How Zalando founder Robert Gentz built a €1.8B company in 6 years

This post is by Hannah Loeffler, VentureVillage from VentureBeat

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How Zalando founder Robert Gentz built a €1.8B company in 6 years

Above: Robert Gentz of Zalando.

Image Credit: VentureVillage

The story of the rise of the business economist from Düsseldorf Robert Gentz to becoming the boss of the e-commerce success Zalando starts on a beach in Guatemala. Gentz was vacationing there at the beginning of 2007 and read in a newspaper that StudiVZ was sold to Holtzbrinck Publishers for a giant €85 million. “I found it fascinating,” Gentz later recalled. He asked himself, “How can a website be so valuable? What is valuable about it?”

Gentz could not forget the deal. He wanted to found his own internet company. His situation could hardly be better: Gentz was 23 at the time with a degree from the WHU in his pocket along with internships at Boston Consulting Group and Morgan Stanley. He also had a love for Latin America, which he shared with his friend from university David Schneider. A few months later they founded their first startup in Monterrey, Mexico, where Gentz studied for one semester. It was called Unibicate, a social network for universities in Mexico, Argentina and Chile.

As well-connected WHU graduates, they did not have any difficultly finding investors. They even went to Oliver Samwer who responded to their idea with: “Ridiculous!” And Samwer was right. Programmers for Unibicate were hard to find and the money from investors became scarce. In 2008, Robert Gentz and David Schneider ended the project. At this point, both were living for eight months with no salary, as Gentz told author Hagen Seidel years later.

The failed founders were so broke that they did not have enough money to buy a plane ticket back to Europe. Once again, they turned to Oliver Samwer – and this time with success. Samwer paid their return flight for them. In return, they both worked for many months at his price comparison portal tarifas24.

A short time later Gentz and Schneider were already looking for their next idea. They did not let themselves be discouraged by their failure. Instead, they claimed to have learned from it. “It was very clear to me that we should not try to found another social network,” explains Gentz. The model was “hardly predictable and difficult to scale.”

They began their second attempt back in Germany: an online shoe store that was modeled after Zappos in the U.S., which was later acquired by Amazon. This time Samwer invested: Alexander, the youngest of the three brothers, participated at the start with €50,000 and provided them with programmers from Rocket Internet in Berlin.

They tested their model with an online shop for flip-flops. Gentz looked mainly after online marketing and customer support. “We were so always so happy when a customer would call,” recalls Gentz. “We could then ask the customer what works well on the website and what does not.” In the fall of 2008, they moved into their first office on Torstrasse in Berlin. Zalando was officially founded and the success story began.

Today, five and a half years later, Robert Gentz, David Schneider and Rubin Ritter, who joined in 2010, are still managing the company. Zalando today, however, has little in common with the startup that began in 2008. The company now employs over 5,000 employees and had €1.8 billion in turnover in 2013 – up by more than 50%. Financial experts believe that we can expect an IPO either at the end of 2014 or latest by early 2015.

Is a startup founder also the right leader for the management of a corporation? Robert Gentz is convinced, “We have done everything ourselves, and we still know how the process works.” He believes that this is a huge benefit “in comparison to big corporations that come from the outside of the company’s management.”

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Airbnb agrees to collect 14% hotel tax in San Francisco, as New York negotiations drag on

This post is by Jeff John Roberts from Gigaom

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Airbnb insists it’s not in the hotel business, but that won’t stop it from collecting hotel tax. In a ground-breaking announcement, the company on Monday declared it will begin collecting taxes on behalf of its hosts in San Francisco and Portland.

The new policy could help Airbnb make peace with city officials, many of whom are hostile to its “sharing economy” business model. The tax policy will also let Airbnb’s network of hosts, who rent out their homes for short periods of time, gain firm legal footing.

Airbnb announced its tax plans in a company blog post, stating that it didn’t agree with the tax laws, but that “we want to help our hosts follow the rules. It’s good for the government officials who won’t have to identify hosts and collect the taxes themselves: we’ll do the work for them.”

Airbnb says it’s working on operational details but, in practice, the news means Airbnb is poised to begin collecting San Francisco’s 14% hotel tax this summer. The blog post also notes that Airbnb, which may be planning an IPO later this year, is also starting tax collection in Portland.

Meanwhile, the company is still in a regulatory tangle in New York, where the state’s attorney general issued a subpoena last year demanding the identity of its 15,000 or so New York-area hosts. Airbnb is fighting the subpoena in court but, as the Wall Street Journal reported last week, the lawsuit may be on ice as the sides try to reach an agreement.

Last fall, Airbnb offered New York an olive branch of sorts by proposing occupancy taxes and a hotline system to report bad guests. More recently, the Journal reports the company is trying a new tack by telling new mayor Bill de Blasio that taxes from Airbnb could raise $21 million for the city’s homeless shelter.

More broadly, the tax discussions show how the lofty language of the “sharing economy,” often employed by companies like Airbnb and Uber, is starting to meld with the more traditional economy.



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Introducing CrunchCoin

This post is by Alex Wilhelm from TechCrunch

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Technology never sleeps. You need to pivot, expand, re-pivot, focus, unfocus, refocus and unrefocuspivot. With that, we are proud to announce TechCrunch’s greatest endeavor since our CrunchPad. Yes. A digital currency that will change consumer lives more than Netscape and Windows 3.1. Read More

Industrial Toys Raises $5M From Accel To Build Tablet Games For Serious Players

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Industrial Toys, the tablet and mobile gaming studio led by Alex Seropian (founder of Bungie Studios, creators of the enormously successful Halo franchise), is announcing that it has raised a $5 million Series A from Accel Partners. Accel’s Vasant Natarajan, who’s joining the Industrial Toys board, suggested that when there’s “a big platform shift” in gaming, it creates new opportunities to build… Read More

Imprivata, a provider of health IT security services, files for IPO

This post is by Dylan Tweney from VentureBeat

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Imprivata, a provider of health IT security services, files for IPO

Above: A nurse demonstrates Imprivata’s single-sign on with a proximity card reader attached to a nursing station laptop.

Image Credit: Imprivata video

Startups that provide IT services to health care companies continue to thrive.

The latest company to cash in on that trend is Imprivata, which just announced plans to make an initial public offering of stock on the NYSE. Imprivata stands to raise $115 million in the IPO.

Imprivata’s products include a single sign-on tool, Imprivata OneSign, for managing access to health care systems. The company also offers a workflow tool and tools for secure communications, including texting securely. With OneSign, instead of logging on with a username and password, clinicians can log on to their computer systems using fingerprint readers, proximity cards, smartcards, or tokens. The company claims, in a filing with the SEC, that some of its customers have seen their health care workers save 45 minutes per shift thanks to its technology.

Imprivata provides services to more than 900 health care organizations in 18 countries, representing 2.6 million people using its products, according to the company’s web site. But while health care is the company’s main focus, it says that an additional 400 non-health care organizations, representing 740,000 workers, also use its single sign-on solution, including financial services and government agencies.

It integrates with most major electronic medical record systems (EMRs), such as Epic, Allscripts, Siemens, Meditech, and McKesson; as well as with IT vendors such as Citrix, VMware, Dell, and HP. It booked $71 million in sales for 2013, for a net loss of about $10.5 million.

The company is based in Lexington, Mass., and was founded in 2001. It has raised $23.9 million to date, most recently with a $15 million round led by SAP Ventures in 2008.

Imprivata qualifies as an “emerging growth company” under the JOBS Act, which means that, until it reaches $1 billion in annual revenue, it will have reduced reporting requirements relative to other public companies.

View Imprivata’s S-1 filing here.



Harvard-Backed Experfy Wants To Create A McKinsey In The Cloud For Big Data Talent

This post is by Pankaj Mishra from TechCrunch

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There is a scramble to find the right big data talent, especially for short-term data projects currently being outsourced to big consulting companies such as Accenture, Deloitte apart from several niche suppliers. According to this McKinsey analysis, the U.S. alone faces a shortage of 140,000 to 190,000 people with analytical expertise and 1.5 million managers and analysts with the skills to… Read More

The FBI is investigating high-speed Wall Street traders for possible insider dealing

This post is by Rich McCormick from The Verge - All Posts

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Two weeks ago, New York Attorney General Eric Schneiderman expressed concerns about the anti-competitive practices of high-speed stock market trading firms, saying that such companies had “valuable advantages” that gave them a “leg up on the rest of the market.” Now The Wall Street Journal reports that the FBI is in the midst of an investigation into whether such high-speed trading firms have access to information that isn’t available to other traders.

An FBI spokesperson said the bureau launched its investigation — known as the High-Speed Trading Initiative — a year ago. The investigation is looking for violations of insider trading laws in a variety of trading activities, including whether high-speed traders have access to unfair…

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Jawbone Snaps Up

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Looks like instead of being acquired, wrist and speaker hardware company Jawbone is doing some acquiring, scooping up social and personalized music playlist app, according to a well-placed source. Last time we heard something about Jawbone, it had closed a new financing round of about $250 million at around a $3 billion valuation. Kara Swisher and Re/code had reported a similar… Read More

Airbnb Says It Will Start Collecting Hotel Taxes In San Francisco

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Airbnb said it will start collecting San Francisco’s 14 percent hotel tax on behalf of hosts today. The move counters critics who’ve claimed that the company has willfully dodged taxes to get ahead of traditional competitors in the hotel industry. But as Airbnb has grown up and is now poised to command a possible $10 billion valuation from private investors, they’ve said they… Read More

WWE Network stress testing this week leading in to WrestleMania 30

This post is by Andru Edwards from Gear Live

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<img alt="WrestleMania 30 wwe network" src="" style="width: 575px; height: 291px; border-width: 1px; border-style: solid;" /></p>

The WWE Network, announced at <a href="">CES 2014</a>, went <a href="">live on February 24th</a>--<a href="">and it crashed hard</a>. The company has had about 5 weeks to fix all the issues (and not all have been fixed as of press time,) and stress test the MLBAM servers in anticipation of what many believe to be the "make or break" event for the unique live streaming service that&#39;s paired with a vast on-demand content vault.

On April 6th, WWE presents WrestleMania XXX, which will be the very first live pay-per-view event that is broadcast on the WWE Network. It just so happens to also be the biggest event of the year for pro wrestling, as WrestleMania is seen as the Super Bowl of wrestling. The company has been broadcasting live programming several times per week in order to get a handle on load, but WrestleMania is a beast all its own. To prepare, the WWE Network will be doing daily live shows this week, along with a two-hour pre-show before WrestleMania begins. We&#39;ve got the full schedule of special events that&#39;ll air on the WWE Network this week, below.

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    <a href="">Continue reading WWE Network stress testing this week leading in to WrestleMania 30</a>

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WWE Network stress testing this week leading in to WrestleMania 30 originally appeared on Gear Live on Mon, March 31, 2014 – 5:46:53

Microsoft announces different prices for different locations in its cloud

This post is by Jordan Novet from VentureBeat

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Microsoft announces different prices for different locations in its cloud
Image Credit: john Robertson/Flickr

Just as it promised, Microsoft is lowering prices for its Azure public cloud yet again — following price cuts at its main competitor, Amazon Web Services.

The idea is to match prices and stay comparable with Amazon’s cloud, in accord with a commitment Microsoft made last year.

But that’s not news so much as Microsoft trying to make its cloud stand out a bit more, by doing something very, well, Microsoft.

Rather than charging the same amount of money for all infrastructure in its Azure cloud data center footprint, today Microsoft announced that each individual location will get its own prices. It’s not that surprising, given Microsoft’s predilection for maddeningly complicated lists of individual prices for products and services.

Amazon’s cloud prices are already broken out by region, but it somehow just makes sense for Microsoft to do that.

Azure general manager Steven Martin writes in the blog post about today’s news:

We recognize that some workloads require specific placement while others are not as dependent on location. This approach will help customers save additional money for workloads that have deployment flexibility.

Microsoft maintains regions of data centers in 10 locations — including in Virginia, California, and Japan’s Osaka prefecture — and five more regions are on the way, including two in China.

For some kinds of instances, such as slices of physical servers in Microsoft data centers, Microsoft’s new prices fall below Amazon’s.

Google made a splash in the public cloud last week by cutting prices for lots of services, and it introduced a new system for offering discounted prices after people use the cloud for a certain amount of time in a given month.

While Microsoft’s price cuts aren’t aimed at those, should the Google cloud become more popular, Microsoft might want to refocus its cutting strategy. But until then, for Microsoft the persona non grata is Amazon.

Microsoft last announced lower cloud prices in January.

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iOS App Store Prices To Increase In Australia, India, Indonesia, Turkey and South Africa

This post is by Catherine Shu from TechCrunch

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Apple has sent out an email notifying customers of App Store price changes in certain countries within the next 24 hours. The company said that it will raise retail rates for the following currencies because of foreign exchange rate changes: Australian dollar, Indian rupee, Indonesian rupiah, Turkish lira, and South African rand. On the other hand, retail prices for Israeli New Shekels and some… Read More

Data Collective raises $125M in its third fund for big data startups

This post is by Kia Kokalitcheva from VentureBeat

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Data Collective raises $125M in its third fund for big data startups
Image Credit: Pedro Lozano

Big data and data science are so sexy right now that Data Collective just raised a new fund, to the tune of $125 million, to specifically invest in companies in that space.

The Form D filed to the U.S. Securities and Exchanges Commission today provides little detail other than the size of the fund and that it’s Data Collective’s third.

While other VC firms have been creating funds dedicated to big data, Data Collective is focused full-time on investing in big data and data science companies.

Matt Ocko, one of the managing partners, has been an investor and adviser to startups for 30 years, and has invested in Zynga, BranchOut, and CrowdMob. Zack Bogue, the other half of the management team, is an analytics expert, an early investor in Square, and the co-founder of San Francisco-based coworking space, Founders Den.

The firm also has 35 “equity partners” with a significant share in the investment, and are all technical types (data scientists, CTOs, chief scientists) from well respected companies.

“What [the equity partners] all have in common is the opportunity to work collectively with each other and be part of a unified elite club,” Bogue said when we caught up with him at the first fund’s launch.

“Zack and I have been at this for a long time and were evangelizing Big Data when no one knew what it meant,” he added.

The firm tends to invest in companies at the seed or first round stage, and some of Data Collective’s previous investments include real-estate marketplace RealCrowd, agriculture tech company Blue River Technology, communications technology startup Layer, intelligent learning platform Declara, and database provide MemSQL among many others.


Bitcoin prices plummet after U.S. IRS ruling, rumors of Chinese trade block

This post is by Hanqing Chen from VentureBeat

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Bitcoin prices plummet after U.S. IRS ruling, rumors of Chinese trade block
Image Credit: Flickr

The price of the Bitcoin is at its lowest in almost five months, after two major challenges to its legitimacy.

The first challenge struck last Tuesday, when the U.S. Internal Revenue Service ruled that Bitcoin must be treated legally as property, not currency.

The IRS ruling may stem the spread of Bitcoin in the U.S., according to analysts, because the ruling means any gains investors see from the appreciation of Bitcoin are taxable.

New York tax attorney Jeffrey Hochberg told CNNMoney that the going rate of the currency fluctuates too widely, and would create an “accounting nightmare” for taxpayers.

Meanwhile, rumors also surfaced last Thursday suggesting that the People’s Bank of China, China’s central bank, would block trading of the Bitcoin.

The PBOC has yet to issue an official response to the rumors, keeping Bitcoin prices low through today. According to the CoinDesk USD Bitcoin Price Index, the price of the cryptocurrency tumbled from $580 on March 26 to today’s low of $442, around a 31% drop.


Above: Graph of the Coindesk Bitcoin Price Index for the past 7 days.

The last time the price of the Bitcoin was below $450 was in mid-November:

coindesk-bpi-chart (1)

Above: Coindesk BPI from October 2013 to March 31, 2014.

The heavy silence from the PBOC this week is a stark contrast to PBOC officials’ swift response to a similar rumor just two weeks ago. On March 21, a false post in a financial news feed on China’s Sina Weibo microblogging platform suggested that China’s central bank was going to block the trading of Bitcoin beginning in mid-April.

At that time, PBOC officials pointed users to a regulation that began in December 2013 banning Chinese financial institutions from using the currency. The PBOC’s regulation warned banks and payment companies against giving pricing in Bitcoin, buying or selling the virtual currency, or even insuring Bitcoin-linked products, according to the bank’s website.

VentureBeat has reached out to the PBOC for comment and will update when we hear back.

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The Always-Ready Go Bag

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The Always-Ready Go Bag

"Always be prepared," the motto of the boy scouts, isn’t a bad one to live by. You may not need a backup battery most days, or multiple USB flash drives, but they don’t take up much space and, when needed, they’re indispensable. Reader Brian Geraghty assembled a go bag with a GRID-IT stuffed full with preparation.

Read more…


Funding Daily: Two times $700M, and then some

This post is by J. O'Dell from VentureBeat

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Funding Daily: Two times $700M, and then some
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Get all the tech funding news of the day delivered straight to your mailbox! Sign up for Funding Daily and never miss a deal.

Here are the day’s funding stories:

Cloudera takes $740M bag of money from Intel

We knew Intel was giving big data company Cloudera lots of money — in fact, we had a scoop on that last week — but we didn’t know it was going to be this much. $740 million? Sheesh. Today Cloudera revealed in a press release a massive $900 million funding round, including both the $160 million pile announced earlier this month and Intel’s investment. Get the full story on VentureBeat.

Intime Retail Group takes $692M from Alibaba

E-commerce giant Alibaba is perilously close to hacking the “e” off of ”e-commerce.” Alibaba Group, one of the largest online retail operations in the world, has decided to invest $692 million in Chinese department store chain Intime Retail Group, the company announced today. The Internet titan aims to capitalize on its vast knowledge and experience of shopping in cyberspace to improve the physical retail experience and boost sales across Intime’s 36 stores in China. Read more on VentureBeat.

Crossbar scores $25M

The race is on to develop new types of memory chips that can keep up with our dual desires for more data storage and tinier gadgets. Crossbar, a company that has developed custom Resistive RAM technology, is one such entry in this latest memory market. The company announced today that it has raised $25 million in a third round of funding, bringing its total funding to $50 million. Read more on VentureBeat.

ClearStory Data takes $21M

You’re hip. You’re with it. You know that if you want to a holistic sense of what’s going on in your company, you need to consult multiple types of data, not just one or two. So a basic data visualization tool might not cut it. What you could try is something like ClearStory Data, a startup that’s been trying to simplify the process of querying and analyzing lots of different kinds of information. Read more on VentureBeat.

Kitchensurfing gets $15M

I ate the best meal of my life at New York’s world-famous Eleven Madison Park restaurant. Now I can recreate that gustatory experience ten feet from where I sleep. Through Kitchensurfing, an online marketplace for private chefs, I can pay a former Eleven Madison Park chef to come to my measly little kitchen and whip up a culinary masterpiece. Read more on VentureBeat.

Handshake raises $8M

With $8 million in the bank from Emergence Capital, New York-based Handshake is expanding beyond its original focus — mobile order management for sales reps — to make wholesale buying and selling feel more like shopping online. According to Handshake chief executive Glen Coates, the buying and selling process between brands and retail stores is begging for innovation. Read more on VentureBeat.

Stealthy Citizen.VC reports $4M

Mysterious company Citizen.VC, which only has a landing webpage thus far, might be pulling back the curtains soon. We just spotted the Form D the company just filed to the U.S. Securities and Exchange Commission, reporting that it has raise $4 million in funding so far. The form reveals that the company is based in Palo Alto, Calif., is hoping for a total round of $12 million, and has four investors signed up at time of filing. Read more on VentureBeat.


Funko releases The Walking Dead bobble heads

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        <p style="text-align: center;">
<a href=";camp=1789&amp;creative=390957&amp;field-keywords=funko%20pop%20walking%20dead&amp;linkCode=ur2&amp;sprefix=funko%20%2Caps%2C231&amp;tag=amazon13-20&amp;url=search-alias%3Daps"><img alt="walking-dead-daryl-bobble-head" src="" style="width: 287px; height: 289px;" /></a>&nbsp;<a href=";camp=1789&amp;creative=390957&amp;field-keywords=funko%20pop%20walking%20dead&amp;linkCode=ur2&amp;sprefix=funko%20%2Caps%2C231&amp;tag=amazon13-20&amp;url=search-alias%3Daps"><img alt="Merle Zombie bobble head" src="" style="width: 287px; height: 285px;" /></a></p>

We&#39;re huge fans of The Walking Dead, and we already love Funko (found in our <a href="">Loot Crate Launch box giveaway!</a>), so now that they&#39;re teaming up to release a new series of Walking Dead bobble heads, well...we&#39;re ready to adorn our desks with this new hotness. Characters include Rick Grimes, Michonne, early Daryl Dixon (as well as current, longer-hair Daryl,) and a couple of zombies. Zombie Merle and a Zombie RV Walker (with the screwdriver lodged in his eye that Andrea put there.)

You can <a href=";camp=1789&amp;creative=390957&amp;field-keywords=funko%20pop%20walking%20dead&amp;linkCode=ur2&amp;sprefix=funko%20%2Caps%2C231&amp;tag=amazon13-20&amp;url=search-alias%3Daps">pick up the Funko Walking Dead Wobblers now</a>!

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Funko releases The Walking Dead bobble heads originally appeared on Gear Live on Mon, March 31, 2014 – 3:38:18

Email Marketer Declines To Pay Its DDoS Attacker 1.8 Bitcoin Bribe To Prevent Repeat Attack — Seriously

This post is by Alex Wilhelm from TechCrunch

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In about two hours if threats are carried out, email marketing service Mad Mimi (CrunchBase) will be hit with another denial-of-service attack (DDoS) similar to what it endured yesterday, which made its service unavailable for a period of time. The attacker then demanded 1.8 bitcoin as ransom to prevent another assault. Mad Mimi declined to pay the sum, and so, at some time around 6 p.m. PDT,… Read More