According to a report published last year, the global cloud-based email security market is estimated to grow at 8% CAGR to reach $1.1 billion by 2023. Emails are expected to be targets for nearly 90%...

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Sramana Mitra: Let’s talk a little bit about how you built the pieces of the business. Let’s talk about the retail e-commerce piece. It sounds like there is inventory involved. Did you finance the...

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Phos, the U.K. fintech that offers a software-only PoS so that merchants can accept payments directly on their phones without the need for additional hardware, has raised €1.3 million in funding. The round was led by New Vision 3, an early-stage VC based in Bulgaria (where a part of the Phos team is based), with participation from a number of unnamed angel investors.

It brings the total raised by Phos to date to €2.5 million, and will be used to grow the development team. This will see new features introduced, such as ‘PIN on Phone’, a Software Development Kit (SDK), and a new integrated loyalty system.

Founded in 2018, Phos has developed software that turns any NFC-equipped Android device into a payments terminal, negating the need for additional hardware and reducing total cost of ownership. The startup says its solution is quick to deploy, and is “uniquely” phone and bank agnostic i.e. any bank can act as the acquirer.

“Millions of traders and merchants do not accept card payments because they find the current hardware inconvenient or expensive,” Phos co-founder Ivo Gueorguiev tells TechCrunch. “Most of the merchants who accept card payments find the cost of ownership of the hardware high, [while the] current POS hardware offers no additional value, with the exception of very expensive smart terminals like Clover”.

To remedy this, Gueorguiev says Phos’ technology accepts contactless card payments directly on Android phones and other Android devices without the need for additional hardware, as well as helping merchants make better use of data.

“We offer merchants an alternative to old and expensive technology, namely [by using] devices they already own – their phones,” he explains. “We also offer merchants the ability to use their transaction data for other business applications. This includes e-commerce tools, marketing automation, loyalty, payroll, and more.

In terms of go-to-market, Phos is focused on a B2B model, seeing the fintech work with partners to distribute the product, such as banks, acquirers, PSPs/ISOs, large direct merchants, and platform players.

“The final user of the product will be mostly merchants at the long tail of the business, who are notoriously difficult to reach in a cost effective way,” adds Gueorguiev.

He cites use cases as small merchants and market traders, where traditional POS solutions are not appropriate due to costs and maintenance issues; direct sales and multilevel marketing; couriers and delivery services (“in certain markets ‘pay on delivery’ is still a predominant payment method with over 90% in cash,” says Gueorguiev); tradespeople; taxi drivers; insurance field sales; and even large retailers that can empower sales people to close sales in the aisles and reduce queues.

Adds Konstantin Petrov, Partner at NV3: “We are very happy to lead the investment round in phos and truly believe in the high potential of the company. The all important prerequisites for success are there: a strong and visionary team with years of experience in the field, a huge under-served market of small merchants who do not accept payments other than cash and an innovative technology providing first-mover advantage. In addition, fintech is considered a strategic vertical in the investment strategy of NV3 Fund, so phos is clearly a perfect add to our portfolio.”

MyBuddy.ai, a startup that develops virtual tools to help kids learn English, announced today that it has raised $1 million in seed funding from LETA Capital. The capital will be used to expand into new markets and develop new features including mini-classes about health.

The San Francisco-based company’s app features a AI-based virtual tutor called Buddy who coaches kids through a series of exercises. According to MyBuddy.ai, there are 500 million children around the world who want to learn English, but don’t have someone to practice the language with. It claims that its app has been downloaded more than one million times since launching two years ago.

In a press statement, MyBuddy.ai co-founder and CEO Ivan Crewkov said, “The demand for online education is rising sharply due to the pandemic. This has exacerbated the chronic shortage of qualified English language teachers needed for half a billion kids struggling to learn English as a second language. Our AI-powered tutor Buddy can handle the mundane part of their work. He provides unlimited practice of spoken English, can scale to millions of students and is always available.”

Last month, MyBuddy.ai merged with Edwin, an edtech startup that also focuses on learning English for non-native speakers and whose investors include General Catalyst, Y Combinator and Google Assistant Investments Program. Edwin’s products included a chatbot based on adaptive learning and natural language understanding AI, and an on-demand tutoring service. The combined company kept the name MyBuddy.ai and is focused on integrating technology from both startups into the Buddy app.

Neat, a Hong Kong-based fintech startup, announced today that it has raised a $11 million Series A to help small businesses do cross-border trade. The round was led by Pacific Century Group, with participation from Visa and MassMutual Ventures Southeast Asia, and returning investors Dymon Asia Ventures, Linear Capital and Sagamore Investments.

Neat also announced a strategic partnership with Visa, which means that in the next few months Neat will start issuing Visa credit cards to SMEs and startups.

This brings Neat’s total funding to $16.5 million, including its seed round announced at the end of 2018.

Like San Francisco-based Brex, which achieved a $2.6 billion valuation last year, Neat focuses on giving startups and small businesses a more efficient, online alternative to traditional banking.

Its services allow them to open business accounts for multiple currencies online, send and receive payments from different countries and apply for corporate credit cards. Neat’s new funding will be used for expansion, with a focus on Southeast Asian customers that do trade with European companies. Last year it opened a Shenzhen office to serve Chinese export businesses, as well as an office in London for Western European companies that trade in China.

Neat co-founder and CEO David Rosa told TechCrunch that businesses are still looking to digitize more of their operations despite the worldwide impact of the COVID-19 pandemic. “Neat is serving entrepreneurs around the world that trade with Asia. Before they may have fitted visits to the bank into their business trips to Hong Kong, this is no longer an option,” he said.

Corporate credit cards can be difficult for startups and SMEs to get because they typically need about three years of audited financials to qualify even for low spending limits, Rosa said. Employees often cannot get a corporate card because their managers do not have the tools to control their spending limits, making reimbursement more difficult. Neat’s partnership with Visa aims to solve many of the problems they encounter (it also offers a Neat Mastercard). In the future, Neat will launch tools for automated payroll, accounting and logistics.

In a statement, MassMutual Ventures managing director Ryan Collins said, “We’re proud to support Neat in the company’s vision to support entrepreneurs. There is a clear demand for better financial products for SMEs, especially when it comes to cross-border payments and trade, and we’re confident that Neat’s passionate and innovative team will deliver.”

Tyto Care, the provider of a home health diagnostic device and telemedicine consultation app, said it has raised $50 million in a new round of funding.

The round was led by Insight Partners, Olive Tree Ventures, and Qualcomm Ventures, according to a statement, and brings the startup’s total capital raised to more than $105 million.

The funding comes just as Tyto has seen a dramatic surge in demand brought on by the global response to the COVID-19 pandemic. Tyto Care’s toolkit is being used as a telehealth diagnostic solution that was already seeing three times sales growth in 2019 alone.

Last year, the company inked a deal with Best Buy and works with most of the major telemedicine providers, including American Well, Teladoc and others.

Previous investors Orbimed, Echo Health, Qure, Teuza and others also participated in the new financing, the company said in a statement.

With the financing, Tyto Care is well-positioned to both buy and build new tools based on its existing diagnostics platform, as well as expand its home health testing kit into new areas.

Companies like Scanwell Health are providing at-home diagnostic tests for things like urinary tract infections, and Tyto Care chief executive Dedi Gilad definitely sees options for new products around different kinds of at-home tests, the Tyto Care founder said in an interview.

All of this new capital comes with surging demand where Tyto Care’s telehealth technology is being used by every hospital in Israel to provide remote examinations of quarantined and isolated patients infected with COVID-19. Other hospital networks are also turning to the company’s diagnostics tools for similar applications, the company said.

The remote medical exams can protect health providers from exposure to SARS-Cov-2, the virus that causes COVID-19, and enables uninfected patients to get an examination of their basic health remotely, without needing to go to a medical facility.

“Over the past two years, Tyto Care has increased momentum faster than ever before and is playing a leading role in changing how people receive healthcare. Telehealth is heeding the call of the COVID-19 pandemic and we are proud that our unique solution is aiding health systems and consumers around the world in the fight against the virus,” said Gilad, in a statement. “This new funding comes at a pivotal moment in the evolution of telehealth and will enable us to continue to transform the global healthcare industry with the best virtual care solutions.”

Last valued at $5 billion, restaurant management platform Toast has joined the sweep of startups laying off employees due to the economic impact of the COVID-19 pandemic. Toast reduced the size of its staff by 50% through layoffs and furloughs, according to a blog post from Toast’s CEO, Chris Comparato. It also reduced executive pay across the board, froze hiring, halted bonuses and pulled back offers.

The company’s flagship product helps restaurants process payments and handle orders through a mix of hardware and software. Think handheld ordering pads, self-service kiosks and display systems for kitchens. It also connects businesses to food delivery services like Grubhub.

Toast sits on the bridge between two industries in the spotlight, for better or worse, right now: restaurants and fintech. But restaurants have been hit hard as eateries were forced to close down due to state mandates, or to simply promote social distancing. As a result, fintech companies that help restaurants work better and depend on foot traffic are seeing less transaction volume.

Comparato, in the blog post, cited how restaurant revenue broadly took a huge hit in March, which naturally trickled down to Toast’s operations.

“With limited visibility into how quickly the industry may recover, and facing slower than anticipated growth, we now find ourselves in the unenviable position of reducing our headcount,” he wrote. He noted that before the pandemic hit, Toast revenue grew 109% in 2019. In an interview with Crunchbase News in February, chief financial officer Tim Barash said that the company’s goal in the next few years is to go public.

The Toast employees laid off were offered a “severance package, benefits coverage, mental health support, and an extended window during which they can purchase vested stock options,” the blog post detailed. Toast is also developing a program to help those laid off or furloughed look for new roles, a move that mimics other efforts we’ve seen across the startup world.

Investors in Toast include TCV, Tiger Global Management, Bessemer Venture Partners and T. Rowe Price Associates.

A number of startups over the years have promised to re-invent email only to have fallen short. Even Google’s radical re-imagining, the Inbox app, finally closed up shop last year. Today, another company is announcing its plans to build a better inbox. Edison Software is preparing to launch OnMail, a new email service that lets you control who enters your inbox. This is handled through a new blocking feature called Permission Control. The service is also introducing a number of other enhancements, like automatic read receipt and tracker blocking, large attachment support, fast delivery, and more.

Edison is already home to the popular third-party email app, Edison Mail.

Edison Mail is designed to work with your existing email, like your Gmail, Yahoo, Microsoft, or iCloud email, for example, among others. OnMail, however, is a new email service where users will be assigned their own email account at @onmail.com when the product debuts later this summer.

At launch, the web version of OnMail will work in a number of browsers. It will also work in the existing Edison Mail apps for Mac, iOS, and Android.

The biggest idea behind OnMail is to create a better spam and blocking system.

Though Gmail, Outlook.com, and others today do a fairly decent job at automatically filtering out obvious spam and phishing attempts, our inboxes still remain clogged with invasive messages — newsletters, promotions, shopping catalogs, and so on. We may have even signed up for these at some point. We may have even tried to unsubscribe, but can’t get the messages to stop.

In other cases, there are people with our email address who we’d rather cut off.

The last time Gmail took on this “clogged inbox” problem was in 2013 when it unveiled a redesigned inbox that separated promotions, updates, and emails from your social media sites into separate tabs. OnMail’s premise is that we should be able to just ban these emails entirely from our inbox, not just relocate them.

OnMail’s “Permission Control” feature allows users to accept or decline a specific email address from being able to place mail in your inbox. This is a stronger feature than Edison Mail’s “Block Sender” or “Unsubscribe” as a declined sender’s future emails will never hit your inbox — well, at least not in a way that’s visible to you.

In technical terms, declined senders are being routed to a folder called “Blocked.” But this folder isn’t displayed anywhere in the user interface. The blocked emails won’t get pulled up in Search, either. It really feels like the unwanted mail is gone. This is all done without any notification to the sender — whether that’s a human or an automated mailing list.

If you ever want to receive emails from the blocked senders again, the only way to do so will be by reviewing a list of those senders you’ve banned from within your Contacts section and make the change. You can’t just dig into a spam folder to resurface them.

In another update that puts the needs of the receiver above those of the sender, OnMail will remove all information sent from any invisible tracking pixels.

Today, most savvy email users know to disable images in their Gmail or other mail apps that allow it, so their email opens are not tracked. But OnMail promises to remove this tracking without the need to disable the images.

“We view pixel tracking as this horrific invasion of privacy and this is why we block all read receipts,” noted Edison Co-Founder and CEO, Mikael Berner. “The sender will never know that you opened their email,” he says.

Other promised features include an improved Search experience with easy filtering tools, support for large attachments, enhanced speed of delivery, and more.

Edison says it’s been working to develop OnMail for over two years, after realizing how broken email remains.

Today, U.S. adults still spend over 5 hours per day in our inboxes and feel like they’ve lost control. Tracking pixels and targeted ads are now common to the email experience. And searching for anything specific requires complicated syntax. (Google only recently addressed this too, by adding filters to Gmail search — but just for G Suite users for now.)

It may be hard for people who have set up shop for 10 or 20 years in the same inbox to make a switch. But there’s always a new generation of email users to target — just like Gmail once did.

And now that Gmail has won the market with over 1.5 billion active users, its innovations have slowed. Every now and then Gmail throws a bone — as with 2018’s debut of Smart Compose, for example — but it largely considered the email problem solved. A little fresh competition is just the thing it needs.

“We’ve invested years as a company working to bring back happiness to the inbox,” said Berner, in a statement. “OnMail is built from the ground up to change mail. Nobody should fear giving out their address or have to create multiple accounts to escape an overcrowded mailbox,” he said.

OnMail’s premise sounds interesting. However, its software is not yet live so none of its claims can be tested at this time. But based on Edison’s history with its Edison Mail app, it has a good handle on design and understanding what features email users need.

Currently, OnMail is open only to sign-ups for those who want to claim their spot on its platform first. Like Gmail once did, OnMail will send out invites when the service becomes available. Unlike Gmail, OnMail won’t be ad-supported, but will eventually offer free and paid versions of its service.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.

Dear Sophie: I have an H-4 visa and work authorization. I currently have a job that’s considered nonessential during the coronavirus emergency. If I get laid off, I would need unemployment assistance while I look for another job.

Would getting unemployment benefits hurt my or my spouse’s green card petition under the new public charge rule?

— Nonessential in NorCal

Dear Nonessential:

Thanks for your timely question. The short answer is no, getting unemployment benefits alone right now won’t jeopardize your or your spouse’s green card. This is because receiving unemployment benefits, getting tested for coronavirus and seeking emergency medical treatment (even if it’s covered by Medicaid) are all exempt from consideration as government benefits under the new public charge rule.

Immigration officials have long had the authority to deny individuals a visa or green card if they are likely to be dependent on public benefits. The new public charge rule, which went into effect on February 24, expands the factors immigration officials will consider. An additional form seeking health and financial information must now be submitted with most visa and green card applications. Immigration officials will use that information to determine whether applicants are or are likely to become dependent on government benefits.

If you have received a public benefit in the past, your application won’t necessarily be denied, but given what’s at stake, it’s important to consult an experienced immigration attorney.

Individuals who will be subjected to the increased scrutiny of the expanded public charge rule are:

Just like in almost every other industry, there’s been a rash of layoffs among newer space startups and companies amid the novel coronavirus crisis. But Relativity Space has managed to avoid layoffs — and is even hiring, despite the global pandemic. Relativity CEO and founder Tim Ellis cites the company’s focus on large-scale 3D printing and its adoption of cloud-based tools and technologies as big reasons why his startup hasn’t felt the pinch.

Because Relativity’s forthcoming launch vehicle is almost entirely made up of 3D-printed parts, from the engines to the fuselage and everything in between, the company has been able to continue producing its prototypes essentially uninterrupted. Relativity has been classified an essential business, as have most companies operating in anything related to aerospace or defense, but Ellis said that they took steps very early to address the potential threat of COVID-19 and ensure the health and safety of their staff. As early as March 9, when the disease was really first starting to show up in the U.S. and before any formal restrictions or shelter-in-place orders were in effect, Relativity was recommending that employees work from home where possible.

“We’re able to do that, partially because with our automated printing technology we were able to have very, very few people in the factory and still keep printers running,” Ellis said in an interview. “We actually even have just one person now running several printers that are still actually printing — it’s literally a single person operating, while a lot of the company has been able to make progress working from home for the last couple of weeks.”

Being able to run an entire production factory floor with just one person on-site is a tremendous competitive advantage in the current situation, and a way to ensure you’re also respecting employee health and safety. Ellis added that the company has already been operating between multiple locations, including teams at Cape Canaveral, Florida, as well as at Stennis Space Center in Mississippi and at its headquarters in LA. Relativity also had a further distributed workforce with a few employees working remotely from locations across the U.S, and it focused early on ensuring that its design and development processes could work without requiring everyone to be centrally based.

“We’ve developed our own custom software tools to just streamline those workflows, that really helped,” Ellis said. “Also, just being more of a cloud-enabled company, while still complying with ITAR and security protocols, has been really, really advantageous as well.”

In addition to their focus on in-house software and cloud-based tools, Ellis credits the timing of their most recent round — a $140 million investment closed last October — as a reason they’re well-situated for enduring the COVID-19 crisis. He says that Relativity not only managed to avoid any layoffs, while sending out new offers, but they’re also still paying all employees, including hourly workers, their full regular wage. All of this stems from a business model that in retrospect, seems prescient, but that Ellis says actually just has significant advantages in today’s global business climate by virtue of chance. Still, he does believe that some of Relativity’s resilience thus far signals some of the biggest lasting changes that will result from the coronavirus pandemic.

“What it’s really going to change […] is the approach to global supply chain,” he said. “I think there’s going to be a big push to have more things made in America, and then less dependence on heavy globalization across supply chain. That’s one you thing we’ve always had with 3D printing — not only is it an automated technology, where we can have very few operators still making progress even during times like like this and printing some of the first-stage structures of our rocket — but on the supply chain side, just having simpler supply chains with fewer vendors and different types of manufacturing processes means it’s much less likely that we’ll see very significant supplier and supply chain interruptions.”

Meanwhile, while Ellis says that ultimately they can’t predict how the coronavirus crisis will impact their overall schedule in terms of planned launch activities, which includes flying their first 3D-printed vehicle in 2021, they anticipate being able to make plenty of progress through remote work and a production line that can easily comply with social isolation guidelines. Partner facility shutdowns, including the rocket engine test stand at Stennis, will definitely have an impact, but Relativity’s resilience could prove a model for manufacturing businesses of all stripes to emulate once this moment has passed.

In case you missed it, you can listen to the recording here: Rendezvous Online with Sramana Mitra 1.28.20

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A startup that has framed itself as an Instagram for websites is now squaring up against Shopify as it nabs new funding from Google’s venture capital arm.

Brooklyn-based Universe has just closed a $10 million Series A from GV. The funding round was well in the works before the COVID-19 pandemic took hold stateside; nevertheless, CEO Joseph Cohen definitely sounded relieved to have everything signed.

“Hopefully, it’ll take some weight off their shoulders that may have been there otherwise,” said GV general partner M.G. Siegler, who led the deal and is taking a seat on their board.

When the team launched out of YC two years ago, the initial aim was to be the go-to short link for young people and creatives to stick in their Instagram bios. The mobile app allowed users to create very basic landing pages, allowing them to type up some text, toss up photos and arrange their creation across a couple of web pages.

As the startup matures and looks to home in on a more robust business model, they’re now looking to build an incredibly low-friction commerce platform. Users can add a shopping “block” to their site, add a photo, description and price and then start accepting orders.

“We’ve gone from a landing page builder to a full-fledged website builder,” Cohen told TechCrunch in an interview.

Universe is going after what Cohen calls “very small businesses.” This could be an artist selling prints, a yoga instructor charging for Zoom classes or one of their latest customers, a farmer selling live bait. “These are people who don’t work at desks,” Cohen says.

Shopify has been one of the biggest tech success stories of the past several years, but Cohen sees weaknesses for Universe to capitalize on. Shopify is “complex and not mobile-first,” he says. Universe not only doesn’t require a developer to implement, it doesn’t seem to require someone that’s particularly tech-savvy.

The price of simplicity for the end user is a hefty cut for Universe. At launch, the company isn’t taking a percentage for the first $1,000 of a customer’s revenue, but will take a 10% slice thereafter, a number that’s notably multiples higher than the rates of competitors.

Cohen acknowledges that if a business succeeds, this can be a significant expense for them, one that might push them to another platform. He say that he wants to figure out a model that can help his startup “grow and scale” with their customers, but he didn’t offer up any details on what that might look like.

The team is still working with free and paid “pro” tiers that offer advanced features like analytics. Commerce features will be available for both tiers.

Universe has raised $17 million to date. Other investors include Javelin Venture Partners, General Catalyst and Greylock Partners.

We chatted with GV’s M.G. Siegler about closing this deal and how his role as an investor has shifted since the current crisis took hold. You can read that interview on Extra Crunch.

The coronavirus pandemic has pushed entrepreneurs and investors into unknown territory.

Google’s GV just led a $10 million investment in Universe, a low-friction website builder that’s venturing into the world of commerce.

The investment was in the works before COVID-19 hit America in force, but things were finalized for the Brooklyn startup in late March. I chatted with M.G. Siegler, the general partner at GV (and former TechCrunch writer) who led the deal, about how the crisis was affecting his investment work and how he was balancing portfolio work with sourcing new deals.

This interview has edited for length and clarity.

TechCrunch: This deal sounds like it was in the works before pandemic concerns really hit America, but when you saw this situation arise, did it change your thinking about this deal at all?

M.G. Siegler: The reality is we’re still going to be continuing to look for interesting opportunities to invest in. History has shown that even during great financial turmoil, many companies are still being built, although it’s certainly not easy for anyone, given that we’re all stuck inside and trying to make things work. I think Universe is in an interesting spot; they have a tool that can potentially help some of these struggling businesses move online quicker and create commerce opportunities that they really need to think about given the current realities.

So there’s no thought that we shouldn’t do something just because of the current macro environment if we’re really passionate about it to begin with. Obviously, there’s varying degrees of that for different sectors, but I do think that Universe had been in a great position before this situation, and it seems like they have different opportunities now.

Voice-based social networks and gaming as a new form of identity were among the top emerging trends in consumer social startups, according to an Extra Crunch survey of top social tech investors. Meanwhile, anonymity and dating apps with a superfluous twist were spaces where investors were most pessimistic.

Extra Crunch assembled a list of the most prolific and well-respected investors in social. Many have funded or worked for the breakout companies changing the way we interact with other people. We asked about the most exciting trends they’re seeing and which areas they expect will soon spawn blockbuster social apps.

Subscribe to Extra Crunch to read the full answers to our questionnaire from funds like Andreessen Horowitz, CRV and Initialized.

Here are the 16 leading social network VCs that participated in our survey:

Stay tuned next week for a follow-up article from these investors detailing their thoughts on social investing in the COVID-19 era.

Olivia Moore & Justine Moore, CRV

What trends are you most excited about in social from an investing perspective?

First, it’s worth noting that consumer social is very hard to predict. Unlike enterprise software, there’s no rational buyer, and the things that take off can seem “random” or dumb. Startups that see huge success in this space are often pioneering a new feature or way of communicating that hasn’t existed before. Any VC who claims to know what the “next big thing” in consumer social will look like should probably go build it themselves!

Early this afternoon Shippo, a shipping software and services company, announced that it has closed a $30 million Series C. The funding round roughly doubles the capital that the firm has raised to-date, from a little over $29 million to just under $60 million.

The round, however, wasn’t put together recently. As is often the case with funding events, Shippo raised its capital a while back and is only announcing it now. According to its CEO, Laura Behrens Wu, her startup started raising its Series C in late Q4 2019, with the capital hitting its accounts the day after Christmas. So, Shippo started 2020 well capitalized, and should have a comfortable capital base heading into this year’s economic uncertainty.

The funding round was led by a new investor, D1 Capital Partners, and participated in by a number of prior investors including Uncork Capital (which led a 2014 Seed investment into the company), Union Square Ventures (which led the company’s Series A in 2016) and Bessemer (which led its 2017 Series B).

Growth, margins

Shippo sits between retailers and consumers, helping sellers ship goods to buyers quickly and, it promises, inexpensively. The startup works with nearly five dozen shipping partners around the world, and plugs into the merchant worlds of Amazon, Shopify, Wix and others.

Like a number of successful startups, Shippo is trying to take something that is complex, and make it simple while generating revenue along the way. There are a number of loose examples we can lean on. For example, Plaid took all the complexity of talking to different financial institutions and shoved it into an accessible API. Twilio did something similar for telephony. Stripe made payments simple for others to integrate. You get the idea. Shippo wants to the same for shipping.

So far its model has good momentum. Heading into its funding round the firm had doubled (“100% growth,” Behrens Wu) in the preceding year, the sort of expansion that investors covet. It’s never bad to raise on the back of aggressive growth, as Shippo’s Series C shows; the company’s new valuation is “slightly higher” than TechCrunch’s estimate of $150 million, according to its CEO.

And even more, Shippo’s hybrid software and sales model (it charges for access to its shipping software and generates revenue from select shipping spend) creates attractive economics. Shippo’s gross margins are right around 80%, according to the startup, putting the company in the middle-upper tier of SaaS firms. Its growth isn’t based on the upselling shipping by a few points at volume; Shippo does have venture-ready economics.

It might seem odd to stress that point, but after WeWork’s implosion, it’s worth checking to make sure that startups raising as if they have strong revenue quality actually do.

Shippo has big aspirations, as you’d expect. “When you think about shipping software,” Behrens Wu told TechCrunch during an interview, “most people, even in tech, can’t name a single shipping software company, but everyone can name one or two payment companies. Everyone knows PayPal, Stripe, maybe Adyen or Braintree.” She wants to make Shippo as well known for shipping as Stripe is for payments.

There was secular movement towards her vision even before the pandemic. Today, online shopping — the grist for Shippo’s mill — is even more important. And it’s likely to become even more so over time, if growth shown by Amazon and Shopify in recent quarters is any indication of what’s to come, which means that the market for Shippo’s services will grow in time, and it’s always easier to grow in an expanding market than to claw for share in a stagnant pool.

Finally, in addition to its new capital and raised valuation, Shippo also announced that it has hired Catherine Stewart, former chief business officer at WordPress juggernaut Automattic, to be its COO. If Shippo is hiring a COO now, then we expect to see a CFO added around the time of its Series D. And then we get to start annoying the company about its IPO timeline.

Shippo is one of the lucky startups that raised right before the world changed. Now it’s up to the startup to conserve cash while continuing to grow while the global economy struggles. Let’s see how it performs.

The fintech wars continue to heat up with another major exit in the space.

Consumer financial services platform SoFi announced today that it is acquiring payments and bank account infrastructure company Galileo for $1.2 billion in total cash and stock. The acquisition is dependent on customary closing conditions.

Salt Lake City-based Galileo was founded in 2000 by Clay Wilkes and was bootstrapped to profitability over the intervening two decades. My colleague Jon Shieber wrote a profile of Galileo back in November after the company announced its second round of external funding, a $77 million Series A check from Accel, which was led by growth partner John Locke. The company had previously raised an $8 million Series A round from Mercato Partners in April 2014.

Galileo provides APIs that allow fintech companies like Monzo and Chime to easily create bank accounts and issue physical and virtual credit cards, among myriad other services. While simple in theory, banking regulations and financial rules place a huge regulatory burden on fintech companies, burdens that Galileo takes on as part of its platform.

The company has found particular success in the United Kingdom, where all five of the country’s largest fintechs are customers. Globally, it processed an annualized $45 billion in transaction volume last month, up from $26 billion in October 2019 — nearly doubling in just six months.

From a strategic perspective, SoFi’s objective is that Galileo will help power its expanding suite of finance products and offer it another revenue source outside of consumer services. While SoFi was founded a decade ago to offer ways to secure better financial terms for student loans, it now offers a bevy of consumer financial options, including loan, investment and insurance products as well as cash and wealth management tools. With Galileo, it now has a clear B2B revenue component as well.

SoFi, which is now led by ex-Twitter COO Anthony Noto, has also raised hundreds of millions of new capital from the likes of Qatar in recent years. The company was most recently valued at $4.3 billion.

Galileo will operate as an independent division of SoFi, and will be continuing its operations with founder Wilkes remaining as chief executive.

As fintech valuations have rapidly expanded in recent years, the companies that empower those fintechs have increasingly become strategic for investors. Earlier this year, Visa bought Plaid for $5.3 billion, in what was considered a key exit for a finance infrastructure company. That exit brought acute investor and strategic interest to the space, interest that almost certainly accrued to Galileo, as well, and helps explain the company’s relatively quick exit from its funding round last year.

As for Accel, the firm has long had a strategy of investing in mostly bootstrapped companies, sometimes a decade or more after their founding, with examples outside of Galileo including 1Password, Qualtrics, Atlassian, GoFundMe and Tenable. Accel also led this type of round into payments platform Braintree, where the firm met the startup’s GM Juan Benitez, who also joined Galileo’s board in November along with Accel’s Locke.

Accel’s valuation of the deal was not publicly disclosed in November, but a source with knowledge of the acquisition today characterizes the firm’s return as more than 4x. Given that Accel held the equity for roughly half a year, that’s quite the IRR multiple in an otherwise challenging global macro context. Given that the acquisition of Galileo was for cash and stock, Accel likely now holds a stake in SoFi, making at least part of the return unrealized.

Galileo was represented by Qatalyst in the transaction.

Updated April 7 to include the $8 million Series A funding round led by Mercato Partners and more context on IRR.

After raising $8 million in November to roll up top Amazon marketplace companies, the new Boston-based startup Perch has begun putting that money to work in its first few deals.

The brainchild of Chris Bell, formerly Wayfair’s head of logistics and a Bain & Co. principal, Perch is well-positioned to serve as unifier of a bevy of disparate products in one nest.

The company’s recent acquisitions include brands selling a sand anchor for beach umbrellas (Beachr), a waterproof apron for cooking, a hip sciatica brace (Bodymate) and other similar products that wouldn’t be out of place in a late-night infomercial or on the Home Shopping Network.

“We believe that the future of product R&D is entrepreneurs that are closest to the problems,” says Bell in an interview. “We look for products that are top three in their niche… [Their founders] want some liquidity and we can bring that onto our platform and add price optimization, ad-spend optimization and cross-geography marketing.”

In a way, Perch is tapping into a similar urge to give America’s huge population of tinkerers and inventors better access to market and a chance to monetize their ideas à la Quirky, the failed attempt by GE to turn gadget ideas into new product lines for GE. 

By contrast, Perch waits for the businesses to gain traction, then offers to buy the products from their owners and give them up to two years of participation in any upside that the product generates at certain milestones that Perch sets for the participating entrepreneurs.

“Three years ago I would not have started this business,” says Bell. “Amazon has made this a much more defensible place.” 

The Amazon marketplace remains somewhat of the Wild West, where intellectual property rights are often ignored and successful products are copied at lightning speed by vendors with access to the same commoditized supply chains. It’s really marketing muscle and an ability to get better margins through scale that creates winners, it seems, and Perch is using its technical know-how to get to the top. 

Acquisitions can range from $750,000 to $2 million upfront with the upside on the back end still to come, according to Bell. Financing this operation is a $4.5 million equity round and $3.5 million in debt financing by some of the nation’s leading venture firms. Perch won’t buy any company that’s doing less than $250,000 in revenue.

Spark Capital led the deal for Perch, with general partner Alex Finkelstein taking a seat on the company’s board of directors. Tectonic Ventures also participated. Finkelstein, who led Spark’s investment in Wayfair, was introduced to Bell through Wayfair’s chief operating officer. He immediately saw the potential in Perch’s pitch.

“If you look at it from a macro standpoint. Amazon is growing very quickly and the third-party marketplace is growing very quickly. Within the next year we’re going to have a large portfolio and it’ll do well in any environment,” Finkelstein said. 

Amazon’s third-party sellers are a $200 billion market and the largest single vendor is a $500 million seller, Bell noted, and that is an opportunity that a well-capitalized company can exploit.

“We’re going to be managing hundreds of micro-brands and the only way to do that is through a technology platform,” Bell said. “They’re generally niche products that are not big enough that Amazon Basics would come into that category. We’re competing in smaller categories, but even some of these niche categories are tens of millions to hundreds of millions in revenue.”

While Perch has seen some impacts from the economic shutdown caused by the government response to the COVID-19 epidemic, the company expects the shift in consumer behavior to be the wind beneath its wings, rather than against its branches.

“Medium-term it’s pushing more people to buy online,” says Bell. And Perch isn’t slowing its pace of acquisitions. “We made two acquisitions in March and we’re likely going to close another two in the next two weeks.”

Securitization is a critical function of the modern financial system. Banks “package” individual loans, say a mortgage or an auto loan, into a group with similar characteristics and sell them to other investors. That gets the debt off the originator’s balance sheet so that they can offer more loans, while also offering private investors alternative investment opportunities to buy up.

Despite the scale of the market — the trade association SIFMA’s research shows that the volume for asset-backed securities reached more than $300 billion in 2019 (excluding mortgages) — much of that structuring remains relatively ad hoc, with structuring agents and buyers constantly seeking each other out.

Much in the way that real estate and startup crowdsourcing platforms democratized access to those alternative investments, Cadence wants to expand access to securitized products while increasing the velocity of transactions for originators and lowering prices. Founder and CEO Nelson Chu said that “our job is to bring transparency and efficiency to this market and through all the various things that we do.” The company operates on top of the Ethereum blockchain network.

Founded in 2018 and launched publicly in 2019, the New York City-based capital markets startup has now structured $88 million in notes across 76 offerings and 12 originators according to the company. The firm’s public leaderboard shows that the largest originators were Sellers Funding with more than $23 million and Wall Street Funding with almost $26 million in transaction volume. Chu said that “I think we are the 21st largest structuring agent the United States in 2020 so far,” which is not a bad place to be for a young startup in a massive multi-trillion dollar market.

In addition to that $88 million volume processed on the company’s retail platform, Cadence also structured a $40 million whole business securitization with FAT Brands, the owner of restaurant chains like Fatburger and Yalla Mediterranean. The company notes that the structuring reduced the company’s interest costs by $2 million.

The company has hit a number of milestones over the past two years. It closed a seed round of $4 million in December led by Revel VC, with Revel’s Thomas Falk, Navtej S. Nandra, former President of E*Trade, and portfolio manager Oliver Wriedt joining the company’s board.

In addition, back in 2019, the company said that it also became the first digital asset company to launch a digital asset ticker on Bloomberg Terminal and also the first to join the Bloomberg App Portal. It also secured the first financial debt rating for a digital asset.

The company has a variety of revenue streams from different areas of its platform. It takes transaction fees on each deal, but also derives revenues from hosting data related to the performance of the underlying loans. Given the company’s technology stack, it has better and more verified data about how the underlying assets that back each security are performing, giving all investment holders a much more robust look at the health of their portfolio.

Longer term, Cadence’s goal is to move to a mostly SaaS model for originators and buyers. “We can be very, very beneficial to every single counterparty involved when we become that,” Chu said, adding “we essentially are Switzerland … because our incentives are all aligned.”

I asked about how the company is responding to the COVID-19 situation, and Chu said that as the world saw in the 2008 global financial crisis, “there are pockets of opportunity here that we continue to find, and we allow retail, accredited investors to get access to that.” Chu gave the example of game developers waiting on payments from Apple and Google who need short-term loans to cover costs.

In addition to Revel, other investors in the seed round included Morgan Creek Digital, Nimble Ventures, Argo, Tuesday Capital, Manatt, and Recharge Capital. R&R Venture Partners, a joint VC firm of former Citi chairman Richard D. Parsons and Clinique chairman Ronald S. Lauder, also participated.

CircleCI, an early adherent to the notion of continuous delivery when it launched in 2011, announced a $100 million Series E investment today. It comes on top of a $56 million round last July.

The round was led by IVP and Sapphire Ventures . Under the terms of the deal, Cack Wilhelm will be joining the CircleCI board. Jai Das from Sapphire will also be joining the board as an observer.

Today’s investment brings the total raised to $215 million, according to the company, with $156 million coming over the last 8 months. The company did not want to discuss its current valuation.

Circle CI CEO Jim Rose says with so much uncertainty because of COVID-19 he welcomes not only the money, but the quality of the firms and people involved in the investment.

“We’re really excited to get both IVP and Sapphire because they’ve seen all of it all the way through public and beyond. Given all of the nuttiness over the last few months obviously having cash on the balance sheet is extremely helpful, but the other part, too is that this a time when you want to have more brains around the table, not fewer. And so being able to get people to help out and just think about the problems that we’re encountering right now is really helpful,” Rose told TechCrunch .

Rose recognizes the huge challenge everyone is facing, but he sees this switch to remote workforces really driving the need for more automation, something his company is in a position to help DevOps teams with.

“What we’ve seen from a DevOps perspective is that this forced migration to remote-only for so many organizations has really driven the urgency for more automation in the DevOps pipeline,” he said.

He said this has led to a huge surge in usage on the platform in recent weeks, and today’s investment will at least partly go towards making sure there are enough resources in place to keep the platform stable whatever comes.

“When we think about money and we think about where we’re investing in the near term, we’re investing a lot in making sure that the platform is stable and available and supporting all of our customers as they go through this. You know this is a difficult time, a difficult transition and we’re trying to make sure that we’re doing everything we can to support our customers through that process,” Rose said.

Many companies at this stage of startup maturity begin to look ahead to an IPO, but Rose isn’t ready to discuss that, especially in the current economic climate. “We’re going to have to get folks to some kind of liquidity at some point, but I think right now our focus is on really investing in the platform and investing in our customers and then we’ll let the market clear out and figure out what the new normal looks like,” he said.

The company would consider making some acquisitions with its base of capital if the right opportunity came along. “We’re always evaluating and always looking around. One of the interesting things about our space is that it’s flooded with new and innovative approaches to point problems. There are a lot of companies that are interesting, so we’re definitely always looking around,” he said.