Ketch raises another $20M as demand grows for its privacy data control platform

Six months after securing a $23 million Series A round, Ketch, a startup providing online privacy regulation and data compliance, brought in an additional $20 million in A1 funding, this time led by Acrew Capital.

Returning with Acrew for the second round are CRV, super{set} (the startup studio founded by Ketch’s co-founders CEO Tom Chavez and CTO Vivek Vaidya), Ridge Ventures and Silicon Valley Bank. The new investment gives Ketch a total of $43 million raised since the company came out of stealth earlier this year.

In 2020, Ketch introduced its data control platform for programmatic privacy, governance and security. The platform automates data control and consent management so that consumers’ privacy preferences are honored and implemented.

Enterprises are looking for a way to meet consumer needs and accommodate their rights and consents. At the same time, companies want data to fuel their growth and gain the trust of consumers, Chavez told TechCrunch.

There is also a matter of security, with much effort going into ransomware and malware, but Chavez feels a big opportunity is to bring security to the data wherever it lies. Once the infrastructure is in place for data control it needs to be at the level of individual cells and rows, he said.

“If someone wants to be deleted, there is a challenge in finding your specific row of data,” he added. “That is an exercise in data control.”

Ketch’s customer base grew by more than 300% since its March Series A announcement, and the new funding will go toward expanding its sales and go-to-market teams, Chavez said.

Ketch app. Image Credits: Ketch

This year, the company launched Ketch OTC, a free-to-use privacy tool that streamlines all aspects of privacy so that enterprise compliance programs build trust and reduce friction. Customer growth through OTC increased five times in six months. More recently, Qonsent, which developing a consent user experience, is using Ketch’s APIs and infrastructure, Chavez said.

When looking for strategic partners, Chavez and Vaidya wanted to have people around the table who have a deep context on what they were doing and could provide advice as they built out their products. They found that in Acrew founding partner Theresia Gouw, whom Chavez referred to as “the OG of privacy and security.”

Gouw has been investing in security and privacy for over 20 years and says Ketch is flipping the data privacy and security model on its head by putting it in the hands of developers. When she saw more people working from home and more data breaches, she saw an opportunity to increase and double down on Acrew’s initial investment.

She explained that Ketch is differentiating itself from competitors by taking data privacy and security and tying it to the data itself to empower software developers. With the OTC tool, similar to putting locks and cameras on a home, developers can download the API and attach rules to all of a user’s data.

“The magic of Ketch is that you can take the security and governance rules and embed them with the software and the piece of data,” Gouw added.

#acrew-capital, #advertising-tech, #api, #cloud-computing, #crv, #data-protection, #data-security, #enterprise, #funding, #ketch, #privacy, #recent-funding, #ridge-ventures, #silicon-valley-bank, #software-developers, #startups, #superset, #tc, #theresia-gouw, #tom-chavez

Spain’s Factorial raises $80M at a $530M valuation on the back of strong traction for its ‘Workday for SMBs’

Factorial, a startup out of Barcelona that has built a platform that lets SMBs run human resources functions with the same kind of tools that typically are used by much bigger companies, is today announcing some funding to bulk up its own position: the company has raised $80 million, funding that it will be using to expand its operations geographically — specifically deeper into Latin American markets — and to continue to augment its product with more features.

CEO Jordi Romero, who co-founded the startup with Pau Ramon and Bernat Farrero — said in an interview that Factorial has seen a huge boom of growth in the last 18 months and counts more than anything 75,000 customers across 65 countries, with the average size of each customer in the range of 100 employees, although they can be significantly (single-digit) smaller or potentially up to 1,000 (the “M” of SMB, or SME as it’s often called in Europe).

“We have a generous definition of SME,” Romero said of how the company first started with a target of 10-15 employees but is now working in the size bracket that it is. “But that is the limit. This is the segment that needs the most help. We see other competitors of ours are trying to move into SME and they are screwing up their product by making it too complex. SMEs want solutions that have as much data as possible in one single place. That is unique to the SME.” Customers can include smaller franchises of much larger organizations, too: KFC, Booking.com, and Whisbi are among those that fall into this category for Factorial.

Factorial offers a one-stop shop to manage hiring, onboarding, payroll management, time off, performance management, internal communications and more. Other services such as the actual process of payroll or sourcing candidates, it partners and integrates closely with more localized third parties.

The Series B is being led by Tiger Global, and past investors CRV, Creandum, Point Nine and K Fund also participating, at a valuation we understand from sources close to the deal to be around $530 million post-money. Factorial has raised $100 million to date, including a $16 million Series A round in early 2020, just ahead of the Covid-19 pandemic really taking hold of the world.

That timing turned out to be significant: Factorial, as you might expect of an HR startup, was shaped by Covid-19 in a pretty powerful way.

The pandemic, as we have seen, massively changed how — and where — many of us work. In the world of desk jobs, offices largely disappeared overnight, with people shifting to working at home in compliance with shelter-in-place orders to curb the spread of the virus, and then in many cases staying there even after those were lifted as companies grappled both with balancing the best (and least infectious) way forward and their own employees’ demands for safety and productivity. Front-line workers, meanwhile, faced a completely new set of challenges in doing their jobs, whether it was to minimize exposure to the coronavirus, or dealing with giant volumes of demand for their services. Across both, organizations were facing economics-based contractions, furloughs, and in other cases, hiring pushes, despite being office-less to carry all that out.

All of this had an impact on HR. People who needed to manage others, and those working for organizations, suddenly needed — and were willing to pay for — new kinds of tools to carry out their roles.

But it wasn’t always like this. In the early days, Romero said the company had to quickly adjust to what the market was doing.

“We target HR leaders and they are currently very distracted with furloughs and layoffs right now, so we turned around and focused on how we could provide the best value to them,” Romero said to me during the Series A back in early 2020. Then, Factorial made its product free to use and found new interest from businesses that had never used cloud-based services before but needed to get something quickly up and running to use while working from home (and that cloud migration turned out to be a much bigger trend played out across a number of sectors). Those turning to Factorial had previously kept all their records in local files or at best a “Dropbox folder, but nothing else,” Romero said.

It also provided tools specifically to address the most pressing needs HR people had at the time, such as guidance on how to implement furloughs and layoffs, best practices for communication policies and more. “We had to get creative,” Romero said.

But it wasn’t all simple. “We did suffer at the beginning,” Romero now says. “People were doing furloughs and [frankly] less attention was being paid to software purchasing. People were just surviving. Then gradually, people realized they needed to improve their systems in the cloud, to manage remote people better, and so on.” So after a couple of very slow months, things started to take off, he said.

Factorial’s rise is part of a much, longer-term bigger trend in which the enterprise technology world has at long last started to turn its attention to how to take the tools that originally were built for larger organizations, and right size them for smaller customers.

The metrics are completely different: large enterprises are harder to win as customers, but represent a giant payoff when they do sign up; smaller enterprises represent genuine scale since there are so many of them globally — 400 million, accounting for 95% of all firms worldwide. But so are the product demands, as Romero pointed out previously: SMBs also want powerful tools, but they need to work in a more efficient, and out-of-the-box way.

Factorial is not the only HR startup that has been honing in on this, of course. Among the wider field are PeopleHR, Workday, Infor, ADP, Zenefits, Gusto, IBM, Oracle, SAP and Rippling; and a very close competitor out of Europe, Germany’s Personio, raised $125 million on a $1.7 billion valuation earlier this year, speaking not just to the opportunity but the success it is seeing in it.

But the major fragmentation in the market, the fact that there are so many potential customers, and Factorial’s own rapid traction are three reasons why investors approached the startup, which was not proactively seeking funding when it decided to go ahead with this Series B.

“The HR software market opportunity is very large in Europe, and Factorial is incredibly well positioned to capitalize on it,” said John Curtius, Partner at Tiger Global, in a statement. “Our diligence found a product that delighted customers and a world-class team well-positioned to achieve Factorial’s potential.”

“It is now clear that labor markets around the world have shifted over the past 18 months,” added Reid Christian, general partner at CRV, which led its previous round, which had been CRV’s first investment in Spain. “This has strained employers who need to manage their HR processes and properly serve their employees. Factorial was always architected to support employers across geographies with their HR and payroll needs, and this has only accelerated the demand for their platform. We are excited to continue to support the company through this funding round and the next phase of growth for the business.”

Notably, Romero told me that the fundraising process really evolved between the two rounds, with the first needing him flying around the world to meet people, and the second happening over video links, while he was recovering himself from Covid-19. Given that it was not too long ago that the most ambitious startups in Europe were encouraged to relocate to the U.S. if they wanted to succeed, it seems that it’s not just the world of HR that is rapidly shifting in line with new global conditions.

#barcelona, #booking-com, #brazil, #ceo, #crv, #enterprise, #europe, #factorial, #general-partner, #germany, #hiring, #human-resource-management, #human-resources, #ibm, #k, #k-fund, #labor, #mathematics, #onboarding, #oracle, #payroll, #people-management, #performance-management, #personnel, #sap, #software, #spain, #tiger-global-management, #united-states, #zenefits

Fintech startup Jeeves raises $57M, goes from YC to $500M valuation in one year

Last summer, Jeeves was participating in Y Combinator’s summer batch as a fledgling fintech.

This June, the startup emerged from stealth with $31 million in equity and $100 million in debt financing. 

Today, the company, which is building an “all-in-one expense management platform” for global startups, is announcing that it has raised a $57 million Series B at a $500 million valuation. That’s up from a valuation of just north of $100 million at the time of Jeeves’ Series A, which closed in May and was announced in early June.

While the pace of funding these days is unlike most of us have ever seen before, it’s pretty remarkable that Jeeves essentially signed the term sheet for its Series B just two months after closing on its Series A. It’s also notable that just one year ago, it was wrapping up a YC cohort.

Jeeves was not necessarily looking to raise so soon, but fueled by its growth in revenue and spend after its Series A, which was led by Andreessen Horowitz (a16z), the company was approached by dozens of potential investors and offered multiple term sheets, according to CEO and co-founder Dileep Thazhmon. Jeeves moved forward with CRV, which had been interested since the A and built a relationship with Thazhmon, so it could further accelerate growth and launch in more countries, he said.

CRV led the Series B round, which also included participation from Tencent, Silicon Valley Bank, Alkeon Capital Management, Soros Fund Management and a high-profile group of angel investors including NBA stars Kevin Durant and Andre Iguodala, Odell Beckham Jr. and The Chainsmokers. Notably, the founders of a dozen unicorn companies also put money in the Series B including (but not limited to) Clip CEO Adolfo Babatz; QuintoAndar CEO Gabriel Braga; Uala CEO Pierpaolo Barbieri, BlockFi CEO Zac Prince; Mercury CEO Immad Akhund; Bitso founder Pablo Gonzalez; Monzo Bank’s Tom Blomfield; Intercom founder Des Traynor; Lithic CEO Bo Jiang as well as founders from UiPath, Auth0, GoCardless, Nubank, Rappi, Kavak and others.

Whew.

The “fully remote” Jeeves describes itself as the first “cross country, cross currency” expense management platform. The startup’s offering was live in Mexico and Canada and today launched in Colombia, the United Kingdom and Europe as a whole. 

Thazhmon and Sherwin Gandhi founded Jeeves last year under the premise that startups have traditionally had to rely on financial infrastructure that is local and country-specific. For example, a company with employees in Mexico and Colombia would require multiple vendors to cover its finance function in each country — a corporate card in Mexico and one in Colombia and another vendor for cross-border payments.

Jeeves claims that by using its platform’s proprietary Banking-as-a-Service infrastructure, any company can spin up their finance function “in minutes” and get access to 30 days of credit on a true corporate card (with 4% cash back), non card payment rails, as well as cross-border payments. Customers can also pay back in multiple currencies, reducing FX (foreign transaction) fees.

For example, a growing business can use a Jeeves card in Barcelona and pay it back in euros and use the same card in Mexico and pay it back in pesos, reducing any FX fees and providing instant spend reconciliation across currencies. 

Thazhmon believes that the “biggest thing” the company is building out is its own global BaaS layer, that sits across different banking entities in each country, and onto which the end user customer-facing Jeeves app plugs into.

Put simply, he said, “think of it as a BaaS platform, but with only one app — the Jeeves app — plugged into it.”

Image Credits: Jeeves

The startup has grown its transaction volume (GTV) by more than 5,000% since January, and both revenue and spend volume has increased more than 1,100% (11x) since its Series A earlier this year, according to Thazhmon.

Jeeves now covers more than 12 currencies and 10 countries across three continents. Mexico is its largest market. Jeeves is currently beta testing in Brazil and Chile and Thazhmon expects that by year’s end, it will be live in all of North America and Europe. Next year, it’s eyeing the Asian market, and Tencent should be able to help with that strategically, he said.

“We’re building an all-in-one expense management platform for startups in LatAm and global markets — cash, corporate cards, cross-border — all run on our own infrastructure,” Thazhmon told TechCrunch. “Our model is very similar to that of Uber’s launch model where we can launch very quickly because we don’t have to rebuild an entire infrastructure. When we launch in countries, we actually don’t have to rebuild a stack.”

Jeeves’ user base has been doubling every 60 days and now powers more than 1,000 companies across LatAm, Canada and Europe, including Bitso, Kavak, RappiPay, Belvo, Runa, Moons, Convictional, Muncher, Juniper, Trienta, Platzi, Worky and others, according to Thazhmon. The company says it has a current waitlist of over 15,000.

Jeeves plans to use its new capital toward its launch in Colombia, the U.K. and Europe. And, of course, toward more hiring. It’s already doubled its number of employees to 55 over the past month.

Former a16z partner Matt Hafemeister was so impressed with what Jeeves is building that in August he left the venture capital firm to join the startup as its head of growth. In working with the founders as an investor, he concluded that they ranked “among the best founders in fintech” he’d ever interacted with.

The decision to leave a16z also related to Jeeves’ inflection point, Hafemeister said. The startup is nearly doubling every month, and had already eclipsed year-end goals on revenue by mid-year.

It is evident Jeeves has found early product market fit and, given the speed of execution, I see Jeeves establishing itself as one of the most important fintech companies in the next few years,” Hafemeister told TechCrunch. “The company is transitioning from a seed company to a Series B company very quickly, and being able to help operationalize processes and play a role in their growth and maturity is an incredible opportunity for me.”

CRV General Partner Saar Gur (who is also an early investor in DoorDash, Patreon and Mercury) said he was blown away by Jeeves’ growth and how it has been “consistently hitting and exceeding targets month over month.” Plus, early feedback from customers has been overwhelmingly positive, Gur said.

“Jeeves is building products and infrastructure that are very difficult to execute but by doing the ‘hard things’ they offer incredible value to their customers,” he told TechCrunch. “We haven’t seen anyone build from the ground up with global operations in mind on day one.”

#a16z, #apps, #baas, #crv, #dileep-thazhmon, #finance, #fintech, #funding, #fundings-exits, #jeeves, #payments, #recent-funding, #saar-gur, #sherwin-gandhi, #startup, #startups, #venture-capital, #y-combinator, #yc

Cribl raises $200M to help enterprises do more with their data

At a time when remote work, cybersecurity attacks and increased privacy and compliance requirements threaten a company’s data, more companies are collecting and storing their observability data, but are being locked in with vendors or have difficulty accessing the data.

Enter Cribl. The San Francisco-based company is developing an “open ecosystem of data” for enterprises that utilizes unified data pipelines, called “observability pipelines,” to parse and route any type of data that flows through a corporate IT system. Users can then choose their own analytics tools and storage destinations like Splunk, Datadog and Exabeam, but without becoming dependent on a vendor.

The company announced Wednesday a $200 million round of Series C funding to value Cribl at $1.5 billion, according to a source close to the company. Greylock and Redpoint Ventures co-led the round and were joined by new investor IVP, existing investors Sequoia and CRV and strategic investment from Citi Ventures and CrowdStrike. The new capital infusion gives Cribl a total of $254 million in funding since the company was started in 2017, Cribl co-founder and CEO Clint Sharp told TechCrunch.

Sharp did not discuss the valuation; however, he believes that the round is “validation that the observability pipeline category is legit.” Data is growing at a compound annual growth rate of 25%, and organizations are collecting five times more data today than they did 10 years ago, he explained.

“Ultimately, they want to ask and answer questions, especially for IT and security people,” Sharp added. “When Zoom sends data on who started a phone call, that might be data I need to know so I know who is on the call from a security perspective and who they are communicating with. Also, who is sending files to whom and what machines are communicating together in case there is a malicious actor. We can also find out who is having a bad experience with the system and what resources they can access to try and troubleshoot the problem.”

Cribl also enables users to choose how they want to store their data, which is different from competitors that often lock companies into using only their products. Instead, customers can buy the best products from different categories and they will all talk to each other through Cribl, Sharp said.

Though Cribl is developing a pipeline for data, Sharp sees it more as an “observability lake,” as more companies have differing data storage needs. He explains that the lake is where all of the data will go that doesn’t need to go into an existing storage solution. The pipelines will send the data to specific tools and then collect the data, and what doesn’t fit will go back into the lake so companies have it to go back to later. Companies can keep the data for longer and more cost effectively.

Cribl said it is seven times more efficient at processing event data and boasts a customer list that includes Whole Foods, Vodafone, FINRA, Fannie Mae and Cox Automotive.

Sharp went after additional funding after seeing huge traction in its existing customer base, saying that “when you see that kind of traction, you want to keep doubling down.” His aim is to have a presence in every North American city and in Europe, to continue launching new products and growing the engineering team.

Up next, the company is focusing on go-to-market and engineering growth. Its headcount is 150 currently, and Sharp expects to grow that to 250 by the end of the year.

Over the last fiscal year, Cribl grew its revenue 293%, and Sharp expects that same trajectory for this year. The company is now at a growth stage, and with the new investment, he believes Cribl is the “future leader in observability.”

“This is a great investment for us, and every dollar, we believe, is going to create an outsized return as we are the only commercial company in this space,” he added.

Scott Raney, managing director at Redpoint Ventures, said his firm is a big enterprise investor in software, particularly in companies that help organizations leverage data to protect themselves, a sweet spot that Cribl falls into.

He feels Sharp is leading a team, having come from Splunk, that has accomplished a lot, has a vision and a handle on the business and knows the market well. Where Splunk is capturing the machine data and using its systems to extract the data, Cribl is doing something similar in directing the data where it needs to go, while also enabling companies to utilize multiple vendors and build apps to sit on top of its infrastructure.

“Cribl is adding opportunity by enriching the data flowing through, and the benefits are going to be meaningful in cost reduction,” Raney said. “The attitude out there is to put data in cheaper places, and afford more flexibility to extract data. Step one is to make that transition, and step two is how to drive the data sitting there. Cribl is doing something that will go from being a big business to a legacy company 30 years from now.”

#citi-ventures, #clint-sharp, #cloud, #computing, #cribl, #crowdstrike, #crv, #data-security, #datadog, #developer, #enterprise, #exabeam, #funding, #greylock, #information-technology, #ivp, #recent-funding, #redpoint-ventures, #scott-raney, #sequoia, #splunk, #startups, #storage-solution, #tc

API platform Postman valued at $5.6 billion in $225 million fundraise

San Francisco-based Postman, which operates a collaborative platform for developers to help them build, design, test and iterate their APIs, said on Wednesday it has raised $225 million in a new financing round that values it at $5.6 billion, up from $2 billion a year ago.

The startup’s new financing round — a Series D — was led by existing investor New York-headquartered Insight Partners. New investors including Coatue, Battery Ventures, and BOND also participated in the new round, which brings total raise across rounds to over $430 million. Existing investors Nexus Venture Partners and CRV also participated in the new round.

APIs provide a way for developers to connect their applications to other internal and external applications. But it’s a space that until the past decade not many firms have attempted to streamline. (Developers relied on — and many continue to do so — open source CLI tools such as curl and HTTPie. That said, Postman now has a number of competitors including Stoplight, and A16z and Tiger Global-backed Kong.)

Abhinav Asthana, a former intern at Yahoo, faced this frustration first hand and built a Chrome extension for himself and friends.

Little did he know just how many developers and firms needed it, too.

The six-year-old startup’s product, which began its journey in India, is today used by over 17 million developers and over 500,000 organizations including Microsoft, Salesforce, Stripe, Shopify, Cisco, and PayPal.

The list is big: Postman co-founder and chief executive Asthana told TechCrunch that 98% of the Fortune 500 companies are customers of Postman.

“We are solving a fundamental problem for the technology landscape. Big companies tend to be slower as they have many other things on their plate,” he told me two years ago.

Postman API Platform’s offerings

“Every company in every industry in the world today uses APIs and needs an API platform. This trend is only growing with the move to cloud and digital experiences,” he said in an interview with TechCrunch Tuesday.

The startup today leads the market and doesn’t compete with many players. Which would explain the investors’ excitement. The startup, which declined to share its revenue, raised the new round at over 100 multiple of its revenue, according to an investor with knowledge of the matter.

Postman’s platform is crucial for developers, but it was only recently that the startup expanded to create a public marketplace for developers and firms to find ready-made APIs to use.

“The Postman Public API Network connects millions of developers around the world and provides them with a space dedicated to discovering, exploring, and sharing of APIs. This was ultimately driven by our creation of public workspaces, which allows users to connect across different organizations,” Asthana said.

“With the emergence of APIs, we believe that this will usher in the next generation of no-code and ‘citizen developers.’ We encourage a world filled with innovation for everyone with different backgrounds and varying levels of technical experience. More and more, we’re seeing people in sales, marketing, and finance become more comfortable with APIs and become the champions of this technology,” he said.

The startup, which employs over 425 people, plans to deploy the fresh funding to hire more employees across sales, marketing, product, and engineering divisions.

Postman will also “heavily” invest in broadening its product roadmap. “We are expanding the Postman platform across areas that technical users need along with supporting the needs of business users. At a high level, we are investing in supporting workflows for all kinds of APIs — whether they are private APIs, partner APIs, or public APIs,” he said.

Some upcoming items on the roadmap include a new version of the Postman API, support for protocols like gRPC, ProtoBuf, and more extensive capabilities for GraphQL. “We are also focusing heavily on integrations with other vendors in the software development lifecycle like AWS, Git hosting providers like GitHub and GitLab. We are also releasing our Flow Runner tool, a no-code API composition tool to enable anyone to build API driven programs.”

The startup also plans to invest in supporting students through API literacy programs and contribute toward open source projects.

“APIs have quickly become the fundamental building blocks of software used by developers in every industry, in every country across the globe—and Postman has firmly established itself as the preferred platform for developers,” said Insight Partners Managing Director Jeff Horing in a statement.

“Postman has the opportunity to become a key pillar of how enterprises build, deliver products, and seamlessly enable partnerships across the ecosystem. Their continued, rapid expansion and strong management team point to a future for Postman with virtually unlimited possibilities.”

#battery-ventures, #bond, #cisco, #coatue, #crv, #funding, #insight-partners, #kong, #microsoft, #nexus-venture-partners, #paypal, #postman, #saas, #salesforce, #shopify, #stripe

Cybereason raises $275M at Series F, adds Steven Mnuchin to board

Cybereason, a US-Israeli late-stage cybersecurity startup that provides extended detection and response (XDR) services, has secured $275 million in Series F funding. 

The investment was led by Liberty Strategic Capital, a venture capital fund recently founded by Steven Mnuchin, who served as U.S. Treasury Secretary under the Trump administration. As part of the deal, Mnuchin will join Cybereason’s board of directors, along with Liberty advisor Gen. Joseph Dunford, who was chairman of the Joint Chiefs of Staff under Trump until his retirement in 2019.

Lior Div, CEO and co-founder of Cybereason, tells TechCrunch that the startup’s decision to work with Liberty Strategy Capital came down to the firm’s “massive network” and the “understanding of the financial and government markets that Mnuchin and Gen. Joseph Dunford bring to our team.”

“For example, the executive order on cybersecurity put out by the Biden Administration recommends that endpoint detection and response solutions be deployed on all endpoints,” Dior added. “This accelerates the importance of solutions like ours in the public market, and Liberty Strategic Capital has the relationships to help accelerate our go-to-market strategy in the federal sector.”

This round, which will be used to fuel “hypergrowth driven by strong market demand,” follows $389 million in prior funding from SoftBank, CRV, Spark Capital, and Lockheed Martin. The company didn’t state at what valuation it raised the funds, but it is estimated to be in the region of $3 billion.

Cybereason’s recent growth, which saw it end 2020 at over $120 million in annual recurring revenue, has been largely driven by its AI-powered platform. Unlike traditional alert-centric models, Cybereason’s Defense Platform is operation-centric, which means it exposes and remediates entire malicious operations. The service details the full attack story from root cause to impacted users and devices, which the company claims significantly reduces the time taken to investigate and recover from an enterprise-wide cyber attack. 

The company, whose competitors include the likes of BlackBerry-owned Cylance and CrowdStrike, also this week expanded its channel presence with the launch of its so-called Defenders League, a global program that enables channel partners to use its technology and services to help their customers prevent and recover from cyberattacks. Cybereason claims its technology has helped protect customers from the likes of the recent SolarWinds supply-chain attack and other high-profile ransomware attacks launched by DarkSide, REvil, and Conti groups. 

Today’s $275 million funding round is likely to be Cybereason’s last before it goes public. Div previously said in August 2019 the company planned to IPO within two years, though he wouldn’t be pressed on whether the company is gearing up to go public when asked by TechCrunch. However, the company did compare its latest investment to SentinelOne‘s November 2020 Series F round, which was secured just months before it filed for a $100 million IPO.

#artificial-intelligence, #biden-administration, #companies, #computing, #crowdstrike, #crv, #cybereason, #cylance, #donald-trump, #executive, #funding, #lockheed-martin, #neuberger-berman, #president, #security, #softbank, #softbank-group, #solarwinds, #spark-capital, #steve-mnuchin, #techcrunch, #united-states

#DealMonitor – #EXKLUSIV Raisin/Deposit Solutions-Fusion: Bewertung liegt bei 2,5 Milliarden – EQT Ventures investiert in Vectornator


Im aktuellen #DealMonitor für den 1. Juli 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.

MERGERS & ACQUISITIONS

Raisin/Deposit Solutions
+++ Die beiden FinTechs Deposit Solutions (Zinspilot) und Raisin (WeltSparen) gehören inzwischen – wie bereits berichtet – zusammen. Der Zusammenschluss erfolgt im Verhältnis 60 (Raisin) zu 40 % (Deposit Solutions). Das fusionierte Unternehmen wird nach einer Übergangszeit von Raisin-Gründer Tamaz Georgadze geführt. Deposit Solutions-Chef Tim Sievers wird das Unternehmen zum Jahresende verlassen. Das neue Unternehmen wird im Zuge der Fusion nach unseren Informationen mit 2,5 Milliarden Euro bewertet.  Wie zu hören ist, plant das FinTech bereits eine neue Investmentrunde. Mehr im  Insider-Podcast #EXKLUSIV

INVESTMENTS

Vectornator
+++ EQT Ventures investiert einen zweistelligen Millionenbetrag in Vectornator. Zusätzlich sind auch Secondaries, bei denen Altinvestoren Anteile verkaufen, geplant. Linearity wurde 2017 von Vladimir Danila und Marc Zacherl gegründet. Mit Hilfe von Vectornator können Designer Logos, Kunstwerke, Flyer, Webseiten und vieles mehr erstellen. Die Post-Money-Bewertung liegt bei 120 Millionen Euro. Zu den bisherigen Investoren zählen unter anderem 468 Capital, HV Capital und diverse Angel-Investoren wie Martin Sinner. Mehr im  Insider-Podcast #EXKLUSIV

Valyria
+++ Picus Capital investiert im Rahmen eines Convertibles rund 4 Millionen Euro in Valyria. Das Berliner PropTech, das insbesondere von Robin Behlau, Gründer von Käuferportal (inzwischen als Aroundhome bekannt) vorangetrieben wird, kümmert sich um den Kauf und Verkauf von Mehrfamilienhäusern. Valyria kombiniert dabei “die neueste Technologie mit Expertise”. Mehr im  Insider-Podcast #EXKLUSIV

Hashtag You
+++ Tengelmann Ventures (und nicht der Nachfolger Cusp Capital), der Konsumgüterkonzern Henkel, Fynveur, Founders First Capital und mehrere Angel-Investoren investieren in Hashtag You. Das junge Unternehmen, das 2018 von Akos Piffko, Ankur Bansal und Sascha Dexler, die zuvor bei Invincible Brands aktiv waren, gegründet wurde, baut Direct to Consumer-Marken wie Ava & May auf. Henkel kennt sich im D2C-Segment bereits aus, das Unternehmen kaufte Invicible Brands zuletzt die Marken HelloBody, Banana Beauty sowie Mermaid+Me ab. Mehr im  Insider-Podcast #EXKLUSIV

Voila
+++ Der Berliner Geldgeber Atlantic Food Labs investiert in Voila. Das Berliner Startup bringt seinen Nutzer:innen Restaurants nach Hause – bundesweit. Das Motto dabei lautet “Home Fine Dining”. In der Eigenbeschreibung heißt es: “Wir verbinden die besten Köche und Food Lover, um eine gehobene kulinarische Inhouse-Erfahrung zu Hause zu ermöglichen”. Voila wurde von Florian Berg (Fachkraft1) und Julius Wiesenhütter (früher bei Foodora, Caterwings und Delivery Hero akiv) gegründet. Mehr im  Insider-Podcast #EXKLUSIV

Checkly
+++ CRV und Altinvestoren wie Accel, Mango Capital und Guillermo Rauch investieren 10 Millionen Dollar in Checkly. Das 2018 von Hannes Lenke, Tim Nolet und Timo Euteneuer in Berlin gegründete Unternehmen positioniert sich als Monitoring-Plattform für Entwickler. Checkly ermöglicht es DevOps- und Engineering-Teams, API-Monitoring und Frontend-Tests auf über 20 globale Rechenenzentren durchzuführen. 2020 flossen bereits 2,25 Millionen in das Remote-First-Unternehmen.

Yamuntu
+++ Angel-Investoren wie Rolf Schrömgens (trivago), Philipp Frenkel (Mister Spex), Robert Kabs (moebel.de) und Yang Zou (Freachly) investieren eine niedrige siebenstellige Summe in Yamuntu. Das Hamburger Startup, das von Woundioun Sissoko, Nouri Alexander Hilscher und Oliver Krause gegründet wurde, macht Online-Shopper:innen zu Markenbotschaftern. “Der User verdient mit seiner Instagram Story Geld. Einfach die App herunterladen, bei einem der Partnershops das neue Lieblingsprodukt einkaufen und sobald das Produkt ankommt, über die App eine Story/Tiktok dazu posten”, teilt das Startup zum Konzept mit.

The Base
+++ 32nd Floor, ein Investmentableger der  skandinavischen Skjerven Group, und GDC Ventures (gehört zur Depot-Mutter Gries Deco Company), investieren 5 Millionen Euro in den Berliner Coliving-Anbieter The Base. “Das frische Kapital ermöglicht es uns, diese Expansion aktiv voranzutreiben, die gegenwärtigen – einzigartigen – Chancen am Immobilienmarkt zu nutzen und The Base europaweit als führende Coliving-Brand zu etablieren”, teilt das Unternehmen mit. Das Unternehmen wurde 2019 von Florian Färber gegründet.

INVESTMENTS

Icon Ventures
+++ Die Mobile-Marketing-Agentur Icon Group, früher als Iconmobile bekannt, legt mit Icon Ventures einen Venture-Capital-Fonds auf, im Topf sind 30 Millionen Euro – siehe TechCrunch. “The icon ventures VC fund will be accompanied by new company arm: ‘icon impact’, the continuation of iconmobile’s well-established product and experience innovation arm”, heißt es im Artikel.

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

#32nd-floor, #accel, #aktuell, #atlantic-food-labs, #checkly, #coliving, #crv, #deposit-solutions, #direct-to-consumer, #eqt-ventures, #fintech, #food, #founders-first-capital, #fynveur, #gdc-ventures, #gries-deco-company, #hamburg, #hashtag-you, #henkel, #icon-ventures, #mango-capital, #picus-capital, #proptech, #raisin, #skjerven-group, #tengelmann-ventures, #the-base, #valyria, #vectornator, #venture-capital, #voila, #yamuntu

Figure raises $7.5M to help startup employees better understand their compensation

The topic of compensation has historically been a delicate one that has left many people — especially startup employees — wondering just what drives what can feel like random decisions around pay and equity.

Last June, software engineers (and housemates) Miles Hobby and Geoffrey Tisserand set about trying to solve the problem for companies by developing a data-driven platform that aims to help companies structure their compensation plans and transparently communicate them to candidates.

Now today, the startup behind that platform, Figure, announced it has raised $7.5 million in seed funding led by CRV. Bling Capital, Better Tomorrow Ventures and Garage Capital also participated in the financing, along with angel investors such as AngelList co-founder Naval Ravikant, Jason Calacanis, Reddit CEO Steve Huffman and other executives based in Silicon Valley.

The startup has amassed a client list that includes other startups such as fintechs Brex and NerdWallet and AI-powered fitness company Tempo. 

Put simply, Hobby and Tisserand’s mission is to improve workflows and transparency around pay, particularly equity. The pair had both worked at startups themselves (Uber and Instacart, respectively) and ended up leaving money on the table when they left those companies because no one had properly explained to them what their equity, which changed at every valuation, meant.  

Figure co-founders and co-CEOs Miles Hobby and Geoffrey Tisserand. Image Credits: Figure

So, one of their goals was to create a solution that would provide a user-friendly explanation of what a person’s equity stake really means, from tax implications to whether or not they have to buy the stock and/or hold onto it.

“I’ve gone through the job search process many times before and there’s all these complex legal documents to understand why you’re getting 10,000 stock options, but obviously we knew the vast majority of people have no idea how that works,” Tisserand told TechCrunch. “We saw an opportunity there to help companies actually convey the value to their candidates while also making them aware of the potential risks of owning something that’s so illiquid.”

Image Credits: Figure

Another goal of Figure’s is to help create a more fair and balanced process about decisions around pay and equity so that there’s less inequality out there. Pointedly, it aims to remove some of the biases that exist around those decisions by systematizing the process.

“We saw a void in this kind of context around equity…and knew that there had to be a better way for companies to structure, manage and explain their compensation plans,” Hobby said.

To Hobby and Tisserand, Figure is designed to help stop instances of implicit bias.

“Compensation should be based on the work that you’re doing, and not gender or ethnic background,” Tisserand told TechCrunch. “We’re trying to give that context and remove biases. So, we’re trying to help at two different stages –– to surface inequities that already exist and make sure there are no anomalies, and then to help stop them before they can exist.”

Figure also aims to give companies the tools to educate candidates and employees on their total compensation — including equity, salary, benefits and bonuses — in a “straightforward and user-friendly” way. For example, it can create custom offer letters that interactively detail a candidate’s compensation.

“Our goal is for Figure to become an operating system for compensation, where a company can encode their compensation philosophy into our system, and we help them determine their job architecture, compensation bands and offer numbers while monitoring their compensation health to provide adjustment suggestions when needed,” Hobby said.

Post-hire, Figure’s compensation management system “helps keep everything running smoothly.”

Anna Khan, general partner of enterprise software at CRV, is joining Figure’s board as part of the funding. The decision to back the startup was in part personal, she said.

“I’d been investing in software for eight years and was alarmed that no one was building anything around pay equity when it comes to how we’re paid, why we’re paid what we’re paid and on how to build equity long term,” Khan told TechCrunch. “Unfortunately, discussions around compensation and equity still happen behind closed doors and this extends into workflow around compensation — equally broken — with manual leveling, old data and large pay inequities.”

The company plans to use its new capital to expand its product offerings and scale its organization.

#angellist, #anna-khan, #artificial-intelligence, #better-tomorrow-ventures, #bling-capital, #crv, #economy, #enterprise-software, #entrepreneurship, #figure, #finance, #funding, #fundings-exits, #hiring, #instacart, #jason-calacanis, #naval-ravikant, #operating-system, #private-equity, #recent-funding, #reddit, #silicon-valley, #startup, #startup-company, #startups, #steve-huffman, #talent, #uber, #venture-capital

Parabol raises $8M after reaching 100,000 users of its agile meeting software

This morning Parabol, a startup that provides retrospective meeting software to agile development teams, announced that it has closed an $8 million Series A. Microsoft’s venture capital arm, M12, led the deal. The investment also saw participation from Techstars, CRV, and Haystack.

TechCrunch caught up with Parabol CEO Jordan Husney to talk about the round, and his company. We were curious how large the market that Parabol serves is, and if the company was overly-nicheing its service. While the startup is still young, the answer appears to be no – adding to our general sentiment that the software market is even larger than we perhaps thought.

Let’s explore how Parabol came to be, and how it came to pick its target market. Or more precisely, how its target market chose it.

Building horizontally, focusing vertically

After a stint in the consulting world, Husney was more than aware of the communications issues that distributed teams can endure. With multiple offices the norm among big companies, he told TechCrunch in an interview, communications between remote workers came down to an email thread, or a meeting. A self-described “recovering engineer,” Husney wondered if there was space in the business market for “structured communications,” or the type of asynchronous meetings that are popular in the code-writing world.

Borrowing from the ethos of agile development, a method of writing software that prioritizes collaboration and evolution over process and documentation, Husney built Parabol to bring agile work and communications methods to non-developer business teams. If agile principles were good at helping foster developer results through status meetings, why wouldn’t the same process translate to other work settings?

But the market had other ideas. Instead of hitting it big in the business world, owing to the friction resulting from needing what Husney described as a “behavior change” — something often lethal to rapid adoption of a new service, or product — agile teams themselves started using Parabol’s tech.

The startup followed the demand. And there’s quite a lot of it, as it turns out. Husney estimated that there are around 20 million agile developers in the world, the business from which has helped propel companies like Atlassian to enormous heights. It’s a big enough pool for the startup to swim in for a long time.

Returning to our earlier note about the depth of the software market, Parabol is a good reference point. It appears capable of building a real company on the back of supporting a subset of the software creation world’s peculiar meeting style; the market for software is simply gigantic.

Growth

After deciding to support agile software teams, growth came quickly to Parabol. In 2018 and 2019, the company saw growth of 20% to 40% each month, its CEO said. Calling his company a “rocket,” Husney gave partial credit to Parabol’s freemium go-to-market model, a common approach when selling to developers who eschew the traditional sales process.

By selling to the already-converted, Parabol found product-market fit. Husney himself had underestimated the demand from agile software developers for tools to support they work, because he thought that they’d already figured out their own needs, he told TechCrunch.

What Parabol has built is not a simple tool, however. Powering retrospective meetings and incident post-mortems, its software collects notes from workers on things that should be done, things that should no longer done, and things that should be kept up. The service then aggregates them automatically by topic, followed by users voting to decide on changes and takeaway actions. The result is an asynchronous way for developer teams to stay in sync.

The startup closed a Seed round in November of 2019, just in time to have cash on hand for the COVID-19 pandemic. The rapid switch to remote work quickly drove Parabol’s user growth from 600 per week in January of 2020, to 5,000 per week in March of the same year. The company has some public usage data available here, in case you want to check the spike yourself.

After raising its $4 million Seed, Husney decided to raise more capital after being told by others that it was a great time to do so. And after winding up with a few firms to choose between, wound up taking Microsoft’s money.

There’s a story there. Per Husney, Microsoft’s M12 was not on the top of its venture capital list; there is a somewhat good reason for that, as taking strategic capital over pure-venture capital is a choice and not the best one for every startup. But after Husney and company got to know the Microsoft partners, and each side underwent diligence, the fit became clear. According to the CEO, M12’s investing team called various Microsoft groups — Azure, GitHub, etc — to ask them about their views on Parabol. They raved. So Microsoft had strong internal signals concerning the deal, and Parabol learned that its potential investor was a heavy user of its product.

The deal worked out.

Why $8 million and not more? The startup’s growth plan isn’t super capital intensive according to Husney, and its market is pulling it instead of the other way around. The team is dilution-conscious as well, he explained. The founding team put the company together in 2015, and didn’t raise its seed round until 2019. It was ramen days back then, he explained; you’ll cling to your ownership, I suppose, when you have bought it that dearly.

Parabol runs lean on purpose. Husney said that his team was not following the Reid Hoffman blitzscaling ethos, instead focusing on hiring for individual leverage. In the CEO’s view, you don’t need to scale quickly to build collaboration products.

The $8 million raise could give Parabol infinite runway, the CEO said, but his company instead raised it for about a 24 month spend. At the end of that he expects the company to have around 30 workers, up from its current 10.

Parabol wants to quadruple its revenues this year, and triple them in 2022. And it wants to scale to 500,000 users from its current 100,000 this year, reaching one million by the end of next year. Let’s see how it performs against those goals.

#crv, #enterprise, #funding, #m12, #microsoft, #parabol, #tc

Emotive raises $50M to make text marketing more conversational

While more businesses are turning to text messages as a marketing channel, Emotive CEO Brain Zatulove argued that most marketers are just treating it as another “newsletter blast.”

“The reason the channel performs so well is it’s not saturated,” Zatulove said. But that’s changing, and as it does, companies will have to do more to “cut through the noise.”

That’s what he said Emotive provides, by enabling text marketing that feels like a real conversation with another human being, rather than just another email blast. He compared it to the sales associate who would greet you when you first walked into a department store, pre-COVID.

“The online sales associate really didn’t exist,” he said. “That’s what we’re trying to provide.”

Emotive saw 466% year-over-year revenue growth in 2020 and is announcing today that it has raised $50 million in a Series B funding round that values the company at $400 million. It was led by CRV with participation from Mucker Capital, TenOneTen Ventures and Stripes.

Emotive screenshot

Image Credits: Emotive

“Never underestimate the importance of building a product that your customers, and your customers’ customers adore,” said CRV general partner Murat Bicer in a statement. “One of the things that struck us about Emotive is the sheer amount of customer love Brian and Zack get from meal delivery services, manufacturing companies and even toddler shoe brands. Small businesses find it easy to set up campaigns and their customers genuinely prefer communicating with someone over text rather than email.”

Zatulove said he founded the company with Zachary Wise after they’d worked together on cannabis loyalty startup Reefer, eventually deciding there was a bigger opportunity here after their early successes with text marketing. He explained that while Emotive works with larger customers, its sweet spot is mid-sized e-commerce businesses on Shopify, Magento, Bigcommerce and Woocommerce.

Since those businesses usually don’t have any salespeople of their own yet, Emotive serves that function. It can start conversations around shopping cart abandonment and promote promote sales and new products, resulting in what the company says are 8% to 10% conversion rates (compared to 1% or 2% for a standard text marketing campaign). Zatuolove said the platform largely relied on human responders at first, and although it’s become increasingly automated over time, Emotive still has an internal team handling responses when necessary.

“We never plan on losing that human touch as part of the dialogue,” he added. “We see ourselves as a human-to-human platform. That’s our biggest differentiator.”

Emotive had previously raised $8.2 million in funding, according to Crunchbase. Zatulove said this new round will allow the company to continue developing the product, to grow its headcount to more than 200 people and to open offices in Atlanta and Boston. Eventually, it could also expand beyond texting.

“Longer term, we see ourselves more as a conversation platform, not just as a text message platform,” he said.

#advertising-tech, #crv, #emotive, #funding, #fundings-exits, #mobile, #startups, #tc

Nobl9 raises $21M Series B for its SLO management platform

SLAs, SLOs, SLIs. If there’s one thing everybody in the business of managing software development loves, it’s acronyms. And while everyone probably knows what a Service Level Agreement (SLA) is, Service Level Objectives (SLOs) and Service Level Indicators (SLIs) may not be quite as well known. The idea, though, is straightforward, with SLOs being the overall goals a team must hit to meet the promises of its SLA agreements, and SLIs being the actual measurements that back up those other two numbers. With the advent of DevOps, these ideas, which are typically part of a company’s overall Site Reliability Engineering (SRE) efforts, are becoming more mainstream, but putting them into practice isn’t always straightforward.

Noble9 aims to provide enterprises with the tools they need to build SLO-centric operations and the right feedback loops inside an organization to help it hit its SLOs without making too many trade-offs between the cost of engineering, feature development and reliability.

The company today announced that it has raised a $21 million Series B round led by its Series A investors Battery Ventures and CRV. In addition, Series A investors Bonfire Ventures and Resolute Ventures also participated, together with new investors Harmony Partners and Sorenson Ventures.

Before starting Nobl9, co-founders Marcin Kurc (CEO) and Brian Singer (CPO) spent time together at Orbitera, where Singer was the co-founder and COO and Kurc the CEO, and then at Google Cloud, after it acquired Orbitera in 2016. In the process, the team got to work with and appreciate Google’s site reliability engineering frameworks.

As they started looking into what to do next, that experience led them to look into productizing these ideas. “We came to this conclusion that if you’re going into Kubernetes, into service-based applications and modern architectures, there’s really no better way to run that than SRE,” Kurc told me. “And when we started looking at this, naturally SRE is a complete framework, there are processes. We started looking at elements of SRE and we agreed that SLO — service level objectives — is really the foundational part. You can’t do SRE without SLOs.”

As Singer noted, in order to adopt SLOs, businesses have to know how to turn the data they have about the reliability of their services, which could be measured in uptime or latency, for example, into the right objectives. That’s complicated by the fact that this data could live in a variety of databases and logs, but the real question is how to define the right SLOs for any given organization based on this data.

“When you go into the conversation with an organization about what their goals are with respect to reliability and how they start to think about understanding if there’s risks to that, they very quickly get bogged down in how are we going to get this data or that data and instrument this or instrument that,” Singer said. “What we’ve done is we’ve built a platform that essentially takes that as the problem that we’re solving. So no matter where the data lives and in what format it lives, we want to be able to reduce it to very simply an error budget and an objective that can be tracked and measured and reported on.”

The company’s platform launched into general availability last week, after a beta that started last year. Early customers include Brex and Adobe.

As Kurc told me, the team actually thinks of this new funding round as a Series A round, but because its $7.5 million Series A was pretty sizable, they decided to call it a Series A instead of a seed round. “It’s hard to define it. If you define it based on a revenue milestone, we’re pre-revenue, we just launched the GA product,” Singer told me. “But I think just in terms of the maturity of the product and the company, I would put us at the [Series] B.”

The team told me that it closed the round at the end of last November, and while it considered pitching new VCs, its existing investors were already interested in putting more money into the company and since its previous round had been oversubscribed, they decided to add to this new round some of the investors that didn’t make the cut for the Series A.

The company plans to use the new funding to advance its roadmap and expand its team, especially across sales, marketing and customer success.

#adobe, #battery-ventures, #bonfire-ventures, #brex, #cloud, #computing, #crv, #developer, #enterprise, #funding, #fundings-exits, #harmony-partners, #nobl9, #orbitera, #outsourcing, #recent-funding, #resolute-ventures, #software-development, #startups, #supply-chain-management, #tc

Battery companies are the latest SPAC target as EVs get a huge regulatory boost

Batteries are the latest landing pad for investors.

In the past week alone, two companies have announced plans to become publicly traded companies by merging with special purpose acquisition companies. European battery manufacturer FREYR said Friday it would become a publicly traded company through a special purpose acquisition vehicle with a valuation at $1.4 billion. Houston area startup Microvast announced Monday its own SPAC, at a $3 billion valuation.

A $4.4 billion combined valuation for two companies with a little over $100 million in revenue (FREYR has yet to manufacture a battery) would seem absurd were it not for the incredible demand for batteries that’s coming.

Legacy automakers like GM and Ford have committed billions of dollars to shifting their portfolios to electric models. GM said last year it will spend $27 billion over the next five years on the development of electric vehicles and automated technology. Meanwhile, a number of newer entrants are either preparing to begin production of their electric vehicles or scaling up. Rivian, for instance, will begin delivering its electric pickup truck this summer. The company has also been tapped by Amazon to build thousands of electric vans.

The U.S. government could end up driving some of that demand.  President Biden announced last week that the U.S. government would replace the entire federal fleet of cars, trucks and SUVs with electric vehicles manufactured in the U.S. That’s 645,047 vehicles. That’s going to mean a lot of new batteries need to be made to supply GM and Ford, but also U.S.-based upstarts like Fisker, Canoo, Rivian, Proterra, Lion Electric and Tesla.

Meanwhile, some of the largest cities in the world are planning their own electrification initiatives. Shanghai is hoping to have electric vehicles represent roughly half of all new vehicle purchases by 2025 and all public buses, taxis, delivery trucks, and government vehicles will be zero-emission by the same period, according to research from the Royal Bank of Canada.

The Chinese market for electric vehicles is one of the world’s largest and one where policy is significantly ahead of the rest of the world.

A potential windfall from China’s EV market is likely one reason for the significant investment into Microvast by investors including the Oshkosh Corp., a 100 year-old industrial vehicles manufacturer; the $8.67 trillion money management firm, BlackRock; Koch Strategic Platforms; and InterPrivate, a private equity fund manager. That’s because Microvast’s previous backers include CDH Investments and CITIC Securities, two of the most well-connected private equity and financial services firms in China.

So is the company’s focus on commercial and industrial vehicles. Microvast believes that the market for commercial electric vehicles could be $30 billion in the near term. Currently, commercial EV sales represent just 1.5% of the market, but that penetration is supposed to climb to 9% by 2025, according to the company.

“In 2008, we set out to power a mobility revolution by building disruptive battery technologies that would allow electric vehicles to compete with internal combustion engine vehicles,” said Microvast chief executive Yang Wu, in a statement. “Since that time we have launched three generations of battery technologies that have provided our customers with battery performance far superior to our competitors and that successfully satisfy, over many years of operation, the stringent requirements of commercial vehicle operators.”

Roughly 30,000 vehicles are using Microvast’s batteries and the investment in Microvast includes about $822 million in cash that will finance the expansion of its manufacturing capacity to hit 9 gigawatt hours by 2022. The money should help Microvast meet its contractual obligations which account for about $1.5 billion in total value, according to the company.

If Chinese investors stand to win big in the upcoming Microvast public offering, a clutch of American investors and one giant Japanese corporation are waiting expectantly for FREYR’s public offering. Northbridge Venture Partners, CRV, and Itochu Corp. are all going to see gains from FREYR’s exit — even if they’re not backers of the European company.

Those three firms, along with the International Finance Corp. are investors in 24m, the Boston-based startup licensing its technology to FREYR to make its batteries.

FREYR’s public offering will also be another win for Yet-Ming Chiang, a serial entrepreneur and professor who has a long and storied history of developing innovations in the battery and materials science industry.

The MIT professor has been working on sustainable technologies for the last two decades, first at the now-defunct battery startup A123 Systems and then with a slew of startups like the 3D printing company Desktop Metal; lithium-ion battery technology developer, 24m; the energy storage system designer, Form Energy; and Baseload Renewables, another early-stage energy storage startup.

Desktop Metal went public last year after it was acquired by a Special Purpose Acquisition Company, and now 24m is getting a potential boost from a big cash infusion into one of its European manufacturing partners, FREYR.

The Norwegian company, which has plans to build five modular battery manufacturing facilities around a site in its home country intends to develop up to 43 gigawatt hours of clean batteries over the next four years.

For FREYR chief executive Tom Jensen there were two main draws for the 24m technology. “It’s the production process itself,” said Jensen. “What they basically do is they mix the electrolyte with the active material, which allows them to make thicker electrodes and reduce the inactive materials in the battery. Beyond that, when you actually do that you remove the need fo a number of traditional production steps… Compared to conventional lithium battery production it reduces production from 15 steps to 5 steps.”

Those process efficiencies combined with the higher volumes of energy bearing material in the cell leads to a fundamental disruption in the battery production process.

Jensen said the company would need $2.5 billion to fully realize its plans, but that the float should get FREYR there. The company is merging with Alussa Energy Acquisition Corp. in a SPAC backed by investors including Koch Strategic Platforms, Glencore, Fidelity Management & Research Company LLC, Franklin Templeton, Sylebra Capital and Van Eck Associates.

All of these investments are necessary if the world is to meet targets for vehicle electrification on the timelines that have been established.

As the Royal Bank of Canada noted in a December report on the electric vehicle industry. “We estimate that globally, battery electric vehicles (BEVs) will represent ~3% of 2020 global demand, while plug-in hybrid-electric vehicles (PHEVs) will represent another ~1.3%,” according to RBC’s figures. “But we see robust growth off these low figures. By 2025, when growth is still primarily regulatory driven, we see ~11% BEV global penetration of new demand representing a ~40% CAGR from 2020’s levels and ~5% PHEV penetration representing a ~35% CAGR. By 2025, we see BEV penetration in Western Europe at ~20%, China at ~17.5%, and the US at 7%. Comparatively, we expect internal combustion engine (ICE) vehicles to grow (cyclically) at a 2% CAGR through 2025. On a pure unit basis, we see “peak ICE” in 2024.”

#3d-printing, #amazon, #automotive-industry, #biden, #blackrock, #boston, #cdh-investments, #china, #crv, #desktop-metal, #electric-vehicle, #electric-vehicles, #energy, #energy-storage, #ford, #franklin-templeton, #gm, #houston, #itochu-corp, #lithium-ion-battery, #mit, #northbridge-venture-partners, #plug-in-hybrid, #president, #proterra, #rivian, #royal-bank-of-canada, #shanghai, #sylebra-capital, #tc, #tesla, #u-s-government, #united-states

Early DoorDash investor dismisses “froth” talk, says company could grow 10x from here

[The stunning debut of the food delivery company DoorDash on the public market this week has plenty of people puzzled. While undeniably fast-growing, the unprofitable delivery company that has come under fire numerous times over its employment practices, and its IPO, like that of other gig-economy companies, leaves a lot of economic issues unresolved.

So why is a company that lost $667 million in 2019 and $149 million in the first nine months of 2020 — during a period of hypergrowth because of the pandemic —  being valued at $55.8 billion by public market investors? Have they lost their minds?

Saar Gur thinks he has answers to such questions. Gur, a longtime general partner with the early-stage venture firm CRV, was able to write a check to DoorDash in its earliest rounds, including its seed, Series A and Series B financings, and he suggests the firm’s stake in the business will return multitudes of the CRV fund from which those checks came. In short, he’s very far from biased. However, in a call earlier today, he painted a picture of DoorDash wherein it not only becomes profitable but is 10 times larger than it is today based on how it evolves from here. Our conversation has been edited lightly for length and clarity.

TC: You wrote a seed check to DoorDash. Did you seek out the company or did the team pitch CRV?

SG: I went on this hunt, looking for Tony. [Rival delivery service] Postmates had started two-and-a-half to three years earlier, and I thought the founder was great [but I wasn’t sure about investing]. Another company, Fluc, was run by this very scrappy entrepreneur, Adam, who was getting some buzz in Palo Alto, and I was quite curious and met the team because we were in the food business and knew a lot of restaurant owners; my wife was a food entrepreneur and built this chain of homemade yogurt stores called Fraiche,

So I emailed my friend Misty, who was the general manager at the time of Oren’s Hummus on University Avenue [in Palo Alto[ and said, ‘We’re looking this company, Fluc, and we’d love to get your thoughts.’ And she said, ‘The team is Fluc is okay; their technology is better [than some others], but they don’t understand our problems in a way that’s truly helpful to us. You should talk to these kids out of Stanford at DoorDash.’

If there’s any skill in investing, it’s not just confirmation bias of investing in Fluc [whose founders later moved on] but we did like a hard pivot and chased down the DoorDash team. We met them at Fraiche in Palo Alto,  and from that moment, it’s like we were finishing each other’s sentences.

TC: What did you talk about?

SG: The team from day one just talked about building a logistics company. For example, they understood Oren’s Hummus, which at that time was quite popular but had limited front-of-house seating and a big kitchen in the back. And [cofounder and CEO] Tony [Xu] and [cofounder turned VC] Evan Moore said at the time said, we want to target customers of popular concepts that have limited [seating] and extra kitchen capacity, and to integrate directly with the kitchen so we don’t have to interact with front-of-the-house staff.

At the time, Postmates had pivoted from waiting in line to get you a iPhone to delivering food, including from Fraiche, but they would send someone to your store, place the order and wait. DoorDash instead put an iPad

TC: You’ve said that CRV missed out on Uber, that Travis Kalanick left your offices and headed over to Benchmark, where he told you right afterward that they wouldn’t let him leave until he signed a term sheet. Do you think Uber could or should have been DoorDash? I met with Travis in 2011, before DoorDash was founded, and he called Uber a logistics company and told me it would deliver food and a lot of other things. Given DoorDash’s dominant market share, do you think Uber waited too long to jump into deliveries? 

SG:  The original Uber was not at all about food; it was that ride hailing hadn’t changed. Its Series A deck was a picture of a guy holding his hand up and trying to hail a taxi, with no real vision about food — at least at least that’s my recollection. Over time, it became Uber for everything.

But in terms what happened, DoorDash launched in Palo Alto. A number of other companies were in San Francisco, and Tony and the team had to decide whether to launch in San Francisco as its next major city or whether to launch somewhere else. And after a number of discussions that I was a part of, they focused on San Jose. Most people don’t know, but San Jose is something like the 10th largest city in the United States and its layout is much more similar to other mid-tier cities and suburban America than it is to San Francisco. I think that was one key strategic decision. At the time, [larger rivals] GrubHub and Seamless had been proven [the model] in dense cities. It was really not obvious that it would work in San Jose or any suburb.

TC: Clearly, investors are excited about what DoorDash has built — so excited that its stock went crazy yesterday. Are you, like Bill Gurley, frustrated that money was left on the table by its underwriters? Do you think traditional IPOs are broken?

SG: I actually started my career at Lehman Brothers on the investment banking team, and so having seen the IPO process, while I can appreciate [frustration that a] company left some money on the table based on the pricing, the tactical challenge [is that] it’s very hard to predict. You know what the market will bear once it moves to retail investors.

What’s exciting to me is [that] DoorDash is raising money because they are just getting started. I do think this could be a $500 billion-plus company. There’s so much to be excited about. As for the capital-raising event, I think it’s hard for the bankers to know where it will land with the broader market, so I’m not as negative as maybe some others.

TC: Five-hundred billion dollars is a big number. How do you get there?

SG: Let’s just start with food delivery. DoorDash’s suburban market share has grown to more than 60% and its overall U.S. market share is over 52%, so they’ve won the market in food delivery. And if you look at the [Chinese shopping platform] Meituan and other global food delivery businesses, that alone paints a path where DoorDash should be [valued at] $100 billion, assuming they continue to execute on the path that they’re on.

But the bigger story to me that I think many folks don’t understand is, if you go back to U.S. Postal Service, it used to take two weeks to get a letter. Then FedEx launches and all of a sudden the, the mail seems slow. The [net promoter score] was really high for the USPS until FedEx launched, or [think of] dial-up [internet access] which was great until [we had] broadband.

What we’re seeing is that consumers prefer immediacy and this magic ability to press a button and have ice cream delivered in under 25 minutes or milk, and you start to layer [items on] from there. We’ve partnered with Macy’s in December, for example, so if you buy a shirt or a dress, you can now have it at your house in an hour. When you look at the infrastructure that DoorDash has built to deliver on that vision, that’s where this company looks more like Amazon .

That’s dreaming the dream, and that’s a very different business than ride-sharing and Uber’s core business.

TC: You’re comparing DoorDash to Amazon, which is a much more capital-intensive business with lots of hard assets. Do you see DoorDash moving in that direction? Relatedly, what kinds of acquisitions would DoorDash be potentially interested in making?

SG: The company is always focused on technology first. DoorDash Drive is a product that many people don’t understand but it powers merchants that don’t want to roll out their own delivery network. Say you go to Walmart.com and order a bunch of groceries. DoorDash is powering those deliveries. Macy’s wants to roll out one-hour delivery. DoorDash Drive is allowing them to do that. DoorDash also now has a product that’s purely like a SaaS business that enables larger chains that want to control the whole experience of delivery with their own drivers to do that. Jimmy Johns [a sandwich chain] is ow running its entire order and deliver business with their own drivers, using DoorDash software.

There are parts of DoorDash that are a true software business, just like AWS, and there are parts of it that are capital-intensive, like Dashmart [that rolled out this summer and which are convenience stores are owned and operated by DoorDash]. Will they buy 7-Eleven or something like that? We saw [deliver startup] goPuff acquire BevMo last month; it’s not out of the question that there might be a reason to do that. With Dashmart, they already can see a lot of stuff based on data that people want to have immediately.

You know, I guess related to the answer question, and I don’t even know what it stands for but I know Uber at some point was looking into ghost kitchens, maybe like hadn’t had a stake in one in France. Is that something that doordash would potentially get into the business of like owning and running these so that it can also just, and I apologize that I’m not better versed in this but I don’t know, I don’t know if it’s got sort of like close relationships or owns anything like that already.

TC: DoorDash has also ventured into the ghost kitchen market, opening a facility in Redwood City, south of San Francisco. Could this become a bigger initiative?

SG: I think it’s definitely in the zone. DoorDash can use data and say, you know, you don’t need to build another Long John Silver or Taco Bell [to get closer to some of your customers]; you use our Redwood City Kitchen.We can already show you the data that [highlights how] deliveries that might take an hour could be turned into 15 minutes. They’re really facilitating the revenue growth of these concepts.

There’s another set of entrepreneurs where they can use the data to say, for example, ‘Hey, there is no pizza restaurant in Palo Alto, so we’re just going to launch Saar’s Pizza Company to fill that hole and do it cost effectively because we don’t need to build a location out with seating and all the building codes involved serving customers in person.

TC: In the meantime, one reads stories of restaurateurs who complain about the fees involved in working with DoorDash.

SG: Having been a restaurant owner, I can tell you, even for my wife, who has a Wharton MBA, it’s very hard to keep track of all the numbers. You feel like everyone is screwing you; it’s just it’s really hard to run a small business. So it’s not based on great data or even if it is, if you view that DoorDash is adding incremental revenue, and if you understand the concept of marginal profit, then you should continue to sell things as you can make money on the margins of the food and you have the excess kitchen capacity. 

If you look, that’s why DoorDash has signed [roughly] 45 of the top 50 quick-service restaurants. Those are quantitative groups and they wouldn’t do it do it for as long as they have and invest in these partnerships if it wasn’t working.

But there’s always going to be a sticker shock.

TC: Regarding these quick-service restaurants and ghost kitchens, these systems are so efficient that the concern is that these mom-and-pop restaurants get wiped out. How do you think about that concern?

SG: I think we are social beings and we look for experiences [and] breaking bread with someone is not going away. I think smarter brands will — just like what we see in retail with physical locations and online locations — [be both offline and online]. Smarter concepts will understand how to build those brands across channels. And then I you know I still think that the Saisons of the world and the French Laundry will only continue to to do well post COVID as people look for these experiences of how to be together and share food, which is a passion of many folks.

TC: How does DoorDash itself become profitable? 

SG: If you check the facts, this summer the company was actually profitable. Not only that, they gave $120 million dollars, or they give credit, to other small businesses, in support of COVID, so had they not done that, they actually would have produced quite a bit of cash.

With run a company like DoorDash, you have to sell a big vision and be able to recruit, but you also need to be highly quantitative, and Tony has always been able to spit out numbers that are like accurate and set goals that are very quantitative. And while they they’re not profitable in the newer markets [because they are growing], they’ve got the cohorts to show you not only how they’re profitable in older markets but how their profitability expands over timein those markets. At any point, they could kind of slow their growth and become more profitable, but that’s not the playbook.

#amazon, #crv, #doordash, #ecommerce, #food, #fundings-exits, #ghost-kitchens, #ipo, #on-demand-delivery, #real-estate, #saar-gur, #sequoia-capital, #softbank-vision-fund, #tc, #venture-capital

GreyNoise announces $4.8M seed investment to filter harmless security alerts

Security professionals are constantly dealing with an onslaught of information as their various tools trigger alerts, some of which require their attention and some which don’t. Unfortunately, it requires addressing the alert to find that out. GreyNoise wants to help by filtering out benign security alerts, leaving security pros to deal with the ones that matter.

Today, the company announced a $4.8 million seed investment led by CRV with participation from Paladin Capital Group and several individual tech executive investors.

“Usually about 20% of the alerts that you’re looking at [don’t require your attention]. And those alerts are generated by both good guys and bad guys who are opportunistically scanning and crawling and probing and attacking every single device all around the internet,” GreyNoise founder Andrew Morris told TechCrunch.

He adds, “It creates this background noise problem, so we basically collect all of that data from all of those people who are scanning and crawling everybody on the entire internet, analyze it and we filter it out from what our customers see. So what they end up with is about 20%, fewer alerts.”

Surprisingly, the company is not using machine learning to do this (although adding machine learning elements is on the roadmap). Instead, Morris says it involves a lot of automated analysis of sensor data.

“We have a giant network of collector sensors that are sitting in all these different data centers all around the internet and hundreds of data centers around the internet. And we’re just applying a bunch of rules to the traffic that they all see to end up with the output of our core product,” he said.

As the company moves forward with this new funding, he says primarily he wants to get away from this approach and get more data from customers in exchange for discounts on their subscription costs.

“Moving forward, it’s cost prohibitive for us to collect all of the data that we want firsthand. So we’re going to have to start basically building products that are enabling our users to collect data for us. And that’s something that we’re going to be building out using this funding,” Morris said.

In addition, they will be partnering with other key vendors like ISPs and data center owners to help them collect additional data.

Interestingly, this was an entirely COVID transaction with CRV’s Reid Christian never meeting Morris in person, conducting the entire process over Zoom. “A sign of the times, Andrew and I have never met in person and likely won’t for quite some time. We were connected in the midst of quarantine, both of us holed up in our apartments (DC and SF, respectively) where we sat on countless Zoom calls, mostly getting to know each other and discussing the opportunity ahead of GreyNoise,” Christian wrote in a blog post announcing the deal.

The startup has 7 employees to this point. Morris said that he has plans to hire 10 people in the next year with an emphasis on sales, marketing and engineering. As he hires more people, he says it’s imperative to be thinking about diversity and inclusion in his hiring in the early stages of the company.

“The best way to do this is to hire as diverse as humanly possible from the very beginning, because it’s significantly harder to make a company more diverse after the fact than it is to think about inclusion and diversity from the very beginning. And so that’s how we’ve been thinking about everything right now with every hire that we’re doing,” he said. How that will work as he builds out the company is still something he is considering and he plans work with D&I experts to help flesh out a plan.

Morris founded the company in the Washington, D.C. area in 2017, came to market in 2018 with the first version of the product and today has 40 customers.

#cloud, #crv, #funding, #greynoise, #security, #security-alert-filtering, #security-alerts, #startups, #tc

CRV has closed its newest fund with the same amount as its previous fund; “We’re making a statement”

CRV, the early-stage venture firm that is this year celebrating its 50th anniversary, has just closed its newest fund with $600 million in capital commitments. The firm asserts that it garnered the pledges entirely during the pandemic, saying it kicked off its fundraising efforts in April.

But just as notably, says general partner Jon Auerbach — who joined the firm’s Boston office 13 years ago and two years ago headed the Bay Area, where CRV has two offices —  the fund is the “exact size of our last fund, because we wanted to make a statement. We want to send the message that discipline wins.”

We spent some time on the phone with Auerbach yesterday to learn more about the fund, which, like previous funds, will focus on seed and Series A stage startups but will differ slightly in that longtime general partner Devdutt Yellurkar will not be making active investments from it.

TC: Check sizes have been growing in recent years, which is the reason competitors often give for raising larger funds. Why not raise more?

JA: We could have closed on more, but we want to remain small and focused and we’re making a bet that that there will be a return to some level of normalcy. We also think that given the team and the opportunity we’re chasing — early-stage software — this fund size gives us the flexibility to scale up when we want to but also maintain [the ability to see an impact from smaller checks].

TC: What percentage of your deals are seed and Series A versus slightly later stage?

JA: Almost all is seed and A. Our biggest check in our last fund was just over $20 million, into Postman, a company in the API space that started in India with which our partner Devdutt built a relationship over four years.

Our average check size across the life of an investment is $13 million.

TC: Postman just closed on a big round last month.

JA: Yes. One of the things we’re most proud of is that three breakout companies have raised money [since COVID-19 took hold in the U.S.]. [Cloud-based collaboration software maker] Airtable raised a big round, Postman, and DoorDash. What impacts COVID has economically is a mystery going forward, but you’re seeing a flight to quality, with some massive beneficiaries that have managed to command incredible attention.

TC: What did you see in DoorDash early on?

JA: We led the seed round and we made two bets there. One was that [cofounder and CEO] Tony [Xu] and his team were aiming to build a last-mile software logistics company, whether delivering food or something else. The second was on the societal shift globally toward working couples who weren’t as interested in cooking but cared a lot about food.

TC: DoorDash has raised a lot of money, but I think there are questions about whether the funding has gotten ahead of the company, especially given that it’s gaining so much traction right now during circumstances that we all hope will change.

JA: Of course, COVID has acted as an accelerant, but the life of a founder is one of immense risk, and their job, mainly with their product, is to reduce that risk. Capital is another way to do it, but it cuts both ways; it’s oftentimes not a good thing. What we love about this portfolio of disciplined, visionary people is they have contingency planning built into their models, along with a vision of how to change the world.

TC: Is DoorDash’s business model sustainable in a world where more workers are becoming classified as employees instead of contract workers?

JA: When people see the economic model behind DoorDash, they’ll be surprised. For example, its many deals with [quick service restaurants] around the country are brilliant because customer acquisition costs tend to drag down companies, but when you walk into a store in Wichita [Kansas], you see that it says to use the DoorDash app. That reduces acquisition costs.

TC: Has CRV sold any of its stake in DoorDash? Also, how many rounds beyond the seed round did CRV join?

JA: We haven’t sold [any of our shares] and we invested in a couple more rounds. It’s not our pure mandate to keep going [as a company continues raising later rounds of capital].

TC: You’re largely investing at the seed stage; do you have any concerns about how startups that didn’t have trouble landing that smaller check raise that next round if we’re all still mostly stuck at home?

JA: Seed-stage companies will figure out how to adapt, and so will investors. Twenty years ago, when I got into the business, the standard playbook was you backed a company, then you went to the next layer of talent at that company and backed those people. It was a family tree approach. If you told me that years later, investors would be backing so many first-time founders without domain expertise, I would have told you that you’re crazy. But the average age of enterprise software founders has dropped dramatically. Look at [Airtable founder] Howie [Liu], and he’s not an outlier. It’s because software has become much more approachable, and the experiences that used to guide you are now oftentimes hindrances to clean, fresh thinking.

TC: Speaking of Airtable, there is so much interest now in no-code, low-code startups. How are you thinking about these?

JA: Oh, we love it. We have another company, Iterable, a marketing tech platform, that falls in to the same movement. It used to be that you needed to tap into engineering talent to design and measure campaigns, but with what the team has built over there, you can now arm marketers with the tech they need to design customized campaigns that can work at scale.

TC: You’ve had some exits in recent months: the sale of 5G software maker Affirmed Networks to Microsoft for a reported $1.35 billion in cash, and the sale of another software company, CloudGenix to Palo Alto for a reported $420 million.

JA: At CRV, we’re not so focused on what’s happening at any particular moment in time. Sometimes serendipitously, good things happen; sometimes it takes longer. Thankfully, we don’t have the pressure of a new fund that has to show LPs that it knows what it’s doing.

TC: As an established firm, I wonder how you are thinking about diversity. I know last summer that you brought on Anna Khan, a former investor at Bessemer, as a general partner.

JA: We understand that this is a young person’s game that requires incredible hustle, networking, and open eyes and we continue to focus on the next-generation. We have multiple generations at the firm because we do believe that diversity of opinion makes us better investors. Five of our 15 investors are women, our ages range from 26 to 60, and we represent six countries, including, Turkey, Greece, Pakistan, and India.

TC: Anyone transitioning out of the firm with this new fund?

JA: We have a flat and equal structure, so some things are done per fund and some are done at fund level. Devdutt won’t be making investments in the new fund, but he continues to be involved in all his portfolio companies — and there are 11 of these — and he continues to be involved in firm management and decision-making. [Our job as more senior members] is to make room for the next generation.

TC: Before I let you go, I’m wondering what you think of this potential exodus from San Francisco, especially given that you re-located your family to be closer to the action here.

JA: Innovation globally, over hundreds of years, has thrived when there are clusters of talent. There’s a lot of scientific research on clustering, so I think it’s clear it will continue. The onus is on places like the city of San Francisco to ensure that entrepreneurs will feel safe doing what it is that they do and love it here in the city. If that doesn’t happen because rents are too high or they aren’t coming back [from working wherever they are remotely], the clusters will look elsewhere.

TC: Do you think remote work will stick?

JA: Great ideas can exist everywhere in the world, but when you’re an entrepreneur who wants to make incredible change from nothing, you’ve tended to be around people who think like you and the vast majority of those people have reason to come back.

We’re social beings and we like to be together, and the greatest ideas come from the merging of available capital and cross-sector expertise, and that will continue globally in one way or another. It doesn’t mean certain disciplines can’t be shifted to remote. I’d put coding at the top for the list. But companies aren’t just built on programming.

#airtable, #crv, #doordash, #iterable, #no-code, #postman, #tc, #venture-capital

Squire balances clean fades with the coronavirus

As far as pandemic-proof businesses go, a startup for barbershops isn’t exactly the first thing that comes to mind — unless you raised millions just days before barbershops were shut down across the country.

Dave Salvant and Songe LaRon, co-founders of New York-based Squire, a back-end barbershop management tool for independent businesses they launched in 2016, raised a $34 million Series B led by CRV in early March (after raising $8 million in a Series A round led by Trinity Ventures in 2018). Days later, “everything went to zero,” LaRon recalls of their customer base: All barbershops closed.

The cash quickly went from an opportunistic raise to needed capital. Squire waived all subscription fees, created a site for information called www.helpbarbershops.com and launched a way for patrons to buy online gift cards for their favorite shops. One barbershop sold more than $30,000 in just a few days.

After weathering a hard few months, Squire is now enjoying high demand from barbershops preparing to reopen. The company provides cashless payment, a way to make appointments and is experimenting with a virtual waiting room, all features that barbershops post-pandemic are considering. It is currently live in 45 cities.

During shelter-in-place, some of us have been forced to cut our own hair, as shown by virtual haircuts done over Zoom and even a VC-hosted haircut workshop. But a DIY session won’t replace the intimacy of a barbershop.

Barbershops have long served as gathering places for Black and African American communities as a place to chat, be vulnerable and complain.

In recent years, the culture has moved more into mainstream conversation. Today, there is an entire talk show series, produced by LeBron James, where guests chat while getting a cut. In Atlanta, there’s a singular Atlanta barbershop that serves as an informal gathering ground for the city’s top politicians.

“We learned it resonated with men from all walks of life, all races and ethnicities and was really kind of a universal experience. So we saw an opportunity for a tech company,” LaRon said.

 

Salvant and LaRon thought of barbershops as places of comfort long before they saw them as a place of business.

“Barbers are part-time therapists for guys,” LaRon said in an interview with TechCrunch.

Salvant and LaRon, friends and then-students at Columbia who were living in Harlem, saw barbershops grow in cultural relevance while the technology behind them remained largely untouched. Long wait times, cash-only and scheduling woes continued to be problems that they themselves faced every time they got their hair cut.

Squire lets businesses schedule appointments, offer loyalty programs and install contactless and cashless payment. The team claims that barbershop operations are more complex than many other types of small businesses because there are multiple parties transacting, plus customers might check out different services from different barbers all within one service. That’s where Squire comes in — to be a point of sale to manage those confusing transactions.

Image Credits: Squire

“We don’t want to replace that relationship a guy had with the barber,” said Salvant. “We just wanted to take away all the annoying things about it.”

Squire makes money by charging a monthly fee based on size and needs of the barbershop, ranging from $30 to $250 per month.

A threat to Squire’s success are small and medium business payment infrastructure companies like Square. The co-founders were confident, noting that Squire is the only venture-backed business that exclusively tailors itself to barbershops, and thus will be the best solution for those businesses. Los Angeles-based Boulevard raised money in November for its salon and spa management software.

But Squire thinks barbershop subculture is niche enough that salon technology doesn’t do the job. Barbers want to partner with businesses that are as passionate as they are.

“They don’t look at it as a job, they look at it as a life calling,” LaRon said.

The high bar is precisely why a healthy chunk of Squire’s early days were defined by LaRon and Salvant sitting in barbershop chairs and asking a lot of questions. In fact, Salvant says he got his hair cut by nearly 600 different barbers.

Songe LaRon and Dave Salvant, the co-founders of Squire. Image Credits: Squire

“Part of them trusting you and you trust them happens if you sit down and get a haircut,” Salvant said. By and large, the feedback the co-founder got from barbers was that they needed a solution for the entire shop, as opposed to Squire’s original product aimed at a customer or individual barber. It gave them the faith to go for a vertical solution versus assuming a horizontal solution such as Square would do the job.

Reid Christian, an investor at Charles River Ventures (CRV) who was part of the Series B, said that he knew Squire would be a success when he experienced the product at Rust Belt Barbering in Buffalo, New York. Christian compared Squire to a “Venmo-like experience” with transactions. He estimates billions of dollars in men’s grooming spend.

When shops broadly reopen, Squire is in a good, timely spot to be adopted by the masses. For the co-founders, the incoming wave of interest was affirmed a long time ago.

Last year, the duo attended the Connecticut Barber Expo. It was an aha moment, as they witnessed over 15,000 make the pilgrimage over to Connecticut to learn about the industry.

“Most people don’t know about it, most people wouldn’t believe it until they saw it,” Salvant said. “It serves as a reminder how powerful it is.”

#barbershop, #barbershops, #coronavirus, #covid-19, #crv, #hair-cut, #squire, #startups, #tc, #trinity-ventures

Karat launches a credit card for online creators

Karat is a new startup promising to build better banking products for the creators who make a living on YouTube, Instagram, Twitch and other online platforms. Today it’s unveiling its first product — the Karat Black Card.

The startup, which was part of accelerator Y Combinator’s Winter 2020 batch, is also announcing that it has raised $4.6 million in seed funding from Twitch co-founder Kevin Lin, SignalFire, YC, CRV and Coatue.

Co-founder and co-CEO Eric Wei knows the creator world well, thanks to his time as product manager for Instagram Live. (His co-founder Will Kim was previously an investor with seed fund Lucky Capital.) Wei told me that although many creators have significant incomes, banks rarely understand their business or offer them good terms when they need capital.

“Traditional banks care a lot about FICO [credit scores],” he said. “A lot of YouTubers, when they’re blowing up, they don’t have time to think: Let me make sure my FICO is awesome as well.”

At the same time, he argued that creators have become suspicious of potentially scammy financial offers, to the point that if you were to attend a pre-COVID VidCon and tried to give out $3,000, “The good creators will not take it, even if you tell them there are no strings behind it.”

Karat team

Karat co-founders Will Kim and Eric Wei

With the Karat Black Card, the startup is giving creators a credit card that they can use for their business-related expenses. When creators are approved, they receive a $250 bonus that can be applied to any future purchases of electronics or equipment. The card also comes with custom designs, 2% to 5% cash back on purchases and it even offers advances on sponsorship payments.

Underlying it, Wei said Karat has developed an underwriting model that works for creators. Instead of looking at credit scores, Karat focuses on the size of a creator’s following, their current revenue and whether or not they’re “business savvy.”

“It’s not just the number of followers you have, but what platforms,” Wei added. “I would rather have 100,000 subscribers on YouTube than 1 million on TikTok, because on TikTok, it’s all algorithmically driven.”

Karat has already provided the card to an initial group of creators, including TheRussianBadger, TierZoo and Nas Daily. Wei said the model is working so far, with no defaults.

For now, the card is aimed at professional, full-time creators who have at least 100,000 followers. Wei estimated that that’s a potential customer base of 1 million creators. Eventually, he wants to provide those creators with more than a black card.

“We’re building a vertical financial and biz ops experience,” he said. “People in earlier stages, we do want to get to them eventually, but only after we feel like we’ve developed enough of an underwriting model.”

#coatue, #crv, #funding, #fundings-exits, #karat, #kevin-lin, #media, #recent-funding, #signalfire, #startups, #y-combinator

Fiat Chrysler and AV startup Voyage partner on self-driving minivans

Self-driving vehicle startup Voyage said Monday that it has inked a deal with Fiat Chrysler to supply purpose-built vehicles, a partnership that will help accelerate its plan to launch a fully driverless ride-hailing service.

Voyage, a three-year-old startup that tests and operates a self-driving vehicle service (with human safety operators) in retirement communities in California and Florida, started by modifying Ford Fusion vehicles. The company then began modifying FCA’s Chrysler Pacifica Hybrid minivans with its autonomous vehicle technology.

This new deal, which was nearly two years in the making, marks a critical step in Voyage’s plan to deploy fully driverless vehicles as a ride-hailing service. It also illustrates FCA’s increasingly large role as a supplier to AV developers. The automaker already has a deal with autonomous vehicle company Waymo to provide thousands of purpose-built Chrysler Pacifica minivans. FCA also has a partnership with Aurora to develop self-driving commercial vehicles.

FCA’s approach to rapid advancement of autonomous vehicle technology is to focus on vehicle-side needs while establishing smart and strategic collaborations that promote a culture of innovation, safety and know-how, a company spokesperson said in an email to TechCrunch .

Under this deal with Voyage, Fiat Chrysler is supplying Voyage with purpose-built Pacific Hybrids that have been developed for integration of automated technology. These vehicles come with customizations such as redundant braking and steering that are necessary to safely deploy driverless vehicles, Voyage CEO Oliver Cameron told TechCrunch.

FCA characterized the deal as more than just a supply contract, noting that it will provide support to Voyage to understand the features, operation and technology of the vehicle.

“This opportunity gives engineering and product development teams at Voyage and FCA a greater understanding of the impact of AV technology use on the underlying vehicle, reducing the learning curve for all and guiding future vehicle development,” an FCA spokesperson said in an email to TechCrunch.

Last year, TechCrunch first reported that Voyage had partnered with an automaker to provide this next-generation vehicle designed specifically for autonomous driving. FCA ended up being that unknown partner. FCA and Voyage signed the deal in August 2019.

“As part of this collaboration, Voyage and FCA will jointly adapt and validate the connections between the self-driving software, sensors, and embedded systems,” according to the announcement posted on Medium.

Cameron wouldn’t say how many vehicles FCA will supply. It’s likely dozens not thousands of vehicles. Voyage, which has raised a total of $52 million, is still a small operation compared to AV giants like Waymo and Cruise.

Voyage is still ways off from reaching its driverless ride-hailing service goal. Although, its deal with FCA along with clearing an important regulatory hurdle with California officials are two moments of progress on its long road to a profitable, commercial-scale robotaxi service.

Cameron has previously described the company’s progress as “inching” towards driverless. The company’s self-driving software has reached maturation in the communities it is testing in, and Voyage is now focusing on validation, Cameron told TechCrunch last year.

#automation, #automotive, #automotive-industry, #california, #chrysler, #crv, #emerging-technologies, #fca, #fiat, #fiat-chrysler, #florida, #ford, #ford-fusion, #franklin-templeton, #initialized-capital, #jaguar-land-rover, #khosla-ventures, #oliver-cameron, #robotics, #self-driving-cars, #tc, #techcrunch

CRV’s Saar Gur wants to invest in a new wave of games built for VR, Twitch and Zoom

Saar Gur is adept at identifying the next big consumer trends earlier than most: The San Francisco-based general partner at CRV has led investments into leading consumer internet companies like Niantic, DoorDash, Bird, Dropbox, Patreon, Kapwing and ClassPass.

His own experience stuck at home during the COVID-19 pandemic spurred his interest in three new investment themes focused on the next generation of games: those built for VR, those built on top of Twitch and those built for video chat environments as a socializing tool.

TechCrunch: We’ve been in a “VR winter,” as it’s been called in the industry, following the 2014-2017 wave of VC funding into VR drying up as the market failed to gain massive consumer adoption. You think VR could soon be hot again. Why?

Saar Gur: If you track revenues of third-party games on Oculus, the numbers are getting interesting. And we think the Quest is not quite the Xbox moment for Facebook, but the device and market response to the Quest have been great. So we are more engaged in looking at VR gaming startups than ever before.

What do you mean by “the Xbox moment,” and what will that look like for VR? Facebook hasn’t been able to keep up with demand for Oculus Quest headsets, and most VR headsets seem to have sold out during this pandemic as people seek entertainment at home. This seems like progress. When will we cross the threshold?

#augmented-reality, #consumer-internet, #coronavirus, #covid-19, #crv, #dropbox, #entertainment, #extra-crunch, #gaming, #hardware, #kapwing, #market-analysis, #niantic, #oculus-quest, #saar-gur, #social, #startups, #tc, #twitch, #twitch-tv, #unity, #venture-capital, #virtual-reality, #xbox-one

Sleuth raises $3M Seed to bring order to continuous deployment

Sleuth, an early stage startup from three former Atlassian employees, wants to bring some much-needed order to the continuous delivery process. Today, the company announced it has raised a $3 million seed round.

CRV led the round with participation from angel investors from New Relic, Atlassian and LaunchDarkly.

“Sleuth is a deployment tracker built to solve the confusion that comes when companies have adopted continuous delivery,” says CEO and co-founder Dylan Etkin. The company’s founders recognized that more and more companies were making the move to continuous delivery deployment, and they wanted to make it easier to track those deployments and figure out where the bottle necks were.

He says that typically, on any given DevOps team, there are perhaps two or three people who know how the entire system works, and with more people spread out now, it’s more important than ever that everyone has that capability. Etkin says Sleuth lets everyone on the team understand the underlying complexity of the delivery system with the goal of helping them understand the impact of a given change they made.

“Sleuth is trying to make that better by targeting the developer and really giving them a communications platform, so that they can discuss the [tools] and understand what is changing and who has changed what. And then more importantly, what is the impact of my change,” he explained.

Image Credit: Sleuth

The company was founded by three former Atlassian alumni — Ektin along with Michael Knighten and Don Brown — all of whom were among the first 50 employees at the now tremendously successful development tools company.

That kind of pedigree tends to get the attention of investors like CRV, but it is also telling that three companies including their former employer saw enough potential here to invest in the company, and be using the product.

Etkin recognizes this is a tricky time to launch an early-stage startup. He said that when he first entered the lock down, his inclination was to hunker down, but they concluded that their tool would have even greater utility at the moment. “The founders took stock and we were always building a tool that was great for remote teams and collaboration in general, and that hasn’t changed… if anything, I think it’s becoming more important right now.”

The company plans to spend the next 6-9 months refining the product, adding a few folks to the five person team and finding product-market fit. There is never an ideal time to start a company, but Sleuth believes now is its moment. It may not be easy, but they are taking a shot.

#cloud, #continuous-delivery, #crv, #developer, #devops, #enterprise, #funding, #startups, #tc