Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Stripe’s grand plans. Before that, I noted Peloton’s secret weapons.
The best companies are built by people who have personally experienced the problem they’re attempting to solve. Lauren Jonas, the founder and chief executive officer of Part & Parcel, is intimately familiar with the struggles faced by the women she’s building for.
San Francisco-based Part & Parcel is a plus-sized clothing and shoe startup providing dimensional sizing to women across the U.S. The company operates a bit differently than your standard direct-to-consumer business by seeking to include the women who wear and evangelize the Part & Parcel designs by giving them a cut of their sales.
Here’s how it works: Ambassadors sign up to receive signature styles from Part & Parcel, which they then share and sell to women in their network. Ultimately, the sellers are eligible to receive up to 30% of the profit per sale. The out-of-the-box model, which might remind you somewhat of Mary Kay or Tupperware’s business strategy, is meant to encourage a sense of community and usher in a new era in which plus-sized women can facilitate other plus-sized women’s access to great clothes.
“I bought a brown men’s polyester suit and wore it to an interview,” Jonas, an early employee at Poshmark and the long-time author of the popular blog, ‘The Pear Shape,’ tells TechCrunch. “I was that kid wearing a men’s suit.”
Clothing tailored to plus-sized women has long been missing from the retail market. Increasingly, however, new brands are building thriving businesses by catering precisely to the historically forgotten demographic. Dia&Co., for example, raised another $70 million in venture capital funding last fall from Sequoia and USV. And Walmart recently acquired another brand in the space, ELOQUII, for an undisclosed amount. Part & Parcel, for its part, has raised $4 million in seed funding in a round led by Lightspeed Venture Partners’ Jeremy Liew.
The startup launched earlier this year in Anchorage, “a clothing desert,” and has since grown its network to include women in several other underserved markets. Given her own history struggling to find a fitted woman’s suit, Jonas launched her line with structured pieces, including suits and blouses — though the startup’s biggest success yet, she says, has been its boots, which come in three different calf width options.
“Seventy percent of women in this country are plus-sized,” Jonas said. “I’m bringing plus out of the dark corner of the department store.”
Image: Bryce Durbin / TechCrunch
TechCrunch’s Megan Rose Dickey published a highly anticipated deep dive on the state of sex tech this week. The piece provides new data on funding in sex tech and wellness companies, analysis on sex tech startup’s battle for public advertising and responses from industry leaders on how we can destigmatize sex with technology. Here’s a short passage from the story:
Cindy Gallop sees a market opportunity in every type of business obstacle she encounters. That’s why All The Sky will also seek to invest in startups that tackle the infrastructural tools needed to fuel sextech, like payments, hosting providers and e-commerce sites.
“I want to fund the sextech ecosystem to maintain and sustain a portfolio for All the Skies, to create a bloody huge sextech ecosystem and three, to monopolistically build out the ecosystem to be a multi-trillion-dollar market,” Gallop says.
I swung by Contrary Capital‘s Demo Day this week, in which a number of startups gave a 4- to 5-minute pitch. Next on my list is Alchemist‘s Demo Day in Menlo Park. The accelerator welcomes enterprise startups for a six-month program focused on early customer adoption, company development and mentorship.
Also on my radar is Females To The Front. The event began this week in Palm Springs and if I were based in SoCal, I would have swung by. Led by Amy Margolis, the event is said to be the largest gathering of female cannabis founders and funders to date. Here’s how the group describes the event: “Females to the Front Retreat will mix immersive and hands-on workshops, pitch training, investment deck preparation and business skill set education with investor meetings and plenty of shared meals, pool time, yoga, connections, rest and rejuvenation. Every workshop is built to directly engage attendees instead of powerpoint and panels. Be prepared to return home inspired, engaged and with so many more tools in your toolbox.”
For the record, I don’t advertise events in my newsletter just wanted to give props to this one because it’s a great development for the cannabis tech ecosystem.
We are just weeks away from our flagship conference, TechCrunch Disrupt San Francisco. We have dozens of amazing speakers lined up. In addition to taking in the great line-up of speakers, ticket holders can roam around Startup Alley to catch the more than 1,000 companies showcasing their products and technologies. And, of course, you’ll get the opportunity to watch the Startup Battlefield competition live. Past competitors include Dropbox, Cloudflare and Mint… You never know which future unicorn will compete next.
This week, the lovely Alex Wilhelm, editor-in-chief of Crunchbase News, and I gathered to discuss a number of topics including WeWork’s IPO and Uber’s attempts to bypass a new law meant to protect gig workers. Listen here.
Y Combinator has become its own economy since its founding in 2005, as the formative seed-stage venture fund has nurtured leading startups across industries. Today, you’ll often see newer YC startups get started by providing services to larger YC companies — and then become the larger companies themselves (Stripe and Gusto are two of the most widely known examples, to date).
With its second Demo Day of the year wrapped up last month, the firm has also launched its largest group of startups ever in 2019.
CEO Michael Seibel will be joining us onstage at Disrupt SF this year, along with Ali Rowghani, the CEO of its Continuity growth fund, to give us a closer look at what’s going on. They’ll be announcing the second-annual list of the top 100 YC companies as part of this, and tell me that while most people can predict Dropbox and Airbnb showing up, many of the other names are going to be surprising.
We’ll be asking them about what it takes to get in to YC in the first place these days, and what it takes to build a company that can make a list like this. Seibel and Rowghani will also be available for an extra-long question-and-answer portion of the talk with attendees as a part of our Extra Crunch-themed stage at the conference.
While the full details of the list will be unveiled on October 2nd, they note that the ranking will be based on valuation, like last year’s: “Why valuation? We have long said that valuation is a poor way to measure a company’s value in the short term. That said, it’s the most commonly available metric to compare companies in the startup world. Other metrics, like revenue, are more often kept private. It’s worth noting that we have a number of very impressive companies who would have made the top 100 list if it were sorted by revenue, token value, rev/employee ratio, or other methods of measuring value. This list does not represent these successes.” They add that it will show the number of jobs each company has created, and the industry sector that it is a part of.
To date, YC says it has backed more than 4,000 founders, who have created more than 2,000 companies that together are worth more than $100 billion. Among the top 100 companies who made the list last year, it says 93 were valued at more than $100 million and had between them created more than 28,000 jobs.
Disrupt SF runs October 2 to October 4 at the Moscone Center in San Francisco. Tickets are available here.
*Disclosure: I went through YC myself (w07) but have no financial relationship with it today, cap table or otherwise.
The company was amongst an exclusive subset of startups in YC’s winter 2019 batch to walk into demo day term sheet in hand. Top VCs, like Accel and Sequoia Capital, couldn’t wait until the team’s public pitch was complete to seed the company.
Middesk performs background checks, but not of people; rather, the startup helps companies identify business and regulatory risk in their customer base. Today, it’s announcing its first round of capital, a $4 million financing led by Accel’s Rich Wong, with participation from Sequoia. Founded by two early employees of another YC graduate, Checkr, which automates the pre-employment background check process for companies, Middesk chief executive officer Kyle Mack and chief technology officer Kurt Ruppel wanted to apply their learnings to a business identity product.
“What we’ve built from the ground up is a product to help companies understand who their customers are and what those customers do for their business,” Mack explains.
Selling a product in a traditional and heavily regulated industry, Mack says having top-tier, established venture funds Accel and Sequoia on board has made a big difference for the company. This is particularly interesting, given the round comes at a time in which competition for early-stage deals is greater than ever. More and more billion-dollar funds, Accel and Sequoia included, are moving downstream to purchase stakes in promising companies as early as possible, beating out seed funds by providing better terms and brand recognition.
Accel was also an early investor in Checkr, which most recently raised a $100 million Series C at a $900 million valuation, and was familiar with the Middesk team prior to the company’s formation: “One of the nice things about this job is if you have a chance to do it right, you can build relationships with people and work with them across multiple companies,” Accel’s Wong tells TechCrunch.
San Francisco-based Middesk is working with customers, including Checkr and Plaid, a well-financed leader in fintech, as well as smaller entrants to the B2B market, like the even more recent YC-grad Vouch, which sells business insurance to startups. Mack says they are particularly focused on payments, lending, payroll, expenses and credit businesses, or those with regulatory risk requirements.
“Effectively anyone that’s touching money that’s a B2B business has regulatory requirements to do what we do,” Mack said. “There is a whole new wave of companies applying consumer-style experiences to business products, but the risks they deal with, they aren’t designed to manage those risks at scale.”
With the infusion of capital, Middesk has grown its team from two to seven, creating engineering and operations teams in the process. In the long term, Mack cites Plaid and its proven ability to rapidly become the go-to tool for connecting applications to consumer bank accounts, as inspiration.
“We talk about this idea of becoming a single source for all the external signals you might want to have about a business,” he said. “Plaid has built a single place to get a host of transaction data of people and businesses. We think about Middesk as a single place to find high-quality and trusted information for a single business.”
Relativity Space, the startup developing manufacturing technologies for entirely 3D printed rockets and space equipment, has signed its latest paying customer, the orbital transportation startup, Momentus.
Relativity’s Terran 1 rocket will carry Momentus’ small and medium-sized satellite payloads on its rocket and Momentus will then move those satellites into geosynchronous orbit using its own in-space shuttle technology.
The deal between Momentus and Relativity covers the first Terran 1 launch scheduled for 2021, with the option for five additional Relativity launches, according to a statement from the company.
Carrying Momentus’ payloads enables the company to include more diverse ranges of orbits for Terran 1’s initial launch, including geostationary transfer orbit, Lunar and deep space orbits, lower inclinations and phasing multiple spacecraft in low Earth orbit, the company said.
The tie-up links two of Y Combinator’s space-focused alumni, with Momentus graduating in 2018 and Relativity launching from the accelerator in 2016.
In July, Momentus closed on a $25 million round of funding to move its business from simply providing a thruster for existing small-sats to becoming a full-service provider of orbital transportation services for payloads. The company’s key innovation was the development of a water-based plasma propulsion system for low-cost transportation in space. That’s what powers the company’s Vigoride orbital shuttle.
Meanwhile, Relativity Space is barreling ahead with its own technology development.
With the goal of building a rocket that goes from raw materials to launch-ready in less than 60 days with a payload capacity of up to 1250 kilograms, the company is planning its first test launch in 2020 with a commercial payload ready for 2021.
So far the company has performed 200 engine tests to date across 14 different serial numbers and begun conducting turbo pump testing as well. Testing has also begun on the company’s initial avionics hardware, according to company co-founder Tim Ellis.
Relativity has also started printing and stress testing some second stage structures and is beginning to print its larger primary stage structures now.
“With Momentus’ innovations in sustainable in-space ‘last mile’ solutions, we look forward to working together to expand Terran 1’s flexibility and offering beyond LEO, offering small and medium satellite launch opportunities with industry-defining lead time, flexibility, and cost,” Ellis said in a statement. “This partnership will enable us to build the space economy faster, and accelerate the future of humanity in space.”
The company has dramatically expanded its production, testing and launch facilities to include 280,000 square feet of operations on facilities at Cape Canaveral in Florida and the NASA Stennis Space Center in Mississippi.
Relativity also has customer agreements with Telesat, to support their low Earth orbit constellation; the Thai satellite and space technology company, mu Space; and Spaceflight Industries to launch their smallsat ride-shares.
Brianne Kimmel had no trouble transitioning from angel investor to general partner.
Initially setting out to garner $3 million in capital commitments, Kimmel, in just two weeks’ time, closed on $5 million for her debut venture capital fund Work Life Ventures. The enterprise SaaS-focused vehicle boasts an impressive roster of limited partners, too, including the likes of Zoom chief executive officer Eric Yuan, InVision CEO Clark Valberg, Twitch co-founder Kevin Lin, Cameo CEO Steven Galanis, Andreessen Horowitz general partners’ Marc Andreessen and Chris Dixon, Initialized Capital GP Garry Tan and fund-of-funds Slow Ventures, Felicis Ventures and NFX.
At the helm of the new fund, Kimmel joins a small group of solo female general partners. Dream Machine’s Alexia Bonatsos is targeting $25 million for her first fund. Day One Ventures’ Masha Drokova raised an undisclosed amount for her debut effort last year. Sarah Cone launched Social Impact Capital, a fund specializing in impact investing, in 2016, among others.
Meanwhile, venture capital fundraising is poised to reach all-time highs in 2019. In the first half of the year, a total of $20.6 billion in new capital was introduced to the startup market across more than 100 funds.
For most, the process of raising a successful venture fund can be daunting and difficult. For well-connected and established investors in the Bay Area, like Kimmel, raising a fund can be relatively seamless. Given the speed and ease of fund one in Kimmel’s case, she plans to raise her second fund with a $25 million target in as little as 12 months.
“The desire for the fund is to take a step back and imagine how do we build great consumer experiences in the workplace,” Kimmel tells TechCrunch.
Kimmel has been an active angel investor for years, sourcing top enterprise deals via SaaS School, an invite-only workshop she created to educate early-stage SaaS founders on SaaS growth, monetization, sales and customer success. Prior to launching SaaS School, which will continue to run twice a year, Kimmel led go-to-market strategy at Zendesk, where she built the Zendesk for Startups program.
“You start by advising, then you start with very small angel checks,” Kimmel explains. “I reached this inflection point and it felt like a great moment to raise my own fund. I had friends like Ryan Hoover, who started Weekend Fund focused on consumer, and Alexia is one of my friends as well and I saw what she was doing with Dream Machine, which is also consumer. It felt like it was the right time to come out with a SaaS-focused fund.”
Emerging from stealth today, Work Life Ventures will invest up to $150,000 per company. To date, Kimmel has backed three companies with capital from the fund: Tandem, Dover and Command E. The first, Tandem, was amongst the most coveted deals in Y Combinator’s latest batch of companies. The startup graduated from the accelerator with millions from Andreessen Horowitz at a valuation north of $30 million.
Dover, another recent YC alum, provides recruitment software and is said to be backed by Founders Fund in addition to Work Life. Command E, currently in beta, is a tool that facilities search across multiple desktop applications. Kimmel is also an angel investor in Webflow, Girlboss, TechCrunch Disrupt 2018 Startup Battlefield winner Forethought, Voyage and others.
Work Life is betting on the consumerization of the enterprise, or the idea that the next best companies for modern workers will be consumer-friendly tools. In her pitch deck to LPs, she cites the success of Superhuman and Notion, a well-designed email tool and a note-taking app, respectively, as examples of the heightened demand for digestible, easy-to-use B2B products.
“The next generation of applications for the workplace sees people spinning out of Uber, Coinbase and Airbnb,” Kimmel said. “They’ve faced these challenges inside their highly efficient tech company so we are seeing more consumer product builders deeply passionate about the enterprise space.”
But Kimmel doesn’t want to bury her thesis in jargon, she says, so you won’t find any B2B lingo on Work Life’s website or Instagram.
She’s focusing her efforts on a more important issue often vacant from conversations surrounding investment in the future of work: diversity & inclusion.
Kimmel meets with every new female hire of her portfolio companies. Though it’s “increasingly non-scalable,” she admits, it’s part of a greater effort to ensure her companies are thoughtful about D&I from the beginning: “Because I have a very focused fund, it’s about maintaining this community and ensuring that people feel like their voices are heard,” she said.
“I want to be mindful that I am a female GP and I feel honored to have that title.”
As cities in emerging markets grapple with increasingly traffic-clogged and dangerous streets, Urbvan, a startup providing private, high-end transportation shuttles in Mexico, has raised $9 million in a new round of financing.
Hailing from Portugal, Albino arrived in Mexico City as a hire for the Rocket Internet startup Linio. Although Linio didn’t last, Albino stayed in Mexico, eventually landing a job working for the startup Mercadoni, which is where he met Picard.
The two men saw the initial success of Chariot as it launched from Y Combinator, but were also tracking companies like the Indian startup Shuttl.
“We wanted to make shared mobility more accessible and a little bit more efficient,” says Albino. “We studied the economics and we studied the market and we knew there was a huge urgency in the congested cities of Latin America.”
Unlike the U.S. — and especially major cities like San Francisco and New York — where public transportation is viewed as relatively safe and efficient, the urban environment of Mexico City is seen as not safe by the white-collar workers that comprise Urbvan’s principal clientele.
The company started operating back in 2016. At the time it had five vans that it leased and retrofitted to include amenities like Wi-Fi and plenty of space for a limited number of passengers. The company has expanded significantly since those early days. It now claims more than 15,000 monthly users and a fleet of 180 vans.
Urbvan optimized for safety as well as comfort, according to Albino. The company has deals with WeWork, Walmart and other retailers in Mexico City, so that all the stops on a route are protected and safe. The company also vets its drivers and provides them with additional training because of the expanded capacity of the vans.
Each van is also equipped with a panic button and cameras inside and out for additional monitoring.
Customers either pay $3 per ticket or sign up for a monthly pass that ranges from $100 to $130.
Financing for the company came from Kaszek Ventures and Angel Ventures, with previous investor Mountain Nazca also participating.
For Albino, who went to India to observe Shuttl’s operations, the global market for these kinds of services is so large that there will be many winners in each geography.
“Each city is different and you need to adapt. The technology needs to be adaptable to the city’s concerns, and where it can, add more value,” says Albino. “The Indian market is super different from Latin America… It’s a huge market with a lot of congestion… But the value proposition is a bit more basic [for Shuttl].”
Urbvan is currently operating in Mexico City and Monterrey, but has plans to expand into Guadalajara later this year.
The Slovenian founders behind PredictLeads, another recent Y Combinator graduate, applied to the prestigious accelerator five times before they were admitted.
Their business, which helps venture capital firms and sales teams identify high growth companies, i.e. potential investments and potential customers, had come a long way since it was founded in 2016. And earlier this year — finally — YC gave them the green light to complete its three-month accelerator program.
“We almost ran out of money in 2017 and then I took a loan from my mother because that bank wouldn’t give me the loan at that point,” PredictLeads chief executive officer Roq Xever tells TechCrunch. “But by then, the data was getting much better and we were able to make higher-value sells and that got us to profitability.”
You read that right. Unlike most of today’s tech startups, PredictLeads is profitable, though, only out of pure necessity: “We didn’t know we would ever get into YC to raise the money we needed, so we structured the company to make more money than we spent.”
Xever leads the small PredictLeads team alongside marketing chief Miha Stanovnik and chief technology officer Matic Perovsek. Xever tells TechCrunch it wasn’t until they realized the opportunity to sell their product to VCs that YC became interested. Today, PredictLeads has eight venture firms as customers, the names of which they were not able to disclose.
The tool helps investors track companies they’ve considered in the past. PredictLeads notifies users if certain companies start getting traction so they can reevaluate the deal and helps investors become aware of startups they may not have otherwise heard of.
More and more venture capital firms are turning to third-party tools to help them make sense of and leverage data in the investment and company-tracking process, leading to the birth of new data-focused companies. Social Capital co-founder Chamath Palihapitiya is spinning out a company from his venture capital fund-turned-family-office, TechCrunch learned earlier this year. The new entity, temporarily dubbed CaaS (short for capital-as-a-service) Technologies, will focus on providing data-driven insights to VC firms, for example.
Startups have also realized the importance of data. Narrator, another recent YC graduate, is betting big on this trend. The startup wants to become the operating system for data science by providing companies software that claims to fulfill the same service as a data team for the price of an analyst.
PredictLeads, for its part, collects data from websites, press releases, news articles, blogs and career sites, then uses supervised machine learning to extract and structure the data. The startup tracks 20 million public and private companies.
Now that it’s a graduate of YC, the team is in the process of moving its headquarters to the U.S. Either New York or San Francisco, says Xever, who’s currently navigating the difficult visa application process.
The startup is today raising a $1.5 million seed financing at a $10 million valuation. They plan to use the capital to expand their service to cater to quant funds, build a Salesforce app to better support sales teams, and, of course, expand their small team.
Y Combinator-backed startup Astranis is now set to launch its first commercial telecommunication satellite aboard a Falcon 9 rocket, with a launch timeframe currently set for sometime starting in the fourth quarter of next year. Astranis aims to address the market of people who don’t currently have broadband internet access, which is still a huge number globally, and they hope to do so using low-cost satellites that massively undercut the price of existing global telecommunications hardware, which can be built and launched much faster than existing spacecraft, too.
Astranis satellites are much more cost efficient because they’re smaller and easier to make, which changes the economics of deployment for potential carrier and connectivity provider partners. Its approach has already attracted the partnership of Microcom subsidiary Pacific Dataport, an Anchorage company that was formed to expand satellite broadband access in Alaska. This will be the goal of the company’s first launch with SpaceX, to deliver a single satellite to geostationary orbit that will add more than 7.5 Gbps of capacity to the internet provider’s network in Alaska, tripling capacity and potentially reducing costs by “up to three times,” according to Astranis.
This isn’t the first ever satellite that Astranis has sent up to space – it launched a demonstration satellite in 2018 to show that its tech could work as advertised. Astranis’ approach is distinct from others attempting to offer satellite-based connectivity, including SpaceX’s own Starlink project, because it focuses on building satellites that remain in a fixed orbital position relative to the area on the ground where they’re providing service, as opposed to using a large constellation of low-Earth orbit satellites that offer coverage because one or more are bound to be over the coverage area at any given time as they orbit the Earth, handing off connections from one to the next.
Hey. This is Week-in-Review, where I give a heavy amount of analysis and/or rambling thoughts on one story while scouring the rest of the hundreds of stories that emerged on TechCrunch this week to surface my favorites for your reading pleasure.
Last week, I talked about Snap’s bizarre decision to keep pursuing hardware without really changing their overarching strategy.
Google isn’t so sweet these days.
The company’s beloved naming scheme of alphabetizing sugary things dies with Android Pie. The company announced this week that they’re dumping the dessert scheme for a much more boring option. The new Android will be Android 10.
Google has been one of those companies that has always liked to keep its quirkiness at the forefront of its brand. Multi-colored logos and bikes and hats with spinners and Nooglers and nap pods might have been the fringe elements of a Google employee’s first week on the job, but that’s what the company’s branding still evoked for a lot of people. The company’s more whimsical elements have realistically always been removed from the real world of its business interests, but at this point, the company may only be able to take away from the quirkiness of its brand, Google is just something different now.
Rebrands always grab attention, and the companies always make broad, sweeping statements about the deep meaning about what the new logo or font or name mean to the mission of the product at hand. With Android 10, Google says that their chief concern was promoting the universality of the operating system’s branding.
[W]e’ve heard feedback over the years that the names weren’t always understood by everyone in the global community. For example, L and R are not distinguishable when spoken in some languages.
So when some people heard us say Android Lollipop out loud, it wasn’t intuitively clear that it referred to the version after KitKat. It’s even harder for new Android users, who are unfamiliar with the naming convention, to understand if their phone is running the latest version. We also know that pies are not a dessert in some places, and that marshmallows, while delicious, are not a popular treat in many parts of the world.
There’s certainly room to question whether this decision has more to do with the fact that there aren’t too many desserts starting with the letter Q that immediately come to mind, or that Google marketing has decided to sanitize the Android brand with a corporate wash.
On to the rest of the week’s news.
Here are a few big news items from big companies, with green links to all the sweet, sweet added context:
Photo By Bill Clark/CQ Roll Call
How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:
Our premium subscription service had another week of interesting deep dives. My colleagues and I made our way to Y Combinator Demo Days this week where we screened the 160+ startups pitching and picked some favorites from both days..
“Eighty-four startups presented (read the full run-through of every company plus some early analysis here) and after chatting with investors, batch founders and of course, debating amongst ourselves, we’ve nailed down the 11 most promising startups to present during Day 1…”
“After two days of founders tirelessly pitching, we’ve reached the end of YC’s Summer 2019 Demo Days. TechCrunch witnessed more than 160 on-the-record startup pitches coming out of Y Combinator, spanning healthcare, B2B services, augmented reality and life-extending. Here are our favorites from Day 2…”
Here are some of our other top reads this week for premium subscribers. This week, we published a some analysis on the latest YC class and also dug deep into the perks new employees get at some top companies.
Sign up for more newsletters in your inbox (including this one) here.
Due to bad travel logistics (thanks SFO), I wasn’t able to get the mid-week edition of the Extra Crunch roundup newsletter out. Sorry about that. Instead, here is everything we published this week on Extra Crunch in one fell swoop — and my, we covered a lot of ground. Hope you enjoy some great weekend reading.
Much like the equinoxes that synchronize Earth’s calendar, Y Combinator’s biannual demo days are a key fixture of the Silicon Valley calendar. This year was no different, with 166 companies presenting from the summer batch (and occasionally from previous batches if they chose to delay their presentation).
We had a full squad on site not only covering the 84 companies from day one and 82 companies from day two, but our team also put their collective heads together to identify the top companies from each set exclusively for Extra Crunch members.
Read our favorite 11 startups from day one, which included:
PopSQL provides collaborative SQL query editing. You can store SQL queries you run regularly, grouping them into folders that can be kept private or shared amongst your team. Version history tracks changes so it can be reverted if/when something breaks. It currently has more than 100 paying companies, and is making $13K per month. It plans to build a marketplace for apps that run on top of your company’s database.
Why it’s one of our favorites: SQL database queries can be a nightmare, especially if they’re not something you’re used to dealing with every day. PopSQL lets you hammer on queries collaboratively until they’re working exactly as you want — then you can save them for future use and share them amongst your team members. And when you’ve spent the last 45 minutes trying to figure out why your query isn’t working only for a team mate to fix it in thirty seconds, you can use version control to see exactly what they changed. PopSQL says its product has already found customers in companies like Instacart, Redfin, and DoorDash.
Read our favorite 12 startups from day two, which included:
Business Score is helping companies automate background checks on other businesses. The startup is looking to stamp out tired manual processes that largely mean picking up the phone and scouring documents. The single API taps data sources across the web to build out real-time profiles that can help customers scan businesses in an effort to prevent fraud, qualify leads and onboard new clients.
Why it’s one of our favorites: Though it’s yet another startup in the batch catering to other startups, we thought Business Score stood out. The company integrates with thousands of data providers to help companies verify other startups and enterprises they are considering doing business with, using a system they’ve dubbed “the business passport.” There’s an opportunity here to create a tool essential to company-building across industry.
Finally, amidst all the zany craziness of watching 166 companies present over two days (there should be a YC company for unmelting your brain), our venture capital reporter Kate Clark stepped back to assess what all the various companies in the batch indicated about the accelerator’s strategy these days.
YC knows its sweet spot: enterprise SaaS. One might go as far as to say it’s transitioning into a full-on SaaS incubator. Why? Because one of the greatest advantages of going through YC is the network of alumni companies you can tap into. Many successful B2B companies have emerged from the program, raised boat loads of venture capital funding and rocketed to the moon (hello Stripe, Brex, Gusto and Atrium). With that in mind, YC is doubling down on its resources for startups that sell products to other startups, which brings us to our first piece of news.
YC chief executive officer Michael Seibel and president Geoff Ralston announced this week that the accelerator has implemented something called CTO and HR demo days. In short, CTO and HR demo days are an opportunity for B2B startups to pitch their products to YC alum companies’ CTO and/or head of HR. Seibel and Ralston said 60 CTOs attended the event, as well as 30 HR heads. In total, 42 startups presented and we’re guessing a bunch of those companies booked a few customers.
Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about the flurry of IPO filings. Before that, I noted the differences between raising cash from angels vs. traditional venture capitalists.
Venture capitalists look for companies poised to disrupt markets untouched by innovative technology. Believe it or not, a very small percentage of jewelry shopping is done online, which means there’s a big opportunity — for the right team — to bring jewelry buyers and sellers to the 21st century.
Enter Pietra, a new startup that’s just raised $4 million in a round led by Andreessen Horowitz’s Andrew Chen (Substack & Hipcamp investor). Robert Downey Jr.’s VC fund Downey Ventures and Will Smith’s fund Dreamers Fund also participated, as did Hollywood manager Scooter Braun, Michael Ovitz and supermodel Joan Smalls.
I spoke to the founding team, which includes Uber alum Ronak Trivedi and Ashley Bryan, who hails from fashion e-commerce site Moda Operandi. The pair bring a healthy mix of technology and fashion expertise to the mix. Trivedi tells TechCrunch he’s drawn on his Uber experience to recruit engineers from top tech companies and to advocate for fast growth. Meanwhile, Bryan has leveraged her fashion industry connections to establish relationships with luxury designers.
“Fashion is typically really under-resourced in terms of tech,” Bryan tells TechCrunch. “[The fashion industry] is great at the creativity part but it’s tough, especially with jewelry because you really have to put up a lot of capital.”
Pietra’s plan is to create a high-end marketplace for consumers to connect with jewelry designers. To do this, the team has adopted the standard marketplace approach, taking a 30% marketplace fee from sellers, as well as a 7% fee from buyers commissioning jewelry on the platform.
“Whether you do custom jewelry or engagement jewelry or you do jewelry for celebrities like Drake, you can come on Pietra and connect with a global marketplace,” says Trivedi.
The jewelry market is expected to be worth more than $250 billion by 2020, according to McKinsey research. And where there’s a billion-dollar market, there are VCs.
“Even though gemstones and jewelry have been at the center of art, commerce, and culture since the dawn of human civilization — going from stone jewelry created 40,000 years ago in Africa to the trade routes between East and West to Fifth Avenue in New York to the Instagram feed on your phone — the technology for discovering, designing, and purchasing jewelry online hasn’t evolved much at all,” writes a16z’s Chen, who overlapped with Trivedi during his Uber tenure.
Pietra completed its official launch this week. It has 100 designers on the platform and counting, along with what the founders say is a lengthy waitlist.
This week I published a long feature on the state of seed investing in the Bay Area. The TL;DR? Mega-funds are increasingly battling seed-stage investors for access to the hottest companies. As a result, seed investors are getting a little more creative about how they source deals. It’s a dog-eat-dog world out there and everyone wants a stake in The Next Big Thing. Read the story here.
Y Combinator graduated another batch of 200 companies this week. We were there both days, taking notes on each and every company. To make things easy on you, I’ve put together the ultimate YC reading list:
Here’s a look at some of the profiles we’ve written on the S19 companies:
We recorded two great episodes of Equity, TechCrunch’s venture capital podcast, this week. The first was with YC CEO Michael Seibel, in which he speaks to trends at the seed stage of investing, changes at the accelerator program, including its move to San Francisco and more. You can listen to that one here. Plus, we had on Unusual Ventures co-founder and partner John Vrionis, who talked to us about direct listings versus IPOs and the future of DoorDash and Airbnb. You can listen to that one here.
Contributors Tyler Elliston and Kevin Barry share advice for B2B companies: “Over the years, we’ve seen a lot of B2B companies apply ineffective demand generation strategies to their startup. If you’re a B2B founder trying to grow your business, this guide is for you. Rule #1: B2B is not B2C. We are often dealing with considered purchases, multiple stakeholders, long decision cycles, and massive LTVs. These unique attributes matter when developing a growth strategy. We’ll share B2B best practices we’ve employed while working with awesome B2B companies like Zenefits, Crunchbase, Segment, OnDeck, Yelp, Kabbage, Farmers Business Network, and many more.” Read the full story here. (Extra Crunch membership required.)
As the technologies that were once considered science fiction become the purview of science, the venture capital firms that were once investing at the industry’s fringes are now finding themselves at the heart of the technology industry.
Investing in the commercialization of technologies like genetic engineering, quantum computing, digital avatars, augmented reality, new human-computer interfaces, machine learning, autonomous vehicles, robots, and space travel that were once considered “frontier” investments are now front-and-center priorities for many venture capital firms and the limited partners that back them.
Earlier this month, Lux Capital raised $1.1 billion across two funds that invest in just these kinds of companies. “[Limited partners] are now more interested in frontier tech than ever before,” said Bilal Zuberi, a partner with the firm.
He sees a few factors encouraging limited partners (the investors who provide financing for venture capital funds) to invest in the firms that are financing companies developing technologies that were once considered outside of the mainstream.
This week, nearly 200 startups convened at Y Combinator Demo Day to pitch venture capitalists, angels and other folks looking to spend some money.
YC chief executive officer Michael Seibel took some time out of his busy schedule to join us on a special episode of Equity, TechCrunch’s venture-capital-focused podcast. Given that we had Seibel to chat with, Kate and Alex decided to drop the regular format and riff interview-style about what the accelerator program is up to.
We discussed the new startup batch (roundups here, here, and here), recent changes to the program, rising deal prices, SAFEs versus convertible notes and the future of technology in San Francisco. Regarding price, here’s what Seibel had to say:
“It’s a competitive market where investors are bidding against each other. So if you see pricing go up you have to ask yourself the question, ‘where is the money supply coming from?’ The big trend over the last six years has been institutional investors moving from just kind of Series A funds and growth funds down to the seed level. When you looked at Demo Day when I was going through the first time it was full of angels – people investing off their own personal balance sheet. And if you look at the room today it’s full of funds. The reality is that, as the pool of capital increases in the seed world, the seed investors are competing against each other and one of the easier ways for investors to compete is to bid up price.”
But, Seibel continued, YC doesn’t necessarily consider the situation a net-positive, because companies that raise such huge rounds can spend money as though they had reached the fabled “product-market fit,” when in reality they have not. They just have money, which can feel the same but is not.
Ultimately, the thing that’s going to kill you, Seibel says, isn’t fundraising or who you raised from. The thing that’s going to kill you, he says, is that you didn’t build something your customers wanted.
Watch a clip from the interview here:
To hear more from Seibel and watch four more video clips discussing YC, the new class, and the startup game in San Francisco and beyond, become an Extra Crunch member. You can learn more and try it for free.
Nearly 200 startups have just graduated from the prestigious San Francisco startup accelerator Y Combinator . The flock of companies are now free to proceed company-building with a fresh $150,000 check and three-months full of tips and tricks from industry experts.
As usual, we sent several reporters to YC’s latest demo day to take notes on each company and pick our favorites. But there were many updates to the YC structure this time around and new trends we spotted from the ground that we’ve yet to share.
After two days of founders tirelessly pitching, we’ve reached the end of YC’s Summer 2019 Demo Days. TechCrunch witnessed more than 160 on-the-record startup pitches coming out of Y Combinator, spanning healthcare, B2B services, augmented reality and life-extending.
The full list is worth a gander, you can read about the 84 startups from Day 1 and the 82 companies from Day 2 in the linked posts. You can also check out our votes for the best of the best from day 1.
After conferring on the dozens of startups we saw yesterday, here are our favorites from the second day of Y Combinator pitches.
It’s that time of year, Silicon Valley’s investor technocrati and advice-giving Twitter celebrities descended upon Pier 48 in San Francisco to judge the latest summer batch of Y Combinator startups. TechCrunch was there, as well, and we were tapping away feverishly as co-founders pitched to woo investors.
There are 197 companies in total in the summer YC batch, we heard from 84 of them today — in addition to a few off-the-record pitches which we agreed to hold off publicizing as they remain in stealth. We’ll hear from another chunk of them tomorrow, so check back tomorrow for even more startup blurbs.
Demo Day used to be the debut for many of these companies, but as Y Combinator’s prestige has grown so has the likelihood that the batch’s best will be closing rounds at outsized valuations before the first pitches have been made.
We’ll undoubtedly be reporting on some of these rounds moving forward, but for now here are the 84 companies whose founders pitched onstage today at Y Combinator Demo Days – Day 1.
That’s all for Day 1, we’ll be posting our favorites from today’s batch soon and we’ll be back tomorrow with the rest of the batch.
There are niche startups and then there are VR companies going after fans of the “cyberpunk fantasy anime aesthetic.”
Ramen VR is one of only a few virtual reality startups that Y Combinator has bet on in the past few years and is only one of two in the company’s most recent batch of bets. It has a niche approach but it’s hoping to build an MMO that can leanly grow alongside the slow-but-steady virtual reality market. Like any content play that’s hoping for VC dollars, Ramen VR wants to eventually be a platform.
“Long-term, our goal isn’t just to create a game, but we’ve seen the issues of VR platforms that tried to be platforms before they had a meaningful use case. If you’re just trying to be a chat room or platform without any users, that doesn’t work,” CEO Andy Tsen tells TechCrunch.
The company’s first title is called Zenith, and it’s an anime-inspired fantasy title that plays with cyberpunk themes as well. The founders are really aiming to give VR geeks the game that they want, one that taps into the 80s futuristic aesthetic with gameplay that pays tribute to popular sci-fi books, movies and games of the era.
MMOs are attracting quite a bit of inbound interest in the venture-backed startup world, part of the reasoning has been because of people seeing the scope a title like Fortnite was able to achieve so quickly after going viral, the other part is the prevalence of developer tools that gaming startups are able to easily plug into their tech stacks. Ramen VR is using Improbable’s Spatial OS to bring persistent online gameplay to its users.
The company just rolled out a Kickstarter to gauge interest for Zenith, they launched a week ago and have raised $132k in the crowdfunding campaign thus far. Backers get access to a VR version of the title as well as a desktop PC copy. The startup plans to roll out across VR devices including PC systems, PlayStation VR and Oculus Quest.
“The whole point is that it’s not just on one device, it’s a world, it’s literally the Upside Down from Stranger Things layered on top of your entire world. At any point, no matter what screen you’re on, you can access that,” CTO Lauren Frazier tells us.
The startup still has a bit of development ahead of them, but the current plan is to launch an Alpha in six months, a beta in nine months and to go live broadly a year from now.
There has long been a stigma associated with therapy and mental health coaching, a stigma that is even more pronounced in the business world, despite considerable evidence of the efficacy of these services. One of the organizations that has set out to change this negative association is Torch, a startup that combines the therapeutic benefits of executive coaching with data-driven analytics to track outcomes.
Yet, as Torch co-founder and CEO Cameron Yarbrough explains in this Breaking Into Startups episode, the startup wasn’t initially a tech-oriented enterprise. At first, Yarbrough drew on his years of experience as a marriage and family counselor as he made the transition into executive coaching, even referring to the early iterations of Torch as little more than “a matchmaking service between coaches and professionals.”
In time, Yarbrough identified a virtually untapped market for executive coaching — one that, by his estimate, could amount to a $15 billion industry. To demonstrate to investors the great potential of this growing market, he first built up a clientele that provided Torch with sufficient recurring revenue and low churn rate.
Only then was Yarbrough able to raise a $2.4 million seed round from Initialized Capital, Y Combinator, and other investors, convincing them that data analytics software could enhance the coaching process — as well as coach recruitment — enough to effectively “productize feedback,” as he puts it.
For Yarbrough and Torch, “productizing feedback” involves certain well-known business strategies that complement traditional coaching methods. For instance, Torch’s coaching procedure includes a “360 review,” a performance review system that incorporates feedback from all angles, including an employee’s manager, peers, and other people within an organization who have knowledge of the employee’s work.
The 360 review is coupled with an OKR platform, which provides HR departments and other interested parties with the metrics and analytics to track employee progress through the program. This combination is designed to promote the development of soft skills, which in turn drive leadership.
Torch has achieved considerable success, landing several influential clients in the tech sector through its B2B approach. But Yarbrough is clear that his goal with the company is to “democratize” access to professional coaching, in hopes of providing the same kind of mental health counseling and support to employees in all levels of an organization.
In this episode, Yarbrough discusses the history and trajectory of Torch, his experience scaling a company many considered unscalable, and the methods he uses to manage his own emotional and mental health as the CEO of an expanding startup. Yarbrough offers insights into the feelings of anxiety and dread common among entrepreneurs and provides a close look at how he has found business and personal success with Torch.
Breaking Into Startups: There’s a difference between a mentor and a coach. Today, I want to talk about that difference and in addition to the intersection between business and psychology, What Cameron Yarbrough, CEO of Torch and Founder of Well Clinic.
If you’re someone that is looking for a mentor or a coach as you break into tech, or if you just want to be surrounded by peers, make sure you download the Career Karma app by going to www.breakingintostartups.com/download.
On today’s episode, you’re going to understand the importance of therapy, mental health and coaches, as well as how historically, it has been inaccessible to people and how Cameron is using his background to democratize this for the world.
If this is your first time listening to the Breaking Startups Podcast, make sure you leave a review on iTunes and tell your friends. Listen to it on Soundcloud and talk about it on Spotify. If you have any feedback for us, positive or negative, please let us know. Without further ado, let’s break-in.
Cameron Yarbrough is the CEO of Torch. He’s one of the best executive coaches in the world. Not only are we going to be talking about coaching and mentoring for executives, but we’ll also be talking about coaching in general for everyone. We’re going to go into how he created his company.
Discovering and drilling for the important minerals used for industry and the technology sector remains incredibly important as existing mines are becoming depleted. If the mining industry can’t become more efficient at finding these important deposits, then more unnecessary, harmful drilling and exploration takes place. Applying AI to this problem would seem like a no-brainer for the environment.
Joining this field is now Earth AI, a mineral targeting startup which is using AI to predict the location of new ore bodies far more cheaply, faster, and with more precision (it claims) than previous methods.
It’s now closed a funding round of ‘up to’ $2.5 million from Gagarin Capital, A VC firm specializing in AI, and Y Combinator, in the latter’s latest cohort announced this week. Previously, Earth AI had raised $1.7 million in two seed rounds from Australian VCs, AirTree Ventures and Blackbird Ventures and angel investors.
The startup uses machine learning techniques on global data, including remote sensing, radiometry, geophysical and geochemical datasets, to learn the data signatures related to industrial metal deposits (from gold, copper, and lead to rare earth elements), train a neural network, and predict where high-value mineral prospects will be.
In particular, it was used to discover a deposit of Vanadium, which is used to build Vanadium Redox Batteries that are used in large industrial applications. Finding these deposits faster using AI means the planet will thus benefit faster from battery technology.
In 2018, Earth AI field-tested remote unexplored areas and claims to have generated a 50X better success rate than traditional exploration methods, while spending on average $11,000 per prospect discovery. In Australia, for instance, companies often spend several million dollars to arrive at the same result.
Jared Friedman, YCombinator partner comented in a statement: “The possibility of discovering new mineral deposits with AI is a fascinating and thought-provoking idea. Earth AI has the potential not just to become an incredibly profitable company, but to reduce the cost of the metals we need to build our civilization, and that has huge implications for the world.”
“Earth AI is taking a novel approach to a large and important industry — and that approach is already showing tremendous promise”, Mikhail Taver, partner at Gagarin Capital said.
Earth AI was founded by Roman Tesyluk, a geoscientist with eight years of mineral exploration and academic experience. Prior to starting Earth AI, he was a PhD Candidate at The University of Sydney, Australia and obtained a Master’s degree in Geology from Ivan Franko University, Ukraine. “EARTH AI has huge ambitions, and this funding round will supercharge us towards reaching our milestones,” he said.
This latest investment from Gagarin Capital joins a line of other AI-based products and services and investments it’s made into YC companies, such as Wallarm, Gosu.AI and CureSkin. Gagarin’s exits include MSQRD (acquired by Facebook), and AIMatter (acquired by Google).
Any first responder knows that situational awareness is key. In domestic violence disputes, hostage rescue, or human trafficking situations, first responders often need help determining where humans are behind closed doors.
That’s why Megan Lacy, Corbin Hennen and Rob Kleffner developed Lumineye, a 3D printed radar device that uses signal analysis software to differentiate moving and breathing humans from other objects, through walls.
Lumineye uses pulse radar technology that works like echolocation (how bats and dolphins communicate). It sends signals and listens for how long it takes for a pulse to bounce back. The software analyzes these pulses to determine the approximate size, range and movement characteristics of a signal.
On the software side, Lumineye’s app that will tell a user how far away a person is when they’re moving and breathing. It’s one dimensional, so it doesn’t tell the user whether the subject is to the right or left. But the device can detect humans out to 50 feet in open air, and that range decreases depending upon the materials placed in between like drywall, brick or concrete.
One scenario the team gave to describe the advantages of using Lumineye was the instance of hostage rescue. In this type of situation, it’s crucial for first responders to know how many people are in a room and how far away they are from one another. That’s where the use of multiple devices and triangulation from something like Lumineye could change a responding team’s tactical rescue approach.
Machines that currently exist to make these kind of detections are heavy and cumbersome. The team behind Lumineye was inspired to manufacture a more portable option that won’t weigh teams down during longer emergency response situations that can sometimes last for up to 12 hours or overnight. The prototype combines the detection hardware with an ordinary smartphone. It’s about 10 x 5 inches and weighs 1.5 pounds.
Lumineye wants to grow out its functionality to become more of a ubiquitous device. The team of four is planning to continue manufacturing the device and selling it directly to customers.
Lumineye’s device can detect humans through walls using radio frequencies
Lumineye has just started its pilot programs, and recently spent a Saturday at a FEMA event testing out the the device’s ability to detect people covered in rubble piles. The company was born out of the Boise Idaho cohort of Stanford’s Hacking4Defense program, a course meant to connect Silicon Valley innovations with the U.S. Department of Defense and Intelligence Community. The Idaho-based startup is graduating from Y Combinator’s Summer 2019 class.
Megan Lacy, Corbin Hennen and Rob Kleffner