News

Benchmark Capital Red Herring 100 European Winners

7digital

LOCATION London, England
URL www.7digital.com
SECTOR Entertainment/Media
FOUNDED 2004
CEO Ben Drury
EMPLOYEES 25
FUNDING N/A
KEY INVESTORS Benchmark Capital Europe

Music lovers who don’t like iTunes’ closed nature will be pleased with 7digital. Unlike most major competitors, the media delivery company’s open platform supports any file format (MP3, AAC, MPEG4, and the like) and sells tracks by all kinds of musicians. Big labels like Sony BMG and Universal have signed on to the startup’s digital download service, as have not one but two unsigned Vietnamese bands. The site is live in the United Kingdom and Germany, but as it expands into new European markets the various regulatory authorities, tax systems, and music royalty collection agencies could be tough for the startup to steer through.

Rebtel

LOCATION Stockholm, Sweden
URL www.rebtel.com
SECTOR Communications
FOUNDED 2006
CEO Hjalmar Windbladh
EMPLOYEES 30
FUNDING $15.76 million
KEY INVESTORS Index Ventures, Benchmark Capital

Rebtel’s session initiation protocol (SIP)-based technology uses the Internet to connect local calls around the world, cutting out international charges. It requires no special software and is available in 38 countries where consumers place local phone calls to connect with others across borders. Users register both their own and target numbers with Rebtel, which assigns local numbers to each via SMS. One person initiates the call and the called party hangs up and dials back. Rebtel’s software server then joins both ends of those calls in a VoIP call. Rebtel plans to make money by taking a cut of call fees and by charging customers a subscription fee of $1 per week. Despite facing competitors like Truphone and Fring, VoIP guru Jeff Pulver reckons Rebtel could be bigger than Skype.

LOCATION Stuttgart, Germany
URL spodtronic.com
SECTOR Entertainment/Media
FOUNDED 2002
CEO Mikko Linnamäki
EMPLOYEES 42
FUNDING $12.4 million, 2 rounds
KEY INVESTORS Benchmark, Baytech

Time was, if you were listening to music on your phone it meant you were stuck on hold. No longer. Spodtronic/Liquid Air Lab offers a directory of over 300 radio stations from around the world, as well as podcasts and Internet radio, all playable on mobile phones. The company’s customers include Nokia, Sony, and Virgin Radio, as well as several mobile operators, and radio stations. If consumer uptake of music online is any measure, this could be a ripe market to exploit—sites like Pandora and Rhapsody have seen exponential traffic growth in the past year, according to comScore. However, the company’s business model—revenue-sharing with carriers—depends on customers’ willingness to pay their carriers for the privilege of the service, which can run about €5-10 ($6.60-13.20) a month.

LOCATION Bologna, Italy
URL www.yoox.com
SECTOR Internet/Services
FOUNDED 2000
CEO Federico Marchetti
EMPLOYEES 150
FUNDING N/A
KEY INVESTORS Benchmark Capital, Net Partners Groups, Kiwi Fund

Looking for Marni, Alexander McQueen, or Furla? If you’ve even heard of those expensive brands, you might also know about Yoox. With warehouse and shipping operations in Italy, the United States, and Japan, Yoox wants to corner the online market for exclusively high-end fashion. The company has also signed deals to build and operate retail sites for designers who wouldn’t place their carefully cultivated image in less fashion-savvy hands. Some fashion mavens make clothing lines just for Yoox, and up-and-coming designers sometimes debut here. But with new shopping sites entering the fickle world of fashion all the time, Yoox can never rest easy. U.S.-based Bluefly also has the big names, and un-hip eBay and Amazon may not have the edgy appeal, but more and more they do have the clothes.

LOCATION London, England
URL www.zopa.com
SECTOR Internet/Services
FOUNDED 2005
CEO James Alexander
EMPLOYEES 45
FUNDING $21 million, 2 rounds
KEY INVESTORS Benchmark Capital, Bessemer Venture Partners, Wellington Partners

Zopa is one of a new crop of sites that facilitate lending between individuals, doing an end run around traditional banks. The company was formed by a group of former executives from Egg, the first online bank. Currently, it only serves the United Kingdom, where it has garnered approximately 130,000 members. Venture backing will be used to expand into new markets. In the United States, it will have to compete against homegrown alternatives like Prosper and Circle Lending. Now the job is to build trust, essential in handling other people’s money but never easy to establish in new markets. Among other things, it requires implementing good security and risk assessment tools, which typically raise the barriers to entry in this market. And Zopa, at least, has crossed those barriers in the U.K.

LOCATION Bracknell, England
URL www.zubka.com
SECTOR Internet/Services
FOUNDED 2006
CEO David Shieldhouse
EMPLOYEES 9
FUNDING Undisclosed
KEY INVESTORS Benchmark Capital, David Shieldhouse, Armando Ruffini.

Do you refer friends for jobs, and wish you could be compensated for your efforts? You might consider joining Zubka, a job site that pays referral fees. Employers pay Zubka a finder’s fee and Zubka gives 80 percent of it to the person who referred the worker. The company gives another 5 percent to the person who introduced the referrer to its network. Zubka keeps the remaining 15 percent. The company says it helps employers reduce recruiting costs. Traditional headhunters typically charge a 20 percent finder’s fee; Zubka charges 6 to 10 percent. The company says 400 companies, including Cisco and Research In Motion, use its global service, which has 4,000 registered referrers. Zubka faces stiff competition from Monster.com, Jobster, JobMeeters, and H3.