Seksom Suriyapa was seemingly destined to land at a venture firm. A Stanford Law graduate, he worked at two blue-chip investment banks before joining the cybersecurity company McAfee as a senior corp dev employee, later logging six years at the human resources software company SuccessFactors and, in 2018, landing at Twitter, where he headed up its 12-person corporate development team until June.
The bigger surprise is that Suriyapa — who just joined the L.A.-based venture firm Upfront Ventures — didn’t make the leap sooner. “The catalyst was finding a firm that felt like the exact right fit for me,” says Suriyapa.
We talked earlier today with Suriyapa — who lives and will remain in the Bay Area — about his new role at Upfront, where he will be leading its expanding growth-stage practice with firm founder Yves Sisteron.
He also shed light on how Twitter — which has been on a bit of buying spree — thinks about acquisitions these days. Our chat has been edited lightly for length.
TC: How did you wind up joining Upfront?
SS: [Longtime partner] Mark Suster and I were introduced through a mutual business acquaintance in the venture world, and I got to know him over a period of time and really came to find him to be a remarkable individual. He’s thoughtful about the business itself, he’s an incredible brand builder. I think you could argue that [Upfront] put L.A. on the venture map.
TC: It was also, for a long time, an early-stage firm, but now it has a ‘barbell’ strategy. Is your new job to make sure it can maintain its stake in its portfolio companies as they grow? Can you shop outside of that portfolio?
SS: The mission for me will be supporting the best of Upfront’s hundred-plus existing portfolio companies that are poised to scale, and also to invest in companies not currency on the platform, and I anticipate [the latter] will happen more and more over time.
TC: Twitter was a lot more active on the corp dev front during the years when you were there. Why?
SS: When i joined in 2018, Jack Dorsey had been CEO for about three years, and really his focus was on the core mission of driving the public conversation, and in doing that, Twitter shrunk itself out of a lot of businesses and [shrunk] people wise as well.
TC: I remember it laid people off in 2016.
SS: And one of the offshoots of that was way less in the way of newer products, so there were no new acquisitions in the three years prior to me joining, and that muscle atrophies if you don’t exercise it. So [ahead of me] Jack had transformed the management team, which had been, relatively speaking, a revolving door of executives until that point, and I was brought in with a specific mandate of reviving a corporate development practice that had been quiet for a few years. I’d known [CFO] Ned Segal when he was a banker at Goldman Sachs and [while] I was at SuccessFactors, so when I heard about the role through the grapevine, I reached out.
TC: So Twitter starts shopping, buying up the news reader service Scroll, the newsletter platform Revue. Were these decisions coming down from the top or vice versa?
SS: The best way to describe it would be that it was product-need driven. The company had a few different objectives. One was to diversify Twitter from its dependency on being an ad-driven business. Something like 80% of revenue comes from ads.
Second, there’s an incredible need to ramp up its machine learning and artificial intelligence as a company. If you’re looking for toxicity in conversation, it’s not scalable to hire tens of thousands of people to do that. You need machine learning to find it. Twitter done well is also able to show you the conversations that are most interesting to you, and to do that, it has to take signals from what you follow and spend time reading and what you interact with, and that, at its core, is ML AI. [Relatedly] Jack has a vision that anybody who tweets in whatever their native tongue is should be able to talk with someone else in their native tongue as part of a global conversation, and to do that, you need [natural language processing] techniques galore.
TC: There’s also this focus on consumer applications.
SS: That’s the third objective. What are the tools that followers and creators can use in conversation with each other? So [Twitter] added audio [via its Clubhouse rival Spaces]. We bought Revue, which is a competitor to Substack. So there’s a lot of innovation happening around the type of content that someone should expect to see or create on Twitter.
TC: Would you describe these acquisitions as proactive or reactive?
SS: From the outside it would seem reactive, but the reality is we’d been thinking a lot about something like Spaces even before Clubhouse took off. I think what’s noticeable to me is [Spaces] is one of the first times you’ve seen a company like Twitter build up a capability and a new product area that’s going head-to-head going against a company that’s focused only on that realm, and it’s competitive from day one. Twitter beat Clubhouse in [offering an] Android version because it poured resources into it, and I’d argue that a lot of the mechanics of Twitter and the fact that creators are on Twitter puts it in an awesome spot to win this segment.
Twitter also just has a huge amount of expertise in finding toxicity and things you want to be wary of when you’re a social media play, and a company of Clubhouse’s size, at least in its initial days, will have a hard time getting there.
TC: Twitter has so many interests, including around cryptocurrencies and decentralization.
SS: In terms of priorities at Twitter, a lot is under wraps in terms of the technologies that we expect [will rise up over] the next five to 10 years, but [a lot of thought is being given to] the impact of cryptocurrency and the underlying protocols around it and how Twitter participates in a trustless, permissionless [world] where there’s a decentralized internet that can protect people’s privacy and allow people not to worry where their content is stored. People think of Twitter as a consumer app but there’s amazing and considerable diversity under the hood.
TC: Do you think because of the current regulatory environment that it has a better shot at working with companies and projects that might have gotten snapped up by Facebook and Google?
In terms of the regulatory environment, the reality is that even if you take the Facebooks and Googles out of the equation, there are acquirers that are competitive that would step up and buy things, so it’s a little short-sighted to think of just those two. But even when they were active, we were winning [deals]. A lot of the companies we acquired self-selected to be at Twitter because they like what it stands for, they like the way that Jack Dorsey leads the organization, and they believe in the stands that he takes and the positions that he and his leadership espouse.
TC: You’re now representing a very different brand. How will your work at Twitter help you compete for deals on behalf of Upfront?
SS: I have this network of incredible entrepreneurs around the world because of companies across my career that I’ve helped acquire or tried to acquire or who are running businesses; I also [have relationships with] VCs at different stages who actively spot businesses around the world [and introduce them to corp dev teams]. You might also know that Twitter has a diversity and inclusion program where they intend to have 25% of leadership be diverse over the next several years, so my team was often involved in finding the best ways to find diverse targets to buy. I also led a series of LP investments into newly emerging funds, some LatinX-founded, some women-founded, some Black-founded, some that were diverse from a geographic standpoint that are scouting companies in far flung places . . .
TC: Does Twitter also make direct investments?
SS: We did direct investments but [backing fund managers] is a more leveraged approach. Most of them are seed funds and they’ll in turn invest in 30 to 60 companies each. But yes, I scouted companies in far flung places, including [India’s] ShareChat where I served on the board for two years. [Editor’s note: TechCrunch reported earlier this year that Twitter explored buying ShareChat at an earlier point; the company has since raised numerous rounds of funding and was most recently valued by its investors at nearly $3 billion.]
TC: You have a lot of relationships, but it would still seem really hard to compete for growth-stage deals when so many other outfits are now investing there, too. How do you plan to compete?
SS: I will clearly be drawing on those networks to find deals. I’ll be investing in sectors where Upfront has already invested in, but initially I’ll be double-clicking [in areas[ I have strong interest in, including around the creator economy ecosystem, because I did so much of that at Twitter, and “Web 3.0,” this permissionless [evolution that Twitter is also focused on]. But I won’t kid myself. You compete by learning what your value proposition is. At Twitter, my strategy was winning on speed, knowing people earlier, and [underscoring] Twitter’s value proposition [to close deals]. I can’t talk about my [VC] strategy without having implemented yet; I’ll have to figure out what’s most interesting to entrepreneurs that the megafunds don’t offer.
Australian buy now, pay later (BNPL) company Zip this week acquired South Africa-based BNPL player Payflex for an undisclosed amount.
It’s a piece of news that once again highlights the hype around BNPL services and the quest for global dominance among the leading players.
This year we have covered BNPL services from the likes of Afterpay, Klarna and Affirm. And tech and payments giants Apple, Square, PayPal and Visa have joined in the action, too, massively funneling cash to their respective BNPL initiatives (for one, Square acquired Afterpay).
Australia, the U.K. and the U.S. are key markets for BNPL services. The U.S. market is so big that the number of BNPL service users is expected to hit 45 million by year’s end, representing an 81% growth from last year. But despite its Western focus, BNPL is exploding in other markets driven by a collective effort from local and global players.
For instance, in the Middle East, companies like tabby and Tamara have raised millions in debt and equity financing to provide BNPL services. Also, Checkout is a significant shareholder in Tamara; Afterpay is one in PostPay, while Zip acquired Spotii for $26 million after initially investing in the company in December 2020.
Spotii isn’t the only acquisition Zip has made this past year. The Australian company also bought U.S.-based QuadPay and Twisto, a BNPL service in the Czech Republic, to expand footprints in both regions.
Payflex is the latest addition to that list. The company, founded in 2017, claims to be the first and largest BNPL player in South Africa with more than 1,000 merchants and 135,000 customers. Before fully acquiring Payflex, Zip had a 25% stake when it invested in the South African BNPL service six months ago.
Zip’s entry to Africa is important for several reasons. First, the continent is a largely untapped market that has enormous growth potential.
Credit appetite on the continent is very much in its infancy compared to Western markets, but it is growing rapidly. These days, people take loans to finance their needs at ridiculous interest rates while lending companies report low NPL ratios. Think of what happens when these consumers get a taste of low or no-interest alternative financing options that BNPL players like Zip provide: adoption rates will be off the charts.
Second, there’s a lack of infrastructure and BNPL innovation that only new entrants like Zip can execute because it has a large monetary chest.
And with the absence of credit cards and data on the continent, Zip can provide a competitive advantage with its technology, gather alternative data and build creditworthiness for customers in South Africa and other markets it plans to expand “with sizable underbanked, digitally savvy populations.”
Two of those markets are Egypt and Nigeria. If Zip expands to these regions, it will face competition from local players like Carbon, Shahry, M-Kopa, CredPal and CDCare, which are already pulling their weight. African e-commerce giant Jumia is also rumored to be revamping its BNPL service; it started one years ago but was discontinued after gaining little traction.
That said, Africa doesn’t have a concrete market leader yet since most of these products are yet to reach mass scale. On the other hand, Zip has been quite aggressive with its expansion into other markets — evident in some of its numbers.
The company currently serves 51,000 merchants and 7.3 million customers across 12 markets. This fiscal year, June 2021, a period when most of its acquisitions have occurred, Zip hit $5.8 billion in total transaction volume, up 176% year-over-year (YoY).
Zip numbers are impressive, but if there’s anything we’ve learnt from the BNPL business it’s that it isn’t a winner-takes-all market. If Zip makes significant headway and cracks the market, expect more global BNPL players to bring the heat. Also, local players will be encouraged to step up their game because global players have surplus cash to burn if they move into Africa, which is a win-win for the market.
Sunday, an insurtech startup based in Bangkok, announced it has raised a $45 million Series B. Investors include Tencent, SCB 10X, Vertex Growth, Vertex Ventures Southeast Asia & India, Quona Capital, Aflac Ventures and Z Venture Capital. The company says the round was oversubscribed, and that it doubled its revenue growth in 2020.
Founded in 2017, Sunday describes itself as a “full-stack” insurtech, which means it handles everything from underwriting to distribution of its policies. Its products currently include motor and travel insurance policies that can be purchased online, and Sunday Health for Business, a healthcare coverage program for employers. Sunday also offers subscription-based smartphone plans through partners.
The company uses AI and machine learning-based technology underwrite its motor insurance and employee health benefits products, and says its data models also allow it to automate pricing and scale its underwriting process for complex risks. Sunday says it currently serves 1.6 million customers.
The new funding will be used to expand in Indonesia and develop new distribution channels, including insurance agents and SMEs.
Insurance penetration is still relatively low in many Southeast Asian markets, including Indonesia, but the industry is gaining traction thanks to increasing consumer awareness. The COVID-19 pandemic also drove interest in financial planning, including investment and insurance, especially health coverage.
In a statement, Sunday co-founder and chief executive officer Cindy Kuo said, “Awareness for health insurance will continue to increase and we believe more consumers would be open to shop for insurance online. We plan to expand our platform architecture to offer retail insurance to our health members and partners while we continue to grow our portfolio in Thailand and Indonesia.”
Shepherd, an insurtech startup focused on the construction market, has closed a $6.15 million seed round led by Spark Capital. The funding event comes after the startup raised a pre-seed round in February led by Susa Ventures, which also participated in Shepherd’s latest fundraising event.
Thinking broadly, Shepherd fits into a theme of neoinsurance providers selling more to other companies than to consumers. Insurtech startups serving consumers enjoyed years of venture capital backing only to find their public debuts met with early optimism followed quickly by eroding share prices.
But companies like Shepherd — and Blueprint Title earlier this week — are wagering on there being margin elsewhere in the insurance world to attack. For Shepherd, the construction market is its target, an industry that it intends to carve into starting with excess liability coverage.
The company’s co-founder and CEO, Justin Levine, told TechCrunch that contractors in the construction space have a number of insurance requirements, including general liability, commercial auto and so forth. But construction projects often also require more liability coverage, which is sold as excess or umbrella policies.
Targeting the middle-market of the construction space — companies doing $25 million to $250 million in projects per year, in its view — Shepherd wants to lean on technology as a way to help underwrite customers.
Levine said that his company’s offering will have two core parts. The first is what you expected, namely a complete digital experience for customers. The CEO likened its digital offering to table stakes for the insurtech world. We agree. But the company gets more interesting when we consider its second half, namely its work to partner with construction tech providers to help it make underwriting decisions.
The startup has partnered with Procore, for example, a company that invested in its business.
The concept of leaning on third-party software companies to help make underwriting decisions makes some sense — companies that are more technology-forward in terms of adopting new techniques and methods won’t have the same underwriting profile as companies that don’t. Generally, more data makes for better underwriting decisions; linking to the software that helps construction companies function makes good sense from that perspective.
The CEO of Procore agrees, telling TechCrunch that an early customer of his business said that its product is “a risk management solution disguised as construction management software.” The more risk that is managed, the lower Shepherd’s loss ratios may prove over time, allowing it to better compete on price.
On the subject of price, Levine thinks that the construction insurance market is suffering at the moment. Rising settlement costs have led to some legacy insurance books in the space with larger-than-anticipated losses, pushing some providers to raise prices. Levine’s view is that that Shepherd’s ability to enter its market without a legacy book of business will help it offer competitive rates.
Excess liability coverage is the “wedge” that Shepherd intends to use to get into the construction insurance market, it said, with intention of launching other products in time. The startup is attacking excess liability coverage first, its CEO said, because it’s the place of maximum pain in the larger construction insurance market.
Frankly, TechCrunch finds the B2B neoinsurance startup market fascinating. Selling policies to consumers has a particular set of cost of goods sold (COGS) — varying based on the type of coverage, of course — and often stark go-to-market costs. Furthermore, customer acquisition costs (CACs) can prove irksome when going up against national brands with huge budgets. Perhaps the business insurance market will prove more lucrative for upstart tech companies. Venture investors are certainly willing to place that particular wager.
Natalie Sandman led the deal for Spark, telling TechCrunch that when she first encountered Shepherd it was working on a different project, but that when it shifted its focus, it struck a chord with her firm. The investor said that the idea of bringing new data to the construction insurance underwriting process may help the company make smarter decisions. In the insurance world, better underwriting choices mean more profitable coverage. Which means greater future cash flows. And we all know that that means for value creation.
Botify has raised a $55 million Series C funding round led by InfraVia Growth with Bpifrance’s Large Venture fund also participating. The company has created a search engine optimization (SEO) platform so that your content is better indexed and appears more often in search results.
Existing investors Eurazeo and Ventech are also investing in the startup once again. Nicolas Herschtel from InfraVia and Antoine Izsak from Bpifrance will join the board of directors. Valuation has tripled since the company’s previous funding round.
While there are a ton of good and bad practices in the SEO industry, Botify defines itself as “white-hat company”. They respect the terms of services of search engines, they don’t scrape search results for insights, they don’t create shady backlinks on other websites.
“We’re going to optimize every step of the search funnel from first the quality of the website, how it is designed, how is the content going to be enriched with, etc.” co-founder and CEO Adrien Menard told me.
There are now three different components in the Botify product suite. The startup first released an analytics tool that gives you insights about your website. Basically, it lets you see how a crawler analyzes your site.
The company then released Botify Intelligence, which hands you a prioritized todo list of things you can do to improve your SEO strategy. And now, the company is also working on automation with Botify Activation. When Google’s search engine bot queries your site, Botify can take over and answer requests directly.
“We’re not trying to trick Google’s algorithm. We’re defining Botify as the interface between search engines and our clients’ websites. Search engines are going to access higher quality content. And it’s probably cheaper than with a normal process,” Menard said.
Companies aren’t necessarily using all three tools. They may start with analytics and take it from there. “You can use different products depending on the size of the company,” Menard said.
Over the past few years, Google has increased the number of ad slots on search results. It also promotes its own services, such as YouTube and Google Maps, before you can see the organic search results. I asked Adrien Menard whether that could be a concern for the future of Botify.
“I agree with you that we’re seeing more and more sections of the search results coming from first-party or paid results,” he said. “But the traffic generated by organic results is growing. It represents 30% of the traffic of the websites of our customers and this average is not decreasing.”
According to him, search keeps getting bigger and bigger. When you invest in search, you can see a clear return on investment when it comes to online sales, traffic, etc.
Right now, Botify has 500 customers, such as Expedia, L’Oréal, The New York Times, Groupon, Marriott, Condé Nast, Crate & Barrel, Fnac Darty, Vestiaire Collective and Farfetch.
With today’s funding round, the company wants to improve its automation capabilities, sign partnerships with more tech companies and increase its footprint with new offices in the Asia-Pacific region.
Last summer, Jeeves was participating in Y Combinator’s summer batch as a fledgling fintech.
This June, the startup emerged from stealth with $31 million in equity and $100 million in debt financing.
Today, the company, which is building an “all-in-one expense management platform” for global startups, is announcing that it has raised a $57 million Series B at a $500 million valuation. That’s up from a valuation of just north of $100 million at the time of Jeeves’ Series A, which closed in May and was announced in early June.
While the pace of funding these days is unlike most of us have ever seen before, it’s pretty remarkable that Jeeves essentially signed the term sheet for its Series B just two months after closing on its Series A. It’s also notable that just one year ago, it was wrapping up a YC cohort.
Jeeves was not necessarily looking to raise so soon, but fueled by its growth in revenue and spend after its Series A, which was led by Andreessen Horowitz (a16z), the company was approached by dozens of potential investors and offered multiple term sheets, according to CEO and co-founder Dileep Thazhmon. Jeeves moved forward with CRV, which had been interested since the A and built a relationship with Thazhmon, so it could further accelerate growth and launch in more countries, he said.
CRV led the Series B round, which also included participation from Tencent, Silicon Valley Bank, Alkeon Capital Management, Soros Fund Management and a high-profile group of angel investors including NBA stars Kevin Durant and Andre Iguodala, Odell Beckham Jr. and The Chainsmokers. Notably, the founders of a dozen unicorn companies also put money in the Series B including (but not limited to) Clip CEO Adolfo Babatz; QuintoAndar CEO Gabriel Braga; Uala CEO Pierpaolo Barbieri, BlockFi CEO Zac Prince; Mercury CEO Immad Akhund; Bitso founder Pablo Gonzalez; Monzo Bank’s Tom Blomfield; Intercom founder Des Traynor; Lithic CEO Bo Jiang as well as founders from UiPath, Auth0, GoCardless, Nubank, Rappi, Kavak and others.
The “fully remote” Jeeves describes itself as the first “cross country, cross currency” expense management platform. The startup’s offering was live in Mexico and Canada and today launched in Colombia, the United Kingdom and Europe as a whole.
Thazhmon and Sherwin Gandhi founded Jeeves last year under the premise that startups have traditionally had to rely on financial infrastructure that is local and country-specific. For example, a company with employees in Mexico and Colombia would require multiple vendors to cover its finance function in each country — a corporate card in Mexico and one in Colombia and another vendor for cross-border payments.
Jeeves claims that by using its platform’s proprietary Banking-as-a-Service infrastructure, any company can spin up their finance function “in minutes” and get access to 30 days of credit on a true corporate card (with 4% cash back), non card payment rails, as well as cross-border payments. Customers can also pay back in multiple currencies, reducing FX (foreign transaction) fees.
For example, a growing business can use a Jeeves card in Barcelona and pay it back in euros and use the same card in Mexico and pay it back in pesos, reducing any FX fees and providing instant spend reconciliation across currencies.
Thazhmon believes that the “biggest thing” the company is building out is its own global BaaS layer, that sits across different banking entities in each country, and onto which the end user customer-facing Jeeves app plugs into.
Put simply, he said, “think of it as a BaaS platform, but with only one app — the Jeeves app — plugged into it.”
Image Credits: Jeeves
The startup has grown its transaction volume (GTV) by more than 5,000% since January, and both revenue and spend volume has increased more than 1,100% (11x) since its Series A earlier this year, according to Thazhmon.
Jeeves now covers more than 12 currencies and 10 countries across three continents. Mexico is its largest market. Jeeves is currently beta testing in Brazil and Chile and Thazhmon expects that by year’s end, it will be live in all of North America and Europe. Next year, it’s eyeing the Asian market, and Tencent should be able to help with that strategically, he said.
“We’re building an all-in-one expense management platform for startups in LatAm and global markets — cash, corporate cards, cross-border — all run on our own infrastructure,” Thazhmon told TechCrunch. “Our model is very similar to that of Uber’s launch model where we can launch very quickly because we don’t have to rebuild an entire infrastructure. When we launch in countries, we actually don’t have to rebuild a stack.”
Jeeves’ user base has been doubling every 60 days and now powers more than 1,000 companies across LatAm, Canada and Europe, including Bitso, Kavak, RappiPay, Belvo, Runa, Moons, Convictional, Muncher, Juniper, Trienta, Platzi, Worky and others, according to Thazhmon. The company says it has a current waitlist of over 15,000.
Jeeves plans to use its new capital toward its launch in Colombia, the U.K. and Europe. And, of course, toward more hiring. It’s already doubled its number of employees to 55 over the past month.
Former a16z partner Matt Hafemeister was so impressed with what Jeeves is building that in August he left the venture capital firm to join the startup as its head of growth. In working with the founders as an investor, he concluded that they ranked “among the best founders in fintech” he’d ever interacted with.
The decision to leave a16z also related to Jeeves’ inflection point, Hafemeister said. The startup is nearly doubling every month, and had already eclipsed year-end goals on revenue by mid-year.
“It is evident Jeeves has found early product market fit and, given the speed of execution, I see Jeeves establishing itself as one of the most important fintech companies in the next few years,” Hafemeister told TechCrunch. “The company is transitioning from a seed company to a Series B company very quickly, and being able to help operationalize processes and play a role in their growth and maturity is an incredible opportunity for me.”
CRV General Partner Saar Gur (who is also an early investor in DoorDash, Patreon and Mercury) said he was blown away by Jeeves’ growth and how it has been “consistently hitting and exceeding targets month over month.” Plus, early feedback from customers has been overwhelmingly positive, Gur said.
“Jeeves is building products and infrastructure that are very difficult to execute but by doing the ‘hard things’ they offer incredible value to their customers,” he told TechCrunch. “We haven’t seen anyone build from the ground up with global operations in mind on day one.”
Panorama Education, which has built out a K-12 education software platform, has raised $60 million in a Series C round of funding led by General Atlantic.
Existing backers Owl Ventures, Emerson Collective, Uncork Capital, the Chan Zuckerberg Initiative and Tao Capital Partners also participated in the financing, which brings the Boston-based company’s total raised since its 2012 inception to $105 million.
Panorama declined to reveal at what valuation the Series C was raised, nor did it provide any specific financial growth metrics. CEO and co-founder Aaron Feuer did say the company now serves 13 million students in 23,000 schools across the United States, which means that 25% of American students are enrolled in a district served by Panorama today.
Over 50 of the largest 100 school districts and state agencies in the country use its platform. In total, more than 1,500 school districts are among its customers. Clients include the New York City Department of Education, Clark County School District in Nevada, Dallas ISD in Texas and the Hawaii Department of Education, among others.
Since March 2020, Panorama has added 700 school districts to its customer base, nearly doubling the 800 it served just 18 months prior, according to Feuer.
Just what does Panorama do exactly? In a nutshell, the SaaS business surveys students, parents and teachers to collect actionable data. Former Yale graduate students Feuer and Xan Tanner started the company in an effort to figure out the best way for schools to collect and understand feedback from their students.
With the COVID-19 pandemic leading to many students attending school virtually, the need to address students’ social and emotional needs has probably never been more paramount. Many children and teenagers have suffered depression and anxiety due to being isolated from their peers, and some believe the impact on their mental health has been even greater than any negative academic repercussions.
Students, for example, are asked questions to determine how safe they feel at school, how much they trust their teachers and how much potential they think they have.
“We help schools survey students, teachers and parents to understand the environment and experiences of the school,” Feuer told TechCrunch. “And then we help schools measure social and emotional development so that in the same way you might have rigorous data on math, you can now get information about social emotional learning and well-being.”
In the past year, for example, 25 million people across the country have taken a Panorama survey, which has resulted in quite a bit of information. The company is able to integrate with all of a district’s existing data systems so that it can pull together a “panorama” of its data, plus the information about a student.
“It’s really powerful because a teacher can then log in and see everything about a student in one place,” Feuer said. “But most importantly, we give teachers the tools to plan actions for a student.”
The company claims that by using its software, districts can see benefits such as improved graduation rates, fewer behavior referrals, more time engaged in learning and students building “stronger supportive relationships with adults and peers.”
Panorama plans to use its new capital toward continued product development, further deepening its district partnerships and naturally, toward hiring. Panorama currently has about 250 employees.
Notably, Panorama had not raised capital in a couple of years simply because, according to Feuer, it did not need the money.
“We met General Atlantic and realized the opportunity to reach the next level of impact for our schools,” he told TechCrunch. “But it was important to me that we didn’t need to raise the money. We chose to because we want to be able to invest in the business.”
Tanzeen Syed, managing director at General Atlantic, said edtech has been an important area of focus for this firm.
“When we looked at the U.S. education system, we thought that there was a massive opportunity and that we’re in the very early innings of using software and technology to really enhance the student experience,” he said.
When it came to Panorama, he believes “it’s not just a business” for the company.
“They truly and deeply care about providing students and administrators with the tools to make the student experience better,” Syed told TechCrunch. “And they’re maniacally focused on developing the sort of product to allow them to do that. In addition to that, we spoke with a lot of schools and districts and the feedback came back consistently positive.”
First, some housekeeping: Thanks to our new corporate parents, TechCrunch has the day off tomorrow, so consider this the last chapter of The Exchange for this week. (The newsletter will go out Saturday as always.) Also, Alex is off next week. Anna is taking on next week’s newsletter and may have a column or two on deck as well.
But before we slow down for a few days, let’s chat about the most recent Y Combinator Demo Day in thematic detail.
If you caught the last few Equity episodes, some of this will be familiar, but we wanted to put a flag in the ground for later reference as we cover startups for the rest of the year.
The Exchange explores startups, markets and money.
What follows is a roundup of trends among Y Combinator startups and how they squared with our expectations.
In a group of nearly 400 startups, you might think it’d be hard to find a category that felt overrepresented, but we’ve managed.
To start, we were surprised by the sheer number of startups in the cohort that were pursuing software models that incorporated no-code and low-code techniques. We expected some, surely, but not the nearly 20 that we compiled this morning.
Startups in the YC batch are building no-code and low-code tools to help developers build faster internal workflows (Tantl), build branded real estate portals (Noloco), sync data between other no-code tools (Whalesync), automate HR (Zazos), and more. Also in the mix were BrightReps, Beau, Alchemy, Hyperseed, Enso, HitPay, Whaly, Muse, Abstra, Lago, Inai and Breadcrumbs.io.
At least 18 companies in the group name-dropped no- and low-code in their pitches. They are taking on a host of industries, from finance and real estate to sales and HR. In short, no- and low-code tools are cropping up in what feels like every sector. It appears that the startup world has decided that helping non-developers build their own tools, workflows and apps is a trend here to stay.
Challenger bank Point has raised a $46.5 million Series B funding round. The company offers an account associated with a debit card. And the startup positions itself as a premium debit card company and tries to offer credit card rewards with debit cards.
Existing investor Peter Thiel's Valar Ventures is investing more money in the company and leading the Series B round. Other investors include Breyer Capital, YC Continuity and Human Capital. The company raised a $10.5 million Series A round 18 months ago and a seed round before that, which means that Point has raised $60 million in total.
Point wants to build the anti-credit card. The company tries to keep what’s best about credit cards but leave behind what’s not so good. Many people think credit cards are a slippery slope. If you spend too much money without realizing that you’re not going to be able to make ends meet, you’ll pay interests. Those interests can even make it harder to pay back your credit card debt.
That’s why credit card incentives are both attractive and scary. If you have enough savings or if you earn a lot of money, paying your credit card bill is not going to be an issue. But that’s not always the case.
Point tells you that you should ditch your credit card altogether. When you open a Point account, you can top it up with another debit card or set up direct deposits with your employer. Opening a Point account currently costs $49 per year. You get two free ATM withdrawals per month and you don’t pay any foreign transaction fees.
After that, you can safely spend money with your Point card. You know that you have enough money to pay for your purchases as it’s a debit card. Every time you want to buy something expensive, you have to top up your account first.
Point users earn points with every purchase. You get 5x points on subscriptions, such as Spotify and Netflix, 3x points on food deliveries and ride sharing, and 1x points on everything else. If you pay with your Point card, you also get trip cancellation insurance, car rental insurance, global travel assistance, phone insurance and new purchase insurance.
You can control the Point card from the Point app — you can lock it and unlock it whenever you want and you can choose to receive notifications whenever you want. The Point debit card also works with Apple Pay and Google Pay.
With today’s funding round, the company plans to hire more people, launch new features and introduce new products. In other words, don’t expect any major changes. But the company now has more money to expand more rapidly.
Image Credits: Point
HomeLight, which operates a real estate technology platform, announced today that it has secured $100 million in a Series D round of funding and $263 million in debt financing.
Return backer Zeev Ventures led the equity round, which also included participation from Group 11, Stereo Capital, Menlo Ventures and Lydia Jett of the SoftBank Vision Fund. The financings bring the San Francisco-based company’s total raised since its 2012 inception to $530 million. The equity financing brings HomeLight’s valuation to $1.6 billion, which is about triple of what it was when it raised its $109 million in debt and equity in a Series C that was announced in November of 2019.
Zeev Ventures led that funding round, as well as its Series A in 2015.
The latest capital comes ahead of projected “3x” year-over-year growth, according to HomeLight founder and CEO Drew Uher, who projects that the company’s annual revenue will triple to over $300 million in 2021. Doing basic math, we can deduce that the company saw around $100 million in revenue in 2020.
Over the years, like many other real estate tech platforms, HomeLight has evolved its model. HomeLight’s initial product focused on using artificial intelligence to match consumers and real estate investors to agents. Since then, the company has expanded to also providing title and escrow services to agents and home sellers and matching sellers with iBuyers. In July 2019, HomeLight acquired Eave as an entry into the (increasingly crowded) mortgage lending space.
“Our goal is to remove as much friction as possible from the process of buying or selling a home,” Uher said.
In January 2020, HomeLight launched its flagship financial products, HomeLight Trade-In and HomeLight Cash Offer. Since then, it has grown those products by over 700%, Uher said, in part fueled by the pandemic.
HomeLight’s Trade-In product gives its clients greater control over the timeline of their move and ability to transact, and Cash Offer gives people a way to make all cash offers on homes, “even if they need a mortgage,” he said.
“The pandemic only highlighted many of the pain points in the real estate transaction process that we’ve been focused on solving since our founding,” Uher told TechCrunch. “Between the real estate industry’s historic information asymmetry, outdated processes and unreasonable costs — not to mention today’s record-low inventory and all-time high bidding wars — buying or selling a home can be an incredibly difficult process, even without the challenges put in place by a global pandemic.”
Image Credits: HomeLight
Then in August 2020, the company acquired Disclosures.io and launched HomeLight Listing Management, with the goal of making it easier for agents to share property information, monitor buyer interest and manage offers in one place.
In June of 2021, HomeLight appointed Lyft chairman and former Trulia CFO Sean Aggarwal to its board.
Uher founded HomeLight after he and his wife felt the pain of trying to buy a home in the competitive Bay Area market.
“The process of buying a home in San Francisco was so frustrating it made me want to bang my head against the wall,” Uher told me at the time of HomeLight’s Series C. “I realized there were so many things wrong with the real estate industry. I went through a few real estate agents before finding the right match. So when I did find one, it made me feel empowered to compete and win against the other buyers.”
He started HomeLight with a single product, its agent matching platform, which uses “proprietary machine-learning algorithms” to analyze millions of real estate transactions and agent profiles. It claims to connect a client to a real estate agent on average “every 90 seconds.”
Over the years, Uher said that hundreds of thousands of agents have applied to be a part of the HomeLight agent network and that it has worked with over 1 million homebuyers and sellers in the U.S. Today, the company works closely with the top 28,000 of those agents across the country. HomeLight maintains that it is not trying to replace real estate agents, but instead work more collaboratively with them.
Uher said the company plans to use its new capital in part toward expanding to new markets its Trade-In and Cash Offer operations. HomeLight Trade-In and Cash Offer are currently available in California, Texas and, more recently, in Colorado.
“We plan to expand as quickly as we can across the entire country,” Uher said. “We also plan to hire aggressively in 2021 and beyond.”
HomeLight presently has over 500 employees, up from about 350 at the end of last year. The company has offices in Scottsdale, Arizona, San Francisco, New York, Seattle and Tampa, and plans to open new sites throughout the U.S. in the coming months.
Oren Zeev, founding partner at Zeev Ventures, said he believes that HomeLIght is better positioned than any other proptech company “to reinvent the transaction experience” for agents and their clients.
“With the onset of iBuyers and other technology introduced in the past decade, many proptech companies are building products to cut agents out of the transaction process entirely,” Zeev wrote via email. “This is where HomeLight uniquely differs — and excels — from its competitors…They’re in the perfect position to revolutionize the industry.”
French startup Cajoo is raising some money in order to compete more aggressively in the new and highly competitive category of food delivery companies. Interestingly, the lead investor in today’s funding round is Carrefour, the supermarket giant. Headline (formerly e.ventures) is also participating in the round as well as existing investors Frst and XAnge.
Carrefour’s investment isn’t just a financial investment. Cajoo will take advantage of Carrefour’s purchasing organization. This way, Cajoo will be able to offer more products to its customers.
Cajoo is part of a group of startups that try to create a whole new category of grocery deliveries. The company operates dark stores and manages its own inventory of products. Customers can then order items without having to think whether they’ll be home when the delivery happens. Around 15 minutes later, a delivery person shows up with your groceries.
“It’s a category that is incredibly capital intensive,” co-founder and CEO Henri Capoul told me. “We own the entire value chain. If we want to expand, we have to launch hubs, we have to buy products.”
With $40 million on its bank account, Cajoo now wants to solidify its strong market position in its home country. The service is currently live in 10 French cities — Paris, Neuilly-sur-Seine, Levallois-Perret, Boulogne-Billancourt, Lille, Lyon, Toulouse, Bordeaux and Montpellier.
And yet, the company is already facing some competition in Paris for instance. But Henri Capoul sees it as market validation. “There are a lot of players that have raised a lot of money. But it’s a regulated market. We own all our products and we have to comply with regulation. We can’t sell everything at a loss,” he said.
While Henri Capoul expects some sort of consolidation down the road, the company is doing everything to remain a big, independent company. “European champions will be national champions first. Right now, some players can overcome a lack of products with discounts. I’m convinced that the future of this category will be represented by three or four local players that are strong in other countries.” Henri Capoul said.
Cajoo is currently the only French company operating at this scale in this category. So it’s clear that the company sees itself as a market leader in France first. But the company is already looking at other markets as well — Belgium, Italy, Spain, maybe Portugal or Eastern Europe countries.
But first, the company wants to grow its team. The number of employees working in the HQ is going to double by the end of the year. Operations and delivery teams will also grow quite drastically. The company expects a fivefold increase by the end of the year on this front.
Some delivery people are directly hired by Cajoo. But the company is also relying on partners — both contracting companies and freelancers. So the company faces some of the challenges that Deliveroo and Uber Eats also face.
Cajoo might be a great business idea, but users will have to ask themselves whether it really solves an important need or they’re just using it because it exists. Instant delivery companies could have a real impact on brick-and-mortar shops over the long run.
The financing comes just just over two months after the startup raised $27 million in an equity funding round led by Norwest Venture Partners.
Brenton Howland, Ruben Amar and Alex Kopco founded New York-based Forum Brands in the summer of 2020, during the height of the COVID-19 pandemic.
“We’re buying what we think are A+ high-growth e-commerce businesses that sell predominantly on Amazon and are looking to build a portfolio of standalone businesses that are category leaders, on and off Amazon,” Howland told me at the time of the company’s last raise. “A source of inspiration for us is that we saw how consumer goods and services changed fundamentally for what we think is going to be for decades and decades to come, accelerating the shift toward digital.”
Since we covered the company in June, Forum Brands says it has acquired several new brands, including Bonza, a seller of pet products, and Simka Rose, a baby-focused brand specializing in eco-friendly products. Simka sells in the U.S. and the EU and is an example of how Forum is expanding globally, Amar said.
Howland and Amar emphasize that the Forum team continues to focus on quality over quantity when evaluating potential acquisitions. Although they meet with 15-20 founders a week, they are selective in which companies they choose to acquire.
“We continue to be a quality-first buyer, and not quantity-driven,” Amar said, noting that the company will still help a company build its brand even if it does not yet meet Forum’s quality threshold or if the founders are just not yet ready to sell.
The new funds will be used to, naturally, acquire more e-commerce companies. As part of the debt financing, Sajal Srivastava, co-CEO and co-founder of TriplePoint Capital, will be joining Forum’s board of directors.
“We are impressed not only by Forum’s long-term strategy and ability to leverage technology and deep collective e-commerce and M&A experience but also by how Forum cultivates relationships with their sellers both before and after partnering with them,” he said in a written statement.
At the time of its June raise, Forum had about 20 employees. As of today, it has about 40.
Forum’s technology employs “advanced” algorithms and over 100 million data points to populate brand information into a central platform in real time, instantly scoring brands and generating accurate financial metrics.
On August 31, we covered the news that on the heels of Heroes announcing a $200 million raise to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same announced some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, closed on $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.
Private equity firm Apollo Global Management this morning announced that it has completed its acquisition of Yahoo (formerly known as Verizon Media Group, itself formerly known as Oath) from Verizon. The deal is worth $5 billion, with $4.25 billion in cash, plus preferred interests of $750 million. Verizon will be retaining 10% of the newly rebranded company.
“This is a new era for Yahoo,” Yahoo CEO (and former VZM head) Guru Gowrappan said in a release tied to the news. “The close of the deal heralds an exciting time of renewed opportunity for us as a standalone entity. We anticipate that the coming months and years will bring fresh growth and innovation for Yahoo as a business and a brand, and we look forward to creating that future with our new partners.”
There have been reports that Gowrappan might not stay on as CEO of Yahoo for the long term now that the deal has closed; for now he’s still at the helm.
In addition to its titular Yahoo properties (Mail, Sports, Finance, et al.), the group includes us, TechCrunch; AOL; Engadget; and interactive media brand, RYOT. All told, the umbrella brand encompasses around 900 million monthly active users globally and is currently the third-largest internet property, per Apollo’s figures.
The deal puts to a close a years-long effort by Verizon to make a comprehensive move into online media, specifically around adtech, which ultimately proved to be too costly, mostly unprofitable and, finally, not core enough to the telco’s bigger growth strategy.
The news comes during a tumultuous time for online media, amid increasing industry-wide consolidation, many felt within Verizon Media. Verizon acquired AOL in 2015 for $4.4 billion, followed by buying Yahoo for $4.5 billion two years later, combining the two legacy media properties into a combined group named Oath. At the end of 2018, Oath wrote down $4.6 billion, following the merger.
It’s not clear how a new owner will steer that large ship differently, but one strategy — standard practice for PE firms — could involve Apollo selling off parts of the business or rationalizing it in other ways.
However, for its part, Apollo has promised to continue investing in the newly acquired proprieties, and it has secured all jobs at the time of handover for at least an initial period. The bigger firm of Apollo has a massive set of TMT, holdings so it will be interesting to see how and if it leverages that, too.
“We look forward to partnering with Yahoo’s talented employee base to build on the company’s strong momentum and position the new Yahoo for long-term success as a standalone consumer internet and digital media leader,” Apollo Partner Reed Rayman said in the release. “We couldn’t be more excited about this next chapter for Yahoo as we look to invest in growth across the business, including accelerating its customer-first offerings and commerce capabilities, expanding its reach and enhancing the daily user experience.”
Blueprint Title, an insurtech startup working in the title insurance space, announced this morning that it closed a $16 million Series B. The new round was led by Forté Ventures. The startup previously raised an $8.5 million Series A in the final weeks of 2019.
While Blueprint is an insurtech startup and therefore fits into the neoinsurance cohort that we’ve tracked in recent quarters as a number of companies from the group have gone public, it’s somewhat distinct. Blueprint is different from the Roots and MetroMiles and Hippos that debuted via traditional IPOs or SPACs; it largely sells to business customers and has a very different product on offer.
The neoinsurance companies that went public in the last year and a half sell to consumers. Blueprint, in contrast, sells to professional groups looking for a better title insurance experience. That means its customer base is not made up of consumers hoping to cover their main residence, Blueprint CEO Steve Berneman told TechCrunch in an interview.
That means that the company’s go-to-market activities are distinct from its mates in the consumer-focused cohort and that its loss profile is very different.
Title insurance, Berneman said, has around a 1% to 4% claims rate, far lower than auto insurance, to pick an example. That means its risk profile is different, and its pricing less flexible; there’s less loss ratio to wring out of title insurance underwriting, so cost and delivery of service are even more important than in other insurance varietals.
According to the CEO, the title insurance market in the United States today is made up of four companies with around 90% market share. And thanks to rules requiring public pricing in many states, there’s alignment on pricing from some leading players. The result of market concentration and effective price harmonization is that Berneman thinks that the $18 billion title insurance business should really be a $10 billion market.
Our call with Blueprint was the first in which a startup discussed shrinking its market.
But the point is reasonable; if title insurance is mispriced, and Blueprint sells to corporate customers, it can likely offer profitable coverage at a lower-than-market price point — and grow quickly in the process. That appears to be the case, with the startup stating in a release that it anticipates 400% revenue growth in 2021 when compared to 2020.
That growth rate explains the Nashville-based company’s most recent round and what we presume was a stiff upsizing in its valuation.
As part of its funding round announcement, Blueprint also disclosed that it has purchased Southwest Land Title Insurance Company, an underwriting company. Berneman said that to shrink the title insurance market through more reasonable pricing, his company needs to be full-stack, i.e., both writing its own coverage and selling it. Otherwise, margins would leak on either side of its operations.
Blueprint, akin to Next Insurance, is a startup bet that selling insurance to business customers will prove to be a lucrative effort. Given that consumer-focused neoinsurance providers have seen Wall Street change its tune on their value, it will be interesting to watch this more B2B cohort grow and eventually debut.
Amplitude is going public in a direct listing that will see its shares trade on the Nasdaq under the ticker symbol “AMPL.” The company first announced its intention to direct list in July and filed its S-1 document in August.
The San Francisco-based startup lists major shareholders Battery, Benchmark, IVP, Sequoia and Jasmine Ventures in its S-1 filing. Each of those investors owns at least 5% of the company.
The Exchange explores startups, markets and money.
We’re curious why the company is direct listing instead of raising capital in its debut. We also want to understand how the company sees the future, because its product thesis is essentially a roadmap to its long-term growth; how investors value the company will in part hinge on whether Wall Street agrees with where Amplitude sees technology heading.
And we’ll do our usual work to understand the company’s revenue mix and quality, wrapping with some noodling on what it may be worth. Sound fun? Good. Let’s get into it.
Most S-1 filings are full of corporate babble that I don’t drag you through. After all, we don’t really need to chat about how a particular vertical SaaS company thinks that its chosen niche is a great market. You already know what the debuting concern thinks. But with Amplitude, I want to do a bit more.
Amplitude sells what it calls “digital optimization” software. In practice, that means its software helps other companies design better software.
The company thinks that the way that digital products are built has changed. Gone are the days, in its view, of trusting intuition when it comes to digital design choices. Instead, Amplitude expects that companies with digital products will instead lean on data-driven decision-making. Or as it phrased it in its filing, digital product design is leaving the “Mad Men” phase for a more “Moneyball” era.
Data is at the core of how Amplitude sees companies designing future products. But in its view, many companies currently rely on a collection of disparate software tools to collect data on their digital footprint. Amplitude thinks it has a better method of collecting digital user data — and learning from it.
How many of us have not switched insurance carriers because we don’t want to deal with the hassle of comparison shopping?
A lot, I’d bet.
Today, Insurify, a startup that wants to help people make it easier to get better rates on home, auto and life insurance, announced that it has closed $100 million in an “oversubscribed” Series B funding round led by Motive Partners.
Existing backers Viola FinTech, MassMutual Ventures, Nationwide, Hearst Ventures and Moneta VC also put money in the round, as well as new investors Viola Growth and Fort Ross Ventures. With the new financing, Cambridge, Massachusetts-based Insurify has now raised a total of $128 million since its 2013 inception. The company declined to disclose the valuation at which the money was raised.
Since we last covered Insurify, the startup has seen some impressive growth. For example, it has seen its new and recurring revenue increase by “6x” since it closed its Series A funding in the 2019 fourth quarter. Over the last three years, Insurify has achieved a CAGR (compound annual growth rate) of 151%, according to co-founder and CEO Snejina Zacharia. It has also seen consistent “2.5x” year-over-year revenue growth, she said.
Insurify has built a machine learning-based virtual insurance agent that integrates with more than 100 carriers to digitize — and personalize — the insurance shopping experience. There are others in the insurtech space, but none that we know of currently tackling home, auto and life insurance. For example, Jerry, which has raised capital twice this year, is focused mostly on auto insurance, although it does have a home product. The Zebra, which became a unicorn this year, started out as a site for people looking for auto insurance via its real-time quote comparison tool. Over time, it has also evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. But it too is mostly focused on auto.
Zacharia said that since Insurify’s Series A funding, it has expanded its home insurance marketplace, deepened its carrier integrations to provide users an “instant” purchase experience and launched its first two embedded insurance products through partnerships with Toyota Insurance Management Solutions and Nationwide (the latter of which also participated in the Series B funding round).
Image Credits: Insurify
Last year, when ShyScanner had to lay off staff, Insurify scooped up much of its engineering team and established an office in Sofia, Bulgaria.
Zacharia, a former Gartner executive, was inspired to start the company after she was involved in a minor car accident while getting her MBA at MIT. The accident led to a spike in her insurance premium and Zacharia was frustrated by the “complex and cumbersome” experience of car insurance shopping. She teamed up with CTO Tod Kiryazov to build Insurify, which the pair describe as a virtual insurance agent that offers real-time quotes.
“We decided to build the most trusted virtual insurance agent in the industry that allows for customers to easily search, compare and buy fully digitally — directly from their mobile phone, or desktop, and really get a very smart, personalized experience based on their unique preferences,” Zacharia told TechCrunch. “We leverage artificial intelligence to be able to make recommendations on both coverage as well as carrier selection.”
Notably, Insurify is also a fully licensed agent that takes over the fulfillment and servicing of the policies. Since the company is mostly working as an insurance agent, it gets paid new and renewed commission. So while it’s not a SaaS business, its embedded insurance offerings have SaaS-like monetization.
“Our goal is to provide an experience for the end consumer that allows them to service and manage all of their policies in one place, digitally,” Zacharia said. “We think that the data recommendations that the platform provides can really remove most of the friction that currently exists in the shopping experience.”
Insurify plans to use its fresh capital to continue to expand its operations and accelerate its growth plans. It also, naturally, wants to add to its 125-person team.
“We want to build into our API integrations so customers can receive real-time direct quotes with better personalization and a more tailored experience,” Kiryazov said. “We also want to identify more embedded insurance opportunities and expand the product functionality.”
The company also down the line wants to expand into other verticals such as pet insurance, for example.
Insurify intends to use the money in part to build brand awareness, potentially through TV advertising.
“Almost half of our revenue comes from self-directed traffic,” Zacharia said. “So we want to explore more inorganic growth.”
James “Jim” O’Neill, founding partner at Motive Partners and partner Andy Rear point out that online purchasing now accounts for almost all of the growth in U.S. auto insurance.
“The lesson from other markets which have been through this transition is that customers prefer choice, presented as a simple menu of products and prices from different insurers, and a straightforward online purchasing process,” they wrote via email. “The U.S. auto market is huge: even a slow transition to online means a massive opportunity for Insurify.”
In conducting their due diligence, the pair said they were impressed with how the startup is building a business model “that works for customers, insurers and white-label partners.”
Harel Beit-On, founder and general partner at Viola Growth, believes that the quantum leap in e-commerce due to COVID-19 will completely transform the buying experience in almost every sector, including insurance.
“It is time to bring the frictionless purchasing experience that customers expect to the insurance space as well,” she said. “Following our fintech fund’s recent investment in the company, we watched Insurify’s immense growth, excellent execution with customer acquisition and building a brand consumers trust.”
Cox Automotive is getting into the electric vehicle battery lifecycle business.
The company said Wednesday it acquired Oklahoma City-based Spiers New Technologies (SNT), a business that provides repair, remanufacturing, refurbishing and repurposing services for EV battery packs.
The two companies did not disclose the terms of the deal. Cox said the acquisition will help it establish its battery servicing offerings, particularly as “EVs take center stage.” It added that electric vehicles have completely difference service profiles than their internal combustion engine vehicle counterparts, and much of that comes down to the battery. EV battery support is particularly critical as the battery pack itself can comprise as much as 40% of the vehicle’s cost.
Even as federal investment in electric vehicles grow, and more automakers announce billions to build out their EV businesses, public skepticism remains. Eight out of 10 people not considering purchasing an EV are skeptical about the value of the battery and its useful life, according to research conducted by Cox.
This is not Cox’s only foray into EV battery management; the company also build a battery health diagnostic tool with SNT that uses Spiers’ software platform, Alfred. Cox said it would use the diagnostic tool to push greater confidence in electric vehicles, likening it to the way that Kelley Blue Book has provided greater transparency about ICE vehicles’ condition for consumers.
The acquisition will also give Cox a stake in the battery repurposing business. Spiers is one of a few companies that specializes giving EV batteries a “second life” after they are no longer fit in a vehicle. Around 80% to 90% of the batteries SNT receives are from OEMs, with the rest from auto dismantlers, the company told TechCrunch in an interview earlier this year. It’s a business segment that is likely only to grow as more EVs come off the roads, so the transaction is likely giving Cox a stake in end-of-life purposes as well.