FreshRSS

🔒
❌ About FreshRSS
There are new available articles, click to refresh the page.
Before yesterdayYour RSS feeds

Private equity giveth, and private equity taketh away

By Natasha Mascarenhas

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Natasha and Alex and Grace and Chris gathered to dig through the week’s biggest happenings, including some news of our own. As a note, Equity’s Monday episode will be landing next Tuesday, thanks to a national holiday here in the United States. And we have something special planned for Wednesday, so stay tuned.

Ok! Here’s the rundown from the show:

That’s a wrap from us for the week! Keep your head atop your shoulders and have a great weekend!

Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Barbershop technology startup theCut sharpens its platform with new $4.5M round

By Christine Hall

TheCut, a technology platform designed to handle back-end operations for barbers, raised $4.5 million in new funding.

Nextgen Venture Partners led the round and was joined by Elevate Ventures, Singh Capital and Leadout Capital. The latest funding gives theCut $5.35 million in total funding since the company was founded in 2016, founder Obi Omile Jr. told TechCrunch.

Omile and Kush Patel created the mobile app that provides information and reviews on barbers for potential customers while also managing appointments, mobile payments and pricing on the back end for barbers.

“Kush and I both had terrible experiences with haircuts, and decided to build an app to help find good barbers,” Omile said. “We found there were great barbers, but no way to discover them. You can do a Google search, but it doesn’t list the individual barber. With theCut, you can discover an individual barber and discover if they are a great fit for you and won’t screw up your hair.”

The app also enables barbers, perhaps for the first time, to have a list of clients and keep notes and photos of hair styles, as well as track visits and spending. By providing payments, barbers can also leverage digital trends to provide additional services and extras to bring in more revenue. On the customer side, there is a search function with barber profile, photos of their work, ratings and reviews, a list of service offerings and pricing.

Omile said there are 400,000 to 600,000 barbers in the U.S., and it is one of the fastest-growth markets. As a result, the new funding will be used to hire additional talent, marketing and to grow the business across the country.

“We’ve gotten to a place where we are hitting our stride and seeing business catapulting, so we are in hiring mode,” he added.

Indeed, the company generated more than $500 million in revenue for barbers since its launch and is adding over 100,000 users each month. In addition, the app averages 1.5 million appointment bookings each month.

Next up, Omile wants to build out some new features like a digital store and the ability to process more physical payments by rolling out a card reader for in-person payments. TheCut will also focus on enabling barbers to have more personal relationships with their customers.

“We are building software to empower people to be the best version of themselves, in this case barbers,” he added. “The relationship with customers is an opportunity for the barber to make specific recommendations on products and create a grooming experience.”

As part of the investment, Leadout founder and managing partner Ali Rosenthal joined the company’s board of directors. She said Omile and Patel are the kind of founders that venture capitalists look for — experts in their markets and data-driven technologists.

“They had done so much with so little by the time we met them,” Rosenthal added. “They are creating a passionate community and set of modern, tech-driven features that are tailored to the needs of their customers.”

 

For VCs, the game right now is musical chairs

By Connie Loizos

In many ways, there has never been a better time to be a venture capitalist. Nearly everyone in the industry is raking in money, either through long-awaited exits or because more capital flooding into the industry has meant more money in management fees  — and sometimes both.

Still, a growing number of early-stage investors with whom we talk to on a routine basis are wary about the pace of dealmaking. It’s not just that it’s a lot harder to write checks at what feels like a reasonable clip at the moment, or that most VCs feel they can no longer afford to be price sensitive. Many of the founders with whom they work are being handed follow-on checks before figuring out how best to deploy their last round of funding.

Consider that from 2016 through 2019, an average of 35 deals a month featured rounds of $100 million or more, according to the data company CB Insights. This year, 126 companies a month on average have been raising those kinds of megarounds. The froth is hardly contained to maturing companies. Even the median U.S. Series A valuation hit $42 million in the second quarter, driven in part crossover investors like Tiger Global, which closed 1.26 deals per business day in Q2. (Andreessen Horowitz wasn’t far behind.)

It makes for some bewildering times, including for longtime investor Jeff Clavier, the founder the early-stage venture firm Uncork Capital. Like many of his peers, Clavier is benefiting from the booming market. Among Uncork’s portfolio companies, for example is LaunchDarkly, a company that helps software developers avoid missteps. The seven-year-old company announced $200 million in Series D funding last month at a $3 billion valuation. That’s triple the valuation it was assigned early last year.

“It’s an awesome company, so I’m very excited for them,” says Clavier.

At the same time, he added, “You have to put this money to work in a very smart way.”

That’s not so easy in this market, where founders are inundated with interest and, in some cases, are talking term sheets after the first Zoom with an investor. (“The most absurd thing we’ve heard are funds that are making decisions after a 30-minute call with the founder,” says TX Zhou, the cofounder of L.A.-based seed-stage firm Fika Ventures, which itself just tripled the amount of assets it’s managing.)

More money can mean a much longer lifeline for a company. But as many investors have learned the hard way, it can also serve as a distraction, as well as hide fundamental issues with a business until it’s too late to address them.

Taking on more money also oftentimes goes hand-in-hand with a bigger valuation, and lofty valuations comes with their own positives and negatives. On the plus side, of course, big numbers can attract more attention to a company from the press, from customers, and from potential new hires.  At the same time, “The more money you raise, the higher the valuation it is, it catches up with you on the next round, because you got to clear that watermark,” says Renata Quintini of the venture firm Renegade Partners, which focuses largely on Series B-stage companies.

Again, in today’s market, trying to slow down isn’t always possible. Quintini says that some founders her firm has talked to have said, “‘I’m not going to raise any more because I cannot go faster; I cannot deploy more than my model is already supporting.'” For others, she continues, “You’ve got to look at what’s happening around you, and sometimes if your competitors are raising and they’re going to have a bigger war chest . . and [they’re] pushing the market forward . . . and maybe they can out-hire you or they can outspend you in certain areas where they can generate more traction than you . . .” that next check, often at the higher valuation, begins to look like the only option.

Many VCs have argued that today’s valuations make sense because companies are creating new markets, growing faster than before, and have more opportunities to expand globally, and certainly, in some cases, that it is true. Indeed, companies that were previously believed to be richly priced by their private investors, like Airbnb and Doordash, have seen their valuations soar as publicly traded companies.

Yet it’s also true that for many more companies, “valuation is completely disconnected from the [companies’] multiples,” says Clavier, echoing what other VCs acknowledge privately.

That might seem to be the kind of problem that investors love to face. But as been the case for years now, that depends on how long this go-go market lasts.

Clavier says that one of his own companies that “did a great Series A and did a great Series B ahead of its time is now being preempted for a Series C, and the valuation is just completely disconnected from their actual reality.”

He said he’s happy for the outfit “because I have no doubt they will catch up. But this is the point: they will have to catch up.”

For more from our conversation with Clavier, by the way, you can listen here.

Pixalate tunes into $18.1M for fraud prevention in television, mobile advertising

By Christine Hall

Pixalate raised $18.1 million in growth capital for its fraud protection, privacy and compliance analytics platform that monitors connected television and mobile advertising.

Western Technology Investment and Javelin Venture Partners led the latest funding round, which brings Pixalate’s total funding to $22.7 million to date. This includes a $4.6 million Series A round raised back in 2014, Jalal Nasir, founder and CEO of Pixalate, told TechCrunch.

The company, with offices in Palo Alto and London, analyzes over 5 million apps across five app stores and more 2 billion IP addresses across 300 million connected television devices to detect and report fraudulent advertising activity for its customers. In fact, there are over 40 types of invalid traffic, Nasir said.

Nasir grew up going to livestock shows with his grandfather and learned how to spot defects in animals, and he has carried that kind of insight to Pixalate, which can detect the difference between real and fake users of content and if fraudulent ads are being stacked or hidden behind real advertising that zaps smartphone batteries or siphons internet usage and even ad revenue.

Digital advertising is big business. Nasir cited Association of National Advertisers research that estimated $200 billion will be spent globally in digital advertising this year. This is up from $10 billion a year prior to 2010. Meanwhile, estimated ad fraud will cost the industry $35 billion, he added.

“Advertisers are paying a premium to be in front of the right audience, based on consumption data,” Nasir said. “Unfortunately, that data may not be authorized by the user or it is being transmitted without their consent.”

While many of Pixalate’s competitors focus on first-party risks, the company is taking a third-party approach, mainly due to people spending so much time on their devices. Some of the insights the company has found include that 16% of Apple’s apps don’t have privacy policies in place, while that number is 22% in Google’s app store. More crime and more government regulations around privacy mean that advertisers are demanding more answers, he said.

The new funding will go toward adding more privacy and data features to its product, doubling the sales and customer teams and expanding its office in London, while also opening a new office in Singapore.

The company grew 1,200% in revenue since 2014 and is gathering over 2 terabytes of data per month. In addition to the five app stores Pixalate is already monitoring, Nasir intends to add some of the China-based stores like Tencent and Baidu.

Noah Doyle, managing director at Javelin Venture Partners, is also monitoring the digital advertising ecosystem and said with networks growing, every linkage point exposes a place in an app where bad actors can come in, which was inaccessible in the past, and advertisers need a way to protect that.

“Jalal and Amin (Bandeali) have insight from where the fraud could take place and created a unique way to solve this large problem,” Doyle added. “We were impressed by their insight and vision to create an analytical approach to capturing every data point in a series of transactions —  more data than other players in the industry — for comprehensive visibility to help advertisers and marketers maintain quality in their advertising.”

 

Corelight secures $75M Series D to bolster its network defense offering

By Carly Page

Corelight, a San Francisco-based startup that claims to offer the industry’s first open network detection and response (NDR) platform, has raised $75 million in Series D investment led by Energy Impact Partners. 

The round — which also includes a strategic investment from Capital One Ventures, Crowdstrike Falcon Fund and Gaingels — brings Corelight’s total raised to $160 million, following a $50 million Series C in October 2019, a $25 million Series B in September 2018 and a $9.2 million Series A in July 2017.

While it’s raised plenty of capital in the past few years, the startup isn’t planning its exit just yet. Brian Dye, CEO of Corelight, tells TechCrunch that given Corelight’s market opportunity and performance — the startup claims to be the fastest-growing NDR player at scale — it plans to invest in growth and expects to raise additional capital in the future. 

“Public listing time frames are always hard to forecast, and we view the private markets as attractive in the short term, so we expect to remain private for the next couple years and will look at market conditions then to decide our next step,” Dye said, adding that Corelight plans to use its latest investment to fuel the acceleration of its global market presence and to develop new data and cloud-based offerings.

“Aside from go-to-market expansion, we are investing to ensure that the insight we provide both continues to lead the industry and can be readily used by customers of all types,” he added. 

Corelight, which competes with the likes of FireEye and STG-owned McAfee, was founded in 2013 when Dr. Vern Paxson, a professor of computer science at the University of California, Berkeley, joined forces with Robin Sommer and Seth Hall to build a network visibility solution on top of an open source framework called Zeek (formerly Bro). 

Paxson began developing Zeek in 1995 when he was working at Lawrence Berkeley National Laboratory (LBNL). The software is now widely regarded as the gold standard for both network security monitoring and network traffic analysis and has been deployed by thousands of organizations around the world, including the U.S. Department of Energy, various agencies in the U.S. government and research universities like Indiana University, Ohio State and Stanford.

Virtual events startups have high hopes for after the pandemic

By Karan Bhasin

Few people thought of virtual events before the pandemic struck, but this format has fulfilled a unique and important need for companies and organizations large and small during the pandemic. But what will virtual events’ value be as more of the world attempts to return to life before COVID-19?

To find out, we caught up with top executives and investors in the sector to learn about the big trends they’re seeing — as the sequel to this survey we did in March 2020.

Certain use cases have been proven, they say. Today, you can find numerous small niche events available year-round that might have been buried in the back of a larger in-person conference before 2020. For organizations, internal virtual events can also be instrumental in helping connect and promote engagement for remote-first teams.

However, some respondents acknowledged that low-quality virtual events are growing ever more common, and everyone agreed that there is much more work to be done.

We surveyed:

Xiaoyin Qu, founder and CEO, Run The World

With the pandemic hopefully becoming more manageable soon, do you feel a return to in-person events is inevitable?

Certain types of events will go back to in person. Obviously, something to do with a President’s Club — the company rewards you with a party in Hawaii — that kind of thing will not go virtual. I think events more focused on increasing reach will continue to trend toward virtual.

“Hybrid is just another buzzword to say that both online and offline events formats will coexist. Of course they will.”

We’re also seeing that many events are getting smaller, more niche. Before the pandemic, if we look at a general pediatric conference, for example, an attendee may only be interested in two topics out of the 200 offered. But now we’ve seen that there’s a rise in many niche events that focus on very specific topics, which helps streamline these events for attendees.

I think such events are still going to happen virtually just because they’re easier to organize and people can have more in-depth conversations. Internal virtual events for employees is another category that is getting more traction, because companies have been going remote. So many the internal events like the company happy hour — events that help employees engage better — we think that’s still going to happen virtually. So there are a number of use cases we think will continue to be virtual and are probably better virtual.


Help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.


What sort of trends do you think will emerge once in-person events are possible again?

Another important trend we’re seeing is that a lot of organizers have begun hosting events more frequently. They were doing large conferences in the past, but now they’re pivoting or they’re rethinking their strategy. They realize that hosting maybe 10 events a year is better than hosting one big event every year. A traditional conference is usually multiday, with maybe 200 different topics and 100 different speakers. Now a lot of people are thinking about spreading it out throughout the year.

Forum Brands secures $100M in debt financing to acquire more e-commerce brands

By Mary Ann Azevedo

Forum Brands, an e-commerce acquisition platform, announced today that it has secured $100 million in debt funding from TriplePoint Capital.

The financing comes just just over two months after the startup raised $27 million in an equity funding round led by Norwest Venture Partners.

Brenton Howland, Ruben Amar and Alex Kopco founded New York-based Forum Brands in the summer of 2020, during the height of the COVID-19 pandemic. 

“We’re buying what we think are A+ high-growth e-commerce businesses that sell predominantly on Amazon and are looking to build a portfolio of standalone businesses that are category leaders, on and off Amazon,” Howland told me at the time of the company’s last raise. “A source of inspiration for us is that we saw how consumer goods and services changed fundamentally for what we think is going to be for decades and decades to come, accelerating the shift toward digital.”

Since we covered the company in June, Forum Brands says it has acquired several new brands, including Bonza, a seller of pet products, and Simka Rose, a baby-focused brand specializing in eco-friendly products. Simka sells in the U.S. and the EU and is an example of how Forum is expanding globally, Amar said.

Howland and Amar emphasize that the Forum team continues to focus on quality over quantity when evaluating potential acquisitions. Although they meet with 15-20 founders a week, they are selective in which companies they choose to acquire.

“We continue to be a quality-first buyer, and not quantity-driven,” Amar said, noting that the company will still help a company build its brand even if it does not yet meet Forum’s quality threshold or if the founders are just not yet ready to sell.

The new funds will be used to, naturally, acquire more e-commerce companies. As part of the debt financing, Sajal Srivastava, co-CEO and co-founder of TriplePoint Capital, will be joining Forum’s board of directors.

“We are impressed not only by Forum’s long-term strategy and ability to leverage technology and deep collective e-commerce and M&A experience but also by how Forum cultivates relationships with their sellers both before and after partnering with them,” he said in a written statement.

At the time of its June raise, Forum had about 20 employees. As of today, it has about 40.

Forum’s technology employs “advanced” algorithms and over 100 million data points to populate brand information into a central platform in real time, instantly scoring brands and generating accurate financial metrics.

On August 31, we covered the news that on the heels of Heroes announcing a $200 million raise to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same announced some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, closed on $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.

Insurify, a ‘virtual insurance agent,’ raises $100M Series B

By Mary Ann Azevedo

How many of us have not switched insurance carriers because we don’t want to deal with the hassle of comparison shopping?

A lot, I’d bet.

Today, Insurify, a startup that wants to help people make it easier to get better rates on home, auto and life insurance, announced that it has closed $100 million in an “oversubscribed” Series B funding round led by Motive Partners.

Existing backers Viola FinTech, MassMutual Ventures, Nationwide, Hearst Ventures and Moneta VC also put money in the round, as well as new investors Viola Growth and Fort Ross Ventures. With the new financing, Cambridge, Massachusetts-based Insurify has now raised a total of $128 million since its 2013 inception. The company declined to disclose the valuation at which the money was raised.

Since we last covered Insurify, the startup has seen some impressive growth. For example, it has seen its new and recurring revenue increase by “6x” since it closed its Series A funding in the 2019 fourth quarter. Over the last three years, Insurify has achieved a CAGR (compound annual growth rate) of 151%, according to co-founder and CEO Snejina Zacharia. It has also seen consistent “2.5x” year-over-year revenue growth, she said.

Insurify has built a machine learning-based virtual insurance agent that integrates with more than 100 carriers to digitize — and personalize — the insurance shopping experience. There are others in the insurtech space, but none that we know of currently tackling home, auto and life insurance. For example, Jerry, which has raised capital twice this year, is focused mostly on auto insurance, although it does have a home product. The Zebra, which became a unicorn this year, started out as a site for people looking for auto insurance via its real-time quote comparison tool. Over time, it has also evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. But it too is mostly focused on auto.

Zacharia said that since Insurify’s Series A funding, it has expanded its home insurance marketplace, deepened its carrier integrations to provide users an “instant” purchase experience and launched its first two embedded insurance products through partnerships with Toyota Insurance Management Solutions and Nationwide (the latter of which also participated in the Series B funding round).

Image Credits: Insurify

Last year, when ShyScanner had to lay off staff, Insurify scooped up much of its engineering team and established an office in Sofia, Bulgaria.

Zacharia, a former Gartner executive, was inspired to start the company after she was involved in a minor car accident while getting her MBA at MIT. The accident led to a spike in her insurance premium and Zacharia was frustrated by the “complex and cumbersome” experience of car insurance shopping. She teamed up with CTO Tod Kiryazov to build Insurify, which the pair describe as a virtual insurance agent that offers real-time quotes.

“We decided to build the most trusted virtual insurance agent in the industry that allows for customers to easily search, compare and buy fully digitally — directly from their mobile phone, or desktop, and really get a very smart, personalized experience based on their unique preferences,” Zacharia told TechCrunch. “We leverage artificial intelligence to be able to make recommendations on both coverage as well as carrier selection.”

Notably, Insurify is also a fully licensed agent that takes over the fulfillment and servicing of the policies. Since the company is mostly working as an insurance agent, it gets paid new and renewed commission. So while it’s not a SaaS business, its embedded insurance offerings have SaaS-like monetization.

“Our goal is to provide an experience for the end consumer that allows them to service and manage all of their policies in one place, digitally,” Zacharia said. “We think that the data recommendations that the platform provides can really remove most of the friction that currently exists in the shopping experience.”

Insurify plans to use its fresh capital to continue to expand its operations and accelerate its growth plans. It also, naturally, wants to add to its 125-person team.

“We want to build into our API integrations so customers can receive real-time direct quotes with better personalization and a more tailored experience,” Kiryazov said. “We also want to identify more embedded insurance opportunities and expand the product functionality.”

The company also down the line wants to expand into other verticals such as pet insurance, for example.

Insurify intends to use the money in part to build brand awareness, potentially through TV advertising.

“Almost half of our revenue comes from self-directed traffic,” Zacharia said. “So we want to explore more inorganic growth.”

James “Jim” O’Neill, founding partner at Motive Partners and partner Andy Rear point out that online purchasing now accounts for almost all of the growth in U.S. auto insurance. 

“The lesson from other markets which have been through this transition is that customers prefer choice, presented as a simple menu of products and prices from different insurers, and a straightforward online purchasing process,” they wrote via email. “The U.S. auto market is huge: even a slow transition to online means a massive opportunity for Insurify.”

In conducting their due diligence, the pair said they were impressed with how the startup is building a business model “that works for customers, insurers and white-label partners.”

Harel Beit-On, founder and general partner at Viola Growth, believes that the quantum leap in e-commerce due to COVID-19 will completely transform the buying experience in almost every sector, including insurance.

“It is time to bring the frictionless purchasing experience that customers expect to the insurance space as well,” she said. “Following our fintech fund’s recent investment in the company, we watched Insurify’s immense growth, excellent execution with customer acquisition and building a brand consumers trust.”

Vista Equity to acquire majority stake in SaaS startup Drift, taking it to unicorn status

By Mary Ann Azevedo

Private equity firm Vista Equity Partners announced today that it is taking a majority stake in Drift, a company which aims to be the Amazon of businesses, with a “growth investment” that propels the venture-backed startup to unicorn status.

Unfortunately, neither party would disclose the amount of the investment, or Drift’s new valuation. But co-founder and CEO David Cancel did say the SaaS company saw 70% growth in its annual recurring revenue (ARR) in 2020 compared to the year prior and is on target for a similar metric this year. It is not yet profitable, as it is focused on growth, he added.

Prior to this financing, Boston-based Drift had raised $107 million in funding from the likes of Sequoia Capital, CRV and General Catalyst since its 2015 inception.

So just what does the company do exactly? The startup says it is out to ”reimagine the B2B buying experience,” according to Cancel. By using its software, Drift’s 50,000 customers are able to bring together sales and marketing teams on one platform to “deliver personalized conversations” that the company says build trust and accelerate revenue. 

Its customers include ServiceNow, Okta, Grubhub, Mindbody, Adobe, Ellie May and Snowflake, among others. Today 75% of Drift’s customers are mid-market enterprise, according to Cancel. 

Over the past five years, Drift has worked to create and define something it describes as “Conversational Marketing” with the goal of helping marketers “harness the digital experience for lead generation.” Or to put it more simply, Drift subscribers can use chatbots to help turn web visits into sales.

The company says it is out to remove the friction between buyers and sellers so they can not only get more leads, but also close more sales. This led Drift to expand its focus to build a platform that includes conversational sales, which integrates chat, email, video and artificial intelligence to power conversations, not just on a customer’s website, but for the sales team too. 

Cancel said that Vista’s strategic growth investment will help the company move even faster, expand globally and launch a new B2B category called “Conversation Commerce,” an interactive approach to conversations that Drift believes has the potential to “transform the entire B2B revenue function.”

Basically, the company is trying to make the B2B buying/selling experience similar to that of a B2C one. At least 80% of B2B buyers are not only looking for, but expect, a buying experience similar to that of a B2C customer, according to Cancel.

So far in 2021, Drift’s customers generated $5 billion in pipeline value by making the customer side of the buying process easier, he said.

For Cancel, a serial entrepreneur who previously founded and sold four other companies, the notion of owning a company with a unicorn valuation was not something he and co-founder and CTO Elias Torres were overly consumed with.

But what did appeal to the pair was the opportunity to add to the too-short list of U.S.-based unicorns with Latin founders and serve as an inspiration for other entrepreneurs of Latin descent. Cancel’s parents emigrated from Puerto Rico and Cuba while Torres emigrated from Nicaragua in his teens.

“I didn’t really care about that [unicorn] status except for one reason and the reason was that we are both Latino and if we hit this milestone, then we would be part of the less than 1% of Latinos that had ever done that,” Cancel told TechCrunch. “And that was important to us because we believe that we have the responsibility to pay it forward and to help people and to inspire other people who are like us and are often marginalized. We want to show that they can do this too.”

Torres agreed, saying that he and Cancel were “proud to be one of the only Latino-founded companies to ever achieve over $1 billion valuation – a rare, Latino-founded unicorn.”

“We want to see more of us do the same and we will pave the way for other Latino founders and leaders to achieve success,” he added.

By having a majority owner in Vista, which focuses exclusively on backing enterprise software, data and technology-enabled businesses, Cancel believes that Drift can “get more efficient in some areas.” He also thinks that the firm can help it ramp up its acquisitions pace. (So far it has made three.)

The nearly 600-person company still has its sights on going public, according to Cancel, and believes that by working with Vista, it will have a “clearer path” to do so.

“It’s something we think about a lot,” he told TechCrunch. “It’s still in our future.”

Monti Saroya, co-head of the Flagship Fund and senior managing director at Vista, thinks that Drift represents a “compelling” opportunity for Vista.

“Drift is a company that is experiencing hypergrowth at scale, we and we believe the conversational marketing and sales tools it offers will continue to be in high demand as companies race to modernize their B2B commerce strategies,” he told TechCrunch.

Earlier this year, Vista — which has over $77 billion in assets under management — invested $242 million to acquire a minority stake in Vena, a Canadian company focused on the Corporate Performance Management (CPM) software space.

Meanwhile, Vista’s acquisition of Drift is expected to close in the fourth quarter of 2021.

Carbon Robotics secures $27M for its autonomous field weeders

By Brian Heater

Agricultural robotics firm Carbon Robotics (not to be confused with our former Battlefield contestant) announced this week that it has secured $27 million in funding. The round — which features Anthos Capital, Ignition Capital, Fuse Venture Partners and Voyager Capital — follows an $8.4 million Series A raised back in 2019. The company’s total funding is now at around $36 million.

“Weeding is one of the biggest challenges farmers face, especially with the rise of herbicide-resistant weeds and increasing interest in organic and regenerative methods,” founder and CEO Paul Mikesell said in a release. “This round of investment will enable us to scale our operations to meet the increasing demand for this technology. Additionally, this funding will allow our team to continue to innovate new products and identify revolutionary ways to apply technology to agriculture.”

The Seattle-based startup’s primary offering is an autonomous robot that uses lasers to zap weeds. The round follows the April announcement of Carbon’s latest-generation Autonomous Weeder, which it says is capable of eradicating around 100,000 weeds per hour. The pandemic has continued to accelerate interest in many agricultural robotics companies, as labor shortages continue to mount.

Carbon notes some international bans on various pesticides have left many farmers searching for an alternative solution. A system that works without the need for harmful chemicals that also reduces human labor in an industry often suffering from shortages in headcount has clear appeal.

The company says it has already sold out of its 2021 and 2022 stock, so one assumes scaling up production and headcount will be key investments from this round.

Job offer management platform Compa emerges from stealth with $3.9M

By Christine Hall

If you haven’t noticed yet, the hiring market is a hot one — and getting more complicated as enterprise talent acquisition leaders face technology gaps while assessing candidates. This leads to difficulty in determining compensation.

Enter Compa. The offer management platform provides “deal desk” software for recruiters to more easily manage their compensation strategies to create and communicate offers that are easy to understand and are unbiased.

Charlie Franklin, co-founder and CEO of Compa, told TechCrunch it was frustrating to lose a candidate at the compensation stage, so the company created its software to reduce the challenge of relying on crowdsourcing data or surveys to compare pay.

“Recruiters often lack the data and tools to figure out how much to pay people and communicate that effectively,” Franklin told TechCrunch. “We see talent acquisitions teams like a sales team. If you think of it from that perspective, they need to close a candidate, but to ask the recruiter to operate off of a spreadsheet slows that process down.”

Compa co-founders, from left, Charlie Franklin, Joe Malandruccolo and Taylor Cone. Image Credits: Compa

With Compa, recruiters can input pay expectations and compare recent offers and collaborate with other team members and hiring managers to reach pay consensus quicker. The software automates all of the market intelligence in real time and provides insights about compensation across similar industries and organizations.

The company, based in both California and Massachusetts, emerged from stealth Thursday with $3.9 million in seed funding led by Base10 Partners. Participation in the round also came from Crosscut Ventures and Acadian Ventures, as well as a group of strategic angel investors including 2.12 Angels, Oyster HR CEO Tony Jamous and Scout RFP co-founders Stan Garber and Alex Yakubovich.

Jamison Hill, partner at Base10 Partners, said via email his firm was doing research in the ESG “megatrend,” particularly looking for startups focused on compensation management, when it came across Compa.

He was attracted to the founders’ “clarity and conviction” on the company’s vision, their understanding of the pay gap in the market, how Compa’s solution would “create a new wave of smarter, more-data driven recruiting teams” and how it was enabling employers to use compensation and a positive offer management approach to differentiate itself from competitors.

“They deeply understand the nuances that come with enterprise-level HR teams and bring that expertise to every aspect of Compa’s product offering, which is why we believe Compa can emerge as a leader in this trend and chose to partner with this very special team,” Hill added.

Franklin, who previously led human resources M&A at Workday, founded Compa last year with  Joe Malandruccolo, who was on the engineering side at Facebook and Oculus, and Taylor Cone, who has done innovation consulting for organizations like Stanford University.

The company was bootstrapped prior to going after the seed round and will use the capital to expand the team and create additional products that fit into its mission of “making compensation fair and competitive for everyone,” Franklin said.

Going forward, he adds that job offers and compensation need to catch up to how quickly the world is changing. As more people work remotely and companies want to attract a diverse workforce, compensation will be an important factor.

“This is a long-term trend we are seeing in HR — compensation becoming more transparent — not just a spreadsheet shared internally, but a transition from secretive to open and accountable, Franklin said. “Technology is catching up to that, and we have the ability to produce outcomes that drive differences in pay.”

 

Virtual clinic Hey Jane raises $2.2M to solve for state anti-abortion legislation

By Christine Hall

As more states pass some type of abortion ban, Hey Jane, a virtual clinic startup offering telemedicine abortion care, announced Thursday that it raised $2.2 million in an oversubscribed round from a group of investors, including Koa Lab, Gaingels and Foursight Capital Partners.

The idea for the remote-first company stemmed from a conversation in 2019 that founder and CEO Kiki Freedman had with some friends regarding Missouri being one of six states that has one abortion clinic left. Freedman, who goes by a nickname to avoid violence against abortion providers, explained that, in fact, the clinic was slated for closure that summer, which would have meant Missouri was the first state to not have any abortion care. The clinic was ultimately able to stay open.

“Many of the digital health clinics I saw were focused on men’s wellness and didn’t talk about women’s health,” Freedman told TechCrunch. “I thought this virtual model could be used for safe and discreet abortion care.”

One of Hey Jane’s investors, who wished to remain publicly anonymous, “was excited to invest in Freedman and Hey Jane” because he agreed — women’s health was an underserved category. Unlike men’s healthcare, abortion care is segregated from women’s health care. This stemmed from Reagan’s mandates separating abortion care from hospitals.

One in four women will have an abortion by age 45, according to Planned Parenthood. However, just in 2021, over 90 abortion restrictions were enacted in the United States, and there are 1,320 restrictions in total, according to The Guttmacher Institute, a nonprofit research and policy organization committed to advancing sexual and reproductive health and rights. Currently, Arkansas and Oklahoma have near-total abortion bans except when a patient’s life is endangered. Meanwhile, Idaho, South Carolina and Texas ban abortion at either six weeks or with very limited exceptions.

In July 2020, a federal judge granted approval for women to obtain abortion medication without having to see a doctor, which opened the door for companies, like Hey Jane and others, to begin offering “no touch” services for people who were less than 10 weeks pregnant.

The $249 treatment includes screening by a medical doctor, FDA-approved medication prescribed and shipped overnight to the person’s house, follow-up virtual visits and the ability to chat with a doctor during the entire process. The Hey Jane team also checks in frequently with the patient via text message.

The company said removing financial barriers is “a huge priority for us.” Though the company does not accept insurance yet, it is offering financial assistance through a nonprofit abortion fund partner, Reprocare. This organization subsidizes up to $110 of the $249 treatment so that patients can pay as little as $139 for treatment.

The new funding will enable Hey Jane to expand into new states and add to its team of seven to build out the product and automated process and for legal research so the company can stay abreast of telemedicine laws and telemedicine abortion laws for each state.

There are several regulatory requirements Hey Jane must follow in each state, including ensuring that clinicians only provide care to patients in states in which they’re licensed. For this reason, the company has clinicians licensed in each state in which it operates who are ready to prescribe medication when appropriate. It also has on-demand experts for emotional relief.

Hey Jane just launched across California this week and is also in New York and Washington. This means that Hey Jane’s service areas now cover up to 34% of all abortions performed annually in the United States, Freedman said. Those states were chosen first because California and New York have the highest number of abortions performed annually, she added.

“Although people in those states may have easier access to clinics, they could still strongly benefit from treatment with Hey Jane since it’s as safe and effective and half the price of in-clinic care,” Freedman said. “It doesn’t require costs, or time for travel or child care, ensures privacy and discretion and provides additional layers of emotional support.”

At the time of press, the company was in the process of going live in Connecticut, and Freedman expects to be in 10 states by the end of the year.

Freedman plans to be able to offer treatment in all 50 states in coming years. However, there are regulatory barriers limiting access to telemedicine abortion in 19 states. Hey Jane is partnering with the Advancing New Standards in Reproductive Health research group out of the University of California at San Francisco to gather information to this end.

“We are working with leading researchers to expand the ample existing evidence that this modality of care is safe, effective and preferred by patients,” she added. “We hope this research can further advance discussions in more restrictive states, ultimately leading to much needed, patient-centric updates to outdated regulations. Existing data on the safety and effectiveness of telemedicine abortion paints a very clear picture that this is the future of abortion care.”

The company is currently seeing 250% quarterly growth in the number of patients using the service. As it has grown, it is focusing more on additional tools for coordinated care and new products.

Abortions are often kept secret due to worries of judgment and discrimination, and Hey Jane will provide a much-needed outlet for patients to discreetly share their experiences and emotion, Freedman said.

“We are focusing on convenience and privacy,” she added. “Two-thirds of women don’t want to talk about their experience, so we want to provide a space for them.”

Matters of women’s health are highly personal. If you or someone you know is struggling with a private women’s health concern, please contact your primary care physician or secular community health clinic for more information.

With investors like Lightspeed and The Chainsmokers, Mexican neobroker Flink raises $57M to boost financial inclusion in LatAm

By Mary Ann Azevedo

Flink, a Mexico City-based neobroker, has raised $57 million in a Series B round of funding led by Lightspeed Venture Partners.

The financing comes just over six months after Flink raised $12 million in a Series A round led by Accel. Existing backers Accel, ALLVP, Clocktower and new investor Mantis Venture Capital (founded by The Chainsmokers) also put money in the Series B. Since its 2017 inception, the startup has raised nearly $70 million.

Neobrokers are defined as startups that are disrupting the investment industry by providing a platform for a wider range of consumers to partake in the stock market by offering them more incremental investment options and modern and easy mobile-based interfaces to manage their money. There is a growing number of them globally, including Scalable Capital, Bitpanda and Trade Republic in Europe.

For Mexico City-born Sergio Jiménez Amozurrutia, the fact that in his country of more than 120 million people, only a tiny fraction of the population has the ability to invest in the capital markets felt unfair. To him, the lack of widespread participation in investing is an example of the rich getting richer as part of an infrastructure “that is built for the wealthy.” The result of the imbalance is that a lot of people have historically been locked out of making potentially wealth-building investments.  

So after selling Easy Credit, a consumer lending platform he’d built with Rick Rafael Bueno (whom he met in 2015 at a hackathon at Tech de Monterrey), Amozurrutia set out to give Mexicans access to something he believed they’d never had access to: an app-based consumer trading platform.

Flink launched its app in 2018 with a wallet service, a digital and physical global debit card backed by Mastercard and, last year, it began offering the ability to buy and sell fractional shares from 30 pesos, without commissions, for NYSE-listed stocks.

“Users can invest as little as US$1 and with zero commissions,” Amozurrutia said. “We want Flink to be the easiest way to invest, save and use your money.” 

Image Credits: Lightspeed’s Mercedes Bent and Flink founding team / Lightspeed

The demand for what the startup has to offer is clearly there. Since launching its first brokerage product in July of 2020, Flink has 1.6 million users, up from 1 million users at the time of its February raise. Over 85% of its users are first-time investors. GenZers seem to be the most interested in investing — 27% of the app’s clients are between 18 and 25 years old, while 22% are millennials, execs say.

“Most legacy Mexican banks cater to less than 1% of the population — meaning most Mexicans don’t have a bank account, let alone a brokerage account,” Amozurrutia said at the time of the company’s last raise. “At Flink, we’re guided by the belief that Mexico’s financial system should work for everyone — not only a select few.”

The company is growing its user base by 38% per month and revenue by 31% per month, according to  Amozurrutia, and touts a user acquisition cost of 62 cents. It is currently the largest retail brokerage service in Mexico, he said. Flink has 110 employees, up from 25 people a year ago today.

The startup plans to use its new capital to keep growing its team, toward product development and to expand its service to different countries in Latin America.

“The lack of access for retail investing is all over LATAM, and at Flink we want to change that,” Amozurrutia told TechCrunch. “We are focused on offering the opportunity to invest and grow their money to everyone in LATAM.”

Lightspeed Partner Mercedes Bent said her firm “fell in love” with Flink’s mission and impact on the country’s “financial ecosystem.” It was also impressed by the company’s unique features, including allowing Mexican investors to access the U.S. stock market and invest fractional shares.

“Many equities platforms only let you invest in equities in your own country,” she said. “Flink also has a big focus on education and creating an investment experience that makes it easy for their users to onboard.” For example, Bent noted, Flink has a podcast dubbed “Finanzas en órbita” that provides financial and stock market education in México.

In a blog post, Bent and Will Kohler wrote that they could feel the company’s passion and vision for creating more financial inclusion in Mexico, even via a Zoom call.

“The excitement leapt through the video screen,” the pair wrote. “…Flink’s vision for the future goes beyond accessing stocks, and we wanted to be a part of it.”

Flink marks Lightspeed’s third investment in Mexico, alongside Stori and Frubana, and Bent and Kohler say there is “more to come.”

“We are big believers in México, and bullish on LATAM,” they wrote.

Bright raises $15M for its live video platform that lets you learn from top creators

By Sarah Perez

Bright, a live video platform that lets fans engage in live conversations with their favorite creators and celebs, has raised $15 million in new funding, the company announced today. The round was co-led by co-founder and talent manager Guy Oseary’s Sound Ventures, the fund he founded with Ashton Kutcher. RIT Capital and Regah Ventures also co-led.

Other investors in the new round include Marc Benioff’s TIME Ventures, Globo Ventures, Norwest Venture Partners, Shawn Mendes & Manager Andrew Gertler’s AG Ventures, as well as Jeff Lawson, CEO and co-founder of Twilio.

In addition, a number of artists, performers, actors and other celebrities also invested, Bright says, including Rachel Zoe, Drew and Jonathan Scott, Judd Apatow, Ashton Kutcher, Amy Schumer, Bethenny Frankel and Ryan Tedder. Meanwhile, Jessica Alba, Kane Brown and Maria Sharapova are joining the company as advisors.

Bright, which first debuted in May, was co-founded by Madonna and U2 talent manager Guy Oseary along with early YouTube product manager Michael Powers, who had previously launched the YouTube Channels feature while at Google. The startup’s premise is to tap into the growing creator economy in a way that allows creators to better monetize their success outside of ad-supported networks, like YouTube, so they can grow their own business.

The platform itself is built on top of Zoom — a choice that not only saves Bright from starting from scratch for its real-time video technology, but also one that leverages the broad adoption Zoom has since seen due to the pandemic.

At launch, Bright announced a lineup that included over 200 prominent creators who were set to host ticketed online events where they share their stories or expertise, engage in interviews, offer advice and more. Today, Bright says now over 320 notable names have joined the service to engage with fans and continue to build their brand. The list includes Madonna, Naomi Campbell, D-Nice, the D’Amelio Sisters, Laura Dern, Deepak Chopra, Lindsey Vonn, Diego Boneta, Jason Bolden, Yris Palmer, Cat & Nat, Ronnie2K and Chef Ludo Lefebvre. Even more are on board to host future sessions, with Bright now on track to double the number of creators on board by year-end.

Unlike social media creator tools, Bright is focused on knowledge-sharing rather than just gaining likes or follows. For example, one the first sessions featured actor Laura Dern speaking about personal growth, while another featured streamer and online creator Ronnie2K hosting a series about building a career in gaming. In other words, Bright doesn’t only showcase Hollywood entertainment or top artists — it’s open to anyone whose fan base would be willing to pay to hear them talk.

Today, there are sessions across a variety of interests and topics, organized into areas like craft, home, money, culture, body and mind.

Image Credits: Bright session example

Bright itself generates revenue by taking a 20% commission on creator revenue, which is somewhat lower than the traditional marketplace split of 30/70 (platform/creator) but higher than some of the newer platforms available today, like Clubhouse and its commission-free direct payments.

The startup says the funding is being used to help roll out Creator Studio, a new suite of creator tools for managing learning sessions, audience communication and revenue performance. These sorts of analytics and tools are aimed at serving creators who are working to build a business through live sessions, in addition to growing their fan base.

Initially, creators in September will gain access to a sessions list tool for managing announcements of upcoming sessions, and placing sessions for sale with tickets and pricing. Later in the year, it will be expanded to include analytics, connections for messaging participants directly, and a wallet feature for tracking revenue, Bright says.

The funds will also help Bright to add new interactive features, like instant polls and the ability to share learning materials with attendees, as well as to onboard the influx of new talent.

These features could potentially help Bright stand out from a growing number of competitors looking to serve online creators, which today includes major tech companies like YouTube, Facebook, TikTok and Twitter. However, Oseary’s ability to leverage his personal network to pull in big names is, for now, the more notable differentiator.

“As a believer in lifelong learning, I’m proud to be investing in a platform like Bright, offering audiences the unique opportunity to learn directly from the artists and experts they admire the most,” said new investor, director and producer, Judd Apatow, in a statement. “Through Bright, I can directly connect and share my knowledge with fellow writers, aspiring directors and lovers of comedy,” he added.

Bright declined to share details as to its revenue, but did tell TechCrunch that its seeing ticket prices range from $25 to $150 per 1 to 2 hour sessions.

“It’s inspiring to have the support of incredible investors as well as these notable artists and entrepreneurs. All our partners share Bright’s vision that people want to level up their lives by learning directly from those they admire,” Bright CEO Michael Powers said, in an announcement. “Through Bright, talent can better engage authentically with audiences by sharing their own knowledge and bringing their many interests and passions to the foreground. We are excited to roll out our new features to continue elevating our platform and mission” he said.

D2C specs purveyor Warby Parker files to go public

By Alex Wilhelm

Did you miss IPOs? I sure did. They could be coming back after a summer lull.

Warby Parker, a D2C glasses company backed by over a half-billion dollars of private capital, filed to go public yesterday. For investors like General Catalyst, Tiger Global and Durable Capital Partners, it’s an important debut. Having taken on equity capital since at least 2011, investors have been waiting a long time for Warby to float.


The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


And there’s quite a lot to like about the company, the first parse of its IPO filing reveals. There are some less attractive elements to its business worth discussing, and we need to examine how COVID-19 impacted the company’s 2020 performance.

Warby last raised known private capital in August 2020, a $120 million Series G that valued the company at just over $3 billion on a post-money basis. D1 Capital Partners led that transaction, which included both Durable Capital and Baillie Gifford.

For D2C startups, the Warby IPO is something of a do-over. The Casper IPO from early 2020 is now a cautionary tale for companies employing the business model; the company reduced its IPO range, priced at $12 per share and today trades for just over $5.

But there’s more to Warby Parker’s IPO than just the D2C category. It’s a public benefit corporation, which it says in its filing means that it is “focused on positively impacting all stakeholders” as opposed to merely shareholders. And the company has a charitable bent to its efforts through a foundation and donation model of giving away eyewear when customers purchase their own set. Warby also has a hybrid sales model, leaning on both IRL and digital retail channels. There’s lots to dig into.

So let’s parse Warby’s growth history, its profitability progress over time and how the company is blending IRL shopping with digital channels. We’ll close by examining just how the company was priced last year, taking a guess at what it might be worth in today’s public markets.

Inside Warby Parker’s historical growth

Looking at Warby’s full-year results for 2020 is not inspiring. The company grew well from 2018 to 2019, expanding from $272.9 million in revenue to $370.5 million in revenue, or around 36%. That’s not an astounding pace of growth, but it’s more than respectable for a company of Warby’s age and size.

Then in 2020 the company only managed to eke out 6% growth to $393.7 million in top line. What happened to slow the company’s growth rate from Just Fine to Not Fine At All? COVID, it appears.

Ai Palette raises $4.4M to help companies react faster to consumer trends

By Catherine Shu

Developing new packaged foods and consumer goods can take a couple years as companies research, prototype and test products. In a society that runs on social media, however, people expect to see trends land on store shelves much more quickly. Founded in 2018, Ai Palette uses machine learning to help companies spot trends in real time and get them retail-ready, often within a few months. The startup, whose clients include Danone, Kellogg’s, Cargill and Dole, announced today it has raised an oversubscribed $4.4 million Series A co-led by pi Ventures and Exfinity Venture Partners. Both will join Ai Palette’s board.

The round also included participation from returning backers food tech venture firm AgFunder and Decacorn Capital, and new investor Anthill Ventures. It brings Ai Palette’s total raised to $5.5 million, including a seed round announced in 2019.

Ai Palette is based in Singapore, with an engineering hub in Bangalore. Its customer base started in Southeast Asia, before expanding into China, Japan, the United States and Europe.

Its customer base started in Southeast Asia and India, and expanded to China, Japan, the United States and Europe. Ai Palette supports 15 languages, which the company claims is the most of any AI-based tool for predicting consumer packaged goods (CPG) trends. Its funding will be used to expand into more markets and fill engineering and data science roles.

Ai Palette was founded in 2018 by chief executive officer Somsubhra GanChoudhuri and chief technology officer Himanshu Upreti, who met through Entrepreneur First, the “talent investor” that recruits and teams up potential founders.

Before Ai Palette, GanChoudhuri worked in sales and marketing at Givaudan, the world’s largest manufacturer of fragrances and flavors. This allowed him to see how product innovation is done for many types of consumer products, ranging from snacks and fast food to packaged goods. Many of the companies he worked with were beginning to realize that a two-year product innovation cycle could no longer meet demand. Upreti, an advanced machine learning and big data analysis expert, previously worked at companies including Visa, where he built models that can handle petabytes of data.

Ai Palette’s first product is Foresight Engine, which tracks trends like ingredients or flavors, analyzes why they are popular and predicts how long demand will last. It also identifies “white space opportunities,” or situations where there is unmet demand. For example, GanChoudhuri said the COVID-19 pandemic has changed the way people eat — they are now eating health snacks up to six times a day in front of screens — so companies have the chance to release new kinds of products.

Foresight Engine gives contextual information, said Upreti. “For example, is a food item eaten on the go, or at a café. Is a product consumed socially or individually? What’s trending at kids’ birthday parties? For a specific product or ingredient, images provide information on product pairings and product format.”

The platform uses data from sources like social media, search, blogs, recipes, menus and company data. “Data sets popular to each market are prioritized, like a local recipe or a food delivery app,” said GanChoudhuri. “And they are tracked over the years to determine growth trajectory with a strong degree of confidence.”

Some specific examples of how Ai Palette’s tech has translated into new products include brands that want to launch a new flavor, like for a potato chip or soda, in a specific country. They can use the Foresight Engine to not only see what trends are rising, but which ones have the potential to become long-term favorites, so they don’t invest in a product that will almost instantly lose its popularity.

Many of Ai Palette’s clients have used it to react to new trends and consumer behavior patterns during the COVID-19 pandemic. Not surprisingly, people in many markets are interested in healthy food or ones that are supposed to boost immunity. For example, in Southeast Asia there is more demand for lemon and garlic, while acerola and yerba mate are trending in the United States.

On the other hand, “in China, taste is paramount, even over health, because people are looking for food that brings back a sense of normalcy,” said GanChoudhuri. Meanwhile in India, there is demand for products with longer shelf life as people continue to cope with the pandemic, but many consumers are also seeking interesting snacks to ease the boredom of lockdown, with kimchi and other Korean flavors becoming especially popular.

Ai Palette’s ability to work with many languages is one of the ways it differentiates from other machine learning-based trend-prediction platforms. It currently supports English, simplified Mandarin, Japanese, Korean, Thai, Vietnamese, Bahasa Indonesian, Bahasa Melayu, Tagalog, Spanish, French and German, with plans to add more as it targets new European countries, Mexico, Latin America and the Middle East.

 

Shelf.io closes huge $52.5M Series B after posting 4x ARR growth in the last year

By Alex Wilhelm

Covering public companies can be a bit of a drag. They grow some modest amount each year, and their constituent analysts pester them with questions about gross margin expansion and sales rep efficiency. It can be a little dull. Then there are startups, which grow much more quickly — and are more fun to talk about.

That’s the case with Shelf.io. The company announced an impressive set of metrics this morning, including that from July 2020 to July 2021, it grew its annual recurring revenue (ARR) 4x. Shelf also disclosed that it secured a $52.5 million Series B led by Tiger Global and Insight Partners.

That’s quick growth for a post-Series A startup. Crunchbase reckons that the company raised $8.2 million before its Series B, while PitchBook pegs the number at $6.5 million. Regardless, the company was efficiently expanding from a limited capital base before its latest fundraising event.

What does the company’s software do? Shelf plugs into a company’s information systems, learns from the data, and then helps employees respond to queries without forcing them to execute searches or otherwise hunt for information.

The company is starting with customer service as its target vertical. According to Shelf CEO Sedarius Perrotta, Shelf can absorb information from, say, Salesforce, SharePoint, legacy knowledge management platforms, and Zendesk. Then, after training models and staff, the company’s software can begin to provide support staff with answers to customer questions as they talk to customers in real time.

The company’s tech can also power responses to customer queries not aimed at a human agent and provide a searchable database of company knowledge to help workers more quickly solve customer issues.

Per Perrotta, Shelf is targeting the sales market next, with others to follow. How might Shelf fit into sales? According to the company, its software may be able to offer staff already-written proposals for similar-seeming deals and other related content. The gist is that at companies that have lots of workers doing similar tasks — clicking around in Salesforce, or answering support queries, say — Shelf can learn from the activity and get smarter in helping employees with their tasks. I presume that the software’s learning ability will improve over time, as well.

Shelf, around 100 people today, hopes to double in size by the end of the year, and then double again next year.

That’s where the new capital comes in. Hiring folks in the worlds of machine learning and data science is very expensive. And because the company wants to scale those hires quickly, it will need a large bank balance to lean on.

Quick ARR growth was not the only reason why Shelf was able to secure such an outsized Series B, at least when compared to how much capital it had raised before. Per Perrotta, Shelf has 130% net dollar retention and no churn to report, meaning its customers are both sticky and expand organically.

While Shelf is interesting today and has certainly found niches it can sell into in its current form, I am more curious about how far the company can take its machine learning system, called MerlinAI. If its tech can get sufficiently smart, its ability to prompt and help employees could reduce onboarding time and the overall cost of employee training. That would be a huge market.

This is the sort of deal that we expect to see Tiger in — an outsized investment compared to prior rounds into a high-growth company that has lots of market room. Whatever price Tiger just paid for the company’s stock, a few years of continued growth should de-risk the investment. By our read, Tiger is really just the market-leading bull on software market growth in the long term. Shelf fits into that thesis neatly.

Insight Partners leads $30M round into Metabase, developing enterprise business intelligence tools

By Christine Hall

Open-source business intelligence company Metabase announced Thursday a $30 million Series B round led by Insight Partners.

Existing investors Expa and NEA joined in on the round, which gives the San Francisco-based company a total of $42.5 million in funding since it was founded in 2015. Metabase previously raised $8 million in Series A funding back in 2019, led by NEA.

Metabase was developed within venture studio Expa and spun out as an easy way for people to interact with data sets, co-founder and CEO Sameer Al-Sakran told TechCrunch.

“When someone wants access to data, they may not know what to measure or how to use it, all they know is they have the data,” Al-Sakran said. “We provide a self-service access layer where they can ask a question, Metabase scans the data and they can use the results to build models, create a dashboard and even slice the data in ways they choose without having an analyst build out the database.”

He notes that not much has changed in the business intelligence realm since Tableau came out more than 15 years ago, and that computers can do more for the end user, particularly to understand what the user is going to do. Increasingly, open source is the way software and information wants to be consumed, especially for the person that just wants to pull the data themselves, he added.

George Mathew, managing director of Insight Partners, believes we are seeing the third generation of business intelligence tools emerging following centralized enterprise architectures like SAP, then self-service tools like Tableau and Looker and now companies like Metabase that can get users to discovery and insights quickly.

“The third generation is here and they are leading the charge to insights and value,” Mathew added. “In addition, the world has moved to the cloud, and BI tools need to move there, too. This generation of open source is a better and greater example of all three of those.”

To date, Metabase has been downloaded 98 million times and used by more than 30,000 companies across 200 countries. The company pursued another round of funding after building out a commercial offering, Metabase Enterprise, that is doing well, Al-Sakran said.

The new funding round enables the company to build out a sales team and continue with product development on both Metabase Enterprise and Metabase Cloud. Due to Metabase often being someone’s first business intelligence tool, he is also doubling down on resources to help educate customers on how to ask questions and learn from their data.

“Open source has changed from floppy disks to projects on the cloud, and we think end users have the right to see what they are running,” Al-Sakran said. “We are continuing to create new features and improve performance and overall experience in efforts to create the BI system of the future.

 

Fontinalis Partners, the early mobility-focused VC firm, rolls out a third fund

By Connie Loizos

Fontinalis Partners, a 12-year-old, Detroit-based venture firm that was among the earliest early-stage venture outfits to focus squarely on mobility, has collected $104 million in capital commitments for its third and newest fund.

Investors in the vehicle include Ford Motor Corp., whose executive chairman, Bill Ford, cofounded Fontinalis and continues to help manage the fund. It also collected commitments from roughly 30 other limited partners, ranging from corporate partners in the automotive and insurance industries to family offices.

The team’s interpretation of mobility as pertaining to any startup that “enables efficient movement” has resulted in a wide range of bets. Fontinalis had nabbed a stake in Postmates, for example, which was acquired last year in an all-stock deal by Uber. It wrote a check to Lyft,  and helped fund the self-driving startup nuTonomy, which sold to auto supplier Delphi Automotive in 2017 for $450 million.

It has also more recently funded Gatik, a startup developing an autonomous vehicle stack for B2B short-haul logistics; Robust.AI, a startup at work on an industrial-grade cognitive platform for robots; Helm.ai, a maker of driverless car AI; and FreightWaves, a data and content startup that aims to provide participants in the freight wave industry with near-time analytics.

Altogether, the firm has invested in roughly 55 companies, and it says that 20 of them have already seen exits, including the family tracking app Life360, which went public on the Australian Securities Exchange in 2019, and lidar sensor manufacturer Ouster, which became publicly traded in March in the U.S. by merging with a blank-check company.

As for the size of its newest fund — which is roughly the same size as the firm’s $100 million second fund — there’s a reason Fontinalis hasn’t raised a much larger vehicle (no pun intended) unlike other investors who’ve been routinely doubling their fund sizes every couple of years.

As Fontinalis cofounder Chris Cheever and longtime partner Chris Stallman tell it, Fontinalis could be investing more dollars (and making more money in management fees). Instead, their team sees their job as finding the best deals within their mandate, then, after funding those companies, opening up more opportunities for the firm’s limited partners to directly co-invest alongside the firm.

“We have a number of LPs in this fund that have a pretty considerable appetite for co-investment opportunities,” says Stallman,”so there’s a lot of flexibility for us to scale up through them.” Adds Cheever of the network Fontinalis brings to deals, “Many of these parties could be key customers that startups are looking to access, but also simply be their partners.”

Fontinalis now has $270 million in assets under management. Cheever and Stallman say it has already made five investments in Series A-stage or later companies out of its newest fund; it has also written separate checks to six seed-stage companies.

Among its newest bets is an additive manufacturing company that has not publicly disclosed the round yet. It also recently wrote a follow-on check into Highland Electric, a company that’s focused on helping school systems adopt electric buses by helping them upgrade their infrastructure, manage their charging, train their drivers and by providing them with financing options for the buses.

My big jump: Sukhinder Singh Cassidy’s CEO journey

By Annie Siebert
Sukhinder Singh Cassidy Contributor
Sukhinder Singh Cassidy founded theBoardlist, a premium talent marketplace that helps diverse leaders get discovered for board and executive opportunities. A technology executive and entrepreneur, board member and investor, she has 25 years of experience founding and helping to scale companies, including Google, Amazon and Yodlee.
More posts by this contributor

After listening to others pitch me a few different job opportunities while still at Google in 2008, it became clear to me that I would make a better decision if I could fully explore the larger landscape of new companies emerging in Silicon Valley.

I had spent the last several years focusing on Google’s business outside the U.S., and I honestly felt out of touch with the startup world. Beyond my goal of becoming a CEO of my own company, I had two other ambitions: I wanted to help build a great consumer service that would delight people (potentially in e-commerce) and I wanted to build further wealth for myself and my family.

To better evaluate my options, I made the decision to quit Google first and find a way to study the wider ecosystem of companies before choosing where to go. Resolved to give myself a “blank slate” before making a final choice, I left Google when I was three months pregnant and joined Accel Partners, a top Silicon Valley venture capital firm and an investor in my previous startup, in a temporary role as CEO-in-residence.

In the months that followed, I helped Accel evaluate investment opportunities across a wide variety of digital sectors, with a particular focus on e-commerce, taking the opportunity to study those companies I might join or think of starting from scratch.


On Thursday, August 19 at 2 p.m. PDT/5 p.m. EDT/9 p.m. UTC

Managing Editor Danny Crichton will interview Sukhinder Singh Cassidy, author of “Choose Possibility,” on Twitter Spaces.


One of Accel’s key partners, Theresia Gouw, helped me brainstorm, joining my cadre of professional priests. We had known one another for over a decade (I originally met her as a young founder at Yodlee) and were at similar stages of our careers, so I knew she could identify personally with my career quandaries. Like me, Theresia was pregnant with her next child and at a similar life stage — yet another commonality.

Cropped photo a photo of author Sukhinder Singh Cassidy

Image Credits: Sukhinder Singh Cassidy

While at Accel, I spent a disproportionate amount of time testing my macro thesis that online shopping was about to explode in new ways. I had seen the rise of e-tailers at Google (many of these companies, such as eBay and Amazon, were Google’s largest advertisers at the time), but many of the leading e-commerce sites like Amazon and Zappos still had a utilitarian feel to them.

Meanwhile, new fashion and décor e-commerce sites such as Rent the Runway, Gilt, Houzz, Wayfair and One Kings Lane were popping up everywhere and growing rapidly. These sites sought to tap into a more aspirational and entertainment-oriented kind of shopping experience and move it online.

Expert investors like Accel and others were funding them, and my own observations suggested that this area would yield another big wave of online consumer growth. These lifestyle categories of shopping also appealed to me personally; I was the target customer for many of them.

I started to work on an idea for a new e-commerce service, a luxury version of eBay, while listening to the pitches of every e-commerce company that was looking for funding and talking to several that needed early-stage CEOs. I continued to listen to non-e-commerce pitches as well, simply to give myself a point of reference for evaluating online shopping opportunities.

At Yodlee and Google, I had been lucky enough to work with incredibly smart and talented people who shared my values, and I wanted to do the same at my next venture.

I wanted to work with great investors, too, and fortunately I had the ability either to work with Accel-funded companies, start my own or leverage other investor relationships I’d developed. I spent time with multiple company founders to try to discern who they were as leaders, in addition to what they were working on.

By this point in my career, I had a pretty clear idea of my own superpowers and values, so I looked to find companies that could make the most of my unique gifts and whose founders or senior leaders had strengths complementary to mine.

Specifically, I hoped to join a company with a very strong engineering and product management culture that needed a CEO with strategy, vision, business development, fundraising and team-building expertise. Applying these criteria, I turned down several opportunities at companies whose founders had skill sets too similar to mine, reasoning that this overlap might lead to conflict if I ever became CEO.

Finally, I used my time at Accel to think long and hard about the risks I would take in becoming a startup CEO and whether I could afford to fail. My biggest risk by far was ego- and reputation-related. Mindful of how precarious early-stage startups are, I feared that I would leave a successful role as a global executive only to suffer a very large and visible failure. But the more I thought about this, I faced this ego risk head-on and concluded that my reputation as an executive from Google would hopefully be strong enough to survive one failure if it came to that.

The personal risks of taking on a startup CEO role felt different but not greater than those associated with my job at Google. While I knew that serving as a first-time CEO while having another newborn at home (my son Kieran) would be immensely stressful, I would likely benefit from no longer traveling around the world for days and weeks on end and working across multiple time zones, as I had previously.

Last, I evaluated the financial risks of potential moves. Although my startup equity would have uncertain value for a long time, I judged this a risk worth taking, given how excited I’d feel to have more impact and responsibility as CEO. While I lost a large financial package in choosing to leave Google and switching to a startup salary, I could pay the bills at home while digging into my savings only slightly. Under these conditions, I was prepared to make the leap.

In early 2010, almost a year after I left Google, I finally found the right opportunity and decided to join fashion technology startup Polyvore as its full-time CEO. A precursor to Pinterest, Polyvore was based on the idea that women could “clip” online images to create fashion and décor idea boards digitally that were instantly “shoppable.”

Millions of young women (including influencers) were already using the service and loved it. The founding team was led by a rock star engineer, Pasha Sadri, along with three other product and technology folks he recruited from the likes of Yahoo and Google.

Pasha was known for his intelligence, and we had connected informally over the years for coffee, each time having great discussions about business strategy. In fact, Polyvore twice before had tried to recruit me to become its CEO, once when I was at Google and again when I departed that company in 2008. Back then, I’d spent a productive afternoon with the founding team, helping them think through their business model. I also knew Peter Fenton, one of Silicon Valley’s most successful investors and a leading funder of the company. Peter was the one who first introduced me to Polyvore and who continued afterward to passively court me.

Having spent so much time exploring my options from multiple angles, I was now poised to make a great decision. I felt convinced that e-commerce was starting its next wave of growth, and felt excited to be part of it.

Within that vision, Polyvore was among the companies best positioned to succeed, and I knew I could contribute in significant ways to building a service that would delight millions. I was impressed with the strengths of Polyvore’s founder and investors and anticipated that I would be able to complement their efforts nicely. Recognizing that my success as a startup CEO hinged on my relationships with the founder and board, I had also invested time to get to know them.

Meanwhile, I had faced my fear demons, taking financial risk but negotiating my offer aggressively to account for downside scenarios I imagined, and coming to grips with my ego risk. With all this work in place, I finally jumped.

After managing a multibillion-dollar profit and loss and leading a 2,000-person team at Google, I became the newly minted CEO of a 10-person fashion startup in February 2010.

As we tee up the bigger choices in our careers, we all face critical moments of decision. No choice we make will be perfect, and all the frameworks in the world won’t eliminate risk entirely. But we don’t need perfection or freedom from risk. We just need to take the next step.

By choosing thoughtfully, using all the tools at our disposal to maximize our upside and anticipate our downside, we can grasp the opportunities available to us while equipping ourselves to handle whatever challenges reality throws our way.

Excerpted from “Choose Possibility: Take Risks and Thrive (Even When You Fail)’ by Sukhinder Singh Cassidy. Copyright © 2021 by Sukhinder Singh Cassidy. Published and reprinted by permission of Mariner Books/Houghton Mifflin Harcourt. All rights reserved.

❌