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Cashify raises $15 million for its second-hand smartphone business in India

2021, March 4 - 7:26am

Tens of millions of people each year purchase a second-hand smartphone in India, the world’s second-largest market. Phone makers and giant online sellers such as Amazon and Flipkart are aware of it, but it’s too much of a hassle for them to inspect, repair and resell used phones. But these firms also know that customers are more likely to buy a smartphone if they are offered the ability to trade-in their existing handsets.

A startup that is helping these firms tackle this challenge said on Thursday it has raised $15 million in a new financing round. New York-based Olympus Capital Asia made the investment through Asia Environmental Partners, a fund dedicated to the environmental sector. The five-year-old startup, which counts Blume Ventures among its early investors, has raised $42 million to date.

Cashify operates an eponymous platform — both online and physical stores and kiosks — for users to sell and buy used smartphones, tablets, smartwatches, laptops, desktops and gaming consoles. But 90% of its business today surrounds the smartphone category, explained Mandeep Manocha, founder and chief executive of Cashify, in an interview with TechCrunch.

“For consumers, our proposition is that we make it easy for you to sell your devices. You come to our site or app, answer questions to objectively evaluate the condition of your device, and we give you an estimate of how much your gadget is worth,” he said. “If you like the price, we pick it up from your doorstep and give you instant cash.”

A few years ago, I wrote about the struggle e-commerce firms face globally in handling returned items. There are many liability challenges — such as having to ensure that the innards in a returned smartphone haven’t been tempered with — as well as overhead costs in reversing an order.

Manocha said that phone makers and e-commerce firms have found better ways to handle returned items in recent years, but they still lose a significant amount of money on them. These challenges have created a big opportunity for startups such as Cashify.

In fact, Cashify says it’s the market leader in its category in India. The startup has partnerships with “nearly every OEM,” including Apple, Samsung, OnePlus, Oppo, Xiaomi, Vivo and HP. “If you walk into an Apple store today, they use our platform.” For consumers in India, if they opted for the trade-in program, Apple.com also uses Cashify’s trading platform, he said.

The startup also works with top e-commerce firms in India — Amazon, Flipkart and Paytm Mall. The firms use Cashify’s trading and exchange software, and also rely on the startup for liquidation of devices. The startup then repairs these gadgets and sells the refurbished units to customers.

“Essentially, whether you come directly to us, or go to popular e-commerce firms or phone OEMs, we are handling the majority of the trading,” he said. Even if a customer trades in the device to OEMs, or e-commerce firms, these companies sell the device to players like Cashify, which serves over 2 million customers in more than 1,500 cities.

The startup plans to deploy part of the fresh capital to expand its presence in the offline market. Manocha said Cashify currently has dozens of offline stores and kiosks at shopping malls across the country and it has already proven immensely effective in brand awareness among customers.

The startup also plans to expand outside of India, hire more talent and invest more in getting the word out about its offerings. Manocha said the team is also working on expanding its expertise to more hardware categories such as cameras.

“The management team at Cashify has an excellent track record in building a strong consumer-facing franchise and building relationships with OEMs, e-commerce companies and electronic product retailers to be present across all touch points for the consumer,” said Pankaj Ghai, managing director of Asia Environmental Partners, in a statement.

India’s Cashify raises $12M for its second-hand smartphone business

Categories: Business News

Dear Sophie: Can you demystify the H-1B process and E-3 premium processing?

2021, March 4 - 4:22am
Sophie Alcorn Contributor Share on Twitter Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives. More posts by this contributor

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Dear Sophie:

Our startup is planning on registering an international student employee in this year’s H-1B lottery. This will be our first H-1B.

Can you help demystify the H-1B process and provide any tips? We also want to hire an Australian and transfer their E-3. How quickly can this be done?

— Plucky in Pleasanton

Dear Plucky:

Thanks for your timely questions! There’s some great news for Australian citizens currently in the U.S. and looking for job transfers, amendments and extensions. Premium processing is now available for the E-3 working visa category! This means that transfers, changes of status, and extensions of status for Australians in the U.S. seeking an E-3 can now obtain adjudications from USCIS in as little as 15 days, making it much easier to hire an Australian who is currently in the U.S. for a new role. Go for it!

On the topic of H-1Bs, the registration period for this year’s H-1B lottery will open at 9 a.m. PST on March 9 and will close at 9 a.m. on March 25. Startups need to make sure they’re registering anybody they want to sponsor during this window. Take a listen to my recent podcast on H-1B Lottery Planning, Part 1 and Part 2, for a general explanation of how this year’s process will work and how best to prepare.

Planning is key for implementing a successful immigration strategy. As always, I suggest you consult with an experienced immigration attorney ASAP to help get organized for registering your H-1B candidate for the March lottery and doing as much prep work as possible so that you can put together a strong H-1B petition in the event your candidate is selected in the lottery.

An attorney will also be up to date on all the recent changes to immigration policy, such as USCIS rescinding a Trump-era policy that went into effect in 2017 that effectively made computer programming positions ineligible for an H-1B visa. You will also want to discuss backup options for the international student employee if they are not selected in this year’s lottery.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

Registration and lottery process

Recently, U.S. Citizenship and Immigration Services (USCIS) announced it will delay until next year the plan to shift from a random H-1B lottery to a wage-based one that would have selected registrants who would be paid the highest wage for their position and location. In January, the previous administration had finalized the rule implementing the wage-based lottery. The latest announcement ended weeks of speculation whether USCIS under the Biden administration would retain a wage-based H-1B allocation process, which falls in line with President Biden’s presidential campaign platform.

The random H-1B lottery in March means that H-1B candidates with the same education level who will be paid more will have no greater advantage than those being paid less. However, next year that may not be the case.

Regardless of whether there’s a random or wage-based lottery, individuals with a master’s or higher degree from a U.S. university will continue to have the best chance of being selected in the H-1B lottery. The annual cap on H-1Bs remains at 85,000 and of those, 20,000 H-1Bs are reserved for individuals with a master’s degree or higher from a U.S. university. USCIS randomly selects enough registered candidates from the entire pool of registrants to reach the 65,000 regular H-1B cap first. Then it randomly selects another 20,000 registered candidates holding a U.S. master’s degree or higher, in what is called the advanced-degree cap exemption. Therefore, individuals with a U.S. advanced degree have two chances to be selected. To be eligible, your international student employee must have earned their advanced degree from an eligible and accredited U.S. institution by the time the H-1B petition is filed.

After the online registration period closes on March 25, USCIS will conduct a random computerized selection of registrations and will notify those selected by March 31. A completed H-1B petition must be filed within 90 days of being notified that the H-1B candidate was selected in the lottery, which means the filing deadline will be June 30.

In order to register your candidate for the H-1B lottery, your company will need to set up an online USCIS account if it does not already have one. This can be done at any time between now and the end of the registration period. Your attorney can help you with this and the online registration process.

For the online registration process, your company will have to provide the following information:

  • Full legal name of the candidate.
  • Gender.
  • Date of birth.
  • Country of birth.
  • Country of citizenship.
  • Passport number.
  • If the candidate is eligible for inclusion in the U.S. advanced-degree cap.

In addition, your company will have to pay the $10 registration fee, which can be submitted by entering a credit card, debit card, checking or savings account directly into the H-1B registration portal.

Tips for preparing

Generally, your startup and your H-1B candidate should start assembling documents you will need to submit. Your startup will need to get its tax identification number verified by the U.S. Department of Labor to prove that your startup is capable of sponsoring an individual for an H-1B. This needs to be done before your company can submit a Labor Condition Application (LCA), which is also sent to the Labor Department. An approved LCA must be submitted with your H-1B petition to USCIS. In addition to your startup’s tax ID, it will need the following:

  • If your startup formed recently, articles of incorporation, pitch deck, business plan, term sheet, cap tables.
  • Documentation showing your company can pay the prevailing wage for the H-1B candidate’s position and location: bank statements, tax returns, other financial documents.
  • Documents to prove your company is operating within the normal course of business, including marketing materials, company reports, screenshots of the company website.
  • Job offer letter to the H-1B candidate, including job title, detailed duties, benefits, salary and start date.
  • Minimum requirements for the position.
Your H-1B candidate will need:
  • An up-to-date resume.
  • Originals of diplomas, certificates, and transcripts (also scanned copies).
  • Past immigration documents, such as Form I-20 (certificate of eligibility for F-1 student status) or Form DS-2019 (certificate of eligibility for J-1 status.
  • Translations of any documents not in English along with a certified translation document.

For tips for filing the H-1B petition, listen to my podcast episodes on “Your Startup’s First H-1B” and “What Makes a Strong H-1B Petition.” Your attorney will be able to make the case that your H-1B candidate and the position your startup is offering meet the requirements of the H-1B specialty occupation visa.

As of now, premium processing for H-1B petitions remains available. Currently, USCIS is severely backlogged in all case types, so I often suggest using it, depending on the H-1B candidate’s start date and current geographic location. With premium processing, which is an optional service for a $2,500 fee, USCIS guarantees it will make a decision on a case within 15 days. If USCIS approves your H-1B petition, the earliest the international student employee can begin working under the H-1B visa is Oct. 1, 2022, which is the first day of the federal government’s new fiscal year.

Fingers crossed for you in this year’s H-1B lottery

All the best,

Sophie

Have a question for Sophie? Ask it here. We reserve the right to edit your submission for clarity and/or space.

The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer. You can contact Sophie directly at Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major platforms. If you’d like to be a guest, she’s accepting applications!

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Categories: Business News

Bottomless closes $4.5M Series A to scale its subscription coffee business

2021, March 4 - 4:10am

As a devoted coffee drinker I was enthused by the idea of Bottomless. The Y Combinator-backed startup sends its users coffee as they run low so that they never run out of the Magic Juice of Life. What could be better?

Because life is somewhat funny, after signing up for its service the company reached out to share that it had raised a Series A. So I got on the phone with Liana Herrera, the company’s co-founder, to chat about the startup, which is part coffee-sourcing engine, part subscription/e-commerce play and part hardware effort.

So before we talk about its Series A, let’s work better to understand what Bottomless is building, and how it works.

What’s Bottomless?

Born from its founders’ issues ordering the right amount of Soylent when they actually needed it, and wondering why there wasn’t a better way to subscribe to goods consumed on a regular basis, Herrera uncovered the idea for Bottomless.

Today the product works by letting users pick the type of coffee they are interested in, be it caffeine level, price and the like. The company then provides customers with a small digital scale that they connect to their home internet. And then as users consume coffee that Bottomless sends them, placing the bag on the hardware in between uses, the scale notes how much is left and orders more before they run out.

A Bottomless scale, via the company as my kitchen lighting is bad.

You can set the sensitivity of the scale, asking it to either be ambitious in keeping you from running out of beans or ground coffee, or more relaxed. As I write to you today, I think that my third bag of decaf has arrived. It’s a neat system.

And from a business perspective, the Bottomless model has plusses. I honestly do not recall the price range of coffee that I picked, and do not know how much I am actually paying Bottomless at the moment. But I do know that having different types of coffee arrive at the house as I run low is pretty damn cool.

To make that happen, however, is not easy. The startup’s business is a little complex. Before and even after Bottomless went through Y Combinator back in 2019, the company hand-built its coffee-weighing scales. Herrera told TechCrunch that the old Silicon Valley saw that hardware is hard is in fact an understatement. After all the soldering she described during an interview, I believe her.

Still, after finishing the accelerator program the company managed to grow in 2019 by what Herrera said was around 10x. That customer expansion allowed the company to order bulk hardware from China in early 2020. After its first production run finished — a few thousand units — COVID-19 shut down that country’s supply chain. Happily for the startup, by the time COVID-19 had taken over America, the Chinese economy opened up and production could begin again.

Per the company, Bottomless scaled another 5-7x in 2020. An October 2020 CNN piece notes that the company had around 750 customers in late 2019, and some 6,000 by the time of publication. Herrera wants to massively expand that number, telling TechCrunch that she’d like to grow by 10x again this year, and that 5x expansion was the lower-end of her expectations.

This unique vacuum-extraction coffee maker is Colombia’s own

Powering that growth are a host of coffee companies that Bottomless works with. Those companies handle roasting the beans and sending them to different Bottomless customers. So that no one reaches a zero-coffee state. And dies. Or whatever happens when one actually runs out of coffee.

The startup told TechCrunch that there are some 500 roasters on their wait list, implying that it will have the capacity to take on more customers this year.

Despite all the growth, the company still has some edges to refine. Setting up Wi-Fi on my scale wasn’t super-simple, for example. Herrera did note that her firm has a new scale coming out in the next three months. That could lower the difficulty barrier for new customers. Still, with 6,000 customers last October ordering three to four bags of coffee monthly, per Herrera’s estimate, the company had reached a comfortable seven-figure GMV run-rate before 2021 began.

For coffee roasters who may have seen their customer base slow during the pandemic, and consumers increasingly willing to dive into e-commerce, the company’s model could have long-term legs. Which brings us to the investors making that bet.

The round

Bottomless raised a $4.5 million Series A in January of 2021. It’s a smaller A than we tend to see in recent years, but Herrera said that her company has always been scrappy, which we take to mean that it has a history of being frugal. Patrick OShaughnessy led the round.

TechCrunch asked if the $4.5 million was a lot of money for the startup, as we didn’t have a clear picture at the time of its fundraising history. Herrera said that Bottomless has gotten to where it is today on just $2 million. So, the Series A is more than double all the money that the company as raised to date. It’s a lot of money, in other words.

Besides the new scale design, when asked about what the company intends to do with its funds, Herrera detailed the type of person she’s looking to hire — namely intellectually flexible folks who are informal, scrappy and very hack-y. More staff, in other words.

Let’s see how far Bottomless can get with its new check. Apparently I will be helping its KPIs for the foreseeable future as a customer.

The FrankOne is a simple and portable coffee brewing gadget

Categories: Business News

11 words and phrases to cut from your VC pitch deck

2021, March 4 - 3:34am
May Habib Contributor Share on Twitter May Habib is co-founder and CEO of Writer.com, an AI writing assistant for teams that helps everyone at a company write with the same style, terminology and brand voice. She graduated with high honors from Harvard, is a member of the World Economic Forum and is a Fellow of the Aspen Global Leadership Network.

You have just 170 seconds. Weeks or even months of working on your pitch deck could come down to the 170 seconds (on average) that investors spend looking at it.

“Investors see a lot of pitches,” VC and LinkedIn co-founder Reid Hoffman noted. “In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches … and ends up doing between zero and two deals.”

With all that pressure to make an impact quickly, founders spend an incredible amount of time on the design of their slides. Less consideration, however, is usually spent on the words on the slide. That’s a mistake, especially when you only have 170 seconds.

When not used intentionally, the words in your deck can be distracting or downright off-putting. We used what we know about language and healthy communication from the millions of documents we’ve processed at Writer to come up with 11 words and phrases to remove from your VC pitch deck:

Negative associations 1. “runway”

Pitching VCs is a balancing act: You want to position your idea in the best light, but also show that you’ve thought things through. However, volunteering certain types of information can have the opposite effect. Don’t write: I’m seeking $X in funding to provide Y months of runway. You certainly need to show how you’re going to use the funding you’re asking for, but you don’t want to frame things in terms of runway in a pitch deck. The word is associated with a looming cash-out date, which can put an investor in a negative state of mind.

This HappySignal slide is a solid example of keeping your messaging positive and using uplifting language.

2. “exit strategy”

Don’t write: Our exit strategy is… Yes, thinking through your business means knowing how you’ll handle worst-case and best-case scenarios. But putting exit strategy in your deck can only get investors thinking about the inherent risks. You want them focused on the opportunity. You need to know what to say when the topic comes up — just don’t volunteer the information on a slide.

Clichés 3. “just X percent”

A pitch deck is a tool to show VCs why your idea merits investment. Using clichés can work against that goal. Don’t write: If we could capture X percent of the market… It’s not only a cliché, it’s wishful thinking — not a plan. Keep the text on your slides grounded in relevant facts and figures. Other clichés to cut include: the Amazon of X, imagine a future, and moving Y to blockchain.

Absolutes
Categories: Business News

From the ashes of nearly a billion dollars, Ample resurrects Better Place’s battery swapping business model

2021, March 4 - 2:30am

A little over 13 years ago, Shai Agassi, a promising software executive who was in line to succeed the chief executive at SAP, then one of the world’s mightiest software companies, left the company he’d devoted the bulk of his professional career to and started a business called Better Place.

That startup promised to revolutionize the nascent electric vehicle market and make range anxiety a thing of the past. The company’s pitch? A network of automated battery swapping stations that would replace spent batteries with freshly charged ones.

Agassi’s company would go on to raise nearly $1 billion (back when that was considered a large sum of money) from some of the world’s top venture capital and growth equity firms. By 2013 it would be bankrupt and one of the many casualties of the first wave of cleantech investing.

Now serial entrepreneurs John de Souza and Khaled Hassounah are reviving the battery swapping business model with a startup called Ample and an approach that they say solves some of the problems that Better Place could never address at a time when the adoption of electric vehicles is creating a far larger addressable market.

In 2013, there were 220,000 electric vehicles on roads, according to data from Statista, a number which had grown to 4.8 million by 2019.

Ample has actually raised approximately $70 million from investors, including Shell Ventures, the Spanish energy company Repsol and the Moore Strategic Ventures, a venture firm that is the privately held investment firm of Louis M. Bacon, founder of the multibillion-dollar hedge fund, Moore Capital Management. That includes a $34 million investment first reported back in 2018, and a later round from investors including Japan’s energy and metals company, Eneos Holdings that closed recently.

“We had a lot of people that either said, I somehow was involved in that and was suffering from PTSD,” said de Souza, of the similarities between his business and Better Place. “The people who weren’t involved read up about it and then ran away.”

For Ample, the difference is in the modularization of the battery pack and how that changes the relationship with the automakers that would use the technology.

“The approach we’ve taken… is to modularize the battery and then we have an adapter plate that is the structural element of the battery that has the same shape of the battery, same bolt pattern and same software interface. Even though we provide the same battery system… it’s the same as replacing the tire,” said Hassounah, Ample’s co-founder and chief executive. “Effectively we’re giving them the plate. We don’t modify the car whatsoever. You either put a fixed battery system or an Ample battery plate. We’re able to work with the OEMS where you can make the battery swappable for the use cases where this makes a lot of sense. Without really changing the same vehicle.”

Ample’s currently working with five different OEMs and has validated its approach to battery swapping with nine different car models. One of those OEMs also brings back memories of Better Place.

It’s clear that the company has a deal with Nissan for the Leaf thanks to the other partnership that Ample has announced with Uber. Ample’s founders declined to comment on any OEM relationships.

It’s clear that Ample is working with Nissan because Nissan is the company that inked a deal with Uber earlier this year on zero-emission mobility. And Uber is the first company to use Ample’s robotic charging stations at a few locations in the Bay Area, the company said. This work with Nissan echoes Better Place’s one partnership with Renault, another arm of the automaker, which proved to be the biggest deal for the older, doomed, battery swapping startup.

Ample says it only takes weeks to set up one of its charging pods at a facility and that the company’s charging drivers on energy delivered per mile. “We achieve economics that are 10% to 20% cheaper than gas. We are profitable on day one,” said Hassounah.

Uber is the first step. Ample is focused on fleets first and is in talks with multiple, undisclosed municipalities to get their cars added to the system. So far, Ample has done thousands of swaps, according to Hassounah, with just Uber drivers alone.

The cars can also be charged at traditional charging facilities, Hassounah said, and the company’s billing system knows the split between the amount of energy it delivers versus another charging outlet, Hassounah said.

“So far, in the use cases that we have, for ridesharing it’s individual drivers who pay,” said de Souza. With the five fleets that Ample expects to deploy with later this year the company expects to have the fleet managers and owners pay for charging.

Some of the inspiration for Ample came from Hassounah’s earlier experience working at One Laptop per Child, where he was forced to rethink assumptions about how the laptops would be used, the founder said.

“Initially I worked on the keyboard display and then quickly realized the challenge was in the field and developed a framework for creating infrastructure,” Hassounah said.

The problem was the initial design of the system did not take into account lack of access to power for laptops at children’s homes. So the initiative developed a charging unit for swapping batteries. Children would use their laptops over the course of the day and take them home, and when they needed a fresh charge, they would swap out the batteries.

“There are fleets that need this exact solution,” said de Souza. But there are advantages for individual car owners as well, he said. “The experience for the owner of a vehicle is after time the battery degrades. With ours as we put new batteries in the car can go further and further over time.” 

Right now, OEMs are sending cars without batteries and Ample is just installing their charging system, said Hassounah, but as the number of vehicles using the system rises above 1,000, the company expects to send their plates to manufacturers, who can then have Ample install their own packs.

Currently, Ample only supports level one and level two charging, but won’t offer fast charging options for the car makers it works with — likely because that option would cannibalize the company’s business and potentially obviate the need for its swapping technology.

At issue is the time it takes to charge a car. Fast chargers still take between 20 and 30 minutes to charge up, but advances in technologies should drive that figure down. Even if fast charging ultimately becomes a better option, Ample’s founders say they view their business as an additive step to faster electric vehicle adoption.

“When you’re moving 1 billion cars, you need everything… We have so many cars we need to put on the road,” Hassounah said. “We think we need all solutions to solve the problem. As you think of fleet applications you need a solution that can match gas in charge and not speed. Fast charging is not available in mass. The challenge will not be can the battery be charged in five minutes. The cost of building chargers that can deliver that amount of power is prohibitive.”

Looking beyond charging, Ample sees opportunities in the grid power market as well, the two founders said.

“Time shift is built into our economics… that’s another way we can help,” said de Souza. “We use that as grid storage… we can do demand charge and now that the federal mandate is there to feed into the grid we can help stabilize the grid by feeding back energy. We don’t have a lot of stations to make a significant impact. As we scale up this year we will.”

Currently the company is operating at a storage capacity of tens of megawatts per hour, according to Hassounah.

“We can use the side storage to accelerate the development of swapping stations,” de Souza said. “You don’t have to invest an insane amount of money to put them in. We can finance the batteries in multiple ways as well as utilize other sources of financing.” 

Ample co-founders John de Souza and Khaled Hassounah. Image Credit: Ample

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Categories: Business News

After 200% ARR growth in 2020, CourseKey raises $9M to digitize trade schools

2021, March 4 - 1:32am

When the COVID-19 pandemic hit and forced educational institutions to go virtual, many were scrambling to develop online or blended curriculums.

That struggle was particularly challenging for trade schools, many of which were not designed to teach online and were mostly paper-driven. 

CourseKey, a San Diego-based trade school management SaaS startup, was in a unique position. Demand surged and its ARR grew by 200% in 2020. And now, the company has raised $9 million in a Series B led by SignalFire and with participation from existing backer Builders VC to help it continue its momentum. 

Founded in 2015 by Luke Sophinos and Fadee Kannah, CourseKey’s B2B platform is designed to work with organizations that teach some of our most essential workers — from automotive mechanics to electricians to plumbers to nurses, phlebotomists and dental assistants.

CourseKey founders Luke Sophinos (left) and Fadee Kannah (right)

The goal is to help those organizations boost revenue by improving student retention and graduation rates, helping them maintain regulatory compliance and generally streamline processes. 

“Things really took off last year when the coronavirus hit,” Sophinos said. “So many schools had to adopt a digital arsenal. We saw a massive acceleration trend that was already going to happen. Every industry had been eaten. We just found a space that wasn’t yet.”

CourseKey currently works with over 200 career colleges, including the Paul Mitchell School and the Institute for Business & Technology, among others. Over 100,000 students use its software.

For Sophinos and Kannah, founding CourseKey was more than just a business opportunity. Kannah, who had fled Iraq as a refugee, saw family members going through trade schools that were lacking technology infrastructure and modern software tools. He architected the CourseKey platform. 

Sophinos, frustrated by his own college experience, applied for The Thiel Fellowship – a program that supports students in company building instead of university attending. However, he recognized that not everyone who doesn’t want to go to traditional college has that option.

“While looking at alternatives, our early team began recognizing a market that we felt no one was paying attention to. It was occupied by our friends and by our family members,” Sophinos said. “It was a space that, for some odd reason, was largely being left out of the education conversation.”

In 2017, the founding team (Sophinos, Kannah, Ryan Vanshur, Marc Barron, Michael Woo, Fadi George and Luan Nguyen) partnered with a large vocational education provider to build and launch what Sophinos describes as “the world’s first trade school management system.”

“We focused on automating daily classroom procedures like attendance and grading, enhancing the student experience through communication tools, helping to identify at-risk students, and simplifying compliance,” he said. “We also visualized data for retention purposes.”

CourseKey also does things like track skill attainment, run evaluations and exams and integrate third-party tools.

Image Credits: CourseKey

The startup’s goal with its new capital is to scale the platform to serve “every trade school in the country” with the mission of changing the narrative that four-year college is the “only option.” It also plans to add new features and capabilities, largely based on customer requests. CourseKey also plans to nearly double its current headcount of just over 50 employees to nearly 100 over the next two years.

“This is a massive market and massive business opportunity,” Sophinos said.

CourseKey has an impressive list of supporters beyond SignalFire and Builders. Steve Altman, former vice chairman and president of Qualcomm, led its $3.5 million seed round which also included participation from Larry Rosenberger, former FICO CEO. Dennis Yang, former CEO of edtech giant Udemy, and Altman now serve on its board.

SignalFire Managing Director Wayne Hu, who also took a seat on the startup’s board with the new round, said his firm recognized that vocational schools and their administrators, instructors, and students “suffer from a lack of purpose-built software.”

“Student Information Systems and Learning Management Systems are optimized for traditional K-12 schools and university workflow, but vocational schools are stuck relying on pen and paper or trying to shoe-horn in solutions that aren’t built for them,” Hu wrote in a blog post.

CourseKey, in SignalFire’s view, is reimagining a new education operating system built specifically for experiential, hands-on learning models, which continues to evolve with hybrid/distance learning.  

Hu also pointed out that since many of the jobs that vocational schools are preparing people for “have life or death consequences,” they are highly regulated.

“Not only does CourseKey improve trade school business KPIs, it serves as insurance against this existential risk,” he added.

Categories: Business News

First impressions of AppLovin’s IPO filing

2021, March 4 - 1:13am

AppLovin released its S-1 filing yesterday, bringing the Palo Alto-based mobile-app-focused software company a step closer to joining the public markets.

The business results detailed in the document are generally impressive. While some companies going public in recent months have detailed pandemic-fueled growth to lean against or membership in a sector hotter than individual results, AppLovin’s filing tells the story of a rapidly growing company that has managed to scale adjusted profit as it has grown.

And now, with annual revenue north of $1 billion, AppLovin is also a very large company, meaning that its IPO will be widely watched.

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

So this morning we’re rifling through its IPO filing and yanking out what matters as we add one more name to our IPO lists.

The Exchange has a lengthy list of non-IPO topics that we’d like to get to. If everyone could stop going public for a few days, we’d love to write about something else! OK, let’s get into it!

Most of the news is good

As a short introduction, the company’s products are designed to help developers find users and monetize their apps. AppLovin has its own in-house suite of mobile apps, what its S-1 calls a “globally diversified portfolio of over 200 free-to-play mobile games run by 12 studios.” Those apps have 32 million global daily actives, the document added.

It’s a pretty neat company to dig into if you’re into mobile apps at all. Regardless, what we care about today are its numbers. So let’s talk growth, revenue quality, profits, cash consumption and capital structure. Most of the news is good, even if there are some downsides to AppLovin’s capital structure.

Recall that KKR bought a chunk of AppLovin back in mid-2018 at a valuation of around $2 billion. That number appears comically low, given that the company posted $483.4 million in revenue that year, a figure that it roughly doubled in 2019 to $994.1 million. Growth slowed in percentage terms in 2020, when AppLovin saw total revenues of $1.45 billion, though the company managed similar growth in gross-dollar terms.

In percentage terms, AppLovin grew 106% from 2018 to 2019, and 46% from 2019 to 2020. How KKR got to buy into the company at 4x revenues when it was growing at 100% is not clear.

The company is growing well, but is AppLovin accreting revenue of high quality? Yes, but we need to scrape some grime off the numbers to understand them. Turning to the company’s yearly results, AppLovin’s cost of revenue rose steadily as a percentage of revenue from 2018 to 2020. Indeed, the numbers went from 11% in 2018 to 24% in 2019 and 38% in 2020. That’s an awful progression, and if we lacked more information we’d posit that the company’s overall revenue quality was sharply declining.

It’s not that bad. There’s about $1 million in share-based compensation inside the 2020 cost of revenue figure and $228.3 million of “amortization expense related to acquired intangibles.” If we yank out those from the cost-of-revenue line item, AppLovin’s gross margin for 2020 grows from 62% to 77.5%. That’s much better.

Categories: Business News

Clari revenue forecasting platform snags $150M investment and triples valuation to $1.6B

2021, March 4 - 1:01am

Clari, the revenue operations platform that helps companies predict revenue outcomes, announced $150 million Series E today on a $1.6 billion valuation, a number that more than triples its 2019 Series D valuation of $500 million.

Silver Lake led the latest investment with participation from B Capital Group and existing investors Sequoia Capital, Bain Capital Ventures, Sapphire Ventures, Madrona Ventures, Thomvest and Tenaya Capital. The company reports it has now raised a total of $285 million.

While COVID made 2020 trying for everyone, a company with a product that allows executive teams to understand and predict revenue at a granular level was obviously going to be in demand, and Clari saw a lot of interest over the last year.

“It was a surreal year for us, given the momentum we had and all of the tough news we saw going on around us. For us, the usage metrics were just off the charts, as people need visibility and predictability and control over their revenue forecasts,” company co-founder and CEO Andy Byrne told me.

While Byrne didn’t want to discuss revenue specifics, he did point out that he beat the revenue plan he submitted to his board by 110%. He said the performance has led to a lot of inbound investor interest in the company.

“That’s why we’ve had such great investor interest is that [VCs] were hearing in the investment community about how transformative Clari has been […] just giving companies what we call revenue confidence, being able to go and understand where you’re going to be and to accurately predict the impact the pandemic is going to have on your trajectory, good or bad,” Byrne explained.

Gong raises another $200M on $2.2B valuation

To this point, the company has been working with sales and marketing teams, but Byrne says that the company is expanding the scope of the product to bring that same predictability to other parts of an organization.

Clari has mostly focused on technology companies with customers like HPE, Workday and Adobe, but it has plans to expand beyond that vertical. In fact, one of the ways Byrne plans to put today’s investment to work is to push into other verticals, which could also benefit from this kind of revenue visibility.

The company is up 300 employees with plans to double that number by the end of 2021. Byrne says he is building a positive work culture and points to recently being recognized as one of the best places to work by Inc., Bay Area News Group, #GirlsClub and Built In. He says they have made progress when it comes to diversity hirings across a number dimensions, but admits there is still work to be done.

“We actually specifically [established] a commission around diversity and inclusion that has board level [backing] that we’re running to continue to do better work there. Having said that, we still recognize that we’re not too dissimilar to a lot of companies where we feel like there’s so much more that we need to do,” he said.

At this point in the company’s evolution with plenty of money in the bank and a healthy valuation, Byrne did not shy away from the IPO question, although as you would imagine, he wasn’t ready to discuss specifics.

“I would say the answer is unequivocally yes, and we’re building toward this. […] We don’t have a timeframe upon which we know where we’re going to go public, but the next goal is to get to the IPO starting line,” he said.

Clari snags $60M Series D on valuation of around $500M

Categories: Business News

TC Sessions: Justice 2021 is happening now — join the conversation

2021, March 4 - 12:57am

Today’s the day we roll up our collective sleeves, engage in vital conversations about diversity, inclusion and equity in tech — and continue the important work of building a better industry for everyone.

TC Sessions: Justice 2021 features an impressive agenda packed with interactive presentations, breakout sessions and panel discussions with some of the tech world’s brightest innovators, leaders and worker-activists. These folks are in the trenches, changing the world and creating exciting business opportunities. That’s a win-win.

Last-minute decision maker? No problem. Join the conversation here.

You’ll also have time to network and connect with attendees around the world, enjoy startup presentations and even meet some of the early-stage companies in our TC Include founder cohort.

We’re got an incredibly deep bench of talented experts and visionaries ready to take the virtual stage. Here are just a few of the panels and people you simply don’t want to miss.

Finding the Next Unicorn: Arlan Hamilton, the founder and managing partner of Backstage Capital, has raised more than $12 million to back 150 companies led by underrepresented founders. In this session, Hamilton will discuss how she vets the biggest opportunities in investment, and how to disrupt in a positive way.

Identifying and Dismantling Tech’s Deep Systems of Bias: Nearly every popular technology or service has within it systems of bias or exclusion, ignored by the privileged but obvious to the groups affected. How should these systems be exposed and documented, and how can we set about eliminating them and preventing more from appearing in the future? AI for the People’s Mutale Nkonde, disability rights lawyer Haben Girma, and author of Algorithms of Oppression Safiya Umoja Noble discuss a more inclusive future.

Founders in Focus: We sit down with the founders poised to be the next big disruptors in this industry. Here we chat with Tracy Chou of Block Party, which works to protect people from abuse and harassment online.

Why Social Media is Broken and What To Do About It: Toxic culture, deadly conspiracies and organized hate have exploded online in recent years. We’ll discuss how much responsibility social networks have in the rise of these phenomena and how to build healthy online communities that make society better, not worse. Naj Austin (Somewhere Good & Ethel’s Club), Jesse Lehrich (Accountable Tech) and Rashad Robinson (Color of Change)

Meeting of the Minds: Diversity and inclusion as an idea has been on the agenda of tech companies for years now. But the industry still lacks true inclusion, despite best efforts put forth by heads of diversity, equity and inclusion at these companies. We’ll seek to better understand what’s standing in the way of progress and what it’s going to take to achieve real change. Sandra Altine (Facebook), Wade Davis (Netflix) and Bo Young Lee (Uber)

TC Sessions: Justice 2021 kicks off today. Join your colleagues, learn, connect, and discover new ways and opportunities to build stronger startups and a more just tech industry for all people.

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Categories: Business News

Have a startup in Miami? Apply to pitch at TechCrunch’s Miami virtual meetup

2021, March 4 - 12:15am

TechCrunch is coming to Miami — virtually, at least. On March 11, TechCrunch is hosting a small online event with local venture capitalists, founders and those curious about the growing ecosystem. There will also be a small pitch-off event where Florida-based startups have three minutes to pitch their companies to Florida-based VCs.

Everyone is welcome to attend the event, but we’re looking for startups based in the Miami region to pitch at this event. TechCrunch has a long history of hosting small pitch-offs and we’re excited to revive this tradition despite the need to do it virtually.

Not in Miami? No worries. We’re spinning up similar events in other regions too. Spoiler: Detroit/Ann Arbor and Pittsburgh are next.

Qualifications

  • Early-stage startup (Series A or earlier)
  • Startups based in the Miami region will be given priority
  • Pitch decks are highly recommended
  • Apply for the pitch-off here

The event is online and free, but space is limited. Register early. We hope you can make it.

Attend TechCrunch’s free virtual Miami meetup on March 11

Categories: Business News

$100 million for mealworms

2021, March 4 - 12:00am

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

This is our Wednesday show, where we niche down and focus on a single topic, or theme. This week we’re talking agtech, a surprisingly cool bit of the technology startup world. But Chris and Danny and Natasha and Alex were not alone in their quest to take a look into agtech, we brought alone TechCrunch climate editor Jon Shieber for the ride.

With his help we got through a number of pretty damn interesting things, including:

And that’s that! We’re back on Friday with our long-form, newsy episode. Thanks to everyone checking out our newest show. Oh, and don’t forget about TechCrunch Early Stage and TechCrunch Justice. They are going to rock.

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

 

Categories: Business News

Yugabyte announces $48M investment as cloud native database makes enterprise push

2021, March 3 - 11:51pm

As demand for cloud native applications is growing, Yugabyte, makers of the cloud native, open source YugabyteDB database are seeing a corresponding rise in demand for their products, especially with large enterprise customers. Today, the company announced a $48 million financing round to help build on that momentum. The round is an extension of the startup’s $30 million Series B last June.

Lightspeed Venture Partners led the round with participation from Greenspring Associates, Dell Technologies Capital, Wipro Ventures and 8VC. It has raised a total raised to $103 million, according to the company.

Kannan Muthukkaruppan, Yugabyte co-founder and president, says the startup saw a marked increase in interest in both the open source and commercial offerings in 2020 as the pandemic pushed many companies to the cloud faster than they might have gone otherwise, something many startup founders have pointed out to me.

“The distributed SQL space is definitely heating up, and if anything over the last six months almost in every vector in terms of enterprise customers — from Fortune 500 companies across financial, retail, ISP or telcos — are putting Yugabyte in production to be the system of record database to meet some of their business critical services needs,” Muthukkaruppan told me.

In addition, he’s seeing a similar rise in the level of interest from the open source version of the product.”Similarly, the groundswell on the community and the open source adoption has been phenomenal. Our Slack [open source] user community quadrupled in 2020,” he said.

That kind of momentum led to the increased investor interest, says co-founder and CTO Karthik Ranganathan. “Some of the primary reasons to go and even ask for funding was that we realized we could accelerate some of this stuff, and we couldn’t do that with the original $30 million we had raised,” he said. The original thinking was to do a secondary raise in the $15-20 million, but multiple investors expressed interest in participating, and it ended up being $48 million when all was said and done.

Former Pivotal president Bill Cook came on board as CEO at the same time they were announcing their last funding round in June and brought some enterprise chops to the table. It was his job to figure out how to expand the market opportunity with larger high-value enterprise clients. “And so the last six or seven months has been about that, dealing with enterprise clients on one hand and then this emerging developer led cloud offering as well,” Cook said.

Grafana Labs launches observability stack for enterprise customers

The company has a three tier offering that includes the open source YugabyteDB. Then there is a fully managed cloud version called Yugabyte Cloud, and finally there is a self-managed cloud version of the database called Yugabyte Platform. The latter is especially attractive to large enterprise customers, who want to be in the cloud, but still want to maintain control of their data and infrastructure, and so choose to manage the cloud installation themselves.

Yugabyte started last year with 50 employees, doubled that to this point, and now expects to reach 200 by the end of this year. As they add employees, the leadership team is cognizant of the importance of building a diverse and inclusive workforce, while recognizing the challenges in doing so.

“It’s work in progress as always. We’ve added diversity candidates right along the whole spectrum as we’ve grown but from my perspective it’s never sufficient, and we just need to keep pushing on it hard, and I think as a leadership team we recognize that,” Cook said.

The three leaders of the company have been working together remotely now since the announcement in June, and had only met briefly in person prior to the pandemic shutting down offices, but they say that it has gone smoothly. And while they would obviously like to meet in person again when the time is right, the momentum the company is experiencing shows that things are moving in the right direction, regardless of where they are getting their work done.

Note: The article originally stated this was a Series C round, but the company later clarified that was a B-1 round and we updated the article to reflect that.

Yugabyte lands $30M Series B as open source database continues to flourish

Categories: Business News

Deliverr scores $170M to bring fast delivery to every e-commerce vendor

2021, March 3 - 11:00pm

At a time when e-commerce is exploding due in large part to the pandemic, a business that helps any online merchant ship goods to a consumer in one or two days is going to be in demand. Deliverr is a startup that fits that bill, and today the company announced a $170 million financing round.

The round breaks down to $135 million Series D financing led by Coatue. The remaining $35 million comes in the form of a convertible note led by Brookfield Technology Partners. Existing investors Activant Capital, 8VC and GLP participated in both parts of the investment. In less than four years, the company has raced from from rounds A to D, raising $240 million along the way.

Deliverr co-founder and CEO Michael Krakaris says it has been a rapid rise, but that his business requires a lot of capital. “It has been this really kind of crazy journey, and we’ve been growing very fast, but also this space is very capital intensive, and it’s a winner-take-all market where you gain efficiency at scale. You know scale is what makes your model highly defensible in this space,” Krakaris told me.

The way Deliverr works is it uses software to determine how to get goods to warehouses in parts of the country where they are needed. It then uses these warehouses’ fulfillment departments to help pick and pack the order. The software then finds the fastest and cheapest delivery method and it gets shipped to customers with a two-day delivery guarantee. They are also ramping a next-day delivery product to expand the business.

Coupa Software snags Llamasoft for $1.5B to bring together spending and supply chain data

Deliverr doesn’t actually own any warehouses. It rents out space, and part of the challenge of building this business is establishing relationships with those warehouses and working out a business arrangement, one that is still evolving as the company grows. “A year ago, I would have said we typically wanted to be 5-10% of a warehouse’s business. There are cases now where we are 100% of these warehouses’ businesses. We’ve grown to that level,” he explained.

Krakaris says that the pandemic raised major challenges for the company. Just setting up a relationship with new warehouses could require driving long distances because getting on a plane would mean quarantining when they landed. In some instances there were shortages of items. In others, COVID would shut down all of the warehouses in a given region, forcing the executive team to make a set of business adjustments on the fly, but this constant crisis mentality also helped them learn how to shift resources quickly, a lesson that is highly useful in this business.

The company started 2020 with 50 people and have added 100 employees since. They plan to double that this year, although that is variable depending on how the year goes. He say that another challenge is that he has done this hiring during COVID, and has never met a majority of his workers.

“You know, I’ve never met more than half the company in person, but I’m try to be as open as I can and learn about everyone, and we hold events to try and get to know everybody, but obviously it’s not like being together in person,” he said.

Deliverr lands $40M Series C to bring two-day shipping to any merchant

Categories: Business News

Scarf helps open-source developers track how their projects are being used

2021, March 3 - 11:00pm

Almost by default, open-source developers get very little insight into who uses their projects. In part, that’s the beauty of open source, but for developers who want to monetize their projects, it’s also a bit of a curse because they get very little data back from these projects. While you usually know who bought your proprietary software — and those tools often send back some telemetry, too — that’s not something that holds true for open-source code. Scarf is trying to change that.

In its earliest incarnation, Scarf founder Avi Press tried to go the telemetry route for getting this kind of data. He had written a few successful developer tools and as they got more popular, he realized that he was spending an increasingly large amount of time supporting his users.

Scarf co-founder and CEO Avi Press (Image Credits: Scarf)

“This project was now really sapping my time and energy, but also clearly providing value to big companies,” he said. “And that’s really what got me thinking that there’s probably an opportunity to maybe provide support or build features just for these companies, or do something to try to make some money from that, or really just better support those commercial users.” But he also quickly realized that he had virtually no data about how the project was being used beyond what people told him directly and download stats from GitHub and other places. So as he tried to monetize the project, he had very little data to inform his decisions and he had no way of knowing which companies to target directly that were already quietly using his code.

“If you were working at any old company — pushing code out to an app or a website — if you pushed out code without any observability, that would be reckless. You would you get fired over something like that. Or maybe not, but it’s a really poor decision to make. And this is the norm for every domain of software — except open source.”

Image Credits: Scarf

That led to the first version of Scarf: a package manager that would provide usage analytics and make it easy to sell different versions of a project. But that wasn’t quite something the community was ready to accept — and a lot of people questioned the open-source nature of the project.

“What really came out of those conversations, even chatting with people who were really, really against this kind of approach — everyone agrees that the package registries already have all of this data. So NPM and Docker and all these companies that have this data — there are many, many requests of developers for this data,” Press said, and noted that there is obviously a lot of value in this data.

So the new Scarf now takes a more sophisticated approach. While it still offers an NPM library that does phone home and pixel tracking for documentation, its focus is now on registries. What the company is essentially launching this week is a kind of middle layer between the code and the registry that allows developers to, for example, point users of their containers to the Scarf registry first and then Scarf sits in front of the Docker Hub or the GitHub Container Registry.

“You tell us, where are your containers located? And then your users pull the image through Scarf and Scarf just redirects the traffic to wherever it needs to go. But then all the traffic that flows through Scarf, we can expose that to the maintainers. What company did that pull come from? Was it on a laptop or on CI? What cloud provider was it on? What container runtime was it using? What version of the software did they pull down? And all of these things that are actually pretty trivial to answer from this traffic — and the registries could have been doing this whole time but unfortunately have not done so.”

To fund its efforts, Scarf recently raised a $2 million seed funding round led by Wave Capital, with participation from 468 Capital and a number of angel investors.

Categories: Business News

Minu, a Mexico City-based, pay-on-demand startup, lands a $14M Series A

2021, March 3 - 11:00pm

Many of the startups raising capital in Mexico are focused on financial inclusion, aiming to level the playing field in a country that is largely unbanked and has a burgeoning middle class.

One such company, minu, a Mexico City-based, pay-on-demand startup, announced Wednesday that it has raised $14 million in a Series A round of funding led by FinTech Collective.

New investors VEF, XYZ Ventures and FJ Labs, as well as DocuSign founder Tom Gonser and Gusto CFO Mike Dinsdale also participated in the financing. Existing backers QED, Next Billion Ventures and Village Global also put more money in the company. 

The financing — which included $2.5 million in debt from Banco Sabadell Mexico — brings minu’s total raised since its 2019 inception to a total of $20 million. 

Co-founders Nima Pourshasb, Rafa Niell and Paolo Rizzi were driven to build out a pay-on-demand offering in Mexico.

“We really think the lack of financial health is one of the key drivers slowing the potential and productivity of Mexican society,” Pourshasb said.

Latin America’s digital transformation is making up for lost time

Minu aims to solve the employee liquidity gap between paychecks in an effort to help people see reduced financial stress and avoid expensive loans. The company offers 24×7 instant access to employees’ earned wages for a $2 fixed withdrawal fee.

Today, minu has more than 100 large enterprise clients, including TotalPlay, Telefonica, Scotiabank, OfficeMax, Rappi, Adecco, Manpower and Cap Gemini, and public sector clients such as the Electoral Institute of the State of Mexico. It saw its transaction volume and revenue grow by 18 times in 2020, albeit from a small base. The company declined to reveal hard revenue figures.

Minu operates under the premise that the liquidity gap is profound in Mexican society. An estimated 70% of workers live from paycheck to paycheck, with average wages of $550/month, noted Pourshasb. And only 37% of Mexicans over 15 years old have a bank account, according to recent World Bank stats.

Image Credits: minu

“Some people are continuously getting loans — at very high interest rates — to cover recurring expenses such as food and transport,” Pourshasb said.

Minu’s first product offers instant, 24/7 access to earned wages.

“This is money that is already earned,” Pourshasb said. “Our users have an app to see how much is available and if they need those funds, they can instantly receive them.” 

The company’s distribution model is B2B, so it works alongside large enterprises to offer access to the wages as a benefit for employees. Businesses are attracted to that model, Pourshasb explained, because they don’t have to pay for it or change their payroll process.

“We integrate with payroll so the process is automated and there’s no added work for them,” he added. “It also doesn’t affect cash flows. These are upfront funds so if someone withdraws money, it gets deducted from payroll.”

Some employers do subsidize the cost of the transaction fee for employees.

Looking ahead, minu says it will use its fresh capital to boost its headcount of 60 as well as expanding its offering to include financial education, savings, smart spend and insurance products. The company also plans to expand outside of Mexico.

Carlos Alonso Torras, who leads Latin America investing for New York-based FinTech Collective, believes that minu leverages “a strong combination of an exceptional founding team and auspicious macro trends.”

“We see the company’s current product as the basis for a platform that will offer an array of necessary financial products to a very underserved demographic,” he wrote via email. “Minu is already creating a moat vis a vis competitors via deep integrations, high client satisfaction and a broadening financial wellness offering. As the early mover in a market whose characteristics are conducive to the success of pay on demand, the immediate growth potential is remarkable, and Minu is uniquely positioned to excel.”

The investment marks the firm’s fifth in Mexico. Overall, FinTech Collective says it seeks and backs entrepreneurs “who are rewiring how money flows through the world.”

“Due to COVID, we are seeing a pandemic stricken world where hundreds of millions of people are facing greater financial instability, and we believe that fintech has a vital role to play in accelerating the emergence of a spending middle class underserved by traditional financial systems,” Torras added. 

Fintechs in Mexico have been busy. Last week, Stori raised a $32.5 million Series B round with the goal of “becoming Mexico’s leading credit card issuer for the rising middle class.”

Also in February, Flink raised $12 million in a Series A led by Silicon Valley-based venture capital firm Accel.

Current and upcoming trends in Latin America’s mobile growth

 

Categories: Business News

Oscar Health prices IPO at $39 and secures a $9.5B valuation

2021, March 3 - 10:56pm

Late last night Oscar Health, a tech-enabled medical insurance provider, priced its IPO at $39 per share. The final price came in $1 per share above its raised IPO guidance; Oscar Health had originally targeted a $32-$34 per-share IPO price.

Some 37,041,026 shares were sold at $39, including 36,391,946 offered by the company itself. Not counting shares reserved for the company’s underwriters — more on those here — Oscar Health found at least $1.44 billion worth of demand for its equity at $39 apiece. More than 98% of the funds from the aggregate share sale went to the company’s accounts.

For backers Thrive Capital, Founders Fund, Formation 8, CapitalG, Fidelity, Alphabet, Coatue, Tiger Global and others, the day is a financial coup.

Oscar Health raises IPO price as Coupang releases bullish debut valuation

But just how well did the company’s private backers do? To know that, we have to calculate what the company is worth at $39 per share. Oscar sold more shares in its debut than its final S-1/A filing expected, making its ensuing share count slightly tedious to calculate. However, the company’s simple IPO valuation appears to be just over $7.92 billion at its IPO price. IPO investing group Renaissance Capital calculates the company’s fully diluted valuation, a figure that counts some additional shares, including that have been earned through options that have yet to be exercised, for example, at $9.5 billion.

Oscar Health’s IPO has been a success from several perspectives. From a fundraising viewpoint, the company raised more than it may have initially expected to, comparing its final price point against its initial range. From a valuation perspective, the company is now worth a multiple of its last-known private valuation, some $3.2 billion set during its 2018 Series G, per PitchBook data. The company did raise more private capital between that round and its IPO, but we lack valuation figures for those deals.

The company will begin trading this morning in a notable test for insurtech, and the sub-niche of medical insurtech. TechCrunch’s prior notes on the company’s IPO valuation aside, the bidding public have repriced Oscar Health. Now let’s see what the company will manage once it truly begins to float.

Oscar Health’s initial IPO price is so high, it makes me want to swear

Categories: Business News

Identiq, a privacy-friendly fraud prevention startup, secures $47M at Series A

2021, March 3 - 10:14pm

Israeli fraud prevention startup Identiq has raised $47 million at Series A as the company eyes international growth, driven in large part by the spike in online spending during the pandemic.

The round was led by Insight Partners and Entrée Capital, with participation from Amdocs, Sony Innovation Fund by IGV, as well as existing investors Vertex Ventures Israel, Oryzn Capital and Slow Ventures.

Fraud prevention is big business, which is slated to be worth $145 billion by 2026, ballooning by eightfold in size compared to 2018. But it’s a data-hungry industry, fraught with security and privacy risks, having to rely on sharing enormous sets of consumer data in order to learn who legitimate customers are in order to weed out the fraudsters.

Identiq takes a different, more privacy-friendly approach to fraud prevention, without having to share a customer’s data with a third party.

“Before now, the only way companies could solve this problem was by exposing the data they were given by the user to a third-party data provider for validation, creating huge privacy problems,” Identiq’s chief executive Itay Levy told TechCrunch. “We solved this by allowing these companies to validate that the data they’ve been given matches the data of other companies that already know and trust the user, without sharing any sensitive information at all.”

When an Identiq customer — such as an online store — sees a new customer for the first time, the store can ask other stores in Identiq’s network if they know or trust that new customer. This peer-to-peer network uses cryptography to help online stores anonymously vet new customers to help weed out bad actors, like fraudsters and scammers, without needing to collect private user data.

So far, the company says it already counts Fortune 500 companies as customers.

Identiq said it plans to use the $47 million raise to hire and grow the company’s workforce, and aims to scale up its support for its international customers.

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Categories: Business News

Dooly closes on $20M for AI-based tools to help salespeople with their busywork

2021, March 3 - 8:03pm

Robotic process automation has taken the enterprise world by storm by providing a set of tools for those doing repetitive, volume-based tasks to use software to remove some of that labor to let those people focus on more complicated tasks. Today a startup that’s taken some of that ethos and is applying it to more individualized work — that of salespeople — is announcing some funding.

Dooly, a Vancouver, Canada-based startup that has built a set of AI-based tools that automate the busywork that goes into updating data in their sales software, and namely Salesforce, has picked up $20 million in funding to build out its business, which to date has picked up a number of customers among the sales teams of enterprise-focused software companies. They include Airtable, Asana, Intercom, Contentful, Vidyard, BigCommerce, Liftoff and CrowdRiff.

Its aim is to make sales software more useful for salespeople by eliminating the work that goes into inputting data into those systems.

“Really they’ve just created a mountain of virtual filing cabinets,” Kris Hartvigsen, Dooly’s founder and CEO, said in an emailed interview with me. “Filing cabinets just wait for drawers to be opened — or in the case of enterprise software, reports to be pulled and data to be input. We know people are capturing information across the business and our job is to make sure that the people and systems across the business have a better, faster, more far-reaching way of staying informed.”

The funding is being announced today, but it was actually raised in two tranches that had not previously been disclosed. A $3.3 million seed round was led by Boldstart Ventures and also included BoxGroup. Its $17 million Series A, meanwhile, was led by Addition, with Boldstart and BoxGroup again participating, along with Battery Ventures, Mantis (representing musicians The Chainsmokers) and SV Angel.

Alongside the VCs, there are a number of interesting strategic individual investors, too. Daniel Dines and Brandon Deer of UiPath (the RPA connection clearly is not one that I’m imagining!); Allison Pickens, the ex-COO of Gainsight; Zander Lurie of SurveyMonkey); Jay Simons, ex-CEO of Atlassian); Harry Stebbings; and other unnamed investors are all also involved. Ed Sim of Boldstart is joining Dooly’s board of directors with this announcement.

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The challenge that Dooly has been built to solve is that while there are a lot of tools out there now to help salespeople source leads, manage the progress of their sales, give them advice and other helpful material to supplement their charm and the basic strength of a product, manage customers once they’ve signed on, and so on, all of them still require something important to work: a time commitment from salespeople to keep them updated with information. Ironically, the more tools to help them that are built, the more time salespeople need to spend feeding them data.

Even more ironically, one of the big daddies of the problem — the somewhat overweight Salesforce — has published figures (cited by Dooly) that say salespeople spend just 34% of their time selling. The rest (minus trips to get coffee to stay caffeinated) seems to be about data entry.

The idea with Dooly is that you turn it on, connect it to what you are using — starting with Salesforce — and Dooly lets you make notes which it then organises and puts into the right places in the rest of your apps.

“When a salesperson starts using Dooly, the ‘aha moment’ is pretty immediate,” Hartvigsen said. “Whether they want to do quick pipeline edits or push their notes to Salesforce, we don’t ask the user to learn any new patterns they aren’t familiar with, we just automate a bunch of things they hate doing, often comparing those traditional chores to clerical work.” For example, he notes, when they sync a note, Dooly automatically updates any Salesforce with any contacts found in the meeting, updates fields, adds to-dos, logs activities, and pushes messages to the appropriate internal stakeholders on Slack, all in the same motion.

The product currently also integrates with Slack, G-Cal and G-Drive, because, Hartvigsen said, “we see this as an area where there is the most immediate friction and an area that was in need of disruption.” He added that the plan is to add more integrations over time. “We see need to expand the solutions that anchor to our connected workspace, with our near-term focus being the systems that touch revenue teams,” he said.

The design of Dooly seems to be about investing a little in order to save more. On average people are using Dooly between 2.5 and 5 hours each day, but Hartvigsen claims that right now the system helps people make up for more hours each week in lost productivity. Its pricing starts at $25 per user per month, going up depending on features and use.

There are quite literally thousands of products out in the market today, and among them hundreds of strong ones, being built to help salespeople with different aspects of getting their jobs done. I’ve written about quite a few of them, and I’ve actually asked companies about whether they are tackling the very issue that Dooly has identified and is trying to fix.

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They weren’t, but that doesn’t mean that they won’t. Chief among them are companies like UiPath and Salesforce, which sit on different sides of this problem and could well move into it as they keep growing. (Having UiPath as a backer by way of its founder and a senior executive points to a relationship there, which is interesting.)

In the meantime, there have been some other interesting innovations using AI to improve the sales process, with companies like Pipedrive, Clari, Seismic, Chorus.ai and Gong all using natural language, machine learning and big data analytics (itself helped by AI) to improve how sales get done.

“The first thing we noticed when we met the Dooly team was the thoughtful design-first approach to product that engendered tons of customer love. This love was inherent not only on popular ratings sites like G2 Crowd but also in the individual usage and viral adoption throughout companies with only one initial user,” said Ed Sim, founder and managing partner at Boldstart Ventures in a statement. “Dooly is revolutionizing the note-taking experience for customer facing end users from sales to customer success to product.”

“Dooly is relentlessly focused on building a user-first experience for its customers to seamlessly create workflows and unlock new revenue opportunities,” said Lee Fixel, founder of Addition, added. “We are thrilled to support Dooly as it continues to scale and enhance the sales function for more businesses.”

Categories: Business News

Flextock is a YC-backed e-commerce fulfillment provider for Africa and the Middle East

2021, March 3 - 6:58pm

When merchants launch their e-commerce businesses, they can easily manage the end-to-end operations in the early stages. But as they begin to grow, managing their own operations, from warehousing and logistics to delivery and cash collection, can become difficult. This can prevent them from scaling effectively despite having a steady inflow of demand.

Now, there’s a need to offload some of this workload. This is where e-commerce fulfillment services come in handy.

Today, Flextock, one such company providing this service to businesses and consumers in Egypt, is announcing that it is part of Y Combinator’s Winter 2021 batch. Founded by Mohamed Mossaad and Enas Siam in September 2020, the Egyptian company launched in stealth this January.

According to COO Siam, the founders noticed that as e-commerce activities in the Middle East and North African regions accelerated due to the pandemic, merchants were left overwhelmed with the volume of orders they received.

“We saw it as an opportunity to build a tech-enabled platform to be able to help anyone that wanted to grow their own independent brand or store,” she told TechCrunch. “We wanted them to focus on their products and marketing while leaving the supply chain and logistics bit to us, which we do through our end-to-end proprietary software.”

Mossaad, the company’s CEO, describes Flextock as a tech-enabled fulfillment provider. When merchants sign up to the platform, they send their products to one of the company’s fulfillment centers. Flextock takes the whole catalog and tags the products for tracking purposes. Then, integration is made between Flextock and any online store they use, be it Shopify, WooCommerce, Wix and Odoo, among others. 

As orders are made, Flextock packages and ships the products from the fulfillment center to the customers. Flextock doesn’t own any delivery vehicles, so to achieve this, the company partners with existing logistics companies in Egypt. This model has helped the startup to create a marketplace for different last-mile delivery companies in the country.

Image Credits: Flextock

There’s also a dashboard for these merchants to track each order, get more visibility into their shipping process and know how well their products sell.

Flextock makes money on a per-order basis. That means the merchants on the platform pay a flat fee that changes with respect to the volume of products moved.

Mossaad says that since the company beta launched in January with more than 20 businesses, it has been growing 50% week-on-week across 28 cities in the country.

According to the CEO, Flextock is the first end-to-end fulfillment service in Egypt. And in a market that will likely see more competition in the next couple of years, Mossaad thinks Flextock has the opportunity to become the market leader.

Behind this rationale is that the six-month-old startup is backed by Y Combinator and has also raised $850,000 which is just the first part of its multi-million-dollar pre-seed round that will close sometime this year.

“We were able to very quickly get the acceptance of YC given the size of the opportunity we are focused on. We believe that commerce is expected to change in the Middle East and Africa, and Flextock is going to be at the forefront of powering this next generation of commerce,” he said.

The founders combine a wealth of corporate experience and a strong track record of scaling tech startups in the MENA region.

L-R: Mohamed Mossaad (CEO) and Enas Siam (COO)

Siam started her career managing supply operations at Nestle across the Middle East and North Africa. Later, she became the General Manager of Careem Bus, a mass-transit service and Uber subsidiary, where she helped build the product from scratch and grew it to 150,000 monthly rides in a year.

Mossaad, on the other hand, has worked on multiple turnarounds across different African countries during his time at Bain & Company. He joined Egyptian online food delivery platform, Elmenus, as Chief Strategy Officer. He helped scale the company’s revenues 5x in less than a year and was instrumental to its $8 million Series B round.

The CEO says Flextock has its sights on other African and Middle Eastern markets — specifically Saudi Arabia — and the plan is to provide its services to over 1 million businesses in these regions over the next decade.

“We are on a mission to enable more than 1 million merchants in Africa and the Middle East to sell online without carrying out the hassle of running their own operations. We are well-positioned to do that, and hopefully, we will be able to achieve that in a record time.”

Categories: Business News

‘Flying taxi’ startup Volocopter picks up another $241M, says service is now two years out

2021, March 3 - 4:20pm

In a year where mass transit on airplanes, trains and buses has had lower traveler numbers in the wake of the COVID-19 pandemic, one of the startups hoping to pioneer a totally new approach to getting individuals from A to B — flying taxis — has raised some significant funding.

Volocopter, a startup out of southern Germany (Bruchsal, specifically) that has been building and testing electric VTOL (vertical take-off and landing) aircraft, has picked up €200 million (about $241 million) in a Series D round of funding. Alongside its aircraft, Volocopter has also been building a business case in which its vessels will be used in a taxi-style fleet in urban areas. CEO Florian Reuter tells us that live services are now two years out for the two vehicle models it has been developing.

“We are actually expecting to certify our VoloCity in around two years and start commercial air taxi operations right after,” he said. “Paris and Singapore are in pole position [as the first cities], where Paris wants to have electric air taxis established for the 2024 Olympics. With our VoloDrone we expect first commercial flights even earlier than with our VoloCity.”

To date, Volocopter has shown off its craft in flights in Helsinki, Stuttgart, Dubai and over Singapore’s Marina Bay. In addition to Europe and Asia, it also wants to launch services in the U.S.

For some context, this is basically on track with what the company had previously projected: in 2019 — when Volocopter raised an initial $55 million in funding for its Series C (finally closed out at €87 million, around $94 million) — the company said it was three years away from service.

Volocopter raises $55M led by Volvo owner Geely, sets 3-year timeline for its flying taxi service

This latest (oversubscribed) Series D includes new investments from a mix of financial and strategic backers. Funds managed by BlackRock; global infrastructure company Atlantia SpA.; Avala Capital; automotive parts behemoth Continental AG; Japan’s NTT via its venture capital arm; Tokyo Century, a Japanese leasing company; and multiple family offices, among others. Volocopter also said that all of its existing investors — that list includes Geely, Daimler, DB Schenker, Intel Capital, btov Partners, Team Europe and Klocke Holding and more — also contributed to the round.

If that sounds like a big list, it’s somewhat intentional, as the task of what Volocopter is attempting is complex and requires a wide ecosystem of other players, said Rene Griemens, the company’s CFO.

“Getting urban air mobility off the ground requires a full ecosystem that we are developing right now. Many of our strategic partners will support us on different aspects of the supply chain, scaling components, entering markets, improving operations amongst others. Most of them know certain aspects of our business model really well (e.g. Japan Airlines for aviation, Atlantia for infrastructure),” he said. “Their investment is a reflection of their excitement about Volocopter as a leader in building the entire ecosystem of UAM, thereby giving credibility and comfort for purely financial investors.”

He added that many of these companies have a very “hands-on partnership” with Volocopter. “DB Schenker, for example, is rolling out leading-edge heavily-load electric logistics drones together with us around the globe.”

The company has now raised nearly $390 million. We’re asking for an updated valuation, but for some context, PitchBook data estimates its valuation now at $624 million.

Moonshots and sunsets

Founded in 2011, Volocopter has now been working on its idea — distinctive for its very wide circular design that sits where the rotor on a helicopter would be — for a whole decade, and in many regards it’s the classic idea of a moonshot in action.

It has yet to make any money, and the product that it’s building to do so is very groundbreaking — flying into completely unchartered territory, so to speak — and therefore ultimately untested.

It’s not the only one working on “flying taxi” concepts — there are other very well-capitalised companies like Lilum, Joby Aviation, Kitty Hawk and eHang.

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However, all of these have faced various hurdles ranging from investor lawsuits to bankruptcies, accidents, mothballed projects and divestments (perhaps most notably, Joby scooped up Elevate last year as Uber stepped away from costly moonshots).

And most importantly, none of them are flying commercially yet. With Volocopter (as with the others), investors have taken a long-term bet here on a concept and a team it believes can deliver.

For now, the company says that technology is no longer the barrier, and neither it seems are regulators, who are, in the pandemic, more focused on considering new approaches to old problems to improve efficiency and acknowledge that we might have to do things a little differently from now on, in the wake of new demands from public health, and the public.

In the case of VTOL craft, the promise has always been that they could bypass a lot of the issues with street congestion in urban areas, and provide a more environmental alternative to gas-guzzling, present-day transportation modes.

The challenge, on the other hand, has been determining the safety both of completely new devices, and also of the traffic and other systems that they would operate under. With the idea being that ultimately these craft would be autonomous, that adds another complex twist.

Interestingly, regulators in different markets that might have been more skeptical of new concepts seem to be more open to considering them differently now with the pandemic at hand. This has played out in other arenas, too, such as the electric scooter market in the U.K., which saw a bump in activity after regulators long skeptical gave them a provisional nod last year, citing the need for more individualized transportation options in a pandemic-hit country.

Volocopter’s model is based around transporting one person or small parties, so in a sense might be attractive here too.

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“There aren’t any major hurdles anymore in terms of the technology as such,” said Reuter. “It is now all about execution. EASA has defined what is necessary to get electric air taxis certified to the highest safety level in aviation. We have the best technology in the market to certify to EASA’s high safety standards and will keep our heads down to finalize the few remaining steps to certification.”

In contrast, he said the other challenges that remain are those of any highly technical startup: “Our largest challenge right now is talent acquisition,” he said. “We are looking for the best talents worldwide and growing our team quickly now, so that we can accelerate on the technical and market development sides. Especially in the markets where we will open early routes, such as Paris, Singapore, China and Japan, we are going full speed in preparing everything necessary from digital infrastructure to landing sites, city approvals and more.”

Categories: Business News

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