Like many overseas Chinese, Derek Weng gets shopping requests from his family and friends whenever he returns to China. Some of the most wanted imported products are maternity items, cosmetics, and vitamin supplements. Many in China still uphold the belief that “imported products are better.”
The demand gave Weng a business idea. In 2018, he founded LemonBox to sell American health supplements to Chinese millennials like himself via online channels. The company soon attracted seed funding from Y Combinator and just this week, it announced the completion of a pre-A round of $2.5 million led by Panda Capital and followed by Y Combinator .
LemonBox tries to differentiate itself from other import businesses on two levels — affordability and personalization. Weng, who previously worked at Walmart where he was involved in the retail giant’s China import business, told TechCrunch that he’s acquainted with a lot of American supplement manufacturers and is thus able to cut middleman costs.
“In China, most supplements are sold at a big markup through pharmacies or multi-level marketing companies like Amway,” Weng said. “But vitamins aren’t that expensive to produce. Amway and the likes spend a lot on marketing and sales.”
Inside LemonBox’s fulfillment center
LemonBox designed a WeChat-based lite app, where users receive product recommendations after taking a questionnaire about their health conditions. Instead of selling by the bottle, the company customizes user needs by offering daily packs of various supplements.
“If you are a vegetarian and travel a lot, and the other person smokes a lot, [your demands] are going to be very different. I wanted to customize user prescriptions using big data,” explained Weng, who studied artificial intelligence in business school.
A monthly basket of 30 B-complex tablets, for instance, costs 35 yuan ($5) on LemonBox. Amway’s counterpart product, a bottle of 120 tablets, asks for 229 yuan on JD.com. That’s about 57 yuan ($9) for 30 tablets.
Selling cheaper vitamins is just a means for LemonBox to attract consumers and gather health insights into Chinese millennials, with which the company hopes to widen its product range. Weng declined to disclose the company’s customer size, but claimed that its user conversion rate is “higher than most e-commerce sites.”
With the new proceeds, LemonBox is opening a second fulfillment center in the Shenzhen free trade zone after its Silicon Valley-based one. That’s to provide more stability to its supply chain as the COVID-19 pandemic disrupts international flights and cross-border trade. Moreover, the startup will spend the money on securing health-related certificates and adding Japan to its sourcing regions.
Screenshot of Lemonbox’s WeChat-based store
In the decade or so when Weng was living in the U.S., the Chinese internet saw drastic changes and gave rise to an industry largely in the grip of Alibaba and Tencent. Weng realized he couldn’t simply replicate America’s direct-to-customer playbook in China.
“In the U.S., you might build a website and maybe an app. You will embed your service into Google, Facebook, or Instagram to market your products. Every continent is connected with one other,” said Weng.
“In China, it’s pretty significantly different. First off, not a lot of people use web browsers, but everyone is on mobile phones. Baidu is not as popular as Google, but everybody is using WeChat, and WeChat is isolated from other major traffic platforms.”
As such, LemonBox is looking to diversify beyond its WeChat store by launching a web version as well as a store through Alibaba’s Tmall marketplace.
“There’s a lot of learning to be done. It’s a very humbling experience,” said Weng.
Amid the pandemic, workplace cultures have been turned on their heads, meanwhile investment and growth haven’t slowed for many tech companies, requiring them to still onboard new engineering managers even while best practices for remote management are far from codified.
Because of remote work habit shifts, plenty of new tools have popped up to help engineers be more productive, or quickly help managers interface with direct-reports more often. Okay is taking a more observatory route, aiming to give managers dashboards that quantify the performance of their teams so that they can get a picture of where they have room to improve.
The startup, which launched out of Y Combinator earlier this year, tells TechCrunch they’ve raised $2.2 million in funding led by Sequoia and are launching the open beta of their service.
Co-founders Antoine Boulanger and Tomas Barreto met while working at Box — Boulanger as a senior director of engineering and Barreto as a VP of engineering. They told TechCrunch that in the process of building out a suite of in-house tools designed to help managers at Box understand their teams better, they realized the opportunity for a subscription toolset that could help managers across companies. For the most part, Boulanger says that today Okay is largely replacing tools built in-house as well.
Getting a picture of an engineering team’s productivity means plugging into these toolsets and gathering data into a digestible feed. Okay can be integrated with a number of toolsets, including software like GitHub, PagerDuty, CircleCI and Google Calendar.
“Part of the problem for managers is that there are so many tools, so how do you get signal from the noise?” Barreto tells TechCrunch.
A large part of Okay’s sell seems to be ensuring that managers can keep an active eye on the common pitfalls of rapid scaling and keep them in check so that can keep direct-reports satisfied. On the individual basis, managers can quickly see stats related to how much of an individual manager’s time is being spent in meetings compared to un-interrupted “maker time” where they actually have the ability to get work done.
People don’t like to be micro-managed and the idea that everything you do is feeding into a pie chart that judges whether you’re a good employee or not isn’t the most savory sell for engineers. Okay’s founders hope they can strike a balance and give managers data that they’re not tempted to over-rely on, instead defaulting to team-level insights when they can so that managers are dialed into general trends like how long projects are taking on average or how long it takes for pull requests to be reviewed.
Investors have been bankrolling remote work tools at a heightened pace for the last several months and things have been especially fortunate for young companies that were ahead of the trend. Barreto, for his part, has served as a scout at Sequoia since 2018 according to his LinkedIn.
The team says their product, as it stands today, is best fit for companies with 50-200 engineers that are high-growth and perhaps going through some of those growing pains. The company’s early customers include teams at Brex, Plaid and Split.
Given the attention that TechCrunch pays to Y Combinator’s Demo Days, we also try to keep tabs on the same startups as they scale and raise more capital. Yesterday we covered YC Winter 2020 participant BuildBuddy, for example. Today we’re taking a look at Heru, a startup based in Mexico City that is announcing a $1.7 million raise after taking part in YC’s Summer 2019 session.
The pre-seed round was led by Mountain Nazca, and participated in by Magma Partners, Xtraordinary Venture Partners, Flourish Ventures, YC itself and a handful of angels. The investment was raised in two pieces: a $500,000 check in February and the other $1.2 million closing a few weeks ago.
Heru wants to provide software-based services for gig workers in Mexico, and eventually other countries. Its founders, Mateo Jaramillo and Stiven Rodríguez Sánchez, are both ex-Uber employees, which is how they wound up in Mexico from their native Colombia.
But Heru didn’t have a straightforward path to existence. The founding duo told TechCrunch their original idea, something similar to OYO, was what they went through Y Combinator and initially raised money for. But after finding OYO already in their target market, the company took three months to rethink and, keeping investors on board, pivoted to Heru.
Heru is a package of software products aimed at delivery drivers and the like, helping provide insurance, credit and tax preparation support. The tax element is key, as the company’s founders explained to TechCrunch that Mexico now expects independent workers to file taxes on a monthly basis. Folks need help with that, so Heru built them a tool to do so.
There’s competition to that element of its product, Heru said, noting that there are accountants in the market that will do the work for $25 to $30. Heru’s tax service, in contrast, costs a smaller $5 each month (100 pesos). Insurance is another $5 each month for accident-related coverage. The startup worked with an insurance provider to build what it describes as a “tailor-made” policy for gig workers who need low-cost coverage.
Heru is not only targeting Uber drivers and their like, however. The company noted that it also wants to support freelancers more broadly, a population that is much larger than the three million gig workers it counts in the Mexican market.
The company’s app has been soft-launched in the market for a few weeks, with the startup now making more noise about its existence. According to its founders, around 1,200 users were accepted during its test period. Another 20,000 are in line.
Among its early user base, customers are buying on average 1.2 Heru products, a number that I’ll track as the startup scales.
Heru’s app is neat, its market large and the need it is serving material. But in the background of the software story is a brick-and-mortar tale. The startup, in addition to building its app, put together a number of so-called “Heru Casas,” places where gig workers can recharge their phones and use a bathroom. You need the app to enter a Heru Casa, helping the startup find early users.
Currently all Heru Casas are located in Mexico City. The startup is not sure about expanding that part of its efforts to more cities where its app may attract users. Why? It’s hard to scale physical build-outs, it told TechCrunch. Software is much better for quick expansion, and as that’s the name of the startup game, holding off on more physical locations could make good sense until the company can raise more capital.
Heru has big plans to double-down its product work, and eventually add more countries to its roster. The Latin American market is a ripe place for startups to shake things up. Let’s see how quickly Heru can make its mark.
Jitsu, a graduate of the Y Combinator Summer 2020 cohort, is developing an open source data integration platform that helps developers send data to a data warehouse. Today, the startup announced a $2 million seed investment.
Costanoa Ventures led the round with participation from YCombintaor, The House Fund and SignalFire.
In addition to the open source version of the software, the company has developed a hosted version that companies can pay to use, which shares the same name as the company. Peter Wysinski, Jitsu’s co-founder and CEO, says a good way to think about his company is an open source Segment, the customer data integration company that was recently sold to Twilio for $3.2 billion.
But he says, it goes beyond what Segment by allowing you to move all kinds of data whether customer data, connected device data or other types. “If you look at the space in general, companies want more granularity. So let’s say for example, a couple years ago you wanted to sync just your transactions from QuickBooks to your data warehouse, now you want to capture every single sale at the point of sale. What Jitsu lets you do is capture essentially all of those events, all of those streams, and send them to your data warehouse,” Wysinski explained.
Among the data warehouses it currently supports include Amazon Redshift, Google BigQuery, PostGres and Snowflake.
The founders built the open source project called EventNative to help solve problems they themselves were having moving data around at their previous jobs. After putting the open source version on GitHub a few months ago, they quickly attained 1000 stars, proving that they had delivered something that solved a common problem for data teams. They then built the hosted version, Jitsu, which went live a couple of weeks ago.
For now, the company is just the two co-founders, Wysinski and CTO Vladimir Klimontovich, but they intend to do some preliminary hiring over the next year to grow the company, most likely adding engineers. As they begin to build out the startup, Wysinski says that being open source will help drive diversity and inclusion in their hiring.
“The goal is essentially to go after that open source community and hire people from anywhere because engineers aren’t just […] one color or one race, they’re everywhere, and being open source, and especially being in a remote world, makes it so so much simpler [to build a diverse workforce], and a lot of companies I feel are going down that road,” he said.
He says along that line, the plan is to be a fully remote company, even after the pandemic ends, as they hire from anywhere. The goal is to have quarterly offsite meetings to check in with employees, but do the majority of the work remotely.
BuildBuddy, whose software helps developers compile and test code quickly using a blend of open-source technology and proprietary tools, announced a funding round today worth $3.15 million.
The company was part of the Winter 2020 Y Combinator batch, which saw its traditional demo day in March turned into an all-virtual affair. The startups from the cohort then had to raise capital as the public markets crashed around them and fear overtook the startup investing world.
BuildBuddy’s funding round makes it clear that choppy market conditions and a move away from in-person demos did not fully dampen investor interest in YC’s March batch of startups, though it’s far too soon to tell if the group will perform as well as others, given how long it takes for startup winners to mature into exits.
BuildBuddy has foundations in how Google builds software. To get under the skin of what it does, I got ahold of co-founder Siggi Simonarson, who worked at the Mountain View-based search giant for a little over a half decade.
During that time he became accustomed to building software in the Google style, namely using its internal tool called Blaze to compile his code. It’s core to how developers at Google work, Simonarson told TechCrunch. “You write some code,” he added, “you run Blaze build; you write some code, you run Blaze test.”
What sets Blaze apart from other developer tools is that “opposed to your traditional language-specific build tools,” Simonarson said, it’s code agnostic, so you can use it to “build across [any] programming language.”
Google open-sourced the core of Blaze, which was named Bazel, an anagram of the original name.
So what does BuildBuddy do? In product terms, it’s building the pieces of Blaze that Google engineers have access to inside the company, for other developers using Bazel in their own work. In business terms, BuildBuddy wants to offer its service to individual developers for free, and charge companies that use its product.
Simonarson and his co-founder Tyler Williams started small, building a “results UI” tool that they shared with a Bazel user group. The members of that group picked up the tool, rapidly bringing it inside a number of sizable companies.
This origin story underlines something that BuildBuddy has that early-stage startups often lack, namely demonstrable enterprise market appetite. Lots of big companies use Bazel to help create software, and BuildBuddy found its way into a few of them early in its life.
Simply building a useful tool for a popular open-source project is no guarantee of success, however. Happily for BuildBuddy, early users helped it set direction for its product development, meaning that over the summer the startup added the features that its current users most wanted.
Simonarson explained that after BuildBuddy was initially used by external developers, they demanded additional tools, like authentication. In the words of the co-founder, the response from the startup was “great!” The same went for a request for dashboarding, and other features.
Even better for the YC graduate, some of the features requested were the sort that it intends to charge for. That brings us back to money and the round itself.
BuildBuddy closed its round in May. But like with most venture capital tales, it’s not a simple story.
According to Simonarson, his startup started raising the round during one of those awful early-COVID days when the stock market dropped by double-digit percentage points in a single trading session.
BuildBuddy’s goal was to raise $1.5 million. Simonarson was worried at the time, telling TechCrunch that it was his first time fundraising, and that he wasn’t sure if his startup was going to “raise anything at all” in that climate.
But the nascent company secured its first $100,000 check. And then a $300,000 check, over time managing to fill out its round.
So what happened that got the company from $1.5 million to just over $3 million? The investor that put in $300,000 wanted to put in another $2 million. The company talked them down to $1.5 million at a higher cap (BuildBuddy raised its round using a SAFE), and the deal was done at those terms.
The startup initially didn’t want to raise the extra cash, but Simonarson told TechCrunch that at the time it was not clear where the fundraising environment was heading; BuildBuddy raised back when startup layoffs were a leading story, and a return to high-cadence VC rounds was months away.
So BuildBuddy wound up securing $3.15 million to support a current headcount of four. It intends to hire, naturally, lower its comically long runway and keep building out its Bazel-focused service.
Picking a few names from the investor spreadsheet that BuildBuddy sent over — points for completeness to the startup — Y Combinator, Addition, Scribble and Village Global, among others put capital into the round.
Dev tools are hot at the moment. Given that, as soon as BuildBuddy’s ARR starts to get moving, I expect we’ll hear from them again.
Cashfree, an Indian startup that offers a wide-range of payments services to businesses, has raised $35.3 million in a new financing round as the profitable firm looks to broaden its offering.
The Bangalore-based startup’s Series B was led by London-headquartered private equity firm Apis Partners (which invested through its Growth Fund II), with participation from existing investors Y Combinator and Smilegate Investments. The new round brings the startup’s to-date raise to $42 million.
Cashfree kickstarted its journey in 2015 as a solution for restaurants in Bangalore that needed an efficient way for their delivery personnel to collect cash from customers.
Akash Sinha and Reeju Datta, the founders of Cashfree, did not have any prior experience with payments. When their merchants asked if they could build a service to accept payments online, the founders quickly realized that Cashfree could serve a wider purpose.
In the early days, Cashfree also struggled to court investors, many of whom did not think a payments processing firm could grow big — and do so fast enough. But the startup’s fate changed after Y Combinator accepted its application, even though the founders had missed the deadline and couldn’t arrive to join the batch on time. Y Combinator later financed Cashfree’s seed round.
Fast-forward five years, Cashfree today offers more than a dozen products and services and helps over 55,000 businesses disburse salary to employees, accept payments online, set up recurring payments and settle marketplace commissions.
Some of its customers include financial services startup Cred, online grocer BigBasket, food delivery platform Zomato, insurers HDFC Ergo and Acko and travel ticketing service provider Ixigo. The startup works with several banks and also offers integrations with platforms such as Shopify, PayPal and Amazon Pay.
Based on its offerings, Cashfree today competes with scores of startups, but it has an edge — if not many. Cashfree has been profitable for the past three years, Sinha, who serves as the startup’s chief executive, told TechCrunch in an interview.
“Cashfree has maintained a leadership position in this space and is now going through a period of rapid growth fuelled by the development of unique and innovative products that serve the needs of its customers,” Udayan Goyal, co-founder and a managing partner at Apis, said in a statement.
The startup processed over $12 billion in payments volumes in the financial year that ended in March. Sinha said part of the fresh fund will be deployed in R&D so that Cashfree can scale its technology stack and build more services, including those that can digitize more offline payments for its clients.
Cashfree is also working on building cross-border payments solutions to explore opportunities in emerging markets, he said.
“We still see payments as an evolving industry with its own challenges and we would be investing in next-gen payments as well as banking tech to make payments processing easier and more reliable. With the solid foundation of in-house technologies, tech-driven processes and in-depth industry knowledge, we are confident of growing Cashfree to be the leader in the payments space in India and internationally,” he said.
Data engineering is one of these new disciplines that has gone from buzzword to mission critical in just a few years. Data engineers design and build all the connections between sources of raw data (your payments information or ad-tracking data or what have you) and the ultimate analytics dashboards used by business executives and data scientists to make decisions. As data has exploded, so has their challenge of doing this key work, which is why a new set of tools has arrived to make data engineering easier, faster and better than ever.
Well, that Demo Day presentation and the company’s trajectory clearly caught the eyes of investors, since the startup locked in $2.1 million in seed funding from NEA, the company announced this morning.
As I wrote back in August:
With Datafold, changes made by data engineers in their extractions and transformations can be compared for unintentional changes. For instance, maybe a function that formerly returned an integer now returns a text string, an accidental mistake introduced by the engineer. Rather than wait until BI tools flop and a bunch of alerts come in from managers, Datafold will indicate that there is likely some sort of problem, and identify what happened.
Definitely read our profile if you want to learn more about the product and origin story.
Not a whole heck of a lot has changed over the past few weeks (some new features, some new customers), but with more money in its billfold, Datafold is going to keep on growing, hiring and taking on the world of data engineering.
The company, which graduated from Y Combinator earlier this year, has recently raised $2 million from Signia Venture Partners and Sound Ventures for its predictive software, because sometimes businesses do need a weatherman to know which way the wind blows.
Atmo was founded by Johan Mathe, a former Google X employee who worked on Project Loon, the business unit focused on providing internet connectivity via floating balloons that would create a network of wireless coverage in emerging markets.
“I spent a lot of time working on weather,” said Mathe. It was his job to find ways for the balloons to navigate different areas and much of that navigation was complicated by weather patterns, he said.
“As I needed to build that there was so much complexity from the sheer amount of data with the weather,” Mathe said. “I thought I have to build something to make the intersection of weather and AI much more available for everyone.”
That was the beginning of a four year journey, which culminated in Atmo (formerly known as Froglabs.ai), the Berkeley, Calif.-based startup that’s providing predictive weather analysis for businesses ranging from renewable energy to ice cream shops.
Levy, who had co-founded the drug discovery company Atomwise, knew Mathe socially and initially invested in his company when it was just an idea. But as he saw the value in weather data and made the jump from investor and advisor to co-founder.
Now Mathe, Levy, and chief technology officer Jeremy Lequeux all work from Levy’s Berkeley house as they develop their software and take their company to the next level.
And recent events make the need for the company’s services abundantly transparent. Since 2019, climate-related events have cost the US roughly $89 billion, according to data compiled by the National Oceanic and Atmospheric Administration.
“Every business is on this weather spectrum,” said Levy. “Let’s say you just are an ice cream location. Degree to which it’s hot or cold will affect your sales 10%. We’ve worked towards creating a general purpose predictive system and takes weather data on one hand and all the historical weather collected around the world. It compares the two and analyzes how are all of your key business metrics affected by the weather.”
The company already has a half dozen customers including two billion-dollar businesses in the renewable energy and eCommerce and logistics industries, Levy said.
“One of the areas that we work on is risk and extreme weather, like how do you predict these fluke events that you have very little intervention around,” said Levy. “We make that kind of prediction separate and apart from how you can best optimize when things are in a relatively normal state.”
Demand is only going to increase as these extreme events become more common, because governments and businesses will be looking at ways to improve their ability to withstand or adapt to these catastrophic conditions. “There’s a need because everybody is talking about resilience these days,” said Levy. “I see Atmo as the company that’s going to provide these insights for the big companies that are concerned about this problem now.”
A-Frame, a Los Angeles-based developer of personal care brands supported by celebrities, has raised $2 million in a new round of funding led by Initialized Capital.
Joining Initialized in the round is the serial entrepreneur Moise Emquies, whose previous clothing lines, Ella Moss and Splendid, were acquired by the fashion holding company VFC in 2017.
A-Frame previously raised a seed round backed by cannabis dispensary Columbia Care. The company’s first product is a hand soap, Keeper. Other brands in suncare and skincare, children and babycare, and bath and body will follow, the company said.
“We partner with the investment groups at the agencies,” said company founder and chief executive, Ari Bloom. “We start interviewing different talent, speaking with their agents and their managers. We create an entity that we spin out. I wouldn’t say that we compete with the agencies.”
So far, the company has worked with CAA, UTA and WME on all of the brands in development, Bloom said. Two new brands should launch in the next couple of weeks.
As part of the round, actor, activist, and author Hill Harper has joined the company as a co-founder and as the company’s chief strategy officer. Emquies is also joining the company as its chief brand officer.
“Hill is my co-founder. He and I have worked together for a number of years. He’s with me at the holding company level. Identifying the opportunities,” said Bloom. “He’s bridging the gap between business and talent. He’s a part of the conversations when we talk to the agencies, managers and the talent. He’s a great guy that I think has a lot of respect in the agency and talent world.”
Initialized General Partner Alda Leu Dennis took point on the investment for Initialized and will take a seat on the company’s board of directors alongside Emquies. Other directors include Columbia Care chief executive, Nicholas Vita, and John D. Howard, the chief executive of Irving Place Capital.
“For us the calculus was to look at personal care and see what categories need to be reinvented because of sustainability,” said Bloom. “It was important to us once we get to a category what is the demographic opportunity. Even if categories were somewhat evolved they’re not all the way there… everything is in non-ingestible personal care. When you have a celebrity focused brand you want to focus on franchise items.”
The Keeper product is a subscription-based model for soap concentrates and cleansing hand sprays.
A serial entrepreneur, Bloom’s last business was the AR imaging company, Avametric, which was backed by Khosla Ventures and Y Combinator and wound up getting acquired by Gerber Technology in 2018. Bloom is also a founder of the Wise Sons Delicatessen in San Francisco.
“We first invested in Avametric at Initialized in 2013 and he had experience prior to that as well. From a venture perspective I think of these all around real defensibility of brand building,” said Dennis.
The investors believe that between Bloom’s software for determining market preferences, A-Frame’s roster of celebrities and the company’s structure as a brand incubator, all of the ingredients are in place for a successful direct to consumer business.
However, venture capitalists have been down this road before. The Honest Co. was an early attempt to build a sustainable brand around sustainable personal care products. Bloom said Honest provided several lessons for his young startup, one of them being a knowledge of when a company has reached the peak of its growth trajectory and created an opportunity for other, larger companies to take a business to the next level.
“Our goal is a three-to-seven year horizon that is big enough at a national scale that a global player can come in and internationally scale it,” said Bloom.
Mozart Data founders Peter Fishman and Dan Silberman have been friends for over 20 years, working at various startups, and even launching a hot sauce company together along the way. As technologists, they saw companies building a data stack over and over. They decided to provide one for them and Mozart Data was born.
The company graduated from the Y Combinator Summer 2020 cohort in August and announced a $4 million seed round today led by Craft Ventures and Array Ventures with participation from Coelius Capital, Jigsaw VC, Signia VC, Taurus VC and various angel investors.
In spite of the detour into hot sauce, the two founders were mostly involved in data over the years and they formed strong opinions about what a data stack should look like. “We wanted to bring the same stack that we’ve been building at all these different startups, and make it available more broadly,” Fishman told TechCrunch.
They see a modern data stack as one that has different databases, SaaS tools and data sources. They pull it together, process it and make it ready for whatever business intelligence tool you use. “We do all of the parts before the BI tool. So we extract and load the data. We manage a data warehouse for you under the hood in Snowflake, and we provide a layer for you to do transformations,” he said.
The service is aimed mostly at technical people who know some SQL like data analysts, data scientists and sales and marketing operations. They founded the company earlier this year with their own money, and joined Y Combinator in June. Today, they have about a dozen customers and six employees. They expect to add 10-12 more in the next year.
Fishman says they have mostly hired from their networks, but have begun looking outward as they make their next hires with a goal of building a diverse company. In fact, they have made offers to several diverse candidates, who didn’t ultimately take the job, but he believes if you start looking at the top of the funnel, you will get good results. “I think if you spend a lot of energy in terms of top of funnel recruiting, you end up getting a good, diverse set at the bottom,” he said.
The company has been able to start from scratch in the midst of a pandemic and add employees and customers because the founders had a good network to pitch the product to, but they understand that moving forward they will have to move outside of that. They plan to use their experience as users to drive their message.
“I think talking about some of the whys and the rationale is our strategy for adding value to customers […], it’s about basically how would we set up a data stack if we were at this type of startup,” he said.
Explo, a member of the Y Combinator Winter 2020 class, which is helping customers build customer-facing business intelligence dashboards, announced a $2.3 million seed round today. Investors included Amplo VC, Soma Capital and Y Combinator along with several individual investors.
The company originally was looking at a way to simplify getting data ready for models or other applications, but as the founders spoke to customers, they saw a big need for a simple way to build dashboards backed by that data and quickly pivoted.
Company CEO and co-founder Gary Lin says the company was able to leverage the core infrastructure, data engineering and production that it had built while at Y Combinator, but the new service they have created is much different from the original idea.
“In terms of the UI and the output, we had to build out the ability for our end users to create dashboards, for them to embed the dashboards and for them to customize the styles on these dashboards, so that it looks and feels as though it was part of their own product,” Lin explained.
While the founders had been working on the original idea since last year, they didn’t actually make the pivot until September. They made the change because they were hearing this was really what customers needed more than the tool they had been building while at Y Combinator. In fact, Chen says that their YC mentors and investors have been highly supportive of the switch.
The company is just getting started with the four original co-founders — Lin, COO Andrew Chen, CTO Rohan Varma and product designer Carly Stanisic — but the plan is to use this money to beef up the engineering team with three to five new hires.
With a diverse founding team, the company wants to continue looking at diversity as it builds the company. “One of the biggest reasons that we think diversity is important is that it allows us to have a bigger perspective and a grander perspective on things. And honestly, it’s in environments where I have personally […] been involved where we’ve actually been able to create the best ideas was by having a larger perspective. And so we definitely are going to be as inclusive as possible and are definitely thinking about that as we hire,” Lin said.
As the company has grown up during the pandemic, the founding core is used to working remotely and the goal moving forward is to be a distributed company. “We will be a remote distributed company so we’re hiring people no matter where they are, which actually makes it a lot easier from a hiring perspective because we’re able to reach a much more diverse and large pool of applicants,” Lin said.
They are in the process of thinking about how they can build a culture as they bring in distributed employees. “I think the way that we’ve started to see it is that working distributed is not a reduced experience, but just a different one and we are thinking about different things like how e organize new people when they on board, and maybe we can meet up as a team and have a retreat where we are located in the same place [when travel allows],” he said.
For now, they will remain remote as they take their first half dozen customers and begin to build the company with the new investment.
SoftBank’s Opportunity Growth Fund has made the health insurance startup Vitable Health the first commitment from its $100 million fund dedicated to investing in startups founded by entrepreneurs of color.
The Philadelphia-based company, which recently launched from Y Combinator, is focused on bringing basic health insurance to underserved and low-income communities.
Founded by Joseph Kitonga, a 23 year-old entrepreneur whose parents immigrated to the U.S. a decade ago, Vitable provides affordable acute healthcare coverage to underinsured or un-insured populations and was born out of Kitonga’s experience watching employees of his parents’ home healthcare agency struggle to receive basic coverage.
The $1.5 million commitment was led by the SoftBank Group Corp Opportunity Fund, and included Y Combinator, DNA Capital, Commerce Ventures, MSA Capital, Coughdrop Capital, and angels like Immad Akhund, the chief executive of Mercury Bank; and Allison Pickens, the former chief operating officer of Gainsight, the company said in a blog post.
“Good healthcare is a basic right that every American deserves, whoever they are,” said Paul Judge, the Atlanta-based Early Stage Investing Lead for the fund and the founder of Atlanta’s TechSquare Labs investment fund. “We’ve been inspired by Joseph and his approach to addressing this challenge. Vitable Health is bridging critical gaps in patient care and has emerged as a necessary, essential service for all whether they’re uninsured, underinsured, or simply need a better plan for their lifestyle.”
SoftBank created the opportunity fund while cities around the U.S. were witnessing a wave of public protests against systemic racism and police brutality stemming from the murder of the Black Minneapolis citizen George Floyd at the hands of white police officers. Floyd’s murder reignited simmering tensions between citizens and police in cities around the country over issues including police brutality, the militarization of civil authorities, and racial profiling.
SoftBank has had its own problems with racism in its portfolio this year. A few months before the firm launched its fund, the CEO and founder of one of its portfolio companies, Banjo, resigned after it was revealed that he once had ties to the KKK.
With the Opportunity Fund, SoftBank is trying to address some of its issues, and notably, will not take a traditional management fee for transactions out of the fund “but instead will seek to put as much capital as possible into the hands of founders and entrepreneurs of color.”
The Opportunity Fund is the third investment vehicle announced by SoftBank in the last several years. The biggest of them all is the $100 billion Vision Fund; then last year it announced the $2 billion Innovation Fund focused on Latin America.
Index founders, Xavier Pladevall and Eduardo Portet, have been friends since they were small children in the Dominican Republic. Both came to college in the U.S., and last year the two decided to launch a startup to help non-technical users build business intelligence dashboards without coding.
Today they get to keep building on that dream with the help of a $2.6 million seed investment from David Sacks, Slack, Gradient Ventures, Y Combinator and other individual investors.
What has attracted this investment is a couple of young founders who are passionate about making it simple to build a data dashboard without help from experts like engineers or data analysts.
“Essentially what we do is we help companies build their business metrics dashboards with as little code or technical knowledge as possible. The byproduct of that is that anyone in the company can build their own metrics for their teams,” co-founder Xavier Pladevall told TechCrunch.
End users can connect to a growing list of data sources and Index deals with building the queries and displaying the data for the users without data scientists or data analysts to help. For now, that includes Salesforce and Hubspot for CRM data, Stripe payments data and certain databases from Postgres and MongoDB.
Company co-founders Xavier Pladevall and Eduardo Portet. Image Credits: Index
As the founders build out the product, they want to stay lean with just the two founders and perhaps two additional engineers. “We’re actually looking to hire two people full time, and that’s going to take us to the Series A, and we’ve been very clear with investors about that,” he said.
As Latino immigrant founders, they want to build a company that’s diverse and inclusive. He says that’s it’s not hard for him and his co-founder to find people of color because they have formed friendships with a diverse network of people they can tap into.
“Our job is to keep doing what we’re doing, which is to be friends with a bunch of different people because that is genuine and people can definitely tell you’re trying to meet some diversity quota versus when you’re generally a diversity-oriented type of company because it comes back to the founders themselves,” he said.
The two founders and their families have been friends since they were children. Growing up in the Dominican Republic, they didn’t have access to computer science classes, but they did have access to the internet and they got the startup bug from reading U.S. tech publications like this one, and learned to code from YouTube videos and StackOverflow. They both came to college in the U.S. and both interned at large companies — Pladevall at Facebook and Portet worked at Metadata in New York.
The idea came together because Pladevalll was part of a team at Facebook building a similar tool for internal use. He decided that it would be a viable commercial idea for companies without the resources of Facebook. He came together with his childhood friend and began building the company in January as the pandemic hit.
He acknowledges the hardship of this year, but says it really helped them focus because there wasn’t anything else to do. While they are amazed at having $2.6 million in the bank, he says they still have the hunger that he believes is part of the immigrant founder ethos.
“It’s just hunger to just prove yourself and if coding is what it takes, learn how to code. If it’s going through an early visa process, which is by the way, way harder than raising millions of dollars and going through YC, in my opinion, [you do that]” he said. He said it’s about doing whatever it takes.
As the two friends take their first steps as a company, they have some early customers and continue to refine the product. With today’s funding they have some lofty goals for the next year, which include building out that product, reaching $1 million in ARR and building distribution for the dashboard.
If they can meet those goals, Pladevall says, they should be able to get their Series A. I wouldn’t bet against them.
Founded by longtime developers and Georgia Institute of Technology alumni, Ken Ahrens, Matthew LeRay and Nate Lee had known each other for roughly twenty years before making the jump to working together.
A circuitous path of interconnecting programming jobs in the devops and monitoring space led the three men to realize that there was an opportunity to address one of the main struggles new programmers now face — making sure that updates to api integrations in a containerized programming world don’t wind up breaking apps or services.
“We were helping to solve incident outages and incidents that would cause downtime,” said Lee. “It’s hard to ensure the quality between all of these connection points [between applications]. And these connection points are growing as people add apis and containers. We said, ‘How about we solve this space? How could we preempt all of this and ensure maintaining release velocity with scalable automation?'”
Typically companies release new updates to code in a phased approach or in a test environment to ensure that they’re not going to break anything. Speedscale proposes test automation using real traffic so that developers can accelerate the release time.
“They want to change very frequently,” said Ahrens, speaking about the development life cycle. “Most of the changes are great, but every once in a while they make a change and break part of the system. The state of the art is to wait for it to be broken and get someone to fix it quickly.”
The pitch SpeedScale makes to developers is that its service can give coders the ability to see the problems before the release. They automate the creation of the staging environment, automation suite and orchestration to create that environment.
“One of the big things for me was when I saw the rise of Kubernetes was what’s really happening is that engineering leaders have been able to give more autonomy to developers, but no one has come up with a great way to validate and I really think that Speedscale can solve that problem.”
The Atlanta-based company, which only just graduated from Y Combinator a few months ago, is currently in a closed alpha with select pilot partners, according to LeRay. And the nine month-old company has raised $2.2 million from investors including Sierra Ventures from the Bay Area and Atlanta’s own Tech Square Ventures to grow the business.
“Apis are a huge market,” Ahrens said of the potential opportunity for the company. “there’s 11 million developers who develop against apis… We think the addressable market for us is in the billions.”
In Y Combinator’s early days, founders would move to Palo Alto, split a two-bedroom with five others to save money and trade notes around the clock with their new, like-minded roommates.
Now, as remote work continues and the pandemic persists, scores of entrepreneurs are working from home around the world. Y Combinator isn’t requiring its recent cohorts to relocate and collaboration is a screen-to-screen affair.
Now that they can work from literally anywhere, many entrepreneurs are forming homes with other founders. Hacker homes, the newest iteration of remote work adaption, feels like a nostalgic attempt to recreate some of the synergies COVID-19 wiped out. Generally speaking, it’s a nod to the digital nomad lifestyle, but in some cases, hacker homes feel closer to Hype House, a TikTok mansion laden with sponsored indulgence and wealth.
For Greg Isenberg, a growth advisor to TikTok and former head of strategy at WeWork, entrepreneur homes are a signal of what the foreseeable future of building could look like.
“The type of vibe you used to get from Y Combinator just doesn’t exist anymore,” Isenberg said, as these houses could recreate some of the scrappiness and like-mindedness that defined the incubator’s early days.
While some see founder communes as vehicles for creating a more level playing field, critics say the model perpetuates Silicon Valley cultural constructs that favor white men.
In other words, sometimes there’s a cost to after-work happy hours making a comeback.
Michael Houck, a former product manager at Airbnb and Uber, rented a home in Tulum, Mexico in May 2020. He put $21,000 of non-refundable money on his credit card and invited friends and people he met on the internet before hopping on a plane. Anyone who came had to be okay with a few rules: you must pay rent, launch projects and you have to be okay with building your company in public.
In all, 18 entrepreneurs, including Houck, formed The Launch House. Residents include former startup fellowship participants from On Deck, product managers and solo entrepreneurs. On the plane ride over, house founder Brett Goldstein launched its first tool.
Habitants of the Launch House use the pool for recreation and brainstorm sessions, called “pool-storms.” Image Credits: The Launch House
“How do you actually launch a consumer product? You need wide reach, influence, community and media properties all together,” Goldstein said. “I wouldn’t say we’re the next Y Combinator, but the next YC would look something like that.”
In just a few weeks, The Launch House has produced nine products, including a discovery platform for the best OnlyFans accounts, an anonymous Twitter bot that sends positive comments and tools that enhance newsletter and email reading experiences.
Launch House members described a strong focus on inclusion when populating future homes and just opened up the application process for Launch House 2. One way the house is trying to give access to other people is by open-sourcing information and projects that residents build together.
The website has a Launch Library where builders can submit their email addresses to access resources on how to build anything from a podcast to a clothing brand to a community.
“There’s this sort of veil of mystique that surrounds a lot of entrepreneurs and founders,” Goldstein said. “The curtain has been lifted, and now you can get a social media perspective, and inside look at what it takes to start and launch a company.”
Now, more than 1,500 people are on the Launch House waitlist. Multiple investors have approached the group to sponsor internal and external events and some companies have even asked for the right to do product placements.
The concept has surely brought in an audience, and copycats: an unaffiliated group called The Rocketship House posted a trailer on Twitter in October:
When reached via e-mail, organizers of Rocketship House declined to answer specific questions about the launch, or as they put it, “blast off.” The group confirmed that it is funded by a few unnamed large investors based in Beverly Hills, and includes a mix of marketers and influencers that invest in social media. It is currently accepting applications, drawing itself as similar to a TikTok mansion.
“Similar to Sway House [a residence for TikTok personalities], we will be making fun and dramatic dope bro content, centered around launching startups. We all live exciting lives, and there’s plenty of drama, so we’re excited to showcase that,” the e-mail from Rocketship House read.
Not all entrepreneur homes are following suit in terms of strategy, for more reasons than one.
Most startup founders have a tough road to their first round of funding, but the founders of Digital Brain had it a bit tougher than most. The two young founders survived by entering and winning hackathons to pay their rent and put food on the table. One of the ideas they came up with at those hackathons was DigitalBrain, a layer that sits on top of customer service software like Zendesk to streamline tasks and ease the job of customer service agents.
They ended up in Y Combinator in the Summer 2020 class, and today the company announced a $3.4 million seed investment. This total includes $3 million raised this round, which closed in August, and previously unannounced investments of $250,000 in March from Unshackled Ventures and $150,000 from Y Combinator in May.
The round was led by Moxxie Ventures, with help from Caffeinated Capital, Unshackled Ventures, Shrug Capital, Weekend Fund, Underscore VC and Scribble Ventures, along with a slew of individual investors.
Company co-founder Kesava Kirupa Dinakaran says that after he and his partner Dmitry Dolgopolov met at a hackathon in May 2019, they moved into a community house in San Francisco full of startup founders. They kept hearing from their housemates about the issues their companies faced with customer service as they began scaling. Like any good entrepreneur, they decided to build something to solve that problem.
“DigitalBrain is an external layer that sits on top of existing help desk software to actually help the support agents get through their tickets twice as fast, and we’re doing that by automating a lot of internal workflows, and giving them all the context and information they need to respond to each ticket, making the experience of responding to these tickets significantly faster,” Dinakaran told TechCrunch.
What this means in practice is that customer service reps work in DigitalBrain to process their tickets, and as they come upon a problem such as canceling an order or reporting a bug, instead of traversing several systems to fix it, they choose the appropriate action in DigitalBrain, enter the required information and the problem is resolved for them automatically. In the case of a bug, it would file a Jira ticket with engineering. In the case of canceling an order, it would take all of the actions and update all of the records required by this request.
As Dinakaran points out, they aren’t typical Silicon Valley startup founders. They are 20-year-old immigrants from India and Russia, respectively, who came to the U.S. with coding skills and a dream of building a company. “We are both outsiders to Silicon Valley. We didn’t go to college. We don’t come from families of means. We wanted to come here and build our initial network from the ground up,” he said.
Eventually they met some folks through their housemates, who suggested that they apply to Y Combinator. “As we started to meet people that we met through our community house here, some of them were YC founders and they kept saying I think you guys will love the YC community, not just in terms of your ethos, but also just purely from a perspective of meeting new people and where you are,” he said.
He said while he and his co-founder have trouble wrapping their arms around a number like the amount they have in the bank now, considering it wasn’t that long ago that they were struggling to meet expenses every month, they recognize this money buys them an opportunity to help start building a more substantial company.
“What we’re trying to do is really accelerate the development and building of what we’re doing. And we think if we push the gas pedal with the resources we’ve gotten, we’ll be able to accelerate bringing on the next couple of customers, and start onboarding some of the larger companies we’re interested in,” he said.
As machine learning has grown, one of the major bottlenecks remains labeling things so the machine learning application understands the data it’s working with. Datasaur, a member of the Y Combinator Winter 2020 batch, announced a $3.9 million investment today to help solve that problem with a platform designed for machine learning labeling teams.
The funding announcement, which includes a pre-seed amount of $1.1 million from last year and $2.8 million seed right after it graduated from Y Combinator in March, included investments from Initialized Capital, Y Combinator and OpenAI CTO Greg Brockman.
Company founder Ivan Lee says that he has been working in various capacities involving AI for seven years. First when his mobile gaming startup, Loki Studios was acquired by Yahoo! in 2013, and Lee was eventually moved to the AI team, and most recently at Apple. Regardless of the company, he consistently saw a problem around organizing machine learning labeling teams, one that he felt he was uniquely situated to solve because of his experience.
“I have spent millions of dollars [in budget over the years] and spent countless hours gathering labeled data for my engineers. I came to recognize that this was something that was a problem across all the companies that I’ve been at. And they were just consistently reinventing the wheel and the process. So instead of reinventing that for the third time at Apple, my most recent company, I decided to solve it once and for all for the industry. And that’s why we started Datasaur last year,” Lee told TechCrunch.
He built a platform to speed up human data labeling with a dose of AI, while keeping humans involved. The platform consists of three parts: a labeling interface, the intelligence component, which can recognize basic things, so the labeler isn’t identifying the same thing over and over, and finally a team organizing component.
He says the area is hot, but to this point has mostly involved labeling consulting solutions, which farm out labeling to contractors. He points to the sale of Figure Eight in March 2019 and to Scale, which snagged $100 million last year as examples of other startups trying to solve this problem in this way, but he believes his company is doing something different by building a fully software-based solution.
The company currently offers a cloud and on-prem solution, depending on the customer’s requirements. It has 10 employees with plans to hire in the next year, although he didn’t share an exact number. As he does that, he says he has been working with a partner at investor Initialized on creating a positive and inclusive culture inside the organization, and that includes conversations about hiring a diverse workforce as he builds the company.
“I feel like this is just standard CEO speak but that is something that we absolutely value in our top of funnel for the hiring process,” he said.
As Lee builds out his platform, he has also worried about built-in bias in AI systems and the detrimental impact that could have on society. He says that he has spoken to clients about the role of labeling in bias and ways of combatting that.
“When I speak with our clients, I talk to them about the potential for bias from their labelers and built into our product itself is the ability to assign multiple people to the same project. And I explain to my clients that this can be more costly, but from personal experience I know that it can improve results dramatically to get multiple perspectives on the exact same data,” he said.
Lee believes humans will continue to be involved in the labeling process in some way, even as parts of the process become more automated. “The very nature of our existence [as a company] will always require humans in the loop, […] and moving forward I do think it’s really important that as we get into more and more of the long tail use cases of AI, we will need humans to continue to educate and inform AI, and that’s going to be a critical part of how this technology develops.”
While the asset class remains largely exclusive and skewed white and male, innovation does have the potential to usher in a new, far more inclusive generation of investors. The question is how to ensure that these newer investors survive and thrive and are able to scale their operations in much the way that their predecessors in the industry have.
Oper8r hopes to fill in the gap between what it takes to be an occasional investor and become a full-time VC who is backed by institutional dollars. The program, which just completed its debut cohort, describes itself as Y Combinator for funds and emerging fund managers. The goal is to teach investors who want to build an institutional fund about the rules and oh-so-many regulations of the game.
Oper8r was started by Winter Mead, who worked as an institutional investor for years at Sapphire Ventures and Hall Capital Partners, and Welly Sculley, who operated at venture capital-backed fintech companies Ripple and Boku. The friends saw that there was no organization focused on next-gen fund managers. Instead of raising capital to create a program, the friends started a program, free of charge, to train investors.
“For VCs, barriers to entries were going down. Starting a VC fund was becoming easier. But it wasn’t easier to know various parts of building and scaling a VC firm,” Mead tells TechCrunch.
The program spans 10 weeks with 6 to 10 hours of instructional material per day. Oper8r’s curriculum covers the nuts and bolts of how to put together a scalable fund, but Mead says that they stay away from teaching investors how to invest since that information is already accessible. For example, VC University is a joint initiative between Berkeley Law, NVCA, and Venture Forward to teach venture finance.
“There’s a lot to firm building that isn’t just investing,” he said. “Having that knowledge can save you a lot of time, save you a lot of cost, save you a lot of headaches.”
Oper8r views its core benefit for aspiring fund managers as demystifying the world of limited partners.
“VCs come in here and think of the LP world as a monolith,” he said.” Oper8r helps VCs segment out the LP market, understand the difference between a family office and university, and understand “who will actually invest into a fund 1 or fund 2.”
To help navigate the LP world, Oper8r gives participants access to over 50 institutional investors, such as Hamilton College, Northern Trust, Legacy Ventures, and Investure, who will speak on their investment appetite and cadence. It doesn’t hurt that those same partners benefit from access to funds they find especially noble.
“[Limited partners] want to invest into these next generation of VCs, but they’re just having a hard time really understanding this market right now,” Mead said.
Unlike Y Combinator, Oper8r does not currently take a stake in the funds that participate in its program. However, Mead tells me that he and his co-founder are planning to capitalize the program and build an investment platform atop of Oper8r. In the future, they will function as LPs in graduated funds.
Oper8r’s first cohort was launched in June 2020. Out of 125 applications, only 18 VC fund teams were chosen. In terms of diversity, 11 of those teams were from underrepresented backgrounds including 6 women-led general partner teams and 5 black and person of color-led teams. Half of the teams also included immigrants.
Its first cohort included operator angels, investors who recently spun out of big firms, founders, and rolling fund managers, all looking to take a more institutional approach to investing.
Heather Harnett, the founder of NYC startup studio Human Ventures, was looking for a way to take advantage of the access she was getting from the platform she built. She turned to Oper8r to learn procedural and operational consistencies on how to create a fund, while also cross-referencing with other managers in the batch.
“What First Round Capital did to standardize the early financing rounds for startups and build community among founders, Oper8r is doing for emerging fund managers,” she said.
Oper8r isn’t entirely without competitors. Plexo Capital, which is both a venture firm and an outfit that backs other venture funds, is also spinning up a program to help educate young investors on the mechanics of back-office administration an other pieces of the venture fund puzzle.
Of course, an even bigger potential rival is AngelList, which takes care of the hassle, rules, and regulations that can up an up-and-coming fund manager and that charges a fee in return.
Mead doesn’t view Oper8r’s methodology as competitive with AngelList, saying that “there’s room for more than one organization that supports a merchant just because of the size of [venture capital] right now.” The firm is also focused on teaching new investors how to manage their businesses themselves. It’s a top-down versus ground-up approach.
Mead further adds that while AngelList’s rolling fund product has grown accessibility, some limited partners still only invest in venture capitalists who’ve raised capital from institutions previously. Thus, new fund managers might be comfortable raising a $10 million micro-fund via a rolling method, but when it comes time to get a $150 million early-stage investment vehicle with institutional LPs, it might not be as easy.
Ultimately, Oper8r and AngelList could co-exist as they both strive for similar goals: increase representation within venture capital, even if it’s through nontraditional routes.
“Most institutions see only one way to make money in VC, which is invest in the top brand-name VC firms,” Mead said. “We are trying to change that perception.”
Snowflake went public this week, and in a mark of the wider ecosystem that is evolving around data warehousing, a startup that has built a completely new concept for modelling warehoused data is announcing funding. Narrator — which uses an 11-column ordering model rather than standard star schema to organise data for modelling and analysis — has picked up a Series A round of $6.2 million, money that it plans to use to help it launch and build up users for a self-serve version of its product.
The funding is being led by Initialized Capital along with continued investment from Flybridge Capital Partners and Y Combinator — where the startup was in a 2019 cohort — as well as new investors including Paul Buchheit.
Narrative has been around for three years, but its first phase was based around providing modelling and analytics directly to companies as a consultancy, helping companies bring together disparate, structured data sources from marketing, CRM, support desks and internal databases to work as a unified whole. As consultants, using an earlier build of the tool that it’s now launching, the company’s CEO Ahmed Elsamadisi said he and others each juggled queries “for eight big companies singlehandedly,” while deep-dive analyses were done by another single person.
Having validated that it works, the new self-serve version aims to give data scientists and analysts a simplified way of ordering data so that queries, described as actionable analyses in a story-like format — or “Narratives“, as the company calls them — can be made across that data quickly — hours rather than weeks — and consistently. (You can see a demo of how it works below provided by the company’s head of data, Brittany Davis.)
(And the new data-as-a-service is also priced in SaaS tiers, with a free tier for the first 5 million rows of data, and a sliding scale of pricing after that based on data rows, user numbers, and Narratives in use.)
Elsamadisi, who co-founded the startup with Matt Star, Cedric Dussud, and Michael Nason, said that data analysts have long lived with the problems with star schema modelling (and by extension the related format of snowflake schema), which can be summed up as “layers of dependencies, lack of source of truth, numbers not matching, and endless maintenance” he said.
“At its core, when you have lots of tables built from lots of complex SQL, you end up with a growing house of cards requiring the need to constantly hire more people to help make sure it doesn’t collapse.”
It was while he was working as lead data scientist at WeWork — yes, he told me, maybe it wasn’t actually a tech company but it had “tech at its core” — that he had a breakthrough moment of realising how to restructure data to get around these issues.
Before that, things were tough on the data front. WeWork had 700 tables that his team was managing using a star schema approach, covering 85 systems and 13,000 objects. Data would include information on acquiring buildings, to the flows of customers through those buildings, how things would change and customers might churn, with marketing and activity on social networks, and so on, growing in line with the company’s own rapidly scaling empire. All of that meant a mess at the data end.
“Data analysts wouldn’t be able to do their jobs,” he said. “It turns out we could barely even answer basic questions about sales numbers. Nothing matched up, and everything took too long.”
The team had 45 people on it, but even so it ended up having to implement a hierarchy for answering questions, as there were so many and not enough time to dig through and answer them all. “And we had every data tool there was,” he added. “My team hated everything they did.”
The single-table column model that Narrator uses, he said, “had been theorised” in the past but hadn’t been figured out.
The spark, he said, was to think of data structured in the same way the we ask questions, where — as he described it — each piece of data can be bridged together and then also used to answer multiple questions.
“The main difference is we’re using a time-series table to replace all your data modelling,” Elsamadisi explained. “This is not a new idea, but it was always considered impossible. In short, we tackle the same problem as most data companies to make it easier to get the data you want but we are the only company that solves it by innovating on the lowest-level data modelling approach. Honestly, that is why our solution works so well. We rebuilt the foundation of data instead of trying to make a faulty foundation better.”
Narrator calls the composite table, which includes all of your data reformatted to fit in its 11-column structure, the Activity Stream.
Elsamadisi said using Narrator for the first time takes about 30 minutes, and about a month to learn to use it thoroughly. “But you’re not going back to SQL after that, it’s so much faster,” he added.
Narrator’s initial market has been providing services to other tech companies, and specifically startups, but the plan is to open it up to a much wider set of verticals. And in a move that might help with that, longer term, it also plans to open source some of its core components so that third parties can data products on top of the framework more quickly.
As for competitors, he says that it’s essentially the tools that he and other data scientists have always used, although “we’re going against a ‘best practice’ approach (star schema), not a company.” Airflow, DBT, Looker’s LookML, Chartio’s Visual SQL, Tableau Prep are all ways to create and enable the use of a traditional star schema, he added. “We’re similar to these companies — trying to make it as easy and efficient as possible to generate the tables you need for BI, reporting, and analysis — but those companies are limited by the traditional star schema approach.”
So far the proof has been in the data. Narrator says that companies average around 20 transformations (the unit used to answer questions) compared to hundreds in a star schema, and that those transformations average 22 lines compared to 1000+ lines in traditional modelling. For those that learn how to use it, the average time for generating a report or running some analysis is four minutes, compared to weeks in traditional data modelling.
“Narrator has the potential to set a new standard in data,” said Jen Wolf, Initialized Capital COO and partner and new Narrator board member, in a statement. “We were amazed to see the quality and speed with which Narrator delivered analyses using their product. We’re confident once the world experiences Narrator this will be how data analysis is taught moving forward.”
Truepill, the white-label healthcare services company that provides telehealth and pharmacy fulfillment services, is adding at-home medical testing as the third branch of its services powering the offerings of companies like Hims and Hers, Nurx, GoodRx, and Ro (a former customer).
Financing this expansion of services is a new $75 million round of financing from investors led by Oak HC/FT, with participation from Optum Ventures, TI Platform Management, Sound Ventures and Y Combinator.
“With the change in reimbursement for telemedicine, it changed the trajectory of the direct to consumer companies,” said Annie Lamot, the co-founder and managing director of new lead investors Oak HC/FT. “When we talked to every one of them they all seemed to be using Truepill .”
With its expansion into lab testing, Truepill can provide a full suite of services that used to be confined to the doctor’s office remotely. As more patients adjust to remote delivery of care, these kinds of options will become more attractive.
The move to telemedicine isn’t just something for new entrants either. Incumbents are also finding that they need to provide the same care as their direct to consumer competition, especially as the priority shifts to value-based care rather than fees for services on the reimbursement side — and consumers start demanding lower cost options on the direct pay side.
“I think it enables health plans to provide better care in targeted programs,” said Lamont, a longtime investor in healthcare.
Truepill’s executives certainly hope so.
The two co-founders, Umar Afridi and Sid Viswanathan met over LinkedIn where Viswanathan cold-emailed Afridi. At the time, Afridi was working as a pharmacist filling prescriptions at a Fred Meyer near Seattle).
Initially, Truepill’s growth came from acting as the pharmacist to companies like Hims, Nurx, and other direct-to-consumer healthcare companies focused on serving the elective health needs of people who wanted hair loss treatments, erectile dysfunction medication, and birth control.
Image Credits: Truepill
As the company has grown, so have its ambitions. By the end of the year, Truepill expects to book up to $200 million in revenue, according to Viswanathan, and that revenue will come from a more evenly distributed mix of customers among direct to consumer companies, insurance companies, and healthcare providers.
“Everything we do is white labeled from our pharmacy to the lab testing component. You can go to teladoc and use that service. What we like to think early. 80 percent of healthcare is going to happen on a digital channel.. We’re in a perfect position to build the platform company in that space,” Viswanathan said.
At-home testing is a critical component of that platform. Expected to launch before the end of the year, Truepill is working with lab testing providers to offer hundreds of at-home tests. The company said it will focus on tests to manage chronic conditions like diabetes, heart disease, chronic kidney disease. Incidentally these are areas which have attracted a lot of interest from investors who are backing companies that provide direct to consumer or digital therapeutic solutions to treat or help address these conditions.
“To create a comprehensive, effective digital healthcare experience, there are three essential pillars: pharmacy with extensive insurance coverage, at-home lab testing and telehealth,” said Viswanathan, in a statement. “By adding diagnostics to our suite of solutions, we’ll be able to deliver direct-to-patient healthcare at scale through one platform – Truepill. We envision a future where 80% of healthcare is digital. With diagnostics, telehealth and pharmacy built on our foundation of API-connected infrastructure, Truepill will power that reality.”
*This story has been updated to indicate that Ro was a customer of Truepill, but no longer works with the service and that the company expects to reach $200 million in revenue not $175 million as the company’s President indicated in an interview.