More than two years after Julie Bornstein–Stitch Fix’s former chief operating officer–mysteriously left the subscription-based personal styling service only months before its initial public offering, she’s taking the wraps off her first independent venture.
Shortly after departing Stitch Fix, Bornstein began building The Yes, an AI-powered shopping platform expected to launch in the first half of 2020. She’s teamed up with The Yes co-founder and chief technology officer Amit Aggarwal, who’s held high-level engineering roles at BloomReach and Groupon, and most recently, served as an entrepreneur-in-residence at Bain Capital Ventures, to “rewrite the architecture of e-commerce.”
“This is an idea I’ve been thinking about since I was 10 and spending my weekends at the mall,” Bornstein, whose resume includes chief marketing officer & chief digital officer at Sephora, vice president of e-commerce at Urban Outfitters, VP of e-commerce at Nordstrom and director of business development at Starbucks, tells TechCrunch. “All the companies I have worked at were very much leading in this direction.”
Coming out of stealth today, the team at The Yes is readying a beta mode to better understand and refine their product. Bornstein and Aggarwal have raised $30 million in venture capital funding to date across two financings. The first, a seed round, was co-led by Forerunner Ventures’ Kirsten Green and NEA’s Tony Florence. The Series A was led by True Ventures’ Jon Callaghan with participation from existing investors. Bornstein declined to disclose the company’s valuation.
“AI and machine learning already dominate in many verticals, but e-commerce is still open for a player to have a meaningful impact,” Callaghan said in a statement. “Amit is leading a team to build deep neural networks that legacy systems cannot achieve.”
Bornstein and Aggarwal withheld many details about the business during our conversation. Rather, the pair said the product will speak for itself when it launches next year. In addition to being an AI-powered shopping platform, Bornstein did say The Yes is working directly with brands and “creating a new consumer shopping experience that helps address the issue of overwhelm in shopping today.”
As for why she decided to leave Stitch Fix just ahead of its $120 million IPO, Bornstein said she had an epiphany.
“I realized that technology had changed so much, meanwhile … the whole framework underlying e-commerce had remained the same since the late 90s’ when I helped build Nordstrom.com,” she said. “If you could rebuild the underlying architecture and use today’s technology, you could actually bring to life an entirely new consumer experience for shopping.”
The Yes, headquartered in Silicon Valley and New York City, has also brought on Lisa Green, the former head of industry, fashion and luxury at Google, as its senior vice president of partnerships, and Taylor Tomasi Hill, whose had stints at Moda Operandi and FortyFiveTen, as its creative director. Other investors in the business include Comcast Ventures and Bain Capital Ventures
SoftBank, a long-time WeWork investor, plans to invest between $4 billion and $5 billion in exchange for new and existing shares, according to CNBC . The deal, expected to be announced as soon as tomorrow, represents a lifeline for WeWork, which is said to be mere weeks from running out of cash and has been shopping several of its assets as it attempts to lessen its cash burn.
WeWork declined to comment.
To be clear, it is reportedly the Vision Fund’s parent company, SoftBank Group Corp. that is taking control, with SoftBank International chief executive officer Marcelo Claure stepping in to support company management, per reports.
The Japanese telecom giant’s move comes precisely four weeks after co-founder and former CEO Adam Neumann relinquished control of the company and transitioned into a non-executive chairman role, and about three weeks after WeWork decided to delay its highly anticipated initial public offering. WeWork’s vice chairman Sebastian Gunningham and the company’s president and chief operating officer Artie Minson are currently serving as WeWork’s co-CEOs.
In addition to those personnel shake-ups, WeWork has lost its communications chief, Jimmy Asci, its chief marketing officer, Robin Daniels and several others. Meanwhile, the company has slashed hundreds of jobs, and opted to shut down its school, WeGrow, in 2020.
Now expected to go public in 2020, WeWork was also said to be in negotiations with JPMorgan for a last-minute cash infusion. The company, now a cautionary tale, will surely continue to reduce the sky-high costs of its money-losing operation in the upcoming months.
WeWork revealed an unusual IPO prospectus in August after raising more than $8 billion in equity and debt funding. Despite financials that showed losses of nearly $1 billion in the six months ending June 30, the company still managed to accumulate a valuation as high as $47 billion, largely as a result of Neumann’s fundraising abilities.
“As co-founder of WeWork, I am so proud of this team and the incredible company that we have built over the last decade,” Neumann said in a statement confirming his resignation last month. “Our global platform now spans 111 cities in 29 countries, serving more than 527,000 members each day. While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive. Thank you to my colleagues, our members, our landlord partners, and our investors for continuing to believe in this great business.”
In China, Toutiao is literally big news.
Not only has its parent company ByteDance achieved a $75 billion valuation, two of its apps — Toutiao, a news aggregator, and Douyin (Tik Tok in China) — are chipping into WeChat’s user engagement numbers, no small feat considering the central role WeChat plays in the daily lives of the region’s smartphone users.
The success of Toutiao (its name means “headline”) prompts the question: why hasn’t one news aggregator app achieved similar success in the United States? There, users can pick from a roster of news apps, including Google News, Apple News (on iOS), Flipboard, Nuzzel and SmartNews, but no app is truly analogous to Toutiao, at least in terms of reach. Many readers still get news from Google Search (not the company’s news app) and when they do use an app for news, it’s Facebook.
The top social media platform continues to be a major source of news for many Americans, even as they express reservations about the reliability of the content they find there. According to research from Columbia Journalism Review, 43% of Americans use Facebook and other social media platforms to get news, but 57% said they “expect the news they see on those platforms to be largely inaccurate.” Regardless, they stick with Facebook because it’s timely, convenient and they can share content with friends and read other’s comments.
The social media platform is one of the main reasons why no single news aggregator app has won over American users the same way Toutiao has in China, but it’s not the only one. Other factors, including differences between how the Internet developed in each country, also play a role, says Ruiwan Xu, the founder and CEO of CareerTu, an online education platform that focuses on data analytics, digital marketing and research.
While Americans first encountered the Internet on PCs and then shifted to mobile devices, many people in China first went online through their smartphones and the majority of the country’s 800 million Internet users access it through mobile. This makes them much more open to consuming content — including news and streaming video — on mobile.
The founder of one of 2019’s most buzzworthy startups is putting on his VC hat.
Rahul Vohra, the creator of the $30/month subscription emailing service Superhuman, and Todd Goldberg, the founder of the marketing business Mailjoy, are circulating a pitch deck to potential limited partners, with plans to raise a $4 million debut angel fund, TechCrunch has learned.
Goldberg declined to comment. Vohra did not respond to a request for comment.
San Francisco-based Superhuman has raised millions in venture capital funding, attracting a $260 million valuation with a $33 million investment led by the respected firm Andreessen Horowitz earlier this year. Quickly, Superhuman developed a loyal fan base and inspired a new wave of startups building for the “prosumer.”
“Superhuman has become an aspirational brand and product that many SaaS companies want to emulate,” Vohra and Goldberg write in the deck, obtained by TechCrunch. “Founders of these companies seek out Rahul as an investor. This helps us get into the hottest rounds — even the closed ones.”
Vohra and Goldberg have been seeding startups for the past four years, according to the deck. Both men have completed the Y Combinator startup accelerator and funded other graduates of the program, including Tandem, which emerged from YC this summer with funding from a16z, Vohra and several others. One or both of the pair have also invested in Command E, a tool that enables instant cloud search; Mercury, a bank tailored to the needs of startups; and Sandbox VR, which is developing premium virtual reality experiences in retail locations.
Many of Vohra and Goldberg’s existing investments, such as Sandbox VR, Tandem and Mercury, are also a16z portfolio companies, as is Superhuman. We’re guessing Vohra has served as a sort of scout for the firm, bringing in attractive deals for a16z to lead, with room for him to nab a friendly allocation.
Vohra and Goldberg are hoping to collect capital from LPs to scale their investment activity. According to the deck, they will make 25 to 35 deals with check sizes ranging between $50,000 to $150,000. The fund will invest in the “prosumerization” of the enterprise, business infrastructure, health, fitness & wellness, “devsumer” & low-code/no-code, audio-first products, creator tools and “enterprization” of consumers.
Indeed, the deck is packed with buzzwords. The “prosumerization” of the enterprise is tech-speak for work products with nicer interfaces and more premium features. A “devsumer” tool is one that enables consumers to complete developer tasks on their own, i.e. without coding — devsumer products on the market include Airtable, Notion and Retool. Finally, the “enterprization” of consumers simply means the rise of business tools built for consumers first.
Vohra and Goldberg cite their experience as operators as one of their “unfair advantages,” along with their ability to secure large allocations (a decent piece of the pie) in startups, their YC network, relationships with other angels & funds and their ability to get pro rata access in later rounds.
Founders often search for established operators to join their cap tables for exactly these reasons. Someone like Vohra can help startups foster relationships with big-name venture capital backers and make critical introductions to their own rapidly growing pool of customers.
The rise of micro-funds led by networked entrepreneurs, including Niv Dror’s Shrug Capital or Brianne Kimmel’s new outfit, Work Life Ventures, for example, could pose a threat to existing institutional seed investors, who may not be as well-versed in specific sectors or able to offer as much time to potential founders. On the other hand, many micro-funds co-invest with or are backed by VCs, which means returns from the fund end up in the same pockets, in essence.
Deploying capital from a fund, however, is time consuming. How Vohra can balance building a Series B startup and investing in upwards of 35 businesses remains to be seen.
Though Superhuman was founded in 2014 — Vohra incorporated the business immediately after the LinkedIn acquisition of his previous startup, Rapportive — the company is essentially still in closed beta (those looking for access must be approved for the service in iOS’s TestFlight, where constant beta updates are delivered). Today, it’s popular in the Bay Area tech scene where the tagline “sent via Superhuman” has become a status symbol of sorts. But many are uncertain non-techies will be willing to shell out $30 per month for a luxury email tool.
With that said, Superhuman has a wait list of 180,000 people, according to The New York Times, which spoke to Vohra in June. With a large and growing valuation, an email tool with rave reviews and a set of loyal followers, Vohra will likely have no trouble navigating his way into Silicon Valley’s hottest deals.
Microsoft wants to make it as easy as possible to migrate to Microsoft 365, and today the company announced it had purchased a Canadian startup called Mover to help. The companies did not reveal the acquisition price.
Microsoft 365 is the company’s bundle that includes Office 365, Microsoft Teams, security tools and workflow. The idea is to provide customers with a soup-to-nuts, cloud-based productivity package. Mover helps customers get files from another service into the Microsoft 365 cloud.
As Jeff Tepper wrote in a post on the Official Microsoft Blog announcing the acquisition, this about helping customers get to the Microsoft cloud as quickly and smoothly as possible. “Today, Mover supports migration from over a dozen cloud service providers — including Box, Dropbox, Egnyte, and Google Drive — into OneDrive and SharePoint, enabling seamless file collaboration across Microsoft 365 apps and services, including the Office apps and Microsoft Teams,” Tepper wrote.
Tepper also points out that they will be gaining the expertise of the Mover team as it moves to Microsoft and helps add to the migration tools already in place.
Tony Byrne, founder and principal analyst at Real Story Group, says that moving files from one system to another like this can be extremely challenging regardless of how you do it, and the file transfer mechanism is only part of it. “The transition to 365 from an on-prem system or competing cloud supplier is never a migration, per se. It’s a rebuild, with a completely different UX, admin model, set of services, and operational assumptions all built into the Microsoft cloud offering,” Byrne explained.
Mover is based in Calgary, Canada. It was founded in 2012 and raised $1 million, according to Crunchbase data. It counts some big clients as customers including AutoDesk, Symantec and BuzzFeed.
One ongoing theme in the world of smart homes has been the emergence of gadgets and other tools that can turn “ordinary” objects and systems into “connected” ones — removing the need to replace things wholesale that still essentially work, while still applying technology to improve the ways that they can be used.
In the latest development, a smart home startup from Santa Barbara called Shine Bathroom has raised $750,000 in seed funding to help build and distribute its first product: an accessory that you attach to an existing toilet to make it a “smart toilet.”
It’s a dirty business, but someone had to do it.
Shine’s immediate goal is to flush away the old, ecologically unfriendly way of cleaning toilets; and to provide the tools to detect when something is not working right in the plumbing, even helping you fix it without calling out a plumber.
The longer-term vision is to apply technology and science to rethink the whole bathroom to put less strain on our natural resources, and to use it in a way that lines up with what we want to do as consumers, using this first product to test that market.
“Bathrooms are evolving from places where we practice basic hygiene to where we prepare ourselves for the day,” said Chris Herbert, the founder and CEO of Shine. “Wellness and self care will be happening more in the home, and this is a big opportunity.”
Shine’s first injection of money is coming from two VCs also based in Southern California: Entrada Ventures (like Shine also in Santa Barbara), and Mucker Capital, an LA fund specifically backing startups not based in Silicon Valley (others in its current porfolio include Naritiv, Everipedia and Next Trucking).
The Shine Bathroom Assistant, as the first product is called, is currently being sold via Indiegogo starting at $99, with the first products expected to ship in February 2020.
It’s a fitting challenge for a hardware entrepreneur: toilets are a necessary part of our modern lives, but they are unloved, and they haven’t really been innovated for a long time.
Herbert admitted to me (and I’m sure Freud would have something to say here, too) that this has been something of a years-long obsession, stretching back to when he made a trip to Japan as a sophomore in high school and was struck by how companies like Toto were innovating in the business, with fancy, all-cleaning (and all-singing and dancing) loos.
“We thought to ourselves, how could we make a better bathroom?” he said. “We decided that the answer was through software. When you take a thesis like that, you can see lots of opportunity.”
Sized similar to an Amazon Echo or other connected home speaker, Shine’s toilet attachment is battery operated and comes in three parts: a water vessel, a sensor and spraying nozzle that you place inside your toilet bowl, and a third sensor fitted with an accelerometer that you attach to the main line that fills up the toilet’s tank. The vessel is filled with tap water (which you replace periodically).
That water is passed through a special filter that electrolyzes it (by sending a current through the water) and then sprays it with every flush to clean and deodarize. Shine claims this spraying technique is five times as powerful as traditional deodarizing spray, and as powerful as bleach, but without the harsh chemicals: the water converts back into saline after it does its work. (And to be clear, there are no soaps or other detergents involved.)
Alongside the cleaning features, the second part of the bathroom assistant is Sam, an AI on your phone. Linked up to the hardware and sensors, Sam identifies common toilet problems, such as leaks that trickle out hundreds of gallons of water, by measuring variations in vibrations, and when it does, it sends out a free repair kit to fix it yourself.
Users can also link up Sam to work with Alexa to order the machine to clean, check water levels, and do more in future.
The solution of monitoring vibrations is notable for how it links up with a past entrepreneurial life for Herbert and some of his team.
Herbert was one of two co-founders of Trackr, a Tile-like product that also played on the idea of making “dumb” objects smart: Trackr’s basic product was a small fob with Bluetooth inside it that could be attached to keys, wallets, bags and more to find their location when they were misplaced.
The company’s longer term goals extended into the area of IoT and how “dumb” machines could be made smarter by attaching sensors to them to monitor vibrations and sounds to determine how they were working — concepts that never materialised at Trackr but have found a new life at Shine.
On the other hand, Trackr is a cautionary tale about how a good idea can be inspiring, but not always enough.
The startup in its time raised more than $70 million, from a set of investors that included Amazon, Revolution, NTT, the Foundry Group and more. Ultimately, the basic concept was too commoditized (trackers are a dime a dozen on Amazon), Tile emerged as the market leader among the independents — a position it’s used to evolve its product — but even so, that’s before we’ve even determined if there really is a profitable business to be had here, and if platform companies potentially make their move to upset it in a different way.
Eventually, Trackr’s team (including Herbert) scattered and a new leadership team came in and rebranded to Adero . Now, even that team is gone, with the CEO Nate Kelly and others decamping to Glowforge. Multiple attempts to contact the company have been unanswered, although from what we understand, it’s not down for the count just yet. (Watch this space.)
“There is still something there, and I hope they can do something,” Herbert said of his previous startup.
Meanwhile, he and several of his ex-Trackr colleagues have now turned their attention to a new shiny challenge, the toilet and the bigger bathroom where it sits, and investors want in.
“We were impressed by Shine’s vision for a bathroom to better prepare us for our day head and saw a massively overlooked opportunity in the bathroom space” said Taylor Tyng from Entrada Ventures.
Chad Hurley is hunting for what comes after fantasy sports. He envisions a new way for fans to play by watching live and cheering for the athletes they love. Beyond a few scraps of info the YouTube co-founder would share and his new startup’s job listings revealed, we don’t know what Hurley’s game will feel like. But the company is called GreenPark Sports, and it’s launching in Spring 2020.
“There is an absence of compelling, inclusive ways for large masses of sports fans to compete together” Hurley tells me. “The idea of a ‘sports fan’ has evolved – it is now more a social behavior than ever before. We’re looking at a much bigger, inclusive way for all fans of sports and esports teams to play.”
Hurley already has an all-star team. One of GreenPark’s co-founders Nick Swinmurn helped start Zappos, while another Ken Martin created marketing agency BLITZ. Together they’ve raised an $8.5 million seed round led by SignalFire and joined by Sapphire Sports and Founders Fund. “With this team’s impeccable track record and vision for the future of fandom, this was an investment we had to make,” said Chris Farmer, founder and CEO of SignalFire.
It all comes down to allegiance — something Hurley, Swinmurn, and Martin truly understand. Everyone is seeking ways to belong and emblems to represent them. In an age when many of our most prized possessions from photographs to record collections have been digitized, we lack tangible objects that center our individuality. Culture increasingly centers around landmark events, with what we’ve done mattering more than what we own.
GreenPark could seize upon this moment by helping us to align our identities with a team. This instantly unlocks a likeminded community, a recurrent activity, and a unified aesthetic. And when reality gets heavy, people can lose themselves by hitching their spirits to the scoreboard.
Rather than just tabulating results after the match like in fantasy sports, GreenPark wants to be entwined with the spectacle as it happens. “We’re going to be working with a mix of ways to visualize the live game – from unique gamecast-like data to highlight clips. The social viewing experience can be much more than just the straight live video” Hurley explains.
He came up with GreenPark after selling assets of his video editing app Mixbit to BlueJeans a year ago. Hurley already had an interactive relationship with sports…though one that’s reserved for the rich: he’s part owner of the Golden State Warriors and Los Angeles Football Club. Meanwhile, Swinmurn co-founded the Burlingame Dragons Football Club affiliated with San Jose’s team, and is on the board of Denmark’s FC Helsingør.
Those experiences taught them the satisfaction that comes from a deeper sense of ownership or allegiance with a team. GreenPark will give an opportunity for anyone to turn fandom into its own sport. “We shared a love of sports and set out to look into opportunities around legalized sports betting in the US” Hurley tells me.” But quickly they found “it was obvious the regulated space wouldn’t allow us to innovate as quickly as we wanted” and they saw a more opportunity amidst a younger mainstream audience.
“We’re not ready to disclose publicly the exact detailed gameplay yet” Hurley says. But here’s what we could cobble together from around the web.
GreenPark Sports lets you “Destroy the other teams’ fans” to “climb the leaderboards”, its site says cryptically. According to job listings, it will pipe in live game data, starting with the NBA and expanding to other leagues, and offer cartoon characters with facial expressions and full-body gestures to let users live out the highs and lows of matches. Don’t expect trivia questions or player stat memorization. It almost sounds like a massively multiplayer online fan arena.
As with blockbuster games Fortnite or League Of Legends, GreenPark is free-to-play. But a mention of virtual clothing hints at monetization, where you could spruce up avatars with digital team apparel. Hurley tells me “We are in the perfect storm of the thirst for innovation at the traditional league level, the next level of maturing for esports, investment in sports betting and overall dire need to better understand today’s largest populace of sports fans – Millenial / Gen Z.” The closed beta launches in the Spring.
There’s a massive hole to fill in the wake of the Draft Kings / FanDuel marketing sure a few years ago. Most apps in the space just carry scores or analysis, rather than community. “What’s amazing about being a fan of a team or player is the common bond you have with other fans” Hurley explains, “where even if you don’t know the other fans of your team – you are all in it to win it – together.”
Publications like The Athletic have proven there are plenty of fans willing to pay to feel closer to their favorite teams. The most direct competitor for GreenPark might be Strafe, that lets you track and predict the winners of esports matches.
People already spend tons of time on building fictional worlds like Minecraft and money outfitting their Fortnite avatar with the coolest clothes. If GreenPark can create a space for sports’ fan self-expression, it could create the online destination for legions of IRL enthusiasts that see who they root for as core to who they are.
Meet Moon, a three-person startup that lets you pay for stuff on Amazon using bitcoin via the Lightning Network, bitcoin, Litecoin or Ether. The company has released a desktop browser extension for Google Chrome, Brave and Opera.
While some e-commerce retailers let you pay with cryptocurrencies, the biggest e-commerce platforms have yet to accept cryptocurrencies. Moon doesn’t want to wait and wants to make it possible to pay with cryptocurrencies using current payment methods.
After installing the extension, Moon automatically recognizes when you’re on an Amazon checkout page and inserts the company’s own payment widget. You can see how much you’re going to pay in cryptocurrencies before accepting the transaction.
Right now, Moon lets you pay using two different ways. You can pay with any bitcoin wallet that works on top of the Lightning Network. Normal bitcoin transactions can take minutes to be confirmed on the bitcoin blockchain. The Lightning Network lets you open a payment channel between Lightning nodes to enable fast transactions.
Moon also lets you pay with your crypto balance on your Coinbase account. This way, if you hold bitcoin, Litecoin, Ether, etc. on your Coinbase account, you can also pay in seconds by leveraging Coinbase’s API.
Behind the scene, Moon uses prepaid value on Amazon. When you pay with Moon, the service automatically converts your cryptocurrencies, tops up your Amazon account and pays with your Amazon balance. Moon doesn’t charge additional fees.
In the future, Moon plans to expand beyond the U.S. and Canada and let customers in Europe use the browser extension. Similarly, Moon wants to expand to other e-commerce websites. Moon participated in the Entrepreneurs Roundtable Accelerator.
The popular TC Hackathon is back in action at Disrupt Berlin 2019 on 11-12 December. We’re limiting the competition to 500 participants and seats are going fast. Don’t miss your chance to put your creative skills to the test and compete against some of the world’s top code poets.
Oh, you’ll love this part — it won’t cost you anything to apply or to participate. Who doesn’t love free? Apply to the TC Hackathon today.
Our Hackathon will push you to be your very best. Here’s how it works. The event takes place during the Disrupt conference in a dedicated section of Arena Berlin and — how cool is this — all participants receive a free Innovator pass to the show.
You and your team (either the one you bring or the one you find onsite) will choose from a series of sponsored challenges (more on that in a minute). Then buckle up and get ready to buckle down, because you’ll have less than 24 hours to design, build and present something great. We’re talking working prototypes that address real-world problems.
Don’t worry, we’ll keep you fed and caffeinated throughout the competition so you can focus on building a product with the potential to change the way we live, work and play — and thus dazzle the judges with your skill and creativity.
The Hackathon judges review every completed project, and they’ll pick only 10 teams to move into the finals. That final round takes place on day two, and each team gets a mere two minutes to pitch and impress — in front of judges and an appreciative crowd — on the Extra Crunch stage.
Sponsors present a variety of prizes (including cash) to the winners of their specific challenges, and then TechCrunch chooses one team as the best over-all hack — and awards them a $5,000 prize.
We’ll announce the sponsors, challenges and prizes in the coming weeks. But for now, the sponsored contests, prizes and winners from the Hackathon at Disrupt SF 2018 will give you an idea of what you can expect. You can also check out Quick Insurance — the overall winner at the Disrupt Berlin 2017 Hackathon.
The TC Hackathon takes place during Disrupt Berlin 2019 on 11-12 December. Only 500 people will make the cut and seats are filling quickly. Come show us your tech skills and build something awesome. Apply to the Hackathon today.
Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.
Global retail e-commerce is expected to be a $25 trillion business this year, and today one of the companies that has built a set of tools to help larger enterprises to sell to consumers online has raised a large growth round to meet that demand. Commercetools, a German startup that provides a set of APIs that power e-commerce sales and related functions for large businesses, has raised $145 million (€130 million) in a growth round of funding led by Insight Partners, at a valuation that we understand from a close source is around $300 million.
The funding comes at the same time that commercetools is getting spun out by REWE, a German retail and tourist services giant that acquired the startup in 2015 for an undisclosed amount.
The route the company took after that is a not-totally-uncommon one for tech startups acquired by non-tech companies: commercetools had been acquired by REWE as part of a strategy to take some of its own e-commerce tech in-house, but commercetools had always continued to work with outside clients and has been growing at about 110% annually, CEO and co-founder Dirk Hoerig said in an interview.
Current companies include Audi, Bang & Olufsen, Carhartt, Yamaha and some very big names in retail products and services (including major telco/media brands in the USA that you will definitely know). Ultimately, the decision was taken to bring in outside funding and spin out the businesses as an independent startup once again to supercharge that growth. REWE will remain a significant shareholder with this deal.
Hoerig said that commercetools had raised only around $30 million in outside funding when it was a startup ahead of getting acquired.
Although e-commerce has grown over the last couple of years with slightly less momentum than in previous years given wider economic uncertainty, it continues to expand, and in that growth, we’ve seen a swing back to individual retail brands looking for ways of connecting more directly with customers outside of the third-party marketplaces (like Amazon) that have come to dominate how people spending money online.
That is giving a boost to those providing essentially non-tech businesses the tools to build e-commerce activity by offering “headless” tools that are attached to front-end systems designed by others.
Shopify — coincidentally, also backed by Insight when it was still a private company — focuses more on providing e-commerce tools by way of APIs to medium and smaller customers, and it has ballooned to some 800,000 customers. Commercetools, in contrast, focuses more on companies that typically generate revenues in excess of $100 million annually, Hoerig said.
Commercetools has no plans to expand to smaller companies — “We have no plan to compete against Shopify,” Hoerig said. Nor is there any strategy in place to extend into logistics, another important component of e-commerce services.
That’s not to say that commercetools doesn’t have a crowded field when it comes to competition, though. Hoerig noted that companies like SAP, Oracle and IBM are typical competitors and are more often already the incumbent provider to large enterprises. Then, there are others like Microsoft, in hot competition with Amazon for cloud customers, also expanding their commerce services for business. Companies typically make the change to replace them with something like commercetools, he said, when they decide they need a “more modern” approach.
In all (if that list alone wasn’t a strong enough hint), the wider market for e-commerce tools is very fragmented.
“Even SAP has only something like a 2% share,” he added.
Today, commercetools offers a range of services, starting at APIs to power the basics of webshops and mobile sites, along with IoT services (“machines buying from machines,” Hoerig noted), powering chatbots, the architecture for running marketplaces, social commerce services (for example, powering selling through Instagram), and augmented reality. It currently integrates with Adobe, Frontastic, Bloomreach and Magnolia.
Commercetools plans to use the funding to continue expanding its business in North America and other parts of the world, as well as to continue building up its B2B2B offering — that is, tools for businesses to sell to other businesses. This is an area that companies like Alibaba are very strong in (and Amazon has been also growing its business), and the idea is to provide tools to let companies sell on their own sites either as a complement to, or to replace, third-party marketplaces.
Another area where it will continue to figure where it can play better is in the development of better online-to-offline technology.
Richard Wells and Matt Gatto of Insight are both joining the board with this deal.
“With a strong track record of investing in retail software leaders, we are excited to have the opportunity to invest in commercetools and help them scale up internationally,” said Wells in a statement. “In our opinion commercetools represents the next wave of enterprise commerce software and has the potential to unlock powerful innovation and growth within the e-commerce sector.”
Nadiem Makarim, founder and CEO of Gojek, said on Monday he has stepped down from his role at the ride-hailing startup to join Indonesia president Joko Widodo’s cabinet.
The announcement, which has taken many by surprise, comes a day after Widodo was sworn in for a second term. Widodo has previously said that he wants young business executives to join his cabinet.
In a statement, a Gojek spokesperson told TechCrunch that Andre Soelistyo, Gojek Group president, and Kevin Aluwi, Gojek co-founder, are taking over as co-CEOs of the startup.
“We are very proud that our founder will play such a significant role in moving Indonesia onto the global stage. It is unprecedented for a passionate local founder’s vision to be recognized as a model that can be up-scaled to help the development of an entire country,” the spokesperson said.
“We have planned for this possibility and there will be no disruption to our business. We will make an announcement on what this news means for Gojek within the next few days. We respect the process set out by the president and will not make a further comment until there is an official announcement from the palace,” the spokesperson added.
Makarim (pictured above) said he was honored that the president asked him to join his cabinet as a minister. He did not reveal which position he would hold, but an announcement from Widodo is expected later this week. “I am very happy to be here today as it shows we are ready for innovation and to move forward,” he told reporters.
Makarim, 35, founded Gojek in 2010 as a two-wheeler hailing service. The startup has since expanded to include a range of services, including mobile payments, food delivery, online shopping and, most recently, on-demand video streaming.
The startup has amassed more than 2 million driver partners and 400,000 merchants on its platform. Gojek was valued at almost $10 billion in its most recent financing round. The company, which operates in Singapore, Vietnam and Thailand, clocked gross transactions worth $9 billion last year.
Makarim comes from a prominent Indonesian family: His parents are anti-corruption activists, while his grandfather is an independence hero.
Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy news pertaining to startups and venture capital. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Revel, a recent graduate of Y Combinator that’s raised a small seed round.
Uber the TV show
Is anyone surprised Mike Isaac’s “Super Pumped” is set to become a TV show? Travis Kalanick’s notorious journey to CEO of Uber and subsequent ouster was made for television. This week, news broke that Showtime’s Brian Koppelman and David Levien, the creators and showrunners of “Billions,” would develop the project, with Isaac himself on board to executive produce. I will be watching.
All Raise expansion
All Raise, an 18-month-old nonprofit organization that seeks to amplify the voices of and support women in tech, announced new chapters in Los Angeles and Boston this week. I spoke with leaders of the organization about expansion plans, new hires, product launches and more. “Women are hungry for the support and guidance we provide. I think the movement is just gathering momentum,” All Raise CEO Pam Kostka told me.
VCThe unicorn from down under
You’ve probably heard of Canva by now. The Australian tech company, which has developed a simplified graphic design tool, is worth a whopping $3.2 billion as of this week. Investors in the company include Bond, General Catalyst, Bessemer Venture Partners, Blackbird and Sequoia China. Alongside a fresh $85 million funding, Canva is also making its foray into enterprise with the launch of Canva for Enterprise. Read about that here.
NASA astronauts Christina H. Koch and Jessica Meir
Startup spotlight: Petalfox. I discovered the business earlier this week. Basically, it’s a super easy way to order flowers, coffee and others goods via SMS. I’m trying it out. That’s all.
This week was honestly a treat. We had myself in the studio along with Alex Wilhelm and a special guest, Sarah Guo from Greylock Partners, a venture firm (obviously). Guo has the distinction of having the best-ever fun fact on the show. We kicked off with Grammarly, a company that recently put $90 million into its accounts. Then chatted about Lattice, Tempest, WeWork, SaaS, the future of valuations in Silicon Valley and more if you can believe it. Listen here.
Tilting Point announced yesterday that it has acquired Gondola, a company that aims to increase to improve game monetization by optimizing in-game offers and video ads.
Tilting Point CEO Kevin Segalla described his company’s model as “progressive publishing” — usually, mobile game developers starting working with Tilting Point because they need help with user acquisition, and then develop a deeper publishing relationship over time.
“With a select group of our development partners, we’ll acquire an IP, and we’ll … have them take the engine that they already have and create a whole new game,” Segalla said. “It’s really a dual effort between us and the developer.”
To accomplish all this, the company has built artificial intelligence tools to improve user acquisition. But the other side of that equation, in Segalla’s view, is increasing the lifetime value of the users acquired.
“At the end of the day, scaling a game boils down to two simple things, [cost per install] and LTV,” he said. “Strong developers are working to improve the LTV of their players, but there’s a lot of low-hanging fruit that with the right toolset you can use to improve the lifetime values. That’s what Gondola is about … We’ve been following for years, and we said, ‘Let’s bring this in-house.'”
Gondola currently offers four modules: Target Optimization (choosing the best offer for a player), Rewarded Video Ad Optimization (choosing the right amount of virtual currency to reward a player for watching a video ad), Store Optimization (choosing the right store items to show a player) and Currency Optimization (choosing the best virtual currency amounts for offers and promotions).
The financial terms of the acquisition — Tilting Point’s first — were not disclosed. As part of the deal, Gondola CTO André Cohen is joining Tilting Point as its head of data science, while his co-founder and CEO Niklas Herriger remains involved as an executive advisor.
YellowHeart is trying to solve a problem that should be familiar to anyone who’s ever tried to buy a ticket to a popular concert: Those tickets will often get snatched up by scalpers, who then resell them at a much higher price.
In fact, the startup’s CEO, Josh Katz, said he founded the company because he’s a music “megafan” himself, and he was “just tired of getting ripped off by scalpers.” At the same time, he said this isn’t just a problem for concertgoers. Instead, he painted it as a “lose-lose for the fan and the artist,” because the musicians aren’t sharing in the profits from the marked-up tickets, either.
So YellowHeart can allow a musician, concert venue or other “event initiator” to set up rules for how their tickets are resold. Katz said he’s hoping that some brave artists will simply say that tickets can’t be sold at a marked-up price, but he predicted that many more will set-price ceilings and dictate that any resale profits are then split between the seller, the artist and/or a charity of the artist’s choosing.
“No matter where the tickets are sold, they have to abide by those rules,” Katz added. That’s because the ticket sales run a public blockchain, and “all transactions go through YellowHeart, all the revenue flows through YellowHeart.”
The plan is to launch the ticketing platform in the second quarter of next year. Katz said users should be able to sell their tickets on any marketplace that works with YellowHeart’s smart contracts — but he also acknowledged that it will take some time to bring partners on-board and for those integrations to go live.
Katz argued that the blockchain approach has other benefits, like the fact that each ticket will have “a unique key that is tied to a user’s identity and sits in their virtual wallet,” which should eliminate forgery. (The ticketing process, by the way, will be “fully digital end-to-end,” except that venues will have the option to print tickets at the box office.)
Katz has a background in the music industry, having previously founded El Media Group, which creates custom playlists for hotels, restaurants and other clients. He founded YellowHeart with The Chainsmokers, along with their manager Adam Alpert, who’s also CEO of Disruptor Records.
“With The Chainsmokers, we’ve been outspoken about the issue of scalpers for years, and are excited to partner with YellowHeart to provide a smart and effective solution that gives control back to artists and fans,” Alpert said in a statement.
And Katz suggested that YellowHeart’s platform could eventually be used in any other kind of event ticketing.
“I am anticipating this being a great platform for sports and theater as well,” he said. “Myself and Adam and Drew [Taggart] and Alex [Pall of The Chainsmokers] come out of music, so that’s where we’re starting.”
Hardware startups are expanding from the world of consumer tech; global hardware accelerator HAX knows this better than most and details the latest trends in its yearly report. One of the most active early-stage hardware investors, the group today released exclusively to TechCrunch its yearly report with insights on hardware startups.
The report highlighted several vital insights: hardware companies are increasingly entering the public market, and more privately-held hardware startups are exceeding a valuation of $1 billion. Of those unicorns, more than 50% are Chinese hardware companies.
The turbulence of Brexit has left both UK and European startups alike wondering about the best path forward. From recruiting to acquiring investment to scaling into other parts of Europe, the challenges seem to be mounting. By December, who knows what will have happened on the Brexit landscape, such is the chaos.
At Disrupt Berlin in December, we’ll hear from investor Bindi Karia who has deep European ties, founder Glenn Shoosmith who’s expanding his startup internationally and German-born but UK-domiciled VC Volker Hirsch on how to make the right decisions in the face of these obstacles.
Bindi Karia works as a venture partner at large London-based VC Draper Esprit and has held positions in and around the tech industry for as long as she’s been working. She’s been a consultant at PwC Consulting, worked in corporate environments like Microsoft Ventures, served within a startup at Trayport, as an advisor across a number of organizations (Startup Europe, TechStars Startup Weekend, Tech London Advocates, European Innovation Council, WEF). She’s been a banker with Silicon Valley Bank and currently invests as a partner at a large London-based VC firm, as well as serving on the advisory board for seven different startups. She brings a wealth of knowledge to the conversation and understands the differing perspectives involved in each startup’s journey to success.
Volker Hirsch will bring us not only his perspective as a former entrepreneur-turned-VC but also as a German-born citizen living in the UK and dealing with Brexit. He is a Partner at Amadeus, working on its early-stage funds whose investment focus is on artificial intelligence & machine learning, autonomous systems, human-machine interfaces, cybersecurity, enterprise SaaS, digital health and medical technologies.
Volker founded or co-founded a total of 6 companies to date. He is currently co-founder of Blue Beck, a 40-strong mobile development house and a Venture Partner at Emerge Education, Europe’s leading early-stage EdTech investor.
Prior to joining Amadeus Capital, Volker was amongst the first angel investors in companies like Pi-Top, Bibblio (where he is also Chairman), Aula Education and Wonde. His personal investment portfolio comprises about a dozen investments with companies based across Europe and the US.
Previously, Volker was the Chief Strategy Officer at Scoreloop, a mobile social gaming platform, which he helped grow from (almost) inception to 450m users at its peak. When the company got acquired by BlackBerry in 2011, he served as BlackBerry’s Global Head of Business Development – Games.
Lastly, Glenn Shoosmith will bring his perspective as a founder with a substantial operation in the UK but who recently expanded into the US. Originally founded as BookingBug in 2008, the renamed JRNI (pronounced ‘journey’) has become one of the market-leading multichannel appointment scheduling and customer journey platforms, helping leading global retailers, banks, central and local governments enhance their customer experience and save costs. JRNI has a team of over 100 based in London, Boston and Sydney.
Glenn has been a passion advocate for London and the UK as a technology hub within Europe and in the past has helped shape government policy towards innovation and technology, both as an early advocate for Tech City, and an advisor and representative of the government nationally and internationally.
Buy your ticket to Disrupt Berlin to listen to this discussion — and many others. The conference will take place December 11-12.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where each week we discuss other people’s money and what sense their investment choices make (or don’t).
This week was honestly a treat. We had Kate Clark in the studio along with Alex Wilhelm and a special guest, Sarah Guo from Greylock Partners, a venture firm (obviously). Guo has the distinction of having the best-ever fun fact on the show.
We kicked off with Grammarly, a company that recently put $90 million into its accounts. We chatted about for whom it was built, and if we use it today. One thing that felt clear was that consumers are more willing than before to pay for their tooling. And that means that companies like Grammarly may prove strong investment candidates.
Next, we hit on two more rounds, namely Tiger Global’s investment into Lattice and Clari’s $60 million Series D. Starting with Lattice, a performance management company founded by none other than Sam Altman’s brother, Jack. The startup raised $25 million from Tiger Global, read more about that here.
Clari led us a to a discussion of vertical SaaS, and Guo’s views on the future of SaaS products (she’s bullish). Alex and Guo had a lot to say on this subject.
After talking over a few rounds the discussion turned to the Q3 venture market. A few things stood out from the data and projections. First, that early-stage fundraising was a little light in the quarter. It could be a single-quarter wobble, but the data was worth chewing on all the same. And, second, that Seed deal and dollar volume were hot once again.
And we wrapped with a discussion of Tempest, a new sobriety-focused startup that raised a $10 million round. Honestly, we aren’t sure how we feel about the business model. Please let us know if you have thoughts.
It was a good time. A big thanks to Guo for coming on the show, and a shoutout to the team that makes Equity happen: Chris Gates, and Henry Pickavet.
This is it, startup founders. Today, October 18, is the last day and your final opportunity to be chosen as a TC Top Pick, to score a free Startup Alley Exhibitor Package and to shine a bright spotlight on your company at Disrupt Berlin 2019 on 11-12 December.
You have only a few hours left to beat today’s 12 p.m. (PT) deadline. It’s quick, it’s painless and it’s free. What are you waiting for? Apply to be a TC Top Pick while you still can.
Every early-stage startup needs exposure to survive and thrive. Exposure to potential customers, to accredited media and to investors with the backing to make dreams come true. Our TC Top Picks provides exposure to possibility.
If your startup falls into one of the categories listed below, we want you. TechCrunch editors will vet the applications and choose up to five startups that represent the best of each category: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.
If you earn a TC Top Pick designation, you receive a free Startup Alley Exhibitor Package and a VIP experience. Your package includes one full day exhibiting in Startup Alley (the Disrupt expo floor), three Founder passes, press lists and invitations to networking parties, to name just a few perks.
Our Top Picks cohort generates a lot of curiosity, and Disrupt attendees flock to Startup Alley to meet and greet. It’s networking nirvana, where you can connect with potential customers, investors, mentors, collaborators — think infinite opportunity.
And yet another great opportunity awaits. TechCrunch editors interview each Top Pick startup live on the Showcase Stage. While we promote the interview video across our social media platforms, you can use it to drive traffic to your website and as a long-term marketing tool for pitching investors and customers.
And then there’s the Wild Card. TechCrunch editors will pick one early-stage startup exhibiting in the Alley to be the Wild Card, and that startup will compete in Startup Battlefield, our epic pitch competition. It’s a chance to win even more investor and media love along with the $50,000 prize. Last year, Legacy earned the Wild Card slot, and then went on to win the Startup Battlefield competition.
Disrupt Berlin 2019 takes place on 11-12 December. So much opportunity, so little time left to take advantage of it. The TC Top Picks opportunity is free, and the benefits are priceless. Don’t miss your chance — apply to be a TC Top Pick before 12 p.m. (PT) today, 18 October.
Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.