Archive for the ‘geographic expansion’ tag
Zimride, a San Francisco-based startup that helps commuters share rides, is bringing itself to the East Coast with a new route between New York and Washington D.C.
With an already popular route between San Francisco and Los Angeles, this will add another one on the other side of the country. The average passenger from New York to Washington D.C. should pay about $25 for a seat, and the average Zimride driver should make $150 if they sell three seats.
“With recent Chinatown bus closures in New York city and increased summer weekend travel along the country’s most trafficked corridor, the time is right to bring our rideshare success east,” co-founder John Zimmer tells us.
The geographic expansion caps off a very hectic spring and summer for Zimride. The company just added a third leg of its business in on-demand, mobile ride-sharing. Called Lyft, the product resembles Uber’s model except that it uses regular people who bring their own cars. Zimride, of course, vets drivers for their driving history, criminal records, auto safety and so on. They add some personal touches too with a fist-bump for every passenger and pink moustaches on the cars.
Lyft comes on top of two other prongs of Zimride’s business. There is the original ride-sharing program that works with universities. Then there is long-distance ride-sharing. To engender trust, Zimride uses Facebook to show friends or interests in common. Passengers and drivers can also review each other for reliability and response times. Zimmer says all three arms of the business have made the company enough revenue that it doesn’t necessarily need to raise another round of funding. The business supports more than 30 employees.
Since launching back in 2007, the company has seen close to 200 million miles shared and 360,000 users. A year ago, it hit 100 million miles. The company has raised just over $7 million from Mayfield Fund, Floodgate, K9 Ventures, Keith Rabois and Facebook’s original incubator fbFund.
Uber, the mobile car service that’s becoming indispensable (I think I spend more money on Uber than on food), is continuing its geographic expansion by entering “super secret stealth test mode” in San Diego.
“Super secret” means something different for Uber than it does for most people — apparently it involves posting about it on the company blog and then emailing tech press for coverage, similar to its “secret” test in Philadelphia. Oh, and it’s talking about its first San Diego passenger, pro skateboarder Tony Hawk (apictured above).
What the company really means with the secret label is that it’s still figuring the market out, so “we’re going to be tweaking our pricing, fleet, and placement over the next few weeks.” That also means passenger will need to be a little more patient while the app is in test mode.
And Uber says it’s hiring staff for San Diego, specifically a general manager, an operations manager, and a community manager.
FounderDating, which helps entrepreneurs with co-founders through online networking and offline events, announced a big geographic expansion earlier this year. But what if you don’t live in a traditionally startup-heavy city like San Francisco, New York, or Boston? Do you have to slave away on your awesome idea all by yourself? Not necessarily.
To figure out where to go next, FounderDating is launching an initiative called Unlock Entrepreneurship In Your City. Founder Jessica Alter says she and her team have been inundated with requests for new locations, with people claiming that Portland, Tel Aviv, and Detroit (for example) are all hotbeds of entrepreneurship. In essence, Alter is now responding, “That’s awesome. Just show us.”
So if you want FounderDating to start operating in your city, just go to the Unlock Entrepreneurship website and apply, and convince other entrepreneurs to do the same. If there are at least 50 unique applications from a city, Alter says FounderDating will set up shop there. She’s not committing to a specific timeframe for any of those cities, especially since she has to locate a managing director to run the program from each location, but she says that it will happen, and that if FounderDating expands somewhere, “We want to be there long-term.”
Meanwhile, the startup is also trying to ramp up its presence in cities that it has already expanded into, by increasing the frequency of its application rounds. Now there’s a round each week (though in different geographies), so if you’re geographically flexible, you could theoretically apply at any time, rather than waiting for a specific window to open. The next FounderDating rounds are: San Francisco & NYC May 17th (Apply by May 7th), Los Angeles June 6th (Apply by May 23rd), Austin May 23rd (Apply by May 15th), Seattle June 11th (Apply by June 3rd), Boston June 26th (Apply by June 16th).
European Payment Service Klarna Raises A Whopping $155 Million From DST, General Atlantic, And Sequoia
European e-commerce payments provider Klarna just raised a huge, pre-IPO round of $155 million. The round was led by General Atlantic and Yuri Milner’s DST Global, and included Sequoia Capital, which led its last $9 million round in May, 2010. At that time, Sequoia partner Michael Moritz (he of Google, PayPal, and Yahoo fame) joined the board.
The new round almost certainly puts Klarna’s valuation into Europe’s billion-dollar tech club.
Klarna is based in Stockholm and was founded in 2005 by three economics students, Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson. It already has 600 employees and clears $2.5 billion worth of payments from 6 million consumers across 14,000 merchants.
The company operates primarily in Europe, where it takes some of the risk out of e-commerce by extending credit to shoppers and allows them to pay after they receive the goods. Merchants are paid upon order. (In Europe, they call this invoicing).
The key to Klarna’s business and profits is to assess and minimize credit risk on the fly. The company acquired Analyzed, an Israeli fraud prevention firm, last May to help with risk assessment. The new capital could be used for more M&A, hiring, as well as further geographic expansion.
It may still be a feature phone world, and mobile payments are a work in progress, but the big movers in the space are happy to be the guinea pigs, knowing it will pay off down the line. Starbucks has been doing the mobile payment thing for a good two years now, and the app has grown from a simple gift card frontend for the iPhone to a more versatile product, and gone from select locations to over 9000.
Their mobile app payments total 26 million now, accelerating to a current rate of around 3 million per month. It has to be pointed out that the payment count growth isn’t quite in line with the geographic and location growth, but that’s expected, since the geographic expansion is a prerequisite for customer participation. That people want to use the system is clear: but will Starbucks continue as a lone-wolf payment brand or align itself with a more universal payment system like Google Wallet?
They shouldn’t feel any pressure, of course. As one of the world’s best-known brands and with a service style that lends itself to a standalone app, they’re in a good position to keep things the way they are. A smaller company, say one of the local roasteries here in Seattle, doesn’t have that option, and although their decision to go with, say, Square, won’t have much of an effect on Starbucks, a thousand local businesses doing so might cause them some thought.
It should cause Starbucks thought especially, I should say, because their recent brand backpedaling following an overeager expansion saw them desperately trying to rekindle local relationships. But any large company must consider what their customers expect when they walk in the door. If every place on the street takes credit cards and only one takes cash, there’s pressure on them to add that capability. And if a company projects that in five years, customers will be expecting Google wallet, NFC, Isis, or what have you, they’ll want to board that ship early.
Right now, with this mobile app, Starbucks is in a holding pattern. It’s doing all right, but the mobile app has accounted for only $110 million in card cash transfers, a microscopic portion of the $2.4 billion in gift card transactions. There’s a lot of room for growth, but it’s not going to happen in this app.
Watching how the big retail companies dispose their favor among the competing payment systems will make for great spectating in the next few years. Gap versus H&M, Burger King versus McDonalds, and so on. Like it or not, the success of our favored disruptive technologies will rely very much on the blessing of billion-dollar companies. You may like Square, but if MasterCard and Visa make it easier for their hundreds of millions of customers to use Isis, it’s game over.
In the meantime, it’s more natural to see small payment systems installed in small businesses, where they can build up an resistance to bullying and, hopefully, become too large a system to be shut out without concessions by the majors. Starbucks will certainly be one of the big voices in the debate to come; with sovereign sway over so very many daily transactions worldwide, they are potentially both crucible and kingmaker.