A meeting room of one’s own: three VCs discuss breaking out of big firms to start their own gigs

One of the more salient trends in the tech world — arguably the engine that propels it — has been the recurring theme of people who hone talents at bigger companies and then strike out on their own to found their own startups.

(Some, like Max Levchin, even hire entrepreneurial types intentionally to help perpetuate this cycle and get more proactive teams in place.)

It turns out that trend doesn’t just apply to companies, but also to the investors who back them. At Disrupt we talked with three venture capitalists who have followed that path: making their names and cutting their teeth at major firms, and now building their own “startup” funds on their own steam.

On the macro level, the whole world has been living through a challenging time this year. But as we’ve seen time and again the wheels have continued to turn in the tech world.

IPOs are returning, products are being rolled out, people are buying a lot online and using the internet to stay connected, there has been a lot of M&A, and promising startups are getting funded.

Indeed, if entrepreneurs and their innovations are the engine of the tech world, money is the fuel, and that is the opportunity that Dayna Grayson (formerly of NEA, now founder at Construct Capital), Renata Quintini (formerly at Lux Capital, now founder at Renegade Partners) and Lo Toney (formerly GV, now founder at Plexo Capital) have zeroed in to address.

Grayson said that part of the reason for striking out to start Construct Capital with co-founder Rachel Holt was what they saw as an opportunity to create a firm that specifically funded startups tackling the industrial sector:

“Half the US economy’s GDP, half the GDP of this country, hasn’t really been digitized,” she said. “[Firms] haven’t been tech enabled. They’ve been way under invested… The time is now to build with early stage entrepreneurs.”

While Construct is focusing on a sector, Renegade was founded to focus on something else: the stage of development for a startup, and specific the Series B, which the firm refers to as “supercritical”, essential in terms of getting team and strategy right after a startup is no longer just starting out, but before and leading to scaled growth.

“We saw through our boards over and over again companies that figured out how to scale their organizations, put in the processes,” said Quintini, who co-founded Renegade with Roseanne Wincek. “On the people side, they actually went further and captured a lot more market cap and market share faster. Once we saw this opportunity, we could not let it go.”

She compares the current imperative to really focus on how to build and scale companies at the “supercritical” stage to the focus on early stage funding that typified an earlier period in the development of the startup ecosystem 15 years ago. “You could get a million dollars and be in business, a lot more people could, and you had less time to figure out what really resonated with customers,” she said. “That really gave rise to today.”

Toney has taken yet another approach, focusing not on sector, nor stage, but using capital to help germinate a whole new demographic of founders, the premise being that funding a more diverse and inclusive mix of founders is not just good for creating a more level playing field, but also for the good of more well-rounded products that speak to a wider population of users.

“I was having a great time at GV, but I just saw this opportunity as being one that was too hard to resist,” said Toney of founding Plexo, which invests not just in startups but in funds that are following a similar investment principle to his. Investing in both funds and founders is something GV did as well, but the added ability to turn that into investing with a social imperative was important. “To have this byproduct of increasing diversity and inclusion in the ecosystem [is something] I’m super passionate about,” he said. 

We are living through a time when the tech world seems to be awash in capital. One of the byproducts of having so many successful tech companies has been limited partners rushing in to back more VCs in hopes of also getting some of the spoils: many firms are closing funds in record times, oversubscribed, and that’s having a knock-on effect not just terms of startups getting funded, but VCs themselves also multiplying with increasing frequency. All three said that the fact that the all identify as more than just “another new VC”, with specific purposes, also makes it easier for them to get themselves noticed to get involved in good deals.

Grayson said that the challenge of starting a firm in the midst of a global pandemic turned out to be a piece of good fortune in disguise in an industry that thrives on the concept of “disruption” (as we at TechCrunch know all too well…).

“We were really lucky that we started investing in a COVID world,” she said. “So many things have been up ended. And I think, you know, software adoption and technology adoption have been moved up 10-20 years in industry. [And] the way that we work together really has changed.” She also said that they’ve found themselves almost looking for companies “created in a COVID environment”, which indeed would qualify as a battle-tested business model.

In terms of raising funds themselves, Toney also recalled the period when we saw a real surge of VCs emerging to fund companies at the seed stage, and the growth of “solo capitalists” around that.

“I think what’s really interesting about solo capitalists is [how] they take their understanding of operations, and a deep network of other technologists, both from big companies as well as entrepreneurs, and … leverage access to all that deal flow by going out and actually raising capital from other sources, whether that be high net worth individuals or family offices or even institutions,” he said.

#disrupt, #funding, #startups, #tc, #tc-disrupt, #tc-disrupt-sf-2020, #venture-capital

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What makes Checkout.com different from Stripe

While Checkout.com has kept a low profile for many years, the company raised $380 million within a year and reached an impressive valuation of $5.5 billion. It wants to build a one-stop shop for all things related to payments, such as accepting transactions, processing them and detecting fraud.

You might think that it sounds a bit like Stripe. In an interview at TechCrunch Disrupt, I asked founder and CEO Guillaume Pousaz what makes Checkout.com different from Stripe, Adyen and other companies in the payment space. It comes down to a very different philosophy when it comes to product and market approach.

“We only do enterprise. We really only work with the big merchants. There are a few exceptions here and there but it’s mostly enterprise-only and it’s purely online,” Pousaz said.

“I once met [Stripe CEO] Patrick Collison and I joked with him. I said you might have a million merchants, I have 1,200 merchants but I know every single one by name and they all process tens of millions every year. So I think it’s just a different business,” he added later in the interview.

Checkout.com now has a ton of money sitting in its bank account, but it has been a long and slow journey to reach that level. The company has been around for many years and reached profitability in 2012. It has been spending very meticulously over the years.

When talking about the early days of the company, Pousaz said the team grew really slowly. “We can hire one employee this month. Now we can hire two employees this month,” he said.

Today, the company still tries to remain as lean as possible. “It’s really a matter of discipline. All these companies, they raise a lot of money, they spend a lot of money and I don’t challenge that model. For us, embedding that discipline and frugality in the company in how we run it is something that was important to us,” Pousaz said.

“There’s no problem with spending. Just make sure that when you’re spending, you’re wise about it. You just don’t spray and pray. You see this unfortunately too much with tech companies.”

That’s why Checkout.com mostly invests in its own product. Nearly two-thirds of the company is working in product, IT and engineering. Only 13% of the company is working in sales, which is much less than some of its competitors.

But why did Checkout.com raise hundreds of millions of dollars then? “At some point, you need validation. And the validation was really important for us. When you have Insight, DST, Coatue, GIC, Blossom it changes your dimension,” Pousaz said.

When talking about regulators, Checkout.com has licenses in Brazil, the U.K. and France (for contingency), Hong Kong, Singapore, etc. It’s a never-ending process as the company is still working on licenses in other key markets, such as Japan.

“These regulators are super thorough. You don’t pass because you’re a nice guy, you pass because you have the right processes,” Pousaz said.

I challenged that notion and mentioned the Wirecard collapse. He obviously thinks that Wirecard and Checkout.com are in a different position right now.

“All my money is sitting with JP Morgan, it’s pretty simple. There’s no bank account in the Philippines and funny stuff,” Pousaz said. “The Wirecard story is so big that the real question is — go and ask the question to the auditors. Because the auditors that I have, which for the record is PwC, ask me to show them the bank statements and everything. And there are super thorough, it’s a super long process.”

“How did the Wirecard story happen? I don’t know,” he added.

#checkout-com, #disrupt, #disrupt-2020, #disrupt-sf, #disrupt-sf-2020, #europe, #guillaume-pousaz, #startups, #tc

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Jennifer Doudna sees CRISPR gene-editing tech as a Swiss Army knife for COVID-19 and beyond

Jennifer Doudna, one of the pioneers of the gene-editing technique known as CRISPR, thinks the biotech tool could be an essential one for combating COVID-19 and future pandemics. Due to its capacity to be “reprogrammed” like software, CRISPR could eventually be integral to countless tests and treatments.

In an interview at Disrupt 2020, Doudna was all optimism for the technique, which has already proven to be extremely useful in less immediately applicable situations.

“One thing that’s so intriguing about the whole CRISPR technology, it’s a toolbox and there’s many ways to repurpose it for manipulating genomes, but also for detection, even getting virus materials and the kinds of reagents that you need for an effective vaccine,” she explained.

This is all because of CRISPR’s main asset: its ability to home in on incredibly specific sequences or structures and manipulate them. Certainly one way to use that is to snip out a potentially harmful bit of DNA, but that bit could also be amplified for easy detection.

“This is an opportunity to take a technology that naturally is all about detecting viruses — that’s what CRISPR does in [its native environment] bacteria — and re-purposing it to use it as a rapid diagnostic for coronavirus,” Doudna said.

The advantages CRISPR offers are threefold, Doudna explained: first, it’s a “direct” method of detection. Current tests rely on enzymes and proteins that are indirect evidence of infection, which limits their reliability and timing — you can’t, for instance, detect the virus before it starts producing that secondary evidence. CRISPR detects RNA from the viral genome itself.

“We’re finding in the laboratory that that means that you can get a signal faster, and you can also get a signal that is more directly correlated to the level of the virus,” she said.

Second, the sequence that the CRISPR complex searches for can easily be changed. “That means that scientists can reprogram the CRISPR system trivially, to target different sections of the Coronavirus to make sure that we’re not missing viruses that have mutated,” Doudna said. “We’re already working on a strategy to co-detect influenza and coronavirus; As you know it’s really important to be able to do that, but also to pivot very quickly to detect new viruses that are emerging.”

Very long GIF of a CRISPR Cas-9 protein seeking, finding, and snipping out a piece of DNA. Image credits: UC Berkeley

“I don’t think any of us thinks that viral pandemics are going away,” she continued. “The current pandemic is a call to arms, we have to make sure that scientifically we’re ready for the next attack by a new virus.”

And third, a CRISPR-based test wouldn’t be manufactured the same materials as other tests, making it easier to manufacture alongside them. Managing supply chains effectively will be crucial for getting vaccines, tests, and treatments to people as quickly as possible.

The barrier to CRISPR however is not theoretical but practical: It’s still more or less lab-bound because therapies using the technology are still very much under review. It is in clinical trials in some forms and COVID-19-related applications could be fast tracked but its novelty means it will be slower to reach those who need it. Not to mention the cost.

“This underscores what I think is one of the key challenges that we face in this in this age of advancing biotechnologies,” said Doudna. “That is, how do we make a technology like like CRISPR affordable and accessible to a lot of people? I’d like to see a day when CRISPR is the standard of care for treating a rare genetic disease, and it’s going to take some real R&D to get there.”

Perhaps one of the avenues for advancement will be the newly discovered sibling technique, CRISPR Cas-Φ (that’s a “phi”), which works similarly but is much more compact, owing to its origin as, apparently, a countermeasure by viruses that invade CRISPR-bearing bacteria. “Who knew they carried around their own form of CRISPR?” mused Doudna. “But they do, and it’s a very interesting protein, because it’s very small compared to the original formats for CRISPR that allow that allows a much, much smaller protein to be able to do [this] kind of editing.”

Doudna had much more to say about the possibilities for the technique of which she was one of the chief creators. You can see watch the rest of the interview below.

#biotech, #coronavirus, #covid-19, #crispr, #disrupt, #disrupt-2020, #jennifer-doudna, #tc

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Impact, a YC-style accelerator for the entertainment industry, spins out from Imagine Entertainment with backing from Benchmark

Hollywood has been better known for making films and TV shows about the tech industry than it has been for being a part of it, but today a new enterprise is launching, backed by a major Silicon Valley venture firm, that hopes to hit pause on that image.

Imagine Impact, a content accelerator that launched two years ago under production powerhouse Imagine Entertainment to impart a “Y Combinator” approach to sourcing new work and connecting it with production opportunities, has raised a Series A round of funding from Benchmark, the VC firm that has backed Uber, Twitter, Dropbox, Snapchat and many more — funding that it plans to use to continue building out its accelerator model as well as launching new technology ventures, it said.

With the investment, Imagine Impact is effectively spinning out of Imagine Entertainment, and rebranding as a standalone company called Impact Creative Systems.

Brian Grazer and Ron Howard, the high profile duo that in 1985 started the film and TV production company that has been behind a string of hits, stay on as founders, but Impact (as the firm calls itself) will be run day to day by CEO Tyler Mitchell. (And all three will be talking with us on the Disrupt stage today about this and more.)

Mitchell says that the amount of the investment, the first outside money that Impact has taken, is not being disclosed but that it’s in line with a typical Benchmark Series A. That would put it between $10 million and $20 million. The investment is being led by Bill Gurley, who will join the board with the deal.

The funding will be used to help the firm spearhead new ventures that continue building out the idea of taking a new approach to networking and finding career opportunities throughout the entertainment industry, breaking down some of the barriers of how business has always been done — through networks of who you know, lots of lunches and other hobnobbing. The idea is for the projects coming out of Impact to be underpinned not just with a tech ethos, but with actual technology.

First up is the launch later this year of The Creative Network, which Imagine describes as “an online marketplace and professional networking platform designed specifically for entertainment industry professionals to help bring efficiency and access to Hollywood.” It’s a little like LinkedIn meets Behance.

Up to now, Impact has been focusing its energies on building out its accelerators and securing deals for the writers in its cohorts, with the whole set-up inspired by the famous Silicon Valley accelerator.

The YC playbook is used in two ways. The first is in the model it’s using, where it opens applications to anyone interested to applying, and then provides those selected with mentorship, time and a little financing to do their creative work. The second comes in the form of the mentors having a lot of connections in the industry and using those to help the writers connect with others to produce their work.

The accelerator model has seen an accelerating amount of interest. Impact now has built a second accelerator outside of LA, in Australia; it has started a podcast featuring interviews with famous actors, directors and others (pointing to other kinds of content that it might spin out as business projects). And its inked a deal with Netflix Films to help source and develop content globally.

And perhaps most interestingly for laying groundwork for The Creative Network, it has built up a network of 30,000 writers across 80 countries; it has helped develop 72 projects; and 25 of those are now with major studios.

Those efforts have also had some tech built around them. Mitchell said that a beta of sorts for The Creative Network was built originally to use for the accelerator. “We built it because we were just three people running the accelerator and didn’t have the human resources available to send out or read potentially thousands of scripts” — specifically 3,000 script submissions in 72 hours — “so we built a mobile app.” Features include the ability to push submissions, make watermarks and track emails in the bigger database, the said.

“We talk about ourselves as a dating app,” joked Mitchell. “You have to get four people to fall in love with one story or writer or piece of material” to advance, he said, “the producer, director, star and financier. That involves a lot of phone calls and relationships and phone tag. It can be a very long process to triangulate and build the right teams.”

While efforts so far have been focused on building ways of connecting writers with producers, the bigger picture is to build a network that can bring in the rest of the ecosystem, including directors, actors and the extensive technical and admin talent needed to get a project off the ground and on to a screen. All of these connections up to now have been firmly stuck in the analogue world, making them slow, limited in terms of inclusiveness, and obviously very ripe for technological disruption.

“It takes 500-1,000 people in total to bring a project to life,” Mitchell said. And the bigger opportunity for connecting networks is massive. Mitchell estimates that just in the US, the production business employs 2.6 million people and accounts for some $177 million in wages each year and it’s growing.

“The old way of sourcing talent in the entertainment industry is based on who you know, which presents high barriers-to-entry for the fresh voices we need to hear from,” said Gurley, in a statement. “Impact is knocking down these barriers through a marketplace model that reduces information asymmetry and levels the playing field. Ultimately this leads to more opportunities and better outcomes for everyone involved.”

Indeed, Hollywood has been between a rock and a hard place when it comes to changing up its ways.

On one side, the industry regularly faces criticism for lacking diversity in its ranks and failing to identify with the masses. Complaints include too few women in decision-making roles and the difficulty of finding work if you don’t fit into particular age and appearance types; accusations of racism (OscarsSoWhite being a recurring theme each awards season); and more.

On the other, the media industry — including how consumers watch video — is rapidly evolving. For better or worse, the TV was once the absolute epicenter of how a family came together and saw what was happening in the world outside. Those Happy Days are gone now, so to speak. People watch YouTube and TikTok, Snapchat and Netflix, and while some of that definitely is still tapping into the older Hollywood ecosystem — Netflix, of course, repurposes a lot of traditional TV and film content, and commissions its own — it also speaks to just how rapidly the mediums and their delivery are changing.

While the first efforts of Impact are addressing the first group of these issues, one follow up question — the sequel, you might say — might be how and if Impact chooses to use its networks, tech and strategy to think about the second of these.

Before coming to the entertainment industry (he was been a writer and producer for years before this) Mitchell said he had a background in finance and has “always been entrepreneurial.” The tech scene in LA has definitely been growing over the years — it’s home to Snap and others — meaning its ripe for tapping for hiring more people for the startup.

“We’re talking with data scientists to build better algorithms for the Network and yes we’re hiring engineers,” he said. “We’ve attracted some incredible talent and the majoirty of the investment is going to scaling our team.” Impact now has 11 full time technical staff, he said. 

“We could not be more thrilled to be working with Benchmark. They have an unrivaled track record in building marketplaces and companies that have changed the world,” said Grazer, in a statement. “From the moment we met Bill, it was clear that he understood and believed in our vision. Benchmark is not just an investor, but a true partner, whose expertise you can’t put a price on.” 

“With Benchmark, we are now in a better place to serve the greater creative community worldwide,” said Howard, in a statement. “Their investment enables us to go wider and deeper in bringing great storytellers to the forefront and connecting them to the entertainment industry.”

#disrupt, #entertainment, #imagine-entertainment, #impact, #recent-funding, #startups, #talent, #tc

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Supercell’s CEO talks about its majority owner Tencent, finding its next hit, and more

Mobile games maker Supercell has been one of the great, understated, breakthroughs of the European startup world. The Helsinki-based mobile games maker built an empire out of Clash of Clans, raking in tons of money and catching the eye of world class investors and eventually a new strategic majority shareholder in the form of Tencent at a $10.2 billion valuation.

That was in 2016. So how does a hot startup keep its edge?

As part of this year’s virtual Disrupt,we sat down to talk with the company’s founder and CEO, Ilkka Paananen, about that and the other challenges and opportunities facing the company, and asked for his tips and opinion on spinning up and running startups in Europe today.

Times are definitely not easy right now: all of us are living through a global health pandemic, and economies as a result of that are teetering; and there is an interesting sea change happening as gaming companies (along with other content makers) face off against big tech, where question of whether platforms or the games themselves have the upper hand. (The most visible and recent example of that: the counter-lawsuits between Epic and Apple over in-app payments.)

For Supercell specifically, its majority owner, Tencent, is in hot water in the US (a major market for Supercell); and it’s sitting on a still-popular but now-ageing game franchise that you could argue is in the middle of its own Battle Royale against the many other big games that are vying for people’s attention (and spending power to keep playing and levelling up). In short, the company itself, now 10 years old, may itself be facing more existential questions of, who are we now, and what comes next?

As you’ll see in the video below, Paananen is very sanguine and calm, which is to say quite Finnish, about a lot of this.

Even without the experience thus far of Supercell under his belt, he has been in the industry for years. Supercell is his second big hit company: before that he founded Sumea, which was acquired by Digital Chocolate, where he became president in the now-defunct bigger studio’s heyday. And, he has been and is an investor, too: most recently Paananen backed Zwift, the gamefied home fitness startup, in its most recent, $450 million round, which included him joining the company’s board. All of this is to say that he can see the bigger picture.

The Tencent issues in the US, he said, are something that the company is watching. But not only are they unresolved — indeed just this week, ahead of any proposed bans on Tencent properties and WeChat in particular, the US government issued more clarification on how people are liable for using WeChat. In any case, Paananen said in the interview that he believes that Supercell doesn’t fall under the US executive order to be shut down, since Tencent is only a shareholder, not a full owner. He’s still waiting to see how it all plays out.

“Our current understanding [is that] it’s about WeChat not Tencent as a whole,” he said, “and that it doesn’t apply to Tencent-invested companies like Supercell.” (Also: one of the good things to have come out of not getting fully acquired, it seems.)

Similarly, Paananen is not overly concerned about the fact that its big hit, while still one of the highest grossing apps globally, is getting on and slowly bringing in less revenues.

Judging by the fact that Supercell has yet to follow up with another successful franchise, and has killed quite a few attempts in the meantime, the process to produce a hit, in fact, still seems to be as elusive to a company that has produced a hit already as it is to those that have not.

“It would be nice to be always on this kind of a growth curve, but the reality is… it’s very much about hits or misses,” he said.

“Sometimes figures go up, and sometimes they go down [so] what’s your time horizon? We never ever think about the next quarter, and very, very rarely think about it and maybe next year, I think that’s a target in itself, you know. We try to think in decades. Our dream is to build a game so as many people as possible will play for a very long time. We are inspired by companies like, say, Nintendo. And if you’re going to take that… then that changes your perspective.”

The company has been building out its options, though, making about three investments a year in other gaming startups, and some full acquisitions of studios, to diversify the team and bring in more options for new games in the future. Later in the Q&A with viewers, Paananen said Supercell has no plans yet for anything in AR or VR, with a firm belief that mobile, and the mechanics of a touch screen, are the best for what it’s building.

It seems that most valuable lesson Paananen has learned, it turns out, is the thing that continues to be his top priority: building the right team for the long haul.

Making sure you have a group that can work together, inspire each other and be productive has been the constant, one that perhaps means even more as the company grows bigger and we continue to work under very decentralised circumstances.

“We are currently on the look-out for people from all around the world to join Supercell to build the be the best teams and then of course the best games,” he said.

Hear about all this, plus Paananen’s opinion on raising money and more, below.

#apps, #clash-of-clans, #disrupt, #europe, #finland, #gaming, #mobile-gaming, #startups, #supercell, #talent, #tc, #tc-disrupt, #tcuk, #tencent

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Finance and the digital divide: a conversation with Tunde Kehinde of Lidya

Small and medium businesses have been some of the hardest hit in the Covid-19 pandemic. And all that has been as true in emerging markets as it has been for SMBs in the developed world.

Tunde Kehinde has had a front-row seat witnessing and responding to that crisis. He’s the CEO and co-founder of Lidya, a startup out of Nigeria that has built a platform for SMBs to apply for and get loans and other financial services, aimed at markets on the African continent and increasingly also in emerging economies in Europe. We sat down with him as part of our new virtual Disrupt series, where we have been connecting with some of the biggest movers and shakers in the tech world beyond the US.

Kehinde has been called the “Jeff Bezos of Africa”, a funny title you might think sounds like tenuous or cheesy marketing until you know more about his history in business, the impact it’s had so far (he’s not that old) in the region, and until you hear him speak.

Kehinde — born in Nigeria and exposed to a lot of the US way of doing things through university years at Howard and then Harvard — was previously the co-founder of one of the biggest tech startups to have come out of the continent — Jumia — an Amazon-style marketplace that is slowly branching out into a wider web of services like payments, food delivery and more.

Initially incubated by Rocket Internet, Jumia raised hundreds of millions of dollars from VCs, scaled to multiple countries on the continent, and is now traded publicly on Nasdaq with a current market cap of $660 million — modest by Amazon standards maybe, but a real milestone for African tech.

That alone would probably merit some to wonder if he’s the “next Bezos”, but it’s been his follow-up act at Lidya that paints a broader picture. In short, there is a lot more potential for payment and online commerce services in emerging markets, and focusing on helping small businesses cross the digital chasm is not just a good business opportunity, but a developmental one, too. Capital, specifically the lack thereof, has always been a huge hindrance to growth, and these days it’s an even more critical axiom to address.

You can see the full Disrupt conversation below, where Kehinde covers a lot of ground, not just about his company but about how tech is evolving in the region.

The breakout success of a handful of startups — which include the likes of new digital payments unicorn Interswitch as well as Jumia — venturing into multiple jurisdictions, he noted, is seeing more VCs also increase their interest and investment activity. He thinks the next very important step is to have more exits, which will confer a different kind of credibility and liquidity to the market.

And there should be, he added: There are few places like the African continent that is a blank slate, where you can come in quickly and build a really dominant player, if you have the right capital and team, he said.

“It’s night and day between seven years ago and now,” he added, but also admitted that while financial services and the related world of e-commerce are obvious places to start — it was also the classic category to tackle first in the US and Europe many years earlier — he still sees more interest from VCs in the U.S., Europe and Latin America.

His advice for VCs?

“If I were a VC I would look at what have been the biggest successes from folks like me,” he said. “Seeing Jumia and others going public, as more of these things happen the more you can develop a great policy and that will make it easier. I launched, I got to scale, I got return on investment, the right infrastructure can be built.”

Tune in here to hear him also talk about China and how to handle investment from outside Africa; what other big deals in loans for SMBs, such as Kabbage getting acquired by Amex, mean for startups like Lidya, the impact of the global coronavirus pandemic on business; identifying opportunities beyond your immediate region; and more.

#africa, #african-tech, #disrupt, #ecommerce, #emerging-markets, #finance, #fintech, #jumia, #lidya, #loans, #nigeria, #smbs, #smes, #startups, #tc, #tcuk, #techcrunch-disrupt, #tunde-kehinde

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Blume Ventures’ Karthik Reddy on Indian startup ecosystem, geo-political tension with China and coronavirus

Despite the coronavirus outbreak, which has slowed down deal-making across the world, dozens of startups in India have raised considerable amounts in recent months. Unacademy, which raised $110 million in February, closed a new round of $150 million this month.

These large check sizes, and the frequency at which they are being bandied out, were almost unheard of in India just 10 years ago. The list of problems these local startups were solving then was also quite smaller back in the day.

Karthik Reddy has seen this change very closely.

He co-founded venture capital firm Blume Ventures, where he also serves as a partner, 10 years ago. Blume Ventures is the largest Indian venture capital firm. In a wide-ranging interview at Disrupt 2020, Reddy talked about the state of the startup ecosystem in India, some of the challenges it is confronting today and what lies ahead for the market.

“Fifteen years is what you should consider the active VC build-out in India. For the first five to seven years, we were kind of faking it till we make it. We sold the idea that we can replicate what the U.S. and China have done,” he said.

The breakout moment in India happened when low-cost Android smartphones flooded the market. A handful of startups with consumer-facing services such as Flipkart, Paytm and Zomato emerged to serve the first tens of millions of smartphone users in the country.

“The Hail Mary moment there was Reliance Jio’s arrival in the market,” he said. India’s richest man, Mukesh Ambani, entered the telecommunications market in the second half of 2016 with the world’s cheapest mobile tariff.

Moreover, for several months, Ambani simply did not charge Jio subscribers anything for access to 4G data. So India at large, once conscious about each megabyte it spent on the internet, suddenly started consuming gigabytes of content everyday. “It democratized data and smartphones at a scale that we have not seen in countries other than China,” said Reddy.

Karthik Reddy is the co-founder of Blume Ventures, the largest Indian venture capital firm

As hundreds of millions of users in India arrived on the internet, scores of startups in the country started to solve more complex problems: Bangalore-based startup Meesho today is helping millions of women sell products digitally; Classplus, a Blume Ventures-backed startup, has built a Shopify-like platform for teachers and coaching centres to serve students directly.

As India grew into the world’s second largest internet consumer, it has also attracted American and Chinese technology groups, all of which are looking for their next billion users. Several major investment firms, including Silver Lake, Alibaba Group, Tencent, GGV Capital, Tiger Global, General Atlantic, KKR, Vista, and Owl Ventures have also arrived and become aggressive in their investments in recent years.

But the geo-political tension between India and China have slightly complicated matters. In April this year, India amended its foreign direct investment policy to China to seek approval from New Delhi for their future deals in the country. Chinese investors have ploughed billions of dollars into the Indian startup ecosystem in recent years.

It’s a sensitive topic, given the involvement of the government, that most VCs in India are not comfortable addressing it even off the record. But Reddy weighed in.

“If not an arm or limb, it cuts off a finger or two for your choices. You are a little handicapped,” he said. “But there’s a caveat to that. It’s limited to certain segments of the market. I don’t think China and Hong Kong investors, even though they were very familiar with Chinese VC success story, were really interested in India’s deep tech and cross-border tech,” he said.

Today those areas account for more than a third of the robust ecosystem in India, Reddy argued. “If you look at the entire ecosystem collectively, there’s a single-digit influence of Chinese capital. […] If you ask me personally, 40% of my portfolio is not even remotely affected by it,” he said.

But several large consumer-facing Indian startups, such as Paytm, Zomato and Udaan, do have Chinese investors on their cap tables. Reddy said they would be impacted as uncertainty looms over when — and if — India would offer any relaxation to its current stand.

He said he is hopeful that the government would provide some distinction to VC-managed fund money that is not necessarily Chinese just because it’s run by someone who originated there.

Reddy also spoke about why he thinks early-stage startups, despite the proliferation of VC firms in India focusing on young firms, continue to receive less attention. We also spoke about how the coronavirus is impacting his portfolio startups and the industry at large and what advice he has for startup founders to navigate the turbulence times. You can watch this and much more in the interview below.

#alibaba-group, #asia, #blume-ventures, #china, #disrupt, #disrupt-2020, #india, #karthik-reddy, #startups, #techcrunch-disrupt, #unacademy, #venture-capital, #zomato

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PlayVS is halfway to recruiting every state into its global esports community

Millions of high school kids play online multiplayer games, but they seldom have crosstown rivals in Fortnite or Valorant. PlayVS wants to make that happen with its platform for school-sponsored esports, and it’s growing like crazy, doubling its staff in the last year and putting thousands of schools on its platform.

PlayVS connects online games with official school administration and branding, elevating esports from hobby to school-sponsored activity.

“I think we’re building the biggest company in gaming,” founder and CEO Delane Parnell said in an interview at Disrupt  2020 this week. With around 20,000 high schools signed up currently and nearly a hundred million dollars in the bank to grow with, it’s not a totally unrealistic statement.

The company collects $64 per player per semi-yearly season, which starts to add up real quick when you have Counter-Strike teams of a dozen people with alternates, or competing League teams at the same school — multiplied by 20,000, of course. A bit of napkin math suggests income from existing customers is easily in the tens of millions.

Parnell offered the following metaphor to explain what the company aspired to.

“Imagine if there was one basketball court, and every kid who ever wanted to play basketball, whether it’s on behalf of their school, or pick up, or some sort of tournament, that’s the court that they had to play on,” he said. “That’s what we’re building.”

Sure, it sounds a little bit like a monopoly on hoops, but the problem right now is that there really isn’t a shared court at all. Esports is wildly disorganized at that level, if it’s organized at all (and let’s be honest, even at the pro level it’s a bit of a jumble). PlayVS wants to provide the connective tissue so that there’s one place that both players and administrators go to when it comes to inter-school competitive gaming.

Parnell explained that the last year has been about learning the ropes and establishing a presence in the also quite confusing world of state school systems.

“We certainly built the base of the business on the partnership with the NFHS — essentially the NCAA of high schools, they govern and write the rules for our high school sports,” he said. But then individual relationships need to be established with districts, financial programs, state leaders, and of course the game publishers themselves, which are understandably eager to connect with the younger generation of gamers.

So far schools in 23 states have signed up, and Parnell said they’re on track to get every state in the union on board by 2022.

“Those are partnerships that take a little time to form. It also takes additional time to build the technology that actually enables online esports, which most people think exists today, but it actually doesn’t,” he said. “So we’ve started to invest very deeply into hiring a team to build our product. We have a ton of capital in the bank and we intend to use that very wisely.”

The product build-out is more than buying servers — it’s attempting to create parity with the tools available in the context of sports like football and basketball.

“There’s products and services that we can bake in, things like recruiting, scouting, proven technology, highlights… these are things that would normally exist from independent companies within traditional sports,” he said. “One company does one thing, a thousand companies do ancillary things that make the sports experience better for every stakeholder, a parent, a coach, a player, etc. We’re going to be able to do all of those things within the PlayVS ecosystem, because we’re the league operator and the sole holder of that data. We will effectively have complete control of what that experience looks like and all of the revenue models associated with that.”

For comparison he suggested fantasy sports, now a huge industry but not one dominated by a single entity. “If there was one group, like CBS for example, that could have aggregated all that behavior, that’d be a $40-50 billion a year company. But they couldn’t get in with, you know, the NFL, the NBA, to give them exclusive rights to be the only fantasy provider on the market,” Parnell explained. “Game publishers are willing to do that with us, they’re willing to integrate with our product because they know we can execute. So I think that’s a big opportunity. And one could be worth hundreds of billions of dollars.”

PlayVS won’t be expanding into pro leagues, he confirmed, saying that the high school and college level work is as much as they can handle right now. But they’re overwhelmed in the best way.

“It’s almost as if the NBA existed for four years, and then they went back and said hey, we need to build high school basketball, college basketball, etc,” he said. “Obviously there’s a lot of catching up to do.”

#delane-parnell, #disrupt, #disrupt-2020, #gaming, #playvs, #tc

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Facebook addresses political controversy in India, monetization opportunities, startup investments

At the beginning of the previous decade, Facebook had a tiny presence in India. It had just started to slowly expand its team in the country and was inking deals with telecom operators to make access to its service free to users and even offer incentives such as free voice credit.

India’s internet population, now the second largest with more than 500 million connected users, itself was very small. In early 2011, the country had fewer than 100 million internet users.

But Facebook ended up playing a crucial role in the last decade. So much so that by the end of it, the social juggernaut was reaching nearly every internet user in the country. WhatsApp alone reaches more than 400 million internet users in India, more than any other app in the country, according to mobile insight firm App Annie.

This reach of Facebook in India didn’t go unnoticed. Politicians in the country today heavily rely on Facebook services, including WhatsApp, to get their message out. But it has also complicated things.

Rumors have spread on WhatsApp that cost lives, and politicians from both the large political parties in India in recent weeks have accused the company of showing favoritism to the other side.

To address these issues, and the role Facebook wishes to play in India, Ajit Mohan, the head of the company’s business in the country, joined us at Disrupt 2020. Following are some of the highlights.

On controversy

A recent report in WSJ claimed that Ankhi Das, one of Facebook’s top executives in India, decided against taking down a post from a politician from the ruling party. She did so, the report claimed, because she feared it could hurt the company’s business prospects in India.

In Mohan’s first interview since the controversy broke, he refuted the claims that any executive in the country holds power to influence how Facebook enforces its content policy.

“We believe that it’s important for us to be open and neutral and non-partisan,” he said. “We have deep belief and conviction that our enabling role is as a neutral party that allows speech of all kinds, that allows expression of all kinds, including political expression, and a lot of the guidelines that we have developed are to make sure that we really enable our diversity of expression and opinion so long as we’re able to make sure that the safety and security of people are protected.”

Mohan said the internal processes and systems inside Facebook are designed to ensure that any opinion and preference of an employee or a group of employees is “quite separate from the company and the company’s objective enforcement of its own policies.”

He said individuals can offer input on decisions, but nobody — including Ankhi Das — can unilaterally influence the decision Facebook takes on content enforcement.

“We do allow free expression inside the company as well. We don’t have any constraints on people expressing their point of view, but we see that separate from the enforcement of our content policy. […] The content policy itself, in the context of India, is a team that stands separate from the public policy team that is led by Ankhi,” he added.

This photo illustration shows an Indian newspaper vendor reading a newspaper with a full back page advertisement from WhatsApp intended to counter fake information, in New Delhi on July 10, 2018. (Photo by Prakash SINGH / AFP)

On India and monetization

Even as Facebook has amassed hundreds of millions of users in India, the world’s second largest market contributes little to its bottom line. So why does Facebook care so much about the country?

“India is in the middle of a very exciting economic and social transformation where digital has a massive role to play. In just the last four years, more than 500 million users have come online. The pace of this transformation probably has no parallel in either human history or even in the digital transformation happening in countries around the world,” he said.

“For a company like ours, if you look at the family of apps across WhatsApp and Instagram, we believe we have a useful role to play in fueling this transformation,” he said.

Even as Facebook does not generate a lot of revenue from India, Mohan said the company has established itself as one of the most trusted platforms for marketers. “They look to us as a material partner in their marketing agenda,” he said.

He said the company is hopeful that advertising as a GDP will go up in India. “Therefore ad-revenue will become substantial over time,” he said.

For Facebook, India is also crucial because it allows the company to build some unique products that solve issues for India but could be replicated in other markets. The company is currently testing an integration of WhatsApp, which currently does not have a business model despite having over 2 billion users, with new Indian e-commerce JioMart, to allow users to easily track their orders.

“We think there is opportunity to build India-first models, experiment at scale, and in a world where we succeed, we see huge opportunity in taking some of these models global,” he said.

Facebook as a VC

Facebook does not usually invest in startups. But in India, the company has invested in social-commerce firm Meesho, online learning platform Unacademy — it even participated in its follow-up round — and it wrote a $5.7 billion check to Jio Platforms earlier this year. So why is Facebook taking this investment route in India?

“We wanted to create a program for taking minority investments in early-stage startups to figure out how we could be helpful to startup founders and the ecosystem as a whole. The starting point was backing teams that were building models that in some ways were unique to India and could go global. Since we made an investment in Meesho, they have made a strong thrust in Indonesia. These are the kind of companies where we feel we can add value as well as we can learn from these startups,” he said.

The partnership with Jio Platforms follows a different rationale. “The transformation we talked about in India in the last few years, Jio triggered it,” he said. Other than that, Facebook is exploring ways to work with Jio, such as with its partnership with Jio’s venture JioMart. “It can really fuel the small and medium business that is good for the Indian economy,” he said.

Mohan said the company continues to explore more opportunities in Indian startups, especially with those where the teams think Facebook can add value, but he said there is no mandate of any kind that Facebook has to invest in, say dozens of startups in three to four years. “It’s not a volume play,” he said.

But would these firms, including Reliance Industries, which operates Jio Platforms and Reliance Retail, will receive any special access on Facebook’s services. What if Amazon, BigBasket, Grofers, or Flipkart want to integrate with WhatsApp, too? Mohan said Facebook platform is open for every firm and everyone will receive the same level of access and opportunities.

In the interview, Mohan, who ran the Disney-run Hotstar on-demand streaming service in India, also talked about the growing usage of video in India, the state of WhatsApp Pay’s rollout in the country, what Facebook thinks of India’s ban on Chinese apps, and much more. You can watch the full interview below.

#ajit-mohan, #apps, #asia, #disrupt, #disrupt-2020, #facebook, #facebook-india, #hotstar, #meesho, #social, #techcrunch-disrupt, #unacademy, #venture-capital, #whatsapp, #whatsapp-pay

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Mette Lykke on food waste and building a big startup on a big idea

Food has been an ever-present touchpoint in the world of startups, and I don’t mean the free catered lunches, or expansive canteens that you get in bigger places, to keep startup workers sustained but also focused on building, without leaving the building.

There are hundreds, maybe even thousands, of enterprises spun out of the idea of making it easier and faster (but maybe not cheaper) for you to get the food you want to eat or cook; and there are also hundreds of business ideas hatched out of the idea of using tech to create new kinds of foods ways to eat it, ways to prepare it.

Too Good To Go is a different kind of bird. It’s a food startup that’s actually about trying to find a landing place for food that no one seemingly wanted in the first instance, and the lower toll it takes on your conscience is matched by prices that put less pressure on your wallet.

Mette Lykke, the CEO of the startup, sat down with us at Disrupt this year to talk about the company’s mission, the state of play today, and also about the wider opportunities of building startups around big ideas and social good.

Her track record gives her a great perspective. Before taking the helm at Too Good To Go, she was one of the co-founders of Endomondo, the fitness tracking app, which was eventually acquired by Under Armour, part of a bigger move from the fitness apparel company to fill out a bigger strategy around quantified self, and what you do once you put on your fitness gear.

Exercise, staying healthy, saving money, and eating better are all things that have been on a lot of people’s minds of late. We’re living through a global health pandemic that’s impacted us in a lot of different ways, but for many of us, one of the good things that has come out of it has been a set of  salient takeaways about staying in shape, how best to use the time that we have, eating better and generally looking after ourselves and our planet in a more conscientious way.

One-third of food produced today is either lost or wasted, Mette tells us, providing a ripe opportunity to create a way to tap into some of that waste to reduce its financial and environmental impact, and that is what Too Good To Go has set out to do.

Its business is set up as a two-sided marketplace where food “providers” (eg restaurants and producers) contribute surplus food items that “buyers” (eg, consumers) can then browse, purchase and then pick up at cut-down prices — a service that’s now live in 10 countries, she said.

Yet as you might expect, TGTG has definitely seen a major impact from the pandemic, when the basic business model took a huge hit as people were ordered to stay at home, and many restaurants and others simply shut down because staying open to service just a few customers who were venturing out for take-out food simply didn’t make sense. The company saw a 62% drop in revenue as a result.

Over time, though, it started to come up with ways of working with the suppliers, even providing a way for some of them to connect with customers in cases where they had no other means to do so.

That has included working with more suppliers, whose customers (often restaurants) were disappearing; and providing temporary takeaway services for restaurants that didn’t have these in place already, to help get food to people. It also worked “pro bono”, foregoing its commission, for customers just to help keep them afloat and working with TGTG.

It’s not completely back to business as usual now — it is probably still too early to tell how many enterprises will come out of Covid-19 intact, and in the meantime they may get a lot more nervous about the idea of cannibalising their businesses with cut-price goods.

Still, there is hope. Too Good To Go is finding that there is still definitely an appetite (no pun intended) for buying food at lower prices that serves a good purpose: fighting food waste at a time when many are more concerned about how their basic consumer choices can make a difference for the better, or worse.

While fighting food waste and staying in shape (and getting fighting fit) do not seem to have a huge amount in common — besides, of course, pivoting on the role of eating as something that impacts both — there is actually an interesting thread that connects them: they are both focused on activities that consumers can do to improve and feel better about themselves.

There was a time when these kinds of premises might not have held much sway with financiers as solid business ideas: idealism (if it was ever there to begin with) quickly gives way to the bottom line a lot of the time.  But Mette’s success, as a female entrepreneur in Europe no less, is a sign of how things are evolving.

“There are a lot of things starting to happen,” she said both of social goodstartups and their prospects with VCs, an interesting insight also considering that she herself is an occasional investor as well. “I’d love to see more social good businesses getting to scale [even if] we’re still probably in the early days.”

Listen below to hear more of her insights.

#apps, #disrupt, #ecommerce, #endomondo, #europe, #food, #mette-lykke, #tc, #tc-disrupt-sf-2020, #techcrunch-disrupt-sf-2020

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Indian decacorn Byju’s CEO talks about future acquisitions, coronavirus, and international expansion

Since India enforced a lockdown across the country in late March, shutting schools and other public places, Bangalore-headquartered startup Byju’s has emerged as one of the quintessential platforms for school-going students in the world’s second largest internet market.

It took the startup about four and a half years to amass 40 million students. Since the lockdown, its user base has ballooned to 65 million, its co-founder and chief executive Byju Raveendran said at Disrupt 2020 conference Tuesday.

Students say they were attracted to Byju’s platform because of the way it taught them subjects. Byju, who is a teacher himself, found intuitive ways like using real-life objects such as a pizza to teach complex math problems.

Today, his startup is valued at nearly $11 billion (which makes it India’s second most valuable startup), and has presence across several international markets. Late last year, Byju’s announced it has also turned profitable. It’s not everyday that we see an Indian startup with any of these three characteristics — let alone all three in one.

In a wide-ranging interview at Disrupt 2020, Raveendran shared the journey of Byju’s, which started as an offline platform that taught students at classrooms, auditoriums, and stadiums; the startup’s plans for further expansion in international markets; his views on merger and acquisition opportunities; and how the coronavirus pandemic has affected his business and the education landscape at large in India, among a number of other things.

“Unfortunately it took a pandemic for most stakeholders to try out digital learning. Parents are now accepting the online segment more than before. This sector is clearly at an inflexion point,” said Raveendran.

To make online learning more accessible to students, Byju’s made all of its offerings free during the pandemic. But the platform’s paying subscribers, now at more than 4 million, remains on a steady path of growth, he said.

The startup expects to generate more than $1 billion in revenue this year from India itself and take home profits between $150 million to $180 million, he said.

“I would still call it a relative success. What we consider as the target audience, we have less than 4% of penetration in that segment,” he said. “More than one-third of school-going students don’t have a smartphone. There’s still a lot of catch up to do.”

Another phenomenon that the pandemic has kickstarted in India is some consolidation in the edtech startup space. Byju’s itself acquired WhiteHat Jr., an 18-month-old startup that teaches coding skills to students, for $300 million.

TechCrunch has reported that the startup is engaging with several more startups including Indian firm Doubtnut, which through its app allows students to take a picture of a math problem and delivers step-by-step solution.

Here’s what Byju’s had to say about that: “The long-term potential of the sector is at an all-time high. […] We are looking for companies that can add strong product components to either our existing userbase or potential new customers in new markets, or companies that can give us some kind of distribution so that we get a headstart to launch in a new market — especially English speaking markets.”

“You will hear of a few more acquisitions from us. We are exploring some of them very seriously,” he added. The future acquisitions will again be all-cash deals, Byju said, as he “values equity more than others.”

On IPO, fundraise, and international expansion

Byju’s isn’t looking to go public for at least two years, the chief executive said. “We have strong business fundamentals; we have been able to find the right balance between high-growth and sustainable growth and created a very profitable model in such a short period of time. But we have not seriously thought about the public listing,” he added.

And it appears that investors in Byju’s are also not in a hurry. “We don’t need to do public listing to give exit to some of the early investors because the business itself will generate enough cash. A good number of them have already taken the money they invested out in the last few rounds,” he said.

Byju’s has raised more than $700 million this year. We asked Byju why is the startup raising capital. “We have been very capital efficient in terms of how we have used the primary capital we have raised. In the first five years, we have utilized less than $350 million of the primary capital — which shows how we have efficiently scaled the model,” he said.

“Most of the recent fundraising is to finance inorganic growth like full-cash acquisitions. We are utilizing it to add some strong business models. We never raised money because we needed it. It was always to add the right partner. In recent times, we have added long-term, patient investors,” he said. Byju’s is likely not done with its fundraising spree yet as the startup is currently engaging with at least two more investment firms.

For expansion in international markets, Byju said it plans to launch a digital learning app aimed at kids in several English-speaking markets. He said WhiteHat Jr., will introduce math subject to its offering to serve customers in several markets including Australia, New Zealand.

We also talked about what he thinks of other giant startups in India that are not profitable today, the kind of message that sends to international investors, and whether there is room for any new player in the education market in India, and much more. You can watch the full-interview below.

#apps, #asia, #byju, #byjus, #disrupt, #disrupt-2020, #edtech, #education, #india

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Satellite Vu aims to scope out the whole globe with thermal vision

Earth observation has grown from government-run missions to a crucial everyday business tool, but it still has room to grow. Specifically, into the thermal infrared spectrum, if startup Satellite Vu gets itself into orbit. The company plans to be able to monitor the heat signatures of most of the planet’s buildings with a satellite constellation built for the purpose.

Presenting today at TechCrunch Disrupt Startup Battlefield, Satellite Vu co-founder and CEO Anthony Baker explained the huge market for anyone who can tell with precision how much heat is being emitted by buildings, fields and other features.

Heat could indicate poor insulation, for one thing, and a waste of energy on HVAC. It could show the true (not reported) hours of operation at a factory or mine. It could track burning natural gas or waste emissions from refineries. With a resolution of 3 to 4 meters — an order of magnitude or more better than what’s out there — it might even be able to estimate the attendance of outdoor events or, for that matter, troop concentration in warfare. And of course it can do all this in the dark of night.

Baker told TechCrunch that he felt the Earth observation business, despite producing successful endeavors like Planet, still had lots of room to grow.

“Planet and Google Maps, they can show you what’s going on on the outside of a building. We can show you what’s going on inside,” he explained.

The tech behind it is both new and old. Infrared detection goes back decades, but doing so from orbit to within a fraction of a degree, and at this level of detail, is a very different proposition. The tech Satellite Vu is based on began as an Oxford-developed sensor for the Lunar Trailblazer orbiter that would look for water on the Moon’s surface; the company has an exclusive license to it.

“We took the sensor and space-hardened it, and did all the ‘new space’ stuff,” i.e. things like miniaturization and power optimization, Baker said. The problem with making the device smaller and more efficient, though, is “it affects the image — distorts it and blurs it. So we found a way to deal with that.”

 

Satellite Vu follows in the footsteps of Apple, Google and others, which in attempts to improve their smartphone cameras have found that there’s precious little improvement to be gotten out of the hardware, and instead focused on the software.

Satellite Vu

Like those of tech companies, Satellite Vu’s system collects information from dozens of sequential images and interprets that into an improved single one.

“We stack the images, and we can get a higher resolution, get rid of aberrations in it, do lots of other things. And it’s all patentable,” Baker added.

The result is a remarkably cheap satellite: maybe $15 million, and the company only needs 7 to get the worldwide coverage it plans to offer. For comparison, Baker said, the European Space Agency just greenlit a €500M project that would collect thermal imagery at a 30-meter resolution (smaller is better).

Competition in Earth observation is strong, but in this particular niche it’s practically non-existent in the commercial space. Planet’s satellites can see near-infrared spectra, but that’s not enough to get detailed heat data. There are military satellites and some from NASA or ESA, but they tend to be old, special-purpose, classified, or all three. Getting regular thermal imagery from orbit from a commercial provider isn’t really a possibility. Drones and high altitude flights are an option but not quite the same thing. And while there are a couple startups looking to get into the same domain, there’s probably room for everyone.

“It appeals to a lot of people, and government agencies around the world want a commercial source for this data,” Baker said. “The easiest market is probably ESG [environmental, social and governance] and green financing. Everyone is investing in green materials and stocks, but how do you know they’re green? No one’s counting. But we can measure it.”

Compliance with environmental law is difficult to monitor, and as new rules are established, new methods for making sure people abide by them are much in demand. It’s also helpful for companies that, for instance, are making voluntary efforts to go green and need an objective record that shows, for example, that their buildings are heated or cooled at certain efficiencies or that their datacenters operate at certain capacities and hours.

The clear demand for this service makes the daunting “We’re building a satellite” business model a little less daunting for investors. “They want to know where you’re going to make your first dollar. So if customers are willing to put money on the table, VCs will too,” Baker said. Right now the company is operating on grant money, but will soon need the kind of cash those programs don’t tend to part with all at once.

The immediate plan is to demonstrate the sensor in a series of flights using traditional aircraft, after which customers will, Baker hopes at least, start throwing money at them. Letters of intent (of which Satellite Vu has eight figures worth) are all well and good, but nothing beats a good old fashioned contract.

The best news is that launch costs, which might have grounded a company like this a few years ago, are now down to record lows.

“Elon’s deal for small satellites is just amazing. 200 kilos for a million dollars? That’s $5,000 a kilo — I’ve bought rockets in my career for $50,000 a kilo,” Baker said.

By going to a standard orbit on a ride share with SpaceX’s own Starlink launches, Satellite Vu keeps costs low and can break even with just one or two of its birds in the air. As with visible-spectrum orbital imagery, applications tend to emerge once the data starts coming out, so the company hopes diversify its offerings once it shows the capabilities of its constellation.

#aerospace, #battlefield, #disrupt, #disrupt-sf-2020, #satellite-vu, #science, #space, #startups, #tc

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A must-see conversation on the state of VC, this year at Disrupt

On a surface level, the world of venture capital doesn’t look to change much year to year. But in truth, the industry is very much in flux, with many firms grappling with a lack of diversity, dealing with succession questions, and confronting a growing pipeline of aging portfolio companies — to name just a few of the issues of the day.

In fact, one of the biggest shifts in the industry — one that’s years in the making but with no end in sight — is its atomization. Once a clubby industry, the landscape today sees new players, backed up by real dollars, every day, all over the world.

Indeed, at this year’s Disrupt, we’re very excited to be sitting down with three venture investors who spent much of their careers with powerful outfits before more recently — and boldly — striking out on their own to build their own brands.

It’s with their help that we’re going to take stock of many of the trends roiling the industry right now.

Lo Toney was a VP at Cake Financial, a general manager with Zynga, and the CEO of an online coding startup before jumping into the world of venture capital, first at Comcast Ventures and later at GV where he spent several years as a partner.

If he was tempted to stay with Alphabet’s influential venture arm, he didn’t, instead turning his work at GV — which centered increasingly on finding and funding promising and diverse fund managers and startups — into the opportunity to create his own shop. Now, Plexo Capital not only counts Alphabet among its biggest financial backers, but it has amassed stakes in roughly two dozen funds and many more startups. With most of them run exclusively or in part by people of color, Toney has also become a leading light for others who recognize diversity as a competitive advantage.

Then there’s Renata Quintini, who has spent the last year quietly building a new outfit, Renegade Partners, with cofounder Roseanne Wincek. Wincek previously worked at the venture giant IVP. Quintini, similarly, has held a number of investing roles at esteemed institutions. Among them is the Stanford Management Company, where she was an investment manager focused on VC and private equity investments, and Felicis Ventures, where as a general partner she worked with a wide number of rising stars, including the satellite company Planet, the self-driving startup Cruise Automation (now owned by GM), Dollar Shave Club (which sold to Unilever), and Bonobos (snapped up by Walmart).

It wasn’t a surprise when Lux Capital poached Quintini, in fact. But even Lux, which prides itself on the kind of deep science expertise that Quintini shares, couldn’t keep her from leaving to create something all her own.

The story isn’t so dissimilar for Dayna Grayson, who studied systems engineering and worked in product design before jumping into the world of venture capital, first as a principal with the Boston-based firm Northbridge Venture Partners and afterward, as a partner with the venture giant NEA.

There, based in Washington, D.C., Grayson led a wide number of deals for the firm, including in the metal 3D printing company Desktop Metal —  a five-year-old company that, absent an unforeseen development, is soon to be a publicly traded and valued in the multiple billions of dollars.

Undoubtedly Grayson could have stayed longer. Instead, nearly eight years into her career with NEA, she left late last year to cofound the early-stage venture firm Construct Capital with Rachel Holt, one of Uber’s first employees.

There is so much to talk about with these entrepreneurial investors, from how they compete against the heavyweights, to how they think about startups in a post COVID world, to whether or not there VCs have begun to over-index on business-facing investments to their own detriment — or if, conversely that opportunity remains limitless right now. That’s saying nothing about SPACs, rolling funds, and the latest twist in direct listings.

You definitely won’t want to miss this very timely conversation about the state of VC.

Disrupt 2020 runs from September 14 through September 18 and will be 100% virtual this year. Get your front row seat to see Grayson, Quintini and Toney live with a Disrupt Digital Pro Pass or a Digital Startup Alley Exhibitor Package. We’re excited to see you there.

#construct-capital, #dayna-grayson, #disrupt, #gv, #lo-toney, #lux-capital, #nea, #plexo-capital, #renata-quintini, #startups, #tc, #venture-capital

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Coursera and Insitro founder Daphne Koller is coming to Disrupt 2020

Years after Daphne Koller left academia to pursue its reinvention with Coursera, circumstances have conspired to return her to a passion left by the wayside. Big data, machine learning and biology are suddenly in syzygy and Koller is intent on making the most of it with her new company, Insitro — and telling us all about it at Disrupt SF 2020.

Koller was working on applying machine learning techniques to biology as early as 2000 during her tenure at Stanford. But the concept was hardly the household word it is today; The ML techniques we’ve come to rely on in practically every domain were then quite primitive by comparison, yet to many a forward-thinking mind clearly a tool with immense promise.

Leaving in 2012 to join Andrew Ng in founding one of the original MOOC platforms, Coursera, Koller temporarily left behind the world of computational biology. Four years later, however, she left Coursera to head up computing efforts at Google’s health R&D arm, Calico. Her work here clearly inspired to go her own way in 2018 and — with the blessing of GV and others to the tune of $100M — found Insitro.

The cost of developing new drugs can reach into the billions, making it impractical for pharmaceutical companies to pursue them in cases where the population affected by the treated condition is not large enough. The cost of drug development must drop, and Koller joined others in believing that data was the key.

These pharmaceutical companies have amassed enormous databases from human testing of drug candidates and other processes, but have been unable to effectively leverage them. Insitro aims to change that.

“We’re now at a moment in history where a confluence of technologies emerged all at around the same time to allow really large and interesting and disease-relevant data sets to be produced in biology,” said Koller at a talk hosted by TechCrunch’s Connie Loizos last year.

“In parallel, we see on the machine learning side… technologies that are able to make sense of that data and come up with novel insights that can hopefully cure disease. We’re in the business of actually building data for the sole purpose of training machine learning models… what we think of as little crystal balls that would allow you to avoid doing experiments that are complex or even impossible.”

The resulting combination of “in vitro” (i.e. in the lab) and “in silico” (in computer) techniques they call insitro — not good latin, but nevertheless perhaps the new reigning paradigm in this field.

With a number of partnerships and studies ongoing and a staggering $143M Series B raised just this May, Insitro is going strong and Koller will no doubt have a lot to say about it at our all-online Disrupt SF 2020.

We hope you can join the event September 14-18. Get a front-row seat with your Digital Pro Pass for just $245 or with a Digital Startup Alley Exhibitor Package. Prices increase next week, so grab your tickets today!

#coursera, #daphne-koller, #disrupt, #disrupt-sf-2020, #insitro, #tc

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TechCrunch Disrupt 2020 is going virtual

The headline says it all. TechCrunch’s big yearly event, Disrupt, is going fully virtual in 2020. As you can imagine, this is largely due to the impact that the coronavirus has had on the world. But it also gives us a chance to make our event even more accessible to more people than ever before, and we’re incredibly excited about that. And Disrupt will stretch over five days — September 14-18 — in order to make it easier for everyone to take in all the amazing programming. 

This is a daunting and intense task for all of us, but we’re also insanely excited by the challenge. We know how to make great in-person events. Now, the rules are re-written and we get the chance to set that same high standard in the virtual events space.

This is a challenging time for the industry that we cover relentlessly. There are massive risks, and massive opportunities for companies, investors and entrepreneurs. That’s what this Disrupt will be all about, helping you to understand our new realities in order to build hardy, innovative companies that not only weather this storm, but flourish.

Some of the companies that were founded during the last financial crisis or in its aftermath include Uber, Slack, Pinterest, Airbnb, Square, Instagram and Stripe. We’ll look at lessons from those companies and founders, and talk to investors about what they’re looking for from the startups of the future.

Our job now is to build a stellar virtual experience for speakers, sponsors, attendees and, most importantly, the startups that depend on Disrupt. Just like at our physical events, you will be able to meet investors, bring your innovative products to market and connect with media. You will be able to check out hundreds of startups, listen to and interact with some of the most important people in the startup world and attend virtual networking events. You will be able to build new partnerships, talk about your programs and build awareness of what you’re making. 

One of the things we’re most excited about is that anyone from anywhere around the globe can join us in a virtual event. And, because of this, we expect this to be one of the largest and most diverse events in Disrupt history. 

Entrepreneurs from around the world have always gathered at Disrupt, but now the barriers to attend will be lower than ever. Great companies from San Francisco to Seoul can participate in the Startup Battlefield competition this year, making it more possible than ever for us to gather the most incredibly interesting companies together with no geographic or logistical restrictions.

When 2020 began, we didn’t expect to be taking on such a big project this year. But the truth is, we’re ready. As news of the true spread of the coronavirus broke, the TechCrunch team began taking action. We launched Extra Crunch Live, delivering virtual events with guests like Aileen Lee, Kirsten Green, Mark Cuban, Charles Hudson and Roelof Botha. We’re taking our learnings there and applying them to the programming of our two virtual stages at Disrupt. 

We launched the Disrupt Digital Pro Pass that offers live stream and video on demand access to all of the programming, great targeted networking opportunities, access to Startup Alley and access to our sponsors. We’ve launched virtual sponsorship options that will give our partners the opportunity to build their brand, deliver their content, network with interesting people and develop the critical relationships that will help their businesses thrive. 

Disrupt’s dates are coming up fast (September 14-18th, 2020) so register as soon as you can. 

Stepping off this ledge is one of the scariest and yet most thrilling things we’ve ever done at TechCrunch and we’re really glad that we have an audience that knows exactly how that feels. 

Thank you, and we’ll see you at the first-ever TechCrunch Disrupt online.

 

Joey Hinson

Director of Operations

 

Matthew Panzarino

Editor in Chief

#disrupt, #disrupt-global, #events, #tc, #tc-disrupt-sf-2020, #techcrunch, #techcrunch-disrupt, #virtual-events

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Everylwell gains first FDA authorization for a standalone at-home COVID-19 test sample collection kit

Everlywell was one of the first startups to announce that it was working on a self-administered, at-home COVID-19 diagnostic kit, but it initially sought out to ship kits before regulators made clear that this was not in line with its guidelines. Everlywell then became intent on working with the FDA to secure a proper Emergency Use Authorization for its kits before sending any to consumers, and that approach has paid off with the U.S. drug regulator issuing an EUA for Everywell’s tech today.

Everywell‘s COVID-19 Test Home Collection Kit is the first standalone sample collection kit to be granted a proper EUA by the FDA. Other kits have been in use through physician-prescribed and directed collection, and others still have been authorized specifically for use with one test (where provider of both kit and test are the same). This approval is unique because Everlywell is offering its sample kit independent of any specific testing lab, and can work with a variety of labs to potentially provide a broader testing footprint.

The test kits are then sent to one of two labs currently authorized under separate EUAs for COVID-19 testing, and the administration notes that this could expand to other test providers in future should they file for an EUA and provide the requisite data that goes along with the verification required for that emergency approval. The FDA cites Everlywell’s work in collecting and presenting data from studies including those supported by the Bill and Melinda Gates Foundation to show that samples collected at home using its nasal swab collection method remain stable during shipping.

That data is also now available to others looking to provide similar test kit offerings, the FDA notes, which should reduce the burden of proof on anyone looking to gain authorization for a competing product. That could potentially open up testing even further, reducing a bottleneck that many public health professionals see as one of the key drivers of a successful recovery.

“The authorization of a COVID-19 at-home collection kit that can be used with multiple tests at multiple labs not only provides increased patient access to tests, but also protects others from potential exposure,” said Jeffrey Shuren, M.D., J.D., director of the FDA’s Center for Devices and Radiological Health in a statement provided to TechCrunch . “Today’s action is also another great example of public-private partnerships in which data from a privately funded study was used by industry to support an EUA request, saving precious time as we continue our fight against this pandemic.”

#battlefield, #biotech, #coronavirus, #covid-19, #director, #disrupt, #everlywell, #fda, #food-and-drug-administration, #health, #tc, #techcrunch, #united-states

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