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Goldman Sachs leads $23M in funding for Brazilian e-commerce startup Olist

By Mary Ann Azevedo

Olist, a Brazilian e-commerce marketplace integrator, has raised $23 million in a Series D round extension led by new investor Goldman Sachs Asset Management that brings its total Series D financing to $80 million.

Existing backer Redpoint Ventures, which first put money in Olist in 2015, also participated in the latest round. With this latest infusion, Olist has now raised over $126 million since its 2015 inception. This round is reportedly its last before the company plans to go public, according to Bloomberg.

SoftBank led the first tranch of Olist’s Series D in November as well as the company’s $46 million Series C in 2019. Valor Capital, Velt Partners, FJ Labs, Península and angel Kevin Efrusy had previously invested in the first tranche of the Series D.

Olist connects small businesses to larger product marketplaces to help entrepreneurs sell their products to a larger customer base. The company was founded with the mission of helping small merchants gain market share across the country through a SaaS licensing model to small brick and mortar businesses.

As of October 2019, Olist had more than 7,000 customers and used a drop-shipping model to send products directly from stores to clients around the country, allowing them to grow with a capital-light model.

Today, Olist says its platform provides tools that support “all the stages of an e-commerce operation” with the goal of helping merchants see “rapid increases in sales volume.” It currently has about 25,000 merchants on its platform.

The startup is no doubt benefiting from the pandemic-fueled e-commerce boom taking place all over the world as more people have turned to online shopping. Latin America, in general, has been home to increased e-commerce adoption.

Olist says its revenue tripled to a record number in the first quarter of 2021 compared to the previous year, although it did not provide hard figures. It also reportedly doubled revenue in 2020, according to Bloomberg.

Olist Store, the company’s flagship product, gives merchants a way to manage product listings, logistics and store payments. It also offers “a unique sales experience” through channels such as Mercado Livre, B2W and Via Varejo. The product saw a record GMV in the first half of the year, which was up 2.5 times over the same period in the prior year, the company said.

Last year, Olist launched a new product, Olist Shops, giving users the ability to create a virtual showcase “in less than 3 minutes” that also offers payment checkout tools and integration with logistics operators. Shops has interfaces in Portuguese, English, and Spanish, and since its launch, it has attracted more than 200,000 users in 180 countries, according to Olist.

“The pandemic has accelerated digitalizing business processes around the world, thus spurring e-commerce growth in a surprising way,” said Tiago Dalvi, Olist’s founder and CEO, in a written statement. 

The company plans to use its new capital to invest in technology and products, pursuing new mergers and acquisitions and boosting its internationalization process. This is on top of two acquisitions Olist made last year — Clickspace and Pax Logistica, which gave Olist entry into the heated logistics space with more than 4,000 registered drivers.

Specifically, CFO Eduardo Ferraz said the company is in preliminary discussions with ERPs, retailers, and companies with complementary solutions to its own.

“That is why we also decided to expand the investment in our Series D and bring Goldman Sachs as another relevant investor to our cap table,” he said.

David Castelblanco, managing director and head of Latin America Corporate and Growth Equity Investing for the Goldman Sachs Asset Management, said his firm was impressed with how Olist empowers SMBs to generate more revenue.

“Tiago and the Olist team are incredibly customer oriented and have created an innovative technological solution for their e-commerce clients,” he added.

Olist is operating in an increasingly crowded space. In March, we covered São Paulo-based Nuvemshop’s $90 million raise that was led by Silicon Valley venture firm Accel. That company has developed an e-commerce platform that aims to allow SMBs and merchants to connect more directly with their consumers. 

When wildfires rage close, Perimeter wants to tell you where to go

By Danny Crichton

Out the window, a fire is raging — and it’s moving ever closer. Confusion. Fear. A run for the car. Roads open and then suddenly closed by authorities. Traffic jams. A fire break that stalls the flames and then suddenly the flames jump, changing direction. Everyone has a plan for what to do — a plan that gets ripped up the second someone leaves their home to evacuate.

In the heat of the moment, everyone needs to know exactly what to do and where to go. Unfortunately, that information is rarely available in the format they need.

Bailey Farren’s family has experienced this four times living in California north of San Francisco. The wildfires are more common than ever with the aridness of climate change, yet the evacuations remain a pandemonium. While a student at Berkeley, she started investigating what was happening, and why her family constantly lacked the information they needed to get out safely and swiftly. “I thought that first responders had everything they need,” she said.

They don’t. Firefighters on the frontlines often lack the technology needed to relay accurate information to operations centers, which can then guide citizens on how to evacuate. With the pressing need to keep citizens up-to-date, most authorities rely on simple text messages to just tell everyone in, say, an entire county to evacuate, with nary more detail.

The Camp Fire in California in 2018, the worst fire in California’s history, triggered her to go beyond interviewing public safety officers to building a solution. She graduated in spring 2019, and at the same time, founded Perimeter with fellow Berkeley grad Noah Wu.

Perimeter is an emergency response platform designed to “bridge the gap between agencies and citizens,” in Farren’s words, by offering better two-way communication centered on geospatial data.

The company announced today that it has raised a $1 million pre-seed round led by Shawn Merani of Parade Ventures and Dustin Dolginow, social-impact organization One World and Alchemist Accelerator participating. Alchemist was the first money into the startup.

Perimeter CEO and co-founder Bailey Farren. Image Credits: Benjamin Farren via Perimeter.

Using Perimeter, citizens can upload geospatial-tagged information such as a new fire outbreak or a tree that has fallen and is now blocking a road. “Sometimes citizens have the most accurate and real-time information, before first responders show up — we want citizens to share that with … government officials,” Farren said. That information is not immediately disseminated to the public though. Instead, first responders can vet the information, ensuring that citizens are always using accurate information in planning their actions. “We do not want it to be a social-media platform,” she explained.

In the other direction, operations centers can use Perimeter to send citizens accurate and detailed evacuation maps with routes on where to go. Unlike with just a text message, Perimeter will send both the message and a URL, which can then display maps and real-time information on how a disaster is progressing.

Right now, the platform is distributed as a web app, so that citizens don’t need to have it pre-installed when a disaster strikes. Farren noted that the company is working on native apps as well, particularly for first responders who need robust offline capabilities due to intermittent cell signals that are typical in disaster zones.

Farren and her team have interviewed emergency management agencies extensively, and she says that her first customer is Palo Alto’s Office of Emergency Services. Over the past two fire seasons, “we had an R&D focus in that we were building hand-in-hand with agencies … and we took two fire seasons to beta test our technology,” she said.

The company has four full-time employees working remotely, but all based in California.

Updated April 12, 2021 to add Shawn Merani’s name as the lead at Parade Ventures. Also added a photo of Perimeter founder Bailey Farren.

Austin’s newest unicorn: The Zebra raises $150M after doubling revenue in 2020

By Mary Ann Azevedo

The Zebra, an Austin-based company that operates an insurance comparison site, has raised $150 million in a Series D round that propels it into unicorn territory.

Both the round size and valuation are a substantial bump from the $38.5 million Series C that Austin-based The Zebra raised in February of 2020. (The company would not disclose its valuation at that time, saying now only that its new valuation of over $1 billion is a “nice step up.”)

The Zebra also would not disclose the name of the firm that led its Series D round, but sources familiar with the deal said it was London-based Hedosophia. Existing backers Weatherford Capital and Accel also participated in the funding event.

The round size also is bigger than all of The Zebra’s prior rounds combined, bringing the company’s total raised to $261.5 million since its 2012 inception. Previous backers also include Silverton Partners, Ballast Point Ventures, Daher Capital, Floodgate Fund, The Zebra CEO Keith Melnick, KDT and others. 

According to Melnick, the round was all primary, and included no debt or secondary.

The Zebra started out as a site for people looking for auto insurance via its real-time quote comparison tool. The company partners with the top 10 auto insurance carriers in the U.S. Over time, it’s also “naturally” evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. It recently launched a dedicated home and auto bundled product, although much of its recent growth still revolves around its core auto offering, according to Melnick.

Like many other financial services companies, The Zebra has benefited from the big consumer shift to digital services since the beginning of the COVID-19 pandemic.

And we know this because the company is one of the few that are refreshingly open about their financials. The Zebra doubled its net revenue in 2020 to $79 million compared to $37 million in 2019, according to Melnick, who is former president of travel metasearch engine Kayak. March marked the company’s highest-performing month ever, he said, with revenue totaling $12.5 million — putting the company on track to achieve an annual run rate of $150 million this year. For some context, that’s up from $8 million in September of 2020 and $6 million in May of 2020.

Also, its revenue per applicant has grown at a clip of 100% year over year, according to Melnick. And The Zebra has increased its headcount to over 325, compared to about 200 in early 2020.

“We’ve definitely improved our relationships with carriers and seen more carrier participation as they continue to embrace our model,” Melnick said. “And we’ve leaned more into brand marketing efforts.”

The Zebra CEO Keith Melnick. Image courtesy of The Zebra

The company was even profitable for a couple of months last year, somewhat “unintentionally,” according to Melnick.

“We’re not highly unprofitable or burning through money like crazy,” he told TechCrunch. “This new raise wasn’t to fund operations. It’s more about accelerating growth and some of our product plans. We’re pulling forward things that were planned for later in time. We still had a nice chunk of money sitting on our balance sheet.”

The company also plans to use its new capital to do more hiring and focus strongly on continuing to build The Zebra’s brand, according to Melnick. Some of the things the company is planning include a national advertising campaign and adding tools and information so it can serve as an “insurance advisor,” and not just a site that refers people to carriers. It’s also planning to create more “personalized experiences and results” via machine learning.

“We are accelerating our efforts to make The Zebra a household name,” Melnick said. “And we want a deeper connection with our users.” It also aims to be there for a consumer through their lifecycle — as they move from being renters to homeowners, for example.

And while an IPO is not out of the question, he emphasizes that it’s not the company’s main objective at this time.

“I definitely try not to get locked on to a particular exit strategy. I just want to make sure we continue to build the best company we can. And then, I think the exit will make itself apparent,” Melnick said. “I’m not blind and am very aware that public market valuations are strong right now and that may be the right decision for us, but for now, that’s not the ultimate goal for me.”

To the CEO, there’s still plenty of runway.

“This is a big milestone, but I do feel like for us that this is just the beginning,” he said. “We’ve just scratched the surface of it.”

Early investor Mark Cuban believes the company is at an inflection point.

” ‘Startup’ isn’t the right word anymore,” he said in a written statement. “The Zebra is a full fledged tech company that is taking on – and solving – some of the biggest challenges in the $638B insurance industry.”

Accel Partner John Locke said the firm has tripled down on its investment in The Zebra because of its confidence in not only what the company is doing but also its potential.

“In an increasingly noisy insurance landscape that includes insurtechs and traditional carriers, giving consumers the ability to compare everything in one place is is more and more valuable,” he told TechCrunch. “I think The Zebra has really seized the mantle of becoming the go-to site for people to compare insurance and then that’s showing up in the numbers, referral traffic and fundraise interest.”

Scale CEO Alex Wang and Accel’s Dan Levine explain why sometimes unconventional VC deals are best

By Darrell Etherington

Few companies have done better than Scale at spotting a need in the AI gold rush early on and filling that gap. The startup rightly identified that one of the tasks most important to building effective AI at scale — the laborious exercise of tagging data sets to make them usable in properly training new AI agents — was one that companies focused on that area of tech would also be most willing to outsource. CEO and co-founder Alex Wang credits their success since founding, which includes raising over $277 million and achieving break-even status in terms of revenue, to early support from investors including Accel’s Dan Levine.

Accel haș participated in four of Scale’s financing rounds, which is all of them unless you include the funding from YC the company secured as part of a cohort in 2016. In fact, Levine wrote one of the company’s very first checks. So on this past week’s episode of Extra Crunch Live, we spoke with Levine and Wang about how that first deal came together, and what their working relationship has been like in the years since.

Scale’s story starts with a pivot, and with a bit of rule-breaking, too — Wang went off the typical YC book by speaking to investors prior to demo day when Levine cold-emailed him after seeing Scale on Product Hunt. The Product Hunt spot wasn’t planned, either — Wang was as surprised to see his company there as anyone else. But Levine saw the kernel of something with huge potential, and despite being a relative unknown in VC at the time, didn’t want to let the opportunity pass him, or Wang, by.

Both Wang and Levine were also able to provide some great feedback on decks submitted to our regular Pitch Deck Teardown segment, despite the fact that Levine actually never saw a pitch deck from Wang before investing (more on that later). If you’d like your pitch deck reviewed by experienced founders and investors on a future episode, you can submit your deck here.

Knowing when to bend the rules

As mentioned, Levine and Accel’s initial investment in Scale came from a cold email sent after the company appeared on Product Hunt. Wang said the team had just put out an early version of Scale, and then noticed that it was up on Product Hunt — it was submitted by someone else. The community response was encouraging, and it also led to Levine reaching out via email.

“One of the side effects of that, one of the outcomes, was that we got this cold email from Dan,” he said. “We really knew nothing about Dan until his cold email. So like many great stories that started with a bold, cold email. And we were pretty stressed about it at the time, because in YC, they tell you pretty definitively, ‘Hey, don’t talk to a VC during the batch,’ and we were squarely in the middle of the batch.”

Wang and the team were so nervous that they even considered “ghosting” Dan despite his obvious interest and the prestige of Accel as an investment firm. In the end, they decided to “go rogue” and respond, which led to a meeting at the Accel offices in Palo Alto.

Ocean Solutions Accelerator doubles down on blue economy with new track for later-stage companies

By Devin Coldewey

The planet-loving folks at the Sustainable Ocean Alliance started an accelerator a couple years back focusing on very early-stage companies, but this year they’re expanding the program to accept those that have already closed their first round. The mix of experimental and (comparatively) proven approaches may help diversify the accelerator’s growing network.

“Last year, amidst the onset of a global pandemic and mounting urgency related to solving the ocean’s greatest challenges, we received unprecedented demand for the Ocean Solutions Accelerator,” said the accelerator’s co-founder, Craig Dudenhoeffer. “It became clear to us that now more than ever, ocean tech startups need powerful community support, mentorship and access to those unique opportunities that truly propel their businesses. We decided to double our efforts and run two accelerator cohorts in 2021 in order to support 21 incredible innovators.”

Last year’s cohort included companies creating robotic fish, kelp-based foods, artificial reefs, aquaculture animal feed and other interesting and potentially breakthrough products. But one thing they all have in common with each other and those from previous years is they are nearly all very early stage.

Having a prototype and taking on a big problem or market is a great start, but it’s also where a lot of startups wash out. Companies like Coral Vita have powered through repeated disasters (in their case hurricanes and of course the pandemic) to raise money and move toward scaling up.

But others in the sadly undervalued conservation space still have a long road ahead before VCs think it’s worth taking a risk on them. Few check writers will see the problems and potential solutions up close and personal and make a personal connection with the driven and occasionally idealistic young founders, but those that I saw do that in Alaska were convinced.

This year the accelerator will have two sequential cohorts, an early-stage one in June for pre-seed companies and another in September for those that have raised a seed or A round and have “a strong MVP.” Applications for both are open until April 12th, with 21 spots available. That’s Monday, so better get to it.

“In expanding to two accelerator programs this year, we’re now able to provide highly curated content and tailored support to serve our entrepreneurs and meet them exactly where they’re at in their unique journeys to addressing our most critical ocean challenges,” said Dudenhoeffer.

While the organization is still small and the accelerator a relatively straightforward affair, the space that they are in is expanding and gaining credit among investors. Renewed attention and funding on climate change, ecological stewardship and alternative energy sources from the new Biden administration change the equations for startups and services in related industries; all of a sudden an idea that seemed wild a couple years ago makes perfect sense. With luck that means a bit of wind in the sails of entrepreneurs trying to save the world.

 

CaptivateIQ raises $46M for its no-code sales commissions platform

By Mary Ann Azevedo

CaptivateIQ, which has developed a no-code platform to help companies design customized sales commission plans, has raised $46 million in a Series B round led by Accel.

Existing backers Amity, S28 Capital, Sequoia, and Y Combinator also participated in the financing, which brings the San Francisco-based company’s total raised to $63 million since its 2017 inception.

CaptivateIQ must be doing something right. Its revenue has grown 600% year-over-year. To date, it has processed over $2 billion in commissions on its platform across hundreds of enterprise customers including Affirm, TripActions, Udemy, Intercom, Newfront Insurance and JMAC Lending.

“A big part of our growth is that we can help any company that offers a performance-based compensation plan, so we don’t have any restrictions with the types of businesses we work with,” said co-CEO Mark Schopmeyer. “We typically see conversations start with teams that have a minimum of 25 sales people, though we easily serve enterprises and public companies as well.”

The number of payees — defined as someone receiving a payout in CapitvateIQ’s system — was up four times in December 2020 from the year prior. Plus, the company had “back-to-back record months” from September through the end of the year in 2020, according to Schopmeyer.

He, co-CEO Conway Teng and CTO Hubert Wong founded CaptivateIQ after coming out of Y Combinator’s Winter 2017 cohort. 

Left to right: Hubert Wong, Mark Schopmeyer and Conway Teng; Image Credits: CaptivateIQ

The company touts its SaaS platform as a combination of the familiarity of spreadsheets, with the scalability and performance of software, so that users can configure any commission plan “entirely on their own,” according to Teng. 

“Calculating commissions is really complicated and mission critical – think of it like a very complicated form of payroll – each company has a unique commission plan that involves a lot more calculations and data than your typical salary payroll math,” Teng said. “Also, in recent years, companies have access to more data than ever, giving them room to incentive employees on more performance metrics.” 

Today, CaptivateIQ has 90 employees, more than triple what it did one year ago.

In 2020, the startup saw a bump in the number of non-high technology companies buying its software, and as a result, CapitivateIQ is going to increase its efforts into those other verticals, according to Teng. So far, it has found success in particular in financial services, manufacturing, and business services, among other sectors.

The pandemic served as a tailwind to its business. Sales teams generally rely on in-person interactions to stay productive, Schopmeyer points out. Without those activities over the past year, “having the right incentives in place became ever more critical as companies required new ways to motivate teams during the shift to remote work.”

“We saw our product usage skyrocket at the beginning of the pandemic as businesses quickly adjusted incentives, team quotas, SPIFs, and other components of their comp plans to stay competitive,” he said. 

The company plans to use its new capital to improve upon the user experience. Specifically, Teng said, it plans to introduce “more powerful data transformations, a richer set of formulas, and off-the-shelf templates.”

Another goal is to automate and streamline the commissions process from beginning to end, he added. The startup is expanding its data integrations to support “all major data systems” and introducing new dashboarding capabilities. It’s also enhancing existing collaboration workflows around approvals, inquiries and contracts.

Looking ahead, CaptivateIQ is exploring the potential of applying its technology to solve for use cases outside the world of commissions — something that it says its customers are already doing.

“It’s exciting to see what people have been building, and we’re looking forward to enabling new solutions as we continue to release more of our core technology platform,” Teng said.

Accel Partner Ben Fletcher said the pain point of calculating and reporting sales commissions kept coming up among portfolio companies, with CaptivateIQ frequently referenced. Those companies, he said, tried more enterprise-grade solutions — “spending hundreds of thousands on implementation to ultimately find that their products did not work.” They also tried other newer tools that also just didn’t work well.

“As we dug in and talked with more and more customers, it was abundantly clear — CaptivateIQ was the best product in the space,” Fletcher said.

Besides ease of use, the fact that CaptivateIQ is a no-code tool, is a big deal to Accel.

“Similar to UIPath, Webflow, and Ada, CaptivateIQ is able to bring the power of customer development and automation to an easy to use, drag-and-drop product,” Fletcher said. 

Charles raises €6.4M seed to bring ‘conversational commerce’ to WhatsApp

By Steve O'Hear

Charles, a Berlin-based startup that offers a “conversational-commerce” SaaS for businesses that want to sell on WhatsApp and other chat apps, has raised €6.4 million in funding.

Led by Accel and HV Capital, the seed funding will be used by the company to scale and meet existing demand for its conversational commerce platform.

Launched in 2020 by Artjem Weissbeck and Andreas Tussing after the pair had run a year-long experiment running a store in WhatsApp, Charles enables businesses to sell products and services via WhatsApp and other chat apps in order to “increase conversion rate, customer loyalty and ultimately revenue”.

The SaaS connects chat app APIs, such as WhatsApp and Messenger, with shop and CRM systems, like Shopify, SAP and HubSpot, all delivered through a user-friendly interface. The idea is to make it easier for businesses to meet their customers on the channels they already use and to bridge the gap between sales enquiries and support, and actual conversions.

” ‘Traffic’ and with it ‘conversion’ will exponentially move from the streets (retail) and the browser/native apps into chat apps,” says Weissbeck. “Thereby, conversational commerce will be the third big pillar of commerce, gluing together all channels and unlocking the full potential of personalization via the unique identification of customers via their phone number”.

This transition, argues the Charles founder, creates “tremendous challenges and opportunities” for companies in terms of customer journey design and the tech stack, which to date — Asia, aside — has been predominantly tailored around webshops and e-mail.

“Ultimately our technology provides the operating system for companies to master this challenge,” adds Tussing. “The core of our software integrates chat apps with shop/CRM backends in an intuitive interface that puts the human chat sales agent in the center, supported by chatbots and AI”.

Luca Bocchio, partner at Accel, says that conversational commerce is emerging as a “critical channel for brands,” and is a trend that will reshape the way brands interact with customers. [This is] paving the way for potential new category-defining tools to emerge,” he says, noting that Charles has the potential to be one of those tools.

“When we talk to potential clients it’s mostly existing customer service tools like Zendesk who are starting to add chat apps as an additional channel,” says Weissbeck, when asked to cite direct competitors. “These tools are usually built upon a ‘ticketing’ logic, optimized to solve customer inquiries as quickly as possible and with a clear focus on service cases, not sales”.

In contrast, Weissbeck says Charles is built upon a “feed” logic, showing customer interaction as an ongoing conversation and end-to-end relationship — in the same way as the customer sees it.

“Further we deeply integrate into shop/CRM-backends to make it easy for agents to sell product and create carts or contracts — all in a very design-driven and intuitive interface, that is fun to use for the agent and puts her/him in the center,” says Tussing. “Supported by chatbots, not replaced”.

Meanwhile, the revenue model is simple enough: Businesses pay a monthly base fee to cover Charles’ fixed costs and on top of this the startup earns money on conversions. “We take a small share of the net sales, ensuring we are co-incentivised,” explains Weissbeck.

Accel-backed mobile money platform NALA to start offering remittance services to East Africa

By Tage Kene-Okafor

According to a McKinsey report, the total number of mobile money services worldwide was 282 in 2017, with more than half of those operating in sub-Saharan Africa. 

In 2020, these numbers increased significantly, but the ratio remained similar.  In 96 countries, there are 310 live mobile money services, according to a GSMA report. Out of that number, 171 are from Africa, while 157 are in sub-Saharan Africa.

In Tanzania, mobile money services can be relatively difficult to use due to unstable internet and high service fees. Benjamin Fernandes noticed this as a national television host while building a mobile money service to enable people to pay for TV subscriptions in East Africa back in 2011

Six years later, he would start his own mobile money and wallet aggregator, NALA, to solve these issues. Its first mobile application allowed users to make mobile money payments and utilize mobile banking without an internet connection. The business grew to 250,000 users in over a year after its official launch.

Last year, the WorldBank predicted a sharp decline of international remittances to Africa. But even though Africa is still the most expensive region to send money to with averages of 10.6% in transaction fees, the opposite happened. There was an increase in remittance activity on the continent.

Kenya, for instance, had its highest-ever inbound remittance at $3 billion, while WorldRemit acquired Sendwave in August 2020 for $500 million and Mama Money claimed to have grown 500% within the year.

NALA also noticed an uptick in remittance requests where 1 in 7 users wanted to receive money internationally. This happened despite not being in that business at the time. It’s not hard to see why: Presently, over 70% of money sent to Sub-Saharan Africa is transacted through physical stores. When many over-the-counter services were suspended or limited due to coronavirus restrictions, people were left with expensive, unreliable or hard-to-access alternatives.

Combined with the increasing trend for digital-first financial services and listening to some users’ requests, NALA began testing international money transfers in August 2020 to facilitate payments from the U.K. to Kenya, Uganda and Tanzania. By building a multi-currency ledger where people can send money from the U.K. to Tanzania and back to the U.K., Fernandes says NALA can build a Wise for Africa.

I believe international payments are only 1% built today. Until you can send money both ways seamlessly, our work isn’t done,” Fernandes told TechCrunch. We believe African markets should be ‘sender’ markets, too; there is a lot of trade happening with other countries, and most of the money is sent via costly bank wires or at physical stores. It doesn’t need to be this way; it’s time for something better.” 

Various platforms are trying to achieve this, but none specifically targets the East African region. That is NALA’s play, according to the CEO. “This is where we see a big advantage for us. We are local, we understand mobile money, we built bill payments on our previous product, and this is an extension of that,” he added.

Benjamin Fernandes (CEO, Nala)

Since graduating as the first East African company from Y Combinator in 2019, NALA has brought other interesting investors on board to support its mission. The most notable is Accel, which has been kept under wraps for some time. The VC firm rarely makes deals on the continent and has only invested in NALA and Egypt’s Instabug. Other backers include NYCA Partners and angel investors like Shamir Karkal (co-founder of Simple), Peeyush Ranjan (former Flipkart CTO and current head of Google Payments), and Thomas Stafford (DST Global)

NALA also enlisted the services of Nicolas Esteves, who was the VP of engineering at Osper and had a stint at Monzo to become the company’s CTO which, according to Fernandes, will considerably improve the company’s chances of achieving its goal. “When we brought someone of his calibre on our team, it just opened up the doors of what we could accomplish because he has built multi-currency ledgers across different large companies.”   

For now, though, the company will be rolling out a beta product next month for U.K.-based customers sending money to Kenya and Uganda (Tanzania will come later). The company claims that the service will support instant payments to all major mobile money accounts and says it is closing some banking partnerships that will allow it to facilitate money transfers from East Africa to the U.K.

Amazon partners with Seraphim on AWS accelerator for space startups

By Devin Coldewey

Amazon will soon be a big part of the space economy in the form of its Kuiper satellite internet constellation, but here on Earth its ambitions are more commonplace: get an accelerator going. They’ve partnered with space-focused VC outfit Seraphim Capital to create a 4-week program with (among other things) a $100,000 AWS credit for a carrot.

Applications are open now for the AWS Space Accelerator, with the only requirement that you’re aiming for the space sector and plan to use AWS at some point. 10 will be accepted; you have until April 21 to apply.

The program sounds fairly straightforward: a “technical, business, and mentorship” deal where you’ll likely learn how to use AWS properly, get some good tips from the AWS Partner Network and other space-focused experts on tech, regulations, and security, then rub shoulders with some VCs to talk about that round you’re putting together. (No doubt Seraphim’s team gets first dibs, but there doesn’t appear to be any strict equity agreement.)

“Selected startups may receive up to $100,000 in AWS Activate credit,” the announcement says, which does hedge somewhat, but probably legal made them put that in.

There are a good amount of space-focused programs out there, but not nearly enough to cover demand — there are a lot of space startups! And they often face a special challenge of being highly technical, have customers in the public sector, and need rather a lot of cash to get going compared with your average enterprise SaaS.

We’ll understand more about the program once the first cohort is announced, likely not for at least a month or two.

Plaid accelerator announces inaugural cohort of fintech startups

By Natasha Mascarenhas

Plaid, the fintech giant, has announced the inaugural cohort of startups in its new accelerator program, FinRise.

The equity-free and capital-free program has chosen five early-stage fintech startups out of 100 applications to join its cohort, working on issues central to the financial services industry such as simplifying payments and access to credit. The accelerator, announced two months ago, is explicitly focused on backing underrepresented founders in tech.

Last week, The Information reported that Plaid is nearing a new financing deal that would value the company at between $10 billion to $15 billion. Beyond a high valuation, Plaid sports a key characteristic that positions it well to help early-stage startups: it has gone through regulatory hurdles. Months ago, Plaid announced it would not merge with Visa in what would have been a $5.3 billion dollar acquisition. This event, as well as advice on how private fintech startups can deal with policy issues, will be part of FinRise programming.

While participants don’t get funding, FinRise has collated a number of “capital access partners” which basically means investors who are committed to meeting with these companies and potentially writing a check. This network includes Accion, Acrew, Amex Ventures, Flourish, Harlem Capital, Kapor, Matrix, Village Capital, Visible Hands, and First Round.

Here’s a look at the five startups:

  • Global Data Consortium is building a process for global digital identity verification for businesses. Co-founded by Bill Spruill and Charles Gaddy, the startup is building a data supplier network of more than 200 sources to help build a standard of processes around digital identity verification. “As we continue to scale our platform it’s important to make sure our technical infrastructure continues to be enterprise-ready. Plaid’s engineering expertise and knowledge will prove useful to our team to help us plan and execute around our next level of service support architecture,” Spruill told TechCrunch.
  • Guidefi is a marketplace focused on connecting communities of color to culturally-savvy financial advisors. Led by Charlene Fadirepo, the financial wellness startup doesn’t charge for matches to advisors, but only charges money once services begin.
  • OfColor wants to be the go-to enterprise wellness platform for employees of color. Founder Yemi Rose tells TechCrunch that “a lot of companies we encounter generally pride themselves on being colorblind in their HR benefit practices, in spite of outcomes that show a different approach is needed…our biggest hurdle is education.” The startup focuses on features like a personalized financial manager as well as loans that allow employees to maximize their 401(k) contribution.
  • Walnut is a point-of-sale lending platform that wants to make healthcare more affordable for patients. Roshan Patel, founder and CEO of the startup, says that its biggest competitor is PrimaHealth Credit, which focuses on elective care. “Walnut is care-agnostic: no matter where you are in the healthcare system, you can use Walnut to break up your bill into an installment plan that works for you. That can be at the dentist or cosmetic surgery practice, but it can also be in the emergency room or at your primary care physician,” he said.
  • Zeta wants to build a better joint-bank experience for the modern couple. First covered by TechCrunch in February, Zeta has already raised $1.5 million in venture funding to create a platform that makes it easier to join accounts and split purchases. “In some ways, we see ourselves as part of a replacement for Venmo,” CEO and co-founder Aditi Shekar said. “We saw couples Venmoing back and forth to each other sometimes six times a day…we want to take over your money chores.” While Zeta is entering the market as a tool for couples, Shekar sees the startup’s moonshot as being the go-to operational account for any modern household.

Bevy raises $40M Series C with 20% coming from Black investors

By Ron Miller

You might expect that a startup that makes community building software would be thriving during a pandemic when it’s so difficult for us to be together. And Bevy, a company whose product powers community sites like Salesforce Trailblazers and Google Developers announced it has raised a $40 million Series C this morning, at least partly due to the growth related to that dynamic.

The round was led by Accel with participation from Upfront Ventures, Qualtrics co-founder Ryan Smith and LinkedIn, but what makes this investment remarkable is that it included 25 Black investors representing 20% of the investment.

One of those investors, James Lowery, who is a management consultant and entrepreneur, and was the first Black employee hired at McKinsey in 1968, sees the opportunity for this approach to be a model to attract investment from other under-represented groups.

“I know for a fact because of my friendship and my network that there are a lot of people, if they had the opportunity to invest in opportunities like this, they will do it, and they have the money to do it. And I think we can be the model for the nation,” Lowery said.

Unfortunately, there has been a dearth of Black VC investment in startups like Bevy. In fact, only around 3% of venture capitalists are Black and 81% of VC firms don’t have a single Black investor.

Kobie Fuller, who is general Partner at investor Upfront Ventures, a Bevy board member and runs his own community called Valence, says that Bevy says that investments like this can lead to a flywheel effect that can lead to increasing Black investment in startups.

“So for me, it’s about how do we get more Black investors on cap tables of companies early in their lifecycle before they go public, where wealth can be created. How do we get key members of executive teams being Black executives who have the ability to create wealth through options and equity. And how do we also make sure that we have proper representation on the boards of these companies, so that we can make sure that the CEOs and the C suite is held accountable towards the diversity goals,” Fuller said.

Fuller sees a software platform like Bevy that facilitates community as a logical starting point for this approach, and the company needs to look like the broader communities it serves. “Making sure that our workforce is appropriately represented from a perspective of having appropriate level of Black employees to the board to the actual investors is just good business sense,” he said.

But the diversity angle doesn’t stop with the investor group. Bevy CEO and co-founder Derek Anderson says that last May when George Floyd was killed, his firm didn’t have a single person of color among the company’s 27 employees and not a single Black investor in his cap table. He wanted to change that, and he found that in diversifying, it not only was the right thing to do from a human perspective, it was also from a business one.

“We realized that if we really started including people from the Black and Brown communities inside of Bevy that the collective bar of a talent was going to go up. We were going to look from a broader pool of candidates, and what we found as we’ve done this is that as the culture has started to change, the customer satisfaction is going up, our profits and our revenues — the trajectory is going up, and I see this thing is completely correlated,” Anderson said.

Last summer the company set a two year goal to get to 20% of employees being Black. While the number of employees is small, Bevy went from zero to 5% in June, 10% by September. Today they are just under 15% and expect to hit the 20% goal by summer, a year ahead of the goal it set last year.

 

Bevy grew out of a community called Startup Grind that Anderson started several years ago. Unable to find software to run and manage the community, he decided to build it himself. In 2017, he spun that product into a separate company that became Bevy, and he has raised $60 million, according to the company.

In addition to Salesforce and Google, other large enterprises are using Bevy to power their communities and events including Adobe, Atlassian, Twilio, Slack and Zendesk.

Today, the startup is valued at $325 million, which is 4x the amount it was valued at when it raised its $15 million Series B in May 2019. It expects to reach $30 million in ARR by the end of this year.

User Interviews, the CRM for qualitative user research, raises $10 million Series A

By Jordan Crook

User Interviews, the Entrepreneurs Roundtable Accelerator-backed company that has built a CRM for product developers to get user feedback, has closed on a $10 million Series A round. The financing was led by Teamworthy Ventures, with participation from Las Olas, Accomplice, FJ Labs, ERA, Trestle Partners and ValueStream.

The company, cofounded by Basel Fakhoury, was created out of failure, in some ways. Originally, the User Interviews team started with a project called Mobile Suites, an amenities logistics platform for hotels. It was a dud, and the team — Basel Fakhoury, Dennis Meng and Bob Saris — decided to do more user research before determining their next product.

In trying to collect that research, they stumbled upon a huge problem. It often takes companies weeks, if not months, to conduct a study around user research. The company decided to build out a platform that would procure subjects for research quickly and effectively, using an algorithm to pair qualified, engaged testers with the client.

The product became Recruit, and ran on an a la carte model. To complement Recruit, the team also launched Research Hub, which is a CRM tool for all the testing methodologies used with actual users. To be clear, User Interviews doesn’t run the surveys or A/B tests themselves, but rather helps companies manage the frequency and data of those tests, not unlike what Salesforce does for sales people.

Recently, User Interviews added a subscription layer to its product, allowing companies to purchase access to the software on an annual basis, rather than on a usage basis. Fakhoury says that this dual-model allows companies to try out the platform before they fully commit.

Image Credits: User Interviews

According to the startup, the company has experienced 140 percent annual growth, which has accelerated during the pandemic. Clients include Amazon, Microsoft, Colgate and Spotify.

User Interviews plans on using the new funding to hire more in the product department, as well as build out integrations with user testing software and their clients own data management systems.

Right now, the team is about 50 people, and is fully remote, with nearly half the workforce being female.

Fakhoury said the biggest challenge for the company is being able to do two things at once.

“We are simultaneously disrupting this legacy industry with Recruit, and we are creating a category with Research Hub,” he said. “Those are somewhat different strategies and missions and making sure that we can do both of those in tandem is one big thing for us.”


Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion. Use code “TCARTICLE” at checkout to get 20 percent off tickets right here.

Accel’s Dan Levine and Scale’s Alexandr Wang will chat about how to create a category on Extra Crunch Live

By Jordan Crook

Alexandr Wang has spent the last five years looking to accelerate the development of AI and machine learning algorithms with Scale AI. The company has raised upward of $270 million since inception and doesn’t show any signs of slowing.

That’s why we’re thrilled to hang out with Wang and Scale AI investor Dan Levine (Accel) on Wednesday, April 7 on Extra Crunch Live.

Extra Crunch Live is free to everyone and focuses on the relationships between founders and investors that have led to successful business building. We talk about what made them choose each other, hear about the initial pitch meetings and learn about how they make decisions about the future together.

ECL also features the Pitch Deck Teardown, wherein our esteemed guests give their live feedback on decks submitted by the audience. If you’d like to send us your deck to be featured on a future episode of Extra Crunch Live, hit up this link.

Dan Levine worked on the platform team at Dropbox before getting into venture, and before that was an entrepreneur himself, founding YC-backed Chartio. His current portfolio includes Gem, Mux, Numeracy (acquired by Snowflake), ReadMe, Scale, Searchlight, Sentry and Vercel.

Wang, for his part, was a technical lead at Quora before founding Scale. He also worked as an algorithm developer at Hudson River Trading and as a software engineer at Addepar after attending, and ultimately dropping out from, MIT, where he studied artificial intelligence.

Between the two of them, these speakers have plenty of wisdom to impart about how to ideate, fund and scale (ha!) businesses.

The episode goes down on April 7 at 12 p.m. PDT/3 p.m. EDT and is free to attend live. Only Extra Crunch members will have access to the episode on demand so be sure to register now and hang out with us.


Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built in — there’s ample time included for audience questions and discussion. Use code “TCARTICLE” at checkout to get 20% off tickets right here.

Nuvemshop, LatAm’s answer to Shopify, raises $90M in Accel-led Series D

By Mary Ann Azevedo

The COVID-19 pandemic has led to people everywhere shopping more online and Latin America is no exception.

São Paulo-based Nuvemshop has developed an e-commerce platform that aims to allow SMBs and merchants to connect more directly with their consumers. With more people in Latin America getting used to making purchases digitally, the company has experienced a major surge in business over the past year.

Demand for Nuvemshop’s offering was already heating up prior to the pandemic. But over the past 12 months, that demand has skyrocketed as more merchants have been seeking greater control over their brands.

Rather than selling their goods on existing marketplaces (such as Mercado Libre, the Brazilian equivalent of Amazon), many merchants and entrepreneurs are opting to start and grow their own online businesses, according to Nuvemshop co-founder and CEO Santiago Sosa.

“Most merchants have entered the internet by selling on marketplaces but we are hearing from newer generations of merchants and SMBs that they don’t want to be intermediated anymore,” he said. “They want to connect more directly with consumers and convey their own brand, image and voice.”

The proof is in the numbers.

Nuvemshop has seen the number of merchants on its platform surge to nearly 80,000 across Brazil, Argentina and Mexico compared to 20,000 at the start of 2020. These businesses range from direct-to-consumer (DTC) upstarts to larger brands such as PlayMobil, Billabong and Luigi Bosca. Virtually every KPI tripled in the company in 2020 as the world saw a massive transition to online, and Nuvemshop’s platform was home to 14 million transactions last year, according to Sosa.

“With us, businesses can find a more comprehensive ecosystem around payments, logistics, shipping and catalogue/inventory management,” he said.

Nuvemshop’s rapid growth caught the attention of Silicon Valley-based Accel. Having just raised $30 million in a Series C round in October and achieving profitability in 2020, the Nuvemshop team was not looking for more capital.

But Ethan Choi, a partner at Accel, said his firm saw in Nuvemshop the potential to be the market leader, or the “de facto” e-commerce platform, in Latin America.

“Accel has been investing in e-commerce for a very long time. It’s a very important area for us,” Choi said. “We saw what they were building and all their potential. So we pre-emptively asked them to let us invest.”

Today, Nuvemshop is announcing that it has closed on a $90 million Series D funding led by Accel. ThornTree Capital and returning backers Kaszek, Qualcomm Ventures and others also put money in the round, which brings Nuvemshop’s total funding raised since its 2011 inception to nearly $130 million. The company declined to reveal at what valuation this latest round was raised but it is notable that its Series D is triple the size of its Series C, raised just over six months prior. Sosa said only that there was a “substantial increase” in valuation since its Series C.

Nuvemshop is banking on the fact that the density of SMBs in Latin America is higher in most Latin American countries compared to the U.S. On top of that, the $85 billion e-commerce market in Latin America is growing rapidly with projections of it reaching $116.2 billion in 2023.

“In Brazil, it grew 40% last year but is still underpenetrated, representing less than 10% of retail sales. In Latin America as a whole, penetration is somewhere between 5 and 10%,” Sosa said.

Nuvemshop co-founder and CEO Santiago Sosa;
Image courtesy of Nuvemshop

Last year, the company transitioned from a closed product to a platform that is open to everyone from third parties, developers, agencies and other SaaS vendors. Through Nuvemshop’s APIs, all those third parties can connect their apps into Nuvemshop’s platform.

“Our platform becomes much more powerful, vendors are generating more revenue and merchants have more options,” Sosa told TechCrunch. “So everyone wins.” Currently, Nuvemshop has about 150 applications publishing on its ecosystem, which he projects will more than triple over the next 12 to 18 months.

As for comparisons to Shopify, Sosa said the company doesn’t necessarily make them but believes they are “fair.”

To Choi, there are many similarities.

“We saw Amazon get to really big scale in the U.S.. Merchants also found tools to build their own presence. This birthed Shopify, which today is worth $160 billion. Both companies saw their market caps quadruple during the pandemic,” he said. “Now we’re seeing the same dynamics in LatAm…Our bet here is that this company and business has all the same dynamics and the same really powerful tailwinds.”

For Accel partner Andrew Braccia, Nuvemshop has a clear first mover advantage.

Over the past decade, direct-to-consumer has become one of the most important drivers of entrepreneurship globally,” he said. “Latin America is no exception to this trend, and we believe that Nuvemshop has the level of sophistication and ability to understand all that change and fuel the continued transformation of commerce from offline to online.”

Looking ahead, Sosa expects Nuvemshop will use its new capital to significantly invest in: continuing to open its APIs; payments processing and financial services; “everything related to logistics and logistics management” and attracting smaller merchants. It also plans to expand into other markets such as Colombia, Chile and Peru over the next 18-24 months. Nuvemshop currently operates in Mexico, Brazil and Argentina.

“While the countries share the same secular trends and product experience, they have very different market dynamics,” Sosa said. “This requires an on the ground local knowledge to make it all work. Separate markets require distinct knowledge. That makes this a more complicated opportunity, but one that enables a long-term competitive advantage.”

Aldea Ventures creates ‘hybrid’ European €100M fund to invest both in Micro VCs, plus follow-on

By Mike Butcher

The historical trajectory of venture capital has been to move to earlier and earlier finding rounds in order to capture the greatest potential multiple on exit. In the US, we’ve seen an explosion of Pre-series A funds, and similarly in Europe. But there’s been an opportunity to tie a lot of that activity together and also produce data that can feed into decision-making about growth rounds, further up the funding pipeline. Now, newly-formed Aldea Ventures intends to do just that.

Today’s it’s announcing a €60M first close of its Pan-European fund with the aim of reaching its target €100M first fund. The idea is ambitious: to invest in 700 startups across Europe, but with an unusual, “hybrid” strategy. First up, it will operate as a fund-of-funds, investing in up to 20 early-stage ‘micro VC funds’ across Europe. Second of all, it will act as a co-investment platform from Series A upwards.  So far it has invested in London-based Job and Talent and most recently, Copenhagen-based Podimo.

The model is more common in Silicon Valley than in Europe, so Aldea Ventures hopes to capitalize on this trend as one of the earlier players with this strategy. Aldea is also effectively stepping into the gap where corporate VCs in the US would normally fill, but in Europe is generally a gaping hole.

Aldea Ventures is led by managing partners Carlos Trenchs, formerly at Caixa Capital Risc; Alfonso Bassols, previously at Nauta Capital; Josep Duran, formerly with the European Investment Fund; and Gonzalo Rodés, Chairman. Aldea Ventures is partnering with Meridia Capital, a leading Spanish alternative investment fund manager.

Carlos Trenchs, managing partner of Aldea Ventures, said: “We believe Europe will continue to grow in influence and play an integral part in the next decade of technology… Our dual model as a fund of funds and co-investor into scaleups is the first of its kind in Europe. Seen only in Silicon Valley until today, we’re putting this model to work to fuel the next generation of growth across the European ecosystem.”

Aldea will look for five factors to selecting micro VCs: the firm’s thesis (specialist, thematic or generalist); location (pan-European or local); the experience of the partners; the size of the fund, and whether the fund is emerging or established. The fund will also take a long hard look at AI, Blockchain and DeepTech companies.

Trenchs explained to me during an interview that “we will have exposure to seed capital in different geographies with the 700 companies, and we reserve the other half of the fund to invest directly on the growth stage in the best performers in their portfolios.” This, he says, will establish a roadmap from direct investing all the way up to later-stage rounds.

Aldea has so far made investments into six micro VCs; Air Street Capital and Moonfire in London; Helloworld in Luxembourg; Inventures in Munich; Mustard Seed Maze in Lisbon; and Nina Capital in Barcelona. 

Nathan Benaich, Founding Partner of Air Street Capital, commented: “Investing in  European AI-first companies is a huge opportunity, with almost one-quarter of top global AI talent earning their university degrees here.. Our partnership with Aldea demonstrates a shared conviction that specialist managers with deep sector-specific knowledge will accelerate the success of tomorrow’s category-defining European companies that are AI-first by design.”

There’s clearly also a data play here because Aldea is likely to end up with a lot of data across companies, sectors and also across various stages.

And that was confirmed by Trenchs: “We want to make the VC world more transparent. If you have the 700 companies, in a few years from now, we’ll be able to collect a lot of data about what’s going on at seed stage in European valuations, geographies and sectors. Our intention is of course to use it as intelligence.” He also said the firm intended to share a lot of anonymized data with the wider European ecosystem.

“There is a funnel of few thousands of companies that get funded, but only a few make it through the funnel. As investors, we are looking for venture capitalists that can transform their seed portfolio into a portfolio that graduates from Series A to Series B,” he added.

Squarespace raises $300M at a staggering $10B valuation

By Mary Ann Azevedo

Squarespace has raised $300 million in a round of funding that values the company at a staggering $10 billion valuation.

New backers include Dragoneer, Tiger Global, D1 Capital Partners, Fidelity Management & Research Company, funds and accounts advised by T. Rowe Price Associates, Inc. and Spruce House. Existing backers Accel and General Atlantic also participated. 

Squarespace founder & CEO Anthony Casalena said the fresh capital will advance the company’s growth initiatives and help it scale its product suite.

The move comes less than two months after the company filed confidentiality to go public via a direct listing or initial public offering.

Squarespace, which has helped millions create their own websites, was founded in 2003 and bootstrapped until a $38.5 million Series A in 2010 that was co-led by Accel and Index Ventures.

The online website creation and hosting service — which has now expanded into e-commerce by hosting online stores — then raised another $40 million round in 2014. But it is perhaps best known for its epic 2017-era $200 million secondary round that General Atlantic financed. That round was raised at a $1.5 billion pre-money valuation.

At that time, TechCrunch reported that Squarespace was a profitable company, with revenues increasing 50% in the prior year, to about $300 million. Execs are declining to comment on the company’s latest funding round beyond a post on its website.

New York City-based Squarespace has over 1,200 employees spread across its headquarters and offices in Dublin, Ireland; Portland, Oregon; and Los Angeles, California. 

 

Inovia Capital raises $450M for second growth-stage investment fund

By Darrell Etherington

Montreal-headquartered Inovia Capital has raised $450 million for Growth Fund II, the firm’s second growth-stage investment fund. The close of this funding comes just a little over two years after the announcement of its first in February 2019, a $400 million pool of investment capital that marked Inovia’s first foray beyond the early stage deals it originally focused on.

Inovia now has investments across every stage of a company’s development — including retaining stakes in some of its portfolio companies that have had successful exits to the public markets, like Lightspeed, the point-of-sale and commerce company that went public in a nearly $400 million public offering on both the NYSE and the TSX last year.

As with Growth Fund I, the goal of Growth Fund II is to invest in companies with a focus primarily on Canadian startups, but also looking to targets in the U.S. and EU, where Inovia also maintains offices. The firms’ partners, including Chris Arsenault, Dennis Kavelman, and former Google CFO Patrick Pichette, have focused on building out a team of experienced operators to help their portfolio companies, and invest specifically in areas of particular need for startups outside the Valley, like sourcing high-demand, senior talent with high-profile tech industry experience.

Inovia’s original Growth Fund was based on an assumption that the firm could leverage its relationships and its experience to deliver value to its portfolio companies not just when they’re starting out, but across their growth cycles. Arsenault explained in an interview that Fund I was kind of a proof point that that this assumption was correct, which then paid big dividends when the firm went out to raise Fund II last year.

“We basically built the team around Dennis, Patrick and myself,” he said. “We really followed through on our key assumptions over why it made sense for Inovia to use its platform to actually build a growth stage fund that would benefit not only from insights into the portfolio, but also all of the relationships and the platform that we built over the last decade.”

What needed proving, Arsenault said, was that Inovia could stand toe-to-toe with the growth-focused firms that had acted as follow-on investors for its early stage deals over the years. That was no easy task, when you consider that Inovia provided deal flow to some of the most respected venture firms in technology, including Bessemer, KKR, TA Ventures and Sequoia.

Inovia hired a lot of operators with experience at high-growth companies, and focused on being able to shepherd its investments through challenges like building a real board, and engineering a cap table to properly manage and prepare secondary sales. With a plan to invest in between 10 to 12 companies with the $400 million in Fund I, Inovia began making deals – the first was with Lightspeed, and then they got into Forward (tech-enabled primary health care), Hopper and Snaptravel (two travel industry startups) and more.

Inovia Capital growth partners Chris Arsenault, Dennis Kavelman and Patrick Pichette (left to right)

Most of the companies that Lightspeed picked with Fund I (it did 10 deals in total) ended up having a very strong 2020 – including, surprisingly, all the travel-focused startups. Based on the strength of their performance, Arsenault and his partners decided to accelerate their timetable for raising Fund II, and found LPs more than willing. They ended up capping the fund at $450 million (with a target of between 10 to 12 investments, as with Fund I) given what Arsenault says felt like the right size for managing across the investment and operating team, despite available demand to likely raise quite a bit more.

Arsenault noted that most of the LPs contributing to this fund also had capital in the first, though some new investors have also signed on. And while Inovia’s focus is not strictly Canadian, he added that the firm’s success, along with the makeup of its investment partners and portfolio (two-thirds of the companies it has backed are Canadian) tells a story of a changing investment landscape north of the border.

“The majority of our LPs are Canadian, and I take it to heart that it’s important to create patterns of success, so that people can look towards models and either replicate or adapt to their own situation,” Arsenault said. “I think that we need more success stories that people can look at and say, ‘I can do the same thing, or I can do better.’ And the fact that our LPs came back with us, and when you look at, you know, what Georgian [Partners] is doing, and what Novacap is doing, and what OMERS Growth – this is nothing like the VC ecosystem and industry that I was in 10 years ago, right? We’re definitely on another level now in Canada.”

He added that there are examples at every stage of company-building, citing the new Backbone Angels collective led by a number of post and current Shopify employees including Arati Sharma, Atless Clark, Lynsey Thornton and Alexandra Clark. Arsenault also pointed to Lightspeed’s decision to list first on the TSX before the NYSE as a sign of newfound tech industry maturity in the Canadian context.

Finally, Arsenault credits an unusual ‘X’ factor in how Inovia has been able to put together this second fund and manage deep involvement in its very active portfolio companies over the last year: the mostly remote conditions brought on by the necessities of the pandemic.

“It would have been impossible to do what we did within the portfolio, with the portfolio, fundraising a new fund, generating our best year, in terms of exits last year, we had the New York Stock Exchange IPO for Lightspeed, we had a dozen transactions of acquisitions where our portfolio companies are doing the acquiring,” he said. “I don’t know how we would have done what we’ve done, had we been traveling and had a normal life.”

Genesis raises $45M to expand its fintech-focussed low-code platform to more verticals

By Ingrid Lunden

Low-code and no-code tools have been a huge hit with enterprises keen to give their operations more of a tech boost, but often lack the resources to handle more complex integrations. Today, one of the startups that has been building low-code finance tools is announcing funding to tap into that trend and expand its business.

Genesis — which has to date primarily worked with financial services companies, giving non-technical employees the tools to create ways to monitor and manage real-time risk, high-frequency trades and other activities — has picked up $45 million. It plans to use to bring the tools it has already built to a wider set of verticals that have some of the same needs to manage risk, compliance, and other factors as finance — healthcare and manufacturing are two examples — as well as to continue building more into the stack. 

This Series B includes a mix of financial investors along with strategic backers that speak to who already integrates with Genesis’ tools on their own platforms.

Led by Accel, it also includes participation from new backers GV (formerly Google Ventures) and Salesforce Ventures, in addition to existing investors Citi, Illuminate Financial and Tribeca Venture Partners, who also invested in this round. To give you an idea of who it works with, Citi, along with ING, London Clearing House, and XP Investments, are some of Genesis customers.

Originally conceived in 2012 in Brazil by a pair of British co-founders — Stephen Murphy (CEO) and James Harrison (CTO), who cut their teeth in the world of investment banking — Genesis had raised less than $5 million before this round, mostly bootstrapping its business and leaning on Murphy and Harrison’s existing relationships in the world of finance to grow its customer base.

Today, Murphy lives in and leads the business from Miami — where he moved from New York just as the Covid-19 pandemic was starting to gain steam last year — while James Harrison (CTO) leads part of the team based out of the UK.

As you might imagine with so little funding before now for a company going on nine years old, Genesis was doing fine financially before this Series B, so the plan is to use the funding specifically to grow faster than it could have on its own steam. The startup is not disclosing its valuation with this round.

“We were not really fixated on valuation,” said Murphy in an interview, who said the funding came about after a number of VCs had approached the startup. “The most important thing is the future opportunity and where we could take the company with additional funding… this will help us hyper scale up.” He did note that the term sheets contained “some amazing numbers and multiples,” given the current interest in no-code and low-code technology.

Indeed, the vogue for no-code and low-code tech — other well-funded names in the crowded space include startups like Zapier, Airtable, Rows, Gyana, Bryter, Ushur, Creatio, and EasySend, as well as significant launches from Google and Microsoft and other bigger players — is coming out of two trends colliding.

On one side, we’ve well and truly entered an era in enterprise technology — with the same trend playing out in consumer tech, too — where smart developers are taking sophisticated and complex services and putting “wrappers” around them by way of APIs and simpler (low- or no-code) interfaces, so that those sophisticated tools can in turn be integrated and implemented in more places. This saves needing to build or integrate that complexity from scratch and expands access to the processes within those wrappers.

On the other side, the thirst for tech knowledge has become well and truly mainstream and as a result getting far more democratized. Working in a variety of applications, using different digital tools and devices, and seeing the fruits of tech pay off are all second nature to today’s working world — whether or not you are a technologist. So it’s no surprise to see more proactive, non-technical people looking for more ways to get their hands on these tools themselves.

“You now have a whole citizen developer world, for example business analysts who understand the solution you want but might not know how to get there,” Murphy said. “We play to seasoned developers first but the investment will help us put more low code and no code tools into place to widen the tools out to them.”

Starting out in finance made sense not just because that was where the two founders had previously worked, but also because of the history of how different software tools were already being used. Specifically, he noted that the ubiquity of microservices — which themselves are collections of services as apps — laid the groundwork for more low-code. “We saw that if we could build a low-code entry point to microservices, that would be powerful.”

On top of that, investment banks, he said, have a history of wanting to build things themselves to tailor to their specific needs. “Buying off the shelf means you are at the mercy of the vendor,” he said. These factors made financial services companies very receptive to what Genesis was offering.

While a lot of the no/low-code players are coming at the concept with specific verticals in mind — no surprise, since different verticals have very specific use cases and needs — so what’s interesting with Genesis is how the company is leveraging what it already knows about finance, and then looking at other industries that have similar demands, structures and rules.

Murphy said that Genesis will stay “very focused on financial markets for 2021” but that it’s identified a number of other verticals similar to it, and is actually already seeing some inbound interest from them.

“A number of people have already approached us from the world of healthcare,” he said, pointing out that these organizations, like financial services, face challenges around how to audit data and regulations around performing transactions. Manufacturing, meanwhile, has some parallels around the area of complex event processing similar to equity algorithmic trading, he said. (In short, this relates to how external events might trigger more transactions, not unlike how external factors affect manufacturing operations.)

The trend is one that analysts forecast will only grow in the coming years: Gartner, for example, says that by 2024, low-code platforms will account for no less than 65% of all app development activity.

“Low-code promises business users the autonomy to make their own technology usage and purchase decisions while enabling them to actually build their own applications without having to rely on IT,” said Andrei Brasoveanu, a partner at Accel, said n a statement. “By bringing one of the most transformative innovations in software development to financial services, Steve and the Genesis team are taking on a huge market of legacy vendors – and winning too – while delivering on the promise of low-code. The confidence they’ve gained from serving such large institutions is proof that there’s a real and urgent need for a purpose-built low-code solution for financial markets. We’re excited to partner with Genesis and support them in delivering this across the world.” Brasoveanu is joining the startup’s board with this round.

Zomentum raises $13 million to scale its sales acceleration platform for IT channel partners

By Manish Singh

Most small businesses, which form the backbone of an economy, today don’t have the resources to handle their IT needs. Take restaurants, for an example. They have likely outsourced this job to contract IT professionals to reduce expenses.

Every time they need to buy a point-of-sale machine, a printer, new computers, or assign business emails to employees, they reach out to a trusted IT advisor, who then works with vendor partners to secure products and services that the business needs.

“SMBs are often so focused on helping customers that they end up strapped for time to select the right technology that suits their business needs. Increasingly, more and more IT channel partners are assuming the role of trusted advisors to these SMBs for their technology needs,” said Shruti Ghatge, co-founder and chief executive of Zomentum.

These IT advisors play an immensely crucial role in helping companies with their sale. For even giants like Microsoft, it’s the reseller partners who drive much of their sales. But these professionals are still using legacy tools.

Ghatge, who earlier worked as an investor at Accel, spotted an opportunity in this space and is tackling it with her new startup Zomentum. The U.S.-headquartered startup’s platform allows IT partners to bring their entire sales process together, a phenomenon she said is helping them increase their revenue and close more sales in less time.

On Tuesday, three-year-old Zomentum, which aims to build a strong IT partner network that can serve as an effective sales channel to promote the hyperlocal IT market, said it has raised $13 million in its Series A round from Elevation Capital and Accel (existing investors), and Greenoaks Capital. The new round, which brings Zomentum’s to-date raise to $17.1 million, also saw participation from Eight Roads Ventures.

Citing internal research, Zomentum said average IT partners on its platform are able to create documents 70% faster, close twice as many deals with a 600% increase in deal value, and are seeing 2X increase in conversion.

“We see an opportunity to leverage the power of AI and data science to enable business insights for these channel partners. We want our partners and their clients to leverage AI-enabled Business Intelligence to help gain actionable insights and take smart decisions, something that until now, was available only to enterprises,” said Rahil Shah, co-founder and chief technology officer of Zomentum, in a statement.

More than 80% of Zomentum customers today are in the U.S., and Ghatge said the startup will deploy the fresh capital to expand its presence in the market and broaden its product offerings with features such as vCIO, QBR, assessments.

The Series A deal that launched a near unicorn: Meet Accel’s Steve Loughlin and Ironclad’s Jason Boehmig

By Jordan Crook

The only people who truly understand a relationship are the ones who are in it. Luckily for us, we’re going to have a candid conversation with both parties in the relationship between Ironclad CEO and co-founder Jason Boehmig and his investor and board member Accel partner Steve Loughlin.

Loughlin led Ironclad’s Series A deal back in 2017, making it one of his first Series A deals after returning to Accel.

This episode of Extra Crunch Live goes down on Wednesday at 3 p.m. EST/12 p.m. PST, just like usual.

We’ll talk to the duo about how they met, what made them “choose” each other, and how they’ve operated as a duo since. How they built trust, maintain honesty and talk strategy are also on the table as part of the discussion.

Loughlin was an entrepreneur before he was an investor, founding RelateIQ (an Accel-backed company) in 2011. The company was acquired by Salesforce in 2014 for $390 million and later became Salesforce IQ. Loughlin then “came back home” to Accel in 2016 and has led investments in companies like Airkit, Ascend.io, Clockwise, Ironclad, Monte Carlo, Nines, Productiv, Split.io and Vivun.

Not entirely unsurprising for a man who has dominated the legal tech sphere, Jason Boehmig is a California barred attorney who practiced law at Fenwick & West and was also an adjunct professor of law at Notre Dame Law School. Ironclad launched in 2014 and today the company has raised more than $180 million and, according to reports, is valued just under $1 billion.

Not only will we peel back the curtain on how this investor/founder relationship works, but we’ll also hear from these two tech leaders on their thoughts around bigger enterprise trends in the ecosystem.

Then, it’s time for the pitch deck teardown. On each episode of Extra Crunch Live, we take a look at decks submitted by the audience and our experienced guests give their live feedback. If you want to throw your deck in the ring, submit your deck for a future episode.

As with just about everything we do here at TechCrunch, audience members can also ask their own questions.

Extra Crunch Live has left room for you to network (you gotta network to get work, amirite?). Networking is open starting at 2:30 p.m. EST/11:30 a.m. PST and stays open a half hour after the episode ends. Make a friend!

As a reminder, Extra Crunch Live is a members-only series that aims to give founders and tech operators actionable advice and insights from leaders across the tech industry. If you’re not an Extra Crunch member yet, what are you waiting for?

Loughlin and Boehmig join a stellar cast of speakers on Extra Crunch Live, including Lightspeed’s Gaurav Gupta and Grafana’s Raj Dutt, as well as Felicis’ Aydin Senkut and Guideline’s Kevin Busque. Extra Crunch members can catch every episode of Extra Crunch Live on demand right here.

You can find details for this episode (and upcoming episodes) after the jump below.

See you on Wednesday!

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