Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
SaaS stocks had a good run in late 2019. TechCrunch covered their ascent, a recovery from early-year doldrums and a summer slowdown. In 2020 so far, SaaS and cloud stocks have surged to all-time highs. The latest records are only a hair higher than what the same companies saw in July of last year, but they represent a return to form all the same.
Given that public SaaS companies have now managed to crest their prior highs and have been rewarded for doing so with several days of flat trading, you might think that there isn’t much room left for them to rise. Not so, at least according to Atlassian . The well-known software company reported earnings after-hours yesterday and the market quickly pushed its shares up by more than 10%.
Why? It’s worth understanding, because if we know why Atlassian is suddenly worth lots more, we’ll better grok what investors — public and private — are hunting for in SaaS companies and how much more room they may have to rise.
Aki CEO Scott Swanson told me that he’s anticipating serious growth in the demand for ad personalization, particularly as consumers see personalization everywhere else online.
Swanson argued that Eyeview’s technology is particularly strong thanks to its focus on video, with “the ability to generate millions of permutations of a video creative and store them in the cloud.” It offers even more opportunities when combined with Aki’s existing technology, which delivers ads targeted for specific “mobile moments,” like whether the viewer is relaxing at home or out running errands.
Plus, the acquisition allows Aki to expand beyond mobile advertising to desktop and connected TV.
The financial terms of the deal were not disclosed, but Swanson said that in addition to acquiring the technology, he’s also working to bring on old Eyeview clients and hire Eyeview team members (he estimated that he’s hired nearly 15 so far and is aiming for around 20). At the same time, he acknowledged that there are challenges in resurrecting a business that had been shut down.
“The technology itself was decommissioned, it was taken down, it was backed up in the cloud,” Swanson said. “As the acquisition proceeds, we’ll literally be taking the code base and relaunching it in the cloud … Hiring the people was super important, and then because it’s not a traditional acquisition where we get customers and stuff, we have to go call up all the customers one-by-one, just as we have to hire people one-by-one.”
Eyeview had raised nearly $80 million in funding before running out of cash and laying off a team of around 100 employees. (Aki, meanwhile, has raised only a seed round of $3.75 million back in 2016; Swanson said the company has grown organically since then.) The news came only a few months after digital media veteran Rob Deichert took over as CEO.
“While it was disappointing to have to shut down the Eyeview business, I’m very happy that the technology assets have found a home with Aki,” Deichert told me via email. “Their business is a logical fit for the technology.”
And despite Eyeview’s misfortunes, Swanson said he’s confident that the company still works as a standalone business: “Look, these guys have been running a business that was full of really happy customers who were seeing good results and seem to have been disappointed when they shut down.”
The bigger issue, he suggested, is the adtech industry as a whole, with advertisers feeling fatigued “with having too many options,” along with a lack of “appetite on the large exit side.”
“The broader trend here is for companies that operate profitably and can support themselves effectively to become a little bit more tech-enabled managed services business,” Swanson said.
Layoffs in the technology and venture-backed worlds continued today, as 23andMe confirmed to CNBC that it laid off around 100 people, or about 14% of its formerly 700-person staff. The cuts would be notable by themselves, but given how many other reductions have recently been announced, they indicate that a rolling round of belt-tightening amongst well-funded private companies continues.
Mozilla, for example, cut 70 staffers earlier this year. As TechCrunch’s Frederic Lardinois reported earlier in January, the company’s revenue-generating products were taking longer to reach market than expected. And with less revenue coming in than expected, its human footprint had to be reduced.
23andMe and Mozilla are not alone, however. Playful Studios cut staff just this week, 2019 itself saw more than 300% more tech layoffs than in the preceding year and TechCrunch has covered a litany of layoffs at Vision Fund-backed companies over the past few months, including:
Scooter unicorns Lime and Bird have also reduced staff this year. The for-profit drive is firing on all cylinders in the wake of the failed WeWork IPO attempt. WeWork was an outlier in terms of how bad its financial results were, but the fear it introduced to the market appears pretty damn mainstream by this point. (Forsake hope, alle ye whoe require a Series H.)
The money at risk, let alone the human cost, is high. Zume has raised more than $400 million. 23andMe has raised an even sharper $786.1 million. Rappi? How about $1.4 billion. And Oyo? $3.2 billion so far. Every company that loses money eventually dies. And every company that always makes money lives forever. It seems that lots of companies want to jump over the fence, make some money and rebuild investor confidence in their shares.
It’s just too bad that the rank-and-file are taking the brunt of the correction.
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re digging into One Medical’s updated IPO filing released this week. The document contains directional pricing information that will help us understand where the tech-enabled medical care startup expects the market to value itself and also details its Q4 2019 Preliminary Estimated Unaudited Financial Results, which gives us a fuller picture of its financial health.
As we’ll see, One Medical’s expected valuation matches secondary-market transactions in the firm’s equity, and, at the upper-end of its proposed IPO range, represents a solid boost to its final private valuation. Afterwards, we’ll dig back through the company’s numbers, figure out its implied revenue multiple and make a bullish and bearish argument for the company’s hoped-for IPO valuation.
It’s going to be fun! (For a general dive into the company’s IPO filing, head here.)
Lighter Capital announced today that it has secured access to $100 million to lend to growing startups. The firm is best-known for its work with revenue-based financing, in which expanding companies repay borrowed funds out of future receipts. Lighter has also expanded into other, equity-free capital options for startups in the last year.
Lighter is most easily understood as part of the group of firms that provide what TechCrunch has described as “alt-VC,” forms of capital access that do not fit into the traditional venture capital model of selling shares (equity) for cash. With the VC method, venture capitalists raise funds from wealthy capital pools, disbursing the funds in pieces to various private companies for an ownership stake. Those growth-focused firms then try to scale rapidly. Those that succeed become valuable, rendering the venture investment lucrative, and, hopefully, the venture capital fund profitable.
In alt-VC, various forms of debt are put to work, tailored to companies that are growth-oriented, often existing outside of the realm of what traditional banks would consider lending-ready. Startups that are working in software-as-a-service (SaaS) or e-commerce are often considered ideal candidates for alt-VC in its various forms, as returns that can be generated with marginally deployed capital are calculable with reasonable certainty in those fields.
Got all that? Let’s turn to what Lighter Capital is up to.
Lighter’s new $100 million access to capital (we’ll call it a fund, for lack of a better term) will allow it to accelerate its business, the firm’s CEO Thor Culverhouse told TechCrunch. Lighter has a number of “ideas about how we’re going to grow [its] business,” Culverhouse said in a phone call, and having more “access to capital is a very important element to that growth strategy.”
According to a release, Lighter has “invested” over $200 million in more than 350 companies to date; however, even though Lighter’s loans return capital and could allow for the recycling of funds, the $100 million in new funds represents a step up in capacity for the company. (Lighter is working with HCG for its capital access.)
The new funds will be disbursed in more ways than one. In June of 2019, Lighter added two more traditional forms of debt to its list of offerings: term loans and lines of credit. Culverhouse discussed the additional products with TechCrunch, connecting term loans to revenue-based financing options:
We did two things. When you think about the [revenue-based financing] function we have today, it is a term loan, it’s just that the repayment is based on whatever your monthly recurring revenue is. What we noticed is some people liked that flexibility. We [also] noticed some of our customers said, actually, I’d rather have a very predictable payment stream. And so we came out with another term loan that is like any other term loan, it’s just as a predictable payment stream throughout the year. So they’re very, very much alike. And then we came out with a line of credit, which is more traditionally used for working capital. So it’s a 12-month revolver, if you will.
Here Lighter capital describes a link between revenue-based financing and regular loans that is worth chewing on. Revenue-based financing is merely a loan, tuned modestly for the SaaS world. That’s it. It allows for recurring-revenue focused companies to vary their payments over time, but both a term loan to a growth-oriented startup and a revenue-based financing event are pretty similar at their core.
Which, naturally, makes Lighter’s move into more traditional loans pretty reasonable. With $100 million to put to work, Lighter is going to move some cash. That, in conjunction with the growing set of firms offering similar services, should help a lot of folks fund their companies’ growth without selling shares.
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re adding a few names to the $100 million annual recurring revenue (ARR) club. The new entrants come after we kicked off 2020 with a previous four new members. So far in January, we’ve also highlighted SiteMinder’s $70 million ARR and expected ramp to $100 million, Cloudinary’s $60 million ARR sans venture capital and Seattle’s ExtraHop, which expects to reach $100 million ARR this year.
The $100 million ARR club, in case you’re just joining us today, is a list of yet-private companies that have either reached the $100 million ARR mark, or are close to reaching it and have plans to crest the threshold in short order. The goal of writing and publishing the list is to provide a non-valuation lens through which we can view the private market’s leading constituents. Revenue milestones matter more than valuation bumps.
Front is raising a $59 million Series C funding round. Interestingly, the startup hasn’t raised with a traditional VC firm leading the round. A handful of super business angels are investing directly in the productivity startup and leading the round.
Business angels include Atlassian co-founder and co-CEO Mike Cannon-Brookes, Atlassian President Jay Simons, Okta co-founder and COO Frederic Kerrest, Qualtrics co-founders Ryan Smith and Jared Smith and Zoom CEO Eric Yuan. Existing investors including Sequoia Capital, Initialized Capital and Anthos Capital are participating in this round as well.
While Front doesn’t share its valuation, the company says that the valuation has quadrupled compared to the previous funding round. Annual recurring venue has also quadrupled over the same period.
The structure of this round is unusual, but it’s on purpose. Front, like many other startups, is trying to redefine the future of work. That’s why the startup wanted to surround itself with leaders of other companies who share the same purpose.
“First, because we didn’t need to raise (we still had two years of runway), and it’s always better to raise when we don’t need it. The last few months have given me much more clarity into our go-to-market strategy,” Front co-founder and CEO Mathilde Collin told me.
Front is a collaborative inbox for your company. For instance, if you want to share an email address with your coworkers (firstname.lastname@example.org or email@example.com), you can integrate those shared inboxes with Front and work on those conversations as a team.
It opens up a ton of possibilities. You can assign conversations to a specific person, @-mention your coworkers to send them a notification, start a conversation with your team before you hit reply, share a draft with other people, etc.
Front also supports other communication channels, such as text messages, WhatsApp messages, a chat module on your website and more. As your team gets bigger, Front helps you avoid double replies by alerting other users when you’re working on a reply.
In addition to those collaboration features, Front helps you automate your workload as much as possible. You can set up automated workflows so that a specific conversation ends up in front of the right pair of eyes. You can create canned responses for the entire team as well.
Front also integrates with popular third-party services, such as Salesforce, HubSpot, Clearbit and dozens of others. Front customers include MailChimp, Shopify and Stripe.
While Front supports multiple channels, email represents the biggest challenge. If you think about it, email hasn’t changed much over the past decade. The last significant evolution was the rise of Gmail, G Suite and web-based clients. In other words, Front wants to disrupt Outlook and Gmail.
With today’s funding round, the company plans to iterate on the product front with Office 365 support for its calendar, an offline mode and refinements across the board. The company also plans to scale up its sales and go-to-market team with an office in Phoenix and a new CMO.
Lately, the venture community’s relationship with advertising tech has been a rocky one.
Advertising is no longer the venture oasis it was in the past, with the flow of VC dollars in the space dropping dramatically in recent years. According to data from Crunchbase, adtech deal flow has fallen at a roughly 10% compounded annual growth rate over the last five years.
While subsectors like privacy or automation still manage to pull in funding, with an estimated 90%-plus of digital ad spend growth going to incumbent behemoths like Facebook and Google, the amount of high-growth opportunities in the adtech space seems to grow narrower by the week.
Despite these pains, funding for marketing technology has remained much more stable and healthy; over the last five years, deal flow in marketing tech has only dropped at a 3.5% compounded annual growth rate according to Crunchbase, with annual invested capital in the space hovering just under $2 billion.
Given the movement in the adtech and martech sectors, we wanted to try to gauge where opportunity still exists in the verticals and which startups may have the best chance at attracting venture funding today. We asked four leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in marketing and advertising:
Several of the firms we spoke to (both included and not included in this survey) stated that they are not actively investing in advertising tech at present.
TriggerMesh, a startup building on top of the open source Kubernetes software to help enterprises go “serverless” across apps running in the cloud and traditional data centers, has raised $3 million in seed funding.
The round is led Index Ventures and Crane Venture Partners. TriggerMesh says the investment will be used to scale the company and grow its development team in order to offer what it bills as the industry’s first “cloud native integration platform for the serverless era”.
Founded by two prominent names in the open source community — Sebastien Goasguen (CEO) and Mark Hinkle (CMO), based in Geneva and North Carolina, respectively — TriggerMesh’s platform will enable organizations to build enterprise-grade applications that span multiple cloud and data center environments, therefore helping to address what the startup says is a growing pain point as serverless architectures become more prevalent.
TriggerMesh’s platform and serverless cloud bus is said to facilitate “application flow orchestration” to consume events from any data center application or cloud event source and trigger serverless functions.
“As cloud-native applications use a greater number of serverless offerings in the cloud, TriggerMesh provides a declarative API and a set of tools to define event flows and functions that compose modern applications,” explains the company.
One feature TriggerMesh is specifically talking up and very relevant to legacy enterprises is its integration functionality with on-premise software. Via its wares, it says it is easy to connect SaaS, serverless cloud offerings and on-premises applications to provide scalable cloud-native applications at a low cost and quickly.
“There are huge numbers of disconnected applications that are unable to fully benefit from cloud computing and increased network connectivity,” noted Scott Sage, co-founder and partner at Crane Venture Partners, in a statement. “Most companies have some combination of cloud and on-premises applications and with more applications around, often from different vendors, the need for integration has never been greater. We see TriggerMesh’s solution as the ideal fit for this need which made them a compelling investment”.
IT operations collects tons of data across a number of monitoring and logging tools, way too much for any team of humans to keep up with. That’s why there are startups like Loom turning to AI to help sort through it. It can find issues and patterns in the data that would be challenging or impossible for humans to find. Applying AI to operations data in this manner has become known as AIOps in industry parlance.
ServiceNow is first and foremost a company trying to digitize the service process, however that manifests itself. IT service operations is a big part of that. Companies can monitor their systems, wait until a problem happens and then try and track down the cause and fix it, or they can use the power of artificial intelligence to find potential dangers to the system health and neutralize them before they become major problems. That’s what an AIOps product like Loom’s can bring to the table.
Jeff Hausman, vice president and general manager of IT Operations Management at ServiceNow sees Loom’s strengths merging with ServiceNow’s existing tooling to help keep IT systems running. “We will leverage Loom Systems’ log analytics capabilities to help customers analyze data, automate remediation and reduce L1 incidents,” he told TechCrunch.
Loom co-founder and CEO Gabby Menachem not surprisingly sees a similar value proposition. “By joining forces, we have the unique opportunity to bring together our AI innovations and ServiceNow’s AIOps capabilities to help customers prevent and fix IT issues before they become problems,” he said in a statement.
Loom raised $16 million since it launched in 2015, according to PitchBook data. Its most recent round for $10 million was in November 2019. Today’s deal is expected to close by the end of this quarter.
Placer.ai, a startup that analyzes location and foot traffic analytics for retailers and other businesses, announced today that it has closed a $12 million Series A. The round was led by JBV Capital, with participation from investors including Aleph, Reciprocal Ventures and OCA Ventures.
The funding will be used on research and development of new features and to expand Placer.ai’s operation in the United States.
Launched in 2016, Placer.ai’s SaaS platform gives its clients to real-time data that helps them make decisions like where to rent or buy properties, when to hold sales and promotions and how to manage assets.
Placer.ai analyzes foot traffic and also creates consumer profiles to help clients make marketing and ad spending decisions. It does this by collecting geolocation and proximity data from devices that are enabled to share that information. Placer.ai’s co-founder and CEO Noam Ben-Zvi says the company protects privacy and follows regulation by displaying aggregated, anonymous data and does not collect personally identifiable data. It also does not sell advertising or raw data.
The company currently serves clients in the retail (including large shopping centers), commercial real estate and hospitality verticals, including JLL, Regency, SRS, Brixmor, Verizon* and Caesars Entertainment.
“Up until now, we’ve been heavily focused on the commercial real estate sector, but this has very organically led us into retail, hospitality, municipalities and even [consumer packaged goods],” Ben-Zvi told TechCrunch in an email. “This presents us with a massive market, so we’re just focused on building out the types of features that will directly address the different needs of our core audience.”
He adds that lack of data has hurt retail businesses with major offline operations, but that “by effectively addressing this gap, we’re helpiong drive more sustainable growth or larger players or minimizing the risk for smaller companies to drive expansion plans that are strategically aggressive.”
Others startups in the same space include Dor, Aislelabs, RetailNext, ShopperTrak and Density. Ben-Zvi says Placer. ai wants to differentiate by providing more types of real-time data analysis.
“While there are a lot of companies touching the location analytics space, we’re in a unique situation as the only company providing these deep and actionable insights for any location in the country in a real-time platform with a wide array of functionality,” he said.
*Disclosure: Verizon Media is the parent company of TechCrunch.
Tencent, one of the world’s biggest videogaming companies by revenue, today made another move to help cement that position. The Chinese firm has made an offer to fully acquire Funcom, the games developer behind Conan Exiles (and others in the Conan franchise), Dune and some 28 other titles. The deal, when approved, would value the Oslo-based company at $148 million (NOK 1.33 billion) and give the company a much-needed cash injection to follow through on longer-term strategy around its next generation of games.
Funcom is traded publicly on the Oslo Stock Exchange, and the board has already recommended the offer, which is being made at NOK 17 per share, or around 27% higher than its closing share price the day before (Tuesday).
The news is being made with some interesting timing. Today, Tencent competes against the likes of Sony, Microsoft and Nintendo in terms of mass-market, gaming revenues. But just earlier this week, it was reported that ByteDance — the publisher behind breakout social media app TikTok — was readying its own foray into the world of gaming.
That would set up another level of rivalry between the two companies, since Tencent also has a massive interest in the social media space, specifically by way of its messaging app WeChat . While many consumers will have multiple apps, when it comes down to it, spending money in one represents a constraint on spending money in another.
Today, Tencent is one of the world’s biggest video game companies: in its last reported quarter (Q3 in November), Tencent said that it make RMB28.6 billion ($4.1 billion) in online gaming revenue, with smartphone games accounting for RMB24.3 billion of that.
Acquisitions and controlling stakes form a key part of the company’s growth strategy in gaming. Among its very biggest deals, Tencent paid $8.6 billion for a majority stake in Finland’s Supercell back in 2016. It also has a range of controlling stakes in Riot Games, Epic, Ubisoft, Paradox, Frontier and Miniclip. These companies, in turn, also are making deals: just earlier this month it was reported (and sources have also told us) that Miniclip acquired Israel’s Ilyon Games (of Bubble Shooter fame) for $100 million.
Turning back to Funcom, Tencent was already an investor in the company: it took a 29% stake in it in September 2019 in a secondary deal, buying out KGJ Capital (which had previously been the biggest shareholder).
“Tencent has a reputation for being a responsible long-term investor, and for its renowned operational capabilities in online games,” said Funcom CEO Rui Casais at the time. “The insight, experience, and knowledge that Tencent will bring is of great value to us and we look forward to working closely with them as we continue to develop great games and build a successful future for Funcom.”
In retrospect, this was laying the groundwork and relationships for a bigger deal just months down the line.
“We have a great relationship with Tencent as our largest shareholder and we are very excited to be part of the Tencent team,” Casais said in a statement today. “We will continue to develop great games that people all over the world will play, and believe that the support of Tencent will take Funcom to the next level. Tencent will provide Funcom with operational leverage and insights from its vast knowledge as the leading company in the game space.”
The rationale for Funcom is that the company had already determined that it needed further investment in order to follow through on its longer-term strategy.
According to a statement issued before it recommended the offer, the company is continuing to build out the “Open World Survival segment” using the Games-as-a-Service business model (where you pay to fuel up with more credits); and is building an ambitious Dune project set to launch in two years.
“Such increased focus would require a redirection of resources from other initiatives, the most significant being the co-op shooter game, initially scheduled for release during 2020 that has been impacted by scope changes due to external/market pressures with increasingly strong competition and internal delays,” the board writes, and if it goes ahead with its strategy, “It is likely that the Company will need additional financing to supplement the revenue generated from current operations.”
The new fund, which is described as “heavily oversubscribed,” sits at $185 million. That’s up from $85 million first time around.
Blossom’s remit remains broadly the same: to be the lead investor in European tech startups at Series A, along with doing some seed deals, too. In particular, the VC will continue to focus on finance, design, marketplaces, travel, developer-focused tools, infrastructure and “API-first” companies.
Its differentiator is pitched as so-called “high conviction” investing, which sees it back fewer companies by writing larger cheques, along with claiming to have close ties to U.S. top tier investors ready to back portfolios at the next stage.
And whilst a “bridge to the valley” is a well worn claim by multiple European VCs, Blossom’s track record so far bares this is out somewhat, even if it nascent. Of the firm’s portfolio, travel booking platform Duffel has received two follow-on investment rounds led by Benchmark and Index Ventures; cybersecurity automation platform Tines received follow-on investment led by Accel Partners; and payments unicorn Checkout.com is also backed by Insight Partners.
In addition, I understand that about half of Blossom’s LPs are in the U.S., and that all of the firm’s original LPs invested in this second fund, which Brown concedes was a lot easier to raise than the first. That’s presumably down to the up round valuations Blossom is already able to tout.
Citing benchmark data from Cambridge Associates and Preqin, Blossom says it sits in the top 5% of funds of 2018/2019 vintage in the U.S. and EU. Although, less than a year old, I would stress that it is still very early days.
More broadly, Brown and Blossom’s other partners — Imran Gohry, Louise Samet and Mike Hudack — argue that the most successful European companies historically are those that were able to attract U.S. investors but that companies no longer need to relocate to the U.S. to seize the opportunity.
“When we looked at the data it was very clear at the growth stage that, outside of Index and Accel, the most successful European outcomes were driven by the combination of European early-stage investors and top-tier U.S. growth investors,” explained Blossom Capital partner, Imran Ghory, in a statement. “From day one we prioritised building those relationships, both to share knowledge but also provide a bridge for European founders to access the best growth capital as they scale”.
LumApps, the cloud-based social intranet for the enterprise, has closed $70 million in Series C funding. Leading the round is Goldman Sachs Growth, with participation from Bpifrance via its Growth Fund Large Venture.
Others participating include Idinvest Partners, Iris Capital, and Famille C (the family office of Courtin-Clarins). The round brings the total raised by the French company to around $100 million.
Founded in Paris back in 2012, before launching today’s proposition in 2015, LumApps has developed what it describes as a “social intranet” for enterprises to enable employees to better informed, connect and collaborate. The SaaS integrates with other enterprise software such as G Suite, Microsoft Office 365 and Microsoft SharePoint, to centralize access to corporate content, business applications and social features under a single platform. The central premise is to help companies “break down silos” and streamline internal communication.
LumApps customers include Airbus, Veolia, Valeo, Air Liquide, Colgate-Palmolive, The Economist, Schibsted, EA, Logitech, Toto, and Japan Airlines, and the company claims to have achieved year-on-year revenue growth of 100%.
“Our dream was to enable access to useful information in one click, from one place and for everyone,” LumApps founder and CEO Sébastien Ricard told TechCrunch when the company raised its Series B early last year. “We wanted to build a solution that bridged [an] intranet and social network, with the latest new technologies. A place that users will love.”
Since then, LumApps has added several new offices and has seven worldwide: Lyon, Paris, London, New York, Austin, San Francisco, and Tokyo. Armed with additional funding, the company will continue adding significant headcount, hiring across engineering, product, sales and marketing. There are also plans to expand to Canada, more of Asia Pacific, and Germany.
“We’re actually looking at hiring 200 people minimum,” Ricard tells me. “We’re growing fast and have ambitious plans to take the product to new heights, including fulfilling our vision of making LumApps a personal assistant powered by AI. This will require a significant investment in top engineering/AI talent globally”.
Asked to elaborate on what machine learning and AI could bring to a social intranet, Ricard says the vision is to make LumApps a personal assistant for all communications and workflows in the enterprise.
“We see a future where this personal assistant can make predictive suggestions based on historical data and actions. Applying AI to prompt authors with suggested content, flagging important items that demand attention, and auto-archiving old content, are a few examples. Managing the massive troves of content and data companies have today is critical”.
Ricard also sees AI playing a big role in data security. “Employees have a high-degree of control with regard to data sharing and AI can help manage what employees can share in the workplace. This is more long-term but it’s where we’re headed,” he says.
“In the short-term, we’re making investments in automating as many workflows as possible with the goal of reducing or eliminating administrative tasks that keep employees from more productive tasks, including team collaboration and knowledge sharing”.
Meanwhile, LumApps says it may also use part of the Series C for M&A activity. “We’re growing fast and we’re looking at different areas for expansion opportunities,” Ricard says. “This includes retail and manufacturing and some business functions like HR, marketing and communications. We don’t have concrete plans to acquire any companies at the moment but we are keeping our options open as acquiring best-in-breed technologies often makes more sense from a business perspective than building it yourself”.
Shyft is announcing that it has raised $15 million in Series A funding to make the moving process less painful — specifically in the situations where your employer is paying for the move.
There other startups are looking to offer concierge-type services for regular moving — I used a service called Moved last year and liked it. But Shyft co-founder and CEO Alex Alpert (who’s spent years in the moving business) told me that there are no direct competitors focused on corporate relocation.
“Even at the highest levels, the process is totally jacked up,” Alpert said. “We saw an opportunity to partner with corporations and relocation management companies to build a customized, tech-driven experience with more choices, more flexibility and to be able to navigate the quoting process seamlessly.”
So when a company that uses Shyft decides to relocate you — whether you’re a new hire or just transferring to a new office — you should get an email prompting you to download the Shyft app, where you can chat with a “move coach” who guides you through the process.
You’ll also be able to catalog the items you want to move over a video call and get estimates from movers. And you’ll receive moving-related offers from companies like Airbnb, Wag, Common, Sonder and Home Chef.
And as Alpert noted, Shyft also partners with more traditional relocation companies like Graebel, rather than treating them as competitors.
The company was originally called Crater and focused on building technology for creating accurate moving estimates via video. It changed its name and its business model back in 2018 (Alpert acknowledged, “It wasn’t a very popular pitch in the beginning: ‘Hey, we’re building estimation software for moving companies.'”) but the technology remains a crucial differentiator.
“Our technology is within 95% accurate at identifying volume and weight of the move,” he said. “When moving companies know the information is reliable, they can bid very aggressively.”
As result, Alpert said the employer benefits not just from having happier employees, but lower moving costs.
The new funding, meanwhile, was led by Inovia Capital, with participation from Blumberg Capital and FJ Labs.
“There’s a total misalignment between transactional relocation services and the many logistical, social, and lifestyle needs that come with moving to a new city,” Inovia Partner Todd Simpson said in a statement. “As businesses shift towards more distributed workforces and talent becomes accustomed to personalized experiences, the demand for a curated moving offering will continue to grow.”
Today we’re taking a moment to discuss the amount of money going into startups building OKR software. After covering WorkBoard’s recent round, I’ve noticed OKR software and services everywhere, even in Twitter ads that I somehow can’t avoid.
But surely there can’t be too many startups focused on OKR-related software and services? To answer that, let’s take a moment to detail out some of the startups in the space and their venture history. Leaning on my own research and some work by G2, this should be an entertaining way to spend our morning. Doubly so as several startups that we’ll discuss below (WorkBoard and Gtmhub, among others) are growing their ARR by several hundred percent each year, at the moment.
We’ll start with the world’s fastest definition of what OKRs are, and then dive in.
Good morning, friends, and welcome back to TechCrunch’s Equity Monday, a short-form audio hit to kickstart your week. Equity’s regular, long-form shows still land each and every Friday, including this entry from just a few days ago.
This morning, coming to you early from the frozen tundra of the American East Coast, it’s Tuesday. That’s because yesterday was a holiday in the United States, so we took the day to work a little bit less than usual. But that doesn’t mean we’d skip an episode, so let’s dive into topics:
And that was all the time that we had. We’re back Friday and Monday.
This morning FloQast, an LA-area startup, announced that it closed a $40 million Series C led by Norwest Venture Partners. The company also told TechCrunch in an interview that it raised a $20 million inside round between today’s investment and its 2017 Series B. Including today’s infusion, the firm has raised a little over $90 million.
The small inside round, however, wasn’t executed because the firm was low on options at the time. Instead, FloQast chose it over larger term sheets, using the cash to help launch a new product. It then raised the round we’re discussing today at a higher valuation. What did FloQast launch, and what impact did that choice have on its business? Let’s talk about what FloQast sells to help us answer both questions.
FloQast sells what it calls “close management software,” which might not mean much if you aren’t read-up on accounting. So, TechCrunch got FloQast CEO Mike Whitmire on the phone to explain it in more detail. According to the technology executive, his company helps “teams collaborate around the month end close, we help them communicate [and] stay on the same page with this process that occurs at the end of every month. And then we provide some light automation around [the] tie-out and reconciliation process, which is one of the steps of actually closing the books.”
Why does all that matter? Because a company can’t report its financial results until its books (accounts) are closed (finalized). So, Whitmire explained, you can’t get to a 10-Q or other bedrock financial report without this sort of work. And given that every company in the world has books that need closing you can see where FloQast fits into the business landscape.
FloQast doesn’t target every business, however. According to Whitmire, when a company reaches “five people in the corporate accounting department” is “where the pain starts to present itself” that FloQast wants to help with. And, in his view, the more complex a business becomes, the larger the need for the sort of help that his company’s software can provide.
You can see where we’re going with this by now. If not, here’s some help: If FloQast’s product works for larger companies, how quickly is its revenue (measured in annual recurring revenue, or ARR) growing, and, more precisely, how quickly is its average annual contract value (ACV) expanding?
Earlier we noted that FloQast decided to raise a small round before its Series C, using that money to launch a new product before raising its later, larger investment. That product, something called “AutoRec,” uses what the company calls “AI” to help reconcile accounts more quickly than would otherwise be possible.
The wager, launching that product before its Series C, paid off. Last year FloQast’s annual contract value (ACV) rose 60%. That gain was driven, according to the CEO, by the “new AutoRec product [helping add] more value” to contracts, and his company focusing more on upper-market customers. Its ACV growth helped FloQast’s growth stay consistent in percentage terms, with the CEO telling TechCrunch that his firm grows like “clockwork,” doubling its ARR on average every year. And, the company’s SaaS metrics look good: Including customer churn, Floqast has net retention of 115%, which is solid.
Summarizing his company’s last year or so, Whitmire said that FloQast “cut [its] cash burn, became very efficient, grew at a similar clip to what we’ve grown historically, maintained our net revenue retention number, and had this massive ACV kick.” It’s not hard to see, then, how FloQast put together its latest round.
So, the LA area really is more than Snap and Bird. You can build big SaaS companies there too.
AppsFlyer has raised a massive Series D of $210 million led by General Atlantic.
Founded in 2011, the company is best known for mobile ad attribution — allowing advertisers to see which campaigns are driving results. At the same time, AppsFlyer has expanded into other areas like fraud prevention.
And in the funding announcement, General Atlantic Manager Director Alex Crisses suggested that there’s a broader opportunity here.
“Attribution is becoming the core of the marketing tech stack, and AppsFlyer has established itself as a leader in this fast-growing category,” Crisses said. “AppsFlyer’s commitment to being independent, unbiased, and representing the marketer’s interests has garnered the trust of many of the world’s leading brands, and we see significant potential to capture additional opportunity in the market.”
Crisses and General Atlantic’s co-president and global head of technology Anton Levy are both joining AppsFlyer’s board of directors. Previous investors Qumra Capital, Goldman Sachs Growth, DTCP (Deutsche Telekom Capital Partners), Pitango Venture Capital and Magma Venture Partners also participated in the round, which brings the company’s total funding to $294 million.
AppsFlyer said it works with more than 12,000 customers including eBay, HBO, Tencent, NBC Universal, Minecraft, US Bank, Macy’s and Nike. It also says it saw more than $150 million in annual recurring revenue in 2019, up 5x from its Series C in 2017.
Co-founder and CEO Oren Kaniel said that as attribution becomes more important, marketers need a partner they can trust. And with AppsFlyer driving $28 billion in ad spend last year, he argued, “There’s a lot of trust there.”
Kaniel added, “It doesn’t really matter how sophisticated your marketing stack is, or whether you have AI or machine learning — if the data feed is wrong … everything else will be wrong. I think companies realize how sensitive and critical this data platform is for them. I think that in the past couple of years, they’re investing more in selecting the right platform.”
In order to ensure that trust, he said that AppsFlyer has avoided any conflicts of interest in its business model — a position that extends to fundraising, where Kaniel made sure not to raise money from any of the big players in digital advertising.
And moving forward, he said, “We will never go into media business, never go into media services. We want to maintain our independence, we want to maintain our previous unbiased positions.”
Kaniel also argued that while he doesn’t see regulations like Europe GDPR and California’s CCPA hindering ad attribution directly, the regulatory environment has justified AppsFlyer’s investment in privacy and security.
“Even more than just being in compliance, [with AppsFlyer], marketers all of a sudden have full control of their data,” he said. “Let’s say on the web, probably your website is sending data and information to partners who don’t need to have access to this ifnormation. The reason is, there’s no logic, there’s a lot of pixels going everywhere, the publishers don’t have control. If you use our platform, you have full control, you can configure the exact data points that you’d like to share.”
Stasher, the luggage storage app for travelers, has raised $2.5 million in additional funding. Leading the round is Venture Friends, along with various angels, including Johan Svanstrom, former president of Expedia-owned Hotels.com.
Launched in 2015, and now calling itself a “sharing economy solution” to luggage storage, the Stasher marketplace and app connects travelers, event attendees and vacation rental guests with local shops and hotels that can store their luggage on a short to medium-term basis.
Insurance is included with each booking, and items stored at a StasherPoint are covered for damage, loss and theft up to the value of £1,000.
Meanwhile, the revenue share for hosts is roughly 50% of the storage fee. The idea is that brick and mortar shops can access an additional revenue stream, thanks to the so-called sharing economy.
More broadly, the problem Stasher wants to solve is that having to carry around luggage can often stop you enjoying part of your day when traveling, time that is otherwise wasted. “If you’ve ever been forced out of your Airbnb at 10am, you may be familiar with the issue,” co-founder Anthony Collias told me back in 2018.
To that end, the Stasher network has grown a lot since then, and now has a presence in 250 cities, up from 20. This has included bringing the luggage storage app to the U.S. and Australia.
This has seen the startup partner with the likes of Klook, Sonder, Marriott and Hotels.com, along with brands such as Premier Inn, Expedia, Holiday Express, OYO and Accor.