Anrok raises $4.3M to solve sales tax for SaaS companies

It’s easier than ever to build a product and sell it around the United States, or the world. But if you want to do so without incurring the wrath of any particular state, or nation-state, you’d best have your tax matters in order. This is why Stripe’s news last week that it has built tax-focused tooling to help its customers manage their state bills mattered.

But for SaaS companies, things can be more complicated from a tax perspective. That’s what Anrok, a startup working to build sales tax software for SaaS firms, told TechCrunch.

The company’s CEO, Michelle Valentine, said that modern software companies need specialized help. And her startup is announcing a $4.3 million fundraise today to back its efforts. The capital event was led by Seqouia and Index, the latter firm a place where Valentine used to work.

Anrok delivers its service via an API, and charges based on the total dollar value of sales that it helps a customer manage. Its percentage-fee falls with volume, and you can’t pay more than 0.19% of managed revenue, so it’s pretty cheap regardless, given how strong software gross margins tend to be.

The Anrok founding team: Michelle Valentine, and Kannan Goundan. Via the company.

Valentine said that there are three things that make SaaS tax issues more complex than other products. The first deals with addresses. Software companies have to pay sales tax where customers are located, and often only have partial information. Anrok will help with that problem. The CEO also said that variable SaaS billing makes charging the right amount of tax an interesting issue, and that states have tax laws specifically aimed at the software market that must be navigated.

So, a more mass-market solution might not be the best fit for SaaS companies looking to avoid both trouble with states and the work of handling tax matters themselves.

It’s not hard to see why Anrok was able to raise capital. The company is early-stage with its first customers onboarded, so it’s not posting the sort of revenue growth that investors covet at the later stages. What then were its more fetching attributes? From our perspective, on-demand pricing and a simply gigantic market.

Sure, Anrok is serving SaaS businesses, but it’s doing so using what could be described as a post-SaaS business model; on-demand, or usage-based pricing is an increasingly popular way to charge for software products today, putting Anrok closer to the cutting edge in business-model terms. And the company’s market is essentially every software business out there. That’s a lot of TAM to carve into, something that investors love to see.

#anrok, #fundings-exits, #index-ventures, #recent-funding, #saas, #sales-tax, #seqouia, #startups

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Money Minx aims to build a ‘Personal Finance’ OS for the everyday investor

New regulations are making it easier to invest in alternative assets via crowdfunding, and the recent explosion of crypto and NFTs means that investors are more diversified than ever. 

Keeping up with such a variety of investments may prove difficult to those who want to handle managing their investment portfolios on their own. Money Minx, a new San Diego-based startup co-founded by husband and wife team Hussein and Jessica Yahfoufi, wants to help with that.

Put simply, Money Minx aims to build a “Personal Finance OS” for every household. The platform is designed to help people track all of their investments — yes, including crypto and NFTs — in one place, in whatever currency. The company claims that its AI can also go a step further, and help people spot opportunities in their portfolio as well as catch potential risks.

“We built Money Minx to help people cover all their bases, better understand their personal balance sheet and grow their net worth,” Hussein said. “No financial advisor needed.”

Money Minx also aims to provide people with easy-to-use tools to create dashboards and reports. In its “soft launch” phase, the startup has been growing rapidly — from $15 million in assets tracked at the end of March to $107 million by mid-May. Its user base is growing by 40% month over month.

As many founders do, Hussein says he and Jessica developed the platform to meet a need of their own.

“We built this because we needed it as ‘do it yourself investors,’ said Hussein, who previously started crowdfunding site appsplit and works as a CTO at a San Diego-based fintech company. “I didn’t want to hire a financial advisor and spend 1% of my portfolio every year for them to tell me what to do. So I started to do it on my own on a spreadsheet and then started building this tool last year.”

Hussein talked to other investors and realized that many were also managing their own finances and had also moved into investing outside the stock market.

Image Credits: Money Minx co-founders Jessica and Hussein Yahfoufi / Money Minx

“Everyday investors are preferring to invest more in crowdfunding sites and alternative assets than the traditional stock market,” he said. 

This shift has created a gap in the market for an easy way to track investments across multiple platforms, the Yahfoufis believe. 

Money Minx operates as a SaaS business and charges a monthly subscription fee across three different plans ranging from $10 to $30 a month. Looking ahead, Hussein is considering building out a white-glove service.

Although Money Minx has been approached by interested VCs, Hussein says the company prefers to stay bootstrapped — for now.

Indeed, VCs are pouring money into the space. Just last week, personal finance startup Truebill announced it had raised a $45 million Series D funding round led by Accel.

#apps, #artificial-intelligence, #crowdfunding, #crypto-economy, #cryptocurrency, #entrepreneurship, #finance, #financial-advisor, #fintech, #money, #money-minx, #saas, #san-diego, #startup, #startup-company, #startups, #tc, #truebill

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AI startup Eightfold valued at $2.1B in SoftBank-led $220M funding

Eightfold AI, a startup which uses deep learning and artificial intelligence to help companies find, recruit and retain workers, said on Thursday it has raised $220 million in a new round as it looks to accelerate its growth.

SoftBank Vision Fund 2 led the Series E round of the five-year-old startup, which is now valued at $2.1 billion, up from $1 billion in Series E last October, Eightfold AI founder and chief executive Ashutosh Garg told TechCrunch in an interview.

Existing investors General Catalyst, Capital One Ventures, Foundation Capital, IVP and Lightspeed Venture Partners also participated in the new round, which brings the startup’s all-time raise to over $410 million.

The Mountain View-based startup provides its clients with a talent acquisition platform that helps them identify suitable candidates and import and filter thousands of resumes. One of Eightfold AI’s missions is to help companies reduce biases in their hirings, so it masks candidates’ personal information during evaluation.

“Instead of searching for a job, a candidate can upload their resume and the system will tell what is the most relevant job for that candidate in real-time,” explained Garg. “What this does is, it reduces the drop-off rate. And our clients see more applications — and field more diverse applications.”

The startup, which has amassed clients in over 100 countries and offers its platform in over a dozen languages, also enables employers to deploy the Eightfold platform internally and help employees discover job opportunities within their organization. “This has helped businesses almost double their internal mobility,” said Garg, who previously worked at Google.

Garg said recruiting remains an untapped opportunity and existing platforms.

“Powered by AI and machine learning, Eightfold’s platform provides global enterprises with a single solution for managing the entire talent lifecycle, including hiring, retaining, and growing a diverse global workforce,” said Deep Nishar, Senior Managing Partner at SoftBank Investment Advisers and who previously worked for nearly six years at LinkedIn. “We are pleased to partner with Ashutosh and the Eightfold team to support their ambition of transforming how enterprises manage talent and how people build their careers.”

This is a developing story. More to follow…

#capital-one-ventures, #foundation-capital, #funding, #general-catalyst, #ivp, #lightspeed-venture-partners, #saas, #softbank, #softbank-vision-fund-2

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Health clouds are set to play a key role in healthcare innovation

The U.S. healthcare industry is amidst one of the biggest transformations any industry has seen since the dot-com boom of the late 1990s. This massive change is being stimulated by federal mandates, technological innovation, and the need to improve clinical outcomes and communication between providers, patients, and payers.

An aging population, increase in chronic diseases, lower reimbursement rates, and a shift to value-based payments—plus the COVID-19 pandemic—have added pressure and highlighted the need for new technology to enhance virtual and value-based care.

Improving medical outcomes now requires processing massive amounts of healthcare data, and the cloud plays a pivotal role in meeting the current needs of healthcare organizations.

Challenges in healthcare

Most of today’s healthcare challenges fall into two broad categories: rapidly rising costs, and an increased burden on resources. Rising costs — and the resulting inadequacy of healthcare resources — can stem from:

An aging population: As people age and live longer, healthcare gets more expensive. As medicine improves, people aged 65 and above are expected to account for 20% of the U.S. population by 2030, per the U.S. Census Bureau. And as older people spend more on healthcare, an aging population is expected to contribute to increasing healthcare costs over time.

Prevalence of chronic illnesses: According to a National Center for Biotechnology Information report, chronic disease treatment makes up 85% of healthcare costs, and more than half of all Americans have a chronic illness (diabetes, high blood pressure, depression, lower back and neck pain, etc.)

Higher ambulatory costs: The cost of ambulatory care, including outpatient hospital services and emergency room care, increased the most of all treatment categories covered in a 2017 study in the Journal of the American Medical Association.

Rising healthcare premiums, out-of-pocket costs, and Medicare and Medicaid: Healthcare premiums rose by an estimated 54% between 2009 and 2019. The COVID-19 pandemic has spurred enrollment into government programs like Medicaid and Medicare, which has increased the overall demand for medical services, contributing to rising costs. A 2021 IRS report highlighted that a shift to high-deductible health plans — with out-of-pocket costs of up to $14,000 per family — has also increased the cost of healthcare.

Delayed care and surgeries due to COVID-19: A poll by the Kaiser Family Foundation (KFF) in May 2020 indicated that up to 48% people have avoided or postponed medical care due to concerns about the COVID-19 pandemic. About 11% of those people reported that their medical condition worsened after skipping or postponing care. Non-emergency surgeries were frequently postponed, as resources were set aside for COVID-19 patients. These delays make treatable conditions more costly and increase overall costs.

A lack of pricing transparency: Without transparency, it’s difficult to know the actual cost of healthcare. The fragmented data landscape fails to capture complete details and complex medical bills, and does not give patients a complete view of payments.

The need to modernize

To mitigate the impact of increased costs and inadequate resources, healthcare organizations need to replace legacy IT programs and adopt modern systems designed to support rapid innovation for site-agnostic, collaborative, whole-person care — all while being affordable and accessible.

#articles, #chronic-disease, #cloud, #column, #digital-services, #ec-column, #ec-healthtech, #health, #healthcare, #healthcare-data, #healthcare-industry, #saas, #united-states

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How bottom-up sales helped Expensify blaze the path for SaaS

You’d expect an expense management company to have a large sales department and advertise through all kinds of channels to maximize customer acquisition. But like we’ve seen over and over through the course of this EC-1, Expensify just doesn’t do what you think it should.

Keeping in mind this company’s propensity to just stick to its guts, it’s not much of a surprise that it got to more than $100M in annual recurring revenue and millions of users with a staff of 130, some contractors, and an almost non-existent sales team.

If you’re wondering how its possible to grow to such a level without an established sales team, the short answer is: Word of mouth. To an extent, Expensify can do this due to the space it’s in, as expense reporting is such a thankless, almost mind numbingly boring task that anyone who found a good solution is bound to recommend it to their colleagues and friends.

But it’s more interesting how Expensify grows bottom-up within SMBs, its core customer base. By providing an easy and meaningful experience via the product itself, the company has come to a point where it only takes one or two users who love the service to turn their company into customers.

This approach flips the traditional sales model on its head and is now known as product-led growth, but Expensify did it long before it was an accepted business model. Though that was harder than it sounds, it also put the company in a uniquely privileged position, which it is fully intent on leveraging.

Starting the flywheel

There are many ways to get such a business model started, but as usual, Expensify threw caution and all advice out the window and banked on turning its users into evangelizers for its product.

#bottom-up-sales, #corporate-expense-management, #david-barrett, #ec-1, #expense-management, #expense-reporting, #expense-reports, #expensify, #expensify-ec-1, #extra-crunch-ec-1, #finance, #payments, #red-swoosh, #saas, #startups

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BuyerAssist launches with $2M in funding to help B2B sales team keep their buyers engaged

A group photo of BuyerAssist founders Shyam HN, Amit Dugar and Shankar Ganapathy

BuyerAssist founders Shyam HN, Amit Dugar and Shankar Ganapathy

Selling enterprise software is much more complicated than convincing a potential customer that your solution is the best and signing a contract. A recent Gartner study found that buying groups for B2B solutions can involve up to six to 10 decision makers, and that the majority of buyers said their most recent purchase was “very complex or difficult” as they came to a consensus while negotiating with vendors.

BuyerAssist, a new startup founded by former employees of sales readiness platform MindTickle, wants to make the buying process as smooth as possible. The company is launching its beta product to the public today with $2 million in seed funding led by Stellaris Venture Partners and Emergent Ventures, with participation from angel investors. The capital will be used for hiring in the U.S. and India, with plans to bring BuyerAssist’s platform out of beta later this year.

Headquartered in San Francisco, with an office in Pune, India, BuyerAssist.io was founded last year by Amit Dugar, Shankar Ganapathy and Shyam HN, all alumni of SoftBank Vision 2-backed MindTickle, a platform that enables companies to train their sales staff at scale. The philosophy behind BuyerAssist draws on HN and Ganapathy’s experience on the sales and marketing side of MindTickle: Ganapathy was its director of strategic accounts, while HN served as head of global sales development.

“We’ve sold half a million dollar deals, and deals where you have anywhere form 10 to 25 people involved from the buyer side,” HN told TechCrunch. “There’s a core team of about five to 10 people, but then there is also an extended team that comes and goes during the process.”

The pandemic added an extra layer of complexity to B2B sales, because many deals were done remotely. Furthermore, sales representatives get less time to interact with buyers. The Gartner report found that when B2B buying teams consider a purchase, they spend only 17% of that time meeting with potential suppliers, and the amount of time they spend interacting with any sales representative may be only 5% to 6%. This means vendors have to find ways to keep potential buyers engaged, while making the process easier for them.

BuyerAssist describes itself as a “operating system for B2B companies to deliver the most effective buying experience.” It helps by providing a centralized place to gather information that would usually be buried in emails and notes, and make it searchable. It also lets both vendors and buyers share information about their needs (like pricing, information security reviews and when they want to deploy software by), creating more transparency for each side, and stores important files like proposals, contracts and legal documentation.

For vendors, having information and questions from potential buyers organized in one place can help them better understand their deals pipeline and meet revenue goals. BuyerAssist also provides analytics that can help them retain more contracts. For example, it alerts vendors when buyers become less engaged, which may mean they are losing interest.

During its beta stage, BuyerAssist worked with four companies. The platform is currently focused on enterprise software and SaaS companies that do a lot of their sales remotely, but can be used for any complex sales process that involves multiple calls and emails. Other sectors BuyerAssist wants to enter include manufacturing and financial services.

BuyerAssist is part of a new crop of startups focused on helping vendors and buyers work together on complicated sales. Others include Accord, MetaCX, Dealpoint and Redcapped.io. HN said that the space is still very new, so companies are still figuring out their positioning. In BuyerAssist’s case, this means focusing on buyer engagement, instead of mutual success plans or collaborations, from the beginning. HN said the company will double down on investing in two key areas of product development: building its enterprise grade product to support complex sales and becoming the preferred way for buying teams to engage with BuyerAssist’s clients.

In statement about the investment, Stellaris Venture Partners partner Alok Goyal said, “As a venture capitalist focusing on the SaaS space, we get to see hundreds of teams. But it is very rare to find teams that create a perfect storm of domain expertise, functional expertise in different areas of building SaaS companies and at the same time bringing the perfect complementarity between the founders.”

Anupam Rastogi, a partner at Emergent Ventures, said “What excites me about BuyerAssist is that it focuses on reducing friction between buyers and sellers. Buyers want more flexibility and less noise. Sellers want to run a more consistent sales process. BuyerAssist facilitates this, and enables both to build a long term partnership. This is where we see the industry heading in the years and decades to come.”

#b2b-sales, #buyer-engagement, #buyerassist, #buyerassist-io, #fundings-exits, #saas, #startups, #tc

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Tiger Global leads $30M investment into Briq, a fintech for the construction industry

Briq, which has developed a fintech platform used by the construction industry,  has raised $30 million dollars in a Series B funding round led by Tiger Global Management.

The financing is among the largest Series B fundraises by a construction software startup, according to the company, and brings Briq’s total raised to $43 million since its January 2018 inception. Existing backers Eniac Ventures and Blackhorn Ventures also participated in the round.

Briq CEO and co-founder Bassem Hamdy is a former executive at construction tech giant Procore (which recently went public and has a market cap of $10.4 billion) Canadian software giant CMIC. Wall Street veteran Ron Goldshmidt is co-founder and COO.

Briq describes its offering as a financial planning and workflow automation platform that “drastically reduces” the time to run critical financial processes, while increasing the accuracy of forecasts and financial plans.

Briq has developed a toolbox of proprietary technology that it says allows it to extract and manipulate financial data without the use of APIs. It also has developed construction-specific data models that allows it to build out projections and create models of how much a project might cost, and how much could conceivably be made. Currently, Briq manages or forecasts about $30 billion in construction volume.

Specifically, Briq has two main offerings: Briq’s Corporate Performance Management (CPM) platform, which models financial outcomes at the project and corporate level and BriqCash, a construction-specific banking platform for managing invoices and payments. 

Put simply, Briq aims to allow contractors “to go from plan to pay” in one platform with the goal of solving the age-old problem of construction projects (very often) going over budget. Its longer-term, ambitious mission is to “manage 80% of the money workflows in construction within 10 years.”

The company’s strategy, so far, seems to be working.

From January 2020 to today, ARR has climbed by 200%, according to Hamdy. Briq currently has about 100 employees, compared to 35 a year ago.

Briq has 150 customers, and serves general and specialty contractors from $10 million to $1 billion in revenue.  They include Cafco Construction Management, WestCor Companies and Choate Construction and Harper Construction. The company is currently focused on contractors in North America but does have long-term plans to address larger international markets, Hamdy told TechCrunch.  

Some context

Hamdy came up with the idea for Santa Barbara, California-based Briq after realizing the vast amount of inefficiencies on the financial side of the construction industry. His goal was to do for construction financials what Procore did to document management, and PlanGrid to construction drawing. He started Briq with his own cash, amassed through secondary sales as Procore climbed the ranks of startups to become a construction industry unicorn.

Briq CEO and co-founder Bassem Hamdy

“I wanted to figure out how to bring the best of fintech into a construction industry that really guesses every month what the financial outcomes are for projects,” Hamdy told me at the time of the company’s last raise – a $10 million Series A led by Blackhorn Ventures announced in May of 2020. “Getting a handle on financial outcomes is really hard. The vast majority of the time, the forecasted cost to completion is plain wrong. By a lot.”

In fact, according to McKinsey, an astounding 80 percent of projects run over budget, resulting in significant waste and profit loss.

So at the end of a project, contractors often find themselves having doled out more money and resources than originally planned. This can lead to negative cash flow and profit loss. Briq’s platform aims to help contractors identify outliers, and which projects are more at risk.

Throughout the COVID-19 pandemic, Briq has proven to be “extremely valuable” to contractors, Hamdy said.

“In an industry where margins are so thin, we have given contractors the ability to truly understand where they stand on cash, profit and labor,” he added.

#articles, #blackhorn-ventures, #briq, #california, #construction, #construction-software, #construction-tech, #economy, #eniac-ventures, #executive, #finance, #financial-technology, #fintech, #funding, #fundings-exits, #mckinsey, #north-america, #plangrid, #procore, #recent-funding, #saas, #startups, #tiger-global-management, #venture-capital

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Google’s Gradient Ventures leads $8.2M Series A for Vault Platform’s misconduct reporting SaaS

Fixing workplace misconduct reporting is a mission that’s snagged London-based Vault Platform backing from Google’s AI focused fund, Gradient Ventures, which is the lead investor in an $8.2 million Series A that’s being announced today.

Other investors joining the round are Illuminate Financial, along with existing investors including Kindred Capital and Angular Ventures. Its $4.2M seed round was closed back in 2019.

Vault sells a suite of SaaS tools to enterprise-sized or large/scale-up companies to support them to pro-actively manage internal ethics and integrity issues. As well as tools for staff to report issues, data and analytics is baked into the platform — so it can support with customers’ wider audit and compliance requirements.

In an interview with TechCrunch, co-founder and CEO Neta Meidav said that as well as being wholly on board with the overarching mission to upgrade legacy reporting tools like hotlines provided to staff to try to surface conduct-related workplace risks (be that bullying and harassment; racism and sexism; or bribery, corruption and fraud), as you might expect Gradient Ventures was interested in the potential for applying AI to further enhance Vault’s SaaS-based reporting tool.

A feature of its current platform, called ‘GoTogether’, consists of an escrow system that allows users to submit misconduct reports to the relevant internal bodies but only if they are not the first or only person to have made a report about the same person — the idea being that can help encourage staff (or outsiders, where open reporting is enabled) to report concerns they may otherwise hesitate to, for various reasons.

Vault now wants to expand the feature’s capabilities so it can be used to proactively surface problematic conduct that may not just relate to a particular individual but may even affect a whole team or division — by using natural language processing to help spot patterns and potential linkages in the kind of activity being reported.

“Our algorithms today match on an alleged perpetrator’s identity. However many events that people might report on are not related to a specific person — they can be more descriptive,” explains Meidav. “For example if you are experiencing some irregularities in accounting in your department, for example, and you’re suspecting that there is some sort of corruption or fraudulent activity happening.”

“If you think about the greatest [workplace misconduct] disasters and crises that happened in recent years — the Dieselgate story at Volkswagen, what happened in Boeing — the common denominator in all these cases is that there’s been some sort of a serious ethical breach or failure which was observed by several people within the organization in remote parts of the organization. And the dots weren’t connected,” she goes on. “So the capacity we’re currently building and increasing — building upon what we already have with GoTogether — is the ability to connect on these repeated events and be able to connect and understand and read the human input. And connect the dots when repeated events are happening — alerting companies’ boards that there is a certain ‘hot pocket’ that they need to go and investigate.

“That would save companies from great risk, great cost, and essentially could prevent huge loss. Not only financial but reputational, sometimes it’s even loss to human lives… That’s where we’re getting to and what we’re aiming to achieve.”

There is the question of how defensible Vault’s GoTogether feature is — how easily it could be copied — given you can’t patent an idea. So baking in AI smarts may be a way to layer added sophistication to try to maintain a competitive edge.

“There’s some very sophisticated, unique technology there in the backend so we are continuing to invest in this side of our technology. And Gradient’s investment and the specific we’re receiving from Google now will only increase that element and that side of our business,” says Meidav when we ask about defensibility.

Commenting on the funding in a statement, Gradient Ventures founder and managing partner, Anna Patterson, added: “Vault tackles an important space with an innovative and timely solution. Vault’s application provides organizations with a data-driven approach to tackling challenges like occupational fraud, bribery or corruption incidents, safety failures and misconduct. Given their impressive team, technology, and customer traction, they are poised to improve the modern workplace.”

The London-based startup was only founded in 2018 — and while it’s most keen to talk about disrupting legacy hotline systems, which offer only a linear and passive conduit for misconduct reporting, there are a number of other startups playing in the same space. Examples include the likes of LA-based AllVoices, YC-backed WhispliHootsworth and Spot to name a few.

Competition seems likely to continue to increase as regulatory requirements around workplace reporting keep stepping up.

The incoming EU Whistleblower Protection Directive is one piece of regulation Vault expects will increase demand for smarter compliance solutions — aka “TrustTech”, as it seeks to badge it — as it will require companies of more than 250 employees to have a reporting solution in place by the end of December 2021, encouraging European businesses to cast around for tools to help shrink their misconduct-related risk.

She also suggests a platform solution can help bridge gaps between different internal teams that may need to be involved in addressing complaints, as well as helping to speed up internal investigations by offering the ability to chat anonymously with the original reporter.

Meidav also flags the rising attention US regulators are giving to workplace misconduct reporting — noting some recent massive awards by the SEC to external whistleblowers, such as the $28M paid out to a single whistleblower earlier this year (in relation to the Panasonic Avionics consultant corruption case).

She also argues that growing numbers of companies going public (such as via the SPAC trend, where there will have been reduced regulatory scrutiny ahead of the ‘blank check’ IPO) raises reporting requirements generally — meaning, again, more companies will need to have in place a system operated by a third party which allows anonymous and non-anonymous reporting. (And, well, we can only speculate whether companies going public by SPAC may be in greater need of misconduct reporting services vs companies that choose to take a more traditional and scrutinized route to market… )

“Just a few years back I had to convince investors that this category it really is a category — and fast forward to 2021, congratulations! We have a market here. It’s a growing category and there is competition in this space,” says Meidav.

“What truly differentiates Vault is that we did not just focus on digitizing an old legacy process. We focused on leveraging technology to truly empower more misconduct to surface internally and for employees to speak up in ways that weren’t available for them before. GoTogether is truly unique as well as the things that we’re doing on the operational side for a company — such as collaboration.”

She gives an example of how a customer in the oil and gas sector configured the platform to make use of an anonymous chat feature in Vault’s app so they could provide employees with a secure direct-line to company leadership.

“They’ve utilizing the anonymous chat that the app enables for people to have a direct line to leadership,” she says. “That’s incredible. That is such a progress, forward looking way to be utilizing this tool.”

Vault Platform’s suite of tools include an employee app and a Resolution Hub for compliance, HR, risk and legal teams (Image credits: Vault Platform)

Meidav says Vault has around 30 customers at this stage, split between the US and EU — its core regions of focus.

And while its platform is geared towards enterprises, its early customer base includes a fair number of scale-ups — with familiar names like Lemonade, Airbnb, Kavak, G2 and OVO Energy on the list.

Scale ups may be natural customers for this sort of product given the huge pressures that can be brought to bear upon company culture as a startup switches to expanding headcount very rapidly, per Meidav.

“They are the early adopters and they are also very much sensitive to events such as these kind of [workplace] scandals as it can impact them greatly… as well as the fact that when a company goes through a hyper growth — and usually you see hyper growth happening in tech companies more than in any other type of sector — hyper growth is at time when you really, as management, as leadership, it’s really important to safeguard your culture,” she suggests.

“Because it changes very, very quickly and these changes can lead to all sorts of things — and it’s really important that leadership is on top of it. So when a company goes through hyper growth it’s an excellent time for them to incorporate a tool such as Vault. As well as the fact that every company that even thinks of an IPO in the coming months or years will do very well to put a tool like Vault in place.”

Expanding Vault’s own team is also on the cards after this Series A close, as it guns for the next phase of growth for its own business. Presumably, though, it’s not short of a misconduct reporting solution.

#abuse, #airbnb, #allvoices, #angular-ventures, #anna-patterson, #artificial-intelligence, #boeing, #corporate-law, #corruption, #deception, #europe, #european-union, #fundings-exits, #google, #gradient-ventures, #kindred-capital, #london, #louisiana, #managing-partner, #misconduct, #natural-language-processing, #saas, #u-s-securities-and-exchange-commission, #united-states, #vault-platform, #workplace

0

Extra Crunch roundup: Guest posts wanted, ‘mango’ seed rounds, Expensify’s tech stack

Prospective contributors regularly ask us about which topics Extra Crunch subscribers would like to hear more about, and the answer is always the same:

  • Actionable advice that is backed up by data and/or experience.
  • Strategic insights that go beyond best practices and offer specific recommendations readers can try out for themselves.
  • Industry analysis that paints a clear picture of the companies, products and services that characterize individual tech sectors.

Our submission guidelines haven’t changed, but Managing Editor Eric Eldon and I wrote a short post that identifies the topics we’re prioritizing at the moment:

  • How-to articles for early-stage founders.
  • Market analysis of different tech sectors.
  • Growth marketing strategies.
  • Alternative fundraising.
  • Quality of life (personal health, sustainability, proptech, transportation).

If you’re a skillful entrepreneur, founder or investor who’s interested in helping someone else build their business, please read our latest guidelines, then send your ideas to guestcolumns@techcrunch.com.

Thanks for reading; I hope you have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


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Opting for a debt round can take you from Series A startup to Series B unicorn

Image of a tree in a field, with half barren to represent debt and half flush with cash to represent success.

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

Debt is a tool, and like any other — be it a hammer or handsaw — it’s extremely valuable when used skillfully but can cause a lot of pain when mismanaged. This is a story about how it can go right.

Mario Ciabarra, the founder and CEO of Quantum Metric, breaks down how his company was on a “tremendous growth curve” — and then the pandemic hit.

“As the weeks following the initial shelter-in-place orders ticked by, the rush toward digital grew exponentially, and opportunities to secure new customers started piling up,” Ciabarra writes. “A solution to our money problems, perhaps? Not so fast — it was a classic case of needing to spend in order to make.”

If companies want to preserve equity, debt can be an advantageous choice. Here’s how Quantum Metric did it.

4 proven approaches to CX strategy that make customers feel loved

CX is the hottest acronym in business

Image Credits: mucahiddin / Getty Images

People have been working to optimize customer experiences (CX) since we began selling things to each other.

A famous San Francisco bakery has an exhaust fan at street level; each morning, its neighbors awake to the scent of orange-cinnamon morning buns wafting down the block. Similarly, savvy hairstylists know to greet returning customers by asking if they want a repeat or something new.

Online, CX may encompass anything from recommending the right shoes to AI that knows when to send a frustrated traveler an upgrade for a delayed flight.

In light of Qualtrics’ spinout and IPO and Sprinklr’s recent S-1, Rebecca Liu-Doyle, principal at Insight Partners, describes four key attributes shared by “companies that have upped their CX game.”

Twitter’s acquisition strategy: Eat the public conversation

woman talking with megaphone

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

What is a microblogging service doing buying a social podcasting company and a newsletter tool while also building a live broadcasting sub-app? Is there even a strategy at all?

Yes. Twitter is trying to revitalize itself by adding more contexts for discourse to its repertoire. The result, if everything goes right, will be an influence superapp that hasn’t existed anywhere before. The alternative is nothing less than the destruction of Twitter into a link-forwarding service.

Let’s talk about how Twitter is trying to eat the public conversation.

Reading the IPO market’s tea leaves

Although it was a truncated holiday week here in the United States, there was a bushel of IPO news. We sorted through the updates and came up with a series of sentiment calls regarding these public offerings.

Earlier this week, we took a look at:

  • Marqeta‘s first IPO price range (fintech).
  • 1st Dibs‘ first IPO price range (e-commerce).
  • Zeta Global‘s IPO pricing (martech).
  • The start of SoFi trading post-SPAC (fintech).
  • The latest from BarkBox (e-commerce).

How Expensify hacked its way to a robust, scalable tech stack

Image Credits: Nigel Sussman

Part 4 of Expensify’s EC-1 digs into the company’s engineering and technology, with Anna Heim noting that the group of P2P pirates/hackers set out to build an expense management app by sticking to their gut and making their own rules.

They asked questions few considered, like: Why have lots of employees when you can find a way to get work done and reach impressive profitability with a few? Why work from an office in San Francisco when the internet lets you work from anywhere, even a sailboat in the Caribbean?

It makes sense in a way: If you’re a pirate, to hell with the rules, right?

With that in mind, one could assume Expensify decided to ask itself: Why not build our own totally custom tech stack?

Indeed, Expensify has made several tech decisions that were met with disbelief, but its belief in its own choices has paid off over the years, and the company is ready to IPO any day now.

How much of a tech advantage Expensify enjoys owing to such choices is an open question, but one thing is clear: These choices are key to understanding Expensify and its roadmap. Let’s take a look.

Etsy asks, ‘How do you do, fellow kids?’ with $1.6B Depop purchase

GettyImages 969952548

Image Credits: Getty Images

The news this week that e-commerce marketplace Etsy will buy Depop, a startup that provides a secondhand e-commerce marketplace, for more than $1.6 billion may not have made a large impact on the acquiring company’s share price thus far, but it provides a fascinating look into what brands may be willing to pay for access to the Gen Z market.

Etsy is buying Gen Z love. Think about it — Gen Z is probably not the first demographic that comes to mind when you consider Etsy, so you can see why the deal may pencil out in the larger company’s mind.

But it isn’t cheap. The lesson from the Etsy-Depop deal appears to be that large e-commerce players are willing to splash out for youth-approved marketplaces. That’s good news for yet-private companies that are popular with the budding generation.

Confluent’s IPO brings a high-growth, high-burn SaaS model to the public markets

Image Credits: Andriy Onufriyenko / Getty Images

Confluent became the latest company to announce its intent to take the IPO route, officially filing its S-1 paperwork this week.

The company, which has raised over $455 million since it launched in 2014, was most recently valued at just over $4.5 billion when it raised $250 million last April.

What does Confluent do? It built a streaming data platform on top of the open-source Apache Kafka project. In addition to its open-source roots, Confluent has a free tier of its commercial cloud offering to complement its paid products, helping generate top-of-funnel inflows that it converts to sales.

What we can see in Confluent is nearly an old-school, high-burn SaaS business. It has taken on oodles of capital and used it in an increasingly expensive sales model.

How to win consulting, board and deal roles with PE and VC funds

Jumping to the highest level - goldfish jumping in a bigger bowl - aspiration and achievement concept. This is a 3d render illustration

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

Would you like to work with private equity and venture capital funds?

There are relatively few jobs directly inside private equity and venture capital funds, and those jobs are highly competitive.

However, there are many other ways you can work and earn money within the industry — as a consultant, an interim executive, a board member, a deal executive partnering to buy a company, an executive in residence or as an entrepreneur in residence.

Let’s take a look at the different ways you can work with the investment community.

The existential cost of decelerated growth

Even among the most valuable tech shops, shareholder return is concentrated in share price appreciation, and buybacks, which is the same thing to a degree.

Slowly growing tech companies worth single-digit billions can’t play the buyback game to the same degree as the majors. And they are growing more slowly, so even a similar buyback program in relative scale would excite less.

Grow or die, in other words. Or at least grow or come under heavy fire from external investors who want to oust the founder-CEO and “reform” the company. But if you can grow quickly, welcome to the land of milk and honey.

Even among the most valuable tech shops, shareholder return is concentrated in share price appreciation, and buybacks, which is the same thing to a degree.

Slowly growing tech companies worth single-digit billions can’t play the buyback game to the same degree as the majors. And they are growing more slowly, so even a similar buyback program in relative scale would excite less.

Grow or die, in other words. Or at least grow or come under heavy fire from external investors who want to oust the founder-CEO and “reform” the company. But if you can grow quickly, welcome to the land of milk and honey.

Hormonal health is a massive opportunity: Where are the unicorns?

uterus un paper work.Pink backgroundArt concept of female reproductive health

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

There is a growing group of entrepreneurs who are betting that hormonal health is the key wedge into the digital health boom.

Hormones are fluctuating, ever-evolving, and diverse — but these founders say they’re also key to solving many health conditions that disproportionately impact women, from diabetes to infertility to mental health challenges.

Many believe it’s that complexity that underscores the opportunity. Hormonal health sits at the center of conversations around personalized medicine and women’s health: By 2025, women’s health could be a $50 billion industry, and by 2026, digital health more broadly is estimated to hit $221 billion.

Still, as funding for women’s health startups drops and stigma continues to impact where venture dollars go, it’s unclear whether the sector will remain in its infancy or hit a true inflection point.

3 lessons we learned after raising $6.3M from 50 investors

Image of businesspeople climbing ladders up an arrow toward three increasingly tall piles of cash.

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

Two years ago, founders of calendar assistant platform Reclaim were looking for a “mango” seed round — a boodle of cash large enough to help them transition from the prototype phase to staffing up for a public launch.

Although the team received offers, co-founder Henry Shapiro says the few that materialized were poor options, partially because Reclaim was still pre-product.

“So one summer morning, my co-founder and I sat down in his garage — where we’d been prototyping, pitching and iterating for the past year — and realized that as hard as it was, we would have to walk away entirely and do a full reset on our fundraising strategy,” he writes.

Shapiro shares what he learned from embracing failure and offers three conclusions “every founder should consider before they decide to go out and pitch investors.”

For SaaS startups, differentiation is an iterative process

For SaaS success, differentiation is crucial

Image Credits: Kevin Schafer / Getty Images

Although software as a service has been thriving as a sector for years, it has gone into overdrive in the past year as businesses responded to the pandemic by speeding up the migration of important functions to the cloud, ActiveCampaign founder and CEO Jason VandeBoom writes in a guest column.

“We’ve all seen the news of SaaS startups raising large funding rounds, with deal sizes and valuations steadily climbing. But as tech industry watchers know only too well, large funding rounds and valuations are not foolproof indicators of sustainable growth and longevity.”

VandeBoom notes that to scale sustainably, SaaS startups need to “stand apart from the herd at every phase of development. Failure to do so means a poor outcome for founders and investors.”

“As a founder who pivoted from on-premise to SaaS back in 2016, I have focused on scaling my company (most recently crossing 145,000 customers) and in the process, learned quite a bit about making a mark,” VandeBoom writes. “Here is some advice on differentiation at the various stages in the life of a SaaS startup.”

#confluent, #depop, #ecommerce, #etsy, #expensify, #extra-crunch-roundup, #marqeta, #qualtrics, #quantum-metric, #saas, #social, #sprinklr, #startups, #tc, #venture-capital, #zeta-global

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For SaaS startups, differentiation is an iterative process

Software as a service has been thriving as a sector for years, but it has gone into overdrive in the past year as businesses responded to the pandemic by speeding up the migration of important functions to the cloud. We’ve all seen the news of SaaS startups raising large funding rounds, with deal sizes and valuations steadily climbing. But as tech industry watchers know only too well, large funding rounds and valuations are not foolproof indicators of sustainable growth and longevity.

To scale sustainably, grow its customer base and mature to the point of an exit, a SaaS startup needs to stand apart from the herd at every phase of development. Failure to do so means a poor outcome for founders and investors.

As a founder who pivoted from on-premise to SaaS back in 2016, I have focused on scaling my company (most recently crossing 145,000 customers) and in the process, learned quite a bit about making a mark. Here is some advice on differentiation at the various stages in the life of a SaaS startup.

Launch and early years

Differentiation is crucial early on, because it’s one of the only ways to attract customers. Customers can help lay the groundwork for everything from your product roadmap to pricing.

The more you know about your target customers’ pain points with current solutions, the easier it will be to stand out. Take every opportunity to learn about the people you are aiming to serve, and which problems they want to solve the most. Analyst reports about specific sectors may be useful, but there is no better source of information than the people who, hopefully, will pay to use your solution.

The key to success in the SaaS space is solving real problems. Take DocuSign, for example — the company found a way to simply and elegantly solve a niche problem for users with its software. This is something that sounds easy, but in reality, it means spending hours listening to the customer and tailoring your product accordingly.

#as-a-service, #cloud, #cloud-applications, #column, #docusign, #ec-cloud-and-enterprise-infrastructure, #ec-column, #ec-enterprise-applications, #product-management, #saas, #software-as-a-service, #startup-company, #startups

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Architect Capital brings alternative capital to the early stage with new $100M fund

Early-stage startups are increasingly looking for alternative ways to access capital, meaning not every company wants to raise money from VCs or take on debt.

In recent years, a flurry of startups have emerged to give companies other options. (Think Pipe, for example.)

And today, San Francisco-based Architect Capital is a new firm that is launching with over $100 million in funds to serve as an “asset-based lender” to “high-growth,” early-stage tech companies. Specifically, the new firm aims to provide non-dilutive or less-dilutive financing options to asset-rich fintech, e-commerce and SaaS companies in the U.S. and Latin America, but with an emphasis on the latter. The region, Architect maintains, does not have a plethora of institutional financing available against assets.

The firm is not out to replace traditional venture capital or venture debt, emphasizes founder and CEO James Sagan, but rather to offer asset-based products that will complement them.

For some context, Sagan is no stranger to the startup world, having co-founded and served as managing partner of Arc Labs, an early-stage credit fund focused on lending to technology-enabled businesses. He’s been investing in Latin America for years, and recognized the need for new forms of financing to fund “novel and underappreciated assets.”

Also, he believes the region is home to “the most prominent fintech ecosystem in the world.”

To Sagan, traditional forms of equity and debt financing in the venture world are vital for things like growing headcount, but he believes they are “not engineered to support the growth of a company’s underlying financial products.”

“VC is highly dilutive and should be used for ROI activities such as hiring engineers and building great teams,” Sagan told TechCrunch. “It’s expensive to use equity to fund assets. Equity should not be put in a loan book. We’ll fund the loan book.”

Image Credits: Architect Capital founder James Sagan / Architect Capital

Architect’s goal is to provide “tailored and less dilutive funding,” especially to companies that produce repeatable revenues, such as SaaS and subscription businesses. 

Sagan said he first discovered the strategy in 2015 when he was working for a multifamily office that was lending against a bunch of traditional assets.

“A colleague and good friend of mine started a business and raised some equity and venture debt, but he couldn’t find the asset-specific financing for the receivables he was generating,” Sagan recalls. “He was lending to small businesses and needed asset-specific financing against those receivables.”

Venture debt doesn’t really work for receivables-based lending because venture debt shops typically are underwriting assets, or rather, underwriting the quality of the investors in the company, Sagan believes.

“So we really tailor our underwriting towards those assets themselves right and those assets range from unsecured consumer receivables to secure small business receivables to real estate,” he told TechCrunch. “Essentially, we’re providing an additional instrument for asset-heavy businesses that will allow them to scale in a way that venture debt will not.”

Architect’s LPs are mostly large institutions, as opposed to traditional high net worth individuals. The firm’s average check size will land at around $10 million to $15 million.

“Our portfolio allocation is more concentrated in general,” Sagan said. “We expect to grow our AUM (assets under management) pretty precipitously.”

Architect Capital has invested in six companies since inception, including PayJoy, a company that delivers consumer financing and smartphone technology to customers in emerging markets; Forum Brands, a U.S.-based e-commerce marketplace aggregator; and ADDI, a fintech that aims to give Colombian consumers access to fair and affordable credit through point-of-sale-financing that recently raised $65 million.

#architect-capital, #corporate-finance, #e-commerce, #ecommerce, #economy, #entrepreneurship, #finance, #funding, #latin-america, #money, #private-equity, #real-estate, #saas, #san-francisco, #startup-company, #startups, #tc, #united-states, #venture-capital, #venture-debt

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Iterative raises $20M for its MLOps platform

Iterative, an open-source startup that is building an enterprise AI platform to help companies operationalize their models, today announced that it has raised a $20 million Series A round led by 468 Capital and Mesosphere co-founder Florian Leibert. Previous investors True Ventures and Afore Capital also participated in this round, which brings the company’s total funding to $25 million.

The core idea behind Iterative is to provide data scientists and data engineers with a platform that closely resembles a modern GitOps-driven development stack.

After spending time in academia, Iterative co-founder and CEO Dmitry Petrov joined Microsoft as a data scientist on the Bing team in 2013. He noted that the industry has changed quite a bit since then. While early on, the questions were about how to build machine learning models, today the problem is how to build predictable processes around machine learning, especially in large organizations with sizable teams. “How can we make the team productive not the person? This is a new challenge for the entire industry,” he said.

Big companies (like Microsoft) were able to build their own proprietary tooling and processes to build their AI operations, Petrov noted, but that’s not an option for smaller companies.

Currently, Iterative’s stack consists of a couple of different components that sit on top of tools like GitLab and GitHub. These include DVC for running experiments and data and model versioning, CML, the company’s CI/CD platform for machine learning, and the company’s newest product, Studio, its SaaS platform for enabling collaboration between teams. Instead of reinventing the wheel, Iterative essentially provides data scientists who already use GitHub or GitLab to collaborate on their source code with a tool like DVC Studio that extends this to help them collaborate on data and metrics, too.

Image Credits: Iterative

“DVC Studio enables machine learning developers to run hundreds of experiments with full transparency, giving other developers in the organization the ability to collaborate fully in the process,” said Dmitry Petrov, CEO and founder of Iterative. “The funding today will help us bring more innovative products and services into our ecosystem.”

Petrov stressed that he wants to build an ecosystem of tools, not a monolithic platform. When the company closed this current funding round about three months ago, Iterative had about 30 employees, many of which were previously active in the open-source community around its projects. Today, that number is already closer to 60.

“Data, ML and AI are becoming an essential part of the industry and IT infrastructure,” said Leibert, general partner at 468 Capital. “Companies with great open source adoption and bottom-up market strategy, like Iterative, are going to define the standards for AI tools and processes around building ML models.”

#afore-capital, #artificial-intelligence, #cloud, #cybernetics, #data-scientist, #developer, #enterprise, #free-software, #funding, #fundings-exits, #git, #github, #gitlab, #learning, #machine-learning, #microsoft, #ml, #recent-funding, #saas, #software-engineering, #startups, #true-ventures, #version-control

0

How Expensify hacked its way to a robust, scalable tech stack

Take a close look at any ambitious startup and you’ll find pugnacity nestled in its core. Stubbornness and a bullheaded belief in the worth of what a company wants to bring to fruition is often the biggest driver of its success, and the people at such companies also tend to share this quality.

So it wouldn’t be too far off the mark to say the people at Expensify are a stubborn lot — to the company’s ultimate benefit. This group of P2P pirates/hackers that set out to build an expense management app stuck to their gut, made their own rules. They asked questions few thought of, like: Why have lots of employees when you can find a way to get work done and reach impressive profitability with a few? Why work from an office in San Francisco when the internet lets you work from anywhere, even a sailboat in the Caribbean?

It makes sense in a way: If you’re a pirate, to hell with the rules, right? And even more so when nobody can explain the rules in the first place.

With that in mind, one could assume Expensify decided to ask itself: Why not build our own totally custom tech stack? Indeed, Expensify has made several tech decisions that were met with disbelief — from having an open-source frontend and cross-platform mobile development to hiring contractors to train its AI and recruiting open-source contributors — but its belief in its own choices has paid off over the years, and the company is ready to IPO any day now.

How much of a tech advantage Expensify enjoys owing to such choices is an open question, but one thing is clear: These choices are key to understanding Expensify and its roadmap. Let’s take a look.

Built on Bedrock

I think another question Expensify also decided to ask in its early days was something like: Why not have our database on top of a technology that’s built for small-scale application software?

It may sound incredible, but Expensify actually runs on a custom database built on top of SQLite. This is surprising, because despite being one of the most widely deployed database engines, SQLite is known for running on small, embedded systems like smartphones and web browsers, not powering enterprise-scale databases.

It may sound incredible, but Expensify actually runs on a custom database built on top of SQLite.

This custom database is called Bedrock, and its architecture is as unique as they come. Expensify explains it as an “RDBMS optimized for self-healing replication across relatively slow, relatively unreliable WAN (internet) connections, enabling extremely high availability/high performance multi-datacenter deployments without any single point of failure.” RDBMS means relational database management system, describing SQLite and other row-based databases where entries are interconnected with each other.

But why would Expensify build this instead of going for any number of widely available enterprise database solutions?

To answer that question, we need to go back to the early days of the company, which was originally a side project for its founder and CEO, David Barrett. His initial idea was to develop a prepaid card for the homeless, but this required putting a server on the Visa network, which brought several strict requirements and challenges. “I would say one of the most difficult [parts] was that I needed the ability to automatically replicate and failover,” Barrett told TechCrunch when we interviewed him a couple of months ago.

This was no easy feat in 2007, but Barrett was up for the challenge. “I just hit a moment where the technology available off the shelf just wasn’t that good. And I happened to be a peer-to-peer software developer who had tons of spare time and really wanted to build this thing to put on the Visa backend,” he said. The P2P aspect was important, as Barrett had the skills to make it work. His first hires for Expensify, P2P engineers he had worked with at Red Swoosh and Akamai, were also unusually suited for the job.

#artificial-intelligence, #bedrock, #cloud, #corporate-expense-management, #david-barrett, #ec-1, #enterprise, #expense-management, #expense-reporting, #expense-reports, #expensify, #expensify-ec-1, #finance, #react-native, #relational-database, #saas

0

Once a buzzword, digital transformation is reshaping markets

The notion of digital transformation evolved from a buzzword joke to a critical and accelerating fact during the COVID-19 pandemic. The changes wrought by a global shift to remote work and schooling are myriad, but in the business realm they have yielded a change in corporate behavior and consumer expectation — changes that showed up in a bushel of earnings reports this week.

TechCrunch may tend to have a private-company focus, but we do keep tabs on public companies in the tech world as they often provide hints, notes and other pointers on how startups may be faring. In this case, however, we’re working in reverse; startups have told us for several quarters now that their markets are picking up momentum as customers shake up their buying behavior with a distinct advantage for companies helping customers move into the digital realm. And public company results are now confirming the startups’ perspective.

The accelerating digital transformation is real, and we have the data to support the point.

What follows is a digest of notes concerning the recent earnings results from Box, Sprout Social, Yext, Snowflake and Salesforce. We’ll approach each in micro to save time, but as always there’s more digging to be done if you have time. Let’s go!

Enterprise earnings go up

Kicking off with Yext, the company beat expectations in its most recent quarter. Today its shares are up 18%. And a call with the company’s CEO Howard Lerman underscored our general thesis regarding the digital transformation’s acceleration.

In brief, Yext’s evolution from a company that plugged corporate information into external search engines to building and selling search tech itself has been resonating in the market. Why? Lerman explained that consumers more and more expect digital service in response to their questions — “who wants to call a 1-800 number,” he asked rhetorically — which is forcing companies to rethink the way they handle customer inquiries.

In turn, those companies are looking to companies like Yext that offer technology to better answer customer queries in a digital format. It’s customer-friendly, and could save companies money as call centers are expensive. A change in behavior accelerated by the pandemic is forcing companies to adapt, driving their purchase of more digital technologies like this.

It’s proof that a transformation doesn’t have to be dramatic to have pretty strong impacts on how corporations buy and sell online.

#box, #cloud, #earnings, #ec-enterprise-applications, #enterprise, #saas, #salesforce, #snowflake, #sprout-social, #yext

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Extra Crunch roundup: first-check myths, Miami relocation checklist, standout SaaSy startups

This may seem like a great time to launch a SaaS startup, but the landscape is crowded with well-designed applications that promise “blazingly fast and delightfully simple” experiences, according to seed-stage investor John Chen of Fika Ventures.

Most SaaS startups will fail, but not because of a sour marketing campaign or server downtime. The majority of these companies will fall victim to what Chen calls “the myth of frictionless onboarding.”

Despite the hype about ease of use, enterprise companies always ask customers to abandon familiar tools so they can learn something new.

“Just like with a new fitness program, participants feel good after completing the workout, but it takes a lot of activation energy to start and hard work to get there,” Chen notes.


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Instead of putting the onus on customers to roll up their sleeves, he suggests that SaaS startups learn from cryptocurrency culture and find ways to “incentivize users to do the necessary work to have the right experience.”

But how do you encourage users to put in the time and effort required to produce an optimal customer experience?

“In a world where there is a surplus of alternatives for every job to be done, the scarce resource is not content, tooling, or hacks and tricks,” says Chen. “It’s attention.”

We’re off on Monday, May 31 in observance of Memorial Day; I hope you have a relaxing weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Dismantling the myths around raising your first check

Full length side view of young woman carrying large pink block against white background

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

As startups and venture capital grow in tandem, fundraising has gone from a formal affair on Sand Hill Road to a process that can happen anywhere from Twitter to Zoom.

While fundraising may no longer require a trip to California, it might depend on whether you got an invite to a private audio app. And while you may not need to be an insider, second-time founders — largely male and white — still have a competitive advantage.

The growing complexity of fundraising has the opportunity to make tech either inclusive or exclusive.

VC is the flashy gold medal, but the rapid growth of emerging fund managers means that a first check can be piecemealed together from a variety of different sources. The options for financing are seemingly endless: syndicates, public crowdfunding, VC firms, accelerators, debt financing, rolling funds, and, for the profitable few, bootstrapping.

Doximity’s S-1 may explain why healthcare exits are heating up

Telehealth startup Doximity filed to go public earlier today. Notably, the company has not fundraised since 2014, a year in which it attracted just under $82 million at a valuation of $355 million, per PitchBook data.

How has it managed to not raise money for so long? By generating lots of cash and profit over the years. Healthtech communications, it turns out, can be a lucrative endeavor.

What Vimeo’s growth, profits and value tell us about the online video market

Image Credits: Avishek Das/SOPA Images/LightRocket via Getty Images

The spin-out of video platform Vimeo from IAC completed this week, and the smaller company is now trading as an independent entity under the ticker ‘VMEO’.

If you missed the news that the internet conglomerate was spinning out the video service, don’t feel bad; it slipped past many radars. But with the company now trading, our access to its historical results, and our minds still enthralled by YouTube’s recent financial performance for Alphabet, it’s worth taking a moment to digest the company’s health.

Flywire’s flotation suggests the IPO slowdown is behind us

The Flywire IPO is neat from a financial perspective and notable in that it’s a Boston exit as opposed to yet another New York or San Francisco-based flotation. It’s nice to see some other cities put points on the board.

But more than that, this IPO is a useful measuring stick for keeping tabs on the IPO market as a whole. This year and the last are shaping up to be key exit periods for startups and unicorns of all shapes and sizes; many a venture capital fund return rests on these public debuts.

Dear Sophie: Any unique immigration strategies for quick hiring?

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

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I do recruitment for tech startups. With a surge of VC investing, many startups are urgently hiring.

Which visas offer the quickest options for international talent? Are there any unique strategies that you would recommend we explore?

— Maverick in Milpitas

7 questions to ask before relocating your startup to Florida

a photo of an art deco style building in Miami with pastel gradient colors

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

Cities like Miami, Pittsburgh and Austin have been drawing talent and wealth from Silicon Valley for years, but the COVID-19 pandemic accelerated the trend.

In recent months, many investors and entrepreneurs have noisily departed for Miami, citing the region’s favorable business climate and quality of life.

It’s always good to consider one’s options, but before booking a moving van for the Sunshine State — or any emerging tech hub, for that matter — here are some basic questions entrepreneurs should ask themselves.

Vise CEO Samir Vasavada and Sequoia’s Shaun Maguire break down the art of the pitch

Image Credits: Sequoia Capital / Wolfe + Von / TechCrunch

In just a few short years, Vise has gone from launching on the Disrupt Battlefield stage to a unicorn. Co-founders Samir Vasavada and Runik Mehrotra met Sequoia’s Shaun Maguire at an after-party at the event, and Maguire ended up leading a seed and Series A round while Sequoia led the Series B.

Last week, Vise raised its Series C of $65 million and was officially valued at $1 billion post-money.

We spoke to the pair about the early fundraising process for Vise, what Vasavada has learned about delivering a good fundraising pitch, and what stood out about the pitch and the product for Maguire.

Acorns’ SPAC listing depicts a consumer fintech business with a SaaSy revenue mix

Another day, another unicorn public offering.

On Thursday, it was Acorns, a consumer fintech service that blends saving and investing into a freemium product.

Acorns fits inside the larger savings-and-investing boom seen over the last four or five quarters as consumers buffeted by the economic changes brought on by COVID-19 turned to stashing cash and boosting their equities investing cadence.

By now this is old news, but we haven’t had a clear picture of the economics of consumer fintech startups accelerated by the pandemic. Now that Acorns has decided to list via a SPAC — more on that in a moment — we do.

Poor onboarding is the enemy of good hiring

Image of a person talking to two colleagues via videoconferencing.

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

The world of hybrid work is here, and the usual 10-minute intro call, swag bag and first-day team lunch are just not enough to make your new employee feel welcome.

While many companies have found a way to interview and select candidates in a fully remote environment, few have spent time and resources on aligning the “pre-boarding” and onboarding process for the new hybrid world of work. Many employers still rely on old ways of welcoming new hires, despite our totally changed work environment.

It’s important to capitalize on candidates’ enthusiasm and eagerness from the moment the offer is signed instead of when they log in on Day One, because first impressions can make or break a candidate’s chances of staying at a company.

 

#ecommerce, #extra-crunch-roundup, #fika-ventures, #finance, #financial-technology, #flywire, #healthtech, #hiring, #john-chen, #miami, #newsletters, #runik-mehrotra, #saas, #samir-vasavada, #sequoia-capital, #shaun-maguire, #startups, #tc, #venture-capital, #vimeo

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Box beats expectations, raises guidance as it looks for a comeback

Box executives have been dealing with activist investor Starboard Value over the last year, along with fighting through the pandemic like the rest of us. Today the company reported earnings for the first quarter of its fiscal 2022. Overall, it was a good quarter for the cloud content management company.

The firm reported revenue of $202.4 million up 10% compared to its year-ago result, numbers that beat Box projections of between $200 million to $201 million. Yahoo Finance reports the analyst consensus was $200.5 million, so the company also bested street expectations.

The company has faced strong headwinds the past year, in spite of a climate that has been generally favorable to cloud companies like Box. A report like this was badly needed by the company as it faces a board fight with Starboard over its direction and leadership.

Company co-founder and CEO Aaron Levie is hoping this report will mark the beginning of a positive trend. “I think you’ve got a better economic climate right now for IT investment. And then secondarily, I think the trends of hybrid work, and the sort of long term trends of digital transformation are very much supportive of our strategy,” he told TechCrunch in a post-earnings interview.

While Box acquired e-signature startup SignRequest in February, it won’t actually be incorporating that functionality into the platform until this summer. Levie said that what’s been driving the modest revenue growth is Box Shield, the company’s content security product and the platform tools, which enable customers to customize workflows and build applications on top of Box.

The company is also seeing success with large accounts. Levie says that he saw the number of customers spending more than $100,000 with it grow by nearly 50% compared to the year-ago quarter. One of Box’s growth strategies has been to expand the platform and then upsell additional platform services over time, and those numbers suggest that the effort is working.

While Levie was keeping his M&A cards close to the vest, he did say if the right opportunity came along to fuel additional growth through acquisition, he would definitely give strong consideration to further inorganic growth. “We’re going to continue to be very thoughtful on M&A. So we will only do M&A that we think is attractive in terms of price and the ability to accelerate our roadmap, or the ability to get into a part of a market that we’re not currently in,” Levie said.

A closer look at the financials

Box managed modest growth acceleration for the quarter, existing only if we consider the company’s results on a sequential basis. In simpler terms, Box’s newly reported 10% growth in the first quarter of its fiscal 2022 was better than the 8% growth it earned during the fourth quarter of its fiscal 2021, but worse than the 13% growth it managed in its year-ago Q1.

With Box, however, instead of judging it by normal rules, we’re hunting in its numbers each quarter for signs of promised acceleration. By that standard, Box met its own goals.

How did investors react? Shares of the company were mixed after-hours, including a sharp dip and recovery in the value of its equity. The street appears to be confused by the results, weighing the report and working out whether its moderately accelerating growth is sufficiently enticing to warrant holding onto its equity, or more perversely if its growth is not expansive enough to fend off external parties hunting for more dramatic changes at the firm.

Sticking to a high-level view of Box’s results, apart from its growth numbers Box has done a good job shaking fluff out of its operations. The company’s operating margins (GAAP and not) both improved, and cash generation also picked up.

Perhap most importantly, Box raised its guidance from “the range of $840 million to $848 million” to “$845 to $853 million.” Is that a lot? No. It’s +$5 million to both the lower and upper-bounds of its targets. But if you squint, the company’s Q4 to Q1 revenue acceleration, and upgraded guidance could be an early indicator of a return to form.

Levie admitted that 2020 was a tough year for Box. “Obviously, last year was a complicated year in terms of the macro environment, the pandemic, just lots of different variables to deal with…” he said. But the CEO continues to think that his organization is set up for future growth.

Will Box manage to perform well enough to keep activist shareholders content? Levie thinks if he can string together more quarters like this one, he can keep Starboard at bay. “I think when you look at the next three quarters, the ability to guide up on revenue, the ability to guide up on profitability. We think it’s a very very strong earnings report and we think it shows a lot of the momentum in the business that we have right now.”

#aaron-levie, #box, #cloud, #cloud-content-management, #earnings, #enterprise, #saas, #starboard-value, #tc

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SaaS needs to take a page out of the crypto playbook

By the time I joined Box in late 2012, the “consumerization of the enterprise” movement was well underway. The playbook was clear: The lessons and tactics from the rise of consumer apps — viral loops, social referrals, frictionless onboarding — could be distilled, packaged and ported over to enterprise.

And the promise was subversive — great products could galvanize a loyal user base and wrest free the fates of multimillion-dollar contracts from suited salespeople peddling unusable software behind closed doors.

While the consumerization of SaaS has taught us how to more effectively get in front of users, this next decade will be about how to properly incentivize them to do the necessary work to have the right product experience.

A decade later, this promise has largely proven true. The consumer playbook contributed to the meteoric rise of Slack, Zoom, Airtable and others, specifically around user acquisition and onboarding. They are beautiful products that are discovered from the bottom up, self-serve, free to start and pay as you grow.

But while this might seem like one of the best times to build a SaaS company, one look at Product Hunt might paint a different story. For every success story like Airtable, there are a dozen lookalikes employing the same consumer-inspired playbook that are getting drowned out.

And for any first-mover startup in a new category thinking they’re reaching escape velocity, there are a dozen copycats in YC waiting around the corner, complete with their beautifully designed apps, and the promise of being “blazingly fast and delightfully simple.”

Image Credits: Fika Ventures

Conventional wisdom suggests that many of these newcomer apps will fall short because they don’t clearly communicate their differentiation, or their signup process isn’t streamlined enough, or they have poor documentation and tutorial videos, or they haven’t courted the right influencers on Twitter, or just plain poor execution.

While some (or all) of these might be true on the individual app level, there is something bigger happening on the aggregate level, and it comes back to one insidious assumption carried over from the consumer playbook: the myth of frictionless onboarding.

The reality is that onboarding is never frictionless. In fact, it’s quite the opposite — it demands that the user uproot their old habits and switch to this new way of being or doing. Just like with a new fitness program, participants feel good after completing the workout, but it takes a lot of activation energy to start and hard work to get there. Similarly, it takes work on the user’s part to get results, and most apps expect users to do this work for free.

But in a crowded marketplace with infinite alternatives, the only way to capture and hold a user’s attention is to directly incentivize them to experience the product, not just be exposed to it. Today’s growth playbook overindexes on spending ad dollars (with diminishing returns) to get premium placement and eyeballs on Google, Facebook or Product Hunt, but very few have tried putting those dollars to work toward ensuring users are actually having the experience they are supposed to.

2019 subscription customer acquisition cost study. Image Credits: Profitwell

To do this, SaaS needs to take a page out of the crypto playbook. So while the past decade of the consumerization of SaaS has taught us how to more effectively get in front of users, this next decade will be about the cryptofication of SaaS and how to properly incentivize users to do the necessary work to have the right experience with your product.

#column, #customer-experience, #ec-column, #ec-enterprise-applications, #saas, #software-as-a-service, #software-platform, #tc, #usability

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SpotOn raises $125M in a16z-led Series D, triples valuation to $1.875B

Certain industries were hit harder by the COVID-19 pandemic than others, especially in its early days.

Small businesses, including retailers and restaurants, were negatively impacted by lockdowns and the resulting closures. They had to adapt quickly to survive. If they didn’t use much technology before, they were suddenly being forced to, as so many things shifted to digital last year in response to the COVID-19 pandemic. For companies like SpotOn, it was a pivotal moment. 

The startup, which provides software and payments for restaurants and SMBs, had to step up to help the businesses it serves. Not only for their sake, but its own.

“We really took a hard look at what was happening to our clients. And we realized we needed to pivot, just to be able to support them,” co-CEO and co-founder Matt Hyman recalls. “We had to make a decision because our revenues also were taking a big hit, just like our clients were. Rather than lay off staff or require salary deductions, we stayed true to our core values and just kept plugging away.”

All that “plugging away” has paid off. Today, SpotOn announced it has achieved unicorn status with a $125 million Series D funding round led by Andreessen Horowitz (a16z).

Existing backers DST Global, 01 Advisors, Dragoneer Investment Group and Franklin Templeton also participated in the financing, in addition to new investor Mubadala Investment Company. 

Notably, the round triples the company’s valuation to $1.875 billion compared to its $625 million valuation at the time of its Series C raise last September. It also marks San Francisco-based SpotOn’s third funding event since March 2020, and brings the startup’s total funding to $328 million since its 2017 inception.

Its efforts have also led to impressive growth for the company, which has seen its revenue triple since February 2020, according to Hyman.

Put simply, SpotOn is taking on the likes of Square in the payments space. But the company says its offering extends beyond traditional payment processing and point-of-sale (POS) software. Its platform aims to give SMBs the ability to run their businesses “from building a brand to taking payments and everything in-between.” SpotOn’s goal is to be a “one-stop shop” by incorporating tools that include things such as custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital loyalty.

When the pandemic hit, SpotOn ramped up and rolled out 400 “new product innovations,” Hyman said. It also did things like waive $1.5 million in fees (it’s a SaaS business, so for several months it waived its monthly fee, for example, for its integrated restaurant management system). It also acquired a company, SeatNinja, so that it could expand its offering.

“Because a lot of these businesses had to go digital literally overnight, we built a free website for them all,” Hyman said. SpotOn also did things like offer commission-free online ordering for restaurants and helped retail merchants update their websites for e-commerce. “Obviously these businesses were resilient,” Hyman said. “But such efforts also created a lot of loyalty.” 

Today, more than 30,000 businesses use SpotOn’s platform, according to Hyman, with nearly 8,000 of those signing on this year. The company expects that number to triple by year’s end.

Currently, its customers are split about 60% retail and 40% restaurants, but the restaurant side of its business is growing rapidly, according to Hyman.

The reason for that, the company believes, is while restaurants initially rushed to add online ordering for delivery or curbside pickup, they soon realized they “wanted a more affordable and more integrated solution.”

Image Credits: SpotOn co-founders Zach Hyman, Doron Friedman and Matt Hyman / SpotOn

What makes SpotOn so appealing to its customers, Hyman said, is the fact that it offers an integrated platform so that businesses that use it can save “thousands of dollars” in payments and software fees to multiple, “à la carte” vendors. But it also can integrate with other platforms if needed.

In addition to growing its customer base and revenue, SpotOn has also boosted its headcount to about 1,250 employees (from 850 in March of 2020). Those employees are spread across its offices in San Francisco, Chicago, Detroit, Denver, Mexico City, Mexico and Krakow, Poland.

SpotOn is not currently profitable, which Hyman says is “by choice.”

“We could be cash flow positive technically whenever we choose to be. Right now we’re just so focused on product innovation and talent to exceed the needs of our clients,” he said. “We chose the capital plan so that we could really just double down on what’s working so well.”

The new capital will go toward further accelerating product development and expanding its market presence.

“We’re doubling down on our single integrated restaurant management system,” Hyman said. 

The raise marks the first time that a16z has put money in the startup, although General Partner David George told TechCrunch he was familiar with co-founders Matt Hyman and Zach Hyman through mutual friends.

George estimates that about 80% of restaurants and SMBs use legacy solutions “that are clunky and outdated, and not very customer friendly.” The COVID-19 pandemic has led to more of these businesses seeking digital options.

“We think we’re in the very early days in the transition [to digital], and the opportunity is massive,” he told TechCrunch. “We believe we’re at the tipping point of a big tech replacement cycle for restaurant and small business software, and at the very early stages of this transition to modern cloud-native solutions.”

George was also effusive in his praise for how SpotOn has executed over the past 14 months.

“There are companies that build great products, and companies that can build great sales teams. And there are companies that offer really great customer service,” he said. “It’s rare that you find two of those and extremely rare to find all three of those as we have in SpotOn.”

#advisors, #andreessen-horowitz, #business-software, #chicago, #cloud, #denver, #detroit, #dragoneer-investment-group, #dst-global, #e-commerce, #finance, #fintech, #franklin-templeton, #fundings-exits, #krakow, #mexico, #mexico-city, #mubadala-investment-company, #olo, #payment-processing, #payments, #point-of-sale, #poland, #recent-funding, #saas, #san-francisco, #series-c, #spoton, #startup, #startups, #tc, #venture-capital

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Matera raises another $43 million to turn residential building management into SaaS

French startup Matera has announced that is has raised a new $43 million (€35 million) Series B funding round led by Mubadala Capital. Bpifrance, Burda Principal Investments as well as existing investors Index Ventures and Samaipata are also participating.

The company is building a vertical SaaS for residential property management. In France, co-owners of the common space of a building can decide to ditch the company that handles residential building management for them and do it themselves.

And it could work particularly well for small buildings with 10 or 15 apartments. There are fewer relationships to manage, fewer bills to pay and less work in general.

When co-owners vote to switch to Matera, they get a web-based platform and a mobile app to view information and see all the contracts with various partners — think about elevator maintenance, heating maintenance, water, electricity, etc.

If something feels odd, you can contact a residential building expert on Matera. They can help you make sure you comply with the law and file paperwork for you.

The platform also guides you when it comes to leading an annual co-owner meeting. It can help you communicate with all co-owners with a forum, an on-demand letter service, etc. Essentially, all co-owners get their own login information.

In October 2020, the company launched a new service to tackle a bigger chunk of the building management stack. Matera clients can now decide to manage their building’s bank account through the platform. This way, co-owners pay directly on Matera and everybody can keep track of the budget over time.

With today’s funding round, Matera plans to expand to Germany. The startup has been growing rapidly as it now manages 3,000 buildings, representing a 300% year-over-year jump. Overall, 60,000 owners use Matera.

“This past year gave us the opportunity to prove the relevance of our model and our value proposition, showing why Matera is the perfect solution for our times. The crisis sped up the digital transformation of our market, while at the same time increasing the attachment to our homes and buildings,” co-founder and CEO Raphaël di Meglio said in a statement. “Our clients wanted more transparency, and to save money and that’s exactly what we can bring them.”

By the end of 2021, Matera wants to manage 6,000 buildings including 40 in Germany. The company currently has 200 employees and plans to hire another 50 employees.

#europe, #france, #france-newsletter, #fundings-exits, #matera, #proptech, #saas, #startups

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Atlan raises $16M led by Insight Partners to build a collaboration hub for data-driven teams

Young startup Atlan, which has built a SaaS data collaboration platform and is courting customers in international markets, has now won the trust of some high-profile investors.

Atlan said on Tuesday it has raised $16 million in its Series A financing round that was led by Insight Partners. Bob Muglia (former CEO of Snowflake), Bob Moore and Jake Stei (founders of Stitch) and Auren Hoffman (founder of Safegraph and Liveramp), and Akshay Kothari (co-founder and COO of Notion) also invested in the round, as did existing investors Sequoia Surge and Waterbridge Ventures.

The startup — which was founded in India and now has teams across the U.S., Singapore, Philippines, and Nigeria — operates an eponymous data stack that brings together diverse data from internal and external sources such as Snowflake and Databricks to one interface and allows teams to collaborate easily.

The thesis behind Atlan is that the way most people in enterprises deal with data is inefficient. This is because of the fundamental diversity of people involved — scientists, analysts, engineers, business users — who all have their own skill sets and tool preferences.

This makes collaboration between the teams a challenge as they struggle to find the right data at the right time, for instance.

It’s a challenge that the founders of Atlan — Prukalpa Sankar and Varun Banka (pictured above) — faced first hand at their first venture, SocialCops. The venture was behind several data science for social good projects including India’s National Data Platform and SDGs global monitoring in collaboration with the United Nations.

Atlan started out as an internal tool to help the data team at SocialCops carry out projects more efficiently, before being opened up to teams around the world.

“We are reimagining the human experience with data — why can’t data assets be shared as easily as sharing a link on Google Docs, or if Google Analytics can tell you usage on a website, why can’t we do the same for our data?” said Sankar.

Teddie Wardi, Managing Director at Insight Partners, likened Atlan’s relevance to companies just as Figma is crucial to design teams and Github is important to engineering teams.

Atlan Discovery 2

Dashboard of Atlan (Atlan)

In an interview with TechCrunch, Sankar said more than 60% of Atlan’s clients today are in the U.S., and the market will be a big focus as the startup scales. She declined to reveal the number of clients the startup has amassed, but said the startup has grown 16X times in the last two quarters.

Some of its clients include giants such as Unilever, Scripps Health, Postman, and Techstyle, one of the world’s largest membership-based fashion firms with a diverse portfolio of brands including Fabletics, Savage X Fenty, JustFab, FabKids, and ShoeDazzle.

“As we rolled-out our modern data platform, we were looking for a product that made it easier to democratize our data and was less dependent on someone central answering each individual analyst’s questions on a one-off basis. Legacy solutions in the market were tailored to legacy systems and approaches where IT or a single data stewardship team owns the data,” said Danielle Boeglin Ragan, Vice President of Data & Analytics at Techstyle, in a statement.

“Atlan was the only solution that was built for a collaborative, bottom-up approach. With native integrations with our modern analytics stack like Snowflake and Tableau, Atlan was very easy to set-up – we had all of our data sources flowing within the first day.”

The startup plans to deploy the fresh capital to expand its team of 40 people across marketing, sales, and customer success, said Banka.

“Atlan has become a valuable resource for the data team to get context about data. In the long run, for our data democratization vision, we see the entire organization working towards analyzing the data and taking actions in a coherent, seamless fashion. Having Atlan in the mix of our toolchains opens the possibility of providing data context at scale, thereby enabling the entire org to be data aware and data driven.” said Prudhvi Vasa, Analytics Leader at Postman, in a statement.

#atlan, #auren-hoffman, #bob-moore, #bob-muglia, #funding, #liveramp, #saas, #safegraph, #sequoia-capital-india, #snowflake, #stitch, #waterbridge-ventures

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Interactio, a remote interpretation platform, grabs $30M after seeing 12x growth during COVID-19

Interactio, a remote interpretation platform whose customers include massive institutions like the United Nations, European Commission and Parliament along with corporates like BMW, JP Morgan and Microsoft, has closed a whopping $30 million Series A after usage of its tools grew 12x between 2019 and 2020 as demand for online meeting platforms surged during the coronavirus pandemic.

The Series A funding is led by Eight Roads Ventures and Silicon Valley-based Storm Ventures, along with participation from Practica Capital, Notion Capital, as well as notable angels such as Jaan Tallinn, the co-founder of Skype, and Young Sohn, ex-chief strategy officer of Samsung.

The Vilnius, Lithuania-based startup offers digital tools to connect meetings with certified interpreters who carry out real-time interpretation to bridge language divides between participants. It does also offer a video conferencing platform which its customers can use to run remote meetings but will happily integrate with thirty party software like Zoom, Webex etc. (Last year it says its digital tools were used alongside 43 different video streaming platforms.)

Interactio’s interpreters can be in the room where the meeting is taking place or doing the real-time interpretation entirely remotely by watching and listening to a stream of the meeting. (Or, indeed, it can support a mix of remote and on-site interpretation, if a client wishes.)

It can also supply all the interpreters for a meeting — and it touts a strict vetting procedure for onboarding certified interpreters to its platform — or else it will provide training to a customer’s interpreters on the use of its tools to ensure things run smoothly on the day.

At present, Interactio says it works with 1,000+ freelance interpreters, as well as touting “strong relations with interpretation agencies” — claiming it can easily quadruple the pool of available interpreters to step up to meet rising demand.

It offers its customers interpretation in any language — and in an unlimited number of languages per event. And last year it says it hosted 18,000+ meetings with 390,000 listeners spread across more than 70 countries.

Now, flush with a huge Series A, Interactio is gearing up for a future filled with increasing numbers of multi-lingual online meetings — as the coronavirus continues to inject friction into business travel.

“When we started, our biggest competition was simultaneous interpretation hardware for on-site interpretation. At that time, we were on the mission to fully replace it with our software that required zero additional hardware for attendees besides their phone and headphones. However, for institutions, which became our primary focus, hybrid meetings are the key, so we started partnering with simultaneous interpretation hardware manufacturers and integrators by working together on hybrid events, where participants use hardware on-site, and online participants use us,” a spokeswoman told us.

“This is how we differentiate ourselves from other platforms — by offering a fully hybrid solution, that can be integrated with hardware on-site basically via one cable.”

“Moreover, when we look at the market trends, we still see Zoom as the most used solution, so we compliment it by offering professional interpretation solutions,” she added.

A focus on customer support is another tactic that Interactio says it relies upon to stand out — and its iOS and Android apps do have high ratings on aggregate. (Albeit, there are bunch of historical complaints mixed in suggesting it’s had issues scaling its service to large audiences in the past, as well as sporadic problems with things like audio quality over the years.)

While already profitable, the 2014-founded startup says the  Series A will be used to step on the gas to continue to meet the accelerated demand and exponential growth it’s seen during the remote work boom.

Specifically, the funds will go on enhancing its tech and UX/UI — with a focus on ensuring ease of access/simplicity for those needing to access interpretation, and also on upgrading the tools it provides to interpreters (so they have “the best working conditions from their chosen place of work”).

It will also be spending to expand its client base — and is especially seeking to onboard more corporates and other types of customers. (“Last year’s focus was and still is institutions (e.g. European Commission, European Parliament, United Nations), where there is no place for an error and they need the most professional solution. The next step will be to expand our client base to corporate clients and a larger public that needs interpretation,” it told us.)

The new funding will also be used to expand the size of its team to support those goals, including growing the number of qualified interpreters it works with so it can keep pace with rising demand.

While major institutions like the UN are never going to be tempted to skimp on the quality of translation provided to diplomats and politicians by not using human interpreters (either on premise or working remotely), there may be a limit on how far professional real-time translation can scale given the availability of real-time machine translation technology — which offers a cheap alternative to support more basic meeting scenarios, such as between two professionals having an informal meeting.

Google, for example, offers a real-time translator mode that’s accessible to users of its smartphone platform via the Google voice assistant AI. Hardware startups are also trying to target real-time translation. The dream of a real-life AI-powered ‘Babel Fish’ remains strong.

Nonetheless, such efforts aren’t well suited to supporting meetings and conferences at scale — where having a centralized delivery service that’s also responsible for troubleshooting any audio quality or other issues which may arise looks essential.

And while machine translation has undoubtedly got a lot better over the years (albeit performance can vary, depending on the languages involved) there is still a risk that key details could be lost in translation if/when the machine gets it wrong. So offering highly scalable human translation via a digital platform looks like a safe bet as the world gets accustomed to more remote work (and less globetrotting) being the new normal.

“AI-driven translation is a great tool when you need a quick solution and are willing to sacrifice the quality,” says Interactio when we ask about this. “Our clients are large corporations and institutions, therefore, any kind of misunderstanding can be crucial. Here, the translation is not about saying a word in a different language, it’s about giving the meaning and communicating a context via interpretation.

“We strongly believe that only humans can understand the true context and meaning of conversations, where sometimes a tone of voice, an emotion and a figure speech can make a huge difference, that is unnoticed by a machine.”

#android, #artificial-intelligence, #assistant, #covid-19, #eight-roads-ventures, #europe, #european-commission, #european-parliament, #fundings-exits, #interactio, #jaan-tallinn, #jp-morgan, #lithuania, #machine-translation, #microsoft, #notion-capital, #online-meetings, #practica-capital, #remote-work, #saas, #samsung, #silicon-valley, #skype, #storm-ventures, #translation, #translator, #united-nations, #video-conferencing, #web-conferencing, #webex, #young-sohn, #zoom

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