Connect with us

Uncategorized

Cleo, the AI-powered ‘financial assistant’, raises $44M Series B led by EQT Ventures

Published

on

Cleo, the London founded “financial assistant” that takes the form of an app and chatbot and now counts the U.S. as its largest market, has raised $44 million in Series B funding.

Leading the round, which I understand actually closed earlier this year, is EQT Ventures. Also participating are existing investors Balderton Capital, LocalGlobe and SBI.

They join much earlier investors such as Entrepreneur First, Taavet Hinrikus, Matt Robinson, Errol Damelin, Niklas Zennstrom, Alex Chesterman, and Ian Hogarth — all well-known names in London’s tech investment community.

Targeting “Gen Z” and with a rather lofty sounding mission to “fight for the world’s financial health,” Cleo’s AI/machine learning-powered app connects to your bank accounts and gives you proactive advice and information on your finances, including timely nudges, to help you stay on top of your spending. Over time, the idea is that Cleo can help change your financial behaviour for the better.

The broader premise is that Cleo can replace your bank’s own app, and by speaking to you in a more human and user-friendly way, improve your financial health. In addition, and crucially — as Cleo founder Barney Hussey-Yeo is fond of arguing — the company can do all of this without having the same cost base or misaligned incentives of an actual bank.

The assumption made in 2017, when Cleo really got off the ground, was that through a combination of data science and machine learning, delivered in a fun and openly gamified way, the company’s financial assistant chatbot could attract and retain gen z and millennial users. Then, after engaging with the app, users would have experienced enough value to upgrade to a paid subscription or various financial services offered through Cleo now or in the future. With 4 million registered users — 96 percent of whom are in the U.S. — the first part appears to be panning out.

Hussey-Yeo tells me the new funding round gives him a “mandate” to take some big product bets in order to move forward the financial health of Cleo’s users. “[Those product bets] won’t all work out, but if one or two of them connects, we’ll fundamentally change the game in some of the most broken areas in financial services”.

In addition, the company will expand its operations in the U.S., including building out executive and product teams in San Francisco.

“When we launched in the U.S it became quickly apparent that it would be our dominant market,” says the Cleo founder. “We were signing up about 1,000 users per day in the U.K. at the time. After [just] a week, we were at 10,000 per day in the U.S. and kept growing”.

Hussey-Yeo attributes a lot of the success state-side to better banking APIs in the U.S. with Plaid, which he says “dramatically drove up” conversion rates and lowered customer acquisition costs. “This combined with a much larger market focused us 100% on winning in the U.S. first. This race is far from played out”.

Hussey-Yeo says Cleo will always offer a free version “because everybody needs the ability to make smarter decisions about their financial lives”. In contrast, the premium product costs $5.99 per month and is intended for people who “need a little extra help,” providing features such as gamified savings, and “levelled up” credit scores with coaching. Premium users can also trigger a $100 salary advance designed to stop them dipping into a costly bank overdraft.

Meanwhile, Cleo says it has grown revenue by 400 percent in the last twelve months, and Hussey-Yeo tells me the company is now doing $10 million-plus ARR. In a further nod towards stronger unit economics, the cost to acquire a user is now less than $2 with the vast majority of users acquired organically.

“So we’re definitely not in growth at all costs mode,” he says. “We’ve worked hard over the last 12 months to bring our payback period comfortably under 12 months which is an incredibly rare feat at scale for fintech”.

One interesting aspect of Cleo’s mission and the strong “personality” its chatbot exhibits, is that the problem space the company is tackling is potentially based on behavioural science as much as it is data science. Hussey-Yeo doesn’t disagree.

“This is where the idea of a conversational interface came from,” he says. “I realised you could break the complexity down into a language anyone could engage with, and I mean actually look forward to engaging with it, to ultimately change their behaviour.

“Today we have an outstanding machine learning department but just as importantly is the behavioural researchers and writers at Cleo. We know this is the combination that makes Cleo special and, I hope, will eventually lead to us being the financial advisor for a billion people”.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

Continue Reading
Comments

Uncategorized

President Joe Biden commits to replacing entire federal fleet with electric vehicles

Published

on

President Joe Biden said Monday the U.S. government would replace the entire federal fleet of cars, trucks and SUVs with electric vehicles manufactured in the United States, a commitment tied to a broader campaign promise to create 1 million new jobs in the American auto industry and supply chains.

The commitment, if it bears out, could give a boost to U.S. automakers, particularly those that have diverse portfolios that include passenger cars, commercial vans and light trucks.

Biden made the comments prior to signing the Made in America executive order, which places stricter rules on the federal government’s procurement practices. The government has existing “buy American” rules, which states that a certain amount of a product must be made in the U.S. for a purchase to qualify for a federal contract.

Biden said this order closes loopholes and aims to increase purchases of products made in the United States. The executive order increases that product threshold and the price preference for domestic goods — meaning the difference in price from which the government can buy a product for a non-U.S. supplier. It also updates the process for how the government decides if a product was sufficiently made in America.

In the midst of his speech, Biden said the buy American directive would extend to the federal government’s massive fleet of vehicles.

“The federal government also owns an enormous fleet of vehicles, which we’re going to replace with clean electric vehicles made right here in America, by American workers, creating millions of jobs — a million auto worker jobs.”

The opportunity is a large one. The U.S. government had more than 645,000 vehicles in its fleet in 2019, the most recent data available from the General Services Agency. Of those, about 224,000 are passenger vehicles and more than 412,000 are trucks.

“GSA is committed to exploring opportunities to leverage the purchasing and leasing power of the federal government to address the climate crisis, including greening the federal fleet,” a GSA spokesperson told TechCrunch in an emailed statement. “GSA currently manages over 224,000 passenger vehicles in its fleet to support the Federal Government’s mission. By leveraging clean energy vehicle technologies, GSA will support the President’s climate goals, while working with the American automotive manufacturing industry to ensure that these next generation vehicles are built in America by American workers.”

The directive won’t be easy to fulfill. Many of these federal vehicles are leased, which could slow the transition depending on the contract lengths. There are other obstacles, including charging infrastructure and supply. And while it doesn’t appear to be a requirement, Biden has publicly stated numerous times — including Monday — that he supports union automotive jobs.

Tesla is considered the dominant U.S. manufacturer of electric vehicles. However, the company’s lack of union workers and the higher cost of its vehicles — even the less expensive Model 3 — could be a barrier.

Ford and GM might not have a vast supply of electric vehicles at the moment, but they do have union shops and both automakers are investing heavily to expand their EV offerings.

GM launched a new business unit earlier this month to offer commercial customers an ecosystem of electric and connected products as part of the company’s $27 billion bid to become a leading electric automaker. The new business, called BrightDrop, will begin with two main products: an electric van called the EV600 with an estimate range of 250 miles and a pod-like electric pallet dubbed EP1.

GM has said it plans to bring 30 new electric vehicles to a global market through 2025. More than two-thirds of those launches will be available in North America and every one of GM’s brands, including Cadillac, GMC, Chevrolet and Buick, will be represented, according to the automaker.

Meanwhile, Ford revealed in November a configurable all-electric cargo van called the E-Transit as part of its $11.5 billion investment in electrification. Ford has largely focused its electrification efforts on the consumer market, notably the Mustang Mach-E. The E-Transit, which will be built at its Kansas City Assembly Plant in Claycomo, Missouri, is aimed at the commercial sector.

There are a growing number of newer EV entrants as well, including Rivian, Lordstown Motors and Fisker. Rivian is expected to begin producing and delivering its electric pickup truck in July, followed by its all-electric SUV. Rivian is also developing and assembling electric vans for Amazon.

Biden’s call to transform the fleet supports statements he made throughout his campaign. Biden pledged to “use all the levers of the federal government,” including purchasing power, R&D, tax, trade, and investment policies to position the U.S. to be the global leader in the manufacture of electric vehicles and their input materials and parts.

Continue Reading

Uncategorized

Facebook News launches in the UK, the first international market for its curated news portal

Published

on

As the United Kingdom prepares to sharpen its focus on how it regulates big tech companies, Facebook is taking a big step up in the role it plays in presenting media to the U.K. public, and into how it works with the country’s media industry.

Today it is launching Facebook News in the U.K., Facebook’s first market outside of the U.S. for its dedicated, curated news portal — accessed, like the U.S. version, through a tab in the Android or iOS app menu.

The portal will launch with content from hundreds of local and national media organizations including Channel 4 News, Daily Mail Group, DC Thomson, Financial Times, Sky News and Telegraph Media Group. The Economist, The Guardian, The Independent, STV and hundreds of local news sites from Archant, Iliffe, JPI Media, Midlands News Association, and Reach, as well as “lifestyle” titles GQ, Cosmopolitan, Glamour, Vogue and others were announced in an earlier list of partners last year.

Again, as with the U.S. version, users will be provided a list of curated top stories of the day; a list of personalized stories based on news sources you might already follow or interests you have (these might be from publications you don’t already follow); and dedicated news sections for sports, entertainment, health and science and technology. Users can indicate when they like stories, or when they want to hide them to train the algorithms better.

Facebook has confirmed to us that it will be working with a service called Upday to curate the stories that appear on News. “The product is a mix of curated, top stories and personalized links chosen by algorithm,” a spokesperson said. Upday appears to be a joint collaboration between German publisher Axel Springer and Samsung, which also runs a news service on its phones powered by it.

It is not clear what the financial terms of the deal is between Facebook and Upday, but reportedly, the licensing deals Facebook is cutting with publishers to place their content in News collectively run into the tens of millions of pounds, with the biggest publishers making millions a year from the the agreements. While those figures might pale to what Facebook makes in ad revenues globally — that reaches into the tens of billions of dollars quarterly — they represent significant sums for the beleaguered U.K. media industry.

People have long used newsfeeds on Facebook and other social sites to catch up with news while also browsing posts from friends, Groups and Pages that they follow. Facebook News aims to take that a step further, as a curated page for links and headlines from hundreds of publications in the country to provide users of its mobile apps a one-stop place to read the stories of the moment.

Social media continues to be a major source of news for consumers, but as we’ve seen, a very skewed and flawed source at that.

Within that context, Facebook says that its intention with Facebook News is to provide a more balanced and dedicated mix of news to people beyond what they might encounter in their newsfeeds, while also tailoring it to users’ interests.

It also helps that Facebook News provides yet another way for Facebook — which has made efforts in video, entertainment content, mentoring and job-hunting, Nextdoor-style community listings, peer-to-peer selling, and more — to continue diversifying away from the Newsfeed for those who have grown bored with that: now, people can come to the Facebook app to browse news, too.

Still, this international expansion has been a long time coming: Facebook News first launched as a test in the US more than a year ago, in October 2019, before rolling out to all users last June.

No word from Facebook on how many users or engagement the U.S. version of Facebook News has picked up, except that “it has grown steadily,” according to a spokesperson.

It’s not clear why there’s been such a long gap between its first efforts in the U.S. and the U.K. launch today, but Facebook has had more going on in addition to securing those licensing deals to roll out in this market.

Launching a new news portal, with the message that it’s designed to “help” publishers, takes on a new dimension when you consider that Facebook has also been in the crosshairs of regulators in Europe, who have been on a long-term mission to scrutinize the reach of big tech companies. In the UK, that is soon taking the form of a new “pro-competition” Digital Market Unit that will re-examine the role companies like Facebook and Google play in advertising, media and more. 

Whether those regulatory moves will impact how a service like Facebook News works, or what revenue cuts and usage data are shared with news partners, remains to be seen.

In the meantime, it’s full speed ahead for more scaling: Facebook confirmed plans last year that its long-term aim is for a bigger international expansion for Facebook News, with the longer list of countries including Brazil, France, Germany, and India. In a blog post today, Facebook’s director of news partnerships in Europe, Jesper Doub, confirmed France and Germany were next in line for Facebook News, although no launch dates were specified.

Continue Reading

Uncategorized

Daily Crunch: Twitter unveils Birdwatch

Published

on

Twitter pilots a new tool to fight disinformation, Apple brings celebrity-guided walks to the Apple Watch and Clubhouses raises funding. This is your Daily Crunch for January 25, 2021.

The big story: Twitter unveils Birdwatch

Twitter launched a new product today that it says will offer “a community-based approach to misinformation.”

With Birdwatch, users will be able to flag tweets that they find misleading, write notes to add context to those tweets and rate the notes written by others. This is supposed to be a complement to the existing system where Twitter removes or labels particularly problematic tweets, rather than a replacement.

What remains to be seen: How Twitter will handle it when two or more people get locked into a battle and post a flurry of conflicting notes about whether a tweet is misleading or not.

The tech giants

Walking with Dolly — Apple discusses how and why it brought Time to Walk to the Watch.

Google pledges grants and facilities for COVID-19 vaccine programs — The tech giant is one of several large corporations that have pledged support to local government agencies and medical providers to help increase vaccinations.

Facebook will give academic researchers access to 2020 election ad targeting data — Starting next month, Facebook will open up academic access to a data set of 1.3 million political and social issue ads.

Startups, funding and venture capital

Clubhouse announces plans for creator payments and raises new funding led by Andreessen Horowitz — While we try to track down the actual value of this round, Clubhouse has confirmed it will be introducing products to help creators on the platform get paid.

Taboola is going public via SPAC — The transaction is expected to close in the second quarter, and the combined company will trade on the New York Stock Exchange under the ticker symbol TBLA.

Wolt closes $530M round to continue expanding beyond restaurant delivery — The Helsinki-based online ordering and delivery company initially focused on restaurants but has since expanded to other verticals.

Advice and analysis from Extra Crunch

Qualtrics raises IPO pricing ahead of debut — After being acquired by SAP, Qualtrics announced it would spin out as its own public company.

Fintechs could see $100 billion of liquidity in 2021 — The Matrix Fintech Index weighs public markets, liquidity and a new e-commerce trend.

Unpacking Chamath Palihapitiya’s SPAC deals for Latch and Sunlight Financial — There’s no escaping SPACs, at least for a little while.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Moderna says it’s making variant-specific COVID-19 vaccines, but its existing vaccine should still work — Moderna has detailed some of the steps it’s taking to ensure that its vaccine remains effective in the face of emerging strains of the SARS-CoV-2 virus that leads to COVID-19.

Original Content podcast: ‘Bridgerton’ is an addictive reimagining of Jane Austen-style romance — Did I mention that the cast is insanely good-looking?

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Continue Reading

Trending