When someone mentioned to me that Xiaomi was launching its own “robot dog,” my mind immediately went to Sony’s Aibo. And honestly, it would have been difficult to be more wrong. Now that the news has been out for a few days, the company’s heard all of your bad Black Mirror jokes, don’t worry.

And, honestly, the Chinese hardware maker didn’t do itself any favors with the design here. Boston Dynamics has done a lot to imbue its quadrupedal robots with personality, through design language and viral videos of Spot and company busting a move to the Dirty Dancing soundtrack.

With Cyberdog, however, Xiaomi’s design team clearly just leaned in and went full-on Robocop (and the Bladerunner pastiche doesn’t help) . I receive a deluge of Metalhead gifs every time I post something about Boston Dynamics — seriously, I’m using Cyberdog as the lead image on this post, just so you can see what I mean. Go check the replies on Twitter. I’ll wait.

Xiaomi is, of course, far from the first company to release a Spot-like quadrupedal robot. There are a number of companies competing in that space, including ANYmal and Ghost Robotics. For its part, Xiaomi is looking to put a developer spin on the category. Per the Mi blog:

CyberDog is Xiaomi’s first foray into quadruped robotics for the open source community and developers worldwide. Robotics enthusiasts interested in CyberDog can compete or co-create with other like-minded Xiaomi Fans, together propelling the development and potential of quadruped robots.

The robot is powered by Nvidia’s Jetson Xavier NX platform, coupled with 11-built in sensors, including cameras, touch, GPS and more. The company will be release 1,000 of the robots, price at roughly $1,540 — a fraction of the cost of the advanced Spot system. The robot is also a fraction of the size of Boston Dynamics’ quadruped. And while there are superficial similarities the project really couldn’t be more different.

Xiaomi’s entry into robotics is more about building hardware for Nvidia’s platform. It’s a (relatively) inexpensive way for people to get a hang of programming and, perhaps, protoyping robotics. The likely limited functionality — and availability — are pretty clear indications that that the company’s not trying to put a Cyberdog in every home just yet.

A sizable acquisition this week, John Deere announced plans to buy Bear Flag Robotics for $250 million. We’ve been following Bear Flag since it was a member of the YC cohort. The deal seems like a good outcome for both parties. Bear Flag gets a lot of resources from an agricultural giant like John Deere and Deere gets to step another foot into the world of cutting-edge tech with an autonomous tractor startup.

Says co-founder and CEO Igino Cafiero:

One of the biggest challenges farmers face today is the availability of skilled labor to execute time-sensitive operations that impact farming outcomes. Autonomy offers a safe and productive alternative to address that challenge head on. Bear Flag’s mission to increase global food production and reduce the cost of growing food through machine automation is aligned with Deere’s and we’re excited to join the Deere team to bring autonomy to more farms.

Another startup we’ve been following since its early days, Kiwibot is seeing expansion to a significant number of campuses. In spite of campus shutdowns last year, the Berkeley-based company is actually seeing something of a boom due to the pandemic. COO Diego Varela Prada tells TechCrunch:

We have a procedure to disinfect the bots between orders. If you’re a student and you don’t want to mix into large crowds, I think it’s much safer to order food through Kiwibot and have it delivered to the library or your dorm.

We’ve written about Lidar company Aeva a few times over the years, including last November, when it announced plans to go public via SPAC. This week, the company announced a deal with Nikon that takes it beyond its existing automotive applications. The company says there are a slew of potential applications, though the chip is still about four years away from production. Fields include, “consumer electronics, consumer health, industrial robotics, and security.”

A whole bunch of robots are making their way to Florida late next year, courtesy of Amazon. The company announced this week that it has chosen Tallahassee (birthplace of T-Pain and objectively the best Mountain Goats album) as the home of its next fulfillment center. The company plans to add to its massive arm of warehouse robots for the 630,000-square-foot space, along with 1,000 human jobs.

FedEx, meanwhile, has implemented Berkshire Grey robotics at a shipping facility in Queens (the best borough). The systems will identity, pick, sort, collected and containerize primarily small packages like polybags, tubes and padded mailers. The systems are set to roll out to additional locations, including Las Vegas and Columbus, Ohio. Says B.G.,

This technology has been developed and installed as a direct response to the exponential growth of e-commerce, which has accelerated the demand for reliable automated solutions throughout all stages of the supply chain. FedEx Ground believes that continued innovation and automation will improve safety, efficiency, and productivity for its team members as they continue to keep the e-commerce supply chain moving.

Here’s a new company in the food space worth keeping an eye on. Formerly known as Ono Food Co. (then a food truck company), SF-based Hyphen has come out of stealth with the announcement of its Makeline automated meal platform. The company says the system is able to create up to 350 meals an hour, with the aid of a single staff member.

“[W]e really see ourselves like Shopify,” CEO Stephen Klein said in a release, “but instead of enabling merchants to compete with the likes of Amazon, we’re enabling restaurants to compete with the likes of DoorDash as well as other services and ghost kitchens that have decided to compete with their own customers by offering their own food brands.”

The platform is set to start rolling out this winter with plans for 300 locations in New York City, San Francisco, Los Angeles, Seattle and Phoenix.

Pyka appeared out of nowhere in 2019 with an unusual take on electric aircraft: a pilotless crop duster. The success of this first plane led the company to begin developing its next one, the P3: a nine-passenger craft with a totally unique propeller setup aimed at making regional flights cheaper and simpler. It could be flying as soon as next year.

The company also has a new president in Dan Grossman, formerly of Zipcar, Ford and Maven. The transportation sector DNA he brings could help Pyka create the networks and partnerships it needs to get off the ground in local air travel.

The P3 is intended to fly up to 200 nautical miles (about 230 of our lubber miles) at 155 knots, in other words doing the kind of hour-ish hops people opt for instead of a long drive. Currently these routes are served by larger, more expensive aircraft that often fly half-full, making the economics a bit squirrelly. But by Pyka’s estimate its smaller, much less expensive to operate aircraft will allow for more full flights per day between regional hubs.

“It’s mostly places where driving 150 miles is unfeasible,” said founder and CEO Michael Norcia. “The amount of money people spend driving these regional routes, it’s a staggering amount — billions of dollars, and they’re not happy about it.”

Existing small craft flights are prohibitively expensive, but Norcia thinks the P3 will be able to match bulk airfare rates while offering many more flights per day and more destinations.

The aircraft itself looks quite conventional, until you look closely… are those propellers on the fronts and backs of the wings?

“It hasn’t been done before,” said Norcia. And it bears a brief explanation why.

Small planes like this need to change the pitch of their propellers from one configuration during takeoff and climbing to another during cruising, since a different angle is needed for each task. That means the propeller blades have to tilt, which isn’t simple.

“In a normal aircraft, it makes sense to have this quite complex and heavy mechanism on your propeller in order to operate optimally over the whole range,” said Norcia. “Electric propulsion provides some opportunities to just massively simplify the aircraft. So all four of the propellers are fixed-pitch: the ones in front are pitched for takeoff and climb out, and the rear ones are for cruising.”

With a heavy, complex, expensive traditional engine, it would be silly to double the number just so you don’t have to use variable pitch propellers for takeoff. But with light, simple, inexpensive electric engines, it makes perfect sense to do so, even if it looks unusual.

The front and rear propellers are only both active during take-off and climbing, with the front ones folding away afterwards as then the rear ones take over completely for cruise. It mechanically simplifies things — no heavy duty hinges and hydraulics — and in fact putting the prop back there seems to improve efficiency by about 10%, said Norcia. “It’s pretty cool,” he added. (And they’ve applied for a patent.)

(Update: I misunderstood the way the propellers share work and have updated the preceding paragraphs to reflect that.)

The general size and shape of the P3 are familiar, however, and that’s not an accident.

“We’re starting clean sheet,” Norcia said, as the unconventional prop setup attests, “but the approach to this aircraft was talking to customers and regulators and finding out what they want. The answer was resoundingly a nine-passenger plane.”

This is partly because of regulatory requirements: planes with certain burdens and passenger counts fall under a simpler, more permissive regulatory regime, as do airlines that fly with nine or fewer seats. Therefore, the simplest path forward seems to be a nine-passenger plane that makes big progress on efficiency and affordability while not reinventing the wheel.

Further expediting its transition from twinkle in the eye to actual flying machine is starting the P3 out as an unmanned cargo vehicle, essentially a drone for medium-size payloads. There’s a limited market for this (unmanned small aircraft can’t fly ordinary overland cargo routes), but it’s a way to put the P3 in the air legally and get the ball rolling with regulators before aiming for the more important passenger plane certification.

The goal is to have P3 in the air by the end of 2022, which is an extremely aggressive timeline for a brand new aircraft. But Pyka has already shipped two aircraft, the prototype Egret crop dusting craft and the production Pelican version.

“We started the company because we think electric aviation will fundamentally change the way we move for the better,” said Norcia. “It’s unprecedented times for electric aircraft, but most are taking pre-orders for aircraft that may get certified some time in the next decade. We just shipped two Pelicans in the last three months.”

Grossman said that was a major factor in his choice to join the company and help it scale: “They’re shipping right now, and planning on shipping one plane a month next year. They’ve been incredibly efficient with the money they’ve made.”

Of course, launching a new aircraft is an expensive endeavor, and Norcia said that they are in the middle of raising a big round to fund production scaling and to fly a full-sized P3. If all goes well the passenger version could be in the air as soon as 2025.

Just five months after raising a $100 million Series A, TaxBit announced today it has raised $130 million in a Series B round of funding.

The latest financing officially makes the Salt Lake City, Utah-based provider of crypto tax and accounting software a unicorn, with a valuation of $1.33 billion. It also brings the startup’s total raised to $230 million since brothers Austin and Justin Woodward founded the company with their cousin Brandon Woodward in 2017.

IVP and Insight Partners co-led the Series B, which also included participation from Tiger Global, Paradigm, 9Yards Capital, Sapphire Ventures, Madrona Venture Group and Anthony Pompliano. 

TaxBit connects digital asset transactions across exchanges so individuals and enterprises can more accurately file their taxes, manage their portfolios and make tax-optimized trades through its platform, explains CEO and co-founder Austin Woodward. Put simply, its software automates all aspects of cryptocurrency tax compliance. 

Since its early March raise, the company has tripled its headcount to about 100 people, launched an office in Seattle, deployed services with the IRS and inked partnerships with a number of digital asset platforms. For example, it’s connected to exchanges such as Coinbase, BlockFi and Gemini.

The digital economy’s need for tax and accounting software is growing with the industry as regulators require more formal reporting practices. As a result, TaxBit has seen impressive growth. In 2020, it issued over two million tax forms. This year, it is on track to issue over 50 million forms, according to Austin Woodward. 

“The digital asset space experienced a watershed moment during the pandemic, resulting in an accelerated push toward digital payments and alternative stores of value,” Austin Woodward told TechCrunch. “The momentum of adoption across the digital economy is quickly becoming the new normal among the traditional financial institutions and disruptors.”

Indeed, the crypto world can be a very complex one and TaxBit’s products, designed by CPAs and tax attorneys, provide tax filing and accounting services to not just financial institutions but also to individuals and governments so they can “more easily” navigate those digital complexities.  

Those products include Tax Center Suites, which was built for end users and automates back-office accounting functions for finance teams, and TaxBit Consumer, which aims to make filing taxes on digital asset investments “simple and painless, while equipping users with real-time directional insights to optimize their tax liability throughout the year.” 

The startup also works with governmental agencies, including the IRS, to provide data analysis and tax calculation support for taxpayers with digital assets. 

Dozens of financial institutions are integrating TaxBit’s Tax Center Suite technology, the latest being FTX US.

The company plans to use its new capital to scale its tax and accounting offerings across enterprise, consumer and government sectors. TaxBit also plans to double its headcount by year’s end and continue to open new offices in the U.S. and the United Kingdom. Long term, the company has plans for global expansion, with the U.K. “on the horizon and other jurisdictions to quickly follow,” Austin Woodward said.

Its investors are bullish on the company’s offerings, and potential.

Tom Loverro, general partner at IVP, believes TaxBit is in the right place at the right time. He’s taking a seat on the company’s board with the raise.

“Almost every company touching crypto needs tax reporting software. As we all saw with the recent legislation, crypto tax reporting obligations are only getting more rigorous,” he said. 

And crypto-native companies are not the only ones that need tax reporting. Every fintech and financial institution that is rolling out a crypto offering does too, Loverro added.

“And don’t forget about state and federal governments here in the U.S. and abroad,” he said. “Then there is the buy side, which includes both consumers and institutions. It’s a deceptively large and rapidly growing market.”

Loverro went on to say that a common refrain that he hears with regards to anything crypto is “Why can’t [incumbent] just add that as a feature?” 

As a former board observer for Coinbase, the investor can attest that crypto is “incredibly deep and complex.”

“Crypto requires intense dedication and focus. Calculating taxes on buying and selling a single lot of bitcoin may not be that complicated from a tax perspective but what about airdrops, staking and DeFi,” Loverro asked. “Things get pretty complex quickly!”

Nikhil Sachdev, managing partner at Insight Partners, points out that crypto is already a $1.5 trillion market and that is continually expanding as new asset classes begin transacting on blockchains. 

“Our current tax, accounting and ERP software infrastructure isn’t equipped to manage this shift, yet TaxBit has built a platform to help manage tax compliance financial reporting on crypto transactions across industries,” Sachdev said. “TaxBit is the only scaled B2B solution across crypto taxes and already won contracts with blue chip logos.”

Aforza believes its digital twin-focused strategy to enhance workflows gives it a competitive edge in consumer packaged goods.Read More

Talkdesk, a call center automation platform provider, has raised $230 million at a $10 billion post-money valuation.Read More

GitHub is kicking off a broader rollout of its browser-based coding environment Codespaces by extending it to Team and Enterprise plans.Read More

Activision Blizzard's Blizzard Entertainment division confirmed more departures among its leadership on the high-profile Diablo 4 game team.Read More

Winner of VentureBeat's 2021 Innovation in Edge award, SambaNova has shifted focus from AI chip development to machine learning services.Read More

Businesses are aware that bots are a problem. The problem they face now is turning this awareness into action.Read More

Roblox has quietly acqui-hired Bash Video, a social video conferencing platform started by Kongregate cofounder Jim Greer.Read More

As people are becoming increasingly dependent on technology, cyber crimes are growing in strength, disrupting critical infrastructure.Read More

A new report from Workato shows that automation technologies are coming into wide adoption across industries.Read More

Establish your authority and influence as an AI & data thought leader. Share your expertise related to AI & data around low-code, customer experience, the future of work, and more, at the Transform Technology Summits. Attended by executive level technical decision makers, the summits are focused on helping brands explore new data and AI strategies.Read More

Pave, a San Francisco-based startup that helps companies benchmark, plan and communicate compensation to their employees, has raised a $46 million Series B. YC Continuity led the round, which also saw participation from Andreessen Horowitz and Bessemer Venture Partners. The round comes eight months after Pave closed a $16 million Series A round. Today’s financing puts Pave’s valuation at $400 million, up from $75 million one year ago.

Pave launched with an ambitious goal: Can it measure pay across venture-backed tech companies in real time, and help startups move their comp table off of spreadsheets? AngelList and Glassdoor have already tried to build a similar benchmark-worthy data set, but Pave may have a built-in advantage over the companies that tried to fix the same problem before. Y Combinator, which helped incubate Pave and is now leading its most recent round through its later-stage capital vehicle, is one of the largest startup accelerators in the world. Of Pave’s 900 customers to date, one-third come from Y Combinator, and CEO Matthew Schulman only sees that number growing.

“Having YC’s deep support of Pave as the YC-stamped leader in the burgeoning [compensation technology] industry is and will continue to be game changing for our distribution and ability to have ample data coverage in our benchmarking product,” Schulman said. He compared Pave’s distribution trajectory as similar to what fintech company Brex, also backed by Y Combinator Continuity, managed. The founder estimates that 60% of YC companies are active Brex customers.

The reliance on YC could engender platform risk, considering how often the accelerator invests in competitors — often within the same batch. That said, an investment from Y Combinator Continuity, which does Series B rounds and higher, may be a signal that YC has found the comptech player it wants to back. Ali Rowghani, the managing director of the fund and former COO of Twitter, is joining Pave’s board.

Data is everything for the startup, supporting each of Pave’s three main services that it offers to companies. First, Pave uses market and partner data to help companies benchmark salaries for their employees. Second, the startup integrates with HR tools such as Workday, Carta and Greenhouse to give its customers a holistic picture on how employees are currently being compensated, and what makes sense for promotion cycles and salary bumps. And third, the data work culminates into formal offers and compensation packages that employers can then offer to new and old employees.

Pave’s current customers account for data on over 65,000 employee records. The first product serves as a free top of funnel service, while the last two are paid services offered up like any ol’ enterprise software contract.

The world of compensation is rife with inequity, leading to the gender wage gap, and the gaps we can see in the market regarding minority pay disparity.

Schulman views one of Pave’s goals as getting companies to go from doing their D&I analysis from once a year, to doing it consistently. The company plans to build diversity and inclusion-specific dashboards that allow companies to see inequities and access ways or suggestions to improve their breakdown.

“What gets measured, gets improved,” Schulman said. Pave has begun to track its own compensation and diversity metrics, in an effort to be more transparent with its employees and maybe inspire some companies to do the same. About 33% of Pave’s workforce identify as women, compared to an industry average of 28.8%. Half of Pave’s executives, and half of Pave’s board members, identify as women. The company has committed to having 50% of its client-facing roles, which include customer success managers and sales members, “to be female or persons from underrepresented groups.”

While Pave is starting to disclose its own internal benchmarks, transparency around diversity isn’t yet a standard within tech companies — it’s far easier to get valuations than to get specifics around the makeup of historically overlooked individuals within organizations. Pave recently launched the Pave Data Lab, which uses its data set to showcase compensation trends and inequities within how tech workers are paid. That said, Pave doesn’t currently require the companies it works with to upload gender and race information into their benchmarking tool, and didn’t disclose what specific percentage of companies on its platform share that data.

It is hoping noise will make a difference. Pave’s compensation benchmarking data is now free for all companies to use, which will bring more data underneath its umbrella, and more standards to the confusing world of compensation.

Before you hire a marketing consultant who doesn’t understand your products or commit to a CMO who has several years of experience — but none in your sector — consider influencer marketing.

If the phrase evokes images of celebrities hawking hard seltzer, think again: An influencer can be as humble as an enthusiastic Reddit user who manages your Telegram channel.

According to Uber growth marketing manager Jonathan Martinez:

“ … You don’t need to find influencers with millions of followers. Instead, lean toward microinfluencers for testing, which will bring cost efficiency and the ability to sponsor a diverse range of people.”

If your startup has a clear brand pitch, “an enticing offer” and “clear next steps,” you’re ready to reach out to influencers, he says.

In a guest post, Martinez explains how to structure offers that will maximize conversions and keep your representatives motivated to promote your products and services.

Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.

This morning, we published an interview with growth expert Julian Shapiro, a founder and angel investor who also advises startups on the best way to present themselves.

Marketing is data-driven, but good storytelling is an art, says Shapiro.

To connect with consumers on an emotional level, “you need a mix of goodwill, what-we-stand-for ideology, social prestige and customer delight — among other affinity-building ingredients.”

Thanks very much for reading Extra Crunch this week!

Walter Thompson

Senior Editor, TechCrunch

@yourprotagonist

Everyone wants to fund the next Coinbase

“In celebration of Coinbase’s earnings report today, investors poured a mountain of cash into one of the company’s global competitors,” Alex Wilhelm writes in The Exchange.

Rolling up his sleeves, he dug into numbers from Coinbase, FalconX and FTX to give readers some perspective on the state of cryptocurrency exchanges.

How to hire and structure a growth team

Companies that have reached $5 million to $10 million in annual revenue are more likely to assemble growth teams; it’s a smart investment for any startup that’s achieved product-market fit.

It can also be potentially disruptive: Early marketing and product managers may feel sidelined by new cross-functional teams that suddenly take a leadership role.

In a detailed walkthrough, senior director of growth at OpenView Sam Richard explains the core players needed to build a growth team and how to integrate them into the organization smoothly, and shares some useful experiments to run.

“Don’t expect a single hire to scratch the growth itch for you,” Richard warns.

“A brilliant hire is going to come up with ideas, but will absolutely need a team to support them, turn them into experiments and then make them a reality.”

Indiegogo’s CEO on how crowdfunding navigated the pandemic

In an interview with Brian Heater, Indiegogo CEO Andy Yang spoke about how the pandemic has impacted the crowdfunding platform, the challenges of stepping into the role after the previous CEO departed, and how the company reached profitability.

The company wasn’t profitable when you joined?

We weren’t profitable. I joined and then we cut to profitability, or at least kind of a neutral state, and with any kind of change in leadership, some tenured folks opted out, and we basically became a new team overnight to kind of re-found the company, and we’ve been slowly adding people over the last couple years, but always with that eye on profitability and controlling our own destiny.

Kickstarter’s CEO on the future of crowdfunding

Last week, Kickstarter announced that people have backed more than 200,000 projects with $6 billion in pledges since the company launched in 2009. Just 15 months ago, it crossed the $5 billion threshold.

Brian Heater spoke to CEO Aziz Hasan, who took over in 2019, about last year’s substantial of layoffs, the pandemic’s long-term impact on crowdfunding, and how he’s working to build a more resilient company:

I think for us some of the most important things are to really just understand how we’re operating the business, making sure that we are sufficient in the buffer that we have for the business to make sure that we’re operating in a way that we can feel confident that the team is going to have some stability, that they’re going to have this resilience.

Craft your pitch deck around ‘that one thing that can really hook an investor’

We frequently run articles with advice for founders who are working on pitch decks. It’s a fundamental step in every startup’s journey, and there are myriad ways to approach the task.

Michelle Davey of telehealth staffing and services company Wheel and Jordan Nof of Tusk Venture Partners appeared on Extra Crunch Live recently to analyze Wheel’s Series A pitch.

Nof said entrepreneurs should candidly explain to potential investors what they’ll need to believe to back their startup.

” … It takes a lot of guesswork out of the equation for the investor and it reorients them to focus on the right problem set that you’re solving,” he said.

“You get this one shot to kind of influence what they think they need to believe to get an investment here … if you don’t do that … we could get pretty off base.”

Online retailers: Stop trying to beat Amazon

Going up against global e-commerce behemoth Amazon might seem futile, but smaller players can leverage value adds that give them a leg up when it comes to ensuring a loyal customer base, says Kenny Small, vice president SAP and Enterprise at Qualitest Group.

“The reality is that Amazon’s true unique selling proposition is its distribution network,” he writes in a guest post. “Online retailers will not be able to compete on this point because Amazon’s distribution network is so fast.

“Instead, it’s important to focus on areas where they can excel — without having to become a third-party seller on Amazon’s platform.”

The China tech crackdown continues

Edtech and fintech have been in the Chinese Communist Party crosshairs in recent weeks — now, chat apps and gaming are among the targets.

Beijing filed a civil suit against Tencent over claims that its WeChat Youth Mode flouts laws protecting minors, and state media criticized the gaming industry as the digital equivalent of passing out drugs to kids, Alex Wilhelm writes in The Exchange.

He writes that the “news appears to indicate that we should expect more of the same as we’ve seen in recent months from the Chinese government: More complaints about the impact of ‘excessive’ capital in its industries, more tumbling share prices and more held IPOs.”

5 ways AI can help mitigate the global shipping crisis

In an increasingly on-demand world, shipping delays and disruptions are a major roadblock to customer happiness.

AI can help, says Ahmer Inam, chief artificial intelligence officer at Pactera EDGE, who offers five strategies for using AI that can help startups understand supply chain disruptions and prepare for a Plan B.

“While AI won’t protect startups, manufacturers and retailers from these types of disruptions in the future, it can help them sense, anticipate, reroute and respond to them more effectively.”

As a startup founder, there will be three scenarios in which you’ll need to understand how to properly do a quality of earnings (QofE) if you want to maximize value.

The first scenario will be when you decide to raise a Series A and subsequent VC rounds, followed by when you do a strategic acquisition, and lastly, when you sell your company.

This post is a framework for how to think and organize your QofE and go through the most common items that you’ll want to keep top of mind for every M&A and private equity transaction you may be part of.

Why perform a QofE?

The goal of a QofE is to adjust the reported EBITDA to calculate a restated EBITDA that best reflects the current state of the company on an ongoing basis. It also presents a historical adjusted EBITDA that is comparable throughout the last two or three years.

QofE can have a significant impact on a company valuation for three main reasons:

The adjusted EBITDA will be used by a buyer/investor as the basis for valuation (for companies valued based on an EBITDA multiple).The adjusted revenue will be used to recalculate the effective growth rate.The adjusted revenue and EBITDA will form the basis of forecasts.

With that in mind, every entrepreneur must understand how to properly form a view of what is the proper adjusted EBITDA and adjusted revenue of your company. It is common for founders in an M&A process to be unfamiliar with the notion of QofE and leave value on the table.

This breakdown aims to ensure that you won’t be that founder and that you’ll be armed to negotiate your company valuation on equal ground with your investors. If you are in the seller’s shoes, you will get the advantage of understanding how an experienced investor or buyer thinks. If you’re in the buyer’s shoes, you’ll benefit from understanding and valuing your acquisitions better.

How is a QofE professionally performed?

When performed by a professional transaction service advisory team, the quality of earnings is a result of a thorough review of all the documents generally available in a data room. These include, but are not limited to: Legal documentation, financial statements (P&L, balance sheet, cash flow), audit reports, management presentation and contracts.

When doing a QofE analysis, it’s key to consistently ask yourself: “Can or should this information translate into an adjustment of revenue or EBITDA, net working capital (NWC) or net debt?”

Why did we include NWC and net debt? That is because they often have an indirect impact on adjusted EBITDA. Think of an adjustment to the historical level of inventory. Less inventory likely means fewer storage costs. So if you adjust historical inventory, you’ll want to also impact your adjusted EBITDA.

On top of reviewing all the aforementioned documents, your QofE analysis will heavily rely on interviewing management. No matter how long you look at the financials, if you can’t have management confirm information or explain trends, you won’t be able to draw proper conclusions and understand the numbers.

Principles for efficiently building your QofE

Automatically link everything you read and hear to potential QofE adjustments. This has to become second nature during the engagement.Always think about all the ways an event or item that qualifies for an adjustment impacts the financial statements overall. For instance, if the event impacted revenue, did it impact costs in some way as well?Make sure that the cost you are adjusting was not already offset by another accounting entry (i.e., had no impact on EBITDA).Make sure that the cost you adjust for was classified above EBITDA in the first place.Make sure that you can quantify each adjustment in the most objective and rational way. This is sometimes not possible and you may have to come up with a range.

Traditional MBA programs can be costly, lengthy and often lack the application of real-world skills. Meanwhile, big global brands and companies who need product managers to grow their businesses can’t sit around waiting for people to graduate. And the edtech space hasn’t traditionally catered to this sector.

This is perhaps why Product School says it has secured $25 million in growth equity investment from growth fund Leeds Illuminate (subject to regulatory approval) to accelerate its product and partnerships with client companies.

The growth funding for the company comes after bootstrapping since 2014, in large part because product managers (PMs) are no longer needed just inside tech companies but have become sought after across almost virtually all industries.

Product School provides certificates for individuals as well as team training, and says it has experienced an upwelling of business since COVID switched so many companies into digital ones. It also now counts Google, Facebook, Netflix, Airbnb, PayPal, Uber and Amazon amongst its customers.

“Product managers have an outsized role in driving digital transformation and innovation across all sectors,” said Susan Cates, managing partner of Leeds Illuminate. “Having built the largest community of PMs in the world validates Product School’s certification as the industry standard for the market and positions the company at the forefront of upskilling top-notch talent for global organizations.”

Carlos Gonzalez de Villaumbrosia, CEO and founder of Product School, who started the company after moving from Spain, said: “There has never been a better time in history to build digital products and Product School is excited to unlock value for product teams across the globe to help define the future. Our company was founded on the basis that traditional degrees and MBA programs simply don’t equip PMs with the real-world skills they require on the job.”

Product School has also produced the The Product Book, The Proddy Awards and ProductCon.

Its main competitor is MindTheProduct, a community and training platform, which has also boostrapped.

I worked at Google for six years. Internally, you have no choice — you must use Kubernetes if you are deploying microservices and containers (it’s actually not called Kubernetes inside of Google; it’s called Borg). But what was once solely an internal project at Google has since been open-sourced and has become one of the most talked about technologies in software development and operations.

For good reason. One person with a laptop can now accomplish what used to take a large team of engineers. At times, Kubernetes can feel like a superpower, but with all of the benefits of scalability and agility comes immense complexity. The truth is, very few software developers truly understand how Kubernetes works under the hood.

I like to use the analogy of a watch. From the user’s perspective, it’s very straightforward until it breaks. To actually fix a broken watch requires expertise most people simply do not have — and I promise you, Kubernetes is much more complex than your watch.

How are most teams solving this problem? The truth is, many of them aren’t. They often adopt Kubernetes as part of their digital transformation only to find out it’s much more complex than they expected. Then they have to hire more engineers and experts to manage it, which in a way defeats its purpose.

All of this means there is a great opportunity for DevOps startups to come in and address the different pain points within the Kubernetes ecosystem. This technology isn’t going anywhere, so any platform or tooling that helps make it more secure, simple to use and easy to troubleshoot will be well appreciated by the software development community.

In that sense, there’s never been a better time for VCs to invest in this ecosystem. It’s my belief that Kubernetes is becoming the new Linux: 96.4% of the top million web servers’ operating systems are Linux. Similarly, Kubernetes is trending to become the de facto operating system for modern, cloud-native applications. It is already the most popular open-source project within the Cloud Native Computing Foundation (CNCF), with 91% of respondents using it — a steady increase from 78% in 2019 and 58% in 2018.

While the technology is proven and adoption is skyrocketing, there are still some fundamental challenges that will undoubtedly be solved by third-party solutions. Let’s go deeper and look at five reasons why we’ll see a surge of startups in this space.

 

Containers are the go-to method for building modern apps

Docker revolutionized how developers build and ship applications. Container technology has made it easier to move applications and workloads between clouds. It also provides as much resource isolation as a traditional hypervisor, but with considerable opportunities to improve agility, efficiency and speed.

Reducing global greenhouse gas emissions is an important goal, but another challenge awaits: lowering the levels of CO2 and other substances already in the atmosphere. One promising approach turns the gas into an ordinary mineral through entirely natural processes; 44.01 hopes to perform this process at scale using vast deposits of precursor materials and a $5 million seed round to get the ball rolling.

The process of mineralizing CO2 is well known among geologists and climate scientists. A naturally occurring stone called peridotite reacts with the gas and water to produce calcite, another common and harmless mineral. In fact this has occurred at enormous scales throughout history, as witnessed by large streaks of calcite piercing peridotite deposits.

Peridotite is normally found miles below sea level, but on the easternmost tip of the Arabian peninsula, specifically the northern coast of Oman, tectonic action has raised hundreds of square miles of the stuff to the surface.

Talal Hasan was working in Oman’s sovereign investment arm when he read about the country’s coast having the largest “dead zone” in the world, a major contributor to which was CO2 emissions being absorbed by the sea and gathering there. Hasan, born into a family of environmentalists, looked into it and found that, amazingly, the problem and the solution were literally right next to each other: the country’s mountains of peridotite, which theoretically could hold billions of tons of CO2.

Around that time, in fact, The New York Times ran a photo essay about Oman’s potential miracle mineral, highlighting the research of Peter Kelemen and Juerg Matter into its potential. As the Times’ Henry Fountain wrote at the time:

If this natural process, called carbon mineralization, could be harnessed, accelerated and applied inexpensively on a huge scale — admittedly some very big “ifs” — it could help fight climate change.

That’s broadly speaking the plan proposed by Hasan and, actually, both Kelemen and Matter, who make up the startup’s “scientific committee.” 44.01 (the molecular weight of carbon dioxide, if you were wondering) aims to accomplish mineralization economically and safely with a few novel ideas.

First is the basic process of accelerating the natural reaction of the materials. It normally occurs over years as CO2 and water vapor interact with the rock — no energy needs to be applied to make the change, since the reaction actually results in a lower energy state.

“We’re speeding it up by injecting a higher CO2 content than you would get in the atmosphere,” said Hasan. “We have to drill an engineered borehole that’s targeted for mineralization and injection.”

The holes would maximize surface area, and highly carbonated water would be pumped in cyclically until the drilled peridotite is saturated. Importantly, there’s no catalyst or toxic additive, it’s just fizzy water, and if some were to leak or escape, it’s just a puff of CO2, like what you get when you open a bottle of soda.

Second is achieving this without negating the entire endeavor by having giant trucks and heavy machinery pumping out new CO2 as fast as they can pump in the old stuff. To that end Hasan said the company is working hard at the logistics side to create a biodiesel-based supply line (with Wakud) to truck in the raw material and power the machines at night, while solar would offset that fuel cost at night.

It sounds like a lot to build up, but Hasan points out that a lot of this is already done by the oil industry, which as you might guess is fairly ubiquitous in the region. “It’s similar to how they drill and explore, so there’s a lot of existing infrastructure for this,” he said, “but rather than pulling the hydrocarbon out, we’re pumping it back in.” Other mineralization efforts have broken ground on the concept, so to speak, such as a basalt-injection scheme up in Iceland, so it isn’t without precedent.

Third is sourcing the CO2 itself. The atmosphere is full of it, sure, but it’s not trivial to capture and compress enough to mineralize at industrial scales. So 44.01 is partnering with Climeworks and other carbon capture companies to provide an end point for their CO2 sequestration efforts.

Plenty of companies are working on direct capture of emissions, be they at the point of emission or elsewhere, but once they have a couple million tons of CO2, it’s not obvious what to do next. “We want to facilitate carbon capture companies, so we’re building the CO2 sinks here and operating a plug and play model. They come to our site, plug in, and using power on site, we can start taking it,” said Hasan.

How it would be paid for is a bit of an open question in the exact particulars, but what’s clear is a global corporate appetite for carbon offsetting. There’s a large voluntary market for carbon credits beyond the traditional and rather outdated carbon credits. 44.01 can sell large quantities of verified carbon removal, which is a step up from temporary sequestration or capture — though the financial instruments to do so are still being worked out. (DroneSeed is another company offering a service beyond offsets that hopes to take advantage of a new generation of emissions futures and other systems. It’s an evolving and highly complex overlapping area of international regulations, taxes and corporate policy.)

For now, however, the goal is simply to prove that the system works as expected at the scales hoped for. The seed money is nowhere near what would be needed to build the operation necessary, just a step in that direction to get the permits, studies and equipment necessary to properly perform demonstrations.

“We tried to get like-minded investors on board, people genuinely doing this for climate change,” said Hasan. “It makes things a lot easier on us when we’re measured on impact rather than financials.” (No doubt all startups hope for such understanding backers.)

Apollo Projects, a early-stage investment fund from Max and Sam Altman, led the round, and Breakthrough Energy Ventures participated. (Not listed in the press release but important to note, Hasan said, were small investments from families in Oman and environmental organizations in Europe.)

Oman may be the starting point, but Hasan hinted that another location would host the first commercial operations. While he declined to be specific, one glance at a map shows that the peridotite deposits spill over the northern border of Oman and into the eastern tip of the UAE, which no doubt is also interested in this budding industry and, of course, has more than enough money to finance it. We’ll know more once 44.01 completes its pilot work.

From vaccine distribution plans to fire trackers to bar crawls for your best friend’s birthday, maps help people visualize space and express impact. And Felt, a new Oakland-based startup co-founded by Sam Hashemi and Can Duruk, is on a mission to make the medium more mainstream.

Felt is a collaborative software company that wants to make it easier for people to build maps on the internet. It announced today that it has raised $4.5 million led by Bain Capital Ventures, with participation from Designer Fund, Allison Pickens, Akshay Kothari (COO of Notion), Dylan Field (CEO of Figma) John Lily (former CEO of Firefox), Julia and Kevin Hartz, and Keval Desai.

The millions will be used to help Felt grow its fully distributed six-person team to bring on more front-end, back-end and product engineers, as well as product and brand designers. Along with the financing, the company announced it is launching a private beta to better understand what early adopters it attracts, and how those users engage with the platform.

Felt allows users to build a map with data sets integrated into it. A user can open a map of California, for example, and then turn to Felt’s data library to add information about bits like wildfires and smoke patterns. The map’s power grows as more integrations are used to build out its background; using the prior anecdote, for example, the wildfire map integrated with census data could allow decision makers to see how many businesses could be impacted by incoming smoke.

Over time, Felt users will be able to see other user-generated maps and team projects on the interface — which they can then copy to add their own flair, or leave comments to support the community.

While consumers will eventually be able to access a free tier, the big test for Felt is if it can find a customer base that is willing to pay, and consistently use mapping software in meaningful ways. The company is in a unique spot. It’s not a GPS service, so it won’t serve the consumer who only turns to maps for directions. Instead, its build-a-map service is better suited for companies that already use it in their day-to-day.

Felt is meant to be a continuation of the collaborative software movement underscored by everyday tools like Google Docs and top companies like Notion and Figma, as well as a sequel to Hashemi’s previous company, Remix. Recently bought by Via for $100 million, Remix is a city transportation planning startup born out of Code for America Hackathon. As Hashemi spent nearly seven years building Remix, he was introduced to the inadequacies of map-making, namely that there are many use cases for maps but not many people who have the skill set to create a professional product. He hopes Felt will take mapping beyond city planning and into a variety of industries, from education to science to media.

“We really want to be much more aspirational in what we’re trying to accomplish and go much more broader [so it] results in a totally different kind of company,” Hashemi said. Perhaps its biggest competitor is ESRI’s GIS, a mapping software tool founded in 1969 and still used by hundreds of thousands of companies today.

Climate change could be a catalyst that brings more customers into the collaborative mapping space. Duruk, who built products at Uber and VGS, spoke about the importance of crisis response after last year’s wildfires and the resulting eerie orange sky in the Bay Area.

“Everyone in the Bay Area would wake up, go to the air quality map, weather map and the fire map,” Duruk said. “Everyone was trying to do something with maps, but only a few companies in the world had the resources to build something….it was broken.” Felt wants to go broad in its integrations, but did confirm that climate data will be a priority.

The challenge with building a powerful, creative tool is that there is a chance for people to misuse maps for abuse or targeting, Duruk said. Felt is thinking about ways to build in accountability and systematic processes to limit bad actors from using mapping information in the wrong way.

In the meantime, though, the early-stage startup is focusing on expression as a key way to understand its own product’s bounds. With millions more, Felt is aiming at increasing the capability of people by growing the map-ability of the world.