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What a Facebook Photos product manager thinks about antitrust

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Leading up to Facebook’s acquisition of Instagram, I was the product manager in charge of Facebook Photos. Mark Zuckerberg had bought my previous company, Divvyshot, one of the first iOS photo-sharing apps. I worked closely with Mark, and so conversations about the future of social sharing and emerging mobile apps were common. Instagram was a competitor that came up more than once.

Now that attorneys general in 48 states and the Federal Trade Commission are suing Facebook for their acquisition of Instagram, you might imagine I have a strong opinion about it. I do, both as the former Facebook Photos PM and as a former Facebook acquisition. In some ways, I was the appetizer for the eventual entrée. As an American consumer, I know success for the FTC would unequivocally be a disaster for innovation.

A key question in this antitrust case is whether Facebook bought Instagram to eliminate a competitive threat. Documents have already leaked suggesting Mark perceived Instagram as a threat. That same sentiment felt clear to me in our conversations.

I wasn’t at Facebook for long. In my mid-twenties and with a rush of confidence, I decided to leave to start another company. In hindsight, I left abruptly and without much notice. I departed soon after kicking off an initiative to revamp our mobile Photos products, leaving the team in a lurch (the mobile rehaul never launched). Months later, Mark started to court Instagram. The deal was formalized exactly one year after my sudden departure.

We have to be sophisticated about what we call a monopoly and how we constrain (or punish) our country’s most successful businesses.

Despite those events suggesting anti-competitive intent, I’m simply not convinced that the recent antitrust suit will benefit the competitive startup ecosystem or even consumers as a whole.

A cliché phrase in the startup space is “thinking from first principles,” but in this case, it’s helpful. The primary reason the United States government wants to regulate monopolies is to “protect competition and benefit consumers.” In the recent antitrust suit against Facebook, they are ostensibly protecting Facebook’s competitors in the startup ecosystem.

There are two key pieces of legislation that Facebook has been accused of violating. First, the Sherman Act, which makes it unlawful to maintain or acquire a monopoly, and then the Clayton Act, which goes a step further in prohibiting anti-competitive, monopolistic mergers and acquisitions.

The sine qua non of an antitrust accusation — violating Section 2 of the Sherman Act, which Facebook is accused of — is being able to prove that a company has used their monopoly to “harm society by making output lower, prices higher, and innovation less than would be the case in a competitive market.” The Department of Justice also establishes that a major factor in qualifying a monopoly is if a company has had “a market share in excess of two-thirds for a significant period.”

Before looking at Facebook, let’s look at an example of successful antitrust action. Critics of Facebook often bring up United States v. Microsoft Corp. as precedent. In this case, Microsoft was accused of a monopoly stemming from its bundling of Internet Explorer with Windows. To be clear, I agree with this antitrust action because Microsoft had a monopoly. If you examine Microsoft’s market share for operating systems in 1998, they owned 86% of the market when the case was filed. It is easy to see how they used unreasonable bundling to artificially grow market share for Internet Explorer, clearly making “output lower” and “innovation less” (does anyone look back fondly at Internet Explorer?) for society.

It’s much harder to see where exactly Facebook has a monopoly. For instance, the FTC is suing Facebook to divest Instagram. Instagram’s revenue is primarily generated from advertisers on the platform. The FTC’s accusation of monopoly — with their fingers pointed at Instagram — would imply that Facebook has built a dominant share of the digital advertising market. However, market research company EMarketer found that Facebook had 23% of this market in 2020, a far cry from two-thirds control. Calling Facebook a monopoly is far from a cut-and-dry case.

Now let’s ask the question: Who actually benefits from this antitrust action?

Not the founder of the next Facebook-killer. With the FTC pressing the heel of their boot down on acquisitions, it becomes less rewarding — and riskier — to found a startup.

In Silicon Valley, every new founder is an aspiring disruptor. But they and their investors understand the value of the cliché, “if you can’t beat them, join them.” I understood that reality when I sold Divvyshot to Facebook in 2010, shortly after my bank account hit $0.

Without the prospect of rich acquisitions by major companies, fewer founders would risk their livelihood and venture capital dollars would shrink. Large technology companies would be incentivized to simply copy newcomer products, rather than acquire their teams. Don’t forget: Being acquired is a success for most startups and entrepreneurs (who often lack other appealing outcomes).

Not the consumer. For the consumer to benefit, one has to believe that either (a) Instagram would have been more successful without Facebook, or (b) Facebook’s behavior discourages other competitive startups.

The former has been well-debated and is a somewhat subjective question. For the latter, with a shrinking pool of dollars and founders comes a shrinking pool of competition in any category. It’s that competition that fuels a busy home screen with a dozen app icons for every use case. Instagram’s $1 billion exit encouraged copycats, competitors and innovators like Vine, Flipagram, VSCO, and, eventually, TikTok.

As Mark Zuckerberg said about their acquisitions, “One way of looking at this is that what we’re really buying is time.” It’s hard to stay on the top in tech. If dot-com history is any indication, today’s leaders will be tomorrow’s Yahoo. It’s that natural pressure of age, not the threat of antitrust, that encourages companies like Facebook to make innovative product bets in new categories like VR to avoid irrelevance.

It’s time for a new plan. To be clear, we must foster competition within our technology space here in the United States. We should explore entirely new versions of antitrust legislation that focus on affirmative outcomes rather than punitive assessments.

The U.S. government might consider accommodating acquisitions by these companies through ecosystem development. Rather than shutting down acquisitions, consider a requirement that the acquirer invests some percentage of any significant acquisition amount into blind minority positions at other emerging startups.

It’s a dramatic thought, but new dynamics might emerge with innovation as the clear winner. For instance, these technology giants may fund startups that undermine their entrenched competitors. One example: Facebook might use this venture arm to fund ideas outside their scope in the Future of Work, creating insurgent competition for Microsoft.

The outflow of capital from incumbents to startups would foster competition while still enabling incumbents to scale. Remember, it’s these scale effects that allow us to enjoy our low consumer prices, high quality of life and R&D-fueled innovation that no economy wants to lose.

There’s a more important monopoly at stake. Silicon Valley is the most competitive and innovative sector in the world. Regions and governments across the globe aspired to copy our “secret sauce,” but often have been hampered by regulation, corruption or anti-capitalistic legislation. Are we sure it’s time for us to start copying them?

Up until recently, that question was just hypothetical. Silicon Valley’s title as the leader in innovation was never under threat. We had the protective moats of geographic density, well-functioning capital markets, light-touch regulation and permissive immigration policy (50% of Silicon Valley startups are founded by immigrants, after all). Are we sure we don’t want to double-down on that winning formula?

Meanwhile, China has liberalized its economy. Shenzhen, China’s hub for technology innovation, has had its gross domestic output (GDP) grow by an annual average of 20.7% over the last 40 years, even recently surpassing Hong Kong. I find the recent dethroning of Facebook by TikTok as the most downloaded application worldwide in 2020 a foreboding sign.

While nobody would choose to give personal data to foreign companies ruled by autocratic regimes, most users aren’t weighing those consequences as they scroll through the next social experience. After all, who among us isn’t tempted to make that trade-off for an engaging TikTok video in the middle of a quarantine?

We have to be sophisticated about what we call a monopoly and how we constrain (or punish) our country’s most successful businesses. We may pick a battle with Facebook and win, but lose the larger war. Losing that war may mean pushing the next Instagram out of Silicon Valley.

And that may mean, somewhat ironically, that the only technology monopoly the United States government is dismantling with this flavor of antitrust legislation is its own.

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

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6 Oslo VCs discuss 2021 trends, deal flow and regional opportunities

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The Nordic countries make up just 4% of Europe’s total population, but they account for a significant amount of venture capital investment.

That said, Norway’s VC community has been somewhat dormant for a while. The country makes far too much money from oil, giving it one of the world’s largest sovereign wealth funds and a large system of socialized support. Not a bad thing, but as a result, there are few “hungry” tech entrepreneurs.

High-profile players like Northzone and Creandum did well with early entries into Spotify and Klarna, among others, and now Norway is catching up with the rest of the European hubs. Among the trends our survey respondents identified were e-commerce, blockchain and crypto, healthtech, energy, mobility and climate.

Investments highlighted included Fairown, Kahoot, Spacemaker, Cognite, Pexip, PortalOne, Dignio, Speiz, Plaace, Glint Solar, variable.co and Nomono. Local investors tend to invest 50% to 90% of their fund into local startups, “but we do look at deal flow in all Nordic countries,” said one.


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On the horizon, there is hope for an increased focus on mental health and wellness from organizations, the press and the government; many also celebrated the rollout of the COVID-19 vaccine, bitcoin’s rise and a new occupant in the White House.

Green shoots of recovery are coming from portfolio revenue growth, exits and IPOs. One investors we spoke to said Norway is “becoming a major hub, with scale-ups and international capital incoming much faster these days.”

Here’s who responded to our survey:


Sean Percival, managing partner, Spring Capital

What trends are you most excited about investing in, generally?
E-commerce.

What’s your latest, most exciting investment?
Fairown.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Martech.

What are you looking for in your next investment, in general?
Not just COVID-proof but services that thrive in COVID times.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
In Norway, sustainability-focused companies. Lots of good ideas but little revenue growth proven so far.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
50% Norway, 50% Nordic/Baltic.

Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Norway does video tech well.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Strong B2B, weak B2C, lots of SDG focus.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
We are not so hard hit in Norway, so Oslo will likely not see much exodus. It’s still the best place to build a company in this country. Although personally I moved to a small village and don’t see myself moving back to Oslo.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
E-commerce is booming here post-COVID, where before it was rather weak.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Our portfolio is heavy on SaaS, which has weathered things well. So for our founders, it’s mostly about keeping churn-and-burn rates low to survive.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
In some cases yes, including our e-commerce SaaS companies and my recent Bitcoin exchange investment (MiraiEx).

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Bitcoin’s rise and new open banking solutions have shown the world’s financial engines are still pushing forward. Everything is being built with less friction these days. We’re trying to highlight the movers and shakers who outsiders might not know. Iterate is a cool company builder company flying under the radar. Just had their first big investment success/cash out with a company called Porterbuddy.

Any other thoughts you want to share with TechCrunch readers?
Norway is slowing, becoming a major hub with scale-ups and international capital incoming much faster these days (recent investments from SoftBank and Founders fund, for example).

Espen Malmo, founding partner, Skyfall Ventures

What trends are you most excited about investing in, generally?
Skyfall focuses on software companies, marketplaces and hardware companies with a recurring software revenue bundle. We are really excited about the blockchain and cryptocurrency space. Our team has been involved and invested in crypto since 2012, so we’ve been excited about the industry for a long time. We have invested in two great companies in the sector, the blockchain analytics tool Nansen.ai and the cryptocurrency exchange MiraiEx. We also love embedded commerce and social commerce, which we think will boost the more independent long tail of e-commerce in the years to come. Our portfolio company Outshifter is positioned well to utilize this trend.

What’s your latest, most exciting investment?
It is always hard to pick favorites since we are excited about all our investments, but Nomono is one that really excites us. Nomono is a software and hardware solution to capture and intelligently process voice recordings and spatial audio. The solution enables podcasters to edit their recordings with the click of a button, as a sort of digital audio technician in your pocket.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
This is super hard to pinpoint and it is really challenging to label an industry as overlooked. Bioinformatics is maybe a little bit overlooked in Norway, but I don’t feel that is the case globally. Also, I think the pure B2B SaaS focus of a lot of VC funds makes it harder than necessary to get funding for hardware companies and companies with a rundle business model, even though hardware revenues bundled with recurring software revenues can create extraordinary outcomes due to high order values and strong lock-in effects.

What are you looking for in your next investment, in general?
We invest in strong technical founders solving big problems in markets ripe for change. We usually prefer that the company has a prototype or beta of their solution and some initial market traction.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Both micromobility and telemedicine seem very crowded at this point, and we believe the current market leaders in these sectors will become the winners. I think it will be very hard to enter this space as a new startup at this moment in time.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We have a Nordic investment mandate, but we primarily focus on Norway as we are a Norwegian pre-seed/seed fund and have our competitive insight, network and brand here in Norway. So more than 50% in Norway, but we do look at deal flow in all Nordic countries.

Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Norway has a great track record within the video conferencing and audio industry. After Cisco bought Tandberg, a world-leading video conferencing company, for $3.3 billion in 2010, Video Valley (the area of Lysaker right outside of Oslo) has churned out a lot of successful companies within the space. For example, Acano (acquired by Cisco for $700 million), Pexip (IPO’ed, now valued at $1.4 billion) and Huddly (IPO’ed, now valued at $0.5 billion). From our own portfolio, both Nomono and Oivi are started by serial entrepreneurs with track records from successful Video Valley companies. Also, Norway is by far the leading country globally in adoption of electric vehicles per capita, and today over 50% of all new cars bought are electrical. This means that Norway is a great playing field for startups piggybacking on the EV revolution and also the green revolution in general. The EV home charger Easee is a company to watch.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Norway is a country where you get access to a highly educated and technically skilled workforce that is proficient in English, and the valuation of the companies is well below the levels you see in the U.S., or even in Sweden. I think Norway is a country to watch, but I obviously also believe that all the Nordic countries will continue to punch well above their “weight class” in the years to come.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes, the acceptance of working remotely will democratize the startup ecosystem globally. We should see a relative decrease in growth in the traditional hubs of Silicon Valley/SF, Beijing, London, Berlin and so on, compared to a relative increase in companies formed and managed “in the cloud.” We already have one such company in our portfolio, Nansen.ai, which truly is distributed across the world, “in the cloud,” and has been so from day one.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
We do not invest in sectors that have been hit directly by the pandemic, so we have been lucky in that way.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
No, we have in many ways been affected positively by COVID-19 as we have major investments in companies that are working with remote work, home delivery, e-commerce, cryptocurrencies and so on. In general, technology looks like the winning category during this pandemic, and I believe that will continue.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
As answered above, a lot of our companies are actually performing better than usual amid COVID.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The decline in infections locally and the rollout of the COVID vaccines. Also, Trump leaving the Oval Office. I don’t think I would have managed four more years with him in the spotlight, inciting hatred and nonsense on Twitter.

Who are key startup people you see creating success locally, whether investors, founders or even other types of startup ecosystems roles like lawyers, designers, growth experts, etc. We’re trying to highlight the movers and shakers who outsiders might not know.
Yes, Johan Brand, co-founder of Kahoot and now an angel investor.

Kjetil Holmefjord, partner, StartupLab

What trends are you most excited about investing in, generally?
Sector agnostic. Personally interested in climate.

What’s your latest, most exciting investment?
Latest one announced: Variable.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? What are you looking for in your next investment, in general?
Positive impact, fast team, big returns.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
100% Norway.

Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Video, health, climate.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Getting better every day.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Increase but maybe not a surge.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Uncertain.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
More international competition for investment opportunities.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Vaccine news.

Anne Solhaug Tutar, partner, Antler

What trends are you most excited about investing in, generally?
We focus on technology companies and are industry agnostic in general, but in Oslo we have a particular focus on startups within the energy, property and mobility sector.

What’s your latest, most exciting investment?
Speiz, Plaace and Glint Solar are a few examples.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Absolutely! We love any company that removes friction and focuses on solving real problems. Very often we see that the best companies are started by founders that have directly been impacted by an inefficiency or problem themselves, and later dedicate their lives to fixing it. Those founders will go above and beyond, and work relentlessly to understand their customers’ needs. We will see a lot of new opportunities from decentralized finance and a shift to a truly global economy where borders and barriers will be surpassed with smart technology.

What are you looking for in your next investment, in general?
The most important factor for any investment we make: a very strong co-founder team. Beyond that, a thoroughly validated business idea and model, a concept that has the potential to scale, traction; rapid growth week over week and founders solving a real problem and not a made-up problem.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
We have a decade behind us of incremental innovations. In the next 10 to 20 years, we will see huge leaps and groundbreaking new technologies. Lots of current small improvement solutions will be replaced by technologies that are dramatically changing the way we live, work, collaborate and act.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We can invest anywhere, but the Oslo branch typically invests in locally established companies. I’d say 90%.

Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Our focus in Norway says a lot about the industries we think have potential for disruption and where Norway holds a particularly strong position; energy, property and mobility.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Compared to other locations, we see that startups based out of Oslo are typically cheaper than in other parts of the world. Investors that are able to identify the right founders can make great investments in Norway. At the same time, Norwegian founders would benefit from more investors with an international focus. The ecosystem of investors and accelerators is rapidly growing in Oslo, and with more and more successful local startups we have a great environment set up for breeding more great companies going forward. We’re very bullish on what will come out of Oslo over the next few years.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Generally we experience two simultaneous trends: More talent being freed up from their previous engagements and more uncertainty, with founders being more on the fence about making the leap. We haven’t made observations of this being connected to specific cities or areas yet.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
I’m not sure it’s wise to develop completely new businesses based on opportunities from COVID only; rather, COVID can, timing-wise, really spark the launch or growth for some and significantly slow down the growth pace for others.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We invest as per normal and see that there is still a lot of capital ready to be deployed in Norway. Our companies have received a lot of soft funding from government initiatives, which is a huge and highly appreciated help to our portfolio companies. For our startups, and most others, the advice is always to keep the burn rate at manageable levels during this time of extra uncertainty, and plan the fundraising strategy accordingly. Otherwise, it’s never been more important to be lean and agile. The founders that are able to navigate well in a context with lots of uncertainty can do really well in the current climate!

Daniel Holth Larsen, principal, Investinor

What trends are you most excited about investing in, generally?
Resource efficiency, healthier lifestyles, internet of behaviors, how we work and learn.

What’s your latest, most exciting investment?
Dignio (SaaS/medtech).

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Forestry technology; a lot of focus on agriculture, but not forestry. Massive market opportunity, well positioned for SDGs, and driven by megatrends (building with wood, etc.).

What are you looking for in your next investment, in general?
In general: Proven scalability in a massive global market opportunity, with a (both) nice and savvy founding team.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?

  1. I think the consumer fintech space will get hard for startups in the coming years. Banks and institutions have competitive advantages through their large customer bases and access to resources and are investing heavily in the space (both through M&A, but more importantly with in-house initiatives and projects).
  2. Not one particular product per se, but I’m concerned about nice-to-have enterprise products that are not embedded and adapted in several departments of the customer (i.e., a marketing tool solely used by the marketing team at an organization, or a procurement tool used exclusively by procurement). I think many of these services will have a hard time in the tailwinds of COVID, and I think it is essential to get noticed by C-suites and other departments to survive in the longer run (regardless of your size and number of customers).

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50%. We are the largest and most active player in Norway by far. In 2020, we did 16 new direct investments, more than 60 follow-up investments, four IPOs, six investments in other venture funds, two complete exits.

Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
The Norwegian ecosystem will continue to thrive and be more and more relevant internationally in regards to software, particularly B2B software. This is driven by:

  1. Leading technological adaption and usage by the government, institutions and business.
  2. Low risk in career changes: talent fluctuating from leading companies to startups.
  3. Leading support and growth financing initiatives: Innovation Norway, funds, etc.
  4. Great global market access: EU networks, foreign investments, etc.

I think we especially have advantages in subsectors like proptech, energy, healthcare and education. I’m particularly excited about Kahoot, Cognite, Dignio (portfolio), Xeneta (portfolio), Gelato, Play Magnus (portfolio) and reMarkable.

How should investors in other cities think about the overall investment climate and opportunities in your city?

  1. Transparent way of doing business: honest, close to zero corruption;
  2. High grade of innovation and many opportunities;
  3. Happy population = happy founders and FTEs, and high productivity;
  4. Favorable policies and regulation (policies and legal proceedings, IPOs, etc.);
  5. No language barriers;
  6. Significant support from government, institutions and local business.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Maybe, maybe not. I still think cities will be the most prominent location for startups as (1) Big business is not rural, and startup founders typically come from banks, consultancies, corporations, etc. and also recruit from the likes of it; and (2) Network access and information is more vast in cities, and even though people are currently staying at home, geographical proximity remains a key factor.
This might happen in the longer run as more corporations recruit more people remotely, but I don’t see this happening the next following years as a consequence of our situation today. I think it will take more time.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Oil and gas; we have not made any new investments the last three years, but still have some companies in our portfolio (mostly specific technologies for the O&G industries). Its attractiveness was obviously declining pre-COVID as well, but the crisis has only made the sustainable shift stronger. I don’t see it rebounding to its previous levels. I think startups have opportunities in business partnerships cross-industry, and we are seeing many examples of that now. I also think that software companies that are thriving in the current market have a clear upper hand in building sustainable long-term cultures in their organizations and attracting talent from those other industries affected (travel, aviation, O&G, retail, hotels and accommodation, etc.).

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Hasn’t impacted it in a big way as most of our companies are performing well. Founders are primarily concerned with the mental health of their employees. My advice: CEOs should especially spend a lot of time on vision and goals, culture, teamwork and collectiveness.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, last year was a record year for us both in terms of exits, IPOs and gross IRR in the portfolio. More than 80% of invested capital is in software, hardware and healthcare, and most of our companies are thriving. We see some, but very few, being negatively affected in a big way.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I’m doing well personally, but I have enjoyed seeing:

  1. Our fantastic team members and founders getting the recognition they deserve.
  2. Stagnating unemployment, people getting back to work.
  3. Increased focus on mental health and wellbeing from organizations, the press and government.

Who are key startup people you see creating success locally, whether investors, founders or even other types of startup ecosystems roles like lawyers, designers, growth experts, etc. We’re trying to highlight the movers and shakers who outsiders might not know.
Some:
Kremena Tosheva (SNÖ Ventures, investor), Karen Dolva (No Isolation, founder CEO), Frida Rustøen (Idékapital, investor), Ann-Tove Kongsnes (Investinor, investor), Trond Riiber Knudsen (TRK, investor), Patrick Sandahl (Investinor, investor), Bente Sollid Storehaug (chairperson), Birger Magnus (chairperson), Erik Langaker (chairperson, investor), Anders Kvåle (Arkwright, entrepreneur, investor), Mathilde Tuv Kverneland (Arkwright X, investor), Dilan Mizrakli Landgraff (Antler, investor), Jacob Tveraabak (entrepreneur, investor), Remi Dramstad (Selmer, lawyer), Martin Schütt (Askeladden, founder/investor), Christian Sagstad (Thommessen, lawyer), Jan Grønbech (growth expert), Nils Thommessen (ex-lawyer, investor and board person), Eilert Hanoa (CEO of Kahoot, investor), Tom Even Mortensen (investor, growth expert), Birgitte Villmo (Investinor, investor), Bente Loe (Alliance Ventures, investor).

Magne Uppman, managing partner, SNÖ Ventures

What trends are you most excited about investing in, generally?
We invest across all digital tech, but some of the areas we have been looking more into lately include health tech, future of work, event and creative tech.

What’s your latest, most exciting investment?
Our latest investment was a follow-on investment in PortalOne, the world’s first hybrid games company. PortalOne converges gaming, shows and the broader entertainment industry into one platform in a really fun and engaging way. It is like nothing you have ever seen before. Spun out of Oslo, they are soon ready to launch in the U.S.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
One space that continues to evolve is the integration of social into various sectors — e.g., social fitness, social shopping, etc. And particularly, how we can recreate the connections that we make in the physical world in the digital version, leveraging the unique accessibility and reach that the digital platform offers.
We also think there are significant advancements to be made within the privacy sector against a backdrop of increased data vulnerability and third-party access to information.

What are you looking for in your next investment, in general?
Brilliant and ambitious founder teams. And being in Norway, we want them to target a much larger and hopefully also global market pretty soon after launch. Norway and the Nordics are perfect testing pits, with a digitally advanced, high-trust population, but too small a market for most tech companies that want to become big.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
We believe that most areas pretty fast become crowded, and try to avoid companies that do only incremental improvements in oversaturated areas. But we don’t necessarily avoid competition if the businesses have a transformative technology and see solutions or have secrets that others have not yet seen.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
So far we’ve been focused on Norwegian companies only, but with our upcoming fund, we will be pan-Nordic. We expect that about 50% of our investments will be Norwegian, whereas the other 50% will be spread across Sweden, Denmark, Finland and Iceland.

Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
We see a good variety of exciting companies from Oslo and Norway. Kahoot, Spacemaker, Cognite and Pexip have been leading the way lately, with new ones like Memory, Tibber, PortalOne, reMarkable and many others coming right behind. We also believe that Norway’s strong roots with industrial companies now seem to move into tech, for example with a highly skilled workforce moving over from the oil and gas industry, as well as really exciting companies coming out of this area — Cognite being a strong example. Norway also has some unique strengths in ocean tech, renewable energy, agriculture and shipping, all fields that we believe will produce exciting startups built around tech advancements.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Oslo is a city with a strong foundation and an exciting momentum in tech. There’s too few local VCs, though, and that creates a funding gap around the Series A stage, but at the same time lots of opportunities for investors taking their time to get to know the ecosystem. They should know that the Nordics are fragmented, so it’s not enough to know Stockholm; they should also invest time in the other Nordic hubs in order to succeed with a Nordic investment strategy.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
The trend of remote work will increase. We have portfolio companies that don’t even have an office today; Confrere, for instance, which offers a video meeting and conferencing platform currently focused primarily on the healthcare sector, has all their employees working remote. But we also see a strong advantage of companies being tightly connected to a startup hub, there is so much learning, inspiration and network to be shared. Hopefully we’ll see even more minihubs being built around the country, and them connecting tightly to each other. There is a lot of potential in more and better collaboration between the different hubs, locally, nationally and internationally.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Some of the industry segments that look weaker are business travel, retail and hospitality. Exciting opportunities exist within event, games, work tools and efficiency, health tech and sustainability. One particularly interesting challenge is to understand and anticipate which of the trends that have arisen during these times will be temporary and which will be permanent.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Some areas have developed fast, and that impacts which areas we focus on. The biggest worries on the portfolio side have been (1) that their B2B sales will be affected and (2) that the investment climate will be more challenging. Our advice has been to secure a long runway for some companies, whereas other companies have accelerated because of the shifts caused by COVID-19 and need to run even faster.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, the first two months were hard for some of the portfolio companies, but after that things recovered and they mostly are back at the revenue growth that they planned for before the pandemic.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
At SNÖ we often draw the comparison between being a founder and the proud heritage we have in Norway with polar explorers and their great expeditions. What our founders have shown the last year, through these uncertain times, gives me good hope that this comparison is valid like never before. Entrepreneurs are the polar explorers of 2021.

Who are key startup people you see creating success locally, whether investors, founders or even other types of startup ecosystems roles like lawyers, designers, growth experts, etc. We’re trying to highlight the movers and shakers who outsiders might not know.
There are many in the Oslo scene that have contributed a lot during the last few years; Rolf Assev, Alexander Woxen, Per Einar Dybvik, Tor Bækkelund, Kjetil Holmefjord at StartupLab, Ingar Bentsen and Hans Christian Bjørne at TheFactory, Anniken Fjelberg at 657, Anders Mjåset at Mesh, Heidi Aven at SHE, Knut Wien and Maja Adriaensen at Startup Norway, Lucas H. Weldeghebriel and Per-Ivar Nikolaisen at Shifter. And many more. All great people who deserve praise.


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India’s Paytm turns Android smartphones into POS machines in merchants push

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Paytm said on Tuesday it is turning NFC-enabled Android smartphones into point-of-sale machines, as it looks to win more merchants in one of the world’s largest mobile payments markets.

A Paytm merchant partner will now be able to enable card acceptance feature from their Paytm Business app. Once activated, they will be able to process a transaction by tapping a plastic card to their phone.

Paytm Smart POS supports Visa, Mastercard, and Rupeek, the Indian startup said.

Existing payment devices in the market haven’t proven very successful in reaching small and medium sized businesses in India, most of which remain offline, said Vijay Shekhar Sharma, founder and chief executive of Paytm, at a virtual press conference today.

To win these merchants, Paytm has in recent years rolled out QR codes that work across several payment networks, and launched jukeboxes and other gadgets to make it easier for merchants to accept payments digitally.

With today’s move, said Sharma, “the obligation of buying a POS machine, too, is no longer needed.” The startup said that most new Android smartphone models support the NFC feature.

Paytm also unveiled the newer generation jukebox POS that looks similar to a QR placard. “The reason why merchants haven’t actively adopted many of the existing POS machines is that they are not comfortable with it,” said Dilip Asbe, head of payments body NPCI, at the virtual conference.

The Indian startup, which processed more than 1.2 billion transactions last month, said it will charge a small subscription fee to merchant partners for accessing either of the aforementioned payments services.

The move, which in many ways pits Paytm against Sequoia Capital-backed Pine Labs, a market leader in the POS category but a significantly smaller startup, demonstrates just how aggressively Paytm is expanding its payments platform to go after merchants.

“Just the way, mobile phones saw an evolution from featurephone to smartphone, we believe the merchant PoS market in India is at an inflexion point to evolve from the traditional (aka dumb-PoS) to Smart-PoS. Unlike traditional PoS, which only allows transactions from debit/credit-card, some of the features of a Smart-PoS are: GST compliant bill, scanner/printer, takes all payments including UPI, is Bluetooth enabled and could be customized for different merchants as per their needs. While currently the Fintech companies are offering these devices, we expect banks to catch-up eventually,” wrote analysts at Bank of America in a recent note to clients.

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Taipei-based Influenxio gets $2M from DCM Ventures for its “microinfluencer” marketing platform

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Influencer marketing startup Influenxio's team, with founder and CEO Allan Ko in the center

Influenxio’s team, with founder and chief executive officer Allan Ko in the center

“Microinfluencers” are gaining clout among marketers. Though they may have as little as a thousand followers, microinfluencers tend to focus on specific content and be seen as more engaging and trustworthy by their audience, said Allan Ko, founder and chief executive officer of Influenxio. The Taipei-based startup, which connects brands with Instagram microinfluencers through its online platform, announced today that it has closed $2 million in pre-Series A funding led by DCM Ventures, and is launching a new subscription plan.

Founded in 2018, Influenxio has now raised over $3 million in total, including from seed investor SparkLabs Taipei. It currently operates in Taiwan and Japan, where it has databases of 100,000 and 250,000 Instagram creators, respectively. So far, over 6,000 brands have registered on Influenxio’s platform, and it has been used to run over 1,000 campaigns.

Influenxio plans to use its new funding for hiring and product development. Influenxio’s new subscription plan is a relatively novel model for the field, so one of the startup’s goals is to prove that it works, Ko told TechCrunch. The company also plans to build out its Japanese platform and expand into more countries.

A screenshot of Influenxio's platform

A screenshot of Influenxio’s platform

Influenxio analyzes past campaigns, performance data and client reviews to improve its algorithms. Since the entire campaign creation process–from finding influencers to paying them–is performed through Influenxio, this allows it to gather a wide range of data to refine its technology, Ko told TechCrunch.

Influencers typically make about $35 to $40 USD for each campaign they participate in, and most of the brands the company works with focus on food (like restaurants), fashion, beauty or lifestyle services.

Before launching Influenxio, Ko spent 15 years working in the digital marketing field, serving as an account manager at Yahoo! and Microsoft, and then head of Hong Kong and Taiwan for Google’s online partnerships group. He wanted to create a startup that would combine what he had learned about digital marketing and make accessible to more businesses.

Large brands have used Influenxio to quickly generate marketing campaigns for special occasions like Mother’s Day or Christmas. For example, one advertiser in Taiwan used Influenxio to hire almost 200 influencers in one week, who were asked to test and post about their products, and some of Influenxio’s highest profile clients include Shiseido, Shopee, iHerb and KKBox.

But the majority of Influenxio’s clients (about 80% to 90%) are small- to medium-sized businesses, and Ko said they usually create multiple campaigns to build brand awareness over time, working with a few influencers a month.

Influenxio’s new subscription plan, which costs less than $100 USD a month and is launching first in Taiwan before rolling out to other markets, was created for them. “The first year we launched the platform, we found small businesses want experts and advice,” said Ko. Many don’t have marketing managers, so Influenxio’s subscription plan automatically matches them with new influencers each month and provides them with analytics so they can see how well campaigns are performing.

Influenxio is among a growing number of startups that are tapping into the “microinfluencer economy,” with others including AspireIQ, Upfluence and Grin.

Ko said Influenxio’s biggest difference is its focus on small businesses, and serving as a one-stop marketplace for influencer campaigns. “The important thing for our platform is that it needs to be very easy and simple,” he added. “We spent a lot of time on the execution and details to make it smoother on the advertiser side. For the influencer side, we try to make it more convenient. For example, the way they receive money, our goal is to also make it easy.”

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