Monday, May 2, 2022

TechCrunch

TechCrunch

After ultracharged growth, battery maker EcoFlow comes for the glampers

Posted: 02 May 2022 12:33 AM PDT

In recent years, episodes of extreme climate crises and power outrages have driven doomsday preppers to plan for off-the-grid survival scenarios. The mentality has been a boon to EcoFlow, a Shenzhen-based power generating and storing unicorn, which racked up $220 million in revenues last year as consumers in the US demanded its solar-powered portable power stations.

Off the back of a remarkable growth phase — revenues surged 50x between 2019 and 2021 — the startup, which was founded by a group of veterans from drone giant DJI in 2017, discovered a new niche to crack: glamping. In a call with TechCrunch, its co-founder and CEO Lei “Bruce” Wang envisaged a future of being in nature while enjoying a cool breeze sent from EcoFlow’s outdoor air conditioner, which will launch in the US in the coming months.

Glamping lovers can already plug a range of appliances, like electric ovens and stoves, into portable battery stations, but air conditioners are tricky because most of them use alternating current, which isn’t compatible with battery charging and has lower efficiency, the founder explained. The outdoor airconditioning unit that EcoFlow is revealing uses direct current instead and can thus be charged by batteries.

Hardcore nature-loving campers might scoff at the idea of outdoor air conditioning. I was bewildered by the proposal as well, but Wang rightly reminded me that if burnout urbanites make the effort of driving out into nature, many of them would rather do it the comfortable and indulgent way.

“Wherever people go, whether it’s at or away from home, they can achieve a lot more with electricity,” Wang explained the rationale for expanding beyond making batteries and into electronic appliances. “We now cover the entire loop [of use cases], from power generation, power storage, to power consumption.”

A greening dream

EcoFlow co-founder and CEO Lei “Bruce” Wang

Wang grew up in the vicinity of the Mu Us Desert in northwestern China, where he saw how the government’s ecological restoration effort helped combat severe desertification in the area. The childhood experience planted in his mind a goal to pursue a career in renewable energy, which led him to complete a Ph.D. in energy storage technologies at the University of Hong Kong and later help establish DJI’s battery R&D department.

Having seen the tide in the energy industry was turning, Wang decided to start his own company in 2017. “Replacing fossil fuel with renewable energy is the fundamental way to increase energy consumption per capital while still achieving sustainable growth,” the founder asserted.

At the same time, declining raw material costs were making it easier to run a battery startup. “Between 2010 and 2020, the prices of lithium batteries and solar panels have gone down 10 times. Such conditions would prompt anyone conducting technology research to become a tide player, to take a chance,” Wang recalled.

Lithium’s recent price spikes and supply chain disruptions haven’t concerned Wang. EcoFlow works with strategic partners to ensure a steady flow of supply, the founder said, and he believed lithium costs will eventually tail off in the long run.

The startup has come a long way since its formative days as a Kickstarter project. It has raised over $100 million in funding from notable investors including Sequoia Capital China and GL Ventures, the early-stage arm of private equity powerhouse Hillhouse Capital. With the category expansion, as well as its plans to push into new markets like its backyard China, EcoFlow expects to generate $630 million in revenues this year, which would make its growth between 2019 and 2022 almost 150x.

Such growth is supercharging EcoFlow’s path to an initial public offering. Last year, EcoFlow reached a valuation of $1 billion and announced plans to go public on the Shenzhen Stock Exchange. The company has entered a preliminary “tutoring” period with the city’s exchange regulators and is aiming to float its stocks within the next two to three years.

Wang said the Shenzhen-based exchange, which was designed for encouraging technological innovations, will attract investors who “understand the new energy industry,” though he doesn’t rule out the possibility of an overseas listing down the road. Operating in profit, EcoFlow declined to disclose whether it will raise another financing round before its IPO.

Powering global customers

Unlike many hardware makers that venture out of China only after proving their products at home, EcoFlow went after overseas markets at the outset. It first went to Japan, a country prone to natural disasters and whose consumers are known to be tech-savvy. Today, Japan and the US are the two largest revenue drivers for EcoFlow among the 100-something markets it ships to.

EcoFlow recently started selling its battery products in China where a rising middle class has demonstrated a growing fascination with luxury camping. The company is also exploring opportunities in emerging markets across Asia, Africa, and Latin America, where it wants to supply households hit by electricity shortages with “affordable” products, Wang said.

When asked how EcoFlow managed to build a foothold in foreign markets, Wang, who looks to Tesla and Apple for inspiration, offered the obvious though tough playbook: understand your customers. “We say internally that ‘the customers are never wrong. If anything goes wrong, it must be us.”

To put the adage into practice, EcoFlow operates a fairly international office in Shenzhen, a full on-the-ground team in Japan, a small but growing force in the US, and is soon hiring in Europe. Globally, EcoFlow has over 1,000 employees working on an extended value chain, spanning from R&D, which accounts for 40% of its staff, to after-sales service.

While many Chinese consumer tech startups find it increasingly challenging to operate overseas as geopolitical tensions threaten to put them in the crosshairs of foreign authorities, as illustrated by giants like TikTok and Huawei, Wang doesn’t see the same hurdle.

“At the end of the day, users will pay for a good product, which is why I like being in the business-to-consumer space,” the founder said confidently. “Furthermore, our products are helping to promote environmental sustainability, which is a universal goal that can strike a chord among consumers around the globe.”

Google-backed neobank Open becomes unicorn with new funding

Posted: 01 May 2022 11:55 PM PDT

India has 100 unicorns now. The Bengaluru-headquartered neobank Open entered the coveted club on Monday with a new funding round, it said.

The five-year-old startup did not disclose the size of its Series D funding, but a source familiar with the matter said it’s $50 million. The new round, which valued Open at $1 billion, was led by Mumbai-headquartered investment firm IIFL, the two said. Existing backers Tiger Global, Temasek and 3one4 Capital also participated in the round, which comes just seven months after Open announced its Series C funding at $500 million valuation. Open has raised about $187 million to date.

Open operates a neobank that offers small and medium-sized businesses as well as enterprises nearly all the features of the bank with additional tools to better serve the customers’ needs. Millions of small and medium sized businesses in India struggle with maintaining multiple bank accounts, bookkeeping of their daily spending, and bandying out payments to employees.

The startup, which has partnerships with over a dozen top banks in India, is used by more than 2.3 million businesses, it said. Open processes over $30 billion worth transactions each year, it said.

In recent years, the startup has expanded its offerings to provide its neobanking technology stack to banks in a white-label licensing arrangement, who then sell it to their own customers.

The startup said it is looking to launch three new products — revenue-based financing Flo, early settlement card offering Settl and working capital lending Capital — in the coming months to further broaden its offerings. It is targeting to disburse $1 billion in lending through its new products within the next 12 months, it said.

“We are excited to partner with IIFL and existing investors Tiger Global, Temasek and 3one4 Capital for our series D round. We see a lot of synergies with IIFL especially on leveraging the lending book, as we are getting ready to launch innovative products like revenue-based financing, early settlement, working capital loan and business credit cards to SMEs on our platform," said Anish Achuthan, co-founder and chief executive of Open, in a statement.

Key offerings of neobanks. Data: RBI, Jefferies. Image credits: Jefferies

The growth of Open in recent years, which has led to several other startups expand to and innovate in this category, has dramatically changed the relationship between banks and fintechs. Just a few years ago, most banks in India were skeptical of neobanks and it was very difficult to persuade any of them for a partnership, fintech founders have told TechCrunch.

"Neobanks are gaining prominence as platforms to digitise banking or bank-like services for millennials and SMEs. Top-4 global neobanks are worth $100 billion and Indian fintechs have made a start through likes of Open, RazorpayX, Fi, and Jupiter," wrote analysts at Jefferies in a report last year.

"In fact, many Indian fintechs plan to expand from 1-2 platforms now to neobank over 3-5 years. Incumbent banks/NBFCs are partnering with them. Monetisation is some time away," they added.

Today’s announcement marks a major milestone for the Indian ecosystem, home to a tenth of the world’s unicorns. It was more than a decade ago when India found its first unicorn, a startup with $1 billion or higher valuation, in adtech startup InMobi in 2012, when startups were rare and funding was hard to come by. Things have changed dramatically in the past decade with an increasingly growing number of entrepreneurs finding the conviction to build something of their own. More than 60 Indian startups have entered the unicorn club since last year.

Building a better mobility fintech startup on TechCrunch Live

Posted: 01 May 2022 05:40 PM PDT

QED incubated this auto financing company in 2016 and Kevin Bennett became CEO in 2018 and soon after raised its first seed round. It started as MotoRefi, and rebranded in November 2021 to Caribou. But the mission remains: Transforming consumers’ financial relationship with their cars. Since the founding, Bennett has raised $74 million for the company, including early angel funding from Rachel Holt. At the time, she was a rising executive in Uber — a post she left in 2020 when she co-founded Construct Capital. Hear how Bennett pitched early investors, and what investors like Holt can provide to mobility companies.

This event opens on May 4 at 11:30 am PT / 2:30 pm ET with networking and pitch practice submissions. The interview begins at 12 pm PT followed by the TCL Pitch Practice at 12:30 pm PT. Register here for free.

TechCrunch Live records weekly on Wednesday at 11:30 am PT / 2:30 pm ET. Join us! Click here to register for free and gain access to Caribou’s pitch deck, enter the pitch practice session and access the livestream where you can ask the speakers questions.
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