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Mambu raises $135M at a $2B+ valuation for a SaaS platform that powers banking services

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Challenger banks, incumbent banks, and all of the many businesses that are making inroads into any kind of banking service all have something in common: when it comes to launching a new product like a credit line or a deposit or current account, these days many of them are opting not to build from the ground up, but are instead using third-party technology to power these services. Today, one of the big players in providing that tech is announcing a large round of funding to expand its business, underscoring the growth in this market.

Mambu, a Berlin-based startup that describes itself as an SaaS banking platform — providing, by way of APIs, technology to banks and others to power lending, deposit and other banking products — has closed a round of €110 million (about $135 million at today’s rates). The funding gives Mambu a post-money valuation of €1.7 billion (just over $2 billion at today’s rates), the company has confirmed.

CEO and co-founder Eugene Danilkis said it will be using the money to expand deeper in the 50 markets where it is already active, as well as focus more on specific regions like South America and Asia. (And for those keeping tabs on the “Is the Bay Area dead?” story, it’s one of the many tech companies with its US offices established in Miami.)

Mambu has been seeing 100% growth year-on-year, but notably, Mambu covered 50 markets when it last raised money, €30 million in 2019, so you can argue it has some investing and expanding to do on that front.

The round is being led by TCV, with Tiger Global and Arena Holdings, along with past investors Bessemer Venture Partners, Runa Capital and Acton Capital Partners, also participating. TCV, known for making big growth round bets (it’s invested in the likes of Netflix, Facebook and Spotify in the past) has also been carving out a name for itself for backing some of the biggest names in European fintech and e-commerce, with recent investments including Revolut, Spryker, Mollie and Relex.

The market that Mambu is courting is the vast opportunity for a new wave of banking and financial services that tap into the growth of smartphone and web usage.

Long gone are the days where people have to go into physical banks to take out or deposit money, or fill out loan applications and meet with assessors who ultimately decide whether you or your business will get money or not. In fact, many of those brick-and-mortar locations don’t even exist anymore. In their place are apps, websites, and on-demand services that live wherever people are spending time and money online.

Mambu’s platform, according to Danilkis, covers some 7,000 different banking products at the moment. These are roughly split across three primary categories: lending, current accounts and deposit accounts, but the sheer number of products really speaks to just how many ways and forms in which you are offered banking services today. (Take credit for example: you can get it through various kinds of cards, point of sale pay-later products, straight loans, and so on.) Alongside its own products, it also provides links through to certain third-party financial services like TransferWise, additional services such as security (perhaps a given for a banking platform) and a platform for “process orchestration” (its equivalent of providing business process management tools).

Gartner estimates (cited by Mambu) put the banking software market at over $100 billion and growing at double-digits, and Mambu’s customer list reveals the range of companies that are vying these days for a piece of that action: they include the likes of challenger banks like N26 and OakNorth, but also large incumbent banks like Santander and ABN Amro, and telecoms carriers like Orange, which together cover some 20 million customers and some $12 billion under management, Mambu said.

And indeed, the bigger opportunity has also meant that companies like Mambu have a large and growing list of competitors too: they include newer companies like Rapyd and Unit, as well as Thought Machine, which raised a big round last year; Temenos and Italy’s Edera. It will be interesting to see how newer entrants in the SaaS banking-platform space disrupt what are, effectively, becoming incumbents in their own right: Mambu is now approaching 10 years old (it was founded in 2011). That could lead to consolidation, too.

Turning back to that customer list, I can understand the logic of a company not really in the business of financial services like a telco, or a neo-bank taking an API-based service to power banking — it focuses instead on building clever algorithms for running those services, and fast interfaces to make them easy to use — it was interesting to me to see large banks on that list, too. It turns out that the reason is because banks are up against it in another way.

“Yes, banks have the functionality and capability, but launching something new is often a case of speed and cost,” said Danilkis. “The banks might have a generation-2 system but many will be much older. And  changing how a financial product behaves is very difficult and highly risky because even a small change can create problems. And those systems are not designed to work with APIs, so it is extremely hard if not impossible to connect to other systems, never mind in real time. Certain solutions or offerings become impossible or impractical to build yourself.”

John Doran, the TCV partner, is joining Mambu’s board with this round, and while the company may be seen as an incumbent to some, its early mover position has helped it not only gain market share, but to stand out for investors as one of the players with staying power.

“Mambu was one of the first companies to leverage the opportunity to move banking software into the cloud,” he said in a statement. “The team has built a highly composable, truly cloud-native product in a multi-billion dollar, rapidly-growing market traditionally dominated by large, slow-moving on-prem vendors. We have been following Mambu’s progress for many years and are truly delighted to be able to partner with Eugene and the entire Mambu team on their journey to expand their offerings to customers worldwide.”

EDIT: An earlier version of this article misstated the amount raised as €100 million. It is actually €110 million (the valuation is correct).

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Elon Musk says Tesla Semi is ready for production, but limited by battery cell output

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Tesla CEO Elon Musk said on the company’s 2020 Q4 earnings call that all engineering work is now complete on the Tesla Semi, the freight-hauling semi truck that the company is building with an all-electric powertrain. The company expects to begin deliveries of Tesla Semi this year, the company said in its Q4 earnings release, and Musk said the only thing limiting their ability to produce them now is the availability of battery cells.

“The main reason we have not accelerated new products – like for example Tesla Semi – is that we simply don’t have enough cells for it,” Musk said. “If we were to make the Semi right now, and we could easily go into production with the Semi right now, but we would not have enough cells for it.”

Musk added that the company does expect to have sufficient cell volume to meet its needs once it goes into production on its 4680 battery pack, which is a new custom cell design it created with a so-called ‘tables’ design that allows for greater energy density and therefore range.

“A Semi would use typically five times the number of cells that a car would use, but it would not sell for five times what a car would sell for, so it kind of would not make sense for us to do the Semi right now,” Musk said. “But it will absolutely make sense for us to do it as soon as we can address the cell production constraint.”

That constraint points to the same conclusion for the possibility of Tesla developing a van, Musk added, and the lifting of the constraint will likewise make it possible for Tesla to pursue the development of that category of vehicle, he said.

Tesla has big plans for “exponentially” ramping cell production, with a goal of having production capacity infrastructure in place for a Toal of 200 gigawatt hours per year by 2022, and a target of being able to actually produce around 40% of that by that year (with future process improvements generating additional gigawatt hours of cell capacity  in gradual improvements thereafter).

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Pro-Trump Twitter figure arrested for spreading vote-by-text disinformation in 2016

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The man behind a once-influential pro-Trump account is facing charges of election interference for allegedly disseminating voting disinformation on Twitter in 2016.

Federal prosecutors allege that Douglass Mackey, who used the name “Ricky Vaughn” on Twitter, encouraged people to cast their ballot via text or on social media, effectively tricking others into throwing away those votes.

According to the Justice Department, 4,900 unique phone numbers texted a phone number Mackey promoted in order to “vote by text.” BuzzFeed reported the vote-by-text scam at the time, noting that many of the images were photoshopped to look like official graphics from Hillary Clinton’s presidential campaign.

Some of those images appeared to specifically target Black and Spanish-speaking Clinton supporters, a motive that tracks with the account’s track record of white supremacist and anti-Semitic content. The account was suspended in November 2016.

At the time, the mysterious account quickly gained traction in the political disinformation ecosystem. HuffPost revealed that the account was run by Mackey, the son of a lobbyist, two years later.

“… His talent for blending far-right propaganda with conservative messages on Twitter made him a key disseminator of extremist views to Republican voters and a central figure in the alt-right’ white supremacist movement that attached itself to Trump’s coattails,” HuffPost’s Luke O’Brien reported.

Mackey, a West Palm Beach resident, was taken into custody Wednesday in Florida.

“There is no place in public discourse for lies and misinformation to defraud citizens of their right to vote,” Acting U.S. Attorney for the Eastern District of New York Seth D. DuCharme said.

“With Mackey’s arrest, we serve notice that those who would subvert the democratic process in this manner cannot rely on the cloak of Internet anonymity to evade responsibility for their crimes.”

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Tesla is willing to license Autopilot and has already had “preliminary discussions” about it with other automakers

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Tesla is open to licensing its software, including its Autopilot highly-automated driving technology, and the neural network training it has built to improve its autonomous driving technology. Tesla CEO Elon Musk revealed those considerations on the company’s Q4 earnings call on Wednesday, adding that the company has in fact already “had some preliminary discussions about licensing Autopilot to other OEMs.”

The company began rolling out its beta version of the so-called ‘full self-driving’ or FSD version of Autopilot late last year. The standard Autopilot features available in general release provide advanced driver assistance (ADAS) which provide essentially advanced cruise control capabilities designed primarily for use in highway commutes. Musk said on the call that he expects the company will seek to prove out its FSD capabilities before entering into any licensing agreements, if it does end up pursuing that path.

Musk noted that Tesla’s “philosophy is definitely not to create walled gardens” overall, and pointed out that the company is planning to allow other automakers to use its Supercharger networks, as well as its autonomy software. He characterized Tesla as “more than happy to license” those autonomous technologies to “other car companies,” in fact.

One key technical hurdle required to get to a point where Tesla’s technology is able to demonstrate true reliability far surpassing that of a standard human driver is transition the neural networks operating in the cars and providing them with the analysis that powers their perception engines is to transition those to video. That’s a full-stack transition across the system away from basing it around neural nets trained on single cameras and single frames.

To this end, the company has developed video labelling software that has had “a huge effect on the efficiency of labeling,” with the ultimate aim being enabling automatic labeling. Musk (who isn’t known for modesty around his company’s achievements, it should be said) noted that Tesla believes “it may be the best neural net training computer in the world by possibly an order of magnitude,” adding that it’s also “something we can offer potentially as a service.”

Training huge quantities of video data will help Tesla push the reliability of its software from 100% that of a human driver, to 200% and eventually to “2,000% better than the average human,” Musk said, while again suggesting that it won’t be a technological achievement the company is interested into keeping to themselves.

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