Extra Crunch roundup: Adtech investing, Intuit buys Mailchimp, ideal customer profiles

Major gains in online advertising have boosted valuations for adtech startups since the pandemic began, but one insider says investors are missing the party.

“Adtech is having a moment,” writes industry veteran Casey Saran.

“And while much of the oxygen has been soaked up by large legacy companies hitting the public market, there have been smaller deals that indicate a hunger for better creative adtech.”

Saran shares five reasons “why VCs should consider ratcheting up their investment into adtech startups building the next generation of creative tools.”


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On Wednesday, September 22 at 9:05 a.m PT, I’m moderating “The Path for Underrepresented Entrepreneurs,” a panel discussion at Disrupt 2021.

Our conversation will examine some of the unique challenges facing founders from historically marginalized groups, the strategies they used along the way, and the disruptive changes we need to consider if we want to see fundamental change.

I’ll be speaking with:

  • Hana Mohan, founder & CEO, MagicBell
  • Leslie Feinzaig, founder & CEO, Female Founders Alliance
  • Stephen Bailey, co-founder & CEO, ExecOnline

I hope you’ll attend; we’ll take audience questions after our discussion concludes. Thanks very much for reading Extra Crunch this week, and have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

5 things you need to win your first customer

Putting the final building block onto the top of a rising pile signifying success and achievement

Image Credits: AndrewLilley (opens in a new window) / Getty Images

Congratulations on shipping your product, but how much do you know about your target customers?

Companies that haven’t created an ideal customer profile and performed a SWOT analysis are making big bets on guesswork and intuition. Sometimes that works out, but more frequently, it leads to tears.

In a guest post that walks readers through the fundamentals of creating customer personas that map to your company’s goals, Grammarly product marketing lead Bryan Dsouza shares five basic requirements for customer acquisition.

“Understanding and executing on these things can guarantee you that first customer win, provided you do them well and with sincerity,” he says.

“Your investors will also see the fruits of your labor and be comforted knowing their dollars are at good work.”

4 ways to leverage ROAS to triple lead generation

Someone pops the tab on a soda can, releasing a mist/spray

Image Credits: joshblake (opens in a new window) / Getty Images

In school, it’s highly unethical to copy someone else’s work and pass it off as your own. In business, however, it is expected.

Xiaoyun TU, global director of demand generation at Brightpearl, wrote a comprehensive guide for how to use the key metric of return on advertising spend (ROAS) to triple your company’s lead generation.

“A ‘good’ ROAS score is different for each company and campaign,” she says. “If your figure isn’t where you’d like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.”

3 strategies to make adopting new HR tech easier for hiring managers

Steps with Check Mark on Chalkboard

Image Credits: porcorex (opens in a new window) / Getty Images

Most of us prefer to trust our instincts instead of letting automated tools help us make decisions, particularly when it comes to hiring. But that’s not smart.

If your startup relies on an ad hoc hiring process, you’re probably not tracking candidates properly, there’s likely little consistency regarding how they’re treated, and bias can play a major role in who gets hired.

It’s fine to be skeptical of automated hiring tools — but not ignorant.

What could stop the startup boom?

In yesterday’s edition of The Exchange, Anna Heim and Alex Wilhelm speculated about the conditions that could combine to cool off a hot startup market currently fueled by low interest rates and a sweeping digital transformation.

“From where we stand, the factors underpinning the startup fundraising boom appear solid and unlikely to unwind overnight. Still, no golden period shines forever, and even today’s luster will eventually tarnish.”

Intuit’s $12B Mailchimp acquisition is about expanding its small business focus

Signage for financial software company Intuit at the company's headquarters in the Silicon Valley town of Mountain View, California, August 24, 2016. (Photo by Smith Collection/Gado/Getty Images).

Image Credits: Smith Collection/Gado / Getty Images

Before news broke this week that Intuit was acquiring Mailchimp for $12 billion, the ’80s-born fintech giant’s biggest buy was spending $7.1 billion last year for Credit Karma.

In the last few years, Mailchimp “has been expanding upon its core email marketing functionality” with offerings like web design and CRM, writes enterprise reporter Ron Miller.

The industry watchers he interviewed said the move signals Intuit’s interest in acquiring and serving more SMB customers with a variety of tools:

  • Laurie McCabe, co-founder and partner, SMB Group
  • Brent Leary, founder and principal analyst, CRM Essentials
  • Holger Mueller, analyst, Constellation Research

Forge’s SPAC deal is a bet on unicorn illiquidity

“One of my favorite long-term issues with the late-stage startup market is that it is far better at creating value than it is at finding an exit point for that accreted value,” Alex Wilhelm writes for The Exchange. “More simply, the startup market is excellent at creating unicorns but somewhat poor at taking them public.”

That’s good news for Forge Global, a technology startup that operates a market for secondary transactions in private companies, with Alex dubbing its plans to go public via a SPAC combination “perfectly reasonable.”

Dear Sophie: Should I apply for citizenship if I have a conviction?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

At Burning Man a few years ago, I was arrested and charged with a misdemeanor for smoking marijuana in public (in my car) and driving under the influence.

I currently have a green card and want to apply for U.S. citizenship next year.

Can I? If so, how should I handle my criminal record?

— Remorseful About the Reefer

Atlanta’s sundry startups join in global VC funding boom

Alex Wilhelm and Anna Heim continued their tour of U.S. cities after hitting up Chicago and Boston in recent weeks.

This time, they dug into Atlanta’s booming startup scene, which is seeing record capital inflows.

“The picture that forms is one of a city enjoying a rising tide of venture activity, boosted by some local dynamics that may have helped some of its earlier-stage companies scale for cheaper than they might have in other markets,” they write.

#adtech, #advertising-tech, #business, #ec-roundup, #entrepreneurship, #extra-crunch-roundup, #finance, #growth-marketing, #intuit, #lawyers, #mailchimp, #private-equity, #sophie-alcorn, #startups, #venture-capital, #verified-experts

Intuit’s $12B Mailchimp acquisition is about expanding its small business focus

At first blush, the $12 billion Intuit-Mailchimp deal might not make a heck of a lot of sense. But people tend to pigeonhole companies, and in this case they might see Intuit as purely a financial software company and Mailchimp as an email marketing firm and nothing more. If that’s as far as your perspective goes, the deal is confusing. From a wider lens, however, there’s more to both companies than you might think.

Let’s start with Intuit. If you go to the company website and scan the product set, it’s clearly all about managing finances for consumer and small businesses alike. The latter category appears to be what the company wants to exploit and expand upon with this deal.

Prior to yesterday’s news, Intuit’s biggest acquisition had been on the consumer side buying Credit Karma for $7.1 billion last year. That deal gave the company’s customers a way to access their credit scores outside of the big three reporting companies: Experian, Equifax and TransUnion. Apparently not content with only that transaction, it set its sights on Mailchimp to throw some money at the business side of the house.

#email-marketing, #exit, #fundings-exits, #intuit, #ma, #mailchimp, #marketing-automation, #mergers-and-acquisitions, #small-businesses, #startups, #tc

The Equity crew riffs on the Intuit-Mailchimp news

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

We are back! From this morning, I suppose. But the news cycle doesn’t wait for our publishing schedule, so the Equity crew got together to yammer all about the Intuit-Mailchimp acquisition.

A $12 billion deal composed of stock and cash, it’s a big one. And as Mailchimp has both a history of bootsrapping and a founding story in a non-Silicon Valley city we had lots to chat about.

As a general reminder, if you do listen to the show, hit us up on Twitter as we are doing more and more of these Spaces. They are good and relaxed fun, so don’t take them too seriously. We like to have fun.

Alright, Equity is back on Wednesday with our regularly scheduled programming. Chat then!

Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday at 6:00 a.m. PDT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

#equity, #equity-podcast, #fundings-exits, #intuit, #mailchimp, #startups

Intuit confirms $12B deal to buy Mailchimp

This afternoon Intuit confirmed persistent rumors that it was in the process of buying MailChimp, detailing a $12 billion transaction that will bring the well-known email infra company to its corporate remit.

Intuit is not a well-known player in the email marketing space. The company is instead best known for its TurboTax software — and associated lobbying of the US government to ensure its rent-seeking can continue — its recent purchase of CreditKarma, and its more dated acquisition of Mint.

The Mailchimp transaction will comprised both cash and stock.

The question rattling around your brain at the moment is the correct thing to ask: Why is Intuit spending 10% of its market capitalization to buy an email marketing company? 

Per a release, Intuit thinks that the deal “advances” its “powering prosperity around the world, and its strategy to become an AI-driven expert platform.” Normally at this juncture I’d convert the company’s corporate-speak to something in English, but I’m struggling.

The company had more to say, that its Mailchimp buy would allow it to “accelerate two of [Intuit’s] previously-shared strategic Big Bets: to become the center of small business growth; and to disrupt the small business mid-market.”

This is a bit more grokkable. Intuit’s Quickbooks service is a well-known product in the SMB space. Presumably Intuit reckons that it can sell more services to its existing small business customers. It still feels like a bit of a stretch, but we presume that the eggheads have come to the conclusion that ensuing corporate synergies will more than compensate for the sticker-shock that the deal includes.

Shares of Intuit are up a slim 0.15% in after-hours trading, implying something of a shrug from Wall Street concerning the transaction; given how well-leaked the deal was on its way to consummation, the combination may have already been priced into Intuit’s share price.

For Atlanta, where MailChimp is headquartered, the deal is a win. MailChimp is a famously bootstrapped company, so if you were looking for confirmation that you can build decacorns outside of Silicon Valley and without venture capital help, here’s evidence.

#intuit, #mailchimp, #tc

Don’t give your weed dealer all your data

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

Our beloved Danny was back, joining Natasha and Alex and Grace and Chris to chat through yet another incredibly busy week. As a window into our process, every week we tell one another that the next week we’ll cut the show down to size. Then the week is so interesting that we end up cutting a lot of news, but also keeping a lot of news. The chaotic process is a work in progress, but it means that the end result is always what we decided we can’t not talk about.

Here’s what we got into:

Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#climate-change, #cloud-100, #data, #disaster-tech, #dreamforce, #edtech, #equity, #equity-podcast, #felt, #figma, #fundings-exits, #gusto, #india, #ipcc-report, #mailchimp, #pave, #ransomware, #rapidsos, #salesforce, #startups, #surfside, #trendyol, #turkey, #upgrad

Norby raises $3.8M for an all-in-one creator marketing platform

Early in the pandemic, Nick Gerard, Steven Layne, and Samantha Safer Valentine had a hit on their hands. In the era before Zoom fatigue set in, the trio launched Mainstream Live, a website and newsletter that curated live virtual events across platforms and gave people text-based reminders to check them out. 

“We started with the discovery problem of people looking for cool things to do online,” Gerard told TechCrunch. “…Right away we knew that we were tapping into something.” Overnight, tens of thousands of people were on the site, browsing for online events to keep them connected in a period of unprecedented social isolation.

After going viral, the Mainstream Live team found itself inundated with questions about the tools it used to surface events and keep its community in the loop. As the team built more services for its own needs, it eventually opened its custom toolkit, sharing the code to other community leads and content creators who implemented the same set of tools with a rebrand.

“People loved it — more and more people asked for it,” Gerard said. “We got to the point where we were juggling a dozen of [these] for different partners.” By the fall, the team wound down the original community, leaned into the inbound interest in its toolset and built Norby.

Norby platform

The new company rolled together everything that people were asking for: a link-in-bio service, referral tracking, SMS, ticketing and other marketing tools necessary to keep a small brand or creator community humming. 

Gerard says the team at Norby has been “following that signal” ever since. Now, Norby has raised a $3.8M seed round led by Gradient Ventures, Google’s venture AI-focused fund, to grow its team and scale its full-stack marketing platform to new heights. Bungalow Capital, BBG Ventures, Charge VC, and Notation also participated in the funding round. 

Norby’s big idea is to combine services like LinkTree, Eventbrite and MailChimp into a single, affordable, subscription-based service, offering anyone who handles an online community a single solution rather than an expensive patchwork of services that have to be individually set up and managed. Norby is ideal for small brands and solo entrepreneurs and most of its customers run less than 10-person operations. The creator tool suite is purely subscription based and won’t collect any fees like Eventbrite and other popular services.

For brands, it starts at $20 per month and the company has plans in the works for a $5 per month tier for individual use. There’s no free tier, and Gerard prefers to think that Norby’s customers will be excited to save time and money on the company’s bundled offering. “What we found is that people spend an enormous amount of money on these tools,” Gerard said. “We can knock a bunch of tools out of your stack and save you money. But we can also save you time.” 

Norby’s team spends a lot of time talking to creators and small companies. Its customers range from sexual wellness companies to advice columnists and activists — anybody who needs to manage an online community. It counts Sad Girls Club, EVRYMAN and Allbodies among its early customers

The company is growing slowly and organically, bringing new users in through a waitlist and invite system and showing them around the product in group demos. “What’s been really cool for us, we’ll get a new customer for one or two features… then they came into the product and were like ‘oh we’ve always wanted to try SMS’ and then it’s just there and they can start using it,” Gerard said. 

Big picture, Norby views itself as an advocate for creators — and an insulator against the power that big platforms wield. In the long term, Gerard hopes to help creators own their own communities as a kind of “counterbalance” to big platforms like Instagram, TikTok and YouTube.

Norby hopes to help more people make a reliable living creating content and communities online. “There’s a handful of extreme winners and it’s just barren after that,” Gerard said, citing Li Jin’s ideas on building a creator middle class

Helping creators “own the relationship” with their communities is something that big platforms will never have an incentive to do. But those same platforms are realizing that creators wield some very real power — and the ability to pick up their content empires and take them to go if they choose to. 

“Whats exciting about this moment is that right now looking ahead to the next five or ten years, nothing is inevitable,” Gerard said. “These windows don’t come along all the time.”

#bbg-ventures, #content-creators, #eventbrite, #gradient-ventures, #li-jin, #linktree, #mailchimp, #online-communities, #online-community, #online-events, #sms, #social, #tc, #techcrunch, #tiktok, #verizon-media, #websites

Google updates Firebase with new personalization features, security tools and more

At its I/O developer conference, Google today announced a slew of updates to its Firebase developer platform, which, as the company also announced, now powers over 3 million apps.

There’s a number of major updates here, most of which center around improving existing tools like Firebase Remote Config and Firebase’s monitoring capabilities, but there are also a number of completely new features here as well, including the ability to create Android App Bundles and a new security tool called App Check.

“Helping developers be successful is what makes Firebase successful,” Firebase product manager Kristen Richards told me ahead of today’s announcements. “So we put helpfulness and helping developers at the center of everything that we do.” She noted that during the pandemic, Google saw a lot of people who started to focus on app development — both as learners and as professional developers. But the team also saw a lot of enterprises move to its platform as those companies looked to quickly bring new apps online.

Maybe the marquee Firebase announcement at I/O is the updated Remote Config. That’s always been a very powerful feature that allows developers to make changes to live production apps on the go without having to release a new version of their app. Developers can use this for anything from A/B testing to providing tailored in-app experience to specific user groups.

With this update, Google is introducing updates to the Remote Config console, to make it easier for developers to see how they are using this tool, as well as an updated publish flow and redesigned test results pages for A/B tests.

Image Credits: Google

What’s most important, though, is that Google is taking Remote Config a step further now by launching a new Personalization feature that helps developers automatically optimize the user experience for individual users. “It’s a new feature of [Remote Config] that uses Google’s machine learning to create unique individual app experiences,” Richards explained. “It’s super simple to set up and it automatically creates these personalized experiences that’s tailored to each individual user. Maybe you have something that you would like, which would be something different for me. In that way, we’re able to get a tailored experience, which is really what customers expect nowadays. I think we’re all expecting things to be more personalized than they have in the past.”

Image Credits: Google

Google is also improving a number of Firebase’s analytics and monitoring capabilities, including its Crashlytics service for figuring out app crashes. For game developers, that means improved support for games written with the help of the Unity platform, for example, but for all developers, the fact that Firebase’s Performance Monitoring service now processes data in real time is a major update to having performance data (especially on launch day) arrive with a delay of almost half a day.

Firebase is also now finally adding support for Android App Bundles, Google’s relatively new format for packaging up all of an app’s code and resources, with Google Play optimizing the actual APK with the right resources for the kind of device the app gets installed on. This typically leads to smaller downloads and faster installs.

On the security side, the Firebase team is launching App Check, now available in beta. App Check helps developers guard their apps against outside threats and is meant to automatically block any traffic to online resources like Cloud Storage, Realtime Database and Cloud Functions for Firebase (with others coming soon) that doesn’t provide valid credentials.

Image Credits: Google

The other update worth mentioning here is to Firebase Extensions, which launched a while ago, but which is getting support for a few more extensions today. These are new extensions from Algolia, Mailchimp and MessageBird, that helps bring new features like Algolia’s search capabilities or MessageBird’s communications features directly to the platform. Google itself is also launching a new extension that helps developers detect comments that could be considered “rude, disrespectful, or unreasonable in a way that will make people leave a conversation.”

#algolia, #android, #cloud-computing, #computing, #developer, #firebase, #google, #google-allo, #google-cloud, #google-i-o-2021, #google-play, #google-search, #machine-learning, #mailchimp, #operating-systems, #product-manager, #tc

Mailchimp moves into e-commerce

Over the course of the last few years, Mailchimp morphed from a basic newsletter platform to a fully-fledged marketing company. And while the service already offered integrations with a number of e-commerce sites, it is now launching its own online stores for small and medium businesses, as well as a new appointment booking service.

These new services will be part of MailChimp’s new ‘Websites & Commerce’ plans, which starts with a free tier that offers most of the basic functionality. Users on the free plan will pay a 2% transaction fee. For $10/month, Mailchimp will remove its own branding and users will get access to email and chat support and only pay a 1.5% transaction fee, while those who opt for the ‘Plus’ plan at $29/month will only pay a 0.5% transaction fee per order.

All plans will let users build sites with unlimited pages and without bandwidth restrictions, and include SEO tools and integration with Google Analytics. As for the stores, users will be able to build their product catalogs and manage their orders, taxes and shipping configurations. All of this, as well as the appointments functionality, is obviously deeply integrated with the rest of the Mailchimp stack.

Image Credits: Mailchimp

These new plans are currently in beta and the new e-commerce features will become available to all Mailchimp customers in the U.S. and UK by May 18, while the appointments booking feature will go live for all users on April 27.

This addition of built-in commerce features marks a major step in Mailchimp’s evolution. But it also makes sense. The company says about 40% of its customers over fourteen million customers are in the commerce space already and many of them have been asking for more native commerce features. Almost 30% of its users are also using its existing commerce features and integrations and the company saw its revenue for e-commerce customers grow 61% from 2019 to 2020.

Since Mailchimp already offers websites, domains and other adjacent services, adding these new features feels like a natural next step, whether that’s selling directly from a Mailchimp store or taking appointment bookings for a service business.

The company stresses that while it is entering a new space, it is not walking away from its existing products and customers. “Rest assured, we’re not abandoning our smart marketing solutions,” Mailchimp CEO and co-founder Ben Chestnut writes in today’s announcement. “In fact, our goal is still to have the best email marketing in the world. We know our customers and partners demand consistency and continuity as much as they demand new features and functionality, so we’re refining and nurturing existing tools, too. We continue to work on making the process of designing emails as easy as possible, and in a few months we’re adding new beautiful email templates.”

Image Credits: Mailchimp

#cloud-applications, #computing, #e-commerce, #ecommerce, #mailchimp, #online-stores, #tc, #united-kingdom, #united-states, #webs, #world-wide-web

YC-backed Abacum nets $7M to empower finance teams with real-time data and collaboration tools

SaaS to support mid-sized companies’ financial planning with real-time data and native collaboration isn’t the sexiest startup pitch under the sun but it’s one that’s swiftly netted Abacum a bunch of notable backers — including Creandum, which is leading a $7M seed round that’s being announced today.

The rosters of existing investors also participating in the round are Y Combinator (Abacum was part of its latest batch), PROFounders, and K-Fund, along with angel investors such as Justin Kan (Atrium and Twitch co-founder and CEO); Maximilian Tayenthal (N26 co-founder and co-CEO & CFO); Thomas Lehrman (GLG co-founder and ex-CEO), Avi Meir (TravelPerk co-founder and CEO); plus Jenny Bloom (Zapier CFO and Mailchimp ex-CFO) and Mike Asher (CFO at Neo4j).

Abacum was founded last year in the middle of the COVID-19 global lockdown, after what it says was around a year of “deep research” to feed its product development. They launched their SaaS in June 2020. And while they’re not disclosing customer numbers at this early stage their first clients include a range of scale-up companies in the US and in Europe, including the likes of Typeform, Cabify, Ebury, Garten, Jeff and Talkable.

The startup’s Spanish co-founders — Julio Martinez, a fintech entrepreneur with an investment banking background, and Jorge Lluch, a European Space Agency engineer turned CFO/COO — spotted an opportunity to build dedicated software for mid-market finance teams to provide real-time access to data via native collaborative that plugs into key software platforms used by other business units, having felt the pain of a lack of access to real-time data and barriers to collaboration in their own professional experience with the finance function.

The idea with Abacum is to replace the need for finance teams to manually update their models. The SaaS automatically does the updates, fed with real-time data through direct integrations with software used by teams dealing with functions like HR, CRM, ERP (and so on) — empowering the finance function to collaborate more easily across the business and bolster its strategic decision-making capabilities.

The startup’s sales pitch to the target mid-sized companies is multi-layered. Abacum says its SaaS both saves finance teams time and enables faster-decision making.

“Prior to using Abacum, finance analysts in our clients were easily spending 50% to 70% of their time in manual tasks like downloading files from different systems, copy&pasting them in massive spreadsheets (that crash frequently), formatting the data by manually adding and removing rows, columns and formats, connecting the data in a model prone to manual error (e.g. vlookups & sumifs),” Martinez tells TechCrunch. “With Abacum, this entire manual part is automatically done and the finance professionals can spend their time analyzing and adding real value to the business.”

“We enable faster decisions that were not possible prior to Abacum. For instance, some of our clients were updating their cohort analysis on a quarterly basis only because the associated manual tasks were too painful. With us, they’re able to update the analysis weekly and take better decisions as a result.”

The SaaS also supports decisions in another way — by applying machine learning to business data to generate estimates on future performance, providing an AI-based reference point based on historical data that finance teams can use to inform their assumptions.

And it aids cross-business collaboration — allowing users to share and gather information “easily through workflows and permissions”. “We see that this results in faster and richer decisions as more stakeholders are brought into the process,” he adds.

Martinez says Abacum chose to focus on mid-market finance teams because they face “more challenges and inefficiencies” vs the smaller (and larger) ends of the market. “In that segment, the finance function is underinvested — they face the acute complexities of scaling companies that become very pressing but at the same time they are still considered a support function, a back-office,” he argues.

“Abacum makes finance a strategic function — we deliver native collaboration to finance teams so that they become the trusted business partner they want to be. We also see that the pandemic has accelerated the need for finance teams to collaborate effectively and work remotely,” he adds.

He also describes the mid market segment as “fairly unpenetrated” — claiming many companies do not yet having a solution in place.

While competitors he points to when asked about other players in the space are long in the tooth in digital terms: Adaptive Insights (2003); Host Analytics (2001); and Anaplan (2008).

Commenting on the seed round in a statement, Peter Specht, principal at Creandum, added: “The financial planning processes in many companies are ripe for disruption and demand more automation. Abacum’s slick solution empowers finance teams to be more collaborative, efficient and better informed with access to real-time data. We were impressed by their user-friendly product, the initial hiring of top talent, and crucially the strong founders and their extensive operational experience — including as CFOs and entrepreneurs who have experienced the problem first-hand. We are delighted to be part of Abacum’s journey to empower global SMEs to bring their financial operations to new levels.”

Abacum’s seed financing will be ploughed into product development and growth, per Martinez, who says it’s focused on wooing finance teams in the US and Europe for now.

#abacum, #adaptive-insights, #anaplan, #artificial-intelligence, #avi-meir, #business-models, #cfo, #chief-financial-officer, #creandum, #crm, #europe, #finance, #fundings-exits, #glg, #justin-kan, #machine-learning, #mailchimp, #n26, #neo4j, #profounders, #real-time-data, #saas, #software-as-a-service, #tc, #travelperk, #twitch, #y-combinator, #zapier

Atlanta’s early stage investment renaissance continues with Overline’s $27 million fund close

Michael Cohn became a celebrity in the Atlanta startup ecosystem when the company he co-founded was sold to Accenture in a deal valued somewhere between $350 million and $400 million nearly six years ago.

That same year, Sean O’Brien also made waves in the community when he helped shepherd the sale of the  collaboration software vendor, PGi, to a private equity firm for $1.5 billion.

The two men are now looking to become fixtures in the city’s burgeoning new tech community with the close of their seed-stage venture capital firm’s first fund, a $27.4 million investment vehicle.

Overline’s first fund has already made commitments to companies that are expanding the parameters of what’s investible in the Southeast broadly and Atlanta’s startup scene locally.

These are companies like Grubbly Farms, which sells insect-based chicken feed for backyard farmers, or Kayhan Space, which is aiming to be the air traffic control service for the space industry. Others, like Padsplit, an Atlanta-based flexible housing marketplace, are tackling America’s low income housing crisis. 

“Our business model is very different from that of a traditional software startup, and the Overline team’s unique strengths and operator mindset have been invaluable in helping us grow the company,” said Sean Warner, CEO and co-founder of Grubbly Farms. 

That’s on top of investments into companies building on Atlanta’s natural strengths as a financial services, payments and business software powerhouse.

For all of the activity in Atlanta these days, the city and the broader southeastern region is still massively underfunded, according to O’brien and Cohn. The region only received less than 10 percent of all the institutional venture investments that were committed in 2020. Indeed, only seven percent of Atlanta founders raise money locally when they’re first starting out, an Overline survey suggested.

“The data reflects what we have seen throughout our careers building, growing, and investing in startups. There is no shortage of phenomenal founders and businesses coming out of Atlanta and the Southeast, but they often struggle to find institutional capital at their earliest stages,” said O’Brien, in a statement. “Overline will lead as the first institutional check for these companies and be a true partner to the Founders throughout their lifecycle—supporting them on the strategic and operational business initiatives and decisions that are critical to a company’s success.” 

The limited partners in Overline’s first fund also reflects the firm’s emphasis on regional roots. The privately held email marketing behemoth Mailchimp anchored the fund, which also included partners like Cox Enterprises, Social Leverage,

Overline is supported by a bench of impressive partners that reflects the firm’s roots in the Southeast. Anchored by marketing platform, Mailchimp, additional partners include Cox Enterprises, Scottsdale, Ariz.-based Social Leverage, Wilmington, Del.-based Hallett Capital, and Atlanta Tech Village founder David Cummings, along with Techstars co-founder David Cohen. 

“At Mailchimp, we love our hometown of Atlanta, and are proud of the robust startup ecosystem that’s growing in our city. The Overline founding team’s vision of deploying smart, local capital into startups in Atlanta and the Southeast aligns with our goals of promoting and advancing local innovation,” said Rick Lynch, CFO, Mailchimp, in a statement.

The firm expects to make investments of between $250,000 to $1.5 million into seed stage companies and has already backed 11 companies including, Relay Payments, a logistics fintech company that has raised over $40 million from top-tier investors. 

“When we set out to build Atlanta Tech Village almost a decade ago, one of our primary goals was to help Atlanta develop into a top 10 startup city, where all entrepreneurs would thrive. We’re making tremendous strides as a community, as evidenced by the number of newly minted unicorns,” said serial entrepreneur and Atlanta Tech Village founder David Cummings. “I believe in Overline’s thesis that value-add institutional early-stage capital is critical to the ecosystem’s continued development. Since the early days, Michael and Sean have been an active presence in our community in a way that goes far beyond being a source of capital—as mentors, advisors, and champions of Atlanta founders. I am proud to be one of their first investors.”

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With Atlanta rising as a new hub for tech, early stage firm Tech Square Ventures gets a new partner

Atlanta is coming up in the tech world with several newly minted billion-dollar businesses hailing from the ATL and the city’s local venture capital community is taking notice.

Even as later stage firms like the newly minted BIP Capital rebrand and  with increasingly large funds, earlier stage firms like Tech Square Ventures are staffing up and adding new partners.

The firm’s latest hire is Vasant Kamath, a general partner who joins the firm from Primus Capital, a later stage investment vehicle based out of Atlanta. Before that, he was managing investments for the private office of the Cox family.

Originally from Augusta, Ga. Kamath left the south to attend Harvard and then went out west for a stint at Stanford Business School.

In between his jaunts North and West Kamath spent time in Atlanta as an investment banker with Raymond James in the early 2000s, the beginnings of a lifelong professional career in technology. Before business school, Kamath worked at Summit Equity Partners in Boston investing in later stage technology companies.

Kamath settled in Atlanta in 2010 just as a second wave of technology companies began making their presence felt in the city.

The new Tech Square Village general partner pointed to Atlanta’s underlying tech infrastructure as one reason for the move to early stage. One pillar of that infrastructure is Georgia Tech itself. The school, whose campus abuts the Tech Square Ventures offices, is one of the top engineering universities in the country and the breadth of talent coming out of that program is impressive, Kamath said.

There’s also the companies like Airwatch, MailChimp, Calendly and others that represent the resurgence of Atlanta’s tech scene, Tech Square Ventures’ newest general partner said.

Not only are young companies reinvesting in the city, but big tech giants and telecom players like T-Mobile, Google, and Microsoft are also establishing major offices, accelerators, and incubators in Atlanta.

“There’s a lot of momentum here in early stage and i think it’s building. It’s the right time for a firm like TSV to take advantage of all of the things,” Kamath said. 

Another selling point for making the jump to early stage investing was the relationship that Kamath had established with Tech Square Ventures founder, Blake Patton. A serial entrepreneur who’s committed to building up Atlanta’s startup ecosystem, Patton has been the architect of Tech Square Ventures’ growth through two separate initiatives.

In all, the firm has $90 million in assets under management. What began with a small pilot fund, Tech Square Ventures Fund 1, (a $5 million investment vehicle) has expanded to include two larger funds raised in conjunction with major industrial corporate partners like AT&T, Chick-Fil-A, Cox Enterprises, Delta, Georgia-Pacific, Georgia Power, The Home Depot, UPS, Goldman Sachs, and Invesco, under the auspices of a program called Engage. Those funds total $54 million in AUM and the firm is halfway toward closing a much larger second flagship fund under the Tech Square Ventures name with a $75 million target.

All this activity has led to a blossoming entrepreneurial community that early stage funds like Tech Square Ventures hopes to tap.

“We see a fair number of folks from these large corporations spinning out and starting things themselves,” said Kamath. “For a decade plus, you have multiple entrepreneurs doing really well and increasing acceleration in terms of climate and exits.”

And more firms from outside of the region are beginning to take notice.

“I think that is happening,” said Kamath. “You might seen investment from outside the region. At the seed stage it’s harder you do need to have feet on the ground right when they’re starting and building their business. Once they’ve been vetted and had that early round of investment you will definitely see a lot of activity. We’re seeing more investment at the Series A and B from out of town. That’s the strategy.”

It all points to a burgeoning startup scene that’s based in a collaborative approach, which should be good not only for Tech Square Ventures, but the other early stage funds like Atlanta Ventures, Outlander Labs, BLH Ventures, Knoll Ventures and Overline, that working to support the city’s entrepreneurs, Kamath said.

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Mailchimp launches new AI tools as it continues its transformation to marketing platform

Mailchimp may have started out as an easy to use newsletter tool, but that was almost 20 years ago. Today’s company still does email, but at its core, it is now a marketing automation platform for small businesses that also offers a website builder, basic online stores, digital ad support and analytics to make sense of it all. Like before, though, the company’s main goal is to make all these features easy to use for small business users.

Image Credits: Mailchimp

Today, Mailchimp, which has never taken outside funding, is taking the next step in its own transformation with the launch of a set of AI-based tools that give small businesses easy access to the same kind of capabilities that their larger competitors now use. That includes personalized product recommendations for shoppers and forecasting tools for behavioral targeting to see which users are most likely to buy something, for example. But there’s now also a new AI-backed tool to help business owners design their own visual asset (based in part on its acquisition of Sawa), as well as a tool to help them write better email subject lines.

There’s also a new tool that helps businesses choose the next best action. It looks at all of the data the service aggregates and gives users actionable recommendations for how to improve their email campaign performance.

Image Credits: Mailchimp

“The journey to get here started about four years ago,” Mailchimp’s founding CEO Ben Chestnut told me. “We were riding high. Email was doing amazing for us. And things look so good. And I had a choice, I felt I could sell the business and make a lot of money. I had some offers. Or I could just coast, honestly. I could just be a hero in email and keep it simple and just keep raking in the money. Or I could take on another really tough challenge, which would be act two of  Mailchimp. And I honestly didn’t know what that would be. To be honest with you, that was four years ago, it could have been anything really.”

But after talking to the team, including John Foreman, the head of data analytics at the time and now Mailchimp’s CPO, Chestnut put the company on this new path to go after the marketing automation space. In part, he told me, he did so because he noted that the email space was getting increasingly crowded. “You know how that ends. I mean, you can’t stay there forever with this many competitors. So I knew that we had to up our game,” he said.

And that meant going well beyond email and building numerous new products.

Image Credits: Mailchimp

“It was a huge transformation for us,” Chestnut acknowledged. “We had to get good at building for other customer segments at the time, like e-commerce customers and others. And that was new for us, too. It’s all kinds of new disciplines for us. To inflict that kind of change on your employees is very, very rough. I just can’t help but look back with gratitude that my employees were willing to go on this journey with me. And they actually had faith in me and this release — this fall release — is really the culmination of everything we’ve been working on for four years to me.”

One thing that helped was that Mailchimp already had e-commerce customers — and as Chestnut noted, they were pushing the system to its limit. Only a few years ago, the culture at Mailchimp looked at them as somewhat annoying, though, Chestnut admitted, because they were quite demanding. They didn’t even make the company a lot of money either. At the time, non-profits were Mailchimp’s best customers, but they weren’t pushing the technology to its limits.

Despite this transformation, Mailchimp hasn’t made a lot of acquisitions to accelerate this process. Chestnut argues that a lot of what it is doing — say adding direct mail — is something that was more or less and extension of what it was already good at. But it did make some small AI and ML acquisitions to bring the right expertise in-house, as well as two e-commerce acquisitions, including Lemonstand. Most recently, Mailchimp acquired Courier, a British magazine, newsletter and podcast, marking its first move into the print business.

With this new set of products and services, Mailchimp is now aiming to give small businesses access to the same capabilities the larger e-commerce players have long had, but without the complexity.

To build tools based on machine learning, one needs data — and that’s something Mailchimp already had.

“We’ve been doing marketing for decades,” Mailchimp CPO Foreman said. “And we have millions of small businesses on the platform. And so not only do we build all these tools ourselves, which allows us to integrate them from a visual design perspective — they’re not necessarily acquisitions — but we have this common data set from years and years of doing marketing across millions of businesses, billions of customers we’re talking to, and so we thought, how can we use intelligence — artificial intelligence, machine learning, etc. — to also sand down how all of these tools connect.”

Chestnut says he isn’t likely to put the company on a similar transformation anytime soon. “I really believe you can only take on one major transformation per decade,” he said. “And so you better pick the right one and you better invest it. We’re all in on this all-in-one marketing platform that’s e-commerce enabled. That is unique enough. And now what I’m trying to get my company to do is go deep.”

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