San Francisco-based startup Orbit Fab wants to be the go-to source for orbital refueling, and now it has raised over $10 million in its quest to get there. The money will go toward funding a refueling trial that’s due to launch as early as the end of 2022, in which the company plans to send to space two refueling shuttles that will repeatedly perform a three-step dock, transfer fuel and undock process.

The round was led by Asymmetry Ventures, with participation from existing investor SpaceFund and new investors Marubeni Ventures and Audacious Venture Partners. Notably, both Northrop Grumman Corporation and Lockheed Martin Ventures also participated, the first time the two contractor-rivals have done an investment together, Orbit Fab co-founder Jeremy Schiel told TechCrunch.

“We are the tide that raises all boats,” Schiel said. “We don’t give either a competitive edge, but we can as a whole have better alternatives for sustainability in space.”

“Getting [the two primes] to play nice with each other,” as he put it, is key for the company, which wants to position itself as the favored source for space refueling. Orbit Fab, which was a finalist in our TechCrunch Disrupt Battlefield in 2019, has developed a refueling valve it calls RAFTI (Rapid Attachable Fluid Transfer Interface) — but this component must be installed before spacecraft leave Earth, which means that much of the buy-in from major customers like the aerospace contractors must occur before their satellites even enter orbit.

The idea is that spacecraft outfitted with RAFTI would be able to dock with one of Orbit Fab’s refueling shuttles, which would be positioned in low Earth orbit, geostationary orbit and eventually even cis-lunar space. By 2025, Schiel said he hopes every spacecraft will have a RAFTI on it. In the long-term, the company is thinking even bigger: producing fuel in-space, using material mined from asteroids.

“We want to be the Dow Chemical of space,” Schiel said. “We want to be the first customers for lunar miners, asteroid miners, buying up their material that they mined off those bodies, and then convert that to usable propellants that we can produce in-orbit.”

Orbit Fab says orbital refueling will be the bedrock of the burgeoning new space economy, in which goods and spacecraft will need to be transferred from one orbit to another (a maneuver that’s extremely fuel-intensive), or to build out supply chains to return resources to Earth.

“We want to be that supply chain of propellant,” Schiel added.

SaaS, PaaS – and now AIaaS: Entrepreneurial, forward-thinking companies will attempt to provide customers of all types with artificial intelligence-powered plug-and-play solutions for myriad business problems.

Industries of all types are embracing off-the-shelf AI solutions. According to industry experts, global AI software revenue — most of it online artificial intelligence as a service software (AIaaS) — is set to grow by an astounding annual rate of 34.9%, with the market reaching over $100 billion by 2025. It sounds like a great idea, but there is a caveat — “one-size-fits-all” syndrome.

Companies seeking to use AI as a differentiating technology in order to gain business advantages — and not merely doing it because that’s what everyone else is doing — require planning and strategy, and that almost always means a customized solution.

In the words of Sepp Hochreiter (inventor of LSTM, one of the world’s most famous and successful AI algorithms), “the ideal combination for the best time to market and lowest risk for your AI projects is to slowly build a team and use external proven experts as well. No one can hire the best talent quickly, and even worse, you cannot even judge the quality during hiring but will only find out years later.”

That’s a far cry from what most online off-the-shelf AI services offer today. The artificial intelligence technology offered by AIaaS comes in two flavors — and the predominant one is a very basic AI system that claims to provide a “one-size-fits-all” solution for all businesses. Modules offered by AI service providers are meant to be applied, as-is, to anything from organizing a stockroom to optimizing a customer database to preventing anomalies in production of a multitude of products.

There are several companies that claim to provide AIaaS for automated industrial production. Most of the successful data presented by these providers is based on individual case studies, with problems involving limited data sets and limited, generic objectives. But generic AI solutions are going to produce generic results.

For example, the process to train algorithms to detect wear and tear would be different for factories that produce different products; after all, a shoe is not a smartphone is not a bicycle. Thus, for “real” AI work — where intelligent modules actually managed and changed production in response to environmental and other factors — the companies developed customized solutions for their clients.

Many customers who were “burned” by bad experience with AIaaS will be more hesitant to try it again, feeling it is a waste of time. And use cases that did require heavier AI processing did not yield the results expected — or promised. Some have even accused the cloud companies of deliberately misleading customers — giving them the impression that off-the-shelf AI is a viable solution, when they know very well that it isn’t. And if a technology doesn’t work enough times, chances are that those who could potentially benefit from real AI solutions will give up before they even start.

The objective is to standardize a solution that performs well almost immediately and does not require extensive know-how. AIaaS’ success so far has been in enabling researchers to run complex experiments without requiring the services of an entire IT team to figure out how to manage the necessary infrastructure.

In the future, AIaaS will hopefully enable individuals who are not AI experts to utilize the system to get the desired results. That said, online automated AI services even at their current levels can greatly benefit industrial production — if it is done right.

AI properly done could provide great benefits for industry. Instead of giving up on AI, companies should do a deep dive on the AI services they are thinking of utilizing. Does the solution provide for customization? What kind of support does the service provide? How is the algorithm trained to handle data specific to your use case? These are the questions that companies need to ask when shopping around for AI services. Providers that can furnish substantial answers — and back up their claims with real data on success rates — are the ones companies should work with.

Like all new developments that enhance business activity, AI applications require a high level of expertise. The engineers who work for the big cloud companies indeed have that expertise — which means that they could be providing much more value for customers by helping them develop customized solutions. Whether that can be done “as a service” needs to be examined — but the system in place right now is not the answer.

The “health” of a startup’s growth can be a strong predictor of how large and valuable it can become. Our generation’s most valuable startups have all sustained a high rate of user/revenue growth over an extended period of time. As such, founders, employees and investors are all trying to figure out if their startup can achieve sustainable growth to create a large and enduring business over time.

Simply looking at top-line growth tells you relatively little. Two startups that are currently growing users or revenue 300% every year can each have different long-term prospects. It’s almost like looking at two people of the same age, height and weight, and projecting the same quality of life and longevity for both — there are many more factors that can help you make better predictions. Startups are similar, and it’s important to dig deeper into the health of a startup’s early growth and work to build the right foundation from an early stage.

Prior to becoming a VC at Defy, I founded two companies and was Eventbrite’s VP of growth for over six years from startup through IPO. Working across all stages from founding through to public company and advising many other startups along the way, I’ve landed on five critical factors for healthy and sustained growth that can be the difference between a startup failing, getting to a modest exit or building a valuable and enduring billion-dollar company.

Healthy engagement and retention are key

At its core, any successful product or service delivers more value to the user/customer than it costs to use (money or time). To see if your product is delivering true value, ask if it is achieving strong user engagement and customer retention. My friend and growth guru Casey Winters captures this well: “Product-market fit is retention that allows for sustained growth.”

Consumer startups can evaluate this via through cohort-based retention analysis of how frequently customers use the service, and how long they are retained for. SaaS businesses should be talking with customers often to gauge their happiness while also looking at logo retention as well as gross and net revenue retention — ideally, the business should show early signs of being a net-negative churn business, wherein revenue from existing customers actually grows over time, even after accounting for churned customers.

Many people incorrectly think “startup growth = customer acquisition.” In reality, retention is the most fundamental aspect underlying sustainable growth.

Customer obsession creates “pull” from the market

Customer obsession, plus organic pull from the market, are indicators of early product-market fit and signals of future growth potential.

Here are a couple ways to measure this:

See if a healthy percentage of the business is growing without paid spend, generally through word of mouth or some other form of virality. If your business is seeing more than 50% organic growth at a fast rate (200% to 300%+ year over year), you’re solving people’s needs well enough that they’re now sharing with others and creating a positive viral effect.

“In today’s cash-rich environment, options are more valuable than cash,” says Allen Miller, a principal at Oak HC/FT. “In turn, managing your option pool may be the most effective action you can take to ensure you can recruit and retain talent.”

In an article squarely aimed at early-stage founders, Miller shares best practices for protecting your option pool, lists the mistakes many founders make and offers multiple tips for course-correcting “if you made mistakes early on.”

As we’re just returning from the Labor Day holiday, today’s newsletter is quite brief. We have much more planned for this week, so thanks very much for reading.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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To commercialize, voice tech must first solve its ‘cocktail party problem’

Voice and speech recognition is expected to be a $26.8 billion global market by 2025, but there’s still a long way to go before voice can be fully commercialized.

Developers are deploying natural language processing and conversational AI to overcome current limitations, but “solving these problems requires voice tech to meet the human standard for voice and match the complexities of the human auditory system.”

How engaged are your employees?

According to a recent survey, more than 70% of workers are actively hunting for a new job or are giving the matter serious consideration.

In a startup environment, employee development takes a back seat to priorities like scaling growth. As a result, few managers have any experience or interest in helping employees acquire new skills or advance their careers.

Don’t wait to be blindsided: Put an action plan in place to assess employee engagement. Remember, seven out of the next 10 people you see on a video call might be polishing their resumes.

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The new funding will be used to develop Homage’s technology, continue integrating with aged and disability care payer and provider infrastructure and speed-up its regional expansion through partnerships with hospitals and care providers. Homage currently operates in Singapore, Malaysia and Australia.

The Singapore-based company’s services include home visits from caregivers, nurses, therapists and doctors; telemedicine; and services for chronic illnesses. One of the reasons Homage’s platform is able to scale up is its matching engine, which helps clients, like older adults and people living with chronic conditions, find providers who are best suited to their needs (the final matches are made by Homage’s team).

The startup says the round was oversubscribed and one of the largest fundings raised by an on-demand care platform in Southeast Asia and Oceania so far. It brings Homage’s total raised to more than $45 million.

As part of Series C, Sheares Healthcare Group chief corporate development officer Khoo Ee Ping will join Homage’s board of directors.

Homage now has a regional network of more than 6,000 pre-screened and trained care professionals. It claims that its business outside of Singapore has grown more than 600% year-over-year in 2021, and it has more than tripled revenue over the past year.

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Quantum Machines, an Israeli startup that is building the classical hardware and software infrastructure to help run quantum machines, announced a $50 million Series B investment today.

Today’s round was led by Red Dot Capital Partners with help from Exor, Claridge Israel, Samsung NEXT, Valor Equity Partners, Atreides Management, LP, as well as TLV Partners, Battery Ventures, 2i Ventures and other existing investors. The company has now raised approximately $83 million, according to Crunchbase data.

While quantum computing in general is in its early days, Quantum Machines has developed a nice niche by building a hardware and software system, what they call The Quantum Orchestration Platform, that helps run the burgeoning quantum machines, leaving it plenty of room to grow as the industry develops.

Certainly Quantum Machines co-founder and CEO Itamar Sivan, who has been working in quantum his entire career, sees the vast potential of this technology. “Quantum computers have the promise of potentially speeding up very substantially computations that are impossible to complete in reasonable time with classical computers, and this is at the highest level the interest in the field right now. Our vision specifically at Quantum Machines is to make quantum computers ubiquitous and disruptive across all industries,” he said.

To achieve that, the company has created a system that relies on classical computers to power quantum computers as they develop. While the company has designed its own silicon for this purpose, it is important to note that it is not building quantum chips. As Sivan explains, the classical computer has a software and hardware layer, but quantum machines have three layers: “The quantum hardware, which is the heart, and on top of that you have classical hardware […] and then on top of that you have software,” he said.

“We focus on the two latter layers. So classical hardware and the software that drives it. Now at the heart of our hardware is in fact a classical processor. So this is I think one of the most interesting parts of the quantum stack,” he explained.

He says that this interaction between classical computing and quantum computing is one that is fundamental to the technology, and it’s a mix that will last well into the future, possibly forever. What Quantum Machines is building is essentially the classical cloud infrastructure required to run quantum computers.

So far the approach has been working quite well, as Sivan reports that governments, researchers, universities and the hyper scaler operators (which could include companies like Amazon, Netflix and Google, although the company has not said they are customers) are all interested in QM’s technology. While it isn’t discussing specific metrics, the company has customers in 15 countries at the moment and is working with some large entities that it couldn’t name.

The money from this round helps validate what the company is doing, enabling it to continue building out the solution, while also investing heavily in research and development, which is essential as the industry is still in early development and much will change over time.

They have been able to create this solution to this point with just 60 employees, and with the new funding should be able to build out the team in a substantial way in the coming years. He says that when it comes to diversity, he comes from an academic background where this is the norm and he has carried this forth to his company as he hires new people. What’s more, the pandemic has allowed him to hire from anywhere and he says that the company has taken advantage of this opportunity.

“First of all, we’re not hiring just in Israel, we’re hiring globally, and we’re not limited to hiring in specific geographies. We have people [from a number of countries],” he said. He adds, “Diversity for me personally means involving as many people as possible in hiring processes. That is the only way to ensure that there is diversity.”

Even throughout the pandemic, the hardware team has been meeting in person in the office with necessary precautions when it has been allowed, but most employees have continued to work from home, and that is an approach he will continue to take even when it’s safe to return to the office on a regular basis.

“Of course, work in a post-COVID era will include a substantial amount of remote work. […] So even in [our] headquarters, we anticipate allowing people to work remotely [if they wish].

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