Automation has become a big theme in enterprise IT, with organizations using RPA, no-code and low-code tools, and other technology to speed up work and bring more insights and analytics into how they do things every day, and today IBM is announcing an acquisition as it hopes to take on a bigger role in providing those automation services. The IT giant has acquired MyInvenio, an Italian startup that builds and operates process mining software.
Process mining is the part of the automation stack that tracks data produced by a company’s software, as well as how the software works, in order to provide guidance on what a company could and should do to improve it. In the case of myInvenio, the company’s approach involves making a “digital twin” of an organization to help track and optimize processes. IBM is interested in how myInvenio’s tools are able to monitor data in areas like sales, procurement, production and accounting to help organizations identify what might be better served with more automation, which it can in turn run using RPA or other tools as needed.
Terms of the deal are not being disclosed. It is not clear if myInvenio had any outside investors (we’ve asked and are awaiting a response). This is the second acquisition IBM has made out of Italy. (The first was in 2014, a company called CrossIdeas that now forms part of the company’s security business.)
IBM and myInvenio are not exactly strangers: the two inked a deal as recently as November 2020 to integrate the Italian startup’s technology into IBM’s bigger automation services business globally.
Dinesh Nirmal, GM of IBM Automation, said in an interview that the reason IBM acquired the company was two-fold. First, it lets IBM integrate the technology more closely into the company’s Cloud Pak for Business Automation, which sits on and is powered by Red Hat OpenShift and has other automation capabilities already embedded within it, specifically robotic process automation (RPA), document processing, workflows and decisions.
Second and perhaps more importantly, it will mean that IBM will not have to tussle for priority for its customers in competition with other solution partners that myInvenio already had. IBM will be the sole provider.
“Partnerships are great but in a partnership you also have the option to partner with others, and when it comes to priority who decides?” he said. “From the customer perspective, will they will work just on our deal, or others first? Now, our customers will get the end result of this… We can bring a single solution to an end user or an enterprise, saying, ‘look you have document processing, RPA, workflow, mining. That is the beauty of this and what customers will see.”
He said that IBM currently serves customers across a range of verticals including financial, insurance, healthcare and manufacturing with its automation products.
Notably, this is not the first acquisition that IBM has made to build out this stack. Last year, it acquired WDG to expand into robotic process automation.
And interestingly, it’s not even the only partnership that IBM has had in process mining. Just earlier this month, it announced a deal with one of the bigger names in the field, Celonis, a German startup valued at $2.5 billion in 2019.
Ironically, at the time, my colleague Ron wondered aloud why IBM wasn’t just buying Celonis outright in that deal. It’s hard to speculate if price was one reason. Remember: we don’t know the terms of this acquisition, but given myInvenio was off the fundraising radar, chances are it’s possibly a little less than Celonis’s pricetag.
We’ve asked and IBM has confirmed that it will continue to work with Celonis alongside now offering its own native process mining tools.
“In keeping with IBM’s open approach and $1 billion investment in ecosystem, [Global Business Services, IBM’s enterprise services division] works with a broad range of technologies based on client and market demand, including IBM AI and Automation software,” a spokesperson said in a statement. “Celonis focuses on execution management which supports GBS’ transformation of clients’ business processes through intelligent workflows across industries and domains. Specifically, Celonis has deep connectivity into enterprise systems such as Salesforce, SAP, Workday or ServiceNow, so the Celonis EMS platform helps GBS accelerate clients’ transformations and BPO engagements with these ERP platforms.”
Indeed, at the end of the day, companies that offer services, especially suites of services, are working in environments where they have to be open to customers using their own technology, or bringing in something else.
There may have been another force pushing IBM to bring more of this technology in-house, and that’s wider competitive climate. Earlier this year, SAP acquired another European startup in the process mining space, Signavio, in a deal reportedly worth about $1.2 billion. As more of these companies get snapped up by would-be IBM rivals, and those left standing are working with a plethora of other parties, maybe it was high time for IBM to make sure it had its own horse in the race.
“Through IBM’s planned acquisition of myInvenio, we are revolutionizing the way companies manage their process operations,” said Massimiliano Delsante, CEO, myInvenio, who will be staying on with the deal. “myInvenio’s unique capability to automatically analyze processes and create simulations — what we call a ‘Digital Twin of an Organization’ — is joining with IBM’s AI-powered automation capabilities to better manage process execution. Together we will offer a comprehensive solution for digital process transformation and automation to help enterprises continuously transform insights into action.”
1Password, the password management service that competes with the likes of LastPass and BitWarden, today announced a major push beyond the basics of password management and into the infrastructure secrets management space. To do so, the company has acquired secrets management service SecretHub and is now launching its new 1Password Secrets Automation service.
1Password did not disclose the price of the acquisition. According to CrunchBase, Netherlands-based SecretHub never raised any institutional funding ahead of today’s announcement.
For companies like 1Password, moving into the enterprise space, where managing corporate credentials, API tokens, keys and certificates for individual users and their increasingly complex infrastructure services, seems like a natural move. And with the combination of 1Password and its new Secrets Automation service, businesses can use a single tool that covers them from managing their employee’s passwords to handling infrastructure secrets. 1Password is currently in use by more then 80,000 businesses worldwide and a lot of these are surely potential users of its Secrets Automation service, too.
“Companies need to protect their infrastructure secrets as much if not more than their employees’ passwords,” said Jeff Shiner, CEO of 1Password. “With 1Password and Secrets Automation, there is a single source of truth to secure, manage and orchestrate all of your business secrets. We are the first company to bring both human and machine secrets together in a significant and easy-to-use way.”
In addition to the acquisition and new service, 1Password also today announced a new partnership with GitHub. “We’re partnering with 1Password because their cross-platform solution will make life easier for developers and security teams alike,” said Dana Lawson, VP of partner engineering and development at GitHub, the largest and most advanced development platform in the world. “With the upcoming GitHub and 1Password Secrets Automation integration, teams will be able to fully automate all of their infrastructure secrets, with full peace of mind that they are safe and secure.”
When Microsoft announced it was acquiring Nuance Communications this morning for $19.7 billion, you could be excused for doing a Monday morning double take at the hefty price tag.
That’s surely a lot of money for a company on a $1.4 billion run rate, but Microsoft, which has already partnered with the speech-to-text market leader on several products over the last couple of years, saw a company firmly embedded in healthcare and it decided to go all in.
And $20 billion is certainly all in, even for a company the size of Microsoft. But 2020 forced us to change the way we do business from restaurants to retailers to doctors. In fact, the pandemic in particular changed the way we interact with our medical providers. We learned very quickly that you don’t have to drive to an office, wait in waiting room, then in an exam room, all to see the doctor for a few minutes.
Instead, we can get on the line, have a quick chat and be on our way. It won’t work for every condition of course — there will always be times the physician needs to see you — but for many meetings such as reviewing test results or for talk therapy, telehealth could suffice.
Microsoft CEO Satya Nadella says that Nuance is at the center of this shift, especially with its use of cloud and artificial intelligence, and that’s why the company was willing to pay the amount it did to get it.
“AI is technology’s most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud in Healthcare and Nuance,” Nadella said in a post announcing the deal.
Microsoft sees this deal doubling what was already a considerable total addressable market to nearly $500 billion. While TAMs always tend to run high, that is still a substantial number.
It also fits with Gartner data, which found that by 2022, 75% of healthcare organizations will have a formal cloud strategy in place. The AI component only adds to that number and Nuance brings 10,000 existing customers to Microsoft including some of the biggest healthcare organizations in the world.
Brent Leary, founder and principal analyst at CRM Essentials, says the deal could provide Microsoft with a ton of health data to help feed the underlying machine learning models and make them more accurate over time.
“There is going be a ton of health data being captured by the interactions coming through telemedicine interactions, and this could create a whole new level of health intelligence,” Leary told me.
That of course could drive a lot of privacy concerns where health data is involved, and it will be up to Microsoft, which just experienced a major breach on its Exchange email server products last month, to assure the public that their sensitive health data is being protected.
Leary says that ensuring data privacy is going to be absolutely key to the success of the deal. “The potential this move has is pretty powerful, but it will only be realized if the data and insights that could come from it are protected and secure — not only protected from hackers but also from unethical use. Either could derail what could be a game changing move,” he said.
Microsoft also seemed to recognize that when it wrote, “Nuance and Microsoft will deepen their existing commitments to the extended partner ecosystem, as well as the highest standards of data privacy, security and compliance.”
We are clearly on the edge of a sea change when it comes to how we interact with our medical providers in the future. COVID pushed medicine deeper into the digital realm in 2020 out of simple necessity. It wasn’t safe to go into the office unless absolutely necessary.
The Nuance acquisition, which is expected to close some time later this year, could help Microsoft shift deeper into the market. It could even bring Teams into it as a meeting tool, but it’s all going to depend on the trust level people have with this approach, and it will be up to the company to make sure that both healthcare providers and the people they serve have that.
Microsoft agreed today to acquire Nuance Communications, a leader in speech to text software, for $19.7 billion. The company is best know for its speech to text products. Bloomberg broke the story over the weekend that the two companies were in talks.
Nuance CEO Mark Benjamin will remain with the company and report to Scott Guthrie. The company believes this will give them a leg up in the growing healthcare market, where Nuance has a considerable presence.
Nuance has a complex history. It went public in 2000 and began buying speech recognition products including Dragon Dictate (from Lernout Hauspie) in 2001. It merged with a company called ScanSoft in 2005. That company began life as Visioneer, a scanning company in 1992.
Today, the company has a number of products including Dragon Dictate, a consumer and business text to speech product that dates back to the early 1990s. It’s also involved in speech recognition, chat bots and natural language processing particularly in healthcare and other verticals.
The company has 6,000 employees spread across 27 countries. In its most recent earnings report from November 2020, which was for Q42020, the company made $352.9 million in revenue compared to $387.6 million in the same period a year prior. That’s not the direction a company wants to go in, but it is still a run rate of over $1.4 billion.
At the time of that earnings call, the company also announced it was selling its medical transcription and electronic health record (EHR) Go-Live services to Assured Healthcare Partners and Aeries Technology Group. Company CEO Benjamin said this was about helping the company concentrate on its core speech services.
“With this sale, we will reach an important milestone in our journey towards a more focused strategy of advancing our Conversational AI, natural language understanding and ambient clinical intelligence solutions,” Benjamin said in a statement at the time.
It’s worth noting that Microsoft already has a number speech recognition and chat bot products of its own including desktop speech to text services in Windows and on Azure, but it took a chance to buy a market leader and go deeper into the healthcare vertical.
This is a breaking story. We will be updating it.
Indoor farming company AppHarvest this week announced that it has acquired Root AI. The deal is valued at around $60 million, with $10 million in cash and the reminder coming from AppHarvest stock.
Root AI is a Boston-based robotics startup, with a mission fairly in line with that of its future parent company. We’ve covered the startup a handful of times, including last August, when it announced a $7.2 million seed round. Robotics, generally, have gotten a boost during the pandemic, but agriculture and food production have gotten special looks, as organizations are looking for ways to automate their processes.
Including the aforementioned seed, Root has raised a total of $9.5 million to date, fueled by interest in its Virgo harvesting system. Founder and CEO Josh Lessing will step into a CTO role at AppHarvest if the acquisition clears. The startup is still fairly lean, with 19 full-time employees.
According to quotes from both parties, robot-gathered data for crop yields is a key part of the acquisition.
“Farming as we’ve known it is broken because of the increasing number of variables such as extreme weather, droughts, fire and contamination by animals that make our food system unreliable,” AppHarvest founder and CEO Jonathan Webb said in a release tied to the news. Indoor farming solves for many of those challenges, and the data gathered can exponentially deliver more insights that help us predict and control crop quality and yield.”
Twitter held talks with Clubhouse around a potential acquisition of the live drop-in audio networking platform, with a deal value somewhere around $4 billion, according to a report from Bloomberg. TechCrunch has also confirmed the discussions took place from a source familiar with the conversations.
While the talks occurred over the past several months, they’re no longer taking place, though the reason they ended isn’t known according to the report. It’s also worth noting that just a few days ago, Bloomberg reported that Clubhouse was seeking to raise a new round of funding at a valuation of around $4 billion, but the report detailing the potential acquisition talks indicate that the discussions with Twitter collapsed first, leading to a change in strategy to pursue securing additional capital in exchange for equity investment.
Twitter has its own product very similar to Clubhouse — Spaces, a drop-in audio chatroom feature that it has been rolling out gradually to its user base over the past few months. Clubhouse, meanwhile, just launched the first of its monetization efforts, Clubhouse Payments, which lets users send direct payments to other creators on the platform, provided that person has enabled receipt of said payments.
Interestingly, the monetization effort from Clubhouse actually doesn’t provide them with any money; instead, it’s monetization for recipient users who get 100% of the funds directed their way, minus a small cut for processing that goes directly to Stripe, the payment provider Clubhouse is using to enable the virtual tips.
While we aren’t privy to the specifics of these talks between Twitter and Clubhouse, it does seem like an awfully high price tag for the social network to pay for the audio app, especially given its own progress with Spaces. Clubhouse’s early traction has been undeniable, but there are a lot of questions still remaining about its longevity, and it’s also being cloned left and right by other platforms, begging the age-old startup question of whether it’s a feature or a product on its own.
Whatever went down, the timing of this revelation seems likely to prime the pump for Clubhouse’s conversation with potential investors at its target valuation for the round it’s looking to raise. Regardless, it’s exciting to have this kind of activity, buzz and attention paid to a consumer software play after many years of what one could argue has been a relatively lacklustre period for the category.
Popular saving and investing app Acorns has acquired Pillar, an AI-powered startup built to help manage student loan debt, in its second acquisition of 2021.
New York-based Pillar helps consumers optimize their debt payments by focusing first on student loans. It launched in May 2019 with $5.5 million in seed funding led by Kleiner Perkins. The companies declined to reveal the financial terms of the deal, only noting that within six months of launching, Pillar managed over $500 million worth of student loan debt of more than 15,000 borrowers.
Michael Bloch dropped out of Stanford Business School and co-founded Pillar after he and his wife had amassed more than $500,000 of student loan debt after she graduated from law school. Prior to that, he had led the Strategy & Operations division for DoorDash, growing it to $100 million in revenue. The problem Pillar has aimed to tackle is massive. Student loan debt is the second-largest type of consumer debt in the U.S., with 45 million borrowers collectively owing nearly $1.7 trillion in student loans.
Notably, Acorns was apparently one of several companies that had courted Pillar.
“We were in a pretty lucky position to have a lot of interest from many of the top fintech companies that are out there,” Bloch told TechCrunch. “We had multiple offers on the table and Acorns was really our top choice just given how the business has been doing and the team, the culture and the mission.”
The deal marks the second acquisition this year and third overall for Acorns, which says it notched its strongest quarter in its history the first three months of this year. In March, Acorns also acquired Harvest, a fintech that helped customers reduce more than $4 million in debt in 2020.
The Pillar and Harvest teams will help Acorns accelerate its product roadmap of helping customers pay down debt, “an essential part of the financial wellness system,” said CEO and founder Noah Kerner.
Over time, Pillar will become part of one of Acorns’ monthly subscription tiers.
“The IP and technology that the Pillar team created in debt management is really interesting to us when we think about how we scale our Smart Deposit feature,” Kerner said.
With Smart Deposit, when a customer’s paycheck hits the Acorns bank account, the app automatically allocates a percentage of that paycheck into an individual’s different investment accounts.
“From a behavioral perspective, the best way to get somebody to save and invest is to enable them to set aside a piece of their paycheck as soon as it hits the account so that they don’t spend it. That feature has been really well adopted by our direct deposit customers,” Kerner said. “And so Michael and his team are coming in to manage that feature, and also our bank accounts product. I think their past experience is going to be really useful for us to take what we have and help the team catalyze it further.”
With its latest acquisition, Irvine, California-based Acorns now has more than 350 employees. In 2017, the company acquired Vault, now called “Acorns Later.” As a result of that acquisition, the company has seen its number of retirement accounts grow to 1.2 million from 500.
As mentioned above, Acorns has had a good year so far. In the first six weeks of 2021, the company added nearly 600,000 new accounts, reaching a total of more than 9 million users having saved and invested a total of $7.5 billion.
“The first quarter was our biggest growth quarter on record,” Kerner told TechCrunch. “In particular we crossed the $4.3 billion in dollars in assets under management, which is a really exciting milestone when you think about the fact that these are customers that are saving small amounts of money in the relative scheme of money invested typically.”
Avant, an online lender that has raised over $600 million in equity, announced today that it has acquired Zero Financial and its neobank brand, Level, to further its mission of becoming a digital bank for the masses.
Founded in 2012, Chicago-based Avant started out primarily as an online lender targeting “underserved consumers,” but is evolving into digital banking with this acquisition. The company notched gross revenue of $265 million in 2020 and has raised capital over the years from backers such as General Atlantic and Tiger Global Management.
“Our path has always been to become the premier digital bank for the everyday American,” Avant CEO James Paris told TechCrunch. “The massive transition to digital over the last 12 months made the timing right to expand our offerings.”
The acquisition of Zero Financial and its neobank, Level (plus its banking app assets), will give Avant the ability to offer “a full ecosystem of banking and credit product offerings” through one fully digital platform, according to Paris. Those offerings include deposits, personal loans, credit cards and auto loans.
Financial terms of the deal weren’t disclosed other than the fact that the acquisition was completed with a combination of cash and stock.
Founded in 2016, San Francisco-based Zero Financial has raised $147 million in debt and equity, according to Crunchbase. New Enterprise Associates (NEA) led its $20 million Series A in May of 2019.
Level was unveiled to the public in February of 2020, created by the same California-based team that founded the “debit-style” credit card offering Zero, according to this FintechFutures piece. The challenger bank was created to target millennials dissatisfied with the incumbent banking options.
Zero Financial co-founder and CEO Bryce Galen said that Avant shared his company’s mission “to challenge the status quo by bringing innovative financial services products to consumers who might otherwise be unable to access them.”
Avant, notes Paris, uses thousands of AI-driven data points to determine credit risk. With this acquisition, that lens will be expanded with data, such as a deposit customer’s cash flow, how they manage their finances and whether they pay their bills on time.
“This will allow us to make credit decisions faster and deliver personalized options to help underbanked consumers gain financial freedom, at any and every stage of their financial journey,” Paris told TechCrunch. “It will also build long-term engagement and loyalty and help grow our reach beyond the 1.5 million customers we’ve served to date.”
Like a growing number of fintechs, Avant operates under the premise that a person’s ability to get credit shouldn’t be dictated by a credit score alone.
“A significant amount of Americans have poor, bad or no credit at all. For these people, accessing credit isn’t exactly easy and often comes with extra fees,” Paris said. That’s why, he added, Avant has focused on providing options for such consumers with “transparent, rewards-driven products.”
Level’s branchless, all-digital platform offers things such as cashback rewards on debit card purchases, a “competitive APY” on deposits, early access to paychecks and no hidden fees, all of which are especially beneficial for consumers on the path to financial freedom, according to Paris.
Since its inception in 2012, Avant has connected more than 1.5 million consumers to $7.5 billion in loans and 400,000 credit cards. The company launched its credit card in 2017 and over the past two years alone, it has grown its number of credit card users by 170%.
If you develop software for a large enterprise company, chances are you’ve heard of Tricentis. If you don’t develop software for a large enterprise company, chances are you haven’t. The software testing company with a focus on modern cloud and enterprise applications was founded in Austria in 2007 and grew from a small consulting firm to a major player in this field, with customers like Allianz, BMW, Starbucks, Deutsche Bank, Toyota and UBS. In 2017, the company raised a $165 million Series B round led by Insight Venture Partners.
Today, Tricentis announced that it has acquired Neotys, a popular performance testing service with a focus on modern enterprise applications and a tests-as-code philosophy. The two companies did not disclose the price of the acquisition. France-based Neotys launched in 2005 and raised about €3 million before the acquisition. Today, it has about 600 customers for its NeoLoad platform. These include BNP Paribas, Dell, Lufthansa, McKesson and TechCrunch’s own corporate parent, Verizon.
As Tricentis CEO Sandeep Johri noted, testing tools were traditionally script-based, which also meant they were very fragile whenever an application changed. Early on, Tricentis introduced a low-code tool that made the automation process both easier and resilient. Now, as even traditional enterprises move to DevOps and release code at a faster speed than ever before, testing is becoming both more important and harder for these companies to implement.
“You have to have automation and you cannot have it be fragile, where it breaks, because then you spend as much time fixing the automation as you do testing the software,” Johri said. “Our core differentiator was the fact that we were a low-code, model-based automation engine. That’s what allowed us to go from $6 million in recurring revenue eight years ago to $200 million this year.”
Tricentis, he added, wants to be the testing platform of choice for large enterprises. “We want to make sure we do everything that a customer would need, from a testing perspective, end to end. Automation, test management, test data, test case design,” he said.
The acquisition of Neotys allows the company to expand this portfolio by adding load and performance testing as well. It’s one thing to do the standard kind of functional testing that Tricentis already did before launching an update, but once an application goes into production, load and performance testing becomes critical as well.
“Before you put it into production — or before you deploy it — you need to make sure that your application not only works as you expect it, you need to make sure that it can handle the workload and that it has acceptable performance,” Johri noted. “That’s where load and performance testing comes in and that’s why we acquired Neotys. We have some capability there, but that was primarily focused on the developers. But we needed something that would allow us to do end-to-end performance testing and load testing.”
The two companies already had an existing partnership and had integrated their tools before the acquisition — and many of its customers were already using both tools, too.
“We are looking forward to joining Tricentis, the industry leader in continuous testing,” said Thibaud Bussière, president and co-founder at Neotys. “Today’s Agile and DevOps teams are looking for ways to be more strategic and eliminate manual tasks and implement automated solutions to work more efficiently and effectively. As part of Tricentis, we’ll be able to eliminate laborious testing tasks to allow teams to focus on high-value analysis and performance engineering.”
NeoLoad will continue to exist as a stand-alone product, but users will likely see deeper integrations with Tricentis’ existing tools over time, include Tricentis Analytics, for example.
Johri tells me that he considers Tricentis one of the “best kept secrets in Silicon Valley” because the company not only started out in Europe (even though its headquarters is now in Silicon Valley) but also because it hasn’t raised a lot of venture rounds over the years. But that’s very much in line with Johri’s philosophy of building a company.
“A lot of Silicon Valley tends to pay attention only when you raise money,” he told me. “I actually think every time you raise money, you’re diluting yourself and everybody else. So if you can succeed without raising too much money, that’s the best thing. We feel pretty good that we have been very capital efficient and now we’re recognized as a leader in the category — which is a huge category with $30 billion spend in the category. So we’re feeling pretty good about it.”
Austin-based home lab testing kit startup Everlywell is expanding its scope considerably with two acquisitions, and a transformation that includes the establishment of a new parent company led by Everlywell CEO and co-founder Julia Cheek. The new entity, called Everly Health, will now offer services including at-home lab testing kits and education, population-scale testing through a U.S.-wide clinician network, telehealth and a payer-supported/enterprise self-collected lab test.
This is a big move for Everlywell, which was founded in 2015 (and which was a finalist in TechCrunch’s 2016 Disrupt SF Battlefield completion). The company has steadily iterated on its offerings, expanding its at-home testing from fertility products to food sensitivities and allergies, and last year, to at-home COVID-19 test collection.
Everly Health’s business now includes not only that kind of at-home consumer diagnostic and personal health education, but also many relationships through PWNHealth, which will rebrand to Everly Health Solutions, with health plans, employers and labs across the U.S.
Everlywell itself was actually a longtime partner of PNWHealth, which is what Cheek told me an in interview actually helped make the acquisition make so much sense to both companies. They’d been working together for years, and that collaboration had only deepened in the wake of the COVID-19 pandemic.
“What we found over the last year was we were collaborating on all these different enterprise partnerships to offer solutions, and so our cultures are really well aligned, and our teams have worked closely together,” she said. “And we both share this common ethos that we felt the urgent need to help people and to save lives, but also this discipline around consumer-friendly and enabled care, grounded in diagnostics.”
Overall, Cheek said that the decision to go out and acquire the pieces of the puzzle needed to deliver a more comprehensive care offering was partly driven by the pandemic, but that really just drove an acceleration of what Everlywell was already beginning to see before COVID-19. Freshly capitalized with the $175 million it raised last December, the startup was in a position to make some bold moves in order to make the most of the moment.
“Before the pandemic, but especially during and looking out to post-pandemic, we have just seen this massive acceleration of the need for consumer friendly testing services,” she said. “Our business has continued to grow exponentially, even since normal doctor’s appointments resumed, orders of magnitude, 300% growth. We sat back and said, since we believe healthcare is in a watershed moment post-pandemic, where do we think we need to actually be able to offer a full-service diagnostic solution as this entire space grows. So it’s Everlywell as a consumer-friendly brand, but it’s also this massive enterprise need for home testing, and broader consumer diagnostics.”
The new acquisitions do add some complexity to Everly Health’s business, since its Everly Health Solutions also serves a number of customers that would be considered competitive with Everlywell. Cheek points out that both businesses have a demonstrated track record of security and data integrity, compliant with HIPAA standards, and says that they’re setting up a strict firewall that will result in “complete data independence” of Everly Health Solutions to ensure there’s no possibility of anti-competitive behavior.
The companies will however share customer experience, design and product resources, however, and the plan is to build a unified brand focused on high-quality customer engagement across the board.
Everly Health hasn’t released the financial details of the transaction, but it has shared shared that PWNHealth CEO Sanjay Pingle will be acting in a transitional role in the combined company for the time being, and will serve on the board of Everly Health. Investors in PWNHealth, including Spectrum Equity, and Blue Cross/Blue Shield corporate VC Blue Venture Fund will also retain an ownership stake in Everly Health.
It’s demo day for the current Y Combinator class, so we’ll have a largely early-stage focus at TechCrunch today. But there’s also a host of late- and super-late-stage news this morning that matters.
Let’s get to all of it before we start to talk accelerators, overheated pre-seed valuations and the like.
There are three things to discuss. First, the possible $10 billion exit of Discord to Microsoft. Discord is a well-financed unicorn that has raised oodles of capital and reportedly sports rapidly expanding revenues. Our goal will be to vet whether the price tag in question makes any sense, or if it is too low.
Second: Real estate-tech company Compass has set an IPO price range we need to explore. Is its resulting valuation strong? Does it line up with its recent financial performance?
It’s a lot. But if we don’t get through it all now, we’ll fall behind and feel silly later. Let’s get to work!
Microsoft might be getting good at community, which is an odd thing to say about the enterprise software and cloud computing giant. The company’s Xbox gaming ecosystem has survived the test of time, Github is doing fine under Microsoft’s auspices, and Minecraft seems unharmed by Redmond’s stewardship.
That means gamers, developers and kids are all content to hang with Satya Nadella and company. Adding Discord to the mix might give Microsoft even more tooling to augment its existing communities, or perhaps tie them more closely together. But that’s all product news, which isn’t our remit. Let’s talk numbers.
The New York Times reported that Discord has “held deal talks with Microsoft for a transaction that could top $10 billion.” That figure has been widely reported, so we’ll use it for our work.
With a possible valuation in hand, we need revenue numbers to figure out if the possible sale price makes any sense. Happily, we have somewhat fresh numbers: The Wall Street Journal reported earlier this month that “generated $130 million in revenue [in 2020], up from nearly $45 million in 2019.”
OneTrust, a late stage privacy platform startup, announced it was adding ethics and compliance to the mix this morning by acquiring Convercent, a company that was built to help build more ethical organizations. The companies did not share the purchase price.
OneTrust just raised $300 million on a fat $5.1 billion valuation at the end of last year, and it’s putting that money to work with this acquisition. Alan Dabbiere, co-chairman at OneTrust sees this acquisition as a way to add a missing component to his company’s growing platform of services.
“OneTrust instantly brings a proven ethics and compliance technology, team, and customer base into the OneTrust, further aligning the Chief Ethics & Compliance Officer strategy alongside privacy, data governance, third-party risk, GRC (governance, risk and compliance), and ESG (environmental, social and governance) to build trust as a competitive advantage,” he said.
Convercent brings 750 customers and 150 employees to the OneTrust team along with its ethics system, which includes a way for employees to report ethical violations to the company and a tool for managing disclosures.
Convercent can also use data to help surface bad behavior before it’s been reported. As CEO Patrick Quinlan explained in a 2018 TechCrunch article:
“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening.”
Quinlan wrote in a company blog post announcing the deal that joining forces with OneTrust will give it the resources to expand its vision.
“As a part of OneTrust, we’ll be combining forces with the leader across privacy, security, data governance, third-party risk, GRC, ESG—and now—ethics and compliance. Our customers will now be able to build centralized programs across these workstreams to make trust a competitive differentiator,” Quinlan wrote.
Convercent was founded in 2012 and has raised over $100 million, according to Pitchbook data. OneTrust was founded in 2016. It has over 8000 customers and 150 employees and has raised $710 million, according to the company.
ServiceNow became the latest company to take the robotic process automation (RPA) plunge when it announced it was acquiring Intellibot, an RPA startup based in Hyderabad, India. The companies did not reveal the purchase price.
The purchase comes at a time where companies are looking to automate workflows across the organization. RPA provides a way to automate a set of legacy processes, which often involve humans dealing with mundane repetitive work.
The announcement comes on the heels of the company’s no-code workflow announcements earlier this month and is part of the company’s broader workflow strategy, according to Josh Kahn, SVP of Creator Workflow Products at ServiceNow.
“RPA enhances ServiceNow’s current automation capabilities including low code tools, workflow, playbooks, integrations with over 150 out of the box connectors, machine learning, process mining and predictive analytics,” Khan explained. He says that the company can now bring RPA natively to the platform with this acquisition, yet still use RPA bots from other vendors if that’s what the customer requires.
“ServiceNow customers can build workflows that incorporate bots from the pure play RPA vendors such as Automation Anywhere, UiPath and Blue Prism, and we will continue to partner with those companies. There will be many instances where customers want to use our native RPA capabilities alongside those from our partners as they build intelligent, end-to-end automation workflows on the Now Platform,” Khan explained.
The company is making this purchase as other enterprise vendors enter the RPA market. SAP announced a new RPA tool at the end of December and acquired process automation startup Signavio in January. Meanwhile Microsoft announced a free RPA tool earlier this month, as the space is clearly getting the attention of these larger vendors.
ServiceNow has been on a buying spree over the last year or so buying five companies including Element AI, Loom Systems, Passage AI and Sweagle. Khan says the acquisitions are all in the service of helping companies create automation across the organization.
“As we bring all of these technologies into the Now Platform, we will accelerate our ability to automate more and more sophisticated use cases. Things like better handling of unstructured data from documents such as written forms, emails and PDFs, and more resilient automations such as larger data sets and non-routine tasks,” Khan said.
Intellibot was founded in 2015 and will provide the added bonus of giving ServiceNow a stronger foothold in India. The companies expect to close the deal no later than June.
A couple of weeks ago SentinelOne announced it was acquiring high-speed logging platform Scalyr for $155 million. Just this morning CrowdStrike struck next, announcing it was buying unlimited logging tool Humio for $400 million.
In Humio, CrowdStrike gets a company that will provide it with the ability to collect unlimited logging information. Most companies have to pick and choose what to log and how long to keep it, but with Humio, they don’t have to make these choices with customers processing multiple terabytes of data every single day.
Humio CEO Geeta Schmidt writing in a company blog post announcing the deal described her company in similar terms to Scalyr, a data lake for log information:
“Humio had become the data lake for these enterprises enabling searches for longer periods of time and from more data sources allowing them to understand their entire environment, prepare for the unknown, proactively prevent issues, recover quickly from incidents, and get to the root cause,” she wrote.
That means with Humio in the fold, CrowdStrike can use this massive amount of data to help deal with threats and attacks in real time as they are happening, rather than reacting to them and trying to figure out what happened later, a point by the way that SentinelOne also made when it purchased Scalyr.
“The combination of real-time analytics and smart filtering built into CrowdStrike’s proprietary Threat Graph and Humio’s blazing-fast log management and index-free data ingestion dramatically accelerates our [eXtended Detection and Response (XDR)] capabilities beyond anything the market has seen to date,” CrowdStrike CEO and co-founder George Kurtz said in a statement.
While two acquisitions don’t necessarily make a trend, it’s clear that security platform players are suddenly seeing the value of being able to process the large amounts of information found in logs, and they are willing to put up some cash to get that capability. It will be interesting to see if any other security companies react with a similar move in the coming months.
Humio was founded in 2016 and raised just over $31 million, according to Pitchbook Data. Its most recent funding round came in March 2020, a $20 million Series B led by Dell Technologies Capital. It would appear to be a decent exit for the startup.
CrowdStrike was founded in 2011 and raised over $480 million along the way before going public in 2019. The deal is expected to close in the first quarter, and is subject to typical regulatory oversight.
Knoq (formerly known as Polis) was a startup that recruited representatives to go door-to-door in their neighborhoods, talking up client products and services. So for obvious reasons, it faced challenges in 2020.
“We stopped knocking on doors in February, and this summer, we were trying to figure out what the path forward was,” founder and CEO Kendall Tucker told me.
The company had already pivoted once, shifting focus from political work to commercial marketing. But Tucker said Knoq also had some attractive assets, namely its “unique, huge consumer models” designed to predict whether someone would be interested in a given product, as well as “the experience of building out these teams of neighborhood representatives.”
As part of Ad Practitioners, Tucker said Knoq’s network of “Knoqers” will be able to interact with visitors to those properties and help “pair consumers with the right product,” whether that’s auto insurance or software. After all, she noted that plenty of consumers are connecting with Ad Practitioners via chat bots and phone calls: “These are people already asking for help … we’re really just connecting the dots.”
Image Credits: Knoq
In the acquisition announcement, Ad Practitioners CEO Greg Powel made a similar point, saying that the deal represents “a shared vision of helping people make decisions through conversations driven by data and technology while educating people about products and services that matter.”
“The Money and ConsumersAdvocate.org brands are already trusted by millions of highly-engaged users,” Powel continued. “Together, we foresee a world where consumers come to our sites for great content [and] reviews and to speak with representatives who can help them find the personal information they need.”
Knoq leadership has already moved to join Ad Practitioners in Puerto Rico, with the rest of the Knoq team set to relocate later this year as well.
You might think a startup would be inclined to stay put in its current location (in Knoq’s case, Boston), at least for the duration of the pandemic, but Tucker said she’s a big believer in seeing your team in person. In fact, the Knoq team had socially distanced outdoor meetups over the summer, “to brainstorm or just hang out and make sure people are okay.” Plus, she’s excited about the possibility of “hiring the amazing people on this island.”
The financial terms of the acquisition were not disclosed. Knoq had most recently raised $2.5 million from Initialized Capital and Haystack.vc, and Tucker said it was crucial that the acquisition provided a good outcome not just for her team and herself, but also her investors.
“We’re so excited for Kendall and her team on their successful exit to Ad Practitioners,” said Initialized General Partner Alda Leu Dennis in a statement. “It’s been a pleasure partnering with Knoq over the last few years. The Knoq team will bring a tech-forward approach to sales outreach and customer analytics. And, Kendall’s skills as a brilliant builder, operator and strategic thinker will be a huge asset for Ad Practitioners.”
Indian conglomerate Tata Group has reached an agreement to acquire a majority stake in grocery delivery startup BigBasket, a source familiar with the matter told TechCrunch.
The salt-to-software giant is buying over 60% stake in BigBasket, valuing the Indian startup between $1.8 billion to $2 billion, the source said, requesting anonymity as the deal is still private. BigBasket has raised more than $750 million prior to the deal with Tata.
Indian news network ET Now reported on Tuesday that the two firms were in advanced talks, signals of which began to emerge in local media two quarters ago. Two BigBasket co-founders and Tata Group did not respond to a request for comment.
Chinese internet giant Alibaba, which owns nearly 30% stake in BigBasket, and a handful of other investors are getting a near complete exit from the startup as part of the deal with Tata Group, the source said. New Delhi introduced restrictions last year that made it difficult for Chinese investors to write checks to Indian firms.
The move comes as Mumbai-headquartered Tata Group, which reported a revenue of $113 billion in 2019 and operates several popular brands such as Jaguar Land Rover and tea maker Tetley, looks to expand to more consumer businesses and works to develop a so-called super app in the world’s second-largest internet market.
Bangalore-headquartered BigBasket, which competes with SoftBank-backed Grofers and Reliance’s JioMart, operates in over two dozen cities in India and turned profitable months into the coronavirus pandemic as sales skyrocketed on the platform.
BigBasket and Grofers’s userbases skyrocketed by as much as 80% last year, analysts at Citi Bank estimated in recent note, adding that JioMart, run by India’s richest man Mukesh Ambani, had already started to pose serious competition.
In a recent note to clients, Bank of America analysts estimated that the online grocery delivery market could be worth $12 billion in India by 2023.
“Competition is high in the sector with large verticals like BigBasket/Grofers and horizontal like Amazon/Flipkart trying to convert the unorganized market to organized one. Till recently the No 1 player in the space was BigBasket, with it hitting $1 billion annualized GMV & selling over 300,000 orders every day. Reliance Industries also threw its hat with the company launching its JioMart app in May-20 across 200 cites,” they wrote.
The expansion of Reliance Industries, one of India’s largest industrial houses, in e-commerce last year may have prompted Tata Group to accelerate its digital efforts. Ambani raised more than $26 billion for his telecom and retail empires Jio Platforms and Reliance Retail last year from a roster of marquee investors including Facebook and Google.
Tata Group was working to expand to several consumer-facing digital services as early as 2016, but a boardroom coup put all those plans on the back burner, The Information reported in December.
Cloud monitoring platform Datadog has announced that it plans to acquire Sqreen, a software-as-a-service security platform. Originally founded in France, Sqreen participated in TechCrunch’s Startup Battlefield in 2016.
Sqreen is a cloud-based security product to protect your application directly. Once you install the sandboxed Sqreen agent, it analyzes your application in real time to find vulnerabilities in your code or your configuration. There’s a small CPU overhead with Sqreen enabled, but there are some upsides.
It can surface threats and you can set up your own threat detection rules. You can see the status of your application from the Sqreen dashboard, receive notifications when there’s an incident and get information about incidents.
For instance, you can see blocked SQL injections, see where the injection attempts came from and act to prevent further attempts. Sqreen also detects common attacks, such as credential stuffing attacks, cross-site scripting, etc. As your product evolves, you can enable different modules from the plugin marketplace.
Combining Datadog and Sqreen makes a lot of sense, as many companies already rely on Datadog to monitor their apps. Sqreen has a good product, Datadog has a good customer base. So you can expect some improvements on the security front for Datadog.
Sqreen raised a $2.3 million round from Alven Capital, Point Nine Capital, Kima Ventures, 50 Partners and business angels. It then participated in TechCrunch’s Startup Battlefield — it made it to the finals but didn’t win the competition. The startup attended Y Combinator a bit later.
In 2019, Sqreen raised a $14 million Series A round led by Greylock Partners with existing investors Y Combinator, Alven and Point Nine participating once again.
Datadog and Sqreen have signed a definitive acquisition agreement. Terms of the deal remain undisclosed and the acquisition should close in Q2 2021.
Five-year-old “slow dating” app Once has been acquired by the Dating Group, one of the largest companies in the dating world, for $18 million in cash and stock. Dating Group has 73 million registered users across a range of portfolio apps, including Dating.com.
Clémentine Lalande, co-founder and CEO of Once, will continue leading the company under a two-year agreement. Fellow co-founder Jean Meyer retained a stake in the company after departing two years ago.
Once has 9 million users on its platform, while the startup also garnered a further 1 million from a spin-out app it later launched called Pickable.
Once is a dating app that uses matching algorithms to deliver just one match per day to each user. It pitched itself as an alternative to the frenetically paced apps such as Tinder and Bumble. Indeed, Bumble revealed last week that two in five people of those it surveyed are taking longer to get to know someone as a result of pandemic lockdowns. And 38% Bumble users admit that it had made them want something more serious. So Once had a ready market.
Each pair on the Once app has 24 hours of each other’s attention and can continue chatting if they “like” each other. The AI looks at the account’s info, dating preferences and previous history in order to find the best possible match. Users can also rate each particular profile to let the AI better understand their taste.
In a statement, Lalande said: “I am thrilled to join the Dating Group today, both because of their proven focus on post-swiping dating alternatives, and to leverage the huge synergies between Once and Dating Group. In such a concentrated and competitive market having a large partner will allow us to augment our reach and accelerate geographical expansion”.
Bill Alena, chief investment officer at Dating Group said: “We strongly believe in the concept of AI and making quality matches. We see a huge potential in integrating Once into our portfolio. We’re excited to have Clémentine join Dating Group, she and her team have built a fascinating product and with this acquisition, Dating Group expands deeper into the Western European market.”
Dating Group has offices in seven countries and a team of more than 500 professionals, with more than 73 million registered users across the entire portfolio. Its brands include Dating.com, DateMyAge, Dil Mil, Cherish, Tubit, AnastasiaDate and ChinaLove.
Fyllo said it already works with 320 cannabis retailers across 25 states (plus Puerto Rico and Jamaica). According to Chief Marketing Officer Conrad Lisco, this acquisition allows the company to offer the industry’s “first end-to-end marketing solution,” combining consumer data, digital advertising, regulatory compliance (thanks to Fyllo’s acquisition of CannaRegs last year) and, through DataOwl, CRM and loyalty tied into a business’ point-of-sale system.
As an example, founder and CEO Chad Bronstein (previously the chief revenue officer at digital marketing company Amobee) said that retailers will be able to use the Fyllo platform to send promotional texts to regular customers while, crucially, ensuring that those campaigns are fully in compliance with state and local regulations. He added that eventually, the platform could be used beyond cannabis, in other regulated industries.
“Beauty, gambling, etc. — the same things need to happen in every regulated industry, they would all benefit from loyalty and compliance automation,” Bronstein said.
In addition, he argued that mainstream brands are increasingly interested in using data around cannabis and CBD consumers, as borne out in a Forrester study commissioned by Fyllo.
Lisco said this acquisition comes at a crucial time for the cannabis industry, with dispensaries classified as essential businesses in many states, as well as continuing momentum behind marijuana legalization.
“In 2020, cannabis came of age,” he said. “We would say it went from illicit to essential in 10 months … 2021 is really about watching endemic [marijuana] brands try to scale, so that they can capitalize on the explosive growth. They’ve historically been excluded from the kinds of integrated marketing capabilities that other non-endemic [mainstream] brands get to use when they go to market.”
Bronstein said Fyllo aims to bring those capabilities to marijuana brands, first by bringing its compliance capabilities into the DataOwl product. The company also aims to create a national cannabis loyalty platform, allowing a marijuana retailer in one state to easily expand its marketing capabilities into other states in a compliant fashion.
The financial terms of the acquisition were not disclosed. DataOwl co-founders Dan Hirsch and Vartan Arabyan are joining Fyllo, as is the rest of their team, bringing the company’s total headcount to 110.
“By integrating with Fyllo, DataOwl’s solutions will reach the widest possible audience via the industry’s most innovative marketing platform,” Hirsch said in a statement.
Citrix, which is best known for its digital workspaces, sees this as a good match, especially at a time where employees have been forced to work from home because of the pandemic. By combining the two companies, it produces a powerful combination, one that didn’t escape Citrix CEO and president David Henshall
“Together, Citrix and Wrike will deliver the solutions needed to power a cloud-delivered digital workspace experience that enables teams to securely access the resources and tools they need to collaborate and get work done in the most efficient and effective way possible across any channel, device or location,” Henshall said in a statement.
Andrew Filev, founder and CEO at Wrike, who has managed the company through these multiple changes and remains at the helm, believes his company has landed in a good spot with the Citrix purchase.
“First, as part of the Citrix family we will be able to scale our product and accelerate our roadmap to deliver capabilities that will help our customers get more from their Wrike investment. We have always listened to our customers and have built our product based on their feedback — now we will be able to do more of that, faster.,” Filev wrote in a company blog post announcing the deal, stating a typical argument from CEOs of acquired companies.
The startup reports $140 million ARR, growing at 30% annually, so that comes out to approximately 16x its present-day revenue, which is the price companies are generally paying for acquisitions these days. However, as Wrike expects to reach $180 million to $190 million in ARR this year, the company’s sale price could look like a bargain in a few years’ time if the projections come to pass.
The price was not revealed in the 2018 sale, but it surely feels like a big win for Vista. Consider that Wrike has previously raised just $26 million.