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Twitter partners with AP and Reuters to address misinformation on its platform

By Sarah Perez

Twitter announced today it’s partnering with news organizations The Associated Press (AP) and Reuters to expand its efforts focused on highlighting reliable news and information on its platform. Through the new agreements, Twitter’s Curation team will be able to leverage the expertise of the partnered organizations to add more context to the news and trends that circulate across Twitter, as well as aid with the company’s use of public service announcements during high visibility events, misinformation labels, and more.

Currently, the Curation team works to add additional information to content that includes Top Trends and other news on Twitter’s Explore tab. The team is also involved with how certain search results are ranked, to ensure that content from high-quality searches appear at the top of search results when certain keywords or hashtags are search for on Twitter.

The team may also be involved with the prompts that in the Explore tab on Home Timeline related to major events, like public health emergencies (such as the pandemic) or other events, like elections. And they may help with the misinformation labels that appear on tweets that are allowed to remain visible on Twitter, but are labeled with informative context from authoritative sources. These include tweets that violate Twitter’s rules around manipulated media, election integrity, or Covid-19.

However, the team operates separately from Twitter’s Trust and Safety team, which determines when tweets violate Twitter’s guidelines and punitive action, like removal or bans, must be taken, Twitter confirmed that neither the AP nor Reuters will be involved in those sorts of enforcement decisions.

By working more directly with AP and Reuters, who also partner with Facebook on fact-checks, Twitter says it will be able to increase the speed and scale to which it’s able to add this additional information to tweets and elsewhere on its platform. In particular, that means in times where news is breaking and when facts are in dispute as a story emerges, Twitter’s own team will be able to quickly turn to these more trusted sources to improve how contextual information is added to the conversations taking place on Twitter.

This could also be useful in stopping misinformation from going viral, instead of waiting until after the fact to correct misleading tweets.

Twitter’s new crowdsourced fact-checking system Birdwatch will also leverage feedback from AP and Reuters to help determine the quality of information shared by Birdwatch participants.

The work will see the Curation team working with the news organizations not just to add context to stories and conversations, but also to help identify which stories need context added, Twitter told us. This added context could appear in many different places on Twitter, including on tweets, search, in Explore, and in curated selections, called Twitter Moments.

Twitter has often struggled with handling misinformation on its platform due its real-time nature and use by high-profile figures, who attempt to manipulate the truth for their own ends. To date, it has experimented with many features to slow or stop the spread of misinformation from disabling one-click retweets, to adding fact-checks, to banning accounts, and more. Birdwatch is the latest effort to add context to tweets, but the system is a decentralized attempt at handling misinformation — not one that relies on trusted partners.

“AP has a long history of working closely with Twitter, along with other platforms, to expand the reach of factual journalism,” noted Tom Januszewski, Vice President of Global Business Development at AP, in a statement about the new agreement. “This work is core to our mission. We are particularly excited about leveraging AP’s scale and speed to add context to online conversations, which can benefit from easy access to the facts,” he said.

“Trust, accuracy and impartiality are at the heart of what Reuters does every day, providing billions of people with the information they need to make smart decisions,” added Hazel Baker, the Head of UGC Newsgathering at Reuters. “Those values also drive our commitment to stopping the spread of misinformation. We’re excited to partner with Twitter to leverage our deep global and local expertise to serve the public conversation with reliable information,” Baker said.

Initially, the collaborations will focus on English-language content on Twitter, but the company says it expects the work to grow over time to support more languages and timezones. We’re told that, during this initial phase, Twitter will evaluate new opportunities to onboard collaborators that can support additional languages.

Novakid’s investors bet $35M that it can teach kids English

By Natasha Mascarenhas

If you’re trying to develop fluency in a non-native tongue, language immersion is a crucial part of the learning process. Surrounding yourself with native speakers helps with pronunciation, context building, and most of all, confidence.

But what if you’re an eight-year-old kid in Spain learning English and can’t swing a solo trip to the United States for the summer?

Novakid, founded by Maxim Azarov, wants to be your next best option. The San Francisco-based edtech startup offers virtual-only, English language immersion for kids between the ages of four through 12, by combining a mix of different services from live tutors to gamification.

After closing its $4.25 million Series A round last December, Novakid announced today that it is back with a $35 million Series B financing, led by Owl Ventures and Goodwater Capital. Existing investors also participated in the round, including PortfoLion, LearnStart, TMT Investments, Xploration Capital, LETA Capital and BonAngels.

The startup is raising capital in response to an active start to its year. The company’s active client base grew 350% year over year, currently at over 50,000 paying students. The money will be used to get more students into its universe of tools, as well as help Novakid expand into international markets with high populations of speakers who want to learn English.

The company’s suite of services are built around two principles: First, that it can immerse early-age learners into the world of English at scale, and second, that it can actually be fun to use.

When a user signs up, they are first connected to one of Novakid’s 2,000 live tutors for their first class. Tutors must be native English speakers with a B.A. degree or higher, as well as an international teaching certificate such as DELTA, CELTA, TESOL or TEFL.

“One of the things that is really important, even psychologically, is to start listening to the language, start interacting with a live person, and remove being afraid of not understanding something,” Azarov said. The company wants to recreate the conditions of how a kid likely learned their first language.

In the class, the tutors only speak English, and users are encouraged to do the same to slowly build and mistake their way into confidence. While the live, video-based classes are a key part of Novakid’s product, Azarov said it was important that his company “was not just giving you access to a teacher” as its main value proposition.

“Most of the competitors are taking teachers and making them available remotely so you don’t have to travel and you have a bigger selection,” he said. But if you look at the industry in the bigger picture, guys like Oxford, Cambridge, Pearson who provide content for the language learning industry, their product basically sucks. It’s really bad.” So, Novakid puts most of its energy into rebuilding a curriculum that works with better design, and includes games.

Gamified content lives both in and out of classes. Within the classroom, a teacher may take a student on a VR-enhanced tour through famous landmarks and museums to practice vocabulary. Self-paced content could look like a multiplayer “battle” between two students answering questions within a certain time period to get a better score. Novakid has an entire team dedicated to game design and development.

Students are clicking in. Novakid users spend two-thirds of their time on the website with tutors, and one-third with self-paced content that the company built in-house. The company wants to switch those concentrations because more students are spending time with the asynchronous content around grammar and vocabulary, and teachers are reserved for more complex information like speaking and conversation.

Part of the difficulty of scaling up a language learning business is that users need to stay motivated. Gamification helps with engagement, but Novakid’s clientele of children could also be fast to churn compared to adult learners, simply due to priorities. Azarov said that he sees how some would view selling exclusively to children as a disadvantage, but he views their focus as differentiation.

“You get better brand equity when you’re more focused,” he said. “The way kids learn language is vastly different from the way adults learn language, and I don’t think the general players who do ‘everything from everybody’ will be able to do [the former] as well as we are.” Duolingo recently launched Duolingo ABC, a free English literacy app with hundreds of short-form exercises. While the now-public company has strong branding, Novakid’s strategy differs by adding in more services around live learning and speaking.

So far, the company has proven that its strategy is sticking. Its revenue in 2020 was $9 million, and in 2021 it is expected to hit between $36 million to $45 million in revenue. It declined to disclose the specifics around diversity of the team, but plans to kick off a quite intensive recruiting spree going forward. Azarov plans to add 200 people to his 300-person company in the next six months.

Demand Curve: Questions you need to answer in your paid search ads

By Ram Iyer
Stewart Hillhouse Contributor
Stewart Hillhouse writes actionable growth marketing insights as senior content lead at Demand Curve. By night, he interviews marketers and creatives on his podcast, Top Of Mind. Before getting into marketing, Stewart was a semi-professional lumberjack. He also writes at stewarthillhouse.com.

Around 15% of website traffic comes through paid search ads. But to turn passive searchers into active shoppers, your ads should answer their question and entice them to click.

We’ve tested thousands of paid search ads at Demand Curve and through our agency Bell Curve. This post breaks down 14 questions your paid search ads should answer to ensure you’re only paying for the highest-intent shoppers.

Question 1: “What’s in it for me?”

An important distinction between paid search and organic search is that paid ads are an interruption. Users of search engines are simply looking for an answer to their question. The people who see your ads don’t owe you anything. Just because you’re paying to have your ad show up first doesn’t mean they’re going to pay attention to it.

To generate genuine interest in your paid ads, reframe your offer as a favor.

You can do this in two ways:

  • Describe the features of your product as the solution to your customers’ problem.
  • Emphasize the outcome your customer seeks.

For example, reframing free delivery as an extra convenience makes the offer that much more attractive.

Use ad extensions by listing additional benefits in the description of the page. For example, including “customized plans” in the pricing extension page signals to your customer that they’ll have control over the cost. This will help to attract the curiosity of even the most cost-conscious buyers.

To capture genuine interest in your paid ads, re-frame your offer as a favor.

Image Credits: Demand Curve

Question 2: “Why should I buy now?”

Approximately 80% of e-commerce shopping carts are abandoned, mostly because shoppers don’t feel any urgency to complete the transaction. Online shoppers aren’t in any rush, as the internet is open 24/7 and inventory feels unlimited.

Use ad copy that bridges the gap between their problem and your solution. The easiest way to create that curiosity bridge is by asking a question.

To answer the question, “Why should I buy now?”, you’re going to have to create an incentive to get them to take action now.

MGA Thermal raises $8M AUD led by Main Sequence for its modular energy storage blocks

By Catherine Shu

A photo of MGA Thermal co-founders Erich Kisi and Alex Post

MGA Thermal co-founders Erich Kisi and Alex Post. Image Credits: MGA Thermal

MGA Thermal wants to help utility companies transition from fossil fuels to renewable energy sources with shoebox-sized thermal energy storage blocks. The company says a stack of 1,000 blocks is about the size of a small car and can store enough energy to power 27 homes for 24 hours. This gives utility providers the ability to store large amounts of energy and have it ready to dispatch even when weather conditions aren’t ideal for generating solar or wind power. The modular blocks also make it easier to convert infrastructure, like coal-fired power plants, into grid-scale energy storage.

MGA Thermal announced today it has raised $8 million AUD (about $5.9 million USD), bring its total funding so far to $9 million AUD. The round was led by Main Sequence, a venture firm founded by Australia’s national science agency that recently launched a new $250 million AUD fund. Alberts Impact Capital, New Zealand’s Climate Venture Capital Fund, The Melt and returning investor CP Ventures participated, along with angel investors like Chris Sang, Emlyn Scott and Glenn Butcher.

Based in Newcastle, Australia, MGA Thermal was founded in April 2019 by Erich Kisi and Alexander Post after nearly a decade spent researching and developing miscibility gap alloys technology at the University of Newcastle. When asked to explain MGA tech in layperson’s terms, Kisi used a delicious analogy.

MGA Thermal’s blocks “essentially comprise metal particles that melt when heated embedded in an inert matrix material. Think of a block as being like a choc-chip muffin heated in a microwave. The muffin consists of a cake component, which holds everything in shape when heated, and the choc chips, which melt,” he told TechCrunch.

“The energy that goes into melting the choc chips is stored and can burn your mouth when you bite into the muffin,” he added. “Melting energy is more intense than merely heating something up and that melting energy is concentrated near the melting temperature so energy can be released in a consistent way.”

MGA Thermal's modular energy storage blocks

MGA Thermal’s modular energy storage blocks. Image Credits: MGA Thermal

Energy stored in MGA Thermal’s blocks can be used to heat water to power steam turbines and generators. In this scenario, blocks are designed with internal tubing for pumping and boiling water, or interact with a heat exchanger. Kisi said MGA Thermal’s blocks enable aging thermal power plans to continue running on renewable energy that would usually be switched off in situations like overheating caused by too much sun or high winds.

Other thermal energy solutions include heating low-cost solid materials in blocks or granules to high temperatures in an insulated container. But many of these materials aren’t good at moving thermal energy around and have temperature limitations, Kisi said. This means thermal energy decreases in temperature as it is discharged, making it less effective.

Another method for storing thermal energy involves molten salts that are heated by a renewable energy source and stored in a hot tank. The hot salt is then pumped through a heat exchanger to make steam, while colder (but still molten) salt is returned to a “cold” tank.

“These systems are widely used in concentrating solar thermal energy but have found little use elsewhere,” Kisi said. “That’s mostly because there is a large infrastructure cost for piping pumps and heaters, and a large amount of power is wasted keeping the salt from freezing.”

MGA Thermal is establishing a manufacturing plant in New South Wales to scale production of its blocks to commercial levels and plans to double its team over the next 12 months so it can make hundreds of thousands of blocks each month. It is also currently working with partners like Swiss company E2S Power ASG and US-based Peregrine Turbine Technologies to deploy its tech in Australia, Europe and North America. For example, E2S Power AG will use MGA Thermal’s tech to repurpose retired and active coal-fired thermal plants in Europe.

While MGA Thermal’s tech has many industrial use cases, like converting power stations, building off-grid storage and supplying power to remote communities and commercial spaces, it can also help consumers consume less fossil fuel. For example, MGA blocks can be used by households to store excess energy generated from rooftop solar panels or small wind turbines. Then that energy can be used to heat homes

“Around the world an estimated three billion people heat their homes by burning fuel,” said Kisi. “That’s a lot of CO2, especially in very cold climates.”

In a statement, Main Sequence partner Martin Duursma said, “A core focus of our new fund is uncovering the scientific discoveries, and helping to turn them into real, tangible technologies so we can reverse our climate impact. Erich Kisi and Alexander Post’s impressive deep research backgrounds, their expert team and innovative technology are paving the way for grid-scale energy storage and boosting the capability of a renewaBle energy future globally.”

Salesforce steps into RPA buying Servicetrace and teaming it with Mulesoft

By Ron Miller

Over the last couple of years, Robotic Process Automation or RPA has been red hot with tons of investor activity and M&A from companies like SAP, IBM and ServiceNow. UIPath had a major IPO in April and has a market cap over $30 billion. I wondered when Salesforce would get involved and today the company dipped its toe into the RPA pool, announcing its intent to buy German RPA company Servicetrace.

Salesforce intends to make Servicetrace part of Mulesoft, the company it bought in 2018 for $6.5 billion. The companies aren’t divulging the purchase price, suggesting it’s a much smaller deal. When Servicetrace is in the fold, it should fit in well with Mulesoft’s API integration, helping to add an automation layer to Mulesoft’s tool kit.

“With the addition of Servicetrace, MuleSoft will be able to deliver a leading unified integration, API management, and RPA platform, which will further enrich the Salesforce Customer 360 — empowering organizations to deliver connected experiences from anywhere. The new RPA capabilities will enhance Salesforce’s Einstein Automate solution, enabling end-to-end workflow automation across any system for Service, Sales, Industries, and more,” Mulesoft CEO Brent Hayward wrote in a blog post announcing the deal.

While Einstein, Salesforce’s artificial intelligence layer, gives companies with more modern tooling the ability to automate certain tasks, RPA is suited to more legacy operations, and this acquisition could be another step in helping Salesforce bridge the gap between older on-prem tools and more modern cloud software.

Brent Leary, founder and principal analyst at CRM Essentials says that it brings another dimension to Salesforce’s digital transformation tools. “It didn’t take Salesforce long to move to the next acquisition after closing their biggest purchase with Slack. But automation of processes and workflows fueled by realtime data coming from a growing variety sources is becoming a key to finding success with digital transformation. And this adds a critical piece to that puzzle for Salesforce/MulseSoft,” he said.

While it feels like Salesforce is joining the market late, in an investor survey we published in May Laela Sturdy, general partner at CapitalG told us that we are just skimming the surface so far when it comes to RPA’s potential.

“We’re a long way from needing to think about the space maturing. In fact, RPA adoption is still in its early infancy when you consider its immense potential. Most companies are only now just beginning to explore the numerous use cases that exist across industries. The more enterprises dip their toes into RPA, the more use cases they envision,” Sturdy responded in the survey.

Servicetrace was founded in 2004, long before the notion of RPA even existed. Neither Crunchbase nor Pitchbook shows any money raised, but the website suggests a mature company with a rich product set. Customers include Fujitsu, Siemens, Merck and Deutsche Telekom.

Google gives the world its first official glimpse of the Pixel 6

By Greg Kumparak

While the company isn’t revealing everything about it just yet, this morning Google gave the world its first official peek at its next flagship phone: the Pixel 6.

Here’s what we know so far:

  • It’ll come in two forms: Pixel 6 and Pixel 6 Pro.
  • The base 6 will have a matte aluminum finish with a 6.4″ display, while the Pro has a shinier polished aluminum finish with a 6.7″.
  • Pixel 6 has two cameras (wide and ultra wide), while the 6 Pro adds a telephoto zoom lens
  • If you were hoping the increasingly common “camera bump” trend was on the way out… not quite. The bump has now evolved into the “camera bar”, with Google’s Rick Osterloh noting that better sensors and lenses just won’t fit in a smaller package.
  • These will be the first phones to run Tensor, Google’s first entirely custom system-on-a-chip. Previous Pixels have run on Qualcomm’s Snapdragon platform. Google CEO Sundar Pichai says they’ve been working on the chip for 4+ years. In a blog post announcing the devices, Osterloh suggests that the focus here is making a chip tuned for on-device AI and ML.
  • They’ll ship sometime “this fall.”

Lots of details, including pricing and much of the spec sheet (CPU, RAM, etc.) are still a mystery for now — though earlier leaks seem to be spot on, so far.

The next generation of global payments: Afterpay + Square

By Ram Iyer
Dana Stalder Contributor
Dana Stalder is a partner at Matrix Partners. The former commercial chief (Product, Sales and Marketing) at PayPal, he now leads fintech investing at Matrix Partners, where he also invests in consumer marketplaces and enterprise software.

Sunday was a big day in fintech: Afterpay has agreed to merge with Square. This agreement sets two of the most admired financial technology companies in recent history on a path to becoming one.

Afterpay and Square have the potential to build one of the world’s most important payments networks. Square has built a very significant merchant payment network, and, via Cash App, a thriving high-growth consumer payment service. However, these two lines of business have historically not been integrated. Together, Square and Afterpay will be able to weave all of these services together into a single integrated experience.

Afterpay and Cash App each have double-digit millions of consumers, and Square’s seller ecosystem and Afterpay’s merchant network both record double-digit billions of payment volume per year. From the offline register and the online checkout flow to sending money in just a few taps, Square and Afterpay will tell a complete story of next-generation economic empowerment.

As Afterpay’s only institutional venture investor, I wanted to share some perspective on how we got here and what this merger means for the future of consumer finance and the payments industry.

Afterpay and Square have the potential to build one of the world’s most important payments networks.

Critical innovations in fintech

Every five to 10 years, the global payments industry undergoes a critical innovation cycle that determines the winners and losers for the next several decades. The last major transition was the shift to NFC-based mobile payments, which I wrote about in 2015. The major mobile OS vendors (Apple and Google) cemented their position in the global payments stack by deftly bridging the needs of the networks (Visa, Mastercard, etc.) and consumers by way of the mobile devices in their pockets.

Afterpay sparked the latest critical innovation cycle. Conceived in a living room in Sydney by a millennial, Nick Molnar, for millennials, Afterpay had a key insight: Millennials don’t like credit.

Millennials came of age during the global mortgage crisis of 2008. As young adults, they watched their friends and family lose their homes by overextending on mortgage debt, bolstering their already lower trust for banks. They also have record levels of student debt. Therefore, it’s no surprise that millennials (and Gen Z right behind them) strongly prefer debit cards over credit cards.

But it’s one thing to recognize the paradigm shift and quite another to do something about it. Nick Molnar and Anthony Eisen did something, ultimately building one of the fastest-growing payments startups in history on their core product: Buy now, pay later … and never any interest.

Afterpay’s product is simple. If you have $100 in your cart and choose to pay with Afterpay, it will charge your bank card (typically a debit card) $25 every two weeks in four installments. No interest, no revolving debt and no fees with on-time payments. For the millennial consumer, this meant they could get the primary benefit of a credit card (the ability to pay later) with their debit card, without the need to worry about all the bad things that come with credit cards — high interest rates and revolving debt.

All upside, no downside. Who could resist? For the early merchants, virtually all of whom relied on millennials as their key growth segment, they got a fair trade: Pay a small fee above payment processing to Afterpay, get significantly higher average order values and conversions to purchase. It was a win-win proposition and, with lots of execution, a new payment network was born.

The rise of Afterpay

Image Credits: Matrix Partners

Imitation is the greatest form of flattery

Afterpay went somewhat unnoticed outside Australia in 2016 and 2017, but once it came to the U.S. in 2018 and built a business there that broke $100 million net revenues in only its second year, it got attention.

Klarna, which had struggled with product-market fit in the U.S., pivoted their business to emulate Afterpay. And Affirm, which had always been about traditional credit — generating a significant portion of their revenue from consumer interest — also noticed and introduced their own BNPL offering. Then came PayPal with “Pay in 4,” and just a few weeks ago, there has been news that Apple is expected to enter the space.

Afterpay created a global phenomenon that has now become a category embraced by mainstream players across the industry — a category that is on track to take a meaningful share of global retail payments over the next 10 years.

Afterpay stands apart. It has always been the BNPL leader by virtually every measure, and it has done it by staying true to their customers’ needs. The company is great at understanding the millennial and Gen Z consumer. It’s evident in the voice, tone and lifestyle brand you experience as an Afterpay user, and in the merchant network it continues to build strategically. It’s also evident in the simple fact that it doesn’t try to cross-sell users revolving debt products.

Most importantly, it’s evident in the usage metrics relative to competition. This is a product that people love, use and have come to rely on, all with better, fairer terms than were ever available to them than with traditional consumer credit.

Consumer loyalty and frequency drives powerful network effect, securing the lifetime value of a consumer

Image Credits: Afterpay H1 FY21 results presentation

Square + Afterpay: The perfect fit

I’ve been building payment companies for over 15 years now, initially in the early days of PayPal and more recently as a venture investor at Matrix Partners. I’ve never seen a combination that has such potential to deliver extraordinary value to consumers and merchants. Even more so than eBay + PayPal.

Beyond the clear product and network complementarity, what’s most exciting to me and my partners is the alignment of values and culture. Square and Afterpay share a vision of a future with more opportunity and fewer economic hurdles for all. As they build toward that future together, I’m confident that this combination is a winner. Square and Afterpay together will become the world’s next generation payment provider.

Cloud infrastructure market kept growing in Q2, reaching $42B

By Ron Miller

It’s often said in baseball that a prospect has a high ceiling, reflecting the tremendous potential of a young player with plenty of room to get better. The same could be said for the cloud infrastructure market, which just keeps growing with little sign of slowing down any time soon. The market hit $42 billion in total revenue with all major vendors reporting, up $2 billion from Q1.

Synergy Research reports that the revenue grew at a speedy 39% clip, the fourth consecutive quarter that it has increased. AWS led the way per usual, but Microsoft continued growing at a rapid pace and Google also kept the momentum going.

AWS continues to defy market logic, actually increasing growth by 5% over the previous quarter at 37%, an amazing feat for a company with the market maturity of AWS. That accounted for $14.81 billion in revenue for Amazon’s cloud division, putting it close to a $60 billion run rate, good for a market leading 33% share. While that share has remained fairly steady for a number of years, the revenue continues to grow as the market pie grows ever larger.

Microsoft grew even faster at 51%, and while Microsoft cloud infrastructure data isn’t always easy to nail down, with 20% of market share according to Synergy Research, that puts it at $8.4 billion as it continues to push upward with revenue up from $7.8 billion last quarter.

Google too continued its slow and steady progress under the leadership of Thomas Kurian, leading the growth numbers with a 54% increase in cloud revenue in Q2 on revenue of $4.2 billion, good for 10% market share, the first time Google Cloud has reached double figures in Synergy’s quarterly tracking data. That’s up from $3.5 billion last quarter.

Synergy Research cloud infrastructure market share chart.

Image Credits: Synergy Research

After the Big 3, Alibaba held steady over Q1 at 6% (but will only report this week) with IBM falling a point from Q1 to 4% as Big Blue continues to struggle in pure infrastructure as it makes the transition to more of a hybrid cloud management player.

John Dinsdale, chief analyst at Synergy, says that the big three are spending big to help fuel this growth. “Amazon, Microsoft and Google in aggregate are typically investing over $25 billion in capex per quarter, much of which is going towards building and equipping their fleet of over 340 hyperscale data centers,” he said in a statement.

Meanwhile Canalys had similar numbers, but saw the overall market slightly higher at $47 billion. Their market share broke down to Amazon with 31%, Microsoft with 22% and Google with 8% of that total number.

Canalys analyst Blake Murray says that part of the reason companies are shifting workloads to the clouds is to help achieve environmental sustainability goals as the cloud vendors are working toward using more renewable energy to run their massive data centers.

“The best practices and technology utilized by these companies will filter to the rest of the industry, while customers will increasingly use cloud services to relieve some of their environmental responsibilities and meet sustainability goals,” Murray said in a statement.

Regardless of whether companies are moving to the cloud to get out of the data center business or because they hope to piggyback on the sustainability efforts of the big 3, companies are continuing a steady march to the cloud. With some estimates of worldwide cloud usage at around 25%, the potential for continued growth remains strong, especially with many markets still untapped outside the U.S.

That bodes well for the big three and for other smaller operators who can find a way to tap into slices of market share that add up to big revenue. “There remains a wealth of opportunity for smaller, more focused cloud providers, but it can be hard to look away from the eye-popping numbers coming out of the big three,” Dinsdale said.

In fact, it’s hard to see the ceiling for these companies any time in the foreseeable future.

Tech leaders can be the secret weapon for supercharging ESG goals

By Ram Iyer
Jeff Sternberg Contributor
Jeff Sternberg is a technical director in the Office of the CTO (OCTO) at Google Cloud, a team of technologists and industry experts that help Google Cloud's customers solve challenging problems and disrupt their industries.

Environmental, social and governance (ESG) factors should be key considerations for CTOs and technology leaders scaling next generation companies from day one. Investors are increasingly prioritizing startups that focus on ESG, with the growth of sustainable investing skyrocketing.

What’s driving this shift in mentality across every industry? It’s simple: Consumers are no longer willing to support companies that don’t prioritize sustainability. According to a survey conducted by IBM, the COVID-19 pandemic has elevated consumers’ focus on sustainability and their willingness to pay out of their own pockets for a sustainable future. In tandem, federal action on climate change is increasing, with the U.S. rejoining the Paris Climate Agreement and a recent executive order on climate commitments.

Over the past few years, we have seen an uptick in organizations setting long-term sustainability goals. However, CEOs and chief sustainability officers typically forecast these goals, and they are often long term and aspirational — leaving the near and midterm implementation of ESG programs to operations and technology teams.

Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering.

CTOs are a crucial part of the planning process, and in fact, can be the secret weapon to help their organization supercharge their ESG targets. Below are a few immediate steps that CTOs and technology leaders can take to achieve sustainability and make an ethical impact.

Reducing environmental impact

As more businesses digitize and more consumers use devices and cloud services, the energy needed by data centers continues to rise. In fact, data centers account for an estimated 1% of worldwide electricity usage. However, a forecast from IDC shows that the continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide from 2021 through 2024.

Make compute workloads more efficient: First, it’s important to understand the links between computing, power consumption and greenhouse gas emissions from fossil fuels. Making your app and compute workloads more efficient will reduce costs and energy requirements, thus reducing the carbon footprint of those workloads. In the cloud, tools like compute instance auto scaling and sizing recommendations make sure you’re not running too many or overprovisioned cloud VMs based on demand. You can also move to serverless computing, which does much of this scaling work automatically.

Deploy compute workloads in regions with lower carbon intensity: Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering. While the compute capabilities of regions are similar, their carbon intensities typically vary. Some regions have access to more carbon-free energy production than others, and consequently the carbon intensity for each region is different.

So, choosing a cloud region with lower carbon intensity is often the simplest and most impactful step you can take. Alistair Scott, co-founder and CTO of cloud infrastructure startup Infracost, underscores this sentiment: “Engineers want to do the right thing and reduce waste, and I think cloud providers can help with that. The key is to provide information in workflow, so the people who are responsible for infraprovisioning can weigh the CO2 impact versus other factors such as cost and data residency before they deploy.”

Another step is to estimate your specific workload’s carbon footprint using open-source software like Cloud Carbon Footprint, a project sponsored by ThoughtWorks. Etsy has open-sourced a similar tool called Cloud Jewels that estimates energy consumption based on cloud usage information. This is helping them track progress toward their target of reducing their energy intensity by 25% by 2025.

Make social impact

Beyond reducing environmental impact, CTOs and technology leaders can have significant, direct and meaningful social impact.

Include societal benefits in the design of your products: As a CTO or technology founder, you can help ensure that societal benefits are prioritized in your product roadmaps. For example, if you’re a fintech CTO, you can add product features to expand access to credit in underserved populations. Startups like LoanWell are on a mission to increase access to capital for those typically left out of the financial system and make the loan origination process more efficient and equitable.

When thinking about product design, a product needs to be as useful and effective as it is sustainable. By thinking about sustainability and societal impact as a core element of product innovation, there is an opportunity to differentiate yourself in socially beneficial ways. For example, Lush has been a pioneer of package-free solutions, and launched Lush Lens — a virtual package app leveraging cameras on mobile phones and AI to overlay product information. The company hit 2 million scans in its efforts to tackle the beauty industry’s excessive use of (plastic) packaging.

Responsible AI practices should be ingrained in the culture to avoid social harms: Machine learning and artificial intelligence have become central to the advanced, personalized digital experiences everyone is accustomed to — from product and content recommendations to spam filtering, trend forecasting and other “smart” behaviors.

It is therefore critical to incorporate responsible AI practices, so benefits from AI and ML can be realized by your entire user base and that inadvertent harm can be avoided. Start by establishing clear principles for working with AI responsibly, and translate those principles into processes and procedures. Think about AI responsibility reviews the same way you think about code reviews, automated testing and UX design. As a technical leader or founder, you get to establish what the process is.

Impact governance

Promoting governance does not stop with the board and CEO; CTOs play an important role, too.

Create a diverse and inclusive technology team: Compared to individual decision-makers, diverse teams make better decisions 87% of the time. Additionally, Gartner research found that in a diverse workforce, performance improves by 12% and intent to stay by 20%.

It is important to reinforce and demonstrate why diversity, equity and inclusion is important within a technology team. One way you can do this is by using data to inform your DEI efforts. You can establish a voluntary internal program to collect demographics, including gender, race and ethnicity, and this data will provide a baseline for identifying diversity gaps and measuring improvements. Consider going further by baking these improvements into your employee performance process, such as objectives and key results (OKRs). Make everyone accountable from the start, not just HR.

These are just a few of the ways CTOs and technology leaders can contribute to ESG progress in their companies. The first step, however, is to recognize the many ways you as a technology leader can make an impact from day one.

Reese Witherspoon’s Hello Sunshine sold to new media firm from former Disney execs

By Sarah Perez

Hello Sunshine, Reese Witherspoon’s media company that has produced content for streaming services like Hulu, Apple and HBO, among others, has been sold to a yet-unnamed new media firm run by former Disney execs, Kevin Mayer and Tom Staggs, the company announced this morning.

The Wall St. Journal first reported on the sale.

Deal terms were not officially disclosed, but reportedly, the sale values Hello Sunshine’s business at around $900 million, The WSJ says. The news outlet had previously reported Hello Sunshine was exploring a sale after receiving interest from a number of suitors, including Apple.

Hello Sunshine was co-founded by Witherspoon and Strand Equity founder and managing partner Seth Rodsky in 2016, and is best known for producing series like HBO’s “Big Little Lies,” Hulu’s “Little Fires Everywhere,” and Apple’s “The Morning Show,” which feature Witherspoon in starring roles.

But the company has also invested in other film and media projects, ranging from Facebook Watch series to collaborations with Amazon’s Audible. It now has upcoming film and TV projects on the slate with Netflix, Amazon, ABC and Starz, and recently announced a Kids & Animation division as well as the acquisition of Sara Rea’s SKR Production to expand into unscripted content.

In addition, the company operates an online and mobile book club app, Reese’s Book Club, now with 2.1 million followers. The club’s more popular picks are often turned into the shows and movies Hello Sunshine later produces.

Per Hello Sunshine’s announcement, the company will be the first acquisition by the new media venture run by Mayer and Staggs, which is backed by private equity firm Blackstone. The firm is spending more than $500 million in cash to purchase shares of Hello Sunshine from its investors, including AT&T and Emerson Collective, The WSJ noted.

Following the deal’s closure, the senior management team will continue to run Hello Sunshine’s day-to-day operations. Witherspoon and Hello Sunshine Chief Executive Sarah Harden will join the board of new company and retain significant equity holders in the new business.

Hello Sunshine will become a cornerstone of the new media company’s strategy, which will involve being an “independent, creator-friendly home for cutting-edge, high-quality, category-defining brands and franchises,” it says.

“Today marks a tremendous moment for Hello Sunshine. I started this company to change the way all women are seen in media. Over the past few years, we have watched our mission thrive through books, TV, film and social platforms. Today, we’re taking a huge step forward by partnering with Blackstone, which will enable us to tell even more entertaining, impactful and illuminating stories about women’s lives globally. I couldn’t be more excited about what this means for our future,” said Witherspoon in a statement about the deal.

The deal arrives at a time when there’s an uptick in consolidation happening the media business, as companies adjust to the shift away from traditional TV and standard movie releases to the always-on world of streaming and cord cutting. For example, Amazon in May announced it would buy MGM Studios for $8.45 billion — a deal being investigated by the FTC for potential antitrust issues. Meanwhile, WarnerMedia and Discovery around the same time announced their plans to merge operations, in hopes of taking a bigger bite out of the streaming market. Now, Comcast and ViacomCBS are exploring ways to work together, too.

But as traditional media companies begin to stream, like NBCU did with Peacock, for instance, they also pull back content licensed to other streamers, like Netflix. That drives demand for new sources of independent programming, like what Hello Sunshine produces.

The company’s value in this market comes from its pipeline of quality projects, many of which are pre-vetted by its book club members, who serve as a built-in audience and fan base for the later film or televised release. Plus, the projects it backs are also those that tell women’s stories — a historically neglected segment of the market, and one that Hello Sunshine’s success proves there’s pend-up demand for among viewers.

Blackstone’s investment in the new company is being made through its private equity business, which previously acquired a majority stake in dating app Bumble. Blackstone has made other entertainment industry investments, as well, including music rights organization SESAC; a Hollywood studio space and Burbank office real estate portfolio; global theme park operator Merlin Entertainments; online genealogy platform Ancestry.com; online mobile ad platforms Vungle and Liftoff; and Epidemic Sound, which delivers music to internet content creators.

Why Square is shelling out $29B to snag BNPL player Afterpay

By Alex Wilhelm

Shares of Square are up this morning after the company announced its second-quarter earnings and that it will buy Afterpay, an Australian buy now, pay later (BNPL) player in a $29 billion deal. As TechCrunch reported this morning, Afterpay shareholders will receive 0.375 shares of Square in exchange for their existing equity.

Shares of Afterpay are sharply higher after the deal was announced thanks to its implied premium, while shares of Square are up 7% in early-morning trading.


The Exchange explores startups, markets and money.

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Over the past year, we’ve written extensively about the BNPL market, usually from the perspective of earnings from companies in the space. Afterpay has been a key data source, along with the yet-private Klarna and U.S. public BNPL outfit Affirm. Recall that each company has posted strong growth in recent periods, with the United States arising as a prime competitive market.

Most recently, consumer hardware and services giant Apple is reportedly preparing a move into the BNPL space. Our read at the time was that any such movement by Cupertino would impact mass-market BNPL players more than niche-focused companies. Apple has a fintech base and broad IRL payment acceptance, making it a potentially strong competitor for BNPL services aimed at consumers; BNPL services targeted at particular industries or niches would likely see less competition from Apple.

From that landscape, let’s explore the Square-Afterpay deal. We want to know what Afterpay brings to Square in terms of revenue, growth and reach. We also want to do some math on the price Square is willing to pay for the company — and what that might tell us about the value of BNPL and fintech revenues more broadly. Then we’ll eyeball the numbers and try to decide if Square is overpaying for Afterpay.

What Afterpay brings to Square

As with most major deals these days, Square and Afterpay released an investor presentation detailing their argument in favor of their combination. Let’s dig through it.

Square is a two-part company. It has a large consumer business via Cash App, and it has a large business division that offers payments tech and other fintech services to corporate customers. Recall that Square is also building out banking services for its business customers and that Cash App also serves some banking and investing functionality for consumers.

Hear Startup Alley companies pitch expert VC judges on the next episode of Extra Crunch Live

By Jordan Crook

We know how much you love a good startup pitch-off. Who doesn’t? It combines the thrill of live, high-stakes entertainment with learning about the hottest new thing. Plus, you get to hear feedback from some of the smartest folks in the industry, thus learning how to absolutely crush it at your next pitch meeting with a VC.

With all that in mind, we’re introducing a special summer edition of Extra Crunch Live that’s all pitch-off, all the time.

On August 4, Extra Crunch Live will feature startups exhibiting in the Startup Alley at TechCrunch Disrupt 2021 in September. Those startups will pitch their products/businesses to a pair of expert VC judges, who will then give their live feedback.

Extra Crunch Live is usually a combination of an interview with a founder/investor duo and an audience pitch-off. But as it’s summer, and Disrupt is right around the corner, we thought it would be fun to bring you even more pitches and even more feedback.

On August 4, our expert VC judges will be Edith Yeung from Race Capital and Laela Sturdy of CapitalG. Register here for free!

Edith Yeung started out as an investor at 500 Startups and is now a general partner at Race Capital. She’s an expert on both the China and Silicon Valley investment landscape and has made more than 50 investments, with a portfolio that includes 50 startups, including Lightyear/Stellar (valued $1.2 billion), Silk Labs (acquired by Apple), Chirp (acquired by Apple), Fleksy (acquired by Pinterest), Human (acquired by Mapbox), Solana, Oasis Labs, Nebulas, Hooked, DayDayCook, AISense and many more.

Laela Sturdy is a 10x unicorn operator-turned-investor whose investments are worth nearly $200 billion. She joined CapitalG, the investment arm of Alphabet, in 2013, and her portfolio includes Stripe, UiPath, Duolingo, Gusto, Webflow and Unqork, among many others.

As a special thank you, all attendees of this episode of Extra Crunch Live will be entered into a random drawing for a chance to win one of three free tickets to TechCrunch Disrupt 2021. Following the event, we’ll randomly select three winners and send details on how to redeem their passes. Do you need to submit any additional information to enter the drawing? Nope. All you need to do is register for Extra Crunch Live by clicking here and attend the event on August 4.

The tale of two edtech IPOs

By Natasha Mascarenhas

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. Last week, Natasha and Alex jumped on Twitter Spaces to discuss the tale of two edtech IPOs: Duolingo, the consumer language learning company, and Powerschool, the enterprise K-12 software platform. It was a rare moment in the sun for the recently-revitalized sector, which saw two companies list on the NASDAQ on the same dang day.

Special shout out to our producer Chris Gates for handling this impromptu live chat, tech difficulties and all, and bringing it to your ears on this lovely Monday. Don’t forget that Equity is largely on break this week!

Here’s what we got into, featuring some edtech entrepreneurs nice enough to drop on by:

  • China’s edtech crackdown and how it is impacting startups both internationally and domestically. The regulations, one of which will force for-profit tutoring companies to turn into non-profits, are also getting the cold shoulder from U.S. edtech VCs, it seems.
  •  As Lightspeed Ventures investor Mercedes Bent so aptly put it, the news is somewhat ironic: “[T]he US edtech IPO market is on fire (after being dormant for so long) and the China edtech market is crumbling (after being on fire for so long).”
  • Evidence of that can be found in the Duolingo IPO pricing arc. The company first posted a strong estimate of its worth, raised its range, priced above that raised interval, and still managed to trade higher. The company is still up more than $30 from its IPO price.
  • Powerschool was a bit different. It priced at $18 per share, the low-end of its $18 to $20 range. The company is up from its IPO price, albeit a much more modest two, or three percent in today’s early trading.

In the second half of the show, we brought on the following host of edtech founders to share their hot takes about the current state of edtech:

Before we go, Equity is on a “break” this week, as we do some soul searching and refresh before our next run of shows. Obviously we still had to shaare this episode, and um, are recording another episode this week too, but you, my dear friend, will hear from us again next Monday.

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

Yaydoo secures $20M, aims to simplify B2B collections, payments

By Christine Hall

It’s no secret that the technology for easy business-to-business payments has not yet caught up to its peer-to-peer counterparts, but Yaydoo thinks it has the answer.

The Mexico City-based B2B software and payments company provides three products, VendorPlace, P-Card and PorCobrar, for managing cash flow, optimizing access to smart liquidity, and connecting small, midsize and large businesses to an ecosystem of digital tools.

Sergio Almaguer, Guillermo Treviño and Roberto Flores founded Yaydoo — the name combines “yay” and “do” to show the happiness of doing something — in 2017. Today, the company announced the close of a $20.4 million Series A round co-led by Base10 Partners and monashees.

Joining them in the round were SoftBank’s Latin America Fund and Leap Global Partners. In total, Yaydoo has raised $21.5 million, Almaguer told TechCrunch.

Prior to starting the company, Almaguer was working at another company in Mexico doing point-of-sale. His large enterprise customers wanted automation for their payments, but he noticed that the same tools were too expensive for small businesses.

The co-founders started Yaydoo to provide procurement, accounts payable and accounts receivables, but in a simpler format so that the collection and payment of B2B transactions was affordable for small businesses.

Image Credits: Yaydoo

The idea is taking off, and vendors are adding their own customers so that they are all part of the network to better link invoices to purchase orders and then connect to accounts payable, Almaguer said. Yaydoo estimates that the automation workflows reduced 80% of time wasted paying vendors, on average.

Yaydoo is joining a sector of fintech that is heating up — the global B2B payments market is valued at $120 trillion annually. Last week, B2B payments platform Nium announced a $200 million in Series D funding on a $1 billion valuation. Others attracting funding recently include Paystand, which raised $50 million in Series C funding to make B2B payments cashless, while Dwolla raised $21 million for its API that allows companies to build and facilitate fast payments.

The new funding will enable the company to attract new hires in Mexico and when the company expands into other Latin American countries. Yaydoo is also looking at future opportunities for its working capital business, like understanding how many invoices customers are setting, the access to actual payments, and how money flows out and in so that it can provide insights on working capital funding gaps. The company will also invest in product development.

The company has grown to over 800 customers, up from 200 in the first quarter of 2020. Its headcount also grew to 100 from 30 during the same time. In the last 12 months, over 70,000 companies have transacted on the Yaydoo network, and total payment volume grew to hundreds of millions of dollars.

Yaydoo is a SaaS subscription model, but the new funding will also enable the company to create a pool of potential customers with a “freemium” offering with the goal of converting those customers into the subscription model as they grow, Almaguer said.

Rexhi Dollaku, partner at Base10 Partners, said the firm saw the way B2B payments were becoming modernized and “was impressed” by the Yaydoo team and how it built a complicated infrastructure, but made it easy to use.

He believes Latin America is 10 years behind in terms of B2B payments but will catch up sooner than later because of the digital transformation going on in the region.

“We are starting to see early signs of the network being built out of the payments product, and that is a good indication,” Dollaku said. “With the funding, Yaydoo will be also able to provide more financial services options for businesses to address a working fund gap.”

Newtopia closes first fund of $50M to invest in LatAm startups

By Christine Hall

Early-stage venture capital fund Newtopia VC launched Monday with $50 million to invest in tech startups based in Latin America.

The fund will invest between $250,000 and $1 million in startups at the seed stage to help them achieve the milestones needed on the path to raising a Series A.

Newtopia is led by five major players in the regional entrepreneurial ecosystem:

  • Patricio Jutard, co-founder of MURAL;
  • Mariano Mayer, former national secretary for entrepreneurs and SMEs in Argentina and founder of Marea Venture Partners;
  • Sacha Spitz, co-founder and partner of Yavu Ventures and former director at the Universidad de San Andrés incubation program;
  • Jorge Aguado, former national science, technology and innovation secretary in Argentina;
  • Juan Pablo Lafosse, founder and former CEO of Almundo.

The group has already invested in startups in Mexico, Brazil and Argentina, including Aleph (B2B SaaS for e-commerce), Apperto (social commerce), Choiz (healthtech), Exactly (DeFi), Elevva (e-commerce brands), Inipay (fintech), Leef (sustainability), Wibson (e-privacy) and Yerbo (wellness).

Mayer told TechCrunch that he sees a great moment happening in Latin America around global venture capital firms — like Sequoia Capital, Andreessen Horowitz and SoftBank —making bets in the region, especially targeting later-stage investments. There are home-grown venture capital firms doing well, too, citing Kazek’s $1 billion funds.

“However, we see a gap in investments in seed and road to Series A,” he added. “We aim to help entrepreneurs in those stages. Newtopia started with conversations during the pandemic, and now we see a big momentum for transformation of traditional sectors and the talent to make businesses out of these opportunities.”

Newtopia is offering both investment and a hands-on mentorship model to guide startups through the initial stages so they can grow regionally or globally. The fund has already amassed a community of more than 70 founders to invest, advise and be venture partners to the portfolio companies.

The Newtopia 10-Week Program works with companies to find product-market fit, achieve initial goals and set a foundation for further growth. The firm opened the call for applicants and will select 10 startups to receive a spot in the program and $100,000 each.

By taking a lead in early-stage investing, it will feed the rest of the venture capital firms that are doing later-stage investing, Mayer said.

He sees investments growing in Latin America every year, estimating there was a record $4 billion spread across the region, turning some companies into unicorns, including Jutard’s Mural, which raised $50 million in July. That has more than validated that there will be more money in coming years, Mayer added.

Jutard said the fund’s founders were all investing or mentoring companies on their own, but the new funding will enable them to structure that assistance to help hundreds of startups rather than a handful.

“Early-stage companies go through an emotional rollercoaster where they feel alone, encounter times when it is hard to sell their product or recruit, so we are focused on building a community of support,” Jutard added.

Element Ventures pulls in $130M to double-down on the fintech enterprise trend

By Mike Butcher

With the rise of Open Banking, PSD2 Regulation, insurtech and the whole, general fintech boom, tech investors have realized there is an increasing place for dedicated funds which double down on this ongoing movement. When you look at the rise of banking-as-a-service offerings, payments platforms, insurtech, asset management and infrastructure providers, you realize there is a pretty huge revolution going on.

European fintech companies have raised $12.3 billion in 2021 according to Dealroom, but the market is still wide open for a great deal more funding for B2B fintech startups.

So it’s no surprise that B2B fintech-focused Element Ventures has announced a $130 million fund to double down on this new fintech enterprise trend.

Founded by financial services veterans Stephen Gibson and Michael McFadgen, and joined by Spencer Lake (HSBC’s former vice chairman of Global Banking and Markets), Element is backed by finance-oriented LPs and some 30 founders and executives from the sector.

Element says it will focus on what it calls a “high conviction investment strategy,” which will mean investing in only around a handful of companies a year (15 for the fund in total) but, it says, providing a “high level of support” to its portfolio.

So far it has backed B2B fintech firms across the U.K. and Europe, including Hepster (total raised $10 million), the embedded insurance platform out of Germany which I recently reported on; Billhop (total raised $6.7 million), the B2B payment network out of Sweden; Coincover (total raised $11.6 million), a cryptocurrency recovery service out of the U.K.; and Minna (total raised $25 million), the subscription management platform out of Sweden.

Speaking to me over a call, McFadgen, partner at Element Ventures, said: “Stephen and I have been investing in B2B fintech together for quite a long time. In 2018 we had the opportunity to start element and Spencer came on board in 2019. So Element as an independent venture firm is really a continuation of a strategy we’ve been involved in for a long time.”

Gibson added: “We are quite convinced by the European movement and the breakthrough these fintech and insurtech firms in Europe are having. Insurance has been a desert for innovation and that is changing. And you can see that we’re sort of trying to build a network around companies that have those breakthrough moments and provide not just capital but all the other things we think are part of the story. Building the company from A to C and D is the area that we try and roll our sleeves up and help these firms.”

Element says it also will be investing in the U.S. and Asia.

BoxGroup closes on $255M across two funds to back startups at their earliest stages

By Mary Ann Azevedo

BoxGroup has quietly, yet diligently, been funding companies at the early stage for over a decade. The 11-year-old firm in fact was the first investor in Plaid, a fintech company that nearly got sold to Visa last year for billions of dollars.

It has seen a number of impressive exits over the years, proving an eye that can detect winners before the winners themselves may even realize it. In fact, it’s that early faith in companies that partner David Tisch believes has been key to BoxGroup’s success.

“If you’re starting a company and you’re going to raise money, that first yes is the hardest. And it’s that’s the one that gives you the confidence, the excitement – to know that there’s somebody out there that’s going to believe in this and give you money for it,” Partner David Tisch told TechCrunch. “We really do try to pride ourselves on being that first yes on a regular basis. So the earlier we meet companies, the better.”

Today, BoxGroup is announcing it has beefed up its war chest so that it can be that “first yes” to more companies with the closure of two new funds totaling $255 million of capital. BoxGroup Five is the firm’s fifth early stage fund, and is aimed at investing in emerging tech companies at the pre-seed and seed stages. BoxGroup Strive is its second opportunity fund that will back companies in their subsequent follow-on rounds. Each fund amounts to $127.5 million. 

Over the years, BoxGroup has made over 300 investments including having invested in the earliest rounds of Ro, Plaid, Airtable, Workrise, Scopely, Bowery Farms, Ramp, Titan, Warby Parker, Classpass, Guideline and Glossier. It has had a number of impressive exits in Flatiron Health, PillPack, Matterport, Oscar, Mirror, Bark, Bread and Trello. 

Besides being the first firm to write Plaid a check, BoxGroup was also the first investor in PillPack, which ended up selling to Amazon for just under $1 billion in 2018.

BoxGroup Five – the firm’s early-stage fund – will invest in about 40 to 50 new companies a year with investments ranging from $250,000 to $1 million.

“We want to be the second or third biggest check in a round,” Tisch said.

Image Credits: BoxGroup; Adam Rothenberg (left), Nimi Katragadda (bottom), Greg Rosen (top), David Tisch (right)

The opportunity fund occasionally makes later-stage investments in new companies, but mostly just continues to support companies it invested in at an earlier stage. For example, BoxGroup first invested in id.me in 2010.

“The company is sort of an 11-year overnight success that we’ve been backing for over a decade now,” Tisch said. “It’s an example of us just continuing to support companies through their life cycle.”

BoxGroup also pre-seeded digital healthcare startup Ro, but also funded every round it’s raised since, including its most recent $500 million funding at a $5 billion valuation

Tisch describes the BoxGroup six-person team as “generalists” in terms of the spaces it invests in, with a portfolio consisting of startups in the consumer, enterprise, fintech, healthcare, marketplace, synthetic biology and climate sectors.

Interestingly, BoxGroup’s last fund closures – which totaled $165 million – marked the first time the firm had accepted outside capital in nine years. Prior to that point, it had been funded with only personal capital. Its LPs are a mixed group of endowments, foundations and family offices.

For BoxGroup, building authentic relationships with founders is at the root of what the firm does, says Partner Nimi Katragadda. That includes taking bets on founders, sometimes more than once, even if one of their companies didn’t work out. It means backing just ideas in some cases, and people.

“This cannot be transactional, it has to be personal,” she said. “We want to go on a journey with someone for a decade as they build their business…. We’re comfortable with what early means, including a lot of assumptions, more vision than traction, and raw product.”

Partner Adam Rothenberg agrees, saying: “Our goal is to be the friend in the room. We believe in honesty, tough love, and transparency in building relationships with founders. We focus on the “how” more than the “what” — how a founder thinks, how they will build product, and how they think about attracting talent.”

With offices in San Francisco and New York, the firm will likely be growing in the near future as BoxGroup is looking to add on some “first-line investors,” Tisch said.

Recently, Greg Rosen was named a partner at the firm. Rosen originally joined BoxGroup in 2015, where he spent three years before leaving to join Benchmark. He re-joined BoxGroup in early 2020 and joins the firm’s three other partners: Tisch, Rothenberg and Katragadda. 

While the world of venture is crazy hot right now, Tisch said the firm keeps itself grounded with a wisdom that can only be gained with experience and in time.

“There is seemingly infinite capital waiting to be deployed,” he said. “Without calling the cycle, we know that over time markets go up and down…No matter where we are in a given cycle, smart and determined minds will come together to build important technology companies. Our job is to make sure we are meeting those founders and choosing wisely about which ones to partner with for 10+ year journeys.”

Singapore-based Nektar.ai gets $6M to help B2B sales team collaborate more effectively

By Catherine Shu

A photo of Nektar.ai founders Aravind Ravi Sulekha and Abhijeet Vijayvergiya

Nektar.ai founders Aravind Ravi Sulekha and Abhijeet Vijayvergiya

Organizing information about prospective deals is a challenging task for B2B sales teams, since salespeople usually rely on multiple tools (email, Zoom, WhatsApp, etc) to talk with buyer committees. It becomes even more unwieldy when sales teams work remotely. Nektar.ai is a B2B sales productivity startup that wants to help sales team by reducing the amount of time they spend on manual data entry and providing analytics that can increase their revenue. The Singapore-based company announced today it has raised $6 million in seed funding, led by B Capital Group.

3One4 Capital and returning investor Nexus Venture Partners also participated, along with angel investors like Amit Midha, president of Asia Pacific and Japan at Dell; Ritesh Agarwal the founder and CEO of OYO Hotels;, Kevin Merritt, former president of Tyler Technologies’ data and insights division; Evan Davidson, SentinelOne’s vice president of Asia Pacific and Japan; Deep Nishar, senior managing partner at SoftBank Investment Advisers; and Tom Donlea, Ekata’s vice president and general manager of APAC.

Combined with its previous round, $2.15 million led by Nexus Venture Partners and announced in November 2020, the new funding brings Nektar.ai’s total seed capital to $8.1 million. The company says this is one of the largest seed rounds ever for a SaaS company based in Asia. Nektar.ai’s workforce is remote-first and the company says half of its team are women.

Nektar.ai has been in stealth mode since it was founded in 2020 by Abhijeet Vijayvergiya and Aravind Ravi Sulekha, working with hundreds of clients in private beta mode. Its waitlist is currently open for sign-ups, with plans to launch publicly in the first half of 2022. Part of Nektar.ai’s seed funding will be used to build a go-to-market team focused on the United States.

Nektar.ai was designed for SaaS revenue teams who have to manage information across many channels, including email, calendars, web conferences, Slack, CRM tools, LinkedIn and WhatsApp. This makes it hard for them to collaborate, follow playbooks (or sets of best practices) and get a full understanding of their deals pipeline and revenue. Nektar.ai integrates with different apps, surfaces key data and delivers it to the most convenient collaboration tool for a team, like Slack.

Vijayvergiya told TechCrunch that over the last six months, Nektar.ai accelerated product development because “we saw a strong demand for a guided selling solution in the market,” onboarding more than 200 prospects from its waitlist.

Nektar.ai launched a web console for managers, a Chrome extension and integrations with Salesforce, Google Workspace and Slack. It also added a new feature called Capture Bot, an AI-based system that automatically extracts important information from salespeople’ online interactions with buyer committees, surfacing data that would otherwise be tucked away in different inboxes and calendars. This increases the accuracy of their CRM tools and allows sales managers to see how engaged their teams are with potential customers and how prospective deals are progressing.

For individual representatives, Nektar.ai’s tools let them spend less time on manual data entry. They also get analytics like multithreading scores that help them identify how deals were won or lost. For example, Vijayvergiya said one client found they won deals if they had at least four contacts with a buyer committee after the demo stage. As a result, its sales representatives began engaging with more than four members of the buyer committee on all potential deals.

Another way Nektar.ai helps SaaS sales teams save money and time is building databases of first-party contacts from their inboxes. Vijayvergiya said one client was able to save $50,000 by organizing their existing contacts instead of purchasing third-party contact data.

In a statement, B Capital Group general partner Gabe Greenbaum said, “Nektar.ai’s solutions provide great value to distributed revenue teams, which is even more important as enterprises conduct further business across global markets. B Capital is always eager to work with experienced and knowledgeable founders, and we’re confident that Abhijeet, Aravind and the Nektar.ai team will continue their strong momentum on the path to becoming the industry-leading tool for enterprise sales productivity.”

Mixlab raises $20M to provide purrfect pharmacy experience for pet parents

By Christine Hall

Pet pharmacy Mixlab has developed a digital platform enabling veterinarians to prescribe medications and have them delivered — sometimes on the same day — to pet parents.

The New York-based company raised a $20 million Series A in a round of funding led by Sonoma Brands and including Global Founders Capital, Monogram Capital, Lakehouse Ventures and Brand Foundry. The new investment gives Mixlab total funding of $30 million, said Fred Dijols, co-founder and CEO of Mixlab.

Dijols and Stella Kim, chief experience officer, co-founded Mixlab in 2017 to provide a better pharmacy experience, with the veterinarian at the center.

Dijols’ background is in medical devices as well as healthcare investment banking, where he became interested in the pharmacy industry, following TruePill and PillPack, which he told TechCrunch were “creating a modern pharmacy model.”

As more pharmacy experiences revolved around at-home delivery, he found the veterinary side of pharmacy was not keeping up. He met Kim, a user experience expert, whose family owns a pharmacy, and wanted to bring technology into the industry.

“The pharmacy industry is changing a lot, and technology allows us to personalize the care and experience for the veterinarian, pet parent and the pet,” Kim said. “Customer service is important in healthcare as is dignity and empathy. We kept that in mind when starting Mixlab. Many companies use technology to remove the human element, but we use it to elevate it.”

Mixlab’s technology includes a digital service for veterinarians to streamline their daily medication workflow and gives them back time to spend with patient care. The platform manages the home delivery of medications across branded, generic and over-the-counter medications, as well as reduces a clinic’s on-site pharmacy inventories. Veterinarians can write prescriptions in seconds and track medication progress and therapy compliance.

The company also operates its own compound pharmacy where it specializes in making medications on-demand that are flavored and dosed.

On the pet parent side, they no longer have to wait up to a week for medications nor have to drive over to the clinic to pick them up. Medications come in a personalized care package that includes a note from the pharmacist, clear and easy-to-read instructions and a new toy.

Over the past year, adoptions of pets spiked as more people were at home, also leading to an increase in vet visits. This also caused the global pet care industry to boom, and it is now projected to reach $343 billion by 2030, when it had been valued at $208 billion in 2020.

Pet parents are also spending more on their pets, and a Morgan Stanley report showed that they see pets as part of their family, and as a result, 37% of people said they would take on debt to pay for a pet’s medical expenses, while 29% would put a pet’s needs before their own.

To meet the increased demand in veterinary care, the company will use the new funding to improve its technology and expand into more locations where it can provide same-day delivery. Currently it is shipping to 47 states and Dijols expects to be completely national by the end of the year. He also expects to hire more people on both the sales team and in executive leadership positions.

The company is already operating in New York and Los Angeles and growing 3x year over year, though Dijols admits operating during the pandemic was a bit challenging due to “a massive surge of orders” that came in as veterinarians had to shut down their offices.

As part of the investment, Keith Levy, operating partner at Sonoma Brands and former president of pet food manufacturer Royal Canin USA, will join Mixlab’s board of directors. Sonoma Brands is focused on growth sectors of the consumer economy, and pets was one of the areas that investors were interested in.

Over time, Sonoma found that within the veterinary community, there was space for a lot of players. However, veterinarians want to home in on one company they trust, and Mixlab fit that description for many because they were getting medication out faster, Levy said.

“What Mixlab is doing isn’t completely unique, but they are doing it better,” he added. “When we looked at their customer service metrics, we saw they had a good reputation and were relentlessly focused on providing a better experience.”

E-scooter company Fenix acquires Palm for $5M, gains entry to Turkish market

By Rebecca Bellan

Abu Dhabi-based micromobility company Fenix has acquired Palm, a shared e-scooter company in Turkey, for $5 million – the exact amount the company raised last November and this past February during its seed round.

Despite having not even raised a Series A round yet, Fenix scrounged together the cash and equity needed to fund this buy and stretch into Turkey, calling on additional capital from existing investors Maniv Mobility and Emkan Capital. Fenix would not disclose the terms of the acquisition or how much it recently raised.

This acquisition marks Fenix’s expansion into its fifth Middle Eastern country and 13th city since its launch last November, making it the largest shared micromobility operator in the region, ahead of regional competitors KIWIride, Careem and Arnab Mobility.

“Palm has a meaningful presence in Istanbul, and the city will be a major focus for our company in the near term,” Jaideep Dhanoa, co-founder and CEO, told TechCrunch. “Beyond Istanbul, we see tremendous opportunity across Turkey. The country is home to 83 million people and there are 24 cities with a million or more people. Mersin, for example, is another coastal city Palm operates in today where we will continue to invest.”

Berhan Goskin and Alican İstanbullu, Palm’s founders, will continue to lead the company and Fenix’s expansion plans across Turkey. Existing Palm shareholders will also migrate over and support Fenix’s efforts to lead the market in Turkey, according to a statement from the company.

The Palm acquisition not only hands off Palm’s fleet of around 1,500 Ninebot e-scooters to Fenix, bringing the startup’s total vehicle size up to 10,000, but it also gives Fenix a built-in permit with Istanbul, a city of 15.5 million people.

“Recently the Turkey Ministry of Transport legalized shared e-scooters nationally in a very progressive and pro-competition manner,” said Dhanoa. “This regulatory clarity increased the attractiveness of the market for investment and was a significant motivator for the transaction. There are several local market requirements to qualify for a five-year license which is partially why we went in inorganically. With Palm we now have a five-year license for e-scooter sharing in Turkey and expect to receive permits in some of the highest potential  districts in the country.”

Istanbul’s first round of applications for capped e-scooter permits were due earlier this month, so the acquisition means Fenix didn’t need to apply for a new license. It will, however, have to comply with all local Turkey market requirements.

Fenix says it will begin deploying several thousands of its vehicles, laden with built-in hand sanitizers, in August, adding to Palm’s existing fleet, which will be rebranded to reflect new ownership. Fenix did not disclose who its manufacturing partner is for its vehicles, but told TechCrunch that it’s “not one of the usual suspects” and that the partnership is exclusive and involves a co-development of custom vehicles for their markets.

As part of its entry into Istanbul, Fenix also has plans to establish an R&D center on the ground for software and hardware in order to “develop breakthrough technologies for the Turkish market and to export to the Greater Middle East region,” according to a statement.

“Turkey has some of the top tech talent in the broader region, and now that we’ll also be operating there, we’re excited about leveraging that talent pool to help us craft solutions for the Turkey market, as well as apply them to the rest of our network,” IQ Sayed, co-founder and CTO, told TechCrunch. “This holds for all our offerings and all parts of our tech stack, but I’m especially looking forward to augmenting our payments tech, machine learning and IoT capabilities there.  We will also be looking into local manufacturing opportunities.”
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