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Updated: 2 hours 53 min ago

Funnel closes $47M Series B to prepare marketing data for better reporting and analysis

6 hours 58 min ago

Funnel, the Stockholm-based startup that offers technology to help businesses prepare — or make “business-ready” — their marketing data for better reporting and analysis, has closed $47 million in Series B funding.

Leading the round is Eight Roads Ventures, and F-Prime Capital, with participation from existing investors Balderton Capital, Oxx, Zobito, and Industrifonden, in addition to Kreos Capital.

Funnel says it will use the injection of capital to accelerate its plans in the U.S. where the company is seeing “strong demand” from enterprises. It will also invest in its technical teams to further its vision of “creating a single source of truth of marketing, sales and other commerce data”.

Founded in 2014 by Fredrik Skantze and Per Made, who are also behind Facebook advertising tool Qwaya, Funnel set out to let marketers automate their online marketing data from multiple platforms in real-time, so that they can more accurately analyse their online marketing spend.

Initially that included visualising the marketing data, but now the company has decided to focus solely on collecting the data from all of the disparate marketing channels, and cleaning it up and normalizing it so that it can be imported into popular business intelligence tools to be analysed.

“[We have] shifted away from visualizing the marketing data to ‘just’ collecting and making it business-ready as we have seen that to be the real pain point for customers,” Funnel co-founder and CEO Fredrik Skantze tells TechCrunch.

“Visualization is done well in existing business intelligence tools once the data is properly prepared. Automating the collection and preparation of the data has proven to be a very hard thing to do right and we wanted to make sure we were the best at this which we now confidently can say we are as we hear that again and again from customers”

To that end, Skantze explains that Funnel has direct connections to tools like Tableau and Google Data Studio. The idea is that customers can instantly visualize the data in the tools they are already familiar with.

Since we last covered Funnel mid 2017, the overarching trend has been an explosive growth in digital marketing. Skantze says that in 2017, 39% of worldwide marketing spend was digital and was mostly e-commerce, gaming and app companies who were putting the majority of their budgets online. Since then, forecasts have been repeatedly adjusted upwards, and in 2020, leading markets like the U.K. are now approaching 70% for digital marketing.

“That means the big brands are putting their big budgets online,” he says. “These brands are moving their marketing online because of the performance promise of digital marketing. But delivering on that performance promise requires being data-driven. This is a huge shift for these organizations that they are gradually coming to grips with as they are traditionally more branding focused. It requires creating new roles like marketing analytics, marketing technologists and putting in place a data infrastructure. This is complex”.

That, of course, plays nicely into the hands of Funnel, which is seeing enterprises far beyond e-commerce and apps utilise its wares. “We have spent the last year building out the enterprise readiness of our product and offering [features] like security certifications and enterprise features to be ready to take on these customers,” adds Skantze.

Meanwhile, during the last year, the Funnel team has grown from 73 to 140, and the company signed new office space for a total of 400 people across Stockholm and Boston, ready for further expansion.

Categories: Business News

SpinLaunch spins up a $35M round to continue building its space catapult

13 hours 17 min ago

SpinLaunch, a company that aims to turn the launch industry on its head with a wild new concept for getting to orbit, has raised a $35M round B to continue its quest. The team has yet to demonstrate their kinetic launch system, but this year will be the year that changes, they claim.

TechCrunch first reported on SpinLaunch’s ambitious plans in 2018, when the company raised its previous $35 million, which combined with $10M it raised prior to that and today’s round comes to a total of $80M. With that kind of money you might actually be able to build a space catapult.

Stealth space catapult startup SpinLaunch is raising $30M

The basic idea behind SpinLaunch’s approach is to get a craft out of the atmosphere using a “rotational acceleration method” that brings a craft to escape velocity without any rockets. While the company has been extremely tight-lipped about the details, one imagines a sort of giant rail gun curled into a spiral, from which payloads will emerge into the atmosphere at several thousand miles per hour — weather be damned.

Naturally there is no shortage of objections to this method, the most obvious of which is that going from an evacuated tube into the atmosphere at those speeds might be like firing the payload into a brick wall. It’s doubtful that SpinLaunch would have proceeded this far if it did not have a mitigation for this (such as the needle-like appearance of the concept craft) and other potential problems, but the secretive company has revealed little.

The time for broader publicity may soon be at hand, however: the funds will be used to build out its new headquarter and R&D facility in Long Beach, but also to complete its flight test facility at Spaceport America in New Mexico.

“Later this year, we aim to change the history of space launch with the completion of our first flight test mass accelerator at Spaceport America,” said founder and CEO Jonathan Yaney in a press release announcing the funding.

Lowering the cost of launch has been the focus of some of the most successful space startups out there, and SpinLaunch aims to leapfrog their cost savings by offering orbital access for under $500,000. First commercial launch is targeted for 2022, assuming the upcoming tests go well.

The funding round was led by previous investors Airbus Ventures, GV, and KPCB, as well as Catapult Ventures, Lauder Partners, John Doerr and Byers Family.

The four corners of the new space economy

Categories: Business News

Copilot is a subscription personal finance tracker aiming to kill Mint

14 hours 31 min ago

When Intuit acquired Mint more than a decade ago, mobile was in a different place — as were tech-enabled financial services. There hasn’t been much progress for the personal finance tracker app category in the meantime. Mint has stumbled along with integration issues and tiresome data misclassifications. For many, the best alternative has been firing up a spreadsheet.

Copilot is a new personal finance-tracking app from a former Googler that seems like it could garner a following based on its slick design and ease of use. The subscription iOS app lets you load your financial data, create custom categories for transactions and set budgets. It has been invitation-only for the past several months, but is launching publicly today.

Founder Andrés Ugarte told TechCrunch that he started the effort after eight years at Google — most recently inside its Area 120 experimental products division — because of slow progress in the personal finance space since Mint’s acquisition.

“I’ve been trying to use personal finance apps for the last eight years, and I eventually ended up giving up on them,” Ugarte says. “I was willing to make them work, and create my own categories and fix the data so that stuff was all categorized correctly. But I was always disappointed because the apps never felt smart because they would make the same mistakes again.”

I spent a few hours poking around Copilot over the past couple of days and I like what I’ve seen. The design is friendlier than other options, but its major strengths are that you can easily re-categorize a transaction that didn’t automatically fall in the bucket that you wanted it to, mark internal transfers between accounts and exclude one-off purchases from your tracked budget. Other apps have also allowed these functionalities, but Copilot lets you denote whether you want every transaction with a particular vendor to route to a certain category or bypass your budget entirely, so it actually learns from your activity.

In some ways, the killer feature of Copilot is just how great Plaid is. The app relies heavily on the Visa-acquired financial services API startup, and I can see why the startup was so successful. The integration’s intuitiveness alongside Copilot’s already smooth on-boarding process gives users early indication for the app’s thoughtful design.

Visa is acquiring Plaid for $5.3 billion, 2x its final private valuation

Copilot has its limitations, mainly in that the team is just two people right now, so those holding out for desktop or Android support might have to wait a bit. Some may be turned off by the app’s $2.99 monthly subscription price, though there are more than a few reasons to avoid free apps that have access to all of your financial info. Copilot maintains that users’ financial info will never be sold to or shared with third parties.

Ugarte has largely been self-funding the effort by selling off his Google shares, but the team just locked down a $250,000 angel round and is searching for more funding.

Categories: Business News

Visa’s Plaid acquisition shows a shifting financial services landscape

15 hours 13 min ago

When Visa bought Plaid this week for $5.3 billion, a figure that was twice its private valuation, it was a clear signal that traditional financial services companies are looking for ways to modernize their approach to business.

With Plaid, Visa picks up a modern set of developer APIs that work behind the scenes to facilitate the movement of money. Those APIs should help Visa create more streamlined experiences (both at home and inside other companies’ offerings), build on its existing strengths and allow it to do more than it could have before, alone.

But don’t take our word for it. To get under the hood of the Visa-Plaid deal and understand it from a number of perspectives, TechCrunch got in touch with analysts focused on the space and investors who had put money into the erstwhile startup.

Categories: Business News

Marijuana delivery giant Eaze may go up in smoke

16 hours 52 min ago

The first cannabis startup to raise big money in Silicon Valley is in danger of burning out. TechCrunch has learned that pot delivery middleman Eaze has seen unannounced layoffs, and its depleted cash reserves threaten its ability to make payroll or settle its AWS bill. Eaze was forced to raise a bridge round to keep the lights on as it prepares to attempt major pivot to ‘touching the plant’ by selling its own marijuana brands through its own depots.

TechCrunch spoke with nine sources with knowledge of Eaze’s struggles to piece together this report. If Eaze fails, it could highlight serious growing pains amid the ‘green rush’ of startups into the marijuana business.

Eaze, the startup backed by some $166 million in funding that once positioned itself as the “Uber of pot” — a marketplace selling pot and other cannabis products from dispensaries and delivering it to customers — has recently closed a $15 million bridge round, according to multiple source. The funding was meant to keep the lights on as Eaze struggles to raise its next round of funding amid problems with making decent margins on its current business model, lawsuits, payment processing issues, and internal disorganization.

 

An Eaze spokesperson confirmed that the company is low on cash. Sources tell us that the company, which laid off some 30 people last summer, is preparing another round of cuts in the meantime. The spokesperson refused to discuss personnel issues but noted that there have been layoffs at many late stage startups as investors want to see companies cut costs and become more efficient.

From what we understand, Eaze is currently trying to raise a $35 million Series D round according to its pitch deck. The $15 million bridge round came from unnamed current investors. (Previous backers of the company include 500 Startups, DCM Ventures, Slow Ventures, Great Oaks, FJ Labs, the Winklevoss brothers, and a number of others.) Originally, Eaze had tried to raise a $50 million Series D, but the investor that was looking at the deal, Athos Capital, is said to have walked away at the eleventh hour.

Eaze is going into the fundraising with an enterprise value of $388 million, according to company documents reviewed by TechCrunch. It’s not clear what valuation it’s aiming for in the next round.

An Eaze spokesperson declined to discuss fundraising efforts but told TechCrunch, “The company is going through a very important transition right now, moving to becoming a plant-touching company through acquisitions of former retail partners that will hopefully allow us to more efficiently run the business and continue to provide good service to customers.

Desperate to grow margins

The news comes as Eaze is hoping to pull off a “verticalization” pivot, moving beyond online storefront and delivery of third-party products (rolled joints, flower, vaping products and edibles) and into sourcing, branding and dispensing the product directly. Instead of just moving other company’s marijuana brands between third-party dispensaries and customers, it wants to sell its own in-house brands through its own delivery depots to earn a higher margin. With a number of other cannabis companies struggling, the hope is that it will be able to acquire brands in areas like marijuana flower, pre-rolled joints, vaporizer cartridges, or edibles at low prices.

An Eaze spokesperson confirmed that the company plans to announce the pivot in the coming days, telling TechCrunch that it’s “a pretty significant change from provider of services to operating in that fashion but also operating a depot directly ourselves.”

The startup is already making moves in this direction, and is in the process of acquiring some of the assets of a bankrupt cannabis business out of Canada called Dionymed — which had initially been a partner of Eaze’s, then became a competitor, and then sued it over payment disputes, before finally selling part of its business. These assets are said to include Oakland dispensary Hometown Heart, which it acquired in an all-share transaction (“Eaze effectively bought the lawsuit,” is how one source described the sale). This will become Eaze’s first owned delivery depot.

In a recent presentation deck that Eaze has been using when pitching to investors — which has been obtained by TechCrunch — the company describes itself as the largest direct-to-consumer cannabis retailer in California. It has completed more than 5 million deliveries, served 600,000 customers and tallied up an average transaction value of $85. 

To date, Eaze has only expanded to one other state beyond California, Oregon. Its aim is to add five more states this year, and another three in 2021. But the company appears to have expected more states to legalize recreational marijuana sooner, which would have provided geographic expansion. Eaze seems to have overextended itself too early in hopes of capturing market share as soon as it became available.

An employee at the company tells us that on a good day Eaze can bring in between $800,000 and $1 million in net revenue, which sounds great, except that this is total merchandise value, before any cuts to suppliers and others are made. Eaze makes only a fraction of that amount, one reason why it’s now looking to verticatlize into more of a primary role in the ecosystem. And that’s before considering all of the costs associated with running the business. 

Eaze is suffering from a problem rampant in the marijuana industry: a lack of working capital. Since banks often won’t issue working capital loans to weed-related business, deliverers like Eaze can experience delays in paying back vendors. Another source says late payments have pushed some brands to stop selling through Eaze.

Another drain on its finances have been its marketing efforts. A source said out-of-home ads (billboards and the like) allegedly were a significant expense at one point. It has to compete with other pot purchasing options like visiting retail stores in person, using dispensaries’ in-house delivery services, or buying via startups like Meadow that act as aggregated online points of sale for multiple dispensaries.

Indeed, Eaze claims that its pivot into verticalization will bring it $204 million in revenues on gross transactions of $300 million. It notes in the presentation that it makes $9.04 on an average sale of $85, which will go up to $18.31 if it successfully brings in ‘private label’ products and has more depot control.

Selling weed isn’t eazy

The poor margins are only one of the problems with Eaze’s current business model, which the company admits in its presentation have led to an inconsistent customer experience and poor customer affinity with its brand — especially in the face of competition from a number of other delivery businesses.  

Playing on the on-demand, delivery-of-everything theme, it connected with two customer bases. First, existing cannabis consumers already using some form of delivery service for their supply; and a newer, more mainstream audience with disposable income that had become more interested in cannabis-related products but might feel less comfortable walking into a dispensary, or buying from a black market dealer.

It is not the only startup that has been chasing that audience. Other competitors in the wider market for cannabis discovery, distribution and sales include Weedmaps, Puffy, Blackbird, Chill (a brand from Dionymed that it founded after ending its earlier relationship with Eaze), and Meadow, with the wider industry estimated to be worth some $11.9 billion in 2018 and projected to grow to $63 billion by 2025.

Eaze was founded on the premise that the gradual decriminalisation of pot — first making it legal to buy for medicinal use, and gradually for recreational use — would spread across the US and make the consumption of cannabis-related products much more ubiquitous, presenting a big opportunity for Eaze and other startups like it. 

It found a willing audience among consumers, but also tech workers in the Bay Area, a tight market for recruitment. 

“I was excited for the opportunity to join the cannabis industry,” one source said. “It has for the most part has gotten a bad rap, and I saw Eaze’s mission as a noble thing, and the team seemed like good people.”

Eaze CEO Ro Choy

That impression was not to last. The company, this employee was told when joining, had plenty of funding with more on the way. The newer funding never materialised, and as Eaze sought to figure out the best way forward, the company cycled through different ideas and leadership: former Yammer executive Keith McCarty, who cofounded the company with Roie Edery (both are now founders at another Cannabis startup, Wayv), left, and the CEO role was given to another ex-Yammer executive, Jim Patterson, who was then replaced by Ro Choy, who is the current CEO. 

“I personally lost trust in the ability to execute on some of the vision once I got there,” the ex-employee said. “I thought that on one hand a picture was painted that wasn’t the truth. As we got closer and as I’d been there longer and we had issues with funding, the story around why we were having issues kept changing.” Several sources familiar with its business performance and culture referred to Eaze as a “shitshow”.

No ‘Push For Kush’

The quick shifts in strategy were a recurring pattern that started well before the company got tight financial straits. 

One employee recalled an acquisition Eaze made several years ago of a startup called Push for Pizza. Founded by five young friends in Brooklyn, Push for Pizza had gone viral over a simple concept: you set up your favourite pizza order in the app, and when you want it, you pushed a single button to order it. (Does that sound silly? Don’t forget, this was also the era of Yo, which was either a low point for innovation, or a high point for cynicism when it came to average consumer intelligence… maybe both.)

Eaze’s idea, the employee said, was to take the basics of Push for Pizza and turn it into a weed app, Push for Kush. In it, customers could craft their favourite mix and, at the touch of a button, order it, lowering the procurement barrier even more.

The company was very excited about the deal and the prospect of the new app. They planned a big campaign to spread the word, and held an internal event to excite staff about the new app and business line. 

“They had even made a movie of some kind that they showed us, featuring a caricature of Jim” — the CEO at a the time — “hanging out of the sunroof of a limo.” (I’ve been able to find the opening segment of this video online, and the Twitter and Instagram accounts that had been created for Push for Kush, but no more than that.)

Then just one week later, the whole plan was scrapped, and the founders of Push for Pizza fired. “It was just brushed under the carpet,” the former employee said. “No one could get anything out of management about what had happened.”

Something had happened, though: the company had been taking payments by card when it made the acquisition, but the process was never stable and by then it had recently gone back to the cash-only model. Push for Kush by cash was less appealing. “They didn’t think it would work,” the person said, adding that this was the normal course of business at the startup. “Big initiatives would just die in favor of pushing out whatever new thing was on the product team’s radar.” 

Eaze’s spokesperson confirmed that “we did acquire Push For Pizza . . but ultimately didn’t choose to pursue [launching Push For Kush].”

Payments were a recurring issue for the startup. Eaze started out taking payments only in cash — but as the business grew, that became increasingly problematic. The company found itself kicked off the credit card networks and was stuck with a less traceable, more open to error (and theft) cash-only model at a time when one employee estimated it was bringing in between $800,000 and $1 million per day in sales. 

Eventually, it moved to cards, but not smoothly: Visa specifically did not want Eaze on its platform. Eaze found a workaround, employees say, but it was never above board, which became the subject of the lawsuit between Eaze and Dionymed. Currently the company appear to only take payments via debit cards, ACH transfer, and cash, not credit card.

Another incident sheds light on how the company viewed and handled security issues. 

Can Eaze rise from the ashes?

At one point, employees allegedly discovered that Eaze was essentially storing all of its customer data — including users’ signatures and other personal information — in an Azure bucket that was not secured, meaning that if anyone was nosing around, it could be easily discovered and exploited.

The vulnerability was brought to the company’s attention. It was something that was up to product to fix, but the job was pushed down the list. It ultimately took seven months to patch this up. “I just kept seeing things with all these huge holes in them, just not ready for prime time,” one ex-employee said of the state of products. “No one was listening to engineers, and no one seemed to be looking for viable products.” Eaze’s spokesperson confirms a vulnerability was discovered but claims it was promptly resolved.

Today, the issue is a more pressing financial one: the company is running out of money. Employees have been told the company may not make its next payroll, and AWS will shut down its servers in two days if it doesn’t pay up. 

Eaze’s spokesperson tried to remain optimistic while admitting the dire situation the company faces. “Eaze is going to continue doing everything we can to support customers and the overall legal cannabis industry. We’re excited about the future and acknowledge the challenges that the entire community is facing.”

As medicinal and recreational marijuana access became legal in some states in the latter 2010s, entrepreneurs and investors flocked to the market. They saw an opportunity to capitalize on the end of a major prohibition — a once in a lifetime event. But high government taxes, enduring black markets, intense competition, and a lack of financial infrastructure willing to deal with any legal haziness have caused major setbacks.

While the pot business might sound chill, operations like Eaze depend on coordinating high-stress logistics with thin margins and little room for error. Plenty of food delivery startups from Sprig to Munchery went under after running into similar struggles, and at least banks and payment processors would work with them. With the odds stacked against it, Eaze has a tough road ahead.

Categories: Business News

VCs are just tired

17 hours 13 min ago

I was in SF last week and met with more than a dozen VCs over the course of two days. This was post the holidays, post their visits to the ski chalets in Tahoe and the island beaches, and in the smack dab of one of the most important fundraise periods of the year — the mid-to-late January to April stretch when all the backlog of startups from Q4 initiate their fundraises for the new year.

When is the right time to pitch VCs for funding?

And the one constant refrain I heard over and over again across these conversations was just this: VCs are tired.

The reasons were similar if not perfectly overlapping. The biggest driver was the sheer flood of venture dollars targeting too few deals in the Valley these days. Consumer investing has become passé as exits disappear and the mobile wave crests (last year was the first year B2B investing overtook consumer investing in modern memory), forcing everyone to chase the same set of SaaS companies.

6 VCs explain why seed investors now favor enterprise startups

VCs described to me how the top deals start and close their fundraises in 48-72 hours. Several VCs groused that dozens of firms now descend like hawks on the unwitting but fortunate target startup, angling for a term sheet and willing to give up valuation and preferences left and right for any chance at the cap table. Earlier investors are just as desperate to own that equity, and no longer play any sort of honest broker role that they might have in the past.

Plus, the FOMO of the moment is more acute than ever — a VC at the end of the day might have already seen a dozen companies, but gets a late night intro to one last company — perhaps the company that could make or break their career. And so they will take that one last meeting, and then one more last meeting, hoping to find some meaningful edge against the competition.

And so VCs are running ragged around South Park, and increasingly, flying around the world scouring for any alpha wherever they can find it. Increasingly, it feels, they aren’t finding it though.

Firms are doing what they can. They are staffing up, trying to hire more raw talent in the hopes of finding that last undiscovered company. They scour their own portfolios and probe their founders, trying to find a tip to a deal that their competitor may have missed. They host dinner after dinner (sometimes multiple in one night — as I sometimes witness when I get an invitation to all of them, as if I can be in more than one place at the same time), again, hoping to find some bit of magic.

Ironically, the “tired” line was something I used to hear from seed investors, who constantly had to churn through dozens of under-hearted startups to find the gold. Now, I’ve heard this language more and more from later-stage VCs, where the Excel spreadsheet drives the valuation more than a relationship with a founder — and everyone can read the gridiron of SaaS metrics.

All of this in some ways is good for startup founders (and their earliest investors) — higher markups are going to result in more resources with less dilution, and that’s always nice. The challenge is that relationships are being forged in the most intense of sale processes, and that means that founders may only have a short period of time to work with a partner before committing a board seat to that individual. Personalities are hard to judge in such a crucible.

As are the numbers. We’ve chatted on Equity a bit about reneged term sheets, but it’s a pattern that I hear whispered about more and more. Less due diligence is happening before the term sheet is signed (again, to beat out the rabid competition), and there is now more buyer’s remorse from VCs (and very occasionally founders) that can lead to a botched round along the way.

Lack of bandwidth, hyper-velocity, a pittance of sleep — all of these are intensifying the sensitivity of VC returns. Email a VC an hour before or after and it may well change the result of a fundraise. VCs once had a reputation for plodding and slow deliberation. That old normal is definitely dead right now, and in its place is a new, modern VC who is going to determine millions of dollars in a few minutes on a jet fuel of caffeine and ambition.

It’s the best and worst of times, and I can’t help but wonder what the results of the 2019 and 2020 vintage years are going to look like eight-10 years from now.

Categories: Business News

SiteMinder raises $70M at $750M valuation after cresting $70M ARR in 2019

17 hours 58 min ago

Today SiteMinder, an Australian software company focused on the hotel industry, announced a $70 million (USD) round that values the company at $750 million. That’s about $1.08 billion in Australian dollars, making the firm a Down Under Unicorn, even if it’s a bit shy here in America.

According to SiteMinder, the round was “led by equity funds managed by BlackRock.” The company has previously raised capital from TCV and Bailador.

TechCrunch discussed SiteMinder earlier this year as part of our running examination of companies that have reached certain annual recurring revenue (ARR) thresholds. At that time, we noted that the firm’s revenue was at AU$100 million ARR, while it was a bit light of the level in American dollars.

As we understand the company’s new valuation in both countries’ currencies, it is possible to calculate the company’s current ARR multiple. It’s about 11x. That price is similar to what public SaaS companies command in today’s market, according to Bessemer’s cloud index.

Growth

SiteMinder announced some time ago that it had surpassed the AU$100 million ARR mark in 2019. Software companies — SiteMinder appears to also generate service-oriented revenues from activities like website design — that reach similar scale tend to slow down in percentage growth terms.

To understand the company’s approach to growth, TechCrunch asked SiteMinder if its new capital would allow it to maintain its current pace of ARR growth. The firm had cited “accelerated go-to-market strategies” as a possible use for its new funds, helping frame the question.

According to SiteMinder CEO Sankar Narayan, the answer is “Yes, absolutely.” Narayan went on to say that the company has “the widest global footprint and the largest multilingual capability in our category, giving us pole position as technology adoption accelerates across the hotel industry.” Narayan also cited planned hiring and expanded distribution work in Europe and Asia as giving his company “even greater opportunities for growth.”

SiteMinder operates globally, providing it with a closer presence to some customers (80% of the firm’s revenue is international, it says). That distribution, however, raises a question. Quickly growing companies often struggled to hold their culture together when they are in a single office. SiteMinder operates in over a dozen countries, likely compounding the issue.

Narayan told TechCrunch that SiteMinder is “no stranger to the challenges that come with being a global business.” To combat cultural drift, the CEO says that he visits an overseas office every month, and that his company recently introduced “an all-staff shadow equity plan” to let everyone profit from the company’s progress.

With new capital, and presumably more staff and offices to come, it will be interesting to see what new things the company’s cultural integrity requires.

Regardless, SiteMinder is now the inaugural member of the AU$100 million ARR club, and is a local-currency unicorn to boot. And as it’s harder to reach that valuation outside of Silicon Valley than inside of it, neither of those honorifics should be viewed as dismissive; they’re compliments.

Categories: Business News

Hyundai and Kia put over $110M into UK electric delivery vehicles startup Arrival

19 hours 1 min ago

Forget the consumer market for electric vehicles. It turns out delivery vehicles could be the “Trojan horse” for electric to really take off.

Korean auto giants Hyundai and Kia put more than $110 million in U.K. startup Arrival, which emerged from relative stealth today. The investment immediately makes Arrival one of Britain’s most valuable startups, valuing it at €3 billion ($3.4 billion), a company spokesperson said. According to the latest research from CB insights, only five other U.K. startups are worth more than this.

Although a five-year-old London-based company that has about 800 employees across five countries, including Germany, the United States and Russia, Arrival has been cagey about its activity until now.

Their idea is to make electric vehicles at similar costs to traditional fossil fuel vehicles but by drastically cutting costs by using “microfactories” close to major cities for manufacturing.

Its modular “skateboard” platform will allow a range of models to be built on one system and its prototypes are already participating in trials by global delivery companies such as DHL, UPS and Royal Mail.

In a statement, Youngcho Chi, Hyundai’s president and chief innovation officer said: “This investment is part of an open innovation strategy pursued by Hyundai and Kia”

Hyundai is understood to be investing $35 billion in autonomous driving and electric cars.

Last year Hyundai announced a $35 billion commitment to develop self-driving technology and electric vehicles. As part of that, it wants to release 23 types of electric vehicles by 2025. Last week, it unveiled a flying taxi concept with Uber at the CES tech conference in Las Vegas.

Categories: Business News

Hyundai and Kia put over $110M into UK electric delivery vehicles startup Arrival

19 hours 1 min ago

Forget the consumer market for electric vehicles. It turns out delivery vehicles could be the “Trojan horse” for electric to really take off.

Korean auto giants Hyundai and Kia put more than $110 million in U.K. startup Arrival, which emerged from relative stealth today. The investment immediately makes Arrival one of Britain’s most valuable startups, valuing it at €3 billion ($3.4 billion), a company spokesperson said. According to the latest research from CB insights, only five other U.K. startups are worth more than this.

Although a five-year-old London-based company that has about 800 employees across five countries, including Germany, the United States and Russia, Arrival has been cagey about its activity until now.

Their idea is to make electric vehicles at similar costs to traditional fossil fuel vehicles but by drastically cutting costs by using “microfactories” close to major cities for manufacturing.

Its modular “skateboard” platform will allow a range of models to be built on one system and its prototypes are already participating in trials by global delivery companies such as DHL, UPS and Royal Mail.

In a statement, Youngcho Chi, Hyundai’s president and chief innovation officer said: “This investment is part of an open innovation strategy pursued by Hyundai and Kia”

Hyundai is understood to be investing $35 billion in autonomous driving and electric cars.

Last year Hyundai announced a $35 billion commitment to develop self-driving technology and electric vehicles. As part of that, it wants to release 23 types of electric vehicles by 2025. Last week, it unveiled a flying taxi concept with Uber at the CES tech conference in Las Vegas.

Categories: Business News

Matera raises $11.2 million to let you handle residential property management yourself

19 hours 13 min ago

Matera, the French startup formerly known as illiCopro, is raising an $11.2 million funding round (€10 million). The company has been building a SaaS platform to give you all the tools you need to handle property management for your residential building.

Index Ventures is leading the round, with existing investor Samaipata also participating. Business angels, such as Bertrand Jelensperger, Paulin Dementhon and Marc-David Choukroun are also participating.

In France, there are two ways to handle property management of residential buildings. Co-owners of the hallways, elevator and common space of the building can either hire a company to do it and handle all the pesky tasks, or you can do it yourself.

Matera wants to target the second category — co-owners who want to manage their building themselves. Other startups, such as Bellman, have chosen a different approach. Matera has built a web-based platform to view information, communicate with other co-owners and make sure everything is up-to-date.

Everybody has their own account and can access the platform. Co-owners meet regularly to handle outstanding issues. Matera centralizes all topics, helps you write a report and checks that it complies with legal requirements.

Matera then handles everything that involves money. You can collect money from co-owners every month and check how your money is spent. The platform tries to do the heavy lifting when it comes to accounting.

Finally, Matera helps you manage contracts with partners — elevator maintenance, heating maintenance, cleaning company, water, electricity, insurance, taking care of the garden, etc. You get an address book for your partners, and the company is working on a way to help you switch to another partner from the platform.

If there’s something you don’t feel comfortable doing yourself, Matera can help you work with legal, accounting, insurance and construction experts.

So far, Matera has managed to attract 1,000 residential buildings representing 25,000 users. The company plans to expand to other European countries in the future, starting with Belgium, Spain, Italy and Germany. With today’s funding round, the company plans to hire 100 persons.

Categories: Business News

Loliware’s kelp-based plastic alternatives snag $6M seed round from eco-conscious investors

19 hours 33 min ago

The last few years have seen many cities ban plastic bags, plastic straws and other common forms of waste, giving environmentally conscious alternatives a huge boost — among them Loliware, purveyor of fine disposable goods created from kelp. Huge demand and smart sourcing has attracted a big first funding round.

I covered Loliware early on when it was one of the first companies to be invested in by the Ocean Solutions Accelerator, a program started in 2017 by the nonprofit Sustainable Ocean Alliance. Founder Chelsea “Sea” Briganti told me about the new funding on the SOA’s strange yet quite successful “Accelerator at Sea” program late last year.

In the Accelerator over the Sea

The company makes straws primarily, with other products planned, out of kelp matter. Kelp, if you’re not familiar, is a common type of aquatic algae (also called seaweed) that can grow quite large and is known for its robustness. It also grows in vast, vast quantities in many coastal locations, creating “kelp forests” that sustain entire ecosystems. Intelligent stewardship of these fast-growing kelp stocks could make them a significantly better source than corn or paper, which are currently used to create most biodegradable straws.

A proprietary process turns the kelp into straws that feel plastic-like but degrade simply (and not in your hot drink — it can stand considerably more exposure than corn and paper-based straws). Naturally the taste, desirable in some circumstances but not when drinking a seltzer, is also removed.

It took a lot of R&D and fine-tuning, Briganti told me:

“None of this has ever been done before. We led all development from material technology to new-to-world engineering of machinery and manufacturing practices. This way we ensure all aspects of the product’s development are truly scalable.”

They’ve gone through more than a thousand prototypes and are continuing to iterate as advances make possible things like higher flexibility or different shapes.

“Ultimately our material is a massive departure from the paradigms with which other companies are approaching the development of biodegradable materials,” she said. “They start with a problematic, last-forever, fossil fuel-derived paradigm and try to make it not so bad — this is step-change development and too slow and frumpy to truly make an impact.”

Of course it doesn’t matter how good your process is if no one is buying it, a fact that plagues many ethics-first operations, but in fact demand has grown so fast that Loliware’s biggest challenge has been scaling to meet it. The company has gone from a few million to a hundred million in recent years to a projected billion straws shipping in 2020.

“It takes us about 12 months to get to full automation [from the lab],” she said. “Once we get to full automation, we license the tech to a strategic plastic or paper manufacturer. Meaning, we do not manufacture billions of straws, or anything, in-house.”

It makes sense, of course, just as contracting out your PCB or plastic mold or what have you. Briganti wanted to have global impact, and that requires taking advantage of global infrastructure that’s already there.

Lastly, the consideration of a sustainable ecosystem was always important to Briganti, as the whole company is founded on the idea of reducing waste and using fundamentally ethical processes.

“Our products utilize a super-sustainable supply of seaweed, a supply that is overseen and regulated by local governments,” Briganti said. “In 2020, Loliware will launch the first-ever Algae Sustainability Council (ASC), which allows us to be at the helm of the design of these new global seaweed supply chain systems as well as establishing the oversight, ensuring sustainable practices and equitability. We are also pioneering what we have coined the ‘Zero Waste Circular Extraction Methodology,’ which will be a new paradigm in seaweed processing, utilizing every component of the biomass as it suggests.”

The $5.9 million “super seed” round has many investors, including several who were on board the ship in Alaska for the Accelerator at Sea this past October (as SOA Seabird Ventures). The CEO of Blue Bottle Coffee has invested, as have New York Ventures, Magic Hour, For Good VC, Hatzimemos/Libby, Geekdom Fund, HUmanCo VC, CityRock and Closed Loop Partners.

The money will be used for scaling and further R&D; Loliware plans to launch several new straw types (like a bent straw for juice boxes), a cup and a new utensil. 2020 may be the year you start seeing the company’s straws in your favorite coffee shop rather than a few early adopters here and there. You can keep track of where they can be found here at the company’s website.

Categories: Business News

Are OYO’s deep cuts a reality check for unicorns?

21 hours 1 min ago

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

After a short pause, we’re back on the topic of unicorn layoffs. While it’s cheery that a number of companies are chugging ahead with ARR growth powered by efficient spend, not every company has taken a similar approach. As we’ve seen in the last six months, many companies that raised big checks wound up spending too much and are now reducing headcount and other costs.

Today I want to chew over the latest news from OYO, which is beating a retreat to reduce losses. And, I’m following recent notes from venture capitalist Bill Gurley about how much money a company could raise before an IPO without engendering market speculation that it’s a money bonfire, torching cash to cast itself in good light.

Retrenchment

OYO, the SoftBank-backed budget hotel startup, is releasing staff, reducing capacity and pulling out of some locations altogether. The firm, famous for its hyper-growth and aggressive capital raises, will cut 1,450 staff, including 1,000 in its home country of India. In fact, the company is leaving several hundred cities in India and has cut tens of thousands of rooms from its rolls, according to reports.

Categories: Business News

WorkBoard triples again in 2019, raises $30M from a16z to celebrate

21 hours 59 min ago

WorkBoard, a SaaS startup that provides goal setting and management software to other companies, announced today that it has closed a $30 million Series C. The new capital comes less than a year after the startup raised a $23 million Series B. WorkBoard has raised $66.6 million to date, according to Crunchbase.

Andreessen Horowitz’s David Ulevitch led the round, which saw participation from Microsoft’s M12, GGV and Workday Ventures, each of which had put money into the company in preceding rounds. 

Why did WorkBoard announce a Series C just 10 months after its Series B? That’s what we wanted to find out. As it turns out, the answer is growth. 

3x, twice

The company is growing quickly, making it an attractive investment for the venture class. However, it’s useless to explain its growth in numerical terms if we don’t understand why it is growing as quickly as it is. 

WorkBoard provides software and services to other companies relating to how they plan and track their progress against their plans. More simply, WorkBoard helps other companies set and leverage OKRs, an acronym that stands for “objectives and key results.”

If you’d like a longer-winded explanation of how the concept works, my notes on the company’s Series B are the jam. Briefly, OKRs are a planning framework that help companies set their course intelligently, and execute across smaller tasks that add up to the direction they want to go. You complete “key results” over a given period of time, which roll up into your “objectives.”

It’s a pretty okay way to set up a company’s planning system. OKRs are popular in Silicon Valley, where Google popularized the method. It was not clear, at least to your humble servant, how far the idea had spread when WorkBoard raised its Series B last year. What if the startup raised a bunch of money after selling into fertile ground (startups aware of OKRs), but struggled when it went after other, non-tech companies?

Whoops. After boosting its annual recurring revenue 3.5x in 2018, WorkBoard tripled its ARR again in 2019, according to CEO Deidre Paknad. Thinking out loud, WorkBoard raised its Series A in December of 2017. It probably had $1 million to $3 million ARR at the time, a wide but regular-ish range of ARR for a startup raising its first institutional (priced) round. Given its 3.5x and 3x results in 2018 and 2019, starting right after that Series A investment, the company’s ARR is now likely over $20 million, and probably closer to $25 million. 

So if it can double this year, the startup may begin to approach IPO scale in 2021, provided that its growth can keep up.

On that point, I asked Paknad about her market, especially in regards to how much work she and her employees had to do in terms of market education; did they have to bring the gospel of OKRs to companies, sell them on the idea and then sell its software? Or had the need to teach about OKRs themselves gone down?

She indicated that instead of needing to pull the market toward her firm, the trendlines are better than neutral. According to the CEO, it was harder to sell OKR software “five years ago” because “the need to educate” a half decade ago “was intense.” Companies were stuck on their love of PowerPoint and similar, dated tooling. However, that need for “education has declined rapidly” Paknad said. 

She says that in her company’s experience there is “ever broader recognition that if you want to drive smart growth — not growth at any cost but smart growth,” companies will need to have “everybody in the organization aligned, and you need to be able to see what they [are] aligned on.” 

OKRs are a natural and well-explored way to attempt to do so.

That market movement has helped the company have very efficient operations, in terms of the usual raft of SaaS metrics that we understand. Paknad told TechCrunch a few things that stuck out:

  • WorkBoard has a “hyper-efficient” enterprise sales cycle, closing new customers in “under 60 days” that are “several hundred thousand dollars in average deal size.”
  • That its “average deal size has more than doubled since the beginning” of 2019.
  • For every $1 that WorkBoard spends on sales and marketing costs, the company generates “about $2 in new ARR.” (That’s way better than the $0.86 in average ARR generated by $1 in new sales and marketing spend for SaaS companies more broadly.)
  • And, it didn’t need to raise this round, with Paknad telling TechCrunch that she hasn’t “spent the 23 [million dollars] from March yet,” but that it decided to add capital because that “opportunity really is unfolding in the way we would like,” and that her firm has an “opportunity to have really definitive enterprise leadership.”
The investor perspective

TechCrunch got Ulevitch, WorkBoard’s newest lead investor, on the phone. Ulevitch called Paknad “a force of nature” who “really connects to customers.” That was all well and good, but more fun were his notes on how the round came together.

Paknad told Ulevitch after WorkBoard’s March 2019 Series B that her company would triple in the year. When it did, Ulevitch said he didn’t want to wait any longer to put money into the firm. And the investment came together quickly, with the Andreessen Horowitz investor noting a roughly one-month time frame for the deal’s life cycle.

This round isn’t hard to figure out. Fast-growing, efficient SaaS companies make investors dream of the next Slack. Let’s see if WorkBoard can double or triple in 2020. If so, we’ll be chatting with Paknad about exits and IPOs, not middle-sized, middle-stage rounds.

Categories: Business News

Epsagon scores $16M Series A to monitor modern development environments

2020, January 16 - 11:34pm

Epsagon, an Israeli startup that wants to help monitor modern development environments like serverless and containers, announced a $16 million Series A today.

U.S. Venture Partners (USVP), a new investor, led the round. Previous investors Lightspeed Venture Partners and StageOne Ventures also participated. Today’s investment brings the total raised to $20 million, according to the company.

CEO and co-founder Nitzan Shapira says that the company has been expanding its product offerings in the last year to cover not just its serverless roots, but also provide deeper insights into a number of forms of modern development.

“So we spoke around May when we launched our platform for microservices in the cloud products, and that includes containers, serverless and really any kind of workload to build microservices apps. Since then we have had a few significant announcements,” Shapira told TechCrunch.

For starters, the company announced support for tracing and metrics for Kubernetes workloads, including native Kubernetes, along with managed Kubernetes services like AWS EKS and Google GKE. “A few months ago, we announced our Kubernetes integration. So, if you’re running any Kubernetes workload, you can integrate with Epsagon in one click, and from there you get all the metrics out of the box, then you can set up a tracing in a matter of minutes. So that opens up a very big number of use cases for us,” he said.

The company also announced support for AWS AppSync, a no-code programming tool on the Amazon cloud platform. “We are the only provider today to introduce tracing for AppSync and that’s [an area] where people really struggle with the monitoring and troubleshooting of it,” he said.

The company hopes to use the money from today’s investment to expand the product offering further with support for Microsoft Azure and Google Cloud Platform in the coming year. He also wants to expand the automation of some tasks that have to be manually configured today.

“Our intention is to make the product as automated as possible, so the user will get an amazing experience in a matter of minutes, including advanced monitoring, identifying different problems and troubleshooting,” he said

Shapira says the company has around 25 employees today, and plans to double headcount in the next year.

Serverless monitoring startup Epsagon expands to cover broader microservices

Categories: Business News

Allen Institute for AI’s Incubator expands with $10M fund from high-profile VCs

2020, January 16 - 11:31pm

The Allen Institute for AI (AI2) started its incubator two years ago, helping launch companies like Xnor.ai, Blue Canoe and WellSaidLabs. Their success has attracted funding from not just local Seattle VC outfit Madrona, but Sequoia, Kleiner Perkins and Two Sigma Ventures as well, resulting in a new $10 million fund that should help keep the lights on.

The AI2 Incubator, led by Jacob Colker since its inception in 2017, has focused on launching a handful of companies every year that in some way leverage a serious AI advantage. Blue Canoe, for instance, does natural language processing with a focus on accent modification; Xnor.ai is working on ultra-low-power implementations of machine learning algorithms, and was just acquired yesterday by Apple for a reported $200 million.

Apple buys edge-based AI startup Xnor.ai for a reported $200M

“We think the next generation of so-called AI-first companies are going to have to graduate into building long-term, successful businesses that start with an AI edge,” said the program’s new managing director, Bryan Hale. “And the people who can help do this are the ones who have helped build iconic companies.”

Hence the involvement of household names (in the startup community, anyhow) Sequoia and Kleiner Perkins, and Two Sigma Ventures from New York. Seattle-based Madrona also recently invested in AI2 company Lexion. It’s a pretty solid crowd to be running with, and as Colker pointed out, “they don’t often come together.”

“But also, they looked up into the northwest and said, what’s going on up there?” added Hale. Indeed, Seattle has over the last few years blossomed into a haven for AI research, with many major tech companies establishing or expanding satellite offices here at least partly concerned with the topic: Apple, Google, Nvidia and Facebook among others, and, of course, local standbys Amazon, Microsoft and Adobe.

Practically speaking, the new fund will let the incubator continue on its current path, but with a bit more runway and potentially bigger investments in the startups it works with.

A Hippocratic Oath for artificial intelligence practitioners

“We just have a lot more resources now to help our companies succeed,” said Colker. “Previously we were able to write up to about a $250,000 check, but now we can write up to maybe $800,000 per company. That means they have a lot more time to build out their team, aggregate training data, test their models, all these points that are important for a team to raise a bigger, better VC funding round.”

AI2 prides itself on its large staff of PhDs and open research strategy, publishing pretty much everything publicly in order to spur the field onwards. Access to these big brains, many of which have bred successful startups of their own, is no less a draw than the possibility of more general business mentorship and funding.

Colker said the incubator will continue to produce three to five startups per year, each one taking “about 12-18 months, from whiteboard to venture funding.” AI, he pointed out, often needs more time than a consumer app or even enterprise play, since it’s as much research as it is development. But so far the model seems to work quite well.

“There are very few places in the world where an entrepreneur can come to take advantage of the brain power of a hundred PhDs and support staff. We’ve got a new research center with 70 desks, we’ve got plenty of space for those teams to grow,” he said. “We’re incredibly well-positioned to support the next wave of AI companies.”

Categories: Business News

Cyral announces $11M Series A to help protect data in cloud

2020, January 16 - 10:06pm

Cyral, an early-stage startup that helps protect data stored in cloud repositories, announced an $11 million Series A today. The company also revealed a previous undisclosed $4.1 million angel investment, making the total $15.1 million.

The Series A was led by Redpoint Ventures. A.Capital Ventures, Costanoa VC, Firebolt, SV Angel and Trifecta Capital also participated in on the round.

Cyral co-founder and CEO Manav Mital says the company’s product acts as a security layer on top of cloud data repositories — whether databases, data lakes, data warehouse or other data repository — helping identify issues like faulty configurations or anomalous activity.

Mital says that unlike most security data products of this ilk, Cyral doesn’t use an agent or watch points to try to detect signals that indicate something is happening to the data. Instead, he says that Cyral is a security layer attached directly to the data.

“The core innovation of Cyral is to put a layer of visibility attached right to the data endpoint, right to the interface where application services and users talk to the data endpoint, and in real time see the communication,” Mital explained.

As an example, he says that Cyral could detect that someone has suddenly started scanning rows of credit card data, or that someone was trying to connect to a database on an unencrypted connection. In each of these cases, Cyral would detect the problem, and depending on the configuration, send an alert to the customer’s security team to deal with the problem, or automatically shut down access to the database before informing the security team.

It’s still early days for Cyral, with 15 employees and a handful of early access customers. Mital says for this round he’s working on building a product to market that’s well-designed and easy to use.

He says that people get the problem he’s trying to solve. “We could walk into any company and they are all worried about this problem. So for us getting people interested has not been an issue. We just want to make sure we build an amazing product,” he said.

Categories: Business News

Mojo Vision’s AR contact lenses are very cool, but many questions remain

2020, January 16 - 10:00pm

Companies keep trying to make glassholes happen. Understandably. After the smartphone and the wrist, the face is the next local battlefield for computational space, if decades of science fiction movies have taught us anything. But we’ve seen the Google Glass, the Snapchat Spectacles, The Magic Leap, the whatever that thing that Samsung just semi-announced was.

Contact lenses have been mentioned in that same conversation for some time, as well, but technical limitations have placed the bar much higher than a heads-up display standard pair of spectacles. California-based Mojo Vision has been working on the breakthrough for a number of years now, and has a lofty sum to show for it, with $108 million in funding, including a $58 million Series B closed back in March.

The technology is compelling, certainly. I met with the team in a hotel suite at CES last week and got a walkthrough of some of the things they’ve been working on. While executives say they’ve been dogfooding the technology for some time now, the demos were still pretty far removed from an eventual in-eye augmented reality contact lens.

Rather, two separate demos essentially involved holding a lens or device close to my eye in order to get a feel for what an eventual product would look like. The reason was two-fold. First, most of the work is still being done off-device at the moment, while Mojo works to perfect a system that can exist within the confines of a contact while only needing to be charged once in a 25-hour cycle. Second, the issue of trying on a pair of contacts during a brief CES meeting.

I will say that I was impressed by the heads-up display capabilities. In the most basic demo, monochrome text resembling a digital clock is overlaid on images. Here, miles per hour are shown over videos of people running. The illusion has some depth to it, with the numbers appearing as though they’re a foot or so out.

In another demo, I donned an HTC Vive. Here I’m shown live video of the room around me (XR, if you will), with notifications. The system tracks eye movements, so you can focus on a tab to expand it for more information. It’s a far more graphical interface than the other example, with full calendars, weather forecasts and the like. You can easily envision how the addition of a broader color palette could give rise to some fairly complex AR imagery.

Mojo is using CES to announce its intentions to start life as a medical device. In fact, the FDA awarded the startup a Breakthrough Device Designation, meaning the technology will get special review priority from the government body. That’s coupled with a partnership with Bay Area-based Vista Center for the Blind and Visually Impaired.

That ought to give a good idea of Mojo’s go to market plans. Before selling itself as an AR-for-everyone device, the company is smartly going after visual impairments. It should occupy similar space as many of the “hearable” companies that have applied for medical device status to offer hearing-enhancing Bluetooth earbuds. Working with the FDA should go a ways toward helping fast-track the technology into optometrist offices.

The idea is to have them prescribed in a similar fashion as contact lenses, while added features like night vision will both aid people with visual impairments and potentially make those with better vision essentially bionic. You’ll go to a doctor, get prescribed, the contact lenses will be mailed to you and should last about the length of a normal pair. Obviously they’ll be pricier, of course, and questions about how much insurance companies will shell out still remain.

In their final state, the devices should last a full day, recharging in a cleaning case in a manner not dissimilar from AirPods (though those, sadly, don’t also clean the product). The lenses will have a small radio on-board to communicate with a device that hangs around the neck and relays information to and from a smartphone. I asked whether the plan was to eventually phase out the neck device, to which the company answered that, no, the plan was to phase out the smartphone. Fair play.

I also asked whether the company was working with a neurologist in addition to its existing medical staff. After 10 years of smartphone ubiquity, it seems we’re only starting to get clear data on how those devices impact things like sleep and mental well-being. I have to imagine that’s only going to be exacerbated by the feeling of having those notifications more or less beaming directly into your brain.

Did I mention that you can still see the display when your eyes are closed. Talk about a (pardon my French) mind fuck. There will surely be ways to silence or disable these things, but as someone who regularly falls asleep with his smartphone in-hand, I admit that I’m pretty weak when it comes to the issue of digital dependence. This feels like injecting that stuff directly into my veins, and I’m here for it, until I’m not.

We still have time. Mojo’s still working on the final product. And then it will need medical approval. Hopefully that’s enough time to more concretely answer some of these burning questions, but given how things like screen time have played out, I have some doubts on that front.

Stay tuned on all of the above. We’ll be following this one closely.

Categories: Business News

Bolt raises €50M in venture debt from the EU to expand its ride-hailing business

2020, January 16 - 8:30pm

Bolt, the billion-dollar startup out of Estonia that’s building a ride-hailing, scooter and food delivery business across Europe and Africa, has picked up a tranche of funding in its bid to take on Uber and the rest in the world of on-demand transportation.

The company has picked up €50 million (about $56 million) from the European Investment Bank to continue developing its technology and safety features, as well as to expand newer areas of its business, such as food delivery and personal transport like e-scooters.

With this latest money, Bolt has raised more than €250 million in funding since opening for business in 2013, and as of its last equity round in July 2019 (when it raised $67 million), it was valued at over $1 billion, which Bolt has confirmed to me remains the valuation here.

Bolt further said that its service now has more than 30 million users in 150 cities and 35 countries and is profitable in two-thirds of its markets.

The timing of the last equity round, and the company’s ambitious growth plans, could well mean it will be raising more equity funding again soon. Bolt’s existing backers include the Chinese ride-hailing giant Didi, Creandum, G Squared and Daimler (which owns a ride-hailing competitor, Free Now — formerly called MyTaxi).

“Bolt is a good example of European excellence in tech and innovation. As you say, to stand still is to go backwards, and Bolt is never standing still,” said EIB’s vice president, Alexander Stubb, in a statement. “The Bank is very happy to support the company in improving its services, as well as allowing it to branch out into new service fields. In other words, we’re fully on board!”

The EIB is the nonprofit, long-term lending arm of the European Union, and this financing in the form of a quasi-equity facility.

Also known as venture debt, the financing is structured as a loan, where repayment terms are based on a percentage of future revenue streams, and ownership is not diluted. The funding is backed in turn by the European Fund for Strategic Investments, as part of a bigger strategy to boost investment in promising companies, and specifically riskier startups, in the tech industry. It expects to make and spur some €458.8 billion in investments across 1 million startups and SMEs as part of this plan.

Opting for a “quasi-equity” loan instead of a straight equity or debt investment is attractive to Bolt for a couple of reasons. One is the fact that the funding comes without ownership dilution. Two is the endorsement and support of the EU itself, in a market category where tech disruptors have been known to run afoul of regulators and lawmakers, in part because of the ubiquity and nature of the transportation/mobility industry.

“Mobility is one of the areas where Europe will really benefit from a local champion who shares the values of European consumers and regulators,” said Martin Villig, the co-founder of Bolt (whose brother Markus is the CEO), in a statement. “Therefore, we are thrilled to have the European Investment Bank join the ranks of Bolt’s backers as this enables us to move faster towards serving many more people in Europe.”

(Butting heads with authorities is something that Bolt is no stranger to: It tried to enter the lucrative London taxi market through a backdoor to bypass the waiting time to get a license. It really didn’t work, and the company had to wait another 21 months to come to London doing it by the book. In its first six months of operation in London, the company has picked up 1.5 million customers.)

While private VCs account for the majority of startup funding, backing from government groups is an interesting and strategic route for tech companies that are making waves in large industries that sit adjacent to technology. Before it was acquired by PayPal, IZettle also picked up a round of funding from the EIB specifically to invest in its AI R&D. Navya, the self-driving bus and shuttle startup, has also raised money from the EIB in the past, as has MariaDB.

One of the big issues with on-demand transportation companies has been their safety record, a huge area of focus given the potential scale and ubiquity of a transportation or mobility service. Indeed, this is at the center of Uber’s latest scuffle in Europe, where London’s transport regulator has rejected a license renewal for the company over concerns about Uber’s safety record. (Uber is appealing; while it does, it’s business as usual.)

So it’s no surprise that with this funding, Bolt says that it will be specifically using the money to develop technology to “improve the safety, reliability and sustainability of its services while maintaining the high efficiency of the company’s operations.”

Bolt is one of a group of companies that have been hatched out of Estonia, which has worked to position itself as a leader in Europe’s tech industry as part of its own economic regeneration in the decades after existing as part of the Soviet Union (it formally left in 1990). The EIB has invested around €830 million in Estonian projects in the last five years.

“Estonia is as the forefront of digital transformation in Europe,” said Paolo Gentiloni, European Commissioner for the Economy, in a statement. “I am proud that Europe, through the Investment Plan, supports Estonian platform Bolt’s research and development strategy to create innovative and safe services that will enhance urban mobility.”

Categories: Business News

Getsafe, the German insurtech, brings its contents insurance app to UK

2020, January 16 - 4:00pm

Getsafe, the German insurtech that offers home contents insurance via an app, has launched in the U.K., despite an increasingly competitive market for insurance in the country, and the thorny regulatory issue of Brexit.

This has seen Getsafe incorporate an independent British subsidiary based in London, in order to shield it ahead of future political decisions about the future trading relationship between the U.K. and the European Union.

To launch its flagship home contents insurance in the U.K., the startup has also partnered with with Hiscox. It currently partners with Munich Re and AXA for other markets.

Founded in May 2015 by Christian Wiens and Marius Blaesing in Heidelberg, Getsafe initially launched as a digital insurance broker before pivoting to a direct to consumer insurance offering of its own (its brokerage business was sold to Verivox).

Pitching itself as a digital insurer aimed at millennials — and one of the fastest growing digital insurance apps in Germany — Getsafe’s flagship product offers flexible home contents insurance, along with other “modules,” such as personal possessions cover (which insures possessions out of home) and accidental damage cover. The idea is that you build and only pay for the exact cover you need.

Earlier this week, I took the Getsafe on-boarding process for a spin and signed up for basic home contents insurance. The process was just about as painless as it could be, and within just a few minutes I had cover for less than £5 per month, which felt very competitive.

Of course, the startup isn’t without digital competitors here in the U.K. — Brolly Contents is one, for example — and the proof of any insurance product is when you need to make a claim. To do this, Getsafe has developed a claims chatbot called Carla, which is available 24 hours a day to answer questions and report claims. Let’s hope I never have to chat to Carla.

Getsafe CEO and founder Christian Wiens says the U.K. is an attractive market (despite Brexit) because consumers are used to buying financial products digitally. He cites the U.K. being by far the largest market in Europe for e-commerce, noting that mobile payments are also standard here, and “neo-banks” such as Monzo, Revolut, Starling and N26 are well-established. In contrast, he argues that insurance is yet to catch up. “With our smartphone app, Getsafe will aim to close this gap in the market,” says Wiens.

In June 2019, Getsafe raised $17 million (€15 million) in a Series A funding. The round was led by Earlybird, with participation from CommerzVentures (and other existing investors).

Categories: Business News

Apple buys edge-based AI startup Xnor.ai for a reported $200M

2020, January 16 - 7:54am

Xnor.ai, spun off in 2017 from the nonprofit Allen Institute for AI (AI2), has been acquired by Apple for about $200 million. A source close to the company corroborated a report this morning from GeekWire to that effect.

Apple confirmed the reports with its standard statement for this sort of quiet acquisition: “Apple buys smaller technology companies from time to time and we generally do not discuss our purpose or plans.” (I’ve asked for clarification just in case.)

Xnor.ai began as a process for making machine learning algorithms highly efficient — so efficient that they could run on even the lowest tier of hardware out there, things like embedded electronics in security cameras that use only a modicum of power. Yet using Xnor’s algorithms they could accomplish tasks like object recognition, which in other circumstances might require a powerful processor or connection to the cloud.

Xnor’s saltine-sized, solar-powered AI hardware redefines the edge

CEO Ali Farhadi and his founding team put the company together at AI2 and spun it out just before the organization formally launched its incubator program. It raised $2.7M in early 2017 and $12M in 2018, both rounds led by Seattle’s Madrona Venture Group, and has steadily grown its local operations and areas of business.

The $200M acquisition price is only approximate, the source indicated, but even if the final number were less by half that would be a big return for Madrona and other investors.

The company will likely move to Apple’s Seattle offices; GeekWire, visiting the Xnor.ai offices (in inclement weather, no less), reported that a move was clearly underway. AI2 confirmed that Farhadi is no longer working there, but he will retain his faculty position at the University of Washington.

An acquisition by Apple makes perfect sense when one thinks of how that company has been directing its efforts towards edge computing. With a chip dedicated to executing machine learning workflows in a variety of situations, Apple clearly intends for its devices to operate independent of the cloud for such tasks as facial recognition, natural language processing, and augmented reality. It’s as much for performance as privacy purposes.

Its camera software especially makes extensive use of machine learning algorithms for both capturing and processing images, a compute-heavy task that could potentially be made much lighter with the inclusion of Xnor’s economizing techniques. The future of photography is code, after all — so the more of it you can execute, and the less time and power it takes to do so, the better.

The future of photography is code

 

It could also indicate new forays in the smart home, toward which with HomePod Apple has made some tentative steps. But Xnor’s technology is highly adaptable and as such rather difficult to predict as far as what it enables for such a vast company as Apple.

Categories: Business News

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