Fresh off the announcement of more than $500 million in new capital across two new funds, Seattle-based Madrona Venture Group has announced that they’re adding Anu Sharma and Daniel Li to the team’s list of Partners.
The firm, which in recent years has paid particularly close attention to enterprise software bets, invests heavily in the early-stage Pacific Northwest startup scene.
Both Li and Sharma are stepping into the Partner role after some time at the firm. Li has been with Madrona for five years while Sharma joined the team in 2020. Prior to joining Madrona, Sharma led product management teams at Amazon Web Services, worked as a software developer at Oracle and had a stint in VC as an associate at SoftBank China & India. Li previously worked at the Boston Consulting Group.
I got the chance to catch up with Li who notes that the promotion won’t necessarily mean a big shift in his day-to-day responsibilities — “At Madrona, you’re not promoted until you’re working in the next role anyway,” he says — but that he appreciates “how much trust the firm places in junior investors.”
Asked about leveling up his venture career during a time when public and private markets seem particularly flush with cash, Li acknowledges some looming challenges.
“On one hand, it’s just been an amazing five years to join venture capital because things have just been up and to the right with lots of things that work; it’s just a super exciting time,” Li says. “On the other hand, from a macro perspective, you know that there’s more capital flowing into VC as an asset class than ever before. And just from that pure macro perspective, you know that that means returns are going to be lower in the next 10 years as valuations are higher.”
Nevertheless, Li is plenty bullish on internet companies claiming larger swaths of the global GDP and hopes to invest specifically in “low code platforms, next-gen productivity, and online communities,” Madrona notes in their announcement, while Sharma plans to continue looking at to “distributed systems, data infrastructure, machine learning, and security.”
TechCrunch recently talked to Li and his Madrona colleague Hope Cochran about some of the top trends in social gaming and how investors were approaching new opportunities across the gaming industry.
LAUNCHub Ventures, an early-stage European VC which concentrates mainly on Central Eastern (CEE) and South-Eastern Europe (SEE), has completed the first closing of its new fund at €44 million ($53.5M), with an aspiration to reach a target size of €70 million. A final close is expected by Q2 2021.
Its principal backer is the European Investment Fund, corporates and a number of Bulgarian tech founders and investors.
With this new fund, LAUNCHub aims to invest in 25 startups in the next 4 years. The initial investment range will be between €500K and €2M in verticals such as B2B SaaS, Fintech, Proptech, Big Data, AI, Marketplaces, Digital Health. The fund will also actively invest in the Web 3.0 / Blockchain space, as it has done so since 2014.
LAUNCHub has also achieved a 50:50 gender split in its team, with Irina Dimitrova being promoted to operating partner while Raya Yunakova who joins as an Investor, previously working for PiLabs in London and Mirela Yordanova joins as an Associate, previously leading the startup community at Google for Startups Campus in London.
The investor is mining a rich view of highly skilled developers in the CEE countries where there are approximately 1.3 developers for every 100 people in the workforce. “Central and Eastern Europe’s rapid economic growth has caught the attention of Western investors searching for the next unicorn. The region has huge and still untapped potential with more and more local success stories, paving the way for the next generation of CEE tech founders.” said Todor Breshkov, Founding Partner at LAUNCHub Ventures .
LAUNCHub Ventures competes with other investors like Earlybird in the region, but they tend to invest at a later stage and is more typically a co-investor with LAUNCHub. Nearby Greece also features Greek funds such as Venture Friends and Marathon, but these tend to focus on their core country and diaspora entrepreneurs. Others include Speedinvest (usually focused on DACH) and Credo Ventures, more focused on the Czech Republic and CEE.
LAUNCHub partner and cofounder Stefan Grantchev told me: “Our strategy is to be regional, not to focus specifically on Bulgaria – but to look at all the opportunities in the region of South-Eastern Europe.”
LAUNCHub Ventures has backed companies including:
Giraffe360 (Robotic camera for real estate listing automation, co-investment with Hoxton Ventures and HCVC)
Fite (Premium direct to consumer digital live streaming for sports, followed-on by Earlybird)
GTMHub (The world’s leading and most intuitive OKR software, followed-on by CRV)
FintechOS (Banking and Insurance middleware for automation and digital innovation acceleration, followed-on by Earlybird and OTB)
Cleanshelf (Enterprise SaaS management and optimization platform, followed-on by Dawn Capital)
Office RnD (Co-working and flexible office space management, followed-on by Flashpoint Ventures)
Ferryhopper (Ferry ticketing platform for Southern Europe, co-investment with Metavallon)
Launched in South Korea five years ago, content discovery platform Dable now serves a total of six markets in Asia. Now it plans to speed up the pace of its expansion, with six new markets in the region planned for this year, before entering European countries and the United States. Dable announced today that it has raised a $12 million Series C at a valuation of $90 million, led by South Korean venture capital firm SV Investment. Other participants included KB Investment and K2 Investment, as well as returning investor Kakao Ventures, a subsidiary of Kakao Corporation, one of South Korea’s largest internet firms.
Dable (the name is a combination of “data” and “able”) currently serves more than 2,500 media outlets in South Korea, Japan, Taiwan, Indonesia, Vietnam and Malaysia. It has subsidiaries in Taiwan, which accounts for 70% of its overseas sales, and Indonesia.
The Series C brings Dable’s total funding so far to $20.5 million. So far, the company has taken a gradual approach to international expansion, co-founder and chief executive officer Chaehyun Lee told TechCrunch, first entering one or two markets and then waiting for business there to stabilize. In 2021, however, it plans to use its Series C to speed up the pace of its expansion, launching in Hong Kong, Singapore, Thailand, mainland China, Australia and Turkey before entering markets in Europe and the United States, too.
The company’s goal is to become the “most utilized personalized recommendation platform in at last 30 countries by 2024.” Lee said it also has plans to transform into a media tech company by launching a content management system (CMS) next year.
Dable currently claims an average annual sales growth rate since founding of more than 50% and says it reached $27.5 million in sales in 2020, up from 63% the previous year. Each month, it has a total of 540 million unique users and recommends five billion pieces of content, resulting in more than 100 million clicks. Dable also says its average annual sales growth rate since founding is more than 50%, and in that 2020, it reached $27.5 million in sales, up 63% from the previous year.
Before launching Dable, Lee and three other members of its founding team worked at RecoPick, a recommendation engine developer operated by SK Telecom subsidiary SK Planet. For media outlets, Dable offers two big data and machine learning-based products: Dable News to make personalized recommendations of content, including articles, to visitors, and Dable Native Ad, which draws on ad networks including Google, MSN and Kakao.
A third product, called karamel.ai, is an ad targeting solution for e-commerce platforms that also makes personalized product recommendations.
Dable’s main rivals include Taboola and Outbrain, both of which are headquartered in New York (and recently called off a merger), but also do business in Asian markets, and Tokyo-based Popin, which also serves clients in Japan and Taiwan.
Lee said Dable proves the competitiveness of its products by running A/B tests to compare the performance of competitors against Dable’s recommendations and see which one results in the most clickthroughs. It also does A/B testing to compare the performance of articles picked by editors against ones that were recommended by Dable’s algorithms.
Dable also provides algorithms that allow clients more flexibility in what kind of personalized content they display, which is a selling point as media companies try to recover from the massive drop in ad spending precipitated by COVID-19 pandemic. For example, Dable’s Related Articles algorithm is based on content that visitors have already viewed, while its Perused Article algorithm gauges how interested visitors are in certain articles based on metrics like how much time they spent reading them. It also has another algorithm that displays the most viewed articles based on gender and age groups.
Ajaib Group, an online investment platform that says it now runs the fifth-largest stock brokerage in Indonesia by number of trades, announced it has raised a $25 million Series A led by Horizons Ventures, the venture capital firm founded by Li Ka-Shing, and Alpha JWC. Returning investors SoftBank Ventures Asia, Insignia Ventures and Y Combinator also participated in the round, which was made in two closes.
Founded in 2019 by chief executive officer Anderson Sumarli and chief operating officer Yada Piyajomkwan, Ajaib Group focuses on millennials and first-time investors, and currently claims one million monthly users. It has now raised a total of $27 million, including a $2 million seed round in 2019.
Stock investment has a very low penetration rate in Indonesia, with only about 1.6 million capital market investors in the country, or less than 1% of its population (in comparison, about 55% of Americans own stocks, according to Gallup data).
The very low penetration rate, coupled with growing interest in the capital market among retail investors during the pandemic, has spurred VC interest in online investment platforms, especially ones that focus on millennials. Last week, Indonesian investment app Bibit announced a $30 million growth round led by Sequoia Capital India, while another online investment platform, Bareksa, confirmed an undisclosed Series B from payment app OVO last year.
Ajaib Group’s founders said it differentiates as a low-fee stock trading platform that also offers mutual funds for diversification. Bibit is a robo-advisor for mutual funds, while Bareksa is a mutual fund marketplace.
In an email, Sumarli and Piyajomkwan told TechCrunch that the stock investment rate is low in Indonesia because it is typically done by high net-worth individuals who use offline brokers and can afford high commissions. Ajaib Group was launched in 2019 after Sumarli became frustrated by the lack of investment platforms in Indonesia where he could also learn about stock trading.
Inspired by companies like Robinhood in the United States and XP Investimentos in Brazil, Ajaib Group was created to be a mobile-first stock trading platform, with no offline brokers or branches. It appeals to first-time investors and millennials with a simple user interface, in-app education features and a community where people can share investment ideas and low fees.
Since people prefer to invest small amounts when trying out the app for the first time, Ajaib requires no minimums to open a brokerage account. Piyajomkwan said “we typically see investors triple their investment amount within the second month of investing with Ajaib.”
Ajaib Group’s platform now includes Ajaib Sekuritas for stock trading and Ajaib Reksadana for mutual funds. The company says that Ajaib Sekuritas became the fifth-largest stock brokerage in Indonesia by number of trades just seven months after it launched in June 2020.
The Indonesian government and Indonesia Stock Exchange have launched initiatives to encourage more stock investing. Some of Ajaib Group’s Series A will be used for its #MentorInvestai campaign, which works with the government to educate millennials about investing and financial planning. The round will also be spent on expanding Ajaib’s tech infrastructure and products, and to hire more engineers.
Ajaib may eventually expand into other Southeast Asian markets, but for the near future, it sees plenty of opportunity in Indonesia. “Ajaib was built with regional aspiration, having two founders from the two biggest capital markets in Southeast Asia, Indonesia and Thailand,” Piyajomkwan said. “But for the immediate term, we are focused on Indonesia as investment penetration is still low and there are many more millennial investors we can serve.”
Roblox is now one of the world’s most valuable private companies in the world after a monster Series H raise brings the social gaming platform a stratospheric $29.5 billion valuation. The company won’t be private for long, though.
The $520 million raise led by Altimeter Capital and Dragoneer Investment Group is a significant cash influx for Roblox, which had previously raised just over $335 million from investors according to Crunchbase. The Investment Group of Santa Barbara, Warner Music Group, and a number of current investors, also participated in this round.
In February of 2020, the company closed a $150 million Series G led by Andreessen Horowitz which valued the company at $4 billion.
The gaming startup has initially planned an IPO in 2020, but after the major first day pops of DoorDash and Airbnb, the company leadership reconsidered their timeline, according to a report in Axios. Those major say-one share price pops left significant money on the table for the companies selling those shares, an outcome Roblox is likely looking to avoid. Today, the company also announced that it plans to enter the public markets via a direct listing.
Roblox’s 7x valuation multiple signals just how feverish public and private markets are for tech stocks. The valuation also highlights how investors foresee the company benefiting from pandemic trends which pushed more users online and towards social gaming platforms. In a 2019 prospectus, the company shared that it had 17.6 million users, now Roblox claims to have 31 million daily active users on its platform.
A year ago this week Ada Ventures — a UK/Europe focused VC with an ‘impact twist’ aiming to invest in diverse founders tacking societal problems — launched on stage at Techcrunch Disrupt. (You can watch the video of that launch below).
Today Ada announces that it has closed its first fund at $50 million. Cornerstone LPs in the fund include Big Society Capital, an entity owned by the UK government, as well as the the British Business Bank.
Check Warner, a co-founding partner, said the raise was oversubscribed: “We weren’t even sure we’d be able to raise $30 million. And then to actually get to 38 million pounds then $50 million, which was over our initial hard cap of 35 is, is really, really big.” All of the fund was raised on video calls during the 2020 pandemic.
Geared as a ‘first-cheque’ seed fund, Ada is trying to tackle that thorny problem that to a large extent the VC industry itself created: the ‘mirroring’ that goes on when white male investors invest in other white men, thus ignoring huge swathes of society. Instead, it’s aiming to invest in the best talent in the UK and Europe, regardless of race, gender or background, with the specific aim of “creating the most diverse pipeline, and portfolio, on the continent”, while tackling issues including mental health, obesity, workers rights and affordable childcare.
It appears to be well on its way. In 2020, Ada invested in eight seed-stage companies tackling the above issues. Four of the eight companies have female CEOs. This brings the total portfolio size to 17, including the ‘pre-fund’ portfolio.
In terms of portfolio progress: Huboo Technologies raised a £14m Series A, which was led by Stride VC and Hearst Ventures; Bubble delivered tens of thousands of hours of free childcare to NHS staff; and Organise grew their members from 70,000 to more than 900,000, and campaigned for the government to provide support for the self-employed during COVID-19.
On Ada Lovelace Day this October, Ada launched its own Angel program, enabling five new Angel investors to write their first cheques. This is not dissimilar to similar Angel programs run by other VCs. It also has a network of 58 ‘Ada Scouts’ resulting in around 20% of deal flow, with two investments now made across the portfolio that were scout-sourced.
This is no ordinary scout network, however. Ada’s Scout community includes the leaders of Hustle Crew, a for-profit working to make the tech industry more inclusive, and Muslamic Makers, a community of Muslims in tech.
In 2021, Ada says it will continue to grow its network of Ada Scouts across the UK, with a focus on the LGBTQ+ community, disabled entrepreneurs, and regions outside of London.
And Scout network is not just ‘for show’, as Warner told me: “We have spoken to the Iranian Women’s Association and Islamic makers and all these groups that are underrepresented within tech and VC. And they bring us companies. And if we end up investing in these companies, we pay them both an upfront cash fee and also a carried interest share. So there are quite a few things that make it distinct from other scout programs. Many other scout programs just take existing investors like existing angels, and give them more capital and double up their investments. We’re actually enabling a whole new group of people who wouldn’t otherwise be able to get access to VC. We involve them in our due diligence process, we get their insight into markets that we wouldn’t necessarily understand, like the Shariya finance market, for example. So there are quite a few things that we’re doing differently. And we now have 58 of these scouts, who drive between 10 and 20% of our deal flow on any given month.”
Warner continued: “When we launched we couldn’t have predicted the seismic changes and tragedy brought on by Covid-19, or the social dislocation precipitated by the killing of George Floyd. These events have provided the backdrop of the first year of deployment from Ada Ventures Fund I. In light of these events, the Ada Ventures strategy feels more poignant — and urgent — than it has perhaps ever been.”
In an exclusive interview with TechCrunch, Warner and co-founder Matt Penneycard admitted the fund is not ‘labeled; as an ‘Impact fund’ but that it shares a similar orientation.
Penneycard said: “The difference, the difference is often in the eye of the beholder. In that, it’s the way the investor wants to bucket it. Some investors might see us as an impact fund if they want to, and that’s fine. Other investors see the massive financial arbitrage that you get with a fund like ours, just because you’re looking in very different places to other funds. So, you’ve got more coming in the top of the funnel, if you’ve got a decent process, you should get a better outcome. And so with some of our investors, that’s kind of one of the primary reasons they’re investing, they think we’re going to generate superior returns to other funds, because of where were are looking. It isn’t pure impact. It’s a real fund, it just happens to have the byproduct of quite deep, meaningful social impact.”
Nearly three years after it was first launched, Amazon Web Services’ SageMaker platform has gotten a significant upgrade in the form of new features making it easier for developers to automate and scale each step of the process to build new automation and machine learning capabilities, the company said.
As machine learning moves into the mainstream, business units across organizations will find applications for automation, and AWS is trying to make the development of those bespoke applications easier for its customers.
“One of the best parts of having such a widely-adopted service like SageMaker is that we get lots of customer suggestions which fuel our next set of deliverables,” said AWS vice president of machine learning, Swami Sivasubramanian. “Today, we are announcing a set of tools for Amazon SageMaker that makes it much easier for developers to build end-to-end machine learning pipelines to prepare, build, train, explain, inspect, monitor, debug and run custom machine learning models with greater visibility, explainability, and automation at scale.”
Already companies like 3M, ADP, AstraZeneca, Avis, Bayer, Capital One, Cerner, Domino’s Pizza, Fidelity Investments, Lenovo, Lyft, T-Mobile, and Thomson Reuters are using SageMaker tools in their own operations, according to AWS.
The company’s new products include Amazon SageMaker Data Wrangler, which the company said was providing a way to normalize data from disparate sources so the data is consistently easy to use. Data Wrangler can also ease the process of grouping disparate data sources into features to highlight certain types of data. The Data Wrangler tool contains over 300 built-in data transformers that can help customers normalize, transform and combine features without having to write any code.
Amazon also unveiled the Feature Store, which allows customers to create repositories that make it easier to store, update, retrieve and share machine learning features for training and inference.
Another new tool that Amazon Web Services touted was its workflow management and automation toolkit, Pipelines. The Pipelines tech is designed to provide orchestration and automation features not dissimilar from traditional programming. Using pipelines, developers can define each step of an end-to-end machine learning workflow, the company said in a statement. Developers can use the tools to re-run an end-to-end workflow from SageMaker Studio using the same settings to get the same model every time, or they can re-run the workflow with new data to update their models.
To address the longstanding issues with data bias in artificial intelligence and machine learning models, Amazon launched SageMaker Clarify. First announced today, this tool allegedly provides bias detection across the machine learning workflow, so developers can build with an eye towards better transparency on how models were set up. There are open source tools that can do these tests, Amazon acknowledged, but the tools are manual and require a lot of lifting from developers, according to the company.
Other products designed to simplify the machine learning application development process include SageMaker Debugger, which enables to developers to train models faster by monitoring system resource utilization and alerting developers to potential bottlenecks; Distributed Training, which makes it possible to train large, complex, deep learning models faster than current approaches by automatically splitting data cross multiple GPUs to accelerate training times; and SageMaker Edge Manager, a machine learning model management tool for edge devices, which allows developers to optimize, secure, monitor and manage models deployed on fleets of edge devices.
Last but not least, Amazon unveiled SageMaker JumpStart, which provides developers with a searchable interface to find algorithms and sample notebooks so they can get started on their machine learning journey. The company said it would give developers new to machine learning the option to select several pre-built machine learning solutions and deploy them into SageMaker environments.
As more and more alternative investment marketplaces pop up around specific verticals like art or collectibles, Indiegogo founder Slava Rubin is launching a Kayak-like platform called Vincent which helps curious investors get a handle on what the entire asset class has to offer.
Rubin and co-founders Evan Cohen, Eric Cantor and Ross Cohen have raised $2 million for the venture with backing from investors including Uncommon Denominator, ERA Ventures, The Fund and Rubin’s own firm Humbition. Vincent launched in beta this July but the firm is now ready to take the platform wide with a public launch. Rubin says the team has assembled the “most comprehensive database of alternate investments.”
Rubin has been a driving force behind alternative investments since his Indiegogo days and has helped guide some of the existing legislation that has made investments in alternative assets more tenable.
Part of the buzz around alternative investments in 2020 is the result of evolving guidance from stateside regulatory bodies, while added attention comes from the boom around investment platforms that bring users more approachable tools to access financial institutions. Specific verticals may be hoping to build up a Robinhood -like brand and following around their particular niche, but Vincent is aiming to benefit from rising tides and users eyeing diversification.
“[Our partners] are really heads down often on a lot of curation around a specific deal and trying to become experts in that space,” Rubin tells TechCrunch . “What we’ve learned is that the investor is thinking more about trying to get exposure to alternative investments and not only do they want exposure to one alternative investment, they want exposure to the entire asset class.”
The company currently has partnerships with about 50 platforms, Rubin tells me, including platforms like WeFunder, SharesPost, Rally Rd. and Otis. The deals which span real estate, venture, collectibles, and art, among others, bring Vincent users access to $2 billion worth of investments, the company says. Users visiting Vincent are asked whether or not they are accredited which routes them to the list of deals they have access to.
Similar to Kayak, people are using Vincent to source the deals, but once they find an asset that tickles their fancy, they’ve being redirected to the partner platform’s site or app in order to actually carry out the deal. Once a user carries out an investment on said platform, Vincent receives a standard fee from the partner platform.
Vincent’s main challenge is building up a brand that resonates with users without actually managing the actual investments themselves. Most of these partner platforms, as Rubin notes, are built around curating and developing an expertise around a specific niche, whether that works in a broader scenario is the big question.
“The whole goal of an aggregator is to really simplify an experience where the market is massively fragmented,” Rubin says.
Vincent is also aiming to be more than an aggregator, serving up editorial content with a blog and newsletter that the team hopes can make the platform more of a one-stop-shop for investors looking to educate themselves on alternative assets. For his part, Rubin hopes that the gold rush of startups building alternative investment platforms is the perfect time for a player to come in that focuses on streamlining everything.
Israeli cloud security firm Orca Security today announced a $55 million Series B funding round led by ICONIQ Growth. Previous investors GGV Capital, YL Ventures and Silicon Valley CISO Investments also participated in the round, which brings the company’s total funding to date to $82 million. This includes Orca’s $20.5 million Series A round, which it announced in May.
What makes Orca stand out is not just its focus on cloud-native technologies but what it calls its SideScanning technology. This enables it to map a company’s cloud environment and reconstruct its file system by looking at how workloads interact with the block storage services they use. Based on this, in combination with the cloud metadata it collects, it can map and scan a company’s entire data estate and its cloud assets — and find potential security issues. Because of this system, Orca also immediately discovers new hosts in the cloud without anybody having to maintain this part of the system.
This means the system can work without any agents, too, and hence without introducing any additional overhead into the existing systems. That, Orca Security CEO Avi Shua argues, wouldn’t have been possible in an on-premises setting.
“The way it works is that — without installing any agents or running anything on the environment — it reads the block storage of your flow from the side to deduce the risk and it builds maps of your environment so you can see it in context,” Shua, who spent 11 years working at Check Point before launching Orca, explained. “Both of these things simply were not possible in the on-premise environment because you need to install agents to see. And when you install an agent, it sees the tree, it doesn’t see the forest. It isn’t able to understand where traffic comes from, it doesn’t understand that if it sees a key, what that key opens.”
He also noted that Orca wants to be as comprehensive as possible so that companies don’t have to use different tools for detecting misconfigurations, malware, vulnerabilities, etc. The company also aims to make the process of getting started with its technology frictionless. Indeed, Shua argues that the Achilles heel of the whole industry is that companies get to maybe 50 percent of coverage if they work hard, but then hit a brick wall because deploying a lot of security tools can be quite hard. “Usually people are not getting breached because the walls are not high enough but because they are not covering the thing that they’re trying to protect,” Shua said.
Orca also aims to provide security practitioners with relevant alerts based on the context of the exposure and business impact. A company may be running a lot of software that is vulnerable to remote code execution in the NTP service, for example. But the environment doesn’t expose NTP and it’s blocked by default in all of the company’s security groups, so while this may look like a major vulnerability in the overall stack, it doesn’t actually represent a real risk. Shua told me of a customer who, after installing Orca, found more than a million critical issues. The company’s tools helped the security team reduce those to 33 that it should focus on.
“The common denominator amongst just about every company we see is that the solutions are very complex — the problems they’re trying to solve are complex and the solutions tend to be complex,” GGV Capital managing partner Glenn Solomon told me. “One of the amazing things about Orca is — and I think that this is a result of Avi and Gil [Geron] and the rest of the co-founders having a lot of experience at Check Point — they understood from day one like that a big part of the value here is being able to install and just provide value really quickly and seamlessly.”
The service currently supports AWS, Google Cloud Platform and Microsoft Azure and their various container services.
Clearly, Orca has hit on a winning formula here. Shua tells me that the company grew more than 10x this year already and instead of growing the team to about 50 employees, it’s already at 70 now. At one point this summer, simply scheduling a call with a salesperson at Orca could take three weeks. Given this, it’s maybe no surprise that Orca wanted to raise to continue to accelerate this growth (and that VCs would want to put more money into the company).
“This massive $55 million round will really help propel Orca to cloud security dominance,” YL Ventures managing partner Yoav Leitersdorf told me. “Already year-over-year growth is stunning — higher than anything I’ve ever seen — literally hundreds of percent. They are incredibly unique in the market with their SideScanning technology.”
The company plans to use the new funding to increase continue building out its product and increase its sales and marketing efforts. In addition, Orca plans to increase its R&D efforts and open a number of new sales offices around the world.
With the pandemic playing havoc with children’s education EdTech startups have been on a roll. A new fundraising seems to come almost every week at this point.
Today it’s Novakid’s turn. This EdTech startup is yet another ‘learning English as a second language for children’ startup. But it at least has a chance among the plethora of solutions out there, having raised a $4.25 million Series A financing led by Hungary-based PortfoLion (part of OTP, a leading banking group in Eastern Europe), alongside a prominent EdTech-focused US fund LearnStart. LearnStart is part of the LearnCapital VC which has previously backed VIPKID and Brilliant.org. TMT Investments and Xploration Capital also joined the round. Both seed investors – South Korea-based BonAngels, as well as LETA Capital, took part in this financing round in January this year, of $1.5M.
Novakid’s teaching method is based around the ideas of language acquisition by Asher, Thornbury, Krashen and Chomsky, and it is specifically suited for children aged 4-12. It is incorporated in the US with development and customer support around Europe.
Max Azarow, Co-founder and CEO said: “Novakid is reinventing English learning for kids in countries where English is not a primary spoken language. There, English would usually be taught as an abstract subject, with focus on grammar and with little live practice offered. Novakid on the other hand, implements a unique format that combines a highly-interactive digital curriculum and with individual live tutor sessions where students & tutor only speak English for a 100% language immersion.”
Aurél Påsztor, Partner at PortfoLion, commented: “Novakid attracted investor attention due to its excellent traction, which resulted in over 500% growth year-on-year both in terms of number of students and in terms of revenue. Other attractive points were strong customer retention, international business footprint and a solid monetization via paid subscriptions.”
Unacademy, an online learning platform in India, has added two more marquee investors to its cap table. The Bangalore-based startup, which focuses on K-12 online education, said on Wednesday it has raised new funds from Tiger Global Management and Dragoneer Investment Group.
The funding round, which is between $75 million to $100 million in size (according to a person familiar with the matter; Unacademy has not disclosed the figure), valued the four-and-a-half-year-old startup at $2 billion, up from about $500 million in February this year when Facebook joined its list of backers, and $1.45 billion in September, when SoftBank led the round.
“Our mission from Day One has been to democratise education and make it more affordable and accessible. We have consistently built the most iconic products that deliver high quality education to everyone. Today, I’m delighted to welcome Tiger Global and Dragoneer as our partners in the journey. They are both marquee global investors with a history of partnering with innovative companies that are making an impact on people’s lives,” said Gaurav Munjal, co-founder and chief executive of Unacademy, in a statement.
Unacademy helps students prepare for competitive exams to get into college, as well as those who are pursuing graduate-level courses. On its app, students watch live classes from educators and later engage in sessions to review topics in more detail. In recent months, the startup has held several online interviews of high-profile individuals, such as Indian politician Shashi Tharoor, on a range of topics, which has expanded its appeal beyond its student base.
The platform has amassed over 47,000 educators, who teach students in 5,000 cities in India in more than 14 languages. Over 150,000 live classes are conducted on the platform each month and the collective watch time across platforms is more than 2 billion minutes per month, the startup said.
“The opportunity to improve lives through online education is enormous because of its sheer accessibility. The Unacademy team has innovated rapidly to build a leading platform that is taking education to the farthest corners of India. We are very excited to partner with Unacademy and look forward to seeing it scale further,” said Scott Shleifer, partner at Tiger Global, in a statement.
Spend on education in India is among the highest globally (Source: A report from analysts at Goldman Sachs to clients earlier this year)
Scores of education startups in India have reported skyrocketing growth in recent months as schools remain shut across the country amid the coronavirus pandemic. Even as most Indians tend not to pay for online services — just ask Google and Facebook, both of which count India as their biggest market by users but make little in the country — the education category is an outlier. Indian families continue to spend heavily on their children’s education in hopes of paving the way for a better future.
Japan-based financial services group ORIX Corporation today announced that it has made a $60 million strategic investment into the Israeli crowdsourcing platform OurCrowd. In return, the crowdfunding platform will provide the firm with access to its startup network. OurCrowd also says that the two groups will collaborate to create financial products and investment opportunities for the Japanese and global market, including access to its venture funds and specific companies in the OurCrowd portfolio.
“ORIX is a global leader in diversified business and financial services who will strengthen OurCrowd in many ways,” OurCrowd CEO Jon Medved said in today’s announcement. “We are enthusiastic about the potential to further transform the venture capital asset class together and provide a strong bridge for our innovative companies to the important Asian markets.”
While ORIX already operates in 37 countries, including the U.S., this is the company’s first investment in Israel. It comes at a time where Japanese investments in Israel are already surging. And earlier this year, Israel’s flag carrier El Al was about to launch direct flights to Tokyo, for example, and while the pandemic canceled those plans, it’s a clear sign of the expanding business relations between the two countries.
“We are excited about investing in OurCrowd, Israel’s most active venture investor and one of the world’s most innovative venture capital platforms,” ORIX UK CEO Kiyoshi Habiro said. “We intend to be active partners with OurCrowd and help them accelerate their already impressive growth, while bringing the best of Israeli tech to Japan’s large industrial and financial sectors.”
So far, OurCrowd has made investments in 220 companies across its 22 funds. Some of its most successful exits include Beyond Meat and Lemonade, JUMP Bike, Briefcam and Argus. ORIX, too, has quite a diverse portfolio, with investments that range from real estate to banking and energy services.
AllRight is a platform for English language learning, aimed at children four years or older, which combines lessons with real teachers and homework with ‘AI-powered’ tutors. It’s now raised a $5 million Series A round led by Genesis Investments, with participation from TMT Investments, TerraVC, and existing investors Flashpoint and Misha Lyalin.
The Ukraine-based startup will now enter new markets and strengthen its positions in Poland, Russia, Spain, and Latin America. AllRight’s competitors include Open English, LingoKids (raised $22M), MyBuddy, Preply ($15M) and NovaKid ($2.3M).
There are approximately 1.5 billion English language learners globally and the number of children among them reached 500 million in 2020. The global English language learning market is projected to reach $55 billion by 2025, growing at 7% annually, according to reports.
So the company targets markets with low online education penetration rates, such as emerging markets. Since its launch in 2017 AllRight has launched Spanish – English, Polish – English, and Russian – English language pairs and garnered 9,000 students, who take 50,000 lessons per month.
The learning process is powered by a real-time collaboration platform for teachers and students, doing live lessons online with lessons ‘quality controlled by AI’ and an ‘AI-powered tutor’ with a voice-only interface with speech recognition and synthesis. This allows children to practice spoken English with AI. The app has obviously benefited from the fact that many lessons in schools are now conducted virtually due to the global pandemic.
AllRight was founded by Oleg Oksyuk, and the team is comprised of people drawn from 51Talks, SkyEng, Cisco, and Yandex. He said: “Our pilot language pair launch three years ago showed that learning a language with gamification in early childhood produces excellent results. That is why in March 2019 we directed our efforts to further delivery of an affordable edutainment program and launched Spanish-English and Polish-English language pairs.”
Vitaly Laptenok, General Partner of Genesis Investments said: “This is the biggest deal of Genesis Investments by date…The platform currently demonstrates 3x year-over-year growth and the team supports these dynamics by entering new markets and scaling there.”
Portuguese VC Faber has hit the first close of its Faber Tech II fund at €20.5 million ($24.3 million). The fund will focus on early-stage data-driven startups starting from Southern Europe and the Iberian peninsula, with the aim of reaching a final close of €30 million in the coming months. The new fund targets pre-series A and early-stage startups in Artificial Intelligence, Machine Learning and Data Science.
The fund is backed by European Investment Fund (EIF) and the local Financial Development Institution (IFD), with a joint commitment of €15 million (backed by the Investment Plan for Europe – the Juncker Plan and through the Portugal Tech program), alongside other private institutional and individual investors.
Alexandre Barbosa, Faber’s Managing Partner, said “The success of the first close of our new fund allows us to foresee a growth in the demand for this type of investment, as we believe digital transformation through Intelligence Artificial, Machine Learning and data science are increasingly relevant for companies and their businesses, and we think Southern Europe will be the launchpad of a growing number.”
Faber has already ‘warehoused’ three initial investments. It co-financed a 15.6 million euros Series A for SWORD Health – portuguese startup that created the first digital physiotherapy system combining artificial intelligence and clinical teams. It led the pre-seed round of YData, a startup with a data-centric development platform that provides data science professionals tools to deal with accessing high-quality and meaningful data while protecting its privacy. It also co-financed the pre-seed round of Emotai, a neuroscience-powered analytics and performance-boosting platform for virtual sports.
Faber was a first local investor in the first wave of Portugal’s most promising startups, such as Seedrs (co-founded by Carlos Silva, one f Faber’s Partners) which recently announced its merger with CrowdCube); Unbabel; Codacy and Hole19, among others.
Faber’s main focus is deep-tech and data science startups and as such it’s assembled around 20 experts, researchers, Data Scientists, CTO’s, Founders, AI and Machine Learning professors, as part of its investment strategy.
In particular, it’s created the new role of Professor-in-residence, the first of whom is renowned professor Mário Figueiredo from Lisbon’s leading tech university Instituto Superior Técnico. His interests include signal processing, machine learning, AI and optimization, being a highly cited researcher in these fields.
Speaking to TechCrunch in an interview Barbosa added: “We’ve seen first-time, but also second and third-time entrepreneurs coming over to Lisbon, Porto, Barcelona, Valencia, Madrid and experimenting with their next startup and considering starting-up from Iberia in the first place. But also successful entrepreneurs considering extending their engineering teams to Portugal and building engineering hubs in Portugal or Spain.”
“We’ve been historically countercyclical, so we found that startups came to, and appears in Iberia back in 2012 / 2013. This time around mid-2020, we’re very bullish on what’s we can do for the entrepreneurial engine of the economy. We see a lot happening – especially around our thesis – which is basically the data stack, all things data AI-driven, machine learning, data science, and we see that as a very relevant core. A lot of the transformation and digitization is happening right now, so we see a lot of promising stuff going on and a lot of promising talent establishing and setting up companies in Portugal and Spain – so that’s why we think this story is relevant for Europe as a whole.”
Marathon Venture Capital in Athens, Greece has completed the first closing of its second fund, reaching the €40m / $47M mark. Backing the new fund is the European Investment Fund, HDBI, as well as corporates, family offices and HNWIs around the world (plus many Greek founders). It plans to invest in Seed-stage startups from €1m to 1.5m initial tickets for 15-20% of equity.
Marathon’s most prominent portfolio company is Netdata, which last year raised a $17 million Series A led by Bain Capital, and later raised another $14m from Bessemer. On the success side, Uber’s pending $1.4B+ acquisition of BMW/Daimler’s mobility group was in part driven by a Marathon-backed startup, Taxibeat, which was earlier acquired by Daimler.
Highlights of Fund One’s investments include:
Tziralis tells me the majority of its next ten companies have already raised a Series A round.
Tziralis and Papadopoulos have been key players in the Greek startups scene, backing many of the first startups to emerge from the country over 13 years ago. And they were enthusiastic backers of our TechCrunch Athens meetup many years ago.
Three years ago, they launched Marathon Venture Capital to take their efforts to the next level. Fund I invested in 10 companies with the first fund, and most have raised a Series A. The portfolio as a whole has raised 4x their total invested amount and maintains an estimated total enterprise value of $350 million.
They’ve also been running the “Greeks in Tech” meetups all over the world – Berlin to London to New York to San Francisco, and many more locations in between, connecting with Greek founders.
The term ‘DevOps’ has been rendered meaningless and developers still don’t have access to the right tools to put the overall idea into practice, the team behind DevOps startup OpsLevel argues. The company, which was co-founded by John Laban and Kenneth Rose, two of PagerDuty’s earliest employees, today announced that it has raised a $5 million seed funding round, led by Vertex Ventures. S28 Capital, Webb Investment Network and Union Capital also participated in this round, as well as a number of angels, including the three co-founders of PagerDuty .
“[PagerDuty] was an important part of the DevOps movement. Getting engineers on call was really important for DevOps, but on-call and getting paged about incidents and things, it’s very reactive in nature. It’s all about fixing incidents as quickly as possible. Ken [Rose] and I saw an opportunity to help companies take a more proactive stance. Nobody really wants to have any downtime or any security breaches in the first place. They want to prevent them before they happen.”
With that mission in mind, the team set out to bring engineering organizations back to the roots of DevOps by giving those teams ownership over their services and creating what Rose called a “you build it, you own it” culture. Service ownership, he noted, is something the team regularly sees companies struggle with. When teams move to microservices or even serverless architectures for their systems, it quickly becomes unclear who owns what and as a result, you end up with orphaned services that nobody is maintaining. The natural result of that is security and reliability issues. And at the same time, because nobody knows which systems already exist, other teams reinvent the wheel and rebuild the same service to solve their own problems.
“We’ve underinvested in tools to make DevOps actually work,” the team says in today’s announcement. “There’s a lot we still need to build to help engineering teams adopt service ownership and unlock the full power of DevOps.”
So at the core of OpsLevel is what the team calls a “service ownership platform,” starting with a catalog of the services that an engineering organization is currently running.
“What we’re trying to do is take back the meaning of DevOps,” said Laban. “We believe it’s been rendered meaningless and we wanted to refocus it on service ownership. We’re going to be investing heavily on building out our product, and then working with our customers to get them to really own their services and get really down to solving that problem.”
Among the companies OpsLevel is already working with are Segment, Zapier, Convoy and Under Armour. As the team noted, its service becomes most useful once a company runs somewhere around 20 or 30 different services. Before that, a wiki or spreadsheet is often enough to manage them, but at that point, those systems tend to break.
OpsLevel gives them different onramps to start cataloging their services. If they prefer to use a ‘config-as-code’ approach, they can use those YAML files as part of their existing Git workflows. But OpsLevel offers APIs that teams can plug into their various systems if they already have existing service creating workflows.
The company’s funding round closed in late September. The pandemic, the team said, didn’t really hinder its fundraising efforts, something I’ve lately heard from a lot of companies (though the ones I talk obviously to tend to be the ones that recently raised money).
“The reason why [we raised] is because we wanted to really invest in building out our product,” Laban said. “We’ve been getting this traction with our customers and we really wanted to double down and build out a lot of product and invest into our go-to-market team as well and really wanted to accelerate things.”
Carbon Health has raised a $100 million Series C funding round, led by Dragoneer Investment Group and including participation from prior investors Brookfield Technology Partners, DCVC and Builders VC. This funding will be used to help the SF-based healthcare provider startup to continue to expand its nationwide footprint, including with the opening of 100 pop-up clinics planned for across 20 markets across the U.S.
This past year has seen Carbon Health expand from just seven clinics to 27, spread out across six different states. The company, which focuses on primary care, has also introduced virtual care options with an emphasis on what it calls “omnichannel” care, or offering services in whatever method is most convenient, effective and appropriate for its customers. The startup has always aimed at a hybrid care approach, but it’s emphasizing the flexibility of its model in response to COVID-19, and has in particular accelerated its plans around its pop-up clinics.
These are deployed in under-utilized spaces in regions where additional care options are needed, including parking lots and garages. Carbon Health partnered early with Reef Technology on opening these locations, using shipping-container style mobile trailers to provide on-site care. Carbon Health founder and CEO Eren Bali explained to me that while remote care can be very effective, in some instances, it requires some nurse practitioner support with virtual physician-guided services to provide a complete solution for customers.
The company is also looking to support greater testing capacity using this model, and eventually looking ahead to providing an infrastructure that can help with widespread COVID-19 vaccine distribution, once one is ready to go. While some scientific results this week have been very promising, including with Pfizer’s Phase 3 clinical trial, ultimately the effort of undertaking a national vaccine inoculation program will require cooperation among many stakeholders, including primary care providers.
Year-in, year-out, the gender gap in venture capital investment continues to be a problem women founders face. While the gender gap in other areas (such as the number of women entering tech in general) may be on the right path, this disparity in funding seems to be stagnant. There has been little movement in the amount of VC dollars going to women-founded companies since 2012.
In fintech, the problem is especially prominent: Women-founded fintechs have raised a meager 1% of total fintech investment in the last 10 years. This should come as no surprise, given that fintech combines two sectors traditionally dominated by men: finance and technology. Though by no means does this mean that women aren’t doing incredible work in the field and it’s only right that women founders receive their fair share of VC investment.
In the short term, women founders can take action to boost their chances at VC success in the current investment climate, including leveraging their community and support network and building the necessary self-belief to thrive. In the long term, there needs to be foundational change to level the playing field for women entrepreneurs. VC funds must look at ways they can bring in more women decision-makers, all the way up to the top.
Let’s dive into the state of gender bias in VC investing as it stands, and what founders, stakeholders and funds themselves can do to close the gap.
In 2019, less than 3% of all VC investment went to women-led companies, and only one-fifth of U.S. VC went to startups with at least one woman on the founder team. The average deal size for female-founded or female co-founded companies is less than half that of only male-founded startups. This is especially concerning when you consider that women make up a much bigger portion of the founder community than proportionately receive investment (around 28% of founders are women). Add in the intersection of race and ethnicity, and the figures become bleaker: Black women founders received 0.6% of the funding raised since 2009, while Latinx female founders saw only 0.4% of total investment dollars.
The statistics paint a stark picture, but it’s a disparity that I’ve faced on a personal level too. I have been faced with VC investors who ask my co-founder — in front of me — why I was doing the talking instead of him. On another occasion, a potential investor asked my co-founder who he was getting into business with, because “he needed to know who he’d be going to the bar with when the day was up.”
This demonstrates a clear expectation on the part of VC investors to have a male counterpart within the founding team of their portfolio companies, and that they often — whether subconsciously or consciously — value men’s input over that of the women on the leadership team.
So, if you’re a female founder faced with the prospect of pitching to VCs — what steps can you take to set yourself up for success?
Women founders looking to receive VC investment can take a number of steps to increase their chances in this seemingly hostile environment. My first piece of advice is to leverage your own community and support network, especially any mentors and role models you may have, to introduce you to potential investors. Contacts that know and trust your business may be willing to help — any potential VC is much more likely to pay you attention if you come as a personal recommendation.
If you feel like you’re lacking in a strong support network, you can seek out female-founder and startup groups and start to build your community. For example, The Next Women is a global network of women leaders from progress-driven companies, while Women Tech Founders is a grassroots organization on a mission to connect and support women in technology.
Confidence is key when it comes to fundraising. It’s essential to make sure your sales, pitch and negotiation skills are on point. If you feel like you need some extra training in this area, seek out workshops or mentorship opportunities to make sure you have these skills down before you pitch for funding.
When talking with top male VCs and executives, there may be moments where you feel like they’re responding to you differently because of your gender. In these moments, channeling your self-belief and inner strength is vital: The only way that they’re going to see you as a promising, credible founder is if you believe you are one too.
At the end of the day, women founders must also realize that we are the first generation of our gender playing the VC game — and there’s something exciting about that, no matter how challenging it may be. Even when faced with unconscious bias, it’s vital to remember that the process is a learning curve, and those that come after us won’t succeed if we simply hand the task over to our male co-founder(s).
While there are actions that women can take on an individual level, barriers cannot be overcome without change within the VC firms themselves. One of the biggest reasons why women receive less VC investment than men is that so few of them make up decision-makers in VC funds.
A study by Harvard Business Review concluded that investors often make investment decisions based on gender and ask women founders different questions than their male counterparts. There are countless stories of women not being taken seriously by male investors, and subsequently not being seen as a worthwhile investment opportunity. As a result of this disparity in VC leadership teams, women-focused funds are emerging as a way to bridge the funding gender gap. It’s also worth noting that women VCs are not only more likely to invest in women-founded companies, but also those founded by Black entrepreneurs. In addition to embracing women and minority-focused investors, the VC community as a whole should ensure they’re bringing in more women leaders into top positions.
From day one, the Prometeo team has made concerted efforts to have both men and women in decision-maker roles. Having women in the founding team and in leadership positions has been crucial in not only helping to fight the unconscious bias that might take place, but also in creating a more dynamic work environment, where diversity of thought powers better business decisions.
Striving for gender equality, both within the walls of VC funds and in the founder community, is also better for businesses’ bottom line. In fact, a study by Boston Consulting Group found that women-founded startups generate 78% for every dollar invested, compared to 31% from men-founded companies.
Here in Latin America, women founders receive a higher proportion of VC investment than anywhere else in the world, so it’s no surprise that women are leading the region’s fintech revolution. Having more women in leadership positions is ultimately a better bet for business.
Closing the gender gap in VC funding is no simple task, but it’s one that must be undertaken. With the help of internal VC reform and external initiatives like community building, training opportunities and women-focused support networks, we can work toward finally making the VC game more equitable for all.
SoftBank’s Opportunity Growth Fund has made the health insurance startup Vitable Health the first commitment from its $100 million fund dedicated to investing in startups founded by entrepreneurs of color.
The Philadelphia-based company, which recently launched from Y Combinator, is focused on bringing basic health insurance to underserved and low-income communities.
Founded by Joseph Kitonga, a 23 year-old entrepreneur whose parents immigrated to the U.S. a decade ago, Vitable provides affordable acute healthcare coverage to underinsured or un-insured populations and was born out of Kitonga’s experience watching employees of his parents’ home healthcare agency struggle to receive basic coverage.
The $1.5 million commitment was led by the SoftBank Group Corp Opportunity Fund, and included Y Combinator, DNA Capital, Commerce Ventures, MSA Capital, Coughdrop Capital, and angels like Immad Akhund, the chief executive of Mercury Bank; and Allison Pickens, the former chief operating officer of Gainsight, the company said in a blog post.
“Good healthcare is a basic right that every American deserves, whoever they are,” said Paul Judge, the Atlanta-based Early Stage Investing Lead for the fund and the founder of Atlanta’s TechSquare Labs investment fund. “We’ve been inspired by Joseph and his approach to addressing this challenge. Vitable Health is bridging critical gaps in patient care and has emerged as a necessary, essential service for all whether they’re uninsured, underinsured, or simply need a better plan for their lifestyle.”
SoftBank created the opportunity fund while cities around the U.S. were witnessing a wave of public protests against systemic racism and police brutality stemming from the murder of the Black Minneapolis citizen George Floyd at the hands of white police officers. Floyd’s murder reignited simmering tensions between citizens and police in cities around the country over issues including police brutality, the militarization of civil authorities, and racial profiling.
SoftBank has had its own problems with racism in its portfolio this year. A few months before the firm launched its fund, the CEO and founder of one of its portfolio companies, Banjo, resigned after it was revealed that he once had ties to the KKK.
With the Opportunity Fund, SoftBank is trying to address some of its issues, and notably, will not take a traditional management fee for transactions out of the fund “but instead will seek to put as much capital as possible into the hands of founders and entrepreneurs of color.”
The Opportunity Fund is the third investment vehicle announced by SoftBank in the last several years. The biggest of them all is the $100 billion Vision Fund; then last year it announced the $2 billion Innovation Fund focused on Latin America.
Over 90% of the fastest-growing open-source companies in 2020 were founded outside the San Francisco Bay Area, and 12 out of the top 20 originate in Europe, according to a new study. The “ROSS Index”, created by Runa Capital lists the fastest-growing open-source startups with public repositories on Github every quarter.
Interestingly, the company judged to be the fastest-growing on the latest list, Plausible, is an ‘open startup’ (all its metrics are published, including revenues) and states on its website that it is “not interested in raising funds or taking investment. Not from individuals, not from institutions and not from venture capitalists. Our business model has nothing to do with collecting and analyzing huge amounts of personal information from web users and using these behavioral insights to sell advertisements.” It says it builds a self-sustainable “privacy-friendly alternative to very popular and widely used surveillance capitalism web analytics tools”.
Admittedly, ‘Github stars’ are not a totally perfect metric to measure the product-market fit of open-source companies. However, the research shows a possible interesting trend away from the VC-backed startups of the last ten years.
There have been previous attempts to create similar lists. In 2017 Battery Ventures published its own BOSS Index, but the index was abandoned. In September 2020 Accel revealed its Open100 market map, which included many open-source startups.
The high churn rates at Github mean the list of companies will change significantly every quarter. For instance, this recent finding by ROOS has only four companies that were mentioned in the previous list (Q2 2020): Hugging Face, Meili, Prisma and Framer.
Of course, open-source doesn’t mean these companies will never monetize or not go on to raise venture capital.
And Runa Capital clearly has an interest in publishing the list. It has invested in several open-source startups, including Nginx (acquired by F5 Networks for $670M), MariaDB and N8N, and recently raised a $157M fund aimed at open-source startups.