Where to begin… Netflix darling Marie Kondo is hitting up Sand Hill Road in search of $40 million to fund an ecommerce platform, Y Combinator is giving $150,000 to a startup building a $380,000 flying motorcycle (because why not) and Jibo, the social robot, is calling it quits, speaking to owners directly of its imminent shutdown.

It was a hectic week in unicorn land so, I’m just going to get right to the good stuff.

Changes at Y Combinator

Where to begin! Not only did the prolific accelerator announce long-time president Sam Altman would be making an exit, but TechCrunch scooped the firm’s decision to move its headquarters to San Francisco. Y Combinator is going through a number of changes, outlined here. Interestingly, sources tell TechCrunch that YC has no succession plans. We’re guessing that’s because Altman had already mostly transitioned away from the firm, with CEO Michael Seibel assuming his responsibilities. The question is, is Altman planning to launch a startup? Hmmmmm.

Airbnb’s a hotelier

As it gears up for an IPO, Airbnb is showing its mature side. In a bid to accelerate growth, the home-sharing unicorn is buying HotelTonight in a deal said to be valued at around $465 million. Accel, the storied venture capital firm, was the business’s first-ever investors and is now its largest stakeholder. Oughta be a nice return. We’re still wondering whether it’s a cash deal, a cash and stock deal or an all-stock deal. Let me know if you’ve got the deets.

Mobility cuts

Lyft is preparing for its imminent IPO by getting lean. The ride-hailing company is trimming 50 staff members in its scooters and bikes unit, reports TechCrunch’s Ingrid Lunden. The cuts are mostly impacting those who joined the company when it acquired the electric bike-sharing startup Motivate, a deal that closed about three months ago. I’ll point out that Lyft employs 5,000 people; these layoffs are about one percent of their total workforce. And while we’re on the topic of mobility layoffs, Mobike, the former Chinese bike-share unicorn, is closing down all international operations and putting its sole focus on China.

Munchery goes bankrupt

Several weeks after a sudden shutdown left customers and vendors in the lurch, meal-kit service Munchery has filed for bankruptcy. In the Chapter 11 filing, Munchery chief executive officer James Beriker cites increased competition, over-funding, aggressive expansion efforts and Blue Apron’s failed IPO as reasons for its demise. Here’s the story, complete with Munchery’s bankruptcy filing.

Funders fundraise

This week Precursor Ventures closed its sophomore pre-seed fund on $32 million, NEA filed to raise its largest venture fund yet ($3.6 billion), SoftBank raised $2 billion on a $5 billion target for a Latin America Fund, aMoon raised $660 million for Israeli healthcare deals and Coral Capital brought in $45 million to make early-stage investments in Japan.

Here’s your weekly reminder to send me tips, suggestions and more to This email address is being protected from spambots. You need JavaScript enabled to view it. or @KateClarkTweets. 

Startup cash

Sea is raising up to $1.5B
Grab confirms $1.46B investment from SoftBank’s Vision Fund
Music services company Kobalt is raising roughly $100M
Eargo raises $52M for virtually invisible, rechargeable hearing aids
Matterport raises $48M to ramp up its 3D imaging platform
Netflix star and tidying expert Marie Kondo is looking to raise $40M
Blueground raises $20M for flexible apartment rentals

A16z gets even bigger

Andreessen Horowitz tapped David George as its newest general partner and its first top dealmaker focused on late-stage deals. George joins from General Atlantic, where he’d backed consumer internet, enterprise software and fintech startups as a principal since 2012. The firm’s swelling team is amongst the largest of any VC firm. Most partnerships consist of one to three top dealmakers and a few partners or principals. A16z breaks the mold with its ever-expanding team of GPs. We talked to George and a16z managing director Scott Kupor.

Worth reading

The Khashoggi murder isn’t stopping SoftBank’s Vision Fund, by TechCrunch’s Jon Russell and Jonathan Shieber.

SXSW

Stopping by SXSW? Meet TechCrunch’s writers at our annual Crunch By Crunch Fest party in Austin, Texas. RSVP here to join us on Sunday, March 10th from 1pm to 4pm at the Swan Dive at 615 Red River St. @ E. 7th St., just 3 blocks from the convention center. Hang out with TechCrunchers and fellow readers, enjoy free drinks and check out a live performance by electro-RnB musician Elderbrook.  And check out the full line-up of TechCrunch panels here. I will be discussing the double standard in sex tech with Lora Haddock, the CEO of Lora DiCarlo, on Thursday, March 14th at 2pm at the Fairmont Congressional A, 101 Red River.

Listen to me talk

This week on Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines, Crunchbase New’s editor-in-chief Alex Wilhelm and I discuss Y Combinator’s new HQ, Chime’s big funding round and SoftBank’s new Latin America fund. Listen here.

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I co-run an agency that teaches a hundred startups per year how to do growth marketing. This gives me a unique vantage point: I know which types of startups most often reach profitability.

That’s an important metric, because startups that don’t reach this milestone typically fail to raise additional funding — then die.

Here’s what we’ll learn:

Companies are increasingly living and dying by ads. Because it’s the startup’s approach to customer acquisition — not its business model or market — that most determines its early-stage profitability.E-commerce companies lend themselves best to ads, and SMB SaaS the worst. Meanwhile, most startup founders in 2019 are starting SaaS companies. They’d benefit from the data we share in this post.In fact, our agency has found that every other type of business reaches profitability quicker than SMB SaaS, including mobile apps, Chrome extensions and enterprise SaaS.

Our sampling of startups isn’t as biased as startup valuation leaderboards, because we also see those that failed. That’s the key.

You can use our experience to de-risk your startup. That’s what this post explores: How to change your product roadmap to pursue a path more likely to reach profitability.

The startups that frequently reach profitability

Here’s the data my agency is referencing for this post:

We train 12+ venture-backed and bootstrapped startups every month. Half are Y Combinator graduates. This is how we study early-stage product-market fit trends.We run ads full-time for between 20 and 30 mature companies per year. On average, each spends $2.5 million annually on paid acquisition. And, on average, each has 30 employees. Our clients include Tovala.com, PerfectKeto.com, SPYSCAPE.com, ImperfectProduce.com, Clearbit.com and Woodpath.com.Our students and clients are roughly evenly distributed across D2C e-commerce, B2B, mobile apps and marketplaces.

When we try to control for founder skill and funds raised, the types of startups that first reach profitability do so in this order:

E-commerceChrome extensionsMobile appsEnterprise SaaSSmall-to-medium business SaaS

On average, an e-commerce company is more likely to first reach profitability than an SMB SaaS company.

Before I explain why, let me explain how we’re differentiating startups: I use the word “type” instead of “business model” or “markets” because I’ve learned that business model and market are often not the best predictors of success. Instead, it’s your approach to customer acquisition. That’s what typically determines the likelihood of profitability.

Sam Altman, the well-known president of the prolific Silicon Valley accelerator Y Combinator, is stepping down, the firm shared in a blog post on Friday.

Altman is transitioning into a chairman role with other YC partners stepping up to take on his day-to-day responsibilities, as first reported by Axios. Sources tell TechCrunch YC has no succession plans. YC’s core program is currently led by chief executive officer Michael Seibel, who joined the firm as a part-time partner in 2013 and assumed the top role in 2016.

The news comes amid a series of shake-ups at the accelerator, which is expected to demo its latest batch of 200-plus companies in San Francisco March 18 and 19. In Friday’s blog post, YC expands on some of those changes, including the firm’s decision to move its HQ to San Francisco, which TechCrunch reported earlier this week.

“We are considering moving YC to the city and are currently looking for space,” YC writes. “The center of gravity for new startups has clearly shifted over the past five years, and although we love our space in Mountain View, we are rethinking whether the logistical tradeoff is worth it, especially given how difficult the commute has become. We also want to be closer to our Bay Area alumni, who disproportionately live and work in San Francisco.”

In addition to moving its HQ up north, YC has greatly expanded the size of its cohorts — so much so that its next demo day will have two stages — and it’s writing larger checks to portfolio companies.

Altman, who joined YC as a partner in 2011 and was named president in 2014, will focus on other efforts, including OpenAI, a research organization in which he co-chairs. Altman was the second-ever YC president, succeeding YC co-founder Paul Graham in 2014. Graham is currently an advisor to YC.

What if, instead of sitting on your phone on the sofa ordering stuff from Amazon, you could buy the same things locally from local stores that ultimately enliven and enrich your local neighborhood? What if by doing that, you wouldn’t be walking through deserted main streets, past boarded-up shops, dark alleys and graffiti? What if someone created a marketplace for independent businesses, local events and experiences that kept the money in the local economy rather than being siphoned off into global giants who don’t care about human-scale communities?

That’s the idea behind Pixie, a new take on the “shop-local app” startup model which, although it’s been tried before, has never quite managed to take off. Perhaps Pixie will have more luck?

Here’s how it works: The Pixie app connects people to independent businesses through a curated marketplace, incentivizing them to pay through the app and get rewarded for being loyal customers. Integrated into the app is Pixie Pay, a bespoke payment solution which keeps money in local hands.

The startup has a fascinating background. Whilst serving in the British Special Forces, Pixie’s founder Greg Barden understood that his mission was also to ‘win hearts and minds’ with the local population. Whether by buying bread from the local baker in a village in Afghanistan, or coffee from the market in Baghdad, he and his soldiers could tear down even the most hostile barriers.

He also realized that when more money stayed inside these the local economies rather than being sucked away by organized crime or large scale, globalized businesses, the local economy might flourish and the risk of the societies there becoming yet again destabilized could potentially diminish.

“Whether it was stalls in the bazaars of Baghdad or small boutiques on Bath high-street, I realized independent shop owners are linchpins in their community. They add variety to the mundane and nurture community spirit. Even local guardians need protecting sometimes, which is why we created Pixie.”

The threat to independent stores from globalization and digitization isn’t just happening in Afghanistan. Across the western world, ‘Main Street’ stores are closing at a prodigious rate. In the UK over 1,500 local stores closed in 2018. (And that was BEFORE Brexit…)

Pixie has stress-tested its idea in mid-sized town in the UK, including Bath, Frome and Sherbourne, completing transactions across 250 businesses, ranging from cafes to fashion boutiques, and spinning up 5,000 app users. It’s now going on the fund-raising trail, aiming to raise £500,000 in funding through its ‘Equity for Explorers’ campaign on Crowdcube a UK-based crowd-equity platform. The total addressable market for independent business in the UK is estimated to be £31.5bn in gross transactional value.

Barden — who last year spoke about his startup life at the launch of the military tech non-profit TechVets — says: “There might be thousands of independent businesses across the UK, but at the rate the high-street is disappearing they are severely under threat. Pixie isn’t here to turn people away from the bigger players on the high-street, but create opportunities for enriching discovery. Needless to say, in a world with increasing nationalism, Brexit, Trump and — dare I say it — Amazon, we feel Pixie has a huge part to play in countering the worst aspects of globalization.”

Pixie’s revenue comes from transaction fees taken when people use its ‘Pixie Pay’ payment mechanism. The payment system is designed to bypass Visa/Mastercard at the point of sale, whilst the loyalty scheme unites independent businesses under one umbrella, so the users can earn and spend their loyalty points (as money) across the entire Pixie community. If a store using Pixie is in Australia, a person from Bath could also use their points there. This keeps the money circulating inside local, independent stores, wherever they are on the planet.

Pixie distributes its own payment terminal that sits next to whatever the business has in place to take normal card payments (iZettle etc). The cards are contactless but don’t utilise visa MasterCard. It’s literally their own e-money system. Think PayPal where users can either add money to their balance by debit card or bank and/or link a debit card to Pixie if they don’t have a balance.

Obviously this also creates it an alternative to competitors like iZettle, Square, SumUp and WorldPay, but this time specifically aimed at local independent stores, not huge national and international chains.

The third element of Pixie is its discovery marketplace that gives its community of explorers (users) the ability to discover local businesses across the Pixie footprint of stores.

I’ve seen several startups try and tackle this problem, but it may well be that Pixie, under its charismatic leader, finally has a shot at cracking this idea around local markets.

The story of Elizabeth Holmes and Theranos has inspired quite a bit of content, including a NYT Best Seller, an ABC podcast, a movie starring Jennifer Lawrence and now an HBO documentary directed by “Going Clear” director, Alex Gibney.

The documentary is called “The Inventor: Out for Blood in Silicon Valley.”

The tech world was shocked when the WSJ broke the news that Theranos, the biotech startup founded by Elizabeth Holmes, wasn’t what it appeared to be.

Promising to revolutionize healthcare, Theranos wanted to accomplish the impossible by creating a device that could significantly speed up the time it takes to test blood and diagnose disease. This, it turns out, was actually impossible.

Elizabeth Holmes, the world’s youngest self-made female billionaire, was at the helm of the Theranos fantasy, which ballooned to a $9 billion valuation before being identified as a fraud by the SEC.

HBO documentary “The Inventor: Out for Blood in Silicon Valley” debuts on Monday, March 18, and catalogs the story through interviews with the reporters who documented it, whistleblowers, former Theranos employees and experts.

This includes John Carreyrou, author of “Bad Blood”; journalists Ken Auletta (The New Yorker) and Roger Parloff (Forbes), who wrote profiles of Holmes; Theranos whistleblowers Tyler Shultz and Erika Cheung; former Theranos employees Dave Philippides, Douglas Matje, Ryan Wistort and Tony Nugent; behavioral economist Dan Ariely; and Dr. Phyllis Gardner, MD, professor of medicine at Stanford University.

TechCrunch’s Josh Constine reviewed “The Inventor” after its Sundance premiere.

The documentary will be available on HBO, HBO NOW, HBO GO, HBO On Demand and partners’ streaming platforms.

[Video courtesy of HBO]

Ten years after the launch of Foursquare at SXSW, the company is laying its technology bare with a futuristic version of its old app that doesn’t require a check-in at all. The godfather of location apps is returning to the launchpad with Hypertrending, but this time it hopes to learn what developers might do with real-time info about where people are and where they aren’t.

Hypertrending uses Foursquare’s Pilgrim technology, which is baked into Foursquare’s apps and offered as a third-party enterprise tool, to show where phones are in real time over the course of SXSW in Austin, Texas.

This information is relayed through dots on a map. The size of those dots is a reflection of the number of devices in that place at a given time. Users can filter the map by All places, Food, Nightlife and Fun (events and parties).

Hypertrending also has a Top 100 list that is updated in real time to show which places are super popular, with arrows to show whether a place is trending up or down.

Before you throw up your hands in outrage, the information on Hypertrending is aggregated and anonymized (just like it is within Pilgrim), and there are no trails showing the phone’s route from one place to another. Dots only appear on the map when the phone arrives at a destination.

Hypertrending was cooked up in Foursquare’s skunkworks division, Foursquare Labs, led by the company’s co-founder Dennis Crowley .

The feature is only available during SXSW and in the Austin area, and thus far Foursquare has no plans to launch this publicly. So… what’s the deal?

First and foremost, Hypertrending is about showing off the technology. In many ways, Hypertrending isn’t new at all, in that it runs off the Pilgrim technology that has powered Foursquare since around 2014.

Pilgrim is the tech that recognizes you’ve just sat down at a restaurant and offers up a tip about the menu on Foursquare City Guide, and it’s the same tech that notices you’ve just touched down in a new city and makes some recommendations on places to go. In Swarm, it’s the tech that offers up a list of all the places you’ve been in case you want to retroactively check in to them.

That sounds rather simple, but a combination of Foursquare’s 10 years’ worth of location data and Pilgrim’s hyper-precision is unparalleled when it comes to accuracy, according to Crowley.

Whereas other location tech might not understand the difference between you being in the cafe on the first floor or the salon on the second floor, or the bar that shares a wall with both, Pilgrim does.

This is what led Foursquare to build out the Pilgrim SDK, which now sees more than 100 million user-confirmed visits per month. Apps that use the Pilgrim SDK offer users the ability to opt-in to Foursquare’s always-on location tracking for its mobile app panel in the U.S., which has grown to 10 million devices.

These 10 million phones provide the data that powers Hypertrending.

Now, the data itself might not be new, per se. But Foursquare has never visualized the information quite like this, even for enterprise customers.

Whereas customers of the Foursquare Place Insights, Pinpoint and Attribution get snapshots into their own respective audiences, Hypertrending represents on a large scale just what Foursquare’s tech is capable of in not only knowing where people are, but where people aren’t.

This brings us back to SXSW, which happens to be the place where Foursquare first launched back in 2009.

“This week has felt a little nostalgic as we try to get this thing ready to go,” said Crowley. “It’s not that dissimilar to when we went to SXSW in 2009 and showed off Foursquare 1.0. There is this curious uncertainty and my whole thing is to get a sense of what people think of it.”

Crowley recalled his first trip to SXSW with co-founder Naveen Selvadurai. They couldn’t afford an actual pass to the show so they just went from party to party showing people the app and hearing what they thought. Crowley said that he doesn’t expect Hypertrending to be some huge consumer app.

“I want to show off what we can do with the technology and the data and hopefully inspire developers to do interesting stuff with this raw visualization of where phones are at,” said Crowley. “What would you do if you had access to this? Would you make something cool and fun or make something obnoxious and creepy?”

Beyond the common tie of SXSW, Hypertrending brings Foursquare’s story full circle in the fact that it’s potentially the most poignant example of what Crowley always wanted Foursquare to be. Location is one of the most powerful pieces of information about an individual. One’s physical location is, in many ways, the most purely truthful piece of information about them in a sea of digital clicks and scroll-bys.

If this data could be harnessed properly, without any work on the side of the consumer, what possibilities might open up?

“We’ve long talked about making ‘a check-in button you never had to press,’ ” said Crowley in the blog post. “Hypertrending is part of that vision realized, spread across multiple apps and services.”

Crowley also admits in the blog post that Hypertrending walks a fine line between creepy and cool, which is another reason for the ephemeral nature of the feature. It’s also the exact reason he wants to open it up to everyone.

From the blog post:

After 10 years, it’s clear that we (Foursquare!) are going to play a role in influencing how contextual-aware technologies shape the future – whether that’s apps that react to where you are and where you’ve been, smarter virtual assistants (e.g Alexa, Siri, Marsbot) that understand how you move through cities, or AR objects that need to appear at just the right time in just the right spot. We want to build a version of the future that we’re proud of, and we want your input as we get to work building it.

And…

We made Hypertrending to show people how Foursquare’s panel works in terms of what it can do (and what it will not do), as well as to show people how we as a company think about navigating this space. We feel the general trend with internet and technology companies these days has been to keep giving users a more and more personalized (albeit opaquely personalized) view of the world, while the companies that create these feeds keep the broad “God View” to themselves. Hypertrending is one example of how we can take Foursquare’s aggregate view of the world and make it available to the users who make it what it is. This is what we mean when we talk about “transparency” – we want to be honest, in public, about what our technology can do, how it works, and the specific design decisions we made in creating it.

We asked Crowley what would happen if brands and marketers loved the idea of Hypertrending, but general consumers were freaked out?

“This is an easy question,” said Crowley. “If this freaks people out, we don’t build stuff with it. We’re not ready for it yet. But I’d go back to the drawing board and ask ‘What do we learn from people that are freaked out about it that would help us communicate to them,’ or ‘what are the changes we could make to this that would make people comfortable,’ or ‘what are the things we could build that would illustrate the value of this that this view didn’t communicate?’ ”

As mentioned above, Hypertrending is only available during the SXSW conference in the Austin area. Users can access Hypertrending through both the Foursquare City Guide app and Swarm by simply shaking their phone.

Entrepreneurs are invited to the 435th FREE online 1Mby1M mentoring roundtable on Thursday, March 14, 2019, at 8 a.m. PST/11 a.m. EST/4 p.m. CET/8:30 p.m. India IST. If you are a serious...

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Serial Box, a startup bringing back the tradition of serialized fiction, has raised $4.5 million in seed funding.

The company actually disclosed the funding last week when announcing a partnership to produce stories about Marvel characters, but it’s sharing more details about the round — namely, the fact that it was led by Boat Rocker Media, with participation from Forerunner Ventures, 2929 Entertainment co-founder Todd Wagner and Japanese business intelligence and media firm Uzabase.

“We carefully chose trusted partners for this round of investment,” said co-founder and CEO Molly Barton in a statement. “They see the big opportunity that we do to retool reading for the smartphone age, to take the best elements of traditional book publishing and innovate with influences from the audio, podcast, gaming and TV industries.”

Serial Box publishes stories in text and audio format, broken up into weekly episodes. The first episode of each story is free — then if you’re hooked, you can pay $1.99 for additional episodes or sign up for a season pass.

The idea of making readers and listeners wait for the next chapter of the story may seem strange. Hasn’t Netflix trained us to want to binge the full season, as soon as possible? Maybe, but anyone who has watched “Game of Thrones” week-to-week knows that there’s still immense pleasure in waiting for smaller chunks of the larger story.

Behind the scenes, the company is borrowing from the TV production model, with a showrunner leading each writing time creating the stories. Serial Box writers include popular YA/science fiction/fantasy authors Gwenda Bond, Yoon Ha Lee, Max Gladstone and Becky Chambers. And, as mentioned, the company will also be publishing stories based on Marvel characters, starting with Thor.

The company says it will launch its Android app next week, with plans for more product upgrades and content partnerships in the coming months.

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Ondrej Bartos was recorded in January 2019. Ondrej...

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Healthcare in the United States is so complicated that even employees with good benefits might have a hard time navigating their options. HealthJoy wants to help with a health benefits platform that uses AI to answer questions. The Chicago-based startup announced today that it has raised $12.5 million in Series B funding led by U.S. Venture Partners, with participation from Epic Ventures and returning investors Chicago Ventures, Sidekick Ventures and its co-founders.

This brings HealthJoy’s total funding, including a $3 million Series A announced in August 2017, to $9 million. The company will use its Series B to double its team to 250 people over the next 10 months. It currently has about 200,000 users, grew by 610 percent last year and expects to grow by 250 percent this year. USVP general partner Jonathan Root will join HealthJoy’s board.

Launched in 2014 by Justin Holland and Doug Morse-Schindler, HealthJoy’s app helps its users manage claims, deductibles, their health savings accounts and prescriptions, in addition to guiding them through point solutions, or specific services offered by a single vendor as part of their benefits package. For example, it might direct members to a telemedicine provider. Holland, HealthJoy’s CEO, told TechCrunch in an email that last year, telemedicine utilization was 27.3 percent across the startup’s entire book of business. He added that telemedicine usually translates into about $450 to $500 in savings per visit by avoiding office visits, urgent care or trips to the emergency room.

As another example of how HealthJoy has helped users, Holland says one employee was spending more than $10,000 every month on maintenance drugs, but that amount was reduced more than 90 percent through strategies including alternative medications, an international pharmacy program and manufacturer assistance. This saved the employee more than $1,000 in out-of-pocket costs and the employer $8,000.

Holland became interested in the health benefits space after he injured his knee while skiing and had to schedule an MRI scan. Since he hadn’t reached the deductible on his individual Affordable Care Act plan yet, Holland needed to pay for the scan out-of-pocket. Researching MRI pricing “took me down a rabbit hole of the incredibly complex and non-transparent world of healthcare pricing,” he said. “At the end of several days of work, I found that two nearly identical MRIs could vary in cost from $500 to $5,000. That pricing disparity in itself seemed like a big problem worth solving.”

Holland and Morse-Schindler already had successful startup exits on their resumes (including OpenInstall, which was acquired by AVG Technologies in 2012, and FreeCause, acquired by Rakuten in 2010). The two decided to tackle the challenge of improving how consumers experience the healthcare system. At first they focused on a direct-to-consumer model with individual health plans, but then pivoted to working with employers in early 2017.

“We found out that our focus on the member was just as applicable to employees and that with increasing deductibles, employees were anxious to become healthcare shoppers. Over 40 percent of healthcare is considered ‘shoppable,’” Holland said.

Other tech companies focused on improving the health benefits space from different angles include League, Lumity, Lyra Health and Spring Health. Holland views those companies as potential partners for HealthJoy.

“Typically, we are not selling against competitors, but rather selling against lack of utilization for single-point solutions” by gathering all services into one platform to increase utilization. “Benefit administration platforms are vital to us from an operational perspective and entirely complementary.”

During its earnings report yesterday afternoon, Okta announced it intends to acquire Azuqua, a Seattle, Wash. workflow automation startup, for $52.5 million.

In a blog post announcing the news, Okta co-founder and COO Frederic Kerrest saw the combining of the two companies as a way to move smoothly between applications in a complex workflow without having to constantly present your credentials.

“With Okta and Azuqua, IT teams will be able to use pre-built connectors and logic to create streamlined identity processes and increase operational speed. And, product teams will be able to embed this technology in their own applications alongside Okta’s core authentication and user management technology to build…integrated customer experiences,” Kerrest wrote.

In a modern enterprise, people and work are constantly shifting and moving between applications and services and combining automation software with identity and access management could offer a seamless way to move between them.

This represents Okta’s largest acquisition to-date and follows Stormpath almost exactly two years ago and ScaleFT last July. Taken together, you can see a company that is trying to become a more comprehensive identity platform.

Azuqua, which has raised $16 million since it launched in 2013, appears to have given investors a pretty decent return. When the deal closes, Okta intends to move the Azuqua team to its Bellevue offices, increasing its presence in the Northwest. Okta’s headquarters are in San Francisco. Azuqua customers include Airbnb, McDonald’s, VMware and HubSpot,

Okta was founded in 2009 and raised over $229 million before going public April, 2017.

Last week, Santa Clara-based Palo Alto Networks (NYSE:PANW) announced its second quarter results that surpassed market expectations and sent the stock soaring to a record high. Its stock climbed 11%...

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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

We’re back to basics this week with Kate Clark at the helm, Alex Wilhelm in the sidecar and a stack of venture capital news and happenings to get through. And to make everyone feel included, we kicked off the episode with a roll-call of new VC funds.

Then, of course, we dug into the recent news out of Y Combinator . The famed accelerator is shopping around for a San Francisco HQ, signaling the end of an era where Silicon Valley ruled the world as home to YC and other top-tier venture funds that have since moved South to The City by the Bay.

Next up was the new Grab round, a fresh $1.46 billion from the Vision Fund into what TechCrunch noted is now a $4.5 billion Series H. Amazingly, we’ve typed that out correctly. Grab, now topped up with about $8.8 billion in capital raised, is not the ride-hailing shop that has raised the most capital, though it does round out the top three.

Next, Alex wanted to talk about Chime. Kate isn’t too big on fintech, but the $200 million round into the neo-bank brought its total capital raised to $300 million. That’s a lot of coin for the company, which grew its accounts from one million last year, to three million. (Don’t forget that Acorns raised $105 million earlier this year.)

Changing gears, the Latin American scene, already heating up, is going to get even warmer with the arrival of a new $2 billion fund from SoftBank . Called the SoftBank Innovation Fund, the Japanese telecom giant wants to raise a total of $5 billion to invest in emerging markets across South America. I know what you’re thinking: Damn, that’s a lot of cash. Yes, yes it is.

Finally this week, hours before we hit “record,” Airbnb agreed to acquire the popular hotel-booking app HotelTonight for what’s reported to be about a flat price to its last valuation (~$465 million). The deal made us wonder if the Airbnb IPO could be delayed due to the roughly half-billion deal (provided that reports bear out). We haven’t confirmed the transaction price, so more from us when we have it. Also, this is hardly Airbnb’s first buy.

That, and we had fun. See you all in seven days!

You must have read something or the other about Blitzscaling, the hypergrowth phenomenon that Reid Hoffman has been championing: What entrepreneur or founder doesn’t aspire to build the next Amazon,...

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Sramana Mitra: What year does that bring us up to? Anand Janefalkar: It brings us up to 2011. Motorola was an amazing company to be an employee. It was a little difficult to be a consumer. I got very...

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PolyAI, a London startup founded by experts in the field of “conversational AI” — including CEO Nikola Mrkšić, who was previously the first engineer at Apple-acquired VocalIQ — has raised $12 million in Series A funding to deploy its tech in customer support contact centres.

The round was led by Point72 Ventures, with participation from Sands Capital Ventures, Amadeus Capital Partners, Passion Capital and Entrepreneur First (EF). PolyAI’s founders are graduates of EF, although they didn’t meet during the company building program but already knew each other from their time at Cambridge’s Dialog Systems Group, part of the Machine Intelligence Lab at the University of Cambridge.

“We started PolyAI in 2017, straight after submitting our PhD theses,” Mrkšić tells me. “At Cambridge, we developed state-of-the-art conversational technology, and starting a company was the best way to get this tech used in the real world. We brought many of our Cambridge colleagues with us and started building the commercial version of our conversational platform.”

Targeting contact centres — in a bid to help make these low-margin businesses more scalable — PolyAI’s AI tech doesn’t just attempt to understand customer queries but ensure they can be conducted in a truly conversational way, regardless of the medium, which could be over email, messaging or voice. Where a lot of conversation AI or voice assistants fall down, says Mrkšić, is that they aren’t able to really follow a conversation, often lacking the ability to understand meaning within the context of a conversation’s history or follow-up dialogue.

“Our proprietary technology allows the AI agents to support really complex use cases,” he says. “Our agents are built around a framework for modelling context, which means they can hold long conversations and remember all pieces of information that users had previously shared. The backend models are data-driven, and they are domain and language agnostic. This allows them to seamlessly scale across different use cases and world languages. In practice, this means that we don’t have to hand-craft agent behaviour — AI agents can learn by observing human agents at work.”

That’s a hard nut to crack, which is why Mrkšić believes deep vertical integration with contact centres will produce the best outcomes. He doesn’t rule out either buying a small to medium-sized contact centre or forming a strategic partnership to expedite improvements in PolyAI’s offering and the company’s understanding of how contact centres operate. His thesis is that AI can help make contact centres more profitable, although, early on in the startup’s life, the case is not yet proven.

Related to this, Mrkšić and his team aren’t proposing that “AI agents” replace human agents altogether but work alongside them, quite literally, with each playing to their respective strengths. PolyAI co-founder and CTO Shawn Wen argues that machines can do many things that humans struggle with, including having “instant access” to all of the relevant information needed to support a customer. At peak times, this can mean AI agents handling calls autonomously if human agents aren’t available, while leaving human agents with the more complex edge cases or ones where they can bring the most value through human empathy and EQ.

“We plan to pursue very tight integration with contact centres — be that through M&A, investment or other profit-sharing arrangements,” adds Mrkšić. “Whichever model we end up pursuing, we want full alignment between PolyAI and contact centres. Too many AI companies have died trying to find favourable software licensing agreements years before their technology was ready for wide-scale deployment. We believe vertical integration is the best way to fast-track the development of our ML platform, as well as for PolyAI to stay independent in the long-term.”

During this week’s roundtable, we had as our guest Rahul Chowdhri, Investor at Stellaris Venture Partners, who shared some fascinating examples of consumer ventures catering to the next 400 million...

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