Zebeth Media Solutions

Commerce

Cover Genius lands $70M infusion to grow its embedded insurance business • ZebethMedia

In 2014, Angus McDonald, the former head of publisher partnerships at Yahoo (full disclosure: ZebethMedia’s parent company), teamed up with ex-Googler Chris Bayley to found Cover Genius, an insurtech platform that prices and handles claims for virtually any line of insurance or warranty. After expanding the business to all 50 U.S. states and more than 60 countries, Cover Genius is gearing up for its next phase of growth, McDonald says, fueled by significant fresh capital. Cover Genius today announced that it raised $70 million in a Series D round led by Dawn Capital with participation from Atlas Merchant Capital, GSquared and King River Capital. Bringing the 420-person company’s total raised to $165 million, McDonald tells ZebethMedia that the proceeds will be put toward “assisting business growth” and further expanding Cover Genius’ insurance distribution services. “We’ve co-created a wide range of protection solutions for partners across many verticals including several of the world’s largest airlines and travel companies, retailers and logistics players, mobility, auto and gig economy companies, banks, fintechs and proptechs and business-to-business software and event ticketing companies,” McDonald said in an email interview. “Having been bootstrapped in our early days, only raising $1 million from inception in 2014 to our Series B in 2018, we’ve been blessed to have significant partners to ensure a healthy and sustainable cash flow, while also carrying frugality in our DNA.” McDonald and Bayley were motivated to launch Cover Genius after encountering insurance challenges with their previous joint venture, an international online travel agency. They found that traditional insurers were difficult to work with because every country the co-founders wanted to target required a separate insurance agreement with separate country leads. In creating Cover Genius, McDonald and Bayley worked to gain licensing and approvals for embedded insurance in most major countries around the world. Unlike typical insurance plans, embedded insurance like Cover Genius’ is bundled with the purchase of a product or service, offered in real time or at the point of sale. Ridesharing app Ola uses Cover Genius to offer insurance to both drivers and riders. Betterplace, an India-based human resources management software provider, taps Cover Genius’ technology to provide healthcare to contract workers. As for buy now, pay later provider Zip, Cover Genius built an AI-powered tool that classifies insurable items (e.g. a power drill) to recommend warranties to e-commerce customers. Among the products Cover Genius offers is Shake Shield, earthquake insurance backed by Swiss Re. Image Credits: Cover Genius “We strongly believed in the embedded insurance model, which is the ability to protect customers at the point of sale or sign-up, and that there would be a major value shift away from direct-to-consumer and traditional insurers toward digital platforms partnering with insurtechs,” McDonald continued. “Customers gain access to tailored protection at the right time, removing the inconvenient need to take a second step to purchase protection. Partners achieve bottom-line growth and stickier customers and insurers benefit from a data-rich distribution channel.” There’s no doubt that embedded insurance is the hot new thing in insurtech. Startups in the space, many founded within the past five years, raised close to $800 million in VC funding in 2021. And a recent report from Simon Torrance, an embedded finance and app strategies advisor, estimates that embedded insurance in property and casualty alone could account for over $700 billion in gross written premiums by 2030, or 25% of the total market worldwide. New York-based Cover Genius has competition in insurance vendors like Extend and Bolttech. But it also has a robust client base, covering 10.5 million customers across merchant partners such as Intuit, Kayak, Booking Holdings, Priceline, Turkish Airlines, SeatGeek, Amazon, eBay and Wayfair. While Cover Genius was initially impacted by the pandemic — the company primarily offered travel insurance in 2020, when the industry took a hit — McDonald notes that it’s been able to branch into a range of new market segments over the past two years. The branching out came through a combination of product launches and acquisitions. In July, Cover Genius made a strategic investment in India-based insurtech Ensuredit and bought Booking Protect, a ticket refund protection startup that brought SeatGeek onto the Cover Genius Platform. And in June, Cover Genius launched a “price-optimized” warranty offering for small- and medium-sized ecommerce businesses. One hurdle on the path to expansion that Cover Genius will have to overcome is the general sentiment around insurance — which isn’t positive. A 2019 survey by the Geneva Association, a global association of insurance companies, found that more than half of people (53%) have had a bad insurance experience. In a separate report from IBM, less than half of customers said that they trust the insurance industry. McDonald says that Cover Genius’ products speak for themselves. “By delivering peace of mind and a high-quality customer experience, boosted by product relevance and seamlessness from the time of sale to claims, our partners get to enter new territory with their customers,” he said. “In the past, they’ve either had experience working with traditional insurers, who negatively impact the customer experience and invariably cause churn and backlash against their own brand, or they’ve tried to engage with traditional insurers and have given up because all the ‘heavy lift’ otherwise sits with them.”

Shopify acquires Remix to bolster its storefront design tools • ZebethMedia

Remix, a startup developing an open source web framework similar to Next.js, has been acquired by Shopify, the companies announced in a joint statement today. The financial terms weren’t disclosed, but in a blog post, Remix CEO Michael Jackson said that Remix will receive “long-term backing and support” from Shopify that will allow it to “grow faster” and “sharpen its focus on performance and scalability.” “You’ll be seeing a lot more [of the Remix framework] in the wild, powering some of the largest commercial sites on the web,” Jackson said. “In addition, Shopify itself will use Remix across many projects, and you can expect to see more of Shopify’s developer platform include first-class support for Remix over time.” Remix was co-founded by Jackson — an ex-Twitter engineer — and Ryan Florence in 2020. The two worked together for years creating open source tools around React, a JavaScript library for building app UIs, before deciding to launch the eponymous Remix framework. One of Jackson’s and Florence’s best-known projects is React Router, a library for React, which has been downloaded almost a billion times. Not coincidentally, Shopify originally used React Router to architect Hydrogen, the company’s front-end web development framework for building custom Shopify storefronts. As for Remix, it’s a full-stack web framework that’s designed to leverage distributed systems and native browser features while abstracting away back-end server tasks. Compatible with public cloud environments, including Amazon Web Services, Google Cloud, Netlify, Vercel and Cloudflare Workers, one of Remix’s key features is prefetching — the framework can prefetch elements of a web page in parallel, including buttons and forms, before a user clicks on a link to minimize page loading. Prior to the Shopify acquisition, Remix had raised $3 million in seed capital from OSS Capital and angel investors Naval Ravikant, Ram Shriram and Sahil Lavingia. In a post on the Shopify Engineering blog, Dion Almaer, VP of engineering at Shopify, said that the purchase of Remix will benefit both Shopify developers and merchants by bringing improvements to Hydrogen. “Remix will continue to be an independent and open-source framework,” Almaer said. “Remix will tackle challenges that developers building on Hydrogen have encountered around data loading, routing, and error handling … Shopify will use Remix across many projects where it makes sense, and you can expect to see more of our developer platform with first-class Remix support over time.” Remix is Shopify’s first acquisition since Deliverr, the fulfillment tech provider that the e-commerce giant purchased in May for $2.1 billion. Earlier in the year, Shopify snatched up Dovetail, which helps brands manage influencer marketing campaigns. The company also recently invested in Single, a music and video app used by many businesses on Shopify, following equity pledges in CMS developer Sanity and marketing automation startup Klaviyo. After a rocky Q2, there are signs that Shopify is beginning to better weather the economic downturn. The company posted smaller-than-expected Q3 losses last week, leading shares to jump as high as 17%.

Topline Pro grabs $5M to help home service businesses scale online • ZebethMedia

Like many “solopreneurs,” home service professionals have to balance doing the work while also managing a business. Topline Pro wants to take some of that burden off the shoulders of professionals so they can concentrate on customers. New York-based Topline Pro, formerly ProPhone, does this by leveraging generative artificial intelligence to provide a way for these businesses to get discovered, build trust among customers and generate repeat customers. The interface creates a custom website with search-engine optimization that can go live the same day. It showcases the professional’s business, including collecting online reviews, scheduling bookings and accepting payments. Meanwhile, the AI generates additional content, including local listings and automating social media content. Nick Ornitz, co-founder and CEO, started the company with Shannon Kay after meeting in business school. Inspiration for Topline Pro came from Ornitz’s siblings who are among the 5 million people running service-based companies, from landscaping to painting to cleaning and general contracting. In talking with them and home improvement retailers that he previously worked with, he and Kay realized just how much these businesses were relying on pen and paper. Topline Pro co-founders Shannon Kay and Nick Ornitz. Image Credits: Topline Pro “When you talk to a homeowner they were disappointed or frustrated by the experience and when you talk to the business owner, they’re trying their best to do the work, but also run the business,” Ornitz told ZebethMedia. “That just seemed like a really big opportunity.” Their initial idea, then called ProPhone, connected plumbers with homeowners over video chat. The co-founders even went through Y Combinator as part of the Winter 2021 batch. However, while accelerating the business, many of ProPhone’s plumber customers were saying that they like the video calls, but needed more jobs and they didn’t know how to grow their business beyond word-of-mouth. That’s when Ornitz and Kay pivoted to Topline Pro. They launched the current subscription product, which starts at $75 per month, in January of 2022. In 10 months, the company has generated more than $25 million in job requests across more than 1,000 monthly subscriber businesses in nearly all 50 states, Ornitz said. Topline is not alone in helping professionals manage their businesses digitally. In fact, this is becoming a hot area for startups to play in and for investors to flock. For example, in July, Finli, which developed a mobile-first payment management system for businesses, raised $6 million. Earlier this year, Zuper, a provider of productivity tools for field service management and customer engagement, raised $13 million. Before that, Fuzey raised $4.5 million in seed funding for its “digital one-stop shop” for small businesses and independent contractors, while Puls Technologies raised $15 million for its mobile app connecting tradespeople with on-demand home repair services. Ornitz says his company is different in a few ways, it is utilizing GPT-3 to automate unlimited multipage websites and administrative tasks. It is also not a marketplace and so its customers are able to be discovered directly by homeowners online so that they can own the relationships without that middle layer. Meanwhile, today Topline Pro announced $5 million in seed funding, led by Bonfire Ventures, and including TMV, BBG Ventures and a group of angel investors, like Squire co-founder Songe LaRon. Plans for the new capital include developing additional applications for the generative AI; for example, applications that help professionals with their SEO, content and blog updates as well as helping pros with their marketing. Ornitz also expects to add to the company’s 12 employees in the areas of engineering, product and customer success. “We want to make sure that the pro is being discovered by as many people as possible,” he added. “Once you’ve found that pro we want to make sure that the homeowner has an easier process to book with them and also pay with them. We know that word of mouth is still the strongest form of marketing, and we want to augment that.”

Amazon to delist top seller Appario on India marketplace amid regulatory heat • ZebethMedia

Amazon plans to delist large seller Appario Retail, in which it maintains a stake, from the marketplace, the two said Monday, a year after ending ties for another large seller Cloudtail following allegations from retailers that some sellers received preferential treatment. Amazon and Patni Group-owned Zodiac said in a statement that they have agreed to renew their joint venture, called Frontizo Business Services, but have decided that Appario Retail will “cease to be a seller” on Amazon India within the next 12 months. “The partners will continue to explore new business opportunities, including helping businesses across India to scale up their online presence,” an Amazon spokesperson in India told ZebethMedia in a statement. Amazon did not say why it was delisting Appario, but the move follows a growing scrutiny on its owned sellers. India’s antitrust body launched raids on Appario and Cloudtail earlier this year following accusations of competition law violations, Reuters reported in April. A Reuters investigation last year showed that Amazon had given preferential treatment for years to a small group of sellers on its platform and used them to bypass Indian laws. The outlet’s investigation also showed that Amazon had for years helped these sellers with discounted fees. The investigation found that about 35 of Amazon’s more than 400,000 sellers in India in 2019 accounted for around two-thirds of sales on its India website. Of that figure, two sellers, Cloudtail and Appario, contributed 35% of the platform’s sales. India’s Supreme Court last year ruled that Amazon and Walmart-owned Flipkart must face antitrust investigations ordered against them in the country. The Indian watchdog — the Competition Commission of India — ordered an investigation into the firms in 2020 for allegedly promoting select sellers (those in which they own a stake) on their e-commerce platforms and using business practices that stifle competition. Long-standing laws in India restrict Amazon and other e-commerce firms from holding inventory or selling items directly to consumers. To bypass this, firms have operated through a maze of joint ventures with local companies that operate as inventory-holding firms. India got around to fixing this loophole in late 2018 in a move that was widely seen as the biggest blowback to the American firm in the country at the time. Amazon and Walmart-owned Flipkart scrambled to delist hundreds of thousands of items from their stores and made their investments in affiliated firms way more indirect. In a scathing report in August, Indian newspaper The Economic Times found that a group of new sellers run by former executives of Cloudtail and Appario have mushroomed in the country and are listed on the Amazon marketplace. India is a key overseas market for Amazon, which has invested over $6.5 billion in the South Asian market. But it continues to lag its chief rival Flipkart in the country on several metrics and is struggling to make inroads in smaller Indian cities and towns, according to a report by investment firm Sanford C. Bernstein.

Skidattl’s augmented reality beacons are ‘like a Bat-Signal for fun’ • ZebethMedia

Skidattl wants to use augmented reality to get people to engage with the real world. It’s a story we’ve heard before from AR companies, particularly as they pit themselves against the potentially isolating effects of virtual reality. But rather than chasing metaversal Pokémon creatures on the street, Skidattl aims to use AR “beacons” to show people what’s going on around them. Randy Marsden, Skidattl co-founder, said they will be like “a Bat-Signal for fun” once the app launches. Anyone can make a beacon and anyone can see them. Businesses might set up beacons, which have a one-hour life span, to advertise two-for-one coffee sales, movie times or open bowling lanes. People might shoot up a beacon at a music festival to help their friends find them in the crowd. All a user would have to do is scan the horizon with their phone, or eventually with AR glasses, to see an array of beacons at up to 100 yards of distance, said Marsden. When Skidattl exhibited as part of the Battlefield 200 at TC Disrupt last week, the company had an AR beacon over its booth to demonstrate what it might look like. “Of course, you can look at a map and say, ‘What’s near me?’ but this pulls you back into the real world,” Marsden told ZebethMedia, noting that he is an Apple alum and a two-time ZebethMedia Battlefield finalist for previous companies — Swype (technically TC50) and Dryft (Disrupt SF 2013). Skidattl’s AR beacons will be anchored by GPS coordinates in the real world. To locate where a user is in relation to that beacon, Skidattl uses Google’s ARCore Geospatial API, which relies on Street View data. “When you launch the app, it’ll tell you to scan the buildings across the street, and within a few seconds, it will know where you are,” said Marsden. “And then those beacons are anchored; they don’t move around.” When people want to set up beacons indoors, Skidattl will also use Wi-Fi signals to help position users against the location of those beacons. Skidattl is still in its angel funding stage and alpha tech stage, but the startup hopes to go to market with a freemium business model — meaning it will be free to use but Skidattl can monetize through premium subscriptions, in-app purchases and affiliate commissions. Like any new social media app, Skidattl will have to battle the chicken-and-egg problem — no one will want to use it if there’s not plenty of beacons already lit up, but there can’t be any lit-up beacons without people on the app. “I think we can kickstart the business side pretty easily by giving them a free beacon,” said Marsden. “On the customer side, getting YouTube and TikTok influencers to talk about it, place ads with ZebethMedia and that sort of thing. And then once we have someone in the app, we can give them incentives for sharing with their contacts.” (It goes without saying, but ZebethMedia ad sales are totally separate from editorial.) Skidattl is currently trying to raise $500,000 to finish the minimum viable product and get the money it needs to officially launch its app at South by Southwest in March, Marsden said.

Amazon’s income dipped in Q3 2022 as the economy took its toll • ZebethMedia

Amazon suffered steep losses in year-over-year income as post-pandemic shopping habits and inflation threw the retailer for a loop. In its third quarter 2022 earnings report today, Amazon revealed that operating income decreased to $2.5 billion in Q3 2022 compared to $4.9 billion the same quarter last year, while net income dipped to $2.9 billion versus $3.2 billion during Q3 2021. Operating income refers to earnings after expenses excepting the cost of debt, taxes, and certain one-off items. Net income shows the profit remaining after all costs are subtracted from revenue generated from sales. Amazon noted an operating loss of $0.4 billion in North America in Q3 2022, an unfavorable outcome compared to the nearly $1 billion in operating income the company reached in the quarter a year ago. Internationally, the tech giant fared worse, notching a $2.5 billion operating loss versus Q3 2021’s $900 million loss. As is usually the case, Amazon Web Services (AWS), Amazon’s cloud services division, was a bright spot in an otherwise gloomy quarter, with AWS’ income reaching $5.4 billion in Q3 2022 versus $4.9 billion in the same quarter last year. That is, however, down from the $5.72 billion in operating income that AWS raked in during Q2 2022. On news of Amazon’s Q3 losses, the company’s stock dropped ~20% in after-hours trading. “We’re … encouraged by the steady progress we’re making on lowering costs in our stores fulfillment network, and have a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward,” CEO Andy Jassy said in a press release. “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.”

Countdown to compliance as EU’s Digital Services Act published • ZebethMedia

The European Union’s flagship reboot of long-standing ecommerce rules — aka the Digital Services Act (DSA) — has now been published in the bloc’s Official Journal. You can find the full (and final) text of DSA here. Le Digital Services Act (#DSA) est publié aujourd’hui au Journal Officiel! 📖 Ce texte majeur fera d’Internet un espace plus sûr pour tous les citoyens européens. Retour sur son adoption dans un délai record — un sprint en 7⃣ étapes 🧵 pic.twitter.com/8dMogdUYvV — Thierry Breton (@ThierryBreton) October 27, 2022 Tech firms’ in-house legal teams will be poring over the detail in the coming months as they figure out how to adapt their policies and procedures to ensure compliance and dodge penalties that can scale up to 6% of global turnover for the more egregious breaches. The rules are intended to drive accountability online by streamlining how platforms and marketplaces must tackle illegal content, goods and services, as well as bringing in specific provisions for larger platforms that are aimed at increasing transparency around powerful algorithms. As per EU process, the DSA regulation will enter into force in 20 days’ time (so in mid November). That’s not the real start date though as there’s still a delay before provisions become applicable to allow for a period of adaptation and alignment for businesses. The bulk of the DSA provisions will apply from January 1, 2024, per the Commission. But a subset of obligations — for so-called VLOPs (aka, very large online platforms) — will start to apply next year as the EU has stipulated that application for VLOPs and very large online search engines (aka VLOSEs) will begin four months after they are designated as entering the category. So a swathe of larger tech firms and Big Tech giants will likely have compliance requirements bearing down on them from early next year. For more on the rules digital firms will have to abide by in the EU under the new DSA regime, check out our earlier coverage. A sister regulation, the Digital Markets Act — which exclusively targets Big Tech for ex ante regulation — will also start to apply from early next year. So it’s all change and soon!

Accel backs startup offering ‘Amazon-grade’ commerce engine to online sellers around the world • ZebethMedia

Accel has backed a startup named Mason based in India and the U.S. that has built a commerce engine for sellers around the world to help them sell products online without paying the exorbitant ‘Amazon tax.’ The California-based startup, which has its R&D headquarters in Bengaluru, is claimed to allow sellers to have their D2C storefront ready with a 50% uplift in their margins from day one. It offers a no-code, plug-and-play solution to let sellers offer products online without requiring a large engineering team. Founded by Barada Sahu and Kausambi Manjita in 2020, Mason claims to have more than 1,000 customers and powers over 8,000 brands worldwide. While North America has been one of the strongest markets for the startup, it also serves clients in Singapore, Southeast Asia, Japan and India. “People are stuck with having forced to sell on Amazon. Ideally, as a brand, you want your own presence, but you’re unable to do that because it’s very hard. It almost feels like a technology problem,” Manjita said in an interview with ZebethMedia. Mason’s product dashboard Sahu and Manjita decided to build their offering for online stores while working at Walmart-owned Myntra. While developing a custom engine at the fashion e-commerce company, the duo realized the need for bespoke store engines to run online stores selling various products successfully. That brought Mason to its reality. Manjita is heading Mason’s product and customer experience, while Sahu looks after its revenues and growth. The startup is aimed at small and medium businesses that already sell products online but are looking to upgrade their stores. Although Amazon can help in such cases, Sahu and Manjita say the commission charged by the e-commerce giant restricts entrepreneurs’ earnings. Manson charges 1% of its customers’ total sales to offer its platform. But it is significantly less than the 30% charge Amazon puts on every sale through its platform, Sahu said. By switching to Mason, Manjita said that a store improves average order value by 23% in 30 days and improves its session time by 17% and sell-through by 35% in 60 days. In addition to its flagship commerce engine, Mason offers a Shopify plugin called ModeMagic. It is designed for brands getting started and basically deep diving into the Shopify ecosystem, Sahu said. By offering its standalone platform and Shopify plugin, the startup essentially wants to cater to both types of entrepreneurs and businesses — the ones that are not relying on a particular platform and the others that use Shopify as their backend. Mason has raised a total of $7.5 million in a seed round led by Accel and Ideaspring Capital, with participation from Lightspeed India Partners as well as Mana VC, Gaingels, Core91 and VH Capital. “In order to build a truly scalable outcome, the team is on the journey to create a self-serve platform wherein e-commerce brand owners could use it to create, communicate and grow,” said Subrata Mitra, Partner at Accel, in a prepared statement. Manjita said that Mason will utilize the fresh funding to set up its marketing, sales, customer success and partnerships teams — to bring the product to more and more customers. The startup also plans to create better and more content for entrepreneurs to help them learn about solving challenges in their e-commerce journey. Mason currently has around 40 people in its team, including close to 30 working toward product technology and design operations. A large part of its workforce is based out of Bengaluru, though it has its early go-to-market teams in Toronto and advisors in San Diego and New York. It is also setting up its customer success, early marketing and growth and partnerships teams in North America.

Lightspeed-backed Indian commerce Udaan raises $120 million • ZebethMedia

Indian business-to-business e-commerce startup Udaan has raised $120 million in convertible notes and debt led by existing shareholders and bondholders, a top executive told employees in an email Thursday seen by ZebethMedia, as the company readies being public in 12-18 months. (More to follow)

Amazon resumes donations to some 2020 election deniers, just in time for midterms • ZebethMedia

Amazon has quietly mothballed its pledge to stop supporting politicians who refused to certify the 2020 election. The company, like many, said it would suspend donations to those who participated in “the unacceptable attempt to undermine a legitimate democratic process.” 21 months later, however, it has changed its tune — just in time for midterms. Amazon donated a total of $17,500 last month to nine Representatives who fell under its previous ban, as reported by Judd Legum, who has held the feet of many such companies with adjustable scruples to the fire. A list of those who said they would do one thing, then did another, can be found here; CNN has a more comprehensive, but less up-to-date list of companies and their claims. Among the tech companies (according to Legum’s list) that donated to Elector certification objectors or PACs supporting them after saying they wouldn’t are AT&T (~$600,000), Intel ($98,000), Oracle ($55,000) and Verizon ($183,000). Amazon’s contribution may seem rather small compared to theirs, but of course they’re probably just getting started. The funny thing about this is their explanation, from a statement: … [The suspension] was not intended to be permanent. It’s been more than 21 months since that suspension and, like a number of companies, we’ve resumed giving to some members. As any child could point out to them, it isn’t much of a punishment for them to withhold funds from politicians “indefinitely” only to provide them just in time for the midterms. That’s where the money 21 months ago would have gone anyway. Certainly most of the democracy underminers Amazon previously deplored still receive no money from the company that we know of, and although we must not let the perfect be the enemy of the good, we can’t just let this about-face go totally unquestioned. After all, the ones the company did decide to boost haven’t vocally recanted their positions. Amazon did not explain whether or how it reached out to the 147 Republican lawmakers it temporarily banned. Were the (apparently confidential) answers of these nine Reps the only ones that showed sufficient remorse? One would think the reversal of such a strongly argued position would merit some kind of real explanation. I asked Amazon why these members in particular received clemency but the company did not provide a relevant response, only rephrasing part of its statement that it gives to politicians that “agree” with them. I invited more detailed comment. One can imagine reevaluating these suspensions after a midterm election — after all, that’s the perfect way for any politician to publicly show their support for the democratic process. If, after that, Amazon and others said they were resuming or reevaluating donations, it might invite some grumbling but ultimately it’s a rational approach.

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