#DealMonitor – Frontify sammelt 50 Millionen ein – Flexcavo bekommt 7,5 Millionen – Lena Gercke investiert in 26 Homes


Im aktuellen #DealMonitor für den 27. September werfen wir wieder einen Blick auf die wichtigsten, spannendsten und interessantesten Investments und Exits des Tages in der DACH-Region. Alle Deals der Vortage gibt es im großen und übersichtlichen #DealMonitor-Archiv.

INVESTMENTS

Frontify 
+++ Revaia (ehemals Gaia Capital Partners) und High Sage Ventures sowie die Alt-Investoren EQT Ventures, Blossom Capital und Tenderloin Ventures investieren 50 Millionen US-Dollar in das Schweizer Startup Frontify. Das Unternehmen, das 2013 von Roger Dudler in St. Gallen gegründet wurde, betreibt eine Plattform, über die Unternehmen ihren Markenauftritt verwalten können. EQT Ventures, Blossom Capital, Datartis Ventures und Tenderloin Ventures investierten zuletzt bereits 22,3 Millionen Dollar in Frontify. Über 200 Mitarbeiter:innen wirken bereits für die Jungfirma. Zu den Kunden von Frontify gehören unter anderem Lufthansa, KIA, Vodafone, Maersk, Dyson und Allianz. Mit dem frischen Kapital möchte das Unternehmen “das Wachstum weiter vorantreiben – sowohl in der Produktforschung und -entwicklung als auch bei der Einstellung von Talenten in den USA, der Schweiz und darüber hinaus, um das derzeitige Team zu verstärken”. Mehr über Frontify

Flexcavo 
+++ VR Ventures, Picus Capital, Rivus Ventures und FJ Labs sowie Business Angels wie Felix Jahn, Max-Josef Meier, Florian Huber, Florian Seubert und die Alasco-Gründer investieren 7,5 Millionen in Flexcavo. Bei Flexcavo aus Berlin, das von Picus Capital angeschoben wurde, dreht sich alles um das Mieten von Baumaschinen. “Wir kombinieren unsere Mietflotte mit innovativer Technologie, um gemeinsam mit Ihnen den Einsatz von Baumaschinen zu optimieren”, teilen die Jungunternehmer mit. “Das neue Kapital soll vor allem in den Ausbau des Teams, die Weiterentwicklung der Software sowie den deutschlandweiten Ausbau des Netzwerks für Baumaschinenvermietung fließen”, teilt das ConTech, das von Benedict Aicher und Leonhard Fricke gegründet wurde, mit.

RemNote
+++ General Catalyst, 468 Capital, Soma Capital und Dorm Room Fund investieren 3 Millionen US-Dollar in das deutsch-amerikanische Startup RemNote. Das Unternehmen aus Boston, das von 2020 von Deutschen Moritz Wallawitsch und dem US-Amerikaner Martin Schneider gegründet wurde, positioniert sich als “Online-Umgebung für Lernen und Wissensvermittlung”. Das frische Kapital soll “für laufende Produktinnovationen und den Ausbau des Teams aus Ingenieuren, Designern und Forschern verwendet” werden.

26 Homes
+++ Amorelie-Gründerin Lea-Sophie Cramer und Model Lena Gercke investieren nach unseren Informationen eine unbekannte Summe in 26 Homes. Das Berliner Startup, das von Dorothea Metasch gegründet wurde, beschreibt sich als “neuen Weg, um Immobilien zu entdecken”. Zum Konzept, das über einen Newsletter funktioniert, heißt es weiter: “Wir sind der Follow-Button für Eigentumswohnungen”. #EXKLUSIV

MERGERS & ACQUISITIONS

Port
+++ Das New Yorker Unternehmen Commsor übernimmt Port. Das Berliner Startup, das 2020 von Jake Stott, Nick Dijkstra und Kevin Dykes gegründet wurde, kümmert sich um Community-Wachstum. In der Eigenbeschreibung heißt es: “Navigate your community. Port helps you grow, engage, and retain your members. Wherever they are”. Die Hauptstädter schreiben: “It was totally unexpected that only 18 months into our voyage, we would receive an acquisition offer we couldn’t refuse”.

Achtung! Wir freuen uns über Tipps, Infos und Hinweise, was wir in unserem #DealMonitor alles so aufgreifen sollten. Schreibt uns eure Vorschläge entweder ganz klassisch per E-Mail oder nutzt unsere “Stille Post“, unseren Briefkasten für Insider-Infos.

Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): azrael74

#26-homes, #468-capital, #aktuell, #berlin, #blossom-capital, #boston, #commsor, #contech, #dorm-room-fund, #eqt-ventures, #fj-labs, #flexcavo, #frontify, #general-catalyst, #high-sage-ventures, #picus-capital, #pink-capital, #port, #proptech, #remnote, #revaia, #rivus-ventures, #soma-capital, #st-gallen, #tenderloin-ventures, #venture-capital, #vr-ventures

F5 acquires cloud security startup Threat Stack for $68 million

Applications networking company F5 has announced it’s acquiring Threat Stack, a Boston-based cloud security and compliance startup, for $68 million.

The deal, which comes months after F5 bought multi-cloud management startup Volterra for $500 million, sees the 25-year-old company looking to bolster its cloud security portfolio as applications become a growing focus for cybercriminals. Businesses lose more than $100 billion a year to attacks targeting digital experiences, F5 says and these experiences are increasingly powered by applications distributed across multiple environments and interconnected through APIs.

Threat Stack, which was founded in November 2012 and has since amassed more than $70 million across six funding rounds including a $45 million Series C round led by F-Prime Capital Partners and Eight Roads Ventures, specializes in cloud security for applications and provides customers with real-time threat detection for cloud infrastructure and workloads. Unlike many cloud security tools that kick in after an intrusion, Threat Stack takes a more proactive approach, alerting organizations to all known vulnerabilities and providing a report on the holes that need to be plugged.

The startup’s intrusion detection platform, the Threat Stack Cloud Security Platform, works across cloud, hybrid cloud, multi-cloud, and containerized environments, and is perhaps best known for its Slack integration that alerts DevOps teams to security concerns in real-time. Threat Stack has a number of big-name customers, according to its website, including Glassdoor, Ping Identity and Proofpoint.

F5 says that integrating its application and API protection solutions with Threat Stack’s cloud security capabilities and expertise will enhance visibility across application infrastructure and workloads, making it easier for customers to adopt consistent security in any cloud.

“Applications are the backbone of today’s modern businesses, and protecting them is mission-critical for our customers,” said Haiyan Song, EVP of Security at F5. “Threat Stack brings technology and talent that will strengthen F5’s security capabilities and further our adaptive applications vision with broader cloud observability and actionable security insights for customers.”

The acquisition, which is expected to close in F5’s first-quarter fiscal year 2022, is subject to closing conditions.

#api, #boston, #cloud-computing, #cloud-infrastructure, #cloud-management, #computing, #eight-roads-ventures, #f5, #glassdoor, #palo-alto-networks, #ping-identity, #security, #splunk, #system-administration, #threat-stack, #volterra

BitSight raises $250M from Moody’s and acquires cyber risk startup VisibleRisk

BitSight, a startup that assesses the likelihood that an organization will be breached, has received a $250 million investment from credit rating giant Moody’s, and acquired Israeli cyber risk assessment startup VisibleRisk for an undisclosed sum.

Boston-based BitSight says the investment from Moody’s, which has long warned that cyber risk can impact credit ratings, will enable it to create a cybersecurity risk platform, while the credit ratings giant said it plans to make use of BitSight’s cyber risk data and research across its integrated risk assessment product offerings.

The investment values BitSight at $2.4 billion and makes Moody’s the largest shareholder in the company.

“Creating transparency and enabling trust is at the core of Moody’s mission,” Moody’s president and CEO Rob Fauber said in a statement. “BitSight is the leader in the cybersecurity ratings space, and together we will help market participants across disciplines better understand, measure, and manage their cyber risks and translate that to the risk of cyber loss.”

Meanwhile, BitSight’s purchase of VisibleRisk, a cyber risk ratings joint venture created by Moody’s and Team8, brings in-depth cyber risk assessment capabilities to BitSight’s platform, enabling the startup to better analyze and calculate an organization’s financial exposure to cyber risk. VisibleRisk, which has raised $25 million to date, says its so-called “cyber ratings” are based on cyber risk quantification, which allows companies to benchmark their cyber risk against those of their peers, and to better understand and manage the impact of cyber threats to their businesses.

Following the acquisition, BitSight will also create a risk solutions division focused on delivering a suite of critical solutions and analytics serving stakeholders including chief risk officers, C-suite executives, and boards of directors. This division will be led by VisibleRisk co-founder and CEO Derek Vadala, who previously headed up Moody’s cyber risk group.

Steve Harvey, president and CEO of BitSight, said the company’s partnership with Moody’s and its acquisition of VisibleRisk will expand its reach to “help customers manage cyber risk in an increasingly digital world.”

BitSight was founded in 2011 and has raised a total of $155 million in outside funding, most recently closing a $60 million Series D round led by Warburg Pincus. The startup has just shy of 500 employees and more than 2,300 global customers, including government agencies, insurers and asset managers. 

#articles, #boston, #computer-security, #cyberattack, #cybercrime, #cyberwarfare, #leader, #risk, #risk-analysis, #risk-management, #safety, #security, #team8, #warburg-pincus

Toast looks toward $18B valuation in upcoming IPO

As if the Boston startup market needed additional momentum, it appears restaurant software startup Toast will dramatically bolster its valuation in its upcoming IPO.

For a city perhaps best known internationally for its hard tech and biotech efforts, to see Toast not only rebound from its early-pandemic layoffs to a public debut, but to target a valuation closer to $20 billion than $10 billion, is a coup.


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In a new S-1/A filing this morning, Toast indicated an early IPO range of between $30 and $33 per share, leading to a maximum fundraise of $825 million in its IPO. The company was last valued at $4.9 billion in early 2020, when Toast raised $400 million. The company is set to dramatically supersede that valuation mark thanks to expanding revenues and an especially strong second quarter.

Let’s dig into the company’s new IPO price range, calculate simple and fully diluted results, and see what we can learn from where Toast may price. Recall that the company has a mix of recurring software (SaaS) incomes as well as fintech revenue (payments, mostly). Its revenue mix is interesting, and how Toast prices could help us better understand how to value vertical SaaS startups that are pursuing a payments-and-SaaS business approach.

Into the filing!

Toast’s IPO valuation

Toast is selling 21,739,131 Class A shares in its IPO. They get one vote. Class B shares get 10. If you were considering buying into Toast’s IPO in hopes of having a say in its future, don’t. You won’t. The company’s IPO is really a method by which public-market investors can endorse the company’s current management group — or decline to buy any ownership at all.

Regardless of how we feel about corporate governance structures designed to eliminate the influence of common shareholders, Toast will have 499,332,681 shares outstanding after its IPO, or 502,593,550 if its underwriters choose to purchase their allotted greenshoe option.

At the company’s expected IPO price range of $30 to $33 per share, Toast is worth $14.98 billion at the low end, and $16.48 billion at the top. Inclusive of shares from its underwriters’ option, Toast’s simple IPO valuation range expands from $15.08 billion at the bottom to $16.59 billion at the top.

#boston, #fundings-exits, #startups, #the-exchange, #toast

DataRobot CEO Dan Wright coming to TC Sessions: SaaS to discuss role of data in machine learning

Just about every company is sitting on vast amounts of data, which they can use to their advantage if they can just learn how to harness it. Data is actually the fuel for machine learning models, and with the proper tools, businesses can learn to process this data and build models to help them compete in a rapidly-changing marketplace, to react more quickly to shifting customer requirements and to find insights faster than any human ever possibly could.

Boston-based DataRobot, a late-stage startup that has built a platform to help companies navigate the machine learning model lifecycle, has been raising money by the bushel over the last several years including $206 million in September 2019 and another $300 million in July. DataRobot CEO Dan Wright will be joining us on a panel to discuss the role of data in business at TC Sessions: SaaS on October 27th.

The company covers the gamut of the machine learning lifecycle including preparing data, operationalizing it and finally building APIs to make it useful for the organization as it attempts to build a soup-to-nuts platform. DataRobot’s broad platform approach has appealed to investors.

As we wrote at the time of the $206 million round:

The company has been catching the attention of these investors by offering a machine learning platform aimed at analysts, developers and data scientists to help build predictive models much more quickly than it typically takes using traditional methodologies. Once built, the company provides a way to deliver the model in the form of an API, simplifying deployment.

DataRobot has raised a total of $1 billion on $6.3 billion post valuation, according to Pitchbook data and it’s been putting that money to work to add to its platform of services. Most recently the company acquired Algorithmia, which helps manage machine learning models.

As the pandemic has pushed more business online, companies are always looking for an edge and one way to achieve that is by taking advantage of AI and machine learning. Wright will be joined on the data panel by Monte Carlo co-founder and CEO Barr Moses and AgentSync co-founder and CTO Jenn Knight to discuss the growing role of data in business operations

In addition to our discussion with Wright, the conference will also include Microsoft’s Jared Spataro, Amplitude’s Olivia Rose, as well as investors Kobey Fuller and Laela Sturdy, among others. We hope you’ll join us. It’s going to be a thought-provoking lineup.

Buy your pass now to save up to $100. We can’t wait to see you in October!

#agentsync, #algorithmia, #artificial-intelligence, #boston, #ceo, #data, #datarobot, #enterprise, #jared-spataro, #jenn-knight, #machine-learning, #monte-carlo, #pitchbook-data, #tc, #tc-sessions-saas-2021

Digital therapeutics startup Neuroglee raises $10M to help people with neurodegenerative conditions

Neuroglee Therapeutics, a startup developing digital therapeutics for people with neurodegenerative diseases, has raised a $10 million Series A led by Openspace Ventures and EDBI. The funding will be used to launch virtual neurology clinics and to support Neuroglee’s move to Boston. Other participants included Ramen Singh, the former chief executive officer of Mundipharma; Biofourmis co-founders Kuldeep Singh Rajput and Wendou Liu; and Eisai Co., the Japanese pharmaceutical that led Neuroglee’s last round last year.

In an email, founder and chief executive officer Aniket Singh Rajput told TechCrunch that the company is moving to Boston because the city “is one of the largest digital health hubs in the world. As a company devoted to developing our first line of solutions for treating mild cognitive impairment related to difficult-to-treat neurodegenerative conditions such as Alzheimer’s disease, we believe Boston will offer us the strategic support in order to do so.”

Neuroglee and the Mayo Clinic are currently working together on a new platform called Neuroglee Connect. Based on the Mayo Clinic’s 10-day in-person program HABIT (Health Action to Benefit Independence and Thinking) for people with mild cognitive impairment from possible neurodegenerative conditions, Neuroglee’s technology will enable HABIT to scale, making it available to patients and caregivers in their homes. Neuroglee Connect users will also have access to health navigators who are available 24 hours and clinical care teams for assessments and interventions.

Neuroglee’s product pipeline also includes digital therapeutics for Parkinson’s disease and strokes.

Since Neuroglee’s previous funding announcement in December 2020, Rajput said it has hit milestones like the successful product development of NG-001, its prescription digital therapy software for Alzheimer’s, and began work on its proof-of-concept study to earn NG-001 a Breakthrough Designation from the Federal Drug Administration.

Neuroglee’s adaptive learning tech uses machine learning and biomarkers related to cognitive function, mood and behavior to automatically personalize therapy plans for each patient, who access the software through a smartphone or tablet.

“For example, adjustments will be made to the number and type of tasks and games that are offered, based on the speed of the patient’s finger movements, time to complete games or tasks, and their facial expression identified through the device camera,” said Rajput. “The solution also incorporates reminiscence therapy, which uses images from the patient’s past to evoke positive memories and emotions, which have been shown to improve cognitive functioning.”

 

#alzheimers, #asia, #boston, #digital-therapeutics, #fundings-exits, #neurodegenerative-disease, #neuroglee, #neuroglee-therapeutics, #singapore, #southeast-asia, #startups, #tc

Vista Equity to acquire majority stake in SaaS startup Drift, taking it to unicorn status

Private equity firm Vista Equity Partners announced today that it is taking a majority stake in Drift, a company which aims to be the Amazon of businesses, with a “growth investment” that propels the venture-backed startup to unicorn status.

Unfortunately, neither party would disclose the amount of the investment, or Drift’s new valuation. But co-founder and CEO David Cancel did say the SaaS company saw 70% growth in its annual recurring revenue (ARR) in 2020 compared to the year prior and is on target for a similar metric this year. It is not yet profitable, as it is focused on growth, he added.

Prior to this financing, Boston-based Drift had raised $107 million in funding from the likes of Sequoia Capital, CRV and General Catalyst since its 2015 inception.

So just what does the company do exactly? The startup says it is out to ”reimagine the B2B buying experience,” according to Cancel. By using its software, Drift’s 50,000 customers are able to bring together sales and marketing teams on one platform to “deliver personalized conversations” that the company says build trust and accelerate revenue. 

Its customers include ServiceNow, Okta, Grubhub, Mindbody, Adobe, Ellie May and Snowflake, among others. Today 75% of Drift’s customers are mid-market enterprise, according to Cancel. 

Over the past five years, Drift has worked to create and define something it describes as “Conversational Marketing” with the goal of helping marketers “harness the digital experience for lead generation.” Or to put it more simply, Drift subscribers can use chatbots to help turn web visits into sales.

The company says it is out to remove the friction between buyers and sellers so they can not only get more leads, but also close more sales. This led Drift to expand its focus to build a platform that includes conversational sales, which integrates chat, email, video and artificial intelligence to power conversations, not just on a customer’s website, but for the sales team too. 

Cancel said that Vista’s strategic growth investment will help the company move even faster, expand globally and launch a new B2B category called “Conversation Commerce,” an interactive approach to conversations that Drift believes has the potential to “transform the entire B2B revenue function.”

Basically, the company is trying to make the B2B buying/selling experience similar to that of a B2C one. At least 80% of B2B buyers are not only looking for, but expect, a buying experience similar to that of a B2C customer, according to Cancel.

So far in 2021, Drift’s customers generated $5 billion in pipeline value by making the customer side of the buying process easier, he said.

For Cancel, a serial entrepreneur who previously founded and sold four other companies, the notion of owning a company with a unicorn valuation was not something he and co-founder and CTO Elias Torres were overly consumed with.

But what did appeal to the pair was the opportunity to add to the too-short list of U.S.-based unicorns with Latin founders and serve as an inspiration for other entrepreneurs of Latin descent. Cancel’s parents emigrated from Puerto Rico and Cuba while Torres emigrated from Nicaragua in his teens.

“I didn’t really care about that [unicorn] status except for one reason and the reason was that we are both Latino and if we hit this milestone, then we would be part of the less than 1% of Latinos that had ever done that,” Cancel told TechCrunch. “And that was important to us because we believe that we have the responsibility to pay it forward and to help people and to inspire other people who are like us and are often marginalized. We want to show that they can do this too.”

Torres agreed, saying that he and Cancel were “proud to be one of the only Latino-founded companies to ever achieve over $1 billion valuation – a rare, Latino-founded unicorn.”

“We want to see more of us do the same and we will pave the way for other Latino founders and leaders to achieve success,” he added.

By having a majority owner in Vista, which focuses exclusively on backing enterprise software, data and technology-enabled businesses, Cancel believes that Drift can “get more efficient in some areas.” He also thinks that the firm can help it ramp up its acquisitions pace. (So far it has made three.)

The nearly 600-person company still has its sights on going public, according to Cancel, and believes that by working with Vista, it will have a “clearer path” to do so.

“It’s something we think about a lot,” he told TechCrunch. “It’s still in our future.”

Monti Saroya, co-head of the Flagship Fund and senior managing director at Vista, thinks that Drift represents a “compelling” opportunity for Vista.

“Drift is a company that is experiencing hypergrowth at scale, we and we believe the conversational marketing and sales tools it offers will continue to be in high demand as companies race to modernize their B2B commerce strategies,” he told TechCrunch.

Earlier this year, Vista — which has over $77 billion in assets under management — invested $242 million to acquire a minority stake in Vena, a Canadian company focused on the Corporate Performance Management (CPM) software space.

Meanwhile, Vista’s acquisition of Drift is expected to close in the fourth quarter of 2021.

#apps, #boston, #david-cancel, #drift, #elias-torres, #exit, #fundings-exits, #private-equity, #saas, #startups, #tc, #vista-equity-partners

The pure hell of managing your JPEGs

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

Natasha and Alex and Grace and Chris were joined by none other than TechCrunch’s own Mary Ann Azevedo, in her first-ever appearance on the show. She’s pretty much the best person and we’re stoked to have her on the pod.

And it was good that Mary Ann was on the show this week as she wrote about half the dang site. Which meant that we got to include all sorts of her work in the rundown. Here’s the agenda:

And that’s a wrap, for, well, at least the next 5 seconds.
Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#boston, #brazil, #brex, #design, #dropbox, #equity, #equity-podcast, #fintech, #flink, #fundings-exits, #grammarly, #latam, #latin-america, #noredink, #nubank, #playbook, #ramp, #startups

A Silicon Valley VC firm with $1.8B in assets was hit by ransomware

Advanced Technology Ventures, a Silicon Valley venture capital firm with more than $1.8 billion in assets under its management, was hit by a ransomware attack in July that saw cybercriminals steal personal information on the company’s private investors, or limited partners (LPs).

In a letter to the Maine attorney general’s office, ATV said it became aware of the attack on July 9 after its servers storing financial information had been encrypted by ransomware. By July 26, the ATV learned that data had been stolen from the servers before the files were encrypted, a common “double extortion” tactic used by ransomware groups, which then threaten to publish the files online if the ransom to decrypt the files is not paid.

The letter said ATV believes the names, email addresses, phone numbers and Social Security numbers of the individual investors in ATV’s funds were stolen in the attack. Some 300 individuals were affected by the incident, including one person in Maine, according to a listing on the Maine attorney general’s data breach notification portal.

Venture capital firms often do not disclose all of their LPs — the investors who have thrown millions into an investment vehicle — to the public. A number of pre-approved names may be included in an announcement, but overall, a company’s private investors try to stay that way: private. The reasons vary, but it comes down to secrecy and a degree of competitive advantage: The firm may not want competitors to know who is backing them, and an investor may not want others to know where their money is going. This particular attack likely stole key information on a hush-hush part of how venture money works.

ATV said it notified the FBI about the attack. A spokesperson for the FBI did not immediately comment when reached by TechCrunch. ATV’s managing director Mike Carusi did not respond to questions sent by TechCrunch on Monday.

The venture capital firm, based in Menlo Park, California with offices in Boston, was founded in 1979 and invests largely in technology, communications, software and services, and healthcare technology. The company was an early investor in many of the startups from the last decade, like software library Fandango, Host Analytics (now Planfun) and Apptegic (now Evergage). Its more recent investments include Tripwire, which was later sold to cybersecurity company Belden for $710 million; Cedexis, a network traffic monitoring startup acquired by Cisco in 2018; and Actifo, which was sold to Google in 2020.


Natasha Mascarenhas contributed reporting. Send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send TechCrunch files or documents using our SecureDrop.

#attorney-general, #atv, #boston, #california, #cedexis, #cisco, #cybercrime, #encryption, #fandango, #federal-bureau-of-investigation, #google, #healthcare-technology, #maine, #private-equity, #ransomware, #securedrop, #security, #signal, #software, #spokesperson, #venture-capital

Pillar VC closes $192M for two funds targeting SaaS, crypto, biotech, manufacturing

As its name suggests, venture firm Pillar VC is focused on building “pillar” companies in Boston and across the Northeast.

The Boston-based seed-stage firm closed a raise of $192 million of capital that was split into two funds, $169 million for Pillar III and $23 million for Pillar Select. More than 25 investors are backing the new fund, including portfolio founders.

Jamie Goldstein, Sarah Hodges and Russ Wilcox are Pillar VC’s three partners, and all three lead investments for Pillar. The trio all have backgrounds as entrepreneurs: Goldstein, who has spent the past two decades in VC, co-founded speech recognition company PureSpeech, which was acquired by Voice Control Systems; Hodges was at online learning company Pluralsight; and Wilcox was CEO of electronic paper company E Ink, which he sold in 2009.

Pillar typically invests in a range of enterprise and consumer startups and aims to target Pillar III at startups focused on biology, enterprise SaaS, AI/ML, crypto, fintech, hardware, manufacturing and logistics. The firm will make pre-seed investments of $50,000 to $500,000 and seed-round investments of $2 million to $6 million.

One of the unique aspects of the firm is that it will buy common stock so that it will be aligned with founders and take on the same risks, Goldstein told TechCrunch.

The firm, founded in 2016, already has 50 portfolio companies from its first two funds — Pillar I, which raised $57 million, and Pillar $100 million. These include cryptocurrency company Circle, which announced a SPAC earlier this month, 3D printing company Desktop Metal that went public, also via SPAC, last year, and PillPack, which was bought by Amazon in 2018.

“Pillar is an experiment, answering the question of ‘what would happen if unicorn CEOs came in and helped bootstrap the next generation’,” Wilcox said. “The experience is working, and Pillar does what VCs ought to do, which is back first-of-its-kind ideas.”

In addition to leading investments, Hodges leads the Pillar VC platform for the firm’s portfolio companies. Many of the portfolio companies are spinouts from universities, and need help turning that technology into a company. Pillar provides guidance to recruit a CEO or partner on the business side, leadership development, recruit talent and makes introductions to potential customers.

Pillar also intends to invest a third of the new fund into that biology category, specifically looking at the convergence of life science and technology, Wilcox said.

In its second fund, the firm started Petri, a pre-seed bio accelerator focused on biotech, and brought in founders using computation and engineering to develop technologies around the areas of agriculture, genetics, cell and gene therapies, medical data and drug discovery. The third fund will continue to support the accelerator through both pre-seed and seed investments.

The first investments from Pillar III are being finalized, but Hodges expects to infuse capital into another 50 companies.

“We are super bullish on Boston,” she added. “So many companies here are growing to be household names, and an exciting energy is coming out.”

 

#accel, #boston, #circle, #cryptocurrency, #desktop-metal, #enterprise, #funding, #jamie-goldstein, #pillar-vc, #pillpack, #russ-wilcox, #sarah-hodges, #tc, #venture-capital

American Express taps startup BodesWell for expansion into financial planning

American Express is branching out into financial planning, with a little help from a seven-person startup called BodesWell.

This week, the credit card giant launched a pilot of its first self-service digital financial planning tool, dubbed “My Financial Plan (MFP).” The six-month pilot kicked off on July 11 with about 25,000 select Amex cardmembers.

American Express quietly invested in BodesWell in late 2020 via its venture arm, Amex Ventures. Since then, the financial services behemoth teamed up with the tiny startup to develop the financial planning tool for its users. The new product is designed to give users a complete picture of their financial health and help them make and achieve major life goals, such as buying a house or retirement.

TechCrunch talked with Amex Ventures’ Julia Huang, who led the investment and strategy around the new product, and BodesWell co-founder and CEO Matthew Bellows to learn more details.

The pair actually met while serving on a panel together in 2019. 

“I was drawn to the fact that it was not a round-up savings tool, but rather a holistic tool to understand your full financial picture that could be used to plan for the financial impact of your life decisions,” Huang told TechCrunch.

Before deciding to invest in BodesWell, Huang says Amex Ventures — which over time has backed more than 70 startups — had “evaluated the space quite extensively.”

Huang introduced Bellows and his staff to Amex’s Digital Lab team and they embarked on jointly developing a specialized offering for Amex customers. (While Bellow is based in Boston, he says the startup is “globally distributed.”)

“Our goal is to democratize financial planning with our cardmembers by providing detailed insights and forecasts to help them with their holistic planning,” she told TechCrunch.

Image Credits: Amex Ventures

Bellows started BodesWell in early 2019 with the goal of empowering clients and customers to build their own financial plan.

“So much of financial planning software is aimed at financial advisors, and requires them to run it,” he said. “So, most people can’t get the benefits of financial planning…Our hope is to expand benefits to a lot more people.”

BodesWell will guide users in setting up a financial plan and will work even better if they sync with their other financial information via Plaid so it can “update in real time,” Huang said.

The tool “takes into account income, assets, expenses and liabilities — what cash flow looks like holistically so that users can drag & drop to plan life events,” Bellow said. 

An estimated 85 million American households don’t have a financial, planner for a variety of reasons — including mistrust of a planner’s intentions or just feeling overwhelmed by the process.

The product is free during the pilot phase and American Express hasn’t yet determined if it will charge for it afterwards.

“We’re gauging first for engagement and the power of the product for our customers,” Huang told TechCrunch. “We want to make sure the product resonates and that we iterate on the product to make sure it’s good for the broader population. Our primary goal is that our customers use it and find it valuable.”

Amex Ventures has formed “some level of partnership” with more than two-thirds of its portfolio companies, she added.

“We try to engage with our portfolio in that way, to provide value with our startup ecosystem,” Huang said.

For its part, BodesWell had previously raised about $1.5 million from investors such as Cleo Capital, Ex Ventures, Riot.vc, GritCapital and Argon Capital and angels like HubSpot CEO Brian Halligan and Kintent CEO Sravish Sridhar.

#american-express, #amex, #boston, #brian-halligan, #cleo-capital, #finance, #financial-advisor, #fintech, #funding, #fundings-exits, #kintent, #money, #planner, #recent-funding, #startup, #startup-company, #startups, #tc, #venture-capital

Drata raises $25M Series A to expand its security compliance platform

Security compliance is precisely three things: incredibly boring, time consuming, and entirely necessary to run a business in the modern age. Compliance isn’t going away, but startups like Drata are making it slightly easier to bear.

Drata helps companies get their SOC 2 compliance quicker by using automation. SOC 2 is a certification used to show that a company can store customer data in the cloud securely, but the process is notoriously complex and can take months to complete — and you have to do it all over again every year. That’s particularly burdensome for startups and smaller firms.

Drata says it can get companies SOC 2-compliant faster and keep them in compliance for longer by integrating with popular business tools and cloud services to get a better picture of a company’s security posture.

Now with a new round of $25 million at Series A in the bank, Drata said it’s expanding its compliance platform to also include ISO 27001, another core security standard used all over the world to help companies protect their systems and safeguard data.

The round landed six months after its $3.2 million seed round in January, and was led by GGV Capital, with participation from Silicon Valley CISO Investors, Okta Ventures, Cowboy Ventures, Leaders Fund, and SV Angel.

Drata CEO and co-founder Adam Markowitz told TechCrunch that the company is growing on average 100% month-over-month since it launched out of stealth and is serving hundreds of customers, including three-person startups to publicly traded companies.

The startup joins several other companies in the compliance space. Secureframe raised $18 million at Series A in March to offer SOC 2 and ISO 27001 certifications. Strike Graph raised a $3.9 million seed round last year to help companies automate security audits and get FedRamp certification needed to provide technology to the federal government. And, Startup Battlefield participant Osano in 2019 raised $5.4 million at Series A to build out its risk and compliance platform.

Related funding news:

#adam-markowitz, #bank, #boston, #cloud-services, #computing, #cowboy-ventures, #federal-government, #finance, #ggv-capital, #gv, #investment, #leaders-fund, #okta-ventures, #security, #startup-company, #techcrunch

Transmit Security raises $543M Series A to kill off the password

Transmit Security, a Boston-based startup that’s on a mission to rid the world of passwords, has raised a massive $543 million in Series A funding.

The funding round, said to be the largest Series A investment in cybersecurity history and one of the highest valuations for a bootstrapped company, was led by Insight Partners and General Atlantic, with additional investment from Cyberstarts, Geodesic, SYN Ventures, Vintage, and Artisanal Ventures. 

Transmit Security said it has a pre-money valuation of $2.2 billion, and will use the new funds to expand its reach and investing in key global areas to grow the organization.

Ultimately, however, the funding round will help the company to accelerate its mission to help the world go passwordless. Organizations lose millions of dollars every year due to “inherently unsafe” password-based authentication, according to the startup; not only do weak passwords account for more than 80% of all data breaches, but the average help desk labor cost to reset a single password stands at more than $70. 

Transmit says its biometric-based authenticator is the first natively passwordless identity and risk management solution, and it has already been adopted by a number of big-name brands including Lowes, Santander, and UBS. The solution, which currently handles more than 9,000 authentication requests per second, can reduce account resets by 96%, the company says, and reduces customer authentication from 1 minute to 2 seconds. 

“By eliminating passwords, businesses can immediately reduce churn and cart abandonment and provide superior security for personal data,” said Transmit Security CEO Mickey Boodaei, who co-founded the company in 2014. “Our customers, whether they are in the retail, banking, financial, telecommunications, or automotive sectors, understand that providing an optimized identity experience is a multimillion-dollar challenge. With this latest round of funding from premier partners, we can significantly expand our reach to help rid the world of passwords.”

Transmit Security isn’t the only company that’s on a mission to kill off the password. Microsoft has announced plans to make Windows 10 password-free, and Apple recently previewed Passkeys in iCloud Keychain, a method of passwordless authentication powered by WebAuthn, and Face ID and Touch ID.

#access-control, #authenticator, #banking, #boston, #ceo, #computer-security, #cryptography, #funding, #general-atlantic, #identification, #insight-partners, #lowes, #microsoft, #microsoft-windows, #password, #retail, #security, #telecommunications, #transmit-security, #ubs

Cyber security training platform Immersive Labs closes $75M Series C led by Insight Partners

Immersive Labs, a platform which teaches cyber security skills corporate employees by using real, up-to-date threat intelligence in a “gamified” way, has closed a $75 million Series C funding round led by new investors Insight Partners alongside Menlo Ventures, Citi Ventures and existing investor Goldman Sachs Asset Management.

The investment will be used to scale Immersive’s offering in the US and take advantage of the new wave of interest in cyber threats caused by so many people working remotely, post-pandemic. Founded in 2017, Immersive Labs now has 200 people, with joint operations HQs in Bristol, UK, and Boston, US. It plans to raise headcount to over 600 in the next two years and establish operations in new regions throughout APAC and Europe. Immersive’s ‘Cyber Workforce Optimization’ platform claims to offer board-level metrics and benchmarking to gauge how the skills inside organizations are coping.

Immersive has now raised a total of $123m in venture funding and counts HSBC, Vodafone, and the NHS as customers. The company says it is growing at “over 100% year-on-year”.

James Hadley, CEO and founder of Immersive Labs, said: “With cyber risk becoming a problem for a growing number of business functions, cybersecurity knowledge and skills should no longer be the preserve of a few technical people hidden away in a back office. Everyone from the teams who build software, to the CEO, now need to play their part in addressing a pervasive company issue. This requires unlocking and evidencing skills in a much broader group of people.”

Ryan Hinkle, managing director at Insight Partners, said: “With significant global customer and revenue growth over the last few years, Immersive Labs has established a strong position in the fast-developing cyber skills space. With influential leadership, an innovative product in a growing market, and strong user engagement, the company is in a position to continue to lead the cyber readiness market.”

Speaking to me over an interview, Hadley added: “We chose Insight Partners because they’ve got a real strength in enterprise B2B which is where we sell to CIOs and CEOs… We want to be the next Darktrace in terms of a successful UK cybersecurity company.”

The comparison might not be that fanciful. Immersive Labs came out of the CYLON cyber accelerator, similar to Darktrace, has the same investors as Darktrace, but has in fact attracted $75m for its Series C, whereas Darktrace didn’t manage that level until Series D. Darktrace has now IPO’d in the London for £1.7bn.

Hadley, a former GCHQ security researcher and trainer, came up with the idea for the cyber skills platform while leading cyber training himself. I asked him why he thinks Immersive has managed to come up with a ‘flywheel effect’ with its platform.

“People always talk about all the cyber threats getting worse, but it really is now and it’s in the public domain. We’ve got a strong belief that cybersecurity is no longer the responsibility of the geeks in the basement. Actually, it’s business-wide. And now the tidal wave is coming. Cybercrime is going to go off the scale this year and next because companies are paying the ransoms. And as a result of that, we’re putting in analytics to measure decision-making in a crisis. It’s just resonating really well with every company regardless of CIO or vertical,” he told me.

#boston, #bristol, #ceo, #cio, #citi-ventures, #computer-security, #crime, #cybercrime, #darktrace, #data-security, #europe, #gchq, #hsbc, #immersive, #immersive-labs, #london, #menlo-ventures, #nhs, #series-c, #tc, #united-kingdom, #united-states, #vodafone

Croatia’s Gideon Brothers raises $31M for its 
3D vision-enabled autonomous warehouse robots

Proving that Central and Eastern Europe remains a powerhouse of hardware engineering matched with software, Gideon Brothers (GB), a Zagreb, Croatia-based robotics and AI startup, has raised a $31 million Series A round led by Koch Disruptive Technologies (KDT), the venture and growth arm of Koch Industries Inc., with participation from DB Schenker, Prologis Ventures, and Rite-Hite.

The round also includes participation from several of Gideon Brothers’ existing backers: Taavet Hinrikus (co-founder of TransferWise), Pentland Ventures, Peaksjah, HCVC (Hardware Club), Ivan Topčić, Nenad Bakić, and Luca Ascani.

The investment will be used to accelerate the development and commercialization of GB’s AI and 3D vision-based ‘autonomous mobile robots’ or ‘AMRs’. These perform simple tasks such as transporting, picking up, and dropping off products in order to free up humans to perform more valuable tasks.

The company will also expand its operations in the EU and US by opening offices in Munich, Germany and Boston, Massachusetts, respectively.

Gideon Brothers founders

Gideon Brothers founders

Gideon Brothers make robots and the accompanying software platform that specializes in horizontal and vertical handling processes for logistics, warehousing, manufacturing, and retail businesses. For obvious reasons, the need to roboticize supply chains has exploded during the pandemic.

Matija Kopić, CEO of Gideon Brothers, said: “The pandemic has greatly accelerated the adoption of smart automation, and we are ready to meet the unprecedented market demand. The best way to do it is by marrying our proprietary solutions with the largest, most demanding customers out there. Our strategic partners have real challenges that our robots are already solving, and, with us, they’re seizing the incredible opportunity right now to effect robotic-powered change to some of the world’s most innovative organizations.”

He added: “Partnering with these forward-thinking industry leaders will help us expand our global footprint, but we will always stay true to our Croatian roots. That is our superpower. The Croatian start-up scene is growing exponentially and we want to unlock further opportunities for our country to become a robotics & AI powerhouse.”

Annant Patel, Director at Koch Disruptive Technologies said: “With more than 300 Koch operations and production units globally, KDT recognizes the unique capabilities of and potential for Gideon Brothers’ technology to substantially transform how businesses can approach warehouse and manufacturing processes through cutting edge AI and 3D AMR technology.”

Xavier Garijo, Member of the Board of Management for Contract Logistics, DB Schenker added: “Our partnership with Gideon Brothers secures our access to best in class robotics and intelligent material handling solutions to serve our customers in the most efficient way.”

GB’s competitors include Seegrid, Teradyne (MiR), Vecna Robotics, Fetch Robotics, AutoGuide Mobile Robots, Geek+ and Otto Motors.

#articles, #artificial-intelligence, #boston, #central-europe, #ceo, #co-founder, #croatia, #db-schenker, #director, #eastern-europe, #europe, #european-union, #fetch-robotics, #geek, #germany, #gideon-brothers, #hardware-club, #koch-disruptive-technologies, #manufacturing, #massachusetts, #munich, #otto-motors, #robot, #robotics, #science-and-technology, #software-platform, #taavet-hinrikus, #tc, #teradyne, #transferwise, #united-states, #zagreb

Apptopia raises $20M to expand its competitive intelligence business beyond mobile

Boston-based Apptopia, a company providing competitive intelligence in the mobile app ecosystem, has closed on $20 million in Series C funding aimed at fueling its expansion beyond the world of mobile apps. The new financing was led by ABS Capital Partners, and follows three consecutive years of 50% year-over-year growth for Apptopia’s business, which has been profitable since the beginning of last year, the company says.

Existing investors, including Blossom Street Ventures, also participated in the round. ABS Capital’s Mike Avon, a co-founder of Millennial Media, and Paul Mariani, are joining Apptopia’s board with this round.

The funding follows what Apptopia says has been increased demand from brands to better understand the digital aspects of their businesses.

Today, Apptopia’s customers include hundreds of corporations and financial institutions, including Google, Visa, Coca-Cola, Target, Zoom, NBC, Unity Technologies, Microsoft, Adobe, Glu, Andreessen Horowitz and Facebook.

In the past, Apptopia’s customers were examining digital engagement and interactions from a macro level, but now they’re looking to dive deeper into specific details, requiring more data. For example, a brand may have previously wanted to know how well a competitor’s promotion fared in terms of new users or app sessions. But now they want to know the answers to specific questions —  like how many unique users participated, whether those users were existing customers, whether they returned after the promotion ended, and so on.

The majority of Apptopia’s business is now focused on delivering these sorts of answers to enterprise customers who subscribe to Apptopia’s data — and possibly, to the data from its competitors like Sensor Tower and App Annie, with the goal of blending datasets together for a more accurate understanding of the competitive landscape.

Apptopia’s own data, historically, was not always seen as being the most accurate, admits Apptopia CEO Jonathan Kay. But it has improved over the years.

Kay, previously Apptopia COO, is now taking over the top role from co-founder Eliran Sapir, who’s transitioning to chairman of the board as the company enters its next phase of growth.

Apptopia’s rivals like Sensor Tower and App Annie use mobile panels to gather app data, among other methods, Kay explains. These panels involve consumer-facing apps like VPN clients and ad blockers, which users would download not necessarily understanding that they were agreeing to having their app usage data collected. This led to some controversy as the app data industry’s open secret was exposed to consumers by the media, and the companies tweaked their disclosures, as a result.

But the practice continues and has not impacted the companies’ growth. Sensor Tower, for example, raised $45 million last year, as demand for app data continued to grow. And all involved businesses are expanding with new products and services for their data-hungry customer bases.

Image Credits: Apptopia

Apptopia, meanwhile, decided not to grow its business on the back of mobile panels. (Though in its earlier days it did test and then scrap such a plan.)

It gains access to data from its app developer customers — and this data is already aggregated and anonymized from the developers’ Apple and Google Analytics accounts.

Initially, this method put Apptopia at a disadvantage. Rivals had more accurate data from about 2016 through 2018 because of their use of mobile panels, Kay says. But Apptopia made a strategic decision to not take this sort of risk — that is, build a business that Apple or Google could shut off at any time.

“Instead, what we did is we spent years investing into data science and algorithms,” notes Kay. “We figured out how to extract an equal or greater signal from the same data set that [competitors] had access to.”

Using what Kay describes as “huge, huge amounts of historical data,” Apptopia over time learned what sort of signals went into an app’s app store ranking. A lot of people still think an app’s rank is largely determined by downloads, but there are now a variety of signals that inform rank, Kay points out.

“Really, a rank is just an accumulation of analytical data points that Apple and Google give points for,” he explains. This includes things like number of sessions, how many users, how much time is spent in an app, and more. “Because we didn’t have these panels, we had to spend years figuring out how to do reverse engineering better than our competitors. And, eventually, we figured out how to get the same signal that they could get from the panel from rank. That’s what allowed us to have such a fast-growing, successful business over the past several years.”

As Apptopia was already profitable, it didn’t need to fundraise. But the company wanted to accelerate its expansion into new areas, including its planned expansion outside of mobile apps.

Today, consumers use “apps” on their computers, on their smartwatches and on their TV, in addition to their phones and tablets. And businesses no longer want to know just what’s happening on mobile — they want the full picture of “app” usage.

“We figured out a way to do that that doesn’t rely on any of what our competitors have done in the past,” says Kay. “So, we will not be using any apps to spy on people,” he states.

However, the company was not prepared to offer further details around its future product plans at this time. But Kay said Apptopia would not rule out partnerships or being acquisitive to accomplish its goals going forward.

Apptopia also sees a broader future in making its app data more accessible. Last year, for instance, it partnered with Bloomberg to bring mobile data to investors via the Bloomberg App Portal on the Bloomberg Terminal. And it now works with Amazon’s AWS Data Exchange and Snowflake to make access to app data available in other channels, as well. Future partnerships of a similar nature could come into play as another means of differentiating Apptopia’s data from its rivals.

The company declined to offer its current revenue run rate or valuation, but notes that it tripled its valuation from its last fundraise at the end of 2019.

In addition to product expansions, the company plans to leverage the funds to grow its team of 55 by another 25 in 2021, including in engineering and analysts. And it will grow its management team, adding a CFO, CPO, and CMO this year.

To date, Apptopia has raised $30 million in outside capital.

#abs-capital-partners, #app-developers, #app-stores, #apps, #apptopia, #blossom-street-ventures, #boston, #funding, #mobile, #mobile-app, #mobile-apps, #publishers

Knox Financial raises $10M to take the pain out of being a landlord

We’ve all heard the phrase “passive income” to describe how people can make money by owning rental properties. Many Americans would love to passively earn money, but the process of becoming a landlord can be intimidating and complicated. 

I mean, how many people have looked back and wished they hadn’t sold a property after seeing its value rise years after selling it?

And those who are already landlords can get overwhelmed by the complexities of managing properties.

One startup out of Boston, Knox Financial, aims to help people identify and manage residential rentals with its algorithm-based platform, and it’s raised a $10 million Series A to help it further that goal. Boston-based G20 Ventures led the round, which included participation from Greycroft, Pillar VC, 2LVC, and Gaingels.  

The investment brings Knox’s total raised since its inception in 2018 to $14.7 million. The company closed on a $3 million seed round in January 2020, led by Greycroft.

Knox co-founder and CEO David Friedman is no stranger to startups. He founded Boston Logic – an integrated marketing platform and online marketing services for real estate offices and agents – in 2004. He sold that company (now under the name Propertybase) to Providence Equity for an undisclosed amount in 2016.

Knox launched its platform in March of 2019, with the goal of offering homeowners who are ready to move “a completely hands-off way” of converting a home they’re moving out of into an investment property. It also claims to help landlords more easily and efficiently manage their rentals.

At the time of its seed round early last year, the company was only operating in the Boston market and had 50 units on its platform. It’s now operating in seven states, has “hundreds” of investment properties on its platform and is overseeing a portfolio of more than $100 million.

So how does it work? Once a property is enrolled on Knox’s “Frictionless Ownership Platform,” the company automates and oversees the property’s finances and taxes, insurance, leasing and legal, tenant and property care, banking and bill pay.

Knox also has developed a rental pricing and projection model for calculating the investment rate of return a property will produce over time.

Image Credits: Knox Financial

“We save investors a lot and almost always make their portfolios more profitable,” Friedman said. “If someone is moving or upsizing, we can turn properties into incredible ROI generators or cash flow.”

The company’s revenue model is simple.

When a dollar of rent moves through our system, we keep a dime,” Friedman told TechCrunch. “We align our interests with our customers. If there’s no rent coming in, we’re not making money. Or if a tenant doesn’t pay rent, we don’t make money.”

Knox plans to use its new capital to continue expanding geographically and getting the word out to more people.

“We want to become the de facto platform for real estate investment acquisition and ownership,” Friedman said. “And we have to be coast to coast to really do that for everybody. So, we’re still very early in our growth trajectory.”

Bob Hower, co-founder and partner of G20 Ventures, shared that weeks after his college graduation, he had bought a fixer upper with his mother’s help. A week after finishing renovations, he put the house on the market. Over the subsequent 5 months, he gradually reduced the price as the market softened, and eventually the property sold at a small profit.

“That house now is worth a multiple of what I paid for it,” Hower recalls. “In hindsight, the mistake I made was deciding to sell the house at all.”

That experience helped Hower appreciate what he describes as a “clarity of thinking” in Knox’s business model.

“Had Knox existed decades ago, I’d likely still have that fixer-upper I bought after college,” he said. “Investing platforms such as Betterment have collapsed multiple advising and optimization activities into a simple single-sign-on service, and Knox is the first company to apply this type model to residential real estate investing.”

#articles, #banking, #boston, #david-friedman, #finance, #funding, #fundings-exits, #g20-ventures, #greycroft, #knox, #knox-financial, #landlord, #pillar, #real-estate, #recent-funding, #renting, #startups, #tc, #venture-capital

The Klaviyo EC-1

E-commerce is booming as retailers race to transform their brick-and-mortar footprints into online storefronts. By some counts, the market grew an astonishing 42% in 2020 in the wake of the COVID-19 pandemic, and estimates show that online spending in the U.S. will surpass $1 trillion by 2022. It’s a bonanza, and everyone is figuring out this new terrain.

Consumers are likely familiar with the front-end brands for these storefronts — with companies like Amazon, Shopify, Square, and Stripe owning attention — but it’s the tooling behind the curtain that is increasingly determining the competitiveness of individual stores.

Klaviyo may not be a household name to consumers (at least, not yet), but in many ways, this startup has become the standard by which email marketers are judged today, triangulating against veterans Mailchimp and Constant Contact and riding the e-commerce wave to new heights.

Founded in 2012, this Boston-based company helps marketers personalize and automate their email messaging to customers. By now, most people are intimately familiar with these kinds of emails; if you’ve ever given your email address to an online store, the entreaties to come back to your abandoned cart or browse the latest sale are Klaviyo’s bread and butter.

It may seem obvious in retrospect that email would grow to become a premier platform for marketing, but this wasn’t the case even a few years ago when social ads and search engine marketing were the dominant paradigm. Today, owned marketing and customer experience management are white-hot trends, and Klaviyo has surged from a lifestyle business to a multi-billion dollar behemoth in just a few short years. Its story is at the heart of the internet economy today, and the future.

TechCrunch’s writer and analyst for this EC-1 is Chris Morrison. Morrison, who previously wrote our EC-1 on Roblox, has been a writer and independent game developer covering the video game industry and the marketing challenges that come with publishing. As an analyst and a potential user, he’s in a unique position to explain the Klaviyo story. The lead editor for this package was Danny Crichton, the assistant editor was Ram Iyer, the copy editor was Richard Dal Porto and illustrations were created by Nigel Sussman.

Klaviyo had no say in the content of this analysis and did not get advance access to it. Morrison has no financial ties to Klaviyo or other conflicts of interest to disclose.

The Klaviyo EC-1 comprises four main articles numbering 9,700 words and a reading time of 43 minutes. Let’s take a look:

  • Part 1: Origin storyHow Klaviyo transformed from a lifestyle business into a $4.15B email titan” (2,600 words/10 minutes) — Explores the rise of Klaviyo from a database for e-commerce data into a modern email powerhouse as it successively learned from customers and bootstrapped in the absence of funding from accelerators and early VCs.
  • Part 2: Business and growthHow Klaviyo used data and no-code to transform owned marketing” (3,000 words/12 minutes) — Analyzes Klaviyo’s recent growth and how marketers increasingly focus on owned marketing channels and customer experience management.
  • Part 3: Dynamics of e-commerce marketingMarketing in 2021 is emotional and not just transactional” (2,200 words/9 minutes) — To fully understand Klaviyo and this new world of martech, this article contextualizes how and why marketers are increasingly trying to personalize and build deeper emotional bonds with their customers outside of social media channels.
  • Part 4: Lessons on startup growthDrama and quirk aren’t necessary for startup success” (1,900 words/8 minutes) — Founders shouldn’t have to keep learning the same lessons over and over again. Klaviyo offers a number of tried-and-true tutorials to understand how to build a competitive startup and not get bogged down in finding product-market fit and scaling.

We’re always iterating on the EC-1 format. If you have questions, comments or ideas, please send an email to TechCrunch Managing Editor Danny Crichton at danny@techcrunch.com.

#boston, #ec-marketing-tech, #ec-1, #enterprise, #klaviyo, #saas, #tc

How Klaviyo transformed from a lifestyle business into a $4.15B email titan

Startups are stories of feverish dreams and obsessive fears. Short of hearing it from the source, a glimpse into the inbox of a founder would be the best way to experience the travails they endure on the way to building a business. A customer finally makes a purchase, a VC invests or walks away, an employee signs their offer letter — all of the major and minor milestones of a startup are communicated via that now-ancient medium of email.

Current Klaviyo users may be surprised to hear that email was not a part of the initial product.

Email’s ubiquity is only part of the story, though. It’s also a symbol of freedom: The last social platform that remains relatively open and free from the clutches of a single monopoly owner. It’s a market rife with entrenched incumbents, but one that simultaneously continues to invite founders to find some new take on this venerable communications channel and make it better for everyone.

That was the mission that Andrew Bialecki and Ed Hallen undertook when they founded Klaviyo back in 2012. What they perhaps didn’t bank on was just how long of a route they were about to take — or how many rejections they might find in their own inboxes from accelerators and VCs who never thought a new generation of email service providers could make it.

So they bootstrapped, kept things lean. They debated canceling dinners to pay the bills when customers churned. And along the way, they built a special startup that is today valued at a whopping $4.15 billion. Klaviyo is the story of how two scrappy, inexperienced entrepreneurs set out to build a lifestyle business — and ended up creating an email titan.

Racing to the starting line

Klaviyo’s origin story sounds a bit like the generic advice given by every book on entrepreneurship. Andrew Bialecki — he goes by AB — had a need that no existing company filled. So, he started a company to address that need.

It began with what he calls a side hustle: a website devoted to cataloging the dates and locations of running races. Bialecki had the technical chops to build it, but the data wasn’t already available online and he needed race organizers to provide it. That, in turn, meant he needed to let them know his site existed and constantly follow up to make sure they were using it.

“I realized I’m on the phone with people and it’s never going to scale. After a while, I was working on that while I was at another startup, and I said I have two options here. Either I can go all-in on road races, or all-in on the problem: ‘How do we help these businesses connect with the people using their software or products?’” recalls Bialecki.

By then, he already had a co-founder in mind. Bialecki had been a student together with Ed Hallen at MIT, but the pair actually met while working at Applied Predictive Technologies (APT), a Washington, D.C. tech consultancy.

“I’d read all those books on, hey, when you’re looking for someone to start a business with, you want someone with similar values who’s also complementary,” says Bialecki. “I’d known he was kind of interested in starting a company, and we had really complementary skillsets. I loved the engineering and design and product, and he was a big product guy too, but was used to working with customers and clients.”

An email company that didn’t (initially) do email

Current Klaviyo users may be surprised to hear that email was not part of the product that emerged. Instead, Bialecki and Hallen built a database to collect all the e-commerce data that was falling through the cracks.

“Once we really talked to a lot of e-commerce people, it was clear there were long-standing problems,” says Hallen.

Bialecki adds, “There are facts you know, like their name, their email address, their favorite color or something they told you about their birthday. But some of the harder stuff was, jeez, how many times has this person visited my website, bought something from me, what products did they buy and how is that trending over time? Were they a really frequent customer that dropped off the face of the Earth?”

As they spoke to customers, the founders realized that handling customers’ data and making it useful to them was going to be critical to Klaviyo’s success. It just so happened that gathering data matched well with their experiences working at APT.

“We had a ton of experience stitching together data sources,” says Hallen. “We took that expertise and put it as our foundation. What’s the most broken, largest market, and let’s really tie data to it, not as an afterthought.”

Klaviyo’s two co-founders Andrew Bialecki and Ed Hallen in July 2012. Image Credits: Klaviyo

What that required, in practical terms, was spending the initial months building a custom database to store the disparate data types that come up during e-commerce transactions — events, documents and object data models. Conor O’Mahony, who joined the company in 2018 as chief product officer and departed this month to become an advisor, says that the company’s early time investment in its database laid the foundations for its later success in scaling up.

#boston, #ec-marketing-tech, #ec-1, #enterprise, #saas, #tc

How Klaviyo used data and no-code to transform owned marketing

Email is the communication medium that refuses to die.

“Eventually, every technology is trumped by something new and better. And I feel that email is ready to be trumped. But by what?” wrote the venture capitalist Fred Wilson in 2007. Three years later, he updated readers that other forms of messaging had outgrown email. “It looks like email’s reign as the king of communication is ending and social networking is now supreme,” he said. (To be fair to Wilson, his view was nuanced enough to continue investing in email tech.)

Despite the competition, Klaviyo didn’t just break into the market — it has also achieved an unusual level of excitement and loyalty among marketers despite its youthful history.

Investors weren’t alone — marketers have also spent years anticipating the next big thing.

“It was SMS, it was YouTube, it was Instagram. Before that it was Facebook, then it was Snapchat and TikTok. I kinda feel like individually all those things are fleeting. I think people found: You know what? Everyone still opens their emails every day,” says Darin Hager, a former sneaker entrepreneur who is now an email marketing manager at Adjust Media.

Email has an estimated four billion users today and continues to grow steadily even as mature social networks plateau. Estimates of the number of nonspam messages sent each day range from 25 billion to over 300 billion.

Unsurprisingly for a marketing channel with so much volume, there’s voluminous competition to send and program those emails. Yet, despite the competition, Klaviyo didn’t just break into the market — it has also achieved an unusual level of excitement and loyalty among marketers despite its youthful history.

“If you’re not using Klaviyo and you’re in e-commerce, then it’s not very professional. If you see ‘Sent by Constant Contact or Mailchimp’ at the bottom of an email by a brand, it makes it look like they’re not really there yet,” Hager said.

How did Klaviyo become the standard solution among email marketers?

In Klaviyo’s origin story, we delved into part of the answer: The company began life as an e-commerce analytics service. Once it matured to compete as an email service provider, Klaviyo benefited from the edge given by its deeper, more comprehensive focus on data.

However, that leaves several questions unanswered. Why is email so important to e-commerce? What are the substantive differences between Klaviyo’s feature set and those of its competitors? And why did several large, well-funded incumbents fail to capitalize on building an advantage in data first?

In this section, we’ll answer those questions — as well as laying out the significance of COVID-19 on the e-commerce market, and how newsletters and AI figure into the company’s future.

A positive Outlook on email’s longevity

Email is one of the oldest tech verticals: Constant Contact, one of the most venerable email service providers (ESPs), was founded in 1995, went public in 2007 and was taken private in 2015 for $1 billion. By the time Klaviyo started in 2012, the space was well served by numerous incumbents.

#boston, #ec-marketing, #ec-marketing-tech, #ec-1, #enterprise, #klaviyo, #no-code, #saas, #tc

Marketing in 2021 is emotional and not just transactional

Brands are emotions made physical. The clothes we wear, the media we consume, the devices we use — all signal not only to others what we value and see in ourselves, they also are a way to construct our very identities. Experimenting to deepen that bond has been at the core of the marketing profession for a century; its origins rooted in Freudian psychoanalysis.

There had always been one critical limitation, though: Marketers had to appeal to the masses. Radio, television and print media allowed brands to deliver only one message to everyone, no matter if their product conferred luxury or smart cost-consciousness.

On the internet, the masses have been shattered into ever smaller shards, shifting that marketing calculus toward targeted audiences and social network interest groups. Today, niche brands, large corporations and every business in between are reaching ever-narrower audiences.

Marketers who become expert at personalization, especially for existing customers through owned marketing platforms like email, will hold an edge over their competitors.

Yet, advertising and social networks are competitive marketplaces. Over time, prices to reach niche audiences rise, and strategies that once worked become unviable. In 2021, these perpetual challenges are joined by two new factors: a fresh influx of new e-commerce brands and changing privacy policies on third-party platforms.

Klaviyo benefits from these secular trends. While the cost or difficulty of acquiring new customers may increase, as we looked at in the second part of this EC-1, the cost of emailing an existing one remains much the same. Marketers who become expert at personalization, especially for existing customers through owned marketing platforms like email, will hold an edge over their competitors. It’s no longer about marketing to narrow slices of audiences — it’s about building an emotional bond with an audience of one.

To a booming economy, now ad inflation

While 2020 was a banner year for e-commerce in the wake of the COVID-19 pandemic, the early months of 2021 have brought about a new problem: Customer acquisition costs are rising, sometimes to a worrying degree. For instance, one company interviewed by TechCrunch that did not wish to be named said it has seen its return on investment for Facebook ads fall by nearly half in the first months of 2021. Such inflation has also been predicted by firms like ECI Media Management.

There are two possible reasons for this increase. First, an unprecedented number of companies are moving online, spurred by COVID-19 and worldwide lockdowns.

#boston, #ec-marketing-tech, #ec-1, #enterprise, #klaviyo, #saas, #tc

Drama and quirk aren’t necessary for startup success

Many of the stories in our EC-1 series tell tales of startups in the wilderness hacking out green field opportunities. Klaviyo is a different breed of company: One that went into an established market and challenged powerful incumbents, ultimately finding success with a new, more data-oriented generation of email marketers.

As such, the lessons that it offers are, perhaps, more subtle; its insights bordering on common sense.

But as the saying goes, common sense to an uncommon degree becomes wisdom. Here are four pieces of wisdom I’ve gleaned from Klaviyo’s story:

Drama and sizzle help companies stand out, undoubtedly. But are they necessary for success? Klaviyo’s story suggests otherwise.

Lesson 1: Drama and quirk aren’t necessary for startup success

Silicon Valley has become a showcase for oddity. Ironically, we all enjoy “Silicon Valley” (the show) or “The Social Network.” Unironically, we toss around phrases like “the hustle” and “sweat equity.” Hot companies often stand out with stories of intense struggle and failure, a larger-than-life founder or a chaotic (and often toxic) management structure.

Drama and sizzle help companies stand out, undoubtedly. But are they necessary for success? Klaviyo’s story suggests otherwise.

#boston, #ec-marketing-tech, #ec-1, #enterprise, #saas, #tc

Grocery startup Mercato spilled years of data, but didn’t tell its customers

A security lapse at online grocery delivery startup Mercato exposed tens of thousands of customer orders, TechCrunch has learned.

A person with knowledge of the incident told TechCrunch that the incident happened in January after one of the company’s cloud storage buckets, hosted on Amazon’s cloud, was left open and unprotected.

The company fixed the data spill, but has not yet alerted its customers.

Mercato was founded in 2015 and helps over a thousand smaller grocers and specialty food stores get online for pickup or delivery, without having to sign up for delivery services like Instacart or Amazon Fresh. Mercato operates in Boston, Chicago, Los Angeles, and New York, where the company is headquartered.

TechCrunch obtained a copy of the exposed data and verified a portion of the records by matching names and addresses against known existing accounts and public records. The data set contained more than 70,000 orders dating between September 2015 and November 2019, and included customer names and email addresses, home addresses, and order details. Each record also had the user’s IP address of the device they used to place the order.

The data set also included the personal data and order details of company executives.

It’s not clear how the security lapse happened since storage buckets on Amazon’s cloud are private by default, or when the company learned of the exposure.

Companies are required to disclose data breaches or security lapses to state attorneys-general, but no notices have been published where they are required by law, such as California. The data set had more than 1,800 residents in California, more than three times the number needed to trigger mandatory disclosure under the state’s data breach notification laws.

It’s also not known if Mercato disclosed the incident to investors ahead of its $26 million Series A raise earlier this month. Velvet Sea Ventures, which led the round, did not respond to emails requesting comment.

In a statement, Mercato chief executive Bobby Brannigan confirmed the incident but declined to answer our questions, citing an ongoing investigation.

“We are conducting a complete audit using a third party and will be contacting the individuals who have been affected. We are confident that no credit card data was accessed because we do not store those details on our servers. We will continually inform all authoritative bodies and stakeholders, including investors, regarding the findings of our audit and any steps needed to remedy this situation,” said Brannigan.


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#amazon, #boston, #california, #chicago, #cloud-computing, #cloud-infrastructure, #cloud-storage, #computer-security, #computing, #data-breach, #data-security, #ecommerce, #food, #instacart, #los-angeles, #mercato, #new-york, #security, #technology, #united-states, #velvet-sea-ventures

Tines raises $26M Series B for its no-code security automation platform

Tines, a no-code automation platform co-founded by two senior cybersecurity operators, today announced that it has raised a $26 million Series B funding round led by Addition. Existing investors Accel and Blossom Capital participated in this round, which also includes strategic investments from CrowdStrike and Silicon Valley CISO Investments. After this round, which brings the total funding in the company to $41.1 million, Tines is now valued at $300 million.

Given that Tines co-founders Eoin Hinchy and Thomas Kinsella were both in senior security roles at DocuSign before they left to start their own company in 2018, it’s maybe no surprise that the company’s platform launched with a strong focus on security operations. As such, it combines security orchestration and robotic process automation with a low-code/no-code user interface.

“Tines is on a mission to allow frontline employees to focus on more business-critical tasks and improve their wellbeing by reducing the burden of ‘busy work’ by helping automate any manual workflow and making existing teams more efficient, effective, and engaged,” the company notes in today’s announcement.

The idea here is to free analysts from spending time on routine repetitive tasks and allow them to focus on those areas where they can have the most impact. The tools features pre-configured integrations with a variety of business and security tools, but for more sophisticated users, it also features the ability to hook into virtually any API.

Image Credits: Tines

The company argues that even non-technical employees should be able to learn the ins and outs of its platform within about three hours (sidenote: it’s nice to see a no-code platform acknowledge that users will actually need to spend some time with it before they can become productive).

“If software is eating the world, automation is eating the enterprise,” Hinchy said. “Yet, the majority of progress in this space still requires non-technical teams to depend on software engineers to implement their automation. Other platforms are generally either too hard to use, not flexible enough or not sufficiently robust for mission-critical workflows like cybersecurity. Tines empowers enterprise teams to automate any of their own manual workloads independently, making their jobs more rewarding while simultaneously delivering enormous value for their organizations.”

Current Tines customers include the likes of Box, Canva, OpenTable and Sophos.

The company, which was founded in Dublin, Ireland and recently opened an office in Boston, plans to use the new funding to double its 18-person team in order to support its product growth.

“Tines has quickly established itself as a market leader in enterprise automation,” said Lee Fixel, founder of Addition. “We look forward to supporting Eoin and the Tines team as they continue to scale the business and enhance their product — which is beloved by their unmatched customer base.”

Image Credits: Tines

#addition, #api, #automation, #boston, #box, #business, #business-process-automation, #canva, #crowdstrike, #docusign, #dublin, #ireland, #lee-fixel, #low-code, #market-leader, #no-code, #opentable, #recent-funding, #security, #security-tools, #silicon-valley-ciso-investments, #sophos, #startups, #tc, #tines, #tools

Notarize raises $130M, tripling valuation on the back of 600% YoY revenue growth

When the world shifted toward virtual one year ago, one service in particular saw heated demand: digital notary services.

The ability to get a document notarized without leaving one’s home suddenly became more of a necessity than a luxury. Pat Kinsel, founder and CEO of Boston-based Notarize, worked to get appropriate legislation passed across the country to make it possible for more people in more states to use remote online notarization (RON) services. 

That hard work has paid off. Today, Notarize has announced $130 million in Series D funding led by fintech-focused VC firm Canapi Ventures after experiencing 600% year over year revenue growth. The round values Notarize at $760 million, which is triple its valuation at the time of its $35 million Series C in March of 2020. This latest round is larger than the sum of all of the company’s previous rounds to date, and brings Notarize’s total raised to $213 million since its 2015 inception.

A slew of other investors participated in the round, including Alphabet’s independent growth fund CapitalG, Citi Ventures, Wells Fargo, True Bridge Capital Partners and existing backers Camber Creek, Ludlow Ventures, NAR’s Second Century Ventures, and Fifth Wall Ventures.

Notarize insists that it “isn’t just a notary company.” Rather, Canapi Ventures Partner Neil Underwood described it as the ‘last mile’ of businesses (such as iBuyers, for example). 

The company has also evolved to “also bring trust and identity verification” into those businesses’ processes.

Over the past year, Notarize has seen a massive increase in transactions and inked new partnerships with companies such as Adobe, Dropbox, Stripe and Zillow Group, among others. It’s seen big spikes in demand from the real estate, financial services, retail and automotive sectors.

“In 2020, the world rushed to digitize. Online commerce ballooned, and businesses in almost every industry needed to transition to digital basically overnight so they could continue uninterrupted,” Kinsel said. “Notarize was there to help them safely close these deals with trust and convenience.”  

The company plans to use its new capital to expand its platform and product and scale “to serve enterprises of all sizes.” It also plans to double down on hiring in the next year.

“Notarize is disrupting outdated business models and technologies, and there’s massive potential, particularly in the financial services space, as more companies will need to offer secure digital alternatives to in-person transactions,” Canapi’s Underwood said.

Notarize’s success comes after a difficult 2019, when the company saw “critical financing” fall through and had to lay off staff, according to Kinsel. Talk about a turnaround story.

#boston, #camber-creek, #canapi-ventures, #capitalg, #ceo, #citi-ventures, #dropbox, #fifth-wall, #finance, #financial-services, #funding, #fundings-exits, #law, #ludlow-ventures, #notarize, #online-commerce, #pat-kinsel, #real-estate, #recent-funding, #startups, #stripe, #venture-capital, #wells-fargo, #zillow

Appfire, provider of Atlassian apps, raises $100M to continue its buying spree

Appfire, a Boston-based provider of software development apps, announced Tuesday that it has received a $100 million investment from growth private equity firm TA Associates.

Founded in 2005, Appfire was bootstrapped until it got $49 million from Silversmith Capital Partners last May. Since that time, Appfire has acquired six companies in the Atlassian “ecosystem,” including Botron, Beecom, Innovalog, Navarambh, Artemis and Bolo.

The Boston-based company has been profitable for over a decade, according to Randall Ward, co-founder and CEO of Appfire. And while Ward declined to reveal valuation or hard revenue numbers, he did say that Appfire has seen its ARR more than double over the past year.

Since last June alone, the company says it has experienced:

  • A 103% year over year increase in ARR.
  • A 258% YOY increase in enterprise subscription revenue (data center only). 
  • A 182% YOY increase in all subscription revenue (data center and cloud).  

So why the need for institutional capital? With the latest funding, Appfire intends to extend its buying spree of complementary apps. 

Appfire has been acquiring businesses every six to eight weeks, and it plans to continue scooping them up at that pace, according to Ward.

It’s also looking to let shareholders cash in on their options.

Fun fact: Atlassian itself was bootstrapped for nearly a decade. The Australian enterprise software company was profitable from its inception in 2001 before taking its first round of external capital, a $60 million financing led by Accel, in July 2010. The financing was primarily secondary.

Some context

Appfire was initially a professional services company before transitioning into products in 2013. The company says it has “developed domain expertise in creating, launching and distributing apps” through the Atlassian marketplace. Today, the company has 85 products on that marketplace and more than 110,000 active installations globally spanning workflow automation, business intelligence, publishing and administrative tools. 

Specifically, the company’s Bob Swift, Feed Three and Wittified brand apps aim to help companies like Google, Amazon and Starbucks streamline product development through improved collaboration, security, reporting and automation.

“We started this business 15 years ago with the goal of building software applications for customers,” Ward told TechCrunch. “At that time, there were no marketplaces, so iTunes marketplace didn’t exist, Google Play didn’t exist, but yet we were seeing that applications were getting smaller in size, Mozilla was putting out plugins. My co-founder and I were sitting on the floor of a warehouse in Maynard, Massachusetts and we conceived of this company called Appfire, and boy did we pick the right name.”

The pair then stumbled upon a project by which a friend of a friend was looking for them to integrate two pieces of software with software from Atlassian.

“It was brand new to us — we had never heard of it — a software called JIRA and another piece of software called Confluence,” Ward recalls. “About three months later we launched a project and then got introduced to the co-founders of Atlassian.”

In 2017, Appfire decided it wanted to focus full time on becoming “the biggest app platform and aggregator.”

“So we decided to wind down all the other little special side projects for Atlassian delivering services to customers, and really put all of our eggs in this marketplace basket,” Ward recalls. 

It was at that point the company began looking for external capital. With this last raise, though, Ward says Appfire was not necessarily looking for more cash.

When approached by TA, Appfire asked if it could create more employee equity programs so the company could be an employee-led business. It also asked if it could take 1% of its equity and contribute to the Pledge 1% initiative.

“They said yes,” Ward said. “So that led us to this latest funding.”

Appfire is also moving into business intelligence and data analytics apps for Tableau and Microsoft Power BI.

As mentioned above, some of its latest funding will go back to existing shareholders, Ward said. The remainder will go into continuing to grow the business.

“We have a lot of organic and inorganic growth opportunities,” he added. “…That obviously takes some momentum.”

Michael Libert, a principal of TA Associates, said his firm had been tracking Appfire’s progress for “quite some time.” The company’s apps, he said, do not require complex training, allowing customers to improve productivity “at a low cost,” leading to further customer adoption and enabling “a solid land-and-expand strategy.”

“We found the company’s high-quality business model, impressive organic growth and recent significant acquisitive activity particularly attractive,” Libert told TechCrunch.

#appfire, #apps, #atlassian, #boston, #business, #business-intelligence, #cloud, #confluence, #economy, #enterprise-software, #funding, #fundings-exits, #jira, #massachusetts, #private-equity, #saas, #secondaries, #ta-associates, #tc

Eying sustainability gains for its supply chain, BMW backs Boston Metal’s CO2-free iron production tech

BMW has joined the cohort of investors that are backing Boston Metal’s carbon dioxide-free production technology for steel.

The Boston-based startup had targeted a $50 million raise earlier in the year, as TechCrunch reported, and BMW’s addition closes out that round, according to a person familiar with the company.

Through a commitment from BMW iVentures, the automaker’s investment arm, Boston Metal will have an in to a company with massive demands for more sustainably manufactured metal. For instance, BMW Group press plants in Europe process more than half a million tonnes of steel per year, the company said.

“We systematically identify the raw materials and components in our supplier network with the highest CO2 emissions from production,” said Dr Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, in a statement. “Steel is one of them, but it is vital to car production. For this reason, we have set ourselves the goal of continuously reducing CO2 emissions in the steel supply chain. By 2030, CO2 emissions should be about two million tonnes lower than today’s figure.”

Conventional steel production requires blast furnaces that generate carbon dioxide emissions, but using Boston Metal’s process, an electrolysis cell produces the pig iron that gets processed into steel, the company said.

The addition of BMW to its investor group, which already includes Bill Gates’ Breakthrough Energy Ventures and other strategic and financial investors, caps the fundraising process with another corporate partner wielding incredible industry influence.

“Our investors span across the steel value chain, from the upstream mining and iron ore companies to the downstream end customer, and validate Boston Metal’s innovative process to produce high-quality steel, cost-competitively, and at scale,” said chief executive officer and founder, Tadeu Carneiro.

#automotive-industry, #bmw, #boston, #carbon-dioxide, #cars, #chief-executive-officer, #europe, #investor, #metal, #steel, #tc

Hi Marley raises $25M to fund its AI-powered communication platform for the insurance industry

If you’ve ever had to file a claim with your insurance company, you know that it’s not exactly fun. Often, you’re on hold indefinitely waiting to speak to a live person. And if you’ve ever had to file an auto or home insurance claim, you know that all the back and forth with your carrier and the various vendors can take up so much time.

Hi Marley is a Boston startup that has set out to modernize communications in the insurance space by giving carriers a way to “seamlessly” communicate with their policyholders via text. The company just closed on a $25 million Series B funding round to help scale its SMS platform.

Hi Marley also includes other vendors in that communicatiofns channel, such as car repair or rental companies. The goal is to keep policyholders happier and less likely to churn to another carrier, in addition to helping carriers resolve claims faster.

On the back end, Hi Marley is a platform of apps, APIs and a layer of intelligence that integrates with other core systems such as Guidewire and Duck Creek “to deliver critical insights” to the carriers, according to CEO and co-founder Mike Greene. Per its website, Hi Marley’s messaging solution aims to streamline communication around claims, underwriting and policyholder service interactions “while simultaneously connecting everyone who touches that insurance experience into a singular, real-time conversation.”

Demand is there, and no doubt the COVID-19 pandemic forcing more people to go digital has led to still more consumer demand for new ways to communicate. Last year, the number of carriers using Hi Marley’s platform doubled, and the company saw a 4x increase in its user base, Greene said. Currently, the startup has over 40 customers live in production — including American Family, MetLife, Auto-Owners, Erie and MAPFRE.

“Unlike horizontal chat solutions, we are tackling the entire communication layer across the insurance enterprise for our carriers and their ecosystem partners,” Greene told TechCrunch.

Greene is no stranger to the space, having worked in the insurance sector for years. He previously co-founded and led Futurity Group, which was acquired by AON, a software and services company focused on monitoring and improving performance in P&C insurance.

Emergence Capital led the Series B round, which brings Hi Marley’s total raised since its 2017 inception to $41.7 million. Existing backers Underscore, True Ventures, Bain Capital Ventures, and Greenspring also participated in the financing, along with additional investors including Brewer Lane.

Emergence Capital Founder & General Partner Gordon Ritter — who took a seat on Hi Marley’s board — said his firm has been focused on finding the next iconic industry cloud company within the vertical for “quite some time.” 

“In the same way Veeva [a company Ritter chaired to a successful IPO in 2013] expanded from CRM to additional software solutions that power the pharma industry, we continue to be bullish on startups building vertically-focused solutions that can power an entire industry,” Ritter said.

Historically, he added, insurance has been viewed as a necessary evil, a purchase made purely for the sake of safety and security. And in today’s environment, carriers using “old” communication strategies will likely see a negative impact on performance, Ritter believes.

“Most of us can likely agree that our experiences dealing with insurers during times of need have been less than ideal, if not unpleasant altogether,” said Ritter, who actually has family with roots in the insurance industry. “But Mike wants to reverse the indifference or negative reputation; he is on a mission to make insurance lovable A new communication fabric between carriers and their ecosystem to benefit end customers is needed.”

Looking ahead, Hi Marley plans to use its new capital to create new features, ensure the platform scales across the enterprise and (naturally) do some hiring.

#artificial-intelligence, #bain-capital-ventures, #boston, #emergence-capital, #funding, #insurance, #insurtech, #recent-funding, #sms, #startups, #tc, #true-ventures, #venture-capital

Aqua Security raises $135M at a $1B valuation for its cloud native security service

Aqua Security, a Boston- and Tel Aviv-based security startup that focuses squarely on securing cloud-native services, today announced that it has raised a $135 million Series E funding round at a $1 billion valuation. The round was led by ION Crossover Partners. Existing investors M12 Ventures, Lightspeed Venture Partners, Insight Partners, TLV Partners, Greenspring Associates and Acrew Capital also participated. In total, Aqua Security has now raised $265 million since it was founded in 2015.

The company was one of the earliest to focus on securing container deployments. And while many of its competitors were acquired over the years, Aqua remains independent and is now likely on a path to an IPO. When it launched, the industry focus was still very much on Docker and Docker containers. To the detriment of Docker, that quickly shifted to Kubernetes, which is now the de facto standard. But enterprises are also now looking at serverless and other new technologies on top of this new stack.

“Enterprises that five years ago were experimenting with different types of technologies are now facing a completely different technology stack, a completely different ecosystem and a completely new set of security requirements,” Aqua CEO Dror Davidoff told me. And with these new security requirements came a plethora of startups, all focusing on specific parts of the stack.

Image Credits: Aqua Security

What set Aqua apart, Dror argues, is that it managed to 1) become the best solution for container security and 2) realized that to succeed in the long run, it had to become a platform that would secure the entire cloud-native environment. About two years ago, the company made this switch from a product to a platform, as Davidoff describes it.

“There was a spree of acquisitions by CheckPoint and Palo Alto [Networks] and Trend [Micro],” Davidoff said. “They all started to acquire pieces and tried to build a more complete offering. The big advantage for Aqua was that we had everything natively built on one platform. […] Five years later, everyone is talking about cloud-native security. No one says ‘container security’ or ‘serverless security’ anymore. And Aqua is practically the broadest cloud-native security [platform].”

One interesting aspect of Aqua’s strategy is that it continues to bet on open source, too. Trivy, its open-source vulnerability scanner, is the default scanner for GitLab’s Harbor Registry and the CNCF’s Artifact Hub, for example.

“We are probably the best security open-source player there is because not only do we secure from vulnerable open source, we are also very active in the open-source community,” Davidoff said (with maybe a bit of hyperbole). “We provide tools to the community that are open source. To keep evolving, we have a whole open-source team. It’s part of the philosophy here that we want to be part of the community and it really helps us to understand it better and provide the right tools.”

In 2020, Aqua, which mostly focuses on mid-size and larger companies, doubled the number of paying customers and it now has more than half a dozen customers with an ARR of over $1 million each.

Davidoff tells me the company wasn’t actively looking for new funding. Its last funding round came together only a year ago, after all. But the team decided that it wanted to be able to double down on its current strategy and raise sooner than originally planned. ION had been interested in working with Aqua for a while, Davidoff told me, and while the company received other offers, the team decided to go ahead with ION as the lead investor (with all of Aqua’s existing investors also participating in this round).

“We want to grow from a product perspective, we want to grow from a go-to-market [perspective] and expand our geographical coverage — and we also want to be a little more acquisitive. That’s another direction we’re looking at because now we have the platform that allows us to do that. […] I feel we can take the company to great heights. That’s the plan. The market opportunity allows us to dream big.”