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Extra Crunch roundup: Digital health VC survey, edtech M&A, deep tech marketing, more

2021, January 23 - 5:58am

I had my first telehealth consultation last year, and there’s a high probability that you did, too. Since the pandemic began, consumer adoption of remote healthcare has increased 300%.

Speaking as an unvaccinated urban dweller: I’d rather speak to a nurse or doctor via my laptop than try to remain physically distanced on a bus or hailed ride traveling to/from their office.

Even after things return to (rolls eyes) normal, if I thought there was a reliable way to receive high-quality healthcare in my living room, I’d choose it.

Clearly, I’m not alone: a May 2020 McKinsey study pegged yearly domestic telehealth revenue at $3 billion before the coronavirus, but estimated that “up to $250 billion of current U.S. healthcare spend could potentially be virtualized” after the pandemic abates.

That’s a staggering number, but in a category that includes startups focused on sexual health, women’s health, pediatrics, mental health, data management and testing, it’s clear to see why digital-health funding topped more than $10 billion in the first three quarters of 2020.

Drawing from The TechCrunch List, reporter Sarah Buhr interviewed eight active health tech VCs to learn more about the companies and industry verticals that have captured their interest in 2021:

  • Bryan Roberts and Bob Kocher, partners, Venrock
  • Nan Li, managing director, Obvious Ventures
  • Elizabeth Yin, general partner, Hustle Fund
  • Christina Farr, principal investor and health tech lead, OMERS Ventures
  • Ursheet Parikh, partner, Mayfield Ventures
  • Nnamdi Okike, co-founder and managing partner, 645 Ventures
  • Emily Melton, founder and managing partner, Threshold Ventures

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Since COVID-19 has renewed Washington’s focus on healthcare, many investors said they expect a friendly regulatory environment for telehealth in 2021. Additionally, healthcare providers are looking for ways to reduce costs and lower barriers for patients seeking behavioral support.

“Remote really does work,” said Elizabeth Yin, general partner at Hustle Fund.

We’ll cover digital health in more depth this year through additional surveys, vertical reporting, founder interviews and much more.

Thanks very much for reading Extra Crunch this week; I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

8 VCs agree: Behavioral support and remote visits make digital health a strong bet for 2021

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

8 VCs agree: Behavioral support and remote visits make digital health a strong bet for 2021

Lessons from Top Hat’s acquisition spree

Image Credits: Bryce Durbin

In the last year, edtech startup Top Hat acquired three publishing companies: Fountainhead Press, Bludoor and Nelson HigherEd.

Natasha Mascarenhas interviewed CEO and founder Mike Silagadze to learn more about his content acquisition strategy, but her story also discussed “some rumblings of consolidation and exits in edtech land.”

Lessons from Top Hat’s acquisition spree

How VCs invested in Asia and Europe in 2020

Image Credits: Nigel Sussman (opens in a new window)

Last year, U.S.-based VCs invested an average of $428 million each day in domestic startups, with much of the benefits flowing to fintech companies.

This morning, Alex Wilhelm examined Q4 VC totals for Europe, which had its lowest deal count since Q1 2019, despite a record $14.3 billion in investments.

Asia’s VC industry, which saw $25.2 billion invested across 1,398 deals is seeing “a muted recovery,” says Alex.

“Falling seed volume, lots of big rounds. That’s 2020 VC around the world in a nutshell.”

How VCs invested in Asia and Europe in 2020

Decrypted: With more SolarWinds fallout, Biden picks his cybersecurity team

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

In this week’s Decrypted, security reporter Zack Whittaker covered the latest news in the unfolding SolarWinds espionage campaign, now revealed to have impacted the U.S. Bureau of Labor Statistics and Malwarebytes.

In other news, the controversy regarding WhatsApp’s privacy policy change appears to be driving users to encrypted messaging app Signal, Zack reported. Facebook has put changes at WhatsApp on hold “until it could figure out how to explain the change without losing millions of users,” apparently.

Decrypted: With more SolarWinds fallout, Biden picks his cybersecurity team

Hot IPOs hang onto gains as investors keep betting on tech

Image Credits: Nigel Sussman (opens in a new window)

A big IPO debut is a juicy topic for a few news cycles, but because there’s always another unicorn ready to break free from its corral and leap into the public markets, it doesn’t leave a lot of time to reflect.

Alex studied companies like Lemonade, Airbnb and Affirm to see how well these IPO pop stars have retained their value. Not only have most held steady, “many have actually run up the score in the ensuing weeks,” he found.

Hot IPOs hang onto gains as investors keep betting on tech

Dear Sophie: What are Biden’s immigration changes?

Image Credits: Bryce Durbin / TechCrunch

Dear Sophie:

I work in HR for a tech firm. I understand that Biden is rolling out a new immigration plan today.

What is your sense as to how the new administration will change business, corporate and startup founder immigration to the U.S.?

—Free in Fremont

Dear Sophie: What are Biden’s immigration changes?

Hello, Extra Crunch community!

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

I began my career as an avid TechCrunch reader and remained one even when I joined as a writer, when I left to work on other things and now that I’ve returned to focus on better serving our community.

I’ve been chatting with some of the folks in our community and I’d love to talk to you, too. Nothing fancy, just 5-10 minutes of your time to hear more about what you want to see from us and get some feedback on what we’ve been doing so far.

If you would be so kind as to take a minute or two to fill out this form, I’ll drop you a note and hopefully we can have a chat about the future of the Extra Crunch community before we formally roll out some of the ideas we’re cooking up.

Drew Olanoff
@yoda

Hello, Extra Crunch community!

In 2020, VCs invested $428m into US-based startups every day

Image Credits: Nigel Sussman (opens in a new window)

Last year was a disaster across the board thanks to a global pandemic, economic uncertainty and widespread social and political upheaval.

But if you were involved in the private markets, however, 2020 had some very clear upside — VCs flowed $156.2 billion into U.S.-based startups, “or around $428 million for each day,” reports Alex Wilhelm.

“The huge sum of money, however, was itself dwarfed by the amount of liquidity that American startups generated, some $290.1 billion.”

Using data sourced from the National Venture Capital Association and PitchBook, Alex used Monday’s column to recap last year’s seed, early-stage and late-stage rounds.

In 2020, VCs invested $428M into US-based startups every day

How and when to build marketing teams at deep tech companies

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

Building a marketing team is one of the most opaque parts of spinning up a startup, but for a deep tech company, the stakes couldn’t be higher.

How can technical founders working on bleeding-edge technology find the right people to tell their story?

If you work at a post-revenue, early-stage deep tech startup (or know someone who does), this post explains when to hire a team, whether they’ll need prior industry experience, and how to source and evaluate talent.

How and when to build marketing teams at deep tech companies

Bustle CEO Bryan Goldberg explains his plans for taking the company public

Bustle Digital Group CEO Bryan Goldberg. Image Credits: Bustle Digital Group

Senior Writer Anthony Ha interviewed Bustle Digital Group CEO Bryan Goldberg to get his thoughts on the state of digital media.

Their conversation covered a lot of ground, but the biggest news it contained focuses on Goldberg’s short-term plans.

“Where do I want to see the company in three years? I want to see three things: I want to be public, I want to see us driving a lot of profits and I want it to be a lot bigger, because we’ve consolidated a lot of other publications,” he said.

Bustle CEO Bryan Goldberg explains his plans for taking the company public

It may not be as glamorous as D2C, but beauty tech is big money

Image Credits: Laia Divols Escude/EyeEm (opens in a new window) / Getty Images

The U.S. Federal Trade Commission is not a huge fan of personal-care D2C brands merging with traditional consumer product companies.

This month, razor startup Billie and Proctor & Gamble announced they were calling off their planned merger after the FTC filed suit.

For similar reasons, Edgewell Personal Care dropped its plans last year to buy Harry’s for $1.37 billion.

In a harsher regulatory environment, “the path to profitability has become a more important part of the startup story versus growth at all costs,” it seems.

It may not be as glamorous as D2C, but beauty tech is big money

Twilio CEO says wisdom lies with your developers

SAN FRANCISCO, CA – SEPTEMBER 12: Founder and CEO of Twilio Jeff Lawson speaks onstage during TechCrunch Disrupt SF 2016 at Pier 48 on September 12, 2016 in San Francisco, California. Image Credits: Steve Jennings/Getty Images for TechCrunch

Companies that build their own tools “tend to win the hearts, minds and wallets of their customers,” according to Twilio CEO Jeff Lawson.

In an interview with enterprise reporter Ron Miller for his new book, “Ask Your Developer,” Lawson says founders should use developer teams as a sounding board when making build-versus-buy decisions.

“Lawson’s basic philosophy in the book is that if you can build it, you should,” says Ron.

Twilio CEO Jeff Lawson says wisdom lies with your developers

Categories: Business News

Sounding Board raises cash as startups wake up to executive coaching

2021, January 23 - 1:58am

In an unprecedented work environment defined by distributed teams and virtual-only communication, two co-founders think their 2018 bet reigns truer than ever: mentors need mentorship, too.

Christine Tao and Lori Mazan, the brains behind Sounding Board, want to train any leader within an organization to be a better leader. The San Francisco startup connects anyone from first-time managers to C-suite executives with coaches through a marketplace.

Revenue has doubled or tripled every year since 2016, which the company says hovers in the “multi-millions” range. But in the wake of the coronavirus pandemic, Sounding Board has seen demand for its platform grow even more. Quarterly bookings have increased 3.4 times from Q2 2020, and in the last five months, monthly revenue has doubled.

On the heels of this growth, the co-founders say that Sounding Board’s next step as a startup is to grow beyond coaching services and into a platform that can show leaders how those newfound skills are impacting business development. The new product is meant to serve as a hub and roadmap where a participant and coach can track insights, progress and behaviors.

Within the platform, a user can schedule sessions with a coach, get matched to someone, as well as look at resources and complete tasks assigned to them. Beyond that, there is a feature that allows the coach and the manager to measure goals on an ongoing basis, similar to OKR-related software.

“The content is great, but unless you can apply that content, it’s not very useful,” Mazan said. “So this coaching is a way to help people apply the insights and the learning they’ve gotten from some kind of content and really utilize that in the workplace.”

The new product takes the monthly in-person summit that your organization used to call executive coaching and turns it into a living, breathing part of a manager’s workflow.

Beyond helping its users have a better temperature check on their progress, the product will help Sounding Board scale its services. Now any tutor on Sounding Board has more ways into a user’s mind and workflow, so every call isn’t synchronous and can be managed more evenly.

The co-founders see their long-term differentiation living in this feature. Anyone can create a marketplace, but it takes seamless, easy-to-use tech to track the effectiveness of what happens post-coaching.

Tao admits that the startup isn’t for everyone. Sounding Board has seen early adoption around enterprise companies that are in a late-stage, hyper-growth mindset heading toward an IPO. That level of maturity is a sweet spot for a third-party such as them to come in and scale leaders across teams. Customers include VMware, Uber, Plaid, Chime and Dropbox.

Why is everyone making OKR software?

That said, within organizations, 60% of Sounding Board’s users are first-time managers, 30% are middle-tier and 10% are C-suite. The co-founders think these numbers indicate a broader demand for mentorship beyond what their competitors offer, which often sticks to C-suite life coach territory or stress management.

“Everyone is starting to realize that we’re going to have to offer coaching broader than just in the C-suite, and sometimes they don’t really know what that means,” said Mazan.

The realization, along with COVID-19 tailwinds, has helped Sounding Board attract new millions in venture capital. The startup tells TechCrunch that it has raised a $13.1 million Series A led by Canaan Partners. Other investors include Correlation Ventures, Bloomberg Beta, Precursor Ventures, as well as Degreed founder David Blake and Kevin Johnson, the former CEO of Udemy.

Categories: Business News

How VCs invested in Asia and Europe in 2020

2021, January 23 - 12:35am

Wrapping our look at how the venture capital asset class invested in 2020, today we’re taking a peek at Europe’s impressive year, and Asia’s slightly less invigorating set of results. (We’re speaking soon with folks who may have data on African VC activity in 2020; if those bear out, we’ll do a final entry in our series concerning the continent.)

After digging into the United States’ broader venture capital results from last year with an extra eye on fintech and unicorn investing, at least one trend was clear: Venture capital is getting later and larger (as expected).

Record dollar amounts were being invested, but across falling deal volume. More money and fewer rounds meant larger rounds, often going to the late and super-late stage startups in the market.

Unicorns are feasting, in other words, while some younger startups struggle to raise capital.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

There have been some encouraging signs of seed activity, mind, but full-year data made it clear that in America, the more mature startups had the best of it.

But what about the rest of the world? After parsing KPMG data concerning both how VCs invested in Europe (here) and Asia (here) last year, there are clear echoes. But not entire reproductions.

Let’s discuss key data points from the two reports. This will be illustrative, brief and painless. Into the data!

European VCs: Rich, but not evenly distributed

Compared to historical investment levels, KPMG’s European VC report describes a venture capital scene at its peak. Q4 2020 saw $14.3 billion invested into EU startups across 1,192 deals, the highest dollar amount charted and a modest besting of the previous record set in Q3 2020.

However, despite impressive investment totals, the number of deals that the money was spread over proved lackluster.

The Q4 2020 deal count was the lowest on record since the continent’s deal peak in Q1 2019. Squinting at the provided chart, it appears that deal volume in Europe has fallen from around 2,200 in that peak quarter, to Q4’s fewer than 1,200 deals.

Categories: Business News

MotoRefi raises $10M to keep pedal on auto refinancing growth

2021, January 23 - 12:17am

A month before the COVID-19 pandemic had spread to North America, auto fintech startup MotoRefi — newly armed with nearly $9 million in venture capital — was preparing to bring its refinancing platform to the masses.

CEO Kevin Bennett, and the investors behind the company, saw the opportunity to service Americans who collectively hold $1.2 trillion in auto loans. What they didn’t anticipate was the sudden uptick in demand fueled by COVID-19 and the uncertainty and chaos that the pandemic created.

MotoRefi, which was born out of QED Investors in 2017, developed an auto refinancing platform that handles the entire process, including finding the best rates, paying off the old lender and re-titling the vehicle. The company has benefitted from the convergence of two trends sparked by COVID-19 that has turbocharged its business: an accelerated adoption of fintech across the economy and growing attention toward personal finance. 

Now, investors are pouring more money into the startup to help it make the most of the spike in demand for auto refinancing.

MotoRefi said Friday it has raised $10 million in a round led by Moderne Ventures. Liza Benson, a partner at Moderne Venture, will join the board.

“Many people are looking around saying how can they save money?” Bennett said, commenting on the events of the past year. “And while auto refinance historically is in a relatively low awareness category of personal finance, that interest has really grown and accelerated through 2020.”

For instance, Google searches for auto refinance increased about 40% in 2020 over the previous year, he added.

The company said its revenue rose by sixfold, its workforce tripled to more than 150 people and the number of lenders on its platform doubled over the past year. MotoRefi said it refinanced more than $250 million of auto loans in 2020.

“We actually weren’t planning on raising twice in a year,” Bennett said. “But the growth had been pretty noticeable from the investor standpoint in the market.”

That new capital will be used to hire more employees and expand its offerings, according to Bennett, who noted that MotoRefi now operates in 42 states and Washington, DC.

MotoRefi has raised more than $24 million to date. The company raised $8.6 million last February in a Series A funding round. That round, which would later grow to $9.4 million, was co-led by Accomplice and Link Ventures. Motley Fool Ventures, CMFG Ventures (part of CUNA Mutual Group) and Gaingels also participated in the round. The Series A round followed $4.7 million in seed funding that MotoRefi announced in March 2019.

Categories: Business News

Dashlane taps JD Sherman, ex-Hubspot COO, as new CEO, as co-founder Emmanuel Schalit steps aside

2021, January 23 - 12:05am

Our reliance on internet-based services is at an all-time high these days, and that’s brought a new focus on how well we are protected when we go online. Today comes some news from one of the bigger companies working in the area of password security, which points out how business is shifting for the companies providing these tools.

Emmanuel Schalit, the co-founder of popular password manager Dashlane, is stepping down as CEO of the startup. He is being replaced by JD Sherman, the former COO of HubSpot, as Dashlane makes plans to move more aggressively to court more business users.

“This is about thinking about its next leg of our scaling strategy, more B2B monetization after being strong in B2C,” Sherman said in an interview, praising his predecessor’s growth of the consumer business and noting his realization that “B2B was not his forte.”

Sherman’s career focus, in contrast, has been all about B2B. Before his eight years at HubSpot, he was the CFO of Akamai (which, as a CDN, also had security as a focus, albeit in a completely different way), and before that IBM.

Since accepting the offer, Sherman (pictured right) has been quietly working with Schalit — who will no longer hold any operational role — to get up to speed and will be taking over formally at the start of February.

Sherman is based out of Boston and will eventually commute to Dashlane’s HQ in New York (“eventually” because everyone is remote-working at the moment, with Sherman himself getting hired in a virtual process).

The changing of the guard comes at an interesting time for the startup. Dashlane now has 15 million users, up from 10 million+ in 2019. That was the same year that Dashlane announced two significant rounds of funding just six weeks apart from each other: first a $30 million round (which appeared to have some debt as part of it), then a $110 million Series D that valued the company at just over $500 million. Its backers include the likes of Sequoia, Bessemer, FirstMark, Rho Ventures and consumer credit reporting giant TransUnion.

Sherman would not talk about current valuation, nor where the company is currently standing regarding its next financial steps, except to say that it’s in a good place and to provide the smallest of hints of an IPO on the horizon.

“The Series D was a healthy round for a subscription business,” he said. “Right now, cashflow is solid and we have the funding we need for our growth, so there is no urgent plan to raise money. When we do, we’ll see if it is an IPO round” — that is, the last round before an IPO — “or not. To me, it’s all about growing the business.”

My guess: that valuation has gone up, given the boost in user numbers, the growth of its enterprise business and the huge shifts in the market in the last year that have put a spotlight on companies that are making using the internet safer. (Also, note that LogMeIn, which owns competitor LastPass, was picked up by PE firms for about $4.3 billion in a deal that completed last year.)

Use ‘productive paranoia’ to build cybersecurity culture at your startup

Dashlane was founded focused primarily on providing password management tools for consumers. These still account for the majority of its users, but the Series D funding was in part to fuel a bigger push into the business market, and to generally get on the radar of more people.

The expansion into business users was a natural move in more ways than one. First, the consumer service is designed as a freemium offering, while businesses provide a more steady and guaranteed revenue stream. Second, there is a natural progression that comes from being a happy consumer user: you might want to have the same service for your online work life, too. That remains the strategy for Sherman.

“The plan is to have two sides to the business,” he said, using the well-worn consumer-to-business analogy of a flywheel to describe how it will work: “The more who use it, more businesses will start to adopt it and get comfortable with using a password manager.”

That strategy is lately getting a major fillip, in the form of the massive boost in online activity in the past year.

Activities like taking care of all your shopping, entertainment, social and work-related needs have all moved online in the last year, pushed into the virtual sphere by the emergence and persistent presence of the easily contagious and dangerous COVID-19 virus.

Some of that shift has worked out better than many thought it would, and now, some believe that even when the pandemic does get under control, a lot of us will still be using the internet to get all of those things done on a regular basis.

But while I’ve heard a lot of industry people describe that situation as “the genie is out of the bottle”, perhaps a more fitting expression might be that Pandora’s box has been opened. That is to say, the increased online usage has created an alarmingly large opportunity for malicious hacking, security breaches and misuse of our online identities.

This consequently has a pretty direct link back to Dashlane.

Password protection is one of the most important elements of keeping yourself and your information safe online, with weak, stolen and reused passwords some of the biggest causes of security breaches both for consumers and businesses (by some estimates, you can track 80-90% of all security breaches back to password issues).

Beyond that, not least because of all the breaches we’ve now seen, the current market has become much more concerned about privacy and security (a trend manifesting in all kinds of ways), and that has bred a lot more awareness and appetite for the kinds of tools that Dashlane, and other companies that enable better online security, provide.

There will likely continue to be developments in the technology to both suss out bad actors and block them in their tracks when they do try to enter networks, and the technology sold to organizations to keep their and their customers’ information in the cloud in more secure ways will also be improved. But above and beyond all that, password managers are likely to continue to play a role in the mix.

Google is making autofill on Chrome for mobile more secure

Password managers may not always be a perfect solution — there have been a few cases of breaches over the years, and while they have not been in recent times, security researchers at the University of York in May 2020 identified vulnerabilities that could potentially be exploited — but they remain a relatively easy option for end users themselves to be more proactive in protecting their identities specifically by building a better way to guard their passwords. (Among all that, it’s also worth pointing out that Dashlane has never had a breach in its 10+ years of operations.)

And there are a number of routes to providing password management, including efforts from platform players themselves and more direct Dashlane competitors like 1Password and LastPass. Notably, some of the efforts to bridge some of that together, such as the “OpenYolo” project spearheaded by Google and Dashlane, have stalled over the years, in part because of the complexity of implementing it with other existing managers.

But even within that fragmented, competitive and (still at times) vulnerable market, Dashlane still has a lot of opportunities for growth.

“The business is strong and growing,” Sherman said. “The craziness around COVID and remote networking have raised the profile of password management and security in general. It’s a more difficult environment, but there is a tailwind there.”

Categories: Business News

Blobr, the ‘no-code’ company turning APIs into products, raises €1.2M pre-seed

2021, January 22 - 11:57pm

Blobr, a Paris-based startup operating in the no-code space with tech to make it easier for companies to expose and monetise their existing APIs, has raised €1.2 million in pre-seed funding.

The round is led by pan-European pre-seed and seed investor Seedcamp, with participation from New Wave, Kima and various angel investors. Blobr is also the first company to take investment from New Wave — the new European venture capital firm co-founded by Pia d’Iribarne and Jean de la Rochebrochard — since the VC confirmed it had closed $56 million in deployable capital from an all-star lineup of investors, including Iliad’s Xavier Niel, Benchmark’s Peter Fenton and Tony Fadell of Apple fame.

Blobr, founded by Alexandre Airvault (CEO) and Alexandre Mai (CTO), is aiming to become the default “business and product layer” for APIs. This idea is to enable product and business people to manage and monetise a company’s application programming interfaces without technical knowledge or the need to use up more internal engineering resources. And by doing so, the startup believes we’ll see much more innovative use of APIs as commercial data and functionality is made accessible by more third parties to build on top.

“We believe companies should stop thinking of APIs as mere pipes and start building them as products to unleash their power,” says Airvault. “This means APIs should be priced, customized and managed with a user-oriented mindset and not only a tech one”.

To make this a reality, Blobr is designed to empower product and business owners to “make data-sharing a profitable model”, while reducing their dependence on tech. “I believe this approach is what will drive the data exchanges to the next level”, he explains.

Blobr’s no-code technology offers quite a lot of functionality already. From one existing internal API, you can filter confidential information or GDPR-related data; it’s also possible to deliver different API output depending on customer segmentation so you only expose the data that’s needed; and API usage can be linked to usage-based business models or a monthly subscription in Stripe.

Airvault says the startup’s main competitors include API management solutions from Google, IBM, Axway and MuleSoft. “Those platforms are tailored for internal APIs but are not thought of and optimized to manage APIs as products. They are tailored for technical people, whereas Blobr as a no-code solution is built from scratch for product and business people to avoid technical people to be involved in the equation,” he adds.

New Wave is a new European seed fund headed up by ex-Accel VC Pia d’Iribarne

Categories: Business News

JustKitchen is using cloud kitchens to create the next generation of restaurant franchising

2021, January 22 - 3:23pm

JustKitchen operates cloud kitchens, but the company goes beyond providing cooking facilities for delivery meals. Instead, it sees food as a content play, with recipes and branding instead of music or shows as the content, and wants to create the next iteration of food franchises. JustKitchen currently operates its “hub and spoke” model in Taiwan, with plans to expand four other Asian markets, including Hong Kong and Singapore, and the United States this year.

Launched last year, JustKitchen currently offers 14 brands in Taiwan, including Smith & Wollensky and TGI Fridays. Ingredients are first prepped in a “hub” kitchen, before being sent to smaller “spokes” for final assembly and pickup by delivery partners, including Uber Eats and FoodPanda. To reduce operational costs, spokes are spread throughout cities for quicker deliveries and the brands each prepares is based on what is ordered most frequently in the area.

In addition to licensing deals, JustKitchen also develops its own brands and performs research and development for its partners. To enable that, chief operating officer Kenneth Wu told TechCrunch that JustKitchen is moving to a more decentralized model, which means its hub kitchens will be used primarily for R&D, and production at some of its spoke kitchens will be outsourced to other food vendors and manufacturers. The company’s long-term plan is to license spoke operation to franchisees, while providing order management software and content (i.e. recipes, packaging and branding) to maintain consistent quality.

Demand for meal and grocery deliveries increased dramatically during the COVID-19 pandemic. In the United States, this means food deliveries made up about 13% of the restaurant market in 2020, compared to the 9% forecast before the pandemic, according to research firm Statista, and may rise to 21% by 2025.

But on-demand food delivery businesses are notoriously expensive to operate, with low margins despite markups and fees. By centralizing food preparation and pickup, cloud kitchens (also called ghost kitchens or dark kitchens) are supposed to increase profitability while ensuring standardized quality. Not surprisingly, companies in the space have received significant attention, including former Uber chief executive officer Travis Kalanick’s CloudKitchens, Kitchen United and REEF, which recently raised $1 billion led by SoftBank.

The hidden cost of food delivery

Wu, whose food delivery startup Milk and Eggs was acquired by GrubHub in 2019, said one of the main ways JustKitchen differentiates is by focusing on operations and content in addition to kitchen infrastructure. Before partnering with restaurants and other brands, JustKitchen meets with them to design a menu specifically for takeout and delivery. Once a menu is launched, it is produced by JustKitchen instead of the brands, who are paid royalties. For restaurants that operate only one brick-and-mortar location, this gives them an opportunity to expand into multiple neighborhoods and cities (or countries, when JustKitchen begins its international expansion) simultaneously, a new take on the franchising model for the on-demand delivery era.

One of JustKitchen’s delivery meals

Each spoke kitchen puts the final touches on meal before handing them to delivery partners. Spoke kitchens are smaller than hubs, closer to customers, and the goal is to have a high revenue to square footage ratio.

“The thesis in general is how do you get economies of scale or a large volume at the hub, or the central kitchen where you’re making it, and then send it out deep into the community from the spokes, where they can do a short last-mile delivery,” said Wu.

JustKitchen says it can cut industry standard delivery times by half, and that its restaurant partners have seen 40% month on month growth. It also makes it easier for delivery providers like Uber Eats to stack orders, which means having a driver pick up three or four orders at a time for separate addresses. This reduces costs, but is usually only possible at high-volume restaurants, like fast food chain locations. Since JustKitchen offers several brands in one spoke, this gives delivery platforms more opportunities to stack orders from different brands.

In addition to partnerships, JustKitchen also develops its own food brands, using data analytics from several sources to predict demand. The first source is its own platform, since customers can order directly from Just Kitchen. It also gets high-level data from delivery partners that lets them see food preferences and cart sizes in different regions, and uses general demographic data from governments and third-party providers with information about population density, age groups, average income and spending. This allows it to plan what brands to launch in different locations and during different times of the day, since JustKitchen offers breakfast, lunch and dinner.

JustKitchen is incorporated in Canada, but launched in Taiwan first because of its population density and food delivery’s popularity. Before the COVID-19 pandemic, food delivery penetration in the U.S. and Europe was below 20%, but in Taiwan, it was already around 30% to 40%, Wu said. The new demand for food delivery in the U.S. “is part of the new norm and we believe that is not going away,” he added. JustKitchen is preparing to launch in Seattle and several Californian cities, where it already has partners and kitchen infrastructure.

“Our goal is to focus on software and content, and give franchisees operations so they have a turnkey franchise to launch immediately,” said Wu. “We have the content and they can pick whatever they want. They have software to integrate, recipes and we do the food manufacturing and sourcing to control quality, and ultimately they will operate the single location.”

REEF Technology raises $700M from SoftBank and others to remake parking lots

Categories: Business News

Chinese esports player VSPN closes $60M Series B+ round to boost its international strategy

2021, January 22 - 10:00am

Esports “total solutions provider” VSPN (Versus Programming Network) has closed a $60 million Series B+ funding round, joined by Prospect Avenue Capital (PAC), Guotai Junan International and Nan Fung Group.

VSPN facilitates esports competitions in China, which is a massive industry and has expanded into related areas such as esports venues. It is the principal tournament organizer and broadcaster for a number of top competitions, partnering with more than 70% of China’s esports tournaments.

The “B+” funding round comes only three months after the company raised around $100 million in a Series B funding round, led by Tencent Holdings.

This funding round will, among other things, be used to branch out VSPN’s overseas esports services.

Tencent leads $100M Series B funding round into China-based esport provider VSPN

Dino Ying, founder and CEO of VSPN, said in a statement: “The esports industry is through its nascent phase and is entering a new era. In this coming year, we at VSPN look forward to showcasing diversified esports products and content… and we are counting the days until the pandemic is over.”

Ming Liao, the co-founder of PAC, commented: “As a one-of-its-kind company in the capital market, VSPN is renowned for its financial management; these credentials will be strong foundations for VSPN’s future development.”

Xuan Zhao, head of Private Equity at Guotai Junan International said: “We at Guotai Junan International are very optimistic of VSPN’s sharp market insight as well as their team’s exceptional business model.”

Meng Gao, managing director at Nan Fung Group’s CEO’s office said: “Nan Fung is honored to be a part of this round of investment for VSPN in strengthening their current business model and promoting the rapid development of emerging services and the esports streaming ecosystem.”

Esports pioneer Dino Ying talks to TechCrunch about the next phase of VSPN

Categories: Business News

Hims, the telehealth startup, saw its shares slip in their trading debut — and that’s fine with its CEO

2021, January 22 - 8:37am

Hims & Hers, a San Francisco-based telehealth startup that sells sexual wellness and other health products and services to millennials, began trading publicly today on the NYSE after completing a reverse merger with the blank-check company Oaktree Acquisition Corp.

Its shares slipped a bit, ending the day down 5% from where they started, but the company, which was founded in 2017 and now claims nearly 300,000 paying subscribers for its various offerings, has never been focused on a splashy headline about its first-day performance, co-founder and CEO Andrew Dudum told us earlier today.

On the contrary, Dudum says that while Hims might have once imagined a traditional IPO, it decided to go the special purpose acquisition company (SPAC) route because of their pricing mechanisms and because it was approached by a SPAC led by renowned money manager Howard Marks, the founder of the global alternative investment firm Oaktree Capital Management. (“We fell in love with the Oaktree team and the capital market experience and deep resources they have.”)

We talked with Dudum about that SPAC’s structure; the lockups involved now that Hims’ shares are trading; and how much of the business still centers around one of its first offerings, which was a generic version of erectile dysfunction pills. Our conversation has been edited lightly for length and clarity.

TC: You’re a Bay Area-based company selling to a mostly U.S. audience. How are you thinking about expanding that footprint geographically?

AD: We do have a small operation selling in the U.K.; we’re getting our feet wet in that market and building out a team and infrastructure and fulfillment. If you look at the regulatory landscape, there’s a huge amount of room [to grow] in Europe, Australia, Canada, the Middle East and Asia, and so in that order, we’ll start to [move into those markets].

TC: What is your average customer cost? 

AD: It has come down from $200 when we first launched, to roughly $100 last year, and we make, on average, close to $300 in the first couple of years in terms of a patient’s lifetime value.

TC: How quickly do customers churn?

AD: We break down lifetime value projections by quarter cohorts, and quarter over quarter, year over year, we’re monetizing each of these cohorts better, with high-margin profiles.

As of last quarter, the business was growing 90% year-over-year, with 76% gross margins and greater cash efficiency, and that’s because as we provide more offerings, there is more cross-purchasing. Also, word of mouth is becoming more of a dynamic, with more than 50% of the traffic to the site free at this point because we have built a brand with a young demographic.

TC: When are you projecting that you’ll turn profitable?

AD: We’ve reduced our annual burn and increased our margin efficiency and organic growth, so on a quarterly basis, we think in the next couple of years is a real possibility.

Image Credits: Hims & Hers

TC: Hims’ first wellness offerings included pills for male pattern hair loss and erectile dysfunction. How much revenue does that ED business account for?

AD: What we’ve disclosed is that roughly half [of our revenue] is that sexual health category — which includes [medicines for] generic erectile dysfunction, birth control, STDs, UTIs and premature ejaculation. The other half is predominately dermatology, including hair care [to address hair loss] and acne, and we’ve more recently moved into primary care and behavioral health.

TC: For retail investors, how do you differentiate the business from that of your rival Ro, which heavily promotes its ED products?

AD: There are a number of core differences between us and public and private players. First is our real focus on diversifying our offerings. With our focus on sexual health, dermatology, primary care and behavioral health, it’s in our DNA to quickly expand into new businesses.

We also think we’re different from most [rivals] in that we really invest time in building deep relationships with [those who represent] the future of healthcare markets — people in their teens, 20s and 30s. This demographic has a different set of tech expectations and consumer expectations than people in their 40s, 50s and 60s, and if we want to build for the future, that means building for the largest body of payers in the future.

Hims launches group therapy services as first foray into broader mental health initiative

Traditional healthcare companies monetize only the sick, but optimizing around that demographic precludes you from understanding what the next generation really needs and wants. I’ve never seen such a divergence between a patient population and legacy experience, and that’s a real advantage to us as a business.

TC: Hims just went public through a SPAC in a deal that gives the company around $280 million in cash — $205 million of that from Oaktree’s blank-check company and another $75 million through a private placement deal. How much runway does that give you?

AD: The company doesn’t burn a tremendous amount — between $10 million and $20 million a year — so a relatively long runway if we keep operating the business as is. But it does allow us to expand and grow into new businesses, too, including into big categories like sleep, infertility, diabetes and other chronic conditions.

TC: What about acquisitions?

AD: We’ll keep an eye open for strategic opportunities and consolidation opportunities. More than a dozen businesses a month come to us to be consolidated into the brand, but generally speaking, we’ve had the belief that so much is in front of us that we don’t want to be distracted.

TC: Is there a lockup period for anyone?

AD: There’s a traditional lockup for executives and employees and the board.

TC: Did your SPAC sponsors get a board seat?

AD: No.

TC: How much do they now own of the company, and can they sell?

AD: Oaktree owns a couple percent and [the syndicate they brought to do the private placement] [owns] 12%. But the very reason we went with them was the quality of the team and the organization . . . and they have the added incentive for the next year or two from a compensation standpoint for the company to succeed and to prove [out their thesis that Hims is a smart investment].

TC: Do you think the traditional IPO process is broken?

AD: The traditional IPO market hasn’t changed. It takes 12 to 18 months of preparation, which is a crazy amount of time for management to be distracted, then there’s this one-day PIPE that gives institutions a tremendous amount of money instantaneously. Maybe it makes for a good CNBC headline, but at tremendous cost to the company. It’s atrocious. If you were a founder or employee and getting diluted twice as much as you have to be, you’d be really upset. It’s no surprise to me that founders like myself are looking at other modalities with better pricing and better structures.

Almost everything you need to know about SPACs

Categories: Business News

The only take about the future of media is that media is the future

2021, January 22 - 8:31am

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we — Natasha and Danny and Alex and Grace — had more than a little to noodle over, but not so much that we blocked out a second episode. We try to stick to our current format, but, may do more shows in the future. Have a thought about that? equitypod@techcrunch.com is your friend and we are listening.

Now! We took a broad approach this week, so there is a little of something for everything down below. Enjoy!

Plaid launches FinRise, an incubator for underrepresented fintech founders

Microsoft invests in Cruise in new $2 billion round

Like we said, it’s a lot, but all of it worth getting into before the weekend. Hugs from the team, we are back early Monday.

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Categories: Business News

Forsaking funding at a $1 billion valuation, Solugen preps a new green chemical product and a big 2021

2021, January 22 - 7:12am

Late last year, Solugen, a startup using synthetic biology to take hydrocarbons out of the chemicals industry, decided against pursuing a new round of funding that would have valued the company at over $1 billion, TechCrunch has learned.

Instead, the Houston-based bio-manufacturing company raised an internal round of roughly $30 million from existing investors and continued working on its latest project — a new bio-based manufacturing process for a high-value specialty chemical that can act as an anti-corrosive agent.

That work represents a potentially lucrative new product line for the company and charts a course for a host of other businesses that are refashioning the basic building blocks of life in an attempt to supplant chemistry with biology for manufacturing and production.

If Solugen can get its high-value chemical into commercial production, the company can follow the path that sustainable tech companies like Tesla have mastered — moving from a pricy specialty product into the mass market. And rather than over-promise and underdeliver, Solugen wanted to get the product line right first before raising big bucks, according to people familiar with the company’s thinking.

As the world looks to move away from oil and its byproducts to reduce greenhouse gas emissions and slow down or reverse global climate change, the chemicals industry is in the crosshairs as a huge target for disruption. Vehicle electrification solves only one part of the oil problem. The extractive industry doesn’t just produce fuel, but also the chemicals that make up most of the products that defined consumer goods in the twentieth century.

Chemicals are everywhere and they’re a huge business.

Companies like Zymergen raised hundreds of millions of dollars last year to develop industrial applications for synthetic biology, and they’re not alone. Startups including Geltor, Impossible Foods, Ginkgo Bioworks, Lygos, Novomer and Perfect Day have all raised significant amounts of capital to reduce the environmental footprint of food, chemicals, ingredients and plastics through synthetic biology.

Synthetic biology startups are giving investors an appetite

Some of these companies are seeing early success in food replacements and ingredients, but the promise of biologically based chemicals have been elusive — until now.

Solugen’s new product will produce glucaric acid, a tough-to-make chemical that can be used in water treatment facilities and as an anti-corrosive agent — and the company can make it with a zero carbon (or potentially carbon negative) manufacturing process, according to Solugen co-founder and chief technology officer, Sean Hunt.

The glucaric acid from Solugen is cheaper to produce and more environmentally friendly than existing phosphonates that are used for water treatment — and the company has the benefit of competing against chemicals manufacturers in China.

Given the continuing tensions between the two countries, the U.S. is looking to make more high-value products — including chemicals — domestically, and Solugen’s technology is a good way forward to have home-grown supplies of critical materials.

Solugen still intends to raise more capital, the company just wanted to wait until its latest production plant for the acid came online, according to Hunt.

It’s also the fruit of years of planning. The two co-founders, Hunt and Gaurab Chakrabarti, first realized they could potentially use the technology they’d developed to make specialty chemicals back in 2017, according to Hunt. But first the company had to make the hydrogen peroxide as a precursor chemical, Hunt said.

“It’s advantageous for us to focus on this,” said Hunt. “As we scale, we can enter more commodity-type markets down the road.”

It’s all part of the notable strides the entire industry is making, said Hunt. “Synthetic biology has really made significant strides,” he said. “We have our commercial plant coming online this summer [and it proves] synthetic biology has gotten to the point where we can compete on price and performance.”

So the capital infusion will come as the company gets closer to the completion of these commercial scale facilities.

“It’s not like we were sitting on a term sheet and we said no,” Hunt said. “We want to make sure that we are hitting the milestones and the goals at a commensurate pace which is this year. I’m extremely bullish and optimistic of 2021.”

Solugen’s co-founder sees the path that his company is on as one that other startups working in the synthetic biology space will pursue to bring profitable products to market at the higher end before competing with more sustainable versions of commodity chemicals.

“How do you start a company that has this level of capital intensity?” Hunt asked. “You can start in the fine chemicals space where everything sells for tens to hundreds of dollars per pound. For us, glucaric acid is that specialty chemical and then we will do commodity.”

Zymergen raised $300 million because synthetic biology is so hot right now

Categories: Business News

Decrypted: With more SolarWinds fallout, Biden picks his cybersecurity team

2021, January 22 - 3:00am

All change in the capital as the Biden administration takes charge, and thankfully without a hitch (or violence) after the attempted insurrection two weeks earlier.

In this week’s Decrypted, we look at the ongoing fallout from the SolarWinds breach and who the incoming president wants to lead the path to recovery. Plus, the news in brief.

THE BIG PICTURE Google says SolarWinds exposure “limited,” more breaches confirmed

The cyberattack against SolarWinds, an ongoing espionage campaign already blamed on Russia, claimed the U.S. Bureau of Labor Statistics as another federal victim this week. The attack also hit cybersecurity company Malwarebytes, the company’s chief executive confirmed. Marcin Kleczynski said in a blog post that attackers gained access to a “limited” number of internal company emails. It was the same attackers as SolarWinds but using a different intrusion route. It’s now the third security company known to have been targeted by the same Russian hackers after a successful intrusion at FireEye and an unsuccessful attempt at CrowdStrike.

Today, I disclosed publicly that @Malwarebytes had been targeted by the same nation state actor that attacked SolarWinds. This attack is much broader than SolarWinds and I expect more companies will come forward soon.

— Marcin Kleczynski (@mkleczynski) January 19, 2021

Categories: Business News

Bodyguard is a mobile app that hides toxic content on social platforms

2021, January 22 - 2:31am

If you’re somewhat famous on various social networks, chances are you are exposed to hate speech in your replies or in your comments. French startup Bodyguard recently launched its app and service in English so that it can hide toxic content from your eyes. It has been available in French for a few years and the company has attracted 50,000 users so far.

“We have developed a technology that detects hate speech on the internet with a 90% to 95% accuracy and only 2% of false positive,” founder and CEO Charles Cohen told me.

The company has started with a mobile app that anyone can use. After you download the app and connect the app with your favorite social networks, you choose the level of moderation. There are several categories, such as insults, body shaming, moral harassment, sexual harassment, racism and homophobia. You can select whether it’s a low priority or a top priority for each category.

After that, you don’t have to open the app again. Bodyguard scans replies and comments from its servers and makes a decision whether something is OK. For instance, it can hide comments, mute users, block users, etc. When you open Instagram or Twitter again, it’s like those hateful comments never existed.

The app currently supports Twitter, YouTube, Instagram and Twitch. Unfortunately, it can’t process content on Snapchat and TikTok due to API limitations.

Behind the scenes, most moderation services rely heavily on machine learning or keyword-based moderation. Bodyguard has chosen a different approach. It algorithmically cleans up a comment and tries to analyze the content of a comment contextually. It can determine whether a comment is offensive to you, to a third-party person, to a group of persons, etc.

More recently, the startup has launched a B2B product. Other companies can use a Bodyguard-powered API to moderate comments in real-time on their social platforms or in their own apps. The company charges its customers using a traditional software-as-a-service approach.

Facebook’s Oversight Board will review the decision to suspend Trump

Categories: Business News

Why you should add TechCrunch Early Stage 2021 to your must-attend list

2021, January 22 - 2:03am

As 2020 fades into the rearview mirror of history (huzzah!), it’s time to map out strategies to transform your early-stage startup dream into reality. If there’s one thing every early founder needs it’s information, and you’ll find it in abundance at TechCrunch Early Stage 2021.

Introduced last year — and one of the most popular events in TechCrunch history — TC Early Stage provides new startup founders (pre-seed through Series A) access to top experts to help them develop and strengthen their core entrepreneurial skills.

We’re talking everything from legal issues, fundraising, marketing, growth, product-market fit, tech stack, recruiting, pitch deck teardowns and more. Think of it as a condensed accelerator experience packed with workshops and highly interactive Q&As.

This conference was so popular that we’re hosting two virtual TC Early Stage events this year. Early Stage part one (April 1-2) and Early Stage part two (July 8-9). Even better, each event stands on its own merit with different topics, content, speakers and perspectives. Attend both to double your knowledge, double your networking, double your opportunities.

We might be biased, but we’re not the only people raving about TC Early Stage. Listen to what these early-stage founders said about TC Early Stage 2020:

“I recommend going to Early Stage. The virtual aspect helps in terms of scheduling, it offers community-building through networking and it gives early-stage founders a framework for navigating the startup ecosystem. This is the stage where founders need more support, especially if they haven’t done this before.” — Ashley Barrington, founder, MarketPearl.

“Sequoia Capital’s session, Start with Your Customer, looked at the benefits of storytelling and creating customer personas. I took the idea to my team, we identified seven different user types for our product, and we’ve implemented storytelling to help onboard new customers. That one session alone has transformed my business.” — Chloe Leaaetoa, founder, Socicraft.

“Early Stage 2020 provided a rich, bootcamp experience with premier founders, VCs and startup community experts. If you’re beginning to build a startup, it’s an efficient way to advance your knowledge across key startup topics.” — Katia Paramonova, founder and CEO of Centrly.

Here’s the skinny on passes. Founder passes for either April or July event cost $199. Investors and startup enthusiasts can purchase Innovator passes for $299. Note: Early-bird pricing ends Feb 27 and May 1, respectively.

Pro Tip: Save more when you buy a dual-event pass. Attend both Early Stage events for just $299 (Founder) or $349 (Innovator). Remember: The events feature different speakers, topics and content.

Don’t miss this unparalleled, interactive opportunity to learn best startup practices from leading experts, investors and successful founders. Mark your calendar and buy your Early Stage passes today!

Is your company interested in sponsoring or exhibiting at Early Stage 2021 — Operations & Fundraising? Contact our sponsorship sales team by filling out this form.

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Categories: Business News

Walking Duck is a digital news startup trying to find middle ground in US politics

2021, January 22 - 1:56am

Can any news organization bridge the separate realities that the left and right seem to occupy in U.S. politics? A new startup with the odd-yet-memorable name Walking Duck is going to try.

Walking Duck (an inversion of a “lame duck” president — a phrasing that has earned criticism as ableist — and a reference to the duck test) was founded by journalist Mark Halperin, as well as Paul and Audra Wilke, who are also backing it with their PR firm Upright Position Communications.

While the startup is producing a variety of content and events, including virtual town halls, there are three main pieces to the Walking Duck strategy at launch — the Walking Duck website, which aggregates news from other publications, usually focused on a few key stories for the day, with additional commentary; plus Halperin’s newsletter Wide World of News and his Newsmax show Mark Halperin’s Focus Group.

Halperin also serves as Walking Duck’s managing editor, and he said that he and the Wilkes have a shared vision for a publication that’s different from “the partisan media,” where “everything is cast through the lens of the red tribe or the blue tribe.”

And yes, aggregation is a key part of that vision, not just allowing the startup to cover national news with a relatively small team of five (for now), but also to offer different perspectives. In fact, Halperin argued that any news organization that’s being honest will admit that it’s doing aggregation.

Image Credits: Walking Duck

“Even if you have a big scoop about something, people want to know: What’s the reaction to the scoop, how is that scoop being treated elsewhere?” he said. “Aggregation can be smarter and faster and less ideological than exists in a lot of places. You can aggregate for everyone and elevate smart over angry.”

In my conversation with Halperin and Paul Wilke (Walking Duck’s CEO), I suggested that the “both sides” approach (which other new publications are also touting) has its limitations: When you’ve got a (now former) president seeking to undermine an election that he lost, and when his supporters violently storm the Capitol, simply presenting two sides of an argument as if they were equally valid seems insufficient.

“We don’t always try to show both sides, accuracy matters,” Wilke said. Similarly, Halperin said that it’s less about making sure there’s a 50-50 balance, and more about avoiding the limitations of a partisan lens. As an example, he argued that liberal outlets demonized former FBI director James Comey after his memo may have cost Hillary Clinton the 2016 election, then reversed course and valorized him after President Trump fired him.

“I think he should be covered on the individual incidents in a way that’s consistent,” Halperin said.

All of that might sound incongruous from a journalist with a show on Newsmax — which, far from being a center-of-the-road network, has attracted an audience by being more pro-Trump and more willing to spread election misinformation than Fox News. But Halperin and Wilke said that by creating a show that brings four Trump voters and four Biden voters (not professional pundits) from across the country together over Zoom and attempting to find common ground, they’re exposing conservative viewers to new points of view — and they’d be happy to do the same for liberals if the show was on MSNBC.

“Just go to any cable news network and try to find a show that’s talking to Trump voters and talking to Biden voters,” Halperin said. “We’re doing it every week. That’s the essence of trying to grapple with how do these two groups talk to each other.”

Halperin does have an existing relationship with Newsmax, which came after he lost his contracts at more mainstream networks following numerous accusations of sexual harassment.

When I brought up the accusations in my initial email correspondence with Wilke, he said, “[Mark’s] history is firmly in his past. He’s expressed remorse, been through counseling and has publicly (and privately) apologized to his victims, and they have … accepted his apologies. Additionally, Upright (my other company) is a PR firm that has more women than men, and we’re bringing some of them over to Walking Duck, and we discussed this issue with them and made sure they felt comfortable and knew that a safe workplace was a priority.”

I also broached the topic on our call, and Halperin said, “I recognize the expectations that people have. I’ve just continued to do my best to be a good colleague and a good professional. If people are willing to let me work, I appreciate the opportunities. But it’s up to them.”

Three views on the future of media startups

Categories: Business News

AI-powered transcription service Otter.ai can now record from Google Meet

2021, January 22 - 1:56am

Otter.ai, the A.I.-powered voice transcription service that already integrates with Zoom for recording online meetings and webinars, is today bringing its service to Google Meet’s over 100 million users. However, in this case, Otter.ai will provide its live, interactive transcripts and video captions by way of a Chrome web browser extension.

Once installed, a “Live Notes” panel will launch directly in the Chrome web browser during Google Meet calls, where it appears on the side of the Google Meet interface. The panel can be moved around and scrolled through as the meeting is underway.

Here, users can view the live transcript of the online meeting, as it occurs. They can also adjust the text size, then save and share the audio transcripts when the meeting has wrapped.

The company says the feature helps businesses cut down on miscommunication, particularly for non-native English speakers who may have trouble understanding the spoken word. It also offers a more accessible way for engaging with live meeting content.

And because the transcriptions can be shared after the fact, people who missed the meeting can still be looped in to catch up — an increasing need in the remote-work era of the pandemic, where home and parenting responsibilities can often distract users from their daily tasks.

The transcripts themselves can also be edited after the fact by adding images and highlights, and they can be searched by keywords, as with any Otter.ai transcription.

In addition, users can access the company’s Live Captions feature that supports custom vocabulary. Otter points out that there are other live captioning options already available for Google Meet, but the difference here is that Otter’s system creates a collaborative transcript when the meeting ends. Other systems, meanwhile, tend to just offer live captions during the meeting itself.

To use the new feature, Chrome users will need to install the Otter.ai Chrome extension from the Chrome Web Store, then sign in to their Otter.ai account. The new feature is available to all Otter.ai customers, including those on Basic, Pro and Business plans.

Otter in the past leveraged its earlier Zoom integration to push more users from free plans to paid tiers and will likely do the same with the new Google Meet support. The company’s paid plans offer the ability to record more minutes per month and include a range of additional features like the ability to import audio and video for transcription, a variety of export options, advanced search features, Dropbox sync, added security measures and more.

The company has seen its business increase due to the COVID-19 pandemic and the accompanying shift to online meetings. Last April, Otter said it had transcribed over 25 million meetings, and its revenue run rate had doubled compared with the end of 2019. In 2020, Otter.ai’s revenue was up 8x over last year, the company said. It has now transcribed over 100 million meetings and 300 billion+ minutes to date.

Otter.ai’s newest feature offers live, interactive transcripts of your Zoom meetings

Categories: Business News

8 VCs agree: Behavioral support and remote visits make digital health a strong bet for 2021

2021, January 22 - 1:30am

In TechCrunch investor surveys of years past, we’ve seen a big focus on fixing what’s broken or bringing the infrastructure into the modern era. But the world has dramatically changed since the beginning of the COVID-19 pandemic.

More of us saw our doctor on video than ever before in 2020 — reaching a 300-fold increase in telehealth visits. It was the year healthcare finally moved fully into the digital space with data management solutions as well. And, though those digital visits have fallen slightly from the beginning of the pandemic, it doesn’t look like people want to go back to the way things were in the foreseeable future.

Now we’re onto the next phase where more people will be getting vaccinated, more of us will likely start to return to the office towards the end of the year, and there’s now a slew of new tech solutions to the issues 2020 presented. If you are investment-minded, as so many of our TechCrunch readers are, you will likely see a lot of potential in this space in 2021.

So we asked some of our favorite health tech VCs from The TechCrunch List where we are headed in the next year, what they’re most excited about and where they might be investing their dollars next. We asked each of them the same six questions, and each provided similar thoughts, but different approaches. Their responses have been edited for space and clarity:

Bryan Roberts and Bob Kocker, partners, Venrock

Do you see more consumer demand for digital services? How does this trend affect what you are looking to invest in for 2021?
The pandemic certainly intensified pressure on the legacy, fee-for-service, activity-based healthcare system since volumes dried up for several months. People were scared to go to the doctor and doctors who are only paid when they see patients saw their revenue evaporate overnight. Telemedicine offered some revenue salvation fee-for-service healthcare but it was impossible to do as many tests and procedures so they have by and large, since summer 2020, reverted back to in-person as much as possible for increased revenue capture.

On the other hand, value-based providers were, in the short term, more insulated as they are paid based on typical levels of utilization. Not surprisingly, COVID-19 has motivated more providers to embrace value-based care because it offers much more stable cash flows and does not depend on the tyranny of cramming more patients into the daily schedule.

With value-based care, the incentives are strongly aligned for more, and continued, tech-enabled virtual care since it is more profitable for those clinicians when they detect diseases earlier and take action to avoid hospitalizations. The beauty of virtual and tech-enabled care is that it can be delivered more frequently and group visits can be facilitated easily, with multiple specialists or people supporting a patient, to improve coordination and speed of action. Also, much more data can be brought to bear to make these interactions higher quality. Imagine how much better blood pressure is controlled when a doctor has not just the in-office reading but also all of the daily readings, or diabetic control when it is informed by all the data from a patient’s continuous glucose monitor, or post-surgical care when a surgeon can review daily pictures of the surgical site.

The enormity of the opportunity to make healthcare more productive and recession-proof growth from our aging population will attract more entrepreneurs and more capital to healthcare IT.

Digital health funding broke records in 2020, with investors pouring in over $10 billion in the first three quarters and a jump in deals overall, compared to the previous year. Do you see that trend continuing as we move back to offices and out of this pandemic or do you think this was a blip due to special circumstances?

We think growth in healthcare IT has been and will continue to be, driven by (1) better businesses and business models via aligned economic incentives and information and (2) some big wins in the space via Teladoc-Livongo merger and JD Health IPO — so both sides of the supply (great businesses) — demand (investor interest) equation. For payers, many healthcare providers and patients, it is in their interest to adopt more cost-effective approaches for care delivery and to access new data to derive insights and remove arbitrages. These prerequisites are strongly aligned in favor of more healthcare IT company formation, rapid growth and successful exits.

While people may spend more time receiving in-person HC in the future than today, we think the rapid adoption of virtual care in 2020 coupled with ever-stronger incentives for the healthcare system to emulate consumer technology usability and the never-ending imperative of improving affordability, will continue to drive demand for startups. We also think that downward cost pressures will drive demand for technology to replace fax-machine-era, labor-first administrative processes too.

What do you think are the biggest trends to look out for in the digital healthcare industry this next year, given we are likely toward the end of the year to see more workers return to the office and everyone resuming activities as they did before this pandemic hit?

We think that telehealth will become the “Intel Inside” for many of the full stack healthcare IT businesses — Medicare Advantage payers, navigation companies, virtual pharmacies, virtual primary care practices — and that patients will continue to embrace telehealth. As a result, payers will increasingly redesign how insurance benefits work to encourage every patient to start with a telehealth visit every time. In many cases, telehealth will be able to fully resolve the problem and if not, guide the patient, along with the relevant data, to the best next step in care. This will improve responsiveness and reduce costs. We do think that brick-and-mortar players will lag behind since they continue to have strong incentives for in-person care and procedures to cover their large fixed costs.

COVID-19 has also made inescapable the inadequacy of behavioral healthcare in America. We have observed this firsthand through our investment in Lyra Health, which experienced dramatic growth in 2020. We think greater access to behavioral health, better coordination of behavioral health and primary care, better use of medications and tech-enabled care for more complex behavioral health conditions are all large opportunities.

We also foresee virtual care growing in more specialty care areas as patients demand more convenient ways to access specialist expertise and value-based primary care doctors desire more rapid and cost-effective ways to co-manage patients.

How will the Biden administration possibly affect your funding strategy in the digital health field now that there’s a change of the guard?

Economic incentives to lower healthcare cost growth and the desire to use information and data to find arbitrages and insights are as aligned as ever. Remember, the law driving the adoption of new payment models is MACRA, which passed the Senate in a bipartisan 92-8 vote in 2015. This implies an uninterrupted effort to drive the adoption of value-based care in Medicare, Medicare Advantage and Medicaid. A Biden administration will also continue efforts to create more interoperable data systems and support telehealth adoption.

A Biden administration also reduces uncertainty around the permanence of the Affordable Care Act (ACA). They instead will focus their efforts on expanding coverage through enhanced subsidies to buy insurance, more marketing of ACA plans, greater support for e-broker enrollment and strong incentives for states to expand Medicaid. And we do not think Medicare for All will be seriously considered by a ~50/50 Senate, although it will likely be spoken about periodically and loudly by the far left.

What’s the biggest category in your mind for digital health this next year? Why is that?

“Technology-enabled, virtual-everything” as the initial journey in healthcare, until you need to visit a facility because in-person is necessary. In 2020, we witnessed about a decade of user adoption compressed into six months as COVID-19 made it scary, or even impossible, to access in-person healthcare. Nearly every clinician in America, and at about half of the population, conducted a virtual healthcare visit in 2020. What happened? Patients liked it. Clinicians found virtual visits useful. And going forward we think that most care will incorporate aspects of virtual care, asynchronous communication and in-person encounters only when a procedure is needed. As importantly, payers found these approaches to be more cost-effective since care was delivered more rapidly and with only the most necessary diagnostics tests ordered.

Finally, are there any rising startups in your portfolio we should keep our eyes on at TechCrunch? 

We have two portfolio companies that may be very compelling candidates:  Suki and NewCo Health.

Suki has created a virtual medical assistant that acts as a voice user interface for electronic health records, enabling a doctor to write their clinical notes, enter orders, view information and exchange data with other providers dramatically and more efficiently. They have launched primary care and specialist doctors across dozens of health systems in 2020.

NewCo Health is a startup trying to democratize access to world-class cancer outcomes. Starting initially in Asia, they are tech-enabling the diagnosis, treatment planning and care management processes for cancer patients, connecting expert clinicians to every cancer case.

Categories: Business News

Hot IPOs hang onto gains as investors keep betting on tech

2021, January 22 - 12:48am

This morning, while checking the latest price for shares of recent IPO Poshmark, I noticed that they were down from their first-day results. The company’s pricing was more than strong, and its first trading results were nearly comical.

After setting a $35 to $39 per-share IPO price range, Poshmark sold shares in its IPO at $42 apiece. Then it opened at $97.50. Such was the exuberance of the stock market regarding the used goods marketplace’s debut.

But today it’s worth a more modest $76.30 — for this piece we’re using all Yahoo Finance data, and all current prices are those from yesterday’s close ahead of the start of today’s trading — which sparked a question: How many recent tech IPOs are also down from their opening price?

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

So The Exchange, ever at your service, raced around to collect the data. And what did we find? Most hot tech IPOs have held onto their gains, and many have actually run up the score in the ensuing weeks.

Lemonade is a great example. It first targeted a $23 to $26 per-share IPO price. That rose to $26 to $28 per share, then it priced at $29 per share. It opened at $50.06 per share, closing the day worth $69.41. 

And today? A single Lemonade share will set you back $145.21. The company is now worth $8.22 billion, despite only posting Q3 revenues of $17.8 million, a decline from the year-ago period (for more on why that is, and why it isn’t as bad as you might initially think, read this.)

Analysts anticipate that Lemonade will post revenues of $18.91 million in Q4 2020, again via Yahoo Finance, putting the company on an annualized run rate of 109x. For a business running with net margins of -173.6% in its most recent quarter. And that’s after Lemonade announced a large share sale!

All this is to say that the fiery optimism fueling dazzling IPO debuts has the potential to keep pushing them higher. Which you can view as troubling, if you are a boring index funder like myself; enticing, if you are a founder looking to go public in the near-future; and potentially irksome if you are a VC annoyed when upside leaks to parties other than yourself.

This brings us to our data set. Below, I’ve collated a host of recent IPOs, their opens and their current prices. Only one has shed value.

And then we reexamined eight 2020 offerings that you will recall so we could run the same exercise. The results were not what I expected and indicate a stock market — let alone an IPO market — sufficiently inflated to warrant the whispered moniker of bubble.

Let’s have some fun.

Up, and then up some more
Categories: Business News

South African startup Aerobotics raises $17M to scale its AI-for-agriculture platform

2021, January 22 - 12:43am

As the global agricultural industry stretches to meet expected population growth and food demand, and food security becomes more of a pressing issue with global warming, a startup out of South Africa is using artificial intelligence to help farmers manage their farms, trees and fruits.

Aerobotics, a South African startup that provides intelligent tools to the world’s agriculture industry, has raised $17 million in an oversubscribed Series B round.

South African consumer internet giant Naspers led the round through its investment arm, Naspers Foundry, investing $5.6 million, according to Aerobotics. Cathay AfricInvest Innovation, FMO: Entrepreneurial Development Bank and Platform Investment Partners also participated.

Founded in 2014 by James Paterson and Benji Meltzer, Aerobotics is currently focused on building tools for fruit and tree farmers. Using artificial intelligence, drones and other robotics, its technology helps track and assess the health of these crops, including identifying when trees are sick, tracking pests and diseases, and analytics for better yield management. 

The company has progressed its technology and provides to farmers independent and reliable yield estimations and harvest schedules by collecting and processing both tree and fruit imagery from citrus growers early in the season. In turn, farmers can prepare their stock, predict demand and ensure their customers have the best quality of produce.

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Aerobotics has experienced record growth in the last few years. For one, it claims to have the largest proprietary data set of trees and citrus fruit in the world, having processed 81 million trees and more than a million citrus fruit.

The seven-year-old startup is based in Cape Town, South Africa. At a time when many of the startups out of the African continent have focused their attention primarily on identifying and fixing challenges at home, Aerobotics has found a lot of traction for its services abroad, too. It has offices in the U.S., Australia and Portugal — like Africa, home to other major, global agricultural economies — and operates in 18 countries across Africa, the Americas, Europe and Australia. 

Image Credits: Aerobotics

Within that, the U.S. is the company’s primary market, and Aerobotics says it has two provisional patents pending in the country, one for systems and methods for estimating tree age and another for systems and methods for predicting yield.  

The company said it plans to use this Series B investment to continue developing more technology and product delivery, both for the U.S. and other markets. 

“We’re committed to providing intelligent tools to optimize automation, minimize inputs and maximize production. We look forward to further co-developing our products with the agricultural industry leaders,” said Paterson, the CEO in a statement.

Once heralded as a frontier for technology centuries ago, the agriculture industry has stalled in that aspect for a long while. However, agritech companies like Aerobotics that support climate-smart agriculture and help farmers have sprung forth trying to take the industry back to its past glory. Investors have taken notice and over the past five years, investments have flowed with breathtaking pace. 

For Aerobotics, it raised $600,000 from 4Di Capital and Savannah Fund as part of its seed round in September 2017. The company then raised a further $4 million in Series A funding in February 2019, led by Nedbank Capital and Paper Plane Ventures.

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Naspers Foundry, the lead investor in this Series B round, was launched by Naspers in 2019 as a 1.4 billion rand (~$100 million) fund for tech startups in South Africa. 

Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, said of the investment, “Food security is of paramount importance in South Africa and the Aerobotics platform provides a positive contribution towards helping to sustain it. This type of tech innovation addresses societal challenges and is exactly the type of early-stage company that Naspers Foundry looks to back.”

Besides Aerobotics, Naspers Foundry has invested in online cleaning service SweepSouth, and food service platform Food Supply Network.

Categories: Business News

PlayVS acquires GameSeta to accelerate expansion into Canada

2021, January 22 - 12:35am

PlayVS, the esports company bringing organized leagues to high schools and colleges, is today announcing its first acquisition. The startup, which has raised more than $100 million, has acquired GameSeta, a Vancouver-based startup that is also looking to provide infrastructure for high school esports teams. The terms of the deal were not disclosed.

The deal will accelerate PlayVS during its growth phase and help it expand into the Canadian market. GameSeta has a partnership with BC School Sports, the governing body for organized school sports in British Columbia, which will transfer to PlayVS.

PlayVS has a similar (and exclusive) partnership with NFHS, the high school equivalent of the NCAA, here in the States. The company has also sprinted into the college market, launching a college product as part of a partnership between PlayVS and Epic Games. Since launching a college offering, total player growth is up 460 percent. The company has also launched a new $900,000 scholarship pool for high schools and colleges.

Founded by Delane Parnell in the beginning of 2018, PlayVS has grown rapidly, brokering partnerships with school sports organizations and publishers alike. In fact, PlayVS title offerings include League of Legends, Rocket League, SMITE, Overwatch, Fortnite, FIFA 21 and Madden NFL 21. PlayVS has served more than 19,000 high schools across all 50 states. It boasts more than 230,000 registered users.

PlayVS acts as a portal for schools to create esports teams and compete against other schools. Traditional sports like basketball and baseball have established systems (and governing organizations) to organize league schedules, playoffs, referees and more. PlayVS has positioned itself as that governing body and organizational system for esports.

Not only does PlayVS facilitate these leagues, but it also offers colleges and esports organizations a much-needed recruitment tool, letting them view games and track metrics of individual players.

As part of the acquisition, GameSeta’s Tawanda Masawi and Rana Taj will join the PlayVS team and lead Canadian operations.

Alongside geographic expansion, PlayVS is also looking to expand beyond high schools and colleges with plans to launch a direct to consumer product.

“We’re going to launch some direct consumer products directly in partnership with publishers to open up the PlayVS ecosystem so people can organize and join competitions, whether they are associated with high schools or otherwise,” said Parnell. “We’re really excited about that. The markets in general have just shown great appetite for gaming as a form of entertainment and content. Obviously, players are really excited about eSports as a form of content and a way to engage in competition and so we want to make sure that PlayVS is a place where people compete more broadly.”

Categories: Business News

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