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Earth’s Unicorn Population Is Exploding

By Arielle Pardes
It’s not a fantasy: VC valuations and spending on startups in 2021 are off the charts, and the year isn’t over yet.

What 377 Y Combinator pitches will teach you about startups

By Natasha Mascarenhas

Along with a cadre of other TechCrunch folks, I spent this week extremely focused on one event: Y Combinator. The elite accelerator announced a staggering 377 startups as its Summer 2021 cohort. We covered every single on-the-record startup that presented and plucked out some favorites:

There’s something quite earnest and magical about spending literally hours hearing founder after founder pitch their ideas, with one minute, a single slide and a whole lot of optimism. It’s why I like covering demo days: I get tunnel vision into where innovation is going next, what behemoths are ripe for disruption and what founders think is a witty competitive edge versus a simple baseline.

That said, I will share one caveat. While YC is an ambitious snapshot, it’s not entirely illustrative of the next wave of decision-makers and leaders within startups — from a diversity perspective. The accelerator posted small gains in the number of women and LatinX founders in its batch, but dropped in the number of Black founders participating. The need for more diverse accelerators has never been more obvious, and as some in the tech community argue, is Y Combinator’s biggest blind spot.

This in mind, I want to leave you with a few takeaways I had after listening to hundreds of pitches. Here’s what 377 Y Combinator pitches taught me about startups:

  1. Instacart walked so YC startups could stroll. Instacart, last valued at $39 billion, is one of Y Combinator’s most successful graduates — which makes it even more spicier that a number of startups within this summer’s batch want to take on the behemoth. Instead of going after the obvious — speed — startups are looking to enhance the grocery delivery experience through premium produce, local recipes and even ugly vegetables. It suggests that there may be a new chapter in grocery delivery, one in which ease isn’t the only competitive advantage.
  2. Crypto’s pre-seed world is quieter than fintech. YC feels more like a fintech accelerator than ever before, but when it comes to crypto, there weren’t as many moonshots as I’d expect. We discussed this a bit in the Equity podcast, but if anyone has theories as to why, I’m game to hear ‘em.
  3. Edtech wants to disrupt artsy subjects. It’s common to see edtech founders flock to subjects like science and mathematics when it comes to disruption. Why? Well, from a pure pedagogical perspective, it’s easier to scale a service that answers questions that only have one right answer. While math may fit into a box that works for a tech-powered AI tutoring bot, arts, on the other hand, may require a little bit more human touch. This is why I was excited to see a number of edtech startups, from Spark Studio to Litnerd, focusing on humanities in their pitches. As shocking as it sounds, to rethink how a bookclub is read is definitely a refreshing milestone for edtech.
  4. Sometimes, the best pitch is no pitch at all. One pitch stood out simply because it addressed the elephant in the room: We’re all stressed. Jupe sells glamping-in-a-box and the profitable business likely benefited from COVID-19. I remember that because the founder used a portion of his pitch to tell investors to breathe, because it’s been a long two days. Being human, and more importantly, speaking like one, is what it takes to stand out these days.

On that note, exhale. Let’s move on to the rest of this newsletter, which includes nostalgic nods to Wall Street, public filings and my favorite new podcast. As always, you can find and support me on Twitter @nmasc_ or send me tips at natasha.m@techcrunch.com.

A return to old school Wall Street

With so many new funds, solo-GPs and alternative capital sources on the market these days, founders are confused. Funding may have moved away from three dudes on Sand Hill Road, but it’s also become more fragmented, which means entrepreneurs need to be even more sophisticated in how they fill up their cap tables. This week, I interviewed one recently venture-backed startup that proposed a solution: a return to old school Wall Street. 

Here’s what to know: Hum Capital wants to help investors allocate their resources to ambitious businesses, perfectly. The startup seeks to emulate the world of old school Wall Street, which helped ambitious business owners find the best financing option for their goal, instead of today’s dance of startups trying to prove worthiness for one type of capital. In my story, I explained more about the business.

At this stage, Hum Capital’s product is easy to explain:

It uses artificial intelligence and data to connect businesses to the available funders on the platform. The startup connects with a capital-hungry startup, ingests financial data from over 100 SaaS systems, including QuickBooks, NetSuite and Google Analytics, and then translates them to the some 250 institutional investors on its platform.

From Hum to mmhmm:       

IPO filings & other hubbub

Image Credits: ansonmiao / Getty Images

When the pandemic began to impact startups, Toast was top of the list. The restaurant tech startup had a series of deep layoffs as many of its clients in the hospitality industry had to shut down. Months later, Toast reentered headlines with a dramatically different message: It’s going public, and here’s all of our financial data.

Here’s what you need to know: This week, Toast published its S-1, offering a portrait into how the startup was impacted by the COVID-19 pandemic and answering questions on why it’s going public now. After ripping apart the Warby Parker S-1, Alex had five takeaways from the Toast S-1. My favorite excerpt? Toast was smart to diversify beyond its hardware, hand-held payment processors:

Toast’s two largest revenue sources — software and fintech incomes — have posted constant growth on a quarter-over-quarter basis. Hardware revenues have proved slightly less consistent, although they are also moving in a positive direction this year and set what appears to be an all-time record result in Q2 2021.

Toast would have had a much worse second quarter last year if it didn’t have software revenues. And since then, its growth would not have been as impressive without payments revenues (its fintech line item, speaking loosely). The broad revenue mix that Toast built has proved to limit downside while opening lots of room for growth.

Butter or jam:

Around TC

You already bought your tickets to Disrupt right? If not, here’s the link, with a fancy discount from yours truly.

Now that that’s out of the way, I want you to listen to Found, TechCrunch’s newest podcast that focuses on talking to early-stage founders about building and launching their companies. Recent episodes include:

Across the week

Seen on TechCrunch

Seen on Extra Crunch

Talk next week,

N

Make accessibility part of your startup’s products and culture from day one

By Annie Siebert
Joe Devon Contributor
Joe Devon is the co-founder of Diamond, a digital agency that builds accessible experiences. He is also a co-founder of Global Accessibility Awareness Day and chair of the GAAD Foundation.

The world of accessibility has experienced a tipping point thanks to the pandemic, which drove people of all abilities to do more tasks and shopping online.

For the last year, the digital world was the only place brands could connect with their customers. A Forrester survey found that 8 in 10 companies have taken their first steps toward working on digital accessibility.

What’s driving this change besides the increased digital interactions? Fortune 500 companies are finally starting to realize that people with disabilities make up 1 billion of the world’s market. That population and their families control more than $13 trillion in disposable income, according to Return on Disability’s “The Global Economics of Disability.”

However, only 36% of companies in Forrester’s survey are completely committed to creating accessible digital experiences.

Although digital accessibility has been around for decades, companies have not caught on to its benefits until recently. In its latest survey, the WebAIM Million analysis of 1 million home pages found accessibility errors on 97.4% of the websites evaluated.

What does this mean for you? Why should you care about this? Because this is an opportunity for your company to get ahead of the competition and reap the rewards of being an early adopter.

The benefits of digital accessibility

Companies are now realizing the advantages of creating accessible products and properties that go beyond doing the right thing. For one, people are living longer. The World Health Organization says people aged 60 and older outnumber children under 5. Moreover, the world’s population of those who are 60 and older is expected to reach 2 billion by 2050, up from 900 million in 2015.

W3C Web Accessibility Initiative provides an overview on Web Accessibility for Older Users. Here’s what it reveals.

  • Hearing loss affects 47% of people aged 61 to 80.
  • Vision decline affects 16% of people aged 65 to 74.
  • Mild cognitive impairment affects 20% of people over 70.
  • Arthritis affects more than 50% of people over 65.

In short, developing accessible digital products helps you reach a much larger audience, which will include you, your co-workers and your family. Everyone is going to become situationally, temporarily or episodically impaired at some point in their lives. Everyone enters a noisy or dark environment that can make it harder to see or hear. An injury or an illness can cause someone to use the internet differently on a temporary basis. People with arthritis, migraines and vertigo experience episodes of pain and discomfort that affect their ability to interact with digital devices, apps and tools.

Additionally, no one has ever advocated against making products and websites accessible to more people. Despite this, the relative universal appeal of accessibility as a principle does not mean that it will be as easy as explaining the need and getting people on board to make major organizational changes. A lot of work remains in raising awareness and educating people about why we need to make these changes and how to go about it.

You have the why. Now here are five things to help you with how to make changes in your company to integrate accessibility as a core part of your business.

1. Tap the right people to create accessible experiences

According to the second annual State of Accessibility Report, only 40% of the Alexa Top 100 websites are fully accessible, proving the needs of people with disabilities are, more often than not, being overlooked when creating web experiences.

To design for people with disabilities, it’s important to have an understanding of how they use your products or web properties. You’ll also want to know what tools will help them achieve their desired results. This starts with having the right people on board.

Hiring accessibility experts to advise your development team will proactively identify potential issues and ensure you design accessibly from the start, as well as create better products. Better yet, hiring people with disabilities brings a deeper level of understanding to your work.

2. Hire designers passionate about accessibility

Having accessibility experts on your team to provide advice and guidance is a great start. However, if the rest of your team is not passionate about accessibility, that can turn into a potential roadblock. When interviewing new designers, ask about accessibility. It’ll gauge a candidate’s knowledge and passion in the area. At the same time, you set an expectation that accessibility is a priority at your organization.

Being proactive about your hires and making sure they will contribute to a culture of accessibility and inclusion will save you major headaches. Accessibility starts in the design and user experience (UX) phase. If your team doesn’t deliver there, then you will have to fix their mistakes later, essentially delaying the project and costing your organization. It costs more to fix things than to build them accessibly in the first place.

3. Remember that accessibility is for everyone

People deciding whether to invest in accessibility often ask themselves how many people are going to use the feature. The reasoning behind the question is understandable from a business perspective; accessibility can be an expense, and it’s reasonable to want to spend money responsibly.

However, the question is rooted in one of the biggest misconceptions in the field. The myth is that accessibility only benefits people who are blind or deaf. This belief is frustrating because it greatly underestimates the number of people with disabilities and minimizes their place in society. Furthermore, it fails to acknowledge that people who may not have a disability still benefit greatly from accessibility features.

Disability is a spectrum that all of us will find ourselves on sooner or later. Maybe an injury temporarily limits our mobility that requires us to perform basic tasks like banking and shopping exclusively online. Or maybe our vision and hearing change as we age, which affects our ability to interact online.

When we understand that accessibility is about designing in a way that includes as many people as possible, we can reframe the conversation around whether it’s worth investing in. This approach sends a clear message: No business can afford to ignore a fast-growing population.

Think about it this way: If you have a choice of taking an elevator or the stairs, which would you take? Most pick the elevator. Those ramps on street corners called curb cuts? They were initially designed for allowing wheelchairs to cross the street.

Yet, many use these ramps, including parents pushing strollers, travelers pulling luggage, skateboarders rolling and workers moving heavy loads on dollies. A feature initially designed for accessibility benefits far more people than the original target audience. That’s the magic of the curb-cut effect.

4. Hire agencies that build accessibly by default

Whether you have a small team or are expanding an in-house accessibility practice, working with an agency can be an effective way to embrace and adopt accessible practices. The secret to a successful partnership is choosing an agency that will help your team grow into its accessibility practice.

The key to finding the right agency is selecting one that builds accessibly by default. When you know you are working with an agency that shares your organization’s values, you have a trusted partner in your mission of improving accessibility. It also removes any guesswork or revisions down the line. This is a huge win, as many designers overlook details that can make or break an experience for a user with a disability.

Working with an agency focused on providing accessible experiences narrows the likelihood of errors going unnoticed and unremedied, giving you confidence that you are providing an excellent experience to your entire audience.

5. Integrate accessibility into your supply chain

On any given day, enterprises and large organizations often work with dozens of stakeholders. From vendors and agencies to freelancers and internal employees, the nature of business today is far-reaching and collaborative. While this is valuable for exchanging ideas, accessibility can get lost in the mix with so many different people involved.

To prevent this from happening, it’s important to align these moving pieces of a business into a supply chain that is focused on accessibility at every stage of the business. When everyone is completely bought in, it cuts the risk of a component being inaccessible and causing issues for you in the future.

The startup advantage

A major challenge that comes up repeatedly is the struggle to change the status quo. Once an organization implements and ingrains inaccessible processes and products into its culture, it is hard to make meaningful change. Even if everyone is willing to commit to the change, the fact is, rewriting the way you do business is never easy.

Startups have an advantage here: They do not bear years of inaccessible baggage. It’s not written into the code of their products. It’s not woven into the business culture. In many ways, a startup is a clean slate, and they need to learn from the trials of their more established peers.

Startup founders have the opportunity to build an accessible organization from the ground up. They can create an accessible-first culture that will not need rewriting 10, 20 or 30 years from now by hiring a diverse workforce with a passion for accessibility, writing accessible code for products and web properties, choosing to work with only third parties who embrace accessibility and advocating for the rights of people with disabilities.

Many of these considerations here have a common denominator: culture. While most people in the technology industry will agree that accessibility is an important and worthy cause to champion, it has a huge awareness problem.

Accessibility needs to be everywhere in software development, from requirements and beyond to include marketing, sales and other non-tech teams. It cannot be a niche concern left to a siloed team to handle. If we, as an industry and as a society, recognize that accessibility is everyone’s job, we will create a culture that prioritizes it without question.

By creating this culture, we will no longer be asking, “Do we have to make this accessible?” Instead, we’ll ask, “How do we make this accessible?” It’s a major mindset shift that will make a tangible difference in the lives of 1 billion people living with a disability and those who eventually will have a disability or temporary, situational or episodic impairments affecting their ability to use online and digital products.

Advocating for accessibility may feel like an uphill battle at times, but it isn’t rocket science. The biggest need is education and awareness.

When you understand the people you build accessible products for and the reasons they need those products, it becomes easier to secure buy-in from people in all parts of your organization. Creating this culture is the first step in a long quest toward accessibility. And the best part is, it gets easier from here.

A founder’s guide to effectively managing your options pool

By Ram Iyer
Allen Miller Contributor
Allen Miller is a principal at Oak HC/FT based in San Francisco. He invests in early- and growth-stage companies, with a particular focus on fintech.

There’s an old startup adage that goes: Cash is king. I’m not sure that is true anymore.

In today’s cash rich environment, options are more valuable than cash. Founders have many guides on how to raise money, but not enough has been written about how to protect your startup’s option pool. As a founder, recruiting talent is the most important factor for success. In turn, managing your option pool may be the most effective action you can take to ensure you can recruit and retain talent.

That said, managing your option pool is no easy task. However, with some foresight and planning, it’s possible to take advantage of certain tools at your disposal and avoid common pitfalls.

In this piece, I’ll cover:

  • The mechanics of the option pool over multiple funding rounds.
  • Common pitfalls that trip up founders along the way.
  • What you can do to protect your option pool or to correct course if you made mistakes early on.

A minicase study on option pool mechanics

Let’s run through a quick case study that sets the stage before we dive deeper. In this example, there are three equal co-founders who decide to quit their jobs to become startup founders.

Since they know they need to hire talent, the trio gets going with a 10% option pool at inception. They then cobble together enough money across angel, pre-seed and seed rounds (with 25% cumulative dilution across those rounds) to achieve product-market fit (PMF). With PMF in the bag, they raise a Series A, which results in a further 25% dilution.

The easiest way to ensure you don’t run out of options too quickly is simply to start with a bigger pool.

After hiring a few C-suite executives, they are now running low on options. So at the Series B, the company does a 5% option pool top-up pre-money — in addition to giving up 20% in equity related to the new cash injection. When the Series C and D rounds come by with dilutions of 15% and 10%, the company has hit its stride and has an imminent IPO in the works. Success!

For simplicity, I will assume a few things that don’t normally happen but will make illustrating the math here a bit easier:

  1. No investor participates in their pro-rata after their initial investment.
  2. Half the available pool is issued to new hires and/or used for refreshes every round.

Obviously, every situation is unique and your mileage may vary. But this is a close enough proxy to what happens to a lot of startups in practice. Here is what the available option pool will look like over time across rounds:

 

Option pool example

Image Credits: Allen Miller

Note how quickly the pool thins out — especially early on. In the beginning, 10% sounds like a lot, but it’s hard to make the first few hires when you have nothing to show the world and no cash to pay salaries. In addition, early rounds don’t just dilute your equity as a founder, they dilute everyone’s — including your option pool (both allocated and unallocated). By the time the company raises its Series B, the available pool is already less than 1.5%.

Playbyte’s new app aims to become the ‘TikTok for games’

By Sarah Perez

A startup called Playbyte wants to become the TikTok for games. The company’s newly launched iOS app offers tools that allow users to make and share simple games on their phone, as well as a vertically scrollable, fullscreen feed where you can play the games created by others. Also like TikTok, the feed becomes more personalized over time to serve up more of the kinds of games you like to play.

While typically, game creation involves some aspect of coding, Playbyte’s games are created using simple building blocks, emoji and even images from your Camera Roll on your iPhone. The idea is to make building games just another form of self-expression, rather than some introductory, educational experience that’s trying to teach users the basics of coding.

At its core, Playbyte’s game creation is powered by its lightweight 2D game engine built on web frameworks, which lets users create games that can be quickly loaded and played even on slow connections and older devices. After you play a game, you can like and comment using buttons on the right-side of the screen, which also greatly resembles the TikTok look-and-feel. Over time, Playbyte’s feed shows you more of the games you enjoyed as the app leverages its understanding of in-game imagery, tags and descriptions, and other engagement analytics to serve up more games it believes you’ll find compelling.

At launch, users have already made a variety of games using Playbyte’s tools — including simulators, tower defense games, combat challenges, obbys, murder mystery games, and more.

We made an app called Playbyte that lets you make games on your phone, discover games made by other users, and challenge your friends https://t.co/FFnMbKG1ls pic.twitter.com/eqhabN3kM1

— Playbyte (@PlaybyteInc) May 25, 2021

According to Playbyte founder and CEO Kyle Russell — previously of Skydio, Andreessen Horowitz, and (disclosure!) TechCrunch — Playbyte is meant to be a social media app, not just a games app.

“We have this model in our minds for what is required to build a new social media platform,” he says.

What Twitter did for text, Instagram did for photos and TikTok did for video was to combine a constraint with a personalized feed, Russell explains. “Typically. [they started] with a focus on making these experiences really brief…So a short, constrained format and dedicated tools that set you up for success to work within that constrained format,” he adds.

Similarly, Playbyte games have their own set of limitations. In addition to their simplistic nature, the games are limited to five scenes. Thanks to this constraint, a format has emerged where people are making games that have an intro screen where you hit “play,” a story intro, a challenging gameplay section, and then a story outro.

In addition to its easy-to-use game building tools, Playbyte also allows game assets to be reused by other game creators. That means if someone who has more expertise makes a game asset using custom logic or which pieced together multiple components, the rest of the user base can benefit from that work.

“Basically, we want to make it really easy for people who aren’t as ambitious to still feel like productive, creative game makers,” says Russell. “The key to that is going to be if you have an idea — like an image of a game in your mind — you should be able to very quickly search for new assets or piece together other ones you’ve previously saved. And then just drop them in and mix-and-match — almost like Legos — and construct something that’s 90% of what you imagined, without any further configuration on your part,” he says.

In time, Playbyte plans to monetize its feed with brand advertising, perhaps by allowing creators to drop sponsored assets into their games, for instance. It also wants to establish some sort of patronage model at a later point. This could involve either subscriptions or even NFTs of the games, but this would be further down the road.

The cutest lil sprite blob I’ve ever seen 😭#pixelart #gamedev pic.twitter.com/7uBRzs6ix0

— Playbyte (@PlaybyteInc) August 21, 2021

The startup had originally began as a web app in 2019, but at the end of last year, the team scrapped that plan and rewrote everything as a native iOS app with its own game engine. That app launched on the App Store this week, after previously maxing out TestFlight’s cap of 10,000 users.

Currently, it’s finding traction with younger teenagers who are active on TikTok and other collaborative games, like Roblox, Minecraft, or Fortnite.

“These are young people who feel inspired to build their own games but have been intimidated by the need to learn to code or use other advanced tools, or who simply don’t have a computer at home that would let them access those tools,” notes Russell.

Playbyte is backed by $4 million in pre-seed and seed funding from investors including FirstMark (Rick Heitzmann), Ludlow Ventures (Jonathon Triest and Blake Robbins), Dream Machine (former Editor-in-Chief at TechCrunch, Alexia Bonatsos), and angels such as Fred Ehrsam, co-founder of Coinbase; Nate Mitchell, co-founder of Oculus; Ashita Achuthan, previously of Twitter; and others.

The app is a free download on the App Store.

Extra Crunch roundup: Cohort analysis, YC Demo Day recaps, building your supply chain

By Walter Thompson

The ongoing fintech revolution continues to level the playing field where legacy companies have historically dominated startups.

To compete with retail banks, many newcomers are offering customers credit and debit cards; developer-friendly APIs make issuance relatively easy, and tools for managing processes like KYC are available off the shelf.

To learn more about the low barriers to entry — and the inherent challenges of creating a unique card offering — reporter Ryan Lawler interviewed:

  • Michael Spelfogel, founder, Cardless
  • Anu Muralidharan, COO, Expensify
  • Peter Hazlehurst, founder and CEO, Synctera
  • Salman Syed, SVP and GM of North America, Marqeta

Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


We’re off on Monday, September 6 to celebrate America’s Labor Day holiday, but we’ll be back with new stories (and a very brief newsletter) on Tuesday morning.

Thanks very much for reading,

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

 

6 tips for establishing your startup’s global supply chain

Image Credits: Suriyapong Thongsawang (opens in a new window) / Getty Images

The barrier to entry for launching hardware startups has fallen; if you can pull off a successful crowdfunding campaign, you’re likely savvy enough to find a factory overseas that can build your widgets to spec.

But global supply chains are fragile: No one expected an off-course container ship to block the Suez Canal for six days. Due to the pandemic, importers are paying almost $18,000 for shipping containers from China today that cost $3,300 a year ago.

After spending a career spinning up supply chains on three continents, Liteboxer CEO Jeff Morin authored a guide for Extra Crunch for hardware founders.

“If you’re clear-eyed about the challenges and apply some rigor and forethought to the process, the end result can be hard to match,” Morin says.

Our favorite startups from YC’s Summer 21 Demo Day, Part 1

Y Combinator’s Summer 21 Demo Day, Part 1

Image Credits: Bryce Durbin / TechCrunch

Twice each year, we turn our attention to Y Combinator’s latest class of aspiring startups as they hold their public debuts.

For YC Summer 2021 Demo Day, the accelerator’s fourth virtual gathering, Natasha Mascarenhas, Alex Wilhelm, Devin Coldewey, Lucas Matney and Greg Kumparak selected 14 favorites from the first day of one of the world’s top pitch competitions.

Virtual events startups have high hopes for after the pandemic

Image Credits: Yuichiro Chino / Getty Images

Few people thought about virtual events before the pandemic struck, but this format has fulfilled a unique and important need for organizations large and small since early 2020. But what will virtual events’ value be as more of the world attempts a return to “normal”?

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 a survey we did in March 2020.

We surveyed:

  • Xiaoyin Qu, founder and CEO, Run The World
  • Rosie Roca, chief customer officer, Hopin
  • Hemant Mohapatra, partner, Lightspeed Venture Partners India
  • Paul Murphy, former investor in Hopin with Northzone (currently co-founder of Katch)

Tracking startup focus in the latest Y Combinator cohort

Alex Wilhelm and Anna Heim wrapped up TechCrunch’s coverage of the summer cohort from Y Combinator’s Demo Day with an evaluation of how the group fared in comparison to their expectations.

They were surprised by the number of startups focusing on no-and low-code software, and pleased by the unanticipated quantity of new companies focusing on space.

“It seems only fair to note that some categories of startup activity simply met our expectations in terms of popularity,” noting delivery-focused startups including dark stores and kitchens.

Popping up less than expected? Crypto and insurtech.

Read on for the whole list of startups that caught the eye of The Exchange.

Use cohort analysis to drive smarter startup growth

Image Credits: erhui1979 / Getty Images

Cohort analysis is what it sounds like: evaluating your startup’s customers by grouping them into “cohorts” and observing their behavior over time.

In a guest column, Jonathan Metrick, the chief growth officer at Sagard & Portage Ventures, offers a detailed example explaining the value of this type of analysis.

Questions? ​​Join us for a Twitter Spaces chat with Metrick on Tuesday, September 7, at 3 p.m. PDT/6 p.m. EDT. For details and a reminder, follow @TechCrunch on Twitter.

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.”

 

Customer experience startup Clootrack raises $4M, helps brands see through their customers’ eyes

By Christine Hall

Getting inside the mind of customers is a challenge as behaviors and demands shift, but Clootrack believes it has cracked the code in helping brands figure out how to do that.

It announced $4 million in Series A funding, led by Inventus Capital India, and included existing investors Unicorn India Ventures, IAN Fund and Salamander Excubator Angel Fund, as well as individual investment from Jiffy.ai CEO Babu Sivadasan. In total, the company raised $4.6 million, co-founder Shameel Abdulla told TechCrunch.

Clootrack is a real-time customer experience analytics platform that helps brands understand why customers stay or churn. Shameel Abdulla and Subbakrishna Rao, who both come from IT backgrounds, founded the company in 2017 after meeting years prior at Jiffstore, Abdulla’s second company that was acquired in 2015.

Clootrack team. Image Credits: Clootrack

Business-to-consumer and consumer brands often use customer satisfaction metrics like Net Promoter Score to understand the customer experience, but Abdulla said current methods don’t provide the “why” of those experiences and are slow, expensive and error-prone.

“The number of channels has increased, which means customers are talking to you, expressing their feedback and what they think in multiple places,” he added. “Word of mouth has gone digital, and you basically have to master the art of selling online.”

Clootrack turns the customer experience data from all of those first-party and third-party touchpoints — website feedback, chat bots, etc. — into granular, qualitative insights that give brands a look at drivers of the experience in hours rather than months so that they can stay on top of fast-moving trends.

Abdulla points to data that show a customer’s biggest driver of brand switch is the experience they receive. And, that if brands can reduce churns by 5%, they could be looking at an increase in profits of between 25% and 95%.

Most of the new funding will go to product development so that all data aggregations are gathered from all possible touchpoints. His ultimate goal is to be “the single platform for B2C firms.”

The company is currently working with over 150 customers in the areas of retail, direct-to-consumer, banking, automotive, travel and mobile app-based services. It is growing nine times year over year in revenue. It is mainly operating in India, but Clootrack is also onboarding companies in the U.S. and Europe.

Parag Dhol, managing director of Inventus, said he has known Abdulla for over five years. He had looked at one of Abdulla’s companies for investment, but had decided against it due to his firm being a Series A investor.

Dhol said market research needs an overhaul in India, where this type of technology is lagging behind the U.S.

“Clootrack has a very complementary team with Shameel being a complete CEO in terms of being a sales guy and serial entrepreneur who has learned his lessons, and Subbu, who is good at technology,” he added. “As CMOs realize the value in their unstructured data inside of their own database of the customer reviews and move to real-time feedback, these guys could make a serious dent in the space.”

 

SimpliFed serves up $500,000 pre-seed toward infant nutrition support

By Christine Hall

Feeding babies can take many different forms, and is also an area where parents can feel less supported as they navigate this new milestone in their lives.

Enter SimpliFed, an Ithaca, New York-based company providing virtual lactation and a baby feeding support platform. The startup announced Friday that it raised $500,000 in pre-seed funding led by Third Culture Capital.

Andrea Ippolito, founder and CEO of SimpliFed. Image Credits: SimpliFed

CEO Andrea Ippolito, a biomedical engineer and mother of two young children, had the idea for SimpliFed three years ago. She struggled with breastfeeding after having her first child and, realizing that she was not alone in this area, set out to figure out a way to get anyone access to information and support for infant feeding.

“Post discharge is when the rubber meets the goal for us,” she told TechCrunch. “This is a huge pain point for Medicaid, and it is not just about increasing access, but providing ongoing support for feeding and the quagmire that is health insurance. We want to help moms reach their infant feeding goals, no matter how they choose to feed, and to figure out what feeding looks like for them.”

The American Academy of Pediatrics recommends that mothers nurse for up to six months. However, the Centers for Disease Control and Prevention estimates that 60% of mothers don’t breastfeed for as long as they intend due to reasons like difficulty lactating or the baby latching, sickness or an unsupportive work environment.

SimpliFed’s platform is a judgement-free zone providing evidence-based information on nutritional health for babies. It isn’t meant to replace typical care that mother and baby will receive before and after delivery, but to provide support when issues arise, Ippolito said. Parents can book a free, initial 15-minute virtual consultation with a lactation expert and then subsequent 60-minute sessions for $100 each. There is also a future membership option for those seeking continuing care.

The new funds will be used to hire additional employees to further develop the telelactation platform and grow the company’s footprint, Ippolito said. The platform is gearing up to go through a clinical study to co-design the program with 1,000 mothers. She also wants to build out relationships with payers and providers toward a longer-term goal of becoming in-network and paid through reimbursement from health plans.

Julien Pham, managing partner at Third Culture Capital, said he met Ippolito at MIT Hacking Medicine a decade ago. A physician by training, he saw first-hand how big of an opportunity it is to demystify providing the best nutrition for babies.

“The U.S. culture has evolved over the years, and millennials are the next-generation moms who have a different ask, and SimpliFed is here at the right time,” Pham said. “Andrea is just a dynamo. We love her energy and how she is at the front line of this as a mother herself — she is most qualified to do this, and we support her.

 

Bangkok-based insurtech Sunday banks $45M Series B from investors like Tencent

By Catherine Shu

Sunday, an insurtech startup based in Bangkok, announced it has raised a $45 million Series B. Investors include Tencent, SCB 10X, Vertex Growth, Vertex Ventures Southeast Asia & India, Quona Capital, Aflac Ventures and Z Venture Capital. The company says the round was oversubscribed, and that it doubled its revenue growth in 2020.

Founded in 2017, Sunday describes itself as a “full-stack” insurtech, which means it handles everything from underwriting to distribution of its policies. Its products currently include motor and travel insurance policies that can be purchased online, and Sunday Health for Business, a healthcare coverage program for employers. Sunday also offers subscription-based smartphone plans through partners.

The company uses AI and machine learning-based technology underwrite its motor insurance and employee health benefits products, and says its data models also allow it to automate pricing and scale its underwriting process for complex risks. Sunday says it currently serves 1.6 million customers.

The new funding will be used to expand in Indonesia and develop new distribution channels, including insurance agents and SMEs.

Insurance penetration is still relatively low in many Southeast Asian markets, including Indonesia, but the industry is gaining traction thanks to increasing consumer awareness. The COVID-19 pandemic also drove interest in financial planning, including investment and insurance, especially health coverage.

Other insurtech startups in Indonesia that have recently raised funding include Lifepal, PasarPolis, Qoala and Fuse.

In a statement, Sunday co-founder and chief executive officer Cindy Kuo said, “Awareness for health insurance will continue to increase and we believe more consumers would be open to shop for insurance online. We plan to expand our platform architecture to offer retail insurance to our health members and partners while we continue to grow our portfolio in Thailand and Indonesia.”

Startups should look to state-of-the-art tech to tackle diseases affecting women

By Annie Siebert
Shahar Keinan Contributor
Shahar Keinan, co-founder and CEO of Polaris Quantum Biotech has over 20 years of extensive experience in computational and theoretical chemistry.
Pek Lum Contributor
Pek Lum, co-founder and CEO at Auransa, has more than 20 years of genomics and drug discovery experience and is the chief architect behind Auransa’s technology.

Startups devoted to reproductive and women’s health are on the rise. However, most of them deal with women’s fertility: birth control, ovulation and the inability to conceive. The broader field of women’s health remains neglected.

Historically, most of our understanding of ailments comes from the perspective of men and is overwhelmingly based on studies using male patients. Until the early 1990s, women of childbearing age were kept out of drug trial studies, and the resulting bias has been an ongoing issue in healthcare. Other issues include underrepresentation of women in health studies, trivialization of women’s physical complaints (which is relevant to the misdiagnosis of endometriosis, among other conditions), and gender bias in the funding of research, especially in research grants.

For example, several studies have shown that when we look at National Institutes of Health funding, a disproportionate share of its resources goes to diseases that primarily affect men — at the expense of those that primarily affect women. In 2019, studies of NIH funding based on disease burden (as estimated by the number of years lost due to an illness) showed that male-favored diseases were funded at twice the rate of female-favored diseases.

Let’s take endometriosis as an example. Endometriosis is a disease where endometrial-like tissue (‘‘lesions’’) can be found outside the uterus. Endometriosis is a condition that only occurs in individuals with uteruses and has been less funded and less studied than many other conditions. It can cause chronic pain, fatigue, painful intercourse and infertility. Although the disease may affect one out of 10 women, diagnosis is still very slow, and the disease is confirmed only by surgery.

There is no non-invasive test available. In many cases, a woman is diagnosed only due to her infertility, and the diagnosis can take up to 10 years. Even after diagnosis, the understanding of disease biology and progression is poor, as well as the understanding of the relationships to other lesion diseases, such as adenomyosis. Current treatments include surgical removal of lesions and drugs that suppress ovarian hormone (mainly estrogen) production.

However, there are changes in the works. The NIH created the women’s health research category in 1994 for annual budgeting purposes and, in 2019, it was updated to include research that is relevant to women only. In acknowledging the widespread male bias in both human and animal studies, the NIH mandated in 2016 that grant applicants would be required to recruit male and female participants in their protocols. These changes are slow, and if we look at endometriosis, it received just $7 million in NIH funding in the fiscal year 2018, putting it near the very bottom of NIH’s 285 disease/research areas.

It is interesting to note that critical changes are coming from other sources, and not so much from the funding agencies or the pharmaceutical industry. The push is coming from patients and physicians themselves that meet the diseases regularly. We see pharmaceutical companies (such as Eli Lilly and AbbVie) in the women’s healthcare space following the lead of their patients and slowly expanding their R&D base and doubling efforts to expand beyond reproductive health into other key women’s health areas.

New technological innovations targeting endometriosis are being funded via private sources. In 2020, women’s health finally emerged as one of the most promising areas of investment. These include (not an exhaustive list by any means) diagnostics companies such as NextGen Jane, which raised a $9 million Series A in April 2021 for its “smart tampon,” and DotLab, a non-invasive endometriosis testing startup, which raised $10 million from investors last July. Other notable advances include the research-study app Phendo that tracks endometriosis, and Gynica, a company focused on cannabis-based treatments for gynecological issues.

The complexity of endometriosis is such that any single biotech startup may find it challenging to go it alone. One approach to tackle this is through collaborations. Two companies, Polaris Quantum Biotech and Auransa, have teamed up to tackle the endometriosis challenge and other women’s specific diseases.

Using data, algorithms and quantum computing, this collaboration between two female-led AI companies integrates the understanding of disease biology with chemistry. Moreover, they are not stopping at in silico; rather, this collaboration aims to bring therapeutics to patients.

New partnerships can majorly impact how fast a field like women’s health can advance. Without such concerted efforts, women-centric diseases such as endometriosis, triple-negative breast cancer and ovarian cancer, to name a few, may remain neglected and result in much-needed therapeutics not moving into clinics promptly.

Using state-of-the-art technologies on complex women’s diseases will allow the field to advance much faster and can put drug candidates into clinics in a few short years, especially with the help of patient advocacy groups, research organizations, physicians and out-of-the-box funding approaches such as crowdfunding from the patients themselves.

We believe that going after the women’s health market is a win-win for the patients as well as from the business perspective, as the global market for endometriosis drugs alone is expected to reach $2.2 billion in the next six years.

Online learning platform CLASS101 bags $26M Series B to support growth

By Kate Park

Everything is switching from offline to online mode, spurred by the pandemic, and that also has turned around things for the creative economy. Creative professionals continue to look for ways to monetize their talents and knowledge through online education platforms like CLASS101 that bring stable incomes and improve opportunities.

CLASS101, a Seoul-based online education platform, announced today it has closed $25.8 million (30 billion won) Series B funding to accelerate its growth in South Korea, the U.S. and Japan.

The Series B round was led by Goodwater Capital, with additional participation from previous backers Strong Ventures, KT Investment, Mirae Asset Capital and Klim Ventures.

In 2019, the company raised a $10.3 million (12 billion won) Series A round led by SoftBank Ventures Asia along with Mirae Asset Venture Investment, KT Investment, Strong Ventures and SpringCamp.

Co-founder and CEO of CLASS101 Monde Ko told TechCrunch that the company will use the proceeds to focus on hiring more talent, as well as expanding domestic business and overseas markets in the U.S. and Japan.

Ko and four other co-founders established CLASS101 in 2018, which was pivoted from a tutoring service platform that was founded in 2015, Ko said. It has 350 employees now.

“We will keep supporting creators to monetize their talents and we will also allow creators to expand their revenue streams by selling their goods, digital files and more products via our platform,” Ko said.

When asked about what differentiated it from other peers, CLASS101 provides and ships all the necessary tools and material “Class Kit”, Ko said.

The company offers more than 2,000 classes within a raft of categories, with drawing, crafts, photography, cooking, music and more. It also provides about 230 classes in the U.S. and 220 classes in Japan. There are approximately 100,000 registered creators and 3 million registered users as of August 2021.

CLASS101 launched its platform in the U.S. in 2019 and entered Japan last year. The company opened online classes for kids aged under 14 in 2020.

“CLASS101 is a company that combines the advantages of Patreon and YouTube, offering tailored support for creators while fulfilling users’ learning needs,” co-founder and managing partner at Goodwater Capital Eric Kim said, adding that it is the fastest growing company “in an economic phenomenon in which individuals follow their passions and do what they really enjoy while also making a living from it.”

Use cohort analysis to drive smarter startup growth

By Ram Iyer
Jonathan Metrick Contributor
Jonathan Metrick is the chief growth officer at Sagard & Portage Ventures, where he helps build some of the world's leading fintech companies.

Cohort analysis is a way of evaluating your business that involves grouping customers into “cohorts” and observing how they behave over time. A commonly used approach is monthly cohort analysis, where customers are grouped by the month they signed up, allowing you to observe how someone who joined in November compares to someone who signed up the month before.

Cohort analysis gives you a multivariable, forward-looking view of your business compared to more simple and static values like averages or totals.

Cohort analysis is flexible and can be used to analyze a variety of performance metrics including revenue, acquisition costs and churn.

Let’s imagine you’re the CMO of the “Bluetooth Coffee Company.” You sell a tech-enabled “coffee composer” that brews coffee, tracks consumption and orders replacement coffee when users are running low. The longer your customers are subscribers, the more money you make. You recently ran a Black Friday feature on a popular deals site and you’re interested to know if you should run it again.

The chart below is a simple analysis you might do to gauge your marketing performance. It shows the total customers added each month, and a clear spike in November following the Black Friday promotion. At first glance, things look good — you brought in more than double the monthly customers in November compared to October.

Marketing campaign results in significant uptick to users added

Image Credits: Sagard & Portage Ventures

But before you rebook the promotion, you should ask if these new Black Friday consumers are as valuable as they seem. Comparing monthly customer percentage is a good way to find out.

Below is a monthly cohort analysis of new customers between September 2020 and February 2021. Like our previous chart, we’ve listed the monthly cohort size, but we’ve also included the customer engagement rate (calculated by dividing daily active users by monthly active users or DAU/MAU for each month (M1 is month 1, M2 is month 2, and so on).

This analysis lets us see how the customer engagement of each monthly cohort compares to the next.

Customer engagement by cohort

Image Credits: Sagard & Portage Ventures

From the figures above, we see that most cohorts have a customer engagement rate in their first month (M1, 42%-46%), meaning 42%-46% of new customers use the coffee composer everyday. The November cohort however has materially lower engagement (M1, 30%), and remains lower in subsequent months (M2, 26%) and (M3, 27%). Interestingly, the customer engagement rate only drops with the November cohort, returning to normal with the December cohort (M1, 45%).

Shepherd raises $6.2M seed round to tackle the construction insurance market

By Alex Wilhelm

Shepherd, an insurtech startup focused on the construction market, has closed a $6.15 million seed round led by Spark Capital. The funding event comes after the startup raised a pre-seed round in February led by Susa Ventures, which also participated in Shepherd’s latest fundraising event.

Thinking broadly, Shepherd fits into a theme of neoinsurance providers selling more to other companies than to consumers. Insurtech startups serving consumers enjoyed years of venture capital backing only to find their public debuts met with early optimism followed quickly by eroding share prices.

But companies like Shepherd — and Blueprint Title earlier this week — are wagering on there being margin elsewhere in the insurance world to attack. For Shepherd, the construction market is its target, an industry that it intends to carve into starting with excess liability coverage.

The company’s co-founder and CEO, Justin Levine, told TechCrunch that contractors in the construction space have a number of insurance requirements, including general liability, commercial auto and so forth. But construction projects often also require more liability coverage, which is sold as excess or umbrella policies.

Targeting the middle-market of the construction space — companies doing $25 million to $250 million in projects per year, in its view — Shepherd wants to lean on technology as a way to help underwrite customers.

Levine said that his company’s offering will have two core parts. The first is what you expected, namely a complete digital experience for customers. The CEO likened its digital offering to table stakes for the insurtech world. We agree. But the company gets more interesting when we consider its second half, namely its work to partner with construction tech providers to help it make underwriting decisions.

The startup has partnered with Procore, for example, a company that invested in its business.

The concept of leaning on third-party software companies to help make underwriting decisions makes some sense — companies that are more technology-forward in terms of adopting new techniques and methods won’t have the same underwriting profile as companies that don’t. Generally, more data makes for better underwriting decisions; linking to the software that helps construction companies function makes good sense from that perspective.

The CEO of Procore agrees, telling TechCrunch that an early customer of his business said that its product is “a risk management solution disguised as construction management software.” The more risk that is managed, the lower Shepherd’s loss ratios may prove over time, allowing it to better compete on price.

On the subject of price, Levine thinks that the construction insurance market is suffering at the moment. Rising settlement costs have led to some legacy insurance books in the space with larger-than-anticipated losses, pushing some providers to raise prices. Levine’s view is that that Shepherd’s ability to enter its market without a legacy book of business will help it offer competitive rates.

Excess liability coverage is the “wedge” that Shepherd intends to use to get into the construction insurance market, it said, with intention of launching other products in time. The startup is attacking excess liability coverage first, its CEO said, because it’s the place of maximum pain in the larger construction insurance market.

Frankly, TechCrunch finds the B2B neoinsurance startup market fascinating. Selling policies to consumers has a particular set of cost of goods sold (COGS) — varying based on the type of coverage, of course — and often stark go-to-market costs. Furthermore, customer acquisition costs (CACs) can prove irksome when going up against national brands with huge budgets. Perhaps the business insurance market will prove more lucrative for upstart tech companies. Venture investors are certainly willing to place that particular wager.

Natalie Sandman led the deal for Spark, telling TechCrunch that when she first encountered Shepherd it was working on a different project, but that when it shifted its focus, it struck a chord with her firm. The investor said that the idea of bringing new data to the construction insurance underwriting process may help the company make smarter decisions. In the insurance world, better underwriting choices mean more profitable coverage. Which means greater future cash flows. And we all know that that means for value creation.

Botify raises $55 million to optimize search engine indexing

By Romain Dillet

Botify has raised a $55 million Series C funding round led by InfraVia Growth with Bpifrance’s Large Venture fund also participating. The company has created a search engine optimization (SEO) platform so that your content is better indexed and appears more often in search results.

Existing investors Eurazeo and Ventech are also investing in the startup once again. Nicolas Herschtel from InfraVia and Antoine Izsak from Bpifrance will join the board of directors. Valuation has tripled since the company’s previous funding round.

While there are a ton of good and bad practices in the SEO industry, Botify defines itself as “white-hat company”. They respect the terms of services of search engines, they don’t scrape search results for insights, they don’t create shady backlinks on other websites.

“We’re going to optimize every step of the search funnel from first the quality of the website, how it is designed, how is the content going to be enriched with, etc.” co-founder and CEO Adrien Menard told me.

There are now three different components in the Botify product suite. The startup first released an analytics tool that gives you insights about your website. Basically, it lets you see how a crawler analyzes your site.

The company then released Botify Intelligence, which hands you a prioritized todo list of things you can do to improve your SEO strategy. And now, the company is also working on automation with Botify Activation. When Google’s search engine bot queries your site, Botify can take over and answer requests directly.

“We’re not trying to trick Google’s algorithm. We’re defining Botify as the interface between search engines and our clients’ websites. Search engines are going to access higher quality content. And it’s probably cheaper than with a normal process,” Menard said.

Companies aren’t necessarily using all three tools. They may start with analytics and take it from there. “You can use different products depending on the size of the company,” Menard said.

Over the past few years, Google has increased the number of ad slots on search results. It also promotes its own services, such as YouTube and Google Maps, before you can see the organic search results. I asked Adrien Menard whether that could be a concern for the future of Botify.

“I agree with you that we’re seeing more and more sections of the search results coming from first-party or paid results,” he said. “But the traffic generated by organic results is growing. It represents 30% of the traffic of the websites of our customers and this average is not decreasing.”

According to him, search keeps getting bigger and bigger. When you invest in search, you can see a clear return on investment when it comes to online sales, traffic, etc.

Right now, Botify has 500 customers, such as Expedia, L’Oréal, The New York Times, Groupon, Marriott, Condé Nast, Crate & Barrel, Fnac Darty, Vestiaire Collective and Farfetch.

With today’s funding round, the company wants to improve its automation capabilities, sign partnerships with more tech companies and increase its footprint with new offices in the Asia-Pacific region.

Fintech startup Jeeves raises $57M, goes from YC to $500M valuation in one year

By Mary Ann Azevedo

Last summer, Jeeves was participating in Y Combinator’s summer batch as a fledgling fintech.

This June, the startup emerged from stealth with $31 million in equity and $100 million in debt financing. 

Today, the company, which is building an “all-in-one expense management platform” for global startups, is announcing that it has raised a $57 million Series B at a $500 million valuation. That’s up from a valuation of just north of $100 million at the time of Jeeves’ Series A, which closed in May and was announced in early June.

While the pace of funding these days is unlike most of us have ever seen before, it’s pretty remarkable that Jeeves essentially signed the term sheet for its Series B just two months after closing on its Series A. It’s also notable that just one year ago, it was wrapping up a YC cohort.

Jeeves was not necessarily looking to raise so soon, but fueled by its growth in revenue and spend after its Series A, which was led by Andreessen Horowitz (a16z), the company was approached by dozens of potential investors and offered multiple term sheets, according to CEO and co-founder Dileep Thazhmon. Jeeves moved forward with CRV, which had been interested since the A and built a relationship with Thazhmon, so it could further accelerate growth and launch in more countries, he said.

CRV led the Series B round, which also included participation from Tencent, Silicon Valley Bank, Alkeon Capital Management, Soros Fund Management and a high-profile group of angel investors including NBA stars Kevin Durant and Andre Iguodala, Odell Beckham Jr. and The Chainsmokers. Notably, the founders of a dozen unicorn companies also put money in the Series B including (but not limited to) Clip CEO Adolfo Babatz; QuintoAndar CEO Gabriel Braga; Uala CEO Pierpaolo Barbieri, BlockFi CEO Zac Prince; Mercury CEO Immad Akhund; Bitso founder Pablo Gonzalez; Monzo Bank’s Tom Blomfield; Intercom founder Des Traynor; Lithic CEO Bo Jiang as well as founders from UiPath, Auth0, GoCardless, Nubank, Rappi, Kavak and others.

Whew.

The “fully remote” Jeeves describes itself as the first “cross country, cross currency” expense management platform. The startup’s offering was live in Mexico and Canada and today launched in Colombia, the United Kingdom and Europe as a whole. 

Thazhmon and Sherwin Gandhi founded Jeeves last year under the premise that startups have traditionally had to rely on financial infrastructure that is local and country-specific. For example, a company with employees in Mexico and Colombia would require multiple vendors to cover its finance function in each country — a corporate card in Mexico and one in Colombia and another vendor for cross-border payments.

Jeeves claims that by using its platform’s proprietary Banking-as-a-Service infrastructure, any company can spin up their finance function “in minutes” and get access to 30 days of credit on a true corporate card (with 4% cash back), non card payment rails, as well as cross-border payments. Customers can also pay back in multiple currencies, reducing FX (foreign transaction) fees.

For example, a growing business can use a Jeeves card in Barcelona and pay it back in euros and use the same card in Mexico and pay it back in pesos, reducing any FX fees and providing instant spend reconciliation across currencies. 

Thazhmon believes that the “biggest thing” the company is building out is its own global BaaS layer, that sits across different banking entities in each country, and onto which the end user customer-facing Jeeves app plugs into.

Put simply, he said, “think of it as a BaaS platform, but with only one app — the Jeeves app — plugged into it.”

Image Credits: Jeeves

The startup has grown its transaction volume (GTV) by more than 5,000% since January, and both revenue and spend volume has increased more than 1,100% (11x) since its Series A earlier this year, according to Thazhmon.

Jeeves now covers more than 12 currencies and 10 countries across three continents. Mexico is its largest market. Jeeves is currently beta testing in Brazil and Chile and Thazhmon expects that by year’s end, it will be live in all of North America and Europe. Next year, it’s eyeing the Asian market, and Tencent should be able to help with that strategically, he said.

“We’re building an all-in-one expense management platform for startups in LatAm and global markets — cash, corporate cards, cross-border — all run on our own infrastructure,” Thazhmon told TechCrunch. “Our model is very similar to that of Uber’s launch model where we can launch very quickly because we don’t have to rebuild an entire infrastructure. When we launch in countries, we actually don’t have to rebuild a stack.”

Jeeves’ user base has been doubling every 60 days and now powers more than 1,000 companies across LatAm, Canada and Europe, including Bitso, Kavak, RappiPay, Belvo, Runa, Moons, Convictional, Muncher, Juniper, Trienta, Platzi, Worky and others, according to Thazhmon. The company says it has a current waitlist of over 15,000.

Jeeves plans to use its new capital toward its launch in Colombia, the U.K. and Europe. And, of course, toward more hiring. It’s already doubled its number of employees to 55 over the past month.

Former a16z partner Matt Hafemeister was so impressed with what Jeeves is building that in August he left the venture capital firm to join the startup as its head of growth. In working with the founders as an investor, he concluded that they ranked “among the best founders in fintech” he’d ever interacted with.

The decision to leave a16z also related to Jeeves’ inflection point, Hafemeister said. The startup is nearly doubling every month, and had already eclipsed year-end goals on revenue by mid-year.

It is evident Jeeves has found early product market fit and, given the speed of execution, I see Jeeves establishing itself as one of the most important fintech companies in the next few years,” Hafemeister told TechCrunch. “The company is transitioning from a seed company to a Series B company very quickly, and being able to help operationalize processes and play a role in their growth and maturity is an incredible opportunity for me.”

CRV General Partner Saar Gur (who is also an early investor in DoorDash, Patreon and Mercury) said he was blown away by Jeeves’ growth and how it has been “consistently hitting and exceeding targets month over month.” Plus, early feedback from customers has been overwhelmingly positive, Gur said.

“Jeeves is building products and infrastructure that are very difficult to execute but by doing the ‘hard things’ they offer incredible value to their customers,” he told TechCrunch. “We haven’t seen anyone build from the ground up with global operations in mind on day one.”

Panorama raises $60M in General Atlantic-led Series C to help schools better understand students

By Mary Ann Azevedo

Panorama Education, which has built out a K-12 education software platform, has raised $60 million in a Series C round of funding led by General Atlantic.

Existing backers Owl Ventures, Emerson Collective, Uncork Capital, the Chan Zuckerberg Initiative and Tao Capital Partners also participated in the financing, which brings the Boston-based company’s total raised since its 2012 inception to $105 million.

Panorama declined to reveal at what valuation the Series C was raised, nor did it provide any specific financial growth metrics. CEO and co-founder Aaron Feuer did say the company now serves 13 million students in 23,000 schools across the United States, which means that 25% of American students are enrolled in a district served by Panorama today. 

Over 50 of the largest 100 school districts and state agencies in the country use its platform. In total, more than 1,500 school districts are among its customers. Clients include the New York City Department of Education, Clark County School District in Nevada, Dallas ISD in Texas and the Hawaii Department of Education, among others.

Since March 2020, Panorama has added 700 school districts to its customer base, nearly doubling the 800 it served just 18 months prior, according to Feuer.

Just what does Panorama do exactly? In a nutshell, the SaaS business surveys students, parents and teachers to collect actionable data. Former Yale graduate students Feuer and Xan Tanner started the company in an effort to figure out the best way for schools to collect and understand feedback from their students.

With the COVID-19 pandemic leading to many students attending school virtually, the need to address students’ social and emotional needs has probably never been more paramount. Many children and teenagers have suffered depression and anxiety due to being isolated from their peers, and some believe the impact on their mental health has been even greater than any negative academic repercussions.

Students, for example, are asked questions to determine how safe they feel at school, how much they trust their teachers and how much potential they think they have.

“We help schools survey students, teachers and parents to understand the environment and experiences of the school,” Feuer told TechCrunch. “And then we help schools measure social and emotional development so that in the same way you might have rigorous data on math, you can now get information about social emotional learning and well-being.”

In the past year, for example, 25 million people across the country have taken a Panorama survey, which has resulted in quite a bit of information. The company is able to integrate with all of a district’s existing data systems so that it can pull together a “panorama” of its data, plus the information about a student.

“It’s really powerful because a teacher can then log in and see everything about a student in one place,” Feuer said. “But most importantly, we give teachers the tools to plan actions for a student.”

The company claims that by using its software, districts can see benefits such as improved graduation rates, fewer behavior referrals, more time engaged in learning and students building “stronger supportive relationships with adults and peers.”

Panorama plans to use its new capital toward continued product development, further deepening its district partnerships and naturally, toward hiring. Panorama currently has about 250 employees.

Notably, Panorama had not raised capital in a couple of years simply because, according to Feuer, it did not need the money.

“We met General Atlantic and realized the opportunity to reach the next level of impact for our schools,” he told TechCrunch. “But it was important to me that we didn’t need to raise the money. We chose to because we want to be able to invest in the business.”

Tanzeen Syed, managing director at General Atlantic, said edtech has been an important area of focus for this firm.

“When we looked at the U.S. education system, we thought that there was a massive opportunity and that we’re in the very early innings of using software and technology to really enhance the student experience,” he said.

When it came to Panorama, he believes “it’s not just a business” for the company.

“They truly and deeply care about providing students and administrators with the tools to make the student experience better,” Syed told TechCrunch. “And they’re maniacally focused on developing the sort of product to allow them to do that. In addition to that, we spoke with a lot of schools and districts and the feedback came back consistently positive.”

Tracking startup focus in the latest Y Combinator cohort

By Anna Heim

First, some housekeeping: Thanks to our new corporate parents, TechCrunch has the day off tomorrow, so consider this the last chapter of The Exchange for this week. (The newsletter will go out Saturday as always.) Also, Alex is off next week. Anna is taking on next week’s newsletter and may have a column or two on deck as well.

But before we slow down for a few days, let’s chat about the most recent Y Combinator Demo Day in thematic detail.

If you caught the last few Equity episodes, some of this will be familiar, but we wanted to put a flag in the ground for later reference as we cover startups for the rest of the year.


The Exchange explores startups, markets and money.

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


What follows is a roundup of trends among Y Combinator startups and how they squared with our expectations.

A big thanks to the TechCrunch crew who covered the startup deluge live, and Natasha and Christine for helping build out our notes during our last few Twitter Spaces. Let’s talk trends!

More than expected

In a group of nearly 400 startups, you might think it’d be hard to find a category that felt overrepresented, but we’ve managed.

To start, we were surprised by the sheer number of startups in the cohort that were pursuing software models that incorporated no-code and low-code techniques. We expected some, surely, but not the nearly 20 that we compiled this morning.

Startups in the YC batch are building no-code and low-code tools to help developers build faster internal workflows (Tantl), build branded real estate portals (Noloco), sync data between other no-code tools (Whalesync), automate HR (Zazos), and more. Also in the mix were BrightReps, Beau, Alchemy, Hyperseed, Enso, HitPay, Whaly, Muse, Abstra, Lago, Inai and Breadcrumbs.io.

At least 18 companies in the group name-dropped no- and low-code in their pitches. They are taking on a host of industries, from finance and real estate to sales and HR. In short, no- and low-code tools are cropping up in what feels like every sector. It appears that the startup world has decided that helping non-developers build their own tools, workflows and apps is a trend here to stay.

Explosion snags $6M on $120M valuation to expand machine learning platform

By Ron Miller

Explosion, a company that has combined an open source machine learning library with a set of commercial developer tools, announced a $6 million Series A today on a $120 million valuation. The round was led by SignalFire, and the company reported that today’s investment represents 5% of its value.

Oana Olteanu from SignalFire will be joining the board under the terms of the deal, which includes warrants of $12 million in additional investment at the same price.

“Fundamentally, Explosion is a software company and we build developer tools for AI and machine learning and natural language processing. So our goal is to make developers more productive and more focused on their natural language processing, so basically understanding large volumes of text, and training machine learning models to help with that and automate some processes,” company co-founder and CEO Ines Montani told me.

The company started in 2016 when Montani met her co-founder, Matthew Honnibal in Berlin where he was working on the spaCy open source machine learning library. Since then, that open source project has been downloaded over 40 million times.

In 2017, they added Prodigy, a commercial product for generating data for the machine learning model. “Machine learning is code plus data, so to really get the most out of the technologies you almost always want to train your models and build custom systems because what’s really most valuable are problems that are super specific to you and your business and what you’re trying to find out, and so we saw that the area of creating training data, training these machine learning models, was something that people didn’t pay very much attention to at all,” she said.

The next step is a product called Prodigy Teams, which is a big reason the company is taking on this investment. “Prodigy Teams  is [a hosted service that] adds user management and collaboration features to Prodigy, and you can run it in the cloud without compromising on what people love most about Prodigy, which is the data privacy, so no data ever needs to get seen by our servers,” she said. They do this by letting the data sit on the customer’s private cluster in a private cloud, and then use Prodigy Team’s management features in the public cloud service.

Today, they have 500 customers using Prodigy including Microsoft and Bayer in addition to the huge community of millions of open source users. They’ve built all this with just 17 people, even as they continue to slowly add employees, expecting to reach 20 by the end of the year.

She believes if you’re thinking too much about diversity in your hiring process, you probably have a problem already. “If you go into hiring and you’re thinking like, oh, how can I make sure that the way I’m hiring is diverse, I think that already shows that there’s maybe a problem,” she said.

“If you have a company, and it’s 50 dudes in their 20s, it’s not surprising that you might have problems attracting people who are not white dudes in their 20s. But in our case, our strategy is to hire good people and good people are often very diverse people, and again if you play by the [startup] playbook, you could be limited in a lot of other ways.”

She said that they have never seen themselves as a traditional startup following some conventional playbook. “We didn’t raise any investment money [until now]. We grew the team organically, and we focused on being profitable and independent [before we got outside investment],” she said.

But more than the money, Montani says that they needed to find an investor that would understand and support the open source side of the business, even while they got capital to expand all parts of the company. “Open source is a community of users, customers and employees. They are real people, and [they are not] pawns in [some] startup game, and it’s not a game. It’s real, and these are real people,” she said.

“They deserve more than just my eyeballs and grand promises. […] And so it’s very important that even if we’re selling a small stake in our company for some capital [to build our next] product [that open source remains at] the core of our company and that’s something we don’t want to compromise on,” Montani said.

All the reasons why you should launch a credit or debit card

By Ryan Lawler

Over the previous two or three years we’ve seen an explosion of new debit and credit card products come to market from consumer and B2B fintech startups, as well as companies that we might not traditionally think of as players in the financial services industry.

On the consumer side, that means companies like Venmo or PayPal offering debit cards as a new way for users to spend funds in their accounts. In the B2B space, the availability of corporate card issuing by startups like Brex and Ramp has ushered in new expense and spend management options. And then there is the growth of branded credit and debit cards among brands and sports teams.

But if your company somehow hasn’t yet found its way to launch a debit or credit card, we have good news: It’s easier than ever to do so and there’s actual money to be made. Just know that if you do, you’ve got plenty of competition and that actual customer usage will probably depend on how sticky your service is and how valuable the rewards are that you offer to your most active users.

To learn more about launching a card product, TechCrunch spoke with executives from Marqeta, Expensify, Synctera and Cardless about the pros and cons of launching a card product. So without further ado, here are all the reasons you should think about doing so, and one big reason why you might not want to.

Because it’s (relatively) easy

Probably the biggest reason we’ve seen so many new fintech and non-fintech companies rush to offer debit and credit cards to customers is simply that it’s easier than ever for them to do so. The launch and success of businesses like Marqeta has made card issuance by API developer friendly, which lowered the barrier to entry significantly over the last half-decade.

“The reason why this is happening is because the ‘fintech 1.0 infrastructure’ has succeeded,” Salman Syed, Marqeta’s SVP and GM of North America, said. “When you’ve got companies like [ours] out there, it’s just gotten a lot easier to be able to put a card product out.”

While noting that there have been good options for card issuance and payment processing for at least the last five or six years, Expensify Chief Operating Officer Anu Muralidharan said that a proliferation of technical resources for other pieces of fintech infrastructure has made the process of greenlighting a card offering much easier over the years.

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