SalesGossip, a UK site that offers members exclusive access to fashion and beauty product sales, events and promotions, has closed a second angel round — the majority of which is effectively follow-on funding from existing investors. It’s raised £600,000 in new funding, adding to its initial angel round of £250,000 in late 2012.
Investors include Sean Phelan and Audrey Mandela (co-founders of Multimap.com, which was acquired by Microsoft in 2007), Andrew Grahame (co-founder of Mr and Mrs Smith), Mapamundi (a Spanish investment network), Colin Rushmer (MD of Global Reach Investments), Robin McIlvenny (Partner at Ptarmigan Capital Limited), and Stephen Bullock.
Founded in September 2011 by Zabetta Camilleri and Emilio Sanz, SalesGossip aims to solve a pain-point for fashion retailers — both offline and online — which is the difficulty they have with promoting and shifting discount stock and consumers’ lack of knowledge of when and where sales are taking place.
It does this by alerting members to discounts via personalised emails and SalesGossip’s desktop and mobile sites, based on their buying preferences. The idea is to give members the very first access to pop-up sales, flash sales, sample sales, seasonal reductions and discount codes before they are announced to the general public
“It’s that inside info that sets us apart from other fashion news sites. By becoming a member, you’ve got the inside track to your favourite stores’ sales and offers,” co-founder and CEO Zabetta Camilleri told me in late 2012.
SalesGossip claims 300,000 registered subscribers to its service, and says it features 900 brands (roughly 90% of the UK fashion & beauty retail sector, apparently). These include department stores such as John Lewis, M&S, Liberty and House of Fraser, online retailer Amazon, fashion stores Accessorize, Armani, Joseph, Net-a-Porter, Banana Republic, J Crew and Uniqlo, children and parenting stores Isabella Oliver, Petit Bateaux and Mothercare, as well as beauty stores such as L’Ocittane, Liz Earle, Boots and Clarins.
Notably, however, SalesGossip still doesn’t have native mobile apps (for iOS and Android, for example). It may have plugged the gap a little last year with a dedicated mobile web version of the site, including GPS support to locate local brick ‘n’ mortar sales, but the lack of an app store presence feels like a gaping omission.
To that end, the UK startups is talking up native apps as next on the roadmap, along with in-store promotions tracking and better data-mining to fine-tune the personalisation aspect of its sales alerts.
SalesGossip’s competitors would seem to fall into two camps. Flash sales sites, such as Cocosa et. al. which offer bulk discounted stock for sale online. There’s also some overlap with fashion blogs and news sites. In fact, SalesGossip places quite a lot of emphasis on editorial, something that it thinks, when mixed in with sales alerts, gives it an edge.
As we have been writing, startup accelerators in India’s nascent ecosystem are beginning to seek more mature, late stage companies to work with. The latest to join this trend is Microsoft Ventures, which announced its Summer 2014 batch for the Indian accelerator today. Of the 16 startups selected, six will be part of Microsoft’s new Accelerator Plus program, aimed at helping companies who already have customer traction and are more mature.
“This program is for more mature companies which are closer to VC funding. Most of them have made significant progress, so much so that the startup ecosystem is taking their eyes off them,” Ravi Narayan, director of Microsoft Ventures said in a statement.
Microsoft Ventures in India has graduated 35 startups since August 2012, and about 80% of them have been funded so far. Two graduates, Adepto and Plustxt, have been acquired.
As we reported last week, accelerators are trying to figure out ways to get involved with more fundable, mature startups. This is because despite more money chasing early ideas, the Series A crunch seems to be even more real for those graduating from the accelerators. Accel India scanned around 1,000 companies across 62 different accelerators and incubators in India over last few years, and the results speak for themselves — only 30 of them went on to receive Series A funding.
Mukund Mohan, director of Microsoft Ventures had told me last time that the Y Combinator model won’t work in India because it takes longer than just $20,000 and 4 months. Even globally, Y Combinator and Tech Stars are the only two successful accelerators that provide any meaningful exits for company founders.
Inside San Francisco’s Davies Symphony Hall was a packed hall with hundreds of tech’s well-to-do in ties, slacks and cocktail dresses for the so-bad-it’s-good awards show, The Crunchies.
Outside, there were about 50 protesters, beating drums and awarding toilet plungers as trophies to activists posing as Ron “The Con” Conway and Marissa Mayer for “The Crappies,” their own unofficial version of the event.
While both sides called for solutions, it seemed like the activists and the tech community were largely talking past each other, not with each other.
Here’s what each had to say:
The Tech Side
Ron Conway, the hyper-connected angel investor and “Godfather of Silicon Valley” who has delved into politics recently by founding advocacy non-profit sf.citi, pull out a call to action.
“I want to make sure every person in our region has an opportunity to be part of the new economy. We may not agree with everything the protesters outside have to say, but they do represent anxiety over a widening income gap. My message tonight is that we — that means all of us — must be leaders in tackling the challenges of housing, transportation and education.”
He went on, “We are in this together. Our entire city is in this together.”
Conway had a couple big goals for the tech community this year.
First, he wants tech companies to donate 1 million hours of community service to the region. (Salesforce is already projecting 125,000 hours of service this year.)
He also wanted 1,000 companies to join Marc Benioff’s 1-1-1 effort, where they donate 1 percent of their equity to form a foundation by the time they IPO, 1 percent of their employee hours to community service and 1 percent of their product (if applicable).
He also mentioned two new efforts where tech companies will able to “adopt” a school, and respond to requests for help from the principal or teachers. ”We’ll let the educators tell us what to do,” he said. There are already non-profits around like DonorsChoose, which lets donors respond to specific requests from teachers for help with funding trips or materials, and MissionBit, where developers can teach free after-school programming classes to San Francisco high school and middle school students.
Another effort from Sf.Citi is a matching program where tech companies can donate their extra office space to local San Francisco non-profits.
“Many non-profits are being pushed out of their offices because of costs,” Conway said.
In a report last year from the city’s budget and legislative analyst, there are about 6,000 non-profits in the city of San Francisco. In the last two years alone, commercial rental rates have risen by 32.8 percent per square foot, according to the report. About one-third of the non-profits the city surveyed last fall said their leases would be up at the end of 2013, meaning that rising commercial rents would likely eat into their budgets or they would have to move.
The Activists’ Side
Meanwhile, the protesters outside focused on two issues: 1) displacement of longtime San Francisco residents because of rising rents and Ellis Act evictions and 2) a call for tech companies to pay more in taxes to the city.
Tony Robles, who came from San Francisco’s Senior & Disability Action and whose family has lived in the city for five generations, wanted help from the tech community to overturn the Ellis Act at the state level.
“My family has lived through many waves of displacement. We’re from communities that are under attack,” he said. “If you’re an elder living on a fixed income, and you’re evicted, you’ll have nowhere to go.”
The Ellis Act was originally designed for landlords to go out of business, but housing activists say it is being abused in San Francisco by real estate interests who evict longtime rent-controlled tenants in favor of bringing in new, more affluent tenants at higher market rates or turning these units into tenancies-in-common or condominiums.
Ellis Act evictions rose 170 percent to 116 in 2013, from 43 in 2010, according to an October report to San Francisco’s Board of Supervisors. Activists say that case numbers might be four or five times higher because tenants with little ability to protect themselves like illegal immigrants get pressured into taking under-the-table Ellis buyouts.
Overturning or amending the law is a politically challenging task, however, because it only drastically affects two rent-controlled markets in the state: San Francisco and Santa Monica. That may not create enough political will to overcome the powerful real estate lobby in Sacramento. Nevertheless, state senator Mark Leno is introducing a bill this year to amend the law by allowing cities more flexibility to regulate Ellis Act evictions.
Robles’ wife Lisa Gray-Garcia, an editor at Poor Magazine, also had a long list of suggestions for people in the tech community, including: taking public transportation instead of the private shuttle buses, urging employers like Google, Apple and Facebook to stop offering the buses and spending a percentage of their wealth to buy back housing for the elderly and low-income residents who have been evicted.
The second issue frustrating activists was the Twitter tax roll break, which protesters claimed cost the city as much as $600 million in foregone revenues, according to a flyer they passed out.
In 2011, the city’s Board of Supervisors voted to offer companies with at least $1 million in payroll taxes a partial exemption from the city’s tax if they moved to the Mid-Market area. Twitter and other tech companies like Spotify, One King’s Lane and Zendesk took the deal. At the time, Twitter was threatening to leave the city, in part because payroll tax was the only one of its kind for a city in the state of California (especially the part where the city taxed employee stock options).
The city subsequently reformed the tax to focus on a business’ gross receipts, instead of their payroll size. That new tax structure will be eased in over the next few years.
Opponents of the tax exemption say the city has potentially foregone tens of millions of dollars in revenue from those employee stock options.
But proponents of the exemption say Twitter and other growth-stage tech companies could have moved slightly south, meaning San Francisco would have missed out on these business taxes entirely. (Many of their employees probably would have continued living in San Francisco too, which means there would still be pressure on the city’s housing market.)
San Francisco’s chief economist Ted Egan told the San Francisco Chronicle that the initial deal preserved at least $10 million in base revenue from the company for the city over six years. With unemployment also dropping by half from 2010, San Francisco was able to close a $124 million budget deficit last year, thanks in part to $55 million more from business payrolls and property taxes.
But activists still took issue with taxes, saying that the tech industry has to do more to preserve the city’s socioeconomic diversity and combat a widening income gap.
“There’s a new industry in town and it’s got a lot of money. We have to work for new possibilities in closing the wealth gap,” said Kathy Lipscomb, a Noe Valley resident who has lived in San Francisco for 22 years. “There were 1,600 millionaires created by Twitter. We need money for low-income housing and teachers.”
Lipscomb added that she didn’t necessarily blame individual tech workers.
“Many people in the tech community are very sincere,” she said, adding that she has a nephew-in-law who works for Salesforce. “It’s very nice to give computers. It’s very nice to give time. But what we need is for CEOs to pay their taxes.”