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Pokèmon Go creator Niantic has acquired a small SF gaming startup building a league and tournament organization platform to help gamers create their own communities around popular titles.

Mayhem was in Y Combinator’s winter 2018 batch and went onto raise $5.7 million in funding according to Crunchbase. Other backers include Accel, which led the startup’s Series A in 2018, Afore Capital and NextGen Venture Partners.

The startup’s focus has shifted quite a bit since its initial YC debut, when it announced a service called Visor that would analyze video of esports gameplay and coach users on how they could improve their performance. The company has seemed to shift its focus wholly to community tools to help gamers find matches and organize tournaments for games like Overwatch on its platform.

Terms of the acquisition weren’t disclosed by Niantic .

The “majority” of Mayhem’s team will be joining Niantic with the startup’s CEO Ivan Zhou landing in the company’s Social Platform Product team while the rest of the team joins Platform Engineering.

In a statement, Niantic asserts that the acquisition “reinforces our commitment to real-world social as the centerpiece of our mission.”

Most of Niantic’s acquisitions of late have focused on augmented reality backend technologies so it’s interesting to see them buying tech that focuses on community organization.

Pokèmon Go continues to be Niantic’s cash cow though the company hasn’t seen the same levels of viral success with subsequent releases where organic growth hasn’t been quite as easy to come by. Buying a startup building community tools suggests the company is ready to bring in some outside tech to push their own efforts forward as they strive to create a broader platform for their AR ambitions and more standalone hits of their own.

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Steel production accounts for roughly 8% of the emissions that contribute to global climate change. It is one of the industries that sits at the foundation of the modern economy and is one of the most resistant to decarbonization.

As nations around the world race to reduce their environmental footprint and embrace more sustainable methods of production, finding a way to remove carbon from the metals business will be one of the most important contributions to that effort.

One startup that’s developing a new technology to address the issue is Boston Metal. Previously backed by the Bill Gates-financed Breakthrough Energy Ventures fund, the new company has just raised roughly $50 million of an approximately $60 million financing round to expand its operations, according to a filing with the Securities and Exchange Commission.

The global steel industry may find approximately 14% of its potential value at risk if the business can’t reduce its environmental impact, according to studies cited by the consulting firm McKinsey & Co.

Boston Metal, which previously raised $20 million back in 2019, uses a process called molten oxide electrolysis (“MOE”) to make steel alloys — and eventually emissions-free steel. The first close of the funding actually came in December 2018 — two years before the most recent financing round, according to Tadeu Carneiro, the company’s chief executive.

Over the years since the company raised its last round, Boston Metal has grown from eight employees to a staff that now numbers close to 50. The Woburn, Massachusetts-based company has also been able to continuously operate its three pilot lines producing metal alloys for over a month at a time.

And while the steel program remains the ultimate goal, the company is quickly approaching commercialization with its alloy program, because it isn’t as reliant on traditional infrastructure and sunk costs according to Carneiro.

Boston Metal’s technology radically reimagines an industry whose technology hasn’t changed all that much since the dawn of the Iron Age in 1200 BCE, Carneiro said.

Ultimately the goal is to serve as a technology developer licensing its technology and selling components to steel manufacturers or engineering companies that will ultimately make the steel.

For Boston Metal, the next steps on the product road map are clear. The company will look to have a semi-industrial cell line operating in Woburn by the end of 2022, and by 2024 or 2025 hopes to have its first demonstration plant up and running. “At that point we will be able to commercialize the technology,” Carneiro said.

The company’s previous investors include Breakthrough Energy Ventures, Prelude Ventures and the MIT-backed “hard-tech” investment firm, The Engine. All of them came back to invest in the latest infusion of cash into the company along with Devonshire Investors, the private investment firm affiliated with FMR, the parent company of financial services giant, Fidelity, which co-led the deal alongside Piva Capital and another, undisclosed investor.

As a result of its investment, Shyam Kamadolli will take a seat on the company’s board, according to the filing with the SEC.

MOE takes metals in their raw oxide form and transforms them into molten metal products. Invented at the Massachusetts Institute of Technology and based on research from MIT Professor Donald Sadoway, Boston Metal makes molten oxides that are tailored for a specific feedstock and product. Electrons are used to melt the soup and selectively reduce the target oxide. The purified metal pools at the bottom of a cell and is tapped by drilling into the cell using a process adapted from a blast furnace. The tap hole is plugged and the process then continues.

One of the benefits of the technology, according to the company, is its scalability. As producers need to make more alloys, they can increase production capacity.

“Molten oxide electrolysis is a platform technology that can produce a wide array of metals and alloys, but our first industrial deployments will target the ferroalloys on the path to our ultimate goal of steel,” said Carneiro, the company’s chief executive, in a statement announcing the company’s $20 million financing back in 2019. “Steel is and will remain one of the staples of modern society, but the production of steel today produces over two gigatons of CO2. The same fundamental method for producing steel has been used for millennia, but Boston Metal is breaking that paradigm by replacing coal with electrons.”

No less a tech luminary than Bill Gates himself underlined the importance of the decarbonization of the metal business.

“Boston Metal is working on a way to make steel using electricity instead of coal, and to make it just as strong and cheap,” Gates wrote in his blog, GatesNotes. Although Gates did have a caveat. “Of course, electrification only helps reduce emissions if it uses clean power, which is another reason why it’s so important to get zero-carbon electricity,” he wrote.

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The lure of subscription pricing is the guarantee of recurring revenue for your business. Once a customer flips the switch to turn on your subscription, it’s easy money:

Easy to recognize your revenue.Easy to determine your margins and profits.Easy to enhance your product and extend that revenue out for months, even years.

While that’s true, converting a subscription customer isn’t as simple as flipping a switch. You can build a platform, launch with fanfare, offer all sorts of incentives and trials to attract potential customers — and watch as they disengage and lapse into limbo.

That’s the actual guarantee that comes with subscription pricing, which will happen unless you cultivate a funnel that catches potential subscribers as soon as they learn about your product and follows them until their very last sign-in.

I built my first subscription-model product in 1999. I’m currently in early-access on my latest, and I’ve launched a bunch more along the way.

While the customer dynamic has changed over the last 20 years, the conversion process has not. In fact, it’s actually gotten easier to convert and retain customers through the subscription funnel.

Here’s what I’ve learned.

Why subscription pricing works

Subscription pricing is a hot trend in just about every business in every industry. Pay-as-you-go is the new normal from software to retail to service.

In my mind, the major shift occurred when mobile phones started pricing unlimited usage per period instead of fixed or cost per minute. Once usage limits were removed, use cases exploded and the promise of a truly mobile computer was finally realized.

Makers of all stripes learned that lesson: From razors to video streaming to accounting software, pricing models have emerged that focus on time periods instead of units.

But contrary to popular belief, subscription pricing doesn’t work because of the lower price point that a monthly installment allows. It’s effective because a subscription reorients each customer’s mind from product function to value proposition.

I don’t care what kind of German engineering went into my razor blades, as long as I have working blades when I need them.

As an entrepreneur, you probably use at least one digital subscription service to build your own product and company, if not several. In fact, just to get to the MVP of my new project, I subscribed to AWS, MailChimp, Zapier and Bubble. I’m still on the free tier of a few more services for some lower-priority features. There’s a few more I quit or never tried.

Thus, you know that value prop plays a big part of whether the customer will pay and stay. So reinforcing your value proposition should play a big part in every level of your customer funnel.

You must catch and track customers to be effective

A subscription-pricing model without an ability to track the steps in the conversion funnel will result in all the headaches of subscription pricing without any of the benefits.

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Welcome to 2021, a year that could extend 2020’s startup market disruptions and excesses — or change patterns that previously performed well for early-stage tech companies and their investors.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

As we turn the page, I have a number of questions worth raising as we muck into 2021.

Each relates to a 2020 change that is expected to persist, by either the general market or those bullish on startups. I want to know what would need to change to shake up what became the new normal last year. After all, it’s precisely when it feels like nothing could shake up a downturn (or a boom) that things often do.

Today, let’s discuss seed deals, venture investing cadence, the resulting valuation pressures from rapid-fire bets, current IPO expectations and what happens to software sales when remote work begins to fade.

1. How long can seed deal-making stay hot?

As 2020 came to a close, Natasha Mascarenhas and I reported on seed investing’s strong year and its especially strong second half. How long can that pace keep up?

Nearly all our questions today deal with the endurance of certain conditions, namely: how long the market can keep parts of startup land red-hot.

When it comes to seed deal-making, Q1 and Q2 2020 saw similar levels of investment in the United States. But Q3 proved explosive, with money invested into domestic seed deals rising from around $1.5 to $1.6 billion during the first two quarters to $2.2 billion in the July-September period.

Q4 numbers are yet to fully come in, but it’s clear that private investors were incredibly bullish on early-stage startups in the second half of 2020. How long can that keep up? I think the answer is for a while yet, as investors have shown scant enthusiasm for slowing down their dealmaking cadence.

While cadence remains hot generally, seed deals should stay heated as the number of investors who are willing to invest early has increased.

Which brings us to our second question:

2. How long can investors keep writing such quick checks?

A theme that cropped up in the second half of 2020 was the pace at which investors were conducting venture capital deals. This was for a few reasons. To start, venture capitalists have raised larger funds in recent years, meaning that they need larger returns to make the math work out. This led to many investors putting money to work in younger and younger companies, hoping to get in early on a big win. That setup led to more deal competition and faster deal-making.

How? Two things. Investors who were already on a startup’s cap table — already part-owners, in other words — led preemptive rounds, in part to get ahead of other investors who might want to poach the succeeding deal. Other investors, knowing this, seemed to do the same math and move even faster, and earlier, to get around the defense.

So how long can the trend keep up? Given that many big VC firms raised in 2020, many startups picked up some tailwinds from the COVID-19 economy and exits have been strong, forever? Until something stops things? Think of it as Newton’s First Law of startup investing.

What could be the sudden impact to shake up the current set of conditions boosting the pace at which seed and later deals occur? An asteroid strike is probably too extreme, but inertia is one hell of a drug and markets love to stay happy.

Moving along, all the competition to get money to work in hot startups now has had another effect than the mere speed of deal-making; it has also pushed prices higher.

Healthcare startup Color has raised a sizable $167 million in Series D funding round, at a valuation of $1.5 billion post-money, the company announced today. This brings the total raised by Color to $278 million, with its latest large round intended to help it build on a record year of growth in 2020 with even more expansion to help put in place key health infrastructure systems across the U.S. — including those related to the “last mile” delivery of COVID-19 vaccines.

This latest investment into Color was led by General Catalyst, and by funds invested by T. Rowe Price, along with participation from Viking Global investors as well as others. Alongside the funding, the company is also bringing on a number of key senior executives, including Claire Vo (formerly of Optimizely) as chief product officer, Emily Reuter (formerly of Uber, where she played a key role in its IPO process) as VP of Strategy and Operations, and Ashley Chandler (formerly of Stripe) as VP of Marketing.

“I think with the [COVID-19] crisis, it’s really shone the light on that lack of infrastructure. We saw it multiple times, with lab testing, with antigen testing and now with vaccines,” Color CEO and co-founder Othman Laraki told me in an interview. “The model that we’ve been developing, that’s been working really well and we feel like this is the opportunity to really scale it in a very major way. I think literally what’s happening is the building of the public health infrastructure for the country that’s starting off from a technology-first model, as opposed to, what ends up happening in a lot of industries, which is you start off taking your existing logistics and assets, and add technology to them.”

Color’s 2020 was a record year for the company, thanks in part to partnerships like the one it formed with San Francisco to establish testing for healthcare workers and residents. Laraki told me they did about five-fold their prior year’s business, and while the company is already set up to grow on its own sustainably based on the revenue it pulls in from customers, its ambitions and plans for 2021 and beyond made this the right time to help it accelerate further with the addition of more capital.

Laraki described Color’s approach as one that is both cost-efficient for the company, and also significant cost-saving for the healthcare providers it works with. He likens their approach to the shift that happened in retail with the move to online sales — and the contribution of one industry heavyweight in particular.

“At some point, you build Amazon — a technology-first stack that’s optimized around access and scale,” Laraki said. “I think that’s literally what we’re seeing now with healthcare. What’s kind of getting catalyzed right now is we’ve been realizing it applies to the COVID crisis, but also, we started actually working on that for prevention and I think actually it’s going to be applying to a huge surface area in healthcare; basically all the aspects of health that are not acute care where you don’t need to show up in hospital.”

Ultimately, Color’s approach is to rethink healthcare delivery in order to “make it accessible at the edge directly in people’s lives,” with “low transaction costs,” in a way that’s “scalable, [and] doesn’t use a lot of clinical resourcing,” Laraki says. He notes that this is actually very possible once you reasses the problem without relying on a lot of accepted knowledge about the way things are done today, which result in a “heavy stack” versus what you actually need to deliver the desired outcomes.

Laraki doesn’t think the problem is easy to solve — on the contrary, he acknowledges that 2021 is likely to be even more difficult and challenging than 2020 in many ways for the healthcare industry, and we’ve already begun to see evidence of that in the many challenges already faced by vaccine distribution and delivery in its initial rollout. But he’s optimistic about Color’s ability to help address those challenges, and to build out a “last mile” delivery system for crucial care that expands accessibility, while also making sure things are done right.

“When you take a step back, doing COVID testing or COVID vaccinations … those are not complex procedures at all — they’re extremely simple procedures,” he said. “What’s hard is doing them massive scale and with a very low transaction cost to the individual and to the system. And that’s a very different tooling.”

Entrepreneurs are invited to the 514th FREE online 1Mby1M Mentoring Roundtable on Thursday, January 7, 2021, at 8 a.m. PST/11 a.m. EST/5 p.m. CET/9:30 p.m. India IST. If you are a serious...

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