Both cities now share investment activity from Dave McClure.

Berlin-based Versus IO was Dave McClure’s first investment in a German startup. McClure invested $100,000 in December 2012 and now Versus IO has closed its first round of $2.8 million led by Earlybird Venture Capital, as well as follow in investment from McClure.

Versus IO is a comparison engine. All the information and noise on the web can make it difficult to draw conclusions from data and make intelligent purchasing decisions. Versus IO addresses this challenge using natural language processing to generate point-by-point comparisons. Users enter two things they want to compare, such as electronic products, cities, or services, and the system culls information from around the web and presents them in a list of pros and cons.

Comparing the iPhone 5 to the Samsung Galaxy S4 shows that the Galaxy has almost twice as many pros as the iPhone, including more flexible charging capabilities and a camera with more megapixels and faster max shutter speed. If you pit Mumbai against Shanghai, you see that Mumbai has a higher average temperature and cheaper Big Macs, while Shanghai has public health care and significantly more museums and sport facilities.

When Versus IO first launched, it was solely a product comparison engine. 25 million companions are now available in 18 languages and the company said traffic has increased an average of 35% a month. This financing will support Versus IO’s expansion into other modes of comparison.

If that sounds bad, how about half of your company for $90K? Crazy?

No. This is the reality in many places outside of Silicon Valley (and especially outside the US). And it isn’t good.

The issue in Germany

I’m going to talk today about Germany, where I commonly see this issue. There are plenty of countries that have similar issues, but since Blumberg Capital is very active in Germany, and I sit on five boards in Germany, I feel most comfortable writing about the specifics that I know. I happen to be writing this today because I’m in Berlin and this issue is front and center for a couple of companies that I’m looking at.

If you are an entrepreneur in Berlin, you are hard-pressed to find capital for your company. Even with the notoriety that Germany, and Berlin in particular, has gained, there simply is not much capital available here. Relative to Silicon Valley, the capital available in Germany is a rounding error, and even relative to London, Germany suffers a definite lack of capital. It is slowly changing, but not nearly as quickly as it should.

In Germany, entrepreneurs starting out would appear to have similar opportunities to those available in the US — there are some very good incubators, there is an excellent group of angels, most of whom have built and sold companies previously, and there are a couple of very early stage funds. But, the scale is just too small. And at the early stage, the lack of capital is most pronounced.

And the ramifications are pretty significant:

- First rounds in Germany (call them seed rounds) tend to be small (50K – 250K), and nearly always done by angels or small super-angel funds. A 500K round is considered very good for the first round and is quite rare!

- Founders give up significant portions of their company to angels just to get a little capital at the outset. It is common to see investors take up to half of a company up front.

- Early stage companies are often under-capitalized, which makes it difficult to scale and raise further growth capital.

- The funds in Europe that invest more significant capital tend to wait until a company has substantial traction — say, EUR 5M -10M in revenue.

All of this adds up to a couple of significant issues that challenge the ecosystem.

1.  Capital risk is huge — companies that raise small rounds struggle to hit the milestones for their next round, and many either don’t make it or end up very small.

2.  Cap tables are screwed up. It is very common for founders to only have 10% ownership after they have raised Series A or Series B. It leaves far less upside, and we often see angel investors with bigger stakes than founders.

Why is this the case, and what can be done about it?

At each stage of the company, there are different issues.

Very early, when angels typically lead rounds, it isn’t uncommon to see a company raise $100K to $250K and give up half the company, usually with the promise of “shares for support.”  The investor promises to help with setup, operational expertise, fundraising, and some key elements of the business. I don’t want to be negative toward the investors who truly do act as cofounders and get companies off the ground, but not all angels fulfill this promise.  If they fall short, this approach is really aggressive from the angel perspective and doesn’t leave much room for future rounds in terms of the cap table. To me, unless the angel investor is truly a cofounder and helping day-to-day in operations, these “shares for support” and huge dilution scenarios don’t set the company up for success.

At the next round, typically Series A in Germany, which is roughly equivalent to seed rounds in the US, there are not very many players. One of the reasons Blumberg Capital is investing in Germany is because we are finding great opportunities to fill a part of this capital need. In contrast to the US, where there are a fair number of early stage funds, in Germany, there are very few, and there is a substantial gap between angel funding and bigger rounds where traditional European VCs jump in. This void is very real, and many companies never get beyond their initial angel round.

At Series B and beyond, what we find is most VCs are looking for significant traction. This means that companies need enough runway and capital to really scale, and if that isn’t there, the companies face serious capital risk. Again, because there is not a lot of capital available, the VCs who provide the larger amounts of capital are very smart to wait for companies to break out before making investments. They don’t need to rush. It isn’t like the company has a ton of options for financing.

A real world example

So, let’s take a real world example. Company A has a group of great founders going after a big market. They are one of the companies that attracts the attention of some strong angel investors. The angel investors convince the team they can really help, and that giving up 50% of their company when it is formed is not bad in exchange for their help. The company gets $250K for 50% at the outset.

This company does well and is able to attract more capital. It raises a pretty solid seed round ($500K) from angels and a small seed fund at a $2M pre, taking 20% in dilution.

It really starts to hit its stride now and attract a solid Series A of almost $2M at about a $6M pre-money valuation. In the US, this might be their seed round, and the earlier money may have come from bootstrapping or friends and family. They take another 25% dilution.

Now the founders have diluted by nearly 50% AFTER they gave up 50% at the outset; they have a total of about 20% ownership and have not even gotten to growth stage capital yet!  In the US, this would be almost the opposite, where investors would likely hold about 20-25%, and founders would still own the lion’s share of the equity. The screwed up cap table has very negative impacts on the upside potential and the incentive structures.

In general, the lack of capital and the fact that the investors extract so much from the companies act as deterrents to startup growth.

Improving education and access to capital

We aren’t going to wake up tomorrow and find that significantly more capital is magically available, so what can we do to work with the constraints that exist?

Pawel Chudzinsky, founder and Managing Director of Point Nine Capital in Berlin says, “Although improving all the time, access to early stage capital continues to be a challenge for startups in Germany. It is especially difficult for first time founders with limited networks and experience who frequently give up a lot of equity for little money in the early stages. … More capital, more transparency, and education seem to be the solutions to make things better here.”

Education is the area where founders can most directly impact their opportunities. I find that US founders are generally far more knowledgeable about equity compensation, dilution, fundraising, and scaling businesses, but as ecosystems like Berlin are evolving quickly, the base of very knowledgeable founders is increasing quickly. In Berlin today, and in many other places, experienced founders and investors are willingly contributing their expertise to help others build, and this is a key to making the system function efficiently.

As I have watched the ecosystem in Germany grow and mature over the past couple of years, I am seeing progress on all fronts. More investors are paying attention to Germany, so capital levels are slowly increasing. And, as the market continues to evolve, we are seeing that people are more mindful of raising enough capital to be able to scale, and also to ensure that the founders have the equity incentive to build great companies.

One final note: I have focused on Germany here because I have the most experience in Germany, but these issues are very similar in many emerging startup ecosystems around the world.  I hope that, as we continue to build these ecosystems, we will set them up to maximize the potential opportunities.

[Top image credit: Lightspring/Shutterstock]

If regulators really want to deter Google from doing naughty things, they can start by fining the company more money.

Germany is fining Google $189,230 (145,000 euros) over the company’s public Wi-Fi data snooping, the news of which emerged in 2010.

Google, which called the snooping a mistake before pinning the blame on a rogue engineer, says it’s still sorry that it collected the data — even if it didn’t mean to.

“We work hard to get privacy right at Google. But in this case we didn’t, which is why we quickly tightened up our systems to address the issue,” Google said in a statement to VentureBeat

Google’s Street View cars weren’t just taking photos of city streets.

“The project leaders never wanted this data, and didn’t use it or even look at it. We cooperated fully with the Hamburg data protection authority throughout its investigation,” Google said.

The fine comes a month after Google made a $7 million settlement with U.S. states over the Wi-Fi snooping, and a year after the FCC fined the company $25,000 for obstructing its investigation of the case. Clearly, this is proving to be quite the costly mistake for Google.

But has it been costly enough? “In my view, this is one of the biggest data protection rules violations known,” Hamburg data regulator Johannes Caspar  told Bloomberg in a statement. Fining Google $189,230 for the “biggest data protection rules violations known” doesn’t seem particularly severe — especially since Google pulled in $14 billion last quarter.

Fortunately for Google, however, German data misuse fines are capped at 150,000 euros, which means German regulators couldn’t have fined Google much more money if even if they had tried.

Still, privacy and data charges against Google persist. Earlier this month the European Union recommended that member states start their own investigations into Google over the unified privacy policy the company introduced last year.

Photo: Flickr/Justin Taylor 

Today, the digital notebook service announced a partnership with Deutsche Telekom which means nearly 60 million of the telecom giant’s customers will be eligible to receive one year of Evernote Premium. With over 45 million users, worldwide reach, and over $250 million in venture capital, Evernote is well on its way towards world domination, of online note taking that is.

Through this offer, subscribers can request an upgrade for Evernote Premium through their Deutsche Telekom account or by launching the latest version on their Android smartphones. The deal is the latest in a string of international telecom carrier partners- Evernote has also struck deals with NTT Docomo in Japan, Orange France, KT in Korea, Taiwan Mobile, and Docomo Pacific.

These types of agreements serve to cement and expand Evernote’s global footprint by distributing it to millions (upon millions) of potential global consumers. Once they are given a taste of Evernote Premium, the hope is they will continue to pay for it after their free trial is up. Evernote Premium costs $5 a month or $45 a year. In exchange for the fee, users have access to larger upload capacity, top priority customer support, offline notebooks, PDF and document search, collaboration tools, note history, larger files and bigger notes, and hidden promotions.

Evernote’s tagline is “remember everything” and it is a useful tool for keeping track of life’s (and thee web’s) little details. The service can be used for anything from recipe documentation to meeting minutes, and CEO Phil Libin told VentureBeat in an exclusive interview that his goal is to actually boost cognitive abilities by turning Evernote into an “external brain.”

The company recently began focusing more on its business platform. Evernote Business has all the features of the consumer-facing products with additional business-only tools like an administrative console to invite, add, and manage new employees and keep all of the business notebooks organized in a shareable library. Earlier this year Evernote continued the expansion of the business product into 26 new countries in Europe, signaling a transition towards making money from businesses rather than consumers.

Evernote is the top note-taking app out there, but just last week reports came out that Google is working to release a note-taking app called Keep that would challenge Evernote’s dominance. While 45 million is a hefty user base, Google Apps has more and could steal users away from Evernote because it is already part of the Google ecosystem.

Partnering with Deutsche Telekom will help Evernote gain a hold in Germany, which is rising quickly as an international tech hub. The two companies are also co-hosting a Hackathon in Berlin in April, which will be held at Deutsche Telekoms new startup space. The event will “encourage developers and designers to imagine and create new apps” using Evernote API and Deutsche Telekom’s Developer Garden.

Photo Credit: momentcaptured1/Flickr 

Today, Google and its hardware partners Acer, HP, and Samsung will begin selling Chromebooks in six new countries: Australia, Canada, France, Germany, Ireland, and the Netherlands. And in the U.S., Chromebooks will now be available at over 1,000 Best Buy stores nationally, which doubles the number of physical stores that Google’s  the-browser-is-the-operating-system laptops are sold in.

International pricing will be roughly similar to the U.S., with Canada getting Chromebooks at $250-330, and $300-350 in Australia. But expect to pay a little more in Europe — in France and Germany, they’ll start at around 300 euros, which is close to $400 U.S.

It’s not exactly $99 education pricing, but it’s still fairly cheap.

Google’s first international expansion with Chromebooks to the UK appears to have been a success. Google reported that Chromebook accounts for more than 10 percent of laptop sales in leading UK electronics retailers Currys and PC World.

Google recently released a high-end touchscreen Chromebook for $1,299, which is not being released internationally, and with HP the biggest Chromebook yet, a 14″ model.

Google won’t have to pay German news publishers to show short snippets of news, thanks to Chancellor Angela Merkel’s parliamentary coalition. But the law doesn’t specify how long those snippets can be. And the publishers association is also claiming victory, saying that the new legislation allows them to decide how Google — and others — can use their content.

In other words, Germany has replaced a complete mess with an entirely new complete mess. Which is perfectly reflected in the news coverage:

Bloomberg reports that “Google defeats publishers over web copyright in German vote.” GigaOm reports that “German parliament passes ‘Google tax’ law, forcing royalty payments for news snippets.

Which means no one has a clue.

The good part for Google is that the new law says aggregators can display “single words or very small text excerpts” without paying royalties. The good part for German publishers — according to the publishers — is that they get to choose whether and how aggregators use their content:

An automatic right of use is not associated with the approved scheme. Rather, it is open to publishers to make the business decision that they agree with search engines and aggregators who wish to use the content for commercial publishing.

[This] gives the publishers a fair policy instrument with which to make decisions on the commercial use of their content by search engines and aggregators themselves. This is a real signal of parliament, which underscores the value of a free press and journalistic content.

The worst part of the new law would seem to be the fact that the bill does not define what “very small text excerpts” are. Is that five words? Ten? The first paragraph? The phrase is completely open to interpretation, and putting “single words” just before it only makes them trend to really, really, really small. A quick check of Google News reveals that an average snippet on the site right now seems to be in the 20-  to 30-word range.

Does that count? Will a judge in a new case brought a few months from now agree that 20-30 words is “very small?”

All of which means that the short version of this article is: Google and news publishers in Germany are going to have more problems before this all gets figured out, and this recent legislation was a complete waste of time.

photo credit: dullhunk via photopin cc

Windeln.de is a German online retailer for baby products, and it has tucked away $19.6 million (€15 million). In 2012, the company developed faster than a healthy toddler, and this financing will support continued growth.

Known as the Diapers.com of the German-speaking world, Windeln’s inventory includes includes more than 20,000 products from 300 companies, including diapers, baby good, toiletries, and pacifiers. Parents can easily place orders for their baby needs online and have them delivered to their door. Prices are lower than in many physical retailers, and parents of newborns appreciate the convenience of shopping from home.

Windeln had a successful year in 2012. According to a statement, it grew by more than 300 percent and now has a revenue run rate of $65. 34 million (€ 50 million). Furthermore, almost 70 percent of orders originate from existing customers. These are enticing numbers for investors. As such, existing investor DN Capital and new investor MCI led this funding round, with participation from Acton Capital Partners and 360 Capital. Each of these firms have European offices and will support Windeln’s expansion into new European markets.

The idea for Windeln was born when founder Constantine Urban and his wife, Victoria, were vacationing with their children on the North Sea in 2009. As young parents, they wished they didn’t have to lug large boxes of diapers to-and-fro — or panic when they ran out of the one kind of baby food their child liked. Urban founded Windeln in Munich in 2010.

Babies aside, Germany is one of the hottest markets for startups in Europe. Venture capital firms and incubator programs are setting up shop in Berlin, and the thriving cultural landscape presents a desirable environment for young, hungry entrepreneurs.

Babies may be expensive, but like startups, there is enjoyment in watching them grow up. Read the press release. 

Photo Credit: Shutterstock

“The decisions are more than amazing,” said Thilo Weichert, a German privacy commissioner, in a statement.

Instead, the court ruled that German law does not apply since Facebook’s European office is in Ireland and its German subsidiary is only a sales and marketing office.

But the government data protection agency, which plans to appeal, said that the real name policy is “undoubtedly contrary to … the German Teleservices Act,” and that it was bizarre to say that Irish law should apply, because the Irish office does not actually manage the storage and processing of real names either. Never mind, of course, that the accounts are actually created in Germany, so the data originates on German soil.

This is a tough issue for governments and privacy organizations.

Social networks — and the Internet itself — do not lend themselves easily to regulation that differs based on colors on a map. And the data that they collect in one country might be analyzed and processed in another, stored in multiple other nations, and transferred through any number of other nations when being requested from locations all over the world.

In fact, with cloud services and content delivery networks, it’s likely that in most cases networks, users, and governmental organizations really don’t know where all of their data is at any given time.

All of which begs the question: Who has jurisdiction?

Apparently, according to a German court, Irish law has jurisdiction over German citizens’ data privacy. Which really means that U.S. law and a U.S. corporation has precedence over what German citizens can and cannot do. And which, as Weichert said, means that for a company to circumvent local regulation, it need only set up a subsidiary in a relatively regulation-free data-privacy zone — such as Ireland — to do business in Europe however it wishes.

Putting aside what role you think governments should play in regulating the Internet and social media companies, that’s interesting, to say the least.

photo credit: caribb via photopin cc

Today, Point Nine Capital announced its new $53.8M fund (€40M) to support early-stage European companies. The firm’s approach is to be “the angel VC.” The partners are focusing on mentoring entrepreneurs in areas such as Software-as-a-Service, eCommerce, marketplaces, and mobile.

Most of the investments are in consumer Internet technology, although it’s also done a slew of business-to-business product and enterprise management platform deals. Portfolio companies include Delivery Hero, Couchsurfing, Shiftplanning, Vend, Westwing, and Zendesk.

Berlin is setting itself up as a European hub for startups. Along with Point Nine, Rocket Internet is a well-known startup incubator and seed fund based in the German capital that makes investments around the world. Global venture capital fund e.ventures has offices in Berlin, and last year, Index Ventures made the city a priority as a startup hub.

The thriving art scene in Berlin means that large pool of creative talent and success stories have generated excitement about the possibilities for local startups. Well-known companies like SoundCloud and Etsy are either headquartered or have offices there, and Rally.org recently launched its European platform and incubator out of Berlin.

Mayor Klaus Wowereit said, “Berlin is poor, but sexy” back in 2004. Now, it is poor, sexy, and filled with entrepreneurs.

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“Tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good,” the president said.

There has been some progress already, Obama said, saying that four years ago, other countries dominated the clean energy market — and the jobs that come with it. Just one example is Germany, which has invested heavily in solar energy and has succeeding in powering up to half the country at times in the past year.

That foreign leadership of greentech is starting to change.

“Last year, wind energy added nearly half of all new power capacity in America,” Obama said.

President Obama

The technology industry has been leading the way. Google recently invested $200 million in a new wind energy project that brings the company’s total green power total to two gigawatts. Mobile rival Apple has also invested heavily in green energy, and CEO Tim Cook talked about its efforts today at the Goldman Sachs Technology and Internet conference

“I’m proud that we’re better at being environmentally friendly, and that we have the largest solar farm anywhere and can run our data center on renewable energy,” Cook said.

President Obama also wants to drive solar power, reduce the amount of power that is wasted by inefficient buildings.

Oil interests can take some comfort, perhaps in knowing that Obama also promised to “keep cutting red tape and speeding up new oil and gas permits.”

Here’s the full text of Obama’s comments on greentech:

Four years ago, other countries dominated the clean energy market and the jobs that came with it.  We’ve begun to change that.  Last year, wind energy added nearly half of all new power capacity in America.  So let’s generate even more.  Solar energy gets cheaper by the year – so let’s drive costs down even further.  As long as countries like China keep going all-in on clean energy, so must we.

In the meantime, the natural gas boom has led to cleaner power and greater energy independence.  That’s why my Administration will keep cutting red tape and speeding up new oil and gas permits.  But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.

Indeed, much of our new-found energy is drawn from lands and waters that we, the public, own together.  So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good.  If a non-partisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we.  Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long.  I’m also issuing a new goal for America: let’s cut in half the energy wasted by our homes and businesses over the next twenty years.  The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.

photo credits: andjohan via photopin cc, jmtimages via photopin cc

San Francisco private driver startup Uber is picking up speed in Europe, with an official launch last week in Berlin, and Milan as the next city on the list. What’s the strategy? “Lots of hustle,” as the company’s vice president of global operations Ryan Graves puts it.

Uber runs on a simple idea that’s picked up plenty of fans in the tech community: Download an app, sign up using your credit card details, summon a private driver, see who’s close and how far away they are, and pay effortlessly within the app.

The price tends to sit at 15 to 20 per cent more than the cost of a normal taxi cab. In exchange, Uber promises a superior car and reliable service.

In the U.S., the model proved enough of a hit for Uber to raise a $32 million round and, in late 2011, announce plans to expand to “two cities a month around the world.” Since then, the company has rolled out in new cities including London, Amsterdam, Stockholm, Paris, Berlin, Milan and Singapore (both still in test phase), and Sydney.

Berlin may prove a tricky market: With a few exceptions, it’s more known for tote bags and graffiti than glitz and business. It’s also a stronghold for Germany-founded taxi app MyTaxi and limousine service Blacklane.

Graves, Uber’s first chief executive and the current head of global operations, spoke to us in Berlin about why the city’s a good fit, plans to bring its lower-priced taxi service to Europe (“possible”), and how the company will avoid fights with regulators like those it had in Washington DC.

This story originally appeared on Venture Village, one of VentureBeat’s editorial partners, in Germany.

Hewlett-Packard is closing a corporate work site in Germany, laying off 850 employees.

In a statement, the world’s largest maker of PCs and printers said it will restructure its enterprise service business, which accounts for a quarter of the company’s total sales. HP’s will shut down its site in Rüsselsheim, Germany. HP has about 10,000 employees in Germany. The restructuring is likely to result in the loss of another 1,100 jobs there over time. The layoffs aren’t the first — and they won’t be the last — as the world moves toward post-PC technologies.

Those losing their jobs will receive a chance to apply for open jobs at other HP sites in Germany. HP took a charge of $1.7 billion for restructuring in its recent third fiscal quarter. Over time, HP plans to cut 29,000 jobs, or 9 percent of the company.

A HP spokesperson said in an email to ZDNet: “HP Enterprise Services has an aggressive plan to optimize its portfolio and its sales and delivery model, and to improve its cost structure, resource management and operations.”

[Image credit: Shutterstock]

A German court has ruled that the Internet is so essential to modern life that you ought to receive compensation if your service is interrupted.

As reported in by Reuters, the Karlsruhe Federal Court of Justice was trying a case in which a man lived sans DSL, thanks to his ISP, for two months in 2008 and 2009. The service disruption included the plaintiff’s VoIP phone service and even a fax line (hold the giggles, nerds). The judge ruled that Internet access was basic enough to his existence that the ISP should compensate him for his loss to the tune of €50 ($67) per day for the duration of the outage.

“The Internet plays a very important role today and affects the private life of an individual in very decisive ways,” court spokesperson Dietlind Weinland told reporters.

“Therefore, loss of use of the Internet is comparable to the loss of use of a car. … It is the first time the court ruled that an Internet connection is as important a commodity as having a phone.”

This little story reminds us of some words of wisdom from Vint Cerf, one of the founders of the Internet itself and an all-around fantastic human being. In a controversial opinion piece, Cerf stated that Internet access is not in itself a human right. “Over time, we will end up valuing the wrong things,” he wrote.

In a followup interview with VentureBeat, Cerf stressed that while we all have a moral obligation as technology creators to ensure technology can be used to promote and enhance civil and human rights, he and many others are also concerned about overregulation of technologies, especially by governments.

Image credit: screen capture of Phillip J. Fry from Futurama, the original image used for the “Shut Up and Take My Money!” Internet meme

Payleven is a payments startup based in Germany that turns mobile devices into point-of-sale terminals through the use of a dongle. A dongle, for those of you who may be out of the lingo loop, is a small piece of hardware that plugs into a device, and Payleven’s enable credit card transactions.

Square is the most well-known first startup to send the dongle to the soaring heights of popularity it now enjoys. Payleven is applying similar technology and business models to the European market. A statement issued by the company claims it is the first company in Continental Europe to fulfill the high security standards required for this type of product and service. Payleven has worked closely with Visa to ensure the standards are appropriate and up to snuff.

For this, it has raised a vague “high single-digit USD million funding” from a mysterious, new, unnamed investor. Previous investors New Enterprise Associates, Holtzbrinck Ventures, ru-Net, and Rocket Internet also contributed to this round. It will contribute to growing Payleven’s merchant base. Most of the clients are small and independent businesses that need an easy way to accept credit card payments. Payleven takes a small percentage of every transaction and there is no minimum turnover or fixed fee.

Payleven is currenty available in Germany, the Netherlands, Italy, Great Britain, Poland, and Brazil. It has 70 employees, with headquarters in Berlin and an office in London.

Munich-based Paymill has raised €10 million ($13.2 million) for its API that quickly and easily enables online credit card payments.

Similar to the San Francisco-based startup Stripe, Paymill offers a “quick start” solution for online stores and service providers to set up an online payment system. All they have to do is copy and paste a few lines of code and “poof!” E-commerce.

Paymill charges a 2.95 percent of the transaction amount, as well as 0.28€ ($0.37) for every successful transaction. The service is secure, and Paymill offers documentation and support for its customers. From the dashboard, businesses can track the amount of clients, transactions, turnover, and success rate over time.

The company launched in Munich in June of 2012 and quickly became active in 34 countries. According to a statement, “Paymill is the first provider to have brought the simple and user-friendly technical solution to Europe.” As the European technology community and e-commerce continue to heat up, so does the demand for simple payment integrations.

Paymill will use the funding to develop the technical platform and improve customers support efforts, as well as continue to enter new markets. German accelerator Rocket Internet, Holtzbrink Ventures, RI Digital, and Sunstone Capital contributed to this round, which comes to over $13 million.

Within the past few months, McClure’s has established 500 Startups funds in Mexico and India and revealed that over half of its latest class is based outside of the US. Germany is taking off as a entrepreneurial hub in Europe, so it is no surprise that McClure wants to have a presence in this market.

Versus IO is a comparison engine based on a natural language algorithm. It culls information from around the web to present a straightforward side-by-side perspective. Users enter two things they want to compare, such as electronic products, cities, or services, and the system will present a list of pros and cons.

Pitting the Apple iPhone 5 against the iPhone 4s indicates that the iPhone 5 is thinner and lighter with higher resolution and more RAM memory. A comparison of San Francisco and New York reveals that San Francisco is closer to mountains, notably more Facebook users, a greater number of singles, and a lower murder rate. New York, on the other hand, has more airports, a younger overall population, and is more ethnically diverse.

The German startup launched six months ago as a product comparison engine. It introduced the city comparison engine in October and now includes 240 cities, factoring in over 100 criteria such as education, crime rates, economy, climate, and infrastructure. Now, the site can make 10 million comparisons, is available in 18 languages, and receives 2.5 million visitors a month.

German investors HTGF and JMES Investments put $879K into Versus IO in April. The team works out of The Factory, a startup incubator in Berlin that received €1 million from Google in November.

Next on the agenda, 500 Startups Antarctica fund?

Mobile advertising platform Trademob is announcing a $15 million round of funding tomorrow. This German company applies data analytic technology to marketing so app developers can optimize their active users, in-app engagement, and revenue.

Trademob has partnerships with over 100 mobile ad networks so its customers have access to worldwide distribution opportunities. It draws together information across all these networks, providing real-time tracking and analysis of user interaction and marketing efforts. All this data is consolidated into actionable reports that businesses can use to inform their advertising campaigns. Clients include eBay Classifieds, Universal Music, as well as a long list of European applications.

Trademob launched in November of last year and since then as seen monthly growth in revenue and the client base. Its platform reaches more than 500 million smartphone users and this round of funding will be put towards growing its global presence. The investment was led by Kennet Partners, which put in $12.5 million, supported by money from existing investors Tengelmann Ventures and High-Tech Grunderfonds.

Early this year, Twitter created the capability to block tweets and users by country, while still allowing Twitter users — err, customers — in other countries to see them. Now the 140-character social network has done so for the very first time, as MarketingLand reported.

Twitter’s top lawyer confirmed it, by tweet, of course:

We announced the ability to withhold content back in Jan. We're using it now for the first time re: a group deemed illegal in Germany.

—
Alex Macgillivray (@amac) October 18, 2012

Twitter had received a request to close the account from German police, and recorded it, as is Twitter policy, on the Chilling Effects anti-censorship website:

The enclosed letter gives you the information that the Ministry of the Interior of the State of Lower-Saxony in Germany has banned the organisation “Besseres Hannover.” It is disbanded, its assets are seized and all its accounts in social networks have to be closed immediately. The Public Prosecutor (State Attorney’s Office) has launched an investigation on suspicion of forming a criminal association.

It is the task of the Polizeidirektion Hannover (Hannover Police) to enforce the ban.

The organisation “Besseres Hannover” uses the Twitter account
besseres-hannover@hannoverticker

https://twitter.com/hannoverticker

I ask you to close this account immediately and not to open any substitute accounts for the organisation “Besseres Hannover”.

The blocked group is allegedly a neo-Nazi organization in Hannover, Germany, where for obvious historical reasons neo-Nazi organizations are illegal. Due to Twitter’s country-specific method of dealing with censorship, however, the account has not been closed.

The tweets and account are still available and visible from other countries … so the organization is now complaining, in English, about German censorship:

Look at this regime: They gossip viciously about china and russia but noone about them! freedom for #germany! #censorship #injustice #brd

—
besseres-hannover (@hannoverticker) October 18, 2012

While people in Germany theoretically cannot see this account, country reality bubbles are easy to pop.

Anyone can, with a very limited amount of technical knowledge and software fiddling, appear to come from just about anywhere else. Firefox, for instance, offers Geolocater, which allows you to spoof sites’ geo-location routines with just a few clicks. Or you can use a proxy server, or pay for services like the wonderfully-named Hide My Ass private VPN.

Generally, people use these for connecting to country-specific video content. But they could also be used to circumvent Twitter and Google country blockages.

Which, when the content is allegedly neo-Nazi hatred, is not a great thing. But I guess the price of freedom is the risk that some will be assholes.

photo credit: S@Z via photopin cc

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Patent litigation victories are few and far between for Motorola, which has lost quite a few of them over the past few months.

But the story is a bit different today. In a rare but welcome victory, German courts ruled that Motorola did not infringe on Microsoft’s patent for technology that allows applications to run on different phones without the need for separate code. That may not seem like the type of thing a company should be able to patent, but the favorable ruling is still good news for Motorola.

“We are pleased with today’s favorable outcome for Motorola Mobility,” Motorola told VentureBeat.

The German patent battlefield hasn’t been kind to Motorola, which has lost a series decisions to Microsoft in the country. Previous cases related to software keyboards, Microsoft’s File Allocation Table (FAT), and web video encoding.

Ironically, patents were the primary reason Google bought Motorola for $12.5 billion last year. But not even Motorola’s trove of 17,000 or so patents have been able to protect it from Microsoft.

Germany has been a central battleground in the patent wars because litigation there is both cheap and quick. That’s very enticing for companies like Motorola and Microsoft, which have been locked in multiple litigations with multiple competitors at the same time.

Photo: VentureBeat/Ricardo Bilton

Google’s European chief Matt Brittin has described a new proposed copyright law in Germany as “like putting up a big sign saying ‘we don’t understand the Internet’.”

The “ancillary copyright” law, in its draft form, would make search engines, including Google, pay for reproducing newspapers’ headlines and first paragraphs in search results.

“I’m concerned about it, not just as somebody who’s passionate about the Internet but also as a former newspaper publisher myself,” Brittin – Google’s VP for central and northern Europe and an ex-director at Trinity Mirror – said, speaking at Google’s office in Berlin.

He pointed out the clear value for businesses in adding online marketing (“four to eight times faster” growth) and estimated the size of the Internet economy – infrastructure, devices, access payments, and Internet-based transactions – at three to four percent of GDP in Europe. “It’s estimated it’ll be about 12 percent of European GDP by 2016.”

Newspaper publishers would seem to be the big losers as businesses’ marketing spend migrates to search engine optimization (SEO) and management (SEM) – with advertising through initiatives such as AdWords making up 96 percent of Google’s $37.9 billion revenue in 2011. Would Brittin agree this shift cuts resources available for journalism – justifying the bid to claw some back in Germany?

“We’re going through a big structural shift [in] how information is shared and produced,” he told VentureBeat syndication partner VentureVillage. “I don’t remember the stats for Germany offhand. … In Austria, 50 percent of advertising spending is on newspapers, I think – it’s about 10 percent of people’s time spent on newspapers, so this is an unsustainable thing.”

His advice for newspaper publishers and other vertically-integrated media companies is to pick what they do best and make the most of new ways to connect with readers online:

I was talking to the editor of the Guardian in the UK – he said that in the early 1960s, I think it was, they had 652 overseas readers. They now have 30 million. … They probably won’t make as much money per reader as they used to when they basically controlled the entire public sector jobs ad market, but that seems like a big opportunity and that’s how we’d like it to work.”

Google News and Search sends about four billion clicks per month to publishers’ websites, he said – with the implication that limiting that isn’t the best fix for the wider problem.

As for Google, arguably approaching monopoly status itself, Brittin was confident initiatives such as the Data Liberation Front, to help users switch to non-Google products, will keep the company honest. “You can Google for other search engines.”

Anyway, it’s not the likes of Yahoo the company is worried about. “It’s people like them”, Brittin said. “It’s two guys in a garage or, hopefully, two women in a Berlin startup unit – it’s the people who come up with something none of us have ever thought of.”

Brittin spoke in Berlin on Friday as part of the M100 Sansoucci Colloquium, part of Medianwoche @ IFA 2012.

This story originally appeared on VentureVillage, VentureBeat’s Berlin-based syndication partner.

Takeout delivery has been around long before the Internet existed. It’s an easy option for a families without the time to prepare a home-cooked meal or college students locked in their room studying. While it was already a service of convenience, European-based company Delivery Hero strives to make ordering food even more convenient.

Delivery Hero has raised $50 million for its site that lets customers order meals online. You may not have realized ordering takeout was inefficient, but Delivery Hero streamlines the process by eliminating the need to sort through dozens of yellowing takeout menus, pick up that primitive piece of equipment the telephone, attempt to communicate the names of exotic-sounding dishes, and scramble up enough cash to pay at the door.

Hungry customers in Germany, the U.K., Australia, Sweden, Finland, Korea, Russia, Poland, Austria, Switzerland, Mexico, Spain, Belgium and can peruse menus from local restaurants, place orders, and pay on the site, and then wait for the food to arrive. Over 22,000 restaurants are in the network, and the funding will go toward adding more, as well as delivering in new markets around the world.

Delivery Hero is part of Team Europe, a Berlin-based startup incubator program that has built a portfolio of 10 companies. To date, it has raised over $100 million, including $31 million in April to acquire the delivery service OnlinePizza Norden Group. This fourth round was led by existing investor Kite Ventures, with support from Kreos Capital.

With its primary competitor Just-Eat tucking away $64 million in new funding four months ago, this money will fuel Delivery Hero in the heated race to be the biggest takeaway delivery service in the world. Just -Eat currently operates in France, Denmark, the Netherlands, China, Estonia, Norway, Berlin, Ireland, the U.K., Brazil, India, Canada and Italy.

If this contest heats up anymore, Europe may become a battleground of flying pizzas and Kung Pao Kung Fu.

Germany launched another privacy investigation against Facebook today, after attempts to get the social network to alter its facial recognition technology failed.

According to The New York Times, Germany believes Facebook is wrongfully collecting an archive of identifiable photos without the permission of the people in those photos. Facebook’s photo recognition tool comes in handy when users upload photos and are tagging their friends. Facebook will look at the photos and suggest tags based on what it knows about that friend’s face. It’s not 100 percent accurate, but it does speed up the tagging process. At this point, you are automatically opted into the feature, but you can opt-out.

Data protection commissioner Johannes Caspar spoke with the Times, saying he and Facebook had been in contact. He demands the social network delete any photos it has collected in Germany. If it wants to collect more images, he requests that Facebook switch its system from “opt out” of facial recognition to asking for permission before collecting the data.

“We believe that the photo tag suggest feature on Facebook is fully compliant with EU data protection laws,” Facebook said in a statement. “During our contentious dialogue with our supervisory authority in Europe, the Office of the Irish Data Protection Commissioner, we agreed to develop a best practice solution to notify people on Facebook about photo tag suggest.”

Facebook is working with the Office of the Irish Data Protection Commissioner to create a way to properly alert users to Facebook’s features and gaining their approval.

Facebook recently settled privacy-related charges with the U.S. Federal Trade Commission. The FTC launched its own investigation into Facebook in 2009 when the social network instituted a new privacy policy and changed user privacy settings without gaining explicit permission beforehand. In the settlement, Facebook agreed to 20 years of privacy audits performed by a third-party auditor.

German flag image via Shutterstock

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apple won a split-decision in a German court against Samsung’s Galaxy tablets. The Dusseldorf Higher Regional Court banned Samsung’s smaller Galaxy Tab 7.7 in all EU countries, but the iPad maker lost an appeal to block sales of the Korean company’s larger Galaxy Tab 10.1N. The ruling in favor of  Samsung confirmed “that the Galaxy 10.1N does not infringe” upon Apple patents, the rival firm announced.

In February, the same German court ruled that design changes made to the Galaxy 10.1N was enough to withdrawal the initial injunction won by Apple. Apple was unable to change the court’s thinking on appeal.

However, Apple was able to further limit sales of the smaller Galaxy 7.7 tablet from the original ban in Germany to now across all EU member states.

“We will continue to take all available measures, including legal action, to protect our intellectual property rights and defend against Apple’s claims to ensure our products remain available to consumers throughout the European Union,” Samsung said in a statement to the tech blog The Verge.

Besides all of this preliminary back-and-forth, the two companies are still scheduled to face off in a trial in German courts. The German court’s rulings on the two injunctive measures appear to throw new focus on Samsung’s comments Monday that Apple ‘prefers lawsuits over licensing.’

Additionally, the split decision in Germany is just the latest round in a long-running battle between Apple and Samsung as the two competitors vie to control the hottest mobile sectors: tablets and smartphones. As we showed yesterday, Apple has had more courtroom wins aimed at the U.S. market, while European courts have not been so overwhelmingly favorable to Apple’s arguments.

“I think given the amount of money available, the shortage in Silicon Valley is in technical talent,” says Guericke, “I have no doubt that some European startups with strong talent and the right startup know-how will be able to out-execute Silicon Valley companies.” One of Guericke’s new tasks at EarlyBird will be to help European companies break into the U.S. market.

Guericke, who is German but studied engineering at Stanford and is based in Palo Alto, wants to support other European founders who could make a global impact. “My goal is to help portfolio companies to become a success on a global scale,” he explains.”I will probably end up working most closely with one or two founders who decide their best opportunities for global impact come from leading their business from Silicon Valley, while keeping most of the staff in Germany, where it is easier to attract and retain technical talent.”

I asked Guericke how European startups compare to their Silicon Valley counterparts. “European founders tend to think more about revenue early on. That can be an asset, but also somewhat limiting. However, given the greater impact you can have these days with modest or no funding, I think European entrepreneurs can break free of these constraints, and smart money will find them.”

Berlin has long been a startup hotspot and pulls in founders from all over Europe drawn by the cheap living costs, vibrant culture, and expanding startup scene. The founders of audiophile social network SoundCloud, for example, which recently raised $50 million, are Swedish. Ashton Kutcher’s latest Berlin investment Gidsy was started by a couple of brothers from Amsterdam. Kutcher, at least, makes following the smart money to Berlin look like fun.

Of all the overly oppressive music industry groups in the world, German royalty collections body GEMA definitely ranks near the top — especially after a recent court case the group won against Google’s YouTube.

GEMA, which represents over 60,000 German writers and musicians, brought a copyright infringement lawsuit against YouTube in 2010 due to 12 music videos that were uploaded to the site without permission. The German court ruled today that YouTube didn’t do nearly enough to prevent its users from posting that content.

As such, YouTube could get slapped with a huge bill to pay for all the music royalties from the 12 videos in question, as well as other videos in the future. The court also ruled that YouTube must implement more stringent filters for video uploads — this is on top of YouTube’s current filtering technology, which seems to do fine here in the U.S.

Forcing YouTube to pay royalties on music that its users uploaded actually gives the copyright holders an incentive to have their music illegally placed online. In the U.S., this type of situation is avoided with the DMCA, which states that the site in question of violating a copyright must remove the material within a reasonable amount of time after being alerted to it.

It’s likely that Google will appeal the German court’s decision. We’re reaching out to the company for further comment, and will update the post with any new information.

Photo via korosirego/Flickr; Via ZDnet

Much like the response to SOPA in the United States, online activists in Europe have been able to generate vigorous pushback through petitions and blackouts of certain sites. And while the movement against ACTA began on the internet, protests are being held in 60 Germany cities tomorrow.

While 22 out of 27 members of the EU have signed on to ACTA, many are now changing their tack in response to the public outcry. “I signed ACTA out of civic carelessness, because I did not pay enough attention,” said the Slovenian ambassador to Japan, Helena Drnovsek Zorko, who had signed. “Quite simply, I did not clearly connect the agreement I had been instructed to sign with the agreement that, according to my own civic conviction, limits and withholds the freedom of engagement on the largest and most significant network in human history, and thus limits particularly the future of our children.”

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Poor Apple. Those guys just can’t win. Especially in a certain German court, where they tried to sue Samsung over the design of the Galaxy Tab 10.1N tablet and Galaxy Nexus phone.

Last August, the iPad maker was granted a preliminary injunction to halt sales of the Galaxy Tab 10.1, a decision that one analyst called “an unmitigated disaster.”

However, today’s decision (in the case LG Muenchen 21 O 26022/11) applies to a revised version of the same tablet. The Tab 10.1N was created and marketed in Germany to circumvent the ban.

Where the 10.1N is concered, the Munich Regional Court turned down Apple’s request for a ban on grounds of patent infringement. The patent in question covers a seemingly minuscule piece of technology: a UI element to show a user when he or she has reached the end of a scrolling page.

“Samsung has shown that it is more likely than not that the patent will be revoked because of a technology that was already on the market before the intellectual property had been filed for protection,” said judge Andreas Mueller in his ruling today.

The fight is far from over, however; Apple is also going after Samsung over the Galaxy S Plus and the S II, also attempting to ban sales in Germany.

Last year, Apple also won a temporary ban on the Tab 10.1 in Australia, and Samsung itself took a few patent-related shots at Apple in a French court in the fall of 2011.

The patent lawsuits between these two contenders began back in April 2011 — that’s when Apple first started making patent claims about the Samsung Galaxy lineup. The first suit in the ongoing barrage was filed in the U.S. District Court in Northern California, Apple’s home turf.

It never gets old, folks. Just kidding; it really, really does. Here’s hoping the lawsuits stop soon and the gadgets flow freely across the EU and everywhere else.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

A German court sided with Motorola in a patent lawsuit against Apple today, granting an injunction against the iPad and iPhone maker. Apple said it plans to appeal the decision.

Motorola’s lawsuit, which was filed in April 2011, accuses Apple of using patented cellular data transmission technology in its iPhones and 3G iPads without paying. Motorola can pursue the injunction by posting a $133 million bond, prohibiting Apple from selling the offending devices in Germany unless Apple removes the technology.

“We’re going to appeal the court’s ruling right away. Holiday shoppers in Germany should have no problem fiddling the iPad or iPhone they want.” Apple said in a statement.

Apple has defended its use of the technology on FRAND (fair, reasonable, and non-discriminatory) terms. When a technology is classified as FRAND, the owner of the patent is required to license it to other companies for a fee, since the technology is considered essential to an industry. And Motorola does in fact license this same patent (a “method for performing a countdown function during a mobile-originated transfer for a packet radio system”) to other companies.

Apple is offering to pay the fees going forward, but it’s too little too late. The company has used the technology in its 3G products, without coughing up payment, for years. Apple fought against paying past due amounts, causing the German courts to side with Morotola.

This is just the latest court decision in a back-and-forth patent battle between the two companies that goes back years, and will most likely continue well into the future.

Gavel image via Shutterstock

The report indicates that Hulu is in talks with many major German TV networks to reach a deal that would allow the service to stream content throughout the country. Previously, Hulu was unsuccessful in reaching deals with European TV networks because many of them had plans to start their own online, on-demand services. However, German regulators blocked such actions by the country’s networks, seemingly leaving the door open for Hulu.

While there aren’t many details about the discussions, it’s likely that Hulu will only offer a premium subscription model to German consumers. This is the model the company is using in Japan — the company’s first expansion into international markets — earlier this year. It’s also unlikely that Hulu will launch a Germany-based service until it has enough content from local TV networks, as the current offering of U.S. content wouldn’t provide nearly as much value.

Expanding into international markets is a good move for Hulu. The company’s owners, composed of major U.S. TV networks,  failed to sell Hulu earlier this year because potential buyers were worried that the service’s value depended entirely on content agreements with the very same TV networks that owned Hulu. By expanding into new countries, Hulu can prop up its value.

[Via GigaOM]

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Samsung is now allowed to sell its Galaxy Tab 10.1 tablet again in most of Europe after a German court lifted an injunction on the device requested by Apple.

Avi Greengart, research director for consumer devices at Current Analysis, thinks Samsung should be pleased with the win but said the company should expect similar legal battles in the coming days and weeks.

“Samsung is certainly breathing a sigh of relief,” Greengart told VentureBeat. “Tune in tomorrow for the next exciting legal development.”

Last week, Samsung said it was “disappointed” when the German court blocked the sale of the Galaxy Tab 10.1 in the EU (except the Netherlands) on the grounds that the Tab imitated the iPad so closely it infringed on Apple’s intellectual property rights. Samsung could have faced fines up to $350,000 per unit sold under the ban.

The Duesseldorf regional court took this back today by saying it was questionable whether it had the authority to bar the sale of an international product outside of Germany. Since Samsung is based in South Korea, the court said the ban should be lifted for now.

The news is yet another continuation of Apple’s legal squabbles with Samsung, which started in April with a lawsuit in the U.S. concerning the company’s Galaxy Android smartphones and Galaxy Tab. Apple argued that Samsung’s devices considerably imitated the iPhone and iPad. Samsung filed a counter-suit against Apple, but the battle also extended to the U.S. International Trade Commission, which can block the importation of devices into the U.S.

What do you think of the ongoing battle between Apple and Samsung?