All Things in Moderation - A Balanced Life

Startups Weekly: Indiegogo Tightens Campaign Screening

This week’s edition of Startups Weekly focuses on a shift in strategy at Indiegogo and its implications for the crowdfunding landscape. To receive these updates directly, subscribe here.

Indiegogo Implements Stricter Campaign Reviews

Indiegogo, a pioneering crowdfunding platform, has announced it will be implementing more rigorous screening procedures for campaigns hosted on its site. This change comes as a response to concerns about campaign legitimacy and user protection.

According to reports, the company has established an internal review board. This board will focus on evaluating campaigns deemed riskier by the platform’s user base. The board possesses the authority to prevent individuals from launching campaigns or to enforce stricter terms of service.

Collaboration with GoFundMe

In addition to internal changes, Indiegogo has forged an alliance with its primary competitor, GoFundMe. This partnership aims to develop best practices and proactively identify and remove fraudulent or illegitimate campaigns from both platforms.

Industry Perspectives on Indiegogo’s Decision

The move sparked discussion within the crowdfunding community. Many questioned the impact on accessibility and the core principles of open funding.

Here’s a key insight from Kim Lyons’ reporting:

“While I’m not in the business of theorizing why that was, I do have the luxury of asking people questions about their thoughts, retweets be damned. My immediate question for folks was, “What does Indiegogo’s new stance mean for the broader crowdfunding market?”

Republic’s Perspective on Moderation

Republic, a platform specializing in equity crowdfunding, views Indiegogo’s approach as distinct from its own. Kyle McCormick, Chief of Staff at Republic, stated his company operates as “a very different beast.”

“We’re going after a different part of that user’s wallet — their investable assets on which they hope to make a return. Not checking for fraud (at a bare minimum) would be deeply negligent,” McCormick explained. Republic’s focus on investment necessitates a more curated platform.

The majority of companies seeking funding through Republic already demonstrate traction, often having secured venture capital or completed accelerator programs. McCormick acknowledged ongoing challenges, including scaling quality assurance and mitigating biases present in traditional venture capital.

Gumroad Founder’s Concerns

Sahil Lavingia, founder of Gumroad, an online platform for creators, expressed concerns that manual review processes could stifle the creator economy and hinder the transition to Web 3.0. He believes this approach is counter to the ethos of empowering independent artists and entrepreneurs.

“The creator economy is about enabling a new set of artists and entrepreneurs to gain access to capital they were historically unable to get,” Lavingia stated. He suggested external pressures may be influencing Indiegogo’s decision.

The Balance Between Risk and Accessibility

The core debate centers on balancing risk mitigation with maintaining accessibility to funding. Some argue that stricter moderation is necessary to protect users and build trust.

One early-stage entrepreneur suggested the move is a strategic effort to improve quality assurance and drive traffic. By pre-vetting campaigns, Indiegogo can signal quality to consumers and potentially boost funding success rates.

Implications for the Future of Crowdfunding

Ultimately, the discussion raises broader questions about the role of moderation in crowdfunding, the importance of quality assurance for investors, and the evolving landscape of Web 3.0. Indiegogo’s decision signals a broader re-evaluation of investment and financial exchange practices.

Further Insights

This newsletter also covers new funding data for female founders, an emerging startup called Chipper, and the economic dynamics of neobanks. Follow Natasha Mascarenhas on Twitter @nmasc_ or Instagram @natashathereporter for more updates.

A Resurgence in Venture Funding for Female Founders

Recent data from PitchBook indicates a growing trend: venture capital funding for companies led by women is experiencing a notable increase. The disparity in startup funding based on gender is gradually diminishing, though progress remains incremental.

Through the initial nine months of 2021, female-founded businesses secured $40.4 billion in funding across 2,661 transactions. This represents a significant jump from the $23.7 billion raised in all of 2019, and a more than tenfold increase compared to the $3.6 billion recorded in 2011.

Key Takeaway: Although complete parity in funding remains elusive, the observed increase follows a concerning downturn experienced in 2020. This rebound is particularly significant and can be attributed, in part, to evolving dynamics in investment decision-making.

A detailed discussion of these positive trends and broader insights into the data can be found in the latest installment of Equity.

Interested in further data points?

• The fintech expansion in Latin America is demonstrably more than just inflated speculation and substantial venture capital investment.
• Tesla has issued a recall affecting 11,704 vehicles due to a discovered error within its Full Self-Driving Beta software.
• NerdWallet’s initial public offering (IPO) showcases the potential for content-driven companies to achieve unicorn status.

Chipper Cash: Startup of the Week

This week’s featured startup is Chipper Cash, a fintech company rapidly gaining prominence. Recognized as one of Africa’s most highly valued private startups, its valuation recently exceeded $2 billion. This achievement is attributed to its innovative money-moving services.

The latest funding round was spearheaded by FTX, the cryptocurrency exchange founded by Sam Bankman-Fried. Investors expressed confidence in Chipper Cash’s potential to revolutionize money transfers. They believe the platform will simplify the process, making it as convenient as sending a text message.

Furthermore, FTX anticipates that Chipper Cash will significantly boost the integration and acceptance of cryptocurrency throughout Africa and internationally.

Recent Developments and Partnerships

Chipper Cash has recently forged a strategic alliance with Twitter. This collaboration supports Twitter’s new Tip Jar feature, enabling users to easily send and receive funds.

The platform now stands alongside established payment providers such as PayPal, Patreon, GoFundMe, Cash App, and Venmo. Chipper Cash is also expanding its reach beyond the African continent.

Individuals in Europe can now utilize the platform to remit funds to other markets served by Chipper Cash.

Other Notable Startups

• Aqua suggests a shift in investment focus from NFTs towards private equity opportunities.
• Guardians Collective aims to alleviate the challenges of parenthood by fostering a supportive community.
• Martie has secured $3 million in funding to reduce food waste by redirecting shelf-stable products from landfills.
• Neuro-ID has received new investment to enhance its fraud prevention capabilities across various digital interactions.
• It’s important to remember that venture capital funding often comes with expectations for rapid growth and profitability.

Nubank's F-1 Filing: A Turning Point for Neobanks

Nubank, a well-known neobank closely monitored over several years, recently submitted its F-1 filing. A detailed analysis of the financial data underlying this large consumer fintech was conducted by Alex and myself. The information revealed compelling and efficient insights.

Key Takeaways: The latest figures suggest neobanks may be transitioning from a high-investment growth stage – characterized by substantial spending with the expectation of future profits – to a period of more consistent, repeatable income. Additional consumer banking IPOs anticipated include PicPay, which filed for a $100 million IPO on the Nasdaq in April, and Chime, which secured $750 million in Series G funding in August and is aiming for a public offering by March 2022, potentially valued between $35 billion and $45 billion.

This shift indicates a maturing of the neobank model, moving beyond initial customer acquisition costs.

Further Exploration of Nubank:

• The story of how unconventional hiring practices and a compelling pitch deck fueled Nubank’s rise to a $30 billion fintech leader.
• An examination of the vision driving the creation of a neobank experience comparable to the magic of Disney.
• Insights into how Nubank’s customer experience (CX) strategy contributed to its status as a highly regarded digital bank.
• A consideration of which aspects of Nubank are most likely to define the future of banking innovation.

The F-1 filing provides a valuable benchmark for assessing the progress and potential of the neobank sector.

Implications for the Fintech Landscape

The data from Nubank’s filing offers a positive signal for other neobanks preparing for public offerings. It demonstrates a pathway towards sustainable profitability.

Recurring revenue is a critical metric for investors, and Nubank’s performance suggests this is achievable within the neobank model.

Regarding Equity

Many of you are aware that I collaborate on Equity, a podcast dedicated to dissecting the figures and subtleties within the technology sector, alongside Alex Wilhelm and Mary Ann Azevedo. This month, we achieved a record number of downloads, and I extend sincere gratitude to the millions who dedicate their time to listening.

While I don't frequently request this, if you enjoy the podcast, a rating and review on Apple Podcasts would be greatly appreciated. This action is without cost (!!!) and holds significant value for our dedicated team.

Supporting the show through a review helps increase its visibility and reach a wider audience interested in tech business and venture capital. Your feedback is invaluable.

Show Appreciation

Consider leaving a review to help others discover the insights and analysis offered on Equity. It’s a simple gesture with a substantial impact.

We consistently strive to deliver high-quality content, and your support fuels our continued efforts. Thank you for being a part of the Equity community.

Weekly Tech Roundup

As reported by TechCrunch

Microsoft has announced the release of a product mirroring the functionality of Google Wave.

Rivian is currently facing a gender discrimination lawsuit, with allegations pointing to a problematic and exclusionary workplace environment described as a ‘bro culture.’

Helion Energy has successfully obtained $2.2 billion in funding to facilitate the commercialization of its fusion energy technology.

Niantic, known for Pokémon GO, will be discontinuing its augmented reality game, Harry Potter: Wizards Unite.

Coinbase is set to acquire Agara, an Indian company, in a deal valued at over $40 million.

Featured on TechCrunch+

Zillow’s departure from the iBuying market raises questions about the overall stability and future of this sector.

Growth marketers are actively preparing strategies for the approaching holiday shopping period.

Tiffany Chu of Via discusses the crucial role of govtech in developing effective mobility ecosystems.

A redesigned equity plan was implemented to enhance flexibility, and the process can be replicated by other organizations.

There is growing speculation regarding China’s potential involvement in the development of the metaverse.

A late but heartfelt Happy Diwali and Sal Mubarak to everyone.

N