On GB Decides 198, the crew talks about E3 2021 news and leaks, Switch Pro news and leaks, and announcements for multiple big games.Read More

Enteprises ramped up deployment plans for intelligent technologies during the pandemic, and the AI trend will continue post-pandemic.Read More

This may seem like a great time to launch a SaaS startup, but the landscape is crowded with well-designed applications that promise “blazingly fast and delightfully simple” experiences, according to seed-stage investor John Chen of Fika Ventures.

Most SaaS startups will fail, but not because of a sour marketing campaign or server downtime. The majority of these companies will fall victim to what Chen calls “the myth of frictionless onboarding.”

Despite the hype about ease of use, enterprise companies always ask customers to abandon familiar tools so they can learn something new.

“Just like with a new fitness program, participants feel good after completing the workout, but it takes a lot of activation energy to start and hard work to get there,” Chen notes.

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Instead of putting the onus on customers to roll up their sleeves, he suggests that SaaS startups learn from cryptocurrency culture and find ways to “incentivize users to do the necessary work to have the right experience.”

But how do you encourage users to put in the time and effort required to produce an optimal customer experience?

“In a world where there is a surplus of alternatives for every job to be done, the scarce resource is not content, tooling, or hacks and tricks,” says Chen. “It’s attention.”

We’re off on Monday, May 31 in observance of Memorial Day; I hope you have a relaxing weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Dismantling the myths around raising your first check

As startups and venture capital grow in tandem, fundraising has gone from a formal affair on Sand Hill Road to a process that can happen anywhere from Twitter to Zoom.

While fundraising may no longer require a trip to California, it might depend on whether you got an invite to a private audio app. And while you may not need to be an insider, second-time founders — largely male and white — still have a competitive advantage.

The growing complexity of fundraising has the opportunity to make tech either inclusive or exclusive.

VC is the flashy gold medal, but the rapid growth of emerging fund managers means that a first check can be piecemealed together from a variety of different sources. The options for financing are seemingly endless: syndicates, public crowdfunding, VC firms, accelerators, debt financing, rolling funds, and, for the profitable few, bootstrapping.

Doximity’s S-1 may explain why healthcare exits are heating up

Telehealth startup Doximity filed to go public earlier today. Notably, the company has not fundraised since 2014, a year in which it attracted just under $82 million at a valuation of $355 million, per PitchBook data.

How has it managed to not raise money for so long? By generating lots of cash and profit over the years. Healthtech communications, it turns out, can be a lucrative endeavor.

What Vimeo’s growth, profits and value tell us about the online video market

The spin-out of video platform Vimeo from IAC completed this week, and the smaller company is now trading as an independent entity under the ticker ‘VMEO’.

If you missed the news that the internet conglomerate was spinning out the video service, don’t feel bad; it slipped past many radars. But with the company now trading, our access to its historical results, and our minds still enthralled by YouTube’s recent financial performance for Alphabet, it’s worth taking a moment to digest the company’s health.

Flywire’s flotation suggests the IPO slowdown is behind us

The Flywire IPO is neat from a financial perspective and notable in that it’s a Boston exit as opposed to yet another New York or San Francisco-based flotation. It’s nice to see some other cities put points on the board.

But more than that, this IPO is a useful measuring stick for keeping tabs on the IPO market as a whole. This year and the last are shaping up to be key exit periods for startups and unicorns of all shapes and sizes; many a venture capital fund return rests on these public debuts.

Dear Sophie: Any unique immigration strategies for quick hiring?

Dear Sophie,

I do recruitment for tech startups. With a surge of VC investing, many startups are urgently hiring.

Which visas offer the quickest options for international talent? Are there any unique strategies that you would recommend we explore?

— Maverick in Milpitas

7 questions to ask before relocating your startup to Florida

Cities like Miami, Pittsburgh and Austin have been drawing talent and wealth from Silicon Valley for years, but the COVID-19 pandemic accelerated the trend.

In recent months, many investors and entrepreneurs have noisily departed for Miami, citing the region’s favorable business climate and quality of life.

It’s always good to consider one’s options, but before booking a moving van for the Sunshine State — or any emerging tech hub, for that matter — here are some basic questions entrepreneurs should ask themselves.

Vise CEO Samir Vasavada and Sequoia’s Shaun Maguire break down the art of the pitch

In just a few short years, Vise has gone from launching on the Disrupt Battlefield stage to a unicorn. Co-founders Samir Vasavada and Runik Mehrotra met Sequoia’s Shaun Maguire at an after-party at the event, and Maguire ended up leading a seed and Series A round while Sequoia led the Series B.

Last week, Vise raised its Series C of $65 million and was officially valued at $1 billion post-money.

We spoke to the pair about the early fundraising process for Vise, what Vasavada has learned about delivering a good fundraising pitch, and what stood out about the pitch and the product for Maguire.

Acorns’ SPAC listing depicts a consumer fintech business with a SaaSy revenue mix

Another day, another unicorn public offering.

On Thursday, it was Acorns, a consumer fintech service that blends saving and investing into a freemium product.

Acorns fits inside the larger savings-and-investing boom seen over the last four or five quarters as consumers buffeted by the economic changes brought on by COVID-19 turned to stashing cash and boosting their equities investing cadence.

By now this is old news, but we haven’t had a clear picture of the economics of consumer fintech startups accelerated by the pandemic. Now that Acorns has decided to list via a SPAC — more on that in a moment — we do.

Poor onboarding is the enemy of good hiring

The world of hybrid work is here, and the usual 10-minute intro call, swag bag and first-day team lunch are just not enough to make your new employee feel welcome.

While many companies have found a way to interview and select candidates in a fully remote environment, few have spent time and resources on aligning the “pre-boarding” and onboarding process for the new hybrid world of work. Many employers still rely on old ways of welcoming new hires, despite our totally changed work environment.

It’s important to capitalize on candidates’ enthusiasm and eagerness from the moment the offer is signed instead of when they log in on Day One, because first impressions can make or break a candidate’s chances of staying at a company.

 

Elevate your enterprise data technology and strategy at Transform 2021. OPINION: Earlier this week, Sega announced Sonic Origins, a new retro compilation that will include Sonic the Hedgehog, Sonic the Hedgehog 2, Sonic the Hedgehog 3 & Knuckles, and Sonic CD. I’m always down for a nice collection, but it does feel like this package could…Read More

Here in the U.S. the concept of using a driver’s data to decide the cost of auto insurance premiums is not a new one.

But in markets like Brazil, the idea is still considered relatively novel. A new startup called Justos claims it will be the first Brazilian insurer to use drivers’ data to reward those who drive safely by offering “fairer” prices.

And now Justos has raised about $2.8 million in a seed round led by Kaszek, one of the largest and most active VC firms in Latin America. Big Bets also participated in the round, along with the CEOs of seven unicorns, including Assaf Wand, CEO and co-founder of Hippo Insurance; David Vélez, founder and CEO of Nubank; Carlos Garcia, founder and CEO of Kavak; Sergio Furio, founder and CEO of Creditas; Patrick Sigrist, founder of iFood and Fritz Lanman, CEO of ClassPass. (There’s a seventh CEO who wishes to remain anonymous). Senior executives from Robinhood, Stripe, Wise, Carta and Capital One also put money in the round.

Serial entrepreneurs Dhaval Chadha, Jorge Soto Moreno and Antonio Molins co-founded Justos, having most recently worked at various Silicon Valley-based companies including ClassPass, Netflix and Airbnb.

“While we have been friends for a while, it was a coincidence that all three of us were thinking about building something new in Latin America,” Chadha said. “We spent two months studying possible paths, talking to people and investors in the United States, Brazil and Mexico, until we came up with the idea of creating an insurance company that can modernize the sector, starting with auto insurance.”

Ultimately, the trio decided that the auto insurance market would be an ideal sector considering that in Brazil, an estimated more than 70% of cars are not insured. 

The process to get insurance in the country, by any accounts, is a slow one. It takes up to 72 hours to receive initial coverage and two weeks to receive the final insurance policy. Insurers also take their time in resolving claims related to car damages and loss due to accidents, the entrepreneurs say. They also charge that pricing is often not fair or transparent.

Justos aims to improve the whole auto insurance process in Brazil by measuring the way people drive to help price their insurance policies. Similar to Root here in the U.S., Justos intends to collect users’ data through their mobile phones so that it can “more accurately and assertively price different types of risk.” This way, the startup claims it can offer plans  that are up to 30% cheaper than traditional plans, and grant discounts each month, according to the driving patterns of the previous month of each customer. 

“We measure how safely people drive using the sensors on their cell phones,” Chadha said. “This allows us to offer cheaper insurance to users who drive well, thereby reducing biases that are inherent in the pricing models used by traditional insurance companies.”

Justos also plans to use artificial intelligence and computerized vision to analyze and process claims more quickly and machine learning for image analysis and to create bots that help accelerate claims processing. 

“We are building a design-driven, mobile first and customer experience that aims to revolutionize insurance in Brazil, similar to what Nubank did with banking,” Chadha told TechCrunch. “We will be eliminating any hidden fees, a lot of the small text and insurance-specific jargon that is very confusing for customers.”

Justos will offer its product directly to its customers as well as through distribution channels like banks and brokers.

“By going direct to consumer, we are able to acquire users cheaper than our competitors and give back the savings to our users in the form of cheaper prices,” Chadha said.

Customers will be able to buy insurance through Justos’ app, website or even WhatsApp. For now, the company is only adding potential customers to a waitlist but plans to begin selling policies later this year..

During the pandemic, the auto insurance sector in Brazil declined by 1%, according to Chadha, who believes that indicates “there is latent demand raring to go once things open up again.”

Justos has a social good component as well. Justos intends to cap its profits and give any leftover revenue back to nonprofit organizations.

The company also has an ambitious goal: to help make insurance become universally accessible around the world and the roads safer in general.

“People will face everyday risks with a greater sense of safety and adventure. Road accidents will reduce drastically as a result of incentives for safer driving, and the streets will be safer,” Chadha said. “People, rather than profits, will become the focus of the insurance industry.”

Justos plans to use its new capital to set up operations, such as forming partnerships with reinsurers and an insurance company for fronting, since it is starting as an MGA (managing general agent).

It’s also working on building out its products such as apps, its back end and internal operations tools, as well as designing all its processes for underwriting, claims and finance. Justos’ data science team is also building out its own pricing model. 

The startup will be focused on Brazil, with plans to eventually expand within Latin America, then Iberia and Asia.

Kaszek’s Andy Young said his firm was impressed by the team’s previous experience and passion for what they’re building.

“It’s a huge space, ripe for innovation and this is the type of team that can take it to the next level,” Young told TechCrunch. “The team has taken an approach to building an insurance platform that blends being consumer-centric and data-driven to produce something that is not only cheaper and rewards safety but as the brand implies in Portuguese, is fairer.”

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As AI has grown from a menagerie of research projects to include a handful of titanic, industry-powering models like GPT-3, there is a need for the sector to evolve — or so thinks Dario Amodei, former VP of research at OpenAI, who struck out on his own to create a new company a few months ago. Anthropic, as it’s called, was founded with his sister Daniela and its goal is to create “large-scale AI systems that are steerable, interpretable, and robust.”

The challenge the siblings Amodei are tackling is simply that these AI models, while incredibly powerful, are not well understood. GPT-3, which they worked on, is an astonishingly versatile language system that can produce extremely convincing text in practically any style, and on any topic.

But say you had it generate rhyming couplets with Shakespeare and Pope as examples. How does it do it? What is it “thinking”? Which knob would you tweak, which dial would you turn, to make it more melancholy, less romantic, or limit its diction and lexicon in specific ways? Certainly there are parameters to change here and there, but really no one knows exactly how this extremely convincing language sausage is being made.

It’s one thing to not know when an AI model is generating poetry, quite another when the model is watching a department store for suspicious behavior, or fetching legal precedents for a judge about to pass down a sentence. Today the general rule is: the more powerful the system, the harder it is to explain its actions. That’s not exactly a good trend.

“Large, general systems of today can have significant benefits, but can also be unpredictable, unreliable, and opaque: our goal is to make progress on these issues,” reads the company’s self-description. “For now, we’re primarily focused on research towards these goals; down the road, we foresee many opportunities for our work to create value commercially and for public benefit.”

The goal seems to be to integrate safety principles into the existing priority system of AI development that generally favors efficiency and power. Like any other industry, it’s easier and more effective to incorporate something from the beginning than to bolt it on at the end. Attempting to make some of the biggest models out there able to be picked apart and understood may be more work than building them in the first place. Anthropic seems to be starting fresh.

“Anthropic’s goal is to make the fundamental research advances that will let us build more capable, general, and reliable AI systems, then deploy these systems in a way that benefits people,” said Dario Amodei, CEO of the new venture, in a short post announcing the company and its $124 million in funding.

That funding, by the way, is as star-studded as you might expect. It was led by Skype co-founder Jaan Tallinn, and included James McClave, Dustin Moskovitz, Eric Schmidt and the Center for Emerging Risk Research, among others.

The company is a public benefit corporation, and the plan for now, as the limited information on the site suggests, is to remain heads-down on researching these fundamental questions of how to make large models more tractable and interpretable. We can expect more information later this year, perhaps, as the mission and team coalesces and initial results pan out.

The name, incidentally, is adjacent to anthropocentric, and concerns relevancy to human experience or existence. Perhaps it derives from the “Anthropic principle,” the notion that intelligent life is possible in the universe because… well, we’re here. If intelligence is inevitable under the right conditions, the company just has to create those conditions.

Extra Crunch Live is all about helping founders build better venture-backed businesses. Naturally, we do this by having candid conversations with founders and their investors.

On an upcoming episode of Extra Crunch Live, we’ll sit down with MaC Venture Capital founding managing partner Marlon Nichols and Wonderschool co-founder and CEO Chris Bennett. REGISTER HERE FOR FREE!

Not only will we discuss how they came together for Wonderschool’s seed round in 2017, but how that translated into what has become a total of $24 million in funding from VCs like a16z and First Round Capital.

We’ll also host the Extra Crunch Live Pitch-off, where folks in the audience can pitch their startup to Nichols and Bennett to get their live feedback.

Nichols is a former Kauffman Fellow and Investment Director at Intel Capital. His portfolio includes Gimlet Media, MongoDB, Thrive Market, PlayVS, Fair, LISNR, Mayvenn, Blavity and Wonderschool. Nichols knows more than most of us will ever learn about seed-stage fundraising, and even gave a chat at TechCrunch Early Stage in April that outlines four strategies for securing seed funding.

We’ll get even deeper on that subject with Nichols, and hear the perspective from the other side of the table with Bennett.

Wonderschool is a network of early childhood programs that combine the quality of top-notch early education with an in-home setting.

Bennett can talk extensively on edtech as a sector, and we’ll pick both his and Nichols’ mind on that fast-growing space.

Don’t forget that this episode will feature an Extra Crunch Live Pitch-off, so founders in the audience should be ready to “raise their hand” and get in the mix.

The episode goes down on Wednesday, June 16 at 3 p.m. ET/noon PT. Extra Crunch Live is accessible to anyone who wants to attend, but on-demand access to the content, including the entire library of ECL episodes, is reserved exclusively for Extra Crunch members. Join now to check out what Aileen Lee, Roelof Botha, Mark Cuban and more had to say on earlier episodes of ECL. 

You can register for this episode of Extra Crunch Live, with MaC Venture Capital and Wonderschool, right here.

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There was a time when this column was more than a never-ending run of IPO coverage. Then the unicorn liquidity cycle kicked off and it’s been a long run of public offerings ever since. This morning is no exception.

Doximity filed to go public earlier today. You likely haven’t heard of the company because it exists in the modestly obscure world of telehealth. But it’s a venture-backed startup all the same that raised more than $80 million from investors like Emergence, InterWest Partners, Morgenthaler Ventures and Threshold, according to Crunchbase data.

Notably, Doximity has not fundraised since 2014, a year in which it attracted just under $82 million at a valuation of $355 million, per PitchBook data. How has it managed to not raise for so long? By generating lots of cash and profit over the years. Health tech communications, it turns out, can be a lucrative endeavor.

The Exchange explores startups, markets and money. 

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

Doximity is a social network that allows doctors to speak to each other while complying with HIPAA, a federal law that promotes medical privacy. The network, originally defined as a LinkedIn for medical professionals, gives doctors a Rolodex for specialists, a newsfeed for healthcare updates, a communication tool to talk to patients and a job search tool.

In 2017, Doximity claimed that it reached 70% of all U.S. doctors, more than 800,000 licensed professionals.

This is CEO Jeff Tangney’s second time bringing a health tech company public after his previous medical software startup, Epocrates, debuted in 2011.

Let’s chat briefly about the larger health tech exit market and then dig into Doximity’s IPO filing and get our heads around how the company managed to avoid private-market dilution for seven years — and what the company may be worth.

Health tech exits

The global digital health market is estimated to hit $221 billion by 2026, underscoring how large an opportunity the sector may present to venture capitalists. But investors aren’t merely just paying attention to estimates; they are seeing a number of exits in digital health (read: liquidity) that are warming up their checkbooks.

CB Insights estimates that there were 79 healthcare IPOs and M&A transactions in Q1 2021 alone, a 60% increase from the quarter prior. Another report says that there were 145 acquisitions of digital health companies in 2020, up from a solid 113 in 2019.

While still growing, it’s fair to say that those figures describe a healthy exit environment.

The list of deals in the market is straight fire. Earlier this year, Everlywell, founded in 2015, acquired two healthcare companies to expand its digital health service and distribution. Last week, Modern Fertility was bought by Ro for north of $225 million in a majority-equity deal. Before you start complaining that it’s not an IPO, consider this: A less than four-year-old company just got bought for a quarter of a billion dollars by another company that is less than four years old.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week had the whole crew aboard to record: Grace and Chris making us sound good, Danny to provide levity, Natasha to actually recall facts and Alex to divert us from staying on topic. It’s teamwork, people — and our transitions are proof of it.

And it’s good that we had everyone around the virtual table, as there was quite a lot to get through:

The team felt all kinds of ways about the Amazon-MGM deal. Some of us are more positive than the rest, but what gists out from the transaction is that for Amazon, the purchase price is modest and the company is famously playing a supposedly long-game. Let’s see how James Bond fits into it. Alex receives four points for not bringing up F1 thanks to the Bond-Aston Martin connection.Turning to the SPAC game, we chatted through the recent Lordstown Motors earnings results, and what we can parse from them regarding blank-check companies, promises and reality.After launching last June with just $2 million, Collab Capital has closed its debut fund at its target goal: $50 million. The Black-led firm invests exclusively in Black-led startups, and got checks from Apple, PayPal and Mailchimp to name a few. We talk about this feat, and note a few other Black-led venture capital firms making waves in the industry lately.We Resolved our transition puns and eventually spoke about the Affirm spin-out, which raised $60 million in a funding round for BNPL for businesses. There are bigger questions there around the accessibility and point of BNPL, and if it’s really re-inventing the wheel or just repackaging it with simpler UX.Next up, we got into a can of worms about the future of meetings thanks to Rewatch, which raised a $20 million Series A this week led by Andreessen Horowitz. The startup helps other startups create internal, private YouTubes to archive their meetings and any video-based comms. We could only spend a second on this, so if you want our longer thoughts in the form of text, check out our three views on the topic on Extra Crunch! (Discount Code: Equity)From there we had Interactio and Fireflies.ai, two more startups that are tackling the complexities of meetings in the COVID-19 era, and whatever comes next. Both recently raised new funding, and Alex brought up Kudo to add one more upstart to the mix.Noom, a weight loss platform, bulked up with $540 million in funding after nearly doubling its revenue from 2019 to 2020. The pandemic has made many people gain weight, but we chew into why Noom’s moment might be right now after a decade in the works.

Thanks for hanging out this week, Equity is back on Tuesday with our usual weekly kickoff, thanks to the American holiday on Monday. Chat then, unless you want to follow us on Twitter and get a first-look at all of Chris’ meme work. 

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

MotoRefi has raised another $45 million in a round led by Goldman Sachs just five months after investors poured $10 million into the fintech startup to help turbocharge its auto refinancing business.

The startup developed an auto refinancing platform that handles the entire loan process, including finding the best rates, paying off the old lender and re-titling the vehicle. MotoRefi says using its platform saves consumers an average of $100 a month on their car payments, a goal achieved partly because it works directly with lending institutions. The company’s refinancing tools had seen steady growth until the COVID-19 pandemic popped into in higher gear. CEO Kevin Bennett said MotoRefi is on track to issue $1 billion in loans by the end of the year, a fivefold increase from the same period last year.

Bennett said the short timeline between rounds was driven by investor confidence in its metrics, which have continued on to grow at a fast pace, and the basic economics around the business.

“We candidly weren’t planning on raising yet, but they (Goldman Sachs) were comfortable given the relationship we have built and the track record and success of the business, to preempt the round and move that calendar up,” Bennett said.

MotoRefi’s platform is available in 46 states and Washington, DC, with plans to be live in all 50 states by the end of the year. The startup has ramped up hiring to help support that growth. By the first quarter of 2021, it had more than doubled its headcount to 187 employees from the same period last year. Its workforce has now popped to 250 employees. The company has hired several senior-level executives, opened a new headquarters and partnered with SoFi. Goldman Sach’s VP of venture capital and growth equity Jade Mandel has joined MotoRefi’s board.

And Bennett sees plenty of room to grow as consumers seek ways to rebalance their debts. The auto refinance market in the United States is $40 billion. However, overall auto loan debt is $1.3 trillion. With 40 million auto loans originated every year, MotoRefi is promised a consistent flow of potential new customers.

The fresh injection of capital, which included investor IA Capital as well as returning backers Moderne Ventures, Accomplice, Link Ventures, Motley Fool Ventures and CMFG Ventures, will be used to continue to build out its products and services and hire more people. MotoRefi has raised $60 million since its inception in 2016.

Bennett believes the company is now in self-sustaining position.

“Thankfully, we moved beyond the world where we are raising capital and then raising more capital as we run out of capital,” he said. “I think we have a great sustainable business and so we, in some sense runway is infinite, and we are building a great profitable business. That’s not to say that we won’t ever raise again, but it will be based on strategic considerations, as opposed to out of necessity.”

Meet Café, a new French startup founded by two brothers that wants to help companies switch to a hybrid remote-and-office workplace model. Café isn’t a traditional desk-booking tool. Instead, the company helps you see when people in your team are coming to the office so that you can plan when you should go to the office as well.

Instead of focusing on workspace, Café focuses on people first. “We decided that we wouldn’t let you book a desk directly,” co-founder and CTO Arthur Lorotte de Banes told me.

When you open the app, you get a simplified calendar view. For each day, you can see your team members divided by groups — people coming to the office, people working from home, etc.

In just a few taps, you can tell your other co-workers what you plan to do. This way, it becomes much easier to schedule meetings, have in-person conversation and more generally hang out with your co-workers. It also makes it easier to find a common day with a specific co-worker if you’re working on the same project.

“We interviewed 150 companies and we realized companies faced the same issue after interviewing the first five companies. They all use spreadsheets,” co-founder and CEO Tom Nguyen told me.

Using a tool like Café also gives you insights about your office. For instance, you can see the average number of persons in your office depending on the day of the week or the day of the month. Admins can configure a weekly reminder to make sure that everybody fills out information.

In addition to its mobile app and web app, Café integrates with your existing tools. For instance, you can connect your Café account with Slack so that your status on Slack reflects your status in Café. Teammates can hover over your name to know that you’re in the office or you’re at home.

The company is also working on integrations with human resource information systems, such as PayFit, so that your vacation is automatically synchronized with Café.

As companies start hashing out a plan to return to the office, Café arrives on the market at the right time. Companies can create custom statuses to fit their specific needs. For instance, a Café customer has created a status so that they know who has the office keys to make sure that the office remains open.

The company raised a $1 million seed round from 122West, Kima Ventures, Jonathan Widawski, Guillaume Lestrade, Jacques-Edouard Sabatier and various business angels who work or have worked for WeWork, Dropbox, Github, Snapchat, Intercom, Stripe, Alan and PayFit.

Like Typeform, Doodle or Slido, Café has chosen a freemium strategy. Teams can sign up for free and start using the product with their immediate co-workers. You don’t need to enter card information to sign up.

If you want to roll it out across the organization with more users, you have to start paying — existing clients include Livestorm, Jellysmack and Yubo. The startup believes employees will become product advocates for the entire organization. And it seems like the right strategy for a product that is supposed to make employees happier at work.

Fintech and proptech are two sectors that are seeing exploding growth in Latin America, as financial services and real estate are two categories in particular dire need of innovation in a region.

Brazil’s QuintoAndar, which has developed a real estate marketplace focused on rentals and sales, has seen impressive growth in recent years. And today, the São Paulo-based proptech has announced it has closed on $300 million in a Series E round of funding that values it at an impressive $4 billion.

The round is notable for a few reasons. For one, the valuation – high by any standards but especially for a LatAm company – represents an increase of four times from when QuintoAndar raised a $250 million Series D in September 2019.

It’s also noteworthy who is backing the company. Silicon Valley-based Ribbit Capital led its Series E financing, which also included participation from SoftBank’s LatAm-focused Innovation Fund, LTS, Maverik, Alta Park, an undisclosed US-based asset manager fund with over $2 trillion in AUM, Kaszek Ventures, Dragoneer and Accel partner Kevin Efrusy.

Having backed the likes of Coinbase, Robinhood and CreditKarma, Ribbit Capital has historically focused on early-stage investments in the fintech space. Its bet on QuintoAndar represents clear faith in what the company is building, as well as its confidence in the startup’s plans to branch out from its current model into a one-stop real estate shop that also offers mortgage, title, insurance and escrow services.

The latest round brings QuintoAndar’s total raised since its 2013 inception to $635 million.

Ribbit Capital Partner Nick Huber said Quintoandar has over the years built “a unique and trusted brand in Brazil” for those looking for a place to call home.

“Whether you are looking to buy or to rent, QuintoAndar can support customers through the entire transaction process: from browsing verified inventory to signing the final contracts,” Huber told TechCrunch. “The ability to serve customers’ needs through each phase of life and to do so from start to finish is a unique capability, both in Brazil and around the world.”

QuintoAndar describes itself as an “end-to-end solution for long-term rentals” that, among other things, connects potential tenants to landlords and vice versa. Last year, it expanded also into connecting a home buyers to sellers.

TechCrunch spoke with co-founder and CEO Gabriel Braga and he shared details around the growth that has attracted such a bevy of high-profile investors.

Like most other businesses around the world, QuintoAndar braced itself for the worst when the COVID-19 pandemic hit last year – especially considering one core piece of its business is to guarantee rents to the landlords on its platform.

“In the beginning, we were afraid of the implications of the crisis but we were able to honor our commitments,” Braga said. “In retrospect, the pandemic was a big test for our business model and it has validated the strength and defensibility of our binsess on the credit side and reinforced our value proposition to tenants and landlords. So after the initial scary moments, we actually felt even more confident in the business that we are building.”

QuintoAndar describes itself as “a distant market leader” with more than 100,000 rentals under management and about 10,000 new rentals per month. Its rental platform is live in 40 cities across Brazil, while its homebuying marketplace is live in 4. Part of its plans with the new capital is to expand into new markets within Brazil, as well as in Latin America as a whole.

The startup claims that, in less than a year, QuintoAndar managed to aggregate the largest inventory among digital transactional platforms. It now offers more than 60,000 properties for sale across Sao Paulo, Rio de Janeiro, Belho Horizonte and Porto Alegre. To give greater context around the company’s growth of that side of its platform: in its first year of operation, QuintoAndar closed more than 1,000 transactions. It has now surpassed the mark of 8,000 transactions in annualized terms, growing between 50% and 100% quarter over quarter.

As for the rentals side of its business, Braga said QuintoAndar has more than 100,000 rentals under management and is closing about 10,000 new rentals per month. The company is not profitable as it’s focused on growth, although it is unit economics are particularly favorable in certain markets such as Sao Paulo, which is financing some of its growth in other cities, according to Braga.

Now, the 2,000-person company is looking to begin its global expansion with plans to enter the Mexican market later this year. With that, Braga said QuintoAndar is looking to hire “top-tier” talent from all over.

“We want to invest a lot in our product and tech core,” he said. “So we’re trying to bring in more senior people from abroad, on a global basis.”

Some history

CEO Braga and CTO André Penha came up with the idea for QuintoAndar after receiving their MBAs at Stanford University. As many startups do, the company was founded out of Braga’s personal “nightmare” of an experience – in this case, of trying to rent an apartment in Sao Paulo.

The search process, he recalls, was difficult as there was not enough information available online and renters were forced to provide a guarantor, or co-signer, from the same city or pay rent insurance, which Braga described as “very expensive.”

“Overall, I felt it was a very inefficient and fragmented process with no transparency or tech,” Braga told me at the time of the company’s last raise. “There was all this friction and high cost involved, just real tangible problems to solve.”

The concept for QuintoAndar (which can be translated literally to “Fifth Floor” in Portuguese) was born.

“Little by little, we created a platform that consolidated supply and inventory in a uniform way,” Braga said.

The company took the search phase online for the first time, according to Braga. It also eliminated the need for tenants to provide a guarantor, thereby saving them money. On the other side, QuintoAndar also works to help protect the landlord with the guarantee that they will get their rent “on time every month,” Braga said.

It’s been interesting watching the company evolve and grow over time, just as it’s been fascinating seeing the region’s startup scene mature and shine in recent years.

As startups and venture capital grow in tandem, fundraising has gone from a formal affair on Sand Hill Road to a process that can happen anywhere from Twitter to Zoom.

While fundraising may no longer require a trip to California, it might depend on whether you got an invite to a private audio app. And while you may not need to be an insider, second-time founders — largely male and white — still have a competitive advantage.

The growing complexity of fundraising has the opportunity to make tech either inclusive or exclusive. For new founders looking to raise money, let’s dismantle the myths about raising your first check and instead focus on how investors and other successful founders describe the nuance needed to secure money.

What makes my business venture-worthy?

This question is existential, but it should be at the forefront throughout your journey as a founder. Elizabeth Yin, founding partner of Hustle Fund, says startups should be able to hit one of two goals: Reach $100 million ARR by its fifth year or get to $1 billion in valuation in the same time period.

“This is hard to do. And most businesses will never get there — not for a lack of trying — but there’s a lot of luck whether your idea has that much demand that quickly,” she added.

“I think you will know in the first year or two how ‘easy’ or ‘hard’ it is to get customers and whether you think on that trajectory you can get to $100 million a year in a few years,” Yin said. “And if it’s really hard, it doesn’t mean you throw in the towel. … There are many great companies that are not VC-backable where the founders will make a lot of money, but it just means you need to think through where to get your financing. Perhaps it’s from angels. Perhaps it’s from revenue-based financing funds. Perhaps it’s from customer crowdfunding.”

While VC is the flashy gold medal, the rapid growth of emerging fund managers means that a first check can be piecemealed together from a variety of different sources. The options for financing are seemingly endless: syndicates, public crowdfunding, VC firms, accelerators, debt financing, rolling funds, and, for the profitable few, bootstrapping.

“When people go around saying, ‘Do you want to run a VC-backable company?’ that feels weird — you don’t necessarily get to pick how fast you can grow — the market just may or may not be there,” Yin said. “There’s a lot of luck with that.”

Leslie Feinzaig, founder of Female Founders Collective, said that beyond economics, the hardest part of knowing whether your startup makes sense as a VC-backed business is understanding your own goals as an entrepreneur.

On-demand grocery startups like Gorillas are invading Europe right now, but although on-demand-everything is kinda old-hat in the Bay Area, a new startup thinks it might just be able to do something new.

Food Rocket says it has raised a $2 million investment round from AltaIR Capital, Baring Vostok fund and the Angelsdeck group of business angels, including Philipp Bashyan, of Russia’s Yonder, who has joined as an investor and advisor.

Yes, admittedly, this tiny startup is competing with DoorDash, GoPuff, InstaCart and Amazon Fresh. Maybe let’s not get into that…

Using the company’s mobile app, users can order fresh groceries, ready-to-eat meals and household goods that will be delivered within 10-15 minutes, says the startup, which will be servicing SoMa, South Park, Mission Bay, Japantown, Hayes Valley and other areas. The company hopes to open 150 “dark stores” on the West Coast as part of its infrastructure.

Vitaly Aleksandrov, CEO, and co-founder of Food Rocket, said: “The level of competition in this market in the U.S. is still manageable, which is why we have the opportunity to become leaders in the sphere of fast delivery of basic products and household goods. We aim to replace brick-and-mortar supermarkets and to change consumers’ current habits in regards to grocery shopping.”

What can we say? Good luck?