Month: May 2021

It looks like everyone and their mother is trying to reinvent the Brazilian banking system. Earlier this year we wrote about Nubank’s $400 million Series G, last month there was the PicPay IPO filing and today, alt.bank, a Brazilian neobank, announced a $5.5 million Series A led by Union Square Ventures (USV).

It’s no secret that the Brazilian banking system has been poised for disruption, considering the sector’s little attention to customer service and exorbitant fee structure that’s left most Brazilians unbanked, and alt.bank is just the latest company trying to take home a piece of the pie.

Following Nubank’s strategy of launching a bank with colors that are very un-bank-like, signaling that they do things differently, alt.bank similarly launched its first financial product in 2019 — a fluorescent-yellow debit card which the locals have endearingly dubbed, “o amarelinho,” meaning, “the little yellow card.”

The company, founded by serial entrepreneur Brad Liebman, follows the founder’s $480 million exit of Simply Business, which was acquired by U.S. insurance giant Travelers in 2017.

Unlike many fintechs, alt.bank has a strong social mission and pays commissions for referrals that last for the customer’s lifetime. 

“Most fintechs just help wealthy people get wealthier, so I thought let’s do something with a social mission,” Liebman told TechCrunch in an interview.

To drive home the mission, and really target the unbanked, Liebman and his team of 80 employees have designed an app that can be used by the illiterate. Instead of words, users can follow color-coded prompts to complete a transaction. The company also plans to launch credit products soon.

According to the company, close to a million people have downloaded the android app since launch, but Liebman declined to disclose how many active users the company actually has.

Today, the company’s core offerings include the debit card, a prepaid credit card, Pix (similar to Zelle), a savings account and even telemedicine visits via a partnership with Dr. Consulta, a network of healthcare clinics throughout the country. The prepaid credit card is key because online stores in Brazil don’t accept debit card purchases.

In addition to the perk of ongoing commissions, alt.bank has also partnered with three major drugstores, allowing their users to get 5-30% off any item at the stores, including medication.

While the company is based in São Paulo and São Carlos, Liebman and his family are currently based in London due to regulations around the pandemic.

The investment in alt.bank marks USV’s first investment in South America, solidifying a trend by other major U.S. investors such as Sequoia who only in the last several years have started looking to LatAm for deals.

“The bar was high for our first investment in South America,” said Union Square Ventures partner John Buttrick. “The combination of the alt.bank business model and world-class management team enticed us to expand our geographic focus to help build the leading digital bank targeting the 100 million Brazilians who are currently being neglected by traditional lenders,” he added in a statement. 

 

One the same day as Fortnite maker Epic Games goes to trial with one of the biggest legal challenges to the App Store’s business model to date, it has simultaneously announced the acquisition of the artist portfolio community ArtStation — and immediately lowered the commissions on sales. Now standard creators on ArtStation will see the same 12% commission rate found in Epic’s own Games Store for PCs, instead of the 30% it was before. This reduced rate is meant to serve as an example the wider community as to what a “reasonable” commission should look like. This could become a point of comparison with the Apple App Store’s 30% commission for larger developers like Epic as the court case proceeds.

ArtStation today offers a place for creators across gaming, media, and entertainment to showcase their work and find new jobs. The company has had a long relationship with Epic Games, as many ArtStation creators work with Epic’s Unreal Engine. However, ArtStation has also been a home to 2D and 3D creators across verticals, including those who don’t work with Unreal Engine.

The acquisition won’t change that, the team says in its announcement. Instead, the deal will expand the opportunities for creators to monetize their work. Most notably, that involves the commission drop. For standard creators, the fees will drop from 30% to 12%. For Pro members (who pay $9.95/mo for a subscription), the commission goes even lower — from 20% to 8%. And for self-promoted sales, the fees will be just 5%. ArtEngine’s streaming video service, ArtStation Learning, will also be free for the rest of 2021, the company notes.

The slashed commission, however, is perhaps the most important change Epic is making to ArtStation because it gives Epic a specific example as to how it treats its own creator communities. It will likely reference the acquisition and the commission changes during its trial with Apple, along with its own Epic Games Store and its similarly low rate. Already, Epic’s move had prompted Microsoft to lower its cut on game sales, too, having recently announced a similar 30% to 12% drop.

In the trial, Epic Games will try to argue that Apple has a monopoly on the iOS app ecosystem and it abuses its market power to force developers to use Apple’s payment systems and pay it commissions on the sales and in-app purchases that flow through those systems. Epic Games, like several other larger app makers, would rather use its own payment systems to avoid the commission — or at the very least, be able to point users to a website where they can pay directly. But Apple doesn’t allow this, per its App Store guidelines.

Last year, Epic Games triggered Fortnite’s App Store expulsion by introducing a new direct way to pay on mobile devices which offered a steep discount. It was a calculated move. Both Apple and Google immediately banned the game for violating their respective app store policies, as a result. And then Epic sued.

While Epic’s fight is technically with both Apple and Google, it has focused more of its energy on the former because Android devices allow sideloading of apps (a means of installing apps directly), and Apple does not.

Meanwhile, Apple’s argument is that Epic Games agreed to Apple’s terms and guidelines and then purposefully violated them in an effort to get a special deal. But Apple says the guidelines apply to all developers equally, and Epic doesn’t get an exception here.

However, throughout the course of the U.S. antitrust investigations into big tech, it was discovered that Apple did, in fact, make special deals in the past. Emails shared by the House Judiciary Committee as a part of an investigation revealed that Apple had agreed to a 15% commission for Amazon’s Prime Video app at the start, when typically subscription video apps are 30% in year one, then 15% in year two and beyond. (Apple says Amazon simply qualified for a new program.) Plus, other older emails revealed Apple had several discussions about raising commissions even higher than 30%, indicating that Apple believed its commission rate had some flex.

Ahead of today’s acquisition by Epic Games, ArtStation received a “Megagrant” from Epic during the height of the pandemic to help it through an uncertain period. This could may have pushed the two companies to further discuss deeper ties going forward.

“Over the last seven years, we’ve worked hard to enable creators to showcase their work, connect with opportunities and make a living doing what they love,” said Leonard Teo, CEO and co-founder of ArtStation, in a statement. “As part of Epic, we will be able to advance this mission and give back to the community in ways that we weren’t able to on our own, while retaining the ArtStation name and spirit.”

Clubhouse, the voice-based networking app that’s now being knocked off by every major tech platform, is bringing its service to Android. The company announced during its weekly townhall event that its Android version has entered beta testing with a handful of non-employees who will provide the company with early feedback ahead of a public launch.

In its release notes, Clubhouse referred to this test as involving a “rough beta version” that’s in the process of being rolled out to a group of “friendly testers.” That means there’s not a way for the broader public to sign up for the Android app just yet.

The lack of an Android client combined with its invite system initially gave Clubhouse an aura of exclusivity. You had to know someone to get in, and then you would need an iOS device to participate. But the delay to provide access to Android users also gave larger competitors time to catch up with Clubhouse and court users who were being left behind. One of the largest of the rivals, Facebook, recently challenged Clubhouse across all its platforms and services, in fact.

Facebook announced a full audio strategy that included a range of new products, from short-form audio snippets to a direct Clubhouse clone that works across Facebook and Messenger. It also announced a way for Instagram Live users to turn off their video and mute their mics, similar to Clubhouse. Even Facebook’s R&D division tested a Clubhouse alternative, Hotline, which offers a sort of mashup between the popular audio app and Instagram Live, with more of a Q&A focus.

Meanwhile, Twitter is continuing to expand its audio rooms feature, Twitter Spaces, and there are Clubhouse alternatives from Reddit, LinkedIn, Spotify, Discord, Telegram and others, in the works, too.

For Clubhouse, that means the time has come to push for growth — especially as there are already some signs its initial hype is wearing off. According to app store intelligence firm Apptopia, Clubhouse has seen an estimated 13.5 million downloads on iOS to date, but the number of daily downloads has been falling, mirroring a decline in the number of daily active users.

Apptopia’s data shows that Clubhouse’s daily active users are down 68% from a high in February 2021, though that doesn’t necessarily mean that Clubhouse is over — it’s just becoming less of a daily habit. But if the company is able to build out its creator community and establish a number of popular shows, which it’s aiming to do via its accelerator, it could still see users tuning in on a weekly and monthly basis. And those sessions would be longer in comparison with some other social apps, as Clubhouse users often tune into shows that run over an hour — even leaving the app open as they do other tasks.

For example, Clubhouse’s average session time per user is about 125% higher than Snapchat or Instagram. But compared with a streaming app like Spotify, sessions are shorter. Spotify’s average session per user is about 63% higher than Clubhouse, Apptopia data indicates.

However, Clubhouse is taking aim at the challenges around re-engaging people whose usage may have dwindled in recent days. Also during its townhall, the company announced it would introduce a bell icon for events that will allow users to be notified about the events to which they’ve RSVP’d. This will be important for creators who are advertising their events, as well.

Clubhouse didn’t give a specific time frame as to when its Android app would reach more testers or the wider public, only noting that it’s looking forward to welcoming more Android users in the “coming weeks.” In March, Clubhouse said the Android launch would take a couple of months.