Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 51)

Episode 44

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Top startups news to follow this week:

1. It’s the French Presidency of the Council of the European Union right now. And the French government is taking advantage of this opportunity to make some progress on the tech startup policy front. In an interview with TechCrunch, France’s digital minister Cédric O shared some news for the European tech ecosystem.

During the Portuguese Presidency of the Council of the EU, Portugal announced that it would go one step further and create the European Startup Nations Alliance (ESNA). It’s a new entity that is in charge of the Startup Nations Standard. In addition to compiling best practices, it can provide technical support and monitor progress.

Around the same time, French President Emmanuel Macron launched a different group called Scale-Up Europe. Tech companies, investors and associations signed a manifesto with the goal of reaching 10 tech companies that are worth €100 billion or more by 2030.

“In order to structure a strong European ecosystem, financing is key. We still want to attract investments from the whole world. But we also want to enable European venture capital with European funds, European knowledge and European teams,” Cédric O told me.

“Our goal is to create 10 to 20 funds with more than €1 billion. As a reminder, today, there are two funds with more than €1 billion in Europe compared to 40 funds in the U.S. These funds are Eurazeo and EQT — a French fund and a Swedish fund.”

This new funds of funds will invest as a limited partner in large late-stage European funds. With this new mechanism, fund managers should be able to raise a new fund more easily. For instance, if the EIF says they’re willing to invest €100 million or €200 million in a fund, it should attract more institutional investors in this new fund.

Some national investment banks, such as Bpifrance, have also been backing funds in their own countries. In France, private insurance companies and public investors are also participating in the late-stage funds following the Tibi initiative.

2.The global logistics robots market size is projected to reach USD 17.82 billion by 2028, exhibiting a CAGR of 16.4% during the forecast period. According to a report by Fortune Business Insights™, titled “Logistics Robots Market, 2021-2028”, the market value was estimated to stand at USD 5.38 billion in 2020 and is expected to touch USD 6.17 billion in 2021.

Increasing Adoption of Smart Warehousing Tools to Boost the Market

Managing warehouse operations can be a tedious task and companies are eagerly adopting smart technologies, mainly artificial intelligence and robotics, to optimize warehousing activities. For example, in May 2021, Locus Robotics deployed autonomous mobile robots, equipped with dashboards and reporting capabilities, for Taylored Services, a warehousing company. After the robots were rolled out, the company reported immediate productivity gains and improved client satisfaction. Logistics robots are proving to be especially useful for e-commerce companies, which extensively utilize warehousing services. In October 2018, for instance, Alibaba-owned Cainiao inaugurated a warehouse with 700 robots operating in it in China. Similarly, in June 2018, Google invested USD 500 million in China-based JD to leverage its expertise in automated supply chain and logistics. Thus, warehousing management powered by robotics and AI will significantly augment the outlook of this market.

By type, the market’s segments include automated guided vehicles, autonomous mobile robots, robot arms, and others. Based on application, the market is divided into palletizing &de-palletizing, pick & place, transportation, and others. In terms of industry, the market is distributed into e-commerce, healthcare, retail, food & beverages, automotive, and others. Geographically, the market has been categorized into North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.

3. Specialist VC (formerly known as United Angels VC) has announced the first close of a new €50 million fund at €42 million. The main focus of the fund is on pre-seed and seed stage startups and is the first of its kind in the Baltic region to implement a dual strategy of integrating secondary transactions into a traditional venture capital fund. 

Founded in 2017 by Riivo Anton and Gerri Kodres, Specialist VC is an Estonian-based tech investor that focuses on B2B, SaaS, fintech and marketplace startups in the Baltic region. So far, the firm has invested in and built long-term relationships with over 45 tech companies. Specialist VC has unicorns such as Bolt and Veriff in its portfolio, alongside stand-out startups such as Starship, COMODULE, Monese, and NFTPort. 

Founding Partner Riivo Anton said: “We are continuing our mission to help the founders of this region build impactful global companies. The region has been a remarkably successful breeding ground for startups, with Estonian startups alone raising close to a billion euros of funding in 2021. We see Latvia and Lithuania following the same path.” 

According to EU-Startups, Specialist VC Fund II will invest in over 40 startups from Estonia, Latvia, Lithuania, and Finland, including founders from these countries who are building their startup elsewhere in the world, and founders from Ukraine and Belarus who are building their businesses in the European  Union. The fund will focus on, but is not limited to, investing in tech startups raising pre-seed and seed rounds in B2B, SaaS, fintech, platforms, software-enabled hardware, Web3, and deep tech verticals. A third of the fund volume is reserved for opportunity investing in secondary transactions into companies beyond Series A.

4. Bloomberg reports, that South Korea’s $200 billion sovereign wealth fund plans to boost investments in Silicon Valley startups as it looks to the metaverse and artificial-intelligence to accelerate its expansion in alternative assets.

Seoungho Jin, who took over the reins of Korea Investment Corp. in mid 2021, also has his eyes on hotels, which he sees as a good play on the global recovery from the coronavirus pandemic.

Jin is looking beyond the recent downturn in listed technology stocks and the wider risks to the sector this year from the Federal Reserve driving interest rates higher. He sees alternative assets accounting for about 25% of KIC’s portfolio by 2025, versus around 17% last year, and assets under management eventually rising to $300 billion.

“Some investors say Silicon Valley is already saturated, which I have to concede is partly true, but it is still a source of global growth,” Jin, 59, said in an interview in Seoul. “There are still plenty of good opportunities, if you chase them eagerly.”

KIC has almost doubled in size over the past five years, after a slow start when it was created in 2005 to increase national wealth and contribute to the nation’s finance industry. The fund, which only invests outside of South Korea, has yet to release its results for 2021.

Jin expects to add to headcount in the fund’s San Francisco office in this year to explore investments in tech, health and green ventures in Silicon Valley. He didn’t offer details on any specific investments.

In a wide-ranging interview with Bloomberg, Jin also said:

• KIC will continue to seek investments in real estate, including hotels, which should benefit as travel increases
• The fund’s allocation to alternative assets, including private equity and hedge funds, will increase by about 2 percentage points in 2022
• Fixed-income assets will be trimmed by around 3 percentage points this year as global monetary policy normalizes. Equities holdings will increase slightly
• KIC is looking at floating-rate notes or other debt products that could hedge against rising interest rates
• Indian bonds look attractive among emerging-market debt amid relatively firm corporate earnings and a good investment environment
• KIC has employed more quantitative strategies recently and given its expectation for market volatility it will add more staff in this area
• It has also created a team for ESG, which is being factored into all investment decisions, and plans to increase staff in this area

5. Tech Crunch reports, French startup Alma is trying to build a new “buy now, pay later” giant in Europe. The company has closed a $130 million Series C round (€115 million). It has also raised $109 million (€95 million) in debt financing.

Tencent, GR Capital and Roosh Ventures are investing in the startup for the first time. Some of the startup’s existing investors are investing once again, such as Cathay Innovation, Eurazeo, Bpifrance’s Large Venture fund, Seaya Ventures and Picus Capital. Overall, it has raised $211 million (€185 million) in traditional equity funding rounds.

The company has partnered with 6,000 merchants so that they offer more flexibility for expensive purchases. The main payment product is the option to pay in two, three or four installments.

But the company also offers different plans. For instance, Alma offers 10-month or 12-month plans. Those options are particularly popular with some specific purchases, such as consumer electronics devices or furniture.

Finally, Alma has a payment option that lets you buy something and pay 15 or 30 days later. This could be particularly useful for clothing items and other goods that you think you might like, but you might end up returning.

Overall, Alma processes more than €1 billion annually with its current run rate. It doesn’t charge late payment fees, as the company thinks it isn’t aligned with consumers’ interests. Some companies, such as PayPal, have dropped late fees on BNPL installments. Others generate some revenue from those late interests.

Instead, Alma charges payment processing fees. Some merchants choose to pay those fees directly, hoping that it’ll increase sales. Other merchants share those fees with the end customers. It’s up to the merchant.

6. In 2021, some 60% of Americans ordered takeout or delivery at least once a week, and 31% used a third-party delivery service. Market Study Report predicts the global restaurant management software market to grow nearly 15% annually to reach $6.95 billion by 2025.

However, we’ve all had that experience where you receive your food delivery only to find the order is wrong. Agot AI is using machine learning to develop computer vision technology, initially targeting the quick-serve restaurant (QSR) industry, so those types of errors can be avoided.

The company was founded three years ago by Evan DeSantola and Alex Litzenberger to solve that operations perspective in restaurant technology, reward employee success and improve a restaurant’s customer satisfaction.

Its product confirms order accuracy in real-time for online ordering and notifies employees if an order needs a correction; for example, they forgot to add cheese or ketchup.

Since unveiling its technology, the company has worked with a group of large food service brands to deploy it, including Yum! Brands, which Agot is partnering with to pilot the technology in about 20 restaurants (with plans to expand to 100 restaurants if the pilot is successful), CEO DeSantola told TechCrunch.

Gavin Felder, chief strategy officer at Yum! Brands, said via a written statement that the company is “always looking for innovative ways to leverage technology to empower our team members, and improve both their experience and the customer experience in our restaurants,” and that early results from the pilot program “indicate a promising potential to deliver more accurate orders to our customers across all the channels we serve.”

Yum! Brands isn’t just a customer, but one of Agot AI’s investors — it participated in Agot’s $12 million funding round that included Conti Ventures, the venture arm of strategic investor Continental Grain Co., Kitchen Fund and Grit Ventures. That brings the company’s total fundraising to date to $16 million.

Agot will deploy its new capital into growing its engineering team, securing more pilot programs with QSR brands and adding more features so restaurants can provide better overall experience both at the drive-thru and behind the counter.

7. There’s no denying the growth of health tech globally over the past three years thanks to the pandemic. The event has accelerated the use of telemedicine, virtual care and drug delivery, thus fuelling investor interest in the sector.

Investment has also trickled down to Africa, with large checks going into growth-stage startups. Lagos- and Texas-based digital healthcare provider Reliance Health is the latest beneficiary and is doing so in grand style, raising $40 million. The Series B round is the largest of its kind in African health tech.

Reports say health tech in Africa should reach a market value of over US$11 billion by 2025, and Reliance Health is looking to play a pivotal role in the continent reaching that capitalization.

The company was founded in 2016 by Femi Kuti, Opeyemi Olumekun and Matthew Mayaki. It uses an integrated process to provide health insurance and telemedicine via partnerships with hospitals and healthcare facilities.

Our mission is super simple. I mean, the definition is simple, but the execution is sometimes more difficult than that,” chief executive Kuti told TechCrunch on a call. “So essentially what we’re trying to do is to use technology to make quality health care accessible and affordable in emerging markets.”

8. Enterprise artificial intelligence (AI) solutions startup Mozn has raised $10 million in a Series A funding round, the Saudi company said in a news release Friday (Feb. 4).

Founded in 2017, Mozn helps enterprises to “make better mission-critical decisions through AI products and solutions that leverage its proprietary state-of-the-art Arabic Natural Language Understanding (NLU) platform, as well as its cutting-edge risk and fraud engine,” the firm said.

NLU allows machines to read and process text-allowing applications like information extraction, text summarization, text classification and question-answering, with better bandwidth and precision than manual processing.

Mozn said in a statement it will use the funds to enhance the NLU engine and unlock use cases that previously would not have been possible for the 2 billion people worldwide speaking Arabic and other related languages.

The company says it also recently launched a Focal Anti-Money Laundering suite, designed to help financial institutions and governments deal with financial crimes. Mozn says it’s an industry that represents more $200 billion worth of opportunities worldwide

9.The Australia energy storage systems market is expected to register a CAGR of greater than 10% during the forecast period of 2022 – 2027. The COVID-19 outbreak had witnessed a moderate impact on the Australian energy storage system market as the country witnessed a slight decrease in operational activities as well as delays in the ongoing industrial and commercial projects in H1 2020, which occurred due to the shutdown of the battery manufacturing/installation facilities and labor shortage in several industries.

Battery energy storage system (BESS) type is expected to witness significant growth during the forecast period, owing to the rising demand for grid-connected solutions and the increasing adoption of lithium-ion batteries in the renewable energy industry.
The development of new advance batteries along with the increasing commecilization of compressed air energy storage (CAES) technology is expected to creates several opportunities to the Australian energy storage systems (ESS) providers in the future.
The growing renewable energy sector is one of the primary drivers of energy storage systems in Australia. This is due to the increasing demand of solar and wind energy sources, accounting for over 18% of the country’s total electricity generation in 2020.

10. The “Clean Energy Technologies Market by Technology (Hydropower, Clean coal, Wind, Solar, and Others) and Geography (APAC, Europe, North America, and ROW) – Forecast and Analysis 2021-2025” report projects that the potential growth difference for the clean energy technologies market between 2020 and 2025 is USD 81.65 billion. The report also identifies the market to register an accelerating growth momentum at a CAGR of 5.22% during the forecast period.

The increase in investments in clean energy technologies and rising demand for clean energy sources are some of the key market drivers. Stringent government regulations on minimizing carbon emissions and promotion of clean energy technologies such as solar PV and wind farm across the world has increased considerably in the recent years. Furthermore, in a view to promote the usage of green technologies, there has been a rise in investments in clean energy technologies such as solar energy, nuclear energy, and energy-efficient coal-fired power generation. This will further fuel the market’s growth during the forecast period.

However, factors such as competition from other sources of energy will challenge market growth. The use of fossil fuels such as coal, oil, natural gas, and other non-renewable energy sources accounts for a significant portion of the global energy mix which is expected to impede the growth during the forecast period.  Moreover, the cost of the establishment of renewable energy farms for power generation is quite high, and the power output from renewable sources is not at par compared with the output from non-renewable sources such as coal and natural gases. Such factors are projected to negatively impact the growth of the global clean energy technologies market during the forecast period.