Most founders who are raising capital look first to traditional equity VCs. But should they? Or should they look to one of the new wave of revenue-based investors?
Revenue-based investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance.
This guest post was written by David Teten, Venture Partner, HOF Capital. You can follow him at teten.com and @dteten. This is the 5th part of our series on Revenue-based investing VC that touches on:
Splunk, the publicly traded data processing and analytics company, today announced that it has acquired SignalFx for a total price of about $1.05 billion. Approximately 60% of this will be in cash and 40% in Splunk common stock. The companies expect the acquisition to close in the second half of 2020.
SignalFx, which emerged from stealth in 2015, provides real-time cloud monitoring solutions, predictive analytics and more. Upon close, Splunk argues, this acquisition will allow it to become a leader “in observability and APM for organizations at every stage of their cloud journey, from cloud-native apps to homegrown on-premises applications.”
Indeed, the acquisition will likely make Splunk a far stronger player in the cloud space as it expands its support for cloud-native applications and the modern infrastructures and architectures those rely on.
Ahead of the acquisition, SignalFx had raised a total of $178.5 million, according to Crunchbase, including a recent Series E round. Investors include General Catalyst, Tiger Global Management, Andreessen Horowitz and CRV. Its customers include the likes of AthenaHealth, Change.org, Kayak, NBCUniversal and Yelp.
“Data fuels the modern business, and the acquisition of SignalFx squarely puts Splunk in position as a leader in monitoring and observability at massive scale,” said Doug Merritt, president and CEO, Splunk, in today’s announcement. “SignalFx will support our continued commitment to giving customers one platform that can monitor the entire enterprise application lifecycle. We are also incredibly impressed by the SignalFx team and leadership, whose expertise and professionalism are a strong addition to the Splunk family.”
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.
Twitter’s ongoing, long-term efforts to make conversations easier to follow and engage with on its platform is getting a boost with the company’s latest acquihire. The company has picked up the team behind Lightwell, a startup that had built a set of developer tools to build interactive, narrative apps, for an undisclosed sum. Lightwell’s founder and CEO, Suzanne Xie, is becoming a director of product leading Twitter’s Conversations initiative, with the rest of her small four-person team joining her on the conversations project.
(Sidenote: Sara Haider, who had been leading the charge on rethinking the design of Conversations on Twitter, most recently through the release of twttr, Twitter’s newish prototyping app, announced that she would be moving on to a new project at the company after a short break. I understand twttr will continue to be used to openly test conversation tweaks and other potential changes to how the app works. )
The Lightwell/Twitter news was announced late yesterday both by Lightwell itself and Twitter’s VP of product Keith Coleman. A Twitter spokesperson also confirmed the deal to TechCrunch in a short statement today: “We are excited to welcome Suzanne and her team to Twitter to help drive forward the important work we are doing to serve the public conversation,” he said. Interestingly, Twitter is on a product hiring push it seems. Other recent hires Coleman noted were Other recent product hires include Angela Wise and Tom Hauburger. Coincidentally, both joined from autonomous companies, respectively Waymo and Voyage.
To be clear, this is more acqui-hire than hire: only the Lightwell team (of what looks like three people) is joining Twitter. The Lightwell product will no longer be developed, but it is not going away, either. Xie noted in a separate Medium post that apps that have already been built (or plan to be built) on the platform will continue to work. It will also now be free to use.
Lightwell originally started life in 2012 as Hullabalu, as one of the many companies producing original-content interactive children’s stories for smartphones and tablets. In a sea of children-focused storybook apps, Hullabalu’s stories stood out not just because of the distinctive cast of characters that the startup had created, but for how the narratives were presented: part book, part interactive game, the stories engaged children and moved narratives along by getting the users to touch and drag elements across the screen.
After some years, Hullabalu saw an opportunity to package its technology and make it available as a platform for all developers, to be used not just by other creators of children’s content, but advertisers and more. It seems the company shifted at that time to make Lightwell its main focus.
The Hullabalu apps remained live on the App Store, even when the company moved on to focus on Lightwell. However, they hadn’t been updated in two years’ time. Xie says they will remain as is.
In its startup life, the company went through YCombinator, TechStars, and picked up some $6.5 million in funding (per Crunchbase), from investors that included Joanne Wilson, SV Angel, Vayner, Spark Labs, Great Oak, Scout Ventures and more.
If turning Hullabalu into Lightwell was a pivot, then the exit to Twitter can be considered yet another interesting shift in how talent and expertise optimized for one end can be repurposed to meet another.
One of Twitter’s biggest challenges over the years has been trying to create a way to make conversations (also narratives of a kind) easy to follow — both for those who are power users, and for those who are not and might otherwise easily be put off from using the product.
The crux of the problem has been that Twitter’s DNA is about real-time rivers of chatter that flow in one single feed, while conversations by their nature linger around a specific topic and become hard to follow when there are too many people talking. Trying to build a way to fit the two concepts together has foxed the company for a long time now.
At its best, bringing in a new team from the outside will potentially give Twitter a fresh perspective on how to approach conversations on the platform, and the fact that Lightwell has been thinking about creative ways to present narratives gives them some cred as a group that might come up completely new concepts for presenting conversations.
At a time when it seems that the conversation around Conversations had somewhat stagnated, it’s good to see a new chapter opening up.
SpotQA, a new automated software testing platform that claims to be significantly faster than either manual testing or existing automated QA solutions, has raised $3.25 million in seed funding.
Leading the round is Crane Venture Partners, the newly-outed London venture capital firm focusing on “intelligent” enterprise startups. Also participating is Forward Ventures, Downing Ventures and Acequia Capital.
Founded in 2016 by CEO Adil Mohammed, who sold his previous company to apparel platform Teespring, SpotQA’s flagship product is dubbed Virtuoso. Described as an “Intelligent Quality Assistance Platform” that uses machine learning and robotic process automation, it claims to speed up the testing of web and mobile apps by up to 25x and make QA accessible across an entire company, not just software or QA engineers.
“Over the years working closely with engineering teams, I learned how the QA and testing process, when done inefficiently, can be a big barrier for company growth and productivity,” Mohammed tells me. “The way testing is done today is not fit for purpose. Even automated testing methods are not keeping pace with agile development practices”.
This results in software testing creating a bottleneck that prevents companies deploying as fast as they’d like to, says the SpotQA CEO, which is pain point for all involved, from developers to testers, all the way through to DevOps and production. “It has a real impact on the company’s bottom line,” adds Mohammed.
The incumbent options are either manual testing or traditional automation. Mohammed says manual testing is slow and makes continuous development difficult as there is a constant “disconnect” between QA and other teams. In turn, traditional automation is not very smart and hasn’t seen much innovation in the last decade. “It’s still very code based, relies on expensive automation engineers and it is difficult to setup and maintain,” he argues.
In contrast, SpotQA claims to have designed Virtuoso so that software quality can be ensured across the entire software development lifecycle, something the company has branded “Quality Assistance”.
“By using machine learning and robotic process automation, Virtuoso is by far the most efficient and effective way to ensure bugs, inconsistencies and errors can be identified and fixed in a fraction of the time taken using manual and traditional automated testing,” says Mohammed.
Meanwhile, the London-based company will use the new injection of capital to scale engineering, sales and marketing, and to expand internationally. Existing Virtuoso customers include Experian, Chemistry, Optionis and DXC Technologies.
This guest post was written by David Teten, Venture Partner, HOF Capital. You can follow him at teten.com and @dteten. This is part of an ongoing series on Revenue-Based Investing VC that will hit on:
So you’re interested in raising capital from a Revenue-Based Investor VC. Which VCs are comfortable using this approach?
A new wave of Revenue-Based Investors (“RBI”) are emerging. This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC.
I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital.
(For more background, see the accompanying article “Revenue-based investing: A new option for founders who care about control” published on Extra Crunch.
RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance.
I’ve listed below all of the major RBI venture capitalists I’ve identified. In addition, I’ve noted a few multi-product lending firms, e.g., Kapitus and United Capital Source, which provide RBI as one of many structural options to companies seeking capital.
Alternative Capital: “You qualify if you have $5k+ MRR. We have a special program if you are pre-seed and need product development. Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. In 2019 we partnered with several revenue-based lending providers, effectively creating a marketplace.”
Bigfoot Capital: According to Brian Parks, “Bigfoot provides RBI, term loans, and lines of credit to SaaS businesses with $500k+ ARR. Our wheelhouse is bootstrapped (or lightly capitalized) SMB SaaS. We make fast, data-driven credit decisions for these types of businesses and show Founders how the math/ROI works. We’re currently evaluating about 20 companies a month and issuing term sheets to 25% of them; those that fit our investment criteria. We’re also regularly following-on for existing portfolio companies.”
Corl: “No need to wait 3-9 months for approval. Find out in 10 minutes. Corl can fund up to 10x your monthly revenue to a maximum of $1,000,000. Payments are equal to 2-10% of your monthly revenue, and stop when the business buys out the contract at 1-2x the investment amount.”
According to Derek Manuge, Corl CEO, “Funds are closed significantly quicker than the industry average at under 24 hours. The majority of businesses that apply for funding with Corl are E-commerce, SaaS, and other digital businesses.”
Manuge continues, “Corl connects to a business’ bank accounts, accounting software, payment processors, and other digital services to collect 10,000+ historical data points that are analyzed in real-time. We collect more data on an individual business than, to our knowledge, any other RBI investor, through our application process, data partners, and various public sources online. We have reviewed the application process of other RBI lenders and have not found one that has more API connections that ours. We have developed a proprietary machine learning algorithm that assesses the risk and return profile of the business and determines whether to invest in the business. Funding decisions can take as little as 10 minutes depending on the amount of data provided by a business.”
In the past 12 months, 500+ companies have applied for funding with Corl. The following information is based on companies funded by us and/or our capital partners:
Decathlon Capital: According to John Borchers, Co-founder, Decathlon is the largest revenue-based financing investor in the US. His description: “We announced a new $500 million fund in Q1 of 2019, in our 10th year. Unlike many RBI investors, a full 50% of our investment activity is in non-tech businesses. Like other RBI firms, Decathlon does not require warrants, governance involvement, or the types of financial covenants that are often associated with other venture debt type solutions. Decathlon typically targets monthly payment percentages in the 1% to 4% range, with total targeted multiples of 1.5x to 3.0x.”
Earnest Capital: Earnest is not technically RBI. Tyler Tringas, General Partner, observes, “Almost all of these new [RBI] forms of financing really only work for more mature companies (say $25-50k MRR and up) and there are still very few new options at the stage where we are investing.” From their website: “We invest via a Shared Earnings Agreement, a new investment model developed transparently with the community, and designed to align us with founders who want to run a profitable business and never be forced to raise follow-on financing or sell their business.” Key elements:
Feenix Venture Partners: Feenix Venture Partners has a unique investment model that couples investment capital with payment processing services. Each of Feenix’s portfolio companies receives an investment in debt or equity and utilizes a subsidiary of Feenix as its credit card payment processor (“Feenix Payment Systems”). The combination of investment capital and credit card processing (CCP) fees creates a “win-win” partnership for investors and portfolio companies. The credit card processing data provides the investor with real-time sales transparency and the CCP fee margin provides the investor high current income, with equity-like upside and significant recovery for downside protection. Additionally, portfolio companies are able to access competitive and often non-dilutive financing by monetizing an unavoidable expense that is being paid to its current processors, thus yielding a mutual benefit for both parties.
Feenix focuses on companies in the consumer space across a number of industry verticals including: multi-unit Food & Beverage operators, hospitality, managed workspace (office or food halls), location-based entertainment venues, and various direct to consumer online companies. Their average check size is between $1-3 million, with multi-year term and competitive interest rates for debt. Additionally, Feenix typically needs fewer financial covenants and can provide quicker turnaround for due diligence with the benefit of transparency they receive by tracking credit card sales activity. 10% of Feenix’s portfolio companies have received VC equity prior to their financing.
Founders First Capital Partners: “Founders First Capital Partners, LLC is building a comprehensive ecosystem to empower underrepresented founders to become leading premium wage job creators within their communities. We provide revenue-based funding and business acceleration support to service-based small businesses located outside of major capital markets such as Silicon Valley and New York City.”
“We focus our support on businesses led by women, ethnic minorities, LGBTQ, and military veterans, especially teams and businesses located in low to moderate income areas. Our proprietary business accelerator programs, learning platform, and growth methodologies transition these underserved service-based businesses into companies with $5 million to $50 million in recurring revenue. They are tech-enabled companies that provide high-yield investments for fund limited partners (LPs) that perform like bonds but generate returns on par with equity investments. Founders First Capital Partners defines these high performing organizations as Zebra Companies .”
“Each year, Founders First Capital Partners works with hundreds of entrepreneurs. Three tracks of pre-funding accelerator programs determine the appropriate level of funding and advisory support needed for each founder to achieve their desired expansion: 1) Fastpath for larger companies with $2 million to $5 million in annual revenue, 2) Founders Growth Bootcamp program for companies with $250,000 to $2 million in annual revenue, and 3) Elevate My Business Challenge for companies with $50,000 to $250,000 in annual revenue.”
“Founders First Capital Partners (FFCP) runs a 5-step process:
According to Kim Folson, Co-Founder, “Founders First Capital Partner (F1stcp) has just secured a $100M credit facility commitment from a major institutional impact investor. This positions F1stcp to be the largest revenue-based investor platform addressing the funding gap for service-based, small businesses led by underserved and underrepresented founders.”
GSD Capital: “ GSD Capital partners with early-stage SaaS founders to fund growth initiatives. We work with founding teams in the Mountain West (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming) who have demonstrated an ability to get sh*t done… We empower founders with a 30-day fundraising process instead of multiple months running a gauntlet. ”
“To best explain the process of RBF funding, let’s use an example. Pied Piper Inc needs funding to accelerate customer acquisition for its SaaS solution. GSD Capital loans $250,000 to Pied Piper taking no ownership or control of the business. The funding agreement outlines the details of how the loan will be repaid, and sets a “cap”, or a point at which the loan has been repaid. On a 3-year term, the cap amounts typically range from 0.4-0.6x the loan amount. Each month Pied Piper reviews its cash receipts and sends the agreed upon percentage to GSD. If the company experiences a rough patch, GSD shares in the downside. Monthly payments stop once the cap is reached and the loan is repaid. In a situation where Pied Piper’s revenue growth exceeds expectations, prepayment discounts are built into the structure, lowering the cost of capital.”
“Requirements for funding consideration:
Indie.VC: Part of the investment firm O’Reilly AlphaTech Ventures. See Indie VC’s Version 3.0 . “On the surface, our v3 terms are a fairly vanilla version of a convertible note with a few key variables to be negotiated between the investor and the founder: investment amount, equity option, and repurchase start date and percentage.”
Kapitus: Offers RBI among many other options. “Because this [RBI] is not a loan, there is no APR or compounded interest associated with this product. Instead, borrowers agree to pay a fixed percentage in addition to the amount provided.”
Lighter Capital: “Since 2012, we’ve provided over $100 million in growth capital to over 250 companies.” Revenue-based financing which “helps tech entrepreneurs get to the next level without giving up equity, board seats, or personal guarantees… At Lighter Capital, we don’t take equity or ask you to make personal guarantees. And we don’t take a seat on your board or make you write a big check if you’re having a down month.”
Novel Growth Partners: ” We invest using Revenue-Based Investing (RBI), also known as Royalty-Based Investing… We provide up to $1 million in growth capital, and the company pays that capital back as a small percentage (between 4% and 8%) of its monthly revenue up to a predetermined return cap of 1.5-2.2x over up to 5 years. We can usually provide capital in an amount up to 30% of your ARR. Our approach allows us to invest without taking equity, without taking board seats, and without requiring personal guarantees. We also provide tailored, tactical sales and marketing assistance to help the companies in our portfolio accelerate their growth.” Keith Harrington, Co-Founder & Managing Director at Novel Growth Partners, observes that he sees two categories of RBI:
He said, “We chose the structure we did because we think it’s easier to understand, for both LPs and entrepreneurs.”
Podfund: Focused on podcast creators. “We agree to provide funding and services to you in exchange for a percentage of total gross revenue (including ads/sponsorship, listener support, and ancillary revenue such as touring, merchandise, or licensing) per quarter. PodREV terms are 7-15% of revenue for 3-5 years, depending on current traction, revenue, and projected growth. At any time you may also opt to pay down the revenue share obligation in full, as follows:
RevUp: “Companies receive $100K-250K in non-dilutive cash… [paid back in a] 36-month return period with revenue royalty ranging from 4-8%, no equity .”
” Investment size : $1 – 5+ million, significant capacity for additional investment.
Return method: Small percentage of monthly revenue. Keeps capital lightweight and aligned to companies’ growth.
Capped return: 1.5 – 2x the investment amount. Company maximizes equity upside from growth.
Investment structure: 5-year horizon. Long-term nature maximizes flexibility of capital.”
Jim Toth writes, “One thing that makes us different is that we live inside of an $8Bn private equity firm. This means that we have a tremendous amount of resources that we can leverage for our companies, and our companies see us as being quite strategic. We also have the ability to continue investing behind our companies across all stages of growth.”
ScaleWorks: “We developed Scaleworks venture finance loans to fill a need we saw for our own B2B SaaS companies. No personal guarantees, board seats, or equity sweeteners. No prepayment penalties. Monthly repayments as a percentage of revenue.”
United Capital Source: Provides a wide structure of loans, including but not limited to RBI. The firm has provided more than $875 million in small business loans in its history, and is currently extending about $10m/month in RBI loans. Jared Weitz, Founder & CEO, said, “[Our] typical RBF client is $120K-$20M in annual revenue, with 4-200 employees. We only look at financials for deals over a certain size.
For smaller deals, we’ll look at bank statements and get a pretty good picture of revenues, expenses and cash flow. After all, since this is a revenue-based business loan, we want to make sure revenues and cash flow are consistent enough for repayment without hurting the business’s daily operations. When we do look at financials to approve those larger deals we are generally seeing a 5 to 30% EBITDA margin on these businesses.” United Capital Source was selected in the 2015 & 2017 Inc. 5000 Fastest Growing Companies List.
Note that none of the lawyers quoted or I are rendering legal advice in this article, and you should not rely on our counsel herein for your own decisions. I am not a lawyer. Thanks to the experts quoted for their thoughtful feedback. Thanks to Jonathan Birnbaum for help in researching this topic.
Does the traditional VC financing model make sense for all companies? Absolutely not. VC Josh Kopelman makes the analogy of jet fuel vs. motorcycle fuel. VCs sell jet fuel which works well for jets; motorcycles are more common but need a different type of fuel.
A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital.
I believe that Revenue-Based Investing (“RBI”) VCs are on the forefront of what will become a major segment of the venture ecosystem. Though RBI will displace some traditional equity VC, its much bigger impact will be to expand the pool of capital available for early-stage entrepreneurs.
This guest post was written by David Teten, Venture Partner, HOF Capital. You can follow him at teten.com and @dteten. This is part of an ongoing series on Revenue-Based Investing VC that will hit on:
RBI structures have been used for many years in natural resource exploration, entertainment, real estate, and pharmaceuticals. However, only recently have early-stage companies started to use this model at any scale.
According to Lighter Capital, “the RBI market has grown rapidly, contrasting sharply with a decrease in the number of early-stage angel and VC fundings”. Lighter Capital is a RBI VC which has provided over $100 million in growth capital to over 250 companies since 2012.
Lighter reports that from 2015 to 2018, the number of VC investments under $5m dropped 23% from 6,709 to 5,139. 2018 also had the fewest number of angel-led financing rounds since before 2010. However, many industry experts question the accuracy of early-stage market data, given many startups are no longer filing their Form Ds.
John Borchers, Co-founder and Managing Partner of Decathlon Capital, claims to be the largest revenue-based financing investor in the US. He said, “We estimate that annual RBI market activity has grown 10x in the last decade, from two dozen deals a year in 2010 to upwards of 200 new company fundings completed in 2018.”
Huron founder and CEO Matt Mullenax is hoping to build a big business around body wash.
“For us, the broader mission is A+ personal care for guys everywhere — not just guys in New York or guys in the Bay Area or guys in Los Angeles,” he said.
The startup has raised $1 million in seed funding from RXBAR founders Peter Rahal and Jared Smith, CXT Investments, and Lean Luxe founder M. Paul Munford.
Mullenax told me he became interested in this market after working as a finance and operations analyst at Bonobos, where he “fell in love with the [direct-to-consumer] model.” He also said he has personal experience with bad skin, but “couldn’t justify paying $75 a month for face wash.”
So the goal at Huron is to create products that can stack up against “brands on the shelves at Bloomingdale’s, Neiman Marcus or Nordstrom,” but without the costs and price markup associated with a big department store. The initial lineup includes body wash ($14), face wash ($14) and face lotion ($15), with plans for more products soon.
Consumers can buy Huron products individually, as part of a larger kit or via subscription. Mullenax said the Huron website is designed to be friendly and educational for men who don’t know a lot about personal care, but at the same time it doesn’t isn’t “forcing this guy into a subscription mechanism,” and instead allowing them “come to the site and just transact on a bottle of bodywash.”
As for the broader competitive landscape — which includes companies that started with razors or cologne but have broader ambitions in men’s personal care — Mullenax said, “The industry is becoming increasingly competitive, and it it should be, it’s a huge category.”
He argued that the market has room for more than just “one winner or two winners or five winners.” And in his view, Huron will be set apart with its “ability to create a brand with a tone of voice that resonates, with products that work, at a price point that makes senes for this guy.”
Now, a startup says its “out-of-the-box tools” can help protect customers’ privacy while also saving companies from themselves. How? With a software-as-a-service product that promises to help employees access the app data they need — and only the app data they need. Among the features the company, Internal, is offering, are search and filtering, auto-generated tasks and team queues, granular permissioning on every field, audit logs on every record and redacted fields for sensitive information.
Whether the startup can win the trust of enterprises is the biggest question for the company, which was created by Arisa Amano and Bob Remeika, founders who last year launched the blockchain technology company Harbor. The two also worked together previously at two other companies: Zenefits and Yammer.
All of these endeavors have another person in common, and that’s David Sacks, whose venture firm, Craft Ventures, has just led a $5 million round in Internal. Sacks also invested last year in Harbor; he was an early investor in Zenefits and took over during troubled times as its CEO for less than a year; he also founded Yammer, which sold to Microsoft for $1.2 billion in cash in 2012.
All of the aforementioned have been focused, too, on making it easier for companies to get their work done, and Amano and Remeika have built the internal console at all three companies, which is how they arrived at their “aha” moment last year, says Amano. “So many companies build their consoles [which allow users advanced use of the computer system they’re attached to] in a half-hearted way; we realized there was an opportunity to build this as a service.”
“Companies never dedicate enough engineers to [their internal consoles], so they’re often half broken and hard to use and they do a terrible job of limiting access to sensitive customer data,” adds Remeika. “We eliminate the need to build these tools altogether, and takes just minutes to get set up.”
Starting today, companies can decide for themselves whether they think Internal can help their employees interact with their customer app data in a more secure and compliant way. The eight-person company has just made the product available for a free trial.
Naturally, Amano and Remeika are full of assurances why companies can trust them. “We don’t store data,” says Amano. “That resides on the [customer’s] servers. It stays in their database.” Internal’s technology instead “understands the structure of the data and will read that structure,” offers Remeika, who says not to mistake Internal for an analytics tool. “Analytics tools commonly provide a high-level overview; Internal is giving users granular access to customer data and letting you debug problems.”
As for competitors, the duo say their most formidable opponent right now is developers who throw up a data model viewer that has complete access to everything in a database, which may be sloppy but happens routinely.
Internal isn’t disclosing its pricing publicly just yet, but it says its initial target is non-technical users, on operations and customer support teams, for example.
As for Harbor (we couldn’t help but wonder why they’re already starting a new company), they say it’s in good hands with CEO Josh Stein, who was previously general counsel and chief compliance officer at Zenefits (he was its first lawyer) and who joined Harbor in February of last year as its president. Stein was later named CEO.
In addition to Craft Ventures, Internal’s new seed round comes from Pathfinder, which is Founders Fund’s early-stage investment vehicle, and other, unnamed angel investors.
OKRs, or Objectives and Key Results, are a popular planning method in Silicon Valley. Like most of those methods that make you fill in some form once every quarter, I’m pretty sure employees find them rather annoying and a waste of their time. Ally wants to change that and make the process more useful. The company today announced that it has raised an $8 million Series A round led by Access Partners, with participation from Vulcan Capital, Founders Co-op and Lee Fixel. The company, which launched in 2018, previously raised a $3 million seed round.
Ally founder and CEO Vetri Vellore tells me that he learned his management lessons and the value of OKR at his last startup, Chronus. After years of managing large teams at enterprises like Microsoft, he found himself challenged to manage a small team at a startup. “I went and looked for new models of running a business execution. And OKRs were one of those things I stumbled upon. And it worked phenomenally well for us,” Vellore said. That’s where the idea of Ally was born, which Vellore pursued after selling his last startup.
Most companies that adopt this methodology, though, tend to work with spreadsheets and Google Docs. Over time, that simply doesn’t work, especially as companies get larger. Ally, then, is meant to replace these other tools. The service is currently in use at “hundreds” of companies in more than 70 countries, Vellore tells me.
One of its early adopters was Remitly . “We began by using shared documents to align around OKRs at Remitly. When it came time to roll out OKRs to everyone in the company, Ally was by far the best tool we evaluated. OKRs deployed using Ally have helped our teams align around the right goals and have ultimately driven growth,” said Josh Hug, COO of Remitly.
Vellore tells me that he has seen teams go from annual or bi-annual OKRs to more frequently updated goals, too, which is something that’s easier to do when you have a more accessible tool for it. Nobody wants to use yet another tool, though, so Ally features deep integrations into Slack, with other integrations in the works (something Ally will use this new funding for).
Since adopting OKRs isn’t always easy for companies that previously used other methodologies (or nothing at all), Ally also offers training and consulting services with online and on-site coaching.
Pricing for Ally starts at $7 per month per user for a basic plan, but the company also offers a flat $29 per month plan for teams with up to 10 users, as well as an enterprise plan, which includes some more advanced features and single sign-on integrations.
As businesses use an increasing variety of marketing software solutions, the goal around collecting all of that data is to improve customer experience. Simon Data announced a $30 million Series C round today to help.
The round was led by Polaris Partners . Previous investors .406 Ventures and F-Prime Capital also participated. Today’s investment brings the total raised to $59 million, according to the company.
Jason Davis, co-founder and CEO, says his company is trying to pull together a lot of complex data from a variety of sources, while driving actions to improve customer experience. “It’s about taking the data, and then building complex triggers that target the right customer at the right time,” Davis told TechCrunch. He added, “This can be in the context of any sort of customer transaction, or any sort of interaction with the business.”
Companies tend to use a variety of marketing tools, and Simon Data takes on the job of understanding the data and activities going on in each one. Then based on certain actions — such as, say, an abandoned shopping cart — it delivers a consistent message to the customer, regardless of the source of the data that triggered the action.
They see this ability to pull together data as a customer data platform (CDP). In fact, part of its job is to aggregate data and use it as the basis of other activities. In this case, it involves activating actions you define based on what you know about the customer at any given moment in the process.
As the company collects this data, it also sees an opportunity to use machine learning to create more automated and complex types of interactions. “There are a tremendous number of super complex problems we have to solve. Those include core platform or infrastructure, and we also have a tremendous opportunity in front of us on the predictive and data science side as well,” Davis said. He said that is one of the areas where they will put today’s money to work.
The company, which launched in 2014, is based in NYC. The company currently has 87 employees in total, and that number is expected to grow with today’s announcement. Customers include Equinox, Venmo and WeWork. The company’s most recent funding round was a $20 million in July 2018.
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).
WeTransfer, the Amsterdam-headquartered company that is best know for its file-sharing service, is disclosing a €35 million secondary funding round.
The investment is led by European growth equity firm, HPE Growth, with “significant” participation from existing investor Highland Europe. Being secondary funding — meaning that a number of shareholders have sold all or a portion of their holding — no new money has entered WeTransfer’s balance sheet.
We are also told that Jonne de Leeuw, of HPE, will replace WeTransfer co-founder Nalden on the company’s Supervisory Board. He joins Bas Beerens (founder of WeTransfer), Irena Goldenberg (Highland Europe) and Tony Zappalà (Highland Europe).
The exact financial terms of the secondary funding, including valuation, aren’t being disclosed. However, noteworthy is that WeTransfer says it has been profitable for 6 years.
“The valuation of the company is not public, but what I can tell you is that it’s definitely up significantly since the Series A in 2015,” WeTransfer CEO Gordon Willoughby tells me. “WeTransfer has become a trusted brand in its space with significant scale. Our transfer service has 50 million users a month across 195 countries, sharing over 1.5 billion files each month”.
In addition to the wildly popular WeTransfer file-sharing service, the company operates a number of other apps and services, some it built in-house and others it has acquired. They include content sharing app Collect (claiming 4 million monthly users), sketching tool Paper (which has had 25 million downloads) and collaborative presentation tool Paste (which claims 40,000 active teams).
“We want to help people work more effectively and deliver more impactful results, with tools that collectively remove friction from every stage of the creative process — from sparking ideas, capturing content, developing and aligning, to delivery,” says Willoughby.
“Over the past two years, we’ve been investing heavily in our product development and have grown tremendously following the acquisition of the apps Paper and Paste. This strengthened our product set. Our overarching mission is to become the go-to source for beautiful, intuitive tools that facilitate creativity, rather than distract from it. Of course, our transfer service is still a big piece of that — it’s a brilliantly simple tool that more than 50 million people a month love to use”.
Meanwhile, Willoughby describes WeTransfer’s dual revenue model as “pretty unique”. The company offers a premium subscription service called WeTransfer Plus, and sells advertising in the form of “beautiful” full-screen ads called wallpapers on Wetransfer.com.
“Each piece of creative is fully produced in-house by our creative studio with an uncompromising focus on design and user experience,” explains the WeTransfer CEO. “With full-screen advertising, we find that our users don’t feel they’re simply being sold to. This approach to advertising has been incredibly effective, and our ad performance has far outpaced IAB standards. Our advertising inventory is sought out by brands like Apple, Nike, Balenciaga, Adobe, Squarespace, and Saint Laurent”.
Alongside this, WeTransfer says it allocates up to 30% of its advertising inventory and “billions of impressions” to support and spotlight up-and-coming creatives, and causes, such as spearheading campaigns for social issues.
The company has 185 employees in total, with about 150 in Amsterdam and the rest across its U.S. offices in L.A. and New York.
Singapore-based budget hotel booking startup RedDoorz is tiny in comparison to fast-growing giant Oyo. But it is holding its ground and winning the trust of an ever growing number of investors.
On Monday, the four-year-old startup announced it has raised $70 million in Series C round, less than five months after it closed its $45 million Series B. The new round, which is ongoing, was led by Asia Partners and saw participation from new investors Rakuten Capital and Mirae Asset-Naver Asia Growth Fund.
The startup, which has raised $140 million to date, was seeing “tremendous interest from investors, so it is decided to do a back-to-back rounds,” said Amit Saberwal, founder and CEO of RedDoorz, in an interview with TechCrunch.
Regardless, the new funds will help RedDoorz fight SoftBank-backed Oyo, which is already aggressively expanding to new markets and making major investments.
RedDoorz operates a marketplace of “two-star, three-star and below” budget hotels, selling access to rooms to people. Currently it has 1,400 hotels on its network, said Saberwal.
The startup operates in 80 cities across Indonesia, Singapore, the Philippines and Vietnam, and plans to use the new capital to expand its network in its existing markets, said Saberwal. At least for the next one year, RedDoorz has no plans to expand beyond the four markets where it currently operates, he said.
“Anything in the accommodation is our playground. We have all kinds of properties. We have three-star hotels, some hostels, so we will continue to go deeper and wider moving forward,” he said.
More to follow shortly…
Businesses need to understand cause and effect: Someone did X and it increased sales, or they did Y and it hurt sales. That’s why many of them turn to analytics — but Bilal Mahmood, co-founder and CEO of ClearBrain, said existing analytics platforms can’t answer that question accurately.
“Every analytics platform today is still based on a fundamental correlation model,” Mahmood said. It’s the classic correlation-versus-causation problem — you can use the data to suggest that an action and a result are related, but you can’t draw a direct cause-and-effect relationship.
That’s the problem that ClearBrain is trying to solve with its new “causal analytics” tool. As the company put it in a blog post, “Our goal was to automate this process [of running statistical studies] and build the first large-scale causal inference engine to allow growth teams to measure the causal effect of every action.”
You can read the post for (many) more details, but the gist is that Mahmood and his team claim they can draw accurate causal relationships where others can’t.
The idea is to use this in conjunction with A/B testing — customers look at the data to prioritize what to test next, and to make estimates about the impact of things that can’t be tested. Otherwise, Mahmood said, “If you wanted to measure the actual impact of every variable on your website and your app — the actual impact it has on conversation — it could take you years.”
When I wrote about ClearBrain last year, it was using artificial intelligence to improve ad targeting, but Mahmood said the company built the new analytics technology in response to customer demand: “People didn’t just want to know who was going to convert, they wanted to know why, and what caused them to do so.”
The causal analytics tool is currently available to early access users, with plans for a full launch in October. Mahmood said there will be a number of pricing tiers, but they’ll be structured to make the product free for many startups.
In addition to launching the analytics tool in early access, ClearBrain also announced this week that it’s raised an additional $2 million in funding from Harrison Metal and Menlo Ventures.
Each month millions of Indians are coming online for the first time, making India the last great growth market for internet companies worldwide. But winning them presents its own challenges.
These users, most of whom live in small cities and villages in India, can’t speak English. Their interests and needs are different from those of their counterparts in large cities. When they come online, the world wide web that is predominantly focused on the English-speaking masses, suddenly seems tiny, Google executives acknowledged at a media conference last year. According to a KPMG-Google report (PDF) on Indian languages, there will be 536 million non-English speaking users using internet in India by 2021.
Many companies are increasingly adding support for more languages, and Silicon Valley giants such as Google are developing tools to populate the web with content in Indian languages.
But there is still room for others to participate. On Friday, a new startup announced it is also in the race. And it has already received the backing of Y Combinator (YC).
Lokal is a news app that wants to bring local news to hundreds of millions of users in India in their regional languages. The startup, which is currently available in the Telugu language, has already amassed more than two million users, Jani Pasha, co-founder of Lokal, told TechCrunch in an interview.
There are tens of thousands of publications in India and several news aggregators that showcase the top stories from the mainstream outlets. But very few today are focusing on local news and delivering it in a language that the masses can understand, Pasha said.
Lokal is building a network of stringers and freelance reporters who produce original reporting around the issues and current affairs of local towns and cities. The app is updated throughout the day with regional news and also includes an “information” stream that shows things like current price of vegetables, upcoming events and contact details for local doctors and police stations.
The platform has grown to cover 18 districts in South India and is slowly ramping up its operations to more corners of the country. The early signs show that people are increasingly finding Lokal useful. “In 11 of the 18 districts we cover, we already have a larger presence and reader base than other media houses,” Pasha said.
Before creating Lokal, Pasha and the other co-founder of the startup, Vipul Chaudhary, attempted to develop a news aggregator app. The app presented news events in a timeline, offering context around each development.
“We made the biggest mistake. We built the product for four to five months without ever consulting with the users. We quickly found that nobody was using it. We went back to the drawing board and started interviewing users to understand what they wanted. How they consumed news, and where they got their news from,” he said.
“One thing we learned was that most of these users in tier 2 and tier 3 India still heavily rely on newspapers. Newspapers still carry a lot of local news and they rely on stringers who produce these news pieces and source them to publications,” he added.
But newspapers have limited pages, and they are slow. So Pasha and the team tried to build a platform that addresses these two things.
Pasha tried to replicate it through distributing local news, sourced from stringers, on a WhatsApp group. “That one WhatsApp group quickly became one of many as more and more people kept joining us,” he recalls. And that led to the creation of Lokal.
Along the journey, the team found that classifieds, matrimonial ads and things like birthday wishes are still driving people to newspapers, so Lokal has brought those things to the platform.
Pasha said Lokal will expand to three more states in the coming months. It will also begin to experiment with monetization, though that is not the primary focus currently. “The plan is to eventually bring this to entire India,” he said.
A growing number of startups today are attempting to build solutions for what they call India 2 and India 3 — the users who don’t live in major cities, don’t speak English and are financially not as strong.
ShareChat, a social media platform that serves users in 15 regional languages — but not English — said recently it has raised $100 million in a round led by Twitter. The app serves more than 60 million users each month, a figure it wants to double in the next year.
Is there room for another social media platform? ShareChat, a four-year-old social network in India that serves tens of million of people in regional languages, just answered that question with a $100 million financing round led by global giant Twitter .
Other than Twitter, TrustBridge Partners, and existing investors Shunwei Capital, Lightspeed Venture Partners, SAIF Capital, India Quotient and Morningside Venture Capital also participated in the Series D round of ShareChat.
The new round, which pushes ShareChat’s all-time raise to $224 million, valued the firm at about $650 million, a person familiar with the matter told TechCrunch. ShareChat declined to comment on the valuation.
Screenshot of Sharechat home page on web
“Twitter and ShareChat are aligned on the broader purpose of serving the public conversation, helping the world learn faster and solve common challenges. This investment will help ShareChat grow and provide the company’s management team access to Twitter’s executives as thought partners,” said Manish Maheshwari, managing director of Twitter India, in a prepared statement.
ShareChat serves 60 million users each month in 15 regional languages, Ankush Sachdeva, co-founder and CEO of the firm, told TechCrunch in an interview. The platform currently does not support English, and has no plans to change that, Sachdeva said.
That choice is what has driven users to ShareChat, he explained. In the early days of the social media platform, the firm experimented with English language. It saw most of its users choose English as their preferred language, but this also led to another interesting development: Their engagement with the app significantly reduced.
“For some reason, everyone wanted to converse in English. There was an inherent bias to pick English even when they did not know it.” (Only about 10% of India’s 1.3 billion people speak English. Hindi, a regional language, on the other hand, is spoken by about half a billion people, according to official government figures.)
So ShareChat pulled support for English. Today, an average user spends 22 minutes on the app each day, Sachdeva said. The learning in the early days to remove English is just one of the many things that has shaped ShareChat to what it is today and led to its growth.
In 2014, Sachdeva and two of his friends — Bhanu Singh and Farid Ahsan, all of whom met at the prestigious institute IIT Kanpur — got the idea of building a debate platform by looking at the kind of discussions people were having on Facebook groups.
They identified that cricket and movie stars were popular conversation topics, so they created WhatsApp groups and aggressively posted links to those groups on Facebook to attract users.
It was then when they built chatbots to allow users to discover different genres of jokes, recommendations for phones and food recipes, among other things. But they soon realized that users weren’t interested in most of such offerings.
“Nobody cared about our smartphone recommendations. All they wanted was to download wallpapers, ringtones, copy jokes and move on. They just wanted content.”
So in 2015, Sachdeva and company moved on from chatbots and created an app where users can easily produce, discover and share content in the languages they understand. (Today, user generated content is one of the key attractions of the platform, with about 15% of its user base actively producing content.)
A year later, ShareChat, like tens of thousands of other businesses, was in for a pleasant surprise. India’s richest man, Mukesh Ambani, launched his new telecom network Reliance Jio, which offered users access to the bulk of data at little to no charge for an extended period of time.
This immediately changed the way millions of people in the country, who once cared about each megabyte they consumed online, interacted with the internet. On ShareChat people quickly started to move from sharing jokes and other messages in text format to images and then videos.
That momentum continues to today. ShareChat now plans to give users more incentive — including money — and tools to produce content on the platform to drive engagement. “There remains a huge hunger for content in vernacular languages,” Sachdeva said.
Speaking of money, ShareChat has experimented with ads on the app and its site, but revenue generation isn’t currently its primary focus, Sachdeva said. “We’re in the Series D now so there is obviously an obligation we have to our investors to make money. But we all believe that we need to focus on growth at this stage,” he said.
ShareChat also has many users in Bangladesh, Nepal and the Middle East, where many users speak Indian regional languages. But the startup currently plans to focus largely on expanding its user base in India.
It will use the new capital to strengthen the technology infrastructure and hire more tech talent. Sachdeva said ShareChat is looking to open an office in San Francisco to hire local engineers there.
A handful of local and global giants have emerged in India in recent years to cater to people in small cities and villages, who are just getting online. Pratilipi, a storytelling platform has amassed more than 5 million users, for instance. It recently raised $15 million to expand its user base and help users strike deals with content studios.
Perhaps no other app poses a bigger challenge to ShareChat than TikTok, an app where users share short-form videos. TikTok, owned by one of the world’s most valued startups, has over 120 million users in India and sees content in many Indian languages.
But the app — with its ever growing ambitions — also tends to land itself in hot water in India every few weeks. In all sensitive corners of the country. On that front, ShareChat has an advantage. Over the years, it has emerged as an outlier in the country that has strongly supported proposed laws by the Indian government that seek to make social apps more accountable for content that circulates on their platforms.
With all of the progress we’ve seen in deep learning tech in the past few years, it seems pretty inevitable that security cameras become smarter and more capable in regards to tracking, but there are more options than we think in how we choose to pull this off.
Traces AI is a new computer vision startup, in Y Combinator’s latest batch of bets, that’s focused on helping cameras track people without relying on facial recognition data, something the founders believe is too invasive of the public’s privacy. The startup’s technology actually blurs out all human faces in frame, only relying on the other physical attributes of a person.
“It’s a combination of different parameters from the visuals. We can use your hair style, whether you have a backpack, your type of shoes and the combination of your clothing,” co-founder Veronica Yurchuk tells TechCrunch.
Tech like this obviously doesn’t scale too great for a multi-day city-wide manhunt and leaves room for some Jason Bourne-esque criminals to turn their jackets inside out and toss on a baseball cap to evade detection. As a potential customer, why forego a sophisticated technology just to stave off dystopia? Well, Traces AI isn’t so convinced that facial recognition tech is always the best solution, they believe that facial tracking isn’t something every customer wants or needs and there should be more variety in terms of solutions.
“The biggest concern [detractors] have is, ‘Okay, you want to ban the technology that is actually protecting people today, and will be protecting this country tomorrow?’ And, that’s hard to argue with, but what we are actually trying to do is propose an alternative that will be very effective but less invasive of privacy,” co-founder Kostya Shysh tells me.
Earlier this year, San Francisco banned government agencies from the use of facial recognition software, and it’s unlikely that they will be the only city to make that choice. In our conversation, Shysh also highlighted some of the backlash to Detroit’s Project Green Light which brought facial recognition surveillance tech city-wide.
Traces AI’s solution can also be a better option for closed venues that have limited data on the people on their premises in the first place. One use case Shysh highlighted was being able to find a lost child in an amusement park with just a little data.
“You can actually give them a verbal description, So if you say, it’s a missing 10-year-old boy, and he had blue shorts and a white t shirt, that will be enough information for us to start a search,” Shysh says.
In addition to being a better way to promote privacy, Shysh also sees the technology as a more effective way to reduce the racial bias of these computer vision systems which have proven less adept at distinguishing non-white faces, and are thus often more prone to false positives.
“The way our technology works, we actually blur faces of the people before sending it to the cloud. We’re doing it intentionally as one of the safety mechanisms to protect from racial and gender biases as well,” Shysh says.
The co-founders say that the U.S. and Great Britain are likely going to be their biggest markets due to the high quantity of CCTV cameras, but they’re also pursuing customers in Asian countries like Japan and Singapore where face-obscuring facial masks are often worn and can leave facial tracking software much less effective.
The San Francisco-based company and former Battlefield finalist, which filed its IPO paperwork with the U.S. Securities and Exchange Commission on Thursday, earlier this month took the rare step of pulling the plug on one of its customers, 8chan, an anonymous message board linked to recent domestic terrorist attacks in El Paso, Texas and Dayton, Ohio, which killed 31 people. The site is also linked to the shootings in New Zealand, which killed 50 people.
8chan became the second customer to have its service cut off by Cloudflare in the aftermath of the attacks. The first and other time Cloudflare booted one of its customers was neo-Nazi website The Daily Stormer in 2017, after it claimed the networking giant was secretly supportive of the website.
Cloudflare, which provides web security and denial-of-service protection for websites, recognizes those customer cut-offs as a risk factor for investors buying shares in the company’s common stock.
“Activities of our paying and free customers or the content of their websites and other Internet properties could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and other third parties,” the filing said. “Even if we comply with legal obligations to remove or disable customer content, we may maintain relationships with customers that others find hostile, offensive, or inappropriate.”
Cloudflare had long taken a stance of not policing who it provides service to, citing freedom of speech. In a 2015 interview with ZDNet, chief executive Matthew Prince said he didn’t ever want to be in a position where he was making “moral judgments on what’s good and bad,” and would instead defer to the courts.
“If a final court order comes down and says we can’t do something… governments have tanks and guns,” he said.
But since Prince changed his stance on both The Daily Stormer and 8chan, the company recognized it “experienced significant negative publicity” in the aftermath.
“We are aware of some potential customers that have indicated their decision to not subscribe to our products was impacted, at least in part, by the actions of certain of our paying and free customers,” said the filing. “We may also experience other adverse political, business and reputational consequences with prospective and current customers, employees, suppliers, and others related to the activities of our paying and free customers, especially if such hostile, offensive, or inappropriate use is high profile.”
Cloudflare has also come under fire in recent months for allegedly supplying web protection services to sites that promote and support terrorism, including al-Shabab and the Taliban, both of which are covered under U.S. Treasury sanctions.
In response, the company said it tries “to be neutral,” but wouldn’t comment specifically on the matter.