So you want to raise a Series A

During a seed funding round, a founder needs to convince a venture capital investor on a vision. But during a Series A fundraise, napkin-stage ideas don’t make the cut — a founder needs product progress, numbers, and revenue (or at least a plan to eventually generate some).

In many ways, the stakes are higher for a Series A — and Bucky Moore, a partner at Kleiner Perkins, joined TechCrunch Early Stage last week to give founders tactical advice on the process of raising one.

Moore spoke about storytelling over semantics, pricing, and where his firm sees itself “raising the bar” for startups.

Here are a few key points; a full video and a transcript of the entire conversation are linked at the bottom.


Explain to investors why you are raising now

More companies will raise seed rounds than Series A rounds, simply due to the fact that many startups fail, and venture only makes sense for a small fraction of businesses out there. Every check is a new cycle of convincing and proving that you, as a startup, will have venture-scale returns. Moore explained that startups looking to move to their next round need to explain to investors why now is their moment.

The way I think about “why now” is [that] it is an opportunity for you as a founder to convey a unique insight and understanding of your market opportunity, the history of the space that you’re in, why companies have succeeded or failed in that space, historically speaking, and what are the known challenges from a go-to-market perspective; what headwinds will you be up against at a macro level. These are all things that I think people like me get really excited about when hearing unique insight from founders, because it suggests that they’ve really studied their market opportunity, and they understand it. (Timestamp: 2:19)

#bucky-moore, #early-stage-2021, #ec-how-to, #ec-techcrunch-early-stage, #event-recap, #fundraising, #kleiner-perkins, #series-a, #startups, #venture-capital

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Nuvocargo raises $12M to digitize the freight logistics industry

Despite hundreds of billions of dollars’ worth of goods flowing across the U.S.-Mexican border each year, the freight industry has remained analog — each side of the border offering up its own maze of bureaucracy.

Nuvocargo, a digital logistics platform for cross-border trade, is trying to modernize the process. The company offers an all-in-one service that rolls freight forwarding, customs brokerage, cargo insurance and even trade financing into one UI-friendly software and app. Housing all of these services under one app makes it easier for companies to track their supply chain and gives customs and logistics teams access to more centralized information, according to Nuvocargo CEO Deepak Chhugani.

“And you just have one single audit trail in case something goes wrong,” Chhugani told TechCrunch, adding that the process helps reduce or eliminate the extra costs that come with a high administrative overhead. It also lets customers take a high-level look at their operations from within a single interface, he said.

Chhugani likened the experience to something like UberEats, which offers customers the ability to easily track food orders from restaurant to home.

“Just imagine, because you are dealing with so many different parties, you lose visibility on what’s going on. If you want a snapshot of – what did I spend end-to-end? – you actually have to go through all these email chains or faxes or texts with different providers,” Chhugani explained. “Some of them might be in another country. So [Nuvocargo] just creates more visibility throughout the process, from where the goods literally are to visibility around your finances.”

But Nuvocargo is thinking beyond the actual movement of goods. The company is also starting to offer customs brokerage, comprehensive cross-border cargo insurance, and factoring, or short-term account receivable finance. The last of these solves an especially difficult pain point for trucking companies, who sometimes must wait up to net-90 days to be paid.

The approach has caught investors’ eyes: nearly one year after announcing it had raised a $5.3 million seed round, the company has closed on a $12 million Series A funding led by QED Investors and with injections from David Velez, Michael Ronen, Raymond Tonsing, FJ Labs and Clocktower. Investors NFX and ALLVP, which participated in the previous round, also participated.

The “holy grail” of their new offerings, as Chhugani called it, is trade financing. Because Nuvocargo will already have a relationship with companies, including an understanding of credit and fraud risk, its hope is that it can offer financial products at a competitive rate.

This is what attracted QED Investors, a firm that typically focuses on financial technology rather than logistics and trucking.

“After speaking with [Deepak] and seeing the connection points and parallels between what we were looking at in e-commerce and the challenges of actually getting goods across border, the fintech spark went off in my own head,” Lauren Connolley Morton, a Partner at QED, said in an interview with TechCrunch. “The opportunities for factoring, for lending, for insuring goods are all very much right up our alley.”

Although Chhugani declined to disclose Nuvocargo’s valuation after this most recent round of funding, it’s clear there is plenty of room to grow into the logistics industry’s huge and seemingly disaggregated value chain.

#logistics, #nuvocargo, #qed-investors, #series-a, #transportation

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OctoML raises $28M Series B for its machine learning acceleration platform

OctoML, a Seattle-based startup that offers a machine learning acceleration platform build on top of the open-source Apache TVM compiler framework project, today announced that it has raised a $28 million Series B funding round led by Addition Captial. Previous investors Madrona Venture Group and Amplify Partners also participated in this round, which brings the company’s total funding to $47 million. The company last raised in April 2020, when it announced its $15 million Series A round led by Amplify

The promise of OctoML is that developers can bring their models to its platform and the service will automatically optimize that model’s performance for any given cloud or edge device. The founding team created the TVM project, which

As Brazil-born OctoML co-founder and CEO Luis Ceze told me, since raising its Series A round, the company started onboarding some early adopters to its ‘Octomizer’ SaaS platform.

Image Credits: OctoML

“It’s still in early access, but we are we have close to 1,000 early access sign-ups on the waitlist,” Ceze said. “That was a pretty strong signal for us to end up taking this [funding]. The Series B was pre-emptive. We were planning on starting to raise money right about now. We had barely started spending our Series A money — we still had a lot of that left. But since we saw this growth and we had more paying customers than we anticipated, there were a lot of signals like, ‘hey, now we can accelerate the go-to-market machinery, build a customer success team and continue expanding the engineering team to build new features.”

Ceze tells me that the team also saw strong growth signals in the overall community around the TVM project (with about 1,000 people attending its virtual conference last year). As for its customer base (and companies on its waitlist), Ceze says it represents a wide range of verticals that range from defense contractors to financial services and life science companies, automotive firms and startups in a variety of fields.

Recently, OctoML also launched support for the Apple M1 chip — and saw very good performance from that.

The company has also formed partnerships with industry heavyweights like Microsoft (which is also a customer), Qualcomm, AMD and Sony to build out the open-source components and optimize its service for an even wider range of models (and larger ones, too).

On the engineering side, Ceze tells me that the team is looking at not just optimizing and tuning models but also the training process. Training ML models can quickly become costly and any service that can speed up that process leads to direct savings for its users — which in turn makes OctoML an easier sell. The plan here, Ceze tells me, is to offer an end-to-end solution where people can optimize their ML training and the resulting models and then push their models out to their preferred platform. Right now, its users still have to take the artifact that the Octomizer creates and deploy that themselves, but deployment support is on OctoML’s roadmap.

“When we first met Luis and the OctoML team, we knew they were poised to transform the way ML teams deploy their machine learning models,” said Lee Fixel, founder of Addition. “They have the vision, the talent and the technology to drive ML transformation across every major enterprise. They launched Octomizer six months ago and it’s already becoming the go-to solution developers and data scientists use to maximize ML model performance. We look forward to supporting the company’s continued growth.”

#amd, #amplify, #amplify-partners, #artificial-intelligence, #brazil, #developer, #enterprise, #lee-fixel, #machine-learning, #madrona-venture-group, #microsoft, #ml, #octoml, #qualcomm, #recent-funding, #seattle, #series-a, #sony, #startups, #venture-capital

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Wingcopter raises $22 million to expand to the U.S. and launch a next-generation drone

German drone technology startup Wingcopter has raised a $22 million Series A – its first significant venture capital raise after mostly bootstrapping. The company, which focuses on drone delivery, has come a long way since its founding in 2017, having developed, built and flown its Wingcopter 178 heavy-lift cargo delivery drone using its proprietary and patented tilt-rotor propellant mechanism, which combines all the benefits of vertical take-off and landing with the advantages of fixed-wing aircraft for longer distance horizontal flight.

This new Series A round was led by Silicon Valley VC Xplorer Capital, as well as German growth fund Futury Regio Growth. Wingcopter CEO and founder Tom Plümmer explained to the in an interview that the addition of an SV-based investor is particularly important to the startup, since it’s in the process of preparing its entry into the U.S., with plans for an American facility, both for flight testing to satisfy FAA requirements for operational certification, as well as eventually for U.S.-based drone production.

Wingcopter has already been operating commercially in a few different markets globally, including in Vanuatu in partnership with Unicef for vaccine delivery to remote areas, in Tanzania for two-way medical supply delivery working with Tanzania, and in Ireland where it completed the world’s first delivery of insulin by drone beyond visual line of sight (BVLOS, the industry’s technical term for when a drone flies beyond the visual range of a human operator who has the ability to take control in case of emergencies).

Wingcopter CEO and co-founder Tom Plümmer

While Wingcopter has so far pursued a business as an OEM manufacturer of drones, and has had paying customers eager to purchase its hardware effectively since day one (Plümmer told me that they had at least one customer wiring them money before they even had a bank account set up for the business), but it’s also now getting into the business of offering drone delivery-as-a-service. After doing the hard work of building its technology from the ground up, and seeking out the necessary regulatory approvals to operate in multiple markets around the world, Plümmer says that he and his co-founders realized that operating a service business not only meant a new source of revenue, but also better-served the needs of many of its potential customers.

“We learned during this process, through applying for permission, receiving these permissions and working now in five continents in multiple countries, flying BVLOS, that actually operating drones is something we are now very good at,” he said. This was actually becoming a really good source of income, and ended up actually making up more than half of our revenue at some point. Also looking at scalability of the business model of being an OEM, it’s kind of […] linear.”

Linear growth with solid revenue and steady demand was fine for Wingcopter as a bootstrapped startup founded by university students supported by a small initial investment from family and friends. But Plümmer says the company say so much potential in the technology it had developed, and the emerging drone delivery market, that the exponential growth curve of its drone delivery-as-a-service model helped make traditional VC backing make sense. In the early days, Plümmer says Wingcopter had been approached by VCs, but at the time it didn’t make sense for what they were trying to do; that’s changed.

“We were really lucky to bootstrap over the last four years,” Plümmer said. “Basically, just by selling drones and creating revenue, we could employ our first 30 employees. But at some point, you realize you want to really plan with that revenue, so you want to have monthly revenues, which generally repeat like a software business – like software as a service.”

Wingcopter 178 cargo drone performing a delivery for Merck.

Wingcopter has also established a useful hedge regarding its service business, not only by being its own hardware supplier, but also by having worked closely with many global flight regulators on their regulatory process through the early days of commercial drone flights. They’re working with the FAA on its certification process now, for instance, with Plümmer saying that they participate in weekly calls with the regulator on its upcoming certification process for BVLOS drone operators. Understanding the regulatory environment, and even helping architect it, is a major selling point for partners who don’t want to have to build out that kind of expertise and regulatory team in-house.

Meanwhile, the company will continue to act as an OEM as well, selling not only its Wingcopter 178 heavy-lift model, which can fly up to 75 miles, at speeds of up to 100 mph, and that can carry payloads up to around 13 lbs. Because of its unique tilt-rotor mechanism, it’s not only more efficient in flight, but it can also fly in much windier conditions – and take-off and land in harsher conditions than most drones, too.

Plümmer tells me that Wingcopter doesn’t intend to rest on its laurels in the hardware department, either; it’s going to be introducing a new model of drone soon, with different capabilities that expand the company’s addressable market, both as an OEM and in its drones-as-a-service business.

With its U.S. expansion, Wingcopter will still look to focus specifically on the delivery market, but Plümmer points out that there’s no reason its unique technology couldn’t also work well to serve markets including observation and inspection, or to address needs in the communication space as well. The one market that Wingcopter doesn’t intend to pursue, however, is military and defense. While these are popular customers in the aerospace and drone industries, Plümmer says that Wingcopter has a mission “to create sustainable and efficient drone solutions for improving and saving lives,” and says the startup looks at every potential customer and ensures that it aligns with its vision – which defense customers do not.

While the company has just announced the close of its Series A round, Plümmer says they’re already in talks with some potential investors to join a Series B. It’s also going to be looking for U.S. based talent in embedded systems software and flight operations testing, to help with the testing process required its certification by the FAA.

Plümmer sees a long tail of value to be built from Wingcopter’s patented tilt-rotor design, with potential applications in a range of industries, and he says that Wingcopter won’t be looking around for any potential via M&A until it has fully realized that value. Meanwhile, the company is also starting to sow the seeds of its own potential future customers, with training programs in drone flights and operations it’s putting on in partnership with UNICEF’s African Drone and Data Academy. Wingcopter clearly envisions a bright future for drone delivery, and its work in focusing its efforts on building differentiating hardware, plus the role it’s playing in setting the regulatory agenda globally, could help position it at the center of that future.

#aerospace, #ceo, #darmstadt, #delivery-drone, #emerging-technologies, #federal-aviation-administration, #ireland, #recent-funding, #robotics, #science-and-technology, #series-a, #software, #startups, #tanzania, #tc, #technology, #unicef, #united-states, #unmanned-aerial-vehicles, #wing, #wingcopter

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African edtech startup uLesson lands a $7.5 million Series A

ULesson, an edtech startup based in Nigeria that sells digital curriculum to students through SD cards, has raised $7.5 million in Series A funding. The round is led by Owl Ventures, which closed over half a billion in new fund money just months ago. Other participants include LocalGlobe and existing investors, including TLcom Capital and Founder Collective.

The financing comes a little over a year since uLesson closed its $3.1 million seed round in November 2019. The startup’s biggest difference between now and then isn’t simply the millions it has in the bank, it’s the impact of the coronavirus pandemic on its entire value proposition.

ULesson launched into the market just weeks before the World Health Organization declared the coronavirus a pandemic. The startup, which uses SD cards as a low-bandwidth way to deliver content, saw a wave of smart devices enter homes across Africa as students adapted to remote education.

“The ground became wet in a way we didn’t see before,” founder and CEO Sim Shagaya said. “It opens up the world for us to do all kinds of really amazing things we’ve wanted to do in the world of edtech that you can’t do in a strictly offline sense,” the founder added.

Similar to many edtech startups, uLesson has benefited from the overnight adoption of remote education. Its positioning as a supplementary education tool helped it surface 70% month over month growth, said Shagaya. The founder says that the digital infrastructure gains will allow them to “go online entirely by Q2 this year.”

It costs an annual fee of $50, and the app has been downloaded more than 1 million times.

With fresh demand, Shagaya sees uLesson evolving into a live, online platform instead of an offline, asynchronous content play. The startup is already experimenting with live tutoring: it tested a feature that allowed students to ask questions while going through pre-recorded material. The startup got more than 3,000 questions each day, with demand so high they had to pause the test feature.

“We want you to be able to push a button and get immediate support from a college student sitting somewhere in the continent who is basically a master in what you’re studying,” he said. The trend of content-focused startups adding on a live tutoring layer continues when you look at Chegg, Quizlet, Brainly and others.

The broader landscape

E-learning startups have been booming in the wake of the coronavirus. It’s led to an influx of tutoring marketplaces and content that promises to serve students. One of the most valuable startups in edtech is Byju’s, which offers online learning services and prepares students for tests.

But Shagaya doesn’t think any competitors, even Byju’s, have cracked the nut on how to do so in a digital way for African markets. There are placement agencies in South Africa and Kenya and offline tutoring marketplaces that send people to student homes, but no clear leader from a digital curriculum perspective.

“Everybody sees that Africa is a big opportunity,” Shagaya said. “But everybody also sees that you need a local team to execute on this.”

Shagaya thinks the opportunity in African edtech is huge because of two reasons: a young population, and a deep penetration of private school-going students. Combined, those facts could create troves of students who have the cash and are willing to pay for supplementary education.

The biggest hurdle ahead for uLesson, and any edtech startup that benefitted from pandemic gains, is distribution and outcomes. ULesson didn’t share any data on effectiveness and outcomes, but says it’s in the process of conducting a study with the University of Georgia to track mastery.

“Content efforts and products [will] live or die at the altar of distribution,” Shagaya said. The founder noted that in India, for example, pre-recorded videos do well due to social nuances and culture. ULesson is trying to find the perfect sauce for videos in markets around Africa and embed that into the product.

#africa, #coronavirus, #covid-19, #digital-learning, #early-stage, #education, #marketplace, #owl-ventures, #recent-funding, #remote-education, #series-a, #sim-shagaya, #startups, #ulesson

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Robot lawyer startup DoNotPay now lets you file FOIA requests

DoNotPay, the consumer advice company that started out helping people easily challenge parking tickets, has come a long way since it launched. It’s expanded to help consumers cancel memberships, claim compensation for missed flights, and even sue companies for small claims. In the early days of the pandemic, the startup helped its users file for unemployment, where many state benefit sites crashed.

Now the so-called “robot lawyer” has a new trick. The startup now lets you request information from U.S. federal and state government agencies under the Freedom of Information Act.

FOIA allows anyone to request information from the government, with some exceptions. But ask anyone with experience in filing FOIAs (hello!) and they can tell you that requesting data requires skill and practice to avoid having the request thrown out for being too broad, or not being specific enough. And when you do eventually get something back, it might not be what you expect.

That’s where DoNotPay wants to help. The new feature guides you through how to file a request for information, as well as wrangle the fee waivers and option to expedite processing — which is up to you to convince the government department why you should get the information for free and faster than regular FOIA requests. (In reality, the FOIA system is massively under-resourced, and responses can take months or years to get back.) After asking you a series of questions and what you want to request, DoNotPay generates a formal FOIA request letter using your answers and files it to the government agency on your behalf.

A screenshot of Do Not Pay's website.

Do Not Pay’s website. (Screenshot: TechCrunch)

DoNotPay’s founder and chief executive Joshua Browder said he’s hoping the new feature can help consumers “beat bureaucracy.”

“Hundreds of users have requested a FOIA product, because the government makes it deliberately difficult and bureaucratic to exercise these rights,” Browder told TechCrunch.

Browder said that DoNotPay “would not exist” without FOIA laws. “When we got started appealing parking tickets, we used previous requests to see the top reasons why parking tickets were dismissed,” he said. Browder said he’s hoping the feature will help consumers uncover more injustices — just like with parking tickets — to feed his product with more features. “The overall strategy is to use any interesting FOIA data to build great new DoNotPay products,” he said.

DoNotPay raised $12 million in its Series A earlier this year, led by investment firm Coatue Management, with participation from Andreessen Horowitz, Founders Fund, and and Felicis Ventures. The startup has just three employees, including Browder, and is valued at about $80 million, the company confirmed.

The FOIA filing feature is free for academics and journalists, and is included as part of the company’s subscription service of $3 per month for everyone else.

#andreessen-horowitz, #articles, #coatue-management, #donotpay, #felicis-ventures, #freedom-of-information-act, #joshua-browder, #security, #series-a, #startups, #united-states

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Shop-Ware raises cash as cars make a comeback

Shop-Ware has been waiting for a year like 2020 since 2015.

The startup, which sells software to neighborhood automotive shops to digitize their operations, had struggled to capture capital from venture firms. Until recently, its sole major investor was aftermarket automotive giant Bosch.

For companies like Shop-Ware, the disruptive wake of COVID-19 has cleared a path to capital as mainstream investors have sought out startups with services and products needed in the pandemic era. Investors finally get Shop-Ware founder Carolyn Coquillette’s vision and business. Their endorsement: $15 million in funding through a Series A round led by Insight Partners.

“It’s a different level of validation in terms of this industry going through a transition and catching the eye of traditional investors,” Coquillette said.

Coquillette says Shop-Ware will use he funds to fuel growth across its operations, sales and marketing teams.

The fresh capital comes as Shop-Ware has tripled its customer base while also lowering churn, Coquillette said, although she would not disclose total revenue numbers or whether the company is profitable.

The idea of Shop-Ware began when Coquillette started her own San Francisco-based auto shop, Luscious Garage, in 2007. The goal from the get-go was to offer customers a peek into what happens in an auto shop. It meant more communications from the repair-person to the car-owner, and a software platform was the best way to do it. Eventually, the push for modernized software became less of an in-house project and more of a standalone company. By 2015, she had a product and an incorporated company.

Shop-Ware helps auto-repair shops streamline operations both inside and out of the shop. Auto-repair shops are able to use Shop-Ware to track employee hours, inventory ordering and management and integrate with third-party tools such as Quickbooks. Shop-Ware also helps the neighborhood auto-repair worker communicate and charge customers through text or a web-based interface.

The intricacies of car ownership are something that Coquillette thinks that the average consumer doesn’t understand, so she built an entire business around adding more transparency to the clunky process.

“There is no way that a normal person is going to appreciate what it takes to fix their car,” Coquillette said. “The car is built to distract you and hide its complication for you by design so that you agree to buy it.” In other words, she says, you’re buying a “magic carpet.”

It’s an easy pitch for the most part, the founder says.

“Everybody who owns the car has gone to a repair shop and had an unsavory experience,” she said. “It’s pretty obvious to be like ‘oh yeah, you can make that experience less unsavory.’”

The real roadblock for the startup is convincing a business to adopt technology to change a process that isn’t technically broken. COVID-19 has been the impetus for auto shops — some of which have been steadfast in their pen-and-paper approach —to turn to a digital platform to communicate and operate.

The sector of digitizing auto-repair processes has grown considerably since Shop-Ware first launched five years ago.

Concierge startups such as CarDash and Wrench have popped up over the past several years to give customers an easier way to request maintenance checks. The services consolidate auto repair shops under one, approachable umbrella, which Coquillette thinks is the wrong approach.

“I’m a real big believer that you need to enable those independent providers,” she said. “You have to basically let those special snowflakes be their own snowflakes.”

A closer competitor to Shop-Ware is Shopmonkey, which raised a $25 million Bessemer-led Series B in August. It is welcome competition, Coquillette remarks, because it has put an investment spotlight on the category.

“There’s been a wakeup call around autonomy and how we related to our cars,” she said.

Now it’s up to Shop-Ware to take that wakeup call and turn it into cash.

 

 

#automotive, #bessemer, #carolyn-coquillette, #fundings-exits, #series-a, #shop-ware, #startups

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JupiterOne raises $19M Series A to automate cyber asset management

Asset management might not be the most exciting talking topic, but it’s often an overlooked area of cyber-defenses. By knowing exactly what assets your company has makes it easier to know where the security weak spots are.

That’s the problem JupiterOne is trying to fix.

“We built JupiterOne because we saw a gap in how organizations manage the security and compliance of their cyber assets day to day,” said Erkang Zheng, the company’s founder and chief executive.

The Morrisville, N.C.-based startup, which spun out from healthcare cloud firm LifeOmic in 2018, helps companies see all of their digital and cloud assets by integrating with dozens of services and tools, including Amazon Web Services, Cloudflare, and GitLab, and centralizing the results into a single monitoring tool.

JupiterOne says it makes it easier for companies to spot security issues and maintain compliance, with an aim of helping companies prevent security lapses and data breaches by catching issues early on.

The company already has Reddit, Databricks and Auth0 as customers, and just secured $19 million in its Series A, led by Bain Capital Ventures and with participation from Rain Capital and its parent company LifeOmic.

As part of the deal, Bain partner Enrique Salem will join JupiterOne’s board. “We see a large multibillion dollar market opportunity for this technology across mid-market and enterprise customers,” he said. Asset management is slated to be a $8.5 billion market by 2024.

Zheng told TechCrunch the company plans to use the funds to accelerate its engineering efforts and its go-to-market strategy, with new product features to come.

#bain-capital-ventures, #computer-security, #computing, #enrique-salem, #free-software, #internet-security, #north-carolina, #security, #series-a, #software, #version-control, #web-services

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Decrypted: How a teenager hacked Twitter, Garmin’s ransomware aftermath

A 17-year-old Florida teenager is accused of perpetrating one of the year’s biggest and most high-profile hacks: Twitter.

A federal 30-count indictment filed in Tampa said Graham Ivan Clark used a phone spearphishing attack to pivot through multiple layers of Twitter’s security and bypassed its two-factor authentication to gain access to an internal “admin” tool that let the hacker take over any account. With two accomplices named in a separate federal indictment, Clark — who went by the online handle “Kirk” — allegedly used the tool to hijack the accounts of dozens of celebrities and public figures, including Bill Gates, Elon Musk and former president Barack Obama, to post a cryptocurrency scam netting over $100,000 in bitcoin in just a few hours.

It was, by all accounts, a sophisticated attack that required technical skills and an ability to trick and deceive to pull off the scam. Some security professionals were impressed, comparing the attack to one that had the finesse and professionalism of a well-resourced nation-state attacker.

But a profile in The New York Times describes Clark was an “adept scammer with an explosive temper.”

In the teenager’s defense, the attack could have been much worse. Instead of pushing a scam that promised to “double your money,” Clark and his compatriots could have wreaked havoc. In 2013, hackers hijacked the Associated Press’ Twitter account and tweeted a fake bomb attack on the White House, sending the markets plummeting — only to quickly recover after the all-clear was given.

But with control of some of the world’s most popular Twitter accounts, Clark was for a few hours in July one of the most powerful people in the world. If found guilty, the teenager could spend his better years behind bars.

Here’s more from the past week.


THE BIG PICTURE

Garmin hobbles back after ransomware attack, but questions remain

#accel, #amazon-web-services, #cloud-computing, #computer-security, #crime, #cybercrime, #data-breach, #decrypted, #elon-musk, #extra-crunch, #garmin, #google-cloud, #growth-marketing, #law-enforcement, #market-analysis, #phishing, #privacy, #ransomware, #security, #security-breaches, #series-a, #social, #startups, #tc, #twitter, #u-s-treasury, #venture-capital

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How to time your Series A fundraise

When founders start fundraising is as important as how they make their pitch to investors.

Timing matters and it’s more complicated than founders might realize, but it’s not just about picking the right month or time of day. Finding the right time to fundraise requires a micro- and macro-level strategy, according to Jake Saper of Emergence Capital, who joined TechCrunch’s virtual Early Stage event last week.

“There are really two angles to think about,” Saper said. The first is the macro perspective that takes into account the general flow of deals in the industry. Then there’s the micro timing that is specific — and different — for every startup, he added.

While Saper was particularly focused on giving advice to startup founders who have already raised a seed round and are preparing to raise a Series A, he said that most of his guidance can be applied to companies at a variety of funding stages. Let’s get started with the basics.

Peak pitch deck

The reality is that founders fundraise in all times of the year. However, there are certain times of the year when investors are more actively reviewing pitch decks.

January and February, followed by September, are the most active months for investors, based on data from DocSend that measured visits per pitch deck sent out by entrepreneurs each month.

Emergence Capital pitch deck data Early Stage

Image Credits: Jake Saper/Emergence Capital

This fits with Emergence’s anecdotal evidence. The firm sees founders who spend a lot of December preparing for a big launch or fundraise in January and February, Saper said. By the time founders begin sending decks out in January, VCs are back from holiday vacations or other tech-related events, like CES. The same rhythm begins in summer with founders using these months to prep for fundraising in the fall.

While this is a common time to pitch VCs, keep in mind that you’re also fighting for their attention, Saper said.

#covid-19, #emergence-capital, #funding, #fundraising, #jake-saper, #series-a, #tc, #techcrunch-early-stage, #venture-capital

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Decrypted: Police hack criminal phone network; Randori raises $20M Series A

Last week was, for most Americans, a four-day work week. But a lot still happened in the security world.

The U.S. government’s cybersecurity agencies warned of two critical vulnerabilities — one in Palo Alto’s networking tech and the other in F5’s gear — that foreign, nation state-backed hackers will “likely” exploit these flaws to get access to networks, steal data or spread malware. Plus, the FCC formally declared Chinese tech giants Huawei and ZTE as threats to national security.

Here’s more from the week.


THE BIG PICTURE

How police hacked a massive criminal phone network

Last week’s takedown of EncroChat was, according to police, the “biggest and most significant” law enforcement operation against organized criminals in the history of the U.K. EncroChat sold encrypted phones with custom software akin to how BlackBerry phones used to work; you needed one to talk to other device owners.

But the phone network was used almost exclusively by criminals, allowing their illicit activities to be kept secret and go unimpeded: drug deals, violent attacks, corruption — even murders.

That is, until French police hacked into the network, broke the encryption and uncovered millions of messages, according to Vice, which covered the takedown of the network. The circumstances of the case are unique; police have not taken down a network like this before.

But technical details of the case remain under wraps, likely until criminal trials begin, at which point attorneys for the alleged criminals are likely to rest much of their defense on the means — and legality — in which the hack was carried out.

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The Sun Exchange raises $3M for crypto driven solar power in Africa

South Africa based renewable energy startup Sun Exchange has raised $3 million to close its Series A funding round totaling $4 million.

The company operates a peer-to-peer, crypto enabled business that allows individuals anywhere in the world to invest in solar infrastructure in Africa.

How’s that all work?

“You as an individual are selling electricity to a school in South Africa, via a solar panel you bought through the Sun Exchange,” explained Abe Cambridge — the startup’s founder and CEO.

“Our platform meters the electricity production of your solar panel. Arranges for the purchasing of that electricity with your chosen energy consumer, collects that money and then returns it to your Sun Exchange wallet.”

It costs roughly $5 a panel to get in and transactions occur in South African Rand or Bitcoin.

“The reason why we chose Bitcoin is we needed one universal payment system that enables micro transactions down to a millionth of a U.S. cent,” Cambridge told TechCrunch on a call.

He co-founded the Cape Town headquartered startup in 2015 to advance renewable energy infrastructure in Africa. “I realized the opportunity for solar was enormous, not just for South Africa, but for the whole of the African continent,” said Cambridge.

“What was required was a new mechanism to get Africa solar powered.”

Sub-Saharan Africa has a population of roughly 1 billion people across a massive landmass and only about half of that population has access to electricity, according to the International Energy Agency.

Recently, Sun Exchange’s main market South Africa — which boasts some of the best infrastructure in the region — has suffered from blackouts and power outages.

Image Credits: Sun Exchange

Sun Exchange has 17,000 members in 162 countries who have invested in solar power projects for schools, businesses and organizations throughout South Africa, according to company data.

The $3 million — which closed Sun Exchange’s $4 million Series A — came from the Africa Renewable Power Fund of London’s ARCH Emerging Markets Partners.

With the capital the startup plans to enter new markets. “We’re going to expand into other Sub-Saharan African countries. We’ve got some clear opportunities on our roadmap,” Cambridge said, referencing Nigeria as one of the markets Sun Exchange has researched.

There are several well-funded solar energy startups operating in Africa’s top economic and tech hubs, such as Kenya and Nigeria. In East Africa, M-Kopa sells solar hardware kits to households on credit then allows installment payments via mobile phone using M-Pesa mobile money. The venture is is backed by $161 million from investors including Steve Case and Richard Branson.

In Nigeria, Rensource shifted from a residential hardware model to building solar-powered micro utilities for large markets and other commercial structures.

Sun Exchange operates as an asset free model and operates differently than companies that install or manufacture solar panels.

“We’re completely supplier agnostic. We are approached by solar installers who operate on the African continent. And then we partner with the best ones,” said Cambridge — who presented the startup’s model at TechCrunch Startup Battlefield in Berlin in 2017.

“We’re the marketplace that connects together the user of the solar panel to the owner of the solar panel to the installer of the solar panel.”

Abe Cambridge, Image Credits: TechCrunch

Sun Exchange generates revenues by earning margins on sales of solar panels and fees on purchases and kilowatt hours generated, according to Cambridge.

In addition to expanding in Africa, the startup looks to expand in the medium to long-term to Latin America and Southeast Asia.

“Those are also places that would really benefit from from solar energy, from the speed in which it could be deployed and the environmental improvements that going solar leads to,” said Cambridge.

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Nigeria’s Helium Health raises $10M Series A for Africa expansion

Nigerian startup Helium Health sits in a good position during a difficult period, according to its co-founder.

The Lagos based healthtech venture is in the black, has batted away acquisition offers, and just raised a $10 million Series A round, CEO Adegoke Olubusi told TechCrunch.

The startup offers a product suit that digitizes data, formalizes monetization and enables telemedicine for health care systems in Nigeria, Liberia, and Ghana.

Helium plans to use the latest funding round to hire and expand to North and East Africa, including Kenya, Rwanda, Uganda and Morocco, Olubusi confirmed on a call.

He co-founded the startup in 2016 — with Dimeji Sofowora and Tito Ovia — to bring better delivery of medical services in Nigeria and broader Africa.

“It’s really about tackling three core problems that we see in the healthcare sector in Africa: inefficiency, fragmentation and a lack of data,” said Olubusi.

When he and co-founders Sofowora and Oviato set out doing research for Helium, they noted a data desert on medical info across the continent’s healthcare infrastructure.

“We figured out very quickly that that is a long term problem to solve. And the best way to get the data and access to it is to give simple technology to the providers and let them use it to make their lives more efficient.”

Helium Health has since developed several core product areas for healthcare entities with application for providers, payment, patients, and partners.

It offers tech solutions and developer resources for administration, medical records and financial management. Helium Health has digital payment and credit products for hospitals and insurance providers.

As part of the latest financing, the startup is launching several new products — such as the MyHelium Patient app to facilitate appointments and information sharing between healthcare providers and citizens.

Images Credits: Helium Health

Helium also accelerated deployment of a telemedicine platform in response to the coronavirus hitting Nigeria and the lockdowns that ensued.

“In the last three weeks since we launched we’ve had roughly 360 hospitals sign up, and they’ve had thousands of [online] visits already,” Olubusi said.

Helium Health generates revenues by charging percentages and fees on its products, services and accompanying transactions. Current clients include several hospitals in the West Africa region, such as Paelon Memorial in Lagos.

Helium Health’s model got the attention of the startup’s $10 million Series A backers and Silicon Valley accelerator Y-Combinator — which accepted the startup into its spring 2017 batch.

Global Ventures and Africa Healthcare Masterfund co-led the investment with participation that included Tencent and additional Y-Combinator support.

Global Ventures General Partner Noor Sweid confirmed the Dubai based fund’s co-lead of the round and that the firm will take a Helium Health board seat.

The path of the startup’s CEO —  Adegoke Olubusi — to tech founder passed through the U.S. and traditional corporate roles. He went to Maryland in 2014 to complete an advanced degree in engineering at Johns Hopkins University, then did a stint at Goldman Sachs before landing positions in big tech with eBay and PayPal.

Olubusi found work with big corporates less than stimulating and gravitated to forming his own company and returning to Nigeria.

“When I was at eBay and Goldman I was really bored and I wanted to do something more challenging,” he said. “We thought, ‘why don’t we pick a problem that is a long-term problem in Africa,’” Olubusi explained.

Helium Health founders (L to R) Dimeji Sofowora, Tito Ovia, and Adegoke Olubusi: Image Credits: Helium Health

The founder believes the products Helium Health creates can improve the poor health care stats in countries such as Nigeria — which stands as Africa’s largest economy and most populous nation.

Nigeria also ranked 142nd out of 195 countries on health performance indicators in The Lancet’s 2018 Healthcare Access and Quality Index.

On the dismal stats, “We need more properly run hospitals, and we need more profitable hospitals, health systems and health care providers,” said Olubusi.

Better monetization and organization of hospitals could lure more doctors back to African countries, he believes.

“Half my family are doctors but none of them practice in Nigeria. Everyone’s practicing all over the place, but Nigeria,” Olubusi said.

The founder also sees a more digitized and data driven health care sector as something that can draw more entrepreneurs to African healthtech. Compared to dominant sectors, such as fintech, health related startups in Africa gain a small percentage of the continent’s annual VC haul — only 9.3% by Partech’s 2019 stats.

“There are people who want to invest in the market but they can’t…and founders can’t really tackle a healthcare problem because they don’t know what’s going on,” he said.

As for his venture, Olubusi expects growth even given the precarious economic outlook COVID-19 is creating for countries, such as Nigeria — which is expected to enter recession this year.

The coronavirus and lockdowns are shining a light on the country’s healthcare inadequacies (according to Helium Health’s CEO) that people can’t ignore, including the elite.

“This is the first time they can’t get on their jet and leave so they have to go to the hospitals we have. The system was neglected for the last few decades because people had that [previous] option,” said Olubusi.

“I’m hoping this coronavirus crisis will be a period that forces everyone to rethink what we’re doing [on healthcare].”

That could lead to more business for Helium Health.

The startup doesn’t release financial information but has positive net income. “We do generate revenues in millions of dollars and are profitable,” Olubusi said.

Helium Health has received acquisition offers, but declined them, according to its CEO. Olubusi and team intend to grow the venture to the point where it can list on a major global exchange.

“We know this is the kind of business we can take public, without having to sell,” he said.

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African genomics startup 54gene raises $15M led by Adjuvant Capital

Greater availability of African genomic data could lead to medical breakthroughs for the continent’s 1.2 billion people.

That’s the driving proposition of 54gene — a U.S. and Nigeria based startup — that collects African genetic code for use in health research and drug development.

The company has closed a $15 million Series A round, in part, to address a deficiency in these processes.

“As of the time we launched, less then 3% of all genome wide association studies globally had been conducted in Africa. There was a lack of data coming from Africans…and the diaspora,” 54gene founder and CEO Dr. Abasi Ene-Bong said.

“We are trying to address the gap that currently exists in precision medicine for people of the African continent,” he told TechCrunch on a call from Lagos.

New York based Adjuvant Capital led the round 54gene will now deploy toward that goal. Founded in 2019 by Ene-Bong, the company is headquartered in San Francisco with a biobank facility in Lagos that holds capacity for 60,000 samples. The startup has an engineering team and a proprietary platform to catalog and analyze the genetic data.

Image Credits: 54gene

54gene also has over 300 researchers, clinicians and geneticists across the continent and a research lab in Nigeria.

With the $15 million — which brings total VC to $19.5 million — the startup will expand its biobank capabilities to 200,000 samples, with a longer term goal to manage up to 500,000. 54gene is also boosting its lab capabilities. “With this funding we are about to expand that lab so we can process actual genetic data for tens of thousands, if not hundreds of thousands of people,” said Ene-Bong.

54gene plans to hire across the organization, from seeking a new VP of finance to adding additional scientists.

The company recruits research participants in Africa through studies at venues, such as hospitals, to take genetic samples via swab or blood tests. “Participants have to give us their informed consent before any testing,” explained Ene-Bong.

Adjuvant Capital Managing Partner Jenny Yip confirmed the VC firm’s lead on the $15 million investment. In addition to funds from Adjuvant — which itself is backed by The Bill and Melinda Gates Foundation and Novartis — 54gene is a 2019 Y Combinator alum and received follow on funding from the Silicon Valley accelerator.

The company has a longer time horizon to income, but the primary path to revenues is paid co-development of drugs and medicine working with pharmaceutical companies. “When the drug is in the market…and approved medicine [54gene] and the pharma company will share revenues,” said Ene-Bong.

When it comes to life-saving treatments in Africa, big pharma has faced criticism going back decades. The primary point of friction: the industry’s insistence on strict IP enforcement and high-margin prices for HIV-Aids related treatments on the continent. This has led to legal battles between pharma companies and the government of South Africa over that country allowing production of cheaper generic versions of those drugs.

On the value of Africa’s pharmaceutical industry, McKinsey and Company research estimates it at roughly $14 billion, and grossly under its potential — given an addressable market of some percentage of 1.2 billion people for new drugs.

For its part, 54gene’s CEO Abasi Ene-Bong is clear the company is a for-profit entity, but aims to balance money-making motives (and those of pharma partners) with advancing health in Africa.

The startup plans to exert leverage over the pricing process through its practice of co-developing drugs.

Dr Abasi Ene Obong, Image Credits: 54gene

“When you are a service provider to big pharma you can’t really make such a request. But when you are a development partner you co-own a significant stake of what’s being developed and have more of a say,” said Ene-Bong.

The startup is unable to disclose any current big pharma partners or which health issues in Africa it’s aiming genetic research toward tackling.

“I can say we will prioritize diseases that affect Africans disproportionately,” Ene-Bong said.

One obvious ailment in need of more effective prevention and treatment is malaria — with 92% of the world’s 219 million cases occurring in Africa, according to WHO data.

54gene has also turned its capabilities to COVID-19, which has spiked in Africa since mid-March. The company has re-positioned itself to do testing for the virus in Nigeria’s public health facilities and plans to offer coronavirus screening in its Lagos lab soon.

“We hope that when given approval, we can do more than 3000 tests a day,” said Ene-Bong

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