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Venture investors and startup execs say they don’t need Elizabeth Warren to defend them from big tech

Posted by on Mar 8, 2019 in Amazon, AT&T, ben narasin, chief technology officer, coinbase, Companies, economy, elizabeth warren, entrepreneurship, Facebook, Federal Trade Commission, Google, IBM, kara nortman, Los Angeles, Microsoft, new enterprise associates, Private Equity, Social Media, Startup company, TC, Technology, Technology Development, United States, upfront ventures, us government, venky ganesan, Venture Capital, Walmart, world wide web, zappos | 0 comments

Responding to Elizabeth Warren’s call to regulate and break up some of the nation’s largest technology companies, the venture capitalists that invest in technology companies are advising the presidential hopeful to move slowly and not break anything.

Warren’s plan called for regulators to be appointed to oversee the unwinding of several acquisitions that were critical to the development of the core technology that make Alphabet’s Google and the social media giant Facebook so profitable… and Zappos.

Warren also wanted regulation in place that would block companies making over $25 billion that operate as social media or search platforms or marketplaces from owning companies that also sell services on those marketplaces.

As a whole, venture capitalists viewing the policy were underwhelmed.

“As they say on Broadway, ‘you gotta have a gimmick’ and this is clearly Warren’s,” says Ben Narasin, an investor at one of the nation’s largest investment firms,” New Enterprise Associates, which has $18 billion in assets under management and has invested in consumer companies like Jet, an online and mobile retailer that competed with Amazon and was sold to Walmart for $3.3 billion.

“Decades ago, at the peak of Japanese growth as a technology competitor on the global stage, the US government sought to break up IBM . This is not a new model, and it makes no sense,” says Narasin. “We slow down our country, our economy and our ability to innovate when the government becomes excessively aggressive in efforts to break up technology companies, because they see them through a prior-decades lens, when they are operating in a future decade reality. This too shall pass.”

Balaji Sirinivasan, the chief technology officer of Coinbase, took to Twitter to offer his thoughts on the Warren plan. “If big companies like Google, Facebook and Amazon are prevented from acquiring startups, that actually reduces competition,” Sirinivasan writes.

“There are two separate issues here that are being conflated. One issue is do we need regulation on the full platform companies. And the answer is absolutely,” says Venky Ganesan, the managing director of Menlo Ventures. “These platforms have a huge impact on society at large and they have huge influence.”

But while the platforms need to be regulated, Ganesan says, Senator Warren’s approach is an exercise in overreach.

“That plan is like taking a bazooka to a knife fight. It’s overwhelming and it’s not commensurate with the issues,” Ganesan says. “I don’t think at the end of the day venture capital is worrying about competition from these big platform companies. [And] as the proposal is composed it would create more obstacles rather than less.”

Using Warren’s own example of the antitrust cases that were brought against companies like AT&T and Microsoft, is a good model for how to proceed, Ganesan says. “We want to have the technocrats at the FTC figure out the right way to bring balance.”

Kara Nortman, a partner with the Los Angeles-based firm Upfront Ventures, is also concerned about the potential unforeseen consequences of Warren’s proposals.

“The specifics of the policy as presented strike me as having potentially negative consequences for innovation, These companies are funding massive innovation initiatives in our country. They’re creating jobs and taking risks in areas of technology development where we could potentially fall behind other countries and wind up reducing our quality of life,” Nortman says. “We’re not seeing that innovation or initiative come from the government – or that support for encouraging immigration and by extension embracing the talented foreign entrepreneurs that could develop new technologies and businesses.”

Nortman sees the Warren announcement as an attempt to start a dialogue between government regulators and big technology companies.

“My hope is that this is the beginning of a dialogue that is constructive,” Nortman says. “And since Elizabeth Warren is a thoughtful policymaker this is likely the first salvo toward an engagement with the technology community to work collaboratively on issues that we all want to see solved and that some of us are dedicating our career in venture to help solving.”


Source: The Tech Crunch

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Walmart acquires Israel’s Aspectiva, which analyses UGC to recommend products to shoppers

Posted by on Feb 26, 2019 in Artificial Intelligence, aspectiva, Discovery, eCommerce, Europe, Fundings & Exits, product review, recommendations, TC, UGC, user generated content, Walmart | 0 comments

Walmart, the world’s biggest brick-and-mortar retailer, today made an acquisition that speaks to its ongoing efforts to build out its e-commerce experience to better compete with Amazon. Today, the company announced that it acquired Aspectiva, a startup out of Israel whose AI-based technology analyses user-generated content, like customers’ product reviews, and combines it with a shopper’s browsing behavior to make product suggestions to shoppers both online and in stores.

The startup will be joining Store No 8, Walmart’s in-house incubation arm established in 2017 to help the company develop and roll out more innovative shopping experiences. Store No 8 most recently launched a VR shopping experience “startup” called Spatial&, and last year it started a closed beta Jetblack, a text-based shopping concierge service for “busy moms.”

It’s not clear yet whether this will mean Aspectiva will build a standalone service or work on tech that Walmart will roll out across its own stores both offline and online. You could see where Walmart might be able to incorporate its tech to make the shopping experience in both scenarios less static as the startup already works across both.

Some of its products include tech that analyses what in-store shoppers search for on their phones or in store apps while walking around, to suggest what to buy. Aspectiva also crunches product reviews to provide customer overviews to online browsers based on different features of a product, and it also creates comparison reports between different brands of the same product — all from “reading” feedback from other shoppers.

Terms of the deal have not been disclosed by the companies but we’re trying to find out. Aspectiva had raised around $4 million in funding from investors that included KDDI and Global Brain out of Japan, JVP, as well as strategic backers LivePerson and online skate shop Union Five, according to Pitchbook.

Aspectiva was co-founded by Eyal Hurwitz and Ezra Daya, two text analytics engineer alums from CRM company Nice Systems. It looks like the whole team will be joining Walmart, but will continue to be based in Tel Aviv, in its existing offices.

“Our team is extremely excited to be joining Store N° 8 and be part of Walmart’s most recent investment in Israel. Store N° 8’s record of innovation and of developing capabilities that will transform retail as we know it makes for the perfect environment to leverage Aspectiva’s technology throughout the shopping funnel,” said Ezra Daya, CEO of Aspectiva, in a statement.

In its efforts to source more innovation particularly for tackling newer frontiers in commerce, Walmart has been stretching its wings internationally. Last year, the company acquired most of Flipkart, which had been known as the “Amazon of India” (before Amazon doubled down on India, one of the world’s fastest-growing markets for e-commerce, to make sure that it would be the Amazon of India).

And Walmart has also been active in Israel. It’s a strategic investor in Team8, an incubator that conceives of, funds and builds startups in the country; it has a $250 million content JV with media company Eko; it is part of The Bridge, a tech accelerator that promotes Israeli startups; and last year its Indian subsidiary Flipkart acquired Upstream Commerce to help with its own recommendation and pricing algorithms.

“Aspectiva has developed incredibly sophisticated machine learning techniques and natural language processing capabilities, both of which are areas we believe will have profound impact on how customers will shop in the future. Israel is a hotbed of tech talent and innovation. We’re thrilled to join the growing community of entrepreneurs in Israel and see it expand within Aspectiva,” said Lori Flees, Principal of Store No 8, in a statement.


Source: The Tech Crunch

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Blue Apron hopes lower-cost meal kits, now on Jet in NYC, will help save its business

Posted by on Feb 6, 2019 in Blue Apron, eCommerce, Food, food delivery, jet, meal kits, Walmart | 0 comments

Blue Apron is introducing a lower-cost version of its meal kits, initially only for Jet.com shoppers in the greater New York City metro area. The new kits, called “Knick Knacks,” still require refrigeration, but require customers to supply their own protein and produce to complete the meal. But by dropping the two most expensive ingredients from the meal, the company has brought the price down to $7.99, compared with prices that ranged from $17 to $23 for the meal kits that launched on Jet last fall.

As you may recall, Walmart subsidiary Jet announced in October that it would begin selling Blue Apron’s meal kits to its City Grocery customers. Jet had relaunched its site the month prior with a new focus on serving the needs of urban shoppers, which included same-day delivery of groceries. The revamped site is now localized to where shoppers live, with images and messaging specific to the customer’s city.

The localization efforts would begin in New York, Jet said at the time, before rolling out to other major U.S. metros like Boston, Philadelphia and D.C.

Jet then became the first online retailer to sell Blue Apron’s meal kits — giving the meal kit company a needed boost at a time when its subscriber base had been in decline.

Though Blue Apron’s name had become synonymous with meal kits, they were beset with challenges on all sides — including then fast-growing competitors like HelloFresh, an inability to reduce unit costs, customer base declines and the challenges in converting newcomers to subscribers in the face of competition from ready-to-eat meals, delivered on demand and available at most markets today for pickup.

With Knick Knacks, Blue Apron is tackling some of the issues with its meal kits — namely, the high cost and the need to subscribe to receive them.

The company announced Knick Knacks last week on its earnings call, where it reported still very concerning numbers.

Earnings were down -62 percent year-over-year at $-0.18 and quarterly revenues dropped by -28 percent to reach $150.62 million, versus $210.64 million in the same period a year ago.

At this point, the future of Blue Apron is very much tied to how well its strategic partnerships, like this with Jet and the other with WW (formerly, Weight Watchers), eventually play out.

The new kits themselves will include a combination of pre-portioned spices, sauces, grains and dairy ingredients from Blue Apron’s premium suppliers, such as crème fraîche from Vermont Creamery, furikake from Mara Seaweed and preserved lemon puree from NY Shuk, as well as Blue Apron’s own proprietary products, such as its line of custom spice blends, the company says.

The debut collection includes the following:

  • Za’atar-Spiced Chicken
  • Mexican-Spiced Chicken Quinoa Bowl
  • Japanese-Style Steak & Rice Bowl
  • Creamy Shrimp Gnocchi

The kits are available in New York’s metro area only for the time being for both same-day and next-day delivery. The company declined to say when they’d hit other markets, or if Blue Apron would sell the kits elsewhere, like in Jet parent Walmart’s stores.

Blue Apron’s new launch comes at a tough time for the food delivery industry as a whole. Earlier this year, meal delivery business Munchery failed after having raised $125 million; Doughbies, Sprig, Maple, Juicero and Josephine also folded.


Source: The Tech Crunch

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Ousted Flipkart founder Binny Bansal aims to help 10,000 Indian founders with new venture

Posted by on Feb 5, 2019 in Amazon Web Services, Asia, binny Bansal, ceo, Co-founder, Companies, computing, E-Commerce, executive, Flipkart, India, online payments, Sachin Bansal, Startup company, United States, Walmart, web services | 0 comments

Flipkart co-founder Binny Bansal’s next act is aimed at helping the next generation of startup founders in India.

Bansal has already etched his name into India’s startup history after U.S. retail giant Walmart paid $16 billion to take a majority stake in its e-commerce business to expand its rivalry with Amazon. Things turned sour, however, when he resigned months after the deal’s completion due to an investigation into “serious personal misconduct.”

In 2019, 37-year-old Bansal is focused on his newest endeavor, xto10x Technologies, a startup consultancy that he founded with former colleague Saikiran Krishnamurthy. The goal is to help startup founders on a larger scale than the executive could ever do on his own.

“Person to person, I can help 10 startups but the ambition is to help 10,000 early and mid-stage entrepreneurs, not 10,” Bansal told Bloomberg in an interview.

Bansal, who started Flipkart in 2007 with Sachin Bansal (no relation) and still retains a four percent share, told Bloomberg that India-based founders are bereft of quality consultancy and software services to handle growth and company building.

“Today, software is built for large enterprises and not small startups,” he told the publication. “Think of it as solving for startups what Amazon Web Services has done for computing, helping enterprises go from zero to a thousand servers overnight with no hassle.”

“Instead of making a thousand mistakes, if we can help other startups make a hundred or even few hundred, that would be worth it,” Bansal added.

Bansal served as Flipkart’s CEO from 2007 to 2016 before becoming CEO of the Flipkart Group. He declined to go into specifics of the complaint against him at Flipkart — which reports suggest came about from a consensual relationship with a female employee — and, of the breakdown of his relationship with Sachin Bansal, he said he’s moved on to new things.

It isn’t just xto10x Technologies that is keeping him busy. Bansal is involved in investment firm 021 Capital where he is the lead backer following a $50 million injection. Neither role at the two companies involves day-to-day operations, Bloomberg reported, but, still, Bansal is seeding his money and experience to shape the Indian startup ecosystem.


Source: The Tech Crunch

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Moglix raises $23M to digitize India’s manufacturing supply chain

Posted by on Dec 18, 2018 in Accel Partners, Amazon, Asia, chairman, E-Commerce, eCommerce, Flipkart, funding, Fundings & Exits, IFC, India, innoven capital, jungle ventures, Moglix, online payments, ratan tata, SaaS, series C, Singapore, temasek, Walmart, World Bank | 0 comments

We hear a lot about India’s e-commerce battle between Walmart, which bought Flipkart for $17 billion, and Amazon. But over in the B2B space, Moglix — an e-commerce service for buying manufacturing products that’s been making strides — today it announced a $23 million Series C round ahead of a bigger round and impending global expansion.

This new round was led by some impressive names that Moglix counts as existing investors: Accel Partners, Jungle Ventures and World Bank-affiliated IFC. Other returning backers that partook include Venture Highway, ex-Twitter VP Shailesh Rao and InnoVen Capital, a venture debt fund affiliated with Singapore’s Temasek. The startup also counts Ratan Tata — the former chairman of manufacturing giant Tata Sons — Singapore’s SeedPlus and Rocketship on its cap table.

Founded in 2015 by former Googler Rahul Garg, Moglix connects manufacturing OEMs and their resellers with business buyers. Garg told TechCrunch last year that it is named after the main character in The Jungle Book series in order to “bring global standards to the Indian manufacturing sector.” The country accounts for 90 percent of its transactions, but the startup is also focused on global opportunities.

“The entire B2B commerce industry in India will move to a transactional model,” Garg told us in an interview this week. He sees a key role in bringing about the same impact Amazon had on consumer e-commerce.

“We think there’s an opportunity to start from a blank sheet and rewrite how B2B transactions should be done in the country,” he added. “The entire supply chain has been pretty much offline and fragmented.”

In a little over three years, Moglix has raced to its Series C round with rapid expansion that has seen it grow to 10 centers in India with a retail base that covers over 5,000 suppliers and supplying SMEs.

Yet, despite that, Garg has kept things lean as the company has raised just $41 million across those rounds, including a $12 million Series B last year, with under 500 staff. However, Moglix is laying the foundations for what he expects will be a much larger fundraising round next year that will see the company go after international opportunities.

“This [new] round is about doubling, tripling, down on India but also establishing a seed in a couple of countries we are looking at,” Garg said.

Moglix aims to make the B2B online buying experience as intuitive and user-friendly as e-commerce sites are for consumers

Adding further color, he explained that Moglix will expand its Saas procurement service, which helps digitize B2B purchasing, to 100 markets worldwide as part of its global vision. While that service does have tie-ins with the Moglix platform, it also allows any customer to bring their existing sales channels into a digital environment, therein preparing them to get their needs online, ideally with Moglix. That service is currently available in eight countries, Garg confirmed.

Beyond making connections on the buying side, Moglix also works with major OEM brands and their key resellers. The basic pitch is the benefits of digital commerce data — detailed information on what your target customers buy or browser — as well as the strength of Moglix’s distribution system, tighter fraud prevention and that aforementioned digital revolution.

“Brands have started to realize [that digital] will be a very important channel and that they need to use both [online and offline] for crafting their distribution,” explained Garg.

Indeed, a much-cited SPO India report forecasts that B2B in India is currently a $300 billion a year market that is poised to reach $700 billion by 2020. Garg estimates that his company has a 0.5 percent market share within its manufacturing niche. Over the coming five years, he said he believes that it can reach double-digit percent.

While it may not be as sexy as consumer commerce, stronger unit economics — thanks to a large part to different buying dynamics of business customers, who are less swayed by discounts — make the space something to keep an eye on as India’s digital development continues. Already, Garg paid credit to GST — the move to digitize taxation — as a key development that has aided his company.

“GST enabled good trust and accelerated everything by 2/3X,” he said.

There might yet be further boons as the Indian government chases its strategy of becoming a global manufacturing hub.


Source: The Tech Crunch

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Walmart in China is now testing same-day grocery delivery from Dada via WeChat

Posted by on Nov 21, 2018 in Asia, China, dada, E-Commerce, eCommerce, grocery delivery, Retail, same-day delivery, TC, Walmart, WeChat | 0 comments

Walmart has just begun testing same-day grocery delivery called Walmart To Go in one of its stores in China, months after the American retail titan expanded grocery delivery in its homeland.

The service is accessed through a mini-program within WeChat – the Tencent-owned messaging platform Walmart partnered with earlier this year, in order to better reach its Chinese customers. The retailer hasn’t made a formal announcement about the same-day grocery delivery because the service is being tested while Walmart collects customer feedback. However, there is signage in the store that informs customers about the option.

walmart delivery china

Customers near Walmart’s Xiangmihu store can now have groceries delivered to their doorsteps within one hour.

The test is taking place in the main Walmart WeChat mini-program, and appears when you select the store where the delivery service is enabled.

The feature allows Walmart’s WeChat customers to place orders on mobile and then receive delivery in as little as one hour. Nearly 8,000 SKUs are available on the service, Walmart says, including fresh products, condiments, snacks, baby items, personal care items, homecare items, a range of products from Walmart’s private brand Great Value, and Walmart’s Direct Import products sourced from around the world.

In addition, customers who shop in the store using Walmart’s Scan and Go for quick checkout can now easily re-order those items from home through the service.

Though the deliveries are provided by Dada, the new Walmart to Go service is not directly related to the recent investment that JD.com and Walmart jointly made to deepen JD’s “borderless retail” strategy that blends online and offline shopping, the company clarified with TechCrunch.

In August, the Alibaba archrival and Walmart poured $500 million into Dada-JD Daojia, which is part-owned by JD and offers same-hour grocery delivery across 63 Chinese cities. JD and Walmart’s tie-up dates back to 2016, when the Chinese online retailer scooped up the American firm’s Chinese e-commerce marketplace Yihaodian.

However, Walmart To Go is another of Walmart’s ominchannel  initiatives – this one, focused on personalizing the shopping experience for the customer by way of product recommendations and coupons customized to the individual user. Explained a company rep, Walmart to Go is just one more channel to serve customers shopping through the WeChat mini-programs.

At TechCrunch Shenzhen, Walmart’s Senior Director of E-commerce in China, Ted Hopkins, confirmed the test being advertised in the Walmart Xiangmihu store (or known to Shenzhen customers as 沃尔玛 香蜜湖店) is brand-new. It’s been operating for about a week, he said, and invited the event attendees to go check it out and offer feedback.

The store is located near Walmart’s offices in the city, which could be why it’s the first to launch the service. It’s also the first to test Walmart’s new mini-program that allows in-store shoppers to access a digital map that shows the location and stock status of store inventory.

walmart delivery china

The mini-program helps customers locate where these apples are in the store.

Walmart has been working on integrations with WeChat since the beginning of the year, then began scaling the programs in earnest in late March to early April 2018. It rolled out its Scan-and-Go technology, which allows Chinese shoppers to scan items in their shopping cart then pay using a program within WeChat. In a five-month period, Walmart scaled this from 10 stores to over 400 stores.

Walmart’s tie-up with WeChat appears is a logical move as its ally JD.com counts Tencent as a major shareholder. Meanwhile, Alibaba’s e-commerce platforms including Tmall and Taobao are noticeably absent within WeChat as links to these services are blocked on China’s biggest messaging app.

Since becoming an option within WeChat through the platforms mini-programs, customers are adopting this sort of digital payment method at scale. Its best performing store has over 40 percent order penetration, Hopkins noted.


Source: The Tech Crunch

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What I learned from Flipkart

Posted by on Aug 27, 2018 in Column, eCommerce, Flipkart, India, myntra, Naspers, Sachin Bansal, Walmart | 0 comments

Two weeks ago, Walmart concluded its investments to acquire a majority stake in Flipkart.

This is one of the largest transactions in e-commerce and in the internet space globally, with Walmart deploying US$16 billion to obtain an approximate 77 percent shareholding at closing. As part of this transaction, my company, Naspers, exited fully, selling our 11.18 percent stake for $2.2 billion.

In addition to the obvious financial success — a 3.6x or $1.6 billion absolute return in six years — being part of one of the greatest success stories of the Indian and global e-commerce market led to countless insights for Naspers.

Our journey with Flipkart will help us to further shape how we partner with entrepreneurs to build leading technology companies in the future.

I was fortunate enough to have had a front-row seat at Flipkart for the past six years, leading our various investment rounds and being Naspers’ appointed board director. Here are some of the key lessons that I will remember moving forward.

Pursue big market opportunities and solve big problems

E-commerce is a global trend that manifests in every market around the world. The potential of Indian e-commerce is beyond any doubt, with a total retail market of more than $500 billion. Before Flipkart, Indian e-commerce customers were repeatedly disappointed by mediocre selection, low product quality, little flexibility in payment options and a lengthy delivery experience.

Flipkart was the first player to solve these issues at scale, opening up the marketplace to more categories (starting with media and then rapidly expanding into electronics, lifestyle, etc.), offering warehouse services, and introducing its own courier network, Ekart, that ensured customer delight and cash on delivery. Other players eventually offered similar services, but Flipkart was the pioneer.

Market leadership is key to sustainable success, even in e-commerce, which tends to have “winner takes most” as opposed to “winner takes all” characteristics. Leaders enjoy attention from sellers, buyers, as well as existing and prospective employees. They continue to innovate while laggards are trying to catch up. Throughout our six-year journey with Flipkart, the company was in a market leadership position against strong competition from global and local online players.

Given the rapid growth of the Indian e-commerce market, Flipkart had to scale its tech platforms while also scaling its business model and organization. This is hard to do, and we’ve seen many businesses fail to scale. Flipkart was not one of them.

As a market leader and pioneer in the Indian e-commerce market, Flipkart had to sail unchartered waters. Experimenting while increasing in scale carried significant risk for the organization and had consequences for the market — Flipkart made many bold decisions over the years. Many of these worked out beautifully, such as acquiring Myntra in May 2014 to obtain a strong position in the strategic fashion and apparel category, or establishing Big Billion Day as the marquee sales event of the year.

There were others that did not work out, like trialing app-only shopping, but these failures never deterred the team from taking chances and changing course if needed, while always capturing the lessons. In the end, the app-only move allowed the company to become mobile-centric and a clear innovation leader in this area.

Think globally, but act locally

Flipkart is focused on the Indian market, but the competitive battle for sellers, buyers and talent is fought globally. The team adopted global best practices like Big Billion Day, which was inspired by ideas from the U.S., China and Romania.

They also measure success based on KPIs constantly drawing comparison with global market leaders. Most importantly though, Flipkart always innovated for the local market, taking local tastes into account (as serviced by the multitude of private label brands at Flipkart and Myntra), as well as bandwidth and affordability constraints on the customer side, leading to super-light mobile sites and apps, as well as various trade-in and financing programs.

Play the long game

Despite multi-billion-dollar trading volumes, the current e-commerce market in India is still mostly driven by affluent metro city dwellers in places like Mumbai, Delhi and Bangalore. This is not dissimilar to what we’ve seen in other countries around the world at a similar development stage as e-commerce in India.

However, to really unlock the potential of Indian e-commerce, one has to reach the hundreds of millions of customers that live in tier-two or -three cities, or in the countryside.

This will require a very unique approach in terms of selection, price points and delivery and payment mechanisms. Flipkart management spends a considerable amount of time strategizing about these challenges.

The common thread in all of these lessons is that you need to have strong, inspiring leaders who come from the local market and have the vision and desire to scale their platforms responsibly and skillfully. Whether it was Binny and Sachin as co-founders of the business, or Kalyan, Ananth and Sameer in leading the respective Flipkart, Myntra and PhonePe business units, without these leaders it would have not been possible for Flipkart to grow to what it is today. I’m very grateful for my time with Flipkart and wish the team and Walmart all the best in continuing this incredible journey… a journey made in India.


Source: The Tech Crunch

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Your vegetables are going to be picked by robots sooner than you think

Posted by on Aug 8, 2018 in agriculture, america, Artificial Intelligence, Culture, Emerging-Technologies, executive, Food, harvard, neural network, Pennsylvania, robot, Robotics, Root AI, Soft Robotics, TC, Technology, United States, University of Pennsylvania, Walmart, whole foods | 0 comments

In the very near future, robots are going to be picking the vegetables that appear on grocery store shelves across America.

The automation revolution that’s arrived on the factory floor will make its way to the ag industry in the U.S. and its first stop will likely be the indoor farms that are now dotting the U.S.

Leading the charge in this robot revolution will be companies like Root AI, a young startup which has just raised $2.3 million to bring its first line of robotic harvesting and farm optimization technologies to market.

Root AI is focused on the 2.3 million square feet of indoor farms that currently exist in the world and is hoping to expand as the number of farms cultivating crops indoors increases. Some estimates from analysis firms like Agrilyst put the planned expansions in indoor farming at around 22 million square feet (much of that in the U.S.).

While that only amounts to roughly 505 acres of land — a fraction of the 900 million acres of farmland that’s currently cultivated in the U.S. — those indoor farms offer huge yield advantages over traditional farms with a much lower footprint in terms of resources used. The average yield per acre in indoor farms for vine crops like tomatoes, and leafy greens, is over ten times higher than outdoor farms.

Root AI’s executive team thinks their company can bring those yields even higher.

Founded by two rising stars of the robotics industry, the 36 year old Josh Lessing and 28 year old Ryan Knopf, Root is an extension of work the two men had done as early employees at Soft Robotics, the company pioneering new technologies for robotic handling.

Spun out of research conducted by Harvard professor George Whiteside, the team at Soft Robotics was primarily comprised of technologists who had spent years developing robots after having no formal training in robot development. Knopf, a lifetime roboticist who studied at the University of Pennsylvania was one of the sole employees with a traditional robotics background.

“We were the very first two people at Soft developing the core technology there,” says Lessing. “The technology is being used for heavily in the food industry. What you would buy a soft gripper for is… making a delicate food gripper very easy to deploy that would help you maintain food quality with a mechanical design that was extremely easy to manage. Like inflatable fingers that could grab things.”

Root AI co-founders Josh Lessing and Ryan Knopf

It was radically different from the ways in which other robotics companies were approaching the very tricky problem of replicating the dexterity of the human hand. “From the perspective of conventional robotics, we were doing everything wrong and we would never be able to do what a conventional robot was capable of. We ended up creating adaptive gripping with these new constructs,” Lessing said.

While Soft Robotics continues to do revolutionary work, both Knopf and Lessing saw an opportunity to apply their knowledge to an area where it was sorely needed — farming. “Ag is facing a lot of complicated challenges and at the same time we have a need for much much more food,” Lessing said. “And a lot of the big challenges in ag these days are out in the field, not in the packaging and processing facilities. So Ryan and I started building this new thesis around how we could make artificial intelligence helpful to growers.”

The first product from Root AI is a mobile robot that operates in indoor farming facilities. It picks tomatoes and is able to look at crops and assess their health, and conduct simple operations like pruning vines and observing and controlling ripening profiles so that the robot can cultivate crops (initially tomatoes) continuously and more effectively than people.

Root AI’s robots have multiple cameras (one on the arm of the robot itself, the “tool’s” view, and one sitting to the side of the robot with a fixed reference frame) to collect both color images and 3D depth information. The company has also developed a customized convolutional neural network to detect objects of interest and label them with bounding boxes. Beyond the location of the fruit, Root AI uses other, proprietary, vision processing techniques to measure properties of fruit (like ripeness, size, and quality grading).  All of this is done on the robot, without relying on remote access to a data-center. And it’s all done in real time.

Tools like these robots are increasingly helpful, as the founders of Root note, because there’s an increasing labor shortage for both indoor and outdoor farming in the U.S.

Meanwhile, the mounting pressures on the farm industry increasingly make robotically assisted indoor farming a more viable option for production. Continuing population growth and the reduction of arable land resulting from climate change mean that indoor farms, which can produce as much as twenty times as much fruit and vegetables per square foot while using up to 90% less water become extremely attractive.

Suppliers like Howling Farms, Mucci Farms, Del Fresco Produce and Naturefresh are already producing a number of fruits and vegetables for consumers, said Lessing. “They’ve really fine tuned agriculture production in ways that are meaningful to broader society. They are much more sustainable and they allow you to collocate farms with urban areas [and] they have a much more simplified logistics network.”

That ability to pare down complexity and cost in a logistics supply chain is a boon to retailers like Walmart and Whole Foods that are competing to provide fresher, longer lasting produce to consumers, Lessing said. Investors, apparently agreed. Root AI was able to enlist firms like First Round CapitalAccompliceSchematic Ventures, Liquid2 Ventures and Half Court Ventures to back its $2.3 million round.

“There are many many roles at the farm and we’re looking to supplement in all areas,” said Lessing. “Right now we’re doing a lot of technology experiments with a couple of different growers. assessment of ripeness and grippers ability to grab the tomatoes. next year we’re going to be doing the pilots.”

And as global warming intensifies pressures on food production, Lessing sees demand for his technologies growing.

“On a personal level I have concerns about how much food we’re going to have and where we can make it,” Lessing said. “Indoor farming is focused on making food anywhere. if you control your environment you have the ability to make food…. Satisfying people’s basic needs is one of the most impactful things i can do with my life.”


Source: The Tech Crunch

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EBay paid $573M to buy Japanese e-commerce platform Qoo10, filing reveals

Posted by on Jul 20, 2018 in Amazon, Asia, China, E-Commerce, eBay, eCommerce, economy, Flipkart, Giosis, gmarket, India, Japan, korea, online marketplaces, online payments, Qoo10, Software, TC, United States, Walmart | 0 comments

EBay is a very distant second behind Amazon when it comes to e-commerce sales in the U.S., but abroad — and in particular in Asia — it is willing to invest to grow its footprint in a targeted way. In February, eBay paid a total of $573 million to acquire Qoo10, a Japanese sales platform, according to the company’s quarterly earnings filing.

In more detail, the deal consisted of $306 million in cash and the relinquishment of about $266 million in shares in Giosis, a pan-Asian e-commerce marketplace business originally founded as a joint venture with Korea’s Gmarket. Qoo10, which claims two million shoppers, was originally part of Giosis.

The acquisition is similar to a deal eBay did in Korea in 2001 when it purchased Internet Auction Co and linked the Korean service up to its global network of buyers and sellers. That integration has been successful, and today South Korea is eBay’s fourth largest market based on revenue behind only the U.S., Germany and UK, respectively.

Although the acquisition of Qoo10 was first announced in February, the actual price was not disclosed until the company’s earnings report dropped on Thursday. “We believe the acquisition will allow us to offer Japanese consumers more inventory and grow our international presence,” eBay explained in the filing.

The deal underscores how eBay is at the same time pulling back from general plays while doubling down on more targeted opportunities. Earlier this year, the company gave up its stake in Flipkart as part of its acquisition by Walmart, but at the same time committed to investing in a new, standalone eBay operation in India, using some of the $1.1 billion in proceeds it made from selling its Flipkart stake to Walmart.

EBay had an unsuccessful effort in China which ended in 2006 and it hasn’t returned to the country.

According to its latest financial results, the company’s U.S.-based business accounted for $1.1 billion out the company’s total quarterly sales of $2.6 billion. That North American revenue was up five percent year-on-year, but eBay’s revenue from other international locations grew by more over the same period to give the company’s total sales a nine percent annual increase.

That didn’t impress investors, however, and the company’s share price dropped by 10 percent to close Thursday at $34.11.

EBay doesn’t break out revenue for Japan — where Qoo10 operates — but revenue from Korean rose by 13 percent to $304 million in the most recent quarter. Sales for ‘rest of the world’ were up nine percent to $505 million.

While it used to be neck-and-neck with Amazon in terms of e-commerce sales and presence in the US, it has fallen behind over the years and now accounts for just 6.6 percent of online transactions in the country, versus 49.1 percent for its bigger rival.

More growth abroad could be one route to improving those fortunes, with India one of the world’s fastest-growing and most populous economies. But success in the country will be challenging with Flipkart joining forces with Walmart and Amazon’s India unit continuing to grow in strength.

But eBay isn’t going to go head-to-head with those two. Instead, its India operations will focus on cross-border sales, so essentially looking to connect buyers and sellers in the country with opportunities overseas within its network. That’s the same model it has used to effect in other parts of the world, so its acquisition of Qoo10 and its other international services will be a key part of that India strategy, and vice versa.


Source: The Tech Crunch

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Walmart acquiring Shopify is no longer a laughable idea

Posted by on Jul 19, 2018 in Amazon, AWS, bigcommerce, Bonobos, Canada, Column, Demandware, DoorDash, eBay, eCommerce, Flipkart, IBM, India, modcloth, NetSuite, oracle, Postmates, prestashop, Shopify, TC, Tesla, U.S. Securities and Exchange Commission, Walmart | 0 comments

As competition between Walmart and Amazon intensifies, the acquisition of Shopify’s merchant marketplace may be the boost that the Walton family’s juggernaut needs to move ahead.

In May this year, Amazon published its small business impact report, in which it disclosed there are 20,000 small and medium-sized businesses that make a million dollars or more in sales on its platform.

Amazon boasts about 5 million third-party sellers on its marketplace today, with an estimated 100,000 sellers hopping on-board every month.

At 100,000 sellers a month over the next five years, there could be an estimated 11 million sellers on Amazon’s marketplace by 2023.

E-commerce intelligence firm Marketplace Pulse estimates Amazon’s gross merchandise volume, or GMV, for 2018 at $280 billion, set to triple over a five-year period, concluding that the marketplace contribution to Amazon’s GMV would surpass 70 percent by 2023.

Combined with Prime and FBA, this high-level picture sounds like Amazon can afford to not worry about its marketplace. But an uneasy trend seems to simmer within its 5 million cohort. Looking at Feedvisor’s survey of Amazon marketplace merchants from 2017 and 2018 and some interesting trends surface. 

Marketplace merchants are looking to keep their advertising costs low and are worried about rising fees on the Seattle-based company’s e-commerce platform. They’re also concerned about competition coming from Amazon as it continues to launch its own brands. Indeed, 60 percent of merchants told Feedvisor in 2017 that they planned to diversify to other channels. Walmart emerged as the most preferred channel, followed very closely by Shopify and eBay. 

About 10 percent of those surveyed in 2017 were making a million dollars or more in annual sales. A year on, this figure is up to 19 percent. One can tell where these first-time millionaires are heading when we see that Walmart today supports 9 percent more Amazon merchants than it did in 2017.

In its pursuit for parity with Amazon, Walmart has clearly overtaken eBay in merchant preference. The latter supports 12 percent fewer Amazon merchants today than it did in 2017, and is closely trailed by Shopify and Jet.com.

Shopify is one of Canada’s biggest tech success stories

Can Walmart afford to be conservative?

Walmart’s marketplace has 18,000 sellers, 36 percent of whom make at least $2 million in sales — all of whom sell on Amazon!

With its e-commerce business struggling to see gains since 2016, when it acquired Jet.com, Walmart has recently been making the waves with its string of partnerships and acquisitions. In May, it announced that it was partnering with Postmates and DoorDash for expanding its last-mile delivery of online groceries.

In what seemed to be a rebuttal to Amazon’s private label push, Walmart acquired Bonobos, Shoebuy, ModCloth and Moosejaw. It also announced in May that it was adding four fashion brands to its kitty.

While it continues to be hard-fisted about who sells on its marketplace, a trend seems to be emerging wherein Walmart is not just competing with Amazon but is also striving to bring reputed retail brands under its banner and is attempting to re-shape consumer perception of it being low-price and inexpensive.

Walmart may be second in line to Amazon, but it has its cons. Its process to qualify a third-party seller is more stringent. Sellers need to request an invitation to join and must fulfill certain quality requirements pertaining to product mix, price point and fulfillment.

Unable to differentiate among millions of sellers on Amazon and faced with rigorous screening from Walmart, the best bet for Amazon’s third-party sellers to diversify seems to be to set up their own store.

They can either create their own website or set up a store on an e-commerce platform like Magento or Shopify .

Shopify — the network is bigger than the software

Shopify, the e-commerce platform for small and medium-sized businesses, isn’t too far behind eBay and Walmart in merchant preference.

A seller can set up her own store on Shopify’s basic version for as little as $29 a month. It also has a premium version (for a $2,000 monthly fee) called Shopify Plus aimed at enterprise-level sellers and wholesalers. An estimated 3,600 merchants have already bought into Shopify Plus; among them are popular logos such as Tesla, Kylie Cosmetics and Budweiser.

Shopify has an estimated 600,000 merchants on its e-commerce platform and has seen its merchant base grow annually in excess of 100 percent since 2014.

What particularly makes Shopify attractive — and gives it an upper hand over marketplaces like Walmart — is its third-party network of developers, photographers, digital marketers and designers that merchants can leverage for their business. Shopify today is a more turnkey platform than Walmart! Of all digital commerce revenues in 2017 — totaling $2.3 trillion — Shopify sellers’ GMV was 1 percent, worth $26 billion, which shows just how important Shopify is next to Walmart.

Analysts are betting big for the next 10 years despite its recent volatility in stock price.

Around the same time, when Amazon published its small business impact report, Shopify announced that it would open a brick-and-mortar store in the U.S. by the end of summer this year to provide in-person advice and consulting services to its customers.

Such a showroom would also provide Shopify the opportunity to cross-sell its hardware products to merchants who are looking to go brick-and-mortar.

For these reasons, Shopify will continue to attract more merchants and will become more important in the days to come and, as it does, it will get noticed by the big players — Amazon and Walmart.

Shopify and Amazon share history

Shopify partnered with Amazon in 2015 as its preferred migration partner for webstore merchants. Many Shopify merchants already sell on Amazon; they have the option to use Amazon’s FBA and Payment gateway. And more than 50 percent of Shopify’s 3,600-odd “Plus” merchants sell on Amazon, as opposed to less than 1 percent who sell on Walmart.

Clearly, the preference for Walmart.com is abysmal among Shopify merchants.

At a market cap of $17 billion, Shopify can be acquired by Amazon without much hassle. While this may not be in Amazon’s cards considering the call it took four years ago to shut its webstore business and the ease with which it gets inbound interest from the long-tail e-commerce companies (which forms 90 percent of the independent e-commerce companies base), Walmart should start figuring Shopify into its strategic plans.

When your competition is Amazon, nothing is enough

In its SEC filings for the fiscal year ended January 2018, Walmart said that it is looking to increase investments in grocery and technology. Much of Walmart’s moves in these spaces continue to come across as reactive responses to Amazon:

  • Recently, in its overseas battle against Amazon, Walmart acquired a 77 percent stake in India’s Flipkart for $16 billion.
  • In what could be seen as a long overdue answer to AWS, it revealed its own cloud network.
  • It has also kickstarted efforts to take on Amazon Go. With FBA and Prime seeming invincible, Walmart will never be able to catch up to the giant. But, it can prove to be a serious rival if it decides to acquire Shopify.

(Photo by Joe Raedle/Getty Images)

Why Shopify?

The non-Amazon destination

Today, eBay has more Amazon merchants on its platform than Walmart does. However, Walmart is picking up pace and is evidently becoming more attractive.

Between 2017 and 2018, the percentage of Amazon sellers on eBay reduced from 65 percent to 52 percent. At the same time, Walmart and Jet.com combined saw an increase from 17 percent to 25 percent.

Given 2018’s stats, if Shopify were to become Walmart-owned, about 42 percent of Amazon’s sellers today, would be selling via either Walmart, Jet or Shopify. This would bring the difference between eBay and Walmart (Jet and Shopify included) down to 10 percent, in turn narrowing the competition gap between Walmart and Amazon.

Interestingly, there were rumors in 2017 that eBay was planning to acquire Shopify. The stocks reacted positively but there were no signs that eBay was interested in such an acquisition.

The perfect complement

The fundamental difference between Walmart and Shopify is that the former is a marketplace while the latter is an e-commerce platform.

It is hard for a seller with no distinct brand identity to differentiate herself on a marketplace unlike on a platform. As revenue channels, they are both necessary for a merchant’s omnichannel strategy.

While Amazon will rule the roost in the marketplace arena for a long time to come, merchants should start betting on Shopify. This acquisition will be an opportunity for Walmart to write its story in a market that Amazon tried and quit.

Shopify does not get you shoppers and Walmart does not get you the support services. As a combined entity, their value proposition becomes very compelling.

The apparent weakness is an actual strength

Shopify is not without faults. As with all e-commerce platforms, the majority of their e-commerce merchants are long-tail with little to no revenue. But critics, including Andrew Left of Citron Research, fail to understand that long-tail is sort of a deal pipeline to identify sellers who are likely to grow and contribute significantly to the revenue.

A study of Shopify’s marketplace will validate their claim that the merchants are there for the value of a “one-stop platform and extended services” and not just for Facebook data of their shoppers.

As Brian Stoffel put it in his article, “The moat is strong and growing, even as recent protests have tested the company.”

Shopify’s long-tail merchant base isn’t a weakness. It’s the pipeline that Walmart should value. It could be Walmart’s answer to Amazon’s merchant acquisition spree.

The neighborhood store is actually a Shopify Store

Shopify is an e-commerce platform provider but that’s no reason to dismiss it as a competitive threat to Walmart. Both target merchants are focused on making them sell online, albeit differently.

Walmart handpicks merchants. Shopify doesn’t.

Walmart is a legacy brand and has a perception problem in the market. Shopify is a born millennial, like Jet.

Walmart is competing with Amazon on multiple fronts. Amazon closed its webstore business and switched to an integration with Shopify!

Walmart has no equivalent to FBA. Shopify’s merchants can opt to have their merchandise fulfilled by Amazon.

Brett Andress of KeyBanc Capital Markets drives home the importance of Shopify — “Emerging brands on Shopify are getting larger, and more established brands are gravitating to Shopify to be more nimble.”

While Walmart continues to shop for private label brands in a bid to throw a new spin on its brand identity, it needs to look a few yards away. There are 600,000 of them. Either Walmart could hope for them to come list on its marketplace someday or make itself the very technology that powers their business.

Shopify is known for its ability to attract e-commerce merchants. Its tools — like the name generator, domain name generator, to name a few — are subtle retention hacks to get intending sellers hooked onto its platform. Should a seller decide to sell her business, Shopify has an exchange on which she can list her store for sale. On the partner front, developers, marketers and designers have helped create many success stories, while writing their own. Overall, it seems like the stickiness is here to stay.

With e-commerce still 12 percent of global retail trade and with an expected growth rate of 47 percent over the next three years, Shopify is well-positioned to capture a lot of the e-commerce upside. The neighborhood grocer is now more likely to open on Shopify or sell on Amazon than at the neighborhood. This is also why it makes sense for Walmart to acquire one of the two default portals of entry into e-commerce.

To compete with Amazon, it needs to make moves that shift the ground beneath the foot and a Shopify acquisition could be one of those bets still open.

Can Walmart afford it?

The retail analysts’ consensus is that Walmart needs to expand its e-commerce base, as the default for the younger demographic shopper is still Amazon. Walmart’s marketplace strategy, so far, hasn’t been about becoming that default.

Shopify is a credible option to expand its e-commerce base. Shopify was recently chided by activist investors like Andrew Left for being over-reliant on the top 10 percent of the merchant base.

There are about 4,500 e-commerce companies with $100 million-plus revenue out there and Shopify’s entry into the enterprise commerce market is a reactionary response to the inherent weakness in its own business model (of over-reliance on mid-market and long-tail e-commerce companies). The problem for Shopify and to an equal extent Magento, BigCommerce, WooCommerce and PrestaShop is that the enterprise e-commerce is the territory of Hybris, Demandware, NetSuite etc.

The tough phase for Shopify would be when its mid-market cash cow customers migrate to Hybris or WebSphere or Demandware. It has to backfill from its growing long tail unless it competes head-on with IBM, Adobe, Oracle NetSuite, Demandware or Hybris. This is one of the reasons Magento aligned with Adobe.

The problem for Walmart in making this acquisition though is Wall Street’s view that it’s a mature business with steady returns. Amazon, on the other hand, continues to treat e-commerce as a business which is in its Day 1.

You could observe the pressures Walmart has had in the past. It took Walmart over two years to finally pull the lever on the Flipkart deal, which is going to drain billions from its cash reserves (notwithstanding the revolving credit of $5 billion it has raised to fund the deal).

With the current market cap of $17 billion, Shopify isn’t pocket change. But for reasons mentioned above, Shopify’s growth will be tested. Expanding GMV of existing merchants is easier than conquering the enterprise market, especially if it aligns with Walmart.

Walmart’s cash reserves are less than $10 billion, making it a relatively expensive pursuit likely needing a leveraged buyout, and the market isn’t new to such deals. Amazon, on the other hand, has $265 billion to deploy, but it’s a buy that it doesn’t need. And that sums up Walmart’s predicament as a challenger to Amazon.


Source: The Tech Crunch

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