Commerce

Wharton’s Mori Taheripour on how to negotiate the right way • ZebethMedia

By zebethcontrolPosted on October 13, 2022Posted in Commerce, Elon Musk, M&A, Media & Entertainment, negotiation, TwitterNo Comments

Mori Taheripour teaches negotiations at the Wharton School at the University of Pennsylvania, where she has taught undergraduates, MBA students and executive MBA students how to have better business conversations. Taheripour has also coached corporate clients, including on behalf of Goldman Sachs and Major League Baseball, about how to feel more confident and comfortable in negotiating, a skill that everyone uses daily but which tends to be seen as a kind of dark art. Amid the backdrop of one of the highest-profile negotiations in recent memory, centered on Elon Musk’s ongoing stop-and-go plans to buy Twitter, and aware that many readers are negotiating on their own behalf right now — for more time, more funding, a better exit package, fewer investor protections — we talked with Taheripour earlier this week to ask where negotiations tend to falter and how to help them succeed. Excerpts from that chat follow edited for length and clarity. TC: You’ve been an expert in dispute resolution and negotiation for more than a decade. You also published a book on the topic during the pandemic that’s been well-received. For people who haven’t yet read it, is the ability to negotiate well somewhat intuitive or entirely learned? It’s something you learn, and I actually think most people are better negotiators than they think they are because we do it so much. It’s only when we see negotiations through the lens of things that are really transactional and maybe conflict ridden that people put negotiations in a category of things people don’t really enjoy or they’re really afraid of or that are really uncomfortable, and they want to put it off. But any parent, anybody who’s in a relationship, anybody who has employees, anybody who has a pet . . . is probably really good at negotiations. What are some of the most common missteps people make when they’re in a business-related negotiation process? At the heart of all negotiations is human connection. That’s where the magic happens. Most negotiations are not transactional. The best negotiations are either fostering relationships that we already have, or creating new ones. And once you look at it that way, then negotiations become a conversation. Some conversations are harder than others. But they shouldn’t be if we open our minds to them with a sense of empathy and wanting to be creative and wanting to not focus on any one solution. Your book is about how to “negotiate fearlessly,” yet there’s a fine line between fearless and overconfident. Any pointers for readers who might be wondering how to straddle that line? A lot of this goes back to negative self talk and self sabotage. You’re not going to be an excellent negotiator just because you’re smarter and have a higher IQ. Being an excellent negotiator really starts with you getting out of your own way. Great negotiators are great storytellers who can see themselves from a place of value and fearlessly self advocate. If you don’t believe in yourself, if you don’t fearlessly understand your own self value, then the goals that you set for yourself are diminished. They become safe. They may even become mediocre. And once your goals are watered down and safe, then what you ask for is going to be reflective of those goals, and you’re not going to get enough. The minute you give up your power – you either back off in order to make the other [party] happy or to avoid conflict – then you can’t stay in the conversation. You have to have the self-confidence that you two are part of this conversation and your space is as important as theirs. It doesn’t mean those two things are mutually exclusive; it means that you seek solutions that are mutually inclusive. For people in an M&A type situation right now, what do you make adages to never take the first offer, to push for 20% more? Are any of these truly relevant? The way I teach is not at all prescriptive. I don’t believe in always, and I don’t believe in never. The older we get, our gut instinct becomes stronger and our intuition and emotional intelligence become stronger. We should be using these to navigate conversations, as opposed to trying to remember what a professor said in class. When you’re boxed in like that, it creates a lot of anxiety, especially because no negotiation is the same, and the person sitting across from you, that audience, is always different. Elon Musk has seemingly been trying to negotiate with Twitter, on Twitter, to either knock down the price or get out of the deal or buy himself some time, who knows. Either way, making the conversation — or part of it — so public is obviously by design and I wonder if this will become a kind of case study for future negotiations. He’s playing by completely different rules. Five or 10 years ago, this would probably be a nightmare for shareholders and companies because you want to hold on to what’s happening until it’s all done and then go public with it. But what’s quite traditional is that he’s controlling his own story and the messaging that comes out is his, no matter how confusing. If you think about it, he has been testing the water for far longer than the six months since he proposed buying Twitter. Every time he says anything about Tesla stock, prices change; people react immediately. So I think he saw the power that he had in literally changing markets [by using Twitter]. Do you think there is a master plan here? Do you see any logic in this chaos? Truth be told, I was incredibly surprised when the deal fell apart — and there was the threat of litigation and things got messy and he tried to step away. I thought that for sure if the deal was to happen [after that], the stock price or deal valuation would be a lot lower at least. When [the

Katana, an ERP for SMB manufacturers, raises $34M • ZebethMedia

By zebethcontrolPosted on October 13, 2022Posted in Commerce, Enterprise, ERP, Katana, manufacturing, StartupsNo Comments

Katana, an enterprise resource planning (ERP) platform for small- and medium-sized manufacturers, has raised €35 million ($34 million) in a Series B round of funding. ERP is a form of business management software that can serve any number of functions inside a company, from marketing and risk management, to supply chain management and beyond. Integrations are pivotal to any ERP software, as it typically involves taking data from different systems such as HR, CRM, accounting, and order management to generate insights and analysis — at its core, ERP is all about identifying potential problems and improving efficiency. Founded out of Tallinn, Estonia, in 2017, Katana is an ERP for the manufacturing sector, with prebuilt integrations for many of the most common tools that a manufacturer might use, including e-commerce platforms (e.g., Shopify and WooCommerce), accounting (e.g., QuickBooks and Xero), shipping, forecasting, CRM, and more. Collectively, these various integrations can help a manufacturer predict what their future inventory needs will be based on historical or real-time sales data, for example, to ensure that they don’t run out of stock or parts. Katana: Inventory overview Image Credits: Katana End of ‘made in China’ era A big driving force behind demand for such software is direct-to-consumer (D2C) manufacturing, which has seen smaller, local manufacturers — or “micro-manufacturers” — remove many of the intermediaries that were traditionally necessary to get their products made. “The rise in D2C manufacturing has driven a small manufacturing renaissance, giving consumers a wealth of options that reduce the hold of brands relying on mass production,” Katana co-founder and CEO Kristjan Vilosius explained o ZebethMedia. “As manufacturing moves closer to the ever-increasingly conscious consumer, brands that rely on local production and inventory are gaining market share. In short, the ‘made in China’ era is ending.” This has been aided by modern technologies such as 3D printing and computer-aided laser cutters, allowing companies to produce goods on a smaller scale away from centralized, mass-production factories. In tandem, the emergence of online marketplaces, e-commerce software, and the broader cloud computing movement has made it easier to assume greater control of the entire business process, from manufacturing through to sales. “Manufacturers already have a tech stack of tools like e-commerce platforms, shipping tools, and accounting software,” Vilosius continued. “What’s missing is a central source-of-truth that streamlines the flow of information and minimizes manual data entry and, as a result, human error.” Legacy ERP software from the likes of Netsuite and SAP are typically geared toward larger businesses, which is why we’ve seen a slew of younger upstarts enter the fray to much VC fanfare in recent years, with Katana and its ilk trying to usher in a more modern toolset purpose-built for SMBs — and in Katana’s case specifically, SMB manufacturers. “Supporting this new wave of manufacturers is critical — enterprise business suites like NetSuite and SAP come with hefty costs and a plethora of features and functionalities that exceed the needs of small- to medium-sized businesses,” Vilosius said. “The ERP space is also known for poor user experience and user interface, and low customer satisfaction. Many small businesses opt for spreadsheets despite being error-prone and difficult to scale as their businesses grow.” Katana had previously raised around $16 million, the bulk of which arrived via its Series A round last year, and in the intervening months the company claims to have quadrupled its annual recurring revenue (ARR), grown its headcount from 30 to 140, and scaled its customer base from “hundreds of micro-businesses to thousands of customers in the SMB segment,” according to Vilosius. On top of that, the company launched an open API for customers to build their own integrations. With another $34 million in the bank, the company said that it’s well-financed to “bring manufacturing software into the digital era,” which will include rolling out “more advanced accounting integrations.”

FlapKap provides revenue-based financing to e-commerce brands in MENA, gets $3.6M seed funding • ZebethMedia

By zebethcontrolPosted on October 12, 2022Posted in Commerce, revenue-based financing, StartupsNo Comments

Recent research suggests that the e-commerce market in Saudi Arabia, UAE and Egypt account for a combined $21.4 billion and is projected to grow by more than 50% to $33.3 billion in the next three years. And as MENA shoppers increase their commerce spending, it is increasingly becoming imperative for online stores to position themselves to take full advantage of the growing phenomenon. FlapKap, using its revenue-based financing platform (RBF), is helping these stores solve the growth-destructive challenges that emerging online stores encounter. The company, which allows e-commerce businesses to scale and grow by targeting businesses with limited bank or venture financing access, is announcing that it has raised $3.6 million in seed funding to supercharge its efforts. Ahmad Coucha and Khaled Nassef founded FlapKap; Sherif Bichara and Adel Hodroj are on the founding team. It was during Coucha’s time at Kijamii, a digital agency upstart he launched in 2014 that conducted projects for Fortune 500 companies, that the CEO noticed late payment and access to working capital issues businesses, including his, faced. For instance, most of Kijamii’s clients always paid late, sometimes 30 to 120 days from when a sale closed. “We always thought to ourselves that this should be the exact opposite. Big clients with massive amounts of cash shouldn’t be the ones that get super flexible payment terms from the agencies; it should be the small and medium enterprises struggling for cash and growth. These should be getting the support,” CEO Coucha told ZebethMedia. In 2021, Coucha spent some time in the U.S. and witnessed the rise of revenue-based financing platforms in the country and the West, including Clearco and Wayflyer. The idea to replicate a similar operation for MENA existed, hence the launch of FlapKap. Yet, while most revenue-based financing companies have prevalent SaaS and e-commerce clientele, FlapKap strictly serves e-commerce platforms. E-commerce operations have flexible payment terms that suit FlapKap’s business as they spend a lot on advertising, marketing and inventory, recurring activities responsible for these brands making late payments or taking loans to remain operational. “SaaS is still growing in its early stage in the Middle East, but it’s not yet sizable. On the other hand, e-commerce is booming in all parts of the world, and is underserved by the current finance infrastructure in Africa,” he added on his company’s preference to pick e-commerce brands. FlapKap’s business model is one where it finances e-commerce platforms’ expenditures and recoups its money when these brands pay back a percentage of their revenues until repayment is complete. In other words, FlapKap adds a fixed fee — split to be paid in percentages from their revenues within a specific timeframe — to whatever amount its clients access on its platform. FlapKap claims to have helped generate more than an 85% increase in revenue and over 70% increase in net profits within a few months for its customers. The revenue-based financing company for e-commerce platforms, which claims to be growing 300% quarter over quarter, also mentioned that it has partnered with tens of clients from Egypt and UAE in six months. Some include Dresscode, Raw African, Palma and Tam’s Shoemaker. FlapKap has also recently integrated its AI-based insights and financial data analytics with Shopify, WooCommerce, Facebook and Google, and expects to strike more partnerships, it said in a statement. “Aside from the financing solutions we offer our partners, we also give them other value-added services to help them go further. So we always like to position ourselves as a growth partner; we’re not just financing,” said the chief executive. “We want to drive growth. We have a model work in progress built for identifying the clients’ growth potential; it’s a model we are currently building and getting enhanced daily by the data we’re collecting.” This latest capital injection comes six months after FlapKap’s pre-seed raise and the investors on board are strategic for FlapKap. QED, for instance, has invested in some of FlapKap’s global counterparts, such as Wayflyer and Fairplay. The fintech-focused venture capital firm used Bolt, its arm for investments in the Middle East, to complete the transaction. There’s also Egyptian government-backed Nclude, legacy Pan-African investor A15 and Outliers. “I’m excited to be building FlapKap along with them,” said Coucha. “I think they are not just investors; they are real partners in what they’re doing for us now and expected to do in the future as well,” said Coucha. With the new funding, FlapKap plans to increase its capacity to help more e-commerce businesses in the MENA region scale and maximize their growth potential, as well as consolidate its position as the region’s leading revenue-based financing player. The company aims to solidify its presence in Saudi Arabia, the UAE and Egypt by offering e-commerce businesses the ability to scale their inventory and digital ads now, while flexibly paying later. Gbenga Ajayi, a partner at QED, commented on the investment: “Having invested and worked with similar companies to FlapKap across other regions such as Europe and Latin America, we are confident this team can attain similar success.”

Social commerce startup Elenas secures $20M to help more LatAm women sell online • ZebethMedia

By zebethcontrolPosted on October 11, 2022Posted in Commerce, Dila Capital, Elenas, social commerce, Startups, Zach OschinNo Comments

Elenas estimates that 11 million women in Latin America sell consumer items via catalogs and door-to-door sales methods. It is digitizing that process so they can more easily sell from home. Founder and CEO Zach Oschin started the Colombia-based social commerce company in 2018 (and participated in our Latin American Startup Battlefield that year) to move the traditional independent sales process online. Here’s how it works: Entrepreneurs can browse a portfolio of hundreds of thousands of wholesale products in areas like beauty, personal care, home goods and electronics, decide what they want to sell, how much they want to mark up the price and then promote the products on social channels like WhatsApp and Facebook. Elenas also takes care of the product sourcing, delivery and payment collection. In the past year, more than 100,000 women in Colombia and Mexico have sold over 2 million orders and earned millions of dollars on the platform. To accelerate that trajectory, Elenas raised $2 million in seed funding in 2020 and another $6 million in Series A capital in 2021. Now the company is back with an even bigger Series B round of $20 million. This gives the company more than $28 million in total funding to date. While Oschin didn’t go into detail on Elenas’ valuation, he did say it was an increase from the previous round. He also said the company grew revenue over 5x between the rounds. DILA Capital leads this new investment and is joined by FJ Labs, Endeavor Catalyst, the Inter-American Development Bank’s IDB Lab, Broadhaven Ventures, Mercado Libre, Grupo Bolivar and Leo Capital. “Elenas is revolutionizing the direct-sales industry by giving millions of people across the region the opportunity to sell thousands of products through their digital catalog,” said Alejandro Diez Barroso, managing partner at DILA Capital, in a written statement. “We are convinced that we are backing the right team in the right market and at the right time.” Being a country with three times the population of Colombia, Mexico is poised to be the company’s largest market in the next year, and it has already “achieved a profitable and sustainable growth model” there, Oschin said. Since launching there in 2021, Elenas was able to scale up 30%, which means Mexico accounts for more than a third of its business in just one year, which he said took two-and-a-half years to achieve in Colombia. This is while other e-commerce companies haven’t fared as well, Oschin said. For example, he notes that by starting with lower ticket items like with grocery delivery, some companies were not able to reach the right margin profile or build out infrastructure to the level needed to reach profitability. “There was a massive boom of social commerce companies heavily funded in 2021, but that also meant the rise of social commerce models that were highly unprofitable,” Oschin added. “Some achieve unicorn status, and we are now seeing some of those models pulling back, shut down or laying off staff.” He went on to explain that Elenas bucked this trend by focusing on nonperishable items, like lifestyle products, home goods, fashion and accessories, from the beginning, which yielded more healthy profit margins and higher ticket prices. Not having to build its own infrastructure was another way. That model enabled the company to scale across Colombia and Mexico and deliver to 600 towns, including rural areas where that had not been previously accomplished. In addition to growing revenue 5x between the Series A and Series B rounds, the company more than doubled its employee headcount to 230 people. Up next, Elenas will continue to expand its seller network in both markets with focus on scaling it up significantly over the next year so that it can invest in better products and experiences for both sellers and providers. It will also infuse some capital into engineering and product to build out additional core features, for example, seller business management tools like customer relationship management, product recommendations and financial services. “We want to expand into financial services that power their businesses,” Oschin said. “Fifty percent of our sellers have never had a bank account before, so this is an underbanked population, and when running a business, having financial services is important. Our partnership with Grupo Bolivar will be working on that.”

Construction equipment marketplace raises a $17.5M Series A led by Beringea • ZebethMedia

By zebethcontrolPosted on October 11, 2022Posted in Commerce, construction, Hardware, StartupsNo Comments

Back in 2020 I covered how the UK startup Yardlink – which allows construction companies to obtain critical equipment faster than normal equipment rental companies – had raised it’s Seed round. It was basically bringing a digital-first, marketplace approach to an industry normal hide-bound by a slow, centralized hire market. Two years later, and Yardlink is back with a $17.5m Series A funding round led by Beringea, with participation from Amplifier, and existing investors Speedinvest and FJ Labs. From its rental roots, the company has now matured into a full-service supply chain management platform, meaning contractors get access to suppliers of tools, equipment, bulk materials, fuel, waste management and other services and materials. All can be sourced, booked, and paid for via the platform. As YardLink CEO, Neeral Shah said in a statement: “Construction is one of the least digitized industries with over 95% of supply chain transactions still being conducted over the phone, email and pen and paper… YardLink connects construction customers with their supply chain on a single digital platform.” Commenting, Maria Wagner, Partner at Beringea added: “YardLink has the potential to establish itself as the go-to marketplace for construction supplies.” Over email, the company also told me that the locality of its supply chain is helping to minimize the carbon footprint of construction projects. Shah provided trade financing for construction procurement for years, but spotted a gap in the market and launched YardLink in 2018. It now claims to have 3000+ customers.

Trendsi secures $25M to help sellers and manufacturers predict demand • ZebethMedia

By zebethcontrolPosted on October 10, 2022Posted in artificial intelligence, Commerce, eCommerce, lightspeed venture partners, startup, Startups, TrendsiNo Comments

In the traditional business-to-business world, sellers often don’t know how much of a product they should order. Even at well-run companies, anywhere from 20% to 30% of inventory is either dead (i.e. doesn’t sell) or obsolete, according to one source. The impact on profitability can be quite severe. Dead stock costs sellers and manufacturers as much as 11% of their revenue, reports Katana, which develops raw material and bills of material tracking software. Seeking to give sellers greater visibility over product demand, so they can make more informed decisions, Ella Zhang co-founded Trendsi, which connects sellers with suppliers while managing the back-end supply chain for its customer base. After gaining traction during the pandemic as many retail businesses made the risk-reducing pivot to selling goods directly to retail, rather than buying inventory, Trendsi has closed a $25 million Series A round that brings its total capital raised to $30 million. Lightspeed Venture Partners led the tranche, with participation from Basis Set Ventures, Footwork VC, Peterson Ventures, Sierra Ventures, Liquid 2 Ventures and individual investors, including Zoom CEO Eric Yuan and Zola CEO Shan-Lyn Ma. Zhang tells ZebethMedia that the new cash will be put toward investments in data infrastructure, supply chain technology, new merchandise categories and international expansion. “We are building a new platform that lowers the barrier for anyone to start selling online or offline,” Zhang told ZebethMedia in an email interview. “With Trendsi … influencers, creators, and more can sell via social networks without worrying about sourcing products, managing warehouse, packaging and shipping, etc., so that they can focus on what they love: their brand and customers.” Image Credits: Trendsi Zhang came from the venture world, serving as an investment director at Kleiner Perkins after stints at Google, Tencent and Binance (where she founded the startup’s investment arm, Binance Labs). Zhang met Trendsi’s second co-founder, Sherwin Xia, while a postgrad at Stanford, where the two participated in the Stanford Startup Garage incubator. Xia was one of the first employees at e-scooter startup Lime and previously worked as an analyst at a16z (Andreessen Horowitz). Zhang, Xia and Trendsi’s third co-founder, Maddie Davidson, sought with Trendsi to build a service that applies AI and machine learning to streamline tasks like inventory and sales forecasting. Using data collected on the platform and from third parties, Trendsi attempts to predict sales down to the SKU level, so that sellers can reduce excess inventory and ideally prevent out-of-stock issues. Beyond this, the platform taps sales and behavioral data to curate and recommend products to sellers. Recently, Trendsi launched a feature it calls “just-in-time” manufacturing, which aims to help manufacturers quickly restock based on real-time sales data and predictions. “[This] allows retailers to only take minimum and no inventory risk by building our inventory and sales forecasting models and offering the drop-shipping service,” Zhang explained. “The original upfront risk of buying inventory is now shared among retailers, Trendsi platform and the manufacturers.” Despite competition from inventory optimization startups like Flieber, Syrup Tech and Black Crow AI, business has been robust over the two years since Trendsi’s founding, Zhang claims, with new user growth up 10x year-over-year. (She declined to give a figure.) Over the next year, the company plans to expand its work with sellers and manufacturers in industries where it sees strong upward momentum, specifically home decor, accessories and makeup. “For both our suppliers and retailers, especially in fast fashion, overstock means locked-in capital, wastage of storage space, increased inventory holding costs and unnecessary losses,” Zhang said. “This pandemic has revealed the real costs associated with inventory mismanagement. So Trendsi actually gained traction.” San Francisco-based Trendsi currently has 105 full-time employees and expects to hire 15 more by the end of the year. Not all retailers are climbing aboard the AI train. Nearly half of respondents to a KPMG survey cited cybersecurity breaches and possible bias as their top concerns about the technology, while 75% said they believe AI is more “of hype than reality.” But broadly speaking, AI in retail is a burgeoning category, with the vast majority of retailers participating in the survey saying their employees are prepared — and have the skills — for AI adoption. Retail business leaders expect AI will have the biggest impact in customer intelligence, inventory management and chatbots for customer service, creating a virtuous adoption-investment cycle in the coming years.