Electric vehicle startup Fisker Inc. said Wednesday it has raised $50 million, much needed capital that will go toward funding the next phase of engineering work on the company’s all-electric luxury SUV.
The startup is aiming to launch the Fisker Ocean SUV in 2022.
The Series C funding round was led by Moore Strategic Ventures LLC, the private investment vehicle of Louis M. Bacon, the billionaire hedge fund manager.
“Since we first showed the car at CES earlier this year, reaction from customers and investors has been extremely positive,” Fisker Inc. Chairman and CEO Henrik Fisker said in a statement. “We are radically challenging the conventional industry thinking around developing and selling cars and this capital will allow us to execute our planned timeline to start producing vehicles in 2022.”
The company is also beefing up its executive lineup to help push the project along. Fisker said it has hired Burkhard Huhnke as its CTO. Huhnke was the former vice president of e-mobility for Volkswagen America and vice president of automotive at chipmaker Synopses.
As CTO, Huhnke will spread his time between the company’s R&D work in Los Angeles and its new Fisker Innovation Lab in Silicon Valley.
Building a car company isn’t easy. Just ask Fisker. The well-known automotive designer, who was behind the Aston Martin V8 Vantage, Aston Martin DB9 and BMW Z8 among others, launched a startup called Fisker Automotive that aimed to produce a luxury plug-in hybrid electric vehicles. The flagship vehicle, the Fisker Karma, debuted at the 2008 North American International Auto Show, and first deliveries were in 2011. But the company ran into numerous challenges and production was suspended in November 2012 and ended in bankruptcy a year later.
China’s Wanxiang Group purchased what was left of Fisker in 2014 and launched a new company called Karma Automotive . On a side note: Karma, which has had its own financial struggles, also announced Wednesday it had raised $100 million.
This time around, Fisker is focused on an SUV. The Fisker Ocean, which was officially revealed in January at CES 2020, starts at $37,499 before applying any federal income tax credit or state incentives.
The Colombian trucking and logistics services startup Liftit has raised $22.5 million in a new round of funding to capitalize on its newfound traction in markets across Latin America as responses to the COVID-19 epidemic bring changes to the industry across the region.
“We’re focusing on the five countries that we’re already in,” says Liftit chief executive Brian York.
The company recently hired a head of operations for Mexico and a head of operations for Brazil as it looks to double down on its success in both regions.
Funding for the round was led by Cambridge Capital and included investments from the new Latin American focused firm H20 Capital along with AC Ventures, the venture arm of the 2nd largest coca-cola bottler in Latam; 10x Capital, Banyan Tree Ventures, Alpha4 Ventures, the lingerie brand Leonisa; and Mexico’s largest long haul trucking company, Grupo Transportes Monterrey. Individual investor, Jason Radisson the former chief operating officer of the on-demand ride hailing startup 99, also invested.
The new capital comes on top of Liftit’s $14.3 million Series A from some of the region’s top local investors. Firms like Monashees, Jaguar Ventures and NXTP Ventures all joined the International Finance Corp. in financing the company previously and all returned to back the company again with its new funding.
Investors likely responded to the company’s strong performance in its core markets. Already profitable in Chile and Colombia, Liftit expects to reach profitability across all of its operations before the end of the year. That’s despite the global pandemic.
Of the 220 contracts the company had with shippers half of them went to zero and the other half spiked significantly, York said. While Liftit’s major Colombian customer stumbled, new business, like Walmart, saw huge spikes in deliveries and usage.
“Managing truck drivers is incredibly difficult, and trucking, in our opinion, is not on demand,” said York. “At the end of the day the trucking market in all of Latin America is a majority of independent owners. They’re not looking for on-demand work… they’re looking for full time work.”
Less than one percent of the company’s deliveries come from on-demand orders, instead, it’s a service comprised of scheduled shipments with optimized routes and efficiencies that are bringing customers to Liftit’s virtual door.
“We do scheduled trucking delivery so we integrate with existing systems that shippers have and start planning how many trucks they’re going to need and the routes they’re going to take and … tee it up exactly what is going to happen regardless what the traffic conditions are so we have been able to reduce the delivery times for the trucks,” said York.
At first glance, Colvin — which recently announced that it has raised a $15 million Series B — might look like just another flower and plant delivery company, but co-founder and CEO Andres Cester said the startup has a much grander vision.
“We were born with the ambition the company that would redesign global flower trade,” he said.
Apparently, when Cester and his co-founder/COO Sergi Bastardas started researching the flower supply chain, they found an industry that was both “fragmented” in terms of growsers and sellers, but also surprisingly centralized, with the Aalsmeer Flower Auction in the Netherlands accounting for 77% of all flower bulbs sold globally.
With all the middlemen, Cester said flowers end up being more expensive (with the growers getting a smaller share of the overall payment), and it takes longer for the flowers to reach the consumer.
So the startup created a marketplace where consumers are buying flowers from straight the growers, with Colvin as the only intermediary. That results in average savings of 50% to 100% compared to online competitors, Cester said. (For example, the bouquets featured on the Colvin homepage all cost about €33 or €34).
And while the flower business is hurting overall due to the COVID-19 pandemic, Bastardas said consumers are turning to online options, with Colvin seeing a fourfold sales increase year-over-year, and delivery volumes worth $1 million in a single day. The challenge, he said, has been making sure to deliver those flowers within the promised time window.
Image Credits: Colvin
Cester said Colvin started by selling directly to consumers because it was a good way to build the supply from growers, and that consumer sales should a become a profitable, “cash-generating business.” However, the company’s big focus moving forward is building out its sales to flower wholesalers, who in turn sell to the retailers.
“We’re envisioning the B2B part of the business is going to drive most of the returns and valuation,” Bastardas added.
Colvin was founded in Spain and currently operates in Spain, Italy, Germany and Portugal. There are no plans to come to the U.S. anytime soon, but Cester said, “We believe that if we really want to … redesign how the flower industry works, we’re going to have to land in U.S. sooner or later.”
The startup has now raised a total of $27 million. The new round was led by Italian investment fund Milano Investment Partners, with participation from P101 sgr and Samaipata.
And if you’re wondering about the name, Bastardas said the company was named for civil rights pioneer Claudette Colvin, who was arrested in several months before Rosa Parks in Montgomery, Alabama for refusing to give up her bus seat to a white person.
It’s an incongruous choice for a flower startup, but Bastardas said the founders took inspiration from Colvin’s story and the idea that “from several small actions, we can really change an industry.”
If necessity is the mother of invention, then new business owners are getting very inventive in the ways in which they access cash. Relying on some long-tested and some new avenues to raise money, entrepreneurs are finding more ways to get public market cash faster than they would have in the past.
Whether it’s from Reg A crowdfunding dollars, Special Purpose Acquisition Companies (SPACs) or direct listings, these somewhat arcane and specialized financing vehicles are making a comeback alongside a rise in new funding mechanisms to get to market quickly and avoid the dilution that comes from private market rounds (especially since those rounds are likely to come at a reduced valuation given market conditions).
Some of these tools have existed for a while and are newly popular in an era where retail investors are driving much of the daily fluctuations of the public markets. Wall Street institutions are largely maintaining their conservative postures with regard to new offerings, so secondary market retail volume growth is outpacing institutional. Retail investors want into these new issues and are pouring into the markets, contributing to huge pops to new public offerings for companies like Lemonade this Thursday and creating an environment where SPACs and crowdfunding campaigns can flourish.
The rise of zero-commission brokerages and the popularization of fractional trading led by the startup Robinhood and adopted by every one of the major online brokers including Charles Schwab, TD Ameritrade, E-Trade and Interactive Brokers has created a stock market boom that defies the underlying market conditions in the U.S. and globally. For instance, daily trades on Robinhood are up 300% year-over-year as of March 2020.
According to data from the BATS exchange, the total trade count in the U.S. was up 71% and May trading was up more than 43% over 2019. Meanwhile, E-Trade daily average revenue trades posted a 244% increase in May over last year’s numbers.
The appetite for new issues is growing and if many of the largest venture-backed companies are holding off on going public, smaller names are using SPACs to access public capital and reach these new investors.
A deep tech startup building cryptographic solutions to secure hardware, software, and communications systems for a future when quantum computers may render many current cybersecurity approaches useless is today emerging out of stealth mode with $7 million in funding and a mission to make cryptographic security something that cannot be hackable, even with the most sophisticated systems, by building systems today that will continue to be usable in a post-quantum future.
PQShield (PQ being short for “post-quantum”), a spin out from Oxford University, is being backed in a seed round led by Kindred Capital, with participation also Crane Venture Partners, Oxford Sciences Innovation and various angel investors, including Andre Crawford-Brunt, Deutsche Bank’s former global head of equities.
PQShield was founded in 2018, and its time in stealth has not been in vain.
The startup claims to have the UK’s highest concentration of cryptography PhDs outside academia and classified agencies, and it is one of the biggest contributors to the NIST cybersecurity framework (alongside academic institutions and huge tech companies), which is working on creating new cryptographic standards, which take into account the fact that quantum computing will likely make quick work of breaking down the standards that are currently in place.
“The scale is massive,” Dr Ali El Kaafarani, a research fellow at Oxford’s Mathematical Institute and former engineer at Hewlett-Packard Labs, who is the founder and CEO of PQShield said of that project. “For the first time we are changing the whole of public key infrastructure.”
And according to El Kaafarani, the startup has customers — companies that build hardware and software services, or run communications systems that deal with sensitive information and run the biggest risks from being hacked.
They include entities in the financial and government sectors that it’s not naming, as well as its first OEM customer, Bosch. El Kaafarani said in an interview that it is also in talks with at least one major communications and messaging provider exploring more security for end-to-end encryption on messaging networks. Other target applications could include keyless cars, connected IoT devices, and cloud services.
The gap in the market the PQShield is aiming to address is the fact that while there are already a number of companies exploring the cutting edge of cryptographic security in the market — they include large tech companies like Amazon and Microsoft, Hub Security, Duality, another startup out of the UK focused on post-quantum cryptography called Post Quantum and a number of others — the concern is that quantum computing will be utilised to crack even the most sophisticated cryptography such as the RSA and Elliptic Curve cryptographic standards.
El Kaafarani says that PQShield is the first startup to approach that predicament with a multi-pronged solution aimed at a variety of use cases, including solutions that encompass current cryptographic standards and provide a migration path the next generation of how they will look — meaning, they can be commercially deployed today, even without quantum computers being a commercial reality, but in preparation for that.
“Whatever we encrypt now can be harvested, and once we have a fully functioning quantum computer people can use that to get back to the data and the sensitive information,” he said.
For hardware applications, it’s designed a System on Chip (SoC) solution that will be licensed to hardware manufacturers (Bosch being the first OEM). For software applications, there is an SDK that secures messaging and is protected by “post-quantum algorithms” based on a secure, Signal-derived protocol.
Thinking about and building for the full spectrum of applications is central to PQShield’s approach, he added. “In security it’s important to understand the whole ecosystem since everything is about connected components.”
Some sectors in the tech world have been especially negatively impacted by the coronavirus and its consequences, a predicament that has been exacerbated by uncertainties over the future of the global economy.
I asked El Kaafarani if that translated to a particularly tricky time to raise money as a deep tech startup, given that deep tech companies so often work on long-term problems that may not have immediate commercial outcomes.
Interestingly, he said that wasn’t the case.
“We talked to VCs that were interested in deep tech to begin with, which made the discussion a lot easier,” he said. “And the fact is that we’re a security company, and that is one of the areas that is doing well. Everything has become digitised, and we have all become more heavily reliant on our digital connections. We ultimately help make the digital world more secure. There are people who understand that, and so it wasn’t too difficult to talk to them and understand the importance of this company.”
Indeed, Chrysanthos Chrysanthou, partner at Kindred Capital, echoed that sentiment:
“With some of the brightest minds in cryptography, mathematics and engineering, and boasting world-class software and hardware solutions, PQShield is uniquely positioned to lead the charge in protecting businesses from one of the most profound threats to their future,” he said. “We couldn’t be happier to support the team as it works to set a new standard for information security and defuse risks resulting from the rise of quantum.”
GoHealth, a Chicago-based company that provides consumers with a digital portal to help them select insurance products, set an initial price range for its IPO today. The firm intends to price its equity between $18 to $20 per share in its debut.
As the company expects to sell 39.5 million shares in the offering, its IPO haul is huge. At the low-end of its range, GoHealth would raise $711 million, a figure that rises to $790 million at other end of its pricing spectrum. Including the 5.925 million shares the company will offer its underwriting team, its fundraise swells to between $817.65 million and $908.5 million.
Valuing the company at its IPO price range is a bit tough, as the firm was previously majority-sold to a buyout firm called Centerbridge in a deal that valued the firm at what Reuters reported as a $1.5 billion price-tag in 2019 (others confirmed the price). That transaction turned the company’s organization, and shareholding structure, into a muddle.
Parts of its shareholding structure are simple. The firm’s Class A shares, for example, at the top end of its IPO price, are worth around $1.7 billion, including equity offered to underwriters. So, regardless of what happens with its other interests and shares, the IPO looks set to be a win for Centerbridge.
Next, there are several hundred million Class B shares that come with votes, but no “economic interest in GoHealth, Inc.” And, finally, there are LLC interests in the company, which correspond with Class B shares. Holders of LLC interests can swap them for “newly-issued shares of our Class A common stock on a one-for-one” when they’d like.
So, how does that all square out? When we properly count all the shares for the firm and apply its IPO price range, GoHealth could be worth between $5.6 billion and $6.3 billion, figures that we are glad other publications arrived at as well.
That’s a big price tag, but one befitting a company looking to raise $711 million to $908.5 million in its public debut.
In Q1 2020, GoHealth posted $141.0 million in revenue, and net income of $1.4 million. Not a fat profit margin to be sure, but it did make money in the period, which is always popular, if out-of-date in today’s IPO market.
The company has grown nicely in recent years, with its S-1 filing touting 139% “pro forma growth” from 2018 to 2019. That’s great, given that GoHealth has at least some history of making money as well.
Turning to the most recent quarter, however, we find some red ink. In the quarter ending June 30, 2020:
How investors will parse all that out and place a proper valuation on the firm is their job; have fun, ya’ll.
Sure, GoHealth raised capital while it was a private company, and, sure, its business is digital. But it’s not really the core substance of TechCrunch’s coverage, namely startups. The company is around 19 years old, for heaven’s sake.
But what matters for our purposes is that earlier this year there was a boom in insurance marketplaces raising capital, leading TechCrunch to write a piece entitled “Why VCs are dumping money into insurance marketplaces.” GoHealth is a related entity to those younger companies. If it has a good IPO, that’s good for its smaller brethren. If it struggles, or only attracts a slim, unattractive multiple, it could partially chill the fundraising climate for companies looking to follow in its footsteps.
As IPO season continues, another venture-backed tech company is moving closer toward going public. This week nCino filed an updated S-1 filing, providing an initial price range for its equity of $22 to $24 per share.
Indeed, nCino, a fintech startup that provides operating software to banks, intends to sell 7.625 million shares in its debut, worth $167.75 million to $183 million at those prices. Including shares offered to its underwriters, its haul grows to between $192.9 million and $210.5 million.
Discounting the extra shares, nCino is worth between $1.96 billion to $2.14 billion at its current price range.
The startup’s software is what nCino calls a “bank operating system,” providing banking software to help financial entities with lending, customer resource management, account opening and more. It’s a rich space for innovation, given the banking industry’s complexity and wealth. Smaller startups are also working along related lines.
Normally at this point in an IPO process we compare the debuting company’s valuation range with its final private valuation. However, it’s hard to find out what nCino was worth. PitchBook and Crunchbase are bare regarding its last private round, as are other data sources we checked.
Notably, nCino has no preferred stock, so spelunking through different series of preferred equity sourced from S-1 data wasn’t possible. However, the company was healthy — and therefore, valuable — enough to raise more than $130 million across two rounds in 2018 and 2019, including an $80 million round from last October led by Chip Mahan and T. Rowe Price.
Regardless of where nCino priced toward the end of its life as a private company, its IPO is a likely win for both Salesforce and Insight Partners. The corporate venture arm of Salesforce and the well-known venture group own 13.2% and 46.6%, respectively, of nCino’s equity before IPO shares are counted; expected ownership for the two groups falls to 12.1% and 42.6%, respectively, when including anticipated IPO equity.
According to Crunchbase data, Insight Partners led nCino’s Series B and C in 2014 and 2015, while Salesforce Ventures led its $51.5 million 2018 round; Salesforce also took part in several of the company’s early rounds, helping to explain its double-digit stake in the firm.
Modern software companies, often called SaaS firms, set new valuation records this week on the public markets following earlier highs set in Q2. Their performance hints that nCino could find warm welcome from public investors.
Does that fact fit with the valuation that the above-detailed pricing indicates that nCino may achieve? Annualizing the company’s Q1 (the April 30, 2020 period) revenue results, nCino’s $178.9 million run rate would give it a revenue multiple of 11x to 12x at its expected IPO prices, a somewhat modest result by current standards.
Indeed, as nCino grew about 50% from Q1 2019 to Q1 2020, it feels light. The firm’s GAAP losses are slim compared to revenue as well for a SaaS business, though the company’s operating cash burn did grow from $4.6 million in its fiscal year ending January 31, 2019 to $9.0 million in its next fiscal year. Its numbers are mostly good, with some less-than-perfect results. Still, given its growth rate, an 11-12x revenue multiple feels modest; that figure rises, of course, if we use a trailing revenue figure instead of our annualized number.
It would not be a shock, then, if nCino targets a higher price interval for its shares before it formally prices. The firm is expected to price next Tuesday and trade the next day, the same time frame as GoHealth. More when we have it.
K4Connect, a startup focused on bringing new technologies like voice assistance, home automation, digital messaging and more to older adults and those living with disabilities, has closed on $21 million in Series B funding. The B round had originally wrapped in October 2018, but was extended with the recent addition of $7.7 million led by Forte Ventures.
Others taking part in the round include existing investors Sierra Ventures, Intel Capital, AXA Venture Partners, the Ziegler Link•Age Fund, Revolution’s Rise of the Rest, Topmark Partners (formerly Stonehenge Growth Equity Partners) and Traverse. As a result of the new funding, Forte Ventures’ Louis Rajczi will join the startup’s board. To date, K4Connect has raised $31 million in venture funding.
Image Credits: K4Connect
Notably, the additional funds were raised amid the coronavirus pandemic, which has been disproportionately impacting older adults in care facilities, cutting off their communication from loved ones and disrupting their daily activities.
The K4Connect platform, which today serves over 800 continuing care, independent living and assisted living communities across the U.S., can help to address many of the challenges these communities are now facing.
The startup was co-founded in 2013 by Scott Moody, the entrepreneur whose biometrics company AuthenTec sold to Apple, where it became the basis for Touch ID.
Now K4Connect’s CEO, Moody had moved to Raleigh, N.C. to retire, but soon realized he still had energy left to start another company. Originally, the startup’s focus had been on bringing smart home technologies together through what’s now K4Connect’s patented operating system, FusionOS. But the team hadn’t initially narrowed in on a particular market.
That changed when Moody met a man, Eric, who was an advocate for the homeless and living with MS. He told the founder that when he wakes up in the morning, he has the energy for about a thousand good steps during his day — and how he uses those steps defines the quality of his life. He said the smart home tech K4Connect was developing could help him make his life better.
Moody immediately pivoted the company to redirect its focus on serving those in similar situations, which didn’t just include individuals living with disabilities but also the broader senior market.
Image Credits: K4Connect
Today, the FusionOS-powered platform integrates a suite of solutions designed for residents in independent or assisted living facilities as well as other care facilities. This includes tools to stay connected to their families through voice and video messaging, as well as those for accessing a digital resident directory, playing games and staying informed on the latest community news — ranging from COVID-19 updates to daily meal menus to updated visitation policies, or anything else the facility wants to broadcast.
For the facilities who purchase the Software-as-a-Service (SaaS) solution for their communities, there are other productivity tools they can use, like those for event management, resident surveys, resident and family management, communications, prospect communications and more. Due the coronavirus outbreak, K4Connect is even developing an expanded video chat service that will allow residents to video call staff for their requests, instead of having staff enter their rooms.
Another key aspect to K4Connect’s solution is its smart home automation functionality.
The company provisions Alexa devices for residents, so they don’t have to configure devices themselves — they just plug them in. It also supports other home automation devices like smart thermostats, smart lights, motion sensors, sleep tracking devices and more.
This is all managed by way of the company’s “K4Community” solution powered by the underlying FusionOS technology. Residents can access this as an app on their own smartphones, on pre-provisioned tablets or even through digital signage in the facility itself.
The SaaS solution is priced based on per-resident basis and the cost depends on which modules the facility wants to use in their own setup. This can range from a few dollars per month per resident to tens of dollars per month per resident, Moody says, and includes support.
Image Credits: K4Connect
As it turns out, K4Connect had a bit of a head start in terms of working on solutions more specifically designed to meet the needs of its communities amid the coronavirus outbreak, thanks to advice from its investors.
“Having investors like Intel and AXA did provide a wider perspective,” says Moody. “I figured, look, they’re really concerned. They’re seeing this issue from a wider geographic perspective than we are,” he explains.
Moody already knew that even the flu impacted older adults more than the general population. Due to K4Connect’s market of seniors, he multiplied what investors were saying could be the impact of coronavirus by a much larger factor.
“We kind of saw it coming,” Moody admits. “Many people were not completely bought in yet at the end of February. But just at the start of March, we launched something called ‘Project COVID 911.’ I just thought it was going to have a significant impact on the economy, but more importantly, the people we serve. And we had to be in a position to react and support,” he adds.
“If I was wrong, then we were going to be more prepared. And if I was right, then we would be in a situation where we can actually help serve people,” says Moody.
K4Connect adjusted its roadmap to focus on specific areas, like communications, content delivery, and pre-provisioning the Alexa Dot speakers, in order to limit time spent installing in residents’ rooms, among other things. Today, its solution offers features like resident-to-resident video chat for those now stuck in their rooms, tools for booking time slots in the dining area for facilities limiting large groups, access to livestreamed content — like those yoga classes you can’t attend in person — and more.
With the added funding, K4Connect, now a team of 57 full time, plans to further expand into the senior market, including not only those in facilities and senior communities, but also those living in affordable housing on their own. The team is actively developing solutions for this market segment, Moody says.
“We are incredibly fortunate in our investor relationships in that they not only believe in our vision but equally value our mission,” Moody said, in a statement about the new funding. “Forte Ventures is a prime example of that relationship and we’re proud to welcome them to the bench of our valued investors. With their support, and all of our investors, we’re continuing to accelerate to serve as many older adults through technology as possible.”
Teal, a platform that looks to help people land jobs that they love, has closed a $5 million seed round, which was led by Flybridge Capital, with participation from Lerer Hippeau, Corigin Ventures, Aleph, Oceans Ventures, Hight Output, AVG Basecamp, and Kairos Angels.
Teal launched in November of 2019 with a system that did all of the heavy lifting for people seeking jobs, including resume consultations, searching listings, and sending application information to the right people. Essentially, Teal handled everything but the interview.
Since launch, the company has made a slight pivot to a product that’s more scalable, called Career Assist.
Fano explained that, with the original product (called Career Agent), there was a group of people who were very clear on what they wanted and saw great success on the platform. But there was also a group of people who were unsure about their career path that Teal was spending a tremendous amount of time and energy on, and they still weren’t seeing success.
“There was something kind of flawed in this model in that the people that want us the most and will pay us for the longest are going to be the least satisfied,” said Fano, adding that Career Agent was built more for job-hopping than helping people who were unemployed find a job. “So we decided to take all the learnings we’ve gotten through Career Agent and understand where things repeat and where there are inefficiencies that don’t get identified on an individual basis. When you do that for many people, you can start to identify those patterns.”
Career Assist is a curriculum that allows cohorts (of 20-30 people) to learn the best possible process for finding and landing a job they want. It includes a four-week workshop (eight classes in total) guided by experts who lead live sessions around everything from writing a resume to how to send in that resume (to the right person) to interview skills.
According to cofounder and CEO Dave Fano, applying for a job through a website is one of the worst things you can do. Instead, applicants should find the head of recruiting or HR and send them a direct email. There are also plenty of tactics, gleaned from the sales playbook, that increase an applicant’s chances of hearing back on an email.
Teal looks not only to give job-seekers a better, more interactive playbook for landing a job, but also pairs its members with other members who are going through the same thing, to offer emotional support and empathy during a time where people desperately need it.
Career Assist was originally launched for free, but has since moved to a paid model, costing users $149 for full access to the four-week program. Since April, more than 200 people have landed new jobs after going through the course.
Fano, a serial entrepreneur who sold his first company, CASE, to WeWork, has a much broader vision for Teal than getting a job. There are many situations over the course of a person’s career where they can benefit from guidance and expertise, such as negotiating contracts, asking for a promotion or a raise, or resigning.
Teal wants to stay with workers throughout the entirety of their career to help them navigate these more challenging situations.
Teal plans on using the funding to continue growing the team, which is currently at 12 people, with a 50/50 split between men and women.
Fano says that one of the greatest challenges for the company is also one of its biggest opportunities. He explained that most people think they need an individual, bespoke career coach because of the general complexity of individual careers.
Fano believes that by combining resources that exist with data from its existing user base, Teal can cover a broader set of situations and circumstances for people than an individual coach may be able to while still being able to give specific advice from this collective data set.
“Building up that data set is one of the bigger challenges, and that’s why these things don’t exist,” said Fano. “But that’s also why we’re taking the approach that we are, focusing on things that don’t scale, and so far we’ve seen that people are very willing to interact with us because we’ve shown we’ve got their best interest at heart.”
He added that the company has no interest in becoming a B2B tool that sells into the HR department, but rather wants to focus on the end-consumer.
Permutive is announcing that it has raised $18.5 million in Series B funding, as the London-based startup works to help online publishers make money in a changing privacy landscape.
CEO Joe Root, who co-founded the company with CTO Tim Spratt, noted that publishers are facing increasing regulation while web browsers are phasing out support for third-party cookies — all good news for privacy advocates, but with a real downside for publisher ad revenue (blocking cookies causes an average 52% decline in ad revenue, according to a Google study last year).
Permutive tries to address this issues by allowing publishers to utilize their own first-party data more effectively. Root estimated that without cookies, web visitors break down to 10% who are logged in and authenticated, while 90% are anonymous, and he said, “We use the insight and understanding from that 10% to make predictions about that 90%.”
So from a single anonymous pageview, Permutive can collect 20 or 30 data points about visitor behavior, which it then uses to try to project who that visitor might be and what they might be interested in. Root also noted that the company’s technology relies on edge computing, allowing it to process data more quickly, which is crucial for publishers who may only have a few seconds in which to show a visitor an ad.
Joe Root – Permutive
If you’re wondering whether this approach has any privacy or regulatory implications of its own, Root suggested Permutive spends “a lot of time making sure we are ideologically aligned with [European privacy regulation] GDPR and ideologically aligned with the browsers.”
For one thing, “We don’t believe data should be portable across applications,” which is why Permutive is focused on helping publishers use their own data. For another, Root said Permutive is committed to “the destruction of identity in the adtech ecosystem.”
“Using data isn’t a problem — it’s when you attach data to an identity,” he added. So without identity, “Instead of saying, ‘Here is an ad for Anthony, look up everything you know from Anthony,’ we say, ‘Here is an ad for a user interested in tech media.’ One model leaks data and the other doesn’t.”
Root also suggested that these shifts will allow ad dollars to move back to the premium publishers who have more engagement with and data from their readers — publishers who he argued have “up until now funded the long tail” with their cookie-based data.
This approach is reflected in the publishers Permutive already works with, including BuzzFeed, Penske, The Financial Times, The Guardian, Business Insider, The Daily Telegraph, The Economist, Bell Media, News UK and MailOnline.
Founded in 2014, Permutive previously raised $11.5 million, according to Crunchbase. The Series B was led by Octopus Ventures with participation from EQT Ventures and previous investors.
“Today, Permutive is the UK category leader in its field and is beating billion-dollar global businesses on a consistent basis in trial processes,” said Will Gibbs of Octopus Ventures in a statement. “The team has hired many incredible people and is now ready to replicate the success seen in the U.K. in the U.S. Given the evolving regulatory and customer priorities, Permutive’s technology could be genuinely pioneering in its field.”
The startup is also announcing that it has hired Aly Nurmohamed (former global managing director for publisher partners at Criteo) as its general manager for publishing and Steve Francolla (former head of global publisher strategy at LiveRamp) as head of partnerships.
In 2015, Andy Rink debuted Lully at a Y Combinator demo day. The product was meant to help children overcome night terrors. Lully had plans to launch into new markets, such as bed wetting, but clinical trials found that the new products simply weren’t effective enough for the company to feel comfortable launching, resulting in the company winding down and returning money to investors.
Ahead is a platform that looks to help patients suffering from ADHD, depression and anxiety get the medical assistance they need through a combination of telehealth and in-person visits with providers. The company has its own clinics, and employs its healthcare providers as full-time employees.
While most telehealth platforms contract out their HCPs, Ahead believes that it’s in the best interest of both the providers and the patients to bring HCPs in house.
“We really care about the patient experience, and we care about having providers who really buy into our vision,” said Rink. “We think the best way to get a mental health condition treated is by having a close relationship with your provider. So, even though it’s more difficult, we’ve taken the stance of hiring only full-time providers to really deliver on that.”
Ahead focuses primarily on the psychiatrist-patient relationship for conditions that are often treated with medication, rather than talk therapy. Ahead currently has one psychologist on staff for therapy and has plans to expand into that category, but has initially focused on psychiatry, alongside a mix of nurse practitioners and physicians assistants.
Ahead is also partnered with Truepill, its main investor, to offer a tightly integrated prescription delivery service for free to patients. Ahead offers a patient portal that allows users to see their prescription and get delivery times, and soon the company will launch the ability to request refills through that portal.
The company onboards patients in a 12-minute online process that includes a patient questionnaire. From there, Ahead sends the patient a list of HCPs in their area along with some background information about those providers, giving the patient the ability to choose who they’d like to be paired with. If all goes well, that patient is always paired with that same provider through the duration of their experience.
The company does not currently accept insurance for visits with HCPs, but insurance can be applied toward medication costs. The first visit with an Ahead doctor is $275, and the price goes down for follow-up visits.
Ahead did 1,100 patient visits last month, with 15 healthcare providers on staff full-time and a total team of 33 people. Nearly 40% of employees are male, with nearly 60% female. The company said that all employees selected ‘unspecified’ for race, so Ahead doesn’t have data to share publicly in that regard.
The company sees a real competitive advantage in the landscape by having physical clinics. With ADHD as the company’s primary focus, the company is able to treat the condition via medication, which requires at least one in-person visit before prescribing medicine.
Rink cites hiring as the greatest challenge for the company.
“We could take the approach of letting anybody that wants to work here walk in the door and start seeing patients, but we want to do it the right way,” said Rink. “We want to hire providers that are empathetic and caring and that the patients will love working with. As you know, mental health care is in high demand right now, so these providers have had a lot of offers and it’s hard to hire fast enough to meet our demand.”
The COVID-19 pandemic hasn’t been a friend to the media business. Its economic impacts slashed advertising budgets, diminishing a key revenue plank for many publications. The results of falling ad spend have been felt across the industry, with a wave of layoffs hitting publications large and small, niche and general.
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Other forms of publisher income, like events, have also been reduced. But the pain of 2020’s media downturn hasn’t been felt equally in the industry. Publications that had built subscription revenue bases were in a better position to weather declines in other media incomes than peers who hadn’t; revenue diversification can provide real shelter when the economy rapidly shifts.
Subscription incomes are not enough for publications to avoid all pain; The Atlantic’s subscription base famously surged during the early months of COVID-19, but the company still saw layoffs. The Athletic’s subscription business was predicated on sports events taking place — it too underwent cuts despite a membership-first model.
In this era, the healthiest publications tend to have a subscription component. The paywalled New York Times and Wall Street Journal are hiring, as is Business Insider, which launched a membership service in 2017. But not all subscription publications that are succeeding are large. Indeed, thanks to a growing set of publisher-friendly subscription services, there are a number of options in the market for supporting publications as small as a single author.
Perhaps most famously, Substack has seen good growth in the last year. The venture-backed newsletter-and-blogging service provides authors with the ability to charge for their writing. But other startups are competing in the space, helping publications derive more income directly from readers.
Pico, which provides paid-subscription tooling for publishers, has seen strong growth in the COVID-19 era. TechCrunch caught up with its co-founder Jason Bade to chat about what his company has seen in recent months. And a few months ahead of COVID-19’s arrival, publishing platform Ghost launched its paid subscription product into beta. TechCrunch asked Ghost about the reception, and growth of the membership portion of its business to better understand today’s media market.
What emerges from data and conversations concerning the startup-supported media membership landscape is something hopeful. Some writers are going to build micro-pubs that can finance their existence. And larger publications have never had more available help to wean their businesses off of ads, pageviews, and Google’s favor.
Nauta Capital, the pan-European venture capital firm that invests in B2B technology startups at seed and Series A, is launching its fifth fund.
The new vehicle has an initial close of €120 million and is expected to surpass the VC’s 2016 fund, which topped out at €155 million.
With offices in London, Barcelona and Munich, Nauta Capital has over half a billion under management and is supported by a team of 24 people, making it one of Europe’s largest B2B focused VCs. The firm invest in companies mainly based in the U.K., Spain, and Germany, as well as those based in other continental European countries with plans to significantly increase their presence in one of its key geographical hubs.
Describing itself as “sector-agnostic,” Nauta Capital’s main areas of interest include B2B SaaS solutions with “strong network effects”, vertically focused enterprise tech that is attempting to transform large industries, and deep tech applications that solve an array of challenges faced by large enterprises. More broadly, it says it targets “capital-efficient” B2B software companies.
In total, Nauta has led investments in more than 50 companies. They include Brandwatch, a U.K. digital consumer intelligence company with $100 million ARR; Onna, a knowledge integration platform that unifies workplace knowledge platforms for the likes of Facebook and Dropbox; PromoteIQ which was acquired by Microsoft in 2019; zenloop, a Berlin-based experience management platform; and MishiPay, a mobile self-checkout technology.
LPs in this fifth fund’s first close include both existing and new investors from continental Europe and America. They span fund of funds, financial institutions, insurance companies, and large family offices that lead large corporates with “strong synergies” with Nauta’s portfolio.
“We have doubled the first close compared to our 2016 fund in record time against a backdrop of a global pandemic,” says Carles Ferrer, Nauta’s London-based General Partner, in a statement. “With more than 80% of the contributions received from existing LPs, we are humbled to see that our thesis has resonated with so many of our current LPs who have joined us again”.
That thesis has seen Nauta have the discipline to back companies that take a leaner approach, including during fundraising or leveraging cash efficiently to achieve growth, according to Carles. “At a time when we are navigating a global pandemic, where the global economy has taken a severe hit, it’s more apparent than ever that our conviction in capital-efficiency maximises sustainability and leads to greater long-term outcomes for entrepreneurs, regardless of their stage,” he says.
Meanwhile, Nauta is disclosing that the first company to be backed from its new fund is NumberEight, which has raised a $2.3 million seed round led by the VC. Based in the U.K., NumberEight offers a “contextual intelligence” platform for mobile devices that predicts consumer context to “enable the delivery of the right content at the right time,” while claiming to preserve user privacy by not sending or storing sensor data beyond the user’s device.
“The startup leverages advanced context recognition and on-device AI techniques to predict over 100 contextual signals such as ‘travelling to work on a bicycle’, thus providing mobile apps with real-time behavioural and situational consumer insights,” explains Nauta.
For the second time in less than 24 hours, an enterprise company bought an early stage startup. Yesterday afternoon DocuSign acquired Liveoak, and this morning Slack announced it was buying corporate directory startup Rimeto, which should help employees find people inside the organization who match a specific set of criteria from inside Slack.
The companies did not share the purchase price.
Rimeto helps companies build directories to find employees beyond using tools like Microsoft Active Directory, homegrown tools or your corporate email program. When we covered the company’s $10 million Series A last year, we described what it brings to directories this way:
Rimeto has developed a richer directory by sitting between various corporate systems like HR, CRM and other tools that contain additional details about the employee. It of course includes a name, title, email and phone like the basic corporate system, but it goes beyond that to find areas of expertise, projects the person is working on and other details that can help you find the right person when you’re searching the directory.
In the build versus buy equation that companies balance all the time, it looks like Slack weighed the pros and cons and decided to buy instead. You could see how a tool like this would be useful to Slack as people try to build teams of employees, especially in a world where so many are working from home.
While the current Slack people search tool lets you search by name, role or team, Rimeto should give users a much more robust way of searching for employees across the company. You can search for the right person to help you with a particular problem and get much more granular with your search requirements than the current tool allows.
Image Credit: Rimeto
At the time of its funding announcement, the company, which was founded in 2016 by three former Facebook employees, told TechCrunch it had bootstrapped for the first three years before taking the $10 million investment last year. It also reported it was cash-flow positive at the time, which is pretty unusual for an early stage enterprise SaaS company.
In a company blog post announcing the deal, as is typical in these deals, the founders saw being part of a larger organization as a way to grow more quickly than they could have alone. “Joining Slack is a special opportunity to accelerate Rimeto’s mission and impact with greater reach, expanded resources, and the support of Slack’s impressive global team,” the founders wrote in the post.
The acquisition is part of a continuing trend around enterprise companies buying early stage startups to fill in holes in their product roadmaps.
Most sales teams earn a commission after a sale closes, but nothing prior to that. Yet there are a variety of signals along the way that indicate the sales process is progressing, and SetSail, a startup from some former Google engineers, is using machine learning to figure out what those signals are, and how to compensate salespeople as they move along the path to a sale, not just after they close the deal.
Today, the startup announced a $7 million investment led by Wing Venture Capital with help from Operator Collective and Team8. Under the terms of the deal, Leyla Seka from Operator will be joining the board. Today’s investment brings the total raised to $11 million, according to the company.
CEO and co-founder Haggai Levi says his company is based on the idea that commission alone is not a good way to measure sales success, and that it is in fact a lagging indicator. “We came up with a different approach. We use machine learning to create progress-based incentives,” Levi explained
To do that they rely on machine learning to discover the signals that are coming from the customer that indicate that the deal is moving forward, and using a points system, companies can begin compensating reps on hitting these milestones, even before the sale closes.
The seeds for the idea behind SetSail were planted years ago when the three founders were working at Google tinkering with ways to motivate sales reps beyond pure commission. From a behavioral perspective, Levi and his co-founders found that reps were taking fewer risks with a pure commission approach and they wanted to find a way to change that. The incremental compensation system achieves that.
“If I’m closing the deal, I’m getting my commission. If I’m not closing the deal, I’m getting nothing. That means from a behavioral point of view, I would take the shortest path to win a deal, and I would take the minimum risk possible. So if there’s a competitive situation I will try to avoid that,” he said.
They look at things like appointments, emails and call transcripts. The signals will vary by customer. One may find an appointment with CIO is a good signal a deal is on the right trajectory, but to avoid having reps gaming the system by filling the CRM with the kinds of positive signals the company is looking for, they only rely on objective data, rather than any kind of self-reporting information from reps themselves.
The team eventually built a system like this inside Google, and in 2018, left to build a solution for the rest of the world that does something similar.
As the company grows, Levi says he is building a diverse team, not only because it’s the right thing to do, but because it simply makes good business sense. “The reality is that we’re building a product for a diverse audience, and if we don’t have a diverse team we would never be able to build the right product,” he explained.
The company’s unique approach to sales compensation is resonating with customers like Dropbox, Lyft and Pendo, who are looking for new ways to motivate sales teams, especially during a pandemic when there may be a longer sales cycle. This kind of system provides a way to compensate sales teams more incrementally and reward positive approaches that have proven to result in sales.
The daily updates on COVID-19 outbreaks, tragic stories of related fatalities, and our narrowed scope of life due to lockdown have all put the concept of mortality — and for some the sad business of actually dealing with a death — squarely into focus for many people. Today, a startup that’s building out a suite of services related to that is announcing a round of funding on the back of a boost of growth in business.
Farewill, a UK startup that provides a platform for people write online wills, organise probate services (such as sorting out death duties and taxes on a person’s property) and order cremations, has raised £20 million ($25 million) in funding — money that it hopes will not only help the company grow its business but also to help in the process of coping with our own deaths and those of our loved ones.
“We want to help by destigmatising death,” said Farewill CEO Dan Garrett in an interview about the complexity of the proposition. “We all have to face death. It lives inside everyone. But for most of us, we are psychologically hardwired not to think about it, and as a process people have been largely at the behest of an industry that doesn’t think about its customers.”
The name is, as you may have guessed, a play on farewell. “Think of the pun, and you can start the company,” Garrett said with the hint of wryness in his voice that I’m not sure you can avoid at the moment, especially given the subject.
The round is being led by Highland Europe, with Keen Ventures, Rich Pierson of Headspace, Broadhaven Ventures, Venture Founders and previous investors Augmentum Fintech, Taavet Hinrikus of TransferWise and Kindred Capital also participating. It’s being described as a venture round — a Series A of just under $10 million was closed in January 2019 — and brings the total raised by Farewill to £30 million.
Farewill is currently only live in the UK but longer term has plans to expand to more. In its home market, Garrett (who co-founded the company with university friend Dan Rogers, who is the CTO and CPO) says that in the five years that Farewill has been operational, it’s become the biggest will writer in the country in what is a quite fragmented market: the startup accounts for one out of every 10 wills written, or a 10% market share.
The cremation funeral and probate services are more recent launches from December 2019. But even so, given the current state of play with lockdown, social distancing and sadly the rise in actual deaths, they too have seen a lot of activity. Garrett said that Farewill’s cremation service, where the order for cremation and other details are all carried out online and costs on average one-fifth of the typical funeral — the idea being that families can then choose how to memorialise after that process, bypassing that more traditional funeral option — is now the third/fourth-biggest cremation provider in the country. It’s not all about the last few months, however: overall growth for the startup, he added, was 800% last year (before COVID-19) on a revenue basis.
Just as death is not an easy topic for most people, it’s a complicated one to pinpoint as a target industry for a startup to “disrupt.” Farewill’s origin story, in that context, is an interesting one.
Garrett — who studied engineering at Oxford as an undergraduate — said the the idea came to him while doing postgraduate work on a joint degree between Imperial College and the Royal College of Art on design and innovation.
He came into the degree with a lot of big ideas, inspired by companies like Airbnb. “There is just so much potential for design-led companies,” he said of his thinking at the time.
One of the remits that the course cohort was given, he said, was to think about the broader concept of aging and services to address that. As part of the course, he travelled to Japan — which has its own specific reverence for ageing and the death process — and based himself at an old people’s home in Tokyo for six months along with “a team of enthnographers and anthropologists.”
He came out of that with an insight he didn’t expect, he recalled. “I felt that at the end of my six months there, I’d failed in my role as a designer,” he said. “All we focused was on the superficiality of ageing: how can we make better cutlery, or beds or seating that helped them move around? It was all about mobility and the physical aspects. But why we didn’t get close to talking about was that most of these people were facing their mortality. And in care homes, you don’t have friends or family around.” In other words, physical details and making life more manageable or enjoyable are fine, but Garrett didn’t feel that they got to the heart of the matter.
“To my mind, if you’re a designer, your responsibility is to get to the bottom of whatever the issue is,” he said. His dissertation, about dementia care, raised questions not about cutlery per se but person-centered approaches. “So much of it is about physical amelioration, not psychological aspects.”
So when he returned to the UK, he set to work trying to understand “the death industry.” He spent two months doing what he described as “mystery shopping”, regularly visiting funeral directors, and saying he was coming to discuss a death (a hypothetical one, not a real one) to understand what process people went through when they walked through the door for a real funeral. “I made sure I didn’t waste too much of their time,” he said.
He then also got a qualification in will writing and started offering services to his friends (free) who needed help to go through the probate process — which involves sorting out death duties, organising personal effects and the estate and so on. He — and Farewill — have also tried to embody a transparent and ethical approach in the work throughout, which has also included making it easier to designate pledged legacy income in wills (that is donations to causes). The aim is to reach £1 billion in pledged legacy income by 2023, with over £200 million raised so far and the numbers accelerating.
All that hands-on experience was important, he said, to get to grips with what he wanted to build. “I may have three masters degrees, but I am terrible at learning without actually doing something,” he said.
One big conclusion Garrett found was that not only was the death industry large and complicated, not least because of the subject matter, but because it had no technical innovation at all around it.
“There is this profound human aversion to dealing with death, and that is a brilliant design challenge,” he said.
Indeed, like it or not, death is always around us, and perhaps particularly right now. In the US — itself home to a number of startups focusing on death-related services — will writing companies have seen huge spikes in their business in the last several months. And even with the economic slowdown much of the globe is now seeing as a result of COVID-19, death care services (which don’t include will writing but everything after death), is projected to be a $102 billion industry this year.
It’s numbers like that, and Farewill’s execution in what it is doing, that has attracted investors.
“How about entirely removing the administrative pain for those grieving for their loved ones? How about providing an affordable, effortless and considerate service? That’s what the Farewill team is doing – with an extraordinary blend of compassion and tech-fueled efficiency,” said Stan Laurent, Partner at Highland Europe in a statement. “For too long, the wills and funeral industry has been largely geared towards profit over purpose. Since our first meeting with Dan, we knew that Farewill had the ingredients to radically disrupt the industry. We’re excited to back them as they broaden their ambition.”
“Farewill has made phenomenal progress since our initial investment 18 months ago,” added Tim Levene, CEO of Augmentum Fintech, in a statement. “They have grown by 10x and launched a suite of successful new products. This additional capital will provide further opportunity for the company to innovate an archaic industry, and become the leading digital platform in death services.”
(Farewill also recently won a Europa award for its contribution to social innovation.)
LeanIX, the enterprise architecture software company founded out of Bonn in Germany, has closed $80 million in Series D funding. The round is led by new investor Goldman Sachs Growth. Previous investors Insight Partners and DTCP also followed on.
The Series D brings LeanIX’s total funding to over $120 million. The company says it will use the investment to continue international growth and to further develop its complementary solutions for cloud governance. In the last 12 months, LeanIX has opened new offices in Hyderabad (India), Munich (Germany) and Utrecht (Netherlands), and now has 230 employees worldwide (up from 80 when we last covered the company).
Founded in 2012, LeanIX operates in the enterprise architecture space and its SaaS might well be described as a “Google Maps for IT architectures”. The software lets enterprises map out all of the legacy software or modern SaaS that the organisation is run on. This includes creating meta data on things like what business process it is used for or capable of supporting, what tech powers it, which teams are using or have access to it, as well as how the different architecture fits together.
The idea is that enterprises not only have a better handle on all of the software from different vendors they are buying in, including how that differs or might be better utilised across distributed teams, but can also act in a more nimble way in terms of how they adopt new solutions or decommission legacy ones.
“Many well-known enterprises have successfully restarted their EA initiative with LeanIX,” says André Christ, LeanIX CEO and co-founder (pictured). “Due to its high usability and seamless integrations with other data sources, fast-growing businesses like Atlassian, Dropbox, and Mimecast have also kick-started their EA practices”.
Image Credits: LeanIX
To that end, LeanIX says it is currently working with 300 international customers and achieved 100% revenue growth in 2019. Specifically, 39% of total sales are generated in the U.S. market, and 57% in its home market of Europe.
Comments Christian Resch, Managing Director Goldman Sachs Growth, in a statement: “LeanIX is a thought leader in Enterprise Architecture. We were impressed by its strong revenue growth, the positive customer feedback and the company’s visionary concept: LeanIX develops software solutions to reduce complexity in IT application landscapes. Importantly, LeanIX’s software helps companies with their transition to, and maintenance of, both the cloud and modern microservices architecture”.
Alexander Lippert, Vice President at Goldman Sachs Growth, will join LeanIX’s board of directors.
Even in the best of times, finding a notary can be a challenge. In the middle of a pandemic, it’s even more difficult. DocuSign announced it has acquired Liveoak Technologies today for approximately $38 million, giving the company an online notarization option.
At the same time, DocuSign announced a new product called DocuSign Notary, which should ease the notary requirement by allowing it to happen online along with the eSignature. As we get deeper into the pandemic, companies like DocuSign that allow workflows to happen completely digitally are in more demand than ever. This new product will be available for early access later in the summer.
The deal made sense given that the two companies had a partnership already. Liveoak brings together live video, collaboration tooling and identity verification that enables parties to get notarized approval as though you were sitting at the desk in front of the notary.
Typically, you might get a document that requires your signature. Without electronic signature, you would need to print it, sign the document, scan it and return it. If it requires a notary, you would need to sign it in the notary’s presence, which requires an in-person visit. All of this can be streamlined with an online workflow, which DocuSign is providing with this acquisition.
It’s like the perfect pandemic acquisition, making a manual process digital and saving people from having to make face-to-face transactions at a time when it can be dangerous.
Liveoak Technologies was founded in 2014 and is part of the Austin, Texas startup scene. The company raised just under $28 million during its life as a private company. The firm most recently raised $8 million at a post-money valuation of $30.4 million, according to PitchBook data. Given the amount that DocuSign paid for the startup, it appears to have gotten a bargain.
This acquisition is part of a growing pandemic acquisition trend of sorts, where larger public enterprise companies are plucking early-stage startups, in some cases for relatively bargain prices. Among the recent acquisitions are Apple buying Fleetsmith and ServiceNow acquiring Sweagle last month.
When Manatee founder Damayanti Dipayana’s brother was diagnosed with autism spectrum disorder, the family took all the steps to ensure that he was properly cared for. All of the things that could have been an obstacle to getting treatment weren’t for Dipayana’s family.
A comfortably middle class background, a supportive family and ready access to care were all available, but still the therapy didn’t take. For Dipayana, it was witnessing the breakdown between the care provided at sessions and the differences in treatment at home, that led her to create Manatee.
“Therapy just sucks for kids,” Dipayana said. “My brother hated it.. It can’t be the best thing for children to put them in a room with an adult and have them talk about their problems for an hour.”
Now the graduate from Techstars Los Angeles has $1.5 million in funding from investors including the Michigan-based investment firm, Grand Ventures; Telosity, a fund launched by Vinaj Ventures & Innovation, that invests in companies improving children’s and young adult’s mental health; and the American Family Insurance Institute for Corporate and Social Impact, will pursue clinical validation for its suite of apps and services to provide a continuum of care for children with cognitive and behavioral disorders.
Beginning with Children’s Hospital Los Angeles, Manatee has started a trial with ten clinicians and fifty families to evaluate the commercial use case for Dipayana’s service.
The first targets for care are anxiety and oppositional disorder, Dapayana said.
Image credit: Manatee
“I really want to focus on children. From a social [return on investment] perspective it seems insane to me that we don’t invest more in the early wellbeing of children,” said Dipayana. “If we did then we probably wouldn’t have to deal with a ballooning juvenile detention system.”
From the company’s earliest days the stars seemed to align for Dipayana. She found her technical co-founder, Shawn Kuenzler, thanks to a post on AngelList. A veteran in the health tech startup world, Kuenzler ran engineering at Health Language and Zen Planner and has two exits under his belt. If that wasn’t serendipitous enough, Kuenzler’s wife is a clinical psychologist.
The two Denver-based entrepreneurs then took their startup on the road to the Techstars Los Angeles accelerator. It was there that they were introduced to contacts at companies including Headspace and LA Children’s Hospital that are paving the way for clinical validation of digitally delivered cognitive behavioral healthcare.
“We’re going to spend money and resources on launching our research with Children’s LA to understand the impact for a health system,” Dipayana said. “We position it as everyday therapy for kids. We provide the platform for providers to make it the day-to-day therapy for kids.”
Manatee sells its services directly to healthcare systems to ensure that it can reach the broadest population of users rather than just ones who could afford to access the company’s app-based offerings. Doctors use Manatee as a clinical dashboard and way to communicate to both a child and their family around care plans and treatment.
“I thought about this really long and hard… Looking from my personal experience. Parents and families that have kids with autism… there’s so much snake oil that gets pushed down their throat that they’ll try anything,” Dipayana said. “It was very important to me that one i understand the clinical workflow and understood how the workforce manages behavioral healthcare and whether the work we were doing was valuable.”
Business is the foundation, of, well, business. For startups, finding a working business model and honing it through decision-making, smart hires and relentless focus on the right metrics can be the difference between building a scalable company and collapsing into the next Luckin Coffee.
Given how important business performance and finance is, it’s not uncommon in the early days of a startup to hire an “outsourced CFO” — a part-time financial professional who helps with budgeting, basic forecasting and preparing reports for investors. Those reports, though, are static, and don’t lead to great conversations around how a business is performing, how it can change and what should happen next for all parties involved.
Quaestor wants to upend the static spreadsheets and PDFs sent to dozens if not hundreds of people on cap tables today with a software-first solution that allows executives and their investors to hold better, more intelligent conversations about business performance.
The idea for the company congealed in the offices of 8VC, where the firm’s partners like Joe Lonsdale and Alex Moore repeatedly watched companies struggling to present all of their business information to their investors in a time-efficient way. 8VC has a history of incubating projects just like Quaestor, such as CRM tool Affinity.
For Quaestor, the firm eventually brought together a trio of co-founders, with Lonsdale also officially co-founding the company. John Melas-Kyriazi is CEO, and formerly was with Spark Capital for five years as a VC. He left earlier this year, and is maintaining his board seats there. Kevin Hsu is head of product and was a product manager at cap table management startup Carta before joining 8VC as an EIR. Finally, Deny Khoung is head of operations and was formerly the director of design at 8VC.
The group has been riffing for months on the idea of improving collaboration around the fundamentals of startup metrics, but officially spun out of 8VC in March and raised $5.8 million, led by 8VC with participation from Melas-Kyriazi’s former firm Spark as well as Abstract Ventures, Riot Ventures, Fathom Ventures and GFC.
Let’s head back to the product though. Quaestor connects founders, company executives and investors all together to discuss a business and make sure everyone is on the same page regarding targets and metrics. “How do VCs and their companies interact around financial data, whether it’s documents like P&L / balance sheet / cash flow statement [or] individual financial KPIs like revenue, gross margin, net income, ARR, etc.?,” Melas-Kyriazi explained. “How do companies share that information with their investors to keep them updated? How do investors support their companies in understanding what goals they should be setting?”
The goal with the platform is two-fold. One is to ingest financial data and automatically prepare it so that all those annoying Excel mistakes disappear and everyone can read from one consistent set of metrics. The other is to help guide everyone to focus on the metrics that matter. “Most entrepreneurs come from a product background or engineering or sales and they might not necessarily have worked in finance before,” Melas-Kyriazi said. The goal with Quaestor is to help push them to think carefully about their finances.
Over time as cap tables get more complicated and more investors add their capital, the goal is that Quaestor can offer a single source of truth for all financial data, without requiring the CEO or an outsourced CFO to prepare individual reports for each firm.
Right now, the company is focusing its product on early-stage startups, but hopes to grow up with those companies as they scale, expanding its services to other types of companies over time. The company’s product has been in beta as it tests out its MVP.
Quaestor is now a team of eight, with several offer letters in motion (so that number is actively growing as I write this article). Melas-Kyriazi said that product development and early scaling are the key goals for the startup over the next year or two.