January 13, 2017

More fund-raising news: Aeropost, Kitchen22 close financing deals

It’s venture capital week in South Florida.

In addition to previously reported rounds raised by cross-border e-commerce startup iguama of Miami, human resources software startup Candidate.Guru of Boca Raton, Miami tech startup Tesser Health and ed-tech startup ClassWallet of Miami (scroll down to read about them), two more companies received funding, according to CB Insights’ daily report.

Aeropost International Services, a Miami-based company in the mail and package forwarding business, closed a $4 million financing round from North Bridge Venture Partners. Its Miami hub in conjunction with partners throughout Latin America and the Caribbean allows the company to provide end-to-end service for the members of its network to receive their packages, internet purchases, mail and logistics services, CB Insights’ report said.

Food business Kitchen22, founded by foodies and also of Miami, raised $800,000 from undisclosed investors. Kitchen22 wants to revitalize the consumer's experience by creating premium and innovative food products, while staying true to pure and simple ingredients.

READ MORE: U.S. venture capital dipped in 2017 but took a Magic Leap in Florida

Who's been funded? Find an archive of South Florida venture capital-related stories under the Funding category of Starting Gate.

January 12, 2017

Miami e-commerce startup iguama scores $5 million in funding

IguamaBy Nancy Dahlberg / ndahlberg@miamiheraldcom

Miami startup iguama plans to open up its online shopping mall for U.S. brands to more consumers across Latin America, with the help of a $5 million Series A financing round led by technology venture capital firms Kibo Ventures and PeopleFund.

The company provides consumers in Latin America access to U.S. retail brands typically not available in local malls. Founded in 2014, iguama is the first cross-border e-commerce shopping club where members receive competitive pricing and exclusive deals, promotions on purchases from merchants such as Nordstrom, BCBG, Target, Overstock, Juicy Couture and others. All local customs, taxes and shipping are handled by iguama, removing international barriers from customers and providing a seamless shopping experience.

“iguama’s cross-border e-commerce technology provides tremendous value to millions of Latin American shoppers looking to access the best U.S. merchants and get delivery of their purchases to their door,” said Aquilino Peña, co-founder and managing partner of Kibo Ventures, a venture capital firm in Spain that has made nearly 40 investments.

DiegofernandezWith the new funding, iguama plans to expand throughout Latin America – and beyond, said Diego Fernandez (pictured here0, co-founder and CEO of iguama, who had been owned a freight forwarding franchise before founding iguama. The company currently services Chile, Colombia, Costa Rica, El Salvador, Guatemala and Panama, with several more countries including Mexico on the runway. iguama’s 35 employees are split between Guatemala, New York, China and Miami, where its logistics partners are based. Next week, iguama will be releasing a new version of its mobile site with a shopping assistant.

“A lot of Latinos like to go to Miami to buy their clothes. But [through iguama], people who don’t have access to travel can have access to the U.S. products, in a convenient way,” said Fernandez, a native of Guatemala. “Our goal is to personalize the shopping experience so customers will have the brands that they like. We are committed to expand our cross-border e-commerce platform to the rest of Latin America and eventually Europe as well.”

Cross-border e-commerce in Latin America is still an underserved market, and iguama has assembled a unique and experienced team in technology, e-commerce and cross-border logistics to become an important player, said Matias de Tezanos, co-founder and CEO of the Miami-based PeopleFund, an early backer of iguama.

iguama recently announced that Weihua Yan, co-founder and former CTO of diapers.com, has joined the company as Chief Technology Officer. Last year, Michael DeSimone, former CEO of cross-border logistics company Borderfree, joined the board of directors.

Follow @ndahlberg on Twitter.

January 11, 2017

Candidate.Guru of Boca attracts $950K from Florida angels to support its growth

Candidate.Guru, a Boca Raton-based human resources software startup, has raised $950,000 in funding from Florida angel organizations to support its growth.

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By Nancy Dahlberg / ndahlberg@miamiherald.com

The company, winner of the Miami Herald Business Plan Challenge in 2016, uses its proprietary technology platform to predicts whether a job candidate is a culture fit for an employer. Florida Funders, The FAN FundMiami Innovation Fund and individual angels participated in the fund-raising round.

“We are impressed by technology-focused companies that provide unique solutions to current problems,” said Marc Blumenthal, CEO of the Tampa-based Florida Funders, which features an online investing platform. “Candidate.Guru is a great example of this, and we’re excited to be a part of the company’s growth in Florida and beyond.”

The funds will allow the company to focus on its sales and demand pipeline, and address sales requests in a timely manner. The funding also will help integrate Candidate.Guru with programs that companies already use during the hiring process.

CEO Chris Daniels (pictured above, at left, with co-founder Steve Carter), a former executive recruiter, founded Candidate.Guru in 2014 with the goal to create an easy-to-use hiring solution, enable greater productivity for HR professionals and reduce time spent in the hiring process. The revenue-generating company, now with seven employees, previously raised $475,000 in angel funding.

In addition to winning the Business Plan Challenge last May, Candidate.Guru won first place and $100,000 in funding in the Florida Venture Forum Early Stage Capital Conference's startup business competition. Candidate.Guru was selected in 2015 for Florida Atlantic University's Tech Runway startup accelerator program in Boca Raton.

READ MORE: Candidate.Guru’s big-data solution solves HR quandary: Will the new hire fit in?

U.S. venture capital dipped in 2016, but took a Magic Leap in Florida

Money

By Nancy Dahlberg / ndahlberg@Miamiherald.com

While venture capital investment cooled nationwide last year, investment in companies in the Sunshine State heated up, producing the best result since 2001.

Venture capitalists injected $1.12 billion into 71 deals in Florida in 2016, but most of that total went to Plantation-based “mixed reality” technology company Magic Leap, which raised $793.5 million in the first quarter, according to the MoneyTree Report from PricewaterhouseCoopers and CB Insights, which was released on Wednesday.

Florida’s total would  be the lowest total since 2011 without the mega-deal by Magic Leap. But with it, Florida companies raised 29 percent more venture capital than in 2015, according to the report, a 15-year high. Even so, Florida's venture capital take is less than 1 percent of the U.S. venture capital pie.

In the fourth quarter alone, $98.7 million flowed into the state, and South Florida companies received two-thirds of the state’s total. Companies that received funding included: CareCloud of Miami, $31.5 million, Boatsetter of Aventura, $13 million, Batanga Media of Coral Gables, $9 million and $6 million; Carevive of Miami, $4.25 million; and ClassWallet of Miami, $1.1 million, according to MoneyTree.

JetSmarter, which reportedly raised $105 million in the fourth quarter, was not included in the MoneyTree report, possibly because the investment round has not closed.

Magic Leap and JetSmarter were the two largest raises from South Florida for the year, followed by Finova Financial’s $52.5 million, Woundtech’s $40 million and CareCloud’s $31.5 million.

Nationally, investment in VC-backed companies ended the year on a weak note, as quarterly deals and dollars fell for the second-consecutive quarter, according to the MoneyTree Report. The U.S. full-year funding total of $58.6 billion represented a 20 percent drop from 2015, while the number of deals, 4,520, fell 16 percent, compared to the previous year. Globally, the trend was similar, with global deals and dollars declining 10 percent and 23 percent, respectively, in 2016, compared to full-year 2015.

Bolstered by the $1.2 billion raised by OneWeb, investors deployed $11.7 billion to U.S.-based VC-backed startup companies across 982 deals in the fourth quarter of 2016. That was down 17 percent in dollars and 14 percent in deals from the third quarter. Both quarterly figures were also down from the fourth quarter of 2015 and set the quarterly lows for 2016, which had already seen startup investment recede from the peaks of 2015. Deal activity, having fallen off consistently throughout the year, has now reached a multi-year low with the quarterly count failing to crack 1,000 deals for the first time since the fourth quarter of 2011.

“For those who predicted 2016 would be the popping of the venture bubble, it was not,” said Anand Sanwal, co-founder and CEO of CB Insights. “Yes, it was a tougher year in terms of deal activity and funding, but versus 2014, which we can call a more normal period, 2016 compares quite favorably. In 2017, unicorns and mega-rounds could see some of the same headwinds as in 2016, but interestingly, the introduction of new big money investors from the likes of Asia and increasingly the Middle East may serve to offset that. An expected healthy IPO and M&A market should also serve to help the VC market as well.”

All three of the major technology and startup hubs of Silicon Valley, New England (including Massachusetts), and New York Metro saw deal activity declining from the quarter prior. Silicon Valley-based companies saw the sharpest drop-off, with $3.9 billion invested across 310 deals, down 37 percent in dollars and 22 percent in deals from the third quarter of 2016.

MoneyTree Report results are available at www.pwcmoneytree.com. MoneyTree changed data providers and now uses CB Insights, a venture capital data analytics company, so some past data has been revised. CB Insights research can be found online here.

 

January 10, 2017

New ClassWallet investment follows $1.1 million raised in Q4

RosenbergBy Nancy Dahlberg / ndahlberg@miamiherald.com

ClassWallet, a Miami-based company that streamlines the tracking of education funds, has closed a new minority investment from Brentwood Associates.

For Brentwood, a private equity investment firm, ClassWallet represents its fifth education-related investment.  Several existing ClassWallet investors also participated in the funding round.
 
Founded by Jamie Rosenberg, ClassWallet is a platform for school systems to disburse and track funds. The company also is gaining traction with university athletic departments for per diem expense management, as well as with states for education savings account management, an integral component to school choice, Rosenberg said.  ClassWallet is used in over 850 schools and in some of the largest school districts in the United States, including Los Angeles Unified. 

The amount of the investment wasn’t disclosed, but Rosenberg said it was not part of the $1.1 million financing round ClassWallet raised in the fourth quarter of 2016 that brought the company’s total funding to more than $5.1 million. ClassWallet plans to use the new funds for sales and marketing. “We are getting great traction and have a scalable sales process in place, so it will be for accelerating growth,” Rosenberg said.

ClassWallet plans to release the latest version of its platform this month, which will allow schools to accept cash payments from parents without taking cash into the school building or classroom.  Several districts are already working with ClassWallet to implement the solution. “Brentwood brings a variety of value-add capabilities, including digital marketing and salesforce expertise, which will allow us to invest in new customer acquisition efforts and expand our distribution,” he said.
 
Brentwood Partner Eric Reiter added: “ClassWallet aligns well with our strategy of targeting growing companies with a differentiated product offering and high levels of customer loyalty and satisfaction.  ClassWallet’s patent-pending technology is highly innovative and satisfies a real need in a large addressable market.” 

 

Six South Florida companies to present at Florida Venture Capital Conference

The Florida Venture Forum, Florida’s largest statewide support organization for investors and entrepreneurs, announced  its lineup of 20 high quality companies that will present and exhibit at the 2017 Florida Venture Capital Conference, to be held Feb. 2-3 at the Waldorf Astoria in Orlando.

Six South Florida companies are among the presenters. They are:

Breezer Holdings, LLC, (www.powerbreezer.com), Deerfield Beach, their products combine custom fan technology with a highly efficient water atomizing system that delivers the cooling effect of misting (at distances up to 100 feet) without getting people or machinery wet.

Citizen, (www.citizen.co), Miami, provides its customers with a frictionless, convenient experience in filling-out and submitting U.S. government forms.

Everyware, (www.everyware.com), Boca Raton, is a consumer relationship platform targeted to businesses who are underserved by technology. Ease of adoption, low cost and a virtual marketing assistant give the business owners capabilities in marketing, CRM and mobile engagement.

iraLogix, (www.iralogix.com), Miami, provides the only institutionally priced, fully managed, paperless IRA technology platform, including advice and education.

MyTaskit, (www.mytaskit.com), Hobe Sound, is a comprehensive software solution for coordinating and managing tasks within companies and between multiple businesses and their customers.

VortexLegal, (www.vortexlegal.com), Ft. Lauderdale, disrupts the “agency” business model and connects law firms and corporate legal departments with all legal vendors resulting in savings of 10-20% on all services by using our technology platform to “go direct” to each vendor.

 "Our investor-only selection committee has done an outstanding job of selecting 20 companies that will make the Conference one of the best in the event’s 26-year history,” said Travis Milks, Chairman of the Selection Committee of the 2017 Florida Venture Capital Conference and a partner with Stonehenge Growth Equity Partners in Tampa.

The diverse group of presenters includes companies focused on multiple industries and technologies selected from over 100 applicants by a committee of active equity investors. The other presenters are:

 Captozyme Inc., (www.captozyme.com), Gainesville, develops and manufactures highly effective enzymes in superior manufacturing processes allowing for consumer food products and therapeutics with exceedingly high margin.

Fattmerchant, (www.fattmerchant.com), Orlando, is a subscription-based merchant services provider and payment technology company revolutionizing the industry by providing a transparent, wholesale model where merchants pay direct cost of credit card processing with no markups, no ancillary fees, and no contract, for a flat monthly membership.

Fortress Information Security, (www.fortressis.com), Orlando, is the leading third party risk management (TPRM) security technology and services provider for organizations that have large, complex vendor and supply chain networks.

ProAct Health Solutions, (www.proacthealthsolutions.com), Celebration, is a Florida based provider of a nationally scalable, technology enabled, turnkey solution for obstructive sleep apnea.

Vestagen Protective Technologies, (www.vestagen.com), Orlando, develops and markets advanced performance textile products and technologies.

Catalyst OrthoScience LLC, (www.catalystortho.com), Naples, is a medical device company that is commercializing a novel design for a total shoulder replacement system known as the Catalyst Shoulder Replacement System (the “CSR”).

Happy Grasshopper, (www.happygrasshopper.com ), Safety Harbor, their service combines the strengths of marketing automation and professional copywriting to help salespeople acquire more opportunity and close more business.

Mize, (www.m-ize.com), Tampa, enables durable goods manufacturers to maximize customer lifetime value by helping them to retain the customers and grow the revenues and profits from the loyal customer base.

PikMyKid, (www.pikymykid.com), Tampa, is the first and only communication portal to simplify student dismissal process in K-12 schools, increasing teacher efficiency & student security while reducing traffic around schools. PikMyKid was the winner of the 2016 Florida Early Stage Capital Conference.

That’s Us Technologies, (www.lotvantage.com), Tampa, is a digital marketing company for dealerships. The company is acquiring a tablet-based, end-to-end sales process for dealerships and eventually, technology to complete the online purchase process for the dealer and to remove the hassle for the consumer.

NanoLumens, (www.nanolumens.com), Norcross, Georgia, designs, builds and sells display solutions to hundreds of the world’s largest retailers, airports, corporations, transit stations, hospitals, casinos, universities and sports teams.  With a large intellectual property portfolio and a proprietary building block called a "Nixel", NanoLumens is proud to include hundreds of the largest and best brands as their clients. 

 RSVP Loans, LLC, (www.rsvploans.com), Hurst, Texas, is an online provider of personal loans to nonprime consumers. Their proprietary technology platform automates the entire loan process from marketing offer through loan origination and servicing, resulting in superior cost position and scalability.

Exhibiting Companies:

BioTools, Inc. (www.btools.com), Jupiter, is a Life Sciences tools company. It is recognized worldwide as the innovator that commercialized two of the most advanced techniques for critical structure characterization of molecules. They specialize in two types of pharmaceuticals – chiral and biologics - both kinds comprising blockbuster examples which include drugs such as Plavix, Lipitor and Humira.

Society Plus, (www.societyplus.com), Melbourne, is a vertically-integrated brand selling plus size clothing directly to millennial women through its website (B2C) and to wholesale customers (B2B)

For more information about the Florida Venture Forum or the upcoming Florida Venture Capital Conference. www.flventure.org.

 

 

January 06, 2017

Tesser Health raises $470K in funding to lower prescription drug costs

Tesserhealth

Part of the Tesser Health team at eMerge Americas: From left: Riyaad Seecharan, Ali Khoshnevis, Gregory Johnson (former intern), Patrick Helmus and Humberto Lee.
 

By Nancy Dahlberg / ndahlberg@miamiherald.com

Tesser Health, a pharmaceutical savings startup based in Miami, has raised $470,000 in seed funding from a Cofounders Capital syndicate.

The company explained its mission and technology this way: Tesser Health's cross-platform application has helped hundreds of thousands of Americans save money on prescription medications by using behavioral science to drive optimal health decisions. The company analyzes claims and can find inefficiencies in consumer purchasing habits typically accounting for over 24 percent in excessive spending. Employers can layer the Tesser platform to their existing Pharmacy Benefit Manager systems, and the company currently works with health systems including Advanced Plan for Health, Wellnext, SpendWell Health and Save On Medical. The startup  provides users insight on exactly how much drugs cost, and then in real-time displays up to eight different ways to save on their medications.

“This is about helping everyday folks manage the rising cost of prescription drugs,” said Dr. Ali Khoshnevis, co-founder and managing director of business development at Tesser Health, in a statement. “What sets our solution apart is the ability to show users how to save on their medications and to communicate these opportunities to their prescribing physicians. This makes Tesser Health the only end-to-end platform to reduce prescription drug spending.”  

The eye doctor said he co-founded the company after he discovered a patient not taking his prescribed medications because of the costs. With some research, Khoshnevis discovered that the price for the same drug ranged from $11 to $150, and a variety of evidence-based alternatives existed. 

Tesser Health, founded in 2014, currently has nine people on its team and plans to use the funding for expanding its sales team, said Riyaad Seecharan, co-founder and managing director in charge of operations. Tesser Health is based at CIC Miami. "Their work sits at the intersection of where the Miami ecosystem should be delivering more - the cross between healthcare, technology, and responsible community benefits - and we hold them up as an example for what can happen when life sciences dovetails with entrepreneurial and human-centered solution design," said Natalia Martinez-Kalinina, CIC Miami's general manager. 
 
“We evaluated a number of companies with claims engines used to find employee drug cost savings, but none were as comprehensive or as actionable as the Tesser solution,” said  David Gardner, general partner at Cofounders Capital, in a statement. “We feel confident that this technology paired with this healthcare-experienced management team will be the best value available today for self-insured employers wanting to reduce the cost of their employee benefits”.

 

December 30, 2016

Why mobile payment tech is leap-frogging in Latin America

YELLOW PEPPER SPOTLIGHT b e

YellowPepper, a Miami-based tech company, is undergoing a growth spurt, recently deploying its mobile payments technology in Colombia, Ecuador and Mexico and looking to expand to other Latin American countries. To further power that growth, Volta Global, run by emerging markets specialist Marko Dimitrijević (pictured above at right), recently became an investor in YellowPepper, run by Serge Elkiner (pictured above, left).

 

BY NANCY DAHLBERG / ndahlberg@maimiherald.com

The world of mobile payments is one of the hottest segments of the financial technology industry. Based in Miami, YellowPepper has been a pioneer of mobile payment technology in Latin America, where an immense market need and a millennial-rich population of early adopters converge.

YellowPepper has done this before. Years ago, the YellowPepper team targeted the untapped Latin American mobile banking market and developed a state-of-the-art platform to enhance the overall consumer experience. While continuing to grow the mobile banking side of the business, YellowPepper is now focused on another untapped opportunity: mobile payment solutions for consumers in the region. The company, founded in 2004 in Boston, provides financial institutions with the latest technology that alters the way in which consumers and retailers transact.

YellowPepper is undergoing a growth spurt, recently deploying its mobile payments technology in Colombia, Ecuador and Mexico and looking to expand to other Latin American countries. To further power that growth, Volta Global, run by emerging markets specialist Marko Dimitrijević, recently became an investor in YellowPepper. The terms of the investment weren’t disclosed, but Miami-based YellowPepper has raised more than $40 million in venture capital to date, making it one of the highest funded early-stage fintech companies in Miami.

With such a large market opportunity, mobile payments continues to attract attention in the venture capital community. The global mobile wallet market is expected to reach $635 billion by 2020 from $113.5 billion in 2015, increasing 41 percent annually between 2015 and 2020, according to Research and Markets. The turning point, many experts cite, is the growing availability and use of mobile phones. With the mobile and financial expertise of CEO and co-founder Serge Elkiner coupled with the emerging markets and investment experience of Volta, YellowPepper is poised to exceed its expansion goals in the coming months, the company said.

On the heels of YellowPepper’s success in the Latin American mobile banking space, the Belgian-born Elkiner moved the headquarters to Miami, where offices of U.S. and Latin American financial institutions are based and a growing number of fintech companies have set up operations. YellowPepper, now with a team of 68, currently partners with top financial groups and institutions, including FIS and MasterCard, in the region and is poised to launch in Peru and the Dominican Republic shortly. After years of heavily investing in research and development, YellowPepper turned profitable last year.

The tech company is hiring, too. It is looking to add up to a dozen engineers to its Miami headquarters, located in art-adorned offices in Wynwood. YellowPepper now has about 16 employees in Miami.

Dimitrijević, who has been investing in emerging markets for more than 25 years, has recently focused on frontier markets, or smaller emerging markets beginning to take off, and recently authored a book, “FRONTIER INVESTOR: How to Prosper in the Next Emerging Markets.” Prior to founding Volta, the Stanford MBA graduate ran hedge fund company Everest Capital, which managed more than $3 billion in assets at its height, but a single bad bet in January 2015 wiped out one of its funds after the Swiss National Bank unexpectedly removed the franc’s exchange-rate cap against the euro, sending the currency surging, media reports said. He returned investors’ capital, later started Volta and now invests with his own funds, making strategic investments. I set up Volta Global as a private investment group and we do both public and private investments, and that’s how we got to meet YellowPepper,” Dimitrijević said.

To get the view from both sides of the table, the Miami Herald met with Elkiner and Dimitrijević before the holidays and asked about YellowPepper’s growth, recent developments and the future, as well as about frontier investing and why YellowPepper falls into Dimitrijević’s investment wheelhouse. Here are excerpts from that conversation.

Q. I know you are actively hiring in Miami. How will you use the new funding, Serge?

A. To support our growth. We’ve been able to grow internally in markets where we were growing very fast, Colombia, Ecuador and Mexico, and we are launching our mobile payments in the Dominican Republic and Peru. We already had a strong presence in Peru in mobile banking for the past 10 years. We are also in Bolivia with mobile banking.

Yepex is our mobile payments platform and we develop separate white label products with financial institutions from the platform.

For our mobile payments solution, we have more than 100,000 users in Colombia and it is growing every day, Today it is our biggest market.

In Colombia, Ecuador and Mexico, 220,000 merchants are currently enabled with our mobile payments technology. In the next four to six months, there will be 365,000 merchants coming on board.

Q. Marko, you have a new book on investing in frontier markets and mobile payments is one of the themes of investments that is growing in Latin America. Why do you believe in mobile payments?

A. We’ve seen the story before. We have been early investors before in several frontier markets and we saw a leap-frogging in some of those countries. For example, in some countries only a fortunate few had a fixed-line phone and basically [the countries] skipped directly to mobile and everyone has a mobile five years later. We see that in payments in countries like Kenya, where very few people had a bank account but went directly to apps and mobile and we think the same story is happening in Latin America, particularly in Ecuador and Colombia, which are frontier countries. And we believe YellowPepper is really at the forefront in Central and Latin America and that is really exciting.

Q. What is a frontier market?

A. Frontier markets are smaller emerging markets. Think emerging markets of the future. Twenty years ago few people focused on India, few people focused on Russia and even fewer focused on China — they were all novelties. Few people today focus on Ecuador or Colombia or the DR or Vietnam or Bangladesh, but those will be the markets of the future. You catch them at their inflection points, right before the hockey stick starts to turn up. That is what is so exciting about those markets.

In Latin America, that is everything but Brazil, Mexico and Chile — it’s a very, very large market.

The frontier markets — that’s where the growth is in the world. In the large emerging markets, Russia, Brazil, China, all are slowing or have slowed over the past five to 10 years. If you look at the top 75 fastest-growing economies in the world, 71 are in the frontier markets. They are starting at a much lower base and are going to be growing much faster over the next 10 to 20 years.

Q. Marko, what attracted you to YellowPepper?

A. The people, and obviously they have been at it for a number of years. They have built a cohesive and attractive team and created something we think is a very powerful mousetrap and building it in our backyard. It’s exciting for Miami to have a company of this caliber here.

The potential growth for YellowPepper is much higher than a company doing a similar thing in the U.S. or a more developed emerging market.

Most people don’t realize how attractive the frontier markets are because they are all individually small. But when you take them all together as a group they are larger than the U.S. or China. That’s why it is remarkable when companies like YellowPepper get on our radar screen because they have taken advantage of this very powerful force and the fact that the demographics go in favor of those markets. YellowPepper focuses on the most attractive segment, 15- to 34-year-olds, the early adopters, and those are massively located in frontier markets.

Q. What’s next for YellowPepper, Serge?

A. One thing is consolidating the markets where we are right now. By the end of the second quarter [2017] in Colombia you will be able to make mobile payments in 100 percent of the shops that take credit card or debit cards. That’s 250,000 merchants, and 100 percent of that is based on our technology.

And expansion. In the last 18 months, we have built the second generation of our platform. It’s an inhouse platform that connects to international platforms, like Mastercard, Visa, American Express and other institutions in those countries. We are also integrating with Facebook messenger for our clients. Given that we are connected to these global platforms, the technology we built is fully deployable globally. This changes the story for us.

Right now we can pitch a bank in Vietnam, for instance. … What we learned and have done in Latin America is totally applicable to other markets that are similar, such as Southeast Asia. We could in the future do a distribution deal to push our technology outside of Latin America and this was not possible 18 months ago. Now it’s completely viable.

And we are one of the very few players in emerging markets with a very deep understanding of emerging market dynamics.

The potential is huge. But Latin America is still virgin territory for us. … We’ve built the highway and any cars that want to use it are welcome to come and pay the toll and use it. It cost us a fortune to build it, but now the value is there.

Q. And what is your biggest challenge?

A. People still don’t understand that it is more secure to do things with your mobile phones. There is a lot of work still ahead of us in the markets we have been strong.

Tokenization of the transaction means the credit card or account number of the debit card is no longer part of the transaction. What goes through is a one-time generated number used for that transaction. If someone steals your token, they can’t do anything with it. There is a lot of security around that and so far we have had no problems.  

Q. Who are your users?

A. In Colombia, I can tell you there are almost twice as many millennials using our product … than the traditional credit card and debit card. … We have 63 percent in the 18-35 segment. Another statistic that is very interesting: 65 percent of our users have used [our product] twice already meaning they are becoming repeat users. The challenge is breaking that barrier with the consumer so they use it the first time, but the first time they use it, they are likely repeat users.

SERGE ELKINER

Title: CEO and co-founder of YellowPepper, a Miami-based company that provides mobile banking and payment solutions across Latin America.

Previous: Vice president of business development at HelloTech Technologies, an Israeli firm providing remote monitoring and mobile payment solutions for vending machines.

Education: Bachelor of science in accounting from Boston University.

MARKO DIMITRIJEVIĆ

Title: Founder and chairman of Volta Global, a private investment group. Author of “FRONTIER INVESTOR: How to Prosper in the Next Emerging Markets” (Columbia University Press, 2016).

Previous: Investor for more than three decades, mostly in emerging markets, and ran hedge funds.

Education: MBA, Stanford University; bachelor’s in economics, finance and management science, University of Lausanne.

 

Nancy Dahlberg: @ndahlberg

 

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December 13, 2016

Boatsetter reels in $13 million in funding to fuel marketing, operations

By Nancy Dahlberg / ndahlberg@miamiherald.com

Aventura-based peer-to-peer boating marketplace Boatsetter reels in a round of funding in its quest to dominate a young industry. 

BaumgartenBoatsetter announced Tuesday that it has completed $13 million of Series A funding that will help the company aggressively expand its sales and marketing efforts as well as broaden and accelerate its operations in the United States. The investment round includes existing and new investors, including Great Oaks Venture Capital, Stanford University DAPER Fund, ZG Ventures and Peninsula Ventures. 

Last year, competitors Boatsetter, founded by South Florida marine and tech industry veteran Andrew Sturner in 2014, merged with Cruzin, founded by serial entrepreneur Jaclyn Baumgarten in 2012 in San Francisco but already with a large presence in South Florida. Baumgarten (pictured here) became CEO of the combined company and Sturner is executive chairman. Like others in the boat-sharing economy, Boatsetter attempts to make the boat rental experience as seamless as booking a room on Airbnb. But Boatsetter differentiates itself by giving users access to a large network of licensed captains in addition to a global roster of boat rentals for yachting, cruising, fishing or sailing, many through marinas it partners with. 


“We've taken boating from being a rare pastime for a fortunate few boat owners to being a universally accessible lifestyle activity for anyone with a smartphone and a credit card,” said Baumgarten. Boatsetter is expected to host 10,000 high quality rental boats, activate 200 marinas and connect boating enthusiasts to 2,000 captains in 2017, she said.

Andy Boszhardt Jr., partner at Great Oaks Venture Capital, said he has watched for some time Boatsetter's growth in the boat sharing sector. “We're thrilled that its team of marine industry heavyweights and tech startup veterans is making a global push for renters to experience the yacht life, this time from just about anywhere in the world,” he said. “Boatsetter's best-in-class marketplace tool is, without doubt, an outstanding player in the sharing economy.”

Boatsetter raised a $5 million seed round earlier this year and about $2 million before that, according to venture capital database Crunchbase.

December 12, 2016

JetSmarter raises $105 million to fuel growth plan

Jetsmarter

By Nancy Dahlberg / ndahlberg@miamiherald.com

JetSmarter’s growth plan is hitting cruising altitude, powered by a large round of new funding from high-profile investors.

On Monday, the Fort Lauderdale-based private jet marketplace announced that it raised $105 million from existing and new strategic investors.

Existing investors in the new round include the Saudi royal family and entertainer Shawn “Jay-Z” Carter. New investors include an Abu Dhabi-based growth equity fund; strategic partner JetEdge, a large-cabin private jet operator; KZ Capital, a London-based venture capital firm; and a Qatar-based private equity fund. The Series C equity financing round is still open and the company will release additional details when it closes, founder and CEO Sergey Petrossov said.

In venture-capital speak, the new funding makes JetSmarter a “unicorn,” a private company valued over $1 billion. JetSmarter says the new funding brings it to a $1.5 billion valuation.

Sergey2JetSmarter was launched in 2013 by Petrossov, a 2009 University of Florida graduate and native of Russia. Much like Uber lets consumers use their smartphone to summon a vehicle, JetSmarter offers a mobile app that lets users charter an entire jet, travel on a private jet shuttle or create their own shared charter. It doesn’t own jets but works with a network of charter companies. Annual membership fees start at $11,500.

The additional capital “will enable us to continue domestic and international growth and expand our member community. It will allow us to gain access to more inventory and carrier partners around the world, in addition to launching new JetShuttle routes in key cities that are crucial for our members. We remain dedicated to making travel fun again,” Petrossov said.

Specifically, Petrossov said JetSmarter plans to go into India, China and South America. JetSmarter already flies into cities in the United States, Europe and the Middle East, and will also be expanding to more cities and adding routes in those regions.

In addition, JetSmarter plans to start a social network so members will be able to talk to each other and do things together in cities where they travel, Petrossov said. That will include ground experiences developed by JetSmarter.

“We are building out curated experiences for our members at restaurants, lounges and hotels, all done through additional experiences. The way I like to describe it is the future country club... The country club of the future is coming to you,” he said.

JetSmarter has about 6,700 members and aims to grow that by three times in 2017, Petrossov said. “We’ve had over a million downloads, and have a half a million users registered that are waiting around for new cities and flights to go live.”

The company offers four flight services, both scheduled routes and on-demand, where members create their own flights on their own schedule. Most innovative is its shared services for both customized, on-demand flights and its scheduled JetShuttle services on 50 routes on three continents. (The most popular route is Florida to New York, with 25 flights weekly.) The company also offers JetDeals, last-minute flash sales that pop up on “empty legs.”

“The majority of our flights are member initiated,” Petrossov said.

To be sure, JetSmarter isn’t flying solo. In the past couple of years, variations of the jet-sharing business model have launched, aimed at bringing the world of the super rich to the merely wealthy. Wheels Up, for instance, runs a membership-based private airline from Miami and other cities, including recently offering service to Havana. NetJets pioneered fractional jet ownership. Some companies, such as West Palm Beach-based BlackJet, whose investors included celebrities and an Uber co-founder, have already been grounded.

JetSmarter has expanded rapidly in the last two years and now has about 260 employees worldwide, with about 110 of those in South Florida, Petrossov said. The company's website currently lists 17 open jobs, including a vice president of engineering; all but five  were based in Fort Lauderdale.

JetSmarter moved into new headquarters in the Broward Financial Center in downtown Fort Lauderdale this fall. It also has offices in London, Dubai, Zurich and Moscow.

In February, JetSmarter announced it had secured $26.1 million in funding from existing investors, including the Saudi royal family, and announced earlier this year that former U.S. Secretary of Homeland Security Tom Ridge had joined its board. Last year it raised $20 million in financing and $6.2 million before that, according to venture capital database Crunchbase.

Along with the new financing round, JetSmarter has appointed Bradley Stewart, XOJET president/CEO and senior adviser to private equity firm TPG, to its board of directors. The announcement comes off the heels of JetSmarter’s recent partnership with XOJET, designed to expand its private jet offerings for members across North America.

Nancy Dahlberg: 305-376-3595, @ndahlberg