Badi gets $30M for AI-aided room rentals

Should you let AI help you pick your roommates? Barcelona-based urban room rental startup Badi thinks so, and it’s just closed a $30 million Series B funding round less than a year after a $10 million Series A — suggesting algorithm-aided matchmaking is resonating with its target millennial(ish) “Generation Rent” demographic as they hunt for their next flatmate.

The 2015-founded startup has now raised circa $45 million in total, while its platform has passed 12 million rental requests. Badi also tells us it passed one million registered users last November, up from around 700,000 in February 2018.

It currently offers a service in key cities in four European markets: Spain, France, Italy and the U.K.

The business was set up to respond to the rising trend of urban living (and indeed tourism) that’s been driving rents and squeezing more people into shared houses to try to make city living affordable.

Badi CEO and founder Carlos Pierre points to estimates that by 2050 the total population living in cities will increase from 54 percent to 66 percent. “There will likely be a shortage of homes for people looking to live in cities and as a result, this will lead to an increase in smaller living units or rooms. This is where Badi comes in,” he suggests in a statement.

On the AI front, Badi applies machine learning technology to help with the flatmate matching process — learning from users of its platform as they match and agree to become flatmates, and then feeding “compatibility insights” back in to keep improving its recommendations.

The Series B is led by U.S.-based consumer tech VC firm Goodwater Capital, making its first investment in a Spanish startup. Also investing are Target Global and existing VCs Spark Capital and Mangrove Capital.

Badi says the funding will be put toward consolidating its services in Barcelona, Madrid, London, Paris and Rome, and also to open new offices in London.

It says it’s spying a big opportunity there (despite Brexit) on account of the U.K. capital being one of the most expensive for renters in the region.

Two other cities it operates in, Barcelona and Madrid, are similarly in demand with renters (and tourists), with Badi noting the rental market in Spain has grown by 130 percent in the last 10 years and represents 23 percent of the entire real estate industry.

Paris and Rome are also major tourist destinations, and short-term tourist rentals have been widely linked to increased rents for locals.

Badi’s business is positioned to benefit from the tourist-inflated rent trend as it stands, though cities like Barcelona are also looking at what they can do, policy-wise, to curb rising rents and ensure there is affordable and adequate living space for local families, such as via social housing quotas on developers and even buying vacant buildings themselves to convert to housing stock.

But despite increased political attention on the problem of a lack of affordable housing in cities in desirable urban hotspots, it’s highly unlikely that housing pressures are going to let up any time soon.

Badi says the Series B will also be used to expand the size of its team, up to 100 percent, and also to develop additional extra services intended to make life easier for landlords and tenants.

“In the first quarter of 2019, we will work on improving our product to offer possibilities for professionals and private owners to make their experience on Badi far more efficient. Secondly we are redesigning and launching a new booking system around April 2019 to enhance the booking experience to make it more streamlined and user-centric,” it tells us.

Commenting on the funding in a statement, Chi-Hua Chien, co-founder of Goodwater Capital, added: We are extremely excited to partner with Badi in their mission to solve the looming urban housing crisis — there simply aren’t enough homes in cities and housing has become too expensive. Badi provides a unique end-to-end rental platform that builds trust and convenience directly into the customer experience, which has enabled them to unlock thousands of new rooms in cities around the world.”

Emeritus, which develops online courses with universities, raises $40M

The funding streak for educational startups in Asia continues into 2019 after Emeritus, a U.S-Indian company that partners with universities to offer digital courses, landed a $40 million Series C round led by Sequoia India.

The deal includes participation from existing investor Bertelsmann India Investments, and it takes Emeritus — founded in 2010 as offline management program company Eruditus — to around $50 million from investors to date. It also follows notable rounds in December for India-based education companies Byju’s ($540 million) and Toppr ($35 million).

Emeritus is the online branch of Eruditus. It was founded in 2014 as a response to the growth in digital learning. Specifically, it took the core elements of Eruditus — which include helping educational institutions design new curriculums — and applied them to the online space to develop certificate courses and online degrees.

The company has offices in Boston — where it works to develop curriculum content — as well as Dubai, Mexico, Mumbai and Singapore. In total, it has some 350 employees, while its partners include MIT, Columbia, Tuck at Dartmouth, Wharton, UC Berkeley and London Business School.

Today, Emeritus accounts for most of the business’s growth potential and is really the focus of this investment, co-founder and director Ashwin Damera told TechCrunch in an interview.

“We’re helping working professionals who can’t otherwise come to these schools to access high-quality educational content online,” Damera said. “It’s very different from a MOOC [such as Coursera or Udemy], we are a SPOC — small, private, online course.”

For one thing, all Emeritus courses are run in collaboration with universities, they tend to attract older students — because they are master’s degree level — and their completion rates are around 90 percent, according to Damera. Students on a course, he said, are broken down into sections of around 100, and then smaller working groups of around six, much like traditional offline courses.

Emeritus said it will enroll 30,000 students from 80 countries during this current financial year. That’s a figure that Damera wants to grow ten-fold over the next five years.

The company’s strategy to reach that lofty goal revolves around widening its reach to new audiences. A key part of that focus is to expand its existing English and Spanish content libraries, and develop content in Portuguese and Mandarin for the first time. Interestingly, in the case of China, Emeritus is open to a potential acquisition or a joint venture to get a local business up and running.

Right now, Damera said that just 70 percent of students are based overseas. In addition to accommodating additional international languages, he said that global push will mean the company will develop its tech stack to enable greater, more mobile-based content for students.

But, beyond those perhaps obvious areas, Emeritus is examining the potential to offer newer products and courses at more affordable prices. In particular, Damera believes there is a “huge opportunity” to apply itself to bachelor’s degree education, although he plans to expand its master’s degrees first.

TransferWise applying for Brussels license in bid to navigate a ‘no deal’ Brexit

TransferWise, the London-headquartered international money transfer company, is applying for a new licence in Brussels, in a bid to navigate a possible “no deal” Brexit as the U.K. prepares to leave membership of the European Union on March 29 this year.

One of the definite benefits of EU membership, and something that has undoubtedly benefited U.K. fintech startups, is so-called “passporting” of financial services. This sees a certain level of financial regulatory harmony across the EU and means that companies authorised in any EU (or EEA) state can offer their services freely in any other, and with minimal additional authorisation.

Furthermore, these “passports” are the foundation of the EU single market for financial services. Therefore, if the U.K. leaves the single market, which a no deal Brexit and other likely forms of Brexit will result in, then fintech companies in the U.K. that trade in the EU/EEA or have plans to do so will need to obtain new licenses from an EU/EAA country.

In TransferWise’s case, the plan is to open a small, additional satellite office in Brussels, with the company applying to the Belgium regulator, The National Bank of Belgium, for a “Payment Institutions Licence.”

And, in a sense, this isn’t such a big deal for a large company like TransferWise: the money transfer service already has nine offices and employs 1,400 people globally, with 230 posted to its HQ in London.

However, for much smaller startups, the loss of passporting could be prohibitively expensive to mitigate, depending at which stage of growth a company is and how much runway it still has left. For new companies, it makes setting up shop in London’s fintech much less attractive, as regulatory authorisation will need to be duplicated for EU trading.

Meanwhile, it’s notable that TransferWise has chosen to apply to be regulated in Belgium, and not somewhere like Ireland (as, for example Starling Bank has done) or Lithuania (as Revolut has done). It could be argued that both are easier options. Lithuania especially touts itself as the fintech regulator with the lowest barriers and lightest touch.

Cue quote from TransferWise co-founder and CEO Kristo Käärmann: “Brussels is at the heart of all EU affairs, so establishing an office in the city makes great sense for us. The National Bank of Belgium impressed us with its understanding of the payments sector and openness to innovation, while at the same time being a strong and trusted regulator. We’re keen to build a similarly productive relationship with the NBB to the one we already have with the UK’s FCA.”