Claiming a landmark in fusion energy, TAE Technologies sees commercialization by 2030

In a small industrial park located nearly halfway between Los Angeles and San Diego, one company is claiming to have hit a milestone in the development of a new technology for generating power from nuclear fusion.

The twenty year old fusion energy technology developer TAE Technologies said its reactors could be operating at commercial scale by the end of the decade, thanks to its newfound ability to produce stable plasma at temperatures over 50 million degrees (nearly twice as hot as the sun), .

The promise of fusion energy, a near limitless energy source with few emissions and no carbon footprint, has been ten years out for the nearly seventy years since humanity first harnessed the power of nuclear energy.  But a slew of companies including TAE, General Fusion, Commonwealth Fusion Systems and a host of others across North America and around the world are making rapid advancements that look to bring the technology from the realm of science fiction into the real world.

For TAE Technologies, the achievement serves as a validation of the life’s work of Norman Rostoker, one of the company’s co-founders who had devoted his life to fusion energy research and died before he could see the company he helped create reach its latest milestone.

“This is an incredibly rewarding milestone and an apt tribute to the vision of my late mentor, Norman Rostoker,” said TAE’s current chief executive officer, Michl Binderbauer, in a statement announcing the company’s achievement. “Norman and I wrote a paper in the 1990s theorizing that a certain plasma dominated by highly energetic particles should become increasingly better confined and stable as temperatures increase. We have now been able to demonstrate this plasma behavior with overwhelming evidence. It is a powerful validation of our work over the last three decades, and a very critical milestone for TAE that proves the laws of physics are on our side.”

Rostoker’s legacy lives on inside TAE through the company’s technology platform, called, appropriately, “Norman”. In the last 18 months that technology has demonstrated consistent performance, reaching over 50 million degrees in several hundred test cycles.

Six years ago, the company had proved that its reactor design could sustain plasma indefinitely — meaning that once the switch is flipped on a reaction, that fusion reaction can continue indefinitely. Now, the company said, it has achieved the necessary temperatures to make its reactors commercially viable.

It’s with these milestones behind it that TAE was able to raise an additional $280 million in financing, bringing its total up to $880 million and making it one of the best financed private nuclear fusion endeavors in the world.

“The Norman milestone gives us a high degree of confidence that our unique approach brings fusion within grasp technologically and, more important, economically,” Binderbauer said. “As we shift out of the scientific validation phase into engineering commercial-scale solutions for both our fusion and power management technologies, TAE will become a significant contributor in modernizing the entire energy grid.”

The company isn’t generating energy yet, and won’t for the foreseeable future. The next goal for the company, according to Binderbauer, is to develop the technology to the point where it can create the conditions necessary for making energy from a fusion reaction.

“The energy is super tiny. It’s immaterial. It’s a needle in the haystack,” Binderbauer said. “In terms of its energy discernability, we can use it for diagnostics.”

TAE Technologies Michl Binderbauer standing next to the company’s novel fusion reactor. Image Credit: TAE Technologies

Follow the sun

It took $150 million and five iterations for TAE Technologies to get to Norman, its national laboratory scale fusion device. The company said it conducted over 25,000 fully-integrated fusion reactor core experiments, optimized using machine learning programs developed in collaboration with Google and processing power from the Department of Energy’s INCITE program, which leverages exascale-level computing, TAE Technologies said.

The new machine was first fired up in the summer of 2017. Before it could even be constructed TAE Technologies went through a decade of experimentation to even begin approaching the construction of a physical prototype. By 2008, the first construction began on integrated experiments to make a plasma core and infuse it with some energetic particles. The feeder technology and beams alone cost $100 million, Binderbauer said. Then the company needed to develop other technologies like vacuum conditioning. Power control mechanisms also needed to be put in place to ensure that the company’s 3 megawatt power supply could be stored in enough containment systems to power a 750 megawatt energy reaction.

Finally, machine learning capabilities needed to be tapped from companies like Google and compute power from the Department of Energy had to be harnessed to manage computations that could take what had been the theorems that defined Rostoker’s life’s work, and prove that they could be made real.

“By the time Norman became an operating machine we had four generations of devices preceding it. Out of those there were two fully integrated ones and two generations of incremental machines that could do some of it but not all of it.”

Fusion energy’s burning problems

While fusion has a lot of promise as a zero-carbon source of energy, it’s not without some serious limitations, as Andy Jassby, the former principal physicist at the Princeton Plasma Physics Lab noted in a 2017 Bulletin of the Atomic Scientists article.

Jassby wrote:

Earth-bound fusion reactors that burn neutron-rich isotopes have byproducts that are anything but harmless: Energetic neutron streams comprise 80 percent of the fusion energy output of deuterium-tritium reactions and 35 percent of deuterium-deuterium reactions.

Now, an energy source consisting of 80 percent energetic neutron streams may be the perfect neutron source, but it’s truly bizarre that it would ever be hailed as the ideal electrical energy source. In fact, these neutron streams lead directly to four regrettable problems with nuclear energy: radiation damage to structures; radioactive waste; the need for biological shielding; and the potential for the production of weapons-grade plutonium 239—thus adding to the threat of nuclear weapons proliferation, not lessening it, as fusion proponents would have it.

In addition, if fusion reactors are indeed feasible—as assumed here—they would share some of the other serious problems that plague fission reactors, including tritium release, daunting coolant demands, and high operating costs. There will also be additional drawbacks that are unique to fusion devices: the use of a fuel (tritium) that is not found in nature and must be replenished by the reactor itself; and unavoidable on-site power drains that drastically reduce the electric power available for sale.

TAE Technologies is aware of the problems, according to a spokesperson for the firm, and the company has noted the issues Jassby raised in its product development, the spokesperson said.

“All the callouts to tritium is exactly why TAE has been focused on pB-11 as its feedstock from the very beginning (early 90’s).  TAE will reach D-T conditions as a natural stepping stone to pB-11, cause it cooks at ‘only’ 100M c, whereas pB-11 is upwards of 1M c,” the spokesperson wrote in a response. “It would seem like a much harder accomplishment to then scale to 1M, but what this milestone proves is the ‘Scaling law’ for the kind of fusion TAE is generating – in an FRC (the linear design of “Norman”, unlike the donut Tokamaks) the hotter the plasma, the more stable it becomes. It’s the opposite of a [Tokamak].  The milestone gives them scientific confidence they can increase temps beyond DT to pB11 and realize fusion with boron — cheap, aneutronic, abundant — the ideal terrestrial feedstock (let’s not get into mining the moon for helium-3!).”

As for power concerns, the TAE fusion reactor can convert a 2MW grid feed into 750MW shots on the machine without taking down Orange County’s grid (and needing to prove it to SCE), and scale power demand in microseconds to mold and course-correct plasmas in real-time, the spokesperson wrote.

In fact, TAE is going to spin off its power management technology into a separate business focused on peak shaving, energy storage and battery management on the grid and in electric vehicles.

A “safer” fusion technology?

The Hydrogen-Boron, or p-B11, fuel cycle is, according to the company, the most abundant fuel source on earth, and will be the ultimate feedstock for TAE Technologies’ reactor, according to the company. But initially, TAE, like most of the other companies currently developing fusion technologies will be working with Deuterium-Tritium as its fuel source.

The demonstration facility “Copernicus” which will be built using some of the new capital the company has announced raising, will start off on the D-T fuel cycle and eventually make the switch. Over time, TAE hopes to license the D-T technology while building up to its ultimate goal.

Funding the company’s “money by milestone” approach are some fo the world’s wealthiest families, firms, and companies. Vulcan, Venrock, NEA, Wellcome Trust, Google, and the Kuwait Investment Authority are all backers. So too, are the family offices of Addison Fischer, Art Samberg, and Charls Schwab.

“TAE is providing the miracles the 21st century needs,” said Addison Fischer, TAE Board Director and longtime investor who has been involved with conservation and environmental issues for decades. Fischer also founded VeriSign and is a pioneer in defining and implementing security technology underlying modern electronic commerce. “TAE’s most recent funding positions the company to undertake their penultimate step in implementing sustainable aneutronic nuclear fusion and power management solutions that will benefit the planet.”

#department-of-energy, #energy, #energy-storage, #fusion-power, #google, #los-angeles, #nea, #nuclear-energy, #nuclear-fusion, #san-diego, #tc, #venrock, #verisign, #vulcan

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Rapid raises $12M for its manufacturing robotics

Bay Area-based Rapid Robotics today announced a $12 million Series A. The new round, led by NEA, brings the company’s total funding up to $17.5 million. It joins a recently closed seed round, announced way back in November of last year. Existing investors Greycroft, Bee Partners and 468 Capital also took part in the round.

We noted at that stage that COVID-19 had a sizable impact on robotics investment. At the very least, the pandemic has served to accelerate interest in automation, as many “non-essential” workers have been unable to travel to their jobs. At present, manufacturing jobs often lack the ability to perform remotely.

Rapid notes that the company’s tech has been involved with the production of some 50 million parts over the past year, over a wide variety of different manufacturing verticals. And, like his predecessor, President Biden has already begun talking up strategies to return manufacturing jobs to the U.S. Of course, ambitious as it might be, any plan is going to have to be a balancing act between human jobs and automation.

The company notes the longstanding issue with human operators in these roles. “If we don’t solve this problem, U.S. manufacturers will never be able to compete in a global market,” CEO Jordan Kretchmer said in a release. “It’s really that simple.”

Rapid’s main value add here is ease of use. The company creates systems designed to get up and running quickly.

#funding, #manufacturing, #nea, #rapid-robotics, #recent-funding, #robotics, #startups

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Tony Florence, the low-flying head of NEA’s tech practice, on the art of building household brands

Tony Florence isn’t as well known to the public as other top investors like Bill Gurley or Marc Andreessen, but he’s someone who founders with SaaS and especially marketplace e-commerce companies know — or should. He’s responsible for the global tech investing activities for NEA, one of the world’s biggest venture firms in terms of assets under management (it closed its newest fund with $3.6 billion last year).

Florence has also been involved with a long list of e-commerce brands to break through, including Jet, Gilt, Goop, Casper, Letgo, and Moda Operandi.

It’s because we talked earlier this week with one of his newer e-commerce bets, Maisonette, that we wanted to ask him about brand building more than a year into a pandemic that has changed the world in both fleeting and permanent ways. We wound up talking about how customer acquisition has changed; what he thinks of the growing number of companies trying to roll up third-party sellers on Amazon; and how upstarts can maintain momentum when even younger companies become a shiny new fascination for customers.

Note: one topic that he couldn’t and wouldn’t comment on is the future of one famed founder who Florence has backed twice, Marc Lore, who stepped down from Walmart last month to begin building what he recently told Vox is a multi-decade project to build “a city of the future” supported by “a reformed version of capitalism.”

Part of our chat with Florence, lightly edited for length and clarity, follows:

TC: You’ve funded a number of very different businesses that have managed to grow even as Amazon has eaten up more of the retail market. Is there any sector or vertical you wouldn’t back because of the company?

TF: You have to be thoughtful about Amazon. I wouldn’t say there’s one particular area that you either can ignore or feel like you’re completely comfortable and open to, given the scale of their platform. At the same time, there are founding principles and fundamentals that we think about as they relate to companies being able to compete and operate successfully.

TC: And these are what? You’ve backed Marc Lore, Philip Krim (of Casper), Sylvana and Luisana of Maisonette. Do they have something in common?

TF:  Sometimes [founders] come at the problem organically; they’re living it [and want to solve it]. Other times, somebody like Marc sees a business opportunity and just attacks it. But there are commonalities. These are folks who are very customer centric, who are focused on good, fundamental unit economics, and who are obsessive about their people, their teams. It takes a village to build a young successful company, and all of those founders you mentioned are great at recruiting world-class people. There’s a sense of vision and mission and culture.

When you wake up and decide to do something, the majority of people you talk to just want to tell you the reasons why it can’t work, so it also takes a certain [wherewithal] to have such conviction around what you’re doing that you’re kind of all in on it, and you’re going to break through no matter what.

TC: Maisonette was going to open a brick-and-mortar store but put a pin in that plan because of COVID. Will we go back to seeing direct-to-consumer brands opening real-world locations when this is over? Has the pandemic permanently changed that calculation?

TF: Leading up to the pandemic, a lot of the young DTC companies that were direct-to-consumer brands, and even the traditional e-commerce marketplaces, were experimenting with offline. Some of it was out of necessity, frankly. Sometimes [customer acquisition costs] became so expensive that it was actually cheaper for them to go offline. In other cases, it was done because the customer wanted that closed loop experience, as with [mattress maker] Casper.

A lot of companies [opened these stores] in a contained way it worked really well. It’s very accretive financially to the overall business contribution, margin wise. It was accretive for the overall customer experience. And in many cases, it didn’t cannibalize anything. It just expanded the [total addressable market].

We’re spending a lot of time right now continuing to think through what are the permanent changes that are going to come out of the pandemic, but I would say the omnichannel model has really has started to take shape and succeed if you look at big retailers like Walmart and Target, so I think there will be an omnichannel dynamic to many of these companies that we’re talking about. Also, over the last 12 months, the cost of acquisition and the efficacy of marketing has swung back in the favor of these young companies. It’s improved to a point where we don’t really even need to think about offline.

TC: I know it had become expensive to acquire customers digitally because it was so crowded out there. Did it become less crowded?

TF: There were very few platforms that these companies could use pre pandemic that weren’t oversaturated . . . it was just very competitive, and that would bid up the cost of acquisition. In the last 12 months, you’ve seen big parts of that market go away. With airlines and financial services and a lot of the spend going way down, it’s become a lot cheaper for companies to market digitally.

TC: Still, it feels at times that it’s hard to maintain a brand’s momentum over time; there’s always some new outfit nipping at its heels. How does a brand itself fresh and relevant in 2021?

TF: There’s a hits dynamic — a fad dynamic — in the consumer space, so that’s always a challenge. You [compete by] continually reinventing and adding [to your offerings]. You see that in social categories, you see that in marketplaces [where they add] managed services and other components [like] payments, and you clearly see it in the way some of the direct-to-consumer companies continue to add new products to the mix.

You focus on the core aspects of your brand and its mission and vision and make sure that the customers really feel that. There’s a community dynamic that has really occurred the last four or five years around e-commerce companies. Glossier is a great example of a company that built a great community around a core set of product offerings, and that has really propelled that company beyond its core customer customer base.

There’s also a contextual commerce opportunity. Goop is a great example this; Gwyneth [Paltrow] brilliantly came up with [an effective way] to merge content and commerce, and that’s something a lot of companies in the commerce space have started to invest in.

TC: Content, community and not necessarily speed, so focusing on what Amazon does not. Can I ask: do you think Amazon needs to be reigned in?

TF: If you’re competing with them [in the] cloud market or a commerce market, they’re a very formidable competitor, and you got to take them very, very seriously. They’re at a scale that’s just incredibly impressive. But I do think you’re seeing a lot of innovation around the edges and companies finding areas that Amazon maybe can’t focus on or isn’t focusing on.

TC: What do you think of these Amazon Marketplace roll-ups that we’re seeing? There’s been at least a half of dozen of them that already, including Thrasio, which announced $750 million this week. All are raising money hand over first.

TF: We haven’t made an investment in the area, though we’re watching very closely. It can be a very capital intensive strategy to execute on because you’re buying brands and then bringing them onto the platform to consolidate and grow, but there’s just an enormous long tail to the e-commerce space and this is an opportunity to consolidate that.

TC: Like, an infinite opportunity? How many roll-ups can the market support?

TFL I do think that we’ll see a handful of these companies get to decent scale. The question will be whether you’ve got more of an arbitrage going on [by] buying companies and generating synergies or there’s some fundamental bigger breakthrough. If you could use AI [and] machine learning to understand how to better serve customers and think about customer acquisition a little bit better, that would be really interesting. If there are real economies of scale to the supply chains [or] baseline infrastructure, that would certainly be interesting.

It’s early on. It remains to be seen how this is gonna play out.

Pictured above, left to right: NEA’s global managing director, Scott Sandell, and Florence, who is the head of global tech investing activities at NEA and who works alongside Mohamad Makhzoumi, who oversees the firm’s healthcare practice.

#casper, #ecommerce, #glossier, #goop, #jet, #maisonette, #marc-lore, #marketplaces, #nea, #tc, #tony-florence, #venture-capital

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Maisonette is becoming a go-to brand for fashion-conscious families; here’s how

Maisonette, a four-year-old, New York-based company has aimed from the outset to become a one-stop curated shop for everything a family might need for their young children.

That plan appears to be working. Today, the company — which launched with preppy young children’s apparel and has steadily built out categories that include home decor, home furniture, toys, gear, and accessories — says it doubled its number of customers last year and tripled its revenue. Indeed, even as COVID could have crimped its style — sale of children’s dress-up clothes slowed for a time — its DIY and STEM toy sales shot up 1,400%.

Though the company keeps its sales numbers private, its growth is interesting, particularly given the unabated growth of Amazon, which became the nation’s leading apparel retailer somewhere around the end of 2018.

Seemingly, much of Maisonette’s traction owes to the trust it has built with customers, who see its offerings as high-end yet accessible relative to the many high-end fashion brands that are also increasingly focused on the children’s market, like Gucci and Burberry.

Specifically, the 75-person company has a merchandising team that prides itself on working with independent brands and surfacing items that are hard to find elsewhere.

Maisonette also launched its own apparel line roughly 30 months ago called Maison Me. Focused around “elevated basics” at a more reasonable price point, the line, made in China, is seeing brisk sales to families who buy items time and again as their kids outgrow or wear holes in them, says the company.

It helps that Maisonette’s founders have an eye for what’s chic. Cofounder Sylvana Ward Durrett and Luisana Mendoza Roccia met at Vogue magazine, where Durrett spent 15 years, joining the staff straight from Princeton and becoming its director of events (work that earned her a high profile in fashion circles). Roccia joined straight from Georgetown the same year, 2003, and left as the magazine’s accessories editor in 2008.

For those who might be curious, their former boss, Anna Wintour, is a champion of theirs. Yet they also have some other powerful advocates, including NEA investor Tony Florence, a kind of e-commerce whisperer who has also led previous investments on behalf of his firm in Jet, Goop, and Casper.

NEA is an investor in Maisonette, as is Thrive Capital and the growth-stage venture firm G Squared, which just today announced it led a $30 million round in the company that brings its total funding to $50 million.

Another ally is Marissa Mayer, who first met Durrett back in 2009 when Mayer was still known as Google’s first female engineer its most fashionable executive. Not only has their friendship endured — Mayer says she named one of her twin daughters Sylvana because she adored the name — but Mayer is on the board of Maisonette, where she has presumably helped refine its data strategy, including around an inherent advantage that the company enjoys: its very young customers.

“One of the things that’s really helpful when it comes to data and e-commerce is when you can capture people at a particular life stage,” Mayer explains. “It’s why people liked wedding registries. You get married, then you have children and [the retailer] can follow the children’s ages and start anticipating that customer’s needs and what they’re going to want two years from now.”

In terms of “predictable supply chain, for inventory selection, for just being able to meet that moment, having insight into those stages is really important and helpful,” she says. It can also be very lucrative for Maisonette as it continues to build out its business, notes Mayer,

Certainly, much is working in the company’s favor already. To Mayer’s point, Roccia says that more than half of Maisonette’s sales last year came from repeat customers. More, it already has an audience of more than 800,000 people who either receive emails from the company or follow its social media channels. (Maisonette also features a healthy dose of content at its site.)

Unlike some e-commerce businesses, Maisonette is asset-lite, too. Though it has opened a handful of pop-up stores previously and was contemplating a bigger move into retail (“that’s now on pause,” says Durrett), the company doesn’t have warehouses to manage. Instead, items are shipped directly to customers from the various retailers featured at its site.

Perhaps most meaningful of all, the company is competing in what is a massive and growing market. In the U.S. alone, the children’s apparel market is estimated to be $34 billion. Meanwhile, the children’s market is $630 billion globally. While Maisonette is selling to U.S. customers alone right now, it plans to use some of that new funding to move into international markets, says Roccia, who has been living in Milan with her own four children during the pandemic, while Durrett began working out Maisonette’s mostly empty Brooklyn headquarters in January to create a bit of space from her three.

Indeed, on a Zoom call from their far-flung locations, they talk at length about parents needing to create new space to work from home right now, as well as to update rooms for kids attending virtual school. While no one asked for a global shutdown, home decor is a “category that has picked up due to the Covid effect,” notes Roccia.

Asked what other trends the two are tracking — for example, Maisonette features the mommy-and-me clothing pairings that have become big business in recent years — Roccia says that even with the world shut down, it remains a “huge” trend. “It started with holiday pajamas — that was kind of the catalyst to this whole movement — and now swimwear and just casual dressing has become a pretty big piece of the business, too.”

As for what Durrett has noticed, she laughs. “Llamas are big. We sell a llama music player that we had to bring back on the site several times over the holidays.” Also “rainbows and unicorns. As cliche as it sounds, we literally can’t keep them in stock.”

Unicorns, she adds, “are a thing.”

#e-commerce, #fashion, #marissa-mayer, #nea, #tc, #thrive-capital, #tony-florence, #venture-capital, #vogue

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Renewable investment wave continues as solar lending company Loanpal raises $800 million

Days after the billionaire investor Chamath Palihapitiya announced his involvement in the $1.3 billion acquisition of the solar and home improvement lending business Sunlight Financial, a collection of investors announced a nearly $1 billion cash infusion into Loanpal, another renewable energy and home improvement lender.

The $800 million commitment to Loanpal arrives alongside a flurry of climate commitments from some of the world’s largest investors.

Yesterday, Blackrock chief Larry Fink, released the $9 trillion investment manager’s annual letter calling for more stringent accounting and reporting of climate data, and Bank of America joined 60 other companies in committing to a new reporting standard for climate and sustainability endorsed by the International Business Council and the World Economic Forum. Fink endorses a separate reporting scheme called the Task Force on Climate Related Financial Disclosures that has the backing of some of the biggest financial investors in the world.

These new standards will drive more investment dollars into businesses that are reducing the greenhouse gas emissions that contribute to global climate change. And lending programs incentivizing the switch to more energy efficient appliances and renewable installations are probably the lowest of low hanging fruit for the financial services industry.

That’s one reason why investors like NEA, the WestCap Group, Brookfield Asset Management, and the giant private equity energy investment fund Riverstone Holdings are backing Loanpal.

The deal, which was a secondary transaction to give strategic investors a stake in the business actually wrapped up last year. As a result Scott Sandell, the managing general partner at NEA and a longtime investor in pr and Laurence Tosi, Managing Partner of WestCap Group, have joined the company’s board of directors.

“We invited a number of players into the company,” said Loanpal’s founder, chairman and chief executive Hayes Barnard. The former chief revenue officer for SolarCity before its acquisition by Tesla, Barnard has a long history with solar energy development. At Loanpal he also had the balance sheet to take his pick among would-be investors. “We’re a multi-billion dollar company,” said Barnard.

Loanpal founder chairman and chief executive, Hayes Barnard. Image Credit: Loanpal

“This was us inviting strategic investors into the company and being thoughtful about where they could help and how they could help,” Barnard said.

Loanpal is profitable, has zero debt and throws off monthly dividends to its financial backers. “Today we finance $400 million a month for roughly 15,000 solar systems that are combined with battery systems,” says Barnard. In all, the company has arranged $5.9 billion in consumer finance loans since its launch in 2018. Loanpal also counts around 85% of the top solar firms as vendors and has a staff of around 12,000 sales professionals.

Those numbers allowed the company to bring in board members like Tosi, the former chief financial officer of the multi-billion dollar financial services firm, Blackstone. “He really understands how to bring in capital markets at scale,” said Barnard. 

If anything, the attention from Blackrock, Blackstone, Riverstone and all the financial services firms without references to stones or rocks in their name shows that this is a problem of capital at scale. Decarbonizing the global economy is a $10 trillion business, according to the World Economic Forum (or, for the retail investment crowd, the equivalent of roughly 66.7 billion Gamestops at yesterday’s share price).

The near term market that we’re going to penetrate now is sustainable home solutions that’s a $100 billion market,” Barnard said. 

A significant chunk of that $10 trillion is going to come from the development and integration of new consumer facing appliances and hardware to reduce the consumption of energy. “We believe the battery storage market, the smart thermostat market and the solar market are all intertwined and combined,” said Barnard. “Overall the most important thing is that this is just technology that is better. It was going to scale regardless of who was in the White House. These pieces of technology are better, they save homeowners money.. It’s kind of an IQ test if homeowners want to do it.”

#bank-of-america, #blackrock, #blackstone, #chamath-palihapitiya, #chief-financial-officer, #economy, #energy, #finance, #general-partner, #greenhouse-gas-emissions, #laurence-tosi, #managing-partner, #money, #nea, #officer, #private-equity, #renewable-energy, #riverstone-holdings, #scott-sandell, #solarcity, #tc, #tesla, #white-house, #world-economic-forum

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Datafold raises seed from NEA to keep improving the lives of data engineers

Data engineering is one of these new disciplines that has gone from buzzword to mission critical in just a few years. Data engineers design and build all the connections between sources of raw data (your payments information or ad-tracking data or what have you) and the ultimate analytics dashboards used by business executives and data scientists to make decisions. As data has exploded, so has their challenge of doing this key work, which is why a new set of tools has arrived to make data engineering easier, faster and better than ever.

One of those tools is Datafold, a YC-backed startup I covered just a few weeks ago as it was preparing for its end-of-summer Demo Day presentation.

Well, that Demo Day presentation and the company’s trajectory clearly caught the eyes of investors, since the startup locked in $2.1 million in seed funding from NEA, the company announced this morning.

As I wrote back in August:

With Datafold, changes made by data engineers in their extractions and transformations can be compared for unintentional changes. For instance, maybe a function that formerly returned an integer now returns a text string, an accidental mistake introduced by the engineer. Rather than wait until BI tools flop and a bunch of alerts come in from managers, Datafold will indicate that there is likely some sort of problem, and identify what happened.

Definitely read our profile if you want to learn more about the product and origin story.

Not a whole heck of a lot has changed over the past few weeks (some new features, some new customers), but with more money in its billfold, Datafold is going to keep on growing, hiring and taking on the world of data engineering.

#datafold, #enterprise, #funding, #fundings-exits, #nea, #startups, #tc, #y-combinator

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Sales readiness platform MindTickle raises $100 million led by SoftBank Vision Fund 2

MindTickle, a startup that is helping hundreds of small and large firms improve their sales through its eponymous sales readiness platform, said on Monday it has raised $100 million in a new financing round.

The Pune and San Francisco-headquartered startup’s new financing round was led by SoftBank Vision Fund 2. The round is a combination of debt and equity, the startup said. Existing investors Norwest Venture Partners, Accel Partners, Canaan, NEA, NewView Capital, and Qualcomm Ventures also participated in the round, which according to a person familiar with the matter, valued the eight-year-old startup at roughly $500 million, up from about $250 million last year.

The vast majority of this $100 million fund is equity investment, said Krishna Depura, co-founder and chief executive of MindTickle, in an interview with TechCrunch. He declined to disclose the specific amount, however, or comment on the valuation.

We used to live in a seller’s world, where buyers had a small selection of choices from which they could pick their products. “You wanted to buy a car, there would be only one new car model every four years. Things have changed,” said Depura, noting that customers today have no shortage of companies trying to sell them similar lines of products.

While that’s great for customers, it means that companies have to put more effort to make a sale. A decade ago, as Depura watched Facebook and gaming firms like Zynga develop addictive products and services, he wondered if some of these learnings could be baked directly into modern age sales efforts.

That was the inception of MindTickle, which now helps companies guide their customer-facing teams. Regardless of what these firms are attempting to sell, they are competing with dozens of firms, if not more, and customers have ever-so-declining patience to hear them.

MindTickle, whose name is inspired from the idea of gamifying mindsets, allows companies to train and upskill their salespeople at scale, and uses role playing methods to help them practice their pitch, and how to handle a customer’s queries.

Depura said the platform helps salespeople measure their improvement in revenue metrics and offers feedback on the calls they made. The platform utilizes machine learning engines to serve personalized remediations and reinforcements to salespeople, he said.

More than 200 enterprises, including more than 40 of the Fortune 500 and Forbes Global 2000 firms, are among MindTickle’s clients today — though, citing confidential agreements, the firm said it can’t disclose several names. Some of the names it did share include MongoDB, Nutanix, Qualtrics, Procore, Square, Janssen, Cloudera, Dexcom, Merck & Co., and Benetton Group.

As of this writing, MindTickle was ranked the fifth best product for sales on G2, a popular marketplace for software and services.

“MindTickle’s track record of growth, quality of product and marquee customer base highlights their strengths,” said Sumer Juneja, Partner at SoftBank Investment Advisers, in a statement. “By delivering engaging and personalized training to users, MindTickle is uniquely placed to support businesses to increase revenue generation and extend critical capabilities within their existing workforce.” The Japanese investment group, which began conversations with MindTickle about three months ago, is exploring more investments in SaaS categories.

The new funding capital will allow MindTickle, which employs about 400 people in the U.S., Europe, and India, to further establish this new category, said Depura. The startup is developing new product features and will deploy the new funds to further grow in Europe, and the U.S., which is already one of its key markets.

More to follow…

#accel-partners, #asia, #canaan, #funding, #nea, #newview-capital, #norwest-venture-partners, #qualcomm-ventures, #saas, #softbank, #softbank-vision-fund-2

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Pulumi raises $37.5M Series B for its cloud engineering platform

Seattle-based Pulumi, one of the newer startups in the ”infrastructure-as-code” space, today announced that it has raised a $37.5 million Series B funding round led by NEA. Previous investors Madrona Venture Group and Tola Capital also participated in this round, which brings the total investment in the company to $57.5 million.

The new investment follows the launch of Pulumi 2.0, which got the company closer to its vision of becoming what the team calls a ‘cloud engineering platform’ and impressive growth over the last, with a 10x growth in adoption in the last twelve months.

“We started with infrastructure as code, because we felt like that was a foundational piece that gave us the programming model, along with the cloud resource model,” Pulumi co-founder and CEO Joe Duffy told me. “That was an important place to start. With [Pulumi] 2.0,  we launched support for testing, for policy as code — so that you could actually apply governance and compliance as part of your infrastructure management — and really helping more of the team work together.”

Indeed, after starting with a focus on infrastructure teams, Pulumi is now looking to expand across teams.

“The infrastructure team is becoming the nucleus that pulls the whole team together. We’re actually calling this cloud engineering,” Duffy explained. “What we’re calling cloud engineering is developers using the cloud in a first-class way, infrastructure teams helping them do that and increasingly pulling in security engineers to make sure that governance is part of the story as well. The 2.0 release was our first time exploring those adjacencies and trying to paint a path to realizing the full Pulumi vision.”

Infrastructure as code isn’t necessarily new, of course. The promise of Pulumi is that it isn’t hobbled by any legacy products but that the team designed it as a cloud-native product from the ground up. That’s something NEA’s Aaron Jacobson, who will join the company’s board, also stressed.

“If you think about how fast the cloud has evolved just in 10 years, Pulumi is built in a place of multi-cloud, of Kubernetes, of serverless, Jacobson said. “And much of the original infrastructure-as-code constructs didn’t even have those in mind. Since Pulumi is newer to market and has come after all those constructs, it just has better integration, it’s just is a more delightful experience to developers.”

NEA’s Scott Sandell is actually taking this a bit further. “Venture capitalists are in the business of pattern recognition,” he said. “And the pattern that I recognized actually goes all the way back to when I was a product manager in the windows group. And I saw that developers don’t want to have to deal with complexity — they want to have the complexity managed for them.” That, he argues, is what Pulumi does for developers — and it surely helped the both Duffy and his co-founder and Pulumi executive chairman Eric Rudder left successful careers at Microsoft to build this company.

In addition to the new funding, Pulumi also today announced that it brought in a number of new executives, including industry veterans Jay Wampold as CMO, Lindsay Marolich as senior director of demand generation, Kevin Kotecki as VP of sales and Lee-Ming Zen as VP of engineering.

#aaron-jacobson, #cloud, #cloud-computing, #cloud-infrastructure, #co-founder, #developer, #madrona-venture-group, #microsoft, #nea, #pulumi, #recent-funding, #scott-sandell, #seattle, #startups, #tola-capital, #vp-of-sales, #windows

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Willow, the startup making the wearable breast pump, raises $55 million

Willow, the startup company making a new, wearable, breast pump for women, is capping off a frenetic 2020 with $55 million in fresh funding as it looks to expand its product line to more offerings for new mothers.

The company is coming off a year which saw sales increase, and Laura Chambers, the former eBay and Airbnb manager, take over as chief executive and now, with the new capital, it expects to be bringing new products to market beyond the breast pump in 2021.

A March 2020 report from Frost & Sullivan put the total size of the femtech market, including technologies for mothers, at just over $1 billion with growth rates of 12.9%. So the category is small, but growing quickly as more tools come in to provide services in what is a woefully underinvested sector. Indeed, the $155 million that Willow has raised to date puts the company among the upper echelon of women’s health investments.

Contrast that figure with Ro, the storied health brand that launched its subscription medication service for erectile dysfunction with an $88 million investment round.

For women who breast feed, the problems associated with pumping can be legion.

“A lot of women talk about how it’s almost like the pump runs their life,” Naomi Kelman, the founder and former CEO of Willow, told TechCrunch. “Everyone is told, if you don’t breastfeed or pump on a regular basis, your [breastmilk] supply goes down and then breastfeeding is finished for you.”

That’s why startup companies like Willow and Naya Health, as well as established companies like Medela and Lansinoh are developing technologies to not only make pumping breast milk more efficient, but also provide more comfort and dignity to users.

“Through our longstanding relationship with Willow, we’ve been able to see the true impact they have had in helping mom’s balance motherhood in a modern world,” said Josh Makower, Willow’s co-founder and chairman of the company’s board, as well as a General Partner at Willow investor, NEA, in a statement. “Willow is thriving and growing to meet the needs of all moms during these unique times, and we are proud to be a partner in advancing innovation in the femtech field.”

With Chambers at the helm, and the $55 million in new financing in hand from investors led by NEA, Meritech Capital Partners, and including Lightstone Ventures along with new investor Perceptive Advisors, Willow will be doing far more than just making breast pumps and will be looking to expand its footprint to international markets.

“The first problem we wanted solve was pumping and the wonderful wearable mobile pump. That was always product number one. There’s more innovation we can do around pumping. Moms would love us to support them with more hardware and more software,” Chambers said. We’re also working with moms to figure out where else they need support. Mothers are remarkably unsupported in their motherhood journey. We are working with moms to figure out what’s important for them and we’re building that.”

#airbnb, #breast-pump, #ebay, #femtech, #health, #laura-chambers, #meritech-capital-partners, #naya-health, #nea, #perceptive-advisors, #tc, #willow

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Kleiner prints gold with Desktop Metal, netting a roughly 10x return

Desktop Metal is one of the most interesting startups to come out of Boston in some time, with a technology designed to “print metal.” That’s a potentially huge expansion for the 3D printing market, where flexible polymers are the norm, a material that limits the kinds of products that these machines can produce. Little surprise then that the company caught the eye of a SPAC a few weeks ago and if all goes well, will begin publicly trading later this year.

This morning, the SPAC (called Trine) and startup have filed their latest financial and shareholders report with the SEC, giving us some sense of who the big VC winners are here.

First, let’s take a look at Desktop Metal’s preferred share price since its Series A back in 2015. The company has seen its price soar over the past five years, from $0.53 for its Series A to just slightly more than $10 for its Series E shares it sold last year.

According to its filing, Desktop Metal’s largest VC investors are NEA with 17.66% ownership, Lux with 11.59%, Kleiner with 11.10%, GV (formerly Google Ventures) at 8.89%, Northern Trust with 6.96% and KDT, a Koch Industries subsidiary, with 5.89%.

Desktop Metal is valued at $1.83 billion of the total $2.5 billion SPAC price. The difference in those two figures comes from the $305 million of capital held by the SPAC and $275 million in a private investment into the company that will be conducted as part of the acquisition, along with fees and some other ancillary financials.

What does that look like from a returns perspective? Desktop Metal raised six rounds of capital (Series A through Series E & E-1), raising a total of $438 million according to the company’s filings. Using the numbers from these filings, we can do some back-of-the-envelope math to make some rough guesses at how the individual funds returned on their investment.

The biggest overall winner in terms of multiples on investment is Kleiner Perkins, which sits at a roughly 10x return on its full investment into the company. Kleiner took a fifth of the Series A, putting in roughly $3 million. It then proceeded to double down in the Series B, where it invested approximately $13 million, before tapering off its pro rata in later rounds. Given that its $20.4 million in invested capital is skewed toward the earliest rounds, that drove up its return multiple.

NEA, perhaps owing to its larger fund scale, constantly invested in the company across all of its rounds, ultimately investing about $57 million. It invested in Desktop Metal through its seed program, and also did about 43% of the Series A. It continued to invest heavily across all the company’s growth rounds as well. Ultimately, NEA had a computed multiple on investment of roughly 5.67x.

Finally among early-stage investors, Lux managed to secure a 5.31x return, and it similarly plowed money into the company across all of its rounds, albeit slightly less aggressively than NEA, ultimately investing about $40 million into Desktop Metal.

Heading over to the growth investors, GV started investing in the Series C round and invested a total of about $65 million across the later stage, securing a return of 2.5x. Northern Trust came in on the Series D and netted 1.6x, and KDT of Koch Industries ended up with about 1.44x through its mezzanine capital infusion.

This includes all investors with more than 5% ownership in the company, per SEC regulations. Approximately $100 million of the company’s $438 million in fundraising is not disclosed on its cap table, so there might be other VCs with swell returns that weren’t obligated to disclose their shares. In addition, I am not including some minor common share stakes held by these venture firms, which are small enough to not radically change their return profile.

Desktop Metal’s quick appreciation in value over just five years will also give these firms very strong IRRs for their investments.

Given that Desktop Metal is heading to the public markets through a SPAC, all of these investors have an option to sell their stakes or hold on to them going forward. If they hold and Desktop Metal performs well, their stakes could increase dramatically in value, driving much higher returns. The reverse is naturally also true. Once public, the firms have flexibility on if and when to exit, and that decision will ultimately determine their final realized returns to LPs.

For now though, this is a great checkpoint to see just how successful some of these venture firms were on this deal. Maybe firms can print gold with those 3D printers after all.

#desktop-metal, #finance, #fundings-exits, #google-ventures, #kleiner-perkins, #lux-capital, #nea, #tc, #venture-capital

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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#DealMonitor – Travel-Startup Omio sammelt 100 Millionen ein


Im aktuellen #DealMonitor für den 19. August werfen wir wieder einen Blick auf die wichtigsten, spannendsten und interessantesten Investments und Exits des Tages. Alle Deals der Vortage gibt es im großen und übersichtlichen #DealMonitor-Archiv.

INVESTMENTS

Omio
+++ Temasek, Kinnevik, Goldman Sachs, NEA und Kleiner Perkins investieren 100 Millionen US-Dollar in das Berliner Travel-Startup Omio. “Mit dem zusätzlichen Kapital kann sich Omio weiter auf seine Vision fokussieren, das globales Reisen für den Kunden so einfach wie möglich zu gestalten. Die Mittel sollen für das fortgesetzte organische Wachstum sowie opportunistische M&A-Aktivitäten verwendet werden, um so das einzigartige Produkt- und Dienstleistungsangebot des Unternehmens weiter zu stärken”, teilt das Startup mit. Omio gehört damit weiter zu den ganz großen Wetten in der Berliner Startup-Szene. In den vergangenen Jahren pumpten Investoren schon fast 300 Millionen Dollar in das Unternehmen, das früher als GoEuro bekannt war. Derzeit wirken 350 Mitarbeter für die Reiseplattform über die Nutzer Bahn-, Bus- sowie Flugtickets vergleichen und auch buchen können. Während der Corona-Krise dürfte die Jungfirma arg gelitten haben. Inzwischen sieht aber wieder gut aus bei Omio: “Insbesondere in Deutschland und Frankreich liegen wir trotz geringer Marketingausgaben bereits wieder bei über 50 Prozent verglichen mit unseren Buchungen vor Covid-19”.

Element 
+++ Sony Financial Ventures und der japanische Geldgeber Global Brain sowie Finleap, das Versorgungswerk der Zahnärztekammer Berlin und SBI Investment investieren 10 Millionen Euro in Element – siehe FinanceFWD. Signal Iduna, Finleap, Engel & Völkers Capital, SBI Investment und Alma Mundi Ventures investierten zuletzt 23 Millionen in Element, einen Zulieferer von digitalen Versicherungsprodukten. Zielgruppe der Jungfirma, die 2017 von Finleap angeschoben wurde, sind andere Startups, etablierte Unternehmen, Händler und auch bestehende Versicherer.

Siegfried Gin
+++ Der Spirituosenhersteller Diageo investiert über den unabhängigen Accelerator Distill Ventures in Rheinland Distillers, dem Unternehmen hinter Siegfried Rheinland Dry Gin. “Wie bei allen Unternehmen, die mit Distill Ventures zusammenarbeiten, bleiben die Gründer von Rheinland Distillers Mehrheitseigentümer, während Diageo eine Minderheitsbeteiligung hält”, teilt das Unternehmen mit. Rheinland Distillers wurde 2014 gegründet.

EXITS

BSI
Die Schweizer Beteiligungsgesellschaft Capvis übernimmt die Mehrheit an der Badener Firma BSI Business Systems Integration, einem Anbieter von Softwarelösungen für Customer Relationship Management (CRM). “Das BSI Team um Jens Thuesen, Christian Rusche und Markus Brunold bleibt investiert und setzt seine erfolgreiche Arbeit zusammen mit Capvis fort”, teilt das Unternehmen mit. BSI wurde 1996 in der Schweiz gegründet und beschäftigt über 320 Mitarbeiter an Standorten in Baar, Baden, Bern, Darmstadt, Düsseldorf, Hamburg, München und Zürich.

Achtung! Wir freuen uns über Tipps, Infos und Hinweise, was wir in unserem #DealMonitor alles so aufgreifen sollten. Schreibt uns eure Vorschläge entweder ganz klassisch per E-Mail oder nutzt unsere “Stille Post“, unseren Briefkasten für Insider-Infos.

Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): azrael74

#aktuell, #b2b, #berlin, #bsi, #capvis, #diageo, #distill-ventures, #element, #emasek, #finleap, #goldman-sachs, #insurtech, #kinnevik, #kleiner-perkins, #nea, #omio, #rheinland-distillers, #siegfried-gin, #travel, #venture-capital

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Omio takes $100M to shuttle through the coronavirus crisis

Multimodal travel platform Omio (formerly GoEuro) has raised $100M in late stage funding to help see its business through the coronavirus crisis. It also says it’s eyeing potential M&A opportunities within the hard-hit sector.

New and existing investors in the Berlin -based startup participated in the late stage convertible note, although omio isn’t disclosing any new names. Among the list of returning investors are: Temasek, Kinnevik, Goldman Sachs, NEA and Kleiner Perkins. Omio’s business has now pulled in around $400M in total since being founded back in 2013 — with the prior raise being a $150M round back in 2018.

In a supporting statement on the latest raise, Georgi Ganev, CEO of Kinnevik, said: “We are very impressed how fast and effective Omio adapted to such an unprecedented crisis for the global travel industry. The management team has delivered quickly and we can see the robustness of the business model which is well diversified across markets and transport modes. We are looking forward to supporting Omio on its way to become the go-to destination for travellers across the world.”

While COVID-19 has thrown up major headwinds to global tourism and travel — with foreign trips discouraged by specific government quarantine requirements, and the overarching requirement for people to maintain social distancing meaning certain types of holidays or activities are less attractive or even feasible, Omio is nonetheless sounding upbeat — reporting a partial recovery in bookings this summer in Europe.

In Germany and France it says bookings are above 50% of the pre-COVID-19 level at this point, despite only “marginal” marketing spend over the crisis period.

Its business is likely better positioned than some in the travel space to adapt to changes in how people are moving around and holidaying, given it caters to multiple modes of transport. The travel aggregator platform spans flights, rail, buses and even ferry routes, allowing users to quickly compare different modes of transport for their planned journey.

More recently Omio has added car sharing and car rentals to its platform, including via a partnership with rentalcars.com. So as travellers in Europe have adapted to living with COVID-19 — perhaps opting to take more local trips and/or avoiding mass transit when they go on holiday — it’s in a strong position to cater to changing demand through its partnerships with ground transportation networks and providers.

“That diversification in terms of not depending on a single mode of transport has really helped the business come back much stronger, because we’re not depending on — for example — air or bus,” CEO and founder Naren Shaam tells TechCrunch. “The diversification has helped us.”

“People will travel a lot more to smaller regions, explore the countryside a little more,” he predicts, suggesting the current dilution of travel focus it’s seeing — away from usual tourist hotspot destinations in favor of a broader, more rural mix of places — augurs a wider shift to more a diversified, more sustainable type of travel being here to stay.

“It’s not longer just airport to airport travel,” he notes. “People are traveling to where they want to go — and it’s a lot more distributed across geographies, where people want to explore. A platform like ours can accelerate this behaviour because we serve, not just flights, but trains, buses, even ferries etc, you can actually reach any destination with us.”

Direct booking via Omio’s platform is possible where it has partner agreements in place (so not universally across all routes, though it may still be able to offer route planning info).

Its multimodal booking mix extends to 37 countries in Europe and North America — where it launched at the start of this year. Last year it acquired Rome2Rio, bulking out its global flight and transport planning inventory. The grand vision is “all transport, end to end, in a single product”, as Shaam puts it — although executing on that means continuing to build out partnerships and integrations across its market footprint. 

Asked whether the new funding will give Omio enough headroom to see it through the current coronavirus crisis, Shaam tells TechCrunch: “The unknown unknown is how long the crisis lasts. But as we can see if the crisis lasts a couple of years we will make it through that.”

He says the raise will help the business come out of the crisis “stronger” — by enabling Omio to spend on adapting its product to meet changing consumer demand, such as the shift to ground transportation. “All of those things we can use these capital to shape the future of how the travel industry actually interacts with consumers,” he suggests.

Another shift in the industry that’s been triggered by the coronavirus relates to consumer expectations around information. In short, people expect a lot more travel intel up front.

“We have hypotheses on what comes back [post-crisis]. I think travel will be a lot more information centric, especially coming out of COVID-19. Customers will seek clarity in the near term around basic information around what regions can I travel to, do I need to quarantine, do I need to wear a mask inside the train etc,” he says.

“But that’ll drive a type of consumer behavior where they are seeking more information and companies will need to provide this information to satisfy the consumer needs of the future. Because consumers are getting used to having relevant information at the right point in time. So it’s not a data dump of all information… it’s when I get to the train station, what do I need to do?

“Each of those is almost hyperlocal in terms of information and that’s going to drive a change in consumer behaviour.”

Omio’s initial response to this need for more information up front was the launch of a hub — called the Open Travel Index — where users can look up information on restrictions related to specific destinations to help them plan their journey.

However he admits it’s a struggle to keep up with requirements that can switch over night (in one recent example, the UK added France to a list of countries from which returning travellers must self quarantine for two weeks — leading to a mad dash by scores of holidaymakers trying to beat a 4am deadline to get back on UK soil).

“This is a product we launched about a month and a half ago that tells you, if you’re based in the UK, where you can go in Europe,” he says. “We need to update it faster because information’s changing very, very quickly — so it’s on us now to figure out how to keep up with the constant changes of information.”

Discussing other COVID-19 changes, Shaam points to the shift to apps that’s being accelerated by the public health crisis — a trend that’s being replicated in multiple industries of course, not just travel.

“More than half of the ground transport industry was booked at a kiosk at a station [before COVID-19]. So this will drive a clear change with people uncomfortable touching a kiosk button,” he adds, arguing that that shift will help create better consumer products in the sector.

“If you imagine the kind of consumer products that the app/web world has created you can imagine that should come to the consumer experiences in travel,” he suggests. “So these are the things, I think, that will come in terms of consumer behavior and it’s up to us to make sure that we lead that change as a company.”

“We’re investing quite heavily in some of the other shifts that we’re seeing — in terms of days to departure, flexibility of fares, more insurance type products so you can cancel,” he adds. “We’re also trying to help customers in terms of whether they can go.

“We’re investing heavily in routing so you can connect modes of transport, not just flights, so you can travel longer distances with just trains. And we’re also in talks with all our suppliers to say hey, how can we help you come back — because not all suppliers are state monopolies. There’s a lot of small, medium suppliers on our product and we want to bring them back as well so we’re investing there as well.”

On M&A, Shaam says growth via acquisition is “definitely on the radar for us”. Though he also says it’s not top of the priority list right now.

“We’ve actively got our ears out. More so now, going forward, than looking back — because the last four months, imagine what we went through as a travel company, I just wanted to stablize that situation and bring us to a stable position,” he says.

“We are still in COVID-19. The situation’s not yet over, so our primary goal coming out of this is very much investing in the shifts in consumer behavior in our core product… Any M&A acquisitions we’ll do is more opportunistic, based on [factors like] pricing and what’s happening in the industry.

“But more of our capital and my time and everything will go a lot more to build the future of transport. Because that’s going to change so much more for so many millions of consumers that use our product today.”

There is still plenty of work that can be done on Omio’s core proposition — aka, linking up natural travel search for consumers by knitting together a diverse mix and range of service providers in a way that shrinks the strain of travel planning, and building out support for even more multifaceted trips people might wish to take in future.

“No one brings the natural search for consumers. Consumers just want to go London to Portsmouth. They don’t say ‘London Portsmouth train’. They do that today because that’s what the industry forces them to do — so by enabling this core product to work where you can search any modes of transport, anywhere in Europe, one click to buy, everything is a simple, mobile ticket, and you use the whole product on the app — that’s the big driver for the industry,” Shaam adds.

“On top of that you’ve got shifts towards ground transport, shifts towards app, shifts towards sustainability, which is a big topic — even pre-COVID-19 — that we can actually help drive even more change coming out of this. These are the bigger opportunities for us.”

Uncertainty clearly remains a constant for the travel sector now that COVID-19 has become a terrible ‘new normal’. So even with an unexpected summer travel bump in Europe it remains to be seen what will happen in the coming months as the region moves from summer to winter.

“In general the overall business outlook we’re taking is purely something of more caution,” says Shaam. “We just don’t know. Anything at all with respect to COVID-19, no one knows, basically. I’ve seen a number of reports in the industry but no one really knows. So in general our outlook is one of caution. And that’s why we were surprised in our uptick already through the summer. We didn’t even expect that kind of growth with near zero marketing spend levels.”

“We’ll adapt,” he adds. “The business is high variable costs so we can scale up and down fairly easily, so it’s asset light and these things help us adapt. And let’s see what happens in the winter.”

Over in the US — where Omio happened to launch slightly ahead of the COVID-19 crisis — he says it’s been a very different story, with no bookings bump. “No surprise, given the situation there,” he says, emphasizing the importance of government interventions to help control the spread of the virus.

“Governments play a very important role here. Europe has done a superior job compared to a lot of other regions in the world… But entire economies [in the region] depend on tourism,” he says. “Hopefully entire [European] countries shouldn’t go into shutdowns again because the systems are strong enough to identify local spike in cases and they ring fence it very quickly and can act on it. It’s the same as us as a company. If there’s a second wave we know how to react because we’ve gone through this horrible phrase one… So using those learnings and applying them quickly I think will help stabilize the industry as a whole.”

#berlin, #car-rentals, #car-sharing, #consumer-products, #coronavirus, #covid-19, #europe, #france, #fundings-exits, #germany, #goeuro, #goldman-sachs, #kinnevik, #kleiner-perkins, #london, #ma, #naren-shaam, #nea, #north-america, #omio, #rome2rio, #tc, #temasek, #transport, #transportation, #travel, #travel-industry, #united-kingdom, #united-states

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Stanford students are short-circuiting VC firms by investing in their peers

Stanford’s success in spinning out startup founders is a well-known adage in Silicon Valley, with alumni founding companies like Google, Cisco, Cloudflare, LinkedIn, Youtube, Snapchat, Instagram, and yes, even TechCrunch. And venture capitalists routinely back more founders coming out of the Stanford business program than any other university in the country.

One group of Stanford graduate students is well-aware of their favorable odds, and think that they should be able to cash in their classmates, too — not just accredited investors and the super-wealthy.

They have put together, Stanford 2020, a new fund created entirely by Stanford classmates to invest in their fellow students’ ventures.

The idea was spurred by six students, who after a year of working with Fenwick & West law firm to find a suitable legal structure landed on creating an investment club — multiple parties can invest together as long as they have some form of shared ties.

Steph Mui, a founding member of Stanford 2020 and former venture capital associate at VC firm NEA, formed the club in defiance of the inaccessibility of angel investing, which she described as an elite Silicon Valley status symbol.

“Especially in Silicon Valley where it seems kind of a status symbol and only accredited people can do it, it feels very elite” she said. “We started thinking more about if we can actually make this something that the whole class could participate in, or at least make it more accessible to more than just like these small pockets of people that do it behind closed doors?”

Stanford 2020 club members must put up a minimum of $3,000 to join the investment club, and any eventual returns will be distributed proportionally to the investment each makes. So far, Mui tells TechCrunch that $1.5 million has been raised across 175 investors, with 50 investors willing to give $500,000 on the waitlist. In fact, the club is so “oversubscribed” that it is working to give money back.

Mui estimates that roughly 40% of the class is participating in the club. The founding members are being defined as “board members” who were recruited for passion and for diversity in background, professional interests, and past leadership experience.

The group plans to invest $50,000 to $100,000 in startups depending on round size and valuation.

Mui thinks that Stanford 2020’s competitive advantage is largely the personal relationship it has with the companies it will invest in. After all, success might be just an arms reach away. Notoriously, Cloudflare, Rent the Runway, and Thredup were all born in the same classroom after being assigned a class project, according to Cloudflare CEO Matthew Prince.

“We have such strong pre-existing relationships, we know what people are working on way before they even raise,” she said.

Anyone who has been part of a club or team before knows that loyalty runs deep, but we’ll see if that closeness is enough for a founder to dole out a stake in their company. While Stanford 2020 doesn’t take any management fee or carry, equity isn’t casual; in that vein, a famed Silicon Valley firm might be of better utility than your classmates.

Stanford 2020’s set up sounds similar to StartX, the university’s attempt at investing in its own, leafy backyard which shut down in 2019. Launched in 2013, StartX offered to invest money in exchange for equity in any startup that went through its auxiliary accelerator and has $500,000 from professional investors.

Looking at Stanford 2020’s set up, the rules are almost exactly the same. Mui tells TechCrunch that startups must fulfill two criteria in order to automatically invest: first, the co-founder must be a member of the class, and second, they must raise a round of $750,000 or more from a reputable institutional investor. They define reputable as a list of 80 investors they got guidance on from advisors in the industry.

The concept of a rule-based automatic investment strategy comes with a big red flag: what if the founder has a bad idea or is a bad person, and still meets the criteria?

“I actually literally can’t think of a single person and I’m like, that person is so bad or so immoral, that we wouldn’t invest in them,” Mui said. “That’s part of the benefit of investing only in your classmates.”

But in case a Stanford-born class does have a problematic founder, Stanford 2020 has a veto voting mechanism.

In the grand scheme of things, Stanford-born startups are in a better spot than most when it comes to securing cash. They don’t desperately need another fund to invest in them. Mui’s ambition for Stanford 2020 is that other schools can copy and paste the legal structure they took a year (and a lot of hard work) to figure out.

She says they’re already getting inbound from incoming Stanford classes, other Stanford Schools, and undergraduates. Now that it’s closed, she hopes they hear from other business schools, too .

#cloudflare, #fenwick, #nea, #rent-the-runway, #stanford, #startups, #startx, #tc

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MasterClass just raised $100 million for celebrity-fueled content

MasterClass, a startup that sells celebrity-taught classes to people, has raised $100 million in a Series E round. The round was led by Fidelity Management & Research Company with participation from new investors including Owl Ventures, 01 Advisors and existing investors NEA, IVP, Atomico and NextEquity Partners.

The new financing brings MasterClass’ valuation to $800 million, according to Bloomberg, which broke the news of the edtech company’s then-impending funding round earlier this month. MasterClass declined to disclose its new valuation.

MasterClass charges a $180 annual subscription fee for users to access its library of content. The subscription model is responsible for 80 percent of the company’s revenue.

MasterClass views itself as neatly on the intersection of entertainment and education. The startup has produced 85 classes taught by celebrities, or “masters,” on their specialities. The platform has garnered blockbuster names like Anna Wintour to talk about how to grow a business, Gordon Ramsey on how to cook, and David Sedaris on how to be funny. The previews of classes are called “trailers.”

It also touches on the public’s innate curiosity about how famous people think and work. MasterClass tugs on that idea a bit by also offering classes that fundamentally do not make sense to be “digitized.” Think high-contact sports, like a tennis lesson from Serena Williams or a basketball lesson from Steph Curry. Or just general pontifications from RuPaul on self expression and Neil deGrasse Tyson on scientific thinking and communication.

Despite its flashy line up of stars, MasterClass doesn’t sell access but instead sells a window into someone’s work diary. Celebrities are not interacting with students on a day-to-day basis, and sometimes, not at all.

It is relatively a light lift for celebrities once they get their content on the platform, which of course only happens if they are personally invited to from the company. Any MasterClass on the site includes a number of lessons, broken down in separate videos that range from 20 to 30 minutes, and a downloadable workbook. Students for each class can flock to community hubs to chat with their fellow virtual classmates. There are opportunities for celebrities to interact with students, but nothing is put in the contract to make the instructors give back.

MasterClass proudly touts the few exceptions where celebrities have chosen favorites in class: Electronic music producer DeadMau5 reportedly invited one of their MasterClass students to record a track alongside him. Serena Williams reportedly invited one of her students to play a game with her.

MasterClass declined to share how it pays the celebrities.

Last year, MasterClass more than doubled in terms of sales. The company also says its content is so engaging that people might sign on for a Steph Curry workshop, but then eavesdrop in on a Ramsey cooking session.

MasterClass raised the round as millions are at home with nothing to do. CEO and co-founder David Rogier said that the most watched chapter of a class is Chris Voss, former FBI negotiator, and his thoughts on the art of tactical empathy.

Beyond this anecdote, Rogier repeatedly denied to share any data on how MasterClass’ usage has changed since coronavirus began. The silence is notable only because its competitors and neighbors in the edtech space have been noisy as of late. The massive shift to remote education has already helped edtech companies raise millions across the board, from new unicorns to seed stage deals.

The silence might be because MasterClass has positioned its content as more entertainment-focused than simply education-focused. Since the company produces high quality, documentary-style content, it means that it might struggle to produce, similarly to the delays we’re seeing in the entertainment industry right now due to COVID-19 shutdowns.

Similar to other edtech companies, however, MasterClass claims that the new financing was closed less out of necessity and more out of opportunity.

Rogier said that the capital will be used to create new classes for students and up production to one class a week. The company is also experimenting with an audio-only mode, short form and augmented reality.

“Imagine if we had Steph Curry, but you had augmented reality on your phone so you could actually see where to put your feet,” he said.

MasterClass’s marketing strategy has recently been a topic of conversation because of how aggressive and ever-present it is. It seems like every YouTube video you watch, there is a MasterClass ad waiting to be your commercial break. It seemingly has only increased as everyone started to work from home.

While Rogier would not disclose MasterClass’ marketing budget (or how in the world it managed to crowd already crowded challenges) the strategy is a bit telling. MasterClass doesn’t compete with YouTube, it advertises on the platform. It is betting that the world wants a highly produced, celebrity-led class, and is willing to pay for it.

“If you’ve seen more ads, it is because they are working,” he said.

#01-advisors, #david-rogier, #edtech, #edutainment, #entertainment, #masterclass, #nea, #owl-ventures, #serena-williams, #shonda-rhimes, #steph-curry, #tc

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Verizon is buying b2b videoconferencing firm BlueJeans

US carrier Verizon* has splashed out to buy veteran b2b videoconferencing platform, BlueJeans Network — shelling out less than $500 million on the acquisition, according to the Wall Street Journal which first reported the news.

A Verizon spokeswoman confirmed to TechCrunch that the price-tag is sub-$500M but did not provide a more exact figure. Videoconferencing platform BlueJeans has raised ~$175M since being founded around a decade ago, per Crunchbase, with US investor NEA leading a Series E round back in 2015.

In a press release announcing the deal, Verizon said it has entered into a definitive agreement to acquire the enterprise-grade videoconferencing and event platform in order to expand its “immersive unified communications portfolio”.

“Customers will benefit from a BlueJeans enterprise-grade video experience on Verizon’s high-performance global networks. In addition, the platform will be deeply integrated into Verizon’s 5G product roadmap, providing secure and real-time engagement solutions for high growth areas such as telemedicine, distance learning and field service work,” it wrote.

“As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise ready, secure, frictionless and that integrate with existing tools,” added Tami Erwin, CEO of Verizon Business, in a supporting statement. “Collaboration and communications have become top of the agenda for businesses of all sizes and in all sectors in recent months. We are excited to combine the power of BlueJeans’ video platform with Verizon Business’ connectivity networks, platforms and solutions to meet our customers’ needs.”

The acquisition comes at a time when videoconferencing has been seeing a massive uptick in usage as white collar workers around the world log on to meetings from home during the coronavirus pandemic.

Although it’s BlueJeans’ rival, Zoom, that’s been the most high profile name linked to the viral videoconferencing boom in recent weeks. The latter recently revealed that daily meeting participants on its platform jumped from a modest 10M in December to 200M in March.

However such booming growth and consumer usage has brought increased scrutiny for Zoom — leading to a spate of warnings (and even some bans), related to security and privacy concerns. And earlier this month the company said it would freeze product dev to focus on the laundry list of issues that have surfaced as users have piled in and kicked its tires, taking off a little of the shine off surging growth. 

On the sheer usage front BlueJeans is certainly small fish in comparison to Zoom — having remained b2b focused. A BlueJeans spokeswoman told us it has more than $100M ARR and over 15,000 customers at this point. (Some notable users include Facebook and Disney.)

But it’s paying users that are likely of most interest to Verizon. Carriers generally haven’t been able to translate increased usage during the pandemic into a revenue growth story — as a result of a combination of fixed costs, debt and market disruption that’s been hitting their shares during the coronavirus crisis, per Reuters.

“The combination of BlueJeans’ world class enterprise video collaboration platform and trusted brand with Verizon Business’ next generation edge computing innovation will deliver highly differentiated and compelling solutions to our joint customers,” said Quentin Gallivan, BlueJeans CEO, in a statement. “We are very excited about joining the Verizon team and we truly believe the future of business communications starts today!”

BlueJeans co-founder Krish Ramakrishnan has a history of exits, selling a couple of his previous startups to networking giant Cisco — where he has also worked, in between spinning out his own companies.

Verizon said today that said BlueJeans founders and “key management” will join the company as part of the acquisition, with BlueJeans employees set to become Verizon employees immediately following the close of the deal — which is expected in the second quarter, pending customary closing conditions.

*Disclosure: Verizon is also TechCrunch’s parent company

#cisco, #disney, #enterprise, #fundings-exits, #nea, #quentin-gallivan, #telecommunications, #teleconferencing, #telemedicine, #united-states, #verizon-communications, #video-conferencing, #web-conferencing, #zoom

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NewView Capital’s Ravi Viswanathan on how mature companies can survive this market

Ravi Viswanathan has been an investor long enough to see some serious ups and downs.

Viswanathan most recently founded NewView Capital a couple of years ago — a firm that launched with $1.35 billion from investors, largely to acquire the stakes of 31 companies that had been funded by New Enterprise Associates.

But before NewView, Viswanathan spent nearly 15 years with NEA, co-leading its growth investments. It’s how he knew which companies to take with him to NewView, which, by the way, largely shares the same investors as NEA.

Because he has seen the business world come to a stop a couple of times in his career — and because he has a lot of insight into the later-stage market — we talked with Viswanathan yesterday about the impact the massive public market meltdown could have on his piece of the startup world — and for how long. Our chat has been edited for length.

TechCrunch: You’re pretty much focused on late-stage companies, correct?

Ravi Viswanathan: We’re mid- to later-stage growth. It accounts for 70% to 80% [of the portfolio] and the balance is earlier-stage companies where I have a lot of conviction based on where I’ve invested previously, including in fintech and SaaS.

NewView Capital founder Ravi Viswanathan

What are some of the companies in your portfolio that are entirely new deals, meaning they were not part of the package of companies you took to spin out NewView from NEA?

Plaid was a new deal. Course Hero. Hims. Scopely. Heap, which is a product analytics company.

#acquia, #extra-crunch, #nea, #newview-capital, #plaid, #scopely, #tc, #venture-capital

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US response to the COVID-19 coronavirus moves from ‘containment’ to ‘mitigation’

In interviews across major television networks on Sunday, U.S. officials all but admitted that efforts to contain the spread of the novel coronavirus, COVID-19, have failed and that the country now needs to move to mitigate the effects of the continuing spread of the disease on the nation’s health and economy.

“We now are seeing community spread and we’re trying to help people understand how to mitigate the impact of disease spread,” U.S. Surgeon General Dr. Jerome Adams said on CBS’ Face the Nation on Sunday.

Dr. Adams’ concerns were echoed by Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health.

“There comes a time,” Fauci said in an interview on NBC’s Meet the Press, “when you have containment which [sic] you’re trying to find out who’s infected and put them in isolation. And if and when that happens — and I hope it’s if and not when — that you get so many people who are infected that the best thing you need to do is what we call mitigation in addition to containment.”

The admissions are supported by data from Johns Hopkins University, which indicates that despite government efforts to contain the novel coronavirus from spreading in the U.S. there are now at least 474 people infected with the virus across at least 31 states.

Exact information is difficult to ascertain since the Centers for Disease Control and Prevention said earlier this week that it would no longer be able to provide an official tally of tests conducted or under investigation. The CDC made the decision because states and private institutions are now authorized to conduct their own tests — making it difficult for the agency to keep up with the latest information.

“We are no longer reporting the number of PUIs or patients under investigation nor those who have tested negative,” said Dr. Nancy Messonnier, the director of the Center for the National Center for Immunization and Respiratory Diseases, at the CDC. “With more and more testing done at states, these numbers would not be representative of the testing being done nationally. States are reporting results quickly and even — states are reporting results quickly and in the event of a discrepancy between CDC and state case counts, the state case counts should always be considered more up to date.”

A coronavirus (COVID-19) test kit from the CDC.

Mistakes were made

Faulty test kits and internal divisions over how to respond to the spread of the virus in the United States hamstrung early efforts to get an accurate picture of how rapidly the virus was moving through the population, according to multiple reports.

“They’ve simply lost time they can’t make up. You can’t get back six weeks of blindness,” Jeremy Konyndyk, a senior policy fellow at the Center for Global Development and an Obama-era administration staffer involved in the government’s response to the spread of the ebola virus, told The Washington Post. “To the extent that there’s someone to blame here, the blame is on poor, chaotic management from the White House and failure to acknowledge the big picture.”

There is a world in which a coordinated U.S. response to the outbreak of the coronavirus, which the Chinese government first reported to the World Health Organization in late December, would have been led by the global health security team within the National Security Council, but that group was dissolved in 2018 by the National Security Advisor at the time, John Bolton.

In that world, perhaps the U.S. could have ramped up the production and acquisition of testing kits, provisioned facilities in communities deemed to be more at risk with the necessary equipment, and issued emergency authorizations to enable public institutions to administer tests without undergoing formal approval processes. In that world, the CDC would not have needed to impose severe restrictions on who could be tested for the virus, because they would not have needed to limit the number of tests they could conduct to only the most pressing — or obvious — cases.

Instead, as reporting in both The Washington Post and the New York Times indicates, a series of poor decisions, slow responses, and technological missteps limited the government’s ability to respond effectively to the threat.

The problems seem to have been threefold — the Centers for Disease Control did not move quickly enough to manufacture test kits at scale (either because of lack of funding or political will) nor did it open up testing options to other institutions that could have worked to develop tests — and because of the limited availability of tests, the CDC rationed how many tests were performed. Those issues were compounded by the initial release of faulty tests by the CDC in early February.

As former U.S. Food and Drug Administration official Scott Gottlieb wrote on Twitter in early February, “Since CDC and FDA haven’t authorized public health or hospital labs to run the tests, right now #CDC is the only place that can. So, screening has to be rationed. Our ability to detect secondary spread among people not directly tied to China travel is greatly limited.”

There are many reasons to have testing kits run through the CDC and state labs affiliated with the center. Chiefly, tests developed and distributed by the CDC can be conducted free-of-charge at public health labs, while corporate labs and private healthcare facilities can charge for the tests they develop.

(There has already been one story involving a man from Florida who was stuck with a $3000 bill for his decision to be pre-emptively tested for the coronavirus after returning from a trip to China.)

However, the inability of the CDC and federal public health officials to respond quickly enough was soon apparent throughout February.

A system for tracking travelers who were returning from China went down just as federal officials were directing state agencies to track their movements, according to a report in The New York Times.  Meanwhile, the head of the Department of Health and Human Services, Alex Azar, was estimating that the U.S. needed at least 300 million respirator masks for healthcare workers — the national emergency stockpile only had 12 million on hand, and many of those were expired, according to the Times.

Meanwhile, the CDC’s coronavirus test had a flawed component that led to inaccurate tests, which limited the testing efforts even further. And the limitations imposed on who could receive the tests have meant that there is still no accurate picture of how widely the disease has spread.

As recently as Friday, a nurse at a hospital in California was being denied access to the coronavirus test.

“I am currently sick, in quarantine, after caring for a patient who tested positive. I am awaiting permission from the federal government to allow for my testing even after my physician and county health professional ordered the test,” the nurse said in an issued statement. “The national CDC would not initiate the test. They said they would not test me, because if I was wearing the recommended protective equipment, then I wouldn’t have the coronavirus… Later they called back and now it’s an issue with something called the identifier number. They claim they prioritize running samples by illness severity and that there are only so many to give out each day. So I have to wait in line for the results. This is not a ticket dispenser at a deli counter, it’s a public health emergency…. I’m appalled at the level of bureaucracy that’s preventing nurses from getting tested. Delaying this test puts the whole community at risk.”

“When the CDC test was delayed, then the cases started appearing outside of China, there should have been a quicker response to get diagnostic testing going,” Melissa Miller, a director of the clinical molecular microbiology laboratory at the University of North Carolina at Chapel Hill School of Medicine, told the Washington Post.

‘We have an epidemic underway here in the United States’

The Federal Government is now facing an epidemic, according to health experts, and the question now is how can it help states and local governments respond.

“We have an epidemic underway here in the United States,” said former Food and Drug Administration commissioner, Scott Gottlieb, in an interview on Face the Nation.

Gottlieb, who recently returned to his position as a managing partner at the venture capital firm NEA, has been monitoring the government’s response from afar and was once rumored to be a candidate for the position of “Coronavirus Czar” overseeing the Administration’s response to the outbreak.

“We have to implement broad mitigation strategies. The next two weeks are really going to change the complexion in this country. We’ll get through this, but it’s going to be a hard period. We’re looking at two months probably of difficulty,” said Gottlieb. “To give you a basis of comparison, two weeks ago, Italy had nine cases. Ninety-five percent of all their cases have been diagnosed in the last 10 days. For South Korea, 85 percent of all their cases have been diagnosed in the last 10 days. We’re entering that period right now of rapid acceleration. And the sooner we can implement tough mitigation steps in places we have outbreaks like Seattle, the- the lower the scope of the epidemic here.”

Part of mitigation involves continuing to track the spread of the disease, and Gottlieb has been encouraging the FDA to move quickly to get new tests approved for weeks. Already, the Gates Foundation and private companies are rushing to bring an at-home coronavirus test kit to market — and ways to share the results from testing with appropriate government agencies.

But testing alone isn’t enough, says Gottlieb. The U.S. needs to “[close] businesses, close large gatherings, close theaters, cancel events,” Gottlieb said.

Businesses have started to cancel large conferences and events, and universities like Stanford are turning to remote classes for the remainder of their winter term. No city or state has yet to take measures as drastic as Italy, which closed down the entire Northern region of the country over the weekend in an effort to contain the spread of the coronavirus.

“I think we need to think about how do we provide assistance to the people of these cities who are going to be hit by hardship, as well as the localities themselves to try to give them an incentive to do this.”

His recommendations align with policy suggestions issued recently by the International Monetary Fund, which are all steps that the U.S. government could take should it choose to proactively approach its response to the virus’ spread.

Indeed, the over $8 billion coronavirus response package approved by Congress last week goes a long way to addressing the first suggestion from the IMF, which is to spend on the prevention, detection, control, treatment and containment of the virus.

Equally as important, according to the IMF, is to provide cash flow relief to the people and firms that are most affected — either in the form of wage subsidies, accelerated and expanded unemployment benefits, or tax benefits for companies affected by the virus outbreak.

“We’re going to end up with a very big federal bailout package here for stricken businesses, individuals, cities and states,” said Gottlieb. “We’re better off doing it upfront and giving assistance to get them to do the right things than do it on the back end after we’ve had a very big epidemic.”

Meanwhile, leadership in the U.S. at the highest level insists that there’s nothing to worry about.

#california, #centers-for-disease-control-and-prevention, #coronavirus, #covid-19, #disease, #italy, #johns-hopkins-university, #national-security-council, #nea, #scott-gottlieb, #seattle, #south-korea, #tc, #viruses, #white-house, #world-health-organization

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