- Amazon’s On-Demand Services Marketplace Launches Monday: Amazon’s Angie’s List competitor, called “Amazon Local Services,” has been rebranded as “Amazon Home Services” ahead of a larger launch happening Monday, sources familiar with the plans tell TechCrunch. The site, which previously featured only a limited number of service offerings in a handful of select markets, has also recently expanded to include a much larger number of categories of services as well as additional cities around the U.S. As you may recall, Amazon Home Services quietly rolled out in late 2014 as the company’s initial foray in to providing a marketplace for services that would exist alongside its product offerings, offering the retailer another means of generating revenues outside of shipping physical products. Initially, the marketplace largely featured service providers whose businesses could help Amazon shoppers with additional needs that might follow a product purchase, however – like installers who could mount a new TV, for example. Now that expanded category line up is live – or at least it will be on Monday. On the rebranded “Amazon Home Services” website there are a variety categories beyond those that only relate to products Amazon sells. Top-level categories include Home Improvement, Lawn & Garden, Automotive, Computer & Electronics, and Lessons. There’s even a “More” category for those that don’t fit into the other groupings, which includes some more interesting services like “goat grazing” or “singing performances.” The idea here is to expand the marketplace to include any services a customer may need – even everyday needs like housecleaning or babysitting. In other words, with the official launch, Amazon is taking a big step to compete in the on-demand economy. But in our understanding, Amazon is partnering with some of these on-demand service startups, rather than trying to replace them entirely. This is a similar strategy to what Amazon has pursued with other initiatives, like its online art store or its Amazon Sellers program. Amazon could end up driving more business for some of these companies, the way it has provided additional customer flow for small retailers of physical goods. Also of note, Amazon hand-picks the businesses it includes on its site, and required all those who were listed to be licensed, insured and background-checked. The website previously said that Amazon would take a 20 percent cut of the services that cost under $1,000, and 15 percent for those over $1,000. But recently, the language on the website was updated, noting that, as of March 27, service fees are divided into three tiers: standardized, custom and recurring, each with a 5 percent transaction fee, and then with varying “service platform” fees ranging from 15 percent (standardized) to 19 percent (custom) to 5 percent (recurring). For consumers, the updated marketplace offers a number of features that could make it competitive to other providers, like Angie’s List, Yelp or Google’s business listings as a place to find providers. Because Amazon shoppers buy the services by placing them in an online cart, the company can verify the purchases leading to authenticated user reviews – meaning no one can slam a business out of spite or to take down a competitor. Instead, service reviews only come from real customers. Plus, the pros on the site offer Amazon the same pricing as if you dialed them direct, the website now claims – and if you find they offer a lower price, Amazon will match it. That change may be related to earlier complaints from consumers trying the service during its beta phase. Some found that they ended up haggling over pricing, and had trouble getting Amazon to pay up when they were given an incorrect quote.
- At developer conference F8, Facebook Opens Messenger for App Developers, Realtime Comments, New Ad Formats, Analytics for Apps,..: (more here and here) Today marked the first day of F8, Facebook’s annual developer conference, and the company announced a ton of stuff Messenger As A Platform: Facebook is opening up Messenger as a platform for developers. That means developers will be able to add in new functionality to Messenger — things like Giphy for on-the-fly GIF searching, goofy voice changers for voice messages, a drawing pad for doodling things up for your friends, etc. Think of it like a mini-app store within Messenger. New Realtime Comments System: Facebook’s Comment system (like the one you see in use at the bottom of this post) is pretty solid, but it’s been a while since it got much love. Today, it’s seeing a bit of an overhaul. New comments will show up in real time, comments will sync between the story page (this one) and the shared story item on our Facebook Page, FB Embeddable Videos: Facebook is making a move on YouTube’s turf, now allowing users to embed their Facebook videos on other sites. Will this mean less personal, home-video style content on YouTube? Maybe. Will Facebook start tapping these embedded video streams as yet another place for them to stick an ad? Almost certainly. Spherical Video: In a curious move, Facebook will now support 3D, spherical video in the newsfeed. You can pan around the video with your mouse cursor. While spherical video looks a bit strange on a flat screen, the key here is Facebook’s purchase of the Oculus Rift. Parse For Internet Of Things: FB launched Parse for Internet Of Things — a set of SDKs that act as the backend brains for IoT projects. It’s compatible with Arduino first, with other platforms on the way. LiveRail: Last year, Facebook bought LiveRail — an ad exchange that fills ad space within apps and sites to the highest bidder. Today, they made two changes: they’ll support mobile display ads in addition to video, and will be able to tap into a pool of anonymized Facebook data to determine which ad to show. Analytics For Apps: Facebook knows a lot about the users of their apps. Now they want to help developers figure out who is using their apps. Are most of the people playing your game female? Are they teenagers? Are those teenagers spending money in game, or are most buyers in their early 20s? Facebook’s new analytics platform helps you figure that out.
- Uber, Ola stare at a possible IP address block in India: (more here) The Delhi government has asked India’s information technology ministry to block the taxi-hailing apps of Uber and Ola in the national capital, news agency Reuters reports, quoting an unnamed government official. Yesterday, Delhi transport officials asked Uber and Ola to cease operations if they want their applications for radio taxi licenses to be processed. The officials had earlier asked the central government to block Uber’s IP address in India if the company does not abide by the law on running taxis. A block of the IP address would prevent passengers and drivers from accessing the app. Now, Ola too seems to be caught in this regulatory fix. Taxi-hailing apps hit a roadblock in India when an Uber driver raped a passenger in Delhi three months ago. This led to a ban in several Indian cities, and a close scrutiny of safety measures, driver screening, and liabilities that these ride-hailing companies assume. Uber had given in to a transport authority demand to apply for a radio taxi license in India, after initially insisting that it is not a radio taxi company. But its application fell short of what was required. The bone of contention is Uber’s insistence that it is just an internet platform connecting owners and drivers of cars with their customers, while regulators are equally insistent that it has to follow rules like any other taxi service. The transport authority refused to give a license to Uber unless it met the licensing conditions. On its part, Uber said it is “evaluating the perceived deficiencies in the time period provided to us by the government.” Uber tied up with First Advantage to do background checking of its drivers and included two new panic buttons on the Uber app – only in India – to persuade consumers and authorities that it is serious about safety. Earlier this week, it got into a “commercial marketing arrangement” with The Times of India Group to help ease its rollout across India.
- Tinder hacked, results in matches of unaware straight men, odd conversations: Flirting can be hard, especially through a screen. But these guys never had a chance, considering they were chatting with other heterosexual male users as part of a clever technological ruse. A hack on Tinder isn’t anything new. More tech-savvy folks have actually dug into the app to automatically swipe right on every potential match, and then there are all the marketers that are tricking folks into chatting with a brand instead of a human. But the Verge reports that a hacker recently set up a program that would use female dummy accounts to put heterosexual men into conversations with each other. Using Tinder’s API, the programmer was able to channel messages from one unknowing man to another, with both parties in the conversation believing instead that they were talking to a woman.
- 3 Pinterest Features Retailers Need to Know: Pinterest should, if not already, be an integral part of your e-commerce strategy. The site’s visual nature can help you provide detailed images to buyers, share products and information, draw buyers to your website and ultimately increase sales. It’s an ideal fit for brands and retailers looking to boost product visibility and purchases. Because of its relatively young age, Pinterest is still expanding at a considerable rate. Below are three innovative Pinterest features to have on your radar. Price Notifications: Price notifications are a recent practical addition to the social network. Users who pin a Rich Pin — pins that are available to business accounts and include extra information like a title, price and availability — that is later reduced in price will receive a notification alerting them to the price drop. This is a unique way to notify shoppers about price changes and to interact with potential customers. Because both Rich Pins and Pinterest business accounts are free of charge, we strongly recommend trying them out. Promoted Pins: promoted pinsCurrently a reservation-only program for US-based businesses, Promoted Pins are Pinterest’s foray into advertising. Retailers can promote specific pins to targeted audiences so that they show up in relevant search results and in users’ home feeds. You’ll be charged when people click through to your site. Pinterest has been testing the program in beta, and the company reports that advertisers experienced about a 30% increase in earned media from their Promoted Pins campaigns. Buy Button: Pinterest is following in the footsteps of Facebook and Twitter by adding a Buy button, which allows users to order and pay for products without leaving the social network’s website or app. Essentially, it’s a tool to reduce the steps in a consumer’s path to purchase Even though Pinterest is entering the social commerce game late, it has an advantage over Facebook and Twitter because its users are already coming to the site for product ideas and inspiration. When the act of pinning occurs, people are signaling some interest — if not clear purchase intent. Over the past five years the social giant has proven itself to be a big player in e-commerce. Think about it — 70 million active users are searching, sharing and “pinning” images of products. As Pinterest continues its rapid growth, more consumers will continue to trust the network to recommend quality products. This social channel is an ideal match for online retailers.
- Consolidation in the colocation business: NTT buys German data center operator, while Rackspace seeks tie-ups with Amazon, Microsoft: NTT: Japan's NTT Communications Corp said on Tuesday it has agreed to buy German data center firm e-shelter, becoming Europe's third biggest operator in the sector, in the latest in a series of overseas acquisitions to counter sluggish growth at home. NTT Communications, an unlisted division of Japanese telecom firm Nippon Telegraph and Telephone Corp (NTT) (9432.T) didn't disclose the deal's financial terms. A person familiar with the matter told Reuters earlier this month the NTT unit was in talks to buy e-shelter for about 100 billion yen ($832 million). In a joint statement, NTT Communications and e-shelter said the Japanese firm will acquire 86.7 percent of the German company, founded in 2000. Operating data centers in four major cities in Germany including Berlin, as well as in Zurich and Vienna, e-shelter is Germany's biggest provider of data center services, they said. The European deal stretches the NTT brand further across the globe. In 2010, parent NTT bought South Africa's Dimension Data for 382 billion yen, while in 2013 NTT Communications signed deals with a combined value of 85.5 billion yen to take over two U.S. cloud computing firms, Virtela Technology Services and RagingWire Data Centers. Rackspace Rackspace Hosting Inc. is open to forging partnerships with large cloud-computing operators such as Amazon.com Inc. and Microsoft Corp. as the company seeks to bolster slowing revenue growth. Rackspace, which has faced price cuts by Amazon, Microsoft and other competitors, decided in September to reject approaches by multiple groups interested in a partnership or acquisition. Since then, Rhodes hinted that the company has had a team looking at supporting customers who are renting computing services from other providers. Rhodes confirmed on Monday that Rackspace intends to provide third-party support for users of rival cloud-computing services via a combination of people and custom-management software. “There are future versions of our model that will be more capital light and more service oriented,” Rhodes said.
- Dating app Tinder launches slew of product features, dynamic pricing: Tinder’s “Rewind” functionality just went live, finally giving users the ability to go back in time and swipe right instead of left. The “Rewind” feature is included in the premium tier of the service, Tinder Plus, which was unveiled today and costs anywhere between $9.99 and $19.99 in the United States, depending on the age of the user. That’s right. Tinder Plus costs $19.99 for users older than 30, while it costs just $9.99 for folks who are younger than 30. However, in the TechCrunch office we’ve seen Tinder Plus offered at the price of $14.99/month for a 30+ female user. We’ve reached out to Tinder to get a clearer picture of the Tinder Plus pricing structure and will update as soon as we know more. For now, however, we do know that pricing not only ranges based on age but by location. Users in emerging countries (Tinder is currently available in 140 countries across the globe) will pay as little as $2.99/month, while users older than 28 in developed markets like the UK will be paying approximately $23/month (and nearly 4x as much as their over 28-year-old counterparts). Tinder has been testing pricing in various markets for the past few months, but even without the complete information, it’s easy to get an idea of the general landscape here. Older users, who theoretically have less supply and offer less demand, should pay a greater amount for extra dating tools. Plus, they likely make more money than younger users. It’s Uber’s Surge pricing model applied to romantic endeavors. Tinder Plus also includes Passport, which allows users to search for matches anywhere in the world through the drop of a pin, as opposed to being locked into your current location. Tinder Plus also allows users to buy themselves out of advertisements, though Tinder has yet to launch any ad products just yet. Sources say that the ad product will launch later this month, but it’s unclear what exactly those ads will look like. As for the features launching today, they make a lot of sense given the current user behavior on Tinder. Rewind, in particular, appeals to just about anyone who has swiped left when they meant to swipe right. The company has seen over 6 billion matches in total, though it’s hard to say how many of those matches become anything. That’s not necessarily a bad thing for Tinder. The point is that it has become an addiction, with people mindlessly flipping through potential suitors and swiping based on a gut reaction.
- India’s Mobile Carriers Head Into $14 Billion Fight for Survival: What happens when a wireless operator with millions of customers loses the airwaves it needs to provide service? We may soon find out thanks to an unusual government auction taking place in India. The government will open the bidding Wednesday for airwaves already in use by the biggest carriers, including Bharti Airtel Ltd. and Vodafone Group Plc. They’ll have to compete to keep their licenses in the auction against Mukesh Ambani, who is India’s richest man and has signaled his determination by making the largest deposit of the competition. India’s approach, which is unlike what happens in the U.S., could mean seismic change for the world’s second-largest smartphone market. The airwaves up for auction serve more than 300 million customers and account for almost half of the $19 billion in combined revenue for the four largest operators. “For some of the telcos, renewal of spectrum is a key for survival,” said Nitin Soni, a director at Fitch Ratings in Singapore. Bharti, India’s biggest carrier, and second-ranked Vodafone could each spend as much as $4.5 billion for the spectrum, Soni said. Ambani’s Reliance Jio Infocomm Ltd. submitted a 45 billion-rupee ($726 million) bank guarantee, the most of any carrier, to participate in the auction, according to data from Mjunction Services Ltd., which is running the sale. Bharti Airtel was second with 43 billion rupees, and Vodafone gave a guarantee of 37 billion rupees. Any company losing previously held airwaves will probably have to shut down business in that region and abandon any investments or infrastructure it’s made. Companies also will lose revenue if they can’t switch to other bands, a move that would probably require new towers or technology. If companies shut down their business in a particular circle, their subscribers will have to look for new cellular operators, said Rishi Tejpal, an analyst at Gartner Inc. in New Delhi. “For some operators, it’s a do-or-die situation,” Tejpal said. “And with Reliance Jio in the picture, nobody knows their strategy.”
- It’s official #1: Google says it wants to offer cellular service: A top Google exec has confirmed what many have been speculating for months: That the search giant wants to start offering wireless service. Google isn't necessarily looking to become the next Verizon and AT&T, said Sundar Pichai, Google's head of Android, at the annual Mobile World Congress in Barcelona. But, according to various news reports, Pichai said we'll begin to see more details trickle out in the next few months as Google announces partnerships with wireless carriers and other businesses. Analysts say Google is likely to partner with firms such as T-Mobile and Sprint rather than build its own network from scratch. Asked whether Google's aim was to drive wireless prices down for consumers, Pichai responded that the experiment's goal is to showcase new mobile innovations, according to the Verge. An example: Technology that can automatically reconnect dropped calls. But by adding wireless service to its very long chain of mobile offerings, Google would be showcasing something nobody else has tried: A totally unified cellular experience that's entirely within the Google ecosystem. Google already sells a combination of hardware and software with its line of Nexus phones. Now, Google's wireless service — combined with a Google handset, the Android operating system, the Google app store and Google's own mapping, search and e-mail apps — stands to create a formidable vertical silo that goes far beyond the Nexus experiment.
- Its official #2: Olacabs acquires TaxiForSure for $200M in cash and stock: Online cab booking service Olacabs.com run by Mumbai-based ANI Technologies Pvt Ltd, has acquired Bangalore-based Serendipity Infolabs Pvt Ltd, which runs rival service TaxiForSure for $200 million (Rs 1,240 crore) in a cash and stock deal, as per a company statement. The breakup of the cash component of the deal could not be immediately ascertained but with the stock swap, TaxiForSure investors—Accel Partners, Helion Venture Partners, Bessemer Venture Partners and Blume Ventures would get small minority equity stakes in Ola. Ola’s backers include SoftBank, Tiger Global, Matrix Partners, Sequoia Capital and Steadview Capital. Ola is already the top player in its business and TaxiForSure is believed to be among the other large firms in its space. Both are locked in a pitched battle against global giant Uber and other local players such as hybrid venture Meru. The company said TaxiForSure will continue to operate as a separate entity, at least for now, with Arvind Singhal (currently COO) being appointed CEO. Aprameya Radhakrishna and Raghunandan G, co-founders of TaxiForSure, will contribute in an advisory role for a certain period. This is the second largest deal in the consumer internet/e-commerce business behind Flipkart’s acquisition of Myntra last year. That deal was reportedly worth over $300 million. TaxiForSure is currently present in 47 cities with over 15,000 vehicles registered on its platform. Ola said the deal compliments the two companies, as TaxiForSure follows a different model of supply and distribution by working with cab operators compared to Ola’s model of working with drivers who own their own cabs.
- Alibaba and top Chinese university launch new education portal for MOOCs: One of China’s most highly regarded universities has partnered with the country’s biggest ecommerce company to create a new website for massive open online courses, or MOOCs. The generically named Chinese MOOCs was just launched by Peking University and Alibaba as schools around the country begin their new semesters following the Chinese New Year holiday (h/t to TechNode). Chinese MOOCs lists 26 courses, covering subjects in science, law, literature, music, and IT. The website lists six other universities that are apparently on board, including the University of Hong Kong, National Taiwan University, and Beijing Normal, but all the courses currently offered are from Peking University (note: Peking University is also known as Beijing University, or Beida, for short). Using a model similar to Coursera, Chinese MOOCs combines video lectures, quizzes, and other coursework to educate students, who can take courses for free and opt to pay for certificates upon completion. There’s no limit to the number of students per course.
- U.S. millennials post ‘abysmal’ scores in tech skills test, lag behind foreign peers: The test is called the PIAAC test. It was developed by the Organization for Economic Co-operation and Development, better known as the OECD. The test was meant to assess adult skill levels. It was administered worldwide to people ages 16 to 65. The results came out two years ago and barely caused a ripple. But recently ETS went back and delved into the data to look at how millennials did as a group. After all, they’re the future – and, in America, they're poised to claim the title of largest generation from the baby boomers. U.S. millennials, defined as people 16 to 34 years old, were supposed to be different. They’re digital natives. They get it. High achievement is part of their makeup. But the ETS study found signs of trouble, with its authors warning that the nation was at a crossroads: “We can decide to accept the current levels of mediocrity and inequality or we can decide to address the skills challenge head on.” The challenge is that, in literacy, U.S. millennials scored higher than only three countries. In math, Americans ranked last. In technical problem-saving, they were second from the bottom. But surely America’s brightest were on top? Nope. U.S. millennials with master’s degrees and doctorates did better than their peers in only three countries, Ireland, Poland and Spain. Those in Finland, Sweden and Japan seemed to be on a different planet Top-scoring U.S. millennials – the 90th percentile on the PIAAC test – were at the bottom internationally, ranking higher only than their peers in Spain. The bottom percentile (10th percentile) also lagged behind their peers. And the gap between America’s best and worst was greater than the gap in 14 other countries. This, the study authors said, signaled America’s high degree of inequality. The study called into question America’s educational credentialing system. While few American test-takers lacked a high school degree, the United States didn’t perform any better than countries with relatively high rates of failing to finish high school. And our college graduates didn’t perform well, either. “Abysmal,” noted ETS researcher Madeline Goodman. “There was just no place where we performed well.”
- Netflix Q4 revenue $1.3B (+35.7% Y/Y); net income beat, profit outlook for 2017 sends shares up 16%: Netflix will expand to 200 countries, raise $1B in debt to create original content: Netflix Revenue rose 35.7 percent, to $1.3 billion, compared with the year-earlier period. Net income for the quarter was $83 million, or $1.35 a share, up from $48 million a year earlier, because of a benefit related to the resolution of a tax audit. Without that tax benefit, net income would have been $45 million, beating the forecast for $27 million. The company lost less money than it had expected in its international business and also benefited from other tax credits. The company said it had exceeded its forecast for total paid streaming subscribers. That number increased to 54.5 million in the quarter that ended Dec. 31, 2014, up 31.5 percent from the same period in 2013. n the United States, Netflix had 39 million streaming members in the fourth quarter, a net addition of 1.9 million. In the year-earlier period, it added 2.3 million members. For the coming quarter, Netflix predicted that growth would slow further. Netflix is pouring resources into original productions. Investors sent the shares up as much as 16 percent after the Los Gatos, California-based company said it will profitably reach all 200 of the countries that have broadband Internet service within two years. “We then intend to generate material global profits from 2017 onwards,” Chief Executive Officer Reed Hastings and his finance chief, David Wells, said today on the company’s website. The outlook reassured investors who have expressed concerns about the company’s narrow margins, widening international losses and a budget for films and TV shows that’s swollen to $9.5 billion from $7.3 billion in the past year. Netflix rose 15 percent to $404.01 in extended trading. It reached as high as $405.70 following fourth-quarter results that included better-than-predicted subscriber growth. The stock gained 3.4 percent to $348.80 at the close in New York. International subscriber growth outstripped gains in the U.S. for the third straight quarter, as Hastings raced to plant his flag before other would-be competitors. Users outside the U.S. expanded by a record 2.43 million in the fourth quarter, reaching 18.3 million. Fourth-quarter revenue rose 26 percent to $1.48 billion, compared with analysts’ predictions of $1.49 billion. Net income almost doubled to $83.4 million, or $1.35 cents a share, aided by a tax benefit, Netflix said on its website. Domestically, the company added 1.9 million new customers to reach 39.1 million, compared with the 1.85 million predicted. That brought the worldwide total to 57.4 million. This quarter, Netflix forecasts 1.8 million new U.S. customers. Profit will be $37 million, or 60 cents a share. To support its programming efforts, Netflix plans to borrow at least $1 billion. The company’s has committed to spending $9.5 billion on programming.
- IBM misses on both topline and bottomline, posts 11th straight quarterly revenue declines, shares down 1.8%: International Business Machines Corp posted a new 2015 profit target and quarterly revenue that both missed analysts' estimates, as the one-time world technology leader continues to grapple with its journey from low-margin hardware maker to the new world of cloud computing.Shares of IBM, which is still the world's largest technology services company, but no longer regarded as a leader in innovation, fell 1.8 percent to $154.05 in extended trading. It was the 11th straight quarter that the Armonk, New York-based company has reported falling quarterly revenue, including the effects of currency. It has seen shrinking revenue for three years now as it sheds low-profit businesses such as cash registers, low-end servers and semiconductors and tries to focus on emerging areas such as security software and cloud services. But the new businesses have so far failed to make up for revenue lost to divestitures. Annual revenue fell to $93 billion for 2014, from $107 billion in 2011. The company had no guarantee that it would not fall further. "We're not interested in revenue for revenue's sake," IBM Chief Financial Officer Martin Schroeter told Reuters in a phone interview. "We'll continue to divest if something doesn't fit the model." The struggle to make headway in the new Internet-based technology industry is shared by other longstanding giants. SAP SE, Europe's largest software group, on Tuesday cut key profit forecasts and abandoned a target for higher margins. "IBM as well as other tech stalwarts such as Oracle, SAP, HP and Cisco face major headwinds as they adjust to this new cloud paradigm shift, which coupled with a cloudy IT spending environment have negatively impacted results," said Daniel Ives, an analyst at FBR Capital Markets. IBM is in the midst of a challenging transition, and its fourth-quarter financial results reflected that reality. The technology giant on Tuesday reported quarterly declines in both sales and profits, though its earnings were above Wall Street’s diminished expectations. The company said net income in the quarter fell to $5.5 billion, down 11 percent from the same quarter a year ago. The company’s operating earnings declined to $5.81 a share, above the average estimate of analysts for $5.41 a share, as compiled by Thomson Reuters. IBM’s revenue slid to $24.1 billion, well below the $27.7 billion in the year-earlier quarter. Its quarterly sales were somewhat below Wall Street’s consensus forecast of $24.8 billion. In after-hours trading, IBM’s stock price slipped $2.90 a share, or about 1.9 percent, to $154.05. The new businesses the company has earmarked for growth — data analytics, cloud, security and mobile apps for corporations — grew at a 16 percent rate in 2014 and contributed $25 billion in revenue, or 27 percent of the company’s total sales. These growth businesses, he said, should continue to expand at a double-digit rate. But analysts question how well IBM is doing in achieving its objectives.
- Twitter's makes first India acquisition, buys missed call startup Zipdial for $30-40M; gains a Bangalore office and a way to engage customers offline: Twitter acquired Indian startup Zipdial earlier today, signaling that the social network is doubling down on the fast changing Indian market. But the ramifications of the buy-out don’t stop there. What Zipdial does is give companies a way to engage with people without forcing consumers to make calls, send SMS, or go online. All people have to do is send a missed call to a specific number belonging to a brand or service, and that subscribes the individual to relevant updates. It’s a little bit like Twitter, except it works mostly offline. And now that Twitter owns Zipdial, that way of operating will be used by the social network in India and a lot more countries. “It can drive growth in other similar emerging markets, like Indonesia or Brazil,” says Rishi Jaitly, Twitter’s market director for India and Southeast Asia. While there are no specific plans yet, Jaitly explains to Tech in Asia that Zipdial has experience across Southeast Asia and Africa, so the know-how is ready to roll. What Zipdial offers Twitter, says Jaitly, is a way for people to “connect to digital content offline. Jaitly says those early experiments in conjunction with Zipdial worked well. Those allowed India’s phone users to make a missed call to follow certain celebrities on Twitter. This worked entirely offline, by receiving SMS updates, and didn’t require the individual to sign up to Twitter. “All kinds of people on all kinds of devices consumed content” through those projects, says Jaitly. “You can expect us to draw lessons from experiments with Zipdial and scale them up,” he adds. The acquisition – Twitter’s first in India, and which gives it a Bangalore office – leaves Twitter with a lot moves it can make in emerging markets, which also opens up new revenues streams from brands and media using this “missed call” service to engage with consumers. Although deal size was not disclosed, separate media reports pegged it at $30-40 million. ZipDial’s user experience combines SMS, voice, mobile web and access to mobile apps to bridge users from offline to online. The company’s core business model, though, was built on leveraging the ubiquitous behaviour of ‘missed calls’ between friends and applying them as an offline call-to-action for brand engagement. For example, through ZipDial, one can engage with a publisher or brand by making a toll-free ‘missed call’ to a designated phone number. The caller will then begin receiving inbound content and further engagement on his/her phone in real time through voice, SMS or an app notification. These interactions are especially appealing in areas where people aren’t always connected to data or only access data through intermittent Wi-Fi networks. Additionally, prepaid recharge or top-up (money added to a user’s prepaid mobile account) is considered as valuable as currency in emerging markets. That became a foundation for the company’s couponing and gratification products.
- Alibaba is everywhere: invests in an Israeli QR code startup, and also seeks a stake in a giant state-owned Chinese insurance firm: QR Codes: Alibaba invests in Visualead, an Israeli startup that generates QR codes. Alibaba has announced it has helped raise a series B round in Israel’s Visualead, a startup that lets users generate visually appealing QR codes. The size of Alibaba’s investment remains undisclosed, but Visualead has previously raised US$2.4 million to according to CrunchBase. Visualead helps small business create QR codes that blend into images more seamlessly than standard black-and-white QR codes. Using the company’s web-based service, users can upload images, specify urls, and generate QR codes that mesh into the particular graphic. The company offers numerous tiers for individuals and enterprises based on the number of QR codes they hope to create. According to a release from Visualead, Alibaba will help its Taobao and Tmall vendors integrate Visualead into their marketing initiatives. The Chinese ecommerce giant has its own QR-code initiative, Mashangtao, which helps merchants create QR codes for any number of purposes like parcel tracking or marketing. Insurance: Alibaba is planning to buy shares in the state-run New China Life Insurance Shanghai Securities News said on Wednesday, citing unnamed sources. Alibaba is already invested in China's insurance market. The founders of Alibaba and Tencent Holdings Ltd (0700.HK) were among a consortium of investors who purchased stakes in Ping An Insurance Group Co of China Ltd (2318.HK) (601318.SS) in a HK$36.5 billion ($4.7 billion) deal in December. New China Life Insurance has a market capitalisation of $24 billion and provides life insurance services and products.
- Alibaba, Tencent and Baidu are starting to make increasingly similar investments and behave more and more alike: Before China became the biggest smartphone market, there was little overlap between the businesses of e-commerce leader Alibaba Group Holding Ltd, social networking firm Tencent Holdings Ltd and search engine provider Baidu Inc. Now, as more and more Chinese use their phones for everything from shopping to booking restaurants, the three companies are increasingly stepping over each other - and investing in the same services - to attract the same users. In little over a month, taxi-hailing apps Didi Dache, supported by Tencent, and Alibaba-funded Kuaidi Dache raised over half a billion dollars each, while U.S. taxi app Uber attracted an undisclosed sum from Baidu. The next arena looks set to be group-buying services, where customers agree to buy a certain item or service at the same time to gain discounts. Baidu bought out Nuomi last year and Alibaba-backed Meituan on Monday said it raised $700 million, valuing the company at $7 billion.
- Rumors have it that Olacabs might be close to raising another $300-500M at $2B: Barely three months after Mumbai-based ANI Technologies Pvt Ltd, the company behind Olacabs, an online marketplace for cabs and car rental services, raised $210 million led by SoftBank, it is back in the market to scoop between $300-500 million more, sources privy to the development told Techcircle.in. “Ola has doubled in size in terms of revenue run rate since its last fundraise when it was valued at $1 billion. It is now seeking twice the valuation,” said one of the sources. The source added that it is likely to rope in at least two new investors including a New York-based fund besides a Hong Kong-based fund house, besides participation from most of its existing investors. “While one of the new investors is a hedge fund, the other is a PE investor,” he said. The proposed fundraising, which would be its Series E or fifth round of institutional funding, would strengthen its position as the most heavily funded player in its business. It would also make it the third most funded new generation tech venture behind Flipkart and Snapdeal. One97 which operates Paytm is in the final stage of scooping a large round. Olacabs had raised $210 million in its Series D round led by Japanese internet and telecom giant SoftBank. Previously, it raised Rs 250 crore ($41.8 million) in its Series C round of funding led by Hong Kong-based hedge fund manager Steadview Capital and Silicon Valley-based Sequoia Capital. Existing investors Matrix Partners India and Tiger Global Management also participated in this round. In November 2013, Olacabs had raised its Series B round of funding led by Matrix Partners India for a big minority stake, with participation from existing investor Tiger Global Management. Although the company had not disclosed the amount at the time, media reports pegged it at $20 million. Prior to that, it had raised Rs 19.2 crore ($3.2 million) from existing investor Tiger Global in July the same year, which was believed to be part of the same round. Back in 2012, the company had raised over $5 million in its Series A funding from Tiger Global. Prior to that, it had raised angel funding from a bunch of individual investors, including Rehan Yar Khan and Anupam Mittal. In the cab booking segment, Ola is seen as the biggest player competing with Google Ventures-backed global major Uber and domestic players such as TaxiForSure (backed by Accel Partners and Bessemer Venture Partners), Savaari, taxiGUIDE and Cabs24X7.
- Big-data based lending story #1: Small startups attempt to use borrower profiling models that use behavioral signals to cut default rates on student loans, personal loans: When bankers of the future decide whether to make a loan, they may look to see if potential customers use only capital letters when filling out forms, or at the amount of time they spend online reading terms and conditions — and not so much at credit history. These signals about behavior — picked up by sophisticated software that can scan thousands of pieces of data about online and offline lives — are the focus of a handful of start-ups that are creating new models of lending. No single signal is definitive, but each is a piece in a mosaic, a predictive picture, compiled by collecting an array of information from diverse sources, including household buying habits, bill-paying records and social network connections. It amounts to a digital-age spin on the most basic principle of banking: Know your customer. Yet the technology is so new that the potential is unproved. Also, applying the modern techniques of data science to consumer lending raises questions, especially for regulators who enforce anti-discrimination laws. None of the new start-ups are consumer banks in the full-service sense of taking deposits. Instead, they are focused on transforming the economics of underwriting and the experience of consumer borrowing — and hope to make more loans available at lower cost for millions of Americans. Earnest uses the new tools to make personal loans. Affirm, another start-up, offers alternatives to credit cards for online purchases. And another, ZestFinance, has focused on the relative niche market of payday loans. They all envision consumer finance fueled by abundant information and clever software — the tools of data science, or big data — as opposed to the traditional math of creditworthiness, which relies mainly on a person’s credit history. Investors certainly see the potential; money and talent are flowing into this emerging market. Major banks, credit card companies and Internet giants are watching the upstarts and studying their techniques — and watching for the perils. By law, lenders cannot discriminate against loan applicants on the basis of race, religion, national origin, sex, marital status, age or the receipt of public assistance. Big-data lending, though, relies on software algorithms largely working on their own and learning as they go. The danger is that with so much data and so much complexity, an automated system is in control. The software could end up discriminating against certain racial or ethnic groups without being programmed to do so. The data-driven lending start-ups see opportunity. As many as 70 million Americans either have no credit score or a slender paper trail of credit history that depresses their score, according to estimates from the National Consumer Reporting Association, a trade organization. Two groups that typically have thin credit files are immigrants and recent college graduates. Affirm says it is on track to lend $100 million during its first 12 months. More than 100 online merchants are now using its installment loan product, Buy With Affirm. Next up, the company says, will be student loans. Earnest was founded in 2013, and began lending last year. In 2014, its loans reached $8 million, growing gradually. By December the month-to-month growth rate was 70 percent, Mr. Beryl said. The typical Earnest loan is for a few thousand dollars, though they can range up to $30,000. Many of the loans are for relocation expenses and for professional training.
- Big-data based lending story #2: Payday loans - where every borrower has poor history - attract big data models too, but fairness and discrimination concerns persist: The payday market is a niche compared with mainstream consumer and credit-card loans, two markets where start-ups are now applying data science to lending, as I wrote about in an article on Monday. Still, the payday market is a sizable niche. At any given time, there are an estimated 22 million payday loans outstanding, and the fees paid by payday borrowers amount to about $8 billion a year — a lot of money for those in the working population least able to afford it. Mr. Merrill saw a market in need of greater efficiency, a business opportunity — and the potential to lower costs to borrowers. ZestFinance has been practicing big data-style underwriting longer than most other start-ups. Founded in 2009, ZestFinance made its first loan in late 2010 and has increased its lending steadily since, having underwritten more than 100,000 loans. Its loans are called ZestCash, and the company is authorized to be a direct lender in seven states including Texas, Louisiana and Missouri. ZestFinance also handles the underwriting for Spotloan, an online lender that is part of BlueChip Financial, which is owned by the Turtle Mountain Band of the Chippewa Indian tribe of North Dakota. Winning over state regulators has been a slow process. “We’re showing up with a different kind of math,” said Mr. Merrill, who is now the chief executive of ZestFinance. “And that’s going to make it more difficult from a regulatory standpoint.” A healthy dose of caution is in order, policy analysts say. A recent report, by Robinson & Yu, a policy consulting firm, looked at new data methods as a way to make credit available to more Americans. In the report, supported by the Ford Foundation, ZestFinance was the featured example of big data underwriting, which it called “fringe alternative scoring models.” “I have no doubt that they have come up with neat correlations that are predictive,” said Aaron Rieke, co-author of the report and a former lawyer at the Federal Trade Commission. But the concern about ZestFinance and other start-up lenders using big data methods, Mr. Rieke said, is that “we have no idea how to talk about or assess the fairness of their predictions.” Mr. Merrill believes that such qualms will fade as data science lenders build a track record of offering lower costs and greater convenience to borrowers. The typical payday loan, Mr. Merrill explains, is for a few hundred dollars for two weeks, and rolls over 10 times on average, or 22 weeks. In a traditional payday loan, all the fees are paid upfront with the principal paid at the end, in a “balloon” payment. With ZestCash loans, borrowers are paying down principal with every payment, which reduces the cost. It also charges lower fees. In a traditional payday loan, Mr. Merrill said, a person would typically pay $1,500 to borrow $500 for 22 weeks. Using ZestCash, he says, a borrower generally pays $920 to borrow $500 for 22 weeks — still hefty fees, but far less than a standard payday loan. ZestFinance can charge less, Mr. Merrill said, largely because its data-sifting algorithms reduce the risk of default by more than 40 percent compared with a typical payday loan, and the software is being constantly tweaked to improve further. Borrowing candidates are asked to fill out an online form with their name, address, Social Security number, bank account information and a few other questions. ZestFinance then combines that with streams of information from data brokers and online sources, and sets its algorithms to work. The automated risk analysis, Mr. Merrill said, is done in a matter of seconds. The person is informed of the decision online. If approved, a customer service representative soon calls to verify the borrower’s identity, double check on numbers, and go through the loan terms again by phone. The data signals used to assess risk in the payday market are different than for most consumer loans. “In our space,” Mr. Merrill observed, “virtually everyone has a bankruptcy.” In payday underwriting, by contrast, signs of financial stability would include how long a person has had his or her current cellphone number or the length of time on a current job.
