The Station is back for another week of news and analysis on all the ways people and goods move from Point A to Point B — today and in the future. As always, I’m your host Kirsten Korosec, senior reporter at TechCrunch.
Portions of the newsletter will be published as an article on the main site after it has been emailed to subscribers (that’s what you’re reading now). To get everything, you have to sign up. And it’s free. To subscribe, go to our newsletters page and click on The Station.
This week, we’re looking at factories in China, scooters in San Francisco and touchscreens in cars, among other things.
Please reach out anytime with tips and feedback. Tell us what you love and don’t love so much. Email me at firstname.lastname@example.org to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.
Uber, Lime and Spin each deployed 500 electric scooters in San Francisco as part of the city’s permitting program. This means residents in SF can now choose from Uber-owned JUMP, Lime, Spin or Scoot scooters. Unfortunately for Skip, the company did not receive a permit to continue operating in the city, which means layoffs at the local level are afoot, Skip CEO Sanjay Dastoor said earlier this week.
Meanwhile, former Uber executive Dmitry Shevelenko unveiled Tortoise, an autonomous repositioning software for micromobility operators. The idea is to help make it easier for these companies to more strategically deploy their respective vehicles and reposition them when needed.
Let’s close this section with the obligatory funding round. Wheels, a pedal-less electric bike-share startup, raised a $50 million round led by DBL Partners. That brought its total funding to $87 million.
Oh, but wait, TC reporter Romain Dillet reminded us that micromobbin’ happens outside of the U.S. too. Uber also announced this past week that it has integrated its app with French startup Cityscoot, which has a fleet of free-floating moped-style scooters.
This is the latest example of Uber’s plan to become a super mobility app that goes well beyond its own network of ride-hailing vehicles.
— Megan Rose Dickey
We’ve seen a lot of different approaches when it comes to engaging with connected car services: head-up displays on the windshield, small screens perched on the dashboard, interactive voice and, of course, connections and mounts for smartphones.
But how about if your whole car becomes the touchscreen? A startup called Sentons is working on technology that could make that happen. The company uses a technique involving processors and AI that emit and read ultrasound to detect physical movement on a surface, such as touch, force or gestures, and users can create “virtual controls” on the fly that work on these surfaces.
This week, it released SurfaceWave, a software and hardware stack that works on glass, metal and plastic surfaces of smartphones.
CEO Jess Lee says the next iterations are going to be the kinds of materials that are used to make car dashboards and other interior surfaces you find inside the vehicle, including leather, thicker plastic and other materials. The company is already engaging with automotive companies, Lee told TechCrunch.
I can see a lot of possibilities for this in the human-driven vehicles of today. We’ve already seen how Tesla has changed how we think about infotainment systems in cars. And then there’s electric vehicle startup Byton, which plans to bring a vehicle to market with a touchscreen that extends along the entire dashboard.
The real opportunity for Sentons will be with autonomous vehicles, a product that will afford its passengers more leisure time.
— Ingrid Lunden
Earlier this week, Tesla was given the OK to begin producing vehicles at its $2 billion factory in Shanghai. Tesla was added to the Ministry of Industry and Information Technology’s list of approved automotive manufacturers.
Now we’ll watch and wait to see if production starts this month. Expect the topic of China and this factory to come up during Tesla’s earnings call with analysts October 23.
In other China factory news, we hear that electric vehicle startup Byton plans to host a splashy opening ceremony in early November for its new plant. The event will include lots of Chinese officials, company executives and maybe a preview of a near-final production version of its M-Byte vehicle.
Byton’s factory in Nanjing covers some 800,000 square meters (8.6 million square feet) funded with a total investment of more than $1.5 billion. Over the summer, the walls and roof went up, equipment was installed and commissioning began in five major workshops: stamping, welding, paint, battery and assembly.
The plant will begin trial production in late 2019.
This all sounds great, but there have been challenges, and the constant requirement for capital is one of them. Byton has delayed the launch of the production version of the M-Byte by two quarters. It’s now looking like commercial production will begin by the end of the second quarter of 2020.
Here are a couple of interesting tidbits for those manufacturing geeks out there:
We hear a lot. But we’re not selfish. Let’s share. A little bird is where we pass along insider tips and what we’re hearing or finding from reliable, informed sources in the industry. This isn’t a place for unfounded gossip.
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I recently spoke to Randol Aikin, the head of systems engineering at self-driving trucks startup Ike Robotics, about the company’s approach, which is based on a methodology developed at MIT called Systems Theoretic Process Analysis. STPA is the foundation for Ike’s product development.
The company also released a wickedly long safety report (it’s halfway down that landing page in the link provided).
The complete interview was included in the emailed newsletter. Yet another reason to subscribe to this free newsletter. Here’s one quote from the interview with Aikin:
We asked the question, what do we have to prove to ourselves and demonstrate in order to be on a public road safely? It’s the same question that we’re going to have to answer for the product as well, which is, what do we need to prove to assure that we’re safe to operate without a human in the cab?
It’s one of the huge unproven hypotheses. Anybody in this space that doesn’t consider that to be a huge technical challenges is ignoring a really thorny and important question.
Our mobility coverage extends to Extra Crunch. Check out my latest article on who will own the future of transportation based on insights from Zoox CEO Aicha Evans and former Michigan Gov. Jennifer Granholm. The idea here is to explore some of the nuances of this loaded question.
Extra Crunch requires a paid subscription and you can sign up here.
Shuttle startup Via and the city of Cupertino are launching an on-demand public transportation network, the latest example of municipalities trying out alternatives to traditional buses.
The aim is for these on-demand shuttles, which will start with six vans branded with the city of Cupertino logo, to provide more efficient connections to CalTrain and increase access to public transit across the city.
The on-demand shuttle service, which begins October 29, will eventually grow to 10 vehicles and include a wheelchair accessible vehicle. Avis Budget Group, another partner in this service, is the fleet management service that will maintain the vehicles.
In Cupertino, residents and commuters can use the Via app or a phone reservation system to hail a shuttle. The network will span the entire 11-square-mile city with a satellite zone surrounding the Sunnyvale CalTrain station for commuters, Via said Monday. Cupertino Mayor Steven Scharf views the Via on-demand service as the next generation of “what public transportation can be, allowing us to increase mobility while taking a step toward our larger goal of reducing traffic congestion.”
The service, which will run from 6 a.m. to 8 p.m. weekdays and 9 a.m. to 5 p.m. Saturdays, will cost $5 a ride. Users can buy weekly and monthly passes for $17 and $60, respectively.
Via has two sides to its business. The company operates consumer-facing shuttles in Chicago, Washington, D.C. and New York.
Via also partners with cities and transportation authorities, giving clients access to their platform to deploy their own shuttles. The city of Cupertino, home to Apple, SeaGate Technologies and numerous other software and tech-related companies, is one example of this. Austin’s Capital Metropolitan Transportation Authority also uses the Via platform to power the city’s Pickup service. And Via’s platform is used by Arriva Bus UK, a Deutsche Bahn Company, for a first- and last-mile service connecting commuters to a high-speed train station in Kent, U.K.
In January, Via announced it was partnering with Los Angeles as part of a pilot program that will give people rides to three busy public transit stations. Via claims it now has more than 80 launched and pending deployments in over 20 countries, providing more than 60 million rides to date.
While city leaders appear increasingly open to experimenting with on-demand shuttles, success in this niche business isn’t guaranteed. For instance, Chariot, which was acquired by Ford, shut down its operations in San Francisco, New York and the UK in early 2019.
Waymo, the autonomous vehicle company under Alphabet, has started creating 3D maps in some heavily trafficked sections of Los Angeles to better understand congestion there and determine if its self-driving vehicles would be a good fit in the city.
For now, Waymo is bringing just three of its self-driving Chrysler Pacifica minivans to Los Angeles to map downtown and a section of Wilshire Boulevard known as Miracle Mile.
Waymo employees will initially drive the vehicles to create 3D maps of the city. These maps are unlike Google Maps or Waze. Instead, they include topographical features such as lane merges, shared turn lanes and curb heights, as well as road types and the distance and dimensions of the road itself, according to Waymo. That data is combined with traffic control information like signs, the lengths of crosswalks and the locations of traffic lights.
Starting this week, Angelenos might catch a glimpse of Waymo’s cars on the streets of LA! Our cars will be in town exploring how Waymo's tech might fit into LA’s dynamic transportation environment and complement the City’s innovative approach to transportation. pic.twitter.com/REHfxrxqdL
— Waymo (@Waymo) October 7, 2019
Waymo does have a permit to test autonomous vehicles in California and could theoretically deploy its fleet in Los Angeles. But for now, the company is in mapping and assessment mode. Waymo’s foray into Los Angeles is designed to give the company insight into driving conditions there and how its AV technology might someday be used.
The company said it doesn’t plan to launch a rider program like its Waymo One currently operating in the suburbs of Phoenix. Waymo One allows individuals to hail a ride in one of the self-driving cars, which have a human safety driver behind the wheel.
The self-driving car company began testing its autonomous vehicles in and around Mountain View, Calif., before branching out to other cities — and climates — including Novi, Mich., Kirkland, Wash., San Francisco and, more recently, in Florida. But the bulk of the company’s activities have been in the suburbs of Phoenix and around Mountain View — two places with lots of sun, and even blowing dust, in the case of Phoenix.
In a wide-ranging conversation at TechCrunch Disrupt San Francisco last week, Postmates co-founder and chief executive officer Bastian Lehmann made light of the company’s lack of IPO documents.
The San Francisco-based on-demand delivery business was expected to publicly file its IPO prospectus in September in preparation for a fall exit, sources familiar with the matter told TechCrunch this summer. September, however, has come and gone and we’re still waiting on Postmates to release the critical document.
“The reality is that we will IPO when we believe we find the right time for the business and the right time for the markets,” Lehmann told TechCrunch. “And if you look at the markets right now, I believe they are a little choppy. They are a little choppy when it comes to growth companies specifically … We are hopeful that we find a good window to get out there.”
Lehmann made reference to Uber and other companies to recently float, citing market conditions as IPO deterrents. Uber, Lyft, Slack and other fast-growing unicorns have struggled since entering the public markets earlier this year despite sky-high private market valuations. WeWork, a money-losing endeavor, recently decided to delay its IPO after demand from Wall Street devalued the business by the billions. Whether Postmates will complete its debut by the end of the year is unclear.
Postmates confidentially filed with the U.S. Securities and Exchange Commission for an IPO in February. Shortly after, Postmates held M&A talks with DoorDash, another food delivery unicorn, according to people familiar with the matter, but failed to come to mutually favorable terms. DoorDash has previously declined to comment on these reports. On stage last week, Lehmann declined to confirm the reports.
“I don’t think it does any good to speculate on M&A,” he said. “I think you have four well-funded players here in the U.S. in this space. I think everyone is well aware of the strengths and the weaknesses of each other and you know at some point down the line, if we take Europe for example, you will see consolidation in the market. People have conversations all the time but I wouldn’t read too much into it.”
Postmates operates its on-demand delivery platform, powered by a network of local gig economy workers, in more than 3,500 cities across all 50 states. The company does not yet operate in any international markets aside from Mexico City, however, Lehmann’s comments suggest the business could be plotting a foray into Europe, where Deliveroo, Just Eat and others dominate the market.
Postmates has raised about $900 million to date, including a $225 million round announced last month that valued the company at $2.4 billion. DoorDash, on the other hand, reached a $12.6 billion valuation in May with a $600 million Series G and has raised more than double that of Postmates. When asked why DoorDash, a similar and competing business, needed that much more capital, Lehmann joked “Maybe [DoorDash CEO Tony Xu] needs a jet, I don’t know.”
Postmates, founded in 2011 by Lehmann, is backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others. In our interview with Lehmann, the long-time CEO discussed the ‘choppy’ public markets, competitors, the company’s autonomous robotics delivery efforts and more.
One of the most senior officials tasked with protecting U.S. critical infrastructure says that the lack of security professionals in the U.S. is one of the leading threats to national cyber security.
Speaking at TechCrunch Disrupt SF, Jeannette Manfra, the assistant director for cybersecurity for the Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA), said that the agency was making training for new cybersecurity professionals a priority.
“It’s a national security risk that we don’t have the talent regardless of whether it’s in the government or the private sector,” said Manfra. “We have a massive shortage that is expected that will grow larger.”
Homeland Security is already responding, working on developing curriculum for potential developers as soon as they hit the school system. “We spend a lot of time invested in K-12 curriculum,” she said.
The agency is also looking to take a page from the the tech industry’s playbook and developing a new workforce training program that’s modeled after how recruit and retain individuals.
For Manfra, it’s important that the tech community and the government agencies tasked with protecting the nation’s critical assets work more closely together and the best way to do that is to encourage a revolving door between cybersecurity agencies and technology companies. That may raise the hackles of privacy experts and private companies given the friction between what private companies wish to protect and what governments wish were exposed — through things like backdoors — but Manfra says close collaboration is critical.
Manfra envisions that government will pay for scholarships for cybersecurity professionals who will spend three to five years in government before moving into the private sector. “It builds a community of people with shared experience [and] in security we’re all trying to do the same things,” she said.
Priorities for Homeland Security are driving down the cost of technologies so that the most vulnerable institutions like states, municipalities and townships or the private companies who are tasked with maintaining public infrastructure — who don’t have the same money to spend as the federal government — can protect themselves.
“When you think about a lot of these institutions that are the targets of nation sates… a lot of them have resources at their disposal and many of them do not,” said Manfra. “[So] how do we work with the market to build more secure solutions — particularly with industrial control systems.”
The public also has a role to play, she said. Because it’s not just the actual technological infrastructure that enemies of the U.S. are trying to target, but the overall faith in American institutions — as the Russian attempt to meddle in the 2016 election revealed.
“It’s also about building a more resilient and aware public,” said Manfra. “And adversaries have learned how they can manipulate the trust in these institutions.”
Sebastian Thrun is waving a device in his hand with an excited, almost gleeful expression on his face as he trots from a makeshift aircraft hangar toward the secret project that Kitty Hawk Corp. has been working on for nearly two years.
The serial entrepreneur and co-founder of X, the Alphabet moonshot factory, isn’t trying to contain his excitement as he presents what appears to be a decibel meter.
Thrun, the CEO of aviation startup Kitty Hawk, and Damon Vander Lind, the physicist and electrical engineer who has been leading the project, are standing in an expanse of grasslands and low-lying, oak-dotted hills that can only be described as cattle country. But there are no cows to be found here. Instead, a low-slung, orange and black aircraft with eight rotors and a 20-foot wingspan sits on a small asphalt pad.
It’s called Heaviside. Vander Lind’s pink-hued T-shirt, the letters HVSD emblazoned across it, suddenly makes more sense than it did an hour before.
HVSD, which is named after renowned physicist and electrical engineer Oliver Heaviside, is Kitty Hawk’s third act.
The first is Flyer, a single-seater, all-electric, vertical take-off and landing vehicle powered by 10 independent lift fans that operates between 3 to10 feet off the water. Then there’s Cora, a two-person, autonomous taxi that Kitty Hawk unveiled in 2018. Kitty Hawk, which is backed by Google co-founder Larry Page, recently formed a strategic partnership with Boeing to collaborate on urban air mobility, particularly around safety and how autonomous and piloted vehicles will co-exist. The partnership will focus on Cora.
HVSD is an electric aircraft designed to go anywhere and land anywhere fast and quietly, Vander Lind says.
“If you build an aircraft that can land anywhere and then say actually, oh wait it can’t just land anywhere, no I need a big helipad and I need to build a bunch of structure and all that — you miss the point,” said Vander Lind.
And indeed, HVSD isn’t parked on a large runway or giant helipad. The aircraft, which weighs about one-third of a Cessna, is on a section of asphalt much bigger than its wingspan. Just beyond this manmade parking spot are acres of grassland and the occasional tree. There is no runway to be found.
The big promises that Thrun and Vander Lind are trying to deliver on here are speed, silence and ease of use.
Vander Lind, who earned his pilot’s license, commutes part of the way to work in a single-engine piston aircraft he fixed up. He takes a bicycle for the remainder of the journey. The physicist and electrical engineer, who was a lead engineer at the Alphabet-owned airborne wind turbine company Makani Power, notes that his commute, while fun, is hardly practical.
HVSD aims to deliver both an enjoying ride and practicality, Vander Lind said.
The aircraft is 100 times quieter than a helicopter, the pair said. And it’s faster. Thrun says HVSD, which has a range of about 100 miles, can travel from San Jose to San Francisco in 15 minutes. The aircraft can be flown autonomously or manually, but even then most of the tasks of flying are handled by the compute, not the human.
Moments after walking around HVSD, the decibel meter, still in Thrun’s grasp, gets put to work. A helicopter that is stationed about 150 feet from where we’re standing is fired up. After two minutes, the helicopter lifts off, it’s whop whop whop lingering even as the craft is more than 600 feet in the air and begins its circular flight path around the testing area. The meter pops above 85 decibels and stays there for several minutes. The decibels go beyond 88 decibels at landing.
Later, after the helicopter lands and the engine slowly winds down, the test turns to HVSD.
An engineer, who is standing in an open air tower, brings HVSD suddenly to life. Unlike a helicopter, the HVSD starts and lifts off in just seconds. There is sound as it lifts off — hitting about 80 decibels — but what’s striking is the brevity. The take off sound lasts fewer than 10 seconds. As HVSD gains altitude and then circles above us, the only sound is a few engineers and technicians talking nearby.
Once Thrun quiets the crew, the noise falls below 40 decibels, which is what a typical, quiet residential neighborhood registers at. HVSD is nearby at about 600 feet of altitude, but it is barely audible as it circles above us. An office with an air conditioning running might be about 50 decibels, Thrun says for comparison.
“The calculus here is that this has to be socially acceptable for people,” Thrun says. “There’s a reason why helicopters are not: they’re for rich people and they’re noisy.”
It took just a year to take HVSD from a concept and some sketches to building a prototype and conducting the first test flights. This past year has been spent testing and refining the aircraft and, as Vander Lind puts it, “trying to make it crash.” It’s a goal that they have yet to accomplish.
“This thing is really robust,” Vander Lind says pointing to HVSD before turning his sights onto the nearby helicopter. “On the helicopter, there’s a little bolt on top, and if you unscrew that, you take the cotter pin out, we all die.”
Kitty Hawk is testing HVSD with and without a pilot inside, which allows the company to push the aircraft and look for flaws and vulnerabilities. “We want to do everything we can to break it in the air, so when you get in it, it’s safe,” Vander Lind says.
It might be awhile before the public gets in HVSD. The Federal Aviation Administration allows Kitty Hawk to test its aircraft as long as it stays within view of the company’s engineers and test crew on the ground. And Thrun and Vander Lind acknowledge there’s more refinement to be done.
For instance, the cockpit, which fits just one person, is still just carbon fiber. Sitting snugly inside, and kicked back like one would be riding a recumbent bicycle, it’s not quite cozy. Vander Lind, who says engineers have slept in it as “one aspect of the testing,” reminds me I’m sitting on bare carbon. He wants to add a lumbar support, arm rests and other comfort features.
The interface of the aircraft at Kitty Hawk’s secret testing area has been stripped out. But Thrun tells me the interface will be simple to use like “pushing a button.”
The idea is for HVSD to be accessible to more than just the super rich and those who have a pilot license, Thrun says. And, of course, to make commuting easier and faster.
The average commute time in the United States is 53 minutes, according to the US Census Bureau. Looking just at the weekday commute, an individual still manages to log 231 hours a year commuting. On Heaviside, Thrun says, it comes to 21 hours a year commuting. “That’s 10 times faster.”
Thrun and Vander Lind are squarely in the visionary and dreamer category. But even they understand there is work left to be done if they ever hope to bring HVSD to the public. Safety is paramount and the team is working on the compute that will handle the flying as well as redundancies.
And then there is the regulatory piece. Thrun has tapped Mike Huerta, who served as FAA Administrator from 2013 to 2018, as an adviser to Kitty Hawk to help the company get closer to its goal.
After committing to having a first crewed launch of its rocket ship in 2019, Blue Origin, the rocket manufacturer and launch services company backed by Jeff Bezos, is likely going to have to push that timeline back to 2020.
Speaking onstage at TechCrunch Disrupt San Francisco, Blue Origin chief executive Bob Smith said that the window for getting the crewed flight done within the 2019 timeframe was narrowing. “We’re not going to be date driven,” Smith said.
But as commercial launches come to market, customers can expect to pay “hundreds of thousands of dollars” for a ticket on the New Shepard suborbital flight.
Blue Origin isn’t the only commercial space company looking to conduct a crewed launch before the end of the year. In June, NASA set a timeline to get crewed launches from Boeing and SpaceX in September and November, respectively.
In an August statement, SpaceX said it was still planning on getting astronauts to the International Space Station later this year.
Blue Origin is still moving ahead with its planned launches and the near-term setback is something that likely won’t make much of a dent in a company backed by the world’s richest man — and one who’s strategy and vision extends on a global timeframe.
For Blue Origin’s chief executive (and its financial backer) the company’s ultimate goal is to ensure that humanity is an extra-planetary species — something that will take decades to achieve.
What Smith and others are sure of is the commercial viability of the space industry.
“Launch volume is going up and has been going up for quite a while,” says Smith. According to the Blue Origin founder, launch volumes in the space industry have been increasing at 3% per-year and some market analysts have predicted that number could rise to 50% to 80% per-year.
And those numbers don’t include the mega-constellations that companies like Facebook, Alphabet, and Amazon are all hoping to bring to orbit.
“The launch volume is really looking very attractive over the next ten years,” Smith says. And that’s transforming the space industry, which for decades had been dominated by government customers. “It is fundamentally shifting to a more commercial model,” says Smith.
As part of San Francisco’s program to operate shared electric scooters in the city, it’s requiring providers to pilot adaptive scooters to ensure people with disabilities are not left out from this new form of transportation. Companies are expected to deploy these adaptive scooters within the first three months of the permit, which begins this month.
Last week, the San Francisco Municipal Transportation Agency granted electric scooter permits to Uber-owned JUMP, Lime, Bird-owned Scoot and Ford-owned Spin. As part of their applications, each provider outlined its planned approach to developing adaptive scooters. We dig into the key details of their applications below.
Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy news pertaining to startups and venture capital. Before I jump into today’s topic, let’s catch up a bit. Last week, I profiled an e-commerce startup Part & Parcel. Before that, I wrote about Stripe’s grand plans.
Some startups build space ships that will one day send us all to Mars, others put their time and energy into improving 350 year old infrastructure.
Landline, the operator of a bus network in the Midwest, is one of the latest companies to raise venture capital. The business has closed a $3.85 million round led by Los Angeles firm Upfront Ventures, with participation from Mucker Capital and Matchstick Ventures. The company is actually based out of LA, too, but has completed its initial launch in Minnesota, where there’s greater demand for short-term bus travel.
Landline isn’t just a few buses with startup branding. Founder and chief executive officer David Sunde tells TechCrunch a ride on Landline is booked through its partner airline Sun Country Airlines. A traveler pays Sun Country one fixed price to get them from the bus pick-up point to their final destination. The goal is to help those who live far distances from airports save money and to make the experience of busing more enjoyable.
“It’s all meant to be at the level of reliability that you would expect from an air carrier,” Sunde tells TechCrunch. “We don’t want people who get on the bus to be surprised or upset — we want it to be a seamless experience … The perception of bus travel in the U.S. is negative. A big part of our mission is to get people comfortable on buses again as a viable alternative to air travel in certain markets.”
For those of you wondering, have these people ever heard of Greyhound? Landline says they wont compete with Greyhound because of the more than 100-year-old transportation business’s focus on long-haul trips. Landline will specifically focus on connecting those in rural communities to airports, particularly regions where there aren’t already bus routes that conveniently access the airport. Can’t say I’m particularly bullish on this one but the startup is very early and transportation is a massive market ripe for disruption.
“Our vision is completely integrated multi-modal travel,” Sunde added.
WeWork has delayed its IPO following questions surrounding its corporate governance and the ultimate value of the company. The co-working business says it expects to go public by the end of the year. Airbnb, for its part, filed a press release this week confirming its plans to go public in 2020. We don’t know much about the company’s plans, but we wouldn’t be too surprised to see the home-sharing decacorn pursue a direct listing.
Postmates, the popular food delivery service, raised another $225 million at a valuation of $2.4 billion in a round led by the private equity firm GPI Capital this week. The financing brings Postmates’ total funding to nearly $1 billion. The company filed privately with the SEC for an IPO earlier this year. Sources familiar with the company’s exit plans say the business intends to publicly unveil its IPO prospectus this month.
To discuss the company’s journey to the public markets and the challenges ahead in the increasingly crowded food delivery space, Postmates co-founder and chief executive officer Bastian Lehmann will join us onstage at TechCrunch Disrupt on Friday October 4th. Don’t miss it.
A whole lot of VCs will be joining us at TechCrunch Disrupt.
We’ll have a16z general partners Chris Dixon, Angela Strange and Andrew Chen for insight into the firm’s latest activity. Seed investor Charles Hudson of Precursor Ventures and Redpoint Ventures general partner Annie Kadavy will show up to give founders tips on how to raise VC. Y Combinator’s Michael Seibel and Ali Rowghani will join us with advice on how to get accepted to their respected accelerator.
Plus, GV’s David Krane, Sequoia general partner Jess Lee, Floodgate’s Ann Miura-Ko, Aspect Ventures’ Theresia Gouw, Bessemer Venture Partners’ Tess Hatch, Forerunner Ventures’ Eurie Kim, Mithril Capital’s Ajay Royan and SOSV’s Arvind Gupta will be on deck to comment on the respective fields.
Disrupt SF runs October 2-4 at the Moscone Center in the heart of San Francisco. Passes are available here.
This week, the lovely Alex Wilhelm and I welcomed Kleiner Perkins’ Mamoon Hamid, known for his investments in Slack, Figma, Cameo and more, to riff on upcoming IPOs and debate the scalability of D2C brands. Listen to the episode here or watch us on YouTube.
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.
Sebastian Thrun (Udacity) at TechCrunch Disrupt SF 2017
Since then, the serial entrepreneur and inventor seems to have doubled down on his vision of the future of transportation with his current flying car company, Kitty Hawk Corporation. Thrun is working on bringing two aircraft to market — the one-person Flyer and a two-person autonomous taxi called Cora. He (along with a stellar line up of startup leaders) will be at Disrupt SF this year to give a behind the scenes look at Kitty Hawk and what the future of flight might look like.
In this same vein, we’re doing our own Flashback Friday by rolling back to early bird prices for Disrupt SF. For today only, you’ll have the chance to save up to $1,300 on your pass with even bigger savings when you bring your whole team along for the ride. Need more reasons to attend? We’ll give you five.
The excitement of Disrupt SF begins in just a few short weeks – don’t let this chance to attend the largest startup conference in Silicon Valley pass you by and register today. Who knows, we might even have a chance to see Charlie return to the limelight.
Replica, the data-gathering tool created within Sidewalk Labs that maps the movement of people in cities, is now a company.
The newly formed company, which is headed by Nick Bowden, also announced Thursday it has raised $11 million in a Series A funding round from investors Innovation Endeavors, Firebrand Ventures, and Revolution’s Rise of the Rest Seed Fund. The capital will be used to accelerate Replica’s growth through new hires beyond its existing 13-person staff, expansion to new cities and investment in its technology.
Replica will remain connected to Sidewalk Labs, the smart city technology firm owned by Google’s parent company Alphabet. Both Sidewalk Labs and Innovation Endeavors will be on the company’s board.
Replica, which is headquartered in Kansas City with an engineering office in San Francisco, plans to launch in several new regions. Replica is already working with Kansas City, Portland, Chicago and Sacramento, with more cities to come this year.
The Replica tool, which has drawn the ire of some privacy advocates, grew out of Model Lab, a project started two years ago to investigate modeling as a way to address urban problems. Early work focused on meeting with public agencies throughout the world to learn more about the data, processes and other tools they used.
The Replica planning tool was born out what they discovered: public agencies don’t have all the information needed to understand the link and interdependence between transportation and land use. The upshot is a an incomplete picture of how people move within cities, leaving public agencies ill-equipped to make decisions about how land is used and what transportation is needed and where, the company says.
“Answering questions like who uses the street, in which way and why, are critical for city planners as they work to make transit and land use more efficient and sustainable,” Bowden wrote. “But current resources available to city planners to analyze people’s travel in urban areas are less than satisfactory.”
The Replica modeling tool uses de-identified mobile location data to give public agencies a comprehensive portrait of how, when, and why people travel. Movement models are matched to a synthetic population, which has been created using samples of census demographic data to create a broad new data set that is statistically representative of the actual population. The result, Bowden says, is a model that is both privacy-sensitive and extremely useful for public agencies.
Bowden tried to quell privacy worries Thursday in a blog post emphasizing that the data has been “de-identified,” meaning that an individual’s location data would be identifiable. The company says it’s not interested in the movement of individuals. Instead, the modeling tool is used to see and understand patterns of movement.
“For this reason, we only start with data that has been de-identified,” Bowden wrote Thursday. “This data is then used to train a travel behavior model — basically, a set of rules to represent the movement in a particular place.”
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.”
Nigerian fintech startup Kuda — a digital-only retail bank — has raised $1.6 million in pre-seed funding.
The Lagos and London-based company recently launched the beta version of its online mobile finance platform. Kuda also received its banking license from the Nigerian Central Bank, giving it a distinction compared to other fintech startups.
“Kuda is the first digital-only bank in Nigeria with a standalone license. We’re not a mobile wallet or simply a mobile app piggybacking on an existing bank,” Kuda bank founder Babs Ogundeyi told TechCrunch.
“We have built our own full-stack banking software from scratch. We can also take deposits and connect directly to the switch,” Ogundeyi added, referring to the Nigeria’s Central Switch — a SWIFT-like system that facilitates bank communication and settlements.
A representative for the Central Bank of Nigeria (speaking on background) confirmed Kuda’s banking license and status, telling TechCrunch, “As far as I’m aware there is no other digital bank [in Nigeria] that has a micro-finance license.”
Kuda offers checking accounts with no monthly-fees, a free debit card, and plans to offer consumer savings and P2P payments options on its platform in coming months.
“You can open a bank account within five minutes, do all the KYC in the app, and you get issued a new bank account number,” according to Ogundeyi. Ogundeyi — a repeat founder who exited classifieds site Motortradertrader.ng and worked in a finance advisory role to the Nigerian government — co-founded Kuda in 2018 with former Stanbic Bank software developer Musty Mustapha.
The two convinced investor Haresh Aswani to lead the $1.6 million pre-seed funding, along with Ragnar Meitern and other angel investors. Aswani confirmed his investment to TechCrunch and that he will take a position on Kuda’s board.
Kuda plans to use its seed funds to go from beta to live launch in Nigeria by fourth-quarter 2019. The startup will also build out the tech of its banking platform, including support for its developer team located in Lagos and Cape Town, according to Ogundeyi.
Kuda also intends to expand in the near future. “It’s Nigeria for right now, but the plan is build a Pan-African digital-only bank,” he said.
As of 2014, Nigeria has held the dual distinction as Africa’s largest economy and most populous country (with 190 million people).
To scale there, and add some physical infrastructure to its online model, Kuda has correspondent relationships with three of Nigeria’s largest financial institutions: GTBank, Access Bank and Zenith Bank.
He clarified the banks are partners and not investors. Kuda customers can use these banks’ branches and ATMs to put money into bank accounts or withdraw funds without a fee.
“Even though we don’t own a single branch, we actually have the largest branch network in the country,” Ogundeyi claimed.
Kuda’s plans to generate revenues focus largely around leveraging its bank balances. “We plan to match different liability classes to the different asset classes that we create. That’s how we make money, that’s how we get efficiency in terms of income,” Ogundeyi said.
In Nigeria, Kuda enters a potentially revenue-rich market, but its one that already hosts a crowded fintech field — as the country becomes ground zero for payments startups and tech investment in Africa.
In both raw and per capita numbers, Nigeria has been slower to convert to digital payments than leading African countries, such as Kenya, according to joint McKinsey Company and Gates Foundation analysis done several years ago. The same study estimated there could be nearly $1.3 billion in revenue up for grabs if Nigeria could reach the same digital-payments penetration as Kenya.
A number of startups — established and new — are going after that prize in the West African country — several with a strategy to scale in Nigeria first before expanding outward on the continent and globally.
San Francisco-based, no-fee payment venture Chipper Cash entered Nigeria this month.
Kuda CEO Babs Ogundeyi believes the startup can scale and compete in Nigeria on a number of factors, one being financial safety. He names the company’s official bank status and the Nigeria Deposit Insurance Corporation security that brings as something that can attract cash-comfortable bank clients to digital finance.
Ogundeyi also points to offerings and price.”We look to be the next generation bank where you can do everything— savings, payments and transfers — and also the one that’s least expensive,” he said.
Volta Charging, the San Francisco-based company that combines outdoor digital advertising with charging stations to give electric vehicle owners free power, has added another $20 million in a follow-on to its Series C round.
The company’s Series C round is now closed at $100 million. Schneider Electric Ventures, SK Innovation, Energize Ventures and a number of existing partners participated in the follow-on Series C round. Volta Charging also borrowed $44 million from Energy Impact Partners and CION.
Volta, which launched in 2010, partners with businesses and real estate owners to install EV chargers in high-traffic areas such as grocery stores, entertainment venues and shopping centers. Instead of charging EV owners, the power is provided for free. Volta makes money on the outdoor advertising that is a centerpiece of the charger design.
More than 45 million free electric miles have been given to EV drivers to date, the company said.
The company’s first charging stations popped up in Hawaii. Since then, Volta has expanded to San Diego, Los Angeles, San Francisco and Silicon Valley in California as well as Chicago and its suburbs, Phoenix, and Dallas and Houston.
The funds will be used to expand the company’s network of free, advertiser sponsored charging stations. Volta is focused on adding more chargers to cities where it already has a presence as well as moving into new markets.
“As the electric vehicle industry continues to grow, Volta is well-positioned to build out an economically viable charging network needed to facilitate the shift from gas to electric,” Volta CEO and founder said Scott Mercer said in a statement. “We continue to rapidly scale our business to meet the growing demands of drivers, real estate partners and sponsors. This capital injection will accelerate our mission of mainstreaming electric vehicles.”
Happy (almost) Labor Day to all the hardworking members of the early-startup community — entrepreneurs, founders, investors, engineers and everyone in between. We know how hard you work to build your dream, so we’re cutting you a break and extending our early-bird pricing on passes to Disrupt San Francisco 2019 through 11:59 p.m. (PST) on September 6. One extra week to save up to $1,300.
Don’t fritter away this absolute last opportunity to save big bucks on our flagship event, where you’ll find more than 10,000 attendees, 400 media outlets and a passel of eager investors. Get your early-bird tickets now.
Disrupt events always feature incredible speakers, and we’ve got an amazing agenda lined up for you this year. Let’s take a look at just some of the discussions and interviews you’ll enjoy over the course of three Disruptive days.
Reigniting the Space Race: Blue Origin CEO Bob Smith intends to return the U.S. to crewed spaceflight, with a goal of doing so this year with its first suborbital trips. Hopefully, we can also get Smith to tell us the ticket price for a trip, once it begins taking on paying customers.
Could the U.S. Government Be Your Next Investor: No founder likes dilution, which is why the U.S. government is becoming an increasingly popular source for early-stage, ambitious venture capital. Hear from Steve Isakowitz (The Aerospace Corporation) along with other VC leaders and founders who have navigated the process to discover your next source of non-dilutive capital.
How to Build a Sex Tech Startup: As the old adage goes, sex sells. Cyan Banister (Founders Fund), Cindy Gallop (MakeLoveNotPorn) and Lora Haddock (Lora DiCarlo) will discuss the opportunities — and challenges — of building a successful sex tech startup, and how to capitalize on a market that’s projected to be worth more than $123 billion by 2026.
The Grass Is Greener: The cannabis industry is projected to reach $50 billion in 10 years. Keith McCarty (Wayv) and Bharat Vasan (Pax Labs) represent two of the biggest names in the market. Hear the duo talk about an industry with undeniable potential, but plenty of red tape to deal with, too.
Quite the appetizer, no? Then there’s the big event that everyone wants to watch — Startup Battlefield. Which awesome startup will outshine the rest and take home $100,000?
Want to meet and greet even more top early-stage startups? Be sure to stop by Startup Alley and connect with the TC Top Picks — and hundreds of other cool startups. This year, our editors hand-picked 45 companies that represent the very best in their tech categories. Check the list of winners right here so you can see which ones you want to meet IRL.
Disrupt San Francisco 2019 takes place October 2-4. Enjoy your Labor Day weekend, but be sure to take advantage of the one-week early-bird price extension. Buy your passes to Disrupt SF and save up to $1,300 — but only if you beat the new deadline: September 6 at 11:59 p.m. (PST).
Is your company interested in sponsoring or exhibiting at Disrupt San Francisco 2019? Contact our sponsorship sales team by filling out this form.
Nobody likes them, but price hikes happen, people. Price hikes happen. And the early-bird price for passes to Disrupt San Francisco 2019 disappears tonight, August 30 at 11:59 p.m. (PST). Avoid the pain of paying more and enjoy saving up to $1,300. You have only a few hours left. Buy your Disrupt SF passes right now.
Why attend Disrupt SF? It’s simply the place to be for members of the early-stage startup ecosystem — no matter what your role. Take it from Luke Heron, CEO of TestCard Diagnostics. His company exhibited in Startup Alley at Disrupt SF ’17 and again at Disrupt Berlin ’18 — and recently closed on $1.7 million in funding.
“If you’re a startup founder or an entrepreneur,” said Heron, “attending Disrupt is a no-brainer.”
Need more reasons? Okay, we’ll break it down for you.
Disrupt San Francisco 2019 takes place October 2-4, and you have just a few short hours left to take advantage of early-bird pricing and save up to $1,300. Price hikes happen. Don’t let them happen to you. Buy your passes before 11:59 p.m. (PST) tonight, August 30.
Is your company interested in sponsoring or exhibiting at Disrupt San Francisco 2019? Contact our sponsorship sales team by filling out this form.
We dedicate this post to all the busy, overworked startuppers — the last-minute mamas, procrastinating papas and everyone in between. We empathize and gently offer this swift boot in the booty. You have only 48 hours left to save a bundle on your pass to Disrupt San Francisco 2019.
Beat the deadline — 11:59 p.m. (PST) on August 30 — and you can save up to $1,300. Get moving and buy your tickets right here, right now.
Don’t miss out on our flagship Disrupt, which takes place October 2-4. It’s the quintessential tech conference for anyone focused on early-stage startups. Join more than 10,000 attendees — including over 1,200 exhibiting startups — for three jam-packed days of programming. We’re talking four different stages with interactive workshops, Q&A sessions and interviews with some of the industry’s top tech titans, founders, investors, movers and shakers. Check out our list of speakers and the Disrupt agenda.
Disrupt is a breeding ground of opportunity, networking and collaboration. It’s a place where ideas are born, and partnerships are made. Don’t take our (admittedly very biased) word for it. Your peers happen to agree. Here’s what Sage Wohns, co-founder of Agolo, an artificial intelligence startup, had to say about his Disrupt experience:
Disrupt helps you connect more with the startup community in very tangible ways. You can meet investors and bigger players in your industry to see if there’s an opportunity to work together. Disrupt is unique in how it brings everyone — all the industry touch points — together under one roof. It’s incredibly valuable.
So much to see, hear and do at Disrupt San Francisco 2019. And yet, so little time left — 48 tiny little hours — to save money on your pass. What are you waiting for? Get your early-bird tickets now before the clock strikes 11:59 p.m. (PST) on August 30.
Is your company interested in sponsoring or exhibiting at Disrupt San Francisco 2019? Contact our sponsorship sales team by filling out this form.
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.