Technology

Manychat taps $140M to boost its business messaging platform with AI

Chatbots and other kinds of AI agents — and the companies that build them — may feel like a dime a dozen these days. But the truth is that, for both businesses and consumers, some may be infinitely more useful (and perhaps less dystopian) than others. Today, a startup that’s built a successful business around that concept is announcing a major growth round to expand its business. Manychat, which provides brands with a tool for managing and automating conversations and engagement across multiple messaging channels, has picked up $140 million led by Summit Partners.

The funding is coming on the heels of strong growth for the startup. Manychat today has around 1.5 million customers across 170 countries, with the client list including the likes of Nike, the New York Times and Yahoo (the current owner of TechCrunch) as well as individual creators and much smaller outfits.

CEO and co-founder Mike Yan said Manychat sends “billions” of messages annually on behalf of these users across TikTok, Instagram, WhatsApp, Messenger and other chat platforms. The plan will be to use this latest Series B round of funding both to invest in R&D — in particular bringing more AI into the platform — as well as to boost the company’s sales, marketing and support globally.

Notably for a startup these days, Manychat is mostly profitable — mostly, because as Yan describes it, “We always operate on the edge of being kind of break even.”

Since launching a decade back in 2015, it has only raised around $23 million, mostly from this $18 million Series A round in 2019 led by Bessemer with participation from Flint Capital. (Manychat did not disclose what other investors are in this latest round beyond Summit.) The company is not giving out a valuation but it’s likely to be considerably higher than the modest $58 million post-money valuation PitchBook detailed for the Series A.

From Telegram to Instagram

Manychat’s trajectory mirrors both the rise of smartphone-based messaging apps over the last decade, as well as the growing opportunity around tooling for helping businesses to leverage that medium in a better way.

In 2015, the email inbox was starting to tip into becoming a spam-laden, tired, and over-used medium for businesses looking to use it for marketing.

Yan was coming off the back of a failed social app, and he himself was a Telegram user, one of a growing population of consumers using messaging apps for basic communications. When Telegram opened up its APIs, the lightbulb of inspiration went off for him and his co-founder Anton Morin.

“Telegram was actually one of the first western messaging apps to open up its APIs,” he recalled. “As users of Telegram ourselves, and we saw a clear job to be done.” Companies were using email to connect to users, he said, but that was not where users were spending time. “They should be using messaging apps actually to connect with customers, that’s where the new wave of communication is happening. That’s where the new consumer is.”

So he and Gorin built the first iteration of Manychat as a tool for creating chats for businesses on Telegram. It picked up enough traction to get them into the 500 Startups accelerator.

Then, when Facebook opened up its APIs for Messenger — making its own first-efforts to build AI chatbots — things really started to take off. By the time Manychat raised its Series A in 2019, it was already reaching 350 million users on the platform monthly with billions of messages and an enviable open rate of 80%.

Additional APIs opening up across other Meta-owned platforms as well as TikTok have boosted that growth. Users can still market on Telegram, too, Yan said, although these days that is just a small percentage of its traffic. For the record, Instagram is far and away the most engaged and active platform for the company today, Yan said.

Manychat’s founding and a large chunk of its growth preceded the rise of generative AI and the emergency of AI chatbots like Anthropic’s Claude, OpenAI’s ChatGPT, and Google’s Gemini, among others. In fact, the earlier descriptions of the product touted how it provided a “smart blend of automation and personal outreach” to customers, who were using its no-code platform to build chatbots to grow social followers, collect email addresses, respond to comments and set up flows via DM links to request products or more information on something.

Anchoring its product around encouraging further actions, Yan said, is what sets it apart from most chatbots on the market right now, including most GenAI chatbots.

Sophia Popova, the Summit partner who led the investment and is joining the board of the startup, believes that Manychat’s approach of building out an engagement layer that’s seen a lot of success so far makes it a solid bet for the next wave of activity on messaging platforms.

“Our thesis hinges on a greater proportion of commerce dollars going through social messaging apps,” she said in an interview. “You need to be always on and engaging 24/7. That is what customers expect and Manychat is hitting the nail on the head.” In contrast, she said, when considering the DNA of the AI chatbots — at least what is in the market today — “very few of them are geared towards personalizing conversation in a way that drives conversion to revenue.”

If you want a help desk chatbot, there are “myriad” tools out there, but actually very few that are engaging to sell or elicit other responses from users in the way that Manychat has done, she added.

Yet given the pace of development — and the drive that many of the AI startups have to generate revenue to offset their huge cash burn — this is a gap that may not be there for long, one reason why Manychat is working to build in more AI features to improve its offering.

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Technology

Egypt’s Nawy, the largest proptech in Africa, raises $52M to take on MENA

For decades, buying property in Egypt meant navigating a fragmented real estate market, relying on personal networks, dealing with commission-driven brokers, and facing developers more focused on selling than serving customer needs.

In 2019, Mostafa El Beltagy co-founded Nawy to bring transparency and efficiency to the market. Now positioning itself as Africa’s largest proptech platform, Nawy has raised $52 million in Series A funding, led by Africa-focused VC firm Partech Africa, validating its model of combining property listings with brokerage services.

The round, which also includes $23 million in debt financing from Egypt’s top banks, brings the total to $75 million, one of the largest Series As for an African startup. In 2022, it raised a $5 million seed round led by Egypt’s wealthiest family, the Sawiris.

CEO El Beltagy’s journey into proptech began with personal frustration. After several years working in corporate jobs across multiple countries, the former Vodafone executive wanted to invest in real estate in Egypt, a market many people view as a hedge against inflation and currency devaluation.

However, as he navigated the process of purchasing property, the lack of transparency and the prevalence of biased advice became glaring problems.

“I had no way to look at the market and understand what’s out there, aside from going almost developer by developer, picking up their brochures and asking their salespeople questions, which was highly inefficient,” the CEO recounted. “In this sector, everyone is incentivized to push you one way or another.”

These challenges led El-Beltagy to build Nawy to help people buy, sell, invest in, finance, and manage property. Its model, combining a property listing platform with brokerage services, has set it apart in an industry still dominated by agents with entrenched, offline relationships. The chief executive launched the company alongside Abdel-Azim Osman, Ahmed Rafea, Mohamed Abou Ghanima and Aly Rafea.

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Making real estate accessible

At first, Nawy struggled to secure those listings. Developers were skeptical about Nawy’s value because it wasn’t big enough to drive traffic to their listings. Brokers, on the other hand, saw Nawy as a competitor.

To build trust, Nawy introduced immediate commission payments, funded upfront, to brokers who made their first transaction on the platform. This shifted sentiment, leading to word-of-mouth growth that has seen over 3,000 brokerages actively using Nawy Partners (its product for brokers), accessing live inventory and flexible payouts.

Additionally, the Cairo-based proptech attracts over a million monthly visitors, with hundreds of developers competing for visibility. About 150 developers cover most of Egypt’s new build market, which is worth around $30 billion, based on 100,000 transactions annually, according to El Beltagy.

Over the last few years, Nawy has expanded beyond listings and brokerage services, evolving into a full-stack real estate ecosystem. This includes Nawy Shares, a fractional ownership product that lets users invest in property with at least $500, making real estate accessible to Egypt’s middle-income population, which has long been priced out.

Additionally, Nawy has developed a mortgage product, “Move Now Pay Later,” designed to allow users to buy through installment plans and financing options in a market where banks rarely offer loans for real estate purchases.

“The real estate market is very lopsided in the sense that most people are buying new build, not resale. We believe enabling this product will cause a bit of a shift,” El Beltagy said of the embedded finance product. “It’s mortgage packaged differently because mortgages are almost non-existent here.” He added that Nawy’s $23 million debt facility backs this offering.

Immune to economic volatility?

These products have diversified Nawy’s revenue streams, which the company claims to have grown more than 50x in dollar terms over the last four years, despite the Egyptian pound losing 69% of its value.

El Beltagy attributes much of this growth to the market’s demand for real estate as a hedge against inflation and currency devaluation. While the currency crisis did impact local demand, the influx of expatriate money helped offset the drop.

As a result, the profitable Nawy closed 2024 with over $1.4 billion in gross merchandise value (GMV), up from $38 million in 2020.

With fresh capital, Nawy plans to expand beyond Egypt into North Africa and the Middle East, regions rapidly emerging as some of the world’s most promising real estate markets. Nawy is targeting Morocco, Saudi Arabia, and the UAE as its next markets (in the UAE for instance, platforms like Huspy and Property Finder already have strong traction.)

El Beltagy mentions that the company will buy smaller companies along the way. Recently, it acquired the property management startup ROA and rebranded it as “Nawy Unlocked,” expanding its product offerings.

The Series A round, raised across two tranches, will fund these plans, including advancing product development and integrating AI across Nawy’s processes, according to El Beltagy.

Other notable investors participating in the round include Development Partners International’s Nclude Fund, e& Capital, Endeavor Catalyst, HOF Capital, March Capital Investments, Outliers, Plug and Play, Shorooq Partners, VentureSouq, and Verod-Kepple Africa Ventures.

“We’re excited to support Nawy as they build the foundation for a modern, tech-driven real estate experience,” said Tidjane Deme, general partner at Partech. “Their team has deep market insights, coupled with ambitious regional expansion plans and exceptional execution, positioning them as the clear proptech champion in Africa and the Middle East.”

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Technology

Fitness tracker Whoop faces unhappy customers over upgrade policy

Whoop has backed down, somewhat, from the controversial upgrade plans around its Whoop 5.0 fitness tracker.

When the company first announced Whoop 5.0 this week, it said members who wanted the new device could either extend their subscriptions by 12 months or pay a one-time upgrade fee of $49 ($79 for the model with EKG sensors).

This seemed inconsistent with Whoop’s overall value proposition, where it charges higher subscription prices (ranging $199 to $359 a year) while allowing customers to upgrade their hardware for free. More specifically, it seemed to contradict a statement on the company’s website promising users free hardware upgrades if they’ve been members for at least six months.

After customers began complaining, the company responded with a Reddit post both announcing a more expansive upgrade policy and claiming to clarify its overall approach.

Now, anyone with more than 12 months remaining on their subscription is eligible for a free upgrade to Whoop 5.0 (or a refund if they’ve already paid the fee). And customers with less than 12 months can extend their subscription to get the upgrade at no additional cost.

While the company said it’s making these changes because it “heard your feedback,” it also suggested that its apparent stinginess was tied to its transition from a model focused on monthly or six-month subscription plans to one where it only offers 12- and 24-month subscriptions.

“We also want to acknowledge that a previous blog article incorrectly stated that anyone who had been a member for just 6 months would receive a free upgrade,” the company said. “This was never our policy and should never have been posted.”

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There’s been a mixed response to these changes on the Whoop subreddit, with one moderator describing it as a “win for the community.” Other posters were more skeptical, with one writing, “You don’t publish a policy by accident and keep it up for years. Removing it after backlash doesn’t erase the fact [that] it is real.”

There were also a number of complaints from users who said they had 11 months left on their subscriptions, so they just missed the free upgrade cutoff.

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Technology

Week in Review: Instacart CEO heads to OpenAI

Welcome back to Week in Review! We’ve got lots of news for you this week: There were CEO shake-ups at Instacart and 11x; the web series is back — kind of; Threads is getting video ads; and much more. Let’s get to it!

Big move: Instacart CEO Fidji Simo will become OpenAI’s CEO for Applications, the company said this week. Simo is already on the OpenAI board. She’ll be tasked with helping OpenAI in scaling “traditional” company functions, CEO Sam Altman said, but he didn’t provide any details on what that means.

Speaking of OpenAI: The company decided that its nonprofit division will retain control over its for-profit organization after initially announcing that it planned to convert to a for-profit organization. OpenAI says that it made the decision “after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California.”

And speaking of CEO moves: 11x CEO Hasan Sukkar announced that he’s stepping down and moving into a “non-executive chairman” position. In March, TechCrunch reported that 11x had been showing off on its website customer logos of companies that were not active customers, and one of those companies was threatening to sue over the matter.

This is TechCrunch’s Week in Review, where we recap the week’s biggest news. Want this delivered as a newsletter to your inbox every Saturday? Sign up here.

News

Tesla Cybercab — **Image Credits:**Tesla

Trademark friction: Tesla wants to trademark the terms “Cybercab” and “Robotaxi” but was denied by the U.S. Patent and Trademark Office because the terms are too generic. Tesla has three months to file a response, or the office will abandon the application.

No thanks: Speaking onstage at Stripe’s annual Sessions conference in San Francisco on Tuesday, Meta CEO Mark Zuckerberg laid out his plans to automate the entire ad industry with a black-box, end-to-end AI ad tool. As Maxwell Zeff reports, “It’s an open question as to what AI ad testing will do to Meta’s platforms from a user experience point of view, considering they’re already brimming with generative AI slop.”

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And speaking of ads: Meta announced at the NewFronts conference that it’s testing video ads in Threads. The update follows Meta’s recent announcement that Threads now reaches over 350 million monthly active users.

Yes, please! I’m not too savvy in the kitchen, so Posha’s new robot that cooks your meals for you sounds like a dream come true. You scroll through a list of recipes, select the one you want, add the proper amounts of the requested ingredients, and the machine makes the meal from there.

We’re back, baby: Before the rise of vertical video, scripted web series on YouTube were successful enough to spin out into cult-favorite TV shows like “Broad City,” “Insecure,” and “Letterkenny.” Now the web series is back, but it lives on a new platform: TikTok.

Goodbye to a real one: Bill Gates said Thursday that the Gates Foundation will have just 20 years to exhaust its coffers and wind down operations. He has pledged to donate 99% of his fortune, which today is worth an estimated $107 billion, to the foundation.

Analysis

Sam Altman — **Image Credits:**Stefano Guidi / Getty Images

What’s next for OpenAI: OpenAI’s new restructuring plan could satisfy regulators and investors who have invested heavily in the company hoping for future profits. But it might also disrupt OpenAI’s future ambitions, especially regarding a potential IPO.