Welcome to a special Thanksgiving edition of The Exchange. Today we will be brief. But not silent, as there is much to talk about.
Up top, The Exchange noodled on the Slack-Salesforce deal here, so please catch up if you missed that while eating pie for breakfast yesterday. And, sadly, I have no idea why Palantir is seeing its value skyrocket. Normally we’d discuss it, asking ourselves what its gains could mean for the lower tiers of private SaaS companies. But as its public market movement appears to be an artificial bump in value, we’ll just wait.
Here’s what I want to talk about this fine Saturday: Bloomberg reporting that Stripe is in the market for more money, at a price that could value the company at “more than $70 billion or significantly higher, at as much as $100 billion.”
Hot damn. Stripe would become the first or second most valuable startup in the world at those prices, depending on how you count. Startup is a weird word to use for a company worth that much, but as Stripe is still clinging to the private markets like some sort of liferaft, keeps raising external funds, and is presumably more focused on growth than profitability, it retains the hallmark qualities of a tech startup, so, sure, we can call it one.
Which is odd, because Stripe is a huge concern that could be worth twelve-figures, provided that gets that $100 billion price tag. It’s hard to come up with a good reason for why it’s still private, other than the fact that it can get away with it.
Anyhoo, are those reported, possible prices bonkers? Maybe. But there is some logic to them. Recall that Square and PayPal earnings pointed to strong payments volume in recent quarters, which bodes well for Stripe’s own recent growth. Also note that 14 months ago or so, Stripe was already processing “hundreds of billions of dollars of transactions a year.”
You can do fun math at this juncture. Let’s say Stripe’s processing volume was $200 billion last September, and $400 billion today, thinking of the number as an annualized metric. Stripe charges 2.9% plus $0.30 for a transaction, so let’s call it 3% for the sake of simplicity and being conservative. That math shakes out to a run rate of $12 billion.
Now, the company’s actual numbers could be closer to $100 billion, $150 billion and $4.5 billion, right? And Stripe won’t have the same gross margins as Slack .
But you can start to see why Stripe’s new rumored prices aren’t 100% wild. You can make the multiples work if you are a believer in the company’s growth story. And helping the argument are its public comps. Square’s stock has more than tripled this year. PayPal’s value has more than doubled. Adyen’s shares have almost doubled. That’s the sort of public market pull that can really help a super-late-stage startup looking to raise new capital and secure an aggressive price.
To wrap, Stripe’s possible new valuation could make some sense. The fact that it is still a private company does not.
Hugs and let’s both go do some cardio,
Let’s get something morbid out of the way right up front: estate planning is a growth business in 2020. Whether you need to create or update a will, build a family trust, or sign over power of attorney for end-of-life decision-making, it’s been a heck of a year for many families, and even more people are starting to think about these instruments if anything worse happens this year (and there are still six weeks left!)
In the United States, the vast majority of this paperwork is conducted in-person and on paper, but COVID-19 has made that challenging. Digitally native startups are coming to the forefront in this market, just as the market is getting white hot.
One of the leaders of this pack is Trust & Will, which we first profiled back in early 2019. Two years ago, the startup had just signed the first electronic will in the United States and had raised a $2 million or so seed round led by Rise of the Rest.
Now, the startup is returning to the capital trough, picking up a $15 million Series B led by Jackson Square Ventures and a bunch of other firms listed below. That brings the company’s total funding to date according to founder and CEO Cody Barbo to more than $23 million.
The company disclosed that it has had 160,000 users sign up for the company’s services since its launch in mid-2018. Trust & Will today has three products: a trust-based estate plan, a will-based estate plan, and “Guardian,” which is a sort of simpler setup for parents with kids. Customers pay an upfront setup fee based on which product they choose, and then they pay a smaller recurring annual subscription fee.
The company, which originally only worked in Nevada due to the state laws around digital wills, now has attorneys who can assist clients in multiple states. The company has also since conducted the first electronic will in Florida’s history, which, let’s just say, is an important center in the estate-planning industry.
A couple of other new changes. First, the startup has built up a number of banking and financial planning relationships with institutions such as Fifth Third Bank (which also joined the Series B round as a strategic investor), AARP, and fintech savings startup Acorns.
Second, the company hired former General Assembly CFO John Zdanowski to take on the startups chief financial officer role. The team has grown to 24, and Barbo noted by email that all three co-founders have become dads since the company’s seed round — putting a bit of a poignant note on their mission to make estate planning accessible to everyone.
Trust & Will’s three co-founders with their very-well-estate-planned children. Photo via Trust & Will.
Clearly, the company has a great market tailwind going into 2021, and as more states put in place digital wills and estate planning laws, the market is only set to expand in the coming years. A handful of other startups such as Willful and the brilliantly-named FreeWill are also in this market.
Today, the company’s board consists of Victor Echevarria from Jackson Square Ventures, Rob Chaplinsky of Link Ventures (which led the company’s Series A), Jesse Draper of Halogen Ventures, Barbo, and Daniel Goldstein, who is co-founder and COO.
And now, for the long list of all the other investors who participated. In addition to Jackson Square Ventures, new investors for the Series B included Fifth Third Bank, Northwestern Mutual Future Ventures, AARP, Rosecliff Ventures, Hack VC, Actium Partners, Noah Kerner and Jeff Cruttenden. Returning investors included Link Ventures, Rise of the Rest, WTI, Techstars Ventures, Luma Launch, and Halogen Ventures.
Activity and fitness tracking platform Strava has raised $110 million in new funding, in a Series F round led by TCV and Sequoia, and including participation by Dragoneer group, Madrone Capital Partners, Jackson Square Ventures and Go4it Capital. The funding will be used to propel the development of new features, and expand the company’s reach to cover even more users.
Already in 2020, Strava has seen significant growth. The company claims that it has added more than 2 million new “athletes” (how Strava refers to its users) per month in 2020. The company positions its activity tracking as focused on the community and networking aspects of the app and service, with features like virtual competitions and community goal-setting as representative of that approach.
Strava has 70 million members, according to the company, with presence in 195 countries globally. The company debuted a new Strava Metro service earlier this year, leveraging the data it collects from its users in an aggregated and anonymized way to provide city planners and transportation managers with valuable data about how people get around their cities and communities — all free for these governments and public agencies to use, once they’re approved for access by Strava.
The company’s uptick in new user adds in 2020 is likely due at least in part to COVID-19, which saw a general increase in the number of people pursuing outdoor activities, including cycling and running, particularly at the beginning of the pandemic when more aggressive lockdown measures were being put in place. As we see a likely return of many of those more aggressive measures due to surges in positive cases globally, gym closures could provoke even more interest in outdoor activity — though winter’s effect on that appetite among users in colder climates will be interesting to watch.
Squarespace is adding a new monetization option for websites built on the platform: Member Areas, where businesses can charge for access to exclusive content.
Chief Product Officer Paul Gubbay said that particularly in the midst of the pandemic, businesses on Squarespace “want to experiment with different ways to make money.” They can already use the platform to sell products and services, and even to schedule appointments, but with Member Areas, “We allow you to sell your expertise, to sell your content.”
That could, of course, mean an online publication that wants to paywall some of its articles, but it could also mean a chef who wants to charge for access to cooking videos and recipes, or a fitness instructor hoping to make money from online classes.
Group Product Manager Kimberly Lin showed me how Member Areas are integrated into a Squarespace website, allowing the website owner to assign different access requirements to different pages — some could require a recurring membership fee, while others require a one-time payment and still others can be free with registration.
Squarespace also supports different membership tiers, as well as publishing member-only podcasts and newsletters. Site creators get access to CRM data on each of their members, with plans for more segmentation tools in the future.
Squarespace is making this available as an add-on to the core website building platform, with pricing starting at $9 per month. Gubbay emphasized the “simplicity” of adding these features to an existing Squarespace website, making it easy to put “anything you want” behind a paywall.
Lin also said that by integrating with the website builder, Squarespace can offer page protection that’s “truly secure,” because visitors can’t circumvent it by simply tracking down a paywalled URL.
As an early success story, Gubbay mentioned a jewelry merchant on Squarespace that started scheduling sessions where she gives design advice, then created Member Areas with videos and other jewelry-related content.
“First and foremost, we want to make sure we have product-market fit,” Gubbay added. “But I think what we’re going to be interested in doing as we move forward is helping people understand that, guiding them to the parts of the platform where they become a multi-modal seller.”
Earnings season is racing past us, with the big ride-hailing companies’ numbers in, all of the Big Five having wrapped their reporting and lots of SaaS numbers in the market. But amidst all the noise, The Exchange has kept an eye on two companies in particular: PayPal and Square.
We’re not really not concerned with their overall revenue and profit metrics. Instead, we’ve been hunting around in their numbers for hints and notes about what is going on inside of fintech itself. Why? There are a host of hugely-valuable fintech unicorns that have to go public in the future that also share some market space with one or both of our public charges.
Lots, it turns out.
As TechCrunch reported when PayPal dropped its Q3 numbers, the public company had bullish results from its Venmo service, payment processing, and consumer activity metrics. The numbers pointed to strong consumer adoption of fintech services during the pandemic, something that we presumed was not unique to PayPal itself, but was likely indicative of a generally warm environment for consumer fintech services.
Square continued the trend, posting a set of results that contains nearly all positive data for consumer fintech activity — with one critical caveat for Q4 that we’ll get to at the end.
Still, what the majors tell us about the fintech space indicates a warmth in activity that explains why Chime, Robinhood and others have had such fun in 2020, accreting tectonic capital to keep their growth hot.
Digging through Square’s earnings gives us a window into consumer payment activity, card usage, stock purchases and more. Let’s see what we can learn, and to which unicorns it might apply.
Let’s start by talking about the broader fintech market before niching down.
Gowalla is coming back.
The startup, which longtime TechCrunch readers will likely recall, was an ambitious consumer social app that excited Silicon Valley investors but ultimately floundered in its quest to take on Foursquare before an eventual $3 million acquihire in 2011 brought the company’s talent to Facebook.
The story certainly seemed destined to end there, but founder Josh Williams tells TechCrunch that he has decided to revive the Gowalla name and build on its ultimate vision by leaning on augmented reality tech.
“I really don’t think [Gowalla’s vision] has been fully realized at all, which is why I still want to scratch this itch,” Williams tells TechCrunch. “It was frankly really difficult to see it shut down.”
After a stint at Facebook, another venture-backed startup and a few other gigs, Williams has reacquired the Gowalla name, and is resurrecting the company with the guidance of co-founder Patrick Piemonte, a former Apple interface designer who previously founded an AR startup called Mirage. The new company was incubated inside Form Capital, a small design-centric VC fund operated by Williams and Bobby Goodlatte .
Founders Patrick Piemonte (left) and Josh Williams (right). Image credit: Josh Williams.
Williams hopes that AR can bring the Gowalla brand new life.
Despite significant investment from Facebook, Apple and Google, augmented reality is still seen as a bit of a gamble with many proponents estimating mass adoption to be several years out. Apple’s ARKit developer platform has yielded few wins despite hefty investment and Pokémon Go — the space’s sole consumer smash hit — is growing old.
“The biggest AR experience out there is Pokémon Go, and it’s now over six years old,” Williams says. “It’s moved the space forward a lot but is still very early in terms of what we’re going to see.”
Williams was cryptic when it came to details for what exactly the new augmented reality platform would look like when it launches. He did specify that it will feel more like a gamified social app than a social game, though he also lists the Nintendo franchise Animal Crossing as one of the platform’s foundational inspirations.
A glimpse of the branding for the new Gowalla. Image credit: Josh Williams
“It’s not a game with bosses or missions or levels, but rather something that you can experience,” Williams says. “How do you blend augmented reality and location? How do you see the world through somebody else’s eyes?”
A location-based social platform will likely rely on users actually going places, and the pandemic has largely dictated the app’s launch timing. Today, Gowalla is launching a waitlist, Williams says the app itself will launch in beta “in a number of cities” sometime in the first-half of next year. The team is also trying something unique with a smaller paid beta group called the “Street Team,” which will give users paying a flat $49 fee early access to Gowalla as well as “VIP membership,” membership to a private Discord group and some branded swag. A dedicated Street Team app will also launch in December.
The web of collaboration apps invading remote work toolkits have led to plenty of messy workflows for teams that communicate in a language of desktop screenshots and DMs. Tracing a suggestion or flagging a bug in a company’s website forces engineers or designers to make sense of the mess themselves. While task management software has given teams a funnel for the clutter, the folks at Jam question why this functionality isn’t just built straight into the product.
Jam co-founders Dani Grant and Mohd Irtefa tell TechCrunch they’ve closed on $3.5 million in seed funding and are ready to launch a public beta of their collaboration platform which builds chat, comments and task management directly onto a website, allowing developers and designers to track issues and make suggestions quickly and simply
The seed round was led by Union Square Ventures, where co-founder Dani Grant previously worked as an analyst. Version One Ventures, BoxGroup and Village Global also participated alongside some noteworthy angels including GitHub CTO Jason Warner, Cloudflare CEO Matthew Prince, Gumroad CEO Sahil Lavingia, and former Robinhood VP Josh Elman.
Like most modern productivity suites, Jam is heavy on integrations so users aren’t forced to upend their toolkits just to add one more product into the mix. The platform supports Slack, Jira, GitHub, Asana, Loom and Figma, with a few more in the immediate pipeline. Data syncs from one platform to the other bidirectionally so information is always fresh, Grant says. It’s all built into a tidy sidebar.
Grant and Irtefa met as product managers at Cloudflare, where they started brainstorming better ways to communicate feedback in a way that felt like “leaving digital sticky notes all over a product,” Grant says. That thinking ultimately pushed the duo to leave their jobs this past May and start building Jam.
The startup, like so many conceived during this period, has a remote founding story. Grant and Irtefa have only spent four days together in-person since the company was started, they raised their seed round remotely and most of the employees have never met each other in-person.
The remote team hopes their software can help other remote teams declutter their workflows and focus on what they’re building.
“On a product team, the product is the first tab everyone opens and closes,” Grant says. “So we’re on top of your product instead of on some other platform”
Founded by longtime developers and Georgia Institute of Technology alumni, Ken Ahrens, Matthew LeRay and Nate Lee had known each other for roughly twenty years before making the jump to working together.
A circuitous path of interconnecting programming jobs in the devops and monitoring space led the three men to realize that there was an opportunity to address one of the main struggles new programmers now face — making sure that updates to api integrations in a containerized programming world don’t wind up breaking apps or services.
“We were helping to solve incident outages and incidents that would cause downtime,” said Lee. “It’s hard to ensure the quality between all of these connection points [between applications]. And these connection points are growing as people add apis and containers. We said, ‘How about we solve this space? How could we preempt all of this and ensure maintaining release velocity with scalable automation?'”
Typically companies release new updates to code in a phased approach or in a test environment to ensure that they’re not going to break anything. Speedscale proposes test automation using real traffic so that developers can accelerate the release time.
“They want to change very frequently,” said Ahrens, speaking about the development life cycle. “Most of the changes are great, but every once in a while they make a change and break part of the system. The state of the art is to wait for it to be broken and get someone to fix it quickly.”
The pitch SpeedScale makes to developers is that its service can give coders the ability to see the problems before the release. They automate the creation of the staging environment, automation suite and orchestration to create that environment.
“One of the big things for me was when I saw the rise of Kubernetes was what’s really happening is that engineering leaders have been able to give more autonomy to developers, but no one has come up with a great way to validate and I really think that Speedscale can solve that problem.”
The Atlanta-based company, which only just graduated from Y Combinator a few months ago, is currently in a closed alpha with select pilot partners, according to LeRay. And the nine month-old company has raised $2.2 million from investors including Sierra Ventures from the Bay Area and Atlanta’s own Tech Square Ventures to grow the business.
“Apis are a huge market,” Ahrens said of the potential opportunity for the company. “there’s 11 million developers who develop against apis… We think the addressable market for us is in the billions.”
Patrick Chopson and Sandeep Ahuja started cove.tool, an Atlanta-based company developing software to optimize building design for sustainability and cost, because of problems they’d faced in their careers as architects.
Along with Patrick’s brother, Daniel Chopson, the two Georgia Institute of Technology graduates have developed a suite of software products that are now used by thousands of architects, engineers, contractors and developers like EYP, P2S, Skanska, and JLL in 22 countries around the world. The company’s software is also taught in universities including California Polytechnic State University, the University of Illinois, and UNC Charlotte, along with their alma matter, Georgia Tech.
Now the company is $5.7 million richer following the close of its series A funding led by the Los Angeles-based investment firm Mucker Capital and including previous investors Urban.us, Knoll Ventures, and Atlanta’s own Techsquare Labs.
The company’s first product is software that helps model the energy consumption of a building and provides insights on how to improve energy efficiency. The product turns what used to be a manual process that involved outside consultants and roughly 150 hours of work into a job that can be done in 30 minutes, according to the cove.tool.
The software can account for factors such as energy consumption, light exposure, glare, radiation, water and embodied carbon targets for new and existing buildings and offers the ability to compare different options, allowing architects and developers to determine the most cost-efficient way to meet energy targets. In its most recent update, the company added an occupancy tool to help developers understand the safest designs for reducing the potential spread of airborne diseases like COVID-19.
Buildings and building construction are a huge contributor to the greenhouse gas emissions that contribute to climate change, accounting for roughly 39 percent of carbon emissions annually, according to data released by the Global Alliance for Building and Construction and the International Energy Agency. And the continuing global migration to cities means that demand for new buildings and construction won’t slow down anytime soon. As demand for buildings increases, technologies like cove.tool’s software could save the equivalent of 40,000 trees on a typical construction project, the company said.
Example of cove.tool software for optimizing building design. Image Credit: cove.tool
“We only have about 10 years to lower buildings to actually be net zero before the action would be useless in terms of stopping climate change,” said Ahuja, the company’s chief executive.
With the new funds in hand cove.tool intends to expand global sales and marketing efforts and develop some new projects, according to Ahuja. Both founders said that the software is already designed to meet the building standards for Canada, the United Kingdom and Australia. And the company has a plan to see if it can design energy efficient structures for a martian environment.
“For fun, we’re going to do Mars,” Ahuja said. “We want to see what the model looks like.”
The big selling point for the software is that environmental sustainability is baked into the product so even if developers only care about cost-cutting, they’ll be improving their carbon footprint anyway.
“Every developer that uses our platform may or may not care about sustainability, but they definitely save on cost,” said Ahuja.
Next on the product roadmap is a marketplace that can provide energy efficient materials that construction managers and developers would need to turn the cove.tool designs into actual buildings.
“Everybody is using a completely different bad workflow,” Chopson, the company’s co-founder and product development lead, said. “This brings it together in terms of cost and the offset carbon targets that every building and every city actually need to meet.”
The roadmap is to create easier workflows from the architect to the contractor so everyone involved can coordinate more closely. As it moves into this side of the construction market, cove.tool will find itself facing some very well-funded competitors, but that’s because the construction management and procurement side of the market is massive.
Companies like Procore have become billion dollar businesses on the back of. their pitch to simplify the construction management process.
The cove.tool marketplace product will be arriving sometime in the middle of 2021 and the company has already amassed a database of over 1,000 products from hundreds of vendors that it intends to list, according to Ahuja.
“There’s a lot of product databases, but no one can analyze it,” said Chopson. “We’re the only ones who can analyze that glass is better than any other glass.. It’s highly disorganized and you can’t compare one thing versus another.. The key is to be able to analyze things and put the analysis you do in the context of a building.”
Ultimately, the focus will still be on efficiency and sustainability, the founders said. And in a rapidly warming world, there are few things that are important.
As Omar Hamoui, a partner at Mucker Capital and the new director on the cove.tool board, said in a statement, “Sustainable design is rapidly becoming a necessity in the built world.”
A group of Black Atlanta businessmen, politicians and entertainers — including former Atlanta Mayor Andrew Young, the entertainer Michael Render (better known as Killer Mike) and Bounce TV founder Ryan Glover — have launched a new digital bank focused on developing and promoting local communities and cultivating Black and Latinx entrepreneurs and small businesses.
Named Greenwood in an homage to the thriving Tulsa, Oklahoma, business community known as “Black Wall Street” that was destroyed by white rioters in 1921, the digital bank has several features designed to promote social causes and organizations for the Black and Latinx community.
For every sign-up to the bank, Greenwood will donate the equivalent of five free meals to an organization addressing food insecurity. And every time a customer uses a Greenwood debit card, the bank will make a donation to either the United Negro College Fund, Goodr (an organization that addresses food insecurity) or the National Association for the Advancement of Colored People.
In addition, each month the bank will provide a $10,000 grant to a Black or Latinx small business owner that uses the company’s financial services.
For Render, the decision to launch a new digital bank alongside Young and Glover was a way to link Atlanta’s well-established, centuries-old Black business community with the technologies that are redefining wealth and creating new opportunities in the twenty-first century. It was also a way to equip a new generation with financial tools that could empower them instead of undermine them.
“What I have learned about capitalism is that you’re either going to be a participant in it or a victim of it,” said Render. “The ultimate protest is focusing your dollar like a weapon.”
Young, who is also the U.S. ambassador to the United Nations, had seen the ways digital banking technologies were transforming the social order in countries like India — reducing the power of payday lenders and providing greater economic access — and wanted to bring those opportunities to communities in the U.S.
Atlanta is a perfect home for a new Black-owned digital bank. After riots in 1906 destroyed Atlanta’s own bustling Black business district in a prelude to the Greenwood Massacre 15 years later, the community rebuilt with banks like Citizen’s Trust (founded in 1921) and Carver (founded in 1946) serving the city’s Black community.
Rendon, a serial entrepreneur who owns a chain of barber shops called the SWAG Shop, some real estate and a restaurant along with the rapper T.I., said that he’s not just a founder of Greenwood, he’ll soon become a customer.
“Today, a dollar circulates for 20 days in the white community but only six hours in the Black community,” said Render in a statement. “Moreover, a Black person is twice as likely as a white person to be denied a mortgage. This lack of fairness in the financial system is why we created Greenwood.”
Greenwood will offer a physical debit card and savings and checking accounts to its customers — along with all of the digital features one would expect, including integrations with Apple, Samsung and Google Pay, the ability to make peer-to-peer payments, mobile checking deposits and free ATM usage at over 30,000 locations.
“It’s no secret that traditional banks have failed the Black and Latinx community,” said Glover, in a statement. “We needed to create a new financial platform that understands our history and our needs going forward, a banking platform built by us and for us, a platform that helps us build a stronger future for our communities. This is our time to take back control of our lives and our financial future. That is why we launched Greenwood, modern banking for the culture.”
To run the bank, the founding team hired Aparicio Giddins, who’s serving as the company’s president and chief technology officer. David Tapscott, a former executive with Combs Enterprises and Green Dot, is serving as the company’s chief marketing officer. Andrew “Bo” Young III, the managing partner of Andrew Young Investment Group, and Paul Judge, the co-founder of Pindrop and TechSquare Labs, both have seats on the company’s board of directors.
The timing for Greenwood’s launch is somewhat auspicious, coming as it does nearly a century after the launch of Citizen’s Trust and days after the chief executive of Wells Fargo, Charles Scharf, said really, really dumb things about diversity in the financial services industry.
Backing the company is a $3 million commitment from undisclosed angel investors. The bank is currently taking deposits and the hope, according to Rendon, is for it to start a new wave of entrepreneurial activity among young Black and Latinx community members and their allies.
“The work that we did in the civil rights movement wasn’t just about being able to sit at the counter. It was also about being able to own the restaurant,” said Ambassador Young. “We have the skills, talent and energy to compete anywhere in the world, but to grow the economy, it has to be based on the spirit of the universe and not the greed of the universe. Killer Mike, Ryan and I are launching Greenwood to continue this work of empowering Black and brown people to have economic opportunity.”