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1. Here are the 85+ startups that launched at YC’s W19 Demo Day 1

With more than 200 companies, the Winter 2019 class is by far YC’s largest yet. It’s so large, in fact, the accelerator had to change the way it does Demo Day — rather than all pitches happening on one stage, they were split across two stages (the “Pioneer” and “Mission” stages) running in parallel.

We were there, and as we do with each class, we’ve brought back our notes on everything we saw.

2. Apple upgrades the iMac line with boosted processors and graphics

The perennial favorite all-in-one is getting some key upgrades that will narrow the gap between the line and the high-end iMac Pro. The key additions are ninth-generation Intel processors and Radeon Pro Vega graphics.

3. Nvidia AI turns sketches into photorealistic landscapes in seconds

This is MS Paint for the AI age.

4. Atlassian acquires AgileCraft for $166M

AgileCraft provides business leaders with additional insights into the current status of technical projects and helps them understand the bottlenecks, risks and dependencies of these projects.

5. Instagram launches shopping checkout, charging sellers a fee

“Checkout with Instagram” launches today in the U.S. with more than 20 top brands, including Adidas, Kylie Cosmetics and Warby Parker, which will no longer have to direct customers to their websites to make a purchase.

6. Devin Nunes is suing Twitter over mean tweets from parody account of his mom

Simultaneously complaining that Twitter silences its critics while asking Twitter to silence his critics is a curious legal strategy — but it’s par for the course for Nunes.

7. HP built a better version of the Oculus Rift

Lucas Matney says the new HP Reverb is probably the best PC-powered consumer VR headset out there, when balancing price and feature set.

Glossier, known for its flagship line of barely there beauty products, has landed a $100 million Series D led by Sequoia Capital. The round values Emily Weiss’ business at a whopping $1.2 billion, fully cementing the company as a startup “unicorn” and tripling the valuation it garnered with a $52 million Series C in 2018.

News of the round was first reported by The Wall Street Journal and later confirmed by Glossier.

“We are building an entirely new kind of beauty company: one that owns the distribution channel and makes customers our stakeholders,” founder and chief executive officer Emily Weiss said in a statement.

As part of the round, which included support from newcomers Tiger Global Management and Spark Capital and existing investors Forerunner Ventures, Thrive Capital, IVP and Index Ventures, Glossier has hired Vanessa Wittman as its chief financial officer. Wittman previously held the same role at Oath and Dropbox. She replaces Henry Davis, who left the direct-to-consumer makeup brand in late 2018. Other recent additions include Edith Chen, Glossier’s new vice president of supply chain operations, and Nick DeAngelo, vice president of operations.

To date, New York-based Glossier has brought in nearly $200 million in venture capital investment, making it one of the most well-funded privately held beauty businesses. What’s next for the company? Weiss tells The WSJ an initial public offering isn’t out of the question, but didn’t provide a timeline. It’s been about five years since Glossier went from blog to business; it still has plenty of time before investors are pushing for an IPO.

Since it launched as a beauty blog in 2010, Glossier has grown into a 200-person business with $100 million in annual revenue in 2018. It has established two brick-and-mortar shops and expanded from au naturel makeup to “dialed-up extras” fit for the Instagram crowd. The recent launch of its first spin-off brand, Glossier Play, hints at a future where Glossier is a multi-brand beauty empire competing with the likes of Ulta and Estée Lauder.

Should VCs be investing in beauty brands?

Makeup is a huge and growing industry venture capitalists have been sleeping on. Megan Quinn, a general partner at Spark Capital, who led the round in Glossier on the firm’s behalf, says online beauty sales are expected to reach $120 billion by 2024. She expects Glossier to win the beauty market as a result of its intimate connection with customers, word of mouth customer acquisition channel and community-building tactics.

“To say that [Weiss] is a force of nature obfuscates her true superpower: she is a fantastic listener,” Quinn writes in a blog post. “By weaving her unique point of view with the feedback loops of her community, she has built a platform to power additional brands that respond to her customer’s needs. More importantly, she has built a world-class team of product designers, supply chain experts, marketing muscle, and arguably one of the largest engineering teams in beauty to make it happen.”

Glossier launches its first spin-off brand, a line of Instagram-friendly ‘dialed-up’ beauty extras

Patreon couldn’t survive charging all creators just a 5 percent rake on the monthly subscriptions they earn from fans while building commerce tools like CRMs and merchandise to try to stay ahead of Twitch, YouTube and Google. But it also didn’t want to screw all its loyal early creators.

So today, Patreon is overhauling its pricing. Any creator can still get a 5 percent rate, but just for a Lite version without bonus tools or different fan tiers. All of Patreon’s extra features will now be in the Pro plan, with an 8 percent rate, but with existing creators grandfathered in at 5 percent. And the new Premium enterprise plan for 12 percent (9 percent for existing creators) will offer full-service merchandise sales, multi-user team accounts and dedicated customer support.

If you want the lower grandfathered rates, you’ll need to join Patreon in the next few weeks before the new rates go into effect in early May.

“With this change, Patreon is a long-term independent company that doesn’t need anyone else. That’s the move we’re making here,” says Patreon’s SVP of Product, Wyatt Jenkins. More sustainable pricing means creators won’t have to fear Patreon selling out in desperation to someone like Facebook that might neglect or exploit them.

Instead, Patreon CEO Jack Conte tells me he wants to balance powerful features with right-sized pricing for different creator types to become the platform-agnostic home for subscription patronage when tech giants are each trying to build their own. “To have a different membership for each distribution platform, that’s not going to work. You need a single place for the bottom of your distribution funnel,” Conte explains.

Patreon now has 3 million fans paying 100,000 creators more than half a billion dollars per year, and it will cross $1 billion in payouts in 2019 after six years in business. But Patreon was starving on its 5 percent rate, which some venture capitalists tell me is why they passed on its funding rounds totaling $105 million led by Thrive Capital and Index. Now it might make enough to keep the lights on, retain ownership and maybe even earn a profit one day.

Jenkins tells me Patreon spent a year talking to more than 1,000 creators to figure out how to re-price its offering. “People don’t like change. But I think in terms of change, we’re going to be able to invest in the different products in different ways. We can put a lot of horsepower into membership,” he explains. The company didn’t want to screw up like when it changed its payment processing rates a year ago, leading to creator backlash and some exodus. “We unilaterally did something that impacted creators’ patrons. That was the real landmine we stepped on.”

What Patreon discovered was some creators, especially individuals and hobbyists, didn’t care for bells and whistles. They wanted cheap and easy recurring payments so they can focus on their art, so Patreon made the 5 percent Lite plan that strips out the extra features but keeps the old rate.

More serious videographers, illustrators, comedians and pundits wanted to offer different price tiers for different levels of exclusive content. They need analytics, special offers, integrations with other productivity and commerce apps and priority customer support when things break. That’s what creators will get for 8 percent, unless they’re grandfathered in at 5 percent.

But Patreon also found there were whole media organizations with 50 employees built atop its patronage platform. They needed to be able to share accounts and get immediate support when necessary. Meanwhile, tons of creators see merchandise as a powerful way to lure in fans who want signed photos, stickers and other swag each month. “Eighty-five percent of our creators tell us we need merchandise. ‘We spend our days in the post office licking stamps. You can get great negotiation leverage since you have scale, so why aren’t you helping us with this?’ We can’t build that on 5 percent,” Jenkins tells me. They’ll all pay the 12 percent Premium plan price unless grandfathered in at 9 percent. Patreon will, in return, process, pack and ship all their merchandise.

Patreon is also changing its payment processing fees to make sure it doesn’t overpenalize smaller contributions, like creators’ popular $1 per month tiers. Now all transactions over $3 incur a 2.9 percent plus $0.30 fee similar to Stripe’s industry standard, while microtransactions under $3 cost 5 percent plus $0.10. Existing creators get the old rates, and people paying via PayPal from outside the U.S. get hit with an extra 1 percent fee.

Surprisingly, one of Patreon’s most popular creators told me they actually felt bad about being grandfathered in at a lower price, because why should they get special treatment compared to other artists who just might not be as tech savvy. That said, they weren’t going to voluntarily pay a higher rate. “I guess I’m not surprised,” Conte responds. “I’ve found that creators are really humble and selfless, always thinking about other people. I can imagine them saying ‘What about these people? Why am I paying less than them?”

If Patreon can power through the rate change without breaking momentum, it could have a bright future. It’s started a patronage trend, but leaked documents show Facebook plans to charge creators up to 30 percent like YouTube already does, and Twitch charges an astronomical 50 percent. But with far more restrictions on content and far more distrust accrued after years of forsaking creators and tense negotiations, Patreon’s neutral platform with the cheapest rate could remain the fan subscription leader at a time when ad revenue shares are proving inadequate to support turning one’s passion into their profession.

Patreon co-founder and CEO Jack Conte

When TechCrunch broke the news that Facebook planned to charge up to 30 percent, Conte said, “Honestly, it was relieving but really disappointing in some way. I think competition is good. I hope there are many membership products. I hope they’re successful and [give creators a choice]. Right now, it’s not a choice. Facebook’s product is not usable. The folks that have used Facebook’s product have turned it off. From a competitor standpoint, it confirmed my thought that Facebook doesn’t understand creators.”

That’s also why he hopes that one day the tech giants might just integrate Patreon rather than compete, and they could each get a cut of subscription revenue.

Looking forward, he says the toughest challenge for Patreon will be building three different products for three distinct types of creators without the infinite wallets of its rivals. “I think Patreon will be raising for a long time,” Conte says. That will fund Patreon’s plans for eventual international operations, where 40 percent of patrons and 75 percent of creators live. Right now Patreon is offered only in English and supports U.S. dollars. But if it can spin up local languages, currencies and payment processors, Patreon could be where creators around the world go to share with their biggest fans.

For a long while, you couldn’t swing a bag of cats around without hitting a retailer looking to create a digital presence. Now, the inverse is growing in popularity, with many digital-first retail brands looking to set up a brick-and-mortar shop.

The latest is Framebridge, a custom framing startup that has raised more than $67 million. The company is launching two new retail stores in the D.C. area, one downtown and one in Bethesda.

“We’ve tested a number of pop-ups, and there were people that had been to our site several times but wanted to see us in person,” said founder and CEO Susan Tynan. “At our pop-ups, average order values were 40 percent higher than they were online.”

The storefronts will still send orders through to the company’s production facility, which will ship final products to end-users. But for folks who come in the store, the hope is that the experience is hyper-similar to using the website.

Framebridge first launched in 2014 with a simple premise: take the pain out of custom framing. The startup lets users browse framing options on the website and see exactly what the piece would look like via website or app. Once the user chooses a frame, Framebridge sends a shipping label and materials to the user, who then sends it to be framed in the Framebridge framing center.

Putting the process online was one step, but bringing down the price was the real innovation here. Through some automation and a refined in-house production process, Framebridge is able to promise customers that the most they’ll pay through the service is $209.

That may sound steep, but folks familiar with the process of getting art framed know just how expensive it can get.

In fact, founder and CEO Susan Tynan came up with the idea for Framebridge after her own harrowing attempt to get four national parks posters framed. Many hours and $1600 later, she decided to shake up the framing industry and has gone on to raise upwards of $67 million from investors like T. Rowe Price, New Enterprise Associates and Revolution.

With the store openings, Framebridge hopes to bring the same simplicity to brick-and-mortar. The company integrated a new POS that allows users to have a nearly identical experience to that of the web and app storefront, allowing them to see their art on screen before they purchase. Plus, the pricing for each frame in every size is clearly marked right on the counter so no customer is ever shocked by the price tag at the end.

[gallery ids="1798965,1798966,1798967,1798968"]

Tynan says that the strategy around launching two stores was to learn as quickly as possible. One store is larger and downtown, whereas the other is slightly smaller and in the suburbs, giving Framebridge the chance to see what works in various environments.

Tynan also mentioned that they’ve put particular effort into making sure the stores are beautiful and inspiring, rather than intimidating.

“The reality is that performance marketing continues to get more expensive and real estate is getting less expensive,” said Tynan. “Framebridge is a distinct category that makes senes offline. And even in my own painful experiences getting things framed before, I didn’t ever hate that it was offline. I hated that it was expensive and intimidating.”

The 14th Street store downtown, located at 1919 14th Street NW in D.C., is opening today at 11am ET, with the Bethesda location, 4806 Bethesda Ave, opening in April.

Peakon, the Denmark headquartered “employee retention platform,” has raised a further $35 million in funding. Described as a Series B extension, the round is led by European venture capital firm Atomico, with backing from existing investors, including EQT Ventures, IDInvest Partners, Balderton Capital, and Sunstone.

Originally offering “people analytics” by enabling companies to more regularly survey employees, Peakon has since evolved to become a fully fledged SaaS for employee retention. It claims to now tackle three critical areas. They are employee engagement, actionable insights to prevent employee problems before they arise, and competitor analysis through benchmarking employee engagement data against Peakon’s proprietary industry-wide data.

Peakon’s surveys are designed to be both fast and conducted weekly, rather than annually (as is the traditional way of surveying employees). They also adhere to standardised questions so as to enable industry wide comparisons. This means that companies using the employee retention software can not only get a more immediate feel for how engaged employees are at any given moment, but also use that data to drive operational decisions and competitor analysis.

For example, Peakon claims to be able to predict when certain employees are in danger of leaving 250 days in advance of doing so. As hiring gets increasingly competitive, this heads up is crucial as it theoretically provides enough time for management to attempt to prevent critical employees from leaving.

Zooming out further, Peakon’s use of standardised questions for the micro surveys it conducts on behalf of customers is enabling the company to build what it claims to be the largest real-time database of “how the world’s workforce is feeling”. By diving deep into this data — based on more than 30 million data points and rising — various macro trends can be established, such as comparing the fall in worker productivity before the winter holidays across countries and demographics.

Meanwhile, I’m told Peakon has grown extremely fast over the last year. This has included opening an office in New York where co-founder Kasper Hulthin is now based, while the company expects its U.S. headcount to be over 50 employees within the next 12 months. Peakon also has offices in U.K., Denmark, Germany, and New Zealand, and says current headcount sits at over 180.

Since launching in early 2016, Peakon’s customers have included the likes of Capgemini, Verizon, BMW, TrustPilot, Harrods and easyJet.

Adds Mattias Ljungman, Partner at Atomico: “As our world continues to change, traditional concepts of work are being redefined. Workers have to deal with constant change, and this is why it is more important than ever for companies to listen to their employees’ voices and create a positive culture through feedback and engagement. Yet, today companies are still struggling to measure their most important asset: their people. We were blown away by Peakon’s rigorous, data-driven approach to this problem”.