going to be a lot of Twitter drama this week. But don’t worry! You can compensate for that by hating on people posting Wordle scores, as that appears to be the latest way to lose friends online.

Tesla is selling a new accessory: a microphone for in-car karaoke. The TeslaMic is only available in China for the time being. The company introduced it amid the rollout of a Chinese New Year software update, which adds a karaoke platform called Leishi KTV to infotainment systems.

The microphone automatically pairs with the infotainment system, according to Tesla. The TeslaMic comes in a pack of two, so it could come in handy if you ever feel like parking somewhere with a date and belting out some duets. The pack costs around $188 but the Tesla store page is failing to load for many would-be crooners.

A Weibo post (which has been mirrored onto YouTube) shows the TeslaMic and karaoke system in action. As Elektrek notes, by adopting the Leishi KTV interface and catalog, Tesla is building on a “Caraoke” feature it introduced in 2019, which had a more limited selection of tracks.

It remains to be seen whether Tesla will sell the TeslaMic outside of China, though maybe you’ll be able to buy it with Dogecoin if it ever comes to the US. In the meantime, there’s an official Carpool Karaoke microphone that you can connect to your car’s audio system (though you’ll need to provide your own backing tracks and a display with lyrics).

Editor’s note: This article originally appeared on Engadget.

As we have started to see the light at the end of the Covid-19 tunnel, food delivery has shaped up to continue to be a major business. In England, for example, some 76% of people order at least one takeaway a week, whereas it was 60% pre-pandemic. Now, a startup called Deliverect that has built a platform to integrate the many moving parts that go into ordering and delivery for the average restaurant is announcing a big round of funding to pursue the opportunity. The startup has raised $150 million, a Series D round of funding that values the company at over $1.4 billion.

Coatue Management and Alkeon Capital Management are leading the round, with OMERS Ventures, DST Global, Redpoint Ventures, Newion and Smartfin also participating. The round comes less than a year after its previous round — a $65 million Series C that it raised last April.

It’s the first time that Deliverect is disclosing its valuation but the company has grown at a pretty torrid rate since that last round. It now has its software in use in 20,000 locations across 40 markets, with the number of locations doubling in less than a year. It has also tripled its year-on-year growth (and CEO Zhong Xu, who co-founded the company with Jan Hollez (CTO), Jelte Vrijhoef (CIO) and Jerome Laredo (CRO) said in an interview that in fact the valuation has also roughly tripled since then). It’s fast heading to processing some 100 million orders globally, he added.

The company plans to use the funding to hire more people, and to build out more functionality on its platform, including an app store to make it easier to integrate more companies as and when they are used by one of their customers. Today it’s biggest market is Europe, but it’s growing the fastest in North America, so it will also be investing to continue expanding there. (Xu actually called me from a plane about to take off to New York.)

One thing that Deliverect sees is that demand for its services is definitely not slowing down. 

“We are preparing for the age after Covid,” Xu said. “We are preparing to scale to meet all of the digital opportunities in the food hospitality industry.”

The business started in 2018 with serving independent restaurants — born, as we recounted previously, in Ghent, Belgium, out of Xu’s experience with his father, who had started a business selling point of sale systems to Chinese restaurants after immigrating to the country from China; Xu saw the fragmentation in the business and struck out on his own to fix that gap.

In the years since, Deliverect has moved into also work with large chains like Pret A Manger, Taco Bell and many others. Today Deliverect’s business is split roughly 50-50 between the two categories.

In either case, the challenge is the same: restaurants and others in the food industry typically work with a number of suppliers and need better ways to organize that into a single platform.

For restaurants, it might be several ordering and delivery systems that come into a kitchen that send in orders to be filled.

For delivery services, it might be a number of restaurants that it needs to organize for drivers.

Consumer packaged goods companies, a newer category of customers for Deliverect (Unilever is one such customer today), might be working directly with grocery delivery companies to supply them and thus may need their own platforms to manage how much, where and when to send of a specific product.

The opportunity that the company has addressed is that while a number of aggregating platforms have emerged for other parts of the hospitality industry — Booking.com, for example, for travel — restaurants and food in general had yet to be addressed.

“Food is the last frontier,” Xu said. “If there were no pandemic things would have moved quite slowly because the infrastructure for a restaurant is very fragmented. We’re allowing for a new age of digital solutions and we are building a new system.”

Pret A Manger is an apt example of how Deliverect is expanding its business with customers: initially helping with deliveries, it is now also powering the company’s order management in store, too.

The fact that the pandemic has pushed along the growth of Deliverect in the market has also worked in the reverse, it seems.

Hollez recounted how one restaurant was so grateful for getting through the pandemic, crediting Deliverect for its success in handling orders for delivery, that the proprietor bought the company’s team dinner one night. “This is why we do it,” he said.

Deliverect says that longer term, it might potentially consider an IPO, but that is not something on the cards at the moment. It does see an opportunity to make acquisitions selectively to add more tech and talent into the mix.

One area where it’s less concerned is in the area of competition, say from a point of sale provider who might want to own the bigger experience. Xu describes Deliverect as a “Switzerland” that plays nice with everyone, but doesn’t compete directly with anyone.

“Over the past two years we’ve transformed our business to bring Pret to more people, which includes significantly growing our online delivery platforms and reshaping how customers order with us,” said Sarah Venning, CDO and CIO of Pret A Manger, in a statement. “With the help of Deliverect, we’ve enabled significant growth for our delivery partner business and introduced a system that our shop teams love and find easy-to-use, helping us to serve more customers digitally than ever before.”

Since the Ant Group IPO was canceled by central authorities, China’s government has been on a regulatory tear.

You know the broad outlines: After a lengthy period of growth, capital investment and aggressive business practices, China’s central government spent much of 2021 reining in its technology sector. While some of the actions were reasonable from an antitrust perspective, many of the changes to the country’s tech sector appeared more punitive toward entities viewed as too powerful.

The for-profit edtech sector got hit. Didi was effectively executed after it had the audacity to go public in the United States. Video game time for kids was cut, gaming titles left unapproved, algorithms put under the microscope, and more. The business climate for building tech companies under the new “Common Prosperity” push in the country appeared to take a dramatic turn for the worse.

As a result of the changes, the value of many well-known Chinese technology companies suffered.

Although the exit window for China-built tech companies is seemingly constricting to only domestic exchanges, and the space made available in the economy for tech companies to build and innovate apparently shrinking, venture capital activity was strong last year in the country.

We were surprised to see it as 2021 entered its final months, just as we were surprised when we got the full-year numbers.

But there was more. ByteDance recently “dissolved its strategic investment team, sending worrying messages to other internet giants that have expanded aggressively by investing in other companies,” TechCrunch reported. Why did TikTok’s parent company do so? We explained:

At the beginning of this year, ByteDance reviewed its “businesses’ needs” and decided to “reduce investments in areas that are not key business focuses,” a company spokesperson said in a statement. …

The “restructuring” still stirred up a wave of panic in the industry. China’s cyberspace regulator has drafted new guidelines that will require its “internet behemoths” to get its approval before undertaking any investments or fundraisings, Reuters reported. Some Chinese media outlets reported similar drafted rules.

Hot damn.

Obviously, we’re still sorting out precisely what is going on, but it appears that the ability of large Chinese tech companies to deploy capital at will into smaller companies is rapidly coming to a close.

From this juncture, our question is simple: Will government regulations slowing Big Tech investments into smaller companies in China shake up its larger venture capital market? Let’s talk about it.

Tracking corporate venture capital investment in China

The answer to our question is yes, but perhaps not lethally.

Tracking just how important corporate venture capital is to the Chinese VC scene is an interesting problem to crack. One way to view the data is to look at the list of most active investors in private Chinese tech companies in the last year.

Consumer spending on mobile apps reached $170 billion in 2021, according to App Annie’s newly released “State of Mobile 2022″ report, out today, which offers a comprehensive look at the app economy across iOS, Google Play and third-party Android app stores in China. That figure is up 19% year-over-year, which is down just one percentage point from the growth rate the firm reported in its prior annual report. Growth in app downloads, however, dipped a bit more. Though today’s consumers are installing more apps than ever — 230 billion were downloaded in 2021, setting another record — the growth rate itself is slowing.

In January 2021, App Annie reported year-over-year download growth of 7% during 2021, which has now dropped to just 5% in 2021.

Download growth today is being driven largely by emerging markets like India, as well as Pakistan, Peru, the Philippines, Vietnam, Indonesia and Egypt.

Image Credits: App Annie

What’s also clear is that consumers are spending more time in apps — even topping the time they spend watching TV in some cases.

The report noted the average American watches 3.1 hours of TV per day, for example, but over the course of the past year, they spent 4.1 hours on their mobile device. And they’re not even the world’s heaviest mobile users. In markets like Brazil, Indonesia and South Korea, users surpassed 5 hours per day in mobile apps in 2021.

Across the top 10 markets analyzed in the study, the average time spent in apps topped 4 hours, 48 minutes in 2021 — up 30% from 2019. This included the averages from Brazil, Indonesia, South Korea, Mexico, India, Japan, Turkey, Singapore, Canada, the U.S., Russia, the U.K., Australia, Argentina, France, Germany and China combined.

Much of this time was spent in social, photo and video apps, which accounted for 7 out of every 10 minutes spent on mobile in the past year. These categories, plus entertainment apps, also appeal to Gen Z users, particularly in the U.S.

Here in the U.S., Gen Z’s most-used apps included Instagram, TikTok, Snapchat and Netflix. Millennials meanwhile preferred Facebook, Messenger, Amazon and WhatsApp. Gen X, which has now been lumped into the Baby Boomer demographic (ack!), used The Weather Channel, Amazon Alexa, NewsBreak and Ring.

Image Credits: App Annie

This increased time spent in apps has had a direct impact on consumer spending. In the U.S., the COVID-19 pandemic’s lingering effects have forced users to shop, work, learn, game and entertain themselves from home over the past year. This led to “phenomenal” growth in consumer spending, App Annie said, as the market added $43 billion in 2021, or $10.4 billion more than 2020, equating to 30% year-over-year growth — higher than the global average.

At the high end of consumer spending, there were 233 apps and games that pulled in more than $100 million in 2021, and 13 titles that generated over $1 billion. This is up 20% from 2020, when there were then 193 apps and games topping the $100 million mark, and only 8 titles making over $1 billion annually.

Image Credits: App Annie

Outside the consumer spending that included paid apps, subscriptions and in-app purchases, the broader mobile app market topped $295 billion in 2021, up 23% year-over-year, despite fears from marketers over Apple’s privacy changes and IDFA crackdown. In 2022, the market is expected to grow to $350 billion, aided by big events including the Beijing Olympics and the U.S. mid-terms.

Image Credits: App Annie

New mobile app releases also grew in 2021, as publishers launched 2 million new apps and games, bringing the total number of apps and games ever released across the App Store and Google Play to 21+ million. Of course, older apps and games have since been removed over the years either by the publishers themselves or the app stores during cleanups. Currently, there are 5.4 million “live” apps and games available on the app stores, 1.8 million of which are on iOS and 3.6 million on Google Play.

Google Play also accounted for 77% of all the new releases last year, while games made up 15% of all releases across both stores, the report noted.

Image Credits: App Annie

App Annie’s full report took a deep dive into individual app categories, as well, including gaming, finance, retail, video streaming, food & drink, health & fitness, social, travel, dating and more.

Among the highlights from its findings:

• Gaming: An additional $16 billion in gaming consumer spend was added in 2021, bringing the total spend to $116 billion.
• Finance: Finance app downloads in India topped 1 billion in 2021, driving the category’s 28% year-over-year increase in downloads to 5.9 billion worldwide.
• Shopping: Time in shopping apps reached over 100 billion hours spent globally in 2021, up 18% year-over-year. Countries with the fastest growth include Indonesia, Singapore and Brazil (52%, 46% and 45%, respectively).
• Video Streaming: Total hours spent watching video streaming apps grew 16% worldwide since pre-pandemic levels. But China saw declines as users shifted to short-form apps TikTok and Kwai. Netflix is on track to top 1 million downloads in more than 60 countries in 2022.
• Food & Drink: Sessions in food & drink apps reached 62 billion in 2021. Several regions drove growth in Q4, including the U.S. (42% year-over-year), Russia (154% YoY), Turkey (75% YoY) and Indonesia (over 9x growth).
• Health & Fitness: Worldwide downloads of health & fitness apps surpassed pre-COVID levels in 2021, despite a slight softening from a pandemic-induced high in 2020 in most countries. The top five meditation apps worldwide saw 27% year-over-year growth in consumer spending.
• Social: Time spent in the top 25 livestreaming apps outpaced the social market year-over-year by a factor of 9 — year-over-year growth of 40% compared to all social apps at 5%. Global spend in the top 25 livestreaming apps in 2021 grew 6.5x from 2018 and 55% year-over-year. TikTok saw year-over-year growth rates as high as 75%.
• Travel: Downloads of travel apps rebounded by 20% in H2 driven by sharp increases from July-December 2021. H2 downloads hit 1.95 billion globally, nearing pre-pandemic levels of 2.08 billion H2 2019.
• Dating: Worldwide consumer spending on dating apps topped $4 billion in 2021, a 95% increase since 2018. Growth was primarily driven by the U.S., Japan, China and the U.K. Tinder led the market with $1.35 billion in worldwide consumer spending in 2021.

The report also listed the top apps and games worldwide and by individual countries by both downloads and consumer spending. Globally, the top five most downloaded apps in 2021 were Google Meet, Instagram, TikTok, Microsoft Teams and InShot. By consumer spend, the list was YouTube, Tinder, Tencent Video, Disney+ and TikTok.

Image Credits: App Annie

Top games by download included Project Makeover, acquapark.io, WormsZone.io, DOP 2: Delete One Part and Bridge Race. By spending, the list was led by Honour of Kings, Fantasy Westward Journey, Candy Crush Saga, Homescapes and Empires & Puzzles.

Image Credits: App Annie

The full report is here.

Economies of scale are an essential cornerstone for on-demand companies, and to that end one of the hopefuls in the space has raised a big round to grow its business. Bolt — the startup and app of the same name that operates on-demand ride hailing, shared cars and scooters; and restaurant and grocery delivery — has raised €628 million ($709 million at current rates), at a valuation of €7.4 billion ($8.4 billion). It will be using the funds to continue expanding to new geographies and to bring more consumers and partners to its “super app”; and newer business lines, such as its 15-minute grocery delivery option Bolt Market, will be building out ‘dark stores’ in more cities to expand the service beyond the 10 where its active today.

“All of our business units are growing,” founder and CEO Markus Villig said in an interview this week. Villig said that even its most mature business, ride hailing, “is seeing double digit growth,” while the newer businesses, being smaller, are expanding even faster. “The new trend of last year is that private cars are a bad thing and increasingly people want to use other forms of mobility.” He added that Bolt is working on partnering with more city governments to build out its services as part of their updated transportation strategies.

Sequoia Capital, Fidelity Management and Research Company LLC co-led the round with Whale Rock, Owl Rock (a division of Blue Owl), D1, G Squared, Tekne, Ghisallo, and other unnamed backers also participating.

The funding news caps off an eventful few months for the company, which had raised €600 million at a valuation of over €4 billion only four months earlier in a Series E also led by Sequoia. Bolt now has more than 100 million customers in 45 countries and 400+ cities using its services. As a measure of its growth, in August, when the company announced that previous round, it had 75 million customers.

Bolt’s growth is also notable considering the difficulties that some of its competitors have been facing in the wake of Covid: first the pandemic had a major chilling effect on people being willing to go into a vehicle where they have to sit in a closed-in space with another person (the driver). That situation was then compounded when things picked up again but so quickly that many services are suffering from a shortage of drivers, not passengers.

Villig admitted that Bolt, too, faced some “short-term fluctuations” in demand when the lockdowns first started. But it has made attracting and keeping drivers a major focus by paying out better commissions than its rivals (typically, Villig said, it will pay between 10% and 20% better than competitors).

“There is a massive lack of supply on these platforms, so we have focused on taking the most partner-friendly lowest commission,” he said. That has paid off well for Bolt, which has now seen monthly revenues more than double compared to sales pre-Covid, Villig said.

Bolt was founded eight years ago in Tallinn, Estonia (originally as Taxify), with a mission to bring ride hailing to emerging markets and countries where others like Uber had yet to gain a strong foothold, a strategy that it used to expand modestly across regions like Central and Eastern Europe and Africa, in the process attracting investors like China’s Didi — itself having built a massive business in its own home emerging market. (Didi quietly divested its stake in Bolt last year.)

Over time, the focus has remained on Europe and Africa, but Bolt found that a lot of its learnings from those first launches could just as easily be applied in more developed countries, with more lucrative payoffs. 

“We started off in Eastern Europe and Africa because those markets had a bigger need. They had lower car ownership, higher unemployment [making for a market with many freelance drivers], It made sense,” said Villig. “But now we’ve learned that this model works everywhere, and it’s actually easier to grow in Western Europe because they are developed markets. We found if you can make this model work in really cheap, frugal markets, then once you go to London or Stockholm, it’s materially easier. And the unit economcis are definitely better because the prices are higher.” It’s not a perfect system, though. Working in developed markets, he said, the trade-off is “more regulations,” and the limits that come with those.

Meanwhile, Bolt’s diversification approach, moving beyond cars to scooters and couriers, and now also food delivery services, is also a part of its scaling strategy. Offering multiple services within a single app not only helps Bolt bring in new customers and cross sell to them, but it does so with essentially zero marketing costs by putting all of the options and cross-promotions within a single app, said Villig.

“Two elements that set us apart and are turning in our favor are the synergies and the shared costs between these verticals,” he said. Most of Bolt’s competitors are generally focused on one thing in each app, Villig continued, “and we are not,” so it’s easier and less expensive for Bolt to build more services off the back of each other. “Now we are passing on those savings for customers.”