India’s CRED in talks to raise $200 million at $2 billion valuation

Bangalore’s fintech startup ecosystem is inching closer to delivering a new unicorn: CRED.

Two-year-old CRED is in advanced stages of talks to raise about $200 million at about $2 billion valuation, three sources familiar with the matter told TechCrunch. The new funding round, like this January’s Series C, will be largely financed by existing investors, the sources said, requesting anonymity as talks are private. The round is expected to close within a month, one of them said.

CRED, founded by Kunal Shah, has become one of the most talked-about startups in India, in part because of the pace at which its valuation has soared.

Backed by high-profile investors including DST Global, Sequoia Capital India, Tiger Global, Ribbit Capital, and General Catalyst, CRED was valued at $806 million when it closed its Series C round in January this year and $450 million in August 2019. (TechCrunch also scooped the Series C round of CRED.)

If the new deal goes through, CRED will be the fastest startup in the world’s second largest internet market to attain a $2 billion valuation. Prior to the upcoming Series D round, CRED had raised about $228 million.

Reached by TechCrunch early last week, CRED declined to comment. Sequoia Capital India didn’t immediately respond to a request for comment.

The Indian startup operates an eponymous app that rewards customers for paying their credit card bills on time and offers deals from online brands such as Starbucks, Nykaa, and Vahdam Teas. It had over 5.9 million customers as of January — or about 20% of the credit card holder population in the country.

The startup, unlike most others in India, doesn’t focus on the usual TAM of India — hundreds of millions of users of the world’s second most populated nation — and instead caters to some of the most premium audiences.

“India has 57 million credit cards (vs 830 million debit cards) [that] largely serves the high-end market. The credit card industry is largely concentrated with the top 4 banks (HDFC, SBI, ICICI and Axis) controlling about 70% of the total market. This space is extremely profitable for these banks – as evident from the SBI Cards IPO,” analysts at Bank of America wrote in a recent report to clients.

“Very few starts-ups like CRED are focusing on this high-end base and [have] taken a platform-based approach (acquire customers now and look for monetization later). Credit card in India remains an aspirational product. The under penetration would likely ensure continued strong growth in coming years. Overtime, the form-factor may evolve (i.e. move from plastic card to virtual card), but the inherent demand for credit is expected to grow,” they added.

Consumer segmentation and addressable market for fintech firms in India (BofA Research)

CRED says it is trying to help customers improve their financial behavior. An individual needs a credit score of at least 750 to join CRED. In a recent newsletter to customers, CRED said the median credit score of its customers was 830 and at “any given point in time” more than 375,000 individuals are on the app’s waiting list, many of whom have demonstrably improved their score to join CRED.

“It’s easy to be responsible when you’re empowered. 80% CRED Protect members got visibility on extra interest charges and avoided late payment fees by tracking their dues on CRED. Ignorance is not always bliss. CRED members detected additional charges worth over ₹145 Crores [$20.1 million] on their statements. CRED members avoided over ₹43.5 Crores [$6 million] worth of late payment fees,” it wrote in the newsletter.

“With the help of regular bill payment reminders, and a seamless credit card management experience; 160,000 CRED members improved their credit scores last month. CRED members know it pays to be good as they earned cash-back worth ₹12 Crores [$1.65 million] by paying their bills on time. There’s always something to look forward to on CRED. Our members got access to over 750 new rewards and products.”

The startup makes money by cross-selling financing products — for which it has a revenue-sharing arrangement with banks and other financial institutions — and levies a similar cut from merchants who are on the platform, Shah, who is also one of the most prolific angel investors in India, told TechCrunch in an interview in January this year.

#asia, #cred, #dst-global, #funding, #general-catalyst, #india, #kunal-shah, #payments, #ribbit-capital, #sequoia-capital-india, #tiger-global

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Professor Scott Galloway just raised $30 million for an online school that upskills managers fast

Scott Galloway, the New York University professor, author, and tech entrepreneur, is taking the wraps off a $30 million Series A round for his newest company, Section4, a platform for business “upskilling” that has now raised $37 million altogether.

The company is premised on the belief that millions of workers need help to stay competitive and employable, yet not all have access to, or interest in, costly graduate school programs. In fact, Section4 thinks more affordable “sprints” — or two- to three-long week courses taught by prominent professors from top schools that can also be mind expanding — is the way to go.

Whether that thesis proves out remains to be seen, but Section4 — whose new round was led by General Catalyst, with participation from Learn Capital and GSV Ventures — says early indications are good and that it already has 10,000 alums from dozens of countries.

We talked with Galloway yesterday about who, specifically, Section4 aims to serve, what percentage of its students is outside the U.S., and how universities feel about their professors participating in a startup that could eat into their own revenue. Excerpts from that chat follow, edited lightly for length.

TC: Why start this company?

SG: Graduate education was transformative in my life, and I enjoy teaching, and we thought there was an opportunity — because of the pandemic and changing behaviors — to start an online ed concept that tried to deliver 50% to 70% of the value of an elite MBA elective at 10% of the cost and 1% of the friction.

TC: Is this competition then for shorter executive MBA programs?

SG: I would say not even exec MBAs, because part-time MBAs  get a certification that is still incredibly valuable in the marketplace. And we don’t offer that. It’s somewhat competitive [instead] with executive education, the bring-50-people-from-Pfizer-in-for-two-days-and-charge-a-bunch-of-money-and- have-them-eat-lunch-together-on-campus-in-Palo Alto-and-throw-some-professors-at-them-for-some learning. I would argue that we’re competitive with that. It’s incredibly expensive, both financially but just trying to gather 40 or 50 executives.

Also, quite frankly, it’s a little bit exclusionary because a company like Verizon can only send 100 people to Wharton’s exec ed, and we’re hoping that we can run thousands of people from these companies through our programs.

TC: So these are companies that are your customers, not individuals seeking betterment for themselves.

SG: It’s both. The funnel is: organically people sign up. And the idea is that the course costs $700, $800 versus $7,000, which is what it costs to take an elective at an elite business school right now. So for example, 120 people have organically, individually signed up on their own who work at Google. Then our expectation is that over time, these companies will approach us and say, ‘We would like to buy a certain number of seats or a membership that covers 100 or 1,000 of our employees.’

TC: You say Section4 has already taught 10,000 students; when did you start offering your programming?

SG: In March of last year. Our first course had 300 people; the course I just wrapped up had 1,500, so it scales pretty well.

What’s different about it is our completion rates, which are 70%-plus. The curse of online ed is that completion rates are really low because video doesn’t capture people or create an intensity, and we try to be a mix of synchronous and asynchronous, so [there is] project work and teams, live streams with the professor, and live one-on-one sessions with a TA. It’s meant to hold people accountable and engage them.

TC: You’re promising students access to top professors like yourself. How do the schools for which they teach feel about this? They’re perhaps helping build the brand of the school, but are there also competitive concerns?

SG: For some yes, for some no. Some universities have asked their faculty to take a pause and not engage in any type of relationship like this, but some universities embrace it. Several students who have taken our course have sent us messages saying they are now going to apply to a full-time MBA program because they see the value and they want the certification. So I’m not sure it’s purely complimentary, but it’s also not purely competitive.

TC: What is your economic relationship with these professors?

SG: I’m not going to disclose the exact economic agreement. What I will say is that we see attracting these superstars and retaining them as key to our value proposition. And so our aim is that this is the greatest compensation per podium hour that they’re going to receive. If you have a course with 800 people, and they’re each paying $800, that’s $640,000. As you can imagine, there is a lot of gross margin capital that can be deployed or can be paid to the professor.

TC: Are most of the students gravitating to this platform coming from inside or outside of the tech industry?

SG: Fifty of the Fortune 100 [companies] have people who’ve taken our class so far, and it’s all walks. It’s pharma, it’s big AG, it’s big tech, it’s big oil. I would say we probably overindex in tech because these organizations are generous in terms of giving employees tuition remission, and I think, to a certain extent, my brand is bigger in the tech community and initially, that was kind of the awareness we had.

The other big cohort is middle-market companies, 10- to 500-people companies where a director there either didn’t have the opportunity or the inclination to go back to business school, but still would like a taste of supply chain from an MIT professor.

TC: What percentage of your students are outside the U.S.?

SG: I think it’s about 30% international. We have every continent covered.

We also try to reserve at least 10% of our class for scholarships. We have a rigorous scholarship process, where you send us an email saying you can’t afford it, and you get a scholarship. And a lot of our scholarships go to people internationally, because $800 in Rwanda is real money.

#education, #fundings-exits, #general-catalyst, #recent-funding, #scott-galloway, #startups, #tc, #venture-capital

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LatAm corporate spend-management startup Clara raises $3.5M, comes out of stealth

This morning Clara, a corporate spend-management startup focused on the Latin American market, announced its product launch and a $3.5 million pre-seed round led by General Catalyst.

The company’s funding caught TechCrunch’s eye as there has been a flurry of funding for related companies serving the United States market. From Divvy to Brex to Ramp to Airbase to Teampay, investors have poured capital into startups working to help companies better track and manage their spend.

Companies working in the fintech niche tend to monetize in one of two ways, namely interchange revenues and software incomes. Or more simply, some in the corporate spend category generate revenues when users swipe cards, earning a slice of the transaction. And some also charge for the software that they have wrapped around their cards and other methods of payment.

Clara is in the first camp, making its revenues today from interchange incomes, according to Gerry Giacomán Colyer and Diego Iván García Escobedo, the company’s co-founders. Colyer is the company’s CEO, while García Escobedo heads its product and tech work.

The pair told TechCrunch that the Mexican interchange market is more akin to the United States’ own (lucrative) than Europe’s own (less lucrative), meaning that if the company can sign up a host of customers for its free service — empieza hoy – sin costo, its website intones — it could post the same sort of revenue growth that has spurred some of its American comps to huge venture capital raises.

The startup’s potential has caught the eye of more than General Catalyst, a well-known venture capital firm. The two co-founders of Ramp are also investors in Clara. The startup’s round also included funds from a host of smaller firms and angels, including Canary Ventures, Adapt Ventures and Picus Capital, among others.

The co-founders want to bridge the gap in technology-enabled financial services that they found in Mexico. Colyer worked for G2 after a stint at Stanford, eventually moving back to Mexico and working on a micromobility startup called Uva Scooters. He discovered during the process that Mexican and other Latin American firms lacked some digital tools, like low- and zero-cost corporate spend software, to which American companies had ample access.

So, the pair of founders, who met at Grin Scooters, which had acquired Uva, set out to build Clara, tuning a model with proven success in America to work in Mexico. What sort of tweaking was needed? Local compliance to ensure high-levels of card acceptance, support for local tax law and receipt management, the pair said.

Thus far the company has only worked with around 100 customers, with the co-founders telling TechCrunch they have seen traction with high-growth companies, some of which are startups. That echoes what Brex tapped into when it was a more youthful upstart itself.

Today the company operates in Mexico only, but intends to support other markets over time.

Regarding the company’s $3.5 million raise, like many pre-seed and seed deals, the funds were acquired in a few tranches, including one in May of 2020. The rest of the capital came later in the year.

Seeing successful startup models that are familiar in the United States pop up in Latin America is a regular trend. Belvo, for example, is following in the tracks that Plaid laid down, bringing fintech APIs to the LatAm market. Given rising smartphone penetration, and rising card usage, perhaps Clara will find a good fit in its home market.

Looking ahead, TechCrunch is curious how quickly Clara can accrete new customer companies now that it has formally launched. If it can, and the interchange game proves successful, expect to hear from it again soon.

#clara, #fintech-startup, #general-catalyst, #latam, #recent-funding, #startups

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MobileCoin, a cryptocurrency involving Signal founder Moxie Marlinspike, just raised venture funding

MobileCoin, a cryptocurrency that has received technical guidance from Moxie Marlinspike, the creator of private messaging app Signal, has raised $11.35 million in fresh venture funding across two rounds from Future Ventures and General Catalyst.

The round, shared with us by a source familiar with the company, seems to suggest the cryptocurrency is one step closer to its possible use on the Signal platform, where it does not appear to be available currently.

We were unable to reach Marlinspike today. MobileCoin founder Joshua Goldbard, who lists himself as “janitor” of MobileCoin on LinkedIn, declined to answer questions this afternoon after being reached on Signal. Investors pointed us back to the company when asked about how MobileCoin compares to other crypto-related outfits.

It was back in 2017 that Wired first profiled MobileCoin, describing it as on a mission to overcome many of the early, and in some cases, lingering, challenges with cryptocurrencies, including that they’re too complicated for most people and merchants to use, they aren’t adequately scalable and transaction times take too long.

For example, Dapper Labs, the company behind the ventures CryptoKitties and NBA Top Shot, developed its own blockchain and “Flow” token last year owing to scalability issues it encountered with Ethereum, as well as its interest in developing a platform that was more “consumer oriented.”

At the time, Wired added that while it “may feel like the last thing the world needs is yet another cryptocurrency” — there are now more than 4,000 of them in digital circulation currently —  Marlinspike’s track record with Signal “makes this a project worth watching.”

Based on its website, MobileCoin’s ambition appears to be focused around privacy-protecting payments made through “near instantaneous transactions” over one’s phone, even while the risks involved in storing cryptocurrency on a phone include potentially losing that value if the phone is left unlocked or the radio on the phone is hacked or if, say, iOS itself is hacked. (It happens, despite the robust permissions system that iOS uses to grant apps access to particular services and information.)

According to the site, one feature of MobileCoin is that it allows users to “securely recover” their wallet if they lose their phone, though without trusting a provider with private keys — which MobileCoin says isn’t necessary — it isn’t immediately clear how. (More on this soon, presumably.)

If MobileCoin becomes a de facto way to transact over Signal — Goldbard and Marlinspike told Wired they envisioned it first as an integration in chat apps like Signal or WhatsApp — its reach could potentially be massive.

Though Signal doesn’t disclose how many users are on the platform, an estimated 40 million people now use its encrypted messaging app, which saw a surge in downloads earlier this year, in the waning days of the Trump presidency. According to Sensor Tower, which provides mobile app analytics, Signal was downloaded 17.8 million times during the week of January 5, compared to the 50,000 downloads per day it typically sees.

Still, if heavy use over Signal is how MobileCoin aims to gain value, the currency — which became available to purchase on the exchange FTX after launching on the platform in early December — would seemingly have an upward battle.

While Marlinspike’s early involvement is a definite plus, cryptocurrencies and messaging apps haven’t historically mixed well together, owing to regulators. Kik Messenger, the mobile messaging app founded by a group of University of Waterloo students in 2009, created a digital currency called Kin for its users to spend inside the platform that ultimately led to a years-long battle with the Securities & Exchange Commission that nearly decimated the company, though it’s currently mounting a comeback.

(In fairness to MobileCoin, which has turned to venture capitalists, Kik tried raising money from Kin through an initial coin offering or ICO, a relatively untested and unregulated type of funding mechanism at the time.)

Telegram, a much bigger messaging app than Signal in terms of users (it had an estimated 400 million users as of last April), similarly abandoned plans to offer its own decentralized cryptocurrency to anyone with a smartphone after years of battling with the SEC. Like Kik, part of Telegram’s drama dated to early sales of its tokens through ICOs.

Even Facebook, despite scaling back more ambitious plans around a new cryptocurrency and resolving instead to launch a single digital coin backed by the dollar, hasn’t launched anything yet, though it’s expected soon.

Possibly, MobileCoin simply plans to operate outside of the U.S. Indeed, in December, according to a public post on Medium, the MobileCoin Foundation wrote that the project is not available to U.S. users or “persons or entities in other prohibited jurisdictions.”

The new round is not, notably, MobileCoin’s first outside round. In May 2018, it disclosed in an SEC filing that it had raised a $29.7 million round. Reportedly, Binance Labs, the venture arm of the cryptocurrency exchange giant Binance, led that financing.

#blockchain, #cryptocurrency, #facebook, #ftx, #future-ventures, #general-catalyst, #kik, #libra, #mobilecoin, #moxie-marlinspike, #tc, #telegram

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Hopin confirms $400M raise at $5.65B valuation

This morning Hopin, a virtual events platform and video-focused software service, announced that it has closed a $400 million Series C. The new capital values Hopin at $5.65 billion. Both numbers match prior TechCrunch reporting that the company was targeting a $400 million raise at a valuation of between $5 billion and $6 billion.

Andreessen Horowitz (a16z) and General Catalyst (GC) co-led the round, as TechCrunch reported was likely. Prior investor IVP also took part in the round.

For Hopin, the round is another rapid-fire funding event in a string of such transactions. The company has seen scorching revenue growth in recent quarters, reaching $70 million ARR today, its CEO and founder Johnny Boufarhat told TechCrunch in an interview.

As part of the transaction, recent a16z hire Sriram Krishnan will join Hopin’s board. According to Boufarhat, Hopin had hoped to hire Krishnan before he took his job at the venture firm.

Hopin has scaled rapidly from its now-dated $20 million ARR milestone that it announced in Q4 2020. But not all of that growth has been organic. Hopin recently bought StreamYard, a company that brought $27 million worth of ARR to the combined entity. Hopin spent $250 million on that deal, a transaction that was announced in January of this year.

The company has raised $565 million since February of 2020, it said in an email.

According to Boufarhat, Hopin intends to invest heavily in its product and engineering functions. The CEO stressed during a call that he intends to keep his company’s product spend high as a percentage of revenue; TechCrunch’s read of the sentiment is that Hopin has no intention of letting other companies carve into its core market while it solidifies its virtual event service and adds other capabilities.

The StreamYard deal may provide some guidance as to where Hopin is headed. The acquisition brought to Hopin a company that was already in use by some of its own users, but also added a business line to its collection not wholly component to the event work for which Hopin is best-known. Boufarhat told TechCrunch that his company is open to making more acquisitions.

Perhaps we’ll see Hopin extend its reach to other products that fit into its video-first perspective. It certainly has the capital and equity value to buy a plethora of smaller companies.

At $70 million ARR, Hopin is worth around 81x its current annual recurring revenue. When the company last raised, a $125 million round in November of 2020, the company had $20 million in ARR and a valuation of $2.125 billion valuation. At the time the company was worth a little over 106x its ARR. In light of the company’s recent growth, investors in that round now paid a far-smaller 30.4x ARR multiple, contrasting the company’s new revenue mark and its now-dated valuation.

Provided that Hopin can continue its rapid growth, its current ARR multiple could appear closer to norms in a few quarters.

Closing, Hopin does not appear ready to answer the siren-song of the SPAC. Boufarhat told TechCrunch that he receives regular outreach from SPACs, something we’ve heard from a number of late-stage technology CEOs. Hopin’s founder, however, noted that great companies can go public regardless of the market, and that his company intends on being operationally IPO-ready next year. It appears that a more traditional IPO for Hopin could be in the cards for 2022 or 2023.

#a16z, #fundings-exits, #general-catalyst, #hopin, #recent-funding, #startups, #streamyard, #tc, #virtual-events

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Ex-General Catalyst and General Atlantic VC announces $68M debut fund

As of 2019, the majority of venture firms — 65% — still did not have a single female partner or GP at their firm, according to All Raise.

So naturally, anytime we hear of a new female-led fund, our ears perk up.

Today, New York-based Avid Ventures announced the launch of its $68 million debut venture capital fund. Addie Lerner — who was previously an investor with General Catalyst, General Atlantic and Goldman Sachs — founded Avid in 2020 with the goal of taking a hands-on approach to working with founders of early-stage startups in the United States, Europe and Israel.

“We believe investing in a founder’s company is a privilege to be earned,” she said.

Tali Vogelstein — a former investor at Bessemer Venture Partners — joined the firm as a founding investor soon after its launch and the pair were able to raise the capital in 10 months’ time during the 2020 pandemic.

The newly formed firm has an impressive list of LPs backing its debut effort. Schusterman Family Investments and the George Kaiser Family Foundation are its anchor LPs. Institutional investors include Foundry Group, General Catalyst, 14W, Slow Ventures and LocalGlobe/Latitude through its Basecamp initiative that backs emerging managers. 

Avid also has the support of 50 founders, entrepreneurs and investors as LPs — 40% of whom are female — including Mirror founder Brynn Putnam; Getty Images co-founder Jonathan Klein; founding partner of Acrew Capital Theresia Gouw and others.

Avid invests at the Series A and B stages, and so far has invested in Alloy, Nova Credit, Rapyd, Staircase, Nava and The Wing. Three of those companies have female founders — something Lerner said happened “quite naturally.”

“Diversity can happen and should happen more organically as opposed to quotas or mandates,” she added.

In making those deals, Avid partnered with top-tier firms such as Kleiner Perkins, Canapi Ventures, Zigg Capital and Thrive Capital. In general, Avid intentionally does not lead its first investments in startups, with its first checks typically being in the $500,000 to $1 million range. It preserves most of its capital for follow-on investments.

“We like to position ourselves to earn the right to write a bigger check in a future round,” Lerner told TechCrunch. 

In the case of Rapyd, Avid organized an SPV (special-purpose vehicle) to invest in the unicorn’s recent Series D. Lerner had previously backed the company’s Series B round while at General Catalyst and remains a board observer.

Prior to founding Avid, Lerner had helped deploy more than $450 million across 18 investments in software, fintech (Rapyd & Monzo) and consumer internet companies spanning North America, Europe and Israel. 

When it comes to sectors, Avid is particularly focused on backing early-stage fintech, consumer internet and software companies. The firm intends to invest in about 20 startups over a three-to-four year period.

“We want to take our time, so we can be as hands-on as we want to be,” Lerner said. “We’re not looking to back 80 companies. Our goal is to drive outstanding returns for our LPs.”

The firm views itself as an extension of its portfolio companies’ teams, serving as their “Outsourced Strategic CFO.” Lerner and Vogelstein also aim to provide the companies they work with strategic growth modeling, unit economics analysis, talent recruiting, customer introductions and business development support.

“We strive to build deep relationships early on and to prove our value well ahead of a prospective investment,” Lerner said. Avid takes its team’s prior data-driven experience to employ “a metrics-driven approach” so that a startup can “deeply understand” their unit economics. It also “gets in the trenches” alongside founders to help grow a company.

Ed Zimmerman, chair of Lowenstein Sandler LLP’s tech group in New York and adjunct professor of VC at Columbia Business School, is an Avid investor.

He told TechCrunch that because of his role in the venture community, he is often counsel to a company or fund and will run into former students in deals. Feedback from numerous people in his network point to Lerner being “extraordinarily thoughtful about deals,” with one entrepreneur describing her as “one of the smartest people she has met in a decade-plus in venture.”

“I’ve seen it myself in deals and then I’ve seen founders turn down very well branded funds to work with Addie,” Zimmerman added, noting they are impressed both by her intellect and integrity. “…Addie will find and win and be invited into great deals because she makes an indelible impression on the people who’ve worked with her and the data is remarkably consistent.”

#acrew-capital, #addie-lerner, #basecamp, #bessemer-venture-partners, #brynn-putnam, #canapi-ventures, #catalyst, #consumer-internet, #corporate-finance, #diversity, #finance, #foundry-group, #funding, #general-atlantic, #general-catalyst, #george-kaiser-family-foundation, #goldman-sachs, #israel, #jonathan-klein, #kleiner-perkins, #new-york, #north-america, #slow-ventures, #software, #tali-vogelstein, #tc, #tech, #techcrunch-include, #theresia-gouw, #thrive-capital, #united-states, #venture-capital

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Titan nabs $12.5M for ‘next generation’ investment management

Titan, a startup that is building a retail investment management platform aimed at millennials, has closed on $12.5 million in a Series A round led by VC heavyweight General Catalyst.

A bevy of other investors put money in the round, including Sound Ventures (actor Ashton Kutcher and Guy Oseary’s VC firm), Scribble VC, Y Combinator, South Park Commons, Instagram founder Mike Krieger, Lee Fixel and others. 

Titan is hoping to build on the momentum it saw in 2020, during which it grew revenue, customers and assets under management by 600%, “with effectively no marketing budget, according to co-founder Joe Percoco. The New York-based company says it’s approaching $500 million in assets under management and was cash flow positive last year.

Percoco met co-CEO Clay Gardner while the pair were at the Wharton School of the University of Pennsylvania.

“We came from two different backgrounds with respect to investing,” Percoco recalled. “He was the type that bought his first shares of stock at the ages of 11 and 12. I’m the exact opposite and couldn’t invest myself until after Goldman Sachs, where I went to work after Penn.”

Because the duo both worked in the industry, they found that friends and family were always asking them how they should manage their capital.

“We were sending them to ETFs and mutual funds in our day jobs,” Percoco said. “But we realized they did not have the same access to investing that the wealthier did.”

Frustrated with only helping the rich get richer, the pair founded Titan in 2017 with the goal of disrupting what they viewed as “an archaic industry. They’ve since built an operating system aimed at giving “everyday investors access to the types of investment products and experiences that they’ve historically been locked out of.” Or, as they describe, it a mobile version of what investment giants Fidelity and BlackRock created decades ago.

Titan’s capital management platform is designed for both accredited and unaccredited investors. The company says it provides access to services that would historically require a $1 million minimum, such as direct portfolio manager access. It charges a fee amounting to just 1% of assets, compared to the 2% – and in some cases 20% of profits – that legacy players charge.

“We believe Fidelity 2.0 will be direct-to-consumer with no walls and no black boxes,” Percoco said.

(For the unacquainted, according to Investopedia, black box accounting is the deliberate use of complex bookkeeping methodologies to make interpreting financial statements challenging and time-consuming.)

Its simplicity sets it apart. As TechCrunch previously reported, Titan’s app “chooses the best stocks by scraping top hedge fund data, adds some shorts based on your personal risk profile and puts your money to work. No worrying about market fluctuations or constantly rebalancing your portfolio. You don’t have to do anything, but can get smarter about stocks thanks to its in-app explanations and research reports.”

The startup currently offers two stock-focused strategies on its platform,

One of those strategies, called Flagship, is focused on large cap growth. The other, called Opportunities, focuses on smaller, under-the-radar companies.

All clients have direct access to its investment team and investor relations via Titan’s mobile operating system. The company also offers instant deposits, personal digital vaults (or separately managed accounts), fractional share-trading, and no lock-ups.

Titan’s core customer is the young professional in the 25-35 age range. 

“They’re already investing money somewhere, even if not that much of their money,” Gardner said. “But they’re well attuned to the reasons they should be… And, most asset management products remain in the Stone Age, offering 90-page prospectuses and black-box client experiences.”

As former TC editor Josh Constine explained when the company raised a $2.5 million seed round in October 2018, Titan differs from Robinhood or E*Trade, where users essentially are left to fend for themselves. But clients also have some control, unlike passive options such as Wealthfront and Betterment.

Looking ahead, Titan plans to use its new capital to scale its engineering and investment team, as well as make “significant investments” in product, marketing and operations. It also plans to launch several investment products across a variety of asset classes.  

“Many legacy players are hungry to have an OS to serve more folks they historically could not,” Percoco said. “We’re getting inbounds from legacy players in the space seeking to manage capital for new generations and realizing it will shift to mobile operating systems like Titan’s. Eventually, we can enable them to build their own investment products on Titan.” 

Katherine Boyle, partner at General Catalyst and Titan board member, said she was struck by Percoco and Gardner’s “deep empathy” for investors who are often overlooked — such as millennials and new investors “who have cash sitting in their checking accounts and want expert management but don’t know where to go.”

“They don’t want to be stock pickers but they don’t want a set-it-and-forget-it product,” Boyle said. “There’s another level of sophistication with actively managed products where the best managers are making investment decisions on behalf of those who can afford it. But there’s no reason why retail investors should be excluded from this model.”

She thinks Titan can capitalize on what she believes is millennials’ “deep lack of trust” in legacy institutions.

“We need new institutions like Titan to combat this lack of trust,” Boyle said. “And these new institutions need to have incentives that are aligned with their clients, not with hedge funds or banks.”

#ashton-kutcher, #finance, #funding, #general-catalyst, #katherine-boyle, #lee-fixel, #mike-krieger, #millennials, #new-york, #operating-system, #recent-funding, #sound-ventures, #startups, #titan, #y-combinator

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Literati raises $40M for its book club platform

Literati has raised a $40 million Series B to pursue an unusual startup opportunity — namely, book clubs.

Founder and CEO Jessica Ewing (a former product manager at Google) explained that the Austin-based company started out with book clubs for kids, before launching its Luminary brand for adult book clubs last year. And the Luminary clubs live up to the name — they’re curated by notable figures such as activist and Nobel laureate Malala Yousafzai, NBA star Stephen Curry, entrepreneur and philanthropist Sir Richard Branson, journalist Susan Orlean and the Joseph Campbell Foudnation.

When you sign up for a Literati book club, you receive a print edition of each month’s selection with a note from the curator. You also get access to the Literati app, where you can discuss the book with other readers, and where curators host author conversations. For example, Curry is leading a book club focused on nonfiction about people who “transcend expectations” (he invested in Literati as well), while Yousafzai chooses books by women “with bold ideas from around the world.”

Ewing told me that she’s trying to build the first “new, innovative bookseller” since Amazon launched 25 years ago. And she’s doing that by focusing on curation.

“There’s too much choice, too many lists, it’s completely overwhelming for most people,” she said. And she argued that it helps to enlist celebrities and other big names to do the curation: “Books are aspirational. No one aspires to play more video games, people aspire to read more … People want their books to be recommended by someone a little bit smarter than they are.”

Stephen Curry book club

Image Credits: Literati

Ewing’s hope for Literati is to create “the next great literary social network,” bridging the gap between celebrity-driven lists like Oprah’s Book Club and Reese’s Book Club and what she described as “the wine-and-cheese, super intimate model.”

I would love to see in-person meetups once we’re out of the COVID environment,” she added. “But I also think there’s everything in between. We’re enabling threaded discussions [in the app] right now, and it’s cool to have asynchronous conversations about the books.”

And on the children’s book side, Literati is also working building personalization tools designed to recommend the best books for each child.

“To me, this is one of the most exciting applications: How do we make this generation of kids love reading by pairing them with the right books?” Ewing said.

Literati previously raised $12 million in funding from Shasta Ventures and others, according to Crunchbase. The new round was led by Aydin Senkut of Felicis Ventures, with participation from Dick Costolo and Adam Bain of 01 Advisors, Founders Fund, General Catalyst, Shasta, Silverton Partners, Springdale Ventures and — as previously mentioned — Stephen Curry.

“I wanted to start my own book club with Literati, because their mission to better the world through reading naturally aligns with my values as an entrepreneur and father,” Curry said in a statement. “I was a fan before I was an investor, and am so proud to be a part of a company that works to better the lives of others, one book at a time.”

#adam-bain, #aydin-senkut, #dick-costolo, #felicis-ventures, #founders-fund, #general-catalyst, #literati, #malala-yousafzai, #richard-branson, #shasta-ventures, #silverton-partners, #stephen-curry, #tc

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Club Feast raises $3.5M to help restaurants deliver meals that only cost $5.99

Club Feast, a startup with a more affordable approach to meal delivery, is announcing that it has raised $3.5 million in seed funding led by General Catalyst.

The company was founded by Atallah Atallah, Gazi Atallah and Chris Miao. The basic concept is pretty simple: Restaurant delivery that only costs $5.99 per dish — cheaper that almost anything you’d find on other delivery services. (The startup also charges diners a $2 delivery fee, as well as a $1 fee for single meal orders.)

Atallah Atallah, who previously co-founded restaurant rewards company Seated and serves as Club Feast’s CEO, said the startup works with restaurants to select a few meals that they can afford to offer at the $5.99 price. Diners, meanwhile, sign up for a weekly meal plan and place their orders at least 24 hours ahead of time. The restaurant then knows exactly how much of a dish will be purchased, so they can plan ahead and cook in an efficient and economical way.

“We really work with them to create a meal that they can make at a price that works for their users,” Atallah said. Plus, he noted that with all the orders placed ahead of time, Club Feast and its partners can plan efficient delivery routes without having to build sophisticated algorithms for optimizing on-demand deliveries: “Sometimes the best solutions are the simplest ones.”

Club Feast CEO Atallah Atallah

Club Feast CEO Atallah Atallah

Of course, that requires more planning and upfront commitment from diners. However, Atallah noted that while meal credits are bought via weekly subscription, they can be paused or spent at any time. He also suggested that he doesn’t see Club Feast as a direct competitor to on-demand food delivery — instead, he suggested that he continues to use DoorDash and Uber Eats for spur-of-the-moment orders or special occasions, while Club Feast is a more affordable option for regular meals.

“With our price point, our average user orders eight times a month,” he said. “Why not make the pie much bigger?”

Atallah added that Club Feast is diversifying the food options on the platform by adding side dishes and desserts. And it could eventually introduce higher prices for fancier meals, but he said, “We want to make sure that does not affect the $5.99 concept.”

The startup currently makes deliveries in San Francisco and San Mateo, where it works with restaurants including The Halal Guys, Kasa Indian Eatery, HRD and Kitava. With the new funding, it plans to expand throughout the Bay Area and into New York City.

“The pandemic exposed significant gaps in the food delivery industry, and we’re proud to support Club Feast on their mission to make the experience more affordable for both restaurants and consumers,” said General Catalyst Managing Director Niko Bonatsos in a statement.

#food, #food-delivery, #funding, #fundings-exits, #general-catalyst, #meal, #niko-bonatsos, #seated, #startups

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Color raises $167 million funding at $1.5 billion valuation to expand ‘last mile’ of U.S. health infrastructure

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

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

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

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

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

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

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

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

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

#amazon, #biotech, #business, #companies, #customer-experience, #economy, #funding, #general-catalyst, #health, #healthcare, #healthcare-industry, #online-sales, #optimizely, #othman-laraki, #recent-funding, #san-francisco, #startups, #stripe, #t-rowe-price, #tc, #uber, #united-states, #viking-global-investors

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Brainly raises $80M as its platform for crowdsourced homework help balloons to 350M users

The Covid-19 pandemic has led to a major upswing in virtual learning — where some schools have gone (and stayed) remote, and others have incorporated significantly stronger online components, in order to help communities maintain more social distancing. That has in turn led to a surge in the usage of tools to help home learners do their work better, and today, one of them is announcing a growth round that speaks to the opportunity in that market.

Brainly, a startup from Poland that has built a popular network for students and their parents to engage with each other for advice and help with homework questions, has raised $80 million, a series D that it will be using both to continue building out the tools that it offers to students as well as to hone in on expansion in some key emerging markets such as Indonesia and Brazil. The news comes on the heels of dramatic growth for the company, which has seen its user base grow from 150 million users in 2019 to 350 million today.

The funding is being led by previous backer Learn Capital, with past investors Prosus Ventures, Runa Capital, MantaRay, and General Catalyst Partners also participating. The company has now raised some $150 million and while it’s not disclosing valuation, CEO and co-founder Michał Borkowski confirmed it is “definitely” an upround for the company. For more context, Pitchbook estimates that the company was valued at $180 million in its last round, a Series C of $30 million in 2019.

That C round was raised specifically to help Brainly grow in the U.S. It currently has some 30 million users in that market, and it happens to be the only one in which Brainly is monetising users. Everywhere else, Brainly is currently free to use. (In the U.S. there are also some formidable competitors, like Chegg, which has strong traction in the market of helping students with homework.)

“Brainly has become one of the world’s largest learning communities, achieving significant organic growth in over 35 countries,” said Vinit Sukhija, Partner at Learn Capital, in a statement.

Even before the Covid-19 pandemic, Brainly was finding an audience with students — primarily those aged 13-19, said Borkowski — who were turning to the service to connect with people who could help them with homework when they found themselves at an impasse with, say, a math problem or getting to grips with the sequence of events that led to the revolutions of 1848. The platform is open-ended and is a little like a Quora for homework, in that people can find and answer questions they are interested in, as well as ask questions themselves.

That platform, however, took on a whole new dimension of importance with the shift to virtual learning, Borkowski said.

“In the western world, online education wasn’t a big investment area [pre-Covid] and that has changed a lot, with huge adoption by students, parents and teachers,” he said. “But that big transition, switching from offline to online, has left kids struggling because teachers have so much more to do, so they can’t engage in the same way.”

So with “homework” becoming “all work”, that has effectively led to needing more help than ever with home studies. And while many parents have tried to get more involved to make up the difference, “having parents as teachers has been hard,” he added. They may have been taught differently from how their kids are learning, or they don’t remember or know answers.

One thing that Brainly started to see, he said, was that with the pandemic more parents started using the app alongside students, either to work out answers together or to get the help themselves before helping their kids, with a number of these being from parents of kids younger than 13. He said that 15-20% of all new registrations currently are coming from parents.

Brainly up to now has been mainly focused on how to build out more tools for the students — and now parents — that use it, and has so far been about organic growth for those communities.

However, there is clearly scope to expand that to more educational stakeholders to better organise what kind of questions are answered and how. Borkowski said that the company has indeed been approached by educators, those building curriculums and others so that answers might tie in better with the kinds of questions that they are most likely to ask of students, although for now the company “wants to keep the focus on students and parents getting stuck.”

In terms of future products, Brainly is looking at ways of bringing in more tutoring, video and AI into the mix. The AI aspect is very interesting and will in fact tie in to wider curriculum coverage based on more localised needs. For example, if you ask for help with a particular kind of quadratic equation technique, you can then be served lots of same practice questions to help better learn and apply what you’ve just been learning, and you might even then get suggested related topics that will appear alongside that in a wider mathematics examination. And, you might be offered the chance to meet with a tutor for further help.

Tutoring, he said, is something that Brainly has already been quietly piloting and has run some 150,000 sessions to date. Having such a large user base, Borkowski said, helps the startup run services at scale while still effectively keeping them in test mode.

“It will be about looking at what students are studying and how to map that to the curriculum in the country, and what we can do to help with that.” Borkowski said. “But it will require a heavy lift and and machine learning to pinpoint students” for it to work properly, which is one reason it has yet to roll it out more comprehensively, he added.

Tutoring and more personalization are not the only areas where Brainly is actively testing out new services. The company is also creating more space for adding in video to demonstrate different techniques (which I suspect is especially good for something like mathematics, but equally helpful for, say, an art technique).

There are “thousands per week” being added already, but as with tutoring “that, for us, is a testing stage,” added Borkowski. There should be more coming in Q1 about new products, he said.

#articles, #artificial-intelligence, #brainly, #brazil, #e-commerce, #education, #europe, #funding, #gamification, #general-catalyst, #general-catalyst-partners, #homework, #indonesia, #machine-learning, #online-education, #poland, #prosus-ventures, #quora, #runa-capital, #subscription-services, #tc, #united-states

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Bicycle Health, the virtual opioid use disorder therapy service, will soon be available in 25 states

The startup opioid use disorder therapy service Bicycle Health will soon be available to patients in half the country, just three years after its launch in 2017, according to founder Ankit Gupta.

A serial entrepreneur whose last company, Pulse News, was acquired by LinkedIn back in 2013, Gupta left the LinkedIn in 2016 (around the time of the Microsoft acquisition) to pursue something more meaningful. He settled on trying to find a better way to address the opioid addiction epidemic, which was responsible for more than 42,000 deaths the year he left LinkedIn.

By 2018 deaths from overdoses would exceed 47,000, according to data from the US Department of Health and Human Services.

And the problem isn’t going away. Bicycle Health’s statistics indicate that 92 million Americans are potentially at risk for developing opioid use disorder and 2 million Americans are already diagnosed as opioid addicts.

Initially, the company worked out of a clinic in Redwood City, Calif., but as the COVID-19 pandemic took hold in the US earlier this year and forced treatment facilities to undertake preventative measures to stop the spread of the disease, Bicycle Health began adopting virtual treatment methods.

Under new regulations delivered by HHS, many therapies and drug treatments that had only been available in-person were able to be distributed remotely. The change caused an explosion in remote care services and companies like Bicycle Health rushed to capitalize.

The company is currently offering treatment options in 18 states and is on track to be available in 25 states by the end of the first quarter of 2021.

Backing that growth are a slew of individual and institutional investors led by the venture investment firm, Signalfire, which led Bicycle Health’s seed round. In all, the company has raised roughly $5.5 million from investors including Signalfire, Hustle Fund, Romulus Capital, and individual investors like Jeff Weiner, the former chief executive of LinkedIn; Sami Inkinen, the founder of Virta Health; Rushika Fernandopulle, the founder of Iora Health; and John Simon, the co-founder of General Catalyst through his Greenlight Fund.

Bicycle Health both prescribes buprenorphine as a medical treatment and offers a team of health coaches to address the behavioral and mental health issues attendant with detoxifying.

There are three health coaches on staff to manage the care of the company’s current roster of 2,000 patients and those coaches are bolstered by 12 clinical support specialists, Gupta said.

Treatment is delivered and managed through the company’s mobile app, and is supplemented by regular in-home diagnostic testing to monitor a patient’s progress, according to Gupta.

Working with Goodrx, the company has been able to drive down over-the-counter costs for patients who don’t have healthcare, and Gupta said that Bicycle Health would be working with local and national healthcare providers to try and defray as much of the costs as the company can. 

“We want to subsidize the costs as much as possible for our patient,” he said.  

The goal, Gupta said in an interview with TechCrunch earlier this year is “making sure that this industry is making sure that they’re helping people make a change instead of keeping them stuck.”

And although Gupta comes from a software industry whose guiding principle has been to move fast and break things, he realizes that healthcare doesn’t work that way. “Move fast and break things is the wrong mindset for healthcare,” he said. “You have to build a safe space … and i don’t mean a safe space legally but a safe space where patients can be served.”

#california, #co-founder, #disease, #drugs, #founder, #general-catalyst, #goodrx, #healthcare, #hustle-fund, #iora-health, #jeff-weiner, #linkedin, #microsoft, #opioids, #pulse-news, #redwood-city, #romulus-capital, #sami-inkinen, #serial-entrepreneur, #signalfire, #tc, #united-states, #virta-health

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General Catalyst’s Katherine Boyle and Peter Boyce are looking for ‘obsessive’ founders

General Catalyst has made early bets on some of the biggest companies in tech today, including Airbnb, Lemonade and Warby Parker.

We sat down with Katherine Boyle and Peter Boyce, who co-lead the firm’s seed-stage investments, to discuss what they look for in founders, which sectors they’re most excited about and how business has changed in the wake of the COVID-19 pandemic.

This conversation is part of our broader Extra Crunch Live series, where we sit down with VCs and founders to discuss startup core competencies and get advice. We’ve spoken to folks like Aileen Lee, Mark Cuban, Roelof Botha, Charles Hudson and many, others. You can browse the full library of episodes here.

Check out our full conversation with Boyce and Boyle in the YouTube video below, or skim the text for the highlights.

Which personality traits are most important in founders

Katherine Boyle: I look for what I would call this obsessive trait, where they are learning more about the regulatory complications, where they are constantly trying to figure out how to solve a problem.

I’d say that the common theme among the founders that I support are that they have this sort of obsessive gene or personality, where they will go deeper and deeper and deeper. When we invest in these companies, it becomes very clear that they often have sort of a contrarian view of the industry. Maybe they are not industry-native. They come at it from a different perspective of problem solving. They’ve had to defend that thesis for a very, very long time in front of a variety of different customers and different people. In some ways, that makes them much stronger in terms of the way they approach problems.

Peter Boyce: I think the first would be being magnetic for talent. It ends up influencing the speed of learning and development. Really incredible founding teams that can be magnetic for talent and learning just kind of spirals out of control in really good ways over time. I really look for the speed and the sources of learning. And can folks be really intentional? Can they get the right set of advisors and teammates around them?

The second would be the personal connection to the problem space. It’s like there’s this kind of deep-seated source of energy and fuel that actually isn’t going to run out. Catherine and I’ve been lucky to work across a number of different particular thematic areas, but the thing they have in common is just this personal connection to how and why their business needs to exist. Because I just think that that fuel doesn’t run out, you know what I mean? Like, that’s renewable.

On fundraising and building trust remotely

Boyle: If you’re someone who’s comfortable presenting on Zoom, making connections on Zoom, or using Signal and using Twitter and being very online, then I 100% think that you can make investments, build community and build connections through digital worlds and digital platforms. If you really like that in-person connectivity, then you might consider staying in a tech hub, or you might consider sort of these distanced walks until things go back to normal.

#ec-entrepreneurship, #entrepreneurship, #extra-crunch-live, #general-catalyst, #katherine-boyle, #peter-boyce, #startups, #tc, #venture-capital

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Extra Crunch Live: Join GC’s Peter Boyce and Katherine Boyle for a live Q&A today at 4pm ET/1pm PT

It’s a special day; we’re hosting the year’s final episode of Extra Crunch Live with General Catalyst’s Peter Boyce and Katherine Boyle at 4pm ET/1pm PT.

Extra Crunch members can join the live conversation (details below) or catch it on demand. Questions from the audience are not just allowed, they’re highly encouraged, so if you’re not yet an Extra Crunch member, sign up here and join the fun!

General Catalyst is widely recognized as one of the top venture capital firms, with portfolio companies that include Snap, Kayak, Airbnb, Stripe, HubSpot and GitLab.

Boyce has been with General Catalyst since 2013, leading investments in companies like Ro, Macro, towerIQ and Atom. He also supported some big deals, including investments in Giphy, Jet.com and Circle. He also co-founded Rough Draft Ventures, an investment arm of General Catalyst focused on funding first-time CEOs out of university.

Boyle was previously a business reporter at The Washington Post before joining General Catalyst, which gives her a unique perspective on the entrepreneurial landscape. She’s invested in several companies, including AirMap, Origin and Nova Credit and has joined us for previous events to lay out some advice for startups navigating governmental rules.

We’re amped to discuss which opportunities are exciting them these days, how tech, innovation and venture has changed amid the pandemic, what they look for in a pitch, and much, much more.

You really won’t want to miss it.

Oh, and if this is of interest, I highly suggest you check out our library of ECL episodes right here. We’ve spoken to big names like Roelof Botha, Jason Green, Alexa Von Tobel, Aileen Lee, Charles Hudson and many others.

Catch the details for today’s call below.

Event Details

#general-catalyst, #katherine-boyle, #peter-boyce, #startups, #tc, #venture-capital

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Finch raises $3.5M to build out its HR and payroll-focused API business

The old saw about finding a place where companies still use spreadsheets, and then building a startup to solve the problem, was a good way to dream up new software as a service (SaaS) companies. But the next generation of that idea may be to instead find a place where data is locked, fragmented or both, and build an API to unleash the information.

That’s the thesis behind companies that TechCrunch has covered like Noyo, which wants to free health insurance data and raised $12.5 million in September. And it’s the apparent concept behind Finch, a recent Y Combinator graduate that is looking to liberate HR and payroll data.

General Catalyst led the round, which saw participation from a number of industry executives, including the founders from Ramp and Brex, two competing startups, and Digits. The company’s round comes after the startup had targeted a smaller, $1.5 million sum but wound up taking more capital aboard.

Finch was founded by Jeremy Zhang and Ansel Parikh. Zhang moved from robot R&D for a big tech company to SmartCar, which is building an API for what it self-describes as “mobility applications.” Parikh, Zhang told TechCrunch, worked in venture on API-related deals. So, the pair had experience with startup products that were delivered through a developer endpoint, not by an application coupled to a contract.

Zhang and Parik initially worked on a product that would have allowed other companies to embed consumer lending into their own service. But, in Zhang’s telling, the pair ran into the pandemic, the early period of which was anathema to interest in extending more credit to regular folks. (Notably Upstart, a fintech focused on facilitating consumer lending, is in the process of going public; how rapidly 2020 has spun industries around.)

However, a design partner wanted to offer PPP loans to SMBs on its platform, so the pair wound up looking into what was required for the project on the data side of the ask; Finch was born out of those learnings.

Finch connects customers to payroll and HR data via an API, offering both a free version of its product to entice developers, and a paid version of the product that is priced either as a pay-as-you-go service, or with a SaaS-like pricing provision.

Something notable about Finch is its age. Even for a startup, it’s young. The founding group put up a landing page for the company in April, and wrote the first code for the project in July. That’s rapid scaling from zero to in-market traction. Today Finch is growing 50% month-over-month in terms of both revenue and “employers connected,” giving it the sort of growth that investors flock to.

What might one be able to build with Finch’s API? Past a few basic ideas, my brain was bereft, so I asked Zhang to dole out the future to me. In the co-founder’s estimation, there are three core buckets where Finch can have a role: financial software, inside the lending and insurances spaces, and supporting the burgeoning HR and benefits software market.

In each area, having access to what Zhang called a “source of truth,” namely HR and payroll data about employees and their employment, would allow other companies to better make decisions; tenure at a job could help one determine creditworthiness, HR services need to know who works where, and in the realm of finance apps that are working to help or supplant CFOs need to understand current headcount.

Still, Finch’s path won’t be an easy one. Part of the problem that its founders discovered is that there are myriad payroll and HR systems. Building out an API to support as many as its market requires will take time and investment. Raising more capital than it initially intended will help, we’re sure, but even with deeper coffers, the scale of the challenge in front of the young company will require yeoman’s work.

The company told TechCrunch that it can support the systems of 1.4 million employers today, though it intends to “10x” that number in the next year. Finch’s capital event is similar to the round raised recently by fellow YC graduate BuildBuddy, a SaaS play, in which both startups took aboard more than $3 million in funding after initially targeting a raise in the $1 million range.

The startup has six staff today, with Zhang expecting the the company to scale to 15 or 20 by the end of next year.

#finch, #general-catalyst, #tc, #y-combinator

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Join a Q&A with General Catalyst’s Peter Boyce and Katherine Boyle on Tuesday at 4pm ET/1pm PT

General Catalyst is one of the top VC firms in the U.S., with portfolio companies that include Snap, Kayak, Airbnb, Stripe, HubSpot, GitLab and many others.

We’re thrilled to have GC’s Peter Boyce and Katherine Boyle join us for the next episode of Extra Crunch Live, our live video series where we ask VCs about what’s exciting them these days, get their advice for how early-stage startups can thrive (particularly during a pandemic), and offer Extra Crunch members a chance to ask questions directly.

We’ve interviewed some heavy hitters, including notables like Mark Cuban, Kirsten Green and Roelof Botha during our first two seasons.

If you’re not an Extra Crunch member, you should really hop to it; check out the full library of ECL content before hanging out with Boyce, Boyle and myself on Tuesday at 4pm ET/1pm PT.

Boyce has been with General Catalyst since 2013, leading investments in companies such as Ro, Macro, towerIQ and Atom, among others. He also supported some big General Catalyst deals, including investments in Giphy, Jet.com and Circle.

Boyce also co-founded Rough Draft Ventures, an investment arm of General Catalyst focused on funding first-time CEOs out of university.

Boyle was previously a business reporter at The Washington Post before joining General Catalyst, which gives her a unique perspective on the entrepreneurial landscape. She’s invested in several companies, including AirMap, Origin and Nova Credit.

Boyle also has a particular expertise in regulated industries and has joined us for previous events to lay out some advice for startups navigating governmental rules.

On Tuesday, we’ll discuss trends and industries they find most exciting as we head into 2021, get their best advice for early-stage startups seeking funding and hear how the VC landscape has changed during the pandemic.

You should most definitely bring your own questions to the table. Extra Crunch members can submit questions ahead of time via the form below or during the live discussion.

Full details can be found below.

See you there!

Event Details

#extra-crunch-live, #general-catalyst, #peter-boyce, #tc, #venture-capital

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If elected, Biden commits to rejoin climate accord U.S. just abandoned

On the same day that the U.S. officially withdrew from the global pact to reduce emissions that cause climate change, presidential contender Joe Biden committed that he would rejoin the Paris Agreement if elected.

In a tweet late Wednesday, Biden wrote, “Today, the Trump Administration officially left the Paris Climate Agreement. And in exactly 77 days, a Biden Administration will rejoin it.”

The Trump Administration announced that the U.S. would leave the agreement three years ago, in a move that was blasted by venture investors at the time.

“I have always believed that, while we can disagree on the scientific premise behind climate change, we should all agree that advanced energy technologies represent one of the biggest economic opportunities,” said General Catalyst managing director Hemant Taneja at the time. “To give that up is a threat to American prosperity … Our American companies will be at a huge competitive disadvantage globally if they don’t have a market to rely on in their backyard.”

Biden’s decision to rejoin the agreement should come as no surprise given the $2 trillion climate stimulus package that was a major plank of the former Vice President’s campaign.

For the Trump Administration, the official abandonment of the climate agreement was the fulfillment of a campaign promise made in what could be the waning days of its authority.

A permanent American exit from the climate accord would be a huge blow to the international community’s ability to stave off a climate disaster caused by rising temperatures related to greenhouse gas emissions. A year of wildfires, flooding and other climate-related catastrophes have shown how changing temperatures are already wreaking havoc on communities. As the second largest emitter of global carbon dioxide, the U.S. plays an outsized role in the success of any climate change mitigation plan.

The agreement, a centerpiece of the previous Obama Administration in which Biden served as vice president, was designed to limit the emissions that cause global warming so that temperatures would not rise beyond another 2 degrees celsius.

“If Biden wins, then the fact that the withdrawal became final on November 4 really won’t matter,” Todd Stern, who was the top U.S. climate negotiator during the Obama administration, told the Financial Times. “If Trump wins a second term, then it will have much more lasting impact.”

To date, the U.S. is the only country that has formally left the agreement.

Even if a Trump Administration were to eke out a slight electoral college victory and return for a second term, market dynamics could mute the effect of any fossil fuel industry advocacy or stimulus the government may try to initiate.

Simply put, renewable energy is making more economic sense within the U.S. than its fossil fuel competitors. Wind and solar are now basically cost competitive or cheaper than fossil fuels in many markets. The cost of battery storage is also falling dramatically.

A March report from Consumer Reports explained just how much better solar power can be for consumers. “Going solar is a money-saver in the long term, even though startup costs are higher for the consumer,” according to the publication. “Electricity from fossil fuels costs between 5 cents and 17 cents per kilowatt-hour. Solar energy costs average between 3 cents and 6 cents per kilowatt-hour and are trending down, according to the National Renewable Energy Laboratory.”

Beyond market forces, a recalcitrant Trump Administration could be pressured to adopt more aggressive policies to reduce its emissions by international tariffs and potential sanctions, Sarah Ladislaw, a director of the climate change program at the Center for International and Strategic Studies at Tufts University, told the Financial Times..

“It is quite likely that other countries with ambitious emissions reduction targets, like the EU and China, will try to influence US behavior through cross-border carbon tariffs and a push to influence the global financial system to incorporate climate considerations,” she said.

#consumer-reports, #european-union, #general-catalyst, #government, #hemant-taneja, #joe-biden, #paris, #paris-agreement, #tc, #tufts-university

0

Render raises $4.5M for its DevOps platform

Render, the winner of our Disrupt SF 2019 Startup Battlefield, today announced that it has added another $4.5 million onto its existing seed funding round, bringing total investment into the company to $6.75 million.

The round was led by General Catalyst, with participation from previous investors South Park Commons Fund and a group of angels that includes Lee Fixel, Elad Gil and GitHub CTO (and former VP of Engineering at Heroku) Jason Warner.

The company, which describes itself as a ‘Zero DevOps alternative to AWS, Azure and Google Cloud,’ originally raised a $2.25 million seed round in April 2019, but it got a lot of inbound interest after winning the Disrupt Battlefield. In the end, though, the team decided to simply raise more money from its existing investors.

Current Render users include Cypress.io, Mux, Bloomscape, Zelos, 99designs and Stripe.

“We spoke to a bunch of people after Disrupt, including Ashton Kutcher’s firm, because he was one of the judges,” Render co-founder and CEO Anurag Goel explained. “In the end, we decided that we would just raise more money from our existing investors because we like them and it helped us get a better deal from our existing investors. And they were all super interested in continuing to invest.”

What makes Render stand out is that it fulfills many of the promises of Heroku and maybe Google Cloud’s App Engine. You simply tell it what kind of service you are going to deploy and it handles the deployment and manages the infrastructure for you.

“Our customers are all people who are writing code. And they just want to deploy this code really easily without having to worry about servers, or maintenance, or depending on DevOps teams — or, in many cases, hiring DevOps teams,” Goel said. “DevOps engineers are extremely expensive to hire and extremely hard to find, especially good ones. Our goal is to eliminate all of that work that DevOps people do at every company, because it’s very similar at every company.”

Image Credits: Render

One new feature the company is launching today is preview environments. You can think of them as disposable staging or development environments that developers can spin up to test their code — and Render promises that the testing environment will look the same as your production environment (or you can specify changes, too). Developers can then test their updates collaboratively with QA or their product and sales teams in this environment.

Development teams on Render specify their infrastructure environments in a YAML file and turning on these new preview environments is as easy as setting a flag in that file.

Image Credits: Render

“Once they do that, then for every pull request – because we’re integrated with GitHub and GitLab — we automatically spin up a copy of that environment. That can include anything you have in production, or things like a Redis instance, or managed Postgres database, or Elasticsearch instance, or obviously API’s and web services and static sites,” Goel said. Every time you push a change to that branch or pull request, the environment is automatically updated, too. Once the pull request is closed or merged, Render destroys the environment automatically.

The company will use the new funding to grow its team and build out its service. The plan, Goel tells me, is to raise a larger Series A round next year.

#ashton-kutcher, #battlefield, #continuous-integration, #devops, #elad-gil, #elasticsearch, #general-catalyst, #git, #github, #gitlab, #heroku, #lee-fixel, #software, #software-engineering, #tc, #version-control, #web-services

0

This serial founder is taking on Carta with cap table management software she says is better for founders

Yin Wu has cofounded several companies since graduating from Stanford in 2011, including a computer vision company called Double Labs that sold to Microsoft, where she stayed on for a couple of years as a software engineer. In fact, it was only after that sale she she says she “actually understood all of the nuances with a company’s cap table.”

Her newest company, Pulley, a 14-month-old, Mountain View, Ca.-based maker of cap table management software aims to solve that same problem and has so far raised $10 million toward that end led by the payments company Stripe, with participation from Caffeinated Capital, General Catalyst, 8VC, and numerous angel investors.

Wu is going up against some pretty powerful competition. Carta was reportedly raising $200 million in fresh funding at a $3 billion valuation as of the spring (a round the company never official confirmed or announced). Last year, it raised $300 million. Morgan Stanley has meanwhile been beefing up its stock plan administration business, acquiring Solium Capital early last year and more newly purchasing Barclay’s stock plan business.

Of course, startups often manage to find a way to take down incumbents and a distraction for Carta, at least, in the form of a very public gender discrimination lawsuit by a former VP of marketing, could be the kind of opening that Pulley needs. We emailed with Yu yesterday to ask if that might be the case. She didn’t answer directly, but she did mention “values,” as long as shared some more details about what she sees as different about the two products.

TC: Why start this company? Has Carta’s press of late created an opening for a new upstart in the space?

YW: I left Microsoft in 2018 and started Pulley a year later. We skipped the seed and raised the A because of overwhelming demand from investors. Many wanted a better product for their portfolio companies. Many founders are increasingly thinking about choosing with companies, like Pulley, that better align with their values.

TC: How many people are working for Pulley and are any folks you pulled out of Carta?

YW: We’re a team of seven and have four people on the team who are former Y Combinator founders. We attract founders to the team because they’ve experienced firsthand the difficulties of managing a cap table and want to build a better tool for other founders. We have not pulled anyone out of Carta yet.

TC: Carta has raised a lot of funding and it has long tentacles. What can Pulley offer startups that Carta cannot?

YW: We offer startups a better product compared to our competitors. We make every interaction on Pulley easier and faster. 409A valuations take five days instead of weeks, and onboarding is the same day rather than months. By analogy, this is similar to the difference between Stripe and Braintree when Stripe initially launched. There were many different payment processes when Stripe launched. They were able to capture a large portion of the market by building a better product that resonated with developers.

One of the features that stands out on Pulley is our modeling feature [which helps founders model dilution in future rounds and helps employees understand the value of their equity as the company grows]. Founders switch from our competitors to Pulley to use our modeling tool [and it works] with pre-money SAFEs, post-money SAFEs, and factors in pro-ratas and discounts. To my knowledge, Pulley’s modeling tool is the most comprehensive product on the market.

TC: How does your pricing compare with Carta’s?

YW:  Pulley is free for early-stage companies regardless of how much they raise. We’re price competitive with Carta on our paid plans. Part of the reason we started Pulley is because we had frustrations with other cap table management tools. When using other services, we had to regularly ping our accountants or lawyers to make edits, run reports, or get data. Each time we involved the lawyers, it was an expensive legal fee. So there is easily a $2,000 hidden fee when using tools that aren’t self-serve for setting up and updating your cap table.

TC: Is there a business-to-business opportunity here, where maybe attorneys or accountants or wealth managers private label this service? Or are these industry professionals viewed as competitors?

YW: We think there are opportunities to white label the service for accountants and law firms. However, this is currently not our focus.

TC: How adaptable is the software? Can it deal with a complicated scenario, a corner case?

YW: We started Pulley one year ago and we’re launching today because we have invested in building an architecture that can support complex cap table scenarios as companies scale. There are two things that you have to get right with cap table systems, First, never lose the data and second, always make sure the numbers are correct. We haven’t lost data for any customer and we have a comprehensive system of tests that verifies the cap table numbers on Pulley remain accurate.

TC: At what stage does it make sense for a startup to work with Pulley, and do you have the tools to hang onto them and keep them from switching over to a competitor later?

YW: We work with companies past the Series A, like Fast and Clubhouse. Companies are not looking to change their cap table provider if Pulley has the tool to grow with them. We already have the features of our competitors, including electronic share issuance, ACH transfers for options, modeling tools for multiple rounds, and more. We think we can win more startups because Pulley is also easier to use and faster to onboard.

TC: Regarding your paid plans, how much is Pulley charging and for what? How many tiers of service are there?

YW; Pulley is free for early-stage startups with less than 25 stakeholders. We charge $10 per stakeholder per month when companies scale beyond that. A stakeholder is any employee or investor on the cap table. Most companies upgrade to our premium plan after a seed round when they need a 409A valuation.

Cap table management is an area where companies don’t want a free product. Pulley takes our customers data privacy and security very seriously. We charge a flat fee for companies so they rest assured that their data will never be sold or used without their permission.

TC: What’s Pulley’s relationship to venture firms?

YW: We’re currently focused on founders rather than investors. We work with accelerators like Y Combinator to help their portfolio companies manage their cap table, but don’t have a formal relationship with any VC firms.

#8vc, #caffeinated-capital, #carta, #funding, #fundings-exits, #general-catalyst, #morgan-stanley, #recent-funding, #startups, #stripe, #tc, #venture-capital, #yin-wu

0

Zira raises $3.1M for its shift-scheduling service that helps manage hourly workers

This morning Zira raised $3.1 million in a seed round. The startup provides software that helps businesses schedule their hourly workforce in a more intelligent manner.

Software often fails to reach non-information workers, so it’s nice to see a startup focus on a somewhat forgotten demographic. General Catalyst and Abstract Ventures led the round, which also saw participation from a number of angel investors.

This is the company’s first known investment, according to Crunchbase data.

The technology that Zira sells looks neat from the outside. It can automatically set team schedules, taking a task that can be rife with favoritism or bias and making it a bit more standardized. Its service can also handle clocking in and out for workers, and provides a chat feature to help groups of workers stay in sync.

And most interesting of all, Zira’s platform has an automation feature, allowing managers to create triggers to replace missing staff for a shift, or provide rewards to the workers who come top in a category, like attendance.

Zira’s service costs $4 per employee, per month, or $3 if paid annually. It also executes custom deals with larger clients, for whom we presume discounts can be had.

The round

To better understand the round itself, TechCrunch asked Zira what the new capital will unlock for its business. Tito Goldstein, a founder at the company, responded that the funds will allow his company to scale its development team, “hone” its product and work on its sales function.

“We started with a product that was meeting customer expectations and winning deals against incumbent platforms,” Goldstein said in an email, “but now we want to really differentiate ourselves.” Hiring more developers should help the company move more quickly in that direction, and without money it’s rather hard to hire engineers.

On the sales front, Goldstein said that after depending on “referral or local connections” to secure customers, COVID has made those channels “increasingly difficult.” That means Zira needs a more traditional sales function, and capital.

Zira declined to share growth metrics, saying that it hopes to do so by the end of the year. That means we’ll check back in with Zira in a few months to get the data. Until then, it’s a fun startup with a neat idea. Let’s see how far it gets with its new capital.

#fundings-exits, #general-catalyst, #recent-funding, #startups, #tc, #zira, #zira-ai

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Collective, a back office platform that caters to ‘businesses of one,’ just landed a hefty seed round

Americans and other global citizens are increasingly self-employed, thanks to great software, the need for flexibility, and because skilled services especially can pay fairly well, among other reasons.

In fact, exactly one year ago, the Freelancers Union and Upwork, a digital platform for freelancers, released a report estimating that 35% of the U.S. workforce had begun freelancing. With COVID-19 still making its way around the country and globe, prompting massive and continued job dislocation for many tens of millions  of people, that percentage is likely to rise quickly.

Unsurprisingly, savvy startups see the economic power of these individuals — many of whom aren’t interested in managing anyone or anything other than the steady growth of their own businesses. A case in point is Collective, a 2.5-year-old, 20-person San Francisco-based startup that’s been quietly building back office services like tax preparation and bookkeeping for what it dubs “business of one” owners, and which just closed on $8.65 million in seed funding.

General Catalyst and QED Investors co-led the round, along with a string or renowned angel investors, including Uber cofounder Garrett Camp, Figma founder Dylan Field, and Doordash executive Gokul Rajaram.

We talked yesterday with cofounder and CEO Hooman Radfar about Collective’s mission to “empower, support and connect the self-employed community” — and what, exactly, it’s proposing.

TC: You previously founded a company and, even before it sold to Oracle in 2016, you had jumped over to VC, working with Garrett Camp at his startup studio Expa. Why shift back into founder mode?

HR: What I saw throughout across AddThis and Expa and my angel investing is that managing finances is hard. Accounting, taxes, compliance — all that set-up as a small business is annoying.

Two years ago, [Collective cofounder] Uger [Kaner] came into Expa and he basically pitched me on a startup-in-a-box-type program that we were talking about building from an incubation perspective, but [with more of a pointed focus on back office issues]. He’s an immigrant like me, and because he didn’t quite understand the system, he wound up having tax penalties — penalties that are even worse when you’re a freelancer. Some startups have come up with a  bespoke version of what we offer, but we were like, ‘Why do they have to do it?’ These are commodities, but if you put them together in a platform, they can can be powerful.

TC: So is what you’ve created proprietary or are you working with third parties?

HR: Both. We’re an online concierge that’s focused on the back office as the core, meaning accounting and tax services. We also form an S Corp for you because you can save a lot of money [compared with forming a business as an LLC, which features different tax requirements]. So there’s an integration layer plus a dashboard on top of that. If you’re an S Corp, you need to have payroll, so we have partnership with Gusto that comes with your subscription. We have a partnership with Quickbooks. We work with a third party on compliance. Our vision is to make this easy for you and to set this on autopilot because we understand that time is literally money.

TC: How much are you charging?

For taxes, accounting, business banking, and payroll, for the core package, it’s $200 a month. We are piloting bookkeeping and a fuller service package that’s probably [representative of] the direction we’ll head over time, and that will be an additional fee.

TC: How can you persuade these businesses of one that it’s worth that cost?

HR: There are almost three million people in the U.S. who [employ only themselves and] are making more than $100,000 a year and if you think about how many of these [different products] they are already using, it’s a great deal. Quickbooks and Gusto is cheaper with us. You see savings through expensing. The magic is really running your S Corp the right way. Part of that is normal income tax, but you also have a distribution and it’s taxed differently than an income — it’s taxed less. So we pull in salary data and look at expenses and across states, and say, ‘This is what we’d recommend to you based on how your cash flow is coming in, so you recognize this distribution in a compliant way.’

TC: Interesting about this useful data that you’ll be amassing from your customers. How might you use it? 

HR: Our first concern is making sure the right people are seeing it [meaning we’re focused on privacy]. But there’s a lot we can do with the aggregation of that data once we’ve earned the right to use it. Among the things we could do, theoretically, including creating a new level of scoring. If you’re a business of one, for example, it’s very difficult to get mortgages and loans, because credit agencies don’t have the tools to assess you. But if we have your financial history for years, can we represent that you’re a great person, you have a great business.

Another interesting direction as we reach more members — we’ll get to 2,000 soon — would be to use our power as a collective to get our members less expensive insurance, [help facilitate] credit, [help them with a] 401(k).

TC: There are a lot of other things you can get into presumably, too, from project management to graphic design . . .

HR: Right now, we’re want to make sure our core service is nailed.

Think about the transparency and peace of mind that Uber brought to ride-sharing, or that Uber Eats brings to food delivery. You know when something is cooking, when it’s on its way, when it’s arriving. We’ve gotten used to that level of transparency and accountability with so many things, but when it comes to accounting, it’s not there and that’s crazy. We want to change that.

TC: Going after “businesses of one” means you’re addressing a highly fragmented market. What kinds of partnerships are you striking to reach potential customers?

HR: We’re having those conversations now, but you can imagine neo banks make sense, along with vertical marketplaces for nurses and doctors and realtors and writers. There are a lot of possibilities.

Pictured, left to right, Collective’s cofounders: CTO Bugra Akcay, CEO Hooman Radfar, and CPO Ugur Kaner.

#collective, #dylan-field, #funding, #garrett-camp, #general-catalyst, #hooman-radfar, #qed-investors, #recent-funding, #saas, #seed-funding, #startups, #tc, #venture-capital

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Competing with both Perfect Day and Beyond Meat, Chile’s NotCo raises $85 million to expand to the US

NotCo, the Chilean food technology company making plant-based milk and meat replacements, has confirmed the close of a new $85 million round of funding to take the company’s products into the US market.

The announcement confirms earlier reporting from TechCrunch that the company had raised new capital, but according to people with knowledge of the investment, the valuation for the company is roughly $300 million, and not the $250 million TechCrunch previously reported.

The funding came from new investors including the consumer-focused private equity firm L Catterton Partners, Twitter co-founder Biz Stone’s Future Positive investment firm, and the giant venture capital firm, General Catalyst. Previous investors including Kaszek Ventures, The Craftory, Bezos Expeditions (the personal investment firm for Amazon founder, Jeff Bezos), Endeavor Catalyst, IndieBio, Humbolt Capital and Maya Capital, all of which have followed on in this round.

NotCo makes a hamburger substitute that’s currently being marketed at Burger King and Papa John’s restaurants in Chile as part of its NotBurger and NotMeat brands and has a line of dairy products including NotIceCream, NotMayo and NotMilk.

Both markets are not small. With milk alone being a multi-billion dollar category that NotCo chief executive Matias Muchnick believes his company can dominate in both Latin America and the US. That trajectory will put it on a collision course with well-funded competitors like Perfect Day, which raised $300 million in financing earlier this year and launched a new consumer brand subsidiary, the Urgent Company, for products made with its milk substitutes.

For longtime investors in the company, like Kaszek Ventures managing partner, Nicolas Szekasy, the new financing for NotCo validates his firm’s early faith that a company from Santiago, Chile could compete in some of the world’s largest consumer markets.

“We continue to actively support the company since its early days with a strong conviction of the potential that NotCo has to be the leading global player in the food-tech space. In this uncertain time, consumers have amplified their appetite for the plant-based world,” said Szekasy in a statement. “In parallel, COVID has allowed us to see that meat production is not only environmentally harmful and inefficient, but also that its supply chain is fragile. So we are happy to witness an inflection point where plant-based products are becoming an increasing proportion of a new normal, once they can actually taste amazing like we see NotCo crafting.”

Joining the company to help with its international expansion plans are a clutch of seasoned executives from large multi-national food brands. Flavia Buchmann, a former executive at Coca-Cola overseeing the company’s Sprite brand has been tapped as the company’s new chief marketing officer. Former Danone executives Luis Silva and Catriel Giuliano are taking the reins as heads of global business development and research and development, respectively. And Jose Menendez a former banker at Jeffries and executive at Tapad, is now NotCo’s global chief operating officer.

A flood of venture capital dollars have come into the food space since NotCo first burst on the scene and many of these deals are operating at the intersection of novel biomanufacturing technologies and food science. But NotCo’s take on foodtech is more akin to Beyond Meat’s than Impossible Foods or Perfect Day.

The company isn’t making biologically engineered foods, it’s taking its taxonomy of existing foods and determining which combinations of plant ingredients will most closely mimic all aspects of the animal products they’re replacing.

So a closer analogy would be companies like Just or the newly funded Climax Foods. Muchnick said that the difference is in where these companies are spending their time. Instead of focusing on a protein that can act as a one for one replacement for casein or the carbohydrate lactose, NotCo is trying to replicate the whole product — the entire sensorial panel of a particular food.

“Flavors, taste, smell, color, and the interaction between all of them and the molecular components in food,” said Muchnick. “It’s not just the concept of how limited we are to replicating products and how limited to using AI to address other challenges in the food industry.”

For Muchnick, the biggest opportunity for NotCo is dairy. While the company has plans to introduce a number of new products including a chicken replacement to compliment its line of NotBurger and NotMeat products, it’s really the dairy business where the company wants to land and expand.

It’s looking to cut a deal with a large quick service restaurant along with deals for an online channel and a direct to consumer play.

As it grows, consumers can expect to see the company’s brands recede into the background as Muchnick looks to focus on supplying products to other vendors.

“We partnered upstream and downstream,” Muchnick said. The company works with suppliers including Ingredion, ADM, and Cargill and downstream has product partners who will incorporate its milk substitute into other products.

What we want is to be the catalyst of change with many other companies. Why don’t we become the enabler. We’re becoming the Intel inside of other products.”

At that scale, the company would be a prime candidate for public investors, and if Muchnick has his way the company will get there. “We are aiming to have a $300 million company by 2024 with 70 percent of that business in the US,” he said. 

#amazon, #artificial-intelligence, #beyond-meat, #bezos-expeditions, #biz-stone, #burger-king, #cargill, #chief-operating-officer, #chile, #co-founder, #coca-cola, #executive, #food, #food-and-drink, #food-science, #food-technology, #general-catalyst, #impossible-foods, #jeff-bezos, #kaszek-ventures, #latin-america, #managing-partner, #milk, #sprite, #tapad, #tc, #united-states, #urgent-company

0

Dialpad acquires video conferencing service Highfive

VoIP provider Dialpad, the company behind the popular video conferencing service UberConference, today announced that it has acquired Highfive, a well-funded video conferencing startup that focuses on providing businesses with conference room solutions. The two companies did not disclose the purchase price, but Highfive raised $77.4 million from the likes of Lightspeed Venture Partners, Andreessen Horowitz, General Catalyst and Dimension Data ahead of today’s acquisition.

Led by its CEO Craig Walker, who previously sold GrandCentral to Google and then built Google Voice, Dialpad is clearly aiming to double down on video. While UberConference does have built-in video conferencing features already, the service is mostly known for its calling features. In addition to its conference call solutions and VoiP platform for business users, Dialpad also offers a contact center solution.

“When we did UberConference eight years ago, we were like, ‘look, 80% of, of conferences are just people on the phone. So let’s make phone, audio conferencing better,” Walker said. “And then, obviously, over time time that started changing and then COVID totally accelerated it. So with that accelerating, we realized we really want to double down on video — and not with a mindset of ‘hey, video as a standalone thing is going to be a big investment,’ but video, as part of business communications, has to be excellent and has to be part of a Unified-Communications-as-a Service (UCaaS) system.”

Image Credits: Highfive

Highfive, which was incidentally also launched by a group of ex-Google engineers, always focused exclusively on video. Both companies, Walker noted, were also born in the cloud, but served somewhat different customers until now.

“What’s truly exciting about this combination is the joint heritage — both companies are truly born in the cloud, running on hyperscale, global infrastructures,” Highfive CEO Joe Manuele told me. “Dialpad‘s conferencing, UCaaS and CCaaS offerings were only ever built on public cloud infrastructures, as was Highfive’s. While video is an important part of Diaplpad’s current portfolio, we bring the ability to connect rooms, interop with other video services with our Meeting Connector technology and legacy device support with our Room Connector. Beyond the product fit, the shared industry vision that you can meet all of your communications needs over a hyperscale public cloud environment is what I’m personally most excited about.”

Manuele noted that the company’s board had considered other options, including a new round of fundraising, but in the end, the company decided that video conferencing services now essentially have become part of the larger UCaaS stack.

Image Credits: Dialpad

“While we have developed a scalable, born in the cloud video solution set, it was becoming harder to compete with competitors who were offering inferior ‘free’ video services as part of a UCaaS stack,” he said. “Even the industry leader Zoom had to move to IP Telephony and we see that trend to be irrefutable.”

That’s a thesis Dialpad’s Walker obviously agrees with. “Whether I’m on a phone call, whether it’s my business phone system, or I need to do a video call, or I need to do a conference call, or if I need to go screenshare — if I need to do any of these things, it should all just kind of be one [tool],” he said.

One area Highfive really exceeded in was making its service work seamlessly. It did that by tightly integrating its hardware and software stack, but also by reimagining some of the overall user experience around its room systems.

Walker admitted that nobody is really using room systems right now, but he believes that as people go back to their offices over time, video and remote meetings will potentially become even more important as most companies will adopt some kind of hybrid model for their employees.

He believes this acquisition will also give Dialpad a strong position in the overall market and that this allows Dialpad to offer a complete solution to its customers.

Highfive’s brand may ultimately go away, but customers who have already bought into the company’s systems won’t see any interruptions in their service.

#andreessen-horowitz, #ceo, #conference-call, #craig-walker, #dialpad, #dimension-data, #general-catalyst, #google, #google-voice, #grandcentral, #highfive, #lightspeed-venture-partners, #ma, #tc, #telecommunications, #teleconferencing, #uberconference, #video-conferencing, #voip, #web-conferencing

0

Mirror competitor Tempo raises a $60M Series B

No doubt about it, home fitness is hot. The category had already been gaining considerable traction in recent years and months, but the ongoing pandemic has undoubtedly accelerated interest by orders of magnitude. And understandably so. After all, while some businesses have begun reopening in some locations, gyms are still a big red flag, with one of the highest potential transmission risks of any communal space.

This morning Tempo announced a healthy $60 million Series B, led by Norwest Venture Partners and General Catalyst, along with a repeat investors Founders Fund, Signal Fire, DCM, Y Combinator and Bling Capital.

The news comes almost exactly a month after Mirror, one of the San Francisco-based company’s chief competitors, was acquired by fitness brand Lululemon for $500 million. Also worth noting here is the continued success of Peloton, whose streaming fitness classes have continued to catapult the home fitness equipment maker. A number of other startups have announced raises in recent weeks, while stalwarts like Technogym have introduced their own home streaming services.

Image Credits: Tempo

The Tempo device runs ~$2,000, plus a $39 monthly membership to its content, which includes strength, cardio and various other exercises as either live streams or on-demand content. Notably, the company says it’s on track to hit a $100 million run rate by year’s end, owing in part to sales that have jumped 500% since the company opened up pre-orders this February (without disclosing actual unit sales).

That’s due, no doubt, to word of mouth, but the company certainly isn’t discounting the role of COVID-19 in its fast success. “With tens of millions unable to go to the gym or attend classes in person, consumers’ fitness needs have evolved,” the company notes in a press release. “App-based services lack the necessary equipment to be effective for most people, while previous smart devices often do little more than stream videos without two-way guidance.”

#fitness, #general-catalyst, #hardware, #norwest-venture-partners, #recent-funding, #series-b, #startups

0

Digital elective care and telemedicine provider Ro raises $200 million at a reported $1.5 billion valuation

In three years Zachariah Reitano’s startup, Ro, has managed to hit a reported $1.5 billion valuation for its transformation from a company focused on treating erectile disfunction to a telemedicine service for a range of elective and urgent care-focused treatments.

Through Rory for women’s health, Roman for men’s health, and Zero for smoking cessation, Reitano’s company now treats 20 conditions including sexual health, weight loss, dermatology, allergies and more, according to a statement from the company.

Image Credit: Zero

Ro also has a new pharmacy business, Ro Pharmacy, which is an online cash pay pharmacy offering over 500 generic medications for just $5 per month per drug. And the company is getting into the weight loss business through a partnership with the private equity-backed health care company, Gelesis.

Ro’s also becoming a gateway into patient acquisition for primary care providers through Ribbon Health, and a test-case for the use of Pfizer’s Greenstone service, which provides certification that a generic drug is validated by one of the major pharmaceuticals.

The company’s $1.5 billion valuation is courtesy of a new $200 million investment from existing investors led by General Catalyst and including FirstMark Capital, Torch, SignalFire, TQ Ventures, Initialized Capital, 3L, and BoxGroup. New first time investor The Chernin Group also participated. In all, Ro has raised $376 million since it launched in 2017.

“This new investment will further our mission to become every patient’s first call. We’ll continue to invest in our vertically-integrated healthcare ecosystem, from our Collaborative Care Center to our national pharmacy operating system. This is just the beginning of Ro’s patient-centered healthcare platform.” 

It’s all part of the company’s mission to provide a point of entry into the healthcare system independent of insurance qualifications.

“Telehealth companies like Ro are using technology to address long-standing healthcare disparities that have been exacerbated by Covid-19,” said Dr. Joycelyn Elders, MD, Ro Medical Advisor and Former US Surgeon General. “By empowering providers to leverage their skills as efficiently and effectively as possible, Ro delivers affordable, high-quality care regardless of a patient’s location, insurance status, or physical access to physicians and pharmacies.”

Ro’s new financing is one of several forays by tech investors into reshaping the healthcare system at a time when patient care has been severely disrupted by attempts to mitigate the spread of COVID-19.

Digital medicine is assuming a central position in the healthcare world with most consultations now occurring online. Reimbursement schemes for telemedicine have changed dramatically and investors see an opportunity to capitalize on these changes by aggressively backing the expansion plans of companies looking to bring digital healthcare directly to consumers.

That’s one of the reasons why Ro’s major competitor, Hims, is reported to be seeking access to public markets through its sale to a Special Purpose Acquisition Company for roughly $1 billion, according to Reuters.

#allergies, #articles, #boxgroup, #digital-healthcare, #firstmark-capital, #general-catalyst, #hims, #initialized-capital, #operating-system, #pfizer, #pharmaceuticals, #ro, #rory, #science-and-technology, #tc, #technology, #telehealth, #telemedicine, #the-chernin-group

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Macro just raised $4.3M to make your never-ending Zoom calls more useful

In this pandemic world, in-person meetings are a thing of the past. Most meetings these days are done via video conference, and no company has capitalized on the shift quite like Zoom.

Macro, a new FirstMark-backed company, is looking to capitalize on the capitalization. To Capitalism!

Sorry. Let’s get back on track. Macro is a native app that employs the Zoom SDK to add depth and analysis to your daily work meetings.

There are two modes. The first is essentially focused on collaboration, which turns the usual Zoom meeting into a light overlay, where folks are shown in small, circular bubbles at the top of the screen. This mode is to be used when folks are working on the same project, such as a wireframe or a collaborative document. The UI is meant to kind of fade into the background, allowing users to click on taps or objects behind other attendees’ bubbles.

The other mode is an Arena or Stadium mode, which is meant for hands-on meetings and presentations. It has two distinct features. The first is an Airtime feature, which shows how much different participants have ‘had the floor’ for the past five minutes, thirty minutes, or in total during the meeting. The second is a text-input system on the right side of the UI that lets people enter Questions, Takeaways, Action Items and Insights from the call.

Macro automatically adds that text to a Google Doc, and formats it into something instantly shareable.

There is no extra hassle involved in getting Macro up and running. When a user installs Macro on their computer, they’re instantly loaded into Macro each time they click a Zoom link, whether it’s in an email, a calendar invite, or in Slack.

Macro cofounders Ankith Harathi and John Keck explained to TechCrunch that this isn’t your usual enterprise play. The product is free to use and, with the Google Doc export, is still useful even as a single-player product. The Google Doc is auto-formatted with Macro messaging, explaining that it was compiled by the company with a link to the product.

In other words, Harathi and Keck want to see individuals within organizations get Macro for themselves and let the product grow organically within an organization, rather than trying to sell to large teams right off the bat.

“A lot of collaborative productivity SaaS applications need your whole team to switch over to get any value out of them,” said Harathi. “That’s a pretty big barrier, especially since so many new products are coming out and teams are constantly switching and that creates a lot of noise. So our plan was to ensure one person can use this and get value out of it, and nobody else is affected. They get the better interface and other team members will want to switch over without any requirement to do so.”

This is possible in large part to the cost of the Zoom SDK, which is $0. The heavy lifting of audio and video is handled by Zoom, as is the high compute cost. This means that Macro can offer its product for free at a relatively low cost to the company as it tries to grow.

Of course, there is some risk involved with building on an existing platform. Namely, one Zoom platform change could wreak havoc on Macro’s product or model. However, the team has plans to expand beyond Zoom to other video conferencing platforms like Google, BlueJeans, WebEx, etc. Roelof Botha told TechCrunch back in May that businesses built on other platforms have a much greater chance of success when there is platform across that sector, as there certainly is here.

And there seems to be some competition for Macro in particular — for one, Microsoft Teams just added some new features to its video conferencing UI to relieve brain fatigue and Hello is looking to offer app-free video chat via browser.

Macro is also looking to add additional functionality to the platform, such as the ability to integrate an agenda into the meeting and break up the accompanying Google doc by agenda item.

The company has raised a total of $4.8 million since launch, including a new $4.3 million seed round from FirstMark Capital, General Catalyst and Underscore VC. Other investors include NextView Ventures, Jason Warner (CTO GitHub), Julie Zhuo (former VP Design Facebook), Harry Stebbings (Founder/Host of 20minVC), Adam Nash (Dropbox, Wealthfront, LinkedIn), Clark Valberg (CEO Invision), among others.

Macro has more than 25,000 users and has been a part of 50,000 meetings to date.

#apps, #enterprise, #firstmark-capital, #funding, #general-catalyst, #macro, #recent-funding, #startups, #tc, #underscore-vc

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BigCommerce files to go public

As expected, BigCommerce has filed to go public. The Austin, Texas, based e-commerce company raised over $200 million while private. The company’s IPO filing lists a $100 million placeholder figure for its IPO raise, giving us directional indication that this IPO will be in the lower, and not upper, nine-figure range.

BigCommerce, similar to public market darling Shopify, provides e-commerce services to merchants. Given how enamored public investors are with its Canadian rival, the timing of BigCommerce’s debut is utterly unsurprising and is prima facie intelligent.

Of course, we’ll know more when it prices. Today, however, the timing appears fortuitous.

The numbers

BigCommerce is a SaaS business, meaning that it sells a digital service for a recurring payment. For more on how it derives revenue from customers, head here. For our purposes what matters is that public investors will classify it along with a very popular — today’s trading notwithstanding — market segment.

Starting with broad strokes, here’s how the company performed in 2019 compared to 2018, and Q1 2020 in contrast to Q1 2019:

  • In 2019, BigCommerce’s revenue grew to $112.1 million, a gain of around 22% from its 2018 result of $91.9 million.
  • In Q1 2020, BigCommerce’s revenue grew to $33.2 million, up around 30% from its Q1 2019 result of $25.6 million.

BigCommerce didn’t grow too quickly in 2019, but its Q1 2020 expansion pace is much better. BigCommerce will file an S-1/A with more information in Q2 2020, we expect; it can’t go public without sharing more about its recent financial performance.

If the company’s revenue growth acceleration continues in the most recent period — bearing in mind that e-commerce as a segment has proven attractive to many businesses during the COVID-19 pandemic — BigCommerce’s IPO timing would appear even more intelligent than it did at first blush. Investors love growth acceleration.

Moving from revenue growth to revenue quality, BigCommerce’s Q1 2020 gross margins came in at 77.5%, a solid SaaS result. In Q1 2019 its gross margin was 76.8%, a slightly worse figure. Still, improving gross margins are popular as they indicate that future cash flows will grow at a faster clip than revenues, all else held equal.

In 2018 BigCommerce lost $38.9 million on a GAAP basis. Its net loss expanded modestly to $42.6 million in 2020, a larger dollar figure in gross terms, but a slimmer percent of its yearly top line. You can read those results however you’d like. In Q1 2020, however, things got better, as the company’s GAAP net loss fell to $4 million from its year-ago Q1 result of $10.5 million.

The BigCommerce big commerce business is growing more slowly than I had anticipated, but its overall operational health is better than I expected.

A few other notes, before we tear deeper into its S-1 filing tomorrow morning. BigCommerce’s adjusted EBITDA, a metric that gives a distorted, partial view of a company’s profitability, improved along similar lines to its net income, falling from -$9.2 million in Q1 2019 to -$5.7 million in Q1 2020.

The company’s cash flow is, akin to its adjusted EBITDA, worse than its net loss figures would have you guess. BigCommerce’s operating activities consumed $10 million in Q1 2020, an improvement from its Q1 2019 operating cash burn of $11.1 million.

The company is further in debt than many SaaS companies, but not so far as to be a problem. BigCommerce’s long-term debt, net of its current portion, was just over $69 million at the end of Q1 2020. It’s not a nice figure, per se, but it is one small enough that a good IPO haul could sharply reduce while still providing good amounts of working capital for the business.

Investors listed in its IPO document include Revolution, General Catalyst, GGV Capital, and SoftBank.

#bigcommerce, #fundings-exits, #general-catalyst, #ggv-capital, #saas, #softbank, #startups, #tc

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