Monzo to lay off up to 120 employees as the ‘economic situation’ remains challenging

Monzo, the U.K. challenger bank, continues to be faced with tough decisions linked to the coronavirus crisis and resulting economic downturn.

Following the shuttering of its Las Vegas-based customer support office and almost 300 staff being furloughed in U.K., the company has announced internally that up to 120 U.K. staff are being made redundant. Reuters first reported the news just moments ago — which I have now confirmed based on my own sources.

According to an internal memo written by new CEO TS Anil, following an all-hands earlier this afternoon led by Anil and Monzo co-founder and president Tom Blomfield, the bank is to make up to 120 roles redundant, despite previously stating that furloughs and pay cuts already carried out would mean further layoffs could be avoided. That no longer appears to be the case, with Anil explaining that the current economic situation isn’t expected to revert back to normal quickly.

I understand a full consultation period for those employees potentially affected will now take place, as is stipulated under U.K. employment law. In addition, Anil told staff that in order to recognise their contribution, the bank will be waiving the one year “cliff” from their vesting schedule so that they won’t lose on out shares due to them.

The announced layoffs add to a turbulent time for Monzo in recent months, as it, along with many other fintech companies, has attempted to insulate itself from the coronavirus crisis and resulting economic downturn.

Last month, I reported that Monzo was shuttering its customer support office in Las Vegas, seeing 165 customer support staff in the U.S. lose their jobs. And just a few weeks earlier, we reported that the bank was furloughing up to 295 staff under the U.K.’s Coronavirus Job Retention Scheme. In addition, the senior management team and the board has volunteered to take a 25% cut in salary, and co-founder and CEO Tom Blomfield has decided not to take a salary for the next 12 months.

Like other banks and fintechs, the coronavirus crisis has resulted in Monzo seeing customer card spend reduce at home and (of course) abroad, meaning it is generating significantly less revenue from interchange fees. The bank has also postponed the launch of premium paid-for consumer accounts, one of only a handful of known planned revenue streams, alongside lending, of course.

And just last week, it was reported that Monzo is closing in on £70-80 million in top up funding, to help extend its coronavirus crisis runaway. However, as new and some existing investors play hardball, the company has reportedly had to accept a 40% reduction in its previously £2 billion valuation as part of its last funding round last June, with a new valuation of £1.25 billion.

Endlesss, the iOS music making app from Tim Exile, takes to Kickstarter for desktop version

In entrepreneurship, timing is everything. Launch too early and the market or underlying tech may not be ready to support your idea. Launch too late and the opportunity may have already been conceded to competitors. For Endlesss, the music-making app from Tim Exile, the timing feels just right.

Launched on March 31st, just as the U.K. and many other countries around the world entered lockdown, the iOS app’s collaborative approach to music making proved to be an overnight hit. It seems that many people not only had time to fill, but craved the kinds of social and creative interactions that Endlesss was conceived to facilitate.

More broadly, Exile tells me the app and cloud-service is based on the premise that music has always been about performance and social interactions. However, as the recording industry developed, the tools for making music developed with it. This saw the onus put squarely on producing a final product — music-making as a means to an end rather than a means in itself — and along the way the spontaneity or ‘in the moment’ element of music has been lost.

A vision that has been years in the making (see this video interview with Exile conducted by TechCrunch’s Mike Butcher in 2016), the resulting Endlesss app combines software recreations of drums machines, samplers, synths and FX, with a “tap to loop” workflow that should be familiar to anyone who has used a looper pedal or loop-based sequencer. The app also accepts live audio for use with guitars, mics, and other external instruments. However, the clever part is the way these loops or riffs can be shared or remixed by others participating in your jam — essentially sending musical messages back and forth as if it were a chatroom. Or at least that’s one analogy Exile is fond of using.

“Endlesss started life as an instrument I developed to allow me to take a spontaneous performative approach to improvising electronic music,” explains Exile in a Medium post. “I wanted to liberate myself from the perfectionism that I fell into in long solitary hours in my studio. The workflow evolved over a decade of regular touring at a time when process-based music was an arty experimental niche. At first I wanted to build a career for myself as an improvising musician but I soon realised there was much greater potential in what this workflow could do for others”.

Now, via a Kickstarter campaign launching today, the Endlesss team are aiming to bring an even more ambitious version oto desktop Macs and Windows machines, including VST/AU compatibility for integration with your favourite DAW. Dubbed Endlesss Studio, the idea is to retain the accessibility and sense of play that the iOS app delivers, but couple it with a more involved studio setup so the music-making possibilities really are endless.

With that said, a few Kickstarter caveats. Endlesss Studio isn’t planned to ship fully until next year, with backers given access to an alpha version in December 2020 at the earliest and a beta release scheduled for February 2021. However, the team already have a track record shipping software, including the iOS app and accompanying cloud-based back end, so hopefully the release dates won’t slip too much, if at all.

Exile has also thought long and hard about how to create a sustainable business model that will support an even more ambitious roadmap into the future. Early Kickstarter backers can grab lifetime access to Endlesss Studio for a one-off fee but the longer term model is a monthly subscription of $12 per month — jamming as a service, if you will. This includes HD audio quality jams and archives, an option that should prove popular for users who want to use Endlesss as a jumping off place for more polished tracks. In fact, Exile has already launched a record label dedicated to Endlesss-enabled releases.

Meanwhile, Endlesss isn’t entirely self-funded. The startup disclosed its first funding round in July last year. Backers include Tim Clark (co-founder, IE:Music), Mathew Daniel (VP International, NetEase Cloud Music), Dhiraj Mukherjee (co-founder, Shazam), Richard Jones (manager, Pixies), and Paul Kempe (Tileyard), along with a number of unnamed but “well-known” artists. In addition to equity funding, Endlesss has also received a grant from Innovate UK.

The company’s advisory board includes Stephen O’Reilly (IE:Music, Topspin), Cliff Fluet (Eleven Advisory) and Will Mills (Shazam, LyricFind).

Endlesss, the iOS music making app from Tim Exile, takes to Kickstarter for desktop version

In entrepreneurship, timing is everything. Launch too early and the market or underlying tech may not be ready to support your idea. Launch too late and the opportunity may have already been conceded to competitors. For Endlesss, the music-making app from Tim Exile, the timing feels just right.

Launched on March 31st, just as the U.K. and many other countries around the world entered lockdown, the iOS app’s collaborative approach to music making proved to be an overnight hit. It seems that many people not only had time to fill, but craved the kinds of social and creative interactions that Endlesss was conceived to facilitate.

More broadly, Exile tells me the app and cloud-service is based on the premise that music has always been about performance and social interactions. However, as the recording industry developed, the tools for making music developed with it. This saw the onus put squarely on producing a final product — music-making as a means to an end rather than a means in itself — and along the way the spontaneity or ‘in the moment’ element of music has been lost.

A vision that has been years in the making (see this video interview with Exile conducted by TechCrunch’s Mike Butcher in 2016), the resulting Endlesss app combines software recreations of drums machines, samplers, synths and FX, with a “tap to loop” workflow that should be familiar to anyone who has used a looper pedal or loop-based sequencer. The app also accepts live audio for use with guitars, mics, and other external instruments. However, the clever part is the way these loops or riffs can be shared or remixed by others participating in your jam — essentially sending musical messages back and forth as if it were a chatroom. Or at least that’s one analogy Exile is fond of using.

“Endlesss started life as an instrument I developed to allow me to take a spontaneous performative approach to improvising electronic music,” explains Exile in a Medium post. “I wanted to liberate myself from the perfectionism that I fell into in long solitary hours in my studio. The workflow evolved over a decade of regular touring at a time when process-based music was an arty experimental niche. At first I wanted to build a career for myself as an improvising musician but I soon realised there was much greater potential in what this workflow could do for others”.

Now, via a Kickstarter campaign launching today, the Endlesss team are aiming to bring an even more ambitious version oto desktop Macs and Windows machines, including VST/AU compatibility for integration with your favourite DAW. Dubbed Endlesss Studio, the idea is to retain the accessibility and sense of play that the iOS app delivers, but couple it with a more involved studio setup so the music-making possibilities really are endless.

With that said, a few Kickstarter caveats. Endlesss Studio isn’t planned to ship fully until next year, with backers given access to an alpha version in December 2020 at the earliest and a beta release scheduled for February 2021. However, the team already have a track record shipping software, including the iOS app and accompanying cloud-based back end, so hopefully the release dates won’t slip too much, if at all.

Exile has also thought long and hard about how to create a sustainable business model that will support an even more ambitious roadmap into the future. Early Kickstarter backers can grab lifetime access to Endlesss Studio for a one-off fee but the longer term model is a monthly subscription of $12 per month — jamming as a service, if you will. This includes HD audio quality jams and archives, an option that should prove popular for users who want to use Endlesss as a jumping off place for more polished tracks. In fact, Exile has already launched a record label dedicated to Endlesss-enabled releases.

Meanwhile, Endlesss isn’t entirely self-funded. The startup disclosed its first funding round in July last year. Backers include Tim Clark (co-founder, IE:Music), Mathew Daniel (VP International, NetEase Cloud Music), Dhiraj Mukherjee (co-founder, Shazam), Richard Jones (manager, Pixies), and Paul Kempe (Tileyard), along with a number of unnamed but “well-known” artists. In addition to equity funding, Endlesss has also received a grant from Innovate UK.

The company’s advisory board includes Stephen O’Reilly (IE:Music, Topspin), Cliff Fluet (Eleven Advisory) and Will Mills (Shazam, LyricFind).

Former Pollen employees were asked to sign an ‘NDA masked as a severance agreement’

Pollen, the U.K.-headquartered travel and events marketplace, describes its company culture as built on principles of “freedom” and openness, including a well-publicised pay transparency policy. However, that doesn’t appear to always be the case with regards to the treatment of recently departing employees.

When the word-of-mouth marketing company laid off 69 staff from its various U.S. and Canada entities last month, axed staff were asked to sign a severance agreement that included a clause prohibiting them from disclosing the content of the agreement, including to current and former employees.

In addition, multiple sources tell TechCrunch the severance contracts feature a broader non-disparagement clause. Such clauses are typically used to prohibit current or former employees from talking about a company or its staff and leadership in a way that is harmful to the business or individuals associated with the business.

“It was basically an NDA masked as a severance agreement,” said one former Pollen employee, who asked not to be identified. “They dangled our last pay check in front of us so that we felt pressure to give away our rights, and they paired that with an abrupt cut off from the company. I was told I was laid off and then promptly removed from all correspondence within a 24 hour period”.

Pollen co-founder and CEO Callum Negus-Fancey doesn’t dispute the existence of either clause, but says both are a “standard inclusion” in severance agreements and were drafted by external employment lawyers. “However, we’re going to discuss internally if it’s necessary to continue to include these kinds of clauses given the company’s focus on transparency,” he added. “We strive to adopt best practices throughout Pollen”.

However, according to HR experts TechCrunch has spoken to, including one HR professional with years of experience working for large tech companies in the U.S., such confidentiality and non-disparagement clauses aren’t typically employed in more general redundancy situations. Instead, they are more commonly used where a severance contract is agreed after a dispute between a departing employee and the company, or when a company is concerned there could be adverse publicity.

“For a company that strives itself on transparency, there is actually a deep undertone of political rhetoric about what should or should not be talked about,” a former Pollen employee tells TechCrunch.

Meanwhile, Pollen, or rather JusCollege, one of its many brands and entities, did attract negative media headlines earlier this year as it grappled with the emerging coronavirus situation. Parents of students who canceled a spring break to Mexico in mid-March told NBC News that they weren’t offered refunds despite concerns over the virus and had been reassured that the trip was safe. On the 12th March, two days before departure, the World Health Organisation (WHO) declared a pandemic. Subsequently, according to the University of Texas, dozens of students that went on the trip tested positive for COVID-19 when they returned to the U.S.

In response, a JusCollege spokesperson told the Independent newspaper: “We take the safety of our customers very seriously and are working with public health authorities to assist where we can. JusCollege always follows U.S. government regulations and guidance from the state department when making travel recommendations, and Mexico was not under a federal travel advisory at the time the trip departed… Our thoughts are with the students who are ill and the healthcare providers and public health officials who are working to mitigate the impact of COVID-19.”

In a call, and followed up over email, Negus-Fancey said that Pollen wasn’t in a position to cancel the spring break trip and offer full refunds at the time because the U.S. government was yet to advise travel restrictions to Mexico. He also explained that the company acts as a “curator and distributor” connecting customers with suppliers, such as hotels, airlines and nightclubs, who set their own refund policies. “The money doesn’t sit with us, it sits with our partners. We take a commission in the middle,” he said.

Adds the Pollen CEO: “All customers who didn’t want to travel were refunded at a minimum whatever was received back from clients (hotels, airlines or other providers) or they were given a 100% credit to a future trip. The team worked tirelessly over weeks to achieve this outcome for customers as it was at the discretion of clients given there were no travel warnings in place at the time about flying to Mexico. We were materially out of pocket as a result of this effort because despite the circumstances, we took a long term view to do right by customers and as a result paid out in many circumstances where clients had not refunded us”.

Separately, following layoffs in North America and 34 furloughs in the U.K., TechCrunch has learned that Pollen has put another 56 members of staff on furlough, as the travel and events sector continues to be hit hard by the coronavirus crisis. They comprise 45 in the U.S., 7 in the U.K., and 4 in Canada.

Confirming the latest round of furloughs, Negus-Fancey says employees are being supported by each country’s various government furlough schemes and that Pollen U.S. furloughed employees were given “over a weeks notice on full pay and we are covering their medical insurance whilst they are on furlough leave”.

Founded in 2014 and previously called Verve, Pollen operates in the influencer or “word-of-mouth” marketing space. The marketplace lets friends or “members” discover and book travel, events and other experiences — and in turn helps promoters use word-of-mouth recommendations to sell tickets. Pollen’s backers include Northzone, Sienna Capital, Draper Esprit, Backed and Kindred.

Partners at B2B European VC henQ discuss remote work’s biggest advantages

HenQ, an Amsterdam-based VC that invests in European B2B software startups typically at seed and Series A, recently disclosed the first close of its fourth fund at €70 million. The final close is expected to top out at between €75-€85 million later this year, and the firm has already begun backing companies out of the new fund.

However, what sets henQ apart from many VC firms isn’t just its pure focus on B2B software but that its team is fully remote. Primarily investing in the Nordics and Benelux, henQ doesn’t have any official offices, with the team working from different temporary locations. Even before the coronavirus pandemic, henQ closed deals remotely.

Successes from its previous funds include Mendix (acquired by Siemens) and SEOshop (acquired by Lightspeed).

I spoke to partners Jan Andriessen, Mick Mackaay and Jelmer de Jong to learn more about henQ, what it’s like to be a fully remote VC and how the firm envisions the post-pandemic era.

TechCrunch: Can you be more specific regarding the size of check you write and the types of companies, geographies, technologies and business models you are focusing on?

Jan Andriessen: Our main focus is seed rounds, in which we often are the lead investor. We also invest in Series A rounds, often as a co-investor. Initial check sizes vary from €500,000 to €3.5 million.

A typical seed investment has a product and perhaps a few pilot customers. The key here is not revenue (which is OK to be zero), but there is proof of the actual need for the product.

Most of our recent deals were in the Nordics and Benelux, the areas where we spent the majority of our time. But we have also invested in the Baltics, Czech Republic and the UK. For henQ 4, we expect this to be the same: the bulk of our investments will be in the Nordics and Benelux, with an occasional deal in broader Europe.

In terms of technology and business trends, one of the things we firmly believe in is the consumerization of enterprise software: successful startups are centered around their customers and focus on the job to be done. More generally, we have always been focused on startups with staying power: companies that have a right to exist over time, not just now, as they deliver a product that touches the core processes of their customers and operate at the heart of their customer’s business.

For example, looking at our portfolio, Zivver delivers secure communication solutions for hospitals and governments. Stravito works deep in the research departments of FMCGs, delivering a knowledge management platform. Mews runs the full operations of hotels with their property management system, and Orderchamp enables retailers to digitize their buying process.

We see the business model of a company as a means, not an end. Most of the startups we invest in charge a SaaS plus implementation fee, and have a more enterprise-sales driven business model. We are not afraid to invest in startups that have a more complex and longer sales cycle, and are not per se looking for SaaS ‘by-the-book.'

Midnite raises $2.5M for its esports betting platform

Midnite, the London-based esports betting startup from the same team behind daily fantasy football app Dribble, has raised just over $2.5 million in funding. The “strategic” investment is led by gaming-focussed venture firm Makers Fund.

Previous investors in Midnite include London VC firm Venrex Investment Management, as well as unnamed “founders and executives” from leading gaming companies including Betfair and GVC. The new round brings the total raised by the 2016 founded company to around $4.5 million.

“The esports market is seeing rapid year-on-year growth and we believe that betting represents the single biggest opportunity in this space,” Midnite co-fonder Nick Wright tells TechCrunch. “Wagering on esports is expected to exceed $12bn by the end of 2020, making betting already one of the fastest growing verticals within esports”.

However, despite the size of opportunity, Wright says that for most big sports betting sites, esports is “just another tab” in their legacy sports betting offering, but that esports fans are not simply just another type of sports fan. “They are an entirely new customer category and deserve a platform tailored to them,” he says. “This is why Midnite exists”.

With that in mind, Wright pitches Midnite as an “entertainment platform” that provides an immersive experience for esports fans. He says fans get the thrill of watching, analysing, and betting on their favorite teams and players as they face off in tournaments around the world.

“What makes esports differ from other sports is the constant action and its highly dynamic nature,” says the Midnite co-founder. “This is conducive to a variety of live betting opportunities that you can seldom find in real sports. Users can bet on your standard match winners and losers, but they can also bet on unique selections such as next kill or next objective achieved while matches are in-play”.

Noteworthy, although operating in an invite-only beta, the startup has already acquired a betting license in the U.K., which Wright points out is the biggest betting market in the world.

He says this makes Midnite the only dedicated esports betting platform that accepts customers in the U.K, and that the company is focused on operating globally in jurisdictions that can legally accept customers. “[We] are acquiring additional licenses to do so,” he adds.

“In the past, betting on esports has been carried out by unregulated operators, which meant that the unregulated market was several times bigger than the regulated market. Many operators offering esports betting would not be licensed, were not taking responsible gambling seriously or even performing age verification checks. This meant customers want to bet on esports were often placing themselves at risk.

“We are creating a safe and responsible environment for these fans. Customer safety is our top priority and we are taking it very seriously. We are doing everything by the book to ensure our community is safeguarded and are compliant with all the regulations in markets where we are operational”.

TaxScouts wants to make filing your tax return a lot less tedious

TaxScouts, a U.K. startup founded by TransferWise and Marketinvoice alumni, is the latest online service designed to make filing your tax return a lot less tedious. However, rather than focusing on the bookkeeping part of the problem primarily tackled by cloud accounting software — which is often overkill if you are self-employed or simply earn a little additional income outside of your day job — the company combines “automation” with human accountants to help you prepare your tax submission.

“Doing taxes is either tedious when you have to do them yourself, or expensive when you hire an accountant,” says TaxScouts co-founder and CEO Mart Abramov, who was employee number 8 at TransferWise and also previously worked at Intuit, MarketInvoice and Skype. “We’re automating as much of the admin part of tax preparation as possible in our online app. We then connect you with a certified accountant who will take care of the entire tax filing process for you”.

The headline draw is that TaxScouts charges a flat fee of £99 if you pay in advance, and promises a turn-around of just 24 hours. To help with this, the web app walks you through your tax status, income and expenses without assuming too much prior knowledge. This includes asking you to upload or take a photo of any required documents, such as invoices or dividend certificates. The idea is that all of the admin is captured digitally and packaged up ready for your assigned accountant to take a look.

“As more of the menial tasks are handled by our app this allows accountants to focus on what they do best and not get stuck in admin,” explains Abramov. “They can focus on providing advice and expertise to make sure everything is done right. Our customers get both the benefits of getting a personal accountant and having a simple tool to manage it all, without the huge costs”.

Abramov tells me that TaxScouts’ typical customers are anyone who wants to have their self assessment done for them or who just wants help with tax preparation. This spans self-employed people — from construction workers to professional freelancers — entrepreneurs and company directors, and people who are entitled to some kind of tax relief or refund, such as investors on crowdfunding platforms. He also said that gig economy workers are a good fit.

Moving forward, TaxScouts plans to further develop the automation functionality, including plugging into more data sources beyond its existing integration with HMRC. Abramov says this could include a driver’s Uber data for tracking mileage claims, for example, while I can immediately see how the app could integrate with various fintech offerings that capture transactions and receipts.

To that end, the startup has raised £300,000 in “pre-seed” funding to continue building out the product. Backers include Picus Capital, Charlie Delingpole (co-founder of ComplyAdvantage and MarketInvoice), and Charlie Songhurst (former GM corporate strategy at Microsoft).

Email security startup Tessian raises $13M led by Balderton and Accel

Tessian (formerly called CheckRecipient), the London-based startup that is deploying machine learning to improve email security, has raised $13 million in Series A funding. Leading the round is Balderton Capital, and existing backer Accel. A number of previous investors also followed on, including Amadeus Capital Partners, Crane, LocalGlobe, Winton Ventures, and Walking Ventures.

Founded in 2013 by three engineering graduates from Imperial College — Tim Sadler, Tom Adams and Ed Bishop — Tessian is built on the premise that humans are the weak link in company email and data security. This can either be through mistakes, such as a wrongly intended recipient, or through nefarious employee activity. By applying “machine intelligence” to monitoring company email, the startup has developed various tools to help prevent this.

Once installed on a company’s email systems, Tessian’s machine learning tech analyses an enterprise’s email networks to understand normal and abnormal email sending patterns and behaviours. It then attempts to detect anomalies in outgoing emails and warns users about potential mistakes before an email is sent. This, the startup says, makes it different to legacy rule-based technologies and that Tessian requires “no admin from security teams and no end-user behaviour change”.

One neat aspect is that Tessian can get to work retroactively, producing historical reports that show how many misaddressed emails an organisation has sent prior to the installation date. That is bound to help with sales, even if it could give an enterprise’s security team quite a shock, especially in light of recent GDPR data regulation in Europe. The new EU directive stipulates that companies must report data breaches involving personal information to their local regulator and face fines as high as 4 percent of global turnover for the worst data breaches.

In a call late last week with Tessian CEO and co-founder Tim Sadler, he told me the company plans to use the additional funding for R&D, including the launch of new product, and to expand its sales and marketing teams. Since the startup’s seed round last year, the Tessian team has grown from 13 to 50 people.

Sadler explained that Tessian is looking to apply its tech to in-bound email, in addition to its existing out-bound products. One way to think about it, he says, is that an email address is like an IP address for humans, enabling human to human networks. However, in terms of security, not only are humans an obvious weak point, acting as the gatekeeper to the network and the data that resides on it, email by design is inherently open.

To that end, Sadler tells me that next on Tessian’s roadmap is a way to make in-bound email less prone to data breaches. This will include using Tessian’s machine intelligence to identify spoofed emails or other unusual communication.

“What Tessian have done — and this is why we are so excited about them — is apply machine intelligence to understand how humans communicate with each other and use that deeper understanding to secure enterprise email networks,” says Balderton Capital Partner Suranga Chandratillake. “The genius of this approach is that while the product focus today is on email — by far the most used communication channel in the corporate enterprise — their technology can be applied to all communication channels in time. And, as we all communicate in larger volumes and on more channels, that represents a vast opportunity”.

Meanwhile, Sadler says the startup’s customers span legal, healthcare and financial services, but that any enterprise handling sensitive data are a potential fit. “World leading organisations like Schroders, Man Group and Dentons and over 70 of the UK’s leading law firms are now using platform to protect their email networks,” adds the company.