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.
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.
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.
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.
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.
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.
Yesterday evening Palantir, the quasi-secretive data mining and analysis firm, publicly announced that it has privately filed to go public.
The disclosure came in the wake of Palantir raising new capital, taking on hundreds of millions of dollars before its planned public offering. According to Crunchbase data, Palantir has raised billions while private, making its debut a marquee affair in the worlds of technology, startups and venture capital.
As TechCrunch reported yesterday, Palantir has a controversial product history, including helping locate immigrants for the Immigration and Customs Enforcement agency, connecting databases for intelligence agencies and recently winning no-bid contracts to gather data about the COVID-19 pandemic for the White House Pandemic Task Force.
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The company’s filing comes after a long incubation period; it’s been 17 years since Palantir’s founding in 2003. Since then, its reported financial performance and fundraising history have become sufficiently convoluted that I couldn’t tell you this morning how big the company really is or how much it raised before its most recent investment.
To prep us for its eventual public IPO filing, let’s go back in time and collect data points from Palantir’s reported history. This way when we do get the company’s S-1 filing, we’ll better understand what we’re looking at.
Even with companies that aren’t privacy-conscious, it can be hard to craft a comprehensive history of their business activities from when they were private. With Palantir, it’s even trickier.
Still, leaning on more than a decade of TechCrunch reporting, Crunchbase data, other publications and Craft.co, what follows is a reasonable look at what has been reported about Palantir through time. Of course, we’ll know more when we get the S-1.
A few years back, startups focusing on artificial intelligence had a whiff of bullshit about them; venture capitalists became inured to young tech companies claiming that their new AI-powered product was going to change the world as hype exceeded product reality.
But in the time since, AI-powered startups have matured into real companies, with investors stepping up to fund their growth. In niches, from medical imaging, of course, to speech recognition, machine learning and deep learning and neural nets and everything else that one might scoop into the AI bucket has seemed to have grown neatly in recent quarters.
But AI is not the only startup niche appearing to enjoy tailwinds lately. No-code and low-code startups have also enjoyed increasing media recognition, and, as TechCrunch has covered, notable venture capital rounds.
Sitting in the middle of the two trends, a startup called MonkeyLearn wants to bring low-code AI to companies of all sizes. And the firm just raised $2.2 million. Let’s take a look.
Starting with the round, MonkeyLearn has raised $2.2 million in a round led by Uncork Capital and Bling Capital. Speaking with Raúl Garreta, a co-founder at the company and also its CEO, TechCrunch learned that MonkeyLearn started off as a more developer-focused service that provided machine learning tooling via an API. But after demand materialized from people who couldn’t code to use the company’s tech for text analysis, the company wound up heading in a slightly different direction.
Garreta gave TechCrunch a demo of the company’s service, which allows users to upload data — think rows of text in an Excel file, for example — and quickly train MonkeyLearn’s software to parse out what they are looking for. After the model is trained over the course of a few minutes, it can then be set to work on a full data set.
According to Garreta, text analysis has a lot of demand in corporate environments, from categories like support ticket sorting to sentiment analysis.
But MonkeyLearn’s product that TechCrunch saw is not the company’s final vision. Today the service focuses on data analysis. In time, Garreta wants it to do more with data visualization, providing graphing and other similar outputs to give more of a dashboard-feel to its product.
At the core of MonkeyLearn’s early market traction that helped it land its seed round is the ever-increasing need for non-developers to collect, parse, act on and share data inside of their workplace. If you’ve ever worked nearby to a startup’s marketing or customer success team, you understand this phenomenon. MonkeyLearn wants to give non-developer teams the tools they need to understand data sets without forcing them to go find the engineering team and argue for a spot on the roadmap.
“Our vision is to make AI approachable by providing a toolkit for teams to actually use AI in their daily operations,” Garreta said in a release. MonkeyLearn is theoretically well-situated in the market. Companies are increasingly data-driven at the same time as the market is strapped for employees who can make data sing.
The startup has a free tier, and a few paid tiers, along with add-ons and a one-off option. You can call that the “all of the above” pricing model, which is fine, given the youth of the company; startups are allowed to experiment.
After slower than anticipated early fundraising, MonkeyLearn told TechCrunch that it could have raised double in its seed round what it wound up accepting.
What plans does the company have for the new capital? A more aggressive go-to-market motion, and a more formal sales team, it said. As MonkeyLearn sells to to mid-market and enterprise firms, Garreta explained, a more formal sales team is needed, though he also emphasized that founders must start the selling process at a startup.
As with most seed companies that raise capital, there’s a lot to like with MonkeyLearn. Let’s see how well it executes and how fast it can get to a Series A.
The remit remains the same, however: targeting Spanish startups with an international outlook, the seed-stage firm plans to invest from €200,000 to €2 million, writing first checks in 25-30 companies. A portion of the fund will also be set aside for follow-on funding for the most promising of its portfolio.
“We’re business model and sector agnostic, and we currently have a healthy mix of B2B and B2C companies across a wide variety of sectors, including travel, fintech, insurtech and others,” says K Fund .
Following in the footsteps of Europe’s Heartcore Capital, K Fund is launching a pre-seed funding program, too. Dubbed “K Founders,” it will seek out companies that are less than 6 months old, and invest up to €100,000 pre-seed. The program will initially be quite modest in size, targeting between 10 and 20 startups.
“We won’t take board seats in these companies and we won’t have preferential rights. We’ll use convertible notes to speed up the process and we have a commitment of taking no more than three weeks from first meeting to money in the bank,” explains K Fund’s Jaime Novoa.
“Since we also believe in building bridges with other co-investors (funds and business angels), we’ll be super happy to share deals with co-investors to reach the capital needed by the companies.”
Meanwhile, K Fund’s first fund portfolio includes online travel agency Exoticca (which says that in 2019 more than 35,000 people from 6 different countries traveled to 50 destinations using its platform), HR software Factorial (which has more than 60,000 clients in 40 different countries and just raised a $16 million Series A round from CRV), insurtech startup Bdeo, and conversational messaging tech provider Hubtype.
“We continue to be super bullish on the Spanish startup ecosystem and Southern Europe in general, with markets such as Portugal or Italy that we believe are punching above their weight,” adds the VC firm. “We’ve already invested in four Spanish startups with the new fund; all of them are going after huge markets, and have experienced professionals in their founding team”.
One of those is sales prospecting platform Bloobirds. The others will be disclosed in the coming weeks.
OwnBackup has made a name for itself primarily as a backup and disaster recovery system for the Salesforce ecosystem, and today the company announced a $50 million investment.
Insight Partners led the round with participation from Salesforce Ventures and Vertex Ventures. This chunk of money comes on top of a $23 million round from a year ago, and brings the total raised to over $100 million, according to the company.
It shouldn’t come as a surprise that Salesforce Ventures chipped in when the majority of the company’s backup and recovery business involves the Salesforce ecosystem, although the company will be looking to expand beyond that with the new money.
“We’ve seen such growth over the last two and a half years around the Salesforce ecosystem. and the other ISV partners like Veeva and nCino that we’ve remained focused within the Salesforce space. But with this funding, we will expand over the next 12 months into a few new ecosystems,” company CEO Sam Gutmann told TechCrunch.
In spite of the pandemic, the company continues to grow, adding 250 new customers last quarter, bringing it to over 2000 customers and 250 employees, according to Gutmann.
He says that raising the round, which closed at the beginning of May had some hairy moments as the pandemic began to take hold across the world and worsen in the U.S. For a time, he began talking to new investors in case his existing ones got cold feet. As it turned out, when the quarterly numbers came in strong, the existing ones came back and the round was oversubscribed, Gutmann said.
“Q2 frankly was a record quarter for us, adding over 250 new accounts, and we’re seeing companies start to really understand how critical this is,” he said.
The company plans to continue hiring through the pandemic, although he says it might not be quite as aggressively as they once thought. Like many companies, even though they plan to hire, they are continually assessing the market. At this point, he foresees growing the workforce by about another 50 people this year, but that’s about as far as he can look ahead right now.
Gutmann says he is working with his management team to make sure he has a diverse workforce right up to the executive level, but he says it’s challenging. “I think our lower ranks are actually quite diverse, but as you get up into the leadership team, you can see on the website unfortunately we’re not there yet,” he said.
They are instructing their recruiting teams to look for diverse candidates whether by gender or ethnicity, and employees have formed a diversity and inclusion task force with internal training, particularly for managers around interviewing techniques.
He says going remote has been difficult, and he misses seeing his employees in the office. He hopes to have at least some come back, before the end of the summer and slowly add more as we get into the fall, but that will depend on how things go.
Organise, a U.K. startup that has built a platform to help workers organise and campaign for better rights, has raised £570,000 in seed funding.
The round is led by Ada Ventures, fitting into the VC firm’s remit to back “overlooked markets and founders”. Also participating is Form Ventures, RLC Ventures (a seed-stage fund who commit a portion of their profits back to charitable causes chosen by founders), and Ascension Ventures via its Fair By Design Fund.
Founded in 2017 by CEO Nat Whalley and CTO Bex Hay, Organise describes itself as a “worker-driven network” that provides and range of digital tools and support to enable anyone to start a campaign to improve their working conditions. The idea is to combine the power of collective action, traditionally harnessed by trade unions, with the reach and insight of modern digital campaigns.
That makes sense. given its founders’ resumes. Whalley has a background in political campaigning at 38 Degrees and Avaaz, and also ran ChangeLab, a digital agency building campaigning technology. And Hay was formerly the tech director at 38 Degrees, and also ran Amazon Anonymous, leading her to be dubbed “the thorn in Jeff Bezos’ side”.
“With so many people working remotely, it’s harder to share your problems with colleagues or raise issues about work,” says Whalley. “When people run into issues around unsafe environments or concerns about unfair pay or maternity rights, they have nowhere to turn for support. We provide a way to bring workers together and give them the tools needed to make themselves heard. Our platform empowers individuals, groups and workplaces, helping them to affect meaningful change”.
Whalley explains that users discover Organise in one of three ways: they’re looking to change something in their workplace and discover Organise as a way to make that happen; they join a campaign someone else in their workplace has already started; or they join a campaign calling for a national-level change related to the world of work.
“When people join Organise, we ask them to share their workplace and employment status,” she says. “The platform is then able to connect employees to existing networks of people from the same organisation, immediately enabling them to speak with one, much louder voice. For new campaigns, we can help people build up the awareness they need to get colleagues or workers from across their industry on board.
“Once part of the network, users are in control of their campaigns. They decide what change they want and we provide the tools to make it happen. This might be through surveys, calls to sign petitions, or open letters to decision makers”.
To date, Organise has enabled workers to mount successful campaigns against unjust working practices at companies including McDonald’s, Ted Baker, Amazon, Uber and Deliveroo. No doubt helped by the coronavirus crisis and resulting pressure on workers, the platform has grown from 90,000 to 400,000 members in the last three months.
Asked if Organise is designed to be an alternative to unions or to work with them, Whalley says the platform is complementary to union activities and that many of its members are union members too.
“They use the Organise tools to enhance their impact and increase their reach,” she adds. “For others, Organise makes it possible to bring colleagues together around a single issue where time is of the essence. The dynamic nature of the tools we provide and the speed at which campaigns can get off the ground can be exactly what employees need to drive through meaningful change”.
On competitors, Whalley says Organise is the only platform empowering workers’ rights at scale. There are also whistleblowing platforms in existence, like Vault, which she points out is paid for by companies, “meaning it’s not ultimately in the interests or control of the workers”.
Meanwhile, the business model is simple enough and, I’m told, is working. Organise is free for anyone to join but also offers paid-for, enhanced support for those who need it.
Around 5% of users pay a subscription (usually £1 – £2 a week, depending on income) for enhanced support. This includes employment advice and access to a peer-to-peer forum. “Because it’s paid for by the individuals who will ultimately benefit from it, we can scale and sustain impact at the same time,” says Whalley.
Indian online learning platform Unacademy said on Tuesday it has acquired Chandigarh-based startup PrepLadder for $50 million as the major edtech giant scouts for deals to expand its presence in the country.
PrepLadder offers courses aimed at nursing students. The two-year-old startup, which never raised any capital from external investors, has more than 80,000 subscribers, said Deepanshu Goyal, its founder on Tuesday.
The acquisition of PrepLadder comes as both Unacademy and Byju’s — the two edtech leaders in India — have engaged with several startups in recent months to further their dominance in the nation. In a call with reporters today, Gaurav Munjal, co-founder and chief executive of Unacademy, said he was open to talking with more startups to see opportunities to work together.
Facebook-backed Unacademy, which began as a YouTube channel in 2015, has amassed over 30 million learners on the platform, more than 200,000 of which are paid subscribers. More than 700,000 users access its app and website each day.
More to follow…
You may have noticed that The Daily Crunch is publishing about six hours later than usual. Do not be alarmed! We decided that sending the newsletter later in the day was a better fit for the TechCrunch news cycle — hopefully, there will be fewer days when we hit Publish and then groan when we see a giant story break five minutes later.
We’re also taking the opportunity to rethink the newsletter format. The mission hasn’t changed — the goal is to deliver the day’s big tech headlines in an email that you can read in just a couple of minutes. But we know that different readers are focused on different areas of TechCrunch’s coverage, so moving forward, The Daily Crunch will be organized to make it easier to find the news that interests you.
Without further ado: Here’s your Daily Crunch for July 6, 2020.
The big story: Uber confirms Postmates acquisition
The reports last week were true: Uber announced today that it’s acquiring Postmates in an all-stock deal worth $2.65 billion. It looks like the restaurant delivery market is consolidating — Uber previously tried to acquire Grubhub, which ended up selling to the European company Just Eat Takeaway instead. The company said Postmates will continue to operate as a standalone app, but tech and delivery operations will be consolidated.
Meanwhile, Alex Wilhelm took a close look at Uber’s finances to help Extra Crunch readers understand why the company’s stock is up today, arguing that the acquisition could help Uber Eats “grow more quickly while bringing down its losses as a percent of revenue.”
The tech giants
US tech giants halt Hong Kong police help — After the Chinese government has passed a new security law undermining protections for Hong Kong, both Facebook and Twitter said that they will no longer process demands for user data from Hong Kong authorities. (In Facebook’s case, this also applies to WhatsApp.)
Instagram Reels tested in India following TikTok’s ban — Instagram may be taking advantage of India’s decision to ban TikTok by expanding its Reels feature, which allows users to create 15-second videos set to music.
Intel to invest $253.5 million in India’s Reliance Jio Platforms — Intel joins General Atlantic, Facebook and Silver Lake as an investor in India’s top telecom operator.
Startups, funding and venture capital
Here’s a list of tech companies that the SBA says took PPP money — Bolt Mobility, Getaround, Luminar, Stackin, TuSimple and Velodyne all took loans of $150,000 or more from the Paycheck Protection Program, according to the U.S. Treasury Department. But confusingly, some of the firms on the list (including Bird and Index) denied taking any loans.
Sequoia announces $1.35 billion venture and growth funds for India and Southeast Asia — Sequoia Capital India made more than 50 investments in India last year, putting it ahead of any other VC firm in the country.
Payfazz gets $53 million to give more Indonesians access to financial services — This Indonesian startup offers a number of mobile financial services, including bill payments and loans.
Advice and analysis from Extra Crunch
Four views: Is edtech changing how we learn? — Devin Coldewey, Natasha Mascarenhas, Alex Wilhelm and Danny Crichton have thoughts about whether digital learning can make quality education more accessible, or will simply widen existing divides.
As COVID-19 surges, 3D printing is having a moment — 3D printing has fallen out of the spotlight over the past couple of years, but the COVID-19 pandemic has changed all that.
(Reminder: Extra Crunch is our subscription membership program, designed to democratize information about startups. You can sign up here.)
‘Hamilton’ gives Disney+ a holiday weekend bump in US, with app downloads up 74% — That’s according to data from Apptopia.
Original Content podcast: ‘Eurovision Song Contest: The Story of Fire Saga’ is a goofy delight — Every week, Darrell Etherington, Jordan Crook and I review the latest streaming movies and shows in a freewheeling discussion. In this episode, we were all pleasantly surprised by the new Will Ferrell movie on Netflix.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Why is Uber so far ahead of Lyft, its domestic ride-hailing rival that is suffering from the same economic impacts? It appears that investors are heartened that Uber has closed its Postmates acquisition after both firms danced around each other for some time, leading to all sorts of leaks that wound up being not coming true.
The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.
This explains why Uber investors are excited about Uber’s Postmates buy; what about the smaller company is making Uber shares so buoyant? Let’s take a walk through the numbers this morning.
If we reexamine Uber Eats’ recent growth, contrast it to Ubers Rides’ own growth, mix in Eats’ profitability improvements along with Postmates’ own financial results, we can start to see why public investors might be heartened by the deal.
Afterward, we’ll toss in a note about how Postmates may provide Uber some narrative ammunition heading into earnings. This exercise should be fun, and a good break from our recent IPO coverage. Let’s get into the numbers.
In case you are behind, Uber is buying Postmates for $2.65 billion in an all-cash deal. Uber estimated that it would issue around 84 million shares to pay for the transaction. At its share price as of the time of writing, the deal is worth $2.72 billion at Uber’s newer share price. For reference, that price tag is about 4.8% of Uber’s current-moment market cap.
To understand why Uber would spend nearly 5% of its worth to buy a smaller rival, let’s remind ourselves of the performance of the group that it will plug into, namely Uber Eats.
From Uber’s Q1 2020 financial reporting, the following chart will ground our exploration, showing how Eats has performed in recent quarters:
Via Uber’s financial reporting. Q1 2019 on the left, Q1 2020 on the right.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our week-starting primer in which we go over the latest news, dig into the week ahead, talk about some neat funding rounds and dive into the latest big news from the startup world. (You can follow the show on Twitter here, and myself here, if you are so inclined! Don’t forget to check out last Friday’s episode as well. All the cool kids are doing it.)
What a weekend! After some quiet, somewhat dull off-week periods, this weekend brought us twists and turns that were good fun. Most dealt with a possible Uber -Postmates tie up, so we wrote the show to talk about the transaction’s unconfirmed nature.
Then, it got confirmed. So, here’s the second edition of today’s Equity Monday, recast due to the deal’s official nature:
We wrapped this morning wondering if Postmates can provide a narrative boost to Uber, a company that isn’t going to have the best Q2 numbers in its history. With Postmates tucked under its arm going into the earnings call, Uber can double-down on its Uber Eats narrative, flash Postmates around the room and promise that Rides data will get better as well.
Perhaps that would be enough?