View profile

The Climb #14 - Massive rounds are back, America rushes for India's digital economy, livestreaming e-commerce and more 🔥

Hi all! The last 15 days have been marked by some interesting significant funding rounds in the Frenc
The Climb #14 - Massive rounds are back, America rushes for India's digital economy, livestreaming e-commerce and more 🔥
By Ghislain de Buchet • Issue #14 • View online
Hi all!
The last 15 days have been marked by some interesting significant funding rounds in the French ecosystem, another large foodtech merger approved in Europe and a new Seed fund disclosed. In this issue, I also discuss livestreaming e-commerce, an interesting trend that comes directly from China.
Time to move on: this newsletter is the last one under this format. Thanks again for reading me, I really enjoyed writing to you every 15 days. Just reply to this email to keep the discussion alive!
Ghislain

🥖 Funding activity in France
> The marketplace for refurbished electronic devices Back Market raised €110m from Goldman Sachs, Aglaé Ventures and Eurazeo. The company develops an online platform to guarantee transparency, homogeneity and quality on the second-hand consumer electronics market. Launched in 2014, it now gathers a network of 1,200 active certified sellers that mainly offer smartphones, tablets and laptops.
> Rouen-based medtech company Robocath raised a €40m Series C led by China’s MicroPort Scientific Corporation to expand to Asia. The company develops devices and software solutions to assist surgeons in interventional vascular medicine.
> InsideBoard, which develops an AI-based change management SaaS, gathered €25m from AXA Venture Partners (lead), Orange Ventures and ISAI Cap Venture. The company will use the funding to further develop its solutions and start its international expansion (including the US).
> Other funding rounds include HRtech Andjaro (€13.4m), cash management SaaS Agicap (€13m), e-commerce platform for refurbished devices Certideal (€8m), next-gen microbatteries Iten (€7m), long-term scooter rental service Zeway (€6.9m), fashion blog & e-commerce Bonne Gueule (€6.5m), digital toolkit for legal professionals Seraphin.legal (€2m), mapping intelligence solution Articque (€2m) and in-room digital solutions for the hospitality industry Bowo (€2m) among others.
🌍 Stories in Europe
> European digital food giants - Right after Amazon’s $575m investment in Deliveroo was provisionally approved by UK’s Competition Market Authority, the £6.2bn Just Eat Takeway.com deal was finally cleared by UK’s competition watchdog. The merged entity also raised additional £700m through new shares and convertible bonds.
> German challenger bank N26 grabbed additional $100m from its existing investors as a second extension of its Series D. The operation still values the company at $3.5bn and brings the D round to c. $780m in total. N26 will use the funds to accelerate its penetration in Europe, the US and Brazil.
🤝 Fellow backers
> Partech announced Partech Entrepreneur III Fund, a fresh $100m Seed fund. Like the other two Seed funds of the Paris-based investment firm, the focus will be on startups that operate in the future of health, work, commerce, finance, mobility and computing. 40 investments are already made.
> Atomico announced two new hires for its London office. Sasha Astafyeva (prev. Felix Capital) joined as Partner with a focus on consumer startups and Terese Hougaard joined as Principal (prev. CapitalG).
🔥 Meanwhile in the East...
> Last January, Jeff Bezos was in India to disclose a $1bn investment in the country. Now it’s Facebook that is doubling down on India’s digital economy: Mark Zuckerberg just announced a $5.7bn investment in Reliance Jio Platforms (India’s largest telecom network). The partnership is expected to help Reliance accelerate on e-commerce, hand in hand with Reliance Retail (India’s largest retail chain), and develop fintech capabilities for the 1.4bn-people country. For Facebook, the operation will help leverage its unrivaled reach in the country with 400 million users on WhatsApp. An e-commerce platform has already been launched on the messaging service. A week later, tier-1 PE firm Silver Lake also announced its plan to invest $747m in Jio Platforms.
📱 Livestreaming e-commerce
I strongly believe Asia, and especially China, is one step ahead when it comes to social media and e-commerce. In the past months, I have been reading and talking a lot on super-apps, short video platforms and other strong trends in those segments. In this issue, I share some data and thoughts on a multi-billion dollar industry that is having strong tailwinds with the epidemic in China: livestreaming e-commerce.
Lines keep blurring between entertainment and e-shopping. In the last decade, social networks paved the way with the introduction of new ad formats and more and more influencers that populate our favorite platforms. In fact, social media have put a lot of effort to make products discovery easier, and their business model is currently structured around this. However, despite in-app shopping features, social media have not yet fully managed to integrate the last and ultimate buying step to deliver a seamless transaction.
In 2015, some people in China started to sell clothes via live videos: it was the inception of livestreaming e-commerce. Gradually, national e-commerce and social platforms built tools and dedicated features to offer a great livestreaming purchasing experience, expanding the concept to all retail categories from cosmetics to jewelry to smartphones to home decoration to cars to apartments… In 2019, livestreaming e-commerce in China generated $61bn in sales and analysts expect that metric to more than 2x in 2020 (e. $129bn). Today, a whole industry is being structured around agencies, wannabe influencers and other middle men. Will it even be possible in the years to come to thrive as an e-commerce player if you’re not content driven?
> 🕺 Make shopping from home great again - Unlike its ancestor (TV shopping), livestreaming is fun. Live shows leave room for spontaneity where we expect hosts to answer our questions in real time and talk honestly about products they showcase. Therefore, it is a lot easier for customers to understand what they are about to buy beforehand, which guarantees a high level of customer satisfaction. Social media and platforms on which live shows take place keep integrating features to provide viewers with a seamless buying experience and instant gratification via overnight delivery options.
> 📣 The power (and fragility) of influencers - More and more livestreaming hosts are professional influencers and key opinion leaders that work with specialized agencies or MCNs. Their job consists in mastering three main steps: attracting, retaining and making people buy. Therefore, as on other social platforms, influencers have the subtle mission of triggering sales while trying to remain authentic so as not to break the essential trustworthy relationship they try to maintain with their fan base. Usually, people strongly identify with best-known influencers. The live format enables viewers to directly interact with celebrities which strengthens the relation between influencers and their followers and leads to higher conversion rates.
Austin Li testing lipsticks on a livestreaming session
Austin Li testing lipsticks on a livestreaming session
Best livestreamers can generate staggering amount of sales in a very short time. For instance, Austin Li built his reputation by selling 15k lipsticks in 5 minutes. He now has c. 50 million followers on Douyin (Bytedance’s Chinese version of TikTok) and each of his shows attracts thousands of people. To date, the most powerful livestreaming influencer in China is called Viya: she holds the record of c. €50m in sales in only one day. However, despite few success stories that turned random people into HNWI, Chinese livestreamers get paid a reasonable $1,395 monthly salary on average. Most of them work 12+ hours a day, on a 6/7 basis, and are highly dependent on their agencies and platforms.
> 🛍️ Strengthened D2C capabilities - Livestreaming e-commerce also opens new opportunities for brands and small business owners eager to showcase their products and interact directly with their consumers. For instance, the on-going outbreak made farmers and rural producers rush on Alibaba’s Taobao Live and similar platforms to reach buyers across the country and try to sell their fresh products directly to consumers.
> 🌎 A global trend? - While livestreaming e-commerce keeps growing fast in China (433m users in 2019, i.e. 50% of Chinese internet users), the trend is expanding to Southeast Asia. Major digital players such as Grab, GoJek, Bukalapak or Lazada launched or are about to launch their live streaming tools. However, it remains uncertain if livestreaming e-commerce could become mainstream worldwide. In the West, influencing has remained mainly asynchronous, with celebrities leveraging Youtube or Instagram to sell products. Also, people increasingly want to make an informed choice without being subjected to influencers who are more and more criticized. Livestreaming platforms (o/w Youtube, Instagram TV, Twitch, etc) are mainly used for gaming and entertainment but have not become major e-commerce sales channel yet. Amazon launched Amazon Live early 2019 but failed at proposing an entertaining experience until now (just give it a try). On the other hand, TikTok, which just reached 2bn cumulative downloads globally, just announced it was testing a “Shop Now” button with major brands and influencers.
Livestreaming e-commerce could be a massive growth driver for social media and e-commerce platforms. Future will tell how the trend will translate into the Western tech landscape.
💡 Essential content
> Bessemer Venture Partners released its annual State of The Cloud report
That's it for this issue.
Thanks for reading The Climb!
📢 If you liked it, the best way to show your support is to forward this digest to someone who might love it too.
👋 If you’re not a subscriber, you’re invited to join the crew.
💚 Make sure next revues do not land into your spam folder by adding the email address to your contact list.
✉ Reach out to me for any feedback, recommendation or just to send kind words.
Did you enjoy this issue?
Ghislain de Buchet

Talking about tech & VC every second Wednesday

If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue