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French startups to look out for

For several years France has been trying to become one of the most important startup basins in the world. The country offers Europe’s largest tax discount for research and development. There are 71 innovative clusters combining universities, private enterprises and research centers.

France already has several success stories. Among the most spectacular ones are BlaBlaCar, a service linking drivers having free seats in their vehicles with people looking for transportation, streaming service Deezer or manufacturer of thermostats Nest, bought by Google for an impressive sum of $3.2 billion. The below list presents these small French companies which are still not well known but deserve special attention for their innovation:

Happn – An application which uses current location of your phone to find and show you persons with whom your paths have crossed and potentially liked us. Of course, to be in the timeline presenting the people we passed, both persons have to use Happn. This is to be the solution for situations when our attention is drawn to the person sitting opposite us on the bus, but before we get the courage to speak to her, she gets off. Or when we liked someone we passed on the street. The idea appealed to the investors – in December 2014 the company managed to raise $8 million in the first round of financing.

Cookening – An American Airbnb-like platform which connects residents of a given city with tourists who would like to taste real local food. These “host” users create their own profiles on the site, where they publish photos of meals they have prepared to encourage potential visitors. Importantly, Cookening offers not only unique culinary experiences but also the possibility to engage in social interaction.

StarOfService – The platform connects local service providers with customers and allows them to adapt to their needs – price range, location or preferred time. After submitting an inquiry, the customer gets an email and he chooses which offer he wants to use. The service is available to users looking for local services tailored to their specific needs – from wedding photographers, plumbers, language teachers, DJs, to Pokemon Go trainers to hire. Last year, the startup raised $10 million from investors for further development.

Mention – The image of our company is built, among others, by the type of relationships we have with our clients. The faster we are able to react to consumer feedback, the better. The tool created by Mention startup not only informs users in real time about their company being mentioned on the internet, but also allows an immediate response to an article or post in social media. This ultra-fast media monitoring is already used by companies such as: Microsoft, Spotify and GitHub.

Kinnevik earns $220mln from partial Rocket stake sale

Shares in the German e-commerce company Rocket Internet fell 14% after its main investor sold half its stake as the two firms have been increasingly becoming competitors. Sweden’s Kinnevik, which clashed with Rocket last year over the valuations of some of their joint investments, sold a 6.6% stake in Rocket at 19.25 euros per share, netting $220 million. Rocket Internet will not receive any proceeds from the transaction.

Berlin-headquartered Rocket Internet was founded in 2007. It has built up several businesses from fashion e-commerce to food delivery, but its shares have slid in the last year because many investors have become concerned about hight losses and falling valuations for its key start-ups. The company is facing heat from its investors due to continuous losses and a decline in revenue of its portfolio companies globally. Rocket Internet’s experience in India, for example, is far from being profitable. It made bigger bets on food-tech venture Foodpanda, fashion e-tailer Jabong and furniture portal FabFurnish. Most ventures quickly expanded in the beginning, but later started to struggle to survive. Last year, Rocket Internet sold Jabong and FabFurnish in misery sales. Last year Future Group acquired FabFurnish.com in an all-cash deal and Jabong was sold to Indian e-commerce firm Flipkart’s fashion portal Myntra for $70 million.

Kinnevik was one of the first investors in Rocket and was its biggest shareholder after the Samwer brothers who founded it and who have a 37%stake. Kinnevik also owns stakes in several Rocket’s major startups. There is a very high probability that Kinnevik will sell its remaining stake in Rocket because Kinnevik and Rocket are potential competitors for new investments. There might be conflicts of interest as Rocket moves from an initial attention on setting up new online businesses to being more of an investment firm with a model identic to Kinnevik’s. Kinnevik has not invested with Rocket in its food holdings, which now justifies the enormity of its valuation after it made a big push into the sector in 2015, a shift away from its preliminary attention on ecommerce in emerging markets.

Meanwhile, even as Rocket Internet has struggled with its bets on Indian companies, it has collected $1 billion in a new fund to support Internet companies globally. The Rocket Internet Capital Partners fund is Europe’s biggest fund concentrated on the Internet sector. The new fund will make early-stage and growth-equity investments in high-growth Internet-related businesses. It plans to invest in key attention fields of the Internet sector including marketplaces, e-commerce, financial technology, software and travel. The fund gained essential support from a diverse group of global investors, including financial organizations, pension funds, asset managers, foundations and wealthy individuals.

Italian startups worth to track in 2017

Despite of a quite slow start, at least when compared to European powers like Germany and UK, the startup scene in Italy has started to grow seeking global stage. Italian startups have been notably active in the last few years, supported by programs like the governmental Italia Startup Visa Program. Here are some of them worth to know:

Talent Garden –  it is a coworking network with places to work all across Italy and also in other countries: Spain, Albania, Romania, Lithuania. Soon it will open in France. Talent Garden was launched in a small Italian town and in just a few years it grew from a startup to Europe’s largest coworking provider. It has diversified its core business, from shared offices to a hub for innovation-related activities. In 2015 it began with training courses for developers, which were requested by companies willing to make use of digital technologies.

D1 Milano – last year this company created the world’s first thermochromic watch. The startup was opened in 2013. With average prices of $230, the company aims to offer affordable wristwear. It is currently trending in Japan and is stocked by retailers like Harvey Nichols, Selfridges and The Dubai Mall.

BeMyEye is an innovative service for crowdsourcing shop checks and mystery shopping. It provides trustable observations via a widespread network of more than 350 000 on-demand workers using a smartphone application in few days from thousands of locations in Italy, Germany, Spain, France and UK. Soon it will start other European locations.

Drexcode – an online platform for rental of luxury clothes, that has a portfolio of high-end clothes and accessories from the latest
collections of the most famous fashion brands.  It was founded in 2014. In 2015 it closed an investment round of the of the total value of 556k Euros.

Waynaut – a platform for multimodal transportation with innovative solutions such as ridesharing and carsharing. It brings all available transport means under one search, providing users with the fastest, cheapest and most convenient options for their route and guides them on to the travel operator.

Musement – an app which enables you to locate and plan guided tours, city passes, museum tickets, and more. It was launched in 2013 and currently operates in 450 cities across 55 countries. In 2016 the startup obtained $10m in an investment round aimed at improving the app and expanding internationally.

At present startups in Italy seem to suffer from an image problem because the country is usually considered by foreigners as a tourist destination, rather than an innovation powerhouse. Hopefully, having some successful startups already,  the local ecosystem will be noticed by international investors, giving it the needed boost.

 

“Google tax law” in Russia

IT companies operating on the Russian market have started to pay VAT on the sale of electronic services in the Federation since 1st of January 2017. The rate is 18%. The relevant law, called in Russia “Google tax” was signed by Vladimir Putin at the beginning of July 2016.

The new rules apply to companies offering internet right to use their programs, including computer games and databases, and domains; providing services of advertisements placing; as well as selling electronic versions of books, music, video, etc. This applies, among others, to companies such as: Apple, Google, Microsoft and Uber.

Under the new law, foreign IT companies are becoming VAT payers. For their purpose, the Russian tax authorities will launch this year a special on-line service “Tax office”. It will cover the whole process of taxation from application to the tax office, by making a declaration and control of the settlement by the tax authorities. If any company fails to comply with the new regulations, it will be punished for illegal activity.

Foreign companies had already reacted to the new legislation by increases in prices of their services. The first, at the beginning of December 2016, was the US Google. It informed its Russian clients that file storage service Google Disc would become more expensive due to new tax regulations. Uber moved on its drivers the duty to pay taxes on provided services. The company announced that it does not intend to raise prices because of the new law and its drivers can count on subsequent reimbursement. Nevertheless, some Russian Uber drivers started to give up work. The US startup is trying to catch up the local leader in the market of private transportation, Yandex Taxi. Currently there are in Russia about 3,000 Uber cars, and Yandex Taxi has 15,000 cars. New tax regulations may enlarge this gap.

In the initial version of the Law on VAT for the IT industry, it covered Russian companies too. Yet, it met with great criticism from native industry. The arguments convinced the Kremlin and therefore the law covers only foreign providers of services via Internet. This is to convince Russian IT companies to leave tax havens and register their business in Russia.

Poland has the first media project in franchising

The platform of regional portals DlaWas.info is the first media project in franchising in Poland. The network currently has more than 60 regional portals and several more are just running.

Ultimately, the portal network DlaWas.info will operate in each district town in the country. Unlike traditional media portals, these earn profits not only from advertisements and sponsored articles, but also from the center of coupons, ticketing, food ordering, entries into models database and ads.

logoThe entire network is planned to count about 330 of cooperating information portals. The franchisee of the project DlaWas.info receives exclusive rights to a particular district so that portals and services offered by them do no compete with each other.

In the business model of DlaWas.info, operation of the portal is extremely simple and requires no technical knowledge. Moreover, at each stage the portal partner can count on help from the franchisor. It is a franchising business model with low entry costs and high development potential, because you only need a computer with internet access and a phone with a camera. The costs of accessing the network are very low in relation to what the franchisee receives. The franchisor passes all the knowledge on how to conduct a regional portal in the form of several hundred paged business manual (know-how). This is supposed to help to skip the arduous stage of learning from your own mistakes and becoming a leading medium in your region.