Investments

Investments Trickle In And Kontakt.io Picks Up Another $5M

The investment pond was more or less tranquil this week, with only around $118M in total activity exciting the waters. And though most investors have been more focused on the latest round of earnings, Polish beacon firm Kontakt.io managed to pick up another $5M to get their hardware and software platform out there.

Depending on one’s orientation, beacon technology is either a source of great promise or a never-ending source of frustration. 

The “great promise argument is straightforward enough. Low power and easy to set up and install, beacon tech used correctly gives physical retailers potentially very lucrative access to a constant stream of communication with their customers. 

But then the “great frustration argument is also pretty clear. For all of that promise and potential, beacons just haven’t quite found that killer use case that makes them an indispensible part of a customers shopping experience – or a merchant’s customer acquisition plan.

Plus, beacons have something of a PR problem among consumers. As often as they are lauded for providing someone with a useful deal, coupon or information – they are derided for the “spamming” that leaves consumers actively avoiding busy urban shopping malls for fear their phone will become a conduit to the push notification apocalypse.

But though it can feel like we’ve been talking about beacons forever among payments and commerce peeps, the reality is beacons are actually still a pretty new kid on the technology block – and perhaps one that is still figuring out the best use cases for itself. 

Proximity-based marketing for retailers may have been a first use – and the obvious one that sprang to mind  — but as beacons are evolving to the marketplace in which they will live, they are quickly evolving beyond that use.

Some of these are consumer facing – interior mapping or as an educational tool used to highlight points of interest. Other applications will never get to bask directly in the sunshine of consumer love, like, for example, the use of beacon tech in eCommerce warehouses to make tracking goods easier and more efficient – though they will likely play a big part of making sure consumers are keeping that loving feeling.

And that remaining glimmer of uncertainty about what exactly the shape of things to come for beacon tech will be is what ultimately brought Polish beacon technology and software firm Kontakt.io to the marketplace.

“The problem with beacons for the last few years is everyone says ‘what will beacons be used for?’ But this is a question that is like asking what are cars used for. The simple answer is driving you know – but obviously there is a lot more to it than that,” Kontakt.io CEO Szymon Niemczura noted in an email to PYMNTS.

So Kontakt.io is working to build the beacons – both the hardware itself and a software platform that supports it – that will work for whatever the developer involved wants to use them for. 

“With our API and SDK for iOS and Android. we tell our partners that they are going to show us the killer use case for beacons,” Niemczura said.

Kontakt.io is, of course, not the only player interested in this particular use case. Based in Krakow – a section of Poland known affectionately as Beacon Valley – Kontakt.io is literally dealing with direct competition in its own backyard from rival beacon startup, Estimote. But the competition isn’t killing the up and coming firm so far, as it lists Google, Facebook, Apple, and Siemens as customers. 

And, the firm has had a fairly good run lately of snapping up investor dollars – with a fresh $5 million infusion in a round led by Prague-based Credo Ventures.

“Limiting beacons just to this particular use case is shortsighted since there is so much more to it,” noted Credo partner Jan Habermann in an interview with TechCrunch.

“For me, the indoor navigation use-case, providing relevant context to the user is great, but for consumers I guess the real killer app will emerge once there are more beacons deployed and the infrastructure is available for third-party providers.”

Habermann’s sentiments echoed those of Max Niederhofer, a partner at Sunstone Capital who invested $2 million in Kontakt.io about six months ago.

“We think this is a rapidly growing, potentially very large market with high margins, in which you can build a really meaningful business,” says Niederhofer, citing a recent ABI Research report that estimates within five years we’ll see shipments of dedicated beacon hardware reach over 60 million devices. “To some extent I see this as an infrastructure build-out play, where beacons are the routers and pipes of a new network infrastructure on which we’ll see some very interesting applications.”

And those interesting applications are Kontakt.io’s new focus now that the funding has been secured. Apart from looking to expand and develop beacon use cases, the firm has also confirmed they will be continuing to push greater international advancements.

Investments for the week ended 2-12-16

There was barely a ripple in the investment pond this past week, with only $118.4 million in activity, and almost all of that in FinTech, per usual. With much investor attention on earnings season, the movement in private equity and venture capital was less than anemic — we’re not drawing out any cause and effect but rather remarking on divergent trends, in this case, activity vs. less activity.

Looking down the roster of deals, WorldRemit said last week that it has raised $45 million in debt tied to its mobile wallets expansion, with the funding coming from TriplePoint Venture Growth BDC Corp. and Silicon Valley Bank. The company has thus far raised $192 million.

A bit down the line comes Riskified, which raised $25 million in a growth round, in turn led by Qumra Capital. The company, based in Israel, offers technology that reviews, approves and guarantees transactions, and total funds raised by the company come to $31 million.

Following are the Top 5 deals of week, with none breaking a triple-digit barrier:

So with little on the docket tied to individual transactions, it’s time to step back from the small details and look at the bigger picture in the payments investment space. With one month through and another roughly halfway through, we’re running at a little less than 10 percent so far in February than had been seen through the month of January, where, as reported in earlier issues of the IT, a few large deals dominated in traditional finance and banking – and this time around, the United States and Europe have dominated.

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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