PayU, the fintech business controlled by Prosus with operations in 50+ countries — it’s been described as the PayPal of emerging markets — announced a double-deal today to expand its presence in Latin America. The company has acquired Ding, a platform that lets people top up mobile phone credits for others remotely; and it has led a $46 million investment in to Treinta, a financial “superapp” aimed at small businesses. Ding has 300,000 monthly active users transferring about $10 million per month; and Y Combinator alum Treinta, which launched only 18 months ago, has 4 million customers.

Notably, both are based in Colombia but provide services across the Latin America region (and in the case of Ding, globally). For PayU and Prosus, the deals are significant for two main reasons:

First, they are helping Prosus tap into what continues to be a fast-growing market. The company quotes figures from the U.S. Department of Commerce that estimate Colombia alone to have the fifth largest e-commerce market in Latin America, which as a region is projected to reach 260.2 million digital shoppers by the end of 2022, overtaking the U.S., with $167.81 billion in purchases.

Second, the move speaks to how PayU and Prosus are looking to add more diversification to its investment base. It’s a development that’s interesting considering its proximity to Prosus rethinking investments in other regions, specifically the currently-pariah state of Russia, including a $770 million write-down in March of its investment in social network VK.

“Our recent activity in Colombia reflects PayU‘s desire to provide seamless online and cross-border transactions for merchants and consumers,” said Mario Shiliashki, Global CEO of PayU‘s payments division, in a statement. “These are just two examples of how we are providing useful products and services to millions of people in their daily lives. PayU has helped to facilitate the evolution of online payments in Colombia since 2011 and we are proud to be extending our services to promote financial inclusion for SMEs in both Colombia and globally.”

Digging into the individual deals, Ding is the operating name of Tecnipagos, which itself was a spinoff from CredibanCo, a payment services provider in the country that has been around for 50 years. It looks like Ding had never had any outside funding prior to getting spun out and scooped up.

The financial terms of the Ding acquisition — was first reported earlier this month, before it closed — are not being made public, but they may be in future financial statements from Prosus. Prosus itself was listed in 2019 by South African multimedia conglomerate Naspers as a separate, public company that contained all of the company’s tech businesses, which includes PayU and other e-commerce and fintech investments, as well as a significant holding in China’s Tencent. Prosus has a current market cap of $152 billion — a figure largely boosted by that Tencent stake.

For some context on the size of what PayU is acquiring, Ding claims to have some 300,000 monthly active users and makes 30,000 transfers daily totaling some $10 million processed each month.

PayU describes Ding as a payments app, but its focus has squarely up to now been transfers for a single purpose: topping up credit for mobile phones. This in itself is a significant business, and often one that goes hand-in-hand with more general remittance services. Mobile phone credits are used for more than just making calls in emerging markets (the phones become a proxy for bank accounts in many developing markets where traditional banking services are expensive or underdeveloped). Oftentimes money that is sent from friends or family comes in the form of mobile credits. This paves the way for PayU to develop more remittance services around Ding, and potentially extend its existing remittance operations to Ding’s customer base.

The Treinta investment, meanwhile, is a $46 million round along with participation also from LionTree Partners, Ethos VC, TEN13, and other undisclosed investors. Treinta had previously participated in a Y Combinator batch, and backers of the company in its $14.3 million in seed round in 2021 included YC, Levels Up Ventures, Outbound Ventures, Luxor Capital, Mango.vc, Goodwater Capital, Soma Capital, First Check Venture, Houston Angel Network, FJ Labs, Commerce Ventures, Rhombuz Ventures, Acacia Venture Partners and Evening Fund.

Treinta — which means “thirty” in Spanish — is not disclosing its valuation, and PayU also declined to comment on the figure.

The startup has only been around for 18 months and it says that it already has some 4 million SMB customers in 18 countries.

Treinta itself is tapping two trends that are big in fintech at the moment. The first involves a wave of fintech businesses building “all in one” platforms, where customers might come for one specific service — financing, or invoicing, or current account services, for example — and are being upsold to related offerings, which themselves are build around a wider dataset that the fintech is building about that particular customer. These services often bring in technology behind the scenes from third parties, using APIs to embed those white-label products and brand them as their own.

The second is Treinta’s focus on small businesses — a cornerstone of the global economy, yet one that has been traditionally underserved by technology. Treinta estimates that there are some 50 million small businesses (it describes them as “microenterprises”) in Latin America, with some 90% of them yet to adopt any kind of tech at all to manage their finances, so it’s a large potential market.

PayU, as a provider and builder of fintech solutions, will be able to leverage Treinta as a channel for getting its own customer-facing tech deeper into the market in Colombia and the rest of Latin America, but Treinta will also become another retail channel for PayU’s under-the-hood technology.

“By acquiring and investing in businesses like Ding and Treinta, both global and local SMEs are able to expand their business within LatAm, providing the best payments service with the consumer experience first in mind,” said Francisco León, PayU‘s CEO for Latin America, in a statement. “We are very excited to expand the reach of Treinta and Ding’s innovative solutions, particularly as these services are fully aligned with our strategic goal of creating a world without financial borders.”

While a lot of PayU’s activity has been in Asia and emerging markets in Europe, Latin America will be a big focus in coming months it seems. A spokesperson tells us that PayU plans to make further investments in the region this year.

The medium is the message more than ever these days, and brands are faced with a challenge — but also opportunity — to capture what consumers think about them and their products if they can harness and better understand those messages, via whichever medium is being used to deliver them. Today, a company called BlueOcean that has built an artificial intelligence-powered platform that it says can produce those insights is announcing $30 million in funding, money that it will be using to continue expanding its technology on the heels of rapid growth.

Insight Partners led the round, with FJ Labs also participating. Valuation is not being disclosed.

Digital life as it plays out these days has created a perfect storm (heh) for BlueOcean. We spend more time online than ever before, and the number of places where we might encounter a product or service has grown along with that: social media feeds are noisy with ads, content that feels like ads, lots of opinions; we do most of our news, information and entertainment sourcing online; we shop there, too; and many of us also spend our days working in cyberspace as well.

That’s a lot of real estate where a brand (or a brand’s competitors) might potentially appear, either intentionally or inadvertently, and more likely than not in a form that is outside of that brand’s control.

“Fragmentation is a huge driver,” Grant McDougall, the CEO who co-founded the company with president Liza Nebel, said in an interview. “There are silos all over the business and what we do sits over the top of that, to provide a common language to understand and talk to, for example, both to the CFO about revenue team as well as loyalty teams about messaging.”

At the same time, the tech industry that has built all of those online experiences has also built an enormous amount of tools to better parse what is going on in that universe. AI is playing a huge role in that navigation game: it’s too much for a single human, or even a large team of humans, to parse; and so a company like BlueOcean building tech to do some of that work for marketing professionals and others to have better data to work with becomes very valuable.

That has played out as a very significant evolution for the startup.

We last covered BlueOcean in 2020 when it was focused on a more narrow concept of digital brand identity: a company provided its website and a list of competitors, and one week later, for a price of $17,000, BlueOcean provided customers with brand audits that included lists of actionable items to improve or completely change. (As a point of contrast, typically brand audits for large brands can cost millions of dollars and typically do not come with specific pointers for improvement.)

Fast forward to today, and the company has expanded the scope of what it does for customers, and its overall engagement: its AI algorithms and big-data ingestion engine are now focused on providing continuous feedback to its customers, which subscribe to the service at fees starting at $100,000 per year. They use BlueOcean not just to measure their overall brand recognition in the market, but to track how specific products are performing; which launch strategies are working, and which are not; and the impact of different campaigns in different markets in real time so that they can change and respond more quickly.

“Lots has changed,” said McDougall. “We’re an AI powered brand intelligence platform. Access to insights and what competitors are doing are more relevant today than it’s ever been. What we do is collect information about brands out in public and help them understand performance relative to competitors, to help them take action to improve their brands to get market share.”

Interestingly, just as the Covid-19 pandemic has been a huge fillip to e-commerce and more generally online consumption of everything, so too has it played a strong role in the growth of BlueOcean and the approach that it takes. In the world of fast-paced and constantly changing and refreshed information, big-picture insights can be more meaningful than no picture at all, or one delayed for the sake of more detail.

“Covid has surfaced that speed is more important than accuracy,” noted Nebel. “We have data [to shape better] inclinations right now. It’s about making changes to capture opportunity.”

That concept has also clicked with its investors.

“Having invested in hundreds of the world’s most well-known brands, we know that having accurate and fast data is vital to brand health. We have extreme faith in BlueOcean and we’re excited to bring them into our investment portfolio,” said Fabrice Grinda, founding partner of FJ Labs, in a statement.

BlueOcean still also provides all-important competitive analysis but builds those lists of other companies and the data produced about them in conjunction with its customers, based in part on where the customer sees itself and would like to see itself; and also where it is as a brand in the real world.

It has also expanded its customer list: it now works with 84 brands, which may not sound like much except that these are some of the biggest companies in the world — they include Microsoft, Google, Amazon, Diageo, Cisco, Bloomingdales and Juniper Networks (and others that it cannot name) — and collectively represent what BlueOcean describes as $18 trillion in value and more than 6,000 brands — a list investors believe is poised to grow in line with how the internet itself is growing.

“After leading BlueOcean’s Series A round, we are proud to also lead their Series B to help them scale and serve even more brands,” said Whitney Bouck, MD at Insight Partners, in a statement. “As a former CMO myself, I know that marketing is constantly challenged to provide true ROI on brand marketing. BlueOcean gives marketing leaders quantifiable and actionable insights on brand performance for the first time, which we know is game-changing.”

E-commerce is booming, but it’s become increasingly apparent over the years that the businesses that are able to capitalize on that trend — and contribute to that growth — are those able to grasp the right technology to navigate the space. Today, Salsify, one of the startups building e-commerce solutions to that end, is announcing a big round of $200 million, a sum that speaks both to the demand in the market, and its success to date.

“It’s been very busy,” CEO and co-founder Jason Purcell told TechCrunch in an interview. “The thing that catalyzed us in first place was the idea that multichannel commerce would become big, and in the last two years Covid has made that trend abundantly clear. We have doubled in size.”

Salsify’s platform is aimed at retailers, brands, and the various partners they work with to tap into centralised inventory and product information, data that can in turn be used to power more unified experiences wherever those products are sold. (Its favored term to describe this is the “digital shelf”, a reference point I think to the many companies it works with and their huge legacy businesses selling CPG goods on physical shelves.)

In 2021, ARR went up to $110 million and the company now has 1,200 customers, up from 800 when I last spoke with it in 2020. The list includes huge names like Coca-Cola, Libbey, KraftHeinz, Columbia and Mars.

This is a Series F and it values Salsify (named after the widely spreading wildflower) at $2 billion. That is a notable jump since the company didn’t disclose a number when it raised its Series E, a $155 million round in 2020 (PitchBook however puts it at $805 million, and before at $308 million in 2018). This latest round is being led by TPG, with Permira’s Growth Opportunities Fund, Neuberger Berman Funds, and Cap Table Coalition also participating. It has now raised more than $450 million.

In a venture market that is very active for e-commerce tech — just earlier today, another startup startup, UK’s Moot, that is building tech to help brands manage commerce across multiple platforms — announced $18 million in funding; last week another company in a similar space, Productsup, announced $70 million in funding — this round and valuation make Salsify one of the biggest contenders in this space.

And likely it is one attracting some attention from even bigger companies eyeing consolidation, although for now Salsify is focused on being the consolidator itself. Last year, US-based (HQ in Boston) Salsify acquired SKUvantage and Alkemics respectively to expand into Australia and France.

There have been dozens, probably hundreds, of tech companies built on the concept of arming the non-Amazons of this world with tools that help them compete with, and leverage, Amazon better. Salsify’s approach has been to tackle the problem as “experience management” (which it abbreviates to XM and attaches to each of its different product lines), and to look at it in the big picture, in terms of how it applies not just to brands but also retailers and the different companies that work in that complex supply chain, which all need information to do their jobs, but also potentially can provide critical insights (eg around inventory) to improve how the bigger process works.

That platform and wider integration functionality is also something that speaks to how bigger brands have seen that they need to work in modern times — gone are the days where their legacy supplier relationships and physical sales channels are enough in competition with newly emerging D2C competitors that leverage new platforms like social media apps and influencers to connect with new consumers.

It’s also why investors have come running to the company. Purcell described this latest round as “opportunistic,” in that the company still had capital from its last round in the bank but had been getting approached by investors looking to work with the company.

“As consumer behavior shifts increasingly towards digital and omnichannel, there has been an evolution in the way that brands think about their technology strategy and how they evolve their tech stack,” said Arun Agarwal, MD at TPG, in a statement. “Through its integrated platform, Salsify is optimizing the shopping experience for brands, retailers, and distributors, powering consumer interactions and enabling consistency, simplicity, and agility. TPG has a long track record of backing leading SaaS companies, and we look forward to partnering with Jason and his team to drive Salsify’s growth and market leadership further.”

E-commerce today is played out wherever a consumer sees something and wants it — be it on a company’s site or app, a social media feed, a marketplace, a search, or an advert. Today a startup called Moot that’s helping businesses and brands sell through all those channels in a unified way is announcing $18 million in a round led by Espresso Capital to expand its business both organically and via M&A.

On the first point, Moot is planning on doubling down on building more tech, including enhanced AI capabilities to help automate and analyze more of its customers’ activities. On the second point, Moot said it already has two deals underway.

With the boost that e-commerce has had in the last couple of years, the company — based out of Staffordshire in the Midlands of England — has been on a growth tear. It’s on track to make £100 million ($130 million) in ARR by the end of this year, after growing 300% year-on-year in 2021, with customers including fashion retailers like Timberland and Asos, media brands like House Beautiful, and dozens of others.

Moot got its start out of first-hand experience about the shortcomings of e-commerce solutions out in the market today. Nick Moutter, the founder and CEO, was building out an online housewares brand called Olivia’s, initially using Shopify to run it.

As the business grew, however, he found that the tech it was using to sell across different channels were too siloed, and thus made certain functions like inventory management and more unified logistics very clumsy. He and his team couldn’t find anything in the market that fit their needs — a platform that let the company manage selling across different channels in a unified way — and so they built it.

Over time, they were finding others approaching them to pay to use the tools, and eventually they decided to spin that business out. And thus Moot was born.

“We realized there was a huge demand in industry,” said Moutter, expecially among companies in “the second stage of growth, where they are hitting the ceiling of Shopify, and looking for more advanced solutions to scale.”

The company today lets a brand set up and sell through a variety of channels, including their own sites and apps, as well as third-party marketplaces, wholesales and more.

The key feature of the service is that there is a central database within the platform that can be updated to reflect activity across all of the different channels. Although e-commerce itself is a very fragmented experience — and so it should be, giving consumers lots of choice in the process — the idea with Moot is that it doesn’t need to be similarly fragmented at the back end.

This is not completely unchartered territory: companies like Shopify and WooCommerce are also building solutions to handle this for companies as they scale and expand; and arguably a wide variety of headless and semi-headless solutions in the market like Commercetools are also addressing this same pain point. But given the size of the e-commerce industry — eMarketer estimates it will be worth $5.5 trillion in 2022 — the e-commerce as a service industry will have room for all of these, and judging by Moot’s growth is likely in need of more.

That will see it bringing on more brands, but also a new wave of other companies that work with brands, such as the roll-up players, which themselves are growing by acquisition but in many cases are bringing in third-party technology to run those acquired brands more efficiently. That is where Moot would fit in.

“Moot is a leader in the fast-growing EaaS space. Their unique platform combining operational capabilities, advanced user experience, and customer acquisition technology is attracting a growing list of tier-1 global clients,” said Will Hutchins, MD of Espresso Capital, in a statement. “The rapid growth in e-commerce presents a terrific opportunity for Moot and we believe the company has the right team and technology platform to become a global EaaS leader, helping their clients provide highly differentiated e-commerce experiences. We’re excited to be partnering with them on this next exciting phase of their growth.”

Aemi founders Hieu Nguyen and Kim Vu

Social commerce sellers can be as small as one person selling products to their followers on social media platforms like Instagram or Facebook. Many don’t have a web storefront and instead rely on private messages to take orders and payments. This might not seem like enough to move significant amounts of product, but in many Southeast Asian markets, social commerce sellers are making up an increasingly large portion of e-commerce. In fact, according to a recent Bain report, social commerce accounted for 65% of Vietnam’s $22 billion online retail economy last year.

Despite their combined retailing power, many social commerce sellers cannot buy in bulk directly from brands. Instead, they rely on wholesale aggregators, but that means they may not be able to trace the provenance of their products, said Aemi co-founder and CEO Kim Vu. 

Aemi was created with CTO Hieu Nguyen to help solve social commerce seller’s supply chain issues. By working with hundreds of social commerce sellers, it is able to buy directly from brands.  Because Aemi works with hundreds of sellers, it has the purchasing power to negotiate lower wholesale prices than individual sellers, while at the same time guaranteeing the provenance of products. 

Currently focused on beauty and wellness, the startup’s ultimate goal is to expand into more verticals and create a suite of backend software that will help sellers manage inventory, ordering and payment. 

The startup has raised $2 million in funding from Alpha JWC Ventures and January Capital, with participation from Venturra Discovery, FEBE Ventures and angel investors. Funding is being used for hiring, especially for product engineers to build software for Aemi’s micro-merchants. 

The social commerce sellers Aemi works with are typically micro-influencers, with follower counts of about 10,000 to 30,000. Vu told TechCrunch one of the reasons she wanted to start Aemi was because she’s a social commerce enthusiast. 

“I love buying on social commerce, Facebook stores, Instagram shops and the like, because I trust the person, so I trust that they have done a really good job at breaking down the products and reviews from a content perspective,” said Vu. At the same time, when she had questions about a product’s authenticity and source, she found that many sellers could not assure the products were genuine because they didn’t have the selling volume to develop a close relationship with brands and instead relied on wholesale aggregators. 

“I see a huge demand from a consumer standpoint, but also from a supply perspective,” said Vu. “Not too much effort has been put into growing supply chain support for this sector.” 

Before founding Aemi, Vu spend six years as a management consultant for Bain, where she specialized in retail. This included working with global brands to grow their distribution in emerging markets. She found that they approached branding and distribution in a very traditional way, missing the growing dominance of social commerce. 

“A lot of effort is being put into high visibility, like physical stores, but people have a growing affinity for buying social commerce, buying items online and getting it delivered to their house,” Vu said. “From a supply chain perspective, not too much has been built in.”

As a result, many social commerce sellers not only have unreliable supply chains but also don’t have the software and marketing support they need to build their businesses. 

Aemi also offers marketing support, which means helping sellers create memorable content. Many have created a niche for themselves recommending certain types of products, like skin care or beauty products, but don’t have the social networking clout to gain brand partnerships. Aemi helps by providing professional product photos, product descriptions and information to sellers. It is also planning to build software, like drag-and-drop storefronts, that will help sellers manage sales and inventory across multiple social media platforms. 

“The people that we are catering towards are what would be classified by brands as long tail distribution,” said Vu, “but they make up the majority of volume on social commerce” in Vietnam. 

Globalization has been one of the biggest trends in e-commerce in the last decade: internet rails facilitate a much wider marketplace of would-be consumers and a selection of items for them to buy; and to meet that demand manufacturing and logistics have also made great geographical leaps. Now, a startup that’s built a platform to help provide financing specifically to businesses working within that supply chain is announcing some financing of its own.

Stenn — which applies big data analytics, taking a few datapoints about a business (the main two being what money it has coming in and going out based on invoices) and matching them up against an algorithm that takes some 1,000 other factors into account to determine its eligibility for a loan of up to $10 million; and on the other side taps a network of institutions and other big lenders to provide the capital for that financing — has raised $50 million in equity funding to expand its business after seeing accelerated growth.

The funding is coming from a single investor, the U.S. private equity firm Centerbridge, and it values Stenn at $900 million, the company said.

Stenn has been around since 2015 and has since then financed some $6 billion in loans from 74 countries, with $1 billion of that loaned out in 2022 alone, with an approach that brings technology to an area that had previously been largely untouched by lenders, said Stenn’s founder and CEO Greg Karpovsky in an interview.

“Accenture estimates that the demand for finance in this business segment is $3.6 trillion and will grow to $6.1 trillion in the next four years,” he said. And yet, “the main source [of funding] for them right now is the traditional banking system. Banks in developed countries are focused on supply chain finance for large countries and banking systems in developing markets are still underdeveloped. So companies in this segment are just left unbanked. No one else is using technology to facilitate financing [for them].”

In the world of fintech, there are a number of companies in the market that cater to the needs of small businesses that need capital, either to bridge them between invoices going out and getting paid; or to finance projects or activities outside of the normal schedule of business that will help them grow in the longer run; or for something else altogether. The loans platforms and neobanks catering to domestic SMBs include Kabbage (now a part of Amex), Finally, Brex, Rho, Juni, NorthOne, Lili, Mercury, Hatch (now rebranded as Nearside), Anna, Tide, Viva Wallet, Open, Novo, MarketInvoice and many others.

However, the gap in the market that Stenn is addressing is not that of the typical SMB, but businesses that specifically are running operations that eventually feed into a bigger, cross-border operations.

These could be international sellers on marketplaces, or a company that supplies those sellers with products or services. What they have in common with each other — and what differentiates them from typical SMBs served by your average fintech providing loans to SMBs — is that they tend to be significantly smaller than large multinationals, but much bigger than your typical SMB, with scope and capital needs to match.

“Domestic SMEs are normally much smaller,” Karpovsky said. “They could be a barbershop.” He said the typical exposure — the amount borrowed — might be in the range of $30,000 to $50,000. For the SMBs that Stenn targets, it uses the World Bank’s definition, which works out to a business having up to $120 million in annual sales. Using what Karpovsky described as “very limited information” — a company’s name and location, plus details of invoices that are in the process of being paid — it loans up to $10 million, with a turnaround of no more than 48 hours between application and approval. Typically he said loans are more in the region of $500,000 to $1 million.

The opportunity gap is simple: it’s bringing this segment of the market — and the larger sums that they are borrowing — the kind of approach that domestic SMBs have been getting for a while now. “The risk management here is very different,” he added.

Those putting up the money for loans include banks like Barclays and HSBC, he said, as well as family offices and other big financial institutions such as insurance companies. And one side note on the topic of where financing is being sourced: Karpovsky is of Russian origin himself, and he said the company has from the start drawn a red line, “a very strict rule,” over taking on any financing partnerships with money with Russian ties. (He left the country after the invasion of Crimea, he said, and so this was “a decision we made many years ago.”)

“We are professionals in KYC and anti-money laundering, so we do due diligence on all our partners,” he added.

In terms of competitors, while those providing loans to SMBs in domestic markets may well potentially look to move into those working internationally — Amex for example has a big enough international profile to possibly consider this — the bigger competitive force might turn out to be some of the marketplaces where these SMBs do a lot of their business already.

Indeed, Alibaba (via Ant Financial and Alipay) was very interested in doing more in international markets before regulators stepped in. Amazon has yet to make large moves here but it might well do so in partnership with other financiers, opening up a window of opportunity for a company like Stenn. Banks themselves seem happy for now to be partners, referring customers to Stenn and acting as lenders on its platform.

Of would-be players in this space, Karpovsky noted that “They are very far, more than 10 years away, from focusing on solving the problem that we are solving now. Their existing clients have more immediate problems, and so right now we are not seeing much competition, and might not for many years.”

It’s an opportunity that investors are also interested in backing.

“We have been impressed with Stenn’s disruptive approach to addressing the challenges of global trade finance supply and believe that Stenn has a highly scalable proposition,” said Jed Hart, co-head of Centerbridge’s European business and senior MD, in a statement. “We are excited to be partnering and supporting Stenn’s growth at an important time in its evolution and during a period of uncertainty in the world.”

To many people, e-commerce is synonymous with shopping on Amazon, but the reality is that a retailer has the option to use a bundle of different channels to sell and market products, and many do. Today, a startup called Productsup, which has built a platform that helps retailers navigate that landscape, is announcing $70 million in funding — a growth round that underscores both the opportunity for building more e-commerce business management tools, but also Productsup’s own traction in the market, where it already counts more than 900 brands among its customers, including the likes of IKEA, Sephora, Beiersdorf, Redbubble, and ALDI.

European firm Bregal Milestone is leading the round for Berlin-based Productsup, with previous backer Nordwind Capital also participating. The company has been around since 2010 and seems to have disclosed less than $24 million raised in that time, according to PitchBook data, while Crunchbase puts the total at $20 million.

Vincent Peters, the CEO (the three co-founders are Johannis Hatt, Kai Seefeldt, and chief innovation officer Marcel Hollerbach), told TechCrunch that the valuation was not being disclosed with this round, but given how little it’s raised in the last 12 years, that is a strong sign that the company has been growing well on its own steam.

Now, the plan is to take on some funding to accelerate that with more investments into R&D and product development, more global deals, and M&A to bring in more functionality and to enter new markets. Peters points out, citing figures from Constellation Research, that its total addressable market for providing e-commerce channel management services is $11.4 billion.

“We’d previously been working on technology only used by a few people, but since then the P2C category has taken flight and we have caused a serious shift within the market. As more people are waking up to our message, it is time to turbo-charge the growth,” Peters said in an emailed interview. “Our strong numbers back us up in this case as they have proven the cadence is picking up, people are talking and customers are adopting our strategy – and we’ve had fantastic results. The early stages were all about proving our technology worked and it was adaptable, and now the market is waking up.”

“With technology advancements like the metaverse on the horizon, these are exciting times for the commerce world,” said Hollerbach in a statement. “We are about to enter a new era of innovation, so it’s our priority to ensure companies are equipped to manage the proliferation of shopping channels and experiences to become the disruptors — not the disrupted.”

The world of e-commerce is definitely complex and fragmented — you need no more proof than the very existence of thousands of e-commerce businesses, not just retailers but platforms for selling and tools to help sell better. But that also means there are a number of companies providing services in the same category as Productsup.

A Google search of the company’s name plus the word competitor says it all. The results include other companies with the tagline “We’re their #1 competitor” linking to rivals: there are so many rivals that they’re gaming how to come at the top of the search results for those doing comparative shopping for e-commerce solutions.

Peters tells me that his company’s approach is different, and better, because it’s moving away from the idea of a point solution and has built a platform to manage different aspects of e-commerce marketing and sales from a single place.

“Most companies in our space offer piecemeal solutions. We’re the only provider who can enable companies to realise their global potential,” he told me in an email. Productsup, he said, enables them to manage this at scale and covering different use cases like feed management, seller and vendor onboarding, product content syndicatio. “We enable companies to implement this globally instead of having to worry about individual channels or regions.” Those regional and channel siloes are indeed one of the biggest pain points in digital commerce in general, and one reason why marketplaces like Amazon gain so much ground, since they are in themselves one-stop shops.

All of that is definitely in keeping with how a lot of SaaS platform players are positioning their solutions today (moving away from point solutions is a big theme, for example, in cybersecurity; and in workplace productivity), but it’s also a crowded space. Companies like Shopware, another German player that also raised a big round earlier this year, and even Salesforce play aggressively in this space.

While the Covid-19 pandemic undoubtedly gave a major boost to the world of e-commerce, what has been left in the wake of that (hopefully!) subsiding — and in any case making some gradual returns away from social distancing and the rest — is “commerce anarchy” in Peters’ words. In other words, even more choices for consumers, and more complexity for those trying to sell to them.

“Firstly, companies are caught in a state of flux, faced with commerce anarchy that the pandemic has accelerated,” he said. “Nowadays, brands, retailers and online platforms don’t know if consumers are on TikTok, Facebook, Instagram or a combination of all three. Additionally, post pandemic, in store shopping has returned, bringing local inventory ads back to the forefront for companies trying to reach shoppers. The number of channels that organisations need to meet customers is growing in both complexity and volume. In order to succeed in this ever-changing landscape, retailers need a solution that can manage these channels seamlessly.” And that will include whatever new platforms are around the corner, as there inevitably are.

Add to this, he said, are other issues that extend beyond the simple process of being able to find and buy something online. “Consumers have become increasingly concerned with issues such as sustainability, ethical processes, and are changing buying patterns to reflect this,” he said. “Brands that cannot cater to this will suffer.”

The company says that ARR grew by over 60% in the last twelve months, gross revenue retention rate of 90% and a net revenue retention rate of 120% — although it’s not disclosing actual figures.

“Our decision to partner with Productsup was based on its long-term, sustainable trajectory as a mission-critical enterprise-grade commerce solution,” said Cyrus Shey, managing partner of Bregal Milestone, in a statement. “Whereas alternative vendors mostly offer point solutions, Productsup uniquely addresses the needs of the evolving commerce market for a single view of all product information value chains and offers seamless, end-to-end product data control – across all global channels and in real-time.”

Fashion rental platforms had a tough time during the pandemic as in-person events evaporated and office workers ditched their smarts to collectively slip into comfy loungewear (aka Zoom pants). But as the pandemic recedes (hopefully!) — and with growing focus on the environmental and social costs of fast fashion, the future for clothes rentals is looking more rosy again.

There are a number of rental models in play — from veteran US giants like Rent the Runway, which buys stock to rent and sells consumers subscription packages based on renting a certain number of pieces per month, to hybrid models that manage some stock themselves but do also allow their users to list and loan out their own designer pieces, to purely p2p ‘rent her wardrobe’ plays.

UK fashion rental startup By Rotation — which sits in the latter p2p category — has sought to stand out in this colorful but rather cluttered field by taking a tech-first and community-focused approach which it likens to building a social network.

Crucially, it doesn’t hold any inventory itself; its truly and purely peer-to-peer, per founder Eshita Kabra, who says the app typically gets badged as the ‘Instagram of fashion rentals’ — or the ‘Airbnb of fashion’.

“There’s very much this social aspect to it — and it’s really about these repeat renters who rent from the same woman, over and over again. So they follow a woman and they end up essentially having twice as big a wardrobe,” she tells TechCrunch. “They’re kind of living the life of someone else, essentially.”

Domestically, By Rotation competes directly with the likes of My Wardrobe HQ and Hurr Collective (as well as a number of UK high street fashion retailers branching out into rentals) — but Kabra, who is the sole founder, is unequivocal in claiming she’s built up the largest p2p fashion rental platform in the UK.

“We’re already the largest fashion rental platform by far when you look at our user count and our listing count vs these two [UK] players who’s actually been around longer than us and have probably a bit more funding than us.

“It’s very interesting that the shortcuts always end up going back to managing or buying and fulfilling rental orders. Whereas for us we really spent time — I would say it’s been a very painstaking journey —  building out the community grassroots in the beginning. And also obviously investing most of our resources into the tech which is to build the social network type platform. And you’ll notice that none of the other rental players in the UK — or again in the world — have built such a social network.

“And I think that’s where we’re doing something with a very, very fresh perspective to sharing of fashion and fashion rental.”

“I kind of see it as being the fashion app which serves more a purpose than just liking and saving,” she adds. “That’s what Instagram and Pinterest are. But there’s no real commercial value to you when you use them — here you can actually make some money, or save money.

“All of the other existing, incumbent fashion rental players in the UK and the US, maybe some in Europe — I know YCloset’s also gone under recently — have all been very much focused on the ecommerce type of approach. It’s very retail heavy, it’s very much a focus on convenience. And access to designer brands. Often the inventory’s very outdated and it’s managed from a central location. We do none of that.”

Since officially launching in October 2019, the app has grown to 200,000 users (mostly women) who are either listing items from their wardrobe for others to rent or vice versa: Splashing cash on the chance to wear and be photographed wearing other women’s clothes for a while. (The app does also include a men’s category but naturally it’s less popular.)

When we speak, Kabra says the site has 25,000 items listed for renting with a total value of £10M+, which can range from a plus size Club M wrap dress (available to rent from £10) to a size 6 full length (and black-as-night) Vampire’s Wife dress (from £75), to a silver Miu Miu clutch bag (from £24), Manolo Blahnik blue satin bridal shoes (from £150) or Tommy Hilfiger plaid trousers (from £4), and plenty more besides.

Renting periods typically have a three day minimum. The platform has some stipulations on what can be listed for rent — generally no high street fashion (unless it’s from an exclusive collection) — but less hard limits than some. Vintage pieces are allowed, for example, so the clothes don’t have to be from the most recent seasons’ fashion collections, which should be better from a sustainability point of view.

Kabra says the top lender on the app — a 49-year-old professional woman and mother who works as the principal of a private school — is routinely mailing out over ten pieces a week — and making in excess of £2,000 a month.

The typical By Rotation user is slightly younger: A fashion conscious female, aged between 25 to late 30s, with a desk job and who is “quite conscious of sustainability but she cares a lot about saving money and having access to designer, quality fashion”, per Kabra, who notes the app gets some Gen Z users renting things like graduation outfits too.

“And that’s why By Rotation is so great because she can access high end designers that she probably wants to tag on Instagram and social media without being able to maybe afford them or wanting to spend £500 on a dress.”

“Our proposition is that you can rent a £500 contemporary branded dress for £50 — or £45 — the same price as Zara, for example. And you can return it back to the person who owns it after wearing it to your friend’s wedding and you get your photo with it and — look — you’ve been sustainable at the same time and you’ve made a new acquaintance on the By Rotation app.”

“There’s just a lot of reasons to rent right. Saving money, making money, making new friends, looking good and saving the planet,” she adds, describing the marketing vibe they’re striving for as intentionally more approachable than aspirational. “It’s cool, it’s fun to be a part of this vibrant and friendly community — it’s less aspirational, it’s just very approachable.”

It follows that the intended By Rotation user is “not a fashion insider or a journalist or an editor or an influencer or a celebrity”, says Kabra, “it’s actually just regular working women, professional women, who have great taste — they’re quite conscious of their fashion consumption and they’re quite pragmatic; they know that if they’ve bought something that they have to share it and cover the cost of that investment”.

So the focus is relatively broad, on renting fashion for more day-to-day needs (work wear, dinner dates, parties etc) — albeit with added likely more glamor/expense than if you always just stuck to your own wardrobe — instead of fixing on catering to extremely high society events.

Community front and center

The individual user who is offering the fashion pieces for rent on By Rotation can get even more play in the app than the designer items themselves because its community-building work extends to producing glossy magazine style mini profiles of some of its top renters (it calls them “rotators” or even “super rotators”) who are opening their ample wardrobes for others’ sartorial scrolling pleasure and/or the chance to float around in designer gear for a few days if you’ll willing/able to splash out.

The intended social network feel extends to having an Instagram-ish feed of photos showing off the wares for rent and/or how their owners (or renters) have styled the pieces.

Users can follow each other on the app — and there are handy ‘by size’ filters for profiles so you’ll know the stranger’s clothes are at least likely to fit you, even if their taste may be a little outré — idea being to turn a vicarious admiration of another woman’s style into actually paying her to borrow that dress you’re thirsting on.

Another feature By Rotation has in the app to pad out the experience — and try to avoid it feeling too nakedly transactional/ecommerce-y — is the ability to create Pinterest-style moodboards. It’s also working on more gamification features to keep users engaged, per Kabra.

The overarching strategy is to dress the app with richer, social content that can draw in visitors who may not feel ready to rent pieces or list their own stuff yet — encouraging them to tap around, be inspired by the fashion they see others sporting and get comfortable with the whole clothes/style sharing concept.

Kabra is emphatic when she speaks about the app, stressing it’s a “proprietary” native app experience — not just a limited website wrapper, which she suggests is what some other fashion rental rivals offer.

“We are the only [fashion rentals] app that’s offered in the UK. Anyone else that has an app or claims they have an app has a website wrapper,” she says. “That’s one of the things that we’ve spent a lot of resources on technology. We’re tech-first, we’re a digital community. We’re also the only pure peer-to-peer for fashion rental. Anyone else who has done fashion rental or is doing fashion rental in a p2p model they’re usually doing it in a hybrid model where they end up managing items where they go on to subscription and full inventory management eventually — which is what we saw in some of the American startups.”

Another distinguishing feature she points to is lender analytics — where By Rotation is providing tools for users to help maximize their renting revenue.

“This is where the data and analytics piece really comes in,” says Kabra. “And there’s some real b2b potential here — not that we’re chasing it right now. But AI is something that we’ve thought about from day one, given our chief analytics officer — also my husband — has been very much our advisor.

“What we’ve really been showing to our lenders, much like a professional creators dashboard on Instagram, you can see how much money you’ve made on the app since you started listing items, you can see the yield on all your listings — so kind of like, almost, your investment calculator. And you can also see the top performing brands for you, the top performing categories, the colors. So basically it’s kind of like a tool to help our top lenders become much more strategic when they go shopping.”

“We’ve actually been given this feedback from some of our top users that they’re just thinking twice whenever they buy a new Zara dress or something form Asos or whatever. They’ve now started moving onto buying more quality pieces and fewer of them, and then they always end up listing them on the app,” she adds, giving a personal example where she has been able to make over £1,000 on a dress she bought on sale for £350.

By Rotation is preparing to size up by launching in the US this year — and today it’s announcing close of a $3M seed round to fund this international expansion — so its profile looks set to rise, even as it will be squaring up to a new set of fashion rental rivals over the pond (including on the p2p side).

The seed round is led by Redrice Ventures with other investors including Closed Loop Partners, True Global, Magnus Rausing, Bill Holroyd CBE, DL, June Angelides MBE, Dinika Mahtani (principal at Cherry VC) and Riccardo Pozzoli.

Commenting on the raise in a statement, Tom March, the founder of Redrice, said: “By Rotation’s p2p focus allows for an obsessive commitment to serving its community. The result is a super loyal family of renters and lenders with the highest standard of user-led quality control. Above all, what truly binds this purpose-driven community is a shared thirst for joy — there is a deficit of hope out there, so time for ‘Rotators’ to spread the joy’.”

International expansion presents both opportunities and risks for a community-focused startup, of course.

While Airbnb — the p2p platform which Kabra says the app is often compared to — began with a bewitching pitch about being able to ‘live like a local’ in exotic foreign cities, the reality of scaling into a global travel juggernaut quickly saw that enticing facade slipping as professional landlords moved in, repurposing housing stock to list en masse and grab higher yield short term lets than they would get renting long term to local people, leading to regulatory blowback and a bunch of good will crushed.

So the risk scaling p2p communities can be bye-bye characterful quirk, hello ‘fake’ profiles and commercial transactions that feel far more clinical. (There was never any sign of the ‘flamenco dancer’ called María who once rented me an Airbnb apartment in Sevilla, for example, only a greying middle aged man in work wear who hastily handed over a set of keys.)

How, then, will By Rotation scale its carefully cultivated and engaged grassroots community of professional women rotating wardrobes of beloved clothes while keeping things, well, real — and not feeling pressured to slip into inventory management and centralized subscriptions as other formerly p2p turned hybrid rental platforms have…

“Growth is definitely very important to us and we’re going to continue doing the network effects piece where our renters are becoming our lenders. And our lenders are becoming super rotators,” responds Kabra. “It’s kind of crazy how much [our top lender is] earning on the app. So we’re going to continue accelerating by all these sort of super users and converting our lenders into renters, renters into lenders. And tapping into their own networks.

“Because we truly believe that anyone who’s been a customer of ours they have the potential to convert other users to become customers. So it’s less so much about performance marketing, which anyone will do anyway, but for us it’s using these network effect type of strategies to promote growth. So things like ambassador programs which we already run where you can see very, very diverse women who are our ambassadors promoting the app.

“Even things like looking at your phone contact book and inviting everyone who’s not on the app already to come join the app because you liked your friend’s outfit last week at a party that you attended together. So really things like that is the way we’re going to be growing and scaling up.”

It also sounds like By Rotation will be taking a targeted approach to trying to crack the US market — likely going after key cities such as New York where it can tap into the same sorts of well dressed, professionally-driven communities of woman it’s already been able to locate in hubs like London to further fire its growth.

“If you look at who’s backing us — [New York-based] Closed Loop Partners, they only back circular business models and obviously [managing partner] Caroline Brown who’s going to be on the board, is ex-DKNY…  and I think you can pretty much guess where we would operate when we do expand to the US first. But yeah, you’re right, there will be a very regional approach — even maybe a citywide approach to begin with but we do think there are some really, really interesting cities over there where people have quite a lot of disposable income… where this would make a lot of sense. Where people are spending quite a lot of money going out for dinner and drinks and they would love to save a bit of money on their outfits.”

“I think what’s really exciting about our completely scalable business model — since we’re not hybrid and we’re not inventory — is the fact that all we really need are local communities and local ambassadors who help kick start the By Rotation community locally,” she adds.

Renting vs buying secondhand

While the fashion rental field is already quite a competitive patchwork, it’s important to consider the secondhand fashion sales market too — which at least indirectly competes for customers who may be weighing up whether they really want to splash £75 just to rent a designer piece for a couple of days vs spending rather less to buy and own a secondhand (albeit, probably not designer) fashion item on Depop or Vinted. Or shell out maybe a little more than £75 to wholly own a secondhand designer piece that’s been listed on a resale platform like Vestiaire Collective.

In short, fashion lovers are spoilt for alternatives to buying new — and all these choices could be dressed up as more sustainable than consuming fast fashion at throwaway volumes.

But Kabra argues that fashion rentals and resale are essentially different and potentially complementary markets. (By Rotation’s app does let renters offer pieces for sale but she says there’s relatively low uptake of that feature.)

“We’ve seen some of our top lenders’ Depop, Vestiaire, eBay and Vinted profiles. And the items they’re listing on these other marketplaces they’re so different to what they’re listing on By Rotation. On By Rotation they are listing items that are new season, that they still love, that they still want to wear and own. It’ll be the new season Réalisation Par or the last season Réalisation Par for example,” she tells us.

“And they don’t want to sell these pieces so we end up having nicer pieces, basically, than all these other resale platforms where, let’s face it, even if it’s Vestiaire, people are trying to get rid of their stuff. You won’t find old Gucci bags on By Rotation. You’re going to find the new desirable Gucci Marmont velvet bags. Or the Dionysus bag because everyone wants to rent it because it matches everything. So these are all the items that people are willing to hold onto while they’re not wearing it this weekend.”

Plus, even if there is some overlap, Kabra suggests By Rotation’s particular fashion focus means it can slot neatly in as the place where a woman who maybe wouldn’t mind selling a designer piece (for the right price) on a resale platform like Vestiaire Collective can list it for renting on By Rotation’s app in the meanwhile — with the chance to make money loaning it out while she waits for a sale.

“We launched a resale feature earlier this year on the app — it’s just so, so, so interesting that what people rent is very different from what people want to buy second hand. Which is why we totally believe that we do exist alongside these resale platforms — it’s completely different, the product mix,” she adds.

Returning to the sustainability of fashion rentals point, this also bears some critical attention. The claim looks solid if you’re comparing renting vs purchasing a new item that you’re going to wear once or twice. However rentals require energy to ship — unless you’re literally walking to meet the renter in person which is likely only going to happen for a minority of transactions as the vagaries of taste mean you’re unlikely to love and fit into exactly the clothes of your closest rotators.

Rentals also require energy for scrupulous cleaning after every single rental — which may well be more often than you’d clean your own clothes.

Clearly renting is not a carbon neutral activity in and of itself. It is still a form of consumption. So what the activity replaces (or doesn’t) is key to whether it’s actually shrinking someone’s carbon footprint or not.

If a woman ‘rotates’ an existing (long-held) piece from the back to the front of her own wardrobe, perhaps restyling it with a piece of vintage jewellery she also already owns to freshen the look, that might be a more sustainable twist on staying fashionable than all the procedural rigmarole entailed in sharing someone else’s relatively newly bought designer clothes, for example.

So basically a sustainability claim boils down to a demand question: By making relatively high end designer fashion more affordable (renting vs buying outright) is By Rotation helping to generate new (extra) consumer demand that wouldn’t otherwise exist — which implies a net increase in energy consumption?

Again, if the rental demand that’s being stoked ends up supplanting multiple fast fashion purchases (and helps shrink the size of the fast fashion industry) it’s likely net positive for shrinking overall carbon footprint.

But if the app is encouraging more people to do more energy-intensive dressing up than they otherwise would it’s hard to see how that sums to the levels of sustainability required to actually save the planet.

For that we might all need to get a bit more comfortable with dressing in boring old Zoom pants for most of the time tbh.

Asked about this, Kabra deflects the question onto the easier to answer comparison vs buying new — citing a study done by the Ellen MacArthur Foundation, a UK charity that’s focused on accelerating the global transition to a circular economy — which she says found the p2p fashion rental model to be 60% more efficient in relation to resource use than the production of new garments.

“We do nudge people into realizing they’re doing something good by renting rather than buying,” she also says, describing in-app features which seek to quantify estimated resource savings for the user (again compared against if they were buying new). “But I would say that first and foremost people are using By Rotation — and any other rental service — for the affordability side of things. And I think that’s important to highlight because sustainability is still something that a lot of people cannot afford.

“It’s a ‘nice to have’ but a lot of people cannot afford it which is why By Rotation is making it so accessible. We’re saying you can still enjoy fashion but you can do that by spending the same amount that you would do at Zara or Asos anyway by putting that money towards borrowing it from somebody else. So I think it’s really about making the messaging very inclusive and not scaring people away and saying hey you can never go and buy fast fashion again — you can only rent. Or you can only buy sustainable brands.”

“We encourage vintage pieces on By Rotation,” she also confirms. “And they rent quite a bit. We recently had a bride — she rented a gown for her actual wedding, so not just a civil ceremony, from Molly Whitehall, she’s [comic] Jack Whitehall’s sister. And Molly wore a 1940s silk vintage gown that she then gave to us to rent out — so it’s doubly sustainable, right? It’s already vintage and this new bride is actually borrowing it from another bride. And it’s just really interesting the way that people actually value vintage much more — as long as there’s a story around it.”

The European Union has announced a new bundle of sustainability-focused policy proposals that will expand existing ecodesign rules on energy efficiency by encouraging longer product lifespans, supporting the growth of circular economy business models and helping consumers combat greenwashing and make more environmentally friendly purchasing choices, as regional lawmakers work to make good on a Circular Economy Action Plan announced two years ago.

The bloc’s overarching European Green Deal plan has the stated goal of making the region “climate neutral” by 2050.

That mission translates to no net emissions of greenhouse gases within a timeframe of (now) just under three decades while decoupling the EU’s economic growth from resource use — aka a shift to a circular economy where products are designed to last longer and also to be easy to disassemble for reuse or recycling at end of life. So there is, very clearly, lots of work for policymakers to do.

Russia’s war in Ukraine has only added to the urgency of the EU’s climate mission — underscoring the case for the bloc to rapidly move away from using fossil fuels for energy and wider economic fuel as many Member States remain heavily reliant on oil and gas from Russia, leaving their economies exposed to the ongoing regional instability.

In a press release announcing its latest sustainability policy package, the Commission suggests that, by 2030, the revised ecodesign framework could lead to 132 mtoe [million tonnes of oil equivalent] of primary energy savings — which it emphasizes is “almost equivalent to EU’s import of Russian gas” (which corresponds to “roughly to 150 bcm [billion cubic meters] of natural gas”).

It is also keen to flag the value of existing EU ecodesign requirements (which are focused on energy efficiency) — saying they saved consumers €120BN and led to a 10% lower annual energy consumption by the products in scope.

The latest proposals to slot under the EU’s ‘green deal’ umbrella include an interesting idea for Digital Product Passports (see below) — which is part of a wider push to increase product sustainability via a Regulation on Ecodesign for Sustainable Products (aka ESPR). The latter sets new requirements to “make products more durable, reliable, reusable, upgradable, reparable, easier to maintain, refurbish and recycle, and energy and resource efficient”; and looks set to apply across the board from products such as metals and textiles all the way up to mobile phones and tablets.

“The objective of the Commission’s Ecodesign proposal is to make sustainable products the norm on the EU market and reduce their overall environmental and climate impacts,” the EU’s executive writes, adding: “The ‘take-make-use-dispose’ model can be avoided, and much of a product’s environmental impacts is determined at the design stage.”

The ecodesign proposal extends existing EU rules in this area to both broaden the scope of products covered by ecodesign regulations (the Commission says it wants almost all products to fall in scope in the future) and to broaden requirements on those products to encompass circularity and an overall reduction of products’ environmental and climate footprint, in addition to energy efficiency criteria.

So it’s fair to say that the bloc’s concept of ‘ecodesign’ is being radically redesigned — and, well, upgraded.

The Commission argues that this broader ecodesign strategy will lead to more energy and resource independence and less pollution, and also anticipates it creating “economic opportunities for innovation and job creation”, especially in areas such as remanufacturing, maintenance, recycling and repair. So hot European startups of the future could be in areas like smarter waste management and upcycling.

Specific per product requirements aren’t clear, as yet, as the EU’s approach starts with a big picture proposal for a framework and a process — via which the Commission (“working in close cooperation with all those concerned”) will gradually set out requirements for each product or group of products, yielding specific stipulations down the line.

Its approach also suggests there could end up being a degree of variability in requirements across different types of products, as various trade offs (perhaps product longevity vs energy efficiency of manufacture, say) are weighed up and variously assessed in each specific product context. (Variation may also creep in as a result of sector-specific lobbying ofc.)

Another part of the EU’s plan for revised ecodesign rules includes a proposal to introduce Digital Product Passports to store key data to improve traceability around products and support repair/recycling etc by standardizing the information which product manufacturers must provide.

The Commission also intends these passports to arm consumers with information on environmental impacts to inform purchasing decisions.

This could include energy consumption info but also — via new EU Energy Labels for relevant products — a repairability score.

“[P]roduct-specific information requirements will ensure consumers know the environmental impacts of their purchases,” the Commission suggests of the Digital Product Passport plan. “All regulated products will have Digital Product Passports. This will make it easier to repair or recycle products and facilitate tracking substances of concern along the supply chain. Labelling can be introduced as well.”

Digital product passports will be “the norm” for all products regulated under the ESPR, per the Commission — with the goal to ensure that products are “tagged, identified and linked to data relevant to their circularity and sustainability”.

“This proposal will… enable information requirements to be set for products to know more about the impacts of the products on our shelves and make more sustainable choices along the whole value chain,” it adds.

How exactly this will work isn’t clear but presumably something like a QR code could be fixed to each product for scanning to view the associated sustainability data.

“Digital Product Passports will be rolled out for all regulated products,” the Commission writes. “The product information can also take the form of ‘classes of performance’ — for instance ranging from ‘A to G’ — to facilitate comparison between products, possibly displayed in the form of a label. This would work in a manner similar to how the widely recognized EU Energy Label currently works, and be for instance used for a repairability score.”

The EU is also eyeing the potential for this standardized ‘metadata’ system to create other data-sharing opportunities — which could even lead to other types of business opportunity, or support additional pieces of sustainability legislation across the bloc.

“Pioneering this approach for environmental sustainability data can also pave the way for wider voluntary data sharing, going beyond the products and requirements regulated under the ESPR,” the Commission suggests. “Moreover, product passports may be used for information on other sustainability aspects applicable to the relevant product group pursuant to other Union legislation.”

Other measures in the EU’s ecodesign expansion proposal seek to end the destruction of unsold consumer goods — a practice that can be disturbingly widespread in ecommerce (hi Amazon!) and fashion, for example — through “far-reaching transparency requirements for those choosing to discard unsold goods, and the possibility to ban their destruction for relevant product groups”.

“[L]arge businesses that discard unsold products will have to disclose their number per year, the reasons for the discarding and information on the amount of discarded products that they have delivered for preparing for re-use, remanufacturing, recycling, energy recovery and disposal operations in line with the waste hierarchy. They will have to ensure this information is made available, either on a freely accessible website, or via other means,” the Commission writes.

“This measure will apply to all concerned economic operators as soon as the regulation enters into force. The proposal explicitly prohibits circumvention techniques, such as a big company selling to small companies (which are normally exempted) to make them destroy products.”

Green public procurement will also be supported through mandatory criteria in the regulation.

In addition, the Commission has presented two targeted sectoral initiatives today — one focused on sustainability and circularity of textiles, with the strategy there intended to make textiles “more durable, repairable, reusable and recyclable, to tackle fast fashion, textile waste and the destruction of unsold textiles, and ensure their production takes place in full respect of social rights” by 2030; and another that aims to boost the internal market for construction products while also ensuring that the regulatory framework is geared towards sustainability and climate objectives.

Both sectors have high carbon footprints.

When we started covering Builder.ai a few years ago, the startup was tapping into a new wave of businesses wanting their own native apps. The previous wave of agency-built and outsourced apps was waining, and Builder.ai realized it could tap into this trend by creating a turnkey, almost drag and drop approach, at least on feature requests. In 2019 it raised one of Europe’s largest Series A investments at the time, at $29.5 million, led by Lakestar and Jungle Ventures.

Then came the pandemic. With the rapid digitization of our entire existence, borne of the need to socially distance, business raced online, and Builder.ai saw its moment. It capitalized by launching pre-packaged apps — beginning with e-commerce and delivery — aimed specifically at small businesses hit by the COVID-19 pandemic.

The strategy worked. By the beginning of 2021 it said it had experienced a 230% increase in monthly revenue since the start of the pandemic.

That combination of being on-trend and doubling down on the pandemic-driven shift of business online has now led to a $100 million Series C funding round. The round was led by Insight Partners, a New York-based global venture capital and private equity firm. The round, which brings the company’s total funding to $195 million across three total rounds, includes participation from existing investors in combination with new individual and institutional names that include the IFC & Jeffrey Katzenberg’s WndrCo and Nikesh Arora (CEO at Palo Alto Networks).

Established in 2016 originally as Engineer.ai, Builder.ai developed what it called an “AI-powered low-code/no-code app development platform. This now claims to be able to build software and apps up to 6x faster and up to 70% cheaper than ‘traditional’ human teams, “without users needing to speak tech.”
However, those claims led others to look under the hood and question what sounded a little like marketing hype.

According to a report from The Wall Street Journal in 2019, the company was relying mostly on human engineers who were merely directed by an AI platform in a more efficient manner that previous generations of work-allocation software. The report claimed Builder. ai was using hype around the AI subject to attract customers and investment as a ‘bridge’ before it could get its automation platform up and running. In fact, the company was sued in 2019 by its chief business officer, Robert Holdheim, who claimed the company had exaggerated its AI abilities to gain funding.

But the controversy may well have come down to terms and definitions. Although Builder.ai may not have been using AI to assemble the direct code and instead using remote-working engineers to build the apps (something which it actually never denied in my experience), it was clearly using machine learning to speed up and automate large swathes of both customer interaction and engineer assignments.

Whatever the case, the startup has now assembled a large number of software tools to gradually automate large parts of software and app building, hence the new funding from new investors.

Builder.ai says it has now increased its revenue by over 300% and the capital raised will be further invested in the AI and automation capabilities of its low-code/no-code platform.

This will include a new conversational AI, named “Natasha” as a self-service bot.

In a statement, Sachin Dev Duggal, Co-Founder of Builder.ai, said: “Our choice of investor for this round was very deliberate; we wanted someone who had deep insight and immense courage to let us think and do differently. This led us to the only natural choice – Jeff Horing and Insight Partners.”

“Builder.ai has spearheaded a new category in the low-code/no-code industry with an innovative business model and clarity of vision, fueling its 300% growth in the last year,” said Jeff Horing, Co-Founder and Managing Director at Insight Partners. “I’ve been speaking with Sachin from the early days of Builder.ai and have witnessed how he and the team have built something very special. By truly democratizing access to complex software, Builder.ai is set to disrupt the core of how applications are built.”

Klaus Hommels, Founder and Chairman, Lakestar, added: “Builder.ai is one of those rare companies that has entered a brand new category; with technology that has a disruptive impact to the world around us; especially as companies continue the move to being digital-first.

The European Union’s co-legislators reached political agreement on a major reform of digital competition rules late yesterday which will introduce up-front obligations and restrictions (literally a list of ‘dos and don’ts’) on the most powerful Internet giants — enforced by the threat of substantial fines and other types of penalties if they fail to meet the requirements.

The Digital Markets Act (DMA) is the bloc’s response to systemic misbehavior in digital markets over many years.

The regulation has been informed by a string of major EU antitrust cases against tech giants like Amazon, Google and Apple, and an accompanying frustration that Big Tech’s dominance has simply continued to entrench itself, as cases take years to conclude, leaving abuse largely unchecked in the meanwhile.

The EU’s habit of letting tech giants define their own remedies even when they do (finally) get hit with antitrust enforcement — with only a general pronouncement that identified infringements must stop — has also allowed platforms plenty of wiggle room to keep stacking their hand. (Hence the Commission having to intervene again, years later, in the Google Android case to pressure Google to drop a paid auction model which rivals had declaimed as unfair from the start.)

The DMA proposes to flip this hindsight-riven dynamic by fixing conditions up front and applying an expectation of compliance with fixed rules of the road for giants that fall in scope, with the goal of ushering in a new era of more proactive and effective tech regulation. The bloc’s conviction is that an ex ante competition regime will supplement the usual ex post antitrust procedures to ensure that digital markets remain fair and contestable.

Despite EU policymakers spending long years mulling whether and then how exactly to act, a formal legislative proposal was only presented in December 2020 — so it’s taken less than 18 months for the EU’s institutions to reach agreement on a provisional text. That looks remarkably fast, underlining how much consensus there is around Europe on the need to reign in Big Tech’s market power.

The EU has also doubled down — agreeing yesterday to expand the DMA’s asks on Big Tech, including with a new interoperability obligation for messaging platforms.

Whether the regulation will actually succeed in boosting competition in digital markets that remain dominated by core platform services is really the €75BN+ question.

The EU argues that having a common set of rules across the single market for Big Tech will foster innovation, growth and competitiveness, as well as supporting the scaling up of smaller platforms, SMEs and start-ups — who it suggests will benefit from the existence of a single, clear framework at EU level.

But some experts have expressed doubt about this thesis — arguing that the best way to improve competition in digital markets might be by encouraging more direct competition between gatekeeping giants themselves, which isn’t how the Commission has configured its approach.

Whether the DMA will do what the EU hopes, and stop platform giants from unfairly throwing their weight around at the same time as firing up fresh competition and innovation, is likely to take longer to assess than the relatively short order it took for the bloc to agree on the detail of the new regime. But one thing is clear: Change it coming — and it’s coming relatively fast.

Read on for a breakdown of key developments in the compromise reached between the European Council, parliament and Commission yesterday…

Who will the DMA apply to? 

The regulation will apply to intermediating platforms of a certain size and market cap which play a ‘gatekeeping’ role — meaning these are companies which get to set the ‘rules of play’ for other businesses and consumers via their platforms T&Cs and as a result of their market power.

Long standing examples given include search engines and social networks. Marketplaces and booking platforms also seem likely categories to fall in-scope.

The EU co-legislators also added virtual assistants and web browsers to the list, apparently with an eye on further future-proofing the regulation.

What are the criteria for being designated a gatekeeper? 

The EU institutions agreed to meet in the middle on this: The law will apply to tech giants with a market capitalisation of at least €75BN or an annual turnover of €7.5BN (rejecting a slightly lower threshold the Commission originally proposed and a higher one proposed by some MEPs).

Companies must also have at least 45M monthly end users in the EU and 10,000+ annual business users.

Likely suspects to fall in scope include Apple, Amazon, Google and Meta (Facebook). The European booking platform giant, Booking.com, may also joint the ex ante club. As might the Chinese ecommerce giant Alibaba.

It will be the Commission’s job to designate gatekeepers so there will be something of a front-loaded sprint of work once the regime starts operating for the EU to identify all the gatekeepers (and see off any legal challenges to a designation) before a segue into the wider, ongoing work of monitoring, investigations and enforcements.

What must gatekeepers do and not do to comply with the DMA? 

There’s a long list of requirements which the EU hopes will shape the behavior of market giants in a way that ensures digital market stay open and contestable (or, well, can be cracked open in cases where they may have already tipped).

Many of these have been maintained since the Commission’s original proposal — which we covered at the time here — or else have been strengthened and extended. A few new ones have also been added.

Articles 5 and 6 if the DMA are where these key lists appear.

One major new requirement introduced via the trilogue process is interoperability for messaging platforms.

This is focused on ‘basic’ functionality — such as the ability to send text messages, photos, video and files, rather than full feature parity. It will also start with one-to-one messaging; group chats will be phased in over two years and video calling/conferencing over four.

The way this will work is smaller messaging platforms will be able to request interoperability from gatekeepers (who will be obliged to provide it). But there is no obligation for such platforms to take up the entitlement; it’s their choice.

Their users would also need to choose to opt in to being able to send messages cross platform — and so users will not be forced to accept off-platform messages just because the service has elected to plug into the APIs of a gatekeeper. Hence the co-legislators talk about this being an “asymmetrical” interoperability requirement.

We understand there is no literal limitation in the DMA that would prevent a gatekeeper from requesting interoperability from another gatekeeper. But whether platform giants — such as Apple with its iMessage service or Facebook with Messenger — would choose to do so is a whole other question.

EU lawmakers emphasize that they are very focused on the security element of messaging interoperability — stipulating that all cross-platform comms must maintain the same level of security (so, for example, if it’s E2EE it cannot be lowered to a lesser level of encryption).

Beyond messaging, the bloc’s co-legislators only agreed to assess social media interoperability in the future — so for now that’s off the table, likely owing to perceived additional technical complexity.

They also agreed to set up a new high level advisor group to support the Commission with cross-cutting technical sectoral advice to support its work in areas like interoperability.

In another major new addition to the DMA stipulations, a parliamentary push to include limits on how personal data can be used for tracking ads survived the trilogue negotiations.

Moreover, there was further accord to ensure this issue will also be tackled in the DMA’s sister regulation, the more broadly applying Digital Services Act (which is still going through trilogue).

So the consensus here spans two separate (if linked) pieces of legislation. Which is notable given that the ads component was a late addition and given how much counter lobbying the tracking ads industry has done to try top evade limits.

As regards the DMA component of this, gatekeepers must gain explicit consent from users to combine their personal data for advertising — a provision that could finally force Meta (Facebook) to provide users in Europe with a choice not to be tracked and profiled when using its services.

There was also agreement between EU co-legislators on extending mandatory choice screens for consumers to pick their own preference of search engine, browser and virtual assistant — i.e. rather than gatekeepers being able to preselect or force use of their own products through bundling. Although lawmakers appear to have resisted calls to further widen the scope to other key services (such as email) as they were concerned about the risk of over-burdening the user experience.

Fair access rights to core services — originally in the DMA with a focus on third party developers and gatekeepers operating mobile app stores — has also been extended to cover search and social media.

This puts obligations on gatekeepers to be transparent about the terms they apply to business users and to offer a dispute settlement mechanism. (Idea being this will also help the Commission spot potentially unfair terms and/or behavior more quicker so it can tackle problems faster; but the Commission itself won’t be overseeing FRAND down to the level of an individual business’ Facebook page, for example.)

An obligation on mobile OSes to allow sideloading of apps and app stores has also been retained — but with some reworking to try to reach a compromise that balances consumer choice against security concerns like the risk of introducing malware (an argument that’s been repeatedly raised by tech giants like Apple in their lobbying against this provision).

The exact detail of this compromise isn’t clear but we understand it will involve somehow letting users define their own level of risk, such as by options available to them at the settings level.

Elsewhere, a ban on self-preferencing of gatekeepers’ own services, such as in content rankings they curate and present to users, remains intact; as does a stipulation that gatekeepers cannot block users from uninstalling preloaded apps, along with wider support measures to enable service switching — and plenty more besides.

What are the penalties gatekeepers face for non-compliance? 

Fines of up to 10% of global annual turnover can be levied on a gatekeeper for a breach of the regime — or up to 20% for repeated breaches.

The latter refers to a situation of systemic non-compliance which, as we understand it, is being defined as at least three non-compliance decisions over a period of eight years. (It would also require a legal test to be carried out that indicates the gatekeeper in question has maintained or strengthened their position.)

The DMA’s penalty regime also allows for non-financial penalties in the case of system infringements, retaining the possibility that the Commission could order structural remedies, such as the break up of a gatekeeper’s business empire.

That said, the regime looks explicitly intended to avoid such a one-way outcome as this power is very much held in deferred reserve (as a nuclear option; more to scare that it’s there than to use), with the bulk of enforcement resources set to be directed toward achieving compliance with the up-front market rules.

Furthermore, the Commission is able to engage in a regulatory dialogue with gatekeepers to ensure they understand the rules and requirements — so it can also push platforms to make changes that help them avoid fines in the first place.

However — for those gatekeepers that do decide to thumb their noise at the EU’s ex ante competition rules — another interesting addition to the DMA’s penalty pot is the possibility that a gatekeeper could be temporarily banned from making mergers and acquisitions.

It’s a step that looks geared towards preventing the phenomenon of killer acquisitions. But how long such an M&A ban might last isn’t clear.

During a press conference today, competition commissioner and EVP Margrethe Vestager talked around the topic, making passing reference to the recent Google-Fitbit acquisition (which completed last year) — and to conditions the EU had accepted for allowing that to go ahead (including a time-limited ban on Google using Fitbit health data for ad targeting), going on to note that the EU has been trying to look into more big tech acquisitions to assess effects “on the ground” and has already increased its merger enforcement as a result of that.

The DMA putting sanctions on gatekeepers that limit their ability to do M&A is appropriate within a behavioral framework, Vestager argued, also pointing to how many European startups are getting snapped up by big tech. “This entire legislation deals exactly with the behavior of the gatekeeper and how to make sure that markets remains competitive and of course here mergers play a role as we see it in our specific merger control,” she added.

As part of general DMA reporting requirements, all gatekeepers are required to notify the Commission in advance of M&A too.

Who will enforce the DMA?

The European Commission itself will be the sole enforcer — but its original proposal has been amended to allow a bigger involvement for national authorities on the investigation side.

That may, at least in part, be a measure of how much (new) work the Commission is taking on with the DMA.

Some joint-working with Member State agencies with relevant expertise could help lighten the load and expedite enforcements.

That said, if a national authority starts an investigation which the Commission subsequently picks up we understand that the national probe would be expected to end.

The Commission says it expects to need to add around 80 people to deal with the DMA workload. Some of this headcount will come from redeploying existing staff, others will be new hires — the latter with a focus on beefing up its technical expertise.

When does the Commission expect the DMA to come into force?

Some time in October is said to be “likely” — though not set in stone — at this stage.

The provisional text still needs to be checked over to produce a final legal document (in all the various EU languages) for approval by the Council and Parliament (the latter in a plenary vote). But the main hurdle to EU legislation is the political negotiation which concluded witjh agreement yesterday.

There is a six month period allowed for Member States to transpose the pan-EU regime into national legislation. So it may be that 2023 will be when we see the real DMA fireworks.

What has the reaction been to the plan so far? 

It’s been interesting to see how much shock/surprise and even horror greeted yesterday’s trilogue agreement announcement from US-based industry watchers — who seem not to have been paying attention to a flagship reform EU lawmakers proposed in detail years ago.

On the flip side, Europeans, both consumers and businesses, plus the myriad civil society groups that have been advocating for competition reform to untip digital markets for years, are sounding — broadly — supportive, while being very keen to remind the Commission that the best-crafted regulation is only as good as the quality of enforcement that accompanies it.

All eyes in the region will be on how the Commission executes on this sizeable challenge.

As regards more specific criticism, the measure that’s garnering the most criticism is the interoperability obligation for messaging apps — which is attracting flak from a technical and/or product experience point of view from some quarters, with concerns being raised about the potential impact on security or other safety specific processes which platforms may carry out in areas like abuse-monitoring or content moderation.

Concerns include that interoperability might introduce vulnerabilities and could also break delicate safety systems — at times combined with a strong dash of paranoia that the EU is trying to use competition reform as a pretext to, er, break strong encryption…

Again, though, it’s possible to find opposing technical views: The Europe-based messaging company Element — which develops apps atop the decentralized Matrix protocol — has been a keen proponent of interoperability from the start.

Albeit it was advocating for EU lawmakers to go further and adopt a standards-based approach, which would support more fully featured interoperability vs the open API route plus core functionality the Commission has opted for.

Even so, Element co-founder and COO, Amandine Le Pape, is still happy that (some) interoperability for messaging has been included in the DMA. “Any interoperability would be better than the current walled gardens,” she told us. “An open standard approach could come later, especially if it’s pushed bottom up by the industry which may eventually understand that by all speaking the same language it makes everyone’s life easier and more secure.”

The Web Foundation‘s Tech Policy Design Lab is working on an interesting-looking project to counter deceptive design — aka dark patterns* — with the goal of producing a portfolio of UX and UI prototypes which it hopes to persuade tech companies to adopt and policymakers to be inspired by as they fashion rules to make the online experience less exploitative of web users.

The Design Lab was launched last year to be the “action arm” of a wider Web Foundation initiative, announced back in late 2018 — when the not-for-profit digital access group proposed a “Contract for the Web” ahead of the 30th anniversary of World Wide Web founder Sir Tim Berners-Lee’s invention.

Kaushalya Gupta, its program management lead — who also heads up the Tech Design Lab — told TechCrunch that the goal for the deceptive design patterns project will be to bring “human-centered design” to bear on critical web interactions.

The project will fed by collaborative discussions involving a range of industry and user stakeholders, via a series of workshops taking place later this year, to co-design the prototypes. The hope is to end up with a series of pro-user interface design templates that will stand as benchmarks to nudge how tech platforms shape and mould these critical (and all too often cynically configured) decision/interaction pipelines.

“The Lab is a place where people’s experiences drive policy as well as product design,” explains Gupta. “Where solutions take into account the full diversity of those who use digital tools. And in terms of our policy development approach it is informed by design thinking and human-centered design.”

Work to spec out the deceptive design patterns project was preceded by a survey, as the Lab polled the thousands of organizations and entities signed up to the Contract to decide what should be its first focus — whittling some 200 “promising topics” down to deceptive design.

Western internet users may be most familiar with deceptive design patterns in a niche like cookie consent banners which typically (intentionally) fail to offer parity between the ease of agreeing to give up your privacy to the data industrial adtech complex and refusing tracking — making the latter horribly hard (if they even offer that choice at all).

There are also plenty of shamefully familiar examples in e-commerce too.

Just look at how aggressively Amazon nudges users toward inadvertently agreeing to sign up to its subscription-based Prime membership scheme — teasing a carrot of free shipping at the point of purchase in a bid to distract the shopper from the simultaneous sleight of hand as shipping is only free if you also agree to sign up to a free trial of Amazon’s Prime scheme, after which the e-tail giant will start to bill you for what is normally a paid service. (And of course it also makes users go on a not-so-merry dance through multiple menu layers to find the button to cancel Prime if you inadvertently sign up for this “free” shipping/trial.)

But Gupta makes the salient point that deceptive design is also rampant in the global south where design tricks may also, she emphasizes, be disproportionally harmful — given there may be many more web users with relatively little online experience getting subjected to this cynical, tricksy stuff, who are not so accustomed to the “usual tactics”, making it harder for them to detect and avoid dark patterns and the harms that flow on from them.

People in the global south may also be more likely to have to access the internet through smaller devices, she also notes — which can make deceptive nudges easier to pull off. Less screen real estate means it’s likely harder to spot what’s really going on.

“One example from India is about this edtech company, called Byju,” says Gupta. “They have these subscriptions that look like free at first glance. And now there are thousands of unassuming parents who are actually trapped in debt because they’re trapped into these subscriptions.”

The pandemic edtech boom has likely exacerbated the volume of harm flowing from such deceptive subscriptions. “A lot of these people actually come from quite humble backgrounds, they’re not really all that rich — so to be trapped into subscription has been [very harmful],” she adds. “Here we’re talking about debt — so this is where the issue of dark patterns goes from being annoying or frustrating to actually impacting people’s lives and savings.”

Gupta argues that it’s not for want of examples of consumer harm that practical action to try to counter deceptive design has been relatively limited to date — with perhaps the most focus on the topic coming from academics.

(That said, data protection regulators in Europe have also finally started paying attention — with some major enforcements around bogus adtech consent flows in recent months; while, just this week, the European Data Protection Board put out guidelines on spotting and avoiding dark patterns in social media interfaces, along with a call for feedback.)

“The challenge with deceptive design is it’s such a nebulous space,” suggests Gupta. “I think that’s what’s been limiting action in this area — because it’s so nebulous. It’s such a big grey area.”

Part of the Lab’s work will therefore be on trying to nail down a scope that’s “not too broad so that we can’t really create impact — and not too narrow where the exercise becomes redundant”, as she puts it.

“Through the consultation sessions [we’ve held so far] — in terms of priorities — people are most interested in tackling data protection issues as well as consumer protection,” she continues. “So our focus is definitely going to be on consumer protection but we’re also going to be seeing how we can establish cross-cutting teams and address the most important issues under data protection and privacy as well. We’ll try to tackle a range of harms.

“In terms of specific industries [we may focus on] or not, we’ve been speaking to people across different industries and groups to identify a wide range of harms. Right now we’re synthesizing all of our findings and working with the design firms to create the workshops.”

Gupta says the Lab expects to have prototypes ready to present by late summer — after which it hopes to engage policymakers with the detail of what’s been developed.

And of course the work won’t stop there; the Lab will also be pressing for adoption of the (non-deceptive) design templates — such as by seeking commitments from tech firms to, at least, test them.

Gupta points to an earlier project — focused on online gender-based violence — which she says led to commitments from a handful of tech giants to trial recommendations, adding that the Lab is continuing to follow up on those pledges.

How much success does the Lab expect for a project which, if it’s to really move the needle away from exploitation, will need to convince scores of tech firms to reset their default design imperatives — from a “growth at all costs” revenue-focused mindset to cultivating “ethical growth” and fostering a more respectful relationship with web users by prioritizing their agency and welfare?

“Yes of course we’re hoping for success,” she responds, before deflecting the direct question into a description of how the Lab intends to measure success — saying it will benchmark results on “adoption” (i.e. uptake of non-deceptive design suggestions); as well as “sustainability” — which means finding partners who will be able to carry the work forward once the Lab moves on to new projects; and on “accountability”, meaning the follow up element (i.e. did firms really carry through and stick with reformed designs?) will be key.

“We’ve found a lot of interest, for example, in terms of ESG [environmental, social and governance],” she also notes, discussing potential uptake. “Companies like venture capital firms are interested in having a questionnaire so they can screen out companies who use deceptive design.

“It’s interesting because there are so many different applied uses [of non-deceptive design principles] — that could be applied across different industry sectors and that’s what we’re focused on.”

As noted above, we are finally seeing some privacy-focused regulatory action in Europe against cynically designed defaults and “no choice” screens that infringe on consumer autonomy — with a number of complaints and investigations into problematic design patterns also being driven by consumer protection watchdogs. (See, for example, a major series of complaints against TikTok last year.)

Europe is a region with longstanding consumer protection and data protection legislation which should be able to lend consumers a degree of shielding against manipulative interfaces — yet a historical lack of enforcement has allowed the problem to be seeded online, spread and become entrenched on the modern web. A purge is well overdue.

On that front, EU lawmakers are now picking up the baton — and proposing to further beef up consumer rights in this area. Such as by incorporating explicit bans on dark patterns into major incoming digital regulations (although it remains to be seen whether such details survive trilogue negotiations which are ongoing to hash out a final agreement between the EU’s trio of institutions).

Child safety is another area where lawmakers on both sides of the Atlantic are now paying a lot more attention to how to outlaw manipulative and/or hyper-addictive interfaces which target children, such as design tricks that nudge minors to weaken privacy protections, hand over lots of personal data and/or relentlessly pester them for attention to rack up more revenue.

Another interesting development in the interface navigation space that’s been proposed by privacy campaigners in recent years, and attracted some attention from lawmakers, is the potential to use automated tools to help users navigate hostile menus — such as privacy campaign NGO noyb’s suggestion for an advanced, user-configurable control layer in the browser; or a recent research project out of ETH Zurich proposing to automatically filter and block non-essential cookies so that consumers don’t have to keep wasting their time saying no.

A U.S.-led publisher coalition also revived a browser level privacy signal effort back in 2020 — with the goal of building momentum for a global standard to make it easier for web users to signal opt outs of the sale of their data to businesses.

However such automated approaches don’t pretend to be panacea that can universally tackle the scourge of deceptive web design in every place it rears its ugly head — as they really need relatively narrow and/or specific fields of application (not to mention legal mandates) to stand a chance of functioning as intended. Whereas disingenuous menus and choice screens can pop up all over the darn place.

A genuine cure will need tech companies to be willing to turn over a new leaf en masse — and/or be shamed into it by ethically minded rivals getting there first.

What do tech companies tell the Lab when asked why they keep choosing to deploy all these cynically deceptive designs?

“Um, that they’re working on it,” responds Gupta with a little hesitation as she chews on the question. But she quickly follows up by blaming the siloed structure of many tech firms as an integral part of the problem.

“What’s interesting is that there are product teams, there are policy teams — and so the designers aren’t really working with the policy people. And so even the work in companies takes place in silos. So when we want to work with companies it’s not that their UX designer is creating a deceptive design — it’s like everyone is part of a bigger picture and what the user ultimately experiences is deceptive design,” she tells us. “I think these things are actually perpetuated from the university level — where designers [and other professionals, such as engineers] aren’t taught about these things.

“One great thing is Stanford, for example, in fall this year they’re launching a pilot course on deceptive design and tackling that. And that’s great to see a university is actually doing something… What’s important is to look at the entire life cycle. These things start off at the university level, they get perpetuated when people join the industry. And I think the way people work inside the industry is what also exacerbates the issue — because no one is ultimately responsible.”

So while Gupta believes there is rising awareness among design professionals of the concept of ethical (and thus unethical) design — and that “a lot of designers are actually doing their best to learn more about it and see how they could apply it in their work” — she also argues that “when it comes to [acting ethically] at a company level it’s challenging because of the silos”.

This is why the Lab’s outreach for this project already involves speaking with people from a variety of different teams, not just designers. And why the role corporate structure itself may play in programming and perpetuating deceptive design is likely to end up being an important focus for the project.

“It also means working together with the UX designers, with the product teams, with the policy teams,” adds Gupta. “And that’s also been something that’s interesting when we’ve reached out to companies; identifying the right person to speak to in the company it’s a process. When we’ve been engaging governments we know who to engage with. With civil society, it’s very easy to get engagement with them. With companies, there’s a lot of complexity about finding the right person to engage with.

“Once we have been speaking with them they’re very supportive of taking part in the workshops — so I think the fact that they’re even willing to have a conversation at this point is a small win… but of course we definitely need commitments and we need to hold them to account.”

The Lab is asking tech firms and other stakeholders who want to register an interest in the project — and potentially participate in the upcoming workshops — to fill in this online form.

*The Lab is intentionally avoiding use of the term “dark patterns” for this project, in favor of the more accessible/less obscure descriptor “deceptive design” — which both neatly explains the problem and does not inadvertently reinforce negative linguistic stereotypes (i.e. that dark equates to bad).