Bright raises $15M for its live video platform that lets you Zoom with top creators

Bright, a live video platform that lets fans Zoom with their favorite creators and celebs, has raised $15 million in new funding, the company announced today. The round was co-led by co-founder and talent manager Guy Oseary’s Sound Ventures, the fund he founded with Ashton Kutcher. RIT Capital and Regah Ventures also co-led.

Other investors in the new round include Marc Benioff’s TIME Ventures, Globo Ventures, Norwest Venture Partners, Shawn Mendes & Manager Andrew Gertler’s AG Ventures, as well as Jeff Lawson, CEO and co-founder of Twilio.

In addition, a number of artists, performers, actors and other celebrities also invested, Bright says, including Rachel Zoe, Drew and Jonathan Scott, Judd Apatow, Ashton Kutcher, Amy Schumer, Bethenny Frankel, and Ryan Tedder. Meanwhile, Jessica Alba, Kane Brown and Maria Sharapova are joining the company as advisors.

Bright, which first debuted in May, was co-founded by Madonna and U2 talent manager Guy Oseary along with early YouTube product manager Michael Powers, who had previously launched the YouTube Channels feature while at Google. The startup’s premise is to tap into the growing creator economy in a way that allows creators to better monetize their success outside of ad-supported networks, like YouTube, so they can grow their own business.

The platform itself is built on top of Zoom — a choice that not only saves Bright from starting from scratch for its real-time video technology, but also one that leverages the broad adoption Zoom has since seen due to the pandemic.

At launch, Bright announced a lineup that included over 200 prominent creators who were set to host ticketed online events where they share their stories or expertise, engage in interviews, offer advice and more. Today, Bright says now over 300 notable names have joined the service to engage with fans and continue to build their brand. The list includes Madonna, Naomi Campbell, D-Nice, the D’Amelio Sisters, Laura Dern, Deepak Chopra, Lindsey Vonn, Diego Boneta, Jason Bolden, Yris Palmer, Cat & Nat, Ronnie2K, and Chef Ludo Lefebvre, and others. Even more are on board to host future sessions.

Unlike social media creator tools, Bright is focused on knowledge-sharing rather than just gaining likes or follows. For example, one the first sessions featured actor Laura Dern speaking about personal growth, while another featured streamer and online creator Ronnie2K hosting a series about building a career in gaming. In other words, Bright doesn’t only showcase Hollywood entertainment or top artists — it’s open to anyone whose fan base would be willing to pay to hear them talk.

Today, there are sessions across a variety of interests and topics, organized into areas like craft, home, money, culture, body and mind.

Image Credits: Bright session example

Bright itself generates revenue by taking a 20% commission on creator revenue, which is somewhat lower than the traditional marketplace split of 30/70 (platform/creator) but higher than some of the newer platforms available today, like Clubhouse and its commission-free direct payments.

The startup says the funding is being used to help roll out Creator Studio, a new suite of creator tools for managing learning sessions, audience communication, and revenue performance. These sorts of analytics and tools are aimed at serving creators who are working to build a business through live sessions, in addition to growing their fan base. The funds will also help Bright to add new interactive features, like instant polls and the ability to share learning materials with attendees, it says.

These features could potentially help Bright to stand out from a growing number of competitors looking to serve online creators, which today includes major tech companies, like YouTube, Facebook, TikTok and Twitter. However, Oseary’s ability to leverage his personal network to pull in big names is, for now, the more notable differentiator.

“As a believer in lifelong learning, I’m proud to be investing in a platform like Bright, offering audiences the unique opportunity to learn directly from the artists and experts they admire the most,” said new investor, director and producer, Judd Apatow, in a statement. “Through Bright, I can directly connect and share my knowledge with fellow writers, aspiring directors and lovers of comedy,” he added.

“It’s inspiring to have the support of incredible investors as well as these notable artists and entrepreneurs. All our partners share Bright’s vision that people want to level up their lives by learning directly from those they admire,” Bright CEO Michael Powers said, in an announcement. “Through Bright, talent can better engage authentically with audiences by sharing their own knowledge and bringing their many interests and passions to the foreground. We are excited to roll out our new features to continue elevating our platform and mission” he said.

#advisors, #amy-schumer, #apps, #articles, #ashton-kutcher, #chef, #creator-studio, #creator-tools, #deepak-chopra, #google, #guy-oseary, #jeff-lawson, #jessica-alba, #marc-benioff, #media, #michael-powers, #norwest-venture-partners, #online-creators, #online-events, #product-manager, #recent-funding, #social, #social-media, #software, #startups, #time-ventures, #twilio, #twitter, #video-hosting, #youtube

EdTech startup bina raises $1.4M to teach 4 to 12-year-olds, launch School-as-a-Service

With the pandemic wreaking havoc amongst early years education amid school lockdowns, it’s no wonder EdTech startups have piled into the space. But it’s also served to highlight the abysmal nature of earl years teaching: Some 40 million teachers across the globe are leaving the sector, according to to the World Bank. Of the 1.5 billion primary-age children, only a few can access high-quality education, and approximately 58 million primary-age children are out of education, most of whom are girls

So the opportunity to make a difference, using online teaching, in these very young years is great, because classes sizes can be reduced online, and the quality of teaching improved.

This is the idea behind bina, which bills itself as a “digital primary education ecosystem”. It’s now raised $1.4M to aim at the education of 4 to 12-year-olds.

The funding round was led by Taizo Son, one of Japan’s billionaires. Other investors and advisors include Jutta Steiner, Founder at Parity Technologies, the company behind Polkadot decentralized protocol, and Lord Jim Knight, Ex-Minister of Education (UK).

Bina’s ‘schtick’ is that is has very small online class sizes of 6 students (3x smaller than the OECD average).

It also boasts of “adaptive learning paths” that cover international standards; teachers with a minimum of 8 years of digital teaching experience; and data-driven decision making for its pedagogical approach. 


Noam Gerstein, bina’s CEO and founder said: “I’ve interviewed students, teachers, and parents globally for years, and it is clear a new systemic design is needed. With our founding families, we are building a world in which every child has access to quality education, educators’ skills are valued and continuously developed, and parents don’t need to choose between their work and family life.”
 
He says it also grants pupils company shares (RSUs) as they grow with the school. Currently available to English-speaking students in the CET timezone, the bina School is planning a SaaS product for governments, NGOs and school systems.

“We right now compete against companies like Outschool, Pearson’s online Academy, primer and Prisma,” he told me over a call. “So these are the big names of the last year for the first phase. But the strategy is that we’re building it in two phases. The first phase is actually building a school that we operate as a ‘lab’ school. And the second phase is what we call ‘bina as a service’. So it’s a SaaS ‘school as a service’. The idea is that we offer collaboration with NGOs and governments, doing accreditation and training and licencing of the product. So for that second part we’re actually competing against the big accreditation system.”

#advisors, #articles, #ceo, #education, #europe, #japan, #jutta-steiner, #oecd, #outschool, #parity-technologies, #pearson, #saas, #student, #tc, #teacher, #united-kingdom, #world-bank

Early-stage founders: Beat the clock & buy a $79 Founder pass to TC Disrupt 2021

If you’re an early-stage founder, you’d be wise to make TechCrunch Disrupt 2021 (September 21-23) your must-attend virtual destination. It’s the OG of tech startup conferences, draws more than 10,000 attendees from around the world and features some of the most gifted, visionary minds and makers across the entire tech spectrum.

Cash-strapped founders in the early innings of their startup love to save money, and we get it in a big way. That’s why our Founder pass is the perfect choice for you. Right now, you can buy a Founder Pass for $79 but the clock is ticking on this early bird deal. It flies away — and prices go up — on July 30 at 11:59 pm (PT).

The price might be small, but a Founder pass provides full access to Disrupt programming — more than 100 hours of live content and three months of video-on-demand access. You’ll connect and network with thousands of Disrupt attendees, strike up ad hoc conversations in the virtual platform’s chat feature and use CrunchMatch to set up private 1:1 meetings with potential customers, investors or employees.

Watch the Startup Battlefield, explore hundreds of early-stage startups exhibiting in the Startup Alley expo area and take full strategic advantage of the free, three-month Extra Crunch membership that comes with your Founder pass.

Of course, we think attending Disrupt is a no-brainer, but check out what these early-stage founders told us about their Disrupt experiences.

“Disrupt is laser-focused on startups. I’m just starting my own company and attending Disrupt was an incredible opportunity to connect with companies and learn from the best people in the industry.” — Anirudh Murali, co-founder and CEO, Economize.

“My top three benefits of going to Disrupt were introducing my product to people who would not have seen it otherwise; networking with investors, mentors, advisors and potential customers and, finally, talking to other entrepreneurs and founders and learning what it took to get their companies off the ground.” — Felicia Jackson, inventor and founder of CPRWrap.

“Disrupt gave our company and technology invaluable exposure to potential customers and partners that we would not have met otherwise. A company that does 15 billion in annual sales thinks our tech is a fit for their ecosystem, and we’re excited to continue building that relationship.” — Joel Neidig, founder of SIMBA Chain.

Take a few minutes and peruse the Disrupt 2021 agenda. Don’t miss out on Startup Battlefield or any of the pitch feedback sessions — they’re great opportunities to learn what investors look for in a pitch. The pitch(deck) you improve could be your own.

TechCrunch Disrupt 2021 takes place on September 21-23, but time is running out for you to buy a Founder Pass for only $79. Prices go up when the early-bird deal expires on July 30 at 11:59 pm (PT).

Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.

#advisors, #business, #entrepreneurship, #founder, #joel-neidig, #private-equity, #startup-company, #tc, #techcrunch-disrupt-2021

Hyper is a new fund that offers $300k checks and promise of a media slingshot for founders 

Hyper is a $60M early-stage fund co-founded by Josh Buckley, Product Hunt’s CEO along with writer, founder and designer Dustin Curtis. Two ex-Sequoia operators are part of the team at launch as well. Malika Cantor as Partner and GM and Ashton Brown as Head of Program. The fund launches today and is self-described as ‘inspired by the Product Hunt community’. 

The team will be writing $300k checks for 5% of very early companies in any arena that seems promising to the partnership in a fixed deal structure that mirrors Y-Combinator. 

The fund will exist as a ‘sister company’ to Product Hunt (though it’s going to technically own it). Product Hunt, however, is the first of what the team says will be many companies it will own, create and operate in order to provide ‘direct value’ to its portfolio companies. 

I had a chat with Buckley, Curtis and Cantor about the new fund and company and the way that they hoped to differentiate Hyper in a world of aggressively service-oriented venture firms. 

The short version is: distribution. It’s hard to argue with the overall assumption that the Hyper team is working under — capital is majorly commoditized. Frankly, sometimes that’s all you want from an investor whose value add is more of a thorn in your side than anything. But, especially at the early stage there are a few funds and firms that offer a strong value outside of writing checks in the form of, say, hiring, sales introductions or board members that have relevant operational experience. 

Where Hyper differs, says Buckley, is that they see distribution as the biggest value add for a nascent startup at the stages where the firm hopes to invest. Product Hunt is one opportunity that he points to as an example. It’s an established launch pad to an audience of extreme early adopters that can provide a seed of a real user base — Hyper itself is launching via a post on the platform. 

I’ll let the Hyper team’s words spell out what they say is its thesis:

Hyper believes that every company (B2B or B2C) needs access to distribution channels to find customers, users, and talented employees to join their teams. Hyper works with early-stage companies at three key junctures in a startup’s journey:

  • Initial customer acquisition and validation (often at the pre-Seed stage)
  • First product/company launch and hiring (often at the Seed stage)
  • Scaling customer acquisition and fundraising (before the Series A)

Founders who go through the program will remain a part of the tight-knit Hyper founder community long past their Series A.

Over the past few months, Buckley says that Product Hunt has grown headcount by around 50% in part to boost its ability to act as an enhanced distribution channel. 

A short list of some of the people involved as advisors, mentors or investors themselves includes Alexis & Serena Williams, Alfred Lin of Sequoia, Garry Tan of Initialized, Harry Stebbings, Jeffrey Katzenberg, Naval Ravikant, Owen van Natta, Ryan Hoover, Ryan Tedder of OneRepublic and Sriram Krishnan of a16z. 

It’s a pretty eclectic group, but if you squint you can see the shape of the ambitions that Hyper has reflected in the parties involved. A mix of media, venture and product figures is probably the right way to go if you want to back yourself into a media empire funded by venture capital returns. 

They’ll be building additional media products as well, especially ones that focus on areas of hyper growth and high interest in order to both generate deal flow and to feature companies in the portfolio. Interestingly, unlike many marketing-operations-disguised-as-journalistic-enterprises, Curtis says that they want these to be real, functioning media companies and that startups funded by Hyper will be presented on those sites and platforms in clearly defined sections that make it clear that they are part of the program. 

As an example, the team is careful to state that Product Hunt will remain a ‘neutral platform’ for launching products and that Hyper companies will get clearly marked slots on the site. 

Surrounding those placements will be content that is produced by editorial media arms independent of the fund (though, in the end, funded by the profits of the fund). They’re not quite up to giving specifics about how they’re going to power these media properties initially but the funds management fees as well as most of its profits from carry will go towards cultivating the distro side. The other part of the ‘most’ will, one assumes, go to the individual investors. Curtis says that there could be other ways to obtain capital to speed up this process that is allowed by the unique structure of Hyper like debt or equity financing. 

Hyper itself is trying to establish two lines of business. A portfolio of wholly owned companies like Product Hunt (which still counts AngelList as a majority investor and Ravikant on its board) and other new media brands. And the other component which includes the portfolio of Hyper funds (plural theirs) and a founder program that includes mentorship, twice-a-year-events, and other future efforts — eventually. 

The mentorship component that Hyper hopes to add for founders in the fund is an 8-week founder program that includes individuals from “partners” like Andreeessen Horowitz, AngelList, Sequoia Capital, the Twenty Minute VC Podcast and Product Hunt helping founders to solve ‘key challenges’. Some of the participants are investors in Hyper, though none of the funds participated themselves The group includes some close to home figures as well, in Product Hunt GM Ashley Higgins and founder Ryan Hoover.

The program will also offer office hours with experts, an exclusive Product Hunt launch event and a Public Hyper Demo Day and Investor Demo Day to participate in within a year of being in the program.

The Hyper concept sounds fresh in combination, if not in components. An enormous amount of ink has been spilled, for instance, on the spinning up of the VC media apparatus as a bullhorn for a tech-optimism POV. But most of that content is understood to be talking the firm’s book and not intended to be seen as journalism. Though the media publications that Hyper is planning on forming have yet to be realized, there is enough of a differentiating spark here that could make it a unique play that attempts to straddle the worlds of editorial and venture. 

I have thoughts about the way that venture and media interact, as you might imagine given what I do and waves hands at the masthead where we are having this little chat. Combining a media and investing apparatus is not a new concept — as TechCrunch readers will know. But it’s not without its complexities. Enthusiast media that works does so for a couple of major reasons, in my opinion:

  • Genuine obsession with the subject matter. The writers, editors and even business people involved must have a crazy thirst to understand and contextualize the subjects that they write about. There can be no in-between here, as they are speaking every day to an audience that is just as obsessed with it as they are and can detect any level of commitment to it that is less than 100%. 
  • A patina of either trust or candor built over time. You can go into it with some bona-fides that you buy with a big name hire or series of them, and the reputations that they’ve built elsewhere. But if you’re full of shit, you’re going to lose — no matter how well positioned and funded you are. You may ‘win’ long term by turning what you’re doing into something else, a broad interest publication in niche clothing, for instance. But you won’t win at the enthusiast level.
  • An intense, punishing commitment to momentum. The further you delve into any niche, the more knowledgeable your audience will be. This means that you must produce uniquely insightful, crisp, well-researched content every day and you must do it with a level of granularity that surpasses anyone else in your niche. Your audience lives and breathes this stuff so if you’re telling them things they’ve already read on 3 message boards, in private texts or in their work slack then you’ve lost. You’ve got to get subcutaneous and not just superficially so. 

And when you add in a layer of complexity that is proudly announcing your vested interests in the success of particular companies, it just ups the level of difficulty massively. I don’t think that it’s at all impossible to run a fund that feeds a media arm, but it’s definitely a ‘doing a really hard thing while also on fire’ kind of operation.

Which doesn’t mean that Hyper can’t pull it off. Product Hunt is the model for what they’re trying to do, creating close-to-the-ground media that attracts as many operators and investors as it does early adopters. Duplicating that in a variety of publications and events, however, is not easy at all. 

I will say that a bet on distribution as value add is still one of the better stabs that I’ve seen lately. The capital is, as Buckley told me, readily and generically available. And having your calling card be “we can help the first 10, 20 or 30 thousand people know that you even exist” isn’t a bad situation at all. It works.

This is, after all, what we do at TechCrunch, we just don’t take a cut. 

The announcement today is the Hyper the fund, and the fact that they’re opening applications to a small cohort of 25 companies. The applications are planned to open for roughly 4 weeks every quarter and the deadline for this tranche is August 10th, 2021 at midnight PT. The second cohort will open in November 2021. 

The fund is taking applicants worldwide though notes that some countries present legal complexities for investment. 

#advisors, #alfred-lin, #angellist, #ceo, #corporate-finance, #dustin-curtis, #entrepreneurship, #finance, #garry-tan, #harry-stebbings, #head, #horowitz, #hyper, #jeffrey-katzenberg, #josh-buckley, #media, #money, #naval-ravikant, #owen-van-natta, #product-hunt, #ryan-hoover, #sequoia-capital, #sriram-krishnan, #tc, #venture-capital

Family app Life360 announces $2.1M investment round from celebs and influencers

Family communication and tracking app Life360 has announced a new investment round that will see the company bringing on board a number of “celeb” investors and influencers who, combined, will form a new “Family Advisory Council” to help shape Life360’s future product direction and marketing. The round, which is approximately $2.1 million in size, was led by Bryant Stibel, the firm co-founded by the late Kobe Bryant and business partner Jeff Stibel. Others in the round included Vanessa Bryant, Joanna and Chip Gaines, Tony Hawk, Chris and Jada Paul, TikTok influencer Billy Perry, and Nicole and Michael Phelps.

Life360 has traded on the Australian Securities Exchange (ASX) since listing two years ago, so this round is more about bringing on new stakeholders who can also help attract more attention to Life360’s service. The company says it’s currently on track to top $110 million USD in revenue this year for its app now used by over 28 million monthly users across 195+ countries. As of March 2021, 916,000 families are paying for Life360’s service.

The celeb investors along with Life360 will form the Family Advisory Council which will draw on the advisors’ own family experiences to help inform feature developments and shape the future of the product and marketing strategy, Life360 says.

The company has been working to be more responsive to family members’ concerns, as it wants to position its app as something all family members want to use — not just helicopter parents snooping on their kids. In fact, Life360 CEO Chris Hulls took to TikTok last year to listen to teens’ complaints about their lack of privacy, then used that to develop a more privacy-respecting feature called “Bubbles.” The feature shows a bubble around a general location, not a blue dot with an exact location. This is meant to give teens a sense of the freedom they crave, while also helping parents and kids establish better trust.

The new Family Advisory Council could help Life360 streamline similar sorts of input from families, it appears.

“Investing and advising in companies is typically an adult thing, not something you do with your children,” said Hulls, in a statement about the investment. “We’re creating a unique opportunity to advise on a product side by side with your kids. Having the support of these icons speaks volumes to our long term vision to be the leading provider in family safety services. Life360 wants to create a brand that feels meaningful and relevant for both parents and kids. So it’s only natural that we would ask our investors to participate in the same spirit,” he added.

“One of my passions is ensuring children get the opportunities they deserve,” noted new investor, Vanessa Bryant (Kobe’s widow). “Life360 helps families feel safe and protected by making carpooling, pickup and drop-offs easier for parents, while also providing locations at their kids’ schools, activities and sports practices. Having modern tools like driving information, speed and phone usage makes me feel a lot more at ease, especially with my teenage driver. I love the fact that I can see my daughter’s location and speed in a vehicle whether she’s driving or as a passenger,” her statement said.

Though best known for its location services, Life360 has been working to establish itself as more than just a family tracker, given the competition from apps like Find My that now come built into mobile devices, as well as services provided by mobile operators. Today, Life360’s suite of family tools includes those for driving safety, emergency assistance, identity protection, and more.

Earlier this year, Life360 also announced the acquisition of wearable device maker Jiobit to expand its tracking abilities to include family members without phones, like young children and even pet.

That $37 million deal will close in about 30 days, the company tells us.

The addition of the new investors follows Life360’s appointment of Randi Zuckerberg to its Board of Directors earlier this year, and last year’s addition of new C-Suite execs, CFO Russell Burke and CPO Jonathan Benassaya, to focus on the company’s business mode and product offerings, respectively.

#advisors, #apps, #bryant-stibel, #ceo, #cfo, #computing, #funding, #jiobit, #kobe, #kobe-bryant, #life360, #location-services, #michael-phelps, #mobile-applications, #mobile-devices, #randi-zuckerberg, #software, #stalkerware, #tiktok, #tony-hawk

In its first funding in 7 years, profitable fintech Lower raises $100M Series A led by Accel

Lower, an Ohio-based home finance platform, announced today it has raised $100 million in a Series A funding round led by Accel.

This round is notable for a number of reasons. First off, it’s a large Series A even by today’s standards. The financing also marks the previously bootstrapped Lower’s first external round of funding in its seven-year history. Lower is also something that is kind of rare these days in the startup world: profitable. Silicon Valley-based Accel has a history of backing profitable, bootstrapped companies, having also led large Series A rounds for the likes of 1Password, Atlassian, Qualtrics, Webflow, Tenable and Galileo (which went on to be acquired by SoFi). 

In fact, Galileo founder Clay Wilkes introduced the VC firm to Dan Snyder, Lower’s founder and CEO. The two companies have a few things in common besides being profitable: they were both bootstrapped for years before taking institutional capital and both have headquarters outside of Silicon Valley.

“We were immediately intrigued because Ohio-based Lower echoes both of these themes,” said Accel partner John Locke, who led the firm’s investment in Lower and is taking a seat on the company’s board as part of the investment. “Like Galileo, Lower will be one of the most successful bootstrapped fintech companies globally. The combination of a company built in a nontraditional region across the globe and a bootstrapped company reminds us of [other] companies we have partnered with for a large Series A.”

There were other unnamed participants in the round, but Accel provided the “majority” of the investment, according to Lower.

Snyder co-founded Lower in 2014 with the goal of making the homebuying process simpler for consumers. The company launched with Homeside, its retail brand that Snyder describes as “a tech-leveraged retail mortgage bank” that works with realtors and builders, among others. In 2018, the company launched the website for Lower, its direct-to-consumer digital lending brand with the mission of making its platform a one-stop shop where consumers can go online to save for a home, obtain or refinance a mortgage and get insurance through its marketplace. This year, it launched the Lower mobile app with a savings account.

Sitting (L to R): Co-founders Dan Snyder, Grayson Hanes
Standing (L to R): Co-founders Mike Baynes, Chris Miller
Not pictured: Robert Tyson; Image credit: Lower

Over the years, Lower has funded billions of dollars in loans and notched an impressive $300 million in revenue in 2020 after doubling revenue every year, according to Snyder.

“Our history is maybe a little atypical of fintech companies today,” he told TechCrunch. “We’ve had a view going back to the start of the company that we wanted to run it profitably. That’s been one of our pillars, so that’s what we’ve done. Also, we all grew up in the mortgage industry, so we saw firsthand the size of the market, but also how broken it was, so we wanted to change it.”

In launching the direct-to-consumer digital lending brand, the company was working to make the homebuying process more “digital, transparent and easier for consumers to access,” Snyder said.

At the same time, the company didn’t want to lose the human touch.

“We tried to design the app flow in a way where you can get as far along as you can in the application but if you want, at any point in time, to talk or chat with someone, we’re available,” Snyder added.

Image Credits: Lower

Lower’s typical customer is the millennial and now Gen Z who’s aspiring to own their first home, according to Snyder.

“They might be thinking, ‘OK, I might be living in an apartment now, but in the next few years I’m going to meet someone and/or have a child and I want to unlock the investment that is a home,’ ” he told TechCrunch. “And we’ll help them on that journey.”

Lower’s recently launched new app offers a deposit account it’s dubbed “HomeFund.” The interest-bearing FDIC-insured deposit account offers a 0.75% Annual Percentage Yield and is designed to help consumers save for a home with a “dollar-for-dollar match in rewards” up to the first $1,000 saved, Snyder said.

Lower works with more than 35 major insurance carriers nationally, including Nationwide, Liberty Mutual and Allstate. It has more than 1,600 employees, about half of which are based in Lower’s home state. That’s up from about 650 employees in June of 2020.

Looking ahead, the company plans to add more services and has an “aggressive roadmap” for adding new features to its platform. Today, for example, Lower sells primarily to Fannie Mae and Freddie Mac. And while it services the majority of its loans, like many large lenders, it uses a subservicer. That will change, however, in early 2022, when Lower intends to launch its own native servicing platform. 

And while the company intends to continue to run profitably, Snyder said he and his co-founders “think the time is now to gain share.”

“We want to become a global brand, raise money and gain market share,” he added. “We’re going to continue to double down on product and build out our capabilities. We are the best-kept secret in fintech and plan to change that with smart branding, advertising and sponsorships.”

And last but not least, Lower is eyeing the public markets as part of its longer-term roadmap.

“Ultimately, we know we can build a great public company,” Snyder told TechCrunch. “We’re of the scale to be a public company right now, but we’re going to keep our heads down and we’re going to keep building for the next few years and then I think we can be in a spot to be a strong public business.”

Accel’s Locke points out that in the U.S., mortgage and home finance are among the largest financial service markets, and they have primarily been handled by large banks.

“For most consumers, getting a mortgage through these banks continues to be an overly complex, slow-moving process,” Locke told TechCrunch. “We believe by providing consumers a great mobile experience, Lower will gain share from incumbent banks, in the same way that companies like Monzo have in banking or Venmo in payments or Trade Republic and Robinhood in stock trading.” 

#1password, #accel, #advisors, #allstate, #atlassian, #banking, #bootstrapping, #columbus, #computing, #detroit, #fdic, #finance, #funding, #fundings-exits, #john-locke, #liberty-mutual, #lower, #monzo, #ohio, #qualtrics, #quicken-loans, #real-estate, #recent-funding, #silicon-valley, #sofi, #software, #startups, #united-states, #venmo, #venture-capital, #webflow

Atomic-backed Jumpcut uses data to advance diversity in film

Jumpcut founder Kartik Hosanagar is a professor at the Wharton School, but about ten years ago, he spent his summer in an unlikely way: he wrote a screenplay. Set in India, his script garnered some interest from producers, but no one took the plunge to fund a film by a first-time Indian director.

Now, films featuring diverse casts are gaining traction – this year, Chloé Zhao became the first woman of color, and only the second woman ever, to win the Academy Award for Best Director. At the previous ceremony, Bong Joon-ho’s “Parasite” became the first non-English language film to win the Academy Award for Best Picture. Still, according to a recent report from McKinsey & Company, Hollywood leaves $10 billion on the table each year due to the industry’s lack of diversity.

“How do you make a bet on underrepresented voices or underrepresented stories?” asked Hosanagar. “While there’s awareness, there’s no action, because nobody knows how to do it. So that’s what got me into Jumpcut. It’s this rare company where 20 years of my work on data science and entrepreneurship meets with who I am outside of my work.”

At Wharton, Hosanagar is the Faculty Lead for the AI for Business program. He was a founder of Yodle, which was acquired by web.com for $340 million in 2016. But for this next venture, he wanted to tackle Hollywood’s homogeneity hands-on by using his experience with data science to de-risk media projects from underrepresented creators.

“The vision is to create a more inclusive era of global content creation,” he said to TechCrunch.

Hosanagar started working on Jumpcut in 2019, but today, the Atomic-backed company launches out of stealth as the first data science-driven studio working to elevate underrepresented voices in film. Already the studio has 12 TV and film projects in the works with partners like 36-time Academy Award nominee Lawrence Bender (“Pulp Fiction,” “Good Will Hunting”), Emmy Award-winning producer Shelby Stone (“Bessie,” “The Chi”), and showrunner Scott Rosenbaum (“Chuck,” “The Shield”).

Jumpcut models itself after Y-Combinator in its approach, pairing emerging talent with buyers and producers. First, Jumpcut uses an algorithm to scan hundreds of thousands of videos from platforms like YouTube, Reddit, and Wattpad to find promising talent. The algorithm narrows down the extensive field to locate creators who are consistently finding new audiences and increasing their engagement. Then, the Jumpcut team – including advisors and veterans from Netflix, Buzzfeed, CBS, Sony, and WarnerMedia – identifies who to connect with.

In one example of the algorithm’s success, Hosanagar pointed to Anna Hopkins, an actress who has appeared on shows like “The Expanse” and “Shadowhunters.” Though Hopkins has found some success in front of the camera, she also wants to write.

“We discovered some of her short films, and the algorithm identified it because people had strong emotional reactions in the comments, like, ‘heartwarming but in a positive way,’ or ‘give me a tissue,’” Hosanagar explained. Since Hopkins isn’t publicly known as a writer, she assumed that Jumpcut found her through a television network she had pitched a script to, but that wasn’t the case. “We said, ‘no, our algorithms found you.’”

Once a creator is identified by Jumpcut, they can A/B test their ideas with audiences of over 100,000 potential viewers, which helps the company prove to funders through data science that these ideas can sell.

“The idea there is that we don’t wait for creators to get discovered by the traditional Hollywood agencies, because that requires the creators to have access to the top agents, and that again brings you back to the old boys club,” Hosanagar said. “We’re automating a lot of that process and discovering these people who are creating great stories that are resonating with audiences, not waiting for some Hollywood agency to discover them.”

Once the creators have an idea that tests well with a wide audience, they’re invited to Jumpcut Collective, an incubator program that helps artists develop an idea from a concept to a pitch in 6 weeks. Then, Jumpcut helps match projects with producing partners and buyers.

So far, Jumpcut has hosted three incubator programs. Out of the twelve Jumpcut projects currently underway, Hosanagar says that nine or ten of them came out of the incubator. One project, for example, is now being developed in partnership with Disney’s Asia Pacific Division.

Jumpcut isn’t disclosing the amount raised in this round of seed funding, but confirms that Atomic is the only investor in their seed round.

Hosanagar is joined on the project by Dilip Rajan, his former student and a former product manager at BuzzFeed, and Winnie Kemp, a former SVP of Originals at Super Deluxe and CBS. There, she developed and executive produced “Chambers,” the first show with a Native American lead, and “This Close,” the first show with deaf creators and cast. Most of their funding will go toward payroll, which includes engineers, data scientists, and product managers on the product side of the company, as well as development executives on the creative side, who run the incubator.

#actress, #advisors, #artificial-intelligence, #atomic, #buzzfeed, #chuck, #director, #disney, #executive, #founder, #funding, #hollywood, #india, #jumpcut, #media, #netflix, #producer, #product-manager, #sony, #startups, #svp, #tc, #warnermedia, #wattpad, #writer, #youtube

Mythical Games raises $75M to build an NFT game engine

Even as NFT sales dip below their most speculative highs, startups aiming to tap into their potential are still scoring big funding rounds from investors who believe there’s much more to crypto collectibles than the past few months of hype.

Mythical Games, an NFT games startup based out of Los Angeles, has banked a $75 million raise from new and existing investors betting on the startup’s aim to expand the ambitions of their first title and locate a substantial platform opportunity amid helping developers build blockchain-based gaming experiences.

The round was led by WestCap. Existing investors were joined by 01 Advisors, Bilibili, Gary Vaynerchuk, the Glazer family, Moore Capital, and Redbird Capital in the Series B funding. The startup has raised a whopping $120 million to date.

The company has been building a title called Blankos Block Party that seems to be Fall Guys meets Roblox meets Funko Pop. The PC game capitalizes on a number of big social gaming trends around user-created content, while adding in a marketplace where users can buy avatar figures and accessories crafted by a variety of artists and designers that Mythical has partnered with. Users can buy or sell the limited run or open edition items through their marketplace. Unlike some other NFT platforms, the goods live on a private blockchain so they can’t be re-sold on public marketplace platforms like OpenSea.

Mythical Games is part of a growing movement to bring blockchain-based game mechanics mainstream while leaving behind elements of crypto platforms that are seen as less ready for primetime. Users can purchase avatars on the platform with cryptocurrency through BitPay but they can also pay with a credit card. Users don’t need to walk through the mechanics of setting up a wallet or writing down a seed phrase either.

While the company has big hopes for Blankos as it onboards more users, the bigger investor opportunity is likely in the game engine that the team is building. The startup’s “Mythical Economic Engine” is being designed to help budding game builders create NFT-based marketplaces that won’t get them in any regulatory trouble, marrying compliance across geographies and tools that help creators comply with anti-money laundering laws and know-your-customer frameworks.

“With any new market like [NFTs], it goes through all these different cycles,” Mythical Games CEO John Linden tells TechCrunch. “We think this will actually change gaming for the long haul. The more we talk to game studios, we’re finding more and more potential use cases.”

#advisors, #articles, #bilibili, #bitpay, #blockchain, #ceo, #computing, #cryptocurrencies, #cryptocurrency, #decentralization, #financial-technology, #funko, #gary-vaynerchuk, #los-angeles, #roblox, #tc, #technology, #westcap

Amid controversy, Dispo confirms Series A funding, high-profile advisors, and investors

It’s only been nine months since Dispo rebranded from David’s Disposables. But the vintage-inspired photo sharing app has experienced a whiplash of ups and downs, mostly due to the brand’s original namesake, YouTuber David Dobrik.

Like Clubhouse, Dispo was one of this year’s most hyped up new social apps, requiring an invite from an existing member to join. On March 9, when the company said “goodbye waitlist” and opened the app up to any iOS user, Dispo looked poised to be a worthy competitor to photo-sharing behemoths like Instagram. But, just one week later, Business Insider reported on sexual assault allegations regarding a member of Vlog Squad, a YouTube prank ensemble headed by Dispo co-founder David Dobrik. Dobrik had posted a now-deleted vlog about the night of the alleged assault, joking, “we’re all going to jail” at the end of the video.

It was only after venture capital firm Spark Capital decided to “sever all ties” with Dispo that Dobrik stepped down from the company board. In a statement made to TechCrunch at the time, Dispo said, “Dispo’s team, product, and most importantly — our community — stand for building a diverse, inclusive and empowering world.”

Dispo capitalizes on Gen Z and young millennial nostalgia for a time before digital photography, when we couldn’t take thirty selfies before choosing which one to post. On Dispo, when you take a photo, you have to wait until 9 AM the following day for the image to “develop,” and only then can you view and share it.

In both February and March of this year, the app hit the top ten of the Photo & Video category in the U.S. App Store. Despite the backlash against Dobrik, which resulted in the app’s product page being bombarded with negative comments, the app still hit the top ten in Germany, Japan, and Brazil, according to their press release. Dispo reportedly has not yet expended any international marketing resources.

Now, early investors in Dispo like Spark Capital, Seven Seven Six, and Unshackled have committed to donate any potential profits from their investment in the app to organizations working with survivors of sexual assault. Though Axios reported the app’s $20M Series A funding news in February, Dispo put out a press release this morning confirming the financing event. Though Seven Seven Six and Unshackled Ventures intend to donate profits from the app, they remain listed as investors, while Spark Capital is not. Other notable names involved in the project include high-profile photographers like Annie Leibovitz and Raven B. Varona, who has worked with artists like Beyoncé and Jay-Z. Actresses Cara Delevingne and Sofía Vergara, as well as NBA superstars Kevin Durant and Andre Iguodala, are also involved with the app as investors or advisors.

Dobrik’s role in the company was largely as a marketer – CEO Daniel Liss co-founded the app with Dobrik and has been leading the team since the beginning. After Dobrik’s departure, the Dispo team – which remains under twenty members strong – took a break from communications and product updates on the app. It’s expected that after today’s funding confirmation, the app will continue to roll out updates.

Dispo is quick to shift focus to the work of their team, which they call “some of the most talented, diverse leaders in consumer tech.” With the capital from this funding round, they hope to hire more staff to become more competitive with major social media apps with expansive teams, like Instagram and TikTok, and to experiment with machine learning. They will also likely have some serious marketing to do, now that their attempt at influencer marketing has failed massively.

Now more than ever, Dispo is promoting the app as a mental health benefit, hoping to shift the tide away from manufactured perfectionism toward more authentic social media experiences.

“A new era of start ups must emerge to end the scourge of big tech’s destruction of our political fabric and willful ignorance of its impact on body dysmorphia and mental health,” CEO Daniel Liss writes in a Substack post titled Dispo 2.0. “Imagine a world where Dispo is the social network of choice for every teen and college student in the world. How different a world would that be?”

But, for an app that propelled to success off the fame of a YouTuber with a history of less than savory behavior, that messaging might fall flat.

According to Sensor Tower, the highest Dispo has ever ranked in the Photo & Video category on the U.S. App Store was in January 2020, when it was still called David’s Disposables. The app ranked No. 1 in that category from January 7 to January 9, and on January 8, it reached No. 1 among all free iPhone apps.

#advisors, #andre-iguodala, #annie-leibovitz, #app-store, #apps, #brazil, #ceo, #co-founder, #computing, #david-dobrik, #digital-photography, #dispo, #freeware, #germany, #instagram, #internet-culture, #japan, #kevin-durant, #mobile-applications, #national-basketball-association, #nba, #social-media, #software, #spark-capital, #techcrunch, #united-states, #unshackled-ventures, #venture-capital, #world-wide-web

SpotOn raises $125M in a16z-led Series D, triples valuation to $1.875B

Certain industries were hit harder by the COVID-19 pandemic than others, especially in its early days.

Small businesses, including retailers and restaurants, were negatively impacted by lockdowns and the resulting closures. They had to adapt quickly to survive. If they didn’t use much technology before, they were suddenly being forced to, as so many things shifted to digital last year in response to the COVID-19 pandemic. For companies like SpotOn, it was a pivotal moment. 

The startup, which provides software and payments for restaurants and SMBs, had to step up to help the businesses it serves. Not only for their sake, but its own.

“We really took a hard look at what was happening to our clients. And we realized we needed to pivot, just to be able to support them,” co-CEO and co-founder Matt Hyman recalls. “We had to make a decision because our revenues also were taking a big hit, just like our clients were. Rather than lay off staff or require salary deductions, we stayed true to our core values and just kept plugging away.”

All that “plugging away” has paid off. Today, SpotOn announced it has achieved unicorn status with a $125 million Series D funding round led by Andreessen Horowitz (a16z).

Existing backers DST Global, 01 Advisors, Dragoneer Investment Group and Franklin Templeton also participated in the financing, in addition to new investor Mubadala Investment Company. 

Notably, the round triples the company’s valuation to $1.875 billion compared to its $625 million valuation at the time of its Series C raise last September. It also marks San Francisco-based SpotOn’s third funding event since March 2020, and brings the startup’s total funding to $328 million since its 2017 inception.

Its efforts have also led to impressive growth for the company, which has seen its revenue triple since February 2020, according to Hyman.

Put simply, SpotOn is taking on the likes of Square in the payments space. But the company says its offering extends beyond traditional payment processing and point-of-sale (POS) software. Its platform aims to give SMBs the ability to run their businesses “from building a brand to taking payments and everything in-between.” SpotOn’s goal is to be a “one-stop shop” by incorporating tools that include things such as custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital loyalty.

When the pandemic hit, SpotOn ramped up and rolled out 400 “new product innovations,” Hyman said. It also did things like waive $1.5 million in fees (it’s a SaaS business, so for several months it waived its monthly fee, for example, for its integrated restaurant management system). It also acquired a company, SeatNinja, so that it could expand its offering.

“Because a lot of these businesses had to go digital literally overnight, we built a free website for them all,” Hyman said. SpotOn also did things like offer commission-free online ordering for restaurants and helped retail merchants update their websites for e-commerce. “Obviously these businesses were resilient,” Hyman said. “But such efforts also created a lot of loyalty.” 

Today, more than 30,000 businesses use SpotOn’s platform, according to Hyman, with nearly 8,000 of those signing on this year. The company expects that number to triple by year’s end.

Currently, its customers are split about 60% retail and 40% restaurants, but the restaurant side of its business is growing rapidly, according to Hyman.

The reason for that, the company believes, is while restaurants initially rushed to add online ordering for delivery or curbside pickup, they soon realized they “wanted a more affordable and more integrated solution.”

Image Credits: SpotOn co-founders Zach Hyman, Doron Friedman and Matt Hyman / SpotOn

What makes SpotOn so appealing to its customers, Hyman said, is the fact that it offers an integrated platform so that businesses that use it can save “thousands of dollars” in payments and software fees to multiple, “à la carte” vendors. But it also can integrate with other platforms if needed.

In addition to growing its customer base and revenue, SpotOn has also boosted its headcount to about 1,250 employees (from 850 in March of 2020). Those employees are spread across its offices in San Francisco, Chicago, Detroit, Denver, Mexico City, Mexico and Krakow, Poland.

SpotOn is not currently profitable, which Hyman says is “by choice.”

“We could be cash flow positive technically whenever we choose to be. Right now we’re just so focused on product innovation and talent to exceed the needs of our clients,” he said. “We chose the capital plan so that we could really just double down on what’s working so well.”

The new capital will go toward further accelerating product development and expanding its market presence.

“We’re doubling down on our single integrated restaurant management system,” Hyman said. 

The raise marks the first time that a16z has put money in the startup, although General Partner David George told TechCrunch he was familiar with co-founders Matt Hyman and Zach Hyman through mutual friends.

George estimates that about 80% of restaurants and SMBs use legacy solutions “that are clunky and outdated, and not very customer friendly.” The COVID-19 pandemic has led to more of these businesses seeking digital options.

“We think we’re in the very early days in the transition [to digital], and the opportunity is massive,” he told TechCrunch. “We believe we’re at the tipping point of a big tech replacement cycle for restaurant and small business software, and at the very early stages of this transition to modern cloud-native solutions.”

George was also effusive in his praise for how SpotOn has executed over the past 14 months.

“There are companies that build great products, and companies that can build great sales teams. And there are companies that offer really great customer service,” he said. “It’s rare that you find two of those and extremely rare to find all three of those as we have in SpotOn.”

#advisors, #andreessen-horowitz, #business-software, #chicago, #cloud, #denver, #detroit, #dragoneer-investment-group, #dst-global, #e-commerce, #finance, #fintech, #franklin-templeton, #fundings-exits, #krakow, #mexico, #mexico-city, #mubadala-investment-company, #olo, #payment-processing, #payments, #point-of-sale, #poland, #recent-funding, #saas, #san-francisco, #series-c, #spoton, #startup, #startups, #tc, #venture-capital

Skiff, an end-to-end encrypted alternative to Google Docs, raises $3.7M seed

Imagine if Google Docs was end-to-end encrypted so that not even Google could access your documents. That’s Skiff, in a nutshell.

Skiff is a document editor with a similar look and feel to Google Docs, allowing you to write, edit and collaborate in real-time with colleagues with privacy baked in. Because the document editor is built on a foundation of end-to-end encryption, Skiff doesn’t have access to anyone’s documents — only users, and those who are invited to collaborate, do.

It’s an idea that has already attracted the attention of investors. Skiff’s co-founders Andrew Milich (CEO) and Jason Ginsberg (CTO) announced today that the startup has raised $3.7 million in seed funding from venture firm Sequoia Capital, just over a year since Skiff was founded in March 2020. Alphabet chairman John Hennessy, former Yahoo chief executive Jerry Yang, and Eventbrite co-founders Julia and Kevin Hartz also participated in the round.

Milich and Ginsberg told TechCrunch that the company will use the seed funding to grow the team and build out the platform.

Skiff isn’t that much different from WhatsApp or Signal, which are also end-to-end encrypted, underneath its document editor. “Instead of using it to send messages to a bunch of people, we’re using it to send little pieces of documents and then piecing those together into a collaborative workspace,” said Milich.

But the co-founders acknowledged that putting your sensitive documents in the cloud requires users to put a lot of trust into the startup, particularly one that hasn’t been around for long. That’s why Skiff published a whitepaper with technical details of how its technology works, and has begun to open source parts of its code, allowing anyone to see how the platform works. Milich said Skiff has also gone through at least one comprehensive security audit, and the company counts advisors from the Signal Foundation to Trail of Bits.

It seems to be working. In the months since Skiff soft-launched through an invite-only program, thousands of users — including journalists, research scientists and human rights lawyers — use Skiff every day, with another 8,000 users on a waitlist.

“The group of users that we’re most excited about are just regular people that care about privacy,” said Ginsberg. “There are just so many privacy communities and people that are advocates for these types of products that really care about how they’re built and have sort of lost trust in big companies.”

“They’re using us because they’re really excited about the vision and the future of end-to-end encryption,” he said.

#advisors, #alphabet, #ceo, #cryptography, #cto, #encryption, #end-to-end-encryption, #eventbrite, #google, #google-allo, #google-docs, #jerry-yang, #john-hennessy, #kevin-hartz, #operating-systems, #security, #sequoia-capital, #signal-foundation, #skiff, #software, #startups, #technology, #yahoo

Collective, a back-office for the self-employed, raises $20M from Ashton Kutcher’s VC

With so much focus on the ‘creator economy’, and countries hit by the effects of the pandemic, the self-employed market is ‘booming’, for good or for ill. So it’s not too much of a surprise that
Collective,a subscription-based back-office for the self-employed has raised a $20 million Series A funding after launching only late last year.

The round was led by General Catalyst and joined by Sound Ventures (the venture capital fund founded by Ashton Kutcher and Guy Oseary). Collective has now raised a total of $28.65 million. Other notable investors include: Steve Chen (Founder YouTube), Hamish McKenzie (Founder Substack), Aaron Levie (founder Box), Kevin Lin (founder Twitch), Sam Yam (founder Patreon), Li Jin (Atelier Ventures), Shadiah Sigala (founder HoneyBook), Adrian Aoun (founder Forward), Holly Liu (founder Kabam), Andrew Dudum (founder Hims) and Edward Hartman (founder LegalZoom).

Ashton Kutcher said in a statement: “We’re proud to be supporting a company that’s making it easier for creators to focus on what they do best by taking care of the back office work that creates so much friction for so many early entrepreneurs. I would have loved something like this when I was getting started.”

Launched in September 2020 by CEO Hooman Radfar, CPO Ugur Kaner and CTO Bugra Akcay, Collective offers “tailored” financial services, access to advisors that oversee accounting, tax, bookkeeping, and business formation needs. There are currently 59 million self-employed workers in the U.S. (36% of US workforce) who mostly do all their own admin. So Collective hopes to be their online back office platform.

Speaking to me over email, Radfar said that the start-up fintech market tends to serve companies like them – other start-ups and growing SMBs: “Companies like Pilot have done an amazing job at building a back-office platform that handles taxes, bookkeeping and finances for start-ups. We want to offer that same great value to the underserved business-of-one community, since they are the largest group of founders in the country.”

He added: “Before Collective, consultants, freelancers, and other solo founders had to string together their back-office solution using DIY platforms like Quickbooks, Gusto, and LegalZoom. If they were lucky, they had the help of a part-time accountant to advise them. Collective makes handling finances easy with the first all-in-one platform that not only bundles these tools into one platform, but also provides the technology and team to optimize their tax savings like the pros.”

According to some estimates, the number of lone freelancers in the US is projected to make up 86.5 million, 50% of the US workforce by 2027, with the freelancer space projected to grow three times faster than the traditional workforce.

Niko Bonatsos, Managing Director of General Catalyst said: “Collective is serving the $1.2 trillion business-of-one industry by building the first back-office platform that saves individuals significant time and money, while providing them with the appropriate tools and resources they need to help them succeed,” said “We’re excited to support Collective as they expand their team and build an exceptional service for the business-of-one community.”

#aaron-levie, #adrian-aoun, #advisors, #andrew-dudum, #ashton-kutcher, #atelier-ventures, #ceo, #collective, #cto, #finance, #financial-services, #freelancer, #general-catalyst, #guy-oseary, #hamish-mckenzie, #hooman-radfar, #kabam, #kevin-lin, #legalzoom, #li-jin, #niko-bonatsos, #pilot, #quickbooks, #sam-yam, #sound-ventures, #steve-chen, #tc, #twitch, #united-states, #upwork

For M&A success, tap legal early and often

While mergers and acquisitions may be the right strategic path for many businesses, organizations tend to underestimate the role in-house legal teams play in a large-scale strategic transaction until the company is firmly entrenched in a deal.

While the CEO and board might fully appreciate the counsel of the legal team, the ability of the legal team to earn the support of the business — from product and development to marketing and HR — is critical to a smooth, efficient closing and post-close integration process.

Your in-house legal team should be held accountable for catching things specific to your business that outside attorneys will miss.

Having been on the inside of M&A transactions, here are a few insights that I recommend any executive team considering a major strategic transaction keep in mind when working with, and setting expectations for, the in-house legal function as the deal moves from business agreement to closing and through integration.

Is this the right transaction to move the business forward?

When you’re thinking of M&A (or any other type of strategic transaction, for that matter), it is critical to understand why you’re pursuing a deal and what the potential implications (both good and bad) may be for the business at large.

As the executive or founding team, have you agreed that doing the deal is the best way to further the overall strategic business objectives? Is the proposed deal allowing the company to scale more rapidly or efficiently? Does the transaction provide for a more diversified, complementary product offering?

After settling that the deal is the best way to achieve the overall business objective, the next focus is on execution. How will the resulting leadership bring together the two organizations? Do you have a plan on how to go from closing the transaction to successfully moving forward with the strategic purposes for doing the transaction in the first place? Is there agreement on product direction, go-to-market strategies, staffing, company culture, etc.?

These high-level discussions are important to have while evaluating a potential deal, and bringing in your internal legal leadership is critical in these early phases. You may identify during these early discussions aspects that are critical for the deal to be a success, and being sure your legal team is aware of these aspects allows the team to anticipate post-closing issues and resolve them proactively with the structure of the deal or by explicitly calling out critical obligations of each party.

Your in-house legal team should be held accountable for catching things specific to your business that outside attorneys will miss. Outside attorneys are experts in M&A or IPOs or venture financings or whatever else, but your in-house lawyers are experts in your company — that’s the true value of having an in-house team.

#advisors, #business-process-management, #column, #ec-column, #ec-how-to, #human-resource-management, #lawyer, #ma, #mergers-and-acquisitions, #tc

HoneyBook raises $155M at $1B+ valuation to help SMBs, freelancers manage their businesses

HoneyBook, which has built out a client experience and financial management platform for service-based small businesses and freelancers, announced today that it has raised $155 million in a Series D round led by Durable Capital Partners LP.

Tiger Global Management, Battery Ventures, Zeev Ventures, 01 Advisors as well as existing backers Norwest Venture Partners and Citi Ventures also participated in the financing, which brings the New York-based company’s valuation to over $1 billion. With the latest round, HoneyBook has now raised $215 million since its 2013 inception. The Series D is a big jump from the $28 million that HoneyBook raised in March 2019. 

When the COVID-19 pandemic hit last year, HoneyBook’s leadership team was concerned about the potential impact on their business and braced themselves for a drop in revenue.

Rather than lay off people, they instead asked everyone to take a pay cut, and that included the executive team, who cut theirs “by double” the rest of the staff.

“I remember it was terrifying. We knew that our customers’ businesses were going to be impacted dramatically, and would impact ours at the same time dramatically,” recalls CEO Oz Alon. “We had to make some hard decisions.”

But the resilience of HoneyBook’s customer base surprised even the company, who ended up reinstating those salaries just a few months later. And, as corporate layoffs driven by the COVID-19 pandemic led to more people deciding to start their own businesses, HoneyBook saw a big surge in demand.

“Our members who saw a hit in demand went out and found demand in another thing,” Oz said. As a result, HoneyBook ended up doubling its number of members on its SaaS platform and tripling its annual recurring revenue (ARR) over the past 12 months. Members booked more than $1 billion in business on the platform in the past nine months alone. 

HoneyBook combines tools like billing, contracts, and client communication on its platform with the goal of helping business owners stay organized. Since its inception, service providers across the U.S. and Canada such as graphic designers, event planners, digital marketers and photographers have booked more than $3 billion in business on its platform. And as the pandemic had more people shift to doing more things online, HoneyBook prepared to help its members adapt by being armed with digital tools.

Image Credits: HoneyBook

“Clients now expect streamlined communication, seamless payments, and the same level of exceptional service online, that they were used to receiving from business owners in person,” Alon said.

Oz and co-founder/wife, Naama, were both small business owners themselves at one time, so they had firsthand insight on the pain points of running a service-based business. 

HoneyBook’s software not only helps SMBs do more business, but helps them “convert potentials to actual clients,” Oz said.

“We help them communicate with potential clients so they can win their business, and then help them manage the relationship so they can keep them,” Naama said.

The company plans to use its new capital toward continued product development and to “dramatically” boost its 103-person headcount across its New York and Tel Aviv offices.

“We’re seeing so much demand for additional services and products, so we definitely want to invest and create better ways for our members to present themselves online,” Alon told TechCrunch. “We’re also seeing demand for financial products and the ability to access capital faster. So that’s just a few of the things we plan to invest in.”

The company also wants to make its platform “more customizable” for different categories and verticals.

Chelsea Stoner, general partner at Battery Ventures, said her firm recognized that the expansive market of productivity tools to serve small businesses and entrepreneurs was “a market of discrete and separate productivity tools.”

HoneyBook, she said, is a true platform for SMBs, “providing a huge array of functionality in one cohesive UX.”

“It unites and connects every task for the solopreneurs, from creating and distributing marketing collateral, to organizing and executing proposals, to sending invoices and collecting payments,” Stoner said. “The company is constantly innovating and iterating in response to its members; we also see a lot of opportunity with payments going forward…And, due to Covid-19 and other factors, the company is sitting on pent-up demand that will accelerate growth even more.”

#advisors, #articles, #battery-ventures, #business, #business-models, #canada, #ceo, #chelsea-stoner, #citi-ventures, #co-founder, #economy, #entrepreneurship, #executive, #funding, #fundings-exits, #general-partner, #honeybook, #new-york, #norwest-venture-partners, #payments, #productivity-tools, #recent-funding, #saas, #small-business, #startups, #tel-aviv, #tiger-global-management, #united-states, #venture-capital, #zeev-ventures

Kaya VC launches its new $80M fund, focusing on Prague, Warsaw and the CEE region

Kaya VC’s new €72 million ($80m) fund will focus on startups in Prague, Warsaw and the wider CEE region. Previously called Enern, the Central and Eastern European VC — which, historically, started out investing in wind-farms and ended up invested in software — has changed its name to better reflect its modern focus. The firm will also back startups “at any stage” of funding. LPs in the fund include the EIF and a number of successful entrepreneurs from the region.

This is the team’s fourth fund, and together with the previous funds, the AUM is around €250m. The fund has invested in 27 companies with the latest investments into B2B marketplaces, healthtech and blockchain. 

The decade-old Prague-based VC (“KAYA” will be the official naming format) has previously invested in Booksy (raised $70 million in January 2021), Twisto (€16 million this year), DocPlanner (€80m in 2019), and Rohlik ($230m this year). Kaya previously participated in liquidity events for Skype, Wise (formerly TransferWise) and Bolt, UiPath which recently raised $750 million at a $35 billion valuation ahead of an IPO.

Kaya says it will be sector agnostic, with partners following some personal passions: Tomas Obrtac on agri-tech; Pavel Mucha on next-generation consumer experiences; Tomas Pacinda on fintech, and Martin Rajcan focuses on energy transition. All other areas of tech will be looked at. Similar to funds such as Point Nine in Berlin, Kaya says it is an ‘equal partnership’ meaning each partner can make decisions on what to back.

The firm plans to be able to write the first cheque and is also backing super-early ‘studio projects’ which have gone on to raise subsequent funding rounds.

Pavel Mucha, partner at Kaya VC, commented in a statement: “When I initially started investing in local startups in Prague and Warsaw, it was because there was a need to work with people to build something valuable that didn’t exist already. Over the past 10 years, we’ve seen this sector grow and mature, and with that our strategy of backing intrepid founders who are making a difference from Booksy’s Stefan Batory to Rohlik’s Tomáš Čupr.”

Kaya is also part of the Included VC, network, a mentor network for underrepresented groups such as women and people of color. Mucha told me: “We’ve hired through their program, been closely involved and big supporters. We think it’s a great addition to the ecosystem within Europe, and hope to do more. It’s definitely a very meaningful initiative we stand fully behind.”

Martin Rajcan, partner at Kaya VC, added: “Founders coming out of Central and Eastern Europe are globally-orientated, have strong technical skills, and an unmatched hunger for success. It’s these strong fundamentals paired with a next-level intensity that makes them so exciting to work with and we want to support such talent in any way we can. With partners, venture partners, advisors, and scouts across Europe, we’re in a unique position to support founders in the diaspora outside of core cities such as Prague and Warsaw.” 

In Turkish the word Kaya means ‘rock’, in Japanese, it’s ‘sanctuary’. Whatever the case, Kaya is in a good position to take advantage of the burgeoning startups in the CEE region. According to Dealroom there has been 5x more foreign investment in the CEE region than in 2015.

#advisors, #berlin, #central-europe, #eastern-europe, #entrepreneurship, #europe, #point-nine, #prague, #private-equity, #startup-company, #tc, #warsaw

Atlanta’s early stage investment renaissance continues with Overline’s $27 million fund close

Michael Cohn became a celebrity in the Atlanta startup ecosystem when the company he co-founded was sold to Accenture in a deal valued somewhere between $350 million and $400 million nearly six years ago.

That same year, Sean O’Brien also made waves in the community when he helped shepherd the sale of the  collaboration software vendor, PGi, to a private equity firm for $1.5 billion.

The two men are now looking to become fixtures in the city’s burgeoning new tech community with the close of their seed-stage venture capital firm’s first fund, a $27.4 million investment vehicle.

Overline’s first fund has already made commitments to companies that are expanding the parameters of what’s investible in the Southeast broadly and Atlanta’s startup scene locally.

These are companies like Grubbly Farms, which sells insect-based chicken feed for backyard farmers, or Kayhan Space, which is aiming to be the air traffic control service for the space industry. Others, like Padsplit, an Atlanta-based flexible housing marketplace, are tackling America’s low income housing crisis. 

“Our business model is very different from that of a traditional software startup, and the Overline team’s unique strengths and operator mindset have been invaluable in helping us grow the company,” said Sean Warner, CEO and co-founder of Grubbly Farms. 

That’s on top of investments into companies building on Atlanta’s natural strengths as a financial services, payments and business software powerhouse.

For all of the activity in Atlanta these days, the city and the broader southeastern region is still massively underfunded, according to O’brien and Cohn. The region only received less than 10 percent of all the institutional venture investments that were committed in 2020. Indeed, only seven percent of Atlanta founders raise money locally when they’re first starting out, an Overline survey suggested.

“The data reflects what we have seen throughout our careers building, growing, and investing in startups. There is no shortage of phenomenal founders and businesses coming out of Atlanta and the Southeast, but they often struggle to find institutional capital at their earliest stages,” said O’Brien, in a statement. “Overline will lead as the first institutional check for these companies and be a true partner to the Founders throughout their lifecycle—supporting them on the strategic and operational business initiatives and decisions that are critical to a company’s success.” 

The limited partners in Overline’s first fund also reflects the firm’s emphasis on regional roots. The privately held email marketing behemoth Mailchimp anchored the fund, which also included partners like Cox Enterprises, Social Leverage,

Overline is supported by a bench of impressive partners that reflects the firm’s roots in the Southeast. Anchored by marketing platform, Mailchimp, additional partners include Cox Enterprises, Scottsdale, Ariz.-based Social Leverage, Wilmington, Del.-based Hallett Capital, and Atlanta Tech Village founder David Cummings, along with Techstars co-founder David Cohen. 

“At Mailchimp, we love our hometown of Atlanta, and are proud of the robust startup ecosystem that’s growing in our city. The Overline founding team’s vision of deploying smart, local capital into startups in Atlanta and the Southeast aligns with our goals of promoting and advancing local innovation,” said Rick Lynch, CFO, Mailchimp, in a statement.

The firm expects to make investments of between $250,000 to $1.5 million into seed stage companies and has already backed 11 companies including, Relay Payments, a logistics fintech company that has raised over $40 million from top-tier investors. 

“When we set out to build Atlanta Tech Village almost a decade ago, one of our primary goals was to help Atlanta develop into a top 10 startup city, where all entrepreneurs would thrive. We’re making tremendous strides as a community, as evidenced by the number of newly minted unicorns,” said serial entrepreneur and Atlanta Tech Village founder David Cummings. “I believe in Overline’s thesis that value-add institutional early-stage capital is critical to the ecosystem’s continued development. Since the early days, Michael and Sean have been an active presence in our community in a way that goes far beyond being a source of capital—as mentors, advisors, and champions of Atlanta founders. I am proud to be one of their first investors.”

#accenture, #advisors, #america, #arizona, #atlanta, #cfo, #co-founder, #collaboration-software, #corporate-finance, #cox-enterprises, #david-cohen, #delaware, #economy, #entrepreneurship, #finance, #financial-services, #mailchimp, #money, #private-equity, #serial-entrepreneur, #social-leverage, #startup-company, #tc, #techstars, #venture-capital

Better Health raises $3.5M seed round to reinvent medical supply shopping through e-commerce

The home medical supply market in the U.S. is significant and growing, but the way that Americans go about getting much-needed medical supplies, particularly for those with chronic conditions, relies on outdated and clumsy sales mechanisms that often have very poor customer experiences. New startup Better Health aims to change that, with an e-commerce approach to serving customers in need of medical supplies for chronic conditions, and it has raised $3.5 million in a new seed round to pursue its goals.

Better Health estimates the total value of the home medical supplies market in the U.S., which covers all reimbursable devices and supplies needed for chronic conditions, including things like colostomy bags, catheters, mobility aids, insulin pumps and more, is around $60 billion annually. But the market is obviously a specialized one relative to other specialized goods businesses, in part because it requires working not only with customers who make the final decisions about what supplies to use, but also payers, who typically foot the bill through insurance reimbursements.

The other challenge is that individuals with chronic care needs often require a lot of guidance and support when making the decision about what equipment and supplies to select — and the choices they make can have a significant impact on quality of life. Better Health co-founder and CEO Naama Stauber Breckler explained how she came to identify the problems in the industry, and why she set out to address them.

“The first company I started was right out of school, it’s called CompactCath,” she explained in an interview. “We created a novel intermittent catheter, because we identified that there’s a gap in the existing options for people with chronic bladder issues that need to use a catheter on a day-to-day basis […] In the process of bringing it to market, I was exposed to the medical devices and supplies industry. I was just shocked when I realized how hard it is for people today to get life-saving medical supplies, and basically realized that it’s not just about inventing a better product, there’s kind of a bigger systematic problem that locks consumer choice, and also prevents innovation in the space.”

Stauber Breckler’s founding story isn’t too dissimilar from the founding story of another e-commerce pioneer: Shopify. The now-public heavyweight originally got started when founder Tobi Lütke, himself a software engineer like Stauber Breckler, found that the available options for running his online snowboard store were poorly designed and built. With Better Health, she’s created a marketplace, rather than a platform like Shopify, but the pain points and desire to address the problem at a more fundamental level are the same.

Better Health Head of Product Adam Breckler, left, and CEO Naama Stauber Breckler, right

With CompactCath, she said they ended up having to build their own direct-to-consumer marketing and sales product, and through that process, they ended up talking to thousands of customers with chronic conditions about their experiences, and what they found exposed the extend of the problems in the existing market.

“We kept hearing the same stories again, and again — it’s hard to find the right supplier, often it’s a local store, the process is extremely manual and lengthy and prone to errors, they get the surprise bills they weren’t expecting,” Stauber Breckler said. “But mostly, it’s just that there is this really sharp drop in care, from the time that you have a surgery or you were diagnosed, to when you need to now start using this device, when you’re essentially left at home and are given a general prescription.”

Unlike in the prescription drug market, where your choices essentially amount to whether you pick the brand name or the generic, and the outcome is pretty much the same regardless, in medical supplies which solution you choose can have a dramatically different effect on your experience. Customers might not be aware, for example, that something like CompactCath exists, and would instead chose a different catheter option that limits their mobility because of how frequently it needs changing and how intensive the process is. Physicians and medical professionals also might not be the best to advise them on their choice, because while they’ve obviously seen patients with these conditions, they generally haven’t lived with them themselves.

“We have talked to people who tell us, ‘I’ve had an ostomy for 19 years, and this is the first time I don’t have constant leakages’ or someone who had been using a catheter for three years and hasn’t left her house for more than two hours, because they didn’t feel comfortable with the product that they had to use it in a public restroom,” Stauber Breckler said. “So they told us things like ‘I finally went to visit my parents, they live in a town three hours away.’”

Better Health can provide this kind fo clarity to customers because it employs advisors who can talk patients through the equipment selection process with one-to-one coaching and product use education. The startup also helps with navigating the insurance side, managing paperwork, estimating costs and even arguing the case for a specific piece of equipment in case of difficulty getting the claim approved. The company leverages peers who have first-hand experience with the chronic conditions it serves to help better serve its customers.

Already, Better Health is a Medicare-licensed provider in 48 states, and it has partnerships in place with commercial providers like Humana and Oscar Health. This funding round was led by 8VC, a firm with plenty of expertise in the healthcare industry and an investor in Stauber Breckler’s prior ventures, and includes participation from Caffeinated Capital, Anorak Ventures, and angels Robert Hurley and Scott Flanders of remote health pioneer eHealth.

#8vc, #advisors, #caffeinated-capital, #health, #healthcare-industry, #humana, #medicare, #medicine, #oscar, #oscar-health, #pain, #port, #robert-hurley, #shopify, #software-engineer, #surgery, #tc, #united-states

LA-based Metropolis raises $41 million to upgrade parking infrastructure

Metropolis is a new Los Angeles-based startup that’s looking to compete with BMW-owned ParkMobile for a slice of the automated parking lot management market.

Upgrading ParkMobile’s license plate-based service with a computer vision based system that recognizes cars as they enter and leave garages has been Metropolis’ mission since founder and chief executive Alex Israel first formed the business back in 2017.

Israel, a serial entrepreneur, has spent decades thinking about parking. His last company, ParkMe, was sold to Inrix back in 2015. And it was with those earnings and experience that Israel went back to the drawing board to develop a new kind of parking payment and management service.

Now, the company is ready for its closeup, announcing not only its launch, but $41 million in financing the company raised from investors including the real estate managers Starwood and RXR Realty; Dick Costolo’s 01 Advisors; Dragoneer; former Facebook employees Sam Lessin and Kevin Colleran’s Slow Ventures; Dan Doctoroff, the head of Alphabet’s Sidewalk Labs initiative; and NBA All star and early stage investor, Baron Davis. 

According to Alex Israel, the parking payment application is the foundation for a bigger business empire that hopes to reimagine parking spaces as hubs for a broad array of urban mobility services.

In this, the company’s goals aren’t dissimilar from the Florida-based startup, REEF, which has its own spin on what to do with the existing infrastructure and footprint created by urban parking spaces. And REEF’s $700 million round of funding from last year shows there’s a lot of money to be made — or at least spent — in a parking lot.

Unlike REEF, Metropolis will remain focused on mobility, according to Israel. “How does parking change over the next 20 years as mobility shifts?” he asked. And he’s hoping that Metropolis will provide an answer. 

The company is hoping to use its latest funding to expand its footprint to over 600 locations over the course of the next year. In all, Metropolis has raised $60 million since it was formed back in 2017.

While the computer vision and machine learning technology will serve as the company’s beachhead into parking lots, services like cleaning, charging, storage and logistics could all be part and parcel of the Metropolis offering going forward, Israel said. “We become the integrator [and] we also in some cases become the direct service provider,” Israel said.

The company already has 10,000 parking spots that it’s managing for big real estate owners, and Israel expects more property managers to flood to its service.

“[Big property owners] are not thinking about the infrastructure requirements that allow for the seamless access to these facilities,” Israel said. His technology can allow buildings to capture more value through other services like dynamic pricing and yield optimization as well.

“Metropolis is finding the highest and best use whether that be scooter charging, scooter storage, fleet storage, fleet logistics, or sorting,” Israel said.  

 

#advisors, #alphabet, #bmw, #charging, #cleaning, #dan-doctoroff, #dick-costolo, #dynamic-pricing, #facebook, #florida, #head, #inrix, #israel, #logistics, #los-angeles, #machine-learning-technology, #national-basketball-association, #nba, #parking, #parkme, #reef, #sam-lessin, #serial-entrepreneur, #storage, #tc, #transport

Prime Movers Lab raises $245 million for second fund to invest in early stage science startups

After revealing its first fund just last year, a $100 million pool of investment capital dedicated to early stage startups focusing on sustainable food development, clean energy, health innovation and new space technologies, Prime Movers Lab is back with a second fund. Prime Movers Lab Fund II is larger, with $245 million committed, but it will pursue the same investment strategy, albeit with a plan to place more bets on more companies, with an expanded investment team to help manage the funds and portfolio.

“There are a lot of VCs out there,” explained founder and general partner Dakin Sloss about the concept behind the fund. “But there aren’t many VCs that are focused exclusively on breakthrough science, or deep tech. Even though there are a couple, when you look at the proportion of capital, I think it’s something like less than 10% of capital is going to these types of companies. But if you look at what’s meaningful to the life of the average person over the next 30 years, these are all the companies that are important, whether it’s coronavirus vaccine,s or solar energy production, or feeding the planet through aquaponics. These are the things that are really meaningful to to making a better quality of life for most people.”

Sloss told me that he sees part of the issue around why the proportion of capital dedicated to solving these significant problems is that it requires a lot of deep category knowledge to invest in correctly.

“There’s not enough technical expertise in VC firms to choose winners intelligently, rather than ending up with the next Theranos or clean tech bubble,” he said. “So that’s the first thing I wanted to solve. I have a physics background, and I was able to bring together a team of partners that have really deeply technical backgrounds.”

As referenced, Sloss himself has a degree from Stanford in Mathematics, Physics and Philosophy. He was a serial entrepreneur before starting the fund, having founded Tachyus, OpenGov and nonprofit California Common Sense. Other Partners on the team include systems engineer Dan Slomski, who previously worked on machine vision, electro-mechanical systems and developing a new multi-phase flow fluid analyzer; Amy Kruse, who holds a PhD in neuroscience and has served as an executive in defence technology and applied neuroscience companies; and Carly Anderson, a chemical engineer who has worked in biomedicine and oil & gas, and who has a PhD in chemical and biomolecular engineering. In addition to core partners with that kind of expertise, Prime Movers Lab enlists the help of venture partners and specialist advisors like former astronaut Chris Hadfield.

Having individuals with deep field expertise on the core team, in addition to supplementing that with top-notch advisors, is definitely a competitive advantage, particularly when investing in the kinds of companies that Prime Movers Lab does early on in their development. There’s a perception that companies pursuing these kinds of hard tech problems aren’t necessarily as viable as a target for traditional venture funding, specifically because of the timelines for returns. Sloss says he believes that’s a misperception based on unfortunate past experience.

“I think there are three big myths about breakthrough science or hard tech or deep tech,” he said. “That it takes longer, that it’s more capital intensive, and that it’s higher risk. And I think the reason those myths are out there is people invested in things like Theranos, and the clean tech bubble. But I think that there were fundamental mistakes made in how they underwrote risk of doing that.”

Image Credits: Momentus

To avoid making those kinds of mistakes, Sloss says that Prime Movers Lab views prospective investments from the perspective of a “spectrum of risk,” which includes risk of the science itself (does the fundamental technology involve actually work), engineering risk (given the science works, can we make it something we can sell) and finally, commercialization or scaling risk (can we then make it and sell it at scale with economics that work). Sloss says that if you use this risk matrix to assess investments, and allocated funds to address primarily the engineering risk category, concerns around timeframes to return don’t really apply.

He cites Primer Movers Lab’s Fund I portfolio, which includes space propulsion company Momentus, heading for an exit to the public markets via SPAC (the company’s Russian CEO actually just resigned in order to smooth the path for that, in fact), and notes that of the 15 companies that Fund I invested in, four are totally on a path to going public. That would put them much faster to an exit than is typical for early stage investment targets, and Sloss credits the very different approach most hard science startups take to IP development and capital.

“The inflection points in these types of companies are actually I think faster to get to market, because they’ve spent years developing the IP, staying at relatively low or attractive valuations,” he said. “Then we can kind of come in, at that inflection point, and help them get ready to commercialize and scale up exponentially, to where other investors no longer have to underwrite the difference between science and engineering risk, they can just see it’s working and producing revenue.”

Companies that fit this mold often come directly from academia, and keep the team small and focused while they’re figuring out the core scientific discovery or innovation that enables the business. A prime example of this in recent memory is Wingcopter, a German drone startup that developed and patented a technology for a tilt-wing rotor that changes the economics of electric autonomous drone flight. The startup just took its first significant startup investment after bootstrapping for four years, and the funds will indeed be used to help it accelerate engineering on a path towards high-volume production.

While Wingcopter isn’t a Prime Movers Lab portfolio company, many of its investments fit the same mold. Boom Aerospace is currently working on building and flying its subscale demonstration aircraft to pave the way for a future supersonic airliner, while Axiom Space just announced the first crew of private tourists to the International Space Station who will fly on a SpaceX Falcon 9 for $50 million a piece. As long as you can prove the fundamentals are sound, allocating money turning it into something marketable seems like a logical strategy.

For Prime Movers Lab’s Fund II, the plan is to invest in around 30 or so companies, roughly doubling the number of investments from Fund I. In addition to its partners with scientific expertise, the firm also includes Partners with skill sets including creative direction, industrial design, executive coaching and business acumen, and provides those services to its portfolio companies as value-add to help them supplement their technical innovations. Its Fund I portfolio includes Momentus and Axiom, as mentioned, as well as vertical farming startup Upward Farms, coronavirus vaccine startup Covaxx, and more.

#advisors, #articles, #astronaut, #business-incubators, #ceo, #chris-hadfield, #clean-energy, #corporate-finance, #deep-tech, #entrepreneurship, #executive, #falcon, #finance, #funding, #international-space-station, #machine-vision, #momentus, #money, #neuroscience, #oil, #prime-movers-lab, #private-equity, #serial-entrepreneur, #stanford, #startup-company, #startups, #tc, #theranos, #venture-capital, #wingcopter

PepsiCo signs on to sponsor new founder-in-residence program from M13

The budding venture studio being built inside M13 has signed PepsiCo as its first new corporate partner.

Through the deal, PepsiCo has agreed to bankroll the first founder-in-residence program from the New York and Los Angeles-based firm, which poached former Techstars Los Angeles managing director Anna Barber to lead its new initiative.

The initial M13 Launchpad program will leverage PepsiCo executives and advisors to take entrepreneurs-in-residence on a 12-week long program in ideating and launching a health and wellness-focused startup.

“Today there is a wealth of data available to consumers about their own health, and the movement toward home testing has put ownership over health data more firmly in their hands. This creates exciting opportunities for people to use nutrition even more effectively as a source of consistent, overall health and wellness,” Barber wrote in an email. “This spring, we will be looking at everything from snacks, meal replacement foods, drinks and supplements to software platforms for optimizing nutrition, and connected devices for collecting and managing data.”

It’s a deal that compliments work M13 is already doing alongside corporate partners like Procter & Gamble Ventures, which was instrumental in developing companies like include the premium beauty tech OPTE, Kindra’s menopause products and Bodewell for sensitive skin care.

Independently, the Launchpad program was able to build up Rae, which sells affordable women’s wellness products available at Target, Anthropologie and Urban Outfitters.

Under the 12 week virtual Launchpad program, entrepreneurs will receive a $10,000 monthly stipend and enough cash for testing product market fit when they graduate. Upon leaving the program, each company will also receive a small seed round to ensure that they can continue to grow the business, M13 said.

#advisors, #anna-barber, #articles, #business, #companies, #launchpad, #los-angeles, #m13, #new-york, #rae, #target, #tc, #techstars, #wellness

Bristol entrepreneur who exited for $800M doubles-down on the city with deep-tech incubator and VC fund

Harry Destecroix co-founded Ziylo while studying for his PhD at the University of Bristol. Ziylo, a university spin-out company, developed a synthetic molecule allowing glucose to bind with the bloodstream more effectively. Four years later, and by then a Phd, Destecroix sold the company to Danish firm Novo Nordisk, one of the biggest manufacturers of diabetes medicines, which had realized it could use Ziylo’s molecule to develop a new type of insulin to help diabetics. He walked away with an estimated $800m.

Destecroix is now embarking on a project, “Science Creates”, to repeat the exercise of creating deep-tech, science-based startups, and it will once more be based out of Bristol.

To foster this deep tech ecosystem it will offer a specialized incubator space able to house Wet Labs, a £15 million investment fund and a network of strategic partners to nurture science and engineering start-ups and spin-outs.

The Science Creates hub, in partnership with the University of Bristol and located in the heart of the city, is aspiring to become a sort of ‘West Coast’ for England, and the similarities, at least with an earlier version of Silicon Valley, are striking.

The Bay Area of old was cheaper than the East Coast of the US, had a cornerstone university, access to capital, and plenty of talent. Bristol has all that and for capital, it can access London, less than 90 minutes by train. But what it’s lacked until now is a greater level of “clustering” and startup-focused organization, which is clearly what Destecroix is planning to fix.

In a statement for the launch, he explained: “Where a discovery is made has a huge bearing on whether it’s successfully commercialized. While founding my own start-up, Ziylo, I became aware of just how many discoveries failed to emerge from the lab in Bristol alone. No matter the quality of the research and discovery, the right ecosystem is fundamental if we are going to challenge the global 90% failure rate of science start-ups, and create many more successful ventures.”

Science Creates is be grown out of the original incubator, Unit DX, that Destecroix set up in collaboration with the University of Bristol in 2017 to commercialize companies like his own.

The Science Creates team

The Science Creates team

The ‘Science Creates ecosystem’ will comprise of:

Science Creates Incubators: Unit DX houses 37 scientific and engineering companies working on healthtech, the environment and quality of life. The opening of a second incubator, Unit DY, close to Bristol Temple Meads train station, will mean it can support 100 companies and an estimated 450 jobs. The Science Creates’ physical footprint across the two units will reach 45,000 sq ft.

Science Creates Ventures: This £15 million EIS venture capital fund is backed by the Bristol-based entrepreneurs behind some of the South-West’s biggest deep tech exits.

Science Creates Network: This will be a portfolio of strategic partners, mentors and advisors tailored to the needs of science and engineering start-ups.

Destecroix is keen that the startups nurtured there will have more than “Wi-Fi and strong coffee” but also well-equipped lab space as well as sector-specific business support.

He’s betting that Bristol, with its long history of academic and industrial research, world-class research base around the University of Bristol, will be able to overcome the traditional challenges towards the commercialization of deep tech and science-based startups.

Professor Hugh Brady, Vice-Chancellor and President at the University of Bristol, commented: “We are delighted to support the vision and help Science Creates to build a thriving deep tech ecosystem in our home city. Great scientists don’t always know how to be great entrepreneurs, but we’ve seen the impact specialist support can have in helping them access the finance, networks, skills, and investment opportunities they need. Working with Science Creates, we aim to support even more ground-breaking discoveries to progress outside the university walls, and thrive as successful commercial ventures that change our world for the better.”

Ventures in Unit DX so far include:
– Imophoron (a vaccine tech start-up that is reinventing how vaccines are made and work – currently working on a COVID vaccine)
– Cytoseek (a discovery-stage biotech working on cell therapy cancer treatment)
– Anaphite (graphine-based science for next gen battery technology).

In an exclusive interview with TechCrunch, Destecroix went on to say: “After my startup exited I just got really interested in this idea that, where discovery is actually founded has a huge bearing on whether something is actually commercialized or not. The pandemic has really taught us there is a hell of a lot more – especially in the life sciences, and environmental sciences – that has still yet to be discovered. Vaccines are based on very old technology and take a while to develop.”

“Through this whole journey, I started trying to understand it from an economic perspective. How do we get more startups to emerge? To lower those barriers? I think first of all there’s a cultural problem, especially with academically-focused universities whereby entrepreneurship a dirty word. I had to go against many of my colleagues in the early days to spin out, then obviously universities own all the IP. And so you’ve got to go through the tech transfer office etc and depending on what university you are at, whether it’s Imperial, Cambridge or Oxford, they’re all different. So, and I put the reason why there were no deep terch startups in Bristol down to the fact that there was no incubator space, and not enough investment.”

“I’ve now made about 14 angel investments. Bristol has now catapulted from 20th in the league tables for life sciences to six in the country in the last three years and this is largely due to the activities that we’ve been helping to encourage. So we’ve helped streamline licensing processes for the university, and I’ve helped cornerstone a lot of these deals which has resulted in a wave of these technology startups coming in.”

“I thought, now’s the time to professionalize this and launch a respectable Bristol-based venture capital firm that specializes in deep technologies.”

#advisors, #articles, #bristol, #business, #cambridge, #cancer-treatment, #deep-tech, #east-coast, #economy, #entrepreneurship, #europe, #finance, #london, #oxford, #private-equity, #start-up, #start-ups, #startup-company, #tc, #united-kingdom, #united-states, #venture-capital, #west-coast, #wi-fi

Alexa von Tobel: Eliminating risk is the key to building a startup during an economic downturn

Launching a company, even in the best of times, is one of the most challenging exercises a person can go through. In an economic recession, it can seem downright impossible. But founders across the country, and indeed across the globe, are in the midst of that process as I write.

They aren’t the first. Alexa von Tobel, founder of LearnVest and founding partner at Inspired Capital, publicly launched her fintech startup in 2009, and founded it in May of 2007. In that span of time, Lehman Brothers went under — in December of 2008.

The company was launched in the midst of the worst economic downturn in at least three generations (current circumstances notwithstanding). We briefly chatted with von Tobel about this in a recent episode of Extra Crunch Live, but the topic deserved much more exploration. Von Tobel was gracious enough to talk to us again, and gave us her advice and insights on what it means, and what it takes, to launch a business in the midst of economic uncertainty.

Write it down

Von Tobel says that one of the most important exercises in forming LearnVest — a company that was acquired for $375 million by Northwestern Mutual — was writing out a business plan. It was 75 pages, and by no means a formal document. Rather, the LearnVest business plan was a brain dump of everything von Tobel could possibly think of as it relates to her idea.

“It was nothing beautiful and by no means a work of art,” said von Tobel. “But it was valuable to put it together and walk through this blueprint of all the big questions, all the concerns. How would the customer feel? How big was the market? What was the competition? I even drew up a product plan of how I would roll it out. It was a budget, looking at how much money we think we need to get up and running.”

This business plan also included the areas in which von Tobel felt she was not an expert. She wanted a clear expression of her own strengths and weaknesses built into the business from its very inception.

von Tobel had never written a formal business plan before. She had taken a few business classes at Harvard Business School, but didn’t see the exercise as preparation for publication, but rather her own personal space to develop a product and business.

“It was a macro, more thoughtful plan that allowed me to understand where things were positioned,” said von Tobel. “Perfect is the enemy of good enough. You don’t have to be perfect, but you have to do enough that you have a really clear sense of the picture and a really clear sense of the cracks.”

#advisors, #alexa-von-tobel, #business-plan, #diver, #economy, #entrepreneurship, #finance, #fintech-startup, #harvard, #harvard-business-school, #learnvest, #lehman-brothers, #northwestern-mutual, #roelof-botha, #startups, #tc

When building a startup, think like a buyer

“Never run a dual-track process.”

You’ll probably hear this advice if you ask an investor about raising money and selling a business concurrently, and it’s good advice. The two processes are so different, so all-consuming and require such different priorities that it is nearly impossible to do both well. Running a sale process, though, is much different from positioning your company for sale, and positioning for a sale is very easy to do while you are focused on execution and fundraising. In fact, thinking like a buyer often helps make your business better even if you never sell, and if you do end up exiting through a merger or acquisition (far more common than an IPO in any event), you’ll be that much farther ahead.

It’s not just about your KPIs anymore

Investors care about results far more than methods. If the business is growing and the results are strong, founders are apt to face few questions from investors about the details of how they run their businesses.

It can come as quite a shock, then, when a buyer begins questioning everything during a sale. An acquisition represents not just the purchase of a revenue stream but also the team, technology, culture and a swarm of contractual relationships. Consider that a buyer is acquiring everything you have built up to this point, and they will take a close interest in all of it, not just your results.

At times, it can feel infuriatingly unfair. When I sold my first startup, Prism, several buyers castigated us for building on .NET. The product worked beautifully, and we had strong revenue growth. The tech stack was efficient and reliable. In fact, buyers would often congratulate us for the technology we had built and in the same breath insult our method of building it. Unfair, perhaps, but entirely reasonable considering that the buyer had to consider not just our results but how to integrate our team and product into their company. I’ve heard similar stories from founders concerning issues that range from culture and hiring practices to core hours and partnerships.

While growth is always the priority, looking at the business objectively can pay handsome dividends even if no buyer ever materializes and starts asking questions. It is easy for teams to become insular and to ignore problems festering underneath the shiny performance metrics, and forcing yourself to think like a buyer can help uncover problems early. Security and accounting are the best and most obvious examples here, but are far from the only ones. Even if you decide not to make a given change (we would not have changed our tech stack, for example), you will be able to get in front of any objections. A good offense is always the best defense, and the more you address incompatibilities proactively with a buyer, the stronger your position will be.

A peek behind the curtain

So how does a sale actually happen, and how does your preparation pay off? Typically, there are two general paths: the traditional process and the “serendipitous” encounter. In a traditional process, the founder explicitly seeks to sell the company. In a large transaction, it’s common to hire an investment bank to run the process; founders tend to manage smaller transactions themselves. Either way, the founder or the banker will comb through a list of potential acquirers and pitch the business to them in a process that feels somewhat like raising money.

The “serendipitous” encounter is a much looser construction. Sometimes, it is truly happenstance, when an acquirer expresses genuinely unexpected interest. More often, those scare quotes are doing yeoman’s work, and the founder starts feeling out potential buyers by casually discussing how great their business is with those around them. Some founders are better at this dance than others, but once a buyer expresses genuine interest, the next steps look exactly like the formal process. Look, there may be environments in which having zero competition for your deal makes sense, just like there may be environments in which “Well, at this point, the best path forward definitely is to wrestle with that alligator” is a sensible thing to say. Both environments are equally likely. In almost all cases, it is imperative to get others interested in your company, even if you would prefer to sell to the first buyer. Auctions drive up prices and improve your negotiating position on literally everything, so you need to run a process just as if you’d planned one from the beginning.

So what does “interest” look like? It’s a fuzzy concept, but typically it means that someone with agency (either a C-suite executive or someone in the corporate M&A group) tells you that they want to consider acquiring your business. A lot of euphemisms get thrown around at this point to avoid scaring founders; you’ll hear “building a closer relationship” or word salads like “working together in a more structurally consistent manner” or if the person has a New York investment banking background, “Let’s get a deal done” likely delivered staccato with a finger. jabbing. the. table. for. emphasis. These phrases all mean the same thing, namely that the company that person represents wants to consider buying your company.

At this point, the conversation is pretty high level. You typically won’t be tearing into the technical wizardry, but rather demonstrating that you have what it takes to play the game: a good business model, a reliable product, strong team chemistry, and a product that fits well into the acquirer’s business. You, your co-founders and probably some senior engineers will spend some time at the acquirer’s offices, meeting with the management and product teams, trying to get a sense for how well these various groups of people gel. The CEO will spend time with the other company’s CEO (or in the case of larger acquirers, divisional leadership), hashing out employee benefit packages and transition agreements. Pro tip: “Synergies” mean firing people, and if that’s off the table for you, make that clear upfront. Even if there’s a desire to keep the whole team, it’s pretty unusual for every last person to make the transition.

If these first couple meetings go well, you need to start formalizing the process. Your sale will be much more successful if you establish an internal champion (sometimes the CEO but ideally your head of corporate development, business unit leader or GC) who can navigate the sale. Having one key point person will streamline the process and allow the founders to focus on ensuring that the business doesn’t fall apart from all of the distraction.

At some point early in this process, you’ll want to ask for an Initial Indication of Interest, or “IOI.” Legally, it’s a worthless piece of paper, but it keeps honest people honest. In it are outlined the terms of the proposed deal, the expected timing and other major deal points. Much can and will change, but having a common and documented starting ground is essential. NDAs tend to get signed around this time as well or may already be in place if the process started more formally. At this point, you also need to communicate to your other potential buyers (you have a few, right?) that you’re “in exclusivity,” meaning you can’t negotiate with anyone else. Doing so typically heightens their interest, because they’re human beings. From then on, you’ll almost certainly be prohibited from talking to new buyers about the business at all, so your only fallback options are the others already in the process.

From then on, it’s a sprint to the finish. Technical diligence, legal diligence, security reviews, accounting reviews, etc. It all takes longer than it should and creates proliferating headaches. Anything can derail a deal, but most of this work just creates more negotiating room for the buyer. It’s like a really expensive and prolonged home inspection, and if you’ve done a good job on maintenance over the years, it’ll go smoothly (see previous section).

The sellers matter, too

Your investors, employees and customers all have a stake in this outcome as well. While you’re busy trying to think like a buyer, you also need to empathize with all of your selling stakeholders. Each situation is different, so it’s hard to give generic advice. More communication is better than less, especially to your lead investors who likely have to approve any M&A in the first place. If a transaction comes out of nowhere, it can feel desperate and leave investors wondering what was left on the table. Investors have come to associate poor communication with poor management, and it’s not an unfair assumption.

You’ll need to bring employees into the circle as the diligence process unfolds, and involving your top people is almost always the right initial step. You need your leaders on board with the deal, and it is much easier to get people excited when they have a say in the process and outcome. Unfortunately for your customers, they will have to wait for the public deal announcement, but be transparent and honest in that communication. It should come from one of the CEOs.

Finally, be sure to give people who have supported you in the past — journalists, bloggers, podcasters, advisors — a heads-up as well so they don’t feel blindsided. Doing so is especially important if an acquisition will significantly disrupt the product; if someone put their reputation on the line for you, do your best to tell them what’s happening before they wake up to the news alert.

Ultimately, think like a sales lead

Every CEO is in sales . Pitching investors, selling to customers, recruiting all-stars, courting acquirers: It’s all sales. Preparing to sell your most important asset — the company itself — should be no less a part of your DNA. Never stop selling.

#advisors, #column, #corporate-finance, #entrepreneurship, #human-resource-management, #ma, #mergers-and-acquisitions, #prism, #sales, #startups, #talent, #venture-capital

Decrypted: Police hack criminal phone network; Randori raises $20M Series A

Last week was, for most Americans, a four-day work week. But a lot still happened in the security world.

The U.S. government’s cybersecurity agencies warned of two critical vulnerabilities — one in Palo Alto’s networking tech and the other in F5’s gear — that foreign, nation state-backed hackers will “likely” exploit these flaws to get access to networks, steal data or spread malware. Plus, the FCC formally declared Chinese tech giants Huawei and ZTE as threats to national security.

Here’s more from the week.


THE BIG PICTURE

How police hacked a massive criminal phone network

Last week’s takedown of EncroChat was, according to police, the “biggest and most significant” law enforcement operation against organized criminals in the history of the U.K. EncroChat sold encrypted phones with custom software akin to how BlackBerry phones used to work; you needed one to talk to other device owners.

But the phone network was used almost exclusively by criminals, allowing their illicit activities to be kept secret and go unimpeded: drug deals, violent attacks, corruption — even murders.

That is, until French police hacked into the network, broke the encryption and uncovered millions of messages, according to Vice, which covered the takedown of the network. The circumstances of the case are unique; police have not taken down a network like this before.

But technical details of the case remain under wraps, likely until criminal trials begin, at which point attorneys for the alleged criminals are likely to rest much of their defense on the means — and legality — in which the hack was carried out.

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