Sramana Mitra: Let’s talk about some of your portfolio highlights. What are you really proud of having invested in? As you choose the ones to talk about, specifically point out when you saw them, in...

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Equidate, a 4.5-year-old, San Francisco-based marketplace that makes privately held shares available to accredited investors wanting to buy them, is announcing a whopper of a round this morning: $50 million in Series B funding from Financial Technology Partners, Panorama Point Partners and Operative Capital. The company had earlier raised only very small seed and Series A rounds from renowned investors Scott Banister, Tim Draper and Peter Thiel.

The round is entirely unsurprising, given the circle of life for many venture-backed startups, which is to raise capital, raise more capital if your company takes off, then . . . raise even more capital — sometimes a staggering amount — while pushing off an IPO or sale for as long as possible. (At this point, you need to ensure that when you do make a move, your company is valuable enough to return all that money and then some.)

The cycle won’t change any time soon, given the amounts of late-stage capital being raised to support it. Sequoia Capital is well on its way to closing an $8 billion fund. Insight Venture Partners last week closed a $6.3 billion fund. Lightspeed Venture Partners announced $1.8 billion across two new funds earlier this month. Index Ventures closed on two funds totaling $1.65 billion earlier this month. It goes on and on.

While an interesting and complicated and controversial trend for many reasons, including that many more “unicorns” are being minted than will be giant success stories, the shift toward pushing out potential liquidity events has been a very propitious development for secondary players — outfits like Industry Ventures and EquityZen and Saints Capital — that help employees and early investors in privately held companies sell their “pre-IPO” holdings to someone else.

It’s been good news, too, for Equidate, whose profile has been rising behind the scenes, including in part to its role in working with the streaming music service Spotify ahead of its direct public listing in April. According to Equidate co-founder and co-CEO Sohail Prasad, by encouraging an active secondary market ahead of that move, Spotify was able to glean the volume and price discovery information it needed to set a fair price for its public market shares, and Equidate handled 40 percent of those trades.

Equidate, which employs 26 people, typically requires a minimum investment of between $20,000 and $50,000. It serves accredited and institutional investors only. With exceptions, it keeps 5 percent of each transaction as its commission fee, and it says that it’s on track to transact $1 billion worth of shares this year.

Other past companies that Equidate has either worked with directly — or, at least, that haven’t stopped Equidate from selling their privately held shares — include Didi, the major Chinese ridesharing company; Meituan Dianping, the highly valued, China-based group-buying website for locally found consumer products and services (it filed to go public last month); Tencent’s music service, which also plans to list soon; and Xiaomi, the smartphone maker that went public in Hong Kong earlier this month.

Indeed, asked about trends he is seeing in the secondary market, Prasad notes companies are staying private longer, prompting more of them to think about “interval liquidity programs” that let employees and early shareholders sell during pre-set windows.

He also notes that unlike in recent years, where money around the world was looking for opportunities in Silicon Valley, a bit of a sea change is currently afoot. Today, he says, “we’re seeing more VCs and hedge funds looking at these new Asian unicorns and Chinese unicorns in particular. They see them as a great opportunity.”

Pictured above, left to right, Equidate co-founders and co-CEOs Sohail Prasad and Samvit Ramadurgam.

Half a decade after its founding, Peloton became a unicorn. During its short existence, the company has found tremendous success riding the wave of successful spin classes that includes the likes of SoulCycle and Flywheel.

Peloton offered a unique take on the space, harnessing technology to provide a state of the art version of the phenomenon from the comfort (and privacy) of the user’s home. Peloton’s pricey bikes live-stream spin classes, through a subscription based service.

Since its founding, Peloton has managed to double the size of its company, year over year, while raising $444.7 million, at last count. In a recent interview, CEO and co-founder John Foley called the company, “weirdly profitable.” 

The company released its first bike in 2014. Last year, it added a treadmill to its list of livestream devices, along with a more rugged version of its bike targeted at gyms and hotels.  Peloton has continued to expand its reach with the additions of showrooms, designed at bringing the experience closer to users who might otherwise not have an opportunity to interact with the company’s $2,000 devices.

Foley will join us Disrupt in San Francisco this September to discuss how the company has managed to grow so quickly, while avoiding the pitfalls of putting too much stock into the latest fitness trends.

The full agenda is here. Passes for the show are available at the Early-Bird rate until Aug 1 here.

Christie Lagally spent half of a decade working on planes as an aerospace engineer — but now she’s trying to attack the food industry head-on with a hopeful attempt to change the way we eat chicken.

That’s the aim of Seattle Food Tech, which looks to create what effectively looks and feels like a chicken nugget out of plant-based food. That means trying to mimic it all the way down to the puff it gets in an oven, and while some companies like Impossible Foods go after the look and feel of a burger, Lagally wants to focus on the much lower-hanging fruit of more processed food — which makes up a significant chunk of chicken consumption. The company is coming out of Y Combinator’s 2018 summer class this year.

“We’ve continued to develop all sorts of systems to support [meat as a staple of the diet], with funding for farmers to support the meat industry, for food groups that push dairy and meat, and to support all that we developed the concept of factory farming,” Lagally said. “Chicken is very efficient, but I saw a lot of the direct impact of abuse of animals. In Washington State I saw chickens go up and down the highway every morning to my trip to Boeing. As someone who cared about animals, I felt that I needed to do something. We’ve never really been able to control the meat industry in terms of pollution runoff, and we’re barely making inroads on health claims.”

The first product is a processed chicken nugget equivalent which Seattle Food Tech tries to sell to larger food services companies (think something like Aramark). That’s the market that’s most useful given that a significant portion of the chicken consumed by the population comes through food services. There are other advantages to creating a breaded chicken nugget equivalent, such as not having to worry so much about the color change in the same way that raw chicken does when it’s cooked. But the plant-based nugget still has to plump up, get juicy, and feel like a normal piece of processed chicken would feel like if it’s going to compete.

The company also, to that end, has to target municipalities if it’s going to actually get the kinds of operations rolling to start producing those plant-based substitutes. That’s an argument that happens at the level of a local community, and Lagally says that the production facility itself is as much the product as the actual end-nugget that might end up in the hands of someone picking up lunch from an office cafeteria. The nugget is a wheat-based product which is designed to perform like a Tyson chicken nugget.

“We can go to a municipality and say, we have a processing facility that won’t require you to raise taxes, we can offer similar or more jobs [than competitors], we can put out 1.3 million pounds of meat per month, which is huge,” she said. “We’ll be a really good economic booster of the area and be able to use plant-based proteins from local farmers. Our waste is almost nothing other than normal waste water from a facility, and we end up being a much more attractive addition to a small town in Nebraska or New Jersey.”

It’s certainly going to be an interesting space, especially given that a key ingredient for Impossible Foods got the OK from the FDA, which could make it more attractive as a burger patty substitute. So, there will be an interesting race to see which foods companies will end up taking over a key part of the consumption. Companies like Seattle Food Tech will also inevitably run into pushback from the same industries that they are trying to capture market share. But Lagally said that there should be plenty of room for a company like Seattle Food Tech to maneuver its way to success.

“The truth of the matter is most of these issues are decided at the state and local level,” Lagally said. “You can put a lot of money into lobbying in D.C., and money is influence at every level at the government. But when those come down to community choices, those are made at the council level. Farmers understand that they have to be a part of their community. A wheat farmer who processes our wheat into a wheat protein can sell to me for money money than selling it at a really low commodity cost.”

Grubhub announced this morning that it’s agreed to acquire LevelUp for $390 million cash.

Founder and CEO Matt Maloney told me that while previous Grubhub acquisitions like Eat24 were designed to give the company’s delivery business more scale, “This is kind of a different acquisition. It’s a product and strategic positioning acquisition.”

LevelUp is based in Boston, offering a platform to manage digital ordering, payments and loyalty, with customers like KFC, Taco Bell Pret a Manger, Potbelly and Bareburger. Maloney said that buying the company allows Grubhub to deepen its integration with restaurants’ point-of-sale systems. That, in turn, will allow them to handle more deliveries.

At the same time, Maloney said LevelUp can help Grubhub build a restaurant platform that goes beyond delivery, for example by managing their customer interactions across mobile and the web.

“We want to help restaurants actively engage with their diners,” Maloney said. “This is a huge step in that direction.”

Once the regulatory waiting period is over, the entire LevelUp team will be joining Grubhub, with founder and CEO Seth Priebatsch reporting to Maloney — who said that in the short term, he plans to change very little, aside from the POS integrations. Even in the long term, he suggested that LevelUp could continue to operate as its own brand within the larger Grubhub platform.

“They’re doing something really well and we don’t want to screw that up,” he said. “We want to make as little change as possible, until we all understand how we’re better working together.”

The LevelUp platform was launched in 2011, and the company has raised around $108 million in total funding, according to Crunchbase. Investors include Highland Capital, GV, Balderton Capital, Deutsche Telecom Strategic Investments, Continental Advisors, Transmedia Capital and U.S. Boston Capital.

“For the last seven years, we have worked to provide restaurant clients with a complete solution to engage customers, and this agreement is the biggest and most exciting step in achieving that mission,” Priebatsch said in a statement provided by Grubhub. “After close, the entire team will remain in Boston and our office will become Grubhub’s newest center of technology excellence.”

The announcement came as part of Grubhub’s second quarter earnings release, which saw the company grow active diners by 70 percent year-over-year, to 15.6 million, while revenue increased 51 percent, to $240 million.

ClassPass today announced the close of an $85 million Series D financing round led by Temasek, the same firm that led the startup’s Series C financing. L Catterton, a private equity firm that has also invested in the likes of Peloton, Equinox, and Pure Barre, also participated in the round.

As part of the deal, L Catterton’s Michael Farello will join the ClassPass board.

It’s also worth noting that CEO Fritz Lanman confirmed that the share price dropped as part of the $70 million Series C round, but that the valuation didn’t. Both share price and valuation went up during this latest round. That said, Lanman stayed mum on any actual numbers around valuation.

This latest round brings ClassPass’s total funding to $255 million.

ClassPass first launched in 2012 out of TechStars. Back then, it was called Classtivity, and it operated under a very different business model. Users could search for a la carte classes from dance and fitness studios, book an appointment and complete the transaction all from their website.

Turns out, gym memberships exist for a reason. Without a monthly up front investment, most people don’t have the motivation to go workout.

After a number of iterations, ClassPass rebranded and switched up the business model to become the subscription studio fitness plan we have come to know today.

But that didn’t mean the startup was done adapting.

In 2016, ClassPass ditched its unlimited tier and raised prices to produce healthier margins. Before this, some casual ClassPass users were subsidizing the unlimited users who were going to classes four or five times a week. Though it caused a bit of an uproar, and ultimately lost ClassPass around 10 percent of its userbase, the move gave the company much stronger unit economics to allow for further expansion.

Another switch came in the fall of 2017 when ClassPass moved to a credit-based payment system, allowing the company to offer variable pricing to its studio partners to account for peak times and high-quality classes.

It took a hell of a lot of tweaking, but ClassPass CEO Fritz Lanman believes that the company is finally in a place where it can worry first, second, and last about expansion.

“[Founder and Chairman Payal Kadakia] and I are most excited about this round because it validates what we did months ago,” said Lanman. “We went through a huge business model evolution and a number of iterations, but this round was led by the same firm who led our Series C and includes one of the most prominent private equity firms in the studio fitness and consumer space.”

In May, ClassPass announced its intention to launch in nine international cities by the end of this year, with a focus on Southeast Asia. The company already has a strong foothold in the U.S., with operations in Canada, Australia, and a strong and growing market in the UK.

“It feels like we can take over the world,” said founder and Chairman of the board Payal Kadakia. “We’ve seen people compete and replicate our model, but we own our category, and we have the ammunition and the right model to tackle the world. Now, our focus is to make sure ClassPass works everywhere. Once we get the behavior working for customers in other markets, we earn the right to offer new categories.

The first category on the list? Wellness. But first, the company is focused on owning every market where studio fitness is already present.

As far as the funding is concerned, it will be used to continue adding to the team — ClassPass currently has 335 employees, and plans to add over 100 in the coming months — as well as fuel international expansion. The funding will also be used, in part, to start marketing ClassPass Live, a live at-home video workout akin to Peloton’s product. ClassPass Live was first launched in March, but the company has spent the time since then working out the bugs and making small iterations to ensure the service is ready for primetime.

Last quarter, Alphabet (Nasdaq: GOOG) was hit by a $5.1 billion fine by the European Commission. But despite the hit, the company surpassed all market expectations and saw its stock soar to record...

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Recruiting, hiring and retention can be one of the most costly parts of a company’s entire operation, and there’s a class of startups and companies that are increasingly getting funded to try to optimize one or more of those problems all at once — including a new big round for employee education platform Guild Education.

Guild Education is just one of an array of companies looking to capitalize on the opportunity to help employers educate their existing workforce and identify employees who might fill the talent gaps with a little bit of training — as well as having a nice retention perk as well. Guild Education helps employers work with nonprofit universities to provide employees with education across a variety of subject matter or credentials, ranging from high school completion and vocational programs to bachelor’s and master’s degrees. All this is designed to offer companies a way to ensure that employees feel like they have a vested interest in their future, and retain them with that kind of perk.

Guild Education said it has raised a $40 million financing round led by Felicis Ventures, with participation by Salesforce Ventures, Workday Ventures, Rethink Impact & Education, and Silicon Valley Bank. Existing investors Bessemer Venture Partners, Redpoint Ventures, Harrison Metal, and Cowboy Ventures also participated in the round, and Felicis’ Wesley Chan will be joining the company’s board of directors. The company says its programs are currently available to 2.5 million working adults and gives access to classes, programs and degrees at more than 90 universities and learning providers.

“Most of our companies see an ROI on the employee investment within the first year or two,” CEO Rachel Carlson said. “Here’s why: on an incremental basis, our programs simply need to cost less than the cost of losing a high performing employee and hiring and training their replacement. We accomplish that by partnering with affordable, nonprofit universities and focusing with them on dual retention: helping employees succeed at school and at work… Companies with frontline workforces struggle with annual turnover rates well above 50%. So for our companies, a 4-year retention rate is a phenomenal outcome, and they’re thrilled to see that employee move on to their next job after completing a degree.”

If the model sounds somewhat familiar, it’s because there have already been a number of successful companies creating a lot of buzz in the area — and clearly a lot of appetite for a business like Guild’s. Pluralsight, for example, gives companies a way to courses to employees to help them pick up new software engineering skills and went public earlier this year. It isn’t exactly the same model as Guild, but it does indicate that there is a pretty substantial opportunity for tools that help workforces further educate their employees, getting more value out of them and helping them advance in their careers. Given that the hiring and recruiting process can be a time-intensive and expensive one (there are even startups focusing machine learning efforts for recruiting), it might make sense to see if the right person for a job is already within a company. That helps companies get the skills they need and build loyalty with that employee.

While Guild Education is going after the larger companies out there to offer those perks, there’s another one that’s already interesting enough: the wave of contract employees that work with companies like Lyft or Uber, who also might want a similar perk but operate on a different model that isn’t full-time. Carlson said the startup works with companies like Lyft to figure out how to offer those kinds of education benefits to “gig economy” employees as well, though the benefits are traditionally designed for W2 employees since the benefit is non-taxable on both ends.

There will certainly be some competition from online course marketplaces like Udacity or Coursera, which look to offer another way for employees to pick up new skills on their own time and charge a monthly fee for that. But by going through employers to offer that benefit (to be sure, some companies like Lynda.com already do this), Guild Education may be able to streamline the process in such a way that employees get access to already known entities like nonprofit universities in order to get the education they seek.

Sramana Mitra: Interesting. What level of penetration do you have? How many companies are you rating in this mode? Tom Turner: We rate around 120,000 enterprises around the globe. Those ratings are...

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PicsArt, the company behind the photo-editing app of the same name, has hired Tammy Nam as its first chief operating officer.

Nam was most recently the CEO of Viki, the Rakuten-acquired video streaming service, and before that served as a marketing executive at Viki, Scribd and Slide.

PicsArt said Nam will report to founder and CEO Hovhannes Avoyan, and that she will oversee all aspects of the business except for product and engineering.

“PicsArt has grown organically so far, but our next big opportunity is in directing this growth through the right market development, community engagement and revenue channels,” Avoyan said in the announcement. “In addition to her proven operational experience in both consumer advertising and subscription-based businesses, Tammy adds deep bench strength in market, brand and community development — areas that will be critical for us moving forward.”

The company announced last year that it’s reaching 100 million monthly active users. Nam told me she was particularly impressed that it achieved that growth without significant marketing spend.

“I understand what it takes to grow quickly, but also thoughtfully,” she said. “Because of my background, the CEO and the board felt like I would be a great match to [help PicsArt] reach the next 200 million, the next 500 million users.”

Asked what thoughtful growth looks like for PicsArt, Nam said it means not just growing at any cost, but also considering things like revenue and the different communities using the app. She said she’s trying to examine the company’s structure to ensure it can “maximize efficiencies towards these big goals.”

“It will continue to grow organically, but the branding, the user development will definitely evolve,” she added. “There’s a sea of companies that play in our space … How do you stand out? And how do you stay relevant?”

Nam also said that she’ll be looking at PicsArt’s opportunities for international growth. Not that the company has been neglecting the world beyond the United States — China is its fastest-growing market and already one of its top countries for revenue. (The company says it recently became profitable following the launch of its PicsArt Gold subscription.)

Nam suggested that PicsArt can move into new markets without competing with the dominant social media platforms, because it’s “agnostic” in terms of where users publish their edited photos.

“It’s completely lowered the barrier,” she said. “It used to be you had to know Photoshop. Now it’s so easy to create professional-looking photos, images and soon animations, videos, etc. Everyone is a creator.”

SpotAngels, an app that uses crowdsourced data to help drivers find parking and avoid tickets, has raised $2.3 million from a group of investors that includes Google Maps co-founder Lars Rasmussen.

Luc Vincent, the former head of Google Street View and vice president of engineering at Lyft, as well as Y Combinator, Streamlined Ventures and Via ID also invested in the round. 

The startup plans to use the funding to expand to other U.S. cities and improve its free mobile app, including a new “predicted availability” feature that it hopes to launch later this year. The new feature allows drivers to know what the odds are of finding a spot in any given area before heading there.

The existing app works like a network — the more users, the better the intel. Once a user installs the app, it can provide real-time data to the greater SpotAngels community. The app, which uses the car’s Bluetooth connection or phone motion sensors, knows when the user’s vehicle is parking or leaving a spot. 

The app also displays the location of all street parking spots and garages with detailed rules and prices that is kept current through its users. Drivers use it to find free street parking, the cheapest parking meter or garage. 

The startup’s newest “predicted availability” feature, which is expected to launch in San Francisco by the end of year, takes historical parking data from dashcam videos that SpotAngels collects through members of its community.

SpotAngels uses computer vision technology to count parked cars on these videos to determine how occupied streets are at a given time.

The app is available in 20 U.S. cities, including San Francisco and New York City.

Knock Knock, a startup building games for platforms like Facebook Messenger and WeChat, is announcing that it has raised $2 million in seed funding.

The goal isn’t to build interactive chat fiction, but rather fully fledged mobile games that are accessed from messaging apps, while also taking advantages of the opportunities offered by incorporating messaging and chatbots into the game mechanics.

“This is the most frictionless an experience can get,” said CEO Andrew Friday. “There’s no download, it’s hooked up to a fast messaging medium that you’re already using and people can bring their friends into the experience seamlessly.”

Friday was a senior product manager for chat games at Zynga, while his co-founder Andrew N. Green was previously the head of business operations at TinyCo. They plan to release their first game for Facebook Messenger later this year, and then a WeChat title in early 2019.

When I asked if there are any specific genres that will do best on messaging, Friday suggested that there’s actually “an embarrassment of riches.”

“Most great mobile game genres, and game genres in general, are good for the platform,” he said. “It’s just that if you try to just port those designs to the platform, it’s not going to work. If you rethink or reimagine these mechanics, how they would work best, how they would be most fun on the platform, there are so many genres that can work on chat.”

He also suggested that compared to FRVR, another recently funded startup looking to build chat games, Knock Knock is less focused on “hypercasual” games and instead taking “a deeper, more thoughtful approach.” Although thoughtfulness and depth are relative — Friday suggested that Knock Knock could still create the initial versions of its games in 90 days.

The funding was led by Raine Ventures, with participation from London Venture Partners, Ludlow Ventures and Gregory Milken.

“Knock Knock has the potential to usher in the next wave of chat games that will redefine the market,” said Courtney Favreau, a venture capital partner at Raine, in the funding announcement. “The founding team has an impressive track record in the mobile and chat gaming spaces and we’re very excited to help them bring their vision to life.”

PAX Labs is a consumer electronics company in the cannabis space. Their cannabis oil-based vaporizers are changing the way we consume THC and CBD. Jetty Extracts, a cannabis oil producer, takes us through the process of how they make the oil that is consumed in the PAX vaporizers.

Josh Mohrer (pictured above) and William Barnes, two former Uber executives, are working on an investor syndicate to invest in startups led by fellow former Uber employees, Axios reported and TechCrunch has confirmed.

“We believe that people who help build transformative companies will go on to do other awesome things,” Mohrer told TechCrunch about the syndicate’s thesis to invest in Uber alumni. “The idea is that we can really move the needle for companies who are doing things that are Uber-adjacent — things that are in our wheelhouse.”

Mohrer and Barnes have been working on this for the last nine months or so. While a lot of the emphasis is on backing startups led by former Uber employees, that’s not a strict requirement, Mohrer said.

The syndicate, which is made up of around 100 former Uber employees, “started pretty organically,” Mohrer said. So far, about 50 people have taken part in at least one investment. The check sizes have been modest — in the hundreds of thousands of dollars.

The focus of the syndicate is on two-sided marketplaces and transportation startups like Lime and Cargo, which partnered with Uber last week to enable drivers to sell passengers goods during rides. The syndicate’s other investments are in Replicated, Service and Salido.

“In the fall, we’re strongly considering what a traditional VC angle on this would look like,” Mohrer said. Likely, that would be called Moving Capital.

Last May, Mohrer left Uber to join Tusk Ventures as its managing director. Before joining Tusk, Mohrer spent about five years at Uber. While at Tusk, Mohrer led the firm’s Series A and B investments in Lime competitor Bird. Barnes, on the other hand, formerly led Uber’s West Coast operations for almost six years.

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Greg Borchardt of Caerus Ventures was recorded in...

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Entrepreneurs are invited to the 408th FREE online 1Mby1M mentoring roundtable on Thursday, July 26, 2018, at 8 a.m. PDT/11 a.m. EDT/8:30 p.m. India IST. If you are a serious entrepreneur, register...

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Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Tim Wilson of Artiman Ventures was recorded in...

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Freshdesk, now called Freshworks, was originally founded as an affordable alternative to Zendesk. It recently crossed $100 million in annual recurring revenue while Zendesk recently surpassed a $500...

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Cyber security risk is growing exponentially. How do you measure and benchmark such risk? Sramana Mitra: Let’s start by having your introduce yourself as well as BitSight to our audience. Tom Turner:...

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