The 21st Century Gold R...

President Obama has a “high geek quotient” according to his senior technology advisor, Todd Park. Park and U.S. CIO Steven VanRoekel announced five major federal initiatives at TechCrunch Disrupt today, along with a call to entrepreneurs to join in a new gold rush of data that will be released in the coming months. Like how the GPS industry helped pave the way for iPhone apps, Park and VanRoekel hope to catalyze new industries in energy, education, security, and the nonprofit sector with the new open data guidelines. Additionally, they’re opening up an application process for an executive fellows program (apply here ; we’ll have a post soon with more details). The five major initiatives are as follows: 1. Expand the one-click download program of “ Blue Button ” to energy, education, security, and the nonprofit sector. Blue Button was an early open data initiative from Park’s previous job at HHS to allow federal medical recipients (Department of Defense, Veterans, and Medicare) to access their health information in an easy, one-click process for use with all of their doctors. A relevant recent extension of Blue Button for energy, “Green Button,” is already in use by iPhone app makers to give homeowners feedback on their energy use. Additional energy info will be coming soon in the hopes that savvy entrepreneurs can make profitable, socially-beneficial use of the new data. 2. Expand Blue Button itself to private sector insurance companies. Right now, only federal beneficiaries have access to the data, yet many Americans would also like an easy way to track their medical history and share relevant results between doctors. 3. A PayPal for foreign aid, the “20% Campaign.” The federal government has a nasty habit of losing crates of cash and foreign aid while paying security forces and contract workers in Afghanistan and elsewhere. Park and VanRoekel hope the new system can better track the money trail, and therefore reduce waste, fraud, and abuse. One study suggests that India could save billions with electronic transfers , and the savings could be just as significant for the U.S. 4. A small-business friendly process for securing government contracts, named RFP-EZ. Don’t have a DC-bureau or a cushy relationship with a senator? This program aims to give the small guy a shot at big contracts. Park argued in his talk that the government sometimes prefers savvy startups in Silicon Valley, who can save the government a lot more than the typical contractor. 5. MyGov, a user-friendly website to find government services. Currently, government services are organized by government need, not citizen, making many services difficult to find. These initiatives will roll out over the comings months and we’ll update our audience with relevant details.

Quikr, India’s Spin On ...

Quikr , India’s largest online and mobile classifieds portal, announced today that it has raised $32 million in series E financing, led by New York City-based private equity giant Warburg Pincus . The company’s existing investors, which include Matrix Partners, Norwest Venture Partners and eBay, also participated in the funding. The investment is Quikr’s fifth and largest financing to date, following an $8 million raise in May 2011, led by Nokia Growth Partners, Norwest and eBay. The latest capital infusion brings Quikr’s total funding to $46 million. Quikr was known as Kijiji (of www.kijiji.in) until a re-branding in 2008, when the company decided it wanted to adopt a name that more readily reflected ease of use and speed, with a slightly more universal (and vowel-less Web 2.0) feel. Apparently “Kijiji” didn’t inspire that. No idea why. Kidding aside, the company was set squarely on the long-term goal of becoming a fast, easy-to-use consumer-focused platform for the Indian community, and in turn providing it with a resource by which to buy, sell and rent in any category. And, since its launch in 2008 (and its re-branding shortly thereafter), the Mumbai-based startup has grown into a sizable platform, which is now used by some 17 million people and businesses each month — across more than 83 cities — and offers listings on everything from real estate to electronics. Today, more than 50 percent of the Indian population is under the age of 25, which equates to an enormous number of savvy web and mobile adopters. As a result, many see huge opportunity in Indian eCommerce, especially that which is targeted at a younger audience. Unsurprisingly, Silicon Valley investors have been paying more and more attention to the startup ecosystem in India, the growing web penetration, and adoption of mobile devices. What’s more, as demonstrated by this sizable investment in Quikr, not to mention the $40 million round that Bessemer, Nexus and others sank into fast-growing Indian eCommerce and deals company, Snapdeals, American investors aren’t afraid to send their money abroad. For more, check out Quikr at home here.

Facebook’s Prospects In...

Editor’s note:   Benjamin Joffe (@ benjaminjoffe ) is the CEO of the Asia-based digital research & strategy firm +8* (Plus Eight Star), a speaker in 100+ conferences including TEDx, SXSW, LeWeb and Stanford GSB. He is also a founding partner of Cmune (@ cmune ), the Beijing-based makers of Facebook’s largest first-person shooter UberStrike (@ uberstrike ), who just announced its first funding from Atomico. Facebook’s IPO story is a lot about mobile , international growth and Asia. I am not Asian by birth but have been living there for a dozen years and researching key Asian markets since before Facebook was created. Here are my views on Facebook’s prospects. From Facebook’s S-1 filing : “In countries such as Japan, Russia, and South Korea we estimate that we have penetration rates of less than 15%; and in China, where Facebook access is restricted, we have near 0% penetration” While that sounds like a lot of room for growth, let’s look at the reality of it. First, There is no Asia With its variety of languages, religions, GDP, population sizes, web and mobile infrastructures, regulations and incumbent players, ‘Asia’ as a word is little but the remain of a Western concept. The only realistic way to look at Asia is by looking at countries on by one. China Why China first? It is the elephant in the room and still growing fast. Facebook has been blocked there for years, and there is simply no way around the local definition of what constitutes objectionable content. Any web or mobile company who does not self-censor faces shut down if it local, and blocking if not. While I’ve heard local entrepreneurs say it is not worse than dealing with Sarbanes-Oxley, the enforcement is roughly equivalent to how other governments might deal with terrorists, drug dealers, pedophiles, and organized crime (the “four horsemen of Internet apocalypse”), or how mass media deals with touchy topics that could upset the powers that be, or their advertisers. For foreign companies that offer content – published either by themselves or by users – it is a pretty big headache, compounded by the double set of constraints they have to deal with: those at home and those in China. The PR headaches are – as Google experienced – pretty solid. And the question is: is it worth the effort? Assuming content is managed, China is not a walk in the park anyway: it is easily the most competitive market on the planet, simply because there are so many entrepreneurs and so much venture money. Social networks? China already has TWO listed on the stock market: Tencent (worth $53.4 billion) and RenRen (listed in May 2011 on the NYSE and today valued at $2.43 billion). While RenRen called itself “the Facebook of China” and even went IPO a year before its Western cousin, it has a number of key differences with Facebook. Looking at revenue, RenRen is far from being Facebook: they made only $118 million last year, half of it from ads, the other from games. However, setting aside the sale of their stake in the travel portal eLong for $50.9 million, the year would have ended with a net loss. RenRen is overall a very opportunistic company experienced at executing on proven concepts and raising capital. They even launched one of the numerous Groupon adaptations and spent tens of millions operating and promoting it, with limited results so far. Third-party developers hardly make money with RenRen, which even develops and operates its own games. Meanwhile, at Tencent Tencent is an entirely different game: $4.5 billion in revenue in 2011 (that’s 20% more than Facebook at $3.7 billion), $1.6 billion in net profit (62% more than Facebook’s nice and round $1 billion). Tencent operates TWO social networks (or three if you count their IM service QQ as another one). Tencent counted 576.7 million active users on  Qzone , 214.5 million on  Pengyou  and 751.9 million on their IM  QQ . It also runs the largest microblog service in China with 425 million registered user accounts and 67 million daily active accounts, but we won’t talk about it as it brings no significant revenue. The majority of Tencent’s revenue is derived from online games, web games, social games and avatars (‘Internet value-added services’); a mere 7% comes from advertising. Their revenue split is thus vastly different from Facebook’s. Which also means that Facebook’s model is unlikely to deliver good results immediately – and this is provided they can launch and acquire users in China! Japan After some initial resistance due to Facebook’s design (“as long as it’s square and blue!”) and real-name policy, Facebook has been growing well in Japan. The movie “The Social Network” definitely helped get more visibility and make it more mass market. But Facebook’s users there stand at less than 10 million. The benefits of addressing the Japanese market, whose population is less than half the one of the US (128 million people), are: (1) A high GDP/capita (2) Very good IT infrastructure (actually, far better than the US, according to Akamai). Being the second largest online advertising market in the world, it makes sense for Facebook to go after it, and Facebook opened an office there some time ago. Japan also has this interesting fact that it sports two mobile gaming platforms-cum-social-networks GREE and Mobage, by the company DeNA. Those two are on track to over 2 billion dollars each in revenue in 2011 from the Japanese market, with about 25 million registered users each. (GREE’s sales were $795 million in the year to June 2011, while DeNA’s were $1.8 billion – GREE’s sales were $575 million and DeNA’s were $526 million in 1Q2012), with healthy profits. Of course, this did not happen overnight, but it means two things: (1) There is lots of money spent on mobile social games in Japan (2) Facebook could potentially make money there, and in other markets, by learning a thing or two from Japan. South Korea According to Akamai, South Korea has the world’s fastest Internet. You could even argue it had its very own Facebook 10 years ago when Cyworld was launched and pioneered the micro-transaction model on its social network. Unfortunately, had Facebook been born 10 years ago in Korea, it would not have been able to raise enough capital or grow internationally until the glorious moment of its IPO. While Cyworld dominated Korea for a decade, Facebook finally started to register more page views than its local rival sometime last year. Cyworld has been around since 1999 but lost most of its youthful startup spirit after it was acquired by SK Communications in 2003 (for a whopping USD$ 7.14 million- that was all before MySpace boomed and “social network” was even a term). Is there revenue in other Asian markets? Here I can share some first-hand experience from a company I helped co-found named Cmune, the Beijing-based makers of UberStrike , Facebook’s largest first-person shooter. You read that correctly: a cutting-edge free-to-play multiplayer 3-D shooter inside Facebook. Made in China, where Facebook is blocked. Oh, the irony. UberStrike’s user base is global (China excepted) and our number 1 market is the US. You might wonder: why not launch in China first? Well, the revenue share offered by local social networks Tencent and RenRen and the market size for social games were not so motivating. RenRen offers on average 50%, and the revenue (as seen above) is not great, while Tencent used to offer 90/10, unfortunately the 10% was for developers. We now hear it’s a 70/30 split (30% for you), though your mileage may vary. Overall, about a dozen social game companies make real money in China, with over 10 million MAU, but the revenue per user is generally 1/5th to 1/10th of a US user, so better grow in the US first. China aside, and after disappointing results on Cyworld (Korean social platforms do not have their social gaming act together quite yet), we got a few surprises in Asia, which I will try to explain. UberStrike registered many users from the Philippines and Indonesia. Unfortunately, most seem to be kids in Internet cafes and not eager to spend $20 on powerful guns, so they mostly play for free. Maybe when the country will reach over $5,000 GDP/Capita there will be a real market there. On the contrary, Singapore and Malaysian players, while much less numerous, monetize really well. Singapore is easy to explain: English-speaking, wealthy, with great IT infrastructure and lots of credit cards. So despite its rather small population (5 million), it brings valuable revenue. How about Malaysia? Though not often on the “developed countries” list, Malaysia is no third world either: over 28 million people, though Malay dominates in this Muslim country, most educated people speak fluent English regardless of ethnicity. It has a decent GDP/capita, largely concentrated among ethnic Chinese who represent 20% of the population. When I asked Ganesh Kumar Bangah, CEO of the e-payment company MOL, who bought Friendster (yes, Friendster is Malaysian now) before selling back its SNS patents to Facebook for a hefty sum and partnering with them for Facebook Credits distribution (they also own 3.5 million shares of Facebook), 70% of the revenue they collect is from those 20% of ethnic Chinese – still a solid 5 to 6 million people, a similar size to Singapore. Other Asian markets? I have yet to see social gaming or mobile companies making hundreds of millions in Thailand, Vietnam or other emerging markets. Even India – depending where you place your “Asian” frontier – has poor infrastructure, low GDP/capita, numerous languages and poor payment systems, which make it unattractive for app developers to localize fully. Sure, Indonesia is the fourth largest Facebook country with 42 million users (behind US, Brazil and India), but most of them are on mobile (with feature phones) and pay nothing. So How Big is the Potential? China is going to be an uphill battle if it ever happens. Japan might eventually bring in good revenue, but it’s competitive, especially on mobile. Korea can turn into a decent market and competition is weak on the web, but users are not the next billion. Other countries might bring users, but revenue will take years to come, if no local competitor emerges like in China or Russia. As for mobile, the spread of Android ($100 and soon $50 mobiles, not the $500+ iPhone) is going to help gather many across “emerging Asia.” Money-making will only start when Facebook has something to sell on mobile, integrated with proper payment platforms. Even then, let’s keep it real: it is not going to be raining gold because of the hard barrier of GDP/capita.

‘May The VCs Be Ever In...

Dave McClure’s 500 Startups crew is at it again, with another group of companies joining its Accelerator program. The fourth group of startups in the 500 Startups Accelerator follows a lot of the same trends from previous participants, as McClure & Co. continue to bet big on female entrepreneurs and international startups. There’s also the continued focus on revenue-first startups, rather than those which need to hit “critical mass” before monetizing. But before I get into all that, check out this video . Seriously. Watch it. This story will still be here when you’re done: Ok, so now that you’ve gotten your fill of 500 Startups’ hilarious take on the Hunger Games , let’s talk about the companies themselves. Of the 27 startups in the program, seven have at least one woman founder, and more than half of the startups are from outside Silicon Valley. Of those, 12 are from outside the U.S., hailing from locations such as Australia, Brazil, Canada, China, India, Italy, Japan, Mexico, the Philippines, Slovenia, and the U.K. Others come from U.S. cities that include Austin, Chicago, New York City, and Washington, D.C. Putting investment in non-Valley startups isn’t the only somewhat contrarian move from this Silicon Valley-based incubator. The current class also has a bunch of startups focused on unpopular market segments like parenting and education, small- and medium-sized businesses, and subscription e-commerce. That’s because big wins on companies like Instagram are rare, and McClure’s not trying to hit a home run every time he comes up to the plate. Instead, he’s focused on singles and doubles. That means helping along startups that might not be sexy, but bring in revenue. So what do the participating startups get? As with previous classes, all 500 Startups Accelerator participants get investment of $25,000 to $250,000 in exchange for five percent of equity. They also get some swank office space, access to hundreds of mentors, help in marketing, business development, administrative stuff… And, of course, help with future fundraising. The Accelerator actually kicked off on April 2, so the program is already well underway, with demo days scheduled for July 17-18 in Mountain View, and July 23 in New York City. In the meantime, check out the next 27 companies to participate in this class: ActivityHero – Yelp for kids activities Bluefields – Intelligently organizing recreational sports Bombfell – A monthly subscription service for men’s clothing CardFlick – Create and share beautiful digital cards Chalkable – An app store for school and a platform to make those apps work Fontacto – Virtual phone system for entrepreneurs and SMBs in Mexico & Latin America Groupiter – Adds group conversations to the files you share on Dropbox Happy Inspector – An app to revolutionize inspections Ingresse – Brazil’s first social ticketing company Monogram – Flipboard for fashion PocketOffice – An app to help grow your small business from your smartphone PublikDemand – Helps consumers launch viral complaints against big companies ReClipIt – Social catalog for coupon and deal lovers Sqoot – Provides a daily deal API, like Twilio for local deals Storypanda – Next-gen interactive iPad kids books Teamly – Helps teams by stay focused, collaborate better, and celebrate their achievements TeliportMe – Lets users create high-res panoramas anywhere TenderTree – Helps families find a caregiver for the elderly or disabled TieSociety – A try-before-you-buy subscription service for men’s neckwear Timbuktu Labs – An iPad magazine for you and your children TokyoOtakuMode – A place to share Japanese otaku culture, like manga and anime Toshl – Super easy personal finance manager and bank data aggregator TwitMusic – Helps musicians effectively share & promote their music on Twitter UmbaBox – A monthly subscription service for discovering handmade women’s goods Uscoop – A social commerce platform for young style influencers Wanderable – Honeymoon registries for couples who want experiences Yogome – Fun & educational games for kids aged 6-12 on the iPhone & iPad

Internet Identity Syste...

With the rise of startups building on top of the collaborative consumption model – that is, where users are buying from and selling directly to other users – there’s a growing need for some sort of system to help verify user identities. Although there are others quietly working in this space, today the U.K.-based startup Miicard , which is building an identity verification service, has moved a step ahead. The company has just completed its second seed funding round, raising $2.5 million from New Wave Ventures, IQ Capital and Par Equity. MiiCard had previously raised $.75 million back in September, also from IQ and Par Equity. The company says it aims to use the additional funding to move into the U.S. market. Currently, users register their identities with MiiCard’s service by providing access to a bank account – a requirement which still makes some nervous. Are banking details safe in the hands of an early-stage startup, you may ask? MiiCard says that it uses banking info to verify, but focuses on validating a user as a unique individual, verifying through a link to their online account. That proves they actually have access to that online account, and aren’t just providing banking account details which could be stolen. To be clear, MiiCard  doesn’t ask for your bank account number, and oddly enough, that’s something that seems to worry some folks, even though it’s info that many people and companies would know. (Hint: it’s on your checks…Besides, aren’t those the same people who are scared to shop online, but have no problem handing their credit card over to a starving college student working three shifts at their local diner to pay their bills?) Oh, and MiiCard’s service is also VeriSign Trusted and TRUSTe certified, if that makes you feel better about the security precautions in place. And it runs its tech on top of Yodlee , which powers solutions for seven of the top ten banks. (OK, that helps). Once registered, you can begin attaching other accounts to your profile, like your social networking accounts, for example. You can then use your MiiCard where you see fit – on your eBay shop, perhaps, or your Craigslist posting. To date, no banks have yet signed up in partnership with the system, but the company says it’s in negotiations with several entities. The system currently works in North America, the U.K., South Africa, India, Australia, and New Zealand. Last week, MiiCard launched the first third-party Twitter validation system , which allows anyone – not just celebs and public figures who get special attention from Twitter – to verify their account. After verification, the idea is that you could place the link to your MiiCard in Twitter’s profile section. Of course, the problem the startup now has to overcome are all the people going WTF is a MiiCard? Maybe the additional funding will help. MiiCard was founded in September 2011 by Canadian entrepreneur James Varga, who previously worked with Centrica Business Services, Thomas Cook and Sky Sports.