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‘Orwellian’ AI lie detector project challenged in EU court

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A legal challenge was heard today in Europe’s Court of Justice in relation to a controversial EU-funded research project using artificial intelligence for facial ‘lie detection’ with the aim of speeding up immigration checks.

The transparency lawsuit against the EU’s Research Executive Agency (REA), which oversees the bloc’s funding programs, was filed in March 2019 by Patrick Breyer, MEP of the Pirate Party Germany and a civil liberties activist — who has successfully sued the Commission before over a refusal to disclose documents.

He’s seeking the release of documents on the ethical evaluation, legal admissibility, marketing and results of the project. And is hoping to set a principle that publicly funded research must comply with EU fundamental rights — and help avoid public money being wasted on AI ‘snake oil’ in the process.

“The EU keeps having dangerous surveillance and control technology developed, and will even fund weapons research in the future, I hope for a landmark ruling that will allow public scrutiny and debate on unethical publicly funded research in the service of private profit interests,” said Breyer in a statement following today’s hearing. “With my transparency lawsuit, I want the court to rule once and for all that taxpayers, scientists, media and Members of Parliament have a right to information on publicly funded research — especially in the case of pseudoscientific and Orwellian technology such as the ‘iBorderCtrl video lie detector’.”

The court has yet to set a decision date on the case but Breyer said the judges questioned the agency “intensively and critically for over an hour” — and revealed that documents relating to the AI technology involved, which have not been publicly disclosed but had been reviewed by the judges, contain information such as “ethnic characteristics”, raising plenty of questions.

The presiding judge went on to query whether it wouldn’t be in the interests of the EU research agency to demonstrate that it has nothing to hide by publishing more information about the controversial iBorderCtrl project, per Breyer.

AI ‘lie detection’

The research in question is controversial because the notion of an accurate lie detector machine remains science fiction, and with good reason: There’s no evidence of a ‘universal psychological signal’ for deceit.

Yet this AI-fuelled commercial R&D ‘experiment’ to build a video lie detector — which entailed testers being asked to respond to questions put to them by a virtual border guard as a webcam scanned their facial expressions and the system sought to detect what an official EC summary of the project describes as “biomarkers of deceit” in an effort to score the truthfulness of their facial expressions (yes, really🤦‍♀️) — scored over €4.5M/$5.4M in EU research funding under the bloc’s Horizon 2020 scheme.

The iBorderCtrl project ran between September 2016 and August 2019, with the funding spread between 13 private or for-profit entities across a number of Member States (including the UK, Poland, Greece and Hungary).

Public research reports the Commission said would be published last year, per a written response to Breyer’s questions challenging the lack of transparency, do not appear to have seen the light of day yet.

Back in 2019 The Intercept was able to test out the iBorderCtrl system for itself. The video lie detector falsely accused its reporter of lying — judging she had given four false answers out of 16, and giving her an overall score of 48 which it reported that a policeman who assessed the results said triggered a suggestion from the system she should be subject to further checks (though was not as the system was never run for real during border tests).

The Intercept said it had to file a data access request — a right that’s established in EU law — in order to obtain a copy of the reporter’s results. Its report quoted Ray Bull, a professor of criminal investigation at the University of Derby, who described the iBorderCtrl project as “not credible” — given the lack of n evidence that monitoring microgestures on people’s faces is an accurate way to measure lying.

“They are deceiving themselves into thinking it will ever be substantially effective and they are wasting a lot of money. The technology is based on a fundamental misunderstanding of what humans do when being truthful and deceptive,” Bull also told it.

The notion that AI can automagically predict human traits if you just pump in enough data is distressingly common — just look at recent attempts to revive phrenology by applying machine learning to glean ‘personality traits’ from face shape. So a face-scanning AI ‘lie detector’ sits in a long and ignoble anti-scientific ‘tradition’.

In the 21st century it’s frankly incredible that millions of euros of public money are being funnelled into rehashing terrible old ideas — before you even consider the ethical and legal blindspots inherent in the EU funding research that runs counter to fundamental rights set out in the EU’s charter. When you consider all the bad decisions involved in letting this fly it looks head-hangingly shameful.

The granting of funds to such a dubious application of AI also appears to ignore all the (good) research that has been done showing how data-driven technologies risk scaling bias and discrimination.

We can’t know for sure, though, because only very limited information has been released about how the consortia behind iBorderCtrl assessed ethics considerations in their experimental application — which is a core part of the legal complaint.

The challenge in front of the European Court of Justice in Luxembourg poses some very awkward questions for the Commission: Should the EU be pouring taxpayer cash into pseudoscientific ‘research’? Shouldn’t it be trying to fund actual science? And why does its flagship research program — the jewel in the EU crown — have so little public oversight?

The fact that a video lie detector made it through the EU’s ‘ethics self-assessment‘ process, meanwhile, suggests the claimed ‘ethics checks’ aren’t worth a second glance.

“The decision on whether to accept [an R&D] application or not is taken by the REA after Member States representatives have taken a decision. So there is no public scrutiny, there is no involvement of parliament or NGOs. There is no [independent] ethics body that will screen all of those projects. The whole system is set up very badly,” says Breyer.

“Their argument is basically that the purpose of this R&D is not to contribute to science or to do something for public good or to contribute to EU policies but the purpose of these programs really is to support the industry — to develop stuff to sell. So it’s really supposed to be an economical program, the way it has been devised. And I think we really actually need a discussion about whether this is right, whether this should be so.”

“The EU’s about to regulate AI and here it is actually funding unethical and unlawful technologies,” he adds.

No external ethics oversight

Not only does it look hypocritical for the EU to be funding rights-hostile research but — critics contend — it’s a waste of public money that could be spend on genuinely useful research (be it for a security purpose or, more broadly, for the public good; and for furthering those ‘European values’ EU lawmakers love to refer to).

“What we need to know and understand is that research that will never be used because it doesn’t work or it’s unethical or it’s illegal, that actually wastes money for other programs that would be really important and useful,” argues Breyer.

“For example in the security program you could maybe do some good in terms of police protective gear. Or maybe in terms of informing the population in terms of crime prevention. So you could do a lot of good if these means were used properly — and not on this dubious technology that will hopefully never be used.”

The latest incarnation of the EU’s flagship research and innovation program, which takes over from Horizon 2020, has a budget of ~€95.5BN for the 2021-2027 period. And driving digital transformation and developments in AI are among the EU’s stated research funding priorities. So the pot of money available for ‘experimental’ AI looks massive.

But who will be making sure that money isn’t wasted on algorithmic snake oil — and dangerous algorithmic snake oil in instances where the R&D runs so clearly counter to the EU’s own charter of fundamental human rights?

The European Commission declined multiple requests for spokespeople to talk about these issues but it did send some on the record points (below), and some background information regarding access to documents which is a key part of the legal complaint.

Among the Commission’s on the record statements on ‘ethics in research’, it started with the claim that “ethics is given the highest priority in EU funded research”.

“All research and innovation activities carried out under Horizon 2020 must comply with ethical principles and relevant national, EU and international law, including the Charter of Fundamental Rights and the European Convention on Human Rights,” it also told us, adding: “All proposals undergo a specific ethics evaluation which verifies and contractually obliges the compliance of the research project with ethical rules and standards.”

It did not elaborate on how a ‘video lie detector’ could possibly comply with EU fundamental rights — such as the right to dignity, privacy, equality and non-discrimination.

And it’s worth noting that the European Data Protection Supervisor (EDPS) has raised concerns about misalignment between EU-funded scientific research and data protection law, writing in a preliminary opinion last year: “We recommend intensifying dialogue between data protection authorities and ethical review boards for a common understanding of which activities qualify as genuine research, EU codes of conduct for scientific research, closer alignment between EU research framework programmes and data protection standards, and the beginning of a debate on the circumstances in which access by researchers to data held by private companies can be based on public interest”.

On the iBorderCtrl project specifically the Commission told us that the project appointed an ethics advisor to oversee the implementation of the ethical aspects of research “in compliance with the initial ethics requirement”. “The advisor works in ways to ensure autonomy and independence from the consortium,” it claimed, without disclosing who the project’s (self-appointed) ethics advisor is.

“Ethics aspects are constantly monitored by the Commission/REA during the execution of the project through the revision of relevant deliverables and carefully analysed in cooperation with external independent experts during the technical review meetings linked to the end of the reporting periods,” it went on, adding that: “A satisfactory ethics check was conducted in March 2019.”

It did not provide any further details about this self-regulatory “ethics check”.

“The way how it works so far is basically some expert group that the Commission sets up with propose/call for tender,” says Breyer, discussing how the EU’s research program is structured. “It’s dominated by industry experts, it doesn’t have any members of parliament in there, it only has — I think — one civil society representative in it, so that’s falsely composed right from the start. Then it goes to the Research Executive Agency and the actual decision is taking by representatives of the Member States.

“The call [for research proposals] itself doesn’t sound so bad if you look it up — it’s very general — so the problem really was the specific proposal that they proposed in response to it. And these are not screened by independent experts, as far as I understand it. The issue of ethics is dealt with by self assessment. So basically the applicant is supposed to indicate whether there is a high ethical risk involved in the project or not. And only if they indicate so will experts — selected by the REA — do an ethics assessment.

“We don’t know who’s been selected, we don’t know their opinions — it’s also being kept secret — and if it turns out later that a project in unethical it’s not possible to revoke the grant.”

The hypocrisy charge comes in sharply here because the Commission is in the process of shaping risk-based rules for the application of AI. And EU lawmakers have been saying for years that artificial intelligence technologies need ‘guardrails’ to make sure they’re applied in line with regional values and rights.

Commission EVP Margrethe Vestager has talked about the need for rules to ensure artificial intelligence is “used ethically” and can “support human decisions and not undermine them”, for example.

Yet EU institutions are simultaneously splashing public funds on AI research that would clearly be unlawful if implemented in the region, and which civil society critics decry as obviously unethical given the lack of scientific basis underpinning ‘lie detection’.

In an FAQ section of the iBorderCtrl website, the commercial consortia behind the project concedes that real-world deployment of some of the technologies involved would not be covered by the existing EU legal framework — adding that this means “they could not be implemented without a democratic political decision establishing a legal basis”.

Or, put another way, such a system would be illegal to actually use for border checks in Europe without a change in the law. Yet European taxpayer funding was nonetheless ploughed in.

A spokesman for the EDPS declined to comment on Breyer’s case specifically but he confirmed that its preliminary opinion on scientific research and data protection is still relevant.

He also pointed to further related work which addresses a recent Commission push to encourage pan-EU health data sharing for research purposes — where the EDPS advises that data protection safeguards should be defined “at the outset” and also that a “thought through” legal basis should be established ahead of research taking place.

The EDPS recommends paying special attention to the ethical use of data within the [health data sharing] framework, for which he suggests taking into account existing ethics committees and their role in the context of national legislation,” the EU’s chief data supervisor writes, adding that he’s “convinced that the success of the [health data sharing plan] will depend on the establishment of a strong data governance mechanism that provides for sufficient assurances of a lawful, responsible, ethical management anchored in EU values, including respect for fundamental rights”.

tl;dr: Legal and ethical use of data must be the DNA of research efforts — not a check-box afterthought.

Unverifiable tech

In addition to a lack of independent ethics oversight of research projects that gain EU funding, there is — currently and worryingly for supposedly commercially minded research — no way for outsiders to independently verify (or, well, falsify) the technology involved.

In the case of the iBorderCtrl tech no meaningful data on the outcomes of the project has been made public and requests for data sought under freedom of information law have been blocked on commercial interest grounds.

Breyer has been trying without success to obtain information about the results of the project since it finished in 2019. The Guardian reported in detail on his fight back in December.

Under the legal framework wrapping EU research he says there’s only a very limited requirement to publish information on project outcomes — and only long after the fact. His hope is thus that the Court of Justice will agree ‘commercial interests’ can’t be used to over-broadly deny disclosure of information in the public interest.

“They basically argue there is no obligation to examine whether a project actually works so they have the right to fund research that doesn’t work,” he tells TechCrunch. “They also argue that basically it’s sufficient to exclude access if any publication of the information would damage the ability to sell the technology — and that’s an extremely wide interpretation of commercially sensitive information.

“What I would accept is excluding information that really contains business secrets like source code of software programs or internal calculations or the like. But that certainly shouldn’t cover, for example, if a project is labelled as unethical. It’s not a business secret but obviously it will harm their ability to sell it — but obviously that interpretation is just outrageously wide.”

“I’m hoping that this [legal action] will be a precedent to clarify that information on such unethical — and also unlawful if it were actually used or deployed — technologies, that the public right to know takes precedence over the commercial interests to sell the technology,” he adds. “They are saying we won’t release the information because doing so will diminish the chances of selling the technology. And so when I saw this then I said well it’s definitely worth going to court over because they will be treating all requests the same.”

Civil society organizations have also been thwarted in attempts to get detailed information about the iBorderCtrl project. The Intercept reported in 2019 that researchers at the Milan-based Hermes Center for Transparency and Digital Human Rights used freedom of information laws to obtain internal documents about the iBorderCtrl system, for example, but the hundreds of pages they got back were heavily redacted — with many completely blacked out.

“I’ve heard from [journalists] who have tried in vain to find out about other dubious research projects that they are massively withholding information. Even stuff like the ethics report or the legal assessment — that’s all stuff that doesn’t contain any commercial secrets, as such,” Breyer continues. “It doesn’t contain any source code, nor any sensitive information — they haven’t even released these partially.

“I find it outrageous that an EU authority [the REA] will actually say we don’t care what the interest is in this because as soon as it could diminish sales then we will withhold the information. I don’t think that’s acceptable, both in terms of taxpayers’ interests in knowing about what their money is being used for but also in terms of the scientific interest in being able to test/to verify these experiments on the so called ‘deception detection’ — which is very contested if it really works. And in order to verify or falsify it scientists of course need to have access to the specifics about these trials.

“Also democratically speaking if ever the legislator wants to decide on the introduction of such a system or even on the framing of these research programs we basically need to know the details — for example what was the number of false positives? How well does it really work? Does it have a discriminatory effect because it works less well on certain groups of people such as facial recognition technology. That’s all stuff that we really urgently need to know.”

Regarding access to documents related to EU-funded research the Commission referred us to Regulation no. 1049/2001 — which it said “lays down the general principles and limits” — though it added that “each case is analysed carefully and individually”.

However the Commission’s interpretation of the regulations of the Horizon program appears to entirely exclude the application of the freedom of information — at least in the iBorderCtrl project case.

Per Breyer, they limit public disclosure to a summary of the research findings — that can be published some three or four years after the completion of the project.

“You’ll see an essay of five or six pages in some scientific magazine about this project and of course you can’t use it to verify or falsify the technology,” he says. “You can’t see what exactly they’ve been doing — who they’ve been talking to. So this summary is pretty useless scientifically and to the public and democratically and it takes ages. So I hope that in the future we will get more insight and hopefully a public debate.”

The EU research program’s legal framework is secondary legislation. So Breyer’s argument is that a blanket clause about protecting ‘commercial interests’ should not be able to trump fundamental EU rights to transparency. But of course it will be up to the court to decide.

“I think I stand some good chance especially since transparency and access to information is actually a fundamental right in the EU — it’s in the EU charter of fundamental rights. And this Horizon legislation is only secondary legislation — they can’t deviate from the primary law. And they need to be interpreted in line with it,” he adds. “So I think the court will hopefully say that this is applicable and they will do some balancing in the context of the freedom of information which also protects commercial information but subject to prevailing public interests. So I think they will find a good compromise and hopefully better insight and more transparency.

“Maybe they’ll blacken out some parts of the document, redact some of it but certainly I hope that in principle we will get access to that. And thereby also make sure that in the future the Commission and the REA will have to hand over most of the stuff that’s been requested on this research. Because there’s a lot of dubious projects out there.”

A better system of research project oversight could start by having the committee that decides on funding applications not being comprised of mostly industry and EU Member State representatives (who of course will always want EU cash to come to their region) — but also parliamentary representatives, more civil society representatives and scientists, per Breyer.

“It should have independent participants and those should be the majority,” he says. “That would make sense to steer the research activities in the direction of public good, of compliance with our values, of useful research — because what we need to know and understand is research that will never be used because it doesn’t work or it’s unethical or it’s illegal, that wastes money for other programs that would be really important and useful.”

He also points to a new EU research program being set up that’s focused on defence — under the same structure, lacking proper public scrutiny of funding decisions or information disclosure, noting: “They want to do this for defence as well. So that will be even about lethal technologies.”

To date the only disclosures around iBorderCtrl have been a few parts of the technical specifications of its system and some of a communications report, per Breyer, who notes that both were ‘heavily redacted”.

“They don’t say for example which border agencies they have introduced this system to, they don’t say which politicians they’ve been talking to,” he says. “The interesting thing actually is that part of this funding is also presenting the technology to border authorities in the EU and politicians. Which is very interesting because the Commission keeps saying look this is only research; it doesn’t matter really. But in actual fact they are already using the project to promote the technology and the sales of it. And even if this is never used at EU borders funding the development will mean that it could be used by other governments — it could be sold to China and Saudi Arabia and the like.

“And also the deception detection technology — the company that is marketing it [a Manchester-based company called Silent Talker Ltd] — is also offering it to insurance companies, or to be used on job interviews, or maybe if you apply for a loan at a bank. So this idea that an AI system would be able to detect lies risks being used in the private sector very broadly and since I’m saying that it doesn’t work at all and it’s basically a lottery lots of people risk having disadvantages from this dubious technology.”

“It’s quite outrageous that nobody prevents the EU from funding such ‘voodoo’ technology,” he adds.

The Commission told us that “The Intelligent Portable Border Control System” (aka iBorderCtrl) “explored new ideas on increasing efficiency, convenience and security of land border crossing”, and like all security research projects it was “aimed at testing new ideas and technologies to address security challenges”.

“iBorderCtrl was not expected to deliver ready-made technologies or products. Not all research projects lead to the development of technologies with real-world applications. Once research projects are over, it is up to Member States to decide whether they want to further research and/or develop solutions studied by the project,” it also said. 

It also pointed out that specific application of any future technology “will always have to respect EU and national law and safeguards, including on fundamental rights and the EU rules on the protection of personal data”.

However Breyer also calls foul on the Commission seeking to deflect public attention by claiming ‘it’s only R&D’ or that it’s not deciding on the use of any particular technology. “Of course factually it creates pressure on the legislator to agree to something that has been developed if it turns out to be useful or to work,” he argues. “And also even if it’s not used by the EU itself it will be sold somewhere else — and so I think the lack of scrutiny and ethical assessment of this research is really scandalous. Especially as they have repeatedly developed and researched surveillance technologies — including mass surveillance of public spaces.”

“They have projects on Internet on bulk data collection and processing of Internet data. The security program is very problematic because they do research into interferences with fundamental rights — with the right to privacy,” he goes on. “There are no limitations really in the program to rule out unethical methods of mass surveillance or the like. And not only are there no material limitations but also there is no institutional set-up to be able to exclude such projects right from the beginning. And then even once the programs have been devised and started they will even refuse to disclose access to them. And that’s really outrageous and as I said I hope the court will do some proper balancing and provide for more insight and then we can basically trigger a public debate on the design of these research schemes.”

Pointing again to the Commission’s plan to set up a defence R&D fund under the same industry-centric decision-making structure — with a “similarly deficient ethics appraisal mechanism” — he notes that while there are some limits on EU research being able to fund autonomous weapons, other areas could make bids for taxpayer cash — such as weapons of mass destruction and nuclear weapons.

“So this will be hugely problematic and will have the same issue of transparency, all the more of course,” he adds.

On transparency generally, the Commission told us it “always encourages projects to publicise as much as possible their results”. While, for iBorderCtrl specifically, it said more information about the project is available on the CORDIS website and the dedicated project website.

If you take the time to browse to the ‘publications‘ page of the iBorderCtrl website you’ll find a number of “deliverables” — including an “ethics advisor”; the “ethic’s advisor’s first report”; an “ethics of profiling, the risk of stigmatization of individuals and mitigation plan”; and an “EU wide legal and ethical review report” — all of which are listed as “confidential”.

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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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