Personalization and Humanity in Financial Technology

Small and intimate vs. large and impersonal. Is it really that simple? In the past decade, this contrast has begun to break down and, in some industries, …

Today’s FinTech companies have an opportunity to radically personalize the experience of financial services for consumers and businesses. Accomplishing this transformation will require combining a unique and somewhat tricky set of ingredients.

So why hasn’t the world’s greatest enabler of scale and volume – the internet – driven personalized experiences to customers in financial services the way it has in other markets? There are a number of enabling factors that are critical to this transformation.

Unique and Proprietary Data

In order to offer a unique and personalized experience, companies need to have some source of data that sets them apart. Too often, firms make the erroneous assumption that simply hiring a team of data scientists or implementing a leading-edge technical solution will yield the novel insights they seek. Any company looking to personalize its offering must first consider if they have data that provides insight into their customers and the environment in which they live and work, if those datasets are rich and not widely available, and if customers and partners explicitly consent to the sharing of this data. In the world of machine learning, it is generally the case that if given the choice between more data and more sophisticated models, it is the data that will have greater impact. Ideally, if you are looking to build a powerful personalization system, you have access to large quantities of unique data, and its accumulation yields an improved experience for all your customers.

Technical Architecture

Personalization at massive scale is only possible with the diligent application of technology. The mere existence and possession of data is not the same as having that data in the right structure to enable its most valuable use. Too often, companies that excel at data consumption end up with data indigestion, as information gets fragmented throughout the enterprise, and it becomes harder to construct a unified view of all data pertaining to any particular customer. While some of this entropy is unavoidable in organizations of rapid scale, there are ways to mitigate the complexity. Investing in data engineers who focus on data pipelines, data integrity, and data structure is of utmost importance and will multiply the productivity realized by a data science or modeling team. At the same time, building the learning systems – in terms of both process and technology – to rapidly iterate and deploy new innovations is crucial.

Brand Point of View

In building experiences that appreciate the uniqueness of each of its customers, a company must not forget to do so in its own unique voice. Few companies do particularly well on this dimension, and there is some risk that all computational personalization will sound alike, even if the message itself is tailored. While creating personalized experiences at scale with a unique editorial voice is a significant challenge, brands that are able to do this are likely to enjoy greater success.

Customer Value

The historical opposition of scale and personalization is deeply embedded in human psychology, and overcoming this legacy requires a clear and compelling use case. Offering customers real value from personalization will offset the inherent privacy concerns and provide a lasting incentive to continue making available the data that enables personalization. Moreover, as the core technologies for delivering bespoke experiences become commoditized, the differentiating factor will be the ability to pair technical capability with compelling customer value.

Many of the financial product structures being offered by today’s banks and non-bank financial technology firms are relatively well-established – checking accounts, loans, credit cards, investments – even if the packaging has changed. The most interesting developments are at the intersection of technology, information, and humanity. For financial services, personalization at scale offers incredible opportunity, and the most exciting developments are yet to come.

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Uber IPOs

Here, thanks to CB Insights, are the others with their exit valuations. Lyft (ride-sharing service) – $24.3 billion. Pinterest (social network) – $12.7 billion.

It is pricing its shares at $45 each giving the company a valuation of $82.4 billion – about a third less than the $120 billion valuation being talked about at the beginning of the year.

Uber seems to want to avoid the experience of competitor Lyft which went public at $72 then sank to yesterday’s price of $55.

The Uber IPO should take the total valuations of US VC-backed tech companies so far this year to over $130 billion.

Here, thanks to CB Insights, are the others with their exit valuations

Lyft (ride-sharing service) – $24.3 billion

Pinterest (social network) – $12.7 billion

Zoom (video communications) – $9.2 billion

PagerDuty (IT infrastructure) – $1.8 billion

Super League Gaming (e-sports) – $92 million

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Singapore’s Grain, a profitable food delivery startup, pulls in $10M for expansion

Cloud kitchens are the big thing in food delivery, with ex-Uber CEO Travis Kalanick’s new business one contender in that space, with Asia, and …

Cloud kitchens are the big thing in food delivery, with ex-Uber CEO Travis Kalanick’s new business one contender in that space, with Asia, and particularly Southeast Asia, a major focus. Despite the newcomers, a more established startup from Singapore has raised a large bowl of cash to go after regional expansion.

Founded in 2014, Grain specializes in clean food while it takes a different approach to Kalanick’s CloudKitchens or food delivery services like Deliveroo, FoodPanda or GrabFood.

It adopted a cloud kitchen model — utilizing unwanted real estate as kitchens, with delivery services for output — but used it for its own operations. So while CloudKitchens and others rent their space to F&B companies as a cheaper way to make food for their on-demand delivery customers, Grain works with its own chefs, menu and delivery team. A so-called ‘full stack’ model if you can stand the cliched tech phrase.

Finally, Grain is also profitable. The new round has it shooting for growth — more on that below — but the startup was profitable last year, CEO and co-founder Yi Sung Yong told TechCrunch.

Now it is reaping the rewards of a model that keeps it in control of its product, unlike others that are complicated by a chain that includes the restaurant and a delivery person.

We previously wrote about Grain when it raised a $1.7 million Series A back in 2016 and today it announced a $10 million Series B which is led by Thailand’s Singha Ventures, the VC arm of the beer brand. A bevy of other investors took part, including Genesis Alternative Ventures, Sass Corp, K2 Global — run by serial investor Ozi Amanat who has backed Impossible Foods, Spotify and Uber among others — FoodXervices and Majuven. Existing investors Openspace Ventures, Raging Bull — from Thai Express founder Ivan Lee — and Cento Ventures participated.

The round includes venture debt, as well as equity, and it is worth noting that the family office of the owners of The Coffee Bean & Tea Leaf — Sassoon Investment Corporation — was involved.

Grain covers individual food as well as buffets in Singapore

Three years is a long gap between the two deals — Openspace and Cento have even rebranded during the intervening period — and the ride has been an eventful one. During those years, Sung said the business had come close to running out of capital before it doubled down on the fundamentals before the precarious runway capital ran out.

In fact, he said, the company — which now has over 100 staff — was fully prepared to self-sustain.

“We didn’t think of raising a Series B,” he explained in an interview. “Instead, we focused on the business and getting profitable… we thought that we can’t depend entirely on investors.”

And, ladies and gentleman, the irony of that is that VCs very much like a business that can self-sustain — it shows a model is proven — and investing in a startup that doesn’t need capital can be attractive.

Ultimately, though, profitability is seen as sexy today — particularly in the meal space where countless U.S. startups has shuttered including Munchery and Sprig — but the focus meant that Grain had to shelve its expansion plans. It then went through soul-searching times in 2017 when a spoilt curry saw 20 customers get food poisoning.

Sung declined to comment directly on that incident, but he said that company today has developed the “infrastructure” to scale its business across the board, and that very much includes quality control.

Grain co-founder and CEO Yi Sung Yong [Image via LinkedIn]

Grain currently delivers “thousands” of meals per day in Singapore, its sole market, with eight-figures in sales per year, he said. Last year, growth was 200 percent, Sung continued, and now is the time to look overseas. With Singha, the Grain CEO said the company has “everything we need to launch in Bangkok.”

Thailand — which Malaysia-based rival Dahamakan picked for its first expansion — is the only new launch on the table, but Sung said that could change.

“If things move faster, we’ll expand to more cities, maybe one per year,” he said. “But we need to get our brand, our food and our service right first.”

One part of that may be securing better deals for raw ingredients and food from suppliers. Grain is expanding its ‘hub’ kitchens — outposts placed strategically around town to serve customers faster — and growing its fleet of trucks, which are retrofitted with warmers and chillers for deliveries to customers.

Grain’s journey is proof that startups in the region will go through trials and tribulations, but being able to bolt down the fundamentals and reduce burn rate is crucial in the event that things go awry. Just look to grocery startup Honestbee, also based in Singapore, for evidence of what happens when costs are allowed to pile up.

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Nilesh will guide this effort and strengthen our partnerships with the likes of Sitecore, Salesforce, Adobe, IBM Watson, amongst others.” Said Prachi …

Mumbai: Digitas India, a part of Publicis Groupe and India’s largest digital agency, has brought on board Prachi Pawar as VP Data and Nilesh Vaidya as AVP – Marketing Transformation Consulting. Prachi was previously associated with Fractal Analytics, working on large FMCG mandates, while Nilesh looked after a part of the technology duties at Sony Pictures Networks India before building his own technology platform venture.

Amaresh Godbole, CEO Digitas India commented, “Data is at the heart of our global and local proposition. We already have a robust data science team in place that services not just Digitas, but serves as a center of excellence for all Publicis Communications brands in India as part of the Groupe’s Power of One Strategy. Prachi’s experience will help us take our data offering to the next level, delivering advanced capabilities such as predictive analytics.”

Siddhyesh Narkar, Chief Technology Officer, Digitas India commented on Nilesh’s appointment. “In today’s ecosystem, custom technology solution providers like us need to play a consulting role to help our clients make the most of the adtech and martech ecosystem. Nilesh will guide this effort and strengthen our partnerships with the likes of Sitecore, Salesforce, Adobe, IBM Watson, amongst others.”

Said Prachi, “The thing I found most exciting about this opportunity was the chance to move from a standalone data function to one where data comes to life via Publicis Groupe’s myriad offerings. Our data capabilities now power insight generation, dynamic content and business decision making, and it’s brilliant to see it come to life as we win pitches and produce truly data inspired work for our clients.”

Nilesh added, “I see this role as the need of the hour. My experience will be put to great use here, synthesizing external product partnerships with our custom technology capabilities, and delivering best in class marketing transformation solutions for Digitas and Publicis clients as a whole.”

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Rappi to triple number of cities in Brazil where it operates after SoftBank deal

… SoftBank and $200 million from current investors that include DST Global, Delivery Hero, Sequoia Capital, Andreessen Horowitz and Y Combinator.

SAO PAULO (Reuters) – Latin American unicorn Rappi expects to more than triple the number of cities where its delivery app operates in Brazil using most of a $1 billion cash injection by Japan’s SoftBank, its President and co-founder said on Thursday.

Rappi, which delivers food from restaurants as well as groceries, medicine and other products, plans to reach 70 Brazilian cities, up from the current 20 where it operates. Most of the expected growth will occur in Brazil, among the seven Latin American countries where it is present.

Co-founder Sebastian Mejia also said the company plans to enter between two and four countries in the region, without specifying which ones. Founded in Colombia, Rappi is also in Argentina, Brazil, Chile, Mexico, Peru and Uruguay.

Mejia, speaking to Reuters in a telephone interview, ruled out acquisitions to grow after the capital injection, saying the company’s rivals use different technologies.

Rappi received a total of $1.2 billion, Mejia said, including $1 billion from funds managed by Japan’s SoftBank and $200 million from current investors that include DST Global, Delivery Hero, Sequoia Capital, Andreessen Horowitz and Y Combinator.

SoftBank’s Innovation Fund, which is focused on Latin America, and another SoftBank global investment vehicle, Vision Fund, will split the investment evenly. In a second move the Latin America-focused fund is expected to be offered the global fund investment.

The start-up valuation tripled during the last year, and was valued at more than $3 billion by the SoftBank deal, Mejia said, adding that the jump in valuation from $1 billion relates to the company’s fast growth.

Its sales quintupled in the last 12 months. In Brazil, it climbed even faster, by 24 times.

Rappi also plans to use the deal proceeds to build what he calls a super app, where consumers will be able to buy products and services, request deliveries and make financial transactions.

Mejia said the delivery app is not seeking a partnership with a financial institution in the short term but did not rule one out in the future.

Talks with SoftBank lasted only two months. “We are excited to receive the SoftBank investment; it’s the world’s largest investor in startups betting on innovation in Latin America,” Mejia said, adding that technology may contribute to the region’s growth.

Reporting by Carolina Mandl and Tatiana Bautzer; Editing by James Dalgleish

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