The company, which made its debut on TechCrunch’s Battlefield stage back in 2010, has put a placeholder value of the offering at $100 million, but it will likely be worth billions when it finally trades on the market.
Cloudflare is one of a clutch of businesses whose job it is to make web sites run better, faster and with little to no downtime.
Recently the company has been at the center of political debates around some of the customers and company it keeps, including social media networks like 8Chan and racist media companies like the Daily Stormer.
Indeed, the company went so far as to cite 8Chan as a risk factor in its public offering documents.
As far as money goes, Cloudflare is — like other early-stage technology companies — losing money. But it’s not losing that much money, and its growth is impressive.
As the company notes in its filing with the Securities and Exchange Commission:
We have experienced significant growth, with our revenue increasing from $84.8 million in 2016 to $134.9 million in 2017 and to $192.7 million in 2018, increases of 59% and 43%, respectively. As we continue to invest in our business, we have incurred net losses of $17.3 million, $10.7 million, and $87.2 million for 2016, 2017, and 2018, respectively. For the six months ended June 30, 2018 and 2019, our revenue increased from $87.1 million to $129.2 million, an increase of 48%, and we incurred net losses of $32.5 million and $36.8 million, respectively.
Cloudflare sits at the intersection of government policy and private company operations and its potential risk factors include a discussion about what that could mean for its business.
The company isn’t the first network infrastructure service provider to hit the market. That distinction belongs to Fastly, whose shares likely have not performed as well as investors would have liked.
Cloudflare has raised roughly $332 million to date from investors, including Franklin Templeton Investments, Fidelity, Union Square Ventures, New Enterprise Associates, Pelion Venture Partners and Venrock. Business Insider reported that the company’s last investment gave Cloudflare a valuation of $3.2 billion.
The company will trade on the New York Stock Exchange under the ticker symbol “NET.” Underwriters on the company’s public offering include Goldman Sachs, Morgan Stanley, JP Morgan, Jefferies, Wells Fargo Securities and RBC Capital Markets.
Nurx, citing 200,000 current patients and a monthly growth rate as high as 20%, has raised $32 million in Series C equity funding in a round co-led by existing investors Kleiner Perkins and Union Square Ventures. The company has also secured $20 million in debt financing, bringing total new capital to $52 million.
The San Francisco-based digital health startup, which seeks to make birth control more accessible and affordable by shipping it direct to consumers, has raised more than $90 million in debt and equity funding to date, with the latest infusion bringing its valuation to nearly $300 million, according to stock authorization filings uncovered by PitchBook. Nurx declined to comment on its valuation.
The goal, Nurx chief executive officer Varsha Rao explains, is to become a telehealth platform focused on all sensitive health needs.
“We see there is a need to help people that may have issues that often carry stigma and judgment by providing a streamlined platform,” Rao tells TechCrunch. “What the company is doing in terms of providing more accessibility from a physical and economic perspective to critical health services is very inspiring for me.”
The fresh bout of funding comes four months after a scathing New York Times report highlighted irresponsible practices at the company, including reshipping returned medications and attempting to revise medical policy on birth control for women over the age of 35.
Nurx’s Rao, who joined from Clover Health just one week before the article was published, says she feels good about how the company has scaled: “I want to make it clear, patient safety was never at risk even then; having said that, we are super committed to always investing in compliance and patient safety and all of the things that are important.”
The business plans to use the funding to double its engineering team and launch additional “sensitive” healthcare services, of which Rao declined to further outline. In addition to shipping birth control D2C, including the pill, shot, ring and patch, Nurx provides emergency contraception, STI and HPV testing and screening kits, and PrEP medication, the once-daily pill that reduces the risk of getting HIV.
The company added STI testing kits to its line up last month and has since performed tests for 1,000 patients, Nurx says.
Nurx’s service is currently live in 26 states and Washington, D.C. The company plans to be accessible to 90% of the U.S. population by the end of the year, with additional launches, including the state of Nebraska, expected this month.
Square bought Caviar about five years ago in a deal worth about $90 million. Now, Caviar has found a new home with DoorDash, the on-demand delivery startup that had been under fire for months regarding how it pays its delivery workers. DoorDash finally did right by its workers just last week.
“Today’s announcement is another important step forward on our mission to empower local economies,” DoorDash CEO Tony Xu (pictured above) said in a statement. “We have long-admired Caviar, which has a coveted brand, an exceptional portfolio of premium restaurants and leading technology. The acquisition further enhances the breadth of our merchant selection, enabling us to offer customers even more choice when they order through DoorDash. We look forward to welcoming the Caviar team to DoorDash and expanding our partnership with Square in the future.”
With Caviar joining DoorDash, Square’s Caviar lead, Gokul Rajaram, along with all the other Caviar employees will join DoorDash once the acquisition closes. The deal is expected to close sometime this year.
“Caviar has built a trusted brand with customers and many of the best restaurants,” Rajaram said in a statement. “DoorDash has national scale, complementary restaurant selection, a tremendous logistics platform, and a team that shares our passion and commitment to better serve restaurants, couriers, and customers. I’m incredibly excited to be joining, with the rest of the Caviar team, to help build the future of local commerce.”
For Square, this deal provides the company with an opportunity to focus more on its products for businesses and individuals, Square CEO Jack Dorsey said.
“We are increasing our focus on and investment in our two large, growing ecosystems — one for businesses and one for individuals,” Dorsey said. “This transaction furthers that effort, and we believe partnering with DoorDash provides valuable and strategic opportunities for Square.”
Meanwhile, Square just reported its Q2 2019 earnings with net revenues of $1.17 billion (44% y/o/y growth), adjusted revenues of $563 million (46% y/o/y growth) and a net loss of $7 million.
This story is developing…
It’s Mobility Day at TechCrunch, and we’re hosting our Sessions event today in beautiful San Jose. That’s why we have a couple of related pieces on mobility at Extra Crunch.
First, our automotive editor Matt Burns is back with part two of his market map and analysis of the changing nature of how consumers are buying cars these days. Part one looked at how startups like Carvana, Shift, Vroom, and others are trying to disrupt the car dealership’s monopoly on auto sales in the United States.
Now, Burns takes a look at how startups like Fair and premium automakers like Mercedes are disrupting the very notion of owning a car in the first place. Rather than buying a car or leasing one, users with these new services are asked to subscribe to their cars, giving them the flexibility to get a car when they need it and to get rid of it when they don’t. Fair has raised $1.5 billion in venture capital, so clearly the space has caught the eye of investors.
“In simple terms,” co-founder and then CEO [of Fair] Scott Painter, told TechCrunch following its recent raise, “for every dollar in equity we unlock $10 in debt, and we borrow that cash to buy cars.”
Fair works much like a traditional lease with more options. Users can drive the vehicles as long as they’re paying for them and can switch to a different one whenever. This is different from a traditional lease where the buyer is often locked into the vehicle for two to four years. The model makes Fair an excellent option for Uber and Lyft drivers, and in the last year, Uber sold fair its $400 million leasing business to accelerate this offering.
Meanwhile, on the other side of the world, our China tech reporter Rita Liao takes a deeper look at the quickly changing tides of the ride-hailing industry in China. It’s a fight between intermediation, disintermediation, and who ultimately owns the ride-hailing consumer. As transit in China and the rest of the world increasingly becomes multi-modal, who owns the gateway to figuring out the best method and paying for it is increasingly in the driver’s seat:
In the years following the financial crisis, de novo bank activity in the US slowed to a trickle. But as memories fade, the economy expands and the potential of tech-powered financial services marches forward, entrepreneurs have once again been asking the question, “Should I start a bank?”
And by bank, I’m not referring to a neobank, which sits on top of a bank, or a fintech startup that offers an interesting banking-like service of one kind or another. I mean a bank bank.
One of those entrepreneurs is Judith Erwin, a well-known business banking executive who was part of the founding team at Square 1 Bank, which was bought in 2015. Fast forward a few years and Erwin is back, this time as CEO of the cleverly named Grasshopper Bank in New York.
With over $130 million in capital raised from investors including Patriot Financial and T. Rowe Price Associates, Grasshopper has a notable amount of heft for a banking newbie. But as Erwin and her team seek to build share in the innovation banking market, she knows that she’ll need the capital as she navigates a hotly contested niche that has benefited from a robust start-up and venture capital environment.
Gregg Schoenberg: Good to see, Judith. To jump right in, in my opinion, you were a key part of one of the most successful de novo banks in quite some time. You were responsible for VC relationships there, right?
…My background is one where people give me broken things, I fix them and give them back.
Judith Erwin: The VC relationships and the products and services managing the balance sheet around deposits. Those were my two primary roles, but my background is one where people give me broken things, I fix them and give them back.
Schoenberg: Square 1 was purchased for about 22 times earnings and 260% of tangible book, correct?
Erwin: Sounds accurate.
Schoenberg: Plus, the bank had a phenomenal earnings trajectory. Meanwhile, PacWest, which acquired you, was a “perfectly nice bank.” Would that be a fair characterization?
Schoenberg: Is part of the motivation to start Grasshopper to continue on a journey that maybe ended a little bit prematurely last time?
Erwin: That’s a great insight, and I did feel like we had sold too soon. It was a great deal for the investors — which included me — and so I understood it. But absolutely, a lot of what we’re working to do here are things I had hoped to do at Square 1.
Image via Getty Images / Classen Rafael / EyeEm
Schoenberg: You’re obviously aware of the 800-pound gorilla in the room in the form of Silicon Valley Bank . You’ve also got the megabanks that play in the segment, as well as Signature Bank, First Republic, Bridge Bank and others.
Few debates in technology have been as intense over the past few years as the debate over privacy. As companies like Facebook and Google have swelled with all the minutia of our daily lives — our likes, our searches, our calendar invites — there is increasing awareness of the risks to our privacy as these large data guzzlers suck up our digital selves.
Worse, these companies have used their incumbent network effects to increasingly be the identity layer of the web. From Login with Facebook to being the repository of our data that we shuttle from service to service, it’s increasingly clear that a handful of companies have centralized our data into their own profitable silos.
3Box wants to undo that trend toward identity centralization. Building upon and extending the concepts of the Web3 movement, 3Box offers a decentralized identity cloud storage layer that allows developers to save identity information outside of the big tech stacks.
The company announced today that it has raised a $2.5 million seed round led by Brad Burnham through Placeholder Ventures, where he is a venture partner. Brunham is also a partner at Union Square Ventures, where he invested in developer-focused companies like StackOverflow and Cloudflare. Burnham will join 3Box’s board of directors.
3Box was founded by a trio of alums from ConsenSys, the Ethereum-focused decentralized blob of an accelerator/VC/incubator based in Brooklyn that rode the blockchain wave in 2017 and 2018 only to scale back its ambitions with the decline in asset prices. CEO Michael Sena and COO Danny Zuckerman worked together at ConsenSys company uPort, which was also focused on identity, and they are joined by ConsenSys engineer Joel Thorstensson as CTO.
“We were always interested in the smart identity space … aggregating all of your data and all of your stuff and having agency over that data,” Sena explained. After co-founding uPort though, he increasingly saw an opportunity in distributed databases rather than the mobile application-focused product that uPort was building.
A distributed database is critical for decentralized apps (dApps) to be able to store identity information. “The angle in the Web3 ecosystem that we are seeing, these developers want to write apps with limited backends,” Sena said. “And now they have a distributed place for user data.”
What exactly is identity data though? It “can be anything,” Zuckerman said. “We take the approach of being unopinionated about what kind of data is stored in there.” He added that it “can include data about yourself, browsing data, transaction history, photos.” Ultimately, “identity is the abstraction or emergence of all of that data.”
While there is obviously a privacy and political angle to 3Box’s technology as with many blockchain projects, Sena and Zuckerman see a much more pragmatic reason to use their platform. “It reduces the burden of on-boarding” a new user, Zuckerman said. “Not only can you pull in your profile information, but your other data can also be pulled.” Sena added that “3Box allows you to write a new minimally-viable dApp … our value proposition works best for dApps because they want to avoid the backend.”
While identity layers like 3Box are certainly offered by the big tech giants, other startups have made a play for the space as well. “We’re somewhere between Gravatar and Firebase,” Sena said. “We’re less about owning that [login] button, but enabling the quick on-boarding” of new users.
Right now, 3Box is built around the Ethereum ecosystem. Zuckerman foresees expanding that to other ecosystems as they scale, and the company has also published a roadmap for the rest of 2019 of the new features and themes it intends to focus on.
3Box is co-headquartered in New York City, where Sena and Zuckerman call home, and Berlin, where Thorstensson has his base. With its funding, 3Box intends to build out its team in both locations.
In addition to Placeholder, the round was joined by David Pakman at Venrock, Wendy Xiao Schadeck at Northzone, and Jake Brukhman at CoinFund. The company was funded through ConsenSys’ venture studio, and ConsenSys Global Lead of Media Mike Kriak also sits on the company’s board.
With 200X the range of Wi-Fi at 1/1000th of the cost of a cellular modem, Helium’s “LongFi” wireless network debuts today. Its transmitters can help track stolen scooters, find missing dogs via IoT collars and collect data from infrastructure sensors. The catch is that Helium’s tiny, extremely low-power, low-data transmission chips rely on connecting to P2P Helium Hotspots people can now buy for $495. Operating those hotspots earns owners a cryptocurrency token Helium promises will be valuable in the future…
The potential of a new wireless standard has allowed Helium to raise $51 million over the past few years from GV, Khosla Ventures and Marc Benioff, including a new $15 million Series C round co-led by Union Square Ventures and Multicoin Capital. That’s in part because one of Helium’s co-founders is Napster inventor Shawn Fanning. Investors are betting that he can change the tech world again, this time with a wireless protocol that like Wi-Fi and Bluetooth before it could unlock unique business opportunities.
Helium already has some big partners lined up, including Lime, which will test it for tracking its lost and stolen scooters and bikes when they’re brought indoors, obscuring other connectivity, or their battery is pulled, out deactivating GPS. “It’s an ultra low-cost version of a LoJack” Helium CEO Amir Haleem says.
InvisiLeash will partner with it to build more trackable pet collars. Agulus will pull data from irrigation valves and pumps for its agriculture tech business. Nestle will track when it’s time to refill water in its ReadyRefresh coolers at offices, and Stay Alfred will use it to track occupancy status and air quality in buildings. Haleem also imagines the tech being useful for tracking wildfires or radiation.
Haleem met Fanning playing video games in the 2000s. They teamed up with Fanning and Sproutling baby monitor (sold to Mattel) founder Chris Bruce in 2013 to start work on Helium. They foresaw a version of Tile’s trackers that could function anywhere while replacing expensive cell connections for devices that don’t need high bandwith. Helium’s 5 kilobit per second connections will compete with SigFox, another lower-power IoT protocol, though Haleem claims its more centralized infrastructure costs are prohibitive. It’s also facing off against Nodle, which piggybacks on devices’ Bluetooth hardware. Lucky for Helium, on-demand rental bikes and scooters that are perfect for its network have reached mainstream popularity just as Helium launches six years after its start.
Helium says it already pre-sold 80% of its Helium Hotspots for its first market in Austin, Texas. People connect them to their Wi-Fi and put it in their window so the devices can pull in data from Helium’s IoT sensors over its open-source LongFi protocol. The hotspots then encrypt and send the data to the company’s cloud that clients can plug into to track and collect info from their devices. The Helium Hotspots only require as much energy as a 12-watt LED light bulb to run, but that $495 price tag is steep. The lack of a concrete return on investment could deter later adopters from buying the expensive device.
Only 150-200 hotspots are necessary to blanket a city in connectivity, Haleem tells me. But because they need to be distributed across the landscape, so a client can’t just fill their warehouse with the hotspots, and the upfront price is expensive for individuals, Helium might need to sign up some retail chains as partners for deployment. As Haleem admits, “The hard part is the education.” Making hotspot buyers understand the potential (and risks) while demonstrating the opportunities for clients will require a ton of outreach and slick marketing.
Without enough Helium Hotspots, the Helium network won’t function. That means this startup will have to simultaneously win at telecom technology, enterprise sales and cryptocurrency for the network to pan out. As if one of those wasn’t hard enough.
The long series of press conferences that marks the beginning of E3 is nearly at an end, with Square Enix the last to present, if you don’t count Nintendo tomorrow. The company leaned hard on nostalgia, piling remake upon remaster, but had a few surprises as well. Okay, maybe not “surprises,” but there was some good stuff.
The curtain rose, literally, on the title many gamers have been waiting on for years: the remake of RPG classic Final Fantasy VII. We saw a bit of this game in action last month, but this was much more comprehensive.
Yoshinori Kitase, producer of the title, speaking through a translator, thanked the crowd for their “support and patience over these years,” decades rather, during which fans never stopped clamoring for a remake. In fact, they clamored all the way through the whole on-stage demo.
The crowd went wild at the news that the game would cover two Blu-ray discs, each of which is of course many, may times the size of the original discs the game came from. The first chapter, set in the city of Midgar, has evolved to become a new game in its own right, he explained.
It has a combination of action and more traditional RPG mechanics — instead of turns you build up the ability to freeze time and take more tactical actions like using an item, casting spells, and so on. You’ll be able to switch between characters, of course, but this is definitely more in the line of XV than the original.
The game is playable at the Square Enix booth, which got everyone nice and riled up, especially seeing Tifa in action. You can watch the new, extended trailer below:
(Incidentally, the pre-order bonuses are ridiculous.)
Plugs for Life is Strange 2, Octopath Traveler, and remasters of FF Crystal Chronicles and the Last Remant followed. Then came Dragon Quest Builders 2 and DQ 11, which look as charming and fun as they have in months past. The Kingdom Hearts DLC Remind was shown off, and the expansion for Final Fantasy XIV as well. Two “celebrated classics” from the SaGa series got remastered. And the Final Fantasy VIII is also getting a much-deserved remaster, which is highly relevant to my interests.
As you can see, the presentation wasn’t exactly packed with surprises — but hey, Square Enix knows what its fans like, and honestly remakes and remasters are hot right now. But where’s my Final Fantasy Tactics?
One of the few new games we saw, top-down indie racing game called Circuit Superstars, looks like it could be a fun time when it comes out next year:
Final Fantasy Brave Exvius, one of the franchise’s mobile branches, is getting a sequel called War of the Visions — with a Game of Thrones-style introducing a variety of houses and their specialties. “Now in development.”
People Can Fly showed a cinematic trailer for a new IP called “Outriders” that could be cool, but it’s awfully hard to tell. It’s meant to be a strong narrative game with drop-in-drop-out multiplayer, but as they aren’t showing any gameplay yet. They’re a good studio (‘ll never forget Painkiller) so I’m sure they’ll make something interesting by the time the mid-2020 release date rolls around.
We got our best look yet at Oninaki, the action RPG from the creators of Lost Sphear and I Am Setsuna. Sure, it looks like something off the PlayStation 3, but so did the last two, and they were good.
A trailer for the new Avengers game from Crystal Dynamics received a warm welcome, though it was hard not to notice that the main characters were considerably different from the MCU versions. You won’t be controlling a virtual Chris Evans or Scarlett Johansson, sorry to say. This is the studio’s “unique take” on the team, which is fair, but coming as it does shortly after Endgame, a little disappointment is allowed.
The actors playing the characters in the game got a chance to introduce themselves and the complexities of their roles, which is certainly nice. Here’s hoping they have the chemistry the MCU team do — a short, dour clip of Banner arguing with Stark didn’t do much to convince, but the truth is Crystal Dynamics is good at characters and we should just let them do their thing.
The game itself looks good, a partly-online, story-driven thing with “no loot boxes” and every new area and character available for free. We’ll know more once we’ve played it at Square Enix’s booth. It’s coming out on everything but Switch in May of 2020, and PS4 users will get “early beta access” and some “unique benefits.”
Then the press conference ended abruptly. Just like this post!
This evening’s Square E3 press was…something. After more than an hour of Final Fantasy remasters, the publisher closed things out with far and away its most eagerly awaited game. Licensing some white hot IP, the RPG masters at Square are offering up their own take on Earth’s mightiest heroes.
Bay Area-based Crystal Dynamics addressed what appears to be an inability to license the likenesses of familiar actors like Robert Downey Jr. and Scarlett Johansson, referring to the team as its “interpretation of these iconic characters.”
Granted, the team has been around well before the Marvel Cinematic Universe, but those players hoping to play as their favorite actors are clearly S.O.L. here.
We didn’t see much in the way of gameplay here, but Crystal’s describing the title as either a single or co-op gameplay, centered around an original story that involves the superheroes attempting to stop the destruction of the city by the Bay. From the looks of it, things don’t go great.
The game is coming to PS4, Xbox One and Google Stadia May 15, 2020.
Just in time for your road trip to LA for E3, Square Enix has suddenly made the soundtracks to every main Final Fantasy game available for free to listen to online. Just log into Spotify or Apple Music and search for “Final Fantasy original soundtrack.”
I just checked and Final Fantasies I-XV and some sub-sequels are all there, some in original and remastered versions, plus plenty of popular (or not) side titles like FF Tactics and Type-0. There’s even the soundtrack for the ill-considered 2001 movie, The Spirits Within.
No X-2, unfortunately for the few who liked that one (usually very intensely), and a few of the other non-main entries (like Tactics Advance and A2) are missing right now but perhaps only late to arrive. So it’s not every every Final Fantasy, but close enough that I don’t feel bad about putting it in the headline.
There’s been no mention of it on Square Enix’s social media channels, even the Final Fantasy-specific one. But it likely has to do with a special concert being given this week for FF VII, the remake of which is almost certain to appear at E3.
We have a very special guest announcement to make!
Yoshinori Kitase, director of the original #FinalFantasy VII, is hosting the upcoming FINAL FANTASY VII – A Symphonic Reunion concert!
— FINAL FANTASY (@FinalFantasy) June 5, 2019
I’ve listened to a few tracks and it all seems legit. The only thing is that many of the titles are in Japanese — so it might be difficult to pick out your favorite character’s theme or what have you if you don’t, you know, speak that language.
Now you can at last create a greatest hits of Nobuo Uematsu’s FF work and access it from anywhere. It’s been a long time coming.
When starting a tech company, there seems to be a playbook that most entrepreneurs follow. While some may start with a bit of bootstrapping, most will dive straight into raising seed money through investors. In many cases, this is a great path. It’s a path I’ve taken twice myself, first with GroupMe, and then again with Fundera.
Ironically, though, my second venture-backed company is a business focused on helping entrepreneurs find debt financing—a process I’ve gone through only once myself. But after five years of building and scaling this business, it’s made me take a step back and consider the question of when and where debt financing might be a better option for a business than equity financing, and vice versa.
I view these financing vehicles differently now than I did half a decade ago, and think it’s time we start to think a bit wider and diversely about how we finance our growing endeavors.
After all, when entrepreneurs take venture capital, they usually sign up to provide a 10x return on an investor’s capital. This expectation ultimately influences how they operate their business in the short-term. Maybe they’re not always ready for that expectation.
Or maybe they know they need to focus on building a good business before a great one. In this case, debt may be the better vehicle, where the only expectation is to pay it back.
Whether it’s money to get your business off the ground, capital to fuel additional growth, or cash to cover a gap, and whether you’re guiding the growth of a burgeoning startup, a smaller business, or even consulting firm helping other entrepreneurs, you should think critically about how you finance your business.
Here’s what to consider.
Foursquare just made its first acquisition. The location tech company has acquired Placed from Snap Inc on the heels of a fresh $150 million investment led by the Raine Group. The terms of the deal were not disclosed. Placed founder and CEO David Shim will become President of Foursquare.
Placed is the biggest competitor to Foursquare’s Attribution product, which allows brands to track the physical impact (foot traffic to store) of a digital campaign or ad. Up until now, Placed and Attribution by Foursquare combined have measured over $3 billion in ad-to-store visits.
Placed launched in 2011 and raised $13.4 million (according to Crunchbase) before being acquired by Snap Inc. in 2017.
As part of the deal with Foursquare, the company’s Attribution product will henceforth be known as Placed powered by Foursquare. The acquisition also means that Placed powered by Foursquare will have more than 450 measureable media partners, including Twitter, Snap, Pandora, and Waze. Moreover, more than 50 percent of the Fortune 100 are partnered with Placed or Foursquare.
It’s also worth noting that this latest investment of $150 million is the biggest financing round for Foursquare ever, and comes following a $33 million Series F last year.
Here’s what Foursquare CEO Jeff Glueck had to say about the financing in a prepared statement:
This is one of the largest investments ever in the location tech space. The investment will fund our acquisition and also capitalize us for our increased R&D and expansion plans, allowing us to focus on our mission to build the world’s most trusted, independent location technology platform.
That last bit, about an independent location technology platform, is important here. Foursquare is ten years old and has transformed from a consumer-facing location check-in app — a game, really — into a location analytics and development platform.
Indeed, when Glueck paints his vision for the company, he lists five key areas of focus:
You’ll notice that its consumer apps, Foursquare and Swarm, are at the bottom of the list. But that’s because Foursquare’s real technological and strategic advantage isn’t in building the best social platform. In fact, Glueck said that more than 90 percent of the company’s revenue came from the enterprise side of the business. Foursquare’s advantage is in the accuracy of its technology, as afforded by the decade of data that has come from Foursquare, Swarm, and the users who have expressly verified their location.
The Pilgrim SDK fits into that top item on the list: developer tools. The Pilgrim SDK allows developers to embed location-smart experiences and notifications into their apps and services. But it also expands Foursquare’s access to data from beyond its own apps to the greater ecosystem, yielding the data it needs to power analytics tools for brands and publishers.
With this acquisition, Placed will be able to leverage Foursquare’s existing map of 105 million places of interest across 190 countries, as well as tap into the measured U.S. audience of over 100 million monthly devices.
Foursquare and Placed share a similar philosophy of building against a truth set of real consumer responses. Getting real people to confirm the name of their location is the only way to know if your technology is accurate or not. Placed has leveraged over 135 million survey responses in its first-party Placed survey apps, all from consumers opted-in to its rewards app. Foursquare expands the truth set for machine learning exponentially by adding in our over 13 billion consumer confirmations.
The hope is that Foursquare is accurate enough to become the de facto location analytics and services company for measuring ad spend. With enough scale, that may allow the company to break into the walled gardens where most of that ad spend is going, Facebook and Google.
Of course, to win as the “world’s most trusted, independent location technology platform,” consumers have to trust the platform. After all, one’s location may be the most sensitive piece of data about them. Foursquare has taken steps to be clear about what its technology is capable of. In fact, at SXSW this year, Foursquare offered a limited run of a product called Hypertrending, which was essentially an anonymized view of real-time location data showing activity in the Austin area.
Here’s what Chairman of the Board and cofounder Dennis Crowley had to say at the time:
We feel the general trend with internet and technology companies these days has been to keep giving users a more and more personalized (albeit opaquely personalized) view of the world, while the companies that create these feeds keep the broad “God View” to themselves. Hypertrending is one example of how we can take Foursquare’s aggregate view of the world and make it available to the users who make it what it is. This is what we mean when we talk about “transparency” – we want to be honest, in public, about what our technology can do, how it works, and the specific design decisions we made in creating it.
With regards to today’s acquisition of Placed, Jeff Glueck had this to say:
Both companies also share a commitment to privacy and consumers being in control. Our Foursquare credo of “data as a privilege” only deepens as our company expands. We believe location should only be shared when consumers can see real value and visible benefits driven by location. We remain dedicated to elevating the industry through respect for transparency, user control, and instituting layers of privacy safeguards.
This new financing brings Foursquare’s total funding to $390.4 million.
Our media columnist Eric Peckham talked to a variety of successful founders on how they generate FOMO (i.e. fear of missing out) among VCs during their fundraises. While having a great deck and story is key to startup success, clearly there is also a bit of the dark arts required to go from intro email to term sheet.
We focused on a two-week period and set all the meetings for Thursday and Friday. From 7am into the evening, back-to-back pitches at all the firms in one area then the next area. That’s because partner meetings are on Mondays, so the Thursday and Friday conversations would lead to pitching the whole partnership the following Monday. We had a 24-hour rule: if we didn’t hear back from a fund in 24 hours, we crossed them off the list.
According to this CEO, Sequoia and Benchmark are the best at throwing entrepreneurs off their process in order to get ahead of the competition. Sequoia will typically arrange meetings for the morning so they can invite you back for a second meeting with more partners that same afternoon; Benchmark’s partners are quick to travel to wherever you are in the world and sell you on working together (with a term sheet at the ready).
Our editor Jordan Crook did a great interview with J Crowley of Airbnb Lux and formerly of Foursquare, and the two of them discussed the opportunities and challenges of being a PM, how to deal with failure, and how to be a leader on a product team.
The role of Product Manager can mean very different things at various companies. Should a product manager be technical? Scientific? Opinionated?
J Crowley has run product at three big-name companies. At Foursquare, he led the rebuild of Swarm after a rocky initial launch and eventually became Head of Product. He then moved on to Blue Apron as Head of Product, overseeing growth and monetization. This was right before Blue Apron went public, which ushered in a turbulent time for the company but one that yielded a wealth of life lessons for Crowley.
Now, he serves as Head of Product for Airbnb Lux.
I hopped on the phone with J to talk about what makes a great product manager, some of the lessons he’s learned, and how he’s made difficult decisions and communicated that to his team.
Editor’s Note: This interview has been edited for length and clarity.
Jordan: How did you get into the tech world in the first place? You used to work in TV, right?
J Crowley: I worked in the television industry for about 10 years. Many years at NBC for a bunch of different departments. Started in the Page Program, and worked on everything from late night comedy, to sports, news, election coverage, digital programming.
I ended up leaving NBC to start my own company, which was a small digital studio here in New York City. We made hundreds of digital shorts and web series. It was probably the most challenging, but most fun three years of my career.
I eventually packed it up to join Foursquare as their Director of Business Development in 2010. There, I helped them grow their brand by securing hundreds of media partnerships with major publishers, sports leagues, TV networks, musicians, etc. That was actually my first job in tech. It wasn’t a product role. It was business development.
Tired of noisy music venues where you can hardly see the stage? Sofar Sounds puts on concerts in people’s living rooms where fans pay $15 to $30 to sit silently on the floor and truly listen. Nearly 1 million guests have attended Sofar’s more than 20,000 gigs. Having attended a half dozen of the shows, I can say they’re blissful…unless you’re a musician to pay a living. In some cases, Sofar pays just $100 per band for a 25 minute set, which can work out to just $8 per musician per hour or less. Hosts get nothing, and Sofar keeps the rest, which can range from $1100 to $1600 or more per gig — many times what each performer takes home. The argument was that bands got exposure, and it was a tiny startup far from profitability.
Today, Sofar Sounds announced it’s raised a $25 million round led by Battery Ventures and Union Square Ventures, building on the previous $6 million it’d scored from Octopus Ventures and Virgin Group. The goal is expansion — to become the de facto way emerging artists play outside of traditional venues. The 10-year-old startup was born in London out of frustration with pub-goers talking over the bands. Now it’s throwing 600 shows per month across 430 cities around the world, and over 40 of the 25,000 artists who’ve played its gigs have gone on to be nominated for or win Grammys. The startup has enriched culture by offering an alternative to late night, dark and dirty club shows that don’t appeal to hard-working professionals or older listeners.
But it’s also entrenching a long-standing problem: the underpayment of musicians. With streaming replacing higher priced CDs, musicians depend on live performances to earn a living. Sofar is now institutionalizing that they should be paid less than what gas and dinner costs a band. And if Sofar suck in attendees that might otherwise attend normal venues or independently organized house shows, it could make it tougher for artists to get paid enough there too. That doesn’t seem fair given how small Sofar’s overhead is.
By comparison, Sofar makes Uber look downright generous. A source who’s worked with Sofar tells me the company keeps a lean team of full-time employees who focus on reserving venues, booking artists, and promotion. All the volunteers who actually put on the shows aren’t paid, and neither are the venue hosts, though at least Sofar pays for insurance. The startup has previously declined to pay first-time Sofar performers, instead providing them a “high-quality” video recording of their gig. When it does pay $100 per act, that often amounts to a tiny shred of the total ticket sales.
“Sofar, however, seems to be just fine with leaving out the most integral part: paying the musicians” writes musician Joshua McClain. “This is where they willingly step onto the same stage as companies like Uber or Lyft — savvy middle-men tech start-ups, with powerful marketing muscle, not-so-delicately wedging themselves in-between the customer and merchant (audience and musician in this case). In this model, everything but the service-provider is put first: growth, profitability, share-holders, marketers, convenience, and audience members — all at the cost of the hardworking people that actually provide the service.” He’s urged people to #BoycottSofarSounds
A deeply reported KQED expose by Emma Silvers found many bands were disappointed with the payouts, and didn’t even know Sofar was a for-profit company. “I think they talk a lot about supporting local artists, but what they’re actually doing is perpetuating the idea that it’s okay for musicians to get paid shit,” Oakland singer-songwriter Madeline Kenney told KQED.
Sofar CEO Jim Lucchese, who previously ran Spotify’s Creator division after selling it his music data startup The Echo Nest and has played Sofar shows himself, declares that “$100 buck for a showcase slot is definitely fair” but admits that “I don’t think playing a Sofar right now is the right move for every type of artist.” He stresses that some Sofar shows, especially in international markets, are pay-what-you-want and artists keep “the majority of the money”. The rare sponsored shows with outside corporate funding like one for the Bohemian Rhapsody film premier can see artists earn up to $1500, but these are a tiny fraction of Sofar’s concerts.
Otherwise, Lucchese says “the ability to convert fans is one of the most magical things about Sofar” referencing how artists rely on asking attendees to buy their merchandise or tickets for their full-shows and follow them on social media to earn money. He claims that if you pull out what Sofar pays for venue insurance, performing rights organizations, and its full-time labor, “a little over half the take goes to the artists.” Unfortunately that makes it sound like Sofar’s few costs of operation are the musicians’ concern. As McClain wrote, “First off, your profitability isn’t my problem.”
Now that it has ample funding, I hope to see Sofar double down on paying artists a fair rate for their time and expenses. Luckily, Lucchese says that’s part of the plan for the funding. Beyond building tools to help local teams organize more shows to meet rampant demand, he says “Am I satisfied that this is the only revenue we make artists right now? Abslutely not. We want to invest more on the artist side.” That includes better ways for bands to connect with attendees and turn them into monetizable fans. Even just a better followup email with Instagram handles and upcoming tour dates could help.
We don’t expect most craftspeople to work for “exposure”. Interjecting a middleman like Sofar shouldn’t change that. The company has a chance to increase live music listening worldwide. But it must treat artists as partners, not just some raw material they can burn through even if there’s always another act desperate for attention. Otherwise musicians and the empathetic fans who follow them might leave Sofar’s living rooms empty.