Sramana Mitra: How many developer partners do you have currently? Danny Tomsett: We have a core group of partners that we work with across the globe. Some of them are large. Today, we work with IBM,...
___
SoftBank Corp. and Mapbox, the mapping data company that competes with Google and Here, announced that they have established a joint venture called Mapbox Japan.
The JV will provide Mapbox’s mapping platform, including APIs and data services, to developers in Japan. Between June 1 and September 30, Mapbox Japan will also provide up to three months of free support for organizations building COVID-19 related mapping services, including infection cases and statistical data, for developers in the country, which has relied on tracking virus clusters to limit the spread of infections.
Mapbox collects data from sources including government and commercial databases, and uses them in customizable AI-based APIs, SDKs and other products. Its clients have included Facebook, Snap, the New York Times, the Federal Communications Commission and automotive companies like Land Rover and Rimac.
Founded in 2010 by Eric Gunderson, Mapbox says its tech now reaches more than 600 million monthly users. SoftBank Vision Fund led Mapbox’s $164 million Series C in 2017. At the time, Gunderson told TechCrunch that part of the funding would be used to expand in Asia through SoftBank’s presence in regions including Southeast Asia and China.
Mapbox has operated in Japan since July 2019, though that was through partnerships with Yahoo! Japan and Zenrin, one of the country’s biggest mapping software companies. Zenrin also has a partnership with Google Maps, but early last year Google began reducing the amount of mapping data it uses from Zenrin, possibly to focus on building its own trove of mapping data in Japan.
Working closely with Zenrin opens potential new opportunities for Mapbox in Japan. Last year, Gunderson told Nikkei Asian Review that “we are going to be the number one mapping provider in all of Japan and we’ll be able to do this because we have the best data in all of Japan through our partnership with Zenrin.” The company plans to develop products for the Japanese market that include mapping services for industrial automation.
In SoftBank’s announcement, Eric Gan, SoftBank Corp. head of business development, said, “I am very excited to bring Mapbox’s technology to Japan to help enterprises enhance their existing mapping services while also creating new customizable location-based services and management tools. We are seeing a significant rise in demand for Mapbox’s products from retail, ride-share, hotel, office-sharing, payment, mobility and manufacturing industries.”
E-book and audiobook subscription service Scribd has been actively embracing and experimenting with bundling over the past couple of years, creating joint offers with The New York Times and with Spotify and Hulu.
Today it announced a slightly different take on the idea with Scribd Perks. These perks give Scribd’s paying subscribers (the service costs $8.99 per month) access to a number of additional services at no extra change.
The initial lineup includes Pandora Plus (ad-free music and podcasts), TuneIn Premium (live sports, news, music and podcasts), Peak (brain training), CuriosityStream (documentaries and series), CONtv + Comics (movies and digital comics), FarFaria (illustrated children’s books that are read aloud) and MUBI (hand-picked films).
Many of these services are relatively niche — at least compared to Scribd’s previous bundling partners — but they all normally cost between $2.99 and $10.99 per month, so there are some real savings here. It’s an extra incentive for someone to sign up for Scribd, and for existing subscribers to stick around. Meanwhile, these partners presumably get new users and additional revenue.
In a statement, Scribd CEO Trip Adler said:
With millions of people around the world continuing to shelter in place, having access to different forms of enrichment is more important than ever before. We’re thrilled to be partnering with leading consumer brands to offer a more accessible way for consumers to easily stay informed, entertained, and connected. Scribd is designed to help people explore the world’s best content, and now, with the launch of our new Scribd Perks platform, there is even more premium content to discover.
Hims & Hers, the startup focused on providing access to elective treatments for things like hair loss, skin care and erectile disfunction and online telemedicine services, is expanding its services to include a Spanish language option, the company said.
After Mexico, the U.S. has the second-largest Spanish speaking population in the world, with an estimated 41 million U.S. residents speaking Spanish at home. The population also prefers to receive healthcare information and frequent facilities that offer resources in Spanish.
Now, with a shortage looming in primary care physicians for rural areas and inner cities and a sky-high rate of Hispanics living without any form of healthcare coverage (roughly 15.1%, according to data provided by the company), Hims & Hers is pitching its telemedicine offering as an option.
“Language, cost, and location should not be barriers to receiving quality care, which is why we are launching a Spanish offering on our telemedicine platform,” the company said in a statement.
The company’s $39 primary care consultations at its Hims and its Hers websites will be in Spanish. That will include everything from communications like the patient intake form and instructions to prepare for an online consultation along with a connection to Spanish-speaking healthcare provider.
“The reason we created Hims & Hers was to break down barriers and provide more people with access to quality and convenient care,” the company’s co-founder and chief executive, Andrew Dudum, said in a statement. “As a telemedicine company, we recognize the need and understand the importance of serving the Spanish-speaking population. We hope those seeking access to care in Spanish find our platform to be a welcoming, inclusive, quality experience.”
This week Alexia Bonatsos of Dream Machine and Niko Bonatsos of General Catalyst swung by Extra Crunch Live to discuss where they are investing today and what the future might look like.
As expected, these seed and early-stage venture capitalists had a lot to say about their current investing cadence and what interests them in the world of edtech, Clubhouse and more. A big thanks to everyone who came out and submitted some great questions.
Going back through the chat today, a few sections jumped out. For this recap, I’ve gathered answers from the transcript regarding today’s fundraising climate, the future of AI and the possible impact of the downturn on VC-backed founder diversity.
And for everyone who couldn’t join us live, I’ve included the full video replay below. (You can get access here, if you need it.)
Today’s fundraising climate
Alexia:
It’s kind of a Rashomon; depending on whose perspective you’re getting the story, is just completely different.
Let’s see, are [VCs] being as active as they were in 2018? I’m gonna say no. I mean, look at your data, your data says no. But does that mean people [have] shut down the shop and are all in Montana? Also no, right?
We know that these kinds of “crisistunities” — and I’m not diminishing the crisis at all, it is very sad and very scary, and it’s something that I’m very privileged to be able to be experiencing from inside my apartment and not from outside within an emergency room or a food bank or any other place that it’s actually at the front lines, right?
Autonomous aviation startup Xwing locked in a $10 million funding round before COVID-19 hit. Now the San Francisco-based startup is using the capital to hire talent and scale the development of its software stack as it aims for commercial operations later this year — pending FAA approvals.
The company announced Wednesday its Series A funding round, which was led by R7 Partners, with participation from early-stage VC Alven, Eniac Ventures and Thales Corporate Ventures. Xwing has already hired several key executives with that fresh injection of capital, including Terrafugia’s former co-founder and COO Anna Dietrich, and Ed Lim, a Lockheed Martin and Aurora Flight Sciences veteran who more recently led guidance navigation and control for Uber’s autonomous car division as well as Zipline’s AV delivery drone.
Xwing is different from some of the other autonomous aviation startups that have popped up in recent years. The startup isn’t building autonomous helicopters and planes. Instead, it’s focused on the software stack that will enable pilotless flight of small passenger aircraft.
Xwing is also aircraft agnostic. The company’s engineers are focused on the key functions of autonomous flight, such as sensing, reasoning and control. The software stack, which is designed to work across different kinds of aircraft, is integrated into existing aerospace systems. That strategy of retrofitting existing aircraft will speed up deployment, while maintaining safety and keeping costs in check, according to founder and CEO Marc Piette. It also is a straighter path toward regulatory approval.
“It’s more effective for us to not constrain ourselves to a given vehicle and to develop technology that is considered more of an enabler— from a marketing perspective — than going full stack, Piette said when asked if Xwing would ever try to build an autonomous aircraft from the ground up.
Since Xwing’s last funding round — $4 million in summer 2018 — the company has been developing its tech and working with the FAA to receive flight certification for pilotless aircraft. Once approved, the company will seek to commercialize pilotless flights.
The startup hasn’t named any commercial partners yet. And Piette hasn’t provided details about its commercial strategy either, although he said to expect more announcements this year.
Xwing is already working with Bell for NASA’s Unmanned Aircraft Systems (UAS in the NAS) program, an initiative meant to mature the key remaining technologies that are needed to integrate unmanned aircraft in U.S. airspace. The program plans to hold demonstration flights this summer.
What do people tend to get wrong about remote work? And how can companies make it work better for them?
While just about every tech company on the planet has become remote over the last few weeks, GitLab has been at this a while — since pretty much day one of its existence back in 2014, in fact. Since then they’ve grown to more than 1,200 employees across 65 countries, with a staggering valuation of nearly $3 billion. They’ve figured out some stuff along the way, sharing it all in an ever-evolving handbook.
I recently hopped on a call with GitLab’s head of Remote, Darren Murph, to get some insight on how they make it all work. This is the second part of my interview with Murph; he and I chatted for quite a while, so I’ve split it into two parts for easier reading. You can find Part I here.
TechCrunch: There’s this ongoing conversation about how people are coming away from this remote experience. Are they walking away saying, “yeah, that was great, we can do this day-to-day, I wouldn’t have seen that before,” or is the fact that they’re being thrust into this, and on not the best terms, going to have a negative impact?
Do you think this [sudden shift] is going to have a positive impact on remote work?
Darren Murph: I do. I’m a long-term optimist on this.
There’s a Gartner survey that just came out. They surveyed over 300 CFOs globally; 74% of them said that they’re going to shift some of their workforce permanently remote after this… even though this is the worst possible way to be thrust into remote.
This is the worst of circumstances, and people are still like, “You know, I love not having to commute.” And businesses are like, “You know, I love saving $10,000 per desk by not having that real estate.”
If it’s working in the worst of times… six to 12 months from now, when the crisis is abated and people have had time to lay the remote structure, build their handbooks, get the right remote hygiene integrated into the DNA of their company… it’s going to be like, warp-speed accelerator.
If you can make it work now, you can make it work any time.
More than five years after starting the company, Monzo co-founder Tom Blomfield is stepping down as CEO of the U.K. challenger bank to take up the newly created role of president.
Current U.S. CEO, TS Anil, will become the new “Monzo UK Bank CEO,” subject to regulatory approval, and for now will hold both U.K. and U.S. roles.
Anil previously held exec roles at Visa, Standard Chartered Bank and Citi, and therefore brings a ton of banking and financial services experience. This includes things like dealing with regulators and overseeing a large corporate structure, two things a scale-up challenger bank like Monzo, with more than 4 million customers and over 1,500 staff, requires.
The thinking behind Blomfield’s move to president is a startup cliché but also likely holds water; he’ll be able to spend more time doing the things he enjoys most (and is arguably best at), such as focusing on the longer-term vision, product and how Monzo can stay close to and best serve customers. Meanwhile, Anil — and, in the future, other country-specific CEOs — can do the day to day, more regulated aspects of running a bank.
In a brief call with Blomfield just moments ago, he told me he had been thinking about a transition into a different role for about 18 months, but it wasn’t until much more recently that a formal decision was taken.
“I went through all the stuff I love about my job, and it was all the stuff I did in the first two or three years,” he said. “And I went through all the stuff that drains me, and it’s all the stuff I’ve done in the last two years, honestly. Things I think TS is awesome at.”
Although it is unlikely that a huge amount will change immediately, Blomfield says he hopes that he’ll be able to spend a “bunch more time doing the stuff I really, really love, which is community, talking to customers, helping develop the product proposition, long-term vision, and talking to journalists, like you Steve, obviously, and try to unwind my involvement a little bit in more formal regulated banking activities.”
Meanwhile, it has been somewhat of a turbulent time for Monzo in recent months, as it, along with many other fintech companies, has attempted to insulate itself from the coronavirus crisis and resulting economic downturn.
Last month, I reported that Monzo was shuttering its customer support office in Las Vegas, seeing 165 customer support staff in the U.S. lose their jobs. And just a few weeks earlier, we reported that the bank was furloughing up to 295 staff under the U.K.’s Coronavirus Job Retention Scheme. In addition, the senior management team and the board has volunteered to take a 25% cut in salary, and co-founder and CEO Tom Blomfield has decided not to take a salary for the next 12 months.
Like other banks and fintechs, the coronavirus crisis has resulted in Monzo seeing customer card spend reduce at home and (of course) abroad, meaning it is generating significantly less revenue from interchange fees. The bank has also postponed the launch of premium paid-for consumer accounts, one of only a handful of known planned revenue streams, alongside lending, of course.
And just last week, it was reported that Monzo is closing in on £70-80 million in top up funding, to help extend its coronavirus crisis runaway. However, as new and some existing investors play hardball, the company has reportedly had to accept a 40% reduction in its previously £2 billion valuation as part of its last funding round last June, with a new valuation of £1.25 billion.
With that said, it’s not all been bad news. Monzo recently launched business accounts, many of which are revenue generating, with both free and paid tiers. It also recruited Sujata Bhatia, a former American Express executive in Europe, as its new COO.
And, hopefully, in his new role as president, Blomfield will sound re-energised next time I call him.
While the idea of baring your soul to a chatbot might seem uncomfortable, sisters Claudia and Carolina Recchi think that might be exactly what college students across the United States need right now.
The duo co-founded EdSights in 2017 to support high and medium-risk students to stay in school, and increase university retention rates.
EdSights uses a chatbot, branded under a school’s mascot, to send personalized questions and messages to students to understand their biggest stresses. It then connects them to university resources spanning areas like financial aid, food security and mental health.
As the pandemic has forced millions of students to move off campus and learn from home, the co-founders have found a spurt of growth from colleges looking for new ways to hold onto their students.
And the pandemic has added a new layer of honesty to the answers.
“There is just so much going on with the world, people losing jobs and barely being able to make ends meet. School hardly seems pressing at the moment,” one student wrote. “And yet, grades are still there, determining our future when we aren’t even sure what the future looks like.”
Another wrote, “My work is closed. I have no income.” One said, “Because I am not going out I can’t distract myself from all the things going on in my life.”
Beyond its chatbot, EdSights has a dashboard for administrators to see what percentage of their students are struggling with specific issues at the moment. The company deals with information on high-risk students and their biggest worries, so privacy is key to their platform. EdSights says it complies with both FERPA and GDPR regulation, and does not rent or sell data to third parties. Students also have the right to request an amendment of their records and receive a full log of it.
“Obviously, universities are also spooked that students won’t show up in the fall,” she said. “So they want to make sure that there’s a connectivity and they feel connected to the university, even if they can’t go to campus.”
The company took one year to scale to 16 customers, including Baker University, Missouri Western State, Bethel University, Culver Stockton College and Westminster College. On average its ARR has been growing by 66% month over month, and it has doubled its revenue since February.
EdSights charges colleges $15 to $25 per student. Most customers bring on their entire student body.
“Before this, we did see a lot of universities asking, ‘can I roll this out to freshmen or can I only roll it out to my first-generation students or maybe those that need additional support?’ ” said Carolina Recchi. “Now, colleges are not only asking us to help with all four years, but we’ve had some institutions ask us to roll it out to graduate students, which was new, because we had never done that before.”
This newfound momentum led the co-founders to raise $1.6 million in venture capital funding from a slew of high-profile investors. Investors from this round include Lakehouse VC, Kairos VC and The Fund.
The new raise also includes investments from Warby Parker, Harry’s, Allbirds, Bonobos and Rent the Runway founders.
The EdSights co-founders say COVID-19 played a part in their company receiving inbound interest from generalist investors, who have been historically skeptical about the space, versus solely getting term-sheets from specialist education firms. In fact, the duo had to turn down a number of investors, a stark difference between the chilling effect other founders claim has covered the entire fundraising scene.
EdSights new funding is another data point of how the pandemic is forcing the general public to be more nuanced in how it thinks about the intersection of education and technology.
In the time of a pandemic, a chatbot could be the only way to remotely support millions of students. Now, it’s just up to EdSights to prove that their technology is necessary in a world where schools start to reopen, whenever that is.
The COVID-19 pandemic is making life worse for many startups, but not all. Those benefiting are often taking advantage of the market updraft to add more capital to their accounts. Robinhood, for example, saw usage of its consumer fintech product rise rapidly. Then the company raised a Series F worth $280 million at a new, higher valuation.
Another startup has done something similar. Human Interest, a finservices 401(k) provider for SMBs, added $10 million to its Series C today. The company’s Series C round is now worth a total of $50 million. Glynn Capital led the Series C extension.
The reason for the new capital is simple. According to Jeff Schneble, the company’s CEO, Human Interest has seen “some of the strongest sales months in the company’s history, and are seeing 2-3X year-over-year growth in customer acquisition even in the midst of the COVID-19 crisis.”
When usage and revenue scale ahead of expectations, options open up. TechCrunch had a few questions about the additional capital. Let’s explore.
TechCrunch first wanted to know if the San Francisco-based Human Interest’s new $10 million — which brings its total known capital raised to around $80 million — is earmarked for offense (greater investment into GTM functions, for example), or defense (runway extension, and so forth).
According to the CEO, the round is “more about playing offense,” with the executive adding that offense has been “something we’ve had the luxury of thinking about since the beginning of the crisis, given our large raise in February.” Human Interest intends to double its engineering team, and is “aggressively ramping up [its] GTM team (more reps, more partners, growing our marketing team and budget).”
TechCrunch was also curious about its customer profile — is Human Interest seeing growth from a different set of customers in the COVID-19 era? According to Schneble, not really: “We have not seen a significant shift in customer size, geography or vertical,” he said.
Human Interest, however, is seeing more companies coming to it looking to change 401(k) providers. Schneble told TechCrunch that “historically” 85% of his company’s customers are looking to offer “a retirement benefit for the first time.” However, “in the last couple of months” Human Interest has seen “a surge of customers with existing retirement plans that want to move to a lower-cost benefit.”
As Human Interest uses “technology, rather than people” to run its 401(k) service, the startup can offer a service that is “typically 30-50% lower-cost than a legacy 401(k) plan,” according to Schneble.
Is this new demand changing the company’s economics? TechCrunch wanted to know if market interest in 401(k) plans — consumers are flocking to savings and investing apps, likely driving more companies to add retirement savings plans for their employees — was lowering Human Interest’s customer acquisition costs (CAC).
According to the CEO, Human Interest focuses on gross-margin payback, or the time period it takes for gross-margin adjusted revenue to repay CAC. “I can’t stress how important profitability is in this space,” Schneble told TechCrunch, adding that “many of [his] competitors have negative contribution margins, which is obviously not a recipe for building a successful public company.”
The company’s gross-margin payback pace is improving, with the company telling TechCrunch that it has “come down by ~70% in the past 12 months, and is now approaching zero for many of our customers (meaning the margin contribution from their initial payment when they launch their plan covers our CAC).”
Human Interest’s gross margins help with that, with Human Interest telling TechCrunch that it has “typical software margins” on its product. That means 70%+ gross margins.
Back to the $10 million add-on, TechCrunch confirmed that the new capital was raised at the same pre-money valuation as the rest of its Series C. The CEO added the following color:
We had interest from several of the later-stage growth funds we talked to in our Series C process, but decided to move forward with Glynn Capital. They are long-term investors that plan to hold their investment in us long after we’re public (similar to one of our other large investors, Oberndorf Enterprises). While we probably could have demanded a higher price for the extension, given the acceleration we’ve seen in the last few months, we decided to optimize on partner quality instead.
Now with more capital aboard, expectations are even higher for Human Interest. Let’s see how fast it can grow.
The novel coronavirus has been devastating for many people, families and communities — and the consequences are still being calculated. The tech world has seen wave after wave of layoffs, sometimes multiple waves at one company only weeks apart. Some startups have lost nearly all their revenue, and depending on their cash reserves, have little hope of recovering.
For VCs, the last two months have been an exercise in triage.
Partners have gone through their entire investment portfolios to identify the winners, what’s salvageable and what (at least in their minds) has no hope of resuscitation. If you are in the first two groups, it’s back to whatever normal looks like in the midst of a global pandemic and a deep economic recession.
But what if you suddenly get a call informing you that your investor — perhaps your biggest champion to date — is going to cut the rope and write you off entirely?
That’s what we are going to talk about today.
Before we go anywhere, be thankful if you even know how your investors are judging your startup. Most, unfortunately, will couch the terms they use (“we will be engaging less” or perhaps “we are unlikely to do our pro rata going forward”) rather than just saying directly, “we are writing you off; don’t call us — we’ll call you.” That’s polite and face-saving for all parties, but the lack of transparency can make decisions down the road much harder. It’s better to know where you stand, even if the news is hard.
The first step to approaching this situation is to get your bearings. Much like during a fundraise process, it’s not uncommon for different investors on your cap table to reach different conclusions about your startup’s potential. One investor may write you off, while another has you marked at a more neutral valuation or even positively. This can absolutely be frustrating, and given the emotion of this situation, it can be hard to rationally accept that an investor who once believed in you no longer does so.
Sramana Mitra: Let’s take each of those use cases. It sounds like you have one bucket that is content providers. Udacity is a content business largely. The job of your platform is to enhance...
___
Sphero just announced that it has spun off another company. Once again, the new startup has a decidedly different focus from its parent company’s core of education-focused products. While still a robotics company at its heart, the underwhelmingly named Company Six will create robotic systems designed for first responders and other humans whose work requires them to put themselves in harm’s way.
Also snuck into the press release, almost as an an afterthought, is the appointment of Paul Copioli as the new CEO of Sphero, effective immediately. The executive is an industry veteran who has worked at VEX Robotics, industrial robotics giant Fanuc and Lockheed Martin. Most recently, he was the president and COO of littleBits when the startup was acquired by Sphero.
Copioli takes over after the company’s exit from the consumer space. Sphero has pivoted almost entirely into the educational market, with the littleBits acquisition making up an important piece of the puzzle.
“It’s an honor to lead the Sphero team as we continue to pave the way for accessible robots, STEAM and computer science education for kids around the world,” he says in a release. “With our focus on education and our mission to inspire the creators of tomorrow, Sphero has a long-standing place in our school systems and beyond.”
Spinning off Company Six as its own independent entity is seemingly part of the new focus. The seeds of the startups were formed by former CEO Paul Berberian’s Public Safety Division within Sphero. He has since shifted to become chairman of both companies, while former Sphero COO Jim Booth will head Company Six as COO. Got all that?
Company Six has already closed a $3 million seed round, lead by Spider Capital, with Sphero investors Foundry Group and Techstars also on-board. Like previous Sphero spin-off Misty, information about Company Six is minimal at the time of its announcement. The new company’s site is essentially bare. We only know it will be focused on creating robotic systems for first responders, defense workers and other dangerous jobs. The news echoes iRobot’s 2016 spin-off of its military wing, Endeavor.
Sphero explains:
By applying the experience used to bring more than 4 million robots to market at Sphero, the Company Six team believes it can create products that are not only robust and feature-rich enough for professional applications, but also affordable enough to be adopted by the majority, rather than the minority, of civilian and military personnel.
More news to follow soon, no doubt.
This morning, Coalition announced that it has closed a $90 million Series C. The funding comes around a year after the cybersecurity insurance startup raised a $40 million Series B that TechCrunch covered at time.
The startup’s new, larger funding round was led by Valor Equity Partners and included participation from Greyhound Capital and Felicis, along with “existing investors,” per the company. Coalition told TechCrunch that its Series C was raised at an $800 million pre-money valuation, making the firm worth $890 million today.
Coalition noted in a release that it has raised $125 million in equity capital in its life. Given that the company’s Series B was generally reported as $40 million, the math didn’t add up. TechCrunch spoke with the company, learning that its Series B was $25 million in primary, and $15 million in secondary. So, the company’s $10 million Series A, $25 million primary Series B, and its $90 million Series C do add up to $125 million, as they should.
The San Francisco-based cybersecurity insurance startup raised its new capital, and nearly reached a unicorn valuation (the $1 billion threshold means less than it once did, of course), on the back of rapid customer growth. Let’s dig into the numbers.
Coalition’s funding round stood out not only because it represented an outsized Series C, but also because the firm reported an impressive customer growth figure. The startup told TechCrunch that had grown its customer base to 25,000, a figure that was up 600% from “the prior year.”
Landing that many new customers in a year, more or less, made us sit up and take notice; there is a strong connection between customer growth and revenue growth, implying that Coalition’s business was rapidly scaling.
TechCrunch wanted to know more, so we corresponded with Joshua Motta, the company’s co-founder and CEO.
First, we wanted to know if Coalition had juiced its sales and marketing spend in the last year, perhaps pushing its customer number through brute force and heavy spend. According to Motta, the answer appears to be not really:
Coalition’s insurance products are sold by insurance brokers across the country. While we’ve grown our internal sales and marketing team from 5 to 13 people [year-over-year], we’ve appointed over 1,000 new brokers in the same period, each of whom was driven by an interest to help their clients manage growing cyber risks.
Accreting brokers is not the same sort of cost as, say, spending gobs of money on advertising.
As TechCrunch noted at the time of the company’s Series B, “an ongoing threat of breaches and data exposures” has made cyber insurance attractive, so there may be secular tailwinds that are pushing Coalition along, helping boost its customer count.
Motta agrees, telling TechCrunch in an email that “data breaches and cyberattacks are now so commonplace that organizations can no longer afford to ignore them, and there is a growing awareness that insurance is often the only protection from catastrophic financial loss.”
Back to customer growth, TechCrunch was curious if the company had changed its pricing in the last year, perhaps lowering it and thus attracting more customers. Answer from its CEO: No.
But what is changing at Coalition is its size. According to Motta, the company has “made 20 new hires since the outset of March, and anticipates making an additional 100 hires over the next twelve months.”
The staffing-up makes sense, as the company plans to enter the Canadian market. TechCrunch asked what markets are coming next. According to the company: The UK, Europe and Australia.
Now we have to wait until we get another growth metric from the firm. Perhaps next time we’ll get a revenue figure, instead of merely a customer result. But hey, better some data than no data.
Since its inception, shared micromobility services have been in a precarious position — one supported by millions of dollars in venture capital. But the COVID-19 pandemic has brought even more turmoil upon an industry that has long struggled with unit economics. It has led to mass layoffs, operation shutdowns across several markets and more consolidation.
Despite the struggles of individual operators, micromobility as technology will come out of this stronger than before, industry analyst Horace Dediu tells TechCrunch.
Dediu, an analyst who coined the term “micromobility” and founded Micromobility Industries, sees the silver lining in the pandemic for micromobility as it relates to the adoption of public transit alternatives. With ongoing concerns about the disease and social distancing, consumers may look to alternative modes of transportation — ones that require fewer interactions with strangers. But simply because a certain technology takes off doesn’t mean the current slate of operators will benefit.
“The companies involved may not survive a crisis,” Dediu says. “We don’t remember the fact there were 3,000 automobile companies in the United States prior to Henry Ford’s Model T. We don’t remember all the electrical suppliers out there and the consolidation that took place in the electrical field with Westinghouse. There’s a lot of historic references we can cite. But the fact of the matter is that up until the crisis there was an over-investment where probably too much capital was allocated to the industry chasing business models which are not sustainable…I think there will be a washout with a kind of consolidation and we’re seeing that already.”
Earlier this month, for example, Uber sold off JUMP to Lime, while simultaneously leading a $170 million investment in the micromobility startup. That funding round brought Lime’s valuation down 79%, to $510 million, according to The Information. Last April, Lime was valued at $2.4 billion.
Strapi, the company behind the popular open-source headless CMS also called Strapi, has raised a $10 million Series A round led by Index Ventures. The company previously raised a $4 million seed round led by Accel and Stride.vc in October 2019.
Strapi is a headless content management system, which means that the back end and the front end operate totally separately. You can run Strapi on your own server and write content and pages for your site by connecting to Strapi’s admin interface.
After that, the front-end part of your application can fetch content from your Strapi instance using an API and display it to your customers and readers.
There are many advantages in separating the front end from the back end. First, it gives you a ton of flexibility when it comes to displaying your content. You can use a popular front-end framework, such as React, Vue and Angular, or develop your own custom front end.
When you want to update the design of your site, you can just switch from one front end to another with Strapi running like usual behind the scene.
Similarly, it offers more flexibility when it comes to server architecture. For instance, you could also leverage Strapi to build static websites and distribute them using a content delivery network, such as Cloudflare or AWS CloudFront. You could imagine using Gatsby combined with a CDN to deploy your site on the edge. Most of your traffic will go through your CDN instead of hitting your servers directly.
Additionally, Strapi can be used to distribute content to different front ends. For instance, you could use a Strapi instance for the content of your website and your mobile app.
Strapi proves that eventually everything becomes an API. Sure, a headless CMS is probably overkill for most projects. But if you’re running a large-scale application, Strapi can fit nicely in your architecture. Companies using Strapi include IBM, NASA and Walmart.
Many well-known open-source business angels have also invested in Strapi, such as Augusto Marietti and Marco Palladino from Kong, David Cramer from Sentry, Florian Douetteau from Dataiku, Solomon Hykes from Docker, Guillermo Rauch from Cloudup, Socket.io, Next.js and Zeit.co, and Eli Collins from Cloudera.
Brainbase, the rights management platform that’s helping Hollywood studios manage the licensing rights to their cultural icons, has picked up another $8 million in financing.
Behind every popular story is an attempt to make money off of it, and Brainbase helps Hollywood find new ways to make money off of consumer tastes.
The money came from new investors Bessemer Venture Partners and Nosara Capital, with participation from previous investors Alpha Edison, Struck Capital, Bonfire Ventures and FJ Labs. Individual investors include Spencer Lazar, Michael Stoppelman (the former senior vice president of engineering at Yelp), Jenny Fleiss (co-founder of Rent the Runway) and David Fraga (president of InVision).
The Los Angeles-based company said the new money would be used to build a payments feature to speed up the process of wringing payments from licensees and to continue building its Marketplace product that connects celebrities, athletes and social media stars of all stripes with new and emerging brands.
“We need to stay focused on building the best platform for brands that own and license their IP,” said Brainbase co-founder and CEO Nate Cavanaugh, in a statement. “With a strong bench of investors and advisors who believe in our vision to make the intellectual property industry more open, efficient and accessible, we are prepared for our next stage of growth. In 2020, Brainbase plans to nearly double in size, making key hires across sales, product, and engineering in the U.S. and Europe.”
The new financing comes as Brainbase brings new brands and spokespeople into the fold, including BuzzFeed, the model-turned-shopping network celebrity and brand ambassador extraordinaire Kathy Ireland, MDR Brand Management and Bonnier. These new branding megaliths join a roster that includes Sanrio, the owner of the ubiquitous Hello Kitty character.
“Brainbase is bringing the archaic, paper shuffling world of IP management into the 21st century. We’re thrilled to partner with this team as they help owners of IP assets capture more value while saving a boatload of time and effort,” stated Kent Bennett, partner at Bessemer Venture Partners.
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Startups in the Midwest are optimistic despite the fact that a fair number of companies in the region are suffering from economic impacts stemming from COVID-19, recently collected data shows.
The global pandemic has shaken the U.S. economy, but it hasn’t affected each area in the same way. States have seen differing levels of infection, paces of response, qualities of medical infrastructure and so on. What happens to Silicon Valley startups in the COVID-19 era, therefore, might not be exactly the same as what happens to Boston’s or Utah’s startup ecosystems (more on Boston here, Utah here).
A report out this month from Sandalphon Capital that digs into the reality, reaction and sentiment of the Midwest’s startup scene paints an interesting picture. While data collected from 197 startup CEOs from the region includes worrisome responses regarding fundraising and cash runways, it also reflects more optimism and green shoots than we anticipated.
This morning, let’s study a few key data points from the Chicago-based, early stage venture capital firm’s survey to better understand one of America’s most interesting, if least-covered, startup scenes.
The full survey — you can find Sandalphon’s summation and the link here — contains a wealth of data, but today we’re focusing on three things:
COVID-19’s direct impactsrunway and fundraising situationsCEO optimism
After teasing the launch of their new startup last year, e-commerce veteran Julie Bornstein and her technical co-founder, Amit Aggarwal, are today launching The Yes, a women’s shopping platform that they’ve been quietly building for 18 months and they say will create tailor-made experiences for each user, courtesy of its sophisticated algorithms.
Bornstein’s experience and vision alone attracted $30 million in funding to the venture last year from Forerunner Ventures, New Enterprise Associates and True Ventures, among others. To learn more about how it breaks through in a world rife with e-commerce companies, we talked with Bornstein, who previously spent four years as COO of the styling service Stitch Fix and before that spent years as a C-level executive at Sephora. We wondered specifically how The Yes differs from Stitch Fix, given that both companies use data science to discover clothing for shoppers based on their size, budget and style.
Aside from the fact that The Yes is taking an app-only approach (unlike Stitch Fix), and doesn’t have a subscription model, Bornstein says that The Yes is very much focused on people “who want to shop” versus those who want their shopping done for them. Yet that’s just the start of what makes The Yes different than its other predecessors, said Bornstein in a conversation that follows below, edited lightly for length.
TC: You’re building what you call a store around each user, who downloads the app, answers questions that provide a lot of “signal” about that person’s style and brand preferences and size and budget, and that’s adaptive, meaning the algorithm is always re-ranking products as it learns better what a person likes. What demographic are you targeting?
JB: It’s women of a very broad age range, from 25 to 75, who care about fashion, whether they’re an in-the-know-on-everything fashionista or they just want to look great. And you can shop high/low, which is how most women shop these days. So it depends what you’re looking for.
TC: It sounds like you’re selling women’s apparel exclusively to start. Are you also selling handbags? Jewelry? Accessories?
JB: We’re focused on fashion and footwear, and we have accessories and handbags. A lot of our brands have great handbags. Then we will be expanding more to jewelry and other accessory categories over time.
TC: What brands can shoppers find on the platform?
JB: We have 145 brands at launch, ranging from Gucci, Prada and Erdem to contemporary brands like Vince and Theory to direct-to-consumer brands like Everlane and La Ligne to everyday brands like Levis. When a brand integrates with The Yes, the platform sells each brand’s full digital catalog.
TC: Why go app only?
Most of the e-commerce sites that have mobile presence really feel like a website converted to a small screen. We [thought if we] challenged ourselves to leverage the technology of the native app environment, [we] could build a much slicker experience for the user. We also know that mobile is growing. It’s about 50% of total purchases now in fashion and growing faster, so while we know that web will be important to add, we really felt like mobile and iOS were the places to start.
TC: Stitch Fix uses machine learning to analyze customer tastes, but it ultimately relies on human stylists to choose items. What new advances have been made in AI that can allow The Yes to actually pick products using artificial intelligence? Isn’t fashion, like music, a “noisy” problem, with consumers often not knowing what they want?
JB: It’s such a nuanced area and really hard to do in the form of recommendations, but there are a number of reasons that enable us to do it. One is we had to build the most extensive taxonomy that exists in fashion. We did think a lot about the music genome project that Pandora did and all the work that Spotify has done. Music is definitely one of our inspirations. And if you look at what they did, they had some human expertise in the beginning, creating these categories, and then the machine learned on top of it, and we have done the same in fashion. So we had fashion expertise build our initial taxonomy.
Then we leveraged both machine learning and computer vision to train models to understand how to absorb all pieces of data related to a product, as well as the image itself and how to read images. And it gave us a really strong understanding of 500 dimensions for every single item. [Meanwhile] to understand what the consumer cares about, we spent a lot of time testing and learning which questions [to ask] when it comes to brand and price and things like color and style and size and fit…
TC: Because of your background, comparisons are probably going to be made between The Yes and Stitch Fix. What was the impetus for this new business? Was it a matter of eliminating that personal touch?
JB: I had such a great experience at Stitch Fix, and I’m still a shareholder and a big fan of the company and the team. And I think what they’re doing, what they continue to do, is terrific in really pushing the boundary on this concept of shopping-as-a-service.
What I am working on, and our team is really focused on, is the actual consumer shopping experience for consumers who want to shop. There’s a strong percent of the population who really loves to shop and wants agency in their own selection, and that is really the consumer we’re going after.
TC: You’re launching with roughly 150 brands. What is your relationship with them? Are you taking a cut of a transaction? Are you ever taking possession of their products? Do you have a warehouse or warehouses?
There were two things coming into this business that I wanted to avoid based on my personal experience, which was one, owning inventory, and two, reshooting every item for its own new photographs on the site. Pinterest and Instagram and all these other visual sites have shown us that the brands spend a lot of money shooting images to look a certain way to help communicate what their brand is all about. So leveraging those assets has been terrific.
[Regarding inventory], there’s no reason to ship the product from the brand to another warehouse and then to the consumer. We’re cutting out that stuff and shipping it direct from the brand. From a consumer standpoint, you order on our app, and everything is one-click, and you are charged by [us]. But then the order is placed through the brand and is shipped from the brand to you. Then we will communicate to you when it’s shipped, when it’s arriving, and if you have any customer service issues, we take care of it.
And we take a flat commission [on sales].
TC: Returns are free. But isn’t that a huge cost center, and might it deter people from returning items if you charged something for returns?
JB: My feeling is that free shipping and free returns is a baseline requirement to offer a great service. And it’s our job to help match [shoppers] to product that you’re not going to return. We have an enormous goal to have the lowest return rate in the industry. It will obviously take us some time to get there. But we believe that by making sure that we understand what works for you and what doesn’t, we can get [there].
TC: You raised $30 million last year. Are you in the market for a Series B? What will you have to show investors toward that end?
JB: The logic behind the dollar amount that we raised was: how much do we need to build what we want to build, and then bring it to market and get traction? And so that is our goal that starts tomorrow. . .
TC: How has this current reality altered your plans? Launching during a pandemic isn’t what you were imagining, obviously.
JB: No, it is not. [Laughs.] I don’t know that any of us could have possibly. We did delay our launch; we were originally launching in March, and once COVID hit, we needed to make sure we could see straight and understand the impact. I think as time has passed, we have felt more and more compelled to get out there to help our brands, all of whom are feeling the impact of the retail stores closing, or orders being canceled by their retail partners. They’re all businesses and many of them small businesses, so we want to help them.
It’s also an interesting time because we all need a little bit of levity and escape. And the app really is a fun escape.
Directly, a startup whose mission is to help build better customer service chatbots by using experts in specific areas to train them, has raised more funding as it opens up a new front to grow its business: APIs and a partner ecosystem that can now also tap into its expert network. Today Directly is announcing that it has added $11 million to close out its Series B at $51 million (it raised $20 million back in January of this year, and another $20 million as part of the Series B back in 2018).
The funding is coming from Triangle Peak Partners and Toba Capital, while its previous investors in the round included strategic backers Samsung NEXT and Microsoft’s M12 Ventures (who are both customers, alongside companies like Airbnb), as well as Industry Ventures, True Ventures, Costanoa Ventures and Northgate. (As we reported when covering the initial close, Directly’s valuation at that time was at $110 million post-money, and so this would likely put it at $120 million or higher, given how the business has expanded.)
While chatbots have now been around for years, a key focus in the tech world has been how to help them work better, after initial efforts saw so many disappointing results that it was fair to ask whether they were even worth the trouble.
Directly’s premise is that the most important part of getting a chatbot to work well is to make sure that it’s trained correctly, and its approach to that is very practical: find experts both to troubleshoot questions and provide answers.
As we’ve described before, its platform helps businesses identify and reach out to “experts” in the business or product in question, collect knowledge from them, and then fold that into a company’s AI to help train it and answer questions more accurately. It also looks at data input and output into those AI systems to figure out what is working, and what is not, and how to fix that, too.
The information is typically collected by way of question-and-answer sessions. Directly compensates experts both for submitting information as well as to pay out royalties when their knowledge has been put to use, “just as you would in traditional copyright licensing in music,” its co-founder Antony Brydon explained to me earlier this year.
It can take as little as 100 experts, but potentially many more, to train a system, depending on how much the information needs to be updated over time. (Directly’s work for Xbox, for example, used 1,000 experts but has to date answered millions of questions.)
Directly’s pitch to customers is that building a better chatbot can help deflect more questions from actual live agents (and subsequently cut operational costs for a business). It claims that customer contacts can be reduced by up to 80%, with customer satisfaction by up to 20%, as a result.
What’s interesting is that now Directly sees an opportunity in expanding that expert ecosystem to a wider group of partners, some of which might have previously been seen as competitors. (Not unlike Amazon’s AI powering a multitude of other businesses, some of which might also be in the market of selling the same services that Amazon does).
The partner ecosystem, as Directly calls it, use APIs to link into Directly’s platform. Meya, Percept.ai, and SmartAction — which themselves provide a range of customer service automation tools — are three of the first users.
“The team at Directly have quickly proven to be trusted and invaluable partners,” said Erik Kalviainen, CEO at Meya, in a statement. “As a result of our collaboration, Meya is now able to take advantage of a whole new set of capabilities that will enable us to deliver automated solutions both faster and with higher resolution rates, without customers needing to deploy significant internal resources. That’s a powerful advantage at a time when scale and efficiency are key to any successful customer support operation.”
The prospect of a bigger business funnel beyond even what Directly was pulling in itself is likely what attracted the most recent investment.
“Directly has established itself as a true leader in helping customers thrive during these turbulent economic times,” said Tyler Peterson, Partner at Triangle Peak Partners, in a statement. “There is little doubt that automation will play a tremendous role in the future of customer support, but Directly is realizing that potential today. Their platform enables businesses to strike just the right balance between automation and human support, helping them adopt AI-powered solutions in a way that is practical, accessible, and demonstrably effective.”
In January, Mike de la Cruz, who took over as CEO at the time of the funding announcement, said the company was gearing up for a larger Series C in 2021. It’s not clear how and if that will be impacted by the current state of the world. But in the meantime, as more organizations are looking for ways to connect with customers outside of channels that might require people to physically visit stores, or for employees to sit in call centres, it presents a huge opportunity for companies like this one.
“At its core, our business is about helping customer support leaders resolve customer issues with the right mix of automation and human support,” said de la Cruz in a statement. “It’s one thing to deliver a great product today, but we’re committed to ensuring that our customers have the solutions they need over the long term. That means constantly investing in our platform and expanding our capabilities, so that we can keep up with the rapid pace of technological change and an unpredictable economic landscape. These new partnerships and this latest expansion of our recent funding round have positioned us to do just that. We’re excited to be collaborating with our new partners, and very thankful to all of our investors for their support.”
Copyright © 2020 iStart Valley.
