Brazil’s idwall raises $38M for identity validation platform

Online fraud and identity theft is a global problem that has only been exacerbated with increased online transactions amid the COVID-19 pandemic. In particular, it is estimated that Brazilian companies lose over $41 billion due to fraud every year.

In an attempt to tackle this problem head on, Lincoln Ando and Raphael Melo started idwall in mid-2016. São Paulo-based idwall started as an automated background check solution and has since grown into a suite of data and identity validation and risk analysis products. For the consumer market, its “MeuID” app is aimed at users who want to change the way they identify themselves and share their data.

And now the Brazilian regtech has raised $38 million in a Series C round led by Endurance.

GGV Capital, monashees, Canary, Qualcomm Ventures, ONEVC, Peninsula and Norte also participated in the funding, bringing its total raised to nearly $50 million.

The company says it has grown 1,458% between 2017 and 2020, with average growth of 144% per year. Its more than 300 clients include 10 unicorns, two out of the three biggest banks in Brazil and companies such as iFood, Claro, Cielo, Loggi, Ebanx, QuintoAndar and OLX, among others.

Fintechs make up a significant portion of its client base, and in 2020, the company saw its revenue from clients in the financial industry alone climb by 588% compared to 2019.

Idwall uses machine learning and AI to automate the onboarding process via its face match, background check, risk analysis, ID validation and automated optical character recognition (OCR) offerings to help companies avoid fraud.

The company said its APIs verify personal documents and information by searching in public and private databases “quickly and pursuant to the compliance rules.” Idwall does all this by first validating that an ID is authentic. Then it works to ensure the person using it is actually the owner of the ID. And lastly, it runs a full background check. It claims it does all this in less than three minutes.

“We help them do all these onboarding processes in a safer, better and faster way,” said idwall co-founder and CEO Ando.

Over the years, idwall has generated more than 65 million data reports for its clients, a number that it says surged by 5,000 times between 2017 and 2020.Those reports, it claims, have helped its clients scale their operations, register more of their own clients and optimize compliance and KYC processes, as well as reduce fraud.

Image Credits: idwall

In general, the pandemic’s drive to digital led to a massive increase in the number of digital bank accounts, mobile payment services and also of companies adjusting to digital platforms and/or expanding their digital operations — leading to a boom in business for idwall.

“The more digitized companies become, the more client expectations grow — and market competition grows stronger,” Ando said. “Our mission is to always stay ahead of innovation in our market, and that’s why we invest so much in growth and in building the best possible team to develop our products.”

Part of that includes using its new capital to recruit more developers, strengthen its existing products and release new ones. Idwall plans to increase its headcount from its current 200 to about 300 over the next few months. The company is also examining the possibility of expanding outside of Brazil to all of Latin America. 

“Many of the identity validation and fraud problems faced in Brazil are seen in other Latin American countries as well,” Ando said. “Besides, places like Mexico and Colombia also have highly innovative companies pushing the envelope when it comes to identity and technology. We still have a lot to achieve in Brazil, but we see a big opportunity for us to take our mission even further.”

Still, in its home country, recent regulatory changes in Brazil in recent years have also led to an increase in demand for idwall’s offerings.

In addition, Brazil’s documentation databases are highly siloed, the company says, with each state having its own model for the most common identity document, the RG (“Registro Geral” or “General Registry”). Plus, each citizen can be issued a different RG document in each state.

“It’s undeniable how much digital onboarding and automated identity validation processes are fundamental for the Latin American market to reach as far as it has the potential to,” Ando said. “It’s extremely difficult to understand and validate identification and personal data in Brazil.”

Also, in general, the company has observed how weary Brazilians are of having to show their IDs for routine events. Idwall helps with that via its aforementioned “MeuID” solution, which stores in a single wallet all the documents necessary for the onboarding processes of fintechs, startups, office buildings and other businesses.

Its investors are, naturally, bullish.

Hans Tung, GGV Capital’s managing partner, describes idwall as a “one-of-a-kind” startup. 

“idwall is leading the discussions and innovations in Brazil regarding digital onboarding and identity validation,” he said. “And their B2C digital identity app MeuID could be the first true super-app in Latin America.”

GGV aims to invest in category leaders that are using technology to create positive impact for its users and for society, Tung added.

“The idwall founders are tackling a huge yet underserved problem in Brazil, and have led the company through terrific growth,” he said. “They have the ingredients to become the leading personal data platform in LatAm for the enterprise.”

Marcos Toledo, managing partner at Canary, notes that idwall was one of his firm’s first investments.

“Lincoln and Raphael’s abilities to build and scale a business solving a very relevant problem in Brazil have caught our attention,” he told TechCrunch. “Their culture, tech level and agility as a company also are very remarkable in the Brazilian market.”

#artificial-intelligence, #brazil, #canary, #colombia, #digital-identity, #ebanx, #economy, #endurance, #finance, #financial-technology, #funding, #fundings-exits, #ggv-capital, #hans-tung, #identity-management, #identity-theft, #identity-verification, #idwall, #ifood, #latin-america, #machine-learning, #managing-partner, #mexico, #ocr, #olx, #onboarding, #online-fraud, #optical-character-recognition, #qualcomm-ventures, #quintoandar, #recent-funding, #regtech, #sao-paulo, #startup, #startups, #tc, #venture-capital

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For Hans Tung, the personal becomes public in a growing campaign to ‘stop Asian hate’

Longtime venture capitalist Hans Tung is a big guy. His size might just be life-saving.

A first-generation Taiwanese-American who came to the U.S. and to Los Angeles specifically, in 1984, it was a fraught time for the then 14-year-old. Two years earlier, a Chinese-American draftsman named Vincent Chin was beaten in Detroit by a Chrysler plant supervisor and his stepson, a laid-off autoworker, who reportedly believed that Chin was of Japanese descent and were angry over the growing success of Japan’s auto industry. Chin, who was attending his own bachelor party the night that he fought off the pair — he was struck repeatedly with a baseball bat — died days later at age 27.

While anti-Asian sentiment may have seemed to lessen over the following decades, it has remained constant, and like countless others, Tung as been on the receiving end of it, he says. “Growing up, I faced my share of taunts, of racial epithets, whether it was in California or Boston or New York.  I’m fortunate that I’m over 6’4″ tall and weigh more than 200 pounds,” or he might be physically harassed at some point, too.

Tung has never been more mindful of his size than now. Even while anti-Asian sentiment never fully dissipated in the U.S., it worsened abruptly last year based on political rhetoric about the coronavirus. “As COVID broke out in China, we knew that Asian Americans would be blamed,” says Tung, who flies back and forth to China routinely for work as a managing director with the cross-border investment firm GGV Capital. “We saw this with SARS, too, but it wasn’t as big a pandemic, so people were being harassed and not killed.”

Anecdotally, Tung believes life is more dangerous right now for Asians in the U.S. based on conversations with friends and family members and the worrisome headlines to emerge of elderly individuals in particular being beaten on the streets of San Francisco and Oakland and on New York subways and outside of Times Square, as happened on Monday when a 65-year-old woman was viscously attacked in a scene that was filmed by an onlooker and has provoked national outrage.

The numbers back him up. From 2019 to 2020, overall hate crime rate declined while hate crimes targeting Asians increased, as first reported by NBC based on analysis released by the Center for the Study of Hate and Extremism at California State University, San Bernardino. Overall, its examination revealed that while such crimes decreased overall by 7 percent last year, those targeting Asian people rose by nearly 150 percent, with the biggest surge in New York, where anti-Asian hate crimes rose from three in 2019 to 28 last year, a 833% increase.

With those numbers seemingly continuing to climb in 2021, Tung and his partners at GGV Capital decided to take action two weeks ago, quickly settling on what they do best, which is to respond to the rising violence with their financial muscle and network.

A first step was publicly offering to match $100,000 in donations to organizations that support the AAPI (Asian American and Pacific Islander) communities. GGV’s move was almost immediately matched by other investors and founders eager to help, including Jeremy Liew of Lightspeed and Eric Kim and Chi-Hua Chien of Goodwater Capital, who also offered to match donations.

Fast forward and Tung says that 11 days into a de facto Twitter campaign, roughly $5 million in donations have now been made by more than 175 founders (including Jen Rubio, Stewart Butterfield, and Eric Yuan) and members of more than 30 venture firms in a kind of partnership that is “rare to see in the VC community,” Tung notes.

It’s a great start, Tung says. At the same time, he notes that the problem is ongoing and that more resources — which everyone is sending on an individual basis to a variety of Asian-American community groups that are dealing with a spiking racism and its implications — are needed. Toward that end, GGV is recommending at least five organizations whose work it believes to be making an impact. These include Asian Americans Advancing Justice, Red Canary Song, GoFundMe Support the AAPI Community, Stop AAPI Hate, and Compassion in Oakland.

Tung takes pains to note that GGV has been active in other campaigns, including AllRaise, the organization that’s bringing more gender equality to investment firms and to the board room. He says that his partners were also highly moved by the Black Lives Matter movement last spring, donating to the NAACP Legal Defense Fund and the Southern Poverty Law Center, among other organizations.

In fact, he says that earlier movements — including an effort by investor Ryan Sarver of Redpoint last year to help both front-line workers and restaurant workers by devising a way for donors to “buy” chef-made meals for hospital staff — have been experiences from which he has learned.

One of those lessons is that when something is close enough to one’s heart, it’s worth the risk of being perceived as a “VC who is showing off” if it moves the needle.

In this case, says Tung, “so many of these crimes are treated as individual incidents and not as hate crimes, which comes with more severe penalties” that he is determined to raise awareness and visibility into the matter, even if it means making himself more vulnerable than he is comfortable.

“When it comes to Asian hate, it’s such a personal matter,” he says.

#anti-asian, #asian-americans-advancing-justice, #compassion-in-oakland, #ggv-capital, #hans-tung, #hate-crimes, #red-canary-song, #stop-aapi-hate, #tc, #venture-capital

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Orca Security raises $210M Series C at a unicorn valuation

Orca Security, an Israeli cybersecurity startup that offers an agent-less security platform for protecting cloud-based assets, today announced that it has raised a $210 million Series C round at a $1.2 billion valuation. The round was led by Alphabet’s independent growth fund CapitalG and Redpoint Ventures. Existing investors GGV Capital, ICONIQ Growth and angel syndicate Silicon Valley CISO Investment also participated. YL Ventures, which led Orca’s seed round and participated in previous rounds, is not participating in this round — and it’s worth noting that the firm recently sold its stake in Axonius after that company reached unicorn status.

If all of this sounds familiar, that may be because Orca only raised its $55 million Series B round in December, after it announced its $20.5 million Series A round in May. That’s a lot of funding rounds in a short amount of time, but something we’ve been seeing more often in the last year or so.

Orca Security co-founders Gil Geron (left) and Avi Shua (right). Image Credits: Orca Security

As Orca co-founder and CEO Avi Shua told me, the company is seeing impressive growth and it — and its investors — want to capitalize on this. The company ended last year beating its own forecast from a few months before, which he noted was already aggressive, by more than 50%. Its current slate of customers includes Robinhood, Databricks, Unity, Live Oak Bank, Lemonade and BeyondTrust.

“We are growing at an unprecedented speed,” Shua said. “We were 20-something people last year. We are now closer to a hundred and we are going to double that by the end of the year. And yes, we’re using this funding to accelerate on every front, from dramatically increasing the product organization to add more capabilities to our platform, for post-breach capabilities, for identity access management and many other areas. And, of course, to increase our go-to-market activities.”

Shua argues that most current cloud security tools don’t really work in this new environment. Many, because they are driven by metadata, can only detect a small fraction of the risks, and agent-based solutions may take months to deploy and still not cover a business’ entire cloud estate. The promise of Orca Security is that it can not only cover a company’s entire range of cloud assets but that it is also able to help security teams prioritize the risks they need to focus on. It does so by using what the company calls its “SideScanning” technology, which allows it to map out a company’s entire cloud environment and file systems.

“Almost all tools are essentially just looking at discrete risk trees and not the forest. The risk is not just about how pickable the lock is, it’s also where the lock resides and what’s inside the box. But most tools just look at the issues themselves and prioritize the most pickable lock, ignoring the business impact and exposure — and we change that.”

It’s no secret that there isn’t a lot of love lost between Orca and some of its competitors. Last year, Palo Alto Networks sent Orca Security a sternly worded letter (PDF) to stop it from comparing the two services. Shua was not amused at the time and decided to fight it. “I completely believe there is space in the markets for many vendors, and they’ve created a lot of great products. But I think the thing that simply cannot be overlooked, is a large company that simply tries to silence competition. This is something that I believe is counterproductive to the industry. It tries to harm competition, it’s illegal, it’s unconstitutional. You can’t use lawyers to take your competitors out of the media.”

Currently, though, it doesn’t look like Orca needs to worry too much about the competition. As GGV Capital managing partner Glenn Solomon told me, as the company continues to grow and bring in new customers — and learn from the data it pulls in from them — it is also able to improve its technology.

“Because of the novel technology that Avi and [Orca Security co-founder and CPO] Gil [Geron] have developed — and that Orca is now based on — they see so much. They’re just discovering more and more ways and have more and more plans to continue to expand the value that Orca is going to provide to customers. They sit in a very good spot to be able to continue to leverage information that they have and help DevOps teams and security teams really execute on good hygiene in every imaginable way going forward. I’m super excited about that future.”

As for this funding round, Shua noted that he found CapitalG to be a “huge believer” in this space and an investor that is looking to invest into the company for the long run (and not just trying to make a quick buck). The fact that CapitalG is associated with Alphabet was obviously also a draw.

“Being associated with Alphabet, which is one of the three major cloud providers, allowed us to strengthen the relationship, which is definitely a benefit for Orca,” he said. “During the evaluation, they essentially put Orca in front of the security leadership at Google. Definitely, they’ve done their own very deep due diligence as part of that.”

#alphabet, #analytics, #axonius, #capitalg, #cloud, #cybersecurity-startup, #enterprise, #ggv-capital, #identity-access-management, #orca-security, #recent-funding, #redpoint-ventures, #security, #startups, #tc, #yl-ventures

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China’s Black Lake raises $77M to give factories a digital upgrade

Zhou Yuxiang doesn’t have the typical profile for working in China’s manufacturing world. A soft-spoken yet incisive person in his early thirties, Zhou graduated from Dartmouth College with a degree in government and went on to work in investment banking in Hong Kong, following the path of many Chinese overseas returnees.

But a few years into his career, Zhou realized he wanted to build his own business. This was around 2015, a time when China was consumed by a startup craze amid Premier Li Keqiang’s campaign for “mass entrepreneurship and innovation.” Rather than going into the sleek world of consumer lifestyle, fintech or AI, Zhou picked manufacturing as a starting point.

During his time at Barclays, Zhou helped deep-pocketed Chinese manufacturers scour for merger and acquisition deals in Europe. He saw how factories in Germany digitize their operations using Siemens and SAP solutions. In China, “factories had a lot of money and could buy top-of-the-line equipment. But on the software management front, they were still very primitive,” said Zhou in an interview with TechCrunch.

“Most of the operation was done on paper. Every day, workers received a stack of papers telling them what to do, and in turn, they filled up the sheets reporting what material they had used… When you acquire these financially underperforming factories in Europe, you realize their software infrastructure capabilities are still far superior to yours,” Zhou added.

That digital gap encouraged Zhou to start Black Lake, a software platform for factory workers to log their daily tasks and managers to oversee the plant floor. Since its inception in 2016, the startup has raised over $100 million from GGV Capital, Bertelsmann Asia Investments, GSR Ventures, ZhenFund and others. The company recently closed a Series C round, pocketing nearly 500 million yuan ($77 million) and bringing on new backers including Singapore’s sovereign wealth fund Temasek, who led the round, as well as China Renaissance and Lightspeed Venture Partners.

Black Lake’s vision is to be a one-stop collaboration platform for factory workers and managers, digitizing data incurred in all stages of production, from client orders, material procurement, quality compliance, warehouse management, to logistics and shipment. The software analyzes these reams of data, churning out reports for bosses to check for abnormalities in production and for workers to see how they could increase their output and income.

Compared to SaaS incumbents from the West, Black Lake’s more localized services and affordable prices have a greater appeal to China’s wide swathes of small and medium-sized factories, Zhou argued. Black Lake tries to simplify its user experience to a Lego-like building process so factory bosses can easily customize the software for their own use. Workers access the cloud-based software from their smartphones, which have become ubiquitous in China’s affluent cities thanks to increasingly friendly device prices and data fees. A foreign SaaS giant’s solution could cost a factory at least three million yuan a year, while Black Lake charges 300,000 yuan or less, Zhou said.

To date, the company has served nearly 2,000 manufacturers and suppliers across the Greater China Region and Southeast Asia, counting in its customers Tesla, L’Oréal, Xiaomi, Sinopec, and Chinese state-owned conglomerate China Resources’ pharmaceutical group. In all, the company claims to have reached 500,000 production workers.

Manufacturing 2.0

Black Lake’s collaboration and data management software for factories

Black Lake is riding a perfect wave of “upgrading” in China’s manufacturing world. For one, the demand for customized products is rising as consumers become savvier. Instead of producing bottled water with the same packaging, for instance, beverage companies now design various looks tailored to different demographics. Factories need to adjust quickly to the flood of customized orders, and a cloud-based data management platform could be the solution, Zhou suggested.

The U.S.-China trade war is another impetus for China’s push for factory upgrade. Having felt the heat from trade sanctions, Chinese manufacturers look to cut expenses and improve productivity. That shift, along with the government’s “new infrastructure” policy to breathe high tech into traditional industries, makes Zhou all the more bullish about his business.

But Black Lake is certainly not the only one to have spotted opportunities in China’s efforts to modernize production, and enterprise software in China has a notoriously slow monetization cycle in part due to low adoption and companies’ reluctance to pay for services. The key is finding a viable business model to fund its dream to be the ultimate “data entry point” for China’s millions of factories.

With proceeds from its new funding, Black Lake plans to spend on product development, hiring, market expansion, and building an open platform for third-party developers. The startup realizes it can’t build everything factories need, and it’s already working with partners across telecommunications, cloud computing, automation and consulting, such as Huawei, Alibaba, SAP and McKinsey.

“When Chinese factories ‘wake up’, their speed of digitization will definitely leapfrog that of their American and European counterparts,” Zhou asserted.

#asia, #black-lake, #china, #funding, #ggv-capital, #manufacturing, #saas, #tc, #temasek

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Proving voicemail doesn’t have to be wack, the Slack-backed startup Yac raises $7.5 million

Yac, the Orlando, Fla.-based startup that’s digitizing voice messages for remote offices, has raised $7.5 million in a new round of funding.

The company’s service has garnered enough attention to pick up a pretty sizable new round from investors led by GGV Capital and a return investment from the Slack Fund.

Apparently, reinventing voicemail is a multi-million dollar endeavor.

“The future of meetings will be asynchronous, in your ears and hands free,” says Pat Matthews, the chief executive and founder of Active Capital, when the company announced its seed round nearly a year ago.

Co-founded by Justin Mitchell, Hunter McKinley and Jordan Walker, Yac was spun out of the digital agency SoFriendly, and was developed as a pitch for Product Hunt’s Maker Festival. The voice messaging service won that startup competition at the event and attracted the interest of Boost VC and its founder, the third-generation venture capitalist Adam Draper.

About six months after that seed round, Yac received outreach from Slack thanks to a referral from another entrepreneur. Throughout their negotiations last year, the teams used Yac to conduct due diligence, according to Mitchell. At the time of the company’s August announcement that Slack had come on to finance the company, Yac had a bit over 5,000 users on its service and charges per seat, in the same way Slack does.

 

#active-capital, #adam-draper, #entrepreneur, #florida, #ggv-capital, #groupware, #operating-systems, #orlando, #product-hunt, #slack, #slack-fund, #software, #tc, #yac

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K Health expands into virtual childcare and raises $132 million at a $1.5 billion valuation

K Health, the virtual health care provider that uses machine learning to lower the cost of care by providing the bulk of the company’s health assessments, is launching new tools for childcare on the heels of raising cash that values the company at $1.5 billion.

The $132 million round raised in December will help the company expand and help pay for upgrades including an integration with most electronic health records — an integration that’s expected by the second quarter.

Throughout 2020 K Health has leveraged its position operating at the intersection of machine learning and consumer healthcare to raised $222 million in a single year.

This appetite from investors shows how large the opportunity is in consumer healthcare as companies look to use technology to make care more affordable.

For K Health, that means a monthly subscription to its service of $9 for unlimited access to the service and physicians on the platform, as well as a $19 per-month virtual mental health offering and a $19 fee for a one-time urgent care consultation.

To patients and investors the pitch is that the data K Health has managed to acquire through partnerships with organizations like the Israel health maintenance organization Maccabi Healthcare Services, which gave up decades of anonymized data on patients and health outcomes to train K Health’s predictive algorithm, can assess patients and aid the in diagnoses for the company’s doctors.

In theory that means the company’s service essentially acts as a virtual primary care physician, holding a wealth of patient information that, when taken together, might be able to spot underlying medical conditions faster or provide a more holistic view into patient care.

For pharmaceutical companies that could mean insights into population health that could be potentially profitable avenues for drug discovery.

In practice, patients get what they pay for.

The company’s mental health offering uses medical doctors who are not licensed psychiatrists to perform their evaluations and assessments, according to one provider on the platform, which can lead to interactions with untrained physicians that can cause more harm than good.

While company chief executive Allon Bloch is likely correct in his assessment that most services can be performed remotely (Bloch puts the figure at 90%), they should be performed remotely by professionals who have the necessary training.

There are limits to how much heavy lifting an algorithm or a generalist should do when it comes to healthcare, and it appears that K Health wants to push those limits.

“Drug referrals, acute issues, prevention issues, most of those can be done remotely,” Bloch said. “There’s an opportunity to do much better and potentially cheaper. 

K Health has already seen hundreds of thousands of patients either through its urgent care offering or its subscription service and generated tens of millions in revenue in 2020, according to Bloch. He declined to disclose how many patients used the urgent care service vs. the monthly subscription offering.

Telemedicine companies, like other companies providing services remotely, have thrived during the pandemic. Teladoc and Amwell, two of the early pioneers in virtual medicine have seen their share prices soar. Companies like Hims, that provide prescriptions for elective conditions that aren’t necessarily covered by health, special purpose acquisition companies at valuations of $1.6 billion.

Backing K Health are a group of investors led by GGV Capital and Valor Equity Partners. Kaiser Permanente’s pension fund and the investment offices of the owners of 3G Capital (the Brazilian investment firm that owns Burger King and Kraft Heinz), along with 14W, Max Ventures, Pico Partners, Marcy Venture Partners, Primary Venture Partners and BoxGroup, also participated in the round. 

Organizations working with the company include Maccabi Healthcare; the Mayo Clinic, which is investigating virtual care models with the company; and Anthem, which has white labeled the K Health service and provides it to some of the insurer’s millions of members.

#articles, #boxgroup, #burger-king, #drug-discovery, #ggv-capital, #health, #healthcare, #healthcare-industry, #israel, #k-health, #kaiser-permanente, #kraft, #machine-learning, #max-ventures, #mayo-clinic, #pharmaceutical, #primary-care, #primary-venture-partners, #tc, #technology, #teladoc-health, #telehealth, #telemedicine, #valor-equity-partners

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5 consumer hardware VCs share their 2021 investment strategies

Consumer hardware has always been a tough market to crack, but the COVID-19 crisis made it even harder.

TechCrunch surveyed five key investors who touch different aspects of the consumer electronics industry, based on our TechCrunch List of top VCs recommended by founders, along with other sources.

We asked these investors the same six questions, and each provided similar thoughts, but different approaches:

Despite the pandemic, each identified bright spots in the consumer electronic world. One thing is clear, investors are generally bullish on at-home fitness startups. Multiple respondents cited Peloton, Tonal and Mirror as recent highlights in consumer electronics.

Said Shasta Venture’s Rob Coneybeer, “With all due respect to my friends at Nest (where Shasta was a Series A investor), Tonal is the most exciting consumer connected hardware company I’ve ever been involved with.”

Besides asking about the trends and opportunities they’re pursuing in 2021, the investors we spoke to also identified other investors, founders and companies who are leaders in consumer hardware and shared how they’ve reshaped their investment strategies during the pandemic. Their responses have been edited for space and clarity.


Hans Tung, GGV Capital

Which consumer hardware sector shows the most promise for explosive growth?

For consumer hardware, offering end users a differentiated experience is extremely important. Social interactions, gamification and high-quality PGC (professionally generated content) such as with Peloton, Xiaomi and Tonal is a must to drive growth. It’s also easy to see how the acceleration of the digital economy created by COVID-19 will also drive growth for hardware.

First, services improved by the speed and reliability of 5G such as live streaming, gaming, cloud computing, etc. will create opportunity for new mobile devices and global mass market consumers will continue to demand high-quality, low-cost hardware. For example, Arevo is experimenting with “hardware as a service” with a 3D printing facility in Vietnam.

For enterprise hardware, security, reliability and fast updates are key competitive advantages. Also as a result of 5G… manufacturing automation and industrial applications. Finally IoT for health and safety may find its sweet spot thanks to COVID-19 with new wearables that track sleep, fitness and overall wellness.

How did COVID-19 change consumer hardware and your investment strategy?

One opportunity for consumer hardware companies to consider as a result of COVID-19 is how they engage with their customers. They should think of themselves more like e-commerce companies, where user experience, ongoing engagement with the consumer and iteration based on market feedback rule the day. While Peloton had this approach well before COVID, it has built a $46 billion company thinking about their products in this way.

For example, some consumers felt the bike was too expensive so instead of responding with a low-end product, the company partnered with Affirm to make their hardware more affordable with pay-as-you-go plans. A Peloton bike is not a one-and-done purchase; there is constant interaction between users, and the company that drives more satisfaction in the hardware adds more value in the business.

Entering 2021, in what way is hardware still hard?

Hardware is still hard because it takes more to iterate fast. The outcome for competitors relative to speed-to-market can be dramatic. For example, every year I look at future generation of EVs with lots of innovations and cool features from existing OEMs but see very few of these making it to market compared to Tesla and other pure players that are cranking out vehicles. Their speed of execution is impressive.

Who are some leaders in consumer hardware — founders, companies, investors?

  • John Foley, founder and CEO of Peloton. John and the Peloton team have cracked the code on the integration of community experience and hardware.
  • Sonny Vu, founder of Misfit and founder/CEO of Arevo, maker of ultrastrong, lightweight continuous carbon fiber products on demand. Experienced founder and team with 3D printing manufacturing know-how at scale are now able to offer breakthrough consumer and industrial products at competitive prices.
  • Manu Jain, head of Xiaomi’s business in India where Xiaomi is the #1-selling smart phone. He built the Indian operation from the ground up; had zero dollar marketing budget for the first three years; and localized manufacturing for all Xiaomi phones sold in India.
  • Jim Xiao, founder and CEO of Mason, a rising star who is creating “mobile infrastructure as a service.”
  • Irving Fain, founder and CEO of Bowery Farming. Irving and his team are on a mission to reimagine modern farming.

Is there anything else you would like to share with TechCrunch readers?

Worry less about trends and build products that resonate with customers.

 

Dayna Grayson, Construct Capital

#construct-capital, #consumer-electronics, #consumer-electronics-show, #consumer-hardware, #covid-19, #cyril-ebersweiler, #dayna-grayson, #ggv-capital, #hans-tung, #hardware, #health, #lux-capital, #rob-coneybeer, #shasta-ventures, #sosv, #tc, #venture-capital, #wearable-devices

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Vision Fund backs Chinese fitness app Keep in $360 million round

As Chinese fitness class provider Keep continues to diversify its offerings to include Peloton-like bikes, health-conscious snacks among other things, it’s bringing in new investors to fund its ambitions.

On Monday, Keep said it has recently closed a Series F financing round of $360 million led by SoftBank Vision Fund. Hillhouse Capital and Coatue Management participated in the round, as well as existing investors GGV Capital, Tencent, 5Y Capital, Jeneration Capital and Bertelsmann Asia Investments.

The latest fundraise values the six-year-old startup at about $2 billion post-money, people with knowledge told TechCrunch. Keep said it currently has no plans to go public, a company spokesperson told TechCrunch.

Keep started out in 2014 by providing at-home workout videos and signed up 100 million users within three years. As of late, it has served over 300 million users, the company claims. It has over time fostered an ecosystem of fitness influencers who give live classes to students via videos, and now runs a team of course designers, streaming coaches and operational staff dedicated to its video streaming business.

The company said its main revenue driver is membership fees from the 10 million users who receive personalized services. It’s also expanding its consumer product line. Last year, for instance, the firm introduced an internet-connected stationary bike that comes with video instructions like Peloton . It’s also rolled out apparel, treadmills and smart wristbands.

The company launched foreign versions of its Keep app in 2018 as it took aim at the overseas home fitness market. It was posting diligently on Western social networks including Instagram, Facebook and Twitter up until the spring of 2019.

According to Keep, the purpose of the latest funding is to let it continue doing what it has focused on in recent years: improving services and products for users and serving fitness professionals against a backdrop of the Chinese government’s campaign for “national fitness.”

“We believe fitness has become an indispensable part of Chinese people’s everyday life as their income rises and health awareness grows,” said Eric Chen, managing partner at SoftBank Vision Fund .

 

#5y-capital, #asia, #china, #coatue-management, #fitness, #funding, #ggv-capital, #health, #hillhouse-capital, #keep, #peloton, #softbank, #softbank-vision-fund, #tencent

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Fairmarkit lands $30M Series B to modernize procurement

As the pandemic has raged on, it has shined a spotlight on the importance of procurement, especially in certain sectors. Fairmarkit, a Boston startup, is working to bring a modern digital procurement system to the enterprise. Today, the company announced a $30 million Series B.

GGV Capital and Insight Partners led the round with help from existing investors 1984 VC, NewStack and NewFund. Today’s investment brings the total raised to $42 million, according to the company.

Fairmarkit wants to replace large procurement software systems from companies like Oracle and SAP that have been around for decades, says company co-founder and CEO Kevin Frechette. When he looked around a couple of years ago, he saw a space fully of these legacy vendors and ripe for disruption.

What’s more, he says that these systems have been designed to track only the biggest purchases over $500,000 or $1 million. Anything under that is what’s known as tail spend. “So procurement really focuses on companies’ biggest purchases, say things over a million, but anything under that size just gets forgotten about and neglected. It’s called tail spend, and it’s still 80% of what they buy, 80% of their vendors and 20% of the budget,” he told me.

This spending accounts for billions of dollars, yet Frechette says, it has lacked a good tracking system. He saw an opportunity, and he and his co-founders built a solution. Its first customer was the MBTA, Boston’s mass transit system (a system that could use all the help it can get in terms getting more efficient). Today the company has more than 50 customers across a variety of industries.

The system acts as a marketplace for vendors and a central buying system for customers where they can find goods and services at this price point below $1 million. It imports a customer’s vendor data, and then combines this with other data to build a huge database of buying information. From that, they can determine what a customer needs and using AI, find the best prices for a particular order.

Frechette says this not only provides a way to save money — he says customers have been able to cut purchase costs by 10% with his system — it also provides a way to surface diverse vendors, whether that’s businesses owned by women, people of color, veterans, local business or however you define that.

He says too often what happens is that these deals aren’t put under typical procurement department scrutiny and they just get passed through, but Fairmarkit helps surface these companies and give them a shot at the business. “So because the core of our technology is a vendor recommendation engine […], we can help to invite those diverse vendors and really just give them a fair shot,” he said.

The company started the year with 40 employees and have added 30 since. The plan is to double that number next year, and as they do, they want to reflect the diversity they are able to surface in the service in the company’s employees.

“It’s really just keeping it at the forefront. We want to make sure that we’re not just doing surveys around how we are doing for diversity and inclusion, but we’re putting programs in place to help out with it. It’s something I’m very very passionate about because it’s been such a sticking point as well on how we’re helping diverse vendors,” he said.

Frechette says that he has managed to grow the company and build a culture in spite of the pandemic not allowing employees to come into an office. He doesn’t see a world where the office will be a requirement in the future.

“We’ve hit an inflection point this year where there’s no world where we need everyone to be in an office […], which once again only helps to accelerate our business because we’re not constricted by everyone in this one small [geographical] sector. We can operate across the board [from anywhere],” he said.

#artificial-intelligence, #cloud, #enterprise, #funding, #ggv-capital, #insight-partners, #procurement, #purchasing, #recent-funding, #startups, #tc

0

Orca Security raises $55M for its cloud-native security platform

Israeli cloud security firm Orca Security today announced a $55 million Series B funding round led by ICONIQ Growth. Previous investors GGV Capital, YL Ventures and Silicon Valley CISO Investments also participated in the round, which brings the company’s total funding to date to $82 million. This includes Orca’s $20.5 million Series A round, which it announced in May.

What makes Orca stand out is not just its focus on cloud-native technologies but what it calls its SideScanning technology. This enables it to map a company’s cloud environment and reconstruct its file system by looking at how workloads interact with the block storage services they use. Based on this, in combination with the cloud metadata it collects, it can map and scan a company’s entire data estate and its cloud assets — and find potential security issues. Because of this system, Orca also immediately discovers new hosts in the cloud without anybody having to maintain this part of the system.

This means the system can work without any agents, too, and hence without introducing any additional overhead into the existing systems. That, Orca Security CEO Avi Shua argues, wouldn’t have been possible in an on-premises setting.

“The way it works is that — without installing any agents or running anything on the environment — it reads the block storage of your flow from the side to deduce the risk and it builds maps of your environment so you can see it in context,” Shua, who spent 11 years working at Check Point before launching Orca, explained. “Both of these things simply were not possible in the on-premise environment because you need to install agents to see. And when you install an agent, it sees the tree, it doesn’t see the forest. It isn’t able to understand where traffic comes from, it doesn’t understand that if it sees a key, what that key opens.”

Orca Security Team

Orca Security Team

He also noted that Orca wants to be as comprehensive as possible so that companies don’t have to use different tools for detecting misconfigurations, malware, vulnerabilities, etc. The company also aims to make the process of getting started with its technology frictionless. Indeed, Shua argues that the Achilles heel of the whole industry is that companies get to maybe 50 percent of coverage if they work hard, but then hit a brick wall because deploying a lot of security tools can be quite hard. “Usually people are not getting breached because the walls are not high enough but because they are not covering the thing that they’re trying to protect,” Shua said.

Orca also aims to provide security practitioners with relevant alerts based on the context of the exposure and business impact. A company may be running a lot of software that is vulnerable to remote code execution in the NTP service, for example. But the environment doesn’t expose NTP and it’s blocked by default in all of the company’s security groups, so while this may look like a major vulnerability in the overall stack, it doesn’t actually represent a real risk. Shua told me of a customer who, after installing Orca, found more than a million critical issues. The company’s tools helped the security team reduce those to 33 that it should focus on.

“The common denominator amongst just about every company we see is that the solutions are very complex — the problems they’re trying to solve are complex and the solutions tend to be complex,” GGV Capital managing partner Glenn Solomon told me. “One of the amazing things about Orca is — and I think that this is a result of Avi and Gil [Geron] and the rest of the co-founders having a lot of experience at Check Point — they understood from day one like that a big part of the value here is being able to install and just provide value really quickly and seamlessly.”

The service currently supports AWS, Google Cloud Platform and Microsoft Azure and their various container services.

Image Credits: Orca Security

Clearly, Orca has hit on a winning formula here. Shua tells me that the company grew more than 10x this year already and instead of growing the team to about 50 employees, it’s already at 70 now. At one point this summer, simply scheduling a call with a salesperson at Orca could take three weeks. Given this, it’s maybe no surprise that Orca wanted to raise to continue to accelerate this growth (and that VCs would want to put more money into the company).

“This massive $55 million round will really help propel Orca to cloud security dominance,” YL Ventures managing partner Yoav Leitersdorf told me. “Already year-over-year growth is stunning — higher than anything I’ve ever seen — literally hundreds of percent. They are incredibly unique in the market with their SideScanning technology.”

The company plans to use the new funding to increase continue building out its product and increase its sales and marketing efforts. In addition, Orca plans to increase its R&D efforts and open a number of new sales offices around the world.

#business, #cloud, #finance, #ggv-capital, #investment, #orca-security, #security, #silicon-valley-ciso-investments, #yl-ventures

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Wish wants to be the Amazon for the rest of us; will retail investors buy it?

Most people know Wish as a site that sells throwaway doodads from China, but in anticipation of its impending IPO, the ten-year-old, San Francisco-based company has begun portraying itself as a kind of Amazon for the rest of us.

Judging by what we’ve read and heard from sources in recent months, Wish wants to paint itself as a patriotic alternative to the trillion-dollar juggernaut and is positioning itself as the better option for the estimated 60% of families in the U.S. without enough liquid savings to get through three months of expenses. Such cost-conscious customers can’t afford Amazon Prime and are — at least in Wish’s telling — willing to wait an extra week or three for a product if it means paying considerably less for it.

We’ll know soon enough if public market investors buy the pitch. Wish registered plans this morning to sell 46 million shares at between $22 an $24 per share in an offering that’s expected to take place next week. The current range would value Wish at up to $14 billion, up from the $11.2 billion valuation it was last assigned by its private investors.

Wish has a lot of reasons to feel optimistic about its story heading into the offering. For one thing, people are clearly still discovering its business. According to Sensor Tower, Wish’s mobile shopping app was downloaded 9 million times last month, compared with the 6 million downloads that Amazon’s shopping app saw and the 2 million downloads seen by Walmart. In 2019, across all types of apps, Wish was the 16th most downloaded app.

There’s a lot to discover once potential customers do check out Wish. According to the company’s prospectus, its more than 100 million monthly active users across more than 100 countries are now shopping from 500,000 merchants that are selling approximately 150 million items on the platform.

While many of these are the nonessential tchotchkes that Wish has long been identified with, from tattoo kits to pet nail trimmers, a growing percentage of the mix also includes essential goods like paper towels and disinfectants — the kinds of items that keep customers coming back in reliable fashion.

It’s a bit of an evolution for the company, whose early focus was almost exclusively on cheap items that didn’t weigh much. First, Wish has always worked with unbranded merchants, mostly in China, that don’t have marketing costs built into the products and like the platform because it enables them to reach new customers for free without cannibalizing their existing market.

But Wish — which takes 15% of each transaction —  had also been relying heavily on a partnership with the USPS and China called ePacket that long enabled it to send items overseas to the U.S. for $1 to $2 as long as the items weren’t unusually large or heavy. Yet that changed on July 1, with a new USPS pricing structure that now requires companies like Wish to pay more to ship their goods or else move to more costly commercial networks.

Unsurprisingly, Wish had back-up plans. One of these has involved packing together multiple orders in China based on customers’ locations, then sending them in bulk to the U.S. to a designated location where they can be picked up.

Relatedly, dating back to early 2019, Wish began partnering with what are now tens of thousands of small businesses in the U.S. and Europe that stock its products, trading their storage space for access to Wish’s customers along with a small financial bonus for every in-store pickup. (Wish will pay store owners even more if they can deliver orders directly to customers’ homes.) According to Forbes, these partnerships provided Wish with an “inexpensive distribution network practically overnight.”

It happens to fit neatly into a larger anti-Amazon narrative wherein the Goliath (Amazon), unable to disrupt convenience stores, is now trying to supplant them with its own branded convenience shops, while Wish may be helping them prosper.

It is also a very asset-lite model compared with Amazon. Wish doesn’t hold inventory; it also doesn’t have to buy or maintain a fleet of planes or trucks or warehouses.

None of these developments completely counter the challenges that unprofitable Wish is still facing, beginning with its scale, which remains tiny compared with the towering giants it faces.

While the company is showing moderate revenue growth, its filings also show steady losses owing in part to its marketing spend. (In 2019, Wish reported revenue of $1.9 billion, up 10% year over year, but it saw a net loss of $136 million.)

The company has been making inroads into new geographies around the world, but it is still heavily dependent on China-based merchants. To address this, it has reportedly begun partnering increasingly with more U.S.- and Europe-based retailers, including those with overstocked or returned items that big retailers are looking to offload, along with those looking to sell refurbished electronics. “We’d love to diversify,” Szulczewski told Forbes this summer.

Wish has always been plagued by quality control issues, too, which it has yet to fully resolve. In fact, there are YouTube channels — some very funny —  focused entirely around what Wish products look like in reality versus how they are presented to shoppers online. (See below.)

Largely, it’s a cultural issue. For example, at a 2016 event hosted by this editor, cofounder and CEO Peter Szulczewski talked about having to educate Chinese merchants about American customers’ expectations.

“It’s true that consumer expectations in China are very different,” Szulczewski explained at the time. “Like, if you order a red sweater and you get a blue one, [shoppers are] like, ‘Eh, next time.’ So we have a lot of merchants that have only sold to Chinese consumers and we have to educate them that it’s not okay to ship a blue sweater because you don’t have any red sweaters in stock.”

Wish has been working to close the gap, as well as to tackle outright fraud on the platform. Just one of many moves has involved hiring a former community manager at Facebook as its own director of community engagement, a task that reportedly involves organizing Wish users to weed out bad apples. But Wish has surely lost plenty of shoppers burned by their experience along the way.

In the meantime, plenty of public market investors will be watching and waiting. So will the venture capitalists who have provided the company with $2.1 billion in funding over the years, including Formation 8, Third Point Ventures, GGV Capital, Raptor Group, Legend Capital, IDG Capital, DST Global, 8VC, 137 Ventures and Vika Ventures.

For her part, Anna Palmer of Boston-based Flybridge Capital Partners — who does not have a stake in Wish but who is focused very much on so-called commerce 3.0 — thinks that Wish “serves a different use case and a different customer need” than the Amazon shopper.

“If you look at the strong retail performance of the off-price and discount market —  think of retailers like Dollar General and Dollar Tree — it bodes well for the continued growth of Wish, especially since the discount market has been a tough one to bring online because of the additional logistics costs involved.”

#amazon, #e-commerce, #ecommerce, #flybridge-capital-partners, #formation-8, #ggv-capital, #ipo, #peter-szulczewski, #tc, #wish

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India’s insurance platform Turtlemint raises $30 million

Turtlemint, an Indian startup that is helping consumers identify and purchase the most appropriate insurance policies for them, has raised $30 million in a new financing round as it looks to reach more users in small cities and towns in the world’s second largest internet market.

The new round, the five-year-old Mumbai-headquartered startup’s Series D, was led by GGV Capital . American Family Ventures, MassMutual Ventures and SIG, and existing investors Blume Ventures, Sequoia Capital India, Nexus Venture Partners, Dream Incubator and Trifecta Capital also participated in the round, which brings Turtlemint’s total to-date raise to $55 million.

Only a fraction of India’s 1.3 billion people currently have access to insurance. Insurance products had reached less than 3% of the population as of 2017, according to rating agency ICRA. An average Indian makes about $2,100 a year, according to the World Bank. ICRA estimated that of those Indians who had purchased an insurance product, they were spending less than $50 on it in 2017.

A range of startups in India are trying to disrupt this market. Analysts at Goldman Sachs estimated the online insurance market in India — which in recent years has attracted several major giants including Amazon and Paytm — to be worth $3 billion in a report they recently sent to clients.

Another major reason why existing insurance firms are struggling to sell to consumers is because they are too reliant on on-ground advisors.

Turtlemint co-founders Anand Prabhudesai (left) and Dhirendra Mahyavanshi pose for a picture (Turtlemint)

Instead of bypassing these advisors, Turtlemint is embracing them. It works with over 100,000 such agents, equipping them with digital tools to offer wider and more relevant recommendations to consumers and speed-up the onboarding process, which has traditionally required a lot of paperwork.

These advisors, who continue to command over 90% of all insurance sales in the country, “play a critical role in bridging the gap in tier 2 and 3 towns and cities, where low physical presence of insurance companies greatly impacts seamless access to insurance products and information,” the startup said.

Turtlemint works with over 40 insurance companies in India and serves as a broker, charging these firms a commission for policies it sells. The startup said it has amassed more than 1.5 million customers.

“By developing products for the micro-entrepreneurs and the rising middle class, Turtlemint has an opportunity to have a positive impact on India’s economy,” said Hans Tung, Managing Partner at GGV Capital, in a statement. “Dhirendra, Anand, and their team built an incredible platform that enables over 100,000 mom-and-pop financial advisors to serve consumers’ best interests with digital tools, helping middle-class families in India get insured with the best products available.”

In an interview with TechCrunch, Turtlemint co-founder Anand Prabhudesai said the startup will deploy the fresh capital to grow its network of advisors and improve its technology stack to further improve the experience for consumers. The startup today also offers training to these advisors and has built tools to help them digitally reach potential customers.

“Continuous education is a very important aspect of being a successful financial entrepreneur. To this end, we have created an online education product with a wide range of courses on financial products, advice-based sales techniques and other soft skills. Our content is now available in seven regional languages and over 20,000 learners are active each month on our edtech platform. A lot of these are first-time advisors who are taking their first steps towards starting their advisory business. Our target is to create a million successful financial entrepreneurs over the next 3-5 years,” he said.

#american-family-ventures, #apps, #asia, #blume-ventures, #dream-incubator, #finance, #funding, #ggv-capital, #india, #massmutual-ventures, #nexus-venture-partners, #payments, #sequoia-capital-india, #sig

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Avo raises $3M for its analytics governance platform

Avo, a startup that helps businesses better manage their data quality across teams, today announced that it has raised a $3 million seed round led by GGV Capital, with participation from  Heavybit, Y Combinator and others.

The company’s founder, Stefania Olafsdóttir, who is currently based in Iceland, was previously the head of data science at QuizUp, which at some point had 100 million users around the world. “I had the opportunity to build up the Data Science Division, and that meant the cultural aspect of helping people ask and answer the right questions — and get them curious about data — but it also meant the technical part of setting up the infrastructure and tools and pipelines, so people can get the right answers when they need it,” she told me. “We were early adopters of self-serve product analytics and culture — and we struggled immensely with data reliability and data trust.”

Image Credits: Avo

As companies collect more data across products and teams, the process tends to become unwieldy and different teams end up using different methods (or just simply different tags), which creates inefficiencies and issues across the data pipeline.

“At first, that unreliable data just slowed down decision making, because people were just like, didn’t understand the data and needed to ask questions,” Olafsdóttir said about her time at QuizUp. “But then it caused us to actually launch bad product updates based on incorrect data.” Over time, that problem only became more apparent.

“Once organizations realize how big this issue is — that they’re effectively flying blind because of unreliable data, while their competition might be like taking the lead on the market — the default is to patch together a bunch of clunky processes and tools that partially increase the level of liability,” she said. And that clunky process typically involves a product manager and a spreadsheet today.

At its core, the Avo team set out to build a better process around this, and after a few detours and other product ideas, Olafsdóttir and her co-founders regrouped to focus on exactly this problem during their time in the Y Combinator program.

Avo gives developers, data scientists and product managers a shared workspace to develop and optimize their data pipelines. “Good product analytics is the product of collaboration between these cross-functional groups of stakeholders,” Olafsdóttir argues, and the goal of Avo is to give these groups a platform for their analytics planning and governance — and to set company-wide standards for how they create their analytics events.

Once that is done, Avo provides developers with typesafe analytics code and debuggers that allows them to take those snippets and add them to their code within minutes. For some companies, this new process can help them go from spending 10 hours on fixing a specific analytics issue to an hour or less.

Most companies, the team argues, know — deep down — that they can’t fully trust their data. But they also often don’t know how to fix this problem. To help them with this, Avo also today released its Inspector product. This tool processes event streams for a company, visualizes them and then highlights potential errors. These could be type mismatches, missing properties or other discrepancies. In many ways, that’s obviously a great sales tool for a service that aims to avoid exactly these problems.

One of Avo’s early customers is Rappi, the Latin American delivery service. “This year we scaled to meet the demand of 100,000 new customers digitizing their deliveries and curbside pickups. The problem with every new software release was that we’d break analytics. It represented 25% of our Jira tickets,” said Rappi’s head of Engineering, Damian Sima. “With Avo we create analytics schemas upfront, identify analytics issues fast, add consistency over time and ensure data reliability as we help customers serve the 12+ million monthly users their businesses attract.”

As most startups at this stage, Avo plans to use the new funding to build out its team and continue to develop its product.

“The next trillion-dollar software market will be driven from the ground up, with developers deciding the tools they use to create digital transformation across every industry. Avo offers engineers ease of implementation while still retaining schemas and analytics governance for product leaders,” said GGV Capital Managing Partner Glenn Solomon. “Our investment in Avo is an investment in software developers as the new kingmakers and product leaders as the new oracles.”

#avo, #cloud, #data-quality, #enterprise, #ggv-capital, #recent-funding, #startups, #tc, #y-combinator

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Merico raises $4.1M for its developer analytics platform

Merico, a startup that gives companies deeper insights into their developers’ productivity and code quality, today announced that it has raised a $4.1 million seed round led by GGV Capital with participation from Legend Star and previous investor Polychain Capital. The company was originally funded by the open source-centric firm OSS Capital.

“The mission of Merico is to empower every developer to build better and realize more value. We are excited that GGV Capital and our other investors see the importance of bringing more useful data to the software development process,” said Merico founder and CEO Jinglei Ren. “in today’s world, enabling remote contribution is more important than ever, and we at Merico are excited to continue our pursuit of bringing the most insightful and practical metrics to support both enterprise and open-sourcee software teams.”

Merico head of business development Maxim Wheatley tells me that the company plans to use the new funding to enhance and expand its existing technology and marketing efforts. As a remote-first startup, Merico already has team members in the U.S., Brazil, France, Canada, India and China.

“In keeping with our roots and mission in open source, we will be focusing some of these new resources to engage more collaboratively with open source foundations, contributors and maintainers,” he added.

The idea behind Merico was born out of two key observations, Wheatley said. First of all, the team wanted to create a better way to analyze developer productivity and the quality of the code they generate. Some companies still simply use the number of lines of code generated by a developer to allocate bonuses for their teams, for example, which isn’t a great metric by any means. In addition, the team also wanted to find ways to better allocate income and recognition to the community members of open source projects based on the quality of their contributions.

The company’s tool is systems agnostic because it bases its analysis on the codebase and workflow tools instead of looking at lines of codes or commit counts, for example.

“Merico evaluates the actual code, in addition to related processes, and places productivity in the context of quality and impact,” said Wheatley. “In this process, we evaluate impact leveraging dependency relationships and examine fundamental indicators of quality including bug density, redundancy, modularity, test-coverage, documentation-coverage, code-smell, and more. By compiling these signals into a single point of truth, Merico can determine the quality and the productivity of a developer or a team in a manner that more accurately reflects the nature of the work.”
As of now, Merico supports code written in  Java, JavaScript (Vue.js and React.js), TypeScript, Go, C, C++, Ruby and Python, with support for other languages coming later.
“Merico‘s technology delivers the most advanced code analytics that we’ve seen on the market,” said GGV’s Jenny Lee. “With the Merico team, we saw an opportunity to empower the organizations of tomorrow with insight, in this era of remote transformation, there’s never been a more critical time to bring this visibility to the enterprise and to open source, we can’t wait to see how this technology drives innovation in both technology and management.”

#articles, #ceo, #developer, #economy, #free-software, #ggv-capital, #jenny-lee, #manufacturing, #open-source-software, #polychain-capital, #productivity, #software-development, #tc

0

Valence, the site dedicated to increasing economic opportunity for the Black community, raises $5.25 million

Valence, the Los Angeles-based online community dedicated to increasing economic opportunity for the Black community, has raised $5.25 million in financing as it looks to continue to expand its network for Black professionals in all fields.

The timing for the investment is critical as the country reckons with the implications and effects of systemic racism. In no field is the under-representation of Black professionals more deeply felt than the tech industry, where lack of diversity can have profound implications on products and services that are becoming increasingly central to large swaths of the economy.

Problems with under-representation and underlying issues of systemic racism manifest in facial recognition technologies, social networking applications and decision-making software for lending and credit that are aspects of how American society functions.

It’s with an eye toward technology and entrepreneurship that Valence raised its most recent round, according to a letter sent to the company’s users by new chief executive officer Guy Primus.

“Now that we have the capital that we were seeking, we will be doing three things. First we will improve the current product. We are very proud of what we have built thus far, but we know there are a few issues. We will continue to address those issues and will accelerate work to enhance technical performance on the platform,” Primus wrote. “Second, we will be expanding the team. We expect the team to more than triple in the coming months so that we can better serve you. Finally, we’ll be adding features and expanding our services. We will be delivering additional tools that facilitate even more meaningful connections and will expand Valence’s scope to include the professional growth and development of our members.”

A lot of that product development will go toward building tools that can help with professional development and career growth.

We’re being very targeted in how we can drive economic opportunity and wealth creation in the black community,” said Valence co-founder and Upfront Ventures general partner Kobie Fuller.  

Already, Valence has brought on some of the top names in Silicon Valley as participants in a program to promote entrepreneurship and career development.

Valence currently has 10,000 people signed up for the platform and is growing at about 20% per month, according to Primus. The goal is to serve educational advice and tools to Valence users while at the same time making that group of career-minded Black professionals available to companies that would want to hire them.

Primus said that Valence will be selling its database and access to companies that would want to find prospective hires on the platform in a per-seat licensing model that would be accessible to headhunters and human resources departments.

The new investment round was led by GGV Capital, the international investment firm whose investments include Slack, Peloton, Wish and StockX. Hans Tung, the managing director who invested in those marquee deals, will be joining the company’s board of directors.

Other investors in the round include Upfront Ventures, along with Maveron, the SoftBank Opportunity Fund and Silicon Valley Bank.

 

#diversity, #ggv-capital, #recent-funding, #startups, #tc, #techcrunch-include, #valence-community

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With former Misfit founder Sonny Vu at the helm, Arevo raises $25 million for its 3D printing tech

Sonny Vu, the former founder and chief executive of the wearable technology company, Misfit, has had a busy summer since he was named the new chief executive of 3D printing technology company, Arevo.

Vu’s new startup brought on a new executive management team, launched a crowdfunding campaign for its 3D printed Superstrata bicycle and is now announcing the close of a $25 million financing round to support the growth of its business.

It’d be a lot for anyone to take on even if it didn’t happen in the middle of global pandemic. But Vu, a serial entrepreneur whose last business went head-to-head with Apple before it was acquired by Fossil for $260 million, doesn’t shy away from challenges.

Vu was first introduced to Arevo in 2019 and was initially going to come on as an advisor to the company. Since the acquisition of Misfit he had been investing from Alabaster, his personal investment vehicle. First introduced by Vinod Khosla, an investor in the business, Vu quickly moved from being an advisor to an executive at the helm of the business and an investor providing bridge financing until the company could close its latest round.

Vu had initially intended to start his own business, but was drawn to Arevo’s potential. “3D printing is about making things slowly and in small quantities. With Arevo’s technology you can make big things quite fast,” Vu said in an interview.

Several companies are attempting to take 3D printing into heavy industry and large scale manufacturing. Relativity raised $140 million in its most recent financing to make rockets using 3D printers, Velo3D is a supplier of 3D printers to SpaceX, and now Arevo has $34 million for its efforts to scale 3d printers. Of course all of these investments pale in comparison to the whopping $438 million that Desktop Metal has raised for its 3D printing tech.

“Arevo is a compelling opportunity for us as it combines our three main investment foci: consumer internet, enterprise, and smart tech. We see fantastic potential in this market, and have backed Sonny before at Misfit,” said Hans Tung, in a statement. “Arevo is led by an experienced team with solid technological foundation and 3D printing manufacturing know-how at scale – to offer breakthrough products at competitive prices.”

Arevo already has a successful proof of concept with its Superstrata bicycle and manufacturing facilities in Vietnam that are intended to prove that the company’s technology will work as expected.

“We’re making this bike to make a point that we can make complex shapes at a pretty large scale,” Vu said. Unlike other companies that sell their printers to manufacturers, Arevo intends to sell parts. That’s because the printers are a pretty hefty ticket for anyone to buy. At $1 million to $1.4 million, it’s a big ask for a company to acquire if it wants to start using 3D printing.

On top of that cost, Vu said candidly that the company’s Achilles heel was the post-manufacturing treatment process required to finish the pieces. And while Arevo already counts automotive and aerospace companies as customers (including Airbus, which previously invested in the business), Vu wants to bring this to consumers. “We’ve had tennis racquet companies, golf clubs, surfboards,” approach Arevo about using the company’s technology, Vu says.

“We can do about two frames per day per machine,” Vu says of the latest production rates. “And coming up with our next gen system we can do about six frames per day.”

The ascension of Vu to the chief executive position and the new capital infusion marks the latest chapter for Arevo which is on its third chief executive since it was founded. Two years ago, Jim Miller, a former Amazon and Google executive, was brought on board to take the reins at the company. Miller’s appointment coincided with a $12.5 million investment round led by Asahi Glass, with Sumitomo Corp., Leslie Ventures and Khosla Ventures participating. Miller was involved with collaborating with Studio West on the design of its Superstrata bike.

Now, Defy Partners and GGV Capital are joining to lead the company’s Series B round with participation from Khosla Ventures, Alabaster and others. Brian Shin, a scout with Defy Ventures is joining the board which now counts Bruce Armstrong, from Khosla Ventures, and Hemant Bheda, Arevo’s co-founder as directors (along with Vu).

“Arevo’s new platform enables fabrication of high strength, low weight carbon fiber parts, currently not possible with today’s standard techniques,” said Trae Vassallo, founding partner at Defy. “We are thrilled to be working with the team to help scale up this incredibly impactful technology.”

#airbus, #amazon, #arevo, #defy-ventures, #desktop-metal, #fossil, #ggv-capital, #google, #hans-tung, #khosla-ventures, #sonny-vu, #spacex, #tc, #trae-vassallo, #velo3d, #vinod-khosla

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After Shopify’s huge quarter, BigCommerce raises its IPO price range

When BigCommerce, the Texas-based Shopify competitor, first announced an IPO price range, the numbers looked a little light.

With a range of just $18 to $20 per share, it appeared that the firm was targeting a valuation of around $1.18 billion to $1.31 billion. Given that BigCommerce had revenue of “between $35.5 million and $35.8 million” in Q2 2020, up a little over 30% from the year-ago period (and better margins than Shopify) its implied revenue multiple that its IPO price range indicated felt low.

At the time, TechCrunch wrote that “BigCommerce feels cheap at its current multiple,” and that if you added “recent market exuberance for cloud shares that we’ve see in other IPOs … it feels even more underpriced.”

Those feelings have been borne out. Today, BigCommerce announced a new, higher IPO price range. The firm now intends to price its IPO between $21 and $23 per share. Let’s calculate its new valuation, compare that to its preliminary Q2 results to get new multiples for the impending e-commerce software IPO, and figure how its most recent investors are set to fare in its impending debut.

Pricing

By moving its pricing up from $18 to $20 to $21 to $23, BigCommerce boosted its IPO range by 16.7% at its lower end and 15% at the upper end. At its new prices BigCommerce is worth between $1.38 billion and $1.51 billion.

#bigcommerce, #fundings-exits, #ggv-capital, #softbank, #startups, #tc

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China’s EV startup Xpeng pulls in $500 million Series C+

Xpeng, an electric vehicle startup run by former Alibaba executive He Xiaopeng, said Monday it has raised around $500 million in a Series C+ round to further develop models tailored to China’s tech-savvy middle-class consumers.

The announcement followed its Series C round of $400 million closed last November. A source told TechCrunch that the company’s valuation at the time had exceeded the 25 billion yuan ($3.57 billion) round raised in August 2018.

The new proceeds bring the five-year-old Chinese startup’s to-date fundings announced to $1.7 billion.

Investors in the latest round include Hong Kong-based private equity firm Aspex Management; the storied American tech hedge fund Coatue Management; China’s top private equity fund Hillhouse Capital; and Sequoia Capital China. The other existing big-name backers are Foxconn, Xiaomi, GGV Capital, Morningside Venture Capital, IDG Capital, and Primavera Capital.

Despite the sizable round, Xpeng is headed for a slew of challenges. Electric vehicle sales in China have shrunk in the wake of reduced government subsidies set in motion last year, and the COVID-19 pandemic is expected to further dampen demand as the economy weakens.

Xpeng’s Chinese rival Byton, which counts heavyweights backers like Tencent, FAW Group, and Foxconn, is already showing signs of strain as it furloughed about half of its 450 North America-based staff citing coronavirus impact. In June, the company put the brakes on production for internal reorganization.

Xpeng’s other competitors seem to have proven more resilient. In April, Nasdaq-listed Nio secured a $1 billion investment for its Chinese entity, while Li Auto ventured to file for a U.S. public listing in July.

Xpeng claims it has so far been able to withstand coronavirus challenges. In May, the company obtained a production license for its fully-owned car plant in a city near its Guangzhou headquarters, signaling its reduced dependence on manufacturing partner Haima Automobile.

#alibaba, #byton, #china, #coatue-management, #electric-vehicles, #foxconn, #ggv-capital, #hillhouse-capital, #idg-capital, #morningside-venture-capital, #sequoia-capital-china, #tc, #tencent, #xiaomi, #xpeng

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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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Join GGV’s Hans Tung and Jeff Richards for a live chat today at 3:30 EDT/12:30 PDT

The good ship Extra Crunch Live sails along today, bringing two noted venture capitalists aboard to discuss the world’s investing patterns, their own deals and much more.

Extra Crunch members can join the conversation with Hans Tung and Jeff Richards from GGV Capital at 3:30 p.m. EDT/12:30 p.m. PDT/7:30 p.m. GMT.

We’ll collect audience questions as we go, so buy an Extra Crunch trial now so you can participate. Of course, TechCrunch has a list of its own queries — GGV Capital invests globally, which means it has eyes and ears in a number of different markets. We’ll dig into how different markets are faring: Is China’s VC scene as slow as it seems? Is Europe bouncing back as we’ve been hearing? And what’s the current temperature here in the United States for Series A through C rounds?

With the stock market back to form, exits are hot again, which gives us a new set of topics to explore, including how GGV views M&A appetite today from a price perspective, and whether any of their later-stage companies are looking more closely at the IPO market.

TechCrunch’s Extra Crunch Live series has featured guests like investor and entrepreneur Mark Cuban, BLCK VC’s Sydney Sykes and Inspired Capital’s Alexa von Tobel, with more to come.

There are other pressing matters: The COVID-19 pandemic is re-accelerating domestically even as it abates abroad. And GGV spoke out against racism during the early days of protests after the killing of George Floyd, so we’ll ask about the venture capital industry and if its efforts to diversify itself will make more material progress this time.

Extra Crunch subscribers, hit the jump and add the event to your calendar. Zoom links and the rest of the goodies are down there as well. (We’ll also stream live on YouTube). If you aren’t an Extra Crunch subscriber, you can get a cheap trial here.

All set? Great. We’ll see you in a few hours.

Details

#coronavirus, #covid-19, #ecl, #events, #extra-crunch, #extra-crunch-live, #ggv, #ggv-capital, #hans-tung, #jeff-richards, #startups, #venture-capital

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Join GGV’s Hans Tung and Jeff Richards for a live Q&A: June 30 at 3:30 pm EDT/12:30 pm PDT

As June comes to a close, TechCrunch will welcome GGV Capital’s Hans Tung and Jeff Richards to Extra Crunch Live.

Eagle-eyed readers will recall that we discussed this conversation earlier in the month. Happily, after a minor scheduling shuffle, the venture capital firm will join Extra Crunch Live next week.

Next Tuesday, June 30th, at 3:30 p.m. ET, 12:30 p.m. PT and 7:30 p.m. GMT, to be precise. It’s going to be a fun one, so make sure to mark your calendars now. (Extra Crunch subscribers, there’s a link down below to help you save the date. You can sign up here if you need access.)

GGV is an investing group that stresses its global bonafides, so we’ll take an international tack. As a firm, GGV has invested in Khatabook (based in Bangalore), Keep (Beijing), Coder, (Austin) and Slice (New York City), among other companies of note. But what would have been a somewhat simple conversation in 2019 is now rather different; the world as it was has been shaken by the COVID-19 pandemic, making us wonder what it means to be a “global venture capital firm that invests in local founders,” as GGV claims to be, in today’s world.

The folks the firm is sending along, Jeff Richards and Hans Tung, both managing directors at GGV, have taken part in eight announced deals so far this year. So, they’ll have a good eye on what’s going on in the startup venture market. GGV also took a public stand in the wake of the police killing of George Floyd in the United States, so we’ll not lack for things to talk about.

The Extra Crunch Live series has proved to be a lot of fun. We’ve had famous folks and founders and investors alike over for a gab. Here’s to another few dozen.

Anyway, if you aren’t an Extra Crunch member, you can get a low-cost trial subscription here. Bring yourself, bring your questions, and we’ll see you on Tuesday!

When, where, Zoom

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Geek+, the Amazon Kiva of China, lands $200 million Series C

Geek+, a Beijing-based startup that makes warehouse fulfillment robots similar to those of Amazon’s Kiva, said Thursday that it has closed over $200 million in a Series C funding round.

That bumps total capital raised by the 5-year-old company to date to nearly $390 million. The new round, completed in two parts, was separately led by GGV Capital and D1 Capital Partners in the summer of 2019, and V Fund earlier this year. Other participants included Warburg Pincus, Redview Capital and Vertex Ventures.

The company said it will continue to develop robotics solutions tailored to logistics, ramp up its robot-as-a-service monetization model, and expand partnerships.

Geek+ represents a rank of Chinese robotics solution providers that are increasingly appealing to clients around the world. The startup itself boasts over 10,000 robots deployed worldwide, serving 300 customers and projects in over 20 countries.

Just last month, Geek+ announced a partnership with Conveyco, an order fulfillment and distribution center system integrator operating in North America, to distribute its autonomous mobile robots (ARMs) across the continent. Leading this part of its business is Mark Messina, the startup’s chief operating officer for the Americas who previously worked at Amazon, where he oversaw mechanical engineering for the Kiva robotics system.

Geek+’s ambitious move overseas came amid continuous pressure from the Trump administration to boycott Chinese tech players. Back home, Geek+ has worked closely with retail giants such as Alibaba and Suning to replace human pickers in warehouses.

#amazon, #artificial-intelligence, #asia, #beijing, #geekplus, #ggv-capital, #kiva, #logistics, #mobile-robot, #robot, #robotics, #vertex-ventures, #warburg-pincus

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Chief, the leadership network for women, raises $15 million in funding

Chief, the social network dedicated exclusively to women in professional leadership positions, announced today that it has $15 million in funding from its existing investors, including General Catalyst, Inspired Capital, GGV Capital, Primary Venture Partners, Flybridge Capital and BoxGroup.

The startup is a highly-vetted network of women who are leaders in their business, either managing a budget, a large team or both. The women are often at the VP or executive level. The company has more than 2,000 members in New York, Los Angeles and Chicago from companies like Google, IBM, HBO, Chobani, Walmart, Visa, Teladoc, Doctors Without Borders and the New York Times.

Chief was founded by Carolyn Childers and Lindsay Kaplan, who saw an opportunity to bring community, mentorship and guidance to a very underserved client: the female business leader.

Childers was SVP of Operations at Handy and led the launch of Soap.com, serving as GM there through its acquisition by Amazon. Kaplan was on the founding team of Casper, serving as VP of Communications and Brand, before leaving to co-found Chief.

Chief members are placed into a Core Group, which is industry agnostic, to receive training from one of the company’s contracted and vetted executive coaches alongside their peers. In these peer groups, members talk about their challenges and receive support and guidance from one another, as well as an executive coach. Members also have access to a community chat feature, and Chief’s events, which include leadership workshops, conversations with industry leaders and community roundtables.

Obviously, the coronavirus pandemic has put a damper on in-person features of the platform, such as Core Groups and live events. But Chief has moved swiftly to put all these core services on the web for members to attend and participate virtually.

The company has also fast-tracked the launch of its hiring board, which gives members the ability to privately list great candidates and open positions to the broader network.

Chief vets its members to ensure that the women on the platform ‘get it,’ as Kaplan likes to say.

“We all know it gets lonely at the top, and it gets a lot lonelier a lot earlier for women,” said Childers. “Women are on panels or on the circuit and they’re exhausted. This is a community they don’t have to be the one in the spotlight and feel all the pressure, but can actually be supported in a network of women who feel the exact same way. These women are the only person or one of the few people in their organization who have hit that level of leadership, and really need support from people who get it.”

The company looks at the applicants experience, the size of their organization and immediate team, the reporting structure, budget size, awards and credentials, thought leadership and impact as well as current member nominations.

Interestingly, no more than 9 percent of the Chief membership work in a single industry, which leads to cognitive diversity within the community. The average age of a Chief member is 43, and members manage over $10 billion in collective budget at their organizations and more than 100,000 employees.

Executive-level members pay $7,900 annually, while VP-level members pay $5,800 each year. Chief says that 40 percent of its members are Executives, with the other 60 percent are VPs. The company says that 30 percent of its membership base are women of color.

Chief also operates a Membership Grant program, created to promote diversity of background and thought among members, that brings the cost of an annual membership down to $3,800 for folks coming from non-corporate or underfunded organizations. The company did not disclose what percentage of customers are on the grant program.

Some napkin math then tells us that Chief is likely generating more than $10 million in revenue in 2020, on the conservative end. Kaplan and Childers say that they have a waitlist of 8,000 to join.

The new funding will be used to accelerate growth to meet demand in new cities and support the build-out of technology infrastructure. This latest round brings Chief’s total funding to $40 million.

#boxgroup, #chief, #funding, #general-catalyst, #ggv-capital, #inspired-capital, #primary-venture-partners, #recent-funding, #social, #startups, #tc

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China’s Geek+ brings warehouse robots to US via Conveyco partnership

Chinese robots will soon be seen roaming a number of warehouse floors across North America. Geek+, a well-funded Chinese robotics company that specializes in logistics automation for factories, warehouses and supply chains, furthers its expansion in North America after striking a strategic partnership with Conveyco, an order fulfillment and distribution center system integrator with operations across the continent.

Geek+ is seizing a massive opportunity in replacing repetitive warehouse work with unmanned robots, a demand that has surged during the coronavirus outbreak as logistics services around the world face labor shortage, respond to an uptick in e-commerce sales, and undertake disease prevention methods.

The partnership will bring Geek+’s autonomous mobile robots, or ARMs, to Conveyco’s clients in retail, ecommerce, omnichannel and logistics across North America. The deal will give a substantial boost to Geek’s overseas distribution while helping Conveyco to “improve efficiency, provide flexibility, and reduce costs associated with warehouse and logistics operations in various industries,” the partners said in a statement.

Beijing-based Geek+ so far operates 10,000 robots worldwide and employs some 800 employees, with offices in China, Germany, the U.K, the U.S., Japan, Hong Kong and Singapore. Some of its clients include Nike, Decathlon, Walmart and Dell.

Since founding in 2015, the company has raised about $390 million through five funding rounds, according to public data collected by Crunchbase, including a colossal $150 million round back in 2018 which it claimed was the largest-ever funding round for a logistics robotics startup. It counts Warburg Pincus, Vertex Ventures and GGV Capital among its list of investors.

#artificial-intelligence, #asia, #beijing, #china, #e-commerce, #geek, #geekplus, #ggv-capital, #logistics, #robot, #robotics, #vertex-ventures, #warburg-pincus

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More than 40 top security execs have formed an investing syndicate to back startups

Ensuring that a company’s information assets and technologies are protected remains a tall order for many a chief information security officer (or CISO). Cybercriminals can be both persistent and creative.

Now, a group of 46 of these professionals is taking the wraps off a syndicate that allows them to compare notes and war stories and will see them advising — and making small financial bets on — some of the nascent cybersecurity startups whose tools can potentially keep the bad guys at bay.

Called Silicon Valley CISO Investments, or SVCI, the idea is to identify these startups, fund them, advise them on pitfalls to avoid and introduce them to potential customers, including their own employers in some cases. In fact, one of newest bets, Orca Security, an Israeli cloud security firm that focuses on giving enterprises better visibility into their multi-cloud deployments, just announced its Series A round today, with participation from the group.

To learn more about how the whole thing operates, we talked yesterday with two of the founding members of the syndicate: former Splunk CISO Joel Fulton, who has more recently co-founded a stealth startup, and Oren Yunger, who is today a full-time investor with GGV Capital but previously worked as the CISO of two Israel-based companies.

They’d previously come together for a working group focused on helping early-stage executives to address security well before the point where they typically hire a head of security. As Fulton explains it, the more each CISO contributed to the project, the more they appreciated the strength of their collective insights, so they decided to form this investing syndicate.

SVCI is invite-only, and members must be recommended by others in the group. “We prefer quality over quantity,” Fulton says. Even so, it’s growing fast. While the group began last fall with eight individuals, it now has 46 members, including the chief security officer of ServiceMax, Al Ghous; David Tsao, who is the vice president of security engineering at Marqueta; and Jonathan Jaffe, who is the head of information security at People.ai.

How it’s all supposed to work: one team of people will act as scouts, another will focus on due diligence. These roles change over time. “We had to have forced volunteerism” at the outset, jokes Fulton. “You don’t have to dedicate 10 hours a week” to SVCI,” adds Yunger, “but you have to be included in the conversation. There are no passive members.”

After settling on roughly 40 companies per quarter, the group winnows down their favorites to four, which present to the group. The companies can have just raised money or be about to raise again, but they have to be willing to leave a small portion of one of these rounds open to SVCI, should its members opt in.

If the startup gets the green light, the group will contribute roughly $200,000, no matter the number of SVCI members who want to participate in the deal, which is entirely optional for each person. (The capital is bundled into special purpose vehicles so the startup isn’t stuck with potentially dozens of people on its cap table.)

It’s a small amount, obviously, just enough to form a relationship with a startup that the group wants to help —  and that it thinks will make the group look smart as it works to establish its reputation.

It’s also just enough to form potential conflicts of interest on both sides of the table. You might imagine that Yunger’s ties to GGV could translate into signaling risk for a startup whose Series A doesn’t involve GGV, for example, though Yunger insists this shouldn’t be a concern, saying the two operations are “mutually exclusive.”

Companies might also be concerned about revealing too much about their products to a room full of security pros from big companies that could potentially replicate their offerings.

Fulton says that SVCI first filters out startups that “have an unreasonable expectation” of privacy, and that when it does invite companies to lay out what they do, founders can “stay mum” on certain things, as well as drop out of the process at any time.

There is always the risk, too, that members of the group will promote to their employers startups in which they have an interest for their own gain, but Fulton says that to avoid it, all members agree to work within their companies’ conflict of interest policies and to disclose financial stakes where they exist.

In the meantime, none of the members is exclusively committed to working with SVCI or funneling deal flow its way. Some have and will continue to advise other venture outfits that are focused on cybersecurity startups.

In fact, in addition to seeing what’s bubbling up in their world, many advantages to members of SVCI are largely personal.

Yunger notes that while everyone “has a day job,” it’s a “really nice mesh of people” to be more tightly connected with, from execs at Fortune 500 companies to those at largely privately held outfits.

Fulton echoes the sentiment, saying the “interconnectedness” it provides is “greater than a Slack channel.” Besides, he adds, there is intellectual strength in numbers. “I love learning how CISOs who don’t think like me do think and stealing tools from their toolboxes.”

In addition to Orca, SVCI has so far made two other investments. One remains in stealth mode. The other is Tonic, a two-year-old, San Francisco-based synthetic data provider created by former Palantir and Microsoft engineers and that has raised roughly $2 million in seed funding to date.

#ciso, #ggv-capital, #silicon-valley-ciso-investments, #tc, #venture-capital

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As stocks recover, private investors aren’t buying the hype

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we need to talk about what we’re hearing from the private markets and the public markets, and how different their messages seem to be.

The public markets through yesterday were on the bounce, rising sharply from recent lows, driven by negative news concerning COVID-19 and its ensuing economic damage. As TechCrunch noted yesterday, major American indices had seen their value sharply recover from lows recorded earlier in the year. This was odd, as the news from COVID-19 is far from good — America is still the country with the highest rate of new, confirmed infections and related deaths by some margin — and the economic damage stemming from the nation’s belated efforts to stem the pandemic at home piles up.

You can easily read optimism in the stock market: that the COVID-19 infection footprint at home isn’t as bad as some models indicated, that social distancing is working, and that the economy will quickly rebound from this bother. Ask around the private markets, however, and you’ll hear a very different narrative.

Yesterday while kicking over the business-focused modern software market (enterprise SaaS, if you prefer) with Shasta VenturesJason Pressman, we discussed the state of affairs for private companies that he’s seeing from his perch inside the startup machine. Taking his notes into account, along with those of other investors that we’ve spoken to recently, it’s hard to understand the level of optimism that public markets are signaling.

Not that Pressman is a pessimist, it would be difficult to be a net-gloomy venture capitalist on the whole, given the risk profile of the investments they make. But some VCs who have invested through prior downturns are comfortable being candid about what they are seeing from private companies, those inside their portfolios and out.

This morning let’s explore the public-private optimism gap for the second time. The last time we undertook this particular theme, public investors were being pessimists and private investors appeared unseasonably bullish. It’s unlikely that there is room for both views to be correct.

Smiles, frowns

#amazon, #america, #angel-investor, #economy, #editor, #entrepreneurship, #finance, #fundings-exits, #ggv-capital, #jason-pressman, #jeff-richards, #jonathan-shieber, #money, #news-media, #private-equity, #shasta-ventures, #startup-company, #startups, #tc, #techcrunch, #twitter, #united-states, #venture-capital

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