Business News

The FDA is cracking down on Juul e-cig sales to minors

Startup News - 7 hours 58 min ago

The FDA has its eye on Juul Labs, the e-cigarette company that has captured nearly half of the $2 billion e-cig market.

Yesterday, the U.S. Food and Drug Administration Commissioner Scott Gottlieb announced a new initiative called the Youth Tobacco Prevention Plan. While the agency is focused on making sure kids don’t have easy access to any e-cigs, the Juul vaporizer seems to be of particular concern to them.

As part of the initiative, the FDA has sent a request for information to Juul Labs in an effort to understand why young people are so attracted to the product.

Over the past year, a number of reports have suggested that teen vape use, especially with the Juul, is steeply on the rise.

The request is for documents related to “product marketing; research on the health, toxicological, behavioral or physiologic effects of the products, including youth initiation and use; whether certain product design features, ingredients or specifications appeal to different age groups; and youth-related adverse events and consumer complaints associated with the products.”

In response, Juul Labs issued a press release announcing its plan to combat underage use. The strategy includes an initial investment of $30 million over the next three years going towards independent research, youth and parent education and community engagement efforts. Juul Labs also said it will support federal and state initiatives to raise the legal minimum purchase age to 21+. The company website has required that purchasers be 21 or older since August 2017.

Here’s what Juul CEO Kevin Burns had to say about it:

Our company’s mission is to eliminate cigarettes and help the more than one billion smokers worldwide switch to a better alternative. We are already seeing success in our efforts to enable adult smokers to transition away from cigarettes and believe our products have the potential over the long-term to contribute meaningfully to public health in the U.S. and around the world. At the same time, we are committed to deterring young people, as well as adults who do not currently smoke, from using our products. We cannot be more emphatic on this point: No young person or non-nicotine user should ever try JUUL.

Juul Labs is not the only organization that the FDA is cracking down on. The agency said it had sent out 40 warning letters to retailers selling e-cigs, including the Juul, to minors. Some of those retailers were caught as the result of a ‘blitz’ that has been underway since the beginning of April.

The agency has also asked eBay to take down all listings of Juul vaporizers, which run the risk of being sold to minors.

Alongside the FDA’s request for information from Juul Labs, the agency is also sending out similar letters to other e-cig manufacturers.

Categories: Business News

Dolo delivers on the Foursquare prophecy of hyper-local tips

Startup News - 10 hours 6 min ago

Dolo is the kindness of strangers as an app. Where’s the prettiest place in the park? What’s the best thing on the menu? How do I skip the line? Dolo lets you leave helpful suggestions for anyone nearby. The new social app launches out of beta today to augment the world with serendipitous tips from strangers. Built by two ex-Apple employees and backed with pre-seed funding from Floodgate, Dolo could reveal the secrets and potential friends hidden in the ether around us.

Like any new social app, Dolo will have a steep uphill climb to user growth. There are also apps like Foursquare, guide books like Lonely Planet and social networks like Facebook and its Recommendations feature to compete with. But they’re often bloated, outdated or unfocused. Dolo hopes to build a new community around turning the whole world into a bulletin board.

“If you take the construct of a cocktail party or a neighborhood bar, people feel more naturally ‘allowed’ to just mingle, eavesdrop, start a conversation or even meet someone new,” says Dolo co-founder and CEO Raja Haddad. “In larger spaces (a park, a neighborhood, a city), there are no vehicles today that allow such frictionless, comfortable, fun socializing.” That means a local expert’s knowledge ends up trapped while tourists and first-timers wander aimlessly.

Haddad and co-founder Benjamin Vigier met when they joined Apple in 2010 and worked on its Apple Store App before Haddad move on to Apple Watch marketing and Vigier helped develop Apple Pay. They later met Andy Mai at Coachella, who grew the Men’s Fashion Advice subreddit to more than a million users. Together they set out “to enable serendipitous ways for people to socialize with other people around them, regardless of their pre-existing social bubbles.”

Dolo’s iOS and Android apps are now open everywhere, but it’s currently focusing on the San Francisco Bay Area, where it centered its 4,000-user beta. The app starts with a feed of the closest tips that automatically re-sort as you move around. Anyone can post that “I need some info or a favor,” “folks need to know this,” “I’m proposing an event,” or “just chatter and banter.” For example, my first contribution was that you can skip the line at famously overpopulated ice cream shop Bi-Rite Creamery by walking down the block to its soft-serve froyo window near SF’s Dolores Park.

That popular hipster picnic spot is actually where Dolo gets its name. And no, it’s not the same as the now defunct “bespoke app” called Dolo from 2013 that just helped you locate your friends in that park.

I was impressed by Dolo’s approach to safety and moderation that other anonymous and hyper-local apps like Yik Yak and Secret neglected until bullying led to their demise. You can use your real name or a pseudonym on Dolo, and choose a pixelated filter or mask sticker to obscure your face from the public. But then if you connect as friends with someone on the app, “the masks come off,” Haddad says, and your profile’s bio is revealed. Meanwhile, users are empowered to moderate comments on their own posts by getting alerted to flags that Dolo reviews too. And all photos get reviewed by a crowdsourced moderation service.

Dolo smartly plans to “focus on achieving density versus going directly for top-line scale,” Haddad explains. That mirrors Facebook’s growth strategy that tried to get lots of users at specific colleges or locations so they don’t enter a ghost town, rather than immediately striving for global scale. It’s already raised $680,000 in a pre-seed round a year ago, but will try to raise a seed round early this summer. It hopes to put that cash into product development, and marketing activations at colleges and public places in the fall. 

Advertisers might be keen to reach potential customers when they’re super close-by and looking for local information. But that will require plenty of users, as well as a tough-to-scale local ads sales team. Haddad admits, “It’s obviously very challenging to get a social platform off the ground, particularly one that relies on location and density.”

Nextdoor has at least proven that people are interested in local info, given it’s active in 160,000 neighborhoods. The question is if an app designed to alert you to what’s around you anywhere, rather than just close to home, will have the same legs. Dolo will also have to outlast specialized apps like Wildfire for celebrity sightings and safety alerts, Citizen for crime mapping and Hive Social for interest-based communities.

It’s somewhat depressing, but an app like Facebook that already has ubiquity, frequent use and local ad relationships might be better equipped to build this product than a startup. Dolo will have to figure out how to make adding and observing tips a constant enough behavior that users don’t forget about it.

But at least Dolo isn’t burdened by a hundred other features crowding out the local recommendations for attention, nor is it constrained by relying on your existing friend graph. A dedicated app for the insights of passersby holds the promise of not only illuminating what’s around us, but also mending our polarized society.

Categories: Business News

Netflix picks up ‘Follow This,’ a weekly series about BuzzFeed reporters

Startup News - 10 hours 43 min ago

Netflix and BuzzFeed News are teaming up for a 20-episode documentary series called Follow This.

According to Variety, the show will be less focused on breaking news and more on taking us behind the scenes to show how BuzzFeed News reporters put together specific stories. For example, in the clip below, BuzzFeed’s Scaachi Koul talks about her reporting around ASMR.

Follow This will be produced by BuzzFeed News, with Jessica Harrop serving as showrunner and one of its executive producers. When it premieres on July 9, it won’t follow Netflix’s standard release strategy. Instead, a new 15-minute episode will come out every week.

Netflix executives have been emphatic about wanting to stay out of the live news business, but the streaming service has introduced more news- and reality-based programming over the past few years, including documentaries (like an upcoming film from Vice Media’s Motherboard) and talk shows.

BuzzFeed, meanwhile, has been creating video series for a variety of channels, including its AM to DM series for Twitter. The company told Variety it’s also pitching cable networks on a nightly news show.

Categories: Business News

Rocketrip raises $15 million to reward cost-saving employees

Startup News - 12 hours 16 min ago

If your company lets you expense the nicest hotel when you travel, why wouldn’t you?

But what if you got to split the savings with your employer by selecting a less expensive hotel?

A New York-based startup called Rocketrip believes most employees will opt to save companies money if they are incentivized to do so. It’s built an enterprise platform that rewards employees with gift cards if they go under budget on travel and transportation.

After five years of signing up business clients like Twitter and Pandora, Rocketrip is raising $15 million in Series C funding led by GV (Google Ventures) to keep expanding. Existing investors Bessemer Venture Partners and Canaan Partners are also in the round.

Inspired by Google’s internal travel system, Rocketrip CEO Dan Ruch calls his solution a “behavioral change platform.” Employees “always optimize for self-preservation, self-interest,” and are likely to book a cheaper flight if it means a gift card at a place like Amazon, Bloomingdale’s or Home Depot, Ruch claims. He said that the average business trip booked by Rocketrip saves companies $208.

Ruch believes that Rocketrip has built a currency that motivates teams. He says some employees even gift Rocketrip points to congratulate colleagues on birthdays and promotions.

When it comes to enterprise platforms, Rocketrip is “one of those unique situations where everyone is really excited to use it,” said Canaan Partners’ Michael Gilroy, who holds a board seat.

Yet Rocketrip is not the only startup looking to help employees make money by cutting on costs. TripActions and TravelBank have also created similar businesses. 

Gilroy insists that “Rocketrip was first” and that he views the others a “validation of the model.”

Rocketrip hopes to someday expand beyond travel to incentivize healthcare choices, like quitting smoking. It also thinks companies will use Rocketrip points to reward employees for community service. “Any time we can motivate an employee,” there’s an opportunity for Rocketrip, Ruch believes.

Categories: Business News

Gfycat ramps up its focus on game clips and highlights as it hits 180M monthly users

Startup News - 12 hours 42 min ago

Gfycat is already a pretty popular host for lots of content like short clips from shows and movies, but there’s also a pretty substantial store of content centered around gaming — which is why the company is starting to put some extra focus on it.

Gfycat, which is centered around creator tools to make those short-form video clips and GIFs, said it’s going to create an interface specifically designed for gamers. Called “Gfycat for gaming,” the startup hopes to ride both the wave of ever-omnipresent GIFs getting shared around the internet and popular, highly shareable game titles like PlayerUnknown’s Battlegrounds and Rocket League. GIFs serve as a pretty good vehicle for delivering highlight reel clips for those games, which is why it’s going to be putting some extra focus on that audience. Gaming is one of the most popular verticals on Gfycat, CEO Richard Rabbat said.

“As we were looking at different verticals, gaming is such a strong vertical, and we wanted gamers to get an experience that just really speaks to what they’re looking for,” he said. “We wanted to just focus on that as opposed to content that was much more mixed. You see a lot of teams or players that will play for hours, but that exciting moment was like 10 seconds or 20 seconds. They want to capture them and keep them, to chat about them, and share them.”

While the platforms are certainly a big component of this, creator tools for getting that content onto the Internet is also a pretty big segment. That’s what Gfycat focuses on, and the company says it has 180 million monthly active users, which is up from 130 million monthly active users in October last year. The service has more than 500 million page views every month, Rabbat said.

There are two changes that are coming with this update: first, there will be a direct home for gaming highlights on Gfycat, where users can follow creators in that area; second, the time limit for Gfycat clips is growing to around 60 seconds instead of just 15, which is a soft change the company made in the past few months. Both are geared toward making content more shareable in order to grab those highlights, which might not just fall into 15 second buckets. Down the line, the company will start working on subscribing to specific channel.

“A lot of gaming moments are created in 10 or 15 seconds,” Rabbat said. “Some of the gamers have been asking us for a longer period. We moved from 15 seconds to 60 seconds so people can share exciting experiences that take a little more time. GIFs are not only just a moment but also it’s a bit of storytelling. We wanted people to have the ability to do that storytelling.”

GIFs are already a big market, and there has even been some activity from the major players looking to dive further into that type of content. Earlier this month, Google acquired Tenor, a GIF platform that has its own keyboard and integrates with a variety of messenger services — even ones like LinkedIn. That a tool like Tenor or Giphy has grown to encompass all those messaging tools is just a further example of how much of an opportunity platforms centered around GIFs have.

The short-form video clips, as Gfycat likes to label them, are a good form factor for compressing a lot of information into a unit of content that’s easy to share among friends or an audience on the Internet. Rather than just sending a text message, a GIF can convey some element of emotion alongside just the typical information or response some user is trying to achieve. That’s led to a big boom for those companies, with Tenor hitting 12 billion GIF searches every month as an example.

Categories: Business News

Drew Houston to upload his thoughts at TC Disrupt SF in September

Startup News - 14 hours 9 min ago

Dropbox is a critically important tool for more than 500 million people, which is why we’re so excited to have founder and CEO Drew Houston on the Disrupt stage in September.

Dropbox launched back in 2007 and Houston has spent the last decade growing Dropbox to the behemoth it is today.

During that time, Houston has made some tough decisions.

A few years ago, Houston decided to move the Dropbox infrastructure off of AWS. In 2014, Houston chose to raise $500 million in debt financing to keep up pace with Box, which was considering an IPO at the time. And in March 2017, Dropbox took another $600 million in debt financing from JP Morgan.

Houston also reportedly turned down a nine-figure acquisition offer from Apple.

All the while, Houston led Dropbox to be cash-flow positive and grew the company to see a $1 billion revenue run rate as of last year.

And, of course, we can’t forget the decision to go public earlier this year.

Interestingly, Houston first told his story to a TechCrunch audience at TC50 in 2008 as part of the Startup Battlefield. In fact, you can check out the original pitch from TC50 right here.

At Disrupt SF in September, we’re excited to sit down with Houston to discuss his journey thus far, the decision to go public and the future of Dropbox.

The show runs from September 5 to September 7, and for the next week, our super early-bird tickets are still available.

Categories: Business News

Hasura snares $1.6M seed for developer-focused Kubernetes solution

Startup News - 2018, April 25 - 11:27pm

Kubernetes has gained in popularity quickly over the last 18 months, but like many highly technical solutions it requires a level of expertise many companies are lacking. A Bangalore/San Francisco startup called Hasura hopes to simplify all of that with a managed Kubernetes solution built with developers in mind.

Today, the company announced a $1.6 million seed round led by Nexus Venture Partners with participation from GREE Ventures.

Kubernetes is a tool that helps companies running containers juggle or orchestrate them. This level of organization is required because the number of containers can grow quickly. If you think of a conductor telling the musicians when to come in and when to leave, Kubernetes plays a similar role for the container system. (For a more complete explanation of containers, see this article.)

The company has focused on getting developers up to speed with the latest technologies quickly. “Our focus from the beginning has been making the application development super fast. How we do that is placing our APIs on top of a PostGres database to deploy any kind of code,” Tanmai Gopal, Hasura CEO and co-founder explained.

Gopal says the idea is to be more than a managed Kubernetes provider by giving developers the tooling they need to get going without having to build the underlying code for every application. “We are going to be the last mile. We’re not just managing the Kubernetes cluster for you. You should have Kubernetes to have control [over your containerized applications], but you also need developer tooling to build on top of it faster,” he said. “We want to automate the unnecessary code writing kind of grunt work. We started off by saying, ‘let’s automate this piece so you don’t have to write this code again’,” he added.

Once they wrote that piece, they realized that this is relevant because this approach enables cloud native in way that wasn’t possible before. “We suddenly realized we were in the right place at the right time, and part of it was luck,” Gopal admitted. It was also skill in providing a set of tools developers could use to build on top of Kubernetes.

Sameer Brij Verma, managing director at lead investor Nexus Venture Partners sees Kubernetes quickly becoming a foundational technology for developers and Hasura is providing a way to get up and running with little expertise. “Using Hasura’s platform, developers can now create cloud-native, portable and “elastic” applications within a few minutes without knowing anything about Kubernetes in the beginning,” Verma said in a statement.

The company launched last year and is split between Bangalore, India and San Francisco.

Categories: Business News

Rockerbox acquires calendar marketing startup Eventable

Startup News - 2018, April 25 - 11:26pm

Rockerbox has acquired Eventable, bringing two digital marketing startups together.

Rockerbox’s technology includes attribution measurement to determine which ads are driving sales, as well as what it calls a Recency Marketing Platform, which targets advertising based on users’ most recent browsing behavior.

Eventable, meanwhile, is focused on bringing marketing to your calendar — its technology can be embedded in display ads, introducing an “add to calendar” button that allows marketers to send updates and personalized notifications to consumers who opt in.

Rockerbox founder and CEO Ron Jacobson said he connected with Eventable because both companies participated in the Entrepreneurs Roundtable Accelerator (albeit in different years). When they started testing out ways to bring their services together, Jacobson said it became clear this was a “one plus one equals three situation.”

“Using the calendar as a marketing channel made perfect sense,” Jacobson said. “And on the attribution side, the calendar is another touch point.”

He added that Eventable co-founders Sameen Karim and Akash Malhotra are joining Rockerbox, along with their entire team.

The plan is for Eventable to continue operating as a separate brand and product. At the same time, the team will look for ways to integrate their products and to sell Eventable customers on Rockerbox’s broader marketing suite.

“It allows us to give our customers a more complete marketing solution,” Karim said.

The financial terms of the acquisition were not disclosed. Eventable had raised $1.2 million in funding from investors, including Alchemist Accelerator, Right Side Capital, Steelhead Ventures, Russ Holdstein and Howard Love.

Categories: Business News

Video consultation service Doctor on Demand raised $74 million so everyone can see a doctor anytime

Startup News - 2018, April 25 - 10:05pm

Healing America’s broken healthcare industry has been at the top of the priority list for almost every politician, entrepreneur and inventor for at least the past 40 years.

Costs continue to climb (roughly 5 percent this year) and spending is already 20 percent of the nation’s GDP. For the trillions of dollars Americans spend on healthcare, they’re getting declining services, more frequent ailments and a steadily diverging standard of care for the rich and the poor in the country.

Something needs to be done — and venture capitalists and some of the biggest names in finance led by Goldman Sachs are investing $74 million in a technology startup they see as a potential solution.

The company is Doctor On Demand, and its solution is video-based telemedicine.

The new funding, led by Goldman Sachs and Princeville Global (with participation from existing investors, including Venrock, Shasta Ventures and Tenaya Capital), will be used to continue the company’s rapid expansion in the U.S. and abroad — and brings the company’s total financing to $160 million.

“This trend of consumerization, which we’re leading, is really going to result in much greater patient-driven healthcare experiences, which will save the patient a lot of money,” says company chief executive Hill Ferguson .

Ferguson knows that the arc of internet services bends toward on demand and he says that healthcare should be no different. “Most people have no idea they can see a board-certified physician on their phone from their bed while they’re sick at two in the morning with a five-minute wait time,” he says.

That’s essentially the service that Doctor On Demand provides.

While the company’s consultations aren’t a panacea for everything that ails the healthcare industry, Ferguson claims his company’s board-certified staff can handle 90 percent of the consultations that happen every day in urgent-care facilities and for $300 less than insurers currently pay out.

While the service started out as something that consumers had to pay out of pocket, it has now transitioned to a more seamless (and cheaper) option for customers — it’s covered by most major insurance carriers.

“We’ve shifted from being a cash pay virtual practice to more of an enterprise player. We’re driving most of our volume through health insurance plans and employers,” Ferguson says.

The company employs its own doctors and staffs its video consultation service 24 hours a day, seven days a week, Ferguson says. Despite the workload — which sees the company’s virtual doctors consult with four patients each hour on average — the company’s 14-day readmission rate (a standard measure of effective diagnoses) is on par with brick and mortar services, Ferguson says.

Roughly 5 percent of the consultations involve patients who need to be referred to specialists, according to Ferguson.

The service also can refer patients to diagnostics and testing facilities to get blood work and other tests that can supplement an initial diagnosis.

Through its agreements with insurers, Doctor On Demand stipulates what kinds of conditions its video consultations can cover, and which ailments and maladies require immediate medical attention. Increasingly, customers are taking advantage of the company’s mental health services — an area that’s grown 240 percent since it was introduced, according to Ferguson.

Mental health is one growth area for the company, and its testing services provide another. In all, Ferguson thinks there’s a $50 billion addressable market in the U.S. alone. A figure, he says, that more than justifies the company’s $160 million (and counting) in funding.

Doctor On Demand isn’t profitable yet, and the new financing still sees the company valued under $1 billion, but Ferguson is confident about the future. “I gotta wear shades,” the chief executive said.

Categories: Business News

BigCommerce raises $64 million to power e-commerce sites

Startup News - 2018, April 25 - 10:00pm

Austin, Texas-based BigCommerce has completed a big round of funding.

The growth-stage startup, which powers e-commerce sites for Sony, Toyota and 60,000 other merchants, has raised $64 million to accelerate its business. The investment was led by Goldman Sachs, with participation from General Catalyst, GGV Capital and Tenaya Capital. And it brings BigCommerce’s total raised to more than $200 million since it was founded in 2009.

BigCommerce has developed a template for its customers to launch websites with manageable shipping and payments tracking. It also makes it easy to cross-sell on Amazon, eBay and Facebook. The company claims it is able to help e-tailers cut down on costs by as much as 80 percent.

“Every product company, brand company, physical retailer on the planet has decided they need to get serious about e-commerce,” said Jeff Richards, managing partner at GGV about why he’s invested. It’s a “huge category with a very big business that’s doing extremely well.”

BigCommerce has built a robust business in the United States and Australia, and hopes to use the capital to expand further internationally. It sees an opportunity to build out its presence in Europe.

The company also recently built an integration with Instagram to make it easier for consumers to purchase directly via the app. BigCommerce also has partnerships with PayPal and Google and plans to double down on cross-platform opportunities.

While BigCommerce’s business resembles Shopify and Salesforce’s recently purchased Demandware, CEO Brent Bellm says that while the former focuses on small businesses and the latter targets large enterprises, BigCommerce’s sweet spot is somewhere in-between. It aims to build sites for brands with between $1 million and $50 million in revenue.

Yet BigCommerce’s own revenue numbers exceed that of the clients it is targeting. Bellm said the company is approaching $100 million in annualized revenue.

When asked about whether that meant the company is targeting an IPO, he said that BigCommerce is “on a track where that’s possible” and that he believed this financing would be “the last round as a private company.”

If Shopify’s stock performance is any indication, public investors are hot on the space. Shares have gone up more than 600 percent since its IPO in 2015.

Competitor Magento, on the other hand, was taken private after spinning off from eBay. Bellm believes that BigCommerce is better positioned to take advantage of a growing preference for SaaS business models.

Categories: Business News

Challenger bank Starling adds investment service Wealthify to its in-app marketplace

Startup News - 2018, April 25 - 8:47pm

Starling, the U.K. challenger bank founded by Anne Boden, continues to execute on its “marketplace banking” vision, adding integration with Aviva-backed online investment service Wealthify.

Starling already has an existing partnership with digital investing service Wealthsimple — meaning that the Starling Marketplace is getting a little more competitive — along with mortgage broker Habito, travel insurance provider Kasko, and receipts & loyalty partner Flux.

However, the Wealthify integration goes a little deeper than most of the current partnerships and represents the next phase of the Starling Marketplace. Unlike PensionBee, for example, which only shares high level data with the Starling app (e.g. the size of your pension pot), Wealthify data-sharing is two-way, meaning that you can authorise Starling to share a limited set of your Starling data with Wealthify to make it a lot easier to sign up to the investment service.

“When a customer clicks ‘add’ from within Starling, new Wealthify users are then asked if they’d like to securely share Starling data with Wealthify (e.g. name, DOB, address, etc as well as account number and sort code for setting up the direct debit, if they want),” Starling’s Chief Platform Officer Megan Caywood explains. “And if they say yes then that auto-populates many of the fields in the Wealthify setup”.

Furthermore, Caywood says Starling is looking to advance each of it partnerships to get to this two-way integration, where Starling customers can more easily access products and services and manage them on an ongoing basis.

More broadly, the idea behind marketplace banking is that your bank will provide you with access to a choice of third-party money-related apps and services. The battle between banks and fintechs isn’t a zero sum game. Partnerships are being forged at a rapid pace, either formally or simply through open APIs mandated by Open Banking/PSD2 legislation.

Meanwhile, Starling isn’t the only challenger bank or fintech in the U.K./Europe building out a marketplace banking vision, in some form or another. To varying degrees, the likes of Monzo, Revolut, Tandem, Curve, and Cleo, are also exploring similar ideas with the end goal to become your financial control centre.

Categories: Business News

Fat Lama, the online marketplace for renting out things you own, raises $10M

Startup News - 2018, April 25 - 4:01pm

Fat Lama, the startup that offers a fully insured peer-to-peer rental marketplace for almost anything, is getting a little fatter. The London-based company has raised $10 million in Series A funding in a round led by Ophelia Brown’s recently outed Blossom Capital, with participation from Niklas Zennström’s Atomico and existing backer Y Combinator.

Aiming to do for rentals what eBay did for buying and selling used items, Fat Lama was conceived in early 2016 after the experience its founders had renovating an office space in London. They found themselves spending almost a third of their budget on what co-founder and CEO Chaz Englander describes as “single-use” items that were difficult to rent, such as power tools, tile-cutters, and industrial vacuums.

“The probability was that the majority of those items were lying around unused in the same block we were working in,” he says, “but our only option to hire was to go to a rental shop on the other side of town, during working hours, to pay a premium for commercial hire. That was when we had the first conversations about creating a rental marketplace”.

For Fat Lama to have a chance of succeeding where older rental startups had failed, the team figured out that a number of problems beyond simply matching supply with demand would need to be solved. Traditional rental companies typically require the borrower to leave quite a large cash deposit in case an item is broken, lost or stolen. Like-wise, equipment-sharing websites that don’t require a deposit can be perceived as too risky for the lender.

Fat Lama’s solution is to fully insure each item rented for an amount up to $30,000, something Englander tells me took nine months to secure and is a major differentiator from competitors. Borrowers are still liable for the full value of an item if they break or lose it, but the insurance will reimburse the lender if there’s a dispute between the borrower and Fat Lama, or if the borrower simply refuses (or can’t) pay. To further manage this risk, Fat Lama requires users to pass identity checks, in addition to employing risk-profiling technology.

“Put simply, we don’t think it makes sense for people to have to buy the things they only use occasionally. And what we’re seeing, whether it’s environmentally or financially driven, is that globally, people are less and less interested in owning things,” says the Fat Lama CEO. “Fat Lama is connecting people with spare stuff to those that need it. By using a combination of risk-profiling technology and insurance, we’re making it not just possible, but safe and seamless, for anyone to have access to almost any item, potentially within minutes”.

There is a community aspect to Fat Lama, too, which is something Englander is keen to protect even as the company scales. Currently lenders and borrowers hand over and collect items in person, where they often share expertise on how to get the most out of an item.

“The breadth of rental categories obviously means that we have an incredibly broad user base in terms of demographics,” he adds.

One obvious demographic is creative professionals, such as DJs, music producers, filmmakers, photographers and art directors, all of whom have “project-driven, often last-minute demands” for niche equipment. “Many are also sitting on big inventories of gear which they rarely use, from which they’re now generating an income in the thousands,” notes Englander.

Meanwhile, after a successful launch in New York earlier this year, including seeing over 6,000 items listed on the site (supply in New York is said to be growing more than three times as fast as it originally did in London), Fat Lama is planning to use the new Series A funding to further grow across the pond. As part of this effort, the U.K. startup is hiring U.S. city managers, as well as investing in its product, engineering and operations teams back in London.

Categories: Business News

Real-time developer tool startup Pusher pulls in $8M in Series A funding

Startup News - 2018, April 25 - 3:00pm

Pusher, the London startup that provides tools and cloud infrastructure for developers to add real-time functionality to their apps, such as push notifications and messages, has pulled in $8 million in Series A funding. The round was led by London VC firm Balderton Capital, with participation from Heavybit, the San Francisco-based investor that specialises in helping developer product companies scale.

Founded in 2011 — off the back of a modest $1 million in seed funding — Pusher aims to significantly lower the barriers for developers who want to build real-time features into their websites and apps. This was originally delivered via a general purpose realtime API and supporting cloud infrastructure, enabling app developers to more easily build things like rich push notifications, live content updates, and various real-time collaboration and communication features.

However, more recently the company has began rolling out additional offerings dedicated to specific real-time functionality. The first of those is Chatkit, an API and SDK intended to do a lot of the heavy lifting required to add chat functionality to an app or service.

In a call, Pusher co-founder Max Williams told me the startup’s Series A will be used to continue building new developer products and to establish a bigger presence in the U.S. so that it can be closer to customers.

Pusher already has a small team working out of Heavybit’s San Francisco office, but in line with growth it plans to eventually set up a bigger office on the West Coast and aims to have up to 30 people working in the U.S. by the end of the year. These will be in sales, marketing and customer support.

In addition, a significant amount will be invested in R&D, too, with Pusher’s own London-based engineering team being bolstered accordingly. Pusher currently employs 60 people.

To that end, Williams says that the new capital will enable Pusher to move a lot faster, in recognition that the real-time developer tool space has not only grown exponentially in the last few years but is also becoming more competitive. He feels that for Pusher to fully take advantage of the opportunity ahead, organic growth — and in turn the company growing at the same pace as revenue — wasn’t going to cut it. Prior to this round of funding the startup had only raised $2.5 million in debt in addition to its original $1 million seed round.

Meanwhile, Pusher says that more than 200,000 developers worldwide are using Pusher’s products and more than 40 billion messages per day are now sent using APIs provided by the company, “connecting more than eight billion devices per month”. Customers include The New York Times, which uses Pusher for updating its realtime news feeds; Mailchimp, which uses it for internal collaboration tools; and DraftKings, which uses Pusher for updating its realtime leaderboards.

Categories: Business News

German insurance ‘robo-advisor’ Clark scores $29 million Series B

Startup News - 2018, April 25 - 2:00pm

Clark, one of a plethora of so-called ‘insurtech’ startups offering something akin to a digital insurance brokerage all delivered through a convenient mobile app, has closed a hefty $29 million in Series B funding.

The round was led by fintech investor Portag3 Ventures, and VC fund White Star Capital, with participation from a number of existing investors including Coparion, Kulczyk Investments, and Yabeo Capital. It brings Clark’s total funding to $45 million.

Founded in July 2015 — and originally out of fintech company builder Finleap — Frankfurt and Berlin-based Clark has built what it describes as an “insurance­ robo-­advisor”. Once you’ve given the startup a mandate to act as your insurance broker, the Clark iOS, Android and web apps let you manage and purchase various insurance products, spanning the full gamut of life, health, and property insurance.

Specifically, its algorithms analyze your current insurance situation and automatically propose ways to improve your coverage or get a better deal than the one you are currently on. It makes the majority of its revenue from management and admin fees paid by insurance companies on its platform, but also via commission on any new policy taken out.

To date, Clark says it has acquired close to 100,000 customers for its digital insurance services, making it one of the largest digital insurance players in Europe. This, we’re told, translates to $310 million in contract volume, which the insurtech startup says is a ten-fold increase from the contract volume it managed in 2016 at the time of its Series A.

Some of that growth appears to have come from partnerships with a number of banks in Germany, including challenger N26, and incumbents ING-DiBa, and DKB. I’m also told Clark has started working on a B2B line, offering Clark technology to banks and other insurance companies as a white-label product. Four deals with leading companies have been signed and are “in development”.

“Over the next few years, we will continue to focus on growth to cement our digital insurance management as the standard in Europe,” says Dr. Christopher Oster, CEO and co-founder of Clark, in a statement. “To drive Clark’s development, we will invest in our team in both Frankfurt and Berlin, especially in technology and marketing”.

Categories: Business News

Vacation rental management service Guesty raises $19.75M

Startup News - 2018, April 25 - 6:32am

As the vacation rental sector heats up — with Airbnb making even more moves to expand its portfolio of services to include multiple tiers of rentals — there’s going to be more and more of a need for people who manage a large number of properties.

Guesty is one service that aims to do that, and today a filing with the Securities and Exchange Commission notes that it’s raised $19.75 million in a new Series B round of financing. While Airbnb may be the dominant home vacation rental service, there are others like VRBO, and managing those properties across multiple different platforms could require handling all of that information in something more analog like an Excel sheet. It’s a kind of CRM tool for property management, ranging from tracking guest check-ins to the amount of revenue a property owner. Guesty also helps property owners by providing tools to manage operations beyond just the tracking.

Airbnb earlier this year started rolling out more tiers of home categories that are geared toward different kinds of travelers. That included high-end tiers called Airbnb Plus and Beyond by Airbnb. While these new categories potentially offer a more granular set of choices for consumers, it might make managing those properties a little more difficult — especially if it’s across multiple different services like Airbnb and VRBO, or even more analog channels. Tools like Guesty can help owners of multiple different properties (that might span multiple tiers) turn those homes into an actual business.

There are also plenty of platforms that are looking for additional services for people managing multiple properties on vacation rental sites. There are startups like Beyond Pricing, which look to help property managers figure out how to best price their homes. Airbnb has its own pricing algorithms, but there’s clear demand for tools that cross multiple platforms. Guesty was party of Y Combinator’s winter 2014 class, and raised $3 million in May last year.

While Airbnb continues to try to expand into new categories and offer home owners a way to rent out their homes — or for owners of multiple properties to run a side business — it’s not the only approach to vacation rentals. One startup, Selina, is looking to convert existing properties into kinds of campuses that cater to different tiers of travelers, ranging from travelers looking to stay in a hostel to ones that are willing to pay for their own rooms. Selina earlier this month said it raised $95 million. Selina is more of a hotel-ish model as it expands from geography to geography, but it also shows that there’s demand for an experience that can cater to a wide variety of guests.

Categories: Business News

New numbers illustrate how fast fundraising has changed for young startups

Startup News - 2018, April 25 - 4:48am

Fundraising is never easy, but it’s even harder when the goal posts are being moved around. Such is the challenge facing today’s youngest startups, which are looking at very different fundraising metrics than new startups did just six or seven years ago.

We explored the issue yesterday with Peter Wagner, who spent more than 14 years with Accel as a managing partner before co-founding the early-stage firm Wing Venture Capital in 2013 with another veteran investor, Gaurav Garg, formerly of Sequoia Capital.

Wagner has an obvious interest in how rounds are changing. Wing has to know how much is reasonable to expect to invest in a company, even while it prefers to invest in companies that don’t yet have revenue or customers. In a competitive funding landscape, its now four-person investing team is also looking to raise the firm’s profile by publishing smart industry research, including, not so long ago, on the state of IoT.

Whatever Wing’s motivations, its findings are worth tracking if you’re a founder who is thinking about raising either a seed or Series A round any time soon. More from our chat with Wagner, along with Wing’s data, follows.

TC: Your second fund, $300 million, was nearly twice the size of your $160 million debut fund. Do you expect your third fund will be even larger? Is this going to be an Accel-size firm some day?

PW: No, we’re actually working hard to keep a lid on our fund size. Early-stage investing doesn’t scale. For us to grow, we’d have to change our investing strategy.

TC: So many firms are doing exactly that, with the notable exception of Benchmark, which has maintained its fund size for the last 18 years roughly. 

PW: I was at Accel when we were [expanding into] having a later-stage practice. We sought out different skills [from potential hires] because it’s a different process. It fact, the more we learned about it, the more we realized how different a discipline it is.

TC: Given that you’re so focused on early-stage financing dynamics, tell us what you’ve learned. How did you put together this new report?

PW: We looked at companies that were funded by the 20 or so leading venture firms between 2010 and 2017. It’s 2,700 companies altogether, and 5,800 financings. If a company raised a seed fund from another firm, but Sequoia led its Series A, all of its financings rounds, including that seed round, were incorporated into our research. We also focused on these companies’ downstream financings [no matter the investors].

TC: So some of these companies are pretty new. Others are eight years old. What should founders know about the numbers?

PW: Today’s cumulative seed capital — because it often comes in in multiple rounds — is larger than the average Series A round was in 2010, which wasn’t all that long ago. The average Series A in 2010 was $4.9 million; by last year, it had reached $12.1 million. The average amount of seed funding a startup raised in 2010 was $1.4 million; as of last year, it was $6.3 million.

TC: That’s a big uptick. Do you find it concerning at all?

PW: Not necessarily. It’s a reflection of the changing strategies of major venture firms. Those defined as Series A investors have mostly adopted a later-stage posture and at scale. And when you’re scaling a venture firm, you’ll do more later-stage investing because you can invest more money. That’s one of the things pulling up Series A sizes.

TC: Looking at another of your charts, it looks like the companies raising A rounds have to be a lot further along than was formerly the case. That’s not exactly a news flash, but it’s still interesting. Perhaps more telling is that 67 percent of them were already generating revenue, unlike 11 percent of their peers in 2010. The same is playing out for seed investments, looks like.

PW: Yes, just 9 percent of seed-funding companies were generating revenue back in 2010; last year, more than half of them were.

VC: So much for “venture” investing. Since everyone is taking so much less risk on these companies at the seed and Series A stage, are they getting less in terms of their ownership of these startups?

PW: Ownership percentages [outside of Wing] are hard to get, other than in IPO prospectuses. Based on anecdotal data and what I’ve observed, major firms are still looking for the same ownership percentages. They’re just paying a lot more for it.

TC: You have other interesting data, including around the number of financings that startups are sealing up before they get to the Series A. It used to be A was the second round. Now, companies have raised nearly three rounds before they get to that point.

That seems not great for founders, who are giving away part of their company with every financing.

PW: As you know, “pre-seed” is a thing now, as are “seed plus” financings. So you have this segmentation within the world of seed before you get to post-adoption, where you have some evidence that things are working and investors can see how rapidly. Seed is the new A.

As for whether founders own less because of this trend, that’s a hard one to track, again because ownership stats are the last ones you’ll find.

TC: Well, you’re investing very early on, at the pre-seed or pre-adoption phase in many cases. Are you still taking the 20 percent that you looked to own when you were doing Series A deals that looked more like seed deals?

PW: Ideally. Other times, we’ll start with a smaller position and build up to that. We play the role of go-to partner, so we want to be in that ownership position.

TC: With things shifting around so much, where is the Valley of Death these days? You obviously have to have a strong startup to land Series A funding.

PW: It’s interesting. Major firms have adopted these scaled-up strategies and they’ve outsourced a lot of the adoption work to investors and incubators and angel investors, who are launching a fleet of a thousand ships. That enables the firms to hang around and see which startups look the best and pick and choose.

What’s notable is they don’t have as much vested interest in companies at the Series A because it’s very different when you make a new investment versus a follow-on investment. It used to be that individuals at these firms were involved much earlier. 

I’m not sure if that’s a healthy or unhealthy development. But it does mean that seed firms have been presented with this expanded territory from which these other firms have backed away. Somebody has to do the foundation building. It’s a great opportunity for seed investors to play a bigger role, but it can certainly be a confusing time for founders, with investors changing, along with the criteria for who you let into your inner circle.

TC: You’ve been in venture for more than 20 years. Is there a correction coming or has something fundamentally changed?

PW: There will be a correction. There will always be a correction. Every time we’ve ever thought the cycle has been broken, we’ve been proven wrong. VC is cyclical. What I don’t know is the date of that correction or how deep it will be.

TC: Do you think venture firms should be raising such gigantic funds right now, given this likelihood? 

PW: The last time around [in the late ’90s], a bunch of people raised really big funds and wound up releasing half the capital or more back to their limited partners when the market changed. Returns on big funds have always disappointed. Things do change and tech is a much more important ingredient. But I do think this is still a boom-bust business.

Categories: Business News

Four MIT students have launched DeepBench to democratize access to expert networks

Startup News - 2018, April 25 - 4:30am
Frederick Daso Contributor Share on Twitter Frederick Daso is a Master's candidate in Aerospace Engineering at MIT writing about college students and recent college graduates pursuing entrepreneurial opportunities.

New European financial regulations requiring fund managers at investment firms to pay banks for research and trading services separately could open the door for new entrants in the professional advisory services marketplace.

The rules, which were approved in 2014, but only took effect in January, are proving to be a boon for four MIT students who launched a company last year to try to grab some of the market.

DeepBench, founded by Devin Basinger, Yishi Zuo, Derek Hans and Nikhil Punwaney, is proposing some novel business model solutions to address what the MIT students see as flaws in the existing market — particularly around the use of expert networks in financial advisory services.

DeepBench co-founders Devin Basinger, Nikhil Punwaney, Derek Hans and Yishi Zuo

Expert networks are communities of experienced professionals in a given field. Fortune 500 companies, hedge funds, private equity firms and other entities rely on individuals from these groups for their insights and expertise. The biggest company in the expert network industry, Gerson Lerman Group (GLG), has nearly 50 percent market share and was on track to reach $400 million in revenue in 2016.

But GLG has had its share of troubles. The company played an integral role in providing the expert that passed confidential information to an SAC Capital trader, which was used as evidence in an insider trading case against the firm and its owner, Steven A. Cohen. The hedge fund ended up paying a record $1.8 billion in fines to the SEC (they did not admit wrongdoing in the case).

There is a significant opportunity to disrupt the expert networking space. As more experienced workers retire, some may want to continue putting their skills to use, albeit in a reduced capacity. Being a part of an expert network allows them to be available for clients who request their expertise in a flexible, convenient capacity. Facilitating this specialized knowledge sharing is a billion-dollar market for the taking.

Aside from established players like GLG and its European competitors, AlphaSights and Third Bridge, other startups like Clarity, Slingshot Insights, Catalant (formerly known as HourlyNerd) and Dūcō are also looking to transform the way expert networking is done. GLG is known to charge a group of four within a firm $100,000 for basic access to their network for a year. In comparison, these startups have different approaches and business models to improving the way clients access the expertise they need. Their efforts reflect two main segments within the expert network market: expert calls and project-based work.

DeepBench and Slingshot Industries are focusing their efforts on expert calls. DeepBench launched its current service in March 2017, which uses its “technology-driven, human-assisted” platform to connect individual clients with available experts for a 30 to 60-minute conversation at an agreed-upon rate. In addition, the startup does not require “learners” to sign long-term contracts or prepay, unlike other firms, allowing for greater client flexibility. Slingshot Industries matches groups of clients with similar interests to an expert to answer their questions. The group would crowdfund the cost for chatting with the expert.

Catalant and Dūcō have aimed for matching clients that need long-term projects completed with the relevant experienced contractor. These clients are looking for experts who are interested in extended-duration work. Catalant leverages its algorithms to quickly match prospective clients with the experts they are looking for based on the former’s search criteria.

Their goal is to make this process seamless, so more experts and clients will feel enabled to collaborate outside of a conventional consulting framework or contracting arrangement. Dūcō appears to take a more conventional approach to connecting clients and experts. The D.C.-based startup vets its pool of experts before offering them up to potential clients. Like Catalant, Dūcō uses matching algorithms to match clients with project work needs to experts ready to assist them.

As investors seek information to keep their competitive edge, and firms need outside help in solving internal problems, on-demand access to expert networks will become necessary. DeepBench currently has more than 1,000 registered experts for their closed beta platform. Currently, more than 20 clients are using the service. Most are top consulting companies, investors and product designers.

“We are focused on finding quality high-fit advisors right now instead of increasing the volume we can have available for clients,” Basinger said.

With a shift in E.U. financial regulations, expert networks are using their momentum in the Asian and U.S. markets to establish themselves in Europe. This specialized knowledge sharing can be shaped by startups like DeepBench as competition between firms continues to intensify.

Categories: Business News

Bose acquires Andrew Mason’s walking tour startup, Detour

Startup News - 2018, April 25 - 2:01am

Groupon founder Andrew Mason’s audio tour startup Detour has been sold to Bose. The acquisition, which involves only the software and tour content — not the team — was quietly announced on Detour’s blog a few days ago, followed by an email to customers. Bose, initially, seems like an unlikely acquirer for an app designed to help people discover a city through narrated walking tours. But its interest in the product has to do with its upcoming AR platform, which involves audio experiences delivered through a pair of sensor-laden glasses.

Bose is now “actively looking for a partner to host the Detour content,” and make it available to its customers, including those on Bose AR.  The Detour app itself will soon shut down.

Mason says he may help Bose a bit in the process of finding that third party, but his focus is on his new company, Descript.

Detour had launched a few years ago, and was entirely self-funded by Mason. Its goal was to offer tourists and locals alike a way to discover a city’s hidden gems, like its off-the-beaten-track shops and alleys — things other tours would overlook. The service arrived to the public with tours in San Francisco starting in 2015, before later expanding to other markets, including international destinations, all available as in-app purchases.

The app, at the time of sale, had around 120 available tours.

A tour of the Marina’s sweets shops in Detour, narrated by a German philosopher

As part of the creation of its tours, Detour had developed some interesting technology — like a tool to transcribe audio that lets you edit the audio file by editing the written transcription, and a way to add music and sound to a narrative by adding it to the transcription.

This technology has now been spun off as a new startup, Descript. The Detour team, including Mason, have been working on Descript for around six months now. Descript, which aims to make editing sound files as easy as editing a Word document, launched in December with $5 million in funding from Andreessen Horowitz.

Given Mason’s current focus, it’s not surprising that Detour was shutting down. But it is a little surprising it found an acquirer.

The app was never able to gain a sizable following on the scale of other travel guides. (It had been ranking in the 400s to 700s in the App Store’s “Travel” category as of late — meaning, practically invisible.) However, its tours were unique and interesting and had been designed with features others at the time lacked — like location awareness or the ability to sync with multiple people in a group, for example.

The Detour app will remain available until May 31, 2018, and all tours will be free through then. Afterwards, the app will be removed from the App Store.

“Thank you to the producers, engineers, designers, and storytellers that made Detour what it is over the last four years. I’m excited to see where Bose takes it,” wrote Mason, on Detour’s blog.

PitchBook claims Detour had raised funding, but Mason says that’s incorrect.

“Detour is self-funded (by me) and we never disclosed how much,” he says. But he did confirm that Mihir Shah, a friend, had invested a “some token number of thousands of dollars in the very beginning,” which is why the investment is listed on Shah’s LinkedIn.

Deal terms were not available, but it was likely a small exit.

It’s unclear when Detour would arrive on Bose AR, as Bose is still in the process of finding a third party to continue with Detour, and hasn’t yet shipped test builds of its AR glasses to developers.

Categories: Business News

Etleap scores $1.5 million seed to transform how we ingest data

Startup News - 2018, April 25 - 1:00am

Etleap is a play on words for a common set of data practices: extract, transform and load. The startup is trying to place these activities in a modern context, automating what they can and in general speeding up what has been a tedious and highly technical practice. Today, they announced a $1.5 million seed round.

Investors include First Round Capital, SV Angel, Liquid2, BoxGroup and other unnamed investors. The startup launched five years ago as a Y Combinator company. It spent a good 2.5 years building out the product, says CEO and founder Christian Romming. They haven’t required additional funding until now because they have been working with actual customers. Those include Okta, PagerDuty and Mode, among others.

Romming started out at adtech startup VigLink and while there he encountered a problem that was hard to solve. “Our analysts and scientists were frustrated. Integration of the data sources wasn’t always a priority and when something broke, they couldn’t get it fixed until a developer looked at it.” That lack of control slowed things down and made it hard to keep the data warehouse up-to-date.

He saw an opportunity in solving that problem and started Etleap . While there were (and continue to be) legacy solutions like Informatica, Talend and Microsoft SQL Server Integration Services, he said when he studied these at a deeply technical level, he found they required a great deal of help to implement. He wanted to simplify ETL as much as possible, putting data integration into the hands of much less technical end users, rather than relying on IT and consultants.

One of the problems with traditional ETL is that the data analysts who make use of the data tend to get involved very late after the tools have already been chosen, and Romming says his company wants to change that. “They get to consume whatever IT has created for them. You end up with a bread line where analysts are at the mercy of IT to get their jobs done. That’s one of the things we are trying to solve. We don’t think there should be any engineering at all to set up an ETL pipeline,” he said.

[gallery ids="1627465,1627466,1627467"]

Etleap is delivered as managed SaaS or you can run it within your company’s AWS accounts. Regardless of the method, it handles all of the managing, monitoring and operations for the customer.

Romming emphasizes that the product is really built for cloud data warehouses. For now, they are concentrating on the AWS ecosystem, but have plans to expand beyond that down the road. “We want to help more enterprise companies make better use of their data, while modernizing data warehousing infrastructure and making use of cloud data warehouses,” he explained.

The company currently has 15 employees, but Romming plans to at least double that in the next 12-18 months, mostly increasing the engineering team to help further build out the product and create more connectors.

Categories: Business News

Catalyst brothers find capital success with $2.4M from True

Startup News - 2018, April 25 - 12:00am

Over the past few years, the old language of “customer support” has been supplanted by the new language of “customer success.” In the old model, companies would essentially disappear following the conclusion of a sale, merely handling customer problems when they arose. Now, companies are actively reaching out to customers, engaging them with education and training and monitoring them with analytics to ensure they have the best time with the product as possible.

What’s changing is the nature of product and services today: subscription. Customers no longer just make a single buying decision about a product, but instead must actively commit to using the product, or else they churn.

New York-based Catalyst, founded by brothers Edward and Kevin Chiu, wants to rebuild customer success from the ground up with an integrated software platform. They have received some capital success of their own, securing $2.4 million in venture capital from Phil Black of True Ventures with participation from Ludlow Ventures and Compound.

New York has had something of an increase in founder mafias, as TechCrunch reported this weekend. Catalyst is no exception to this trend, with the Chiu brothers both working at DigitalOcean, one of New York’s many high-flying enterprise startups. Edward Chiu was director of customer success at the company for a number of years, but had a unique background in sales and also in coding before starting.

Kevin Chiu was head of inside sales at DigitalOcean . “I brought my brother on to do sales at DigitalOcean,” Edward Chiu explains. “We always knew that we wanted to start a company together, but wanted to see if we would kill each other.” The two worked together, and lo and behold, they didn’t kill each other.

Edward Chiu wanted to match the product experience of using DigitalOcean with the experience of using its internal customer success tools. Nothing on the market fit. “Given that DigitalOcean was a very technical product,” Chiu explained, “we decided to build our own tool.” Chiu thought of customer success at DigitalOcean as its own product, and his team built up the platform to improve its functionality and scalability. “We just used the tool and we loved it,” he said, so we “started to show this tool to a bunch of other customer success leaders I am connected with.”

Other customer success leaders said they wanted the platform, and “after the 20th person told me that,” he and his brother spun out of DigitalOcean to go on their own. Unlike enterprise startups in New York a couple of years ago that often struggled to find any investors, Catalyst found cash quickly. “Two weeks in we had more offers than we knew what to do with,” Chiu explained. The two said they had originally targeted a fundraise of $750,000, but ended up at $2.4 million.

Catalyst is a platform that integrates between a number of other major SaaS services such as Salesforce, Zendesk, Mixpanel and others to create a unified dashboard for data around customer success. From there, customer success managers have a set of automated tools to handle engagement, such as customer segmentation and email campaigns.

A major challenge in the customer success world is that these managers often don’t have the skills required to do advanced data analytics, so they often rely on their friends in engineering to run scripts or perform database lookups. The hope is that Catalyst’s feature set is powerful enough that these sorts of ad hoc tasks become a thing of the past. “Because we aggregate all this data, you can run queries,” Chiu explains.

Chiu says that Catalyst doesn’t just want to be a software platform, but rather a movement that pushes every company to think about how they can make their customers successful. “There are so many companies that are starting to understand that it is not something that you do once you raise a Series A, but something you do from day one,” Chiu said. “If you take care of your very first customer, they will constantly promote you and constantly promote your business.”

The company is based in Flatiron, and has eight employees.

Categories: Business News

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